SPOUSES ALEJANDRO MANZANILLA AND REMEDIOS VELASCO VS.

WATERFIELDS
INDUSTRIES CORPORATION G.R. No. 177484, July 18, 2014
Facts: The spouses Manzanilla are the owners of a 25,000-square meter parcel of land in
Barangay San Miguel, Sto. Tomas, Batangas. On May 24, 1994, they leased a 6,000-square
meter portion to Waterfields. The parties executed on June 6, 1994 an Amendment to the
Contract of Lease. Beginning April 1997, however, Waterfields failed to pay the monthly rental.
Hence, Ma sent the spouses Manzanilla a letter promising to pay the unpaid rentals, due to
lessees failure to comply with their obligation, spouses Manzanilla filed before the MTC a
Complaint for Ejectment against Waterfields. MTC declared that Waterfields violated the lease
agreement due to non-payment of rentals. The case was elevated to the RTC where the latter
affirmed the decision made by the MTC, however the CA reversed the decision that the contract
of lease was already terminated because of the stipulation contained in their amended contract of
lease which provides; The deposit stipulated in our lease contract shall be used exclusively for
the payment of unpaid utilities, if any, and other incidental expenses only and applied at the
termination of the lease, hence this petition for review on certiorari

Issue: Whether or not the CA was correct in dismissing the action for unlawful detainer

Held: No, the court enunciated that for the purpose of bringing an unlawful detainer suit, two
requisites must concur: (1) there must be failure to pay rent or comply with the conditions of the
lease, and (2) there must be demand both to pay or to comply and vacate. The first requisite
refers to the existence of the cause of action for unlawful detainer, while the second refers to the
jurisdictional requirement of demand in order that said cause of action may be pursued. Implied
in the first requisite, which is needed to establish the cause of action of the plaintiff in an
unlawful detainer suit, is the presentation of the contract of lease entered into by the plaintiff and
the defendant, the same being needed to establish the lease conditions alleged to have been
violated. Thus, in Bachrach Corporation v. Court of Appeals, the Court held that the evidence
needed to establish the cause of action in an unlawful detainer case is (1) a lease contract and (2)
the violation of that lease by the defendant. Here, there is no issue with respect to demand. What
is in question is the presence of a cause of action. As mentioned above, courts, in order to
ascertain whether there is cause of action for unlawful detainer, must inquire into (a) the
existence of the lease contract and, (b) the violation of that lease by the lessee. Since in this case
the existence of a lease contract between the parties is undisputed, the focus is on the supposed
violation of the lease, that is, Waterfields’ alleged non-payment of rent which amounts to the
violation of the contract of lease. Thus, the decision of the MTC is reinstated and affirmed.

PEOPLE OF THE PHILIPPINES VS. AMADO V. HERNANDEZ

Facts: Amado Hernandez and other appellants were accused of conspiring, confederating and
cooperating with each other, as well as with the thirty-one defendants charged in the criminal
cases of the CIF of Manila. They were accused of being members of PKP Community Party of
the Philippines. They committed together with the HUKBALAHAP, the crime of rebellion
causing murder, pillage, looting plunder, etc.
Issue: Whether the Defendant-Appellant is guilty of the crimes in relation to Rebellion for being
a member or sympathizer of the Communist Party of the Philippines.

Held: No, in view of all the above circumstances the court find that there is no concrete
evidence proving beyond reasonable doubt that the appellant (Hernandez) actually participated in
the rebellion or in any act of conspiracy to commit or foster the cause of the rebellion. The court
absolves the appellant from the crime charged. the mere fact of his giving and rendering
speeches favoring Communism would not make him guilty of conspiracy, because there was no
evidence that the hearers of his speeches of propaganda then and there agreed to rise up in arms
for the purpose of obtaining the overthrow of the democratic government as envisaged by the
principles of Communism.

