Kasilag vs Rodriguez (69 Phil 217)

FACTS

PROCEDURAL FACTS: This is an appeal taken by the defendant-petitioner (Kasilag) from the decision of the Court of Appeals which modified that rendered by the court of First Instance of Bataan. The said court held: that the contract is entirely null and void and without effect; that the plaintiffs-respondents (Rodriguez, et.al.), then appellants, are the owners of the disputed land, with its improvements, in common ownership with their brother Gavino Rodriguez, hence, they are entitled to the possession thereof; that the defendant-petitioner should yield possession of the land in their favor, with all the improvements thereon and free from any lien.

SUBSTANTIVE FACTS: The parties entered into a contract of loan to which has an accompanying accessory contract of mortgage. The executed accessory contract involved the improvements on a piece land, the land having been acquired by means of homestead. Petitioner for his part accepted the contract of mortgage.

Believing that there are no violations to the prohibitions in the alienation of lands Petitioner, acting in good faith took possession of the land. To wit, the Petitioner has no knowledge that the enjoyment of the fruits of the land is an element of the credit transaction of Antichresis.

ISSUE

1.     Whether or not the principal contract entered into is null and void.

2.     Whether or not the subsequent contract is null and void.

3.     Whether or not the Kasilag is a possessor in good faith of the land.

HELD

1.     The cardinal rule in the interpretation of contracts is to the effect that the intention of the contracting parties should always prevail because their will has the force of law between them. Article 1281 (now Art. 1370) of the Civil Code consecrates this rule and provides, that if the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed; and if the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail. The contract should be interpreted in accordance with these rules. As the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses. 

The words used by the contracting parties in the contract clearly show that they intended to enter into the principal contract of loan in the amount of P1,000, with interest at 12 per cent per annum, and into the accessory contract of mortgage of the improvements on the land acquired as homestead, the parties having moreover, agreed upon the pacts and conditions stated in the deed. In other words, the parties entered into a contract of mortgage of the improvements on the land acquired as homestead, to secure the payment of the indebtedness for P1,000 and the stipulated interest thereon. 

Another fundamental rule in the interpretation of contracts, not less important than those indicated, is to the effect that the terms, clauses and conditions contrary to law, morals and public order should be separated from the valid and legal contract and when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties.

Principal contract is that of loan and the accessory that of mortgage of the improvements upon the land acquired as a homestead. There is no question that the first of these contract is valid as it is not against the law.

2.     Parties entered into another verbal contract whereby the petitioner was authorized to take possession of the land, to receive the fruits thereof and to introduce improvements thereon, provided that he would renounce the payment of stipulated interest and he would assume payment of the land tax. The possession by the petitioner and his receipt of the fruits of the land, considered as integral elements of the contract of antichresis, are illegal and void agreements because the contract of antichresis is a lien and such is expressly prohibited by section 116 of Act No. 2874.

3.     Despite the foregoing, SC found the defendant-petitioner Kasilag as a possessor of the land in good faith. Sec 433 of the Civil Code of the Philippines provides “Every person who is unaware of any flaw in his title or in the manner of its acquisition by which it is invalidated shall be deemed a possessor of good faith.” And in this case, the petitioner acted in good faith. Good faith maybe a basis of excusable ignorance of the law, the petitioner acted in good faith in his enjoyment of the fruits of the land to which was done through his apparent acquisition thereof.

Lopez vs Sarabia (439 SCRA 35)

FACTS

Margarita Sarabia owned two (2) lots with a residential house built on one of the lots in Poblacion, Kalibo, Aklan. Spouses Reynaldo and Editha Lopez were renting the second floor of the house for P300.00 per month. On the other lot was a building rented by Dr. Nilda Tambong for P600.00 a month, with two (2) boarders upstairs paying P440.00 a month. Sometime in March 1984, the Spouses Lopez approached Margarita and asked her if they could construct additional rooms for their growing children. Margarita told them that she did not have the money for such construction project. They then proposed that they could apply for a Pag-ibig Housing Loan DBP and use Margarita's property as collateral. Margarita, however, informed them that her property had already been mortgaged to the PNB in 1978 in the amount of P20,000.00, and was, in fact, in danger of being foreclosed for non-payment of amortization. Her outstanding loan balance as of March 1984 had already ballooned to about P63,000.00.

The Spouses Lopez tried to convince Margarita that it was better to transfer the mortgage to the DBP where interest rates were lower. They told Margarita that the PNB loan balance could be paid off from the proceeds of the loan from the DBP, and the excess could be used for the construction of the rooms. In order to facilitate the loan, it was, however, necessary that the property be in the name of the Spouses Lopez.

