Civil_Code__Volume_IV__Obligations___Contracts_ - CIVIL CODE OF THE PHILIPPINES TITLE V \u2014 PRESCRIPTION Chapter 1 GENERAL PROVISIONS Article 1106 By

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Unformatted text preview: CIVIL CODE OF THE PHILIPPINES TITLE V. — PRESCRIPTION Chapter 1 GENERAL PROVISIONS Article 1106. By prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law. In the same way, rights and actions are lost by prescription. COMMENT: (1) Definition of Prescription Prescription is a mode of acquiring (or losing) ownership and other real rights thru the lapse of time in the manner and under the conditions laid down by law, namely, that the possession should be: (a) in the concept of an owner (b) public (c) peaceful (d) uninterrupted. (Arts. 1106, 1118, Civil Code). (e) adverse. In order that a possession may really be adverse, the claimant must clearly, definitely, and unequivocally notify the owner of his (the claimant’s) intention to avert an exclusive ownership in himself. (Clendenin v. Clendenin, 181 N.C. 465 and Director of Lands v. Abiertas, CA-GR 91-R, Mar. 13, 1947, 44 O.G. 923). 1 Art. 1106 CIVIL CODE OF THE PHILIPPINES (2) Proof Needed Because prescription is an extraordinary mode of acquiring ownership, all the essential ingredients, particularly the period of time, must be shown clearly. (Boyo v. Makabenta, CA-GR 7941-R, Nov. 24, 1952). (3) Reasons or Bases for Prescription (a) Economic necessity (otherwise, property rights would remain unstable). Director of Lands, et al. v. Funtillar, et al. GR 68533, May 23, 1986 FACTS: Where the land sought to be registered was declared alienable and disposable 33 years ago, and is no longer a forest land, and the same has been possessed and cultivated by the applicants and their predecessors for at least three generations. HELD: The attempts of humble people to have disposable lands they have been tilling for generations titled in their names should not only be viewed with an understanding attitude but should, as a matter of policy, be encouraged. (b) Freedom from judicial harassment (occasioned by claims without basis). (c) Convenience in procedural matters (in certain instances, juridical proof is dispensed with). (d) Presumed abandonment or waiver (in view of the owner’s indifference or inaction). (4) Classification of Prescription (a) as to whether rights are acquired or lost: 1) acquisitive prescription (prescription of ownership and other real rights). a) ordinary prescription b) extraordinary prescription 2 CIVIL CODE OF THE PHILIPPINES 2) (b) Art. 1106 extinctive prescription (“liberatory prescription;’’ prescription of actions); (“Statute of Limitations’’). as to the object or subject matter: 1) 2) prescription of property a) prescription of real property b) prescription of personal rights prescription of rights (5) Laches Laches (or “estoppel by laches”) is unreasonable delay in the bringing of a cause of action before the courts of justice. Thus, if an action prescribes say in ten (10) years, it should be brought to court as soon as possible, without waiting for 8 or 9 years, unless the delay can be justifiably explained (as when there is a search for evidence). Note therefore, that while an action has not yet prescribed, it may no longer be brought to court because of laches. As defined by the Supreme Court, “laches is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled thereto either has abandoned it or declined to assert it. However, courts will not be bound by strictures of the statute of limitations or laches when manifest wrong or injuries would result thereby.” (Cristobal v. Melchor, 78 SCRA 175). Arradaza, et al. v. CA & Larrazabal GR 50422, Feb. 8, 1989 The principle of laches is a creation of equity. It is applied, not really to penalize neglect or sleeping upon one’s right, but rather to avoid recognizing a right when to do so would result in a clearly inequitable situation. (6) Rationale for Laches If a person fails to act as soon as possible in vindication of an alleged right, it is possible that the right does not really exist. 3 Art. 1106 CIVIL CODE OF THE PHILIPPINES (7) ‘Prescription’ Distinguished from ‘Laches’ Mapa III v. Guanzon 77 SCRA 387 While prescription is concerned with the FACT of delay, laches deals with the EFFECT of unreasonable delay. David v. Bandin GR 48322, Apr. 8, 1987 FACTS: A and B, husband and wife, died intestate, leaving two children, X and Y. X had been administering the property until her death in Feb. 15, 1955. Plaintiffs, the children of Y, were given their shares of the fruits of the property, though irregular and at times little, depending on the amount of the harvest. On April 23, 1963, plaintiffs, the children of Y, sent a letter of demand to the heirs of X for partition, and on June 14, 1963, or within a period of approximately 8 years