Lim vs CA Case Digest GR 124715 ; January 24, 2000 ; 323 SCRA 102

Lim vs CA Case Digest

 GR 124715 ; January 24, 2000 ; 323 SCRA 102

PRINCIPLE/S:

Special Proceedings

a) Jurisdiction over matters of probate

Jurisdiction over matters of probate depends upon the gross value of the estate of the decedent (Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980)

RTC:

Outside Metro Manila - Gross value of the estate exceeds One Hundred Thousand Pesos (P100,000)

Metro Manila - Gross value exceeds Two Hundred Thousand Pesos (P200,000)

MTC:

Outside Metro Manila - does not exceed One Hundred Thousand Pesos (P100,000) Metro Manila - does not exceed Two Hundred Thousand Pesos (P200,000)

b) Authority of the probate court over issues of ownership

General Rule: Probate court may provisionally pass upon title to certain properties for the purpose of determining whether a certain property should or should not be included in the inventory. This ruling of the probate court is subject to the final decision in a separate action to resolve title.

Reason: Regional Trial Court, acting as a probate court, exercises limited jurisdiction.

Exceptions:

1) The claimant and all other parties having legal interest in the property consent, expressly or impliedly, to the submission of the question to the probate court for adjudgment, or

2) The interests of third persons are not thereby prejudiced

Land Titles

a) Collateral attack on Torrens Title proscribed

P.D. 1529 (The Property Registration Decree) proscribes collateral attack on Torrens Title.

b) Presumptive conclusiveness of title

- If a property covered by Torrens title is involved, the presumptive conclusiveness of such title should be given due weight.

- The holder of the title should be considered as the owner of the property in controversy until his title is nullified or modified in an appropriate ordinary action or in the absence of strong compelling evidence to the contrary.

Corporation Law

a) Corporation has its own legal personality

A corporation is clothed with personality separate and distinct from that of the persons composing it. It may not generally be held liable for that of the persons composing it. It may not be held liable for the personal indebtedness of its stockholders or those of the entities connected with it. A corporation by legal fiction and convenience is an entity shielded by a protective mantle and imbued by law with a character alien to the persons comprising it.

b) When piercing the corporate veil doctrine is applicable

1) Corporation is just but the alter ego of a person or of another corporation.

2) Where badges of fraud exist.

3) Where public convenience is defeated.

4) Where a wrong is sought to be justified thereby.

c) Test in determining the applicability of the doctrine of piercing the veil of corporate fiction:

(1) Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own;

(2) Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiffs legal right; and

(3) The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.

NOTE: The absence of any of these elements prevent "piercing the corporate veil".

Evidence

a) Affidavits are hearsay evidence

Reasons:

- Not generally prepared by the affiant but by another who uses his own language in writing the affiant's statements, which may thus be either omitted or misunderstood by the one writing them.

- Adverse party is deprived of the opportunity to cross-examine the affiants.

b) How to make an affidavit admissible as evidence

The affiant themselves are placed on the witness stand to testify on the affidavits.

FACTS:  Pastor Lim died intestate. Petitioner, Pastor Lim’s surviving spouse, filed a joint petition for the administration of the estate of Pastor Lim before the RTC. Private respondents corporations, whose properties were included in the inventory of the estate of Pastor Lim, filed a motion for the lifting of lis pendens and motion for exclusion of certain properties from the estate of the decedent. RTC, as probate court, granted these 2 motions. Petitioner filed a verified amended petition. RTC acting on petitioner's motion issued an order directing the Registry of Deeds to reinstate the annotation of lis pendens. Probate court also issued an order denying private respondents' motion for exclusion.

Private respondent filed a special civil action for certiorari before the CA questioning the orders of the Regional Trial Court, sitting as a probate court. CA ruled in favor of herein private respondents. Petitioner files this instant petition praying that SC affirm the orders issued by the probate court which were subsequently set aside by the Court of Appeals.

