ATENEO CENTRAL BAR OPERATIONS 2012 ACADEMICS COMMITTEE Academics Head: Pierre Martin Reyes; Understudy: Clariesse Jami Mari Chan REVIEW COMMITTEE Head: Yla Gloria Marie Paras; Understudy: Ken Koga; Members: Catherine Dela Rosa, Eric Lavadia, Iris Lucido, Pearl Charisse Baustista; Mina Reyes CIVIL LAW COMMITTEE Heads: Francesco Benzon Anbochi, Hannah Stephanie Ang; Understudy: Alessandra Vilches, Ken Patrick Habana; Volunteers: Rizza Anne Sy, John Benedict Ty, Rose Angelique Dizon, Geoanne Christi Battad, Paolo de Guzman, Roberto Miguel Ramiro;

Table of Contents
PRELIMINARY TITLE…………………………………… 5 1. Effect and Effectivity of Law 2. Human Relations PERSONS…………………………………………………… …8 ============================== ===== A. General Provisions B. Natural Persons C. Juridical Persons D. Domicile E. Marriage F. Legal Separation G. Rights and Obligations Between Husband and Wife H. Property Relations Between Husband and Wife I. The Family J. Family Home K. Paternity and Filiation L. Adoption M. Support N. Parental Authority O. Funerals P. Surname Q. Absence R. Civil Register PROPERTY………………………………………………… …37 ============================== ===== A. Classification of Property (Arts. 414-418, CC) B. Ownership (Arts. 427-439, CC) C. Accessions D. Quieting Title E. Co-ownership F. Condominium Act (RA 4726) G. Possession H. Usufruct I. Easements J. Modes Of Acquring Ownership K. Occupation L. Intellectual Creation M. Donation N. Other Modes of Acquiring Ownership O. Nuisance PRESCRIPTION…………………………………………… ……78 ============================== ===== A. Definition B. No Prescription Applicable C. Prescription or limitation of actions D. Interruption OBLIGATIONS ………………………………………………… 82 ============================== ===== A. Definition B. Elements of an Obligation C. Different Kinds of Prestations D. Classification of Obligations E. Sources of obligations (Arts. 1156-1157) F. Nature and Effect of Obligations G. Kinds of Civil Obligations H. Joint and Solidary Obligation I. Extinguishment of Obligations CONTRACTS ………………………………………………… 109 ============================== ===== A. Essential Requisites (Art. 1261) B. Kinds of Contracts C. Formality (Arts. 1356, 1357, 1358) D. Defective Contracts E. Effect of contracts (Art. 1311) SALES ……………………………………………… 123 ============================== ===== A. Introduction B. Parties to a Contract of Sale C. Subject Matter D. Obligations of the Seller to Transfer Ownership E. Price F. Formation of Contract of Sale


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G. Transfer of Ownership H. Risk of Loss I. Documents of Title J. Remedies of an Unpaid Seller K. Performance of Contract L. Warranties M. Breach of Contract N. Extinguishment of the Sale O. The Subdivision and Condominium Buyers' Protective Decree P. The Condominium Act SUCCESSION ………………………………………………… 155 ============================== ===== A. General Provisions B. Testamentary Succession C. Legal or Intestate Succession D. Provisions Common to Testate and Intestate Succession E. Partition and distribution of estate LEASE………………………………………………………… 199 ============================== === A. Lease of Things B. Lease of Work or Services C. Lease of Rural and Urban Lands D. Contract for Piece of Work E. Rights and Obligations of Lessor and Lessee PARTNERSHIP……………………………………………… 205 ============================== === A. Contract Of Partnership B. Rights and Obligations of Partnership C. Rights and Obligations of Partners Among Themselves D. Obligations of Partnership/Partnership to Third Persons E. Dissolution F. Limited Partnership AGENCY……………………………………………………… … 221 ============================== === A. Definition of Agency B. Powers C. Express V. Implied Agency D. Agency By Estoppel E. General vs. Special Agency F. Agency Couched in General Terms G. Agency Requiring Special Power of Attorney H. Agency by Operation of Law I. Rights and Obligations of Principal J. Modes of Extinguishment CREDIT TRANSACTIONS………………………………………… 235 ============================== === A. Loan B. DEPOSIT C. Guaranty and Suretyship D. Pledge E. Real Mortgage F. Antichresis G. Chattel Mortgage H. Quasi-contracts I. Concurrence and Preference of Credits J. Insolvency Law LAND TITLES AND DEEDS …………………………………… 283 ============================== ===== A. Torrens System B. Regalian Doctrine C. Citizen Requirements D. Non-Registrable Properties E. Original Registration F. Subsequent Registration G. Dealings With Unregistered Land TORTS AND DAMAGES…………………………………… 323 ============================== ===== Book I--Torts A. Principles B. Classification of Torts C. The Tortfeasor D. Act of Omission and Its Modalities E. Proximate Cause F. Legal Injury G. Intentional Torts H. Negligence I. Special Liability in Particular Activities J. Strict Liability Book II--Damages


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A. General Considerations B. Actual and Compensatory Damages C. Moral Damages D. Nominal Damages E. Temperate or Moderate Damages F. Liquidated Damages G. Exemplary or Corrective Damages H. Damages in Case of Death I. Graduation of Damages J. Miscellaneous Rules


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When Laws Take Effect (art.2)


TOPICS UNDER THE SYLLABUS A. PRELIMINARY TITLE 1. Effect and Effectivity of Law a. When laws become effective b. Mandatory effect of laws c. Irretroactivity of laws d. Waiver of rights e. Repeal of laws f. Judicial decisions g. Presumption and Applicability of Custom h. Computation of Time i. Governing laws j. Rules on Prohibitive laws 2. Human Relations a. Application b. Duty to act with justice, observe honesty and good faith c. Actions for breach of promise to marry d. Unjust enrichment at the expense of others e. Rights to personal dignity and privacy f. Liability of Public Officers ========================= ================

General Rule - 15 days after completion of publication in OG or newspaper of general circulation Exception - The law can provide for its own date of effectivity

b) Mandatory Effect of Laws
• • • • Publication is MANDATORY for all statutes, including PDs and Eos AOs and Regulations must also be published if their purpose is to enforce or implement existing law An immediate effectivity clause does not preclude the requirement of publication Publication must be in full (otherwise, it is not deemed published at all) since its PURPOSE is to inform the public of its contents Non-publication of the law would offend due process (persons not aware of laws would be prejudiced) Effect of Publication: The people are deemed to have conclusively been notified of the law even if they have not read them.

• •

CIVIL LAW – branch of law that regulates relations of assistance, authority and obedience among family members as well as members of a society for the protection of private interests NEW CIVIL CODE: took effect on August 30, 1950 ============================== ===================

Compliance with the Law (art.3): Ignorance of the law excuses no one from compliance therewith (Ignorantia juris neminem excusat) NOTE: Applies only to mandatory and prohibitory laws (Consunji v. CA, [G.R. 137873 April 20, 2001])

c) Irretroactivity of Laws (art. 4)
General rule: laws are not retroactive Exceptions: (PIERCER) 1. Penal laws when favorable to the accused who is not a habitual delinquent or recidivist 2. Interpretative statutes 3. When the law itself expressly provides Exception to the exception: a. Ex post facto law b. When retroactivity impairs the obligations of contracts

TOPICS UNDER THE SYLLABUS A. PRELIMINARY TITLE 1. Effect and Effectivity of Laws ========================= =================
1. EFFECT AND EFFECTIVITY OF LAWS a) When the Laws Become Effective


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their acts or property and laws which have for their object public order. 31.g. 26 (2) of Family Code Construction and interpretation of laws come only after it has been demonstrated that application is impossible or inadequate without them.repeal of repealing law will not revive the old law (unless expressly provided) 2. 7. HUMAN RELATIONS a) Application CIVIL LAW REVIEWER Page 8 of 401 . 5): General Rule .the provisions of the subsequent law are incompatible with those of the previous law Requisites: 1. d) Waiver of Rights (art. 8-9) • Decisions of the SC form part of the law • All judges or courts have the duty to render judgment even in the absence of a law g) Presumption Custom (Arts. 17) General Rule . Day = 24 hours. public order or public policy shall not be countenanced.Acts executed against the provisions of mandatory or prohibitory laws shall be void. wills. h) Computation of Time Legal Periods (Art. including those living abroad Real and personal property Forms and solemnities of contracts. Exception: Art.Prohibitive laws concerning persons. 13. Exception . Prejudicial to a third person with a right recognized by law LAW Penal Laws e) Repeal of Laws (art. waiver of future inheritance. future support) 2. good customs (e. 6. public order.When waiver is 1. 7) 1. The latter law is repugnant to the earlier law f) Judicial Decisions Status Laws (relating to family rights and duties. 5. Both laws cover the same subject matter 2. Express repeal . EO 292) Year = 12 months.Rights may be waived Exceptions . Implied repeal . political rights. public policy or good customs are not rendered ineffective by laws.If the law expressly provides for the validity of acts committed in violation of a mandatory or prohibitory provision of a statute. 10-12) & Applicability of Lex rei sitae: follow laws of the place where property is situated Lex loci celebrationis: follow laws of the country in which they are executed j) Rules on Prohibitive Laws (art. public instruments Principle/ Doctrine Principle of Territoriality: follow laws of the place where crime was committed Principle of Nationality: follow one’s own national laws Mandatory and Prohibitory laws (art. status. Night = sunset to sunrise i) Governing Laws (Arts. as amended by Sec. public policy. morals. A custom must be proved as a fact according to the rules of evidence. judgments promulgated or conventions agreed upon in foreign country. 2. Contrary to law. unless referring to a specific calendar month. legal capacity) Property Laws Laws on Forms and Solemnitie s Judgment of the Courts (Arts. Month = 30 days.6) General Rule. Remedial statutes Curative statutes Emergency laws Laws creating new substantive rights Customs which are contrary to law. 14-17) Matters/Perso ns Bound All those who live or sojourn in Philippine territory Citizens of the Philippines.4.

Plaintiff has no other action based on contract. or quasi-delict • Distinguished from solutio indebiti: Mistake is an essential element in solutio indebiti but not in accion in rem verso. 21 of the NCC. Requisites: 1.PRINCIPLE OF ABUSE OF RIGHTS (ART. as long as the act is be contrary to law). 24): When such party is at a disadvantage on account of his: (MIgIMenTO) Moral dependence Ignorance Indigence Mental weakness Tender age Other handicap THOUGHTLESS EXTRAVAGANCE (Art. or public policy 3. Intriguing to cause another to be alienated from friends 4. Unjust Enrichment of defendant is without just or legal ground 4. 19 & 21. 19) When one’s right is exercised for the purpose of prejudicing or injuring another Requisites/ Elements: 1. There is a legal right or duty 2. Person seeking to stop it is the gov’t or a private charitable institution e) Rights to Privacy Personal Dignity and b) Duty to Act with Justice. 22) – action for recovery of what has been paid without just cause.21)When persons wilfully cause loss or injury to another Elements: 1. For the sole intent of prejudicing or injuring another Standards to observe in the exercise of one’s rights: 1. prevention and other relief: (PryMIVex) 1. personality. Difference: Under Arts. Which is exercised in bad faith 3. 23): when defendant was benefitted even if not due to fault or negligence DUTY OF COURTS TO PROTECT A PARTY IN A CONTRACT (Art. 20. Art. 26) Every person shall respect the dignity. 25) May be prevented if the ff requisites are present: 1. Velez 12 SCRA 649 (1964)) d) Unjust Enrichment at the Expense of Others Protection of Human Dignity (Art. Prying into the privacy of another’s residence 2. (Wassmer v. good customs. Vexing or humiliating another on account of his religious beliefs. Act with justice 2. Such act is unjustifiably contrary to good customs for which the defendant must be held answerable for damages in accordance with Art. the act must be done intentionally. But which is contrary to morals. lowly station in life. 19-21. at the core is bad faith or malice. Meddling with or disturbing the private life or family relations of another 3. Exception: When one party has already made real efforts to prepare and spend for the wedding. During an acute public want or emergency 2. Defendant has been enriched 2. Plaintiff suffered a loss 3. place of birth. Give everyone his due 3. c) Actions for Breach of Promise to Marry General Rule: Breach of promise to marry is not actionable. however. privacy and peace of mind of others The following acts produce a cause of action for damages. public order. Done with intent to injure Note: • • Similarities: In Arts. There is an act which is legal 2. and the aggrieved party must be indemnified. or other personal condition CIVIL LAW REVIEWER Page 9 of 401 . physical defect. quasi-contract. Observe honesty and good faith ACCION IN REM VERSO (Art. Observe Honesty and Good Faith ACTS CONTRA BONUS MORES (ART. DUTY TO INDEMNIFY ONE FOR DAMAGE TO HIS PROPERTY (Art. does not distinguish (the act may be done either willfully or negligently. crime.

f) Liability of Public Officers Relief Against Public Officials (Art. 27) When one suffers material or moral loss because a public officer fails without cause to perform his duty. CIVIL LAW REVIEWER Page 10 of 401 . the officer is not protected by his office and is personally liable.

Full Civil Rights: union of both juridical capacity and capacity to act 2. Insanity 3. Who are Juridical Persons 2. 38) (MInD .ICIP) on Capacity to Act Exception The conceived child shall be considered born for all purposes favorable to it. BUT if it had an inter-uterine life of less than 7 months. CC v Rule 131 Sec jj) C. Natural Persons 1. Capacity to Act (Art. Rights of Juridical Persons D. JURIDICAL PERSONS Juridical Persons Exists only in contemplation of law Product of legal fiction 1. 37) JURIDICAL CAPACITY Fitness to be the subject of legal relations Passive Inherent Lost only through death Can exist without capacity to act Cannot be limited or restricted CAPACITY TO ACT Power to do act with legal effects Active Merely acquired Lost through death and other causes Cannot exist without juridical capacity Can be restricted. Prodigality – state of squandering money or property with a morbid desire to prejudice the heirs of a person (Martinez v. General Provisions 1. When Personality Begins and Ends 2. whoever alleges the death of prior to the other Do not exempt the incapacitated person from certain obligations 1. if there is doubt as to which of them died first. active or passive. It is alive at the time it is completely delivered from the mother’s womb 2.43. has physical existence Product of procreation V. modified. Minortiy CIVIL LAW REVIEWER Page 11 of 401 . When Personality Begins and Ends 3. NATURAL PERSONS NATURAL PERSONS Natural Persons A human being. 182) TOPICS UNDER THE SYLLABUS A. Imbecility 5. Rules on Survivorship (Art. Juridical Capacity v Capacity to Act 2. PERSONS ============================== =================== 2. State of being Deaf-mute 4. Martinez. Rules on Survivorship Doubts as to Order of Death: As between two or more persons called to succeed each other. or limited 1. 4043) General Rule Determined extinguished by death by birth. only if it lives for at least 24 hours after its complete delivery from the maternal womb 2. Juridical Capacity v. GENERAL PROVISIONS Circumstances that Modify or Limit Capacity to Act (art. of rights and obligations B. Restrictions and Modifications on Capacity to Act B. Natural Persons (Arts. When Personality Begins and Ends Civil Personality. Civil Interdiction 6. Restrictions (Art. Domicile ========================= ================= A. provided it be born later under the following conditions: 1. Juridical Persons 1. 39) Age Penalty Absence Insanity Prodigality Insolvency Imbecility Family Relations Trusteeship Deaf-muteness Alienage CIVIL PERSONALITY – the aptitude of being the subject. 1 Phil.I.

P. Acquire and possess property of all kinds Incur obligations Bring civil or criminal actions CITIZENSHIP • In the Philippine jurisdiction. and entities for public interest or purpose. what is followed is the concept of jus sanguinis (citizenship by blood) as opposed to jus soli (citizenship by place of birth) D. Foreign Divorce 5. Imprescriptibility of action or defense for declaration of nullity of marriage. Marriage (Arts. Concept 2. Domicile of origin – received by a person at birth 2. When Personality Begins and Ends • Creation: (1) and (2) are created by the laws creating or recognizing them. 3. Void for Being Incestuous under Art. 68) and partnership and associations are governed by the provisions of the New Civil Code on partnerships • Extinguished: by termination of existence ================================ 3. 35 b. 38 e. Code (B. institutions. 4447) 1. Rights of Juridical Persons 1. In the absence of proof. partnerships. Family Code) 1. Void Marriages a. Void for Reason of Public Policy under Art. 39) CIVIL LAW REVIEWER Page 12 of 401 . Bodily presence in a new locality 2. the court shall decide Kinds of Domicile 1. In case of disagreement. Other corporations. 50-51) For natural persons. The state and its political subdivisions 2. created by law 3. it is presumed that they died at the same time and there shall be no transmission of rights from one to the other. Void ab initio under Art. Constructive domicile – assigned to a child by law at the time of his birth C. Corporations. 2. it is the place of habitual residence For juridical persons. it is where their legal representation is established or where they exercise their principal functions (when the TOPICS UNDER THE SYLLABUS E. Intention to abandon the old domicile (animus non revertendi) • The husband and the wife shall fix the family domicile. 1-54. 37 d. Who are Juridical Persons Civil Personality. Juridical Persons (Arts. Validity and Exceptions b. • This rule applies only to cases involving succession law creating them does not fix the domicile) A minor follows the domicile of his parents • Domicile of origin can only be lost when a change of domicile occurs. Domicile of choice – the place freely chosen by a person sui juris 3. Essential and Formal Requirements 3. and associations for private interest or purpose 2. JURIDICAL PERSONS 1. Void under Art.shall prove the same. 36 c. Non-Essential Requirements 4. (Art. Intention to remain therein (animus manendi) 3. DOMICILE DOMICILE ( Arts. Requirements for the acquisition of new domicile: 1. Marriages Celebrated Outside the Philippines a. private corporations are governed by the Corp.

ESENTIAL AND FORMAL REQUIREMENTS 1. at a point of death (articulo mortis). rabbi. Authority of solemnizing officer 2. Must be at least 18 years old 2. (Article 27 and 28) 2. of permanent union 3. criminally. the marriage will still be valid if either or both contracting parties believed in good faith that the solemnizing officer had legal authority (Article 35(2)) Those exempt from the license requirement. Defect in any of the essential requisites – voidable 3. in case the mayor is temporarily incapacitated to discharge his duties Marriages Exempt from License Requirements: 1. Legal capacity of contracting parties a. consul or vice-consul only when contracting parties are both Filipinos abroad 6. Marriage in articulo mortis (one of the parties is at the point of death) 2. Consul-general. Marriage solemnized outside the Philippines where no marriage license is required by the country where it was solemnized Marriage is 1. Procedure and Effects of Termination of Marriage E. Ship captain or airplane chief only in articulo mortis between passengers or crew members while the ship is at sea or the plane is in flight and also during stopover at ports of call 4. Consent freely given. CIVIL LAW REVIEWER Page 13 of 401 .============================== ================== f. with their personal declaration that they take each other as husband and wife in the presence of not less than two witnesses of legal age Effects: 1. For the establishment of conjugal and family life 2. IN the PRESENCE of the solemnizing officer Formal Requisites of Marriage: (ALC) 1. If the residence of either party is so located that there is no means of transportation to enable such party to appear personally before the civil registrar 3. MARRIAGE 1. Incumbent member of the judiciary within the court’s jurisdiction 2. A special contract 2. Subsequent Marriage Without Judicial Declaration of Nullity of Previous Void Marriage (Art. Military commander of a unit to which a chaplain is assigned only in articulo mortis between persons within the zone of military operations whether members of the armed forces or civilians and only in the absence of the chaplain 5. Mayor (Local Government Code of 1991) The vice mayor. If either of the contracting parties are 1. Between a man and a woman 4. then the marriage may be solemnized without the necessity of a marriage license. If solemnized by unauthorized person. Irregularity in any of the formal requisites – does not affect the validity of the marriage but will make the party responsible civilly. Entered into in accordance with law 5. 40) 6. Marriage ceremony where the contracting parties appear before the solemnizing officer. Absence of essential or formal requisites – void ab initio Exceptions: a. CONCEPT 2. Must be between a man and woman b. Valid marriage license (except in cases where a marriage license is not required) • valid only for 120 days from issue in any part of the Philippines 3. Annullable Marriages 7. 3. Duly authorized priest. or administratively liable Authorized Solemnizing Officers: (JPCCCM) 1. imam or the minister of any church or religious sect 3. cohabitation for 5 years. or the residence of either party is located that there is no means of transportation to enable such party to appear personally before the civil registrar.

NON-ESSENTIAL REQUIREMENTS Marriage Certificate While a marriage certificate is considered the primary evidence of a marital union. Man and woman must have been living together as husband and wife for at least five years before marriage b. the marriage shall be VOID If they are able to obtain a license during the 3-month period. this will suspend the issuance of the marriage license for 3 months from the completion of publication If they get married during the 3-month period without a license. the marriage will still be valid but civil and criminal liability may attach. 328 SCRA 122 (2000)) AUTHORIZED VENUES FOR MARRIAGE: General Rule: Must be solemnized publicly.4. unbroken. Marriage among Muslims or among members of ethnic cultural communities in accordance with their customs 5. Chambers of the judge or in open court 2. The parties must execute an affidavit stating that they have lived together for at least five years (and are without legal impediment to marry each other) e. chapel or Office of consul-general. Lack of consent Lack of advice or counselling 3. Marriage between persons who have lived together as husband and wife for at least five years and without any legal impediment to marry each other Requisites: a. consul or viceconsul Exceptions: 1. Church. The fact of absence of legal impediment between the parties must be present at the time of marriage d. Marriage in remote places 3. Bayadog. even a person’s birth certificate may be recognized as CIVIL LAW REVIEWER Page 14 of 401 . Jurisprudence teaches that the fact of marriage may be proven by relevant evidence other than the marriage certificate. (Niñal vs. Marriage at the point of death (articulo mortis) 2. in the: 1. Marriage at a house or place designated by the parties in a sworn statement upon their written request to the solemnizing officer OTHER REQUIREMENTS: Either or Both Requires Parties 18 years old and Parental consent above but below 21 Marriage counseling 21 years old and Parental advice above but below 25 Marriage counseling EFFECTS parental Marriage is VOIDABLE parental marriage NO EFFECT on th validity of marriage However. and not elsewhere. it is not regarded as the sole and exclusive evidence of marriage. The parties must have no legal impediment to marry each other c. Hence. The solemnizing officer must execute a sworn statement that he had ascertained the qualifications of the parties and that he had found no legal impediment to their marriage • No legal impediment during the entire period: This 5-year period should be a period of cohabitation characterized by exclusivity – meaning no third party was involved at any time – that is.

2) • Requisites: a. • • were Filipino citizens but. Incestuous marriages 7. Int. is barred by RES JUDICATA. – Basis: Principle of comity • However. Mistake in identity 4. Psychological incapacity 6. Corpuz vs. Iyoy.) There is a valid marriage that had been celebrated between Filipino citizen and a foreigner b. [GR 178221. a spouse who obtained the divorce must not be a Filipino at the time of the divorce. Estate of Jalandoni. Otherwise. Sto. December 1. Bigamous or polygamous marriage (except Art. Orbecido III. later on. No court in this jurisdiction. filed after the court denied a petition to declare the marriage void due to psychological incapacity. Where either or both parties are below 18 years old 2. If the court finds that the decree capacitated the alien spouse to remarry. Solemnized without marriage license (Except when license not required) • A petition to declare the marriage void due to absence of marriage license. (Art. Republic v. VOID MARRIAGES a) Void ab initio under Art. September 21. 186571. No. 2010]) 4. There is only one cause of action which is the nullity of marriage. Contracted by any party below 18 years old 2. Marriage void for reasons of public policy b) Foreign Divorce Divorce by Foreigner-Spouse: • If a Filipino is married to a foreigner and the latter subsequently obtains a valid divorce abroad capacitating him/her to remarry.R.) A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry The traditional rule applies when parties at the time of celebration are a Filipino and an alien BUT • This includes cases involving parties who. MARRIAGES SOLEMNIZED ABROAD a) Validity and Exceptions General Rule: Marriages solemnized outside the Philippines in accordance with the laws of the foreign country shall be valid here (lex loci celebrationis). Republic v. 472 SCRA 114 (2005) For the second paragraph of Article 26 to apply. can make a similar declaration for the alien spouse (other than that already established by the decree). G. if solemnized inside the Philippine Consulate abroad. one of them becomes naturalized as a foreign citizen and obtains a divorce decree. (Anonuevo vs. 2010 5. The Filipino spouse should be allowed to remarry as if the other party was a foreigner at the time of the solemnization of the marriage. 41 on presumptive death of spouse) 3. the divorce is not recognized in the Philippines. 2005 Additionally. Petitioner is estopped from asserting that the first marriage had no marriage license because he impliedly admitted the same when he did not question the absence of a CIVIL LAW REVIEWER Page 15 of 401 . August 11. Tomas.R. G. an action based on the second paragraph of Article 26 of the Family Code is not limited to the recognition of the foreign divorce decree. 35 1. 15277. whose status and legal capacity are generally governed by his national law.competent evidence of the marriage between his parents. No. at the time of the celebration of the marriage. Marriages void under Art. par. Philippinelaws must be observed Exceptions: 1. the Filipino spouse shall likewise have the capacity to remarry under the Philippine law. 26. 53 – contracted following the annulment or declaration of nullity of a previous marriage but before partition 5. the courts can declare that the Filipino spouse is likewise capacitated to contract another marriage. Solemnized by unauthorized solemnizing officer (Except if either or both parties believed in good faith that the officer had authority) 3. however.

Mistake in identity • The contemplated mistake here refers to the actual physical identity of the other party.R. and not merely mistake in the name. Perez-Ferraris v. b) Void under Art. Carating-Siaynco v. Failure to comply with these requisites will make the subsequent marriage void ab initio. juridical antecedence c. age. 52-53) NOTE: The enumeration of void marriages under Art. and at the time of the marriage ceremony is in good faith together with the subsequent spouse 5. 1997 Psychological incapacity is not equated with insanity or total mental inability to function in all aspects of human life…it is a ground restricted to psychological incapacity “to comply with marital obligations”. where such person has a well founded belief that his/her absent spouse is already dead. CA 421 SCRA 461 (2004) One of the essential marital obligations is "To procreate children based on the universal principle that procreation of children through sexual cooperation is the basic end of marriage. the judgment of annulment or absolute nullity. No. and after the absent spouse is judicially declared presumptively dead. Dedel v. Neither could emotional immaturity and irresponsibility be equated with psychological incapacity. 2006 4. CA. was psychologically incapacitated to comply with the essential marital obligations. Siaynco. Further. CA 421 SCRA 461 (2004) It must be shown that these acts are manifestations of a disordered personality which make respondent completely unable to discharge the essential obligations of a marital state.A person whose marriage has been annulled may remarry as long as after the marriage is annulled. 141528. or other attributes of the person. 53 . 119190. Alcantara. Mallion v. Siaynco. It must be characterized by a. Subsequent marriage void under Art. Dedel v. who at the time of the celebration of the marriage. Bigamous or polygamous marriages Exception: Art. October 31. the partition and distribution. It should refer to no less than a mental (not physical) incapacity. 441 SCRA 422 (2004) Mere sexual infidelity or perversion and abandonment do not by themselves constitute psychological incapacity within the contemplation of the Family Code. No. Root cause must be traceable prior to the marriage ceremony. G. incurability. even if incapacity becomes manifest only after solemnization. Furthermore. Carating-Siaynco v. 36 Where any of the parties." Constant nonfulfillment of this obligation will finally destroy the integrity or wholeness of the marriage. failure to record in the proper registries will mean that such will not affect third persons (Arts. 41 – Marriage contracted by a person whose spouse has been absent for 4 years (ordinary absence) or 2 years (extraordinary absence).R. Ferraris GR No. character. • Psychological Incapacity must be judged on a case to case basis. G. the properties of the spouses must be partitioned and distributed and the presumptive legitimes of the children be distributed. January 16. The senseless and protracted refusal of one of the parties to fulfill this marital obligation is equivalent to psychological incapacity. and the delivery of the presumptive legitimes must be recorded in the appropriate civil registry and registries of property. Chi Ming Tsoi v. 6. gravity b. 162368 (2006) • • • • • CIVIL LAW REVIEWER Page 16 of 401 . 441 SCRA 422 (2004) Mere showing of irreconcilable differences and conflicting personalities does NOT constitute psychological incapacity. 35 is not exclusive.marriage license in the first case.

GR No. Between adopted and legitimate child of adopter 8. but also that such psychological disorder renders her "truly incognitive of the basic marital covenants that concomitantly must be assumed and discharged by the parties to the marriage. Between step-parents and step-children 3. Medically or clinically identified b. GR No. Such incapacity must be shown to be medically or clinically permanent or incurable 5. No." Psychological incapacity must be more than just a "difficulty. and 225 of the Family Code. and by decisions of church tribunals. 68-71. Baccay. Between adopted children of same adopter The Court emphasizes that the burden falls upon petitioner. 127358. 37 Whether relationship is legitimate or illegitimate: 1. 268 SCRA 198 (1997) In determining if one of the contracting parties is psychologically incapable. Te. The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as counsel for the state • The foregoing guidelines do not require that a physician examine the person to be declared psychologically incapacitated. Buenaventura v. but on specific evidence that is was done deliberately and with malice by a party who had known of his or her disability and yet willfully concealed the same. Between collateral blood relatives up to the 4th civil degree There is no prohibition regarding marriages between collateral blood relatives by half-blood 2.R. Between surviving spouse of the adopter and the adopted 6." a "refusal. the findings of experts and researchers in psychological disciplines. As a consequence moral and exemplary damages cannot be awarded against him/her because bad faith is an essential element in awarding moral and exemplary damages. as well as Art. Between adopting parent and adopted child 5. CA. CA & Molina. not on the mere act of entering into the marriage. Such illness must be grave enough to bring about the disability of the party to assume the essential obligations of marriage 6. Between parents-in-law and children-inlaw 4. Republic v. and therefore negates bad faith. not just to prove that private respondent suffers from a psychological disorder. February 13. Between brothers and sisters. Between ascendants and descendants of any degree 2. the courts should interpret the provision on a case-to-case basis. Essential marital obligations must be those embraced by Art. G. 2009 c) Void for Being Incestuous under Art. Courts should be guided by experience. The root cause of the psychological incapacity must be: a. Clearly explained in the decision 3. 220. 161793. March 31." or a "neglect" in the performance of some marital obligations. 2005 7. Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the Philippines. 38 1. December 1. Te v. 117318. 221. while not controlling or decisive. Burden of proof to show the nullity of marriage is upon the plaintiff 2. Sufficiently proven by experts d. An unsatisfactory marriage is not a null and void marriage. The incapacity must be proven to be existing at the time of the celebration of the marriage 4. 2010 JURISPRUDENTIAL GUIDELINES (BRE-IGO-IC) (Republic v.• A finding of psychological incapacity on the part of one spouse shows noncognizance of one’s essential marital obligation. should be given great respect by our courts 8. whether full or half blood d) Void for Reason of Public Policy under Art. Award of moral damages should be predicated. • CIVIL LAW REVIEWER Page 17 of 401 . What is important is that the totality of evidence can adequately establish the party’s psychological condition. CA & Molina 268 SCRA 198 (1997)) 1. Alleged in the complaint c. Baccay vs. Between surviving spouse of the adopted and the adopter 7.

the following can now marry each other: a. The parties cannot decide for themselves the invalidity of their marriage. e) Imprescriptibility of action or defense for declaration of nullity of marriage. it must be declared void first by final judgment before the parties to such void marriage can remarry. publication. Lucio Morigo v. People. printing or distribution of brochures. •However. PRESUMPTION OF DEATH FOR REMARRIAGE (Art. cannot be dissolved. February 6. 40) -In a case for concubinage. and in effect. The mere signing of a marriage contract bears no semblance to a valid marriage and thus needs no judicial declaration of nullity. 2004 •Second marriage is still bigamous even if the first marriage is judicially declared void after contracting the second marriage. G. killed that other person’s spouse or his/her own spouse No prior criminal conviction by the court for the killing is required by the law since mere preponderance of evidence is required to prove the killing. 422 SCRA 376 (2004) NOTE: Even if a marriage is void. 39) A marriage that is invalid from the beginning is non-existent. Stepbrother and stepsister c. Guardian and ward d. the only legally acceptable basis for declaring a previous marriage an absolute nullity is a final judgment declaring such previous marriage void. other evidence is acceptable CIVIL LAW REVIEWER Page 18 of 401 . hence this petition is imprescriptible. No. the pendency of the civil action for nullity of marriage does not pose a prejudicial question in a criminal case for concubinage. the accused need not present a final judgment declaring his marriage void for he can adduce evidence in the criminal case of nullity of his marriage other than proof of final judgment declaring his marriage void.R. Under the new Family Code.9. EXCEPTION: When the purpose is other than remarriage. a collateral attack of the marriage is allowed. f) Subsequent Marriage Without Judicial Declaration of Nullity of Previous Void Marriage (Art. Hence. People. 41) General Rule: Marriage contracted by any person during the subsistence of a previous marriage is VOID Exception: If before the celebration of the subsequent marriage: a. whereas. if the first marriage was void due to the fact that no marriage ceremony was solemnized at all. Parties who have been convicted of adultery or concubinage NOTE: R. fliers. then the second marriage is not bigamous. Article 38 is an exclusive list. and other propaganda materials in furtherance thereof.The previous spouse had been absent for 4 consecutive years (ordinary absence) or 2 years (extraordinary absence) and -For the purposes of remarriage. However. 6995 (Mail Order Bride Act) declares as unlawful the practice of matching Filipino women for marriage to foreign nationals on a mail-order basis and other similar practices including the advertisement. (Art. Brother-in-law and sister-in-law b. Adopted and illegitimate child of the adopter e. Morigo v. 145226. for purposes other than remarriage. a judicial declaration of nullity is not needed where no marriage ceremony at all was performed by a duly authorized solemnizing officer as where the parties merely signed a marriage contract on their own. only if the first marriage ostensibly transpired as there was a marriage ceremony. Between parties where one. The judicial decree to declare its nullity is a mere confirmation of the voidness of the marriage. with the intention to marry the other.A.

44) Effect of Reappearance • The subsequent bigamous marriage under Art. homosexuality and lesbianism 4. regardless of nature. ANNULLABLE MARRIAGES Grounds for Annulment (art. in favor of the innocent spouse 3. Donations by reason of the marriage remain valid except if the donee contracted the marriage in bad faith 4. Children of the subsequent marriage conceived prior to its termination shall be considered legitimate 2.R. Fraudulent means of obtaining consent of either party Circumstances constituting fraud: (Art. Concealment of drug addiction. 45): (PUFFIS) 1. and such incapacity continues and appears to be incurable Requisites of Annulment due to Impotence: a. .In this case. Tango. G. No. Permanent • • NOTE: Summary proceedings under the Family Code are final and executory pursuant to Article 247. even if designation is stipulated as irrevocable. existing at the time of marriage d. The innocent spouse may revoke the designation of the spouse in bad faith as the beneficiary in any insurance policy.Judicial declaration of presumptive death . Republic v. summary proceeding for the declaration of presumptive death of an absent spouse under Article 41 of the Family Code is nonappealable.b. Hence. 40. 2009 Effects of Termination of Subsequent Marriage: (LDDRI) 1. The absolute community or conjugal partnership shall be dissolved and liquidated • If either spouse acted in bad faith. habitual alcoholism. Non-disclosure of conviction by final judgment of crime involving moral turpitude b. b. the above effects also apply to marriages which are annulled or declared void ab initio under Art. Concealment of sexually transmissible disease. 41 remains valid despite reappearance of the absentee spouse • UNLESS. In default of children. such marriage is void ab initio (Art. The spouse who contracted the subsequent marriage in bad faith shall be disqualified to inherit from the innocent spouse by testate or intestate succession NOTE: The above effects apply to voidable bigamous marriages. Concealment of pregnancy by another man c. In favor of the common children CIVIL LAW REVIEWER Page 19 of 401 . HOWEVER. 161062.The remaining spouse has a well-founded belief that the absent spouse is already dead c. July 31. Physical incapability of either party to consummate the marriage with the other. Force. 46) a. if there was a previous judgment annulling or declaring the first marriage a nullity. in favor of the children of the guilty spouse by previous marriage c. the reappearance made in a sworn statement is recorded in the civil registry in the place where the parties to the subsequent marriage resides. there will exist two valid marriages (valid bigamous marriage) Exception to the Exception: If both spouses of the subsequent marriage acted in bad faith. the subsequent marriage is automatically terminated. Lack of parental consent 2. the subsequent marriage is valid but it shall be automatically terminated by the recording of the affidavit of reappearance of the absent spouse. 6. If none. the subsequent bigamous marriage remains valid. intimidation or undue influence 5. Either party is of unsound mind 3. and 5. his/her share in the net profits shall be forfeited: a. Except for (1). In such case. Impotence exists at the time of the celebration of marriage b.Without filing of the affidavit of reappearance.

Unknown to the other spouse e. Sexually transmissible disease c. Incurable d. 6. Serious d. The other spouse must not also be impotent • Doctrine of Triennial Cohabitation: Presumption that the husband is impotent should the wife still remain a virgin after 3 years of living together with her husband. Appears incurable ARTICLE 45 The STD is a ground for annulment The STD does not have to be concealed ARTICLE 46 The STD is a type of fraud which in turn is a ground for annulment The STD must be concealed The STD must be serious and incurable The STD does not have to be serious and appears incurable CIVIL LAW REVIEWER Page 20 of 401 .c. Existing at the time of marriage b. Affliction of Sexually Transmissible Disease found to be serious and which appears incurable Elements: a.

CIVIL LAW REVIEWER Page 21 of 401 .GROUNDS FOR ANNULMENT Lack of parental consent (PC) EFFECTS OF TERMINATION OF MARRIAGE WHO CAN FILE PRESCRIPTIVE PERIOD a. Before child reaches 21 2 views: Sempio-Diy: Before death of other party Dean Del Castillo: Within 5 years from the time the right or action accrues Guardian of insane spouse Insane spouse Anytime before the death of either party During the lucid interval or after regaining sanity also before death of other party Within 5 years after discovery of Fraud Within 5 years from time force. intimidations or undue influence disappeared or ceased Within 5 years after the marriage ceremony RATIFICATION Free cohabitation after reaching 21 b. undue influence) disappeared or ceased *intimidation can be on the person or the property of the injured party and his/her immediate family No ratification since defect is permanent. Underage (18-21) party a. Parent or guardian Insanity of (INSANITY) one party Sane spouse Free cohabitation after insane spouse regains sanity Fraud Vitiated consent Injured Party Injured Party Incapability to Consummate/ Sexually transmissible disease (CONSUMMATE/STD) Injured Party Free cohabitation even with full knowledge of facts constituting the fraud Free cohabitation after the cause (force. Within 5 years after turning 21 b. intimidation.

BASIS Status of children Property Relations Donations Propter Nuptias Insurance Successio n EFFECTS OF VOIDABLE BIGAMOUS MARRIAGE. AND ANNULMENT VOIDABLE BIGAMOUS MARRIAGE (ART. donations propter nuptias made by one in favor of the other are revoked by operation of law. 53 annulment decree – legitimate ACP/CPG shall be liquidated. shall be forfeited in favor of common children or if there are none. donations propter nuptias made to the donee are revoked by operation of law. DECLARATION OF NULLITY. innocent spouse may revoke Same Same his designation as beneficiary in the insurance policy even if such designation be stipulated as irrevocable If one spouse contracted the marriage in bad faith. 41) DECLARATION OF ANNULMENT NULLITY Children of subsequent marriage conceived before its termination Illegitimate except Children conceived or born before – legitimate Art. the innocent spouse (common children -> children of guilty spouse by previous marriage -> innocent spouse) Shall remain VALID except Same Same If donee contracted the marriage in bad faith. 36 and Art. children of the guilty spouse by previous marriage or in default. The share in the net profits of Same Same community property of the spouse who contracted the marriage in bad faith. If one spouse acted in bad faith. he shall be Same Same disqualified to inherit from the innocent spouse both testate and intestate CIVIL LAW REVIEWER Page 22 of 401 . If both spouses acted in bad faith.

BASIS As to nature As to susceptibility to ratification As to effect on property As to effect on children aa aa a. only co-ownership (Art 147/148) Children are illegitimate Exceptions: In case of psychological incapacity (Art 36) Children born of subsequent marriage (Art 53) May be attacked directly or collaterally but for purpose of remarriage. c. DISTINCTION BETWEEN VOID AND VOIDABLE MARRIAGES VOID VOIDABLE Inexistent from the time of performance Valid until annulled Cannot be ratified Can be ratified either by free cohabitation or prescription No community property. Action prescribes As to how marriage may be impugned CIVIL LAW REVIEWER Page 23 of 401 . Cannot be attacked collaterally. there must be judicial declaration of nullity. Can no longer be impugned after death of one of the parties c. there must be a decree of annulment b. i. Can still be impugned even after death of parties Action for nullity does not prescribe Absolute community exists unless another system is agreed upon in marriage settlement (Default: ACP) Children are legitimate if conceived before decree of annulment a. b. only directly.e.

No.M. Anytime Consent Guardian before charge having Legal reaches 21 Charge of yrs. a copy to be served to the OSG and the Office of the City or Provincial Prosecutor. viceconsul. Venue: Family Court of the province or city where the petitioner or the respondent has been residing for at least 6 months prior to the date of filing (or non-resident respondent: where he may be found in the Philippines) AT THE ELECTION OF THE PETITIONER. or consular agent in said country 2. Within 5 years after reaching 21 a. During lucid interval or after regaining sanity Within 5 years from discovery of fraud Within 5 years from time of force. if any • Actions or defenses shall NOT prescribe OF 3. Names and ages of the common children of the parties and specify the regime governing their property relations. Sane spouse without knowledge of insanity b.“NoConsent” Party a. Filed in 6 copies. consul general. intimidation or undue influence disappeared or ceased Within 5 years after the marriage ceremony PETITION FOR ANNULMENT OF VOIDABLE MARRIAGES Who may file: GROUND PARTY TO PRESCRIPTIV FILE THE E PERIOD SUIT 1. PROCEDURE AND EFFECTS TERMINATION OF MARRAIGE OF legal charge of insane c. which must be signed personally by the petitioner • • Petition may not be signed solely by counsel or through an attorney-in-fact If petitioner is in a foreign country. Anytime before death of either party b. old “no-consent” party b. complete facts showing either one is incapacitated from complying with marital obligations at the time of the celebration of the marriage including physical manifestations. Vitiated Consent Injured Party 5. Relative. Complete facts constituting the cause of action 2. w/in 5 days from the date of its CIVIL LAW REVIEWER Page 24 of 401 . Insane spouse Injured Party A. 02-11-10-SC PROPOSED RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARRIAGES AND ANNULMENT OF VOIDABLE MARRIAGES SCOPE: • Petitions for declaration of absolute nullity of void marriages and annulment of voidable marriages under the Family Code • The Rules of Court shall apply suppletorily PETITION FOR DECLARATION ABSOLUTE NULLITY: Who may file: solely the husband or wife What to allege: If based on psychological incapacity. No Parental a. Fraud 4. guardian or person having b. Insanity 4. B.7. Incapability to Consummate/ Sexually Transmitted Disease Injured Party c. and the properties involved 3. Anytime before death of either party A. consul. Petition shall allege: 1. Verified and accompanied by a certification against forum shopping. Parent or a. the verification/certification shall be authenticated by the duly authorized officer of the Philippine embassy or legation.

except for lack of jurisdiction over the subject matter or over the parties (however. containing: date of pre-trial conference and order directing the parties to file pre-trial brief. ensuring its receipt by the adverse party at least 3 days before the date of pre-trial 2. Ochoterena. Court may require a social worker to conduct a case study and submit report at least 3 days before the pre-trial H. case dismissed 3. case dismissed 4. the court shall proceed but public prosecutor required to investigate reason for non-appearance (if due to collusion) CIVIL LAW REVIEWER Page 25 of 401 . Investigation Report of the Public Prosecutor • To be made w/in 1 month after the receipt of the court order • Shall state whether the parties are in collusion and basis for such finding. C. Parties should appear personally at the pre-trial 2. Notice of pre-trial shall be served to the parties. If respondent filed his answer but fails to appear at the pre-trial. Summons to be published shall be contained in a court order with the following data: (a) title of the case (b) docket number (c) nature of the petition (d) principal grounds of the petition and the reliefs prayed for (e) a directive for the respondent to answer w/in 30 days from the last issue of the publication D. serve copies to parties & counsels (a) there is collusion – parties shall file their respective comments w/in 10 days from receipt of a copy (b) no collusion – set the case for pretrial • Public prosecutor shall represent the State • Investigation is a condition sine qua non for further proceedings in cases where the respondent does not answer. their counsels and the public prosecutor. Motion to Dismiss: not allowed. Failure to file the pre-trial brief or to comply with its required contents. Failure of petitioner to appear at the pre-trial personally w/o the valid cause. Pre-trial is MANDATORY. Notice of pre-trial shall still be sent to respondent even if he did not file an answer • Personal Appearance 1. Answer • Verified by the respondent himself & filed w/in 15 days from service of summons or w/in 30 days from the last issue of publication in case of service of summons by publication • Failure to answer shall NOT make him in default • Court will order the public prosecutor to investigate if there is collusion if no answer is filed or when answer does not tender an issue F.filing and submit to the court proof of such service w/in the same period • Failure to comply with requirements may be a ground for immediate dismissal of the petition. Corpus vs. Respondent cannot be located at his given address or his whereabouts are unknown and cannot be ascertained by diligent inquiry: (a) Service of summons by publication once a week for 2 consecutive weeks in a newspaper of general circulation in the Philippines and in such places as the court may order (b) Served at respondent’s last known address by registered mail or any other means the court may deem sufficient 2. • Notice 1. any ground that might warrant a dismissal may be raised as an affirmative defense in an answer) E. 435 SCRA 446 (2004) G. This is true even if during the hearing the fiscal participated and cross-examined the witnesses. Service of Summons • Governed by the Rule 14 of the Rules of Court and the following: 1.

2003 ============================ ==================== F. a common child or a child of the petitioner 2. or connivance in such corruption or inducement 4. Connivance 4. Effects of Legal Separation Pendente Lite 6. but should this fail or is not availed of. Procedure 3. Public prosecutor shall appear for the State to prevent collusion J. Decision • Copies will be served on the parties. Subsequent bigamous marriage 8. Abandonment for more than 1 year without justifiable cause Grounds to Deny Legal Separation/Defenses to Legal Separation: (C4-D-GRP) 1. Prescription – action for legal separation must be filed within five years from the time of the occurrence of the cause of action TOPICS UNDER THE SYLLABUS CIVIL LAW REVIEWER Page 26 of 401 . proceed with pre-trial conference • Pre-trial order 1. Condonation • failure of the husband to look for his adulterous wife is not condonation to wife’s adultery 2. Parties are not allowed to raise issues or present witnesses and evidence other than those stated in the pre-trial order 2. Prohibited Compromise (a) Civil status of persons (b) Validity of marriage or legal separation (c) Any ground for legal separation (d) Future support (e) Jurisdiction of courts (f) Future legitimes K. GROUNDS (PRC-FAL-BILA) 1. Physical violence or moral pressure to compel the petitioner to change religious or political affiliation 3. Repeated physical violence or grossly abusive conduct directed against petitioner. including the SolGen and public prosecutor • Final after expiration of 15 days from notice to the parties • Should be registered in the Civil Registry where the marriage was celebrated and in the Civil Registry of the place where the Family Court is located L. Final judgment sentencing respondent to imprisonment of more than 6 years (even if pardoned) 5. Liquidation 5. Date of Effectivity: March 15. Collusion 5. Death • Party dies before entry of judgment: case closed and terminated w/o prejudice to the settlement of the estate in proper proceedings in the regular courts • Party dies after the entry of judgment: binding upon the parties and their successorsin-interest in the settlement of the estate in the regular courts. to engage in prostitution. Appeal • Not allowed if no motion for reconsideration or new trial is made w/in 15 days from notice of judgment M. Sexual infidelity or perversion 9. Reconciliation Effects ======================== ================== 1. a common child. or a child of the petitioner. Mutual guilt 6. Defenses 4. Drug addiction or habitual alcoholism 6. LEGAL SEPARATION 1.• Pre-trial conference Court may refer issues to mediator. Grounds 2. N. Consent 3. Attempt by respondent against the life of the petitioner 10. Attempt of respondent to corrupt or induce the petitioner. Parties have 5 days from receipt of pre-trial order to make corrections or modifications 3. Lesbianism or homosexuality 7.

Ong. Custody of minor children to innocent spouse (subject to Art. No. 213: parental authority shall be exercised by parent designated by the court) • The imposed custodial regime under the second paragraph of Article 213 is limited in duration. 9262. Marriage bond is not severed 3. 19. G. Innocent spouse may revoke the donation made by him in favor of the offending spouse. 8. Joint responsibility for the support of the family Profession General Rule . lasting only until the child’s seventh year. Observe mutual love. Reconciliation of the spouses during the pendency of the case Effects of Separation: 1. PROCEDURE FOR LEGAL SEPARATION A. the court shall decide whether a. Guilty spouse is disqualified from intestate succession and provisions made by innocent spouse in his favor in a will shall be revoked by operation of law 7. Dacasin. Who may file: solely the husband or wife When to file: within 5 years occurrence of any of the grounds from the CIVIL LAW REVIEWER Page 27 of 401 . 153206. Fix the family domicile 6. Innocent spouse may revoke designation of guilty spouse as beneficiary in the insurance policy even if such designation be stipulated as irrevocable 2. Forfeiture of the share of the guilty spouse in the net profits of the ACP/CPG 5. No. liens and encumbrances registered in good faith before the recording of the complaint for revocation in the registries of property shall be respected. Live together 2. GR168785. subject to the usual contractual limitations. R. The court shall proceed in the main case and other incidents of the case as soon as possible.M. • The abandonment contemplated is one without justifiable cause for more than one year. The objection is proper AND b.7. Render mutual help and support 4.Either spouse may exercise any legitimate profession/business without the consent of the other Exception . Dissolution of property regime 4.R. (Dacasin vs. Sec. From the eighth year until the child’s emancipation. respect and fidelity 3.A. alienations. 02-11-11-SC PROPOSED RULE ON LEGAL SEPARATION • The Rules of Court shall apply suppletorily • • Exception: There is no cooling-off period if the ground alleged are those under R. As it was established that Lucita left William due to his abusive conduct. October 23. such does not constitute abandonment contemplated by the said provision. the law gives the separated parents freedom. February 5. 9262 (Violence Against Women & Children). • P rocedure is almost the same as in the Rule on Declaration of Absolute Nullity & Annulment (see above) Creditors are furnished copies of the petition Pre-trial set not earlier than 6 months from filing of the petition for possibility of reconciliation (COOLING OFF PERIOD) Death of either party during the pendency of the case Lapuz-Sy v. In case of disagreement. serious and moral grounds.A. Spouses are entitled to live separately 2. Management of the household 5. 2010) 6. Ong Eng Kiam vs. Eufemio. Benefit has accrued to the family before and after the objection.The other spouse may object on valid. 43 SCRA 177 (1972) 8. However. RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE ======================== ================== Obligations of Husband and Wife (L2H2ds) 1. 2006 ============================ ==================== TOPICS UNDER THE SYLLABUS G. to agree on custody regimes they see fit to adopt.

Registration (to bind 3rd persons) General Rule: Property Relations are governed by Philippine laws Exceptions: 1.• • If benefit accrued to the family before the objection. PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE 1. the guardian appointed by the court must be made a party to the settlement 7. If the party executing the settlement is under civil interdiction or any other disability. In celebration of marriage 3. Made before celebration of marriage 2. Local customs Requisites of a Valid Marriage Settlement: (WSB-TC-CR) 1. the resulting obligation shall be enforced against the community property ============================ ==================== TOPICS UNDER THE SYLLABUS H. the parent/guardian must be made a party to the agreement 6.System of Absolute Marriage b. Marriage Settlements 3. Contrary stipulation 3. the system of ACP shall govern 3. 2. In favor of one or both future spouses Exception: If they are governed by ACP During Marriage General Rule: Donations made by spouses to each other during the marriage are VOID REASON: 1. To fix the terms and conditions of their property relations 5. To protect unsecured creditors from being defrauded 2. Executed before the celebration of marriage 4. To prevent indirect modification of the marriage settlement Exceptions: 1. As to extrinsic validity of contracts 3. even if married in the Phils. When both are aliens. WHAT GOVERNS PROPERTY RELATIONS BETWEEN SPOUSES 1. How Governed 2. Donations by Reason of Marriage 4. Separation of Properties During Marriage 6. DONATIONS BY REASON OF MARRIAGE (Donations Propter Nuptias) Before Marriage General Rule: Future spouses cannot donate to each other more than 1/5 of their present property (excess shall be considered void) Requisites: 1. Moderate gifts on the occasion of any family rejoicing 2. Regime of Separation of Property ======================== ================== 1. Signed by the parties 3. complete separation of property. CPG. Conjugal Partnership of Gains 5. Property Relations of Union with Marriage a. Marriage settlement – future spouses may agree upon the regime of ACP. To prevent stronger spouse from imposing upon the weaker one the transfer of the latter’s property to the former 3. MARRIAGE SETTLEMENT CIVIL LAW REVIEWER Page 28 of 401 . Family Code – if there is no marriage settlement or when the regime agreed upon therein is void. or any other regime 2. In writing 2. the resulting obligation shall be enforced against the separate property of the spouse who has not obtained consent • If benefit accrued to the family after the objection has been made. If parental consent is needed for the marriage.

Unduly refuses to support the donor when he is legally or morally bound to give such support DONATION PROPTER NUPTIAS v. 40 in relation to Arts. for Code 765 NCC revocatio n Prescriptive Periods for Filing Action for Revocation of Donation Propter Nuptias (Based on Sta. 52 and 53 When marriage takes place without the required parental consent If resolutory condition is complied with When marriage is annulled and donee in bad faith If donee commits an act of ingratitude In cases of legal separation By operation of law if donee-spouse contracted subsequent void marriage in bad faith 5 years from finality of judicial declaration of nullity (if action to recover property) 5 years 5 years from happening of condition 5 years from finality of decree 1 year from donor’s knowledge of that fact 5 years from the time the decree of separation has become final 4. System of Absolute Community The property regime of spouses in the absence of a marriage settlement or when the regime agreed upon is void. 760. Donee commits acts of ingratitude such as: a. Commits an offense against the person. Marriage is judicially declared void ab initio 3. Marriage is not celebrated 2. 87) Grounds to Revoke Donation Propter Nuptias: (CARNIVL) 1. 40 in relation to Arts. ORDINARY DONATION DONATIONS ORDINARY BASIS PROPTER DONATIONS NUPTIAS Governed by the rules on ordinary donations except Governed by Formaliti if future rules on es property. 764. or his children under his parental authority b.2. because contracted by a spouse before prior void marriage is judicially declared void (b) Judicially declared void on grounds other than Art. Imputes to the donor any criminal offense or any act involving moral turpitude. honor or property of the donor. unless the crime was committed against the donee himself. PROPERTY RELATIONS (acp) a. CIVIL LAW REVIEWER Page 29 of 401 . it depends: (a) If subsequent marriage is void pursuant to Art. 52 and 53. Maria) If marriage is not 5 years (Art. Donation mortis causa •Applies to common law spouses (Art. Marriage without the needed parental consent 4. conform with 725-773 NCC) formalities of wills No limit except May be donated that donor shall Present but up to 1/5 of leave property Property donor's present enough for his property support May be included Future provided Cannot be Property donation is included mortis causa Grounds Art. 1149 celebrated NCC) from the time (Except: donations in marriage is not marriage settlements solemnized on the automatically void if fixed date marriage not celebrated) If marriage is judicially declared void. his wife. In legal separation and donee is the guilty spouse 7. his wife. Marriage is annulled and donee is in bad faith 5. 86 of Family Arts. If it is with a resolutory condition and the condition is complied with 6. it must donations (Arts. or his children under his authority c.

except jewelry 3. Decree of legal separation 3.) By designated administrator-spouse c. 8. Inventory of separate property of the husband 2. Remainder of the separate properties of the spouses are returned to the owner 4.) By both spouses d. upon community property 3. Taxes. No. 6. whether acquisition appears to have been made in the name of one or both spouses. Inventory of community property b. If the community property is insufficient to cover all these liabilities (except those falling under (8) spouses shall be solidarily liable for the unpaid balance with their separate properties Dissolution of the ACP: 1. charges and expenses including major or minor repairs. Net remainder of the ACP is divided equally between husband and wife 5. Property acquired during the marriage. Judicial separation of property during the marriage (Arts. express or implied. for the commencement of the regime at any other time shall be VOID. No waiver of rights allowed during the marriage except in case of judicial separation of property. products.R. Property acquired during the marriage by gratuitous title. General Rule: The community property consists of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter. and liabilities for crime or quasi-delicts in absence of separate property Donated or promised to common legitimate children for profession. Support of spouses. Debts and obligations of ACP are paid 3. 153802. Upon death of either spouse 2. Marriage is annulled or nullified 4. vocational course or self improvement 5.4. fruits and income of separate properties of spouses Charges Upon and Obligations of the ACP: 1. Homeowner’s Savings & Loan Bank vs. Proceeds. or grantor expressly provides otherwise • Encumbrance or disposition of the community property without the consent of the other spouse is totally void. liens.) By one with the consent of the other 2. Debts and obligations contracted during the marriage: a. Benefit to the family must always be proven. except when the donor. Property for personal and exclusive use.) By either spouse without the consent of the other to the extent that it benefited the family b. Inventory of all properties a. Inventory of separate property of the wife c. E NOTE: Shall commence at the precise moment that the marriage is celebrated. Dailo. Exceptions/Exclusions from Community Property: 1. G. testator. is PRESUMED to belong to the community. 2005 xpenses of litigation between spouses unless the suit is found to be groundless Ante-nuptial debts which redounded to the benefit of the family Taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse used by the family Expenses for professional or vocational course Other ante-nuptial debts. their common children and legitimate children of either spouse CIVIL LAW REVIEWER Page 30 of 401 . The waiver must be in a public instrument. March 11. 7. System of Conjugal Property of Gains (cpg) The spouses contribute the following to a common fund: 1. Adjudication of conjugal dwelling and custody of common children b. 9. Any stipulation. Property acquired before the marriage by either spouse who has legitimate descendants by a former marriage and its fruits and income 2. 134-138) Liquidation of the ACP: 1. Presumptive legitimes of children are delivered 6. support of illegitimate child.

the property becomes conjugal (subject to reimbursement of the value of the property of the owner-spouse) Charges upon CPG: -Same as that under ACP. Fruits of conjugal property due or received during the marriage and net fruits of separate property 2. The presumption shall subsist in the absence of clear. Inventory of all property 2. CA. except that under taxes and expenses for preservation of separate property of either spouse during the marriage -> property need not be used by the family NOTE: If the conjugal partnership is insufficient. 423 SCRA 371 (2004) • • • Exclusive Property in CPG: 1. Those acquired through occupation 3. Chine v. Everything acquired by spouses through hose acquired by chance Rules in Cases of Improvement of Exclusive Property: GENERAL RULE: The ownership of improvements made on the separate property of the spouses at the expense of the partnership or through efforts of both spouses shall pertain to the partnership. That brought into the marriage as his/her own 2. the spouses shall be solidarily liable for the unpaid balance with their separate properties. Everything acquired by spouses through chance • Shall commence at the precise moment that the marriage is celebrated. Livestock in excess of what was brought to the marriage 4. Reimbursement for use of exclusive funds 4. whether acquisition appears to have been made in the name of one or both spouses. express or implied.7. Share in hidden treasure 6. Those acquired during the marriage with conjugal funds 5. Villanueva v. Debts and obligations of the CP are paid 5. is PRESUMED to be conjugal. • No waiver of rights allowed during the marriage except in case of judicial separation of property. Accession – if the cost of the improvement and any resulting increase in value are equal or less than the value of the entire property at the time of the improvement. That acquired during the marriage gratuitously 3. The presumption is not rebutted by the mere fact that the certificate of title of the property or the tax declaration is in the name of one of the spouses. Amounts advanced by CP as payment for personal debts and obligations of either spouse are credited 3. 1. That acquired by redemption. Those obtained from labor. Remains of exclusive properties are returned 6. Dissolution of CPG: Same as under ACP Liquidation of the CPG: 1. barter or exchange with exclusive property 4.427 SCRA 439 (2004) It is not even necessary to prove that the properties were acquired with funds of the partnership. T 2. the entire property remains the exclusive property of the owner-spouse (subject to reimbursement of improvement cost) 2. Any stipulation. Indemnify loss of deterioration of movables belonging to either spouse used for the benefit of the family 7. for the commencement of the regime at any other time shall be VOID. Delivery of children’s presumptive legitimes their efforts 3. industry. Property acquired during the marriage. That purchased with exclusive money What Constitutes CPG: 1. Reverse Accession – if the cost of the improvement and any resulting increase in value are more than the value of the entire property at the time of the improvement. The waiver must be in a public instrument. satisfactory and convincing evidence to overcome the same. CA. work or profession of either or both spouse CIVIL LAW REVIEWER Page 31 of 401 . Net remainder of conjugal property is divided equally 8.

439 SCRA 649 (2004) NOTES: • Property bought on installments paid partly from exclusive funds of the spouses and partly from conjugal funds: a. CIVIL LAW REVIEWER Page 32 of 401 . and does not ripen into title until after liquidation and settlement. which constitutes neither a legal nor an equitable estate. a mere expectancy. If full ownership was vested during the marriage – it shall belong to the conjugal partnership (In any case. the community property.9. the amount advanced by the partnership or by either/both spouses shall be reimbursed by the owner upon liquidation) • If the community or conjugal properties are insufficient. Abalos v. If full ownership is vested before the marriage – it shall belong to the buyer-spouse b. The right of the husband or wife to one-half of the conjugal assets does not vest until the dissolution and liquidation of the conjugal partnership or after dissolution of the marriage and there are net assets left which can be divided between the spouses or their respective heirs. disposition and b. the transaction shall be construed as a continuing offer on the part of the consenting spouse. net profits of the partnership are divided equally between the spouses of their heirs c. In cases of disagreement. Adjudication of conjugal dwelling and custody of children • Prior to the liquidation of the conjugal partnership. encumbrance . However. other spouse may assume sole powers • These powers do not include: a. Separation of Property • The conjugal partnership property shall likewise be liable for the payment of the personal debts of either spouse insofar as they have redounded to the benefit of the family. separate property of the net remainder is the spouses are divided equally returned and only the between the spouses. the interest of each spouse in the conjugal assets is inchoate. the separate properties shall be solidarily and subsidiarily liable for the obligations 2. Any encumbrance or disposition is void if without the written consent of the other spouse or the court approval. Macatangay. Administration and Enjoyment of the ACP/CPG General Rule: It shall belong to both spouses jointly Exceptions: 1. In case one spouse is incapacitated or unable to participate in the administration of the common properties. which may be perfected as a binding contract upon acceptance by the spouse or court approval.Both spouses must approve any disposition or encumbrance. Rules on Games of Chance: (ACP/CPG) LOSS: Borne by the loser spouse and shall not be charged to the community property WINNINGS: Form part of the community property Distinction between ACP and CPG ACP CPG All the properties Each spouse retains owned by the his/her property spouses at the time before the marriage of marriage become and only the fruits community property and income of such properties become part of the conjugal properties during the marriage Upon dissolution and Upon dissolution of liquidation of the the partnership. husband’s decision shall prevail • Wife has recourse to the courts within 5 years • Separation of property between the spouses during the marriage shall not take place except by judicial order.

35(4)) (void 6. One spouse judicially declared absent 3. Court authorizes the resumption of administration. Spouses reconcile and resume common life 7. 38 (Art.g. Man and woman together as 2.38 marriages / live-in Exclusively owned. Adulterous • Not Art. One spouse sentenced to penalty with civil interdiction 4. Loss of parental authority of petitioner’s spouse declared by court GROUNDS FOR REVIVAL OF FORMER PROPERTY REGIME 2. One spouse becomes a fugitive from justice or is hiding as an accused in a criminal case PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE BASIS ARTICLE 147 ARTICLE 148 1. Other void under Art. Civil interdiction terminates 2. O Judicial separation of property may either be voluntary or for sufficient cause. NOT to marry capacitated to (without legal marry (Art. Parental authority judicially restored 4.37 public policy) 7.• 1. Void marriages • Not by reason of bigamous public policy 4. Spouse abused power of administration granted 6. With capacity 3. When spouse who has left conjugal home without degree of legal separation resumes common life with the other 5. Absent spouse reappears 3. void concubinage) marriage) 5. property. Abandonment or failure to comply with marital obligations 5. spouses have been separated in fact for at least one year and reconciliation is highly improbable 4. Living 1. ne spouse becomes guardian of the other 2. At the time of petition. Salaries married party  Owned in equal and property of CPG of shares wages legitimate marriage Propertie s Remains acquired exclusive Remains exclusive through provided there exclusive is proof funds Propertie Presumed to be Only the s obtained in properties acquired equal shares acquired by both while since it is parties through living presumed to their actual joint together have been contribution of acquired money.35(1) impediment) under 18 years • At least 18 old) years old 4. 37 Applicabil relationship ity (incestuous (e. spouses agree to revive former regime (no subsequent voluntary separation may be granted) GROUNDS FOR TRANSFER OF ADMINISTRATION OF EXCLUSIVE PROPERTY OF EITHER SPOUSE: (GACA) CIVIL LAW REVIEWER Page 33 of 401 . Incestuous marriage by marriages under reason of Art. Petitioner’s spouse declared an absentee 3. Living together husband and as husband and wife wife 3. being satisfied that there will be no abuse 6. SUFFICIENT CAUSE FOR SEPARATION OF PROPERTY 1. Bigamous/polyg amous marriage • Not Art. Petitioner’s spouse sentenced to penalty with civil interdiction 2. When after voluntary dissolution of the ACP or CPG has been judicially decreed. Man and woman 2.

through joint efforts If one party did not participate in acquisition. Rivera v. Among brothers and sisters. full or half blood ============================ ==================== • The registration of a property in the name of the paramour who had no income whatsoever at the time of the donation by another’s husband is tantamount to a donation which is void under Article 87 of the Family Code. or unmarried head of the family 2. July 21. G. Validity of marriage or legal separation 4. MANNER OF CONSTITUTION GUIDELINES: 1. no suit between members of the family shall prosper unless earnest efforts towards a compromise have been made but failed. No.R. brothers and sisters (legitimate/illegitimate) living in the family home and dependent on head of family for support =========================== =================== 1. proof may be shown to show that their contribution and respective shares are not equal. Jurisdiction of courts 6. =========================== =================== FAMILY . FAMILY HOME ============================ ==================== • FAMILY HOME It is deemed constituted from the time it is occupied as a family residence BENEFICIARIES OF A FAMILY HOME 1. FC) CIVIL LAW REVIEWER Page 34 of 401 . there are no presumptions of co-ownership and equal sharing. Properties owned in common shall be presumed to be equal. Among other ascendants and descendants 4. Presumptions of co-ownership and equal contribution do not apply. Joaquino v. however. The paramour then holds the property under a constructive trust under Article 1456 in favor of the conjugal partnership of the husband with the legitimate spouse. if it is absent. Any ground for legal separation 3. In such a relationship. 427 SCRA 439 (2004) No co-ownership exists between parties to an adulterous relationship. Otherwise. it is necessary for each of the partners to prove his or her actual contribution to the acquisition of property in order to be able to lay claim to any portion of it. Reyes. CA. ascendants. Future support 5. 2006 • TOPICS UNDER SYLLABUS J. Future legitime FAMILY RELATIONS INCLUDE: 1. Heirs of Villanueva. Between husband and wife 2. • Allegation of “earnest efforts” is JURISDICTIONAL. 434 SCRA 260 (2004) Under Article 148. the court can dismiss the case. there must be proof of actual joint contribution by both the live-in partners before the property becomes coowned by them in proportion to their contribution. 141501. Villanueva v. Civil status of persons 2. The Family (Arts 149-151. FH is deemed constituted from time of actual occupation as a family residence TOPICS UNDER SYLLABUS: I. presumed to have contributed through care and maintenance of family and household or industry shall be owned by them in common in proportion to their respective contributions. BUT this rule is inapplicable to the following cases: (CLVFJF) 1.basic social institution which public policy cherishes and protects • Hence. Between parents and children 3. Husband and wife. Parents (may include parent-in-laws).

000 in RURAL areas (Art. He has reasonable grounds to believe that the family home is worth more than the maximum amount fixed in Art. Creditor to file a motion in the court proceeding where he obtained a favorable for a writ of execution against FH. 147 and 148 5. shall be delivered to the judgment debtor ============================ ================== FH must be owned by person constituting it 3. and others who have rendered service or furnished materials for the construction of the building NOTE: The exemption is limited to the value allowed by the Family Code 4. 3. SALE Sale. Paternity and Filiation (Arts. the court shall decide Requisites For Creditor To Avail Of The Right To Execute: (Art. 160) 1. To claim filiation i. Proof of filiation ii. FH must be permanent 4. materialmen. The spouse of the person who constituted the family home must also give his/her written consent 3. Or Encumbrance Of The Family Home 1. the obligations enumerated in Art. either at the time of its constitution or as a result of improvements introduced thereafter its constitution. To impugn filiation 4. 155) 1. 155 3. First. Non-payment of taxes 2. Only one FH can be constituted 2.2. Kinds of Filiation 2. Legitimated Children 3. 157 PROCEDURE: 1. A majority of the beneficiaries of legal age must also give their written consent 4. The person who constituted the same must give his/her written consent 2. EXEMPTION FROM EXECUTION General Rule: (Art. FH continues despite death of one or more spouses or unmarried head of family for 10 years or as long as there is a minor beneficiary (Art. 153) The family home (FH) is exempted from: 1. Alienation.157) 3. Assignment. If creditor proves that actual value exceeds the maximum amount the. architects. Legitimate Children b. mechanics. Attachment Exceptions: (Art. Illegitimate Children c. If FH is sold for more than the value allowed. 155 must be paid (listed above) b. In case of conflict. FC) 1. 163182. Children by Nature a. Hearing on the motion where the creditor must prove that the actual value of the FH exceeds the maximum amount fixed by the Family Code. court will order its sale in execution. Rule applies to valid. Donation. Execution 2. The excess. the proceeds shall be applied as follows: a. Debts incurred prior to constitution of home 3. 4. H is claim is not among those excepted under Art. Then the judgment in favor of the creditor will be paid. Debts secured by mortgages on the premises 4. voidable and even to common-law marriages under Arts. builders.000 in URBAN areas and P200. if any. QUALIFIED PROPERTY Actual value of the family home shall not exceed P300. He must be a judgment creditor TOPICS UNDER SYLLABUS K. Admissibility of Scientific Testing b. Rights of Legitimate/Legitimated/Illegitimat e Children ======================== ================== CIVIL LAW REVIEWER Page 35 of 401 . 2. Debts due laborers. plus all the costs of execution c. 159) 6. Forced Sale 3. 2. Actions regarding filiation a.

123450. is legitimate under the first marriage notwithstanding the admission in pleadings by the wife and his second husband that the child is their legitimate son. Conceived as a result of artificial insemination 2. Legitimate Children probative value. were not disqualified by any impediment to marry each other 3. Born of voidable marriages born after the decree of annulment ============================ ==================== LEGITIMATE CHILDREN -are those conceived OR born during a valid marriage. No. Similarly. which has not been nullified or annulled. The parents. Born of marriages which are void ab initio such as bigamous and incestuous marriages and void marriages by reason of public policy 2. Aug. 172. INCLUSIONS: Those children who are: 1. Proof of filiation PROOF OF FILIATION General Rule: (Art.TOPICS UNDER SYLLABUS G. 2005] b. Exceptions: Those children who are: 1. 53 (failure to record the judgment.Kinds of Filiation 2 Children by Nature 1. in eyes of the law. [G. the child. 1) Filiation of legitimate or illegitimate children is established by any of the following: 1. CA. Concepcion v. 31. The record of birth appearing in the civil register or a final judgment • Must be certificate prepared by the father. Legitimated Children REQUISITES FOR LEGITIMATION: 1.Retroacts to the time of the child’s birth Legitimation may be impugned only by those who are prejudiced in their rights within 5 years from the time the cause of action accrues (death of parents of legitimated child) • 3. 31. Conceived or born of a subsequent marriage under Art. PATERNITY AND FILIATION 1. Hence a child born inside a bigamous marriage.Confers on the child the rights of legitimate children . To claim filiation i. is considered a child under the first marriage. Of mothers who may have declared against their legitimacy or was sentenced as an adulteress (Art. Legitimated. and delivery of children’s presumptive legitime) 5.167) 6. Illegitimate Children ILLEGITIMATE CHILDREN -are those conceived AND born outside a valid marriage.CHILDREN BY NATURE a. Aug. CA.R. any declaration of the mother that her child is illegitimate has no c.R. [G. Thus. No. Legally adopted 7. Concepcion v. Only the law determines legitimacy or illegitimacy. which is void. There is a valid marriage subsequent to the child’s birth • • Legitimation takes place by the subsequent marriage of the child’s parents Effect of legitimation: . at the time of child’s conception. partition and distribution of properties. Born of a voidable marriage before decree of annulment 3. 123450. 2005] An agreement by parties as to the status of a child is void. 36 (psychological incapacity) becomes final & executory 4. A of live birth purportedly • CIVIL LAW REVIEWER Page 36 of 401 . ACTIONS REGARDING FILIATION a. conceived and born outside of wedlock of parents without impediment at the time of conception and who subsequently married • A child born inside a valid marriage is legitimate. Par.KINDS OF FILIATION 2. The child was conceived and born outside of wedlock 2. Conceived or born before judgment of annulment or absolute nullity under Art.

any authentic writing is treated not just a ground for compulsory recognition. 172. 86302. it is in itself a voluntary recognition that does not require a separate action for judicial approval. not accidentally. The written instrument is recorded in civil registry together with the birth certificate of the child • b. Open and continuous possession of the status of a legitimate (or illegitimate) child • Definition. Eceta. and no further court action is required. If the husband dies after filing without desisting c. the legitimate filiation may be proved by: 1. Cabatania v. 21. 172. by continuous and clear manifestations of parental affection and care. 2) In the absence of these evidences. The possession of such status means that the father has treated the child as his own. or in any authentic writing is. Admissibility of Scientific Evidence REQUISITES FOR CHILDREN BY ARTIFICIAL INSEMINATION TO BE CONSIDERED LEGITIMATE: (Art. Jison v. February 24. or both the husband and a donor must be used. spontaneously and without concealment though without publicity. in itself. 2. 164) 1. Par. but also the apparent desire to have and treat the child as such in all relations in society and in life. a consummated act of acknowledgement of the child. 2. Continuous does not mean that the concession of status shall continue forever but only that it shall not be of an intermittent character while it continues. Eceta v. Any other evidence allowed by the Rules of Court and special laws • The due recognition of an illegitimate child in a record of birth. a will. In Benitez-Badua v. 3. CA. Mendoza v. An admission of legitimate or illegitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned 2. 1998] ii. Sept. It is not conclusive evidence of the truthfulness of the statements made there by the interested parties. which cannot be attributed to pure charity.• identifying the putative father is not competent evidence of paternity when there is no showing that the putative father had a hand in the preparation of said certificate. The artificial insemination has been authorized or ratified by both spouses on a written instrument executed and signed by them before the birth of the child. AND 4. 2 of Art. The artificial insemination must made on the wife. a statement before a court of record. 2. The local civil registrar has no authority to record the paternity of an illegitimate child on the information of a third person. [G. [441 SCRA 96 (2004)] Record of Birth merely prima facie evidence. In fact. it is wellsettled that a record of birth is merely a prima facie evidence of the facts contained therein. 2. If the husband dies before the expiration of period for filing the action b. 124853. No. 1991] How to prove. [G. If the child was born after the death of the husband CIVIL LAW REVIEWER Page 37 of 401 . There must be evidence of the manifestation of the permanent intention of the supposed father to consider the child as his.R. [428 SCRA 204 (2004)] NOTE: For illegitimate children: when the action is based on the par. To impugn filiation WHO MAY IMPUGN THE LEGITIMACY OF A CHILD: General Rule: Only the husband can impugn the legitimacy of a child Exceptions: The heirs of the husband may impugn the child’s filiation in the following cases: a. directly and not through others. CA. The sperm of the husband. CA. No.R. but continuously. or of a donor. the action may be brought ONLY during the lifetime of the alleged parent Exception: (Art. CA. Such acts must be of such a nature that they reveal not only the conviction of paternity.

his heirs can no longer file the action after death 3. Physical incapacity of the husband to have sexual intercourse with his wife b. except in the case of children conceived through artificial insemination 3. while the husband has his residence ABROAD. incapacitated or insane. 176 of FC as of March 19. or undue influence PERIODS FOR FILING OF ACTION TO IMPUGN LEGITIMACY: 1. If the husband (or his heirs) does NOT RESIDE in the city or municipality where the child’s birth took place or was recorded BUT his residence is IN THE PHILS. RULE ON STATUS OF A CHILD BORN WITHIN 300 DAYS AFTER TERMINATION OF FORMER MARRIAGE (Art. 2004  can CIVIL LAW REVIEWER Page 38 of 401 . the action will survive and his heirs will substitute for him 5. or vice-versa: within 3 years NOTE: • The period shall be counted from the knowledge of the child’s birth or its recording in the civil register. or c. in proper cases) resides in the SAME city or municipality: within 1 year from knowledge of the birth OR its recording in the civil register 2. The child can bring the action during his lifetime 2.A. In case of children conceived through artificial insemination. if the child’s birth was concealed from or was unknown to the husband or his heirs. 2. egitimacy CANNOT be collaterally attacked or impugned. If its proved that for biological or other scientific reasons. RIGHTS OF LEGITIMATE/LEGITIMATED/ILLEGITIMATE CHILDREN RIGHTS OF LEGITIMATE AND ILLEGITIMATE CHILDREN LEGITIMAT BASIS ILLEGITIMATE E Surname Use of Use of mother’s father and surname mother’s NOTE: R. his heirs can file the action for him within 5 years from the child’s death 4. when the written authorization or ratification of either parent was obtained through mistake. violence. If the child dies during minority or in the state of insanity. his guardian can bring the action in his behalf 4. ACTION TO CLAIM LEGITIMACY: 1. If the child’s birth took place or was recorded in the PHILS. Serious illness of the husband which absolutely prevented intercourse 2. If the child dies after reaching majority without filing an action. intimidation. HOWEVER. 9255 surname amended Art. the period shall be counted from the discovery or knowledge of the birth of the child or of the act of registration of said birth. If the child was born before 180 days after celebration of 2nd marriage provided born within 300 days after the termination of the 1st marriage: considered to have been conceived during the first marriage. It was physically impossible for the husband to have sexual intercourse with his wife within the first 120 days of the 300 days which immediately preceded the birth of the child because of: a. fraud. whichever is earlier. Fact that the husband and wife were living separately in such a way that sexual intercourse was not possible. If the child was born after 180 days following the celebration of the 2nd marriage whether born within 300 days after termination of 1st marriage or afterwards: considered to have been conceived during the second marriage. If the child is a minor. If the child dies after commencing the action. 168): Rules in the absence of proof to the contrary: 1. the child could not have been that of the husband. If the husband (or his heirs.• L GROUNDS TO IMPUGN THE LEGITIMACY OF THE CHILD: (EXCLUSIVE LIST) (PBA) 1.: within 2 years 3. It can be impugned only in a direct suit precisely filed for the purpose of assailing the legitimacy of the child.

QUALIFICATIONS DISQUALIFICATIONS OF ADOPTER AND Transmissi ble to heirs under Art.A. 1 has the right to file an action to prove nonfiliation during his lifetime. Qualifications and Disqualifications of Adopter 3. 9255. Father’s admission in private handwritten document (R. 8043: INTER-COUNTRY ADOPTION ACT OF 1995 1. 9255 are not complied with • Use the surname of the father if the child’s filiation has been expressly recognized by the father. the supervised trial custody is undertaken.use father’s surname Entitled to legitime and other successional rights granted to them by the NCC Entitled to receive support from parents. and in proper cases. 2004) NOTE: The father under R.A. Father’s admission in public document An alien or a Filipino citizen permanently residing abroad may file an application for inter-country adoption of a Filipino child if: 1.A. either through: 1. 174 His/her whole lifetime regardless of type of proof provided under Art. FC) • Inter-country Adoption Law • Domestic Adoption Law 1. and the decree of adoption is issued outside the Philippines. Sec. ascendants. If married. =========================== ================== Support Receive support according to the provision of the FC Action for claim for legitimacy or illegitimacy • His/her whole lifetime regardless of type of proof provided under Art. Construction 2. 172 Legitime Entitled only to ½ of legitime of legitimate child 3. 1 • ONLY lifetime of alleged parent for Art. Rights Granted by Adoption 5. Sec. 172 par. 9255. CONSTRUCTION INTER-COUNTRY ADOPTION -is the sociolegal process of adopting a Filipino child by a foreigner or a Filipino citizen permanently residing abroad where the petition is filed. effective March 19. 2. 2 No No right to inherit ab intesto from legitimate children and relative of father and mother under Art. 1.172 par. Rules on Succession 6. brothers and sisters under Art. at the time of application unless the adopter is the parent by nature of the child to be adopted or the spouse of such parent 2. Rescission of Adoption ======================== ================== R. his/her spouse must jointly file for the adoption CIVIL LAW REVIEWER Page 39 of 401 .A. Qualifications and Disqualifications of Adopted 4.173? Yes Right to inherit ab intesto Yes NOTE: • Use the surname of the mother if the requisites of R. ADOPTION (Arts 183-193. Record of birth in civil register 2. 992 NCC TOPICS UNDER SYLLABUS L. At least 27 years of age and at least 16 years older than the child to be adopted.

in accordance with the Child and Youth Welfare Code • No child shall be matched to a foreign adoptive family unless it is satisfactorily shown that the child cannot be adopted locally Qualified children: Section 25. in keeping with the means of the family 2. GUARDIAN . Possesses all the qualifications and none of the disqualifications provided herein and in other applicable Philippine laws 1. Of legal age b.N.3. ALIEN a. 8552: DOMESTIC ADOPTION ACT WHO MAY ADOPT: 1. including the child to be adopted 7. EXCEPT in the case of: i. In possession of full civil capacity and legal rights c. or 3. Emotionally and psychologically capable of caring for children.with respect to the ward after the termination of the guardianship CIVIL LAW REVIEWER Page 40 of 401 . QUALIFICATIONS DISQUALIFICATIONS OF ADOPTER AND a child who has been voluntarily or involuntarily committed to the Department. Has not been convicted of a crime involving moral turpitude 5. The adopter is the spouse of the legitimate parent of the person to be adopted g. At least 16 years older than the person to be adopted. Convention on the Rights of the Child. FILIPINO CITIZEN a. Comes from a country with whom the Philippines has diplomatic relations and whose government maintains a similarly authorized and accredited agency and that adoption is allowed under his/her national laws 9. He/she has been living in the Philippines for at least 3 continuous years prior to the filing of the application for adoption and maintains such residence until the adoption decree is entered. QUALIFICATIONS DISQUALIFICATIONS OF ADOPTED AND WHO MAY BE ADOPTED: Only a legally free child may be the subject of inter-country adoption LEGALLY-FREE CHILD . Has not been convicted of any crime involving moral turpitude e. Possessing the same qualifications as above stated for Filipino nationals b. CONSTRUCTION 2. or ii. Of good moral character d. Agrees to uphold the basic rights of the child as embodied under Philippine laws. One who is married to a Filipino citizen and seeks to adopt jointly with his/her spouse a relative within the 4th degree of consanguinity or affinity of the Filipino spouse. His/her country has diplomatic relations with the Philippines c. abandoned. Has the capacity to act and assume all rights and responsibilities of parental authority under his national laws. and has undergone the appropriate counseling from an accredited counselor in his/her country 4. Eligible to adopt under his/her national law 6. f. The adopter is the natural parent of the child to be adopted. or ii. Article 8 of the Rules and Regulations provide: any child who has been voluntarily or involuntarily committed to the Department as dependent. In a position to support and care for his legitimate and illegitimate children. or neglected pursuant to the provisions of the Child and Youth Welfare Code may be the subject of Inter-Country Adoption • R. the U. unless: i. A former Filipino citizen who seeks to adopt a relative within the 4th degree of consanguinity or affinity.A. In a position to provide the proper care and support and to give the necessary moral values and example to all his children. and to abide by the rules and regulations issued to implement the provisions of this Act 8. One who seeks to adopt the legitimate child of his/her Filipino spouse. or iii.

prior to the adoption. if the adoptee and his/her biological parents had left a will. QUALIFICATIONS DISQUALIFICATIONS OF ADOPTED AND WHO MAY BE ADOPTED: 1. Severance of all legal ties between the biological parents and the adoptee and the same shall then be vested on the adopters EXCEPT in cases where the biological parent is the spouse of the adopter 2. the law on testamentary succession shall govern. 10 years old or over and living with him 5. WRITTEN CONSENT NECESSARY FOR ADOPTION: (A-BLISS-A) 1. the adopters and the adoptee shall have reciprocal rights of succession without distinction from legitimate filiation. if known. Retroactive effect may perhaps be given where such is essential to permit the accrual of some benefit or advantage in favor of the adopted child. The spouses are legally separated from each other. Spouse of the adopted. Deemed a legitimate child of the adopter 3. if married 6. This also applies in case the petitioner dies before the issuance of the decree of adoption • Where the petition for adoption was granted after the child killed a girl. 4.and clearance accountabilities of his/her financial RULE ON ADOPTION BY SPOUSES General Rule: Husband and wife shall jointly adopt Exceptions: 1. 3. Biological parents of the child. RULES ON SUCCESSION In legal and intestate succession. Tamargo v. [G. Repeated physical and verbal maltreatment by the adopters despite having undergone counseling 2. One spouse seeks to adopt the legitimate son/daughter of the other. Legitimate son/daughter of one spouse by the other spouse. 10 years old or over 4. Spouse of the adopter. One spouse seeks to adopt his/her own illegitimate son/daughter 3. or the legal guardian. No. Child whose adoption has been previously rescinded. or the proper government instrumentality which has legal custody of the child 3. 5. if 10 years of age or over. 3. CA. or 2. RIGHTS GRANTED BY ADOPTION EFFECTS OF ADOPTION: 1. 2.R. Adoptee. if married 7. 1992] 4. Acquired reciprocal rights and obligations arising from parent-child relationship 4. 85044. Adopted children of the adopter. However. Child whose biological or adoptive parents have died provided that no proceedings shall be initiated within 6 months from the time of death of said parents. Illegitimate son/daughter by a qualified adopter to improve his/her status to that of legitimacy. 2. To hold that parental authority had been retroactively lodged in the adopting parents so as to burden them with liability for a tortuous act that they could not have foreseen nor prevented would be unfair and unconscionable. Legitimate children of the adopter. said person has been consistently considered and treated by the adopter as his/her own child since minority. 6. no retroactive effect may be given to the decree of adoption so as to impose a liability upon the adopting parents accruing at a time when the adopting parents had no actual or physically custody over the adopted child. RECISSION OF ADOPTION GROUNDS FOR RECISSION OF ADOPTION: (MASA) 1. Right to use surname of the adopter 5. 10 years old or over EFFECTIVITY OF DECREE OF ADOPTION • A decree of adoption is effective as of the date the original petition was filed. or 6. June 3. Any person below 18 years of age who has been administratively or judicially declared available for adoption. Illegitimate children of the adopter. Person of legal age if. Attempt on the life of the adoptee CIVIL LAW REVIEWER Page 41 of 401 .

Spouses b. Dwelling 3. Sustenance 2. Options of Giver ======================== ================== 1. he is entitled to support only if his need for support is not due to a cause imputable to his fault or negligence ( Art. 2. being in the best interest of the child. without any condition 2. • Adoption. even beyond the age of majority 6. Basis of Support 4. The court shall order the Civil Registrar to cancel the amended certificate of birth of the adoptee and restore his/her original birth certificate. Ascendants and Descendants c. The reciprocal rights and obligations of the adopters and the adoptee to each other shall be extinguished. or to and from place of work (art. 4. PERSONS OBLIGED TO SUPPORT EACH OTHER Persons Obliged To Support Each Other To The Whole Extent: (Art. Legitimate/Illegitimate Brothers and Sisters 2. Abandonment and failure to comply with parental obligations. OR the legal custody of the DSWD shall be restored if the adoptee is still a minor or incapacitated. Legitimate/Illegitimate Brothers and Sisters RULES REGARDING SUPPORT TO ILLEGITIMATE BROTHERS AND SISTERS (WHETHER FULL OR HALF BLOOD): 1. if known. Parents and Legitimate and Illegitimate Children/Descendants d. he is entitled to support from his illegitimate brother or sister to the full extent. Clothing 4. Persons Obliged to Support each other a. Succession rights shall revert to its status prior to adoption. but only as of the date of judgment of judicial rescission. the adopters may disinherit the adoptee for causes provided in Art. 195) TOPICS UNDER SYLLABUS M. ============================ ==================== SUPPORT consists of everything indispensable for: 1.3. 3. WHAT CONSTITUTES SUPPORT a. 196) PROPERTIES THAT ARE LIABLE FOR THE SUPPORT OF THE RELATIVES (SOURCES OF MUTUAL SUPPORT) Spouses CIVIL LAW REVIEWER Page 42 of 401 . Sexual assault or violence 4. 194) • Makes no distinction between natural support (basic necessities) and civil support (those beyond the basics) NOTE: Amount of support shall be in proportion to the means of the giver and to the need of the recipient 2. Transportation – includes expenses going to and from school. Contractual Support 3. If the one asking for support is below majority age. Ascendants and Descendants c. If the one asking for support is already of majority age. shall not be subject to rescission by the adopter • Only the adoptee is given the right to rescind the decree of adoption • However. Vested rights acquired prior to judicial rescission shall be respected. What constitutes support 2. The parental authority of the adoptee's biological parents. 919 NCC EFFECTS OF THE RESCISSION OF THE ADOPTION: 1. SUPPORT (Arts 194-208) 1. Parents and Legitimate/Illegitimate Children/Descendants d. Education – includes schooling (formal education) or training (non-formal education) for some profession. trade or vocation. Spouses b. Medical attendance 5.

and legitimate and illegitimate brothers and sisters 4. Chua. Brothers and sisters (Art. BASIS OF SUPPORT LEGACY OF SUPPORT Based on law CONTRACTUAL SUPPORT Based on contract. separate property of parentspouse. in which case only the excess of what is obliged (based on need) can be attached or subject to execution Follow rules of contracts which says that obligation must be fulfilled (support must be given) no matter what happens (even if you lose your job). Lam v. separate property of parentspouse. or 2. Descendants in nearest degree 3. Res Judicata does not apply. but support paid shall be deducted from share of spouse during liquidation Separate property of the obligor-spouse if the same is not sufficient or there is none. BUT if the change in circumstances are manifestly beyond that contemplation of the parties. the absolute community or conjugal property shall be liable if financially capable. 2. so it can be between strangers CIVIL LAW REVIEWER Page 43 of 401 . 204) Exception to # 2: Existence of legal or moral obstacle ORDER OF LIABILITY IF 2 OR MORE ARE OBLIGED TO SUPPORT: 1. Spouse 2. But if insufficient. other legitimate and illegitimate descendants. But if insufficient.Absolute community of conjugal partnership Common children of the spouses Children of a spouse by another marriage Absolute community or conjugal property Absolute community or conjugal property Under ACP. which support shall be deducted from the share of the spouse upon liquidation of the ACP or CPG Exempt from execution and attachment Not exempt from attachment and execution because it is not a legal obligation Exception: If the giver contracts with a person whom he is obliged by law to support. To give a fixed monthly allowance. OPTIONS OF GIVER Options Of The Person Giving Support: 1. absolute community liable but considered as advances on the share of the parent to be paid during liquidation Under CPG. support may be adjusted accordingly Illegitimate children of either spouse If contained in a will. the payment of the same shall be divided between them in proportion to the resources of each. Ascendants in nearest degree 4. conjugal partnership liable if financially capable. [426 SCRA 29 (2004]) Legitimate ascendants. 199) • When the obligation to give support falls upon two or more persons. apply the rules of contractual support because there is no more obligation of support to speak of since the giver is already dead • Judgment of support is always provisional in character. To receive and maintain the recipient in the giver's home or family dwelling (Art. CONTRACTUAL SUPPORT 3.

under certain circumstances. and even after. Ascendants in nearest degree d. Suspension/Termination of Parental Authority 6. In case of CIVIL LAW REVIEWER Page 44 of 401 . transferred or waived. based on Art 153 CHILDREN From the communit y property From the community property From the separate property of the spouses ============================ ================= TOPICS UNDER SYLLABUS N. in communit which case the If the spouses y property court may are under CPG. CONTEMPT PARENTAL AUTHORITY (PATRIA POTESTAS) -is the mass of rights and obligations which parents have in relation to the person and property of their children until their emancipation. 200) If the concurrent obligees should be the spouse and a child subject to parental authority. Brothers and sisters (Art. No obligation to he/she will not support except if be entitled to there is legal support. require the guilty support is spouse to give considered an support advance of such spouses' share. the rule does not apply if the spouses are under ACP. Contempt 2. Over Person 3. • When two or more recipients at the same time claim support from one and the same person legally obliged to give it. Spouse b. Substitute and Special Parental Authority 5. and the obligor does not have sufficient means to satisfy all claims: .e. except in cases authorized by law (Art. 203 applies. It is purely personal and cannot be exercised through agents 5. It cannot be renounced. if the claimant spouse is the guilty spouse. without prejudice to his right to claim from the other obligors the share due from them. OVER PERSON RULES AS TO THE EXERCISE OF PARENTAL AUTHORITY: 1. From the separation. 210) 3. the judge may order only one of them to furnish the support provisionally. i. It is a natural right and duty of the parents (Art. It is jointly exercised by the father and the mother (Art. in case of urgent need and by special circumstances. 211) 4.• However. Descendants in nearest degree c. The father and the mother shall jointly exercise parental authority over the persons of their common children. Parental Authority 1. It is temporary 2. Over Property 4.The order established in the preceding article shall be followed: a. Characteristics Of Parental Authority: 1. Liability of Parents for Acts of Children ======================== ================== 1. the child shall be preferred SOURCES OF SUPPORT DURING PENDING AFTER THE LITIGATION LITIGATION MARRIAGE SPOUSES From the community property assets except if Art. 209) 2.

the surviving grandparent shall exercise substitute parental authority (Art. 2002] • In case of death. No. the father’s decision shall prevail. or c. [G. absence or unsuitability of both parents. The father and mother shall jointly exercise legal guardianship over the property of the CIVIL LAW REVIEWER Page 45 of 401 . the father's decision shall prevail. The surviving grandparent 2.000. over 21 years old. HOWEVER. The oldest brother or sister. this liability is subject to the defense that the person exercising parental authority exercised proper diligence. unless unfit or disqualified (Art. neglected children. SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY Order Of Substitute Parental Authority: 1. abandoned children. or institution engaged in child care Liability Of Those Exercising Special Parental Authority Over The Child: 1. to testify against his parents or grandparents.R. School 2. The parents and judicial guardians of the minor or those exercising substitute parental authority over the minor are subsidiarily liable for said acts and omissions of the minor. 214) No descendant shall be compelled. 216) • In case of foundlings. over 21 years old. 3. or abused children. Individual. in criminal cases. Similar institutions duly accredited by the proper government agency (Art.disagreement. entity. Orphanages. especially the choice of the child over 7 years old. unless unfit or disqualified 3. 211) 2. except when such testimony is indispensable in a crime against the defendant or by one parent against the other. • 3. They are principally and solidarily liable for damages caused by the acts or omissions of the child while under their supervision. 122906. 217) Person Exercising Special Parental Authority: 1. parental authority is with the mother. unless there is a judicial order to the contrary (Art. 2. February 7. instruction or custody. Administrators and teachers 3. unless the parent chosen is unfit GR: A child under 7 years of age shall not be separated from the mother UNLESS the court Separation finds compelling reasons to of parents order otherwise (TENDER (Art. Heads of children’s homes b. unless the court surviving appoints a guardian parent Parent designated by the court. 213) YEARS DOCTRINE) Paramount consideration in matters of custody of a child is the welfare and well-being of the child Tonog v. minor common child without court appointment In case of disagreement. (Art 215) 2. WHO EXERCISES PARENTAL AUTHORITY Absence of either Parent present parent Death of either Surviving parent parent Remarriag e of Surviving parent. If the child is illegitimate. the parent is required to furnish a bond of not less than 10% of the value of the child’s property or income 4. summary judicial proceedings shall be instituted so that they may be entrusted to: a. OVER PROPERTY Effect Of Parental Authority Upon The Property Of The Child: 1. unless there is judicial order to the contrary If the market value of the property or the annual income of the child exceeds P50. The child's actual custodian. taking into account all relevant considerations. Court of Appeals.

Final judgment divesting parental authority 5. Gives corrupting orders. Funerals (Arts. or relinquish parental unsuitability of authority over the child parents.CC) Q. Judicial declaration of abandonment 4. CC) P. Parents exercising parental authority has subjected the child or allowed him to be subjected to sexual abuse • Lesbianism is not compelling reason to deprive the mother of a child below seven years of age. June 28. 407-413.CC) =================== ============== N. No. Death of child 3. habeas corpus has no leg to stand on to deprive the mother of a child below seven years of age.DISTINCTION BETWEEN SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY SUBSTITUTE SPECIAL PARENTAL PARENTAL AUTHORITY AUTHORITY It is exercised concurrently with the parental authority of It is exercised in the parents. Treats child with excessive harshness and cruelty 3. Judicial declaration of absence or incapacity or person exercising parental authority 5.R. Compels child to beg 5. Emancipation of child 4. SUSPENSION/TERMINATION OF PARENTAL AUTHORITY Grounds For Suspension Of Parental Authority: (CHOBA) 1. FUNERAL General Guidelines: CIVIL LAW REVIEWER Page 46 of 401 . the husband must clearly establish that her moral lapses have had an adverse effect on the welfare of the child or have distracted the offending spouse from exercising proper parental care. to the person with special parental authority. 305-310. Conviction of parent for crime with civil interdiction 2. Civil Register (Arts. 381-396. G. parents temporarily absence. 154994. The case of death. unless there are compelling reasons to do so. Adoption of child 2. Gualberto v. LIABILITY OF PARENTS FOR ACTS OF CHILDREN Liability Of Parents For Torts Committed By Their Minor Children: • Parents and other persons exercising parental authority shall be civilly liable for the injuries and damages caused by the acts or omissions of their minors PROVIDED the children are living in their company and under their parental authority • This is subject to the appropriate defenses provided by law NOTE: • Parental authority and responsibility are inalienable and may not be transferred and renounced except in cases authorized by law • Parents may exercise parental authority over their child’s property Grounds For The Permanent Termination Of Parental Authority : 1. Surname (Arts 364-380. Gualberto. Death of parents 2. counsel or example 4. Writ of =================== ============== TOPIC UNDER SYLLABUS N. To deprive the wife of custody.CC) O. Appointment of general guardian 3. Subjects to or allows him to be subjected to acts of lasciviousness • The suspension or deprivation may be revoked and the parental authority revived in a case filed for the purpose or in the same proceeding if the court finds that the cause therefore has ceased and will not be repeated 6. 2005 Cases Where Parental Authority May Be Revived: 1. Absence (Arts.

199 of FC shall decide 4. Brothers and sisters 2. First name and maiden name + her husband’s surname b. In the absence of expressed wishes. 373) Wife is the guilty party Marriag e is annulle d (Art. Any person who disrespects the dead or allows the same shall be liable for damages WIFE O.1. Duty and right to make arrangement in funerals in accordance with Art. Retain the use of her maiden name (use of husband’s surname is not a duty but merely an option of the wife) She can use the surname of the husband as if he were still living She shall resume using her maiden name Illegitimate child Husband is dead (Art. the persons in Art. an adopted child can do the same. use such additional name OR 374) surname as will avoid confusion CIVIL LAW REVIEWER Page 47 of 401 . or 2. 199 FC: a. The funeral shall be in keeping with the social position of the deceased 3. SURNAME USE OF SURNAME SURNAME TO BE USED Father’s surname Father’s surname Adopter’s surname 1. Resume using her maiden name.372) legal separation Laperal v. Father’s name if they were recognized by their father in the record of birth or in an authentic writing Father’s surname Mother’s surname Valid marriag e Husband is living (Art. [19 SCRA 721] • 1. Her husband’s full name. such as “Mrs” d. or 2. The funeral shall be in accordance with the expressed wishes of the deceased a. First name + her husband’s surname c. Ascendants in nearest degree d. 370) CHILD CONCERNED Legitimate child Legitimated child Adopted child SURNAME TO BE USED a. Continue employing her husband’s surname Wife is UNLESS: the a. but prefixing a word indicating that she is his wife. Descendants in nearest degree c. She or the former husband is married again to another person Continue using the name and surname she was Legally separated employing prior to the (Art. his religious beliefs or affiliation shall determine b. The interest of justice and of the child permits an illegitimate child to change his name adopting the surname of his parent’s other spouse. In case of doubt. Republic. Calderon vs. Court decrees innocent otherwise. Mother’s surname. or party b. Spouse b.[6 SCRA 357 (1962)] IDENTITY OF NAMES AND SURNAMES Between Younger person is obliged to persons (Art.37 1) Conceived prior to the annulment of the marriage Conceived after the annulment of the marriage • Since a legitimate child can ask for a change of name. Republic.

When Administration Shall Cease 1. If no legal separation. Death of the absentee is proved and his estate or intestate heirs appear. and so on P. shall either : a. ABSENCE Persons Who May Be Appointed By Way Of Court Order As The Representative Of An Absentee In Case Of Provisional Absence Or As An Administrator 1. Grandsons and other male descendants. A third person appears.Between ascendants and descendants (Art. Son may use the word “Junior” 2. 2. Add the Roman numerals II. Absentee appears personally or by means of an agent. Add the mother’s surname c. or that of the conjugal partnership. III. the spouse present 2. 3. If no spouse or if the spouse present is a minor. Add a middle name b. without judicial authority. 375) 1. any competent person • The spouse who is appointed as administratrix of the absentee spouse’s property cannot alienate or encumber the same. showing by a proper document that he has acquired the absentee's property by purchase or other title • The property shall be at the disposal of those who may have a right thereto CIVIL LAW REVIEWER Page 48 of 401 .

