Professional Documents
Culture Documents
COLLEGE OF LAW
Bar Operations 2008
CIVIL LAW
I. Civil Personality 3
II. Citizenship and Domicile 6
III. Marriage 6
IV. Void Marriages 8
V. Voidable Marriages 11
VI. Legal Separation 14
VII. Rights and Obligations Between Husband and Wife 16
VIII. Property Relations Between Spouses 16
IX. The Family 25
X. Paternity and Filiation 26
XI. Adoption 29
XII. Support 32
XIII. Parental Authority 32
XIV. Funerals 34
Restrictions/limitations on capacity to
act: (Art. 38, 39, CC,) 2. Insanity
8. Absence
4. Prodigality
General Rule:
Martinez v. Martinez Absence of 7 years + unknown whether the
1 Phil. 182 absentee still leaves = presumed dead for all
To make a person legally unfit to run his own purposes.
affairs, his acts of prodigality must show:
1. A morbid mind, and Except:
2. A tendency to spend or waste the For the purpose of opening his succession, in
estate so as to expose the family to which case, the absentee is presumed dead
want or deprive the forced heirs of after 10 years. If disappeared after the age
their inheritance. of 75 years, 5 years will be sufficient. (Art.
390, CC)
While mere breach is not an actionable wrong, contracting parties having good faith that he
Velez is still liable under Art. 21 of the Civil had authority to do so (Art 35, par. 2)
Code which provides that when a person
willfully causes loss or injury contrary to good
custom, he shall compensate the latter for C. FORMAL REQUISITES OF MARRIAGE
damages (costs of the wedding preparations). (SO-ML-MC)
It is the abuse of right which can be a cause
for moral or material damages. 1. Authority of the solemnizing officer;
2. A valid marriage license;
Trinidad v. CA 3. Marriage ceremony (Art 3, FC)
289 SCRA 188 (1998)
Absence of a marriage certificate is not proof
of absence of marriage. To prove the fact of a. Authority of solemnizing officer
marriage, the following would constitute
competent evidence: (1) the testimony of Who are authorized to solemnize
witnesses to matrimony; (2) the couple’s marriages? (JPSMCM)
public cohabitation; and (3) birth and 1. Any incumbent member of the judiciary
baptismal certificates of children born during within the court’s jurisdiction (Art. 7, par.
the union. 1);
2. Any priest, rabbi, imam, or minister of any
Presumption of marriage: church or religious sect
In case of doubt, all presumptions favor the a. Must be authorized by his church or
solidarity of the family. Thus, every religious sect.
intendment of law or facts leans towards the b. Must be registered with the civil
validity of marriage, the indissolubility of the registrar general.
marriage bonds, etc. (Art. 221, FC) c. Must act within the limits of the
written authority granted by the
B. ESSENTIAL REQUISITES OF MARRIAGE Church.
d. At least one of the parties must be a
1. Legal Capacity of contracting parties member of the church or religious
who must be Male and Female; sect to which the solemnizing officer
2. Consent freely given in the presence of belongs. (Art. 7, par. 2)
the solemnizing officer. (Art. 2, FC) 3. Ship captain or airplane chief in the
following cases;
Jones v. Hallahan a. Where one or both of the parties are
501 S.W. 2d 588 in articulo mortis,
A license to enter into a same-sex marriage is b. While the ship is at sea or
a nullity since the parties are incapable of c. While the plane is in flight, or
entering into a marriage as the term is d. At stopovers or ports of call (Art 7,
defined. Marriage is defined by law as one par. 3; Art 31, FC).
entered into by a man and a woman. 4. Any military commander of a unit to which
a chaplain is assigned, in the absence of
People v Santiago the latter (Art 7, par. 4 FC);
51 Phil 68 a. Can only solemnize marriages in
When a person only married another to avoid articulo mortis between persons
prosecution because he raped her the same within the zone of military operation,
morning, the marriage is void for absence of whether members of the armed
consent on the part of the rapist. It was a forces or civilians (Art 32, FC).
mere ruse for him to escape criminal liability. 5. Consul-general, consul, or vice consul (Art.
7, par. 5 FC)
a. Can solemnize marriages between
Effects of absence of and defect in the Filipino citizens abroad. The issuance
requisites of marriage: (Art. 4, FC) of the marriage license and the
duties of the local civil registrar shall
Absence Defect Irregularity also be performed by said consular
Essential Void* Voidable official. (Art. 10, FC)
Formal Void* No effect on 6. Mayors (LGC)
validity but
party b. Marriage License
responsible
will be Marriages exempt from marriage license
liable. requirement: (ARMC)
1. Marriage in articulo mortis (Art. 27, FC)
*Except when it is solemnized by an 2. Marriage in remote and inaccessible places
unauthorized person with either or both (Art. 28, FC)
BIGAMOUS MARRIAGE (Art. 41, FC) Exception: Said second marriage is not
bigamous if the first marriage was void due to
2 Kinds of bigamous marriage: the fact that no marriage ceremony was
solemnized at all. Here, the parties merely
VOID VOIDABLE signed a marriage contract on their own. No
bigamous bigamous marriage semblance of marriage, no need for judicial
marriage declaration of nullity.
Contracted during Contracted by spouse
subsistence of present upon the B. EFFECTS OF NULLITY
previous marriage presumption of death (ChiPCuPCDRDIDS) (Arts. 50-54, 43-44)
of first spouse
Good faith of 1. Children – considered illegitimate
remarrying party 2. Property Regime is dissolved – liquidation,
is immaterial; if in partition and distribution of the properties
bad faith, he of the spouses. If either spouse acted in
becomes liable for bad faith, his/her share in the net profits
bigamy will be forfeited:
a. In favor of the common children
General Rule: b. If none, in favor of the guilty
Marriage contracted by any person during the spouse by previous marriage
subsistence of a previous marriage is VOID. c. If none, in favor of the children of
Good faith is immaterial here. the innocent spouse.
3. Custody and support of the common
Exception: children will be decided
If before the celebration of the subsequent 4. Presumptive legitimes – must be delivered
marriage— 5. Creditors – of the spouses and of the
1. The first spouse has been absent for absolute community or conjugal
four consecutive years, or two years partnership must be notified of the
under extraordinary circumstances, proceedings of liquidation.
and 6. Conjugal dwelling – given to the spouse
2. The surviving spouse has a well- with whom majority of the children choose
founded belief that the spouse is dead, to remain.
and 7. Parties can remarry – after compliance
3. There is a judicial declaration of with Art. 52, FC.
presumptive death, without prejudice 8. Donation propter nuptias – remains valid,
to the effect of the reappearance of the (but if the donee contracted marriage in
absent spouse. Note: This is a bad faith, donations will be revoked)
VOIDABLE bigamous marriage. 9. Insurance benefits – innocent spouse may
revoke designation of guilty party as
Exception to the exception: beneficiary, even if such designation is
When both parties in the subsequent marriage irrevocable
acted in bad faith, the marriage is still void 10. Donations - If both parties of subsequent
(Art. 44, FC). marriage acted in bad faith, any donations
and testamentary dispositions made by
People v. Mendoza one party to the other by reason of
95 Phil. 845 (1954) marriage will be revoked
Mendoza contracted three marriages. He 11. Succession Rights – Party in bad faith
contracted the second marriage during the disqualified to inherit from innocent
subsistence of the first marriage. He spouse, whether testate or intestate
contracted the third marriage after the death
of his first wife. He was prosecuted for bigamy Note: Except for #1, the above also effects
on his third marriage. The Supreme Court apply to marriages which are annulled (and to
held that he is not guilty for bigamy for his voidable bigamous marriages.)
third marriage, since his prior subsisting
marriage has already been extinguished by
the death of his first wife. It is the second
V. VOIDABLE MARRIAGES
marriage that is bigamous.
A. GROUNDS (CIF-mspd-FIS) (Art. 45, FC)
Morigo v. People
G.R. No. 145226 (2004) 1. One of the parties is 18 or above but
General Rule: Even if the first marriage is below 21, and there is no parental
judicially declared void only after contracting consent.
the second marriage, the second marriage is 2. Either party was of unsound mind
still bigamous. (insanity).
3. The consent of either party was obtained further proceedings if the defendant fails to
through fraud (different from mistake in answer. A certification by the prosecutor that
identity): he was present during the hearing and even
a. through non-disclosure of a cross-examined the plaintiff does not suffice
previous conviction of a crime to comply with the mandatory requirement.
involving moral turpitude;
b. through concealment of the wife of
the fact that she was pregnant by Ground Who can Prescrip- Ratifica-
another man; (Art. 45) file tion tion
c. through concealment of a sexually- (Art. 47) (Art. 47) (Art. 45)
transmitted disease, even if not Lack of 1. 1. 5
serious or incurable;* parental Underage years
d. through concealment of drug consent party after Free
addiction, habitual alcoholism or attaining cohabita-
homosexuality/lesbianism. (Art.46, 21. tion after
FC) attaining
2. Parent 2. Before
4. The consent of either party was obtained age of
or child
through force, intimidation, or undue 21.
guardian reaches
influence.
21.
5. Either party is physically unable to
consummate the marriage (impotence; Insanity 1. Sane 1. Any
this is different from sterility). spouse time
6. Either party has a serious and incurable with no before
sexually-transmissible disease, even if not knowledge the death
concealed.* of the of insane
other’s party
Free
*STD: Art. 45 v. Art. 46 insanity
cohabita-
2. Legal
guardian tion of
Art. 45 STD Art. 46 STD insane
Ground for The STD is a type of of insane
party
annulment fraud which is a party
after
ground for annulment 3. Insane 2. During
coming
Does not have to Must be concealed party lucid
to reason
be concealed interval
Must be serious Need not be serious or after
and incurable nor incurable regaining
It is the The STD itself is the sanity,
concealment that ground for annulment and
gives rise to the before
annulment Fraud Injured death
Five Free
party years cohabita-
Buccat v Buccat (defrau- after tion after
72 Phil. 19 ded party) discovery having
It held that it is unbelievable that the wife of fraud full
could have concealed the fact that she was 6 knowled-
months pregnant at the time of the marriage. ge of
Annulment not granted. fraud
Force, Injured Five Free
Aquino v Delizo intimida party years cohabita-
109 Phil. 21 tion, after tion after
The Supreme Court granted annulment undue disappea the force
because the wife concealed the fact that she influen- -rance of has
was 4 months pregnant during the time of the ce force or ceased
marriage. It argued that since Delizo was intimida- or
tion disappe-
red
“naturally plump,” Aquino could hardly be
expected to know, by mere looking, whether
or not she was pregnant at the time of the
marriage.
Corpuz v. Ochoterena
AM No. RTJ-04-1861 (2004)
In a legal separation or annulment case, a
prior collusion investigation by the prosecuting
attorney is a condition sine qua non for
Confession:
No decree of legal separation shall be based F. RECONCILIATION
upon a stipulation of facts or a confession of
judgment (Art. 60, par. 1. FC) How done:
Should the spouses reconcile, they should file
Collusion: a corresponding joint manifestation under
The court shall assign the prosecuting oath of such reconciliation. (Art. 65, FC)
attorney or fiscal to make sure that there is
no collusion between the parties, and that Effects of Reconciliation:
evidence is not fabricated or suppressed (Art. 1. Proceedings for legal separation shall
60, par. 2, FC) be terminated at whatever stage. (Art.
66, FC)
D. EFFECTS OF FILING PETITION FOR 2. If there is a final decree of legal
LEGAL SEPARATION (LAC) separation, it shall be set aside. (Art.
66, FC)
1. The spouses are entitled to live separately 3. The separation of property and
(Art. 61, par. 1. FC). forfeiture of share of guilty spouse
2. Administration of Community or Conjugal shall subsist, unless the spouses agree
Property – If there is no written to revive their former property regime
agreement between the parties, the court or to institute another property regime.
shall designate one of them or a third ( Art. 66 cf. Art. 67, FC)
person to administer the ACP or CPG. (Art. 4. Joint custody of children is restored.
61, par. 2, FC) 5. The right to intestate succession by
3. Custody of children – The court shall give guilty spouse from innocent spouse is
custody of children to one of them, if there restored.
is no written agreement between the 6. The right to testamentary succession
spouses. It shall also provide for visitation depends on the will of the innocent
rights of the other spouse. (Art. 62, cf. spouse.
Art. 49. FC)
G. DIVORCE
E. EFFECTS OF DECREE FOR
LEGAL SEPARATION General Rule:
Decrees of absolute divorce obtained by
Filipinos abroad have no validity and are not
1. The spouses can live separately (Art. 63.
recognized in the Phil. dfd
FC)
2. The ACP of CPG shall be dissolved and
Exception
liquidated, and the share of the guilty
(partial recognition of absolute divorce):
spouse shall be forfeited in favor the
- When the divorce is validly obtained by
common children, previous children, or
the alien spouses abroad which
innocent spouse (Art. 63. cf. Art. 42, par.
capacitates him/her to remarry, the
2).
Filipino spouse shall likewise have the
3. Custody of the minor children shall be
capacity to remarry. (Art. 26, par. 2
awarded to the innocent spouse (Art. 63.
FC)
FC)
4. Guilty spouse shall be disqualified from
Twin elements for the application of par.
inheriting from innocent spouse by
2, Art. 26, FC:
intestate succession. The provisions in
1. There is a valid marriage that has been
favor of the guilty party in the will of the
celebrated between a Filipino citizen
innocent spouse shall also be revoked by
and a foreigner; and
operation of law. (Art. 63, FC)
2. A valid divorce is obtained abroad by
5. Donation propter nuptias in favor of the
the alien spouse capacitating him or
guilty spouse may be revoked (Art. 64.
her to remarry.
FC)
2. Widows:
VII. RIGHTS AND OBLIGATIONS
A widow may use the deceased husband’s
BETWEEN HUSBAND & WIFE surname as though he were still living. (Art.
373, CC)
A. OBLIGATION OF SPOUSES
(Arts. 68-71, FC) 3. Mistresses:
Exception: Sumbad v. CA
If they are governed by ACP. G.R. No. 106060 (1999)
The donation made by a man to a woman was
2. During Marriage held valid because no proof was shown that
they were still living in a common-law
General Rule: relationship at the time of the donation.
Spouses cannot donate to each other, directly
or indirectly (donations made by spouses to C. ABSOLUTE COMMUNITY OF PROPERTY
each other during the marriage are void) (Art.
87, FC) 1. IN GENERAL
3. CHARGES UPON THE ACP (Art. 94, FC): 4. ADMINISTRATION, OWNERSHIP AND
(4 debts, 2 taxes, 2 expenses, DISPOSITION OF ACP
support, donation)
Administration of property:
1. Support Belongs to both spouses jointly. If they
- Spouses disagree the husband’s decision prevails.
o Even if not living together However, the wife has five years from the
except when a spouse leaves date of the decision to go to court for
conjugal home without just recourse. Otherwise, it is presumed that she
cause agreed with the husband’s decision. (Art. 96,
o Even during pendency of action FC)
for legal separation or
annulment of marriage Except:
- Common children When the other spouse is incapacitated, or
- Legitimate children of previous unable to participate in the administration
marriage (e.g. when abroad).
1. The proceeds, products, fruits, and income B. If winning ticket is bought by conjugal
of their separate properties; funds = prize is conjugal
2. Everything acquired by them within - presumption is ticket bought during
marriage through their own efforts; marriage is bought by conjugal
3. Everything acquired by them by chance funds
Beneficiaries of the family home 4. If the family home is sold for more than
(Art. 154): the value allowed, the proceeds shall be
1. Husband and wife, or an unmarried applied as follows:
person who is the head of the family a. First, the obligation enumerated in
2. Parents (may include parent-in-laws), Article 155 must be paid
ascendants, descendants, brothers and b. Then the judgment in favor of the
sisters (legitimate/illegitimate), who creditor will be paid, plus all the costs
are living in the family home and who of execution
depend on the head of the family for c. The excess, if any, shall be delivered
support
X. PATERNITY AND FILIATION
Requisites to be a beneficiary:
1. The relationship is within those PATERNITY - the relationship or status of a
enumerated person with respect to his or her child
2. They live in the family home (paternity includes maternity).
3. They are dependent for legal support
on the head of the family FILIATION - the status of a person with
respect to his or her parents.
Requirements for the sale, alienation,
donation, assignment, or encumbrance of TYPES OF FILIATION:
the family home: 1. Natural
1. the written consent of the person a. Legitimate (Art. 164)
constituting it, b. Illegitimate (Arts.165, 175, 176)
2. his/her spouse, and c. Legitimated (Arts. 167-172)
3. majority of the beneficiaries of legal 2. By Adoption (R.A. No. 8552 (“Domestic
age Adoption Act”) and R.A. No. 8043 (“Inter-
[NOTE: If there is a conflict, the Court will country Adoption Act”)
decide.]
3 TYPES OF LEGITIMATE CHILDREN:
In case of death (ART. 159): 1. Legitimate proper
- The family home shall continue despite 2. Legitimated
the death of one or both spouses or of 3. Adopted
the unmarried head of the family for a
period of ten years, or as long as there 2 TYPES OF ILLEGITIMATE CHILDREN:
is a minor beneficiary. 1. Children of parents disqualified to marry
- The heirs cannot partition the home each other at conception and marriage.
unless the court finds compelling 2. Children of parents qualified to marry each
reasons therefor. other
Requisites for creditor to avail of the
right under article 160: A. LEGITIMATE CHILDREN
1. He must be a judgment creditor;
2. His claim is not among those excepted GENERAL RULE:
under Article155, and Those who are conceived OR born during a
3. He has reasonable grounds to believe that valid marriage
the family home is worth more than the
maximum amount fixed in Article 157 EXCEPTIONS to the general rule are
those children who are:
Procedure to avail of right under Article 1. Conceived as a result of artificial
160: insemination
1. The creditor must file a motion in the 2. Born of a voidable marriage before decree
court proceeding where he obtained a of annulment
favorable for a writ of execution against 3. Conceived or born before judgment of
the family home. annulment or absolute nullity under Art.
2. There will be a hearing on the motion 36 (psychological incapacity) becomes
where the creditor must prove that the final & executory
actual value of the family home exceeds 4. Conceived or born of a subsequent
the maximum amount fixed by the FC marriage under Art. 53 (failure to record
either at the time of its constitution or as the judgment, partition and distribution of
a result of improvements introduced properties, and delivery of children’s
thereafter its constitution. presumptive legitime)
3. If the creditor proves that the actual 5. Of mothers who may have declared
value exceeds the maximum amount the against their legitimacy or was sentenced
court will order its sale in execution. as an adulteress
6. Legally adopted
7. Legitimated, conceived and born outside of
wedlock of parents without impediment at
Grounds to impugn the legitimacy of the 1. Within 1 year – from knowledge of the
child: birth or its recording in the civil register, if
1. Physically impossibility for the husband the impugner resides in the city or
to have sexual intercourse with his wife municipality where the birth took place or
within the first 120 days of the 300 was recorded;
days which immediately preceded the 2. Within 2 years – from knowledge of the
birth of the child because of: birth or its recording in the civil register, if
a. Physical incapacity of the the impugner resides in the Philippines
husband to have sexual other than in the city or municipality
intercourse with his wife where the birth took place or was
b. The fact that the husband and recorded;
wife were living separately in 3. Within 3 years – from knowledge of the
such a way that sexual birth or its recording in the civil register, if
intercourse was not possible, or the impugner resides abroad
c. Serious illness of the husband
which absolutely prevented NOTE: Legitimacy cannot be collaterally
intercourse attacked. It can only be impugned in a direct
2. Biological or other scientific grounds action.
that the child could not have been that 180 days
of the husband, except in the case of 300 days
after
Termination after
children conceived through artificial of 1st Celebration
celebration
termination
of 2nd
insemination marriage of 2nd of 1st
marriage
a. Blood grouping tests – can marriage marriage
determine non-paternity but not
paternity (ex. A-B-O test).
b. Human Leukocyte Antigen Test
(HLA) – can prove identity
between child and father with a Child of Child of
probability exceeding 98%. the 1st the 2nd
c. DNA test marriage marriage
If the birth of the child has been consider the child as his, by continuous and
concealed or was unknown to the husband or clear manifestations of parental affection and
his heirs, the above periods shall be counted: care, which cannot be attributed to pure
1. From the discovery or knowledge of charity.
the birth of the child
2. From the discovery or knowledge of “Continuous” means uninterrupted and
the fact of registration of the birth, consistent, but does not require any particular
whichever is earlier. length of time.
5. If the child is a minor, incapacitated or [i.e. children of those who are not
insane, his guardian can bring the action disqualified by any impediment to marry
in his behalf each other]
R.A 8552: Domestic Adoption Act of 1998 c. if spouses are legally separated from
each other
WHO MAY ADOPT:
PRE-ADOPTION SERVICES:
A. Filipino Citizens
1. Of legal age The DSWD shall provide for the following
2. In possession of full civil capacity and legal services:
rights 1. Counseling services for the biological
3. Of good moral character parents, prospective parents, and
4. Has not been convicted of any crime prospective adoptee
involving moral turpitude 2. Exhaust all efforts to locate the biological
5. Emotionally and psychologically capable of parents, if unknown
caring for children
6. At least sixteen (16) years older than WHO MAY BE ADOPTED:
adoptee, except when adopter is biological
parent of the adoptee or is the spouse of 1. Any person below 18 years old who has
the adoptee’s parent been administratively or judicially declared
7. In a position to support and care for available for adoption
his/her children in keeping with the means 2. The legitimate child of one spouse by the
of the family other spouse
3. An illegitimate child by a qualified adopter
B. Aliens to improve the child’s status to that of
1. Possession of the same as the legitimacy
qualifications for Filipinos 4. A person of legal age if, prior to the
2. His/her country has diplomatic relations adoption, said person has been
with the Philippines consistently considered and treated by the
3. Has been living continuously for 3 years adopter(s) as his/her child since minority
(provided that absences not exceeding 60 5. A child whose previous adoption has been
days per 1 year for professional, business, rescinded
or emergency reasons are allowed) in RP 6. A child whose biological or adoptive
prior to filing of decree is entered except parent(s) has died, provided that no
this may be waived under the following: proceedings shall be initiated within 6
(i) A former Filipino Citizen who seeks to months from the time of death of said
adopt a relative within the 4th degree parent(s)
of consanguinity or affinity
(ii) One who seeks to adopt the legitimate CONSENT NECESSARY FOR ADOPTION:
or illegitimate child of his/her Filipino
spouse 1. The prospective adoptee if 10 years or
(iii)One who is married to a Filipino Citizen older
and seeks to adopt jointly with his/her 2. The prospective adoptee’s biological
spouse a relative within the 4th degree parents or legal guardian
of consanguinity or affinity of the 3. The prospective adopters’ legitimate and
Filipino spouse adopted children who are ten years or
4. Has been certified by his/her diplomatic or over and, if any, illegitimate children living
consular office or any appropriate with them
government agency that he/she has the 4. The prospective adopter’s spouse in
legal capacity to adopt in his/her country appropriate cases
5. His/her government allows the adoptee to
enter his/her country as his/her adoptee [NOTE: A decree of adoption shall be effective
6. Has submitted all the necessary clearances as of the date the original petition was filed. It
and such certifications as may be required also applies in case the petitioner dies before
the issuance of the decree of adoption to
C. Guardians protect the interest of the adoptee.]
With respect to theirs ward after the
termination of the guardianship and Tamargo v. CA
clearance of his/her accountabilities G.R. No. 85044 (1992)
Where the petition for adoption was granted
Husband and wife shall adopt jointly after the child had shot and killed a girl, the
except: Supreme Court did not consider that
a. if one spouse seeks to adopt the retroactive effect may be given to the decree
legitimate child of the other of adoption so as to impose a liability upon
b. if one of the spouse seeks to adopt the adopting parents accruing at a time when
his/her illegitimate child provided that adopting parents had no actual or physically
other spouse has signified his/her custody over the adopted child. Retroactive
consent affect may perhaps be given to the granting of
the petition for adoption where such is
essential to permit the accrual of some benefit 4. Succession rights shall revert to its status
or advantage in favor of the adopted child. In prior to adoption, but only as of the date
the instant case, however, to hold that of judgment of judicial rescission. Vested
parental authority had been retroactively rights acquired prior to judicial rescission
lodged in the adopting parents so as to shall be respected.
burden them with liability for a tortious act
that they could not have foreseen and which R.A. 8043: Inter-Country Adoption
they could not have prevented would be unfair Act of 1995
and unconscionable.
INTER-COUNTRY ADOPTION refers to the
EFFECTS OF ADOPTION: socio-legal process of adopting a Filipino child
by a foreigner or a Filipino citizen permanently
1. Parental Authority: residing abroad where the petition is filed, the
All legal ties between biological parents supervised trial custody is undertaken, and
and adoptee are severed, and the same the decree of adoption is issued outside the
shall be vested on the adopter, except if Philippines.
the biological parent is the spouse of the
adopter. WHO MAY BE ADOPTED:
Rights of the Child, and to abide by the WHO ARE OBLIGED TO SUPPORT
rules and regulations issued to EACH OTHER:
implement the provisions of this Act 1. The spouses;
8. Comes from a country with whom the 2. Legitimate ascendants and descendants;
Philippines has diplomatic relations and 3. Parents and their legitimate children and
whose government maintains a the legitimate and illegitimate children of
similarly authorized and accredited the latter;
agency and that adoption is allowed 4. Parents and their illegitimate children and
under his/her national laws the legitimate and illegitimate children of
the latter; and
INTER-COUNTRY ADOPTION BOARD: 5. Legitimate brothers and sisters, whether
of full or half-blood.
Acts as the central authority in matters
relating to inter-country adoption ORDER OF SUPPORT
Ensures that all possibilities for adoption of (IF 2 OR MORE ARE TO GIVE SUPPORT):
the child under the Family Code have been 1. Spouses
exhausted and that inter-country adoption 2. Descendants, nearest in degree
is in the best interest of the child. 3. Ascendants, nearest in degree
4. Brothers and Sisters
TRIAL CUSTODY:
[NOTE: When two or more are obliged to give
The trial custody shall be for a period of 6 support, the payment shall be divided
months from the time of placement. between them in proportion to their
It starts upon actual physical transfer of resources.]
the child to the applicant who, as actual
custodian, shall exercise substitute
parental authority over the person of the XIII. PARENTAL AUTHORITY
child
The adopting parents shall submit to the PARENTAL AUTHORITY
governmental agency or the authorized (PATRIA POTESTAS):
and accredited agency, which shall in turn The mass of rights and obligations which
transmit a copy to the Board, a progress parents have in relation to the person and
report of the child's adjustment. The property of their children until their
progress report shall be taken into emancipation, and even after this under
consideration in deciding whether or not to certain circumstances (Manresa).
issue the decree of adoption.
PARENTAL AUTHORITY INCLUDES:
1. The caring for and rearing of children for
XII. SUPPORT civic consciousness and efficiency;
2. The development of the moral, mental and
SUPPORT consists of everything physical character and well-being of said
indispensable for sustenance, dwelling, children
clothing, medical attendance, education and
transportation, in keeping with the financial RULES AS TO THE EXERCISE OF
capacity of the family. PARENTAL AUTHORITY:
1. The father and the mother shall jointly
KINDS OF SUPPORT: exercise parental authority over the
1. Legal – that which is required to be given persons of their common children. In
by law case of disagreement, the father's
2. Judicial – that which is required to be decision shall prevail, unless there is a
given by court order whether pendent elite judicial order to the contrary (Art.211)
or in a final judgment 2. If the child is illegitimate, parental
3. Voluntary or Conventional – by authority is with the mother.
agreement
CHARACTERISTICS OF PARENTAL
AUTHORITY:
CHARACTERISTICS OF SUPPORT 1. It is a natural right and duty of the
(PREVIW): parents (Art. 209)
1. Personal 2. It cannot be renounced, transferred or
2. Intransmissible waived, except in cases authorized by
3. Not subject to waiver or compensation law (Art 210)
with regard to future support 3. It is jointly exercised by the father and
4. Exempt from attachment or execution the mother (Art. 211)
5. Reciprocal on the part of those who are by 4. It is purely personal and cannot be
law bound to support each other exercised through agents
6. Variable 5. It is temporary
DUTIES OF CHILDREN:
[ART.357, NCC]
obey and honor his parents or guardian
respect old relatives and persons
holding substitute parental authority
exert his utmost for his education and
training
Property
TABLE OF CONTENTS
I. Classification 36
II. Ownership 41
III. Accession 42
IV. Quieting of Title 48
V. Ruinous Buildings and Tress in Danger of Falling 49
VI. Co-Ownership 49
VII. Condominium Law (Act. No. 4726) 55
VIII. Possession 57
IX. Usufruct 63
X. Easements 65
XI. Legal Easements 70
XII. Voluntary Easements 77
XIII. Nuisance 78
XIV. Registry of Property 80
XV. Different Modes of Acquiring Ownership 80
XVI. Prescription 81
XVII. Tradition 82
XVIII. Lease 83
XIX. Donation 89
WHEN 1. When
APPLICABLE dispossession is
by any means
other than those
mentioned in
SEC 1 RULE 70
RoC
2. When, although
any of the
special
circumstances is
present, where
the 1 year
prescriptive
period for
bringing an
action for forcible
entry or unlawful
detainer has
expired
vendee or other
person
WHAT HAS 1. Prior possession de For an action to
TO BE facto reconveyance to prosper,
ALLEGED 2. Undue deprivation the property should not
thereof have passed into the hands
When the complaint of an innocent purchaser
fails to aver acts for value.
constitutive of forcible
entry/unlawful detainer
(how he was
dispossessed), the
remedy should be
either accion publiciana
or accion
reinvindicatoria.
In an ejectment suit,
issue of ownership can
be passed upon by the
court only by
determining the issue
of possession de facto.
An action for ejectment
is merely a quieting
process. If plaintiff has
in his favor priority in
time, he has the
security that entitles
him to remain in the
property (even against
the owner himself) until
he is lawfully ejected by
a person having a
better right by an
accion publiciana or
accion reinvindicatoria.
