Legal and historical foundations for the national territorial sovereignty of the Philippines

A concise treatment of the legal and historical foundations for the national territorial sovereignty of the Republic of the Philippines. 

Short Thesis 

The Philippines’ territorial title rests on: (a) Spain’s colonial maps and administration (as evidence of original title and effective control); (b) Spain’s legal transfer of sovereignty to the United States by the Treaty of Paris (10 December 1898) and the supplemental 1900 Washington Convention (7 Nov. 1900) describing outlying islands; (c) international boundary delimitation with third States by treaty (notably the U.S.–U.K. Convention of 2 January 1930 delimiting the Philippines–North Borneo line); (d) progressive codification of the national territory in Philippine constitutions (1935 → 1973 → 1987), culminating in the 1987 constitutional text that embraces the archipelagic doctrine and expressly makes “the waters around, between, and connecting the islands… part of the internal waters of the Philippines”; and (e) modern international law on maritime zones (UNCLOS) and recent arbitral pronouncements (notably the 2016 PCA Award in The Republic of the Philippines v. People’s Republic of China) which define maritime entitlements and constrain historic-title claims. These elements operate together: historic titles and maps provided the factual/prehistoric basis, treaties effected legal transfers and boundary fixes, constitutions memorialized the State’s claim, and international law/decisions govern maritime entitlements and settle (or attempt to settle) disputes with other States. 

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1. The 1935 Constitution (Commonwealth) — legal text and practical effect

• The 1935 Constitution defined “THE NATIONAL TERRITORY” by reference to the territories ceded to the United States by the Treaty of Paris (10 Dec. 1898) and by reference to supplemental treaties (the Washington convention 7 Nov. 1900 and later agreements). The 1935 Constitution thus anchored Philippine territorial limits expressly to earlier international instruments that effected Spanish cession to the United States. 

Legal consequence: The 1935 text reflected a constitutional recognition that the State’s territorial base derived from those cessions and conventions; the constitution simply incorporated international treaty definitions into the domestic constitutional framework.

2. The 1973 Constitution

• Article I of the 1973 Constitution defines the national territory as “the Philippine archipelago, with all the islands and waters embraced therein, and all the other territories belonging to the Philippines by historic or legal title” and enumerates territorial sea, airspace, seabed, subsoil, insular shelves and submarine areas. 

Legal consequence: The 1973 Charter broadened the constitutional description to include explicitly maritime and subsoil domains and recognized both historic and legal title as bases for possession — thereby implicitly accepting concepts later crystallized in UNCLOS and in the archipelagic-state doctrine.

3. The 1987 Constitution (current)

• Article I (National territory): the text contains the clearest and now-settled constitutional formulation: (i) the national territory comprises the Philippine archipelago with all islands and waters embraced therein and other territories over which the Philippines has sovereignty or jurisdiction; (ii) it enumerates terrestrial, fluvial, aerial domains, territorial sea, seabed, subsoil, insular shelves, and other submarine areas; and (iii) importantly, it states that “the waters around, between, and connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines.” This provision embodies the archipelagic doctrine (as later codified in UNCLOS) in the Constitution itself. 

Legal consequence: The Constitution supplies a strong domestic basis for archipelagic claims and for asserting jurisdiction over maritime spaces within archipelagic baselines. It is the current constitutional foundation for any diplomatic, legislative or judicial action involving territorial sovereignty and maritime jurisdiction.

4. Treaty of Paris (10 December 1898) — Spain → United States

• Article III and related articles of the Treaty of Paris ceded the Philippine Archipelago to the United States; the Treaty (and later exchanges and protocols) served as the international instrument effecting transfer of Spanish sovereignty. The treaty came into force upon exchange of ratifications (April 1899). 

Legal consequence: The Treaty of Paris is the pivotal international instrument by which sovereignty over the archipelago (as then understood) was transferred to the United States — and, as a matter of constitutional history, the 1935 Constitution referenced that treaty as the basis of the national territory.

5. Treaty (Convention) of Washington — 7 November 1900 (cession of outlying islands)

• The 7 November 1900 convention (sometimes called the “Treaty of Washington (1900)” or Convention of 1900) clarified and ceded to the United States islands lying outside the lines described in Article III of the 1898 treaty (for example, islands such as Cagayan, Sulu, Sibutu, etc.). The 1900 instrument was expressly cited in the 1935 Constitution’s territorial article. 

