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C IVIL L AW

The Law on Persons and Family Relations


Course Outline
I.

Preliminary Title; Human Relations; Personality; Domicile;

Art. 2 NCC; Art.5 Labor Code; Sec. 3(1) & 4, Ch. 2, Book VII,
Administrative Code of 1987; BSP Circular 799
Effects and application of law
Tanada vs Tuvera, 136 SCRA 27 (1985)
Article 2 of the NCC does not preclude the requirement of publication in
the Official Gazette even if the law itself provides for the date of its
effectivity.
Tanada vs Tuvera,146 SCRA 446 (1986)
If the law provides for its own effectivity date, then it takes effect on the
said date, subject to the requirement of publication. The clause unless
otherwise provided refers to the date of effectivity and not the to the
requirement of publication itself, which cannot in any event be omitted.
Basa vs M ercado, 61 Phil 632
To be a newspaper of general circulation, it is enough that it is published
for the dissemination of local news and general information, that it has
bona fide subscription list of paying subscribers, and that it is published
at regular intervals.
PASEI vs. Torres, G.R. NO. 101279,Aug. 06, 1992 212 SCRA 298
Although the questioned circulars are a valid exercise of the police power
as delegated to the executive branch of Government, they are legally
invalid, defective and unenforceable for lack of proper publication and
filing in the Office of the National Administrative Register as required in
Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1)
and 4, Chapter 2, Book VII of the Administrative Code of 1987
Rep. vs. Extelcom, G.R. NO. 147096,Jan. 15, 2002 373 SCRA 316
Thus, publication in the Official Gazette or a newspaper of general
circulation is a condition sine qua non before statutes, rules or
regulations can take effect. There is nothing in the Administrative Code
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of 1987 which implies that the filing of the rules with the UP Law Center
is the operative act that gives the rules force and effect.
Cojuangco, Jr. vs. Rep., G.R. NO. 180705, Nov. 27,2012 686 SCRA
472
In this case, while it incorporated the PCA-Cojuangco AG.R.eement by
reference, Section 1 of P.D. 755 did not in any way reproduce the exact
terms of the contract in the decree. Neither was acopy thereof attached to
the decree when published. We cannot, therefore, extend to the said
AG.R.eement the status of a law.
NMSM I vs. DND,G.R. NO. 187587,June 5, 2013 697 SCRA 359
The Court cannot rely on a handwritten note that was not part of
Proclamation No. 2476 as published. Without publication, the note never
had any legal force and effect.
Roy vs CA, G.R. NO 80718 Jan. 29, 1988
The term laws do not include decisions of the Supreme Court because
lawyers in the active practice must keep abreast of decisions, particularly
where issues have been clarified, consistently reiterated and published in
advanced reports and the SCRA.

Arts.3, 4, 5, 6, 7 NCC; Arts. 105, 256 Family Code; Vested Rights;


Substantive & Procedural Laws; Retroactive Application; Express
and Implied Repeal; Effect of declaration of Unconstitutionality
Marcella-Bobis vs Bobis, 336 SCRA 747 (2000)
The accused is prosecuted for the crime of bigamy for not obtaining a
judicial declaration of nullity of his first marriage before entering into
another marriage. Ignorance of the existence of article 40 of the Family
Code canno enve be successfully invoked as an excuse.
Bernabe v. Alejo G.R. NO. 140500, Jan. 21, 2002 374 SCRA 180
An illegitimate child filed an action for recognition pursuant to article
285 of the NCC during the effectivity of the Family Code. illegitimate
children who were still minors at the time the Family Code took effect
and whose putative parent died during their minority are thus given the
right to seek recognition (under Article 285 of the Civil Code) for a period
of up to four years from attaining majority age and this vested right was
not impaired or taken away by the passage of the Family Code.
Rep. v. M iller G.R. NO. 125932, Apr. 21, 1999 306 SCRA 183
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Whether or not, an alien, who is qualified to adopt at the time of filing


the petition, can be disqualified by the new provisions of the family code.
An alien qualified to adopt under the Child and Youth Welfare Code,
which was in force at the time of the filing of the petition, acquired a
vested right which could not be affected by the subsequent enactment of
a new law disqualifying him. Vested rights include not only legal or
equitable title to the enforcement of a demand, but also an exemption
from new obligations created after the right has vested.
Atienza vs. Brillantes, AM M TJ 92-706, M ar. 29,1995 243 SCRA 32
Article 40 is applicable to remarriages entered into after the effectivity of
the Family Code on August 3, 1988 regardless of the date of the first
marriage. The fact that procedural statutes may somehow affect the
litigants' rights may not preclude their retroactive application to pending
actions.
Ty v. Cam G.R. NO. 127406, Nov. 27, 2000
The two marriages involved in this case was entered during the effectivity
of the New Civil Code. The Family Code has retroactive effect unless there
be impairment of vested rights.
Compare the case of TY vs CA and Atienza vs Brillantes
Systems Factors Corp vs NLRC, 346 SCRA 149 (2000)
The retroactive application of procedural laws is not violative of any right
of a person who may feel that he is adversely affected. The reason is that
as a general rule, no vested right may attach nor arise from procedural
laws.
Agujetas vs CA, 261 SCRA 17 (1996)
Implied repeals are not to be favored because they rest only on the
presumption that because the old and the new laws are incompatible
with each other, there is an intention to repeal the old. There must be a
plain, unavoidable and irreconcilable repugnancy between the two.
Laguna Lake Development Authority vs CA, 251 SCRA 42 (1995)
When there is a conflict between a general law and a special statute, the
special statute should pre vail since it evinces the legislative intent more
clearly than the general statute. The special law is to be taken as an
exception to the general law in the absence of special circumstances
forcing a contrary conclusion.
De Agbayani vs PNB, 38 SCRA 429
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The Supreme Court declared the moratorium law unconstitutional but it


did not allow to toll the prescriptive period of the right to foreclose the
mortgage. The court adopted the view that before an act is declared
unconstitutional it is an operative fact which can be the source of rights
and duties.

Article 8. Stare Decisis; Case Law; See also Article 36, FC; article 9,
10, 11, 12 , 13, 14 NCC

Ting v. Velez-Ting, G.R. NO. 166562, M ar. 31, 2009 582 SCRA 694
The rule of stare decisis is not inflexible, whether it shall be followed or
departed from, is a question entirely within the discretion of the court,
which is again called upon to consider a question once decided. It is only
when a prior ruling of this Court is overruled, and a different view is
adopted, that the new doctrine may have to be applied prospectively in
favor of parties who have relied on the old doctrine and have acted in
good faith, in accordance therewith under the familiar rule of "lex
prospicit, non respicit
Floresca vs Philex Mining Corp.,G.R. 30642, April 30, 1985
The application or interpretation placed by the Supreme Court upon a
law is part of the law as of the date of its enactment since the courts
application or interpretation merely establishes the contemporaneous
legislative intent that the construed law purports to carry into effect.

Mendiola vs CA, 258 SCRA 492


Equity, which has been described as justice outside legality is applied
only in the absence of, and never against statutory law or judicial rules
of procedure.
Articles 15, 16, 17, 50, 51 (New Civil Code); Article 26, Family Code
DAVID A. NOVERAS vs. LETICIA T. NOVERAS, G.R. No. 188289,
August 20, 2014
David and Leticia are US citizens who own properties in the USA and in the
Philippines. Leticia obtained a decree of divorce from the Superior Court of
California in June 2005 wherein the court awarded all the properties in the USA to
Leticia. The trial court erred in recognizing the divorce decree The foreign
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judgment and its authenticity must be proven as facts under our rules on evidence,
together with the aliens applicable national law to show the effect of the judgment
on the alien himself or herself. The recognition may be made in an action instituted
specifically for the purpose or in another action where a party invokes the foreign
decree as an integral aspect of his claim or defense. With respect to their properties
in the Philippines, Leticia filed a petition for judicial separation of conjugal
properties. The Court ruled that the Philippine courts did not acquire jurisdiction
over the California properties of David and Leticia. Indeed, Article 16 of the Civil
Code clearly states that real property as well as personal property is subject to the
law of the country where it is situated. Thus, liquidation shall only be limited to the
Philippine properties.
NORMA A. DEL SOCORRO, for and in behalf of her minor child RODERIGO
NORJO VAN WILSEM, vs. ERNST JOHAN BRINKMAN VAN WILSEM, G.R. No.
193707 , December 10, 2014
A foreigner was sued for support. The Supreme Court ruled that Article 195 of the
New Civil Code cannot apply to him, since Article 15 of the New Civil Code stresses
the principle of nationality. Philippine laws, specifically the provisions of the Family
Code relating to support, only apply to Filipino citizens. By analogy, the same
principle applies to foreigners such that they are governed by their national law
with respect to family rights and duties. Be that as it may, the accused, who is
residing in the Philippines, was held liable under under Section 5(e) and (i) of R.A.
No. 9262 for unjustly refusing or failing to give support to petitioners son on since
respondent is currently living in the Philippines, on the basis of the Territoriality
Principle in criminal law, in relation to Article 14 of the New Civil Code, applies to
the instant case, which provides that: "[p]enal laws and those of public security and
safety shall be obligatory upon all who live and sojourn in Philippine territory,
subject to the principle of public international law and to treaty stipulations."
NORMA A. DEL SOCORRO for and in behalf of her Minor Child RODERIGO
NORJO VAN WILSEM vs. ERNST JOHAN BRINKMAN VAN WILSEM, G.R. No.
193707, December 10, 2014

SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA VS. MA. JOPETTE M.


