August 2013 Philippine Supreme Court Decisions on Civil Law

Compensation; Concept; Requisites. Compensation is a mode of extinguishing to the concurrent

amount, the debts of persons who in their own right are creditors and debtors of each other. The

object of compensation is the prevention of unnecessary suits and payments through the mutual

extinction by operation of law of concurring debts. Article 1279 of the Civil Code provides for

the requisites for compensation to take effect:

Article 1279. In order that compensation may be proper, it is necessary:

(1)That each one of the obligors be bound principally, and that he be at the same time a principal

creditor of the other;

(2)That both debts consist in a sum of money, or if the things due are consumable, they be of the

same kind, and also of the same quality if the latter has been stated;

(3)That the two debts be due;

(4)That they be liquidated and demandable;

(5)That over neither of them there be any retention or controversy, commenced by third persons

and communicated in due time to the debtor.

Adelaida Soriano v. People of the Philippines, G.R. No. 181692, August 14, 2013.

Compensation; when both debts are liquidated and demandable. A debt is liquidated when the

amount is known or is determinable by inspection of the terms and conditions of relevant

documents. Adelaida Soriano v. People of the Philippines, G.R. No. 181692, August 14, 2013.

Contracts; determination of nature of contract. In determining the nature of a contract, courts are

not bound by the title or name given by the parties. The decisive factor in evaluating such

agreement is the intention of the parties, as shown not necessarily by the terminology used in the

contract but by their conduct, words, actions and deeds prior to, during and immediately after

executing the agreement. As such, therefore, documentary and parol evidence may be submitted

and admitted to prove such intention. Hur Tin Yang v. People of the Philippines, G.R. No.

195117, August 14, 2013.

Co-ownership; rights of co-owners. Having succeeded to the property as heirs of Gregoria and

Romana, petitioners and respondents became co-owners thereof. As co-owners, they may use the

property owned in common, provided they do so in accordance with the purpose for which it is

intended and in such a way as not to injure the interest of the co-ownership or prevent the other

co-owners from using it according to their rights. They have the full ownership of their parts and

of the fruits and benefits pertaining thereto, and may alienate, assign or mortgage them, and even

substitute another person in their enjoyment, except when personal rights are involved. Each co-

owner may demand at any time the partition of the thing owned in common, insofar as his share

is concerned. Finally, no prescription shall run in favor of one of the co-heirs against the others

so long as he expressly or impliedly recognizes the co-ownership. Antipolo Ining (deceased),

survived by Manuel Villanueva, Teodora Villanueva-Francisco, Camilo Francisco, Adolfo

Francisco, Lucimo Francisco, Jr., Milagros Francisco,Celedonio Francisco, Herminigildo

Francisco; Ramon Tresvalles, Roberto Tajonera, Natividad Ining-Ibea (deceased) survived by

Edilberto Ibea, Josefa Ibea, Martha Ibea, Carmen Ibea, Amparo Ibea-Fernandez, Henry Ruiz,

Eugenio Ruiz and Pastor Ruiz; Dolores Ining-Rimon (deceased) survived by Jesus Rimon,

Cesaria Rimon Gonzales and Remedios Rimon Cordero; and Pedro Ining (deceased) survived by

Elisa Tan Ining (wife) and Pedro Ining, Jr. v. Leonardo R. Vega, substituted by Lourdes Vega,

Restonilo I. Vega, Crispulo M. Vega, Milbuena Vega-Restituto and Lenard Vega, G.R. No.

174727, August 12, 2013.

Co-ownership; prescription; for prescription to set in, the repudiation must be done by a co-

owner; requisites. Time and again, it has been held that a co-owner cannot acquire by prescription the share of the other co-owners, absent any clear repudiation of the co-ownership.