He left an agent but agent's power has expired Judicial Declaration of Absence -Necessary for interested persons to be able to protect the interest of the absentee WHEN TO FILE WHO MAY FILE? a. Spouse Voluntary Intestate Presumption of death ORDINARY ABSENCE • 4 years  person presumed dead for purposes of remarriage of the spouse present • 7 years  presumed dead for all purposes EXCEPT for those of succession • 10 years  person presumed dead for purposes of opening succession EXCEPT if he disappeared after the age of 75. Presumption of death takes effect by operation of law.After 2 years having elapsed without any news about the absentee or since the last news With administrator . No statutory period a. from the time he is considered missing in action aa Danger of death under other circumstances. or a friend may appoint a person to represent him in all that may be necessary. FC) a. b. FC) REMEDY Receivership (Art. He did not leave any agent.After 5 years from time of disappearance a. Judicial separation of property (Art. 12.STAGES Provisional Absence . FC) b. a relative. Friend b. 135.A person disappears from his domicile. 12. whereabouts are unknown and a. Interested party b. from time of disappearance Those who may have over the property of the absentee some right subordinated to the condition of the absentee's death Spouse Action to declare a person presumptively dead is proper only when the spouse of the absentee wants to remarry Except for purposes of remarriage. heirs d. an absence of 5 years is sufficient EXTRAORDINARY ABSENCE aa If a person rode an airplane or sea vessel lost in the course of voyage. Authority to be sole administrator of the conjugal partnership (Art . 12. When the spouse of the absentee is asking for separation of property(Art. there is no need for filing a case to declare that one is presumptively dead. Relative c. or b.142. FC) c. Judicial declaration of absence does not take effect until six months after its publication in a newspaper of general circulation. heirs c. from the time of loss of the airplane or sea vessel aa If a person joined the armed forces who has taken part in war. COMMENTS In provisional absence. When the spouse of the absentee is asking the Court that the administration of all classes in the marriage be transferred to her(Art. • 4 years  for all purposes including those of opening succession • 2 years  for purposes of remarriage CIVIL LAW REVIEWER Page 49 of 401 . FC) Without administrator . the judge at the instance of an interested party.

New first name or nickname has been habitually and continuously used by the petitioner and he has been publicly known by the first names and nicknames in the community 5. screen. By using the name of another. changing the first name to make it compatible with the sex he transformed himself into through surgery may only create grave complications in the civil registry and the public interest. When the request for change is a consequence of a change of status. Mere convenience is not justifiable. Loss of citizenship 13. Use of name is in good faith. Naturalization 12. Judicial determination 16.A. Use is unauthorized 3. Use of another's name is to designate personality or to identify a person REMEDIES AVAILABLE TO THE PERSON WHOSE NAME HAS BEEN USURPED: 1. Petitioner’s true and official name is tainted with dishonor 3. Petitioner’s true and official name is ridiculous. or pen name. Civil (insofar as private persons are concerned) a. and 2. event. provided: 1. Injunction b. ELEMENTS OF USURPATION OF NAME: 1. Acts. Adoption 10. or other reason not prohibited by law or morals • The law does not allow dropping of middle name from registered name unless there are justifiable reasons to do so. Damages (actual and moral) 2. 9048 does not sanction a change of first name on the ground of sex reassignment.Q.R. and does not have a middle name. Petition must be verified PROPER AND REASONABLE CAUSES THAT MAY WARRANT THE GRANT OF A PETITION FOR CHANGE OF FIRST NAME/NICKNAME: 1. Oct. Middle names serve to identify the maternal lineage filiation of a person as well as further distinguish him from others who may have the same given name and surname as he has. It consists in the possibility of confusion of identity between the owner and the usurper. Annulment of marriage 7. Change of name General Rule: Entries in the civil register may be changed or altered only upon a judicial order. Must not be filed within 30 days prior to an election 3. R. CIVIL REGISTER MATTERS RECORDED/ENTERED IN THE CIVIL REGISTER: 1. 174689. events and judicial decrees concerning the civil status of persons 2. Voluntary emancipation of a minor 17. 2007 6.implies some injury to the interests of the owner of the name. 4. Exception: Clerical or typographical errors or change in the name or nickname can be changed administratively through verified petition with the local office of the civil registrar. Civil interdiction 15. Legitimation 9. An illegitimate child whose filiation is not recognized by the father bears only a given name and his mother’s surname. Death 5. G. Judgments declaring marriage void from the beginning 8. Silverio vs. Marriage 4. a desire to avoid unnecessary trouble. An actual use of another's name by the defendant 2. Acknowledgement of natural children 11. Legal separation 6. 22. no injury is caused to that person's right 3. No. 2. Birth 3. 9048) • R. Recovery of citizenship 14.A. When the change is necessary to avoid confusion (Sec. Republic. Criminal (when public affairs are prejudiced) WHEN USE OF ANOTHER'S NAME IS NOT ACTIONABLE: Used as stage. order or decree concerning the civil status of persons or change of name PROCEDURAL REQUIREMENTS FOR A PETITION FOR CHANGE OF NAME: 1. such as when a natural child is acknowledged or legitimated USURPATION OF NAME . 3 years residency in the province where change is sought prior to the filing 2. Rather than avoiding confusion. Petitioner’s true and official name is extremely difficult to write or pronounce 4. When use is motivated by modesty. unless legitimated or subsequently acknowledged by the father in a public document or private handwritten • . Who may file petition: Any person having direct and personal interest in any act.

R. 159966. Oct. Silverio vs. There is no special aw in the Philippines governing sex reassignment and its effects. March 30. such as when a • NOT nationality. [G. Republic. 9048): request for change is 1. citizenship or nationality of a party (substantial): adversarial proceeding Change of sex is not a mere clerical or typographical error. Change of first name or nickname • • legitimated If the correction is clerical: summary proceeding If the rectification affects the civil status. civil status  acknowledged or needs court order 2.A. 22. 2007] • NOTE: The new law. In Re: Petition for Change of Name of Wang. 2005] CHANGE OF ENTRIES IN CIVIL REGISTRY WITHOUT JUDICIAL WITH JUDICIAL AUTHORITY AUTHORITY Matters which may Change of surname be made by the can only be done concerned city or through a court municipal registrar proceeding or consul general EXCEPT when the (R.R. 174689.[G.A. No.instrument.R. 9048. No. applies only to clerical and typographical errors in entries of name and does not modify the rules mentioned above . Clerical or a consequence of a typographical error change of status. natural child is age.

unique object Whether in the Custody of the Court or Free A. Movable Property 3. food. Sun) III. Bicerra v. Principal B. Specific – one referring to a single. in the absence of stipulation of the improvements thereon. B. and slag dumps. and waters either running or stagnant • Once a house is demolished. roads and constructions of all kinds adhered to soil − a structure which is merely superimposed on the soil may be considered movable. buildings. while the matter thereof forms parts of the bed. Due to no ownership (e. Movable or personal property B. Immovable or real property 2. Electricity. Outside the commerce of man Existence A. Immovable Property 2. land. 6. Classification of Property 1. CLASSIFICATION OF PROPERTY 8. Public Dominion b. Within the commerce of man (or which may be the objects of contracts or judicial transactions) B. Teneza. when separated from the body) 3. Alienability 9. Generic – one referring to a group or class B. recreation) 2. its character as an immovable ceases. According to Ownership a. Fungible – capable of substitution by other things of the same quality and quantity B. with capacity to satisfy human wants and needs. Private Ownership 4. 5. IMMOVABLE PROPERTY Juridical Classification of Immovable Properties: (NIDA) 1. Private 3. Classification of Property (Arts.g. buildings. Mobility and Non-mobility A.g. the identical thing must be given or returned Nature or Definiteness A. clothing. A. Common things (res communes) • Exception: those that may be appropriated under certain conditions in a limited way (e. quarries. hence. In “custodia legis” – in the custody of the court B. ===================== ============== PROPERTY: An object or a right which is appropriated or susceptible of appropriation by man. wild animals) or abandonment by the owner. Intangible or incorporeal Dependence or Importance A. Utility for the satisfaction of some human wants • endows property with value susceptible of pecuniary estimation (e. Due to physical impossibility (e. CC) 1. Substantivity or individuality • quality of having existence apart from any other thing (e. 415 par 1 & 8 NCC) A. Accessory Capability of Substitution A. Still a building by itself may be mortgaged apart • . mines. PROPERTY ===================== ============== TOPICS UNDER SYLLABUS A. A. blood. 7. Future property (res futurae) NOTE: Both present and future property may be the subject of sale but generally not the subject of donation. Public B. Human body) IV. Non-Fungible – incapable of such substitution. Requisites of Property: (USA) 1. Ownership A.g. Tangible or corporeal B. oxygen) II.g.g.g.II. Appropriability • susceptibility of being possessed by men • not susceptible of appropriation: I. Present property (res existents) B. Materiality or Immateriality A. [6 SCRA 649 (1962)] A mortgage of land necessarily includes. Due to legal impossibility (e. 414418. “free” property 1. By nature – cannot be moved from place to place because of their nature (Art. shelter.

[6 SCRA 197 (1962)] • 2. 415 par 10) 2. May still be considered as immovable – If there is intent to put them back. pigeon houses.9) A. By destination – movable placed on immovable for the utility it gives to the activity carried thereon (Art. immovable − once cut or uprooted. PCI Leasing. Such would be a real estate mortgage for the building would still be considered immovable property. Everything attached to an immovable in a fixed manner that it cannot be separated without breaking the material or deterioration of the object − intent to attach permanently is essential − On temporary separation: 2 points of view: I. MOVABLE PROPERTY Movable Property: (SIFTOS) 1. third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. 415 par 2. Serg’s Products v. [37 Phil. Prudential Bank v.[44 Phil 933 (1922)] 2. Examples− .6) A. Ramirez. Placed by the owner of the immovable or his agent II. docks & floating structures – intended by their nature and object to remain at a fixed place on a river. Leung Yee v. receptacles. Immovable that are designated as movable by special provision of law. beehives. City Assessor. After agreeing. 415 par 4. Panis. painting or other objects for use or ornamentation Requisites: (OP) I. By analogy/by law – contracts for public works. Placed by the owner of the or his agent II. machines must be essential and principal elements in carrying out the industry − does not include incidentals (movables without which the businesses can still continue or carry on their functions) • Equipment destined only to repair or service a transportation business may not be deemed real property. Example− • ½ interest in the business is personal property. Animal houses.4.7. instruments or implements intended by owner of the tenement or his agent for an industry or works which may be carried on in a building & which tend directly to meet the needs of such works/industry − attachment or incorporation to the immovable is not essential Requisites: (COE) I. Intent to attach them permanently to the tenements D. reliefs. placed by the owner of the building or property or his agent III. Machinery. or breeding places B. Susceptible of appropriation that are not included in enumeration in immovables. they cease to be immovables Except: Uprooted Timber B. [153 SCRA 390 (1987)] The contracting parties may validly stipulate that a real property be considered as personal. Involuntary Insolvency of Strochechker v. fertilizers – actually used on a piece of land C. By incorporation – essentially movables but attached to an immovable in a fixed manner to be an integral part of it (Art. 644 (1981)] • A valid real estate mortgage can be constituted on the building erected on the land belonging to another. they are consequently estopped from claiming otherwise. servitude & other real rights over immovable property (Art. [328 SCRA 299 (2000)] of similar nature including the animals in these places Requisites: (OP) I. plants & growing fruits – while adhered to soil. Movable – because the material fact of incorporation is what determines its condition C. II. Strong Machinery.3.from the land on which it has been built. Intent to attach them permanently to the land 3. However.6. Mindanao Bus v. industry or works must be carried on inside the building or on the land II. lake or coast.5. fish ponds. Statues. 4. Trees.

Non-fungible (res nec fungibles) – identical thing is returned. Navarro v. According to nature a. Examples− • Electricity. 4. Consumable – cannot be utilized w/o being consumed b. (City of Zamboanga Del Norte v. However. quality and quantity) a. is an article bought and sold like other personal property and is capable of appropriation by another.[9 SCRA 63 (1963)] Forces of nature brought under control by science. • Properties which the government owns for fundamental purposes for rendering government services are properties of public dominion. they can be removed by the State from the LGUs without having to pay just compensation because the LGUs are merely acting as agents. Carlos. such as government buildings and vehicles C. Public Dominion Public Dominion – outside the commerce of men. Cannot be registered under the Land Registration Law and be the subject of a Torrens Title F. Reyes. Province of Zamboanga Del Norte) Classification Of Movables: 1. Outside the commerce of men – cannot be alienated or leased or be the subject of any contract B. Private Ownership .• 3. intended for public use– can be used by the public or everybody B.the property of the State owned by it in its private or proprietary capacity. Growing crops are considered immovable under Art. provinces. Sibal v. Not subject to attachment & execution D. water power etc. United States v. light. atomic energy. fishponds may be leased by the government. for the development of national wealth • Characteristics: A. heat. • Electricity. In general. • KINDS: (USD) A. 364 (1946)] Things which can be transported w/o impairment of real property where they are fixed Obligations which have for their object movables or demandable sums (credits) • obligations and actions must be legally demandable • demandable sums must be liquidated Shares of stocks of agricultural. 415 (Rule of Exclusion) 3. Whether the object does not fall within any of the cases enumerated in Art. gas. 50 Phil 512 (1927) • House built on leased land may be treated insofar as the parties are concerned as personal property and be the object of a chattel mortgage. Cannot be acquired by private individual or even municipalities through prescription C. Cannot be burdened by voluntary easement E. Whether the property can be transported or carried from place to place (Rule of Description) 2. cities & municipalities – can be used only by duly authorized persons. Valdez. commercial & industrial entities although they may have real estate 3. rays. According to intention of the parties/purpose (whether it can be substituted by other things of same kind. 415(2) but personal property by Chattel Mortgage Law. Fungible (res fungibles) – only the equivalent is returned b. Whether such change of location can be made without injuring the immovable to which the object may be attached (Rule of Description) KINDS: Patrimonial property . can be used by everybody NOTE: Fishponds are considered as part of public dominion and cannot be acquired by private persons unless it is converted into patrimonial property. but at the same time. 6. Non-consumable 2. the same as gas. intended for specific public service of state. 5. the property is not intended for public use. They are held by the local governments for public service.[21 Phil. ACCORDING TO OWNERSHIP a. do not admit of substitution Test To Determine Whether Property Is Real Or Personal 1. or for b. oxygen.

Such withdrawn portion thus becomes patrimonial property which can be the object of an ordinary contract.May be an object of ordinary contract . Laurel v. UNLESS: 1. Private individual has superior right over the property against the state. Property for LGUs . The Charter of Cebu City gives such power to the City Council. [187 SCRA 797 (1990)] • ============================== ====================== TOPICS UNDER SYLLABUS B. .Property of public dominion when no longer intended for public use/service – declared patrimonial (Article 422 NCC) . 427-439. Rule of Hidden Treasure ========================== ================== OWNERSHIP -is the independent right of a person to the exclusive enjoyment and control of a thing including its disposition and recovery subject only to the restrictions or limitations established by law and the rights of others. Bercilles.Example: property acquired in execution and tax sales. Rights of Ownership/Limitations 2. Garcia. unless it has been granted such authority by law.all other properties possessed by LGUs without prejudice to special laws are considered patrimonial NOTE: Patrimonial properties of LGUs cannot be removed by the State without paying just compensation.[208 SCRA 404 (1992)] • The power to vacate or withdraw a street or alley from public use is discretionary and such will not be interfered with by the courts. [66 SCRA 481 (1975)] A property continues to be part of the public domain until there is a formal declaration on the part of the government to withdraw it from being such .Property for public use roads. streets. Cebu Oxygen v. commercial. possession has been enjoyed during the period necessary to establish a presumption of ownership Aliens have no right to acquire any public or private agricultural. They are neither public nor private party. It cannot be inferred from the non-use alone. Rule: Local government cannot withdraw a public street from public use. Ownership (Arts. squares. I. FULL OWNERSHIP (dominium or jus in re propia) – includes all the rights of the owner 2. Dacanay v. Kinds Of Ownership: 1.some public service. Political subdivisions cannot register as their own any part of the public domain. G. • T he right of the public to use the city streets may not be bargained away through contract. fountains.Subject to prescription . or residential lands except by hereditary succession.Exist for attaining economic ends of state . Asistio Jr.all properties belonging to private persons and those belonging to the State and any of its political subdivisions which are patrimonial in nature Conversion Of Property Of Public Dominion To Patrimonial Property 1. TITLE -is that which constitutes a just cause of exclusive possession or which is the foundation of ownership of property. incomes or rents of the State H. NAKED OWNERSHIP (nuda proprietas) – where the right to the use and the fruits has been denied . An abandonment of the intention to use the property for public service and to make it patrimonial property must be definite. Property of political subdivisions • must be authorized by law NOTE: Sacred and religious objects are outside the commerce of man. grant has been made 2. Presumption of Ownership 4. Property of Private Ownership .. Property of the National Government • formal declaration by the executive or legislative department that the property is no longer needed for public use or for public service 2. CC) 1. Doctrines of Incomplete Privilege/Self Help 3. public waters. promenades and public works for public service paid for by the LGUs . or for the development of the national wealth.

JUS ABUTENDI – right to consume. JUS POSSIDENDI – right to possess • does not necessarily include the right to use (e. RIGHTS OF OWNERSHIP/LIMITATIONS Seven Rights Of Ownership: 1. lease) 4. contract of deposit) 6. JUS FRUENDI – right to fruits 5. JUS UTENDI – right to use and enjoy • Includes the right to transform and exclude any person from the enjoyment and disposal thereof • Limitation: use in such a manner as not to injure the rights of a third person 7. those imposed by the grantor of the property on the grantee A. plurality of the subjects • 1. those imposed by the owner himself (e. power of eminent domain Right of Ownership not absolute • The welfare of the people is the supreme law of the land. transform or abuse by its use 2. SOLE OWNERSHIP – ownership is vested only in one person 4.g. . donation) B. by last will 5. those arising from conflicts of private rights (e. including the right not to dispose. JUS VINDICANDI – right to vindicate or recover Limitations on the Right of Ownership: (CLOGS) 1. unity of the property. power of taxation C. pledge. CO-OWNERSHIP/TENANCY IN COMMON – ownership is vested in two or more owners.g. Salus populi suprema est lex.g. by contract (e.g.g. those which take place in accession continua) 2. or to alienate 4. • Use your property so as not to impair the rights of other. those imposed in general by the State A. those imposed by law (e.Naked ownership + usufruct = Full ownership 3. Voluntary easement. JUS ACCESIONES – right to fruits and accessories 3. police power B. JUS DISPONENDI – right to dispose. Sic utere tuo ut alienum non laedas. Legal easement) 3.

intimidation. 1132 • machinery and equipment used for an industry and indispensable for the carrying on of such industry. Ejectment . otherwise the real right of possession is lost 30 years Depends on ASSESSE D VALUE Depends on ASSESSE D VALUE Civil I. because they are considered real properties.Generally not available as a remedy. in case of stealth or strategy Within 1 year from unlawful deprivation: date of last demand or last letter of demand COURT MTC PROCEEDIN GS Summary proceeding GROUND: deprivation of possession through: force. Actions for forcible entry B. expediency and necessity so required II.When injunction is allowed: A. and that it is wrongfully detained by the other. .extraordinary cases – where urgency.ACTIONS FOR POSSESSION: MOVABLES – Replevin/ Manual Delivery (return of a movable) • both principal and provisional remedy • Plaintiff shall state in the affidavit that he is the owner of the property claimed. strategy. threat. in accordance with Art. cannot be the subject of replevin.possessor clearly not entitled to property . • property validly deposited in custodia legis cannot be the subject of a replevin suit ACTION CAUSE Forcible entry (detenci on) Accion Interdic tal GROUND IMMOVABLES ISSUE De facto or physical possession PERIOD Within 1 year from (1) unlawful deprivation. Writ of possession . Injunction . or stealth (FISTS) Lessor/person having legal right over property deprived of such when the lessee/person withholding property refuses to surrender possession of property after expiration of lease/right to hold property Better right of possession Unlawfu l detainer (desahui co) Physical possession MTC Summary proceeding Accion Publiciana Possession DE FACTO Accion Reinvindicatoria Recovery of dominion of property based on ownership OWNERSH IP Within a period of 10 years. particularly describing it or that he is entitled to possession. • PERIOD: 4 or 8 years from the time the possession thereof is lost.possessor admittedly the owner or in possession in concept of owner . or from (2) discovery.

Land registration cases B. Eminent domain proceedings E.. judicial or extra-judicial.When proper: A. of mortgage – provided that the mortgagor has possession and no third party has intervened C. Ejectment . Foreclosure. Execution sales D.

One must depend on strength of his title and not the weakness of the defense . e. 2008] How will the computation of just computation applied? Section 17 of R. Taking done by Competent authority a. shall be considered. a. actual use and income. other government entities. the sworn valuation by the owner. the cost of acquisition of the land. DOCTRINE OF STATE OF NECESSITY STATE OF NECESSITY—is the principle which authorizes the destruction of a property which is lesser in value to avert the danger poised to another property the value of which is much greater. 29. Interference necessary to avert an imminent danger 2. the tax declarations. REQUISITES OF STATE NECESSITY: 1. Judicial process contemplated for recovery of property: ejectment suit or reinvindicatory action c. Absolute necessity for expropriation is not required. 2. (Market value plus consequential damages minus the consequential benefits) c. It is one of the limitations of the right of ownership. For Public use aa That only a few actually benefit does not diminish its public use 3. No. Due process of law observed Computation for Just Compensation under Agrarian Reform LBP v. the current value of like properties. b) Eminent Domain EMINENT DOMAIN—is the superior right of the State to acquire private property whether registered or not for public use upon payment of just compensation. PRESUMPTION OF OWNERSHIP a) Requisites to Raise the Disputable Presumption of Ownership: 1. Damage to another much greater than damage to property • COMPARATIVE DANGE— Danger must be greater than damage to property. the latter prevails because there is no unlawful aggression when a person or group of persons acts pursuant to the right given in a state of necessity. Action is founded on positive rights f. Sept.2. That he has better title to the property b. It is enough that reasonable necessity for public use is intended. Consider the economic and sentimental value of the property. No.A. Just compensation is equivalent to the value of the land. its nature. The market value should be determined at the time of the filing of the complaint or at the time of taking of the property. Municipal corporations. Identity of the property d. Executive branch b. Value at the time of the taking 4. [G.R. Possessor of property has the presumption of title in his favor b. Cruz. of 3. 175175. Actual possession of the property 2. and the assessment made by government assessors. b. Evidence required: preponderance evidence. Possession is under the claim of ownership a. and public service corporations. Owner paid Just compensation a. The person claiming better right must prove: a. He must be given the benefit of reasonable doubt as to whether he employed rational means to avert the threatened injury. The ownership over the property taken is transferred only when the just compensation with proper interest had been made Elements for Taking in Eminent Domain: (CPJD) 1. The social and economic benefits contributed by the farmers and the farmworkers and by government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation. • The owner of the sacrificial property is obliged to tolerate the act of destruction but subject to his reimbursement by all those who benefited. whichever transpires first. • MEASURE OF RATIONAL NECESSITY— the law does not require a person acting in a state of necessity to be free from negligence or mistake. d. • In case of conflict between the exercise of the right of self-help and a proper and licit state of necessity. 6657: In determining just compensation.

Consists of Money.O. Local ordinances d. or other precious objects. [G. Reasonable requirements of aerial navigation e. Reasonably necessary means for the accomplishment of a purpose 3. No financial compensation SURFACE RIGHTS OF A LANDOWNER — right to surface & everything under it only as far as necessary for his practical interest (Benefit or Enjoyment) 1. Rights of third persons 4. HIDDEN TREASURE Concept of Treasure: (HUM) 1. Sept.R. even destroyed. as creditors. 6657. x x x. No. the public use was abandoned. LBP. Tabuena v. and X need not account for the interests that the amounts they received as just compensation may have earned in the meantime. if so demanded by the welfare of the community. 14. No taking of property involved b. 180557. The owner of the property is not entitled to compensation Requisites of Police Power: (PRO) 1. It is not unduly Oppressive upon individuals a. X has the obligation to return: 1.3) + (MV x 0.Formula by the DAR in using Section 17 of RA 6657 (DAR A. Existing servitudes or easements b. Abandonment of Property Expropriated: MCIAA v. 988. No judicial determination of just compensation allowed without LBP’s participation. Finder was given express permission by the owner – subject to the contract of service and principle of unjust enrichment c) Police Power . No. Respondents.6) + (CS x 0. No. the indispensable role of LBP begins. the MCIAA may keep whatever income or fruits it may have obtained from Lot No. Public interest 2. 2008]. Special laws c. MCIAA has the obligation to return to X the land. 174012. series of 1998): LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per declaration LV = (CNI x 0. Necessary expenses incurred by MCIAA in sustaining lot and monetary value for services in managing insofar as X was benefitted services in managing insofar as X was benefitted Following Article 1187 of the Civil Code. Tudtud. Nov. Finder is third person and he discovered it by chance – finder is entitled to one half of the value of the treasure. Once an expropriation proceeding for the acquisition of private agricultural lands is commenced by the DAR. What he received as just compensation with interest computed from default. 3844 and Section 64 of RA No. Rights subject to: a. Finder is an intruder – he is not entitled to anything 4.1) Procedure of Expropriation under Agrarian Reform: LBP is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of Republic Act (RA) No. Hidden and unknown 2. do not have to settle as part of the process of restitution the appreciation in value of Lot 988 which is a natural consequence of nature and time. 2. Finder is the same as owner of the property – treasure totally belongs to him. 5. [G. jewels. Unknown owner 3. it returns to its owner unless there is a statutory provision that prohibits it." POLICE POWER— is another limitation of the right of ownership wherein property may be interfered with. 2008] When a private land is expropriated for public use and subsequently. 2. 3. 26. (not raw materials) Right to Hidden Treasure: 1.R.

BASIS REPLEVIN Action or provisional remedy where the complainant prays for the recovery of the possession of the personal D property e f * NOT APPLICABLE TO i (a) Movables distrained or n taken for a tax assessment or i fine pursuant to law t (b) Those under a writ of i execution or preliminary o attachment n (c) Those under custodia legis Where to MTC or RTC depending on the file amount of money involved Issue Recovery of possession of involved personal property FORCIBLE ENTRY Summary action to recover material or physical possession of real property when a person originally in possession was deprived thereof by (FISTS) Force. taken against law) iii. Threat. express or implied MTC Material or physical possession of real property Possession de facto Quasi in Rem 1 year from the time the possession became unlawful – last date of demand or letter of demand • If there’s a fixed period – 1 year from the expiration of the lease • If the reason is nonpayment of rent or non-fulfillment of the conditions of the lease – 1 year from demand to ACCION PUBLICIANA It is the preliminary action to recover a better right to possess ACCION REINVINDICATORIA Action to recover ownership of real property MTC Material or physical possession of real property Possession de facto Quasi in Rem 1 year from dispossession FIT – from dispossession SS – from discovery • May be brought against the owner in some cases such as lease Complaint must state FISTS or else it would just be an accion publiciana which should be filed with the RTC RTC Better right of possession of real property.can be filed Immediately b) 1 year period for FE or UD has Elapsed CIVIL LAW REVIEWER Page 39 of 401 . vendor or vendee or other person of any land or building is being unlawfully withheld after the termination or expiration of the right to hold possession. wrongfully taken. Strategy. Possession de jure Quasi in Rem 10 years RTC Ownership of real property Action Prescripti on In Personam Quasi in Rem 10 or 30 years depending on whether it’s ordinary or extraordinary prescription • Accion reinvindicatoria can be filed simultaneously with FE • Judgment of ownership usually includes the right of possession Others Steps: i. or Stealth UNLAWFUL DETAINER Action brought when possession by a landlord. Pay bond double the amount of property • 2 kinds: a) Possession not through FISTS . Intimidation. Complaint is filed at commencement or at any time before answer of other party ii. Complaint should allege OWTA (owner. by virtue of a contract.

In an action to recover ownership. and the plaintiff must rely on the strength of his title and not on the weakness of the defendant’s claim CIVIL LAW REVIEWER Page 40 of 401 .iv. the property must be identified. Sheriff takes property v.if there is a breach Not necessary – if the fixed period just expires • • Should remember Article 434. and aa Give copy to plaintiff Stranger’s remedy – File a 3rd party claim vacate Complaint filed 5 days after demand (buildings) or 15 days (land • Refers to any kind of land • It should be alleged that the right to possess had been terminated and that the continued possession was unlawful • Not the remedy if what is sought is specific performance • Demand Necessary . Doors broken if necessary Defendant’s remedy: aa File a bond double the amount.

Pledge 5. 4. the price of lease of lands and other property and the amount of perpetual or life annuities or other similar income. Accessory follows the principal.3 For Personal Property i. pay planter necessary expenses Planter in Good Faith (GF) Planter in Bad Faith (BF) Keeps fruits Reimbursed for expenses for production. Good faith exonerates a person from punitive liability but bad faith may give rise to dire consequences. CIVIL FRUITS – rents of buildings. c. With respect to real property b. NATURAL FRUITS – spontaneous products of the soil and the young of animals. Accessions 1. With respect to personal property i.2 Accession Natural a. Specification 2. ACCESSION DISCRETA— the extension of the right of ownership of a person to the products of a thing which belongs to such person. 2. ACCESSION CONTINUA — the extension of the right of ownership of a person to that which is incorporated or attached to a thing which belongs to such person. Civil Fruits 2. gathering. and preservation (necessary expenses) CIVIL LAW REVIEWER 401 Page 41 of . Accession Discreta a. Accession Continua a. INDUSTRIAL FRUITS – those produced by lands of any kind through cultivation or labor. Builder/ Planter/ Sower (BPS) in Good Faith ii. Lease of rural lands 4. BPS in Bad Faith iii.1 Accession Industrial i. NOTE: It is NOT one of the modes of acquiring ownership enumerated in Article 712. commixtion or confusion iii.================================ TOPICS UNDER THE SYLLABUS C. Adjucntion/ Conjunction ii. 5. real or personal. OBLIGATIONS: ================================ C. The incorporation or union must be intimate that removal or separation cannot be effected without substantial injury to either or both. It may take place: a) b) accession industrial accession natural a. Usufruct 3. 2 KINDS OF ACCESSION: 1. No one should enrich himself at the expense of another. Antichresis 2. Natural Fruits b. or which is incorporated or attached thereto. No Claim of Ownership a. GENERAL RULE: All fruits belong to the owner of a thing. ACCESSION ACCESSION— is the right of the owner of a thing. 3. It takes place with respect to: a. b. Gathered Fruits PLANTER OWNER No need to reimburse the planter of expenses since he retains the fruits Gets fruits. Industrial Fruits c. EXCEPTIONS: (PULPA) 1. adjunction or conjunction ii. Mixture iii. Bad faith of one party neutralizes the bad faith of the other. to become the owner of everything which is produced thereby.1 Accession Industrial PRINCIPLES: 1. Possession in good faith by another i. either naturally or artificially. specification a.

SOWING— pertains to an annual crop. (forced coownership) Owns fruits OM = BF LO = BF (as if both in GF) LO = BF OM = GF Exception: OM exercises the right of removal Planter in BF Becomes the owner of the materials but he must pay: 1. Entitled to the ABSOLUTE right of removal and damages (whether or not substantial injury is caused) 2. Entitled to Or CIVIL LAW REVIEWER 401 Page 42 of . US v. Caballero. Works made by the owner 2. PLANTING V. Something that will grow and produce fruits and then you plant again before it will produce fruits again. Works made at the owner’s expense to ESSENCE OF DISTINGUISHMENT In planting: planter may be required to buy the land. gathering. Something that will grow and produce fruits year after year without having to be replanted. and preservation. under the Partidas. Value 2. When the male and female animals belong to different owners. No right to reimburseme nt OWNER Owns fruits provided he pays planter expenses for production. [25 Phil 356] This is also in accord with the maxim “pratus sequitor ventrem” (the offspring follows the dam or mother).provided he does GF. WHERE LAND AND MATERIALS BELONG TO DIFFERENT OWNERS Land Owner Owner of (LO) Materials (OM) OM = Becomes the 1. 2. as well as its mother belong to the owner of the latter. The legal presumption. Right of Accession with Respect to Immovables Two disputable presumptions as improvements on land: 1.provided no injury to the work constructed or destruction of the plantings. Standing Crops Planter in GF PLANTER Reimbursed for expenses for production. will be caused 1. gathering. the owner of the female was considered also the owner of the young. etc. in the absence of proof to the contrary. SOWING 1. Entitled to reimbursement and damages (in case he chooses not to remove) iii. In sowing: sower may be required to pay rents. unless there is a contrary custom or speculation. he must pay for not remove them their value. is that the calf. Re: Offsprng of Animals. PLANTING— pertains to a perennial fact. Damages removal .ii. by the right of accretion. 2. and preservation Loses everything. Entitled to GF owner of the reimbursement LO = materials but .

and the sower the proper rent + damages . Builder. Compel the builder to buy the land where the building has been built Exception: Value of land > Value of improvements  rent to be paid If builder fails to pay the rent: . does not claim ownership over the land but possesses it as mere Holder. necessary expenses for the preservation of the land . Consider price of land as an ordinary money debt of the builder may enforce payment thru an ordinary action for the recovery of a money debt (levy and execution) EXCEPTIONS to the Rule on Builders. damages . Entitled to reimbursement for the necessary expenses of preservation of land General Rule: LO has no right of removal or demolition. he knows that the land is not his. Loses what is need to pay for its value or other expenses 2. usufructuary or tenant. etc. Appropriate improvements as his own after paying for indemnity 2. Necessary expenses. Right of removal . agent. and if his successor in the possession does not prefer to refund the amount expended. not knowing that the crops will no longer belong to him CIVIL LAW REVIEWER 401 Page 43 of . Or LO = BF Builder = BF (as if both in GF) OPTIONS: 1.must pay for: . or sown without right to indemnity 2. w/ right of retention 2. the builder’s expense 3. or planted 2. right to demolish or removal + damages . (HSBC) 1. etc. Demolish what has been built. Appropriate the improvements . Right to indemnification a. w/ right of retention until reimbursed b. sown. LO = GF Builder= BF 1.whether or not the value of the land is considerably more than the value of the house BUILDER 1.b. EXCEPTION TO THE EXCEPTION: Tenant whose lease is about to expire.a.LO entitled to removal of improvement OPTIONS: 1.if the thing suffers no injury.WHERE A PERSON BUILDS (IN GOOD OR IN BAD FAITH) ON THE LAND OF ANOTHER LAND OWNER (LO) LO = GF Builder= GF. Liability for damages 3. but still sows. Useful expenses. compel the builder or planter to pay the price of the land. REMEDIES: right of retention . Exception: Option of right of removal is compulsory on the part of the LO when builder fails to pay.

RULES WHEN LANDOWNER SELLS LAND TO A 3RD PERSON WHO IS IN BAD FAITH 1. is a Co-owner a. planter.  Builder must reimburse OM. Entitled to reimbursement ii.2. but a mere expectancy of ownership that may or may not be realized. Builder may still file a case against him b. during the partition. 3rd person may file a 3rd party complaint against landowner • A promised to donate a property to B. Builder bad faith. Between OM and Builder. Owner of materials (OM) • Rights of LO and Builder  same as set forth in the table • Rights of OM a. It is of a transitory character or is transferable. there is no accession. such promise was not yet fulfilled. CA. BUT when the 3rd person paid the landowner: a. 1998] Parties: 1. If the property was not donated to him. builder is in bad faith LO  Can ask damages from BOTH. At the time the improvement was built. Whether the land is considerably more valuable than the building or not. 2. No. Bad faith i. attached to the soil with an idea of perpetuity. no question of good faith or bad faith on the part of the builder b. If the builder pays. April 12. Can be liable for consequential damages (as when the materials are of an inferior quality) b. B is a mere possessor by tolerance. sower (builder) 3.R. [230 SCRA 372]. Demand the demolition at builder’s expense c. Builder is a Belligerent occupant 4. and the builder must remove the construction. OM is in bad faith. he cannot ask reimbursement from LO because as to LO. even if later on. the construction must be of a permanent character. has the choice to: a. [G. B constructed his house thereon before the donation. Appropriate what has been built as his own i. Verona PadaKilario v. he is not entitled to the value of the improvements built thereon. CIVIL LAW REVIEWER 401 Page 44 of . • For Art. RULE: OM bad faith. A person whose occupation of a realty is by tolerance of its owners are not possessors in good faith. [G. Good faith i. 2000] 2. Frederico Geminiano. In case of insolvency on the part of the builder LO is subsidiarily liable. Compel builder to pay the price of the land i. 117642. or to assert a better title not only in himself. A person constructs a building on his own land. the portion of land used is awarded to another co-owner. but in case Builder cannot pay. Land owner (LO) 2. 134329. With indemnity for the necessary expenses for the preservation of the land b. can be compelled to remove the building c. LO good faith 1. Loses all rights to be indemnified ii. CA. If at all. He is estopped to deny his landlord’s title. Without payment of any indemnity for useful or necessary expenses for the building ii. Hence. Builder. LO will not be subsidiarily liable because as to him. Builder must go against him. good faith must govern.R. but also in some third person while he remains in possession of the leased premises and until he surrenders possession to the landlord. if he makes use of the materials. 448 of the NCC to apply. Builder. Munar v. • RULES WHEN INVOLVED: THREE PARTIES ARE A lessee cannot be a builder in good faith. can B be considered a possessor in good faith? Mere promise to donate the property to B cannot convert him into a builder in good faith. new owner will not be required to pay any indemnity for the building 3. etc. CA. January 19. and then Sells the land but not the building to another a. Alviola v.

they knew that their occupation of the premises would continue only for the life of the lease. if he improves the land. planter or sower stands. v. The relation of lessor and lessee was created and may be asserted not only by the original lessor. [54 SCRA 243]. Laguna. CA. he cannot refuse to exercise either option. No.R. December 14. Agana. [136 SCRA 475 (1985)] The right to choose between appropriating the improvement or selling the land on which the improvement of the builder. Susan Realty. 2005] • • • • CIVIL LAW REVIEWER 401 Page 45 of . is given to the owner of the land (not the court) Balatan v. No.. They cannot be considered as possessors nor builders in good faith. [221 SCRA 42] Even if the lessor promised to sell. [304 SCRA 34 (1999)] • Improvements made prior to the annotation of the notice of lis pendens are deemed to have been made in good faith. After such annotation. it would not make the lessee possessor or builder in good faith so as to be covered by the provisions of Art. CA. et al.R. [G. Dumlao. Santos v. A “forced lease” is then created and the court shall fix the terms thereof in case the parties disagree thereon.. CA. 123672. July 24. 448 of the NCC. al. The latter cannot raise the mere expectancy of ownership of the land because the alleged promise to sell was not fulfilled nor its existence even proven. 120303. Depra v. Vda. the landowner cannot compel the builder to buy the land. [18 SCRA 1172]. (Jurado) The owner of the land on which a building has been built in good faith by another has the option to buy the building or sell his land to the builder. Carrascoso v. 1996] • Estoppel applies even if the lessor had no title at the time. [G. As lessees. De Bacaling v. Racaza v. CA. P can no longer invoke the rights of a builder in good faith. Sarmiento v. it should only be made to pay for those improvements at the time good faith existed to be pegged at its current market value. Should E opt to appropriate the improvements made by P. Where the land’s value is greater than the improvement. but also by those who succeed to his title. [129 SCRA 122 (1984)] Owner of the land on which improvement was built by another in good faith is entitled to removal of improvement only after landowner chose to sell the land and the builder refused to pay for the same.

Young and other products of animals rents of buildings price of leases of land & other property amount of perpetual or life annuities or other similar income Accession Industrial Accession Natural Adjunction/ Specification Conjunction Mixed Building Planting Sowing Alluvium Avulsion Change of course of rivers Formation of islands (ISTEP) Inclusion or engraftment Soldadura or soldering Tejido or weaving Escritura or writing Pintura or Painting commixtion confusion .ACCESSION Accession Discreta Accession Continua Natural Fruits Industrial Fruits Civil Fruits Real Personal Spontaneous products of the soil.

Accretion results from the effects or action of the current of the waters of the river. retain the ownership thereof. CA. NOTE: The owner should remove the transferred portion within two years. 3. Right to old bed ipso facto in proportion to area lost 2. imperceptible. AVULSION ALLUVIUM AVULSION Deposit of soil is Deposit of soil is sudden gradual and or abrupt. Segregation and transfer must be Sudden or abrupt. Viajar v. Trees uprooted and carried away by the current of the waters a. or torrent segregates from an estate on its bank a known portion and transfers it to another estate. Of Lands. 4. CA. creek. otherwise. Lands added to the shores by accretions and alluvium deposits caused by the action of the sea. or for the establishment of special industries. verifiable. Deposit of soil belongs Deposit of soil belongs to to the owner of the the owner from whose property to which it is property it was detached. 2. ESSENTIAL ELEMENTS: 1. 2. it becomes permanently attached. the Government shall declare them to be the property of the owners of the estates adjacent thereto and as an increment thereof. and are not necessary for the purposes of public utility. or for the coastguard service.act or process by which a riparian land gradually and imperceptively receives addition made by the water to which the land is contiguous. in which case. Alluvium ALLUVION . Owners claim them  owners pay the expenses incurred in gathering them or putting them in a safe place iii. The portion of land transported must be Known or identifiable. Uprooted Trees 1. Avulsion . There must be a natural change in the course of the waters of the river. form part of the public domain. 3. CA. Soil cannot be Soil is identifiable and identified. When they are no longer washed by the waters of the sea. ACCRETION . Dir. Ronquillo v. Owners do not claim them w/in 6mos  Belong to the owner of the land upon which they may be cast b. [195 SCRA 433 (1991)] Law of Waters: “ART.accretion which takes place when the current of a river. the owner of the estate to which the segregated portion belonged. Change of Riverbed Requisites: 1.” Lanzar v. Reynante v.the accretion which the banks of rivers gradually receive from the effects of the current of the waters and which belong to the owners of lands adjoining the said banks. The change must be abrupt or sudden. [207 SCRA 794 (1992)] The rules on alluvion do not apply to man-made or artificial accretions to lands that adjoin canals or esteros or artificial drainage system. attached. 2. ESSENTIAL ELEMENTS: 1. [78 SCRA 152] AVULSION . Owner of adjoining land to old bed: right to acquire the same by paying its value – Value not to exceed the value of area occupied by new bed • • • ii. Right of owner of land occupied by new river course: 1. [168 SCRA 405 (1988)] Failure to register the acquired alluvial deposit by accretion for 50 years subjected said accretion to acquisition through prescription by third persons. creek or torrent. Segregation and transfer must be caused by the Current of a river.Accession Natural i. ALLUVIUM vs. The land where accretion takes place must be adjacent to the bank of a river. Deposit or accumulation of soil or sediment must be gradual and imperceptible. • Registration under the Torrens System does not protect the riparian owner against the diminution of the area of his registered land through gradual changes in the course of an adjoining stream.

Indemnifies the owner of the accessories for the values thereof. 3. Rule of importance and purpose 2.e. Greater volume . in such a way that they form a single object. Owns the 1. By law becomes the owner of the resulting object OP GF OA GF Or OP = BF OA = GF OP =GF OA BF OP BF OA GF = = = = = ii. Pay OA Right to choose value of between accessory or 1. That the thing be separated belonging to him be PLUS separated even Liability for though it be damages necessary to destroy the principal thing Islands formed in Non-navigable or Nonfloatable Rivers: 1. OP paying him 2. Adjunction/ Conjunction ADJUNCTION OR CONJUNCTION — Is a process whereby two movable things owned by different persons are joined together without bad faith. Tejido (weaving) 4. Separation with injury – accessory is much more precious than the principal.New River Banks 1. Pintura (painting) a. CLASSES OF ADJUNCTION: (ISTEP) 1. Principal its value or and accessory 2. 2. owners will get back this previous property if the course of the river reverts back to its original place iv. due to natural or artificial causes authorized by law. 3. Loses the thing accessory incorporated 2. setting a precious stone on a golden ring 2. They form a single object. If no injury will be the former caused owner for its b. Plumbatura – different metals 3. Feruminatio – same metal b. The two things belong to different owners. New river bed may itself be abandoned. joining a piece of metal to another metal a. Requisites: 1. Separation without injury 2. Right to 2. They are inseparable. on lakes 3. On seas within the jurisdiction Philippines 2. New river banks created  public dominion 2. the owner of the former may demand its separation even though the principal may suffer injury. 2.If they are of equal value 4.3 For Personal Property i. . Escritura (writing) 5. If value of value accessory is greater than principal even if damages will be caused to principal (expenses is to the one who caused the conjunction) 1. Soldadura (soldering) i.If they are of unequal value 3. Formation of Islands ISLAND BELONGS TO THE STATE: 1. Mixture MIXTURE— takes place when two or more things belonging to different owners are mixed or combined to such extent that the components lose their identity. Island  to the owners of the margins or banks of the river nearest to each of them. Test To Determine Principal: 1.indemnifies a. Owner of principal in bad faith RULES AS TO OWNERSHIP OWNER OF OWNER OF PRINCIPAL ACCESSORY (OA) (OP) Acquires the May demand accessory reparation: . Greater value .e. Owner of the principal: a. Greater merits When Separation Allowed: 1. If in the MIDDLE of the river  divided longitudinally in halves a. Inclusion (engraftment) i. a. on navigable or floatable rivers of the b. Indemnify the damages OP for the damages OP may have suffered 1. that their separation would impair their nature or result in substantial injury to either component.

If he is not in possession. Liable for damages iii. Mixture caused by an owner in GF or by chance a. An action to quiet title brought by the person in possession of the property is IMPRESCRIPTIBLE. May not appropriate – when material transformed > new thing. Quieting Title ================================ QUIETING OF TITLE— is a remedy or proceeding which has for its purpose an adjudication that a claim of title to realty or an interest thereon. Protect true title & possession 3. When the maker (considered principal) is in GF a. he must invoke his remedy within the prescriptive period. Prevent litigation 2. Specification SPECIFICATION — imparting of a new form to the material belonging to another. Reasons: 1. Real interest of both parties which requires that precise state of title be known ACTION TO QUIET TITLE 1. is invalid or inoperative. Each share shall still be in proportion to the value of their thing 3. Classifications: 1. May appropriate but must indemnify the owner of the material b. Puts an end to vexatious litigation in respect to property involved. OM can appropriate the work without paying for the labor or industry b. Remedial 3. plaintiff asserts his own estate & generally declares that defendant’s claim is w/o foundation 2. 6. Mixture by the will of the owners α. As a rule. QUASI IN REM . CONFUSION – mixture of liquid things RULES: 1. Rights governed by stipulations β. RULES: 1. Demand indemnity for the material with damages b. Preventive action –to prevent the casting of a (threatened ) cloud on the title. Mixture caused by owner in BF a. The OM may: i. OM can demand indemnity plus damages c. however. Without stipulation: each acquires a right or interest in proportion to the value of his material 2. The law. Requisites: (TICR) 1. COMMIXTION – mixture of solid things 2. 5. As a rule. Cloud in such title . or otherwise defective and hence. Appropriate the new thing subject to the payment of the value of the work. or ii. OM cannot appropriate if the value of the work is considerably more than the value of the material due to artistic or scientific importance COMPARISON OF THE 3 TYPES OF ACCESSION OF MOVABLES ADJUNCTION MIXTURE SPECIFICATION Involves at Involves at Involves at least 2 least 2 things least 2 things things As a rule.KINDS: 1. The actor forfeits his thing b.suits against a particular person or persons in respect to the res May not be brought for the purpose of settling a boundary disputes 4. Remedial action –to remove cloud on title 2. the plaintiff and those claiming under him may forever be free of any hostile claim. does not exclude personal property from actions to quiet title. Plaintiff must have a legal or equitable Title or interest in the real property 2. Applicable to real property or any interest therein. or the making of the material of another into a thing of a different kind. adverse to the plaintiff. accessory coaccessory follows follows ownership principal principal The things joined retain their nature results May either retain or lose respective natures The new object retains or preserves the nature of the original object ================================ TOPICS UNDER THE SYLLABUS D. When the maker is in BF a.

or claim constituting a on plaintiff’s title which may be used to injure or vex him in the enjoyment of his title 2. The owner of the land could not redeem it. architect or contractor 2. Mere written or oral assertions of claims. or unenforceable. invalid or which would be inequitable to enforce. encumbrance or proceeding which is: a) apparently valid b) but is in truth invalid. ineffective. Questions involving interpretation of documents 2. and it was offered for bail. a piece of land was owned by as a husband and wife. either legal or equitable. Later on. Instrument or record or claim or encumbrance or proceeding which is Apparently valid or effective 2. The Court failure of the State to have it registered does not mean that the title is invalid. Preventive CLOUD—is a semblance of title. But the State did not change the title to be under its name. ineffective. Deeds by strangers to the title UNLESS purporting to convey the property of the plaintiff 5. The Court also held that the right for action to quiet title is imprescriptible so long as the plaintiff is in possession of the property. They executed a mortgage in the land in favor of the Court. Plaintiff must Return to the defendant all benefits received from the latter or reimburse him for expenses that may have redounded to his benefit NO APPLICATION TO: 1. The Supreme Court denied the claim. no repair made – owner. If made in a legal proceeding b. the heirs of the couple brought an action to quiet title. release of an instrument. claim. pointing its defects and prays for the declaration of its invalidity Nature Plaintiff asserts own claim and declares that the claim of the defendant is unfounded and calls on the defendant to justify his claim on the property that the same may be determined by the court Except: In one case. or a claim or a right in real property. and at the same time indicates the source and nature of the defendant’s claim. Deed of Sale was issued in favor of the State. Existence of Cloud: (AIP) 1. Such cloud must be due to some Instrument. If it is being asserted that the instrument of entry in plaintiff’s favor is not what it purports to be 3. state may compel him to demolish or make necessary work to prevent if from falling 3. Boundary disputes 4. delivery. record. release of an instrument. in truth and in fact. the land was foreclosed and the State was the sole bidder. Invalid. Collapse resulting from total or partial damage.3. The cause of the breach of obligation must be independent of the will of the debtor . BUT is. Ruinous Buildings and Trees in Danger of Falling Liability for damages: 1. in fact. Many years after that. May be Prejudicial to the title DISTINCTIONS BETWEEN ACTION FOR QUIETING OF TITLE AND ACTION FOR REMOVAL OF CLOUD BASIS ACTION TO ACTION TO QUIET TITLE REMOVE CLOUD Purpose To end vexatious litigation in respect to the property concerned Procure cancellation. EXCEPT a. Collapse – engineer. If no action – done by government at expense of owner • To constitute an Act of God: Requisites: 1. voidable or unenforceable c) prejudicial to the plaintiff’s title 4. Intended to procure cancellation. voidable. Where the validity of the instrument involves pure questions of law ACTION TO REMOVE CLOUD 1. Instruments invalid on their face 6. or extinguished (or terminated) or barred by extinctive prescription 3. appearing in some legal form but which is. encumbrance or claim in the plaintiff’s titlewhich affects the title or enjoyment of the property Plaintiff declares his own claim and title. encumbrance.

Benefits/ Fruits/ Interest/ Income d. Termination DISTINGUISHED FROM PARTNERSHIP BASIS Legal personality Source COOWNE RSHIP No legal personality Created by contract or other things Collective enjoyment of a thing Agreement for it to exist for 10 years – valid (If more than 10 years. Occupancy (i. Co-ownership 1. Elements 2. Compulsory – no right partition exists (party wall) 3. or aggravation of the injury to the creditor . there is mutual representatio n Dissolved by the death or incapacity of a partner Cannot . Partition a. Of Entire Property iii. How Created 3. Incidental – exists independently of the will of the parties ================================ TOPICS UNDER THE SYLLABUS E. 1. Nakpil v.e. ELEMENTS 1. The event must be either unforeseeable or unavoidable 3. Of Individual Interest ii. Universal – over universal things (co-heirs) 6. Demandable Anytime b.. 3. Recognition of ideal shares. Object of ownership must be undivided 3. The debtor must be free form any participation in. Law 2. CA. Rights of Co-owners a. Singular or Particular – over particular or specific thing 7. The event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner 4. Management/ Administration 4. Sale/ Alienation i. Contractual – created by contract 5. HOW CREATED 1.2 persons catch a wild animal) 6. Ordinary – right of partition exists 2. Redemption by Other Coowners iv.e.2. 2. Plurality of subjects – many owners 2. commixtion) 5. the excess is void) NOTE: 20 years is the maximum if imposed by the testator or donee of the common property As a rule. Legal – created by law 4.. Donation Kinds of Co-ownership: 1. Ownership over Whole Property b. [144 SCRA 595 (1986)] 3. Obligations of Co-owners 6. Prescription c. Use/ Possession e. no mutual representation Not dissolved by death or incapacity of a co-owner Can dispose of PARTNERSH IP Has legal or juridical personality Created by contract only (express or implied) Profit No term limit set by law Purpose Term ================================ E. Succession 4. CO-OWNERSHIP CO-OWNERSHIP —is a form of ownership which exists whenever an undivided thing or right belongs to different persons. Prohibition for Indivision 5. Contracts Representatio n Effect of death Substitution As a rule. no one is an owner of a specific portion of the property until it is partitioned. Fortuitous event/chance (i.

the selling co-owner’s share shall be the only one valid.A co-owner cannot acquire the whole property as against the other coowners by acquisitive prescription. assign or mortgage own part.his share without consent of others Profits Must always depend on proportionate shares substitute another as partner in his place without consent of others May be stipulated upon ii. But there is an ideal (abstract) division. and prescription therefore runs against them ii. But there is no ideal (abstract) division. Redemption within the period prescribed by law by a coowner will inure to the benefit of all co-owners. each co-owner being the owner of his ideal share Each co-owner may dispose of his ideal or undivided share (without boundaries) without the other’s consent share goes to his own heirs JOINT TENANCY Involves a physical whole. Right to be adjudicated thing (subject to right of others to be indemnified) ii. prescription does not run i. Thus. Ownership over Whole Property b. Right to share in proceeds of sale of thing if thing is indivisible and they cannot agree that it be allotted to one of them NOTE: • To be exercised w/in 30days from written notice of sale of undivided share of another co-owner to a stranger • Redemption of the whole property by a co-owner does not vest in him sole ownership over said property. Of Entire Property Redemption owners by Other Co- DISTINGUISHED FROM JOINT TENANCY BASIS Shares COOWNERSHIP Involves a physical whole. 3. iii. except personal rights like right to use and habitation . each and all of them own the whole thing Each co-owner may not dispose of his own share without the consent of all the rest. Of Individual Interest o Right to alienate. any transaction entered by the wife Effect of disability If a co-owner is a minor. the wife must be expressly authorized by the husband or seek judicial authority to assume powers of administration.In constructive trusts. Sale/ Alienation i. Prescription General Rule . Exception . Hence. [215 SCRA 866 (1992)] While the husband is the recognized administrator of the conjugal property under the Civil Code. CA. Mariano v. [222 SCRA 736 (1993)] Disposal of shares Effect of death iv. A co-owner cannot sell the property without the other co-owners’ consent. this benefits the other against whom prescription will not run Right of redemption i. otherwise. Paulmitan v.When there is valid repudiation – prescription shall start from such repudiation Exception to the Exception . this does not benefit the others for the purpose of prescription. RIGHTS OF CO-OWNERS a. Where the husband is absent and incapable of administering the conjugal property. there are instances when the wife may assume administrative powers or ask for the separation of property. because he really has no ideal share share goes by accretion to the other jointtenants by virtue of their survivorship or jus accrecendi If one joint-tenant is under legal disability (like minority). CA. it will not put an end to existing coownership.

Stipulation to contrary is void Right to full ownership of his part and fruits Right to use thing co-owned i. exclusive. When the legal nature of the common property does not allow partition REQUISITES OF REPUDIATION: aa Unequivocal acts of repudiation of the coownership amounting to an ouster of the other co-owners aa Positive acts of repudiation have been made Known aa Evidence is clear and conclusive aa Open. but can’t be made if prejudicial to co-ownership Right to make repairs for preservation of things. Without prejudice to interest of ownership iii. court intervention if prejudicial – appointment of administrator 6. Share in charges proportional to respective interest. Management/ Administration o o o o Right to change purpose of coownership by agreement Right to bring action in ejectment in behalf of other co-owner Right to compel co-owners to contribute to necessary expenses for preservation of thing and taxes Right to exempt himself from obligation of paying necessary expenses and taxes by renouncing his share in the pro indiviso interest. No prescription to run in favor co-owner as long as he recognizes the co-ownership. resort to court if non-consent is manifestly prejudicial 5. the property may be allotted to one of the co-owners. Benefits/ Fruits/ Interest/ Income o o Right to benefits proportional to respective interest i.A co-owner may not successfully demand a partition: 1. stipulation to contrary is void 2. and the proceeds distributed 5. notice of necessity of such repairs must be given to co-owners. San Francisco. Pay necessary expenses and taxes – may be exercised by only one co-owner 3. requisites for acquisition through prescription ι. the 2nd Contract is susceptible to ratification. Each co-owner may . continuous. b. Prohibition for Indivision Exception . renewable) partition is prohibited 2. notorious possession c. Demandable Anytime General Rule: No co-owner shall be obliged to remain in the co-ownership. Pay useful and luxurious expenses – if determined by majority 4. 152346. When partition is prohibited by a donor or testator (for a period not exceeding 20 years) – from whom the property came 3. Without preventing other coowners from making use thereof d. PARTITION a. Use/ Possession o e. 25. or it will be sold. When a physical partition would render the property unserviceable. insofar as his share is concerned. No. Nov. majority means majority in the interest not in the number of co-owners. 2005] any time demand the partition of the thing owned in common. can be made at will of one co-owner. receive reimbursement therefrom. These acts constitute ratification of the contract. Duty to obtain consent of majority with regards to administration and better enjoyment of the thing. He has repudiated through unequivocal acts ιι.R. if practicable Right to ask for partition anytime Right of pre-emption 5. Fabrigas v. who shall indemnify the others. When partition is prohibited by law 4. If by agreement (for a period not exceeding 10 years. Such act of repudiation is made known to other co-owners o o o 4. The husband continued remitting payments for the satisfaction of the obligation under the questioned contract. Duty to obtain consent of all if thing is to be altered even if without the court or the husband’s authority is unenforceable. [G. but in this case. Being an unenforceable contract. OBLIGATIONS OF CO-OWNERS 1. For purpose for which it is intended ii.

When damage or destruction has rendered ½ or more of the units untenable and that the condominium owners holding more than 30% interest in the common areas are opposed to restoration of the projects. directly or indirectly. Under Art. Condominium Act (RA 4726) ================================ CONDOMINIUM – an interest in real property consisting of a separate interest in a unit in a residential. 3. Peaceful & Uninterrupted Possession i. Creditors of assignees may take part in division and object if being effected without their concurrence. Possession 1. Civil Fruits ii. duty to render mutual accounting of benefits and reimbursements for expenses 9. It appears that while there is a single certificate of title. Co-possession ii. Actions in Case of Deprivation of Possession b. Necessary ii. Kinds 3. but cannot impugn unless there is fraud or made notwithstanding their formal opposition 2. When the project has not been rebuilt or repaired substantially to its state prior to its damage or destruction 3 years after damage or destruction which rendered a material part thereof unfit for use. each co-owner has full ownership of his part and of the fruits and benefits pertaining thereto. and the condominium owners holding in aggregate more than 50% interest in the common areas are opposed to restoration. but can terminate co-ownership 8. Any transfer or conveyance of a unit or an apartment office or store or other space therein shall include the transfer and conveyance of the undivided interest in the common areas or in a proper case. 2. assign or mortgage the portion which may be allotted to him upon the termination of the co-ownership. remodeling or modernizing. When the project has been in existence for more than 50 years. 493 of the NCC. 5. Indemnity for Expenses/ Improvements i. Non-intervenors – retain rights of mortgage and servitude and other real rights and personal rights belonging to them before partition was made General Rule: Common areas shall remain undivided. RIGHTS OF 3RD PARTIES 1.ιιι. Natural/ Industrial Fruits iii. and there shall be no judicial partition thereof Exceptions 1. that where the common areas in the condominium project are held by the owners of separate units as co-owners thereof. When a project or a material part thereof has been condemned or expropriated and the project is no longer viable or that the condominium owners holding in aggregate more than 70% interest in the common areas are opposed to the continuation of the condominium regime. Requirements—To Ripen into Ownership 4. a. Luxurious iv. ================================ TOPICS UNDER THE SYLLABUS F. Elements 2. After partition. the three lots are distinguishable from each other. Co-owners cannot ask for physical division if it would render thing unserviceable. 4. Possession by Lessee ================================ . Evidence must be clear and convincing 7. Useful iii. Acquisitive Prescription 5. Fruits i. and he may alienate. When conditions for partition by sale set forth in the declaration of restrictions duly registered have been met. TOPICS UNDER THE SYLLABUS G. the membership or shareholdings in the condominium: provided however. Rights of Legal Processor a. commercial or industrial building and an undivided interest in common. in the land on which it is located and in other common areas of the building. Pending Fruits c. no condominium unit therein shall be conveyed or transferred to persons other than Filipino citizens or corporations at least 60% of the capital stock of which belong to Filipino citizens. except in cases of hereditary succession.

intent to possess C. negotiorum gestio A. that of a lessee. May be converted into ownership through acquisitive prescription B. subject to authority and ratification if not authorized. In oneself – personal acquisition A. Unlawful Deprivation 8. depositary aa Possession with just title but not from true owner (possessory right) Ex. Object must be capable of being possessed 2. Principal has intent and capacity to possess 3. In name of another – agent. possession of a thief aa Possession with juridical title but not that of owner (juridical possession) Ex. Meaning of Just Title 7. among which are the right to enjoy the thing owned . Physical/actual – occupancy in fact of the whole or at least substantially the whole 2. Thru authorized person (agent or legal representative) Requisites: a. pledge. possibility to acquire possession 4. Demand fruits and damages from one unlawfully detaining property 2. Necessary – as when a mother possesses for a child still in the maternal womb C. When Lost b. Intent to possess for principal (not for agent) b. Intent to possess for another (the principal) b. Unauthorized – this will become the principal’s possession only after there has been a ratification without prejudice to the effects of negotiorum gestio • Possession and ownership are distinct legal concepts. Prescription of Just Title a. Ownership confers certain rights to the owner. Occupancy – actual or constructive (corpus) b. Constructive – occupancy in part in the name of the whole under such circumstances that the law extends the occupancy to the possession of the whole Subject of possession: things or rights which are susceptible of being appropriated Exceptions: 1. Loss of Possession ================================ POSSESSION— is the holding of a thing or enjoyment of a right 1. bailee in commodatum 3. Intent to possess (animus possidendi) c. Authority or capacity to possess (for another) c. a. Non-apparent servitudes DEGREES OF POSSESSION: aa Holding w/o title and in violation of right of owner (grammatical degree) Ex. must have capacity to acquire possession B. lessee. Res communes 2. Personal Requisites: a. Voluntary – as when an agent possesses for the principal B. REQUIREMENTS—TO RIPEN INTO Extent of Possession: 1. Possession of Movables a.6. Thru Unauthorized person (but only if subsequently ratified) Requisites: a. Bring actions necessary to protect possession C. Ratification by principal 2. When Applicable b. Discontinuous servitudes 4. A in good faith buys a car from B who delivers the same to A but B merely pretended to be the owner aa Possession with just title from true ACQUISITION OF POSSESSION FROM THE VIEWPOINT OF WHO POSSESSES: 1. In concept of owner – owner himself or adverse possessor Effects: A. Capacity of “principal” to possess c. Intent to possess OWNERSHIP Classes of Possession: 1. Capacity to possess c. Property of public dominion 3. In concept of holder – usufruct. Must be by virtue of one’s own right ELEMENTS b. Ask for inscription of possession D.

RIGHTS OF LEGAL POSSESSOR a. Notes on Good Faith/Bad Faith • Mistake upon a doubtful/difficult question of law  may be the basis of good faith • Good faith is always presumed. being merely presumptive. TRADICION SIMBOLICA– effected by delivering an object (such as key) symbolizing the placing of one thing under the control of the vendee c. spoliation Possession acquired and enjoyed in concept of owner can serve as title for acquisitive prescription o POSSESSION THROUGH SUCCESSION . if disturbed – protected by means established by law. Possession of hereditary property: a. Literally. By the subjection of the thing or right to our will a. By proper acts and legal formalities established for acquiring such right of possession 5. which is destroyed when the delivery is not effected because of a legal impediment.R. Burden of proof lies on the one alleging bad faith • Possession is presumed to be enjoyed in the same character in which it is acquired. Heir shall not suffer the consequences of the wrongful possession of the decedent (bad faith is personal) EXCEPTION: when he becomes aware of the flaws affecting the decedent’s title 2. If ACCEPTED  deemed transmitted w/o interruption from moment of death b. May only acquire them through guardian or legal representatives ACQUISITION: cannot be acquired through force or intimidation when a possessor objects thereto – resort to courts • The execution of a deed of sale is merely a prima facie presumption of delivery of possession of a piece of real property. 151322. 2006] 4. that of ownership b. Material occupation or exercise of a right a. Except from date of death of decedent. Heirs of Roman Soriano v. TRADICION LONGA MANU– effected by mere consent or agreement of the parties b. [363 SCRA 86 (2001)] 1. Said construction or symbolic delivery. If NOT ACCEPTED  deemed never to have possessed the same 2. Peaceful & Uninterrupted Possession o Right to be respected in his possession. May acquire MATERIAL possession but not right to possession. 2.and the right to exclude other persons from possession thereof. TRADICION BREVI MANU– when one already in possession of a thing by a title other than ownership continues to possess the same under a new title. there is a contrary view espousing that summons is insufficient to make the possessor in bad faith. b. EFFECTS OF BAD FAITH OF DECEDENT ON HEIR 1. ACQUISITIVE PRESCRIPTION POSSESSOR IN GOOD FAITH is one who is not aware that there exist a flaw in the title or mode w/c invalidates it. 3. CA. POSSESSOR IN BAD FAITH is one who is aware of defect. Thus. No. Effects of possession in good faith  counted only from the date of the decedent’s death MINORS/INCAPACITATED: 1. HOWEVER. TRADICION CONSTITUTUM POSSESSORIUM— when the owner continues in possession of the property alienated not as owner but in some other capacity. [G. to possess means to actually and physically occupy a thing with or without a right. may be negated by the failure of the vendee to take actual possession of the land sold. October 26. Interruption of good faith may take place at the date of summons or that of the answer if the date of summons does not appear. until contrary is proven. On the other hand. a person may be declared an owner but he may not be entitled to possession. Ways of Acquiring Possession 1. Copuyoc v. possession is defined as the holding of a thing or the enjoyment of a right. De Sola.

owner has option of paying expenses or paying the increase in value of property which thing acquired by reason of useful expenses 2. as in the case of property owned or possessed in common 2. Possessor in good faith not liable for loss or deterioration or loss except when fraud and negligence intervened 4. possessor in bad faith not entitled. Not entitled to payment for luxurious expense but may remove them provided principal is not injured – provided owner does not refund the amount expended SUMMARY OF RULES ON NECESSARY/ USEFUL/ LUXURIOUS POSSESSION & POSSESSION BY LESSEE BASIS IF IN GOOD FAITH IF IN BAD FAITH . possession unjustly lost is deemed to have enjoyed it w/o interruption Liabilities/ Duties Of Possessors 1. Return of fruits if in bad faith – fruits legitimate possessor could have received 2. Possession of different concepts or different degrees ii. Co-possession Co-possessors deemed to have exclusively possessed part which may be allotted to him. b. Bear cost of litigation 3. Entitled to fruits received before possession is legally interrupted (natural and industrial – gathered or severed. Im provements caused by nature or time to inure to the benefit of person who has succeeded in recovering possession 5. domesticated – possessed if they retain habit of returning back home 6. Entitled to part of net harvest and part of expenses of cultivation if there are natural or industrial fruits ( proportionate to time of possession ) a. civil – accrue daily ) 2. Actions in Case of Deprivation of Possession b. May remove improvements if can be done w/o damage to principal thing. Wild animals possessed while in one’s control. according to law. peaceful and uninterrupted • Title short of ownership Legal presumption of just title (prima facie) – for person in concept of owner Possession of real property presumes that movables are included i.unless owner exercises option of paying. 2. Co-possessor – there is no conflict of interest. Right to be reimbursed for useful expenses with right of retention. Indemnity for Expenses/ Improvements For possessors in good faith: 1. Right to be indemnified for necessary expenses. If possessor in good faith refuses – barred from indemnification in other manner c. interruption in whole or in part shall be to the prejudice of all 4.o o • Possession has to be in concept of owner. One who recovers. public. both of them acting as co-owners. Person who recovers possession not obliged to pay for improvements which have ceased to exist at the time of occupation General Rule Re: possession as a fact: Possession as a fact cannot be recognized at the same time in two different personalities Exceptions: 1. Fruits For possessors in good faith: 1. Possessor in good faith has right of retention over thing unless necessary expenses paid by owner 3. Regardless of good faith/bad faith: 1. Owner has option to require possessor to finish cultivation and gathering of fruits and give net proceeds as indemnity for his part of expenses. Possessor in bad faith liable for loss or deterioration even if caused by fortuitous event 5.

Right to reimbursemen t 2. On capital  charged to owner 2. However. Charges  1. Right of removal (provided no substantial damage or injury is caused to the principal. Right of retention until paid 3. On fruits  charged to possessor 3. On capital  charged to owner 2. Possessor to remove 2. and charges To owner .no right of retention Taxes and Charges 1. owner has OPTION to allow: 1. 546) 2. Right to reimbursemen t of either the amount spent or the increase in value – “plus value” – at owner’s option (art. MINUS necessary expenses for cultivation. gathering. However. Or retain for himself (the owner) the ornament by refunding the value it has at the time owner enters into possession (art.Necessary Expenses Useful expenses Luxurious or Ornamenta l Expenses 1. and harvesting. 548) Right to reimbursement . reducing its value) – UNLESS the winner (owner or lawful possessor) exercises the option in (1) In general. owner has OPTION to allow: a. Possessor to remove b. no right to refund or retention but can remove if no substantial injury is caused. no right of refund or retention but can remove if no substantial injury is caused. Right of retention 1. Or retain for himself (the owner) the ornament by refunding the amount spent (art. to prevent the to Reimbursed possessor No right to reimbursement Regarding gathered or severed fruits To possessor In general. 549) Regarding pending or ungathered fruits Cultivation expenses of gathered fruits – not reimbursed to possessor pro-rating between possessor and owner of expenses. net harvest. On fruits  charged to owner Possessor must return value of fruits already received as well as value of fruits which the owner or legitimate possessor (not the possessor in BF) could have received with due care or diligence.

from possessor in bad recover without faith reimbursement2. Owner must prove: i. Action to remove clouds thereon 4.Improveme nts no longer existing Liability for accidental loss or deterioratio n Improveme nts due to time or nature Production expenses of pending fruits – indemnity pro rata to possessor: (owner’s option) money allowing full cultivation and gathering of all fruits. Present possessor shall be preferred 2. Action for partition 5. Ownership of the thing ii. If both present a title. c. if owner is by his conduct precluded from denying the seller’s authority to sell 3. if possessor had recover. 559] Owner may if possessor acquired recover but the object in good faith at should a public sale or auction. even if acquired it in good faith by he offers to purchase from a reimburse merchant’s store.Equivalent to title b.) A NOTICE OF LIS PENDENS is proper in the following cases: (PORC-Q) 1. Owner voluntarily parted with the possession of the thing 3. If both began to possess at the same time. Any other proceedings of any kind in Court directly affecting the title to the land or the use or occupation thereof of the buildings thereon 6. (Meantime. PRESCRIPTION OF JUST TITLE 7. the one who present (or has) title 4. G No reimbursement Liable in every case To owner or lawful possessor Rules in case of conflict or dispute regarding possession 1. the one longer in possession 3. Possession in good faith . No reimbursemen t Only if acting w/ fraudulent intent or negligence. the thing shall be judicially deposited. If both are present. if recovery is no longer possible because of prescription 5. One who has lost or has been unlawfully deprived of it may recover the thing from whomever possesses it. from possessor in good faith (if owner had lost the property or been unlawfully deprived of it) the acquisition being from a private person [art. after summons To owner or lawful possessor No indemnity ood faith 2. he shall lose all the right to be indemnified in any other manner. if sale is sanctioned by statutory or judicial authority 1. if possessor refused. Action to recover possession of real estate 2. Loss or unlawful deprivation or bad faith of the possessor NOTE: Owner acts negligently or voluntarily parts w/ the thing owned  cannot recover from possessor SUMMARY OF RECOVERY OR NONRECOVERY PRINCIPLE Owner may 1. w/o reimbursement. if seller has voidable title which has not been avoided at the time of sale to the buyer in good faith for value and without notice of the sellers defect in title 4. or markets in the owner had accordance with the Code lost or been of Commerce and special unlawfully laws deprived) 2. REIMBURSE the owner to pay the price possessor paid. or in (whether or not fairs. Owner cannot 1. In the concept of owner a. the Court will determine. POSSESSION OF MOVABLES Requisites: . Action to quiet title thereto 3. ordinarily.

NATURE/ELEMENTS Characteristics or Elements 1. Provision of law enabling the apparent owner to dispose as if he is owner d. Possession may still be recovered: a.6.Possessor is in concept of an owner ANIMALS WILD ANIMALS – possessor is the one who has control over them DOMESTICATED AND TAMED ANIMALS – the possessor does not lose possession as long as habitually they return to the possessor’s premises NOTE: For ownership. intent to lose the thing 2. Application to Personal and Real Properties 3. During the Usufruct i. Destruction or total loss of the thing or thing went out of commerce 4. real right of possession not lost except after 10 years ================================ 8. Nature/Elements 2. Lease of property d. Rights of the Usufructuary a. Insurance 6. Termination of Usufruct ================================ USUFRUCT is the right to enjoy the property of another with the obligation of preserving its form and substance. When agent encumbered property without express authority – except when ratified 4. Of a temporary nature or duration c. Sale/Alienation of Usufructuary rights 5. Repairs iv. Essential – those without which it cannot be termed usufruct a. A real right (whether registered in the Registry of Property or not) b. if possessor had obtained the goods because he was an innocent purchaser for value and holder of a negotiable document of title to the goods Possession Equivalent To Title: 1. How constituted 4. Possession is in good faith 2. Charges and Taxes v. Even for time being he may not know their whereabouts. Fruits b. unless the title constituting it or the law otherwise provides Quasi-usufruct is the usufruct pertaining to immovables. Negotiable document of title TOPICS UNDER THE SYLLABUS H. LOSS OF POSSESSION Acts Not Affecting Possession: (not deemed abandonment of rights). Acts merely tolerated 2. Sale under order of the court e. fairs or markets f. the owner must claim them within 20 days from their occupation by another person Loss Of Possession: (PALA) 1. 1. Abandonment of the thing – renunciation of right. Assignment made to another by onerous or gratuitous title 3. Clandestine and unknown acts 3. Acts of violence Possession Not Lost When: 2. Possession of another if new possession lasted longer that 1 year (possession as a fact). possession not interrupted 1. possession of movable is not deemed lost 3. Purchases made at merchant stores. Alteration of form and substance ii. USUFRUCT 1. Exercise of diligence iii. Unlawfully deprived or lost b. Obligations of the Usufructuary a. Acquired at public sale in good faith – with reimbursement c. Owner has voluntarily parted with the possession of the thing . Possession and enjoyments c. Purpose: to enjoy the benefits and derive all advantages from the object . Before the Usufruct commences b.

and he makes the lessee enjoy the thing being leased The lessee generally has no duty to pay for repairs The lessee generally pays no taxes The lessee cannot constitute a usufruct on the property leased KINDS: 1. Created by will of the parties inter vivos ii. Whether it be a pure or a conditional usufruct b. The number of years it will exist c. and by way of exception by law (as in the case of an implied new lease. contract. etc DISTINGUISHED FROM EASEMENT BASIS Object USUFRUCT May be real or personal property. the lease is registered. but it may be constituted on the land burdened by an easement Usually extinguished by death of usufructuary EASEMENT Involves only real property Creator Origin Can be created only by the owner. Created mortis causa c. Natural – that which ordinarily is present. a piece of land held in usufruct Not extinguished by the death of the owner of the dominant estate Coverag e Taxes Effect of death As to other things DISTINGUISHED FROM LEASE USUFRUCT LEASE Covers all fruits Generally covers and uses as a only a particular or rule specific use Nature Always a real A real right only if. right as in the case of a lease over real property. Accidental – those which may be present or absent depending upon the stipulation of the parties a. and he allows the usufructuary to enjoy the thing given in usufruct The usufructuary has the duty to make the ordinary repairs The usufructuary pays for the annual charges and taxes on the fruits A usufructuary may lease the property itself to another right The lessor may or may not be the owner as when there is a sublease or when the lessor is only a usufructuary May be created as a rule only by contract. but a contrary stipulation can eliminate it because it is not essential a. last a consequence of normal use or exploitation 2. Voluntary or conventional i. Mixed – partly created by law and partly by will . or when a builder has built in good faith on the land of another a building. Whether it is in favor of one person or several. otherwise. it is only a personal BASIS Extent The owner is more or less passive. but not personal rights What can be enjoyed here are all uses and fruits of the property Cannot be constituted on an easement. or burdening. Obligation of conserving or preserving the form and substance (value) of the thing 3. Can also be on rights. or by a duly authorized agent. or is for more than 1 year. or prescription Cause Extent Limited to a particular use Repairs May be constituted in favor or. acting in behalf of the owner May be created by law. when the land is considerably worth more in value than the building The owner or lessor is more or less active. As to Origin a. Legal – created by law such as usufruct of parents over the properties of their children b.

Multiple – if several usufructuaries enjoy the right i. Partial b. 4. As to quantity or extent a. Civil Fruits accrue daily I. from the proceeds of the fruits. Resolutory 5. natural & industrial fruits of property (jus fruendi and jus utendi) a. Fruits pending at the termination of usufruct • Belong to the owner • BUT the owner must reimburse the usufructuary for ordinary cultivation expenses and for seeds and similar expenses. Fruits pending at the beginning of the usufruct • Belong to the usufructuary • No necessity of refunding the owner for expenses incurred. in this case. With a condition i. Legal Usufruct – but is not evident in today’s laws 2. the pending crop expenses and charges shall be pro-rated between said possessor and the usufructuary) II. the excess of expenses 3. As to fruits i. if the usufruct is created by donation. if the fruits had been planted by a possessor in good faith. at the time of the perfection of the donation. 2. Us ufruct CANNOT be constituted on an object subject to Pledge 3. As to the quality or kind of objects involved a. Usufruct over things i. Abnormal (or imperfect or irregular) – involves consumable things As to terms or conditions a. Normal (or perfect or regular) – this involves non-consumable things where the form and substance are preserved ii. RIGHTS OF USUFRUCTUARY a. Industrial and Natural Fruits I. 4.if only individual things are included As to the number of persons enjoying the right a. Pure – no term or condition b. or because the value of said fruits must have already been taken into consideration in fixing the terms and conditions of the usufruct. Particular/Singular . Ex die in diem – from a certain day up to a certain day c. As to extent i. Prescriptive – is one acquired by a third person through continuous use of the usufruct for the period required by law 2. In diem – up to a certain day iii. HOW CONSTITUTED How to constitute Usufruct 1. Belong to the usufructuary in proportion in proportion to the time the usufruct may last II. Successive – one after the other 2. Ex die – from a certaign day ii. APPLICATION TO PERSONAL AND REAL PROPERTIES Some rules regarding Usufruct: 1. Usufructuary can construct improvements over property subject to usufruct 3. all the donees must be alive. Simple – if only one usufructuary enjoys the right b. Act Inter Vivos 3. With a term or period i. (Thus. Fruits b. if for instance. so present or future support cannot be an object of usufruct b. (for the owner gave the usufruct evidently without any thought of being reimbursed for the pending fruits. Usufructuary can lease out the property to other parties 5. Both stock dividends and cash dividends are considered civil fruits b.d. Usufruct over rights – rights must not be personal or intransmissible in character. Usufruct can be constituted even if the object is subject to Mortgage . Simultaneous – at the same time ii. Usufruct can be constituted on an object subjected previously to a Lease. Total ii. or at least already conceived. BUT. By Prescription 4. Possession and enjoyments Right to civil. Universal – if over the entire patrimony ii. the usufruct came about because of contract) • BUT without prejudice to the right of 3rd persons. Suspensive ii. (Hence.

cannot cut down trees unless it is for the restoration of improvement of things in usufruct – must notify owner first aa aa General Rule: The lease expires at the end of the usufruct or earlier Exception: In the case of leases of rural lands which continues for the remainder of the agricultural year. then he shall be liable a. Intended for sale c. may remove improvement if can be done without damage damages he made against the property aa a aa aaa Right to set-off improvements against Right to transfer usufructuary rights – gratuitous or onerous. Posting of security i. OBLIGATIONS OF THE USUFRUCTUARY • Pay expenses to 3rd persons for cultivation and production at beginning of usufruct. Notice of inventory of property (appraisal of movables and description) b.. usufructuary has no liability when due to wear and tear. Lease of Property Right to lease the property need not be Ri ght of usufructuary of woodland – ordinary cutting as owner does habitually or custom of place. he will be entitled to the rentals pertaining to such extension. when urgent and necessary for preservation of thing aaa Right to demand the increase in value of Right not exempt from execution and can be sold at public auction by owner prejudice to usufructuary. obliged to return in that state. d. those who have right to fruits should reimburse expenses incurred • Generally. if not appraised and consumable – return same quality (mutuum) OTHER RIGHTS OF THE USUFRUCTUARY: aa Right to hidden treasure as stranger aa a a a Right to administer when property is co- owned. If the usufruct should expire before the termination of the lease. Sale/Alienation rights of Usufructuary Right to leave dead. Before the Usufruct commences Before entering into Usufructuary: a.over the proceeds reimbursed) c. but is co-terminus with term of usufruct. he or his heirs and successors shall receive only the proportionate share of the rent that must be paid by the lessees. thing deteriorates. uprooted trees at the disposal of owner with right to demand that owner should clear and remove them – if caused by calamity or extraordinary event – impossible to replace them Right to oblige owner to give authority and furnish him proofs if usufruct is extended to recover real property or real right Right to introduce useful and luxurious expenses but with no obligation of reimbursement on part of owner. Appraised when delivered. Consumable b. except when there is fraud or negligence. may still exercise act of ownership – bring action to preserve ownership a a Naked owner still have rights but w/o aa Right to necessary expenses from cultivation at end of usufruct 5. Not applicable to parents who are usufructuary of children except when 2nd marriage contracted ii. if co-ownership cease – usufruct of part allotted to co-owner belongs to usufructuary – not affected property if owner did not spend for extraordinary repairs. Caucion Juratoria – promise under oath to deliver: Right to enjoy accessions and servitudes in its favor and all benefits inherent therein aa Right to make use of dead trunks of fruit bearing trees and shrubs or those uprooted/cut by accident but obliged to plant anew aa . (Art 568) If the naked owner allows the lease to continue even after the expiration of the usufruct. but cannot do acts of ownership such as alienation or conveyance except when property is: a.

Take care of property as a good father of family 2. Death of usufructuary – unless contrary intention appears 5. cost and liabilities in suits brought with regard to usufructuary – borne by usufructuary v. House included in the usufruct C. if attached. If property is mortgaged. Obliged to make expenses due to his fault. Renunciation of usufructuary – express 7. charges and taxes affecting fruits D. Insurance . Interest on proceeds or property under administration belong to usufructuary E. owner may make them at expense of usufructuary – during existence of usufruct iv. usufructuary has no obligation to pay mortgage.iii. Alteration of form and substance RIGHTS OF THE NAKED OWNER 1. Pay legal interest from extraordinary expenses made by owner C. Owner may retain property as administrator w/ obligation to deliver fruits to usufructuary until he gives sufficient security F. if on sterile animals – as if fungible – replace same kind & quality Failure to give security. Cannot do anything prejudicial to usufructuary 4. Expenses. Total loss of thing 4. Immovables be placed under administration B. usufructuary obliged to inform owner when urgent and there is the need to make them 2. Alienate thing 2. Furniture necessary for the use of the usufructuary B. Repairs Obligation to make ordinary repairs – wear and tear due to natural use of thing and are indispensable for preservation. Negotiable instruments can be converted into registered certificates or deposited in bank C. TERMINATION OF USUFRUCT Extinguishment of Usufruct: (PLDTERM) 1. if all of them perish w/o fault but due to contagious disease / uncommon event – deliver remains saved. Extraordinary expenses. owner to be liable for whatever is lost by usufructuary 5. Construct any works and make any improvement provided it does not diminish value or usufruct or prejudice right of usufructuary OBLIGATIONS OF THE NAKED OWNER 1. If usufruct is constituted on animals – duty bound to replace dead animals that die from natural causes or became prey . Expenses after renunciation of usufruct 3. not required by law or no one will be injured OTHER OBLIGATIONS OF THE USUFRUCTUARY 1. cannot escape by renouncing usufruct B. Merger of usufruct and ownership • Loss in part – remaining part shall continue to be held in usufruct ii. owner may demand that: A. if perish in part due to accident – continue on remaining portion. Effect of security is retroactive to day he is entitled to fruits b. Obliged to notify owner of act of 3 rd person prejudicial to rights of ownership – he is liable if he does not do so for damages – as if it was caused through his own fault 2. Payment of expenses. Capital and proceeds of sale of movables be invested in safe securities D. Prescription – use by 3rd person 2. Payment of interest on amount paid by owner charges on capital E. If property is expropriated for public use – owner obliged to either replace it or pay legal interest to usufructuary of net proceeds of the same 6. Expiration of period of usufruct 6. Cannot alter form or substance 3. tools and other movable property necessary for an industry or vocation for which he is engaged Excused – allowed by owner. Liable for negligence and fault of person who substitute him iii. During the Usufruct i. Termination of right of person constituting usufruct 3. Exercise of diligence Obligation to exercise diligence: 1. Implements. Charges and Taxes Obligation to charges and taxes: A. Taxes and expenses imposed directly on capital 4. A.

Kinds of Easements 2. Against Nuisance viii. Waters ii. 1. Negative – that which prohibits the owner of the servient estate from doing something which he could lawfully do if the easement did not exist b) According to party given the benefit a. Positive – one which imposes upon the servient estate the obligation of allowing something to be done or of doing it himself b. Discontinuous – used at intervals and depend upon the acts of man Ex. Lateral and Subjacent Support ================================ EASEMENT is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner.g. easement of water where lower estates are obliged to allow water naturally descending from upper estates to flow into them) b. Continuous – their use is incessant or may be incessant a. Drainage of Building vi. Intermediate Distances vii. easement of right of way for passage of livestock) c) According to the manner they are exercised i.g. Private i. Personal – for the benefit of one or more persons or community (e. if owner only – then proceeds will go to owner only Effect of bad use of the thing – owner may demand the delivery of and administration of the thing with responsibility to deliver net fruits to usufructuary at termination of usufruct Thing to be delivered to owner with right of retention for taxes and extraordinary expenses w/c should be reimbursed. EASEMENTS 1. Real (or predial) – for the benefit of another belonging to a different owner (e. Right of Way iii. right of way because it can only be used if a man passes d) According to whether or not their existence is indicated i. easement of not building to more than certain height DOCTRINE OF APPARENT SIGN . The immovable in favor of which the easement is established is . that which is subject thereto. Light and View v. Modes of Extinguishment 4. corporation or association for more than 50 years Usufruct constituted on immovable whereby a building is erected – and building is destroyed – right to make use of land and materials If owner wishes to construct a new building – pay usufructuary the value of interest of land and materials Both share in insurance if both pay premium. The existence of • • • • • ================================ TOPICS UNDER THE SYLLABUS I. easement of light and view is also continuous ii. for legal purposes for acquisitive prescription. Party Wall iv. Public b. the servient estate. Legal Easements a.• Usufruct cannot be constituted in favor of a town. Apparent – make known and continually kept in view by external signs that reveal the use and enjoyment of the same Ex. security of mortgage shall be cancelled called the dominant estate. KINDS a) According to purpose of easement or the nature of limitation a.Easements are inseparable from the estate to which they actively or passively pertain. right of way when there is an alley or a permanent path ii. the easement of aqueduct is considered continuous. Non-apparent – they show no external indication of their existence Ex. Rights and Obligations 3.

Non-user for 10 years α. Cannot alter or impose added burden on the easement 4. Retain ownership of the portion on which the easement is established. must notify the servient owner. Right to impede or prevent the neighboring estate from performing a specific act of ownership f) According to source or origin and establishment of easement a. Right to get specific materials or objects from the servient estate iii. Amor v. La Vista Association v. Change the place or manner of the use of the easement. If discontinuous easements  period computed from the day it was ceased to be used How established: 1. it is not creating one. Ask for mandatory injunction to prevent impairment of his use of the easement b) Obligations Of The Dominant Owner 1. Merger in the same person of the ownership of the dominant and servient estates. Florentino. Choose the most convenient time and manner in making the necessary works as to cause the least inconvenience to the servient owner c) Rights Of The Servient Owner 1. Legal – constituted by law for public use or for private interest 2. RIGHTS AND OBLIGATIONS a) Rights Of Dominant Owner 1. Use the property subject of the easement. unless there is an agreement to the contrary d) Obligations Of The Servient Owner 1. since no one objected to the continued existence of the windows. Right to participate in ownership Ex. Exercise all rights necessary for the use of the easement . and D. 624 is equivalent to a title. Mixed – created partly by agreement and partly by law c.the apparent sign under Art. are necessary for the use and preservation of the servitude. For. Renounce the easement if he desires to exempt himself from contribution to necessary expenses 4. when the court says that an easement exists. 278 SCRA 498 (1997) Essential qualities of easements: aa Incorporeal aa Imposed upon corporeal property aa Confer no right to a participation in the profits arising from it a a Imposed for the benefit of corporeal property aa Has 2 distinct tenements – dominant and servient estate aa Cause must be perpetual 2. before making the works. They shall be done at the most convenient time and manner so as to cause the least inconvenience to the servient owner 3. Not to impair the use of the easement 3. easement of party wall iv. Voluntary – constituted by will or agreement of the parties or by a testator b. The court merely declares the existence of an easement created by the parties. The works shall be at his expense. They do not alter or render the servitude more burdensome. Contribute to the necessary expenses if there are several dominant estates in proportion to the benefits derived from the works 3. It is as if there is an implied contract between the two new owners that the easement should be constituted. 2. Contribute to the necessary expenses in case he uses the easement. right of way ii. By the will of the owners (Voluntary) 3. MODES OF EXTINGUISHMENT How extinguished: 1. The dominant owner. CA. subject to the following conditions: A. unless there is an agreement to the contrary 2. By law (Legal) 2. and may use it in such a manner as not to affect the exercise of the easement 2. provided it be equally convenient 3. C. Through prescription (only for continuous and apparent easements) • Resultantly. 74 Phil 404 (1951) e) According to right given i. even an injunction cannot be used to create one as there is no such thing as a judicial easement. M ake any works necessary for the use and preservation of the servitude. Notify the servient owner of works necessary for the use and preservation of the servitude 2. B. Right to partially use the servient estate Ex.

neither can the owner of the higher estate make works which will increase the burden Banks of rivers and streams. Right of Way c. as well as stones or earth which they carry with them Cannot construct works which will impede the easement. Right of way is absolutely necessary 4. Public – for public or communal use 2. Sale ii. Not compulsory if the isolation of the immovable is due to the proprietor’s own acts b. Right of Way is granted without indemnity if land was acquired by and is surrounded by the other estates of the vendor. Prove that he can dispose of the water and that it is sufficient for the use intended 2. after payment of the proper indemnity Use of any water by anyone can be disposed by having the water flow through the intervening estates but is obliged to do the following: 1. subject to the easement of towpath. unless sufficient time for prescription has elapsed • 4. by the Civil Code. Private – for the interest of private persons/private use. Isolation not due to claimant’s own act 6.β. Against Nuisance h. including those relating to: (WRPL-DIAL) a. Exchange iii. Intermediate Distances g. Claimant must be an owner of enclosed immovable or one w/ real right 2. Drainage of Building f. to reach the former’s estates. Least prejudicial 5. Waters b. Party Wall d. revived if subsequent condition should again permit its use. Indemnify the owner of the servient estate Easement of aqueduct is continuous and apparent even though the flow of water may not be continuous b) Easement Of Right Of Way • Right granted to a person or class of persons to pass over the land of another by using a particular pathway therein. 4. to the easement of public use in the general interest of navigation. They shall be governed by the special laws and regulations relating thereto. 5. although of private ownership. fishing and salvage Estates adjoining the banks of navigable and floatable rivers are. exchanger or co-owner through: i. and in the absence thereof. which have no adequate outlet to a public highway. Light and View e. however to payment of indemnity to the owner of the servient estate Requisites: (LIPO NA) 1. Proper indemnity a. are subject throughout their entire length and within a zone of 3 meters along their margins. Partition • Burden of proof of proving the requisites on the owner of the dominant estate • • • • EXTINGUISHMENT: Legal or compulsory right of way • When the dominant estate is joined to another estate (such as when the dominant owner bought an adjacent estate) which is .LEGAL EASEMENTS LEGAL EASEMENTS are those imposed by law having for their object either public use or the interest of private persons. 6. for the exclusive service of river navigation and floatage • • Co mpulsory easements for drawing of water and for watering animals can be imposed for reasons of public use in favor of a town or village. 3. Show that the proposed right of way is the most convenient and least onerous to 3rd persons 3. subject. Kinds Of Legal Easements: 1. No adequate outlet to public highway 3. If continuous  period from the day on which an act contrary to the same took place Expiration of the term or fulfillment of the condition (if temporary or conditional) Renunciation of the owner of the dominant estate Redemption agreed upon between owners of the dominant and servient estates When either or both estates fall into a condition that the easement cannot be used. Lateral and Subjacent Support a) Easement Relating To Waters Lower estates are obliged to receive the waters which naturally and without the intervention of man descend from the higher estates. floatage.

must return the amount received as indemnity to the dominant owner without any interest. or in rural communities 3. Occupation L. but not on the other The lands enclosed by fences or live hedges adjoin others which are not enclosed In all these cases. being built by masonry. Vda. it has similar conditions on the upper part but the lower part slants or projects outward Entire wall is built within the boundaries of one of the estates The dividing wall bears the burden of the binding beams. G. From the time of the formal prohibition upon the proprietor of the adjoining land. which at certain intervals project from the surface of one side only. and in the manner and form which he may deem best. G. Extinguishment NOT ipso facto If extinguished. but not those of the others The dividing wall between courtyards. ================================ TOPICS UNDER THE SYLLABUS J. De Onorio. Intellectual Creation M. for the use of both estates. If the easement is NOT PRE-EXISTING and is sought to be imposed only AFTER the land has been registered under the Land Registration Act. No. Conditional Donations a. private way established by law. Modes of Acquiring Ownership 1. Title 2. Mode v. or proof to the contrary: 1. An easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operation by a person passes over another’s property. In dividing walls of gardens or yards situated in cities. Bomedco v. the access being adequate and convenient When a new road is opened giving access to the isolated estate In both cases: must substantially meet the needs of the dominant estate. provided that he does not contravene the laws. 2. Kinds 3. It may be exercised only if a person passes or sets foot on somebody else’s land. 4. unless there is a title. public policy or public order. Effect of Impossible/Illegal Conditions . • 7. • Presumed. In dividing walls of adjoining buildings up to the point of common elevation 2. In fences. or exterior sign. VOLUNTARY EASEMENTS are those which may be established by the owner of a tenement of piece of land as he may deem suitable. and on the other. and just compensation paid to the registered owner. The only servitude w/c a private owner is required to recognize in favor of the government is the easement of a public highway. if through a party wall 2. There is a window or opening in the dividing wall of buildings 4. if window is through a wall on the dominant estate • • c) Easement Of A Party Wall • A wall erected on the line between two adjoining properties belonging to different persons. Donation 1. the ownership is deemed to belong exclusively to the owner of the property which has in its favor the presumption based on any of these signs. proper expropriation proceedings should be had. 146062 (2001) Easement of right of way is DISCONTINUOUS. floors and roof frame of one of the buildings. walls and live hedges dividing rural lands Exterior signs rebutting presumption: 1. • • 6.R. way. No. Otherwise. gardens and tenements is constructed in such a way that the coping sheds the water upon only one of the estates The dividing wall. Di viding wall is on one side straight and plumb on all its facement. Valdez. 124669 (2003) 3.R. towns. Essential Elements 2. 5.• • abutting a public road. the easement may not be extinguished. From the time of opening of the window. Interest shall be deemed in payment for the rent. Eslaban v. d) Easement Of Light And View Period of prescription for the acquisition shall be counted: 1. has stepping stones. Original/Derivative Modes K. or any government canal or lateral that has been pre-existing at the time of the registration of the land.

4. Inter Vivos/Mortis Causa Donations 5. Form a. Onerous Donations 6. Capacity a. Of Donor b. Of Donee 7. Revocation a. Birth, Survival or Adoption b. Ingratitude c. Non-fulfillment of Condition d. Innoficiousness N. OTHER MODES OF ACQUIRING OWNERSHIP 1. Law 2. Prescription O. NUISANCE

Derivative Mode owner

– there was a preceding

MODES OF ACQUIRING (OLDTIPS) 1. Occupation 2. Law 3. Donation 4. Tradition 5. Intellectual Creation 6. Prescription 7. Succession 1. MODE V. TITLE Difference between Mode and Title MODE is the process of acquiring or transferring ownership TITLE is the juridical act, right or condition which gives the juridical justification for a mode or means to their acquisition but which in itself is insufficient to produce them Mode Directly and immediately produces a real right The cause Proximate cause Essence of the right which is to be created or transmitted Title Serves merely to give the occasion for its acquisition or existence The means Remote cause Means whereby that essence is transmitted OWNERSHIP:

Modes Of Extinguising Ownership: 1. Absolute – all persons are affected a. Physical loss or destruction b. Legal loss or destruction (when it goes out of the commerce of man) 2. Relative – only for certain persons for others may acquire their ownership a. Law b. Succession c. Tradition as a consequence of certain contracts d. Donation e. Abandonment f. Destruction of the prior title or right (like expropriation, rescission, annulment, fulfillment of a resolutory condition) g. Prescription OCCUPATION is the acquisition of ownership by seizing corporeal things w/c have no owner, made with the intention of acquiring them, and accomplished according to legal rules Requisites: 1. Seizure or apprehension • The holding of the material is not required as long as there is right of disposition 2. Property must be corporeal personal property 3. Property must be susceptible of appropriation a. Abandoned property – res derelicata, a thing is considered abandoned when: i. The spes recuperandi (expectation to recover) is gone ii. The animo revertendi (intention to return or to have it returned) has been given up by the owner b. Unowned property – res nullius 4. Without an owner 5. Intent to appropriate 6. Compliance with the requisites or conditions of the law • Abandonment requires (1) a clear and absolute intention to renounce a right or a claim or to abandon a right or property; and (2) an external act by which that intention is expressed or carried into effect. The intention to abandon implies a departure, with the avowed intent of never returning, resuming or claiming the right and the interest that

2. ORIGINAL/DERIVATIVE MODES Original Mode – independent of any preexisting or preceding title or right of another

have been abandoned. Castellano v. Francisco, [G.R. No. 155640, May 7, 2008] Things Susceptible to Occupation 1. Things w/c has no owner – res nullius; abandoned 2. Stolen property cannot be subject of occupation 3. Animals that are the object of hunting and fishing NOTE: Hunting and fishing are regulated by special laws: Act 2590; Fisheries Act 4003 as amended by CA 116, CA 147 and RA 659; Act 1499 as amended by Act 1685; PD 534; Municipal ordinances. Kinds Of Animals a. Wild – considered res nullius when not yet captured; when captured and escaped – becomes res nullius again b. Domesticated animals – originally wild but have been captured and tamed; now belong to their capturer; has habit of returning to premises of owner; becomes res nullius if they lose that habit of returning and regain their original state of freedom c. Domestic/tamed animals – born and ordinarily raised under the care of people; become res nullius when abandoned by owner • • Hidden treasure (only when found on things not belonging to anyone) Abandoned movables

d. If finder retains the thing found – he may be charged with theft e. If owner is unknown, give to mayor; mayor shall announce finding of the movable for 2 weeks in a way he deems best f. If owner does not appear 6 months after publication, thing found shall be awarded to the finder g. If owner appears, he is obliged to pay the finder 1/10 of value of property as price h. If movable is perishable or cannot be kept w/o deterioration or w/o expenses it shall be sold at public auction 8 days after the publication Ownership of a piece of land cannot be acquired by occupation • Because when a land is without an owner, it pertains to the State • Land that does not belong to anyone is presumed to be public land • But when a property is private and it is abandoned it can be object of occupation

• By Article 722 and Decree Intellectual Property (P.D. 49), the author, composer, artist, or scientist can be considered as the owner of the creation or product even if it has not been copyrighted or patented. (Jurado) Letters and other private communications in writing are owned by the person to whom they are addressed and delivered, but they cannot be published or disseminated without the consent of the writer or his heirs EXCEPT when the court so authorize if the public good or the interest of justice so requires.