GREGORIO SILOT, JR. vs. ESTRELLA DE LA ROSA

Facts: Petitioner Silot and respondent de la Rosa entered into a contract for the construction of a
dormitory-apartment building. They expressly agreed that Silot shall supply the labor and de la
Rosa shall pay 33% of the total value of the materials purchased for the project. Upon turnover
of the completed structure, the total cost of materials actually purchased was P2,504,469.65, 33%
of which is P826,474.98. Silot required de la Rosa to pay a total of P1,018,000.00, or
P191,525.02 more than the amount due. Through her son-in-law, de la Rosa confronted Silot
about the overpayment but the latter refused to return the overpayment. After her repeated
demands fell on deaf ears, de la Rosa filed a suit against Silot. Silot, in retaliation, sued de la
Rosa for insufficient payment, claiming that he was supposed to receive P1,281,872.404 but was
only paid P1,008,000.00, thus still leaving a balance of P273,872.40.
During trial, however, Atty. San Jose, counsel for Silot, dispensed with the testimony of
Ariel Goingo, a witness for de la Rosa. Atty. San Jose admitted Goingo's proposed testimony to
the effect that in consideration of the 33% as mentioned in the contract, all the material supplies
during the making of the additional works mentioned were already accounted for; that Silot was
paid for all works that were performed as well as all materials supplied; that the total sum was
P2,504,469.65, so that 33% of which is only P826,474.98; that de la Rosa paid the amount of
P1,018,000.00; hence, there was an excess payment of P191,525.02; and that de la Rosa never
received any demand from nor was she confronted by Silot regarding an alleged balance.
Consequently, after trial, the RTC ruled in favor of de la Rosa and ordered Silot to return the
overpaid amount. On appeal, the Court of Appeals affirmed the decision of the lower court.
Issue: Whether the admission by Atty. San Jose, counsel of petitioner Silot, constituted judicial
admission of respondent's evidence.
Held: Yes. Moreover, well-entrenched is the rule that the client is bound by the mistakes arising
from negligence of his own counsel. The only exception to this rule is, as the Court of Appeals
itself cited in its decision, when the negligence is so gross that the client is deprived of his day in
court.
The exception does not find any application in this case. As the records would plainly
show, Silot was not deprived of his day in court. Also, as the appellate court observed, he could
have introduced evidence, testimonial or otherwise, in order to controvert or correct the
admission made by his counsel. Said the appellate court:
As gleaned from the records, defendant-appellant Silot was not deprived of his day in
court. He was given every opportunity to be heard through his pleadings and manifestations. He
was also presented in open court to testify. As quoted earlier, Atty. Terbio, counsel for plaintiff-
appellee de la Rosa, even repeatedly asked Atty. San Jose, defendant-appellant Silot's counsel, if
he would admit the purpose for which the witness Ariel Goingo will testify to dispense with his
testimony, and Atty. San Jose repeatedly answered that "We will admit that." And when asked
by the judge if he will admit it, he answered that they will admit P2,504,000.00.
More importantly, Silot's counsel clearly made admissions of the content of the testimony
of witness Goingo, whose presentation was dispensed with. In People v. Hernandez, we held that
admissions made for the purpose of dispensing with proof of some facts are in the nature of
judicial admissions, to wit:
A stipulation of facts entered into by the prosecution and defense counsel during trial in
open court is automatically reduced into writing and contained in the official transcript of the
proceedings had in court. The conformity of the accused in the form of his signature affixed
thereto is unnecessary in view of the fact that: "[…] an attorney who is employed to manage a
party's conduct of a lawsuit has prima facie authority to make relevant admissions by pleadings,
by oral or written stipulation, which unless allowed to be withdrawn are conclusive." (Italics
supplied.) In fact, "judicial admissions are frequently those of counsel or of the attorney of
record, who is, for the purpose of the trial, the agent of his client. When such admissions are
made for the purpose of dispensing with proof of some fact, they bind the client, whether made
during, or even after, the trial.
Worth stressing, in this connection, judicial admissions do not require proof and may not
be contradicted in the absence of a prior showing that the admissions had been made through
palpable mistake.

