G.R. No.
118375 October 3, 2003 To secure the loan, Queaño executed a Deed of Real Estate
CELESTINA T. NAGUIAT, petitioner, vs. COURT OF APPEALS and
AURORA QUEAÑO, respondents.
Before us is a Petition for Review on Certiorari under Rule 45,
assailing the decision of the Sixteenth Division of the respondent
Court of Appeals promulgated on 21 December 19941 , which
affirmed in toto the decision handed down by the Regional Trial
Court (RTC) of Pasay City.
The case arose when on 11 August 1981, private respondent Aurora
Queaño (Queaño) filed a complaint before the Pasay City RTC for
cancellation of a Real Estate Mortgage she had entered into with
petitioner Celestina Naguiat (Naguiat). The RTC rendered a decision,
declaring the questioned Real Estate Mortgage void, which Naguiat
appealed to the Court of Appeals. After the Court of Appeals upheld
the RTC decision, Naguiat instituted the present petition.
The operative facts follow:
Queaño applied with Naguiat for a loan in the amount of Two
Hundred Thousand Pesos (₱200,000.00), which Naguiat granted. On
11 August 1980, Naguiat indorsed to Queaño Associated Bank Check
No. 090990 (dated 11 August 1980) for the amount of Ninety Five
Thousand Pesos (₱95,000.00), which was earlier issued to Naguiat
by the Corporate Resources Financing Corporation. She also issued
her own Filmanbank Check No. 065314, to the order of Queaño,
also dated 11 August 1980 and for the amount of Ninety Five
Thousand Pesos (₱95,000.00). The proceeds of these checks were to
constitute the loan granted by Naguiat to Queaño.
Mortgage dated 11 August 1980 in favor of Naguiat, and
surrendered to the latter the owner’s duplicates of the titles
covering the mortgaged properties.4 On the same day, the
mortgage deed was notarized, and Queaño issued to Naguiat a
promissory note for the amount of TWO HUNDRED THOUSAND
PESOS (₱200,000.00), with interest at 12% per annum, payable on
11 September 1980.5 Queaño also issued a Security Bank and Trust
Company check, postdated 11 September 1980, for the amount of
TWO HUNDRED THOUSAND PESOS (₱200,000.00) and payable to
the order of Naguiat.
Upon presentment on its maturity date, the Security Bank check
was dishonored for insufficiency of funds. On the following day, 12
September 1980, Queaño requested Security Bank to stop payment
of her postdated check, but the bank rejected the request pursuant
to its policy not to honor such requests if the check is drawn against
insufficient funds.
On 16 October 1980, Queaño received a letter from Naguiat’s
lawyer, demanding settlement of the loan. Shortly thereafter,
Queaño and one Ruby Ruebenfeldt (Ruebenfeldt) met with Naguiat.
At the meeting, Queaño told Naguiat that she did not receive the
proceeds of the loan, adding that the checks were retained by
Ruebenfeldt, who purportedly was Naguiat’s agent.
Naguiat applied for the extrajudicial foreclosure of the mortgage
with the Sheriff of Rizal Province, who then scheduled the
foreclosure sale on 14 August 1981. Three days before the
scheduled sale, Queaño filed the case before the Pasay City RTC,8
seeking the annulment of the mortgage deed. The trial court
eventually stopped the auction sale.
On 8 March 1991, the RTC rendered judgment, declaring the Deed
of Real Estate Mortgage null and void, and ordering Naguiat to
return to Queaño the owner’s duplicates of her titles to the
mortgaged lots.10 Naguiat appealed the decision before the Court
of Appeals, making no less than eleven assignments of error. The
Court of Appeals promulgated the decision now assailed before us
that affirmed in toto the RTC decision. Hence, the present petition.
Naguiat questions the findings of facts made by the Court of
Appeals, especially on the issue of whether Queaño had actually
received the loan proceeds which were supposed to be covered by
the two checks Naguiat had issued or indorsed. Naguiat claims that
being a notarial instrument or public document, the mortgage deed
enjoys the presumption that the recitals therein are true. Naguiat
also questions the admissibility of various representations and
pronouncements of Ruebenfeldt, invoking the rule on the non-
binding effect of the admissions of third persons.
The resolution of the issues presented before this Court by Naguiat
involves the determination of facts, a function which this Court does
not exercise in an appeal by certiorari. Under Rule 45 which governs
appeal by certiorari, only questions of law may be raised12 as the
Supreme Court is not a trier of facts.13 The resolution of factual
issues is the function of lower courts, whose findings on these
matters are received with respect and are in fact generally binding
on the Supreme Court.14 A question of law which the Court may
pass upon must not involve an examination of the probative value
of the evidence presented by the litigants.15 There is a question of
law in a given case when the doubt or difference arises as to what
the law is on a certain state of facts; there is a question of fact when
the doubt or difference arises as to the truth or the falsehood of
alleged facts.
Surely, there are established exceptions to the rule on the
conclusiveness of the findings of facts of the lower courts.17 But
Naguiat’s case does not fall under any of the exceptions. In any
event, both the decisions of the appellate and trial courts are
supported by the evidence on record and the applicable laws.
Against the common finding of the courts below, Naguiat vigorously
insists that Queaño received the loan proceeds. Capitalizing on the
status of the mortgage deed as a public document, she cites the rule
that a public document enjoys the presumption of validity and
truthfulness of its contents. The Court of Appeals, however, is
correct in ruling that the presumption of truthfulness of the recitals
in a public document was defeated by the clear and convincing
evidence in this case that pointed to the absence of
consideration.18 This Court has held that the presumption of
truthfulness engendered by notarized documents is rebuttable,
yielding as it does to clear and convincing evidence to the contrary,
as in this case.
On the other hand, absolutely no evidence was submitted by
Naguiat that the checks she issued or endorsed were actually
encashed or deposited. The mere issuance of the checks did not
result in the perfection of the contract of loan. For the Civil Code
provides that the delivery of bills of exchange and mercantile
documents such as checks shall produce the effect of payment only
when they have been cashed.20 It is only after the checks have
produced the effect of payment that the contract of loan may be
deemed perfected. Art. 1934 of the Civil Code provides:
"An accepted promise to deliver something by way of commodatum
or simple loan is binding upon the parties, but the commodatum or
simple loan itself shall not be perfected until the delivery of the
object of the contract."
A loan contract is a real contract, not consensual, and, as such, is
perfected only upon the delivery of the object of the contract.21 In
this case, the objects of the contract are the loan proceeds which
Queaño would enjoy only upon the encashment of the checks
signed or indorsed by Naguiat. If indeed the checks were encashed
or deposited, Naguiat would have certainly presented the
corresponding documentary evidence, such as the returned checks
and the pertinent bank records. Since Naguiat presented no such
proof, it follows that the checks were not encashed or credited to
Queaño’s account.
Naguiat questions the admissibility of the various written
representations made by Ruebenfeldt on the ground that they
could not bind her following the res inter alia acta alteri nocere non
debet rule. The Court of Appeals rejected the argument, holding
that since Ruebenfeldt was an authorized representative or agent of
Naguiat the situation falls under a recognized exception to the
rule.22 Still, Naguiat insists that Ruebenfeldt was not her agent.
Suffice to say, however, the existence of an agency relationship
between Naguiat and Ruebenfeldt is supported by ample evidence.
As correctly pointed out by the Court of Appeals, Ruebenfeldt was
not a stranger or an unauthorized person. Naguiat instructed
Ruebenfeldt to withhold from Queaño the checks she issued or
indorsed to Queaño, pending delivery by the latter of additional
collateral. Ruebenfeldt served as agent of Naguiat on the loan
application of Queaño’s friend, Marilou Farralese, and it was in
connection with that transaction that Queaño came to know
Naguiat.23 It was also Ruebenfeldt who accompanied Queaño in
her meeting with Naguiat and on that occasion, on her own and
without Queaño asking for it, Reubenfeldt actually drew a check for
the sum of ₱220,000.00 payable to Naguiat, to cover for Queaño’s
alleged liability to Naguiat under the loan agreement.24
The Court of Appeals recognized the existence of an "agency by
estoppel25 citing Article 1873 of the Civil Code.26 Apparently, it
considered that at the very least, as a consequence of the
interaction between Naguiat and Ruebenfeldt, Queaño got the
impression that Ruebenfeldt was the agent of Naguiat, but Naguiat
did nothing to correct Queaño’s impression. In that situation, the
rule is clear. One who clothes another with apparent authority as
his agent, and holds him out to the public as such, cannot be
permitted to deny the authority of such person to act as his agent,
to the prejudice of innocent third parties dealing with such person
in good faith, and in the honest belief that he is what he appears to
be.27 The Court of Appeals is correct in invoking the said rule on
agency by estoppel.
More fundamentally, whatever was the true relationship between
Naguiat and Ruebenfeldt is irrelevant in the face of the fact that the
checks issued or indorsed to Queaño were never encashed or
deposited to her account of Naguiat.
All told, we find no compelling reason to disturb the finding of the
courts a quo that the lender did not remit and the borrower did not
receive the proceeds of the loan. That being the case, it follows that
the mortgage which is supposed to secure the loan is null and void.
The consideration of the mortgage contract is the same as that of
the principal contract from which it receives life, and without which
it cannot exist as an independent contract.28 A mortgage contract
being a mere accessory contract, its validity would depend on the
validity of the loan secured by it.
WHEREFORE, the petition is denied and the assailed decision is
affirmed. Costs against petitioner.
SO ORDERED.
G.R. No. 154878 March 16, 2007
CAROLYN M. GARCIA, Petitioner, vs. RICA MARIE S. THIO,
Respondent.
Assailed in this petition for review on certiorari1 are the June 19,
2002 decision2 and August 20, 2002 resolution3 of the Court of
Appeals (CA) in CA-G.R. CV No. 56577 which set aside the February
28, 1997 decision of the Regional Trial Court (RTC) of Makati City,
Branch 58.
Sometime in February 1995, respondent Rica Marie S. Thio received
from petitioner Carolyn M. Garcia a crossed check4 dated February
24, 1995 in the amount of US$100,000 payable to the order of a
certain Marilou Santiago.5 Thereafter, petitioner received from
respondent every month (specifically, on March 24, April 26, June
26 and July 26, all in 1995) the amount of US$3,0006 and ₱76,5007
on July 26,8 August 26, September 26 and October 26, 1995.
In June 1995, respondent received from petitioner another crossed
check9 dated June 29, 1995 in the amount of ₱500,000, also
payable to the order of Marilou Santiago.10 Consequently,
petitioner received from respondent the amount of ₱20,000 every
month on August 5, September 5, October 5 and November 5, 1995.
According to petitioner, respondent failed to pay the principal
amounts of the loans (US$100,000 and ₱500,000) when they fell
due. Thus, on February 22, 1996, petitioner filed a complaint for
sum of money and damages in the RTC of Makati City, Branch 58
against respondent, seeking to collect the sums of US$100,000, with
interest thereon at 3% a month from October 26, 1995 and
₱500,000, with interest thereon at 4% a month from November 5,
1995, plus attorney’s fees and actual damages.12
Petitioner alleged that on February 24, 1995, respondent borrowed
from her the amount of US$100,000 with interest thereon at the
rate of 3% per month, which loan would mature on October 26,
1995.13 The amount of this loan was covered by the first check. On
June 29, 1995, respondent again borrowed the amount of ₱500,000
at an agreed monthly interest of 4%, the maturity date of which was
on November 5, 1995.14 The amount of this loan was covered by
the second check. For both loans, no promissory note was executed
since petitioner and respondent were close friends at the time.15
Respondent paid the stipulated monthly interest for both loans but
on their maturity dates, she failed to pay the principal amounts
despite repeated demands.
Respondent denied that she contracted the two loans with
petitioner and countered that it was Marilou Santiago to whom
petitioner lent the money. She claimed she was merely asked by
petitioner to give the crossed checks to Santiago.17 She issued the
checks for ₱76,000 and ₱20,000 not as payment of interest but to
accommodate petitioner’s request that respondent use her own
checks instead of Santiago’s.
In a decision dated February 28, 1997, the RTC ruled in favor of
petitioner.19 It found that respondent borrowed from petitioner
the amounts of US$100,000 with monthly interest of 3% and
₱500,000 at a monthly interest of 4%:
WHEREFORE, finding preponderance of evidence to sustain the
instant complaint, judgment is hereby rendered in favor of
[petitioner], sentencing [respondent] to pay the former the amount
of:
1. [US$100,000.00] or its peso equivalent with interest thereon at
3% per month from October 26, 1995 until fully paid;
2. ₱500,000.00 with interest thereon at 4% per month from
November 5, 1995 until fully paid.