Legal consequence: This instrument closed potential gaps left by the 1898 treaty and is part of the cluster of treaties forming the legal base of the Philippine territorial claim.

6. 1930 Convention between the United States and Great Britain (boundary w/ North Borneo)

• The Convention of 2 January 1930 between the United States and Great Britain definitively delimited the boundary between the Philippine Archipelago and the State of North Borneo (then British territory). The treaty, and subsequent exchanges of notes, fixed the outer limit between the two jurisdictions for specific purposes. 

Legal consequence: Treaties between administering Powers fixed inter-State boundaries which later affect successor rights and claims (for example, issues involving North Borneo/Sabah). Such treaties remain legally relevant unless modified or abrogated by subsequent agreement.

7. Other relevant treaties, international instruments and historical maps

• UNCLOS (1982): codifies modern maritime zones (territorial sea, contiguous zone, exclusive economic zone, continental shelf) and recognizes archipelagic States and archipelagic baselines (Part IV). Philippine constitutional language on internal waters echoes UNCLOS archipelagic concepts. 

• Murillo-Velarde map (1734) and other historic maps: used as historical evidence of geographic knowledge and historic connections to maritime features (e.g., the Murillo Velarde map was relied upon in Philippine submissions in the South China Sea arbitration to demonstrate historic charting). 

8. Domestic and international judicial, quasi-judicial and arbitral decisions and awards

• PCA Award — The Republic of the Philippines v. People’s Republic of China (Award, 12 July 2016): the Arbitral Tribunal under Annex VII to UNCLOS ruled on the legal status of maritime features and on the inexistence (under UNCLOS) of China’s claimed historic rights within the “nine-dash line”; it clarified that historic rights inconsistent with UNCLOS do not prevail. The Award is a major, binding pronouncement in that arbitration (binding between the parties to that arbitration), and it strongly affects continental shelf/EEZ/territorial sea entitlements. China has publicly rejected the Award; enforcement remains political/diplomatic. 

• Domestic courts in the Philippines have repeatedly treated territorial sovereignty and foreign-relations questions as primarily political questions (for diplomatic resolution), though the Supreme Court has considered domestic legal implications arising from treaties and legislation. (Searchable primary cases on discrete sovereign title (e.g., Sabah claims) are largely treated in executive/diplomatic contexts; there is comparatively limited domestic case law adjudicating international territorial title as a pure judicial question.) 

9. Historical studies and research

• Scholarly histories and archival maps (Velarde 1734 and other charts) have been used to demonstrate continuity of naming and usage of maritime features and to establish historical links; modern historians and legal scholars use both cartographic evidence and contemporaneous administrative records when reconstructing title. The Murillo-Velarde map is frequently cited in both scholarly work and the Philippines’ legal submissions in maritime disputes. 

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Synthesis — how these pieces fit in legal practice

1. Title chain: Spain’s colonial title → Treaty of Paris (1898) ± Treaty of Washington (1900) → U.S. sovereignty (1898–1946) → Philippine independence (commonwealth and republic constitutions) → Philippines as successor State with constitutionalized territorial claims. The 1930 U.S.–U.K. convention fixed parts of the external boundary vis-à-vis North Borneo. 

2. Constitutional entrenchment: The 1987 Constitution codifies the archipelagic doctrine and internal-waters claim; domestic law therefore supports executive steps (baseline declarations; maritime zone claims) and provides a constitutional warrant for asserting jurisdiction. 

3. UNCLOS and arbitral practice: UNCLOS provides the legal framework for maritime entitlements; the 2016 PCA Award demonstrates how UNCLOS adjudication treats "historic-rights" claims of China  incompatible with UNCLOS. Thus the Philippines’ constitutional assertions must be pursued consistent with UNCLOS rules when maritime entitlements are at issue. 

4. Maps and historical evidence: Cartography (e.g., Murillo-Velarde) is admissible as historical evidence but never alone dispositive; treaties and effective administration (showing State acts of authority) have decisive legal weight in international law. 

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Limits / caveats

• Where interstate sovereignty claims are contested (e.g., Sabah/North Borneo, certain shoals/reefs), the legal outcome depends upon the legal instrument(s) at issue (treaties, succession doctrines, effective control, estoppel) and political/diplomatic practice; judicial resolution is possible but often precluded by the political-question character of external sovereignty.