from X’s death, filed their complaint against X’s heirs. HELD: Plaintiffs cannot be held guilty of laches, nor is their claim barred by prescription. Plaintiffs were not guilty of negligence nor did they sleep on their rights. Prescription generally does not run in favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the coownership. While implied or constructive trust prescribes in 10 years, the rule does not apply where a fiduciary relation exists and the trustee recognizes the trust. Gallardo v. Intermediate Appellate Court GR 67742, Oct. 29, 1987 In determining whether a delay in seeking to enforce a right constitutes laches, the existence of a confidential relationship between the parties is an important circumstance for consideration. A delay under such circumstance is not as strictly regarded as where the parties are strangers to each other. The doctrine of laches is not strictly applied between near relatives, and the fact that parties are connected by ties of blood or marriage tends to excuse an otherwise unreasonable delay. 4 CIVIL CODE OF THE PHILIPPINES Art. 1106 Narciso Buenaventura & Maria Buenaventura v. CA & Manotok Realty, Inc. GR 50837, Dec. 28, 1992 The defense of laches applies independently of prescription. Laches is different from the statute of limitations. Prescription is concerned with the fact of delay, whereas laches is concerned with the effect of delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this inequity being founded on the same change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription applies at law. Prescription is based on fixed time; laches is not. (8) Constitutional Provision The right of the State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees, shall not be barred by prescription, laches, or estoppel. (Sec. 15, Art. XI, The 1987 Philippine Constitution). (9) Cases Republic v. Animas 56 SCRA 871 Prescription does not run against the State, especially because the recovery of unlawfully acquired properties has become a State policy. Aldovino v. Alunan III 49 SCAD 340 (1994) Prescription must yield to the higher interest of justice. Francisco v. CA 122 SCRA 538 Philippine jurisprudence shows that the filing of the complaint, even if merely for purposes of preliminary examination 5 Art. 1106 CIVIL CODE OF THE PHILIPPINES or investigation, suspends and interrupts the running of the prescriptive period. (10) Prescriptive Period on Registered Land covered by Torrens System Quirino Mateo & Matias v. Dorotea Diaz, et al. GR 137305, Jan. 17, 2002 FACTS: The land involved is registered under the Torrens system in the name of petitioners’ father Claro Mateo. There is no question raised with respect to the validity of the title. Immediately after petitioners discovered the existence of OCT 206 in 1977 or 1978, they took steps to assert their rights thereto. They divided the land between the two of them in an extrajudicial partition. Then petitioners filed the case below to recover ownership and possession as the only surviving children of original owners, the late Claro Mateo. The Regional Trial Court (RTC), Bulacan, at Malolos, ruled that prescription and laches are applicable against petitioners, that real actions over an immovable prescribe after 30 years, that ownership can be acquired thru possession in good faith and with just title for a period of 10 years, and that ownership may be acquired thru uninterrupted adverse possession for 30 years without need of just title or of good faith. The Court of Appeals (CA) affirmed that of the trial court, thus, this petition for review on certiorari. ISSUE: Whether or not the equitable doctrine of laches may override a provision of the Land Registration Act on imprescriptibility of title to registered land. Otherwise put, the issue raised is whether prescription and the equitable principle of laches are applicable in derogation of the title of the registered owner. HELD: A party who had filed immediately a case as soon as he discovered that the land in question was covered by a transfer certificate in the name of another person is not guilty of laches. (St. Peter Memorial Park, Inc. v. Cleofas, 92 SCRA 389 [1979]). An action to recover possession of a registered land never prescribe in view of the provision of Sec. 44 of Act 496 (now 6 CIVIL CODE OF THE PHILIPPINES Art. 1106 Sec. 47 of PD 1529) to the effect that no title to registered land in derogation to that of a registered owner shall be acquired by prescription or adverse possession. (J.M. Tuason & Co. v. Aquirre, 7 SCRA 109 [1963]). In fact, there is a host of jurisprudence that hold that prescription and laches could not apply to registered land covered by the Torrens system. (Bishop v. CA, 208 SCRA 636 [1992] and St. Peter Memorial Park, Inc. v. Cleofas, supra). With more reason are these principles applicable to