Kris Aquino and James Yap cannot adopt Bimby jointly or sequentially; only one of them can adopt Bimby

Several days ago, Kris Aquino revealed in a Boy Abunda interview that her marriage to James Yap has been declared void by a Quezon City court. Kris also revealed that, for purposes of inheritance, she is planning to adopt Bimby and her other illegitimate son, Josh.

Reason why Baby James is illegitimate

Based on misinformation, some people in Internet chat rooms and in Facebook are saying that all children born in a void marriage are illegitimate. We must distinguish:

[1] If a marriage is declared void because of Article 36 of the Family Code (“psychological incapacity”), then a child is considered legitimate under Article 54. The article states:

Children conceived or born before the judgment of annulment or absolute nullity of the marriage under Article 36 has become final and executory shall be considered legitimate. Children conceived or born of the subsequent marriage under Article 53 shall likewise be legitimate.

[2] The court declared Kris and James’s marriage void because of Article 35 of the Family Code (“lack of authority of the solemnizing officer”). As a consequence, Bimby, better known as “Baby James”, is illegitimate.

On the other hand, Josh is illegitimate because his parents, Kris and Philip Salvador, were not married.

Please read my article “Legal lessons from the Kris Aquino - James Yap breakup: legal separation, annulment, declaration of nullity, essential and formal requisites of marriage”.

Is the consent of the father of an illegitimate child required in adoption? Section 9, paragraph (b) of RA 8552 states that the written consent of the biological parent/s is necessary. UP College of Law professor Danilo L. Concepcion in his article “Domestic Adoption: Law and Procedure” (IBP Journal, March 2009, Vol. 34, No. 1) states that the reason why RA 8552 requires such consent is that their parental authority over the child (the prospective adoptee) will be terminated. Several women have e-mailed about this kind of situation. Either they do not know where the biological father of their illegitimate children is or the father is making things difficult for them. One woman even told me that the biological father asked her for money in exchange for his written consent. Prof. Concepcion argues (and I agree with him) that since an illegitimate child is under the sole parental authority of the mother under Article 176 of the Family Code, then the consent of the biological father is not necessary. Prof. Concepcion states that the problem is with the wording of the law. He says that instead of “biological parent/s” the law should have used “legal parent/s” instead.

Why should an unwed mother adopt her own child?

To a lot of Filipinos, Kris’s plan to adopt Baby James and Josh doesn’t make sense. Well, let me explain.

Legally speaking, the relationship between Kris and her children, or between any unwed mother and her child, for that matter, is illegitimate. In order for an unwed mother to legitimize her relationship with her illegitimate child, she has to file a petition under RA 8552, our domestic adoption law.

What if an unwed mother gets married subsequently to the biological father?

The legal remedy would not be adoption under RA 8552 but legitimation under Articles 177 to 182 of the Family Code (that is, if there were no legal obstacles when the child was conceived or born).

What if an unwed mother gets married to a man (not the biological father) who wants to adopt her child?

RA 8552 provides that husband and wife must adopt jointly. In this situation, the result would be (1) the relationship between the mother and the child will become legitimate, and (2) the man will acquire parental authority over the child.

The problem in this situation is when the biological father refuses to give his consent to the adoption. As I explained in my article on adoption, RA 8552 requires the consent of the biological father.

February 2011, I wrote to more than a dozen members of Congress asking them to consider filing a bill clarifying or amending RA 8552 so that the biological father’s consent will no longer be necessary. It’s now February 2012 and I still have not received any reply from these members of Congress.

Instead of waiting for a law clarifying or amending RA 8552, a mother or her husband can file a petition for declaratory relief before a competent court asking that the term “biological parent/s” be interpreted to mean “legal parent/s”.

If Kris adopts Bimby, will James Yap later on be able to adopt him?

No. Both the Family Code and RA 8552 state that, as a rule, a person who has already been adopted cannot be adopted again. The Family Code states it negatively while RA 8552 states it positively. Here’s the comparison:

Article 187, Family Code

Section 8, RA 8552

The following may not be adopted: (1) A person of legal age, unless he or she is a child by nature of the adopter or his or her spouse, or, prior to the adoption, said person has been consistently considered and treated by the adopter as his or her own child during minority. (2) An alien with whose government the Republic of the Philippines has no diplomatic relations; and (3) A person who has already been adopted unless such adoption has been previously revoked or rescinded.

Who May Be Adopted. — The following may be adopted: (a) Any person below eighteen (18) years of age who has been administratively or judicially declared available for adoption; (b) The legitimate son/daughter of one spouse by the other spouse; (c) An illegitimate son/daughter by a qualified adopter to improve his/her status to that of legitimacy; (d) A person of legal age if, prior to the adoption, said person has been consistently considered and treated by the adopter(s) as his/her own child since minority; (e) A child whose adoption has been previously rescinded; or (f) A child whose biological or adoptive parent(s) has died: Provided, That no proceedings shall be initiated within six (6) months from the time of death of said parent(s).

Can Kris adopt Bimby without the consent of James Yap?

This issue is very interesting. RA 8552 does provide that an unwed mother can adopt her own child to raise the child’s status to that of a legitimate child. But, as I discussed above, RA 8552 also provides that the biological father’s consent is necessary. The issue of consent most often arises when the mother gets married and her husband wants to adopt her child. In this situation, courts require that the prospective adopter present the notarized affidavit of consent of the biological father.

But if Kris wants to adopt Bimby by herself, would she still need James’s consent? Kris will do a lot of women a big favor if she goes ahead with the adoption without asking for James’s consent. Perhaps then, if James refuses to give his consent, the issue can reach the Supreme Court.

Can Kris and James Yap jointly adopt Bimby?

No. RA 8552 and the Family Code speak of “joint adoption” by husband and wife.

By invoking the “best interest of the child doctrine”, can Kris and James file for Bimby’s adoption at the same time and in the same petition?

This novel and interesting possible remedy faces both practical and legal problems:

[1] Right now, James Yap only has visitation rights over Bimby. If he is able to adopt Bimby, he will have parental authority over Bimby. Will Kris agree to James being able legally to decide on all matters relating to Bimby?

[2] The Family Code speaks of parental authority in several ways:

• an unwed mother’s exclusive parental authority over her child;
• the spouse’s joint parental authority over their children;
• the parental authority of a man and woman whose marriage has been declared void because of Article 36;
• the parental authority of a man or woman whose spouse has died;
• substitute parental authority by grandparents;
• special parental authority of a school, its administrators, and teachers.

As you can see, the Family Code does not speak of parental authority by two unmarried persons over their common child.

If Kris adopts Baby James, will he later on be able to inherit from PNoy and the other Aquino siblings?

No. The legal effects of adoption, like the right to inherit, only apply to Kris and Baby James.

Should Kris adopt Bimby and Josh for purposes of inheritance?

It depends on whether Kris wants to get married again and have children with her husband.

[1] If Kris gets married again and has children with her husband, then she should adopt Baby James and Josh. Why? So that Article 176 of the Family Code will not apply. Under Article 176, the legitime of an illegitimate child is only 50% of what a legitimate child is entitled to. If Kris adopts Baby James and Josh, they will be able to inherit from her as legitimate children.

[2] If Kris does not plan to get married again, then she does not have to adopt Baby James and Josh. Why? Because Baby James and Josh are already protected financially by the provisions on intestate succession under the New Civil Code of the Philippines (NCC).

