MLQU School of Law

Arlegui St., Quiapo Manila

LAW STUDENT COUNCIL
2009 CENTRALIZED BAR OPERATIONS

CIVIL LAW

1. Is the judgment declaring the presumptive death/absence of a spouse under the

Family Code appealable?

Ans: No, the judgment is immediately final and executory by express provision of law. (Art.
247; Republic vs. Lorino, G.R. No. 160258, Jan. 19, 2005)

2. When may the custody of the child below 7 years old be given to the Father, not to
the mother?

Ans: For compelling reasons, as when the mother is found unfit to take care of the child as
an exception to the “tender-age presumption” under Art. 213 of the Family Code.
(Gualberto vs. Gualberto, June 28, 2005)

3. Is prostitution or marital infidelity of the mother a compelling reason to give the

custody to the Father? Illustrate unfitness of the mother to take care of the child.

Ans: No. The so-called “tender-age presumption” under Article 213 of the Family Code
may be overcome only by compelling evidence of the mother’s unfitness. The
mother has been declared unsuitable to have custody of her children in one or more
of the following instances: neglect, abandonment, unemployment, immorality,
habitual drunkenness, drug addiction, maltreatment of the child, insanity or affliction
with a communicable disease. But sexual preference or moral laxity alone does not
prove parental neglect or incompetence. Not even the fact that a mother is a
prostitute or has been unfaithful to her husband would render her unfit to have
custody of her minor child. To deprive the wife of custody, the husband must clearly
establish that her moral lapses have had an adverse effect on the welfare of the child
or have distracted the offending spouse from exercising proper parental care.
(Gualberto vs. Gualberto, June 28, 2005)

4. Whose surname may an illegitimate child bear?

Ans: The mother’s surname unless he is recognized by the father, in which case he may
use the father’s surname. (Alba vs. CA, July 29, 2005

5. When may a spouse testify against the other spouse as an exception to the rule on
marital disqualification?

Ans: When the marital and domestic relations are so strained that there is no more
harmony to be preserved or peace and tranquility which may be disturbed.

Sec. 22, Rule 130 of the Revised Rules of Court provides that, during their marriage,
neither the husband nor the wife may testify for or against the other without the
consent of the affected spouse, except in a civil case by one against the other, or in a
criminal case for a crime committed by one against the other or the latter’s direct
descendants or ascendants. However, this rule has its exceptions. As in the case at
bar, where the marital and domestic relations are so strained that there is no more
harmony to be preserved nor peace and tranquility which may be disturbed, the
reason based upon such harmony and tranquility fails. In such a case, identity of
interests disappears and the consequent danger of perjury based on that identity is
non-existent. In particular, when an offense directly attacks, or directly and vitally
impairs, the conjugal relation, it comes within the exception to the statute that one
shall not be a witness against the other except in a criminal prosecution for a crime
committee (by) one against the other. (Alvarez vs. Ramirez, G.R. No. 143439, Oct.
14, 2005)

6. Sexual infidelity by itself is not sufficient evidence of psychological incapacity.

(Villalon vs. Villalon, Nov. 18, 2005)

7. May the woman the Petitioner intends to marry intervene in the action of the plaintiff
to annul his marriage with the estranged wife?
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Ans: No, she has no legal interest because she was never a legal wife of the Petitioner.
Her marriage to him is void because at the time of her marriage to the Petitioner, the
 MLQU School of Law
Arlegui St., Quiapo Manila
LAW STUDENT COUNCIL
2009 CENTRALIZED BAR OPERATIONS

latter was still lawfully married. (Elmar Perez vs. Court of Appeals and Tristan
Catindig, G.R. No. 162580)

8. a) Is a bank which relies only on the title in granting a mortgage loan, without
verifying the title and inspecting the property a mortgagee in good faith if it turns out later on
that there are other claimants in possession of the property?