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Primary sources and links (verified)

1. 1935 Philippine Constitution (text) — Article I (National Territory). Lawphil. 

https://lawphil.net/consti/cons1935.html

2. 1973 Constitution (text) — Article I (National Territory). Lawphil / official texts. 

https://lawphil.net/consti/cons1973.html

3. 1987 Constitution (text) — Article I (National Territory). Official/constitute project / ChanRobles. 

https://www.constituteproject.org/constitution/Philippines_1987

https://chanrobles.com/article1.htm

4. Treaty of Peace between the United States and Spain (Treaty of Paris, 10 Dec. 1898) — text (Yale Avalon / U.S. historical documents). 

https://avalon.law.yale.edu/19th_century/sp1898.asp

5. Convention / Treaty between the United States and Spain (7 Nov. 1900) — Cession of outlying islands (text and U.S. archival presentation). 

https://history.state.gov/historicaldocuments/frus1900/ch105

6. Convention between the United States and Great Britain (2 Jan. 1930) — boundary between Philippine Archipelago and North Borneo (text/explanatory notes). U.S. Department of State, FRUS. 

https://history.state.gov/historicaldocuments/frus1930v03/ch16

7. United Nations Convention on the Law of the Sea (UNCLOS, 1982) — full text and Part IV (archipelagic States). 

https://www.un.org/depts/los/convention_agreements/texts/unclos/part4.htm

8. The South China Sea Arbitration (PCA Award), The Republic of the Philippines v. People’s Republic of China (Award, 12 July 2016) — PCA (registry) PDF and RIAA / UN collection. 

https://docs.pca-cpa.org/2016/07/PH-CN-20160712-Award.pdf

9. Murillo Velarde (Velarde) map (1734) — background and institutional collection pages (Library of Congress, Philippine Cultural Center). 

https://murillovelardemap.com/

https://www.loc.gov/

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Assisted by ChatGPT AI app, October 12, 2025.

SALN (Statement of Assets, Liabilities and Net Worth)

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I. Constitutional and statutory foundations

1. Constitutional mandate.
   The SALN requirement is constitutional. Article XI (Accountability of Public Officers) expressly requires that “[a] public officer or employee shall, upon assumption of office and as often thereafter as may be required by law, submit a declaration under oath of his assets, liabilities, and net worth.” For certain high offices (President, Vice-President, Cabinet members, members of Congress, justices of the Supreme Court, constitutional commissions, etc.), the Constitution also requires disclosure to the public “in the manner provided by law.”

2. Statutory duty and public right to know (RA No. 6713).
   The Code of Conduct and Ethical Standards for Public Officials and Employees (Republic Act No. 6713) operationalizes the constitutional duty. Section 8 of RA 6713 requires public officials and employees to file SALNs and declares that “the public has the right to know” such information; Section 5(e) of the same law imposes on public officials the duty to make documents accessible to the public. The SALN is thus both a filing obligation of the officer and a statutorily recognized subject of public scrutiny.

3. Data-privacy law as an operational constraint.
   Any rules on access must also be consistent with the Data Privacy Act (RA No. 10173) and its IRR: the State balances the public’s right to information with the individual’s right to personal data protection. This means access regimes must observe legitimate-purpose, proportionality, data minimization, and adequate safeguards when SALNs are published or disclosed electronically.

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II. Custodianship and practical repository rules

• The SALN regime contemplates repository agencies: the original SALN is filed with the filer’s employing agency; certain high officers’ SALNs are deposited with particular custodians (e.g., the Office of the Ombudsman for certain officials, Office of the President for cabinet officials, Civil Service Commission for rank-and-file personnel). The Commission on Audit, Judiciary, and other custodians have their own procedures for access. Agency rules and Ombudsman circulars thus materially affect public accessibility in practice. (See CSC SALN FAQs and repository lists.)