If Kris dies without a last will, then under Article 988 of the NCC, Baby James and Josh will inherit all of her estate. Since her parents Ninoy and Cory are dead, Baby James and Josh are her only compulsory heirs. The NCC excludes PNoy and the other siblings from inheriting from Kris. Please read my article “Heirs and inheritance (Part 3): Rights of illegitimate children when their parent dies without a last will”.

Another alternative for Kris in providing financially for Baby James and Josh is for her to execute a last will under Article 901 of the NCC; she can designate all of the so-called “free portion” to Baby James and Josh.

300,000+ visitors and counting: Thanks for browsing this blog

I started this blog October 30, 2005 and last week, my website tracker (Sitemeter.com) reported that some 300,000+ visitors from 81 countries have now browsed this site.

The numbers are gratifying for any blogger but they do not really represent the number of people who have actually or beneficially used this blog. We have to consider factors such as bounce rates, time spent on site, number of pages viewed, etc. Also, I use three trackers: Google Analytics, Sitemeter and Bravenet. Due to the differences in the way these trackers work, Analytics reports the highest figure while Bravenet reports the lowest.

The service I provide in this blog and in my Family Matters website (which has now reached 225,000+ visitors from 93 countries) is free legal information and Biblical counseling. As I told one person who e-mailed me, what is legal is not always Biblical, and what is Biblical is not always legal. In my website and blogs however, what is Biblical will always take precedence.

Do not depend on “legal information” found in chat rooms or online forums

Despite this milestone for this blog, three things sadden me:

One, I have stumbled upon chat rooms or online forums for OFWs, single parents, etc. and I am amazed at the tremendous amount of misinformation about legal matters I found in these forums. The problem is that people in these chat rooms, rather than inquiring from lawyers, rely on each other and on people who pretend to know the law. It does not matter whether a person has gone to law school or does good research on legal topics. Answering people’s questions about legal matters is considered as “practice of law” (as the Supreme Court ruled in the case involving the late Sen. Rene Cayetano and former COMELEC chairman Christian Monsod). The practice of law is reserved only for those who have passed the bar exams and are in good standing with the Integrated Bar of the Philippines.

Some people in chat rooms and online forums also copy and paste from my blog posts without giving any credit. For example, portions of my post “Can nephews and nieces inherit from their grandparents, unmarried aunts or uncles?” were posted verbatim without any attribution in an online forum. (Click the image to the left so you can compare my blog post and what was posted in the forum.)

If you do have legal questions, you should inquire from lawyers directly or from government offices. I have listed in a tab below this blog’s title graphic the contact information of government offices where you can get free legal assistance. For example, you can ask for free legal help from the Department of Justice Action Center (DOJAC). It acts on complaints, requests for assistance and legal queries of walk-in clients of the DOJ. For legal assistance please visit the Department of Justice Action Center (DOJAC) Main Office, Ground Floor, Multi-Purpose Building, Padre Faura Street, Ermita, Manila; Telephone no: 523-84-81; Email Address: dojac@doj.gov.ph or visit any Regional/Provincial/City Prosecution Offices in your town or city.

You can also try asking for free legal help or information from the following:

1. Integrated Bar of the Philippines (IBP) chapter offices in your town or city, usually located in the Hall of Justice
2. OLA (Office of Legal Aid) of the UP College of Law; Room 107, Malcolm Hall, University of the Philippines Diliman, Quezon City, 1101; Tel. No. 927-6260; Trunkline: 920-5514 local 120, 121; Telefax: 920-5514 loc. 106; Office Hours: 8:00 am - 12:00 pm; 1:00 pm - 5:00 pm
3. Legal Aid Bureau of the San Beda College of Law in Mendiola, Manila
4. CJ Roberto Concepcion Legal Aid Clinic of the UST Institute of Civil Law, Espana, Manila; contact number: local 8349, direct 732-3045 (main UST trunklines 406-1611)
5. Sebastinian Office of Legal Aid, San Sebastian College Institute of Law; contact tel. no. 734-8931 local 312
6. Commission on Human Rights chapter offices
   

Two, the most visited page of this blog is that on adultery, concubinage, and psychological violence. The other pages with a high number of visits are those dealing with annulment or declaration of nullity of marriage, entertainer Amy Perez’s failed petition to have her marriage to Brix Ferraris declared null and void, and custody battles over children.

Three, there are more people who visit this blog rather than my Salt and Light blog on how to build strong relationships, marriages and families. Compared to this blog, my SL blog is limping along with only 51,000+ visitors since December 2005. It seems that there are more people who want to know about how to end their marriage than people concerned about building stronger marriages.

I remember Valentine’s Day five years ago. I received an e-mail from a woman, competent and highly successful in her profession. The problem was, her professional success had led to the breakdown of her marriage because her husband had become totally insecure. The question she desperately asked me was, “Is there hope for my marriage?” I spent the whole afternoon of that Valentine’s Day answering the e-mail, assuring her that yes, there was still hope for her marriage.

My hope is that more people will browse my Salt and Light blog and learn how to reclaim their marriage and rebuild their family. Some of my favorite articles are Lessons in love and life from Miriam Quiambao, Emotional word pictures as a communication tool for increasing intimacy between husbands and wives, and Men are terrible mind readers ...



I also hope that that those of you going through various marital difficulties will try to get hold and watch Kirk Cameron's movie on relationships; you can watch the YouTube trailer above. (Read more About FIREPROOF; surf to the FIREPROOF blog).

About FIREPROOF, the movie

At work, inside burning buildings, Capt. Caleb Holt lives by the old firefighter's adage: Never leave your partner behind. At home, in the cooling embers of his marriage, he lives by his own rules.

Growing up, Catherine Holt always dreamed of marrying a loving, brave firefighter...just like her daddy. Now, after seven years of marriage, Catherine wonders when she stopped being "good enough" for her husband.

Regular arguments over jobs, finances, housework, and outside interests have readied them both to move on to something with more sparks.

As the couple prepares to enter divorce proceedings, Caleb's father challenges his son to commit to a 40-day experiment: "The Love Dare." Wondering if it's even worth the effort, Caleb agrees-for his father's sake more than for his marriage. When Caleb discovers the book's daily challenges are tied into his parents' newfound faith, his already limited interest is further dampened.

While trying to stay true to his promise, Caleb becomes frustrated time and again. He finally asks his father, "How am I supposed to show love to somebody who constantly rejects me?"

When his father explains that this is the love Christ shows to us, Caleb makes a life-changing commitment to love God. And so with God's help he begins to understand what it means to truly love his wife.

But is it too late to fireproof his marriage? His job is to rescue others. Now Caleb Holt is ready to face his toughest job ever...rescuing his wife's heart.

Ad cautelam: filing of pleadings and appearing in court to question its jurisdiction or as a precautionary measure

Plain English / Plain Language version of “ad cautelam” Two years ago, in an MCLE seminar sponsored by the Quezon City IBP, the speaker on Civil Procedure (from Romulo Mabanta) said that instead of “ad cautelam” or “ex abundanti ad cautelam”, lawyers should simply use the phrase “with express reservation on jurisdiction”.

The Latin term “ad cautelam” can be translated into English as “for security”, “as a precaution”, or “to be on the safe side.” The phrase “ex abundanti ad cautela” means “with extreme caution”.

The Revised Rules of Court do not have a specific provision on ad cautelam. But it has been used in at least two ways:

[1] To question a court’s jurisdiction and at the same time be able to file pleadings, lawyers can caption their pleadings as “ad cautelam”. In court hearings, lawyers must inform the judge that they are questioning the court’s jurisdiction.

