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RP vs Andrea Tan (Danan v. Spouses Serrano, G.R. No.

195072, [August 1,
Issue: whether a declaration that Government-owned land has become
alienable and disposable sufficiently converts it into patrimonial property Notwithstanding the failure by the spouses to comply with the
of the State, making it susceptible to acquisitive prescription. cancellation requirements under RA No. 6552, however, Bonifacio's
action for specific performance must nonetheless fail on the ground of
Ruling: While a prior declaration that the property has become prescription.
alienable and disposable is sufficient in an application for judicial
confirmation of title under Section 14 (1) of the PRD, it does not suffice In Manuel Uy & Sons, Inc. v. Valbueco,
Incorporated, 38 the parties therein entered into conditional deeds
for the purpose of prescription under the Civil Code. 25 Before
of sale on November 29, 1973, which provided that the buyer shall
prescription can even begin to run against the State, the following
pay the last installment of the purchase price on November 15, 1974.
conditions must concur to convert the subject into patrimonial property: The buyer, however, failed to pay said installment. On March 16,
2001, or twenty-seven (27) years thereafter, the buyer filed an action
1. The subject lot must have been classified as agricultural land
for specific performance seeking to compel the seller to accept the
in compliance with Sections 2 and 3 of Article XII of
balance of the purchase price and to execute the corresponding deeds
the Constitution;
of absolute sale. The Court, however, affirmed the action's dismissal
2. The land must have been classified as alienable and in the following wise:
disposable; 26
. . . The Complaint shows that the
3. There must be a declaration from a competent authority that Conditional Deeds of Sale were executed on
the subject lot is no longer intended for public use, thereby November 29, 1973, and payments were due on
converting it to patrimonial property. both Conditional Deeds of Sale on November 15,
1974. Article 1144 of the Civil Code provides that
Only when these conditions are met can applicants begin actions based upon a written contract must be
their public and peaceful possession of the subject lot in the concept brought within ten years from the time the right
of an owner. of action accrues. Non-fulfillment of the
In the present case, the third condition is absent. Even obligation to pay on the last due date, that
though it has been declared alienable and disposable, the property is, on November 15, 1974, would give rise to
has not been withdrawn from public use or public service. Without an action by the vendor, which date of
this, prescription cannot begin to run because the property has not reckoning may also apply to any action by
yet been converted into patrimonial property of the State. It remains the vendee to determine his right under R.A.
outside the commerce of man and the respondent's physical No. 6552. The vendee, respondent herein, filed
possession and occupation thereof do not produce any legal effect. this case on March 16, 2001, which is clearly
In the eyes of the law, the respondent has never acquired legal beyond the 10-year prescriptive period; hence,
possession of the property and her physical possession the action has prescribed. 39 ETHIDa
thereof, no matter how long, can never ripen into ownership. In this case, the parties agreed that the purchase price in
Caltex (Philippines), Inc. v. Singzon Aguirre, G.R. Nos. 170746- the total amount of P6,000.00 shall be paid in three (3) equal
installments on June 27, 1976, June 30, 1977, and finally, on June
47, [March 9, 2016])
30, 1978. Yet, it is undisputed that not only did Bonifacio fail to pay
There is no dispute that the respondents' cause of action against the the last two (2) installments, it took him twenty (20) years from the
last due date on June 30, 1978 to assert his rights over the property
petitioners has prescribed under the Civil Code. 42 In fact, the same is
subject of the contract to sell. As borne by the records, Bonifacio filed
evident on the complaint itself. The respondents brought their claim
the instant Complaint for Specific Performance only on November 3,
before a Philippine court only on March 6, 2001, more than 13 years 1998 to oblige the Spouses Serrano to execute the proper Deed of
after the collision occurred. 43 Article 1139 of the Civil Code states that Sale and to cause the transfer of the title over the subject parcel of
actions prescribe by the mere lapse of time fixed by law. Accordingly, land. Yet, as categorically ruled inManuel Uy, such action to enforce
the RTC of Catbalogan cannot be faulted for the motu proprio dismissal said written contract herein prescribes in ten (10) years reckoned
of the complaint filed before it. It is settled that prescription may be from the non-fulfillment of the obligation to pay on the last due date.