3. ₱100,000.00 as and for attorney’s fees; and
4. ₱50,000.00 as and for actual damages.
For lack of merit, [respondent’s] counterclaim is perforce dismissed.
With costs against [respondent].
IT IS SO ORDERED.
On appeal, the CA reversed the decision of the RTC and ruled that
there was no contract of loan between the parties:
A perusal of the record of the case shows that [petitioner] failed to
substantiate her claim that [respondent] indeed borrowed money
from her. There is nothing in the record that shows that
[respondent] received money from [petitioner]. What is evident is
the fact that [respondent] received a MetroBank [crossed] check
dated February 24, 1995 in the sum of US$100,000.00, payable to
the order of Marilou Santiago and a CityTrust [crossed] check dated
June 29, 1995 in the amount of ₱500,000.00, again payable to the
order of Marilou Santiago, both of which were issued by
[petitioner]. The checks received by [respondent], being crossed,
may not be encashed but only deposited in the bank by the payee
thereof, that is, by Marilou Santiago herself.
It must be noted that crossing a check has the following effects: (a)
the check may not be encashed but only deposited in the bank; (b)
the check may be negotiated only once—to one who has an account
with the bank; (c) and the act of crossing the check serves as
warning to the holder that the check has been issued for a definite
purpose so that he must inquire if he has received the check
pursuant to that purpose, otherwise, he is not a holder in due
course.
Consequently, the receipt of the [crossed] check by [respondent] is
not the issuance and delivery to the payee in contemplation of law
since the latter is not the person who could take the checks as a
holder, i.e., as a payee or indorsee thereof, with intent to transfer
title thereto. Neither could she be deemed as an agent of Marilou
Santiago with respect to the checks because she was merely
facilitating the transactions between the former and [petitioner].
With the foregoing circumstances, it may be fairly inferred that
there were really no contracts of loan that existed between the
parties. x x x (emphasis supplied)22
Hence this petition.
As a rule, only questions of law may be raised in a petition for
review on certiorari under Rule 45 of the Rules of Court. However,
this case falls under one of the exceptions, i.e., when the factual
findings of the CA (which held that there were no contracts of loan
between petitioner and respondent) and the RTC (which held that
there were contracts of loan) are contradictory.
The petition is impressed with merit.
A loan is a real contract, not consensual, and as such is perfected
only upon the delivery of the object of the contract.25 This is
evident in Art. 1934 of the Civil Code which provides:
An accepted promise to deliver something by way of commodatum
or simple loan is binding upon the parties, but the commodatum or
simple loan itself shall not be perfected until the delivery of the
object of the contract. (Emphasis supplied)
Upon delivery of the object of the contract of loan (in this case the
money received by the debtor when the checks were encashed) the
debtor acquires ownership of such money or loan proceeds and is
bound to pay the creditor an equal amount.
It is undisputed that the checks were delivered to respondent.
However, these checks were crossed and payable not to the order
of respondent but to the order of a certain Marilou Santiago. Thus
the main question to be answered is: who borrowed money from
petitioner — respondent or Santiago?
Petitioner insists that it was upon respondent’s instruction that
both checks were made payable to Santiago.27 She maintains that it
was also upon respondent’s instruction that both checks were
delivered to her (respondent) so that she could, in turn, deliver the
same to Santiago.28 Furthermore, she argues that once respondent
received the checks, the latter had possession and control of them
such that she had the choice to either forward them to Santiago
(who was already her debtor), to retain them or to return them to
petitioner.
We agree with petitioner. Delivery is the act by which the res or
substance thereof is placed within the actual or constructive
possession or control of another.30 Although respondent did not
physically receive the proceeds of the checks, these instruments
were placed in her control and possession under an arrangement
whereby she actually re-lent the amounts to Santiago.
Several factors support this conclusion.
First, respondent admitted that petitioner did not personally know
Santiago. It was highly improbable that petitioner would grant two
loans to a complete stranger without requiring as much as
promissory notes or any written acknowledgment of the debt
considering that the amounts involved were quite big. Respondent,
on the other hand, already had transactions with Santiago at that
time.
Second, Leticia Ruiz, a friend of both petitioner and respondent (and
whose name appeared in both parties’ list of witnesses) testified
that respondent’s plan was for petitioner to lend her money at a
monthly interest rate of 3%, after which respondent would lend the
same amount to Santiago at a higher rate of 5% and realize a profit
of 2%.33 This explained why respondent instructed petitioner to
make the checks payable to Santiago. Respondent has not shown
any reason why Ruiz’ testimony should not be believed.
Third, for the US$100,000 loan, respondent admitted issuing her
own checks in the amount of ₱76,000 each (peso equivalent of
US$3,000) for eight months to cover the monthly interest. For the
₱500,000 loan, she also issued her own checks in the amount of
₱20,000 each for four months.34 According to respondent, she
merely accommodated petitioner’s request for her to issue her own
checks to cover the interest payments since petitioner was not
personally acquainted with Santiago.35 She claimed, however, that
Santiago would replace the checks with cash.36 Her explanation is
simply incredible. It is difficult to believe that respondent would put
herself in a position where she would be compelled to pay interest,
from her own funds, for loans she allegedly did not contract. We
declared in one case that:
In the assessment of the testimonies of witnesses, this Court is
guided by the rule that for evidence to be believed, it must not only
proceed from the mouth of a credible witness, but must be credible
in itself such as the common experience of mankind can approve as
probable under the circumstances. We have no test of the truth of
human testimony except its conformity to our knowledge,
observation, and experience. Whatever is repugnant to these
belongs to the miraculous, and is outside of juridical cognizance.
Fourth, in the petition for insolvency sworn to and filed by Santiago,
it was respondent, not petitioner, who was listed as one of her
(Santiago’s) ceditors.
Last, respondent inexplicably never presented Santiago as a witness
to corroborate her story.39 The presumption is that "evidence
willfully suppressed would be adverse if produced."40 Respondent
was not able to overturn this presumption.
We hold that the CA committed reversible error when it ruled that
respondent did not borrow the amounts of US$100,000 and
₱500,000 from petitioner. We instead agree with the ruling of the
RTC making respondent liable for the principal amounts of the
loans.
We do not, however, agree that respondent is liable for the 3% and
4% monthly interest for the US$100,000 and ₱500,000 loans
respectively. There was no written proof of the interest payable
except for the verbal agreement that the loans would earn 3% and
4% interest per month. Article 1956 of the Civil Code provides that
"[n]o interest shall be due unless it has been expressly stipulated in
writing."
Be that as it may, while there can be no stipulated interest, there
can be legal interest pursuant to Article 2209 of the Civil Code. It is
well-settled that:
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 stipulation, the
rate of interest shall be 12% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject
to the provisions of Article 1169 of the Civil Code.
Hence, respondent is liable for the payment of legal interest per
annum to be computed from November 21, 1995, the date when
she received petitioner’s demand letter. From the finality of the
decision until it is fully paid, the amount due shall earn interest at
12% per annum, the interim period being deemed equivalent to a
forbearance of credit.
The award of actual damages in the amount of ₱50,000 and
₱100,000 attorney’s fees is deleted since the RTC decision did not
explain the factual bases for these damages.
WHEREFORE, the petition is hereby GRANTED and the June 19, 2002
decision and August 20, 2002 resolution of the Court of Appeals in
CA-G.R. CV No. 56577 are REVERSED and SET ASIDE. The February
28, 1997 decision of the Regional Trial Court in Civil Case No. 96-266
is AFFIRMED with the MODIFICATION that respondent is directed to
pay petitioner the amounts of US$100,000 and ₱500,000 at 12% per
annum interest from November 21, 1995 until the finality of the
decision. The total amount due as of the date of finality will earn
interest of 12% per annum until fully paid. The award of actual
damages and attorney’s fees is deleted.
SO ORDERED.
G.R. No. L-8321 October 14, 1913
ALEJANDRA MINA, ET AL., plaintiffs-appellants, vs. RUPERTA
PASCUAL, ET AL., defendants-appellees.
Francisco Fontanilla and Andres Fontanilla were brothers. Francisco
Fontanilla acquired during his lifetime, on March 12, 1874, a lot in
the center of the town of Laoag, the capital of the Province of Ilocos
Norte, the property having been awarded to him through its
purchase at a public auction held by the alcalde mayor of that
province. The lot has a frontage of 120 meters and a depth of 15.
Andres Fontanilla, with the consent of his brother Francisco,
erected a warehouse on a part of the said lot, embracing 14 meters
of its frontage by 11 meters of its depth.
Francisco Fontanilla, the former owner of the lot, being dead, the
herein plaintiffs, Alejandro Mina, et al., were recognized without
discussion as his heirs.
Andres Fontanilla, the former owner of the warehouse, also having
died, the children of Ruperta Pascual were recognized likes without
discussion, though it is not said how, and consequently are entitled
to the said building, or rather, as Ruperta Pascual herself stated, to
only six-sevenths of one-half of it, the other half belonging, as it
appears, to the plaintiffs themselves, and the remaining one-
seventh of the first one-half to the children of one of the plaintiffs,
Elena de Villanueva. The fact is that the plaintiffs and the
defendants are virtually, to all appearance, the owners of the
warehouse; while the plaintiffs are undoubtedly, the owners of the
part of the lot occupied by that building, as well as of the remainder
thereof.
This was the state of affairs, when, on May 6, 1909, Ruperta
Pascual, as the guardian of her minor children, the herein
defendants, petitioned the Curt of First Instance of Ilocos Norte for
authorization to sell "the six-sevenths of the one-half of the
warehouse, of 14 by 11 meters, together with its lot." The plaintiffs
— that is Alejandra Mina, et al. — opposed the petition of Ruperta
Pascual for the reason that the latter had included therein the lot
occupied by the warehouse, which they claimed was their exclusive
property. All this action was taken in a special proceeding in re
guardianship.
The plaintiffs did more than oppose Pascual's petition; they
requested the court, through motion, to decide the question of the
ownership of the lot before it pass upon the petition for the sale of
the warehouse. But the court before determining the matter of the
ownership of the lot occupied by the warehouse, ordered the sale
of this building, saying:
While the trial continues with respect to the ownership of the lot,
the court orders the sale at public auction of the said warehouse
and of the lot on which it is built, with the present boundaries of the
land and condition of the building, at a price of not less than P2,890
Philippine currency . . . .
So, the warehouse, together with the lot on which it stands, was
sold to Cu Joco, the other defendant in this case, for the price
mentioned.
The plaintiffs insisted upon a decision of the question of the
ownership of the lot, and the court decided it by holding that this
land belonged to the owner of the warehouse which had been built
thereon thirty years before.
The plaintiffs appealed and this court reversed the judgment of the
lower court and held that the appellants were the owners of the lot
in question.
When the judgment became final and executory, a writ of execution
issued and the plaintiffs were given possession of the lot; but soon
thereafter the trial court annulled this possession for the reason
that it affected Cu Joco, who had not been a party to the suit in
which that writ was served.
It was then that the plaintiffs commenced the present action for the
purpose of having the sale of the said lot declared null and void and
of no force and effect.
An agreement was had ad to the facts, the ninth paragraph of which
is as follows:
9. That the herein plaintiffs excepted to the judgment and
appealed therefrom to the Supreme Court which found for them by
holding that they are the owners of the lot in question, although
there existed and still exists a commodatum by virtue of which the
guardianship (meaning the defendants) had and has the use, and
the plaintiffs the ownership, of the property, with no finding
concerning the decree of the lower court that ordered the sale.
The obvious purport of the cause "although there existed and still
exists a commodatum," etc., appears to be that it is a part of the
decision of the Supreme Court and that, while finding the plaintiffs
to be the owners of the lot, we recognized in principle the existence
of a commodatum under which the defendants held the lot.
Nothing could be more inexact. Possibly, also, the meaning of that
clause is that, notwithstanding the finding made by the Supreme
Court that the plaintiffs were the owners, these former and the
defendants agree that there existed, and still exists, a
commodatum, etc. But such an agreement would not affect the
truth of the contents of the decision of this court, and the opinions
held by the litigants in regard to this point could have no bearing
whatever on the present decision.
Nor did the decree of the lower court that ordered the sale have the
least influence in our previous decision to require our making any
finding in regard thereto, for, with or without that decree, the
Supreme Court had to decide the ownership of the lot consistently
with its titles and not in accordance with the judicial acts or
proceedings had prior to the setting up of the issue in respect to the
ownership of the property that was the subject of the judicial
decree.
What is essentially pertinent to the case is the fact that the
defendant agree that the plaintiffs have the ownership, and they
themselves only the use, of the said lot.