[2] Ad cautelam pleadings may be filed as a precautionary measure to preserve a party’s remedies.

Using ad cautelam to file pleadings or ask for reliefs while questioning a court’s jurisdiction

[1] GMA’s electoral sabotage case before the Pasay City RTC

Lawyers for former President Gloria Macapagal-Arroyo (GMA) have been filing pleadings captioned “ad cautelam” with the Pasay City Regional Trial Court. They are questioning before the Supreme Court the RTC’s jurisdiction over the electoral sabotage case filed by the COMELEC against the former president. But at the same time, they have been asking the RTC for certain reliefs for GMA like hospital arrest, the use of a cellphone and laptop, etc. By captioning their pleadings with ad cautelam, these lawyers are reminding the RTC that they are not accepting its jurisdiction over the case.

[2] Does a rehabilitation court have jurisdiction over a partially executed NLRC decision?

Many years ago, I represented a former hotel chef. He had won his NLRC case for back wages against the hotel, and the decision had been partially executed. But the hotel filed for corporate rehabilitation with the Regional Trial Court in Manila, and the judge ordered all parties with money claims against the hotel to file their Answer. Parties who failed to file their Answer could no longer pursue their claims.

If I had filed an Answer for my client, it would have meant that I was accepting the court’s jurisdiction. My theory was that the NLRC had jurisdiction because it was a labor case and its decision had been partially executed. But as a precaution, I filed with the Manila RTC a pleading captioned “Manifestation/Motion ex abundanti ad cautelam”. In the pleading, I stated that while my client was complying with the court’s order, he was questioning its jurisdiction. In layman’s terms, it was better safe than sorry.

Using ad cautelam as a precautionary measure

[1] Aguedo F. Agbayani, petitioner, vs. The Commission On Elections And Rafael M. Colet, respondents. G.R. No. 87440-42 June 13, 1990

Agbayani, a Pangasinan gubernatorial candidate, filed pre-proclamation protest cases against his political rival Colet. When Colet was proclaimed as governor, Agbayani filed an election protest. Because of his pending pre-proclamation cases, he captioned his election protest ex abundante ad cautelam. The Comelec, acting on the election protest, required Colet to file a responsive answer. Agbayani then filed a reply, which he also captioned ad cautelam.

The Comelec dismissed Agbayani’s pre-proclamation cases and his motion for reconsideration. It said that the pre-proclamation controversy became moot and academic when Agbayani filed the election protest and his reply, even if they were both captioned ad cautelam.

Agbayani appealed to the Supreme Court. Ruling in his favor, the Court noted that Agbayani filed the election protest ad cautelam (or “for safety’s sake) just in case the Comelec dismissed his pre-proclamation cases. For the upcoming barangay elections, a Comelec resolution provided that all ballot boxes would be used for the barangay elections, unless they were not involved in any pre-proclamation-controversy, election protest, or official investigation. Agbayani thus wanted to preserve all the ballot boxes and their contents so that he could file an election protest later on. The Court said:

As the above-mentioned cases involved only nine precincts, it was only prudent for the petitioner to file his protest ad cautelam in case the pre-proclamation controversy was ultimately dismissed and it became necessary for him to activate his protest. The protest would involve all the precincts in the province. If he had not taken this precaution, an the other ballot boxes would have been emptied and their contents would have been burned and forever lost.

As to Agbayani’s filing of a reply, the Court said:

It was not the fault of the petitioner if the COMELEC decided to give due course to the protest right away even if it was ad cautelam. The protest was at that time only tentative, awaiting the disposition of the pre-proclamation controversy. The petitioner did file a reply to the private respondent’s answer with counter-protest, but it was only to prevent any declaration that he had by his inaction waived, the right to file responsive pleadings. Such a reply did not make the pre-proclamation controversy moot and academic.

Most indicative of the petitioner’s intention is the express reservation he made in the protest ad cautelam itself, where he clearly stated:

As additional precautionary measure, the protestant herein is filing this protest and cautela(m), without withdrawing his petitions in said pre-proclamation controversy, in order to exempt from the provisions of Section 1 of Resolution No. 2035 the precincts hereinafter specified. (Emphasis supplied)

[2] Francisco I. Chavez, Petitioner, versus Commission On Elections, Respondent. G. R. No. 105323, July 3, 1992. G. R. No. 105323, July 3, 1992

Former Solicitor General Francisco I. Chavez, a senatorial candidate in the 1992 elections, alleged that he lost at least 1.7 million votes because of a nuisance candidate with the same surname as his. On May 23, 1992, he filed an urgent petition before the Comelec asking it to [1] implement its May 12, 1992 resolution with costs de oficio; [2] to re-open the ballot boxes in 13 provinces including the National Capital Region involving some 80,348 precincts and to scan for the “Chavez” votes for purposes of crediting the same in his favor; [3] make the appropriate entries in the election returns/certificates of canvass; and [4] to suspend the proclamation of the 24 winning candidates.

Dissatisfied with the failure of the Comelec to act on his petition, Chavez filed with the Supreme Court an urgent Petition Ad Cautelam for prohibition and mandamus, with prayer for the issuance of a temporary restraining order, enjoining the Comelec from proclaiming the 24th highest senatorial candidate, without first implementing respondent Comelec’s resolution of May 12, 1992 and acting upon petitioner’s letter/complaint dated May 14, 1992 and urgent petition dated May 22, 1992.

On June 4, 1992, the Supreme Court issued a Temporary Restraining Order enjoining the Comelec from proclaiming the 24th winning senatorial candidate and setting the case for hearing on June 9, 1992. On the same day, Chavez filed a manifestation stating that on May 30, 1992, his urgent petition dated May 22, 1992 was dismissed by the Comelec. He also prayed that the Petition Ad Cautelam be considered a regular petition.

On June 8, 1992, Senator Agapito Aquino (the 24th ranked senator) filed a Motion for Leave to Intervene with Comment in Intervention praying for the dismissal of Chavez’s petition. Sen. Aquino argued that the petition was in the nature of a pre-proclamation controversy, which was not allowed in elections involving senators.

The Supreme Court ruled in Sen. Aquino’s favor, stating that Chavez’s proper recourse is to file a regular election protest which, under the Constitution and the Omnibus Election Code, exclusively pertains to the Senate Electoral Tribunal.

[3] Hongkong And Shanghai Banking Corporation Limited, petitioner, vs. Cecilia Diez Catalan, respondent. G.R. No. 159590, October 18, 2004, and HSBC International Trustee Limited, petitioner, vs. Cecilia Diez Catalan, respondent. G.R. No. 15959, October 18, 2004

Sometime in March 1997, Frederick Arthur Thomson (Thomson) issued five HSBANK checks amounting to HK$3,200,000.00, payable to Cecilia Diez Catalan (Catalan). When the checks were deposited, HSBANK returned them purportedly for reason of “payment stopped” pending confirmation, despite the fact that the checks were duly funded.

In January 2001, Catalan filed before the RTC a complaint for a sum of money with damages against HSBANK due to its alleged refusal to pay her the value of the checks issued by Thomson.

In September 2001, Catalan filed an Amended Complaint impleading petitioner HSBC TRUSTEE as co-defendant and invoking Article 19 of the Civil Code as basis for her cause of action. Catalan prayed that HSBANK and HSBC TRUSTEE be ordered to pay Php 20,864,000.00 representing the value of the five checks at the rate of Php 6.52 per HK$1 as of January 29, 2001 for the acts of HSBANK and HSBC TRUSTEE in refusing to pay the amount justly due her, in addition to moral and exemplary damages, attorney’s fees and litigation expenses.