In order that the title may prescribe in favor of a co-owner, the following requisites must concur:

(1) the co-owner has performed unequivocal acts of repudiation amounting to an ouster of the

other co-owners; (2) such positive acts of repudiation have been made known to the other co-

owners; and (3) the evidence thereof is clear and convincing. In fine, since none of the co-owners made a valid repudiation of the existing co-ownership, Leonardo could seek partition of

the property at any time. Antipolo Ining (deceased), survived by Manuel Villanueva, Teodora

Villanueva-Francisco, Camilo Francisco, Adolfo Francisco, Lucimo Francisco, Jr., Milagros

Francisco,Celedonio Francisco, Herminigildo Francisco; Ramon Tresvalles, Roberto Tajonera,

Natividad Ining-Ibea (deceased) survived by Edilberto Ibea, Josefa Ibea, Martha Ibea, Carmen

Ibea, Amparo Ibea-Fernandez, Henry Ruiz, Eugenio Ruiz and Pastor Ruiz; Dolores Ining-Rimon

(deceased) survived by Jesus Rimon, Cesaria Rimon Gonzales and Remedios Rimon Cordero;

and Pedro Ining (deceased) survived by Elisa Tan Ining (wife) and Pedro Ining, Jr. v. Leonardo

R. Vega, substituted by Lourdes Vega, Restonilo I. Vega, Crispulo M. Vega, Milbuena Vega-

Restituto and Lenard Vega, G.R. No. 174727, August 12, 2013.

Damages; actual damages; requires competent proof of the actual amount of loss. To justify an

award for actual damages, there must be competent proof of the actual amount of loss. Credence

can be given only to claims duly supported by receipts. Respondents did not submit any

documentary proof, like receipts, to support their claim for actual damages. Comsavings Bank

(now GSIS Family Bank) v. Sps. Danilo and Estrella Capistrano, G.R. No. 170942, August 28,

2013.

Damages; attorneys fees; allowed when exemplary damages are awarded or where the plaintiff has incurred expenses to protect his interest by reason of defendants act or omission. Article 2208 of the Civil Code allows recovery of attorneys fees when exemplary damages are awarded or where the plaintiff has incurred expenses to protect his interest by reason of defendants act or omission. Considering that exemplary damages were properly awarded here, and that

respondents hired a private lawyer to litigate its cause, the Supreme Court agrees with the RTC

and CA that the P30,000.00 allowed as attorneys fees were appropriate and reasonable. Comsavings Bank (now GSIS Family Bank) v. Sps. Danilo and Estrella Capistrano, G.R. No.

170942, August 28, 2013.

Damages; Award of attorneys fees and litigation expenses and costs; justified when there is bad faith. Even granting that Atty. Sabitsana has ceased to act as the Muertegui familys lawyer, he still owed them his loyalty. The termination of attorney-client relation provides no justification

for a lawyer to represent an interest adverse to or in conflict with that of the former client on a

matter involving confidential information which the lawyer acquired when he was counsel. The

clients confidence once reposed should not be divested by mere expiration of professional employment. This is underscored by the fact that Atty. Sabitsana obtained information from

Carmen which he used to his advantage and to the detriment of his client.

[F]rom the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in

pursuing the sale of the lot despite being apprised of the prior sale in respondents favor. Moreover, petitioner Atty. Sabitsana has exhibited a lack of loyalty toward his clients, the

Muerteguis, and by his acts, jeopardized their interests instead of protecting them. Over and

above the trial courts and the CAs findings, this provides further justification for the award of attorneys fees, litigation expenses and costs in favor of the respondent. Spouses Celemencio C. Sabitsana, Jr. and Ma. Rosario M. Sabitsana v. Juanito F. Muertegui, represented by his

attorney-in-fact, Domingo A. Muertegui, Jr., G.R. No. 181359, August 5, 2013.