considered by the courts motu proprio if the facts supporting the ground Thus, Bonifacio should have filed the action before June 30, 1988.
are apparent from the pleadings or the evidence on record. 44|||
(Buisan v. Commission on Audit, G.R. No. 212376, [January 31,
In the instant case, not only once did the petitioners expressly renounce 2017])
their defense of prescription. Nonetheless, the Court cannot consider
The petitioners' statement that there were already heavy rains since
such waiver as basis in order to reverse the rulings of the courts below
1989 that caused flooding in the area negates their previous claim that
as the dismissal of the complaint had become final and binding on both
the cause of action arose in 1992. If in fact there were already heavy
the petitioners and the respondents.
rains since 1989, then it can also be argued that prior to 1992, their
(Cabling v. Dangcalan, G.R. No. 187696, [June 15, 2016]) properties were already damaged by the floods and that would be the
reckoning point of their cause of action. This further establishes that
Suffice it to say that the errors ascribed by petitioner to the their cause of action has already prescribed.|||
RTC Decision are factual issues that properly belong to the jurisdiction
of the CA. The test of whether a question is one of law or of fact is Undeniably, the petitioners' money claims which were only filed with the
whether the appellate court can determine the issue raised without DPWH in 2004 or even in 2001 had already prescribed. As correctly
reviewing or evaluating the evidence. If so, it is a question of law; pointed out by the Office of the Solicitor General, "[i]t will be the height
otherwise it is a question of fact. 29 of injustice for respondent DPWH to be confronted with stale claims,
where verification on the plausibility of the allegations remains difficult,
Good faith is a question of fact that must be either because the condition of the alleged inundation of crops has
proved. 30 Similarly, the question of prescription of an action changed, or the physical impossibility of accounting for the lost and
involves the ascertainment of factual matters, such as the date when damaged crops due to the considerable lapse of time.”
the period to bring the action commenced to run.
In the case at bar, laches has set in as the elements 24 thereof are
present. Firstly, the premature opening by the DPWH of the Project
allegedly causing flash floods, and damaging the petitioners' properties enacted to help declog court dockets, which had been packed
took place in 1989 or even in 1992. Secondly, the petitioners took 15 with B.P. 22 because creditors used the courts as collectors.
years to assert their rights when they formally filed a complaint in 2004
As a necessary consequence of this special rule, the civil
against the DPWH. Thirdly, as the petitioners failed to file a formal suit liabilities arising from the issuance of a worthless check are deemed
for their claims before the COA, there is an apparent lack of notice that instituted in a case for violation of B.P. 22; the death of Bernardo did
would give the DPWH the opportunity to defend itself. not automatically extinguish the action. The independent civil liability
based on contract, which was deemed instituted in the criminal action
Dy v. People, G.R. No. 189081, [August 10, 2016]) for B.P. 22, may still be enforced against her estate in the present
We note that while there is no written contract of loan in
this case, there is an oral contract of loan which must be brought People v. Lipata y Ortiza, G.R. No. 200302, [April 20, 2016])
within six years. 65 Under the facts of the case, it appears that any
breach in the obligation to pay the loan may have happened between We also ruled that "if the private offended party, upon
1996 and 1999, or more than six years since this case has been extinction of the civil liability ex delicto desires to recover damages
instituted. This notwithstanding, we find that the civil action arising from the same act or omission complained of, he must subject to
from the contract of loan has not yet prescribed. Section 1, Rule 111 ([of the then applicable] 1985 Rules on Criminal
Procedure as amended) file a separate civil action, this time
We held in numerous cases that it is the legal possibility of predicated not on the felony previously charged but on other sources