HSBANK filed a motion for extension of time to file an Answer or a motion to dismiss. On October 2, 2001, HSBANK filed a Motion to Dismiss Amended Complaint alleging, among other grounds, that it did not submit to the jurisdiction of the RTC when it filed its motion for extension of time.

On the other hand, HSBC TRUSTEE, without submitting itself to the jurisdiction of the RTC, filed a Special Appearance for Motion to Dismiss Amended Complaint, questioning the jurisdiction of the RTC over it. HSBC TRUSTEE alleged that tender of summons through HSBANK Makati did not confer upon the RTC jurisdiction over it.

On May 15, 2002, the RTC issued an Order denying the two motions to dismiss. HSBANK and HSBC TRUSTEE filed separate motions for reconsideration but both were denied by the RTC in an Order dated December 20, 2002.

On February 21, 2003, Catalan moved to declare HSBANK and HSBC TRUSTEE in default for failure to file their Answer to the amended complaint.

On March 5, 2003, HSBANK and HSBC TRUSTEE filed separate “petitions for certiorari and/or prohibition” with the Court of Appeals (CA).

Subsequently, HSBANK and HSBC TRUSTEE filed before the RTC separate Answers ad cautelam, both dated March 18, 2003, as a “precaution against being declared in default and without prejudice to the separate petitions for certiorari and/or prohibition then pending with the CA”.

Among several grounds for their appeals, HSBANK and HSBC TRUSTEE alleged that the Court of Appeals committed serious error by holding that they had submitted to the jurisdiction of the trial court by filing an Answer to the Amended Complaint.

Issue: Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE when they filed their respective Answers ad cautelam?

The Supreme Court ruled:

Against HSBANK

In favor of HSBC TRUSTEE

The Rules of Court provides that a court generally acquires jurisdiction over a person through either a valid service of summons in the manner required by law or the person’s voluntary appearance in court. HSBANK initially filed a Motion for Extension of Time to File Answer or Motion to Dismiss. HSBANK already invoked the RTC’s jurisdiction over it by praying that its motion for extension of time to file answer or a motion to dismiss be granted. The Court has held that the filing of motions seeking affirmative relief, such as, to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, are considered voluntary submission to the jurisdiction of the court. Consequently, HSBANK’s expressed reservation in its Answer ad cautelam that it filed the same “as a mere precaution against being declared in default, and without prejudice to the Petition for Certiorari and/or Prohibition xxx now pending before the Court of Appeals” to assail the jurisdiction of the RTC over it is of no moment. Having earlier invoked the jurisdiction of the RTC to secure affirmative relief in its motion for additional time to file answer or motion to dismiss, HSBANK, effectively submitted voluntarily to the jurisdiction of the RTC and is thereby estopped from asserting otherwise, even before this Court.

In contrast, the filing by HSBC TRUSTEE of a motion to dismiss cannot be considered a voluntary submission to the jurisdiction of the RTC. It was a conditional appearance, entered precisely to question the regularity of the service of summons. It is settled that a party who makes a special appearance in court challenging the jurisdiction of said court, e.g., invalidity of the service of summons, cannot be considered to have submitted himself to the jurisdiction of the court. HSBC TRUSTEE has been consistent in all its pleadings in assailing the service of summons and the jurisdiction of the RTC over it. Thus, HSBC TRUSTEE cannot be declared in estoppel when it filed an Answer ad cautelam before the RTC while its petition for certiorari was pending before the CA. Such answer did not render the petition for certiorari before the CA moot and academic. The Answer of HSBC TRUSTEE was only filed to prevent any declaration that it had by its inaction waived the right to file responsive pleadings.

More to come. For now, let me leave you with this quote from Congressman Ronnie Zamora. During the 2005 impeachment deliberations against GMA, Congressman Zamora said that his father told him: “Keep away from lawyers who start their sentences with ex abundanti ad cautela.”

Heirs and inheritance (Part 9): Last will must be probated; Preterition (when a compulsory heir is omitted in a last will)

Legal procedures in the probate of a last will: Rule 75 Production of Will; Allowance of Will Necessary Rule 76 Allowance or Disallowance of Will Rule 77 Allowance of Will Proved Outside of Philippines Rule 78 Letters Testamentary and of Administration of Estate Thereunder Rule 79 Opposing Issuance of Letters Testamentary; Petition and Contest for Letters of Administration Rule 80 Special Administrators Rule 81 Bonds of Executors and Administrators Rule 82 Revocation of Administration, Death, Resignation and removal of Executors and Administrators Rule 83 Inventory and Appraisal; Provision for Support of Family Rule 84 General Powers and Duties of Executors and Administrators Rule 85 Accountability and Compensation of Executors and Administrators Rule 86 Claims Against Estate Rule 87 Actions by and against Executors and Administrators Rule 88 Payments of the Debts of the Estate Rule 89 Sales, Mortgages, and Other Encumbrances of Property of Decedent Rule 90 Distribution and Partition of the Estate

Philippine law requires that a last will, whether notarial or holographic, must be probated or allowed by a court before it can be given effect. Rule 75 of the Rules of Court states:

Sec. 1. Allowance necessary; Conclusive as to execution. - No will shall pass either real or personal estate unless it is proved and allowed in the proper court. Subject to the right of appeal, such allowance of the will shall be conclusive as to its due execution.

The Register of Deeds will not transfer the titles of lands to the persons named in the last will unless they submit the court order approving the will.

The Regional Trial Court of the place where the testator (the person who executed the last will) died has jurisdiction over the probate of the will.

Within twenty days after knowing of the testator's death, the person who has custody of the will must deliver the will to the court or to the person named in the will as executor. In case of that person’s refusal to deliver the will, the court can impose a fine or order that person’s imprisonment until it is delivered.

Who may petition for the probate of the will?

Section 1 of Rule 76 states:

Any executor, devisee, or legatee named in a will, or any other person interested in the estate, may, at any time after the death of the testator, petition the court having jurisdiction to have the will allowed, whether the same be in his possession or not, or is lost or destroyed.

What if a compulsory heir is omitted in a last will?

This situation leads to what is called in law as “preterition”. It is covered by Articles 854 and 855 of the New Civil Code of the Philippines.

Art. 854. The preterition or omission of one, some, or all of the compulsory heirs in the direct line, whether living at the time of the execution of the will or born after the death of the testator, shall annul the institution of heir; but the devises and legacies shall be valid insofar as they are not inofficious.

If the omitted compulsory heirs should die before the testator, the institution shall be effectual, without prejudice to the right of representation.

Art. 855. The share of a child or descendant omitted in a will must first be taken from the part of the estate not disposed of by the will, if any; if that is not sufficient, so much as may be necessary must be taken proportionally from the shares of the other compulsory heirs.

Simply stated, the probate court will not allow the preterition or omission of the compulsory heirs. The omitted heirs can compel the other heirs to contribute proportionally from their respective shares until their own shares have been satisfied.

The only way for compulsory heirs to be deprived of their inheritance is through a valid disinheritance. Please read my posts:

• Disinheriting children and descendants, legitimate as well as illegitimate
• Disinheriting your spouse

Heirs and inheritance (Part 8): Do inherited properties belong exclusively to the spouse who inherited them or to both spouses?