laches, which is an equitable principle. Laches may not prevail against a specific provision of law, since equity, which has been defined as “justice outside legality” is applied in the obscene of and not against statutory law or rules of procedure. (Causapin v. CA, 233 SCRA 615 [1994]). Upon the other hand, the heirs of the registered owner are not estopped from claiming their father’s property, since they merely stepped into the shoes of the previous owners. Prescription is unavailing not only against the registered owner, but also against his hereditary successors because the latter merely step into the shoes of the decedent by operation of law and are merely the continuation of the personality of their predecessorin-interest. (Teofila de Guinoo v. CA [97 Phil. 235] and Gil Atun v. Eusebio Nuñez [97 Phil. 762]). The CA erred in ordering the Register of Deeds to cancel OCT 206 of Claro Mateo and issue new titles to those who are occupying the subject land. This violates the indefeasibility of a Torrens title. The title of Claro Mateo could be cancelled only if there is competent proof that he had transferred his rights over the parcel of land to another party, otherwise title would pass to his heirs only by testate or intestate succession. The fallo: The Supreme Court thereupon reverses the CA’s decision. In lieu thereof, the Court remands the case to the trial court for determination of the heirs of Claro Mateo in a proper proceeding. Far East Bank & Trust Co. v. Estrella O. Querimit GR 148582, Jan. 16, 2002 FACTS: Respondent deposited her savings with petitionerbank. She did not withdraw her deposit even after maturity date 7 Art. 1106 CIVIL CODE OF THE PHILIPPINES of the certificates of deposit (CDs) precisely because she wanted to set it aside for her retirement, relying on the bank’s assurance, as reflected on the face of the instruments themselves, that interest would “accrue” or accumulate annually even after their maturity. Petitioner-bank failed to prove that it had already paid respondent, bearer and lawful holder of subject CDs, i.e., petitioner failed to prove that the CDs had been paid out of its funds, since evidence by respondent stands unrebutted that subject CDs until now remain unindorsed, undelivered, and unwithdrawn by her. ISSUE: Would it be unjust to allow the doctrine of laches to defeat the right of respondent to recover her savings which she deposited with the petitioner? HELD: Yes, it would be unjust not to allow respondent to recover her savings which she deposited with petitioner-bank. For one, Petitioner failed to exercise that degree of diligence required by the nature of its business. (Art. 1173). Because the business of banks is impressed with public interest, the degree of diligence required of banks is more than that of a good father of the family or of an ordinary business firm. The fiduciary nature of their relationship with their depositors requires banks to treat accounts of their clients with the highest degree of care. (Canlas v. CA, 326 SCRA 415 [2000]). A bank is under obligation to treat accounts of its depositors with meticulous care whether such accounts consist only of a few hundred pesos or of millions of pesos. Responsibility arising from negligence in the performance of every kind of obligation is demandable. (Prudential Bank v. CA, 328 SCRA 264 [2000]). Petitioner failed to prove payment of the subject CDs issued to respondent and, therefore, remains liable for the value of the dollar deposits indicated thereon with accrued interest. A certificate of deposit is defined as a written acknowledgment by a bank or banker of the receipt of a sum of money on deposit which the bank or banker promises to pay to the depositor, to the order of the depositor, or to some other person or his order, whereby the relation of debtor and creditor between the bank and the depositor is created. Principles governing other 8 CIVIL CODE OF THE PHILIPPINES Art. 1106 types of bank deposits are applicable to CDs (10 AM Juri 2d Sec. 455), as are the rules governing promissory notes when they contain an unconditional promise to pay a sum certain of money absolutely. (Ibid., Sec. 457). The principle that payment, in order to discharge a debt, must be made to someone authorized to receive it is applicable to the payment of CDs. Thus, a bank will be protected in making payment to the holder a certificate indorsed by the payee, unless it has notice of the invalidity of the indorsement or the holder’s want of title. (10 Am Jur 2d Sec. 461). A bank acts at its peril when it pays deposits evidenced by a CD, without its production and surrender after proper indorsement. (Clark v. Young, 21 So. 2d 331 [1994]). The equitable principle of laches is not sufficient to defeat the rights of respondent over the subject CDs. Laches is the failure or neglect, for an