WHERE MTC RTC
FILED Summary In nature— Prescriptive Periods:
these cases involve a 1. 4 years—if based on
disturbance of social fraud from date of
order which must be issuance of
abated as promptly as certificate of title
possible without any over property
undue reliance on 2. 10 years—if based
technical and on implied or
procedural rules constructive trust
3. Imprescriptible—
when plaintiff is in
possession of
property
4. 30 years (without
prejudice to what is
established for the
acquisition of
ownership and other
real rights by
prescription-
ART1141)—if real
actions over
immovables
Accession Industrial
Art. 446 establishes 2 disputable
presumptions regarding BPS:
(a) The works etc. were made by the
owner
(b) They were made at the owner’s
expense
Exception: When contrary is proven
GF: options GF
1. Appropriate works, sowing or planting
+ pay indemnity
2. Oblige BP to pay price of land (or pay
rent if land value > building and trees)
or Sower to pay rent
Rent – fixed by agreement of parties; if
not, by court 448
BF: (both considered GF) BF: (both considered GF) 453 (1)
BPS OM
Land-owner
GF (GF) GF
GF
LO appropriates and pays indemnity: OM can proceed against LO only after BPS
refuses/cannot pay, OM cannot remove
LO sells land to BPS: OM can only proceed against BPS
GF BF (GF) GF
LO compels demolition: OM cannot claim from LO, BPS solely liable
LO appropriates and pays indemnity: OM can proceed against LO only after BPS
refuses/cannot pay, OM cannot remove
LO sells land to BPS: OM can only proceed against BPS
GF (GF) GF
BF
LO appropriates and pays indemnity: OM can proceed against LO only after BPS
refuses/cannot pay, OM cannot remove
LO sells land to BPS: OM can either ask BPS for indemnity + damages or remove
material even with damage
GF BF (BF)
GF
BPS removes even with damage: OM can either compel BPS to pay indemnity or to
return materials, in both cases + damages
BPS forces LO payment of indemnity: OM can’t demand removal/return but OM can
proceed against BPS and subsidiarily, the LO
BF BF (BF)
GF
Similar to GF-GF-(BF)-GF
LO appropriates and pays indemnity: OM can proceed against LO only after BPS
refuses/cannot pay, OM cannot remove
LO sells land to BPS: OM can either ask BPS for indemnity + damages or remove
material even with damage
Differences between action to quiet title, action to remove a cloud, and action to
prevent a Cloud
QUIET TITLE REMOVE CLOUD PREVENT CLOUD
Purpose is to put to an end Intended to procure the Removal of a possible
to vexatious troublesome cancellation; delivery; release foundation for a future
litigation over the property of an instrument, encumbrance hostile claim.
involved or claim, which constitutes a
claim in plaintiff’s title, and
which may be used to injure or
to vex him in his enjoyment of
his title.
Remedial action: involving a Preventive action: removes cloud Preventive action: to prevent
present adverse claim which may be used for future a future cloud on the title
actions
Plaintiff asserts his own Declares his own title and also
estate and declares avers he source and nature of
generally that the the defendant’s claim, points
defendant claims some out its defects and prays it be
estate on the land, without declared void
defining it and avers that
the claim is without
foundation and calls on the
defendant to set forth the
nature of his claim for
determination
Filed against people who have Filed against defendant who
claims; claims are more asserts claims based on an invalid
general in nature instrument (but not apparent)
(4)Right to use the thing according him upon termination of the co-
to its intended purpose ownership and, as earlier discussed,
that the remaining co-owners have
may be altered by agreement, the right to redeem, within a
express or implied, provided: specified period, the shares which
- without injury or prejudice to may have been sold to the third
interest of co-ownership; and party (Reyes vs. Judge
- without preventing the use of Concepcion)
other co-owners
Any act against the collective Art 1621 presupposes that the land
interest is an act against ownership sought to be redeemed is rural. Both
and the remedies available to owners lands—that sought to be redeemed
in general may by used by the co- and the adjacent lot belonging to the
owner person exercising the right of
redemption—must be rural. If one or
(5)Right of to bring an action in both are urban, the right cannot be
ejectment invoked. (Halili v. CA, 1998)
no need to implead all the other co- Art. 1623 requires that the written
owners as co-plaintiffs because the notification should come from the
suit is deemed to be for the benefit vendor or prospective vendor, not
of all: a favorable decision will from any other person. It is the
benefit everyone but an adverse notification from the seller, which
decision will not affect them if they can remove all doubts as to the fact
are not parties in the case or they of the sale, its perfection, and its
did not give their consent to the validity, for in a contract of sale, the
action seller is in the best position to
BUT action will not prosper if the confirm whether consent to the
action is for the benefit of himself essential obligation of selling the
only and not for the co-ownership property and transferring ownership
For title to prescribe in favor of the thereof to the vendee has been
co-owner, however, there must be a given. (Francisco v. Boiser)
clear showing that he has repudiated
the claims of the other co-owners The written notice of sale is
and that they have been mandatory for the tolling of the 30-
categorically advised of the exclusive day redemption period,
claim he is making to the property in notwithstanding actual knowledge of
question. Only then will the period of a co-owner. (Verdad v CA, 1996)
prescription being to run. (Cortes v.
Oliva) A third person, within the meaning of
Art. 1620 of the Civil Code (on the
(6)Right to exercise legal right of legal redemption of a co-
redemption owner) is anyone who is not a co-
owner. (Pilapil v CA)
Redemption of the property by a co-
owner does not vest in him sole
ownership over said property but will (7)Right to ask for partition
inure to the benefit of all co-owners.
Redemption is not a mode of PARTITION: a division between two
termination of relationship. or more persons of real or personal
(Mariano v CA) property which they own as co-
partners, joins tenants or tenants in
By the very nature of the right of common, effected by the setting
"legal redemption", a co-owner's apart of such interests so that they
right to redeem is invoked only after may enjoy and possess it in
the shares of the other co-owners severalty.
are sold to a third party or stranger
to the co-ownership. The law does Gen rule: A co-owner can always ask
not prohibit a co-owner from selling, for a partition. There is no
alienating or mortgaging his ideal prescriptive period.
share in the property held in Exceptions: (PUI SCAN)
common. The law merely provides 1. when partition is generally
that the alienation or mortgage shall Prohibited by law
be limited only to the portion of the 2. when partition would render the
property which may be allotted to thing Unserviceable, or the thing
only the agreement of the majority and their decisions are binding upon
because it is merely an act of the minority. Majority may only
administration. proceed to act without notice to the
- but if withholding of consent by minority if the circumstances warrant
any one of the co-owners is urgency.
clearly prejudicial to the common
interest, courts may afford b) An administrator who may or may
adequate relief (491) not be a co-owner delegated by the
co-owners
Acts of Acts of An administrator cannot, without the
Alteration/Acts Administration unanimous consent of all the co-
of Ownership owners, compromise on, donate,
Relates to the use, Also for the better cede, alienate, mortgage, or
substance or form enjoyment of the encumber in any manner the
of the thing property common property.
Examples:
Effects of acts of alteration and (1) When the resolution calls for a
remedies of non-consenting co- substantial change or alteration of
owner : the common property or of the use
(a) Co-owner who made alterations to which it has been dedicated by
may lose whatever he has spent agreement or by its nature
as he will not be reimbursed (2) When the resolution goes beyond
(b) He may be ordered to demolish the limits of mere administration, or
or remove the alteration at his invades the proprietary rights of the
expense co-owners, in violation of Art. 491
(c) He will be liable for damages and (prohibiting against acts of
other losses alteration)
(d) Co-ownership will benefit from (3) When the majority leases, loans,
the alteration if other co-owners or other contracts without security,
decide to contribute to the exposing the thing to serious danger
expenses by reimbursing him to the prejudice of the other co-
(ratification) owners.
(e) If a house is built in a common (4) When the majority refuse to
lot, the co-owners are entitled to dismiss an administrator who is
the proportionate share of the guilty of fraud or negligence in his
rent. management, or does not have the
respectability, aptitude, and solvency
Lease becomes an act of ownership if: required of persons holding such
(1) It is recorded in the Registry position.
of Property (5) When resolution, if carried out,
(2) It is for more than 1 year would cause serious injury to the
thing itself, such as an agreement
Management of Property not to borrow money under
reasonable terms when it is
Who may manage: necessary for urgent repairs for
a) The co-owners themselves preservation, or for the payment of
Court cannot appoint an taxes.
administrator to manage a property
co-owned when the co-owners want Remedies of the minority
to handle the management. In this If the acts of the majority prejudice
management, the “majority” control the minority, the latter may ask for
injunction or at worse, a partition.
land is patented or registered under the (ii) as the unit may lawfully be
Land Registration or Cadastral Acts. altered or reconstructed from
time to time
Method of taxation (iii)such easement shall be
automatically terminated in
Sec. 25. Whenever real property has any air space upon
been divided into condominiums, each destruction of the units to
condominium separately owned shall be render it untenable
separately assessed, for purposes of real (c) Unless otherwise provided, the
property taxation and other tax common areas are held in
purposes to the owners thereof and the common by the holders of units,
tax on each such condominium shall in equal shares, one for each unit
constitute a lien solely thereon. (d) a non-exclusive ease ment for
ingress, egress, and support
Partition of Common Areas through the common areas are
subject to such easements
Sec.7. Except as provided in the
(e) Each condominium unit owner
following section, the common areas
shall have the exclusive right to
shall remain undivided, and there shall
paint, repaint, tile, wax, paper, or
be no judicial partition thereof.
otherwise refinish and decorate
the inner surfaces of the walls,
(b) Who manages the condominium? ceilings, floors, windows, and
(i) condominium corporation doors, bounding his own unit
(preferred by law) – co- (f) Each condominium owner shall
terminous with the existence have the exclusive right to
of the condominium mortgage, pledge, encumber his
(ii) co-ownership condominium and to have the
(iii) association of owners same appraised independently of
the other condominiums but any
Rights and Obligations of obligation incurred by such
Condominium owner condominium owner is personal
What are the incidents of a to him.
condominium grant? (g) Each condominium owner has
(a) The boundary of the unit grant also the absolute right to sell or
(i) the interior surfaces of the dispose of his condominium
perimeter walls, floors, unless the master deed contains
ceilings, windows, and doors a requirement that the property
(ii) those which are not part of be first offered to the
the unit bearing walls, condominium owners within a
columns, floors, roofs, reasonable period of time before
foundations, and other the same is offered to outside
common structural elements parties.
of the building; lobbies,
stairways, hallways, and other Case
areas of common use,
elevator equipment and Ownership of a unit, therefore, is a
shafts, central heating, condition sine qua non to being a
central refrigeration, and shareholder in the condominium
central air-conditioning corporation By necessary implication,
equipment, reservoirs, tanks, the "separate interest" in a
pumps, and other central condominium, which entitles the holder
services and faicilities, pipes, to become automatically a share holder
ducts, flues, chutes, conduits, in the condominium corporation, as
wires and other utility provided in Section 2 of the
installations, wherever Condominium Act, can be no other than
located, except the outlets ownership of a unit. (Sunset View
thereof when located within Condominium v Judge Campos)
the unit.
(b) Exclusive easement for the use of
the air space encompassed by
the boundaries of th unit
(i) as it exists at any particular
time
Loss of Possession
(1) Abandonment
(2) Assignment—WON gratuitously or
onerously
(3) Destruction—must be total/goes
out of commerce
(4) Possession of another—the
possession that is lost here refers
only to possession as a fact (de
facto), not the legal right of
possession (de jure)
5. over vineyards and woodlands (575- It is not essential that the benefit be
576) great. It is sufficient that there is a
6. on mortgaged property (600) determinate use or utility in favor of
7. over entire patrimony (598) a dominant estate.
8. over consumable property (574) Not necessary that the right acquired
quasi-usufruct under the servitude be exercised.
may be on consumables, e.g., Servitudes can’t be established on
food, but must be replaced with things which are outside the
equal quantity if not appraised, commerce of man. Such things are
must be considered as on their inalienable. Imposition of an
value encumbrance would constitute an
may also be on non-consumables alienation.
that gradually deteriorate by use, Servitudes cannot be created on
e,g,, furniture or car in reality, property of public dominion.
the usufruct is converted into a
simple loan not upon consumable Easement v. Lease
things themselves which are EASEMENT LEASE
delivered to the Real right WON Real right only
usufructuary, but upon the registered, WON when it is
sum representing their value or real or personal registered, or
upon a quantity of things of the when its subject
same kind and quality the matter is real
usufructuary, in effect, becomes property and the
the owner of the things in duration exceeds 1
usufruct, while the grantor year.
becomes a mere creditor entitled Imposed only on May involve either
to the return of the value or of real property real or personal
the things of the same quantity property
and quality Limited right to the Limited right to
use of real both the
property of possession and use
X. EASEMENTS another, without of another’s
right of possession. property.
Art. 613. “Easement or Servitude”:
Easement v. Usufruct
encumbrance imposed upon an
immovable for the benefit of another EASEMENT USUFRUCT
immovable belonging to a different Imposed only on May involve either
owner... real property. real or personal
“Dominant estate”: the immovable in property.
favor of which the easement is Limited to a Includes all the
established particular or uses and fruits of
“Servient estate”: the immovable specific use of the the property.
which is the subject of the easement. servient estate.
Non-possessory Involves right of
Art. 614. “Personal Easements”: right over an possession in an
established for the benefit of a immovable immovable or
community, or of one or more persons movable.
to whom the encumbered estate does Not extinguished As a rule,
not belong. by death of the extinguished by
- real right or encumbrance imposed on dominant owner. the death of the
an immovable for the benefit of another usufructuary.
immovable belonging to a different
owner or for the benefit of a community
or one or more persons to whom the Essential Features of Easements or
encumbered estate does not belong by Real Servitudes (RAIL-IRI-NA-
which the owner is obliged to abstain RIP)
from doing or to permit a certain thing
to be done on his estate. (1) It is a real right. It gives rise to an
action in rem or real action against
Easements cannot be established on any possessor of the servient estate.
personal property (2) It is a right enjoyed over another
Burden should not be so great as to property (jus in re aliena). It cannot
amount to a taking of his property exist in one’s own property (nulli res
sua servit). Servient and dominant
As to recepient of benefit
public at
(6) It can exist only between
large or in
neighboring tenements. It can’t be
some class of
created on another servitude.
indeterminate
(7) It cannot consist in requiring the
individuals
owner of the servient estate to do an
act unless the act is accessory to a ii. Private:
praedial servitude (obligation propter vested in a
rem). determinate
(8) It may consist in requiring the individual or
owner of the dominant estate certain
demanding that the owner of the persons
servient estate refrain from doing
Voluntar Legal Mixed
something (servitus in non faciendo),
y
or that the latter permit that Impose Created
something be done over the servient Establish d by law partly
property (servitus in patendo) but ed by will either by will
not in the right to demand that the or for or
owner of the servient estate do agreeme public agree-
something (servitus in faciendo) nt of the use or ment
As to its source
apparent
Made known
(10) It is intransmissible, cannot be and are Show no
alienated separately from the continually external
tenement. It can’t be the object of kept in view indication of
mortgage and exists even if not by external their
annotated. signs that existence
(11) It is indivisible. (618) reveal the (Art.615)
(12) It has permanence. use and
* In general,
enjoyment of
indicated
negative
the same
easements
(Art.615)
are non-
apparent.
obligation of doing
may have made
allowing something
use of the
duty
something to which he
easement,
be done or of could lawfully
commenced to
doing it do if the
exercise it upon
As to
(6) Whenever the dividing wall, being necessary for the preservation of the
built of masonry, has stepping stones, party wall by reason of the greater
which at certain intervals project from height or depth which has been given it.
the surface on one side only, but not on If the party wall cannot bear the
the other; increased height, the owner desiring to
(7) Whenever lands inclosed by fences raise it shall be obliged to reconstruct it
or live hedges adjoin others which are at his own expense and, if for this
not inclosed. purpose it be necessary to make it
In all these cases, the ownership of the thicker, he shall give the space required
walls, fences or hedges shall be deemed from his own land.
to belong exclusively to the owner of the
property or tenement which has in its Art. 665. The other owners who have
favor the presumption on any one of not contributed in giving increased
these signs. (573) height, depth or thickness to the wall
may, nevertheless, acquire the right of
part-ownership therein, by paying
Art. 661. Ditches or drains opened proportionally the value of the work at
between two estates are also presumed the time of the acquisition and of the
as common to both, if there is no title or land used for its increased thickness.
sign showing the contrary.
There is a sign contrary to the part- Art. 666. Every part-owner of a party
ownership whenever the earth or dirt wall may use it in proportion to the right
removed to open the ditch or to clean it he may have in the co-ownership,
is only on one side thereof, in which without interfering with the common and
case the ownership of the ditch shall respective uses by the other co-owners.
belong exclusively to the owner of the
land having this exterior sign in its Each part-owner can use the party
favor. wall only in proportion to his interest
Art. 662. The cost of repairs and (d) Easement of Light and View
construction of party walls and the
maintenance of fences, live hedges, Art. 667. No part-owner may, without
ditches, and drains owned in common, the consent of the others, open through
shall be borne by all the owners of the the party wall any window or aperture of
lands or tenements having the party wall any kind.
in their favor, in proportion to the right
of each. Such act would imply the exercise of
Nevertheless, any owner may exempt the right of ownership by the use of
himself from contributing to this charge the entire thickness of the wall. It
by renouncing his part-ownership, would be an invasion of the right of
except when the party wall supports a the other part owners.
building belonging to him.
Art. 668. The period of prescription for
the acquisition of an easement of light
Art. 663. If the owner of a building, and view shall be counted:
supported by a party wall desires to (1) From the time of the opening of the
demolish the building, he may also window, if it is through a party wall; or
renounce his part-ownership of the wall, (2) From the time of the formal
but the cost of all repairs and work prohibition upon the proprietor of the
necessary to prevent any damage which adjoining land or tenement, if the
the demolition may cause to the party window is through a wall on the
wall, on this occasion only, shall be dominant estate.
borne by him.
Art. 669. When the distances in Article
670 are not observed, the owner of a
Art. 664. Every owner may increase the wall which is not party wall, adjoining a
height of the party wall, doing at his own tenement or piece of land belonging to
expense and paying for any damage another, can make in it openings to
which may be caused by the work, even admit light at the height of the ceiling
though such damage be temporary. joints or immediately under the ceiling,
The expenses of maintaining the wall in and of the size of thirty centimeters
the part newly raised or deepened at its square, and, in every case, with an iron
foundation shall also be paid for by him; grating imbedded in the wall and with a
and, in addition, the indemnity for the wire screen.
increased expenses which may be
Nevertheless, the owner of the tenement rise to the easement of light and
or property adjoining the wall in which view by prescription.
the openings are made can close them
should he acquire part-ownership Art. 672. The provisions of Article 670
thereof, if there be no stipulation to the are not applicable to buildings separated
contrary. by a public way or alley, which is not
He can also obstruct them by less than three meters wide, subject to
constructing a building on his land or by special regulations and local ordinances.
raising a wall thereon contiguous to that
having such openings, unless an Art. 673. Whenever by any title a right
easement of light has been acquired. has been acquired to have direct views,
balconies or belvederes overlooking an
Openings allowed are for the purpose adjoining property, the owner of the
of admitting light. They can be servient estate cannot build thereon at
made only in the walls of buildings less than a distance of three meters to
and not in the walls separating be measured in the manner provided in
gardens or yards because they have Article 671. Any stipulation permitting
no need for such openings distances less than those prescribed in
The period to require the closing of Article 670 is void. Art. 673. Whenever
the illegal opening begins to run from by any title a right has been acquired to
the moment such opening is made. have direct views, balconies or
But it is only the action to compel the belvederes overlooking an adjoining
closure which prescribes property, the owner of the servient
Although action to compel the closing estate cannot build thereon at less than
has prescribed, this does not mean a distance of three meters to be
servitude has been acquired by measured in the manner provided in
person who opened them. Servitude Article 671. Any stipulation permitting
is negative and period for acquisitive distances less than those prescribed in
prescription will begin to run only Article 670 is void.
from the time that the owner
asserting the servitude has forbidden This article refers to a true servitude.
the owner of adjoining tenement Acquisition may be through contact,
from doing something he latter could testament, or prescription. Distance
lawfully do without the servitude. may be increased by stipulation of
the parties. It may also be extended
Art. 670. No windows, apertures, by prescription.
balconies, or other similar projections
which afford a direct view upon or (e)Drainage of Buildings
towards an adjoining land or tenement
can be made, without leaving a distance Art. 674. The owner of a building shall
of two meters between the wall in which be obliged to construct its roof or
they are made and such contiguous covering in such manner that the rain
property. water shall fall on his own land or on a
Neither can side or oblique views upon street or public place, and not on the
or towards such conterminous property land of his neighbor, even though the
be had, unless there be a distance of adjacent land may belong to two or
sixty centimeters. more persons, one of whom is the owner
The nonobservance of these distances of the roof. Even if it should fall on his
does not give rise to prescription. own land, the owner shall be obliged to
collect the water in such a way as not to
Direct View— that which is obtained cause damage to the adjacent land or
from a wall parallel to the boundary tenement.
line, such that from the opening in
such wall, it is possible to see the Falling water is res nullius and has
adjoining tenement without the no owner. Every owner of a house
necessity of putting out or turning or building would have aright to
one’s head dispose of it in any manner even to
Side or oblique view—that which is the prejudice of neighbors had it not
obtained from a wall a an angle with been for the provisions in this Code
the boundary line such that in order Last sentence is an exception to Art
to see the adjoining tenement, it is 637 which requires lower tenements
necessary to put out or turn one’s to receive water flowing naturally
head to the left or to the right from higher tenements.
Mere opening of windows in violation
of the present article does not give
Art. 675. The owner of a tenement or a any damage to the neighboring lands or
piece of land, subject to the easement of tenements.
receiving water falling from roofs, may
build in such manner as to receive the Art. 679. No trees shall be planted near
water upon his own roof or give it a tenement or piece of land belonging to
another outlet in accordance with local another except at the distance
ordinances or customs, and in such a authorized by the ordinances or customs
way as not to cause any nuisance or of the place, and, in the absence
damage whatever to the dominant thereof, at a distance of at least two
estate. meters from the dividing line of the
estates if tall trees are planted and at a
Receive water through distance of at least fifty centimeters if
(1) another roof shrubs or small trees are planted.
(2) another outlet Every landowner shall have the right to
In accordance with local ordinances demand that trees hereafter planted at a
or customs shorter distance from his land or
Not a nuisance to the dominant tenement be uprooted.
estate The provisions of this article also apply
to trees which have grown
Art. 676. Whenever the yard or court of spontaneously. (591a)
a house is surrounded by other houses,
and it is not possible to give an outlet
through the house itself to the rain Art. 680. If the branches of any tree
water collected thereon, the should extend over a neighboring estate,
establishment of an easement of tenement, garden or yard, the owner of
drainage can be demanded, giving an the latter shall have the right to demand
outlet to the water at the point of the that they be cut off insofar as they may
contiguous lands or tenements where its spread over his property, and, if it be
egress may be easiest, and establishing the roots of a neighboring tree which
a conduit for the drainage in such should penetrate into the land of
manner as to cause the least damage to another, the latter may cut them off
the servient estate, after payment of the himself within his property.
property indemnity.
Owner of the neighboring tenement
can cut the roots without necessity of
(f) Intermediate Distances notice to the owner of the trees. But
and Works for Certain as to the branches, it is necessary to
Constructions and Plantings as that they be cut.
Art. 677. No constructions can be built Art. 681. Fruits naturally falling upon
or plantings made near fortified places adjacent land belong to the owner of
or fortresses without compliance with said land.
the conditions required in special laws,
ordinances, and regulations relating (g) Easement against Nuisance
thereto.
Art. 682. Every building or piece of land
Art. 678. No person shall build any is subject to the easement which
aqueduct, well, sewer, furnace, forge, prohibits the proprietor or possessor
chimney, stable, depository of corrosive from committing nuisance through
substances, machinery, or factory which noise, jarring, offensive odor, smoke,
by reason of its nature or products is heat, dust, water, glare and other
dangerous or noxious, without observing causes.
the distances prescribed by the
regulations and customs of the place, Art. 683. Subject to zoning, health,
and without making the necessary police and other laws and regulations,
protective works, subject, in regard to factories and shops may be maintained
the manner thereof, to the conditions provided the least possible annoyance is
prescribed by such regulations. These caused to the neighborhood.
prohibitions cannot be altered or
renounced by stipulation on the part of Nuisance—that class of wrongs which
the adjoining proprietors. arise from unreasonable, unwarranted,
In the absence of regulations, such or unlawful use by a person of his own
precautions shall be taken as may be property and which produces material
considered necessary, in order to avoid annoyance, inconvenience, discomfort,
maintain the lessee in peaceful and (e) Lessor not obliged to answer
adequate enjoyment of the property for mere act of trespass by a
leased. third person
(2) Lack of payment of the price terminate the lease except when
stipulated; the contract provided otherwise
(3) Violation of any of the or purchaser is aware of lease.
conditions agreed upon in the If the buyer makes use of this
contract; right, the lessee may demand
(4) When the lessee devotes the that he be allowed to gather the
thing leased to any use or fruits of the harvest which
service not stipulated which corresponds to the current
causes the deterioration agricultural year and that the
thereof, or if he does not vendor indemnify him for
observe due diligence in its damages suffered. This right does
use. not extend to the gathering of
When the lease contract does not fishes, which require 2 years
have a definite period, but is before they are of any
terminable upon 30 days notice, commercial value.
the lease will terminate upon the The act of the new owner of
expiration of 30 days from the giving notice of an increase of
receipt of notice, whether the rent, when the existing lease is of
termination coincides with the an indefinite time, or when the
rent day or not. original period has expired,
The landlord has the right to constitutes a notice of
increase the rent after the termination of the original lease.
expiration of the stipulated
period. And if no period is
stipulated, in a lease of urban Right to Repurchase
property, notice by the lessor of The purchaser in a sale with the
an increase in rent is equivalent right to redemption cannot make
to notice of termination of the use of the power to eject the
original agreement. lessee until the end of the period
of redemption.
(12) Right of purchaser of But when the vendor remains in
leased land possession as a tenant, and he
fails to pay the agreed rent, he
Art. 1676. The purchaser of a piece of may be evicted by the vendee
land which is under a lease that is not even before the period of
recorded in the Registry of Property may redemption has expired.
terminate the lease, save when there is
a stipulation to the contrary in the (13) Useful improvements in
contract of sale, or when the purchaser good faith made by lessee.
knows of the existence of the lease.
If the buyer makes use of this right, Indemnity For Improvements
the lessee may demand that he be If the lessee makes, in good
allowed to gather the fruits of the faith, useful improvements the
harvest which corresponds to the current lessor upon the termination of
agricultural year and that the vendor the lease shall pay the lessee
indemnifies him for damages suffered. one-half of the value of the
If the sale is fictitious, for the improvements at that time.
purpose of extinguishing the lease, the
supposed vendee cannot make use of (14) Special provisions for
the right granted in the first paragraph leases of rural lands
of this article. The sale is presumed to It is urban when the principal
be fictitious if at the time the supposed purpose is dwelling.
vendee demands the termination of the It is rural when the principal
lease, the sale is not recorded in the purpose is exploitation of the soil.
Registry of Property.
Oral In writing
Value of the thing Value of the
donated < or = thing donated
P5,000 > P5,000;
otherwise, void
Requires
simultaneous
delivery of the
thing or the
document which
represents the
thing
DONOR DONEE
ART 735: All persons who may contract ART 738; All those not specially
WHO ARE
donation
ART 736: Guardians and trustees with
respect to the property entrusted to
them
ART 739: Void donations:
1) those made between persons guilty of adultery or concubinage at the time
of the donation (the declaration of nullity may be brought by the spouse of
the donor or donee and only preponderance of evidence is needed)
WHO ARE NOT ALLOWED
ONS
simultaneous delivery, donation is void the donee or his heirs accept, the
unless it is made in writing. donation subsists but in reality it is a
new and valid one.
The law does not require that when the
donation is made in writing the While a donation of immovable property
acceptance should also be in writing (if not made in a public instrument is not
value does not exceed P5,000). effective as a transfer of title, it is a
circumstance which may explain the
(b) Real property (Art. 749) adverse and exclusive character of the
possession of the intended donee and
Art. 1357 is not applicable. Donee such possession may ripen into
cannot bring an action to compel the ownership by prescription.
donor to execute a public instrument of
donation. That article is applicable only Rules in Art. 748 and 749 not
to contracts which validly exist and applicable to:
cannot be held applicable to a case i. onerous donations
where the form is required in order to ii. modal donations
make it valid. iii. mortis causa donations
iv. donations propter nuptias
Where the donor executed private
instruments of donation and after his
death his only heir executed a public What may be given:
instrument ratifying the donation, such All or part of donor’s present
public instrument cannot be considered property provided he reserves
as having retroactively perfected the sufficient means for the support
gift. It might serve as a quitclaim on the of the ff:
part of the heir who is estopped from himself
asserting any right to the properties. relatives who by law are entitled
to his support
If the instrument of donation has been legitimes shall not be impaired
recorded in the registry of property, the when w/o reservation or if
instrument that shows the acceptance inofficious, may be reduced on
should also be recorded. petition of persons affected
except: conditional donation &
If acceptance has been made but before donation mortis causa
the donor has been notified, the donor except: future property (Osorio
dies, the donation is not perfected. If vs. Osorio)
the donor’s heirs ratify the donation and
KINDS OF DONATION
Pure/Simple Remuneratory Conditional Onerous
a) Consideration Liberality or merits of Valuable Valuable consideration
Merits of donee donee or burden/ consideration is given
charge of past imposed but value
services provided they is less than value of
do not constitute thing donated
demandable debt
b) law to apply/ Law on donations Extent of burden Law on obligations
forms imposed>oblicon
Law on donations excess>donation
c) form of Required Required Required
acceptance
Required
d) reservation Applicable Applicable Not Applicable
w/regards to
personal support
& legitime
Applicable
e) warranty
against eviction
& hidden defects
In bad faith only In bad faith only In bad faith only Applies
f) revocation
Applicable Applicable Applicable Applicable
g) effect of considered not written considered not Obligation nullified
impossible/ written
illegal conditions
considered not
written
MODES OF EXTINGUISHMENT
BIRTH OF CHILD NON-FULFILLMENT OF INGRATITUDE
CONDITION
Ipso jure revocation, no needs court action needs court action
need for action., court
decision is merely
declaratory
Extent: portion which may Extent: whole portion but Extent: Whole portion returned
impair legitime of heirs court may rule partial
revocation only
Property must be returned Property in excess Property to be returned
Alienation/mortgages done
prior to recording in
Register of Deeds:
If already sold or cannot Alienations/mortgages Prior ones are void; demand value
be returned – the value imposed are void unless of property when alienated and
must be returned registered with Register of can’t be recovered or redeemed
If mortgaged – donor may Deeds from 3rd persons
redeem the mortgage with
right to recover from
donee
Fruits to be returned at filing Fruits to be returned at filing
of action for revocation of complainant
Prescription of action is 4 Prescription is 4 years from Prescription is 1 year from knowledge
years from birth, etc. non-fulfilment of fact and it was possible for him to
bring action
Action cannot be renounced Action cannot be renounced
in advance
Right of action transmitted to Right of action at instance of Heirs can’t file action
heirs donor but may be transmitted
to heirs
Action extends to donee’s Action does not extend to
heirs donee’s heirs
Succession
TABLE OF CONTENTS
I. Succession in General 99
II. Testamentary Succession 99
III. Legal or Intestate Succession 109
IV. Provisions Common to Testamentary and Intestate Succession 114
H. SUBSTITUTION OF HEIRS
KINDS OF INSTITUTIONS
1. Simple or Pure – the rights to the DEFINITION OF SUBSITUTION (Art. 857,
succession are transmitted from the CC)
moment of the death of the decedent.