bringing the action that determines the starting point for the of obligation. The source of obligation upon which the separate civil
computation of the period of prescription. 67 We highlight the unique action is premised determines against whom the same shall be
circumstances surrounding this case. As discussed in this decision, enforced." 27
there has been diverse jurisprudence as to the propriety of ordering
an accused to pay an obligation arising from a contract in the criminal We proceeded to distinguish the defendants among the
case where the accused was acquitted on the ground that there is no different causes of action. If the act or omission complained of arises
crime. Litigants, such as MCCI, cannot be blamed for relying on prior from quasi-delict or, by provision of law, results in an injury to person
rulings where the recovery on a contract of loan in a criminal case or real or personal property, the separate civil action must be filed
for estafa was allowed. We have found the opportunity to clarify this against the executor or administrator of the estate pursuant to
matter through this decision. As it is only now that we delineate the Section 1, Rule 87 of the Rules of Court. 28 On the other hand, if the
rules governing the fusion of criminal and civil actions pertaining act or omission complained of arises from contract, the separate civil
to estafa, it is only upon the promulgation of this judgment that action must be filed against the estate of the accused pursuant to
litigants have a clear understanding of the proper recourse in similar Section 5, Rule 86 of the Rules of Court.
cases. We therefore rule that insofar as MCCI is concerned, the filing
[Cited People vs Bayotas, katong 4 ka rules]
of an action, if any (that may be sourced from the contract of loan),
becomes a legal possibility only upon the finality of this decision which (Development Bank of the Phils. v. Guariña Agricultural &
definitively ruled upon the principles on fused actions. Realty Development Corp., G.R. No. 160758, [January 15,
We add, however, that upon finality of this decision,
2014], 724 PHIL 209-226
prospective litigants should become more circumspect in ascertaining By its failure to release the proceeds of the loan in their entirety, DBP
their course of action in similar cases. Whenever a litigant erroneously had no right yet to exact on Guariña Corporation the latter's
pursues an estafa case, and the accused is subsequently acquitted compliance with its own obligation under the loan. Indeed, if a party
because the obligation arose out of a contract, the prescriptive period in a reciprocal contract like a loan does not perform its obligation, the
will still be counted from the time the cause of action arose. In this other party cannot be obliged to perform what is expected of it while
eventuality, it is probable that the action has already prescribed by the other's obligation remains unfulfilled. 30 In other words, the
the time the criminal case shall have been completed. This possibility latter party does not incur delay
demands that prospective litigants do not haphazardly pursue the
filing of an estafa case in order to force an obligor to pay his or her (The Hongkong & Shanghai Banking Corp., Limited v.
obligation with the threat of criminal conviction. It compels litigants National Steel Corp., G.R. No. 183486, [February 24, 2016])
to be honest and fair in their judgment as to the proper action to be
HSBC's persistent refusal to comply with its obligation
filed. This ruling should deter litigants from turning to criminal courts
notwithstanding due presentment constitutes delay contemplated
as their collection agents, and should provide a disincentive to the
in Article 1169 of the Civil Code.117 This provision states that a
practice of filing of criminal cases based on unfounded grounds in
party to an obligation incurs in delay from the time the other party
order to provide a litigant a bargaining chip in enforcing contracts.
makes a judicial or extrajudicial demand for the fulfillment of the
(People v. Egagamao, G.R. No. 218809, [August 3, 2016]) obligation. We rule that the due presentment of the Letter of Credit
and the attached documents is tantamount to a demand. HSBC
The private offended party need not fear a forfeiture of his right to incurred in delay when it failed to fulfill its obligation despite such
file this separate civil action by prescription, in cases where during a demand.