Ans: No. Banks, their business being impressed with public interest, are expected to
exercise more care and prudence than private individuals in their dealings, even
those involving registered lands. Hence, for merely relying on the certificates of title
and for its failure to ascertain the status of the mortgaged properties as is the
standard procedure in its operations, the bank is a mortgagee in bad faith.
(Consolidated Rural Bank vs. CA, G.R. No. 132161, January 2005)

b) What is the doctrine of “mortgagee in good faith”?

Ans: Under Article 2085 of the Civil Code, one of the essential requisites of the contract of
mortgage is that the mortgagor should be the absolute owner of the property to be
mortgaged; otherwise, the mortgage is considered null and void. However, an
exception to this rule is the doctrine of “mortgagee in good faith.” Under this doctrine,
even if the mortgagor is not the owner of the mortgaged property, the mortgage
contract and any foreclosure sale arising therefrom are given effect by reason of
public policy. This principle is based on the rule that all persons dealing with property
covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required
to go beyond what appears on the face of the title. This is the same rule that
underlies the principle of “innocent purchasers for value.” The prevailing
jurisprudence is that a mortgagee has a right to rely in good faith on the certificate of
title of the mortgagor to the property given as security and in the absence of any sign
that might arouse suspicion, has no obligation to undertake further investigation.
Hence, even if the mortgagor is not the rightful owner of, or does not have a valid title
to, the mortgaged property, the mortgagee in good faith is, nonetheless, entitled to
protection. (Llanto vs. Alzona, G.R. No. 161029, January 2005)

A mortgagee can rely on what appears on the certificate of title presented by the
mortgagor and an innocent mortgagee is not expected to conduct an exhaustive
investigation on the history of the mortgagor’s title. This rule is strictly applied to
banking institutions. A mortgagee-bank must exercise due diligence before entering
into said contract. Judicial notice is taken of the standard practice for banks, before
approving a loan, to send representatives to the premises of the land offered as
collateral and to investigate who the real owners there are. Banks, indeed, should
exercise more care and prudence in dealing even with registered lands, than private
individuals, as their business is one affected with public interest. Banks keep in trust
money belonging to their depositors, which they should guard against loss by not
committing any act of negligence that amounts to lack of good faith. Absent good
faith, banks would be denied the protective mantle of the land registration statute, Act
496, which extends only to purchasers for value and good faith, as well as to
mortgagees of the same character and description. Thus, this Court clarified that the
rule that persons dealing with registered lands can rely solely on the certificate of title
does not apply to banks. (Heirs of Manlapat v. CA, G.R. No. 125585, June 8, 2005)

9. a) Spouses A and B acted as sureties for the loans obtained by BMC. BMC filed a
Petition for suspension of Payments. May the Bank sue A and B to enforce their solidary
liability with BMC?

Ans: Yes. Under Art. 1216 of the Civil Code, the creditor may go against the sureties alone
independently of BMC without prior demand for payment on the principal debtor
because they are solidarily bound with BMC for the payment of the debts to the Bank.
(Ong vs. PCIB, G.R. No. 160466, January 2005)

b) Will your answer be the same if A and B are mere guarantors?

Ans: No. A guarantor is only an insurer of the solvency of the debtor, while a surety is an
insurer of the debt itself. The liability of a guarantor is subsidiary. He has the benefit
of excussion, and may be made to pay only if the principal is insolvent. (Arts. 2063
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and 2081, Civil Code; Ong vs. PCIB, G.R. No. 160466, January 2005)
 MLQU School of Law
Arlegui St., Quiapo Manila
LAW STUDENT COUNCIL
2009 CENTRALIZED BAR OPERATIONS

c) Distinguish between guaranty and suretyship?