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III. Key jurisprudence — what the courts have held

1. Public access is a recognized right but not absolute — the Supreme Court’s posture.
   In the leading high-court disposition that addressed the Ombudsman’s 2020 circular, the Supreme Court dismissed a petition challenging the circular but unequivocally stated that the public’s right of access to official records (including SALNs) is subject to regulation by the custodian to protect other legitimate interests and to ensure orderly custody and inspection. The Court therefore recognized both the constitutional/statutory right to information and the custodian’s power to regulate access. (G.R. No. 254516, Notice of Resolution, Feb. 2, 2021 — Biraogo / challenge to Memorandum Circular No. 1, series of 2020).

2. Custodianship may lawfully impose safeguards — but those safeguards must be reasonable.
   The Supreme Court and administrative pronouncements (and earlier administrative rules adopted by the judiciary itself for judges’ SALNs) accept that custodians may set reasonable conditions to prevent damage to records, to protect other persons’ rights, or to avoid interference with official functions — but the custodian is not free to nullify the public purpose of the SALN by erecting disproportionate barriers (e.g., blanket secrecy or near-impossible prerequisites). The 2021 rulings and administrative guidelines show a balancing approach: public right of access v. legitimate regulatory concerns.

3. Misdeclaration and sanctions: evidence and intent matter.
   Cases construing RA 6713 and disciplinary statutes show that not every omission or error in a SALN automatically produces administrative or criminal liability. Courts have required proof of wrongful intent or substantial evidence of misdeclaration/ill-gotten wealth, and have at times reversed or moderated penal administrative sanctions where mistakes could be explained or corrected. (See cases such as Navarro v. Ombudsman (G.R. No. 210128, Aug. 17, 2016) and other Ombudsman/Supreme Court decisions on SALN omissions and sanctions). The jurisprudence therefore treats SALN defects as serious but not mechanically punitive absent proof of bad faith or manifest disproportionality between assets and lawful income.

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IV. The normative spirit: transparency, accountability, and the public trust

1. Public office is a public trust. The SALN is an instrument to operationalize the constitutional promise that public officers are accountable and must lead modest lives. Disclosure serves the prevention and detection of corruption, enables informed public discourse, and supports institutions (Ombudsman, COA, media, civil society) in verifying whether an official’s wealth is explainable by lawful means.

2. Transparency as prophylaxis and civic check. The SALN promotes (a) deterrence of illicit enrichment, (b) evidence for investigations (administrative, criminal, impeachment), and (c) public confidence in government. For these goals to be realized, the SALN must be accessible, intelligible, and usable by legitimate requesters (investigators, journalists, researchers, citizens). Overly burdensome procedures that effectively deny access convert a transparency tool into a private record — undermining its constitutional purpose.

3. But transparency is not absolute — legitimate privacy and safety concerns exist. The State must also protect the safety of officials, the privacy of third parties (spouses, children), and sensitive personal data that may be unrelated to public duties. Hence the need for proportionate rules that enable scrutiny while guarding against misuse, identity theft, or threats to personal security — a balance that data-privacy law helps to institutionalize.

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V. Legal and practical conclusions — what “reopening” should mean in law-respecting practice

1. Reversal of the 2020 circular is legally permissible and constitutionally salient provided the new memorandum restores meaningful public access consistent with RA 6713 and the Constitution. The Ombudsman, as repository for many high-ranking officers, may issue implementing guidelines; these must not reimpose barriers that nullify the public’s statutory right to inspect SALNs. (The Supreme Court permits custodian regulation but insists on reasonableness.)

2. Any new Ombudsman memorandum should expressly do four things:

   • (a) Restore practical access — permit inspection and copying (or certified copies) during reasonable hours and under reasonable procedure, without an a priori notarized consent requirement that delegates to the declarant a veto over public inspection;
   • (b) Set narrow, legitimate restrictions — carve-outs for bona fide safety concerns, or for personal data of third parties not related to public duty; require redaction only where strictly necessary and for narrowly defined categories;
   • (c) Adopt electronic access with safeguards — publish SALNs in a searchable electronic repository (or provide certified electronic copies on request) subject to Data Privacy Act safeguards: purpose limitation, access logs, minimization, and NPC guidance; and
   • (d) Provide administrative remedies and timelines — put in place quick procedures for requests, a transparent fee schedule (if any), and a right to administrative appeal for denials with written reasons.

3. Ensure compatibility with the Data Privacy Act and Supreme Court guidance. The memorandum must square the public’s right to know with data-privacy principles and with the Court’s holding that custodians may regulate access but not destroy it. Reasonable, clearly-written rules will withstand judicial review; facially arbitrary or absolute secrecy will not.