On this premise, the nullity of the sale of the lot is in all respects
quite evident, whatsoever be the manner in which the sale was
effected, whether judicially or extrajudicially.
He who has only the use of a thing cannot validly sell the thing itself.
The effect of the sale being a transfer of the ownership of the thing,
it is evident that he who has only the mere use of the thing cannot
transfer its ownership. The sale of a thing effected by one who is
not its owner is null and void. The defendants never were the
owners of the lot sold. The sale of it by them is necessarily null and
void. On cannot convey to another what he has never had himself.
The returns of the auction contain the following statements:
I, Ruperta Pascual, the guardian of the minors, etc., by virtue of the
authorization conferred upon me on the 31st of July, 1909, by the
Court of First Instance of Ilocos Norte, proceeded with the sale at
public auction of the six-sevenths part of the one-half of the
warehouse constructed of rubble stone, etc.
Whereas I, Ruperta Pascual, the guardian of the minors, etc., sold at
public auction all the land and all the rights title, interest, and
ownership in the said property to Cu Joco, who was the highest
bidder, etc.
Therefore, . . . I cede and deliver forever to the said purchaser, Cu
Joco, his heirs and assigns, all the interest, ownership and
inheritance rights and others that, as the guardian of the said
minors, I have and may have in the said property, etc.
The purchaser could not acquire anything more than the interest
that might be held by a person to whom realty in possession of the
vendor might be sold, for at a judicial auction nothing else is
disposed of. What the minor children of Ruperta Pascual had in
their possession was the ownership of the six-sevenths part of one-
half of the warehouse and the use of the lot occupied by his
building. This, and nothing more, could the Chinaman Cu Joco
acquire at that sale: not the ownership of the lot; neither the other
half, nor the remaining one-seventh of the said first half, of the
warehouse. Consequently, the sale made to him of this one-seventh
of one-half and the entire other half of the building was null and
void, and likewise with still more reason the sale of the lot the
building occupies.
The purchaser could and should have known what it was that was
offered for sale and what it was that he purchased. There is nothing
that can justify the acquisition by the purchaser of the warehouse of
the ownership of the lot that this building occupies, since the
minors represented by Ruperta Pascual never were the owners of
the said lot, nor were they ever considered to be such.
The trial court, in the judgment rendered, held that there were no
grounds for the requested annulment of the sale, and that the
plaintiffs were entitled to the P600 deposited with the clerk of the
court as the value of the lot in question. The defendants, Ruperta
Pascual and the Chinaman Cu Joco, were absolved from the
complaint, without express finding as to costs.
The plaintiffs cannot be obliged to acquiesce in or allow the sale
made and be compelled to accept the price set on the lot by expert
appraisers, not even though the plaintiffs be considered as coowner
of the warehouse. It would be much indeed that, on the ground of
coownership, they should have to abide by and tolerate the sale of
the said building, which point this court does not decide as it is not a
question submitted to us for decision, but, as regards the sale of the
lot, it is in all respects impossible to hold that the plaintiffs must
abide by it and tolerate, it, and this conclusion is based on the fact
that they did not give their consent (art. 1261, Civil Code), and only
the contracting parties who have given it are obliged to comply (art.
1091, idem).
The sole purpose of the action in the beginning was to obtain an
annulment of the sale of the lot; but subsequently the plaintiffs,
through motion, asked for an amendment by their complaint in the
sense that the action should be deemed to be one for the recovery
of possession of a lot and for the annulment of its sale. The
plaintiff's petition was opposed by the defendant's attorney, but
was allowed by the court; therefore the complaint seeks, after the
judicial annulment of the sale of the lot, to have the defendants
sentenced immediately to deliver the same to the plaintiffs.
Such a finding appears to be in harmony with the decision rendered
by the Supreme Court in previous suit, wherein it was held that the
ownership of the lot lay in the plaintiffs, and for this reason steps
were taken to give possession thereof to the defendants; but, as the
purchaser Cu Joco was not a party to that suit, the present action is
strictly one for recover against Cu Joco to compel him, once the sale
has been annulled, to deliver the lot to its lawful owners, the
plaintiffs.
As respects this action for recovery, this Supreme Court finds:
1. That it is a fact admitted by the litigating parties, both in this and
in the previous suit, that Andres Fontanilla, the defendants'
predecessor in interest, erected the warehouse on the lot, some
thirty years ago, with the explicit consent of his brother Francisco
Fontanilla, the plaintiff's predecessor in interest.
2. That it also appears to be an admitted fact that the plaintiffs and
the defendants are the coowners of the warehouse.
3. That it is a fact explicitly admitted in the agreement, that neither
Andres Fontanilla nor his successors paid any consideration or price
whatever for the use of the lot occupied by the said building;
whence it is, perhaps, that both parties have denominated that use
a commodatum.
Upon the premise of these facts, or even merely upon that of the
first of them, the sentencing of the defendants to deliver the lot to
the plaintiffs does not follow as a necessary corollary of the judicial
declaration of ownership made in the previous suit, nor of that of
the nullity of the sale of the lot, made in the present case.
The defendants do not hold lawful possession of the lot in question.
But, although both litigating parties may have agreed in their idea of
the commodatum, on account of its not being, as indeed it is not, a
question of fact but of law, yet that denomination given by them to
the use of the lot granted by Francisco Fontanilla to his brother,
Andres Fontanilla, is not acceptable. Contracts are not to be
interpreted in conformity with the name that the parties thereto
agree to give them, but must be construed, duly considering their
constitutive elements, as they are defined and denominated by law.
By the contract of loan, one of the parties delivers to the other,
either anything not perishable, in order that the latter may use it
during the certain period and return it to the former, in which case
it is called commodatum . . . (art. 1740, Civil Code).
It is, therefore, an essential feature of the commodatum that the
use of the thing belonging to another shall for a certain period.
Francisco Fontanilla did not fix any definite period or time during
which Andres Fontanilla could have the use of the lot whereon the
latter was to erect a stone warehouse of considerable value, and so
it is that for the past thirty years of the lot has been used by both
Andres and his successors in interest. The present contention of the
plaintiffs that Cu Joco, now in possession of the lot, should pay rent
for it at the rate of P5 a month, would destroy the theory of the
commodatum sustained by them, since, according to the second
paragraph of the aforecited article 1740, "commodatum is
essentially gratuitous," and, if what the plaintiffs themselves aver
on page 7 of their brief is to be believed, it never entered
Francisco's mind to limit the period during which his brother Andres
was to have the use of the lot, because he expected that the
warehouse would eventually fall into the hands of his son,
Fructuoso Fontanilla, called the adopted son of Andres, which did
not come to pass for the reason that Fructuoso died before his
uncle Andres. With that expectation in view, it appears more likely
that Francisco intended to allow his brother Andres a surface right;
but this right supposes the payment of an annual rent, and Andres
had the gratuitous use of the lot.
Hence, as the facts aforestated only show that a building was
erected on another's ground, the question should be decided in
accordance with the statutes that, thirty years ago, governed
accessions to real estate, and which were Laws 41 and 42, title 28,
of the third Partida, nearly identical with the provisions of articles
361 and 362 of the Civil Code. So, then, pursuant to article 361, the
owner of the land on which a building is erected in good faith has a
right to appropriate such edifice to himself, after payment of the
indemnity prescribed in articles 453 and 454, or to oblige the
builder to pay him the value of the land. Such, and no other, is the
right to which the plaintiff are entitled.
For the foregoing reasons, it is only necessary to annul the sale of
the said lot which was made by Ruperta Pascual, in representation
of her minor children, to Cu Joco, and to maintain the latter in the
use of the lot until the plaintiffs shall choose one or the other of the
two rights granted them by article 361 of the Civil Code.1awphil.net
The judgment appealed from is reversed and the sale of the lot in
question is held to be null and void and of no force or effect. No
special finding is made as to the costs of both instances.
SO ORDERED.
G.R. No. L-46240 November 3, 1939
MARGARITA QUINTOS and ANGEL A. ANSALDO, plaintiffs-
appellants, vs. BECK, defendant-appellee.
The plaintiff brought this action to compel the defendant to return
her certain furniture which she lent him for his use. She appealed
from the judgment of the Court of First Instance of Manila which
ordered that the defendant return to her the three has heaters and
the four electric lamps found in the possession of the Sheriff of said
city, that she call for the other furniture from the said sheriff of
Manila at her own expense, and that the fees which the Sheriff may
charge for the deposit of the furniture be paid pro rata by both
parties, without pronouncement as to the costs.
The defendant was a tenant of the plaintiff and as such occupied
the latter's house on M. H. del Pilar street, No. 1175. On January 14,
1936, upon the novation of the contract of lease between the
plaintiff and the defendant, the former gratuitously granted to the
latter the use of the furniture described in the third paragraph of
the stipulation of facts, subject to the condition that the defendant
would return them to the plaintiff upon the latter's demand. The
plaintiff sold the property to Maria Lopez and Rosario Lopez and on
September 14, 1936, these three notified the defendant of the
conveyance, giving him sixty days to vacate the premises under one
of the clauses of the contract of lease. There after the plaintiff
required the defendant to return all the furniture transferred to him
for them in the house where they were found. On November
5, 1936, the defendant, through another person, wrote to the
plaintiff reiterating that she may call for the furniture in the ground
floor of the house. On the 7th of the same month, the defendant
wrote another letter to the plaintiff informing her that he could not
give up the three gas heaters and the four electric lamps because he
would use them until the 15th of the same month when the lease in
due to expire. The plaintiff refused to get the furniture in view of
the fact that the defendant had declined to make delivery of all of
them. On November 15th, before vacating the house, the
defendant deposited with the Sheriff all the furniture belonging to
the plaintiff and they are now on deposit in the warehouse situated
at No. 1521, Rizal Avenue, in the custody of the said sheriff.
In their seven assigned errors the plaintiffs contend that the trial
court incorrectly applied the law: in holding that they violated the
contract by not calling for all the furniture on November 5, 1936,
when the defendant placed them at their disposal; in not ordering
the defendant to pay them the value of the furniture in case they
are not delivered; in holding that they should get all the furniture
from the Sheriff at their expenses; in ordering them to pay-half of
the expenses claimed by the Sheriff for the deposit of the furniture;
in ruling that both parties should pay their respective legal expenses
or the costs; and in denying pay their respective legal expenses or
the costs; and in denying the motions for reconsideration and new
trial. To dispose of the case, it is only necessary to decide whether
the defendant complied with his obligation to return the furniture
upon the plaintiff's demand; whether the latter is bound to bear the
deposit fees thereof, and whether she is entitled to the costs of
litigation.
The contract entered into between the parties is one of
commadatum, because under it the plaintiff gratuitously granted
the use of the furniture to the defendant, reserving for herself the
ownership thereof; by this contract the defendant bound himself to
return the furniture to the plaintiff, upon the latters demand (clause
7 of the contract, Exhibit A; articles 1740, paragraph 1, and 1741 of
the Civil Code). The obligation voluntarily assumed by the defendant
to return the furniture upon the plaintiff's demand, means that he
should return all of them to the plaintiff at the latter's residence or
house. The defendant did not comply with this obligation when he
merely placed them at the disposal of the plaintiff, retaining for his
benefit the three gas heaters and the four eletric lamps. The
provisions of article 1169 of the Civil Code cited by counsel for the
parties are not squarely applicable. The trial court, therefore, erred
when it came to the legal conclusion that the plaintiff failed to
comply with her obligation to get the furniture when they were
offered to her.
As the defendant had voluntarily undertaken to return all the
furniture to the plaintiff, upon the latter's demand, the Court could
not legally compel her to bear the expenses occasioned by the
deposit of the furniture at the defendant's behest. The latter, as
bailee, was not entitled to place the furniture on deposit; nor was
the plaintiff under a duty to accept the offer to return the furniture,
because the defendant wanted to retain the three gas heaters and
the four electric lamps.
As to the value of the furniture, we do not believe that the plaintiff
is entitled to the payment thereof by the defendant in case of his
inability to return some of the furniture because under paragraph 6
of the stipulation of facts, the defendant has neither agreed to nor
admitted the correctness of the said value. Should the defendant
fail to deliver some of the furniture, the value thereof should be
latter determined by the trial Court through evidence which the
parties may desire to present.
The costs in both instances should be borne by the defendant
because the plaintiff is the prevailing party (section 487 of the Code
of Civil Procedure). The defendant was the one who breached the
contract of commodatum, and without any reason he refused to
return and deliver all the furniture upon the plaintiff's demand. In
these circumstances, it is just and equitable that he pay the legal
expenses and other judicial costs which the plaintiff would not have
otherwise defrayed.