Relying on the couple's good faith and assurances that they would religiously pay the amortization, Margarita agreed to their proposition. A document was thus executed denominated as "Assumption of Mortgage with Quitclaim."  In said document, the Register of Deeds was authorized to cancel the old TCT over the two (2) parcels of land and issue new TCT's under the name of the Spouses Lopez. The Spouses Lopez then mortgaged the properties to DBP where they obtained a loan in the amount of P163,000.00. They paid the PNB, which then released the mortgage of Margarita. The Spouses Lopez ceased paying rentals to Margarita and even collected the rentals from the other lot as part of the payment of the monthly amortization.

Sometime in October 1987, Reynaldo Lopez approached Margarita and informed her that he needed P30,000.00 to update their loan payments. Margarita gave him the amount as part of the refund to the payment of the PNB loan. She expected Reynaldo to give her an official receipt from the DBP, but did not receive any. Sensing something irregular, she went to the DBP to inquire about the status of the loan. She was aghast to find out that the loan amortization had not been paid and that her property was again in danger of being foreclosed.

Margarita was constrained to file an action with the RTC against the Spouses Lopez for annulment of document, specific performance and reconveyance with damages. 

However, according to Spouses Lopez, that it was Margarita who approached them to help her redeem her property from the PNB because it was going to be foreclosed. She was aware that the couple wanted to buy a house and lot of their own, and offered her property to them instead. The Spouses Lopez told her that they did not have the money to redeem the property, but if Margarita was certain in selling her house to them, they could arrange for a loan from the DBP, the proceeds of which the PNB loan could be paid in full and would form part of the purchase price. The balance would also be taken from the proceeds of the DBP loan. Pursuant to their mutual and verbal agreement, Margarita executed a Deed of Assumption of Mortgage with Quitclaim, authorizing the couple to assume her loan with the PNB over the two lots, together with all the improvements thereon and renouncing all her rights over the property.

RTC: rendered decision in favor of Margarita. The trial court found that the true intentions of the parties were not really embodied in the documents/instruments. The documentary, as well as parol evidence, clearly showed that Margarita did not really intend to convey her property to the petitioners.  She agreed to sign the pertinent documents with the understanding that they were requirements of the bank in processing the loan applied for by the Spouses Lopez. The trial court continued to rule that the Spouses Lopez were in bad faith, so whatever improvements were made on the land were forfeited in favor of Margarita.

CA: affirmed the RTC finding that the nature of the transaction between Margarita and the Spouses Lopez was, verily, an equitable mortgage and not a sale. The CA, however, declared that the petitioners were builders in good faith. According to the CA, Margarita was aware and approved the construction/improvements undertaken by the Spouses Lopez; thus, forfeiture of the improvements in favor of Margarita was unwarranted. 

Spouces Lopez filed petition for review on certiorari to SC.

ISSUE

Whether or not the transaction between the parties is a contract of sale.

HELD:

There is no dispute that the transaction between the parties is one of equitable mortgage and not a sale. It bears stressing that the law favors the least transmission of rights and interests over a property in controversy (Art.1378). The purpose of the law is to prevent circumvention of the law on usury and the prohibition against a creditor appropriating the mortgaged property. Additionally, it is aimed to end unjust or oppressive transactions or violations in connection with the sale of the property. The wisdom of these provisions cannot be doubted, considering many cases of unlettered persons or even those with average intelligence invariably finding themselves in no position whatsoever to bargain fairly with their creditors.

Reasoning:

1. 1.     The owner, Margarita, remained in possession of the house. If she really intended to sell her house, then she would have looked for another place to live.
2. 2.     It was inconceivable that Margarita would sell her house and the two lots just to pay the PNB loan. She would have necessarily retained one parcel of land which she could have called her own.
3. 3.     The acknowledgement receipt signed by Reynaldo Lopez showing that they were paid by Margarita the sum of P30,000.00 is quite telling.
4. 4.     The Spouses Lopez never paid the monthly amortization. If they were truly the owner, then they would have protected their own property from being foreclosed.

No doubt in this case, the Spouses Lopez took advantage of Margarita's advanced age and urgent necessity for money, which explains why she agreed to sign the documents without being fully aware of their meaning and contents. "Necessitous men are not, truly speaking, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them." What was intended to be a mere loan so as to enjoin the foreclosure by the bank of her property, ended up as a transfer of property to the Spouses Lopez, which was not the real intention and agreement of the parties in the first place. This is a fact which the Spouses Lopez cannot deny. From all indications, the Spouses Lopez were quite dishonest in attempting to appropriate the property as their own when this was not their agreement with Margarita.