4. Guard against “weaponization” while preserving investigatory use. The SALN can be abused — for political harassment, fishing expeditions, or doxxing of private family details. Guidelines should therefore permit bona fide investigative uses (media investigations, Ombudsman/COA fact-finding, court orders) while discouraging non-legitimate invasions of privacy. Clear standards for “legitimate investigative purpose” and penalties for misuse will protect both transparency and individual rights.

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VI. Recommended legal drafting points for Ombudsman Remulla’s memorandum (short form)

1. Begin with constitutional and statutory citations (Art. XI, §17; RA 6713, §8; duties under §5(e)).
2. State policy objective: restore meaningful public access consistent with the Data Privacy Act.
3. Provide concrete procedures: request forms, timeline for response, ability to obtain certified copies, reasonable fees, electronic access/portal, redaction rules narrowly tailored.
4. Prohibit blanket prior notarized consent requirement; allow consent where declarant affirmatively requests redaction of narrowly defined personal data unrelated to public duty.
5. Provide an oversight/appeal mechanism and require publication of denials with reasoned explanation.

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VII. Selected primary authorities (for citation and verification)

• 1987 Constitution, Article XI, Section 17 (Requirement to file SALN).
• Republic Act No. 6713 — Code of Conduct and Ethical Standards for Public Officials and Employees (Sections on SALN and public access).
• Data Privacy Act, RA No. 10173 (privacy constraints and NPC).
• Ombudsman Memorandum Circular No. 1, series of 2020 (amended guidelines that restricted access). — text and Ombudsman press release.
• Supreme Court — G.R. No. 254516 (Notice of Resolution, Feb. 2, 2021) — upholding that access may be regulated but not eliminated; dismissal of the challenge to the 2020 circular for lack of justiciability while articulating the balancing principles.

(Other useful case authorities on SALN misdeclaration and sanctions: Navarro v. Ombudsman (G.R. No. 210128, Aug. 17, 2016) and the decisions summarized in G.R. No. 225774 and related Ombudsman rulings.)

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VIII. Final observation (legal-policy judgment)

The SALN is an instrument of constitutional governance — a prophylactic and evidentiary tool to vindicate the public trust. Any normative legal regime must preserve meaningful public access while building in proportionate privacy and security safeguards. Ombudsman Remulla’s announced reversal is legally supportable and, if implemented carefully, will restore the constitutional balance between transparency and privacy. The success of any revised memorandum will depend on its concrete operational provisions: whether it restores practical inspection/copying, removes veto-like barriers (e.g., notarized blanket consent), provides speedy and inexpensive access, and adopts electronic publication with privacy safeguards. If those elements are present, the memorandum will realign practice with the constitutional spirit of accountability and the public’s right to information.

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Assisted by ChatGPT AI app, October 10, 2025.

COMELEC’S POWER TO INVESTIGATE & PROSECUTE ELECTION OFFENSES

Under Philippine law, the Commission on Elections (COMELEC) is authorized not only to administer and enforce election laws, but also to conduct preliminary investigations of alleged criminal violations of those laws, and to prosecute such cases — a function which is statutory, constitutional, and affirmed by Supreme Court jurisprudence.

The constitutional basis is Article IX-C, Section 2, paragraph (6) of the 1987 Constitution, which provides that COMELEC shall have power to “investigate and, where appropriate, prosecute cases of violations of election laws, including acts or omissions constituting election frauds, offenses, and malpractices.” Kilosbayan, Inc. vs. COMELEC (G.R. No. 128054, Oct. 1997) confirms that this constitutional grant is real and substantive.

Statutorily, Section 265 of the Omnibus Election Code (B.P. Blg. 881) explicitly states that the Commission “shall, through its duly authorized legal officers, have the exclusive power to conduct preliminary investigation of all election offenses punishable under this Code, and to prosecute the same.” It also allows COMELEC to avail itself of the assistance of other prosecuting arms of government. Under the implementing COMELEC Rules of Procedure (Rule 34, Section-2), provincial/city prosecutors (and their assistants), as well as state prosecutors, are given continuing authority to act as deputies of COMELEC in conducting such preliminary investigations and prosecutions — but that authority is derivative: it depends on COMELEC’s delegation and is subject to withdrawal.