The appealed judgment is modified and the defendant is ordered to
return and deliver to the plaintiff, in the residence to return and
deliver to the plaintiff, in the residence or house of the latter, all the
furniture described in paragraph 3 of the stipulation of facts Exhibit
A. The expenses which may be occasioned by the delivery to and
deposit of the furniture with the Sheriff shall be for the account of
the defendant. the defendant shall pay the costs in both instances.
So ordered.
G.R. No. L-46145 November 26, 1986
REPUBLIC OF THE PHILIPPINES (BUREAU OF LANDS), petitioner, vs.
THE HON. COURT OF APPEALS, HEIRS OF DOMINGO P. BALOY,
represented by RICARDO BALOY, ET AL., respondents.
This case originally emanated from a decision of the then Court of
First Instance of Zambales in LRC Case No. 11-0, LRC Record No. N-
29355, denying respondents' application for registration. From said
order of denial the applicants, heirs of Domingo Baloy, represented
by Ricardo P. Baloy, (herein private respondents) interposed on
appeal to the Court of Appeals which was docketed as CA-G.R. No.
52039-R. The appellate court, thru its Fifth Division with the Hon.
Justice Magno Gatmaitan as ponente, rendered a decision dated
February 3, 1977 reversing the decision appealed from and thus
approving the application for registration. Oppositors (petitioners
herein) filed their Motion for Reconsideration alleging among other
things that applicants' possessory information title can no longer be
invoked and that they were not able to prove a registerable title
over the land. Said Motion for Reconsideration was denied, hence
this petition for review on certiorari.
Applicants' claim is anchored on their possessory information title
(Exhibit F which had been translated in Exhibit F-1) coupled with
their continuous, adverse and public possession over the land in
question. An examination of the possessory information title shows
that the description and the area of the land stated therein
substantially coincides with the land applied for and that said
possessory information title had been regularly issued having been
acquired by applicants' predecessor, Domingo Baloy, under the
provisions of the Spanish Mortgage Law. Applicants presented their
tax declaration on said lands on April 8, 1965.
The Director of Lands opposed the registration alleging that this
land had become public land thru the operation of Act 627 of the
Philippine Commission. On November 26, 1902 pursuant to the
executive order of the President of the U.S., the area was declared
within the U.S. Naval Reservation. Under Act 627 as amended by Act
1138, a period was fixed within which persons affected thereby
could file their application, (that is within 6 months from July 8,
1905) otherwise "the said lands or interest therein will be
conclusively adjudged to be public lands and all claims on the part
of private individuals for such lands or interests therein not to
presented will be forever barred." Petitioner argues that since
Domingo Baloy failed to file his claim within the prescribed period,
the land had become irrevocably public and could not be the
subject of a valid registration for private ownership.
Considering the foregoing facts respondents Court of Appeals ruled
as follows:
... perhaps, the consequence was that upon failure of Domingo
Baloy to have filed his application within that period the land had
become irrevocably public; but perhaps also, for the reason that
warning was from the Clerk of the Court of Land Registration,
named J.R. Wilson and there has not been presented a formal order
or decision of the said Court of Land Registration so declaring the
land public because of that failure, it can with plausibility be said
that after all, there was no judicial declaration to that effect, it is
true that the U.S. Navy did occupy it apparently for some time, as a
recreation area, as this Court understands from the communication
of the Department of Foreign Affairs to the U.S. Embassy exhibited
in the record, but the very tenor of the communication apparently
seeks to justify the title of herein applicants, in other words, what
this Court has taken from the occupation by the U.S. Navy is that
during the interim, the title of applicants was in a state of
suspended animation so to speak but it had not died either; and the
fact being that this land was really originally private from and after
the issuance and inscription of the possessory information Exh. F
during the Spanish times, it would be most difficult to sustain
position of Director of Lands that it was land of no private owner;
open to public disposition, and over which he has control; and since
immediately after U.S. Navy had abandoned the area, applicant
came in and asserted title once again, only to be troubled by first
Crispiniano Blanco who however in due time, quitclaimed in favor of
applicants, and then by private oppositors now, apparently
originally tenants of Blanco, but that entry of private oppositors
sought to be given color of ownership when they sought to and did
file tax declaration in 1965, should not prejudice the original rights
of applicants thru their possessory information secured regularly so
long ago, the conclusion must have to be that after all, applicants
had succeeded in bringing themselves within the provisions of Sec.
19 of Act 496, the land should be registered in their favor;
IN VIEW WHEREOF, this Court is constrained to reverse, as it now
reverses, judgment appealed from the application is approved, and
once this decision shall have become final, if ever it would be, let
decree issue in favor of applicants with the personal circumstances
outlined in the application, costs against private oppositors.
Petitioner now comes to Us with the following:
ASSIGNMENT OF ERRORS:
1. Respondent court erred in holding that to bar private
respondents from asserting any right under their possessory
information title there is need for a court order to that effect.
2. Respondent court erred in not holding that private respondents'
rights by virtue of their possessory information title was lost by
prescription.
3. Respondent court erred in concluding that applicants have
registerable title.
A cursory reading of Sec. 3, Act 627 reveals that several steps are to
be followed before any affected land can "be conclusively adjudged
to be public land." Sec. 3, Act 627 reads as follows:
SEC. 3. Immediately upon receipt of the notice from the civil
Governor in the preceeding section mentioned it shall be the duty
of the judge of the Court of Land Registration to issue a notice,
stating that the lands within the limits aforesaid have been reserved
for military purposes, and announced and declared to be military
reservations, and that claims for all private lands, buildings, and
interests therein, within the limits aforesaid, must be presented for
registration under the Land Registration Act within six calendar
months from the date of issuing the notice, and that all lands,
buildings, and interests therein within the limits aforesaid not so
presented within the time therein limited will be conclusively
adjudged to be public lands and all claims on the part of private
individuals for such lands, buildings, or an interest therein not so
presented will be forever barred. The clerk of the Court of Land
Registration shall immediately upon the issuing of such notice by
the judge cause the same to be published once a week for three
successive weeks in two newspapers, one of which newspapers
shall be in the English Language, and one in the Spanish language in
the city or province where the land lies, if there be no such Spanish
or English newspapers having a general circulation in the city or
province wherein the land lies, then it shall be a sufficient
compliance with this section if the notice be published as herein
provided, in a daily newspaper in the Spanish language and one in
the English language, in the City of Manila, having a general
circulation. The clerk shall also cause a duly attested copy of the
notice in the Spanish language to be posted in conspicuous place at
each angle formed by the lines of the limits of the land reserved.
The clerk shall also issue and cause to be personally served the
notice in the Spanish language upon every person living upon or in
visible possession of any part of the military reservation. If the
person in possession is the head of the family living upon the hand,
it shall be sufficient to serve the notice upon him, and if he is absent
it shall be sufficient to leave a copy at his usual place of residence.
The clerk shall certify the manner in which the notices have been
published, posted, and served, and his certificate shall be conclusive
proof of such publication, posting, and service, but the court shall
have the power to cause such further notice to be given as in its
opinion may be necessary.
Clearly under said provisions, private land could be deemed to have
become public land only by virtue of a judicial declaration after due
notice and hearing. It runs contrary therefore to the contention of
petitioners that failure to present claims set forth under Sec. 2 of
Act 627 made the land ipso facto public without any deed of judicial
pronouncement. Petitioner in making such declaration relied on
Sec. 4 of Act 627 alone. But in construing a statute the entire
provisions of the law must be considered in order to establish the
correct interpretation as intended by the law-making body. Act 627
by its terms is not self-executory and requires implementation by
the Court of Land Registration. Act 627, to the extent that it creates
a forfeiture, is a penal statute in derogation of private rights, so it
must be strictly construed so as to safeguard private respondents'
rights. Significantly, petitioner does not even allege the existence of
any judgment of the Land Registration court with respect to the
land in question. Without a judgment or order declaring the land to
be public, its private character and the possessory information title
over it must be respected. Since no such order has been rendered
by the Land Registration Court it necessarily follows that it never
became public land thru the operation of Act 627. To assume
otherwise is to deprive private respondents of their property
without due process of law. In fact it can be presumed that the
notice required by law to be given by publication and by personal
service did not include the name of Domingo Baloy and the subject
land, and hence he and his lane were never brought within the
operation of Act 627 as amended. The procedure laid down in Sec. 3
is a requirement of due process. "Due process requires that the
statutes which under it is attempted to deprive a citizen of private
property without or against his consent must, as in expropriation
cases, be strictly complied with, because such statutes are in
derogation of general rights." (Arriete vs. Director of Public Works,
58 Phil. 507, 508, 511).
We also find with favor private respondents' views that court
judgments are not to be presumed. It would be absurd to speak of a
judgment by presumption. If it could be contended that such a
judgment may be presumed, it could equally be contended that
applicants' predecessor Domingo Baloy presumably seasonably filed
a claim, in accordance with the legal presumption that a person
takes ordinary care of his concerns, and that a judgment in his favor
was rendered.
The finding of respondent court that during the interim of 57 years
from November 26, 1902 to December 17, 1959 (when the U.S.
Navy possessed the area) the possessory rights of Baloy or heirs
were merely suspended and not lost by prescription, is supported
by Exhibit "U," a communication or letter No. 1108-63, dated June
24, 1963, which contains an official statement of the position of the
Republic of the Philippines with regard to the status of the land in
question. Said letter recognizes the fact that Domingo Baloy and/or
his heirs have been in continuous possession of said land since 1894
as attested by an "Informacion Possessoria" Title, which was
granted by the Spanish Government. Hence, the disputed property
is private land and this possession was interrupted only by the
occupation of the land by the U.S. Navy in 1945 for recreational
purposes. The U.S. Navy eventually abandoned the premises. The
heirs of the late Domingo P. Baloy, are now in actual possession,
and this has been so since the abandonment by the U.S. Navy. A
new recreation area is now being used by the U.S. Navy personnel
and this place is remote from the land in question.
Clearly, the occupancy of the U.S. Navy was not in the concept of
owner. It partakes of the character of a commodatum. It cannot
therefore militate against the title of Domingo Baloy and his
successors-in-interest. One's ownership of a thing may be lost by
prescription by reason of another's possession if such possession be
under claim of ownership, not where the possession is only
intended to be transient, as in the case of the U.S. Navy's
occupation of the land concerned, in which case the owner is not
divested of his title, although it cannot be exercised in the
meantime.
WHEREFORE, premises considered, finding no merit in the petition
the appealed decision is hereby AFFIRMED.
SO ORDERED.
POLO S. PANTALEON, Petitioner, vs. AMERICAN EXPRESS
INTERNATIONAL, INC., Respondent.
G.R. No. 174269 August 25, 2010
FACTS:
After the Amsterdam incident that happened involving the delay of
American Express Card to approve his credit card purchases worth
US$13,826.00 at the Coster store, Pantaleon commenced a
complaint for moral and exemplary damages before the RTC against
American Express. He said that he and his family experienced
inconvenience and humiliation due to the delays in credit
authorization. RTC rendered a decision in favor of Pantaleon. CA
reversed the award of damages in favor of Pantaleon, holding that
AmEx had not breached its obligations to Pantaleon, as the
purchase at Coster deviated from Pantaleon's established charge
purchase pattern.
ISSUE:
1. Whether or not AmEx had committed a breach of its obligations
to Pantaleon.
2. Whether or not AmEx is liable for damages.
RULING:
1. Yes. The popular notion that credit card purchases are approved
“within seconds,” there really is no strict, legally determinative
point of demarcation on how long must it take for a credit card
company to approve or disapprove a customer’s purchase, much
less one specifically contracted upon by the parties. One hour
appears to be patently unreasonable length of time to approve or
disapprove a credit card purchase.
The culpable failure of AmEx herein is not the failure to timely
approve petitioner’s purchase, but the more elemental failure to
timely act on the same, whether favorably or unfavorably. Even
assuming that AmEx’s credit authorizers did not have sufficient
basis on hand to make a judgment, we see no reason why it could
not have promptly informed Pantaleon the reason for the delay,
and duly advised him that resolving the same could take some time.
2. Yes. The reason why Pantaleon is entitled to damages is not
simply because AmEx incurred delay, but because the delay, for
which culpability lies under Article 1170, led to the particular
injuries under Article 2217 of the Civil Code for which moral
damages are remunerative. The somewhat unusual attending
circumstances to the purchase at Coster – that there was a deadline
for the completion of that purchase by petitioner before any delay
would redound to the injury of his several traveling companions –
gave rise to the moral shock, mental anguish, serious anxiety,
wounded feelings and social humiliation sustained by Pantaleon, as
concluded by the RTC.