REBESENCIO MONTASSAH B. SACAR-ADIONG ET. AL. G.R. NO. 198587. January
14, 2015
Under the doctrine of processual presumption, if the foreign law involved is not
properly pleaded and proved, our courts will presume that the foreign law is the
same as our local or domestic or internal law. Hence, pleading a foreign law without
proving the same will bar its application in the Philippines
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All told, the considerations for assumption of jurisdiction by Philippine tribunals as


outlined in Bank of America, NT&SA have been satisfied. First, all the parties are
based in the Philippines and all the material incidents transpired in this jurisdiction.
Thus, the parties may conveniently seek relief from Philippine tribunals. Second,
Philippine tribunals are in a position to make an intelligent decision as to the law
and the facts. Third, Philippine tribunals are in a position to enforce their decisions.
There is no compelling basis for ceding jurisdiction to a foreign tribunal. Quite the
contrary, the immense public policy considerations attendant to this case behoove
Philippine tribunals to not shy away from their duty to rule on the case.

Van Dorn vs. Romillo G.R. NO.L-68470 October 8, 1985 139 SCRA
139
It is true that owing to the nationality principle embodied in Article 15 of
the Civil Code, only Philippine nationals are covered by the policy against
absolute divorces the same being considered contrary to our concept of
public policy and morality. Howe ver, aliens may obtain divor ces abroad,
which may be recognized in the Philippines, provided they are valid
according to their national law.
Pilapil vs. Ibay-Somera, G.R. NO. 80116 June 30, 1989 174 SCRA
652
Whether or not, the complainant, a foreigner, qualify as an offended
spouse having obtained a final divorce decree under his national law
prior to his filing the criminal complaint. The person who initiates the
adultery case must be an offended spouse, and by this is meant that he
is still married to the accused spouse, at the time of the filing of the
complaint.
Recio vs. Recio G.R. NO. 138322. October 2, 2001 366 SCRA 437
Whether or not the divorce must be proved before it is to be recognized
in the Philippines. Before a foreign divorce decree can be recognized by
our courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it. Presentation
solely of the divorce decree is insufficient.
Roehr v. Rodriguez,G.R. NO. 142820 ,Jun. 30, 2003 404 SCRA 495
As a general rule, divorce decrees obtained by foreigners in other
countries are recognizable in our jurisdiction, but the legal effects
thereof, e.g. on custody, care and support of the children, must still be
determined by our courts.
Morigo v. People, G.R. NO. 145226 , Feb. 6, 2004 422 SCRA 376
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The mere private act of signing a marriage contract bears no semblance


to a valid marriage and thus, needs no judicial declaration of nullity.
Such act alone, without more, cannot be deemed to constitute an
ostensibly valid marriage for which petitioner might be held liable for
bigamy unless he first secures a judicial declaration of nullity before he
contracts a subsequent marriage. (Pro hac vice case)
Rep. v. Orbecido, G.R. NO. 154380, Oct. 05, 2005 472 SCRA 114
Whether or not, a Filipino Spouse can remarry under ARTICLE 26 OF
THE FAMILY CODE where his,her spouse is later naturalized as a foreign
citizen and obtains a valid divorce decree capacitating him or her to
remarry. The reckoning point is not the citizenship of the parties at the
time of the celebration of the marriage, but their citizenship at the time a
valid divorce is obtained abroad by the alien spouse capacitating the
latter to remarry.
Corpuz v. Sto. Tomas, G.R.NO. 186571, Aug. 11, 2010 628 SCRA
266
In Gerberts case, since both the foreign divorce decree and the national
law of the alien, recognizing his or her capacity to obtain a divorce,
purport to be official acts of a sovereign authority, Section 24, Rule 132
of the Rules of Court comes into play. This Section requires proof, either
by (1) official publications or (2) copies attested by the officer having legal
custody of the documents. If the copies of official records are not kept in
the Philippines, these must be (a) accompanied by a certificate issued by
the proper diplomatic or consular officer in the Philippine foreign service
stationed in the foreign country in which the record is kept and (b)
authenticated by the seal of his office.
Human Relations; Abuse of Rights, Unjust Enrichment; M alicious
Prosecution; Independent Civil Action; Arts. 1724; 2142; 2154;
2164; 2176, NCC
SPOUSES ALEJANDRO MANZANILLA AND REMEDIOS VELASCO v WATERFIELDS
INDUSTRIES CORPORATION, represented by its President, ALIZA MA. G.R No.
177484, July 18, 2014. J. DEL CASTILLO
Waterfields Corp. and the spouses Manzanilla entered into a contract of lease. When
Waterfields breached the contract by failing to pay rent, the lessors brought an
ejectment suit. Waterfields claims that if it was ejected prior to the expiration of the
lease, it would be tantamount to unjust enrichment as Waterfields already
introduced substantial improvements on the property.
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The principle of unjust enrichment requires two conditions: (1) that a person is
benefited without a valid basis or justification, and (2) that such benefit is derived at
the expense of another.
It does not, however, apply in this case since any benefit that the spouses Manzanilla
may obtain from the subject premises cannot be said to be without any valid basis
or justification. It is well to remind Waterfields that they violated the contract of
lease and that they failed to vacate the premises upon demand. Hence, the spouses
Manzanilla are justified in recovering the physical possession thereof and
consequently, in making use of the property. Besides, in violating the lease by failing
to pay the rent, Waterfields took the risk of losing the improvements it introduced
thereon in favor of the spouses Manzanilla.
RAUL SESBRENO VS. COURT OF APPEALS, G.R. No. 160689 March 26, 2014, J.
BERSAMIN
This case concerns the claim for damages of petitioner Raul H. Sesbreo founded on abuse
of rights. Sesbreo accused the violation of contract (VOC) inspection team dispatched by
the Visayan Electric Company (VECO) to check his electric meter with conducting an
unreasonable search in his residential premises. It is worth noting that the VOC inspectors
decided to enter the main premises only after finding the meter of Sesbreo turned upside
down, hanging and its disc not rotating. Their doing so would enable them to determine the
unbilled electricity consumed by his household. The circumstances justified their decision,
and their inspection of the main premises was a continuation of the authorized entry.

Although the act is not illegal, liability for damages may arise should there be an
abuse of rights. The concept of abuse of rights prescribes that a person should not
use his right unjustly or in bad faith; otherwise, he may be liable to another who
suffers injury. There is an abuse of rights if when the act is performed without
prudence or in bad faith. In order that liability may attach under the concept of
abuse of rights, the following elements must be present, to wit: (a) the existence of a
legal right or duty, (b) which is exercised in bad faith, and (c) for the sole intent of
prejudicing or injuring another. There is no hard and fast rule that can be applied to
ascertain whether or not the principle of abuse of rights is to be invoked. The
resolution of the issue depends on the circumstances of each case.
However, Sesbreo did not persuasively demonstrate that there was an intervention
of malice or bad faith on the part of (VOC) inspection team during the inspection of
the main premises, or any excessiveness committed by them in the course of the
inspection. But Sesbreo did not. On the other hand, the CA correctly observed that
the inspection did not zero in on Sesbreos residence because the other houses
within the area were similarly subjected to the routine inspection. The court
eliminated any notion of malice or bad faith.
WILLAWARE PRODUCTS CORPORATION vs. JESICHRIS MANUFACTURING
CORPORATION, G.R. No. 195549, September 3, 2014, J. Peralta
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The issue for resolution is: whether or not petitioner committed acts amounting to
unfair competition under Article 28 of the Civil Code.The instant case falls unde r
Article 28 of the Civil Code on human relations, and not unfair competition under
Republic Act No. 8293, as the present suit is a damage suit and the products are not
covered by patent registration. A fortiori, the existence of patent registration is
immaterial in the present case.
The concept of "unfair competition"under Article 28 is very much broader than that
covered by intellectual property laws. Under the present article, which follows the
extended concept of "unfair competition" in American jurisdictions, the term covers
even cases of discovery of trade secrets of a competitor, bribery of his employees,
misrepresentation of all kinds, interference with the fulfillment of a competitors
contracts, or any malicious interference with the latters business.
Article 28 of the Civil Code provides that unfair competition in agricultural,
commercial or industrial enterprises or in labor through the use of force,
intimidation, deceit, machination or any other unjust, oppressive or high-handed
method shall give rise to a right of action by the person who thereby suffers damage.
What is being sought to be prevented is not competition per se but the use of unjust,
oppressive or highhanded methods which may deprive others of a fair chance to
engage in business or to earn a living. Thus, when a manufacturer of plastic
kitchenware products employed the former employees of a neighboring partnership
engaged in the manufacture of plastic automotive parts; deliberately copied the
latters products and even went to the extent of selling these products to the latters
customers, there is unfair competition.