Ans: A guarantor insures the solvency of the debtor while a surety is an insurer of the debt
itself. A contract of guaranty gives rise to a subsidiary obligation on the part of the
guarantor. In a suretyship contract, however, the benefit of excussion is not available
to the surety as he is principally liable for the payment of the debt. A surety is directly,
equally and absolutely bound with the principal debtor for the payment of the debt
and is deemed as an original promissor and debtor from the beginning. (Ong vs.
PCIB, G.R. No. 160466, January 2005)

10. What is the “complimentary-contracts-construed together” doctrine?

Ans: In enforcing a surety contract, the “complementary-contracts-construed-together”

doctrine finds application. According to this principle, an accessory contract must be
read in its entirety and together with the principal agreement. This principle is used in
construing contractual stipulations in order to arrive at their true meaning; certain
stipulations cannot be segregated and then made to control. This no-segregation
principle is based on Article 1374 of the Civil Code. (PBC vs. Lim, G.R. No. 158138,
April 2005)

11. Registered mortgage in good faith is preferred over unregistered sale. (Flancia vs.
CA, April 2005)

12. Has the entrustee under a trust receipt the right to mortgage the property held in
trust?

Ans: No, because the entrustor (creditor Bank), not the entrustee is the owner of the
property in trust. A mortgage must be executed by the absolute owner of the chattels
to be valid. (Art. 2085 [2]; DBP vs. Prudential Bank, G.R. No. 143772, November
22, 2005)

13. What is an equitable mortgage?

Ans: The real intention is to constitute a mortgage to secure repayment of a loan in a

contract that appears on its face as a sale, absolute or with pacto de retro. Under
Art. 1602, a contract is presumed an equitable mortgage in any of the following
badges of fraud:

(1) When the price of a sale with right to repurchase is unusually inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real intention of the
parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation. (Alvaro v. Ternida, G.R. No. 166183,
January 20, 2006)

14. a) The broker or agent who brought the buyer and seller together and arranged the
ocular inspection that did not materialize is entitled to commission even if he does not
participate in the negotiations of the sale. (Medrano vs. CA, February 2005)

b) Where the contract of agency is revoked after disagreement on the commission and the
principal proceeded to directly negotiate the transaction, the agent is not entitled to
commission. (Carlos Sanchez vs. Medicard, per J. Sandoval-Gutierrez, September 2, 2005)

15. To be valid, a partnership involving capital of 3,000.00 or more in money or property,

or with contributed real estate must be in a public instrument. (Arts. 1771 & 1772; Litonjua
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vs. Litonjua, Dec. 13, 2006)

 MLQU School of Law
Arlegui St., Quiapo Manila
LAW STUDENT COUNCIL
2009 CENTRALIZED BAR OPERATIONS

16. Who can file a notice of lis pendens?

Ans: Only a party to a case has the legal personality to file a notice of lis pendens relative
to the pending case. It declared that petitioners are not parties in land registration
case filed by Sandoval and Ozatea. Since a land registration case is a proceeding in
rem, an order of general default binds the whole world as a party in the case. The
heirs of Eugenio Lopez are mere movants whose personality the court has not
admitted. Based on Section 26 of PD 1529, the LRA ruled that they should have filed
a motion to lift the order of general default. (Heirs of Eugenio Lopez, Sr. vs. Hon.
Enriquez, G.R. No. 146262, January 21, 2005)

17. Donation of real property is void if not made in a public document. (Dept. of Ed. vs.
del Rosario, January 16, 2005)

18. What are the requisites for legal easement of right of way?

Ans: The following:

(1) It is surrounded by other immovables and has no adequate outlet to a public

highway;

(2) payment of proper indemnity;

(3) the isolation is not the result of its own acts;

(4) the right of way claimed is at the point least prejudicial to the servient estate; and
(5) to the extent consistent with the foregoing rule, where the distance from the
dominant estate to a public highway may be the shortest. (Sps. dela Cruz vs.
Ramiscal, G.R. No. 137882, February 4, 2005)

19. What are the elements of laches?

Ans: The essential elements of laches are:

(a) conduct on the part of the defendant, or of one under whom he claims, giving rise
to the situation complained of;

(b) delay in asserting complainant’s rights after he had knowledge of defendant’s

acts and after he has had the opportunity to sue;

(c) lack of knowledge or notice by defendant that the complainant will assert the right
on which he bases his suit; and

(d) injury or prejudice to the defendant in the event the relief is accorded to the
complainant. (Sps. dela Cruz vs. Ramiscal, G.R. No. 137882, February 4,
2005)

