Professional Documents
Culture Documents
PROPERTY
Classification of Property 68
Ownership 69
Ownership in General 69
Right of Accession 73
Quieting of Title 78
Ruinous Buildings and Trees in Danger of Falling 79
Co-Ownership 79
Page 2 of 230
Possession 81
Usufruct 85
Different Modes of Acquiring Ownership 88
Occupation 88
Prescription 90
Prescription of Ownership and Other Real Rights
Prescription of Actions
Donation 94
SALES
Definition; Characteristics 118
Essential Requisites 120
Form of Sales 122
Formation, Perfection and Consummation of Sales 122
Double Sales 126
Sale by Non-Owner or One Having Voidable Title 127
Loss, Deterioration, Fruits and Other Benefits 128
Remedies for Breach of Contract of Sale 129
Remedies of the Seller
Remedies of the Buyer
Sale of Movables by Installment (Recto Law) 130
Sale of Immovables (In General) 131
Sale of Immovables (By Installment) 131
Conditions and Warranties 133
Extinguishment 135
Assignment 139
Bulk Sales Law 139
Anti-Dummy Law 140
CREDIT TRANSACTIONS
General Provisions 140
Commodatum 142
Mutuum 143
Deposit 144
Guaranty 148
For there must be courage in wisdom, grace in strength. Pledge 152
1. Kinds of Absence
i. LEGITIMATE PARENTS AND SURVIVING SPOUSE
a) Physical absence
b) Legal absence
Intestate Heir SHARE AS SHARE AS FREE TOTAL INTESTATE
c) Provisional Absence
LEGITIME DISPOSAL SHARE
i. A person disappears from his domicile;
Legitimate ½ ½
ii. His whereabouts are unknown; and
parents
a. He did not leave any agent; or
b. He left an agent but agent's power has expired
Surviving ¼ ¼ ½
spouse
2. Stages of Absence:
(1) Temporary or provisional absence w/c happens as soon as a person
TOTAL ¾ ¼ 1 disappears from his domicile and his whereabouts are unknown, leaving
no administrator of his prop. (Articles 381-383);
j. LEGITIMATE PARENTS, SURVIVING SPOUSE AND
ILLEGITIMATE CHILDREN (2) Normal or declared absence w/c is one juridically declared after 2
yrs. since the last news was heard from him, or 5 yrs if he left an
Intestate Heir SHARE AS SHARE AS FREE TOTAL INTESTATE administrator (Articles 384-389);
LEGITIME DISPOSAL SHARE
Legitimate ½ ½ (3) Definite or presumptive death w/c takes place when after the
parents period provided by law, a person is presumed dead; the period varies
according to circumstances. (Articles 390-396.)
Surviving spouse 1/8 1/8 ¼ (a) ordinary presumptive death
(b) qualified presumptive death
Illegitimate ¼ ¼
children 3. The Administration shall Cease in Any of the Following Cases
a) when the absentee appears personally or by means of an agent;
TOTAL 7/8 1/8 1
- wife is the guilty party she shall resume her maiden name TOTAL ½ ½ 1
and surname
- wife is the innocent party choices:
resume using her maiden name and
surname b. ONE LEGITIMATE CHILD AND SURVIVING SPOUSE
continue employing her husband’s
surname, unless: Intestate SHARE AS SHARE AS FREE TOTAL INTESTATE
the court decrees otherwise, or Heir LEGITIME DISPOSAL SHARE
the wife of the former husband is
Legitimate ½ ½
married again to another person
child
3 Legally separated she shall continue using the name
and surname she was employing
Surviving ¼ ¼ ½
prior to the legal separation
spouse
(Tolentino v CA)
Page 12 of 230 Page 221 of 230
and legitimate and legitimate or legitimate or illegitimate 4 Divorce (at least if they allow it later choices: same as widowed spouse
ascendants illegitimate descendants or for those who got divorced during
descendants the Japanese occupation
Between Persons Younger person is obliged to use such additional name
3 Illegitimate children illegitimate parents legitimate or illegitimate of surname as will avoid confusion
and legitimate or parents and legitimate Between Son may use the word “Junior”
illegitimate ascendants, adoptive Ascendants and e.g. Marife Lomibao-Tan, Jr.
descendants parents Descendants
4 Surviving spouse surviving spouse surviving spouse Grandsons and other male descendants, shall either :
add a middle name
5 Legitimate siblings, illegitimate siblings, siblings, nephews, nieces e.g. Happy Chris Tan
nephews, nieces nephews, nieces add the mother’s surname
e.g. Happy Lomibao Tan
6 Legitimate collateral State State add the Roman numerals II, III and so on
relatives
1. Procedural Requirements for a Petition for Change of Name
7 State a) 3 years residency in the province where change is sought prior to
the filing;
5. CONCURRENCE IN LEGAL OR INTESTATE SUCCESSION b) must not be filed within 30d prior to an election;
c) the petition must be verified
Intestate Heir EXCLUDES EXCLUDED BY CONCURS WITH
Legitimate children Ascendants, No one Surviving spouse 2. Proper and Reasonable Causes that may Warrant the Grant of a Petition for
and Legitimate collaterals and Illegitimate Change of Name:
descendants state children a) the petitioner’s true and official name is ridiculous;
b) the petitioner’s true and official name is tainted with dishonor
Illegitimate Illegitimate No one Surviving spouse c) the petitioner’s true and official name is extremely difficult to write
children and parents, collaterals Legitimate or pronounce;
Descendants and state children and d) when the request for change is a consequence of a change of
legitimate status, such as when a natural child is acknowledged or
parents legitimated;
Legitimate parents Collaterals and Legitimate Illegitimate e) when the change is necessary to avoid confusion
and legitimate state children children and
ascendants surviving spouse 3. Elements of Usurpation of Name
a) there is an actual use of another's name by the defendant
Illegitimate parents Collaterals and Legitimate Surviving spouse b) the use is unauthorized
state children and c) the use of another's name is to designate personality or to identify
illegitimate a person
children
Surviving spouse Collaterals other No one Legitimate 4. Remedies available against the usurper to the person whose name has been
usurped
than siblings, children
nephews and Illegitimate a) Civil (insofar as private persons are concerned)
i. injunction
nieces children
Legitimate ii. damages (actual and moral)
parents and b) Criminal (when public affairs are prejudiced)
Illegitimate
parents 5. When Use of Another's Name is Not Actionable
Page 220 of 230 Page 13 of 230
a) when the name is used as stage, screen, or pen name, provided: the free portion, shall be respected. In sum, the estate of Lamberto will be
b) use of name is in good faith; and distributed as follows: Baldo------------------ 450,000
c) by using the name of another, no injury is caused to that person's Vilma------------------ 250,000
right Elvira------------------ 250,000
d) when use is motivated by modesty, a desire to avoid unnecessary Ernie------------------- 50,000
trouble, or other reason not prohibited by law or morals ---------------
1,000,000
FAMILY RELATIONS
4. Marriage Exempt from License Requirements 2 Legitimate parents illegitimate children illegitimate children and
Page 14 of 230 Page 219 of 230
5. The cause must be certain and true, and must be proved by the a) Marriage in articulo mortis
interested heir if the person disinherited should deny it b) If the residence of either party is so located that there is no means
6. It must unconditional of transportation to enable such party to appear personally before
7. It must be total the civil registrar
c) Marriage in articulo mortis in military zones and on planes and
4. VACANCY IN SUCCESSION ships
A) CAUSES OF VACANCY IN SUCCESSION: d) Marriage among Muslims or among members of ethnic cultural
1. Disinheritance - The testator creates it himself communities in accordance with their customs
2. Repudiation - The heir does something e) Marriage between persons who have lived together as husband and
3. Incapacity/Predecease - Something happens to the heir wife for at least five years and without any legal impediment to
marry each other
B) HOW VACANCIES ARE FILLED:
1. Substitution 5. Flaws in the Marriage Requisites and Effects
2. Representation a) ABSENCE of ANY essential or formal requisites- marriage void ab
3. Accretion initio
Except: If the marriage is solemnized by unauthorized person, the
5. ORDER OF PAYMENT IN CASE ESTATE IS INSUFFICIENT TO COVER ALL marriage will still be valid if either or both contracting parties
LEGACIES AND DEVICES: believed in good faith that the solemnizing officer had legal
1. Remuneratory legacies or devises authority [Article 35 (2)]
2. Legacies or devises declared by the testator to be preferential b) Defect in ESSENTIAL Requisites- Voidable
3. Legacies for Support c) Irregularity in formal requisite- Valid but party responsible for such
4. Legacies for Education irregularity shall be civilly, criminally and administratively liable
5. Legacies or devises of a specific, determinate thing which forms a part of
the estate 6. Other requirements: if either or both parties are:
6. All others pro-rata a) 18 years old and above but below 21- needs parental consent, or
else marriage voidable
Bar Question (2000). In his last will and testament, Lamberto 1) disinherits his b) 21 years old and above but below 25- needs parental advice, even
daughter Wilma because “she is disrespectful towards me and raises her voice if lacking marriage is still valid. However, suspend the issuance of
talking to me”, 2) omits entirely his spouse Elvira, 3) leaves a legacy of the marriage license for a period of 3 months from the completion
P100,000.00 to his mistress Rosa and P50,000.00 to his driver Ernie and 4) of publication of the application for marriage license. If the parties
institutes his son Baldo as his sole heir. How will you distribute his estate of get married during the 3-month period without a license, the
P1,000,000.00? marriage shall be VOID. On the other hand, if they are able to
obtain a license during the 3-month period, the marriage will still
Answer: The disinheritance of Wilma was ineffective because the ground relied be valid but may be held civilly and criminally liable.
