CIVIL LAW CASE DIGESTS
Contract; contract of carriage; definition; common carrier;
definition; breach of contract of carriage; entitlement to damages;
contract of services; standard of care required; damages; when
recoverable; quasi-delict; solidary liability of joint tortfeasors.
A contract of carriage is defined as one whereby a certain person
or association of persons obligate themselves to transport persons,
things, or news from one place to another for a fixed price. On its
face, the airplane ticket is a valid written contract of carriage.
This Court has held that when an airline issues a ticket to a
passenger confirmed on a particular flight, on a certain date, a
contract of carriage arises, and the passenger has every right to
expect that he would fly on that flight and on that date. If he
does not, then the carrier opens itself to a suit for breach of
contract of carriage.
Under Article 1732 of the Civil Code, this persons,
corporations, firms, or associations engaged in the business of
carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the
public is called a common carrier.
In contrast, the contractual relation between Sampaguita Travel
and respondents is a contract for services. Since the contract
between the parties is an ordinary one or services, the standard of
care required of respondent is that of a good father of a family
under Article 1173 of the Civil Code. This connotes reasonable care
consistent with that which an ordinarily prudent person would have
observed when confronted with a similar situation. The test to
determine whether negligence attended the performance of an
obligation is: did the 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, then he is
guilty of negligence.
For one to be entitled to actual damages, it is necessary to
prove the actual amount of loss with a reasonable degree of
certainty, premised upon competent proof and the best evidence
obtainable by the injured party. To justify an award of actual
damages, there must be competent proof of the actual amount of
loss. Credence can be given only to claims which are duly supported
by receipts.
Under Article 2220 of the Civil Code of the Philippines, an
award of moral damages, in breaches of contract, is in order upon a
showing that the defendant acted fraudulently or in bad faith. What
the law considers as bad faith which may furnish the ground for an
award of moral damages would be bad faith in securing the contract
and in the execution thereof, as well as in the enforcement of its
terms, or any other kind of deceit. In the same vein, to warrant
the award of exemplary damages, defendant must have acted in
wanton, fraudulent, reckless, oppressive, or malevolent manner.
Nominal damages are recoverable where a legal right is
technically violated and must be vindicated against an invasion
that has produced no actual present loss of any kind or where there
has been a breach of contract and no substantial injury oractual
damages whatsoever have been or can be shown. Under Article 2221 of
the Civil Code, nominal damages may be awarded to a plaintiff whose
right has been violated or invaded by the defendant, for the
purpose of vindicating or recognizing that right, not for
indemnifying the plaintiff for any loss suffered.
The amount to be awarded as nominal damages shall be equal or at
least commensurate to the injury sustained by respondents
considering the concept and purpose of such damages. The amount of
nominal damages to be awarded may also depend on certain special
reasons extant in the case. The amount of such damages is addressed
to the sound discretion of the court and taking into account the
relevant circumstances, such as the failure of some respondents to
board the flight on schedule and the slight breach in the legal
obligations of the airline company to comply with the terms of the
contract, i.e., the airplane ticket and of the travel agency to
make the correct bookings.
Cathay Pacific and Sampaguita Travel acted together in creating
the confusion in the bookings which led to the erroneous
cancellation of respondents bookings. Their negligence is the
proximate cause of the technical injury sustained by respondents.
Therefore, they have become joint tortfeasors, whose responsibility
for quasi-delict, under Article 2194 of the Civil Code, is
solidary. Cathay Pacific Airways v. Juanita Reyes, et al., G.R. No.
185891, June 26, 2013Contract; contract of sale; disputable
presumptions; failure to pay the price; effect of; double sale;
effect; registration in good faith; buyer in good faith; duty of a
buyer when a piece of land is in the actual possession of third
persons. Under Section 3, Rule 131 of the Rules of Court, the
following are disputable presumptions: (1) private transactions
have been fair and regular; (2) the ordinary course of business has
been followed; and (3) there was sufficient consideration for a
contract. These presumptions operate against an adversary who has
not introduced proof to rebut them. They create the necessity of
presenting evidence to rebut the prima facie case they created, and
which, if no proof to the contrary is presented and offered, will
prevail. The burden of proof remains where it is but, by the
presumption, the one who has that burden is relieved for the time
being from introducing evidence in support of the averment, because
the presumption stands in the place of evidence unless
rebutted.
Granting that there was no delivery of the consideration, the
seller would have no right to sell again what he no longer owned.
His remedy would be to rescind the sale for failure on the part of
the buyer to perform his part of their obligation pursuant to
Article 1191 of the New Civil Code. In the case of Clara M.
Balatbat v. Court Of Appeals and Spouses Jose Repuyan and Aurora
Repuyan, it was written:
The failure of the buyer to make good the price does not, in
law, cause the ownership to revest to the seller unless the
bilateral contract of sale is first rescinded or resolved pursuant
to Article 1191 of the New Civil Code. Non-payment only creates a
right to demand the fulfillment of the obligation or to rescind the
contract. [Emphases supplied]
[O]wnership of an immovable property which is the subject of a
double sale shall be transferred: (1) to the person acquiring it
who in good faith first recorded it in the Registry of Property;
(2) in default thereof, to the person who in good faith was first
in possession; and (3) in default thereof, to the person who
presents the oldest title, provided there is good faith. The
requirement of the law then is two-fold: acquisition in good faith
and registration in good faith. Good faith must concur with the
registration. If it would be shown that a buyer was in bad faith,
the alleged registration they have made amounted to no registration
at all.
When a piece of land is in the actual possession of persons
other than the seller, the buyer must be wary and should
investigate the rights of those in possession. Without making such
inquiry, one cannot claim that he is a buyer in good faith. When a
man proposes to buy or deal with realty, his duty is to read the
public manuscript, that is, to look and see who is there upon it
and what his rights are. A want of caution and diligence, which an
honest man of ordinary prudence is accustomed to exercise in making
purchases, is in contemplation of law, a want of good faith. The
buyer who has failed to know or discover that the land sold to him
is in adverse possession of another is a buyer in bad faith.
[I]f a vendee in a double sale registers the sale after he has
acquired knowledge of a previous sale, the registration constitutes
a registration in bad faith and does not confer upon him any right.
If the registration is done in bad faith, it is as if there is no
registration at all, and the buyer who has first taken possession
of the property in good faith shall be preferred. Hospicio D.
Rosaroso, et al. v. Lucila Laborte Soria, et al., G.R. No. 194846,
June 19, 2013Contract; contract of sale; elements; contract to
sell; elements; difference between a contract of sale and a
contract to sell; effect of non-payment in a contract of sale;
laches; definition; Torrens system; exception to general rule that
action to recover registered land covered by the Torrens System may
not be barred by laches. A contract of sale is defined under
Article 1458 of the Civil Code:
By the contract of sale, one of the contracting parties
obligates himself to transfer the ownership of and to deliver a
determinate thing, and the other to pay therefore a price certain
in money or its equivalent.
The elements of a contract of sale are: (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.
A contract to sell, on the other hand, is defined by Article
1479 of the Civil Code:
[A] bilateral contract whereby the prospective seller, while
expressly reserving the ownership of the subject property despite
delivery thereof to the prospective buyer, binds himself to sell
the said property exclusively to the prospective buyer upon
fulfillment of the condition agreed upon, that is, full payment of
the purchase price.
In a contract of sale, the title to the property passes to the
buyer upon the delivery of the thing sold, whereas in a contract to
sell, the ownership is, by agreement, retained by the seller and is
not to pass to the vendee until full payment of the purchase
price.
Even assuming, arguendo, that the petitioner was not paid, such
non payment is immaterial and has no effect on the validity of the
contract of sale. A contract of sale is a consensual contract and
what is required is the meeting of the minds on the object and the
price for its perfection and validity. In this case, the contract
was perfected the moment the petitioner and the respondent agreed
on the object of the sale the two-hectare parcel of land, and the
price Three Thousand Pesos (P3,000.00). Non-payment of the purchase
price merely gave rise to a right in favor of the petitioner to
either demand specific performance or rescission of the contract of
sale.
Laches has been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do that which, by
exercising due diligence could or should have been done earlier. It
should be stressed that laches is not concerned only with the mere
lapse of time. As a general rule, an action to recover registered
land covered by the Torrens System may not be barred by laches.
Neither can laches be set up to resist the enforcement of an
imprescriptible legal right. In exceptional cases, however, the
Court allowed laches as a bar to recover a titled property. Thus,
in Romero v. Natividad, the Court ruled that laches will bar
recovery of the property even if the mode of transfer was invalid.
Likewise, in Vda. de Cabrera v. CA, the Court ruled:
In our jurisdiction, it is an enshrined rule that even
registered owners of property may be barred from recovering
possession of property by virtue of laches. Under the Land
Registration Act (now the Property Registration Decree), no title
to registered land in derogation to that of the registered owner
shall be acquired by prescription or adverse possession. The same
is not true with regard to laches.
More particularly, laches will bar recovery of a property, even
if the mode of transfer used by an alleged member of a cultural
minority lacks executive approval. Thus, in Heirs of Dicman v.