unreasonable length of time, to do that which, by exercising due diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. (Felizardo v. Fernandez, GR 137509, Aug. 15, 2001). There is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances. The question of laches is addressed to the sound discretion of the court and, being an equitable doctrine, its application is controlled by equitable considerations. It cannot be used to defeat justice or perpetrate fraud and injustice. Courts will not be guided or bound strictly by the Statute of Limitations or the doctrine of laches when to do so manifest wrong or injustice would result. (Rosales v. CA, GR 137566, Feb. 28, 2001). Respondent is entitled to moral damages because of the mental anguish and humiliation she suffered as a result of the wrongly refusal of petitioner to pay her even after she had delivered the CDs. (Arts. 2217 and 2219). In addition, petitioner should pay respondent exemplary damages which the trial court imposed by way of example or correction for the public good (Art. 2229). Finally, respondent is entitled to attorney’s fees since petitioner’s act or omission compelled her to incur expenses to 9 Art. 1106 CIVIL CODE OF THE PHILIPPINES protect her interest making such award just and equitable. (Art. 2208). Development Bank of the Phils. v. CA & Carlos Cajes GR 129471, Apr. 28, 2000 FACTS: Petitioner filed an ejectment suit against private respondent, claiming ownership of a parcel of land covered by a TCT, which included the 19.4 hectares being occupied by the latter. The trial court declared petitioner to be the owner of the land, but the Court of Appeals (CA) reversed the trial court. On appeal, petitioner claimed that its predecessor-in-interest had become the owner of the land by virtue of the decree of registration in his name. The Supreme Court affirmed the CA. HELD: Taking into consideration the possession of his predecessor-in-interest, private respondent had been in uninterrupted adverse possession of the land for more than 30 years prior to the decree of registration issued in favor of petitioner’s predecessor-in-interest. Such possession ripened into ownership of the land thru acquisitive prescription, a mode of acquiring ownership and other real rights over immovable property. A decree of registration cut off or extinguished a right acquired by a person only when such right refers to a lien or encumbrance on the land which was not annotated on the certificate of title issued thereon, but not to the right of ownership thereof. Registration of land does not create a title nor vest one. Accordingly, the 19.4 hectares of land being occupied by private respondent must be reconveyed in his favor. (11) Presumptive Period re Ill-Gotten Wealth or ‘Behest’ Loans Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Aniano A. Desierto (Recovery of Ill-Gotten Wealth) GR 130340, Oct. 25, 1999 114 SCAD 707 Behest loans, which are part of the ill-gotten wealth which former President Ferdinand E. Marcos and his cronies accumulated and which the Government thru the Presidential 10 CIVIL CODE OF THE PHILIPPINES Art. 1107 Commission on Good Government (PCGG) seeks to recover, have a prescriptive period to be counted from the discovery of the crimes charged, and not from the date of their commission. If the commission of the crime is known, the prescriptive period shall commence to run on the day it was committed. The prosecution of offenses arising from, relating or incident to, or involving ill-gotten wealth contemplated in Sec. 15, Art. XI of the Philippine Constitution of 1987 may be barred by prescription. Said provision applies only in civil actions for recovery of ill-gotten wealth, and not to criminal cases. Art. 1107. Persons who are capable of acquiring property or rights by the other legal modes may acquire the same by means of prescription. Minors and other incapacitated persons may acquire property or rights by prescription, either personally or through their parents, guardians or legal representatives. COMMENT: (1) Who May Acquire Property or Rights by Prescription (a) those who can make use of the other modes of acquiring ownership. (b) even minors and other incapacitated persons (like the insane). (2) Reason for Par. 1 (Those Capable of Acquiring Property or Rights Thru the Other Modes) Since prescription is also a mode of acquiring ownership, it follows that if a person is capable of becoming an owner by the other legal modes, he should also be capable of acquiring the same property by prescription. Thus, if a person can become an owner by donation, he can also become an owner by prescription. (3) Query (Re Donation by Paramour) A husband cannot validly receive a donation from a paramour. Now then, can he acquire by prescription the property donated ...
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