G.R. No. 115324 February 19, 2003
PRODUCERS BANK OF THE PHILIPPINES (now FIRST
INTERNATIONAL BANK), petitioner, vs. HON. COURT OF APPEALS
AND FRANKLIN VIVES, respondents.
FACTS:
Sometime in 1979, private respondent Franklin Vives was asked by
his neighbor and friend Angeles Sanchez to help her friend and
townmate, Col. Arturo Doronilla, in incorporating his business, the
Sterela Marketing and Services (“Sterela” for brevity). Specifically,
Sanchez asked private respondent to deposit in a bank a certain
amount of money in the bank account of Sterela for purposes of its
incorporation. She assured private respondent that he could
withdraw his money from said account within a month’s time. With
this, Mrs. Vivies, Sanchez and a certain Estrella Dumagpi, secretary
of Doronilla, went to the bank to open an account with Mrs. Vives
and Sanchez as signatories. A passbook was then issued to Mrs.
Vives. Subsequently, private respondent learned that part of the
money was withdrawn without presentment of the passbook as it
was his wife got hold of such. Mrs. Vives could not also withdraw
said remaining amount because it had to answer for some
postdated checks issued by Doronilla who opened a current account
for Sterela and authorized the bank to debit savings.
Private respondent referred the matter to a lawyer, who made a
written demand upon Doronilla for the return of his client’s money.
Doronilla issued another check for P212,000.00 in private
respondent’s favor but the check was again dishonored for
insufficiency of funds.
Private respondent instituted an action for recovery of sum of
money in the Regional Trial Court (RTC) in Pasig, Metro Manila
against Doronilla, Sanchez, Dumagpi and petitioner. The RTC ruled
in favor of the private respondent which was also affirmed in toto
by the CA. Hence this petition.
ISSUE: WON THE TRANSACTION BETWEEN THE DORONILLA AND
RESPONDENT VIVES WAS ONE OF SIMPLE LOAN.
HELD: NO.
A circumspect examination of the records reveals that the
transaction between them was a commodatum. Article 1933 of the
Civil Code distinguishes between the two kinds of loans in this wise:
By the contract of loan, one of the parties delivers to another, either
something not consumable so that the latter may use the same for
a certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the
condition that the same amount of the same kind and quality shall
be paid, in which case the contract is simply called a loan or
mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum, the bailor retains the ownership of the thing
loaned, while in simple loan, ownership passes to the borrower.
The foregoing provision seems to imply that if the subject of the
contract is a consumable thing, such as money, the contract would
be a mutuum. However, there are some instances where a
commodatum may have for its object a consumable thing. Article
1936 of the Civil Code provides:
Consumable goods may be the subject of commodatum if the
purpose of the contract is not the consumption of the object, as
when it is merely for exhibition.
Thus, if consumable goods are loaned only for purposes of
exhibition, or when the intention of the parties is to lend
consumable goods and to have the very same goods returned at the
end of the period agreed upon, the loan is a commodatum and not
a mutuum.
The rule is that the intention of the parties thereto shall be
accorded primordial consideration in determining the actual
character of a contract. In case of doubt, the contemporaneous and
subsequent acts of the parties shall be considered in such
determination.
[SAME CASE]
FACTS
Franklin Vives was asked by his friend Angeles Sanchez to help
Arturo Doronilla, in incorporating his business, the Sterela
Marketing and Services by depositing in producers bank of the
Philippines amount of money in the bank account of Sterela for
purposes of its incorporation. Relying on the assurances and
representations of Sanchez and Doronilla, private respondent
vivesissued a check in the amount of Two Hundred Thousand Pesos
(P200,000.00) in favor of Sterela. Private respondent instructed his
wife, Mrs. InocenciaVives, to accompany Doronilla and Sanchez in
opening a savings account in the name of Sterela in the Buendia,
Makati branch of Producers Bank of the Philippines. In opening the
account, the authorized signatories were InocenciaVives and/or
Angeles Sanchez.
Subsequently, private respondent learned that Sterela was no
longer holding office in the address previously given to him.
Alarmed, he and his wife went to the Bank to verify if their money
was still intact. The bank manager referred them to Mr. Rufo
Atienza, the assistant manager, who informed them that part of the
money in Savings Account they opened had been withdrawn by
Doronilla, and that only P90,000.00 remained therein. He likewise
told them that Mrs. Vives could not withdraw said remaining
amount because it had to answer for some postdated checks issued
by Doronilla. According to Atienza, after Mrs. Vives and Sanchez
opened Savings Account, Doronilla opened another Current Account
for Sterela and authorized the Bank to debit Savings Account for the
amounts necessary to cover overdrawings in Current Account. In
opening said current account, Sterela, through Doronilla, obtained a
loan of P175,000.00 from the Bank. Atienza, the bank manager, also
said that Doronilla could assign or withdraw the money in Savings
Account because he was the sole proprietor of Sterela.[5]
Private respondent tried to get in touch with Doronillaand
subsequently he received a letter from Doronilla, assuring him that
his money was intact and would be returned to himDoronilla issued
a postdated check for Two Hundred Twelve Thousand Pesos
(P212,000.00) in favor of private respondent. However, upon
presentment thereof by private respondent to the drawee bank, the
check was dishonored. 2 more checks/demand was made, still of no
avail.
Private respondent instituted an action for recovery of sum of
money in the Regional Trial Court (RTC) in Pasig, Metro Manila
against Doronilla, Sanchez, Dumagpi and petitioner. RTC ruled that
defendants Arturo J. Doronila, Estrella Dumagpi and Producers Bank
of the Philippines to pay plaintiff Franklin Vives jointly and severally.
Petitioner bank, Appealed before the us
ISSUE: WON the transaction between theVives and Doronilla is a
simple loan (or one of an accommodation) as to dismiss the case
against Producer Bank being not a privy thereto.
SC RULED: It one of an accommodation.
Bank’s Defenses: The contract between them was a simple loan or
mutuum because the subject was money, there was an interest
amounting to 12,000 and I was not privy thereto!
- since all the elements of a mutuum are present: first, what
was delivered by private respondent to Doronilla was money, a
consumable thing; and second, the transaction was onerous as
Doronilla was obliged to pay interest, as evidenced by the check
issued by Doronilla in the amount of P212,000.00, or P12,000 more
than what private respondent deposited in Sterela’s bank
account.[15] Moreover, the fact that private respondent sued his
good friend Sanchez for his failure to recover his money from
Doronilla shows that the transaction was not merely gratuitous but
“had a business angle” to it. Hence, petitioner argues that it cannot
be held liable for the return of private respondent’s P200,000.00
because it is not privy to the transaction between the latter and
Doronilla.
As regards the “subject”
- 1933 may seem to imply that if subject of contract is a
consumable thing, e.g. money, the contract would be a mutuum.
However, there are exceptions to this rule where the loan is
commodatum and not mutuum.
- if consumable goods are loaned only for purposes of
exhibition OR
- when the intention of parties is to lend consumable goods
and to have the very same goods returned at the end of the period
agreed upon
- Intention of parties shall be accorded primordial
consideration in determining the actual character of a contract. In
case of doubt, the contemporaneous and subsequent acts of the
parties shall be considered.
No error was committed by the Court of Appeals when it ruled that
the transaction between private respondent and Doronilla was a
commodatum and not a mutuum. A circumspect examination of
the records reveals that the transaction between them was a
commodatum. Article 1933 of the Civil Code distinguishes between
the two kinds of loans in this wise:
By the contract of loan, one of the parties delivers to another, either
something not consumable so that the latter may use the same for
a certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the
condition that the same amount of the same kind and quality shall
be paid, in which case the contract is simply called a loan or
mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum, the bailor retains the ownership of the thing
loaned, while in simple loan, ownership passes to the borrower.
The foregoing provision seems to imply that if the subject of the
contract is a consumable thing, such as money, the contract would
be a mutuum. However, there are some instances where a
commodatum may have for its object a consumable thing. Article
1936 of the Civil Code provides:
Consumable goods may be the subject of commodatum if the
purpose of the contract is not the consumption of the object, as
when it is merely for exhibition.
Thus, if consumable goods are loaned only for purposes of
exhibition, or when the intention of the parties is to lend
consumable goods and to have the very same goods returned at the
end of the period agreed upon, the loan is a commodatum and not
a mutuum.
The rule is that the intention of the parties thereto shall be
accorded primordial consideration in determining the actual
character of a contract.[27] In case of doubt, the contemporaneous
and subsequent acts of the parties shall be considered in such
determination.[28]
As correctly pointed out by both the Court of Appeals and the trial
court, the evidence shows that private respondent agreed to
deposit his money in the savings account of Sterela specifically for
the purpose of making it appear “that said firm had sufficient
capitalization for incorporation, with the promise that the amount
shall be returned within thirty (30) days.”[29] Private respondent
merely “accommodated” Doronilla by lending his money without
consideration, as a favor to his good friend Sanchez. It was however
clear to the parties to the transaction that the money would not be
removed from Sterela’s savings account and would be returned to
private respondent after thirty (30) days.
Doronilla’s attempts to return to private respondent the amount of
P200,000.00 which the latter deposited in Sterela’s account
together with an additional P12,000.00, allegedly representing
interest on the mutuum, did not convert the transaction from a
commodatum into a mutuum because such was not the intent of
the parties and because the additionalP12,000.00 corresponds to
the fruits of the lending of the P200,000.00. Article 1935 of the Civil
Code expressly states that “[t]he bailee in commodatum acquires
the use of the thing loaned but not its fruits.” Hence, it was only
proper for Doronilla to remit to private respondent the interest
accruing to the latter’s money deposited with petitioner.
Neither does the Court agree with petitioner’s contention that it is
not solidarily liable for the return of private respondent’s money
because it was not privy to the transaction between Doronilla and
private respondent. The nature of said transaction, that is, whether
it is a mutuum or a commodatum, has no bearing on the question of
petitioner’s liability for the return of private respondent’s money
because the factual circumstances of the case clearly show that
petitioner, through its employee Mr. Atienza, was partly responsible
for the loss of private respondent’s money and is liable for its
restitution.
Petitioner’s rules for savings deposits written on the passbook it
issued Mrs. Vives on behalf of Sterela for Savings Account No. 10-
1567 expressly states that—
“2. Deposits and withdrawals must be made by the depositor
personally or upon his written authority duly authenticated, and
neither a deposit nor a withdrawal will be permitted except upon
the production of the depositor savings bank book in which will be
entered by the Bank the amount deposited or withdrawn.”[30]
Said rule notwithstanding, Doronilla was permitted by petitioner,
through Atienza, the Assistant Branch Manager for the Buendia
Branch of petitioner, to withdraw therefrom even without
presenting the passbook (which Atienza very well knew was in the
possession of Mrs. Vives), not just once, but several times. Both the
Court of Appeals and the trial court found that Atienza allowed said
withdrawals because he was party to Doronilla’s “scheme” of
defrauding private respondent.
As regards the “interest”
- Attempt to return P200,000 with additional P12,000 does not
convert the transaction from commodatum to muttum absent any
showing of such intention.
- In fact, the 12k corresponds to the fruits of the thing.
- 1935: bailee acquires only the USE but NOT the FRUITS.
- It was only proper for Doronilla to remit to Vives the interest
accruing to the money deposited in the bank.
As regards the “privity”
- Whether the transaction was mutuum or commodatum has no
bearing on your liability. Your liability is founded upon your
employee’s fault under 2180 (vicarious).
- Atienza was in conspiracy with Doronilla’s scheme. The passbook
in custody of Vives says that one cannot withdraw without that
passbook. How come Doronilla was able to get the money?
- Atienza also knew very well that Vives was the owner of the
money as he was expressly told by the wife.
G.R. No. L-4150 February 10, 1910
FELIX DE LOS SANTOS, plaintiff-appelle, vs. AGUSTINA JARRA,
administratrix of the estate of Magdaleno Jimenea, deceased,
defendant-appellant.
On the 1st of September, 1906, Felix de los Santos brought suit
against Agustina Jarra, the administratrix of the estate of
Magdaleno Jimenea, alleging that in the latter part of 1901 Jimenea
borrowed and obtained from the plaintiff ten first-class carabaos, to
be used at the animal-power mill of his hacienda during the season
of 1901-2, without recompense or remuneration whatever for the
use thereof, under the sole condition that they should be returned
to the owner as soon as the work at the mill was terminated; that
Magdaleno Jimenea, however, did not return the carabaos,
notwithstanding the fact that the plaintiff claimed their return after
the work at the mill was finished; that Magdaleno Jimenea died on
the 28th of October, 1904, and the defendant herein was appointed
by the Court of First Instance of Occidental Negros administratrix of
his estate and she took over the administration of the same and is
still performing her duties as such administratrix; that the plaintiff
presented his claim to the commissioners of the estate of Jimenea,
within the legal term, for the return of the said ten carabaos, but
the said commissioners rejected his claim as appears in their report;
therefore, the plaintiff prayed that judgment be entered against the
defendant as administratrix of the estate of the deceased, ordering
her to return the ten first-class carabaos loaned to the late Jimenea,
or their present value, and to pay the costs.
