CIVIL LAW:MORTGAGE; SPECIAL POWERS OF ATTORNEY;EFFECT AGAINST THIRD PERSONS WITH NO KNOWLEDGE.

Absent a valid revocation duly furnished to the mortgagee, Special Powers of Attorney continue to have force and effect as against third persons who had no knowledge of such lack of authority. CIVIL LAW:AGENCY; SCOPE OF AUTHORITY. As far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority if such is within the the terms of the power of attorney as written even if the agent has in fact exceeded the limits of his authority according to the understanding between the principal and the agent. CIVIL LAW:ADOPTION; STATUTES; PURPOSE The main purpose of adoption statutes is the promotion of the welfare of children. The law must also be applied with compassion, understanding and less severity in view of the fact that it is intended to provide home, love, care and education for less fortunate children. CIVIL LAW:CONSIGNATION; INAPPLICABLE TO LEASE WITH OPTION TO BUY n !da. de "uirino v. Palarca, it was ruled that consignation referred to in Article #$%& of the 'ivil 'ode is inapplicable to a lease with option to buy because said provision refers to consignation as one of the means for the payment or discharge of a (debt,( whereas the lessee was not indebted to the lessor for the price of the leased premises. The lessee merely exercised a right of option and had no obligation to pay said price until execution of the deed of sale in his favor, which the lessor refused to do. CIVIL LAW:ANNULMENT;ROOT CAUSE OF PSYCHOLOGICAL INCAPACITY The root cause of the psychological incapacity must be) *a+ medically or clinically identified, *b+ alleged in the complaint, *c+ sufficiently proven by experts, and *d+ clearly explained in the decision. ,xpert evidence may be given by -ualified psychiatrists and clinical psychologists. CIVIL LAW:PROPERTY; ACCRETION; REQUISITES Accretion as a mode of ac-uiring property under Article .%/ of the 'ivil 'ode, re-uires the concurrence of the following re-uisites) *#+ that the accumulation of soil or sediment be gradual and imperceptible0 *$+ that it be the result of the action of the waters of the river0 and *1+ that the land where the accretion takes place is ad2acent to the bank of the river. CIVIL LAW:OBLIGATIONS AND CONTRACTS; TENDER OF PAYMENT OF A JUDGMENT NOT SAME AS TENDER OF PAYMENT OF CONTRACTUAL DEBT. 3oreover, as previously shown, the rights and obligations of the parties arose from a 2udgment, not from contract and therefore the 'ivil 'ode re-uirements as to consignation

are not applicable. Thus, in case of refusal of a tender of the amount due on a 2udgment, the court may direct the money to be paid in court and when this is done, order satisfaction of the 2udgment to be entered. The tender of payment of a 2udgment is not the same as tender of payment of a contractual debt and consignation of the money due from a debtor to a creditor. The re-uisites of consignation under Art. #$%& et se-. do not apply to the former. CIVIL LAW:WILLS AND SUCCESSION; POWERS OF COURT TO CONTROL PROPERTIES OF DECEASED. The court which ac-uired 2urisdiction over the properties of a deceased person through the filing of the corresponding proceedings, has supervision and control over the said properties, and under the said power, it is its inherent duty to see that the inventory submitted by the administrator appointed by it contains all the properties, rights and credits which the law re-uires the administrator to set out in his inventory. n compliance with this duty, the court has also inherent power to determine what properties, rights and credits of the deceased should be included in or excluded from the inventory. Should an heir or person interested in the properties of a deceased person duly call the court's attention to the fact that certain properties, rights or credits have been left out in the inventory, it is likewise the court's duty to hear the observations, with power to determine if such observations should be attended to or not and if the properties referred to therein belong prima facie to the intestate, but no such determination is final and ultimate in nature as to the ownership of the said properties. CIVIL LAW:EXTRA-JUDICIAL PARTITION ALLOWED WHEN NO CREDITORS AFFECTED 4ithout creditors to take into consideration, it is competent for the heirs of an estate to enter into an agreement for distribution thereof in a manner and upon a plan different from those provided by the rules from which, in the first place, nothing can be inferred that a writing or other formality is essential for the partition to be valid CIVIL LAW:MEETING OF THE MINDS IN A CONTRACT OF SALE The meeting of the minds in a contract speaks of the intent of the parties in entering into the contract respecting the sub2ect matter and the consideration thereof, and if the words of the contract appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. CIVIL LAW:DIFFERENCE BETWEEN AGENT AND BROKER An agent receives a commission upon the successful conclusion of a sale. A broker earns his pay merely by bringing the buyer and the seller together, even if no sale is eventually made. The fact that a person invested his own money to put service centers and showrooms does not necessarily prove that he is not an agent of a car manufacturer. CIVIL LAW:CONTRACTS; INTERPRETATION OF STIPULATIONS IN LEASE CONTRACT.