Cario, the Court upheld the Deed of Conveyance of Part Rights and
Interests in Agricultural Land executed by Ting-el Dicman in favor
of Sioco Cario despite lack of executive approval. The Court stated
that despite the judicial pronouncement that the sale of real
property by illiterate ethnic minorities is null and void for lack
of approval of competent authorities, the right to recover
possession has nonetheless been barred through the operation of the
equitable doctrine of laches. Ali Akang v. Municipality of Isulan,
Sultan Kudarat Province, G.R. No. 186014, June 26, 2013Contract;
contract of sale; disqualification of a lawyer to buy under Article
1491; elements of a contract; autonomous nature; obligatory nature
of contract; interpretation; courts have no authority to alter a
contract by construction or to make a new contract for the parties;
penal clause; generally substitutes the indemnity for damages and
the payment of interests in case of non-compliance. Admittedly,
Article 1491 (5) of the Civil Code prohibits lawyers from acquiring
by purchase or assignment the property or rights involved which are
the object of the litigation in which they intervene by virtue of
their profession. The CA lost sight of the fact, however, that the
prohibition applies only during the pendency of the suit and
generally does not cover contracts for contingent fees where the
transfer takes effect only after the finality of a favorable
judgment.
Defined as a meeting of the minds between two persons whereby
one binds himself, with respect to the other to give something or
to render some service, a contract requires the concurrence of the
following requisites: (a) consent of the contracting parties; (b)
object certain which is the subject matter of the contract; and,
(c) cause of the obligation which is established.
Viewed in the light of the autonomous nature of contracts
enunciated under Article 1306 of the Civil Code, on the other hand,
we find that the Kasunduan was correctly found by the RTC to be a
valid and binding contract between the parties.
Obligations arising from contracts, after all, have the force of
law between the contracting parties who are expected to abide in
good faith with their contractual commitments, not weasel out of
them. Moreover, when the terms of the contract are clear and leave
no doubt as to the intention of the contracting parties, the rule
is settled that the literal meaning of its stipulations should
govern. In such cases, courts have no authority to alter a contract
by construction or to make a new contract for the parties. Since
their duty is confined to the interpretation of the one which the
parties have made for themselves without regard to its wisdom or
folly, it has been ruled that courts cannot supply material
stipulations or read into the contract words it does not contain.
Indeed, courts will not relieve a party from the adverse effects of
an unwise or unfavorable contract freely entered into.
An accessory undertaking to assume greater liability on the part
of the obligor in case of breach of an obligation, the foregoing
stipulation is a penal clause which serves to strengthen the
coercive force of the obligation and provides for liquidated
damages for such breach. The obligor would then be bound to pay the
stipulated indemnity without the necessity of proof of the
existence and the measure of damages caused by the breach.
In obligations with a penal clause, the penalty generally
substitutes the indemnity for damages and the payment of interests
in case of non-compliance. Usually incorporated to create an
effective deterrent against breach of the obligation by making the
consequences of such breach as onerous as it may be possible, the
rule is settled that a penal clause is not limited to actual and
compensatory damages. Heirs of Manuel Uy Ek Liong v. Mauricia Meer
Castillo, Heirs of Buenaflor C. Umali, represented by Nancy Umali,
et al., G.R. No. 176425, June 5, 2013.Contract; default of debtor;
definition; requisites; liquidated damages; stipulation therefor;
double function; penalty clause; definition; function. Default or
mora on the part of the debtor is the delay in the fulfillment of
the prestation by reason of a cause imputable to the former. It is
the nonfulfillment of an obligation with respect to time.
It is a general rule that one who contracts to complete certain
work within a certain time is liable for the damage for not
completing it within such time, unless the delay is excused or
waived.
In this jurisdiction, the following requisites must be present
in order that the debtor may be in default: (1) that the obligation
be demandable and already liquidated; (2) that the debtor delays
performance; and (3) that the creditor requires the performance
judicially or extrajudicially.
Liability for liquidated damages is governed by Articles 2226 to
2228 of the Civil Code. A stipulation for liquidated damages is
attached to an obligation in order to ensure performance and has a
double function: (1) to provide for liquidated damages, and (2) to
strengthen the coercive force of the obligation by the threat of
greater responsibility in the event of breach. The amount agreed
upon answers for damages suffered by the owner due to delays in the
completion of the project. As a precondition to such award,
however, there must be proof of the fact of delay in the
performance of the obligation.
A penalty clause, expressly recognized by law, is an accessory
undertaking to assume greater liability on the part of the obligor
in case of breach of an obligation. It functions to strengthen the
coercive force of obligation and to provide, in effect, for what
could be the liquidated damages resulting from such a breach. The
obligor would then be bound to pay the stipulated indemnity without
the necessity of proof on the existence and on the measure of
damages caused by the breach. It is well-settled that so long as
such stipulation does not contravene law, morals, or public order,
it is strictly binding upon the obligor. J Plus Asia Development
Corporation v. Utility Assurance Corporation, G.R. No. 199650, June
26, 2013Contract; rescission under Article 1191; mutual
restitution; contracts; definition. Mutual restitution is required
in cases involving rescission under Article 1191 of the Civil Code;
such restitution is necessary to bring back the parties to their
original situation prior to the inception of the contract.
As a general rule, a contract is a meeting of minds between two
persons. The Civil Code upholds the spirit over the form; thus, it
deems an agreement to exist, provided the essential requisites are
present. A contract is upheld as long as there is proof of consent,
subject matter and cause. Moreover, it is generally obligatory in
whatever form it may have been entered into. From the moment there
is a meeting of minds between the parties, [the contract] is
perfected. Fil-Estate Gold and Development, Inc., et al. v. Vertex
Sales and Trading, Inc., G.R. No. 202079, June 10, 2013.
Contract; void contracts; effect. A void contract is equivalent
to nothing; it produces no civil effect; and it does not create,
modify or extinguish a juridical relation. Joselito C. Borromeo v.
Juan T. Mina, G.R. No. 193747, June 5, 2013.
Credit; concurrence and preference of credit; tax clearance is
not required for the approval of a project of partition. The
position of the BIR, insisting on prior compliance with the tax
clearance requirement as a condition for the approval of the
project of distribution of the assets of a bank under liquidation,
is contrary to both the letter and intent of the law on liquidation
of banks by the PDIC.
The law expressly provides that debts and liabilities of the
bank under liquidation are to be paid in accordance with the rules
on concurrence and preference of credit under the Civil Code.
Duties, taxes, and fees due the Government enjoy priority only when
they are with reference to a specific movable property, under
Article 2241(1) of the Civil Code, or immovable property, under
Article 2242(1) of the same Code. However, with reference to the
other real and personal property of the debtor, sometimes referred
to as free property, the taxes and assessments due the National
Government, other than those in Articles 2241(1) and 2242(1) of the
Civil Code, such as the corporate income tax, will come only in
ninth place in the order of preference. On the other hand, if the
BIRs contention that a tax clearance be secured first before the
project of distribution of the assets of a bank under liquidation
may be approved, then the tax liabilities will be given absolute
preference in all instances, including those that do not fall under
Articles 2241(1) and 2242(1) of the Civil Code. In order to secure
a tax clearance which will serve as proof that the taxpayer had
completely paid off his tax liabilities, PDIC will be compelled to
settle and pay first all tax liabilities and deficiencies of the
bank, regardless of the order of preference under the pertinent
provisions of the Civil Code. Following the BIRs stance, therefore,
only then may the project of distribution of the banks assets be
approved and the other debts and claims thereafter settled, even
though under Article 2244 of the Civil Code such debts and claims
enjoy preference over taxes and assessments due the National
Government. Philippine Deposit Insurance Corporation v. Bureau of
Internal Revenue, G.R. No. 172892, June 13, 2013Damages; Attorneys
fees; dual concept of attorneys fees; an award of attorneys fees
under Article 2208 demands factual, legal, and equitable
justification. Article 2208 of the New Civil Code of the
Philippines states the policy that should guide the courts when
awarding attorneys fees to a litigant. As a general rule, the
parties may stipulate the recovery of attorneys fees. In the
absence of such stipulation, this article restrictively enumerates
the instances when these fees may be recovered.
In ABS-CBN Broadcasting Corp. v. CA, this Court had the occasion
to expound on the policy behind the grant of attorneys fees as
actual or compensatory damages:
(T)he law is clear that in the absence of stipulation, attorneys
fees may be recovered as actual or compensatory damages under any
of the circumstances provided for in Article 2208 of the Civil
Code. The general rule is that attorneys fees cannot be recovered
as part of damages because of the policy that no premium should be
placed on the right to litigate. They are not to be awarded every
time a party wins a suit.
The power of the court to award attorneys fees under Article
2208 demands factual, legal, and equitable justification. Even when
a claimant is compelled to litigate with third persons or to incur
expenses to protect his rights, still attorneys fees may not be
awarded where no sufficient showing of bad faith could be reflected
in a partys persistence in a case other than an erroneous
conviction of the righteousness of his cause.