MACARIA TORRES VS. COURT OF APPEALS

Facts: Margarita Torres was married to Claro Santillan, and they had two children: Vicente and
Antonina. Antonina married and had six children. After the death of her husband, Margarita
cohabited with Leon without the benefit of marriage, and they had a child, Macaria Torres.
Subsequently, Leon and Margarita were married, and Macaria lived with and was reared by her
parents. Lot 551 had been leased temporarily by the Government to Margarita who was the
actual occupant of the lot. On December 13, 1910, the Director of Lands issued to Margarita a
Sale Certificate over said lot, payable in 20 annual installments. 20 years before his death, Leon
sold and transferred in a notarial deed his rights and interest to the ½ portion of the lot in favor of
Macaria.
On June 6, 1953, about 22 years after the death of Margarita and 20 years after the death
of Leon, Vicente Santillan executed an Affidavit claiming possession of Lot 551 and asking for
the issuance of title in his name. A Transfer Certificate of Title was issued in the name of the
legal heirs of Margarita. Santillan and the children of Antonina filed a case of forcible entry
against Macaria, alleging that the latter had entered a portion of the lot without their consent,
constructed a house thereon and refused to vacate upon demand.
Paragraph 3 of the original complaint states: the plaintiffs and the defendant Macaria A. Bautista
are the legal heirs and nearest of kins of Margarita Torres, who died in Tanza, Cavite on
December 20, 1931.
However, Santillan et. al amended the complaint, the underlined portion was deleted so
that the statement simply read: That the plaintiffs are the legal heirs and nearest of kin of
Margarita Torres, who died at Tanza, Cavite, on December 20, 1931. Macaria claimed to be a
co-owner of the lot, being one of Margarita’s daughters. She instituted an action for partition of
the lot, alleging that said lot was the conjugal property of Margarita and Leon, and that she is
their legitimated child. The statement in the original complaint for ejectment, according to
petitioner, is an admission of her legitimation and is controlling in the determination of her
participation in the disputed property.
The Ejectment Case and the Partition Case were jointly tried and decided. The trial court
ruled that the lot was Margarita’s paraphernal property and adjudicated 2/3 to her heirs by Claro
Santillan and 1/3 to Macaria. Macaria’s share was later increased to 4/6, then reduced by the
Court of Appeals to ½. The CA declared that she is not a legitimated child.

Issue: Is the allegation in the original complaint that Macaria is a legal heir of Margarita an
admission of Macaria's legitimation?

Held: No. The Amended Complaint takes the place of the original. The latter is regarded as
abandoned and ceases to perform any further function as a pleading. The original complaint no
longer forms part of the record.
If petitioner had desired to utilize the original complaint she should have offered it in
evidence. Having been amended, the original complaint lost its character as a judicial admission,
which would have required no proof, and became merely an extrajudicial admission, the
admissibility of which, as evidence, required its formal offer. Contrary to petitioner's submission,
therefore there can be no estoppel by extrajudicial admission made in the original complaint, for
failure to offer it in evidence.