Castelo vs Court of Appeals (244 SCRA 180)

FACTS

On 15 October 1982, petitioners Antonio Castelo, Bernabe Banson, Lourdes Banson and Pompeyo Depante entered into a contract denominated as a "Deed of Conditional Sale" with private respondent Milagros Dela Rosa involving a parcel of land. The agreed price of the land was P269,408.00. Upon signing the contract, private respondent paid petitioners P106,000.00 leaving a balance of P163,408.00. The Deed of Conditional Sale also stipulated that:

"xxx xxx xxx

b.)The balance of P163,408.00 to be paid on or before December 31, 1982 without interest and penalty charges;

c.)Should the said balance [remain unpaid] by the VENDEE, the VENDORS hereby agree to give the VENDEE a grace period of SIX (6) months or up to June 30, 1983 to pay said balance provided that interest at the rate of 12% per annum shall be charged and 1% penalty charge a month shall be imposed on the remaining diminishing balance. 

Private respondent Dela Rosa was unable to pay the remaining balance. Petitioners filed an action for specific performance with damages. RTC rendered the decision ordering the rescission of the Deed of Conditional Sale. Petitioners went on Certiorari to CA. They claimed that rescission of the contract was only an alternative relief available under the Civil Code, while they in their complaint before the RTC, had asked for specific performance with damages.CA reversed the RTC decision. Writ of execution was issued. Private respondent Dela Rosa was required to  pay petitioners a total of P197,723.68. Petitioners filed a motion for reconsideration and a separate motion for alias writ of execution contending that the sum of P197,723.68 was erroneous. They argued that the obligation of private respondent was to pay (a) interest at the rate of twelve percent (12%) per annum plus (b) one percent (1%) penalty charge per month, from default, i.e, from 1 January 1983; that the amount to be paid by the Defendant should be P398,814.88 instead and not P197,723.68 or a difference of P201,091.20.

RTC denied the motion. Further contends that the phrase "to pay interest" found in the dispositive portion of the CA’s November 21, 1986 decision did not refer to the stipulation in the "Deed of Conditional Sale" but rather to the legal rate of interest imposed by the CA which started to run from 12 February 1987, the date of entry of judgment.

Petitioner filed on certiorari to CA. CA dismissed it. But stated that the part of the dispositive portion, ordering the "defendant . . . to pay the balance of the conditional sale in the amount of P163,408.00, to pay interest . . . ." Being a "new" judgment or decision, the computation of the "interest" on the balance of the conditional sale should commence from the date of its ENTRY on February 12, 1987, when the decision became FINAL and EXECUTORY. 

ISSUE

What is the correct interpretation of the phrase "to pay interest" set out in the dispositive portion of the CA decision?

HELD

The established doctrine is that when the dispositive portion of a judgment, which has become final and executory, contains a clerical error or an ambiguity arising from an inadvertent omission, such error or ambiguity may be clarified by reference to the body of the decision itself.

SC believe and so hold that the phrase “to pay interest,” found in the dispositive portion of the CA decision must, under applicable law, refer to the interest stipulated by the parties in the Deed of Conditional Sale which they had entered into on 15 October 1982. SC note, in the first place, that the phrase “to pay interest” comes close upon the heels of the preceding phrase "to comply with her obligation under the conditional sale to pay the balance — of P163,408.00." A strong inference thus arises that the "interest" required to be paid is the interest stipulated as part of the “obligation [of private respondent dela Rosa] under the conditional sale [agreement] to pay the balance of [the purchase price of the land.

In the computation for the amount to be paid, The question is whether, during the period of 1 January 1983 up to 30 June 1983, 12% interest per annum plus 1% penalty charge a month was payable "on the remaining diminishing balance;" or whether during the period from 1 January 1983 to 30 June 1983, only 12% per annum interest was payable while the 1% per month penalty charge would in addition begin to accrue on any balance remaining unpaid as of 1 July 1983.

SC believed the parties intended the latter view. The interpretation SC adopted is also supported by the principle that in case of ambiguity in contract language, that interpretation which establishes a less onerous transmission of rights or imposition of lesser burdens which permits greater reciprocity between the parties, is to be adopted (Art. 1378).

WHEREFORE, the writ of certiorari is hereby GRANTED.