Animals 1. Swarm of bees owner shall have right to pursue them to another’s land (owner to identify latter for damages, if any) land owner shall occupy/retain the bees if after 2 days, owner did not pursue the bees 2. Domesticated animals may be redeemed within 20 days from occupation of another person; if no redemption is made, they shall pertain to the one who caught them 3. Pigeons and fish when they go to another breeding place, they shall be owned by the new owner provided they are not enticed Movables: 1. Treasure found on another’s property 2. Movable found w/c is not treasure: c. Must be returned to owner

DONATION is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it 1. ESSENTIAL ELEMENTS Characteristics 1. Unilateral – obligation imposed on the donor 2. Consensual – perfected at time donor knows of acceptance Requisites: (CIDA) a a The donor must have capacity to make the donation of a thing or right

aa Donative intent (animus donandi) or intent to make the donation out of liberality to benefit the donee a a Delivery, whether actual or constructive of the thing or right donated a a donee must accept or consent to donation • The donation is perfected once the acceptance of the donation was made known to the donor. Accordingly, ownership will only revert to the donor if the resolutory condition is not fulfilled. Quijada v. CA, 299 SCRA 695 (1998) Requirements of a Donation: 1. Subject matter – anything of value; present and not future property, must not impair legitime 2. Cause – anything to support a consideration, generosity, charity, goodwill, past service, debt 3. Capacity to donate, dispose and accept donation 4. Form – depends on value of donation 2. KINDS a) As to Effectivity 1. Inter vivos – takes effect during the lifetime of the donor 2. Mortis Causa – takes effect upon the death of the donor 3. Propter Nuptias – made by reason of marriage and before its celebration, in consideration of the same and in favor of one or both of the future spouses. DONATION INTER VIVOS Disposition and acceptance to take effect during lifetime of donor and donee Already pertains to the donee unless there is a contrary intent Formalities required follow law on donations and certain kinds of donations and law on obligations and contracts (suppletory) Irrevocable at the instance of the donor; may be revoked only by reasons provided by law Revoked only for DONATION MORTIS CAUSA Disposition happens upon the death of donor Even if there is a term of effectivity and effectivity is upon the death of the donor, still entitled to fruits Formalities required follow law on succession to be valid, and donation must be in the form of a will Revocable ad mutuum (exclusive will of donor)

reasons provided for by law (except onerous donations) b) As to Consideration 1. Simple – the cause of which is the pure liberality of the donor in consideration of the donee’s merits 2. Remuneratory or compensatory – it is given out of gratitude on account of the services rendered by the donee to the donor, provided they do not constitute a demandable debt. 3. Modal – imposes upon the donee a burden less than the value of the gift 4. Onerous – the value of which is considered the equivalent of the consideration for which it is given and thus governed by the rules of obligations and contracts c) As to Effectivity of Extinguishment 1. Pure – not subject to any condition (uncertain event) or period 2. Conditional – subject to suspensive or resolutory condition 3. With a Term – subject to a period, suspensive or resolutory 3. CONDITIONAL DONATIONS α. Effect of Conditions Conditional – subject resolutory condition Impossible/Illegal to suspensive or



Inter vivos – takes effect during the lifetime of the donor Mortis Causa – takes effect upon the death of the donor 5. FORM a. Onerous Donations ONEROUS – the value of which is considered the equivalent of the consideration for which it is given and thus governed by the rules of obligations and contracts 6. CAPACITY a. Of Donor Who may give donations All persons who may contract and dispose of their property ― donor’s capacity shall be

determined as of the time of the making of the donation b. Of Donee Who may accept donations 1. Natural and juridical persons not especially disqualified by law 2. Minors and other incapacitated A. By themselves I. If pure and simple donation II. If it does not require written acceptance B. By guardian, legal representatives if needs written acceptance I. Natural guardian – not more than 50,000 II. Court appointed – more than 50,000 4. Conceived and unborn child, represented by person who would have been guardian if already born Who are disqualified to donate 1. Guardians and trustees with respect to property entrusted to them 2. Husband and wife 3. Between paramours/persons guilty of adultery or concubinage at the time of donation 4. Between parties guilty of same criminal offense 5. Made to public officers, wife, descendant, ascendant, by reason of his office The prohibition against donations between spouses must likewise apply to donations between persons living together in illicit relations. Joaquino v. Reyes, [G.R. No. 154645, July 13, 2003] Other persons disqualified to receive donations 1. Priest who heard confession of donor during his last illness 2. Relatives of priest within 4th degree, church, order or community where priest belongs 3. Physician, nurse, etc. who took care of donor during his last illness 4. Individuals, corporations and associations not permitted Acceptance a. Acceptance must be made personally or thru agent b. Donation may be made orally or in writing: • Movable: 5,000 and below – may be oral or written, if oral it must be with simultaneous


delivery of thing/document & acceptance need not be in writing above 5,000 - must be written and accepted also in writing • Immovable must be in a public instrument and acceptance must also be in a public instrument (in same instrument or in other instrument); otherwise it is void Must be made during the lifetime of the donor and donee

In case of doubt with regard to nature of donation: inter vivos Badges of mortis causa: 2. Title remains with donor (full or naked ownership) and conveyed only upon death 3. Donor can revoke ad mutuum 4. Transfer is void if transferor survives transferee • A donation mortis causa must comply with the formalities of a last will and testament otherwise, it would be void and would produce no effect. If the donation is made in such a way that the full and naked ownership will pass to the donee upon the death of the donor, then it is at that time when the donation will take effect and it is the donation mortis causa which should be embodied in the last will and testament. Maglasang v. Cabatingan, [G.R. No. 131953, June 2, 2002] SOME RULES ON DETERMINATION WHETHER MORTIS CAUSA OR INTER VIVOS: 1. A donation made “in consideration of love and affection of the donor and the donee” but further stipulates that “It became effective upon the death of the donor provided that in the event the donee should die before the donor, the present donation shall be deemed automatically rescinded and of no force and effect.”  mortis causa since the right of disposition is not transferred to donee while donor is still alive. Sicad v. CA 5. A donation made stipulating that it will take effect after the death of the donor but further stipulates that (1) the donor will not dispose nor take it away from the donee and that (2) the donor is parting with the beneficial ownership while he lived  inter vivos Donation Of The Same Thing To 2 Or More Different Persons • Rules on double sale will apply

CLASSIFICATION OF DONATION INTER VIVOS 1. From the viewpoint of motive, purpose, or cause PURE/ SIMPLE Consider a-tion Merits of donee REMUNERA TORY Liberality or merits of donee or burden/ charge of past services provided they do not constitute demanda ble debt Law on donations COND ITION AL Valuable considera -tion is imposed but value is less than value of thing donated ONEROU S Valuable considera -tion given

om the viewpoint of the taking effect • Inter vivos – takes effect before the death • In praesenti – to be delivered in future (also considered inter vivos) • Mortis causa 3. From the viewpoint of occasion • Ordinary donation • Donation propter nuptias 4. From the viewpoint of object donated • Corporeal property A. Donation of real property B. Donation of personal property • Incorporeal property – donation of inalienable rights What may be given • All or part of donor’s present property provided he reserves sufficient means for the support of the ff: a. Himself b. Relatives who by law are entitled to his support c. Legitimes shall not be impaired • when w/o reservation or if inofficious, may be reduced on petition of persons affected • Exception: conditional donation and donation mortis causa • Exception To The Exception: future property (cannot be disposed of at the time of donation) • A donation would not be legally feasible if the donor has neither ownership nor real rights that he can transmit to the donee. Hemedes v. CA, [G.R. No. 107132, October 8, 2008]

2. Fr

Law to apply/ forms Law on donations

Extent of burden

Form of accepta nce Required Reservat ion w/regar d to personal support and legitime Applicabl e Warrant y against eviction and hidden defects In bad faith only Revocati on Applicabl e



Law on obligation s imposed > ObliCon excess> donation Required

Applicabl e

Applicabl e

Not Applicabl e

In bad faith only

In bad faith only


DOUBLE DONATIONS: Rule: Priority in time, priority in right 1. If movable – one who first takes possession in good faith 2. If immovable – one who recorded in registry of property in good faith • No inscription, one who first took possession in good faith • In absence thereof, one who presents oldest title 7. REVOCATION Grounds For Revocation 1. Birth, Adoption, Reappearance of a child • Period of 4 years from the time of birth, adoption or reappearance to revoke the donation

Applicabl e

Applicabl e

Applicabl e

Transmissible to the heirs of the donor if the donor dies within the 4 year period, in which case the remaining period shall apply to the donor’s heirs • Reduction shall be based on the inofficiousness of the donation 2. Non-fulfillment of the conditions 3. Ingratitude • Cannot be passed to the donor’s heir • Period of 1 year from knowledge of the act of ingratitude, and it was possible for him to bring the action Grounds For Reduction 1. Failure of the donor to reserve sufficient means for support of himself or dependent relatives 2. Failure of donor to reserve sufficient property to pay off existing debts 3. Inofficiousness, that is, the donation exceeds that which the donor can give by will 4. Birth, appearance or adoption of a child AUTOMATIC REVOCATION • In contracts providing for automatic revocation, judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention, but in order to determine whether or not the rescission was proper the stipulation of the parties providing for automatic revocation of the deed of donation, without prior judicial action for that purpose, is valid subject to the determination of the propriety of the rescission sought. Where such propriety is sustained, the decision of the court will be merely declaratory of the revocation, but it is not in itself the revocatory act. Zamboanga Barter Traders v. Plagata, [G.R. No. 148433] Revocation Of Donations • Affects the whole donation • Applies only to donation inter vivos • Not applicable to onerous donations • Donor can revoke donation if the donee fails to comply with the conditions imposed by the donor. Prescription: 4 years from the non-compliance with condition. • X donated a parcel of land to the University on the condition that the latter will establish a medical college named after X. After 50 years, X’s heirs filed annulment for failure to abide by the condition. Can this be revoked? General rule is that if the period is not fixed

in the contract, the court can fix the period. However, it has been 50 years, more than enough time to comply. The Court refused to fix a period and ruled that the donation can be revoked for failure to comply with condition. Central Philippine University v. CA, 246 SCRA 511 Action for revocation by reason of ingratitude 1. Donee commits offense against person, honor, property of donor, spouse, children under his parental authority 2. Donee imputes to donor any criminal offense or any act involving moral turpitude even if he should prove it unless act/crime has been committed against donee himself, spouse or children under his parental authority 3. Donee unduly refuses to give support to donor when legally or morally bound to give support to donor BIRTH OF CHILD Ipso jure revocation, no need for action, court decision is merely declaratory Extent: portion which may impair legitime of heirs Property must be returned Alienation/mor tgages done prior to recording in Register of Deeds: If already sold or cannot be returned – the value must be returned If mortgaged – donor may redeem the mortgage with right to recover from NONFULFILLMEN T OF CONDITION Needs court action INGRTITAUD E Needs court action

Extent: whole portion but court may rule partial revocation only Property in excess Alienations/m ortgages imposed are void unless registered with Register of Deeds

Extent: Whole portion returned

Property to be returned Prior ones are void; demand value of property when alienated and cannot be recovered or redeemed from 3rd persons

donee Fruits to be returned at filing of action for revocation Prescription of action is 4 years from birth, etc.

Fruits to be returned at filing of complainant Prescription is 4 years from nonfulfillment

6. Effect of declaration as inofficious: the donation is annulled only as to the portion diminishing the legitime • Prescription is 1 year from knowledge of fact and it was possible for him to bring action Cause of action arising from the inofficiousness of donation arises only upon death of the donor, as the value of the donation will be contrasted with the net value of the estate of the donor decedent. Eloy Imperial v. CA,[ G.R. No. 112483 (1999)]

Action cannot be renounced Right of action transmitted to heirs

Action extends to donee’s heirs

Action cannot be renounced in advance Right of action at instance of donor but may be transmitted to heirs Action does not extend to donee’s heirs

Heirs cannot file action

Exception to rule on intransmissibility of action with regard to revocation due to ingratitude: 1. Personal to the donor; general rule is heir cannot institute if donor did not institute 2. Heirs can only file in the following cases: a. Donor has instituted proceedings but dies before bringing civil action for revocation b. Donor already instituted civil action but died, heirs can substitute c. Donee killed donor or his ingratitude caused the death of the donor d. Donor died w/o having known the ingratitude done e. Criminal action filed but abated by death 3. Can only make heirs of donee liable if complaint was already filed when donee died Inofficious donations: 1. Shall be reduced with regard to the excess 2. Action to reduce shall be filed by heirs who have right to legitime at time of donation 3. Donees/creditors of deceased donor cannot ask for reduction of donation 4. If there are 2 or more donation: recent ones shall be suppressed 5. If 2 or more donation at same time – treated equally and reduction is pro rata but donor may impose preference which must be expressly stated in donation

Checklist For Donation: 1. Whether onerous or gratuitous – if onerous, governed by law on contracts 2. If gratuitous, whether mortis causa or inter vivos – if mortis causa, governed by law on succession 3. If inter vivos, whether perfected or not (made known to the donor). If no perfection, donation is void. 4. If perfected, check for the capacity of the donor to give and the donee to receive. If no capacity, donation is void. 5. Compliance with Art 748 (movable) and 749 (immovable) of NCC. Non-compliance, donation is void. ILLEGAL AND IMPOSSIBLE CONDITIONS In Simple/Remunatory donations – shall be considered as not imposed (Art 727) In Onerous/Contract – annuls obligation; obligation and conditions are void (Art 1183)

N. Other Modes of Acquiring Ownership
1. LAW
Refers to those instances where the law, independently of the other modes of acquiring ownership, automatically and directly vests the ownership of the thing in a certain individual once the prescribed requisites or conditions are present or complied with (Jurado). 2. PRESCRIPTION PRESCRIPTION is a mode by which one acquires ownership and other real rights thru lapse of time; also a means by which one loses ownership, rights and actions; retroactive from the moment period began to run; founded on grounds of public policy; regarded as a statute of repose Kinds: 1. Acquisitive General Requisites: A. Capacity to acquire by prescription

Minors and incapacitated person who have guardians 2. Between co-heirs/co-owners 9. Possession of thing under certain conditions D. Persons living abroad who have administrators 4.B. Thing capable of acquisition by prescription C. Person who is capable of acquiring property by other legal modes 2. Minors – through guardians or personally Against whom prescription may run 1. Between husband and wife 6. Between owner of property and person in possession of property in concept of holder . State 3. Absentees who have administrators 3. 97 SCRA 872. 1980 Who may acquire by prescription 1. Between parents and children (during minority/insanity) 7. Lapse of time provided by law 2. Juridical persons except the state with regard to property not patrimonial in character 5. Extinctive – also called as limitation of actions Morales v CFI. Between guardian and ward (during guardianship) 8.

as when one is in possession of a thing in the mistaken belief that it had been bequeathed to him. Registered land Renunciation of Prescription • Persons with capacity to alienate may renounce prescription already obtained but not the right to prescribe in the future • May be express or tacit • Prescription is deemed to have been tacitly renounced.Prescription does NOT run 1. peaceful. Between parents and children. Just title is proved b. peaceful. In concept of an owner e. during the minority or insanity of the latter 3.a person believes he has obtained title but he has not because there was no mode of acquiring ownership. In concept of an owner 2. Between guardian and ward during the continuance of the guardianship Things subject to prescription: all things within the commerce of men 1. 4 years for movables ii. 7 Phil. uninterrupted 2. uninterrupted GOOD FAITH • • Re asonable belief that person who transferred the thing is the owner and could validly transmit ownership Must exist throughout the entire period required for prescription JUST TITLE (TRUE and VALID) – must be proved and never presumed. Within time fixed by law i. EXCEPT: i. Public. 232. Just title c. Between husband and wife. Plaintiff desists from complaint/allows proceedings to lapse iii. possession ceases for more than 1 year B. Produced by judicial summons. 1906 • Title must be one which would have been sufficient to transfer ownership if grantor had been the owner • Through one of the modes of transferring ownership but there is vice/defect in capacity of grantor to transmit ownership IN CONCEPT OF OWNER • Possession not by mere tolerance of owner but adverse to that of the owner • Claim that he owns the property PUBLIC. only Titulo Colorado is required • Titulo Colorado – such title where there was a mode of transferring ownership but something is wrong because the grantor is not the owner • Titulo putativo . Through any cause. Within time fixed by law i. Patrimonial property of the State Things not subject to prescription 1. Possessor is absolved from complaint • Express or tacit renunciation • Possession in wartime RULES IN COMPUTATION OF PERIOD • Present possessor may tack his possession to that of his grantor or predecessor in interest . Natural A. Intransmissible rights 3. Doliendo v Biarnesa. Ordinary a. 30 years for immovables 1. 8 years for immovables d. PEACEFUL & UNINTERRUPTED • Must be known to the owner of the thing • Acquired and maintained w/o violence • Uninterrupted (no act of deprivation by others) in the enjoyment of property INTERRUPTION 1. Public. even though there be a separation of property agreed upon in the marriage settlements or by judicial decree 2. Void for lack of legal solemnities ii. Movables possessed through a crime 4. Private property 2. If 1 year of less – as if no interruption 2. renunciation results from the acts w/c imply abandonment of right acquired • Creditors and persons interested in making prescription effective may avail it themselves notwithstanding express or tacit renunciation PRESCRIPTION OF OWNERSHIP AND OTHER REAL RIGHTS Kinds of Acquisitive prescription 1. Public domain 2. Possession in good faith b. 10 years for movables ii. Extra-ordinary a. Civil A.

The principal reason for the doctrine is that the condition or appliance in question although its danger is apparent to those of age. action upon a judgment 8 yrs 1. get on or use it. Abate public/private nuisance 3. even if the child is technically a trespasser in the premises. or anything else which: 1. business.• Present possessor presumed to be in continuous possession even with intervening time unless contrary is proved • First day excluded. action upon a quasi-contract 4 yrs 1. NUISANCE NUISANCE is any act. action to recover movables from time possession is lost 6 yrs 1. Recover property subject to expressed trust 5. is liable to a child of tender years who is injured thereby. Quiet title 4. Shocks. Injures or endangers the health or safety of others 2. others where periods are not fixed by law Rights not extinguished by prescription: 1. and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto. artificial as well as natural in the absence of some unusual condition or artificial feature other than the mere water and its location. defies or disregards decency or morality . v. action upon an oral contract 2. action upon obligation created by law 4. action over immovables from time possession is lost 10 yrs 1. Inc. upon injury to rights of plaintiff 2. Declare contract void 4. Private nuisance – affects a an individual or few persons only Other Classification: 1. Hinders or impairs the use of property • Lapse of time cannot legalize any nuisance. 91 Phil. m ortgage action 2. DOCTRINE OF ATTRACTIVE NUISANCE: aa REASON for the doctrine: one who maintains on his premises dangerous instrumentalities or appliances of a character likely to attract children in play. Remedies against a public nuisance: aa Prosecution under the Penal Code or any local ordinance aa Civil action aa Extra-judicial abatement • All remedies may be simultaneously pursued to remove a nuisance O. O bstructs or interferes with the free passage of any public highway or street. Nuisance Per Accidens – nuisance by reason of location. upon a quasi-delict 1 yr 1. 488 (1952) aa Application to bodies of water – generally not applicable to bodies of water. is so enticing or alluring to children of tender years as to induce them to approach. whether public or private Kinds of Nuisances According To Number of Persons Affected: 1. action upon written contract 3. Demand right of way 2. Balandan. Annoys or offends the senses 3. or any body of water 5. Probate of a will 6. omission. establishment. defamation 5 yrs 1. Hidalgo Enterprises. and this attractiveness is an implied invitation to such children. last day included TACKING PERIOD • There must be privity between previous and present possessor • Possible when there is succession of rights • If character of possession different: predecessor in bad faith possessor in good faith – use extraordinary prescription PRESCRIPTION OF ACTIONS PRESCRIPTIV ACTION E PERIOD 30 yrs 1. surrounding or in the manner it is conducted or managed. forcible entry and unlawful detainer 2. Nuisance Per Se – always a nuisance because of its nature regardless of location or surroundings 2. condition of property. Public (or common) nuisance – affects a community or neighborhood or considerable number of persons 2.

it must be specially injurious to him A private person or a public official extrajudicially abating a nuisance shall be liable for damages: aa If he causes unnecessary injury aa If an alleged nuisance is later declared by the courts to be not a real nuisance Remedies against a private nuisance: aa Civil action aa Abatement. Demand has been made 2. No legalization of nuisance. Civil action against a public nuisance shall be commenced by the mayor of the locality 6. If public nuisance.Requirements for abatement of a public/private nuisance by a private person: 1. Subsequent owner of the property. Demand has been rejected 3. having full knowledge of the existence of the nuisance. A private person may commence a civil action to eliminate a public nuisance only if he suffered a particular harm or injury which is different from the harm or damage suffered by the general public by reason thereof . by prescription 2. whether private or public. Abatement be approved by the district health officer and executed with the assistance of the local police 4. the aggrieved person may still pursue a civil action for damages for the injuries suffered during the existence of nuisance 3. did not remove the nuisance is solidarily liable for the injuries and damages caused 4. Owner of nuisance property is not entitled to compensation 5. Value of the destruction does not exceed P3000 5. without judicial proceedings NOTE: 1. Even if nuisance no longer exists.

1994]. page 6. It is a “legal bond whereby constraint is laid upon a person or group of persons to act or forbear on behalf of another person or group of persons. contract. viewed from the demandability of the obligation. It is not a thing but a particular conduct of the debtor. delicts and quasi-delicts). or not to do). 5. REQUISITES OF A VALID PRESTATION: TOPICS UNDER THE SYLLABUS A. to do or not to do. Extra-contractual obligations ========================================= ========================================= 2. ACTIVE SUBJECT (obligee/creditor): one in whose favor the obligation is constituted. ELEMENTS OF AN OBLIGATION ELEMENTS OF AN OBLIGATION: ARTS. It can be established by various sources of obligations (law. PASSIVE SUBJECT (obligor/debtor): one who has the duty of giving. DEFINITION OBLIGATION: 1. viz. and quasi-delicts) and may arise either from bilateral or unilateral acts of persons. December 2. Determinate/ Determinable d.R. are the ========================================= TOPICS UNDER THE SYLLABUS A. (Art. doing or not doing. Must have pecuniary value Ang Yu Asuncion vs Court of Appeals [G. (b) the object which is the prestation or conduct. VINCULUM JURIS/ LEGAL TIE: the efficient cause or the juridical tie between two subjects by reason of which the debtor is bound in favor of the creditor to perform the obligation. D. quasi-contracts. required to be observed (to give. GENERAL PROVISIONS ================================ TOPICS UNDER THE SYLLABUS A. 1157 B. GENERAL PROVISIONS 1. Elements of an Obligation 3.OBLIGATIONS A. 1913 edition. Definition ========================================= 1. delicts. Commentaries on the Law of Contracts. person entitled to demand C. 1156 – 1162 (PAVO) A. No. 1156) 2. Indianapolis. The Bobbs-Merrill Company. contracts. Volume 1. Natural obligations C. Sources of Obligations A. Art. Possible c. A juridical necessity to give. GENERAL PROVISIONS 2. The obligation is constituted upon the concurrence of the essential elements thereof. GENERAL PROVISIONS 1. 109125. OBJECT/ SUBJECT MATTER: the prestation or conduct which has to be observed by the debtor/obligor. Definition 2. Elliot.: (a) The vinculum juris or the juridical tie which is the efficient cause established by the various sources of obligations (law. Different Kinds of Prestation 4. Classification of Obligations 5. Licit b. 23.”1 a. citing Anson Cont. CIVIL LAW REVIEWER Page 85 of 401 . Elements of an Obligation 1 William F. quasi-contracts. to do. person bound to the fulfillment B. and (c) subject-persons who.

Natural Obligations – not based on positive law but on equity and natural law. 1423. ========================================= B. but after voluntary fulfillment by the obligor. GENERAL PROVISIONS 4. includes “not to give. Real Obligation I. Limited Generic D. however. Personal Obligation b. Viewpoint of Performance a. Moral Obligations – those that cannot be enforced by action but which are binding on the party who makes it in conscience and natural law. Viewpoint of Sanction a. b. to do. β. Classification of Obligations ========================================= Distinguish a Civil Obligation from Natural Obligation CIVIL OBLIGATION Art. Unilateral – only one party is bound Bilateral – both parties are bound TOPICS UNDER THE SYLLABUS A. b. cannot be considered as essential as there is no particular form required to make obligations binding. Different Kinds of Prestation ========================================= C. TOPICS UNDER THE SYLLABUS A. Viewpoint of Subject Matter (obligee) subjects.1430 Based on equity and natural justice Cannot be compeled 4. except in rare cases. Generic III. 1156 Based on positive law Enforceable by court NATURAL OBLIGATION Arts. GENERAL PROVISIONS 3.” both being negative obligations II. c. CLASSIFICATION OF OBLIGATIONS A. do not grant a right of action to enforce their performance. Viewpoint of Person Obliged ========================================= α. and the passive (obligor) NOTE: The form in which the obligation is manifested is sometimes added as a fifth element. Civil Obligations – give a right of action to compel their performance CIVIL LAW REVIEWER Page 86 of 401 . Negative Obligation – not to do. they authorize retention of what has been delivered or rendered by reason thereof. DIFFERENT KINDS OF OBLIGATION a) To give b) To do c) Not to do – consists in abstaining from some act. Positive Obligation – to give. This element. Determinate or Specific 3.

L-37756. which has for its purpose. OBLIGATIONS ARISE A juridical conventions manifested in legal form. Neither party may unilaterally evade his obligation in the contract. (Art. good customs. the payment of indemnity to the end that no one shall be unjustly enriched or benefited at the expense of another. and (5) Quasi-delicts • NOTE: The list is exclusive (Sagrado Orden v. to do. public order or public policy. [G. • CIVIL LAW REVIEWER Page 87 of 401 . or reciprocally. QUASI-CONTRACTS (Obligation Ex Quasi-Contractu) • Juridical relations resulting from lawful. unless the acts to which its principles may be applied exist. morals. or not to do. p. some writers expressly recognize that a UNILATERAL PROMISE can give rise to obligations (Tolentino. Sources of Obligations ========================================= A. • It must be expressly or impliedly set forth and cannot be presumed.R.action by cour action but depends exclusively upon the good conscience of the debtor their correlative rights are governed by the law by which they are created. However. Parties may freely enter into any stipulations provided they are not contrary to law. No. ========================================= TOPICS UNDER THE SYLLABUS A. GENERAL PROVISIONS 5. And such obligations and A.2. such terms should be applied in their literal meaning. June 30. 62). (3) Quasi-contracts. to the fulfillment of a prestation to give. 1159) The terms of the contracts determine the respective obligations of the parties. LAW (OBLIGATION EX LEGE) • The law cannot exist as a source of obligations. Nacoco. If the terms of the contract are clear and leave no doubt upon the contracting parties’ intention. • 1157. Once the acts or facts exist.1. 1952] ). • • A. CONTRACTS CONTRACTU) • (OBLIGATION EX 5. voluntary and unilateral acts. (2) Contracts. SOURCES OF OBLIGATION • A.3. unless the contract authorizes it or the other party assents. the obligations arising therefrom by virtue of the express provisions of the law are entirely independent of the agreement of the parties. ARTICLE FROM (1) Law. (Sanchez Roman) Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. by virtue of which one or more persons bind themselves in favor another. Volume IV. or others. (4) Acts or omissions punished by law.

(Tolentino. 2. 2. Contempt 2. Such civil liability is a necessary consequence of criminal responsibility. 2164-2175) A.4. Solutio indebiti: is the juridical relation. Violations of traffic regulations (De Leon. There is no right to receive the thing delivered. Reparation for damage caused 3. (Art. 2145) The requisites are: c. in which the offended party may still be able to recover damages by a preponderance of evidence. Insults to persons in authority 3. b. 2144) b.. • The civil liability springs out and is dependent upon the facts which. on Human Relations ( Civil Code ) 3. 68) KINDS OF QUASI-CONTRACT a. The act must be UNILATERAL distinguishing it from contract which is based on agreement. Preliminary title. The thing was delivered through mistake. d. p. Chapter 2. DELICTS (OBLIGATION EX MALEFICIO OR EX DELICTO) • Article 100 of the Revised Penal Code – Every person criminally liable for a felony is also civilly liable. would constitute a crime. Other cases (Art. and is to be declared and generally enforced in the criminal proceeding except where the injured party reserves his right to avail EXCEPTION: Where the judgment of acquittal contained a declaration that no negligence can be attributed to the accused and that the fact from which the civil action might arise did not exist CRIMES WITHOUT CIVIL LIABILITY 1. The act must be VOLUNTARY distinguishing it from a quasi-delict which is based on fault or negligence. c. (Art. Indemnity for Consequential damages EFFECT OF ACQUITTAL IN CRIMINAL CASE GENERAL RULE: The acquittal of the accused in the criminal case does not prejudice the civil action. which is created when something is received when there is no right to demand it and it was unduly delivered through mistake. Negotiorum Gestio: is the voluntary management of the property or affairs of another without the knowledge or consent of the latter. 23) • CIVIL LAW REVIEWER Page 88 of 401 .• Distinguished from other Sources (LUV) himself of it in a distinct civil action or in cases where an independent civil action is allowed by law.p. Volume IV. Gambling 4. 2003 ed. if true. GOVERNING RULES: 1. Title 18 of Book IV of the Civil Code on damages SCOPE OF CIVIL LIABILITY 1. Restitution a. The act giving rise to a quasi-contract must be LAWFUL distinguishing it from delict. Articles 100-113 of the RPC and other penal laws subject to Art 2177 Civil Code (quasidelict). e.

or that the fault or negligence be the cause of the damage or injury. but which the debtor may perform voluntarily. and presupposes a prestation. Reimbursement of a third person for a debt that has prescribed 3. EXAMPLES OF NATURAL OBLIGATIONS ENUMERATED UNDER THE CIVIL CODE: 1. • TEST of NEGLIGENCE: “Would a prudent man. QUASI-DELICT/TORTS (OBLIGATION EX QUASI-DELICTO/ EX QUASI MALEFICIO) • It is an act or omission arising from fault or negligence which causes damage to another. 2. precaution and vigilance which the circumstances justly demand. Performance after action to enforce civil obligation has failed 6. US v. That there must be a direct causal connection or a relation of cause and effect between the fault or negligence and the damage or injury. An injury to the plaintiff through such failure. They are real obligations to which the law denies an action. A failure to perform that duty.EXTINGUISHMENT OF LIABILITY: The civil liability for crimes is extinguished by the same causes provided by the Civil Code for the extinguishment of other obligations. That there exists a damage or injury. Barrias. they do not have the necessary efficacy to give rise to an action. Delivery by minor of money or fungible thing in fulfillment of obligation 5. foresee harm to the person injured as a reasonable consequence of the course about to be pursued?” Picart v. there being no pre-existing contractual relations between the parties • ELEMENTS: 1. or (b) An action from quasi-delict under Articles 2176-2194 of the Civil Code. and b. Payment by heir of debt exceeding value of property inherited NEGLIGENCE: Failure to observe for the protection of the interests of another person. 1423 – 1430) NATURAL OBLIGATIONS 1. It is patrimonial. (1912)] • ELEMENTS OF NEGLIGENCE: (DFI) a.5. Performance after the civil obligation has prescribed 2. c. That there exists a wrongful act or omission imputable to the defendant by reason of his fault or negligence. 3. whereby such other person suffers injury. 2. Restitution by minor after annulment of contract 4. 3. 434. NATURAL OBLIGATIONS (Arts. [23 Phil. The binding tie of these obligations is in the conscience of man. [37 Phil. Smith. for under the law. that degree of care. 809] B. A duty on the part of the defendant to protect the plaintiff from the injury of which the latter complains. in the position of the person to whom negligence is attributed. DISTINCT FROM A CRIME: An injured party or his heirs has the choice of either: (a) An action to enforce civil liability arising from crime under Article 100 of the RPC. which must be proved by the person claiming recovery. A. CIVIL LAW REVIEWER Page 89 of 401 .

Injury to the defendant in the event relief is accorded to the complainant. the complainant having knowledge or notice. C. Conduct on part of the defendant. could or should have been done earlier. ELEMENTS (CDLI) C. ESTOPPEL (Arts. Estoppel in pais (by conduct) a. KINDS: 1.2. Estoppel by silence b. giving rise to the situation of which complaint is made and for which the complaint seeks a remedy 2. 1431 – 1439) ESTOPPEL . Estoppel by judgment Question of inequity of permitting the claim to be enforced Not statutory Applies in equity Not based on a fixed time d. 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. Estoppel by laches C. LACHES OR STALE DEMANDS LACHES – Failure or neglect. GENERAL PROVISIONS ================================ B. NATURE AND EFFECT OF OBLIGATIONS ================================ TOPICS UNDER THE SYLLABUS B. Estoppel by acceptance of benefits Distinguish Laches from Prescription LACHES Concerned delay with effect of PRESCRIPTION Concerned with fact of delay Question or matter of time Statutory Applies at law Based on a fixed time 2. or of one under whom he claims. Estoppel by deed b. NATURE AND EFFECT OF OBLIGATIONS CIVIL LAW REVIEWER Page 90 of 401 . Estoppel by record c.1. of the defendant’s conduct and having been afforded the opportunity to institute a suit 3. Payment of legacy after will have been declared void. it is negligence or omission to assert a right within reasonable time warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it END OF DISCUSSION ON TOPIC A. by exercising due diligence. Technical Estoppel a. or the suit in not held to be barred. EXTRA-CONTRACTUAL OBLIGATIONS 1.7. Delay in asserting the complainant’s rights. for an unreasonable and unexplained length of time to do that which.a condition or state by virtue of which an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon.

Determinate or specific – object is particularly designated or physically segregated from all other things of the same class b.1. Complete failure to perform B.1. where the subject matter is an act to be done or not to be done a.2. 1177) D. Subsidiary remedies of creditors (Art.1. Damages. A determinate or specific thing B. 1163. 1608. 1164. Negligence D. Fraud C. 7) 1. Rescission (resolution in reciprocal obligations) C. or contravention of the tenor thereof. De Leon.2. Negative – obligation not to do Real Obligations: obligations to give. 2003 ed. Accion directa (Arts. negligence. Breaches of obligations A. Limited Generic – generic objects confined to a particular class a. Mora accipiendi B. 1246 AND 1170) To deliver the thing of the quality intended by the parties. Compesatio morae C.1. Contravention of the tenor of obligation F. Accion subrogatoria D. Obligation to give CIVIL LAW REVIEWER Page 91 of 401 . 1166. To be liable for damages in case of fraud. DUTIES OF OBLIGOR IN AN OBLIGATION TO GIVE A GENERIC THING (Arts.) To preserve or take care of the thing due with the diligence of a good father of a family EXCEPTION: if the law requires or the parties stipulate another standard of care B. OBLIGATION TO GIVE A. 1729. 91. Default or Delay (Art. NATURE AND EFFECT OF OBLIGATIONS 1. or delay. Specific Performance A. Ordinary Diligence D. Waiver of future fraud is void (Art.1. Obligation to give A. 1893) ======================================== ========================================= Personal Obligations: obligations to do or not to do. TOPICS UNDER THE SYLLABUS B. in the performance of his obligation. p. Substituted performance by a third person on obligation to deliver generic thing and in obligation to do.3.. Mora solvendi B. p. Ex: An obligation to deliver one of my horses (Tolentino.3. taking into consideration the purpose of the obligation. An indeterminate or generic thing 2. intent of the parties. where the subject matter is a thing which the obligor must deliver to the obligee a. Accion pauliana D. and other circumstances. Volume IV. unless a purely personal act B.2 Exceptions E. DUTIES OF OBLIGOR IN AN OBLIGATION TO GIVE A DETERMINATE THING (Arts. 1652. 1169) B. Positive – obligation to do b. 1171) D.1. Generic –object is designated by its class or genus c. Fortuitous Event 4. Obligation to do or not to do 3. Remedies of Obligations A. in any event D.

or included with the principal thing for its better use. Accessories – things joined to. it arises from the time of the perfection of the contract (i. negligence or contravention of the tenor of the obligation. To deliver the thing itself (Specific Performance) 4. 37-38) 3. he shall be responsible for any fortuitous event until he has effected delivery. fraud. 2. RIGHTS OF THE CREDITOR TO THE FRUITS 1. If the source of the obligation is law. Accessions – additions to or improvements upon a thing. Before Delivery – personal right 2. arises upon fulfillment of the condition or arrival of the period c. b. the obligation is subject to a suspensive condition or period. the obligation arises from the perfection of the contract even if the obligation is subject to a suspensive condition or a suspensive period where the price has been paid ========================================= 2. If the source is contract.. delict. embellishment or completion. meeting of the minds between the parties). GENERIC REAL OBLIGATION (Obligation to deliver a generic thing): a. 1166) a. Ex: air conditioner in a car. quasicontract. 2. b. To ask for performance of the obligation b. the very thing itself must be delivered and consequently. 2003 ed.To demand specific performance or fulfillment (if it is still possible) of the obligation with a right to indemnity for damages TOPICS UNDER THE SYLLABUS CIVIL LAW REVIEWER Page 92 of 401 . pp. To ask that obligation be complied with at the expense of the obligor c. After Delivery – real right b. To deliver the fruits of the thing: Right to the fruits of the thing from the time the obligation to deliver it arises. 1. 1165) 1. it arises from the time designated by the law creating or regulating them. WHEN OBLIGATION TO DELIVER THE THING AND FRUIT ARISES RIGHTS OF THE CREDITOR IN REAL OBLIGATION TO GIVE (Art. or has promised to deliver the same thing to two or more persons who do not have the same interest. NOTE: In an obligation to deliver a determinate thing. To demand rescission of the obligation with right to recover damages c. DETERMINATE OR SPECIFIC REAL OBLIGATION (Obligation to deliver a determinate thing): a. To pay damages in case of breach of the obligation by reason of delay. only the debtor can comply with the obligation.the parties made a stipulation to the contrary.1. quasi-delict. unless a contract to sell. Ex: key of a house. frame of a picture (De Leon. If the obligor delays. To recover damages in case of breach of obligation NOTE: A generic real obligation can be performed by a third person since the object is expressed only according to its family or genus. To deliver its accessions and accessories (Art.To demand payment of damages when it is the only feasible remedy d.

REAL Jus in re. at the expense of the debtor. Performance at debtor’s cause: The obligee is entitled to have the thing done in a proper manner. To recover damages because of breach of the obligation 4.B. Obligation to do or not to do ========================================= 2. 1169) Right pertaining to a person over a specific thing. To have it undone at the expense of the obligor. POSITIVE PERSONAL OBLIGATIONS: 1. Contravention obligation NOTE: debtor is liable for damages B. to do or not to do. BREACHES OF OBLIGATIONS (Arts. Delay (Mora) 2. by himself or by a third person. Breaches of obligations ======================================== 3. 1170 – 1174) A. a right enforceable only against a definite person or group of persons Right pertaining to a person to demand from another. NATURE AND EFFECT OF OBLIGATIONS 3. and 2. NEGATIVE PERSONAL OBLIGATION 1. DEFAULT OR DELAY GENERAL RULE: Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. a right enforceable against the whole world A. without a definite passive subject against whom the right may be personally enforced EXCEPTION: Demand by the creditor shall not be necessary in order that delay may exist: (1) When the obligation or the law expressly so declares. Fraud (Dolo) Negligence (Culpa) of the tenor of the A. (Art. the fulfillment of the prestation to give. as a definite passive subject. NATURE AND EFFECT OF OBLIGATIONS 2. (2) When from the nature and the circumstances of the obligation it appears that the designation CIVIL LAW REVIEWER Page 93 of 401 . To ask for damages B.1. Voluntary – debtor in the performance of the obligation is guilty of: 1. 3. OBLIGATION TO DO OR NOT TO DO RIGHTS OF A CREDITOR IN PERSONAL OBLIGATION (TO DO OR NOT TO DO) ======================================== TOPICS UNDER THE SYLLABUS B. Involuntary – debtor is unable to comply with his obligation due to fortuitous event/s NOTE: debtor is not liable for damages DISTINGUISH PERSONAL RIGHT FROM REAL RIGHT PERSONAL Jus ad rem. To demand what has been poorly done be undone 3. 2.

NOTE: In reciprocal obligations. a party does not incur in delay for failure of the other party to assume and perform the obligation imposed upon him/her. (8 Manresa 72) It is the fraud in the performance or fulfillment of an obligation already existing. NOTE: Art. It imports a dishonest purpose or some moral obliquity and conscious doing of wrong.R. the interest replaces the damages. Compensatio Morae – default of both parties in reciprocal obligations GENERAL RULE: An action or suit can be filed at anytime after the non-compliance of the other party. FRAUD (Dolo) It is the deliberate or intentional evasion of the normal fulfillment of an obligation. but by some interested or sinister motive. Mora accipiendi – delay or default committed by creditor 3.2. as distinguished from the fraud referred to in Article 1338 which is the cause of nullity of contracts and which exists before and at the moment of creating the obligation. 108245. 1169 is applicable only when the obligation is to do something other than the payment of money. Mora solvendi – delay or default committed by debtor 2. delay by the other begins. as when the obligor has rendered it beyond his power to perform. Samson vs Court of Appeals [G. damages or interest shall only start to run after judicial or extra-judicial demand. not prompted by an honest mistake as to one’s rights or duties. No. Causal Fraud (Dolo Causante): fraud employed in the execution of the contract DEMAND IS NOT NECESSARY WHEN: CIVIL LAW REVIEWER Page 94 of 401 . the extra-judicial demand should first be made prior to the filing of a civil suit. TYPES OF FRAUD: 1. In case of obligation for payment of sum of money. Bad faith is thus synonymous with fraud and involves a design to mislead or deceive another. From the moment one of the parties fulfills his obligation. Law or obligation expressly declares so 2. EXCEPTION: In ejectment and consignment cases. A. or (3) When the demand would be useless. 1. Bad faith is essentially a state of mind affirmatively operating with furtive design or with some motive of ill-will. November 25. It does not simply connote bad judgment or negligence. 1994]. However. Time is of the essence 3. Demand would be useless In reciprocal obligations. neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him.of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract. KINDS OF DELAY: 1.

Incidental Fraud (Dolo Incidente): fraud in performance of obligation already existing because of a contract circumstances of the persons. CA. 1170) Present during the performance of a pre-existing obligation Purpose is to evade the normal fulfillment of the obligation Results in the breach of an obligation Gives rise to a right in favor of the creditor to recover damages CAUSAL FRAUD/ DOLO CAUSANTE (ART. Damages. NEGLIGENCE (Culpa) • Any voluntary act or omission. of the time and of the place (Art. there being no malice which prevents the normal fulfillment of an obligation Consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the • CIVIL LAW REVIEWER Page 95 of 401 . voidable contract Gives rise to a right of an innocent party to annul the contract a. Resolve contract (Art 1191) c. Quasi-Delict (Culpa aquiliana/culpa extra contractual) – source of obligation. 363 SCRA 51) C. and because of the nature of its functions. wrong or negligence committed independent of contract and without criminal intent b. Contractual Negligence (Culpa Contractual) – wrong or negligence in the performance of a obligation/contract c. ie: commercial transactions (Reyes v. the bank is under obligation to treat the accounts of its depositors with meticulous care. (Simex v. REMEDIES OF DEFRAUDED PARTY a. Common Carriers – from the nature of their business and for reasons of public policy.2. the law does not prohibit renunciation of the action for damages on the ground of past fraud. Criminal Negligence (Culpa Criminal) – wrong or negligence in the commission of a crime INSTANCES WHERE THE LAW REQUIRES A HIGHER STANDARD OF CARE: C. 1733) Diligence of a good father of a family: ordinary care or that diligence which an average or reasonably prudent person would exercise over his own property. always having in mind the fiduciary nature of their relationship.2. CA. Specific performance (Art 1233) b.) NOTE: Future fraud cannot be waived. in either case A. 1338) KINDS OF NEGLIGENCE Present during the perfection of a contract Purpose is to secure the consent of another to enter into the contract Results in vitiation of consent.3. 183 SCRA 360) EXCEPTION: Extraordinary diligence does not cover transactions outside bank deposits. according to all the circumstances of each case (Art. common carriers are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them.1. However. Banks – as a business affected with public interest. 1173) FRAUD IN THE PERFORMANCE/ DOLO INCIDENTE (ART.

AMOUNT OF EVIDENCE NOTE: Rule on Standard of Care • • • That which the law requires. or That stipulated by the parties. CIVIL LAW REVIEWER Page 96 of 401 . DISTINGUISHED DISTINGUISH FRAUD FROM NEGLIGENCE CULPA AQUILIANA Negligence substantive independent is and CULPA CONTRACTUAL Negligence merely an incident of performance of an obligation There is a pre-existing contractual relation Source of the obligation is the breach of the contractual obligation Proof of existing of the contract and its breach is prima facie sufficient to warrant recovery Diligence selection supervision employees available as a in the and of the is not defense FRAUD NEGLIGENCE There is deliberate intention to cause damage. which led to the damage or injury complained of. Liability cannot be mitigated. Liability may be mitigated. Presumed from the breach of a contractual obligation Waiver for future fraud is void. Must be clearly proved Waiver for future negligence may be allowed in certain cases There may or may not be a pre-existing contractual obligation Source of obligation is negligence itself the the Negligence must be proved DISTINGUISH NEGLIGENCE FROM CRIME NEGLIGENCE WHAT IT PUNISHABLE CONDITION OF THE MIND LIABILITY FOR DAMAGES NATURE OF THE RIGHT VIOLATED Any act with fault or negligence Criminal intent unnecessary Damages may be awarded to injured party Violation of private rights CRIME Acts punishable by law Necessary Some crimes do not give rise to civil liability Public rights Diligence in the selection and supervision of the employees is a defense EFFECTS OF CONTRIBUTORY NEGLIGENCE OF THE OBLIGEE GENERAL RULE: Reduces or mitigates the damages which he can recover EXCEPTION: If the negligent act or omission of the creditor is the proximate cause of the event. he cannot recover. There is no deliberate intention to cause damage. or In the absence of the two. diligence of a good father of a family COMPROMIS E PRESUMPTIO N Preponderance of evidence Can be compromised as any other civil liability Presumption of negligence Proof beyond reasonable doubt Criminal liability can never be compromised Presumption of innocence KINDS OF NEGLIGENCE.

or which though foreseen. negligence. GENERAL RULE: The law protects the creditors. The cause of breach is independent of the debtor’s will. In other words. it is not enough that the event should not be foreseen or anticipated. any TO impossible illegal NOT to Do an Illegal Thing NOT to do an impossible thing Condition is preexisting and NOT dependent on the fulfillment of impossible condition for existence Condition IMPOSSIBLE BUT Obligation DIVISIBLE VALID VALID VALID VALID DISREGARD CONDITION VOID NOTE: In the case of Republic v. delay or violation or contravention in any manner of the tenor of the obligation. or aggravation of the injury. SPECIFIC PERFORMANCE EXCEPTION: There concurs a corresponding fraud. Luzon Stevedoring [G. L-21749. 1967]. The events render performance impossible 4. The creditors are given by law all possible remedies to enforce such obligations. ======================================== TOPICS UNDER THE SYLLABUS B.R. NATURE AND EFFECT OF OBLIGATIONS 4. FORTUITOUS EVENT (Force Majeure) GENERAL RULE: No one should be held to account for fortuitous cases. September 29. The debtor must be free from participation. To demand specific performance or fulfillment of the obligation with a right to indemnity for damages B. CONTRAVENTION OF THE TENOR OF THE OBLIGATION B. the Court held that the person obliged to perform an obligation shall not be excused from a fortuitous event when the nature of the obligation requires the assumption of risk.EFFECTS OF CONDITIONS CONDITION IMPOSSIBLE AND ILLEGAL 1. Remedies of obligations ======================================== A. 2.4. were inevitable. The event unavoidable must be unforeseeable or EFFECT ON OBLIGATIO N DO OR VOID EFFECT ON CONDITION VOID 3. ONLY THE AFFECTED OBLIGATION IS VOID. No. but it must be one that is impossible to foresee or to avoid. A. which are those situations that could not be foreseen. RESCISSION • ELEMENTS OF A FORTUITOUS EVENT: It means to abrogate the contract from the beginning and to restore the parties to their CIVIL LAW REVIEWER Page 97 of 401 .

Effect when a resolutory condition in obligation to do or not to do happens and there is improvement. 1198) NOTE: In the case of Adorable v.”2 It is predicated on the breach of faith by any party that violates the reciprocity between them. Extent of retroactivity E. CIVIL LAW REVIEWER Page 98 of 401 . DAMAGES To demand payment of damages when it is a feasible remedy D. Potestative. 2003). loss or deterioration of specific thing before the happening of a suspensive condition in obligation to do or not to do (Art. 3 MELENCIO S. Pure Obligations (Arts. Suspensive Condition B.2001]. Effect if given to debtor alone C. 1190.relative positions as if no contract has been made. JULY 11. and then obtain therefrom the satisfaction of his own credit 2. 1187) D. MARIA. par. 1189) F.1193) A. Obligations subject to potestative suspensive conditions are void (Art. COURT OF APPEALS. Instances when debtor losses benefit of period (Art. 3.1. 1196) B. November 25. loss or deterioration of the specific thing (Art. 1181) A.1. 108346. casual or mixed C. the creditor has no right to rescind a sale made by the debtor to someone on the mere ground that such sale will prejudice the creditors’ rights in collecting later on from the debtor.1. END OF DISCUSSION ON TOPIC B. NO. SUSIDIARY REMEDIES OF CREDITORS 1.. NATURE AND EFFECT OF OBLIGATIONS ================================ • C. JR.3 C. Obligation with a period or a term (Art. the Court held that unless a debtor acted in fraud of his creditor.R. Court of Appeals [G. KINDS OF CIVIL OBLIGATIONS ================================ TOPICS UNDER THE SYLLABUS C.R. 3) 3. 1999].(Arts. 1179-1180) 2. The creditor’s right against the debtor is only a personal right to receive payment for the loan. [G. No. Effect of the happening of suspensive condition or resolutory condition (Art. Accion Directa . 1729. OBLIGATIONS AND CONTRACTS: TEXT AND CASES 101 (2ND ED. Effect if suspensive period is for the benefit of both debtor and creditor C. 1608. 119466. 1652. Accion Pauliana – action to revoke or rescind acts which the debtor may have done to defraud his creditor. Conditional Obligations (Art. 1182) D. Presumption that period is for the benefit of both debtor and creditor (Art. STA. it is not a real right over the lot subject of the deed of sale transferring the debtor’s property. Resolutory Condition C. KINDS OF CIVIL OBLIGATIONS 1. • It is “to declare the contract void at its inception and to put an end to it as though it never was. Accion Subrogatoria – action which the creditor may exercise in the place of his negligent debtor in order to preserve or recover for the patrimony of the debtor the product of such action. Effect of improvement. 1893) 2 SPOUSES VELARDE V.

1. Definite or indefinite period E.D. Instances when courts may fix the period (Art. It is an obligation whose performance does not depend upon a future and uncertain event. 1179) B. C. (Art. 1199) A. KINDS OF CIVIL OBLIGATION 2. A. Difference between alternative and facultative obligations B. Resolutory period E. the obligation of one is a resolutory condition of the obligation of the other. the nonfulfillment of which entitles the other party to rescind the contract. POTESTATIVE CONDITION The fulfillment of the condition entirely depends upon the sole will of the debtor. Contract to Sell) It is also known as “condition precedent” It gives birth to obligations • ========================================= • TOPICS UNDER THE SYLLABUS C.2. 1197) E. The performance in conditional obligations depends upon a future or uncertain event or upon a past event unknown to parties. KINDS OF CIVIL OBLIGATION 1. PURE OBLIGATIONS It is an unqualified obligation which is demandable immediately. the right to demand performance immediately exists and therefore the obligation concomitant to the right can be demanded at once. SUSPENSIVE CONDITION • • Not demandable at once It gives rise to the performance of an obligation (ex. Pure Obligations ========================================= NOTE: In case of a contract with a reciprocal obligation.1. through fault of debtor/creditor or through fortuitous events ========================================= 2. CIVIL LAW REVIEWER Page 99 of 401 . Alternative or facultative (Art. or past event unknown to the parties. RESOLUTORY CONDITION • • Demandable at once Once the condition is established or acknowledged. Creditor must ask court to set the period before he can demand payment 4. It is also known as “condition subsequent” It extinguishes obligations • • TOPICS UNDER THE SYLLABUS C. Conditional Obligations ========================================= GENERAL RULE: All potestative conditions are void. Effect of loss of specific things or impossibility of performance of alternative. CONDITIONAL OBLIGATIONS It is exactly the reverse of a pure obligation.

3) • In obligations to do and not to do. KINDS OF CIVIL OBLIGATION CIVIL LAW REVIEWER 401 Page 100 of . 1186) ========================================= TOPICS UNDER THE SYLLABUS C. par. goes out of commerce. Before the happening of a suspensive condition in an obligation to do or not to do (Art. 1189) • If the thing is lost without the fault of debtor. the debtor or obligor shall appropriate the fruits and interests received. the effect of a conditional obligation “to give” retroacts to the day of the constitution of the obligation (Art 1187) • E.2. When a resolutory condition in an obligation to do or not to do happens (Art. (Art. If the thing is lost with the fault of debtor. he shall have no other right than that granted to the usufructuary. the creditor may choose between rescission of the obligation and its fulfillment. If the potestative condition is imposed not on the birth (suspensive) of the obligation but on its fulfillment (resolutory).1. EFFECT OF SUSPENSIVE RESOLUTORY CONDITIONS Art. retroactivity is irrelevant. If the obligation is unilateral. the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. If the thing improves at the expense of debtor. • • • • • D. the court shall determine the effect of the extinguishment of the obligation E. Extent of Retroactivity • In resolutory conditions. • In suspensive conditions. 1190. DETERIORATION LOSS. the impairment is to be borne by creditor If the thing deteriorates with the fault of debtor. 1189) D. leaving unaffected the obligation itself. If the thing deteriorates without the fault of debtor. IMPROVEMENT. When the obligation imposes reciprocal prestations. the obligation shall be extinguished.1.The condition shall be deemed fulfilled when the obligor (debtor) voluntarily prevents its fulfillment (Art. with indemnity for damages in either case If the thing improves by its nature or by time. unless from the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the same is different. or it disappears in such a way that its existence is unknown or it cannot be recovered. the benefit shall inure to the benefit of the creditor. only the condition is avoided.EXCEPTION: Potestative resolutory conditions are not void. NOTE: “LOSS” happens when the thing perishes. 1187: • AND E. AND Constructive fulfillment . he shall be obliged to pay damages.

Remedy: Agreement among parties TERM VS. OBLIGATIONS TERM WITH A PERIOD OR • WITH A PERIOD – An obligation whose demandability or extinguishment depends on a future and certain event.when it is fixed or it is known when it will come b. Court shall fix period of payment when parties unable to agree CIVIL LAW REVIEWER 401 Page 101 of . either suspends its demandability or produces its extinguishment REQUISITES: 1. CONDITION. although it may not be known when b. the obligation shall be deemed to be one with a period. Future 2. DISTINGUISHED TERM Interval of time which is future and certain CONDITION Fact or event which is future or uncertain or a past event unknown to • 1.when it is agreed to by the parties c. which.when it is not fixed or it is not known when it will come – on obligation the day 3. Legally and physically possible WHEN STIPULATION SAYS “PAYABLE WHEN ABLE” • When the obligor binds himself to pay when his means permit him to do so. 1196)] • PERIOD – Interval of time. Suspensive (ex die) becomes demandable stipulated 2. According to effect: a. Certain 3. Resolutory (in diem) – demandable at once but terminates upon arrival of the day certain • Day certain – that which must necessarily come. Conventional or Voluntary . According to definiteness: a. exerting an influence on an obligation as a consequence of a juridical act. According to source a.when it is fixed by the court 3.when it is provided by laws b.Definite . subject to the expiration of a term of period (Arts 1193. Legal . Obligations with a Period or Term ========================================= KINDS OF OBLIGATIONS WITH A PERIOD: 1. 2. Indefinite . Judicial .3.

Insolvency provided of debtor. when there is a just cause for fixing a period aa If the debtor binds himself when his means permit him to do so aa ========================================= TOPICS UNDER THE SYLLABUS PERIOD. the obligation is void Debtor may oppose any premature demand of the creditor but he may renounce the benefit of the period by performing his obligation in advance (Manresa) WHEN DEBTOR LOSES RIGHT TO PERIOD (Art 1198) 1. Alternative or Facultative Obligation ========================================= CIVIL LAW REVIEWER 401 Page 102 of . it is presumed to have been established for the benefit of both parties. unless security WHEN COURTS MAY FIX PERIOD: 2. Impaired security through his own acts or through fortuitous event unless he gives new securities equally satisfactory 4. PERIOD FOR CREDITOR • THE BENEFIT OF THE Creditor may demand the fulfillment of the obligation at any time but the debtor cannot compel him to accept before the expiration of the period Has retroactive effect PERIOD FOR THE BENEFIT OF THE DEBTOR • When it is left exclusively to the will of the debtor. EXCEPTION: When it appears from the tenor of the obligation or other circumstances that the C. but from its nature and circumstances it can be inferred that a period was intended by the parties aa 3. Did not deliver security promised If the obligation does not fix a period. KINDS OF CIVIL OBLIGATION 4. Violates undertaking extension of period 5. FOR WHOSE BENEFIT GENERAL RULE: When a period is designated for the performance or fulfillment of an obligation. the existence of the obligation is affected Future and uncertain fact or event which may or may not happen Exerts an influence upon the very existence of the obligation itself period has been established in favor of one or the other. Attempts to abscond in consideration of If the duration of the period depends upon the will of the debtor aa In case of reciprocal obligations.the parties Time w/c must necessarily come although it may not be known when Exerts an influence upon the time of demandability or extinguishment of an obligation Does not have any retroactive effect unless there is an agreement to the contrary When it is left exclusively to the will of the debtor.

1199 – 1206) WHEN CONVERTED OBLIGATION: 1. Those which could not have been the object of the obligation 2. the debtor shall perform the obligation by delivering that which the creditor should choose from among the remainder or that which remains if only 1 subsists If the loss of 1 of the things occurs through the fault of the debtor.4. EFFECT OF LOSS OR DETERIORA0TION THRU NEGLIGENCE. except one. Expressly granted to creditor 2. debtor cannot be held liable for damages If 1 or more but not all of the things are lost or one or some but not all of the prestations cannot be performed due to fortuitous event or fault of the debtor. the • CIVIL LAW REVIEWER 401 Page 103 of .no liability Of the substitute after substitution is made – with liability EFFECT OF LOSS OF OBJECTS OF ALTERNATIVE OBLIGATIONS 1. If the right of choice belongs to the debtor • If through a fortuitous event all were lost. which are: a. creditor cannot hold the debtor liable for damages because the debtor can still comply with his obligation If all things. the debtor must comply by performing that which remain If all were lost by fault of the debtor the later is liable for the value of the last thing or service which became impossible • ALTERNATIVE – bound by different prestations but only one is due RIGHT OF CHOICE OBLIGATIONS IN ALTERNATIVE • GENERAL RULE: the right of choice belongs to debtor EXCEPTION: 1. were lost. If right of choice belongs to the creditor • If 1 of the things is lost through a fortuitous event. ALTERNATIVE OR FACULTATIVE OBLIGATION (ARTS.only one prestation has been agreed upon but another may be given in substitution When the person who has a right of choice has communicated his choice Only one is practicable 2. Expressly granted to third person • LIMITATIONS ON THE RIGHT OF CHOICE OF THE DEBTOR The debtor shall not have the right to choose the prestations. Unlawful c. DELAY OR FRAUD OF OBLIGOR: • • Of thing intended as substitute . Impossible b. TO SIMPLE FACULTATIVE .

JOINT AND SOLIDARY OBLIGATION ================================ TOPICS UNDER THE SYLLABUS D.4. 1209) A. Obligation presumed to be divided into as many equal shares as there are creditors or debtors A. expressly or impliedly END OF DISCUSSION ON TOPIC C. Joint (Divisible) Obligation A. Made with full knowledge that a selection is indeed being made 3. others not liable for his share (Art.3. If it is impossible to give all except one. Made in due time – before or upon maturity 5. if it is impossible to give the substitute.creditor may claim any of those subsisting or the price of that which. has disappeared with a right to damages • If all the things are lost through the fault of the debtor. unless otherwise indicated by the law or nature of obligation (Art. nullity of P carries with it nullity of S CIVIL LAW REVIEWER 401 Page 104 of . Insolvency of a joint debtor. Made voluntarily and freely 4. Each credit is distinct from one another. Made to all proper persons 6. Made w/o conditions unless agreed by the creditor 7. May be waived. therefore a joint debtor cannot be required to pay for the share of another with debtor. Made properly so that creditor or his agent will actually know 2. the last one must still be given If it is impossible to give the principal.2. although he may pay if he wants to (Art. the choice by the creditor shall fall upon the price of any 1 of them. the substitute does not have to be given.1. also with indemnity for damages. JOINT AND SOLIDARY OBLIGATION 1. the principal must still be given The right of choice is given only to the debtor Right to choose may be given either to debtor or creditor REQUISITES FOR MAKING THE CHOICE: 1. through the fault of the former. Joint obligation is presumed. KINDS OF CIVIL OBLIGATION ================================ D. Concurrence of two or more creditors and/or two or more debtors A. 1209) 2. 1207) A. Joint (Indivisible) Obligation DISTINGUISH ALTERNATIVE FROM FACULTATIVE ALTERNATIVE Various things are due but the giving principally of one is sufficient If one of prestations is illegal. others may be valid but obligation remains FACULTATIVE Only one thing is due but a substitute may be given to render payment/fulfillment easy If principal obligations is void and there is no necessity of giving the substitute.

1214-1215) B. A joint creditor cannot act in representation of the other creditors while a joint debtor cannot be compelled to answer for the acts or liability of the other debtors 1. When the nature of the obligation requires solidarity 4. Obligation cannot be performed in parts but debtors are bound jointly B. When the law requires solidarity 3. Insolvency of one debtor does not affect other debtors TOPICS UNDER THE SYLLABUS D. When a charge or condition is imposed upon heirs or legatees and the testament expressly makes the charge or condition in solidum (Manresa) 5. Joint (Divisible) Obligation ========================================= JOINT DIVISIBLE OBLIGATIONS 1.1. while each debtor can be held liable only for the payment of his proportionate share of the debt 2. Divisible and Indivisible (Art. Each one of solidary creditors may do whatever may be useful to the others. Solidary Obligation A. confusion or remission of debt executed by a solidary creditor 4. Interruption in payment by one does not benefit or prejudice the other 3. Demand on one produces delay only with respect to the debt 2.A. Each creditor can demand for the payment of his proportionate share of the credit. EXCEPTIONS TO THE PRESUMPTION 1. 1212) C. When expressly solidarity stated that there is 2. Mutual agency among solidary debtors (Arts. In case of failure of one joint debtor to perform his part (share). Vices of one debtor to creditor has no effect on the others 4. JOINT AND SOLIDARY OBLIGATIONS 1. Effect of any novation. but not anything prejudicial to them (Art. 1222) C. 1225) 5. 1228-1230) ========================================= GENERAL RULE: The presumption of the law is that an obligation is always joint. there is default but only the guilty shall be liable for damages 3. Obligations with a Penal Clause (Arts. 1216. Gutierrez) EFFECTS OF JOINT LIABILITY 1. compensation. Mutual guaranty among solidary debtors (Arts. 1217. 1226. JOINT (DIVISIBLE) OBLIGATION JOINT OBLIGATION (Obligacion Mancumunada) – The whole obligation is to be paid or fulfilled proportionately by different debtors or demanded proportionately by the different obligees CIVIL LAW REVIEWER 401 Page 105 of . When a solidary responsibility is imputed by a final judgment upon several defendants (Gutierrez v.

the fulfillment of or compliance with the obligation requires the concurrence of all the debtors. although each for his own share. JOINT AND SOLIDARY OBLIGATIONS 2. the creditors and debtors in a joint obligation shall be entitled or shall make payment in equal proportion. the solidarity among the debtors remains Plurality of subjects is not required In case of breach. Consequently. is also necessary for the enforcement of the obligation PASSIVE SOLIDARITY SURETYSHIP Stands for some other person May be reimbursed after payment liable for his and co. Released not released ========================================= TOPICS UNDER THE SYLLABUS D. If there are 2 or more creditors. Innocent joint debtor shall not contribute to the indemnity beyond their corresponding share of the obligation. SOLIDARY OBLIGATION INDIVISIBILITY DISTINGUISHED INDIVISIBILITY Refers to the prestation which constitutes the and SOLIDARITY. the obligation can no longer be fulfilled or performed. If there are 2 or more debtors. it is converted into one of indemnity for damages. 3. JOINT AND SOLIDARY OBLIGATIONS 3.NOTE: Unless there is no specification as to their proportionate share in the credit or in the debt.only the debtor's share principal's share Primary Secondary Extension of time. JOINT (INDIVISIBLE) OBLIGATION 1. SOLIDARY OBLIGATION (Obligacion Solidaria) – must be expressed in stipulation or provided by law or by nature of obligation SOLIDARITY Refers to the legal tie and consequently to the subjects or parties 1. the concurrence or collective act of all the creditors. ========================================= object of obligation the of the obligation Plurality of subjects is indispensable When there is liability on the part of the debtors because of the breach. 2. Joint (Indivisible) Obligation ========================================= 2. Solidary Obligation ========================================= EFFECT OF BREACH If one of the joint debtors fails to comply with his undertaking. although each for his own share. The obligation can be enforced only by proceeding against all of the debtors. obligation is converted into 1 of indemnity for damages because of breach. Active – on the part of creditor or oblige EFFECTS: CIVIL LAW REVIEWER 401 Page 106 of . indivisibility of the obligation is terminated TOPICS UNDER THE SYLLABUS D.

Merger or Confusion). 2. Obligations arising from quasi-contracts c. Payment made before debt is due. If without fault – no liability If with fault – there is liability (also for damage and interest) Loss due to fortuitous event after default – there is liability (because of default) a. no interest can be charged. Fault of any debtor – everyone is responsible – price. and NOTE: The law clearly provides that the creditor who may have executed any acts mentioned in Art. Liability of principals. If different terms and conditions – collect only what is due. accessories of a felony accomplices. damage and interest h. Conventional – agreed upon by the parties EFFECT OF LOSS OR IMPOSSIBILITY OF THE PRESTATION: 5. Compensation. Mixed – on the part of the obligors and obligees. No reimbursement if payment is made after prescription or became illegal e. Legal – imposed by law • Instances where solidary obligation: law imposes 1.• Death of 1 solidary creditor transmits share to heirs (but collectively) • Each creditor represents the other in the act of recovery of payment Credit is divided equally between creditors as among themselves Debtor may pay any of the solidary creditors ailees in commodatum e. Effect of insolvency or death of co-debtor – still liable for whole amount • • 3. Complete/ personal defense – total or partial ( up to amount of share only ) if not personal to him 4. Obligations arising from tort b. as well as he or she who collects the CIVIL LAW REVIEWER 401 Page 107 of . or the part of the debtors and the creditors g. Remission made after payment is made – co-debtor still entitled to reimbursement f. d. Legal provisions regarding devisees and legatees obligation of 3. B • EFFECTS: • • a. Passive – on the part of debtors or obligors EFFECTS: • Each debtor may be requested to pay whole obligation with right to recover from codebtors Interruption of prescription to one creditor affects all Interest from delay on 1 debtor is borne by all c. Insolvency of one – others are liable for share pro-rata 2. otherwise – interest can be charged b. later on collect from any d. 1215 (Novation.

debts, shall be liable to the others for the share in the obligation corresponding to them.

• In tention of parties should be taken into account to determine whether obligation is divisible or not =========================================






DIVISIBLE - obligation that is capable of partial performance • • • Execution of certain no of days work Expressed by metrical units Nature of obligation – susceptible of partial fulfillment

WITH A PENAL CLAUSE – One to which an accessory undertaking is attached for the purpose of insuring its performance by virtue of which the obligor is bound to pay a stipulated indemnity or perform a stipulated prestation in case of breach. PENAL CLAUSE DISTINGUISHED FROM CONDITION PENAL CLAUSE CONDITION Constitutes an Not an obligation obligation Demandable in default Never demandable Obligation exists No obligation until condition happens Depends on the nonPrincipal itself is performance of the dependent on an principal obligation uncertain event

INDIVISIBLE performance • • • •

- one not capable of partial

To give definite things Not susceptible of partial performance Provided by law Intention of parties

NOTES: • Divisibility or indivisibility of the obligation refers to the performance of the prestation and not to the thing which is the object thereof

PENAL CLAUSE DISTIGUISHED FROM ALTERNATIVE OBLIGATIONS PENAL CLAUSE ALTERNATIVE OBLIGATIONS Only 1 prestation Several prestations Impossibility of Impossibility of 1 principal extinguishes prestation does not penalty extinguish the obligation Debtor may not Debtor may choose choose between among the principal and penalty prestations


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PENAL CLAUSE DISTINGUISHED FROM FACULTATIVE OBLIGATION PENAL CLAUSE FACULTATIVE OBLIGATION Penalty of payment Power to choose in lieu of the prestation is absolute principal must be expressly granted Creditor may Creditor may not demand both if demand both principal expressly granted and penalty

case of breach of the principal obligation (punitive).

CHARACTERISTICS OF PENAL CLAUSES: 1. Subsidiary - As a general rule, only penalty can be demanded, principal cannot be demanded, except: Penalty is joint or cumulative 2. Exclusive - takes place of damage, damage can only be demanded in the ff. cases: a. b. c. Stipulation – granting right Refusal to pay penalty With dolo ( not of creditor )

PENAL CLAUSE DISTINGUISHED FROM GUARANTEE PENAL CLAUSE GUARANTEE Insure performance of principal obligation Accessory and subsidiary obligations Obligation to pay the Object of the penalty is different principal and the from the principal guarantee is the obligation same Principal and penalty No can be assumed by the same person Penalty is extinguished Guarantee subsists by the nullity of the even if the principal principal obligation is voidable, unenforceable or a natural one, same applies if penal clause is assumed by a guarantee PURPOSE OF PENALTY: 1. Funcion coercitiva o de garantia – to insure the performance of the obligation 2. Funcion liquidatoria – to liquidate the amount of damages to be awarded to the injured party in case of breach of the principal obligation (compensatory), and 3. Funcion estrictamente penal – in certain exceptional cases, to punish the obligor in

PENALTY AS SUSTITUTE FOR DAMAGES GENERAL RULE: the penalty fixed by the parties is or substitute for damages in case of breach EXCEPTIONS: 1. When there is a stipulation to the contrary 2. When the debtor is sued for refusal to pay the agreed penalty; and 3. When debtor is guilty of fraud

DOUBLE FUNCTIONS OF PENALTY 1. to provide for liquidated damages

2. to strengthen the coercive force of the obligation by the threat of greater responsibility in the event of breach

KINDS OF PENALTIES: 1. Legal – constituted by law


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2. Conventional – constituted by agreement of the parties 3. Compensatory – established for the purpose of indemnifying the damages suffered by the obligee or creditor in case of breach of the obligation 4. Punitive – established for the purpose of punishing the obligor or debtor in case of breach of the obligation 5. Subsidiary or alternative- in case of non-performance only the penalty is demandable 6. Joint or cumulative – both the principal undertaking and the penalty may be demanded

E. Tender of payment and consignation (Arts. 1256-1261) 2. Loss of determinate thing due or impossibility or difficulty of performance (Arts. 1262, 12661267) 3. Condonation or remission of debt A. Express condonations and required formality thereof (Art. 1270) B. Implied (Arts. 1271, 1272, 1274) 4. Confusion or Merger of Rights (Arts. 1275, 1272) 5. Compensation A. Kinds (Arts. 1278, 1279) A.1. Legal compensation (Arts. 1286-1290) A.2. Agreement (Art. 1282) A.3. Voluntary (Art. 1282) A.4. Judicial (Art. 1283) A.5. Facultative B. Obligations not compensable (Arts. 1287-1288) 6. Novation (Arts. 1291-1288)

CAUSES FOR REDUCTION OF PENALTY: 1. 2. Partial/irregular performance Penalty provided is iniquitous/ unconscionable



TOPICS UNDER THE SYLLABUS E. EXTINGUISHMENT OF OBLIGATIONS 1. Payment (Arts. 1236-1238) A. Dation in payment (Art. 1245) B. Form of payment (Art. 1249) C. Extraordinary inflation or deflation (Art. 1250) D. Application of payment (Arts. 1252-1254)


Principal Modes: (PAL-CoCoCo-No)


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1. Payment or performance 2. Loss of the thing due 3. Condonation or remission of debt 4. Confusion or merger of rights 5. Compensation 6. Novation REQUISITES FOR PAYMENT/PERFORMANCE 1. With respect to prestation itself VALID


Delivery of money and performance, in any other manner of the obligation

a. Identity
Other Modes: 7. Annulment 8. Rescission 9. Fulfillment of resolutory condition 10. Prescription 2. With respect to parties - must be made by proper party to proper party a. Payor 1. Payor - the one performing, he can be the debtor himself or his heirs or assigns or his agent, or anyone interested in the fulfillment of the obligation; can be anyone as long as it is with the creditor's consent 2. 3RD person pays/performs - only the creditor's consent; if performance is done also with debtor's consent - he takes the place of the debtor. There is subrogation except if the 3rd person intended it to be a donation 3. 3rd person pays/performs with consent of creditor but not with debtor's consent, the repayment is only to the extent that the payment has been beneficial to debtor b. Payee i. Payee - creditor or obligee or successor in interest of transferee, or agent ii. 3rd person - if any of the ff. concur: a.It must obligee's have redounded to the

b. Integrity or completeness c.

Not Stated in the Civil Code: 11. Death of a Party in Personal Obligations 12. Mutual Desistance 13. Compromise 14. Impossibility of Fulfillment 15. Happening of Fortuitous Event 16. Arrival of Resolutory Period 17. Will of One of the Parties Due to Indeterminate Duration or Nature of the Prestation/ Unilateral Withdrawal in Partnerships 18. Change of Civil Status 19. Rebus Sic Stantibus (Art. 1267) 20. Want of Interest in Some Circumstances 21. Abandonment in Special Cases 22. Insolvency Judicially Declared and Debtor is Discharged

b. benefit and only to the extent of such benefit


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c.It falls under art 1241, par 1,2,3 - the benefit is total so, performance is total iii. Anyone in possession of the credit - but will apply only if debt has not been previously garnished

TO WHOM PAYMENY MUST BE MADE 1. The person in whose favor the obligation has been constituted 2. His successor-in-interest 3. Any person authorized by law or by the obligee at the time when payment is due to receive it (not during the time when the obligation is constituted)

PRINCIPLE OF INTEGRITY (Art. 1233) GENERAL RULE: A debt shall not be understood to have been paid unless a thing or service of which the obligation consists has been completely delivered or rendered, as the case maybe. EXCEPTIONS: 1. When the obligation has been substantially performed in good faith (Art. 1234); 2. When the obligee accepts performance despite its incompleteness or irregularity and without expressing any protest or correction. (Art. 1235)

PAYMENT TO AN INCAPACITATED PERSON, VALID IF: 1. Incapacitated delivered, or 2. Insofar as beneficial to him person kept the thing





PAYMENT TO 3RD PERSON GENERAL RULE: Payment is not valid, even though made in good faith EXCEPTIONS: 1. Payment which redounded to the benefit of the obligee • Instances when the presumption that the payment redounded to the benefit of the obligee:




1. Debtor himself or his legal representative 2. Any person who has obligation (i.e., guarantor) interest in the

3. A 3rd person who has no interest in the obligation, when there is a stipulation to the contrary

1. After payment, 3rd person acquires the creditor’s rights (subrogation) 2. Creditor ratifies payment to 3rd person

PAYMENT MADE BY 3Rd PERSON • If payment was made without the knowledge or against the will: the recovery is only up to the extent or the amount of the debt at the time of the payment; the defense may only be availed of by the obligor If payment was with knowledge: the rights of reimbursements and subrogation are rd acquired by the 3 person

3. By creditor’s conduct, debtor has been led to make the payment (estoppel) 2. Payment to the possessor of the credit, when made in good faith • REQUISITES:

a a Payment by debtor must be made in good



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Creditor must be in possession of the credit and not merely the evidence of indebtedness

EFFECT OF SUBSTANTIAL PERFORMANCE IN GOOD FAITH • Obligor may recover as though there has been strict and complete fulfillment, less damages suffered by the oblige Right to rescind cannot be used for slight breach

NOTE: With respect to time and place of payment - must be according to the obligation • WHERE PAYMENT SHOULD BE MADE 1. In the place designated in the obligation 2. If there is no express stipulation and the undertaking is to deliver a specific thing – at the place where the thing might be at the moment the obligation was constituted 3. In other case – in the place of the domicile of the debtor • • Time of payment - time stipulated Effect of payment – extinguish obligation Except: order to retain debt

SPECIAL RULES/FORMS OF PAYMENT 1. Application of Payments

2. Dation in Payment/ Dacion en Pago/ Adjudication/ Dacion in Solutum/ Adjudicacion en Pago/ Payment in Kind/ Dation en Paiement 3. 4. Payment by Cession/Cession en Pago Tender of Payment and Consignation

SUBSTANTIAL PERFORMANCE A debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered or rendered, as the case may be. If the obligation has been substantially performed in good faith, the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee. When the obligee accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with • Attempt in Good Faith to perform without willful or intentional departure Deviation is slight Omission/Defect is technical or unimportant Must not be so material that intention of parties is not attained

A. APPLICATION OF PAYMENTS – the designation of the debt which payment shall be made, out of 2 or more debts owing the same creditor: stipulation or application of party given benefit of period – OK; to be valid: must be debtor’s choice or w/ consent of debtor

REQUISITES FOR THE APPLICATION OF PAYMENT: a. There must be only one debtor and only one creditor b. Two or more debts of the same kind c. All debts must be due EXCEPTION: there may be application of payment even if all debts are not yet due if: i. Parties so stipulate

• • •


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When application of payment is made by the party for whose benefit the term has been constituted

If debts are of the same nature and burden, application shall be made to all proportionately

iii. Payment is not enough to extinguish all debts B. DACION EN PAGO: mode of extinguishing an obligation whereby the debtor alienates in favor of the creditor property for the satisfaction of monetary debt; extinguish up to amount of property unless w/ contrary stipulation; A special form of payment because 1 element of payment is missing: IDENTITY

d. Amount paid by the debtor is insufficient to cover the total amount of all debts.

HOW APPLICATION IS MADE: a. Debtor makes the designation

b. If not, creditor makes it by so stating in the receipt that he issues – unless there is cause for invalidating the contract c. If neither the debtor nor creditor has made the application or if the application is not valid, then application, is made by operation of law







a. There must be the performance of the prestation in lieu of payment (animo solvendi) which may consist in the delivery of a corporeal thing or a real right or a credit against the third person b. There must be some difference between the prestation due and that which is given in substitution (aliud pro alio) c. There must be an agreement between the creditor and debtor that the obligation is immediately extinguished by reason of the performance of a prestation different from that due

WHO MAKES APPLICATION OF DEBTS GENERAL RULE: Debtor EXCEPTION: Creditor a. Debtor without protest accepts receipt in which creditor specified expressly and unmistakably the obligation to which such payment was to be applied – debtor in this case renounced the right of choice b. When monthly statements were made by the bank specifying the application and the debtor signed said statements approving the status of her account as thus sent to her monthly by the bank c. In case no application is made: • Apply payment to the most onerous

CONDITIONS FOR A VALID DACION: a. If creditor consents, because a sale presupposes the consent of both parties b. If dacion will not prejudice the other creditors c. If debtor insolvent is not judicially declared

NOTE: DACION is governed by the law on sales


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More than one debt b.DACION EN PAGO DISTINGUISHED FROM PACTUM COMMISORIUM DACION EN PACTUM PAGO COMMISORIUM There is an Generally. extinguish up to amount of net proceeds ( unless w/ contrary stipulation) KINDS OF ASSIGNMENT: a. Legal – governed by the insolvency law b. c. they are merely assignees with authority to sell Debtor is released up to the amount of the net proceeds of the sale. More than one creditor DACION EN PAGO DISTINGUISHED FROM PLEDGE DACION EN PLEDGE PAGO Delivery and Delivery but no transfer of transfer of ownership ownership Presumed since less transmission of rights DACION EN PAGO DISTINGUISHED FROM SALE DACION EN PAGO SALE Preexisting credit None Obligation extinguished Obligation rises Less freedom in Greater freedom determining the price Total or partial Payment of price extinguishment generally totally extinguishes if done by mistake. Complete or partial insolvency of debtor d. or in default of agreement. Voluntary – agreement of creditors REQUISITES OF VOLUNTARY ASSIGNMENT: a. DATION IN PAYMENT DISTINGUISHED FROM CESSION IN PAYMENT DATION IN PAYMENT CESSION IN CIVIL LAW REVIEWER 401 Page 115 of . Creditors do not become the owner.. CESSION or ASSIGNMENT (IN FAVOR OF CREDITORS) – the process by which debtor transfer all the properties not subject to execution in favor of creditors is that the latter may sell them and thus. Acceptance or consent on the part of the creditors EFFECTS OF ASSIGNMENT: a. the the original mortgaged or pledged contract is entered property shall into by the parties automatically be to have the appropriated or owned property by the creditor collaterizes in the original agreement as payment of the debt Valid Void C. only one intervening single contract agreement where the parties subsequent and agree that in the event independent from debtor fails to pay. Abandonment of all debtor’s property not exempt from execution e. apply the proceeds to their credits.. in the order ordinarily established by law b. recovery of the recovery of the thing price paid DACION EN PAGO DISTINGUISHED FROM ASSIGNMENT DACION EN PAGO ASSIGNMENT Substitute forms of performance 1 creditor Several creditors Debtor not partially Debtor partially insolvent insolvent c. unless there is a stipulation to the contrary Creditors will collect credits in the order of preference agreed upon. .

generally requires prior tender of payment b. Debtor may ask judge cancellation of obligation to order b. after acceptance by creditor or after judge declares that consignation has been properly made – risk of loss is shifted to creditor) D. Actual deposit/Consignation with proper judicial authorities e. 2 or more creditor claiming the same right to collect REQUISITES OF VALID CONSIGNATION: a. obligation remains (debtor bears risk of loss at the meantime. Refuses to issue receipt w/o just cause d. Running of interest is suspended c. Subsequent notice) notice of Consignation (2nd Payment extinguishes obligation to the extent of the value of the thing delivered as agreed upon. Incapacitated to receive payment at the time it is due c.previous valid tender was unjustly refused or circumstances making previous tender exempt TENDER OF PAYMENT DISTINGUISHED FROM CONSIGNATION TENDER OF CONSIGNATION PAYMENT e. Before creditor accepts or before judge declares consignation has been properly made. he becomes in mora accepiendi and debtor is released from responsibility if he consigns the thing or sum due) CONSIGNATION allowed in: W/O PRIOR TENDER – a. Existence of valid debt b. TENDER AND CONSIGNATION TENDER -the act of offering the creditor what is due him together with a demand that the creditor accept the same (When creditor refuses w/o just cause to accept payment. Title of obligation has been lost CIVIL LAW REVIEWER 401 Page 116 of . Creditor absent or unknown/ does not appear at the place of payment CONSIGNATION – the act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment. assigned. Consignation was made because of some legal cause . unless there is a contrary intention c. Prior Notice of Consignation had been given to the person interested in performance of obligation (1st notice) d.PAYMENT One creditor Not necessarily in state of financial difficulty Thing delivered considered equivalent performance is as of Plurality of creditors Debtor must b partially or relatively insolvent Universality of property of debtor is what is ceded Merely releases debtor for net proceeds of things ceded of. proved or implied from the conduct of the creditor EFFECTS: OBLIGATION EXTINGUISHMENT OF a.

If the generic thing has already been segregated c.antecedent act. If the nature of the obligation requires the assumption of the risk LOSS OF THE THING DUE: partial or total/ includes impossibility of performance d. produces the effects of payment judicial ii. unless the object is a particular class or group with specific or determinate qualities OBLIGATION TO DELIVER A GENERIC THING GENERAL RULE: Not extinguished WHEN IS THERE PERFORMANCE: IMPOSSIBILITY OF EXCEPTIONS: a. If the generic thing is delimited b. If by law the obligor is liable even for fortuitous event b. LOSS OF DETERMINATE THING OR IMPOSSIBILITY OR DIFFICULTY OF PERFORMANCE GENERAL RULE: Loss shall extinguish the obligation EXCEPTIONS: a. When it disappears in such a way that: its existence is unknown or it cannot be recovered g. When the object perishes (physically) b. If by stipulation the obligor is liable even for fortuitous event c. preparatory extrajudicial principal act. Indirectly – caused as when debtor is required to enter a military draft ========================================= EFFECT OF LOSS IN OBLIGATION DELIVER A SPECIFIC THING TO TOPICS UNDER THE SYLLABUS E. Monetary obligation a. If the loss of the thing occurs after the obligor incurred in delay e. EXTINGUISHMENT OF OBLIGATIONS 2. If the loss of the thing occurs after the obligor incurred delay f. Legal impossibility i. IF the obligation is generic. Directly – caused as when prohibited by law CIVIL LAW REVIEWER 401 Page 117 of . Physical impossibility b. When it goes out of commerce c. Loss of determinate thing due or impossibility or difficulty of performance ========================================= 2. If the obligor promised to deliver the same thing to two or more persons who do not have the same interest WHEN IS THERE A LOSS a.

There must be an agreement b. in whole or in part. • CONDONATION/REMISSION OF THE DEBT – gratuitous abandonment of debt. storm REBUS SIC STANTIBUS: agreement is valid only if the same conditions prevailing at time of contracting continue to exist at the time of CIVIL LAW REVIEWER 401 Page 118 of . flood. earthquake. Cause of consideration must be liberality (Essentially gratuitous. CONDONATION OR REMISSION OF DEBT • Doctrine of Unforeseen Events: The court is authorized to release the obligor. Doctrine of Subjective Impossibility : The obligation undoubtedly becomes impossible if there is no physical or legal loss but the object obligation belongs to another person. donation. otherwise there would be nothing to condone) c. rules of donation applies. The event was not due to the act of any of the parties D. The event or change could not have been foreseen at the time of the execution of the contract B. right to claim. Obligor may be released in whole or in part based on this ground GENERAL RULE: Debtor is released when prestation becomes legally or physically impossible without fault on part of debtor REQUISITES: A. but not impossible (because if it is impossible. EXTINGUISHMENT OF OBLIGATIONS 3. The contract is for a future prestation EFFECT OF PARTIAL LOSS a. when the service has become so difficult as to be manifestly beyond the contemplation of the parties. The performance is extremely difficult. the obligor must indemnify the obligee for the damages suffered by the latter. When loss insignificant – not enough to extinguish obligation NOTE: • Judicial determination necessary of extent is ========================================== TOPICS UNDER THE SYLLABUS E. Condonation or Remission of Debt ========================================= 3. When loss is significant – may be enough to extinguish obligation b. There must be a subject matter (object of the remission. an act of liberality ) Exception: natural calamity.EFFECT OF IMPOSSIBILITY PERFROMANCE IN OBLIGATION TO DO OF performance. it is extinguished by impossibility) C. express or implied WHEN THING IS LOST IN THE POSSESSION OF THE DEBTOR Presumption: (disputable) Loss due to debtor’s fault REQUISITES: a.

voluntary delivery of private document d. EXTINGUISHMENT OF OBLIGATIONS 5. requires acceptance by obligor. Accessory obligation of pledge – condoned. Merger must be clear and definite c.whole c. Express – formalities of donation EXTENT a. rebuttable REQUISITES: a. Parties must be capacitated and must consent. presumption only. Compensation CIVIL LAW REVIEWER 401 Page 119 of . the obligation is revived REQUISITES OF IMPLIED CONDONATION 1. Revocable. CONFUSION OR MERGER CONFUSION OR MERGER: – character of debtor and creditor is merged in same person with respect to same obligation b. Implied – conduct is sufficient b. Principal – accessory also condoned 4. made to prescribe w/o demanding ========================================== TOPICS UNDER THE SYLLABUS g. legitime is impaired ) and ingratitude and condition not followed a. Total KINDS a. The obligation involved must be same and identical – one obligation only reason for confusion ceases. implied in mortis causa and expressed inter vivos e. EXTINGUISHMENT OF OBLIGATIONS 4. Confusion or Merger ========================================= FORMS a. Accessory – principal still outstanding c. Tacit – voluntary destruction of instrument by creditor. Effect of delivery of evidence of indebtedness is conclusion that debt is condoned – already conclusion. Formalities of a donation are required in the case of an express remission f. Revocable – subject to rule on inofficious donation ( excessive. if ========================================= TOPICS UNDER THE SYLLABUS E. Partial b. If in hands of solidary debtor debt is condoned . It must take place between principal debtor and principal creditor only b. If in hands of joint debtor – only his share is condoned b. when evidence of indebtedness is w/ debtor – presumed voluntarily delivery by creditor. rebuttable 2. Waivers or remission are not to be presumed generally E.d. Obligation remitted must have been demandable at the time of remission h. Voluntary delivery – presumption.

Total – when 2 debts are of the same amount f. Both debts are liquidated demandable (determined) e. Facultative – one party has choice of claiming/opposing one who has benefit of period may choose to compensate: i. Both debts are due and EFFECT OF ASSIGNMENT OF CREDIT TO 3RD PERSON. even if not equal debts – only up to concurring amount their own right and as principals b. With knowledge but w/o consent of debtor – compensation may be set up as to debts maturing prior to assignment iii. indemnity for expense of exchanges. needs pleading and proof. Conventional – agreement of parties is enough. Neither debt must be retained in a controversy commenced by 3rd person and communicated w/ debtor (neither debt is garnished) 1. of the same kind or quality c. compensation already perfected b. Legal – by operation of law. Judicial – set off. Partial – when 2 debts are not of the same amount COMPENSATION: Set off. W/o knowledge – compensation may be set-up on all debts prior to his knowledge d.========================================= 5.even if unknown to parties and if payable in diff places. With consent of debtor – debtor is estopped unless he reserves his right and gave notice to assignee ii. ii. it is a mode of extinguishment to the concurrent amount the obligation of persons who are in their own right reciprocally debtors or creditors REQUISITES: a. claim for future support. COMPENSATION d. CAN THERE STILL BE COMPENSATION a. Both parties must be mutually creditors and debtors . as long as 5 requisites concur. all requirements must concur except liquidation e. Both debts must consist in sum of money or if consumable . Kinds OF COMPENSATION a. upon order of the court. commodatum. forget other requirement as long as both consented c. criminal offense. If made before compensation took place – depends i. Not all requisites are present Depositum. each is a only 1 person who is debtor and creditor of creditor and debtor each other of himself 2 obligations indirect payment one obligation impossibility of payment COMPENSATION DISTINGUISHED FROM PAYMENT COMPENSATION PAYMENT capacity not capacity to dispose and necessary capacity to receive required CIVIL LAW REVIEWER 401 Page 120 of . If made after compensation took place – no effect. taxes COMPENSATION DISTINGUISHED FROM CONFUSION COMPENSATION CONFUSION 2 persons.

If old obligation has condition i. also nothing to novate CIVIL LAW REVIEWER 401 Page 121 of . NOVATION NOVATION: Extinguishment of obligation by creating/ substituting a new one in its place b. If Resolutory and it occurred – old obligation already extinguished. Valid new obligation EFFECTS OF NOVATION: a. Intent to extinguish old obligation – expressed or implied: completely/substantially incompatible old and new obligation on every point c.Capacity and consent of parties to the new obligation d. 1287) • Against a creditor who has a claim for support due by gratuitous title. EXTINGUISHMENT OF OBLIGATIONS 5. obliged to w/c is less onerous iv. 1288) b. Extinguishment accessory. 2 (Article 1287) If one of the debts consists in civil liability arising from a penal offense. Obligations Not Compensable • When one of the debts arises from a depositum or from the obligations of a depositary or of a baliee in commodatum.may be partial performance Simpler more guarantee and less risk may take place by operation of law must be complete performance • involves action or delivery of the amount paid • • C hanging object or principal conditions Substituting person of debtor Subrogating 3rd person in right of creditor REQUISITES: a.Valid obligation COMPENSATION DISTINGUISHED FROM COUNTERCLAIM COMPENSATION COUNTERCLAIM takes place by operation must be pleaded of law and extinguishes to be effectual reciprocally 2 claims as soon as they exist simultaneously to the concurrent amounts 2. Old obligation subsists if new obligation is void or voidable but annulled already (except: intention of parties) c. without prejudice to Article 301 par. Stipulation pour autrui beneficiary consents unless • iii. (Art. except: of principal carries i. Novation ========================================= 5. Old obligation is void ========================================= TOPICS UNDER THE SYLLABUS E. Modificatory novation only. If Suspensive and it never occurred –as if no obligation. Stipulation to contrary ii. no new obligation since nothing to novate ii. (Art.

full reimbursement.d. Delegatario . only beneficial reimbursement. creditor and third person third person. If resolutory: valid ii. not responsible since w/o his consent • DELEGACION: initiative of old debtor. If old obligation has condition. clearly established CIVIL LAW REVIEWER 401 Page 122 of . Substituting (passive) person of debtor • EXPROMISION: initiative is rd from 3 person or new debtor. Subrogating 3rd person to rights of creditor ( active ) 1.agreement and consent of all parties. need not be given simultaneously governed by same applies in the the rules of absence of an agreement payment by by old and new debtors third persons if w/o subrogation knowledge of debtor. no subrogation new debtor's same unless new debtor is insolvency known to the public as does not make insolvent or old debtor old debtor knows of such insolvency liable at the time of delegacion creditor may not recover from old debtor if he knows of such insolvency of the new debtor quite rare delegante (old) delegado (new) delegatario (creditor) ii. Delegante – old debtor 2. PERSONAL/SUBJECTIVE i.creditor 3. beneficial reimbursement . If suspensive and did not materialize: old obligation is enforced 1. must be compatible with the new obligation. Delegado – new debtor KINDS OF NOVATION: 1. subject to full reimbursement and subrogation if made w/ consent of old debtor. if w/o consent or against will . if new is w/o condition – deemed attached to new e. REAL/OBJECTIVE – change object. cause/consideration or principal condition 2. old debtor released from obligation. if new debtor is insolvent. new debtor and creditor to consent. all parties to consent. If new obligation has condition i. Conventional . if insolvent new debtor – not responsible old debtor because obligation extinguished by valid novation unless: insolvency already existing and of public knowledge or know to him at time of delegacion EXPROMISION DISTINGUISHED FROM DELEGACION EXPROMISIO DELEGACION N Intention: old debtor be released from the obligation Consent of creditor may be express or tacit but not presumed by acceptance of payment from third person Donation cannot be presumed consent of consent of debtor creditor and (initiates).

Legal . not presumed except as provided for in law: 3rd person has no obligation to pay if insolvent new debtor is obliged to pay PRESUMED WHEN Creditor pays another preferred creditor even w/o debtor’s knowledge • 3rd person not interested in obligation pays w/ approval of debtor • CONVENTIONAL DISTINGUISHED RIGHTS CONVENTIONA L SUBROGATION Governed by Arts. 1300-1304 debtor’s consent is required extinguishes the obligation and gives rise to a new one defects and vices in the old obligation are cured takes effect upon moment of novation or subrogation FROM SUBROGATION ASSIGNMENT OF Person interested in fulfillment of obligation pays debt even w/o knowledge of debtor • ASSIGNMENT OF RIGHTS Governed by Arts. takes effect upon notification debtor is released END OF DISCUSSION ON TOPIC ================================ needs consent of creditor – express or implied two obligations. 1624 to 1627 debtor’s required consent is not transmission of right of the creditor to third person without modifying or extinguishing the obligation defects and vices in the old obligation and not cured DIFFERENCE FROM PAYMENT PERSON vs CHANGE OF DEBTOR DIFFERENCE FROM PAYMENT BY 3RD PERSON debtor is not necessarily released from debt can be done w/o consent of creditor one obligation BY 3rd CHANGE OF DEBTOR as far as the debtor is concerned. one is extinguished and new one created CIVIL LAW REVIEWER 401 Page 123 of .2. no need for consent.takes place by operation of law.

1346) (1) Pactum commissorium (Arts.CONTRACTS A. ESSENTIAL REQUISITES ESSENTIAL ELEMENTS: 1.4.1. 1773) C. 1771. Chattel mortgage C. 1799) 7. GENERAL PROVISIONS 1. GENERAL PROVISIONS ================================ TOPICS UNDER THE SYLLABUS A. 1356. Sale of large cattle 3. 1409. 1956) C. Consent must spontaneous. Formality (Arts. 1874) C. Must be manifested by the concurrence of the offer and payment. 1390-1402) C. Essential Requisites ========================================= 1. Real C. 1317) D. 2130. Rescissible contracts (Art. 1390) (2) Pactum de non alienando (Art. CONSENT CONSENT – meeting of minds between parties on subject matter and cause of contract. Consideration A. 1358) 4. 748-749) C. 1381) A.1. Stipulation limiting common carrier’s duty of extraordinary diligence to ordinary diligence (Art. 2134) C. Consensual B. Antichresis (Art. Voidable contracts (Arts. AUTO CONTRACTS .8. and real be intelligent. Stipulation to charge interest (Art. Donations (Arts. concurrence of offer and acceptance REQUIREMENTS: 1. 13281344. Agency to sell real property or an interest therein (Art. Kinds of Contracts A. Unenforceable contracts (Arts. 1403-1408. Consent 2. Partnership where real property contributed (Arts. 2. Parties are legally capacitate to enter into contracts 3. Interpretation of Contracts 6. 1261) 2. Void contracts (Arts. 1357.5. 2088. free. GENERAL PROVISIONS 1. Effect of contracts (Art. Subject Matter 3.6. 1744) C. Reformation of Contracts 5. 2130) (3) Pactum leonine (Art. Essential Requisites (Art. Defective Contracts A. Formal or solemn C. 1311) ========================================= TOPICS UNDER THE SYLLABUS A. 1191 B. Difference with rescission (resolution) under Art.7.made by a person acting in another’s name in one capacity CIVIL LAW REVIEWER 401 Page 124 of .2.3.

Offers are interrelated – contract is perfected if all the offers are accepted 2. OFFER – a proposal made by one party to another to enter into a contract. and not when the offeree merely manifests his acceptance. complete and intentional ELEMENTS OF VALID OFFER / ELEMENTS OF VALID ACCEPTANCE 1. and he simply asks the other party to agree to them if he wants to enter into the contract ACCEPTANCE . insanity or insolvency of either party before acceptance is conveyed 2.will of majority binds a minority to an agreement notwithstanding the opposition of the latter 4. which becomes a counter-offer CIVIL LAW REVIEWER 401 Page 125 of . Offer is made to a person absent – acceptance may be made within such time that. Definite--unequivocal 2. Express or implied revocation of the offer by the offeree 3.manifestation by the offeree of his assent to the terms of the offer . containing the stipulations he desires. must be certain or definite. the offer and acceptance concur only when the offeror comes to know. PERIOD FOR ACCEPTANCE 1. which is contained in the amplification. plus a new offer. Death. RULE ON COMPLEX OFFERS 1. Stated fixed period in the offer Under our Civil Law. a mere amplification on the offer must be understood as an acceptance of the original party has already a prepared form of a contract. an answer can be received from him NOTE: Acceptance may be revoked before it comes to the knowledge of the offeror. must be absolute NOTE: A qualified counter-offer acceptance constitutes NOTE: We follow the theory of cognition and not the theory of manifestation. No stated fixed period a. civil interdiction. Complete--unconditional 3. (withdrawal of offer) AMPLIFIED ACCEPTANCE Under certain circumstances. Offer is made to a person present – acceptance must be made immediately b. Offers are not interrelated – single acceptance of each offer results in a perfected contract unless the offeror has made it clear that one is dependent upon the other and acceptance of both is necessary.COLLECTIVE CONTRACTS . Qualified or conditional acceptance of the offer. 2. Intentional WHEN OFFER BECOMES INEFFECTIVE: 1. S ubject matter becomes illegal or impossible before acceptance is communicated CONTRACTS OF ADHESION . under normal circumstances.

Minors 2. CA. but mere invitation to make an offer. Expedition – perfected from the moment the offeree transmits the notification of acceptance 3. (Jurado citing Castan) OPTION: option may be withdrawn anytime before acceptance is communicated but not when supported by a consideration other than purchase price: option money RULE ON ADVERTISEMENTS AS OFFERS EFFECTS OF OPTION: Business advertisements – Not a definite offer. [G. No. Cognition – perfected from the moment the acceptance comes to the knowledge of the offeror PERSONS WHO CANNOT GIVE CONSENT TO A CONTRACT: 1. 125761. the contract will be perfected only upon knowledge by the offeror of the express acceptance by the offeree of the offer.R. unless it appears otherwise • NOT supported by independent consideration – the offeror can withdraw the privilege at any time by communicating the withdrawal before acceptance Supported by independent consideration – the offeror cannot withdraw his offer Advertisement for Bidders – only invitation to make proposals and advertiser is not bound to accept the highest or lowest bidder. Intoxicated and under hypnotic spell 5. Art 1331 . 2003] transactions under the Code of Commerce use the Manifestation Theory. An acceptance which is not made in the manner prescribe by the offeror is NOT EFFECTIVE.• Offer inter praesentes must be accepted IMMEDIATELY. Insane or demented persons. If the parties intended that there should be an express acceptance. unless the contract was entered into during a lucid interval 3. BUT A COUNTER-OFFER which the offeror may accept or reject. Art 1338 . Manifestation – perfected from the moment the acceptance is declared or made 2. Reception – perfected from the moment the offeror receives the letter 4. Malbarosa v. mistake may deprive intelligence 6. Illiterates/ deaf-mutes who do not know how to write 4. When the offeror refuses to open the letter or telegram he is held to have a constructive notice of the contents thereof and will be bound by the acceptance of the offeree. April 30.person induced by fraud (dolo causante) NOTE: Contracts under the Civil Code generally adhere to the Cognition Theory while NOTE: Dolus bonus (usual exaggerations in trade) are not in themselves fraudulent CIVIL LAW REVIEWER 401 Page 126 of .person under mistake. unless appears otherwise • THE 4 THEORIES IN ACCEPTANCE OF OFFER BY TELEGRAM OR LETTER 1.

2. but here the persons who are bound to give them support should pay therefor manage their property. Upon reaching age of majority – they ratify the same b. Mercado vs. take care of themselves and 2. Violence REQUISITES a. as they did not disclose their minority because they had no juridical duty to disclose their inability. [37 Phil 215] HOWEVER. guardian or legal representative Based subjective circumstance certain person Contracts into are voidable upon of FROM DISQUALIFICATION Restrains the very right itself Absolutely disqualified d. Deaf and dumb who are unable to read and write 5. Espiritu.RULE ON CONTRACTS ENTERED INTO BY MINORS GENERAL RULE: VOIDABLE EXCEPTIONS: a. Rules of Court) INCAPACITY DISTINGUISHED DISQUALIFICATION INCAPACITY Restrains the exercise of the right to contract May still enter into contract through parent. disease. c. Sec. • Intimidation REQUISITES: b. Irresistible physical force b. becoming an easy prey for deceit and exploitation (Rule 92. They were contracts for necessities such as food. 2. Such force is the determining cause for giving consent DISQUALIFIED TO ENTER INTO CONTRACTS: (contracts entered into are void) 1. minors can set up the defense of minority to resist the claim when there is only passive misrepresentation. Minor is estopped and cannot be absolved from the contract they entered into for having misrepresented his age and misled the other party through his active misrepresentation. cannot without outside aid. [105 Phil 456] Based upon public policy and morality entered merely Contracts entered into are void CAUSES WHICH VITIATE FREEDOM 1. Those under civil interdiction Hospitalized lepers Prodigals • 4. (Braganza vs. 3. De Villa Abrille. weak mind and other similar causes. Determining cause for the contract Threatened act is unjust and unlawful CIVIL LAW REVIEWER 401 Page 127 of . Those who by reason of age. They were entered unto by a guardian and the court having jurisdiction had approved the same c.