the prosecution of the criminal action and prior to its extinction, the
private-offended party instituted together therewith the civil action. Under Article 1170 of the Civil Code, 118 a party in
In such case, the statute of limitations on the civil liability is deemed delay is liable for damages. The extent of these damages pertains
interrupted during the pendency of the criminal case, conformably to the pecuniary loss duly proven. 119 In this case, such damage
with provisions of Article 1155 of the Civil Code, that should thereby refers to the losses which NSC incurred in the amount of
avoid any apprehension on a possible privation of right by US$485,767.93 as stated in the Letter of Credit. We also award
prescription.||| interest as indemnity for the damages incurred in the amount of
six percent (6%) from the date of NSC's extrajudicial
(Bernardo v. People, G.R. No. 182210, [October 5, 2015]) demand. 120 An interest in the amount of six percent (6%) is also
awarded from the time of the finality of this decision until full
The independent civil liabilities, however, survive death and
payment. 121
an action for recovery therefore may be generally pursued but only
by filing a separate civil action and subject to Section 1, Rule 111 of (Limlingan v. Asian Institute of Management, Inc., G.R. Nos.
the Rules on Criminal Procedure as amended. 38 This separate civil 220481 & 220503, [February 17, 2016])
action may be enforced against the estate of the accused. 39
Citing Nacar case
In B.P. 22 cases, the criminal action shall be deemed to
include the corresponding civil actions. Instead of instituting two To recapitulate and for future guidance, the guidelines
separate cases, only a single suit is filed and tried. 40 This rule was laid down in the case of Eastern Shipping Lines are accordingly
modified to embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, (Banco de Oro Unibank, Inc. v. Sunnyside Heights
contracts, quasi-contracts, delicts or quasi-delicts is breached, Homeowners Association, Inc., G.R. No. 198745, [January 13,
the contravenor can be held liable for damages. The provisions 2016])|||
under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages. Cited Eastern Shipping Lines
II. With regard particularly to an award of interest in the ||| (Cabanting v. BPI Family Savings Bank, Inc.,
concept of actual and compensatory damages, the rate of G.R. No. 201927, [February 17, 2016])
interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the
payment of a sum of money, i.e., a loan or forbearance of The CA is correct that no prior demand was necessary to
money, the interest due should be that which may have make petitioners' obligation due and payable. The Promissory Note
been stipulated in writing. Furthermore, the interest due with Chattel Mortgage clearly stipulated that "[i]n case of my/our
shall itself earn legal interest from the time it is judicially [petitioners'] failure to pay when due and payable, any sum which
demanded. In the absence of stipulation, the rate of I/We . . . or any of us may now or in the future owe to the holder
interest shall be 6% per annum to be computed from of this note . . . then the entire sum outstanding under this note
default, i.e., from judicial or extrajudicial demand under shall immediately become due and payable without the necessity
and subject to the provisions of Article 1169 of the Civil of notice or demand which I/We hereby waive." 6 Petitioners argue
Code. that such stipulation should be deemed invalid as the document
they executed was a contract of adhesion. It is important to stress
2. When an obligation, not constituting a loan or the Court's ruling in Dio v. St. Ferdinand Memorial Park, Inc., 7 to
forbearance of money, is breached, an interest on the wit:
amount of damages awarded may be imposed at
the discretion of the court at the rate of 6% per A contract of adhesion, wherein one
annum. No interest, however, shall be adjudged on party imposes a ready-made form of contract
unliquidated claims or damages, except when or until the on the other, is not strictly against the law. A
demand can be established with reasonable certainty. contract of adhesion is as binding as
Accordingly, where the demand is established with ordinary contracts, the reason being that
reasonable certainty, the interest shall begin to run from the party who adheres to the contract is
the time the claim is made judicially or extrajudicially (Art. free to reject it entirely.