The new rule, therefore, is that a stipulation in the lease contract which provides for the extension of the period of lease, the terms and conditions of which are sub2ect to the mutual agreement of the lessor and the lessee, should be interpreted to mean that the lease may be extended only upon mutual agreement of the parties and not at the option alone of the lessee or even the lessor for that matter. CIVIL LAW:CONTRACTS; EXTRAORDINARY INFLATION t is only when an extraordinary inflation supervenes that the law affords the parties a relief in contractual obligations.Art. #$%5 of the 'ivil 'ode provides that (in case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the time of the establishment of the obligation shall be the basis of the payment, unless there is an agreement to the contrary.( n 6ilipino Pipe and 6oundry 'orporation v. 7A4ASA, the 'ourt explained extraordinary inflation thus) (,xtraordinary inflation exists when 'there is a decrease or increase in the purchasing power of the Philippine currency which is unusual or beyond the common fluctuation in the value of said currency, and such decrease or increase could not have been reasonably foreseen or was manifestly beyond the contemplation of the parties at the time of the establishment of the obligation. *Tolentino, 'ommentaries and 8urisprudence on the 'ivil 'ode, !ol. !, p. $9..+ CIVIL LAW:ALTERATION PLANS;MAJORITY OF HOMEOWNERS CONSENT NEEDED. n alteration plans, written approval of the 7ational :ousing Authority alone is not sufficient. t must be coupled with the written conformity or consent of the duly organi;ed homeowners association or the ma2ority of the lot buyers. CIVIL LAW:ACTUAL OR COMPENSATORY DAMAGES; MUST BE PROVED WITH REASONABLE DEGREE OF CERTAINTY. Actual or compensatory damages cannot be presumed, but must be duly proved, and proved with reasonable degree of certainty. A court cannot rely on speculation, con2ecture or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have suffered and on evidence of the actual amount thereof. CIVIL LAW:WILLS AND SUCCESSION; PROBATE OF A WILL; DOES NOT LOOK INTO ITS INTRINSIC VALIDITY. 7ormally, the probate of a will does not look into its intrinsic validity. The authentication of a will decides no other -uestions than such as touch upon the capacity of the testator and the compliance with those re-uisites or solemnities which the law prescribes for the validity of the wills. t does not determine nor even by implication pre2udge the validity or efficiency of the provisions of the will, thus may be impugned as being vicious or null, notwithstanding its authentication. The -uestion relating to these points remain entirely unaffected, and may be raised even after the will has been authenticated. CIVIL LAW:DIFFERENCE BETWEEN CAUSE AND MOTIVE. 'ause is the essential reason for the contract, while motive is the particular reason of a contracting party which does not affect the other party and which does not preclude the