upon by the testator does not constitute maltreatment under Article 919(6) of c) 18 years old and above but below 25- marriage counseling, if
the New Civil Code. Hence, the testamentary provisions in the will shall be lacking same effect as above
annulled but only to the extent that her legitime was impaired. The total
omission of Elvira does not constitute preterition because she is not a 7. Rule on Marriages Solemnized Abroad
compulsory heir in the direct line. Only compulsory heirs in the direct line may be a) General Rule: Marriages solemnized outside the RP in accordance
the subject of preterition. Not having been preterited, she will be entitled only to with the law of the foreign country shall be valid in the Philippines
her legitime. The legacy in favor of Rosa is void under Article 1028 for being in (lex loci celebrationis)
consideration of her adulterous relation with the testator. She is, therefore, b) Exceptions:
disqualified to receive the legacy of 100,000 pesos. The legacy of 50,000 pesos i. Marriage between persons below 18 years old
in favor of Ernie is not inofficious not having exceeded the free portion. Hence, ii. Bigamous or polygamous marriage
he shall be entitled to receive it. The institution of Baldo, which applies only to iii. Mistake in identity
iv. Marriages void under Article 53
Bar Question (2006). Gemma filed a petition for the declaration of nullity of Legitimate 1/8 ¼ ½
her marriage with Arnell on the ground of psychological incapacity. She alleged parents
that after 2 months of their marriage, Arnell showed signs of disinterest in her, Surviving
neglected her and went abroad. He returned to the Philippines after 3 years but spouse
did not even get in touch with her. Worse, they met several times in social Illegitimate
functions but he snubbed her. When she got sick, he did not visit her even if he children
knew of her confinement in the hospital. Meanwhile, Arnell met an accident Illegitimate ½
which disabled him from reporting for work and earning a living to support children (divided
himself. Will Gemma’s suit prosper? Explain. alone by no.
of
Answer: children)
Illegitimate 1/3 1/3
Gemma’s suit will not prosper. The acts of Arnell complained about do children (divided
not by themselves constitute psychological incapacity. It is not enough to prove Surviving by no.
the commission of those acts or the existence of his abnormal behavior. It must spouse of
be shown that those acts or that behavior was manifestation of a serious mental children)
disorder and that it is the root cause why he is not able to perform the essential Surviving ½ or 1/3 if
duties of married life. It must also be shown that such psychological incapacity, spouse marriage
as manifested in those acts or that behavior was existing at the time of the alone in articulo
celebration of the marriage. In this case, there was no showing that Arnell was mortis
suffering from a serious mental disorder,that his behavior was a manifestation of Illegitimate ½
that disorder, and that such disorder prevented him from complying with his parents
duties as a married person. alone
Illegitimate ¼ ¼
d) Incestuous Marriage parents
i. Between ascendants and descendants of any degree
Surviving
ii. Between brothers and sisters, whether full or half spouse
blood
4. REMEDY OF COMPULSORY HEIR IN CASE OF IMPAIRMENT OF LEGITIME:
e) Void for Reason of Public Policy
a) If the impairment is total, then there may be preterition if the
i. Between collateral blood relatives up to the 4th civil
compulsory heir preterited is either an ascendant or descendant. Article
degree
854 would come into play (annulment of institution of heir and
ii. Between step-parents and step-children
reduction of devises and legacies)
Page 18 of 230 Page 215 of 230
3. Concurring – those who succeed together with the primary or the iii. Between parents-in law and children-in law
secondary compulsory heirs iv. Between adopting parent and adoptive child
a. Widow or widower (legitimate) v. Between surviving spouse of the adopter and the
b. Illegitimate children and descendants (legitimate or adopted
illegitimate) vi. Between surviving spouse of the adopted and the
adopter
3. SUMMARY OF LEGITIMES OF COMPULSORY HEIRS: vii. Between adopted and legitimate child of adopter
viii. Between adopted children of same adopter
SURVIVING LEGITIMATE SURVIVING ILLEGITIMATE LEGITIMATE ILLEGITIMATE ix. Between parties where one with the intention to
RELATIVES CHILDREN & SPOUSE CHILDREN PARENTS & PARENTS marry the other, killed that the other person’s spouse
DESCENDANTS ASCENDANTS or his/her own spouse
Legitimate ½ (divided
children by the # of Rule on Bigamous Marriage (Article 41)
alone children) General Rule: Marriage contracted by any person during the subsistence of a
1 ½ ¼ previous marriage is VOID.
legitimate Exception: If before the celebration of the subsequent marriage, the prior spouse
child had been absent for 4 consecutive years (ordinary absence) or 2 years
surviving (extraordinary absence) and the spouse has a well-founded belief that the
spouse absent spouse was already dead. In this case, the subsequent marriage is valid
but it shall be automatically terminated by the recording of the affidavit of
Legitimate ½ (divided Same as reappearance of the absent spouse.
children by no. of the share Exception to Exception: If both spouses of the subsequent marriage acted in bad
Surviving children) @ legit faith, such marriage is void ab initio.
spouse child
10. VOIDABLE MARRIAGES (annullable)
Legitimate ½ ½ of a) Grounds for Annulment of Marriage
children the i. Lack of parental consent
Illegitimate share of ii. Insanity of one of the parties
children @ legit iii. Fraud
child 1) Non-disclosure of conviction by final judgment of
1 ½ ¼ ½ of crime involving moral turpitude
legitimate (preferred) the 2) Concealment of pregnancy by another man
child share of 3) Concealment of sexually transmissible disease,
surviving @ legit regardless of nature, existing at the time of
spouse child marriage
illegitimate 4) Concealment of drug addiction, habitual alcoholism,
children homosexuality and lesbianism
iv. Force, intimidation or undue influence
2 or more ½ (divided Same as ½ of v. Impotency
legitimate by no. of the share the vi. Affliction of sexually transmissible disease found to be
children children) of @ legit share of serious and which appears incurable
surviving child @ legit
spouse child b) Rules on filing the action of annulment
Illegitimate
children
(1) As counsel for Gigi, I will file an action for the declaration of nullity of Gigi’s 7. QUALIFICATIONS OF WITNESSES TO A NOTARIAL WILL:
marriage to Ric on the ground of absence of authority of the Baptist Minister 1. Of sound mind
2. Of the age of 18 years or more
e) Prescriptive Period for Filing Action for Revocation of Donation 2. KINDS OF SUCCESSION
Propter Nuptias a) Testamentary – that which results from the designation of an heir,
i. If marriage is not celebrated (except donations made in a will executed in the form prescribed by law
contained in the marriage settlement which are b) Legal or Intestate – that which takes place by operation of law in
automatically rendered void if the marriage does not the absence of a valid will
take place)- 5 years (Art. 1149) from the time c) Mixed – that which is effected partly by will and partly by operation
marriage is not solemnized on the fixed date of law
ii. If marriage is judicially declared void, it depends:
3. KINDS OF HEIRS:
-if subsequent marriage is void pursuant to Art. 40 in a) Compulsory – those who succeed by force of law to some portion
relation to Arts. 52 and 53, because contracted by a of the inheritance, in an amount predetermined by law, of which
spouse before prior void marriage is judicially they cannot be deprived by the testator, except by a valid
declared void – by operation of law if donee-spouse disinheritance
contracted subsequent void marriage in bad faith. b) Voluntary or Testamentary – those who are instituted by the
-Judicially declared void on grounds other than Art. testator in his will, to succeed to the portion of the inheritance of
40 in relation to Arts. 52 and 53 – 5 years from which the testator can freely dispose
finality of judicial declaration of nullity (if action to c) Legal or Intestate – those who succeed to the estate of the
recover property) decedent who dies without a valid will, or to the portion of such
estate not disposed of by will
Bar Question (1998). In 1970, Bob and Issa got married without executing a Implied Trusts
marriage settlement. In 1975, Bob inherited from his father a residential lot upon
which, in 1981, he constructed a two-room bungalow with savings from his own 1. Concept: Implied trusts are those which, without being expressed, are
earnings. At that time, the lot was worth P800,000.00 while the house, when deducible from the nature of the transactions as matter of intent, or which are
finished, cost P600,000.00. In 1989, Bob died, survived only by his wife Issa and super induced on the transaction by operation of law, is matters of equity,
his mother, Sofia. Assuming that the relative values of both assets remained at independently of the particular intention of the parties. The doctrine of implied
the same proportion: trusts is founded upon equity. As such, trust can never result from acts violative
1. State whether Sofia can rightfully claim that the house and lot are not of the law.
conjugal but exclusive property of her deceased son.
2. Will your answer be the same if Bob died before August 3, 1988? 2. Kinds:
a) Resulting trust – a trust whish is raised or created by the act or
construction of law, or in its more restricted sense, it is raised by
Answers: implication of law and presumed always to have been contemplated by
1. Since Bob and Sofia got married in 1970, then the law that governs is the the parties, the intention as to which is to be found in the nature of
New Civil Code (Persons), in which case, the property relations that their transaction, but not expressed in the deed or instrument of
should be applied as regards the property of the spouses is the system of conveyance. Examples are those found in Articles 1448 to 1455 of the
relative community or conjugal partnership of gains (Art. 119, Civil Code). NCC
By conjugal partnership of gains, the husband and the wife place in a
common fund the fruits of their separate property and the income from b) Constructive trust – a trust raised by construction of law; in a more
their work or industry (Art. 142, Civil Code). In this instance, the lot restricted sense and as contra-distinguished from a resulting trust, it is
inherited by Bob in 1975 is his own separate property, he having acquired a trust not created by words, expressly or impliedly evincing a direct
the same by lucrative title (par. 2, Art. 148, Civil Code). However, the intention to create a trust by the construction of equity in order to
house constructed form his own savings in 1981 during the subsistence of satisfy the demands of justice; it does not arise by agreement or
his marriage with Issa is conjugal property and not exclusive property in intention but by operation of law
accordance with the principle of “reverse accession” provided for in Art.