We have consistently held that an award of attorneys fees under
Article 2208 demands factual, legal, and equitable justification to
avoid speculation and conjecture surrounding the grant thereof. Due
to the special nature of the award of attorneys fees, a rigid
standard is imposed on the courts before these fees could be
granted. Hence, it is imperative that they clearly and distinctly
set forth in their decisions the basis for the award thereof. It is
not enough that they merely state the amount of the grant in the
dispositive portion of their decisions. It bears reiteration that
the award of attorneys fees is an exception rather than the general
rule; thus, there must be compelling legal reason to bring the case
within the exceptions provided under Article 2208 of the Civil Code
to justify the award. Philippine National Construction Corporation
v. Apac Marketing Corporation, represented by Cesar M. Ong, Jr.,
G.R. No. 190957, June 5, 2013.Damages; nominal damages; when
warranted in labor cases. [W]hile Van Doorn has a just and valid
cause to terminate the respondents employment, it failed to meet
the requisite procedural safeguards provided under Article 283 of
the Labor Code. In the termination of employment under Article 283,
Van Doorn, as the employer, is required to serve a written notice
to the respondents and to the DOLE of the intended termination of
employment at least one month prior to the cessation of its fishing
operations. Poseidon could have easily filed this notice, in the
way it represented Van Doorn in its dealings in the Philippines.
While this omission does not affect the validity of the termination
of employment, it subjects the employer to the payment of indemnity
in the form of nominal damages. Poseidon International Maritime
Services, Inc. v. Tito R. Tamala, et al., G.R. No. 186475, June 26,
2013Damages; temperate damages; when warranted. Article 2224 of the
New Civil Code provides that (t)emperate or moderate damages, which
are more than nominal but less than compensatory damages may be
recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, proved
with certainty. People of the Philippines v. Reggie Bernardo, G.R.
No. 198789, June 3, 2013.Interest rates; a stipulated interest of
24% per annum is not unconscionable; surcharge on principal loan; a
surcharge of 1% per month on the principal loan is valid; surcharge
or penalty partakes of the nature of liquidated damages; different
from interest payment. In Villanueva v. Court of Appeals, where the
issue raised was whether the 24% p.a. stipulated interest rate is
unreasonable under the circumstances, we answered in the negative
and held:
In Spouses Zacarias Bacolor and Catherine Bacolor v. Banco
Filipino Savings and Mortgage Bank, Dagupan City Branch, this Court
held that the interest rate of 24% per annum on a loan of
P244,000.00, agreed upon by the parties, may not be considered as
unconscionable and excessive. As such, the Court ruled that the
borrowers cannot renege on their obligation to comply with what is
incumbent upon them under the contract of loan as the said contract
is the law between the parties and they are bound by its
stipulations.
Also, in Garcia v. Court of Appeals, this Court sustained the
agreement of the parties to a 24% per annum interest on an
P8,649,250.00 loan finding the same to be reasonable and clearly
evidenced by the amended credit line agreement entered into by the
parties as well as two promissory notes executed by the borrower in
favor of the lender.
Based on the above jurisprudence, the Court finds that the 24%
per annum interest rate, provided for in the subject mortgage
contracts for a loan of P225,000.00, may not be considered
unconscionable. Moreover, considering that the mortgage agreement
was freely entered into by both parties, the same is the law
between them and they are bound to comply with the provisions
contained therein.
In Ruiz v. CA, we held:
The 1% surcharge on the principal loan for every month of
default is valid. This surcharge or penalty stipulated in a loan
agreement in case of default partakes of the nature of liquidated
damages under Art. 2227 of the New Civil Code, and is separate and
distinct from interest payment. Also referred to as a penalty
clause, it is expressly recognized by law. It is an accessory
undertaking to assume greater liability on the part of an obligor
in case of breach of an obligation. The obligor would then be bound
to pay the stipulated amount of indemnity without the necessity of
proof on the existence and on the measure of damages caused by the
breach.
Spouses Florentino T. Mallari and Aurea V. Mallari v. Prudential
Bank of the Philippines, G.R. No. 197861, June 5, 2013Tort;
collateral source rule; unjust enrichment; elements. As part of
American personal injury law, the collateral source rule was
originally applied to tort cases wherein the defendant is prevented
from benefiting from the plaintiffs receipt of money from other
sources. Under this rule, if an injured person receives
compensation for his injuries from a source wholly independent of
the tortfeasor, the payment should not be deducted from the damages
which he would otherwise collect from the tortfeasor. In a recent
Decision by the Illinois Supreme Court, the rule has been described
as an established exception to the general rule that damages in
negligence actions must be compensatory. The Court went on to
explain that although the rule appears to allow a double recovery,
the collateral source will have a lien or subrogation right to
prevent such a double recovery. In Mitchell v. Haldar, the
collateral source rule was rationalized by the Supreme Court of
Delaware:
The collateral source rule is predicated on the theory that a
tortfeasor has no interest in, and therefore no right to benefit
from monies received by the injured person from sources unconnected
with the defendant. According to the collateral source rule, a
tortfeasor has no right to any mitigation of damages because of
payments or compensation received by the injured person from an
independent source. The rationale for the collateral source rule is
based upon the quasi-punitive nature of tort law liability. It has
been explained as follows:
The collateral source rule is designed to strike a balance
between two competing principles of tort law: (1) a plaintiff is
entitled to compensation sufficient to make him whole, but no more;
and (2) a defendant is liable for all damages that proximately
result from his wrong. A plaintiff who receives a double recovery
for a single tort enjoys a windfall; a defendant who escapes, in
whole or in part, liability for his wrong enjoys a windfall.
Because the law must sanction one windfall and deny the other, it
favors the victim of the wrong rather than the wrongdoer.
Thus, the tortfeasor is required to bear the cost for the full
value of his or her negligent conduct even if it results in a
windfall for the innocent plaintiff. (Citations omitted)
As seen, the collateral source rule applies in order to place
the responsibility for losses on the party causing them. Its
application is justified so that the wrongdoer should not benefit
from the expenditures made by the injured party or take advantage
of contracts or other relations that may exist between the injured
party and third persons. Thus, it finds no application to cases
involving no-fault insurances under which the insured is
indemnified for losses by insurance companies, regardless of who
was at fault in the incident generating the losses.
To constitute unjust enrichment, it must be shown that a party
was unjustly enriched in the sense that the term unjustly could
mean illegally or unlawfully. A claim for unjust enrichment fails
when the person who will benefit has a valid claim to such benefit.
Mitsubishi Motors Philippines Salaried Employees Union v.
Mitsubishi Motors Philippines Corporation, G.R. No. 175773, June
17, 2013.
Unjust enrichment; definition; elements. Unjust enrichment is a
term used to depict result or effect of failure to make
remuneration of or for property or benefits received under
circumstances that give rise to legal or equitable obligation to
account for them. To be entitled to remuneration, one must confer
benefit by mistake, fraud, coercion, or request. Unjust enrichment
is not itself a theory of reconveyance. Rather, it is a
prerequisite for the enforcement of the doctrine of restitution.
There is unjust enrichment when:
1. A person is unjustly benefited; and
2. Such benefit is derived at the expense of or with damages to
another.
Philippine Transmarine Carriers, Inc. v. Leandro Legaspi, G.R.
No. 202791, June 10, 2013.
Special LawsFamily Code; support; in proportion to the resources
or means of the giver and to the needs of the recipient; support
pendente lite in cases of legal separation and petitions for
declaration of nullity or annulment of marriage; judicial
determination is guided by the Rule on Provisional Orders; support
in arrears; deductions from accrued support pendente lite; judgment
for support does not become final. As a matter of law, 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 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.
Upon receipt of a verified petition for declaration of absolute
nullity of void marriage or for annulment of voidable marriage, or
for legal separation, and at any time during the proceeding, the
court, motu proprio or upon verified application of any of the
parties, guardian or designated custodian, may temporarily grant
support pendente lite prior to the rendition of judgment or final
order. Because of its provisional nature, a court does not need to
delve fully into the merits of the case before it can settle an
application for this relief. All that a court is tasked to do is
determine the kind and amount of evidence which may suffice to
enable it to justly resolve the application. It is enough that the
facts be established by affidavits or other documentary evidence
appearing in the record.
Judicial determination of support pendente lite in cases of
legal separation and petitions for declaration of nullity or
annulment of marriage are guided by the provisions of the Rule on
Provisional Orders.
On the issue of crediting of money payments or expenses against
accrued support, we find as relevant the following rulings by US
courts.
In Bradford v. Futrell, appellant sought review of the decision
of the Circuit Court which found him in arrears with his child
support payments and entered a decree in favor of appellee wife. He
complained that in determining the arrearage figure, he should have
been allowed full credit for all money and items of personal
property given by him to the children themselves, even though he
referred to them as gifts. The Court of Appeals of Maryland ruled
that in the suit to determine amount of arrears due the divorced
wife under decree for support of minor children, the husband
(appellant) was not entitled to credit for checks which he had
clearly designated as gifts, nor was he entitled to credit for an
automobile given to the oldest son or a television set given to the
children. Thus, if the children remain in the custody of the
mother, the father is not entitled to credit for money paid
directly to the children if such was paid without any relation to
the decree.
