SURVEY OF RECENT JURISPRUDENCE

IN CIVIL LAW
(Part 2)
January 2005 April 2005
By:
Anna Francesca M. Limbo
Head, Academics Committee
UP BarOps 2005

I.

Credit Transactions
A. Deposit

YHT Realty Corp Vs. CA (February 2005): If the guest desires to open his safety
deposit box, he must request the management for the other key to open the same. In
other words, the guest alone cannot open the safety deposit box without the assistance
of the management or its employees. With more reason that access to the safety
deposit box should be denied if the one requesting for the opening of the safety
deposit box is a stranger. Thus, in case of loss of any item deposited in the safety
deposit box, it is inevitable to conclude that the management had at least a hand in
the consummation of the taking, unless the reason for the loss is force majeure.

B. Letters of Credit

Landbank vs. Monets Export and Manufacturing (March 2005): What characterizes
letters of credit, as distinguished from other accessory contracts, is the engagement of
the issuing bank to pay the seller once the draft and the required shipping documents
are presented to it. In turn, this arrangement assures the seller of prompt payment,
independent of any breach of the main sales contract. By this so-called independence
principle, the bank determines compliance with the letter of credit only by examining
the shipping documents presented; it is precluded from determining whether the main
contract is actually accomplished or not.

C. Payment

Alonzo Vs San Juan (February 2005): Apropos is the rule so well-settled that a
receipt of payment is the best evidence of the fact of payment. In Monfort v.
Aguinaldo, the receipts of payment, although not exclusive, were deemed to be the
best evidence. A receipt is a written and signed acknowledgment that money has or
goods have been delivered, while a voucher is a documentary record of a business
transaction. The references to alleged check payments in the vouchers presented do
not vest them with the character of receipts.

II.

Land Titles and Deeds

A. Registration

III.

Lim vs. Chuatoco (March 2005): The fraudulent registration of the property in Rafaels
name using the forged deed of sale is not sufficient to vest title to the entire property
in him. Settled is the rule that a certificate is not conclusive evidence of title;
registration does not vest title, it is merely evidence of such title over a particular
property. Certificates of title merely confirm or record title already existing and
vested. They cannot be used to protect a usurper from the true owner, nor can they be
used as a shield for the commission of fraud, nor to permit one to enrich himself at the
expense of others. The Torrens sytem has never been recognized as a mode of acquiring
ownership.
Obligations and Contracts

A. Compromise Agreements

National Commercial Bank of Saudi Arabia Vs. Court of Appeals, et al (January

2005): Under Article 1306 of the Civil Code, contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order, or public policy.
Thus, a compromise agreement whereby the parties make reciprocal concessions to
resolve their differences to thereby put an end to litigation is binding on the
contracting parties and is expressly acknowledged as a juridical agreement between
them. To have the force of res judicata, however, the compromise agreement must be
approved by final order of the court. To be valid, the compromise agreement must be
based on real claims and actually agreed upon in good faith.

B. Trusts

Heirs of Maximo Sanjorjo, et al. Vs. Heirs of Manuel Y. Quijano, et al.(January

2005): Article 1456 of the New Civil Code provides that a person acquiring property
through fraud becomes by operation of law a trustee of an implied trust for the benefit
of the real owner of the property. The presence of fraud in this case created an
implied trust in favor of the petitioners, giving them the right to seek reconveyance of
the property from the private respondents. However, because of the trial courts
dismissal order adverted to above, the petitioners have been unable to prove their
charges of fraud and misrepresentation. The petitioners action for reconveyance may
not be said to have prescribed, for, basing the present action on implied trust, the
prescriptive period is ten years.[ The petitioners action for reconveyance may not be
said to have prescribed, for, basing the present action on implied trust, the
prescriptive period is ten years

IV.

Persons and Family Relations

A. Property Relations of Spouses

V.

Homeowners Savings vs. Dailo (March 2005): The regime of conjugal partnership of
gains is a special type of partnership, where the husband and wife place in a common
fund the proceeds, products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts or by chance. Unlike the
absolute community of property wherein the rules on co-ownership apply in a
suppletory manner, the conjugal partnership shall be governed by the rules on contract
of partnership in all that is not in conflict with what is expressly determined in the
chapter (on conjugal partnership of gains) or by the spouses in their marriage
settlements
Property

A. Co-Ownership and Partition

Garingan Vs. Garingan (April 2005): The settlement of the issue of ownership is the
first stage in an action for partition, and the action will not lie if the claimant has no
rightful interest in the property in dispute.

