FRANCISCO LIM vs EQUITABLE PCI BANK

G.R. No. 183918; January 15, 2014; Del Castillo; Second Division

DOCTRINE:

Marriage; Property Relations; Conjugal Property – All property of the marriage is presumed to be conjugal, unless it is shown that it is owned exclusively by the husband or the wife; that this presumption is not overcome by the fact that the property is registered in the name of the husband or the wife alone; and that the consent of both spouses is required before a conjugal property may be mortgaged.  [T]his presumption under Article 160 of the Civil Code cannot prevail when the title is in the name of only one spouse and the rights of innocent third parties are involved.

FACTS:

Petitioner Francisco Lim executed an SPA in favor of his brother Franco to mortgage his share in a property in order to secure a loan. This first loan extended by BDO in 1989 was fully paid by Franco in 1992. However in 1996, Franco and their mother obtained another loan over the same property which they failed to pay.

Respondent Bank tried to foreclose the property due to the non-payment of the loan. Petitioner thus tried to get a TRO and for the foreclosure and to secure a cancellation of the SPA executed in favor of his brother. Petitioner alleged that he did not authorize Franco to mortgage the subject property to respondent and that his signatures in the Real Estate Mortgage and the Surety Agreement were forged.

the RTC rendered a Decision in favor of petitioner. It ruled that petitioner was able to prove by preponderance of evidence that he did not participate in the execution of the mortgage contract giving rise to the presumption that his signature was forged.

The CA reversed the RTC Decision. It ruled that petitioner’s mere allegation that his signature in the mortgage contract was forged is not sufficient to overcome the presumption of regularity of the notarized document.

ISSUE:

1. Whether or not Petitioner was able to prove that the SPA was forged.

2. Whether or not Respondent Bank was failed to exercise due diligence when granting the loan without the signature of Petitioner's wife in the mortgage contract.

HELD:

1. NO. Petitioner was not able to prove that his signature was forged. No evidence was ever presented to prove the allegation: the alleged forged signature was never compared with the genuine signatures of petitioner as no sample signatures were submitted.

2. NO. Respondent exercised due diligence. The nature of the property was never raised as an issue. Hence, the absence of his wife’s signature on the mortgage contract also has no bearing in this case.

All property of the marriage is presumed to be conjugal, unless it is shown that it is owned exclusively by the husband or the wife; that this presumption is not overcome by the fact that the property is registered in the name of the husband or the wife alone; and that the consent of both spouses is required before a conjugal property may be mortgaged.  However, we find it iniquitous to apply the foregoing presumption especially since the nature of the mortgaged property was never raised as an issue before the RTC, the CA, and even before this Court. In fact, petitioner never alleged in his Complaint that the said property was conjugal in nature. Hence, respondent had no opportunity to rebut the said presumption.

Article 160 of the Civil Code provides as follows:

"Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife."

The presumption applies to property acquired during the lifetime of the husband and wife. In this case, it appears on the face of the title that the properties were acquired by [one spouse]. When the property is registered in the name of a spouse only and there is no showing as to when the property was acquired by said spouse, this is an indication that the property belongs exclusively to said spouse. And this presumption under Article 160 of the Civil Code cannot prevail when the title is in the name of only one spouse and the rights of innocent third parties are involved.

CUSTODIO vs. COURT OF APPEALS

G.R. No. 116100. February 9, 1996

DOCTRINE:

The mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong.

Damnum absque injuria – There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria.

Article 21 – Article 21 of the New Civil Code provides the basis for the principle of abuse of rights. For there to be an abuse of rights, the following requisites must concur: (1) defendant acted in a manner contrary to morals, good customs or public policy; (2) The acts should be willful and; (3) There was damage or injury to the plaintiff.

FACTS:

Private Respondent Mabasa wanted to establish an easement of right of way going into their property against petitioners who built an adobe wall in their properties which thereby restricted access to the Mabasa property. Petitioners claim that they built the wall in order to protect their persons and their property from their intrusive neighbors. The Trial Court nonetheless ordered that an easement be created.

Not satisfied, Mabasa went to the Court of Appeals which modified the decision of the trial court by awarding actual damages (p65,000.00), moral damages (p30,000.00) and exemplary damages (p10,000.00). Hence this petition. Damages were based on the fact of loss in the form of unrealized rentals on the property due to the adobe wall restricting access.

ISSUE: WON the CA erred in awarding damages.

HELD:

Yes. The Court of Appeals erred, the award for damages has no legal basis. The mere fact of loss does not give rise to a right to recover damages. There must be both a right of action for a legal wrong inflicted by defendant and a damage to the plaintiff resulting therefrom. Damages are merely a part of the remedy allowed for the injury caused by a breach or wrong.

An injury is an illegal invasion of a legal right, any loss, hurt and harm resulting from the injury is damage. Damages are the recompense or compensation awarded for the damage suffered. In this case, the petitioners merely constructed an adobe wall which was in keeping with and is a valid exercise of their rights as the owner of their respective properties—i.e. there was no abuse of right as provided for in Article 21 of the New Civil Code and where the following requisites must concur: (1) defendant acted in a manner contrary to morals, good customs or public policy; (2) The acts should be willful and; (3) There was damage or injury to the plaintiff. None of these requisites was present in this case.

