LAPUZ, JESUS, JR.

ROS

CASES:

(40)

Land Bank of the Philippines v. Lamberto C. Perez,

G.R. No. 166884
June 13, 2012

Doctrine: Whatever is built, planted or sown on the land of another and the
improvements or repairs made thereon, belong to the owner of the land, subject to
the provisions of the following articles

Facts:

Petitioner Land Bank of the Philippines (LBP) is a government financial institution

and the official depository of the Philippines. Respondents were officers of Asian
Construction and Development Corporation (ACDC), a corporation engaged in the
construction business. On several occasions, respondents executed in favor of Land
Bank of the Philippines (LBP) trust receipts to secure the purchase of construction
materials that they will need in their construction projects. When the trust receipts
matured, ACDC failed to return to LBP the proceeds of the construction projects or
the construction materials subject of the trust receipts. After several demands went
unheeded, LBP filed a complaint for Estafa or violation of Art. 315, par. 1(b) of the
RPC, in relation to PD 115, against the respondent officers of ACDC.

ISSUE:

WON the disputed transactions is a trust receipt or a loan?

HELD:

TRUST RECEIPT

RATIO:

There are two obligations in a trust receipt transaction. The first is covered by the
provision that refers to money under the obligation to deliver it (entregarla) to the
owner of the merchandise sold. The second is covered by the provision referring to
merchandise received under the obligation to return it (devolvera) to the owner.
Thus, under the Trust Receipts Law,] intent to defraud is presumed when (1) the
entrustee fails to turn over the proceeds of the sale of goods covered by the trust
receipt to the entruster; or (2) when the entrustee fails to return the goods under
trust, if they are not disposed of in accordance with the terms of the trust receipts.
In all trust receipt transactions, both obligations on the part of the trustee exist in
the alternative the return of the proceeds of the sale or the return or recovery of the
goods, whether raw or processed. When both parties enter into an agreement
knowing that the return of the goods subject of the trust receipt is not possible even
without any fault on the part of the trustee, it is not a trust receipt transaction
penalized under Section 13 of P.D. 115; the only obligation actually agreed upon by
the parties would be the return of the proceeds of the sale transaction. This
transaction becomes a mere loan, where the borrower is obligated to pay the bank
the amount spent for the purchase of the goods.

Article 1371 of the Civil Code provides that [i]n order to judge the intention of the
contracting parties, their contemporaneous and subsequent acts shall be principally
considered. Under this provision, we can examine the contemporaneous actions of
the parties rather than rely purely on the trust receipts that they signed in order to
understand the transaction through their intent.

We note in this regard that at the onset of these transactions, LBP knew that ACDC
was in the construction business and that the materials that it sought to buy under
the letters of credit were to be used for the following projects: the Metro Rail Transit
Project and the Clark Centennial Exposition Project. LBP had in fact authorized the
delivery of the materials on the construction sites for these projects, as seen in the
letters of credit it attached to its complaint. Clearly, they were aware of the fact that
there was no way they could recover the buildings or constructions for which the
materials subject of the alleged trust receipts had been used. Notably, despite the
allegations in the affidavit-complaint wherein LBP sought the return of the
construction materials, its demand letter dated May 4, 1999 sought the payment of
the balance but failed to ask, as an alternative, for the return of the construction
materials or the buildings where these materials had been used.

The fact that LBP had knowingly authorized the delivery of construction
materials to a construction site of two government projects, as well as
unspecified construction sites, repudiates the idea that LBP intended to be the
owner of those construction materials. As a government financial institution,
LBP should have been aware that the materials were to be used for the
construction of an immovable property, as well as a property of the public
domain. As an immovable property, the ownership of whatever was
constructed with those materials would presumably belong to the owner of
the land, under Article 445 of the Civil Code.

Even if we consider the vague possibility that the materials, consisting of cement,
bolts and reinforcing steel bars, would be used for the construction of a movable
property, the ownership of these properties would still pertain to the government
and not remain with the bank as they would be classified as property of the public
domain, which is defined by the Civil Code as:

In contrast with the present situation, it is fundamental in a trust receipt transaction

that the person who advanced payment for the merchandise becomes the absolute
owner of said merchandise and continues as owner until he or she is paid in full, or
if the goods had already been sold, the proceeds should be turned over to him or to
her.