20. An action for reconveyance based on fraud is imprescriptible where the plaintiff is in
possession. (Leyson vs. Bontoyan, February 18, 2005)

21. Political Contribution is taxable gift. (Abello vs. CIR, February 23, 2005)

22. What is the doctrine of indefeasibility of torrens titles?

Ans: A certificate of title, once registered, should not thereafter be impugned, altered,
changed, modified, enlarged or diminished except in a direct proceeding permitted by
law. The resolution of the issue is, thus, not dependent on the report of the survey
team filed in the trial court. (De Pedro v. Romasan, G.R. No. 158002, February 28,
2005)

23. Who is an innocent purchase in good faith of registered land?

Ans: Where the real property involved is covered by a Torrens title, the buyer, mortgagee,
or, any person dealing with said realty need not go beyond what appears on the face
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of the title. He is charged with notice only of such burdens and claims as are
annotated on the title. (Clemente vs. Razo, G.R. No. 151245, March 04, 2005)
 MLQU School of Law
Arlegui St., Quiapo Manila
LAW STUDENT COUNCIL
2009 CENTRALIZED BAR OPERATIONS

24. (a) What is (define) an equitable mortgage:

Ans: An equitable mortgage is defined as one which although lacking in some formality, or
form or words, or other requisites demanded by a statute, nevertheless reveals the
intention of the parties to charge real property as security for a debt, and contains
nothing impossible or contrary to law. For the presumption of an equitable mortgage
to arise, two requisites must concur: (1) the parties entered into a contract
denominated as a sale; and (2) that their intention was to secure an existing debt by
way of a mortgage.

Consequently, the nonpayment of the debt when due gives the mortgagee the
right to foreclosure the mortgage, sell the property and apply the proceeds of the sale
to the satisfaction of the loan obligation. (Sps. Alvaro vs. Sps. Ternida, G.R. No.
166183, January 20, 2006)

(b) What are the badges of presumed equitable mortgage?

Ans: While there is no single conclusive test to determine whether a deed absolute on its
face is really a simple loan accommodation secured by a mortgage, however, the
Civil Code enumerates several instances when a contract is clothed with the
presumption that it is an equitable mortgage, to wit:

Article 1602. The contract shall be presumed to be an equitable

mortgage, in any of the following cases:

(1) When the price of a sale with right to repurchase is unusually

inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period is
executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real intention
of the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be

received by the vendee as rent or otherwise hall be considered as interest
which shall be subject to the usury laws.

It is an established rule that the presence of even one of the circumstances set
forth in Article 1602 is sufficient to declare a contract of sale with right to repurchase
an equitable mortgage. Thus, under the wise, just and equitable presumption in
Article 1602, a document which appears on its fact to be a sale – absolute or with
pacto de retro – may be proven by the vendor or vendor-a-retro to be one of a loan
with mortgage. In such case, parol evidence becomes competent and admissible to
prove that the instrument was in truth and in fact given merely as a security for the
payment of a loan. And upon proof of the truth of such allegations, the court will
enforce the agreement or understanding in consonance with the true intent of the
parties at the time of the execution of the contract.

The conditions which give rise to a presumption of equitable mortgage, as set out
in Article 1602 of the Civil Code, apply with equal force to a contract purporting to be
one of absolute sale. Moreover, the presence of even one of the circumstances in
Article 1602 is sufficient basis to declare a contract as one of equitable mortgage.
This is in consonance with the rule that the law favors the least transmission of
rights.” (Ibid)
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 MLQU School of Law
Arlegui St., Quiapo Manila
LAW STUDENT COUNCIL
2009 CENTRALIZED BAR OPERATIONS

25. What is the nature of a contract to sell? May it give rise to a cause of action for
specific performance? Distinguish a contract to sell from a contract of sale.