(Art. 777, CC) - It is the appointment of another
2. Conditional – may be potestative, heir
causal or mixed. (See Arts. 871 – 884) - so that he may enter into the
*Disposicion Captatoria – disposition inheritance in default of the heir
made upon the condition that the heir originally instituted.
shall make some provision in his will in
favor of the testator or of any other CLASSES OF SUBSITITUTION
person. This is void. (Art. 875, CC) 1. Vulgar or Simple – the testator may
3. With a Term – designation of the day designate one or more person/s to
or time when the effects of the substitute the heir/s instituted in case
institution of an heir shall commence such heir/s should: (Art. 859, CC)
or cease. (Art. 885, CC) a. die before him (predecease)
4. Modal – institution where the testator b. should not wish to accept the
states the following: (Art. 882, CC) inheritance (renounce)
a. the object of the institution; or c. should be incapacitated to accept
b. the purpose of the application of the inheritance (incapacitated)
the property left by the testator; or 2. Brief or Compendious (Art. 860, CC)
c. the charge imposed by the creator a. Brief - two or more persons
upon the heir. designated by the testator to
*Doctrine of Constructive substitute for only one heir.
Compliance – When without the fault b. Compendious – One person is
of the heir, the modal institution designated to take the place of two
cannot take effect in the exact manner or more heirs.
stated by the testator, it shall be 3. Reciprocal – If the heirs instituted in
complied with in a manner most unequal shares should be reciprocally
analogous to and in conformity with his substituted, the substitute shall acquire
wishes. (Art. 883, CC) the share of the heir who dies,
renounces, or is incapacitated, unless
it clearly appears that the intention of
the testator was otherwise. If there are
more than one substitute, they shall
have the same share in the
Legitmate children- LC
Illegitimate children- ILC
LP, ¼ ½
ILC
LP, SS ¼ ½
ILP, SS ¼ ¼
1
LEGITIMATE CHILDREN AND LEGITIMATE DESCENDANTS ALONE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LC ½ ½ 1
TOTAL ½ ½ 1
2
ONE LEGITIMATE CHILD AND SURVIVING SPOUSE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LC ½ ½
SS ¼ ¼ ½
TOTAL ¾ ¼ 1
3
LEGITIMATE CHILDREN AND SURVIVING SPOUSE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LC Remaining portion of Whole estate divided
estate after paying equally between total
½
legitimes # of children plus the
SS
SS Legitimes to be # of children plus the
divided equally SS (see above)
Same as share of 1 LC
between total # of
children plus the SS
TOTAL Varies on no. of Varies on no. of 1
children children
4
LEGITIMATE CHILDREN AND ILLEGITIMATE CHILDREN
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LC ½ Remaining portion of Whole estate divided
estate after paying by the ratio of 2:1 for
legitimes each LC as compared
to the ILC
ILC ½ share of 1 LC Legitimes to be 1 for each ILC
divided by the ratio of provided that legitimes
2 for each LC, 1 for wouldn’t be impaired
each ILC
TOTAL Varies on # of children Varies on # of children 1
5
ONE LEGITIMATE CHILD, ILLEGITIMATE CHILD, AND SURVIVING SPOUSE
SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE
Intestate Heir DISPOSAL SHARE
LC ½ Remaining portion of Whole estate divided
estate after paying by the ratio of 2 for
legitimes to be divided each LC
by the ratio of 2:1 for
each LC and each
ILC, respectively
ILC ½ share of 1 LC or ¼ 1 for each ILC (see 1 for each ILC
above)
SS ¼ Same share as a LC Legitimes wouldn’t be
impaired
TOTAL Varies depending on # Varies depending on # 1
of ILC of ILC
6
LEGITIMATE CHILDREN, ILLEGITIMATE CHILDREN AND SURVIVING SPOUSE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LC ½ Remaining portion of Whole estate divided
estate, if any after by the ratio of 2:1 for
paying legitimes to be each LC and ILC
divided by the ratio of respectively
2 for each LC
ILC ½ share of each LC 1 for each ILC (see 1 for each ILC (see
above) above)
SS Same share as one Same share as a LC, Same share as a LC,
LC provided legitimes provided legitimes
are not impaired are not impaired
TOTAL Varies depending on Varies depending on 1
no. of ILC no. of ILC
7
LEGITIMATE PARENTS ALONE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LP ½ ½ 1
TOTAL ½ ½ 1
8
LEGITIMATE PARENTS AND ILLEGITIMATE CHILDREN
9
LEGITIMATE PARENTS AND SURVIVING SPOUSE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LP ½ ½
SS ¼ ¼ ½
TOTAL ¾ ¼ 1
10
LEGITIMATE PARENTS, SURVIVING SPOUSE AND ILLEGITIMATE CHILDREN
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
LP ½ ½
SS 1/8 1/8 ¼
ILC ¼ ¼
TOTAL 7/8 1/8 1
11
ILLEGITIMATE CHILDREN ALONE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
ILC alone ½ ½ 1
TOTAL ½ ½ 1
12
ILLEGITIMATE CHILDREN AND SURVIVING SPOUSE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
ILC 1/3 1/6 ½
SS 1/3 1/6 ½
TOTAL 2/3 1/3 1
13
SURVIVING SPOUSE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
SS ½ or 1/3 ½ or 1/3 1
TOTAL ½ or 1/3 ½ or 1/3 1
14
ILLEGITIMATE PARENTS ALONE
ILP ½ ½ 1
TOTAL ½ ½ 1
15
ILLEGITIMATE PARENTS AND SURVIVING SPOUSE
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
ILP ¼ ¼ ½
SS ¼ ¼ ½
TOTAL ½ ½ 1
16
SIBLINGS, NEPHEWS AND NIECES ALONE
(SPECIAL KIND OF COLLATERAL RELATIVES)
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
Siblings, nephews, ½ ½ 1
nieces
TOTAL ½ ½ 1
17
SURVIVING SPOUSE, SIBLINGS, NEPHEWS AND NIECES
SHARE AS FREE TOTAL INTESTATE
Intestate Heir SHARE AS LEGITIME
DISPOSAL SHARE
SS ½ ½
Siblings, nephews, ½ ½
nieces
TOTAL ½ ½ 1
A. ACCRETION
DEFINITION OF ACCRETION (Art. 1015, CC)
- It is a right by virtue of which
- when two or more persons are called to the same inheritance, devise or legacy
- the part assigned to one who renounces or cannot receive his share or who died
before the testator
- is added or incorporated to that of his co-heirs, co-devisees, or co-legatees.
Disinheritance Representat'n - -
Intestate Succession
Suggested Answer:
(a) The compulsory heirs are the 2
legitimate children and the 2 illegitimate
children. The parents are excluded by the
legitimate children, while the brothers are
not compulsory heirs at all.
Their respective legitimes are:
1. The legitime of the 2 legitimate
children is ½ of the estate (P500,000) to
be divided between them equally, or
P250,000 each.
2. The legitime of each illegitimate
child is ½ the legitime of each legitimate
child or P125,000.
Since the total legitimes of the compulsory
heirs is P750,000, the balance of
P250,000 is the free portion.
TABLE OF CONTENTS
Title 1. Obligations 121
I. General Provisions 121
II. Effect of Obligations 122
III. Different Kinds of Obligations 128
IV. Extinguishment of Obligations 141
1. To deliver a thing which is of the quality *The creditor may demand that the obligation
intended by the parties taking into be performed by the debtor himself or by a
consideration the purpose of the obligation third person at the expense of the debtor.
and other circumstances (1246) However, in cases where the personal
qualifications of the debtor are taken into
2. To be liable for damages in casa of fraud, account, the only remedy of the creditor is an
negligence, or delay, in the performance action for damages. In the Balane notes,
of his obligation, or contravention of the there is no action for compliance for an
tenor itself (1170) obligation to do because such would be
involuntary servitude which is prohibited by
Personal Right Real Right the constitution.
Before delivery After delivery
Jus ad rem/ jus in jus in re – a right
personam – a enforceable OBLIGATION NOT TO DO:
right enforceable against the world.
only against a – Not to do what should not be done
definite passive – To shoulder the cost to undo what should
subject, the not have been done (1168)
debtor – To pay damages (1170, 2201-2202)
Right pertaining to Right pertaining to
the person to a person over a *If undoing is not possible, either physically
demand from specific thing, or legally, or because of rights acquired by
another, as a without a passive third persons who acted in good faith, or for
definite passive subject individually some other reason, his remedy is an action
subject, the determined against for damages caused by the debtor’s violation
fulfillment of a whom such right of his obligation. (Manresa)
prestation to give, may be personally
to do or not to do enforced II. BREACH OF OBLIGATION
Bragaza v. CA DEFINITION
A contract was entered into for delivery of
materials on Dec. 22, 1990 in time for the Events which could not be foreseen, or which
aggrieved party’s wife who expressly wished though foreseen are inevitable. (Article 1174)
that she be buried before Christmas day, and
where, despite knowing this timetable and Act of God
having been paid for the materials, the
supplier failed to make the delivery despite An act of God is defined as an accident, due
pleas and earnest follow-ups by the widower. directly and exclusively to natural causes
Supreme Court ruled that time was of the without human intervention, which by no
essence of such contract and the supplier amount of foresight, pains or care, reasonably
should be liable for the delay and breach. to have been expected, could have been
prevented. (Nakpil v. CA)
N.B. Example of incurring delay without
judicial or extrajudicial demand. (#2)Time is Act of Man
of the essence. Contract was entered into in
view of burial before Christmas. In contrast, force majeure is a superior or
irresistible force, which is essentially an act of
Agcaoili v. GSIS man, such as wars, strikes, riots, acts of
The parties entered into a contract of sale of a robbers, pirates, and brigands.
government housing unit on the condition that
Agcaoili should occupy the same within three *In our law, acts of man and acts of God are
days from the receipt of notice. Failure to identical in so far as they exempt an obligor
immediately occupy contractually allowed from liability because the events happened
GSIS to terminate the contract. Agcaoli upon independent of the will of the obligor.
receipt of notice, immediately went to the (Republic v. Stevedoring Corp., 21 SCRA
place and found a house in a state of 279, 1967 and UST v. Descals, 38 Phil.
incompleteness that civilized occupation was 287, 1918)
of the rights arising from the obligation is 1. Physical loss (the thing perishes)
suspended. 2. Legal loss (the thing goes out of
2. After the condition has been fulfilled, the commerce)
obligation arises or becomes effective. 3. Civil loss (the thing disappears and the
3. The effects of a conditional obligation to existence is unknown or unrecoverable as
give, once the condition has been fulfilled a matter of fact or of law)
shall retroact to the day the obligation was
constituted. Rules
*The law allows retroactivity because the 1. When the thing is lost without the debtor’s
condition is not an essential requisite of an fault, the obligation is extinguished.
obligation. 2. When the thing is lost with the debtor’s
fault, the debtor pays for damages.
1. When the obligation imposes reciprocal
prestations upon the parties, the fruits and DETERIORATION
interests shall be deemed to have been
mutually compensated (this assumes a Rules
simultaneous performance of prestations).
1. When the thing deteriorates without the
*The fruits are mutually compensated for debtor’s fault, the creditor will suffer the
convenience. deterioration of impairment.
2. When the thing deteriorates with the
2. In a unilateral obligation, the debtor shall debtor’s fault, the creditor may choose
appropriate the fruits and interests between:
received unless the intention constituting a. Rescission (cancellation) of the
such was different. obligation with indemnity for damages,
3. In obligations to do or not to do, the court or
shall determine the retroactive effect of b. Fulfillment of the obligation also with
the condition that has been complied with. damages
In reciprocal obligations, a party cannot In case both parties have committed a breach
demand unless he complies or is ready to of the obligation, the liability of the first
comply with obligations (inferred from 1169). infractor shall be equitably tempered by the
courts. If it cannot be determined which of
*This is subject to same rules on interim the parties first violated the contract, the
obligations and interim remedies. same shall be deemed extinguished, and each
shall bear his own damages.
Non-Reciprocal Obligations
1. Rule against the first infractor, as
Those which do not impose simultaneous and tempered by courts
correlative performance on both parties. The 2. If first infractor cannot be determined,
performance of one party does not depend obligation extinguished
upon the simultaneous performance of
another. *Rescission should be done judicially unless
stipulated in the contract. Rescission will only
Remedies in Reciprocal Obligations be granted if breach of the obligation is
substantial and not mere occasional
RESCISSION IN ARTICLE 1191 malfunction of the machine without even an
allegation of loss of income. (Philippine
The power to rescind means the right to Amusement Enterprises, Inc. v.
cancel or to resolve the contract in case of Natividad)
non-fulfillment of the obligation on the part of
one of the parties. *Injured party has the power to rescind
but only through the courts in proper
It is the breach of faith committed by the proceedings. (Ocejo v. International Banking
person who is supposed to comply with Corp.)
obligation. It is not the rescission in 1380
which involves damage or lesion, or injury to UP v. de los Angeles
the economic interest of a person. The parties stipulated rescission of logging
agreements without the need for any judicial
Characteristics pronouncement.
The period attached to the obligation is for the 1. There is no express stipulation, but a
benefit of both parties. period is intended by the parties as can be
inferred from the nature and
Exception circumstances of the obligation.
2. If the duration of the period depends upon
When it appears from the tenor of the the will of the debtor.
obligation or other circumstances that the 3. If the debtor promises to pay when his
period has been established in favor of one or means permit him to do so. (1197)
the other subject to an express stipulation of
the parties, the period may be benefit the The Court May NOT Fix a Period When:
debtor or the creditor alone.
1. When no term has been specified by the
Period for the benefit of the debtor alone: parties because no term was ever
intended, in which case it is considered a
The debtor cannot be compelled to pay pure obligation.
prematurely, however, he may renounce the 2. When the obligation is payable on
benefit of the period by performing his demand.
obligation in advance. (Manresa) 3. When specified period is provided by law.
Period for the benefit of the creditor alone: Araneta, Inc. v. Philippine Sugar Estates
Development Co., Ltd.
The creditor may demand fulfillment even The parties in the case intended to defer
before the arrival of the term but the debtor performance of obligations until after the
cannot compel him to accept before the squatters were duly evicted. Although it was
expiration of the period (i.e., “on demand”). indefinite, such was the intention of the
parties and courts could not just assign a
Interim obligations period out of thin air. The requisite and
guideline for setting a period is when there is
In case of loss, deterioration or improvement no period specified but such was intended,
of the thing before the arrival of the day courts should just fix a period, which the
certain, the rules in article 1189 shall be parties could have intended.
observed.
i. Exercise due diligence; otherwise, Reasons for Fixing a Period
responsibility for loss, deterioration
(1189) 1. There can be no possibility of any breach
ii. Improvement inures to creditor, if at of contract or failure to perform the
expense of debtor only usufructuary obligation unless the period is fixed by the
right (1189) courts.
iii. Recover payment or delivery before 2. When the court has not yet fixed the
due and demandable period, it is premature to collect.
ABESAMIS V. WOODCRAFT WORKS, INC. A Debtor Loses the Right to Make Use of
THE CONTRACT PROVIDED THAT THE APPELLANT a Period (when the creditor can demand even
SHALL MAKE SHIPMENT BEFORE THE END OF JULY, when the obligation is not yet due) (1198)
BUT WILL NOT COMMENCE EARLIER THAN APRIL
WITH THE OPTION TO MAKE PARTIAL SHIPMENT
DEPENDING ON THE AVAILABILITY OF LOGS AND
1. The debtor cannot choose those IV. JOINT AND SOLIDARY OBLIGATIONS
prestations which are impossible, unlawful
or which could not have been the object of
JOINT OBLIGATIONS
the obligation. (1200)
Obligacion Mancomunada
2. The debtor has no more right of choice
when among the prestations whereby he is
It is an obligation where the whole liability is
alternatively bound, only one is
to be paid or fulfilled proportionately by the
practicable.
different debtors; and/or is to be demanded
3. The debtor cannot choose the part of one
proportionately by the different creditors.
prestation and part of another.
SOLIDARY OBLIGATION
The Right of Choice belongs to the Debtor
Obligacion Solidaria
As a general rule, in alternative obligations,
It is an obligation where each one of the
the right of choice belongs to the debtor.
debtors is bound to render, and/ or each one
However, the debtor may expressly give the
of the creditors has a right to demand
right of choice to the creditor.
compliance with the prestation. (1207)
Rules in Alternative Obligations
*In a joint obligation, each debtor shall
be liable only for his part of the debt
Debtor’s Creditor’s
presumed to be equal with the other debtors.
choice choice
The above provision is consistent with the rule
Due to a Fortuitous Event
that a joint obligation is presumed in case of
All Extinguish Extinguish
plurality of debtors or creditors for solidary
Some Deliver any of Deliver any of obligation exists only when the law so
the remaining the remaining provides, when expressly stipulated by the
One Deliver Deliver parties or when called for by the nature of the
Debtor’s Fault obligation. (Jurado) (see 1208)
All Value of the Value of any of
last thing lost the things and General Rule
and damages damages
Some Deliver any of Value of the By default, collective obligations are presumed
the remaining, thing lost, to be joint if there is concurrence of two or
no damages damages or more debtors and/ or creditors.
any of the
remaining Solidarity exists only
One Deliver, no
damages 1. When Stipulated by the parties using such
Loss of Last Thing words like “jointly and severally,” “in
Extinguish Value of any of solidum,” “I promise to pay” in a note
the things lost signed by two or more debtors, or similar
due to the words. (conventional solidarity)
creditor’s fault
and damages 2. When solidary liability is provided by Law,
hence, civil liability arising from crimes,
negotiorum gestio, commodatum or quasi- between the parties is joint, that is, liable only
delict shall be solidary. (legal solidarity) to a proportionate share. (1209)
3. When the Nature of the obligation requires *In a joint indivisible obligation, the
solidarity. liabilities of the debtors or the rights of the
creditors are joint, but they are indivisible as
4. When a charge or condition is imposed to compliance. (1224) The concurrence of all
upon heirs or legatees, and the Testament the creditors is necessary for demanding
expressly makes the charge or condition compliance due to the indivisibility of the
“in solidum”. obligation. The same is inversely true as
regards the debtors. The concurrence of all
5. When a solidary responsibility is imputed the creditors is also necessary for acts which
by a Final judgment upon several are prejudicial. But an act beneficial to all like
defendants. interruption of prescription may be performed
by one of the creditors.
Some Features of Joint Liability
Indivisible obligations are not necessarily
1. Insolvency of one debtor does not make solidary (1210)
the others liable.
2. Vitiated consent on the part of one debtor Indivisibility Solidarity
does not affect the others.
3. Demand made to one of the debtors is not Refers to the Refers to the legal
a demand to all because the debt of one is prestation or juridical tie
distinct from the others. binding the parties
Only the debtor All of the debtors
*In a given contract, wherein a party who is guilty of are liable for the
signs as a surety but the agreement states breach of breach of
joint and several liabilities, there is a solidary obligation is obligation
obligation. (Jaucian v. Querol) liable for committed by any
damages, thereby one of the debtrs.
Kinds of Solidarity (PAMela Anderson) terminating the
agency.
1. Passive Solidarity Can exist even if Can only exist
2. Active Solidarity there is only one when there is at
3. Mixed Solidarity – solidarity among debtor or one least two debtors
creditors and debtors creditor or creditors
The others are The others are
Passive Active not liable in case proportionately
Solidarity Solidarity of insolvency of liable in case of
Solidarity Solidarity of one debtor insolvency of one
of debtors creditors debtor
Any one of Any one of
the debtors can the creditors may Characteristics
be made liable for demand fulfillment
the fulfillment of of the entire 1. Demand must be made to all the joint
the entire obligation. debtors.
obligation, with 2. The creditor must proceed against all the
the consequent joint debtors, because the compliance of
right to demand the obligation is possible only if all of the
from the others joint debtors would act together.
their 3. If one of the debtors is insolvent, the
corresponding other(s) shall not be liable for his share.
shares in the 4. If one of the debtors cannot comply, the
liability. obligation is converted into monetary
It is in the Its essential consideration. One who is ready and
nature of a feature is that of willing to comply will pay his proportionate
mutual guaranty. mutual share, and the other not willing shall pay
representation. his share plus damages when his financial
condition improves.
5. If there is more than one creditor, delivery
Joint Indivisibility must be made to all, unless one is
authorized to receive for the others.
A joint indivisible obligation is one in
which the object or prestation is indivisible,
not susceptible of division; while the tie
Rules of Payment in Solidary Obligations The payor of the obligation may claim
from each co-debtor his share of the debt with
1. The creditor may proceed against any one interest, unless paid before debt is due or
of the solidary debtors or some or all of demandable (with no interest). (1217)
them as long as the debt has not been
fully collected. (1316) V. DIVISIBLE & INDIVISIBLE
2. Payment made by one of the solidary OBLIGATIONS
debtors extinguishes the obligation.
(1217) The indivisibility of an obligation does not
3. If two or more debtors offer to pay, the necessarily give rise to solidarity. Nor does
creditor may choose which offer to accept. solidarity of itself imply indivisibility. (1210)
(1217)
4. The paying debtor may ask for DIVISIBLE OBLIGATIONS
reimbursement with interest from his co-
debtors. (1217) Those obligations whose objects are capable
5. The share of the insolvent debtor shall be of partial performance in their delivery or
borne by all his co-debtors, pro-rata. performance.
(1217)
6. There shall be no reimbursement if the INDIVISIBLE OBLIGATIONS
solidary debtor paid AFTER the obligation
has prescribed or has become illegal. Those obligations whose objects are not
(1218) capable of partial fulfillment in delivery or
performance.
Rights of Solidary Debtor
If only the penal clause is void, the principal This must be made by the proper party to the
obligation remains valid and demandable. proper party
(1230)
(1) Payor
Nullity of the Principal Obligation
(a) Payor - the one performing, he can be
If the principal is void, the penal clause is also the debtor himself or his heirs or
void because the penal clause cannot stand assigns or his agent, or anyone
along without the principal obligation to which interested in the fulfillment of the
it is subordinated. obligation; can be anyone as long as it
is with the creditor's consent
However, if the nullity of the principal
obligation is due to the debtor’s fault who (b) 3RD person pays/performs - only the
acted in bad faith, and by reason of which the creditor's consent;
creditor suffered damages on equitable
grounds, the penalty may be enforced. If performance is done also with
debtor's consent - he takes the place
Chapter IV: Extinguishment of of the debtor. There is subrogation
except if the 3rd person intended it to
Obligations be a donation
Expenses:
Substantial Performance Unless it is otherwise stipulated, the
extrajudicial expenses required by the
1. Attempt in Good Faith to perform without payment shall be for the account of the
willful or intentional departure debtor. With regard to judicial costs, the
2. Deviation is slight Rules of Court shall govern. (1247)
3. Omission/Defect is technical or
unimportant
4. Must not be so material that intention of Special Rules/Forms Of Payment –
parties is not attained
Application of Payments – the designation
Effect of Substantial performance in good faith of the debt which payment shall be made, out
of 2 or more debts owing the same creditor:
1. Obligor may recover as though there has
been strict and complete fulfillment, less 1. May be made according to the stipulation
damages suffered by the obligee of the parties or application of party given
2. Right to rescind cannot be used for slight benefit of period;
breach 2. For the application to be valid, it must be
debtor’s choice or w/ consent of debtor
Effect of assignment of credit to 3rd b. Implied – When the old and new
person; can there still be compensation obligation are incompatible with each
other on every point
1. if made after compensation took place –
no effect; compensation already perfected Forms of Substitution by Debtors
2. if made before compensation took place –
depends 1. Expromision
a) with consent of debtor – debtor is 2. Delegacion
estopped unless he reserves his right &
gave notice to assignee
b) with knowledge but w/o consent of EXPROMISION
debtor – compensation may be set up
as to debts maturing prior to It is effected with the consent of the creditor
assignment at the instance of the new debtor even
c) w/o knowledge – compensation may without the consent or even against the will of
be set-up on all debts prior to his the old debtor.
knowledge
Requisites
It is effected with the consent of the creditor Legal subrogation cannot be presumed.
at the instance of the old debtor, with the
concurrence of the new debtor. Exception
As long as the stipulation are not contrary to: 5. Third persons who come into possession of
1. Law the object of the contact creating real
2. Morals rights (1312)
3. Good Customs
4. Public Order 6. Accion Pauliana (see Obligations > Breach
5. Public Policy (1306) of Obligation > Remedies of Creditors)
MUTUALITY
Performance or validity of the contract binds Kinds of Contracts
both parts and it cannot be left to the will of
one of them. (1308) 1. According to perfection
Consensual – a contract that is perfected
OBLIGATORY FORCE & CONSENSUALITY by agreement of the parties
Contracts are perfected by mere consent and Real – a contract that is perfected by
from that moment, the parties are bound, not delivery
only to the fulfillment of what has been Formal/ Solemn – a contract perfected by
expressly stipulated but also to all the conformity to essential formalities,
consequences which, according to their e.g., donation
nature, may be in keeping with good faith,
usage and law. 2. According to degree of importance
a. Principal – a contract that can stand
RELATIVITY alone
General Rule b. Accessory – a contract that is
Contracts take effect only between parties, dependent upon another contract for
their assigns and their heirs. its existence and validity
c. Preparatory – means through which
Exceptions other (future) contracts may be made;
1. Obligations arising from contract which are not an end in itself, e.g. Agency
not transmissible by their nature,
stipulation, or provision of law.
*To justify the inequality between the *A unilateral promise to buy or sell, if not
contracting parties, Manresa said that supported by a distinct consideration, may be
since the offeree is the first to know about withdrawn but may not be done whimsically
the concurrence of will if the parties, as a or arbitrarily; the right of the grantee here is
consequence, the obligation, as far as he damages and not specific performance. (Ang
is concerned, must also commence earlier. Yu v. CA, 1994)
2. Second View (Tolentino): Acceptance may *An option clause in order to be valid and
be revoked before it comes to the enforceable must indicate the definite price at
knowledge of the offeror because in such a which the person granting the option is willing
case, there is still no meeting of minds, to sell, contract can be enforced and not only
since the revocation has cancelled or damages. (Equatorial v. Mayfair, 24 SCRA
nullified the acceptance which thereby 483)
ceased to have any legal effect.
*The right of first refusal may be enforced by
Acceptance by Letter or Telegram (1319) specific performance. (Paranaque Kings v.
CA, 1997)
When is it binding?
Acceptance is binding only from the time the Persons Who Cannot Give Valid Consent
offerer had knowledge of it. to a Contract
MISTAKE
It is not only a wrong conception of the thing *Caveat Emptor – dealer’s talk, buyer
but also the lack of knowledge with respect to beware
it. (Manresa)
ii. Opinions: A mere expression of an
General Rule opinion does not signify fraud, unless
Mistake does not vitiate consent. made by an expert and the other party
has relied on the former's special
Exception: knowledge. (1341)
Mutual error as to the effect of an agreement
when the real purpose of the parties is iii. Misrepresentation by a third person
frustrated. does not vitiate consent, unless such
misrepresentation has created
Requisites: substantial mistake and the same is
a. Mistake must be with respect to the mutual. (1342)
legal effect of an agreement
b. It must be mutual iv. Misrepresentation made in good faith is
c. The real purpose of the parties must not fraudulent but may constitute
have been frustrated error. (1343)
FRAUD
There is fraud when, through insidious words General Rule on Fraud
or machinations of one of the contracting
parties, the other is induced to enter into a In order that fraud may make a contract
contract which, without them, he would not voidable, it should be serious and should not
have agreed to. (1338) (Dolo Causante) have been employed by both contracting
parties. (1344)
Failure to disclose facts
1. There must be a deliberate intent to
When there is a duty to reveal them, as when deceive or to induce
the parties are bound by confidential 2. The other party relied on this untrue
relations, constitutes fraud. (1339) statement.
3. Incidental fraud only obliges the person
Kinds of Fraud employing it to pay damages. (1344)
1. Dolo Causante (1338) – renders the General Rule: Fraud by a 3rd person does not
contract voidable vitiate consent and merely gives tise to action
2. Dolo Incidente (1344) – holds the guilty for damages.
party liable for damages
Except when:
(see Obligations > Effect of Obligations > 1. There is collusion by one of the parties
Breach of Obligation > Fraud) o fthe contract with the 3rd person.
2. There is misrepresentation that has
Fraud in the performance of an obligation created a substantial mistake and the
(1170) same is mutual.
These are not fraud unless Dolo Causante Simulation is the declaration of a fictitious
or substantial/ principal condition: intent manifested deliberately and by
agreement by the parties in order to produce,
i. Usual exaggerations in trade, when the for the purpose of deceiving others, the
other party had an opportunity to know appearance of a transaction which does not
the facts, are not in themselves exist or which is different from the true
fraudulent. (1340) agreement.
a. Absolute – There is no intention on the It is the “why” of the contract, the essential
part of the contracting parties to be bound reason which impels the parties to enter into
by the contract at all. The contract is the contract.
merely fictitious making it void from
beginning Requisites
b. Relative – There is an intention by the 1. It must Exist at the time of the celebration
parties to be bound but they conceal their of the contract.
true agreement 2. It must be Real (true).