ISSUE/S: WON the doctrine of piercing the veil of corporate entity is applicable to be able to include in the probate proceedings the company formed by deceased Pastor Lim, which are the respondent corporation.

HELD: NO since a corporation is clothed with personality separate and distinct from that of the persons composing it. It may not generally be held liable for that of the persons composing it. It may not be held liable for the personal indebtedness of its stockholders or those of the entities connected with it.

A corporation is invested by law with a personality distinct and separate from its stockholders or members. In the same vein, a corporation by legal fiction and convenience is an entity shielded by protective mantle and imbued with by law with a character alien to the persons comprising it.

Nonetheless, the shield is not at all times invincible. The corporate mask may be lifted and the corporate veil may be pierced when a corporation is just but the alter ego of a person or of another corporation. Where badges of fraud exist, where public convenience is defeated; where a wrong is sought to be justified thereby, the corporate fiction or the notion of the legal entity should come to naught. (Piercing the Corporate Veil Doctrine)

Further, the test in determining the applicability of the doctrine of piercing the veil of corporate fiction is as follows: 1.) Control, not merely the majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time so separate mind, will or existence of its own; 2.) Such control must have been used by the defendant to commit fraud on wrong to perpetuate the violation of a statutory or other positive legal duty, on dishonest and unjust act in contravention of plaintiffs legal right; and 3.) The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of. The absence of any of these elements prevent “piercing the corporate veil.”

Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate personalities. Moreover, to disregard the separate juridical personality of a corporation, the wrong doing must be clearly and convincingly established, it cannot be presumed.

Furthermore, granting arguendo that the RTC in this case was not merely acting in a limited capacity as a probate court, petitioner nonetheless failed to adduce competent evidence that would have justified the court to impale the veil of corporate fiction. The reliance reposed by petitioner on the affidavits executed by Lim and Wenceslao is unavailing considering that the aforementioned documents possess no weighty probative value pursuant to the hearsay rule.

Braza vs. City Civil Registrar of Himamaylan City Case Digest G.R. No. 181174 ; December 4, 2009

Braza vs. City Civil Registrar of Himamaylan City Case Digest 

G.R. No. 181174 ; December 4, 2009

PRINCIPLE/S:

Special Proceedings

a) Rule 108 of the Rules of Court (vis a vis Art. 412 of the Civil Code)

- It charts the procedure by which an entry in the civil registry may be cancelled or corrected. The proceeding contemplated therein may generally be used ONLY TO CORRECT CLERICAL, SPELLING, TYPOGRAPHICAL AND OTHER INNOCUOUS ERRORS IN THE CIVIL REGISTRY.

b) Clerical Error vs. Substantial Error

1. Clerical error

- One which is visible to the eyes or obvious to the understanding; an error made by a clerk or a transcriber; a mistake in copying or writing; or a harmless change such as a correction of name that is clearly misspelled or of a misstatement of the occupation of the parent.

- Allowed under Rule 108 of the Rules of Court

2. Substantial or contentious alterations - may be allowed only in adversarial proceedings, in which all interested parties are impleaded and due process is properly observed.

c) Rule 108 does not cover action to nullify marriages and rule on legitimacy and filiations.

In a special proceeding for correction of entry under Rule 108 (Cancellation or Correction of Entries in the Original Registry), the trial court has no jurisdiction to nullify marriages and rule on legitimacy and filiations.

Persons and Family Relations

a) Validity of marriages can only be impugned in a direct action

Validity of marriages as well as legitimacy and filiation can be questioned only in a direct action seasonably filed by the proper party, and not through collateral attack such as the petition filed before the court a quo.

FACTS: Petitioner Ma. Cristina Braza and Pablo Braza Jr. married in 1978. Pablo died. During the wake, respondent Lucille and her son, Patrick showed up and introduced themselves as the wife and son, respectively, of Pablo. Cristina made inquiries in the course of which she obtained Patrick’s birth certificate from the Local Civil Registrar which stated that: (1) Patrick has been acknowledged as the son of Pablo and, (2) Patrick was legitimated by virtue of the subsequent marriage of his parents. As a consequence of his legitimation, his name was changed to Patrick Alvin Titular Braza. Cristina likewise obtained a copy of a marriage contract showing that Pablo and Lucille were married in 1998.