The defendant was duly summoned, and on the 25th of September,
1906, she demurred in writing to the complaint on the ground that
it was vague; but on the 2d of October of the same year, in answer
to the complaint, she said that it was true that the late Magdaleno
Jimenea asked the plaintiff to loan him ten carabaos, but that he
only obtained three second-class animals, which were afterwards
transferred by sale by the plaintiff to the said Jimenea; that she
denied the allegations contained in paragraph 3 of the complaint;
for all of which she asked the court to absolve her of the complaint
with the cost against the plaintiff.
By a writing dated the 11th of December, 1906, Attorney Jose Felix
Martinez notified the defendant and her counsel, Matias Hilado,
that he had made an agreement with the plaintiff to the effect that
the latter would not compromise the controversy without his
consent, and that as fees for his professional services he was to
receive one half of the amount allowed in the judgment if the same
were entered in favor of the plaintiff.
The case came up for trial, evidence was adduced by both parties,
and either exhibits were made of record. On the 10th of January,
1907, the court below entered judgment sentencing Agustina Jarra,
as administratrix of the estate of Magdaleno Jimenea, to return to
the plaintiff, Felix de los Santos, the remaining six second and third
class carabaos, or the value thereof at the rate of P120 each, or a
total of P720 with the costs.
Counsel for the defendant excepted to the foregoing judgment,
and, by a writing dated January 19, moved for anew trial on the
ground that the findings of fact were openly and manifestly
contrary to the weight of the evidence. The motion was overruled,
the defendant duly excepted, and in due course submitted the
corresponding bill of exceptions, which was approved and
submitted to this court.
The defendant has admitted that Magdaleno Jimenea asked the
plaintiff for the loan of ten carabaos which are now claimed by the
latter, as shown by two letters addressed by the said Jimenea to
Felix de los Santos; but in her answer the said defendant alleged
that the late Jimenea only obtained three second-class carabaos,
which were subsequently sold to him by the owner, Santos;
therefore, in order to decide this litigation it is indispensable that
proof be forthcoming that Jimenea only received three carabaos
from his son-in-law Santos, and that they were sold by the latter to
him.
The record discloses that it has been fully proven from the
testimony of a sufficient number of witnesses that the plaintiff,
Santos, sent in charge of various persons the ten carabaos
requested by his father-in-law, Magdaleno Jimenea, in the two
letters produced at the trial by the plaintiff, and that Jimenea
received them in the presence of some of said persons, one being a
brother of said Jimenea, who saw the animals arrive at the hacienda
where it was proposed to employ them. Four died of rinderpest,
and it is for this reason that the judgment appealed from only deals
with six surviving carabaos.
The alleged purchase of three carabaos by Jimenea from his son-in-
law Santos is not evidenced by any trustworthy documents such as
those of transfer, nor were the declarations of the witnesses
presented by the defendant affirming it satisfactory; for said reason
it can not be considered that Jimenea only received three carabaos
on loan from his son-in-law, and that he afterwards kept them
definitely by virtue of the purchase.
By the laws in force the transfer of large cattle was and is still made
by means of official documents issued by the local authorities; these
documents constitute the title of ownership of the carabao or horse
so acquired. Furthermore, not only should the purchaser be
provided with a new certificate or credential, a document which has
not been produced in evidence by the defendant, nor has the loss of
the same been shown in the case, but the old documents ought to
be on file in the municipality, or they should have been delivered to
the new purchaser, and in the case at bar neither did the defendant
present the old credential on which should be stated the name of
the previous owner of each of the three carabaos said to have been
sold by the plaintiff.
From the foregoing it may be logically inferred that the carabaos
loaned or given on commodatum to the now deceased Magdaleno
Jimenea were ten in number; that they, or at any rate the six
surviving ones, have not been returned to the owner thereof, Felix
de los Santos, and that it is not true that the latter sold to the
former three carabaos that the purchaser was already using;
therefore, as the said six carabaos were not the property of the
deceased nor of any of his descendants, it is the duty of the
administratrix of the estate to return them or indemnify the owner
for their value.
The Civil Code, in dealing with loans in general, from which generic
denomination the specific one of commodatum is derived,
establishes prescriptions in relation to the last-mentioned contract
by the following articles:
ART. 1740. By the contract of loan, one of the parties delivers to the
other, either anything not perishable, in order that the latter may
use it during a certain period and return it to the former, in which
case it is called commodatum, or money or any other perishable
thing, under the condition to return an equal amount of the same
kind and quality, in which case it is merely called a loan.
Commodatum is essentially gratuitous.
A simple loan may be gratuitous, or made under a stipulation to pay
interest.
ART. 1741. The bailee acquires retains the ownership of the thing
loaned. The bailee acquires the use thereof, but not its fruits; if any
compensation is involved, to be paid by the person requiring the
use, the agreement ceases to be a commodatum.
ART. 1742. The obligations and rights which arise from the
commodatum pass to the heirs of both contracting parties, unless
the loan has been in consideration for the person of the bailee, in
which case his heirs shall not have the right to continue using the
thing loaned.
The carabaos delivered to be used not being returned by the
defendant upon demand, there is no doubt that she is under
obligation to indemnify the owner thereof by paying him their
value.
Article 1101 of said code reads:
Those who in fulfilling their obligations are guilty of fraud,
negligence, or delay, and those who in any manner whatsoever act
in contravention of the stipulations of the same, shall be subjected
to indemnify for the losses and damages caused thereby.
The obligation of the bailee or of his successors to return either the
thing loaned or its value, is sustained by the supreme tribunal of
Sapin. In its decision of March 21, 1895, it sets out with precision
the legal doctrine touching commodatum as follows:
Although it is true that in a contract of commodatum the bailor
retains the ownership of the thing loaned, and at the expiration of
the period, or after the use for which it was loaned has been
accomplished, it is the imperative duty of the bailee to return the
thing itself to its owner, or to pay him damages if through the fault
of the bailee the thing should have been lost or injured, it is clear
that where public securities are involved, the trial court, in deferring
to the claim of the bailor that the amount loaned be returned him
by the bailee in bonds of the same class as those which constituted
the contract, thereby properly applies law 9 of title 11 of partida 5.
With regard to the third assignment of error, based on the fact that
the plaintiff Santos had not appealed from the decision of the
commissioners rejecting his claim for the recovery of his carabaos, it
is sufficient to estate that we are not dealing with a claim for the
payment of a certain sum, the collection of a debt from the estate,
or payment for losses and damages (sec. 119, Code of Civil
Procedure), but with the exclusion from the inventory of the
property of the late Jimenea, or from his capital, of six carabaos
which did not belong to him, and which formed no part of the
inheritance.
The demand for the exclusion of the said carabaos belonging to a
third party and which did not form part of the property of the
deceased, must be the subject of a direct decision of the court in an
ordinary action, wherein the right of the third party to the property
which he seeks to have excluded from the inheritance and the right
of the deceased has been discussed, and rendered in view of the
result of the evidence adduced by the administrator of the estate
and of the claimant, since it is so provided by the second part of
section 699 and by section 703 of the Code of Civil Procedure; the
refusal of the commissioners before whom the plaintiff
unnecessarily appeared can not affect nor reduce the
unquestionable right of ownership of the latter, inasmuch as there
is no law nor principle of justice authorizing the successors of the
late Jimenea to enrich themselves at the cost and to the prejudice
of Felix de los Santos.
For the reasons above set forth, by which the errors assigned to the
judgment appealed from have been refuted, and considering that
the same is in accordance with the law and the merits of the case, it
is our opinion that it should be affirmed and we do hereby affirm it
with the costs against the appellant. So ordered.
G.R. No. 80294-95 September 21, 1988
CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN PROVINCE,
petitioner, vs. COURT OF APPEALS, HEIRS OF EGMIDIO
OCTAVIANO AND JUAN VALDEZ, respondents.
The principal issue in this case is whether or not a decision of the
Court of Appeals promulgated a long time ago can properly be
considered res judicata by respondent Court of Appeals in the
present two cases between petitioner and two private respondents.
Petitioner questions as allegedly erroneous the Decision dated
August 31, 1987 of the Ninth Division of Respondent Court of
Appeals 1 in CA-G.R. No. 05148 [Civil Case No. 3607 (419)] and CA-
G.R. No. 05149 [Civil Case No. 3655 (429)], both for Recovery of
Possession, which affirmed the Decision of the Honorable Nicodemo
T. Ferrer, Judge of the Regional Trial Court of Baguio and Benguet in
Civil Case No. 3607 (419) and Civil Case No. 3655 (429), with the
dispositive portion as follows:
WHEREFORE, Judgment is hereby rendered ordering the defendant,
Catholic Vicar Apostolic of the Mountain Province to return and
surrender Lot 2 of Plan Psu-194357 to the plaintiffs. Heirs of Juan
Valdez, and Lot 3 of the same Plan to the other set of plaintiffs, the
Heirs of Egmidio Octaviano (Leonardo Valdez, et al.). For lack or
insufficiency of evidence, the plaintiffs' claim or damages is hereby
denied. Said defendant is ordered to pay costs. (p. 36, Rollo)
Respondent Court of Appeals, in affirming the trial court's decision,
sustained the trial court's conclusions that the Decision of the Court
of Appeals, dated May 4,1977 in CA-G.R. No. 38830-R, in the two
cases affirmed by the Supreme Court, touched on the ownership of
lots 2 and 3 in question; that the two lots were possessed by the
predecessors-in-interest of private respondents under claim of
ownership in good faith from 1906 to 1951; that petitioner had
been in possession of the same lots as bailee in commodatum up to
1951, when petitioner repudiated the trust and when it applied for
registration in 1962; that petitioner had just been in possession as
owner for eleven years, hence there is no possibility of acquisitive
prescription which requires 10 years possession with just title and
30 years of possession without; that the principle of res judicata on
these findings by the Court of Appeals will bar a reopening of these
questions of facts; and that those facts may no longer be altered.
Petitioner's motion for reconsideation of the respondent appellate
court's Decision in the two aforementioned cases (CA G.R. No. CV-
05418 and 05419) was denied.
The facts and background of these cases as narrated by the trail
court are as follows —
... The documents and records presented reveal that the whole
controversy started when the defendant Catholic Vicar Apostolic of
the Mountain Province (VICAR for brevity) filed with the Court of
First Instance of Baguio Benguet on September 5, 1962 an
application for registration of title over Lots 1, 2, 3, and 4 in Psu-
194357, situated at Poblacion Central, La Trinidad, Benguet,
docketed as LRC N-91, said Lots being the sites of the Catholic
Church building, convents, high school building, school gymnasium,
school dormitories, social hall, stonewalls, etc. On March 22, 1963
the Heirs of Juan Valdez and the Heirs of Egmidio Octaviano filed
their Answer/Opposition on Lots Nos. 2 and 3, respectively,
asserting ownership and title thereto. After trial on the merits, the
land registration court promulgated its Decision, dated November
17, 1965, confirming the registrable title of VICAR to Lots 1, 2, 3,
and 4.
The Heirs of Juan Valdez (plaintiffs in the herein Civil Case No. 3655)
and the Heirs of Egmidio Octaviano (plaintiffs in the herein Civil
Case No. 3607) appealed the decision of the land registration court
to the then Court of Appeals, docketed as CA-G.R. No. 38830-R. The
Court of Appeals rendered its decision, dated May 9, 1977,
reversing the decision of the land registration court and dismissing
the VICAR's application as to Lots 2 and 3, the lots claimed by the
two sets of oppositors in the land registration case (and two sets of
plaintiffs in the two cases now at bar), the first lot being presently
occupied by the convent and the second by the women's dormitory
and the sister's convent.
On May 9, 1977, the Heirs of Octaviano filed a motion for
reconsideration praying the Court of Appeals to order the
registration of Lot 3 in the names of the Heirs of Egmidio Octaviano,
and on May 17, 1977, the Heirs of Juan Valdez and Pacita Valdez
filed their motion for reconsideration praying that both Lots 2 and 3
be ordered registered in the names of the Heirs of Juan Valdez and
Pacita Valdez. On August 12,1977, the Court of Appeals denied the
motion for reconsideration filed by the Heirs of Juan Valdez on the
ground that there was "no sufficient merit to justify reconsideration
one way or the other ...," and likewise denied that of the Heirs of
Egmidio Octaviano.