Supreme Court decisions have consistently upheld that COMELEC’s Law Department is empowered to perform preliminary investigations of election offenses, and to initiate prosecutions. For example, in Barangay Association for National Advancement and Transparency (BANAT) v. COMELEC, the Court discussed Section 265 and held that COMELEC is the public prosecutor with exclusive authority to conduct preliminary investigations and prosecute election offenses under the Omnibus Election Code — with the deputized assistance of prosecutors where authorized. Also, in G.R. No. 170447 (2009), the Court reiterated that the Chief State Prosecutor and city/provincial prosecutors act only within the scope of authority delegated by COMELEC under Rule 34.

Importantly, an amendment by Republic Act No. 9369 (which amended Section 265) changed the wording to make power to conduct preliminary investigations concurrent among COMELEC and other prosecuting arms, rather than purely exclusive. Under that law, other prosecuting arms (including the DOJ via its prosecutors) may investigate and prosecute election offenses concurrently. Thus, while COMELEC continues to have constitutional and statutory authority, the DOJ is not entirely excluded; but the DOJ’s participation depends on the legal framework and whether the power is properly exercised.

CONCLUSION

COMELEC’s Law Department is empowered by law to conduct preliminary investigations of criminal violations of election laws and to prosecute them. The Department of Justice (DOJ) does not have an exclusive power in this realm; its role is either (a) by deputation / delegation under COMELEC, or (b) under concurrent authority after legal amendments (e.g. RA 9369) when conditions are met.

Hence, in any given case, COMELEC has the primary mandate; the DOJ may act, but only in accordance with law (delegation, concurrence, or residual jurisdiction under circumstances defined in statute).

https://jur.ph/jurisprudence/kilosbayan-inc-v-commission-on-elections?utm_source=chatgpt.com

https://lawphil.net/judjuris/juri2012/sep2012/gr_199082_2012.html?utm_source=chatgpt.com

https://lawphil.net/judjuris/juri2009/jun2009/gr_170447_2009.html?utm_source=chatgpt.com

https://lawphil.net/judjuris/juri2012/sep2012/gr_199082_2012.html?utm_source=chatgpt.com

Assisted by ChatGPT AI, October 5, 2025.

Rescission of the Deeds of Conditional Sale.

Spouses Noel John M. Kaw & Josephine Caseres-Kaw v. Heirs of Marilyn Nodalo et al., G.R. No. 263047, November 27, 2024 

Facts / Antecedents

1. The Spouses Kaw are registered owners of a parcel of land (Lot F, TCT No. T-158628) located in Cagmanaba, Oas, Albay, with an area of 3,040 sqm. 

2. In February 2014, the Kaw spouses, through dentist colleagues (including Ivy Orolfo), introduced the subject property to prospective buyers (respondents, including heirs of Marilyn Nodalo and others). They agreed to sell a 2,000 sqm undivided portion, for ₱1,200,000. The buyers proposed to pay in two 1,000 sqm tranches at ₱600,000 each, with ₱300,000 downpayment and six months for the balance. 

3. Two separate “Deeds of Conditional Sale” were executed (one on March 10, 2014; another on March 29, 2014) between Kaw spouses and the various respondents. Under those deeds:

The vendees made partial payments (down payments) toward the total consideration. 

The balance was to be paid within six months; failure to do so would permit rescission. 

Upon full payment, the vendors (Kaws) would execute and deliver the deed of absolute sale. 

Meanwhile, respondents would have beneficial possession and enjoyment. 

The deeds also contained a clause that respondents were prohibited from assigning, conveying, or hypothecating their rights under the agreement to third parties without prior written consent of the vendors. 

4. After the execution of the contracts, the Kaw spouses were surprised to find that respondents had erected cottages, fences, did improvements, and operated a beach-resort business (renting cottages to third parties) on the subject property. The Kaws contended these acts breached the terms of the deeds (including the prohibition on assignment/letting, the nature of improvements, etc.). 

5. Respondents, in turn, asserted they tendered payment of the balance under the conditional sale, but the Kaw spouses refused to accept. In fact, some respondents filed consignation cases in municipal trial court against Kaws (Civil Cases 1712-P, 1714-P) insisting on their right to tender and compel acceptance. 