158, Civil Code. 3. Distinction between Express and Implied Trusts
2. Yes, the answer would still be the same. Since Bob and Issa contracted
their marriage way back in 1970, then the property relations that will Express Trust Implied Trust
5. When may a trustee sue as such? 1. Rule: In the absence of an express declaration in the marriage settlements,
Before a trustee may sue or be sued alone as such, it is essential that the separation of property between the spouses during the marriage shall not
his trust be express. take place except by judicial order.
6. Acceptance, Declination, or Renunciation by the Trustee 2. Judicial separation of property may either be voluntary or for sufficient cause.
a) In the case of an express trust, acceptance of trust by a trustee is a) Sufficient Cause for Judicial Separation of Property
necessary to charge him with the office of the trustee and the i. Civil interdiction of the spouse of petitioner
administration of the trust and to vest the legal title in him. However, ii. Judicial declaration of absence
his acceptance of the trust is not necessary to its existence and validity, iii. Loss of parental authority as decreed by the court
since if he declines the trust, the courts will appoint a trustee to fill the iv. Abandonment or failure to comply with family
office that he declines. obligation
b) One designated or appointed as trustee may decline the responsibility v. Administrator spouse has abused authority
and thereby be free from any legal or equitable duty or liability in the vi. Separation in fact for one year and reconciliation is
matter. highly improbable
c) Unless a contrary intention appears in the instrument constituting the
trust, declination or refusal or disqualification of a trustee does not 3. Grounds for Revival of Former Property Regime
operate to defeat or void the trust, nor does it operate to vest legal as i. When civil interdiction of the prisoner-spouse
well as equitable title in the beneficiary. terminates
d) Renunciation of a trust after its acceptance can only be by resignation ii. When the absentee spouse reappears
or retirement with court approval, with agreement of beneficiaries, and iii. When the court authorizes resumption of
on satisfaction of all legal liabilities growing out of the acceptance of the administration by the spouse formerly exercising such
trust. power
e) When a person administering property in the character of a trustee iv. When the spouse who has abandoned the conjugal
inconsistently assumes to be holding in his own right, this operates as home returns and resumes common life with the
renunciation of the trust and the beneficiaries of the property are other
entitled to maintain an action to declare their right and remove the v. When parental authority is judicially restored to the
unfaithful trustee. spouse previously deprived thereof
vi. When spouses agree to revive their former property
7. Acceptance of Trust by the Beneficiary regime
a) This is essential to the creation and validity of a trust.
b) Acceptance is presumed if the granting of benefit is purely gratuitous 4. Ground for Transfer of Administration of Exclusive Property of Either Spouse
(no onerous condition) EXCEPT if there is proof that he really did not a) One spouse becomes guardian of the other
accept. b) One spouse judicially declared absent
c) Acceptance by the beneficiary of a gratuitous trust is not subject to the c) One spouse sentenced to penalty with civil interdiction
rules for the formalities of donations. d) One spouse becomes a fugitive from justice
2. Laches and Prescription Distinguished d) Actual value of the family home shall not exceed P300,000
PRESCRIPTION LACHES (URBAN) and P200,000 (RURAL) [Article 157]
Concerned with the Concerned with the fact of delay
fact of delay e) The Family Home is Exempt from:
A matter of time Principally a question of inequity founded on some 1. Execution
change in the condition of the property or the relation 2. Forced Sale
of the parties 3. Attachment
Statutory Not statutory
Applies to law Applies to equity f) Exceptions to Exemption of Family Home (Article 155)
Based on a fixed time Not based on a fixed time i. Non-payment of taxes
ii. incurred prior to constitution of home
iii. Debts secured by mortgages on the premises
iv. Debts due laborers, mechanics, architects, builders,
TRUSTS
materialmen and others who have rendered service or
furnished materials for the construction of the building
1. Definition of Trust:
a) Trust is the legal relationship between one person having an equitable
g) Beneficiaries of a Family Income
ownership in property and another person owning the legal title to such
i. Husband and wife, or unmarried head of the family
property, the equitable ownership of the former entitling him to the
ii. Parents, ascendants, brothers & sisters living in home and
performance of certain duties and the exercise of certain powers by the
depend on head of family for support
latter.
b) It is a right, enforceable in equity, to the beneficial enjoyment of
h) Sale, alienation, Donation, Assignment or Encumbrance of the Family
property the legal title to which is in another.
Home
c) As it is founded in equity, it can never result from act violative of law.
i. The person who constituted the same must give his/her
written consent
2. Characteristics of Trust
ii. The spouse of the person who constituted the family
a) It is a relationship;
home must also give his/her written consent
b) It is a relationship of fiduciary character;
iii. A majority of the beneficiaries of legal age must also give
c) It is a relationship with respect to property, not one involving merely
their written consent
personal duties;
iv. In case of conflict, the court shall decide
d) It involves the existence of equitable duties, imposed upon the holder of
the title of the property to deal with it for the benefit of another;
i) Requisites for Creditor to Avail of the Right under Article 160
e) It arises as a result of a manifestation of intention to create the
i. He must be a judgment creditor;
relationship.
ii. His claim is not among those excepted under Article155,
and
3. Distinguished from Bailment
A delivery of property in trust necessarily involves a transfer of legal
title, or at least a separation of equitable interest and legal title, with the legal
Page 198 of 230 Page 35 of 230
iii. He has reasonable grounds to believe that the family ii. Intent or at least expectation that this conduct shall be acted upon
home is worth more than the maximum amount fixed in by at least influence the other party;
Article 157 iii. Knowledge, actual or constructive, of the real facts
2. Certificate must be filed with the SEC 2. Who May Not Adopt
a) Guardian with respect to ward before final accounting
4. WHEN GENERAL PARTNER NEEDS CONSENT/RATIFICATION OF ALL LTD b) Person convicted of crime involving moral turpitude
PARTNERS: c) Alien
1. Do any act in contravention of the certificate Exceptions (an alien may adopt):
2. Do any act which would make it impossible to carry on the ordinary i. Former Filipino adopting a relative by blood
business of the partnership ii. Alien adopting legitimate child of Filipino spouse
3. Confess judgment against partnership iii. Joint adoption by Alien and Filipino spouse of latter’s
4. Possess partnership property/assign rights in specific partnership blood relative
property other than for partnership purposes iv. Those allowed by rules on inter-country adoption
5. Admit person as general partner
6. Admit person as limited partner - unless authorized in certificate Bar Question (2001). A German couple filed a petition for adoption of a minor
7. Continue business with partnership property on death, retirement, Filipino child with the Regional Trial Court of Makati under the provisions of the
civil interdiction, insanity or insolvency of gen partner unless Child and Youth Welfare Code which allowed aliens to adopt. Before the petition
authorized in certificate could be heard, the Family Code, which repealed the Child and Youth Welfare
Code, came into effect. Consequently, the Solicitor General filed a motion to
5. SPECIFIC RIGHTS OF LIMITED PARTNERS:
Page 192 of 230 Page 41 of 230
dismiss the petition, on the ground that the Family Code prohibits aliens from • Creditors have an equitable lien on the consideration paid to the
adopting. If you were the judge, how will you rule on the motion? retiring/deceased partner by the purchaser when retiring/deceased
partner sold his interest w/o final settlement with creditors
Answer: The motion to dismiss the petition for adoption should be denied. The • Rights if retiring/estate of deceased partner:
law that should govern the action is the law in force at the time of the filing of a. To have the value of his interest ascertained as of the date of
the petition. At that time, it was the Child and Youth Welfare Code that was in dissolution
effect, not the Family Code. Petitioners have already acquired a vested right on b. To receive as ordinary creditor the value of his share in the
their qualification to adopt which cannot be taken away by the Family Code. dissolved partnership with interest or profits attributable to use
(Republic v. Miller G.R. No. 125932, April 21, 1999, citing Republic v. CA, 205 of his right, at his option
SCRA 356)
Right to Account - may be exercised by:
3. Who May Not Be Adopted 1. Winding up partner
a) Person of legal age 2. Surviving partner
Exception: An adult may be adopted if he is: 3. Person/partnership continuing the business
i. A child by nature of adopter or of spouse
ii. Consistently considered by adopter as his own child Persons Authorized to Wind Up
during minority 1. Partners designated by the agreement
b) Alien whose country has no diplomatic relations with the Philippines 2. In absence of agreement, all partners who have not wrongfully
c) Person previously adopted (not yet revoked) dissolved the partnership
3. Legal representative of last surviving partner
4. General Rule: Husband and Wife must jointly adopt
Exceptions: Limited Partnership
a) One spouse adopts his/her illegitimate child 1. Characteristics
b) One spouse adopts legitimate child of the other a) Formed by compliance with statutory requirements
b) One or more general partners control the business
5. Written Consent Necessary For Adoption c) One or more general partners contribute to the capital and share in the
a) Person to be adopted, if 10 years old or over profits but do not participate in the management of the business and
b) Natural parents or legal guardian of the person to be adopted are not personally liable for partnership obligations beyond their capital
c) Legitimate children of the adopter, 10 years old or over contributions
d) Adopted children of the adopter, 10 years old or over d) May ask for the return of their capital contributions under conditions
e) Illegitimate children of the adopter, 10 years old or over and living prescribed by law
with him e) Partnership debts are paid out of common fund and the individual
f) Spouse of the adopted, if married properties of general partners
g) Spouse of the adopter, if married
2. Differences between General And Limited Partner/Partnership
6. Effects of Adoption GENERAL LIMITED
a) Deemed a legitimate child of the adopter Personally liable for partnership obligations Liability extends only to his
b) Acquired reciprocal rights and obligations arising from parent-child capital contributions
relationship When manner of mgt. not agreed upon, all No participation in management
c) Right to use surname of the adopter gen partners have an equal right in the mgt.
d) Parental authority of natural parents terminates and vested in of the business
adopter Contribute cash, property or industry Contribute cash or property only,
e) Remains intestate heir of natural parents and blood relatives not industry
Proper party to proceedings by/against Not proper party to proceedings
7. Judicial Rescission of Adoption partnership by/against partnership
Rule 100, ROC: Rescission and Revocation of Adoption Interest not assignable w/o consent of other Interest is freely assignable
Page 42 of 230 Page 191 of 230
iii. Rights of partner where dissolution in contravention of agreement a) Who may petition? Adoptee only.