Damages; Attorneys fees; what constitute bad faith. There was no gross and evident bad faith on the part of Asian Construction in filing its complaint against Sumitomo since it was merely

seeking payment of its unpaid works done pursuant to the Agreement. Neither can its subsequent

refusal to accept Sumitomos offered compromise be classified as a badge of bad faith since it was within its right to either accept or reject the same owing to its contractual nature. Absent any

other just or equitable reason to rule otherwise, these incidents are clearly off-tangent with a

finding of gross and evident bad faith which altogether negates Sumitomos entitlement to attorneys fees. Asian Construction and Development Corporation v. Sumitomo Corporation / Sumitomo Corporation v. Asia Construction and Development Corporation, G.R. No. 196723 /

G.R. No. 196728, August 28, 2013.

Damages; Attorneys fees; when awarded. Jurisprudence dictates that in the absence of a governing stipulation, attorneys fees may be awarded only in case the plaintiffs action or defendants stand is so untenable as to amount to gross and evident bad faith. This is embodied in Article 2208 of the Civil Code which states:

Article 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial costs, cannot be recovered, except:

x x x x

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim;

x x x x

Asian Construction and Development Corporation v. Sumitomo Corporation / Sumitomo

Corporation v. Asia Construction and Development Corporation, G.R. No. 196723 / G.R. No.

196728, August 28, 2013.

Damages; Exemplary damages; the law allows the grant of exemplary damages to set an example

for the public good. The law allows the grant of exemplary damages to set an example for the

public good. The business of a bank is affected with public interest; thus, it makes a sworn

profession of diligence and meticulousness ingiving irreproachable service. For this reason, the

bank should guard against injury attributable to negligence or bad faith on its part. The banking

sector must at all times maintain a high level of meticulousness. The grant of exemplary damages

is justified by the initial carelessness of petitioner, aggravated by its lack of promptness in

repairing its error. Comsavings Bank (now GSIS Family Bank) v. Sps. Danilo and Estrella

Capistrano, G.R. No. 170942, August 28, 2013.

Damages; Moral damages; recoverable for acts or actions referred to in Article 20 of the Civil

Code. In their amended complaint, respondents claimed that the acts of GCB Builders and

Comsavings Bank had caused them to suffer sleepless nights, worries and anxieties. The claim

was well founded. Danilo worked in Saudi Arabia in order to pay the loan used for the

construction of their family home. His anxiety and anguish over the incomplete and defective

construction of their house, as well as the inconvenience he and his wife experienced because of

this suit were not easily probable. On her part, Estrella was a mere housewife, but was the

attorney-in-fact of Danilo in matters concerning the loan transaction. With Danilo working

abroad, she was alone in overseeing the house construction and the progress of the present case.

Given her situation, she definitely experienced worries and sleepless nights. The award of moral

damages of P100,000.00 awarded by the CA as exemplary damages is proper. Comsavings Bank

(now GSIS Family Bank) v. Sps. Danilo and Estrella Capistrano, G.R. No. 170942, August 28,

2013.

Damages; Temperate damages; may be recovered when the court finds that some pecuniary loss

was suffered but its amount cannot be proved with certainty. Nonetheless, it cannot be denied

that they had suffered substantial losses. Article 2224 of the Civil Code allows the recovery of

temperate damages when the court finds that some pecuniary loss was suffered but its amount

cannot be proved with certainty. In lieu of actual damages, therefore, temperate damages of

P25,000.00 are awarded. Such amount, in the courts view, is reasonable under the circumstances. Comsavings Bank (now GSIS Family Bank) v. Sps. Danilo and Estrella

Capistrano, G.R. No. 170942, August 28, 2013.

Damages; Interests; Eastern Shipping Lines guidelines as modified by BSP-MB Circular No.

799. The Supreme Court set out the following guidelines on damages and interest due:

1. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or

quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under

Title XVIII on Damages of the Civil Code govern in determining the measure of recoverable damages.

2. With regard particularly to an award of interest in the concept of actual and compensatory

damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

(a) When the obligation is breached, and it consists in the payment of a sum of money, i.e., a

loan or forbearance of money, the interest due should be that which may have been stipulated in

writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially

demanded. In the absence of of stipulation, the rate of interest shall be 6% per annum to be

computed from default, i.e., from judicial or extrajudicial demand under and subject to the

provisions of Article 1169 the Civil Code.