Answer: It depends on what system of property relations governs the spouses, whether absolute community of property (ACP), conjugal partnership of gains (CPG), or complete separation of property.

For Filipinos who got married after August 3, 1988 (the date of effectivity of the Family Code of the Philippines), their system is most probably absolute community of property. Why? Because most Filipinos get married without knowing that they can choose their system of property relations.

Under the system of absolute community of property, all properties belonging to the man and woman, at the time of the celebration of their marriage, automatically become part of their community property (see Article 91 of the Family Code). All properties acquired during their marriage are also community property, with certain exceptions under Article 92.

So, assuming that the system of property relations between you and your spouse is absolute community of property (ACP):

If	then
(1) you inherited the property before the marriage …	it is part of the community property, even if: the title to the property still remains in the name of the person from whom you inherited the property; the title to the property has been transferred to your name; or the property remains titled in your name all throughout your marriage.
(2) you inherited the property during the marriage …	it is not part of the community property since it was acquired by gratuitous title as provided under Article 92 of the Family Code; the exception is when the testator (the person who gave you the property through a last will) expressly provided that it will be community property.

Related post: Heirs and inheritance (Part 7): Is property acquired before marriage the exclusive property of each spouse or does it belong to both spouses?

Heirs and inheritance (Part 7): Is property acquired before marriage the exclusive property of each spouse or does it belong to both spouses?

Question: “I got married in 2001; some people in an online forum told me that properties acquired when I was single and titled in my name are still mine. Does my husband have any right to these properties? What will happen to these properties when I die?”

Answers:

[1] “I got married in 2001; some people in an online forum told me that properties under my name acquired when I was single are still mine.”

These people are wrong.

Most Filipinos are confused as to whether properties acquired before marriage are the exclusive property of each spouse or belong to both spouses. This confusion can be cleared up by:

• determining what date the marriage was solemnized; if it was solemnized before August 3, 1988, then the applicable law is the New Civil Code of the Philippines, not the Family Code;
  
  
• determining whether the man and woman, before they got married, agreed on a system of property relations that would govern them; if there was no agreement, then for marriages solemnized after August 3, 1988 (date of effectivity of the Family Code), absolute community of property is automatically the system.

The problem is that most Filipinos get married without knowing that they can choose among absolute community of property (ACP), conjugal partnership of gains (CPG), or complete separation of property.

Since you got married in 2001 (and it seems there was no agreement between you and your husband before you got married), then absolute community of property is automatically the system between yourselves. Under Article 91 of the Family Code, upon your marriage, all properties belonging to either you or your husband automatically became part of the community property.

Art. 91. Unless otherwise provided in this Chapter or in the marriage settlements, the community property shall consist of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter.

For example, you bought a subdivision lot while you were single. The lot is titled in your name. At the time you got married, this lot automatically became part of the community property between you and your husband, even if the title remains in your name all throughout your marriage. If you are going to sell this subdivision lot, you will need your husband’s conformity since it has become community property.

Upon your death, this lot will be distributed as follows:

• 50% will go to your husband as his share in the community property;
  
  
• 50% will be divided among your heirs (if you have no children and your parents or grandparents are dead, then your husband will get 25% while your brothers and sisters will divide among themselves the other 25%, under Art. 1001 of the New Civil Code of the Philippines).

[2] When are properties acquired before marriage the exclusive property of each spouse?

Exception 1:

Exception 2:

If the man and woman before getting married agreed that their property relations would be governed either by conjugal partnership of gains (Articles 105 to 133 of the Family Code) or by complete separation of property (Article 143 to 146 of the Family Code). Article 109 enumerates what the exclusive properties of each spouse are. Paragraph (1) expressly states that property “brought to the marriage as his or her own” is exclusive property.

If the marriage was solemnized before August 3, 1988 (date of effectivity of the Family Code), then properties acquired before marriage are the exclusive property of each spouse. Why? Because the New Civil Code of the Philippines (the prevailing law before the Family Code became effective) provided that in the absence of an agreement between the future spouses, the default system of property relations would be conjugal partnership of gains.

Related post: “Heirs and inheritance (Part 8): Do inherited properties belong exclusively to the spouse who inherited them or to both spouses?”

Precautions in buying real estate

(Note: This post is part of my August 2009 article “Guidelines and precautions in buying church property” in another blog. You can download a free PDF of that article. The shortened version below is for the benefit of individuals buying real property.)

[1] Verify the title’s authenticity with the Register of Deeds; verify the seller’s identity

Get a certified true xerox copy of the land title. Do not depend on the copy provided by the landowner, even if it is certified. According to one media report, there are more than 100,000 fake land titles circulating in the Philippines.

If possible, check also if the person saying that he is the landowner is really the person mentioned as the registered owner. Meaning, the person saying that he is the landowner may just be posing as the real landowner. Ask for a valid ID.

If the title says that the registered owners are the parents of the person saying he is the landowner, that is a problem. There might be other heirs to that property. If there are several heirs claiming ownership of the land, and some heirs want to sell while others do not, that is a problem. The majority of the heirs cannot simply outvote those who do not want to sell. The heirs who want to sell must file a petition in court under Rule 69 of the 1997 Rules of Civil procedure.

If the landowner is married, then marital conformity is needed for the sale of the land.

If the person selling the land to you is merely an agent and not the registered owner, that is a problem. Ask to meet and deal with the real owner.

[2] Check the title for liens or encumbrances (adverse claim, notice of lis pendens, mortgage)

Check the back portion of the title to see if there are annotations for liens or encumbrances like adverse claim, notice of lis pendens, mortgage, etc. If there are liens or encumbrances on the title, then do not buy the property.

[3] Verify the title’s authenticity with the Land Registration Authority

If the copy of the title on file with the Register of Deeds is clean of any lien or encumbrance, then bring the certified copy of the title to the Land Registration Authority (LRA) in Quezon City, opposite the Land Transportation Office. Ask the LRA Task Force on Spurious Land Titles to verify if the title is genuine.

[4] Verify with the Assessor’s Office if the real estate taxes are paid up

If the LRA says that the title is genuine, then check with the Assessor’s Office if the “amilyar” or real estate taxes are paid up (no arrears or back taxes). If there are arrears, then talk to the landowner. You can propose for example to pay for the arrears but this should be part of the purchase price already. You need a written notarized document for this agreement on the payment of back taxes.

[5] Ask a geodetic engineer to survey the land and check the title’s technical description

Ask the landowner permission to have the land surveyed. The purpose is to determine the actual land area. If the title says that the land area is 2,000 square meters but the survey only shows that the area is 1,500 then you can ask for a proportional reduction in the price.

[6] Conduct an ocular inspection of the land

Check the land for potential problems (for examples, if the area is prone to floods, if the property has access roads or right of way, etc).

[7] Clarify with the seller who will pay the transfer taxes and notarial fee

Clarify with the landowner as to who will shoulder the payment of the taxes (transfer, capital gains, etc).

You have to clarify also with the landowner as to who will pay the notarial fee for the deed of sale. The notary public usually charges one percent of whatever the price mentioned in the deed is. For example, if the price mentioned in the deed of sale is two million pesos, the notary public will charge Php 20,000.00 as notarial fee.

[8] Have a paper trail of your payment

In the actual payment, paying in cash is not recommended. You must have a paper trail of your payment. You can ask your bank to issue a manager’s check or cashier’s check. Before signing the deed of sale, the landowner can verify from the bank if the check is genuine or is funded, etc.