In Martin, Jr. v. Martin, the Supreme Court of Washington held
that a father, who is required by a divorce decree to make child
support payments directly to the mother, cannot claim credit for
payments voluntarily made directly to the children. However,
special considerations of an equitable nature may justify a court
in crediting such payments on his indebtedness to the mother, when
such can be done without injustice to her.
Suffice it to state that the matter of increase or reduction of
support should be submitted to the trial court in which the action
for declaration for nullity of marriage was filed, as this Court is
not a trier of facts. The amount of support 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. As we held in Advincula v.
Advincula:Judgment for support does not become final. The right to
support is of such nature that its allowance is essentially
provisional; for during the entire period that a needy party is
entitled to support, his or her alimony may be modified or altered,
in accordance with his increased or decreased needs, and with the
means of the giver. It cannot be regarded as subject to final
determination.
Susan Lim-Lua v. Danilo Y. Lua, G.R. Nos. 175279-80, June 5,
2013.Family Code; Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages; not applicable in an
action for recognition of foreign judgment; foreign judgment
relating to the marital status of a person; special proceeding for
cancellation or correction of entries in the civil registry under
Rule 108 of the Rules of Court; the first husband has a right to
file the petition; effect of a foreign divorce decree to a Filipino
spouse; Article 26 of the Family Code. The Rule on Declaration of
Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages (A.M. No. 02-11-10-SC) does 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.
Moreover, in Juliano-Llave v. Republic, this Court held that the
rule in A.M. No. 02-11-10-SC that only the husband or wife can file
a declaration of nullity or annulment of marriage does not apply if
the reason behind the petition is bigamy.
A foreign judgment relating to the status of a marriage affects
the civil status, condition and legal capacity of its parties.
However, the effect of a foreign judgment is not automatic. To
extend the effect of a foreign judgment in the Philippines,
Philippine courts must determine if the foreign judgment is
consistent with domestic public policy and other mandatory laws.
Article 15 of the Civil Code provides that [l]aws relating to
family rights and duties, or to the status, condition and legal
capacity of persons are binding upon citizens of the Philippines,
even though living abroad. This is the rule of lex nationalii in
private international law. Thus, the Philippine State may require,
for effectivity in the Philippines, recognition by Philippine
courts of a foreign judgment affecting its citizen, over whom it
exercises personal jurisdiction relating to the status, condition
and legal capacity of such citizen.
A petition to recognize a foreign judgment declaring a marriage
void does not require relitigation under a Philippine court of the
case as if it were a new petition for declaration of nullity of
marriage. Philippine courts cannot presume to know the foreign laws
under which the foreign judgment was rendered. They cannot
substitute their judgment on the status, condition and legal
capacity of the foreign citizen who is under the jurisdiction of
another state. Thus, Philippine courts can only recognize the
foreign judgment as a fact according to the rules of evidence.
Since the recognition of a foreign judgment only requires proof
of fact of the judgment, it may be made in a special proceeding for
cancellation or correction of entries in the civil registry under
Rule 108 of the Rules of Court. Rule 1, Section 3 of the Rules of
Court provides that [a] special proceeding is a remedy by which a
party seeks to establish a status, a right, or a particular fact.
Rule 108 creates a remedy to rectify facts of a persons life which
are recorded by the State pursuant to the Civil Register Law or Act
No. 3753. These are facts of public consequence such as birth,
death or marriage, which the State has an interest in recording.
There is no doubt that the prior spouse has a personal and material
interest in maintaining the integrity of the marriage he contracted
and the property relations arising from it. There is also no doubt
that he is interested in the cancellation of an entry of a bigamous
marriage in the civil registry, which compromises the public record
of his marriage. The interest derives from the substantive right of
the spouse not only to preserve (or dissolve, in limited instances)
his most intimate human relation, but also to protect his property
interests that arise by operation of law the moment he contracts
marriage. These property interests in marriage include the right to
be supported in keeping with the financial capacity of the family
and preserving the property regime of the marriage.
Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse
of a subsisting marriage to question the validity of a subsequent
marriage on the ground of bigamy. On the contrary, when Section
2(a) states that [a] petition for declaration of absolute nullity
of void marriage may be filed solely by the husband or the wife it
refers to the husband or the wife of the subsisting marriage. Under
Article 35(4) of the Family Code, bigamous marriages are void from
the beginning. Thus, the parties in a bigamous marriage are neither
the husband nor the wife under the law. The husband or the wife of
the prior subsisting marriage is the one who has the personality to
file a petition for declaration of absolute nullity of void
marriage under Section 2(a) of A.M. No. 02-11-10-SC.
[A] Filipino citizen cannot dissolve his marriage by the mere
expedient of changing his entry of marriage in the civil registry.
However, this does not apply in a petition for correction or
cancellation of a civil registry entry based on the recognition of
a foreign judgment annulling a marriage where one of the parties is
a citizen of the foreign country. There is neither circumvention of
the substantive and procedural safeguards of marriage under
Philippine law, nor of the jurisdiction of Family Courts under R.A.
No. 8369. A recognition of a foreign judgment is not an action to
nullify a marriage. It is an action for Philippine courts to
recognize the effectivity of a foreign judgment, which presupposes
a case which was already tried and decided under foreign law. The
procedure in A.M. No. 02-11-10-SC does not apply in a petition to
recognize a foreign judgment annulling a bigamous marriage where
one of the parties is a citizen of the foreign country. Neither can
R.A. No. 8369 define the jurisdiction of the foreign court.
Article 26 of the Family Code confers jurisdiction on Philippine
courts to extend the effect of a foreign divorce decree to a
Filipino spouse without undergoing trial to determine the validity
of the dissolution of the marriage. The second paragraph of Article
26 of the Family Code provides that [w]here a marriage between a
Filipino citizen and a foreigner is validly celebrated and a
divorce is thereafter validly obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino spouse shall have
capacity to remarry under Philippine law. The second paragraph of
Article 26 of the Family Code only authorizes Philippine courts to
adopt the effects of a foreign divorce decree precisely because the
Philippines does not allow divorce. Philippine courts cannot try
the case on the merits because it is tantamount to trying a case
for divorce. Minoru Fujiki v. Maria Paz Galela Marinay, et al.,
G.R. No. 196049, June 26, 2013.
Family Courts Act of 1997; Violence Against Women and Children
Act of 2004; Family Courts; jurisdiction; a special court of the
same level as RTC; RTCs designated as family courts remain
possessed of authority as courts of general original jurisdiction.
At the outset, it must be stressed that Family Courts are special
courts, of the same level as Regional Trial Courts. Under R.A.
8369, otherwise known as the Family Courts Act of 1997, family
courts have exclusive original jurisdiction to hear and decide
cases of domestic violence against women and children. In
accordance with said law, the Supreme Court designated from among
the branches of the Regional Trial Courts at least one Family Court
in each of several key cities identified. To achieve harmony with
the first mentioned law, Section 7 of R.A. 9262 now provides that
Regional Trial Courts designated as Family Courts shall have
original and exclusive jurisdiction over cases of VAWC defined
under the latter law.
Inspite of its designation as a family court, the RTC of Bacolod
City remains possessed of authority as a court of general original
jurisdiction to pass upon all kinds of cases whether civil,
criminal, special proceedings, land registration, guardianship,
naturalization, admiralty or insolvency. It is settled that RTCs
have jurisdiction to resolve the constitutionality of a statute,
this authority being embraced in the general definition of the
judicial power to determine what are the valid and binding laws by
the criterion of their conformity to the fundamental law. The
Constitution vests the power of judicial review or the power to
declare the constitutionality or validity of a law, treaty,
international or executive agreement, presidential decree, order,
instruction, ordinance, or regulation not only in this Court, but
in all RTCs. Jesus C. Garcia v. The Hon. Ray Alan T. Drilon, et
al., G.R. No. 179267, June 25, 2013Torrens system; purpose. Torrens
title; generally conclusive evidence of the ownership of the land;
not subject to collateral attack; Land Registration Authority;
functions. The real purpose of the Torrens system is to quiet title
to land and to stop forever any question as to its legality. Once a
title is registered, the owner may rest secure, without the
necessity of waiting in the portals of the court, or sitting on the
mirador su casa, to avoid the possibility of losing his land. A
Torrens title is generally a conclusive evidence of the ownership
of the land referred to therein. A strong presumption exists that
Torrens titles are regularly issued and that they are valid.
Section 48 of Presidential Decree No. 1529, otherwise known as
the Property Registration Decree, explicitly provides that [a]
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law.
The duty of LRA officials to issue decrees of registration is
ministerial in the sense that they act under the orders of the
court and the decree must be in conformity with the decision of the
court and with the data found in the record. They have no
discretion in the matter. However, if they are in doubt upon any
point in relation to the preparation and issuance of the decree,
these officials ought to seek clarification from the court. They
act, in this respect, as officials of the court and not as
administrative officials, and their act is the act of the court.