existence of a different consideration. Article #1%# of the 'ivil 'ode provides that (the particular motives of the parties in entering into a contract are different from the cause thereof.( CIVIL LAW:PAROL PARTITIONS; MAY BE SUSTAINED ON GROUND OF ESTOPPEL; MAY BE RECOGNIZED BY COURT FOR CONCLUDING RIGHTS OF PARTIES. n numerous cases it has been held or stated that parol partitions may be sustained on the ground of estoppel of the parties to assert the rights of a tenant in common as to parts of land divided by parol partition as to which possession in severalty was taken and acts of individual ownership were exercised. And a court of e-uity will recogni;e the agreement and decree it to be valid and effectual for the purpose of concluding the right of the parties as between each other to hold their respective parts in severalty. A parol partition may also be sustained on the ground that the parties thereto have ac-uiesced in and ratified the partition by taking possession in severalty, exercising acts of ownership with respect thereto, or otherwise recogni;ing the existence of the partition. CIVIL LAW:PROPERTY; IMPROVEMENTS ON PROPERTY; PROOF NEEDED TO DETERMINE REIMBURSEMENT. The 'ivil 'ode says that improvements, (whether for utility or adornment, made on the separate property of the spouses through advancements from the partnership or through the industry of either the husband or the wife, belong to the con2ugal partnership,( and buildings (constructed, at the expense of the partnership, during the marriage on land belonging to one of the spouses, also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who owns the same.( Proof, therefore, is needful of the time of the making or construction of the improvements and the source of the funds used therefor, in order to determine the character of the improvements as belonging to the con2ugal partnership or to one spouse separately. CIVIL LAW:DAMAGES UNDER ARTICLE OF CIVIL CODE; ONLY PREPONDERANCE OF EVIDENCE REQUIRED. To hold a person liable for damages under Article 11 of the 'ivil 'ode, only a preponderance of evidence is re-uired. An ac-uittal in a criminal case is not a bar to the filing of an action for civil damages, for one may not be criminally liable and still be civilly liable. Thus, the outcome or result of the criminal case, whether an ac-uittal or conviction, is really inconse-uential and will be of no moment in the civil action. CIVIL LAW:CONSIGNATION; INAPPLICABLE TO A LEASE WITH OPTION TO BUY. n !da. de "uirino v. Palarca, it was ruled that consignation referred to in Article #$%& of the 'ivil 'ode is inapplicable to a lease with option to buy because said provision refers to consignation as one of the means for the payment or discharge of a (debt,( whereas the lessee was not indebted to the lessor for the price of the leased premises. The lessee merely exercised a right of option and had no obligation to pay said price until execution of the deed of sale in his favor, which the lessor refused to do.

CIVIL LAW:POSSESSION; MUST BE ADVERSE TO CONSITUTE THE FOUNDATION OF A PRESCRIPTIVE RIGHT. Possession, under the 'ivil 'ode, to constitute the foundation of a prescriptive right, must be possession under claim of title *en concepto de dueno+, or to use the common law e-uivalent of the term, it must be adverse. Acts of possessory character performed by one who holds by mere tolerance of the owner are clearly not en concepto de dueno, and such possessory acts, no matter how long so continued, do not start the running of the period of prescription. CIVIL LAW:ARTICLE !"#" OF THE CIVIL CODE; TWO OPTIONS FOR MAKING A PARTITION OF ESTATE. Article #595 of the 7ew 'ivil 'ode allows a person to make a partition of his estate either by an act inter vivos or by will and such partition shall be respected insofar as it does not pre2udice the legitime of the compulsory heirs. 4hile the law prohibits contracts upon future inheritance, the partition by the parent, as provided in Art. #595, is a case expressly authori;ed by law. Art. #595 of the 'ivil 'ode clearly gives a person two options in making a partition of his estate0 either by an act inter vivos or by will. 4hen a person makes a partition by will, it is imperative that such partition must be executed in accordance with the provisions of the law on wills0 however, when a person makes the partition of his estate by an act inter vivos, such partition may even be oral or written, and need not be in the form of a will, provided that the partition does not pre2udice the legitime of compulsory heirs. CIVIL LAW:DAMAGES; MERE FILING OF A COMPLAINT IS NOT PER SE EVIDENCE OF ILL WILL ON WHICH A CLAIM FOR DAMGES MAY BE BASED. t has not been sufficiently established that the complaint they filed was intended merely to harass and place petitioner in disrepute as they apparently were pursuing a cause of action they sincerely believed was meritorious. The fact that they have failed does not necessarily mean that they were acting in bad faith. The mere filing of a complaint against a person, while it may cause him some anxiety, is not per se evidence of ill will on which a claim for damages may be based. A contrary role would discourage peaceful recourse to the courts of 2ustice and induce resort to methods less than legal, and perhaps even violent. CIVIL LAW:MORTGAGE; SUBORDINATE LIEN HOLDER; A PROPER PARTY TO A FORECLOSURE PROCEEDING. A subordinate lien holder is a proper, even a necessary, but not an indispensable, party to a foreclosure proceeding. Appropriate relief could be granted by the court to the mortgagee in the foreclosure proceeding, without affecting the rights of the subordinate lien holders. The effect of the failure on the part of the mortgagee to make the subordinate lien holder a defendant is that the decree entered in the foreclosure proceeding would not deprive the subordinate lien holder of his right of redemption. A decree of foreclosure in a suit to which the holders of a second lien are not parties leaves the e-uity of redemption in favor of such lien holders unforeclosed and unaffected.