“Dapat kaliwaan”, as we say in the vernacular. When you present the check for payment, the landowner must at the same time give you the title. After you receive the title, “dapat malinis na”. Meaning, all you have to do after paying and receiving the title, is to work on the transfer of the title to your name.

[9] Submit required documents with the Register of Deeds

In transferring the title to your name, you will have to submit all the documents to the Register of Deeds (RD). Beforehand, you need to get the confirmation receipts from the BIR and the Assessor’s office. If the documents are complete and the BIR and Assessor’s office issue the proper documents saying that the taxes have been paid, then the RD will now transfer the title to the church’s name.

[10] What to do if the land is donated to you

There is no such thing as “verbal donation” when it comes to lands. The New Civil Code of the Philippines requires donations worth more than five thousand pesos and the acceptance of such donation to be made in a notarized document. In a donation, the donor’s tax (20% of the value of the property) must be paid within 30 days from the time the deed of donation is executed.

[11] What to do if the landowner refuses to hand over the title despite your full payment

If you have fully paid for a property but the landowner refuses to hand over the title, you should file immediately an “affidavit of adverse claim” with the Register of Deeds. Within 30 days from the time the adverse claim was annotated, you must file a case in court either for:

• specific performance (for the landowner to hand over the title), or
• rescission (cancellation of the contract).

With either case, you can ask for attorney’s fees and damages.

[12] Paying by installment

In a contract of sale by installments, there is sometimes a part of the contract that provides for an “acceleration clause.” This means that failure to pay one or more installments will make the whole amount due and demandable. For example, you are bound to pay two million pesos in 24 monthly installments for the land. You paid the January and February installments, failed to pay the March installment, and then continued paying again. If there is an acceleration clause in the contract, then that failure to pay the March installment, for example, gives the landowner the right to demand that you pay the total sale price at once.

[13] Make sure the real estate developer complies with government regulations

If you are buying a subdivision lot, make sure that the developer has all the necessary government permits. Keep all receipts for payment.

Heirs and inheritance (Part 6): Settle the estate of your deceased spouse before marrying again

Related posts: Heirs and inheritance (Part 1): If your spouse dies without a last will, who will inherit? Heirs and inheritance (Part 2): Legitimes, free portions, and intestate shares Heirs and inheritance (Part 3): Rights of illegitimate children when their parent dies without a last will Heirs and inheritance (Part 4): Who inherits from an illegitimate child? Heirs and inheritance (Part 5): The right of legitimate children to inherit

Articles 103 and 130 of the Family Code provide that before getting married again, you must:

[1] liquidate the community property or the conjugal partnership, and

[2] settle the estate of your deceased spouse.

If you don’t do these things, your subsequent marriage will be governed automatically by the regime of complete separation of property under Articles 143 to 146 of the Family Code. In simple terms, you and your subsequent spouse will not have any community property or conjugal partnership property to speak of.

Why? The Family Code seeks to protect the heirs of the deceased spouse, especially the children, by preventing:

[a] the dissipation of the assets of the first marriage, and

[b] complications in determining which property belongs to what marriage.

If you are the child of a parent who wants to get married again after the death of your other parent, you can insist that your share in the inheritance first be given to you. If your parent refuses, as a final resort, you can file a petition for judicial settlement of your deceased parent’s estate.

Liquidating the community property and settling the estate of the deceased spouse

Liquidating the conjugal partnership property and settling the estate of the deceased spouse

Art. 103. Upon the termination of the marriage by death, the community property shall be liquidated in the same proceeding for the settlement of the estate of the deceased. If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the community property either judicially or extra-judicially within six months from the death of the deceased spouse. If upon the lapse of the six months period, no liquidation is made, any disposition or encumbrance involving the community property of the terminated marriage shall be void. Should the surviving spouse contract a subsequent marriage without compliance with the foregoing requirements, a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage.

Art. 130. Upon the termination of the marriage by death, the conjugal partnership property shall be liquidated in the same proceeding for the settlement of the estate of the deceased. If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the conjugal partnership property either judicially or extra-judicially within six months from the death of the deceased spouse. If upon the lapse of the six-month period no liquidation is made, any disposition or encumbrance involving the conjugal partnership property of the terminated marriage shall be void. Should the surviving spouse contract a subsequent marriage without compliance with the foregoing requirements, a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage.

Heirs and inheritance (Part 5): The right of legitimate children to inherit

Related posts: Disinheriting children and descendants, legitimate as well as illegitimate If a wife gets pregnant by a man not her husband, will the child be legitimate or illegitimate?

Situation A: Several years ago, several Filipino-Chinese brothers and sisters asked me about their eldest brother’s claim that under Chinese custom, only the eldest child is entitled to inherit, with other siblings, especially the sisters, not being entitled to anything.

I told these brothers and sisters that since they (and their parents) are Filipino citizens, they are all entitled to inherit from their parents under Article 979 of the New Civil Code of the Philippines.

Art. 979. Legitimate children and their descendants succeed the parents and other ascendants, without distinction as to sex or age, and even if they should come from different marriages.

Chinese customs or traditions cannot prevail over the express provisions of Philippine law.

Situation B: Jose and Myrna have two legitimate children, A and B. When Myrna died, Jose got married to Susan. Jose and Susan have three children, namely, C, D, and E. When Jose dies, who among his children will inherit?

Article 979 is clear that all of Jose’s children (from his marriage to Myrna and his marriage to Susan) will inherit from him.

Situation C: When the mother died, the father started dating a younger woman, spending lavishly for her and even giving her the mother’s jewelry. When the children objected, the father said that they do not have any right to inherit yet since he was still alive.

The father is wrong. What the children are asking for is their inheritance from their deceased mother. Their right to inherit from their mother began when she died, as provided under Article 777 of the New Civil Code of the Philippines.

Art. 777. The rights to the succession are transmitted from the moment of the death of the decedent.

Situation D: You are a father or mother and one of your children has led an immoral life or threatened your life. What can you do to prevent this prodigal child from inheriting from you?

You must execute a last will disinheriting this child based on Article 919 of the New Civil Code of the Philippines. The requirements for a valid disinheritance under Article 918 are very strict (see the graphic below); you must consult a very competent notary public.

Please read also the Supreme Court decision in Dy Yieng Sangio vs. Reyes G.R. Nos. 140371-72 November 27, 2006. In this case, the father executed a document entitled “Kasulatan ng Pag-Aalis ng Mana” where he disinherited his oldest child.

Requirements and grounds for a valid disinheritance (click the picture to see the clearer, enlarged view)


Related posts:

• Heirs and inheritance (Part 1): If your spouse dies without a last will, who will inherit?
• Heirs and inheritance (Part 2): Legitimes, free portions, and intestate shares
• Heirs and inheritance (Part 3): Rights of illegitimate children when their parent dies without a last will
• Heirs and inheritance (Part 4): Who inherits from an illegitimate child?
• Heirs and inheritance (Part 6): Settle the estate of your deceased spouse before marrying again

Heirs and inheritance (Part 4): Who inherits from an illegitimate child?

Related posts: Heirs and inheritance (Part 1): If your spouse dies without a last will, who will inherit? Heirs and inheritance (Part 2): Legitimes, free portions, and intestate shares Heirs and inheritance (Part 3): Rights of illegitimate children when their parent dies without a last will If a wife gets pregnant by a man not her husband, will the child be legitimate or illegitimate?