1. Partner who did not cause dissolution wrongfully: b) Grounds:
a. Apply partnership property to discharge liabilities of i. Repeated physical and verbal maltreatment
partnership ii. Attempt on life
b. Apply surplus, if any to pay in cash the net amount iii. Sexual assault/violence
owed to partners iv. Abandonment and failure to comply with parental
c. Indemnity for damages caused by partner guilty of obligation
wrongful dissolution c) Remedy of adopter against the erring adoptee: Disinheritance
d. Continue business in same name during agreed term d) Effects of rescission:
e. Posses partnership property if business is continued i. Restoration of previous legal custody (for minors) or
appointment of guardians
2. Partner who wrongly caused dissolution: ii. Extinguishment of reciprocal rights
a. If business not continued by others - apply iii. Cancellation of amended birth certificate and
partnership property to discharge liabilities of restoration of original birth certificate
partnership & receive in cash his share of surplus less iv. The adopted shall revert to his surname prior to the
damages caused by his wrongful dissolution adoption
b. If business continued by others - have the value of
his interest at time of dissolution ascertained and paid Bar Question (2000). Sometime in 1990, Sarah, born a Filipino but by then a
in cash/secured by bond & be released from all naturalized American citizen, and her American husband Tom, filed a petition in
existing/future partnership liabilities the Regional Trial Court of Makati, for the adoption of the minor child of her
sister, a Filipina. Can the petition be granted?
iv. Rights of injured partner where partnership contract is rescinded on
ground of f fraud/misrepresentation by 1 party: Answer: It depends. If Tom and Sarah have been residing in the Philippines for
1. Right to lien on surplus of partnership property after satisfying at least 3 years prior to the effectivity of RA 8552, the petition may be granted.
partnership liabilities Otherwise, the petition cannot be granted because th American husband is not
2. Right to subrogation in place of creditors after payment of qualified to adopt.
partnership liabilities While the petition for adoption was filed in 1990, it was considered
3. Right of indemnification by guilty partner against all partnership refilled upon the effectivity of RA 8552, the Domestic Adoption Act of 1998. This
debts & liabilities is the law applicable, the petition being still pending with the lower court.
Under the Act, Sarah and Tom must adopt jointly because they do not
3. SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS fall in any of the exceptions where one of them may adopt alone. When husband
and wife must adopt jointly, the Supreme Court has held in a line of cases that
a) Assets of the partnership: both of them must be qualified to adopt. While Sarah, an alien, is qualified to
1. Partnership property (including goodwill) adopt under Section 7(b)(i) of the Act for being a former Filipino citizen who
2. Contributions of the partners seeks to adopt a relative within the 4th degree of consanguinity or affinity, Tom,
an alien, is not qualified because he is neither a former Filipino citizen nor
b) Order of Application of Assets: married to a Filipino. One of them not being qualified to adopt, their petition has
1. Partnership creditors to be denied. However, if they have been residents of the Philippines three years
2. Partners as creditors prior to the effectivity of the Act and continues to reside here until the decree of
3. Partners as investors - return of capital contribution adoption is entered, they are qualified to adopt the nephew of Sarah under
4. Partners as investors - share of profits if any Section 7(b) thereof, and the petition may granted.
4. WHEN BUSINESS OF DISSOLVED PARTNERSHIP IS CONTINUED: 8. Inter-Country Adoption Act of 1995 (R.A. 8043)
• Creditors of old partnership are also creditors of the new partnership • Inter-country adoption shall only be resorted to after all possibilities for
which continues the business of the old one w/o liquidation of the the adoption of the Filipino child within the Philippines have been
partnership affairs exhausted.
7. Liability of Parents for Torts Committed By Their Minor Children Title in partnership name, Conveyance in Conveyance passes title but
a) Parents and other person exercising parental authority are partnership name partnership can recover if:
civilly liable for the torts committed by their minor children, 1. Conveyance was not in the usual
PROVIDED they are living in their company way of business, or
b) This is subject to the appropriate defenses provided by law 2. Buyer had knowledge of lack of
authority
8. Effect of Parental Authority Upon the Property of the Child Title in partnership name, Conveyance in Conveyance does not pass title
a) The Father and Mother shall jointly exercise legal partner's name but only equitable interest,
guardianship over the property of the minor child without unless:
court appointment 1. Conveyance was not in the usual
b) In case of disagreement, the father’s decision shall prevail, way of business, or
unless there is judicial order to the contrary 2. Buyer had knowledge of lack of
c) If the market value of the property or the annual income of authority
the child exceeds P50,000, the parent is required to furnish Title in name of 1/ more partners, Conveyance passes title but
a bond of not less than 10% of the value of the child’s Conveyance in name if partner/partners partnership can recover if:
property or income in whose name title stands 1. Conveyance was not in the usual
way of business, or
9. Grounds for Suspension of Parental Authority 2. Buyer had knowledge of lack of
a) Conviction of parent for crime with civil interdiction authority
b) Treats child with excessive harassment and cruelty Title in name of 1/more/all partners or Conveyance will only pass equitable
c) Gives corrupting orders, counsel or example 3rd person in trust for partnership, interest
d) Compels child to beg Conveyance executed in partnership
e) Subjects or allows acts of lasciviousness name of in name of partners
1. Every partnership shall operate under a firm name. Persons who 11. Cases where Parental Authority May be Revived (i.e. “Suspended” Parental
include their names in the partnership name even if they are not Authority)
members shall be liable as a partner a) Adoption of child
2. All partners shall be liable for contractual obligations of the b) Appointment of general abandonment
partnership with their property, after all partnership assets have c) Judicial declaration of abandonment
been exhausted d) Final judgment divesting parental authority
a. Pro rata e) Judicial declaration of absence or incapacity or person exercising
b. Subsidiary parental authority
3. Admission or representation made by any partner concerning
partnership affairs within scope of his authority is evidence against OBLIGATIONS AND CONTRACTS
the partnership
4. Notice to partner of any matter relating to partnership affairs OBLIGATIONS
operates as notice to partnership except in case of fraud:
a.Knowledge of partner acting in the particular matter 1. An obligation is a juridical necessity to give, to do or not to do (Art. 1156,
acquired while a partner NCC)
b. Knowledge of the partner acting in the particular matter
then present to his mind 2. Sources of Obligations (Art. 1157, NCC)
c. Knowledge of any other partner who reasonably could and a) Law - must be expressly or impliedly set forth, cannot be presumed
should have communicated it to the acting partner b) Contracts - must be complied with in good faith because it is the
5. Partners and the partnership are solidary liable to 3rd persons for “law” between parties
the partner's tort or breach of trust c) Quasi-contracts- juridical relation resulting from lawful, voluntary
6. Liability of incoming partner is limited to: and unilateral act, and which has for its purpose the payment of
a.His share in the partnership property for existing indemnity to prevent unjust enrichment
obligations Kinds:
b. His separate property for subsequent obligations a. Negotiorum gestio- unauthorized management; This takes
7. Creditors of partnership preferred in partnership property & may place when a person voluntarily takes charge of another’s
attach partner's share in partnership assets abandoned business or property without the owner’s
8. Every partner is an agent of the partnership authority
b. Solutio indebiti- undue payment ; This takes place when
1. POWER OF PARTNER AS AGENT OF PARTNERSHIP something is received when there is no right to demand it,
and it was unduly delivered thru mistake
Acts for carrying on in the usual way the Every partner is an agent and may d) Acts or omissions punished by law; and
business of the partnership execute acts with binding effect e) Quasi-delicts
even if he has no authority
Except: when 3rd person has 3. Three types of obligations.--
knowledge of lack of authority 1) obligation to give
1. Act w/c is not apparently for the Does not bind partnership unless 2) obligation to do; and
carrying of business in the usual way authorized by other partners 3) obligation not to do.
8. RELATIONS CREATED BY A CONTRACT OF PARTNERSHIP b. Solidary obligations – one in w/c the debtor is liable for the entire
a. Relations among the partners themselves obligation or each creditor is entitled to demand the whole obligation.
b. Relations of the partners with the partnership • There is solidary obligation only in three cases:
c. Relations of the partnership with 3rd persons with whom it contracts (1) When the obligation expressly so states;
d. Relations of the partners with such 3rd persons (2) When the law (e.g. liability of joint tortfeasors) or
(3) When the nature of the obligation requires solidarity.