CIVIL LAW:SALE OF LAND IS VALID REGARDLESS OF FORM; REQUISITE UNDER ARTICLE !$%# OF THE CIVIL CODE FOR CONVENIENCE ONLY. A sale of land is valid regardless of the form it may have been entered into. The re-uisite form under Article #.%9 of the 'ivil 'ode is merely for greater efficacy or convenience and the failure to comply therewith does not affect the validity and binding effect of the act between the parties. f the law re-uires a document or other special form, as in the sale of real property, the contracting parties may compel each other to observe that form, once the contract has been perfected. Their right may be exercised simultaneously with action upon the contract. CIVIL LAW:VALID TENDER OF PAYMENT; ENOUGH TO EXERCISE RIGHT OF REPURCHASE. Since the case at bar involves the exercise of the right to repurchase, a showing that petitioner made a valid tender of payment is sufficient. t is enough that a sincere or genuine tender of payment and not a mock or deceptive one was made. The fact that he deposited the amount of repurchase money with the 'lerk of 'ourt was simply an additional security for the petitioner. t was not an essential act that had to be performed after tender of payment was refused by the private respondent although it may serve to indicate the veracity of desire to comply with the obligation. CIVIL LAW:ARTICLE OF THE CIVIL CODE; REASON FOR BURDEN OF PROOF To subordinate the civil action contemplated in Arts. 11 and $#// of the 'ivil 'ode to the result of the criminal prosecution would render meaningless the independent character of the civil action when, on the contrary, the law provides that such civil action (may proceed independently of the criminal proceeding and regardless of the result of the latter.( Art. 11 of the 'ivil 'ode contemplates a civil action for recovery of damages that is entirely unrelated to the purely criminal aspect of the case. This is the reason why only a preponderance of evidence and not proof beyond reasonable doubt is deemed sufficient in such civil action. CIVIL LAW:POSSESSION;ACTION FOR FORCIBLE ENTRY AND DETAINER;PLAINTIFF&S BURDEN OF PROOF. n an action for forcible entry and detainer, the main issue is one of priority of possession. The legal right thereto is not essential to the possessor's cause of action, for no one may take law into his own hands and forcibly e2ect another or deprive him of his possession by stealth, even if his title thereto were -uestionable or actually disputed in another case. f the plaintiff can prove prior physical possession in himself, he may recover such possession even from the owner, but on the other hand, if he cannot prove such prior physical possession, he has no right of action for forcible entry and detainer even if he should be the owner of the property. CIVIL LAW:OWNERSHIP AND POSSESSION; DISTINGUISHED. t must be stressed <that possession and ownership are distinct legal concepts. =wnership exists when a thing pertaining to one person is completely sub2ected to his will in a manner not prohibited by law and consistent with the rights of others. =wnership confers certain rights to the owner, one of which is the right to dispose of the thing by way of