3. It must be Licit or lawful.
*Relative simulated contracts are binding
when: Distiguishing Cause from Motive
i. It does not prejudice 3rd persons
ii. It is not contrary to law, morals, good Cause Motive
customs, public order or public policy. Direct and most Indirect and remote
proximate reason
reason of a
II. OBJECT contract
Objective and Psychological or
The thing, right or service which is the subject juridical reason purely personal
matter of the obligation arising from the reason
contract. Cause is always Motive differs for
same for each each contracting
Requisites (PLDT-Ctc) contracting party party
The legality or The legality or
a) The prestation must be within the illegality of illegality of motive
Commerce of man, either existing or in cause affects the does not affect the
potency existence or existence or validity
b) It must be Licit or not contrary to law, validity of the of the contract.
morals, good customs, public order, or contract
public policy.
c) It must be Possible or real. Causes according to type of contract
d) It must be Determinate as to its kind or
determinable without the need to enter a. In onerous contracts: the cause is
into a new contract. (1349) understood to be, for both parties, the
e) It must be Transmissible. prestation or promise of a thing or service
by the other.
Those which Cannot be the Object of a
Contract (Fruits In Cream – IOI) b. In remuneratory contracts: the cause is
the service or benefit remunerated
1. Future inheritance (1347)
2. Impossible things or services cannot be c. Of Pure beneficence: liberality of donor or
the object of contracts. (1348) benefactor (1350)
3. Contrary to law morals, good customs,
public order, and public policy. d. In accessory contracts: the cause is
4. Indeterminable as to their kind. identical with the cause of the principal
5. Outside the commerce of men contract, that is the loan from which it
6. Intransmissible rights derives lide and existence.
May be interpreted in two ways (Manresa): When Cause Renders Contract Void:
1. Conditional Contract – the thing must 1. Absence of cause/ unlawful cause (1352)
come into existence otherwise the contract 2. False unless to prove another cause
is void. (1353)
2. Aleatory Contract – One of the parties
bears the risk of loss that the thing might Want of Cause – There is a total lack or
not come into existence. absence of consideration.
Illegal Cause – The cause is contrary to
law, morals, good custom, public
order, or public policy.
False Cause – The cause is stated but
that cause is not true.
Unless specified by law, lesion or inadequacy 1. Law requires contract to be in some form
will not invalidate a contract as long as there for validity - donation and acceptance of
has been no fraud, mistake or undue real property
influence. (1355) 2. Law requires contract to be in some form
to be enforceable - Statute of Frauds;
Cause Effect contract is valid but right to enforce
Absence of VOID - produce no legal cannot be exercised; need ratification to
causa effect be enforceable
VOID - produce no legal 3. Law requires contract to be in some form
Illegality of effect for convenience - contract is valid and
causa enforceable, needed only to bind 3rd
Falsity of causa VOIDABLE – party must parties
prove that cause is
untruthful; presumption Ex: public documents needed for the ff:
of validity but rebuttable a. Contracts w/c object is creation,
transmission or reformation of real
Causa not PRESUMED TO EXIST -
rights over immovables
stated in burden of proof is on the
b. Cession, repudiation, renunciation
contract person assailing its
of hereditary rights/CPG
existence
c. Power to administer property for
Inadequacy of DOES NOT INVALIDATE
another
causa CONTRACT PER SE
d. Cession of action of rights
Exceptions:
proceeding from an act appearing
1. when there is fraud,
in a public inst.
mistake or undue
e. All other docs where amount
influence, or
involved is in excess of 500 ( must
2. when the parties
be written even private docs )
intended a donation or
some other contract
When is Form Important
FOR ENFORCEABILITY other power which has for its object an act
(Statute of Frauds) appearing or which should appear in a
(1403, par. 2, in relation to 1405) public document, or should prejudice a
third person;
Those that do not comply with the Statute of 4. Cession of actions from public documents
Frauds as set forth in this number. - The cession of actions or rights
proceeding from an act appearing in a
In the following cases an agreement hereafter public document.
made shall be unenforceable by action,
unless the same, or some note or Private Document
memorandum, thereof, be in writing, and
subscribed by the party charged, or by his 1. All other contracts where the amount
agent; evidence, therefore, of the agreement involved exceeds five hundred pesos must
cannot be received without the writing, or a appear in writing, even a private one. But
secondary evidence of its contents: sales of goods, chattels or things in action
are governed by articles, 1403, No. 2 and
1. An agreement that by its terms is not to 1405. (1358)
be performed within a year from the 2. Donations exceeding five thousand pesos
making thereof; (Art. 748)
2. A special promise to answer for the debt, 3. Giving authority to an agent for the Sale
default, or miscarriage of another; of land. (Art. 1874)
3. An agreement made in consideration of 4. Agreements on payment of interests on
marriage, other than a mutual promise to contracts of loan (art. 1956)
marry; 5. Antichresis (Art. 2134)
4. An agreement for the sale of goods,
chattels or things in action, at a price not Electronic Commerce Act (RA 8792)
less than five hundred pesos, unless the
buyer accept and receive part of such 1. Amends Art. 1403 by including computers
goods and chattels, or the evidences, or and their networks as means against
some of them, of such things in action or frauds and proof of contracts
pay at the time some part of the purchase
money; but when a sale is made by 2. Expressly provides for the application of
auction and entry is made by the the same principles as normal contracts
auctioneer in his sales book, at the time of but adds more presumptions wherein such
the sale, of the amount and kind of should be known by both parties.
property sold, terms of sale, price, names
of the purchasers and person on whose Presumptions from rules of court and
account the sale is made, it is a sufficient doctrines as applied to e-mail, internet,
memorandum; and networks
5. An agreement of the leasing for a longer
period than one year, or for the sale of Receipt of letter – presumed to come to
real property or of an interest therein; knowledge regardless of actual reading
6. A representation as to the credit of a third Regular functions have been carried out
person. regularly
The following must appear in a public In IBM v. Sec. of Labor, the Supreme Court
document: (1358) ruled that Local Area Network or LAN is not
1. Real rights over immovable property, sales sufficient notice for firing an employee since
of real property - Acts and contracts which there was still no law providing for such
have for their object the creation, presumptions. Remember that presumptions
transmission, modification or facilitate transactions and rules of evidence by
extinguishment of real rights over being pragmatic about it. Otherwise, proving
immovable property; sales of real property the propositions as found in the presumptions
or of an interest therein a governed by would be impossible and uncertain. E.g. no
articles 1403, No. 2, and 1405; one can really prove that person A read his e-
2. Hereditary rights and conjugal property of mail, thus it is more practical to presume that
gains -The cession, repudiation or he had done so given proof of his receiving
renunciation of hereditary rights or of such e-mail.
those of the conjugal partnership of gains
3. Power to administer property, other
powers to act, prejudice 3rd persons - The
power to administer property, or any
their real agreement, but concealed that EVIDENT INTENTION PREVAILS OVER
fact from the former, the instrument may LETTER
be reformed.
If the words appear to be contrary to the
4. Ignorance, lack of skill, negligence, or bad evident intention of the parties, the latter
faith of drafter, clerk, typist of instrument shall prevail over the former.
- When through the ignorance, lack of
skill, negligence or bad faith on the part of CONTEMPORANEOUS AND SUBSEQUENT
the person drafting the instrument or of ACTS CONSIDERED
the clerk or typist, the instrument does
not express the true intention of the In order to judge the intention of the
parties, the courts may order that the contracting parties, their contemporaneous
instrument be reformed. and subsequent acts shall be principally
considered.
5. Agreement on pledge or mortgage but
with instrument on sale – If two parties GENERAL TERMS IN ACCORDANCE TO
agree upon the mortgage or pledge of real INTENTION
or personal property, but the instrument
states that the property is sold absolutely However general the terms of a contract may
or with a right of repurchase, reformation be, they shall not be understood to
of the instrument is proper. comprehend things that are distinct and cases
that are different from those upon which the
Prescriptive period: 10 years from the date parties intended to agree.
of the execution of the instrument.
INTERPRET TO EFFECTUATE
When No Reformation Is Allowed (SWV-
E, Sisters With Voices-E) If some stipulation of any contract should
(Arts. 1366-1367) admit of several meanings, it shall be
understood as bearing that import which is
1. Simple donations inter vivos wherein no most adequate to render it effectual.
condition is imposed;
2. Wills; READ AS A WHOLE
3. When the real agreement is Void.
4. Estoppel – When one of the parties has The various stipulations of a contract shall be
brought an action to enforce the interpreted together, attributing to the
instrument, he cannot subsequently ask doubtful ones that sense which may result
for its reformation. from all of them taken jointly. (1374)
1. As to the parties – Mutual restitution All contracts by virtue of which the debtor
together with the fruits and interest. alienates property by gratuitous title are
2. As to 3rd persons presumed to have been entered into in fraud
a. If he acted in bad faith or he was not of creditors, when the donor did not reserve
legally in possession, he is obliged to sufficient property to pay all debts contracted
return. before the donation.
b. If he legally possess the object in good
faith, he is not obliged to return.
Within four (4) years from the date it was General Rule
entered into:
a. If the person is under guardianship, within The party prejudiced has the right to annul a
4 years from the time the guardianship voidable contract.
ceases
b. In case of absentees, within 4 years from Exception
the time domicile is known
If a 3rd person is prejudiced in his rights with *The incapacitated person is not obliged to
respect to one of the contracting parties, and make restitution except insofar as he has
can show detriment which would positively been benefited by the thing or price received
result to him from the contract in which he by him. (1399)
has no intervention. (Teves v. People’s
Homesite and Housing Corp., 23 SCRA *It is presumed in the absence of proof that
1141) no such benefit has accrued to the
incapacitated person. (Manresa)
Causes of Extinction of an Action to Annul Effect of a Failure to make a Restitution
Grounds for Unenforceable Contracts agent, otherwise, the said contract shall be
(1403) unenforceable.
General Rule
Exception
Angeles v. CA
A sale of homestead within five year
prohibitive period is void but in pari delicto
does not apply because of public policy.
However, recovery does not extend to
products or fruits of the land, and the
improvements made by the other party. The
unjust enrichment principle must apply as to
the recovery of the price paid.
Elements
1. Conduct on the part of the defendant,
or of one under whom he claims,
giving rise to the situation of which
complaint is made and for which the
complaint seeks a remedy.
2. Delay in asserting the complainant’s
rights, the complainant having
knowledge or notice, of the defendant’s
conduct and having been afforded the
opportunity to institute a suit
3. Lack of knowledge or notice on the
part of the defendant that the
complainant would assert the right on
which he bases his suit
4. Injury to the defendant in the event
relief is accorded to the complainant
Requisites
1. fraudulent representation or wrongful
concealment of facts known to the party
estopped;
2. intent by party precluded that the other
should act upon the facts as
misrepresented;
3. party misled must have been unaware of
the true facts; and
4. party defrauded must have acted in
accordance with the misrepresentation.
***
Sales
TABLE OF CONTENTS
I. Contract of Sale 169
II. Elements of a Valid Sale 172
III. Transfer of Ownership 175
IV. Risk of Loss 176
V. Document of Title 176
VI. Obligations of Seller and Buyer 178
VII. Remedies of Seller and Buyer 182
VIII. Double Sale 189
IX. Extinguishment of Sale 190
X. Assignment 192
XI. Special Laws 193
SALES (Title VI, Book 4, Arts 1458- normally the full payment of the
purchase price.
1637, Civil Code) o Breach of the condition prevents
the obligation to convey title from
I. CONTRACT OF SALE 1 acquiring obligatory force. (Ang Yu
Asuncion v. CA, 1994)
A contract of sale only constitutes a TITLE or
right to the transfer of ownership, but is NOT In some cases, the SC makes finer
the MODE of transferring ownership. (Aznar v. distinctions between a conditional sale and
Yapdiangco, 1965) a contract to sell in that:
o In a contract to sell- the fulfillment
A. ESSENTIAL REQUISITES: (Art. 1318) of the suspensive condition, which
is the full payment of the purchase
1. Consent- meeting of offer and
price, will not automatically
acceptance on the thing and the price
transfer ownership to the buyer
2. Object- determinate thing
although the property may have
3. Cause
been previously delivered to him;
- for the seller: payment of price
o In a conditional sale- the fulfillment
- for the buyer: transfer of
of the suspensive condition renders
ownership and delivery of thing
the sale absolute and affects the
seller’s title thereto such that if
B. STAGES:
there was previous delivery of the
1. Negotiation - from the time the property, the seller’s ownership or
prospective contracting parties indicate title to the property is
interest in the contract to the time the automatically transferred to the
contract is perfected buyer (see Ursal v. CA, 2005)
c) persons not being of unsound mind, but o BUT sale to guardians, agents,
by reason of age, disease, weak mind, and executors/administrators can be “ratified”
other similar causes, cannot, without by the execution of a new contract,
outside aid, take care of themselves and making the sale valid from the time the
manage their property, becoming thereby new contract is executed, unlike sale to
an easy prey for deceit and exploitation public or judicial officers and employees
(Sec.2, Rule 92,ROC) and lawyers which cannot be so “ratified”
because it is contrary to public policy
o Status of sale: (Rubias v. Batiller, 1973)
- Where 1 party incapacitated:
VOIDABLE (Art.1390(1)) The OFFER must be CERTAIN (Art. 1319) as
- Where both parties incapacitates: to the object and the price (Villanueva v. PNB,
UNENFORCEABLE (Art.1403(3)) 2006).
o BUT when necessaries (those o Offer a.k.a. imperfect promise or
indispensable for sustenance, clothing, policitacion (Litonjua v. L&R Corp.,
dwelling, medical attendance, education, 2000)
transportation) are sold and delivered to o The ff. are not definite offers but mere
incapacitated person, he must pay a invitations to make an offer, unless the
reasonable price therefor. (Art.1489) contrary appears:
1. Business advertisements of things
Relative Incapacity to buy (HW-PAGE-JLO) for sale (Art.1325)
1. Husband/Wife 2. Advertisements for bidders
- What: property of spouse (Art.1326)
- Except: when property regime is
separation of property (marriage The ACCEPTANCE must be ABSOLUTE. (Art.
settlement or judicial order) 1319)
- Prohibition applies to common-law o Qualified acceptance= counter-offer
spouses (Matabuena v. Cervantes,
1971) Consent must not be VITIATED, otherwise
2. Guardian sale is VOIDABLE. (Arts. 1330 &1390(2))
- What: property of ward o Vices of consent:
3. Agent 1. Fraud
- What: property of principal 2. Mistake
- Except: principal consents 3. Violence
4. Executor/Administrator 4. Intimidation
- What: property of estate 5. Undue influence
administered
- Does NOT apply to sale of Payment of EARNEST MONEY is considered as
hereditary right bec. it is not proof of the perfection of sale. (Art. 1482)
administered by the o BUT mere payment of earnest money
executor/administrator (Naval v is not sufficient proof of a perfected
Enriquez, 1904) sale when some essential element
5. Public officers and employees (e.g. agreement on terms of payment)
- What: property of State, GOCC, is admittedly lacking (Velasco v. CA,
institution administered 1973)
- Applies to judges and gov’t. experts
who, in any manner, take part in
the sale EARNEST MONEY v. OPTION MONEY
6. Judicial officers and employees (justices, (Limson v. CA, 2001)
judges, prosecuting attorneys, court given as a distinct
part of purchase
clerks, other officers and employees consideration for an option
price
connected with the administration of contract
justice) given only when
applies to a sale not yet
- What: property or rights in there is already
perfected
litigation or levied upon an a sale
execution before the court within when given, the would-be-
when given, the
their territorial jurisdiction buyer is not required to
buyer is bound
7. Lawyers buy, but may even forfeit it
to pay the
- What: property and rights object depending on the terms of
balance
of any litigation handled by them the option
(Art. 1491)
8. Others specially disqualified by law
- e.g. aliens, wrt private land in the
Philippines (Art.12, sec.7,
Constitution)
o Status of sale: VOID (Art. 1409(7))
o Words like “not negotiable” or “non- Rights under Rights under transfer
negotiable” do not affect negotiability negotiation
1. title to the 1. title to the
When document of title is negotiable: goods of the goods as
o It may be negotiated one who against the
- if bearer, by delivery negotiated and transferor,
- if order, by indorsement of the original subject to any
indorsement of a non-negotiable consignee agreement with
document gives the transferee no (Art.1513(1)) the latter
additional right (Art.1511) 2. direct obligation 2. right to notify
o Goods in the possession of the bailee of the bailee the bailee
cannot be attached or levied under an issuing the issuing the
execution unless the document document to document of the
- be first surrendered or hold possession transfer thereof,
- its negotiation enjoined of the goods for and thereby to
o Bailee cannot be compelled to deliver him according acquire the
up the actual possession of the goods to the terms of direct obligation
until the document is the document as of such bailee to
- surrendered to him or fully as if such hold possession
- impounded by the court (Art.1519) bailee had of the goods for
- contracted him accdg to
IMPLIED WARRANTIES of indorser or directly with the terms of the
transferor (unless a contrary intention him document
appears): (Art.1513(2))
1. Genuineness of document o prior to the
2. Legal right to negotiate or transfer 3. freedom from notification of
3. No knowledge of fact which would the defenses of: the bailee, the
impair the validity or worth of the - breach of title and right of
document duty the transferee
4. Right to transfer the title to the goods - loss may be
and merchantability or fitness for a - theft defeated by
particular purpose, whenever such - accident - levy of
warranties would have been implied - mistake attachment of
had the contract been transfer the - conversion, execution
goods without a document (Art.1516) if the buyer of upon the
o The indorser does NOT warrant the the document goods by the
fulfillment by the bailee issuing the paid value transferor’s
document or previous indorsers of their therefor in good creditor, or
respective obligations (Art.1517) faith and - a notification
without notice to such bailee
(Art.1518) by the
transferor or a
subsequent
buyer of a
subsequent
sale of the
goods by the
transferor
(Art. 1519)
3. If the document
is negotiable,
right to compel
the transferee
to indorse it,
unless a
contrary
intention
appears
o negotiation
takes effect
from actual
indorsement
(Art. 1515)
limited to food, drugs, cosmetics, and to the seller that he has rejected them.
devices (Sec.4(q), RA 749311) (Art.1585)
o Kinds of express warranty: o Rights of the buyer (UNLESS otherwise
1. “Full warranty”- if the written warranty agreed):
meets the minimum standards 1. Not bound to accept delivery of goods
2. “Limited warranty- if the written by installments (Art. 1583)
warranty does not meet the minimum 2. Reasonable opportunity to examine the
standards (Sec.6(c), RA7394) goods upon delivery to ascertain WON
o Minimum standard for warranties that the they are in conformity with the
warrantor shall: contract before accepting the same
1. remedy such consumer product within BUT when the seller delivers the goods
a reasonable time and without charge to a carrier upon the terms that the
in case of a defect, malfunction or same shall not be delivered to the
failure to conform to such written buyer until he has paid the price, the
warranty; buyer has no right to examine the
2. permit the consumer to elect whether goods before payment unless there is
to ask for a refund or replacement an agreement or usage of trade
without charge of such product or part, permitting such examination.
as the case may be, where after (Art.1584)
reasonable number of attempts to 3. Acceptance of the goods shall not
remedy the defect or malfunction, the discharge the seller from liability for
product continues to have the defect or breach of any promise or warranty
to malfunction BUT the buyer must give the seller
BUT the warrantor will not be required notice of the breach of promise or
to perform the above duties if he can warranty within a reasonable time after
show that the defect, malfunction or the buyer knows or ought to know of
failure to conform to a written such breach, otherwise the seller shall
warranty was caused by damage due not be liable therefor. (Art.1586)
to unreasonable use thereof. o The buyer must notify the seller
(Sec.68(d), RA 7394) of the breach of warranty at any
time BEFORE the latter has filed
2. Warranty in sale of SUBDIVISION LOT or the suit for the collection of the
CONDOMINIUM UNIT unpaid price since the purpose
o The owner or developer shall be of the rule requiring notice is to
answerable and liable for the facilities, prevent the buyer from
improvements, infrastructures or other interposing belated claims for
forms of development represented or damages as an offset to a suit
promised in brochures, advertisements begun by the seller for the
and other sales propaganda disseminated purchase price (de Guzman v.
by the owner or developer or his agents Triangle Ace Corp., 2001)
and the same shall form part of the sales 4. Reject delivery of a wrong quantity of
warranties enforceable against said owner goods or of goods of a different
or developer, jointly and severally. description not included in the contract
(Sec.19, PD 95712) which are mixed with the goods sold.
(Art.1522)
B. OBLIGATIONS OF THE BUYER 5. If he refuses to accept the goods,
having the right to do so, he is not
bound to return them to the seller; it
1. Accept delivery of the thing sold
being sufficient that he notifies the
2. Pay the price of the thing sold (Art.1582)
seller of his refusal to accept.
If he voluntarily constitutes himself a
depositary of the goods, he shall be
1. Acceptance liable as such. (Art.1587)
o Modes of accepting goods: (AIR) o Effect of refusal to accept goods without
1. Buyer intimates to the seller that he has just cause: title to the goods passes to the
accepted the goods. buyer from the moment they are placed at
2. Goods delivered to the buyer and he does his disposal, except if ownership has been
any act in relation to them which is reserved by the seller (Art.1588)
inconsistent with the ownership of the
seller. 2. Payment
3. After the lapse of a reasonable time, the o 3 cases where the buyer is liable for
buyer retains the goods without intimating interest for the period between delivery
and payment: (STD)
1. It is stipulated;
11
Consumer Act of the Philippines 2. Thing sold produces fruits or income;
12
The Subdivision and Condominium Buyers’
Protective Decree.
13
Includes both extrajudicial and judicial remedies.
o Costs of proportionate
- eviction suit and reduction of the price
- in a proper case, suit (accion quanti
against seller for the minoris)+damages
warranty Thing Due to o If seller aware of
o Expenses of the contract, lost hidden defect- may demand:
IF the buyer has paid fault - return of price
them - refund of
o Damages and interests, expenses of
and ornamental expenses, contract
IF the sale was made in - damages
BF o If seller not aware of
Partial 1. Enforce liability for defect- may demand
eviction eviction (VICED) OR price and expenses
2. Rescind, IF he would not but not damages
have bought the thing sold Due to Demand:
without the part lost (but fortuitous o Price paid minus
he must return the thing event or value of thing when
without other to fault of it was lost
encumbrances than those buyer o Damages IF the
which it had when he seller acted in BF
acquired it) o Prescriptive period: 6 mos. from delivery
days nor more than one (1) year any time while they are in transit
following the sale of new consumer as if he never parted with the
products. possession
3. Resale
C. PARTICULAR REMEDIES OF THE 4. Rescission –rescind transfer of title
SELLER and resume ownership in the goods
Right of LIEN
NON-ACCEPTANCE OF GOODS
o Available when:
1. Goods sold w/o any stipulation as to
1. Action for damages for nonacceptance,
credit;
where the buyer wrongfully neglects or
2. Goods sold on credit, but the term of
refuses to accept and pay for the goods
credit has expired; or
(Art.1596)
3. Buyer becomes insolvent14
Measure of damages:
o Lost when:
- estimated loss directly and
1. Seller delivers goods to carrier or other
naturally resulting in the ordinary
bailee for transmission to the buyer
course of events from the buyer’s
w/o reserving ownership or right to
breach
possession;
- where there is an available market
2. Buyer or his agent lawfully obtains
for the goods (in the absence of
possession of the goods
special circumstances): difference
3. Seller waives it
between the contract price and the
o NOT lost by reason only that the buyer
market price at the time the goods
has obtained judgment for the price of the
ought to have been accepted or if
goods
no time fixed, at the time of refusal
o In case of part delivery: may exercise
to accept
right of lien as to remainder UNLESS part
- labor performed and expenses
delivery made with intent to waive the lien
made by the seller before receiving
o NOT affected by any sale or other
notice of the buyer’s repudiation or
disposition of goods which the buyer may
countermand
have made UNLESS the seller has
- profit the seller would have made if
consented thereto
sale had been fully performed
BUT if negotiable doc of title has
2. Rescission by giving notice of election to
been issued, right of a holder in
rescind to the buyer (Arts.1597&1593)
due course NOT defeated, whether
the negotiation be prior or
NONPAYMENT
subsequent to the notification of
the carrier or other bailee of the
In sale of movables:
seller’s claim to a lien.
1. Self-help remedies of unpaid seller
of goods
Right of STOPPAGE IN TRANSITU
2. Action for the price of goods
o Available when the buyer of the goods is
3. Alternative remedies under the
or becomes insolvent
Recto Law (Arts. 1484 & 1485)
o Goods are in transit:
1. From the time they are delivered to a
Self-help remedies of an unpaid seller of
carrier or other bailee for transmission
goods (Arts.1525-1535)
to the buyer until buyer or his agent
o “unpaid seller” when:
takes delivery;
1. the whole of the price has not
2. If buyer rejects the goods and the
been paid or tendered
carrier or bailee continues in
2. a bill of exchange or other
possession, even if the seller has
negotiable instrument received as
refused to receive them back
conditional payment has been
o Goods no longer in transit if:
dishonored
1. Buyer or his agent obtains delivery of
seller includes:
the goods before their arrival at the
- seller’s agent to whom the BOE has
appointed destination;
been endorsed
2. After the arrival of the goods at the
- a consignor or agent who has
appointed destination, carrier or bailee
himself paid, or is directly
acknowledges to the buyer or his
responsible for the price
- any other person who is in the
position of a seller 14
Insolvency under Title on Sales refers to
o Self-help remedies: insolvency in fact- when a person has ceased to
1. Lien- right to retain the goods pay his debts in the ordinary course of business or
while he is in possession of them cannot pay his debts as they become due, WON
insolvency proceedings have been commenced
2. Stoppage in transitu- right to
(Art.1636(2))
resume possession of the goods at
agent that he holds the goods on his 2. The seller may recover damages from
behalf and continues in possession of the original buyer for any loss
them as bailee for the buyer or his occasioned by the breach of the
agent (immaterial if buyer indicates contract of sale.
further destination for the goods; 3. The buyer in the resale acquires a good
3. The carrier or baileewrongfully refuses title as against the original buyer.
to deliver the goods to the buyer or his
agent Right to RESCIND
o Exercised by: o Available to unpaid seller who:
1. Obtaining actual possession of the 1. has a right of lien; OR
goods; OR 2. has stopped the goods in transitu
2. Notifying carrier or bailee of his claim o Available when:
If carrier or bailee has issued a 1. Seller expressly reserved the right to
negotiable document of title, it rescind in case the buyer defaults; or
must first be surrendered for 2. Buyer defaults in payment for an
cancellation before the goods are unreasonable time.
redelivered to the seller o Rescission made by manifesting an
o In case of part delivery: may exercise intention to rescind by:
right of stoppage in transitu as to 1. notice to the buyer; OR
remainder UNLESS circumstances of part 2. some other overt act which
delivery show an agreement with the need not be communicated to
buyer to give up possession of the whole the buyer
of the goods. o BUT giving or failure to give notice of
o NOT affected by any sale or other intention to rescind is relevant in
disposition of goods which the buyer may determining WON the buyer had been in
have made UNLESS the seller has default for an unreasonable time before
consented thereto the rescission.
BUT if negotiable doc of title has been
issued, right of a holder in due course Action for the price of goods
NOT defeated, whether the negotiation o Available when:
be prior or subsequent to the 1. Ownership has passed to buyer and
notification of the carrier or other buyer wrongfully neglects or refuses to
bailee of the seller’s claim to a right of pay;
stoppage in transitu 2. Price payable on a certain day
irrespective of delivery and buyer
Right of RESALE wrongfully neglects or refuses to pay;
o Available to unpaid seller who: or
1. has a right of lien; OR 3. Buyer notifies seller of his repudiation
2. has stopped the goods in transitu of the contract after the seller has
o Available when: completed the manufacture of the
1. Goods are of a perishable nature; goods or had procured the goods to be
2. Seller expressly reserves the right of delivered, and the goods cannot
resale in case the buyer defaults; or readily be resold for a reasonable
3. Buyer defaults in payment for an price. (Art.1595)
unreasonable time
o For the resale to be valid, the seller need Under the Recto Law (Arts.1484 & 1485)
NOT notify the original buyer of: o Applies in cases of:
1. the intention to resell 1. sale of movables in installment
2. the time and place of the resale 2. lease of personal property
o BUT giving or failure to give notice of - with option to buy
intention to resell is relevant in - when the lessor has deprived the
determining WON the buyer had been in lessee of the possession or
default for an unreasonable time before enjoyment of the thing
the resale was made. When the seller assigns his credit to
o The seller must exercise reasonable care another person, the assignee is
and judgment in making a resale likewise bound by the same law.
o The resale may be by public or private (Borbon II v. Servicewide Specialists,
sale. Inc., 1996)
o The seller CANNOT buy the goods, directly Stipulation that the installments or
or indirectly. rents paid shall not be returned to the
o Effects of resale: buyer or lessee VALID insofar as the
1. The seller is NOT liable anymore to the same may not be unconscionable (Art.
original buyer: 1486)
- upon the contract of sale; OR
- for any profit made by the resale
16
QUOTABLE QUOTE: SC always says, “It cannot
15
Financing Company Act of 1998 have its cake and eat it too.”