Obligations of the Partners • An instrument w/c begins w/ "I," "WE" or "Either of us"
promise to pay, when signed by two or more persons, makes
A. OBLIGATIONS OF THE PARTNERS AMONG THEMSELVES them solidarily liable.
a) Obligations with respect to contribution of property: • Characteristics of Active Solidarity:
1. To contribute at the beginning of the partnership or at the - Since it is a reciprocal agency, the death of a solidary
stipulated time the money, property or industry which he may have creditor does not transmit the solidarity to each of his
promised to contribute heirs but to all of them taken together (IV Tolentino)
2. To answer for eviction in case the partnership is deprived of the - Each creditor represents others in the act of requiring
determinate property contributed payment, and in all other acts w/c tend to secure the
3. To answer to the partnership for the fruits of the property the credit or make it more advantageous. Hence, if he
contribution of which he delayed, from the date they should have receives only a partial payment, he must divide it among
been contributed up to the time of actual delivery the other creditors. He can interrupt the period of
4. To preserve said property with the diligence of a good father of a prescription or render the debtor in default, for the benefit
family pending delivery to partnership of all other creditors
5. To indemnify partnership for any damage caused to it by the - A credit once paid is shared equally among the creditors
retention of the same or by the delay in its contribution unless a different intention appears
- Debtor may pay any of the creditors but if any demand,
b) Effect of Failure to contribute property promised: judicial or extrajudicial is made on him, he must pay only
1. Partners becomes ipso jure a debtor of the partnership even in the to one demanding payment (Art. 1214)
absence of any demand
Answer: The revocation is not valid. The power of attorney given to buyer is C. Who may be the payee?
irrevocable because it is coupled with an interest: the agency is the means of a. The obligee proper (Articles 1240, 1626.)
fulfilling the obligation of the buyer to pay the price of the land (Article 1927, b. His successor or transferee (Art. 1240.)
CC). In other words, a bilateral contract (contract to buy and sell the land) is c. His agent (ibid.)
dependent on the agency. d. Any third person subject to the following qualifications:
i. Provided it redounded to the obligee's benefit and only to the
PARTNERSHIP extent of such benefit (Art. 1241, par. 2.)
ii. If it falls under Art. 1241, par. 2 nos. 1, 2 & 3, the benefit is
General Provisions deemed to be total.
e. Anyone in possession of the credit (Art. 1242.)
1. PARTNERSHIP - by the contract of partnership, 2 or more persons bind
themselves to contribute money, property or industry to a common fund, with Note: In all these five (5) cases, it is required that the debt should not
the intention of dividing the profits among themselves have been garnished. (Art. 1243.)
d) Can the heirs continue the agency? Bar Question (2002). Stockton is a stockholder of Core Corp. He desires to
i. General Rule: agency calls for personal services on the part of the sell his shares in Core Corp. in view of a court suit that Core Corp. has filed
agent; rights & obligations intransmissible against him for damages in the amount of P10 million, plus attorney’s fees of P1
ii. Exceptions: million, as a result of statements published by Stockton which are allegedly
1. agency by operation of law, or a presumed or tacit agency defamatory because it was calculated to injure and damage the corporation’s
2. agency is coupled with an interest in the SM of the agency reputation and goodwill.
(ex. power of sale in a mortgage) The articles of incorporation of Core Corp. provide for a right of first refusal in
favor of the corporation. Accordingly, Stockton gave written notice to the
e) Revocation – termination of the agency by the subsequent act of the principal corporation of his offer to sell his shares of P10 million. The response of Core
Corp. was an acceptance of the offer in the exercise of its rights of first refusal,
Renunciation/Withdrawal - termination of the agency by the subsequent act of offering for the purpose payment in form of compensation or set-off against the
the agent amount of damages it is claiming against him, exclusive of the claim for
attorney’s fees. Stockton rejected the offer of the corporation, arguing that
compensation between the value of the shares and the amount of damages
demanded by the corporation cannot legally take effect.
8. Agent’s Right of Retention: specific (only for those goods connected with the Bar Question (1998). 1. Define compensation as a mode of extinguishing an
agency) and until the principal effects the reimbursement and pays the obligation, and distinguish it from payment.
indemnity 2. X, who has a savings deposit with Y Bank in the sum of P1,000,000.00, incurs
a loan obligation with the said Bank in the sum of P800,000.00 which has
9. Principal’s Liability for Expenses: become due. When X tries to withdraw his deposit, Y Bank allows only
a) General Rule: principal liable for the expenses incurred by the agent P200,000.00 to be withdrawn, less service charges, claiming that compensation
b) Exceptions: has extinguished its obligation under the savings account to the concurrent
i. If the agent acted in contravention of the principal's amount of X’s debt. X contends that compensation is improper when one of the
instructions, unless principal derives benefits from the debts, as here, arises from a contract of deposit. Assuming that the promissory
contract note signed by X to evidence the loan does not provide for compensation
ii. When the expenses were due to the fault of the agent between said loan and his savings deposit, who is correct?
iii. When the agent incurred them with knowledge that an
unfavorable result would ensure, if the principal was not Answers:
aware thereof 1. Compensation is a mode of extinguishing to the concurrent amount, the
iv. When it was stipulated that the expenses would be borne obligations of those persons who in their own right are reciprocally debtors
by the agent, or that the latter would be allowed only a and creditors of each other (Tolentino, 1991 ed., p. 365, citing 2 Castan 560
certain sum and Francia v. IAC, 162 SCRA 753). It involves the simultaneous balancing
of two obligations in order to extinguish them to the extent in which the
10. Agency by Estoppel: there is no agency at all, and the alleged agent seemed amount of one is covered by that of the other. (De Leon, 1992 ed., p. 221,
to have apparent or ostensible, although not real authority to represent another citing 8 Manresa, 401).
Payment means not only the delivery of money but also performance of an
a) Who can be under estoppel to deny agency? obligation (Article 1232, Civil Code). In payment, capacity to dispose of the
i. Estoppel of Agent- one professing to act as agent estopped to deny thing paid and capacity to receive payment are required for debtor and
his agency both as against his asserted principal and the third creditor, respectively; in compensation, such capacity is not necessary,
persons interested in the transaction in which he is engaged because the compensation operates by law and not by the acts of the
ii. Estoppel by the Principal parties. In payment, the performance must be complete; while in
a. As to agent – one knowing another is acting as his agent compensation there may be partial extinguishment of an obligation.
and fails to repudiate his acts, or accept the benefits of (Tolentino, supra).
them, will be estopped to deny the agency as against such 2. Y Bank is correct. Art. 1287, Civil Code, does not apply. All the requisites of
other Art. 1279, Civil Code, are present. In the case of Gullas v. PNB (62 Phil.
b. As to sub-agent – to estop the principal from denying his 519), the Supreme Court held: “The Civil Code contains provisions regarding
liability to a third person, he must have known or be compensation (set off) and deposit. These portions of Philippine law provide
charged with knowledge of the transaction and the terms that compensation shall take place when two persons are reciprocally
of the agreement between the agent and sub-agent creditor and debtor of each other. In this connection, it has been held that
c. As to third persons – one who knows that another is the relation existing between a depositor and a bank is that of creditor and
acting as his agent or permitted another to appear as his debtor. xxx As a general rule, a bank has a right of set off of the deposits in
agent, to the injury of third persons who have dealt with its hands for the payment of any indebtedness to it on the part of a
the apparent agent as such in good faith and in the depositor.” Hence, compensation took place between the mutual obligations
exercise of reasonable prudence, is estopped to deny the of X and Y Bank.
agency
iii. Estoppel of Third Persons – a third person, having dealt with one
as an agent may be estopped to deny the agency as against the
principal, agent or 3rd persons in interest
1. Contracts – Meeting of minds bet 2 parties whereby one binds himself with 7. Commission Agent: One whose business is to receive and sell goods for a
respect to the other to give something or render some service commission and who is entrusted by the principal with the possession of goods
to be sold, and usually selling in his own name
2. Principal Characteristics:
a. Autonomy of wills – parties may stipulate anything as long as not a) Distinction Between Ordinary Agent & Commission Agent
illegal, immoral, etc.
b. Mutuality – performance or validity binds both parties; not left to Ordinary agent Commission agent
will of one of parties acts for and in behalf of his principal act on his own name or in that his
c. Obligatory Force – parties are bound from perfection of contract principal
d. Relativity – binding only between the parties, their assigns, heirs; Need not have possession of principal’s must be in possession of the goods
strangers cannot demand enforcement. Exception to relativity: goods
Accion pauliana, Accion directa, Stipulation pour autrui
b) Distinction Between Commission Agent & Broker
3. Requisites for stipulation pour autrui:
1) Parties must have clearly and deliberately conferred a favor
Commission agent Broker
upon a 3rd person
2) The stipulation in favor of a 3rd person should be a part of, not engaged in the purchase and sale for a
no custody or possession of the thing
the whole contract principal of personal property which has
he disposes; merely a go-between, an
3) That the favorable stipulation should not be conditioned or to be placed in his possession and
intermediary between the sellers and
compensated by any kind of obligation whatsoever disposal
the buyer
4) Neither of the contracting parties bears the legal
representation or authorization of 3rd party Has a relation with principal, buyers or maintains no relation with the thing
5) The third person communicates his acceptance before sellers, and property which is the object which he purchases or sells
revocation by the original parties of the transaction
8. Reformation of Contracts – remedy to conform to real intention of parties 2. Responsibility of 2 or More Agents Appointed Simultaneously:
due to mistake, fraud, inequitable conduct, accident. a) General Rule: liable jointly
REQUISITES: b) Exception: solidarity has been expressly stipulated; each of the
a. there is a written instrument agents becomes solidarily liable for (1) the non-fulfillment of the
b. there is meeting of minds agency; of for (2) the fault or negligence of his fellow agent
c. true intention not expressed in instrument c) Exception to the exception: when one of the other agent/s acts
d. clear & convincing proof beyond the scope of his authority – innocent agent is NOT liable
e. facts put in issue in pleadings
NOTE however that if two or more persons have appointed an agent for a
Note: Action prescribes 10 years from date of execution of instrument. common transaction or undertaking, they shall be solidarily liable to the agent for
all the consequences of the agency. Any of them also revoke the agency.