No prejudice to 3rd persons 2. Real and serious Produces a well grounded fear that the person making it will carry it over Reluctant consent – a contract is valid even though one of the parties entered into it against his wishes and desires or even against his better judgment. or that such fact does not exist when in reality it does b. 1. he would not have agreed to. • Fraud When. CIVIL LAW REVIEWER 401 Page 128 of . Contracts are also valid even though they are entered into by one of the parties without hope of advantage or profit. Martinez vs. KINDS: d. etc. the other is induced to enter into a contract which. without them. • • SIMULATED CONTRACTS 4. • Mistake Not only wrong conception of the thing but also the lack of knowledge with respect to it (Manresa) o Incidental Fraud (Dolo Incidente).Mistake of Fact – when one or both of the contracting parties believe that a fact exist when in reality it does not. through insidious words or machinations of 1 of the contracting parties. [15 Phil 252] o C ausal Fraud (Dolo Causante). Mistake of Law General Rule: Mistake does not vitiate consent Exception: Mutual error as to the effect of an agreement when the real purpose of the parties is frustrated 5. concealed contract binds: c. fictitious only – void from beginning Relative – there is intention to be bound but concealed. morals.Fraud in the PERFECTION of the contract • Deception of serious character.Fraud in the PERFORMANCE of an obligation • Deception which are not serious and without which the other party would still have entered into the contract It is not the cause which induced the party to enter into a contract Renders the party liable for damages Undue influence • When a person takes improper advantage of his power over the will of another. Insidious words or machinations are employed Not employed by both or by third person Ground for annulment • • • • 3.d. Hongkong and Shanghai Bank. depriving the latter of a reasonable freedom of choice Two General Kinds of Mistake: a. Absolute – no intention to be bound at all. e. without which the other party would not have entered into It is the cause which induces the party to enter into a contract Renders the contract voidable. Not contrary to law.

It must be licit . Possible 4. good customs 3.produce no legal effect Void . Services which are contrary to law.WANT OF CAUSE ABSENCE OF CAUSA ILLEGALITY OF CAUSA FALSITY OF CAUSA EFFECT Void . Determinate as to its kind or determinable w/o need to enter into a new contract 5. illegality does not invalidate contract except when it predetermines purpose of contract.Immediate. Future inheritance. direct and most proximate reason why parties enter into contract REQUISITES: 1. It must be true 3. OBJECT REQUISITES: 1.burden of proof is on the person assailing its existence Does not Invalidate Contract per se Exceptions: * * * * Fraud Mistake Undue influence Cases specified by law 2. Things which are outside the commerce of men Psychological or purely personal reason The motive differs for each contracting party Legality or illegality of CIVIL LAW REVIEWER 401 Page 129 of . morals. Transmissible MOTIVE: Purely private reason. good customs.produce no legal effect Voidable – party must prove that cause is untruthful. CAUSE (CAUSA) CAUSA.contracts entered when ward suffers lesion of more than 25% B. Within the commerce of man – either existing or in potency 2. It must exist 2. In transmissible rights 3. when merged into one CAUSE DISTINGUISHED FROM MOTIVE CAUSE Direct and most proximate reason of a contract Objective and juridical reason of contract Cause us always same for each contracting party Legality or illegality of MOTIVE Indirect reasons or remote THINGS WHICH CANNOT BE THE OBJECT OF CONTRACT: 1. public order or public policy 5. except in cases expressly authorized by law 4. Licit or not contrary to law. Impossible things or services 6. presumption of validity but rebuttable Presumed to Exist . Objects which are not determination as to their kind possible of CAUSA NOT STATED IN CONTRACT INADEQUAC Y OF CAUSA C.

unconnected with any civil obligations. Pure Beneficence – mere liberality of the donor or benefactor 4.There is a total lack or absence of cause CONTRACT OBLIGATION CONTRACT DISTINGUISHED FROM OBLIGATION Legal tie or relation itself There need not be a contract One of the sources of obligations There must be an obligation CONTRACT AGREEMENT DISTINGUISHED FROM CONTRACT Illegal Cause – The cause is contrary to law. Robb [69 Phil 101]  Where such moral obligation is based upon a previous civil obligation which has already been barred by the statute of limitations at the time when the contract is entered into. etc. public order and public policy Agreements enforceable through legal proceedings Should have all the requisites of a contract There must be an agreement AGREEMENT Cannot be enforced by action in courts of justice Need not have all the requisites There need not be a contract False Cause – The cause is stated but it is not true Moral Obligation as Cause • Where the moral obligation arises wholly from ethical considerations. immoral. Obligatory Force and Consensuality – parties are bound from perfection of contract. good customs. with respect to the other. Autonomy of wills – parties may stipulate anything as long as not illegal. not left to will of one of parties 3. Accessory – identical with cause of principal contract. Estrada 71 Phil 14] A. morals. Remuneratory contracts – the service or benefit remunerated 3. PRINCIPAL CHARACTERISTICS : 1. Onerous contracts – the prestation of promise of a thing or service by the other 2. to give something or to render some service CAUSA IN SOME CONTRACTS: 1. Mutuality – performance or validity binds both parties.cause affects the existence or validity of the contract motive does not affect the existence or validity of contract A contract is a meeting of minds between two persons whereby one binds himself. Fisher vs. contracts are perfected by mere consent and from that moment the parties are bound not only to the fulfillment of what CIVIL LAW REVIEWER 401 Page 130 of . the loan which it derived its life and existence (ex: mortgage or pledge) Want of Cause . it constitutes a sufficient cause or consideration to support a contract Villaroel vs. 2. it cannot constitute a sufficient cause or consideration to support an onerous contract.

Stipulation pour autrui • The fairest to determine whether the interest of 3rd person in a contract is a stipulation pour autrui or merely an incidental interest is to rely upon the intention of the parties as disclosed by their contract. TEST OF BENFICIAL SITUATION 5. subject to the provisions of the Mortgage Law and the Land Registration Laws D. KINDS OF CONTRACTS 1. usage and law 6. 4. REQUISITES: 1. Knowledge of the contract by a 3rd person 3. Art 1312. EXCEPTION TO RELATIVITY: 1. The stipulation in favor of a 3rd person should be a part of. Determine whether contracting parties desired to tender him such interest Uy Tam vs. REQUISITES AUTRUI OF STIPULATION POUR ========================================= 1. strangers cannot demand enforcement B. Parties must have clearly and deliberately conferred a favor upon a 3rd person 2. pledge. third persons who come into possession of the object of the 2. heirs. All consequences w/c may be in keeping with good faith. Accion Pauliana 2. Interference by the 3rd person E. That the favorable stipulation should not be conditioned or compensated by any kind of obligation whatsoever 4. χ. deposit) Formal/solemn conformity to (donation ) (e. As to perfection or formation α. Kinds of Contracts ========================================= 2. Relativity – binding only between the parties. GENERAL PROVISIONS 2. [30 Phil 471] C. their assigns. – perfected by essential formalities In contracts creating real rights. As to cause CIVIL LAW REVIEWER 401 Page 131 of . Leonard. not the whole contract 3. Accion directa 3. usage and law. Fulfill what stipulated has been expressly contract are bound thereby.g. β. Neither of the contracting parties bears the legal representation or authorization of 3rd party 5. Consensual – perfected by agreement of parties Real – perfected by delivery commodatum. according to their nature may be in keeping with good faith. Existence of a valid contract 2. Art 1314 TOPICS UNDER THE SYLLABUS A. The third person communicates his acceptance before revocation by the original parties 6.has been expressly stipulated but also to all consequences which.

2.a. (Art. β. 1638) STAGES IN A CONTRACT: 1. c. Preparation . Things Services • CIVIL LAW REVIEWER 401 Page 132 of .negotiation Perfection/birth Consummation – performance FORMAL CONTRACTS 1. Commutative – example lease Aleatory – example insurance 9. As to their subject matter a. As to their purpose a. i. aaaa Do ut facias – I give that you may do aVa Facio ut des – I do that you may give Va Facio ut facias – I do that you may do 4. b. Nominate – those which have their own distinctive individuality and are regulated by special provisions of law b. Gratuitous – founded on liberality c. As to form a. a means through which future contracts may be made χ. may not exist on its own Preparatory – not an end by itself. Unilateral – only one of the parties has an obligations b. barter or exchange. As to name or designation a. b. A s to the risk involved a. Remunerative – prestation is given for service previously obligation rendered not as 8. b. Principal – contract may stand alone Accessory – depends on another contract for its existence.e. As to parties obliged a. Common or informal – require no particular form b. Innominate – those which lack individuality and are not regulated by special provisions of law a aa Do ut des – I give that you 3. Onerous – with valuable consideration b. Special or formal – require some particular Form 6. As to importance or dependence of one upon another α. Donation • The donation of a movable may be made orally or in writing (Article 748) An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated. It has already been given a name of its own. do ut des is no longer an innominate contract. 3. (Article 748) 7. Transfer of ownership Conveyance of use Rendition of service NOTE: According to some authorities. Bilateral – both parties are required to render reciprocal prestations 5.

Partnership • A partnership may be constituted in any form. except where immovable property or real rights are contributed thereto. is delivered to the creditor or a third person. If the movable. 4. (Article 1773) o • o 7. otherwise. or deterioration of the goods to a degree less than extraordinary diligence shall be valid. the contract is a pledge and not a chattel mortgage. and Reasonable. if an inventory of said property is not made. the authority of the latter shall be in writing. (Article 1771) A contract of partnership is void. (Article 749) The acceptance may be made in the same deed of donation or in a separate public document. provided it be: o In writing. and attached to the public instrument. instead of being recorded. (Article 749) 6. whenever immovable property is contributed thereto.• If the value of the personal property donated exceeds five thousand pesos. the donor shall be notified thereof in an authentic form. Supported by a valuable consideration other than the service rendered by the common carrier. A gency to Sell Real Property • When a sale of a piece of land or any interest therein is through an agent. in which case a public instrument shall be necessary. it must be made in a public document. (Article 1874) • 5. specifying therein the property donated and the value of the charges which the donee must satisfy. Interest • No interest shall be due unless it has been expressly stipulated in writing (Article 1876) • • Ordinary Diligence • A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss. signed by the parties. (Article 748) In order that the donation of an immovable may be valid. Otherwise. Chattel Mortgage • By a chattel mortgage. otherwise. 3. just and not contrary to public policy. Antichresis • The amount of the principal and of the interest shall be specified in writing. (Article 1744) 2. personal property is recorded in the Chattel Mortgage Register as a security for the performance of an obligation. the sale shall be void. the donation and the acceptance shall be made in writing. the donation shall be void. signed by the shipper or owner. and this step shall be noted in both instruments. destruction. (Article 749) If the acceptance is made in a separate instrument. but it shall not take effect unless it is done during the lifetime of the donor. the contract of antichresis shall be void CIVIL LAW REVIEWER 401 Page 133 of .

transfer of large cattle. All other docs where amount involved is in excess of 500 (must be written even private docs ) ========================================= TOPICS UNDER THE SYLLABUS A. Cession. contract is valid but right to enforce cannot be exercised. For validity (formal/solemn contracts) 2. form is a manner in which a contract is executed or manifested 1. needed only to bind 3rd parties Ex: public documents needed for the ff: i. need ratification to be enforceable c. For enforceability (statute of frauds) 3. renunciation of hereditary rights/CPG iii. v.donation and acceptance of real property b. (Article 1581) • • G ENERAL RULE: contract is valid and binding in whatever form provided that 3 essential requisites concur EXCEPTIONS a. Cession of action of rights proceeding from an act appearing in a public inst. Sale of Large Cattle • The form of sale of large cattle shall be governed by special laws. stipulation to pay interest. donation of personal prop in excess of 5. Law requires contract to be in some form to be enforceable .contract is valid and enforceable. registration of chattel mortgage. Informal – may be entered into whatever form as long as there is consent. contract of antichresis. GENERAL PROVISIONS 3. object and cause 2. Formality ========================================= 3. CIVIL LAW REVIEWER 401 Page 134 of . Law requires contract to be in some form for validity .8. contract of partnership. Contracts w/c object is creation. Law requires contract to be in some form for convenience .000 3. sale of land thru agent. Power to administer property for another iv.Statute of Frauds. repudiation. Real – creation of real rights immovable prop must be written over WHEN FORM IS IMPORTANT: 1. For convenience NOTE: RA 8792 (E-COMMERCE ACT) – formal requirements to make contracts effective as against third persons and to establish the existence of a contract are deemed complied with provided that the electronic document is unaltered and can be authenticated as to be useable for future reference. FORM OF CONTRACTS FORM: in some kind of contracts only as contracts are generally consensual. Formal – required by law to be in certain specified form such as: donation of real property. transmission or reformation of real rights over immovables ii.


Requisites: a.There is a written instrument b. There is meeting of minds


c.True intention not expressed in instrument d. Clear and convincing proof

e.Facts put in issue in pleadings 4. REFORMATION OF INSTRUMENTS NOTE: REFORMATION OF CONTRACTS: remedy to conform to real intention of parties due to mistake, fraud, inequitable conduct, accident • Prescribes in 10 years execution of instrument from date of

• When one of the parties has brought an action to enforce the instrument, no subsequent reformation can be asked. (principle of estoppel) • Reformation is based on justice and equity

CAUSES/GROUNDS: 1. Mutual: instrument includes something w/c should not be there or omit what should be there a. Mutual b. Mistake of fact c. Clear and convincing proof WHEN REFORMATION NOT AVAILABLE: 1. Simple donation inter vivos 2. Wills 3. When real agreement is void 4. Estoppel when party has brought suit to enforce it or =========================================

• When there is no meeting of the minds, the proper remedy is annulment and not reformation

d. Causes failure of instrument to express true intention 2. Unilateral a. One party was mistaken b. Other either acted fraudulently inequitably or knew but concealed c. Party in good reformation faith may ask



3. Mistake by 3rd persons – due to ignorance, lack of skill, negligence, bad faith of drafter, clerk or typist 4. Others specified by frustration of true intent law – to avoid


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GENERAL RULE: If the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. (Art. 1370) EXCEPTION: It is alleged and proved that the intention of the parties is otherwise. Sec. 13 Rule 130 of the Rules of Court: “When an instrument consists partly of written words and partly of a printed form, and the two are inconsistent, the former controls the latter.” NOTE: 1. If the law is clear, there is no room for interpretation 2. In case of ambiguity, the most important guideline is intention of the parties. 3. Ambiguity is construed against the one who caused it because he had control (e.g. contract of adhesion). However, this rule does not apply to all contracts of adhesion (e.g. if contract is negotiated) 4. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. (Art. 1371) 5. Words which may have different significations shall be understood in that which is most in keeping with the nature and object of the contract. (Art. 1375) 6. The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. (Art. 1377) 7. If the court cannot resolve the ambiguity based on the elements of the contract: a. If a gratuitous contract, the least transmission of rights and interests shall prevail b. If an onerous contract, doubt shall be settled in favor of the greatest reciprocity of interest 8. The principles of interpretation stated in Rule 123 of the Rules of Court shall likewise be observed in the construction of contracts In the case of Felipe v. Heirs of Maximo Aldon [G.R. No. L-60174, February 16, 1983], the Court stated that the description that a contract is “invalid” is no longer precise, since the Civil Code uses specific names in designating defective contract (e.g. rescissible, voidable, unenforceable, and void or inexistent contracts)





A. RESCISSIBLE CONTRACTS RESCISSIBLE CONTRACTS - Those which have caused a particular economic damage either to one of the parties or to a 3rd person and which may be set aside even if valid. It may be set aside in whole or in part, to the extent of the damage caused

REQUISITES: (a) Contract must be rescissible Under Art 1381: Contracts entered into by persons exercising fiduciary capacity: 1. Entered into by guardian whenever ward suffers damage by more than 1/4 of value of object 2. Agreed upon in representation of absentees, if absentee suffers lesion by more than ¼ of value of property 3. Contracts where rescission is based on fraud committed on creditor (accion pauliana) 4. Objects of litigation; contract entered into by defendant w/o knowledge or approval of litigants or judicial authority 5. Provided for by law – Arts 1526, 1534, 1539, 1542, 1556, 1560, 1567 and 1659


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Art. 1526 – Unpaid seller of goods, notwithstanding that the ownership in the goods may have passed to the buyer, subject to other provisions on Sales Art. 1534 – Unpaid seller having the right of lien or having stopped the goods in transit, where he expressly reserved his right to do so in case the buyer should make default, or the buyer has been in default in the payment of the price for an unreasonable time Art. 1539 – In the sale of real estate at a rate of a certain price for a unit of measure or number, at the will of the vendee, when the inferior value of the thing sold exceeds onetenth of the price agreed upon, or if the vendee would not have bought the immovable had he known of its smaller area or inferior quality Art. 1542 – In the sale of real estate, made for a lump sum, where the boundaries are mentioned and the area or number within the boundaries exceed that specified in the contract, when the vendee does not accede to the failure to deliver what has been stipulated Art. 1556 – Should the vendee lose, by reason of eviction, a part of the thing sold of such importance, in relation to the whole, that he would not have bought it without said part Art. 1560 – Vendee may ask for recession if the immovable sold should be encumbered with any non-apparent burden or servitude, not mentioned in the agreement, of such a nature that it must be presumed that the vendee would not have acquired it had he been aware thereof

Art. 1567 – In cases of breach of warranty against hidden defects of or encumbrances upon the thing sold Art. 1658 – If the lessor or lessee should not comply with their obligations, the aggrieved party may ask for rescission

ART 1191 COMPARED TO ART 1381 RESCISSION IN ART 1191 It is a principal action retaliatory in character Only ground is nonperformance of one’s obligation or what is incumbent upon him Applies only reciprocal obligation to RESCISSION PROPER IN ART 1381 it is a remedy subsidiary

There are 5 grounds to rescind. Nonperformance by the other is not important Applies to both unilateral and reciprocal obligations Even a third person who is prejudiced by the contract may demand the rescission of the contract. Court cannot grant extension of time for fulfillment of the obligation Its purpose is to seek reparation for the damage or injury caused, thus allowing partial rescission of the contract

Only a party to the contract may demand fulfillment or seek the rescission of the contract Court may fix a period or grant extension of time for the fulfillment of the obligation Its purpose is to cancel the contract


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Under Art. 1382 - Payments made in a state of insolvency 1. Plaintiff has no other means to obtain reparation. 2. Plaintiff must be able to return whatever he may be obliged to return due to rescission 3. The things must not have been passed to 3rd parties who did not act in bad faith 4. It must be made within the prescribed period (of 4 years)

b. thing already in possession of party in good faith; subject to indemnity only; if there are 2 or more alienations – liability of 1st infractor


consideration of the inadequate or fictitious




transfer was made by a debtor after a suit has been begun and while it is pending against him sale upon credit by an insolvent debtor evidence of indebtedness or complete insolvency transfer of all his property by a debtor when he is financially embarrassed or insolvent transfer made between father and son where there is present any of the above circumstances failure of the vendee to take exclusive possession of the property

REQUISITES before a contract entered into in fraud of creditors may be rescinded: 1. There must be credit existing prior to the celebration of the contract. 2. There must be fraud, or at least, the intent to commit fraud to the prejudice of the creditor seeking rescission 3. The creditor cannot in any legal manner collect his credit (subsidiary character of rescission) 4. The object of the contract must not be legally in the possession of a 3rd person who did not act in bad faith.

c. d.




B. VOIDABLE CONTRACTS VOIDABLE CONTRACTS -intrinsic defect; valid until annulled; defect is due to vice of consent or legal incapacity

OBLIGATION CREATED BY THE RESCISSION OF THE CONTRACT: Mutual Restitution a. Things w/c are the objects of the contract and their fruits b. Price with interest CHARACTERISTICS: a. Effective until set aside b. May be assailed or attacked only in an action for that purpose NOT APPLICABLE c. Can be confirmed (NOTE: confirmation is the proper term for curing the defect of a voidable contract) d. Can be assailed only by the party whose consent was defective or his heirs or assigns



a. creditor did not receive anything from contract


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WHAT CONTRACTS ARE VOIDABLE: a. Minors b. Insane unless acted in lucid interval c. Deaf mute who can’t read or write disqualified: civil

spouse, ascendants coercion)




UNDUE INFLUENCE Person takes improper advantage of his power over will of another depriving latter of reasonable freedom of choice

d. Persons specially interdiction e. In state of drunkenness f. In state of hypnotic spell

MISTAKE False belief of something which is contrary to the real intention of the parties

The doctrine on reluctant consent provides that a contract is still valid even if one of the parties entered it against his wishes or even against his better judgment. Contracts are also valid even though they are entered into by one of the parties without hope of advantage or profit. Martinez vs. HSBC, [12 Phil 252]

REQUISITES: a. Refers to the subject of the thing which is the object of the contract b. Refers to the nature of the contract c. Refers to the principal conditions in an agreement

FRAUD Thru insidious words or machinations of contracting parties, other is induced to enter into contract w/o w/c he will not enter (dolo causante)

d. Error as to person - when it is the principal consideration of the contract e. Error as to legal effect - when mistake is mutual and frustrates the real purpose of parties

KINDS OF FRAUD IN THE PERFORMANCE OF OBLIGATION OR CONTRACTS a. Causal Fraud (dolo causante) – deception of serious character without which the other party would not have entered into; contract is VOIDABLE (Art. 1338) b. Incidental Fraud (dolo incidente) – deception which are not serious and without which the other party would still have entered into the contract; holds the guilty party liable for DAMAGES (Art. 1344) c. Tolerated Fraud – includes minimizing the defects of the thing, exaggeration of its god qualities and giving it qualities it does not have; LAWFUL misrepresentation

VIOLENCE Serious or irresistible force is employed to wrest consent

INTIMIDATION One party is compelled by a reasonable and well-grounded fear of an imminent and grave danger upon person and property of himself,


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NOTE: Expression of an opinion – not fraud unless made by expert and other party relied on the former’s special knowledge

ιιι. The injured party must have executed an act which expressly or impliedly conveys an intention to waive his right

Fraud by third person – does not vitiate consent; only action for damages except if there is collusion between one party and the third person, or resulted to substantial mistake, mutual between parties.

c. LOSS OF THE THING which is the object of the contract through fraud or fault of the person who is entitled to annul the contract

CAUSES OF EXTINCTION OF ACTION TO ANNUL a.PRESCRIPTION for Annulment Period to bring an action

NOTE: Object is lost through a fortuitous event, the contract can still be annulled, but the person obliged to return the same can be held liable only for the value of the thing at the time of the loss, but without interest thereon.

i. Intimidation, violence, undue influence - 4 years from time defect of consent ceases ii. Mistake, fraud – 4 years from time of discovery iii. Incapacity From time guardianship ceases -

Ratification cleanses the contract of its defects from the moment it was constituted. C. UNENFORCEABLE CONTRACT UNENFORCEABLE CONTRACT – valid but cannot compel its execution unless ratified; extrinsic defect; produce legal effects only after ratified

KINDS: • Discovery of fraud must be reckoned to have taken place from the time the document was registered in the office of the register of deeds. Registration constitutes constructive notice to the whole world. Carantes v. CA, [76 SCRA 514] a. Unauthorized or No sufficient authority – entered into in the name of another when:
i. ii.

No authority conferred In excess of (ultra vires) authority conferred

b. RATIFICATION REQUISITES: ι. Knowledge of contract voidable reason rendering

b. Curable by Ratification - Both parties incapable of giving consent -2 minor or 2 insane persons c. Curable by Acknowledgment - Failure to comply with Statute of Frauds

ιι. Such reason must have ceased, except in case of ratification effected by the guardian to contracts entered into by an incapacitated,

STATUTE OF FRAUDS: Agreement to be performed within a year after making contract


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ii. Special promise to answer for debt, default or miscarriage of another iii. Agreement made in consideration of promise to marry Agreement for sale of goods, chattels or things in action at price not less than 500; exception: auction when recorded sale in sales book Agreement for lease of property for more than one year and sale of real property regardless of price Representation as to credit of another CHARACTERISTICS: a. It produces no effect whatsoever either against or in favor of anyone b. There is no action for annulment necessary as such is ipso jure. A judicial declaration to that effect is merely a declaration c. It cannot be confirmed, ratified or cured




d. If performed, restoration is in order, except if pari delicto will apply e. The right to set up the defense of nullity cannot be waived f. Imprescriptible

TWO WAYS OF CURING UNENFORCEABLE CONTRACTS: a. Failure of defendant to object in time, to the presentation of parole evidence in court, the defect of unenforceability is cured

g. Anyone may invoke the nullity of the contract whenever its juridical effects are asserted against him

b. Acceptance of benefits under the contract. If there is performance in either part and there is acceptance of performance, it takes it out of unenforceable contracts; also estoppel sets in by accepting performance, the defect is waived

KINDS OF VOID CONTRACT: a. Those lacking in essential elements : no consent, no object, no cause (inexistent ones) – essential formalities are not complied with ( ex: donation propter nuptias – should conform to formalities of a donation to be valid ) i. Those w/c are absolutely simulated or fictitious – no cause

NOTES: • The contracts/agreements under the Statute of Frauds require that the same be evidenced by some note or memorandum or writing, subscribed by the party charged or by his agent, otherwise, the said contracts shall be unenforceable. The Statute of Frauds applies only to executory contracts, not to those that are partially or completely fulfilled.

ii. Those which cause or object did not exist at the time of the transaction – no cause/object iii. Those whose object is outside the commerce of man – no object iv. Those w/c contemplate impossible service – no object an


v. Those w/c intention of parties relative to principal object of the contract cannot be ascertained


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2088. no action against each other. payment of any amount in excess of the maximum price of any article or commodity fixed by law or regulation by competent authority f. PACTUM DE NON ALIENANDO (Art. applies only to illegal contracts and not to inexistent contracts. or before any damage has been caused to a 3rd person c. does not apply when a superior public policy intervene d. g. where the party who paid or delivered repudiates the contract before the purpose has been accomplished. There should be a stipulation for automatic appropriation by the creditor of the thing mortgaged in case of non-payment of the principal obligation within the stipulated period. It is a clause in a mortgage giving the mortgagee the right to foreclose by executory process directed solely against the mortgagor. PACTUM COMMISSORIUM (Arts. whether it amounts to a crime or not Both parties are guilty. KINDS OF ILLEGAL CONTRACTS PARI DELICTO DOCTRINE REQUISITES OF ILLEGAL CONTRACTS: a. One who lost in gambling because of fraudulent schemes practiced on him is allowed to recover his losses (Art.If purpose has not yet been accomplished and if damage has not been caused to any 3rd person OTHER EXCEPTIONS: a. Those expressly prohibited or declared void by law . public order or public policy . object or purpose is contrary to law. Illegal/Illicit ones – Those whose cause. Payment of Usurious interest b.b. morals.Contracts w/c violate any legal provision. 2. regardless of any subsequent alienations. payment of money or delivery of property made by an incapacitated person • d. There should be a property mortgaged by way of security for the payment of the principal obligation. payment of money or delivery of property for an illegal purpose. Contract is for an illegal purpose CIVIL LAW REVIEWER 401 Page 142 of . agreement or contract which is not illegal per se and the prohibition is designed for the protection of the plaintiff e. A stipulation which excludes one or more partners from any share in profit or loss is void. Prohibited by law c. contract whereby a laborer undertakes to work longer than the maximum number of hours fixed by law 3. and giving him or her the right to seize and sell the mortgaged property. 1799) EXCEPTION TO PARI DELICTO RULE . Ex: Contract to sell marijuana OTHER VOID CONTRACTS: 1. 2130) • A stipulation forbidding the owner from alienating the immovable mortgaged shall be void. good customs. 2130. 2. PACTUM LEONINA (Art. those who come in equity must come with clean hands. 1390) ELEMENTS: 1. 313 RPC) even if gambling is prohibited.

(Article 1311) If a contract should contain some stipulation in favor of a third person. The heir is not liable beyond the value of the property he received from the decedent. pari delicto cannot apply because an incapacitated person does not know what he is entering into. he may demand its fulfillment provided he communicated his CIVIL LAW REVIEWER 401 Page 143 of . If agreement is not illegal per se but merely prohibited and prohibition is 7. EFFECT OF CONTRACTS Contracts take effect only between the parties. Labor – if law sets the minimum wage for laborers. courts may allow recovery of money. their assigns and heirs. any person paying an amount in excess of the maximum price allowed may recover such excess b. unable to understand the consequences of his own action b. Interest paid in excess of the interest allowed by the usury law may be recovered by debtor with interest from date of payment b. any laborer who agreed to receive less may still be entitled to recover the deficiency. return price plus interest EXCEPTION: No recovery can be had in cases where nullity of contract arose from illegality of contract where parties are in pari delicto. Consumer protection – if price of commodity is determined by statute. GENERAL PROVISIONS 7. If one party is incapacitated. or by stipulation or by provision of law. Contract must be repudiated by any of the parties before purpose is accomplished or damage is caused to 3rd parties Court believes that public interest will be served by allowing recovery (discretionary upon the court) – based on remorse. MUTUAL RESTITUTION IN VOID CONTRACTS GENERAL RULE: parties should return to each other what they have given by virtue of the void contract in case • Where nullity arose from defect in essential elements a. Effect of Contracts ========================================= EFFECTS OF ILLEGAL CONTRACTS a. AND USURY LAW a. return object and fruits of contract WHERE LAWS ARE ISSUED TO PROTECT CERTAIN SECTORS: CONSUMER PROTECTION. LABOR. except when incapacitated – not obliged to return what he gave but may recover what he has given other party is less guilty or not guilty ========================================= TOPICS UNDER THE SYLLABUS A. illegality is accomplished when parties entered into contract. if law set max working hours and laborer who undertakes to work longer may demand additional compensation c. except in case where the rights and obligations arising from the contract are not transmissible by their nature. property delivered by incapacitated person in the interest of justice.b. before it takes effect – party w/c is remorseful prevents it designated for the protection of the plaintiff – may recover what he has paid or delivered by virtue of public policy c.

acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person. (Article 1311) CIVIL LAW REVIEWER 401 Page 144 of .

INTRODUCTION 1. Price certain in money or its equivalent ========================================= TOPICS UNDER THE SYLLABUS A. INTRODUCTION ================================ TOPICS UNDER THE SYLLABUS A. Contract of sale/contract to sell ========================================= 2. Characteristics of Contract of Sale ========================================= TOPICS UNDER THE SYLLABUS A. 1505) 3. Negotiation Perfection Consummation ========================================= TOPICS UNDER THE SYLLABUS A. 2. Determinate subject matter 3. Obligations created (Art. Stages of Contract of Sale ========================================= 3. 3. Elements of a Contract of Sale ========================================= 5. Introduction 1. INTRODUCTION 2. ELEMENTS OF A CONTRACT OF SALE 1. 4. 1470) 2. A contract of sale may be absolute or conditional. Characteristics of a contract of sale 6. Nominate Principal Consensual Bilateral CIVIL LAW REVIEWER 401 Page 145 of . INTRODUCTION 3. Sale is title and not mode 7. Obligations created ========================================= TOPICS UNDER THE SYLLABUS A. 1458. CHARACTERISTICS OF CONTRACT OF SALE: 1. 2. DEFINITION OF SALES (Arts. ========================================= TOPICS UNDER THE SYLLABUS A. to deliver possession ========================================= 1. INTRODUCTION 5. 1458 & 1470) CONTRACT OF SALE – One of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing. Stages of contract of sale 4. OBLIGATIONS CREATED 2 sets of real obligations to give Obligation of the Seller: a. Definition of sales (Arts. STAGES IN LIFE OF CONTRACT OF SALE 1. Essential requisites of a contract of sale (Art. Sale distinguished from other contracts 8. Definition of Sales ========================================= 4. Consent 2. to transfer ownership and b. 1165) 5.SALES A. and the other to pay therefore a price certain in money or its equivalent. 3. INTRODUCTION 4.

products are not ordinary products of Manufacturer (EEI v CIR) 6.Under art 1467: whether the thing transferred only existed upon special order 2.if manufacturer engages in activity with the need to employ extraordinary skills and equipment (Celestino v CIR) 3.5. Habituality test . Sale distinguished from other contracts ======================================== BARTER DISTINGUISHED FROM SALE Barter Sale Consideration: giving Consideration: giving of a thing of money as payment Governed by law on sales: species of the genus sales If consideration consists partly in money and partly by thing – look at manifest intention. 6. INTRODUCTION 6. Sale is Title and not Mode ========================================= Essence is service Essence is object Real obligation Personal obligation Tests under Jurisprudence: GR: IF YES. Reciprocal Onerous Commutatitve Title and not a mode hand or not) ========================================= TOPICS UNDER THE SYLLABUS A. SALE IS TITLE AND NOT MODE ========================================= TOPICS UNDER THE SYLLABUS A. 8. If intention is not clear: value of thing is more than amount of money – barter If intention is not clear: value of thing is equal or less than amount of money – sale CONTRACT FOR PIECE Lease Use of thing is for a specified period only with an obligation to return Consideration is rent Lessor need not be owner OF WORK Sale Obligation to absolutely transfer ownership of thing Consideration is price Seller needs to be owner of thing to transfer ownership DISTINGUISHED FROM SALE Contract for piece of work Goods are to be manufactured specially for a customer and upon special order and not for the general market Sale Contract for delivery of an article which the vendor in the ordinary course of business manufactures or procures for general market (whether on DATION IN PAYMENT DISTINGUISHED FROM SALE Dation in Payment Sale Pre-existing credit No pre-existing credit Obligations are Obligations are extinguished created Debtor’s consideration: Consideration of extinguishment of the seller: price debt Consideration of Creditor’s consideration: buyer: acquisition acquisition of the object of the object CIVIL LAW REVIEWER 401 Page 146 of . SALE 1. 7. INTRODUCTION 7.Each product’s nature of execution differs from the others. IF NO. Timing test . Contract for piece of work. Nature of the object test .

Contract of Sale/Contract to Sell ========================================= 8. Capacity of parties (Arts. Parties to a Contract of Sale 1. Preparatory contract Principal remains owner even if object delivered to agent Agent assumes no risk/liability as long as within the authority given May be revoked unilaterally because fiduciary and even if revoked w/o ground Agent not allowed to profit Personal Contract. in agency Seller warrants Non-payment of the price is a negative resolutory condition Not unilaterally revocable Seller receives profit Real Contract Remedies available: Specific Performance Rescission Damages END OF DISCUSSION ON TOPIC A. Rescission is not available Buyer pays for price of object Principal contract Buyer becomes owner of thing. Contract of Sale/Contract to Sell Contract of Sale Absolute Real obligation – obligation to give Title passes to the buyer upon delivery Contract to Sell Conditional Personal obligation – obligation to do Ownership is reserved in the seller and will pass to the buyer only upon full payment of the price Full payment is a positive suspensive condition. the failure of which is not a breach but prevents the obligation of the vendor to convey title to arise Remedies available: Resolution Damages AGENCY TO SELL DISTINGUISHED FROM SALE Agency to Sell Sale Agent not obliged to pay for price. INTRODUCTION Greater freedom in determining the price Buyer still has to pay the price 8. PARTIES TO A CONTRACT OF SALE ================================ TOPICS UNDER THE SYLLABUS B. 1491-1492) ========================================= ========================================= TOPICS UNDER THE SYLLABUS CIVIL LAW REVIEWER 401 Page 147 of . merely obliged to deliver price received from buyer. 1327. it is a sale by installments B. Relative incapacity: married persons 4. INTRODUCTION ================================ DONATION DISTINGUISED FROM SALE Donation Sale Gratuitous or Onerous onerous Formal contract Consensual contract NOTE: Lease with option to buy: really a contract of sale but designated as lease in name only. Special disqualifications (Arts. Absolute incapacity (Arts. 1399) 3. 1397.offered in lieu of the original credit Less freedom in determining the price Payment is received by the debtor before the contract is perfected A. 14891492) 2.

PARTIES TO A CONTRACT OF SALE 1.Two groups of parties prohibited from acquiring by purchase certain properties: a.A spouse may. Property is the subject matter in litigation. Guardian/Agent/Executors and Administrators • Direct or indirect • May be ratified since only private wrong is involved 2. While in litigation (from filing of complaint to final judgment) NOTE: Exception to the prohibition against attorneys: contingent fee arrangement where the amount of legal fees is based on a value of property involved in litigation (reason is that the transfer or assignment of the property takes effect only after the finality of a favorable judgment II. Cannot be ratified since public wrong is involved ii. These contracts are void. ABSOLUTE INCAPACITY MINORS. Legal Status of Contract 1. enter into sales transactions in the regular pursuit of their profession. Requisites for the prohibition to apply to attorneys: 1. vocation. RELATIVE INCAPACITY A. Relative Incapacity ========================================= CIVIL LAW REVIEWER 401 Page 148 of . AND DEAF-MUTES • Contracts are voidable. Existence of attorney client relationship. subject to annulment or ratification Also includes: State of drunkenness Hypnotic spell NECESSARIES: Those sold and delivered to a minor or other person without capacity to act. or trade. PARTIES TO A CONTRACT OF SALE 3. Art. 2. SPOUSES . Absolute Incapacity ========================================= NOTE: Prohibition likewise applies to commonlaw spouses B. Capacity of Parties ========================================= GENERAL RULE . EXCEPTION: • When a separation of property was agreed upon in the marriage settlement • When there has been a judicial separation of property under Art. Public Officers & Employees/Officers of Court i. 191 TOPICS UNDER THE SYLLABUS B.All persons who are authorized in this Code to obligate themselves may enter into a contract of sale ========================================= 3. GENERAL RULE: The husband and the wife cannot sell property to each other. OTHERS . without the consent of the other spouse. INSANE AND DEMENTED PERSONS. Void (case law) – guardian/ executor/public officers / officers of the court ========================================= TOPICS UNDER THE SYLLABUS B. he must pay a reasonable price therefore • b. 1491 . 3.TOPICS UNDER THE SYLLABUS B.TRUST RELATIONSHIPS I. PARTIES TO A CONTRACT OF SALE 2.

contract is void B. Not outside the commerce of man B. if it does not. future. Prohibited: i. PARTIES TO A CONTRACT OF SALE 4. “Possible” contingent existing. Determinate or determinable i. VALID if with consent ========================================= TOPICS UNDER THE SYLLABUS B. unless it is a vain hope (Art 1461 Sale of a vain hope or expectancy is void) The uncertainty is with regard to the existence of the thing 1. Subject Matter 1.2.3. Animals with contagious diseases ii. PARTIES TO A CONTRACT OF SALE B. Determinable: always generic a) Thing is capable of being made determinate Without the necessity of a new or further contract between the parties. Minimum requirement of potential existence: taking into consideration the state of science and technology at the time of perfection of the contract 4. If illicit. Determinate: particularly designated or physically segregated from all others of the same class. and CIVIL LAW REVIEWER 401 Page 149 of Object is a present thing which is the hope or expectancy . Voidable (civil code) – agent. ================================ C. SUBJECT MATTER OF SALE 1. always specific ii. Licit B. SPECIAL DISQUALIFICATIONS END OF DISCUSSION ON TOPIC B.2. SUBJECT MATTER OF SALE ================================ TOPICS UNDER THE SYLLABUS C. Requisites of a valid subject matter ========================================= Emptio rei speratae Sale of an expected thing Sale is subject to the condition.1. Requisites of a valid subject matter (Arts. sale of the hope itself Sale is effective even if the thing does not come into existence. Special Disqualifications ========================================= i. Whether the subject matter is of a type and nature that exists or could be made to exist to allow the seller reasonable certainty of being able to comply with his obligations ii. there is no contract Uncertainty is with regard to the quantity and quality of the thing and not the existence of the thing Object is a future thing Emptio spei Sale of a mere hope or expectancy that the thing will come to existence. 1459-1465) 2. that the thing will exist. REQUISITES OF A VALID SUBJECT MATTER Requisites: 1. Things A. Sale of future inheritance C. Particular kinds ========================================= b) TOPICS UNDER THE SYLLABUS C.

but the obligation to deliver the subject matter can only be complied with when the subject matter has been made determinate (either by physical segregation or particular designation) 1. 1462. Particular Kinds ========================================= TOPICS UNDER THE SYLLABUS D. 559) ========================================= 2. except: a. SUBJECT MATTER OF SALE ================================ D. 1506. OBLIGATIONS OF THE SELLER TO TRANSFER OWNERSHIP CIVIL LAW REVIEWER 401 Page 150 of . Sale is made in a merchant’s store in accordance with code of commerce and special laws. Sale by a person not the owner at the time of delivery ========================================= 2. buyer acquires no better title than seller had. OBLIGATION OF THE SELLER TO TRANSFER OWNERSHIP GENERAL RULE: Seller need not be the owner of the subject matter at the time of perfection: sufficient that he is the owner at the time of delivery. SUBJECT MATTER OF SALE 2. Existing goods – goods owned or possessed by the seller at the time of perfection 2. Owner by his conduct is precluded from denying seller’s authority (ESTOPPEL) 2. 1459). PARTICULAR KINDS GOODS THAT MAY BE THE OBJECTS OF SALE 1. Sale is made under statutory power of sale or under order of a court of competent jurisdiction 4. Service ========================================= TOPICS UNDER THE SYLLABUS C. 1505. But subject to ANTI-FENCING LAW TITLE AS TO MOVABLE PROPERTIES END OF DISCUSSION ON TOPIC C. Obligations of the Seller to Transfer Ownership 1. Future goods – goods to be manufactured. CAN NOT be ================================ TOPICS UNDER THE SYLLABUS D. raised or acquired by the seller after the perfection of the contract NOTES: • Quantity of subject matter is not essential for perfection. Sale by a person having a voidable title (Arts. must determine nature and quality of subject matter • Generic things may be the object of sale. EXCEPTIONS: 1. Exceptions 2.NOTE: Subject matter DETERMINED BY a 3rd PARTY. Rights – Must be transmissible. EXCEPTION: Foreclosure sale (mortgager must be absolute owner) RULES ON LEGAL EFFECTS OF SALE BY A NON-OWNER GENERAL RULE: Sale by non-owner. Contrary is provided for in recording laws (PD 1529) 3. OBLIGATIONS OF THE SELLER TO TRANSFER OWNERSHIP 1. Future inheritance b. Sale by a person not the owner at time of delivery (Arts.

MEANING OF PRICE PRICE – The sum stipulated as the equivalent of the thing sold and also every incident taken into consideration for the fixing of the price. (Test of intention) B. OBLIGATIONS OF THE SELLER TO TRANSFER OWNERSHIP 2. Meaning of price (Arts. Requisites for a valid price 3. there is every intention on the buyer to pay the price. 1474) 6. In money or its equivalent Consideration for a valid contract of sale can be the price and other valuable consideration. Price 1. 1470) 5. Inadequacy of price (Arts. Manner of payment must be agreed upon 7. Owner lost movable – owner can recover without reimbursing price 2. OBLIGATIONS OF THE SELLER TO TRANSFER OWNERSHIP 1. Real When at the perfection of the contract of sale. a true contract of sale must have price as part of its consideration (Test of value consideration) C. Set by third persons E. put to the debit of the vendee and agreed to by him. at the very least. 14691474) 2. When no price agreed (Art. REQUISITES FOR A VALID PRICE: A. PRICE 2. and every expectation on the part of the seller to receive such price as the value of the subject matter he obligates himself to deliver. Requisites for a Valid Price ========================================= END OF DISCUSSION ON TOPIC D. Movable is bought at public sale – owner can only recover after reimbursing price 2. PRICE ================================ ================================ TOPICS UNDER THE SYLLABUS E. Ascertainable: a. Sale by a person having a voidable title ======================================== ========================================= TOPICS UNDER THE SYLLABUS E. TOPICS UNDER THE SYLLABUS D. Certain or ascertainable i. Meaning of Price ========================================= 1. Certain: expressed and agreed in terms of specific pesos and/or centavos ii. 1482) CIVIL LAW REVIEWER 401 Page 151 of . Acquired in good faith and for value from auction ========================================= ========================================= TOPICS UNDER THE SYLLABUS E. Option money (Art. PRICE 1. Owner is unlawfully deprived – owner can recover w/o reimbursing price EXCEPTIONS TO THE EXCEPTIONS: 1. How price is determined 4.GENERAL RULE: Possession is equivalent to title REQUISITES: Possession of movable and Good Faith EXCEPTIONS: 1. 1355. Earnest money vs.

Rescission. Set by reference to another thing certain e. Set by the courts – in cases where the third person fixes the price in bad faith or by mistake c. PRICE CIVIL LAW REVIEWER 401 Page 152 of . or undue influence indicative of a defect in consent is present. a better price can be obtained. Inadequacy of price ========================================= 4.b. ========================================= EFFECT WHERE PRICE IS SIMULATED • The act may be shown to have been in reality a donation. then the buyer must pay a reasonable price (Article 1474) ========================================= TOPICS UNDER THE SYLLABUS E. INADEQUACY OF PRICE EFFECT OF GROSS INADEQUACY OF PRICE NOTE: Mere inadequacy of the price does not affect the validity of the sale. (3)Judicial sale. HOW PRICE IS DETERMINED d. PRICE 4. Specific performance or 2. particular exchange or market 3. as the sale is still considered perfected. where the inadequacy is shocking to the conscience of man and there is showing that in event of resale. But it is a cause for either: 1. ========================================= TOPICS UNDER THE SYLLABUS E. Set by reference to a definite day. no enforceable contract has arisen. the parties may not ask the court to fix the price because the condition imposed on the contract has not happened yet and thus. rd ========================================= TOPICS UNDER THE SYLLABUS E. or some other act or contract • If not and neither party had any intention whatsoever that the amount will be paid (absolutely simulated): the sale is void If there is a real price but what is stated in the contract is not the one intended to be paid (only relatively simulated): the contract of sale is valid but subject to reformation (false price) EFFECT OF NON-PAYMENT OF PRICE NOTE: Non-payment of price does not cancel sale. How price is determined ========================================= 3. (2)When it shows that the parties really intended a donation or some other act or contract. mistake. WHEN NO PRICE AGREED Note: If there was a failure of the contract to set a price but the BUYER has already APPROPRIATED IT. PRICE 5. When no price agreed ========================================= 5. except (1) When there is fraud. But never by one party to the contract (unless the price is accepted by the other party) Note: When the 3 party is unwilling to set the price.

must be restored 6. 1479) 2. [G. Manner of payment must be agreed upon ========================================= Money given as distinct consideration for an option contract Applies to a sale not perfected Not required to buy Part of the purchase price Given only when there is already a sale When given.2. 1403 (d)&(e)) ========================================= 7. EARNEST VS. 2006 ========================================= END OF DISCUSSION ON TOPIC E.1.3. No. 1475. OPTION MONEY EARNEST MONEY 1. PRICE TOPICS UNDER THE SYLLABUS E.4. January 27. 1475) 1. Acceptance is the proof that contract of sale exists 3. Mutual promise to buy and sell (Art. Preparatory (Art. 1325. Formalities of the contract (Art. 1319. Offer (Art. Perfection (Arts.R. PRICE 7. New concept: cannot be forfeited – part of purchase price. Preparatory ========================================= CIVIL LAW REVIEWER 401 Page 153 of . Old concept: subject to forfeiture when BUYER backs out 5. Right of first refusal 1. Earnest money vs. FORMATION OF CONTRACT OF SALE ================================ TOPICS UNDER THE SYLLABUS F. 1324) 1. 161524. 1479. FORMATION OF CONTRACT OF SALE 1. Formation of Contract of Sale 1. 1479) 1. buyer is bound to pay the balance 6. Presumption of perfection of contract of sale and such earnest money as part of purchase price is disputable OPTION MONEY DISTINGUISHED FROM EARNEST MONEY OPTION MONEY EARNEST MONEY TOPICS UNDER THE SYLLABUS F. Money given as part of purchase price 2.TOPICS UNDER THE SYLLABUS E. Qualification: if old concept is stipulated – VALID 7. Nothing in law prevents parties from treating earnest money differently 4. Option money ========================================= ================================ F. Option contract (Arts. PRICE 6. 1326) 3. MANNER OF PAYMENT MUST BE AGREED UPON Manner of payment must be agreed upon Marnelego v. Banco Filipino Savings and Mortgage Bank.

Commutative f. for a price certain (including manner of payment) c. Onerous e. or accepted unilateral offer to sell: i. Offer accepted absolutely Consideration in an option contract may be anything of value. Cojuangco) How EXERCISED: Notice of acceptance should be communicated to offeror without actual payment as long as there is delivery of payment in consummation stage ELEMENTS OF VALID OPTION CONTRACT a. Nominate c. Offer floated without period/without condition 5. acceptance is floated but they do not meet. unlike in sale where it must be price certain in money. liable to damage under Art 19.but can be attached to other principal contracts 1. or accepted unilateral offer to buy. B. to buy a certain object within an agreed period NOTE: There is no presumption of consideration. extinguished when period has ended and maybe withdrawn at will by unaccepted or unexercised contractual offer Characteristics of Option Contract a. Principal .1. Unilateral – versus contract of sale which is bilateral g. RULES: Prior to acceptance. Subject matter – an option right. separate and distinct b.a contract granting an exclusive right in one person. PREPARATORY 3 STAGES IN LIFE OF A CONTRACT OF SALE A. C. Perfection . (San Miguel Philippines v. Offer is floated 2. PREPARATORY I.concurrence of all requisites. Offer floated with a period d. Offer is floated 7. 21 of Civil Code Extinguished by happening/non-happening of condition Continues to be valid depending upon circumstances of time. Prestation – a consideration separate from purchase price for option given OPTION CONTRACT . the time when parties indicate their interest but no concurrence of offer and acceptance. 20. Offer is floated and there is counter-offer 6. Consent – meeting of the minds b. Consummation . right to withdraw must not be arbitrary otherwise. can not go back to original offer No authority of offeror to modify offer Proceed to perfected stage paid a separate consideration. for which he has CIVIL LAW REVIEWER 401 Page 154 of . place and person Original offer is destroyed. Not the contract of sale by itself. Preparatory 3. it needs to be proven OPTION. Offer floated w/ condition 4. there is a new offer. meeting of the minds. may be withdrawn at will by offeror Without acceptance. a determinate object ii. Policitacion/Negotiation Stage .offer is floated.parties perform their respective undertakings A.

Equatorial Dev’t v. Option contract is valid ii. When parties are face to face – when there is absolute acceptance of an offer that is certain 2. damages but not to specific performance because this is not an obligation to give b. FORMATION OF CONTRACT OF SALE 2. but option contract is void and not subject to rescission. stands on its own Needs separate consideration Subject matter and price must be valid Not conditional Not subject to specific performance Accessory. Without separate consideration i. OLD RULE . NEW RULE: Right of first refusal recognized as a valid offer RIGHT OF FIRST REFUSAL: 1. RFR becomes one of the considerations in the contract. be subject to OPTION CONTRACT DISTINGUISHED FROM RIGHT OF FIRST REFUSAL Option Contract Right of First Refusal Principal contract. not subject to specific performance because there is no contractual relationship here and it is not an obligation to give (not a real contract) 2. Subject to rescission.offer is still valid. and property sold to another buyer in bad faith. If RFR is violated. With separate consideration i. When the sale is subject to a suspensive condition – from the moment the condition is fulfilled The right of first refusal is only subject to specific performance insofar as it is attached to a valid written principal contract (e.SITUATIONS IN AN OPTION CONTRACT: a. PERFECTION OF SALES GENERAL RULE: A contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price. Offeror cannot withdraw offer until after expiry period iii. consensual contract EXCEPTION: When the sale is subject to a suspensive condition REQUIREMENTS: 1. damages ii.g. The price for the 3rd party buyer is to be the basis for the price of the sale back to the one with the RFR. [370 SCRA 56] Effect of new doctrine: turned the world of policitacion upside down because while valid option contract is not subject to specific performance. Perfection of Sales ========================================= 2. right of first refusal which does not even have a separate consideration may be subject to specific performance Recognizes recovery of damage based on abuse of rights doctrine CIVIL LAW REVIEWER 401 Page 155 of . the sale to the 3rd party buyer is rescissible. Creates a promise to enter into a contract of sale and it has no separate consideration. When thru correspondence or telegram – when the offeror receives or had knowledge of the acceptance 3. Mayfair Theater. lease). can not stand on its own Does not need separate consideration There must be subject matter but price not important Conditional Subject to specific performance ========================================= TOPICS UNDER THE SYLLABUS F. New doctrine: May specific performance.

b.R. Power to sell a piece of land granted to an agent – otherwise VOID CIVIL LAW REVIEWER 401 Page 156 of . No. Formalities of the Contract ========================================= EXCEPTIONS TO COVERAGE OF STATUTE IN SALES CONTRACTS: 1. at a price not less than P500. ========================================= TOPICS UNDER THE SYLLABUS F. Secuya v.NOTES: Qualified acceptance: mere counteroffer which needs to be absolutely accepted to give rise to perfected contract of sale Business ads are mere invitations to make an offer except when it appears to be otherwise Rules governing auction sales: 1. exception by specific provision of law. PARTIAL EXECUTION: When there has been partial performance/execution (seller delivers with intent to transfer title/receives price) 3. FORMATION OF CONTRACT OF SALE 3. FORMALITIES OF THE CONTRACT Form not important in validity of sale A. 2000] 3. and c. FAILURE TO OBJECT: When there has been failure to object to presentation of evidence (oral) 4. must also be registered with Municipal treasurer – otherwise VOID 3. chattels or things in action. WRITTEN: When there is a note or memorandum in writing and subscribed to by party or his agent (contains essential terms of the contract) 2. Sale Land: A sale of real property or of an interest therein. Sale being consensual. cause of action is granted to sue and compel other party to execute the document - When form is important for validity. February 22. E-COMMERCE: When sales are effected through electronic commerce While a sale of land appearing in a private deed is binding between the parties. 136021. 1. Sale of large cattle. may be oral or written. Seller has the right to bid at the auction provided such right was reserved and notice was given to that effect 2. Performed 1 Year: A sale agreement which by its terms is not to be performed within a year from the making thereof. 500 and Above: An agreement for the sale of goods. Vda. perfected by mere consent as to price and subject matter B. [G. Sale is perfected by the fall of the hammer 3. it cannot be considered binding on third persons if not embodied in a public instrument and recorded in the Registry of Deeds. De Selma. Sales of separate lots by auction are separate contracts of sale 2. Sale of land by non-Christian if not approved by Governor– VOID When form is important for enforceability [STATUTE OF FRAUDS Article 1403 (2)] a.00. If particular form is required under the statute of frauds: valid and binding between parties but not binding to 3rd persons Reason: purposes of convenience only and not for validity and enforceability.

Norkis Distributor v.1. October 5. Deliver – transfer ownership and deliver object 3. Warrant subject matter against eviction and hidden defects A. TRANSFER OF OWNERSHIP 1. Deliver fruits and accessories 4.can take several forms and may be any manner signifying an agreement that the possession is transferred from the vendor to the vendee. Manner of Transfer (Arts.when thing sold is placed in the control and possession of the buyer 2. Manner of Transfer ========================================= 3. WHEN DELIVERY DOES NOT TRANSFER TITLE ========================================= TOPICS UNDER THE SYLLABUS G. To transfer the ownership. FORMATION OF CONTRACT OF SALE 1. Accompanied by vendors duplicate certificate of title. Delivery of the Thing . CA. TRANSFER OF OWNERSHIP ================================ TOPICS UNDER THE SYLLABUS G.Transfer ownership (tradicion) covers twin obligations of the seller which are: 1. Transfer of Ownership 1. 1544) 5.END OF DISCUSSION ON TOPIC E. When delivery does not transfer title 3. 1496-1501) 2.2. OBLIGATIONS OF THE SELLER CIVIL LAW REVIEWER 401 Page 157 of . payment of capital gains tax. 1477. marks the consummation of the contract of sale. Actual or real . and documentary tax registration fees ========================================= B. Delivery of the thing together with the payment of the price. Property Registration Decree 5. Legal or Constructive. To deliver a determinate thing ================================ G. February 7. TRANSFER OF OWNERSHIP 2. [195 SCRA 694. [69 Phil 611. When Delivery does not transfer Title ========================================= 2. Different Kinds of Delivery ========================================= TOPICS UNDER THE SYLLABUS G. MANNER OF TRANSFER NOTE: Stage where parties both comply with their obligation. Preserve subject matter (proper diligence of a good father of a family unless law or parties stipulate another standard) 2. 1927] The act of delivery must be coupled with the intention of delivering the thing and putting the buyer under control. Requisites for registration of deed of sale in good faith 5. 1991] ========================================= TOPICS UNDER THE SYLLABUS G. PNB v. Double sales (Art. and 2. DIFFERENT KINDS OF DELIVERY Different Kinds of Delivery: 1. Kinds of delivery 4. 1. TRANSFER OF OWNERSHIP 3. Ling.

Santos v. Presumptive delivery through a public instrument can be negated by the failure of the vendee to take actual possession of the land or the continued enjoyment of possession by the vendor. it is necessary that the vendor have such control over the thing sold that. 5. the would be buyer was already in possession of the would be subject matter of sale (ex: as lessee) 3. Symbolic delivery As to movables – ex: delivery of the keys to a car 4. 3. when SELLER points to the property without need of actually delivering 2. [38 Phil. credits or incorporeal property. W HEN EXECUTION OF PUBLIC INSTRUMENT DOES NOT PRODUCE THE EFFECTS OF DELIVERY 1. made by: Placing titles of ownership in the hands of the buyer Allowing buyer to make use of rights 6.C. But to be effective. Quasi-tradition Delivery of rights. [366 SCRA 395] Fruits and Accessions/ Β. Constitutum possessarium When at the time of the perfection of the contract of sale. places and things) 2. execution does not produce effect of delivery When at the time of execution of instrument. Different forms of Constructive Delivery Constructive delivery has same legal effect as actual or physical delivery Gives rise only to a prima facie presumption of delivery which is destroyed when actual delivery is not effected because of a legal impediment. 4. Cruz 1. Delivery of Accessories Right to fruits and accessions/accessories accrue from time sale is perfected but no real right over it until it is delivered Χ. Felix. Ten Forty Realty v. EXCEPTIONS: a contrary intention appears or implied reservation of ownership under pars. he should have capacity to deliver at the time of execution of public instrument when he wants to effect actual delivery Such capacity should subsist for a reasonable time after execution of instrument (reasonable time depends on circumstances of persons. seller had possession of the subject matter in the concept of owner and pursuant to the contract. Traditio Longa Manu Delivery of thing by mere agreement. its material delivery could have been made. 404] The presumption of delivery when the sale is made through a public instrument can be rebutted by clear and convincing evidence. subject matter was not subject to control of the seller Subject matter should be within control of seller. Traditio Brevi Manu Before contract of sale. at the moment of sale. Tradition by operation of law The execution of a public instrument is equivalent to delivery. Addison v. Santos. When there is stipulation to contrary. Delivery Through Carrier GENERAL RULE: Where the seller is authorized or required to send the goods to the buyer. 1. 1503 CIVIL LAW REVIEWER 401 Page 158 of . delivery to the carrier is delivery to the buyer. seller continues to hold physical possession no longer in the concept of an owner but as a lessee or any other form of possession other than in the concept of owner.2. 3 of Art. • Α.

OBLIGATIONS OF BUYER 1.When goods delivered alongside the ship. there is delivery to the buyer ΙΙΙ. place and amount If payment of interest is stipulated – must pay. If no time is fixed. Seller’s place of business or his residence d.Shipment – when goods are delivered at ship at point of shipment. delivery to carrier by placing goods on vessel is delivery to buyer Destination – when goods reach the port even if not disembarked yet from the vessel. 1541. SALE DESCRIPTION/SAMPLE BY • 1. 1522. 1540. carrier is agent of the buyer. Follow stipulation in contact. Description – goods must correspond with description or sample 3. CIF – COST. or The buyer does not signify his rejection but retains the goods  3. EXCEPTION: When the contrary is stipulated such in the cases of: Γ. if amount of interest not mentioned – apply legal rate When buyer defaults – constitutes breach: subject to specific performance/rescission and damages. or b. FAST – FREE ALONG SIDE .Ι. At reasonable hour Ε. FOB . Effect if there is no compliance : RESCISSION may be availed of by the buyer See Arts. Sale on return – ownership passes to the buyer but he may re-vest ownership to the seller by returning the goods within time fixed. there is already delivery to the buyer (twin effects deemed fulfilled) ΙΙ. 1542. EFFECTS OF DELIVERY GENERAL RULE: The ownership of the thing sold shall be transferred to the buyer upon the actual or constructive delivery thereof. interest to be paid also from default o o CIVIL LAW REVIEWER 401 Page 159 of . Sale on acceptance/approval – ownership only passes to the buyer when:  The buyer signifies approval to the seller. or c. 1. 1543. Specific goods – place where the thing is e. Sample – goods must correspond with sample shown 2. there is already delivery to buyer.FREE ON BOARD . FREIGHT • When buyer pays for services of carrier – delivery to carrier is delivery to buyer. Pay the price o Buyer is obligated to pay price according to terms agreed upon regarding time. INSURANCE. ∆. Follow usage in trade. 1539. When buyer pays seller the price – from moment the vessel is at port of destination. Contract to sell 2. NOTE: Who Bears Expenses of Delivery? Seller Φ. within reasonable time. TIME AND PLACE OF DELIVERY a.

if none specified – at the time and place of delivery goods. [Jan. MOVABLE First to posses in good faith 2. He intimates to seller that he has accepted ii. Double Sale ========================================= 4. Two or more sales transactions must pertain to the same object or subject matter. Undisputably. No inscription and no possession in good faith – Person who presents oldest title in good faith 4. there is acceptance when: i. Good Faith . the priniciple of prior tempore. no need to return. 3. IMMOVABLE 1. Retains without intimating to seller that he has rejected 3. DOUBLE SALE GENERAL RULE: FIRST IN TIME. 17. Sale of Goods on installment 1. there was still no sale to as a second vendee. TRANSFER OF OWNERSHIP 4. No inscription. he is a purchaser in good faith because at the time he bought the real property. Where to accept: at time and place I. 2005] stipulated in the contract. absent contrary express stipulation. First to register in good faith 2. unless there is stipulation to the contrary ========================================= TOPICS UNDER THE SYLLABUS G. PRIORITY IN RIGHT When does it apply: when not all requisites embodied in Art. REQUISITES FOR DOUBLE SALES TO EXIST: (VOCS) 1. Two or more buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests. • If not all the elements are present for Art. who buys property without notice that another person has a right or interest in such property. 2. Two or more buyers must each have bought from the very same seller. When delivered and does any act inconsistent with ownership of seller iii. except when stipulated 2. shall be considered as depositary. one who has paid price before notice that another has claim or interest 4. Consolidated Rural Bank v. 1544 to apply. CIVIL LAW REVIEWER 401 Page 160 of . does not discharge seller from liability in case of breach of warranties (unless no notice or failure to give it within reasonable time) II. Two or more sales transactions must constitute valid sales. When buyer has a right to refuse goods. Goods must be delivered in full.2. RULES ACCORDING TO 1544: 1. Accept delivery of thing sold a. When not examined by buyer – not accepted until examined or at least had reasonable time to examine • Acceptance of goods in general. first to possess in good faith 3. potior jure or simply “he who is first in time is preferred in right” should apply. 1544 concur. and 4.

It is the entry made in the registry which records solemnly and permanently the right of ownership and other real rights. • Registered under 1544 applies Torrens system the condition is in the nature of a promise that it should happen. REGISTRATION: any entry made in the books of the registry. TRANSFER OF OWNERSHIP 4. To be entitled to priority. refuse to proceed with the contract b. RISK OF LOSS ================================ TOPICS UNDER THE SYLLABUS H. Outside of such situation – must apply to conflicting sales over the same unregistered parcel of land. but must have acted in good faith. annotation. 1493 and 1494) 4. proceed with the contract. Good faith must concur with registration. POSSESSION . PRIORITY IN RIGHT. General Rule (Arts. [GR 142403. Effect if buyer has already sold the goods GENERAL RULE: The unpaid seller’s right to lien or stoppage in transitu remains even if buyer has sold the goods EXCEPTION: • When the thereto. If sale 1 occurs when land is not yet registered and sale 2 is done when land is already registered – apply FIRST IN TIME. and even marginal notes. buyer merely steps into the shoes of the judgment debtor. the second purchaser must not only establish prior recording of his deed. the non-performance of such condition may be treated by the other party as breach of warranty. 1263. When loss occurred before perfection 3. Effect of Non-Fulfillment of Condition The other party may a. including both registration in its ordinary and strict sense. waiving the performance of the condition G. When loss occurred at time of perfection (Arts. Property Registration Decree ========================================= 4. TRANSFER OF OWNERSHIP ================================ H. and cancellation. Gabriel v. 1189) 2. Mabanta.If III. ADVERSE CLAIM – notice that somebody is claiming better right V. PROPERTY REGISTRATION DECREE END OF DISCUSSION ON TOPIC G.Both actual or constructive VI. LIS PENDENS – notice that subject matter is in litigation IV. or • seller has given consent When the buyer is a purchaser in good faith for value of a negotiable document of title. 2003] CONDITION 1. When loss occurred after perfection but before delivery CIVIL LAW REVIEWER 401 Page 161 of . 2. • Not registered under the system 1544 still applies Torrens ========================================= TOPICS UNDER THE SYLLABUS If 2nd sale is a judicial sale (by way of levy on execution). March 26. Risk of Loss 1.

1636) 2. Purpose of documents of title 3. Non-negotiable documents of title 5.5. 4. DOCUMENTS OF TITLE ================================ TOPICS UNDER THE SYLLABUS I. 1514. • If Subject matter is GENERIC. 1516) 6. 1519. AFTER DELIVERY • Res perit domino • Delivery extinguishes ownership visa-vis the seller and creates a new one in favor of the buyer 1. 1520) ========================================= WHO BEARS RISK DETERIORATION/ FRUITS: 1. END OF DISCUSSION ON TOPIC H. AFTER PERFECTION DELIVERY BUT BEFORE • Loss – confused state • Paras: BUYER • Tolentino: SELLER TOPICS UNDER THE SYLLABUS H. Simply replace item. Definition ========================================= • CIVIL LAW REVIEWER 401 Page 162 of . TOPICS UNDER THE SYLLABUS I. Definition (Art. the risk of loss deterioration and the benefits of fruits and improvements. BEFORE PERFECTION • • OF LOSS/ Res perit domino Owner is seller so seller bears risk of loss 2. Warranties of seller of documents of title (Art. Documents of Title 1. DOCUMENTS OF TITLE 1. RISK OF LOSS ========================================= • Deterioration and fruits . When ownership is transferred (Art. AT PERFECTION • • Res perit domino Contract is merely inefficacious because loss of the subject matter does not affect the validity of the sale Seller cannot anymore comply with obligation so buyer cannot anymore be compelled.Buyer bears loss. were fro the account of the buyer. Negotiable documents of title 4. 1504) ========================================= 3. Rules on levy/garnishment of goods (Arts. RISK OF LOSS ================================ I. GENERAL RULE • Legal consequences from point of perfection are the same in both legal systems: upon perfection of an unconditional contract of sale involving specific or determinate subject matter.

1. Not creation of law but by merchants to allow them to deal with merchandise without having to physically carry them around 2. Pertains to specific type of movables only: GOODS a. Documents of title serve two (2) functions: i. Evidence possession therein of of existence and goods described

Even if face of instrument says NONNEGOTIABLE, it is still NEGOTIABLE; limiting words does not destroy negotiability. If order instrument and no endorsement was made – equivalent to assignment =========================================

TOPICS UNDER THE SYLLABUS I. DOCUMENTS OF TITLE 4. Non-negotiable documents of title


Medium by which seller is able to transfer possession of goods

3. A document of title which states that the goods referred to therein will be delivered to the bearer, or to the order of any person named in such document 4. Negotiable by delivery or indorsement =========================================




TOPICS UNDER THE SYLLABUS I. DOCUMENTS OF TITLE 2. Purpose of documents of title

Effects of Unauthorized Negotiation The validity of the negotiation of a negotiable document is not impaired by the fact that negotiation was done in breach of duty or that the owner of the document was deprived of the same by loss, theft, accident, fraud, mistake if the person to whom the document is delivered is in good faith and without notice of the said irregularities. Important Considerations 1. Negotiation gives better assignment 2.




TOPICS UNDER THE SYLLABUS I. DOCUMENTS OF TITLE 3. Negotiable documents of title
========================================= 3.

Assignee takes document with defects of the assignor Obligation of bailee – bailee immediately bound to the document is


TOPICS UNDER THE SYLLABUS I. DOCUMENTS OF TITLE 5. Warranties of seller of documents of title
========================================= Warranties on Negotiation

1. Deliver to bearer (negotiation by mere delivery) Deliver to specific person or his order (negotiation by endorsement + delivery)



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1. The document is genuine 2. He has legal transfer it right to negotiate or

Transferor/holder acquires title to goods Bailee has direct obligation to holder as if directly dealt with him

Acquires title to goods against transferor Acquires right to notify bailee so that he acquires obligation of bailee to hold goods for him

3. He has knowledge of no fact which would impair the validity or worth of the document 4. He has right to transfer title to goods and goods are merchantable/fit =========================================

TOPICS UNDER THE SYLLABUS I. DOCUMENTS OF TITLE 6. Rules on Levy or Garnishment of Goods

A. SALE BY NON-OWNER OR BY ONE HAVINGVOIDABLE TITLE 1. PERFECTION STAGE a. Sale by owner – VALID b. Sale by non-owner – VALID; c. Reason why both sales are valid: ownership is necessary only at time when transfer title to goods; at perfection stage, no obligation on part of seller to transfer ownership d. Law on estoppel further bolsters it: title passes by operation of law to grantee when person who is not owner of the goods sold delivers it and later on acquires title thereto e. Since valid, action to annul improper; there is already perfected contract 2. CONSUMMATION STAGE a. Contract of sale is valid because it has passed perfected stage, despite seller not being the owner or seller having no authority to sell b. What is void is the transfer of title/ ownership did not pass c. Effect: buyer acquired no better right than transferor d. Legal effect: CAVEAT BUYER BEWARE EMPTOR – is a

6. Rules of Levy/Garnishment of Goods Covered by Documents of Title
• NON NEGOTIABLE: o Notification is operative act to transfer title/possession of goods in favor assignee Before notification – can still be garnished


NEGOTIABLE: o Cannot be levied or garnished when documents are already with purchaser in good faith, unless: Document is first surrendered Document is pounded by court Negotiation is enjoined ASSIGNMENT

o o o



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e. Sale of co-owner of whole property or definite portion GENERAL RULE:  Co-owner sells whole property prior to partition – sale of property itself is void but valid as to his spiritual share  Co-owner sells definite portion to partition – sale is void as to other co-owner but valid as to his spiritual share if the buyer would have still bought such spiritual share had he known that the definite portion sold would not be acquired by him.

TOPICS UNDER THE SYLLABUS J. Remedies of an Unpaid Seller 1. Definition of unpaid seller (Art. 1525) 2. Remedies of unpaid seller

EXCEPTIONS TO THE RULE ON THE EFFECT OF SALE OF A DEFINITE PORTION BY A COOWNER 1. Subject matter is indivisible in nature or by intent; 2. Sale of a particular portion of a property is with consent of other co-owners; 3. Co-owner sells 1 of 2 commonly-owned lands and does not turn over ½ of the proceeds, other co-owner, by law and equity, has exclusive claim over remaining land. B. SALE BY SELLER WITH VOIDABLE TITLE IN GOOD FAITH and WITHOUT NOTICE OF THE DEFECT 1. PERFECTION STAGE a. Valid sale – buyer acquires title of goods 2. CONSUMMATION STAGE o Valid sale – if title has not yet been avoided, buyer buys goods under following condition: • • • in good faith for value REQUISITES: 1. Subject matter – goods 2. Seller is unpaid – not completely paid or received negotiable instrument under a condition and condition has been breached by reason of dishonor 3. Physical possession is with seller =========================================

J. REMEDIES OF UNPAID SELLER 1. Definition of unpaid seller

GENERAL RULE: Any man may not take law in his own hands, must seek remedy through courts. EXCEPTION: • DOCTRINE OF SELF HELP • SPECIAL REMEDIES

without notice of seller’s defect of title

J. REMEDIES OF UNPAID SELLER 2. Remedies of unpaid seller





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The following are the special remedies of unpaid seller: 1. Possessory lien 2. Stoppage in transitu 3. Special right of re-sale 4. Special right to rescind NOTE: Hierarchical Application - only when unpaid seller has exercised possessory lien or stoppage in transitu can the seller proceed with his other special rights of resale or to rescind. Possessory Lien 1. Seller not bound to deliver if buyer has not paid him the price 2. Right to retain; cannot be availed when seller does not have custody 3. Exercisable only circumstances:

• G oods are in transit • Requisites when goods are in transit 1. From the time goods are delivered to carrier for purpose of transmission to buyer 2. Goods rejected by buyer and carrier continues to possess them When goods no longer in transit 1. Reached point of destination 2. Before reaching destination, buyer obtains delivery of the goods 3. Goods are supposed to have been delivered to buyer but carrier refused 4. Shown by seller that buyer is insolvent (failure to pay when debts become due) How is right exercised 1. Obtain actual possession of goods 2. Give notice of claim to carrier / bailee in possession thereof 3. Notice by seller to buyer is not required; notice to carrier is essential



goods sold without stipulation as to credit goods sold on credit but term of credit has expired buyer becomes insolvent When part of goods delivered, may still exercise right on goods undelivered


c. d.

Instances when possessory lien lost: 1. seller delivers goods to carrier for transmission to buyer without reserving ownership in goods or right to possess them 2. buyer or his agent lawfully possession of goods 3. Waiver 4. loses lien when he parts with goods (still has stoppage in transitu) 5. notice by seller to buyer not essential Stoppage In Transitu obtains

III. Special Right to Resell the Goods 1. Goods are perishable 2. stipulated the right of resale in case buyer defaults in payment 3. Buyer in default for unreasonable time 4. Notice by seller to buyer not essential Why special? There are things which seller cannot do in ordinary sale:


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A. ownership is with buyer but seller can sell goods B. title accorded to buyer is destroyed even without court intervention Special Right to Rescind 1. Expressly stipulated 2. Buyer is in default for unreasonable time 3. Notice needed to be given by seller to buyer


A. MOVABLES a. Delivery of thing plus accessories and accessions in the condition in which they were upon the perfection of the contract including the fruits b. When the seller delivers to the buyer a quantity of goods LESS than he contracted to sell, buyer has the option to reject or accept it. a.When accepts with knowledge that seller is not going to perform contract in full, he must pay at price stipulated b. When accepts and consumes before knowledge that buyer will not perform contract in full, liable only for fair value of goods delivered

Why special – ownership of goods already with buyer but seller may still rescind; ownership is destroyed even without court intervention but in ordinary sale, need to go to court to destroy transfer of ownership Remedies of Buyer When Seller fails to deliver, buyer may seek SPECIFIC PERFORMANCE WITHOUT GIVING SELLER OPTION TO RETAIN GOODS ON PAYMENT OF DAMAGES



TOPICS UNDER THE SYLLABUS K. Performance of Contract 1. Delivery of thing sold (1) Sale of movables (Arts. 1522, 1537, 1480) (2) Sale of immovables (Arts. 1539, 1543) (3) Inspections and Acceptance 2. Payment of price

When seller delivers to the buyer a quantity of goods LARGER than he contracted to sell the buyer has the following options:

i. Accept per contract and reject

the rest
ii. Accept the whole – pay price

iii. Eject whole if subject matter is

d. When the seller delivers to

the buyer the goods he contracted to sell, MIXED with goods of a different description not included in


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the contract, buyer has 2 options:

ii. If Less in area: • Rescission • Proportional reduction of price: LACK IN AREA SHLD NOT BE LESS THAN 1/10 OF AREA AGREED UPON iii. If Greater in area:  Accept per stipulation and reject the rest  Accept whole area – pay at contract rate  Not applicable to judicial sales iv. Sold for lump sum • When price indicated per unit not

Accept good w/c are in accordance with contract and reject the rest goods indivisible entirely – if

ii. Reject

Obligations of a Vendor (Art. 1537) 1. To deliver the subject matter 2. To deliver the fruits and accessories  Those which pertains to the vendee from the day on the perfection of contract

3. To preserve the subject matter  In the condition in which they were upon the perfection of the contract.

Article 1480. Any injury to or benefit from the thing sold, after the contract has been perfected, from the moment of the perfection of the contract to the time of delivery, shall be governed by articles 1163 to 1165, and 1262. This rule shall apply to the sale of fungible things, made independently and for a single price, or without consideration of their weight, number, or measure. Should fungible things be sold for a price fixed according to weight, number, or measure, the risk shall not be imputed to the vendee until they have been weighed, counted, or measured and delivered, unless the latter has incurred in delay. B. IMMOVABLES
o Sold per unit or number •

If area delivered is either greater or lesser – price will not be adjusted accordingly

The actions arising from above in delivery of immovables shall prescribe in six months, counted from the day of delivery.

C. INSPECTIONS AND ACCEPTANCE Accept delivery of thing sold • Where to accept: at time and place stipulated in the contract; if none specified – at the time and place of delivery goods; There is acceptance when: He intimates to seller that he has accepted When delivered and does any act inconsistent with ownership of seller


If the sale should be made with statement of its area, rate at certain price, deliver all that may have been stated in the contract if impossible, remedies of buyer:


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Retains without intimating to seller that he has rejected




I. Condition 1. When a contract contains a condition, the non happening of which would not constitute a breach but extinguishes the obligation 2. However, if party to the sales contract has promised that the condition should happen or be performed, the non-performance of which may be treated by parties as breach II. Warranties A statement or representation made by the seller contemporaneously and as a part of the contract of sale, having reference to the character, quality, or title of the goods, and by which he promises or undertakes to insure that certain facts are or shall be as he then represents Express Warranties REQUISITES: 1. It must be an affirmation of fact or any promise by seller relating to the subject matter of sale 2. Natural tendency of affirmation or promise is to induce buyer to purchase subject matter 3. Buyer purchases relying thereon 4. When breached, damages the subject matter

• Buyer is obligated to pay price according to terms agreed upon regarding time, place and amount • If payment of interest is stipulated – must pay; if amount of interest not mentioned – apply legal rate

When buyer defaults – constitutes breach: subject to specific performance/rescission and damages; interest to be paid also from default



TOPICS UNDER THE SYLLABUS L. Warranties 1. Express warranties 2. Implied warranties (Art. 1547) 3. Effects of warranties 4. Effects of waivers 5. Buyer’s options in case of breach of warranty (Art. 1599)






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To enforce vendor’s liability for eviction (VICED). and Damages and interests if the sale was in bad faith 3. auctioneer. by operation of law 1. unless provision appears in contract contrary aa When ownership is transferred. Warranty that seller has a right to sell • Partial Eviction 1. Warranty against eviction aa Implied. mortgagee. No appeal needed nor a need for buyer to resist eviction for right to accrue.========================================= alue of the thing at the time of eviction. judgment debtor responsible for eviction unless otherwise decreed in judgment d. Immovable sold is encumbered with non– apparent burden or servitude not mentioned in the agreement aa Buyer is evicted in whole or in part from the subject matter of sale There is a final judgment Basis of eviction is a right prior to sale or an act imputable to vendor Seller has been summoned in the suit for eviction at the instance of buyer. Rights of buyer when deprived of only part of the subject matter but would not have bought such part if not in relation for the whole: 1. V TOPICS UNDER THE SYLLABUS L. To demand rescission of contract. 4. Vendor not liable for eviction if adverse possession had been commenced before sale but prescriptive period is completed after transfer e. whether they were intended or not. Warranty cannot be enforced aforementioned requisites concur until Refers to consummation stage since in consummation stage. 2. it is enough that the aforementioned requisites are complied with b. WARRANTIES 2. Applies to judicial sale. 1. it is where ownership is transferred by tradition Not applicable to sheriff. 2. a. pledge • 2. 5. Warranty against encumbrances (nonapparent) REQUISITES: a. Income or fruits if he has been ordered to deliver the to the party who won the suit Cost of the suit Expenses of the contract. Implied Warranties Deemed included in all contracts of sale whether parties are actually aware or not. or made 3rd party defendant through 3rd party complaint brought by buyer • • • Vendor’s liability shall consists of (Total Eviction) (VICED) CIVIL LAW REVIEWER 401 Page 170 of . Rescission 2. Mutual restitution 3. Implied warranties ========================================= 2. buyer shall enjoy the legal and peaceful possession of the thing Requisites of warranty against eviction: • breach of c.

Warranty not applicable when non– apparent burden or servitude is recorded in the Registry of Property – unless there is express warranty that the thing is free from all burdens and encumbrances δ. 5. only one is prohibited and not the others Exception: when it appears buyer would not have purchased the team without the defective one Apply to sale of other things • • Animals at fair or public auction • No warranty against hidden defects ε. φ. nature of hidden defect is such that it should render the subject matter unfit for the use of which it was intended or should diminish its fitness 3. χ. Void if use / service for which they are acquired has been stated in the contract and they are found to be unfit therefor CIVIL LAW REVIEWER 401 Page 171 of . χ.seller should return price and interest and refund expenses (no damages) Buyer may elect between withdrawing from contract or demanding proportionate reduction of price with damages in either case Applicable to judicial sale except that judgment debtor not liable for damages Action to prescribe 6 months delivery of subject matter from ε. 4. β. had the buyer been aware. Seller is not aware . he would not have acquired it or would have given a lower price α. γ. When breach of warranty exist: buyer may ask for rescission of indemnity d. Defects on animals Even in the case of professional inspection but hidden defect is of such nature that expert knowledge is not sufficient to discover it . When defect is visible or even if not visible but buyer is an expert by reason of his trade or profession.b. patent α.defect shall be considered as REDHIBITORY If vet fails to discover through ignorance or bad faith. he is liable for damages Sale of animals on teams (2 or more) • • β. Sale of animals with contagious disease is void Sale of unfit animals • φ. caveat emptor Except when hidden 1. When only one is defective. Warranty against hidden defects • SELLER does not warrant defect. subject matter may be movable or immovable 2. Nature of non–apparent servitude or burden is such that it must be presumed that the buyer would not have acquired it had he been aware thereof c. seller is not liable Obligation of seller for breach depends on whether he has knowledge of such defect or not Seller is aware – seller should return price and refund expenses of contract with damages δ.

but effect depends on good faith or bad faith on the part of the seller. WARRANTIES 3. Waiver to a specific case of eviction wipes out warranty as to that specific risk but not as to eviction caused by other reasons. measure of damage: difference between value of goods at time of delivery and value they would have had if they had answered to the warranty ========================================= 4. Buyer makes known to seller the particular purpose for which goods are acquired and it appears that the buyer relied on the seller’s skill or judgment 2. If seller not aware of hidden defects – loss of the thing due to such defect will not make seller liable o o SALE OF GOODS BY SAMPLE If seller is a dealer in goods of that kind. no warranty unless there is a stipulation to the contrary 4. EFFECTS OF WARRANTIES ========================================= • TOPICS UNDER THE SYLLABUS L. made general renunciation of warranty – not waiver but merely limits liability of seller in case of eviction (pay value of subject matter at time of eviction) Buyer with knowledge of risk of eviction assumed its consequences and made a waiver – vendor not liable (applicable only to waiver of warranty against eviction) 1. o Seller in bad faith and there is waiver against eviction – null and void Buyer without knowledge of a particular risk. buyer shall answer for injury / loss due to his fault Buyer may elect between withdrawing from sale and demanding proportionate reduction of price with damages in either case L. Effects of warranties ========================================= • 3. WARRANTIES 4.• Prescription of action: 40 days from date of delivery to buyer If sale is rescinded. Waiver against Hidden Defects i. Effects of waivers Specific Implied Warranties in the Sale of Goods A. Goods are bought by description from seller who deals in goods of that description 3. animals to be returned in same condition when they were acquired. EFFECTS OF WAIVER Waiver in Warranty against eviction Parties may increase or diminish implied warranty against eviction. there is an implied warranty that the goods shall be free from defect rendering them unmerchantable which would not be apparent on reasonable examination of the sample ========================================= TOPICS UNDER THE SYLLABUS CIVIL LAW REVIEWER 401 Page 172 of . Warranty as to fitness and quality. requisites: 1. in case of sale of specified article under its patent or trade name. If there has been a stipulation exempting seller from hidden defects ii.

24 (2)Maceda Law: sale of immovables on Installment 2. Refuse to accept goods and maintain action against seller for damages 4. When is the law applicable? Sale on movables by installment o Sale on installment: payment by several partial payments in small amount CIVIL LAW REVIEWER 401 Page 173 of . When rescission by buyer not allowed: 1. Accept goods and set up breach of warranty by way of recoupment in diminution or extinction of the price. 3. thus seller still liable Buyer’s Option Warranty in Case of Breach of 4. sec. 1636. RECTO LAW: SALE OF MOVABLES ON INSTALLMENT Incidents: 1. Foreclose on chattel mortgage if buyer fails to pay 2 or more installments ========================================= TOPICS UNDER THE SYLLABUS M. 1594) (1) Sale of movables 2. Rescind contract of sale and refuse to receive goods/return them when already received. Remedies of the seller (Arts.iii. BREACH OF CONTRACT ================================ TOPICS UNDER THE SYLLABUS M. 1484-1486) 3. If he fails to return or offer to return the goods in substantially as good condition as they were in at the time of the transfer of ownership to him TOPICS UNDER THE SYLLABUS M. Remedies of the seller ========================================= 1. no further action against buyer to recover any unpaid balance of the price 2. REMEDIES OF THE SELLER Remedies of Unpaid Seller (Art. 23. BREACH OF CONTRACT 2. BREACH OF CONTRACT 1. Cancel the sale if buyer fails to pay 2 or more installments. Accept goods and maintain action against seller for damages 3. Breach of Contract 1. If seller aware – waiver is in bad faith. Exact fulfillment should the buyer fail to pay. Remedies of the Buyer (1) Sale of movable (2) Sale of immovables ========================================= 1. 2. Recto Law: sale of movables on installment (Arts. Recto Law: Sale of Movables on Installment ========================================= END OF DISCUSSION ON TOPIC L. WARRANTIES ================================ M. If buyer chooses foreclosure. If the buyer accepted the goods knowing the breach of warranty WITHOUT protest 2. 2. If he fails to notify the seller within a reasonable time of his election to rescind 3. 1484) 1. Sale of immovables (1) PD 957.

Sale to tenants under agrarian laws Rescission 1. 1484. SALE OF IMMOVABLES Remedies of Seller Anticipatory breach 1. Exception: mortgagor refuses to deliver property to effect foreclosure. Extent of barring effect: purchase price iii. rescission may be pursued • The fact that the seller did not foreclose the chattel mortgage constituted on the movable purchased on credit. Deemed chosen when: Notice of rescission is sent Takes possession of subject matter of sale Files action for rescission Barring effect on recovery of balance Foreclosure i. does not amount to a foreclosure of the chattel mortgage to be covered by Art. Seller has reasonable grounds to fear loss of immovable sold and its price. Tajanglangit v. Sale of Immovables ========================================= Coverage: sale and financing transaction and contracts of lease with option to purchase GENERAL RULE: If already chose specific performance. Barring effect on recovery of balance ii. 606] 3. But stipulations that installments paid are forfeited are valid if not unconscionable 3. Commercial c. Non–payment of price. Remedies of the Buyer ========================================= 4. Coverage: REAL ESTATE – defined space vs. REMEDIES OF THE BUYER CIVIL LAW REVIEWER 401 Page 174 of . BREACH OF CONTRACT 3. but opted specific performance. applies to COS and CTS and Financing 2. with a plea for a writ of replevin. Excluded: a. there is correlative obligation to restitute 2. Industrial b. Southern Motors. sue for RESCISSION 2.Rationale of the law: Buyer is lulled into thinking that he could afford because of small amounts per installment and at the same time remedy abuse of commercial houses Nature of cumulative remedies: alternative and not TOPICS UNDER THE SYLLABUS M. When chosen. CONDO – not defined space (w/ common areas) 1. can no longer choose other remedies EXCEPTION: After choosing. sue for RESCISSION IMMOVABLES (BY INSTALLMENT) Art 1592 – Applies only to contract of sale MACEDA LAW 1. BREACH OF CONTRACT 3. recover also expenses incurred in attorneys fees. [101 Phil. (Perverse Buyer-Mortgagor) ========================================= ========================= ================ TOPICS UNDER THE SYLLABUS M. etc. it has become impossible.

can cancel.cancelled. a. 2nd grace period of 30 days from notice of cancellation/demand for rescission  buyer can still pay within the 30 day period  with interest  No payment after 30 day period. burden to sue shifts to party who does not like rescission b. Forfeiture of amounts valid being in nature of penal clause 1. Cancellation to be effected 30 days from notice and upon payment of cash surrender value o Buyer paid installment st Other rights: o Sell rights to another o Reinstate contract by updating during grace period and before actual cancellation Deed of Sale to be done by notarial act To pay in advance any installment or the full balance of price anytime without interest Have full payment certificate of title annotated in o o o less than 2 years REMEDY OF RESCISSION IN CONTRACTS COVERING IMMOVABLES (Articles 1191 & 1592) GENERAL RULE: Judicial EXCEPTION: Extra judicial Rescission allowed but SUBJECT to COURT Confirmation. When no payment . CIVIL LAW REVIEWER 401 Page 175 of . suspend payment. • If real estate developer fails to comply with obligation according to approved plan: RESCIND SUSPEND PAYMENT COMPLIES UNTIL SELLER Purpose of law .Protect buyers in installments against oppressive conditions Notice needed oppressive waiver thereof if Applies to contracts even before law was enacted − Stipulation to contrary is void Rights Granted to Buyers: o Buyer paid at least 2 years installment 1. court still has final say as to propriety of rescission c. 5% for every year but not to exceed 90% of total payments made 4. buyer entitled to 50% of what he has paid + if after 5 years of installments. Pay without interest the balance within grace period of 1 month for every year of installment payment 2. 1 Grace period is 60 days from date installment became due 2. Grace to be exercised once every 5 years 3. allowed if stipulated.• In case of subdivision or condo projects.

EXTINGUISHMENT OF SALE 2. END OF DISCUSSION ON TOPIC M. Legal redemption (Art. GROUNDS (same grounds whereby obligations in general are extinguished) e. 1231) 2. EXTINGUISHMENT OF SALE ================================ TOPICS UNDER THE SYLLABUS N. Distinguish from option to buy (Art. Expenses of contract. 8. CAUSES I. BREACH OF CONTRACT ================================ N. Causes (Arts. 2. expenses d. The necessary and useful made on the thing sold 1. Other legitimate payments. 1619) ========================================= 10. law on rescission applies when there is substantial breach. The price of the sale. 7. CONVENTIONAL REDEMPTION • Only extinguishes obligations pertaining to contract of sale. 1619) 8. b. Conventional redemption (Art. 3. EXTINGUISHMENT OF SALE 1. 6. Causes ========================================= a. Period of redemption (Art. not extinguish contract itself. only applies to contract of sale • The right which the vendor reserves to himself to reacquire the property sold provided he returns to the vendee: TOPICS UNDER THE SYLLABUS N. And fulfills other stipulations which may have been agreed upon CIVIL LAW REVIEWER 401 Page 176 of . Age redemption (Art. 4. 16021604) 4. 1602) 5. Maceda law applies. Exception: If subject matter is residential lots. Payment or performance Loss of the subject matter Condonation or remission Confusion or merger of rights of creditor and debtor Compensation Novation Annulment Rescission Fulfillment of a resolutory condition • Contract to Sell – Rescission not Applicable Non–payment of purchase price would automatically cancel even without further action for rescission • 5. 1601) 3. c. Exercise of the right to redeem (Art. Extinguishment of Sale 1. 1606) 6. Prescription ========================= ================ TOPICS UNDER THE SYLLABUS N. Conventional Redemption ========================================= 2. 1616) 7.• Contract of Applicable Sale – Rescission is 1. 9. Equitable mortgage (Arts. 1600.

or other requisites prescribed by law for a mortgage.• The right is exercised only be seller in whom right is recognized in the contract or by any person to whom right was transferred. DISTINGUISH FROM OPTION TO BUY OPTION TO PURCHASE . Seller remains in possession as lessee or otherwise c. The real intention of parties is that the pretended purchase price is money loaned and to secure payment of the loan. EQUITABLE MORTGAGE One which lacks the proper formalities. [208 SCRA 496] 1. EXTINGUISHMENT OF SALE 3.Right to repurchase the thing sold granted to the vendor in a separate instrument from the deed of sale d. Circumvention of usury law b. the sale shall be construed as an equitable mortgage. EXTINGUISHMENT OF SALE CIVIL LAW REVIEWER 401 Page 177 of . 2. Cachola v. Seller binds himself to pay taxes on thing sold f. Language of the contract b. Rationale behind provision on Equitable Mortgage: a. Conduct of parties – to reveal real intent 3. Upon or after expiration of right to repurchase. Remedy available to reformation of contract vendor: ask for ========================= ================ TOPICS UNDER THE SYLLABUS N. sale with pacto de retro is drawn up ========================= ================ TOPICS UNDER THE SYLLABUS N. another instrument extending the period of redemption or granting new period is executed 4. form of words. must be in the same contract NOTE: In case of doubt – in determining whether it is an equitable mortgage or a sale a retro. remedy here is foreclosure. but shows the intention of the parties to make the property subject of the contract as security for a debt and contains nothing impossible contrary to law. Price of sale with right to repurchase is unusually inadequate b. EXTINGUISHMENT OF SALE 4. A contract with right to repurchase is deemed to be an equitable mortgage if the following requisites concur (IPERTI): a. Real intention of parties is to secure the payment of a debt or performance of other obligation ========================= ================ TOPICS UNDER THE SYLLABUS N. CA. What to Look for in Determining Nature of Contract a. Circumvention of prohibition against pactum commissorium – creditor cannot appropriate the things given by way of pledge or mortgage. Buyer retains for himself a part of the purchase price e. Equitable Mortgage ========================================= 3. Distinguish from option to buy ========================================= 4.

Period agreed upon – should not exceed 10 years.R. d. April 27. Exercise of the Right to Redeem ========================================= 5. G. EXTINGUISHMENT OF SALE 6. Period of Redemption ========================================= TOPICS UNDER THE SYLLABUS N. When an undivided thing is sold because co-owners cannot agree that it be allotted to one of them – vendee a retro may compel the vendor to redeem the whole thing 2. vendors a retro may only exercise his right over his ========================= ================ CIVIL LAW REVIEWER 401 Page 178 of . and because of such belief he had not redeemed within the proper period. if it exceeded. Example: Where a buyer a retro honestly believed that he entered merely into an equitable mortgage. Paez v. valid only for the first 10 years. but is not in itself a payment that relieves the vendor from his liability to pay the redemption price. not a pacto de retro transaction. 1949 IN CASE OF MULTI-PARTIES 1. HOW IS REDEMPTION EFFECTED Seller a retro must first pay the following: o o The price of the thing sold Expenses of the contract and other legitimate payments made by reason of the sale Necessary and useful expenses made on the thing sold Valid tender of payment is sufficient Mere sending of notice without valid tender is insufficient Failure to pay useful and unnecessary expenses entitles vendee to retain land unless actual reimbursement is made o o o o NOTE: When period has expired and seller allowed the period of redemption to expire – seller is at fault for not having exercised his rights so should not be granted a new period Tender of payment is SUFFICIENT to compel redemption. not to cases where the transaction is conclusively a pacto de retro sale. When an undivided thing is sold by coowners / co-heirs. f. :792. PERIOD OF REDEMPTION a. c. No. No period agreed upon – 4 years from date of contract b. Rationale: no redemption due to erroneous belief that it is equitable mortgage which can be extinguished by paying the loan. When period to redeem has expired and there has been a previous suit on the nature of the contract – seller still has 30 days from final judgment on the basis that contract was a sale with pacto de retro: EFFECT WHEN THERE IS NO REDEMPTION MADE i. Jurisprudence before the NCC: buyer a retro automatically acquires full ownership Under present art 1607: there must be judicial order before ownership of real property is consolidated in the buyer a retro ii. e. Magno.5. This refers to cases involving a transaction where one of the parties contests or denies that the true agreement is one of sale with the right to repurchase.

if 2 or more co-owners desire to exercise right of redemption. • The right to be subrogated upon the same terms and conditions stipulated in the contract. Legal Redemption ========================================= 7. any co-owner may exercise right of redemption by paying reasonable price of property to the buyer iii. No rescission because no sale exists yet 3. The action is directed against prospective seller REDEMPTION Arises after sale There can be rescission of the original sale Action is directed against buyer ========================= ================ TOPICS UNDER THE SYLLABUS N. iii. • Types of Legal Redemption: a. If none: a. in the place of one who acquires the thing by (1) purchase OR (2) by dation in payment OR (3) by other transaction whereby ownership is transmitted by onerous title. Among co-heirs i. When rights of co-owners over an undivided thing is sold as regards to their own share – vendee retro cannot compel one to redeem the whole property 4. Arises before sale 2.respective share. Co-heirs has 1 month from receipt of notice in writing b. they may only do so in proportion to the share CIVIL LAW REVIEWER 401 Page 179 of . vendee a retro may demand that they must come to an agreement first and may not be compelled to consent to a partial redemption 3. At time of execution of the sale a retro there are visible or growing fruits – there shall be no pro-rating at time of redemption if no indemnity was paid by the vendee a retro b. Any of the heirs sell his hereditary rights to stranger before partition Any of the co-heirs may be subrogated to the rights of the purchaser by redeeming said hereditary right: reimburse buyer of the price of the sale ii. LEGAL REDEMPTION LEGAL REDEMPTION • Only applies to contracts of sale. any or all of co-owners sells their shares to 3rd person ii. At time of execution sale a retro there be no fruits but there are fruits at time of redemption – pro-rated between vendor a retro and vendee a retro giving the vendee a retro a part corresponding to the time he possessed the land. Among co-owners i. FRUITS What controls is the stipulation between parties as regards the fruits. Should one of the co-heirs/co-owners succeed in redeeming the property – such vendor a retro shall be considered as trustee with respect to the share of the other co-owners/co-heirs. EXTINGUISHMENT OF SALE 7. PRE-EMPTION 1.

Among adjoining owners i. owner of adjoining lot with smaller area shall be preferred If two or more adjacent lit owners desire to exercise right to redeem and both have same lot area. Redemption in extrajudicial foreclosure 1 year from date of sale and registration 4. Redemption in tax sales i. Redemption by judgment debtor . What is paramount is the availment of the o o o d. adjoining owner has right to redeem unless grantee does not own a rural land If two or more adjacent lot owners desire to exercise right to redeem. Hence. in case of tax delinquency/failure to pay tax right to redeem is granted to debtor mortgagor except when mortgagee is bank of a banking institution 90 days after finality of judgment 5. a. Public Land Act c. property is foreclosed ii. delinquent payer has 1 year from date of sale to redeem by paying to the revenue District Officer the amount of tax delinquencies. owner of adjoining land can redeem 2 or more owners of adjoining lot desire to exercise right to redeem. Urban land o when piece of land is small and cannot be used for any practical purpose and bought merely for speculation. Redemption in judicial foreclosure of mortgage . 2. How exercised . debtor shall have a right to extinguish it by reimbursing the assignee for the price the latter paid therefor plus judicial costs. and interest or purchase price. Land acquired under free patent homestead subject to repurchase by wife. When Period of Redemption Begins to Run . Sale of credit in litigation i. i. Rural land o Where piece of rural land has an area not exceeding 1 hectare. interest ii. offer to redeem is enough. Redemption of homesteads b. need not be stipulated 1.tender of payment is not necessary.Right of legal pre-emption of redemption shall be exercised within 30 days from notice by the seller 6. owner whose intended use is best justified shall be preferred. when a credit or other incorporeal right in litigation is sold. it can either be through a formal tender with consignation of the redemption price within the prescribed period. There is no prescribed form for an offer to redeem to be properly effected. debtor may exercise right within 30 days from the date assignee demands payment from him Other Instances When Right of Legal Redemption is Granted CIVIL LAW REVIEWER 401 Page 180 of . one who first requested shall be granted ii.1 year from date of registration of certificate of sale to redeem by paying purchaser at public auction with interest 3. legal heirs within 5 years from date of conveyance granted by law.they respectively have in thing owned in common c.

1. TRANSFER OF OWNERSHIP 1. Deeds of sale are not to be recorded in Register of Deeds unless accompanied by affidavit of seller that he has given notice to all possible redemptioners 2. Debtor has knowledge but no consent may still set up compensation of debts previous to assignment but not the subsequent ones. [August 19. 1623 does not prescribe any distinctive method for notifying the redemptioner. Assignment of rights made w/o knowledge of debtor – debtor may set up against assignee the compensation w/c would pertain to him against assignor of all credits prior to assignment and of later ones until he had knowledge of the assignment 3. Compensation unless assignor was notified by debtor that he reserved his right to the compensation 5. NOTE: Written notice under Art. Etcuban v. [148 SCRA 507] ========================= ================ TOPICS UNDER THE SYLLABUS N. Age Redemption ========================================= 9. WHAT MAKES ASSIGNMENT DIFFERENT FROM SPECIES SALE? 1. o Technical term but basically a sale Sale of credits and other incorporeal things EFFECTS OF ASSIGNMENT III. By execution of public instrument because intangibles cannot be physically transferred Art. 2003]. Sps. mortgage. By tradition and not by perfection 2. Transfers all the accessory rights (e. ASSIGNMENT: The owner of a credit transfers to another his rights and actions in consideration of a price certain in money or its equivalent 1. 1624 – 1634) I. even if he paid a price less than such value CIVIL LAW REVIEWER 401 Page 181 of . preference) 3. ASSIGNMENT (See Arts .g. GENERAL RULE: Actual knowledge notwithstanding. Valencia. EXTINGUISHMENT OF SALE 8. Transfers the right to collect the full value of the credit. or co-owner was middleman in sale to 3rd party. Debtor has consented to assignment – cannot set up 4. pledge. ii. IV. CA. Debtor can set up against the assignee all the defenses he could have set up against the assignor II.fixed and definite period within which to exercise the right of legal redemption. guaranty. written notice is still required EXCEPTION: When actual knowledge is acquired by co-heirs living in same land with purchaser. Lack of knowledge or consent of debtor not essential for validity but has legal effects (“meeting of minds” in assignment contemplates that between assignor of the credit and his assignee) 2. 1623 is mandatory for the right of redemption to commence (PSC vs. 2.