CARLOS A. LORIA vs. LUDOLFO P. MUOZ, G.R. No. 187240, October 15, 2014, J.
Leonen
The principle of unjust enrichment has two conditions. First, a person must have
been benefited without a real or valid basis or justification. Second, the benefit was
derived at another persons expense or damage. In this case, Loria received
P2,000,000.00 from Muoz for a subcontract of a government project to dredge the
Masarawag and San Francisco Rivers in Guinobatan, Albay. However, contrary to the
parties agreement, Muoz was not subcontracted for the project. Nevertheless,
Loria retained the P2,000,000.00. Thus, Loria was unjustly enriched. He retained
Muozs money without valid basis or justification. Under Article 22 of the Civil
Code of the Philippines, Loria must return the P2,000,000.00 to Muoz.
DOMINGO GONZALO VS.JOHN TARNATE JR., G.R. NO. 160600, JANUARY 15,
2014, J. Bersamin
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Gonzalo, who was the sole contractor of the project in question, subcontracted the
implementation of the project to Tarnate in violation of the statutory prohibition.
Their subcontract was illegal because it did not bear the approval of the DPWH
Secretary. Necessarily, the deed of assignment was also illegal, because it sprung
from the subcontract. Thus, Tarnate and Gonzalo entered into an illegal contract.
While it is true that under Article 1412 (1) of the Civil Code, the guilty parties to an
illegal contract cannot recover from one another and are not entitled to an
affirmative relief because they are in pari delicto or in equal fault, the doctrine of in
pari delicto is not always rigid.
An accepted exception arises when its application contravenes well-established
public policy. In this jurisdiction, public policy has been defined as "that principle of
the law which holds that no subject or citizen can lawfully do that which has a
tendency to be injurious to the public or against the public good."
Under the principle of unjust enrichment exists then, Gonzalo would be unjustly
enriched at the expense of Tarnate, who provided the materials, if the latter was to
be barred from recovering because of the rigid application of the doctrine of in pari
delicto. The prevention of unjust enrichment called for the exception to apply in
Tarnates favor.
Amonoy vs Gutierrez, 351 SCRA 731 (2001)
One who merely exercises ones rights does no actionable injury and
cannot be held liable for damages.
Albenson Enterprises Corp. vs CA,217 SCRA 18 (1993)
The elements of an abuse of right under article 19are the following: 1.
There is a legal right or duty; 2. Which is exercised in bad faith; 3. For
the sole intent of prejudicing or injuring another.
RCPI vs CA, 143 SCRA 657 (1986)
Dionela filed a complaint for damages against RCPI alleging that the
defamatory words on the telegram sent to him not only wounded his
feelings but also caused him undue embarrassment and affected his
business as well as because other people have come to know of said
defamatory words. There is a clear case of breach of contract by the
petitioner in adding extraneous and libelous matters in the message se nt
to Dionela.
Constantino vs M endez 209 SCRA 18 (1992)
Mere sexual intercourse is not by itself a basis for recovery. Damages
could only be awarded if sexual intercourse is not a product of
voluntariness and mutual desire.
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Gashme Shookat Baksh vs CA,219 SCRA115 (1993)


Where a mans promise to marry is in fact the proximate cause of the
acceptance of his love by a woman and his representation to fulfill that
promise thereafter becomes the proximate cause of the giving of herself
unto him a sexual congress, proof that he had, in reality, no intention of
marrying her and that the promise was only a subtle scheme or deceptive
device to entice or inveigle her to accept him and to obtain her consent to
the sexual act, could justify the award of damages pursuant to article 21
of the new civil code not because of such promise to marry but because
of the fraud and deceit behind it and the wilful injury to her honor and
reputation which followed thereafter.
Figueroa vs. Barranco, SBC Case NO. 519. July 31, 1997 2 76 5CRA
445 - His engaging in premarital sexual relations with complainant and
promises to marry suggests a doubtful moral character on his part but
the same does not constitute grossly immoral conduct.
University of the East vs Jader, G.R. NO. 132344, Feb. 7, 2000 325
SCRA 805
A law student was allowed to graduate by his school with a failing grade
but was later on prohibited by the said school to take the bar exams. The
negligent act of a professor who fails to observe the rules of the school,
for instance by not promptly submitting a student's grade, is not only
imputable to the professor but is an act of the school, being his
employer.

UP v. Philab, G.R. NO. 152411, Sept. 29, 2004 439 SCRA 467
Whether or not UP is liable to pay PHILAB considering that it is only a
donee of FEMF, FEMF being the one which funded the project, and
despite being a donee, unjust enrichment still applies to UP. In order
that accion in rem verso may prosper, the essential elements must be
present: (1) that the defendant has been enriched, (2) that the plaintiff
has suffered a loss, (3) that the enrichment of the defendant is without
just or legal ground, and (4) that the plaintiff has no other action
based on contract, quasi-contract, crime or quasi-delict.
Beumer vs. Amores, G.R. NO. 195670, Dec. 03, 2012 686 SCRA 770
An action for recovery of what has been paid without just cause has been
designated as an accion in rem verso. This provision does not apply if, as

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in this case, the action is proscribed by the Constitution or by the


application of the pari delicto doctrine.
Padalhin vs. Lavia, G.R. NO. 183026,Nov. 14, 2012 685 SCRA 549
Nestor himself admitted that he caused the taking of the pictures of
Lavina's residence without the latter's knowledge and consent. Nestor
violated the New Civil Code prescriptions concerning the privacy of one's
residence and he cannot hide behind the cloak of his supposed
benevolent intentions to justify the invasion.

Civil Personality; Birth; Death; Arts 37, 38, 39 40, 41, 42; 390, 391,
712, 777 NCC; Art. 41, 96 &124, 99 & 126, 142 FC

Geluz vs CA, July 20, 1961


It is unquestionable that the appellants act in provoking the abortion of
appellees wife, without medical necessity to warrant it, was a criminal
and morally reprehensible act, that cannot be to se verely condemned;
and the consent of the woman or that of her husband does not excuse it.
But the immorality or illegality of the act does not justify an award of
damage that, under the circumstances on record, have no factual or legal
basis.
Quimiguing vs ICAO, 34 SCRA 132 (1970
A conceived child, although as yet unborn, is given by law a provisional
personality of its own for all purposes favorable to it, as explicitly
provided under article 40 of the civil code.
Continental Steel v. M ontao, G.R. NO. 182836 , Oct.13, 2009 603
SCRA 621
Whether or not, a death of a fetus is considered a death of a dependent of
the parent. One need not acquire civil personality first before he/she
could die. Even a child inside the womb already has life. No less than
the Constitution recognizes the life of the unborn from conception, that
the State must protect equally with the life of the mother. If the unborn
already has life, then the cessation thereof even prior to the child being
delivered, qualifies as death.

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Domicile; Arts 50 & 51 NCC; Arts. 68 & 69, FC; Residence v.


Domicile; Annulment or Nullity of M arriages AM 02-11-10 SC;
Settlement of Estate
Marriage
Definition, M arriage as contract and social institution, Presumption
of M arriage, Proof of M arriage,Offer of M arriage

Tuazon vs CA, 256 SCRA 158


Our Family Law is based on the policy that marriage is not a mere
contract, but a social institution in which the State is vitally interested.
Perido vs Perido, 63 SCRA 97
It is the union (and inviolable social institution) of one man with one
woman for the reciprocal blessings of a domestic home life, and for the
birth, rearing, and education of children. In one case, the Supreme Court
ruled that marriage is also a new relation in the maintenance of which
the general public is interested.
People v. Casao, 220 SCRA 362
The offer of the accused to marry the victim establishes his guilt. As a
rule in rape cases, an offer of marriage is an admission of guilt
People vs. Borromeo,133 SCRA 106, 109 (1984)
Persons living together in apparent matrimony are presumed, in the
absence of any counter-presumption or evidence special to the case, to
be in fact married. The reason is that such is the common order of
society, and if the parties were not what they thus hold themselves out
as being, they would be living in the constant violation of decency and of
law.
People v. Ignacio, 81 SCAD 138 (1997)
Appellants own admission that she was married to the victim was a
confirmation of the semper praesumitur matrimonio and the presumption
that a man and a woman so deporting themselves as husband and wife
had verily acted into a lawful contract of marriage.