Remedy not available for:
1) simple donation inter vivos 3. Broker: negotiate contracts relative to property in behalf of others and for a
2) wills compensation or fee.
3) when real agreement is void
4) in cases of estoppel When Broker Entitled to Compensation: whenever he brings to his principal a
5) when a party has already brought suit to enforce it party who is able and willing to take the property, and enter into a valid contract
upon the terms named by the principal, although the particulars may be
arranged and the matter negotiated and completed between the principal and
Page 64 of 230 Page 169 of 230
Obligations of the Agent to the Principal 9. Defective contracts:
Bar Question (2000). Regina has been leasing foreshore land from the Bureau 5. Capacity of the Parties:
of Fisheries and Aquatic Resources for the past 15 years. Recently, she learned a) The principal may be a natural or a juridical person. And he must
that Jorge was able to obtain a free patent from the Bureau of Agriculture, be capacitated. The rule is if a person is capacitated to act for
covering the same land, on the basis of a certification by the District Forester himself or his own right, he can act through an agent.
that the same is already “alienable and disposable”, Moreover, Jorge had already b) As to the agent, insofar as the third persons are concerned, it is
registered the patent with the Register of Deeds of the province, and he was enough that the principal is capacitated. But insofar as his
issued an Original Certificate of Title for the same. Regina filed an action for obligations to his principal are concerned, the agent must be able
annulment of Jorge’s title on the ground that it was obtained fraudulently. Will to bind himself.
the action prosper?
6. Essential Elements:
Answer: An action for the annulment of Jorge’s Original Certificate of Title will a) consent of the parties to establish the relationship;
prosper on the following grounds: b) object of the contract is the execution of a juridical act in relation
1) Under Chapter IX of C.A. No. 141, otherwise known as the Public to third persons;
Land Act, foreshore lands are disposable for residential, commercial, industrial, c) agent acts as a representative and not for himself; and
d) agent acts within the scope of his authority
a. Those credits which enjoy preference with respect to specific movable, 1. Accession – owner of thing becomes owner of everything it may produce or
excluded all others to the extent of the value of the personal property to which those which may be incorporated or united thereto
the preference refers (Article 2246). 1. principle of justice
2. accessory follows the principal
b. If there are two or more credits with respect to the same specific
movable property, they shall be satisfied pro-rata, after the payment of duties, 2. Accession continua – accession to products of the thing
taxes, and fees due the State or any subdivision thereof (Article 2247). General Rule: Owner has the right to all natural, industrial & civil fruits
Exception: possession in good faith by another, usufruct, lease,
c. Those credits which enjoy preference in relation to specific real property antichresis
or real rights, exclude all others to the extent of the value of the immovable or
real right to which the preference refers (Article 8). 3. IMMOVABLES –
d If there are two or more credits with respect to the same specific real Accession Natural (Accretion)
property or real rights, they shall be satisfied pro rata, after the payment of the a) Alluvion - owner of lands adjoining banks of river belongs the accretion
taxes and assessments upon the immovable property or real right (Article 2249). gradually received from effects of the water's current
Requisites:
e The excess, if any, after the payment of the credits which enjoy 1. deposit is gradual & imperceptible
preference with respect to specific property, real or personal, shall be added to 2. made through effects of current of water
the free property which the debtor may have, for the payment of the other 3. land where accretion takes place is adjacent to banks of
credits (Article 2250). river
F. Bad faith on both builder & owner – in pari delicto (no cause of 6. Foreclosure of Chattel Mortgage
action against each other) a) Public Sale – if the mortgagor defaults in the payment of the
secured debt or otherwise fails to comply with the conditions of the
G. Right of 3rd person who owns materials mortgage
1. Right to be indemnified for value of materials irrespective of b) Private Sale – if there is an express stipulation in the contract.
good faith or bad faith of builder or owner; if builder has no
property, owner is subsidiarily liable 7. Right of Mortgagee to Recover Deficiency
2. When builder is in bad faith & owner in good faith & owner a) The creditor may maintain an action for the deficiency although the
compel builder to remove improvements, owner is not Chattel Mortgage Law is silent on this point
subsidiarily liable b) The action may be sought within ten (10) years from the time the
3. When 3rd person is paid by builder, builder may demand from cause of action accrues.
landowner the value of labor & materials c) If the chattel mortgage is constituted, whether by the debtor-
vendee or a third person, as security for the purchase of personal
Bar Question (1999). a) Because of confusion as to the boundaries of the property payable in installments, no deficiency judgment can be
adjoining lots that they bought from the same subdivision company, X asked and any agreement to the contrary shall be void (Article
constructed a house on the adjoining lot of Y in the honest belief that it is the 1484).
land that he bought from the subdivision company. What are the respective
rights of X and Y with respect to X’s house? Bar Question (1997). On order to secure a bank loan, XYZ Corporation
surrendered its deposit certificate, with a maturity date of 1 September 1997 to
Answer: The rights of Y, as owner of the lot, and X, as builder of a house the bank. XYZ defaulted on the due repayment of the loan, prompting the bank
thereon, are governed by Art. 448 of the Civil Code which grants to Y the right to to encash the deposit certificate. XYZ questioned the above action taken by the
choose between two remedies: (a) appropriate the house by indemnifying X for bank as being a case of pactum commissorium. The bank disagrees. What is
its value plus whatever necessary expenses the latter may have incurred for the your opinion?
preservation of the land, or (b) compel X to buy the land if the price of the land
is not considerably more than the value of the house. If it is, then X cannot be Answer: We submit that there is no pactum commissorium here. Deposits of
obliged to buy the land but he shall pay reasonable rent, and in case of money in banks and similar institutions are governed by the provisions on simple
disagreement, the court shall fix the terms of the lease. loans (Art1980, Civil Code). The relationship between the depositor and a bank
is one of creditor and debtor. Basically this is a matter of compensation as all
the elements of compensation are present in this case. (BPI vs. CA, 232 SCRA
302).
Page 76 of 230 Page 157 of 230
a) To bring an action for specific performance b) Suppose X was in good faith but Y knew that X was constructing on his (Y’s)
b) To petition for the sale of the real property as in a foreclosure of land but simply kept quiet about it, thinking perhaps that he could get X’s house
mortgages under Rule 68 of the Rules of Court. The parties, later. What are the respective rights of the parties over X’s house in this case?
however, may agree on an extrajudicial foreclosure in the same
manner as they are allowed in contracts of mortgage and pledge Answer: Since the lot owner Y is deemed to be in bad faith (Art. 453), X as the
party in good faith may (a) remove the house and demand indemnification for
Chattel Mortgage damages suffered by him, or (b) demand payment of the value of the house plus
reparation for damages (Art 447, in relation to Art. 454). Y continues as owner of
1. A chattel mortgage is: the lot and becomes, under the second option, owner of the house as well, after
a) an accessory contract because it is for the purpose of securing the he pays the sums demanded.
performance of a principal obligation;
b) a formal contract because for its validity, registration in the Chattel 4. MOVABLES –
Mortgage Register is indispensable.
c) a unilateral contract because it produces only obligations on the A. Conjunction / adjunction – 2 movable things which belong to
part of the creditor to free the thing from the encumbrance upon different owners are united to form a single object
fulfillment of the obligation.
a) Test to determine w/c one is the principal:
2. Subject Matter of Chattel Mortgage i. that to w/c the other intended to be united
a) Shares of stock in a corporation as ornament or for its use of perfection
b) Interest in business ii. value
c) Machinery and house of mixed materials treated by parties as iii. volume
personal property and no innocent third person will be prejudiced
thereby (Makati Leasing and Finance Corporation vs. Weaver b) Rights
Textile Mills, Inc., 122 SCRA 296 [1983]. i. If both are in good faith – owner of principal
d) Vessels, the mortgage of which have been recorded with the acquired the accessory with indemnification
Philippine Coast Guard in order to be effective as to third persons ii. If both are in good faith – may separate them if
e) Motor vehicles, the mortgage of which had been registered both no injury will be caused; if value of accessory is
with the Land Transportation Commission and the Chattel Mortgage greater than principal, owner of accessory may
Registry is order to affect third persons demand separation even if damages will be
f) House which is intended to be demolished caused to the principal (expenses to be borne by
g) Growing crops and large cattle (section 7, paragraphs 2 and 3, Act one who caused the conjunction)
No. 1508) iii. If owner of accessory is in bad faith – owner of
accessory with damages to principal
3. Creation of Chattel Mortgage iv. If owner of principal is in bad faith – owner of
a) The registration of the personal property in the Chattel Mortgage accessory shall have option of principal paying
Register as security for the performance of an obligation. value of accessory or removal of accessory
b) Under the Chattel Mortgage Law, if the property as situated in a despite destruction of principal
different province from that in which the mortgagor resides, the v. Owner of accessory or principal has right to
registration must be in both registers (Section 4, Act No. 1508); indemnity when thing adjuncts w/o his consent –
otherwise, the chattel mortgage is void. may demand that a thing equal is kind, value and
c) It has been ruled however that if the chattel mortgage is not price
recorded, it is nevertheless binding between the parties. (Filipinas
Marble Corporation vs. Intermediate Appellate Court, 142 SCRA 180 B. Specification – One employs the materials of another in whole or in
[1986] part on order to make a thing of a different kind; transformation
Quieting of Title 3. The fruits of the immovable which is the object of the antichresis must be
appraised at their actual market value at the time of the application.