Ans: As correctly stated by the Court of Appeals in its assailed Decision, “The ruling of the
Supreme Court in Lim v. Court of Appeals (182 SCRA 564 [1990]) is most
illuminating. In the said case, a contract to sell and a contract of sale were clearly and
thoroughly distinguished from each other, with the High Tribunal stressing that in a
contract of sale, the title passes to the buyer upon the delivery of the thing
sold. In a contract to sell, the ownership is reserved in the seller and is not to
pass until the full payment of the purchase price is made. In the first case, non-
payment of the price is a negative resolutory condition; in the second case, full
payment is a positive suspensive condition. In the first case, the vendor has lost
ownership and cannot recover the ownership of the property until and unless the
contract of sale is itself resolved and set aside. In the second case, the title remains
in the vendor if the vendee does not comply with the condition precedent of making
payment at the time specified in the contract.”

Considering that the parties’ transaction is a contract to sell, can petitioner, as

seller, demand specific performance from respondent, as buyer?

Black’s Law Dictionary defines specific performance as “(t)he remedy of requiring

exact performance of a contract in the specific form in which it was made, or
according to the precise terms agreed upon. The actual accomplishment of a contract
by a party bound to fulfill it.”

Evidently, before the remedy of specific performance may be availed of, there
must be a breach of the contract.

Under a contract to sell, the title of the thing to be sold is retained by the seller
until purchaser makes full payment of the agreed purchase price. Such payment is a
positive suspensive condition, the non-fulfillment of which is not a breach of contract
but merely an event that prevents the seller from conveying title to the purchaser.
The non-payment of the purchase price renders the contract to sell ineffective and
without force and effect. Thus, a cause of action for specific performance does not
arise. (Ayala Life Assurance, Inc. v. Ray Burton Development Corp., G.R. No.
163075, January 23, 2006)

26. What is a purchase money resulting trust?

Ans: Article 1448 of the Civil Code on implied trust provides:

Art. 1448. There is an implied trust when property is sold, and the legal
estate is granted to one party but the price is paid by another for the purpose
of having the beneficial interest of the property. The former is the trustee,
while the latter is the beneficiary. However, if the person to whom the title is
conveyed is a child, legitimate or illegitimate, of the one paying the price of
the sale, no trust is implied by law, it being disputably presumed that there is
a gift in favor of the child.

The trust created under the first sentence of Article 1448 is sometimes referred to
as a purchase money resulting trust, the elements of which are: (a) an actual
payment of money, property or services, or an equivalent, constituting valuable
consideration; and (b) such consideration must be furnished by the alleged
beneficiary of a resulting trust. (Comilang v. Burcena, G.R. No. 146853, February
13, 2006)

27. Define trust, and each kind of trust.

Ans: A trust is the legal relationship between one person having an equitable ownership in
property and another person owning the legal title to such property, the equitable
ownership of the former entitling him to the performance of certain duties and the
exercise of certain powers by the latter.

Trusts are either express or implied. Express trusts are created by the intention
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of the trustor or of the parties, while implied trusts come into being by operation of
law, either through implication of an intention to create a trust as a matter of law or
 MLQU School of Law
Arlegui St., Quiapo Manila
LAW STUDENT COUNCIL
2009 CENTRALIZED BAR OPERATIONS

through the imposition of the trust irrespective of, and even contrary to, any such
intention. In turn, implied trusts are either resulting or constructive trusts. Resulting
trusts are based on the equitable doctrine that valuable consideration and not legal
title determines the equitable title or interest and are presumed always to have been
contemplated by the parties. They arise from the nature or circumstances of the
consideration involved in a transaction whereby one person thereby becomes
invested with legal title but is obligated in equity to hold his legal title for the benefit of
another. (Pigao v. Rabanillo, G.R. No. 150712, May 2, 2006)

28. What is accion pauliana?

Ans: The rescissory action to set aside contracts in fraud of creditors is accion pauliana,
essentially a subsidiary remedy accorded under Article 1383 of the Civil Code which
the party suffering damage can avail of only when he has no other legal means to
obtain reparation for the same. In net effect, the provision applies only when the
creditor cannot recover in any other manner what is due him. (Union Bank of the
Philippines vs. Ong, 491 SCRA 596, June 21, 2006)

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