They are specifically called upon to extend assistance to courts in
ordinary and cadastral land registration proceedings. Deogenes O.
Rodriguez v. Hon. Court of Appeals and Philippine Chinese
Charitable Association, Inc., G.R. No. 184589, June 13, 2013Agency;
apparent authority of an agent based on estoppel; concept. In
Woodchild Holdings, Inc. v. Roxas Electric and Construction
Company, Inc. the Court stated that persons dealing with an assumed
agency, whether the assumed agency be a general or special one, are
bound at their peril, if they would hold the principal liable, to
ascertain not only the fact of agency but also the nature and
extent of authority, and in case either is controverted, the burden
of proof is upon them to establish it. In other words, when the
petitioner relied only on the words of respondent Alejandro without
securing a copy of the SPA in favor of the latter, the petitioner
is bound by the risk accompanying such trust on the mere assurance
of Alejandro.
The same Woodchild case stressed that apparent authority based
on estoppel can arise from the principal who knowingly permit the
agent to hold himself out with authority and from the principal who
clothe the agent with indicia of authority that would lead a
reasonably prudent person to believe that he actually has such
authority. Apparent authority of an agent arises only from acts or
conduct on the part of the principal and such acts or conduct of
the principal must have been known and relied upon in good faith
and as a result of the exercise of reasonable prudence by a third
person as claimant and such must have produced a change of position
to its detriment. In the instant case, the sale to the Spouses
Lajarca and other transactions where Alejandro allegedly
represented a considerable majority of the co-owners transpired
after the sale to the petitioner; thus, the petitioner cannot rely
upon these acts or conduct to believe that Alejandro had the same
authority to negotiate for the sale of the subject property to him.
Reman Recio v. Heirs of Spouses Aguego and Maria Altamirano, G.R.
No.182349, July 24, 2013.
Agency; definition under the Civil Code; form of contract.
Article 1868 of the Civil Code defines a contract of agency as a
contract whereby a person binds himself to render some service or
to do something in representation or on behalf of another, with the
consent or authority of the latter. It may be express, or implied
from the acts of the principal, from his silence or lack of action,
or his failure to repudiate the agency, knowing that another person
is acting on his behalf without authority.
As a general rule, a contract of agency may be oral.
However, it must be written when the law requires a specific
form. Specifically, Article 1874 of the Civil Code provides that
the contract of agency must be written for the validity of the sale
of a piece of land or any interest therein. Otherwise, the sale
shall be void. A related provision, Article 1878 of the Civil Code,
states that special powers of attorney are necessary to convey real
rights over immovable properties. Sally Yoshizaki v. Joy Training
Center of Aurora, Inc., G.R. No. 174978, July 31, 2013.
Agency; general power of attorney; an agency couched in general
terms comprises only acts of administration. The certification is a
mere general power of attorney which comprises all of Joy Trainings
business. Article 1877 of the Civil Code clearly states that [a]n
agency couched in general terms comprises only acts of
administration, even if the principal should state that he
withholds no power or that the agent may execute such acts as he
may consider appropriate, or even though the agency should
authorize a general and unlimited management. Sally Yoshizaki v.
Joy Training Center of Aurora, Inc., G.R. No. 174978, July 31,
2013.
Agency; sale of property by a supposed agent is unenforceable if
there is really no agency to sell such property; persons dealing
with an agent must ascertain not only the fact of agency, but also
the nature and extent of the agents authority. Necessarily, the
absence of a contract of agency renders the contract of sale
unenforceable; Joy Training effectively did not enter into a valid
contract of sale with the spouses Yoshizaki. Sally cannot also
claim that she was a buyer in good faith. She misapprehended the
rule that persons dealing with a registered land have the legal
right to rely on the face of the title and to dispense with the
need to inquire further, except when the party concerned has actual
knowledge of facts and circumstances that would impel a reasonably
cautious man to make such inquiry. This rule applies when the
ownership of a parcel of land is disputed and not when the fact of
agency is contested. Sally Yoshizaki v. Joy Training Center of
Aurora, Inc.,G.R. No. 174978, July 31, 2013.
Agency; special power of attorney; must express the powers of
the agent in clear and unmistakable language; when there is any
reasonable doubt that the language so used conveys such power, no
such construction shall be given the document. We unequivocably
declared in Cosmic Lumber Corporation v. Court of Appeals that a
special power of attorney must express the powers of the agent in
clear and unmistakable language for the principal to confer the
right upon an agent to sell real estate. When there is any
reasonable doubt that the language so used conveys such power, no
such construction shall be given the document. The purpose of the
law in requiring a special power of attorney in the disposition of
immovable property is to protect the interest of an unsuspecting
owner from being prejudiced by the unwarranted act of another and
to caution the buyer to assure himself of the specific
authorization of the putative agent. Sally Yoshizaki v. Joy
Training Center of Aurora, Inc.,G.R. No. 174978, July 31, 2013.
Agency; special power of attorney for sale of property; must
expressly mention a sale or include a sale as a necessary
ingredient of the authorized act. The special power of attorney
mandated by law must be one that expressly mentions a sale or that
includes a sale as a necessary ingredient of the authorized act. We
unequivocably declared in Cosmic Lumber Corporation v. Court of
Appeals that a special power of attorney must express the powers of
the agent in clear and unmistakable language for the principal to
confer the right upon an agent to sell real estate. When there is
any reasonable doubt that the language so used conveys such power,
no such construction shall be given the document. The purpose of
the law in requiring a special power of attorney in the disposition
of immovable property is to protect the interest of an unsuspecting
owner from being prejudiced by the unwarranted act of another and
to caution the buyer to assure himself of the specific
authorization of the putative agent. Sally Yoshizaki v. Joy
Training Center of Aurora, Inc.,G.R. No. 174978, July 31, 2013.
Agency; special power of attorney; required for an agent to sell
an immovable property; authority must be in writing, otherwise sale
is void. In Alcantara v. Nido, the Court emphasized the requirement
of an SPA before an agent may sell an immovable property. In the
said case, Revelen was the owner of the subject land. Her mother,
respondent Brigida Nido accepted the petitioners offer to buy
Revelens land at Two Hundred Pesos (P200.00) per sq m. However,
Nido was only authorized verbally by Revelen. Thus, the Court
declared the sale of the said land null and void under Articles
1874 and 1878 of the Civil Code. Reman Recio v. Heirs of Spouses
Aguego and Maria Altamirano, G.R. No.182349, July 24, 2013.
Arrastre operator; functions; duty to take good care of goods
and to turn them over to the party entitled to their possession.
The functions of an arrastre operator involve the handling of cargo
deposited on the wharf or between the establishment of the
consignee or shipper and the ships tackle. Being the custodian of
the goods discharged from a vessel, an arrastre operators duty is
to take good care of the goods and to turn them over to the party
entitled to their possession. Handling cargo is mainly the arrastre
operators principal work so its drivers/operators or employees
should observe the standards and measures necessary to prevent
losses and damage to shipments under its custody. Asian Terminals,
Inc. v. Philam Insurance Co., Inc. (now Chartis Philippines
Insurance Inc.)/ Philam Insurance Co., Inc. (now Chartis
Philippines Insurance Inc.) v. Westwind Shipping Corporation and
Asian Terminals, Inc./ Westwind Shipping Corporation v. Philam
Insurance Co., Inc. and Asian Terminals, Inc., G.R. Nos.
181163/181262/181319, July 24, 2013.
Attorneys fees; dual concept. In order to resolve the issues in
this case, it is necessary to discuss the two concepts of attorneys
fees ordinary and extraordinary. In its ordinary sense, it is the
reasonable compensation paid to a lawyer by his client for legal
services rendered. In its extraordinary concept, it is awarded by
the court to the successful litigant to be paid by the losing party
as indemnity for damages. Francisco L. Rosario, Jr. v. Lellani De
Guzman, Arleen De Guzman, et al., G.R. No. 191247, July 10,
2013.
Attorneys fees for professional services rendered; may be
claimed in the very action itself or in a separate action;
prescription for oral contract of attorneys fees is 6 years;
concept of quantum meruit; guidelines under the Code of
Professional Responsibility. The Court now addresses two important
questions: (1) How can attorneys fees for professional services be
recovered? (2) When can an action for attorneys fees for
professional services be filed? The case of Traders Royal Bank
Employees Union-Independent v. NLRC is instructive:
As an adjunctive episode of the action for the recovery of bonus
differentials in NLRC-NCR Certified Case No. 0466, private
respondents present claim for attorneys fees may be filed before
the NLRC even though or, better stated, especially after its
earlier decision had been reviewed and partially affirmed. It is
well settled that a claim for attorneys fees may be asserted either
in the very action in which the services of a lawyer had been
rendered or in a separate action.