Cristina and her co-petitioners filed before the RTC a petition to correct the entries in the birth certificate record of Patrick in the Local Civil Registry. They contended that Patrick could not have been legitimated by the supposed subsequent marriage between Lucille and Pablo because said marriage is bigamous on account of a valid and subsisting marriage between her (Cristina) and Pablo. Petitioner prayed for: (1) correction of Patrick’s use of the surname “BRAZA”; (2) to submit Patrick to DNA testing to determine his paternity and filiation; and  (3) the declaration of nullity of the legitimation of Patrick as stated in his birth certificate and, for this purpose, the declaration of the marriage between Lucille and Pablo as bigamous.

RTC dismissed the petition holding that in a special proceeding for correction of entry, the court, which is not acting as a family court under the Family Code, has no jurisdiction over an action to annul the marriage of Lucille and Pablo, impugn the legitimacy of Patrick, and order Patrick to be subjected to a DNA test, and that the controversy should be ventilated in an ordinary adversarial action. Petitioners then filed this instant petition for review.

ISSUE/S: WON a court pass upon the validity of marriage and questions on legitimacy in an action to correct entries in the civil registrar under Rule 108?

HELD: NO.  In a special proceeding for correction of entry under Rule 108 (Cancellation or Correction of Entries in the Original Registry), the trial court has no jurisdiction to nullify marriages and rule on legitimacy and filiations.

In relation to the instant case, the petitioners’ cause of action is actually to seek the declaration of Pablo and Lucille’s marriage as void for being bigamous and impugn Patrick’s legitimacy, which causes of action are governed not by Rule 108 but by A.M. No. 02-11-10-SC, and Art. 171 of the Family Code, respectively. Hence, the petition should be filed in a Family Court as expressly provided in said Code.

Furthermore, doctrinally, validity of marriages as well as legitimacy and filiation can be questioned only in a direct action seasonably filed by the proper party, and not through collateral attack such as the petition filed before the court a quo.

First Philippine International Bank vs CA Case Digest GR 115849 January 24, 1996 252 SCRA 259

First Philippine International Bank vs. CA Case Digest

GR 115849 ; January 24, 1996 ; 252 SCRA 259

DOCTRINE/S:

Conflict of Laws

a)Principle of forum non conveniens - provides that a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from seeking remedies elsewhere.

Corporation Law

a) Essence of a derivative suit:

An individual stockholder is permitted to institute a derivative suit on behalf of the corporation wherein he holds stock in order to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue, or are the ones to be sued or hold the control of the corporation. In such actions, the suing stockholder is regarded as a nominal party, with the corporation as the real party in interest. (Gamboa v. Victoriano, 90 SCRA 40, 47 [1979]; emphasis supplied).

Remedial Law

a) Meaning of Forum Shoppng

Forum-shopping – exist whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another.

b) Elements of Forum shopping

Forum shopping exists where the elements of litis pendentia are present namely:

(1) Identity of parties, or at least such parties as represent the same interests in both actions,

(2) Identity of rights asserted and relief prayed for,

(3) The relief being founded on the same facts, 

(4) Identity on the two preceding particulars is such that any judgment rendered in the other action, will, regardless of which party is successful, amount to res adjudicata in the action under consideration.

c) Petition for review under Rule 45 of the Rules of Court

GR: Supreme Court can only review question of law)

Exceptions (Instances questions of fact can be reviewed by the SC):

finding grounded entirely on speculation, surmises or conjectures; when the inference made is manifestly absurd, mistaken or impossible; when there is grave abuse of discretion in the appreciation of facts; when the judgment is premised on a misapprehension of facts; when the findings went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee (Chua Tiong Tay vs. Court of Appeals and Goldrock Construction and Development Corp).