CHING VS. COURT OF APPEALS AND ALLIED BANKING CORPORATION

FACTS: Philippine Blooming Mills Company, Inc. (PBMCI) obtained two loans from the Allied
Banking Corporation (ABC). (PBMCI) Executive Vice-President Alfredo Ching executed a
continuing guaranty with the ABC for the payment of the said loan. The PBMCI defaulted in the
payment of all its loans so ABC filed a complaint for sum of money against the PBMCI. Trial
court issued a writ of preliminary attachment against Alfredo Ching requiring the sheriff of to
attach all the properties of said Alfredo Ching to answer for the payment of the loans.
Encarnacion T. Ching, wife of Alfredo Ching, filed a Motion to Set Aside the levy on attachment
allegeing inter alia that the 100,000 shares of stocks levied on by the sheriff were acquired by her
and her husband during their marriage out of conjugal funds. Petitioner spouses aver that the
source of funds in the acquisition of the levied shares of stocks is not the controlling factor when
invoking the presumption of the conjugal nature of stocks under Art. 121 and that such
presumption subsists even if the property is registered only in the name of one of the spouses, in
this case, petitioner Alfredo Ching. According to the petitioners, the suretyship obligation was
not contracted in the pursuit of the petitioner-husband’s profession or business.
ISSUE: WON 100,000 shares of stocks may be levied on by the sheriff to answer for the loans
guaranteed by petitioner Alfredo Ching
HELD: No. The CA erred in holding that by executing a continuing guaranty and suretyship
agreement with the private respondent for the payment of the PBMCI loans, the petitioner-
husband was in the exercise of his profession, pursuing a legitimate business. The shares of
stocks are, thus, presumed to be the conjugal partnership property of the petitioners. The private
respondent failed to adduce evidence that the petitioner-husband acquired the stocks with his
exclusive money. The appellate court erred in concluding that the conjugal partnership is liable
for the said account of PBMCI.
Article 121 provides: The conjugal partnership shall be liable for: (1) All debts and
obligations contracted by the husband for the benefit of the conjugal partnership, and those
contracted by the wife, also for the same purpose, in the cases where she may legally bind the
partnership. For the conjugal partnership to be liable for a liability that should appertain to the
husband alone, there must be a showing that some advantages accrued to the spouses.
In this case, the private respondent failed to prove that the conjugal partnership of the
petitioners was benefited by the petitioner-husband’s act of executing a continuing guaranty and
suretyship agreement with the private respondent for and in behalf of PBMCI. The contract of
loan was between the private respondent and the PBMCI, solely for the benefit of the latter. No
presumption can be inferred from the fact that when the petitioner-husband entered into an
accommodation agreement or a contract of surety, the conjugal partnership would thereby be
benefited. The private respondent was burdened to establish that such benefit redounded to the
conjugal partnership.

SERVICEWIDE SPECIALIST INC. VS. COURT OF APPEALS

Facts: Leticia Laus purchased on credit a Colt Galant xxx from Fortune Motors (Phils.)
Corporation and executed a promissory note for the amount of P56,028.00, inclusive of 12%
annual interest, payable within a period of 48 months. In case of default in the payment of any
installment, the total principal sum, together with the interest, shall become immediately due and
payable.
As a security for the promissory note, a chattel mortgage was constituted over the said
motor vehicle, with a deed of assignment incorporated therein such that the credit and mortgage
rights were assigned by Fortune Motors Corp. in favor of Filinvest Credit Corporation with the
consent of the mortgagor-debtor Laus. Filinvest in turn assigned the credit in favor of
Servicewide Specialists, Inc. Laus failed to pay the monthly installment for April 1977 and the
succeeding 17 months. Servicewide demanded payment of the entire outstanding balance with
interests but Laus failed to pay despite formal demands.
As a result of Laus’ failure to settle her obligation, or at least to surrender possession of
the motor vehicle for foreclosure, Servicewide instituted a complaint for replevin, impleading
Hilda Tee and John Dee in whose custody the vehicle was believed to be at the time of the filing
of the suit. Plaintiff alleged, among others, that it had superior lien over the mortgaged vehicle.
The court approved the replevin bond. Alberto Villafranca filed a third-party claim contending
that he is the absolute owner of the subject motor vehicle after purchasing it from a certain
Remedios Yang free from all lien and encumbrances; and that on July 1984, the said automobile
was taken from his residence by Deputy Sheriff Bernardo Bernabe pursuant to the seizure order
issued by the court a quo. Upon motion of the plaintiff below, Villafranca was substituted as
defendant and summons was served upon him. Villafranca moved for the dismissal of the
complaint on the ground that there is another action pending between the same parties before the
Makati RTC. The court granted the the motion but subsequently set aside the order of dismissal.
For failure to file his Answer as required by the court a quo, Villafranca was declared in default
and plaintiff’s evidence was received ex parte. The lower court later on dismissed the complaint
for insufficiency of evidence. Its motion for reconsideration having been denied, petitioner
appealed to CA on the ground that a suit for replevin aimed at the foreclosure of a chattel is an
action quasi in rem, and does not require the inclusion of the principal obligor in the Complaint.
CA affirmed the RTC decision. It also denied petitioner’s MR, hence, the present petition for
review on certiorari under Rule 45