With respect to the first situation, the remedy for recovering
attorneys fees as an incident of the main action may be availed of
only when something is due to the client. Attorneys fees cannot be
determined until after the main litigation has been decided and the
subject of the recovery is at the disposition of the court. The
issue over attorneys fees only arises when something has been
recovered from which the fee is to be paid. While a claim for
attorneys fees may be filed before the judgment is rendered, the
determination as to the propriety of the fees or as to the amount
thereof will have to be held in abeyance until the main case from
which the lawyers claim for attorneys fees may arise has become
final. Otherwise, the determination to be made by the courts will
be premature. Of course, a petition for attorneys fees may be filed
before the judgment in favor of the client is satisfied or the
proceeds thereof delivered to the client.
It is apparent from the foregoing discussion that a lawyer has
two options as to when to file his claim for professional fees.
Hence, private respondent was well within his rights when he made
his claim and waited for the finality of the judgment for holiday
pay differential, instead of filing it ahead of the awards complete
resolution. To declare that a lawyer may file a claim for fees in
the same action only before the judgment is reviewed by a higher
tribunal would deprive him of his aforestated options and render
ineffective the foregoing pronouncements of this Court.
In this case, petitioner opted to file his claim as an incident
in the main action, which is permitted by the rules. As to the
timeliness of the filing, this Court holds that the questioned
motion to determine attorneys fees was seasonably filed.
The records show that the August 8, 1994 RTC decision became
final and executory on October 31, 2007. There is no dispute that
petitioner filed his Motion to Determine Attorneys Fees on
September 8, 2009, which was only about one (1) year and eleven
(11) months from the finality of the RTC decision. Because
petitioner claims to have had an oral contract of attorneys fees
with the deceased spouses, Article 1145 of the Civil Code16 allows
him a period of six (6) years within which to file an action to
recover professional fees for services rendered. Respondents never
asserted or provided any evidence that Spouses de Guzman refused
petitioners legal representation. For this reason, petitioners
cause of action began to run only from the time the respondents
refused to pay him his attorneys fees, as similarly held in the
case of Anido v. Negado.
With respect to petitioners entitlement to the claimed attorneys
fees, it is the Courts considered view that he is deserving of it
and that the amount should be based on quantum meruit. Quantum
meruit literally meaning as much as he deserves is used as basis
for determining an attorneys professional fees in the absence of an
express agreement. The recovery of attorneys fees on the basis of
quantum meruit is a device that prevents an unscrupulous client
from running away with the fruits of the legal services of counsel
without paying for it and also avoids unjust enrichment on the part
of the attorney himself. An attorney must show that he is entitled
to reasonable compensation for the effort in pursuing the clients
cause, taking into account certain factors in fixing the amount of
legal fees.
Rule 20.01 of the Code of Professional Responsibility lists the
guidelines for determining the proper amount of attorney fees, to
wit:
Rule 20.1 A lawyer shall be guided by the following factors in
determining his fees:
a) The time spent and the extent of the services rendered or
required;
b) The novelty and difficulty of the questions involved;
c) The importance of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of
acceptance of the proffered case;
f) The customary charges for similar services and the schedule
of fees of the IBP chapter to which he belongs;
g) The amount involved in the controversy and the benefits
resulting to the client from the service;
h) The contingency or certainty of compensation;
i) The character of the employment, whether occasional or
established; and
j) The professional standing of the lawyer.
Francisco L. Rosario, Jr. v. Lellani De Guzman, Arleen De
Guzman, et al., G.R. No. 191247, July 10, 2013.
Attorneys fees; recoverable in actions for indemnity under
workmens compensation and employers liability laws. However, the
Court finds that the petitioner is entitled to attorneys fees
pursuant to Article 2208(8) of the Civil Code which states that the
award of attorneys fees is justified in actions for indemnity under
workmens compensation and employers liability laws. Camilo A.
Esguerra v. United Philippines Lines, Inc., et al., G.R. No.
199932, July 3, 2013.
Attorneys fees; when recoverable. The Court of Appeals
rightfully upheld the NLRCs affirmance of the grant of attorneys
fees to San Miguel. Thereby, the NLRC did not commit any grave
abuse of its discretion, considering that San Miguel had been
compelled to litigate and to incur expenses to protect his rights
and interest. In Producers Bank of the Philippines v. Court of
Appeals, the Court ruled that attorneys fees could be awarded to a
party whom an unjustified act of the other party compelled to
litigate or to incur expenses to protect his interest. It was plain
that petitioners refusal to reinstate San Miguel with backwages and
other benefits to which he had been legally entitled was
unjustified, thereby entitling him to recover attorneys fees.
Zuellig Freight and Cargo Systems v. National Labor Relations
Commission, et al., G.R. No. 157900, July 22, 2013Attorneys fees;
when recoverable. With respect to the award of attorneys fees,
Article 2208 of the Civil Code provides, among others, that such
fees may be recovered when exemplary damages are awarded, when the
defendants act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest,
and where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiffs plainly valid, just and
demandable claim. Joyce V. Ardiente v. Spouses Javier and Ma.
Theresa Pastofide, G.R. No. 161921, July 17, 2013.
Common carriers; extraordinary diligence in vigilance of goods
transported; cargoes while being unloaded generally remain under
the custody of the carrier. Common carriers, from the nature of
their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods
transported by them. Subject to certain exceptions enumerated under
Article 1734 of the Civil Code, common carriers are responsible for
the loss, destruction, or deterioration of the goods. The
extraordinary responsibility of the common carrier lasts from the
time the goods are unconditionally placed in the possession of, and
received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the
consignee, or to the person who has a right to receive them. Asian
Terminals, Inc. v. Philam Insurance Co., Inc. (now Chartis
Philippines Insurance Inc.)/ Philam Insurance Co., Inc. (now
Chartis Philippines Insurance Inc.) v. Westwind Shipping
Corporation and Asian Terminals, Inc./ Westwind Shipping
Corporation v. Philam Insurance Co., Inc. and Asian Terminals,
Inc., G.R. Nos. 181163/181262/181319, July 24, 2013.
Contract; absolutely simulated contracts; void from the
beginning. The Court is in accord with the observation and findings
of the (RTC, Kalibo, Aklan) thus:
The amplitude of foregoing undisputed facts and circumstances
clearly shows that the sale of the land in question was purely
simulated. It is void from the very beginning (Article 1346, New
Civil Code). If the sale was legitimate, defendant Glenda should
have immediately taken possession of the land, declared in her name
for taxation purposes, registered the sale, paid realty taxes,
introduced improvements therein and should not have allowed
plaintiff to mortgage the land. These omissions properly militated
against defendant Glendas submission that the sale was legitimate
and the consideration was paid.
Dr. Lorna C. Formaran v. Dr. Glenda B. Ong and Solomon S. Ong,
G.R. No. 186264, July 8, 2013.
Contract of sale; elements. A valid contract of sale requires:
(a) a meeting of minds of the parties to transfer ownership of the
thing sold in exchange for a price; (b) the subject matter, which
must be a possible thing; and (c) the price certain in money or its
equivalent. Reman Recio v. Heirs of Spouses Aguego and Maria
Altamirano, G.R. No.182349, July 24, 2013.
Contract to sell; payment of the price; positive suspension
condition; effect of failure to pay. Clearly, the RTC arrived at
the above-quoted conclusion based on its mistaken premise that
rescission is applicable to the case. Hence, its determination of
whether there was substantial breach. As may be recalled, however,
the CA, in its assailed Decision, found the contract between the
parties as a contract to sell, specifically of a real property on
installment basis, and as such categorically declared rescission to
be not the proper remedy. This is considering that in a contract to
sell, payment of the price is a positive suspensive condition,
failure of which is not a breach of contract warranting rescission
under Article 1191 of the Civil Code but rather just an event that
prevents the supposed seller from being bound to convey title to
the supposed buyer. Also, and as correctly ruled by the CA, Article
1191 cannot be applied to sales of real property on installment
since they are governed by the Maceda Law.
There being no breach to speak of in case of non-payment of the
purchase price in a contract to sell, as in this case, the RTCs
factual finding that Lourdes was willing and able to pay her
obligation a conclusion arrived at in connection with the said
courts determination of whether the non-payment of the purchase
price in accordance with the terms of the contract was a
substantial breach warranting rescission therefore loses
significance. The spouses Bonrostros reliance on the said factual
finding is thus misplaced. They cannot invoke their readiness and
willingness to pay their obligation on November 24, 1993 as an
excuse from being made liable for interest beyond the said date.
Sps. Nameal and Lourdes Bonrostro v. Sps. Juan and Constacia Luna,
G.R. No.172346, July 24, 2013.
Damages; damages for loss of earning capacity; must be duly
proven by documentary evidence; exceptions. The Supreme Court
agrees with the Court of Appeals when it removed the RTCs award
respecting the indemnity for the loss of earning capacity. As it
has already previously ruled that damages for loss of earning
capacity is in the nature of actual damages, which as a rule must
be duly proven by documentary evidence, not merely by the
self-serving testimony of the widow.