(b) 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. No interest, however, shall be adjudged on unliquidated claims or damages,

except when or until the demand can be established with reasonable certainty. Accordingly,

where the demand is established with reasonable certainty, the interest shall begin to run from

the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such

certainty cannot be so reasonably established at the time the demand is made, the interest shall

begin to run only from the date the judgment of the court is made (at which time the

quantification of damages may be deemed to have been reasonably ascertained). The actual base

for the computation of legal interest shall, in any case, be on the amount finally adjudged.

(c) When the judgment of the court awarding a sum of money becomes final and executory, the

rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6%

per annum from such finality until its satisfaction, this interim period being deemed to be by then

an equivalent to a forbearance of credit. Dario Nacar v. Gallery Frames and/or Felipe Borde,

Jr., G.R. No. 189871, August 13, 2013.

Gross negligence; concept. Based on the provisions, a banking institution like Comsavings Bank

is obliged to exercise the highest degree of diligence as well as high standards of integrity and

performance in all its transactions because its business is imbued with public interest. As aptly

declared in Philippine National Bank v. Pike: [T]he stability of banks largely depends on the confidence of the people in the honesty and efficiency of banks. Gross negligence connotes want of care in the performance of ones duties; it is a negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is duty to act, not

inadvertently but willfully and intentionally, with a conscious indifference to consequences

insofar as other persons may be affected. It evinces a thoughtless disregard of consequences

without exerting any effort to avoid them. Comsavings Bank (now GSIS Family Bank) v. Sps.

Danilo and Estrella Capistrano, G.R. No. 170942, August 28, 2013.

Interest; Legal rate of interest effective July 1, 2013; pursuant to BSP Circular 799, series of

2013, the legal rate of interest shall be 6% per annum. The Court held that [P]ursuant to Circular No. 799, series of 2013 of the Bangko Sentral ng Pilipinas which took effect July 1,

2013, the amount of P6,000.00, erroneously paid by Petitioner to the bank, shall earn interest at

the rate of 6% per annum computed from the filing of the Petition in Civil Case No. 5535 up to

its full satisfaction. Virginia M. Venzon v. Rural Bank of Buenavista, Inc., represented by Lourdesita E. Parajes, G.R. No. 178031, August 28, 2013.

Interest; legal rate of interest; interest at 6% per annum imposed on award in favor of illegally

dismissed employees. Interest at the rate of 6% per annum must be imposed on the award for

separation pay, back wages, and attorneys fees to illegally dismissed employees in accordance with Circular No. 799, Series of 2013 of the Bangko Sentral ng Pilipinas which took effect July

1, 2013. Vicente Ang v. Seferino San Joaquin, Jr., and Diosdado Fernandez, G.R. No. 185549,

August 7, 2013.

Interest; legal interest; where obligation constitutes a loan or forbearance of money, goods or

credit; legal rate allowed in judgments. In the absence of an express stipulation as to the rate of

interest that would govern the parties, the rate of legal interest for loans or forbearance of any

money, goods or credits and the rate allowed in judgments shall no longer be 12% per annum. As

reflected in the case of Eastern Shipping Lines and Subsection X305.1 of the Manual of

Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of

Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No.

799, the interest rate will now be 6% per annum effective July 1, 2013. Dario Nacar v. Gallery

Frames and/or Felipe Borde, Jr., G.R. No. 189871, August 13, 2013.

Interest; Legal interest; prospective application. It should be noted that the new rate could only

be applied prospectively and not retroactively. Consequently, the 12% per annum legal interest

shall apply only until June 30, 2013. Come July 1, 2013 the new rate of 6% per annum shall be

the prevailing rate of interest when applicable. Nonetheless, with regard to those judgments that

have become final and executory prior to July 1, 2013, said judgments shall not be disturbed and

shall continue to be implemented applying the rate of interest fixed therein. Dario Nacar v.