Assignor in bad faith Liable ALSO for (expenses of contract and other legitimate payments plus useful and necessary expenses) damages VIII. This rule does not apply to negotiable documents and documents of title which are governed by special laws. V. NO warranty as to the solvency of debtor unless it is expressly stipulated OR unless the insolvency was already existing and of public knowledge at the time of the assignment b. Judicial costs incurred by him AND c. There must be a sale or assignment of credit There must be a pending litigation The debtor must pay the assignee: a. shall be answerable for legitimacy of the CIVIL LAW REVIEWER 401 Page 182 of . expenses of the contract and other legitimate payments made by reason of the assessment 2. BREACH OF WARRANTY: LIABILITIES OF THE ASSIGNOR OF CREDIT FOR VIOLATION OF HIS WARRANTIES 1. EFFECT OF PAYMENT OF DEBTOR AFTER ASSIGNMENT OF CREDIT 1. the whole in general but not for each of the various parts VII. Without necessity of delivering document evidencing the credit. NO warranty against hidden defect . After Notice a.REQUISITES: 4. law would rather benefit the debtor of such credits rather than the one who merely speculates for profit. Before Notice of the Assignment Payment to the original creditor is valid and debtor shall be released from his obligation 2. He warrants the existence and legality of credit . Price paid by him AND b. The right must be exercised by the debtor within 30 days from the date the assignee demands (judicially or extra-judicially) payment from him NOTE: • Presumption: buyer’s purpose is speculation and. One who sells whole of certain rights for a lump sum.there is warranty except when expressly sold as a doubtful account a. VI. Warranty shall last for 1 year only c.3. ASSIGNMENT OF CREDIT OR INCORPOREAL RIGHT IN LITIGATION . 3.N/A because intangibles has no physical existence 2. Assignor in good faith Liability is limited to price received. debtor has a right to extinguish it by reimbursing the assignee for the price the buyer paid plus interest • d. Interest on the price from the date of payment 4. When credit or incorporeal right in litigation is assigned or sold. One who assigns inheritance right w/o enumerating rights shall be answerable for his character as an heir 2. WARRANTIES OF THE ASSIGNOR OF CREDIT 1. He may be made to pay again by the assignee 1. Payment to the original creditor is not valid as against the assignee b.

and. the law does not favor co-ownership 2.D. the unpaid installments due within the total grace period earned by him. Right to redeem by debtor not available in the following instances (not considered speculative P. other than failure of the developer to develop the subdivision or condominium according to the approved plan and to comply with such within the time limit. 957: LAW ON SALE OF SUBDIVISION AND CONDOMINIUM 1. here the buyer has at least two months grace for he should have paid at least two years of installments to avail of the rights under this section. thus perfectly legal 3. • The buyer may demand reimbursement of the total amount paid including amortization interests but excluding delinquency interests. 957) The buyer has paid at least two years of installments RIGHTS OF THE BUYER UNDER RA 6552 WITH AT LEAST TWO (2) YEARS OF INSTALLMENT: • ========================= ================ TOPICS UNDER THE SYLLABUS O. P. 23. there would be no forfeiture of past payments in favor of the developer after due notice has been given.D. Said grace period is fixed at the rate of one month grace period for every one year of installments payments made. assignment is in the form of dacion en pago.D. sales to tenants. Also. Assignment to creditor in payment for his credit • Presumption is that the assignment is REMEDIES FOR FAILURE OF THE DEVELOPER TO DEVELOP THE SUBDIVISION OR CONDOMINIUM ACCORDING TO THE APPROVED PLAN AND TO COMPLY WITH SUCH WITHIN THE TIME LIMIT.IX. Assignment of credit / incorporeal right to co-heir or co-owner. with interest thereon at the legal rate. THE SUBDIVISION AND CONDOMINIUM BUYER’S PROTECTIVE DECREE TOPICS UNDER THE SYLLABUS Failure to pay installments was due to reasons. Assignment to possessor of tenement or piece of land which is subject to the right in litigation assigned • Purpose is to presumably preserve the The buyer may desist from further payment any installments. • Only covers residential lots including condominium units. (Sec. excluding. 957) Otherwise: RA 6552 (Maceda Law) will apply. REQUISITES OF SEC 3 OF RA 6552: tenement END OF DISCUSSION ON TOPIC N. EXTINGUISHMENT OF SALE • ================================ O. CIVIL LAW REVIEWER 401 Page 183 of . THE SUBDIVISION AND CONDOMINIUM BUYER’S PROTECTIVE DECREE ========================================= To pay. without additional interest. Thus. • above suspicion. • ================================ The Subdivision and Condominium Buyer’s Protective Decree (P.

e. the seller may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or demand for rescission of the contract by a notarial act. No.R. 60 days. THE CONDOMINIUM ACT ================================ TOPICS UNDER THE SYLLABUS The Condominium Act (R. deposit or option money RIGHTS OF THE BUYER UNDER RA 6552 WITH LESS THAN 2 YEARS OF INSTALLMENTS: • If he has paid less than two (2) years of installments. THE SUBDIVISION AND CONDOMINIUM BUYER’S PROTECTIVE DECREE ================================ P. i. THE CONDOMINIUM ACT ================================ Here the buyer is not entitled to any refund CIVIL LAW REVIEWER 401 Page 184 of . McLaughlin v CA. shall not be transferable separately from the condominium unit of which it is an appurtenance. downpayment and 2. • • • END OF DISCUSSION ON TOPIC P.A. 1986] END OF DISCUSSION ON TOPIC O. he still has the right to pay within a grace period of not less than sixty (60) days from the date the installment became due. • To be refunded of the cash surrender value of this payments equal to 50% of his total payments if the contract is cancelled. subsequent to the original conveyance. 4726) THE ACTUAL CANCELLATION OF THE CONTRACT REFERRED TO ABOVE SHALL TAKE PLACE ONLY: 1. [G. Upon full payment to the buyer of the cash surrender value In the computation of the total number of installment payments the following are included: 1. ========================= ================ TOPICS UNDER THE SYLLABUS P. he is entitled to an increase of 5% every year and so on but the cash surrender value shall not exceed 90% of his total payments. be registered unless accompanied by a certificate of the management body of the project that such conveyance is in accordance with the provisions of the declaration of restrictions of such project.This rights can only be exercised only once in every five (5) years of the life of the contract and its extensions. THE CONDOMINIUM ACT ========================================= R. But if he has paid five years or more. Membership in a condominium corporation. 4726: THE CONDOMINIUM ACT Restrictions and Additional requirements on transfer of condominiums: • It shall include the transfer or conveyance of the undivided interests in the common areas or membership or shareholdings in the condominium corporation. AND 2. L-57552. If the buyer fails to pay the installment due at the expiration of the grace period. regardless whether stock or non-stock.A. Oct 10. if any. After 30 days from receipt by the buyer of the notice of cancellation or demand for rescission. No condominium owner’s copy of the certificate of title shall.

Definition/what is transmitted (Arts. In this case. Compulsory—succession to the legitime (this prevails over all kinds) 2. Intestate—succession in default of a will 4. Causal Element (Art. Compulsory – those who succeed by force of law to some portion of the inheritance. Acceptance or non-repudiation successional rights II. 776. to succeed to the portion of the inheritance of which the testator can freely dispose 3. Imperfect disinheritance c. legatees (Art. Successors i. Objective Element (Art. General Provisions (Arts. Heirs – those who are called to the whole or to an aliquot portion Death of the Person – However. Voluntary or Testamentary – those who are instituted by the testator in his will. GENERAL PROVISIONS SUCCESSION – mode of acquisition by virtue of which the property. Decedent — person whose property is transmitted through succession (Art. 782) KINDS OF HEIRS 1. 774-780) A. When succession occurs (Art. of which they cannot be deprived by the testator.H. Legal or Intestate – those who succeed to the estate of the decedent who dies without a valid will. 775) B. devisees. SUCCESSION ================================= TOPICS UNDER THE SYLLABUS I. a person may be presumed dead for the purpose of opening his succession (see rules on presumptive death). rights and obligations to the extent of the value of the inheritance. Subjective Element A. 774) KINDS OF SUCCESSION (Balane) 1. Mixed—not a distinct kind really. 774. 782) NOTE: The distinction between heirs and devisees/legatees are important in these cases: a. of a person are transmitted through his death to another or others either by his will or by operation of law. or to the portion of such estate not disposed of by will ii. succession is only of provisional character because there is always the chance that the absentee may be alive. III. Testamentary—succession by will 3. 781) B. (Art. in an amount predetermined by law. 782) ================================= I. 776) CIVIL LAW REVIEWER 401 Page 185 of . except by a valid disinheritance 2. After-acquired properties of d. Kinds of successors: heirs. Devisees or Legatees – persons to whom gifts of real or personal property are respectively given by virtue of a will (Art. but a combination of any two or all of the first three ELEMENTS OF SUCCESSION of the inheritance either by will or by operation on law (Art. 777) I. 777) C. Preterition b.

Wills (1) In General (a) Definition and characteristics (Arts. 797) (b) Soundness of mind (Arts. Support 2.Inheritance – is the subject matter of Succession it includes: i. 839) ================================= RIGHTS EXTINGUISHED BY DEATH (NOT TRANSMISSIBLE) 1. EXCEPTION: When a contrary expressly appears in the will the the the to intention Succession distinguished from Inheritance Succession Refers to the legal mode by which inheritance is transmitted to the persons entitled to Inheritance Refers to the universality or entirety of the property. Those arising consideration from personal 4. 818-819) (4) Codicils (Arts. rights and obligations of a CIVIL LAW REVIEWER 401 Page 186 of . 815817. 827) (6) Revocation (Arts. 798-801) (3) Form (a) Rules governing the formal validity of wills (Arts. 825-826) (a) Definition and formal requirements (5) Incorporate by reference (Art. 783-787) (2) Testamentary capacity and intent (Arts. 781) After-Acquired Property (Art. Life Annuity ii. 838-839) (a) Probate requirement (Art. 17. 796-803) (a) Age requirement (Art. 804) (c) Notarial wills (d) Holographic wills (e) Joint wills (Arts. Partnership rights 6. 830) (7) Allowance and disallowance of wills (Arts. 793) GENERAL RULE: Property acquired during period between the execution of the will and death of the testator is NOT included among property disposed of with REGARD LEGACIES and DEVISEES. ================================= TOPICS UNDER THE SYLLABUS II. AND those which have accrued thereto since the opening of succession (Art. Testamentary Succession A. Personal easements 5. Usufruct 3. 819) (b) Common requirements (Art. Property and transmissible rights and obligations it. person who died. 838) (b) Grounds for denying probate (Art. Agency 7. Existing at the time of his death iii. not to heirs. 828-834) (a) Kinds (Art.

785 and 787): i. CIVIL LAW REVIEWER 401 Page 187 of . However. and ii.II. ii. institutions or establishments to which such property or sums are to be given or applied. either for their reciprocal benefit or for another person. AMBULATORY AND REVOCABLE during the testator’s lifetime 7. devisees or legatees. It is an act. subject to the rules on disposicion captatoria. DISPOSITIVE OF PROPERTY CHARACTERISTICS OF A WILL: 1. when referred to by name. ACT MORTIS CAUSA (Art. Duration or efficacy of the designation of heirs. Holographic – a handwritten will COMMON REQUISITES BETWEEN THE TWO WILLS: 1. STRICTLY PERSONAL ACT (Art. KINDS OF WILLS: 1. FREE AND VOLUNTARY ACT — any vice affecting testamentary freedom can cause the disallowance of the will 4. 5. 783) 1. he disposition of his estate. 783)— takes effect only after the death of the testator 6. INDIVIDUAL ACT — two or more persons cannot make a single joint will. FORMAL AND SOLEMN ACT — the formalities are essential for validity 5. Executed with TESTAMENTARY CAPACITY 10. To control to a certain degree. To take effect after his death. TESTAMENTARY SUCCESSION A. 3. 8. Distribution of specific property or sums of money that he may leave in general to specified classes or causes. In a language or dialect known to the testator iii. Determination of the portions which they are to take. With the formalities prescribed by law. 784-785) a. Notarial – an ordinary or attested will 2. Acts which may not be left to the discretion of third persons (Arts. Determination of whether or not the testamentary disposition is to be operative Acts which may be entrusted to third persons (Article 787). although containing reciprocal provisions (mutual wills) are not prohibited. 3. 6. 783) 2. 2. and Designation of the persons. i. WILLS CONCEPT OF A WILL (Art. b. Must be in writing and 2. separate or individually executed wills. Executed with ANIMUS TESTANDI 9. Whereby a person is permitted. 4. UNILATERAL — does not need the approval of any other person (implied in Art.

All persons who are not expressly prohibited by law (Art. Nature of the estate to be disposed of b. INTERPRETATION OF WILLS (Art. Of sound mind. at the time of its execution (Art. Animus Testandi . II. Lopez. Proper objects of his bounty c. the interpretation by which the disposition is to be operative or will sustain and uphold the will in all its parts shall be adopted. 796) 2. STATUTORY disposed of.The testator’s intent (animus testandi). EXCEPT: When a contrary intention expressly appears on the will. Ambiguities in Wills – Intrinsic or extrinsic evidence may be used to ascertain the testatorial intent of the testator. 799) LEGAL PRESUMPTION IN FAVOR SOUNDNESS OF MIND (Art. morals or public policy. 795) TESTAMENTARY CAPACITY—the ability as well as the power to make a will (must be present at the TIME of EXECUTION): 1. A testator is considered of sound mind if he knows at the time of making of the will the following: a. EXCEPT: when the intention of the testator is contrary to law. In case of doubt. 797) 3. 2. provided that it can be done consistently with the established rules of law. 1. 3. 788-794) Underlying Principle: Testacy is always preferred to intestacy. as well as giving effect to such intent is primordial. 18 years old and above (Art. in the absence of proof to the contrary. 772] or ordered committed. When the testator executed the will after being placed under guardianship Torres and Lopez de Bueno vs. 800). 800): OF General Rule: The law presumes that every person is of sound mind. one month or less before the execution of the will. After Acquired Property . 798).11. Latent or Intrinsic Ambiguities— those which do not appear on the face of the will and is discovered only by extrinsic evidence Patent or Extrinsic Ambiguities— those which appear on the face of the will itself NOTE: This rule applies only to legacies and devisees and not to institution of heirs NOTE: The validity of a will as to its form depends upon the observance of the law at the TIME it was MADE (Art. for insanity (under Rules 93 and 101. When the testator. Character of the testamentary act (Art. 2. Exceptions: 1. 789) I. in either case. 4. was PUBLICLY KNOWN to be INSANE (Art. EXCEPT: The oral declarations of the testator as to his intentions must be excluded because such testimony would be hearsay. [48 Phil. because the former is the express will of the decedent whereas the latter is only his implied will. KINDS OF AMBIGUITIES (Art.Property acquired during the period between the execution of the will and the death of the testator is NOT included among the property CIVIL LAW REVIEWER 401 Page 188 of .

NOTARIAL WILL – a valid notarial will: (Art. by • Directory Part: The pagination in letters on the upper part of each page E. NOTE: A statute requiring a will to be signed is satisfied if the signature is made by the testator's mark. 804) SPECIAL FORMALITIES: I. except the last. Subscribed at the end by the testator himself or by the testator’s name written by some other person in his presence. [90 Phil 489] D. Attested & subscribed by three or more credible witnesses in the presence of the testator and of one another • Mandatory Part: The signing on every page in the witnesses’ presence NOTE: Test of presence is not whether they actually saw each other sign. [62 Phil 846] But a mere sign of the cross cannot be accepted as it does not have the trustworthiness of a thumbmark Garcia v. 801).where the last testamentary disposition ends B. and by his express direction Physical end. • Directory Part: The place of the signature. stating the following: CIVIL LAW REVIEWER 401 Page 189 of . FORMS OF WILL COMMON FORMALITIES: 1. the first consists of all the testamentary disposition and is signed at the bottom by the testator and the witnesses and the second contains only the attestation clause duly signed at the bottom by the witnesses. • Supervening capacity or incapacity does not invalidate an effective will. must be signed by the testator or by the person requested by him to write his name. Each and every page of the will must be numbered correlatively in letters placed on the upper part of each page. Signatures on the left margin on each and every page NOT REQUIRED: i. on the left margin. Lacuesta. A thumbmark is sufficient signature. iii. the left margin. but whether they might have seen each other sign had they chosen to do so considering their mental and physical condition and position with relation to each other at the moment of inscription of each signature. When the will consists of two pages. In the last page.e. Executed in a LANGUAGE or DIALECT KNOWN to the TESTATOR (Art. Tolentino.respectively of the Rules of Court). nor is the will of an incapable validated by supervening capacity (Art. the signature can be affixed anywhere on the page. i. • Mandatory Part: Pagination means of a conventional system. Every will must be in WRITING.where the writing stops Logical end. Each and every page. and 2. and by the instrumental witnesses of the will. Payad v. C. and before said order has been lifted. 805) A. When the will consists of only one page. when the will consists of two or more pages. ii. It must contain an attestation clause.

Shall not render the will invalid 4. [54 SCRA 31] RULE ON SUBSTANTIAL COMPLIANCE (ART. Cruz v. It must be acknowledged before a notary public by the testator and the witnesses (Art. Purpose is for identification o o 2. All the instrumental witnesses witnessed and signed the will and all its pages in the presence of the testator and of one another attestation clause at the end or last page of the will side margin of every page of the will • The attestation clause need not be written in a language or dialect known to the testator nor to the witnesses since it does not form part of the testamentary disposition The attestation clause need only be signed by the witnesses and not by the testator as it is a declaration made by the witnesses. act of the senses 2. Found after the SUBSCRIPTION 1. If it is proved that the will was in fact executed and attested in substantial compliance with all the requirements of Article 805. • Defects and imperfections can be supplied by an examination of the will itself. CA [222 SCRA 781] ADDITIONAL REQUISITES FOR VALIDITY 4. Found at the left CIVIL LAW REVIEWER 401 Page 190 of . The fact that the testator signed the will and every page. act of the hand 2. Defects and imperfections o in the form of attestation or in the language used therein 3. In the absence of o o bad faith forgery fraud undue and improper and influence pressure ATTESTATION v. • F. or caused some other person to write his name. in the presence of the instrumental witnesses c. Purpose is to render available proof during the probate that such will had been executed in accordance with the formalities prescribed by law 4. Villasor. 806) • The notary public cannot be counted as one of the attesting witnesses. SUBSCRIPTION Attestation – An act of witnessing execution of will by testator in order to see and take note mentally those things are done which the statute requires for the execution of a will and that the signature of the testator exists as a fact Subscription – manual act of instrumental witnesses in affixing their signature to the instrument ATTESTATION 1. mechanical act 3.a. mental act 3. The number of pages used upon which the will is written b. 809) 1. Caneda v. under his express direction.

where the last disposition has a signature and a date. [11 SCRA 422] 1. that only attested wills can incorporate documents by reference. such date validates the B. Testator must personally read the will. Annexed to be taken as a part thereof 4. since only these are witnessed (unless the testator has his holographic will superfluously witnessed) PROBATE OF HOLOGRAPHIC WILL CIVIL LAW REVIEWER 401 Page 191 of . the will must clearly describe and identify the same. If the Testator be Blind: The will shall be read to the testator twice – i. Entirely written. and need not be witnessed. Icasiano v. 827 suggests that holographic wills cannot incorporate documents by reference. Once by the notary public before whom the will is acknowledged (Art 808) NOTE: Articles 807 and 808 are mandatory. By which any disposition in the original will may be explained. Paragraph 4 requires the signatures of the testator and witnesses on every page of the incorporated document. It is a supplementary or addition to a will b.a. stating among other things the number of pages thereof 3. 827) BY ii. its contents (Art 807) • dispositions preceding it. failure to comply with either would result in nullity and denial of probate. ELEMENTS OF A CODICIL (ART. therefore. Once by witnesses one of the subscribing 2. If the Testator be Deaf or Deaf-Mute: i. the document or paper referred to in the will must be in existence at the time of the execution of the will 2. Otherwise. It seems. added to or altered REQUISITES FOR INCORPORATION REFERENCE (Art. and signed by the hand of the testator himself Dispositions of the testator written below his signature must be dated and signed by him in order to validate the testamentary dispositions. it must be signed by the testator and the witnesses on each and every page. in some practicable manner. (Art 810) ii. HOLOGRAPHIC WILL – a holographic will is valid if it is: A. it must be identified by clear and satisfactory proof as the document or paper referred to therein 4. except in case of voluminous books of account or inventories II. (Art 812) EXCEPT: In case of dispositions appearing in a holographic will which are signed without being dated. • The inadvertent failure of one witness to affix his signature to one page of the original will due to the simultaneous lifting of two pages in the course of signing is not per se sufficient to justify denial of probate when the duplicate will shows such signatures. if able to do so. Made after the execution of the will 3. whatever be the time of prior dispositions A holographic will is subject to no other form. dated. 825) 1. Icasiano. and may be made in or out of the Philippines. NOTE: The text of Art. he shall designate two persons to read it and communicate to him.

because of failure to comply with *CC – Civil Code 2. a lost holographic will cannot be probated. 1982] INSERTION. and.R. SUBSTANTIVE VALIDITY CIVIL LAW REVIEWER 401 Page 192 of . Of sound mind B. FORMAL VALIDITY FORMAL VALIDITY EXECUTED IN PHILIPPINES FILIPINO (a) CC of Philippines ALIEN (a)CC of the Philippines (b)Law of His Country FOREIGN COUNTRY (a) CC of Philippines (b) Law where Made (a) CC of Philippines (b) Law of his Country (c) Law of Country where he resides B. perjury or false testimony LAWS GOVERNING VALIDITY OF A WILL 1. then the will is void because it is not written entirely by the testator WHO MAY BE A WITNESS TO A WILL – Any person may be a witness provided he is: A. Yap. Aranza. Of the age of 18 years or more C. (Art 811) NOTE: This article applies only to post mortem probates and not to ante mortem probates since in such cases the testator himself files the petition and will identify the document himself. Who knows the handwriting signature of the testator and C. [G. Gan v. C. at least three of such witnesses shall be required (merely directory). • in the probate of a holographic will.A. If the insertion made by a third person is made contemporaneous to the execution of the will. No. If the insertion after the execution is validated by the testator by his signature thereon then the insertion becomes part of the will. In the absence of such competent witness and if the court deems it necessary. If made after the execution of the will. expert testimony may be resorted to. Able to read and write E. the requirement that it must be wholly written by the testator D. Must explicitly declare that the will and the signature are in the handwriting of the testator. ERASURE OR ALTERATION IN A HOLOGRAPHIC WILL A. [104 Phil 509] Exception: When copy of the will is produced or survives Rodelas v. L-58509. the entire will becomes void. deaf or dumb D. Domiciled in the Philippines F. CANCELLATION. If the insertion after the execution of the will was with the consent of the testator. December 7. the will remains valid but the insertion is void. but without the consent of the testator. Have not been convicted of falsification of a document. Not blind. the document itself must be produced. There must be at least one witness. EXCEPTION: If the will is contested . such insertion is considered as not written because the validity of the will cannot be defeated by the malice or caprice of a third person B.

Completion of the subjective phase.) b. either for their reciprocal benefit or for the benefit of a third person. obliterating the will with the intention revoking it. Capacity to succeed C. REVOCATION OF WILLS 1. Testamentary capacity at the time of performing the act of destruction. decree of legal separation b. By operation of law – instances of revocation by operation of law: e. Intent to revoke (animus revocandi). when heir. and his express direction. CIVIL LAW REVIEWER 401 Page 193 of . Intrinsic validity VALIDITY OF JOINT WILLS • Two or more persons cannot make a will jointly. C. Holographic – in three ways A.ASPECTS OF THE WILL GOVERNED NATIONAL LAW OF THE DECEDENT: A. By burning. REVOCATION AND REPUBLICATION OF WILLS AMENDMENT OF WILLS 1. codicil or other writing executed as provided in case of wills a. preterition c. and everything is written by the hand of the testator himself Certain dispositions or additional matter may be suppressed or inserted PROVIDED that said cancellation is signed by the testator and written by the hand of the testator himself Through a codicil which may either be notarial or holographic d. EXPRESS – When there is a revocatory clause expressly revoking the previous will or a part thereof IMPLIED – When the provisions thereof are partially or entirely inconsistent with those of the previous wills or of by by b. d. substantial transformation thing bequeathed e. or in the same instrument. Notarial – only through a codicil 2. AMENDMENT. by the testator himself. B. 3. tearing. canceling. Order of succession BY a. or some other person in his presence. AND Performed by the testator himself or by some other person in his presence and express direction (The list is NOT exclusive. Amount of successional rights legacy or credit against third person or remission of debt was provided in will and subsequently. REQUISITES: a. Actual physical act of destruction. devisee or legatee commits any of the acts of unworthiness 2. c. Dispositions may be added below the signature. even though authorized by the laws of the country where they may have been executed. NOTE: Joint wills executed by Filipinos in a foreign country shall not be valid in the Philippines. B. testator brings action against debtor of specific D. By the execution of a will. PROVIDED that said dispositions are also dated and signed.

the presumption is that he must have destroyed it with animus revocandi. 832 A revocation made in a subsequent will shall take effect. devisees. in the absence of evidence to the contrary. 837. (Molo v. cancellation. which can be revived only by another will or codicil. the presumption is that he must have destroyed it with animus revocandi. The recognition of an illegitimate child does not lose its legal effect. • Art. It must be false c. X executed Will 2. X executed Will 1 In 1987. EXCEPTION: Doctrine of Dependent Relative Revocation – when the testator provides in the subsequent will that the revocation of the prior one is dependent on the capacity or acceptance of the heirs.DOCTRINE of PRESUMED REVOCATION: • Where the will cannot be found following the death of the testator and it is shown that it was in the testator's possession when last seen. If after making a will. expressly revoking Will 1 CIVIL LAW REVIEWER 401 Page 194 of . The testator must not know of its falsity • • d. REQUISITES: a. the revocation of the second will does not revive the first will. or by their renunciation. devisees or legatees designated therein. factual and not purely subjective b. OUTSIDE PHILIPPIN ES Domicil e Non Domicil e Philippine Law (a) Where will was made (b)Where DOMICILED at time of revocation • REVOCATION BASED ILLEGAL CAUSE • ON A FALSE OR • Revocation based on a false or illegal cause is null and void. or obliteration. Art. or legatees instituted in the subsequent will. it was found among the testator's effects after his death in such a state of mutilation. The cause must be concrete. Molo. as represents a sufficient act of revocation within the meaning of the applicable statute. Where it is shown that the will was in the custody of the testator after its execution. the testator makes a second will expressly revoking the first. even if the new will should become inoperative by reason of the incapacity of the heirs. it will be presumed. and subsequently. [90 Phil 37]) LAWS WHICH GOVERN REVOCATION LAW FOR REVOCATION IN PHILIPPINES Philippine Law LAW Philippine Law • • FACTS DEMONSTRATING ART 837 • • In 1985. It must appear from the will that the testator is revoking because of the cause which is false. Art. that such act was perfomed by the testator with animus revocandi. 834. even though the will wherein it was made should be revoked. Where the will cannot be found following the death of the testator and it is shown that the testator had ready access to it.

That the testator was of sound and disposing mind b. Nuguid. Ante-Mortem – during his lifetime FINAL DECREE OF PROBATE • Once a decree of probate becomes final in accordance with the rules of procedure it becomes Res Judicata It is conclusive as to the due execution of the will (extrinsic validity only) DISALLOWANCE OF WILL . 2. A special proceeding required for the purpose of establishing the validity of the will. 2. If the testator was insane. The probate court can only inquire into the extrinsic validity of testamentary provisions. c. Nuguid v. [17 SCRA 449] KINDS OF PROBATE 1. Post-Mortem death – after the testator’s REPUBLICATION AND REVIVAL OF WILLS • If the testator wishes to republish a will that is void as to form. revoked ALLOWANCE AND DISALLOWANCE OF WILLS I. X executed Will 3. That the will was signed by the required number of witness d. Probate of a will is mandatory 3. which include the following: a. at the time of its execution. PROBATE OF A WILL CIVIL LAW REVIEWER 401 Page 195 of . revoking Will 1 CONCLUSION ON THE FACTS • The Revocation of Will 2 by Will 3 does not revive Will 1 This demonstrates the theory of instant revocation because the revocatory effect of the second will is immediate upon the first will 1. or otherwise mentally incapable of making a will. the only way to republish it is to execute a subsequent will and reproduce it The testator need only execute a subsequent will or codicil referring to the previous will if the testator wishes to republish a will that is either: a. That his consent was not vitiated • NOTE: This article only applies where the revocation of the first will by the second will is express. b.grounds for disallowance of a will: 1. That the will is genuine EXCEPTION: The probate court may pass upon the intrinsic validity of the will when its probate might become an idle ceremony if on the will’s face it appears to be intrinsically void.• In 1990. Void for reason other than a formal defect Previously revoked • 2. • REPUBLICATION Takes place by an act of the testator Corrects extrinsic and extrinsic defects REVIVAL Takes place operation of law Restores will a by II. If the formalities required by law have not been complied with.

Individuality – heirs collectively instituted are deemed individually named unless a contrary intent is proven 3. 2. The person so named has capacity to succeed 4. NOTE: If there is ambiguity in the designation. If it was executed through force or under duress. Will specifically assigns to such person an inchoate share in the estate. or the influence of fear.designation of name and surname a. intestacy to that portion results. the designation must be resolved by discerning the testator’s intent. If one has no compulsory heirs: REQUISITES FOR A VALID INSTITUTION OF HEIR 1. No preterition results from the effect of such will Always total EXCEPT when the ground of fraud or influence for example affects only certain portions of the will THREE PRINCIPLES IN THE INSTITUTION OF HEIRS 1. However. If the signature of the testator was procured by fraud. The will is formally valid 5. 3. INSTITUTION OF HEIRS INSTITUTION OF HEIR 1. 5. 6. 4. Designation in will of person/s to succeed a. on the part of the beneficiary or of some other person. If the testator acted by mistake or did not intend that the instrument should be his will at the time of affixing his signature thereto. unless his identity becomes certain. The person or persons who are to succeed him in his property and transmissible 3. He can give his estate to any person qualified to inherit under him b. otherwise void disposition. If it was procured by undue and improper pressure and influence. No vice of consent is present 6.(Art 839) REVOCATION Voluntary act of the testator With or without cause May be partial or total DISALLOWANCE Given decree Always cause by for a judicial legal b. Directory . Equality – heirs who are instituted without a designation of shares inherit in equal parts 2. Rights and obligations RULES ON A PERSON’S RIGHT TO DISPOSE OF HIS ESTATE 1. they are instituted simultaneously and not successively B. It is an act by virtue of which a testator designates in his will 2.3. Simultaneity – when several heirs are instituted. If one has compulsory heirs: CIVIL LAW REVIEWER 401 Page 196 of . he must respect restrictions imposed by special laws 2. If the ambiguity cannot be resolved. Mandatory – identity of the heir must be established. or threats.

without prejudice to the right of representation DISTINGUISH PRETERITION FROM DISINHERITANCE PRETERITION Deprivation of a compulsory heir of his legitime is tacit DISINHERITANCE Deprivation of compulsory of legitime is express the his 2. There are more than one instituted heir b. b. The testator intended the heirs to inherit the whole estate c. He can give only the disposable portion to strangers Legitimes of compulsory heirs must be respected ELEMENTS OF PRETERITION 1. Cause of institution of the heirs must be stated in will 2. some or all of the heir/s in the will 2. Each heir’s share shall be proportionally increased: a. Compulsory heir omitted must be of the DIRECT LINE 4. Each heir’s share shall be proportionally decreased: a. to only one heir If the heir institutes several heirs to an aliquot part of the c. The omission must be complete and total in character. It appears from the face of the will that the testator would not have made the institution had he known the falsity of the cause. RULES ON INSTITUTION OF ALIQUOT SHARE LESS THAN OR IN EXCESS OF THE WHOLE ESTATE: 1. Intestacy Results if a. The aliquot parts of each share exceed the whole inheritance CIVIL LAW REVIEWER 401 Page 197 of . the institution shall be effectual. The omission must COMPULSORY HEIR be that of a b. There are more than one instituted heir b. The institution of heir is annulled 2. Devises and legacies shall remain valid as long as they are not inofficious 3. REQUISITES FOR THE INSTITUTION OF HEIRS: ANNULMENT OF 3.a. : There is no omission if a. Cause must be shown to be false 3. EFFECTS OF PRETERITION: 1. the heir institutes an aliquot portion of the estate b. A devise or legacy has been given to the heir A donation inter vivos has been previously given to the heir Anything is left from the inheritance which the heir may get by way of intestacy 1. The aliquot parts of each share do not cover the whole inheritance 3. The omitted compulsory heir must be LIVING at the time of testator’s death or must at least have been CONCEIVED before the testator’s death 5. There must be an omission of one. If the omitted compulsory heir should die before the testator. The testator intended the heirs to inherit the whole estate c.

If there are more D. A fiduciary or with the dual transmit to a second heir inheritance A FIDEICOMMISSARY first heir instituted entrusted obligation to preserve and to fideicommissary substitute or the whole or part of the C. compulsory heir is merely restored to his legitime REQUISITES FOR SUBSTITUTION: 1. The fideicommissary substitution is imposed on the free portion of the estate and never on the legitime NOTE: Pending the transmission of the property. upon CIVIL LAW REVIEWER 401 Page 198 of .if the testator institutes an heir with an obligation to deliver to another the property so inherited. or a past event unknown to the parties. • Restricted simple substitution. CONDITIONAL TESTAMENTARY DISPOSITIONS AND DISPOSITIONS WITH A TERM TESTAMENTARY DISPOSITIONS 1. Vulgar or Simple – the testator may designate one or more persons to substitute the heir or heirs instituted in case such heir or heirs should: a. Brief or Compendious – two or more persons may be substituted for one. Fideicommissary Substitution . they shall have the same share in the substitution as in the institution 4. the substitute shall acquire the share of the heir who dies. The heir instituted to such condition is called the first heir or fiduciary heir. die before him (PREDECEASE) b. Such substitution must not go beyond one degree from the heir originally instituted 3. Condition – future or uncertain event. The fiduciary or first heir and the second heir are living and qualified to succeed at the time of the death of the testator 4. the one to receive the property is the fideicommissary or second heir Done with a legal cause If disinheritance is unlawful. The fideicommissary substitution must be expressly made 5. renounces. should not wish.The testator may limit the operation of simple substitution by specifying only one or two of the three causes. or incapacitated. 2.May be voluntary but the law presumes that it is involuntary Law presumes that there has been merely an oversight or mistake on the part of the testator Omitted heir gets not only his legitime but also his share in the free portion not disposed of by way of legacies or devises Always voluntary than one substitute. and one person for two or more heirs 3. SUBSTITUTION OF HEIRS CLASSES OF SUBSTITUTION 1. (RENOUNCE) or c. the fiduciary is entitled to all the rights of a usufructuary although the fideicommissary is entitled to all the rights of a naked owner. unless it clearly appears that the intention of the testator was otherwise. Reciprocal – if heirs instituted in unequal shares should be reciprocally substituted. should be incapacitated to accept the inheritance (INCAPACITATED) 2.

It is mixed if it depends both partly upon the will of the heir himself and upon chance and/or the will of a third person 7. unless testator provides otherwise. Disposicion Captatoria/Scriptura Captatoria – condition that the heir shall make some provision in his will of the testator or of any other person (prohibited because it will make the making of the will a contractual act) 5. and interests. the condition was already complied with at the time the heir learns of the testator’s death the condition is of such nature that it cannot be fulfilled again b. in cases of contravention CASUAL OR MIXED 2. If testator unaware of fact of fulfillment.deemed fulfilled If testator aware thereof – i. the mode obligates but does not suspends (for he who inherits with a mode is • • iii. If it can no longer be fulfilled again – deemed fulfilled If it can be fulfilled again – must be fulfilled again INTERPRETATION • When in doubt whether there is a condition or merely a mode. Caucion Muciana – bond or security that should be given in favor of those who would get the property if the condition not be complied with already an heir. Positive • GENERAL RULE – may be fulfilled at any other time (before testator’s death). Term – the day or time when an obligation either becomes demandable or terminates 3. fruits. Potestative Condition – one the fulfillment of which depends purely on heir 8.) inherits RULES ON POTESTATIVE. one who conditionally is not yet an heir.which the performance of an obligation depends 2. consider same only as a suggestion The condition suspends but does not obligate. POTESTATIVE CASUAL AND Positive Potestative Condition: General Rule – must be fulfilled as soon as the heir learns of the testator’s death EXCEPTION a. Mixed Condition . application of the property left by the testator or the charge imposed on him 4. If ALREADY FULFILLED at the time of execution of the will ii. It is sure to happen 9. Causal Condition – condition us casual if it depends upon chance and/or upon the will of a third person 6. Negative Potestative Condition: • Heir must give security to guarantee the return of the value of property. • ii. Suspensive term – one that merely suspends the demandability of a right. Constructive Compliance CIVIL LAW REVIEWER 401 Page 199 of . Modal Institution – the statement of the institution. consider the same as mode When in doubt as to whether there is a mode or merely a suggestion. MIXED CONDITIONS 1.

The heirs for whom the law reserves such portion are called compulsory heirs. Concurring – those who succeed together with the primary or the secondary compulsory heirs • Widow or widower (legitimate) – the surviving spouse referred to is the spouse of the decedent. condition is fulfilled 2. Secondary – those who succeed only in the absence of the primary heirs • Legitimate parents and ascendants (legitimate). if 3rd party applicable interested – • • T he portion of the decedent’s estate reserved by law is called the legitime. until arrival of the term 2. CLASSES OF COMPULSORY HEIRS 1.On the innocent spouse – no effect c. Death of either spouse during the pendency of a petition for legal separation – dismissal of the case • Illegitimate children and descendants (legitimate or illegitimate) E. If a subsequent marriage is prohibited as imposed by the deceased spouse or by his/her ascendants or descendants . If dependent partly on will of third party – 1. LEGITIMES CIVIL LAW REVIEWER 401 Page 200 of . On the offending spouse – disqualified ii. with respect to their legitimate children and descendants 3. If dependent partly on chance – not applicable ii.a. until it becomes certain condition will never be fulfilled 3.valid 3. if 3rd party not interested – not applicable EFFECTS OF SUSPENSIVE CONDITION OR TERM The estate shall be placed under administration until 1. Mere estrangement is not a ground for the disqualification of the surviving spouse as heir b.considered not written NOTE: a. Effect of decree of legal separation: i. CONDITIONS PROHIBITING MARRIAGE 1. if mixed – i. Primary – those who have precedence over and exclude other compulsory heirs • Legitimate children and descendants (legitimate). if casual – not applicable b. If a first marriage is prohibited – condition considered always as not imposed 2. with respect to their legitimate parents and ascendants 2. if a subsequent marriage is prohibited and imposed by anyone else.

Any compulsory heir who was given title less than his legitime may demand that the same be completed (Art 906) EXCEPTIONS: a. 3. Rule of division by line b. Right of representation ad infinitum in case of predecease. 4. Third. 3. unless the testator provides that it should be considered part of the legitime. b. 6. reduce the donations inter vivos according to the inverse order of their dates 8. STEPS IN DETERMINING THE LEGITIME OF COMPULSORY HEIRS: 1. 7. Collation or addition of the value of all donations inter vivos to the net value of the estate. Determination of the gross value of the estate at the time of the death of the testator. Testamentary dispositions made by the predecessor to the compulsory heir. First. illegitimate parents only Surviving spouse Illegitimate children and descendant GENERAL LEGITIMES 1. 5.Testator is a Legitimate Person Legitimate children and descendant Testator is an Illegitimate Person Legitimate children and descendants b. reduce pro-rata non-preferred legacies and devises. Non-impairment of legitime a. Imputation of all the value of all donations inter vivos made to compulsory heirs against their legitimes and of the value of all donations inter vivos made to strangers against the disposable free portion and restoration to the hereditary estate if the donation is inofficious. If the predecessor gave the compulsory heir a donation inter vivos and provided that it was not charged against the legitime (Art 1062) a. incapacity or disinheritance Direct ascending line a. RULES IN ASCERTAINING Direct descending line a. Rule of proximity c. reductions shall be made: the following In default of the foregoing. Determination of the net value of the estate by deducting all the debts and charged from the gross value of the estate. Determination of the amount of the legitime from the total thus found. Determination of all debts and charges which are chargeable against the estate. legitimate parents and ascendants Surviving spouse Illegitimate parents and ascendants In default of the foregoing. 2. Second. CIVIL LAW REVIEWER 401 Page 201 of . reduce pro rata the preferred legacies and devises c. and the testamentary dispositions. Rule of preference between lines b. If legitime is impaired. Rule of equal division 2. Distribution of the residue of the estate in accordance with the will of the testator.

CIVIL LAW REVIEWER 401 Page 202 of .



by some chance or accident. (Justice Vitug’s View) NOTE: Tolentino is of the view that even if the reservista and the originator belong to the same line. [41 Phil 495] 1. PERSONAL ELEMENTS . NOTE: by operation of law is limited to succession. Substituting or alienating the property b. By bequeathing or devising it either to the potential reservista or to other third person c.RESERVA TRONCAL RESERVA TRONCAL: The reservation by virtue of which an ascendant who inherits from his descendant any property which the latter may have acquired by gratuitous title from another ascendant or a brother or sister. and testate or intestate succession. RESERVISTA – The ascendant. • It constitutes as an exception to both the system of legitime and the order of intestate succession. REQUISITES OF RESERVA TRONCAL 1. Alcala. To maintain a separation between paternal and maternal lines. NOTE: The Civil Code did not provide for the rules on how the reservatarios would succeed to the reservista. The property should have been previously acquired by gratuitous title by the propositus from another ascendant or from a brother or sister (ORIGINATOR). and that he belongs to the line from which the reservable property came 4. By partitioning it and assigning the property to parties other than the reservista 2. The so-called “ARBITER OF THE FATE OF THE RESERVA TRONCAL. 4. is obliged to reserve the property for the benefit of relative within the 3rd degree and who belong from the same line from which the property came from.” NOTE: Prepositus can terminate the reserva by: a. 2. NOTE: gratuitous encompasses transmissions by donation. 3. Right of representation – provided that the representative is a relative within the 3rd degree. 3. Rule of proximity c. ORIGINATOR – the ascendant. • All relationships must be legitimate. They must be related by blood not only to the propositus but also to the originator. Nieva v. remission. To prevent person outside a family from acquiring. RESERVATARIOS – The relative of the propositus within the 3rd degree and who belong to the line from which the property came and for whose benefit reservation is constituted. PURPOSE OF RESERVA TRONCAL: 1. the following rules on intestacy have been consistently applied: a. That there are relatives within the third degree belonging to the line from which said property came. not belonging to the line from which the property came that is the only compulsory heir and is obliged to reserve the property. brother or sister from whom the propositus had acquired the property by gratuitous title PROPOSITUS – The descendant who died and from whose death the reservistas in turn had acquired the property by operation of law. 3. The propositus should have died without any legitimate issue in the direct descending line who could inherit from him. Rule of preference between the lines b. To reserve certain properties in favor of certain persons. property which otherwise would have remained with the said family. either by legitime or intestacy 2. there is still an obligation to reserve. However. The property should have been acquired by operation of law by an ascendant (RESERVISTA) from his descendant (PROPOSITUS) upon the death of the latter.

in the same proportion that the part given by will bears to the part not so given Minima finds wider acceptance here 2 EVENTS TO BE CONSIDERED TO DETERMINE THE RIGHT OF THE RESERVATARIOS OVER THE RESERVABLE PROPERTY 1. The right of ownership is registrable RIGHT OF THE RESERVASTARIOS OVER THE RESERVABLE PROPERTY 1. The reservistas own the property subject to the resolutory condition 2. by will. Lost or destroyed through the fault of the reservista 3. Confusion or merger of rights 6. To appraise the movables 4. he has not transmitted . The right is alienable. The death of the Reservista 2. The right of ownership is alienable 4. Gonzales v. Death of Reservista – surviving reservatarios acquire a perfect right. brother or sister. To inventory reserved properties 2. OBLIGATIONS OF A RESERVISTA AND THE CORRESPONDING RIGHTS OF THE RESERVATARIOS (A-I-S-A) 1. As restitution for movables not alienated RIGHT OF THE RESERVISTA OVER THE RESERVABLE PROPERTY 1. To annotate the reservable character (if registered immovables) in the Registry of Property within 90 days from acceptance by the reservista 3. CFI. To secure by means of mortgage: 1. The right is registrable PROPERTY SUBJECT TO RESERVATION: GENERAL RULE: It must be the same property which the reservista had acquired by operation of law from the propositus upon the latter’s death and which the latter. The reservatarios have a right of expectancy over the property Maximizes the scope of reserve EXTINGUISHMENT OF RESERVA TRONCAL 1. in turn had acquired by gratuitous title during his lifetime from another ascendant. Deteriorated through the same cause 4. “full blood/double share” rule in Article 1006 The reservista had no power to appoint. If he dies before the reservista. The indemnity for any deterioration of or damage to the property occasioned by the reservista’s fault or negligence. It has been alienated Reserva Maxima Much of the potentially reservable property as possible must be deemed included in the part that passes by operation of law Reserva Minima Every single property in the Prepositus estate must be deemed to pass. Prescription or adverse possession IMPORTANT NOTES: • A reservatario may dispose of his expectancy to the reservable property during the pendency of the reserva in its uncertain and conditional form. partly by will and partly by operation of law. and 2. The death of the all the Reservatorios 3. Waiver or renunciation by all Reservatorios. Total fortuitous loss of the reserved property 5. [104 Phil 479] • 2. The payment of the value of such reserved movables as may be alienated by the reservista onerously and gratuitously 3. The ownership is subject to a resolutory condition 3.d. The right of the reservista over the reserved property is one of ownership 2. The right is subject to a suspensive condition 3. provided none is born subsequently 4. Property is consumable 2. EXCEPTION: Substitution of the reservable property through unavoidable necessity: 1. but subject to the same suspensive condition 4. Death of Propositus – all qualified reservatario merely acquire an inchoate right. which reservatarios were to get the reserved property.

Howerver. by will. but if he survives such reservista. the rule is that such legacies and devises will be reduced pro rate. the disposable portion is sufficient to cover donations inter vivos but not the legacies and devises. only the legitime passes by operation of law. the reserva minima rule (proportional reserva) should be followed. i. NOTE: proceeds of an insurance policy where the beneficiary is a third person or even a compulsory heir belongs exclusively to the beneficiary and not to the estate of the insured. STEPS IN DETERMINING THE LEGITIME OF COMPULSORY HEIRS IF THERE ARE DONATIONS: 1. or substitution of any kind whatsoever.• • anything. if the ascendant was not disentitled in the will to receive such properties. Thus. The rights of the heirs are merely inchoate because it is only perfected upon the testator’s death. the transmission shall become effective. Remedy is to demand for completion of legitime Effect is the total annulment of the institution of heirs PRINCIPLE OF UNIMPAIRMENT OF THE LEGITIME OF THE COMPULSORY HEIR 1. 3. Determination of the gross value of the estate at the time of the death of the testator. Determination of the amount of the legitime from the total thus found. 6. ii. General Rule: He cannot impose upon the same any burden. condition. encumbrance. 2. after satisfying those preferential ones. General Rule: The testator cannot deprive his compulsory heirs of their legitime. 5. All other legacies or devises If after satisfying the legitime of the compulsory heirs. Exception: valid disinheritance 2. one-half of the properties acquired by gratuitous title should be reservable and the other half should be free. Exception: express prohibition of the partition of the estate for a period not exceeding 20 years. EFFECTS OF INCOMPLETE LEGITIME Incomplete Legitime Preterition Heir not entirely Total omission of the forgotten heir Less than the portion Total deprivation of of the legitime legitime . In testate succession. Hence. Hence. Donation inter vivos 3. or brother or sister. A will may prevent the constitution of a reserva. Preferential legacies or devises 4. REDUCTION OF TESTAMENTARY DISPOSITIONS AND DONATIONS The order of preference is as follows: 1. Determination of the net value of the estate by deducting all the debts and charges from the gross value of the estate. In such case. Determination of all debts and charges which are chargeable against the estate – this refers to the pre-existing obligations of the testator during his lifetime. and not to the charges or burdens which are created by the testamentary dispositions found in the will. reserva troncal is avoided. Legitime of compulsory heirs 2. not subject to collation. Collation or addition of the value of all donations inter vivos to the net value of the estate. The propositus may. • Renunciation or compromise as regards future legitime between the person owing it and his compulsory heir is void. opt to give the legitime of his ascendant without giving to the latter properties he had acquired by gratuitous title from another ascendant. The rule holds that all properties passing to the reservista must be considered as passing partly by operation of law and partly by will of the propositus. No contract may be entered into with respect to future inheritance except in cases expressly authorized by law. there is still nothing to renounce. 4. and 7. Imputation of the value of all donatioins inter vivos made to compulsory heirs against their legitime and of the value of all donations inter vivos made to strangers against the disposable free portion and restoration to the hereditary estate if the donation is inofficious. Distribution of the residue of the estate in accordance with the will of the testator.

3. 7. ascendant. 8. it does not have to be in a will.The testator creates it himself 2. Total exclusion of the compulsory heir in from the inheritance. a. Accusation of a crime with penalty of six years or more. Disinheritance . Penalty imposable. 6. Only in the descending line. However. 5. and Intestacy. It is then false. Cause must be certain and true. 6. and any testamentary disposition made in a prior will. his intestate portion. Vices of consent. d. The children or descendants of the person disinherited shall take his or her place and shall preserve the rights of compulsory heirs with respect to the legitime. not actually imposed. Preterition REQUIREMENTS FOR VALID DISINHERITANCE 1. 2. Effected only through a valid will. only with respect to nephews and nieces. If grounds for disinheritance and unworthiness are common. the heir loses his legitime. NOTE: The disinherited heir can be represented in the legitime.The heir does something 3. e. it should be considered to have revoked the inheritance as well as the unworthiness. Representation 3. Accretion DISINHERITANCE 1. Groundless – court should make a positive finding that the testator has not committed the crime. NOTE: Therefore. 3. giving cause for legal separation. 2. Even if validly disinherited. 2. Accretion. As to the free portion. may be consummated. descendant a. Substitution 2. b. 4. Repudiation . 3. Attempt on life of relatives. no conviction needed c. In unworthiness. Conviction necessary b. EFFECTS OF DISINHERITANCE 1. In case of spouse. Found to be groundless. Only in cases of testate succession. NOTE: Counterpart in intestate is unworthiness. Chismis – not the one referred here. Ineffective disinheritance v. NOTE: Will containing disinheritance must be probated. In collateral line. For a cause expressly stated by law. 4. c. there must a pardon in writing to remove incapacity to inherit. a. Total. As long as there is reconciliation.” no particular form 5. d. Induce testator to make/change the will. spouse. Cause must be expressly state in the will itself. false. heir can still be validly restored in the legitime by RECONCILIATION. never in the ascending b.DISINHERITANCE CAUSES OF VACANCY IN SUCCESSION 1. 3.Something happens to the heir HOW VACANCIES ARE FILLED 1. . reconciliation does not erase the fact that the heir is unworthy. which includes his legitime. Include both attempted and frustrated. it passes through Substitution. it is outside criminal proceeding. Made by the heir in a proceeding as a complainant or witness in a criminal case. Heir is being deprived of his legitime. Incapacity/Predecease . 2. Reconciliation – when in “speaking terms again. GROUNDS FOR DISINHERITANCE Grounds for Disinheritance Common To All Compulsory Heirs 1. The heir disinherited must be designated in such a manner that there can be no doubt as to his identity. Attempt on the life of testator. AND 7. Will – purely personal b. a. The disinherited parents shall not have the usufruct or administration of the property which constitutes the legitime. Unconditional.

2. It must be the heir who committed such liaison 2. one parent Parent v. Reclusion temporal. Abandonment by parents a. 5. the testator must be a common child. As long as the heir can prove that there is an attempt. parent Even if parents are not married.e. d. By word – slander. Descendant convicted of crime with civil interdiction. Not necessarily incestuous 4. Necessarily imposable. offensive language. d. a. No need for previous conviction b. legally married to each other 1. not actually imposed. Willfully left the children to fend for themselves b. b. Legal separation instituted but not terminated. Reason must be unjustifiable Grounds for Disinheritance Common between Ascendants and Descendants • Adultery and Concubinage – with the spouse of the testator 1. Will + disinheritance (will making) e. By deed – no need for violence. there is a need to disinherit iii. Giving cause for legal separation a. Laying hands if not under attempt on life. daughter living with a married man. Grounds for Disinheritance Only against Descendant 1. Support unjustifiably not given. It means that the act is committed which may be a cause for loss of parental authority over their common children. f.. Ascendant of testator 3. Induced daughters to lead a disgraceful life – also applicable to sons. 3. With the legal spouse of the testator 3. Only refers to abandoned child. Prove infidelity if cause is contested c. If there is already a decree: i. d. d. There are no common grounds between spouse and descendants. 231.It does not punish the result but the interference in the making/changing of the will. libel. Maltreatment of testator a. Causes: Arts. They do not need to be spouses. b. Must prove obligation to give support b. Grounds for Disinheritance Only against spouse – refers to legal spouses only. i. Applicable to both legitimate and illegitimate descendant Grounds for Disinheritance Common Ascendant and Spouse Loss of parental authority 1. but it must exist. c. something which caused the testator to be humiliated. insult. No actual deprivation. reclusion perpetua. Ground is conclusive ii. Ground for Disinheritance Only against Ascendants (Parents) 1. Effects: Guilty spouse is not entitled to inherit. prostitutes. Leading a disgraceful life (or dishonest) c. Spouses: mutual obligation to give support c. No need to prove grounds unless contested by the heir. c. b. Abdication of parental duties. May be spoken or written. EXCEPT for those enumerated in A. a. Attempt on the life of against another parent. However. drug addict. Will + amended will + disinheritance (will changing) 4. 230. But. See 10 causes under the Family Code. drug dealers. Commission of crime which carries with it the penalty of civil interdiction a. 2. . 232 of the Family Code 2. estafadora. 4. Spouse has given cause for loss of parental authority. it is still a ground. OK e. No need for conviction.

Refusal of the other spouse causes damage to the other.2. Support – refusal to give support to the children a. Spouse refuses to give support to the child d. Common children of the testator and the spouse c. (testator) . Parents share in support of their common children. Offended the testator b.

Abandonment parents 2.Maltreatment of testator 2. Support given unjustifiably not √ √ N/A √ √ √ √ N/A √ Adultery and Concubinage Loss of parental authority Grounds Specific to a 1. spouse. ascendant. Commission with it of life of one parent another of crime which carries the penalty civil interdiction . Leading a 1. on by 1 Giving Cause Legal Separation 2. Support Particular Heir the disgraceful life 3.GROUND CHILD/ DESCEND PARENT/ ASCEND SPOUSE Attempt against the life of the testator. Attempt against parent. descendant Accusation of a crime with penalty of six years Induce testator to √ √ √ √ √ √ √ √ √ make/change the will.

• Compulsory heir. compulsory heir given all that he is entitled to receive as if the disinheritance has not been made. it may be express or tacit. Such pardon must specifically refer to the heir and to the acts causing the disinheritance. The heir must accept the pardon. the testator must pardon the disinherited heir. 2. the disinheritance becomes ineffective 2. without prejudice to lawful dispositions made by the testator in favor of others 3. heir can still be validly restored in the legitime by RECONCILIATION. 4. If the will is silent as to who shall pay or deliver the legacy/devise.” no particular form required. LEGACIES AND DEVISES PERSONS CHARGED WITH LEGACIES AND DEVISES: 1. legacies and other testamentary dispositions shall be valid to such extent as will not impair the legitime IMPERFECT DISINHERITANCE Person disinherited may be any compulsory heir EXPRESS INTENTIONAL partial annulment institution of heirs of PRETERITION The person omitted must be a compulsory heir in the direct line IMPLIED EITHER intentional or unintentional Effect: total annulment of institution of heirs • • • • • • REVOCATION OF DISINHERITANCE 1. In unworthiness. If the testator had made disposition of the entire estate. Voluntary heir. 1033. However. approximating that which prevailed before the testator learned of the cause for disinheritance. there must a pardon in writing to remove incapacity to inherit. Legatee or devisee. However. If there is an administration proceedings. 3. annulment of the testamentary disposition only in so far as they prejudice the legitime of the person disinherited. Nullity of the will which contains the disinheritance NOTES: Even if validly disinherited. If grounds for disinheritance and unworthiness are common. reciprocally manifested by their actions subsequent to the act of disinheritance. Subsequent institution of the disinherited heir 3. If the testator did not dispose of the free portion. Estate. 922) Reconciliation – when in “speaking terms again. Devisees. it does not have to be in a will. What then is the effect of a subsequent reconciliation upon the heir’s capacity to succeed? 1. 2. mere civility which may characterize their relationship is not enough. EFFECTS OF IMPERFECT DISINHERITANCE 1. does not affect the dispositions of the testator with respect to the free portion 2. Reconciliation NOTE: This refers to the resumption of genuine cordial relationship between the testator and the disinherited heir. In order for reconciliation to be effective. there is a presumption that such legacy or devise . the heir continues to be incapacitated to succeed unless the testator pardoned him under Art. A subsequent reconciliation between the offender and the offended person deprives the latter of the right to disinherit and renders ineffectual any disinheritance that may have been made. If disinheritance has been made: Rule on reconciliation applies. If disinheritance has not been made: The rule on reconciliation does not apply. (Art. reconciliation does not erase the fact that the heir is unworthy. 1.IMPERFECT DISINHERITANCE: Disinheritance which does not have one or more of the essential requisites for its validity.

pro-rata WHEN LEGACY/DEVISE CAN BE REVOKED BY OPERATION OF LAW 1. and the testator. 2. The testator by any title or for any cause alienates the thing bequeathed. subsequent to the making of the will brings an action against such debtor for payment GROUNDS FOR REVOCATION OF LEGACIES OR DEVISES . Legacies for Support 4. par. noncompliance with suspensive conditions affecting the bequests. determinate thing which forms a part of the 6. All others. or after his death without the heir’s fault 4. alienates the thing bequeathed or devised or any part thereof 3.• • • constitutes a charge against the decedent’s estate 2. it is a charge upon the heirs (Art. 926. sale of the thing to pay the debts of the deceased during the settlement of his estate. If the thing bequeathed or devised is totally lost during the lifetime of the testator. 4. or any part thereof. 1. Remuneratory legacies or devises 2. it being understood that in the latter case the legacy or devise shall be without only with respect to the part alienated EXCEPT: when the thing should again belong to the testator after alienation. or after his death without the heirs fault. The compulsory heir shall NOT be liable for the charge beyond the disposable portion given to him. by any title or for any cause. estate 7. If the testator transform the thing bequeathed or devised in such a manner that it does not retain its form and denomination 2. If the legacy is a credit against a third person or the remission of a debt. If the testator. 2) Since legacies and devises are to be taken from the disposable free portion of the estate. Legacies or devises of a specific. Legacies for Education 5. Legacies or devises declared by the testator to be preferential 3. ORDER OF PAYMENT IN CASE ESTATE IS INSUFFICIENT TO COVER ALL LEGACIES AND DEVICES 1. The thing bequeathed is totally lost during the lifetime of the testator. the provisions on institution of heirs are generally applicable to them The legatees/devisees shall be liable for the charge to the extent of the value of the legacy/devise received. If there is no administration proceedings. Other Causes: nullity of the will. 3. Testator transforms the thing bequeathed in such a manner it does not retain either the form or the denomination it had. It should not affect his legitime.

disposition is validated 3. If thing already belonged to legatee/devisee at time of execution of will – legacy/devise is void 2. If thing was acquired onerously by L/D – L/D entitled to be reimbursed If thing was acquired gratuitously by L/D – nothing is due b. If other parties are unwilling to alienate. If the owner is unwilling to part with the thing. ii. 929) General Rule: Conveys only interest or part owned by testator Exception: if testator otherwise provides – 1.code is silent but disposition should be considered valid . If testator erroneously believed that he owned the thing – legacy /devise is void If testator was not in error – i.the state should try to acquire the part or interest owned by other parties. If thing was owned by another person at time of making the will and thereafter it is acquired by legatee/devisee: a. .the order should be complied with. If testator knew that the thing did not belong to him but did not order its acquisition . He may convey less than what he owns (Article 794) Thing owned by another (Arts.legacy/device is void Exception: if testator acquire the thing onerously or gratuitously after making of the disposition. the estate should give the legatee/devisee the monetary equivalent (analogy with Article 931) 2. If testator erroneously believed that the thing belonged to him . He may convey more than what he owns . If testator ordered acquisition of the thing . the legatee/devisee should be given the monetary equivalent 2.there is an implied order to acquire and doubts must be resolved in favor of intestacy Thing already owned to the legatee/devisee (Arts 932-933) 1.VALIDITY AND EFFECT OF LEGACY Thing owned in part by testator (Art. 930-931) General Rule: 1.

but to a 3rd person and the former just acquired it from the latter. If thing was owned by testator at time will was made and L/D acquired the thing from him thereafter – law is silent *Balane – L/D deemed revoked *Tolentino – no intention to revoke (BUT if the testator has not alienated the thing directly to the L/D. there is an intention to revoke) Legacy/Devise to remove an encumbrance over a thing belonging to testator (Art 932 par 2) Legacy/Devise of a thing pledged or mortgaged (Article 934) Valid.3. if the encumbrance can be removed for a consideration The encumbrance must be removed by paying the debt unless the testator intended otherwise .

Will not probated. In such case. Ascending line – the shares are divided equally between maternal and paternal lines. Revocation. Repudiation (one or all) e. General provisions (Arts. 3. 963-969) (2) Right of representation (Arts.================================= TOPICS UNDER THE SYLLABUS III. stranger in the family b. Ineffective disinheritance (a portion) c. iii. Expiration of term or period of institution iv. b. State – in the event no heir can inherit. 970-977) B. Non-compliance or impossibility of compliance with the will. Rule of Proximity – The nearer excludes the farther – the relative nearest in degree exclude the farther one. Legal or Intestate Succession (Arts. Predecease d. INTESTATE SUCCESSION BASIC PRINCIPLES SUCCESSION IN INTESTATE 1. c. Annulment of institution of heirs. Partial institution of heir. intestacy takes place as to the undisposed portion (mixed succession) b. fiction by law created by adoption. In case of disposition made under Art. purely personal c. Testator did not make any will. e. . Disinheritance g. Division in cases where the right of representation takes place. and d.not related by blood. Rule of Barrier between the legitimate family and the illegitimate family – the illegitimate family cannot inherit by intestate succession from the legitimate family and vice-versa. In case of paternal/maternal lines ii. 978-1014. Rule of equal division – the relatives who are in the same degree shall inherit in equal shares same class Exception: a. NOTE: This is subject to rule of preference between lines. 960969) (1) Relationship (Arts. 5. When will loses its validity. Division among brothers and sisters. saving the right of representation when it properly takes place. and those in the direct ascending line shall. f. Adoptive relation – adopter/adopted. 2. Order of intestate succession (Arts. which could result to unequal shares when there is only one grandparent in the maternal line while both grandparents survived in the paternal side. Preterition In the absence of qualified heirs a. Suspensive condition did not happen ii. Descending line – difference in class in the cases of legitimate or illegitimate filiation. 2. Rule of Preference Between Lines – Direct line is always preferred over collateral lines. IN In the absence of applicable valid will a. Intestate heirs always related by blood. i. Institution subject to conditions i. 960-1014) A. 992) ================================= III. in turn. Except: a. 4. Collateral – half or full blood b. GENERAL PROVISIONS ON LEGAL OR INTESTATE SUCCESSION LEGAL OR INTESTATE SUCCESSION: That which is effected by operation of law in the absence or default of a will. Spouse . Incapacity f. Resolutory condition happens. c. d. The direct descending line shall exclude those in the direct ascending and collateral lines. 959 in general terms in favor or the testator’s relatives. only rule of proximity applies. CAUSES OF GENERAL 1. some of whom are of the full and others of half blood. exclude those in the collateral line.

incapacity or disinheritance. The adopted is deemed a legitimate child of the adopter. Disinheritance NOTE: In case of repudiation. should there be several. • Although a renouncer cannot be represented. RULES ON RELATIONSHIP 1.6. but who come from a common ancestor. REPRESENTATION: A right created by fiction of law. A right of subrogation 2. and the right of representation or accretion does not apply. If the Institution fails. he can represent the person whose inheritance he has renounced. 4. If there are several relatives of the same degree and on or more of them are unwilling or incapacitated to succeed. those of the following degree shall inherit in their own right (per capita) and cannot represent the person repudiating the inheritance. If the inheritance should be repudiated by the nearest relative. accretion takes place. Substitution occurs. If there is no substitute. Full blood: same father and mother. should there be only one. Predecease 2.R. and acquires the rights which the latter would have if he were living or if he could have inherited.] order of Justice Paras. the full blood shall take a portion in the inheritance doubt that of the half-blood. In adoption. [205 SCRA 324] CHARACTERISTICS OF REPRESENTATION 1. EFFECTS OF INCAPACITY OR REPUDIATION 1. INSTANCES OCCURS: WHEN REPRESENTATION 1. his portion shall accrue to the others of the same degree (right of accretion) save the right of representation when it should take place. Representative succeeds the decedent and NOT the person represented 5.A. Exception to the rule on proximity and equal division 3. the rule of Intestate succession shall take over. incapacity. 3. A direct line is that constituted by the series of degrees among ascendants and descendants (ascending and descending) A collateral line is that constituted by the series of degrees among persons who are not ascendants or descendants. nephews or nieces. The right of Accretion applies to the free portion when the requisites in Article 1016 are present. the legal filiation is personal and exists only between adopter and the adopted. Incapacity of Unworthiness 3. by virtue of which the representative is raised to the place and degree of the person represented. exercised only by the grandchildren of the decedent TESTAMENTARY INTESTATE When Takes Place COMPULSORY HEIR: LEGAL HEIR: dies before the testator is unworthy to succeed is disinherited Effects Upon Acquires the right with respect to the legitime Per stirpes dies before testator is unworthy succeed the to 5. follow the [I. or disinheritance 6. 2.S. CA. 7. NOTE: In all cases where there has been an institution of heirs.I. survive. Sayson v. As a general rule. Takes place when there is vacancy in the inheritance brought about by predecease. The Division Acquires the right with respect to the entire legal portion Per stirpes . Called to succession by law 4. half blood: only one of either parent is the same. or by all the nearest relatives called by law to succeed. If there is no substitute. Number of generations determines proximity Each generation forms a degree A series of degrees forms a line A line may be direct or collateral. 6. right of Representation applies in the direct descending line to the legitime of the vacancy is caused by predecease. 2. Rule of Double Share for full blood collaterals – when full and half-blood brothers or sisters.

(It is not proper only when the heir to be represented repudiated his share in the inheritance) 2. c.IN WHAT KINDS OF REPRESENTATION OPERATES 1. Is a compulsory heir. b. or was disinherited by the testator. Legitimes SUCCESSION • The children and descendants of the person disinherited shall take his or her place and shall preserve the rights of compulsory heir with respect to the legitime (Art 923) And only when the heir to be represented: a. No right of representation if the heir to be represented is a voluntary heir. All legal heirs may be represented when proper. Intestate succession Representation occurs in all intestate estate. Predecease. • . becomes incapacitated.

In the direct descending line. Representation Not applicable IN WHAT LINES DOES REPRESENTATION OBTAIN 1. NO Representation Transmits nothing. In the collateral line. b. the nephews and nieces shall inherit per capita. Representation Incapacity Transmits nothing. not grand-nieces or grandnephews). Del Val. 2. If the child to be represented is illegitimate – both legitimate and illegitimate children/descendants can represent him. Hence. NO Representation Legal Transmits nothing. [13 SCRA 406] QUALIFICATIONS TO REPRESENT 1. ILLEGITIMATE OR Factual Situation If all the children are disqualified If all the brothers /sisters are disqualified Division All grandchildren still inherit per stirpes Nephews and nieces inherit per capita If the child to be represented is legitimate – only legitimate children and descendants can represent him. NO Representation Transmits nothing. 2. it takes place only in favor of the children of brother or sisters (nieces and nephews of the decedent. 3. REPRESENTATION OF ADOPTED CHILDREN 1. whether of the full or half blood. and only if they concur with at least 1 uncle or aunt. HOW REPRESENTATION OPERATES  Division shall be made PER STIRPES. Representation does not exist in the ascending line. An adopted child can neither represent nor be represented • The rationale why an adopted child can neither represent or be represented is because the legal relationship created by the adoption is strictly between the adopter and the adopted. Representation Renunciation Transmits nothing. the father cannot represent the son in the inheritance from the grandfather. NO Representation Not applicable Disinheritance Transmits nothing. Legitime .OUTLINE OF RULES: KIND OF HEIR Compulsory Predecease Transmits nothing. The representative need not be qualified to succeed the person represented. NOTE: If all the brothers and sisters are disqualified. Representation Voluntary Transmits the direct descending line only. THE SUCCESSIONAL BARRIER • An illegitimate child has no right to inherit ab intestato from the legitimate . Intestacy: a. The representative himself must capacity to succeed the decedent have 2. Representation Transmits nothing. Teotica v. NO Representation Transmits nothing.

Illegitimate Children/Descendants 3. Nephews. Brothers. State EFFECTS OF REPUDIATION 1. State NOTE: Decedent is a legitimate person ORDER OF SUCCESSION (If descendent is a legitimate person) 1. Nephews. Legitimate Parents/ Ascendants 4. Example: A is the legitimate son of B. (Art 992) • The Barrier rule only applies if there is a legitimate and illegitimate relation. Surviving Spouse 5. Illegitimate Parents 5. Sisters. Other Collaterals – to the 5th degree 7. By representative – right of representation is present Example: A child who repudiates his inheritance when his father died may still represent the latter when his grandfather dies. 6. Sisters. 2. REGULAR ORDER OF SUCCESSION 1. C cannot inherit from B if A predeceases. Legitimate Children/Descendants 2. Surviving Spouse 5. Nieces 6. and who are deemed called based on the presumed will of the decedent. By heir – no right of representation ORDER OF INTESTATE SUCCESSION INTESTATE HEIRS: Those who are called by law to the succession either in the absence of a will or of qualified heirs. nor shall such children or relatives inherit in the same manner from the illegitimate child. or becomes incapacitated or be disinherited by B. C is the illegitimate son of A. Brothers.children and relatives of his father or mother. Nieces . Illegitimate Parents 4. Illegitimate Children/Descendants 3. Legitimate Children/Descendants 2.

Legitimate parents and illegitimate parents Surviving spouse Other collaterals within 5th degree Collateral remoter in degree and state Legitimate children Illegitimate children Legitimate parents Illegitimate Collaterals in the same degree . illegitimate children. nephews and nieces Legitimate children Illegitimate children Legitimate parents and Illegitimate parents Siblings.RULES OF EXCLUSION AND CONCURRENCE Intestate Heir EXCLUDES EXCLUDED BY Legitimate children and Legitimate descendants Illegitimate children and Descendants Ascendants. nephews nieces All other collaterals and state Legitimate children. collaterals and state Collaterals and state Collaterals and state No one Surviving spouse Illegitimate children No one Surviving spouse Legitimate children and legitimate parents Legitimate children Legitimate children and illegitimate children No one Illegitimate children and surviving spouse Surviving spouse CONCURS WITH Legitimate parents and legitimate ascendants Illegitimate parents Surviving spouse Collaterals other than siblings. collaterals and state Illegitimate parents.




If decedent was never a resident of the Philippines Personal and real property – where respectfully situated 2.WHEN DECEDENT HAS NO HEIRS 1. Nephews and nieces inherit either by Right of Representation or in their Own Right a. Personal property – to the municipality of last residence ii. A person who cannot represent a near relative cannot also represent a relative father in degree. MIXED SUCCESSION OR PARTIAL INTESTACY Mixed Succession: Succession that is effected partly by will and partly by operation of law. Rules: 1. Illegitimate Children and Descendants of legitimates cannot represent because of the barrier. CARDINAL PRINCIPLES OF INTESTATE SUCCESSION (By Justice Paras) 1. then the amount of the testamentary disposition must be deducted only from the intestate shares of the others. Right of accretion (Arts. the compulsory heirs are never excluded. never in testamentary succession because a voluntary heir cannot be represented (collateral relatives are not compulsory heirs) 3. 4. Disinheritance C. 908-910. not the exclusion theory. The Civil Code follows the concurrence theory. 10611062) E. Own Right: when they do not concur with aunts and uncles 6. A renouncer can represent. 1032) (2) Unworthiness vs. Even if there is an order of intestate succession. If the testamentary dispositions consume the entire disposable free portion. 4. then the intestate heirs who are compulsory heirs will get only their legitime. Collation (Arts. 10151023) (1) Definition and requisites (Arts. How Property is to be Used a. provided representation is proper. 2. Right of Representation in the collateral line occurs only in intestate succession. the grandchildren inherit in their own right because Right of Representation would not be proper 5. in the proportions stated above. whose legal or intestate portions exceed their respective legitmes. There can be reserva troncal in intestate succession ================================= TOPICS UNDER THE SYLLABUS IV. 2. Exception: Whenever all the children repudiate. or motu proprio. 1015-1016) B. 7. then the amount of the testamentary disposition must be deducted from the disposable free portion. the court may order the permanent trust for the benefit of the institutions concerned 8. Alternatively. 3. 739. Partition and distribution of . Assignment and Disposition of Assets a. General Rule: Grand Children always inherit by Right of Representation. 10151105) A. if decedent is a resident of the Philippines at any time i. but cannot be represented 9. The law of legitimes must be brought into operation in partial intestacy because the testamentary dispositions can affect only the disposable free portion but never the legitimes. Acceptance and repudiation of the inheritance (Arts. Provisions Common to Testate and Intestate Succession (Arts. For the benefit of public educational and charitable institutions in the respective municipalities/cities b. Real property – where situated b. If among the concurring intestate heirs there are compulsory heirs. 1024-1040) (1) Persons incapable of succeeding (Arts. Right of Representation when they concur with aunts and uncles (provided that Right of Representation is proper) b. at the instance of an interested party. If the intestate share of a compulsory heir is equal to his legitime. Capacity to succeed by will or intestacy (Arts. 1027. and those who are not compulsory heirs will get nothing. to be borne by all the intestate heirs in the proportions that they are entitled to receive from such disposable free portion as intestate heirs. The intestate shares are either equal to or greater than the legitime. but both the Illegitimate and Legitimate Children and Descendants of Illegitimates can. 1041-1057) D.

results are the same as in predecease. Incapacity c. In Intestate Succession a. the others inherit in their own rights. there is no accretion and there is no express provision on accretion. d. there is representation if there are children or descendants. it is okay to earmark parts of the free portion as long as no specific property has been designated. results are the same as in predecease. codevisees. Legitime: • In case of predecease of an heir. Disposable free portion: • Accretion takes place when requisites are present. c. Repudiation by a legal heir ELEMENTS OF ACCRETION IN TESTAMENTARY SUCCESSION 1. as long as there is no specific designation of the specific share of each legacy or devise. Accretion in testate succession only takes place in the free portion. Natural Persons . the others inherit in their own rights. representation will occur. FUNDAMENTAL PRINCIPLES IN ACCRETION 1. The one that the heir gets from accretion can be renounced separate from the inheritance attributed to the heir who will renounced the accrued inheritance. Two or more persons are called to the same inheritance. or to the same portion thereof. express will prevails over presumed will. 1091. If the cause of the vacancy is PID. the other cocompulsory heir inherits the repudiated share in their own right and not through accretion. But. 1097. II. Accretion also takes place in cases of devisees and legatees and usufructuaries under the same conditions established for heirs. NOTE: if there is neither accretion nor substitution in testamentary succession. Repudiation d. 1100. Renunciation. legacy or devise. No accretion in the legitime because when the compulsory heir repudiates his legitime. pro indiviso (aliquot share) a. In cases of legacy or devise. Incapacity of legal heir (only when representation does not apply) c. the part left vacant will lapse into testacy 4. if none. Accretion is subordinate to substitution. the others inherit in their own right. Predecease b. or legacy. 1104-1105) ================================= (Arts. 1080) (2) Partition inter vivos (3) Effects of partition (Arts. there is always accretion. Not necessarily equal. but if such requisites are not present. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION RIGHT TO ACCRETION: When two or more persons are called to the same inheritance. the part assigned to one who renounce or cannot receive his share or who died before the testator. • In case of repudiation by an heir. if none. Predecease of a legal heir (only when representation does not apply) b. • In case of incapacity. CAPACITY TO SUCCEED The following are capable of succeeding: 1. results are the same as in predecease. In intestate succession: • In case of predecease. is added or incorporated to that of his co-heirs. • In case of repudiation. 2. hence. the others inherit in their own rights. b. NOTE: The heir to whom the portion goes by the right of accretion takes it in the same proportion that they inherit 2. devisee. In testamentary succession: 1. 1078-1105) (1) Partition (Arts. Once a certain specific part of the free portion has already been specifically earmarked. In Testamentary Succession a. 1079. 2. Non-fulfillment of suspensive condition imposed upon instituted heir e. SUMMARY: I. • In case of incapacity. Ineffective testamentary disposition 2. predecease or incapacity of one (or more but less than all) of the instituted heirs that result to a vacancy in the inheritance. or co-legatees 1. 3. because substitutes are instituted by the testator. there is representation if there are children or descendants. • In case of disinheritance.

Those made to a public officer or his wife. if the one . Any person who has been convicted of an attempt against the life of the testator. or spouse d. this prohibition shall not apply to cases wherein. organization. there is no obligation to make an accusation. successor need not be alive when the term arrives. if the one incapacitated is a compulsory heir. brother. devisee or legatee be already conceived in accordance with Arts 40 and 41. Those made between persons who were guilty of adultery or concubinage at the time of the donation. surgeon. Individuals. ABSOLUTE INCAPACITY 1. community. Priest who heard the confession of the testator during his last illness. or who supplants. g. b. d. Those prohibited under Art 739 from giving and receiving donation from each other based on Morality or Public Policy a. violence. b. If institution subject to a suspensive condition – successor must be living both when decedent dies and when the condition happens c. 674a) WHO ARE INCAPABLE OF SUCCEEDING A. Those who cannot be identified – uncertain persons (Art. descendant. e. Those Prohibited under Art 1027 due to Undue Influence or Interest a.a. 3. Any person who falsifies or forges a supposed will of the decedent. or attempted against their virtue. Any heir of full age who. the church. by reason of his office. in consideration thereof. or from revoking one already made. or ascendants. order. EXCEPT if the guardian is his ascendant. Any person who has accused the testator of a crime for which the law prescribes imprisonment for six years or more. Any person convicted of adultery or concubinage with the spouse of the testator. General Rule – must be (1) living when succession opens. Those who are not permitted by law to inherit (Art. and corporations not permitted by law to inherit NOTE: Possible only in testamentary succession. and 1030 2. sister. h. f. descendants. Juridical Persons Organizations or associations which possess juridical personality incapacitated is a compulsory heir. descendants and ascendants. Relatives of such priest or minister of the gospel within the 4th degree. or alters the latter's will. 673. according to law. parents or children e. conceals. if the accusation has been found groundless. 1027) B. should fail to report it to an officer of the law within a month. c. children or any one claiming under such witness. associations. RELATIVE INCAPACITY 1. or undue influence should cause the testator to make a will or to change one already made. unless the authorities have already taken action. 2. Those made between persons found guilty of the same criminal offense. it does not affect the legitime but only the free portion. Attesting witness to execution of will. If institution subject to a suspensive term – must be alive only at the moment of decedent’s death. Any person who by the same means prevents another from making a will. chapter. NOTE: Possible only in testamentary succession. nurse. The following are incapable of succeeding by reason of unworthiness: a. NOTE: It is enough that the heir. their spouses. parents. 845) 3. or the minister of the gospel who extended spiritual aid to him during the same period b. Guardian with respect to testamentary dispositions given by a ward in his favor before the final accounts of the guardianship have been approved. even if the testator should die after the approval thereof. (756. Those not living at the time of death except Arts. Parents who have abandoned their children or induced their daughters to lead a corrupt or immoral life. or institution to which such priest or minister may belong c. Any person who by fraud. to be considered living. spouse. 1026. having knowledge of the violent death of the testator. Therefore. c. it does not affect the legitime but only the free portion. 2. Physician. 1027. Therefore. intimidation. his or her spouse. health officer or druggist who took care of the testator during his last illness f. b. and (2) not incapacitated or disqualified by law to succeed.

Right to the inheritance. If the institution of the heirs. Tacit Acceptance – one resulting from acts by which the intention to accept is necessarily implied or which one would have no right to do except in the capacity of an heir. devise or legacy shall be 5 years from the time the disqualified person took possession thereof. Those disqualified under Art. 4.). If the heir excluded from the inheritance by reason of incapacity is a compulsory heir. in which cases his guardian or representative shall be the one to accept or repudiate. If the beneficiary happens to be the POOR: a. Free and Voluntary Act 2. ADDITIONAL NOTES 1. under civil interdiction. It is total in the sense that it extends not only to the free portion but also to the legitime. • Who may accept or repudiate? Any person having the free disposal of his property UNLESS he is incapacitated such as when he is a minor. he thereby submits it to the rules on disinheritance. he should condone them in writing. Retroactive REQUISITES FOR A VALID REPUDIATION Heir repudiating must be certain of two things before repudiating: a. 2. Heir alienates some objects of the inheritance iii. c.3. Persons not incapacitated by law may succeed by will or ab intestato. When heir renounces it for the benefit of one or more heirs. CHARACTERISTICS OF REPUDIATION 1. Private Writing 2. NOTE: The action for a declaration of incapacity and recovery of the inheritance. By Operation of Law – The moment the testator uses one of the acts of unworthiness as a cause for disinheritance. judicial authorization is necessary in case of repudiation. Acceptance – person designated by the testator to determine the beneficiaries and .5) wherein it is necessary to wait until final judgment is rendered b. 3. Irrevocable once made and cannot be impugned. even though made under the guise of an onerous contract. A testamentary provision in favor of a disqualified person. However. shall be void. the time of compliance with the condition shall be considered. It can be presumed from certain acts of the heir such as: a. Death of the person from whom he is to inherit. reconciliation renders the disinheritance ineffective. Heir demands partition of the inheritance ii. PARDON OF ACTS OF UNWORTHINESS EXPRESS IMPLIED Made by the execution Effected when testator of a document or any makes a will instituting writing in which the the unworthy heir with descendent condones knowledge of the the cause of incapacity cause of incapacity Cannot be revoked Revoked when the testator revokes the will or the institution TIME TO DETERMINE THE CAPACITY GENERAL RULE: at the moment of the death of the descedent. When heir sells. except in cases vitiating consent. legacy or devise is conditional. Public Document b. 4. the latter shall acquire the incapacitated heir’s right to the legitime (by representation. 3. failure to signify acceptance or repudiation within 30 days after an order of distribution by the probate court. Express a. When renunciation is in favor of all heirs indiscriminately for consideration d. Those disqualified under Art. Other acts of tacit acceptance: i. 1032 (2. judicially declared insolvent. b. Under Article 1057. or made through an intermediary. This is applicable to both testamentary and legal succession. and if such compulsory heir has children or descendant.NOTE: The cause of unworthiness shall be without effect if the testator had knowledge thereof at the time he made the will. deaf-mute who cannot read and write. or if. EXCEPTION: a. b. 755) MANNER OF ACCEPTANCE OF INHERITANCE 1. donates. having known of them subsequently.1032 (4) wherein it is necessary to wait for the expiration for the month allowed for report c. The capacity to succeed is governed by the law of the nation of the decedent. Thus. or assigns his right. (Art.

ordinary equipment or customary gifts 5. Hence. so that a division may be effected according to law and the will of the testator. Wedding gifts consisting of jewelry. iii. in fact or by fiction. authentic instrument – equivalent to an indubitable writing or a writing whose authenticity is admitted or proved. or b. However. If an heir is both a testate and legal heir.there is repudiation because heir deemed to have not accepted. Property left by will 2. ii. Property which may have been donated by an ascendant of the compulsory heir 3.acknowledged before a notary public. NOTES: If renounced in favor of other heirs. he may still accept the inheritance as a legal heir. the executor. If gratuitous – i. If gratuitous in favor of one or some of his co-heirs – deemed conveyance in favor of the co-heirs specified. by a petition presented to the court having jurisdiction over the testamentary or intestate proceedings. Expenses incurred by parents in giving their children a professional. Acceptance – legal representative b. property which came from the estate of the decedent. accretion takes place. education. so long as they do not exceed 1/10 of the disposable portion OPERATIONS RELATED TO COLLATION 1. • • • would receive by accretion: considered as tacit acceptance. given by parents or ascendants. but which the law considers as an advance from the inheritance PROPERTIES OR RIGHTS RECEIVED BY COMPULSORY HEIR NOT SUBJECT TO COLLATION 1. Repudiation – legal representative with judicial authorization If the beneficiary happens to be a MARRIED WOMAN: she may either accept or repudiate the inheritance without her husband’s consent • How is repudiation made? The repudiation of the inheritance shall be made in: a. RATIO: The law considers that the act of repudiation is more solemn that the act of acceptance and that repudiation produces more violent and disturbing consequences. There are two transfers. ASSOCIATION. If specific heir – whether or not renouncing heir receives anything. Property donated to the spouse of the compulsory heir distribute the property. medical attendance even in extraordinary illness. OR ENTITY: a. violence. Collation – adding to the mass of the hereditary estate the value of the donation or gratuitous disposition • . clothing and outfit. hence there is acceptance. b. EFFECTS OF ACCEPTANCE AND REPUDIATION General Rule: irrevocable Exception: 1. he is understood to have repudiated in both capacities. if made through any of the causes that vitiates consent (mistake. Expenses for support. intimidation. without knowledge of being a testate heir. when an unknown will appears COLLATION: the act by virtue of which. the latter may petition the court to authorize them to accept it in the name of the heir. undue influence and fraud) 2. b. vocational. • If the heir repudiates the inheritance to the prejudice of his own creditors. or other career 6. In favor of all co-heirs but in proportion different from those they c. does it mean acceptance? It depends: a. apprenticeship. a public document . or c. To collate is to bring back or to return to the hereditary mass. In default thereof. Repudiation – beneficiaries themselves once they are determined If the beneficiary happens to be a CORPORATION. should he repudiate as a legal heir. considered as acceptance on the part of the heir. In favor of all his co heirs indiscriminately . during his lifetime. INSTITUTION. repudiation of the inheritance as a testate heir. If onerously: There is no repudiation Transfer considered to be with consideration There are also tax implications because there are two transfers. the persons who concur in the inheritance bring back to the common hereditary mass the property which they have received from him.

although it should purport to be a sale. or first cousins. PARTITION AND DISTRIBUTION . apprenticeship. and b. 4. It is not subject to any form WHO MAY EFFECT PARTITION i. All that their parents would have brought to collation if alive. or any other transaction. grandchildren are not obliged to bring to collation what their parent has received gratuitously from their grandparent) WHAT TO COLLATE 1. except perhaps when such dispositions are intended to take effect during the life of the testator and the formalities of donations are properly complied with. necessitates relationship to the decedent (in case of intestacy) or a will duly probated (in case of testacy). When expressly Prohibited by the testator himself for a period not exceeding 20 years. It includes every act which is intended to put an end to indivision among co-heirs. medical attendance. education (elementary and secondary only). ii.e. A partition inter vivos made in favor or intestate heirs could be operative. and legatees or devisees. to non-intestate heirs may suffer an impediment unless based on a valid will. Heir themselves. Voluntary heir 3. All that they may have received from the decedent during his lifetime 3. 2. as no living person can be represented except in cases of disinheritance and incapacity. this partition. When the testator should have so expressly provided. Restitution – return or payment of the excess to the mass of hereditary estate. clothing. however. or unless they impair the legitime b.2. Legatee or devisee. Reduction – determining to what extent the donation will remain and to what extent it is excessive or inofficious 4. iii. When to partition the estate would render it Unserviceable for the use for which it is intended. When Prohibited by law. 4. heirs next in degree) and not by right of representation if their parent repudiates the inheritance of the grandparent. (In such cases. aunts. and inherit by right of representation. division and assignment of a thing held in common among those to whom it may belong. Expenses incurred by parents in giving their children professional. Absolutely no collation – expenses for support. Compulsory heir. even in extraordinary illness. 3. Dispositions. 2. Any property or right received by gratuitous title during the testator’s lifetime 2. Any person who has acquired interest in the estate WHEN PARTITION CANNOT BE DEMANDED (PAPU) 1. PROPERTIES NOT SUBJECT TO COLLATION 1. compromise. NOTE: • Partition Inter Vivos – it is one that merely allocates specific items or pieces of property on the basis of the proindiviso shares fixed by law or given under the will to heirs or successors. Wedding gifts by parents and ascendants consisting of jewelry. 2. Competent court. Imputing or Charging – crediting the donation as an advance on the legitime (if the donee is a compulsory heir) or on the free portion (if the donee is a stranger) 3. nor a title therefore. PARTITION AND DISTRIBUTION : The separation. vocational or other career unless the parents so provide. PERSONS OBLIGATED TO COLLATE GENERAL RULE: compulsory heirs EXCEPTION: a. When the co-heirs Agreed that the estate shall not be divided for a period not exceeding 10 years. ordinary equipment or customary gifts. Decedent himself during his lifetime by an act inter vivos or by will. exchange. NOTE: Grandchildren may inherit from grandparent in their own right (i. 3rd person designated by the decedent WHO CAN DEMAND PARTITION 1. renewable for another 10 years. • Partition is not itself a mode of acquiring ownership. When the compulsory heir should have repudiated his inheritance • Grandchildren who survive with their uncles. and outfit except when they exceed 1/10 of the sum disposable by will. being predicated on succession. Generally not imputable to legitime: a.

or has been caused by the fault of the distributee of the property. devise or possession legacy 30 days from Must signify issuance of order acceptance/repudiation of distribution otherwise. the heirs by mutual agreement can still make the partition. deemed accepted 1 month form Right to repurchase written notice of hereditary rights sold to a sale stranger by a co-heir 10 years To enforce warranty of title/quality of property adjudicated to co-heir from the time right of action accrues 5 years from To enforce warranty of partition solvency of debtor of the estate at the time partition is made 4 years form Action for rescission of partition partition on account of lesion END OF DISCUSSION . There must be several co-heirs 2. Requisites: 1. if publicly known before making a to be insane. The prohibition to partition for a period not exceeding 20 years can be imposed on the legitime. share of true heir is allotted to mistaken heir – partition shall not be rescinded unless there is bad faith or fraud on the part of the other persons interested. • The obligation of warranty shall cease in the following cases: i. A VOID WILL MAY BE A VALID PARITION 1. The vendee is reimbursed for the price of the sale. ii. Even if a prohibition is imposed. EFFECTS OF PARTITION • Confers upon each heir the exclusive ownership of the property adjudicated. but the latter shall be proportionately obliged to pay the true heir of his share NOTE: Partition with respect to the mistaken heir is VOID. • After the partition. If the beneficiaries in the void will were legal heirs IMPORTANT PERIODS TO REMEMBER PERIODS TO REMEMBER ON PARTITION 1 month or less Testator. Between several true heirs and a mistaken heir – transmission to mistaken heir is VOID 3. Between a true heir and several mistaken heirs – Partition is VOID 2. but the legitime shall always remain unimpaired. If the prohibition to partition is for more than 20 years. and 2. each property adjudicated. 2. 3. If the will was in fact a partition. That the right of redemption must be exercised by one or more of the co-heirs within 1 month from the time they were notified in writing by the co-heir vendor 5. When the testator himself has made the partition unless his intention was otherwise. That one of them sells his right to a stranger 3. iii. Through error or mistake.PROHIBITION TO PARTITION 1. the co-heirs shall be reciprocally bound to warrant the title to (warranty against eviction) and the quality of (warranty against hidden defects). When the eviction was due to a cause subsequent to the partition. EFFECTS OF INCLUSION OF INTRUDER IN PARTITION 1. burden of will proof is on the one claiming validity of the will 20 years Maximum period testator can prohibit alienation of dispositions 5 years from To claim property delivery to the escheated to the State State 1 month To report knowledge of violent death of decedent lest he be considered unworthy 5 years from the Action for declaration of time disqualified incapacity & for recovery of person took the inheritance. the excess is void. LEGAL REDEMPTION IN FAVOR OF COHEIRS • The right of legal redemption predicated upon the fact that the sale made by the coheir is effected before the partition of the estate but after the death of the decedent. unless there has been bad faith. That the sale is made before the partition 4. When it has been expressly stipulated in the agreement of partition.

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the lessor is not entitled to compensation CONTRACT OF LEASE OF SERVICE (Locatio Operarum) The object of contract is the service itself and not the result which it generates Even if the result intended is not attained. no action for specific performance CONTRACT OF LEASE OF THING CONTRACT OF LEASE is a contract by which one person binds himself to grant temporarily. NCC) Kinds Of Lease 1.III. Registration 3. Rights and Obligations of Lessor and Lessee ========================= ======== 2. Principal contract 7. Duty to transfer ownership 3. or price Characteristics Of Lease Of Things: (CLONSPEP-TP) 1. Lease of Things B. Purpose is to allow Enjoyment or use of a thing 8. Lease of work (contract for a piece of work) One of the parties binds himself to produce a result out of his work or labor For a price certain Duties Of A Contractor Who Furnishes Work And Material 1. there can be an action for specific performance Elements Of A Tenancy Agreement (PACAPS) 1. Lease of Rural and Urban Lands 1. employer can ask another person to do it at the contractor’s expense. the use of a thing or the rendering of some service to another who undertakes to pay some rent. Nominate 5. no lease for more than 99 years shall be valid. Subject matter must be within the commerce of man (i. 3. In case of breach. Qualified persons 2. Subject matter of the relationship is an agricultural land . Lease of Work or Services C. Consensual 2. Lessor need not be the owner 3. (Art. In case of breach. 1490 and 1491 of the Civil Code are also disqualified to become lessees of the things mentioned therein. Purpose to which the thing will be devoted should not be immoral 9. Lease of service One party binds himself to render to the other some service For a price certain CONTRACT FOR A PIECE OF WORK (Locatio Operis) The object of contract is the result of the work without considering the labor that produced it If the result promised is not accomplished. Period may be definite or indefinite NOTE: Persons disqualified to buy under Arts. Contract for Piece of Work E. Parties are the landowner and the tenant or agricultural lessee 2. 1646. General Rule: The contract of lease may be made orally Exception: Lease of real property for more than 1 year (must be in writing to comply with Statute of Frauds) The object of contract is a thing Lessor has to deliver the thing leased. Onerous 4. Prohibitions D. LEASE ========================= ======== TOPIC UNDER THE SYLLABUS: A. Duty to warrant eviction and hidden defects Remedies Of Employer In Case Of Defects • Ask contractor to remove the defect or to execute another work • If contractor fails or refuses to remove the defect. Period is Temporary 10. Lease of things (whether immovable or movable property) • One of the parties binds himself to give to another the enjoyment or use of a thing • For a price certain and • For a period which may be definite or indefinite NOTE: However. not belonging to public domain) 6. compensation. Duty to deliver 2. the services of the lessor must still be paid.e.

or by reason of the loss of fruits due to ordinary fortuitous events. There being no agreement on the reasonable compensation that a lessee must pay for its continuing use and occupation of the premises after the termination of the lease. fruits. lessee has no right to a reduction of the rent on account of the sterility of land leased. [G. regardless of its period • LEASE DISTINGUISHED FROM USUFRUCT LEASE USUFRUCT Ownership on the Ownership of the thing part of the lessor is on the part of the not necessary to grantor is necessary to constitute a contract constitute a usufruct of lease It is generally a It is always a real right personal right and is a real right only by exception . last will or prescription Usufructuary has duty to make repairs Usufructuary has a duty to pay taxes Usufructuary may constitute a sublease LEASE DISTINGUISHED FROM SALE LEASE SALE Only the use or Ownership is transferred enjoyment is transferred Transfer is Transfer is permanent temporary Lessor need not be Seller must be the the owner owner at the time the property is delivered The price of the Usually. Must be capable of determination 3. Purpose of the relationship is to bring about agricultural production 5. the courts can settle the disagreements. May be in the form of products.R. There is personal cultivation on the part of the tenant or agricultural lessee and 6. 175678 (2007)] In lease of rural lands. No. courts cannot interfere. provisions. RENT is the compensation either in money. If the rent is fixed for the first time. If it is registered with Registry of Property. the selling price object (distinguished is mentioned from the rent) is usually not mentioned LEASE OF SERVICE DISTINGUISHED FROM AGENCY LEASE OF AGENCY SERVICES It is based on It is based on employment representation – the lessor of – agent represents his services does not principal and enter into represent his juridical acts employer nor does he execute juridical acts Principal contract Preparatory contract General Rule: A lease of real property is a personal right Exceptions: 1. but if it is a renewal. or construction. Increasing the rent is NOT an absolute right of the lessor. Harvest is shared between the landowner and the tenant or agricultural lessee. Must not be fictitious or nominal. as long as it has value • • • • Owner has the right to fix the rent because the contract is consensual and not imposed by law. except when the loss more than ½ of the fruits is through extraordinary and unforeseen fortuitous events unless there be stipulation to the contrary. contract. received by the lessor from the lessee. MATERCCO v. 4.3. chattels. it was proper for the lower courts to determine the same. First Landlink Asia Development Corporation. There is consent between the parties to the relationship. REQUISITES: 1. NOTE: Absence of any of the elements will not make the alleged tenant a de facto tenant. otherwise the contract is considered essentially gratuitous 2. or labor. It is limited to the use specified in the contract Lessor places and maintains the lessee in the peaceful enjoyment of the thing Its term is generally for a definite period It may be created by contract as a general rule Lessee has no duty to make repairs Lessee has no duty to pay taxes Lessee cannot constitute a usufruct of the property leased It includes all possible uses and enjoyment of the thing Owner allows the usufructuary to use and enjoy the property Its term may be for an indefinite period It may be created by law. If it is for more than one year and to be enforceable it must be in writing 2.