By way of exception, damages for loss of earning capacity may be
awarded despite the absence of documentary evidence when (1) the
deceased is self-employed earning less than the minimum wage under
current labor laws, and judicial notice may be taken of the fact
that in the deceaseds line of work no documentary evidence is
available; or (2) the deceased is employed as a daily wage worker
earning less than the minimum wage under current labor laws. People
of the Philippines v. Garry Vergara y Oriel and Joseph Incencio y
Paulino, G.R. No. 177763, July 3, 2013Damages; exemplary damages;
concept. As for exemplary damages, Article 2229 provides that
exemplary damages may be imposed by way of example or correction
for the public good. Nonetheless, exemplary damages are imposed not
to enrich one party or impoverish another, but to serve as a
deterrent against or as a negative incentive to curb socially
deleterious actions. In the instant case, the Court agrees with the
CA in sustaining the award of exemplary damages, although it
reduced the amount granted, considering that respondent spouses
were deprived of their water supply for more than nine (9) months,
and such deprivation would have continued were it not for the
relief granted by the RTC. Joyce V. Ardiente v. Spouses Javier and
Ma. Theresa Pastofide, G.R. No. 161921, July 17, 2013.
Damages; exemplary damages; awarded if there is an aggravating
circumstance, whether ordinary or qualifying. Unlike the criminal
liability which is basically a State concern, the award of
exemplary damages, however, is likewise, if not primarily, intended
for the offended party who suffers thereby. It would make little
sense for an award of exemplary damages to be due the private
offended party when the aggravating circumstance is ordinary but to
be withheld when it is qualifying. Withal, the ordinary or
qualifying nature of an aggravating circumstance is a distinction
that should only be of consequence to the criminal, rather than to
the civil, liability of the offender. In fine, relative to the
civil aspect of the case, an aggravating circumstance, whether
ordinary or qualifying, should entitle the offended party to an
award of exemplary damages within the unbridled meaning of Article
2230 of the Civil Code. People of the Philippines v. Garry Vergara
y Oriel and Joseph Incencio y Paulino, G.R. No. 177763, July 3,
2013.
Damages; interest thereon; where obligation does not constitute
a loan or forbearance of money. The CA erred in imposing an
interest rate of 12% on the award of damages. Under Article 2209 of
the Civil Code, when an obligation not constituting a loan or
forbearance of money is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. In the similar case of Belgian Overseas
Chartering and Shipping NV v. Philippine First Insurance Co., lnc.,
the Court reduced the rate of interest on the damages awarded to
the carrier therein to 6% from the time of the filing of the
complaint until the finality of the decision. Asian Terminals, Inc.
v. Philam Insurance Co., Inc. (now Chartis Philippines Insurance
Inc.)/ Philam Insurance Co., Inc. (now Chartis Philippines
Insurance Inc.) v. Westwind Shipping Corporation and Asian
Terminals, Inc./ Westwind Shipping Corporation v. Philam Insurance
Co., Inc. and Asian Terminals, Inc., G.R. Nos.
181163/181262/181319, July 24, 2013.
Damages; moral damages; when recoverable. In Philippine National
Bank v. Spouses Rocamora, the Supreme Court said that:
Moral damages are not recoverable simply because a contract has
been breached. They are recoverable only if the defendant acted
fraudulently or in bad faith or in wanton disregard of his
contractual obligations. The breach must be wanton, reckless,
malicious or in bad faith, and oppressive or abusive. Likewise, a
breach of contract may give rise to exemplary damages only if the
guilty party acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner.
Carlos Lim, et al. v. Development Bank of the Philippines, G.R.
No. 177050, July 1, 2013.
Damages; moral damages; awarded where the victim of a crime
suffered a violent death, even in the absence of proof of mental
and emotional suffering of the victims heirs. The Supreme Court
sustained the RTCs award for moral damages in the amount of
P50,000.00 even in the absence of proof of mental and emotional
suffering of the victims heirs. As borne out by human nature and
experience, a violent death invariably and necessarily brings about
emotional pain and anguish on the part of the victims family. While
no amount of damages may totally compensate the sudden and tragic
loss of a loved one it is nonetheless awarded to the heirs of the
deceased to at least assuage them. People of the Philippines v.
Garry Vergara y Oriel and Joseph Incencio y Paulino, G.R. No.
177763, July 3, 2013
Damages; moral and exemplary damages in claims for disability
benefits; not recoverable where employer was not negligent in
affording the employee with medical treatment, and employer did not
forsake employee during the period of disability. The CA correctly
denied an award of moral and exemplary damages. The respondents
were not negligent in affording the petitioner with medical
treatment neither did they forsake him during his period of
disability. Camilo A. Esguerra v. United Philippines Lines, Inc.,
et al., G.R. No. 199932, July 3, 2013.
Human Relations; abuse of rights; Article 19 of the Civil Code;
concept; damages as reliefs. The principle of abuse of rights as
enshrined in Article 19 of the Civil Code provides that every
person must, in the exercise of his rights and in the performance
of his duties, act with justice, give everyone his due, and observe
honesty and good faith.
In this regard, the Courts ruling in Yuchengco v. The Manila
Chronicle Publishing Corporation is instructive, to wit:
xxxx
This provision of law sets standards which must be observed in
the exercise of ones rights as well as in the performance of its
duties, to wit: to act with justice; give everyone his due; and
observe honesty and good faith.
In Globe Mackay Cable and Radio Corporation v. Court of Appeals,
it was elucidated that while Article 19 lays down a rule of conduct
for the government of human relations and for the maintenance of
social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article
21 would be proper. The Court said:
One of the more notable innovations of the New Civil Code is the
codification of some basic principles that are to be observed for
the rightful relationship between human beings and for the
stability of the social order. [REPORT ON THE CODE COMMISSION ON
THE PROPOSED CIVIL CODE OF THE PHILIPPINES, p. 39]. The framers of
the Code, seeking to remedy the defect of the old Code which merely
stated the effects of the law, but failed to draw out its spirit,
incorporated certain fundamental precepts which were designed to
indicate certain norms that spring from the fountain of good
conscience and which were also meant to serve as guides for human
conduct [that] should run as golden threads through society, to the
end that law may approach its supreme ideal, which is the sway and
dominance of justice. (Id.) Foremost among these principles is that
pronounced in Article 19 x x x.
xxxx
This article, known to contain what is commonly referred to as
the principle of abuse of rights, sets certain standards which must
be observed not only in the exercise of ones rights, but also in
the performance of ones duties. These standards are the following:
to act with justice; to give everyone his due; and to observe
honesty and good faith. The law, therefore, recognizes a primordial
limitation on all rights; that in their exercise, the norms of
human conduct set forth in Article 19 must be observed. A right,
though by itself legal because recognized or granted by law as
such, may nevertheless become the source of some illegality. When a
right is exercised in a manner which does not conform with the
norms enshrined in Article 19 and results in damage to another, a
legal wrong is thereby committed for which the wrongdoer must be
held responsible. But while Article 19 lays down a rule of conduct
for the government of human relations and for the maintenance of
social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article
21 would be proper. Joyce V. Ardiente v. Spouses Javier and Ma.
Theresa Pastofide, G.R. No. 161921, July 17, 2013.
Human Relations; civil case for fraud; Article 33 of the Civil
Code provides that a civil case for damages based on fraud may
proceed independently of the criminal case therefor; said civil
case will not operate as a prejudicial question that will justify
the suspension of a criminal case. It is well settled that a civil
action based on defamation, fraud and physical injuries may be
independently instituted pursuant to Article 33 of the Civil Code,
and does not operate as a prejudicial question that will justify
the suspension of a criminal case. This was precisely the Courts
thrust in G.R. No. 148193, thus:
Moreover, neither is there a prejudicial question if the civil
and the criminal action can, according to law, proceed
independently of each other. Under Rule 111, Section 3 of the
Revised Rules on Criminal Procedure, in the cases provided in
Articles 32, 33, 34 and 2176 of the Civil Code, the independent
civil action may be brought by the offended party. It shall proceed
independently of the criminal action and shall require only a
preponderance of evidence. In no case, however, may the offended
party recover damages twice for the same act or omission charged in
the criminal action.
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by respondent
and his mother in selling the disputed lot to PBI is an independent
civil action under Article 33 of the Civil Code. As such, it will
not operate as a prejudicial question that will justify the
suspension of the criminal case at bar. Rafael Jose Consing, Jr. v.
People of the Philippines, G.R. No. 161075, July 15, 2013.
Letter of credit; definition; nature. A letter of credit is a
financial device developed by merchants as a convenient and
relatively safe mode of dealing with sales of goods to satisfy the
seemingly irreconcilable interests of a seller, who refuses to part
with his goods before he is paid, and a buyer, who wants to have
control of his goods before paying. However, letters of credit are
employed by the parties desiring to enter into commercial
transactions, not for the benefit of the issuing bank but mainly
for the benefit of the parties to the original transaction, in
these cases, Nichimen Corporation as the seller and Universal
Motors as the buyer. Hence, the latter, as the buyer of the Nissan
CKD parts, should be regarded as the person entitled to delivery of
the goods. Accordingly, for purposes of reckoning when notice of
loss or damage should be given to the carrier or its agent, the
date of delivery to Universal Motors is controlling. Asian
Terminals, Inc. v. Philam Insurance Co., Inc. (now Chartis
Philippines Insurance Inc.)/ Philam Insurance Co., Inc. (now
Chartis Philippines Insurance Inc.) v. Westwind Shipping
Corporation and Asian Terminals, Inc./ Westwind Shipping
Corporation v. Philam Insurance Co., Inc. and Asian Terminals,
Inc., G.R. Nos. 181163/181262/181319, July 24, 2013.