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Proof of M arriage; M arriage Certificate v. Presumption of M arriage;


Torrens Title Entry Single, Civil Status;
Villanueva vs. CA, 198 SCRA 472 (1991)
The best documentary evidence of a marriage is the marriage contract. A
marriage contract renders unnecessary the presumption that a man and
a woman deporting themselves as husband and wife have entered into a
lawful contract of marriage.
Balogbog vs. CA, 269 SCRA 259, 266 (1997)
Although a marriage contract is considered primary evidence of marriage,
the failure to present it is not, however, proof that no marriage took
place, as other evidence may be presented to prove marriage.
People vs. Borromeo, 133 SCRA 106, 110 (1984)
The mere fact that no record of the marriage exists in the registry of
marriage does not invalidate said marriage, as long as in the celebration
thereof, all requisites for its validity are present. The forwarding of a copy
of the marriage certificate to the registry is not one of said requisites.
Pugeda vs. Trias, 4 SCRA 849, 855 (1962)
The defendants questioned the marriage of plaintiff by presenting the
records of the municipality of Rosario, Cavite to show that there is no
record of the alleged marriage. The court admitted evidence consisting of
the testimonies of witnesses.
Trinidad vs. Court of Appeals, et. al., 289 SCRA 188 (1998)
The Supreme Court held that the following may be presented as proof of
marriage: (a) testimony of a witness to the matrimony; (b) the couples
public and open cohabitation as husband and wife after the alleged
wedlock; (c) the birth and baptismal certificate of children born during
such union; and (d) the mention of such nuptial in subsequent
documents.
Hernandez vs. CA, 320 SCRA 76.
The law favors the validity of marriage because the State is interested in
the preservation of the family and sanctity of the family is a matter of
constitutional concern. The burden of proof to show the nullity of the
marriage rests upon the party seeking its nullity
14

Aonuevo v. Estate of Jalandoni G.R. NO. 178221, Dec. 1, 2010 636


SCRA 420
The birth certificate of Sylvia was presented to prove the marriage
between Isabel and John despite the absence of the marriage certificate.
The court held that the birth certificate may serve as evidence to prove
the marriage between Isabel and John , as it contains the following
notable entries: (a) that Isabel and John Desantis were "married" and (b)
that Sylvia is their "legitimate" child.
Villatuya v. Tabalingcos, A.C. NO. 6622 676 SCRA 37
A lawyer was married three times, while the first marriage was still
subsisting, his marriage contracts as certified by the NSO was presented
in the disbarment proceeding to prove his subsequent marriages. For
purposes of disbarment proceeding, these marriage contracts bearing the
name of respondent are competent and convincing evidence proving that
he committed bigamy.
Compare the case of Aonuevo v. Estate of Jalandoni and Villatuya
v. Tabalingcos A.C. NO. 6622 676 SCRA 37
Cario v. Cario, G.R. NO. 132529 , Feb. 02, 2001 351 SCRA 127
Whether or not the certification by the registrar of the non-existence of
marriage license is enough to prove non-issuance thereof. The records
reveal that the marriage contract of petitioner and the deceased bears no
marriage license number and, as certified by the Local Civil Registrar of
San Juan, Metro Manila, their office has no record of such marriage
license.
Requirements of M arriage
Essential requisite
Legal Capacity and Consent
Formal Requisite
Marriage License ; Civil W edding v. Church W edding; Certificate of
Civil Registrar;
Alcantara v. Alcantara, G.R. NO. 167746 , Aug. 28,2007 531 SCRA
446
Whether or not, a marriage license issued by a municipality or city to a
non-resident invalidates the license. Issuance of a marriage license in a
15

city or municipality, not the residence of either of the contracting parties,


and issuance of a marriage license despite the absence of publication or
prior to the completion of the 10-day period for publication are
considered mere irregularities that do not affect the validity of the
marriage
Abbas v. Abbas, G.R. NO. 183896 , Jan. 30, 2013 689 SCRA 636
The Municipal Civil Registrar of Carmona, Cavite, where the marriage
license of Gloria and Syed was allegedly issued, issued a certification to
the effect that no such marriage license for Gloria and Syed was issued,
and that the serial number of the marriage license pertained to another
couple, Arlindo Getalado and Myra Mabilangan. The fact that the names
in said license do not correspond to those of Gloria and Syed does not
overturn the presumption that the registrar conducted a diligent search
of the records of her office.
Compare the case of Abbas v. Abbas and Alcantara v. Alcantara
Sy v. CA, G.R. NO. 127263 , Apr. 12, 2000 330 SCRA 550
In this case the marriage license was issued on September 17,1974,
almost one year after the ceremony took place on November 15, 1973.
The ineluctable conclusion is that the marriage was indeed contracted
without a marriage license.

Marriages Exempted from the License Requirement Art. 27 34 FC


Cruz v. Catandes, C.A., 39 O.G. NO. 18, p. 324
In a marriage in articulo mortis, while it is ad visable that a witness to the
marriage should sign the dying partys signature if the latter be
physically unable to do so, still if upon order of the solemnizing official,
another person should so sign, the marriage is still valid. The law as
much as possible intends to give legal effect to a marriage. As a matter of
fact, no particular form for a marriage celebration is prescribed.
Soriano v. Felix, L-9005, June 20, 1958
The affidavit is for the purpose of proving the basis for exemption from
the marriage license. Even if there is failure on the part of the
solemnizing officer to execute the necessary affidavit, such irregularity
will not invalidate the marriage for the affidavit is not being required of
the parties.
People v. Dumpo, 62 Phil. 246
16

No judicial notice can be taken of Mohammedan rites and customs for


marriage. They must be alleged and proved in court.
Borja-M anzano vs. Sanchez, 354 SCRA 1, 5 (2001)
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.
Nial vs. Bayadog 328 SCRA 122, M arch 14, 2000
In this case, at the time of Pepito and respondents marriage, it cannot be
said that they have lived with each other as husband and wife for at least
five years prior to their wedding day because their cohabitation is not
exclusive. The Court ruled that the cohabitation contemplated under said
provisions must be in the nature of a perfect union that is valid under
the law but rendered imperfect only by the absence of the marriage
contract and characterized by exclusivity meaning nothird party was
involved at anytime within the 5 years andcontinuity that is unbroken.

Marriage Ceremony
Morigo vs People, 422 SCRA 376 (2004)
Petitioner and Lucia Barrette merely signed the marriage contract on
their own. The mere act of signing a marriage contract by the contracting
parties without the presence of the solemnizing officer will not result to
marriage.
Infante vs Arenas, June 29, 1951
The failure of the solemnizing officer to ask the parties whether they take
each other as husband and wife cannot be regarded as a fatal omission if
the parties nonetheless signed the marriage contract in the presence of
the solemnizing officer. A declaration of word of mouth of what the
parties and already stated in writing would be a mere repetition, so that
its omission should not be regarded as fatal.
People v. Opea, L-34954, Feb. 20, 1981
If a man and a woman deport themselves as if they were husband and
wife, they are presumed to be validly and legally married to each other
and this presumption is not rebutted by a mere denial by the man (or
woman) of the fact of marriage.
17

Persons who may solemnize M arriages


Araes v. Occiano, A.M . 02-1390 , April 11, 2002 380 SCRA 402
The respondent Judge solemnized marriage without the requisite
marriage license. Where a judge solemnizes a marriage outside his
courts jurisdiction, there is a resultant irregularity in the formal
requisite laid down in article 3, which while it may not affect the validity
of marriage, may subject the officiating official to administrative liability.
OCA vs. J. Necessario et al, A.M . NO. 07-1691,April 2, 2013 695
SCRA
The court does not accept the arguments of the respondent judges that
the ascertainment of the validity of the marriage license is beyond the
scope of the duty of a solemnizing officer especially when there are
glaring pieces of evidence that point to the contrary. As correctly
observed by the OCA, the presumption of regularity accorded to a
marriage license disappears the moment the marriage documents do not
appear regular on its face.
Compare the ruling of the court in the case of Cario v. Cario and
OCA vs. J. Necessario et al as to the duty of the solemnizing officer
to examine the validity of marriage license.
Marriage in good faith
Effect of Absence of Essential and Formal requisite
Arts. 15-17,50-5, NCC; Art.26, FC; Divorce [Filipino; Foreigner;
Parenting; Children, Property Rights; Succession rights]; Declaratory
Relief; Rule 108;; Art. 412 NCC
SOLEDAD L. LAVADIA vs. HEIRS OF JUAN LUCES LUNA, represented by
GREGORIO Z. LUNA and EUGENIA ZABALLERO-LUNA, G.R. No. 171914, July 23,
2014, J. Lucas P. Bersamin
Divorce between Filipinos is void and ineffectual under the nationality rule adopted
by Philippine law. Hence, any settlement of property between the parties of the first
marriage involving Filipinos submitted as an incident of a divorce obtaine d in a
foreign country lacks competent judicial approval, and cannot be enforceable
against the assets of the husband who contracts a subsequent marriage.