“xxx xx xx

(2)ordering the defendant to comply with her obligation under the conditional sale to pay the balance of the conditional sale in the amount of P163,408.00, to pay interest on the amount of the balance remaining unpaid during the period from 1 January 1983 to 30 June 1983 at the rate of 12% per annum; and, from 1 July 1983 until full payment of the amount due, to pay interest at the rate of 12% per annum plus another 12% per annum (i.e., 1% penalty charge per month), or a total of 24% per annum, on the balance remaining unpaid; and

(3)in default thereof, the rescission of the "Deed of Conditional Sale" is the alternative."

Borromeo vs Court of Appeals (47 SCRA 65)

NATURE

PETITION for review by certiorari of a decision of the Court of Appeals

FACTS

Before 1933, defendant [Jose A. Villamor] was a distributor of lumber belonging to Mr. Miller who was the agent of the Insular Lumber Company in Cebu City. Defendant being a friend and former classmate of plaintiff [Canuto O. Borromeo] used to borrow from the latter certain amounts from time to time. On one occasion, defendant borrowed from plaintiff a large sum of money for which he mortgaged his land and house in Cebu City to pay some pressing obligation with Mr. Miller. Mr. Miller filed a civil action against the defendant and attached his properties including those mortgaged to plaintiff, inasmuch as the deed of mortgage in favor of plaintiff could not be registered because not properly drawn up. Plaintiff then pressed the defendant for settlement of his obligation, but defendant instead offered to execute a document promising to pay his indebtedness even after the lapse of ten years. Liquidation was made and defendant was found to be indebted to plaintiff in the sum of P7,220.00, for which defendant signed a promissory note therefor on November 29, 1933 with interest at the rate of 12% per annum, agreeing to pay as soon as I have money'. The note further stipulate that defendant 'hereby relinquish, renounce, or otherwise waive my rights to the prescriptions established by our Code of Civil Procedure for the collection or recovery of the above sum of P7,220.00. * * * at any time even after the lapse of ten years from the date of this instrument'.

After the execution of the document, plaintiff limited himself to verbally requesting defendant to settle his indebtedness from time to time. Plaintiff did not file any complaint against the defendant within ten years from the execution of the document as there was no property registered in defendant's name, who furthermore assured him that he could collect even after the lapse of ten years. After the last war, plaintiff made various oral demands, but defendants failed to settle his account. CFI: Villamor ordered to pay Borromeo (represented by his heirs) the sum of P7,220.00 within ninety days from the date of the receipt of such decision with interest at the rate of 12% per annum from the xpiration of such ninety-day period. CA: reversed CFI ruling

ISSUE

Whether or not the CA erred in reversing the ruling of the CFI in finding the lack of validity of the stipulation amounting to a waiver in line with the principle "that a person cannot renounce future prescription"

HELD

YES! Between two possible interpretations, that which saves rather than destroys is to be preferred.

It is a fundamental principle in the interpretation of contracts that while ordinarily the literal sense of the words employed is to be followed, such is not the case where they "appear to be contrary to the evident intention of the contracting parties," which “intention shall prevail” (Art. 1370). The terms, clauses and conditions contrary to law, morals and public order (in this case the contested stipulation) should be separated from the valid and legal contract when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties.

Reasoning                                  

 There is nothing implausible in the view that such language renouncing the debtor's right to the prescription established by the Code of Civil Procedure should be given the meaning, as noted in the preceding sentence of the decision of respondent Court, that the debtor could be trusted to pay even after the termination of the ten-year prescriptive period. (so CA should have interpreted the stipulation based on the context of the friendship between the two parties)-'Where an agreement founded on a legal consideration contains several promises, or a promise to do several things, and a part only of the things to be done are illegal, the promises which, can be separated, or the promise, so far as it can be separated, from the illegality, may be valid. The rule is that a lawful promise made for a lawful consideration is not invalid merely because an unlawful promise was made at the same time and for the same consideration, and this rule applies, although the invalidity is due to violation of a statutory provision, unless the statute expressly or by necessary implication declares the entire contract void. The first ten years after November 29, 1933 should not be counted in determining when the action of creditor, now represented by petitioners, could be filed. From the joint record on appeal, it is undoubted that the complaint was filed on January 7, 1953. If the first ten-year period was to be excluded, the creditor had until November 29, 1953 to start judicial proceedings. After deducting the first ten year period which expired on November 29, 1943, there was the additional period of still another ten years.29 Nor could there be any legal objection to the complaint by the creditor Borromeo of January 7, 1953 embodying not merely the fixing of the period within which the debtor Villamor was to pay but likewise the collection of the amount that until then was not paid.