6. On September 29, 2015, Spouses Kaw filed with the Regional Trial Court (RTC), Ligao City, a Complaint for Rescission (with prayer for preliminary injunction) against respondents. 

7. The RTC dismissed the rescission complaint for lack of merit; it found that respondents did not materially breach the contracts, and instead granted respondents’ counterclaim, ordering the Kaws to accept payment, execute the absolute deeds, pay taxes, surrender documents, and pay moral damages. 

8. The Court of Appeals affirmed (with modification deleting the award of moral damages). 

9. Kaws then filed a Petition for Review on Certiorari before the Supreme Court, raising primarily that (a) respondents committed fundamental breaches warranting rescission, and (b) respondents engaged in forum shopping in filing multiple actions (rescission vs consignation) in different courts. 

Issues

1. Whether the Court of Appeals erred in dismissing the Kaws’ Complaint for Rescission of the Deeds of Conditional Sale.

2. Whether respondents are guilty of forum shopping, thereby subjecting their counterclaims (or other actions) to dismissal or penalty.

Ruling (Disposition)

The Supreme Court denied the petition, and affirmed with modification the CA decision. 

Modifications included:

Ordering dismissal of the consignation cases (Civil Cases 1712-P and 1714-P) and associated appeals, on the ground of forum shopping. 

Directing respondents (Heirs of Marilyn Nodalo, Zenaida Chiquillo, and Atty. Rudyard Anthony M. Trinidad) to show cause within ten (10) days why they should not be cited for contempt for engaging in forum shopping. 

Referring the matter to the Integrated Bar of the Philippines for possible administrative action against their counsel for deliberate forum shopping. 

In all other respects, the decision of the CA (affirming the RTC, except for moral damages) stands. 

Ratio decidendi (Legal Reasoning)

1. Characterization as contract to sell (not conditional sale).

Although the instruments were denominated “Deed of Conditional Sale,” the Court examined the substantive terms and held that the true intention of the parties was to create contracts to sell, because:

The vendors (Kaws) retained the right to unilaterally rescind upon nonpayment (i.e. a right of rescission). 

The obligation of the Kaws to execute a deed of absolute sale arises only after full and satisfactory payment of the purchase price. 

The features of the deed mirror those of a contract to sell rather than a true conditional sale (i.e. not a suspensive condition in the classical sense). 

Thus, the remedy under Article 1191 (rescission) may be available, as the obligations are reciprocal. 

2. On the remedy of rescission: requirement of substantial (not slight) breach.

The Court reaffirmed that rescission is not available for slight or casual breaches — only fundamental or substantial breaches (i.e., those which defeat the very object of the contract) justify rescission. 

In the present case:

The Kaw spouses alleged that respondents breached by (i) erecting permanent improvements, beyond what was allowed, contrary to supposed verbal limitations; and (ii) leasing cottages to third parties (thus assigning or hypothecating their rights). 

The Court found that the written deed does not distinguish between “permanent” and “temporary” improvements; nor does it specify material limitations. Parol evidence to vary or limit those terms was not sufficiently proven or accepted. 

Regarding the leasing/rental of cottages, the Court held that absent a clear prohibition in the deed, the act of leasing did not necessarily amount to a material breach that defeats the contract’s object. 

Thus, the alleged acts did not constitute fundamental breach; hence the Kaws could not rescind the deed. 

3. On forum shopping and dismissal of duplicative actions.

The Court agreed with the Kaw spouses that respondents (notably Chiquillo and Nodalo) engaged in forum shopping by instituting multiple actions (consignation in MCTC, and rescission in RTC) over the same subject matter. 

The Court held that such duplicative actions pose risk of conflicting results and violate procedural rules. Accordingly:

The consignation cases (MCTC) are dismissed to prevent conflicting rulings. 

The respondents engaged in forum shopping are to show cause why they should not be held in contempt. 

The Court may refer the matter for administrative action against counsel who deliberately engaged in forum shopping. 

4. Consequence: upholding CA and RTC decisions (except modification) and denying petition.

Having found that the Kaw spouses failed to establish fundamental breach and that respondents’ counterclaims should remain, the petition must be denied. The Court merely adjusts for the forum-shopping issues.

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Assisted by ChatGPT AI app, October 1, 2025.