Gallery Frames and/or Felipe Borde, Jr., G.R. No. 189871, August 13, 2013.

Laches; definition. The Court observes that laches had already set in, thereby precluding the

Andrades from pursuing their claim. Case law defines laches as the failure to assert a right for an unreasonable and unexplained length of time, warranting a presumption that the party entitled

to assert it has either abandoned or declined to assert it. Bobby Tan v. Grace Andrade, et al./Grace Andrade, et al. v. Bobby Tan, G.R. Nos. 171904 & 172017, August 7, 2013.

Quasi-contracts; solutio indebiti; concept. In a controversy over payment made after the

foreclosure of the mortgaged property, the Court held: Since respondent was not entitled to receive the said amount, as it is deemed fully paid from the foreclosure of petitioners property since its bid price at the auction sale covered all that petitioner owed it by way of principal,

interest, attorneys fees and charges, it must return the same to petitioner. If something is received when there is no right to demand it, and it was unduly delivered through mistake, the

obligation to return it arises. Virginia M. Venzon v. Rural Bank of Buenavista, Inc., represented by Lourdesita E. Parajes, G.R. No. 178031, August 28, 2013.

Sales; double sale involving unregistered land; Article 1544 of the Civil Code does not apply;

prior sale, even if made through an unnotarized deed of sale, prevails; registration of second sale

is unavailing as registration does not vest title; Under Act 3344, registration if instruments

affecting unregistered lands is without prejudice to a third party with a better right; actual and

prior knowledge of the first sale makes the subsequent buyers purchasers in bad faith. Article

1544 of the Civil Code does not apply to sales involving unregistered land. Both the trial court

and the CA are, however, wrong in applying Article 1544 of the Civil Code. Both courts seem to

have forgotten that the provision does not apply to sales involving unregistered land. Suffice it to

state that the issue of the buyers good or bad faith is relevant only where the subject of the sale is registered land, and the purchaser is buying the same from the registered owner whose title to

the land is clean. In such case, the purchaser who relies on the clean title of the registered owner

is protected if he is a purchaser in good faith for value.

The sale to respondent Juanito was executed on September 2, 1981 via an unnotarized deed of

sale, while the sale to petitioners was made via a notarized document only on October 17, 1991,

or ten years thereafter. Thus, Juanito who was the first buyer has a better right to the lot, while

the subsequent sale to petitioners is null and void, because when it was made, the seller Garcia

was no longer the owner of the lot. Nemo dat quod non habet.

The fact that the sale to Juanito was not notarized does not alter anything, since the sale between

him and Garcia remains valid nonetheless. Notarization, or the requirement of a public document

under the Civil Code, is only for convenience, and not for validity or enforceability. And because

it remained valid as between Juanito and Garcia, the latter no longer had the right to sell the lot

to petitioners, for his ownership thereof had ceased.

Nor can petitioners registration of their purchase have any effect on Juanitos rights. The mere registration of a sale in ones favor does not give him any right over the land if the vendor was no longer the owner of the land, having previously sold the same to another even if the earlier

sale was unrecorded. Neither could it validate the purchase thereof by petitioners, which is null

and void. Registration does not vest title; it is merely the evidence of such title. Our land

registration laws do not give the holder any better title than what he actually has.

Under Act No. 3344, registration of instruments affecting unregistered lands is without prejudice to a third party with a better right. The aforequoted phrase has been held by the Court to mean that the mere registration of a sale in ones favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to

somebody else even if the earlier sale was unrecorded.

Petitioners defense of prescription, laches and estoppel are unavailing since their claim is based on a null and void deed of sale. The fact that the Muerteguis failed to interpose any objection to

the sale in petitioners favor does not change anything, nor could it give rise to a right in their favor; their purchase remains void and ineffective as far as the Muerteguis are concerned.

Spouses Celemencio C. Sabitsana, Jr. and Ma. Rosario M. Sabitsana v. Juanito F. Muertegui,

represented by his attorney-in-fact, Domingo A. Muertegui, Jr., G.R. No. 181359, August 5,

2013.