99-year limit applies to aliens as long as it is a lease of personal property 2. according to the custom of the place 3. 429 SCRA 418 Obligations Of The Lessee (Art. PAY THE PRICE of the lease according to the terms stipulated 2.[ G. Aliens CANNOT lease public lands. Lessee must make investments b. the lessor has no right to lease the same property. If terms are violated. Stranger knows of the existence of the lease. 713 it is not. but was led to believe that the lease would expire soon or before the new lease in favor of him begins.000 hectares Rules On Lease Of Things When Lessee Is An Alien 1. Right to be restored to said possession by the means established by law or by the Rules of Court. If lease of real property (private lands). PAY THE EXPENSES for the deed of lease Rights Of The Lessee 1. the 25-year period was extended to 50 years renewable for another 25 years provided the following conditions are met: a. Bercero v. DTI can terminate it NOTE: the ILA did not do away with P. Under the Investor’s Lease Act of 1995. Rights and Obligations of Lessor and Lessee Obligations Of The Lessor (Art 1654) (DNM) 1. Where the contract is void. and in the absence of stipulation. 154765 (2007)] Nature Of The Duty Of The Lessor To Maintain Peaceful Possession Of The Premises By The Lessor This is merely a warranty that the lessee shall not be disturbed in his legal. Right to be respected in his possession 2. Chua Tee Dee v. E. 713. Lease is approved by DTI c.D. maximum of 25 years renewable for another 25 years (P. may lease lands of public domain for a period of 25 years. and not physical. Court of Appeals.D. Under ILA the consent of DTI is required. Such third person is allowed to terminate the lease in case he buys the property from the owner-lessor 3. Husband and wife cannot lease to each other their separate properties (Exception: separation of property) 2. 713) 4. unless there is a stipulation to the contrary 3. should he be disturbed therein Remedies When Lessor Or Lessee Does Not Comply With Their Obligations 1. and cannot acquire private lands except through succession 3.R. possession. USE THE THING leased as a diligent father of a family devoting it to the use stipulated. Rescission and damages or 2. To DELIVER THE THING which is the object of the contract in such condition as to render it fit for the use intended 2. Those disqualified due to fiduciary relationship • Guardian: ward • Agent: principal • Executor and administrators • Public officer: state property • Justices/judges: property under litigation • Others disqualified by law Lease By Filipinos • May lease lands of public domain with an area of 500 hectares and may acquire not more than 12 hectares Lease By Corporations • At least 60% Filipino-owned. The lease is not binding on third persons 2. To MAINTAIN THE LESSEE IN THE PEACEFUL AND ADEQUATE ENJOYMENT OF THE LEASE for the entire duration of the contract This is true only if the contract is valid. 1657) (PUP) 1. while in P. Damages while allowing the contract to remain in force Remedy Of Lessee Is Lessor Refuses To Accept The Rentals To make a proper tender of payment and consignation in order to extinguish the debt . for having an existent contract of lease. Capitol Development Corporation. To make on the same during the lease all the NECESSARY REPAIRS in order to keep it suitable for the use to which it has been devoted. to that which may be inferred from the nature of the thing leased. Actual knowledge of existence and duration of lease is equivalent to registration 4. the stranger can still be considered innocent Persons Disqualified To Become Lessees: 1. No.D. renewable for not more than 25 years. the area not to exceed more than 1.Effects If Lease Of Real Property Is Not Registered: 1.

otherwise. If a lease contract for a definite term allows lessee to extend the term. Lessor may appropriate the improvements provided he pays the lessee ½ of its value at that time 2. Trespass in law (perturbacion de derecho): A third person claims legal right to enjoy the premises Lessor will be held liable Duration Of Lease 1. 2. “may be extended” as stipulation: lessee can extend without lessor’s consent but lessee must notify lessor. at the end of the original period. Ask for rescission. Mere fact or mere act of trespass is when the third person claims no right whatever Physical enjoyment is reduced 2. For urban lands (Art. without altering the form or substance of the property: 1. lease is from day to day If rent is paid weekly. 1682) It shall be for all time necessary for the gathering of fruits which the whole estate may yield in 1 year. there is no necessity for lessee to duly notify lessor of his desire to so extend the term. “may be extended for 6 years. rescission may be availed of if the main purpose of the lease is to provide a dwelling place and the property becomes uninhabitable. lessee can ask for reduction of the rent in proportion to the time – including the 1 st 40 days – and the part of the property of which he is deprived. Hence. 1687) If rent is paid daily. 3. For rural lands (Art. NOTE: In either case. lease is from week to week If rent is paid monthly. If lessor does not appropriate. remain in possession 4. His only right is right of removal if lessor does opt not to pay and appropriate. although it may be very annoying to him and although during the same time he may be deprived of a part of the premises. agreed upon by both parties” as stipulation: this must be interpreted in favor of the lessee. In co-ownership. leave the premises b. it is void or ineffective as against non-consenting co-owners. may either: a. Trespass in fact (perturbacion de mere hecho): Lessor is not liable for the mere fact of a trespass or trespass in fact made by a third person of a leased property. Sue for damages 3. . but lessee may remove them provided no damage is caused to the principal thing NOTE: Lessee has no right of retention of the premises if the lessor does not pay. Order repairs at the lessor’s cost 2. unless the contrary is stipulated. Suspend the payment of the rent 4. lease is from year to year Rules On Extension Of The Lease Period 1. 3. If improvement is ornamental. Lease may be without a fixed period a. lease is from month to month If rent is paid yearly. or which it may yield once b. if repairs last for not more than 40 days If repairs last for 40 days or more. Lease may be for a determinate time or fixed period Lease will be for the said period and it ends on the day fixed without need of a demand 2.Rules On Changing The Form Of The Lease The lessor can alter the thing leased provided there is no impairment of the use to which the thing is devoted under the terms of the lease Alteration can also be made by the lessee so long as the value of the property is not substantially impaired Rules In Case Of Urgent Repairs The lessee is obliged to tolerate the work. Effects If Lessor Fails To Make Urgent Repairs The lessee may: 1. no right of reimbursement. lessee may remove the improvements even if the principal thing may suffer damage. in case of substantial damage to him EFFECT OF DESTRUCTION OF THE SUBJECT MATTER WITH RESPECT TO THE LEASE IF TOTALLY IF ONLY PARTIALLY DESTROYED DESTROYED Lease is extinguished Lessee can choose between reduction of the rent and rescission Rules Upon Termination Of Lease Governing Useful Improvements Caused By The Lessee If made in good faith and suitable to the use for which the lease is intended. ordinarily the lessee. Kinds Of Trespass In Lease: 1. assent of co-owner is needed.

unless a notice to the contrary had previously been given by either party. [G. The term of the original contract has EXPIRED 2. but not those with respect to special agreements which are by nature foreign to the right of occupancy or enjoyment inherent in a contract of lease – such as an option to purchase the leased premises. Ticson. G. The lessee CONTINUED ENJOYING THE THING LEASED FOR AT LEAST 15 DAYS with the acquiescence of the lessor When There Is No Implied New Lease: 1. 154895 (2004)] Circumstances When A Sublessee Is Made Liable To The Lessor: 1. Where according to the terms of the contract. SUBLEASE A lessee may sublease the thing leased unless there is an express prohibition to do so Remedy of lessor if lessee violates prohibition: action for rescission of the lease and damages If the prohibition to sublease is not express but only implied. When there is NO DEFINITE FIXED PERIOD IN THE ORIGINAL LEASE CONTRACT as in the case of successive renewals EXTENSION DISTINGUISHED FROM RENEWAL EXTENSION OF RENEWAL OF LEASE LEASE CONTRACT CONTRACT Original contract Original contract ceases subsists to exist Creates additional Creates a new contract term PERPETUAL LEASE A lease contract providing that the lessee can stay in the premises for as long as he wants - and for as long as he can pay the rentals and its increases. No. Mallarte v. When before or after the expiration of the term. No. The lessor HAS NOT GIVEN THE LESSEE a notice to vacate 3. IMPLIED NEW LEASE (Tacita Reconducion) Lease that arises if at the end of the contract the lessee should continue enjoying the thing leased for 15 days with the acquiescence of the lessor. the lease can be extended only by the written consent of the parties thereto. Dizon v. Court of Appeals. there are two distinct leases: the principal lease and the sublease. THERE IS A NOTICE TO VACATE given by either party 2.lessee transmits sublessee) absolutely his rights and his personality disappears Sublessee does not Assignee has a direct have any direct action against the lessor. action against the there being novation lessor Subleasing is allowed Assignment is not unless there is an allowed unless the lessor express prohibition gives his consent NOTE: The sub-lessee is primarily liable to his sub-lessor and only a court can extinguish or modify this primary liability if the sub-lessor contests the pretermination of the principal lease by the lessor. 85108 (1989) In a sublease arrangement. Tamio v. SUBLEASE DISTINGUISHED FROM AN ASSIGNMENT OF A LEASE SUBLEASE ASSIGNMENT Lessee remains a Lessee is disassociated party in the contract from the original contract of lease Two leases and two Only one (lessordistinct juridical assignee who becomes relationship (lessorthe lessee) because lessee and sublessor.R. Magsaysay. it is a purely potestative condition because it leaves the effectivity and enjoyment of leasehold rights to the sole and exclusive will of the lessee. the sublease will still be allowed Duration of sublease cannot be longer than that of the lease to which it is dependent The prohibition against subleasing may not embrace the taking in of boarders.5. No. For all acts which affect the use and preservation of the thing leased in the . Period of the implied new lease is not that of the original contract but the time established in Arts 1682 and 1687 (see Duration of Lease above) Other terms of the original contract are revived except option to purchase in case such was in the original contract NOTE: Terms that are revived are only those which are germane to the enjoyment of possession.R. G. 23399 (1974)] Requisites For Implied New Lease: 1. This is not permissible. no right of extension can rise without such written consent.R.

the amount in court. 2. Provided. as the case may be. . Expiration of the period of the lease contract. or with the city or municipal treasurer. Grounds For Judicial Ejectment (SEC. That in the case of refusal by the lessor to accept payment of the rental agreed upon. 3. the lessee may either deposit by way of consignation. and consignation otherwise there is no payment Willingness to pay is not payment 3. R. within 1 month after the refusal of the latter to accept payment. upon authority of the court in case of consignation or upon joint affidavit by him and the lessee to be submitted to the city or municipal treasurer and to the bank where the deposit was made. Need of the lessor to make necessary repairs of the leased premises which is the subject of an existing order of condemnation by appropriate authorities concerned in order to make the said premises safe and habitable. 5. The rent of any residential unit covered by this Act shall not be increased by more than 10% annually as long as the unit is occupied by the same lessee. When the period agreed upon or that which is fixed for the duration of leases (Arts. without the written consent of the onwer/lessor. Any and all interest that shall accrue therein shall be returned to the lessee at the expiration of the lease contract. Arrears in payment of rent for a total of 3 months. or if he does not observe the requirement in Art 1657. 3.manner stipulated between the lessor and the lessee 2. lessee should make tender of payment. shall be allowed to withdraw the deposit. Violation of any of the conditions agreed upon in the contract 4. When the residential unit becomes vacant. When the lessee devotes thing leased to any use or service not stipulated which causes the deterioration thereof. 1682 and 1687) has expired (see Duration of Lease) 2. 9341 . No lessor or his successor-in-interest shall be entitled to eject the lessee upon the ground that the leased premises have been sold or mortgaged to a third person regardless of whether the lease or mortgage is registered or not. 21. 3. Lack of payment of the price stipulated In case lessor refuses to accept rentals. 4. 2. PROVIDING THE MECHANISMS THEREFOR AND FOR OTHER PURPOSES (APPROVED LAST DEC. Neither can he demand more than 2 months deposit which shall be kept in a bank under the lessor’s account name during the entire duration of the lease agreement. Legitimate need of the owner/lessor to repossess his /her property for his/her own use or of any immediate member of his/her family as a residential unit. 7) 1. 2005) Limitations Imposed Upon The Lessor For The Protection Of The Lessee (SECS. or in a bank in the name of the lessor and with notice to the latter. the lessor may set the initial rent for the next lessee. Failure to deposit the rental or 3 months shall constitute a ground for ejectment. including the acceptance of boarders or bedspacers.A. in accordance with the terms of the sublease.AN ACT ESTABLISHING REFORMS IN THE REGULATION OF RENT OF CERTAIN RESIDENTIAL UNITS. Assignment of lease or subleasing of residential units in whole or part. 5 AND 8) 1. For any rent due to the lessor from the lessee which the latter failed to pay • Sublessee is subsidiarily liable • Sublessee shall not be responsible beyond amount of rent due from him. No lessor may demand more than 1 month advance rent. • The lessee shall thereafter deposit the rental within 10 days of every current month. • The lessor. at the time of the extrajudicial demand by the lessor Grounds For Ejectment 1.

ESSENTIAL FEATURES: 1. It is also required that the articles of partnership must NOT be kept SECRET among the members. (Art. 3. Void ab initio .never existed in the eyes of the law. Personal liability of partners for partnership debts 3. Wages or rent. 2. there is only no partnership or association with distinct legal personality CHARACTERISTICS: 1. The parties must have legal capacity to enter into the contract. Annuity. 3. There is a meeting of the minds. property. do not establish partnership 1. LIMITED PARTNERSHIP ========================= ======== CHAPTER 1: GENERAL PROVISIONS 1. the profits shall be confiscated in favor of the State. 1769(1)) EXCEPTION: Partnership by Estoppel under Art. alone. or industry to a common fund. DEFINITION b. or industry to a common fund. (Art. ADDITIONAL REQUIREMENT FOR JURICICAL PERSONALITY a. . 2. 1803) 5. 2. Essentially contractual in nature (Art. and must be established for the common benefit or interest of the partners. 1784) 2. PARTNERSHIP ========================= ======== TOPICS UNDER THE SYLLABUS A. Co-ownership or co-possession 2. 5. Interest on loan. EFFECTS OF AN UNLAWFUL PARTNERSHIP: 1. OBLIGATIONS OF PARTNERSHIP/PARTNERSHIP TO THIRD PERSONS E. There must be a lawful OBJECT. 1409(1)) A. Delectus personae 4. c. CANNOT be partners as to third persons. "kept secret among the members" . 3. CONTRACT OF PARTNERSHIP PARTNERSHIP . 4. 1768) 3. 2. To form a common fund. The purpose or primary purpose must be to obtain profits and divide the same among the parties. ELEMENTS ELEMENTS OF A PARTNERSHIP: There shall be a partnership whenever: 1. DISSOLUTION F. 1767. Consideration for sale of goodwill of business/other property by installments A partnership must have a lawful object or purpose. otherwise. Mutual Agency (Art. When an unlawful partnership is dissolved by a judicial decree.IV. RIGHTS AND OBLIGATIONS OF PARTNERS AMONG THEMSELVES D. RIGHTS AND OBLIGATIONS OF PARTNERSHIP C. RULES TO DETERMINE EXISTENCE GENERAL RULE: Persons who are NOT partners as between themselves.a contract wherein two or more persons bind themselves to contribute money. with the intention of dividing the profits among themselves. Separate juridical personality (Art. There must be a mutual contribution of money. 1769) The following. the association shall have no legal personality and shall be governed by the provisions on CO-OWNERSHIP (Art. 4. 5. Sharing of gross returns. Receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business. property. Debt by installments or otherwise. 1775). whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived. CONTRACT OF PARTNERSHIP B. 1825 Other Rules to Determine whether a partnership exists: (Art. UNLESS such were received in payment: 1. With intention that profits (and losses) will be divided among the contracting parties. There must be a VALID CONTRACT. without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime.secrecy directed not to third persons but to some of the partners This does not mean that there could be no contractual relations amongst the parties.

1770) 3. the firm's profits in a lawful business have been increased by wrongful acts. Their use or fruits 3. That there is no legally constituted partnership DOES NOT mean that there are no contractual or legal relations among the parties. (See Arts.: Directly represents himself to anyone as a partner in an existing partnership or in a nonexisting partnership Indirectly represents himself by consenting to another representing him as a partner in an existing partnership or in a non-existing partnership Elements to establish liability as a partner on ground of estoppel: Defendant represented himself as partner/represented by others as such and not denied/refuted by defendant Plaintiff relied on such representation Statement of defendant not refuted for its . Property which belonged to each of the partners at the time of the constitution of the partnership 2. without the knowledge or participation of the partners. GENERAL VS. Persons acting as partners presumed to have entered into contract of partnership. LIMITED PARTNERSHIP—one formed by 2 or more persons having as members one or more general partners and one or more limited partners. 1411 and 1412) Judicial decree is not necessary to dissolve an unlawful partnership. Use of the term “partner” does not necessarily show existence of partnership. Must be proven. he does any of the ff. 4. not presumed. Where. The contributions of the partners shall not be confiscated unless they fall under no. PARTNERSHIP BY ESTOPPEL PARTNER BY ESTOPPEL—by words or conduct. but entitled to weight. Determinate things 2. (Art. 1356) BURDEN OF PROOF AND PRESUMPTION 1. 1770. PARTICULAR.2. 45-RPC) 4. (Art. (Art. LIMITED GENERAL PARTNERSHIP—consists of general partners who are liable pro rata and subsidiarily and sometimes solidarily with their separate property for partnership debts. LIMITED UNIVERSAL VS. Art. the latter not being personally liable for the obligations of the partnership 7. 1782) PARTICULAR PARTNERSHIP—has objects: 1. HOW PARTNERSHIP FORMED GENERAL RULE: No special form is required for the validity of a contract. Profits shall be confiscated in favor of the government. an account of that which is legal may be had. Non-use of the terms “parntership” or “partners” not conclusive as to non-existence or partnership. Specific undertaking 4. 5. the innocent partners are not precluded as against the guilty partners from recovering their share of the profits. Profits which they may acquire from all property contributed UNIVERSAL PARTNERSHIP OF PROFITS — comprises all that the partners may acquire by their industry or work during the existence of the partnership Note: Persons who are prohibited from giving donations or advantage to each other cannot enter into a universal partnership. 3. UNIVERSAL VS. PARTICULAR UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY —comprises the following: 1. Extant Parntership presumed to exist until proven terminated. 4. 3. 2. PARTNERSHIP TERM PARTNERSHIP AT WILL — one in which no fixed term is specified and is not formed for a particular undertaking or venture which may be terminated anytime by mutual agreement PARTNERSHIP WITH A FIXED TERM — the term for which the partnership is to exist is fixed or agreed upon or one formed for a particular undertaking 6. Burden of proof shifted to party denying its existence. Instruments or tools and proceeds of the crime shall also be forfeited in favor of the government. Exercise of profession or vocation GENERAL VS. (Art. EFFECT OF PARTIAL ILLEGALITY: Where a part of the business of a partnership is legal and a part illegal.

R. b.A. c. a joint venture is a FORM of PARTNERSHIP. as the case may be. Individual members of such firm. and can be individually liable therefore. Where capital is P3. although the business of pursuing to a successful termination may continue for a number of years. members incorporators. pro-rata/jointly Not all partners of existing partnership consents to representation No existing Person who represented partnership & not himself liable & those who all represented made/consented to consented. A joint venture (an American concept similar to our joint account) is a sort of informal partnership. or together with allied technical professionals. may still be considered . specifically a particular partnership which has for its object specific undertaking. Where immovable property/real rights are contributed (Art. October 3. 2000 A particular partnership is distinguished from joint venture. unless it is otherwise stipulated. executive officers. Exception – 1. CA. 9266) grants that a firm. and 2. In a joint account. recognized a distinction between these two business forms and has held that although a corporation cannot enter into a partnership. JOINT VENTURE Particular partnership distinguished from joint venture: Heirs of Tan Eng Kee v. Such firm. Registered and licensed architects shall compose at least seventy-five percent (75%) of the owners. directors. partnership. The Supreme Court has. G. to wit: 1. PARTNERSHIP VS. MANAGEMENT See Rights and Obligations of Partners Among Themselves B. among themselves. partnership. Aurbach v. Usually. 1772) Public instrument is necessary Must be registered with SEC But failure to comply shall not affect the liability of the partnership and the members thereof to third persons A “void” partnership under Article 1773. association or corporation shall be registered with the Securities and Exchange Commission and Board. Sanitary Wares. 180 SCRA 130 (1989) 9.000 or more.LIABILITIES IN ESTOPPEL All partners Partnership is liable consented to representation No existing Person who represented partnership & all himself & all those who those represented made representation liable consented. PROFESSIONAL PARTNERSHIP General Professional Partnership (Art. a partnership generally relates to a continuing business of various transactions of a certain kind. 2): Two or more persons may also form a partnership profession. It would seem that under Philippine law. 1409) 3. partnership. it may. company. however. engage in a joint venture with others. representation separately None of partners in liable existing partnership consented 8. d. association or corporation for the practice of architecture. in money or property (Art. Par. No. RIGHTS AND OBLIGATIONS OF PARTNERSHIP General Rule – A partnership begins from the moment of the execution of the contract. shareholders. 1767. for the exercise of a The Architecture Act of 2004 (R. form and obtain registration as a firm. company. 10. corporation or association may be registered or licensed as such for the practice of architecture under the following conditions: a. signed by the parties and attached to the public instrument otherwise it is VOID 2. 126881. but not necessarily a joint venture is limited to a single transaction. with no firm name and no legal personality. in relation to Article 1771. When the contract falls under the coverage of the Statute of Frauds (Art. partnership association or corporation shall be responsible for their individual and collective acts as an entity and as provided by law. Only Filipino citizens properly registered and licensed as architects under this Act may. 1771) Public instrument is necessary Inventory of the property contributed must be made. the participating merchants can transact business under their own name. however.

1821) Wrongful act or omission of any partner acting for partnership affairs makes the partnership liable (Art. As 1. Torres v.The selection or choice of the person. MUTUAL AGENCY (According to Dean Villanueva) Unless otherwise stated. first paragraph (Registration with SEC). except as among them (Art.R. Dissolution must be in good faith. does not apply to a limited partner who merely contributes his interest and is not barred from engaging in competitive . (See Art.a partnership de facto or by estoppel vis-à-vis third persons. SEPARATE JURIDICAL PERSONALITY The partnership has a juridical personality separate and distinct from that of each of the partners. G. not necessarily the right. 1823) UNLIMITED LIABILITY (According to Dean Villanueva) All partners are liable pro rata with all their properties and after partnership assets have been exhausted. 1819) Admission or representation made by any partner concerning partnership affairs is evidence against the partnership (Art. 1995 Delectus personarum. registration of partnership having a capital of less than Php 3. 1818) Partners can dispose of partnership property even when in partnership name (Art. CA. in relation to Arts.000 is recommended. 1767” partnership) from which rights and obligations may legally stem. 1804 and 1813) The existence of the partnership is closely tied-up to the particular contractual relationship of the partners (see instances of dissolution of the partnership upon change of contractual relationship. even in case of failure to comply with the requirements of Article 1772. 109248. Power to dissolve partnership – Allowed the power. 1820) Notice to any partner of any matter relating to partnership affairs is notice to the partnership (Art. Bad faith will not prevent dissolution but may result in liability for damages. a JURIDICAL PERSON. 46) business or from transacting business with the partnership as if he were a stranger ( Art. in conformity with the laws and regulations of their organization. 1 June 1960: For purposes of convenience in dealing with government offices and financial institutions. 2. 3. Doctrine of Delectus Personae: Partnership at will is predicated on the mutual desire and consent of the partners. 1824) A newly admitted partner into an existing partnership is liable for all the obligations of the partnership arising before his admission but out of partnership property shares (Art. 1808. and Bring suit. 1826) Partnership creditors are preferred to those of each of the partners as regards the partnership property (Art. all partners are considered agents and whatever any one of them may do alone shall bind the partnership (Arts. 1827) DELECTUS PERSONAE . and 1854).) PARTNERSHIP RELATIONSHIP IS FIDUCIARY IN NATURE 1. CA. 1866. July 3. The right to choose with whom to associate himself is the very foundation and essence of that partnership. Ortega v. 1816) Any stipulation against personal liability of partners for partnership debts is void. No. 320 SCRA 428 (1999) SEC Opinion. Implications: (Dean Villanueva) The assignment of a partner of his share does not make assignee a partner ( Art. Right to choose co-partners – No one can become member of partnership without the consent of all other partners 2. 1789. a partnership may: Acquire and possess property of all kinds. for all partnership debts (Art. to dissolve partnership. 1822) Partnership bound to make good losses for acts or misapplications of partners (Art. Incur obligations. 1817) Partners are liable solidarily with the partnership for everything chargeable to the partnership when caused by the wrongful act or omission of any partner acting in the ordinary course of business of the partnership or with authority from the other partners and for partner's act or misapplication of properties (Art. and may be considered by the courts as an ordinary contract (though not exactly an “Art. 1803(1).

1782) Persons suffering from civil interdiction. BUT THIS IS DOUBTFUL AND . (Art. by mere agreement of the parties Has a juridical personality separate and distinct from that of each partner Realization of profits COOWNER SHIP Created by law CORP Created by law Effect of d e a t h of stipulation to contrary. 1839(4). extendible to not more than 50 years in any one instance Stockholde r has a right to transfer shares without prior consent of other stockholde rs Manageme WHO MAY BE PARTNERS GENERAL RULE: Any person capacitated to contract may enter into a contract of partnership. the partners shall contribute the amounts necessary to satisfy the partnership liabilities (Art. EXCEPTIONS Persons who are prohibited from giving each other any donation or advantage cannot enter into a universal partnership. Persons who cannot give consent to a contract: Minors insane persons deaf-mutes who do not know how to write De Leon: There is no prohibition for partnerships to be partners. a partner may bind partnership (each partner is agent of partnership ) Death of partner results in dissolution of partnership cannot represent the coownershi p nt is vested with the Board of Directors Juridical personali ty None Purpose Duration/ Term of existence No limitation Common enjoymen t of a thing or right 10 years maximu m Has a juridical personality separate and distinct from that of each stockholde r Depends on AOI Dissoluti May be o dissolved n at any time by the will of any or all of the partners # of incorpora tors Commen cement of juridical personali ty Minimum of 2 persons From the moment of execution of contract of partnership Death of co-owner does not necessari ly dissolve coownershi p May be dissolved anytime by the will of any or all of the coowners Minimum of 2 persons None Death of stockholde r does not dissolve corporatio n Can only be dissolved with the consent of the state Minimum of 5 incorporat ors From date of issuance of certificate of incorporati on by the SEC Disposal/ Transfera bility of interest Partner may not dispose of his individual interest unless agreed upon by all partners In absence Co-owner may freely do so Power to Co-owner 50 years maximum. (7)) act with 3rd persons PARTNERSHIP DISTINGUISHED FROM COOWNERSHIP AND CORPORATION BASIS Creation PARTNERS HIP Created by a contract.Upon dissolution of the partnership.

relate to Art. ¶¶ 1 and 2 applies: liable for fruits from the time property should have been delivered without need of demand. also include obligation to preserve the promised property with the diligence of a good father of a family pending delivery. Bolanos. 106 (1954). 1999 Without prejudice to the formation of a joint venture. specific performance not available due to constitutional prohibition vs. was found liable civilly to account for the value of such service upon a finding that he wrongfully refused to perform such service. G. he is considered an “industrial and general partner” and thus. partners are not entitled to charge each other. St. 902) citing various SEC Opinions: Corporations may enter into partnership agreements on the following conditions: Authority to enter into a partnership relation is expressly conferred by the charter or the articles of incorporation (AoI). 316 SCRA 728 (1999) Property Art. manual and/or intellectual in consideration of share in the profits. Fishing Gear. BUT THEN AGAIN. injured partner may seek judicial dissolution – may include intangible or incorporeal. for services to the firm cannot. Sanitary Wares Manufacturing. be estimated and equalized by compensation of differences. 1845). . without prejudice to any other right.M. has the right to: • lien on. and without comparison of value. e. from their very nature. for the performance of which he is qualified. ¶ 1) (upon perfection of contract. not exempted from personal liability. and also for interest due and damages arising from the time the former should have complied with his or her undertaking (Art. without regard to the services of his copartners. No. MAY CORPORATIONS ENTER INTO PARTNERSHIP? Philippine Corporate Law (2001) by Dean Villanueva (p. and which is one of the inducements for the other members to enter the partnership. the surplus of partnership property after satisfying partnership liabilities to third persons (for any sum paid by the injured partner for the purchase of an interest in the partnership and for any capital or advances contributed by the latter) • • stand in place of creditors of the partnership for any payments made by the injured partner in respect of partnership liabilities.” Beatty v. Afisco v. NOTE: How tax law treats the matter: Notion of partnership no matter how created or organized: a pool of insurance companies was considered a partnership under applicable tax law. 112675. 30 “Every partner is bound to work to the extent of his ability for the benefit of the whole. credit Lim Tong Lim v. 1768 (that a partnership has a juridical personality separate from that of each of the partners) and of the essential attribute called delectus personae. 1786. 1838). 1831: with or without fraud or misrepresentation. and the nature of the business venture to be undertaken by the partnership is in line with the business authorized by the charter or AoI. only “cash or other property” (Art.IMPRACTICAL on account of Art. 1786.R. otherwise. 1790). 69 Pa. hence. after all liabilities to third persons have been satisfied indemnity by the guilty partner against all partnership debts and liabilities (Art. 95 Phil. Industry – may concur with any or both of the first two or in the absence of any one or both of them. J. If it is a foreign corporation. 7 Harris 519 BUT: a partner who has agreed to render special service to the partnership. unless contrary stipulation) If there is fraud or misrepresentation. Phil. Money – failure to contribute promised money makes the promissory-partner liable for the amount promised. or right of retention over. Tuazon v. it must obtain a license to transact business in the country in accordance with the Corporation Code of the Philippines. as generally. Wray. January 25. action for rescission may be filed and the party entitled to rescind. Aurbach v. Marsh’s Appeal.g. 180 SCRA 130 (1989) WHAT MAY BE CONTRIBUTED Must be in equal shares unless otherwise stipulated (Art. CA. involuntary servitude A limited partner is not allowed to contribute services.

1356 to 1358) VALID VOID COMMERCIAL OR TRADING PARTNERSHIP—one formed for the transaction of business PROFESSIONAL OR NON TRADING PARTNERSHIP—one formed for the exercise of a profession KINDS OF PARTNERS CAPITALIST—contributes money or property INDUSTRIAL—contributes only industry personal service GENERAL—liability to 3rd persons extends separate property LIMITED—liability to 3rd persons limited capital contribution MANAGING—manages the affairs/business the partnership LIQUIDATING—takes charge of the winding of partnership affairs upon dissolution No Public Instrument. Villareal: The safer view is De Leon’s due to his simplified view of statute. No Inventory OTHER CLASSIFICATIONS OF PARTNERSHIP As to legality of existence DE JURE PARTNERSHIP—one which has complied with all the legal requirements for its establishment DE FACTO—one which has failed to comply with all the legal requirements for its establishment As to purpose Bautista. ¶ 2) EXCEPTION: When IMMOVABLE PROPERTY/ REAL RIGHTS are contributed. Inventory (Source: Bar Review Notes for Partnership Law by Atty. in relation Art. EFFECT OF ABSENCE OF REQUIREMENTS UNDER ARTICLES 1771 AND 1773 Condition of Partnership where Real Property is Contributed No public Instrument. partnership agreement may be enforced (cf. nonetheless. 1772. With VALID . No Inventory With Public Instrument.WHEN IMMOVABLES OR REAL RIGHTS CONTRIBUTED GENERAL RULE: Failure to comply with the requirement of appearance in public instrument and SEC Registration will not affect the liability of the partnership and the members thereof to third persons. Partners have MADE A CLAIM ON THE PARTNERSHIP AGREEMENT.1773. De Leon VOID VOID VOID VALID But either party may compel execution of public instrument so it may be registered in the registry of property. Torres v. although not exactly a partnership under the Civil Code. 1773 was intended for the protection of 3rd parties. 1771 may still be considered either de facto or estoppel partnerships vis-à-vis third persons. in spite of article 1773 declaring the partnership void would not render the partnership void when: NO THIRD PARTY INVOLVED (since Art. Arts. NOTE: Partnerships void under Art. E. *public instrument + inventory* made and signed by the parties and attached to the public instrument (Arts. With Inventory VOID or to to of up With Public Instrument. CA. 1771 and 1773) is required for the benefit of third persons. 320 SCRA 428 (1999) Failure to prepare an inventory of the immovable property contributed. may even be treated as an ordinary contract from which rights and obligations may validly arise. Villareal) Atty. ( Art.

To reimburse any amount he may have taken from the partnership coffers and converted to his own use 3. 1788. 1169[1]) Remedy of the other partner is not rescission but specific performance with damages from defaulting partner (Art. business in He cannot avail himself of knowledge or information which may be properly regarded as the property of the partnership. retirement. a partner must observe the utmost good faith. To preserve said property with the diligence of a good father of a family pending delivery to partnership (Art. He cannot carry on a business of the partnership for his private advantage.PARTNERS BY ESTOPPEL—not really a partner but liable as a partner for the protection of innocent 3rd persons CONTINUING PARTNER—continues the business of a partnership after dissolution by reason of the admission of a new partner.g. To contribute on the date fixed the amount he has undertaken to contribute to the partnership 2. He cannot. take any profit clandestinely. if he fails to pay his contribution on time or in case he takes any amount from the common fund and converts it to his own use 4. 1170) Effect of failure to contribute property promised: Partners becomes ipso jure a debtor of the partnership even in the absence of any demand (See Art. and integrity in his dealings with the others: He cannot directly or indirectly use partnership assets for his own benefit. RIGHTS AND OBLIGATIONS OF PARTNERS AMONG THEMSELVES 1) OBLIGATIONS OF THE PARTNERS AMONG THEMSELVES PROMISED CONTRIBUTION Obligations with respect to contribution of property: 1. 1786) To answer for eviction in case the partnership is deprived of the determinate property contributed (Art.cannot engage in business (with same kind of business with the . 1786) 3. in conducting the business of the partnership. business opportunity) He cannot carry on another competition with the partnership. To indemnify the partnership for the damages caused to it by delay in the contribution or conversion of any sum for his personal benefits (See Art.cannot engage in business (w/n same line of business with the partnership) unless CAPITALIST PARTNER . To indemnify partnership for any damage caused to it by the retention of the same or by the delay in its contribution (Arts. death or expulsion of one of the partners SURVIVING PARTNER—after a partnership has been dissolved by death of any partner SUBPARTNER—not a member of the partnership who contracts with a partner with reference to the latter's share in the partnership OSTENSIBLE—takes active part and known to the public as partner in the business SECRET—takes active part in the business but is not known to be a partner by outside parties SILENT—does not take any active part in the business although he may be known to be a partner DORMANT—does not take active part in the business and is not known or held out as a partner C. fairness. With that. He cannot obtain for himself that he should have obtained for the partnership (e. property or industry which he may have promised to contribute (Art. To answer to the partnership for the fruits of the property the contribution of which he delayed. 1786) 2. to contribute at the beginning of the partnership or at the stipulated time the money. from the date they should have been contributed up to the time of actual delivery (Art. To pay for the agreed or legal interest. 1788) Obligations with respect to contribution of money and money converted to personal use: 1. 1788) FIDUCIARY DUTY A partnership is a fiduciary relation—one entered into and to be maintained on the basis of trust and confidence. 1163) 4. PROHIBITION AGAINST ENGAGING IN COMPETITIVE BUSINESS INDUSTRIAL PARTNER .

especially if there was a warning. A partner has received in whole or in part. ( Art. Both debts are demandable The partner who collects is authorized to manage and actually manages the partnership Obligation of partner who receives share of partnership credit Obliged to bring to the partnership capital what he has received even though he may have given receipt for his share only (Art. one where the collecting partner is creditor and the other. The other partners have not collected their shares 3. There exist at least 2 debts. ( Art. 1790) Requisites: 1. Partners (capitalist) must contribute additional capital in case of imminent loss to the business of the partnership and there is no stipulation otherwise. The capitalist partner refuses deliberately contribute (not due to financial inability) 4. Apply sum collected to 2 credits in proportion to their amounts 2.partnership expressly permits him to do so. (Art. he shall personally bear the losses. he may be required to bring to the common fund the profits he derived from the other business. 1808) Requisites: 1. 1808) 3. 1793) Requisites: 1. The majority of the capitalist partners are the opinion that an additional contribution the common fund would save the business 3. (Art. Partners must contribute equal shares to the capital of the partnership unless there is stipulation to contrary (Art. 1789) partnership) for his own account. his share of the partnership credit 2. unless there is a stipulation to the contrary. If he received it for the account of partnership. or the capitalist partners have the right to file an action for damages against the industrial partner. The partnership debtor has become insolvent CONSEQUENCES IF AN INDUSTRIAL PARTNER ENGAGES IN ANY BUSINESS: (Art. Obligations with respect to contribution to partnership capital: 1. 1808) 2. the whole sum shall be applied to partnership credit . where the partnership is the creditor 2. he may be ousted form the partnership. 1789) he can be excluded from the partnership. 1790) 2. refusal to do so shall create an obligation on his part to sell his interest to the other partners (Art. There is an imminent loss of the business the partnership 2. in either case. CONSEQUENCES IF THE CAPITALIST PARTNER ENGAGES IN A BUSINESS (which competes with the business of the partnership): 1. There is no agreement to the contrary of of to to Obligation of managing partners who collects debt from person who also owed the partnership (Art. or the capitalist partners can avail of the benefit he obtained from the business. 1792) 1.

citing Espiritu and Sibal) RIGHTS AND OBLIGATIONS WITH RESPECT Partner is appointed manager after constitution of partnership 2 or more persons entrusted with management of partnership without specification of duties/stipulation that each shall not act w/o the other's consent Stipulated that none of the managing partners shall act w/o the consent of others Concurrence of all necessary for the validity of acts Manner of management not agreed upon All partners are agents of the partnership Unanimous consent required for alteration of immovable property In case of opposition. (De Leon. Revocable only when in bad faith Power is revocable any time for any cause Each may execute all acts of administratio n Vote of partners representing controlling interest necessary to revoke power RULES FOR DISTRIBUTION OF PROFITS AND LOSSES PROFITS LOSSES With According to According to agreem agreement agreement ent Without Share of capitalist If sharing of agreeme partner is in profits is nt proportion to his stipulated capital apply to sharing contribution of losses Share of industrial If no profit partner is not sharing fixed . there is no sound reason why a person cannot also agree to bear all the losses. decision of partners owning controlling interest shall prevail Absence or disability of any one cannot be alleged unless there is imminent danger of grave or irreparable injury to partnership If refusal of partner is manifestly prejudicial to interest of partnership. Right to associate another person with him in his share without consent of other partners (subpartnership) 2. Right to inspect and copy partnership books at any reasonable hour 3. 124-125. court's intervention may be sought Other rights and obligations of partners: 1. pp. decision of majority shall prevail. In case of tie. Of course. NOTE: Stipulation exempting a partner from losses should be allowed. If a person can make a gift to another. 1795) Specific and determinate things which are not fungible where only the use is contributed Specific and determinate things the ownership of which is transferred to the partnership Fungible things (consumable) Things contributed to be sold Things brought and appraised in the inventory Specific and determinate things which are not fungible where only the use is contributed Risk is borne by partner Risk is borne by partnership Risk is borne by partnership Risk is borne by partnership Risk is borne by partnership Risk is borne by partner Partner is appointed manager in the articles of partnership Power of managing partner is irrevocable without just/lawful cause.TO MANAGEMENT BEARING THE RISK OF LOSS OF THINGS CONTRIBUTED (Art. Right to a formal account as to partnership affairs (even during existence of partnership): .as may be stipulated just and equitable losses shall be under the borne according circumstances to capital contribution Purely industrial partner not liable for losses A stipulation which excludes one or more partners from any share in the profits and losses is void. as far as THIRD PERSONS are concerned. any such stipulation may be properly declared void.

1810) Nature of partner's right in specific partnership property—a partner has an equal right to possession which is not assignable and such right is limited to the share of what remains after partnership debts have been paid Nature of partner's right in the partnership —a share in the profits and surplus 3. Persons who include their names in the partnership name even if they are not members shall be liable as a partner All partners shall be liable for contractual obligations of the partnership with their property. after all partnership assets have been exhausted: Pro rata Subsidiary Admission or representation made by any partner concerning partnership affairs within scope of his authority is evidence against the partnership Notice to partner of any matter relating to partnership affairs operates as notice to partnership. acquired while a partner Knowledge of the partner acting in the particular matter then present to his mind Knowledge of any other partner who reasonably could and should have communicated it to the acting partner Partners and the partnership are solidary liable to 3rd persons for the partner's tort or breach of trust Liability of incoming partner is limited to: His share in the partnership property for existing obligations His separate property for subsequent obligations Creditors of partnership preferred in partnership property & may attach partner's share in partnership assets Every partner is an agent of the partnership POWER OF PARTNER AS AGENT OF PARTNERSHIP Acts for carrying on in the usual way the business of the partnership Every partner is an agent and may execute acts with binding effect even if he has no authority Except: when 3rd person has knowledge of lack of authority Does not bind partnership unless authorized by other partners Act w/c is not apparently for the carrying of business in the usual way Acts of strict dominion or ownership: Assign partnership property in trust for creditors Dispose of goodwill of business Do an act w/c would make it impossible to carry on ordinary business of partnership Confess a judgment Enter into compromise concerning a partnership claim or liability Submit partnership claim or liability to arbitration Renounce claim of partnership Acts in contravention of a restriction on authority Partnership not liable to 3rd persons having actual or presumptive knowledge of the . 1807 Whenever other circumstances render it just and reasonable Duty to render on demand true and full information affecting partnership to any partner or legal representative of any deceased partner or of any partner under legal disability Duty to account to the partnership as fiduciary 2) PROPERTY RIGHTS OF A PARTNER His rights in specific partnership property His interest in the partnership His right to participate in the management (Art.4. If right exists under the terms of any agreement As provided by art. If he is wrongfully excluded from partnership business or possession of its property by his copartners 5. except in case of fraud: Knowledge. OBLIGATION OF PARTNERS WITH REGARD TO THIRD PERSONS Every partnership shall operate under a firm name. of partner acting in the particular matter.

Buyer had knowledge of lack of authority Conveyance passes title but partnership can recover if: Conveyance was not in the usual way of business. Conveyance executed in partnership name if in name of partners Title in name of all partners. when no definite term or particular undertaking is specified • By the express will of all the partners who have not assigned their interest/ charged them for their separate debts. It signifies the end of the partnership life. where the circumstances do not permit a dissolution under any other provision of this article. Conveyance in name of all partners Conveyance pass title will ASSIGNMENT OF INTEREST IN PARTNERSHIP Assignment is subject to three (3) conditions: made in good faith for fair consideration after a fair and complete disclosure of all important information as to its value RIGHTS OF AN ASSIGNEE: Get whatever assignor-partner would have obtained Avail usual remedies in case of fraud in the management . Conveyance in name if partner/partners in whose name title stands Title in name of 1/more/all partners or 3rd person in trust for partnership. Conveyance in partnership name Conveyance passes title but partnership can recover if: Conveyance was not in the usual way of business. Conveyance in partner's name Title in name of 1/ more partners.restrictions EFFECTS OF CONVEYANCE OF REAL PROPERTY BELONGING TO PARTNERSHIP Title in partnership name. by the express will of any partner at any time Title in partnership name. or Buyer had knowledge of lack of authority Conveyance does not pass title but only equitable interest. who must act in good faith. either before or after the termination of any specified term or particular undertaking • By the bona fide expulsion of any partner from the business in accordance with power conferred by the agreement B) In contravention of the agreement between the partners. partnership is not terminated but continues until the winding up of partnership affairs is completed WINDING UP—process of settling the business or partnership affairs after dissolution TERMINATION—that point when all partnership affairs are completely wound up and finally settled. or Buyer had knowledge of lack of authority Conveyance will only pass equitable interest Ask for annulment of contract of assignment if he was induced to join through any of the vices of consent Demand an accounting (only in case of dissolution) 4) RESPONSIBILITY OF PARTNERSHIP TO PARTNERS To refund the amounts disbursed by partner in behalf of the partnership + corresponding interest from the time the expenses are made (loans and advances made by a partner to the partnership aside from capital contribution) To answer for obligations partner may have contracted in good faith in the interest of the partnership business To answer for risks in consequence of its management E. or 2. DISSOLUTION AND WINDING UP DISSOLUTION—change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business. CAUSES OF DISSOLUTION: 1) Without violation of the agreement between the partners • By termination of the definite term/ particular undertaking specified in the agreement • By the express will of any partner. unless: Conveyance was not in the usual way of business.

C) By any event which makes it unlawful for business to be carried on/for the members to carry it on for the partnership Loss of specific thing promised by partner before its delivery D) Death of any partner E) Insolvency of a partner/partnership F) Civil interdiction of any partner G) Decree of court under art. except by transaction with one who: Situation 1 i. concur: TO If cause is ACT of partner. 1831) • Partner declared insane in any judicial proceeding or shown to be of unsound mind • Incapacity of partner to perform his part of the partnership contract • Partner guilty of conduct prejudicial to business of partnership • Willful or persistent breach of partnership agreement or conduct which makes it reasonably impracticable to carry on partnership with him • Business can only be carried on at a loss • Other circumstances which render dissolution equitable • Upon application by purchaser of partner's interest: o After termination of specified term/particular undertaking o Anytime if partnership at will when interest was assigned/charging order issued 1) EFFECTS OF DISSOLUTION AUTHORITY OF PARTNER BIND PARTNERSHIP GENERAL RULE: Authority of partners to bind partnership is terminated EXCEPTIONS 1. Had no knowledge/notice of dissolution. partners are liable as if partnership not dissolved. Did not extend credit to partnership Had known partnership prior to dissolution Had no knowledge/notice of dissolution/fact of dissolution not advertised in a newspaper of general circulation in the place where partnership is regularly carried on Partner cannot bind the partnership anymore after dissolution: Where dissolution is due to unlawfulness to carry on with business (except: winding up of partnership affairs) Where partner has become insolvent Where partner unauthorized to wind up partnership affairs. acting partner must have knowledge/ notice With respect to persons not partners (Art. when the ff. 1831 GROUNDS FOR DISSOLUTION BY DECREE OF COURT (Art. 1834)— Partner continues to bind partnership even after dissolution in ff. acting partner must have knowledge of such dissolution If cause is DEATH or INSOLVENCY. DEATH or INSOLVENCY (ADI) of a partner (art 1833). Had extended credit to partnership prior to dissolution & ii. when the other party/obligee: Situation 1 Had extended credit to partnership prior to dissolution & Had no knowledge/notice of dissolution. If due to ADI. Complete transactions not finished Qualifications: With respect to partners— Authority of partners to bind partnership by new contract is immediately terminated when dissolution is not due to ACT. except by agreement between: Partner and himself person/partnership continuing the business partnership creditors Rights of partner where dissolution not in contravention of agreement: Apply partnership property to discharge liabilities of partnership . or Situation 2 i. cases: Transactions in connection to winding up partnership affairs/completing transactions unfinished Transactions which would bind partnership if not dissolved. To wind up partnership affairs 2. or Situation 2 Did not extend credit to partnership prior to dissolution Had known partnership prior to dissolution Had no knowledge/notice of dissolution/fact of dissolution not advertised in a newspaper of general circulation in the place where partnership is regularly carried on 2) DISCHARGE OF LIABILITY Dissolution does not discharge existing liability of partner.

511 (1962) Due to its separate juridical personality from the individual partners. Right to subrogation in place of creditors after payment of partnership liabilities 3. “After all the (said) creditors have been paid. One or more general partners control the business 3. 406 SCRA 145 F.apply partnership property to discharge liabilities of partnership & receive in cash his share of surplus less damages caused by his wrongful dissolution If business continued by others . LIMITED PARTNERSHIP Characteristics: 1. The amount to be refunded. 115 Phil. Such duty does not pertain to partners who managed the business. Formed by compliance with statutory requirements 2. if any to pay in cash the net amount owed to partners Indemnity for damages caused by partner guilty of wrongful dissolution Continue business in same name during agreed term Posses partnership property if business is continued Partner who wrongly caused dissolution: If business not continued by others . all partners who have not wrongfully dissolved the partnership Legal representative of last surviving partner A partner’s share cannot be returned without first dissolving and liquidating the business for the partnership’s outside creditors have preference over the enterprise’s assets. Albaran. Villareal v. consistent with the partnership being a separate and distinct entity. supra. if any to pay in cash the net amount owed to partners Rights of partner where dissolution in contravention of agreement: Partner who did not cause dissolution wrongfully: Apply partnership property to discharge liabilities of partnership Apply surplus. The firm’s property cannot be diminished to their prejudice. But this is subject to the priority enjoyed by outside creditors. Ramirez. whatever is left of the partnership assets becomes available for the payment of partners’ shares. at his option Persons Authorized to Wind Up Partners designated by the agreement In absence of agreement.have the value of his interest at time of dissolution ascertained and paid in cash/secured by bond & be released from all existing/future partnership liabilities Rights of injured partner where partnership contract is rescinded on ground of fraud/misrepresentation by 1 party: 1. One or more general partners contribute to the capital and share in the profits but do not participate in the management of the business and are not personally liable for partnership obligations beyond their capital contributions . It can only pay out what it has for its total assets. must necessarily be limited to what to the firm’s total resources. Magdusa v. it is thus the partnership – having been the recipient of the capital contributions – which must refund the equity of retiring partners. Right to lien on surplus of partnership property after satisfying partnership liabilities 2.Apply surplus. Right of indemnification by guilty partner against all partnership debts & liabilities 3) SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS Assets of the partnership: Partnership property (including goodwill) Contributions of the partners Order of Application of Assets: Partnership creditors Partners as creditors Partners as investors—return of capital contribution Partners as investors—share of profits if any 4) WHEN BUSINESS OF DISSOLVED PARTNERSHIP IS CONTINUED Creditors of old partnership are also creditors of the new partnership which continues the business of the old one w/o liquidation of the partnership affairs Creditors have an equitable lien on the consideration paid to the retiring /deceased partner by the purchaser when retiring/deceased partner sold his interest w/o final settlement with creditors Rights if retiring/estate of deceased partner: To have the value of his interest ascertained as of the date of dissolution To receive as ordinary creditor the value of his share in the dissolved partnership with interest or profits attributable to use of his right.

of the business Contribute cash. civil interdiction. Right to receive return of contributions provided the partnership assets are in excess of all its liabilities REQUISITES FOR RETURN OF CONTRIBUTION OF LIMITED PARTNER: 1. WHEN GENERAL PARTNER NEEDS CONSENT/RATIFICATION OF ALL LIMITED PARTNERS: 1. Additional contributions 8. signing and swearing to a certificate. 1844 (i." 2. Possess partnership property/assign rights in specific partnership property other than for partnership purposes 5. still limited). retirement. Sharing of profits/other compensation Right of limited partner (if given) to substitute an assignee Right to admit additional partners Right of limited partners (if given) to priority for contributions . insolvency. Right to ask for dissolution and winding up by decree of court 6. at least sufficient to cover them 2. If no substantial compliance. civil interdiction. rights transferred to legal representative REQUIREMENTS FOR FORMATION OF LIMITED PARTNERSHIP: Certificate of articles of the limited partnership must state the ff.4. Right to have partnership books kept at principal place of business 2.). all general partners have an equal right in the mgt. May ask for the return of their capital contributions under conditions prescribed by law 5. insanity or insolvency of gen partner unless authorized in certificate SPECIFIC RIGHTS OF LIMITED PARTNERS: 1. Character of business 3. Time agreed upon to return contribution of limited partner 9. Name/place of residence of members 5. All liabilities of partnership have been paid/if not yet paid.unless authorized in certificate 7. Right to receive share of profits/other compensation by way of income 7. Name of partnership + word "ltd. Right to have formal account of partnership affairs whenever circumstances render it just and reasonable 5. Do any act in contravention of the certificate 2. Admit person as limited partner . etc. then the firm becomes a general partnership to third persons (but as amongst the partners. Right to have on demand true and full info of all things affecting partnership 4.e. insanity of general partner dissolves partnership LIMITED Liability extends only to his capital contributions No participation in management Right of remaining gen partners (if given) or continue business in case of death. Term for partnership is to exist 6. insanity. not agreed upon. Partnership debts are paid out of common fund and the individual properties of general partners DIFFERENCES BETWEEN GENERAL AND LIMITED PARTNER/PARTNERSHIP GENERAL Personally liable for partnership obligations When manner of mgt. matters: 1. insolvency Right of limited partner (if given) to demand/receive property/cash in return for contribution Certificate must be filed with the SEC To validly form a limited partnership. Consent of all members has been obtained Contribute cash or property only. death. Amount of cash/value of property contributed 7. Continue business with partnership property on death. Do any act which would make it impossible to carry on the ordinary business of the partnership 3. Right to inspect/copy books at reasonable hour 3. Admit person as general partner 6. all that is required is SUBSTANTIAL COMPLIANCE IN GOOD FAITH with all the requirements under Art. affixing the word “Limited” to the partnership name. Confess judgment against partnership 4. not industry Not proper party to proceedings by/against partnership Interest is freely assignable Name must appear in firm name No prohibition against engaging in business Does not have same effect. Location of principal place of business 4. property or industry Proper party to proceedings by/against partnership Interest not assignable w/o consent of other partners Name may appear in firm name Prohibition against engaging in business Retirement. retirement.

DISSOLUTION OF LIMITED PARTNERSHIP (Priority in Distribution of Assets): Those due to creditors. Supp . The remedy of a general partner who suffers from or faces interference from his limited partners is dissolution. The partnership will be considered general Lowe v. 319 F. 1848. or civil interdiction) dissolves the partnership unless the business is continued by the surviving general partners under a right stated in the certificate or with their common (i. 2 are present.d 853). (Art. For the specific property of the partnership which had been wrongfully returned to him. Any person who suffers loss by reliance on false statement in certificate may hold liable for damages any party to the certificate who knew the statement to be false at the time the latter signed the certificate or came to know such falsity subsequently but within sufficient time before reliance to enable such party to cancel or amend the certificate or file the proper petition for such purpose (under Art. In case any of the ten enumerated changes and circumstances in Art. 1864. 2. Walraven v. he cannot: (1) receive or hold as collateral any partnership property. Arizona Power & Light Co. Diversified Properties. 833). including limited partners Those due to limited partners in respect of their share in profits/compensation Those due to limited partners of return of capital contributed Those due to general partner other than capital & profits Those due to general partner in respect to profits Those due to general partner for return of capital contributed AMENDMENT OF CERTIFICATE OF PARTNERSHIP 1. Escamilla. 427 P. and Money or other property wrongfully paid or conveyed to him on account of his contribution. and restrictions of a general partner.. rights. d. insanity. 1864 and 1865 (cf. Bautista). A general partner’s DIIC (death. 55 N. insolvency. 195 P. 1853). Ramsay. conveyance. par. He shall have all the powers. 1865). The cancellation or amendment must be recorded in the SEC. limited partners will not be able to avail of the protection of the law as regards liability. a person may be general and limited at the same time provided this is stated in the certificate. Holzman v. Certificate is cancelled/amended as to set forth withdrawal /reduction of contribution LIABILITIES OF A LIMITED PARTNER To the partnership For the difference between his contribution as actually made and that stated in the certificate as having been made.3.e. and For any unpaid contribution which he agreed in the certificate to make in the future time As a trustee for the partnership For the specific property stated in the certificate as contributed by him but which he had not contributed. the assigning limited partner must also sign. even if allowed under the certificate or consented to by all. release if at that time assets of the firm are not sufficient to discharge liabilities to outside creditors. Otherwise. BUT. Art. A limited partner may also loan money to and transact other business with the firm. his right against the other members of the firm would be that of a limited partner (Art. 366 A limited partner shall not become liable as a general partner. d. Still. 1847. 1860). or (2) receive from a general partner or from the firm any payment. he takes part in the control (and management) of the business (Art. 3. It must be signed and sworn to by all the members including the new members if some are added. Actually. but with respect to his capital contribution. all) consent (Art. in case of substitution. there must be an amendment further to Arts. unless in addition to the exercise of his rights and powers as a limited one. Weil v. 1854: any violation would be fraud on such creditors.W.

GENERAL VS. DEFINITION OF AGENCY B. CA. IMPLIED AGENCY D. Exception to contractual nature: When the agency is created by operation of law Ex: Agency by Estoppel Basis: Representation The acts of the agent on behalf of the principal within the scope of his authority produce the same legal and binding effects as if they were personally done by the principal. and cause. EXPRESS V. those who are absolutely incapacitated (ex. therefore.e. there must be a meeting of the minds as to consent. As an agent. The agent is not liable where he was ignorant of the principal’s incapacity Agent Insofar as third persons are concerned. May 29. and Agent acts within the scope of his authority.V. The agency cannot be compelled by the courts to be reinstated because such relationship can only be given effect with the consent of the principal. object. An illegal termination of agency does not justify reinstatement of the agent as such. Unilateral/Bilaterial: Unilateral: if contract is gratuitous or it creates obligations for only one party (i. Insane persons) cannot be agents. Object of the contract is the execution of a juridical act in relation to third persons. Agent acts as a representative and not for himself. the agent must be able to bind himself. Orient Air Services v. ESSENTIAL ELEMENTS Consent of the parties to establish the relationship. it is enough that the principal is capacitated. AGENCY COUCHED IN GENERAL TERMS G. Nominate: it has its own name. the agent) Bilateral: if contract is for compensation or gives rise to reciprocal rights and obligations Nature: Since it is a contract. 1991 Acts That Cannot Be Agent: Personal Acts – ex. No. he can act through an agent. Insofar as his obligations to his principal are concerned. 1877-1878 C. Purpose: Extend the personality of the principal through the facility of the agent Capacity of the Parties: Principal He may be a natural or a juridical person He must be capacitated. General RULE: If a person is capacitated to act for himself or his own right. AGENCY REQUIRING SPECIAL POWER OF ATTORNEY H. with the consent or authority of the latter. RIGHTS AND OBLIGATIONS OF PRINCIPAL J. G.R. AGENCY BY OPERATION OF LAW I. MODES OF EXTINGUISHMENT ========================= ======== A. Hence. AGENCY ========================= ======== TOPICS UNDER THE SYLLABUS A. Preparatory: entered into as means to enter into other contracts Principal: does not depend on another contract for its existence and validity. DEFINITION OF AGENCY CONTRACT OF AGENCY is a contract whereby a person binds himself to render some service or to do something in representation or on behalf of another. AGENCY BY ESTOPPEL E. POWERS (ARTS. the distinguishing features of agency are its representative character & its derivative authority. Characteristics: Consensual: perfected by mere consent. making of a will Criminal or Illegal Acts Done By Nature of Relationship between Principal and Agent: Fiduciary  based on trust & confidence Agent is estopped from asserting interest adverse to his principal’s Agent must not act as an adverse party Agent must not act for an adverse party Agent must not use or disclose secret information Agent must give notice of material facts GENERAL RULE: Knowledge of the agent is . some mental capacity is necessary. SPECIAL AGENCY F. 76931.

To ratify or recognize obligations contracted before the agency. to waive objections to the venue of an action or to abandon a prescription already acquired. Special Power of Attorney . To loan or borrow money. Agent Acts in Bad Faith or Where the person claiming the benefit of the rule colludes with the agent to defraud the principal. Where the limitations upon the power created by the principal could not have been known by the 3rd instrument in writing by which one person. To accept or repudiate an inheritance. To obligate the principal as a guarantor or surety. and a special power to mortgage does not include the power to sell. To bind the principal to render some service without compensation. Where the principal has placed in the hands of the agent instruments signed by him in blank. Where the principal has ratified the acts of the agent The latter acts within the scope of his authority but in his own name. To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. To lease any real property to another person for more than one year. Requisites for Principal to be Bound by Act of Agent: The agent must act in behalf of the principal The agent must act within the scope of his authority When a principal NOT BOUND by act of agent: The latter acts without or beyond the scope of his authority in the former’s name Exceptions: Where the acts of the principal have contributed to deceive a 3rd person in good faith. POWERS (ARTS. B. to submit questions to arbitration. To bind the principal in a contract of partnership. To effect novations which put an end to obligations already in existence at the time the agency was constituted. 1877-1878) Special powers of attorney are necessary in the following cases: (PECWAM-LLBBOCARO) To make such payments as are not usually considered as acts of administration. Powers Not Included in the Power to Mortgage To sell To execute a second mortgage To mortgage for the agent’s or any 3rd persons’ benefit.imputed to the principal even though the agent never communicated it to his principal EXCEPTIONS: Where the interests of the agent are adverse to those of the principal. A special power to sell excludes the power to mortgage. EXCEPT when the transaction involves things belonging to the principal NOTE: The agent is not deemed to have . except customary ones for charity or those made to employees in the business managed by the agent. as principal. To create or convey real rights over immovable property.Submission to Arbitration Rationale: A principal may authorize his agent to compromise because of absolute confidence in the latter’s judgment and discretion to protect the former’s rights and obtain for him the best bargain in the transaction. The agent must act within the scope of his authority. Any other act of strict dominion. To waive any obligation gratuitously. He may do such acts as may be conducive to the accomplishment of the purpose of the agency. To make gifts. UNLESS clearly indicated Powers Not Included in the Power to Compromise . appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. If the transaction would be left in the hands of an arbitrator. said arbitrator may not enjoy the trust of the principal. unless the latter act be urgent and indispensable for the preservation of the things which are under administration. To compromise. The special power of attorney can be included in the general power when it specifies therein the act or transaction for which the special power is required. to renounce the right to appeal from a judgment.

a managing agent may enter into contracts that he deems reasonably necessary or requisite for the protection of the interests of his principal entrusted to his management. as a general rule. Agent in dealing with Buyer can deal with the the thing received is thing as he pleases. such a position presupposes a degree of confidence reposed and investiture with liberal powers for the exercise of judgment and discretion in transactions and concerns which are incidental or appurtenant to the business entrusted to his care and management.exceeded the limits of his authority should he perform the agency in a manner more advantageous to the principal than that indicated by him. cannot return the object sold Distinction between Agency & Guardianship AGENCY GUARDIANSHIP Agent represents a capacitated person A guardian represents an incapacitated person. Cuizon. Guardian is appointed by the court and stands in loco parentis. No. Distinction between Agency to Sell & Sale AGENCY TO SELL Agent receives the goods as the principal’s goods Agent delivers the proceeds of the sale Agent can return the object in case he is unable to sell the same to a third person SALE Buyer receives the goods as owner 3 persons are involved: principal. Agent can bind the principal. 167552. bound to act according being the owner to the instructions of his principal Distinction between Agent & Contractor AGENT INDEPENDENT CONTRACTOR Employed by the employer Acts according to his own method Agent is appointed by the principal and can be removed by the latter. G. Lease of property involves property. 2007 Distinction between Agency & Lease of Work/Service AGENCY LEASE OF WORK/SERVICE Representation Employment Agent exercises discretionary powers Lessor ordinarily performs only ministerial functions 2 persons are involved: lessor and lessee principal. April 23. Agent is subject to the directions of the Represents his principal Acts under the principal’s control and instruction Guardian is not subject to the directions of the . ward but must act for the benefit of the latter Guardian has no power to impose personal liability on the ward. Lessee cannot bind the lessor. Eurotech v. Distinction between Agency & Lease of Property AGENCY Agent is controlled by the principal.R. The powers of an agent are particularly broad in the case of one acting as a general agent or manager. since he is authorized to do such acts as may be conducive to the accomplishment of the purpose of the agency. Agency may involve things other than property. In the absence of an agreement to the contrary. Agent can make the principal personally liable. LEASE OF PROPERTY Lessee is not controlled by the lessor. agent and the 3rd person with whom the agent contracts Relates to commercial or business transactions Buyer pays the price Relates more to the matters of mere manual or mechanical execution Buyer.

EXPRESS VS. The broker should be paid his commission where he is the efficient procuring cause in bringing the sale. a broker is never entitled to commission for unsuccessful efforts. the contract between them being void as against public policy and good morals The agent assumes no personal liability where he acts within the scope of his authority The agent takes his agreed share of profits not as owner but as an agreed measure of compensation for his services The profits belong to all the partners as common proprietors in agreed proportions C. 221 SCRA 224 (1993) LAW ON DOUBLE AGENCY Disapproved by law for being against public policy and sound morality EXCEPT where the agent acted with full knowledge and consent of the principals Right of agent to compensation in case of double agency: With knowledge of both principals .recovery can be had from both principals Without the knowledge of both principals the agent can recover from neither With knowledge of one principal .negotiate contracts relative to property in behalf of others and for a compensation/fee When Broker Entitled to Compensation: Whenever he brings to his principal a party who is able and willing to take the property. IMPLIED AGENCY Express – agent has been actually authorized by the principal. either orally or in writing Implied – agency is implied from the acts of the principal. Forms of Agency GENERAL RULE: Appointment of an agent may be oral or written. The agent does not have to prove that the agency is for compensation. Efficient procuring cause: when there is a close proximate and causal connection between the efforts and labor of the agent and the principal’s sale of property. and enter into a valid contract upon the terms named by the principal. unless there is an agreement to that effect The partner binds not only the firm members but himself as well in the name and representation of the principal Simple or Commission – agent acts in his own name but for the account of the to the principal who knew of that fact and as to the agent. or from the acts of the agent which carry out the agency. or lack of action. from his silence. they are in pari delicto and the courts shall leave them as they were. scope of his authority Distinction between Agency and Partnership AGENCY PARTNERSHIP An agent must submit to the principal’s right to control A co-partner is not subject to co-partner’s right to control. agent’s sale of real property or any interest therein) Agency is presumed to be for compensation.Principal is liable for Employer not liable for torts committed by torts committed by the the agent within the independent contractor. no formal requirements EXCEPTION: When the law requires a specific form (ex. But the prima facie presumption that the agency is for a compensation may be contradicted by contrary evidence Broker . or his failure to repudiate the agency knowing that another person is acting on his behalf without authority. unless there is proof to the contrary. although the particulars may be arranged and the matter negotiated and completed between the principal and the purchaser directly However. OTHER CLASSIFICATIONS OF AGENCY As to character Gratuitous – agent receives no compensation for his services Onerous – agent receives compensation for his services As to extent of business of the principal General – agency comprises all the business of the principal Special – agency comprises one or more specific transactions As to authority conferred Couched in general terms – only acts of administration Couched in specific terms – only the performance of a specific act/s As to nature and effects Ostensible or Representative – agent acts . Manotoc Brothers v. CA.

Distinction between Agency by Estoppel & Implied Agency BASIS AGENCY BY ESTOPPEL IMPLIED AGENCY There is an actual agency Existence of actual agency No agency at all Reliance by 3rd persons Can be invoked only by a 3rd person who in good faith relied on the conduct of the principal in holding the agent out as being authorized An agent by estoppel has none of the rights of an agent. since the agent is a real agent Nature of Authority An agent by implied appointment has all the rights and liabilities of an agent. Power of Attorney . i. but includes people conversing directly through technology (ex. . used to How do you revoke an agency? In the same manner as it was constituted. 38 Phil 387 (1918) Attorney-In-Fact One who is given authority by his principal to do a particular act not of a legal character The term is. Rabot. over the telephone). Jimenez v. or even though the agency should authorize a general and unlimited management. and he did not reply to the letter or telegram What is meant by “present”? Generally. primary purpose is to evidence agent’s authority to third parties within whom the agent deals Construction of Power of Attorney: GENERAL RULE: Strictly construed and strictly pursued. held to grant only those specified powers EXCEPTION: when strict construction will destroy the very purpose of the power Ways of Giving Notice of Agency & Its Effect: By special information . By public advertisement .e. constitution by Special Information may be revoked by notice in a daily newspaper. However. even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate. although not real.when it is oral or written Implied -when it can be inferred from the acts of the agent which carry out the agency.the agent is considered as such with regard to any person provided it can be proven that 3rd persons in question read the revocation D. in loose language.ACCEPTANCE BY AGENT Forms of Acceptance by Agent: Express . “face to face”. authority to represent another.Instrument in writing by which one person. EXCEPTIONS: When the principal transmits his power of attorney to the agent who receives it without any objection When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent. AGENCY BY ESTOPPEL There is really no agency at all. appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal.the person appointed as agent is considered as such with respect to the person to whom it was given. as principal. except where the principal’s conduct are such that the agent reasonably believed that the principal intended him to act as an agent Such reliance is not needed. has actual authority to act on behalf of the principal An agency couched in general terms comprises only acts of administration. or from his silence or inaction according to the circumstances Between persons who are present – implied acceptance if the principal delivers his power of attorney to the agent and the latter receives it without any objection Between persons who are absent – acceptance not deemed implied from the silence of the agent. Will an authority embodied in a letter be sufficient? Yes. but the alleged agent seemed to have apparent or ostensible.

unless the latter act be urgent and indispensable for the preservation of the things which are under administration. to submit questions to arbitration. Extent to Which Agent May Bind the Principal Terminatio n of Authority Constructi on of Principal’s Merely advisory in nature . To loan or borrow money. To waive any obligation gratuitously. AGENCY COUCHED IN GENERAL TERMS Agency Couched in General Terms: Covers only MERE ACTS OF ADMINISTRATION even if: The principal should state that he withholds no power The agent may execute such acts as he may consider appropriate The agency should authorize a general and unlimited management How are contracts of agency construed? Contracts of agency. must be interpreted in accordance with the language used by the parties. In case of doubt. but in its strict sense. To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. GENERAL VS. resort must be had to the situation. surroundings and relations of the parties. to waive objections to the venue of an action or to abandon a prescription already acquired. If the contract is open to 2 constructions. The intention of the parties must be sustained rather than defeated. the former is to be chosen. V. one of which would uphold the intention while the other would overthrow it. F. except customary ones for charity or those made to employees in the business managed by the agent. BASIS Specific acts in pursuance of particular instructions or with restrictions necessarily implied from the act to be done No continuity of service Can not bind his principal in a manner beyond or outside the specific acts which he is authorized to perform Duty imposed upon the third party to inquire makes termination of the relationship as between the principal and agent effective as to such third party unless the agency has been entrusted for the purpose of contracting with such third party Strictly construed as they limit the The real intention of the parties is primarily determined from the language used and gathered from the whole instrument. as well as general powers of attorney. To compromise. To effect novations which put an end to obligations already in existence at the time the agency was constituted. To make gifts.include agents of all kinds. SPECIAL AGENCY G E N E R A L A G E N C T All acts S connected with the business or employment in which he is engaged N Involves continuity of service May bind his principal by an act within the scope of his authority although it may be contrary to the latter’s special instructions Apparent authority does not terminate by the mere revocation of his authority without notice to the third party SPECIAL AGENT Instruction s agent’s authority E. AGENCY REQUIRING SPECIAL POWER OF ATTORNEY Special powers of attorney are necessary in the following cases: (PECWAM-LLBBOCARO) To make such payments as are not usually considered as acts of administration. to renounce the right to appeal from a judgment. it means an agent having a special authority created by a deed.

The powers of an agent are particularly broad in the case of one acting as a general agent or manager. The special power of attorney can be included in the general power when it specifies therein the act or transaction for which the special power is required. includes interest Reimburse the agent for all advances made by him provided the agent is free from fault . To ratify or recognize obligations contracted before the agency. To accept or repudiate an inheritance. Any other act of strict dominion. The agent must act within the scope of his authority. Where the principal has placed in the hands of the agent instruments signed by him in blank. In the absence of an agreement to the contrary. RIGHTS AND OBLIGATIONS OF PRINCIPAL OBLIGATIONS OF THE PRINCIPAL Obligations of the Principal to the Agent: (CARIP) Comply with all the obligations agent contracted in representation of the principal Advance sums necessary for the execution of the agency. Special Power of Attorney . when agent so requests. To bind the principal to render some service without compensation. Requisites for Principal to be Bound by Act of Agent: The agent must act in behalf of the principal The agent must act within the scope of his authority When a principal NOT BOUND by act of agent: The latter acts without or beyond the scope of his authority in the former’s name Exceptions: Where the acts of the principal have contributed to deceive a 3rd person in good faith. April 23. He may do such acts as may be conducive to the accomplishment of the purpose of the agency. Where the limitations upon the power created by the principal could not have been known by the 3rd person.R. No. since he is authorized to do such acts as may be conducive to the accomplishment of the purpose of the instrument in writing by which one person. If the transaction would be left in the hands of an arbitrator. Eurotech v. To obligate the principal as a guarantor or surety. Cuizon. such a position presupposes a degree of confidence reposed and investiture with liberal powers for the exercise of judgment and discretion in transactions and concerns which are incidental or appurtenant to the business entrusted to his care and management. 2007 G.Submission to Arbitration Rationale: A principal may authorize his agent to compromise because of absolute confidence in the latter’s judgment and discretion to protect the former’s rights and obtain for him the best bargain in the transaction. A special power to sell excludes the power to mortgage.To lease any real property to another person for more than one year. To bind the principal in a contract of partnership. a managing agent may enter into contracts that he deems reasonably necessary or requisite for the protection of the interests of his principal entrusted to his management. Where the principal has ratified the acts of the agent The latter acts within the scope of his authority but in his own name. To create or convey real rights over immovable property. UNLESS clearly indicated Powers Not Included in the Power to Compromise . liable for reimbursement regardless of the undertaking’s success whenever agent had advanced & has no fault. appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. said arbitrator may not enjoy the trust of the principal. as principal. G. EXCEPT when the transaction involves things belonging to the principal NOTE: The agent is not deemed to have exceeded the limits of his authority should he perform the agency in a manner more advantageous to the principal than that indicated by him. 167552. Powers Not Included in the Power to Mortgage To sell To execute a second mortgage To mortgage for the agent’s or any 3rd persons’ benefit. and a special power to mortgage does not include the power to sell.

if the principal was not aware thereof When it was stipulated that the expenses would be borne by the agent. arises in 3 situations: Where the 3rd person damages or injures property or interest of the principal in the possession of the agent Where the 3rd person colludes with the agent to injure/defraud the principal Where the 3rd person induces the agent to violate his contract with the principal to betray the trust reposed upon him by the principal. he must have known or be charged with knowledge of the transaction and the terms of the agreement between the agent and subagent As to third persons – one who knows that another is acting as his agent or permitted another to appear as his professing to act as agent is estopped to deny his agency both as against his asserted principal and the third persons interested in the transaction in which he is engaged Estoppel by the Principal As to agent – one knowing another is acting as his agent and fails to repudiate his acts.government neither estopped by the mistake/error of its agents. or that the latter would be allowed only a certain sum Who can be estopped to deny agency? Estoppel of Agent. Rule where 2 persons contract separately with agent and principal Two persons may contract separately with the agent and the principal with regard to the same thing. Requisites for solidary liability of principals There are 2 or more principals The principals have all concurred in the appointment of the same agent The agent is appointed for a common transaction or undertaking NOTE: The rule in Art. as if the contract has been entered into by the principal.Indemnify the agent for all the damages which the execution of the agency may have caused the latter without fault or negligence on his part Pay the agent the compensation agreed upon or the reasonable value of the latter’s services Liability of 3rd persons to the Principal In Contract – a 3rd person is liable to the principal upon contracts entered into by his agent. insofar as the agent is involved in the tort. If the two contracts are incompatible with each other. 1915 applies even when the appointments were made by the principals in separate acts. first in right. In Tort – the 3rd person’s tort liability to the principal. is estopped to deny the agency Estoppel of Third Persons – a third person. first in right. the one of prior date shall be preferred. for immovables: first to register in good faith. for movables: first in possession. absent any inscription: first in possession or party who presents oldest title acquires ownership).e. will be estopped to deny the agency as against such other As to sub-agent – for the principal to be estopped from denying his liability to a third person. agent or 3rd persons in interest Estoppel of the Government . or accept the benefits of them. Agent’s Right of Retention: Specific (only for those goods connected with the agency) and Until the principal effects the reimbursement and pays the indemnity PRINCIPAL’S LIABILITIES FOR EXPENSES GENERAL RULE: Principal is liable for the expenses incurred by the agent EXCEPTIONS: (AFUS) If the agent acted in contravention of the principal's instructions. The solidarity arises from the common interest of the principals and not from the act of constituting the agency. This is subject. having dealt with one as an agent may be estopped to deny the agency as against the principal. unless the latter should wish to avail himself of the benefits derived from the contract When the expenses were due to the fault of the agent When the agent incurred them with knowledge that an unfavorable result would ensue. to the injury of third persons who have dealt with the apparent agent as such in good faith and in the exercise of reasonable prudence. provided that they are for the same transaction. to the rules on Double Sales under Article 1544 of the Civil Code (i. may be estopped through affirmative acts of its officers acting within the scope of their authority Distinction between Ratification and Estoppel RATIFICATION ESTOPPEL . however.

until an agent is appointed Advance necessary funds if there be a stipulation to do so (except when the principal is insolvent) Act in accordance with the instructions of the principal. he may be charged with ESTAFA. to do all that a good father of a family would do Exceptions (to the rule that the agent must . and in default thereof. principal knowingly permits/holds out the agent as possessing the necessary powers to act in a certain way AUTHORITY BY ESTOPPEL Where the principal. permits his agent to exercise powers not granted to him. even though the principal may have no notice or knowledge of the conduct of the agent OBLIGATIONS OF THE AGENT OBLIGATIONS OF THE AGENT TO THE PRINCIPAL General: (GOC) Act with utmost good faith & loyalty for the furtherance of principal’s interests Obey principal’s instructions Exercise reasonable care Specific: (FADI – CALAMARI) Carry out the agency Answer for damages which through his nonperformance the principal may suffer Finish the business already begun on the death of the principal should delay entail any danger (exception to the rule that death extinguishes agency) Observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner in case he declines an agency. he prefers his own Not to loan to himself if he has been authorized to loan money at interest Render an account of his transactions and deliver to the principal whatever he may have received by virtue of the agency (If the agent fails to deliver and instead converts or appropriates for his own use the money or property belonging to his principal.) Be responsible in certain cases for the act of the substitute appointed by him Pay interest on funds he has applied to his own use Distinctions between Authority and the Principal’s Instructions AUTHO INSTRU RITY CTIONS Sum total of the Contemplates only a powers committed to private rule of guidance the agent by the to the agent. principal independent and distinct in character Refers to the manner or mode of agent’s Relates to the action subject/business with which the agent is empowered to deal or act Limitations of authority Without significance as are operative as against those with against those who neither knowledge nor have/charged with notice of them knowledge of them Contemplated to be Not expected to be made known to third made known to those persons dealing with with whom the agent the agent deals When agent has a right to disobey the principal’s instructions: When the instruction calls for the performance of illegal acts Where he is privileged to do so to protect his security in the subject matter of the agency Substance of estoppel is the principal’s inducement to another to act to his prejudice Distinction between Apparent Authority & Authority by Estoppel APPARENT AUTHORITY Though not actually granted. by his negligence.Rests on intention Affects the entire transaction from the beginning Substance of ratification is confirmation of an authorized act or conduct after it has been done Rests on prejudice Affects only relevant parts of the transaction not depart from the instructions of principal): (SAI) There’s a sudden emergency If the instructions are ambiguous If the departure is so insubstantial that it does not affect the result and the principal suffers no damage thereby Not to carry out the agency if it would manifestly result in loss or damage to the principal Answer for damages if there being a conflict between his & his principal’s interests.

it shall be valid if it is beneficial to the principal. may recover compensation With respect to principal . or before the principal has signified his willingness to ratify the agent’s acts. When 3rd persons can repudiate the contract Before actual ratification by the principal. it shall be VOID unless the principal ratifies it. as if the agent had acted under original authority but not liable for acts outside the authority approved by his ratification With respect to 3rd persons . If there is authority to appoint and sub-agent is designated by the principal.bound by ratification to the same extent as if the ratified act had been authorized. in which case. he will be liable to 3rd persons for the acts of the sub-agent within the scope of his authority If there is a prohibition but nevertheless the agent appoints a sub-agent. The act or conduct of the principal rather than his communication is the key. If there is authority to appoint and sub-agent is not designated by the principal. A principal may not accept the benefits of a transaction and at the same time repudiate its burdens Conditions for Ratification: The principal must have capacity and power to ratify He must have had knowledge of material facts He must ratify the acts in its entirety The act must be capable of ratification The act must be done in behalf of the principal To be effective.assumes responsibility for the unauthorized act.When obligation to account not applicable: If the agent acted only as a middleman with the task of merely bringing together the vendor and the vendees. If the appointment of a sub-agent is not authorized but not prohibited. ratification need not be communicated or made known to the agent or the third party. The existence of emergency or other unusual conditions may operate to invest in an agent authority to meet the emergency. and for negligence of his fellow agent(s) been expressly of the agents (1) the non(2) the fault or authority. should the principal incur damage due to such appointment. The means adopted are reasonable under the circumstances. and to his principal for acting without authority. When agent may incur personal liability When the agent expressly binds himself When the agent exceeds his authority When an agent by his act prevents performance on the part of the principal When a person acts as an agent without authority or without a principal A person who purports to act as agent of an incapacitated principal Appointment of Sub-agent: If the principal has not prohibited the agent from appointing a substitute. the agent is released from any liability from the acts of the sub-agent. DOCTRINE OF AGENCY BY NECESSITY An agency can never be created by necessity. provided: (PURE) The agent’s enlarged authority is exercised for the principal’s protection The agent is unable to communicate with principal. each becomes solidarily liable for fulfillment of the agency. the third party is free to revoke the unauthorized contract. the agent will be liable for all the acts of the sub-agent if the sub-agent is notoriously incompetent or insolvent. But before ratification. what is actually created is additional authority in an agent appointed and authorized before the emergency arose.relieves the agent from liability to the third party for the unauthorized transaction. Effects of Ratification With respect to agent . Effect of the principal receiving the benefits of the transaction He is deemed to have ratified it. the agent shall be primarily responsible for the acts of the sub-agent. But. Responsibility of 2 or More Agents Appointed Simultaneously: GENERAL RULE: Liable jointly EXCEPTION: When solidarity has stipulated. If the agent had informed the principal of the gift/bonus/profit he received from the purchaser and his principal did not object thereto. all the subagent’s acts are void as to the principal. cannot raise the question of the agent’s authority to do EXCEPTION TO THE EXCEPTION: when one of the other agent/s acts beyond the scope of his authority – innocent agent is NOT liable Effect where 3rd person aware of limits of agent’s power: If the agent exceeds his . Where a right of lien exists in favor of the agent. The emergency really exists.

Principal. may seek recourse from the agent Principal civilly liable so long as the tort is committed by the agent while performing his duties in furtherance of the principal’s business Principal is liable for damages Only the damages agent is liable for . Borse NOTE: Agent always liable for fraud but not for negligence. that the bringing of legal proceedings is not deemed ratification where the principal’s action is undertaken to avert a greater loss rather than to assert a gain.the ratified act Ratification is spelled out when the principal brings legal proceedings to enforce the contract entered into by the unauthorized agent. which shall be judged with more or less rigor by the courts. however. according to whether the agency was or was not for compensation. Robinson v. subject to qualification. however. Mismanageme nt of the business by the agent Tort committed by the agent Agent in good faith but prejudices 3rd parties Agent in bad faith and prejudices 3rd persons Principal still responsible for the acts contracted by the agent with respect to 3rd persons.

ACTS OF THE AGENT In behalf of the principal. he can sue the principal. within the scope of authority EFFECT Binds principal. he can sue both. For the agent’s own benefit – principal still liable. But if it cannot be determined without litigation who is liable. Without or beyond scope of authority Contract is unenforceable as against the principal but binds the agent to the third person Not binding on the principal. Agent not personally liable EXCEPTION(S) Agent liable if he: Expressly makes himself liable Exceeds the limits of his authority without giving the parties sufficient notice of his powers Binding on the principal when: Ratified or The principal allowed the agent to act as though he had full powers When the transaction involves things belonging to the principal: Remedy of the principal . Principal has no cause of action against the 3rd parties and vice versa Within the scope of authority but in the agent’s name Within the scope of the written power of attorney but agent has actually exceeded his authority according to an understanding between him & the principal With improper motives Insofar as 3rd persons are concerned (not required to inquire further than the terms of the written power. agent acted within scope of his authority.damages for agent’s failure to comply with the agency Remedies of the third person If the case falls under the general rule. valid Third person knew agent was acting for his own benefit: principal is not liable to 3rd third person Owner is seeking recovery of personal property of which he has been unlawfully deprived Authorized . But when the contract involves things belonging to the principal. agent’s motive immaterial . as long as within the scope of authority. Principal estopped Motive is immaterial. he can sue the agent.principal still liable Beyond the scope of the agent’s authority GR: Principal not liable Exception: principal takes advantage of a contract or receives benefits made under false representation of his agent 3.

he shall bear the risk of collection and shall pay the principal the . sell on credit. the loss or destruction of the subject matter of the agency terminates the Distinction between Ordinary Agent & Commission Agent ORDINARY AGENT COMMISSION AGENT Acts for and in behalf May act in his own of his principal name or in that of the principal Need not have Must be in possession possession of the of the thing he principal’s goods disposes Obligations of a Commission Agent: (RMCB) Responsible for the goods received by him. should he do. generally: (ASO) Agreement Subsequent acts of the parties which may be either: By the act of both parties or by mutual consent By the unilateral act of one of them NOTE: Even if the reason for extinguishing the agency is not true. insanity or insolvency of the principal or of the agent. Capacitated and Solvent Modes of extinguishing an agency. Distinction between Commission Agent & Broker COMMISSION AGENT BROKER Engaged in the No custody or purchase and sale for a possession of the thing principal of personal he whose business is to receive and sell goods for a commission and who is entrusted by the principal with the possession of goods to be sold. upon the outbreak of war. as described in the consignment. 1919) The list not exclusive. Presumption of Continuance of Agency when once shown to have existed. By the death. may be extinguished by the modes of extinguishment of obligations in general whenever they are applicable. UNLESS he proves. principal may demand payment in cash. civil interdiction. like loss of the thing and novation Agency is TERMINATED. By its revocation. By the dissolution of the firm or corporation which entrusted or accepted the agency (Art. make a distinction by counter marks and designate the merchandise respectively belonging to each principal He cannot. By the withdrawal of the agent. causes particular only to agency.Commission Agent . buyer or seller. Continuance of Agency Parties must be Present. an agency relation will be presumed to have continued. The agent shall be liable for damages if he does not collect the credits of his principal at the time when they become due and demandable. UNLESS upon receiving them he should make a written statement of the damage and deterioration suffered by the same If goods are of the same kind and mark but belonging to different owners. By the accomplishment of the object or purpose of the agency. the agent cannot insist on reinstatement. but the commission agent entitled to any interest/benefit which may result from such sale If an agent receives guarantee commission (a del credere agent). an be placed in his intermediary between possession and the seller and the disposal buyer Has a relation with principal. as a matter of law. J. in the absence of anything to show its termination. merely a property which has to go-between. MODES OF EXTINGUISHMENT Agency is Extinguished: (EDWARD) By the expiration of the period for which the agency was constituted. The agent can only demand damages. What happens if the subject matter of the agency is lost or destroyed? In the absence of any agreement by the parties to the contrary. that he exercised due diligence for that purpose. and usually selling in his own name. and property which is the object of the transaction Maintains no relation with the thing which he purchases or sells proceeds of the sale on the same terms agreed upon with the purchaser. without consent of the principal.

the authority of the agent is terminated EXCEPTIONS: If the original circumstances are restored within a reasonable period of time.termination of the agency by the subsequent act of the agent May the agency be extinguished at will? AGENT may do so but subject to the contractual obligations owing to the principal (i.e. fixed period of time for the agency or purpose not yet accomplished). it may continue in existence as to other property not affected If the loss brought about by the principal (ex. the agent's authority to act will not terminate upon a change of circumstances if the agent knows the principal is aware of the change and does not give him new instructions Revocation . rights & obligations are not transmissible EXCEPTIONS: Agency by operation of law. the agent's authority may be revived Where the agent has reasonable doubts as to whether the principal would desire him to act. or a presumed or tacit agency Agency is coupled with an interest in the subject matter of the agency (ex. A partial loss or destruction does not always result in a complete termination of the agency. He can do so impliedly. abandons the object of agency and acts for himself in committing a fraud upon his principal. while the agency may be ended in so far as the destroyed property is concerned.liable for damages if the principal suffers damages thereby UNLESS the agent should base his withdrawal upon the impossibility of continuing the performance of the agency without grave detriment to himself The mere fact that the agent violates his . if subject matter is lost without principal’s fault. which was not contemplated by the parties and which would reasonably lead the agent to believe that the principal would not desire him to act. and under such circumstances. no liability assumed by him Change of Circumstance: GENERAL RULE: when there is a basic change in the circumstances surrounding the transaction. power of sale in a mortgage). principal sells subject matter to another party even if an agent has been constituted in reference to it). he files a complaint against the principal and adopts an antagonistic attitude towards him with just cause . such as: Where he has conducted himself in a manner incompatible with his duties as agent When he abandons the object of his agency and acts for himself in committing a fraud upon his principals When he files a complaint against the principal and adopts an antagonistic attitude towards him Exceptions to Extinguishment by Death (CKID) If the agency is coupled with an interest If the act of the agent was executed without the knowledge of the death of the principal and the third person who contracted with the agent acted in good faith To avoid damage If it has been constituted in the common interest of the principal and of the agent.termination of the agency by the subsequent act of the principal Renunciation/Withdrawal . principal liable for damages for his wrongful terminating act. or in the interest of a third person who has accepted the stipulation in his favor Can the heirs continue the agency? GENERAL RULE: agency calls for personal services on the part of the agent. his authority will not be terminated if he acts reasonably Where the principal and agent are in close daily contact.agent‘s authority to deal with reference to it EXCEPTIONS: If it is possible to substitute other material for that which was destroyed without substantial detriment to either party If the destroyed subject matter was not in fact essential to the contract A partial loss or destruction Form of renunciation It is not always necessary for the agent to renounce the agency expressly.. Exceptions to Extinguishment Upon Loss or Destruction of Subject Matter If it is possible to substitute other material for that which was destroyed without substantial detriment to either party or if the destroyed subject matter was not in fact essential to the contract. Expressly or impliedly conducted himself in a manner incompatible with his duties.give due notice without just cause .

PRINCIPAL may also revoke the agency at will EXCEPTION: agency coupled with interest When a bilateral contract depends upon the agency When the agency is the means of fulfilling an obligation already contracted When a partner is appointed as manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. sufficient notice if the party to be notified actually knows. or has reason to know. the principal shall be liable for damages occasioned by the wrongful discharge of the agent before the expiration of the period fixed Even if there was no time fixed for the continuance of the agency. or deals directly with 3rd persons Effect of Issuance of a Special Power of Attorney: The general power is impliedly revoked as to matters covered by the special power because a special power naturally prevails over a general notice always necessary.instructions does not amount to renunciation. but the agent can prove that the principal acted in bad faith by revoking the agency in order to avoid the payment of commission about to be earned.notice by publication is enough Effect of Extinguishment without Notice Act of agent deemed valid insofar as 3 rd parties acting in good faith and without knowledge of revocation .actual notice must be given to them because they always assume the continuance of the agency relationship As to other persons . and although he may thus render himself liable to the principal. a fact indicating that his authority has been terminated/suspended. he does not cease to become an agent. revocation without notice to the agent will not render invalid an act done in pursuance of the authority As to 3rd persons – express notice necessary As to former customers . Principal’s Liability for Damages despite Revocation If the agency was constituted for a fixed period. effective as between the principal and the agent only if communicated to the agent. Exception to the exception: when the agent acts to defraud the principal Implied Revocation of Agency Principal appoints a new agent for the same business or transaction (only if there is incompatibility). does not prejudice rights of third persons acting in good faith without knowledge of the revocation Principal directly manages the business entrusted to the agent. the principal can be held liable for damages Necessity of Notice of Revocation As to the agent .

It may be a lease. Secured transactions – those supported by a collateral or an encumbrance of property 2. There is no stipulation as to the duration of the contract or use of the thing loaned ii. Personal: Death of lender/borrower EXTINGUISHES the contract . that the trust shall be faithfully executed and the property returned or duly accounted for when a special purpose is accomplished or kept until the bailor reclaims it. being consensual. Commodatum the delivery of property of one person to another in trust for a specific purpose. Real Contract – delivery is essential for perfection of the loan (BUT a promise to lend. BAILEE – The recipient. with a contract. Mutuum 2. the party who receives the possession/custody of the thing delivered LOAN CHARACTERISTICS 1. the party who delivers possession/custody of the thing bailed 2. CREDIT TRANSACTIONS ============================ ===== TOPIC UNDER THE SYLLABUS: A. COMMODATUM VS. express or implied 2. COMMODATUM – bailor delivers to bailee a non-consumable thing so that the latter may use it for a certain time and return the identical thing Kinds of commodatum: a. Precarium – bailor may demand the thing loaned at will. Ordinary commodatum – bailee uses the thing for a certain period of time b. Real or Property – when an encumbrance is made on property (e. but may also be created by operation of law.g. Gratuitous: If there is compensation. Loan 1. BAILOR – The lender/giver. 2. services or money in the present with a promise to pay or deliver in the future (contract of security) 2 Types of Credit Transactions: 1. is binding upon the parties) 2. Obligations of bailor and bailee 3. deposited or serving as a means to ensure the fulfillment or enforcement of an obligation or of protecting some interest in the property 2 Types of Security: 1. MUTUUM KINDS 1. Use of the thing is merely tolerated by the owner 2. then it’s not commodatum. it is contractual.only the borrower has the obligation 1. exists in cases where: i. express or implied. Generally. To repay the same amount of the same kind and quality.lender delivers to the borrower money or other consumable thing upon the condition that the latter will pay the same amount of the same kind and quality LOAN 1. w/ or w/o interest CREDIT Ability of an individual to borrow money or things by virtue of the confidence or trust reposed by a lender that he will pay what he may promise w/in a specified period COMMODATUM (Articles 1935-1952) CHARACTERISTICS AND CERTAIN RULES TO REMEMBER: 1.VI. Unilateral Contract . Unsecured transactions – those supported only by a promise to pay or the personal commitment of another such as a guarantor or surety SECURITY is something given. Interest and the suspension of usury law =========================== =========== CREDIT TRANSACTIONS include all transactions involving the purchase or loan of goods. MUTUUM OR SIMPLE LOAN . mortgage or pledge) BAILMENT . PARTIES IN BAILMENT 1. Personal – when an individual becomes a surety or a guarantor 2. Delivery by one party and the receipt by the other party of a given sum of money or other consumable thing upon an agreement.

or of the wife or children under his parental authority If the bailee imputes to the bailor any criminal offense. BAD FAITH – if the bailee devotes the thing to any purpose different from that for which it has been loaned b.3. Lender does not have to be the owner of the thing loaned in commodatum Right of retention: a. 4. To take care of the thing with ordinary diligence 2.he keeps it longer than the period stipulated or after the accomplishment of the use for which the commodatum has been constituted c. HAS BEEN DELIVERED W/ APPRAISAL . OBLIGATIONS OF BAILOR AND BAILEE OBLIGATIONS OF BAILEE (borrower) 1. The enjoyment of the fruits must only be incidental to the use of the thing itself . LENDS THE SUBJECT MATTER TO A 3RD PERSON .being able to save the thing borrowed or his own thing. the presumption is that they are solidarily liable Fruits: a stipulation to make use of fruits is valid. 6. 5. 1946) – the contract is suspended b. he chose to save the latter 2. DELAY . but it is never presumed. May demand the thing at will when the contract is a precarium . UNLESS the crime or the act has been committed against the bailee himself. EXCEPTION: the members of the borrower’s household may make use of the thing iii. 1948) • If the bailee should commit an offense against the person. UNLESS there is a stipulation exempting the bailee from responsibility in case of a fortuitous event • 2. Bailee commits an act of ingratitude (Art. INGRATITUDE . even though he should prove it. Borrower can’t lend or lease the thing to third persons i. Primary obligation of the bailor: General Rule: To allow the bailee the use of the thing loaned for the duration of the period stipulated or until the accomplishment of the purpose for w/c the commodatum was constituted. or any act involving moral turpitude. the honor or the property of the bailor. d.if enjoyment of fruits is primary reason. Bailor has an urgent need for the thing (Art. Borrower can’t retain the thing loaned just because he has claims against lender b. EXCEPTION: when stipulated that he can ii. If consumable. or children under his authority If the bailee unduly refuses the bailor support when the bailee is legally or morally bound to give support to the bailor • When borrower is liable for loss of the thing (ADLIB) a. If there are two or more borrowers. To be liable for loss due to fortuitous event if stipulated that he is such OBLIGATIONS OF THE BAILOR (lender) (ADREAD-HA) 1. Borrow can retain if he suffers damages by reason of hidden flaws in the thing lent (1951) Presumption of solidary liability of borrowers a. a.he lends or leases the thing to a third person who is not a member of his household e. it must be for exhibition (1936) Ownership a. it is a usufruct.the thing loaned has been delivered with appraisal of its value. EXCEPTION TO EXCEPTION: when stipulated that members of the househould cannot use or if the nature of the thing forbids such use Subject Matter: a. Exceptions: Bailor may demand the return of the thing or its temporary use when: a. his wife. 7. Generally non-consumables (can be real or personal property) b. To pay for ordinary expenses 3.

The bailee suffers damages by reason of the flaw or defect 8. There is a flaw or defect in the thing loaned b. Exceptions: a.depending on the intent of the parties. 2) REASONS: a. at the request of another person. 1943) REASON: parties to the contract know that the thing borrowed cannot be used without deterioration due to ordinary wear and tear. If he devotes the thing to any purpose different from that for which has been loaned 7. 1951) The bailor is aware thereof d. par. currency is legal case of payment c. that the return of the thing is equivalent only and not the identical thing Fungible things – those which are usually dealt with by number.consumable which depends upon its nature) . The depreciation caused by the reasonable and natural use of the thing is borne by the bailor (Art. Nature of Mutuum a. In extraordinary inflation or deflation. c. To pay damages for known hidden flaws (Art. It is a contract by which the owner of a thing.g. All other expenses which are not necessary for the use and preservation of the thing must be shouldered by the borrower (bailee) 6.PRECARIUM – a kind of commodatum where the bailor may demand the thing at will. No criminal liability upon failure to pay Subject Matter a. To refund the extraordinary expenses (Art. otherwise that which tender in the Philippines. it is a barter FORM OF PAYMENT 1. 1933-1961) SIMPLE LOAN OR MUTUUM is a contract whereby one of the parties delivers to another money or other fungible thing w/ the understanding that the same amount of the same kind and quality shall be paid. with the obligation of the other to give things of the same kind. 1952) REASON: expenses and/or damages may exceed the value of the thing loaned SIMPLE LOAN OR MUTUUM (Arts. Requisites: (the following must concur) a. weight. 1949. If the thing loaned is money – stipulated. Bilateral – borrower’s promise to pay is the consideration for the lender’s obligation to furnish the loan b. c. When the bailee is guilty of fault or negligence c. – depends upon the intention of the parties (as opposed to consumable or non. Bailee pays ½ because of the benefit derived from the use of the thing b. When there is a stipulation to the contrary b. the expenses will be borne equally by both the bailor and the bailee (50-50) (Art. The flaw or defect is hidden . Bailor does not advise the bailee of the same e. Fungible or consumable . c. 1949) General Rule – Notice should be given by the bailee to the bailor regarding such extraordinary expenses and consent should be obtained Exception – Where the extraordinary expenses are so urgent that the reply to the notification cannot be awaited w/o danger 4. quantity and quality. different apportionment or sole burden by bailee or bailor) 5. Bailor pays the other ½ because he is the owner and the thing will be returned to him Exception – Stipulation to the contrary (e. Money • If the transfer of ownership is on a nonfungible thing. or measure so that any given portion is treated as the equivalent of any other unit or portion. gives the latter the thing for use as long as the owner shall tolerate 3. The bailor has no right of abandonment for expenses and damages (Art.A fungible from the viewpoint of the parties is easily replaceable b. If the extraordinary expenses arise from the actual use of the thing and even though bailee acted w/o fault.

the debtor may recover as in the case of solutio indebiti or undue payment. there can be no recovery as in the case of natural obligations. quality and quantity. Art. 2209 of the Civil Code – 6% p. 1959) May be availed of only when there is a written stipulation in the contract for the payment of interest. When judgment of court awarding a sum of money becomes final and executory. But when such certainty cannot be so reasonably established the time the demand is made. The interest shall earn legal interest from the time of judicial demand c. in the absence of the express agreement as to such rate of interest • During the interim period from the date judgment until actual payment b. forbearance of money. COMPOUNDING INTEREST (Art. 2. except when or until the amount can be established with reasonable certainty c.a. Where the amount is established with reasonable certainty. 3. If obligation is not a loan or forbearance of money a. the rate is 12% from default (judicial or extrajudicial demand) 2. Indemnity for damages – the debtor in delay is liable to pay legal interest (6%/12%) as indemnity for damages even in the absence of a stipulation for the payment of interest.g.a. be on the amount finally adjudged. 1956) 1. goods or credits • Judgments involving such loans or forbearance. When an obligation. If such was voluntarily paid. Interest accruing from unpaid interest interest due shall earn interest from the time it is judicially demanded although the obligation may be silent upon this point. 2000] Exceptions: 1. in any case. (Art. If other than money – another thing of the same kind. 2. 1958) NOTE: In case of an unstipulated interest paid by mistake. the interest shall begin from the time the claim is made judicially or extrajudicially d. is breached. If there’s no stipulation. judgment money) a. in cases of: • Loans • Forbearance of money. 18. Interest due is what has been stipulated by the parties b. the contravenor can be held liable for damages. in cases of: • Other sources (e. Determination of interest payable in kind: Its value shall be appraised at the current price of the products or goods at the time and place of payment. regardless of its source. Jan. If obligation consists in the payment of a sum of money (loan. If impossible to do so. • Basis for computation for indemnity: a. and it must be lawful (Art. 12% interest from such until its payment Eastern Assurance and Surety Corporation v. No interest shall be adjudged on unliquidated claims or damages. CA [322 SCRA 73. payment must be its value at the time of perfection of the loan. General Rule – Accrued interest (interest due and unpaid) shall not earn interest . Central Bank Circular 416 – 12% p. Interest on the amount of damages awarded may be imposed at the discretion of the court at 6% b.shall be in the value of the currency at the time of the creation of the obligation. 3. INTEREST AND THE SUSPENSION OF USURY LAW INTEREST General Rule – Interest must be expressly stipulated in writing. the interest shall begin to run only from the date the judgment of the court is made e. Interest as indemnity for damages is payable only in case of default or non-performance of contract. sale) • Damages arising from injury to persons • Loss of property which does not involve a loan 2. The actual base (principal) for the computation of the legal interest shall.

Safekeeping must be the principal purpose of the contract. 4. Sps. terms and conditions as they may deem convenient. By law 3. good customs.because it is perfected only by the delivery of the subject matter • BUT an agreement to constitute a deposit is binding and enforceable. 1964) 1. There is lack of free choice in the depositor. BASIS Creati on Purpos e JUDICIAL Will of the court Security ensure the a party property recover in favorable judgment or to right of to the or to case of EXTRAJUDICIAL Will of the contracting parties Custody and safekeeping BARTER – A contract whereby one person transfers the ownership of non-fungible things to another with the obligation on the part of the latter to give things of the same kind. Usury law has NOT been repealed • Since the mortgage contract derives its vitality from the validity of the principal obligation. quantity and quality.when an attachment or seizure of property in litigation is ordered 2. Necessary Deposit 3. In is made by the will of the depositor or by two or more persons each of whom believes himself entitled to the thing deposited b. with the obligation of safely keeping it and of returning the same. or by travelers in hotels and inns or by travelers with common carriers. Judicial .if with compensation Creation of deposit (Art.Exceptions: • When judicially demanded(e. public order. This may be invoked to annul the excessive stipulated interest. or public policy. Judicial Deposit ======================== ============== DEPOSIT (Arts. ======================== ============== TOPIC UNDER THE SYLLABUS: B. shall be considered a barter. since it is merely consensual 2. Bilateral . Voluntary Deposit . Understanding between the parties that he loan shall be paid. Carpo v. ELEMENTS OF USURY: (LUIT) 1.made in compliance with a legal obligation. Necessary . or on the occasion of any calamity.if gratuitous 3. Depositary must not be the owner of the property deposited (Art. Extrajudicial (Art. Taking or agreeing to take for the use of the loan of something in excess of what is allowed by law. Loan or forbearance 2. 1962-2009) DEPOSIT is constituted from the moment a person receives a thing belonging to another. September 20.g. Voluntary . By virtue of a court order or 2. 2005] 2. Unlawful intent to take more than the legal rate. morals. 1967) a. Characteristics 1. 1962) Kinds of Deposit 1. Real .  However. 1306 of NCC. when case is filed to collect) • When there is an express stipulation made by the parties: that the interest due and unpaid shall be added to the principal obligation and the resulting total amount shall earn interest USURY USURY – is the contracting for or receiving something in excess of the amount allowed by law for the loan or forbearance of money. 150773 & 153599. contracting parties may establish such stipulations. Unilateral . provided they are not contrary to law. Not by the will of the parties 4. No. the invalid stipulation on interest rate is similarly insufficient to render void the ancillary mortgage contract. Chua. goods or chattels. Deposit 1. 3. NOTE: Usury now is legally inexistent.R. clauses. [G.

however. it may cover both movable and immovable property Depositor need not be the owner of the thing General Rule: The depositor must be the owner of the thing deposited Exceptions: It may belong to another person than the depositor a. Depositary. 1969) Exception: Delivery of the thing deposited is needed for perfection. When there is a contrary stipulation b. Form of contract of deposit General Rule: A contract of deposit may be entered into (but not perfected) orally or in writing (Art. Where property is saved without knowledge of the owner d. AND b) Pay the depositor the amount by w/c he may have benefited himself w/ the thing or its price subject to the right of any 3rd person who acquires the thing in good faith MUTUUM Lender is bound by the provisions of the contract and cannot seek restitution until the time of payment as provided in the contract has arisen Necessity of the borrower Enjoy no preference in the distribution of the debtor’s property BASIS Demandabi lity IRREGUL AR DEPOSIT Demandable at will of the irregular depositor for whose benefit the deposit has been constituted Benefit Preference of credit Benefit accrues to the depositor Depositor has preference over other creditors with respect to thing deposited OBLIGATIONS OF THE DEPOSITARY (SRT-CCC-ULC-RITT-RPPT-TL-HR) 1. When two or more persons claiming to be entitled to a thing may deposit the same with a third person. In such case. OR b) The depositor himself if he should acquire capacity Deposit is generally gratuitous: (Art. Where depositary is engaged in the business of storing goods c. 1966) General Rule: Only movable or personal property may be the object of deposit (whether voluntary or necessary) Exception: In judicial deposit. Two primary obligations (Art. Here one of the depositors is not the owner.Subjec t Matter Cause Generally immovables Always onerous Movables only May be compensated but generally gratuitious Upon demand of depositor Depositor or / 3rd person designated DEPOSITARY CAPACITATED / DEPOSITOR INCAPACITATED Depositary is subject to ALL the obligations of a depositary DEPOSITARY INCAPACITATED / DEPOSITOR CAPACITATED Depositary does not incur the obligations of a depositary Return of thing In whose behalf it is held Upon order of the court / end of litigation Person who has a right Depositary must return the property either to: a) The legal representative of the incapacitated. is liable to: a) Return the thing deposited while still in his possession. Safekeeping of the object Degree of Care – same diligence as he would exercise over his property . 1965) General Rule – A deposit is generally gratuitous. Interpleader – the action to compel the depositors to settle their conflicting claims. Exceptions: (SBSJ) a. b. 1972) a. the third person assumes the obligation to deliver to the one to whom it belongs. Judicial deposit Subject Matter of Deposit (Art.

has taken into consideration the latter’s qualification Exception: The depositary is authorized by express stipulation LIABILITIES: Depositary is liable for loss of the thing deposited when: a. and b.• REASONS: i. Must wait for the reply of the depositor to such change. in choosing the depositary. Obligation not to Commingle things if so stipulated (Art. it is not to be strictly governed by the provisions on deposit.A contract for the rent of safety deposit boxes is not an ordinary contract of lease of things. The depositary must notify the depositor of such change. in the event of loss. Take such steps as may be necessary to preserve its value and the right corresponding to it • The depositary is bound to collect the capital. Obligation not to Transfer deposit (Art. He transfers the deposit with a third person without authority although there is no negligence on his part and the third person. • Exemption from liability: The thing is lost without the negligence of the third person with whom he was allowed to deposit the thing if such third person is not “manifestly careless or unfit. Collect the interest as it becomes due b. minor) General Rule: Depositary may not change the way of the deposit Exception: If there are circumstances indicating that the depositor would consent to the change. 1973) General Rule: The depositary is not allowed to deposit the thing with a third person REASON: A deposit is founded on trust and confidence and it can be supposed that the depositor. or c. when due Contract of rent of safety deposit boxes (Art. 1975) • If the thing deposited should earn interest. This is a situation wherein the depositary would reasonably presume that the depositor would agree to the change if he knows of the facts of the situation. 5. Return of the thing when required – Even though a specified term or time for such may have been stipulated in the contract The depositary cannot excuse himself from liability. b.” (i. the depositary is under the obligation to: a. Each depositor shall be entitled to such portion of the entire mass as the amount deposited by him bears the whole 3. 1974) . • These requisites may not be dispensed with unless delay would cause danger. by claiming that he exercised the same amount of care toward the thing deposited as he would towards his own if such care is less than that required by the circumstances 2. but a special kind of deposit.. . as well as the interest. The presumption that the depositor took into account the diligence which the depositary is accustomed with respect to his own property b.e. Essential requisite of judicial relation which involves the depositor’s confidence in his good faith and trustworthiness ii. 1975) . 4.The prevailing rule in the US is that the relation between a bank renting out safety deposit boxes and its customer with respect to the contents of the box is that of bailor and bailee. 1976) General Rule: The depositary is permitted to commingle grain or other articles of the same kind and quality Effects: a. Requisites: a. The thing is lost through the negligence of his employees whether the latter are manifestly careless or not. even in the absence of negligence. The various depositors of the mingled goods shall own the entire mass in common b. Obligation not to Change the way of deposit (Art. Obligation to Collect on the choses in action deposited (Art. hence. He deposits the thing with a third person who is manifestly careless or unfit although authorized.