Situation: An illegitimate child dies with no children, whether legitimate or illegitimate, and without a last will.

[1] If that illegitimate child was unmarried, then the biological father or mother will inherit. If both parents are still alive, they will inherit on a 50-50 basis under Article 993 of the New Civil Code of the Philippines.

Art. 993. If an illegitimate child should die without issue, either legitimate or illegitimate, his father or mother shall succeed to his entire estate; and if the child's filiation is duly proved as to both parents, who are both living, they shall inherit from him share and share alike.

Question: What if you are an illegitimate child raised by your mother alone, with your biological father providing nothing at all? Can you prevent your father from inheriting from you?

Answer: If you die without a last will, then your deadbeat father will inherit from you under Article 993. You must therefore execute a last will disinheriting your father based on Article 920 of the New Civil Code of the Philippines. The requirements for a valid disinheritance under Article 918 are very strict (see the chart below); you must consult a very competent notary public.

[2] If the illegitimate child was married and the parents are also dead, then the spouse will inherit everything under Article 994 of the New Civil Code of the Philippines.

Art. 994. In default of the father or mother, an illegitimate child shall be succeeded by his or her surviving spouse who shall be entitled to the entire estate.

If the widow or widower should survive with brothers and sisters, nephews and nieces, she or he shall inherit one-half of the estate, and the latter the other half.

But as stated in the 2nd paragraph of Art. 994, if the deceased illegitimate child has illegitimate siblings, then the spouse will share the inheritance with them on a 50-50 basis. (The siblings will divide among themselves the 50% allotted to them.) If any of the illegitimate siblings had died beforehand, then the sons and daughters (the nephews and nieces of the illegitimate child) will inherit their deceased parent’s share.

Question: What if the illegitimate child was unmarried but has illegitimate siblings?

Answer: Although Article 994 does not state it, the illegitimate siblings (together with the nephews and nieces of any sibling who died beforehand) will inherit everything.

Requirements and grounds for a valid disinheritance (click the picture to see the clearer, enlarged view)

Heirs and inheritance (Part 3): Rights of illegitimate children when their parent dies without a last will

Related posts: Article 176 of the Family Code: computing the legitimes of legitimate and illegitimate children; an illegitimate child gets one-half Disinheriting children and descendants, legitimate as well as illegitimate If a wife gets pregnant by a man not her husband, will the child be legitimate or illegitimate? Right of representation Iron barrier between the legitimate and illegitimate sides of the family

Situation A: You and your siblings are illegitimate children. Your biological parent (father or mother) died with no spouse, no legitimate descendants (children or grandchildren, great-grandchildren), and no legitimate ascendants (parents, grandparents, or great-grandparents).

[1] Under Article 988 of the New Civil Code of the Philippines (NCC), you and your siblings will inherit everything.

Art. 988. In the absence of legitimate descendants or ascendants, the illegitimate children shall succeed to the entire estate of the deceased.

Clarification: The live-in partner of an illegitimate child does not have any right to inherit but is entitled to share in the partnership property under Articles 147 and 148 of the Family Code.

Question: Art. 988 NCC provides that the parent’s ascendants must be legitimate. Let’s say Jose is illegitimate. He has an illegitimate child Rene. In turn, Rene has his own illegitimate child Nestor. If Rene dies, who will inherit - both his son Nestor and his father Jose, or Nestor alone?

Answer: Only Nestor will inherit. One basic principle under the NCC is “nearer excludes farther” which means that the relative closest in degree to the deceased will exclude from inheriting those who are farther away in degree. Another principle in determining who the heirs are is that we go down (descending line) first before going up (ascending line). If there are heirs in the descending line (children or grandchildren), they will exclude those in the ascending line (parents or grandparents). Thus, even if Jose and Nestor are both one degree away from Rene, Nestor (descendant) excludes Jose (ascendant) from inheriting.

[2] If any of your siblings died before your parent, the descendants (children or grandchildren, whether legitimate or illegitimate) of your deceased sibling will inherit by right of representation while you will inherit on your own right under Articles 989 and 990 of the New Civil Code of the Philippines.

Art. 989. If, together with illegitimate children, there should survive descendants of another illegitimate child who is dead, the former shall succeed in their own right and the latter by right of representation.

Art. 990. The hereditary rights granted by the two preceding articles to illegitimate children shall be transmitted upon their death to their descendants, who shall inherit by right of representation from their deceased grandparent.

For example, you have two illegitimate siblings. If all three of you are alive, then you divide your parent’s estate by three. Let’s say, however, that one of your siblings, who has four children, died before your parent. You still divide the estate by three; the four children will divide among themselves the share that should have gone to their parent (your deceased sibling).

Situation B: What if your parent had illegitimate children from different partners?

Same answers as above.

Situation C: Your parent died with no spouse but with legitimate ascendants (parents, grandparents, or great-grandparents).

[1] You will share the estate with the ascendants on a 50-50 basis under Article 991 of the New Civil Code of the Philippines.

Art. 991. If legitimate ascendants are left, the illegitimate children shall divide the inheritance with them, taking one-half of the estate, whatever be the number of the ascendants or of the illegitimate children.

For example, a person dies leaving one ascendant and five illegitimate children (whether from the same partner or different partners). The ascendant gets 50% of the estate, while the five illegitimate children will divide among themselves the other 50%.

[2] What if there are several ascendants left, for example, the father or the mother, and both grandparents? Will the grandparents also share in the inheritance? Based on the principle of “nearer excludes farther”, they will not inherit.

Situation D: You are illegitimate; your parent died with no ascendant but with one legitimate sibling. If that sibling died after your parent, can you inherit from this sibling by stepping into your parent’s place?

No, you cannot claim any inheritance from your parent’s sibling under Article 992 of the New Civil Code of the Philippines.

Art. 992. An illegitimate child has no right to inherit ab intestato from the legitimate children and relatives of his father or mother; nor shall such children or relatives inherit in the same manner from the illegitimate child.

This is known as the iron barrier between the legitimate and illegitimate sides of the family. For the same reason, your parent’s legitimate sibling cannot inherit from you.

Unfair credit card debt collection practices and their sanctions under BSP Circular No. 702, Series of 2010

The Supreme Court ruled in Macalinao vs. BPI (2009) and numerous cases dating as far back as 1996 that 3% monthly or 36% yearly interest is excessive, iniquitous, unconscionable, and exorbitant.

Some tactics used by credit card companies or their agents in trying to collect are:

[1] sending a photocopy of the complaint for collection or “sum of money” prepared by the company’s lawyer, and making the card holder think that a case has already been filed in court; or

[2] in situations where the credit card holder is a teacher, calling up the school principal or department head about the teacher’s delinquent account; or

[3] calling up, verbally abusing and humiliating the card holder.

Unfair collection practices

The Bangko Sentral ng Pilipinas “Manual of Regulations for Non-Bank Financial Institutions” (MORNBFI, Subsections 4320Q.14, page 136, and 4301N.14, page 810) classifies the following as unfair collection practices:

1. The use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person;
2. The use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws;
3. Disclosure of the names of credit cardholders who allegedly refuse to pay debts;
4. Threat to take any action that cannot legally be taken;
5. Communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed;
6. Any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and
7. Making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 A.M. or after 10:00 P.M., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.

If you are a school principal or department head and you receive a telephone call from collection agents about your teacher’s alleged delinquency, tell them that (1) they are violating the BSP regulation, and (2) you will encourage the teacher to file a complaint against them for unfair collection practices.