The loss was therefore not a result of a violation of a legal duty. Instances where the damage was not a result of an injury is called damnum absque injuria and the plaintiff is not normally given an award for damages.

In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria.

Theory: Junjun Binay and the Dasmariñas Gate Incident Shows a Disrespect for Property Rights

Grave abuse of discretion???  almost 700k views!!!

I originally planned to simply let this Junjun Binay gate incident pass without writing anything about it. I thought that much has already been said on the issue. Much discussion on the issue, most focusing Politicians and their sense of entitlement—and that politicians should set an example to the rest of the Filipinos.

On December 20, 2013, Blogger benign0 wrote that gated communities should not even be preventing people from coming in and out of their premises.

On December 27, 2013, Nicole Curato wrote on Rappler wrote that gated communities tend to increase the social divide and inequality in cities which should ideally be “Democratic Spaces”.

Thus, this incident has stuck. It remains provocative. Thus, I would like to contribute another angle, one that I feel has been left out: The property rights angle, public versus private.

Who exercises the rights of ownership in Dasmariñas Village?

Dasmariñas Village is a posh subdivision, it is privately owned. It is run by the DasmariñasVillage Association (DVA) a corporation whose membership is composed of real estate owners within the subdivision.  I presume that while the individual lots are owned by individual owners, the roads, walls and common spaces within the Village are owned by the DVA. Essentially, the Village is just one big piece of land owned by a corporation.

Under the law, a corporation has juridical personality much like that of an actual/natural person. The corporation acts through its board which promulgated certain rules and regulations. The rule that one may not exit a certain gate at a certain time is one such rule.  

The letter of commendation says it all: “Dasmariñas village is a private subdivision”

In this incident, it appears that the association has ratified the action of its Security Guards as its own. There can be no doubt and one can say that Dasmariñas Village had every intention to exclude any and all persons from using the passageway beginning 10PM. The acts of the Guards were the act of the Village.

Did the Mayor have the right to pass through the gate contrary to the village rules?

The Mayor has two aspects. The public and the private aspect. When he dons the visage of a public officer, he carries with him all the rights appurtenant to his office which include certain immunities and rights and privileges. For example, a public person [such as the Mayor in this case] if he takes advantage of his position in the commission of a crime, the courts will take such circumstance against him and makie his punishment stronger [Art. 14 (1) , Revised Penal Code]. The other side of the coin is that if a person using force or intimidation tries to prevent a public officer from doing his duty, he may be guilty of a crime called Direct Assault which carries a penalty of up to 6 years in prison (max) whereas if you tried the same stunt with a private person or a public officer who is acting in a private capacity, you may only be punished with up to 6 months in prison (max) [Art 148, 286, Revised Penal Code].

That night of the incident however, I want to claim that the Mayor was acting in a private capacity. This makes him an ordinary citizen. Why do I say this? He was attending what I presume to be a private party for the purpose of merriment, he did not appear to be doing anything official or important. He did not appear to be on his way to an important engagement or official business. There was no grave necessity for him to insist on that particular route. He has no right appurtenant to his duties.

For the purposes of this article, which is also my honest opinion, I believe that Junjun Binay was having a power trip. His exercise of authority was unwarranted, expecially since he was obviously acting in a private capacity. His reaction was clearly antagonistic as seen in the CCTV footage and his remedy was extraordinary and unreasonable—to summarily order theguard's arrest.

Did the village association have a right to enforce its rules within its property?

Yes. Since the property where the incident took place was private property, therefore pursuant to his right to possess (jus posidendi) and his right to exclude (jus vindicandi) as codified in Art. 429 of the New Civil Code which states:

The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.

The Village association clearly made its intention to exercise its jus posidendi and jus vindicandi in implementing the rule that no one may use the gate past a certain hour. The reason for its exercise is reasonable—for the security of Village homeowners; its means were reasonable—a simple metal gate pole and the posting of security personnel.

Courtesy owed to a public officer or public figure does not trump jus posidendi and jus vindicandi. There is no courtesy involved in Art. 429 of the New Civil Code. Only necessity and right to life will trump these property rights. Nowhere in the circumstances of the occurrence does it show that it was necessary for the good Mayor to pick that particular route.

Thus Binay could not just waltz around the village like he owns the place.

Conclusion

What I am saying is that our Constitution allows us to own property. It allows us to form corporations and other associations, such entities has the power to own property and to exercise the rights of ownership. The Dasmariñas Village Association clearly ratified its act of exercising its rights of ownership when it gave its letters of commendation to the Security Guards. Thus, the Village and its Agents (the guards) were clearly within their rights during the altercation.

Binay was in the wrong. He was clearly showing blurred judgement, misapprehension of facts and law. His was very shameless behavior.

Post Script

The blogger benign0 and Nicole Curato are correct in pointing out that there is a socio-political aspect in having gated communities in the Philippines. I don't see anything particularly wrong or illegal with their existence.