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.)

In this case, it cannot be determined with certainty which between the parties is the first infractor. It could be GSIS because of the high probability that even before the execution of the agreements, real property taxes were already imposed and unpaid such that when GSIS applied for building permits, the tax liability was already in the substantial amount of P54 million. It was just that GSIS could not have been mindful of the same because of its stand that it is tax exempt. But as this cannot be conclusively presumed, there exists an uncertainty as to which between the failure to comply on the part of each party came first; hence, the last portion of Article 1192 finds application. Pursuant thereto, the parties’ respective claims for damages are thus deemed extinguished and each of them shall bear its own damage. Goldloop Properties, Inc. vs. Government Service Insurance System;  G.R. No. 171076, August 1, 2012.

Contracts; rescission by reason of subject being under litigation; resolution of litigation is not a condition to rescission.  Contracts which are rescissible due to fraud or bad faith include those which involve things under litigation, if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority. Thus, Article 1381(4) of the Civil Code provides: “The following contracts are rescissible: x x x x (4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority[.]”

The rescission of a contract under Article 1381(4) of the Civil Code only requires the concurrence of the following: first, the defendant, during the pendency of the case, enters into a contract which refers to the thing subject of litigation; and second, the said contract was entered into without the knowledge and approval of the litigants or of a competent judicial authority. As long as the foregoing requisites concur, it becomes the duty of the court to order the rescission of the said contract.

It bears stressing that the right to ask for the rescission of a contract under Article 1381(4) of the Civil Code is not contingent upon the final determination of the ownership of the thing subject of litigation. The primordial purpose of Article 1381(4) of the Civil Code is to secure the possible effectivity of the impending judgment by a court with respect to the thing subject of litigation. It seeks to protect the binding effect of a court’s impending adjudication vis-à-vis the thing subject of litigation regardless of which among the contending claims therein would subsequently be upheld. Accordingly, a definitive judicial determination with respect to the thing subject of litigation is not a condition sine qua non before the rescissory action contemplated under Article 1381(4) of the Civil Code may be instituted. Lilia B. Luz, et al. vs. Florante Baylon; G.R. No. 182435, August 13, 2012.

Damages; moral; exemplary; attorney’s fees. To be recoverable, moral damages must be capable of proof and must be actually proved with a reasonable degree of certainty. Courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages. Yet, nothing was adduced here to justify the grant of moral damages. What we have was only the allegation on moral damages, with the complaint stating that the respondents had been forced to litigate, and that they had suffered mental anguish, serious anxiety and wounded feelings from the petitioner’s refusal to restore the possession of the land in question to them. The allegation did not suffice, for allegation was not proof of the facts alleged.

The Court cannot also affirm the exemplary damages granted in favor of the respondents. Exemplary damages were proper only if the respondents, as the plaintiffs, showed their entitlement to moral, temperate or compensatory damages. Yet, they did not establish their entitlement to such other damages.

As to attorney’s fees, the general rule is that such fees cannot be recovered by a successful litigant as part of the damages to be assessed against the losing party because of the policy that no premium should be placed on the right to litigate. Indeed, prior to the effectivity of the present Civil Code, such fees could be recovered only when there was a stipulation to that effect. It was only under the present Civil Code that the right to collect attorney’s fees in the cases mentioned in Article 2208 of the Civil Code came to be recognized. Such fees are now included in the concept of actual damages.

Even so, whenever attorney’s fees are proper in a case, the decision rendered therein should still expressly state the factual basis and legal justification for granting them. Numeriano P. Abobon vs. Felicitas Abata Abobon, et al.; G.R. No. 155830, August 15, 2012.

Family relations; filiation and support. There are four significant procedural aspects of a traditional paternity action that parties have to face: a prima facie case, affirmative defenses, presumption of legitimacy, and physical resemblance between the putative father and the child.  We explained that a prima facie case exists if a woman declares — supported by corroborative proof — that she had sexual relations with the putative father; at this point, the burden of evidence shifts to the putative father. We explained further that the two affirmative defenses available to the putative father are: (1) incapability of sexual relations with the mother due to either physical absence or impotency, or (2) that the mother had sexual relations with other men at the time of conception.