Thereupon, the VICAR filed with the Supreme Court a petition for
review on certiorari of the decision of the Court of Appeals
dismissing his (its) application for registration of Lots 2 and 3,
docketed as G.R. No. L-46832, entitled 'Catholic Vicar Apostolic of
the Mountain Province vs. Court of Appeals and Heirs of Egmidio
Octaviano.'
From the denial by the Court of Appeals of their motion for
reconsideration the Heirs of Juan Valdez and Pacita Valdez, on
September 8, 1977, filed with the Supreme Court a petition for
review, docketed as G.R. No. L-46872, entitled, Heirs of Juan Valdez
and Pacita Valdez vs. Court of Appeals, Vicar, Heirs of Egmidio
Octaviano and Annable O. Valdez.
On January 13, 1978, the Supreme Court denied in a minute
resolution both petitions (of VICAR on the one hand and the Heirs of
Juan Valdez and Pacita Valdez on the other) for lack of merit. Upon
the finality of both Supreme Court resolutions in G.R. No. L-46832
and G.R. No. L- 46872, the Heirs of Octaviano filed with the then
Court of First Instance of Baguio, Branch II, a Motion For Execution
of Judgment praying that the Heirs of Octaviano be placed in
possession of Lot 3. The Court, presided over by Hon. Salvador J.
Valdez, on December 7, 1978, denied the motion on the ground
that the Court of Appeals decision in CA-G.R. No. 38870 did not
grant the Heirs of Octaviano any affirmative relief.
On February 7, 1979, the Heirs of Octaviano filed with the Court of
Appeals a petitioner for certiorari and mandamus, docketed as CA-
G.R. No. 08890-R, entitled Heirs of Egmidio Octaviano vs. Hon.
Salvador J. Valdez, Jr. and Vicar. In its decision dated May 16, 1979,
the Court of Appeals dismissed the petition.
It was at that stage that the instant cases were filed. The Heirs of
Egmidio Octaviano filed Civil Case No. 3607 (419) on July 24, 1979,
for recovery of possession of Lot 3; and the Heirs of Juan Valdez
filed Civil Case No. 3655 (429) on September 24, 1979, likewise for
recovery of possession of Lot 2 (Decision, pp. 199-201, Orig. Rec.).
In Civil Case No. 3607 (419) trial was held. The plaintiffs Heirs of
Egmidio Octaviano presented one (1) witness, Fructuoso Valdez,
who testified on the alleged ownership of the land in question (Lot
3) by their predecessor-in-interest, Egmidio Octaviano (Exh. C ); his
written demand (Exh. B—B-4 ) to defendant Vicar for the return of
the land to them; and the reasonable rentals for the use of the land
at P10,000.00 per month. On the other hand, defendant Vicar
presented the Register of Deeds for the Province of Benguet, Atty.
Nicanor Sison, who testified that the land in question is not covered
by any title in the name of Egmidio Octaviano or any of the plaintiffs
(Exh. 8). The defendant dispensed with the testimony of
Mons.William Brasseur when the plaintiffs admitted that the
witness if called to the witness stand, would testify that defendant
Vicar has been in possession of Lot 3, for seventy-five (75) years
continuously and peacefully and has constructed permanent
structures thereon.
In Civil Case No. 3655, the parties admitting that the material facts
are not in dispute, submitted the case on the sole issue of whether
or not the decisions of the Court of Appeals and the Supreme Court
touching on the ownership of Lot 2, which in effect declared the
plaintiffs the owners of the land constitute res judicata.
In these two cases , the plaintiffs arque that the defendant Vicar is
barred from setting up the defense of ownership and/or long and
continuous possession of the two lots in question since this is
barred by prior judgment of the Court of Appeals in CA-G.R. No.
038830-R under the principle of res judicata. Plaintiffs contend that
the question of possession and ownership have already been
determined by the Court of Appeals (Exh. C, Decision, CA-G.R. No.
038830-R) and affirmed by the Supreme Court (Exh. 1, Minute
Resolution of the Supreme Court). On his part, defendant Vicar
maintains that the principle of res judicata would not prevent them
from litigating the issues of long possession and ownership because
the dispositive portion of the prior judgment in CA-G.R. No. 038830-
R merely dismissed their application for registration and titling of
lots 2 and 3. Defendant Vicar contends that only the dispositive
portion of the decision, and not its body, is the controlling
pronouncement of the Court of Appeals. 2
The alleged errors committed by respondent Court of Appeals
according to petitioner are as follows:
1. ERROR IN APPLYING LAW OF THE CASE AND RES JUDICATA;
2. ERROR IN FINDING THAT THE TRIAL COURT RULED THAT
LOTS 2 AND 3 WERE ACQUIRED BY PURCHASE BUT WITHOUT
DOCUMENTARY EVIDENCE PRESENTED;
3. ERROR IN FINDING THAT PETITIONERS' CLAIM IT
PURCHASED LOTS 2 AND 3 FROM VALDEZ AND OCTAVIANO WAS AN
IMPLIED ADMISSION THAT THE FORMER OWNERS WERE VALDEZ
AND OCTAVIANO;
4. ERROR IN FINDING THAT IT WAS PREDECESSORS OF
PRIVATE RESPONDENTS WHO WERE IN POSSESSION OF LOTS 2 AND
3 AT LEAST FROM 1906, AND NOT PETITIONER;
5. ERROR IN FINDING THAT VALDEZ AND OCTAVIANO HAD
FREE PATENT APPLICATIONS AND THE PREDECESSORS OF PRIVATE
RESPONDENTS ALREADY HAD FREE PATENT APPLICATIONS SINCE
1906;
6. ERROR IN FINDING THAT PETITIONER DECLARED LOTS 2
AND 3 ONLY IN 1951 AND JUST TITLE IS A PRIME NECESSITY UNDER
ARTICLE 1134 IN RELATION TO ART. 1129 OF THE CIVIL CODE FOR
ORDINARY ACQUISITIVE PRESCRIPTION OF 10 YEARS;
7. ERROR IN FINDING THAT THE DECISION OF THE COURT OF
APPEALS IN CA G.R. NO. 038830 WAS AFFIRMED BY THE SUPREME
COURT;
8. ERROR IN FINDING THAT THE DECISION IN CA G.R. NO.
038830 TOUCHED ON OWNERSHIP OF LOTS 2 AND 3 AND THAT
PRIVATE RESPONDENTS AND THEIR PREDECESSORS WERE IN
POSSESSION OF LOTS 2 AND 3 UNDER A CLAIM OF OWNERSHIP IN
GOOD FAITH FROM 1906 TO 1951;
9. ERROR IN FINDING THAT PETITIONER HAD BEEN IN
POSSESSION OF LOTS 2 AND 3 MERELY AS BAILEE BOR ROWER) IN
COMMODATUM, A GRATUITOUS LOAN FOR USE;
10. ERROR IN FINDING THAT PETITIONER IS A POSSESSOR AND
BUILDER IN GOOD FAITH WITHOUT RIGHTS OF RETENTION AND
REIMBURSEMENT AND IS BARRED BY THE FINALITY AND
CONCLUSIVENESS OF THE DECISION IN CA G.R. NO. 038830. 3
The petition is bereft of merit.
Petitioner questions the ruling of respondent Court of Appeals in
CA-G.R. Nos. 05148 and 05149, when it clearly held that it was in
agreement with the findings of the trial court that the Decision of
the Court of Appeals dated May 4,1977 in CA-G.R. No. 38830-R, on
the question of ownership of Lots 2 and 3, declared that the said
Court of Appeals Decision CA-G.R. No. 38830-R) did not positively
declare private respondents as owners of the land, neither was it
declared that they were not owners of the land, but it held that the
predecessors of private respondents were possessors of Lots 2 and
3, with claim of ownership in good faith from 1906 to 1951.
Petitioner was in possession as borrower in commodatum up to
1951, when it repudiated the trust by declaring the properties in its
name for taxation purposes. When petitioner applied for
registration of Lots 2 and 3 in 1962, it had been in possession in
concept of owner only for eleven years. Ordinary acquisitive
prescription requires possession for ten years, but always with just
title. Extraordinary acquisitive prescription requires 30 years. 4
On the above findings of facts supported by evidence and evaluated
by the Court of Appeals in CA-G.R. No. 38830-R, affirmed by this
Court, We see no error in respondent appellate court's ruling that
said findings are res judicata between the parties. They can no
longer be altered by presentation of evidence because those issues
were resolved with finality a long time ago. To ignore the principle
of res judicata would be to open the door to endless litigations by
continuous determination of issues without end.
An examination of the Court of Appeals Decision dated May 4, 1977,
First Division 5 in CA-G.R. No. 38830-R, shows that it reversed the
trial court's Decision 6 finding petitioner to be entitled to register
the lands in question under its ownership, on its evaluation of
evidence and conclusion of facts.
The Court of Appeals found that petitioner did not meet the
requirement of 30 years possession for acquisitive prescription over
Lots 2 and 3. Neither did it satisfy the requirement of 10 years
possession for ordinary acquisitive prescription because of the
absence of just title. The appellate court did not believe the findings
of the trial court that Lot 2 was acquired from Juan Valdez by
purchase and Lot 3 was acquired also by purchase from Egmidio
Octaviano by petitioner Vicar because there was absolutely no
documentary evidence to support the same and the alleged
purchases were never mentioned in the application for registration.
By the very admission of petitioner Vicar, Lots 2 and 3 were owned
by Valdez and Octaviano. Both Valdez and Octaviano had Free
Patent Application for those lots since 1906. The predecessors of
private respondents, not petitioner Vicar, were in possession of the
questioned lots since 1906.
There is evidence that petitioner Vicar occupied Lots 1 and 4, which
are not in question, but not Lots 2 and 3, because the buildings
standing thereon were only constructed after liberation in 1945.
Petitioner Vicar only declared Lots 2 and 3 for taxation purposes in
1951. The improvements oil Lots 1, 2, 3, 4 were paid for by the
Bishop but said Bishop was appointed only in 1947, the church was
constructed only in 1951 and the new convent only 2 years before
the trial in 1963.
When petitioner Vicar was notified of the oppositor's claims, the
parish priest offered to buy the lot from Fructuoso Valdez. Lots 2
and 3 were surveyed by request of petitioner Vicar only in 1962.
Private respondents were able to prove that their predecessors'
house was borrowed by petitioner Vicar after the church and the
convent were destroyed. They never asked for the return of the
house, but when they allowed its free use, they became bailors in
commodatum and the petitioner the bailee. The bailees' failure to
return the subject matter of commodatum to the bailor did not
mean adverse possession on the part of the borrower. The bailee
held in trust the property subject matter of commodatum. The
adverse claim of petitioner came only in 1951 when it declared the
lots for taxation purposes. The action of petitioner Vicar by such
adverse claim could not ripen into title by way of ordinary
acquisitive prescription because of the absence of just title.
The Court of Appeals found that the predecessors-in-interest and
private respondents were possessors under claim of ownership in
good faith from 1906; that petitioner Vicar was only a bailee in
commodatum; and that the adverse claim and repudiation of trust
came only in 1951.
We find no reason to disregard or reverse the ruling of the Court of
Appeals in CA-G.R. No. 38830-R. Its findings of fact have become
incontestible. This Court declined to review said decision, thereby in
effect, affirming it. It has become final and executory a long time
ago.
Respondent appellate court did not commit any reversible error,
much less grave abuse of discretion, when it held that the Decision
of the Court of Appeals in CA-G.R. No. 38830-R is governing, under
the principle of res judicata, hence the rule, in the present cases CA-
G.R. No. 05148 and CA-G.R. No. 05149. The facts as supported by
evidence established in that decision may no longer be altered.
WHEREFORE AND BY REASON OF THE FOREGOING, this petition is
DENIED for lack of merit, the Decision dated Aug. 31, 1987 in CA-
G.R. Nos. 05148 and 05149, by respondent Court of Appeals is
AFFIRMED, with costs against petitioner.
SO ORDERED.
G.R. No. 146364 June 3, 2004
COLITO T. PAJUYO, petitioner, vs. COURT OF APPEALS and EDDIE
GUEVARRA, respondents.