(60)

EDCA PUBLISHING & DISTRIBUTING CORP., petitioner, vs. THE SPOUSES

LEONOR and GERARDO SANTOS, doing business under the name and style of
"SANTOS BOOKSTORE," and THE COURT OF APPEALS, respondents.

G.R. No. 80298, April 26, 1990

Doctrine: It is clear that ownership in the thing sold shall not pass to the buyer until
full payment of the purchase price only if there is a stipulation to that effect.
Otherwise, the rule is that such ownership shall pass from the vendor to the vendee
upon the actual or constructive delivery of the thing sold even if the purchase price
has not yet been paid. Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case of bouncing checks. But
absent the stipulation above noted, delivery of the thing sold will effectively transfer
ownership to the buyer who can in turn transfer it to another

FACTS: A person identifying himself as Professor Jose Cruz placed an order by

telephone with the petitioner company for 406 books, payable on delivery. Herein
petitioner prepared and delivered the same together with an invoice. In turn Cruz
issued a personal check covering the purchase price of P8,995.65. Cruz then sold
120 of the books to private respondent Leonor Santos who, after verifying the
seller's ownership from the invoice he showed her, paid him P1,700.00.

Petitioner made an inquiry with the De la Salle College where Cruz had
claimed to be a dean. Petitioner was informed that there was no such person in its
employ. It was found out that Cruz had no more account or deposit with the
Philippine Amanah Bank, against which he had drawn the payment check. With the
aid of policemen Cruz was trapped. His real name is Tomas de la Pea. It was found
out that 120 of the books he had ordered from EDCA were sold to the private
respondents. Petioner and the police went to Santos store and seized the subject
books.

The private respondents sued for recovery of the books after demand for
their return was rejected by EDCA. The Municipal Trial Court ruled in favour of
private respondents, which was sustained by the Regional Trial Court. The Court of
Appeals affirmed the same. Hence, this petition. The petitioner argues that it was,
because the impostor acquired no title to the books that he could have validly
transferred to the private respondents. Its reason is that as the payment check
bounced for lack of funds, there was a failure of consideration that nullified the
contract of sale between it and Cruz.

ISSUE: Whether or not petitioner has been unlawfully deprived of the books
because the check issued by dela Pena in payment therefor which was dishonored.

HELD: The contract of sale is consensual and is perfected once agreement is

reached between the parties on the subject matter and the consideration.

According to the Civil Code:

ART. 1475. The contract of sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to
the provisions of the law governing the form of contracts.

ART. 1477. The ownership of the thing sold shall be transferred to the vendee
upon the actual or constructive delivery thereof.

ART. 1478. The parties may stipulate that ownership in the thing shall not pass to
the purchaser until he has fully paid the price.

It is clear that ownership in the thing sold shall not pass to the buyer until
full payment of the purchase price only if there is a stipulation to that effect.
Otherwise, the rule is that such ownership shall pass from the vendor to the vendee
upon the actual or constructive delivery of the thing sold even if the purchase price
has not yet been paid. Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case of bouncing checks. But
absent the stipulation above noted, delivery of the thing sold will effectively transfer
ownership to the buyer who can in turn transfer it to another. Actual delivery of the
books having been made, Cruz acquired ownership over the books which he could
then validly transfer to the private respondents. The fact that he had not yet paid for
them to EDCA was a matter between him and EDCA and did not impair the title
acquired by the private respondents to the books.

Article 559 provides that "the possession of movable property acquired in

good faith is equivalent to a title," thus dispensing with further proof. Leonor Santos
took care to ascertain first that the books belonged to Cruz before she agreed to
purchase them. The private respondent did not have to go beyond that invoice to
satisfy herself that the books being offered for sale by Cruz belonged to him; yet she
did. Although the title of Cruz was presumed under Article 559 by his mere
possession of the books, these being movable property, Leonor Santos nevertheless
demanded more proof before deciding to buy them.
 (80)

SPS. AGUIRRE V. HEIRS OF LUCAS VILLANUEVA, ET AL.,

G.R. NO. 169898, OCTOBER 27, 2006

Doctrine: The action is barred by laches which is defined as the failure to assert a
right for an unreasonable and unexplained length or time, warranting a
presumption that the party entitled to assert it has either abandoned or declined to
assert it. This equitable defense is based upon grounds of public policy, which
requires the discouragement of stale claims for the peace of society.