18

Atty. Lunas subsequent marriage to Soledad was void for being bigamous, on the
ground that the marriage between Atty. Luna and Eugenia had not been dissolved
by the Divorce Decree rendered by the CFI of Sto. Domingo in the Dominican
Republic but had subsisted until the death of Atty. Luna
Given the subsistence of the first marriage between Atty. Luna and Eugenia, the
presumption that Atty. Luna acquired the properties out of his own personal funds
and effort remained. It should then be justly concluded that the properties in litis
legally pertained to their conjugal partnership of gains as of the time of his death.
Consequently, the sole ownership of the 25/100 pro indiviso share of Atty. Luna in
the condominium unit, and of the law books pertained to the respondents as the
lawful heirs of Atty. Luna.
EDELINA T. ANDO vs. DEPARTMENT OF FOREIGN AFFAIRS, G.R. No.
195432, August 27, 2014, CJ. Sereno
Petitioner questions the decision of the RTC, dismissing her petition for the
recognition of her second marriage as valid, for failing to comply with the
requirements set forth in Art. 13 of the Family Code that is obtaining a judicial
recognition of the foreign decree of absolute divorce in our country. The SC however
ruled that a divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided the decree is valid according to the national law of the
foreigner. The presentation solely of the divorce decree is insufficient; both the
divorce decree and the governing personal law of the alien spouse who obtained the
divorce must be proven. Because our courts do not take judicial notice of foreign
laws and judgment, our law on evidence requires that both the divorce decree and
the national law of the alien must be alleged and proven and like any other fact.
Hence, instead of filing a petition for the recognition of her second marriage as valid,
petitioner should have filed a petition for the judicial recognition of her foreign
divorce from her first husband.
EDELINA T. ANDO v DEPARTMENT OF FOREIGN AFFAIRS, G.R No. 195432
August 27, 2014. J. SERENO
Edelina Tungol married a Japanese man, Yuichiro Kobayashi, in 2001. In 2004,
Kobayashi obtained a divorce valid under Japanese law. Believing the divorce
capacitated her to marry, Edelina married Masatomi Ando in 2005. When Edelina
applied for a renewal of her passport using Andos last name, the DFA told her that
she needed to prove by a competent court decision that her second marriage to
Ando is valid until otherwise declared.
There appears to be insufficient proof or evidence presented on record of both the
national law of her first husband, Kobayashi, and of the validity of the divorce
decree under that national law. Hence, any declaration as to the validity of the
divorce can only be made upon her complete submission of evidence proving the
19

divorce decree and the national law of her alien spouse, in an action instituted in the
proper forum.
Rep. v. Orbecido, G.R. NO. 154380, Oct. 05, 2005 472 SCRA 114
Whether or not, a Filipino spouse of an alien, who is a Filipino at the
time of marriage, remarry after the latter acquires a foreign divorce that
allows her to remarry. The reckoning point is not the citizenship of the
parties at the time of the celebration of the marriage, but their
citizenship at the time a valid divorce is obtained abroad by the alien
spouse capacitating the latter to remarry.
Corpuz v. Sto. Tomas, G.R. NO. 186571, Aug. 11, 2010 628 SCRA
266
A judgment of divorce is a judicial decree, although a foreign one,
affecting a persons legal capacity and status that must be recorded. But
while the law requires the entry of the divorce decree in the civil registry,
the law and the submission of the decree by themselves do not ipso facto
authorize the decrees registration.
Classification of M arriages, Relationships. Parties In
NCC;FC;AM 02-11-10 SC

Interest;

Valid
Voidable
Void
Terminable
Others Classifications
Legal Separation
Separation in Fact
Common Law Relationship
Void M arriages vs Voidable M arriages
Suntay vs. Conjuangco-Suntay, 300 SCRA 760, 770 (1998)
The fundamental distinction between void and voidable marriages is that
a void marriage is deemed never to have taken place at all and cannot be
the source of rights. On the other hand, a voidable marriage, is
considered valid and produces all its civil effects, until it is set aside by
final judgment of a competent court in an action for annulment
20

Declaration of Nullity; NCC v. FC, AM 02-11-10 SC; Civil Code and


Muslim Code [PD 1083]
Proper party to petition for nullity of marriage; AM 02-11-10 SC
Ablaza v. Republic, G.R. NO. 158298 , Aug. 11, 2010 628 SCRA 27
Indeed, a brother like the petitioner, albeit not a compulsory heir under
the laws of succession, has the right to succeed to the estate of a
deceased brother under the conditions stated in Article 1001 and Article
1003 of the Civil Code Necessarily, therefore, the right of the petitioner to
bring the action hinges upon a prior determination of whether
Cresenciano had any descendants, ascendants, or children (legitimate or
illegitimate), and of whether the petitioner was the late Cresencianos
surviving heir. Such prior determination must be made by the trial court,
for the inquiry thereon involves questions of fact.
Juliano-Llave v. Republic, G.R. NO. 169766 , M ar. 30, 2011 646
SCRA 637
The marriage between the late Sen. Tamano and Zorayda was celebrated
in 1958, solemnized under civil and Muslim rites. The only law in force
governing marriage relationships between Muslims and non-Muslims
alike was the Civil Code of 1950, under the provisions of which only one
marriage can exist at any given time.
Procedure in declaration of nullity of marriage
Carlos v. Sandoval G.R. NO. 179922 , Dec. 16, 2008 574 SCRA 116
Whether a marriage may be declared void ab initio through a judgment
on the pleadings or a summary judgment and without the benefit of a
trial. The grounds for declaration of absolute nullity of marriage must be
proved. Neither judgment on the pleadings nor summary judgment is
allowed. So is confession of judgment disallowed.
Bolos v. Bolos, G.R. NO. 186400 , Oct. 20, 2010 634 SCRA 429
Whether or not A.M. NO. 02-11-10-SC RULE ON DECLARATION OF
ABSOLUTE NULLITY OF VOID MARRIAGES AND ANNULMENT OF
VOIDABLE MARRIAGES is applicable to marriages solemnized before
the effectivity of Family Code. NO. The Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable Marriages as
contained in A.M. NO. 02-11-10-SC which the Court promulgated on
March 15, 2003

21

Article 36, FC; AM 02-11-10 SC; See also Articles 48, 68-71, 220-221
& 225 FC
Psychological Incapacity Definition
Salita vs Hon. M agtolis ,June 13, 1994
The Committee did not give any examples of psychological incapacity for
fear that the giving of examples would limit the applicability of the
provision under the principle of ejusdem generis. Rather, the Committee
would like the judge to interpret the provision on a case-to-case basis,
guided by experience, the findings of experts and researchers in
psychological disciplines, and by decisions of church tribunals which,
although not binding on the civil courts, may be given persuasive effect
since the provision was taken from Canon Law.
Characteristics of Psychological Incapacity
Santos v. Court of Appeals, 240 SCRA 20 (1995)
The Supreme Court enumerated the three basic requirements of
psychological incapacity as a ground for declaration of nullity of the
marriage: (a) gravity; (b) juridical antecedence; and (c) incurability.
Guidelines in the interpretation and application of Article 36; AM
02-11-10 SC
VALERIO E. KALAW vs. MA. ELENA FERNANDEZ, G.R. No. 166357, January 14,
2015, J. Del Castillo
On reconsideration, the Supreme Court reversed its previous ruling and reinstated
the trial courts ruling granting the petition for nullity on the basis of Art. 36.
Psychological incapacity is the downright incapacity or inability to take cogniza nce
of and to assume the basic marital obligations. The burden of proving psychological
incapacity is on the plaintiff. The plaintiff must prove that the incapacitated party,
based on his or her actions or behavior, suffers a serious psychological disorder that
completely disables him or her from understanding and discharging the essential
obligations of the marital state. The psychological problem must be grave, must
have existed at the time of marriage, and must be incurable.
The courts are justified in declaring a marriage null and void under Article 36 o f the
Family Code regardless of whether it is the petitioner or the respondent who
imputes the psychological incapacity to the other as long as the imputation is fully
substantiated with proof. Indeed, psychological incapacity may exist in one party
alone or in both of them, and if psychological incapacity of either or both is
established, the marriage has to be deemed null and void.
22

ROBERT F. MALLILIN vs. LUZ G. JAMESOLAMIN AND THE REPUBLIC OF THE


PHILIPPINES, G.R. No. 192718, February 18, 2015, J. Mendoza
The alleged failure of Luz to assume her duties as a wife and as a mother, as well as
her emotional immaturity, irresponsibility and infidelity, cannot rise to the level of
psychological incapacity that justifies the nullification of the parties' marriage.
Psychological incapacity as required by Article 36 must be characterized by (a)
gravity, (b) juridical antecedence and (c) incurability. The interpretations given by
the National Appellate Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling or decisive, should be given great respect by our
courts. The decision of the NAMT, however, was based on the second paragraph of
Canon 1095 which refers to those who suffer from a grave lack of discretion of
judgment concerning essential matrimonial rights and obligations to be mutually
given and accepted --- a cause not of psychological nature under Article 36 of the
Family Code. A cause of psychological nature similar to Article 36 is covered by the
third paragraph of Canon 1095 of the Code of Canon Law.
Republic of the Philippines vs. Court of Appeals and M olina, 268
SCRA 198, 212 (1997)
The burden of proof to show the nullity of the marriage belongs to the
plaintiff. Any doubt should be resolved in favor of the existence and
continuation of the marriage and against its dissolution and nullity.
Republic vs. Quintero-Hamano, 428 SCRA 735 (2004).
According to the appellate court, the requirements in Molina and Santos
do not apply here because the present case involves a mixed marriage,
the husband being a Japanese national. The court held that in proving
psychological incapacity, we find no distinction between an alien spouse
and a Filipino spouse.
Failure to comply with the Essential M arital Obligations
Chi M ing Tsoi vs CA, 266 SCRA 324 (1997)
In this case, there was no sexual contact between the parties since their
marriage on May 22, 1988 up to Mar. 15, 1989 or for almost a year. The
senseless and protracted refusal of one of the parties of sexual
cooperation for the procreation of children is equivalent to psychological
incapacity.

23

Marable v. M arable G.R. NO. 178741, Jan. 17, 2011 639 SCRA 557

The appellate court correctly ruled that the report of Dr. Tayag failed to
explain the root cause of petitioners alleged psychological incapacity.
The evaluation of Dr. Tayag merely made a general conclusion that
petitioner is suffering from an Anti-social Personality Disorder but there
was no factual basis stated for the finding that petitioner is a socially
deviant person, rebellious, impulsive, self-centered and deceitful.