Sales; actual and prior knowledge of the first sale makes the subsequent buyers purchasers in bad

faith. Petitioners actual and prior knowledge of the first sale to Juanito makes them purchasers

in bad faith. It also appears that petitioner Atty. Sabitsana was remiss in his duties as counsel to

the Muertegui family. Instead of advising the Muerteguis to register their purchase as soon as

possible to forestall any legal complications that accompany unregistered sales of real property,

he did exactly the opposite: taking advantage of the situation and the information he gathered

from his inquiries and investigation, he bought the very same lot and immediately caused the

registration thereof ahead of his clients, thinking that his purchase and prior registration would

prevail. The Court cannot tolerate this mercenary attitude. Instead of protecting his clients interest, Atty. Sabitsana practically preyed on him. Spouses Celemencio C. Sabitsana, Jr. and

Ma. Rosario M. Sabitsana v. Juanito F. Muertegui, represented by his attorney-in-fact, Domingo

A. Muertegui, Jr., G.R. No. 181359, August 5, 2013.

Succession; siblings are heirs of decedent who died without issue. Since Leon died without issue,

his heirs are his siblings, Romana and Gregoria, who thus inherited the property in equal shares.

In turn, Romanas and Gregorias heirs the parties herein became entitled to the property upon the sisters passing. Under Article 777 of the Civil Code, the rights to the succession are transmitted from the moment of death. Antipolo Ining (deceased), survived by Manuel

Villanueva, Teodora Villanueva-Francisco, Camilo Francisco, Adolfo Francisco, Lucimo

Francisco, Jr., Milagros Francisco,Celedonio Francisco, Herminigildo Francisco; Ramon

Tresvalles, Roberto Tajonera, Natividad Ining-Ibea (deceased) survived by Edilberto Ibea,

Josefa Ibea, Martha Ibea, Carmen Ibea, Amparo Ibea-Fernandez, Henry Ruiz, Eugenio Ruiz and

Pastor Ruiz; Dolores Ining-Rimon (deceased) survived by Jesus Rimon, Cesaria Rimon Gonzales

and Remedios Rimon Cordero; and Pedro Ining (deceased) survived by Elisa Tan Ining (wife)

and Pedro Ining, Jr. v. Leonardo R. Vega, substituted by Lourdes Vega, Restonilo I. Vega,

Crispulo M. Vega, Milbuena Vega-Restituto and Lenard Vega, G.R. No. 174727, August 12,

2013.

Special Laws

Correction of name; adversary proceeding; impleading and notice to affected and interested

parties; when failure to implead and notify is cured by publication of notice of hearing; strict

compliance with the Rules of Court mandated when petition involves substantial and

controversial alterations. Respondents birth certificate shows that her full name is Anita Sy, that she is a Chinese citizen and a legitimate child of Sy Ton and Sotera Lugsanay. In filing the

petition, however, she seeks the correction of her first name and surname, her status from

legitimate to illegitimate and her citizenship from Chinese to Filipino. Thus, respondent should have impleaded and notified not only the Local Civil Registrar but also her parents and

siblings as the persons who have interest and are affected by the changes or corrections

respondent wanted to make.

The fact that the notice of hearing was published in a newspaper of general circulation and notice

thereof was served upon the State will not change the nature of the proceedings taken. A reading

of Sections 4 and 5, Rule 108 of the Rules of Court shows that the Rules mandate two sets of

notices to different potential oppositors: one given to the persons named in the petition and

another given to other persons who are not named in the petition but nonetheless may be

considered interested or affected parties. Summons must, therefore, be served not for the purpose

of vesting the courts with jurisdiction but to comply with the requirements of fair play and due

process to afford the person concerned the opportunity to protect his interest if he so chooses.