If the thing consumable: deposited is non- Relation between bank and depositor (Art. 7. Obligation when the thing deposited is Closed and Sealed (Art. 1265) . If he allows others to use it. Contract of loan – deposits in banks are really loans because the bank can use the same for its ordinary transactions b. Such use is necessary for its preservation but limited for the purpose only • Effect of unauthorized use: Liability for damages • Effects of authorized use: (Art. but it becomes an irregular deposit. General Rule: The contract loses the character of a deposit and acquires that of a commodatum. The depositary is presumed authorized to do so if the key has been delivered to him b. Liability for Loss event (Art. If he delays in its return d. Keep the secret of the deposit when the seal or lock is broken. despite the fact that the parties may have denominated it as a deposit Exception: Safekeeping is still the principal purpose of the contract b. accessories and accessions (Art. 1984) General Rule: Depositary is not liable for loss through fortuitous event without his fault Exceptions: (SUDA) a. 1982): a. If he uses the thing without the depositor’s permission c. 1977) General Rule: Deposit is for safekeeping of the subject matter and not for its use Exceptions: a. Relation of creditor and debtor – the relation between a depositor and a bank is that of a creditor and a debtor. 1983) 10. Return the thing deposited when delivered closed and sealed in the same condition b. 1979) through fortuitous 8. 1978) a. Bank deposits are in the nature of irregular deposits but they are really loans governed by the law on loans. Obligation to pay Interest on sums converted for personal use (Art. with or without his fault When depositary justified in opening closed and sealed subject matter (Art. When the instructions of the depositor as regards the deposit cannot be executed without opening the box or receptacle (Necessity) 9. The depositary who receives the thing in deposit cannot require that the depositor Prove his ownership over the thing (Art. Obligation not to make Use of the things deposited (Art. 1981) • The depositary has the obligation to: a. even though he himself may have been authorized to use the same NOTE: Liability for loss without fortuitous event: Depositary presumed at fault since he is in possession (Art. and current deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loan a. Expressly authorized by the depositor b. which is presumed unless proven otherwise c. 1983) 11. If the thing deposited is money or other consumable thing: General Rule: Converts the contract into a simple loan or mutuum Exception: Safekeeping is still the principal purpose of the contract.Exception: When there is a stipulation to the contrary 6. 1980) • Fixed. savings. Pay for damages should the seal or lock be broken through his fault. Obligation to Return products. If it is so stipulated b.

or • To the person who may have been designated in the contract. Obligation to Return to the person to whom return must be made (Art. 1251) GENERAL RULE: At the place agreed upon by the parties. When the thing is judicially attached while in the depositary’s possession b. to: • The depositor. The depositary is obliged to return the thing deposited. notwithstanding that a period has been fixed for the deposit. for its return has been made by one of them in which case delivery should be made to him c. 1985) a. 1212) Exception: Anything w/c may be prejudicial to the other depositors General Rule: The depositary may return the thing to any one of the solidary depositors Exception: When a demand. if: a. does not claim it within the period of one month (30 days) 13. the depositary has no right to return the thing before the expiration of the time designated even if he should suffer inconvenience as a consequence 14. 1984) • The depositary may be relieved from liability when: a. Where Third person appears to be the owner (Art. in spite of such information. 1987) – same as the general rule of law regarding the place of payment (Art. at the place where the thing deposited might be even if it should not be the same place where the original deposit was made 16. Right of the depositary to return the Thing deposited (Art. Obligation to return upon the Time of return (Art. 1988) General Rule: The thing deposited must be returned to the depositor upon demand. To the depositor himself should he acquire capacity Even if the depositor had capacity at the time of making the deposit. Divisible thing and joint depositors – each one of the depositors can demand only his share proportionate thereto b. although he has not made any demand for its return • c. transportation expenses shall be borne by the depositor EXCEPTION: In the absence of stipulation. but he subsequently loses his capacity during the deposit. judicial or extrajudicial. The deposit is gratuitous b. when required. the depositary is bound to return it only to the person designated. the property must be returned to: • His guardian or administrator • To the person who made the deposit . even though a specified period or time for such return may have been fixed Exceptions: a. If the owner. 1986) a. • To his heirs or successors. 1989) NOTE: In this case. Return to one of the depositors stipulated • If by stipulation. If the depositor was incapacitated at the time of making the deposit. Indivisible thing or solidary depositors – rules on active solidarity General Rule: Each one of the depositors may do whatever may be useful to the others (Art. General Rule: The depositary may return the thing deposited. the thing should be returned to one of the depositors. He advised the true owner of the thing of the deposit b. When notified of the opposition of a third person to the return or the removal of the thing deposited 17. the thing must be returned to his legal representative 15. Obligation to return at the Place of return (Art. The reason is justifiable • Remedy if depositor refuses to receive the thing: The depositary may deposit the thing at the disposal of the judicial authority Exception: When the deposit is for a valuable consideration. b.12. it is the depositary who is returning the deposit WITH OR WITHOUT THE DEMAND of the depositor. Obligation of the depositary when there are Two or more depositors (Art.

as provided in the contract. Depositary may Retain the thing in pledge until the full payment of what may be due him by reason of the deposit (Art. has arisen If with interest. Upon the loss or deterioration of the thing deposited. storm. 1991) • When alienation is done in GOOD FAITH: a. Depositor notified the depositary of such dangerous character d. General Rule: The depositary must be reimbursed for loss suffered by him because of the character of the thing deposited. b.18. 1992 & 1993) NOTE: The debt must be prior to the deposit MUTUUM Lender is bound by the provision of the contract and cannot seek restitution until the time for payment. However. Pay the actual price of the thing deposited • 20. Depositor was not aware of the danger b. etc. Liability in case of alienation by the depositary’s Heir (Art. 1994) • The thing retained serves as security for the payment of what may be due to the depositary by reason of the deposit (see Arts. 1965. 1995) a. or other similar events • There must be a causal relation between the calamity and the constitution of the deposit Made by passengers with common carriers • As to baggages the passengers or their agents carry IRREGULAR DEPOSIT May be demanded at will by the irregular depositor for whose benefit the deposit has been constituted Only benefit is that which accrues to the depositor Depositor has preference over other creditors 3. It is made in compliance with a legal obligation 2. flood.) NECESSARY DEPOSIT A deposit is necessary when: (LCCT) 1.Applies only when the deposit is gratuitous aa Obligation to pay losses incurred due to character of thing deposited (Art. benefit if both parties No preference Extinguishment of Deposit a. Exceptions: a. 1992) of . Assign the right to collect from the buyer • The heir does not need to pay the actual price of the thing deposited When alienation is done in BAD FAITH: a. It takes place on the occasion of any calamity. Return the value of the thing deposited b. Other provisions in the Civil Code (novation. pillage. shipwreck. such as fire. Depositor was not expected to know the dangerous character of the thing c. Depositary was aware of the danger without advice from the depositor aa Effect of death of depositor or depositary (Art. Obligations of the Depositor: (PLD) aa Obligation to pay expenses preservation (Art. b. By the word “extinguished. . ONLY in gratuitous deposits. he has the duty to deliver to the depositor money or another thing he receives in place of the thing. 1990) • Depositary is not liable in cases of loss by force majeure or by government order. Deposit gratuitous – death of either of the depositor or depositary extinguishes the deposit (personal in nature). Upon the death of the depositary. Deposit for compensation – not extinguished by the death of either party 19.” the law really means that the depositary is not obliged to continue with the contract of deposit. Liable for damages b. Depositary’s liability in case of Loss by force majeure or government order (Art. merger. c.

g. The loss or injury is caused by force majeure. 2000) b. (Art. Lodging b. The loss is caused by the act of a thief or robber done without the use of arms and irresistible force (Art. 1998-2001) is suppressed or diminished shall be VOID. The right of retention recognized in this article is in the nature of a pledge created by operation of law.4. servants. Made by travelers in hotels or inns (Art. The latter have taken the precautions prescribed regarding their safekeeping. They have been previously informed about the effects brought by the guests. 538. In compliance with a legal obligation (governed by the law establishing it. 586 and 2104) Made on the occasion of any calamity (governed by the rules on voluntary deposit and Art. Include those lost or damages in hotel annexes such as vehicles in the hotel’s garage. Supplies usually furnished to hotel guests Reason: It is given to hotel-keepers to compensate them for the liabilities imposed upon them by law. 1998) • Before keepers of hotels or inns may be held responsible as depositaries with regard to the effects of their guests. his family. like flood. the hotelkeeper is liable REGARDLESS of the amount of care exercised: a. the following must concur: Elements: a. as a security for credits on account of: a. 2005) Nature: Auxiliary to a case pending in court Purpose: To maintain the status quo during the pendency of the litigation or to insure the right of the parties to the property in case of a favorable judgment Depositary of sequestered property: person appointed by the court. and in case of deficiency. 2007) Obligations: a. The loss arises from the character of the things brought into the hotel • Exemption or diminution of liability: The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest (Art. (Art. and b. 2008) • • . theft or robbery by a stranger (not the hotelkeeper’s servant or employee) with the use of firearms or irresistible force EXCEPTION: Unless the hotel-keeper is guilty of fault or negligence in failing to provide against the loss or injury from his cause b. the rules on voluntary deposit e. 2001) Reason: Hotel-keeper is apparently negligent • When hotel-keeper not liable: a. 2003) Effect: Any stipulation between the hotelkeeper and the guest whereby the responsibility of the former (as set forth in Art. The loss is due to the acts of the guests. Liability in hotel rooms which come under the term “baggage” or articles such as clothing as are ordinarily used by travelers b. visitors c. • When hotel-keeper liable: (Art. Extent of liability: a. Arts. 2000 – 2002) NOTE: In the following cases. To take care of the property with the diligence of a good father of the family. fire. The loss or injury to personal property is caused by his servants or employees as well as by strangers (Art. • Hotel-keeper’s right to retain The hotel-keeper has a right to retain the things brought into the hotel by the guest. 2168) SEQUESTRATION OR JUDICIAL DEPOSIT When judicial deposit takes place: When an attachment or seizure of property in litigation is ordered by a court. (Art.

then guaranty is also void 2. a person called the guarantor. there is a contract Custody. Accessory – dependent for its existence upon the principal obligation guaranteed by it hence if principal contract is void. Presence of cause which supports principal obligation: Cause of the contract is the same cause which supports the obligation as to the principal debtor. Nature and extent of guaranty 2. Unilateral – a. Without husband’s consent. MARRIED WOMAN AS GUARANTOR (Art. a consideration moving to the principal will suffice. Extinguishment of guaranty 4. such as when the guaranty has redounded to the benefit of the family GUARANTY UNDERTAKEN WITHOUT KNOWLEDGE OF DEBTOR (Art.b. The consideration which supports the obligation as to the principal debtor is a sufficient consideration to support the obligation of a guarantor or surety. It is a contract between the guarantor and the creditor. Guaranty and Suretyship 1. has a right EXTRAJUDIC IAL DEPOSIT By will of the parties. 2047-2084) GUARANTY – By guaranty. Either movable or immovable property but generally. It may be entered into even without the intervention of the principal debtor. He may not be relieved of his responsibility until the litigation is ended or the court so orders. 2. binds himself to the creditor. to fulfill the obligation of the principal debtor in case the latter should fail to do so. With her husband’s consent. 2049) General Rule: Married woman binds only her separate property Exceptions: 1. in cases provided by law. immovable Always remunerated (onerous) In behalf of the person who. Safekeeping of the thing CHARACTERISTICS OF THE CONTRACT 1. (Art. Secure the right of a party to recover in case of favorable judgment. 2007) Applicable law: The law on judicial deposit is remedial or procedural in nature. 2009) BASIS Cause origin Purpose or JUDICIAL DEPOSIT By will of the courts Security. such consideration need not pass directly to the guarantor or surety. the Rules of Court are applicable. Hence. but may be compensated In behalf of the depositor or third person designated In whose behalf it is held Cause of contract of guaranty 1. . binds the community or conjugal partnership property 2. Legal and judicial bonds ======================== ============== GUARANTY AND SURETYSHIP (Arts. Subsidiary and Conditional – takes effect only when the principal debtor fails in his obligation subject to limitation 3. Distinct Person – a person cannot be the personal guarantor of himself Subject Matter Only movable property Remunerati on Generally gratuitous. Effects of guaranty 3. 2050) ======================== ============== TOPIC UNDER THE SYLLABUS: C. by the judgment. (Art. It gives rise only to a duty on the part of the guarantor in relation to the creditor and not vice versa b. Hence. 4. Absence of direct consideration or benefit to guarantor: Guaranty or surety agreement is regarded valid despite the absence of any direct consideration received by the guarantor or surety.

1237) 2. Payment with knowledge or consent of the debtor: Subrogated to all the rights which the creditor had against the debtor (Art. Filing of the complaint judicial demand). but by reason of his failure to pay when demanded and for having compelled the creditor to resort to the courts to obtain payment. Principal obligation subject to a suspensive condition – the guarantor is liable only after the fulfillment of the condition. 2051(2)) One constituted to guarantee the obligation of a guarantor. Voidable contract – such contract is binding. Guarantor cannot compel the creditor to subrogate him in his rights (Art. • But the guarantor may bind himself for less than that of the principal.a. It should not be confounded with guaranty wherein several guarantors concur. unless it is annulled by a proper court action 2. Principal obligation subject to a resolutory condition – the happening of the condition extinguishes both the principal obligation and the guaranty GUARANTOR’S LIABILITY CANNOT EXCEED PRINCIPAL OBLIGATION (Art. Interest runs from: (demand) a. may be guaranteed but there can be no claim against the guarantor until the amount of the debt is ascertained or fixed and demandable. Exceptions: 1. 2. Guaranty of conditional obligations: A guaranty may secure all kinds of obligations. AND NATURAL OBLIGATIONS (Art. 2052(2)) A guaranty may secure the performance of a: 1. he impliedly recognizes his liability. Not limited to a single transaction but which contemplates a future course of dealings. GUARANTY OF VOIDABLE. Payment without the knowledge or against the will of the debtor: a. Guarantor can recover only insofar as the payment has been beneficial to the debtor (Art. 2053) Continuing Guaranty or Suretyship: 1. Unenforceable contract – because such contract is not void 3. GUARANTY OF FUTURE DEBTS (Art. REASON: Surety is made to pay. 1. To secure payment if any debt to be subsequently incurred –construed as continuing when it is evident from the terms that the object is to give a standing credit to the principal debtor to be used from time to time either indefinitely or until a certain period. T Rights of third persons who pay: 1. UNENFORCEABLE. Interest. It is prospective in its operation and is generally intended to provide security with respect to future transactions. 3. judicial costs. covering a series of transactions generally for an indefinite time or until revoked. • When the debtor himself offers a guaranty for his natural obligation. thereby transforming the obligation from a natural into a civil one. his liability shall be reduced to the limits of that of the debtor. 2. or (upon . Future debts. especially if the right to recall the guaranty is expressly reserved. 2067) Double or sub-guaranty (Art. Natural obligation – the creditor may proceed against the guarantor although he has no right of action against the principal debtor for the reason that the latter’s obligation is not civilly enforceable. not by reason of the contract. and attorney’s fees as part of damages may be recovered – creditors may recover from the surety as part of their damages the abovementioned fees even without stipulation and even if the surety would thereby become liable to pay more than the total amount stipulated in the bond. be they pure or subject to a suspensive or resolutory condition. even if the amount is not yet known. 2054) General Rule: Guaranty is a subsidiary and accessory contract – guarantor cannot bind himself for more than the principal debtor • If he does. Examples: o secure the payment of a loan at maturity –guarantee of the punctual payment of a loan at maturity and all other obligations of indebtedness b. 1236) b.

cannot or is unable to without regard to his pay ability to do so Insurer of the Insurer of the debt solvency of the debtor Does not contract Pay the creditor that the principal without qualification will pay. • Guaranty Strictly Construed Strictly construed against the creditor in favor of the guarantor and is not be extended beyond its terms or specified limits. or by his agent. He possesses integrity 2. • Hence. unless the same or some note or memorandum thereof be in writing. He has sufficient property to answer for the obligation which he guarantees Exception: The creditor waives the requirements Effect of Subsequent Loss of Required Qualifications: The qualifications need only be 2. evidence. Liability of surety limited to a fixed period – the surety must only be bound in the manner and to the extent. without any demand by the creditor upon the principal whatsoever or any notice of default Only binds himself to Undertakes to pay if the pay if the principal principal does not pay. or a secondary evidence of its contents. 2056-2057) (SIC) 1. Liability for obligation stipulated – guarantor is not liable to obligations assumed previous to the execution of the guaranty unless an intent to be so liable is clearly indicated 2. but simply if the principal debtor that he is able to do does not pay. it shall be unenforceable by action. the latter’s liability being governed by the obligations he assumed under his contract. 2055) Guaranty requires the expression of consent on the part of the guarantor to be bound. of the agreement cannot be received without the writing. Hence. and is so responsible at once the latter makes default. Remedy of surety: Foreclose the counterbond put up by the principal debtor (if there is any) GUARANTY DISTINGUISHED FROM SURETYSHIP GUARANTY SURETYSHIP Liability depends upon Assumes liability as a an independent regular party to the agreement to pay the undertaking obligation if the primary debtor fails to do so Engagement is a Charged as an original collateral undertaking promisor Secondarily liable – Primarily liable – he contracts to pay if. It need not appear in a public document. the debt reference to the cannot be paid solvency of the principal. 1. Doubt in the terms and conditions of the guaranty or suretyship agreement should be resolved in favor of the guarantor or surety. Penalty may be provided –surety may be held liable for the penalty provided for in a bond for violation of the condition therein. The time demand was made upon the surety until the principal obligation is fully paid (upon extra-judicial demand) nullifies the nature of the undertaking it had assumed. and under the circumstances which are set forth or which may be inferred from the contract of guaranty or suretyship. 3.b. GUARANTY NOT PRESUMED (Art. and no further. the so responsibility or obligation assumed by the surety is greater or more onerous than that of a guarantor QUALIFICATIONS OF GUARANTOR (Arts. Guaranty Covered by the Statute of Frauds • Guaranty must not only be expressed but must so be reduced into writing. Principal’s liability may exceed guarantor’s obligations The amount specified in a surety bond as the surety’s obligation does not limit the extent of the damages that may be recovered from the principal. Liability of surety to expire on maturity of principal obligation – such stipulation is unfair and unreasonable for it practically . undertakes directly for by the use of due the payment without diligence. It cannot be presumed because of the existence of a contract or principal obligation. therefore. He has the capacity to bind himself 3. and subscribed by the party charged.

In effect. Remedy of creditor: Demand another guarantor with the proper qualifications Exception: Creditor may waive it if he chooses and hold the guarantor to his bargain. 2. 2. it may not be sufficient that the debtor appears insolvent. Exception: The creditor may. A term of the agreement. In case of insolvency of the debtor – guarantor guarantees the solvency of the debtor • If the debtor becomes insolvent. Guarantor personally designated by the creditor: Responsibility of the selection should fall upon the creditor because he considered the guarantor to have the qualifications for the purpose. Luzon Surety. As a party. b. When he (debtor) has absconded. All legal remedies against the debtor to be first exhausted – to warrant recourse against the guarantor for payment. EXCEPTIONS TO THE EXCUSSION (Art. Selection of Guarantor: 1. He is not bound to substitute the guarantor. and solvency of the guarantor. Such insolvency may be simulated. he renounces in the contract itself the benefit of exhaustion. may demand exhaustion of all the property of the debtor before he can be compelled to pay. NOTE: Art. If he has bound himself solidarily with the debtor – liability assumed that of a surety • Guarantor becomes primarily liable as a solidary co-debtor.present at the time of the perfection of the contract. however. Guarantor only secondarily liable – guarantor binds himself only in case the principal debtor should fail to do so. 2059) BENEFIT OF The guarantor is not entitled to the benefit of excussion: 1. therefore. the creditor is. b. to satisfy the latter’s obligation. As provided in Art. Right of Creditor to Secure Judgment against Guarantor prior to Exhaustion General Rule: An ordinary personal guarantor (NOT a pledgor or mortgagor). capacity. 2. 2058 is not applicable to a contract of suretyship. 3. bound thereby. Guarantor selected by the principal debtor: Debtor answers for the integrity. secure a judgment against the guarantor. Article 2057: 1. Estate of Hemady v. the guarantor is discharged from any responsibility. The supervening incapacity of a guarantor DOES NOT terminate the guaranty for it merely gives the creditor the OPTION to demand another guarantor. who shall be entitled. Requires conviction in the first instance of a crime involving dishonesty to have the right to demand another. or cannot be sued within the Philippines – the creditor is not required to go after a debtor who is hiding or cannot be sued in our courts Exception: Debtor has left a manager or representative e. prior thereto. If the guarantor has expressly waived it – Waiver • Waiver is valid but it must be made in express terms. the liability of the guarantor as the debtor cannot fulfill his obligation d. RIGHT OF GUARANTOR TO BENEFIT OF EXCUSSION OR EXHAUSTION (Art. If it may be presumed that a judicial action including execution on the property of the principal debtor would not result in the satisfaction of the obligation – if such is . Specified person stipulated as guarantor: Substitution of guarantor may not be demanded REASON: The selection of the guarantor is: a. Judicial declaration of insolvency is not necessary in order for the creditor to have a right to demand another guarantor. c. 2058) 1. to a deferment of the execution of said judgment against him. If the principal debtor fulfills the obligation guaranteed. The subsequent loss of the qualifications would not extinguish the liability of the guarantor. nor will it extinguish the contract of guaranty. 2059: (I-SAW-U) a. until after the properties of the principal debtor shall have been exhausted.

Where a pledge or mortgage has been given by him as a special security 5. Notice to guarantor of the action – guarantor must be notified so that he may appear. Point out to the creditor: i. He cannot set up the defenses which. 2. and . much less alone. he must: a. 2061) After the guarantor has fulfilled the conditions required for making use of the benefit of exhaustion. When demand to be made – only after judgment on the debt for obviously the exhaustion of the principal’s property cannot even begin to take place before judgment has been obtained. 2059 where the guarantor is not entitled to the benefit of excussion. it becomes the duty of the creditor to: Exhaust all the property of the debtor pointed out by the guarantor If he fails to do so. Guaranty appears – voluntary appearance does not constitute a renunciation of his right to excussion. the creditor may hold the guarantor only after judgment has been obtained against the principal debtor and the latter is unable to pay. except in the cases mentioned in Art. Exception: Where it would serve merely to delay the ultimate accounting of the guarantor or if no different result would be attained if the plaintiff were forced to institute separate actions against the principal and the guarantors. ii. If he does not comply with Art. and set up defenses he may want to offer a. if he so desires.the case. Guaranty does not appear – i. Sufficient to cover the amount of the debt. Actual demand to be made – joining the guarantor in the suit against the principal debtor is not the demand intended by law. 2062) 1. iii. If he is a judicial bondsman and subsurety (Art. 2084) –because he is solidarily liable 4. not being a joint contractor with his principal. Joinder of Guarantor and Principal as Parties Defendant General Rule: The guarantor. DUTY OF THE GUARANTOR TO SET UP BENEFIT OF EXCUSSION (Art. If he fails to interpose it as a defense before judgment is rendered against him DUTY OF CREDITOR TO MAKE PRIOR DEMAND FOR PAYMENT FROM GUARANTOR (Art. 2060: In order that the guarantor may make use of the benefit of excussion. he shall suffer the loss but only to the extent of the value of the said property. b. There must be an actual demand and not judicial demand. among others. the guarantor can no longer require the creditor to resort to all such remedies against the debtor as the same would be but a useless formality. 2060) 1. • As a rule. 2. 2060) As soon as he is required to pay. b. guarantor must also point out to the creditor available property (not in litigation or encumbered) of the debtor within the Philippines. DUTY OF THE CREDITOR TO RESORT TO ALL LEGAL REMEDIES (Art. Sent against the principal – The guarantor cannot be sued with his principal. 3. PROCEDURE WHEN CREDITOR SUES (Art. It is not necessary that the debtor be judicially declared insolvent. cannot be sued with his principal. Set it up against the creditor upon the latter’s demand for payment from him. for the insolvency of the debtor. Within the Philippine territory – excussion of property located abroad would be a lengthy and extremely difficult proceeding and would not conform with the purpose of the guaranty to provide the creditor with the means of obtaining the fulfillment of the obligation. Resort to all legal remedies includes accion pauliana. Available property of the debtor – the guarantor should facilitate the realization of the excussion since he is the most interested in its benefit. 2. by appearing are allowed to him by law.

3.The guarantor has no right to demand reimbursement until he has actually paid the debt.ii. These expenses are limited to those incurred by the guarantor after having notified the debtor that payment has been demanded of him by the creditor. if they are due. But if it benefits a third person. The guarantors are not liable to the creditor beyond the shares which they are respectively bound to pay.should there be several guarantors of only one debtor and for the same debt. If any of the circumstances enumerated in Art. Exceptions to Reimbursement Right to Indemnity or . Two or more guarantors of the same debtor but for different debts χ. unless by the terms of the contract. the obligation to answer for the same is divided among all. 2. even if they be bound solidarily. Exception: Solidarity has been expressly stipulated Benefit of Guarantors: Excussion among Several In order that the guarantor may be entitled to the benefit of division. each with different guarantors. SUB-GUARANTOR’S RIGHT TO EXCUSSION (Art. GR No. because the guarantor’s right to legal interest is granted by law by virtue of the payment he has made. EFFECTS OF COMPROMISE (Art. he is given the right before making payment. In whose favor applicable . Expenses incurred by the guarantor The expenses referred to are only those that the guarantor has to satisfy in accordance with law as a consequence of the guaranty. REASON: Obligation of the guarantor with respect to his co-guarantors is not subsidiary but direct and does not depend as to its origin on the solvency or insolvency of the latter. (Tuason vs. as would the benefit of exhaustion of the debtor’s property. December 2. Cannot be availed of if there are: α. and is independent of the creditor’s right to claim interest which was necessarily regulated by the stipulations between him and the debtor. 1. Extent of liability of several guarantors – joint obligation: the obligation to answer for the debt is divided among all of them. Guarantor REASON: He stands with respect to the guarantor on the same footing as the latter does with respect to the principal debtor. by making reciprocal concessions. Thus. Principal debtor. Legal interest . REASON: A compromise binds only the parties thereto and not third persons. 2. Total amount of the debt . Hearing before execution can be issued against the guarantor – a guarantor is entitled to be heard before an execution can be issued against him where he is not a party in the case involving his principal. 2. Compromise between creditor and principal debtor benefits the guarantor but does not prejudice him. It may no longer be possible for him to question the validity of the judgment rendered against the debtor 3. it is not required that he point out the property of his co-guarantors. it cannot prejudice the guarantor or debtor who was not party to the compromise. L-22177. Two or more debtors of one debt. or β. RIGHT TO INDEMNITY OR REIMBURSEMENT (Art. and 2. 2059 should take place.It is immaterial that the debt did not earn interest for the creditor. 2063) Compromise – a contract whereby the parties. then the compromise may bind that third person. Exception: The guarantor cannot demand for reimbursement for litigation expenses. 2065) 1. 1924) 4. BENEFIT OF DIVISION AMONG SEVERAL GUARANTORS (Art. when such expenses are due to its failure to fulfill its obligation to pay upon demand. Damages. avoid a litigation or put an end to one already commenced. Compromise between guarantor and the creditor benefits but does not prejudice the principal debtor. 2066) (DELT) 1. Machuca. 3. 2064) Sub-guarantor enjoys the benefit of excussion with respect to: 1.

The guarantor is subrogated. basis. But the payment is in any case valid as to the creditor who has accepted it (Art. he must first notify the debtor. the the the the Hence. Payment by a third person who does not intend to be reimbursed by the debtor is deemed to be a donation. Where the guaranty is constituted without the knowledge or against the will of the principal debtor. 2. Exception: The guarantor may still claim reimbursement from the debtor in spite of lack of notice if the following conditions are present: a. the guarantor cannot seek reimbursement from the guarantor. 1. which. guarantor must notify the debtor before making payment. 2068) When the guarantor pays the creditor. Exceptions: Art. the guarantor is not liable for the debt before it becomes due. not those of the debtor. 2067) RIGHT TO SUBROGATION NOTE: In case of an unenforceable contract . The creditor becomes insolvent b. subject to stipulation in conventional subrogation. A contract of guaranty being subsidiary in character. • In a gratuitous guaranty – if guarantor was prevented to notify because of a fortuitous event. EFFECT OF PAYMENT BY GUARANTOR BEFORE MATURITY (Art. 1238) 3. Exception: The debtor will be liable if the payment was made: a. (PAID-SIT) SUBROGATION transfers to the person subrogated. Waiver GUARANTOR’S (Art. 2. then debtor can set up against the guarantor defense of previous extinguishments of obligation by payment. The guarantor who pays before maturity is not entitled to reimbursement since there is no necessity for accelerating payment. and creditor becomes insolvent. the guarantor can recover only insofar as the payment had been beneficial to the debtor 2. the credit with all the rights thereto appertaining either against the debtor or against third persons. • If he fails to give notice and the debtor repeats payment: Guarantor’s Remedy: collect from the creditor • No cause of action against the debtor for the return of the amount paid by him. debtor shall reimburse guarantor. through his own fault or negligence to prejudice or impair the rights or interests of the debtor. the guarantor can seek reimbursement from the debtor. 2066 a. REASON: The guarantor cannot be allowed. or b. if the debtor consents to the guarantor paying. When right not available – since subrogation is the means of effectuating the right of the guarantor to be reimbursed. Arises by operation of law upon payment by the guarantor b. it cannot therefore be invoked in those cases where the guarantor has no right to be reimbursed. . If the debtor did not consent to the guarantor paying. It is not a contractual right c. be they guarantors or possessors of mortgages. but debtor has already paid the latter.1. 2070) General Rule: Before the guarantor pays the creditor. and nature of right – right of subrogation is necessary to enable the guarantor to enforce the indemnity given in Art. That guarantor was prevented by a fortuitous event to advise the debtor of the payment c. 2071) General Rule: Guarantor has no cause of action against the debtor until after the former has paid the obligation. 2071 enumerates instances when the guarantor may proceed against the debtor even before the payment. Accrual. 1. requires the debtor’s consent. by virtue of the payment. Subsequently ratified (express or implied) by him EFFECT OF REPEAT PAYMENT BY THE DEBTOR (Art. With his consent. The guaranty is gratuitous RIGHT OF GUARANTOR TO PROCEED AGAINST DEBTOR BEFORE PAYMENT (Art. to the right of the creditor. EFFECT OF PAYMENT BY GUARANTOR WITHOUT NOTICE TO DEBTOR (Art. however. 2069) Debtor’s obligation with a period – demandable only when the day fixed comes.

He has the right to choose the action to bring. Indemnity against liability – indemnitor’s liability arises as soon as the liability of the person to be indemnified has arisen without regard to whether or not he has suffered actual loss c. Remedy to which the Guarantor Entitled The guarantor cannot demand reimbursement for indemnity when he has not paid the obligation. Indemnity against loss – indemnitor will not be liable until the person to be indemnified makes payment or sustains loss b. Release of the guarantor imports an extinction of his obligation to the creditor. by reason of the expiration of the period for payment. If there are reasonable grounds to fear that the principal debtor intends to abscond. Purpose: To enable the guarantor to take measures for the protection of his interest in view of the probability that he would be called upon to pay the debt. when the principal obligation has no fixed period for its maturity. ARTS. is valid and enforceable. 2071 (RIGHT OF (RIGHT OF GUARANTOR TO GUARANTOR TO REIMBURSEMENT PROCEED AGAINST AFTER PAYMENT) Provides for the enforcement of the rights of the guarantor against the debtor after he has paid the debt – gives a right of action after payment Substantive right Gives a right of action. In case of insolvency of the principal debtor. Suit by Guarantor against Creditor before Payment The guarantor’s or surety’s action for release can only be exercised against the principal debtor and not against the creditor. Such agreement valid . regardless of whether the surety has made payment actually or not. the surety may demand from the indemnitor even before the creditor has paid. Indemnity agreement may be against actual loss as well as liability – such agreement is enforceable and not violative of any public policy a. 6. When he is sued for the payment. and this period has expired. 3. without the provisions of the other might be worthless DEBTOR EVEN BEFORE PAYMENT) Provides for the protection before he has paid but after he has become liable – gives a protective remedy before payment Preliminary remedy Remedy given seeks to obtain from the guarantor “release from the guaranty or to demand a security that shall protect him from any proceedings by the creditor and from the danger of insolvency of the debtor. Any proceedings by the creditor. When the debt has become demandable. 2066 and 2071 Distinguished ART. To obtain release from the guaranty.A stipulation in an indemnity agreement providing that the indemnitor shall pay the surety as soon as the latter becomes liable to make payment to the creditor under the terms of the bond. 2066 ART. and b. Indemnity agreement for the benefit of surety –not for the benefit of the creditor 2. unless it be of such nature that it cannot be extinguished except within a period longer than ten years. REMEDIES AVAILABLE: 1. and in accordance therewith. or 2.1. Against the insolvency of the debtor. After the lapse of ten years. 4. When the debtor has bound himself to relieve him from the guaranty within a specified period. 7. which.” Recovery of Surety against Indemnitor even before Payment 1. 5. REASON: The creditor cannot be compelled to release the guarantor before payment of his credit. If the principal debtor is in imminent danger of becoming insolvent. connoting remission or a novation by subrogation which requires the creditor’s assent. 2. the position occupied by them is that of a principal debtor and indemnitor at the . To demand security that shall protect him from: a. Where the principal debtors are simultaneously the same persons who executed the indemnity agreement. Guarantor’s remedies are alternative.

Condonation or remission of the debt. Confusion or merger of the rights of the creditor and debtor. the causes of which are: 1. Guarantor who paid is seeking reimbursement from each of his coguarantors the share which is proportionately owing him. Novation 7.e. 2071 BETWEEN CO-GUARANTORS RIGHT TO CONTRIBUTION OF GUARANTOR WHO PAYS (Art. 2073) Presumption of joint liability of several guarantors when there are: 1. fraud. d. Loss of the thing due. LIABILITY OF SUB-GUARANTOR IN CASE OF INSOLVENCY OF GUARANTOR (Art. 2. Effect of Insolvency of Any Guarantor: Follows the rule on solidary obligations: The share of the insolvent guarantor shall be borne by the others including the paying guarantor in the same joint proportion. Other causes: a. 2072) The guarantor who guarantees the debt of an absentee at the request of another has a right to claim reimbursement. it is extinguished when principal obligation is extinguished. Indemnification 2. Benefit of Compromise 4. will release the surety from liability. after satisfying the debt from: 1. remission. 4. 3. 2076) (PL3CN-ARFP) OF When Art. Because the principal debtor is insolvent. Exception: Those which cannot be transmitted for being purely personal to the debtor. Accrual and Basis of Right: General Rule: Guaranty being accessory. 2. Compensation. 2.same. or b. and 6. Rescission. Benefit of Subrogation 3. 5. 2075) Sub-guarantor is liable to the co-guarantors in the same manner as the guarantor whom he guaranteed in case of the insolvency of the guarantor for whom he bound himself as subguarantor. By virtue of a judicial demand (benefit of division must have ceased). Annulment. Material Alteration of Principal Contract – any agreement between the creditor and the principal debtor which essentially varies the terms of the principal contract without the consent of the surety. b. Such material alteration would constitute a novation or change of the principal contract. Same debtor 3. which is consequently extinguished. and their liability being joint and several. DEFENSES AVAILABLE TO CO-GUARANTORS (Art. illegality.). 2074) General Rule: All defenses which the debtor would have interposed against the creditor (i. c. Upon such . 3. Prescription Exception: The guaranty itself may be directly extinguished although the principal obligation still remains such as in the case of the release of the guarantor made by the creditor. The person who requested him to be a guarantor. etc. prescription. to pay only his The right of reimbursement is acquired ipso jure without need of any prior cession from the creditor by the guarantor. Payment by such guarantor must have been made: a. Fulfillment of a resolutory condition. Payment or performance. The debtor RIGHTS OF THE GUARANTOR AGAINST THE DEBTOR (BRIB) 1. Two or more guarantors 2. CAUSES OF EXTINGUISHMENT GUARANTY (Art. GUARANTOR OF A THIRD PERSON AT REQUEST OF ANOTHER (Art. Same debt Effect: Each is bound proportionate share. When one guarantor has paid the debt to the creditor. 2073 Applicable: 1. Right to obtain or demand a security under Art.

RELEASE BY CONVEYANCE OF PROPERTY (Art. the The debtor may become insolvent during the extension. 1. REASON: The extension constitutes an extension of the payment of the whole amount of the indebtedness 2. For a Definite period REASON: To avoid prejudice to the guarantor . it should appear that the extension was: (DEW) 1. or 2. changing the legal effect of the original contract and not merely the form thereof. does not constitute an extension of the term of the obligation. thus depriving the guarantor of his right to reimbursement. This is also true even in case the creditor is subsequently evicted from the property. and therefore.extinguishments. Imposes a new obligation or added burden on the party promising. 2078) WITHOUT EFFECT: The release benefits all to the extent of the share of the guarantor released. the accessory contract to guaranty is also terminated and the guarantor cannot be held liable on the new contract to which he has not given his consent. REASON: The creditor’s action against the debtor is for eviction and this is different from what the guarantor guaranteed. Exception: Any substitute paid in lieu of money which is accepted by the creditor extinguishes the obligation and in consequence. Exception: When the unpaid balance has become automatically due by virtue of an acceleration clause for failure to pay an installment. 1. • If the creditor accepts property in payment of a debt from the debtor. discharges the guarantor. the guarantor is relieved from responsibility. Where obligation payable in installments: where a guarantor is liable for different payments: General Rule: An extension of time to one or more will not affect the liability of the surety for the others. 2077) General Rule: Payment is made in money. RELEASE BY EXTENSION OF TERM GRANTED BY CREDITOR TO DEBTOR (Art. the liability of the guarantor is not extinguished. RELEASE OF GUARANTOR CONSENT OF OTHERS (Art. as soon as the same or any part of it matures. For a long or short period of time Consent of the guarantor is a must! Extension must be based on some new agreement between the creditor and the principal debtor by virtue of which the creditor deprives him of his claim. REASON: A release made by the creditor in favor of one of the guarantors without the consent of the others may prejudice the others should a guarantor become insolvent. the guaranty. 2079) Release Without Consent of Guarantor: Creditor grants an extension of time to the debtor without the consent of the guarantor. When Alteration Material – where such change will have the effect of making the obligation more onerous. is discharged from his Effect: Amounts to the surety’s consent to all the extensions granted. It doesn’t matter if the extension is: a. nor to public policy In case of eviction: Eviction revives principal obligation but not the guaranty. Prejudicial or not or b. Takes away some obligation already imposed. Effect of exception: The act of the creditor extending the payment of said installment. In order to constitute an extension discharging a surety. EFFECT: Guarantor undertaking. Where consent to an extension is waived in advance by the guarantor: Such waiver is not contrary to law. without the guarantor’s consent. NOTE: The mere failure or neglect on the part of the creditor to enforce payment or to bring an action upon a credit.

EXCEPTION: Unless otherwise expressly provided. If the creditor has acquired a lien upon the property of a principal. and as between the two who are bound. Liability is contractual and accessory but direct: 2. which pertain to the principal debtor and are inherent in the debt. but in view of the efficacy of the action on the contract against the surety. 2080) • If there can be no subrogation because of the fault of the creditor. the principal debtor and the surety. as protection against the risks of possible insolvency of the debtor. separately or together. Pursuant to an Enforceable agreement between the principal and the creditor 3. or maintaining such lien in the interest of the surety. Undertaking is to creditor. Liability is limited by terms of contract 3. Prior demand by the creditor upon principal not required: Surety is not . the creditor at once becomes charged with the duty of retaining such security. The creditor may sue. SURETYSHIP SURETYSHIP is a relation which exists where one person (principal) has undertaken an obligation and another person (surety) is also under a direct and primary obligation or other duty to the obligee. and the creditor as trustee is bound to account to the surety for the value of the security in his hands. and precludes the surety from paying the debt. b. A surety bond is void where there is no principal debtor because such an undertaking presupposes that the obligation is to be enforceable against someone else besides the surety. Made Without the consent of the surety or with a reservation of rights with respect to him. his vigilance must be exercised rather against the principal debtor.2. NOTE: Art 2081 does not cover a surety. beginning with the date the obligation becomes due. 5. The law does not even grant the surety the right to sue the creditor for delay. the second. • REASON: The act of one cannot prejudice another. or at least hinders him in. will discharge the surety to the extent of the value of the property or lien released for there immediately arises a trust relation between the parties. • The contract must be one which precludes the creditor from. NATURE OF SURETY’S UNDERTAKING 1. not to debtor: The surety’s undertaking is that the principal shall fulfill his obligation and that the surety shall be relieved of liability when the obligation secured is performed. even if the guarantors are solidary. NOTE: Surety is not entitled to exhaustion 4. In the absence of collusion. A demand or notice of default is not required to fix the surety’s liability EXCEPTION: Where required by the provisions of the contract of suretyship d. 2081) General Rule: All defenses. the surety is bound by a judgment against the principal event though he was not a party to the proceedings. and any release or impairment of this security as a primary resource of payment of a debt. Liability arises only if principal debtor is held liable a. who is entitled to but one performance. • If a person binds himself solidarily with the principal debtor. the contract is called suretyship and the guarantor is called a surety. NOTE: Surety is not entitled to notice principal’s default of • RELEASE WHEN GUARANTOR CANNOT BE SUBROGATED (Art. DEFENSES AVAILABLE TO GUARANTOR AGAINST CREDITOR (Art. the guarantors are thereby released. It also avoids collusion between the creditor and the debtor or a third person. c. rather than the first should perform. enforcing the principal contract within the period during which he could otherwise have enforced it. and the latter can always claim that it was never his intention to be the sole person obligated thereby. Exception: Those which are purely personal to the debtor.

He has the capacity to bind himself. 2140. the rules peculiar to suretyship do not apply. 2. Pledge 1. Qualifications of personal bondsman: (SIC) 1. a pledge or mortgage sufficient to cover the obligation shall be admitted in lieu thereof. that they be legally authorized for the purpose Cannot exist without a valid obligation Debtor retains the ownership of the thing given as a security When the principal obligation becomes due. LEGAL AND JUDICIAL BONDS MEANING AND FORM OF BOND (Art. 2096) 7. 2093. Distinguished from chattel mortgage (Arts. Compensated corporate sureties are business association organized for the purpose of assuming classified risks in large numbers. ======================== ============== TOPIC UNDER THE SYLLABUS: D. 2083) Guaranty or suretyship is a personal security. PLEDGE OR MORTGAGE IN LIEU OF BOND (Art. Important Points 1. He possesses integrity. duties akin to those of a fiduciary. 3. 2085-2123) Essential Requisites to Contracts of Pledge and Mortgage: (FARCAS) Constituted to secure the fulfillment of a principal obligation Pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged The persons constituting the pledge or mortgage have the free disposal of their property. 3. They are secured from all possible loss by adequate counter-bonds or indemnity agreements. 2115) 8. Foreclosure (Arts. the thing in which the pledge or mortgage consists may be alienated for the payment to the creditor. 2082) Bond – an undertaking that is sufficiently secured. Perfection (Arts. This rule will apply only after it has been definitely ascertained that the contract is one of suretyship or guaranty. Effect of negligence of creditor: Mere negligence on the part of the creditor in collecting from the debtor will not relieve the surety from liability. 2084) judicial bondsman and the sub-surety are not entitled to the benefit of excussion. and in the absence thereof. but sureties whose liability is primary and solidary. BONDSMAN NOT ENTITLED TO EXCUSSION (Art. Rights of pledgor 6. 2. 2. Pledge/mortgage executed by one who is not the owner of the property pledged or . Pledge by operation of law (Art. Essential requirements 4. 5. Such corporations are in fact insurers and in determining their rights and liabilities. He has sufficient property to answer for the obligation which he guarantees. 1484) ======================== ============== PROVISIONS COMMON TO PLEDGE AND MORTGAGE (Arts. --should be protected against unjust pecuniary impoverishment by imposing on the principal. 4. REASON: They are not mere guarantors. If the person required to give a legal or judicial bond should not be able to do so.A exonerated by neglect of creditor to sue principal Strictissimi Juris Rule Applicable Only to Accommodation Surety REASON: An accommodation surety acts without motive of pecuniary gain and hence. Kinds 3. Strictissimi Juris Rule Not Applicable to Compensated Sureties REASONS: 1. for profit and on an impersonal basis. 1. Future property cannot be pledged or mortgaged 2. Pledge or mortgage is a property or real security. and not cash or currency Bondsman – a surety offered in virtue of a provision of law or a judicial order. 2121-2122) 9. Obligation of pledge 5. 2112. 3. 6. Definition 2.

and not to foreclosure of mortgages 4. Prohibition against pactum commissorium • Stipulation is null and void . Where each one of several things guarantees determinate portion of credit b. mortgaged is without legal existence and registration cannot validate it. estafa is committed by a person who.) Central Bank v. The Court held that the bank can only foreclose on 50% of the mortgaged land (50 ha.• 3. Creditor not required to sue to enforce his credit Pledgor or mortgagor may be third person The liability of an accommodation pledgor or mortgagor extends only to the property pledged or mortgaged. 6. Contract of pledge or mortgage may secure all kinds of obligation. Under RPC. 8. pretending to be the owner of any real property. be they pure or subject to a suspensive or resolutory condition 6. shall convey. but there is no pledge or mortgage yet. Creditor cannot appropriate to himself the thing nor can he dispose of the same as owner. consisting of several lots should be sold separately. 9. The mere embodiment of a real estate mortgage and a chattel mortgage in one document does not have the effect of fusing both securities into an indivisible whole 5. A promise to constitute pledge or mortgage gives rise only to a personal right binding upon the parties and creates no real right in the property. There should be a stipulation for an automatic appropriation by the creditor of the property in the event of nonpayment . property. MORTGAGE Constituted on immovables Delivery not necessary Effect on Security Contract Nullity of the stipulation does not affect validity and efficacy of the principal contract Important Points 1. 7. 7. Mortgage of a conjugal property by one of the spouses is valid only as to ½ of the entire property In case of property covered by Torrens title. sell. What exists is only a right of action to compel the fulfillment of the promise. Where there was failure of consideration 3. encumber or mortgage the same knowing that the real property is encumbered shall dispose of the same as unencumbered. [139 SCRA 46] c. PLEDGE (Arts. CA. Where only portion of loan was released Example: X borrowed 80k from the bank and he mortgaged his 100 ha. 2093-2123) PLEDGE is a contract by virtue of which the debtor delivers to the creditor or to a third person a movable or document evidencing incorporeal rights for the purpose of securing the fulfillment of a principal obligation with the PLEDGE Constituted on movables Property is delivered to the pledgee. Creditor is merely entitled to move for the sale of the thing pledged or mortgaged with the formalities required by law in order to collect 2. 4. Debtor -owner bears the risk of loss of the property 2. applies to sales in execution. or by common consent to a 3rd person Not valid against 3rd persons unless a description of the thing pledged and the date of the pledge appear in a public instrument Not valid against 3rd persons if not registered Right of Creditor where Debtor fails to Comply with his Obligation 1. Lender was only able to release 40k due to CB restrictions. 5. The rule that real property. There should be a pledge or mortgage b. Pledgor or mortgagor has free disposal of property Thing pledged or mortgaged may be alienated.stipulation where thing pledged or mortgaged shall automatically become the property of the creditor in the event of nonpayment of the debt within the term fixed • Requisites of pactum commissorium: a. a mortgagee has the right to rely upon what appears in the certificate of title and does not have to inquire further. Pledge or mortgage is indivisible Exceptions to the rule of indivisibility: a. It is essential that fraud or deceit be practiced upon the vendee at the time of the sale.

Cannot use the thing without the authority of the owner. Cannot deposit the thing pledged with a third person. Ownership of the thing pledged is transmitted to the vendee or transferee as soon as the pledgee consents to the alienation.understanding that when the obligation is fulfilled. but the latter shall continue in possession 6. negligence. Thing pledged may be alienated by the pledgor or owner only if with the consent of the pledgee. and not due to fortuitous event c. Real . Accessory .obligation incurred does not arise until the fulfillment of the principal obligation Cause or Consideration in Pledge 1.if pledgor is not the debtor PROVISIONS APPLICABLE ONLY TO PLEDGE 1. Kinds of Pledge: 1. the thing delivered shall be returned with all its fruits and accessions. Principal obligation – in so far as the pledgor is concerned 2.created by agreement of the parties 2. May use the thing if it is necessary for the preservation of the thing (e. Pledgee: a. Shall take care of the thing pledged with the diligence of a good father of a family b. Compensation stipulated for the pledge or mere liberality of the pledgor . CONSTRUCTIVE delivery or symbolic delivery of the key to the warehouse is sufficient to show that the depositary appointed by common consent of the parties was legally placed in possession. b. must be indorsed. without fault on his part. Is responsible for the acts of his agents or employees with respect to the thing pledged d. unless there is a stipulation authorizing him to do so c. All movables within commerce of men may be pledged as long as susceptible of possession 3. 4. impairment or .created by operation of law Characteristics of Pledge: 1. until the debt is paid 7. Date of the pledge 5. delay or violation of the terms of the contract. the owner may ask that it be judicially or extrajudicially deposited e. 2. and if he should do so. Subsidiary . Take care of the thing with diligence of a good father of a family. or defend it against a 3rd person d. Pledge shall take effect against 3rd persons only if the ff appears in a public instrument: a.g. car has to be driven once in a while) f. May bring the actions which pertain to the owner of the thing in order to recover it from. Has the right to the reimbursement of the expenses made for its preservation and is liable for its loss or deterioration by reason of fraud. Transfer of possession to the creditor or to third person by common agreement is essential in pledge a. May either claim another thing in pledge or demand immediate payment of the principal obligation if he is deceived on the substance or quality of the thing 8.perfected by delivery 2.creates obligation solely on the part of the creditor to return the thing subject upon the fulfillment of the principal obligation 4. May cause public sale of the thing pledged if. there is danger of destruction. Creditor : a. Contract of pledge gives the creditor the right to retain the thing in his possession or in that of a third person to whom it has been delivered. Has no right to use the thing or to appropriate the fruits without the authority of the owner e. ACTUAL DELIVERY is important b. The instruments pledged shall be delivered to the creditor and if negotiable.has no independent existence of its own 3. Legal . Description of the thing pledged b. or misuse the thing. Voluntary or conventional . Incorporeal right may be pledged. Unilateral .

the debtor is not entitled to the excess unless the contrary is provided 3. Contrary stipulation is void. 1707) Special Laws apply to pawnshops and establishments which are engaged in making loans secured by pledges. and ======================== ============== TOPIC UNDER THE SYLLABUS: E. stating the amount due. neither is the creditor entitled to recover the deficiency. 9. There must be notice to the pledgor and owner. If the price of the sale is less. 3. 1731) 3. Is allowed to substitute the thing which is in danger of destruction or impairment without any fault on the part of the pledgee. d. the pledgee becoming a depositary. If the thing pledged is returned by the pledgee to the pledgor or owner. Extinguishes the principal obligation whether the price of the sale is more or less than the amount due 2. neither the acceptance by the pledgor or owner. Necessary expenses shall be refunded to every possessor. diminution in value of the thing. Foreclosure . The agent may retain the things which are the objects of agency until the principal effects the reimbursement and pays the indemnity. 546) 2. there is prima facie presumption that the thing has been returned by the pledgee. (Art. Real Mortgage 1. there is prima facie presumption that the thing has been returned by the pledgee 5. b. with another thing of the same kind and quality The sale must be made with the intervention of a notary public EFFECT OF THE SALE OF THE THING PLEDGED 1. Has the responsibility for flaws of the thing pledged. Legal Pledges 1. Definition and characteristics 2. but only possessor in good faith may retain the thing until he has been reimbursed Useful expenses shall be refunded only to the possessor in good faith with the same right of retention. May require that the thing be deposited with a 3rd person if through the negligence or willful act of the pledgee the thing is in danger of being lost or impaired EXTINGUISHMENT OF PLEDGE (R2P23A) 1. with expenses in a proper case c. The proceeds of the auction shall be a security for the principal obligation. Cannot ask for the return of the thing against the will of the creditor. 2. the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired and by reason thereof. 4. If the thing is in the possession of 3rd person who has received it from the pledgor or owner after the constitution of the pledge. 1914) 4. (Art. For this purpose. A statement in writing by the pledgee that he renounces or abandons the pledge is sufficient to extinguish it. the thing is in the possession of the pledgor or owner. Sale of the thing pledged at public auction Formalities required in sale by a creditor if credit not paid in due time: 1. If subsequent to the perfection of the pledge. Provisions of the Civil Code shall apply subsidiarily. Payment of the debt 6. The sale must be at a public auction 3. Essential requisites 3.4. He who has executed work upon a movable has a right to retain it by way of pledge until he is paid. (Art. nor the return of the thing pledged is necessary. unless and until he has paid the debt and its interest. The laborer’s wages shall be a lien on the goods manufactured or the work done. Pledgor: a. (Art. If the price is more than amount due. The debt is due and unpaid 2. pledge is extinguished.

Mortgage deed remains as evidence of a personal obligation Effect of Mortgage 1. or that the interest as compensation for the use of the principal and the enjoyment of its fruits be in the form of a certain percent thereof. v. 2124-2131) is a contract whereby the debtor secures to the creditor the fulfillment of a principal obligation. The reason for this is that after-acquired properties are understood to be replacements. He may deliver said property to the mortgagee without altering the nature of the contract of mortgage. In that factory. the replacement shall be subject to the mortgage. 6. and in the absence thereof. 1602. as the original machine may be subject to wear and tear. enforceable against the whole world as long . the thing in which the mortgage consists may be alienated for the payment to the creditor. Eq uit ab le – one which. Cannot exist without a valid obligation 5. The parties may validly stipulate that if the original machine is replaced. As a general rule. 1603. 4. It is not an essential requisite that the principal of the mortgage credit bears interest. that he be legally authorized for the purpose 4. Mortgagor has free disposal of the property. Appears in a public document duly recorded in the Registry of Property to be validly constituted • If the instrument is not recorded. 2. A lien inseparable from the property mortgaged. Legal 3. Immovables 2. 3. LEGAL MORTGAGE: the persons in whose favor the law establishes a mortgage have no other right than to demand the execution and the recording of the document in which the mortgage is formalized. Creates right in rem or real rights. [20 SCRA 84 (1967)] Example: X owns a factory. INCIDENTS OF REGISTRATION OF MORTGAGE Mortgagee entitled to registration of mortgage as a matter of right Proceedings for registration do not determine validity of mortgage or its effect Registration is without prejudice to better right of third parties Mortgage deed once duly registered forms part of the records for the registration of the property mortgaged Mortgage by surviving spouse of his/her undivided share of conjugal property can be registered 1. specially subjecting to such security immovable property or real rights over immovable property in case the principal obligation is not complied with at the time stipulated. or use in connection with the real property already mortgaged belonging to the mortgagor is valid People’s Bank and Trust Co. Alienable real rights in accordance with the laws. 1604 and 1607) ESSENTIAL REQUISITES OF MORTGAGE: (FADVAP) 1. When the principal obligation becomes due.. imposed upon immovables. 1450. Effect of Invalidity of Mortgage on principal obligation 1. Voluntary 2. although it lacks the proper formalities of a mortgage shows the intention of the parties to make the property as a security for a debt (governed by Arts.======================== ============== MORTGAGE REAL MORTGAGE (Arts. Kinds of Mortgage: 1. improvements which the mortgagor may subsequently acquire. General Rule: Future property cannot be object of mortgage Exception: (AFTER-ACQUIRED PROPERTIES) A stipulation subjecting to the mortgage lien. 2. 5. the mortgagor retains possession of the property. Principal obligation remains valid 2. 1365. Dahican Lumber Co. Important Points 1. the mortgage is nevertheless binding between the parties. OBJECTS OF REAL MORTGAGE: 1. 1454. he installed a machine and subsequently mortgaged it. Mortgagor be the absolute owner of the thing pledged or mortgaged 3. Constituted to secure the fulfillment of a principal obligation 2. install.

Creates merely an encumbrance. the record showing clear title to the mortgagor. Mortgage with a dragnet clause enable the parties to provide continuous dealings.D. Governing Mortgage New Civil Code P. CA. Alienation of the mortgage credit is valid even if it is not registered. full amount of the ALIENATION OR ASSIGNMENT OF MORTGAGE CREDIT The mortgage credit is a real right which may be alienated by the mortgagee without need to obtain the consent of the debtor. Registration is necessary only to affect third persons. Growing fruits 4. The law considers void any stipulation forbidding the owner from alienating the immovable mortgaged (Art. 1142 & 1144) • • JUDICIAL FORECLOSURE (governed by Rule 68 of Rules of Court): (J-PACE-PC) which is specifically phrased to subsume all debts of past or future origin. the nature or extent of which may not be known or anticipated at the time. will be protected against equitable claims on the title in favor of third persons of which he had no actual or constructive notice St. object. If not registered the third party must know of the mortgage. 2. MORTGAGE TO SECURE FUTURE ADVANCEMENTS (BLANKET OR DRAGNET CLAUSE) Blanket/Dragnet Clause . But if the mortgaged estate passes into the hands of a third person.Expropriation value of the property should it be expropriated. Laws 1. 3. Judicial action for the purpose in the proper court which has jurisdiction over the area wherein the real property involved or a portion thereof is situated 2. 268 SCRA 441 (1997) The action to recover a deficiency after foreclosure prescribes after 10 years from the time the right of action accrues (Arts. • The mortgagor’s default does not operate to vest in the mortgagee the ownership of the encumbered property. the mortgage does not extend to any machinery. and they avoid the expense and inconvenience of executing a new security on each new transaction. Sulit v. IAC. • His failure to redeem the property does not automatically vest ownership of the property to the mortgagee. 1952 Revised Administrative Code R. 2. EXTENT OF MORTGAGE (AIGRiPE) A real estate mortgage constituted on immovable property is not limited to the property itself but also extends to its: 1. it is necessary that there be an express stipulation to that effect.A. Proceeds of insurance should the property be destroyed 6. To exclude them. • A foreclosure sale retroacts to the date of registration of the mortgage and that a person who takes a mortgage in good faith and for valuable consideration. General Rule: There must be a stipulation for the inclusion of future advancements. until the advancements is paid. 151 SCRA 577 (1987) Mere inadequacy of the price obtained at the sheriff’s sale will not be sufficient to set aside the sale unless “the price is so inadequate as to shock the conscience of the court” taking into consideration the peculiar circumstances attendant it is registered. chattel or construction which he may have brought or placed there and which such third person may remove whenever it is convenient for him to do so. as regards aliens becoming mortgages Foreclosure of Mortgage is the remedy available to the mortgagee by which he subjects the mortgaged property to the satisfaction of the obligation to secure which the mortgage was given. Rents or income 5. Court order to mortgagor to pay mortgage debt with interest and other charges within a period of not less than 90 days nor more than 120 days from the entry of judgment . Dominic Corporation v. Accessions 2. Improvements 3. 4882. 4. 2130). A mortgage given to secure future advancements is a continuing security and is not discharged by the repayment of the amount named in the mortgage.

Quasi in rem action 2. and if the same is worth more than P400. Mortgagee is entitled to recover deficiency 2. otherwise the sale shall be postponed to another date. Public sale should be made after proper notice (posting and publication) 4. Action for recovery of deficiency may be filed even during redemption period 4. The certificate of sale must be approved by the Executive Judge 4. Remedy of party aggrieved by foreclosure is a petition to set aside sale and cancellation of writ of possession 7. 1508. Claims of junior encumbrancers or persons holding subsequent mortgages in the order of their priority. Foreclosure is only the result or incident of the failure to pay debt 3. as amended) 1. Debtor has the right to redeem the property sold within 1 year from and after the date of sale 6. which operates to divest the rights of all parties in the action and to vest their rights to the purchase. January 15. Application of proceeds of sale to: a. A. 3135 ) & Chattel Mortgage (Act No. Costs of the sale. if any shall be paid to the mortgagor 6.00. The application shall be raffled among all sheriffs 8. In extrajudicial foreclosure of real mortgages in different locations covering one indebtedness. Action to recover prescribes after 10 years from the time the right of action accrues Sale to the highest bidder at public auction. Confirmation of sale. that is. Sheriff’s certificate is executed. b.M. Republication is necessary for the validity of a postponed foreclosure sale (parties have no right to waive the publication requirement) Procedure for Extrajudicial Foreclosure of Real Estate Mortgage (Act No. Authority is not extinguished by death of mortgagor or mortgagee 3. acknowledged and recorded to complete the foreclosure Nature of Judicial Foreclosure Proceedings 1. No auction sale shall be held unless there are at least 2 participating bidders. should the mortgagor fail to pay at the time directed. the filing fees collected. Clerk of Court will examine whether the requirements of the law have been complied with.3. the mortgages sought to be foreclosed. If the deficiency is embodied in a judgment. The notice of sale shall be published in a newspaper of general circulation 7. The Clerk of Court shall issue certificate of payment indicating the amount of indebtedness. 3135. and d. Survives death of mortgagor EXTRAJUDICIAL FORECLOSURE (governed by Act No. After the redemption period has expired. that such notice has been published once a week for at least 3 consecutive weeks in a newspaper of general circulation in the city or municipality 3. N0. c. The balance. Express authority to sell is given to the mortgagee 2. Amount due the mortgagee. The names of the bidders shall be reported by the Sheriff or the Notary Public who conducted the sale to the Clerk of Court before the issuance of the certificate of sale Right of mortgagee to recover deficiency 1. subject to the right of redemption allowed by law 4. only one filing fee corresponding to such debt shall be collected 5. 99-10-05-0. 1. Fil ing of application before the Executive Judge through the Clerk of Court 2. whether the notice of sale has been posted for not less than 20 days in at least 3 public places of the municipality or city where the property is situated. Surplus proceeds of foreclosure sale belong to the mortgagor or his assigns 5. Execution of judgment 5. it is referred to as deficiency judgment 3. 2000) (ARC-DIN-REA) . the description of the real estates and their respective locations 6. the Clerk of Court shall archive the records 9. the sale shall then proceed. If on the new date there shall not be at least 2 bidders.

The value of the mortgaged property has no bearing on the bid price at the public auction. Options in case the debtor dies: a. To judicially foreclose mortgage and prove any deficiency c. Gaborro. Remedies are alternative. as long as within the period prescribed. Property may be sold for less than its fair market value upon the theory that the lesser the price the easier for the owner to redeem 3. 83 SCRA 688 (1978) PERIOD OF REDEMPTION Extra-judicial (Act No. Where there is right to redeem General Rule: Inadequacy of price is immaterial because the judgment debtor may redeem the property Exception: The price is so inadequate as to shock the conscience of the court taking into consideration the peculiar circumstances 2. Applies only to extrajudicial foreclosure of real mortgage NOTE: The right of redemption. v. Right of redemption: right of the mortgagor to redeem the property within a certain period after it was sold for the satisfaction of the debt a. not cumulative. NOTE: Redemption of the banking institutions is allowed within 1 year from confirmation of sale 2. a. A prerogative of the mortgagee Stipulation of Upset Price or “tipo” A stipulation of minimum price at which the property shall be sold to become operative in the event of a foreclosure sale at public auction is NULL and VOID Effect of inadequacy of price in foreclosure sale 1. 230 SCRA 513 (1994) A sale by the mortgagor to a third party of the mortgaged property during the period of redemption transfers only the right to redeem the property and the right to possess. Juridical person – same rule as natural person c. To waive mortgage and claim entire debt from the mortgagor’s estate as an ordinary claim b. provided that the public auction was regularly and honestly conducted Waiver of security by creditor 1. E quity of redemption: right of the mortgagor to redeem the mortgaged property after his default in the performance of the conditions of the mortgage but before confirmation of the sale. Applies to judicial foreclosure of real mortgage and chattel mortgage foreclosure b. The judgment debtor remains in possession of the property foreclosed and sold during the period of redemption. Natural person – 1 year from registration of the certificate of sale with Registry of Deeds b. To rely on the mortgage exclusively without filing a claim for deficiency NOTE: Foreclosure retroacts to the date of registration of mortgage REDEMPTION is a transaction by which the mortgagor reacquires or buys back the property which may have passed under the mortgage or divests the property of the lien which the mortgage may have created. CA. 3135) a. KINDS OF REDEMPTION 1. Mortgagee may waive right to foreclose his mortgage and maintain a personal action for recovery of the indebtedness 2. 117 of General Banking Law) . Inc. use.Nature of power of foreclosure by extrajudicial sale 1. A second mortgagee acquires only the equity of redemption vested in the mortgagor. Conferred for mortgagee’s protection 2. Ignacia Rural Bank. but he cannot make a conveyance of the ownership of the property. An ancillary stipulation supported by the same cause or consideration for the mortgage 3. Juridical person (mortgagee is bank) – 3 months after foreclosure or before registration of certificate of foreclosure whichever is earlier (Sec. since it belongs to the purchaser at the foreclosure sale Dizon v. 3. and his rights are strictly subordinate to the superior lien of the first mortgagee. and enjoy the same during the period. may be exercised irrespective of whether or not the mortgagee has subsequently conveyed the property to some other party Sta.

3135 in relation to Sec. Mortgagee is a bank (GBL 2000) a. Obligations of Antichretic Creditor ======================== ============== ANTICHRESIS (Arts. Without right to reimbursement for useful expenses RIGHT OF PURCHASER TO WRIT OF POSSESSION Writ of Possession – order whereby the sheriff is commanded to place in possession of real or personal property the person entitled thereto such as when a property is extrajudicially foreclosed. CA. The issuance of the writ of possession in an extrajudicial foreclosure is merely a ministerial function. Antichresis 1. Before lapse of redemption period – file an ex parte application and file a bond After lapse of redemption period – file an ex parte application and no need for a bond 1 year from registrati on of sale 1 year from registrati on of sale X X 1 year from registrati on of sale Until registrati on of certificat e of sale or 3 months from sale whichev er is earlier 1 year from registrati on of sale 1 year from registrati on of sale NOTE: Allowing redemption after the lapse of the statutory period when the buyer at the foreclosure sale does not object but even consents to the redemption. 1% interest per month on the purchase price c. Interest c. up to the time of redemption 2. standing upon his rights as mortgagee and not claiming under another title. Definition and Characteristics 2. Mortgagee is not a bank (Act No. with the same rate of interest computed from the date of registration of sale. Amount due under the mortgage deed b. Similar to an antichresis creditor – entitled to retain such possession until the indebtedness is satisfied and the property redeemed. Purchase price of the property b. Taxes paid and amount of purchaser’s prior lien. 2. After the foreclosure sale. if any. H Judicial – before confirmation of the sale by the court Periods of redemption Mortgage: Individual debtors/mortga gors Juridical persons as debtors/mortga gors Judicial Foreclosure BANKS NONBANK S Extrajudicial Foreclosure BANKS NONBANKS e is entitled to the payment of his credit the excess of the proceeds of the auction sale. ======================== ============== TOPIC UNDER THE SYLLABUS: F. Rule 39 of Rules of Court) a. His remedy is limited to the right to redeem by paying off the debt secured by the first mortgage. will uphold the policy of the law which is to aid rather than defeat the right of redemption Ramirez v.2. The purchaser at the foreclosure sale is entitled as of right to a writ of possession. 2132-2139) . the second mortgage is extinguished. 3. 219 SCRA 598 (1993) AMOUNT OF THE REDEMPTION PRICE: 1. 28. Cost and expenses NOTE: Redemption price in this case is reduced by the income received from the property Junior Mortgagees 1. since the mortgage cannot be enforced beyond the total value of the mortgaged property. for the purpose of enforcing his security upon such property or making its income help to pay his debt RIGHTS AND OBLIGATIONS OF MORTGAGEE IN POSSESSION 1. there remains in the second mortgagee a mere right of redemption. Mortgagee in Possession – one who has lawfully acquired actual or constructive possession of the premises mortgaged to him. In case the credit of the first mortgagee has absorbed the entire proceeds of the sale.

Chattel Mortgage 1. pure or conditional OBLIGATIONS OF ANTICHRETIC CREDITOR: (FAT-P) 1. antichresis is susceptible of guaranteeing all kinds of obligations. El Hogar Filipino. 2140-2141) is a contract by virtue of which a personal property is recorded in the Chattel Mortgage Register as security for the performance of an obligation. Express agreement that debtor will give possession of the property to creditor and that the latter will apply the fruits to the interest. Inc. To render an account of the fruits to the debtor 4. if any. CHARACTERISTICS 1. [68 Phil 712] A stipulation authorizing the antichretic creditor to appropriate the property upon the nonpayment of the debt within the agreed period is void (Art. as amended If the property is foreclosed. 2134) SPECIAL REQUISITES: 1. 2088) ======================== ============== TOPIC UNDER THE SYLLABUS: G. there being nothing in the Code to show that antichresis is only applicable to securing the payment of interest-bearing loans. Accessory contract – it secures the performance of a principal obligation Formal contract – it must be in a specified form to be valid (Art. with the obligation to apply them to the payment of the interest. Delivery of the immovable is necessary for the creditor to receive the fruits and not that the contract shall be binding 3. To apply all the fruits. including necessary expenses NOTE: Creditor may avoid said obligation by: a. if owing. Amount of principal and interest must be specified in writing (otherwise. CHATTEL MORTGAGE Involves movable property Delivery of the personal property is NOT necessary Registration is necessary for validity Procedure: Sec 14 of Act no 1508. the excess over the amount due goes to the debtor Creditor is entitled to recover deficiency from the debtor EXCEPT if it is a security for the purchase of personal property in installments PLEDGE Involves movable property Delivery of the personal property is necessary Registration is NOT necessary for validity Procedure: Art 2112 of Civil Code If the property is sold. it is a pledge and not a chattel mortgage. Definition and characteristics 2. To pay taxes and charges on the estate. To bear the expenses necessary for its preservation and repair REMEDIES OF CREDITOR IN CASE OF NONPAYMENT OF DEBT 1. may agree on an extrajudicial foreclosure in the same manner as they are allowed in contracts of mortgage and pledge. the debtor is not entitled to the to the excess UNLESS it is otherwise agreed or in case of legal pledge Creditor is not entitled to recover deficiency notwithstanding any stipulation to the contrary . Action for specific performance 2. then to the principal of his credit NOTE: The obligation to pay interest is not essential in a contract of antichresis. and thereafter to the principal of the credit. By stipulation to the contrary 2. On the contrary.ANTICHRESIS is a contract whereby the creditor acquires the right to receive the fruits of an immovable of the debtor. Petition for the sale of the real property as in a foreclosure of mortgages under Rule 68 of the Rules of Court NOTE: The parties. to the payment of interest. NOTE: If the movable. after receiving them. void) 4. if owing. and thereafter to the principal 3. Registration ======================== ============== CHATTEL MORTGAGE CHATTEL MORTGAGE (Arts. Compelling debtor to reacquire enjoyment of the property b. instead of being recorded is delivered to the creditor. Tavera v. Only the fruits of an immovable property 2. however.

1508. When default occurs and the creditor desires to foreclose. immoral or against public order in an agreement for the private sale of the personal properties covered by chattel mortgage Period to Foreclose 1. 2. and purpose of such sale. The 30-day period is the minimum period after violation of the mortgage condition for the creditor to cause the sale at public auction with at least 10 days notice to the mortgagor and posting of public notice of time. Reason is chattel mortgage is only given as a security and not as payment of the debt. Before default. b. FORECLOSURE OF CHATTEL MORTGAGE 1. place. After 30 days from the time the condition was broken 2. Public sale 2. 113 SCRA 107 (1982) EFFECT OF REGISTRATION 1. Subsequent attaching creditor.” • Not essential to the validity of the mortgage but only transforms a valid one into a preferred one • Absence vitiates a mortgage only as against third persons without notice NOTE: A chattel mortgage can only cover obligations existing at the time the mortgage is constituted. If the debtor refuses to surrender the property. to discharge the obligation. as amended 2. • The creditor cannot take the property by force nor can the sheriff seize the property.D. Person holding a subsequent mortgage. mortgagee is not entitled to the possession of the property (otherwise. Revised Administrative Code 4. 1521) governs mortgage of vessels of domestic ownership Affidavit of Good Faith . Civil Code 3.An oath in a contract of chattel mortgage wherein the parties "severally swear that the mortgage is made for the purpose of securing the obligation specified in the conditions thereof and for no other purposes and that the same is a just and valid obligation and one not entered into for the purpose of fraud. Creates real rights – binding notice and symbolical possession 2. it will become a pledge) 2. Civil Action to Recover Credit 1. he has the right to take the property. Revised Penal Code 5. Chattel Mortgage Law. A mortgage that contains a stipulation in regard to future advances in the credit will take effect only from the date the same are made and not from the date of the mortgage Jaca v. Independent action not required 2. 3. Mortgagor. the right of redemption is no longer available to the mortgagor. • An attaching creditor who so redeems shall be subrogated to the rights of the mortgagee and entitled to foreclose the mortgage in the same manner that the mortgagee could foreclose it The redemption is made by paying or delivering o the mortgagee the amount due • . the creditor’s remedy is to institute an action to effect judicial foreclosure or to secure possession preliminary to sale. on such mortgage and the expenses incurred by such condition before the sale costs and breach of Right of Mortgagee to Possession 1. the ff may redeem: a. Private sale – there is nothing illegal. and is a period of grace for the mortgagor. After the sale at public auction.. Davao Lumber Co. Mortgage lien deemed abandoned by obtaining a personal judgment (civil action to recover amount of loan) Right of Mortgagee to Recover Deficiency 1. Adds nothing to mortgage NOTE: Registration of assignment of mortgage is not required • RIGHT OF REDEMPTION When the condition of a chattel mortgage is broken. Act No.Laws Governing Chattel Mortgage 1. Where mortgage foreclosed: creditor may maintain action for deficiency although Chattel Mortgage Law is silent on this point. Where mortgage constituted as security for purchase of personal property payable in installments: no deficiency judgment can be asked and any contrary agreement shall be void Redemption can be done within 30 days from the time the condition is broken. Ship Mortgage Decree of 1978 (P. c. 3.

and (2) the payment is made through mistake. In such a case. a creditor-debtor relationship is created under a quasicontract whereby the payor becomes the creditor who then has the right to demand the return of payment made by mistake. this juridical relation does not arise in the following: o When the property or business is NOT neglected or abandoned o If the manager has been impliedly authorized by the owner ========================= ============= TOPIC UNDER THE SYLLABUS: H. and the person who received the payment. or person holding under him Negotiorium Gestio (Art 2144) • One who voluntarily takes charge of the agency/management of the business or property of another (without any power from the latter). Where mortgaged property subsequently attached and sold: mortgagee is entitle to deficiency judgment in an action for specific performance Application of Proceeds of Sale 1. and not through liberality or some other cause (Siga-An v. • The right of preference can be made effective only by being asserted and maintained. if any. Meaning of Concurrence and Preference 2. Exempt Property 4. the obligation to return it arises. Concurrence and Preference of Credits 1. General Provisions: 1. Claims of persons holding subsequent mortgages in their order 4. but merely a preference to the application of the proceeds. Villanueva. present and future. Preferred Credits on Specific Movables 3. GR 173227 January 2009) • • ========================= ============= TOPIC UNDER THE SYLLABUS: I. 2236-2251) CONCURRENCE OF CREDIT implies possession by two or more creditors of equal rights or privileges over the same property or all of the property of a debtor. Otherwise. PREFERENCE OF CREDIT is the right held by a creditor to be preferred in the payment of his claim above others out of the debtor’s assets. and it was unduly delivered through mistake. Concurrence and Preference of Credits 1. Solutio Indebiti 2. and the person who has no right to receive such payment becomes obligated to return the same The principle ofsolutio indebiti applies where (1) a payment is made when there exists no binding relation between the payor. who has no duty to pay. Costs and expenses of keeping and sale 2. shall be paid to the mortgagor. is obliged to continue such agency or management until: o The termination of the affair or its incidents or o He has required the person concerned to substitute him (if the owner is in a position to do so) However. Balance. it is lost. The debtor is liable with all his property. • Preference creates no interest or lien on the property.3. Payment of the obligation 3. Classification of Credits ========================= ============= CONCURRENCE AND PREFERENCE OF CREDITS (Arts. for the fulfillment of • . Negotiorum Gestio ========================= ============= Solutio Indebiti and Negotiorium Gestio Solutio Indebiti (Art 2154) • The principle of solution indebiti provides that if something is received when there is no right to demand it.

6. real or personal. If there are 2 or more credits with respect to the same specific movable property. the Public Land Act. they shall be satisfied pro rata. etc. 1956) c. If there is co-ownership. If there are 2 or more credits with respect to the same specific real property or real rights. exclude all others to the extent of the value of the personal property to which the preference refers. lettered gravestones. 5. 141. Taxes due to the State shall first be satisfied 2. and those which enjoy preference. Property in custodia legis and of public domain 2. necessary clothing. Insolvency shall be governed by the Insolvency Law (Act No. they shall be satisfied pro rata. as to the amount not paid. Credits which enjoy preference with respect to specific movables. and one of the co-owners is the insolvent debtor. after the payment of the taxes and assessment of the taxes and assessments upon the immovable property or real right. 4. . as amended) b. subjects to exemptions provided by law . Right to receive support as well as money or property obtained by such support shall not be levied upon on attachment or execution (Art 205. Those credits which enjoy preference in relation to specific real property or real rights. Common credits (Art 2245) . 153 and 155. Rule 39. if any. for the payment of other credits. shall be excluded from the insolvency proceedings CLASSIFICATION OF CREDITS 1. The excess.Exempt property: a. NCC) 3. Sec 118. after the payment of the credits which enjoy preference with respect to specific property. Obligations of the insolvent spouse have not redounded to the benefit of the family 4. 2. or by any other right or title not comprised in Arts 22412244 shall enjoy no preference Order of Preference of Credit 1. Special preferred credits (Arts 2241 and 2242 of NCC) a.credits of any other kind or class. taxes and fees due the State or any subdivision thereof 3. Property held by the insolvent debtor as a trustee of an express or implied trust. is not liable for the unsatisfied claims of his creditors with said property (Secs. Act No. exclude all others to the extent of the value of the immovable or real right to which the preference refers. Partnership or community subsists b. Future property • A debtor who obtains a discharge from his debts on account of insolvency.( CA No. 1956. Insolvency Law. 2244 Common credits referred to in Art. after the payment of duties. his undivided share or interest in the property shall be possessed by the assignee in insolvency proceedings because it is part of his assets 5. Family home (Arts 152. Exemption of conjugal property or absolute community or property provided that: a. shall be added to the free property which the debtor may have. Considered as mortgages or pledges of real or personal property or liens within the purview of legal provisions governing insolvency b. Those credits which do not enjoy any preference with respect to specific property. 2245 shall be paid pro rata regardless of dates. Ordinary preferred credits (Art 2244) preferred in the order given by law 3. Sec 13. Rules of Court (Ordinary tools. NCC) 2.) 4. shall be satisfied according to the following rules: • • Order established by Art. Present property 1.his obligations. 68 and 69. as amended) 3.

To ensure or maintain certainty and predictability of commercial affairs FRIA DEFINTION OF “DEBTOR” • Sole proprietorship (juridical debtor) • • • Partnership (juridical debtor) Corporation (juridical debtor) Individual debtor who has become insolvent (natural debtor) 1. Involuntary insolvency ========================= ============= INSOLVENCY LAW – FRIA FRIA DEFINITION OF “INSOLVENCY” Financial condition of a debtor that is generally unable to pay its or his liabilities as they gall due in the ordinary course of business or has liabilities that are greater than its or his assets For FRIA to be applicable. which the proper court oversees and deliver a final judgment regarding the rehabilitation plan • REHABILITATION o Restoration of the debtor to a condition of successful operation and solvency The debtor is economically feasible and its creditors can recover by way of present value of payments projected in the plan o • REHABILITATION PLAN o Plan by which the financial wellbeing and viability of the insolvent debtor can be restored using various means • REHABILITATION RECEIVER o Persons or persons. Voluntary insolvency 4.NOTE: Preference of mortgage credits is determined by the priority of registration. there must be insolvency proceedings in the courts designated by the Supreme Court to hear and resolve cases brought under this act PURPOSES OF FRIA 1.) Jurisdiction is acquired upon publication of notice of the commencement of proceedings in any newspaper of general circulation MODES OF REHABILITATION • Court-supervised rehabilitation • • Pre-negotiated rehabilitation Out of court or informal restructuring agreements or rehabilitation plans ========================= ============= TOPIC UNDER THE SYLLABUS: J. appointed as such by the court entrusted with powers and duties set forth in the FRIA • • KINDS Voluntary proceedings o Filing a petition for rehabilitation with the court done by the insolvent debtor NATURE OF PROCEEDINGS Insolvency proceedings in FRIA are proceedings in rem HOW JURISDICTION IS ACQUIRED • Involuntary proceedings o Filed by a creditor or group of creditors . natural or juridical. To benefit the debtor in discharging him from his liabilities and enabling him to start afresh with the property set apart to him as exempt 3. Definition of insolvency 2. following the maxim “prior tempore potior jure” (He who is first in time is preferred in right. COURT-SUPERVISED REHABILITATION • Owner. To effect equitable distribution of the insolvent’s property among its or his creditors 2. partnership or corporation may initiate proceedings for rehabilitation. Suspension of payments 3. Insolvency Law 1.

5 working days provided for issuing the order will be reckoned from date of filing the amended petition or submission of additional documents • • Commencement order: Identifies the debtor Summarizes the grounds for initiating the proceedings States the relief States the legal effects of the CO Declares that the debtor is under rehab Directs publication in newspaper of general circulation in the Philippines . Rehabilitation plan 9. Other documents required by the Act or rules promulgated by the SC o Attachments in the petition for rehabilitation: Involuntary Proceedings 1. Grounds which petition is based 5. preventing debtor to pay debts due or will render him insolvent •  Action on the Petition and Commencement of Proceedings • If court finds the petition for rehabilitation to be sufficient in form and substance. Inventory of assets. Specific relief sought pursuant to the Act 4. If in the same period the court finds the petition deficient. Names of at least 3 nominees for rehabilitation receiver position 6. amounts of claims and collaterals 7. whichever is higher 5. Other documents required by the act or rules promulgated by the SC • TYPES OF PROCEEDINGS Initiation proceedings o Attachments in the petition for rehabilitation: Voluntary Proceedings 1. liabilities and creditors with addresses. it shall within 5 working days from filing. Names of at least 3 nominees for rehabilitation receiver position 10. Other information required depending on relief requested 7. Circumstances sufficient for a petition to initiate rehabilitation proceedings 3. Specific relief sought 4. depending on the kind of relief requested 6. principal activities and addresses 2. or to submit documents necessary to fix said petition. principal activities and addresses 2. List of debtors. court may give petitioner time to amend or supplement petition. State fact of and cause of debtor’s insolvency or inability to pay debt 3. Identification of debtor. issue a Commencement Order. Identification of debtor. Rehabilitation plan GROUNDS TO INITIATE INVOLUNTARY PROCEEDINGS • No genuine issue of fact on law on the claim/s of the petitioner/s (creditors) and demandable payments due have not been made for at least 60 days or debtor failed in meeting obligations A third-person creditor other than petitioner/s has initiated foreclosure against debtor. includes receivables and claims against 3rd parties 8. Other information required by the act.o Claim or aggregate claim is at least P1M or at least 25% of capital stock or partner’s contribution.

he has met with the debtor. directors and officers acting in good faith and due diligence  Debtor likely to be able to pursue viable rehabilitation plan Attachments on petition for rehabilitation are not materially false If petitioner is the debtor. o Minimum requirements must be met: • Rehabilitation plan complies with minimum contents prescribed by the act • Sufficient monitoring by rehabilitation receiver • Debtor has met with creditors in attempts for consensus proposed by rehabilitation plan • Rehabilitation receiver submits a report. the creditor files a subsequent belated claim . made a good faith effort to reach consensus Effect of Failure to File Notice of Claim Instead of filing a notice of claim. attachment or other provisional remedies against the debtor  Prohibit the debtor from selling. stockholders. on the court’s discretion o Enforcement of claims against sureties and other persons solidarily liable with debtor and 3rd party accommodation mortgagors even issuers of letters of credit UNLESS the property subject of the 3rd party/accommodation mortgage is necessary for the rehabilitation of the debtor as determined by the court (in other words. CO shall be effective for the duration of the rehabilitation proceedings. encumbering. transferring or disposing in any manner any of its properties except in the ordinary course of business  Prohibit the debtor from making any payment of its outstanding liabilities as of the commencement date • Note: Stay order applies to government financial institutions (Sec 20) Exceptions to the Stay and Suspension Order • Cases already pending appeal in the SC as of the commencement date. Provided that any final judgment on the appeal be referred to the court for appropriate action o Cases pending in specialized court or quasi-judicial agency. partners. he has met with creditors representing ¾ of total obligation made in good faith. If petitioner is a creditor. secured creditors can enforce their claims/foreclose if the security they’re holding is not necessary for rehabilitation) o To any form of action of customers of a security market participant to recover or claim securities entrusted - • • • o to the latter in the ordinary course of the latter’s business o To the actions of a licensed broker or dealer to sell pledged securities of a debtor pursuant to a securities pledge or margin agreement o To the clearing and settlement of financial transactions through the facilities of a clearing agency o To any criminal action against the debtor/owner o Effectivity and Duration of Commencement Order o Unless lifted by the court. a preliminary evaluation of how realistic the goals of rehabilitation plan are and how reasonable and realistic success is based on  Sufficient assets to rehabilitate debtor  Sufficient cash flow to maintain operations of debtor  Petition is not a filing intended to defraud creditors and delay claims  Debtors.• • Appoints a rehabilitation receiver Summarizes the requirements and deadlines for creditors to establish their claims against the debtor (5) days before the initial hearing Sets the case for initial hearing Suspension/Stay Order (effects)  Suspend all actions or proceedings for enforcement of claims against the debtor  Suspend all actions to enforce any judgment.

causes of insolvency including any unlawful acts done by oweners which may have contributed to the insolvency • If the rehab plan is indeed feasible and reasonable in relation to goals and underlying assumptions • Substantial likelihood exists or not • Petition should be dismissed or not • Debtor should be liquidated and/or dissolved or not  Giving due course to or dimissal of petition or conversion of proceedings o Within 10 days from receipt of rehabilitation receiver report mentioned in section2 24. court may • Give due course to petition upon finding  Debtor is insolvent  Substantial likelihood for success exists • Debtor shall comply with provisions of the Rehab Plan and take action to carry out the plan • Payments made to creditors according to the Rehab Plan • Contracts with creditors interpreted as continuing to the extent that they do not conflict with the Rehab Plan • Compromises on amounts or rescheduling of timing of payments by debtor shall be binding to creditor regardless whether plan ins a success or not • Claims after approval of plan not treated by the plan are not subject to suspension order o Period for confirmation of rehabilitation plan  Court has a maximum period of 1 year from date of filing of petition o to confirm rehabilitation plan. Unless the plan requires or describes the role of the rehabilitation receiver after approval of the plan. failing which. debtor fails to implement the rehabilitation plan. the rehabilitation plan may be terminated by order of court. the rehabilitation receiver shall submit a report to court stating preliminary findings and recommendations on whether: • Debtor is insolvent.  Failure of rehabilitation: • Dismissal of petition by court • Debtor fails to submit a rehabilitation plan • Under rehabilitation plan submitted by debtor. failure to realize objectives • Commission of fraud in securing the approval for the plan • Analogous circumstances as may be defined by rules of procedure  Court action upon break of or failure of rehabilitation plan (upon motion of an affected party) • Issue an order directing breach be cured within specified period. If no plan is confirmed within said period proceedings may upon a motion or motu proprio be converted to one for liquidation of the debtor o Accounting discharge of Rehabilitation Receiver  Upon confirmation of rehabilitation plan. rehabilitation receiver shall provide a final report and accounting to the court.Such claim shall not be entitled to participate in rehabilitation proceedings o Creditor is still entitled to receive distributions arising from rehabilitation  Rehabilitation Receiver o Within 40 days from initial hearing. curt shall discharge rehabilitation receiver of duties. o Termination Proceedings  Upon motion of any stakeholder or rehabilitation receiver. there is no substantial likelihood for rehabilitation • Though amended and approved. proceeding may be converted to liquidation • Issue and order converting proceedings to liquidation • Allow debtor to submit amendments to plan subject to approval under same requirements for approval under provisions • Issue any other order to remedy breach consistent with present regulation .

or any of them was induced by fraud • Note: if objection is meritorious. PRE-NEGOTIATED REHABILITATION Parties to file a petition for negotiated rehabilitation plan • Insolvent debtor by itself. including the names of at least 3 qualified nominees for rehabilitation receiver • Summary of disputed claims against debtor. including secured claims of the debtor and unsecured creditors holding more than 50% of the total unsecured claims of the debtor Documents that must accompany the petition as a minimum • Schedule of debtor’s debts and liabilities • Inventory of debtor’s assets • The pre-negotiated Rehabilitation Plan. or • Jointly with any of its creditors a pre- Requisites for a petition for a prenegotiated rehabilitation plan • Petition must be filed by o An insolvent debtor by itself or jointly with any of its creditors o With the court • The pre-negotiated rehabilitation plan must be endorsed or approved by creditors holding at least 2/3 of the total liabilities of the debtor. or • The support of the creditors. the rehabilitation plan is deemed approved Effect of Approval of Plan Same effect as confirmation of Plan under Court=Supervised Rehabilitation 3. that if the termination is due to failure of rehabilitation or dismissal of petition for reasons other than technical grounds. the Court may order conversion of proceedings into liquidation • Note: if the objection is not meritorious or the objection is cured. and report on provisioning of refunds to account for appropriate payments Procedure for pre-negotiated rehabilitation • Filing of the petition Cause for which objection may be made to petition or plan • The allegation in the petition or the Rehabilitation Plan or the attachments thereto are materially false or misleading • The majority of any class of creditors do not in fact support the Rehabilitation Plan • The Rehabilitation Plan fails to accurately account for a claim against the debtor and the claim is not categorically declared as contested claim. proceedings will automatically be converted to LIQUIDATION • • • • • Issuance of Court Order Publication of the order in a newspaper of general circulation in the Philippines once a week for at least two consecutive weeks Objection to the petition or rehabilitation plan if any Hearing on the objections if necessary Approval of the plan 2. the debtor is directed to cure the defect within a reasonable period • Note: if the debtors/creditors supporting the plan acted in bad faith or the objection is non-curable. OUT-OF-COURT OR INFORMAL RESTRUCTING AGREEMENTS OR REHABILITATION PLANS Informal restructuring/workout agreement or rehabilitation plan defined Done outside or without the intervention of court provided it meets the minimum requirements set for the in the Act Requisites for an Out-of-court or informal restructuring/workout agreement or rehabilitation plan • The debtor must agree to the out-of-court or informal restructuring/workout agreement or Rehabilitation Plan .•  • • • Enforce applicable provision of rehabilitation plan through writ of execution Effects of termination The discharge of the rehabilitation receiver subject to his submission of a final accounting The lifting of the Stay Order and any other court order holding in abeyance any action for the enforcement of a claim against the debtor PROVIDED.

Schedule of debtor’s liabilities with a list of creditors 2. it shall issue the Liquidation Order (Sec 104) ιιι. Names of at least 3 nominees to the position of liquidator Procedure: ι. SECURED and UNSECURED. Discharge of Liquidator (Sec 122) ϖιιι. Filing of Petition (Sec 90) ιι. Involuntary Liquidation: α. Appeal if proper Standstill Period It is a period that may be agreed upon by the parties pending negotiation/finalization of the out-of-court agreement or Rehab Plan (similar to a stay order) Requirements for the standstill period to be enforceable against 3rd parties • • Agreement is approved by creditors representing 50% of the total liabilities of the debtor Notice is published o Must invite creditors to participate in the negotiation o All creditors must be given due notice Period does not exceed 120 days β. Contents: 1. An insolvent debtor may apply for liquidation by filing a verified petition for liquidation with the court ι. whichever is higher. ι. and that the due and demandable payments thereon have not been made for at least 180 days or the debtor has failed generally to . Hearing for election and appointment of liquidator [Sec 112 (j)] ϖ. Direct payments of any claims and conveyance of any property due the debtor to the liquidator [Sec 112 (e)] ϖι. Contents: 1. A verified petition may be filed in court by 3 or more creditors with the aggregate claims of at least 1M or at least 25% of the subscribed capital stock or partner’s contributions of the debtor. If court finds petition sufficient in form and substance. • Effect of Standstill Period Any court action shall not stay the plan’s implementation UNLESS the relevant party is able to secure a TRO or injunctive relieve from the Court of Appeals to stay the implementation of proceedings The effect of the approval of the plan is the same to that of confirmation of Plan under Court Supervised Rehabilitation Notice of Out-of-Court rehabilitation plan is required Published once a week for at least 3 consecutive weeks in a newspaper of general circulation in the Philippines. Liquidation of the debtor’s assets and payment of his debts by the Liquidator (Sec 119) ϖιι. It shall take effect after 15 days from the date of the last publication of the notice thereof Amendments or modification to the plan Amendments or modification must be made in accordance with the terms of the agreement and with due notice on all creditors LIQUIDATION OF INSOLVENT JURIDICAL DEBTORS ΙΙ. An inventory of all its assets 3. Must show that there’s no genuine issue of fact or law on the claim/s of the petitioner/s. of the debtor Ι. Publication of the petition or motion in a newspaper of general circulation once a week for 2 consecutive weeks [Sec 112 (d)] ιϖ. Voluntary Liquidation: α.• • • It must be approved by creditors representing at least 67% of the SECURED obligations of the debtor It must be approved by creditors representing at least 75% of the UNSECURED obligations of the debtor It must be approved by creditors holding at least 85% of the TOTAL LIABILITIES.

Direct payments of any claims and conveyance of any property due the debtor to the liquidator [Sec 112 (e)] ιξ. Must show that no substantial likelihood that the debtor may be rehabilitated β. Suspension of Payments: postponement. Publication of the petition or motion in a newspaper of general circulation once a week for 2 consecutive weeks [Sec 112 (d)] ϖιι. INSOLVENCY OF INDIVIDUAL DEBTORS I. Procedure: ι. 902-A cannot be stretched to include petitions for insolvency. the debtor or the 3 or more creditors may initiate liquidation proceedings by filing a motion in court at any time during the pendency of the court-supervised or pre-negotiated rehabilitation proceedings. by court order. But he foresees the impossibility of meeting them when they respectively fall due iii. Issuance of the liquidation order ϖι. Appeal if proper suspension of payments. Petitions for declaration of insolvency of private corporations are within the original and exclusive jurisdiction of regular courts. Consideration of comments filed by the court ϖ. Directing publication of petition or motion in a newspaper of general circulation once a week for 2 consecutive weeks 2. despite the fact that he has sufficient assets to cover his liabilities (De Leon) b. Landbank of the Philippines [201 SCRA 190 (1991)]: SC held that the SEC has jurisdiction only with regard to petitions of juridical debtors to be declared in the state of . A debtor may file a verified petition for suspension of payments if: i. Procedure: i. Purpose: to suspend or delay the payment of debts. Hearing for election and appointment of the liquidator [Sec 112 (j)] ϖιιι. Contents: 1. PD. SEC may entertain such petitions only as an incident of and in continuation of its already acquired jurisdiction over petitions to be declared in the state of suspension payments. Discharge of Liquidator (Sec 122) ξι. Ching vs. Filing of the petition of 3 or more creditors (Sec 91) ιι. He has to state his residence 6 months before filing of his petition (and file in the court where he resided 6 months prior to the filing) 2. Filing of petition by debtor (Sec 94) ii. Liquidation of the debtor’s assets and payment his debts by the Liquidator (Sec 119) ξ. debtor’s inability to meet his obligations when they respectively fall due. Filing of comments ιϖ.meet its liabilities as they fall due 2. Inventory of assets 4. of the payment of debts of one who possesses sufficient property to cover all his debts but foresees the impossibility of meeting them when they respectively fall due (Sec 94) a. Proposed agreement with creditors c. Issuance of order: 1. Directing the debtor and all creditors to file their comment on the petition ιιι. Individual debtor possesses sufficient property to cover all his debts ii. Issuance by the court of an order calling a meeting of creditor (Sec 95) Note: Under both voluntary and involuntary liquidation. Schedule of debts/liabilities 3.

That the claims represented by said majority vote amount to at least 3/5 of the total liabilities of the debtor [Sec 97 (d)] ii. 2) v. Meeting of the creditors for the consideration of the debtor’s proposition (Sec 97) v. 2/3 of the creditors voting unite on the same proposition. Suspension Order: Upon motion by the debtor. par. or 2. Defects in the call for the meeting. Effect of disapproval of petition: Court shall declare the proceedings terminated and the creditors shall be at liberty to exercise the rights which may correspond to them (Sec 100. in the holding thereof and in the deliberations. 2. e. except those used in the ordinary operation of commerce or of industry in which he is engaged [Sec 95 (e)]. and 2. incurred 60 days before petition is filed. Issuance of order by the court directing that the agreement be carried out in case the decision is declared valid or when no objection to said decision has been presented (Sec 101) d. which prejudice the right of the creditors. the court will approve on the agreement of the creditors/debtors as regards the payment iii. Secured debtors. Approval of the creditors of the debtor’s proposition vi. if any. the number of creditors representing at least 3/5 of the liabilities of the individual debtor do not attend.iii. Those creditors with claims for personal labor. . to the decision which must be made within 10 days from the date of the last creditors’ meeting (Sec 100) vii. If the majority agrees. except: 1. the court may issue an order suspending any pending execution against the individual debtor provided that properties held as security by secured creditors shall not be subject of such suspension order (Sec 96. maintenance. No disposition in any manner of his property may be made by the individual debtor. expenses of last illness and funeral of wife or children of the debtor. Causes for which objection may be made to the decision of the meeting: 1. ii. 1). Effect of filing a petition for suspension of payments: i. Creditor’s meeting (Only creditor included in the schedules filed by the debtor shall be cited to appear and take part in the meeting) i. To form a majority (Rule of Double Majority): 1. iii. Publication of said order and service of summons iv. par. No payments may be made by the individual debtor outside of the necessary and legitimate expenses of his business or industry [Sec 95 (f)]. But petition is deemed rejected when: 1. No creditor shall sue or institute proceedings to collect his claim from the debtor from the time of filing of petition as long as proceedings remain pending. Objections. if the double majority rule are not in favor of the proposed agreement (Sec 99) iv. iv.

Once the petition is filed. Procedure: i. Schedule of debts and liabilities 2. to perform the agreement decided upon the meeting of the creditors. Voluntary Liquidation a. Publication of the petition or motion in a newspaper of general circulation once a week for 2 consecutive weeks [Sec 112 (d)] iv. i. Effects of errors in description or omission of property in inventory: i. Direct payments of any claims and conveyance of any property due the debtor to the liquidator [Sec 112 (e)] vi. The erroneous or ambiguous description of the insolvent’s property in inventory does not affect the title of purchasers in the insolvency proceedings. If the court finds the petition sufficient in form and substance. Proposed Agreement with creditors b. it shall issue the Liquidation Order (Sec 104) iii. Discharge of Liquidator (Sec 122) viii. Fraudulent connivance between one or more creditors and the individual debtor ot vote in favor of the proposed agreement. 3. Liquidation of the debtor’s assets and payment of his debts by the Liquidator (Sec 119) vii. Fraudulent connivance of claims for the purpose of obtaining a majority. wholly or in part. pending the final adjudication. A verified petition may be filed by an insolvent debtor (owing debts exceeding the amount of P500. some creditors may not receive any amount at all which he has resided 6 months prior to filing the petition. all rights which the creditors had against the debtor before the agreement shall revest in them (Sec 102). Legal title of the property of the insolvent passes to the liquidator and is administered .000) in the court of the province or city in d. it ipso facto takes away and deprives the debtor of the right to do or commit any act of preference as to creditors. Purpose Property Amount of Indebtedness LIQUIDATION OF INDIVIDUAL INSOLVENT DEBTORS I. Distinctions between Suspension of Payments and Insolvency: SUSPENSION OF PAYMENTS Suspend or delay the payment of debts Debtor has sufficient property Amount of indebtedness is not affected INSOVENCY Discharge the debtor from the payment of debts Debtor does not have sufficient property Creditors receive less than their credits.2. Appeal if proper c. Contents: 1. and in case there are preferences. Inventory of Assets 3. Filing of the petition by the debtor praying for the declaration of insolvency (Sec 103) ii. Effect of failure or individual debtor to perform agreement: If the debtor fails. vi. Effect of filing of petition: The filing of the petition shall be an act of insolvency (Sec 103). Hearing for election and appointment of the liquidator [Sec 112 (j)] v.