FACTS:

The petitioners have been in possession of a parcel of land for more than 26 years.
They declared it for taxation purposes, occupied it, built fences, planted trees and
used the same as ingress and egress towards their cottages. The respondent knew
all these but they did not lift a finger to bar them from doing so. They waited for 16
years to oust them.

ISSUE:

Will the action prosper? Why?

HELD:

No. Laches had already set it. Since they have been in continuous possession and
enjoyment of the disputed land in good faith and with a just title since 1971 until
1997, petitioners doubtlessly obtained title by ordinary acquisitive prescription.
The action is barred by laches which is defined as the failure to assert a right for an
unreasonable and unexplained length or time, warranting a presumption that the
party entitled to assert it has either abandoned or declined to assert it. This
equitable defense is based upon grounds of public policy, which requires the
discouragement of stale claims for the peace of society.

PERSONS 2008 BAR QUESTIONS

Capacity: Juridical Capacity (2008)

No. II. At age 18, Marian found out that she was pregnant. She insured her own life
and named her unborn child as her sole beneficiary. When she was already due to
give birth, she and her boyfriend Pietro, the
father of her unboarn child, were kidnapped in a resort in Bataan where they were
vacationing. The military gave chase and after one week, they were found in an
abandoned hut in Cavite. Marian and Pietro were hacked with bolos. Marian and the
baby delivered were both found dead, with the baby's umbilical cord already cut.
Pietro survived.

(A). Can Marian's baby be the beneficiary of the insurance taken on the life of the
mother? (2%)

SUGGESTED ANSWER:

Yes, the baby can be the beneficiary of the life insurance of Marian. Art. 40 NCC
provides that "birth determines personality; but the conceived child shall be
considered born for all purposes that are favorable to it, provided that it be born
later with the conditions specified in Art. 41. Article 41 states that "for civil
purposes, the fetus shall be considered born if it is alive at the time it is completely
delivered from the mother's womb. However, if the fetus had an intra-uterine life of
less than seven months, it is not deemed born if it dies within twenty-four (24)
hours after its complete delivery from the maternal womb. The act of naming the
unborn child as sole beneficiary in the insurance is favorable to the conceived child
and therefore the fetus acquires presumptive
or provisional personality. However, said presumptive personality only becomes
conclusive if the child is born alive. The child need not survive for twenty-four (24)
hours as required under Art. 41 of the Code because "Marian was already due to
give birth," indicating that the child was more than seven months old.

Correction of Entries; Clerical Error Act (2008)

No. IV. Gianna was born to Andy and Aimee, who at the time Gianna's birth were not
married to each other. While Andy was single at the time, Aimee was still in the
process of securing a judicial declaration of nullity on her marriage to her ex-
husband.
Gianna's birth certificate, which was signed by both Andy and Aimee, registered the
status of Gianna as "legitimate", her surname carrying that of Andy's and that her
parents were married to each other.

(A). Can a judicial action for correction of entries in Gianna's birth certificate be
successfully maintained to:

a). Change her status from "legitimate" to "illegitimate" (1%);

the Rules of Court because said changes are substantive corrections.

and

b). Change her surname from that of Andy's to Aimee's maiden surname? (1%)

SUGGESTED ANSWER:
Yes, a judicial action for correction of entries in Gianna's birth certificate can be
successfully maintained to change (a) her status from "legitimate" to "illegitimate,"
and (b) her surname from that of Andy's to Aimee's maiden surname in accordance
with Rule 108 of the Rules of Court because said changes are substantive
corrections.

(B). Instead of a judicial action, can administrative proceedings be brought for the
purpose of making the above corrections? (2%)

SUGGESTED ANSWER:

No. An administrative proceeding cannot be brought for the purpose of making the
above corrections. R.A. 9048, otherwise known as the Clerical Error Act, which
authorizes the city or municipal civil registrar or the consul general to correct a
clerical or typographical error in an entry and/or change the first name or nickname
in the civil register without need of a judicial order. Errors that involve the change of
nationality, age, status, surname or sex of petitioner are not included from the
coverage of the said Act (Silverio v. Republic, G.R. No. 174689, 22 Oct., 2007).