While there may be cases where the Court held that the failure to implead and notify the affected

or interested parties may be cured by the publication of the notice of hearing, earnest efforts were

made by petitioners in bringing to court all possible interested parties. Such failure was likewise

excused where the interested parties themselves initiated the corrections proceedings; when there

is no actual or presumptive awareness of the existence of the interested parties; or when a party

is inadvertently left out.

It is clear from the foregoing discussion that when a petition for cancellation or correction of an

entry in the civil register involves substantial and controversial alterations, including those on

citizenship, legitimacy of paternity or filiation, or legitimacy of marriage, a strict compliance

with the requirements of Rule 108 ofthe Rules of Court is mandated. If the entries in the civil

register could be corrected or changed through mere summary proceedings and not through

appropriate action wherein all parties who may be affected by the entries are notified or

represented, the door to fraud or other mischief would be set open, the consequence of which

might be detrimental and far reaching. Republic of the Philppines v. Dr. Norma S. Lugsanay Uy,

G.R. No. 198010, August 12, 2013.

Correction of name; Appropriate adversary proceeding; definition. What is meant by

appropriate adversary proceeding? Blacks Law Dictionary defines adversary proceeding as follows:

One having opposing parties; contested, as distinguished from an ex parte application, one of

which the party seeking relief has given legal warning to the other party, and afforded the latter

an opportunity to contest it. Excludes an adoption proceeding. Republic of the Philppines v. Dr.

Norma S. Lugsanay Uy, G.R. No. 198010, August 12, 2013.

Correction of name; errors in a civil registry and facts established in an appropriate adversary

proceeding. It has been settled in a number of cases starting with Republic v. Valencia that even

substantial errors in a civil registry may be corrected and the true facts established provided the

parties aggrieved by the error avail themselves of the appropriate adversary proceeding. The

pronouncement of the Court in that case is illuminating:

It is undoubtedly true that if the subject matter of a petition is not for the correction of clerical errors of a harmless and innocuous nature, but one involving nationality or citizenship, which is

indisputably substantial as well as controverted, affirmative relief cannot be granted in a

proceeding summary in nature. However, it is also true that a right in law may be enforced and a

wrong may be remedied as long as the appropriate remedy is used. This Court adheres to the

principle that even substantial errors in a civil registry may be corrected and the true facts

established provided the parties aggrieved by the error avail themselves of the appropriate

adversary proceeding. Republic of the Philppines v. Dr. Norma S. Lugsanay Uy, G.R. No. 198010, August 12, 2013.

Family Relations; Conjugal property; presumption that all property of the marriage is presumed

to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the

husband or to the wife; for presumption to apply, party invoking the same must preliminarily

prove that the property was indeed acquired during the marriage; presumption cannot apply

where there is no showing as to when the property alleged to be conjugal was acquired. Pertinent

to the resolution of this second issue is Article 160 of the Civil Code which states that [a]ll property of the marriage is presumed to belong to the conjugal partnership, unless it be proved

that it pertains exclusively to the husband or to the wife. For this presumption to apply, the party invoking the same must, however, preliminarily prove that the property was indeed

acquired during the marriage. As held in Go v. Yamane:

x x As a condition sine qua non for the operation of [Article 160] in favor of the conjugal

partnership, the party who invokes the presumption must first prove that the property was

acquired during the marriage.

In other words, the presumption in favor of conjugality does not operate if there is no showing of

when the property alleged to be conjugal was acquired. Moreover, the presumption may be

rebutted only with strong, clear, categorical and convincing evidence. There must be strict proof

of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party

asserting it.

In this case, there is no evidence to indicate when the property was acquired by petitioner

Josefina. Thus, we agree with petitioner Josefinas declaration in the deed of absolute sale she executed in favor of the respondent that she was the absolute and sole owner of the property.

Bobby Tan v. Grace Andrade, et al./Grace Andrade, et al. v. Bobby Tan, G.R. Nos. 171904 &

172017, August 7, 2013.