1169, Civil Code), but when such certainty cannot be so Further, the Court even ruled
reasonably established at the time the demand is made, in Navarro v. Escobido that prior demand is
the interest shall begin to run only from the date the not a condition precedent to an action for a
judgment of the court is made (at which time the writ of replevin, since there is nothing in
quantification of damages may be deemed to have been Section 2, Rule 60 of the Rules of Court that
reasonably ascertained). The actual base for the requires the applicant to make a demand on
computation of legal interest shall, in any case, be on the the possessor of the property before an action
amount finally adjudged. for a writ of replevin could be filed. 10
3. When the judgment of the court awarding a sum of
Article 1169 (1) of the Civil Code allows a party to waive
money becomes final and executory, the rate of legal
the need for notice and demand. Petitioners' argument that their
interest, whether the case falls under paragraph 1 or
liability cannot be deemed due and payable for lack of proof of
paragraph 2, above, shall be 6% per annum from such
demand must be struck down.
finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of
(Philippine Airlines, Inc. v. PAL Employees Savings & Loan
(Fausto v. Multi Agri-Forest and Community Association, Inc., G.R. No. 201073, [February 10, 2016])|||
DevelopmentCooperative, G.R. No. 213939 (Resolution),
[October 12, 2016]) In addition, the Court finds that an award of interest is
in order. In Nacar v. Gallery Frames, 42 the Court clarified that:
Anent the petitioners' claim that no notice or demand was
sent to them, the CA correctly ruled that the instant case falls under When an obligation, not constituting
the exceptions to the necessity of demand. Specifically, Article 1169, a loan or forbearance of money, is breached,
paragraph 1 of the Civil Code provides that demand is not necessary an interest on the amount of damages
when the obligation or the law expressly so declares. In the awarded may be imposed at the discretion of
promissory notes signed by the petitioners, there is a uniform the court at the rate of 6% per annum. No
provision which states that "[i]n case of default in payment of any interest, however, shall be adjudged on
installment due as herein agreed, the entire balance of this note unliquidated claims or damages, except when
shall immediately become due and payable at the option of the or until the demand can be established with
[respondent] without any notice or demand." This amounts to the reasonable certainty. Accordingly, where the
express waiver of the need for demand before the debtor incurs in demand is established with reasonable
delay. certainty, the interest shall begin to run from
the time the claim is made judicially or
The petitioners cannot evade liability by invoking that the extrajudicially (Art. 1169, Civil Code), but
stipulation on the waiver of notice applies only to the principal. It when such certainty cannot be so reasonably
bears noting that the promissory notes state that the petitioners established at the time the demand is made,
bound themselves jointly and severally liable with the principal the interest shall begin to run only from the
debtor for the entire amount of the obligation. A solidary or joint and date the judgment of the court is made (at
several obligation is one in which each debtor is liable for the entire which time the quantification of damages may
obligation. 47 The petitioners being co-makers, their liability is be deemed to have been reasonably
immediate and absolute as the principal debtor. The terms of the ascertained). The actual base for the
promissory notes apply to co-makers in equal force as with the computation of legal interest shall, in any
principal debtors. This includes stipulation on the waiver of notice case, be on the amount finally adjudged.
from the creditor before the obligation becomes due and
(Osmeña III v. Power Sector Assets and Liabilities Galleon's stockholders. The M emorandum of Agreement was
Management Corp., G.R. No. 212686 (Resolution), [October 5, executed on August 10, 1981, giving the parties no more than sixty
2016]) days or up to October 9, 1981, to prepare and sign the share
purchase agreement. However, it was only on April 26, 1982, or
The Court explained in The Wellex Group, Inc. v. U-Land Airlines, Co., more than eight months after the Memorandum of Agreement was
Ltd. 11 that, under Art. 1185, if an obligation is conditioned on the non- signed, did NDC's General Director submit his recommendation on
occurrence of a particular event at a determinate time, that obligation Galleon's outstanding account. Even then, there was no clear
arises (a) at the lapse of the indicated time, or (b) if it has become intention to execute a share purchase agreement as compliance
evident that the event cannot occur. ||| with the Memorandum of Agreement. Article 1186 of the Civil Code
is categorical that a "condition shall be deemed fulfilled when the
In the case at bar, PSALM's obligation to award the contract in TPVI's obligor voluntarily prevents its fulfilment." Considering NDC's
favor was dependent on the non-occurrence of an event: SPC's legal delay, the execution of the share purchase agreement should be
considered fulfilled with NDC as the new owner of 100% of
and valid exercise of its Right to Top. As phrased by PSALM: "the
Galleon's shares of stocks.