Disposition

Wherefore, the decision of respondent Court of Appeals of March 7, 1964 is reversed, thus giving full force and effect to the decision of the lower court of November 15, 1956. With costs against private respondents.

A new life blossomed

It was about 6 in the evening of February 4, 2012 when I got a call from my classmate Jess. After I greeted her with a hello she hurriedly blurted out "Shie nanganak na daw si Momi Jen"! Upon hearing the news, the feelings of warmth and excitement hurdled in my system and both enclosed my entire being. It was the day that Sikma has long been waiting for -the day that a
new life blossomed. With so much enthusiasm, we immediately scheduled our visit to the cutie-little girl. However, it was only today that I was able to finally took glimpse of our first ever Sikma angel. But seeing her was not an easy undertaking. We've been into some trouble getting inside Vicente Sotto hospital since we were not aware of the hospital policies regarding visiting arrangements. Nevertheless, with some might and fight -not caring if we would look like thieves as we take into the proper timing ensuring that Manong Guard wasn't looking in our direction, we we're able to finally meet her.

I can say that Sikma was on Jenny's (Mae's mom) side all throughout her journey of carrying a new life in her womb. We are all too excited, with questions in mind like -Is it a Boy or a Girl, How does he/she looks like? Will he/she get more features from her mom or from her dad? How is he/she going to call us, will it be tito and tita, auntie and uncle, ate and kuya, sikmayow and sikmahey? Well, the first was already answered. The baby is a SHE and that's unquestionable. However, the second question is still debatable since we still ague among ourselves as to whom the baby resembles more. And as for the third query, well, we still have to settle that issue!

Nonetheless, Sikma is so happy with the new bundle of joy! Rainejane Mae

--xoxo tita/auntie/ate shie :))

Transcending (anthro blog)

Gays, bisexual and transgender people - I would usually consider them as the faces of entertainment industry; seeing them up the stage with all those colorful costumes, with all those make-up, with all those humors and happy dispositions. They would do almost everything to entertain and make us laugh our hearts out. I see them as people who always take things in life lightly. But, after hearing the stories and statements of Rica, Britney, Bemz, Humphrey, Sass, Jonas and those three other individuals, realization slapped me. Life was in fact never light and easy for people like them. When the masks are down, what I saw are people who are discriminated, abused and tormented.

They are in a battle, a bloody struggle for defending and uplifting their rights. I salute these people who stood up before the world and with dignity proclaimed what their human soul dictated them to be. Going against the societal norm and religious dictum is never simple. Nonetheless, their desire for harmonious existence served as the driving force to continue fighting.

In China, they are called Py Bianxingzhe. In Thailand, they are termed as Kateoy. In Indonesia, they are the Waria. In America, they are referred to as Transgendered. In the Philippines, their kind are often called Bakla or Trans Pinay. In a world where we categorize every individual as man and woman, where should these people lie? Do their being less of a man and more of a woman make them less human? To this question my answer is no. I believe that they too, just like any other man or woman, only want a life to live, with freedom, liberty and pursuit of happiness. These things are not ours (man and woman) to take from them (lesbian, gay, bisexual and transgender). There’s no exclusivity of prescription for these. They too are humans, only that they are unique on their own special ways. Their being unique does not give us the right to treat them with indifference and persecute them. Instead, why don’t we give them one important thing that they really want and need?-- Acceptance!

I remembered watching a documentary show about Trans Pinay (i-Witness). And as an end note, I would like to share the words of Kristine Madrigal, a Trans Pinay. We may ponder them and reach into the very essence of what she said:

"Sa panahon ngayon, hindi na ito question ng kung sino ang makasalanan, kung sino ang banal;

kung sino na lang ang marunong gumawa ng mabuti at marunong makipagkapwa-tao;

sabi nga nila mahirap magpakababae kung hindi ka tunay na babae;

mahirap ding magpakalalake kung hindi ka tunay na lalake;

pero mahirap magpakatao kung hindi nila kami ituturing bilang isang tao."

On track again

I suddenly missed writing here ;) those times when I have to meet all the set deadlines for the class blogs, whether I like it or not, i have to write something on this page. haha. jeezz! i survived, still surviving!

Well, I did not really miss this a hundred percent, only about 20. hehe...yeah because i'm currently having my class blog for my Anthro class. :)

Well, i will try to post new blog from time to time or maybe post here some of my blogs for Anthro. :):):)