Sales

a) Requisites of a valid and perfected contract (Article 1318 of the Civil Code):

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;

(3) Cause of the obligation which is established.

Banking Law

a) Doctrine of "apparent authority"(with special reference to banks)

- A bank is liable for wrongful acts of its officers done in the interests of the bank or in the course of dealings of the officers in their representative capacity but not for acts outside the scope of their authority

Reason: Banks have a fiduciary relationship with the public and their stability depends on the confidence of the people in their honesty and efficiency. Such faith will be eroded where banks do not exercise strict care in the selection and supervision of its employees, resulting in prejudice to their depositors.

FACTS: The Bank has been under conservatorship since 1984. It is the owner of 6 parcels of land. The Bank had an agreement with Demetria to purchase the parcels of land. The said agreement was made by Demetria with the Bank’s manager, Rivera. Thereafter, they had a series of letters consisting of offers, counter-offers and acceptance of the counter- offer by Demetria. Later however, the Bank, through its conservator, Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized to enter into such an agreement. Hence there was no valid contract of sale. Subsequently, Demetria sued the Bank. The RTC ruled in favor of Demetria. The Bank filed an appeal with the Court of Appeals.

Meanwhile, Henry Co, who holds 80% shares of stocks with the said Bank, filed a motion for intervention with the trial court which was denied since the trial has been concluded already and the case is now pending appeal. Subsequently, Henry Co, filed a separate civil case against Ejercito as successor-in-interest (assignee) of Demetria seeking to have the purported contract of sale be declared unenforceable against the Bank. Ejercito argued that the second case constitutes forum shopping since it was barred by litis pendentia by virtue of the case then pending in the Court of Appeals. But petitioners explain that there is no forum-shopping because in the “First Case” from which this proceeding arose, the Bank was impleaded as a defendant, whereas in the “Second Case” it was the plaintiff.

The Bank also argued the following: (1) that there contract of sale was not yet perfected since it lacks cosent since the Bank did not make a counter-offer; (2) that the contract is unenforceable since there is no note, memorandum or writing subscribed by the Bank to evidence such contract; (3) that the conservator has the power to revoke or overrule actions of the management or the board of directors of a bank under Section 28-A of Republic Act No. 265 hence the conservator can revoke the said contract between the Bank and Demetria; and (4) that respondent Court's Decision as "fraught with findings and conclusions which were not only contrary to the evidence on record but have no bases at all" hence questions of fact must be reviewed by SC.

ISSUE/S: 

1) WON there is forum shopping.

2) WON there was a perfected contract.

3) WON the contract is enforceable

4) WON the conservator may revoke a perfected and enforceable contract.

5) WON SC should review questions of fact

HELD: 

1) YES. Forum-shopping is whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. Forum shopping exists where the elements of litis pendentia are present namely: (1) identity of parties, or at least such parties as represent the same interests in both actions, as well as (2) identity of rights asserted and relief prayed for, (3) the relief being founded on the same facts, and the (4) identity on the two preceding particulars is such that any judgment rendered in the other action, will, regardless of which party is successful, amount to res adjudicata in the action under consideration.

In the instant case, there is forum shopping because there exist identity of parties or interests represented, identity of rights or causes and identity of reliefs sought between the first case and the second case. There is identity of parties even though the first case is in the name of the bank as defendant, and the second case is in the name of Henry Co as plaintiff since the rule applies even if the the defendant in the first case becomes the plaintiff in the second case. Furthermore, allegations of the complaint in the Second Case show that the stockholders are bringing a "derivative suit". Being a derivative suit would mean that Henry Co in filing the case is really representing the Bank. So, whether they sued "derivatively" or directly, there is undeniably an identity of interests/entity represented. There is also identity of relief being sought since both cases seeks to enable the petitioner Bank to escape from the obligation to sell the property to respondent.