Issue: WON a case for replevin may be pursued against Villafranca without impleading Laus.
Held: NO. An applicant for replevin must show that he is the owner of the property claimed,
particularly describing it, or is entitled to the possession thereof [Rule 60]. Where the right of the
plaintiff to the possession of the specified property is evident, the action need only be maintained
against him who so possesses the property. In rem action est per quam rem nostram quae ab alio
possidetur petimus, et semper adversus eum est qui rem possidet.

BA Finance, citing Northern Motors, Inc. v. Herrera: Persons having a special right of property
in the goods the recovery of which is sought, such as a chattel mortgagee, may maintain an
action for replevin therefor. Where the mortgage authorizes the mortgagee to take possession of
the property on default, he may maintain an action to recover possession of the mortgaged
chattels from the mortgagor or from any person in whose hands he may find them.

In default of the mortgagor, the mortgagee is constituted as the mortgagor’s attorney-in-fact.

That Villafranca is not privy to the chattel mortgage should be inconsequential. By the fact that
the object of replevin is traced to his possession, one can be a defendant in an action for replevin.
It is assumed that the plaintiff's right to possess is not or cannot be disputed.

However, in case the right of possession on the part of the plaintiff, or his authority to claim such
possession or that of his principal, is put to doubt (a contending party may contest the legal bases
for plaintiffs cause of action or an adverse and independent claim of ownership or right of
possession may be raised by that party), it could become essential to have other persons
impleaded for a complete determination of the controversy. In this case, there is an adverse and
independent claim of ownership by Villafranca as evinced by the existence of another pending
case.

In a suit for replevin, a clear right of possession must be established. A foreclosure under a
chattel mortgage may be commenced only once there is default on the part of the mortgagor
[Laus] of his obligation. The replevin in this case has been resorted to in order to pave the way
for foreclosure. There is a need to show the existence of the chattel mortgage and the
mortgagor’s [Laus] default, because the validity of the mortgagee’s [Servicewide] exercise of the
right of foreclosure depends on it.

Since the mortgagee's [Servicewide] right of possession is conditioned upon the actual fact of
default, the inclusion of other parties (debtor or mortgagor himself [Laus]) may be required to
allow a conclusive determination of the case. When the mortgagee [Servicewide] seeks a
replevin to effect the eventual foreclosure of the mortgage, it is not only the existence of, but also
the mortgagor's [Laus] default on, the chattel mortgage that can uphold the right to replevy the
property. The burden to establish a valid justification for such action lies with the plaintiff. An
adverse possessor (who is not the mortgagor) cannot just be deprived of his possession, let alone
be bound by the terms of the chattel mortgage contract, simply because the mortgagee brings up
an action for replevin.

Laus, being an indispensable party, should have been impleaded in the complaint for replevin
and damages. That Servicewide could not locate the mortgagor Laus is no excuse for resorting to
a procedural shortcut. It could have properly availed of substituted service of summons.
 PHILIPPINE CHARTER INSURANCE CORPORATION VS CENTRAL COLLEGES OF
THE PHILIPPINES