Since filiation is beyond question, support follows as a matter of obligation; a parent is obliged to support his child, whether legitimate or illegitimate. Support consists of everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family. Thus, the amount of support is variable and, for this reason, no final judgment on the amount of support is made as the amount shall be in proportion to the resources or means of the giver and the necessities of the recipient. It may be reduced or increased proportionately according to the reduction or increase of the necessities of the recipient and the resources or means of the person obliged to support. Charles Gotardo v. Divina Buling;  G.R. No. 165166, August 15, 2012.

Property; dried-up riverbed.  If indeed a property was the former bed of a creek that changed its course and passed through the property of the claimant, then, pursuant to Article 461, the ownership of the old bed left to dry by the change of course was automatically acquired by the claimant. Before such a conclusion can be reached, the fact of natural abandonment of the old course must be shown, that is, it must be proven that the creek indeed changed its course without artificial or man-made intervention. Thus, the claimant, in this case the Reyeses, must prove three key elements by clear and convincing evidence. These are: (1) the old course of the creek, (2) the new course of the creek, and (3) the change of course of the creek from the old location to the new location by natural occurrence.

In this regard, the Reyeses failed to adduce indubitable evidence to prove the old course, its natural abandonment and the new course. In the face of a Torrens title issued by the government, which is presumed to have been regularly issued, the evidence of the Reyeses was clearly wanting. Uncorroborated testimonial evidence will not suffice to convince the Court to order the reconveyance of the property to them. Spouses Crispin Galang and Caridad Galang vs. Spouses Conrado S. Reyes and Fe De Kastro Reyes (As substituted by their legal heir: Hermenigildo K. Reyes); G.R. No. 184746, August 8, 2012.

Property; possession as right of the owner. It is beyond question under the law that the owner has not only the right to enjoy and dispose of a thing without other limitations than those established by law, but also the right of action against the holder and possessor of the thing in order to recover it. He may exclude any person from the enjoyment and disposal of the thing, and, for this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.  Numeriano P. Abobon vs. Felicitas Abata Abobon, et al.; G.R. No. 155830, August 15, 2012.

Special Laws

Family Code; family home’s exemption from foreclosure.  Spouses Fortaleza’s argument that the subject property is exempt from forced sale because it is a family home deserves scant consideration. As a rule, the family home is exempt from execution, forced sale or attachment. However, Article 155(3) of the Family Code explicitly allows the forced sale of a family home “for debts secured by mortgages on the premises before or after such constitution.” In this case, there is no doubt that spouses Fortaleza voluntarily executed on January 28, 1998 a deed of Real Estate Mortgage over the subject property which was even notarized by their original counsel of record. And assuming that the property is exempt from forced sale, spouses Fortaleza did not set up and prove to the Sheriff such exemption from forced sale before it was sold at the public auction. Sps. Charlie Fortaleza and Ofelia Fortaleza vs. Sps. Raul Lapitan and Rona Lapitan; G.R. No. 178288, August 15, 2012.

P.D. No. 1529; collateral attack on titles is not allowed. In order for him to properly assail the validity of the respondents’ TCT, he must himself bring an action for that purpose. Instead of bringing that direct action, he mounted his attack as a merely defensive allegation herein. Such manner of attack against the TCT was a collateral one, which was disallowed by Section 48 of Presidential Decree No. 1529. Numeriano P. Abobon vs. Felicitas Abata Abobon, et al.; G.R. No. 155830, August 15, 2012.

P.D. No. 1529; registration of title. The present rule on the matter then requires that an application for original registration be accompanied by: (1) CENRO or PENRO Certification; and (2) a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. Medida failed in this respect. The records only include CENRO Certifications on the subject properties’ alienability and disposability, but not a copy of the original classification approved by the DENR Secretary and certified as true copy by its legal custodian.

Furthermore, even the CENRO Certifications filed before this Court deserve scant consideration since these were not presented during the trial. The genuineness and due execution of these documents had not been duly proven in the manner required by law.

In view of the failure of the respondent to establish by sufficient proof that the subject parcels of land had been classified as part of the alienable and disposable land of the public domain, his application for registration of title should be denied. Republic of the Philippines vs. Marlon Medida; G.R. No. 195097, August 13, 2012.