sale. =n the other hand, possession is defined as the holding of a thing or the en2oyment of a right. >iterally, to possess means to actually and physically occupy a thing with or without right. CIVIL LAW:CONTRACTS; INTERPRETATION; LITERAL MEANING SHALL CONTROL. t is a basic and fundamental rule in the interpretation of contract that if the terms thereof are clear and leave no doubt as to the intention of the contracting parties, the literal meaning shall control. n order to 2udge the intention of the parties, their contemporaneous and subse-uent acts shall be principally considered. CIVIL LAW:NOVATION; PAYMENT BY THIRD PERSON DOES NOT RELEASE ORIGINAL DEBTOR. t is a very common thing in the business affairs for a stranger to a contract to assume its obligations0 and while this may have the effect of adding to the number of persons liable, it does not necessarily imply the extinguishment of the liability of the first debtor. The mere fact that the creditor receives a guaranty or accepts payments from a third person who has agreed to assume the obligation, when there is no agreement that the first debtor shall be released from responsibility, does not constitute a novation, and the creditor can still enforce the obligation against the original debtor. CIVIL LAW:PROPERTY;LIS PENDENS; DEFINED. >is pendens is a >atin term which literally means a pending suit or a pending litigation while a notice of lis pendens is an announcement to the whole world that a particular real property is in litigation, serving as a warning that one who ac-uires an interest over the said property does so at his own risk, or that he gambles on the result of the litigation over the said property. t is but a signal to the intending buyer or mortgagee to take care or beware and to investigate the prospect or non?prospect of the litigation succeeding before he forks down his money. CIVIL LAW:WILLS; PROBATE DOES NOT LOOK INTO INTRINSIC VALIDITY. 7ormally, the probate of a will does not look into its intrinsic validity. The authentication of a will decides no other -uestions than such as touch upon the capacity of the testator and the compliance with those re-uisites or solemnities which the law prescribes for the validity of the wills. t does not determine nor even by implication pre2udge the validity or efficiency of the provisions of the will, thus may be impugned as being vicious or null, notwithstanding its authentication. The -uestion relating to these points remain entirely unaffected, and may be raised even after the will has been authenticated. CIVIL LAW:CONTRACTS; STIPULATION POUR AUTRUI; DEFINITION AND REQUISITES. A stipulation pour autrui is one in favor of a third person who may demand its fulfillment, provided he communicated his acceptance to the obligor before its revocation. An incidental benefit or interest, which another person gains, is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person. The re-uisites for such contract are) *#+ the stipulation in favor of a third person

must be a part of the contract, and not the contract itself0 *$+ the favorable stipulation should not be conditioned or compensated by any kind of obligation0 and *1+ neither of the contracting parties bears the legal representation or authori;ation of the third party. CIVIL LAW:DONATIONS; REQUIREMENTS FOR DONATION OF AN IMMOVABLE; REGISTRATION OF DONATION. Article /.@ of the 'ivil 'ode provides inter alia that (in order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy.( 'orollarily, Article /5@ of the same 'ode explicitly states that (the titles of ownership, or other rights over immovable property, which are not duly inscribed or annotated in the Aegistry of property shall not pre2udice third persons.( 6rom the foregoing provisions, it may be inferred that as between the parties to a donation of an immovable property, all that is re-uired is for said donation to be contained in a public document. Aegistration is not necessary for it to be considered valid and effective. :owever, in order to bind third persons, the donation must be registered in the Aegistry of Property *now Aegistry of >and Titles and Beeds+. Although the non?registration of a deed of donation shall not affect its validity, the necessity of registration comes into play when the rights of third persons are affected. CIVIL LAW:POSSESSION; PURCHASER AT AUCTION SALE NOT OBLIGED TO BRING SUIT FOR POSSESSION AFTER LASE OF ONE YEAR REDEMPTION PERIOD. There is no law in this 2urisdiction whereby the purchaser at a sheriff's sale of real property is obliged to bring a separate and independent suit for possession after the one? year period for redemption has expired and after he has obtained the sheriff's final certificate of sale. There is neither legal ground nor reason of public policy precluding the court from ordering the sheriff in this case to yield possession of the property purchased at public auction where it appears that the 2udgment debtor is the one in possession thereof and no rights of third persons are involved. CIVIL LAW:CONTRACTS; LEASE; PERIOD OF LEASE DEEMED TO BENEFIT BOTH PARTIES. t is also important to bear in mind that in a reciprocal contract like a lease, the period of the lease must be deemed to have been agreed upon for the benefit of both parties, absent language showing that the term was deliberately set for the benefit of the lessee or lessor alone. 4e are not aware of any presumption in law that the term of a lease is designated for the benefit of the lessee alone.

CIVIL LAW:CONTRACTS; PERFECTION; QUALIFIED ACCEPTANCE. 'ontracts that are consensual in nature, like a contract of sale, are perfected upon mere meeting of the minds. =nce there is concurrence between the offer and the acceptance upon the sub2ect matter, consideration, and terms of payment, a contract is produced. The offer must be certain. To convert the offer into a contract, the acceptance must be

absolute and must not -ualify the terms of the offer0 it must be plain, une-uivocal, unconditional, and without variance of any sort from the proposal. A -ualified acceptance, or one that involves a new proposal, constitutes a counter?offer and is a re2ection of the original offer. 'onse-uently, when something is desired which is not exactly what is proposed in the offer, such acceptance is not sufficient to generate consent because any modification or variation from the terms of the offer annuls the offer.