approval of the sale to TPVI was a conditional one, the consummation
of which is dependent on the non-exercise by SPC of its right to The due execution of the share purchase agreement is
top." 13 It has become apparent, however, that such event will never further bolstered by Article 1198 (4) of the Civil Code, which states
occur. SPC can never legally and validly invoke its Right to Top in view that the debtor loses the right to make use of the period when a
of its nullity. The condition, therefore, is deemed complied with by condition is violated, making the obligation immediately
operation of law, and the obligation to execute the purchase contracts demandable:
in favor of TPVI, due and demandable.||| Article 1198. The debtor shall lose every right
to make use of the period:
(Sagun v. ANZ Global Services and Operations (Manila), Inc.,
G.R. No. 220399 (Resolution), [August 22, 2016]) (1) When after the obligation has been
contracted, he becomes insolvent, unless he
In this case, the Court agrees with the finding of the CA that gives a guaranty or security for the debt;
there was already a perfected contract of employment when petitioner
(2) When he does not furnish to the creditor
signed ANZ's employment offer and agreed to the terms and conditions
the guaranties or securities which he has
that were embodied therein. Nonetheless, the offer of employment promised;
extended to petitioner contained several conditions before he may be
deemed an employee of ANZ. Among those conditions for employment (3) When by his own acts he has impaired said
was the "satisfactory completion of any checks (e.g., background, guaranties or securities after their
bankruptcy, sanctions and reference checks) that may be required by establishment, and when through a fortuitous
event they disappear, unless he immediately
ANZ." 40 Accordingly, petitioner's employment with ANZ depended on
gives new ones equally satisfactory;
the outcome of his background check, which partakes of the nature of
a suspensive condition, and hence, renders the obligation of the would- (4) When the debtor violates any undertaking,
be employer, i.e., ANZ in this case, conditional.||| in consideration of which the creditor agreed
to the period;
Here, the subject employment contract required a satisfactory
completion of petitioner's background check before he may be deemed (5) When the debtor attempts to abscond.
(Emphasis supplied)
an employee of ANZ. Considering, however, that petitioner failed to
explain the discrepancies in his declared information and documents Well-settled is the rule that findings of fact made by a
that were required from him relative to his work experience at Siemens, trial court and the Court of Appeals are accorded the highest
namely: (a) that he was only a Level 1 and not a Level 2 Technical degree of respect by this Court, and, absent a clear disregard of
Support Representative that conducts troubleshooting for both the evidence before it that can otherwise affect the results of the
computer hardware and software problems; and (b) that he was found case, those findings should not be ignored.
to have been terminated for cause and not merely resigned from his
post, that rendered his background check unsatisfactory, ANZ's
obligations as a would-be employer were held in suspense and thus, had
yet to acquire any obligatory force. 45 To reiterate, in a contract with a
suspensive condition, if the condition does not happen, the obligation
does not come into effect. Thus, until and unless petitioner complied
with the satisfactory background check, there exists no obligation on the
part of ANZ to recognize and fully accord him the rights under the
employment contract. In fact, records also show that petitioner failed to
report for work on or before July 11, 2011, which was also a suspensive
condition mandated under sub-paragraph 4 of Schedule 1 of the

Consequently, no employer-employee relationship was

said to have been created between petitioner and ANZ under the
circumstances, and the dismissal of the former's complaint for
illegal termination from work, as held by the NLRC, was correctly
sustained by the CA.
(Development Bank of the Philippines v. Sta. Ines Melale Forest
Products Corp., G.R. Nos. 193068 & 193099, [February 1,
2017])| |

We uphold the Court of Appeals' finding that the failure

to execute the share purchase agreement was brought about by
NDC's delay in reviewing the financial accounts submitted by