Family relations. Under the Family Code, family relations, which is the primary basis for

succession, exclude relations by affinity. Antipolo Ining (deceased), survived by Manuel

Villanueva, Teodora Villanueva-Francisco, Camilo Francisco, Adolfo Francisco, Lucimo

Francisco, Jr., Milagros Francisco,Celedonio Francisco, Herminigildo Francisco; Ramon

Tresvalles, Roberto Tajonera, Natividad Ining-Ibea (deceased) survived by Edilberto Ibea,

Josefa Ibea, Martha Ibea, Carmen Ibea, Amparo Ibea-Fernandez, Henry Ruiz, Eugenio Ruiz and

Pastor Ruiz; Dolores Ining-Rimon (deceased) survived by Jesus Rimon, Cesaria Rimon Gonzales

and Remedios Rimon Cordero; and Pedro Ining (deceased) survived by Elisa Tan Ining (wife)

and Pedro Ining, Jr. v. Leonardo R. Vega, substituted by Lourdes Vega, Restonilo I. Vega,

Crispulo M. Vega, Milbuena Vega-Restituto and Lenard Vega, G.R. No. 174727, August 12,

2013.

Land titles; indefeasibility of certificate of title to public land issued pursuant to a grant or patent;

false statement exception; reversion of land. The certificate of title issued pursuant to any grant

or patent involving public lands is as conclusive and indefeasible as any other certificate of title

issued to private lands in the ordinary or cadastral registration proceedings. It is not subject to

collateral attack. However, Section 91 of Commonwealth Act No. 141 (The Public Land Act)

provides for the cancellation of the concession, title or permit granted for any false statement in

the application or omission of facts in the application.

Once a patent is registered and the corresponding certificate of title is issued, the land covered by

it ceases to be part of the public domain and becomes private property, and the Torrens Title

issued pursuant to the patent becomes indefeasible upon the expiration of one year from the date

of issuance of such patent. However, as held in The Director of Lands v. De Luna, et al., even

after the lapse of one year, the State may still bring an action under Section 101 of

Commonwealth Act No. 141 for the reversion to the public domain of land which has been

fraudulently granted to private individuals. The burden of proof rests on the party who asserts the

affirmative of an issue. Republic of the Philippines v. Angeles Bellate, and Spouses Jesus

Cabanto and Marieta Juanerio, G.R. No. 175685, August 7, 2013.

Land titles; Fraud in an application for grant of title to public land or patent; definition. It was

held on Libudan v. Gil that [t]he fraud must consist in an intentional omission of facts required by law to be stated in the application or a willful statement of a claim against the truth. It must

show some specific acts intended to deceive and deprive another of his right. The fraud must be

actual and extrinsic, not merely constructive or intrinsic; the evidence thereof must be clear,

convincing and more than merely preponderant, because the proceedings which are assailed as

having been fraudulent are judicial proceedings which by law, are presumed to have been fair

and regular. Republic of the Philippines v. Angeles Bellate, and Spouses Jesus Cabanto and Marieta Juanerio, G.R. No. 175685, August 7, 2013.

Trust receipts; purpose. To emphasize, the Trust Receipts Law was created to to aid in financing importers and retail dealers who do not have sufficient funds or resources to finance

the importation or purchase of merchandise, and who may not be able to acquire credit except

through utilization, as collateral, of the merchandise imported or purchased. Hur Tin Yang v.

People of the Philippines, G.R. No. 195117, August 14, 2013.

Trust receipts; when not a trust receipts transaction. Nonetheless, when both parties enter into an

agreement knowing fully well that the return of the goods subject of the trust receipt is not

possible even without any fault on the part of the trustee, it is not a trust receipt transaction

penalized under Sec. 13 of PD 115 in relation to Art. 315, par. 1(b) of the RPC, as the only

obligation actually agreed upon by the parties would be the return of the proceeds of the sale

transaction. This transaction becomes a mere loan, where the borrower is obligated to pay the

bank the amount spent for the purchase of the goods. Hur Tin Yang v. People of the Philippines,

G.R. No. 195117, August 14, 2013.