1. Action to quiet title
a) put end to vexatious litigation in respect to property involved; 4. The property delivered stands as a security for the payment of the obligation
plaintiff asserts his own estate & generally declares that of the debtor in antichresis. Hence, the debtor cannot demand its return until
defendant’s claim is w/o foundation the debt is totally paid.
b) When proper:
1. contract has been extinguished or terminated
2. contract has prescribed 5. Obligations of Antichretic Creditor
3. remove cloud a) pay the taxes and charges upon the estate.
b) apply the fruits, after receiving them to the interest, if owing, and
2. Action to remove cloud thereafter to the principal (Article 2132) in accordance with the
a) intended to procure cancellation, delivery, release of an instrument, provisions of Article 2133 or 2138
encumbrance, or claim constituting a on plaintiff’s title which may
be used to injure or vex him in the enjoyment of his title 6. Remedy of Creditor in Case of Default
Co-Ownership
4. In order that a mortgage may be validly constituted, it must appear in a public 1. Co-ownership
document duly recorded in the Registry of Property a) plurality of subjects – many owners
NOTE: If the instrument of mortgage is not recorded, the mortgage is b) unity of material (indivision) of object of ownership
nevertheless binding between the parties. c) recognition of ideal shares
5. A mortgage creates a real right, a lien inseparable from the property Sources:
mortgaged, which is enforceable against the whole world. Until discharged, it i. Law
follows the property wherever it goes and subsists notwithstanding changes of ii. Contracts
ownership. iii. succession
iv. fortuitous event/chance – commixtion
6. Effect of Mortgage v. occupancy – 2 persons catch a wild animal
a) The only right of a mortgagee in case of non-payment of a debt
secured by real mortgage would be to foreclose the mortgage and Distinguished from partnership:
have the encumbered property sold to satisfy the outstanding • partnership created only by agreement; co-ownership has many
indebtedness. sources
b) The mortgagor’s default does not operate to vest in the mortgagee • purpose of partnership is to obtain profit; co-ownership is collective
the ownership of the encumbered property. enjoyment of a thing
• in partnership there is juridical personality distinct from individuals,
7. Extent of Mortgage none in co-ownership
• partnership can be created for more than 10 years, not in co-
General Rule: Not limited to the property itself but also extends to all its ownership
accessions, improvements, growing fruits and rents or income (see Article 2102) • partners cannot transfer rights w/o consent of other co-partners, not
as well as to the proceeds of insurance should the property be destroyed of the co-ownership
expropriation value of the property should it be expropriated. • partnership extinguished when partner dies, not in co-ownership
• distribution of profits in partnerships may be stipulated, this is not
8. Foreclosure of Mortgages flexible in co-ownership but depends on ideal share/interest
• Judicial foreclosure governed by Rule 68 of the Rules of Court.
2. Rights of co-owners
NOTE: 5. Just Title (True and Valid) – must be proved & never presumed
1. General Rule: Bailee is not liable for ordinary wear and tear due to use of the a) Titulo Colorado
thing loaned. b) Titulo Putativo
Exceptions: a) If he is guilty of fault or negligence
9. Rules in Computation of Period: 4. borrower must return the same 4. borrower need only pay the same
• Present possessor may tack his possession to that of his grantor or thing loaned amount of the same kind and
predecessor in interest quality
• Present possessor presumed to be in continuous possession I
intervening time unless contrary is proved 5. may involved real or personal 5. involves only personal property
• First day excluded, last day included property
10. Tacking Period 6. loan for use or temporary 6. loan for consumption
- there must be privity between previous & present possessor possession
- possible when there is succession of rights
- if character of possession different: 7. right to demand the return of the 7. no right to demand return before
v predecessor in bad faith or possessor in good faith – use thing loaned before expiration of the lapse of the term agreed
extraordinary prescription term in case of urgent need upon
Bar Question (1998). In 1965, Renren bought from Robyn a parcel of 8. loss is shouldered by bailor since 8. borrower suffers the loss even if
registered land evidenced by a duly executed deed of sale. The owner presented he is the owner the loss is caused exclusively by a
the deed of sale and the owner’s certificate of title to the Register of Deeds. The fortuitous event
Bar Question (2000). In an action brought to collect a sum of money based on 2. Effect of Assignment
a surety agreement, the defense of laches was raised as the claim was filed a) lack of knowledge or consent of debtor not essential for validity but
more than seven years from the maturity of the obligation. However, the action has legal effects
was brought within the ten-year prescriptive period provided by law wherein b) assignment of rights made w/o knowledge of debtor – debtor may
actions based on written contracts can be instituted. Will the defense prosper? set up against assignee the compensation w/c would pertain to him
Reason. against assignor of all credits prior to assignment and of later ones
until he had knowledge of the assignment
Answer: No, the defense will not prosper. The problem did not give facts from c) debtor has consented to assignment – cannot set up compensation
which laches may be inferred. Mere delay in filing an action, standing alone, does unless assignor was notified by debtor that he reserved his right to
not constitute laches (Agra v. PNB, 309 SCRA 509). the compensation
d) debtor has knowledge but no consent - may still set up
Donation compensation of debts previous to assignment but not the
subsequent ones.
1. Characteristics:
a) Unilateral – obligation imposed on the donor Bulk Sales Law
b) Consensual – perfected at time donor knows of acceptance
1. Rationale: Protect creditor of merchant stores
2. Requisites of Donation:
a) Reduction in patrimony of donor 2. Three types of transactions covered:
b) Increase in patrimony of donee a) Sale of goods other than in ordinary course of business
c) Intent to do act of liberality b) Sale of all or substantially all of business
d) Donor must be owner of property donated c) Sale of all or substantially all of fixtures & equipments
Answer: Assuming the land is a residential subdivision project under P.D. No. Reservation Civil aspect of the quasi-delict is Civil aspect is
957 (The Subdivision and Condominium Buyers Protective Decree), DEVLAND’S Requirement impliedly instituted with criminal Impliedly
action is not proper since under Section 23 of the said law, no installment action, but under 2000 Crimpro instituted with
payment shall be forfeited to the owner/developer when the buyer, after due Rules it is independent and criminal action
notice, desists from further payment due to failure of the owner-developer to separate
develop the subdivision according to the approved plans and within the time limit
for complying with the same. Effect of judgement of Not a bar to recover civil Not a bar to
acquittal in a criminal damages EXCEPT when recover civil
b) Discuss the rights of Bernie under the circumstances. case involving same judgement pronounces that the damages
act/omission negligence from which damage
arise is non-existent
Page 132 of 230 Page 101 of 230
5. What must be proved 2. When is the law applicable: Sale of movables on installment
a) Negligence - In action for culpa aquiliana, plaintiff must prove a) Sale on installment: payment by several partial payments in small
negligence of defendant amount
Exception: b) Rationale of the law: Buyer is lulled into thinking that he could
1. In cases where negligence is presumed or imputed by law - afford because of small amounts per installment and at the same
this is only rebuttable/presumption juris tantum time remedy abuse of commercial houses
2. Principle of res ipsa loquitur (the thing speaks for itself) - c) Nature of remedies: alternative & not cumulative
grounded on the difficulty in proving thru competent evidence, d) Coverage: sale and financing transaction & contracts of lease with
public policy considerations option to purchase
b) Damage/injury e) Action : Judicial and Extrajudicial
c) Causal connection between negligence and damage (to be
actionable) -Defendant’s negligence must be the proximate cause of the Sale of Immovables (In General)
injury sustained by the plaintiff to enable plaintiff to recover. Thus, if
plaintiff’s own conduct is the cause of the injury there can be no 1. Remedies of Seller
recovery. a) Anticipatory breach
Seller has reasonable grounds to fear loss of immovable sold & its
If plaintiff's negligence is only contributory – he is considered partly price – sue for RESCISSION
responsible only, may still recover from defendant but must be reduced b) Non – payment of price-RESCISSION
by the courts in proportion to his own negligence
2. Remedies of Buyer
Concept of proximate cause – the adequate and efficient cause which in a) Disturbed in possession or with reasonable grounds to fear disturbance
the natural order of events and under the particular circumstances – SUSPEND PAYMENT
surrounding the case, would naturally produce the event b) In case of subdivision or condo projects: If real estate developer fails to
comply with obligation according to approved plan:
6. Defenses i. RESCIND
a) CONTRIBUTORY NEGLIGENCE - the theory here is that the plaintiff was ii. SUSPEND PAYMENT UNTIL SELLER COMPLIES
also negligent together with the defendant; to constitute a defense,
proximate cause of injury/damage must be the negligence of defendant Sale Of Immovables (By Installment)
b) CONCURRENT NEGLIGENCE - the theory here is that both parties are
equally negligent; the courts will leave them as they are; there can be 1. Law applicable
no recovery • Article 1592, CC – Applies only to contract of sale
c) DOCTRINE OF LAST CLEAR CHANCE - even though a person’s own acts • Maceda Law – applies to COS & CTS & Financing
may have placed him in a position of peril and an injury results, the
injured is entitled to recover if the defendant thru the exercise of 2. Maceda Law (RA 6552)
reasonable care and prudence might have avoided injurious • Coverage: REAL ESTATE – defined space vs. CONDO – not defined
consequences to the plaintiff. space (w/ common areas)
1. contract of sale
• This defense is available only in an action by the driver or 2. contract to sell
owner of one vehicle against the driver or owner of the other 3. financing transactions
vehicle involved; cannot be invoked by a common carrier • Excluded:
against a passenger in an action for breach of contract of 1. industrial
carriage 2. commercial
• Elements: 3. sale to tenants under agrarian laws
1. plaintiff was in a position of danger by his own • Rights Granted to Buyers:
negligence 1. Buyer paid at least 2 years installment
12. Who Bears Expenses of Delivery – Seller Answer: The school, its administrators, and teachers have special parental
authority and responsibility over the minor child while under their supervision,
13. Sale by Description/Sample: instruction or custody (Article 218, FC). They are principally and solidarily liable
There is acceptance BY BUYER when: for the damages caused by the acts or omissions of the unemancipated minor
a. He intimates to seller that he has accepted, unless they exercised the proper diligence required under the circumstances
b. Thing delivered & he does any act inconsistent with ownership of (Article 219, FC). In the problem, the teacher and the school authorities are
seller, OR liable for the blindness of the victim, because the student who caused it was
c. He retains without intimating to seller that he has rejected. under their special parental authority and they were negligent. They were
negligent because they were chatting in the corridor during the class period
14. Sale of Goods on installment: when the stabbing incident occurred. The incident could have been prevented
a. Goods must be delivered in full, except when stipulated had the teacher been inside the classroom at that time. The guilty boy’s parents
b. When not examined by buyer – not accepted until examined or at are subsidiarily liable under Article 219 of the Family Code.