II. To the extent of the unsecured portion. Petitioning creditor must post a bond. Petition must allege at least one act of insolvency. he remains absent. b. vi. ii. That he has confessed or offered to allow judgment in favor of any creditor or claimant for the purpose of hindering or delaying the liquidation or of defrauding any creditors or claimant. iv. fraudulently conveyed by the debtor [Sec 119 (f)]. ii. v. i. That he has suffered or procured his property to be taken on legal process with intent to give a preference to one or more of his creditors and thereby hinder or delay the liquidation or defraud any one of his the insolvency proceedings regardless of errors in the inventory. If the creditor wants to participate as an ordinary creditor. That he has suffered his property to remain under attachment or legal process for three (3) days for the purpose of hindering or delaying the liquidation or of defrauding his creditors. Any debtor who commits an act of insolvency may adjudged insolvent. and release him from further liability. vii. 1. That being absent from the Republic of the Philippines. gift. Involuntary Liquidation a. That he conceals. viii. or is removing. Even property exempt from execution must be included in order to preclude possible fraudulent omission under the pretext that such property is exempt. If the debt exceeds the secured property: i. with a claim of or with claims aggregating at least P500. any of his property to avoid its being attached or taken on legal process. Acts of Insolvency: i.000. iii. ix. with intent to defraud his creditors. That such person is about to depart or has departed from the Republic of the Philippines. c. it is the duty of the liquidator to recover any property or its value. sale. The date of adjudication of insolvency retroacts to the date of the filing of the petition for insolvency. ii. iii. If the insolvent omits property from his inventory. ii. Purpose: It is not a mere personal action against the insolvent for the collection of debts. with intent to defraud his creditors. may file a verified petition in the court of the province or city in which the individual debtor resides. the creditor can join the proceedings. property. That he has willfully suffered judgment to be taken against him by default for the purpose of hindering or delaying the liquidation or of defrauding his creditors. but its purpose is to impound all of his non-exempt property. e. That he conceals himself to avoid the service of legal process for the purpose of hindering or delaying the liquidation or of defrauding his creditors. conveyance or transfer of his estate. rights or credits with intent to hinder or delay the liquidation or defraud his creditors. Any creditor or group of creditors. he has to let go of the mortgage. . to distribute it equitably among his creditors. That he has made any assignment.

Liquidation Process if the individual debtor is absent: i. Procedure: i. Issuance of the Liquidation Order vii. Departed from the Philippines.x. the creditors may ask the court to issue an order directing the sheriff to take possession of the debtor’s property in order for it to be sold at a public sale (sale under execution) iii. conveyance or transfer of his estate. he has generally defaulted in the payment of his current obligations for a period of thirty (30) days. Direct payments of any claims and conveyance of any property due the debtor to the liquidator [Sec 112 (e)] x. in contemplation of insolvency. gift. and xiii. The petitioners shall pay the debtor all costs. Appeal if proper e. Service of order to show cause iv. Publication of the petition or motion in a newspaper of general circulation once a week for 2 consecutive weeks [Sec 112 (d)] viii. Liquidation of the debtor’s assets and payment of his debts by the Liquidator (Sec 119) xi. to pay any moneys deposited with him or received by him in a fiduciary. he shall have been found to be without sufficient property subject to execution to satisfy the judgment. Issuance of Order to Show Cause (Sec 106): court will order the individual debtor to defend himself and state why he is not an insolvent. Nothing in the order shall impair the rights of a secured creditor to enforce his lien in accordance with its terms (secured creditor may foreclose notwithstanding an order forbidding the debtor to alienate/encumber any of his property) 2. grant. f. Court shall issue and Order directing the sheriff to take a sufficient amount of the debtor’s property not exempt from execution to satisfy the claim. withdrawn by them or if the debtor is not insolvent. If the debtor cannot be found. expenses. damages due to the proceedings if the case is dismissed. xi. ii. 1. Resides outside the Philippines. made any payment. Hearing for election and appointment of liquidator [Sec 112 (j)] ix. That being a merchant or tradesman. Absent Individual debtor: i. . property. iii. or iv. Present the bonds equivalent to twice the amount of their claims against the debtor iii. Hearing of the case (Sec 107) vi. Creditors must file the petition ii. Discharge of Liquidator (Sec 122) xii. Filing of the petition by any creditor or group of creditors and posting of required bond (Sec 105) ii. That he has. after demand. Petitioning creditors must: 1. Cannot be found with due diligence. he has failed. Submit the required affidavits for the Order of publication 2. d. Filing of answer or motion to dismiss by individual debtor v. sale. That for a period of thirty (30) days. xii. That an execution having been issued against him on final judgment for money. Hides to avoid service of the order to show cause (Sec 108) g. rights or credits.

the liquidator may convey the property to the creditor and waive the debtor’s right of Acts of insolvency Amounts of indebtedness Bond Order of Adjudication Length of residence (for RTC) When does the court order the adjudication? Only until after hearing the case PROVISIONS COMMON TO LIQUIDATION IN INSOLVENCY OF INDIVIDUAL AND JURIDICAL DEBTORS What is a liquidation order? The liquidation order shall: a) declare the debtor insolvent . If he chooses to maintain: i. Give such to the court as soon as completed. prove his claim in the liquidation proceedings and share in the distribution of assets b) Maintain his rights under the security a. Prepare a schedule of the names and residences of the creditors and the amounts due to them.000 Not Required May be granted ex parte Province or city in which debtor has resided for 6 months prior to petition Upon filing of the voluntary petition INVOLUNTAR Y Any creditor or group of creditors 3 or more creditors with qualifications set by laws Must have committed one or more Not less than P500. The sheriff shall then: 1. He may: a) Waive his right under the security. or in case of a juridical debtor. declares otherwise and the contracting party agree d) No separate action for the collection of an unsecured claim shall be allowed (direct claims to liquidator) e) No foreclosure proceeding shall be allowed for 180 days Rights of Secured Creditors: The Liquidation Order shall NOT affect the right of a secured creditor to enforce his lien. Prepare a complete inventory of the property within 3 days from said taking and may be extended for good cause.iv. If the value of the property used as security is LESS than the claim it secures. 4.000 Required Granted only after hearing Immaterial b) Order the liquidation of the debtor. declare it as dissolved c) Order the sheriff to take the property of the debtor d) Order the publication of the petition in a newspaper of general circulation e) Direct payments of any claims and conveyance of any property due to the debtor to the liquidator f) Prohibit the transfer of property and payment by the debtor g) Direct all creditors to file their claims with the liquidator within the period set by the rules h) Authorize the payment of admin expenses ad they become due Effects of the Liquidation Order a) The juridical debtor is dissolved and its juridical existence terminated b) Legal title of all the assets of the debtor shall be vested in the liquidator/court c) All contracts of the debtor shall be deemed terminated unless the liquidator. Distinction between Voluntary and Involuntary Liquidation: VOLUNTARY Number of creditors Filed by: One Insolvent debtor Must not be guilty Must exceed P500. If it is MORE. w/in 90 days from the date of his assumption of office. he can recover deficiency) ii. Take said property 2. the liquidator may convey the property to the secured creditor and the creditor will be admitted in the liquidation proceedings as a creditor for the balance (basically. 3.

e. with the end of liquidating them and discharging to the extent possible all the claims against the debtor. When can the court appoint the liquidator? a) on the date set for the election of the liquidator. expressly or impliedly. to sell. by a party who may be prejudiced thereby. The liquidator may sell the property and satisfy the secured creditor’s entire claim from the proceeds c. but not limited to: a. and so satisfy any judgment which may be an encumbrance on any property sold by him. belonging or due to the debtor. fail or refuse to elect a liquidator. to redeem all mortgages and pledges. or d) a vacancy occurs for any reason whatsoever. Preliminary Registry of Secured and Unsecured Creditors: The liquidator shall prepare a preliminary registry of claims within twenty (20) days from his assumption into office. The secured creditor may foreclose/enforce his lien Functions of Liquidator The liquidator shall be deemed an officer of the court with the principal duly of preserving and maximizing the value and recovering the assets of the debtor. to take possession of all the property of the debtor except property exempt by law from execution. to pay creditors and stockholders. with the approval of the court. b) Of good moral character and with acknowledged integrity. to settle all accounts between the debtor and his creditors. That such conflict of interest may be waived. The nominee receiving the highest number of votes cast in terms of amount of claims and who is qualified shall be appointed as the liquidator. any property of the debtor which has come into his possession or control. reasonable and necessary NOTE: In sum. . Unsecured Creditors defined They are Secured Creditors who have: a) Waived their security or lien. In any of the cases provided herein. What are the qualifications of the Liquidator? a) A citizen of the Philippines or a resident of the Philippines in the six (6) months immediately preceding his nomination. and d) Has no conflict of interest: Provided. as well as the relevant training and/or experience that may be necessary to enable him to properly discharge the duties and obligations of a rehabilitation receiver. b. and is admitted for the balance of his claim. subject to the approval of the court.redemption upon receiving the excess from the creditor b. c. When can a secured creditor be allowed to vote for a liquidator? a) he waives his security or lien. g. to recover any property or its value. b) the creditors who attend. f. the creditors do not attend. impartiality and independence. c) after being elected. fraudulently conveyed by the debtor. c) Has the requisite knowledge of insolvency and other relevant commercial laws. rules and procedures. the court may instead set another hearing of the election of the liquidator. to sue and recover all the assets . The powers. the liquidator shall have the right and duty to take all reasonable steps to manage and dispose of the debtor's assets with a view towards maximizing the proceedings therefrom. to recommend to the court the creation of a creditors' committee which will assist him in the discharge of the functions and which shall have powers as the court deems just. d. or b) has the value of the property subject of his security or lien fixed by agreement with the liquidator. shall be considered as unsecured creditors. the liquidator fails to qualify. duties and responsibilities of the liquidator shall include. and to terminate the debtor's legal existence. debts and claims. or b) Who has fixed the value of the property subject of their security or lien by agreement with the liquidator and is admitted as a creditor for the balance. NOTE: The creditors entitled to vote will elect the liquidator in open court.

individual debtors. as a minimum enumerate: a) All the assets of the debtor. Who may submit a Challenge to Claim or Claims: a) Partners of the partnership-debtor. The Liquidation Plan shall. Right of Set-off Debtor and Creditor are MUTUALLY Debtor and Creditor of each other: One Debt shall be SET OFF against the other. if any shall be allowed in the liquidation proceedings. b) Individual debtors owner/s of the sole proprietorship-debtor. and b) A schedule of liquidation of the assets and payment of the claims. Opposition or Challenge to Claims A Challenge to Claim or Claims may be submitted to the court by serving a certified copy on the liquidator and the creditor holding the challenged claim. and d) Shareholders or members of the corporation-debtor. owner/s of the sole proprietorshipdebtor. The Liquidation Plan. creditors. The Liquidator shall submit a Liquidation Plan to the court within three (3) months from his assumption into office. within thirty (30) days from the expiration of the period for filing of applications for recognition of claims.The liquidator shall make the registry available for public inspection and provide publication notice (on where and when they may inspect it) to: a) Creditors. Grounds for rescission or nullification: a) It was executed with intent to defraud a creditor or creditors. and c) Other interested parties Transactions that may be rescinded or nullified The Following Transactions may be Rescinded or Nullified: a) Any transaction occurring prior to the issuance of the Liquidation Order. . NOTE: Duty of the Court to exempt and set apart for the use and benefit of the said insolvent such real and personal property as is by law exempt from execution. The Balance. c) Partners of the partnership debtor. or b) A transaction entered into by the debtor or involving its assets. in case of the conversion of the rehabilitation proceedings prior to the commencement date. b) Shareholders or members of the corporation-debtor. or b) It constitutes undue preference of creditors.

verified petition Involuntar y Proceeding s .LIQUIDATION REHABILITATION COURT SUPERVISED PRENEGOTIATED INFORMAL RESTRUCTU RING AGREEMENT INSOLVENT JURIDICAL DEBTORS INDIVIDUAL INSOLVENT DEBTORS Voluntar y Liquidati on Verified petition court of the city/provin ce where debtor has resided 6 months prior to filing *filing of such petition=a ct of insolvency to apply for discharge of debts and liabilities Involunta ry Liquidati on Verified petition in the court of the province or city in which the individual debtor resides Suspensi on of Payments Verified petition before city/provin ce where debtor has resided 6 months prior to filing Voluntary Proceeding s How Made .verified petition Voluntary Involunta ry 1) verified petition for liquidation in court 2) verified motion to convert pending rehabilitati on proceedin g into a liquidation proceedin g To establish the insolvency of debtor for purposes of liquidation -verified petition Done without court intervention provided that it meets the minimum requirement of FRIA 1) verified petition for liquidation in court 2) verified motion to convert pending rehabilitation proceeding into a liquidation proceeding Purpose Establish insolvency and the viability of rehabilitatio n in court Establish insolvency and the viability of rehabilitatio n in court the approval of the Rehabilitation plan in court To negotiate terms of the rehabilitation plan without court intervention To establish the insolvency of debtor for purposes of liquidation to impound all of debtor’s nonexempt property. to distribute it equitably among his creditors and to release to be declared in a state of suspension of payment .

SECURED and UNSECURED.him from further liability Parties Filed by Insolvent Debtor -sole proprietorsh ip: owner partnership: partners corporation: majority vote of BoD or trustees + 2/3 vote of SH representing outstanding capital stock or 2/3 vote of members Filed by Creditor or group of creditors with aggregate claim of at least 1M or at least 24% of subscribed capital stock or partner’s contribution s. and that the due and demandab le payments Debtor doesn’t have sufficient properties to cover his liabilities and the debts which he owes exceeds 500k Acts of Insolvency which tends to delay the liquidation or to defraud any creditors like: 1)debtor has departed Debtor has sufficient property to cover all his debts BUT foresees the impossibili ty of meeting debts when they become . whichever is higher Individual debtor Creditor or group of creditors with a claim or aggregate claim of at least 500K Individual debtor Grounds Debtor’s insolvency or inability to pay its obligations as they become due 1) no genuine issue of fact or law on the claim/s of the petitioner/s and that the due and demandable payments have not been made for at least Pre-negotiated Rehabilitation plan which must approved by creditors holding at least 2/3 of total liabilities including: a) secured creditors holding more than 50% of the total Rehabilitatio n is no longer possible 1) no genuine issue of fact or law on the claim/s of the petitioner/ s. whichever is higher Filed by Insolvent debtor by itself or jointly with other creditors Rehabilitation Plan must be approved by: 1) debtor 2) creditors representing at least 67% of the SECURED obligations of the debtor 3) creditors representing at least 75% of the UNSECURED obligations of the debtor 4) creditors holding at least 85% of the TOTAL LIABILITIES. of the debtor Consent of the parties involved to the informal re-structuring agreement Filed by the Insolvent debtor 3 or more creditors with the aggregate claims of at least 1M or at least 25% of the subscribed capital stock or partner’s contributio ns of the debtor.

from the due 60 days or that the debtor has generally failed to meet its liabilities as they fall due 2)creditor. other than the petitioner/s has initiated foreclosure proceedings against the debtor that will prevent the debtor from paying its debts as they become due or will render it insolvent 1) circumstanc es sufficient to support petition 2)specific relief sought 3)Rehabilita tion Plan 4) names of at least 3 nominees to the position of receiver secured claims of the debtor and b) unsecured creditors holding more than 50% of the total unsecured claims of the debtor thereon have not been made for at least 180 days or the debtor has failed generally to meet its liabilities as they fall due 2) no substantia l likelihood that the debtor may be rehabilitat ed Philippines . with intent to defraud his creditors. 2) he conceals himself to avoid the service of legal process for the purpose of hindering or delaying the liquidation Minimu m require ments of the petition 1) schedule of debtor’s liabilities with list of creditors 2)an inventory of all its assets 3)Rehabilita tion Plan 4) names of at least 3 nominees to the position of receiver 1) schedule of debtor’s liabilities with list of creditors 2)an inventory of all its assets 3) prenegotiated Rehabilitation plan and names of at least 3 nominees to the position of receiver N/A 1) schedule of debtor’s liabilities with list of creditors 2)an inventory of all its assets 3) names of at least 3 nominees to the position of liquidator none 1)schedul e of debts and liabilities 2) inventory of assets Posting of bond in the amount determine d by the court 1)schedule of debts and liabilities 2)inventor y of assets 3)propose d agreement with creditors .

with first publication made within 7 days from issuance of Order Notice of Rehabilitation plan: published once a week for 3 consecutive weeks in a newspaper of general circulation Petition or motion: Once a week for 2 consecutive weeks in a newspaper of general circulation Petition or motion: Once a week for 2 consecutiv e weeks in a newspape r of general circulation none none Court Order: 1) calling of creditor’s meeting 2)publicati on of said order and service of such order to all creditors 3)suspend any pending execution against debtor upon motion Order: Once a week for 2 consecutiv e weeks in a newspaper of general circulation.service of petition to each creditor who is not a petitioner holding at least 10% of total liabilities of debtor - Insolvent debtor or creditor may seek court assistance for the execution or implementatio n of the agreed Rehabilitation Plan Liquidation Order Court Order: 1)publicati on 2)directing debtors and creditors to file comment Liquidatio n order Liquidatio n order 1) show cause order 2) liquidation order Publicati on none Once a week for 2 consecutive weeks in a newspaper of general circulation. with first publication made within 7 days from . if provided in the plan .Court Action (if sufficien t in form and substanc e) COMMENCEMENT ORDER -shall appoint a rehabilitation receiver -summarize requirements and deadlines for creditors to establish their claim -include a STAY or SUSPENSION ORDER 4) summary of disputed claims against debtor and report on the provisioning of funds Court order -shall appoint a rehabilitation receiver.

declares otherwise and the contracting party agree 4)No separate action for the collection of an unsecured claim shall be allowed (direct claims to liquidator) 5) No foreclosure proceeding shall be allowed for 180 days SUSPENSI ON ORDER: No creditor shall sue or institute proceedin gs to collect his claim from the debtor from the time of filing of the petition and for so long as the proceedin gs remain pending Except: a)those creditors having claims for personal .issuance of Order Hearing 1) for the determination of the creditors 2) determine any objections to the appointment of receiver 3) direct creditors to comment on the Rehabilitation Plan 4) direct the rehabilitation receiver to evaluate the financial condition of the debtor and submit report within 40 days -there shall be a waiver of taxes and fees due to the National Government and to LGUs from the issuance of the commencement order until approval of the Rehabilitation plan or the dismissal of petition. Debtor and creditors shall be interpreted as continuing to apply to the extent that they don’t conflict with the For the determination of the objections to the Rehabilitation plan N/A For the election and appointment of liquidator For the election and appointme nt of liquidator For the election and appointme nt of liquidator For the election and appointme nt of liquidator Effect Approval of the Rehabilitation plan shall have the legal effect as Confirmation of Plan *court has 120 days from date of filing to approve the Plan. CRAM DOWN EFFECT: the Rehabilitation Plan shall have the same legal effect as Confirmation of a Plan LIQUIDATION ORDER: 1)The juridical debtor is dissolved and its juridical existence terminated 2)Legal title of all the assets of the debtor shall be vested in the liquidator/court 3)All contracts of the debtor shall be deemed terminated unless the liquidator. Failing to do so. w/in 90 days from the date of his assumption of office. whichever is earlier CONFIRMATION OF REHABILITATION PLAN 1) Rehabilitation plan and its provisions shall be binding upon the debtor and all creditors whether or not such persons have participated in the proceeding 2) debtor shall comply with the provisions 3)payments shall be made to creditors in accordance with the plan 4)contracts bet. the Rehab Plan shall be deemed approved.

maintenan ce.plan 5) any compromises/reschedule of timing of payments by debtor shall be binding on the creditor regardless whether the plan is successfully implemented 6) claims arising after the approval of the plan that are otherwise not treated by the Plan are NOT subject to Suspension Order labor. expense of last illness of debtor 60 days prior filing b) secured creditors .

COMMODATUM Object Nonconsumable Except: consumable if used for exhibition purposes only Temporary use of the thing Take care of the thing with due diligence Return the thing upon expiration of period or purpose Retained by bailor Anytime. Sign the acknowledg ement Compensatio n Gratuitous or onerous Gratuitous or onerous onerous Onerous . Offer to pay warehouse man’s lien c.e. Surrender of warehouse receipt b. if no period or purpose has been agreed upon or if by mere tolerance only (precarium) If there is an urgent necessity Acts of ingratitude by the bailee Essentially gratuitous MUTUUM Fungible/ consumable (i. money) DEPOSIT Movable/person al property BARTER Nonconsumable WAREHOUSE RECEIPTS ACT Goods (chattels. merchandise) Purpose Consumption Safekeeping Use or consumption Exchange (sale) Exchange a thing of the same kind. quality and quantity Store for profit Obligation Return a thing of the same kind and quality Take care of the thing Do not use the thing deposited unless authorized or is required for its preservation Retained by the depositor Anytime Take care of the goods Do not commingle with other goods Issue a receipt for the goods Status of Ownership Ability to demand return Passes to bailee Only after the expiration of the period Passes to the other party (mutual exchange) Cannot demand return because contract is already extinguished Rescission only if grounds exist Retained by the depositor Anytime up to: a.

warehouse receipts 1. Mortgagor/Pledgor absolute owner 3. Mortgagor/Pledgor has free disposal/legal authority *RM. Principle of pactum comissorium applies Except: In pledge. and then to the principal Must be registered in the RD Delivery ? Effect of default Generally not required Delivery essential only so that the antichretic creditor can enjoy the fruits Ownership does not pass to the creditor upon default. after two sales and the thing remains unsold. CM and Pledge is VALID as between the parties even if registration requirements are not complied with BUT is not binding to 3rd persons Movables Immovables To bind 3rd persons Must be registered in the RD Must be registered in the CM Registry *If vehicle. bonds. shares of prejudiced stock. bills innocent third party of lading. Express agreement between debtorcreditor that the fruits will be applied to payment of interest if any. Must be in writing 2. must also be registered in the LTO Generally not required Must be in a public instrument with a description of thing pledged and the date Delivery essential to constitute pledge 1. the pledgee can appropriate (in this case.Object Immovables Real Rights over immovables (leasehold rights) Requisit es Movables Incorporeal rights Except: can CM evidenced by buildings by negotiable agreement and no instruments. he has to waive his claim) Foreclos ure Deficien cy Extrajudicial/Judicial Creditor can sue for deficiency in either EJ/J Sale through a notary public No express right granted by law. BUT allowed by jurisprudence Except: No deficiency in sale on movables in installment (Recto Law) Extrajudicial Private sale No deficiency Extrajudicial/Judicial Creditor can sue for deficiency in either EJ/J . Constituted to secure fulfillment of principal obligation 2.

LAND TITLES AND DEEDS ========================= ======== TOPIC UNDER THE SYLLABUS: A.VIII. altered. or diminished Exception – Direct proceeding permitted by law. PURPOSES: (QUIP-CC) 1. Saleeby [31 Phil 590. mortgaged. Capitol Subdivision v. the court may. and (2) facilitate transactions relative to real property by giving the public the right to rely upon the face of the Torrens certificate of title and to dispense with the need of inquiring further. To avoid conflicts of title in and to real estate and to facilitate transactions. (See Section 44. Certificate of title B. through the Register of Deeds. Concept and background 2. Subsequent Registration 1. EXCEPT when the party concerned has actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry. or assigned. To relieve the land of unknown claims 3. direct the issuance of a certificate of title In a registration proceeding.R. Province of Negros. [7 SCRA 60 .A. Non-Registrable Properties E. modified. Original Registration 1.D. 141 3. upon the landowner’s application. 2007] TORRENS TITLE is a certificate of ownership issued under the Torrens System. Citizen Requirements D. or by which title to any real estate may be affected in law or equity LAND REGISTRATION is a judicial or administrative proceeding whereby a person’s claim over a particular land is determined and confirmed or recognized so that such land and the ownership thereof may be recorded in a public registry TORRENS SYSTEM is a system for registration of land under which. Heirs of Lirio. To give every registered owner complete peace of mind 5. by which he can maintain control and as a rule assert right to exclusive possession and enjoyment of property DEED is an instrument in writing by which any real estate or interest therein is created. Who may apply a. March 14. Concept 2. Cadastral registration F. and ordering its registration in one’s name constitutes. free from all liens and encumbrances except such as may be expressly noted there or otherwise reserved by law. 1529 b. Regalian Doctrine 1.1963) NATURE OF TORRENS SYSTEM • • Judicial in character and not merely administrative Proceeding is in rem (binding upon the whole world) CONCEPT AND BACKGROUND LAND TITLE is evidence of the owner’s right or extent of interest. Voluntary Dealings 2. To quiet title to the land and to stop forever any question as to the legality of said title 2. No. [G. CERTIFICATE OF TITLE . Dealings With Unregistered Land ========================= ======== 1. Involuntary Dealings G. Effects 3. usually for the protection of innocent third persons 2. To issue a certificate of title to the owner which shall be the best evidence of his ownership of the land 6. PD 1529) General Rule – A title once registered cannot be impugned. time immemorial possession C. changed. after appropriate proceedings. alienated. Remedies 4. res judicata against the whole world. Lagarda v. Under C. Under P. To guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized 4. 1915] The registration of property is to: (1) avoid possible conflicts of title. enlarged. Registration process and requirements 2. Ronald Ting v. the judgment of the court confirming the title. Concept of native title. Torrens System 1. naming and declaring the owner of the real property described therein. when final. 168913.

Accretion only against the registered owner. Cabangis 53 Phil. Pascual v.the title issued by the ROD in favor of the transferee to whom the ownership of the already registered land had been transferred by virtue of a sale or other modes of conveyance. TRANSFER CERTIFICATE OF TITLE . as . Reclamation 5. Private grant 2. 1529. 112 (1929)) Filling of submerged land by deliberate act and reclaiming title thereto • Must be initially owned by the government • May be subsequently transferred to private owners 1. the certificate of title certainly deserves more probative value. Exclusive. Involuntary Alienation 7. principally as to the identity of the land owner except so far as provided in the Land Registration Act. It is the result of the current of the waters (river/sea). • The current causing the alluvial deposit must be from a river. v. MODES OF ACQUIRING TITLE 1. a Torrens Certificate is evidence of indefeasible title of property in favor of the person in whose name appears therein—such holder is entitled to the possession of the property until his title is nullified. Public Grant A conveyance of public land by government to a private individual 2. Acquisitive Requisites: ONCE Prescription Open. (Government of the Phils. the deposit will pertain to the state.PROBATIVE VALUE OF THE TORRENS TITLE Torrens Title may be received in evidence in all Philippine courts . Property Registration Decree (P. 2007] 3. 2. Emancipation Patent/Grant (Certificate of Land Ownership Award) LAWS IMPLEMENTING LAND REGISTRATION 1. but also against his hereditary successors Requisites: G-C-A 1. The land where accretion takes place is adjacent to the banks of rivers or the sea coast Accretion to registered lands needs new registration There must be No human intervention. • As opposed to an unregistered deed of sale. and Notorious possession If in good faith & with just title: 10 yrs. Coronel. Descent or Devise 8. 2. uninterrupted possession is required If in bad faith & without just title: 30 yrs. continuous possession is required Only available if the land possessed is public. and 3. Voluntary execution of deed of conveyance • Contractual relationship between the parties • Consensual • No consent from the owner of land • Forcible acquisition by the State Hereditary succession to the estate of deceased owner To ameliorate the sad plight of tenant-farmers (to answer their problems) Such grant is not transferable except by hereditary succession TYPES OF TORRENS CERTIFICATES OF TITLE 1.the first title issued in the name of the registered owner by the Register of Deeds (ROD) covering a parcel of land which had been registered by virtue of a judicial or administrative proceeding. The deposit of soil or sediment be gradual and imperceptible. and shall be conclusive as to all matters contained therein. ORIGINAL CERTIFICATE OF TITLE . [527 SCRA 474. alienable and disposable A property registered under the Torrens System is not subject to prescription Prescription is unavailing not 4.D. Voluntary Transfer 6. Indeed. Continuous. If it is from the sea.

Extend assistance to courts in ordinary and cadastral land registration proceedings 3. which is the source of any asserted right to . L-22486. CONCEPT Under the Regalian doctrine which is embodied in Section 2. Comprehensive Agrarian Reform Law of 1988 (R.R.A. [28 SCRA 12. Immediately register an instrument presented for registration dealing with real or personal property which complies with the requisites for registration 2. 1988] It is enough that in the ROD’s opinion an instrument is registrable for him to register it. stating the ground or reason therefore. Gustilo.1969] The ROD may also refuse to register a private document since Section 112 of PD 152 provided that deeds of conveyances affecting lands should be verified and acknowledged before a notary public or other public officer authorized by law to take acknowledgement. Pr epare and keep an index system which contains the names of all registered owners and lands registered The function of the ROD with reference to registration of deeds. Register Of Deeds (ROD) It is the public repository of records and instruments affecting registered or unregistered lands and chattel mortgages in the province or city wherein such office is situated Composition: a. Public Land Act (Commonwealth Act 141. [G. Almirol v. Registration may be suspended Balbin v. and advising him of his right to appeal by consulta in accordance with Sec. as amended) 5. provided the applicant complies with all the requisites. 6657. 117 of PD 1529 4. [13 SCRA 494. under the executive supervision of the DOJ Composition: a. Land Registration Authority (LRA) Agency charged with the efficient execution of the laws relative to the registration of lands. and not to the ROD. March 20. REGALIAN DOCTRINE 1. encumbrances. If the instrument is not registerable. Be the central repository of records relative to original registration of lands titled under the Torrens system. Where the voluntary instrument bears on its face an infirmity 3. Baranda v. Gallardo v. IAC. Shall see to it that said instrument bears the proper documentary and science stamps and that the same are properly cancelled 3. and other agencies in the implementation of the land reform program of the government 2. 1965] The determination of whether a document is valid or not is a function that belongs to a court of competent jurisdiction. the Land Bank. [165 SCRA 757. Deputy (as assistant) The functions of the ROD: (PIDI) 1. as amended) ADMINISTRATION OF THE TORRENS SYSTEM 1. Where there are more than 1 copy of the owner’s duplicate certificate of title and not all such copies are presented to the ROD 2. all lands of the public domain belong to the State. of Agrarian Reform. Villasenor. he shall deny the registration thereof and inform the presentor of such denial in writing. 1968] Instances when the ROD may validly deny registration of a voluntary instrument: 1. 2 Deputy Administrators (as assistants) The Functions of the LRA are: (SAC) 2. No. Register of Deeds b. Ledesma v. Cadastral Act (Act 2259.amended) 2. Emancipation Decree (P. as amended) 4. and the like is ministerial in nature. B. instruments. 1987] NOTE: When the ROD is in doubt as to the proper action to take on an instrument or deed presented to him for registration. [155 SCRA 248. he should submit the question to the Administrator of the LRA en consulta (Section 117. as amended) 3. Extend speedy and effective assistance to the Dept. ROD. Where the validity of the instrument sought to be registered is in issue in a pending court suit. Administrator b. 27.D. Article XII of the 1987 Constitution. The act being an administrative act does not contemplate notice to and hearing of interested parties. ROD of Agusan. notice of which must be given to parties 4. PD 1529). including the subdivision and consolidation plans of titled lands 2.

Continuous or intermittent waters rising on such lands. homestead or grant. torrents. NON-REGISTRABLE PROPERTIES Article 420 1. and are intended for some public service or for the development of the national wealth. roadsteads. 4. through the Office of the President. 9. forest reserves lands. rivers. an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order. 1987] . incontrovertible evidence must be established that the land subject of the application is alienable or disposable. 10. With the exception of agricultural lands. Private corporations may lease not more than 1. Unless public land is shown to have been reclassified or alienated to a private person by the State. and 12. To prove that the land subject of an application for registration is alienable. Those which belong to the State. Found in private lands: 8. EFFECTS All lands not appearing to be clearly within private ownership are presumed to belong to the State. CA. minerals. forests. Waters in swamps and marshes Forest or timberland. without being for public use. flora and fauna. Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves. Water Code (PD 1067 ) 1. all forces of potential energy. Rivers and their natural beds. The applicant may also secure a certification from the Government that the lands applied for are alienable and disposable. CITIZEN REQUIREMENTS 1. and a legislative act or a statute. Arts. petroleum and other mineral oils. public forest. investigation reports of Bureau of Lands investigators.ownership of land. Subterranean or ground waters. NATIVE TITLE . Those intended for public NCC use. havenever been public lands and are thus indisputably presumed to have been held that way sincebefore the Spanish Conques C. Seawater. To overcome this presumption. all other natural resources shall not be alienated 2. Natural lakes and lagoons. mineral lands 3. [153 SCRA 351. and water from agriculture runoff. Lakes and lagoons naturally occuring on such lands. 3. 7. forest or mineral but the Executive Branch of the government. shores. 1973. an administrative action. INDIVIDUALS AND CORPORATIONS Alienable lands of the public domain: Only Filipino citizens may acquire not more than 12 hectares by purchase. banks. seepage and drainage.refers to pre-conquest rights to lands and domains which. All other categories of surface waters such as water flowing over lands. or lease not more than 500 hectares. it remains part of the inalienable public domain. Bureau of Forestry v. NON-REGISTRABLE PROPERTIES It is not the court which determines the classification of lands of the public domain into agricultural. fisheries. 2. 6. 5. Subterranean or ground water.000 hectares for 25 years renewable for another 25 years Regalian Doctrine under the 1935. Rain water and falling on such lands. such as roads. and others of similar character 2. and 1987 Constitution D. ll lands of the public domain. Atmospheric water. water from rainfall whether natural or artificial. 11. have been held under a claim of private ownership by ICCs/IPs. ports and bridges constructed by the State. CONCEPT OF NATIVE TIME IMMEMORIAL TITLE. wildlife. as far back as memory reaches. 5 & 6. waters. and natural resources belong to the state. or timber. coal.

Administrative/Involuntary/Cadastral – compulsory registration initiated by the government Procedure In Ordinary Land Registration (SurF-D-TraPS-AHJ-DECT) 1. Sept. Judicial/Voluntary/Ordinary – by filing with the proper court. of Agrarian Reform.Within 5 days.D. SURvey of land by the Bureau of Lands or a duly licensed private surveyor .Survey plan must be duly approved by the Director of Lands. Director of Lands. Original Registration 2. Persons named in the notice ii. The notices required are mandatory. Indorsed to the MTC if there is no controversy over the land or if its value is less than 100. [393 SCRA 361. 2. Sec. [523 SCRA 309. of Public Highways. 22. and Mayor. No. If land is situated between boundaries of 2 provinces. Republic v. [G. 1529 is a proceeding brought before the RTC (as a land registration court) to determine title or ownership of land on the basis of an application for registration or answer by a claimant in a cadastral registration. Republic v. Sec. Tax declarations or realty tax payment of property are not conclusive evidence of ownership. • When boundaries are defined: a separate plan for each portion must be made by a surveyor and a separate application for each lot must be filed with the appropriate RTC 3.000 d. 2006] claim of acquisition of ownership. application by the private individual himself 2. Such an act strengthens one’s bona fide . Director of Fisheries. Subsequent Registration ORIGINAL REGISTRATION UNDER P. Sta.The State has an imprescriptible right to cause the reversion of a piece of property belonging to the public domain if title has been acquired through fraudulent means. Filing of application for registration by the applicant a. 2007] b. To confer jurisdiction over the land applied for upon the court 2. appeal is directed to the CA e. application must be filed: • When boundaries are not defined: with the RTC of the place where it is declared for taxation purposes. Republic v. With all muniments of titles and copies thereof with survey plan approved by Bureau of Lands MUNIMENTS OF TITLE are instruments or written evidence which applicant hold or possess to enable him to substantiate and prove title to his estate. 2002] A land classified as a military reservation zone.R. Publication of notice of initial hearing i. Transmittal of the application and the date of the initial hearing. Once in a newspaper of general circulation Purpose of publication: 1. with all the documents or other evidence attached thereto. Mailing • Within 7 days after publication of said notice in the OG. and invite them to take part in the case and assert and prove their rights over the subject land b. Provincial Governor. if the applicant requests to have the line of a public way or road determined iii. Southside. set hearing 45-90 days from date of order 4. Always filed with the RTC of the place where land is situated c. and Director of Mines. To charge the whole world with knowledge of the application of the land involved. At most. Ana-Burgos. until reclassified or released from the said classification remains inalienable public land. they serve as a good indicium of possession in the concept of an owner. mailing of notice to: i. 1. Setting of the Date of initial hearing of application by the RTC . Publication of notice of the filing of the application and the date and place of the hearing in the Official Gazette. Once in the Official Gazette (this confers jurisdiction upon the court) ii. if the E. REGISTRATION REQUIREMENTS PROCESS AND Kinds Of Judicial Registration: 1. Heirs of Alejaga. ORIGINAL REGISTRATION Types Of Registration: 1. 156951. In cases of delegated jurisdiction to the MTC. Solicitor General. a. by the Clerk of Court to the LRA 5.

1987 Constitution). 1991] FORM OF THE APPLICATION (Sec. May only Lease (CANNOT own land of the public domain) for 25 years renewable b. 3. occupants and those known to have interests in the property 7. open. exclusive.024 hectares 2. Apply to both Filipinos & foreign corporations Determinative of this issue is the character of the parcels of land – whether they were still public or already private – when the registration proceedings were commenced. IAC and ACME. It is deemed conclusive as to the whole world. Transcription of the decree of registration in the registration book and issuance of the owner’s duplicate original certificate of title to the applicant by the ROD upon payment of the prescribed fees NOTE: Noncompliance with the requisites will make the Certificate of Title (CT) issued invalid and cancellable by the courts. If engaged in agriculture. Those who have acquired ownership of land in any manner provided for by law NOTE: All these persons must be natural-born Filipino citizens. Those who by themselves or through their predecessors-in-interest have been in Written . [202 SCRA 439. Private Lands a. PD 1529): (WSS) 1. Filing of answer to the application by any person whether named in the notice or not 8. CA. the constitutional prohibition against acquisitions by a private corporation would not apply. of Lands v.000 hectares in area for a period of 25 years and renewable for not more than 25 years (Sec. Service of notice by the sheriff upon contiguous owners. Article XII.iv. Entry of the decree of registration in the LRA 1 year after the date of entry. it becomes incontrovertible and amendments will not be allowed except clerical errors. Article XII. i. 7. land borders on a river. 2 .WHO MAY APPLY a. By way of exception juridical persons may apply for registration of leased agricultural and disposable lands not exceeding 1. continuous.000 hectares c. Those who acquired ownership of private lands or abandoned river beds by right of accession or accretion under the existing laws 4. . Restricted as to extent reasonably necessary to enable it to carry out purpose for which it was created c. or shore. Promulgation of judgment by the Court 10. Issuance of the decree declaring the decision final and instructing the LRA to issue a decree of confirmation and registration Decree– issued by LRA after finality of judgment. 15. Dir. notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12. Subject only to appeal 11. 1987 Constitution) b. Those who acquired ownership of private land by prescription under the provisions of existing laws 3. Decrees dismissing application ii. Hearing by the court 9. navigable stream. 1945 or earlier 2.Puts an end to litigation . and except when the land has been previously acquired by prescription by a natural person and subsequently transferred to a juridical entity. [146 SCRA 159 (1986] Limitation To Ownership Of Land By Corporation: 1. 3. Patrimonial Property of the State (Sec. 1987 Constitution) a.Purpose of Torrens system is protected 12. If they are already private lands. Decrees of confirmation and registration *0. a corporation may apply for judicial confirmation of title. Article XII. At least 60% Filipino (Sec. In this case. UNDER PD 1529 (OPAL) 1. Posting Posting in conspicuous place on subject land and on bulletin board of municipal building at least 14 days before initial hearing 6. contains technical description of land. Natividad v. Limited to 1. it is restricted to 1. Sending a copy of the decree of registration to the corresponding ROD 13. or on an arm of the sea where a river or harbor lies Other persons as the court may deem proper c.

a new publication of the amended application must be made. substitution. the plan approved by Director of Lands and the technical descriptions must be attached 4. 1986] If there are several parcels of land situated in different provinces/cities but belong to one owner. and whether the applicant desires to have the line of way or road determined (Sec. Caguioa. Joinder. [146 SCRA 459. Assessed value of the land and the buildings and other improvements based on the last assessment for taxation purposes 3. Si gned by the applicant or person duly authorized in his behalf . If the applicant is a non-resident of the Philippines. Mortgage or Encumbrance affecting the land or names of other persons who may have an interest therein. File motion with court or discontinuance of any of the parties 4. as published. P. 1529 has eliminated the distinction between the general jurisdiction vested in the RTC and the limited jurisdiction conferred upon it by the former law when acting merely as land registration court. PD 1529) Where To File Application General Rule – RTC of the province or city where the land is situated File together with application all original muniments of titles or copies thereof and a survey plan of the land as approved by the Bureau of Lands P.If there is more than 1 applicant. or − contested lots. the value of which does not exceed 100. Manner of acquisition of land 2. Full names and addresses of All occupants of the land and those of the Adjoining owners. inclusion of publication and notice additional land are necessary 3. the change has simplified registration proceedings by conferring upon the RTCs the authority to act not only on original applications but also those filed after original registration.000 AMENDMENTS IN ORDINARY REGISTRATION PROCEEDINGS 1. Citizenship and Civil status of the applicant • if married. 15. the applicant shall state the extent of the search made to find them 6. If the application describes the land as bounded by a public or private way or Road. Substantial change in New technical boundaries. The court may require Facts to be stated in the application in addition to those prescribed by the Decree not inconsistent therewith and may require the filing of additional papers 5. Decrease in area File motion with court. increase in description and new area. 2. 16. PD 1529) 7. with power to hear and determine all questions arising upon such applications or petitions. and the . no need for new publication or notice If the amendment consists in the inclusion in the application for registration an area or parcel of land not previously included in the original application. Description of the land applied for together with the buildings and improvements. Striking out one or The court may strike more of the parcels of out at any time land applied for or by a severance of the application 2. The purpose of the new publication is to give notice to all persons concerned regarding the amended application. 20. he must file in RTC of each province/city where the different parcels of land are located for registration purposes Exception – Delegated jurisdiction of the MTC to hear and determine cadastral or land registration cases covering lots where: − there is no controversy or opposition. name of spouse. he shall file an instrument appointing an agent residing in the Phils. the registration court cannot acquire jurisdiction over the area or parcel of land that is added to the area covered by the original application. and if not known. Without a new publication.D. Sworn to before an officer authorized to administer oath for the province or city where the application was actually signed CONTENTS OF APPLICATION (Sec. and shall agree that service of any legal process shall be of the same legal effect as if made upon the applicant within the Philippines (Sec. when and how the marriage relation was terminated 8. legal or equitable 9. Averia v.D.2. 1529): (MADFARCE) 1. it shall state whether or not the applicant claims any portion of the land within the limits of the way or road. if known. the application shall be signed and sworn to by and in behalf of each. Aimed at avoiding multiplicity of suits. and • if the marriage has been legally dissolved.

Benin v. Contents. a new publication is not necessary. Other kinds of proof (ex. Spanish title (inadmissible and ineffective proof of ownership in land registration proceedings filed after Aug. Director of Lands v. b. RA 6940) What Applicant Must Prove • The land is alienable and disposable land of the public domain. CA. Notice. 2006] JUDGMENT is a decision of court constituting its opinion after taking into consideration the evidence submitted.R. the Spanish titles may no longer be presented to prove ownership. testimonial evidence to prove accretion. judicial proceedings • The decree of registration issued is conclusive and final • Governed by court procedure and law of evidence When To File Extended up to December 31. 3. It becomes final upon the lapse of 15 days counted from the receipt of notice of the judgment. Posting Requirements are the same as those required in original registration under PD 1529. 156888. as provided in Sec. as amended and as long as said public land remains alienable and disposable. 16.A. November 20. Santiago v. 1976) 2.. 6 months from its effectivity or on 14 August 1976). [G. deeds of sale) 4. [106 SCRA 426. Spanish titles can no longer be countenanced as indubitable evidence of land ownership.A. it has clearly set a deadline for the filing of applications for registration of ALL Spanish titles under the Torrens system (i. after which. the court continues to retain control over the case until the expiration of 1 year after the entry of decree of registration by the LRA. Filed on or before the date of initial hearing 6. court may require submission of a division plan approved by the Director of Lands GENERAL DEFAULT Those persons who did not appear and answer within the time prescribed SPECIAL DEFAULT When a party appears at initial hearing without having filed an answer and asks court for time to file answer but failed to do so within period allowed NOTE: Form.e. notwithstanding the lapse of the 15-day period from receipt of judgment by the parties. SBMA. 1981] Proof of Private Ownership (STOP) 1. No. A judicial declaration that a parcel of land is public. 2020.decision of the registration court would be a nullity insofar as the decision concerns the newly included land. State interest claimed by oppositor 3. 141. Tuason. the jurisdiction of the court is not affected by the failure of a new application. If only a portion of the land applied for is contested and such portion is not properly delimited. does not preclude even the same applicant from subsequently seeking a judicial confirmation of his title to the same land. Republic v. 2 of RA 9176 Limitation To Area Applied For Maximum of 12 hectares (Sec. 1989] In special proceedings the purpose of execution of judgment is to establish a status. Mailing. Presidential issuances and legislative acts (constitutive of a fee simple title or absolute title in favor of the grantee. Set forth objections to the application 2. Apply for the remedy desired 4. must be coupled with proof of actual possession for the period required by law) 3. 48 of C. But if the amendment consists in the exclusion of a portion of the area covered by the original application and the original plan as previously published. Tax declarations and tax payments (not conclusive evidence of ownership. In the latter case. Assosacion Benevola de Cebu [178 SCRA 692. Taking the law as a whole. a law ceding full ownership to a government institution) The holder of a Spanish title may still lose his ownership of the real property to the occupant who actually possesses the same for the required prescriptive period. and • His possession was for the length of time and in the manner and concept required by law . However. 141 Judicial Confirmation of Imperfect or Incomplete Title under the Public Land Act • In rem. provided he thereafter complies with the provisions of Sec. UNDER C. condition or fact. 1974] Requisites of Opposition: an opposition may be filed by any person claiming an interest 1. Signed and sworn to by him or by some other duly authorized person 5. [57 SCRA 531.

no prescription against: (1) the loser and (2) anyone unlawfully and adversely occupying When writ may not issue: When a party entered into property after issuance of final decree. No. After the ownership has been proved and confirmed by judicial declaration. ROD shall send duplicate and note on each certificate of title to whom it is issued 9. the name of the spouse. Free from liens and encumbrances General Rule – Claims and liens of whatever character existing against the land prior to the issuance of the certificate of title are cut off by such certificate and the certificate so issued binds the whole world. Clerk of court will send order of court and copies of judgment 3. Accion publiciana 4. 168913. Liens. Accion reivindicatoria Decree of Registration • The decree issued by the LRA pursuant to the order of the court. If the owner is under disability. Send to ROD the original and duplicate of title and certificate for entry in his registration book 6. Other matters to be determined in pursuance of the law Process of Issuing The OCT 1. Any public highway. or private way established or recognized by law. Writ of Demolition may be issued. Date. Description of the land and shall set forth the estate of the owner. which are not by law required to appear on record in the Register of Deeds in order to be valid iii. provided that if the land is conjugal property. Unlawful detainer 3. 2007] Post-Judgment Incidents 1. Bound in consecutive order Attributes and Limitations on Certificates of Title and Registered Lands 1. Writ of Demolition: the complement of writ of possession. Within 15 days from finality of order of judgment directing registration of title – court orders the LRA to issue decree of registration and certificate of title 2. Administrator will issue a decree of registration and original and duplicate of OCT that is signed by the Administrator. canal or lateral thereof. Exceptions: (CNT-PD) i. Enter in record book. Those noted on the certificate ii. Original copy to be filed in ROD 10. The court has authority to order. numbered and sealed to take effect upon date of entry 7. Unpaid real estate taxes levied and assessed within 2 years immediately preceding the acquisition of any right over the land by an innocent purchaser for value iv. if the certificate of title does not state the boundaries of such highway or irrigation canal or lateral thereof have been determined v. the nature of such disability. or rights arising or existing under the laws and the Constitution. land registration proceedings. dated. Ronald Ting v. Writ of Possession: order to sheriff to deliver the land to the successful party litigant. • Binds the land. and other encumbrances 5. signed. [G. and also show their relative easements. attachments. Whether the owner is married or unmarried. or any government irrigation. hour and minute of its entry 2. his age 4. the decree shall be issued in the name of both spouses 3. enter and file decree of registration in LRA 5. the demolition of improvements introduced by the defeated oppositor or his successor-ininterest 4. to demolish improvements introduced by oppositor or his successor in interest Means to Recover Possession 1. including the government. subject only to such exceptions or liens as may be provided by law • Conclusive upon all persons including the government Contents of The Decree (DMD-DO) 1. except when the adverse or losing party had been in possession of the land and the winning party desires to oust him therefrom. and if a minor. quiets title thereto. no further proceeding to enforce said ownership is necessary. is not an oppositor in registration proceeding. Liro. the ownership by a person of a parcel of land is sought to be established. and if married. ROD to send notice to registered owner ready for delivery after payment of fees 8. and is in possession of land for at least 10 years 2. Any disposition of the property or limitation on the issue thereof pursuant to PD 27 or . Forcible entry 2. as a consequence of the writ of possession issued by it. March 14. claims.

Erasusta v. Exceptions: (PNF) a.R. if title to the property has been transferred from the forger to an innocent purchaser in good faith. landlord and tenant b. De Lucas v. July 17. not when it concerns that of the TCT. In the absence of inquiry. and without defects. Exception – When he has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make inquiry. Inc. 162593.D. the decree and the corresponding certificate of title becomes incontrovertible and indefeasible. [72 SCRA 193. title 1529 not subject that to “a Sec.” Torrens title cannot be collaterally attacked. From the rights of partition between coowners f. From liability to attachment or levy on execution c. No. It cannot be altered. Torrens Certificate presumed valid and devoid of flaws General Rule – Torrens Certificate of Title is presumed to have been regularly issued. valid. notorious and continuous possession under claim of ownership for the period fixed by law is ineffective against a Torrens title. Even adverse. provides Registered land or the owners thereof are not relieved from the following: a. JM Tuason and Co. From any rights incident to the relation of husband and wife. Tapuroc v. The action for the declaration of nullity of deed of sale commenced by the petitioners in the RTC is not the direct proceeding required by law to attack a Torrens certificate of title. It cannot perforce be acquired by prescription. CA. [100 Phil 277 . If previous valid title of the same land exists b. When land covered is not capable of registration c. v. General incidents of registered land With respect to a claim of acquisitive prescription. 1956] certificate of title shall not be subject to collateral attack. From the right of the government to take . 149231. 1979] b. The question on the validity of a Torrens title. 512 SCRA 97 (2007 4. [G. [79 SCRA 525 . When acquisition of certificate is attended by fraud The rule on the incontrovertible nature of a certificate of title applies when what is involved is the validity of the OCT. the respondent Bank cannot and should not be regarded as a mortgagee/purchaser in good faith. 2006] 3. [93 SCRA 146.R. modified. The fact that the title to the land was lost does not mean that the land ceased to be registered land before the reconstitution of its title. 2006] 5. 26. can be raised only in an action expressly instituted for that purpose. Laches may be invoked to bar reconveyance of land to the registered owner only if there are intervening rights of third persons which may be affected or prejudiced if such land is returned to the registered owner.any other law or regulations on agrarian reform 2. While. the same does not apply in case of banking institutions or those engaged in real estate for they are expected expected to exercise more care and prudence than private individuals in their dealing with registered lands. Loquellano de Mende. Incontrovertible and indefeasible General Rule – Upon expiration of 1 year from and after the entry of the decree of registration in the LRA. 1976] 2. From liability to any lien of any description established by law on the land and buildings thereon. Ruiz v. CA. The buyer has the right to rely upon the face of the Torrens title and dispense with the trouble of inquiring further. CA. Feliciano v. Sept. or cancelled except in a direct proceeding in accordance with the law. Certificate of collateral attack 48 of P. Gamponia. it is baseless when the land involved is a registered land since no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession. Zaldivar. or in the interest of the owner in such land or buildings d. From any right or liability that may arise due to change of the law on descent e. Arguelles v. Registered land not subject to prescription a. [G. whether fraudulently issued or not. 1977] c. Timbancaya. No. it is a familiar doctrine that a forged or fraudulent document may become the root of a valid title.

Parties Purpose Person who requests the survey Effect of judgment Petitioner comes to court to confirm his title and seeks the registration of the land in his name Landowner • no adverse claim • if the applicant fails to prove his title. his application may be dismissed without prejudice (no res judicata) Government. it is nonetheless true that this rule only applies where there exists no serious controversy as to the certificate’s authenticity vis-à-vis the land covered therein. posting 6. Notice of cadastral survey published once in OG and posted in conspicuous place with a copy furnished to the mayor and barangay captain 2. Issuance of the decree and certificate of title NOTE: The cadastral court is not limited to a mere adjudication of ownership in favor of one or more claimants. on the pain of losing their claim thereto. From liability to be recovered by an assignee in insolvency or trustee in bankruptcy under the laws relative to preferences h. Trustee who obtains a Torrens title in his name. Vera. and the latter are. CADASTRAL REGISTRATION CADASTRAL REGISTRATION is a proceeding in rem initiated by the filing of a petition for registration by the government. Filing of answer 7. Hearing of the case 8. Filing of petition 5. Decision 9. Publication (twice in successive issues of OG). Where certificate of title is obtained by a trustee a. and he shall mark the boundaries of the lands by monuments set-up in proper places thereon 3. Republic v. 120 SCRA 210 (1983) BASIS Nature Applicant Lands covered PD 1529 Voluntary Landowner usually involves private land it may also refer to public agricultural lands if the object of the action is confirmation of an imperfect title Applicant and opponent CADASTRAL Compulsory Director of Lands all classes of lands are included 3. such being one of the limitations upon the finality of title b. Notice of date of survey by the Bureau of Land Management and posting in bulletin board of the municipal building of the municipality or barrio.the land by eminent domain g. From any other rights or liabilities created by law and applicable to unregistered land 6. while the court has no jurisdiction to adjudicate lands already covered by a Certificate of Title. the property is declared public land. the same shall be declared public (res judicata) PATENTS Classification of Land of Public Domain: The classification is the exclusive prerogative of executive and not of the judiciary . If there are no successful claimants. not by the persons claiming ownership of the land subject thereof. mailing. in effect. compelled to go to court to make known their claim or interest therein and to substantiate such claim or interest Procedure: (NN-CP-PAHD-DI) 1. over property held in trust by him for another cannot repudiate the trust relying on the registrations. Trustee could not perforce legally convey ownership of the registered property in her will for she is not the absolute owner thereof Additionally. Landowners must come to court as claimants of their own lands Government asks the court to settle and adjudicate the title of the land Government • if none of the applicants can prove that he is entitled to the land. Cadastral survey 4.

Mineral lands 4. Agricultural – the subject to alienation 2. charitable d. industrial c. it is the operative act to convey and transfer title 3. in the exercise of its equity jurisdiction. National park only classification Under the Public Land Act: 1. Registration with the ROD: mandatory. GR: May not be opened 1 year after entry by LRA (otherwise. Indefeasible when registered. Action for partition because it is not a conveyance 2. then it may be reopened even after 1 year because registration does not shield bad faith • The court. it will not ripen into ownership Exception – Mineral lands and forest lands acquired before inauguration of Commonwealth in November 15.Anyone who applies for confirmation of imperfect title has the burden of proof to overcome the presumption that the land sought to be registered forms part of public domain (Regalian doctrine) Under the Constitution: 1. Alienations or encumbrances made in favor of the government Erring Homesteader not Barred by Pari Delicto . Actual physical possession. Deed of conveyance issued by government patent/grant 2. open and continuous • Land ceased to be part of public domain & now ownership vests to the grantee • Any further grant by Government on same land is null and void • Upon registration. Timber lands: inalienable 3. Educational. it is void ab initio for lack of jurisdiction General Rule – It is not subject to acquisitive prescription even if in possession for long time. confusion and uncertainty on the government system of the distribution of public lands may arise and this must be avoided) Exception: if it is annullable on ground of fraud. educational. partnership. Fishponds are of a distinct category and cannot be alienated but may be leased from government When Government Grant Deemed Acquired by Operation of Law: 1.Action to recover does not prescribe KIND S TO WHOM GRANTE D To any Filipino citizen over the age of 18 years or head of a family OTHER REQUIREMENTS Home stead Paten t • Grantee does not own more than 12 hectares of land in the Philippines or has not had the benefit of any gratuitous allotment of more than 12 hectares • must have resided continuously for at least 1 year in the municipality where the . industrial. and deemed incorporated with Torrens system 1 year after the issuance of patent 2. or right of way (subject to consent of grantee and approval of Secretary of Environment & Natural Resources) Exceptions: 1. therefore the conversion of agricultural land to fishponds did not change character of land Now: It has a restricted meaning. religious or charitable purpose. Residential. No private corporation. Mineral lands: inalienable • If patent or title is issued. 1935 because there are vested rights which are protected FISHPONDS Before: It was included in the definition of agriculture. title is indefeasible Title Issued Pursuant to Registration of Patent: 1. may direct reconveyance even without ordering cancellation of title Homestead Restrictions: 1.Pari delicto rule does not apply in void contracts .Violation of prohibition results in void contract . Agricultural b. association may lease land unless it is solely for commercial. It cannot be liable for satisfaction of debt within 5 years after approval of patent application 3. Subject to repurchase of heirs within 5 years after alienation when allowed already 4. Town sites and for public and quasipublic uses 2. Forest or timber 3. commercial. Alienable/disposable: a. Land cannot be alienated within 5 years after approval of application for patent 2.

31. m. Indefeasible And Conclusive The certificate of title becomes indefeasible and incontrovertible upon the expiration of one year from the date of the issuance of the order for the issuance of the patent. Official issues an instrument of conveyance 2. the land cannot be the subject of a cadastral proceeding nor decreed .. If illiterate. such right cannot be waived. Republic v. within 5 years from and after the issuance of the patent or grant. Fees to be paid by grantee 5. established his residence on a parcel of land of public domain not needed for public service • not more than 1000 sq. Lands acquired under emancipation patents issued to landless tenants and farmers must not be alienated or encumbered within 10 years from issuance of the title 4. the owner-vendor. and improvement of at least 1/5 of the land until the date of such final payment • for agricultural lands suitable for residential. Instrument is to be entered in books and owner’s duplicate to be issued • Instrument is only a contract between Government and private person and does not take effect as conveyance if unregistered.Free Paten t To any natural born citizen of the Philippine s (filing ended Dec.) full payment of purchase price. As such. tracts of disposable agricultural public land for at least 30 years prior to March 28. either by himself or his predecessors-ininterest. File the instrument with ROD 3. 393 SCRA 361 (2002) 2. must be approved by the then Commissioner of Mindanao and Sulu NATURE OF TITLE TO PUBLIC LANDS CONVEYED: 1. and 2. 2000) Sales Paten t Citizens of the Philippine s of lawful age or head of the family may purchase public agricultur al land of not more than 12 hectares To any citizen of legal age for residential purposes Speci al Paten t To NonChristian Filipinos under the Public Land Act land is situated • must have cultivated at least 1/5 of the land applied for • Grantee does not own more than 12 hectares of land • has continuously occupied and cultivated. cultivation. • occupant must have constructed his house on the land and actually resided therein • no public auction required • not subject to any restriction against encumbrance or alienation • Secretary of the DILG shall certify that the majority of the non-Christian inhabitants of any given reservation have advanced sufficiently in civilization Procedure for Registration of Public Lands: (IFEFI) 1. When lands are conveyed within that period. patent is issued only after: 1.1990 • has paid real property taxes on the property while the same has not been occupied by any person • grant will be limited to 12 hectares only • to have at least 1/5 of the land broken and cultivated within 5 years from the date of the award (public auction) • shall have established actual occupancy. may repurchase the same within five years from conveyance. it is registration which is operative act of conveying land. his widow or heirs. Heirs of Felipe Alejaga. evidence of authority for ROD to register 4.) completion of the construction of permanent improvements appropriate for purpose for which the land is purchased (must be completed within 18 months from date of award) • does not own a home lot in the municipality in which he resides • in good faith. except if in favor of the government. commercial or industrial purposes. Conveyances and encumbrances made by persons belonging to the “nonChristian tribes” may be made only when the person making the conveyance or encumbrance is able to read and understand the language in which the instrument or deed is written. Sr. After issuance of certificate of title. Transfer or conveyance of any homestead after 5 years but before 25 years after the issuance of the title without the approval of the DENR Secretary 3. land is deemed registered land within the purview of the Torrens system RESTRICTION ON ALIENATION/ ENCUMBRANCE OF LANDS TITLED PURSUANT TO PATENTS: 1. Lands under free patent or homestead patent is prohibited from being alienated/encumbered.

Through actual or extrinsic fraud d. the one who bought it for value and in good faith and who registered first shall have preference A free patent obtained through fraud or misrepresentation is void. Republic v. whose land was registered 4. Petitioner has a real and dominical right another person In absence of registration. Further. FAME b. Furthermore. the one-year prescriptive period provided in the Public Land Act does not bar the State from asking for the reversion of property acquired through such means. in case of extrinsic fraud.may still bring an action for the reversion to the public domain of land that has been fraudulently granted to private individuals. Heirs of Alejaga. preventing petitioner from presenting his side b. accident. the land covered by them ceases to be part of the public domain and becomes private property. it merely confirms the registrant’s already existing one. Therefore. 2002] Grounds (FAMINE): a. registration under the Torrens System is not a mode of acquiring ownership. Wellsettled is the doctrine that the registration of a patent under the Torrens System does not by itself vest title. FAME. title to public land is not perfected and therefore not indefeasible In case of 2 titles obtained on same date. or insufficiency of evidence to justify decision. indefeasibility of a title does not attach to titles secured by fraud and misrepresentation. this indefeasibility cannot be a bar to an investigation by the State as to how the title has been acquired. He has been deprived of such right c. or that the decision is against the law Appeal by aggrieved party Within 15 days from notice of judgment To the CA by ordinary appeal. The petition is filed within 1 year from the issuance of the decree e. thence to SC by petition for review Relief from Judgment (Rule 38 § 2) By aggrieved party Within 60 days from knowledge of. under oath Motion for New Trial (Rule 37) By aggrieved party Within 15 days from receipt of judgment . and one from judicial decree and sold to 2 different persons. judgment no new trial upon finality of judgment Requisites: a. [393 SCRA 361. Once a patent is registered and the corresponding certificate of title issued. actual or extrinsic fraud. fatal infirmity in the decision for want of due process c. excusable negligence (FAME) and with valid defense. including person deprived of opportunity to be heard To be filed in same registration case Within 1 year after entry of decree of registration it will not prosper if transferred to innocent purchaser for value Grounds: a. the one procured through a decree of registration is superior than patent issued by director of lands 2 titles procured by one person: one from homestead patent. if the purpose of the investigation is to determine whether fraud has in fact been committed in securing the title. and 6 months from. lack of jurisdiction of the court Requisites: a. the State -. Person deprived of right is party to case (applicant or oppositor) Petition for Review of Registration Decree (§ 32 PD1529) By aggrieved party. committed outside trial. Verily.even after the lapse of one year -. REMEDIES REMEDIES AVAILABLE TO AGGRIEVED PARTY IN REGISTRATION PROCEEDINGS Motion to Lift/Set Aside order of default (Rule 9 § 3) By defaulted oppositor Before judgment Fraud. After judgment c. Award of excessive damages. state that deprived of hearing or prevented from appealing b. under Section 101 of Commonwealth Act No. Newly discovered evidence: Discovered after trial not discovered earlier even with exercise of diligence will probably alter judgment c. The property has not been passed on to an innocent purchaser for value (IPV) Action for Reconveyance (§96 PD 1529/ §102 Act 496) By aggrieved party. mistake. with affidavit of merit. 141.

No negligence on his part c. and ROD and National Treasurer Compensation: fair market value of land at time of loss. or is deprived land or any estate or interest therein b. if action brought by registered owner or his children. (Loss or damage should not be due to breach of trust or mistake in resurvey resulting in expansion of area in certificate of title. mistake. omission.000 which is maintained as standing fund. unless procured by fraud or is jurisdictionally flawed. Action for compensation has not prescribed Action for Compensation from the Assurance Fund By person deprived of his land by reason of operation of Torrens System. Linzag v. Amount to be recovered not limited to 500. When the land is acquired in violation of . provided: no negligence on his part and barred from recovering land Against person responsible for fraud. 121 and 122 of the Public Land Act (ex. The later title is void even if IPV derives title therefrom In case of non-registered land: to be filed by the Sol-Gen for cancellation of title or reversion to State) Voiding or cancellation of OCT does not affect derivative TCTs if their holders not given opportunity to be heard and defend their title Annulment of Judgment May only be availed of when the ordinary remedies of new trial. or other appropriate remedies are no longer available through no fault of the petitioner. or plaintiff in possession: imprescriptible if based on expressed trust: imprescriptible if based on void contract: imprescriptible Action for Damages By aggrieved party After 1 year from decree and no reconveyance possible due to IPV Within 4 years from discovery of fraud (actual or constructive) Against person responsible for fraud Requisites: a. Violation of Sections 118. The aggrieved party was not negligent. CA. [291 SCRA 304 . alienation or sale of homestead executed within the 5 year prohibitory period) b. e. or any error. T he aggrieved party sustained loss or damage. If fund is not sufficient. He is barred under the provisions of PD 1529 or under the provisions of any law from recovering such land. damage or deprivation was due to: fraud. Thereafter. When area is an expanded area e. Failure of the grantee to comply with conditions imposed by law to entitle him to a patent or grant d. insane or imprisoned. if insolvent. the Government shall be subrogated to the rights of plaintiff to go against other parties or securities Any court of competent jurisdiction: RTC in city where property lies or resident of plaintiff Requisites: a. damage or deprivation was occasioned by the bringing of the land under the operation of the Torrens system or arose after the original registration of the land c. Person is wrongfully deprived of his land by registration in name of another b. f.) d. Barred/ precluded from bringing an action (after 1 year from decree) d. he has additional 2 years after disability is removed to file the action. against national treasury. The action has not prescribed: must be instituted within 6 years from the issuance of the certificate of title (If plaintiff is minor. or misdescription in any certificate of title or in any entry or memorandum in the registration book. The loss. National Treasurer is authorized to make up for deficiency from other funds available to Treasury even if not appropriated. Execution first against person responsible for fraud. co-heir. 1998] Reversion Suit The objective is the cancellation of the title and the consequential reversion of the land to the State Grounds: a. or within/after 1 year from entry Available so long as property not yet passed to IPV action in personam if based on fraud. petition for relief.) Cancellation Suits By aggrieved party or the government In case of double title: earlier title prevails. it must be instituted within 4 years from the discovery of the fraud if based on implied trust: it must be filed within 10 years from issuance of OCT. Such loss. When the land patented and titled is not capable of registration c. 120.wrongly to another person Before issuance of decree.

If statement is false. amended except in direct proceeding in court (summary proceeding). it is considered to be the more permanent and stable one as compared to lis pendens 3. File a petition for replacement of lost or destroyed owner’s duplicate of OCT/ TCT in court for the issuance of new title c. record. or (b) other person having an interest in the registered property.g. or (c) in proper cases. The excess shall be paid to the Assurance Fund and be included in the annual report of Treasurer to Secretary of Budget. the ROD with the approval of the LRA Administrator Grounds (CRIMENN): 1.the Constitution (e. or proceeding that is void. Lis pendens is a notice that property is in litigation while adverse claim signifies that somebody is claiming better right Recent Ruling: adverse claim can only be removed upon court order. a party in interest may file a petition in the RTC to compel the surrender of such duplicate title. Amendment and Alteration of Certificate of Title A certificate of title entered in a registration book cannot be altered. People v. This shall be in the custody of the National Treasurer. ¼ of 1% based on assessed value of land shall be paid to the ROD as a contribution to the assurance fund. Mamadsul v. [190 SCRA 82. A court order is necessary to alter entries of such registration books. if not in possession. prescription. claim. such as by stating false assertions in the sworn answer required of applicants in cadastral proceedings. the court may order issuance of a new certificate and annul the old certificate The new certificate shall contain an annotation regarding the annulment of the old certificate 4. he can be charged with the complex crime of estafa through falsification of public document b. After notice and hearing. voidable or unenforceable. It shall be invested until the principal plus interest aggregates to 500. In case there is no assessment yet. is required. Grounds: registration pursuant to voluntary and involuntary conveyances and issuance of a new certificate and for purposes of amendment or alteration After hearing. land acquired by an alien) Indefeasibility of title. encumbrance. Person in interest makes a sworn statement regarding the loss or destruction of the owner’s duplicate certificate of title to be filed with ROD. imprescriptible. by reason of any contract. 16 SCRA 749 (1966) MORE ON THE ASSURANCE FUND Upon entry of certificate in name of owner or TCT.000. Name of person on certificate has been changed . the court is to order issuance of new title with a memorandum that it is issued in place of lost certificate (duplicate) 2. Moson. New interest that does not appear on the instrument have been created 2. PETITIONS AND MOTIONS AFTER ORIGINAL REGISTRATION: 1. subject to court approval. A petition for such purpose may be filed by the (a) registered owner. laches. and estoppel do not bar reversion suits Quieting of Title (Article 476 of the new civil code) By registered owner or person with an equitable right or interest in the property. c. 1990] An ordinary civil case brought to remove clouds on the title to real property or any interest therein. Adverse claim in registered land Different from lis pendens: Lis pendens has no expiration period but adverse claim is only for 30 days. must be brought within 10 years from loss of possession Criminal Action (§ 116 Act 496) The State may criminally prosecute for perjury the party who obtains registration through fraud. Petition Seeking Surrender of Duplicate Title When a person in possession of the owner’s duplicate certificate fails to surrender the same to the ROD. Interest have been terminated or ceased 3. Cainglet. Lost Duplicate Certificate a. therefore. a sworn declaration of 2 disinterested persons on the value of the land. Omission or error was made in entering certificate 4. and may be prejudicial to said title Quasi-in rem If plaintiff is in possession.

Reconstitution of Original Certificate of Title The restoration of the instrument which is supposed to have been lost or destroyed in its original form and condition. Alterations to correct obvious mistakes 5.5. mortgagee’s or lessee’s duplicate of said certificate Certified copy of such certificate. it shall issue a corresponding order to ROD. Owner’s duplicate of the certificate of . Corporation. lease. Administrative JUDICIAL RECONSTITUTION Process: 1. is sufficient and proper basis for reconstitution. At the time the said title was lost or destroyed. What corrections are permitted in title (which does not include lands included in original. or encumbrance containing description of property covered by the certificate of title and on file with the ROD. and (c) for reconstitution of OCT Deed of transfer or other document containing description of property covered by TCT and on file with the ROD. in the judgment of the court. which was the basis of the certificate of title. Heirs of Pedro Pinote v. Alterations which impair rights: with consent of all parties c. Kinds of Reconstitution: a. or an authenticated copy thereof indicating that its original had been registered Any other document which. The loss or the destruction of the title sought to be reconstituted and 2. (b). When there is reasonable ground for the amendment or alteration. File a petition with the RTC ( In rem proceeding) 2. FOR TCT Same as sources (a). 2. a. Substantial loss or destruction of the original land titles due to fire. has dissolved and has not conveyed the property within 3 years after its dissolution 7. Dulay. These lost or damaged titles should not be less than 500. the new title has the same validity as old one b. c. b. The number of certificates of title lost or damaged should be at least 10% of the total number in the possession of the Office of the ROD 3. after proper proceedings. flood. When the court grants the petition. previously issued by the ROD Authenticated copy of the decree of registration or patent. Deed of mortgage. in the same form they were when the loss or destruction occurred. he was the registered owner thereof a. c. POSTED and MAILED. Noncompliance voids the proceeding as such requirements are jurisdictional 3. and 4. which owned registered land. Registered owner has married or registered as married and the marriage has terminated 6. b. Judicial b. [187 SCRA 12. Alterations which do not impair rights and b. as the case may be. d. under the custody of ROD Purpose: to have the same reproduced. or other force majeure as determined by the Administrator of the LRA 2. ADMINISTRATIVE RECONSTITUTION May be availed of only in case of: 1. When reconstituted. 1990] The applicant should prove : 1. f. Sources: 1. old survey was incorrect. a. Petitioner must have the duplicate copy of the certificate of title (RA 6732) Sources: 1. FOR OCT (in this order): Owner’s duplicate of the certificate of title Co-owner’s. technical description as long as original decree of registration will not be reopened and rights or interest of persons not impaired. or an authenticated copy thereof indicating its original had been registered and pursuant to which the lost or destroyed certificate of title was issued Same as sources (e) and (f) for reconstitution of OCT e. The court shall cause a NOTICE to be PUBLISHED. substitution of name of registered owner) a.

Thus. but one filed with the court for issuance of new title in lieu of the lost copy PUBLICATION. 2006] . Manila Railroad v. which do not belong to the owner of the land. if there be any. notice of hearing and mailing requirements did not vest jurisdiction of the case to the court. A statement that no deeds or other instruments affecting the property have been presented for registration.R. affecting the property g. as yet NOTE: The law provides for retroactive application thereof to cases 15 years immediately preceding 1989 When the duplicate title of the landowner is lost. July 17. and the names and addresses of the owners of such buildings or improvements e. Sanchez [G. or.title 2. That the owner’s duplicate of the certificate of title had been lost or destroyed b. and Must be SENT BY REGISTERED MAIL or otherwise. [353 SCRA 699. the proper petition is not reconstitution of title. Sta. (4) the location of the property. No. (3) the names of the interested parties appearing in the reconstituted certificate of title. The order of reconstitution issued without compliance with the said requirement never becomes final . area and boundaries of the property d. Must be POSTED on the main entrance of the provincial building and of the municipal building of the municipality or city where the land is situated. the judgment rendered by the RTC regarding the reconstitution of title is void. MAILING AND POSTING IN PETITIONS FOR RECONSTITUTION OF TITLE: Notice shall be PUBLISHED twice in successive issues of the Official Gazette. or lessee’s duplicate of said certificate Contents a. mortgagee’s. The nature and description of the buildings or improvements. These notice requirements are mandatory and jurisdictional. Sison. Even the publication of the notice of hearing in a newspaper of general circulation like the Manila Daily Bulletin. such order of reconstitution is null and void. is not a substantial compliance with the law because Section 13 specifies publication in the OG and does not provide for any alternative medium or manner of publication. or lessee’s duplicate had been issued c. the registration thereof has not been accomplished. owners of the adjoining properties. 1983] Notice must be actually sent or delivered to parties affected by the petition for reconstitution. Sections 9 and 10 requires that 30 days before the hearing (1) a notice be published in 2 successive issues of the OG at the expense of the petitioner. at the expense of the petitioner. Moya. 1984] Service of notice of the petition for reconstitution filed under RA 26 to the occupants of the property. as well as posting of the notices are mandatory and jurisdictional requisites… If an order of reconstitution is issued without any previous publication. Lucia. and (2) such notice be posted at the main entrances of the provincial building and of the municipal hall where the property is located. 146081. mortgagee’s. and (5) the date on which all persons having an interest in the property must appear and file such claims as they may have. to every person named in said notice (actual occupants and adjacent owners). mortgagor’s. The names and addresses of the (a) occupants or persons in possession of the property.the service of the notice of hearing to the adjoining owners and actual occupants of the land. or lessee’s. (2) the name of the registered owner. Republic v. PUBLICATION. The notice shall state the following: (1) the number of the certificate of title. POSTING AND SENDING BY MAIL should be done at least 30 days prior to date of hearing. if any. Non-compliance voids the proceeding. (b) of the owners of the adjoining properties and (c) of all persons who may have any interest in the property was null and void. [215 Phil 593. if any. The publication of the petition . Co-owner’s. MWSS v. That no co-owner’s. The location. Puzon v. [124 SCRA 394. 2001] The failure to meet any of the necessary publication. and all persons who may have any interest in the property is NOT REQUIRED if the petition is based on the owner’s duplicate certificate of title or on that of the coowner’s. A detailed description of the encumbrance.

such as when it was based on void documents.R. The act of registration creates a constructive notice to the whole world of such voluntary or involuntary instrument or court writ or process. Consequently. then the reconstituted certificate is void. the issuance of TCT No. Fraudulent procurement of certificate 4. No. Secure an order from court OFFENSES IN LAND REGISTRATION: 1. the mere execution of the deeds of sale. T-17993 is also void. Rules as to the necessity and effects of registration in general 1. Forging of seal in ROD. as evidence of authority to the ROD to register such documents 2. as it emanated from the void in Zaldivar’s name. [G. Forgery a. Fraudulent sale: sale of mortgaged property under the misrepresentation that it is not encumbered.When the owner’s duplicate certificate of title has not been lost. Zaldivar. Larceny 2. signature of persons authorized to sign d. and also to such instruments which are not the willful acts of the registered owner and which may have been executed even without his knowledge or against his consent • Attachment • Injunction • Mandamus • Sale on execution of judgment or sales for taxes • Adverse claims • Notice of lis pendens F. Use of any document which an impression of the seal of the ROD is forged 5. 2006] 6. deceitful disposition of property as free from encumbrance a. Perjury: false statement under oath 3. or lease or other voluntary documents serve only 2 purposes: • Sale • Real property mortgage • Lease • Pacto de retro sale • Extra-judicial settlement • Free patent/homestead • Powers of attorney • Trusts An innocent purchaser for value of registered land becomes the registered owner the moment he presents and files a duly notarized and valid deed of sale and the same is entered in the day book and at the same time he surrenders or presents the owner’s duplicate certificate of title covering the land sold and pays Entry thereof in the day book of the ROD is sufficient notice to all persons even if the owner’s duplicate certificate of title is not presented to the ROD . because the court that rendered the decision had no jurisdiction. Except a will that purports to convey or affect a registered land. Procure an authenticated copy of lost or destroyed instrument 2. and b. The indefeasibility of a Torrens title does not apply where fraud attended the issuance of the title. VOLUNTARY DEALINGS Refer to deeds. 162593. September 26. SUBSEQUENT REGISTRATION SUBSEQUENT REGISTRATION Where incidental matters after original registration may be brought before the land registration court by way of motion or petition filed by the registered owner or a party in interest. instruments. 3. or documents which are results of the free and voluntary acts of the parties thereto INVOLUNTARY DEALINGS Refer to such writ or order or process issued by a court of record affecting registered land which by law should be registered to be effective. It is only the act of registering the instrument in the ROD of the province or city where the land lies which is the operative act that conveys ownership or affects the land insofar as third persons are concerned. as a contract between the parties thereto. signature or handwriting of any officer of court of ROD b. Forging of handwriting. Registration of Transaction evidenced by lost document ROD is forbidden to effect registration of lost or destroyed documents Steps by interested parties: 1. Fraudulent stamping or assistance in stamping c. name. but is in fact in the possession of another person. Feliciano v. mortgage.

annotation in entry book is sufficient 1. 1980] 3. Where a person buys land not from the registered owner but from one whose rights to the land has been merely annotated on the certificate of title. CA & Suzara. the general rule that a purchaser or mortgagee of the land is not required to look further than what appears on the face of the title does not apply. 1963] Exceptions – (BOB-MILK) 1. Quiniano v. the land was subsequently sold to an innocent purchaser. 1997] Although generally a forged or fraudulent deed is a nullity and conveys no title. [174 SCRA 484. File the instrument creating or transferring the interest and the certificate of title with ROD. GSIS. [39 SCRA 221. Execution of deed in a form sufficient in law (public instrument) 2. an innocent purchaser for value relying on a Torrens title issued in pursuance thereof is protected. Tomas v. Issuance of the TCT Registration of Real Property Mortgage 1. Claunan. including: a. Owner’s duplicate b. Present deed of mortgage together with b. Document of transfer: 1 additional copy for city/provincial assessor 2. Egeo v. if deed is not registered. 2007] 6. D’Oro Land v. Legare. 1989] 4. still. 1987] Person’s legal interest cannot raise this exception Principle of caveat emptor simply requires the purchaser of real property to be aware of the alleged title of the vendor such that one who buys without checking the vendor's title takes all the risks and losses consequent to such failure. the purchaser is not required to explore further than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may defeat his right thereto. Purchaser in bad faith. [281 SCRA 491. 1971] 5. ROD shall make a memorandum on the certificate of title. Fule v.[ 516 SCRA 681. Legare cannot be applied where the owner still holds a valid and existing certificate of title covering the same property because the law protects the lawful holder of a registered title over the transfer of a vendor bereft of any transmissible right. [7 SCRA 351. Payment of fees d. the buyer is obliged to investigate or inspect the property sold to him when there are circumstances that would put him on guard. Evidence of full payment of real estate tax d. Dela Merced v. Purchaser had full knowledge of flaws and defects of the title. there are instances where such a fraudulent document may become the root of a valid title. Owner’s Duplicate and affidavit of good faith c. 1963] Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefore Even if a decree in a registration proceeding is infected with nullity. Tomas. [153 SCRA 330. While a buyer of registered land need not go beyond its certificate of title. [166 SCRA 519. VOLUNTARY DEALINGS Operative Act: registration by owner.the registration fees Need to present title to record the deed in registry & to make memorandum on title No presentation required. Legare. 3. [365 SCRA 1.[ 7 SCRA 351. Where the purchaser or mortgagee is a bank/financing institution. CA. Purchases land with a certificate of title containing a notice of lis pendens 7. One such instance is where the certificate of title was already transferred from the name of the true owner to the forger. This does not apply in this case. Fule v. Francisco v. signed by him 3. is binding only between parties General Rule – MIRROR DOCTRINE: Where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the property. [98 SCRA 280. CA. Registration with ROD where the land lies a. Cruz v. ROD shall enter upon original certificate of title and upon duplicate a memorandum . The ruling in Fule v. and while it remained that way. Payment of fees and documentary stamp tax c. Bernales v. IAC. such as the presence of occupants other than the registered owner. however. 1988] Process of Registration: (Generally) 1. 2001] 2. CA. Sufficiently strong indications to impel closer inquiry into the location. boundaries. and condition of the lot. or any encumbrance thereon.

it shall be a pledge and not a chattel mortgage (if no chattel mortgage deed executed) *3. Valid between parties but void against 3rd persons *2. file number assigned to deed) e. Creates a lien that attaches to the property in favor of the mortgagee 2. Present the document together with affidavit of good faith 3. ROD to index attachment in names of both plaintiff and defendant or name of person for . Vitiates mortgage as against creditors and subsequent encumbrancers *5. Mortgage is made to secure obligation specified 2. Actual knowledge is same effect as registration An Affidavit of Good Faith states that: 1. rights. Copy of writ in order to preserve any lien. containing number of certificate of title of land to be affected or description of land 2. renewable for another 25 years Who Else May Register? Builder in Good Faith Registration of Trust 1. If it is not registered. d. Creates a real right but without prejudice to rights of 3rd persons 2. time of filing. ROD enters in Day Book in strict order of their presentation chattel mortgages and other instruments relating thereto (primary process) 5. it is valid as between parties but not to 3rd persons without notice May Aliens Register Lease? Yes 1. or even against his will aa Attachment A writ issued at the institution or during progress of an action commanding the sheriff to attach the property. 1. it is delivered. NOTE: When there is prohibition in mortgaged property as regards subsequent conveyances. Limit: 25 years. signature. right. That it is not entered into for purposes of fraud Effect of Absence of Affidavit of Good Faith *4. Payment of fees 4. leasehold cannot be registered in the title thereof Effects of Registration 1. Mortgage is not valid as between parties *6. Cancel duplicate & new certificate shall be entered by ROD 2. No need to be in public document Registration of Lease It is the lessee. That it is a valid and just obligation 3. Preliminary Garnishment Levy on execution Registration of Attachment/Other Liens 1. who is required to initiate the registration. or attachment upon registered land may be filed with ROD where land lies. May be granted temporary rights for residential purposes 2. ROD to register by way of memorandum upon certificate of title No new certificate shall be issued 3. the name of the registered owner and a reference to the number of the certificate of title shall be registered in ROD 2.(date. etc. ROD to note on the deed the date and time of filing. ROD thereafter enters in a more detailed form the essential contents of the instrument in the Chattel Mortgage Register (complementary process) Effects of Registration 1. Certified copy of decree shall be presented to ROD and surrender duplicate certificate *8. No duplicate need be issued Registration of Chattel Mortgage 1. 3. c.. Execution of document 2. and reference to volume and page of the registration book in which it was registered 3. If instead of registration. Express Trust: instrument creating the trust does not prohibit registration Registration of Appointed Trustee by Court *7. Implied Trust: present a sworn statement claiming interest by reason of an implied trust with description of land. or effects of the defendant to satisfy demands of the plaintiff Kinds: b. Constructive notice of his interest in the property to the whole world Effects of Failure to Register *1. not the lessor. INVOLUNTARY DEALINGS Transactions affecting land in which cooperation of registered owner is not needed. File with ROD the instrument creating lease together with owner’s duplicate of certificate of title 2. credits.

2. 1996] Claim is adverse when: 1. PD 1529) A mere money claim cannot be registered as an adverse claim.whom property is held or in whose name stands in the records 3. Officer’s return shall be submitted to the ROD together with the owner’s duplicate title 2. actual knowledge is the same as registration aa Execution Sale To enforce a lien of any description on registered land. the ROD shall report the matter to the court c. [258 SCRA 79. The court. CA. 70. A claimant’s right or interest in the registered land is adverse to the registered owner. Sale cannot affect rights of other lien holders unless given the right to defend their rights: due process must be e. send notice to registered owner by mail stating that there has been registration and request him to produce duplicate so that memorandum may be made b. If duplicate of certificate of title is not presented: a. and local dialect. shall enter an order to owner to surrender certificate at the time and place named therein 4. Adverse claimant must state the following in writing: 1. Publication of notice must also be made in English. Sajonas v. 1976] Actual knowledge is equivalent to registration of adverse claim. If it is not registered. Sanchez v. one that is registered earlier is preferred 4. No other provision is made in the Decree for the registration of such right or claim (Sec. The description of the land in which the right or interest is claimed . Memorandum shall be entered in the certificate as an adverse claim or encumbrance 4. ROD shall. No 2nd adverse claim based on the same ground may be registered by the same claimant. Such right arose subsequent to date of original registration 3. f. Has priority over execution sale 3. But between 2 attachments. Although notice of attachment is not noted in duplicate. In personam (all persons interested shall be notified so that they may be given an opportunity to be heard) b. His alleged right or interest 2. CA. Notice to be given to delinquent tax payer at his last known address c. Spanish. After the period of redemption has expired and no redemption was made (2 years from registration of auction sale). Before the cancellation. But the sale of registered land to foreclose a tax lien needs to be registered Procedure of Registration of Tax Sale 1. after notice. The disputed land is subject to the outcome of the dispute. strictly observed attachment Tax lien is superior to an There is no need to register a tax lien because it is automatically registered once the tax accrues g. [69 SCRA 327. Register in the registration book 3. any execution or affidavit to enforce such lien shall be filed with ROD where land lies Register in registration book & memorandum upon proper certificate of title as adverse claim or as an encumbrance To determine preferential rights between 2 liens: priority of registration of attachment aa Tax Sale Sale of land for collection of delinquent taxes and penalties due the government a. Formal Requisites of an Adverse Claim for Purposes of Registration (WNR) a. Creates real right 2. notation in book of entry of ROD produces the effect of registration already. posted in a public and conspicuous place in the place where the property is situated and at the main entrance of the provincial building d. within 36 hours. How and under whom such alleged right or interest is acquired 3. Effects of Registration of Attachment (REEA) 1. If the owner neglects or refuses to comply. notice shall be sent to registered owner. title must be cancelled and a new title will be issued 5. with the directive that he surrender title and show cause why it should not be cancelled aa Adverse Claim A notice to third persons that someone is claiming an interest on the property or has a better right than the registered owner thereof.

after notice and hearing. When the consequences of the trial are unnecessarily delaying the determination of the case to the prejudice of the other party 4. Deemed cancelled when certificate issued by clerk of court stating manner of disposal of proceeding is registered When Lis Pendedns has no Application: (P2LAR) 1. To quiet title thereto 3. and whatever rights they may acquire in the property in any voluntary transaction are subject to the results of the . or warn all people who deal with the property that they so deal with it at their own risk. the interested party must file with the proper court a petition for cancellation of adverse claim. For partition. Ty Sin Tei v. the notice of adverse claim may be validly cancelled after the registration of such notice. ROD is duty-bound to carry over notice of lis pendens on all new titles to be issued Cancellation of Lis Pendens: (M-NUVD) • Before final judgment. To remove clouds upon the title thereof 4. Before the lapse of said 30 days. [298 SCRA 388. After the lapse of 30 days. Ong. when a party-in-interest files a petition in the proper RTC for the cancellation of the adverse claim and. Impossibility of alienating the property in dispute during the pendency of the suit 2. The Register of Deeds cannot on its own automatically cancel the adverse claim. After showing that notice is only for purpose of molesting an adverse party 2. Any other proceeding of any kind in court directly affecting the title to the land or the use of occupation thereof or the building thereon. To recover possession of real estate 2. Before the lapse of the 30-day period. and a hearing must also first be conducted. the court may order the cancellation: 1. upon the filing by the claimant of a sworn petition withdrawing his adverse claim c. [152 SCRA 253. Villaflor v. upon the filing by the party-in-interest of a verified petition for such purpose b. and 5. If the court also finds the claim to be frivolous. 1998] An adverse claim may exist concurrently with a subsequent annotation of a notice of lis pendens. PERIOD OF EFFECTIVITY. Juezan. 1958] When an adverse claim exists concurrently with a notice of lis pendens. [103 Phil 858. Proceedings for the probate of wills 3. c. the court finds that the claim is invalid. Preliminary attachment 2. When it is shown that it is not necessary to protect the right of the party who caused the registration thereof 3. Effect of Registration: 1. Diaz-Duarte v. WHEN CANCELLED The adverse claim shall be effective for a period of 30 days from the date of registration and it may be cancelled: a. It may still be alienated but the purchaser is subject to the final outcome of pending suit 3. Heirs of Marasigan v. Proceedings in which the only object is the recovery of a money judgment Other Parties Required to Register: 1.000 pesos. The certificate of title number Such statement must be signed and sworn to before a notary public Claimant shall state his residence or place to which all notices may be served upon him action. and may well be inferior and subordinate to those which may be finally determined and laid down therein. Assignee in Involuntary Proceeding for Insolvency It is the duty of the officer serving the notice to file a copy of such notice to ROD where the property of the debtor is located Assignee elected or appointed by court shall be NOTE: Noncompliance with said formal requisites renders such adverse claim non-registrable and ineffective. Dy Piao. ROD may also cancel by verified petition of party who caused such registration 5. 1990] NOTICE OF LIS PENDENS It merely creates a contingency and not a lien The purpose of the notice of lis pendens is to constructively advise. 4. Proceedings for administration of estate of deceased persons and 5. since the notice of lis pendens also serves the purpose of the adverse claim. 1987] When Notice of Lis Pendeds is Proper: (RQCPO) 1. [184 SCRA 315. IAC. it may fine the claimant the amount of not less than 1. in its discretion For this purpose.b. Levies on execution 4.000 pesos nor more than 5.

System of registration for unregistered land under the Torrens System (Act 3344) b. Memorandum shall be made or new certificate of title shall be issued c. The objective of the proceeding is the adjudication of title to the lands involved in the proceeding G. If found in order. Reason: no strict investigation involved e. The government does not seek registration of the land in its own name d. it binds 3rd persons after registration but yields to better rights of 3rd person prior to registration (limited effect to 3rd parties) d. order shall also be registered b. ROD keeps day book and a register. certificate number. Effect: if prospective. Copy of judgment filed in ROD which states description of property. Government in Eminent Domain a. Procedure: 1. Presentment of instrument dealing in unregistered land 2.entitled to entry of a new certificate of registered land upon presentment of copy of assignment with the bankrupt’s duplicate certificate of title New certificate shall not state that it is entered into by him as assignee or trustee in insolvency proceedings Judgment/Order Vacating Insolvency Proceedings a. Subsequent dealings are also valid if recorded f. DEALINGS WITH UNREGISTERED LAND SYSTEM OF REGISTRATION FOR UNREGISTERED LANDS a. nature of public use b. interest expropriated. it only covered voluntary dealings. Before. register 3. and an index system is also kept g. then registration is refused writing his reason for refusal . it includes involuntary dealings c. If found defective. Surrender title issued in name of assignee & debtor shall be entitled to entry of new certificate 2. Now.

all who did not oppose Appeal Filing of OPPOSITION By any party claiming interest On/ before hearing OR time allowed by court FINALITY OF JUDGMENT Decree of finality Instruction to LRA to issue decree of registration Entry of DECREE OF REGISTRATION in LRA Copy sent to Registrar of Deeds OCT Transcription of the decree and issuance of the OCT .FILING of APPLICATION Survey plan approved by Bureau of Lands Muniments of title SETTING OF DATE of Initial Hearing by court order Set 45-90 days from order ANNEX A: ORDINARY LAND REGISTRATION PROCEEDINGS Transmittal of documents and evidence to LRA NOTICE of Initial Hearing Publication .1x in OG 1x in newspaper Mailing .(14) days at least before initial hearing INITIAL HEARING JUDGMENT TRIAL same order as ordinary civil proceedings (15) days Order of Default named parties w/in (7) days from OG Posting .

Of Lands to cause cadastral survey NOTICE of Survey to Geodetic Engineer/ employees of Bureau of Lands inform occupants/ persons claiming Instituted by Dir.CADASTRAL SURVEY STATE FILES PETITION HEARING JUDGMENT DECREE President orders Dir. of Lands (represented by Sol-Gen) Containing: technical description survey plan ANSWER to Petition Any claimant files answer (partakes of an action to recover) on/ before hearing OR time allowed by court Same as ordinary land reg. proceedings Appeal Court may issue writ of possession or order demolition interest Persons claiming interest cooperate w/ Engineer re: boundaries persons appearing to claim interest Publication – 1x in OG Mailing Posting NOTICE of Initial Hearing to parties appearing to have interest and adjoining owners Publication – 2x in OG (successive issues) Mailing Posting MOTION TO DISMISS If land covered prior OCT pursuant to land patent if barred by res judicata ANNEX B: CADASTRAL REGISTRATION PROCEEDINGS .

Act or omission 2. Causal connection between damage done and act/omission NEGLIGENCE The omission of that degree of diligence which is required by the nature of the obligation and corresponding to the circumstances of the persons. Such fault or negligence. liability to pay moral damages may not be imposed on the defendant who acted in good faith. Unjust enrichment C. CONCEPT OF VICARIOUS LIABILITY A person who himself is not guilty of negligence is made liable for the conduct of another II. For the sole intent of prejudicing or injuring another • Common element under Articles 19 and 21: the act must be intentional • • An action can only prosper when damage. (1902a) ELEMENTS OF QUASI DELICT/TORTS: 1. According to manner of commission: intentional. 356 RPC) 3. negligent and strict liability B. Such fault or negligence. Acts contrary to morals II. NOTE: QUASI DELICT includes acts done through FAULT. 1173. Liability without fault D. Damage or injury is caused to another 3. Classification of Torts A. (Art. And it is done with intent to injure Damages are recoverable even if no positive law has been violated UNJUST ENRICHMENT ELEMENTS: a. Acts contrary to law E. TORTS ================================= TOPICS UNDER THE SYLLABUS I. is obliged to pay for the damage done. INTENTIONAL (DELICT): Every person criminally liable for a felony is also civilly liable. the act may be done either willfully or negligently CONTRA BONUS MORES (ART 21) 1. Contractual negligence (NCC provisions on contracts particularly Arts. An action based on Articles 19-21 will be dismissed if the plaintiff merely seeks “recognition” A defendant may likewise be guilty of tort under Articles 19-21 even if he acted in good faith. That such benefit is derived at another’s expense or damage. Criminal negligence (Art. The right or duty is exercised in bad faith 3. and b. But which is contrary to morals. if there is no pre-existing contractual relation between the parties. CLASSIFICATION OF TORTS COMISSION OF TORTS 1. According to scope: general or specific ================================= I. 2. 1170 to 1174) ABUSE OF RIGHTS (ART 19) 1. good custom. was suffered by the plaintiff. CIVIL LAW REVIEWER Page 52 of 401 .O. Principles A. That a person is benefited without a valid basis or justification. public order or public policy 3. 2176 NCC) 2. material or otherwise. 2176. elements B. PRINCIPLES Art. time and place. Abuse of right. is obliged to pay for the damage done. Fault or negligence is present 4. NCC) KINDS OF NEGLIGENCE 1. if there is no preexisting contractual relation between the parties. There is a legal right or duty 2. Here. There is no pre-existing contractual relations between the parties 5. 20) • For all other provisions of law which do not especially provide their own sanction • In the exercise of his legal right or duty • Willfully or negligently causes damage to another • Article 20 does not distinguish. there being fault or negligence. is called a quasi-delict and is governed by the provisions of this Chapter. GENERAL SANCTION (ART. NEGLIGENT (QIUASI DELICT): Whoever by act or omission causes damage to another. Quasi delict (Art. there being fault or negligence. Whoever by act or omission causes damage to another. There is an act which is legal 2.

Persons made responsible for others (1) In General (a) Quasi-delicts under Article 2180. whenever a tortious act is committed by an officer or agent under express direction or authority from the stockholders or members acting as a body. and whether the servant or agent be a natural or artificial person. the rules governing the liability of a principal or master for a tort committed by an agent or servant are the same whether the principal or master be a natural person or a corporation. 2194. because "generally CIVIL LAW REVIEWER Page 53 of 401 . CORPORATE TORTFEASOR A corporation is civilly liable in the same manner as natural persons for torts. there being no fault or negligence is obliged to pay for the damage done (art 2176). Joint tortfeasors (Art.3. 221 (b) Indirect liability for intentional acts (c) Presumption of negligence on persons indirectly responsible (d) Nature of liability. generally. To avoid liability for a quasi-delict committed by its employee. from the directors as the governing body. an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee EXCEPTION: The doctrine of respondeat superior is applicable in: a. Employers or parents are made liable not only because of the negligent or wrongful act of the person for whom they are responsible but also because of their own negligence (i. Common Carriers. PERSONS VICARIOUSLY LIABLE – the obligation imposed in 2176 is demandable not only for one’s own act or omission but also for those persons for whom one is responsible (art 2180). therefore. and this is just as true of a corporation as of a natural person. Liability of a partnership for the tort committed by a partner WHO ARE LIABLE: THE PERSONS VICARIOUSLY ================================= TOPICS UNDER THE SYLLABUS III. 2176 on Quasi-Delict SPECIFIC TORTS: These are those found in specific provisions of law. joint or solidary? (2) In Particular (a) Parents (b) Guardian (c) Owners and managers of establishments and enterprises (d) Employers (e) State (f) Teachers and heads of establishments of arts and trades C. TORTFEASOR TORTFEASOR . The Tortfeasor A. STRICT LIABILITY: Persons Expressly Made Liable By Law Even without Fault ACCORDING TO SCOPE GENERAL TORTS: Covered by Art. All of the authorities agree that a principal or master is liable for every tort which he expressly directs or authorizes. Liability of employers under Article 103 of the RPC b.e. Civil Code) ================================= III. Arts. The direct tortfeasor (1) Natural persons (2) Juridical persons B. etc. A corporation is liable. liability is imposed on the employer because he failed to exercise due diligence in the selection and supervision of his employees) Whenever an employee’s negligence causes damage or injury to another.Whoever by act or omission causes damage to another. including the Chapter on Human Relations. speaking. how interpreted – Family Code. VICARIOUS LIABILITY – A person who himself is not guilty of negligence is made liable for the conduct of another NOTE: Vicarious liability is not governed by the doctrine of respondeat superior. there instantly arises a presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. or. 218-219.

father's decision shall prevail (Art. Those exercising substitute parental authority b.The school. STATE . entity or institution).1. It’s not necessary for the students to board and live with the teachers so that there can be custody over them.The state is responsible when it acts through a special agent. instruction or custody (authority & responsibility shall apply to all authorized activities whether inside or outside the premises or the school. 211). but not when the same is caused by an official to whom task done properly pertains in which case Art 2176 is applicable 6. NOTE: Persons liable for the act of minors other than parents: a. 1957] TEACHER’S LIABILITY: The basis of the teacher’s liability is the principle of loco parentis (stand in place of parents).R. So long as the students remain in the protective and supervisory capacity of teachers. GUARDIANS Guardians are liable for damages caused by the minor or incapacitated persons who are under their authority and who live in their company. the mother are responsible for damage caused by minor children who live in their company. Exconde v. No. 218 of Family Code – schools are expressly made liable • School is liable as an employer. 3. Art 219 . CA. June 29. 2180 applies to all including academic institution per weight of jurisprudence based on obiter of Justice JBL Reyes in the Exconde case. over 21 years old unless unfit or disqualified 2. EMPLOYERS Employers shall be liable for damages caused by their: o employees and o household helpers who are acting w/in the scope of their assigned task even though the former are not engaged in any business or industry (unlike in RPC – subsidiary liability of employer attaches in case of insolvency of employer for as long as the employer is engaged in business/industry) DEFENSES AVAILABLE TO EMPLOYERS: o exercise of due diligence ins election and supervision of employees o act/omission was made outside working hours and in violation of company rules 5. Oldest sibling. as in the case where the tortfeasor is a teacher. PARENTS The father. St. the school is liable for the breach of the contract. In case of disagreement. Francis High vs. OWNERS & MANAGERS OF ESTABLISHMENT/ ENTERPRISE .Those given the authority & responsibility shall be solidarily CIVIL LAW REVIEWER Page 54 of 401 . students & apprentices as long as they remain in their custody even if they are beyond the age of majority NOTE: Art. Family Code. TEACHER . SCHOOL ADMINISTRATOR. Father and Mother shall jointly exercise parental authority over common children. Surviving grandparents c. b. and thus. Capuno. if the tortfeasor is a stranger. PSBA cs. Art 218 .Teachers or heads of establishments of arts & trades shall be liable for damages caused by their pupils. Child’s actual custodian. [194 SCRA 341] • School has a contract with the student. Family Code. and in case of his death or incapacity. over 21 years old unless unfit or unqualified d. L-10134. an employee of the school. the latter shall be deemed to have custody over the students. SCHOOL’S LIABILITY: GENERAL RULE: The School itself is NOT liable as party defendants EXCEPTIONS: Art. [G. CA.Owners & managers of establishment or enterprise are responsible for damages caused by their employees who are: o in the service of the branches in which the latter are employed OR o in occasion of their function 4. [205 SCRA 729] FAMILY CO