17 18
Realty Installment Buyer Act Agricultural Land Reform Code
Requirements for a valid rescission if bought the real property, there was still no
buyer has paid less than 2 yrs of sale to a second vendee.(Consolidated
installments: (Sec.4) Rural Bank (Cagayan Valley), Inc. v. CA,
1. Grace period of at least 60 days 2005)
2. Notice of cancellation or demand o Art. 1544 does NOT apply to the sale of
for rescission by notarial act, unregistered land at an execution sale
effective 30 days from the buyer’s because a buyer of unregistered land at a
receipt thereof execution sale only steps into the shoes of
Down payments, deposits or options on the judgment debtor, and merely acquires
the contract shall be included in the the latter's interest in the property sold as
computation of the total number of of the time the property was levied upon.
installment payments made. (Sec.3) (Carumba v. CA, 1970)
The seller can go to court to demand
judicial rescission in lieu of a notarial B. RULES OF PRIORITY UNDER ART.1544
act of rescission. (Olympia Housing,
Inc. v. Panasiatic Travel Corp, 2003) IN CASE OF MOVABLES:
- Possession in good faith
The requirement of a notarial act of
rescission is dispensed with when the IN CASE OF IMMOVABLES:
seller files an action for annulment of 1. Registration in good faith
contract, which is a kindred concept of 2. If no prescription, possession in good
rescission (Layug v. IAC, 1988); but faith
NOT when he files 3. If no registration or possession, oldest
- an action for reconveyance (Ramos title acquired in good faith.
v. Heruela, 2005; Olympia Housing,
Inc. v. Panasiatic Travel Corp., o Good faith- lack of knowledge of any
2003); OR defect in the title over the property sold
- an action for unlawful detainer (Vda de Melencion v. CA, 2007)
(Pagtalunan v. Vda. De Manzano,
2007) o Knowledge gained by the first buyer of the
Automatic cancellation clause is void second sale cannot defeat the first buyer’s
under Section 7 of R.A. 6552 (Fabrigas rights except where the second buyer
v. San Francisco Del Monte, Inc., registers in good faith the second sale
2005) ahead of the first, as provided by the Civil
Code. Such knowledge of the first buyer
VIII. DOUBLE SALE does not bar her from availing of her
(Art.1544) rights under the law, among them, to
register first her purchase as against the
A. REQUISITES: (Cheng v. Genato, 1998) second buyer. But in converso, knowledge
1. 2 or more valid sales; gained by the second buyer of the first
2. same subject matter; sale defeats his rights even if he is first to
3. 2 or more buyers with conflicting register the second sale, since such
interests at odds over the rightful knowledge taints his prior registration with
ownership of the thing sold; bad faith. (Uraca v. CA, 1997)
4. same seller
O No double sale when one of the two o Registration- any entry made in the books
contracts is a mere contract to sell. (San of the registry, including both registration
Lorenzo Development Corp. v. CA, 2005; in its ordinary and strict sense and
Coronel v. CA, 1996) cancellation, annotation, and even
O No double sale where there is only one marginal notes. (Cheng v. Genato, 1998)
valid sale, the other sale being forged.
(Fudot v. Cattleya Land, Inc., 2007) o If the land is registered under the Land
O No double sale when the two different Registration Act (and therefore has a
contracts of sale are made by two Torrens Title), and it is sold and the sale
different persons, one of them not being is registered not under the Land
the owner of the property sold.(Salera v. Registration Act but under Act 3344, as
Rodaje, 2007) amended, such sale is not considered
O When not all requisites for the application registered under Art. 1544 of the Civil
of Art. 1544 are present, the principle of Code; neither does such registration
prior tempore, potior jure (“he who is first operate as constructive notice to the
in time is preferred in right”) should apply. second buyer.(Vda de Melencion v. CA,
The only essential requisite of this rule is 2007)
priority in time; in other words, the only
one who can invoke this is the first o Possession includes not only
vendee. Undisputedly, he is a purchaser material(actual) possession, but also
in good faith because at the time he symbolic possession, which is acquired by
1. If inheritance sold w/o enumerating PURPOSE OF THE LAW: to regulate the sale of
the things composing it, seller only subdivision lots and condominiums and
warrants his character as an heir impose penalties on fraudulent practices and
2. If certain rights, rents, or products sold manipulations committed in connection
for lump sum, seller warrants only the therewith (Whereas clause)
legitimacy of the whole in general and
not each part composing it, EXCEPT in SCOPE OF APPLICATION: “Sale” of subdivision
case of eviction from the whole or the lot (inc. the building or other improvements)
part of greater value or condominium unit, which includes:
- a contract to sell,
- a contract of purchase and sale,
XI. SOME SPECIAL LAWS - an exchange,
- an attempt to sell,
- an option of sale or purchase,
A. RA 6552
- a solicitation of a sale, or
- an offer to sell, directly or by an agent, or by
TITLE: Realty Installment Buyer Act
a circular, letter, advertisement or otherwise.
PURPOSE OF THE LAW: to protect buyers of
REGULATION BY THE NATIONAL HOUSING
real estate on installment payments against
AUTHORITY
onerous and oppressive conditions (Sec.2)
1. Approval of plan for subdivision or
condominium project and registration of
SCOPE OF APPLICATION: (Sec.3)
approved plan. (Sec.4)
o Applies to: sale or financing of real estate
2. License to sell (subdivision lots or
on installment payments, including
condominium units) and performance
residential condominium apartments
bond, except in the ff. cases:
o Does NOT apply to:
a. Sale of a subdivision lot resulting from
1. industrial lots;
the partition of land among co-owners
2. commercial buildings; and
and co-heirs.
3. sales to tenants under the Agrarian
b. Sale or transfer of a subdivision lot by
Land Reform Code
the original buyer thereof and any
subsequent sale of the same lot.
RIGHTS/BENEFITS GRANTED TO BUYERS
c. Sale of a subdivision lot or a
1. Additional requirements for rescission in
condominium unit by or for the
case of default in payment:19
account of a mortgagee
a. grace period
- in the ordinary course of business
b. notice of cancellation or
- when necessary to liquidate a bona
demand for rescission by
fide debt. (Secs.4-7)
notarial act
4. Power to suspend license to sell (Sec.8)
c. payment of CSV, if at least 2
5. Power to revoke registration certificate
yrs of installments paid
and license to sell after notice and hearing
(Secs.3&4)
(Sec.9)
2. During the grace period and before actual
6. Registers of subdivision lots and
cancellation of the contract:
condominium units where all NHA orders
a. right to assign by a notarial act
affecting the condition or status thereof
his rights to another person, or
shall be entered (Sec.10)
b. right to reinstate the contract
7. Registration of dealers, brokers, and
by updating the account.
salesmen (Sec.11)
(Sec.5)
8. Revocation of registration of dealers,
3. Right to pay in advance
brokers, and salesmen after notice and
- any installment or the full unpaid
hearing (sec12)
balance of the purchase price
9. Prior written approval for any mortgage on
- any time
the unit or lot to be made by the owner or
- without interest
developer (sec.18)
and to have such full payment of the
10. Permission for alteration of approved
purchase price annotated in the certificate
subdivision plan (Sec.22)
of title covering the property. (Sec.6)
11. Visitorial powers (Sec34)
o Any contrary stipulation NULL & VOID.
12. Take-over development at the expenses of
(Sec.7)
the owner or developer, jointly and
severally, in cases where the owner or
B. PD 957 developer has refused or failed to develop
or complete the development of the
TITLE: The Subdivision and Condominium project as provided for in this Decree.
Buyers’ Protective Decree o NHA may, after such take-over,
demand, collect and receive from the
buyers the installment payments due
19
Discussed in detail under rescission.
on the lots, which shall be utilized for o In the event a mortgage over the lot or
the development of the subdivision. unit is outstanding at the time of the
(Sec.35) issuance of the title to the buyer, the
owner or developer shall redeem the
RIGHTS/BENEFITS GRANTED TO BUYERS mortgage or the corresponding portion
thereof within six months from such
1. If the owner or developer mortgaged the issuance. (Sec.25)
lot or unit to secure a loan: 7. Payment of real estate tax and
- buyer must be notified before the assessment on a lot or unit by the owner
release of the loan or developer without recourse to the buyer
- buyer may, at his option, pay his for as long as the title has not passed the
installment for the lot or unit directly buyer
to the mortgagee who shall apply the o BUT if the buyer has actually taken
payments to the corresponding possession of and occupied the lot or
mortgage indebtedness secured by the unit, he shall be liable to the owner or
particular lot or unit being paid for, developer for such tax and assessment
with a view to enabling said buyer to effective the year following such taking
obtain title over the lot or unit of possession and occupancy. (Sec.26)
promptly after full payment thereto 8. Freedom from any collection of charges by
(Sec.18) the owner or developer for an alleged
2. Warranties enforceable community benefit.
- against the owner or developer, jointly o Fees to finance services for common
and severally, comfort, security and sanitation may
- for the facilities, improvements, be collected only by a properly
infrastructures or other forms of organized homeowners association and
development represented or promised only with the consent of a majority of
in brochures, advertisements and the lot or unit buyers actually residing
other sales propaganda disseminated in the subdivision or condominium
by the owner or developer or his project. (Sec.27)
agents (Sec.19) 9. Right of way to public road must be
o The owner or developer must complete secured by the owner or developer of a
the construction within 1 year from the subdivision without access to any existing
date of the issuance of the license for public road or street (Sec.29)
the subdivision or condominium 10. Organization of Homeowners Association
project or such other period of time as to be initiated by the owner or developer
may be fixed by the NHA (Sec.20) for the purpose of promoting and
3. Consent by the homeowners association or protecting the mutual interest of the
majority of the lot buyers required for any buyers and assisting in their community
alteration of the approved subdivision plan development. (Sec.30)
(Sec.22)
4. Non-forfeiture of installment payments o Any waiver of compliance with any
when the buyer, provision of PD957 VOID (Sec.33)
- after due notice to the owner or
developer, o Sanctions in case of violation:
- desists from further payment 1. Administrative fine: up to P10K
- due to the failure of the owner or 2. Criminal liability: fine up to P20K
developer to develop the subdivision or and/or imprisonment up to 10 yrs.
condominium project according to the
approved plans and within the time
limit for complying with the same. C. ACT NO. 3952
o Such buyer may, at his option, be
reimbursed the total amount paid TITLE: The Bulk Sales Law
including amortization interests but
excluding delinquency interests, with PURPOSE OF THE LAW: To protect persons
interest thereon at the legal rate. who extended credit to merchants, relying on
(Sec.23) the fact that their stock of merchandise was
5. Rights under RA 6552 if the buyer defaults not to be sold in bulk, but kept up and
in payment for reasons other than the replenished from time to time. Credit was
failure of the owner or developer to extended, presupposing continuance in the
develop the project (Sec.24) business of merchandising (Baviera, citing US
6. Issuance of title upon full payment of the case)
lot or unit
o No fee, except those required for the SCOPE OF APPLICATION
registration of the deed of sale in the o Applies to: a “sale and transfer in bulk”,
Registry of Deeds, shall be collected which includes any sale, transfer,
for the issuance of such title. mortgage or assignment of:
Inventory
o Contents:
1. quantity
2. cost price of each article, so far as
possible
o When made: at least 10 days before sale
or mortgage
Agency
TABLE OF CONTENTS
Section 1. Nature, Form, and Kinds of Agency 197
Section 2. Obligations of the Agent 202
Section 3. Liabilities of the Agent 204
Section 4. Obligations of the Principal 205
Section 5. Extinguishment of Agency 206
Need not have Must be in Art. 1897 presents 2 instances when an agent
possession of the possession of the becomes personally liable to a third person:
goods of the goods of the when he expressly binds himself to the
principal. principal. obligation, and when he exceeds his authority.
In the last instance, the agent can be held
liable if he does not give the third party
sufficient notice of his powers. In case of
excess of authority, the law doesn’t say that a of attorney as written, even if the agent in
third person can recover from both the fact exceeded the limits of authority based on
principal and the agent. (Eurotech Industrial an understanding between him and the
Technologies Inc. v. Cuizon, 2007) principal (Art. 1900, CC).
the day the advance was made, even if the It would be in the height of injustice to permit
business wasn’t successful (Art. 1912, CC). the principal to terminate the contract to the
broker’s prejudice when he had already
Exceptions to the obligation of advancement/ reaped the benefits of the broker’s efforts.
reimbursement: (Lim v. Saban)
a. If the agent acted in contravention
of the principal's instructions, unless In case of double agency:
principal derives benefits. a. If both principals have knowledge of
b. When the expenses were due to the the double employment, the agent can
fault of the agent. recover from both of the principals.
c. When the agent incurred them b. If both principals have no knowledge of
knowing that an unfavorable result the double employment, the agent
would ensure, if the principal was can’t recover from either.
unaware thereof. c. If the 2nd employer has knowledge of
d. When it was stipulated that the the 1st employment, both he and the
expenses would be borne by the agent, agent are guilty, and an executory
or that the latter would be allowed only contract entered into in fraud of the
a certain sum. (Art. 1918, CC) 1st employer is unenforceable.
Agent’s right to retain object of agency in Brokers: One who negotiates contracts
pledge: if the principal fails to reimburse the relative to property in behalf of others and for
agent (Art. 1914, CC). But agent isn’t a fee.
entitled to the excess in case the thing was
sold to satisfy his claim, and the proceeds are Since a brokerage relationship is essentially a
more than his claim (Arts. 2115, 2121, CC). contract of agency, principles of contract law
Also he must possess the thing lawfully in his apply. Since the principals of the broker are
capacity as agent (2 C.J. 457). generally undisclosed, the broker is personally
liable. Hence, petitioner had to advance the
When principals solidarily liable for the payments for respondent’s trades. Brokers
agency’s consequences: have a right to be reimbursed for sums
a. There are 2/more principals; advanced by them. (Abacus Securities Corp.
b. They all concurred in the v. Ampil, 2006)
appointment of the same agent;
and If a broker isn’t efficient in procuring cause in
c. The agent is appointed for a bringing about the sale, he isn’t entitled to
common compensation. (Prats v. CA)
transaction/undertaking. (Art.
1915, CC)
EXTINGUISHMENT OF AGENCY
3. To indemnify the agent for
damages
Quick glance: Ways to extinguish agency
Obligation to indemnify agent: for damages
which the execution of the agency has caused Mode Way of
the agent, so long as the agent isn’t at fault extinguishing
(Art. 1913, CC). This is based on fairness. 1. By the parties’ a. Principal’s
subsequent acts revocation
Note: Arts. 1914-1915 are applicable here.
Gen. rule: principal may revoke the The principal has a duty to give actual
agency at will (Art. 1920,CC). notice of the revocation of the agency to
Except (BIW): 1. the revocation is done third parties. [La Compania General de
in bad faith (Danon v. Brimo); Tobacos v Diaba, 1911]
2. the agency is coupled with an
interest, such as when – As to the agent: Express notice is always
a. a bilateral contract depends necessary. Revocation without notice to
on it; the agent will not render invalid an act
b. it’s the means of fulfilling an done in pursuance of the authority.
obligation already contracted;
c. a partner is appointed As to 3rd persons: Express notice is
manager of a partnership and necessary. Insofar as 3rd parties acting
is removed unjustifiably. (Art. in good faith and without knowledge of
1927, CC) revocation, acts of the agent are deemed
3. the principal waived his right valid.
to revoke (New Manila Lumber As to former customers: Actual
Co. v. Rep.) notice must be given to them
because they always assume the
Agency coupled with an interest can’t be continuance of the agency
terminated by the sole will of the relationship.
principal since third persons are As to other persons: Notice by
involved, though it’s revocable after the publication is enough.
interest ceases. The interest of the agent
must be in the subject matter of the Revocation by appointment of a new
power conferred, and not merely in the agent: effective when notice is given to
exercise of the power as it entitles him the former agent (Art. 1923, CC). The
to compensation. (Del Rosario v. Abad) 2 agencies must be incompatible. This is
an implied revocation.
An agency coupled with interest may be
revoked when the agent acts to defraud Revocation by direct management by
the principal. The irrevocability of the principal: when the principal deals
power of attorney may not be used to directly with 3rd persons (Art. 1924,
shield the perpetration of acts in bad CC). This is an implied revocation.
Revocation if with 2/more principals: one 2. wrt acts done by the agent who didn’t
of the principals may revoke the power know of the principal’s death (Art.
of attorney without the others’ consent 1931, CC)
(Art. 1925, CC). 3. wrt business already begun when the
principal died, if delay would cause
Partial revocation of gen. power: a gen. danger (Art. 1884, CC).
power is revoked by a special one wrt
the special matter involved in the latter An act done by the agent after the
(Art. 1926, CC). principal’s death is valid and effective
only if the agent and the 3rd person knew
b. By the agent’s withdrawal. of the death. The knowledge of the 2
must concur; otherwise the agent’s act
The agent may withdraw at will, subject void and unenforceable. (Rallos v. Go
to the contractual obligations to the Chan & Sons)
principal (fixed period of agency,
purposes not accomplished). Agent’s death: his heirs are obligated to
notify the principal and to adopt such
Right to withdraw: based on the measures as the circumstances may
prohibition against involuntary servitude demand for the principal’s interest (Art.
(Art. III, Sec. 18, 1987 1932, CC). But they cannot continue
Constitution). the agency.
1. without just cause: agent with duty Exceptions:
to give due notice to the principal a. agency by operation of law
and to indemnify the latter, should b. agency coupled with an interest in the
he suffer damages due to the subject matter of the agency
withdrawal (Art. 1928, CC)
2. with just cause: if due to
impossibility of continuing with the b. By the dissolution of the
agency without grave detriment to firm/corporation.
himself (Art. 1928, CC), or due to
a fortuitous event (Art. 1174, 3. By agreement.
CC), the agent can’t be held liable.
a. By the accomplishment of the
Obligation to continue to act: agent must agency’s object/purpose.
continue to act until the principal has
had reasonable opportunity to take the b. By the expiration of the period of
necessary steps to remedy the situation the agency.
caused by the withdrawal (1929, CC).
Partnership
TABLE OF CONTENTS
Section 1. Nature; Creation of a Partnership 211
Section 2. Classification of Partnerships and Partners 212
Section 3. Obligations of Partners 214
Section 4. Obligations of Partnerships 217
Section 5. Rights of Partners 218
Section 6. Rights of Partnerships 220
Section 7. Dissolution and Winding Up 220
Section 8. Settlement of Accounts Between Partners 223
Section 9. Limited Partnership 223
Section 10. Limited Partner 225
General Rule: No special form is required May exercise any Can exercise such
(Art. 1771, CC) power authorized powers expressly
Exceptions: by the partners as granted by law or
1. Where immovable property or real rights long as it is not incident to its
are contributed (Art. 1771, CC) – written in contrary to law, existence
a public instrument with a signed inventory of etc.
the contributions. (Art. 1773, CC) If no agreement as Power to do
2. Where the capital is at least P3,000, in to mgt. - every business is vested
money or property – need a public partner is an agent in the board of
instrument, which must be recorded in the of the partnership directors/ trustees
SEC. (Art. 1772, CC) But a partnership has a
A partner as such Suit against the
juridical personality even if requirement is not
may sue a co- board/director who
complied with.
partner who mismanages must
mismanages be brought in the
Rules to determine the existence of a
corp.’s name
partnership (Art. 1769, CC)
a. General – liable pro rata (Art. 1816, unless expressly permitted (Art.
CC) or solidarily (Arts. 1822-1824, 1789, CC)
CC) 8. As to liability
b. Limited (Art. 1843, CC) a. General/Real – liability extend to
separate property (Art. 1776, CC)
Types, Universal Partnership: b. Limited/Special – only to extent of
contribution (Art. 1843, CC)
All present All profits c. Capitalist-Industrial
property 9. As to management
All present property Property owned by a. Managing – manages the firm’s affairs
actually owned by the partners when b. Silent – doesn’t participate in
partners are the partnership was management
contributed formed continue to c. Liquidating – winds up the affairs after
become common pertain to them dissolution
property of the only the usufruct 10. Other special classifications
partnership & the becomes common a. Subpartner – related only to the
partners. property regular partner (Art. 1804, CC)
Only profits from the All profits acquired b. Retiring – withdraws/retires from the
property contributed through partners’ partnership
become common industry/work
property; other become common Industrialist Capitalist
profits may, by property. Partner Partner
stipulation, be
Contribution Contributes Contributes
considered as his industry money or
common property. property
Prohibition Cannot Can’t engage
Who are prohibited from entering into
to engage in engage in any in the same or
universal partnerships: those prohibited from other business for similar
giving donations (Art. 1782, CC), such as: business himself enterprise
a. legally married, common law spouses (Art.
Profits Receives a Shares in
87, FC)
just and profits
b. parties guilty of adultery/concubinage equitable according to
c. criminals convicted for the same offense in share agreement
consideration of the same thereon; if
d. a person & a public officer (or his wife, none, pro rata
descendants, ascendants) by reason of his to his
office (Art. 739, CC) contribution
Losses Exempted as 1. stipulation
Kinds of Partners to losses as as to losses
between
1. As to membership partners but 2. if none, the
a. Real – a contributing member it is liable to agreement as
b. By estoppel/Quasi-partner – not really a 3rd persons to profits
without
partner but represents himself as one
prejudice to 3. if none, pro
2. As to continuation of business affairs after reimburseme
dissolution rata to
nt from the contribution
a. Continuing capitalist
b. Discontinuing partners
3. As to value of contribution
a. Majority
b. Nominal Partnership and Partner by Estoppel
4. As to nature of membership
a. Original Partner by estoppel: the representation of
b. Incoming being a partner is done by 1 person only
5. As to state of survivorship Partnership by estoppel: the representation
a. Surviving – continues to be a partner involves several persons pretending to be a
after dissolution due to death of a firm
partner
b. Deceased Requisites of “Partner By Estoppel”:
6. As to effect of expulsion 1. The person –
a. Expelled (Art. 1840[6], CC) a. represents himself as a partner of an
b. Expelling existing partnership when he isn’t, or
7. As to nature of contribution b. consents to another representing him to
a. Capitalist – contribute money or anyone as a partner in an existing
property partnership, or
b. Industrial – contribute industry/labor.
He can’t engage in business for himself
c. consents to another representing him to facto and the general provisions of the Civil
anyone as a partner with 1/more persons not Code applicable to all partnerships apply to it.
actual partners.
2. Third person relied on the Corporation by estoppel: all persons are liable
misrepresentation, unaware of the deception. as general partners (Sec. 21, Corp. Code). A
3. On the faith of the misrepresentation, the de facto partnership is created.
3rd person gave credit to the actual/apparent
partnership.
4. The alleged partner can’t disallow liability OBLIGATIONS OF PARTNERS
by claiming he isn’t actually a partner. He is
bound as a “partner” though he actually isn’t.
(Art. 1825, CC) A. Contribute
his failure to contribute or from time of though the receipt he issued covered only his
conversion (Art. 1788, CC) share (Art. 1793, CC).
b. payment of 12% interest as interest on
forbearance of money (Martinez v. Cf. 1792: in 1793 there’s only 1 debt where
Ong Pang Co) the partnership is the creditor.
To contribute additional capital in case of Risk of loss of things contributed (Art. 1795,
imminent loss, requisites: CC): owner bears the loss
a. There is an imminent loss of the business
b. The majority of the capitalist partners are Specific & determinate Risk is borne by
of the opinion that an additional contribution things, not fungible partner
to the common fund would save the business where only usufruct is
c. Capitalist partner refuses deliberately to contributed
contribute an additional share Specific & determinate Risk is borne by
d. There is no agreement to the contrary things, with ownership partnership
transferred to
If refused to contribute: the partner must sell partnership
his interest in the partnership to the other Fungible things Risk is borne by
partners (Art. 1791, CC) (consumable) partnership
Things contributed to Risk is borne by
Industrial partner is exempt from sanction.
be sold partnership
won’t be exempted insofar as his capital is only be partially satisfied, which is contrary to
concerned (Paras). the law’s purpose (Liwanag v. Workmen’s
Compensation Comm.)
The dismissal of the complaint to favor 1 of
the general partners doesn’t increase the
remaining partners’ liability. (Island Sales v. OBLIGATIONS OF PARTNERSHIPS
United Pioneers).
A. Bear risk of loss
Liability of a newly-admitted partner:
1. obligations contracted before his admission:
liable only up to his share in the partnership Partnership bears the risk: when what is
property unless there’s a contrary contributed is a fungible thing, thing which
stipulation (Art. 1826, CC). can’t be kept without deteriorating, if the
2. obligations contracted after admission: thing was contributed to be sold, and
liable as an ordinary original partner. contributions are appraised in the inventory
(Art. 1795, CC)
Liability of outgoing partner:
1. when he gives notice of his retirement or B. Reimburse
withdrawal, he’s freed from liability on
contracts entered into thereafter but still 3 obligations of the partnership:
liable on existing incomplete contracts 1. refund disbursements with legal interest
2. he’s liable for goods sold & delivered 2. answer for obligations contracted in good
after his retirement/withdrawal if the sale faith in the partnership’s interest
was pursuant to a contract made before such 3. answer for risks (Art. 1796, CC)
retirement/withdrawal
Partner = agent. Being a mere agent, he isn’t
H. Solidarily liable with partnership personally liable as long as he’s not at fault
(Art. 1912, CC) and acted within the scope
Solidary liability of partnership & partners: for of his authority. But unlike an ordinary agent,
everything chargeable to the partnership the paying partner doesn’t have the right of
under Arts. 1822-1823 (Art. 1824, CC). retention if he isn’t paid.
This is an exception to Art. 1816 as it
involves torts. C. Operate under firm name
New partner’s liability: satisfied out of a. secure by bond or pay the value of the
partnership property only, unless with a guilty partner’s partnership interest (less the
contrary stipulation value of damages he caused), and
b. to indemnify him against all partnership’s
Not only the retiring partners but also the new liabilities, present & future.
partnership itself which continued the
business of the dissolved one, are liable for 4. Rights where dissolution not in
the debts of the prior partnership. A contravention of agreement
withdrawing partner remains liable to a 3rd
party creditor of the old partnership Rights of each partner against his co-
(Singsong vs. Isabela Sawmill). partners:
a. to have the partnership property applied to
Rights of partners upon dissolution discharge partnership liabilities
b. the surplus assets, if any, distributed in
1. Right to wind up (Art. 1836, CC) cash to the respective partners, after
deducting what may be due to the firm from
Kinds of winding up: judicial & extrajudicial them as partners (Art. 1837, CC)
The rules for distribution won’t apply if there’s Limited partners: not bound by the
a contrary agreement between the partners. partnership’s obligations (Art. 1843, CC).
right to If manner No
Who may be limited partners:
participate of mgt. not participation in
management
1. A partnership – no
in agreed
managemen upon, all 2. A gen. partnership may be changed
t gen into a limited one, & a partner in the former
partners gen. partnership may be a limited partner in
have an the limited partnership formed.
equal right
in business When the cert. of partnership may be
mgt amended:
contribution Cash, Cash or 1. Change in partnership name or in the
property or property only, amount/character of contribution of any
industry not industry limited partner
proper party Proper Not proper 2. Substitution of a limited partner
to party to party to 3. Additional limited partner is admitted
proceedings proceeding proceedings 4. A gen. partner is admitted
by or s by/against 5. Gen. partner retires, dies, becomes
against the by/against partnership insolvent or insane, or under civil
partnership partnership unless:
interdiction & the business is continued
1. he is also a 6. A change in the character of business
gen. partner
7. A false/erroneous statement in the cert.
2. where the
8. A change in the time as stated in the cert.
object of the
for the dissolution of the partnership or
proceedings is
to enforce a return of a contribution
limited 9. To fix the time for dissolution or return of
partner's right a contribution
against or 10. The members want to change a
liability to the statement in the cert. to make it more
partnership accurate (Art. 1864, CC)
Name in Name may Name must
firm name appear in appear in firm Requirements to amend:
firm name name 1. Must be in writing, under oath, & set forth
prohibition Prohibited No prohibition clearly the change desired
to engage in 2. Signed & sworn to by all the members,
other including the new members & assigning
business members
effect of Dissolves Different 3. The cert., as amended, must be filed in
retirement the effect; rights the SEC (Art. 1865, CC)
death partnership transferred to
insanity or legal rep. When the certificate shall be cancelled:
1. To the partnership (Art. 1858, CC) e. Fraud on creditors (Art. 1854, CC)
Effect: he will be considered an industrial & Common rights of limited & gen. partners:
general partner. If the certificate states that 1. Demand that partnership books be kept at
he’s a limited partner, he will be a general the principal place of business
partner & limited partner at the same time.
2. Inspect & copy any of the books, content Dissolution, upon petition of limited partner:
3. Demand true & full info of all things 1. When his demand for return of contribution
affecting the partnership wasn’t acted upon/denied
4. Demand a formal account 2. His contribution wasn’t returned/paid
5. Resort to the court for the dissolution and
winding up of the business In case of several limited partners: members
6. Receive a share of the profits & surplus may agree to give priority to 1/more limited
7. Demand the return of his contribution partners, and this must be stated in the
provided assets are more than the liabilities certificate of partnership. The preference
(Art. 1851, CC) covers –
1. return of contributions,
Restrictions on gen. partners: gen. partners 2. compensation, and
can’t, without the written consent or written 3. other matters where some benefit is
ratification of all limited partners, do the ff: granted (Art. 1855, CC).
1. Any act in contravention of the certificate
2. Any act which would make it impossible to Share of profits (Art. 1856, CC)
carry on the partnership business
3. Confess judgment Partner’s share: when the assets exceed
4. Possess partnership property, or assign liabilities (except those to limited & general
their rights in specific partnership property for partners), a limited partner may recover a
other than a partnership purpose share in the profits/compensation by way of
5. Admit a person as a gen. partner income stipulated in the certificate.
6. Admit a person as a limited partner, unless
the right is granted in the certificate Assign interests (Art. 1859, CC)
7. Continue the business with partnership
property on the death, retirement, insanity, Substituted limited partner: a person admitted
civil interdiction or insolvency of a gen. to all the rights of a limited partner who has
partner, unless the power is granted in the died or assigned his interest in a partnership
certificate (Art. 1850, CC)
Rule: limited partner’s interest is assignable.
Loan & other business transactions The assignee may become a substituted
limited partner if –
Allowed to loan money, transact business: the 1. all the members consent, or
relationship between the limited partner & 2. the assignor is empowered in the
partnership isn’t based on trust & confidence. articles of partnership, and he gave the
There is no conflict of interests. assignee the right to be a substituted limited
partner.
Sharing pro rata: he’s entitled to a pro rata It is still required that the certificate be
share of the partnership assets together with amended (Art. 1865, CC) and registered
the creditors. (Art. 1854, CC) with the SEC.
Effect of death (Art. 1861, CC) dissolution isn’t effected until there has been
compliance with this requirement.