Facts: On May 16, 2000, Central Colleges of the Philippines (CCP), an educational institution,
contracted the services of Dynamic Planners and Construction Corporation (DPCC) to be its
general contractor for the construction of its five (5)-storey school building at No. 39 Aurora
Boulevard, Quezon City, with a total contract price of ₱248,000,000.00. As embodied in a
Contract Agreement,3 the construction of the entire building would be done in two phases with
each phase valued at ₱124,000,000.00.
To guarantee the fulfillment of the obligation, DPCC posted three (3) bonds, all issued by the
Philippine Charter Insurance Corporation (PCIC), namely: (1) Surety Bond No. PCIC-45542,
dated June 25, 2003, amounting to ₱7,031,460.74;4 (2) Performance Bond No. PCIC-455415 in
the amount of ₱2,929,775.31 which was subsequently increased to ₱6,199,999.99 through Bond
Endorsement No. E-2003/12527;6 and (3) Performance Bond No. PCIC-46172 for
₱692,890.74.7 All the bonds were callable on demand and set to expire on October 30, 2003.

The Phase 1 of the project was completed without issue. Thereafter, CCP paid DPCC
₱14,880,000.00 or 12% of the agreed price of ₱124,000,000.00 with a check dated March 14,
2002 as downpayment for the Phase 2 of the project.

The Phase 2 of the project, however, encountered numerous delays. When CCP audited DPCC
on July 25, 2003, only 47% of the work to be done was actually finished. Thus, in a letter dated
October 29, 2003 addressed to DPCC and PCIC, CCP informed them of the breach in the
contract and its plan to claim on the construction bonds
DPCC wrote PCIC confirming the finding that Phase 2 was only 51% finished and, at the same
time, requesting for the extension of its performance and surety bonds because the supposed
revision of the plans would require more days. CCP filed a complaint with request for arbitration
before the Construction Industry Arbitration Commission (CIAC) against DPCC and PCIC.15 In
its complaint, CCP prayed that CIAC hold DPCC and PCIC, jointly and severally liable. DPCC
and PCIC denied any liability and proffered that CCP unlawfully withheld the materials,
equipment, formworks and scaffoldings left at the premises amounting to ₱4,232,264.12.
The CA found that DPCC was already in delay for managing to complete only 51% of the
construction work necessary to finish the Phase 2 of the project. It held that due to DPCC’s
inexcusable delay, CCP was legally within its rights to terminate the contract with it. It likewise
did not give weight to PCIC’s defense that Bond No. 46172 was already released because the
said issue was never raised before the CIAC and was raised for the first time on appeal. The CA,
however, deleted the award of cost of the materials, equipment, formworks and scaffoldings
allegedly left by DPCC at the work site for its failure to prove the actual costs of said materials.
It added, "In any event, the cost of such materials, equipment, formworks and scaffoldings
cannot be deducted from Philippine Charter’s liability on the bond, as the credit does not belong
to the latter but to Dynamic
Issue: Whether or not the CA grossly erred in deleting the counterclaim of respondent DPCC
covering the costs of materials, equipment, formworks and scaffoldings left at site and in
denying petitioner to benefit from the counterclaim.
Held: The Court finds nothing improper in the deletion by the CA of the award of actual
damages in favor of DPCC. Actual or compensatory damages means the adequate compensation
for pecuniary loss suffered and for profits the obligee failed to obtain. To be entitled to actual or
compensatory damages, it is basic that there must be pleading and proof of actual damages
suffered. Equally vital to the fact that the amount of loss must be capable of proof, such loss
must also be actually proven with a reasonable degree of certainty, premised upon competent
proof or the best evidence obtainable. The burden of proof of the damage suffered is,
consequently, imposed on the party claiming it who, in turn, should present the best evidence
available in support of his claim. It could include sales and delivery receipts, cash and check
vouchers and other pieces of documentary evidence of the same nature pertaining to the items he
is seeking to recover. In the absence of corroborative evidence, it has been held that self-serving
statements of account are not sufficient basis for an award of actual damages. Moreover, a claim
for actual damages cannot be predicated on flimsy, remote, speculative, and insubstantial proof.
Thus, courts are required to state the factual bases of the award.