If you are the card holder and you were verbally abused by the card company’s staff or its collecting agent, you should file a complaint with the BSP’s Financial Consumer Affairs Group.

Additional protection for credit card holders under BSP Circular No. 702, Series of 2010

Section 4 of this circular released on December 15, 2010 amended the Manual of Regulations of Banks (Subsection X320.14) and MORNBFI, (Subsections 4320Q.14 and 4301N.14). The circular applies to all credit operations of banks and other BSP-supervised financial institutions to better protect all financial consumers, including credit card holders.

Sections 3 and 4 of the circular require credit card companies to:

[1] notify the card holder in writing of the endorsement of the collection to an agency at least seven days before the actual endorsement;

[2] give the defaulting credit card holder the name of the agent assigned to the account once they have endorsed the collection to a third-party;

[3] change all disclosure documents and marketing materials so that they are printed in plain language and in bold black letters against a white background using the Arial font and a minimum 12 point font size.

These new requirements protect the credit card holders:

• by giving them enough time to consider what actions to take,
• from being harassed by an unscrupulous collection agent who might use aliases or pseudonyms in order to avoid the sanctions for using unfair practices; and
• by providing them with easily understood documents from the credit card companies.

Sanctions for credit card companies or their collection agents

The sanctions for unfair collection practices under Section 6 of the circular are:

First offense: Reprimand for the directors/officers responsible for the violation.

Second offense: Disqualification of the bank concerned from the credit facilities of the BSP except as may be allowed under Section 84 of R.A. No. 7653 (“New Central Bank Act”).

Subsequent offenses:

• Prohibition on the bank concerned from the extension of additional credit accommodation against personal security; and
  
• Penalties and sanctions under Sections 36 and 37 of RA 7653
  

Where to file the complaint for unfair collection practices

For further clarification and inquiries, please contact the Financial Consumer Affairs Group, Supervision and Examination Sector, Bangko Sentral Ng Pilipinas, 5th Floor, Multi-Storey Building, BSP Complex, A. Mabini St., Malate, Manila; e-mail address: consumeraffairs@bsp.gov.ph; Tel. Nos.: Direct Line: (+632)523-3631; Trunkline (+632)524-7011 local 2584

Practical and legal problems with BSP Circular No. 702, Series of 2010

[1] Shrewd and unscrupulous collection agents won’t use their office phone to call up the card holder or the school principal. Having caller ID won’t matter then. The agents can also say that it wasn't them who called up.

[2] Section 4 provides that the credit card company must notify the card holder in writing of the endorsement of the collection to an agency at least seven days before the actual endorsement. Does it mean sending the written notice by ordinary mail, registered mail, or personal service on the card holder? To prevent any circumvention or confusion, the circular should have provided instead that the notification must be made by registered mail at least seven days before the actual endorsement. Or, to really provide protection to the card holder, the circular should have required sending the notice by express registered mail.

[3] Section 6 states that “violations shall be subject to any or all of the following sanctions depending upon their severity”. The phrase “any or all of the following sanctions” is legally incorrect since the circular provides that the sanctions are to be imposed on a successive basis (first offense, second offense, subsequent offense). For example, the sanction of “Prohibition on the bank concerned from the extension of additional credit accommodation against personal security” cannot be imposed if the violation is only a first offense.

The phrase “depending on their severity” is a misplaced modifier. Does “depending on their severity” refer to the sanctions or to the violations? If the phrase refers to the violations, then the sentence should be edited to read “Depending on their severity, violations shall be subject to any or all of the following sanctions”.

Also, the phrase “depending upon their severity” creates a legal problem. Does it mean, for example, that “making contact at unreasonable/inconvenient times or hours” less severe than the “use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person”?

Consider this situation: A credit card company has committed a third offense of unfair collection practice. The penalty prescribed by the circular is “Prohibition on the bank concerned from the extension of additional credit accommodation against personal security”. But if the violation, for example, is the less severe “making contact at unreasonable/inconvenient times or hours”, does this mean the BSP has the discretion to impose the lighter penalty of reprimand even if it is already a third offense?

[4] Section 3 of the circular requires that the table of fees, penalties and interest rates, and reminder to the cardholder in disclosure documents and marketing materials must be “printed in plain language and in bold black letters against a white background using the Arial font and a minimum 12 point font size”. But aside from the required typography, the circular does not discuss what “plain language” is or provide guidelines for the credit card companies to follow. (The circular itself is not written in plain language; I have posted my Plain Language before and after comparisons of this circular.)

Please read my posts: [1] Plain English, Plain Language or Plain Writing for government offices and private companies in the Philippines [2] BSP Circular No. 702, Series of 2010 (Plain English / Plain Language revisions) Note: In the Flesch ease of reading scale, the higher the score, the more understandable the text is. A score between 30 to 40 means a text is “very difficult” to understand; between 40 to 50 (“difficult”); between 50 to 60 (“fairly difficult”); between 60 to 70 (“standard”); and between 70 to 80 (“fairly easy”). You can use MS Word’s Spelling and Grammar tool to check the Flesch readability score of any document. To learn how the Flesch reading ease test score is calculated manually, please read paragraph (5) of the Florida Readable Language In Insurance Policies Law (Florida Stat. Ann. § 627.4145).

The only BSP document with a description of “plain language” is MORB Volume 2, Appendix 13 (page 229). The description isn’t from the BSP but from a Securities and Exchange Commission document titled “New Rules on the Registration of Long-Term Commercial Papers”. In the section on “Sales and Marketing Guidelines for Derivatives”, the SEC states:

For non-sophisticated clients, a bank should adopt a suitability statement explaining simply and clearly why the product offered is viewed suitable, considering the client’s needs and preferences. To ensure the statement will be effective, a bank should consider the following features:

Simple and plain language: when technical terms need to be incorporated, they should be explained if the client is unlikely to understand their meaning; and

Concise and clear messages: lengthy explanations and extensive statements are likely to reduce the effectiveness of the statement and make the client less likely to read the statement properly.

But this description is so lacking in detail; it is also merely a recommendation. What “simple and plain language” is varies from person to person, and Circular No. 702 does not provide a way of measuring if the credit card companies are complying with the plain language requirement. What’s needed is an objective criterion of what constitutes “plain language” in order to protect the card holders.

We can learn from the experience of US states like Colorado, Nevada, Montana, New Mexico, Nebraska, North Carolina, New Jersey, and Rhode Island. These states require that insurance policies (auto, life, health) and legal documents in general must have a minimum Flesch reading ease test score of 50. Colorado laws on the use of plain language are:

• 10-4-633.5. Automobile insurance policies - plain language required - rules
• 10-16-107.3. Health insurance policies - plain language required - rules

Beginning in August 2010, Rhode Island requires for all health insurance policies a Flesch reading ease test score of 65, the highest in the US.

Other US laws that provide subjective and objective criteria to ensure that consumers are protected are:

• Connecticut Plain Language Law (Conn. Gen. Stat. § 42-152, promulgated in 1980) mandates that every consumer contract entered into after June 30, 1980, must be written in plain language. A contract is written plainly if it meets either the plain language test (subsection b) or an alternative objective test (subsection c).


• Pennsylvania Plain Language Consumer Contract Act (Pa. Stat. Ann. tit. 73, § 2201, promulgated in 1993) provides a general rule, language guidelines, and visual guidelines to ensure that consumer contracts are easy to read and understand.

The BSP should consider adopting a criterion for readability based on these laws.