Rights of executors/administrators:
1. All the rights of a limited partner for the Settling accounts after dissolution
purpose of settling the estate
2. If the deceased had assigned his interest in Order of priority in the payment of liabilities
the partnership, the executor or (Art. 1863, CC):
administrator may constitute the assignee a 1. Those owed to creditors, in the order of
substituted limited partner if the deceased was priority provided by law (Arts. 2236-
empowered to do so 2251, CC), except those to limited
partners on account of their contribution &
Estate’s liability: for all the deceased’s to general partners
obligations & liabilities to the partnership as a 2. Those to limited partners in respect to their
limited partner share of the profits and other compensation
by way of income in their contributions
Person erroneously believing he’s a limited 3. Those to limited partners in respect of their
partner (Art. 1852, CC) capital contributions
4. Those to general partners other than for
Effect: he doesn’t, by reason of his exercise of capital and profits
the rights of a limited partner, become a gen. 5. Those to general partners in respect to
partner. Neither is he bound by the profits
obligations of the person/partnership. He’s 6. Those to general partners in respect to
exempt from general liability. capital
Conditions for exemption: Winding up: general partners have the duty &
1. on ascertaining the mistake, he promptly power to wind up the partnership’s affairs
renounces his interest in the profits of the
business If there’s no agreement, the limited partners
2. his surname doesn’t appear in the shall share in the partnership assets and
partnership name profits in proportion to the respective amounts
3. he doesn’t participate in the management of their claims (Art. 1863, CC).
of the business
Dissolution
Credit Transactions
TABLE OF CONTENTS
Section 1. Credit Transactions 229
Section 2. Loan 229
Section 3. Deposit 233
Section 4. Guaranty 240
Section 5. Legal and Judicial Bonds 246
Section 6. Pledge, Mortgage, Antichresis 248
Section 7. Concurrence and Preference of Credit 255
Section 7. Special Laws 256
Section 9. Warehouse Receipts Law 256
Section 10. Insolvency Law 261
Section 11. Sample Questions 268
General rule: Bailee has no right of retention Article 765 is applicable, because like a
of the thing loaned, on the ground that the donation, a commodatum is essentially
bailor owes him something. gratuitous. (Art 1933, par 2)
Except: Bailee has a right of retention
for damages for known hidden flaws
mentioned in Art 1951. (Art 1944) 2. obligation to refund extraordinary
expenses (Art 1949):
What are the requisites for the application a. extraordinary expenses for the
of Art 1951? preservation of the thing are
1. There is a flaw or defect in the thing borne by the bailor.
loaned
2. The flaw or defect is hidden
Bailor has no right of abandonment: He 1. Simple interest – which is paid for the
cannot exempt himself from payment of principal at a certain rate fixed or
expenses to bailee by abandoning the thing to stipulated by the parties
the latter. (Art 1952) 2. Compound Interest – that which is
imposed interest due and unpaid. The
MUTUUM OR SIMPLE LOAN accrued interest is added to the principal
sum and the whole is treated as a new
A mutuum or simple loan is a contract by principal upon which the interest for the
which a person (creditor) delivers to another next period is calculated
(debtor) money or other consumable thing 3. Legal Interest – that which the law
with the understanding that the same amount directs to be charged in the absence of
of the same kind and quality shall be paid. any agreement as to the rate between
(Art 1953) the parties.
4. Lawful Interest – that which the laws
Elements of a mutuum: allow or do not prohibit
1. delivery of a money or other 5. Unlawful or Usurious Interest – paid or
consumable thing stipulated to be paid beyond the
2. obligation on the part of debtor to pay maximum fixed by law
(not exactly to return)
General Rule: If the exact rate of interest is
When is a contract deemed a barter? (Art not mentioned, the legal rate shall be imposed
1954)
1. transfer of ownership of non-fungible Except:
thing to another
2. obligation on the part of the latter to a. the debtor is liable to pay legal
give things of the same kind, quantity, interest (12%) as indemnity even in
and quality the absence of stipulation for the
payment of interest
What is a fungible thing? b. interest due shall earn legal interest
Fungibles are those which are dealt from the time it is judicially
with by number, weight, or measure, demanded although the obligation
such as grain, oil, sugar, etc. may be silent upon this point
Whether a thing is consumable or not
depends on the nature and whether it General Rule: Accrued interest shall not earn
is fungible or not depends on the interest
intention of the parties.
e.g. Wine is consumable by nature, but Except:
it may be non-fungible if the intention
is merely for display or exhibition. a. when judicially demanded as
provided in art 2122.
b. when there is an express stipulation
made by the parties that the interest
due and unpaid shall be added to the
DEPOSIT
2. Deposit v. Commodatum
DEPOSIT is constituted from the moment a Safekeepin Transfer of
Purpose
person receives a thing belonging to another, g the Use
with the obligation of safely keeping it and of May be Essentially
Remuneratio
returning the same. If the safekeeping of the gratuitous & always
n
thing delivered is not the principal purpose of gratuitous
the contract, there is no deposit but some In Both
other contract. (Art. 1962) extrajudicia movable &
Object
l deposit, immovable
only property
20
THE ROMAN CATHOLIC BISHOP OF JARO v. DE LA PEÑA:
“Although the CC states that "a person obliged to give something Requisites:
is also bound to preserve it with the diligence pertaining to a good a) The depositary must notify the
father of a family" (art. 1094), it also provides, following the
principle of the Roman law, major casus est, cui humana infirmitas depositor of such change and
resistere non potest, that "no one shall be liable for events which b) Must wait for the reply of the
could not be foreseen, or which having been foreseen were depositor to such change.
inevitable, with the exception of the cases expressly mentioned in
the law or those in which the obligation so declares."” (Thus, in
this case, the defendant cannot be held liable for the loss of the Exception: If the delay of the
money he deposited in his personal trust fund because such was reply would cause danger.
not illegal and the Court cannot say “that in choosing between two
means equally legal, he is culpably negligent in selecting one
whereas he would not have been if he had selected the other”).
Extent of liability:
3. Effect of death of depositor or a) Liability in hotel rooms which come
depositary. (Art. 1995) under the term “baggage” or
articles such as clothing as are
a) Deposit gratuitous – death of ordinarily used by travelers
either of the depositor or b) Include those lost or damages in
depositary extinguishes the hotel annexes such as vehicles in
deposit (personal in nature). By the hotel’s garage.
the word “extinguished,” the law
really means that the depositary In the following cases, the hotel-
is not obliged to continue with keeper is liable REGARDLESS of the
the contract of deposit. amount of care exercised:
24
DIÑO v. CA: “Under the Civil Code, a guaranty may be given to
23
SEVERINO v SEVERINO: “A guarantor or surety is bound by secure even future debts, the amount of which may not known at
the same consideration that makes the contract effective between the time the guaranty is executed. This is the basis for contracts
the principal parties thereto.” denominated as continuing guaranty or suretyship.
Reason: The selection of the guarantor principal debtor would not result
is: in the satisfaction of the
a. Term of the agreement; obligation – if such judicial
b. As a party, the creditor is, action including execution would
therefore, bound thereby. not satisfy the obligation, the
2. Guarantor selected by the principal guarantor can no longer require
debtor: Debtor answers for the the creditor to resort to all such
integrity, capacity, and solvency of the remedies against the debtor as
guarantor. the same would be but a
3. Guarantor personally designated by the useless formality. It is not
creditor: Responsibility of the selection necessary that the debtor be
should fall upon the creditor because judicially declared insolvent.
he considered the guarantor to have
the qualifications for the purpose. 2. If he does not comply with Art. 2060:
In order that the guarantor may make
EFFECTS OF GUARANTY BETWEEN THE use of the benefit of excussion, he
GUARANTOR AND THE CREDITOR must:
1. The guarantor has the right to benefit a. Set it up against the creditor
from excussion/ exhaustion25 upon the latter’s demand for
payment from him;
Exceptions to the benefit of excussion (2059) b. Point out to the creditor:
i. Available property of the
1. As provided in Art. 2059: debtor – the guarantor
should facilitate the
a. If the guarantor has expressly realization of the
renounced it ;waiver is valid but excussion since he is the
it must be made in express most interested in its
terms. benefit.
b. If he has bound himself ii. Within the Philippine
solidarily with the debtor, the territory – excussion of
liability assumed is that of a property located abroad
surety. The guarantor becomes would be a lengthy and
primarily liable as a solidary co- extremely difficult
debtor. In effect, he renounces proceeding and would
in the contract itself the benefit not conform with the
of exhaustion26. purpose of the guaranty
c. In case of insolvency of the to provide the creditor
debtor – guarantor guarantees with the means of
the solvency of the debtor. If obtaining the fulfillment
the debtor becomes insolvent, of the obligation.
the liability of the guarantor as iii. Sufficient to cover the
the debtor cannot fulfill his amount of the debt.
obligation
d. When he (debtor) has 3. If he is a judicial bondsman and sub-
absconded, or cannot be sued surety (2084)
within the Philippines – the
creditor is not required to go 4. Where a pledge or mortgage has been
after a debtor who is hiding or given by him as a special security.
cannot be sued in our courts,
and to incur the delays and 5. If he fails to interpose it as a defense
expenses incident thereto. The before judgment is rendered against
exception is when the debtor him.
has left a manager or
representative; 2. The creditor has the right to secure a
e. If it may be presumed that an judgment against the guarantor prior to
execution on the property of the the excussion
General rule:
25
SOUTHERN MOTORS, INC. v BARBOSA: “The right of An ordinary personal guarantor (NOT a
guarantors…to demand exhaustion of the property of the principal
debtor, exists only when a pledge or a mortgage has not been
pledgor or mortgagor), may demand
given as special security for the payment of the principal exhaustion of all the property of the debtor
obligation.” before he can be compelled to pay.
26
LUZON STEEL CORP. v SIA: “The surety in the present case
bound itself "jointly and severally" (in solidum) with the defendant;
and excussion (previous exhaustion of the property of the debtor)
Exception:
shall not take place "if he (the guarantor) has bound himself
solidarily with the debtor".”
The creditor may, prior thereto, secure a 1. A compromise between creditor and
judgment against the guarantor, who shall be principal debtor benefits the guarantor
entitled, however, to a deferment of the but does not prejudice him.
execution of said judgment against him, until 2. A compromise between guarantor and
after the properties of the principal debtor the creditor benefits but does not
shall have been exhausted, to satisfy the prejudice the principal debtor.
latter’s obligation.
8. Co-guarantors are entitled to the
3. The creditor has the duty to make prior benefit of division (2065)
demand for payment from the guarantor
(2060) The benefit of division applies only when there
are several guarantors and one debtor for a
1. The demand is to be made only after single debt. Except when solidarity has been
judgment on the debt stipulated among the co-guarantors, a co-
2. Joining the guarantor in the suit guarantor is liable only to the extent of his
against the principal debtor is not the share in the obligation as divided among all
demand intended by law. Actual the co-guarantors.
demand has to be made.
EFFECTS OF GUARANTY BETWEEN THE
4. The guarantor has the duty to set up DEBTOR AND THE GUARANTOR
the benefit of excussion (2060)
the obligation before the period on which the obligation. For purposes of
debtor’s liability will accrue. Any payment proportionate reimbursement, the
made by the guarantor before the obligation is other guarantors may interpose such
due cannot be indemnified by the debtor. defenses against the paying guarantor
as are available to the debtor against
Exception: the creditor, except those that are
Prior consent or subsequent ratification by the personal to the debtor.
debtor
EXTINGUISHMENT OF GUARANTY
4. The guarantor may proceed against
the debtor even before payment has been 1. Once the obligation of the debtor is
made extinguished in any manner provided in the
Civil Code, the obligation of the guarantor is
General rule: also extinguished. However, there may be
Guarantor has no cause of action against the instances when, after the extinguishment of
debtor until after the former has paid the the guarantor’s obligation (as in the case of a
obligation. release from the guaranty), the obligation of
the debtor still subsists.
Exceptions:
2. Although the guarantor generally has to
1. When he is sued for the payment; make payment in money, any other thing of
2. In case of insolvency of the principal value, if accepted by the creditor, is valid
debtor; payment and therefore releases the
3. When the debtor has bound himself to guarantor.
relieve him from the guaranty within a
specified period, and this period has 3. If one guarantor is released, the release
expired; would benefit the co-guarantors to the extent
4. When the debt has become of the proportionate share of the guarantor
demandable, by reason of the released.
expiration of the period for payment;
5. After the lapse of 10 years, when the 4. A guarantor is also released if the creditor,
principal obligation has no fixed period without the guarantor’s consent, extends the
for its maturity, unless it be of such time within which the debtor may perform his
nature that it cannot be extinguished obligation. This is to protect the interest of the
except within a period longer than 10 guarantor should the debtor be insolvent
years; during the period of extension and deprive the
6. If there are reasonable grounds to fear guarantor of his right to reimbursement.
that the principal debtor intends to
abscond; 5. If through the fault of the creditor the
7. If the principal debtor is in imminent guarantors are precluded from being
danger of becoming insolvent. subrogated to the former’s rights, the latter
are released from the obligation.
Rationale
To enable the guarantor to take measures for
the protection of his interest in view of the LEGAL AND JUDICIAL BONDS
probability that he would be called upon to
pay the debt. As such, he may, in the
alternative, obtain release from the guaranty; Bond – an undertaking that is sufficiently
or demand security that shall protect him secured, and not cash or currency.
from any proceedings by the creditor; and Bondsman – a surety offered in virtue of a
against the insolvency of the debtor. provision of law or a judicial order.
EEFECTS OF GUARANTY AS BETWEEN CO- Qualifications of personal bondsman:
GUARANTORS 1. He possesses integrity;
2. He has capacity to bind himself;
Requisites for the applicability of Art. 2073: 3. He has sufficient property to
answer for the obligation which he
1. Payment has already been made by guarantees.
one guarantor;
2. The payment was made because
a. Of the insolvency of the debtor, PLEDGE OR MORTGAGE IN LIEU OF BOND
or Guaranty or suretyship is a personal security.
b. By judicial demand
3. The paying guarantor seeks to be Pledge or mortgage is a property or real
indemnified only to the extent of his security.
proportionate share in the total
pledge mortgage
ESSENTIAL REQUISITES COMMON TO Constituted on Constituted on
PLEDGE AND MORTGAGE movables. immovables.
Property is Delivery not
1) Constituted to secure the fulfillment of a delivered to the necessary.
principal obligation27. pledgee, or by
2) Pledgor or mortgagor must be the common consent to
absolute owner of the thing pledged or a 3rd person.
mortgaged. Not valid against 3rd Not valid against 3rd
3) The persons constituting the pledge or persons unless a persons if not
mortgage have the free disposal of their description of the registered.
property, and in the absence thereof, that thing pledged and
they be legally authorized for the purpose. the date of the
4) Cannot exist without a valid obligation. pledge appear in a
5) Debtor retains the ownership of the thing public instrument.
given as a security.
6) When the principal obligation becomes
due, the thing pledged or mortgaged may PROHIBITION AGAINST PACTUM
be alienated for the payment to the COMMISSORIUM
creditor.
1. Stipulation is null and void: Stipulation
where thing or mortgaged shall
IMPORTANT POINTS automatically become the property of
the creditor in the event of
1) Future property cannot be pledged or
nonpayment of the debt within the
mortgaged.
term fixed.
2) Pledge or mortgage executed by one who 2. Requisites of pactum commissorium28:
is not the owner of the property pledged a) Pledge or mortgage.
or mortgaged is without legal existence b) A stipulation for an automatic
and registration cannot validate it. appropriation by the creditor of the
property in the event of
3) Mortgage of a conjugal property by one of
nonpayment.
the spouses is valid only as to ½ of the
3. Effect on security contract: Nullity of
entire property.
the stipulation does not affect validity
4) In case of property covered by Torrens and efficacy of the principal contract.
title, a mortgagee has the right to rely
upon what appears in the certificate of title
and does not have to inquire further. IMPORTANT POINTS
5) Pledgor or mortgagor has free disposal of
1) Debtor-owner bears the risk of loss of the
property.
property.
6) Thing pledged or mortgaged may be 2) Pledge or mortgage is indivisible.
alienated. Exceptions:
a) Where each of several things
7) Creditor not required to sue to enforce his
guarantees a determinate portion of
credit.
the credit.
8) Pledgor or mortgagor may be a third b) Where only a portion of loan was
person. released.
c) Where there was failure of
consideration.
RIGHT OF CREDITOR WHERE DEBTOR FAILS
3) Rule that real property, consisting of
TO COMPLY WITH HIS OBLIGATION
several lots should be sold separately,
applies to sales in execution, and not to
1) Creditor is merely entitled to move for the
foreclosure of mortgages.
sale of the thing pledged or mortgaged
4) The mere embodiment of a real estate
with the formalities required by law in
mortgage and a chattel mortgage in one
order to collect.
28
UY TONG v CA: The 2 elements for pactum commissorium to
exist: (1) that there should be a pledge or mortgage wherein a
27
property is pledged or mortgaged by way of security for the
MANILA SURETY V VELAYO: The accessory character is of payment of the principal obligation; and (2) that there should be a
the essence of pledge and mortgage. As stated in Art 2085 CC, an stipulation for an automatic appropriation by the creditor of the
essential requisite of these contracts is that they be constituted to thing pledged or mortgaged in the event of non-payment of the
secure the fulfillment of a principal obligation principal obligation within the stipulated period.
2) if the price is more than amount due, the shows the intention of the parties to make
debtor is not entitled to the excess unless the property as a security for a debt.
the contrary is provided. - Provisions governing equitable
3) If the price of the sale is less, neither is mortgage: Arts. 1365, 1450, 1454,
the creditor entitled to recover the 1602, 1603, 1604 and 1607.
deficiency. A contrary stipulation is void.
ESSENTIAL REQUISITES
LEGAL PLEDGES
1) Constituted to secure the fulfillment of a
1) Necessary expenses shall be refunded to principal obligation34.
every possessor, but only a possessor in 2) Mortgagor must be the absolute owner of
good faith may retain the thing until he the thing mortgaged.
has been reimbursed. 3) The persons constituting the mortgage
- Useful expenses shall be refunded only have free disposal of the property; in the
to the possessor in good faith with the absence thereof, they should be legally
same right of retention, the person authorized for the purpose.
who has defeated him in the 4) Cannot exist without a valid obligation.
possession having the option of 5) When the principal obligation becomes
refunding the amount of the expenses due, the thing in which the mortgage
or of paying the increase in value consists may be alienated for payment to
which the thing may have acquired the creditor.
and by reason thereof (Art. 546) 6) Must appear in a public document duly
2) He who has executed work upon a recorded in the Registry of Property, to be
movable has a right to retain it by way of validly constituted.
pledge until he is paid. (Art. 1731) - In a legal mortgage, the persons in
3) The agent may retain the things which are whose favor the law establishes a
the objects of agency until the principal mortgage have the right to demand
effects the reimbursement and pays the the execution and recording of a
indemnity. (Art. 1914) document formalizing the mortgage.
4) The laborer’s wages shall be a lien on the
goods manufactured or the work done. EFFECTS
(Art. 1707)
1) Creates real rights, a lien inseparable from
MORTGAGE is a contract whereby the debtor
the property mortgaged, enforceable
secures to the creditor the fulfillment of a
against the whole world.
principal obligation, specially subjecting to
2) Creates merely an encumbrance.
such security immovable property or real
rights over immovable property in case the
principal obligation is not complied with at the
LAWS GOVERNING MORTGAGE
time stipulated33.
KINDS
1) As a general rule, the mortgagor retains
possession of the property. He may deliver
1) Voluntary said property to the mortgagee without
2) Legal altering the nature of the contract of
3) Equitable – One which, although lacking mortgage.
the proper formalities of a mortgage, 2) It is not an essential requisite that the
principal of the credit bears interest, or
33
DAYRIT v CA: Well-entrenched in law is the rule that a
mortgage directly and immediately subjects the property upon
which it is imposed, the same being indivisible even though the
34
debt may be divided, and such indivisibility likewise being MOJICA v CA: Mortgages given to secure future
unaffected by the fact that 'the debtors are not solidarity liable. advancements are valid and legal contracts; that the amounts
"When several things are pledged or mortgaged, each thing for a named as consideration in said contract do not limit the amount for
determinate portion of the debt, the pledges or mortgage, are which the mortgage may stand as security if from the 4 corners of
considered separate from each other. But when the several things the instrument the intent to secure future and other indebtedness
are given to secure the same debt in its entirety, all of them are can be gathered. A mortgage given to secure advancements is a
liable for the debt, and the creditor does not have to divide his continuing security and is not discharged by repayment of the
action by distributing the debt among the various things pledged or amount named in the mortgage, until the full amount of the
mortgaged. Even when only a part of the debt remains unpaid, all advancements are paid (as established earlier in Lim Julian v.
the things are still liable for such balance." (Tolentino) Lutero).
that the interest as compensation for the motion, shall order the property to
use of the principal and the enjoyment of be sold to the highest bidder at a
its fruits be in the form of a certain public auction.
percentage thereof. Upon confirmation of the sale by the
court, also upon motion, it shall
INCIDENTS OF REGISTRATION OF operate to divest the rights of all
MORTGAGE parties to the action and to vest
their rights to the purchaser
1) Mortgagee is entitled to registration of subject to such rights of
mortgage as a matter of right. redemption as may be allowed by
2) Proceedings for registration do not law.
determine validity of the mortgage or its Before the confirmation, the court
effect35. retains control of the proceedings
3) Registration is without prejudice to better The proceeds of the sale shall be
rights of third parties. applied to the payment of the:
4) Mortgage deed, once duly registered, - Costs of the sale;
forms part of the records for the - Amount due the mortgagee;
registration of the mortgaged property. - Claims of junior encumbrancers
5) Mortgage by a surviving spouse of his/her or persons holding subsequent
undivided share in the conjugal property mortgages in the order of their
can be registered. priority; and
- Balance, if any shall be paid to
the mortgagor.
EFFECT OF INVALIDITY OF MORTGAGE Sheriff’s certificate is executed,
ON THE PRINCIPAL OBLIGATION acknowledged and recorded to
complete the foreclosure.
Antichresis Pledge
REDEMPTION Refers to real Refers to personal
property property
1) It is a transaction by which the mortgagor Perfected by mere Perfected by
reacquires the property which may have consent delivery of the thing
passed under the mortgage or divests the pledged
property of the lien which the mortgage Consensual contract Real contract
may have created36.
2) Kinds:
Antichresis Real Mortgage
a) Equity of redemption: Right of the Property is Debtor usually
mortgagor to redeem the mortgaged delivered to creditor retains possession
property after his default in the of the property
performance of the conditions of the Creditor acquires Creditor does not
mortgage but before the sale of the only the right to have any right to
mortgaged property or confirmation of receive the fruits of receive the fruits,
sale the property, hence, but the mortgage
b) Right of redemption: Right of the it does not produce creates a real right
mortgagor to redeem the property a real right over the property
The creditor, unless The creditor has no
there is stipulation such obligation
to the contrary, is
36
MEDIDA v CA: The rule up to now is that the right of a obliged to pay the
purchaser at a foreclosure sale is merely inchoate until after the taxes and charges
period of redemption has expired without the right being upon the estate
exercised. The title to land sold under mortgage foreclosure
remains, in the mortgagor or his grantee until the expiration of the It is expressly There is no such
redemption period and conveyance by the master's deed.
and has bound himself to assume all - Applies only to non-negotiable warehouse
obligations connected therewith. receipts:
8. Warehouseman’s ownership of or interest - A non-negotiable receipt must contain
in the goods: To prevent abuses in the the word “non-negotiable”.
past when warehouseman issued receipt - Effect: Failure to do so will make a
on their goods. holder who (1) purchased for value AND
9. Statement of advances made and liabilities (2) supposing it to be negotiable, may at
incurred (if present): To preserve the lien his option treat it as negotiable.
of the warehouseman over the goods he CONSTRUCTION OF WAREHOUSE RECEIPTS:
stores or the proceeds thereof in his hands
- Effect of omission of any of the essential Liberal construction of the law in favor of bona
terms: fide holders. This has no application to
a. validity and negotiability of receipt is actions against any party other than a
not affected. warehouseman.
b. warehouseman will be liable for
damages. OBLIGATION AND RIGHTS OF A
c. the contract will be converted to an WAREHOUSEMAN UPON THEIR RECEIPTS
ordinary deposit.
- Any other terms or conditions may be Principal obligations of a warehouseman
inserted, except:
1. To take care of the goods, and be liable for
a. Those contrary to this Act (e.g.
failure to exercise care; but he is not liable
exemption from liability for misdelivery
for loss or injury which could not have
in Sec. 10, not giving statutory notice
been avoided, unless there is a stipulation
in case of sale of goods in Sec. 33 and
to the contrary.
34).
2. To deliver the goods to the holder of the
b. Exemption from liability and
receipt or the depositor upon demand,
negligence.
accompanied with:
c. Those contrary to law, morals, good
a. An offer to satisfy the warehouseman’s
customs, public order or public policy.
lien: Because a warehouseman may
refuse delivery until his lien is satisfied
DEFINITIONS
b. An offer to surrender the receipt: For
1) Negotiable receipt: Receipt in which it is the protection of the warehouseman
stated that the goods received will be and to avoid criminal liability; this is
delivered to the bearer or to the order of subject to waiver.
any person named in such receipt. c. A offer to sign when the goods are
- A provision in a negotiable receipt that it delivered, an acknowledgment that
is non-negotiable is void. they have been delivered.
2) Non-negotiable receipt: Receipt in which it - But warehouseman may still refuse
is stated that the goods received will be delivery on the grounds of some lawful
delivered to the depositor or to any other excuse:
specified person. a. Sec. 10
- A negotiable warehouse receipt is not a 1. he has been requested by the
negotiable instrument in the same sense person lawfully entitled to the
as in the NIL. goods not to make delivery;
2. he has information that the
DUPLICATE RECEIPTS delivery about to be made was
to one not lawfully entitled to
- Applies only to negotiable warehouse the goods;
receipts: b. Sec. 16: He has acquired title to
- Whenever more than one negotiable the goods which was derived from
receipt is issued for the same goods, 1. transfer made by the
the word ‘DUPLICATE” shall be placed depositor at the time of the
on the face of the receipt except the deposit for storage or
one first issued. subsequent thereto
- Effect: The warehouseman shall be 2. the warehouseman’s lien
liable for damages for failing to do this c. Sec. 18: If there are several
to any one who purchased the claimants to the goods
subsequent receipt (1) for value, and d. Sec. 21: If the goods were lost and
(2) supposing it to be an original, he had no fault
even though the purchase be after e. Sec. 36: He has already lawfully
delivery of the goods by the sold the goods
warehouseman to the holder of the
original receipt. Persons to whom the goods must be delivered
owner. But a bona fide holder acquires no - General rule: A warehouseman may not
right to the goods under a negotiable receipt mingle goods belonging to different
which has been stolen or lost or which the depositors.
indorsement has been forged. - Exception: In case of fungible goods of the
same kind and grade provided:
a. he is authorized by agreement
WITH REGARD TO OWNERSHIP b. he is authorized by custom
- Effects:
a. Ownership is not a defense for refusal to a. each depositor shall own the entire
deliver mass in common and entitled to his
- The warehouseman cannot refuse to portion
deliver the goods on the ground that he b. warehouseman is severally liable to
has acquired title or right to the each depositor for the care and
possession of it unless such is derived: redelivery of their portion as if the
1. directly or indirectly from a transfer goods had been kept separate
made by the depositor at the time
of the deposit for storage or ATTACHMENT OR LEVY ON NEGOTIABLE
subsequent thereto; RECEIPTS
2. from the warehouseman’s lien
b. Adverse title of a 3rd person is not a A warehouseman has the obligation to
defense for refusal to deliver by a hold the goods for the owner or for the
warehouseman to his bailor on demand, person to whom the negotiable receipt has
except: been duly negotiated. Therefore, the
1. To persons to whom the goods goods cannot be attached or levied upon
must be livered (Sec. 9) under an execution, unless:
2. To the person who wins in the a. the document be first surrendered; or
interpleader case (Sec. 17) b. the negotiation is enjoined, or
3. To the person he finds to be c. the document is impounded by the
entitled to the possession after court
investigation (Sec. 18) The warehouseman cannot be compelled
4. To the buyer in case there was a to deliver the goods until:
valid sale of the goods (Sec. 36) a. the receipt is surrendered to him;
b. it is impounded by the court
DUTY OF WAREHOUSEMAN WHEN THERE ARE - This provision does not apply if the person
SEVERAL CLAIMANTS depositing is not the owner of the goods or
one who has not the right to convey title to
- The warehouseman may either: the goods binding upon the owner.
a. Investigate and determine within a
reasonable time the validity of the
claims, and deliver to the person whom REMEDY OF CREDITOR WHOSE DEBTOR
he finds is entitled to the possession of OWNS A NEGOTIABLE RECEIPT
the goods
- Effect: He is not excused from Attachment of the negotiable receipt, not on
liability in case he makes a mistake the goods.
b. He may bring a complaint in - The goods themselves cannot readily be
interpleader attached or levied upon by ordinary legal
- Effect: process
a) he will be relieved from liability in
delivering the goods to the person EXTENT OF WAREHOUSEMAN’S LIEN
whom the court finds to have
better right; a. lawful charges for
b) he is liable for refusal to deliver to 1. storage, and
the rightful claimant when it is 2. preservation of the goods
required to have an interpleader; b. lawful claims for
c. He may not do (a) and (b) 1. money advanced
- Effect: He will be liable after a lapse 2. labor
of a reasonable time, of conversion as 3. interest
of the date of the original demand for 4. weighing
the goods. 5. insurance
- This does NOT apply to cases where the 6. cooperating
warehouseman himself makes a claim to the 7. transportation
goods. c. other charges and expenses in relation to
such goods
COMMINGLING OF DEPOSITED GOODS d. reasonable charges and expenses for
notice and advertisements of sale
e. sale of the goods where defaults has been property and recovery of any deficiency in
made in satisfying the lien case it exists after the sale of the
property;
EXTENT OF THE LIEN WHEN A NEGOTIABLE 4. By causing the extrajudicial sale of the
RECEIPT HAS BEEN ISSUED property and applying the proceeds to the
value of the lien
a. charges for storage and preservation of
the goods Process:
b. other charges expressly enumerated A. Written notice to the person on whose
(from b, c, d and e above) although the account the goods are held or to persons
amount is NOT stated who claim an interest in the goods
- For claims not specified, the warehouseman containing:
shares pro rata with the other creditors of the a. itemized statement of warehouseman’s
depositor the balance of the proceeds of the lien showing the sum due and when it
sale for the satisfaction of the claims. became due
b. brief description of the goods
GOODS SUBJECT TO LIEN c. a demand that a claim be paid on or
before a day mentioned, not less than
10 days from:
a. goods of the depositor who is liable to the
1. delivery of notice if personally
warehouseman as debtor wherever such
delivered
goods are deposited;
2. time when notice should reach
b. goods of other persons stored by the
its destination if sent by mail
depositor who is liable to the
d. statement that if the claim is not paid,
warehouseman as debtor with authority to
the goods will be advertised for sale
make a valid pledge
and then sold at a specified time and
- A warehouseman has NO lien on goods
place
belonging to another and stored by a stranger
B. After the time for payment of the claim if
in fraud of the true owner’s right.
the notice has elapsed, the sale will be
- The lien may be lost through:
advertised stating:
a. voluntarily surrendering possession of
a. a description of the goods to be sold
goods - constitutes a waiver or
b. the name of the owner or person on
abandonment
whose account the goods were held
- A warehouseman may NOT claim
c. time and place of the sale
a lien on other goods of the same
C. Publication:
depositor for unpaid charges on the
a. if there is a newspaper published in
goods surrendered if the goods
the place of sale: once a week for 2
were delivered to him under
consecutive weeks and the sale not
different receipts.
held less than 15 days from the time of
b. wrongfully refusing to deliver the
the 1st publication
goods to a person who holds the
b. if there is no newspaper: posted at
receipt or the depositor upon DEMAND
least 10 days before the sale in not
accompanied with:
less than 6 conspicuous places in the
1. an offer to satisfy the
place of sale
warehouseman’s lien (because
D. Sale itself in:
a warehouseman may refuse
a. place where the lien was acquired
delivery until his lien is
b. if such place is manifestly unsuitable
satisfied)
for the purpose, at the nearest
2. an offer to surrender the receipt
suitable place
a. for the protection of the
E. From the proceeds of the sale:
warehouseman and to avoid
a. the warehouseman shall satisfy his
criminal liability
lien
b. this is subject to waiver
b. including the reasonable charges of
3. an offer to sign when the goods
notice, advertisement and sale
are delivered, an
c. the balance shall be held by the
acknowledgment that they have
warehouseman and delivered on demand
been delivered
to the person to whom he should deliver it
F. Any time before the goods are sold, any
REMEDIES FOR A WAREHOUSEMAN
person may pay the warehouseman for his
lien and the other expenses. The
1. Even if without lien, all remedies allowed by warehouseman shall deliver the goods to
law to a creditor against his debtor for that person if he is entitled under this Act,
collection of charges; to the possession of the goods on payment
2. By refusing to deliver the goods until his of the charges. Otherwise, the
lien is satisfied; warehouseman shall retain ownership of the
3. All remedies allowed by law for the goods.
enforcement of a lien against personal
CREDITORS NOT ENTITLED TO VOTE IN THE After his election, the assignee is
ELECTION OF ASSIGNEE required to give a bond for the faithful
1. Those who did not file their claims at performance of his duties.
least two days prior to the time
appointed for such election Purpose:
2. Those whose claims are barred by the
statute of limitations 1. To establish his official character
3. Secured creditors unless they 2. To establish his right to sue in that
surrender their security or lien to the capacity
sheriff or receiver or unless they shall The bond is solely for the benefit of the
first have the value of such security creditors of the insolvent, and that third
fixed persons have no remedy against the sureties
4. Holders of claims for unliquidated if the assignee, purporting to be as such,
damages arising out of pure tort. wrongfully takes property from such third
persons and converts it to his own use.