Ochosa v. Alano, G.R. NO. 167459 , Jan. 26, 2011 640 SCRA 517
In this case the court proved that respondent was the sex partner of
many military officials. In view of the foregoing, the badges of Bona s
alleged psychological incapacity, i.e., her sexual infidelity and
abandonment, can only be convincingly traced to the period of time after
her marriage to Jose and not to the inception of the said marriage.
Yambao v. REP., G.R. NO. 184063 , Jan. 24, 2011 640 SCRA 355
Article 36 contemplates incapacity or inability to take cognizance of
and to assume basic marital obligations and not merely difficulty,
refusal, or neglect in the performance of marital obligations or ill will.
Rep. v. Galang G.R. NO. 168335 , Jun. 6, 2011 650 SCRA 524
In like manner, Juvys acts of falsifying the respondents signature to
encash a check, of stealing the respondents ATM, and of squandering a
huge portion of the P15,000.00 that the respondent entrusted to her,
while no doubt reprehensible, cannot automatically be equated with a
psychological disorder, especially when the evidence shows that these
were mere isolated incidents and not recurring acts.

Aurelio v. Aurelio, G.R. NO. 175367 , Jun. 6, 2011 650 SCRA 561
Whether or not a petition for nullity of marriage on the ground of
psychological incapacity may be dismiss for failure to comply with the
guidelines set forth in the Molina Ruling. Let it be remembered that each
case involving the application of Article 36 must be treated distinctly and
judged not on the basis of a priori assumptions, predilections or
generalizations but according to its own attendant facts.
Kalaw v. Fernandez, G.R. NO. 166357 , Sept 19, 2011 657 SCRA 822

24

He presented the testimonies of two supposed expert witnesses who


concluded that respondent is psychologically incapacitated, but the
conclusions of these witnesses were premised on the alleged acts or
behavior of respondent which had not been sufficiently proven. Sexual
infidelity per se is a G.R.ound for legal separation, but it does not
necessarily constitute psychological incapacity.
Toring v. Toring, G.R. NO. 165321 , Aug. 03, 2010 626 SCRA 389
We are in no way convinced that a mere narration of the statements of
Ricardo and Richardson, coupled with the results of the psychological
tests administered only on Ricardo, without more, already constitutes
sufficient basis for the conclusion that Teresita suffered from Narcissistic
Personality Disorder. This Court has long been negatively critical in
considering psychological evaluations, presented in evidence, derived
solely from one-sided sources, particularly from the spouse seeking the
nullity of the marriage.
Baccay v. Baccay, G.R. No 173138 , Dec, 1, 2010 636 SCRA 350
In this case, the totality of evidence presented by Noel was not sufficient
to sustain a finding that Maribel was psychologically incapacitated.
Noels evidence merely established that Maribel refused to have sexual
intercourse with him after their marriage, and that she left him after
their quarrel when he confronted her about her alleged miscarriage.

Agraviador v. Agraviador G.R.NO.170729 , Dec. 08, 2010 637 SCRA


519
In the present case, the petitioners testimony failed to establish that the
respondents condition is a manifestation of a disordered personality
rooted on some incapacitating or debilitating psychological condition that
makes her completely unable to discharge the essential marital
obligations. If at all, the petitioner merely showed that the respondent
had some personality defects that showed their manifestation during the
marriage; his testimony sorely lacked details necessary to establish that
the respondents defects existed at the inception of the marriage.

Mendoza v. Republic, G.R. NO. 157649,Nov 12, 2012 685 SCRA 16


Here, the experts testimony on Dominics psychological profile did not
identify, much less prove, the root cause of his psychological incapacity
because said expert did not examine Dominic in person before
completing her report but simply relied on other peoples recollection and
25

opinion for that purpose. Expert e vidence submitted here did not
establish the precise cause of the supposed psychological incapacity of
Dominic, much less show that the psychological incapacity existed at the
inception of the marriage.
Republic v. Encelan, G.R. NO. 170022 , Jan. 9, 2013 688 SCRA 215
In any event, sexual infidelity and abandonment of the conjugal dwelling,
even if true, do not necessarily constitute psychological incapacity; these
are simply grounds for legal separation. To constitute psychological
incapacity, it must be shown that the unfaithfulness and abandonment
are manifestations of a disordered personality that completely prevented
the erring spouse from discharging the essential marital obligations.
Evidentiary requirement
GLENN VIAS vs. MARY GRACE PAREL-VIAS, G.R. No. 208790, January 21,
2015, J. Reyes
The lack of personal examination or assessment by a psychologist or psychiatrist is
not necessarily fatal in a petition for the declaration of nullity of marriage. If the
totality of evidence presented is enough to sustain a finding of psychological
incapacity, then actual medical examination of the person concerned need not be
resorted to. In the case at bar, the assessment of the psychological incapacity of the
wife was based solely on the information provided by the husband whose bias in
favor of his cause cannot be doubted. While this circumstance alone does not
disqualify the psychologist for reasons of bias, her report, testimony and
conclusions deserve the application of a more rigid and stringent set of standards.
Hence, if the totality of the evidence presented provides inadequate basis to warrant
the conclusion that a psychological incapacity existed that prevented her from
complying with the essential obligations of marriage, the declaration of the nullity of
the marriage cannot be obtained. It has been settled that irreconcilable differences,
sexual infidelity or perversion, emotional immaturity and irresponsibility, and the
like, do not by themselves warrant a finding of psychological incapacity under
Article 36, as the same may only be due to a persons refusal or unwillingness to
assume the essential obligations of marriage and not due to some psychological
illness that is contemplated by said rule.

Marcos vs M arcos, 343 SCRA 755 (2000)


If the totality of evidence presented is enough to sustain a finding of
psychological incapacity, then actual medical examination of the person
concerned need not be resorted to.
Award of M oral Damages
26

Buenaventura vs CA, 454 SCRA 261 (2005)


By declaring the petitioner as psychologically incapacitated, the
possibility of awarding moral damages on the same set of facts was
negated.
The award of moral damages should be predicated, not on the mere act
of entering into the marriage, but on specific evidence that it was done
deliberately and with malice by a party who had knowledge of his or her
disability and yet willfully concealed the same.
Prescription
Nial v. Bayadog G.R. NO. 133778=, M ar. 14, 2000 328 SCRA 122
The action or defense for nullity is imprescriptible, unlike voidable
marriages where the action prescribes. Only the parties to a voidable
marriage can assail it but any proper interested party may attack a void
marriage.
Declaration of Nullity; Art.40; Prejudicial Question- Section 7, Rule
117, 2000 Rules of Criminal Procedure; Arts.35 (4) & 41, FC; Art.349
RPC; Civil & Criminal Bigamy; Art. 83, NCC
Judicial Declaration of nullity of marriages

Ablaza v. Republic, G.R. NO. 158298 , Aug. 11, 2010 628 SCRA 27
Other than for purposes of remarriage, no judicial action is necessary to
declare a marriage an absolute nullity. For other purposes, such as but
not limited to determination of heirship, legitimacy or illegitimacy of a
child, settlement of estate, dissolution of property regime, or a criminal
case for that matter, the court may pass upon the validity of marriage
even in a suit not directly instituted to question the same so long as it is
essential to the determination of the case.
Atienza vs. Brillantes, Jr., 243 SCRA 32,35 (1995)
Article 40 is applicable to remarriages entered into after the effectivity of
the Family Code on August 3, 1988 regardless of the date of the first
marriage.
Mercado vs. Tan, 337 SCRA 122 (2000)

27

A judicial declaration of nullity of a previous marriage is necessary before


a subsequent one can be legally contracted and that one who enters into
a subsequent marriage without first obtaining such judicial declaration
is guilty of bigamy.
Morigo v. People, G.R. NO. 145226, Feb. 06, 2004 422 SCRA 376
The existence and the validity of the first marriage being an essential
element of the crime of bigamy, it is but logical that a conviction for said
offense cannot be sustained where there is no first marriage to speak of.
Jarillo v.People, G.R. NO.164435 , Sept. 29, 2009 601 SCRA 236
Whether or not the declaration of the first marriage as void ab initio on
the ground of psychological incapacity is a defense for the crime of
bigamy. In this case, even if petitioner eventually obtained a declaration
that his first marriage was void ab initio, the point is, both the first and
the second marriage were subsisting before the first marriage was
annulled.
Tenebro v. CA, G.R. NO. 150758 , Feb. 18, 2004 423 SCRA 272
Whether or not, the nullity of the second marriage on the G.R.ound of PI
is a valid defense for the crime of bigamy. The declaration of the nullity of
the second marriage on the ground of psychological incapacity is not an
indicator that petitioners marriage to Ancajas lacks the essential
requisites for validity.
Antone v. Beronilla, G.R. NO.183824, Dec. 08, 2010 637 SCRA 615
To conclude, the issue on the declaration of nullity of the marriage
between petitioner and respondent only after the latter contracted the
subsequent marriage is, therefore, immaterial for the purpose of
establishing that the facts alleged in the information for Bigamy does not
constitute an offense. Following the same rationale, neither may such
defense be interposed by the respondent in his motion to quash by way
of exception to the established rule that facts contrary to the allegations
in the information are matters of defense which may be raised only
during the presentation of evidence.
Teves v. People, G.R. NO. 188775 , Aug 24, 2011 656 SCRA 307
The crime of bigamy was committed by petitioner on 10 December 2001
when he contracted a second marriage with Edita. The finality on 27
June 2006 of the judicial declaration of the nullity of his previous
marriage to Thelma cannot be made to retroact to the date of the
bigamous marriage.
28

Nollora v. People, G.R. NO.191425 , Sept. 7, 2011 657 SCRA 330


Indeed, Article 13(2) of the Code of Muslim Personal Laws states that
"[i]n case of a marriage between a Muslim and a non-Muslim, solemnized
not in accordance with Muslim law or this Code, the [Family Code of the
Philippines, or Executive Order NO. 209, in lieu of the Civil Code of the
Philippines] shall apply." Thus, regardless of his professed religion,
Nollora cannot claim exemption from liability for the crime of bigamy.
Villatuya v. Tabalingcos, A.C. NO. 6622 , July 10, 2012 676 SCRA 37
Respondent exhibited a deplorable lack of that deG.R.ee of morality
required of him as a member of the bar. He made a mockery of marriage,
a sacred institution demanding respect and dignity.