2) YES. Article 1318 of the Civil Code enumerates the requisites of a valid and perfected contract as follows: "(1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established."

           

In this case, there is consent since there was meeting of the minds between the parties as shown by the fact that the bank made a counter-offer after the Demetria made an offer to them. This counter-offer was accepted by Demetria. The object of the subject contract is the 6 parcels of land. The cause of the obligation for the petitioner bank is the Php 5.5M that Demetria will pay for the land while the cause of the obligation for Demetria is the capacity to own the subject land.

3)  YES.  A contract of sale is binding in whatever form it may have been entered into. Hence, the letters constitute sufficient memoranda — since they include the names of the parties, the terms and conditions of the contract, the price and a description of the property as the object of the contract.

4) NO. Section 28-A of Republic Act No. 265 (otherwise known as the Central Bank Act) merely gives the conservator power to revoke contracts that are, under existing law, deemed to be defective — i.e., void, voidable, unenforceable or rescissible. The contract in this case is a calid one. Hence he cannot simply repudiate valid obligations of the Bank.

Furthermore, the conservator’s powers must be related to the "(preservation of) the assets of the bank, (the reorganization of) the management thereof and (the restoration of) its viability." Such powers cannot extend to the post-facto repudiation of perfected transactions, otherwise they would infringe against the non-impairment clause of the Constitution. Hence, the conservator must exercise his powers without violating the non-impariment clause in the constitution. If the conservator in this case would revoke the valid contract between the Bank and Demetria then such act of the conservator would consist as a violation of the non-impairment clause in the Constitution.

5) NO. The general rule is that the Supreme Court can only review questions of law. This is provided under Rule 45 of the Rules of Court. The exceptions to this rule are as follows: finding grounded entirely on speculation, surmises or conjectures; when the inference made is manifestly absurd, mistaken or impossible; when there is grave abuse of discretion in the appreciation of facts; when the judgment is premised on a misapprehension of facts; when the findings went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee.

In the instant case, it is quite evident that the legal conclusions arrived at from the findings of fact by the lower courts are valid and correct. Hence this Court cannot disturb these findings to fit the conclusion the peititoner Bank is espousing.

Corpuz vs. Sto. Tomas Case Digest G.R. No. 186571 ; August 11, 2010

Corpuz vs. Sto. Tomas Case Digest 

G.R. No. 186571 ; August 11, 2010

PRINCIPLE/S:

Special Proceedings

a) Jurisdictional and procedural requirements before a judgment, authorizing the cancellation or correction, may be annotated in the civil registry (Rule 108 of the Rules of Court)

- Verified petition must be filed with the RTC of the province where the corresponding civil registry is located;

- Civil registrar and all persons who have or claim any interest must be made parties to the proceedings

- Time and place for hearing must be published in a newspaper of general circulation.

Conflict of Laws

a) Rule on recognition of a foreign divorce judgment

- Our courts do not take judicial notice of foreign judgments and laws

b) How foreign divorce judgment is recognized in the Philippines

- Foreign judgment and its authenticity must be proven as facts under our rules on evidence, together with the alien’s applicable national law to show the effect of the judgment on the alien himself or herself. (Republic v. Orbecido III, supra note 10 at 123 and Garcia v. Recio, supra note 17 at 448; see also Bayot v. Court of Appeals, G.R. No. 155635, November 7, 2008, 570 SCRA 472.)

            - Foreign judgment must be ALLEGED and PROVED

c) How to ALLEGE and PROVE foreign judgment (Section 24, Rule 132 of the Rules of Court)

Proof either by:

(1) official publications OR

(2) copies attested by the officer having legal custody of the documents.

If the copies of official records are not kept in the Philippines, these must be:

(a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept AND

(b) authenticated by the seal of his office.

d) Registration of the foreign divorce decree should be done with judicial recognition of the foreign judgment

Article 407 of the Civil Code requires the entry in the civil registry of judicial decrees that produce legal consequences touching upon a person’s legal capacity and status. But while the law requires the entry of the divorce decree in the civil registry, the law and the submission of the decree by themselves do not ipso facto authorize the decree’s registration. The law should be read in relation with the requirement of a judicial recognition of the foreign judgment before it can be given res judicata effect.