EFFECTS OF ASSIGNMENT38
1. Assignee takes the property in the
PROPERTIES OF INSOLVENT THAT PASS TO
plight and conditions that the insolvent
THE ASSIGNEE
held it.
2. Upon appointment, the legal title to
all the property of the insolvent is 1. All real and personal property,
vested in the assignee, and the estate, and effects of the debtor,
including all deeds, books, and papers
in relation thereto;
2. Properties fraudulently conveyed;
38
SERVICEWIDE v. CA: Assignment of Credit/Consent: As 3. Right of action for damages to real
provided in Article 2096 in relation to Article 2141 of the Civil property
Code, a thing pledged may be alienated by the pledgor or owner
with the consent of the pledgee. This provision is in accordance
4. The undivided share or interest of
with Act No. 1508 which provides that a mortgagor of personal the insolvent debtor in property held
property shall not sell or pledge such property, or any part thereof, under co-ownership
mortgaged by him without the consent of the mortgagee in writing
on the back of the mortgage and on the margin of the record
thereof in the office where such mortgage is recorded. PROPERTIES OF INSOLVENT THAT DO NOT
A mortgage credit may be alienated or assigned to a PASS TO THE ASSIGNEE
third person. Since the assignee of the credit steps into the shoes
of the creditor-mortgagee to whom the chattel is mortgaged, it
follows that the assignee’s consent is necessary in order to bind 1. Property exempt from execution;
him of the alienation of the mortgaged thing by the debtor- 2. Property held in trust;
mortgagor This is tantamount to a novation. 3. Property of the conjugal partnership
or absolute community except
insofar as the debtor’s obligations When Sec. 37 does not apply: Not
redounded to the benefit of the family. applicable where what has been disposed of is
4. Property to which a mortgage or the creditor’s own credit and not the
pledge exists unless the creditor insolvent’s property.
surrenders his security or lien.
5. After-acquired property except fruits
and income of property owned by the DIVIDENDS IN INSOLVENCY
debtor
6. Non-leviable assets like life Dividends in insolvency – parcel if the fund
insurance policy which do not have any arising from the assets of the estate, rightfully
cash surrender value allotted to a creditor entitled to share in the
7. Right of action for tort which is fund, whether in the same proportion with
purely personal in nature. other creditors or in a different proportion. It
is paid by the assignee only upon order of the
court.
POWERS OF THE ASSIGNEE
1. To sue and recover all the estate,
debts, and claims belonging to or due CLASSIFICATION AND PREFERENCE OF
to the debtor; CREDITORS
2. To take into his possession all the
PREFERENCE – an exception to the general
estate of the debtor except property
rule. By it, one person is given a superior
exempt from execution;
right or claim over another. Hence, the law on
3. In case of non-resident or
preferences is strictly construed. (The general
absconding or concealed debtor, to
rule is that the purpose of insolvency
demand and receive of every
proceeding is the equitable distribution of the
sheriff all the property and money in
insolvent’s assets among the debtor’s
his possession belonging to the debtor.
creditors.)
4. To sell, upon order of the court, any
estate of the debtor which has come
into his possession;
RULES ON ORDER OF DISTRIBUTION
5. To redeem all mortgages and
pledges and to satisfy any 1. The priorities fixed by law govern
judgment which may be an 2. The claims which are given priority
encumbrance on any property sold by must be paid in full in the order of
him. their priority, before the general
6. To settle all accounts between the creditors receive anything.
debtor and his debtors subject to 3. Creditors claiming preference must
the approval of the court; sufficiently establish their credits and
7. To compound, under the order of the their right to preference to entitle them
court, with any person indebted to to such preference.
such debtor;
8. To recover any property
ORDER OF DISTRIBUTION
fraudulently conveyed by the
debtor. 1. Equitable claims under Sec. 48;
2. Preferred claims with respect to
CREDITOR’S LIABILITY FOR FRAUDULENTLY specific movable property and specific
ASSIGNING HIS CREDIT immovable property under Art. 2241
A creditor’s transfer or assignment of his and 2242 of the CC.
credit to another without the knowledge and 3. Preferred claims as to unencumbered
at the back of other creditors of the insolvent property of the debtor which shall be
may be a shrews surprise move that enables paid in the order named in Art. 2244 of
the transferor creditor to collect almost if not the CC.
the entire amount of the said creditor. 4. Common or ordinary credits which
shall be paid pro rata regardless of
REMEDY OF THE ASSIGNEE: SECTION 37 OF dates under Art. 2245 of the CC.
THE INSOLVENCY LAW:
With reference to specific movable and
The creditor coming within this purview is immovable property of the debtor, the taxes
liable to an action by the assignee for double due the State shall first be satisfied.
the value of the property so embezzled or
disposed of, to be received for the benefit of The preferred claims enumerated in Art. 2241
the insolvent’s estate. and 2242 are considered as mortgages and
Section 37 constitutes a sort of penal pledges of real or personal property or
clause which shall be strictly construed. liens within the purview of the Insolvency
Law.
3. The title to the insolvent’s property 4. Debt of any person liable for the same
shall revest in him; and debt, for or with the insolvent debtor,
4. The insolvent shall be released from either as a partner, joint contractor,
his debts. indorser, surety or otherwise;
5. The substitution, in a certain sense, 5. Debts of a corporation (Reason:
composition for the insolvency Corporation is not granted a discharge)
proceedings. 6. Claim for support (Reason: It will
6. A lawful composition and its make the law a means of avoiding the
performance by the insolvent has the enforcement of the obligation)
same effect of a written discharge, 7. Discharged debt but revived by a
although no written discharge is subsequent new promise to pay
granted. (Reason: Discharge does not end the
7. For all legal and practical purposes, the moral obligation to pay)
insolvency ended on the date of the 8. Debts which have not been duly
confirmation of composition and the schedules in time for proof and
firm was restored to its status quo. It allowance.
reacquired its personality. Its Exception: The creditors had notice or
properties ceased to be in custodia actual knowledge of the insolvency
legis. proceedings
WHEN CONFIRMATION MAY BE SET ASIDE
9. Claims for:
1. Any time within six months after the a. Unliquidated damages;
composition has been confirmed; b. Secured creditors;
2. Fraud was practiced in procuring such c. Not in existence or not mature
composition; at the time of the discharge;
3. Knowledge thereof has come to the d. Contingent at the time of the
petitioner after the confirmation of discharged.
such composition.
LEGAL EFFECTS OF DISCHARGE
DISCHARGE Discharge takes effect from the
commencement of the proceedings in
The formal and judicial release of an insolvent
insolvency.
debtor from his debts with the exception of
those expressly reserved by law. 1. Releases the debtor from all claims,
debts, liabilities and demand set forth
in the schedule or which were or might
WHEN AN INSOLVENT DEBTOR MAY APPLY have been proved against his estate in
FOR A DISCHARGE insolvency.
2. Operates as a discharge of the
General rule: A debtor may apply to the RTC
insolvent and future acquisitions but
for a discharge at three months to one year
permits mortgages and other lien
after the adjudication of insolvency.
3. It is a special defense which may be
Exception: The property of the insolvent has pleaded and be a complete bar to all
not been converted into money without his suits brought on any such debts,
fault, thereby delaying the distribution of claims, liabilities or demands.
dividends among the creditors in which case 4. It does not operate to release any
the court may extend the period. person liable for the same debts, for or
with the debtor, either as partner, joint
contractor, indorser, surety, or
DEBTS RELEASED BY A DISCHARGE otherwise.
5. The certificate of discharge is prima
1. All claims, debts, and liabilities, and
facie evidence of the fact of release,
demands set forth in the schedule; and
and the regularity of such discharge.
2. All claims, debts, liabilities and
demands which were or might have
been proved against the estate in Remedy of guarantor or surety when
insolvency debtor declared judicially insolvent: File a
contingent claim in the insolvency proceeding,
if his rights as such guarantor or surety are
DEBTS NOT RELEASED BY DISCHARGE
not to be barred by the subsequent discharge
1. Taxes or assessments due the of the insolvent debtor from all his liabilities.
Government;
2. Any debt created by the fraud or
embezzlement of the debtor; WHEN DISCHARGE MAY BE REVOKED
3. Any debt created by the defalcation of
Discharge may be revoked by the court which
the debtor as a public officer or while
granted it upon petition of any creditor:
acting in a fiduciary capacity;
Tito, with the understanding that the latter Bank, a foreign bank, to purchase outboard
could use it for one year for his personal or motors. Likewise, Ricardo executed a Surety
family use while Pedro works in Riyadh. He Agreement in favor of AC Bank. The outboard
did not tell Tito that the brakes of the van motors arrived and were delivered to Ricardo,
were faulty. Tito had the van tuned up and but he was not able to pay the purchase price
the brakes repaired. He spent a total amount thereof.
of P15,000.00. After using the vehicle for two
weeks, Tito discovered that it consumed too a) Can AC Bank take possession of the
much fuel. To make up for the expenses, he outboard motors? Why?
leased it to Annabelle. Two months later, b) Can AC Bank also foreclose the
Pedro returned to the Philippines and asked mortgage over the fishpond? Explain.
Tito to return the van. Unfortunately, while
being driven by Tito, the van was accidentally
damaged by a cargo truck without his fault.
a) Who shall bear the P15,000.00 spent
for the repair of the van? Explain.
b) Who shall bear the costs for the van’s
fuel, oil and other materials while it
was with Tito? Explain.
c) Does Pedro have the right to retrieve
the van even before the lapse of one
year? Explain.
d) Who shall bear the expenses for the
accidental damage caused by the cargo
truck, granting that the truck driver
and truck owner are insolvent? Explain.
Quasi-delict
Crime
public interest private concern
I. IN GENERAL
RPC punishes and CC repairs the
corrects the act damage by
A. What is a TORT? indemnification
punishes only includes all acts in
Essentially, "tort" consists in the violation of a when there is a which "any kind of
right given or the omission of a duty imposed penal law fault or negligence
by law. Tort is a breach of a legal duty. covering the act intervenes."
(Naguiat vs. NLRC) subsidiary liability solidary liability of
of employer employer
A tort is civil wrong, other than breach of ER’s defense is ER’s defense is that
contract, for which a court of law will afford a that employee’s accused observed due
remedy in the form of an action for damages. resources must diligence of a good
first be exhausted father of a family
Elements: (Barredo vs. Garcia)
1. Legal duty
2. Breach G. When is negligence presumed?
3. Causation
4. Damage In motor vehicle mishaps:
The doctrine of res ipsa loquitur (the thing Causation is the bringing about of a result,
speaks for itself) states that the happening of and a necessary element in establishing legal
an injury permits an inference of negligence liability.
where plaintiff produces substantial evidence
that injury was caused by an agency or J. What is PROXIMATE CAUSE?
instrumentality under exclusive control and
management of defendant, and that the Proximate legal cause is that acting first and
occurrence was such that in the ordinary
producing the injury, either immediately or by
course of things would not happen if
reasonable care had been used. (Layugan vs. setting other events in motion, all constituting a
IAC) natural and continuous chain of events, each
having a close causal connection with its
To be applicable, res ipsa loquitur requires: immediate predecessor, the final event in the
chain immediately effecting the injury as a
1) Evidence of the specific acts of
negligence is absent and not readily natural and probable result of the cause which
available; first acted, under such circumstances that the
2) The accident is of a kind which does person responsible for the first event should, as
not necessarily occur unless someone an ordinarily prudent and intelligent person,
is negligent;
3) The instrumentality which caused the
have reasonable ground to expect at the
injury was under the exclusive control moment of his act or default that an injury to
of the person in charge; and some person might probably result. (Vda. De
4) The injury suffered must not have been Bataclan vs. Medina, 1957)
due to any voluntary action or
contribution of the injured person. A prior and remote cause cannot be made the
basis of an action if such remote cause did
In this jurisdiction, res ipsa loquitur is not a nothing more than furnish the condition and
rule of substantive law but a mere evidentiary give rise to the occasion by which the injury
rule. Mere invocation and application of the was made possible, if there intervened
doctrine does not dispense with the between such prior or remote cause and the
requirement of proof of negligence. injury, a distinct, successive, unrelated and
efficient cause of the injury, even though such
injury would not have happened for such
Prof. Services Inc. vs. Agana condition or occasion. If no danger existed in
the condition except because of the
independent cause, such condition was not
For purposes of apportioning
the proximate cause and if an independent
responsibility in medical negligence cases, an negligent act which results in injury because
employer-employee relationship in effect exists of the prior defective condition, such
between hospitals and their attending and subsequent act or condition is the proximate
visiting physicians. The control test is cause. (Manila Electric Co. vs. Remoquillo,
1956)
determinative.
Recent years have seen the doctrine of
corporate negligence as the judicial answer to K. What is the relation of proximate cause
the problem of allocating hospital’s liability for to the elements of negligence tort?
the negligent acts of health practitioners,
absent facts to support the application of The most basic element of any tort action is the
respondeat superior or apparent authority. Its causal connection between the act or omission
formulation proceeds from the judiciary’s of the tortfeasor and the plaintiff’s injury such
acknowledgment that in these modern times, that without it, no action will prosper.
the duty of providing quality medical service is
no longer the sole prerogative and
responsibility of the physician. L. When is proximate cause presumed?
EXCEPTION: However, the character and negligence rendering him liable for damages
purpose of a particular statute may be such to private respondent for the destruction of
that the courts will deem a reasonable the car which was serviced by the petitioner
connection between the injury and the due to the fire. (Cipriano vs. CA, 1996)
violation sufficient to award damages based
on negligence. In this case, proximate cause
is presumed and the injured party need not O. What Civil Code provisions on
establish proximate cause in the traditional obligations are applicable in quasi-delict?
sense.
The provisions of Articles 1172 to 1174 are
If the very injury which a particular statute also applicable to a quasi-delict. (Art. 2178)
intends to prevent happens, the violation of
the statute is presumed to be, the proximate
Art. 1172. Responsibility arising from
cause of the injury. The violation of ordinance
negligence in the performance of every kind of
intended to promote safety is in itself
obligation is also demandable, but such
negligence. (Teague vs. Fernandez)
liability may be regulated by the courts,
according to the circumstances.
M. Is the presumption that the violation of
the statute is the proximate cause Art. 1173. The fault or negligence of the
disputable? obligor consists in the omission of that
It depends. diligence which is required by the nature of
the obligation and corresponds with the
circumstances of the persons, of the time and
DISPUTABLE in the ff. cases: of the place. When negligence shows bad
faith, the provisions of Articles 1171 and
violation creates a prima facie case of 2201, paragraph 2, shall apply.
negligence
violation constitutes evidence of If the law or contract does not state the
negligence diligence which is to be observed in the
performance, that which is expected of a good
The defense that the violation was either father of a family shall be required.
justifiable or excusable under the
circumstances of the case is available. The Art. 1174. Except in cases expressly specified
legal grounds or excuse for violation of a by the law, or when it is otherwise declared by
statute: stipulation, or when the nature of the
obligation requires the assumption of risk, no
1. Anything that would make complying person shall be responsible for those events
with the statute IMPOSSIBLE; which could not be foreseen, or which, though
2. Anything over which the defendant has foreseen, were inevitable.
NO CONTROL and places him in a
position contrary to that required by Art. 1171. Responsibility arising from fraud is
the statute; demandable in all obligations. Any waiver of
3. An EMERGENCY not of the defendant’s an action for future fraud is void.
making causing him to violate the
statute; and
4. Conduct that is precisely excused or Art. 2201, par.2
EXEMPTED by the statute.
In case of fraud, bad faith, malice or wanton
CONCLUSIVE: It is not available in cases attitude, the obligor shall be responsible for all
where the statute provides for negligence per damages which may be reasonably attributed
se. to the non-performance of the obligation.
RULE: No person shall be seen responsible for What is the maxim of “DAMNUM ABSQUE
those events which, could not foreseen, or INJURIA”?
which, though foreseen, were inevitable.
If damage results from a person's exercising
EXCEPTIONS (LAS): his legal rights, it is damnum absque injuria.
Since conjunction of damage and wrong is
1. Cases expressly specified by law absent, damage sustained is not actionable.
2. Nature of obligation requires assuming
the risk
3. Cases declared by stipulation (Art.
1174) Damage v. Injury
DEFENSES
“I was negligent and I am the proximate
“The plaintiff voluntarily assumed the risk. Volenti non fit injuria.” cause of the damage but the plaintiff
was guilty of contributory
What is the maxim of “VOLENTI NON FIT INJURIA”?
negligence.”
RULE: The maxim “volenti non fit injuria” What is the effect of plaintiff’s negligence
states that when a person voluntarily assents on his right to recover?
to a known danger, he must abide by the
consequences. IF it is the immediate and proximate CAUSE of
his injury, he CANNOT recover damages.
Illustration: The owner of an animal is
answerable only for damages caused to a IF only CONTRIBUTORY, the immediate and
stranger, and that for damage caused to the proximate cause of the injury being the
caretaker of the animal. A caretaker of defendant's lack of due care, the plaintiff may
animals voluntarily assumes the risks of his recover damages, but the courts shall
occupation. The owner would be liable only if MITIGATE the damages to be awarded. (Art.
he had been negligent or at fault under article 2179)
1902 of the Civil Code. (Afialde vs. Hisolde)
What is the doctrine of “LAST CLEAR The obligation imposed by Article 2176 is
CHANCE”? demandable from:
The doctrine of “last clear chance” (also 1. one's own acts or omissions,
“supervening negligence” or “discovered 2. acts or omissions of persons for whom
peril”) states that where both parties are one is responsible. (Art. 2180)
negligent, but the negligent act of one is
appreciably later in time than that of the A tortfeasor (liable directly or vicariously)
other, or when it is impossible to determine may be a natural or a juridical person.
whose fault or negligence should be attributed
to the incident, the one who had the last clear B. What is VICARIOUS LIABILITY?
opportunity to avoid the impending harm and
failed to do so is chargeable with the Vicarious liability is the imposition of liability
consequences thereof. An antecedent on one person for the actionable conduct of
negligence of a person doesn’t preclude the another, based solely on a relationship
recovery of damages for the supervening between the two persons. The liability is
negligence of, or bar a defense against liability primary and solidary. (Black’s Law
sought by another, if the latter, who had the Dictionary)
last fair chance, could have avoided the
impending harm by the exercise of due Extra-contractual liability of this kind has been
diligence. (PBCom vs. CA, 1997) limited to cases wherein “moral culpability”
can be directly imputed to the person
Illustration: A calesa being driven on the charged.
road side of the road and a car converged on
BASES:
a bridge. A collision was averted when the car
swerved suddenly but the calesa still fell of
the bridge. Although the plaintiff was guilty of a. Doctrine of Imputed Negligence
negligence in being in the wrong side of the
bridge, the defendant was nevertheless civilly This doctrine places upon one person the
liable for the legal damages resulting from the responsibility for another’s negligence.
collision, as he had a fair opportunity to avoid
the accident after he realized the situation b. Respondeat superior
created by the negligence of the plaintiff and
failed to avail himself of that opportunity; It means nothing more than “look to the man
while the plaintiff could by no means then higher up,” (usually the employer or person
place himself in a position of greater safety. under whose control the tortfeasor was under)
(Picart vs. Smith, 1918) which is a manifestation of vicarious liability.
persons who are under their authority REQUISITES for liability to attach:
and live in their company.
c. The OWNERS and MANAGERS of an Parents (mnemonic: 21 + Authority &
establishment or enterprise are Company):
likewise responsible for damages
caused by their employees in the 1. The child is below 21 years old
service of the branches in which the 2. The child is under the parental
latter are employed or on the occasion authority of the parents
of their functions. 3. The child is living in the company of
d. EMPLOYERS shall be liable for the the parents
damages caused by their employees
and household helpers acting within Guardians (mnemonic: Authority &
the scope of their assigned tasks, even Company)
though the former are not engaged in 1. The ward if minor is below 21 years
any business or industry. old. If Incapacitated, the guardian is
liable for the acts of the ward
C. Who are liable vicariously? (continued) regardless of the latter’s age.
The child is under the parental
e. The STATE is responsible in like authority of the parents
manner when it acts through a special 2. The tortfeasor is under his authority
agent; but not when the damage has 3. The tortfeasor is living in his company
been caused by the official to whom
the task done properly pertains, in Is a minor or insane tortfeasor with NO
which case what is provided in Article parent or guardian liable?
2176 shall be applicable.
f. Lastly, TEACHERS or HEADS of Yes. He shall be answerable with his own
establishments of arts and trades shall property in an action against him where a
be liable for damages caused by their guardian ad litem shall be appointed. (Art.
pupils and students or apprentices, so 2182)
long as they remain in their custody.
(Art. 2180) Owners and managers of establishments
or enterprises
Art. 221 (Family Code) PARENTS and The term “owners and managers of an
OTHER PERSONS EXERCISING PARENTAL establishment or enterprise” is used in the
AUTHORITY shall be civilly liable for the sense of an “EMPLOYER;” hence, managers
injuries and damages caused by the acts or cannot be liable since they themselves are
omissions of their unemancipated children employees of the enterprise.
living in their company AND under their
parental authority subject to the appropriate Art 2180, par 4 may be unnecessary as Art
defenses provided by law. 2180, par 5 already covers the cases under
par 4.
Despite the lowering of the age of majority
from 21 to 18, parents are still liable for the Employers
torts committed by their children below 21
years of age. (Art 236, par 3 FC, as The liability of an employer is based primarily
amended by RA 6809). on the presumption that he failed to exercise
due diligence in the selection and supervision
of his employees.
Exceptions:
After working overtime up to midnight, Alberto,
an executive of an insurance company drove a
company vehicle to a favorite videoke bar a. There is express legislative consent
where he had some drinks and sang some songs b. The State filed the case
with friends to “unwind.” At 2:00 a.m., he
Instances where the state gives its
drove home, but in doing so, he bumped a consent to be sued:
tricycle, resulting in the death of its driver. May
the insurance company be held liable for the a. Art. 2180 (6) is an example of an
negligent act of Alberto? Why? express legislative consent. Here, the
State assumes a limited liability for the
acts of its special agents.
Suggested Answer: b. Art. 2189 provides for state liability for
The insurance company is not liable because damages caused by defective condition
when the accident occurred, Alberto was not of public works.
acting within the assigned tasks of his c. Local Government Code provides for
employment. the liability of local government units
for the for the wrongful exercise of its
It is true that under Art. 2180 (par. 5) of the proprietary (as opposed to its
Civil Code, employers are liable for damages governmental) functions. The latter is
caused by their employees who were acting the same as that of a private
within the scope of their assigned tasks. corporation or individual. (Mendoza vs.
However, the mere fact that Alberto was using De Leon)
a service vehicle of the employer at the time
of the injurious accident does not necessarily Who is a special agent?
mean that he was operating the vehicle within
the scope of his employment. In Castilex A special agent is
Industrial Corp. vs. Vasquez, Jr. (321 SCRA
393 [1999]), the Supreme Court held that a. A public official required to do a
notwithstanding the fact that the employee particular task that is foreign to said
did some overtime work for the company, the official’s usual government functions,
former was, nevertheless, engaged in his own or
affairs or carrying out a personal purpose B. A PRIVATE INDIVIDUAL WHO IS
when he went to a restaurant at 2:00 a.m. COMMISSIONED FOR A SPECIAL GOVERNMENT
after coming out from work. The time of the TASK.
accident (also 2:00 a.m.) was outside normal
working hours. The agent must be empowered by a definite
order or commission to perform some act.
Alternative Answer: This act must be the one that gives rise to the
The insurance company is liable if Alberto was injury claimed. (Merritt vs. Government)
negligent in the operation of the car and the
car was assigned to him for the benefit of the If the State’s agent is not a public official and
insurance company, and even though he was is commissioned to perform non-
not within the scope of his assigned tasks governmental functions, then the State
when the accident happened. In one case assumes the role of an ordinary employer and
decided by the Supreme Court, where an can be held liable for the agent’s tort.
executive of a pharmaceutical company was
given the use of a company car, and after Does state immunity mean that injured
office hours, the executive made personal use persons are deprived of remedy?
The respective liabilities of those referred to in Yes. Responsibility ceased when they prove
the preceding paragraph shall not apply if it is that they observed all the diligence of a good
proved that they exercised the proper father of a family to prevent damage. (Art.
diligence required under the particular 2180)
circumstances.
All other cases not covered by this and the F. What is the liability of joint tortfeasors?
preceding articles shall be governed by the
provisions of the Civil Code on quasi-delicts. The responsibility of two or more persons who
are liable for quasi-delict is SOLIDARY. (Art.
Who are liable? 2194)
REQUISITES:
d. Public Humiliation
1) defendant is enriched
Carpio vs. Valmonte 2) plaintiff suffered damage or loss
3) there is no just or legal ground for
defendant's enrichment
Wedding coordinator accused by bride’s aunt
4) enrichment is at the expense of
for stealing jewelry, in the presence of other
plaintiff
people in hotel room. True, petitioner had the
right to ascertain the identity of the
malefactor, but to malign respondent without
B. Ostentatious Display of Wealth
an iota of proof is impermissible.
4. Defective condition of public works slope caused the van to gain speed and that,
5. Collapse of a building as he stepped on the brakes to check the
6. Things thrown or falling from a building acceleration, the brakes locked, causing the
van to go even faster and eventually to hit the
A. Damages caused by an animal car in front of it. Orlando and Diego contend
that the sudden malfunction of the van’s
Who is liable for damages caused by an brake system is a fortuitous event and that,
animal? therefore, they are exempt from any liability.
32 CC. Any public officer or employee, or any The responsibility herein set forth is not
private individual, who directly or indirectly demandable from a judge unless his act or
obstructs, defeats, violates or in any manner omission constitutes a violation of the Penal
impedes or impairs any of the following rights code or any other penal statute.
and liberties of another person shall be liable
to the latter for damages: REQUISITE: FACT OF VIOLATION
Notes: Because of the last sentence, the civil the private complainant in the criminal case.
action provided under this article cannot (Casupanan vs. Laroya)
strictly be considered as an independent civil
action. The criminal action for violation of Batas
Pambansa Blg. 22 shall be deemed to include
It should be emphasized that the same the corresponding civil action and that no
negligent act causing damages may produce a reservation to file such civil action separately
civil liability arising from a crime under Art. shall be allowed. But a separate proceeding
100 of the Revised Penal Code or create an for the recovery of civil liability in cases of
action for quasi-delict or culpa extra- violations of B.P. No. 22 is allowed when the
contractual under Arts. 2176-2194 of the New civil case is filed ahead of the criminal case.