Mortgage; includes all natural or civil fruits and improvements
found on the mortgaged property when the secured obligation becomes
due; in case of non-payment of the secured debt, foreclosure
proceedings shall cover not only the hypothecated property but all
its accessions and accessories as well; indispensable requisite
that mortgagor be the absolute owner of the encumbered property.
Rent, as an accessory, follows the principal. In fact, when the
principal property is mortgaged, the mortgage shall include all
natural or civil fruits and improvements found thereon when the
secured obligation becomes due as provided in Article 2127 of the
Civil Code, viz:Art. 2127. The mortgage extends to the natural
accessions, to the improvements, growing fruits, and the rents or
income not yet received when the obligation becomes due, and to the
amount of the indemnity granted or owing to the proprietor from the
insurers of the property mortgaged, or in virtue of expropriation
for public use, with the declarations, amplifications and
limitations established by law, whether the estate remains in the
possession of the mortgagor, or it passes into the hands of a third
person.
Consequently, in case of non-payment of the secured debt,
foreclosure proceedings shall cover not only the hypothecated
property but all its accessions and accessories as well. This was
illustrated in the early case of Cu Unjieng e Hijos v. Mabalacat
Sugar Co. where the Court held:
That a mortgage constituted on a sugar central includes not only
the land on which it is built but also the buildings, machinery,
and accessories installed at the time the mortgage was constituted
as well as the buildings, machinery and accessories belonging to
the mortgagor, installed after the constitution thereof x x x
[.]
Applying such pronouncement in the subsequent case of Spouses
Paderes v. Court of Appeals, the Court declared that the
improvements constructed by the mortgagor on the subject lot are
covered by the real estate mortgage contract with the mortgagee
bank and thus included in the foreclosure proceedings instituted by
the latter.
However, the rule is not without qualifications. In Castro, Jr.
v. CA the Court explained that Article 2127 is predicated on the
presumption that the ownership of accessions and accessories also
belongs to the mortgagor as the owner of the principal. After all,
it is an indispensable requisite of a valid real estate mortgage
that the mortgagor be the absolute owner of the encumbered
property. Philippine National Bank v. Sps. Bernard and Cresencia
Maraon, G.R.No. 189316, July 1, 2013.
Mortgage; mortgagee in good faith; right to have mortgage lien
carried over and annotated on the new certificate of title. The
protection afforded to PNB as a mortgagee in good faith refers to
the right to have its mortgage lien carried over and annotated on
the new certificate of title issued to Spouses Maraon as so
adjudged by the RTC. Thereafter, to enforce such lien thru
foreclosure proceedings in case of non- payment of the secured
debt, as PNB did so pursue. The principle, however, is not the
singular rule that governs real estate mortgages and foreclosures
attended by fraudulent transfers to the mortgagor. Philippine
National Bank v. Sps. Bernard and Cresencia Maraon,G.R.No. 189316,
July 1, 2013.
Obligations; conditions; fulfillment thereof; deemed fulfilled
when obligor voluntarily prevents it fulfillment; requisites. The
spouses Bonrostro want to be relieved from paying interest on the
amount of P214,492.62 which the spouses Luna paid to Bliss as
amortizations by asserting that they were prevented by the latter
from fulfilling such obligation. They invoke Art. 1186 of the Civil
Code which provides that the condition shall be deemed fulfilled
when the obligor voluntarily prevents its fulfillment.
However, the Court finds Art. 1186 inapplicable to this case.
The said provision explicitly speaks of a situation where it is the
obligor who voluntarily prevents fulfillment of the condition.
Here, Constancia is not the obligor but the obligee. Moreover, even
if this significant detail is to be ignored, the mere intention to
prevent the happening of the condition or the mere placing of
ineffective obstacles to its compliance, without actually
preventing fulfillment is not sufficient for the application of
Art. 1186. Two requisites must concur for its application, to wit:
(1) intent to prevent fulfillment of the condition; and, (2) actual
prevention of compliance. Sps. Nameal and Lourdes Bonrostro v. Sps.
Juan and Constacia Luna, G.R. No.172346, July 24, 2013.
Obligations; constructive fulfillment; Article 1186 of the Civil
Code; requisites. As aptly pointed out by the CA, Article 1186 of
the Civil Code, which states that the condition shall be deemed
fulfilled when the obligor voluntarily prevents its fulfillment,
does not apply in this case, viz:Article 1186 enunciates the
doctrine of constructive fulfillment of suspensive conditions,
which applies when the following three (3) requisites concur, viz:
(1) The condition is suspensive; (2) The obligor actually prevents
the fulfillment of the condition; and (3) He acts voluntarily.
Suspensive condition is one the happening of which gives rise to
the obligation. It will be irrational for any Bank to provide a
suspensive condition in the Promissory Note or the Restructuring
Agreement that will allow the debtor-promissor to be freed from the
duty to pay the loan without paying it.
Carlos Lim, et al. v. Development Bank of the Philippines, G.R.
No. 177050, July 1, 2013.
Obligations; if an obligation consists of payment of money, and
the debtor incurs in delay, the indemnity for damages, there being
no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal
interest. Under Article 2209 ofthe Civil Code, [i]fthe obligation
consists in the payment of a sum of money, and the debtor incurs in
delay, the indemnity for damages, there being no stipulation to the
contrary, shall be the payment of the interest agreed upon, and in
the absence of stipulation, the legal interest x x x. There being
no stipulation on interest in case ofdelay in the payment
ofamortization, the CA thus correctly imposed interest at the legal
rate which is now 12%per annum. Sps. Nameal and Lourdes Bonrostro
v. Sps. Juan and Constacia Luna, G.R. No.172346, July 24, 2013.
Penalties and interest rates; penalties and interest rates
should be expressly stipulated in writing. As to the imposition of
additional interest and penalties not stipulated in the Promissory
Notes, this should not be allowed. Article 1956 of the Civil Code
specifically states that no interest shall be due unless it has
been expressly stipulated in writing. Thus, the payment of interest
and penalties in loans is allowed only if the parties agreed to it
and reduced their agreement in writing. Carlos Lim, et al. v.
Development Bank of the Philippines,G.R. No. 177050, July 1,
2013.
Prescription; Article 1144 of the Civil Code. We concur with the
CAs ruling that respondents action did not yet prescribe. The legal
provision governing this case was not Article 1146 of the Civil
Code, but Article 1144 of the Civil Code, which states:
Article 1144. The following actions must be brought within ten
years from the time the cause of action accrues:
(1)Upon a written contract; (2) Upon an obligation created by
law; (3)Upon a judgment.
Vector Shipping Corporation, et al. v. American Home Assurance
Co., et al., G.R. No. 159213, July 3, 2013.
Property; co-ownership; sale of co-owned property; if only one
co-owner agreed to the sale, said co-owner only sold his aliquot
share in the subject property. But as held by the appellate court,
the sale between the petitioner and Alejandro is valid insofar as
the aliquot share of respondent Alejandro is concerned. Being a
co-owner, Alejandro can validly and legally dispose of his share
even without the consent of all the other co-heirs. Since the
balance of the full price has not yet been paid, the amount paid
shall represent as payment to his aliquot share. This then leaves
the sale of the lot of the Altamiranos to the Spouses Lajarca valid
only insofar as their shares are concerned, exclusive of the
aliquot part of Alejandro, as ruled by the CA. Reman Recio v. Heirs
of Spouses Aguego and Maria Altamirano, G.R. No.182349, July 24,
2013.
Property; patrimonial property and property of public dominion;
patrimonial property of the State may be the object of
prescription, however, those intended for some public service or
the development of national wealth are property of public dominion,
which are not susceptible to acquisition by prescription; public
domain lands become patrimonial property only if there is a
declaration that these are alienable or disposable, together with
an express government manifestation that the property is already
patrimonial or no longer retained for public service or the
development of national wealth. Under Article 422 of the Civil
Code, public domain lands become patrimonial property only if there
is a declaration that these are alienable or disposable, together
with an express government manifestation that the property is
already patrimonial or no longer retained for public service or the
development of national wealth. Only when the property has become
patrimonial can the prescriptive period for the acquisition of
property of the public dominion begin to run. Also under Section
14(2) of Presidential Decree (P.D.) No. 1529, it is provided that
before acquisitive prescription can commence, the property sought
to be registered must not only be classified as alienable and
disposable, it must also be expressly declared by the State that it
is no longer intended for public service or the development of the
national wealth, or that the property has been converted into
patrimonial. Absent such an express declaration by the State, the
land remains to be property of public dominion. Dream Village
Neighborhood Association, Inc., represented by its Incumbent
President Greg Seriego v. Bases Conversion Development Authority,
G.R.