Persons and Family Relations

a) Second paragraph of Article 26 of the Family Code cam only be claimed by a Filipino citizen

The alien spouse can claim no right under the second paragraph of Article 26 of the Family Code as the substantive right it establishes is in favor of the Filipino spouse

b) Two types of defective marriages recognized under the Family Code

- void marriages

- voidable marriages

c) Void and voidable marriages vs. Divorce

Void and voidable marriages - Dissolution of the lawful union is based on a cause existing before or at the time of the marriage

Divorce- Dissolution of the lawful union is based on a cause arising after the marriage

d) Philippines does not recognize absolute divorce; exception

GR: Article 17 of the Civil Code provides that the policy against absolute divorces cannot be subverted by judgments promulgated in a foreign country.

Exception: Second paragraph in Article 26 of the Family Code recognizes the dissolution of the marriage between the Filipino spouse and his or her alien spouse.

e) Effect of 2nd par. of Article 26 of the Family Code

- Recognition of the foreign divorce decree

- Declare that the Filipino spouse is capacitated to contract another marriage if the court finds that the foreign divorce decree capacitated the alien spouse to remarry.

f) Intent for enactment of 2nd par. of Article 26 of the Family Code

"to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse."

FACTS: Petitioner Corpuz was a former Filipino citizen who acquired Canadian citizenship through naturalization. He married a Filipina. He later filed a petition for divorce for his first wife since he discovered that she was having an affair. This was granted. Two years after the divorce, Gerbert found another Filipina to love. He desired to marry her. So he registered the Canadian divorce decree in the Civil Registry Office. But he was informed that despite the registration of the divorce decree the marriage between him and his first wife still subsists under Philippine law and for the divorce decree to be enforceable, it must first be judicially recognized by a competent Philippine court.

Petitioner then filed for judicial recognition of foreign divorce and declaration of marriage as dissolved with the RTC. The RTC denied the petition on the basis that the petitioner lacked locus standi. Thus, petitioner directly appeals to the Supreme Court via a petition for review on certiorari under Rule 45 of the Rules of Court.

ISSUE/S:

1) WON the 2nd paragraph of Art 26 of the FC extends to aliens the right to petition a court of this jurisdiction for the recognition of a foreign divorce decree.

2) WON Civil Registry Office acted out of line in registering the foreign decree of divorce.

HELD: 

1) NO. Only a Filipino spouse can avail of the remedy under the 2nd paragraph of Article 26 of the Family Code because the substantive right it establishes is in favour of the Filipino spouse.  Hence, only the Filipino spouse can invoke the 2nd paragraph of Art 26 of the Family Code.

However, the unavailability of the 2nd paragraph of Art 26 of the Family Code to aliens does not necessarily strip the petitioner of legal interest to petition the RTC for the recognition of his foreign divorce decree. The petitioner, being a naturalized Canadian citizen now, is clothed by the presumptive evidence of the authenticity of foreign divorce decree with conformity to alien’s national law.

2) YES. Article 407 of the Civil Code requires the entry in the civil registry of judicial decrees that produce legal consequences touching upon a person’s legal capacity and status. But while the law requires the entry of the divorce decree in the civil registry, the law and the submission of the decree by themselves do not ipso facto authorize the decree’s registration. The law should be read in relation with the requirement of a judicial recognition of the foreign judgment before it can be given res judicata effect.

In the context of the present case, no judicial order as yet exists recognizing the foreign divorce decree. Hence, the Civil Registry acted out of line when it registered the foreign decree of divorce on the petitioner and respondent’s marriage certificate without judicial order recognizing the said decree.  The registration of the foreign divorce decree without the requisite judicial recognition is patently void and cannot produce any legal effect.