Subsequent Bigamous M arriage under art. 41


Arts. 41- 44, 49 FC; Art.83 (2) NCC;
Judicial Declaration of Presumptive Death
Armas v. Calisterio, G.R. NO.136467, Apr. 06, 2000 330 SCRA 201
Whether or not, the rule under the FC, that a judicial declaration of
presumptive death of the absent spouse is necessary before the present
spouse can remarry, has a retroactive effect. A judicial declaration of
absence of the absentee spouse is not necessary as long as the
prescribed period of absence is met. It is equally noteworthy that the
marriage in these exceptional cases are, by the explicit mandate of Article
83, to be deemed valid "until declared null and void by a competent
court."
Requisites for declaration of presumptive Death
Rep. v. Nolasco, G.R. NO. 94053 , M ar. 17, 1993 220 SCRA 20
In the case at bar, the Court considers that the investigation allegedly
conducted by respondent in his attempt to ascertain Janet Monica
Parker's whereabouts is too sketchy to form the basis of a reasonable or
well-founded belief that she was already dead. When he arrived in San
Jose, Antique after learning of Janet Monica's departure, instead of
seeking the help of local authorities or of the British Embassy, he
secured another seaman's contract and went to London, a vast city of
many millions of inhabitants, to look for her there.
Retroactive application of Art. 41
Valdez v. Republic, G.R. NO.180863 , Sept. 08, 2009 598 SCRA 646

29

Since death is presumed to have taken place by the seventh year of


absence, Sofio is to be presumed dead starting October 1982. To
retroactively apply the provisions of the Family Code requiring petitioner
to exhibit "well-founded belief" will, ultimately, result in the invalidation
of her second marriage, which was valid at the time it was celebrated.
Effects of Declaration of Presumptive Death
Effects of Recording of Affidavit of Reapperance
Procedural rules of declaration of Presumptive Death
The proper remedy for a judicial declaration of presumptive death obtained by
extrinsic fraud is an action to annul the judgment. An affidavit of reappearance is
not the proper remedy when the person declared presumptively dead has never
been absent. CELERINA J. SANTOS vs. RICARDO T. SANTOS, G.R. No. 187061,
October 08, 2014, J. Leonen

Rep. v. Tango, G.R. NO.161062 , Jul. 31, 2009 594 SCRA 560
By express provision of law, the judgment of the court in a summary
proceeding shall be immediately final and executory. As a matter of
course, it follows that no appeal can be had of the trial courts judgment
in a summary proceeding for the declaration of presumptive death of an
absent spouse under Article 41 of the Family Code
Navarro v. Domogtoy, A.M . NO.M TJ-96-1088, Jul. 19, 1996 259
SCRA 129
Even if the spouse present has a well-founded belief that the absent
spouse was already dead, a summary proceeding for the declaration of
presumptive death is necessary in order to contract a subsequent
marriage, a mandatory requirement which has been precisely
incorporated into the Family Code to discourage subsequent marriages
where it is not proven that the previous marriage has been dissolved or a
missing spouse is factually or presumptively dead, in accordance with
pertinent provisions of law.
Rep. v. Bermudez-Lorino, G.R. NO. 160258 , Jan. 19, 2005 449
SCRA 57
Although the result of the Court of Appeals denial of the appeal would
apparently be the same, there is a big difference between having the
supposed appeal dismissed for lack of jurisdiction by virtue of the fact
that the RTC decision sought to be appealed is immediately final and
executory, and the denial of the appeal for lack of merit. In the former,
the supposed appellee can immediately ask for the issuance of an Entry
30

of Judgment in the RTC, whereas, in the latter, the appellant can still
raise the matter to this Court on petition for review and the RTC
judgment cannot be executed until this Court makes the final
pronouncement.
Rep. v. Granada, G.R. NO. 187512, June 13, 2012 672 SCRA 432
As a matter of course, it follows that no appeal can be had of the trial
court's judgment in a summary proceeding for the declaration of
presumptive death of an absent spouse under Article 41 of the Family
Code. It goes without saying, however, that an aggrieved party may file a
petition for certiorari to question abuse of discretion amounting to lack of
jurisdiction.
Terminable M arriage; Art. 43 44 FC
Effects of termination of subsequent marriage
Effects of Bad Faith
Armas v. Calisterio, G.R. NO.136467, Apr. 06, 2000 330 SCRA 201
Bad faith imports a dishonest purpose or some moral obliquity and
conscious doing of wrong it partakes of the nature of fraud, a breach of a
known duty through some motive of interest or ill-will.
Voidable M arriages; Art. 45- 49 FC
Definition
Suntay vs. Cojuangco-Suntay, 300 SCRA 760, 771 (1998)
A voidable marriage is considered valid and produces all its civil effects
until it is set aside by final judgment of a competent court in an action
for annulment. The terms annul and null and void have different legal
connotations and implications. Annul means to reduce to nothing; to
nullify; to abolish; to do away with; whereas, null and void is something
that does not exist from the beginning.
Characteristics of Voidable M arriages
Proper party to file annulment of M arriage
G.R.ounds
Ratification and prescription
Procedural rules of annulment of marriage and declaration of nullity
31

Tuazon vs. Court of Appeals, 256 SCRA 158 (1996)


The prosecuting attorney or fiscal may oppose the application for legal
separation or annulment (or declaration of nullity of marriages) through
the presentation of his own e vidence, if in his opinion, the proof adduced
is dubious and fabricated.
Effects of judicial declaration of nullity of M arriage ; Art. 50-54
Title II. LEGAL SEPARATION (Articles 55-67)
Concept
Distinction of annulment and absolute divorce
Grounds
Ong v. Ong, G.R. NO. 153206 , Oct. 23, 2006 505 SCRA 76
Also without merit is the argument of William that since Lucita has
abandoned the family, a decree of legal separation should not be granted,
following Art. 56, par. (4) of the Family Code which provides that legal
separation shall be denied when both parties have given ground for legal
separation. The abandonment referred to by the Family Code is
abandonment without justifiable cause for more than one year.
De facto Separation vs. Legal Separation,Article 63
Manzano vs. Sanchez, A.M . NO.00-1329, M ar. 08, 2001 354 SCRA 1
The fact that Manzano and Payao had been living apart from their
respective spouses for a long time already is immaterial. Article 63(1) of
the Family Code allows spouses who have obtained a decree of legal
separation to live separately from each other, but in such a case the
marriage bonds are not severed.
SSS v. Aguas, G.R. NO. 165546 , Feb. 27, 2006 483 SCRA 383
On the claims of Rosanna, it bears stressing that for her to qualify as a
primary beneficiary, she must prove that she was "the legitimate spouse
dependent for support from the employee, whether one is actually
dependent for support upon the other is something that has to be shown;
it cannot be presumed from the fact of marriage alone. The obvious
conclusion then is that a wife who is already separated de facto from her
husband cannot be said to be "dependent for support" upon the
husband, absent any showing to the contrary.
Defenses in Legal Separation Art. 56- 57
32