least had reasonable time to examine
8. Persons Expressly Made Liable By Law (even without fault)
15. Acceptance of goods in general, absent contrary express stipulation, does not
discharge seller from liability in case of breach of warranties (unless no notice or a. POSSESSOR OF AN ANIMAL OR WHOEVER MAKES USE OF THEM EVEN
failure to give it within reasonable time) IF THE ANIMAL IS LOST OR ESCAPED
Except:
16. When buyer has a right to refuse goods, no need to return; shall be 1. Force majeure
considered as depositary; unless there is stipulation to the contrary 2. Fault of the injured/damaged person
Double Sales b. OWNER OF MOTOR VEHICLE - In motor vehicle mishap, the owner is
solidarily
1. General Rule: FIRST IN TIME, PRIORITY IN RIGHT liable with the driver if:
1. he was in the vehicle, and
1. Form not important in validity of sale - Sale being consensual, may be oral c. REMEDIES AGAINST PUBLIC NUISANCES
or written, perfected by mere consent as to price & subject matter 1. Prosecution under the RPC or any local ordinance
2. Civil action
2. Particular form is required under the statute of frauds: 3. Abatement, without judicial proceeding
a. valid & binding between parties
b. not binding to 3rd persons only d. Who May Avail of Remedies
1. Public officers
3. When form is important for validity; exception by specific provision of law: 2. Private persons - if nuisance is specially injurious to
a. power to sell a piece of land granted to an agent – otherwise VOID himself; the ff. steps must be made:
b. sale of large cattle; must also be registered with Municipal treasurer – i. demand be first made upon owner or possessor
otherwise VOID of the property to abate the nuisance
c. sale of land by non-Christian if not approved by Governor – VOID ii. that such demand has been rejected
iii. that the abatement be approved by the district
4. When form is important for enforceability (STATUTE OF FRAUDS) health officer and executed with the assistance of
a. Sale to be performed 1 year after local police
b. Agreement to sell things with value of 500 and up iv. that the value of destruction does not exceed
c. Sale of real property or any interest therein P3,000
Exceptions:
i. When there is a note or memorandum in writing & subscribed to by e. Remedies Against Private Nuisances
party or his agent (contains essential terms of the contract) 1. Civil action
ii. When there has been partial performance/execution (seller delivers with 2. Abatement, without judicial proceedings
intent to transfer title/receives price)
iii. when there has been failure to object to presentation of evidence (oral) f. Doctrine of Attractive Nuisance
- constitutes waiver - A class of cases within the general rule that one is liable for
the injury resulting to another from failure to exercise the
Formation, Perfection and Consummation of a Contract of degree of care commiserate with the circumstances
Sale - The attractiveness of the premises or of the dangerous
instrumentality to children of tender years is to be considered
1. Three Stages in the Life of a Contract of Sale as an implied invitation, which takes the children who accepted
a) Policitacion/Negotiation Stage – offer is floated, acceptance is floated it out of the category of a trespasser and puts them in the
but they do not meet; the time when parties indicate their interest but category of invitees, towards whom the owner of the premises
no concurrence of offer & acceptance or instrumentality owes the duty of ordinary care.
b) Perfection – concurrence of all requisites; meeting of the minds
c) Consummation – parties perform their respective undertakings Bar Question (2006). A drug lord and his family reside in a small bungalow
where they sell shabu and other prohibited drugs. When the police found the
2. Option Contract – Characteristics: illegal trade, they immediately demolished the house because according to them,
a. not the contract of sale by itself; distinct
3. It need not also be alleged, because it is merely incidental or dependent upon Moral Damages
what the court may award as compensatory damages.
1. “PBMF-MWSS”
4. When recovered a. Physical suffering
a. Art. 2230. In criminal offenses, exemplary damages as a part of the b. Besmirched reputation
civil liability may be imposed when the crime was committed with c. Mental anguish
one or more aggravating circumstances. Such damages are d. Fright
separate and distinct from fines and shall be paid to the offended e. Moral shock
party. f. Wounded feelings
b. Art. 2231. In quasi-delicts, exemplary damages may be granted if g. Social humiliation
the defendant acted with gross negligence. h. Serious anxiety
c. Art. 2232. In contracts and quasi-contracts, the court may award
exemplary damages if the defendant acted in a wanton, fraudulent, 2. Sentimental value of real or personal property may be considered in
reckless, oppressive, or malevolent manner. adjudicating moral damages
5. Exemplary damages cannot be recovered as a matter of right; the court will 3. The social and economic/financial standing of the offender and the offended
decide whether or not they should be adjudicated. party should be taken into consideration in the computation of moral damages
6. A stipulation whereby exemplary damages are renounced in advance shall be 4. Moral damages is awarded only to enable the injured party to obtain means,
null and void. diversions or amusements that will serve to alleviate the moral suffering he has
SALES undergone, by reason of defendant's culpable action and not intended to enrich
a complainant at the expense of defendant.
1. Contract of Sale – One of the contracting parties obligates himself to transfer
the ownership of and to deliver a determinate thing, and the other to pay 5. IN WHAT CASES MAY MORAL DAMAGES BE RECOVERED (enumeration not
therefor a price certain in money or its equivalent. A contract of sale may be exclusive):
absolute or conditional. a. Criminal offense resulting in physical injuries
b. Quasi-delicts causing physical injuries
2. Characteristics of Contract of Sale: c. Seduction, abduction, rape or other acts of lasciviousness
a) Nominate - law gave it a name d. Adultery and concubinage
b) Principal - can stand on its own; unlike accessory contract e. Illegal or arbitrary detention or arrest
c) Bilateral - imposes obligation on both parties f. Illegal search
d) Onerous - with valuable consideration g. Libel, slander or other form of defamation
e) Commutative - equal value is exchanged for equal value h. Malicious prosecution
f) Consensual - meeting of minds makes a perfect contract of sale but i. Acts mentioned in art 309 of the RPC relating to disrespect of the
needs delivery to consummate. dead and interference with funeral
g) Title & not a mode - title gives rise to an obligation to transfer; it is a j. Acts and actions referred to in arts 21, 26, 27, 28, 29, 30, 32, 34
mode w/c actually transfers ownership and 35
k. The parents of the female seduced, abducted, raped, or abused
3. Distinguished from other Contracts: l. Spouse, descendants, ascendants and brother and sisters for acts
a) Donation mentioned in art 309
i. donation is gratuitous; sale is onerous m. Art 2220 - in cases of willful injury to property or breaches of
ii. donation is formal contract; sale is consensual contract where defendant acted fraudulently or in bad faith
Answer: FX Airlines committed breach of contract when it upgraded DT and MT, 2. ELEMENTS:
over their objections, to First Class because they had contracted for Business a. Plaintiff has a right
Class passage. However, although there is a breach of contract, DT and MT are b. Right of plaintiff is violated
entitled to actual damages only for such pecuniary losses suffered by them as a c. Purpose is not to identify but vindicate or recognize right violated
result of such breach. There seems to be no showing that they incurred such
pecuniary loss. There is no showing that the pain in DT’s arm and wrist resulted 3. RULE: It cannot co-exist with compensatory damages. An award of nominal
directly from the carrier’s acts complained of. Hence, they are not entitled to damages precludes the award of temperate or moderate damages.
actual damages. Moreover, DT could have avoided the alleged injury by
requesting the airline staff to do the luggage transfer as a matter of duty on their Temperate or Moderate Damages
part. There is also no basis to award moral damages for such breach of contract 1. Amount: More than nominal but less than compensatory where some
because the facts of the problem do not show bad faith or fraud on the part of pecuniary loss has been suffered but its amount can't be proved with certainty
the airline (Cathay Pacific v. Vasquez, 399 SCRA 2007 [2003]). However, they due to the nature of the case.
may recover moral damages if the cause of action is based on Article 21 of the
Civil Code for the humiliation and embarrassment they felt when the stewardess 2. REQUISITES:
threatened to offload them if they did not avail of the upgrade. a. Some pecuniary loss
b. Loss is incapable of pecuniary estimation
Bar Question (2006). 1. Under Article 2219 of the Civil Code, moral damages c. Must be reasonable
may be recovered in the cases specified therein, several of which are
enumerated below. Choose the case wherein you cannot recover moral Liquidated Damages
damages. Explain. 1. Those agreed upon by the parties to a contract, to be paid in case of breach
a) A criminal offense resulting in physical injuries thereof
b) Quasi-delicts causing physical injuries
c) Immorality or dishonesty 2. WHEN LIQUIDATED DAMAGES MAY BE EQUITABLY REDUCED:
d) Illegal search a. iniquitous or unconscionable
e) Malicious prosecution b. partial or irregular performance