Civil Code. (Garcia vs. Florido) (Sps. Benito Lo Bun Tiong etc. vs. Vicente
Balboa)
If Liability being predicated on quasi-delict the
civil case may proceed as a separate and BAR QUESTION
independent civil action, as specifically
provided for in Article 2177 of the Civil Code. As a result of a collision between a taxicab
(Cinco vs. Canonoy) owned by A and another taxicab owned by B,
X, a passenger of the first taxicab, was
seriously injured. X later filed a criminal
VII. CIVIL LIABILITY ARISING action against both drivers.
(a)
FROM CRIME (a) Is it necessary for X to reserve his right to
Responsibility for fault or negligence is
institute a civil action for damages against both
entirely separate and distinct from the civil taxicab owners before he can file a civil action
liability arising from negligence under the for damages against them? Why?
RPC. But double recovery is not allowed. (Art.
(b) May both taxicab owners raise the defense
2177)
of due diligence in the selection and
supervision of their drivers to be absolved
RPC Art. 100 provides that every person who
from liability for damages to X? Reason.
is criminally liable for a felony is also civilly
liable. This general rule however presupposes
Suggested Answer:
that the felony had resulted in damage or
(a) It depends. If the separate civil action is
injury to another’s person or property. To
to recover damages arising from the
create an obligation or give rise to civil
criminal act, reservation is necessary. If
liability, an act or omission, whether
the civil action against the taxicab owners
intentional or negligent, must have caused
is based on culpa contractual or on quasi-
damage or injury to another, otherwise only
delict, there is no need for reservation.
criminal liability will attach.
(b) It depends. If the civil action is based on
quasi-delict, the taxicab owners may raise
Though the general rule provides that one
the defense of diligence of a good father of
who is not criminally liable cannot be civilly
a family in the selection and supervision of
liable, RPC Arts. 101-103 provide exceptions
the driver; if the action against them is
as they provide for vicarious liability for
based on culpa contractual or civil liability
certain types of offenders and subsidiary
arising from a crime, they cannot raise the
liability in case of default of the offender.
defense.
The civil liability established by RPC Arts.
Alternative Answer:
100-103 include:
No such reservation is necessary. Under
Section 1 Rule 111 of the 2000 Rules on
a. Restitution;
Criminal Procedure, what is “deemed
b. Reparation of the damage caused;
instituted” with the criminal action is only the
and
action to recover civil liability arising from the
c. Indemnification for consequential
crime or ex delicto. All the other civil actions
damages.
under Articles 32, 33, 34, 2176 of the New
Civil Code are no longer “deemed instituted,”
Deemed instituted in every criminal
and may be filed separately and prosecuted
prosecution is the civil liability arising from the
independently even without any reservation in
crime or delict per se (civil liability ex delicto),
the criminal action (Section 3, Rule 111, 2000
but not those liabilities from quasi-delicts,
Rules on Criminal Procedure). The failure to
contracts or quasi-contracts. (Neplum vs.
make a reservation the criminal action is not a
Orbeso)
waiver of the right to file a separate and
independent civil action based on these
An accused in a pending criminal case can
articles of the New Civil Code (Casupanan vs.
validly file, simultaneously and independently,
Laroya, G.R. No. 145391, August 26, 2002)
a separate civil action for quasi-delict against
II. KINDS OF DAMAGES (1) The amount of damages must be fair and
just and commensurate to the loss.
Kinds of Damages (MENTAL) - In case of contracts, only those
(1) ACTUAL/COMPENSATORY- for loss actually injuries which could have been
suffered reasonably foreseen by the parties
(2) MORAL- mental anguish, etc. by the parties at the time the
(3) NOMINAL- for rights recognized and contract was entered into are
violated recoverable.
(4) TEMPERATE/MODERATE- for damages
proved but the amount was not proven (2) The damages must be proximate damages
(5) LIQUIDATED- stipulated damages in the and not remote or speculative.
contract
(6) EXEMPLARY/CORRECTIVE- to serve as an (3) The damages must be proven by
example for the common good (Art. competent evidence (admissible or
2197) probative)
- It is necessary to prove with a
reasonable degree of certainty,
premised upon competent proof
A. Actual or Compensatory
and on the best evidence
obtainable by the injured party, the
When is a person entitled to actual or
actual amount of loss. (Integrated
compensatory damages?(Art. 2199)
Packaging Corp. vs. CA; Fuentes
A)
vs. CA)
When there is a pecuniary loss
suffered by him
(4) Complaint and prayer must specify
When he has alleged and prayed
amount of damages and pay filing fees
for such relief (Manchester Dev’t
before it may be accepted and admitted
Corp vs. CA)
for filing. (Circ. No. 7, Mar. 24, 1988;
When he has duly proved it
Manchester Dev’t. Corp. vs. CA, 1987).
B)
When provided by law
(5) The requirement of certainty does not
Or by stipulation
prevent the drawing of reasonable
inferences from the fact and circumstance
in evidence.
Damages for Personal Injury & Death When can attorney’s fees, other than
(Art. 2206) judicial costs, be recovered? (SELMUBS-
CREWD) (Art. 2208).
Recoverable damages for death caused by a
crime or quasi-delict: (1) If there is a stipulation to that effect
(a) At least three thousand pesos, even (2) When exemplary damages are
though there may have been awarded;
mitigating circumstances. (3) When the defendant's act or omission
- As of 2008, it is P75,000 (People has compelled the plaintiff to litigate
vs. Robert Brodett y Pajaro, Jan. with third persons or to incur expenses
18, 2008) to protect his interest;
(4) In criminal cases of malicious
(b) Loss of the earning capacity of the prosecution against the plaintiff;
deceased, (5) In case of a clearly unfounded civil
- paid to his heirs action or proceeding against the
- unless the deceased on account of plaintiff;
permanent physical disability not (6) Where the defendant acted in gross and
caused by the defendant, had no evident bad faith in refusing to satisfy
earning capacity at the time of the plaintiff's plainly valid, just and
death; demandable claim;
(7) In actions for legal support;
(c) Support according to the provisions of (8) In actions for the recovery of wages of
Article 291 household helpers, laborers and skilled
- the recipient who is not a testate or workers;
intestate heir may demand support (9) In actions for indemnity under
from the person causing the death, workmen's compensation and
for a period not exceeding five employer's liability laws;
years (10) In a separate civil action to recover civil
liability arising from a crime;
(d) Moral damages (11) When at least double judicial costs are
- demanded by the spouse, awarded;
legitimate and illegitimate (12) In any other case where the court
descendants and ascendants of the deems it just and equitable that
deceased attorney's fees and expenses of
litigation should be recovered.
Factors:
fees, such filing, however, has almost (7) Libel, slander or any other form of
invariably been held not to be a ground for defamation;
an award of moral damages. (8) Malicious prosecution;
8. The burden rests on the person claiming (9) Acts mentioned in Article 309;
moral damages to show convincing (disrespect for the dead)
evidence for good faith is presumed. In a (10) Acts and actions referred to in Articles
case involving simple negligence, moral 21, 26, 27, 28, 29, 30, 32, 34, and 35.
damages cannot be recovered. (Villanueva
vs. Salvador) Who else can recover moral damages?
9. Failure to use the precise legal terms or
"sacramental phrases" of "mental anguish,
- Parents of the female seduced,
fright, serious anxiety, wounded feelings
abducted, raped, or abused, referred
or moral shock" does not justify the denial
to in No. 3
of the claim for damages. It is sufficient
- The spouse, descendants, ascendants,
that these exact terms have been pleaded
and brothers and sisters (SDABS) may
in the complaint and evidence has been
bring the action mentioned in No. 9 in
adduced (Miranda-Ribaya vs. Bautista)
the order named.
10. Even if the allegations regarding the
amount of damages in the complaint are
What are the other legal grounds for
not specifically denied in the answer, such
awarding moral damages?
damages are not deemed admitted.
- Willful injury to property if such
(Raagas, et al. vs. Traya et al.)
damages are justly due.
11. An appeal in a criminal case opens the
- Breaches of contract where the
whole case for review and this 'includes
defendant acted fraudulently or in bad
the review of the penalty, indemnity and
faith. (Art. 2220)
damages. Even if the offended party had
not appealed from said award, and the
Labor Cases
only party who sought a review of the
Moral damages are recoverable only where
decision of said court was the accused, the
the dismissal of the employee:
court can increase damages awarded
(Sumalpong vs. CA)
(1) Was attended by bad faith or fraud
Cases where recovery of moral damages are allowed (2) Constituted an act oppressive to labor
(3) Was done in a manner contrary to
morals, good customs, or public policy.
(1) A criminal offense of physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other BAR QUESTION
lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest; Ortillo contracts Fabricato, Inc. to supply and
(6) Illegal search; install tile materials in a building he is donating
(7) Libel, slander, defamation; to his province. Ortillo pays 50% of the contract
(8) Malicious prosecution; price as per agreement. It is also agreed that
(9) Article 309;
the balance would be payable periodically after
(10) Articles 21, 26, 27, 28, 29, 30, 32,
34, and 35. (Art. 2219) every 10% performance until completed. After
(11) wilful injury to property (Art. 2220) performing about 93% of the contract, for
(12) breach of contract (Art. 2220) which it has been paid an additional 40% as per
(13) death of passenger from breach a agreement, Fabricato, Inc. did not complete the
breach of carriage (Art. 1764 in
relation to Art. 2206 and (Expertravel
project due to its sudden cessation of
& Tours vs. CA) operations. Instead, Fabricato, Inc. demands
payment of the last 10% of the contract despite
Art. 2219. Moral damages may be its non-completion of the project. Ortillo
recovered in the following and analogous refuses to pay, invoking the stipulation that
cases: (not an exclusive list; 2PI-SALAMI-
309-Others)
payment of the last amount of 10% shall be
upon completion. Fabricato, Inc. brings suit for
(1) A criminal offense resulting in physical the entire 10% plus damages. Ortillo counters
injuries; with claims for (a) moral damages for Fabricato,
(2) Quasi-delicts causing physical injuries; Inc.’s unfounded suit which has damaged his
(3) Seduction, abduction, rape, or other
lascivious acts;
reputation as a philanthropist and respected
(4) Adultery or concubinage; businessman in his community, and (b)
(5) Illegal or arbitrary detention or arrest; attorney’s fees.
(6) Illegal search;
(b) Yes, based on contract and/or on tort. Nominal damages are incompatible with:
The lessor willfully breached his actual, temperate and exemplary damages.
obligations under Article 1654, NCC,
hence, he is liable for breach of Armovit vs. CA
Nominal damages cannot co-exist with actual
contract. For such breach, the lessee may or compensatory damages.
recover moral damages under Art. 2220 of the
NCC, and actual damages that she may have Francisco v. Ferrer
suffered on account thereof. And since the No moral or exemplary damages was
conduct of the lessor was contrary to morals, awarded. Nevertheless, when confronted with
he may also be held liable for quasi-delict. their failure to deliver on the wedding day the
The lessee may recover moral damages under wedding cake ordered and paid for, petitioners
Article 2219 (10) in relation to Article 21, and gave the lame excuse that delivery was
all actual damages which she may have probably delayed because of the traffic, when
suffered by reason of such conduct under in truth, no cake could be delivered because
Articles 9, 20 and 21. the order slip got lost. For such prevarication,
petitioners must be held liable for nominal
Yes, the action should prosper for both actual damages for insensitivity, inadvertence or
and moral damages. In fact, even exemplary inattention to their customer's anxiety and
damages and attorney’s fees can be claimed need of the hour.
by Rosa, on the authority of Magbanua vs.
IAC (137 SCRA 328), considering that, as
given, the lessor’s willful and illegal act of D. Temperate
disconnecting the water and electric services
resulted in Rosa’s suffering a nervous What is the nature of temperate or
breakdown. Art. 20 NCC and Art. 21 NCC moderate damages?
authorize the award of damages for such
willful and illegal conduct. Temperate or moderate damages, which are
more than nominal but less than
C. Nominal compensatory damages.
Art. 2221. Nominal damages are It may be recovered when some pecuniary
adjudicated in order that a right of the loss has been suffered but its amount can not
plaintiff, which has been violated or invaded be provided with certainty. (Art. 2224)
by the defendant, may be vindicated or
recognized, and not for the purpose of Temperate damages must be reasonable
indemnifying the plaintiff for any loss suffered under the circumstances. (Art. 2225)
by him.
Requisites:
Art. 2222. The court may award nominal
damages: (1) There is actual damage.
(2) The pecuniary amount of the damage
- in every obligation in Article 1157, or cannot be proved.
- where any property right has been (3) Amount must be reasonable.
invaded.
In cases where the resulting injury might
Art. 2223. What is precluded by the be continuing and possible future
adjudication of nominal damages? complications directly arising from the
- further contest upon the right involved injury, while certain to occur are difficult
- all accessory questions to predict, temperate damages can and
- between the parties or their respective should be awarded on top of actual or
heirs and assigns. compensatory damages; in such cases
there is no incompatibility between actual
Requisites: and temperate damages.
Temperate damages are incompatible with
(1) A legal right has been violated. nominal damages hence, cannot be
(2) There is no loss or damage suffered or granted concurrently (Citytrust Bank vs.
such cannot be proven or was not IAC)
proved.
(3) The award is to vindicate the right Pleno vs. CA
violated. Temperate damages are included within the
context of compensatory damages (RCPI vs.
General Rule: One does not ask for nominal CA). ". . . There are cases where from the
damages and it is in lieu of the actual, moral, nature of the case, definite proof of pecuniary
temperate, or liquidated damages. loss cannot be offered, although the court is
convinced that there has been such loss. For
NOTE: In this case actual and temperate Requisites to recover exemplary damages
damages were awarded. It is postulated that and liquidated damages agreed upon in
the actual damages is for the car while the addition to exemplary (Art.2234):
temperate damages is for the lost actual
income not sufficiently proved. The plaintiff must show that he is entitled to
moral, temperate or compensatory damages
E. Liquidated
If arising When exemplary
What are liquidated damages? from damages are
Those agreed upon by the parties to a granted
contract, to be paid in case of breach thereof. Art. Crimes the crime was
(Art. 2226) 2230 committed with an
aggravating
What are the grounds for equitable circumstance/s
reduction of liquidated damages? Art. Quasi-delicts defendant acted
- iniquitous or 2231 with gross
- unconscionable. (Art. 2227) negligence
Art. Contracts and defendant acted in a
In what instance is the stipulation not 2232 Quasi- wanton, fraudulent,
controlling? contracts reckless,
oppressive, or
When the breach of the contract is not the malevolent manner
one contemplated by the parties in agreeing (WFROMM)
upon the liquidated damages. In this case, the
law shall determine
EXEMPLARY OR the measure of damages. A stipulation whereby exemplary damages are
(Art. 2228) renounced in advance shall be null and void.
CORRECTIVE DAMAGES (Art. 2235)
Notes
(1) These damages are agreed upon in a Notes
contract in case of breach thereof.
(2) There is no need to prove the amount, (1) Amount need not be proven.
only the fact of the breach. (2) Cannot be recovered as a matter or right;
(3) The amount can be reduced if: may be waived.
a. unconscionable as determined by An employer may be subsidiarily liable to pay
the court (Art. 2227) moral, actual, temperate or liquidated
b. partial or irregular performance damages arising from an employee’s criminal
offense, but NOT as to exemplary damages
General Rule: The penalty shall substitute because aggravating circumstances are
the indemnity for damages and the payment personal to the accused.
of the interests in case or breach.
PNB vs. CA
Exceptions However, the award of P1,000,000 exemplary
damages is also far too excessive and should
(1) When there is stipulation to the likewise be reduced to an equitable level.
contrary. Exemplary damages are imposed not to enrich
(2) When the obligor is sued for refusal to one party or impoverish another but to serve
pay the agreed penalty. as a deterrent against or as a negative
(3) When the obligor is guilty of fraud. incentive to curb socially deleterious actions.
F. Exemplary or Corrective
TABLE OF CONTENTS
I. Introduction 299
II. Torrens Certificate of Title 299
III. Original Registration 300
IV. Cadastral Registration Proceedings 305
V. Subsequent Registration 305
VI. Dealings with Unregistered Lands 309
VII. Patents 309
VIII. Remedies of Aggrieved Party 311
IX. Replacement and Reconstitution 312
I. INTRODUCTION
To establish and certify to the
ownership of an absolute and
A. CONCEPTS AND DEFINITIONS indefeasible title to realty, and to
simplify its transfer Grey Alba vs. CA.
1. THE TORRENS SYSTEM
A system for registration of land D. JURISDICTION
under which, upon landowner’s
application, the court may, after
RTCs of province or city where the
appropriate proceedings, direct the
land or a portion or it lies- land
issuance of a certificate of title.
registration proceedings and over all
(Black’s Law Dictionary)
petitions filed after original registration
of titles (Sec. 2, PD 1529)
2. LAND TITLE
MTCs- cadastral and land registration
Evidence of the right of the owner or
cases covering:
the extent of his interest, and by which
o lots without controversy or
means he can maintain control, and as
opposition
a rule assert right to exclusive
o contested lots where the value
possession and enjoyment of property.
does not exceed P100,000.00
(sec. 34, BP 129)
3. DEED
A written instrument executed in
accordance with law, wherein a person
grants or conveys to another certain II. TORRENS CERTIFICATE OF TITLE
land, tenements, or hereditaments.
A. KINDS
4. FEE SIMPLE
Absolute title; absolute estate in 1. OCT
perpetuity. Land is conferred upon a The first title issued in the name of a
man and his heirs absolutely and registered owner by the Register of
without any limitation imposed upon Deeds covering a parcel of land
the state. which had been registered under the
Torrens System, by virtue of judicial
5. REGISTRATION or administrative proceedings.
The State provides a public record of
the title itself upon which a 2. TCT
prospective purchaser or someone The certificate shall show the number
else interested may rely. of the next previous certificate
covering the same land and also the
6. RECORDING fact that it was originally registered,
Provides for the recording of giving the record number, the
conveyance and other instrument number of the original certificate of
without guaranteeing the title, leaving title, and the volume and page of the
to the prospective purchasers or other registration book in which the latter
persons interested to examine the is found. (Sec. 43, PD 1529)
instruments in the records and
formulate their own conclusions as to 3. PATENTS
their effect on the title. Whenever public land is by the
Government alienated, granted or
B. NATURE conveyed to any person, the same
shall be brought forthwith under the
Land registration is a proceeding in rem operation of this Decree. It shall be
(Sec. 2, PD 1529). A proceeding in rem, the duty of the official issuing the
dealing with a tangible res, may be instrument of alienation, grant,
instituted and carried to judgment, without patent or conveyance in behalf of the
personal service Roxas vs. Enriquez. Government to cause such
instrument to be filed with the
C. PURPOSE OF REGISTRATION Register of Deeds of the province or
city where the land lies, and to be
The real purpose of that system is to there registered like other deeds and
quiet title to land; to put a stop forever conveyance.
to any questions of the legality of the The deed, grant, patent or
title, except claims which were noted at instrument of conveyance from the
the time of the registration, in the Government to the grantee shall not
certificate, or which may arise take effect as a conveyance or bind
subsequent thereto Legarda vs. Saleeby. the land but shall operate only as a
persons who did not appear and sent, together with the owner's
answer. (Sec. 26, PD 1529) duplicate certificate, to the Register
of Deeds where the property is
Absence of opposition does not
situated for entry in his registration
justify outright registration Director
book. (sec. 39, PD No. 1529).
of Lands vs. Agustin.
The Register of Deeds shall forthwith
8. HEARING send notice by mail to the registered
owner that his owner's duplicate is
Proof of Ownership
ready for delivery to him upon
(a) Tax declaration and receipts- payment of legal fees. (sec. 40, PD
not conclusive but have strong 1529)
probative value when
accompanied by proof of actual - Appeal reckoned from the
possession Municipality of Solgen’s receipt of the decision.
Santiago vs. CA - Becomes final 15 days from
receipt
(b) Payment of taxes- payment in
one lump sum to cover all past
Court retains jurisdiction over the
taxes is “irregular” and affects
case until after the expiration of 1
the validity of the applicant’s
year from the issuance of the decree
claim of ownership Republic vs.
of registration Gomez vs. CA.
Tayag
(c) Spanish titles- no longer D. ATTRIBUTES OF AND LIMITATION
admissible ON CERTIFICATE OF TITLE AND
REGISTERED LAND (FIIC)
9. JUDGMENT
Judgment becomes final upon 1. Free from Liens and
expiration of 30 days from receipt of Encumbrances except (NCTHA)
notice of judgment (Sec. 30, PD
1529). Those noted in the certificate
Liens, claims or rights existing
Other incidents:
under the laws and Constitution
WRIT OF POSSESSION which are not required to appear
of record in the Registry of
The writ may be issued not only
Deeds
against the person defeated in
Unpaid real estate taxes levied
the registration case but also
and assessed within 2 yrs
against any one adversely
preceding the acquisition of any
occupying the land during the
right over the land
proceedings Vencilao vs. Vano.
Any public highway or private
The writ does not lie against a way established or recognized by
person who entered the land after law, or any government
the issuance of the decree and irrigation canal or lateral thereof,
who was not a party in the case. if the certificate of title does not
He can only be proceeded against state that the boundaries of such
in a separate action for ejectment have been determined.
or reinvindicatory action Bernas Any disposition of the property
vs. Nuevo. or limitation on the use thereof
by virtue of, or pursuant to,
WRIT OF DEMOLITION
Presidential Decree No. 27 or
This writ is a complement of the any other laws on agrarian
writ of possession Gawaran vs. IAC. reform. (Sec. 44, PD 1529)
It must be reopened not later than This applies only to alienable and
1 yr from and after the date of the disposable (A&D) agricultural lands of
entry of such decree. the public domain. Under Sec. 6 of CA
141, the classification of public lands
No petition shall be entertained
into A&D, forest lands, or mineral lands
where an innocent purchaser for
is the prerogative of the Executive
value may be prejudiced. This
Department.
includes an innocent lessee,
mortgagee, or other encumbrancer The rule on confirmation of imperfect
for value. title does not apply unless and until the
land classified as, say, forest land, is
Upon the expiration of said period
released in an official proclamation to
of one year, the decree of
that effect so that if may form part of
registration and the certificate of
the disposable agricultural lands of the
title issued shall become
public domain. (Bracewell vs. CA,
incontrovertible. The only remedy
GR. NO 107247)
left is an action for damages. (Sec.
32, PD 1529)
1) PERIOD OF FILING
The rule on the incontrovertible
nature of a certificate of title RA No. 9176 extended the period
applies when what is involved is the to file an application for judicial
validity of the OCT, not when it confirmation of imperfect or
concerns that of the TCT Arguelles incomplete title to December 31,
vs. Timbancaya). 2020. It further limited the area
applied for to 12 hectares.
3. Imprescriptible
2) REQUISITES
No title to registered land shall be
Filipino citizen
acquired by prescription or adverse
He must have, by himself, or
possession. (Sec. 47, PD 1529)
thru his predecessors-in-
interest, possessed and
Prescription is unavailing not only
occupied an alienable and
against the registered owner but
disposable agricultural portion
also against his hereditary
of the public domain
successors because the latter
Such possession and occupation
merely step into the shoes of the
must have been OCEN and in
decedent by operation of law and
the concept of owner since June
are merely the continuation of the
12, 1945
personality of their predecessor-in-
Application filed with proper court
interest Barcelona vs. Barcelona.
3) PRIVATE CORPORATIONS
4. Not Subject to Collateral Attack
Where at the time the corporation
A certificate of title shall not be
acquired the land, its predecessor-
subject to collateral attack. It
in-interest had been in possession
cannot be altered, modified, or
and occupation thereof in the
canceled except in a direct
manner and for the period
proceeding in accordance with law.
prescribed by law as to entitle him
(Sec. 48, PD 1529)
to registration in his name, then
the proscription against
E. JUDICIAL CONFIRMATION OF
corporation acquiring alienable
IMPERFECT OR INCOMPLETE TITLES lands of the public domain does
General Rule: No title or right to, or not apply for the land was no
equity in, any lands of the public longer public land but private
domain may be acquired by property Dir. Of Lands vs. IAC and
prescription or by adverse possession Acme Plywood and Veneer Co., G.R.
or occupancy except as expressly 73002. Since the land is private,
provided by law. (Sec. 57, CA 141) the corporation can institute
The Public Land Act recognizes the confirmation proceedings.
concept of ownership under the civil
law. This ownership is based on * Requirements of the proceedings
adverse possession and the right of are governed by PD 1529.
acquisition is governed by the Chapter
on judicial confirmation of imperfect or
incomplete titles.
registration book in which the the certificate of title and also upon the
new certificate is registered and owner's duplicate certificate a
a reference by number to the memorandum thereof and shall sign.
last preceding certificate. (Sec. 61, PD 1529)
d. The original and the owner's
duplicate of the grantor's G. POWERS OF ATTORNEY; TRUSTS
certificate shall be stamped
"canceled". Powers of attorney to deal with
e. The deed of conveyance shall registered land shall be registered with
be filed and indorsed with the the Register of Deeds of the province
number and the place of or city where the land lies. Revocation
registration of the certificate of of power shall be registered in like
title of the land conveyed. manner (Sec. 64, PD 1529).
TABLE OF CONTENTS
Section 1. Conflict of Laws 315
Section 2. Jurisdiction 315
Section 3. Choice of Law 317
Section 4. Recognition and Enforcement of Judgment 324
This explains the distinctions made o Mullane v. Central Hanover Bank &
between actions in personam41 and actions in Trust Co. (1950): The standard for
rem or quasi in rem42, dating back to the case adequate notice is WON it is
of Pennoyer v. Neff(1878). reasonably certain to inform those
affected or, where conditions do not
o In actions in personam, wherein the reasonably permit such notice, WON
defendant is a non-resident who does not the form chosen is not substantially
voluntarily submit himself to the authority less likely to bring home notice than
of the court, personal service of summons other of the feasible and customary
within the state is essential to the substitutes.
acquisition of jurisdiction over her person.
- This method of service is possible if o Shaffer v. Heitner (1977): The
such defendant is physically present in minimum contacts and fundamental
the country. If he is not found therein, fairness test should be satisfied
the court cannot acquire jurisdiction regardless of whether the proceedings
over his person and therefore cannot are in rem, quasi in rem, or in
validly try and decide the case against personam, and the minimum contacts
him. must exist among the forum,
- An exception was laid down in defendant, and the cause of action.
Gemperle v. Schenker wherein a non-
resident was served with summons o Long-arm statutes: statutes that
through his wife, who was a resident allow the forum state to exercise
of the Philippines and who was his jurisdiction over a non-resident
representative and attorney-in-fact in defendant, provided that the
a prior civil case filed by him; prospective defendant has sufficient
moreover, the second case was a mere minimum contacts with the forum
offshoot of the first case. state.
2 types:
o On the other hand, in a proceeding in rem - first type enumerates factual
or quasi in rem, jurisdiction over the situations likely to satisfy the
person of the defendant is not a minimum-contacts test;
prerequisite to confer jurisdiction on the - second type is much broader
court provided that the court acquires and provides jurisdiction over
jurisdiction over the res. Nonetheless an individual or corporation
summons must be served upon the as long as that jurisdiction is
defendant not for the purpose of vesting not inconsistent with
the court with jurisdiction but merely for constitutional restrictions
satisfying the due process requirements.
(Asiavest Limited v. CA, 1998) 3 WAYS OF DEALING WITH
A CONFLICTS CASE:
In the US: The conceptual basis for the 1. Dismiss the case because of
exercise of jurisdiction has a. lack of jurisdiction or
shifted from territorial power to b. forum non conveniens
considerations of MINIMUM 2. Assume jurisdiction over the case and
CONTACTS and FUNDAMENTAL apply the internal law of the forum
FAIRNESS. 3. Assume jurisdiction over the case and take
into account or apply the law of some
other State or States
o International Shoe Co. v. (Hasegawa v. Kitamura, 2007)
Washington (1945): Due process only
requires that the defendant who is not
present within the territory of the Doctrine of FORUM NON CONVENIENS
forum have minimum contacts with it
such that the maintenance of the suit o literal meaning: the forum is inconvenient
does not offend traditional notions of o emerged in private international law to
fair play and substantial justice. deter the practice of global forum
shopping- that is, to prevent non-resident
litigants from choosing the forum or place
wherein to bring their suit for malicious
reasons, such as to secure procedural
41
Actions in personam are directed against specific advantages, to annoy and harass
persons and seek personal judgments. the defendant, to avoid overcrowded
42 dockets, or to select a more friendly
Actions in rem or quasi in rem are directed against the
thing or property or status of a person and seek venue.
judgments with respect thereto as against the whole
world.
5. Choice-influencing considerations
APPROACHES TO CHOICE OF LAW (BOPIS)
a. Predictability of results;
1. Traditional approach: simplicity, b. Maintenance of interstate and
convenience, uniformity international order;
2. Modern approach: reaching appropriate c. Simplification of the judicial task;
results in particular cases d. Application of the better rule of law;
e. Advancement of the forum’s
governmental interests
TRADITIONAL APPROACH THEORIES:
ESCAPE DEVICES: used to avoid the
1. Vested Rights Theory inherent rigidity and unjust decisions that may
o An act done in a foreign jurisdiction result from the application of traditionally-
gives rise to the existence of a right if oriented rules
the laws of that state provide so. This 1. Characterization
right vests in the plaintiff and he 2. Renvoi
carries it with him to be enforced in
any forum he chooses to bring suit
o The applicable law is the law of the CHARACTERIZATION: assigning a disputed
place of occurrence of the LAST ACT question to an area of substantive law
necessary to complete the cause of 1. Subject-matter characterization:
action. classifying a FACTUAL SITUATION into
a LEGAL CATEGORY
2. Substance-procedure
characterization
- if issue substantive: may apply o Forum court would apply the law the
foreign law foreign court would have applied
- if issue procedural: apply forum
law Renvoi does NOT apply to a false conflict.
1. Foreign court had JURISDICTION over o It has been recognized that “public policy”
the parties and the case as a defense to the recognition of
2. Judgment VALID under the laws of the judgments serves as an umbrella for a
country that rendered it variety of concerns in international
3. Judgment FINAL and EXECUTORY to practice which may lead to a denial of
constitute res judicata in another recognition. (Mijares v. Ranada, 2005)
action
4. RECIPROCITY: state where foreign
judgment was obtained allows