B. Easements

Spouses De la Cruz Vs. Olga Ramiscal(February 2005): The conferment of a legal

easement of right of way under Article 649 is subject to proof of the following
requisites: (1) it is surrounded by other immovables and has no adequate outlet to a
public highway; (2) payment of proper indemnity; (3) the isolation is not the result of
its own acts; (4) the right of way claimed is at the point least prejudicial to the servient
estate; and (5) to the extent consistent with the foregoing rule, where the distance
from the dominant estate to a public highway may be the shortest

C. Lease

Ocampo Vs. Santiago (April 2005): In Mirasol v. Magsuci, et al., it was held that the
sale of a leased property places the vendee into the shoes of the original lessor to
whom the lessee bound himself to pay. The vendee acquires the right to evict the
lessee from the premises and to recover the unpaid rentals after the vendee had
notified the lessee that he had bought the leased property and that the rentals on it
should be paid to him, and the lessee refused to comply with the demand.

Tanay Recreation Vs Fausto (April 2005): When a lease contract contains a right of
first refusal, the lessor is under a legal duty to the lessee not to sell to anybody at any
price until after he has made an offer to sell to the latter at a certain price and the
lessee has failed to accept it. The lessee has a right that the lessor's first offer shall be
in his favor.Petitioners right of first refusal is an integral and indivisible part of the
contract of lease and is inseparable from the whole contract. The consideration for
the lease includes the consideration for the right of first refusal and is built into the
reciprocal obligations of the parties.

D. Ownership and Possession

Sampayan Vs. CA (January 2005): In the absence of prior physical possession by the
plaintiff in a forcible entry case warrants the dismissal of his complaint.

Tecson Vs. Gutierrez (March 2005): It is settled that the only issue for resolution in
ejectment suits is the physical or material possession of the property involved,
independent of any claim of ownership by any of the party litigants. In forcible entry
and unlawful detainer cases, even if the defendant raises the question of ownership in
his pleadings and the question of possession cannot be resolved without deciding the
issue of ownership, the MTC, nonetheless, has the undoubted competence to
provisionally resolve the issue of ownership for the sole purpose of determining the
issue of possession.

VI.

Sales
A. Brokers

Medrano Vs. CA (February 2005): Before negotiating a sale, a broker must first and
foremost bring in a prospective buyer. It has been held that a broker earns his pay
merely by bringing the buyer and the seller together, even if no sale is eventually
made. The essential feature of a brokers conventional employment is merely to
procure a purchaser for a property ready, able, and willing to buy at the price and on
the terms mutually agreed upon by the owner and the purchaser. And it is not a
prerequisite to the right to compensation that the broker conduct the negotiations
between the parties after they have been brought into contact with each other through
his efforts. Notably, there are cases where the right of the brokers to recover
commissions were upheld where they actually took no part in the negotiations, never
saw the customer, and even some in which they did nothing except advertise the
property, as long as it can be shown that they were the efficient cause of the sale.

B. Double Sales

Consolidated Rural Bank Vs CA (January 2005): The Court is therefore confronted

with two sales over the same property. Article 1544 of the Civil Code provides:
ART. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to
the person acquiring it who in good faith first recorded it in the
Registry of Property. x x x (Underscoring supplied).
From the foregoing provisions and in the absence of proof that Marquez has actual or
constructive knowledge of plaintiffs and intervenors claim, the Court has to rule that
as the vendee who first registered his sale, Marquez ownership over Lot 7036-A-7 must
be upheld

C. Sales w/ Repurchase

VII.

Ramos Vs. Sarao (February 2005): In a pacto de retro, ownership of the property sold
is immediately transferred to the vendee a retro, subject only to the repurchase by the
vendor a retro within the stipulated period. The vendor a retros failure to exercise
the right of repurchase within the agreed time vests upon the vendee a retro, by
operation of law, absolute title to the property. Such title is not impaired even if the
vendee a retro fails to consolidate title under Article 1607 of the Civil Code. On the
other hand, an equitable mortgage is a contract that -- although lacking the formality,
the form or words, or other requisites demanded by a statute -- nevertheless reveals
the intention of the parties to burden a piece or pieces of real property as security for
a debt. The essential requisites of such a contract are as follows: (1) the parties enter
into what appears to be a contract of sale, but (2) their intention is to secure an
existing debt by way of a mortgage. The nonpayment of the debt when due gives the
mortgagee the right to foreclose the mortgage, sell the property, and apply the
proceeds of the sale to the satisfaction of the loan obligation.
Succession

A. Preterition

VIII.

JLT Agro vs. Balansag (March 2005): A testator does not execute a will if he resorts
to a partition inter vivos of his properties. Thus, it is premature if not irrelevant to
speak of preterition prior to the his death in the absence of a will depriving a legal heir
of his legitime.
Torts and Damages

A. In Relation To Breach of Contract

Lagon vs. CA (March 2005): Article 1314 of the Civil Code provides that any third
person who induces another to violate his contract shall be liable for damages to the
other contracting party. The tort recognized in that provision is known as interference
with contractual relations. The interference is penalized because it violates the
property rights of a party in a contract to reap the benefits that should result
therefrom.