FACTS:
Petitioner Pajuyo paid P400 to a certain Pedro Perez for the rights
over a lot, where Pajuyo subsequently built a house. In 1985, Pajuyo
and private respondent Guevarra executed a Kasunduan wherein
Pajuyo allowed Guevarra to live in the house for free, on the
condition that Guevarra would maintain the cleanliness and
orderliness of the house. Guevarra promised that he would vacate
the premises upon Pajuyo’s demand.
In 1994, Pajuyo informed Guevarra of his need of the house and
demanded that the latter vacate the house. Guevarra refused.
Pajuyo filed an ejectment case against Guevarra before the MTC.
Guevarra claimed that Pajuyo had no valid title over the lot since it
is within the area set aside for socialized housing. MTC rendered its
decision in favor of Pajuyo, which was affirmed by RTC. (MTC and
RTC basically ruled that the Kasunduan created a legal tie akin to
that of a landlord and tenant relationship). CA reversed the RTC
decision, stating that the ejectment case is without legal basis since
both Pajuyo and Guevarra illegally occupied the said lot. CA further
stated that both parties are in pari delicto; thus, the court will leave
them where they are. CA ruled that the Kasunduan is not a lease
contract, but a commodatum because the agreement is not for a
price certain.
ISSUE: W/N the contractual relationship between Pajuyo and
Guevarra was that of a commodatum
HELD: NO.
In a contract of commodatum, one of the parties delivers to another
something not consumable so that the latter may use the same for
a certain time and return it. An essential feature of commodatum is
that it is gratuitous.
Another feature of commodatum is that the use of the thing
belonging to another is for a certain period. Thus, the bailor cannot
demand the return of the thing loaned until after expiration of the
period stipulated, or after accomplishment of the use for which the
commodatum is constituted. If the bailor should have urgent need
of the thing, he may demand its return for temporary use. If the use
of the thing is merely tolerated by the bailor, he can demand the
return of the thing at will, in which case the contractual relation is
called a precarium. Under the Civil Code, precarium is a kind of
commodatum. The Kasunduan reveals that the accommodation
accorded by Pajuyo to Guevarra was not essentially gratuitous.
While the Kasunduan did not require Guevarra to pay rent, it
obligated him to maintain the property in good condition. The
imposition of this obligation makes the Kasunduan a contract
different from a commodatum. The effects of the Kasunduan are
also different from that of a commodatum. Case law on ejectment
has treated relationship based on tolerance as one that is akin to a
landlord-tenant relationship where the withdrawal of permission
would result in the termination of the lease. The tenant’s
withholding of the property would then be unlawful. Even assuming
that the relationship between Pajuyo and Guevarra is one of
commodatum, Guevarra as bailee would still have the duty to turn
over possession of the property to Pajuyo, the bailor. The obligation
to deliver or to return the thing received attaches to contracts for
safekeeping, or contracts of commission, administration and
commodatum.70 These contracts certainly involve the obligation to
deliver or return the thing received. Guevarra turned his back on
the Kasunduan on the sole ground that like him, Pajuyo is also a
squatter. Guevarra should know that there must be honor even
between squatters. Guevarra freely entered into the Kasunduan.
Guevarra cannot now impugn the Kasunduan after he had benefited
from it. The Kasunduan binds Guevarra. The Kasunduan is not void
for purposes of determining who between Pajuyo and Guevarra has
a right to physical possession of the contested property. The
Kasunduan is the undeniable evidence of Guevarra’s recognition of
Pajuyo’s better right of physical possession. Guevarra is clearly a
possessor in bad faith. The absence of a contract would not yield a
different result, as there would still be an implied promise to vacate.
G.R. No. L-17474 October 25, 1962
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee, vs. JOSE V.
BAGTAS, defendant,
FELICIDAD M. BAGTAS, Administratrix of the Intestate Estate left
by the late Jose V. Bagtas, petitioner-appellant.
PADILLA, J.:
The Court of Appeals certified this case to this Court because only
questions of law are raised.
On 8 May 1948 Jose V. Bagtas borrowed from the Republic of the
Philippines through the Bureau of Animal Industry three bulls: a Red
Sindhi with a book value of P1,176.46, a Bhagnari, of P1,320.56 and
a Sahiniwal, of P744.46, for a period of one year from 8 May 1948 to
7 May 1949 for breeding purposes subject to a government charge
of breeding fee of 10% of the book value of the bulls. Upon the
expiration on 7 May 1949 of the contract, the borrower asked for a
renewal for another period of one year. However, the Secretary of
Agriculture and Natural Resources approved a renewal thereof of
only one bull for another year from 8 May 1949 to 7 May 1950 and
requested the return of the other two. On 25 March 1950 Jose V.
Bagtas wrote to the Director of Animal Industry that he would pay
the value of the three bulls. On 17 October 1950 he reiterated his
desire to buy them at a value with a deduction of yearly
depreciation to be approved by the Auditor General. On 19 October
1950 the Director of Animal Industry advised him that the book
value of the three bulls could not be reduced and that they either
be returned or their book value paid not later than 31 October
1950. Jose V. Bagtas failed to pay the book value of the three bulls
or to return them. So, on 20 December 1950 in the Court of First
Instance of Manila the Republic of the Philippines commenced an
action against him praying that he be ordered to return the three
bulls loaned to him or to pay their book value in the total sum of
P3,241.45 and the unpaid breeding fee in the sum of P199.62, both
with interests, and costs; and that other just and equitable relief be
granted in (civil No. 12818).
On 5 July 1951 Jose V. Bagtas, through counsel Navarro, Rosete and
Manalo, answered that because of the bad peace and order
situation in Cagayan Valley, particularly in the barrio of Baggao, and
of the pending appeal he had taken to the Secretary of Agriculture
and Natural Resources and the President of the Philippines from the
refusal by the Director of Animal Industry to deduct from the book
value of the bulls corresponding yearly depreciation of 8% from the
date of acquisition, to which depreciation the Auditor General did
not object, he could not return the animals nor pay their value and
prayed for the dismissal of the complaint.
After hearing, on 30 July 1956 the trial court render judgment —
. . . sentencing the latter (defendant) to pay the sum of P3,625.09
the total value of the three bulls plus the breeding fees in the
amount of P626.17 with interest on both sums of (at) the legal rate
from the filing of this complaint and costs.
On 9 October 1958 the plaintiff moved ex parte for a writ of
execution which the court granted on 18 October and issued on 11
November 1958. On 2 December 1958 granted an ex-parte motion
filed by the plaintiff on November 1958 for the appointment of a
special sheriff to serve the writ outside Manila. Of this order
appointing a special sheriff, on 6 December 1958, Felicidad M.
Bagtas, the surviving spouse of the defendant Jose Bagtas who died
on 23 October 1951 and as administratrix of his estate, was notified.
On 7 January 1959 she file a motion alleging that on 26 June 1952
the two bull Sindhi and Bhagnari were returned to the Bureau
Animal of Industry and that sometime in November 1958 the third
bull, the Sahiniwal, died from gunshot wound inflicted during a Huk
raid on Hacienda Felicidad Intal, and praying that the writ of
execution be quashed and that a writ of preliminary injunction be
issued. On 31 January 1959 the plaintiff objected to her motion. On
6 February 1959 she filed a reply thereto. On the same day, 6
February, the Court denied her motion. Hence, this appeal certified
by the Court of Appeals to this Court as stated at the beginning of
this opinion.
It is true that on 26 June 1952 Jose M. Bagtas, Jr., son of the
appellant by the late defendant, returned the Sindhi and Bhagnari
bulls to Roman Remorin, Superintendent of the NVB Station, Bureau
of Animal Industry, Bayombong, Nueva Vizcaya, as evidenced by a
memorandum receipt signed by the latter (Exhibit 2). That is why in
its objection of 31 January 1959 to the appellant's motion to quash
the writ of execution the appellee prays "that another writ of
execution in the sum of P859.53 be issued against the estate of
defendant deceased Jose V. Bagtas." She cannot be held liable for
the two bulls which already had been returned to and received by
the appellee.
The appellant contends that the Sahiniwal bull was accidentally
killed during a raid by the Huk in November 1953 upon the
surrounding barrios of Hacienda Felicidad Intal, Baggao, Cagayan,
where the animal was kept, and that as such death was due to force
majeure she is relieved from the duty of returning the bull or paying
its value to the appellee. The contention is without merit. The loan
by the appellee to the late defendant Jose V. Bagtas of the three
bulls for breeding purposes for a period of one year from 8 May
1948 to 7 May 1949, later on renewed for another year as regards
one bull, was subject to the payment by the borrower of breeding
fee of 10% of the book value of the bulls. The appellant contends
that the contract was commodatum and that, for that reason, as the
appellee retained ownership or title to the bull it should suffer its
loss due to force majeure. A contract of commodatum is essentially
gratuitous.1 If the breeding fee be considered a compensation, then
the contract would be a lease of the bull. Under article 1671 of the
Civil Code the lessee would be subject to the responsibilities of a
possessor in bad faith, because she had continued possession of the
bull after the expiry of the contract. And even if the contract be
commodatum, still the appellant is liable, because article 1942 of
the Civil Code provides that a bailee in a contract of commodatum
—
. . . is liable for loss of the things, even if it should be through a
fortuitous event:
(2) If he keeps it longer than the period stipulated . . .
(3) If the thing loaned has been delivered with appraisal of its
value, unless there is a stipulation exempting the bailee from
responsibility in case of a fortuitous event;
The original period of the loan was from 8 May 1948 to 7 May 1949.
The loan of one bull was renewed for another period of one year to
end on 8 May 1950. But the appellant kept and used the bull until
November 1953 when during a Huk raid it was killed by stray
bullets. Furthermore, when lent and delivered to the deceased
husband of the appellant the bulls had each an appraised book
value, to with: the Sindhi, at P1,176.46, the Bhagnari at P1,320.56
and the Sahiniwal at P744.46. It was not stipulated that in case of
loss of the bull due to fortuitous event the late husband of the
appellant would be exempt from liability.
The appellant's contention that the demand or prayer by the
appellee for the return of the bull or the payment of its value being
a money claim should be presented or filed in the intestate
proceedings of the defendant who died on 23 October 1951, is not
altogether without merit. However, the claim that his civil
personality having ceased to exist the trial court lost jurisdiction
over the case against him, is untenable, because section 17 of Rule
3 of the Rules of Court provides that —
After a party dies and the claim is not thereby extinguished, the
court shall order, upon proper notice, the legal representative of
the deceased to appear and to be substituted for the deceased,
within a period of thirty (30) days, or within such time as may be
granted. . . .
and after the defendant's death on 23 October 1951 his counsel
failed to comply with section 16 of Rule 3 which provides that —
Whenever a party to a pending case dies . . . it shall be the duty of
his attorney to inform the court promptly of such death . . . and to
give the name and residence of the executory administrator,
guardian, or other legal representative of the deceased . . . .
The notice by the probate court and its publication in the Voz de
Manila that Felicidad M. Bagtas had been issue letters of
administration of the estate of the late Jose Bagtas and that "all
persons having claims for monopoly against the deceased Jose V.
Bagtas, arising from contract express or implied, whether the same
be due, not due, or contingent, for funeral expenses and expenses
of the last sickness of the said decedent, and judgment for
monopoly against him, to file said claims with the Clerk of this Court
at the City Hall Bldg., Highway 54, Quezon City, within six (6) months
from the date of the first publication of this order, serving a copy
thereof upon the aforementioned Felicidad M. Bagtas, the
appointed administratrix of the estate of the said deceased," is not
a notice to the court and the appellee who were to be notified of
the defendant's death in accordance with the above-quoted rule,
and there was no reason for such failure to notify, because the
attorney who appeared for the defendant was the same who
represented the administratrix in the special proceedings instituted
for the administration and settlement of his estate. The appellee or
its attorney or representative could not be expected to know of the
death of the defendant or of the administration proceedings of his
estate instituted in another court that if the attorney for the
deceased defendant did not notify the plaintiff or its attorney of
such death as required by the rule.
As the appellant already had returned the two bulls to the appellee,
the estate of the late defendant is only liable for the sum of
P859.63, the value of the bull which has not been returned to the
appellee, because it was killed while in the custody of the
administratrix of his estate. This is the amount prayed for by the
appellee in its objection on 31 January 1959 to the motion filed on 7
January 1959 by the appellant for the quashing of the writ of
execution.
Special proceedings for the administration and settlement of the
estate of the deceased Jose V. Bagtas having been instituted in the
Court of First Instance of Rizal (Q-200), the money judgment
rendered in favor of the appellee cannot be enforced by means of a
writ of execution but must be presented to the probate court for
payment by the appellant, the administratrix appointed by the
court.

ACCORDINGLY, the writ of execution appealed from is set aside,

without pronouncement as to costs.