Cooling off period; Art. 58 59


Pacete vs. Carriaga, Jr., G.R. NO. L-53880, M arch 17, 1994.
In this interim, the court should take steps toward getting the parties to
reconcile.
Somosa-Ramos vs. Vamenta, Jr., G.R. NO. L-34132, July 29,1972
During this period, the court where the action is pending shall remain
passive and is precluded from hearing the suit.
Rule of Procedure on Legal Separation (A.M . NO. 02-11-11 SC);
Rule on Provisional Orders (AM 02-11-12 SC);
Baez vs. Baez, G.R. NO. 132592 , Jan. 23, 2002 374 SCRA 340
The effects of legal separation, such as entitlement to live separately,
dissolution and liquidation of the absolute community or conjugal
partnership, and custody of the minor children, follow from the decree of
legal separation. They are not separate or distinct matters that may be
resolved by the court and become final prior to or apart from the decree
of legal separation.
Pacete vs. Carriaga, G.R. NO. 53880, M ar. 17, 1994 231 SCRA 321
Whether or not, the order declaring in default a respondent in a legal
separation case amounts to grave abuse of discretion. In case of nonappearance of the defendant, the court shall order the prosecuting
attorney to inquire whether or not a collusion between the parties exists.
If there is no collusion, the prosecuting attorney shall intervene for the
State in order to take care that the evidence for the plaintiff is not
fabricated.
Quiao vs. Quiao, G.R. NO.176556 , July 4, 2012 675 SCRA 642
When the trial court issued its order dated November 8, 2006, it held
that although the Decision dated October 10, 2005 has become final and
executory, it may still consider the Motion for Clarification because the
petitioner simply wanted to clarify the meaning of "net profit earned."
Title III. RIGHTS AND OBLIGATIONS BETWEEN HUSBAND & W IFE
(Arts 68-73)
Ilusorio v. Bildner, G.R. NO. 139789 , M ay 12, 200 332 SCRA 169
33

Marital rights including coverture and living in conjugal dwelling may not
be enforced by the extra-ordinary writ of habeas corpus. With his full
mental capacity coupled with the right of choice, Potenciano Ilusorio may
not be the subject of visitation rights against his free choice. Otherwise,
we will deprive him of his right to privacy.
Go vs. CA G.R. NO.114791, M ay 29, 1997 272 SCRA 752
Under Article 117 of the Civil Code (now Article 73 of the Family Code),
the wife may exercise any profession, occupation or engage in business
without the consent of the husband. In the instant case, we are
convinced that it was only petitioner Nancy Go who entered into the
contract with private respondent.
Family expenses and management of the household
TITLE IV. PROPERTY RELATIONS BET. HUSBAND & W IFE (Articles
74- 148)
CHAPTER 1. GENERAL PROVISIONS;
(Articles 74-81, FC; Art. 119, NCC)

Pre-nuptial

Agreement;

Concept
Property regime by default
Marriage settlement
Parties to M arriage settlement
Laws governing Property Relations
CHAPTER 2. DONATIONS BY REASON OF M ARRIAGE (Articles 82 87)
Donation Propter Nuptias
Serrano vs. Solomon, G.R. NO. L-12093, June 29, 1959
The following donations are not donations propter nuptias: (1) those made
in favor of the spouses after the celebration of marriage; (2) those
executed in favor of the future spouses but not in consideration of the
marriage; and (3) those Ggranted to persons other than the spouses even
though they may be founded on the marriage
Rules governing Donation propter nuptias
Heirs of Segunda M aningding vs. CA, 276 SCRA 601 (1997)

34

Even if the donation proper nuptias is void for failure to comply with
formal requisites, it could still constitute as legal basis for adverse
possession.
Valencia v. Locquiao, G.R. NO. 122134, Oct. 3, 200 412 SCRA 600
Under the Old Civil Code, donations propter nuptias must be made in a
public instrument in which the property donated must be specifically
described. However, Article 1330 of the same Code provides that
"acceptance is not necessary to the validity of such gifts". In
other words, the celebration of the marriage between the beneficiary
couple, in tandem with compliance with the prescribed form, was enough
to effectuate the donation propter nuptias under the Old Civil Code.
Donation between the parties
Donation of future properties
Revocation of Donation Propter Nuptias
Donation between Spouses
Agapay vs. Palang, G.R. NO. 116668 , Jul. 28, 1997 276 SCRA 340
Article 87 of the Family Code expressly provides that the prohibition
against donations between spouses now applies to donations between
persons living together as husband and wife without a valid marriage, for
otherwise, the condition of those who incurred guilt would turn out to be
better than those in legal union.
Arcaba vs. Batocael, G.R. NO.146683 , Nov.22, 2001 370 SCRA 414
Respondents having proven by a preponderance of evidence that Cirila
and Francisco lived together as husband and wife without a valid
marriage, the inescapable conclusion is that the donation made by
Francisco in favor of Cirila is void under Art. 87 of the Family Code.
CHAPTER 3. SYSTEM OF ABSOLUTE COMMUNITY (Articles 88-104);
R.A. 8369
Section 1. General Provisions (Articles 88-90)
Section 2. W hat constitutes Community Property (Articles 91-93)
Section 3. Charges Upon & Obligations of the Absolute Community
(Articles 94-95)

35

Section 4. Ownership, Administration, Enjoyment & Disposition of


the Community Property (Articles 96-98)
Section 5. Dissolution of Absolute Community Regime (Arts 99-101)
Section 6. Liquidation of the Absolute Community Assets &
Liabilities (Arts 102-104); Succession; Probate;
Sec. 3, Rule 87
Rules governing ACP
Commencement of the ACP
Prohibition on waiver of Rights, Interest, Shares and Effects
Abalos vs M acatangay Jr., 439 SCRA 649, 662-663 (2004).
Prior to the liquidation of the conjugal partnership, the interest of each
spouse in the conjugal assets is inchoate, a mere expectancy, which
constitutes neither a legal nor an equitable estate, and does not ripen
into title until it appears that there are assets in the community as a
result of the liquidation and settlement. The interest of each spouse is
limited to the net remainder or remanente liquido (haber ganancial)
resulting from the liquidation of the affairs of the partnership after its
dissolution.
CHAPTER 3. SYSTEM OF ABSOLUTE COMMUNITY (Articles 88-104);
R.A. 8369
Section 1. General Provisions (Articles 88-90)
Section 2. W hat constitutes Community Property (Articles 91-93)
Section 3. Charges Upon & Obligations of the Absolute Community
(Articles 94-95)
Section 4. Ownership, Administration, Enjoyment & Disposition of
the Community Property (Articles 96-98)
Section 5. Dissolution of Absolute Community Regime (Arts 99 -101)
Section 6. Liquidation of the Absolute Community Assets &
Liabilities (Arts 102-104); Succession; Probate;
Sec. 3, Rule 87

36

Concept
Homeowners Savings & Loan Bank vs. Dailo, 453 SCRA 283, 290
(2005)
The regime of conjugal partnership of gains is a special type of
partnership, where the husband and wife place in a common fund the
proceeds, products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts or by
chance.
Rules governing CPG
Commencement of CPG
Prohibition on waiver of Rights, Interest, Shares and Effects
Quiao vs. Quiao G.R. NO. 176556 , July 4, 2012 675 SCRA 642
In this provision, net profits "shall be the increase in value between the
market value of the community property at the time of the celebration of
the marriage and the market value at the time of its dissolution."

General Provisions
FRANCISCO LIM vs. EQUITABLE PCI BANK, now known as the BANCO DE ORO
UNIBANK INC., January 15, 2014, J. del Castillo
All property of the marriage is presumed to be conjugal, unless it is shown that it is
owned exclusively by the husband or the wife; that this presumption is not
overcome by the fact that the property is registered in the name of the husband or
the wife alone 2and that the consent of both spouses is required before a conjugal
property may be mortgaged. However, we find it iniquitous to apply the foregoing
presumption especially since the nature of the mortgaged property was never
raised as an issue before the RTC, the CA, and even before this Court. In fact,
petitioner never alleged in his Complaint that the said property was conjugal in
nature.
PHILIPPINE NATIONAL BANK v JOSE GARCIA and CHILDREN NORA GARCIA,
JOSE GARCIA, JR., BOBBY GARCIA and JIMMY GARCIA and HEIRS OF ROGELIO
GARCIA NAMELY: CELEDONIO GARCIA, DANILO GARCIA, ELSA GARCIA, FERMIN
GARCIA, HEHERSON GARCIA, GREGORIO GARCIA, IMELDA GARCIA and JANE
GARCIA, G.R No. 182839, June 2, 2014 J. BRION

37

Registration of a property alone in the name of one spo use does not destroy its
conjugal nature. What is material is the time when the property was acquired. The
registration of the property is not conclusive evidence of the exclusive ownership of
the husband or the wife. Although the property appears to be registered in the name
of the husband, it has the inherent character of conjugal property if it was acquired
for valuable consideration during marriage. In order to rebut the presumptive
conjugal nature of the property, the petitioner must present strong, clear and
convincing evidence of exclusive ownership of one of the spouses. The burden of
proving that the property belongs exclusively to the wife or to the husband rests
upon the party asserting it.
Dewara v. Lamela G.R. NO. 179010, Apr. 11, 2011 647 SCR A 483
All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the
husband or to the wife. Registration in the name of the husband or the
wife alone does not destroy this presumption.
De Leon v. De Leon G.R. NO. 185063 , Jul. 23, 2009 593 SCRA 768
In the case at bar, ownership over what was once a PHHC lot and
covered by the PHHC-Bonifacio Conditional Contract to Sell was only
transferred during the marriage of Bonifacio and Anita. Evidently, title to
the property in question only passed to Bonifacio after he had fully paid
the purchase price on June 22, 1970.
Section 2. Exclusive Property of Each Spouse (Articles 109-115)
Villegas v. Lingan G.R. NO. 153839 , Jun. 29, 2007 526 SCRA 63
Consequently, as correctly held by the CA, Marilou acquired ownership
of the subject property. All rights and title of the judgment obligor are
transferred upon the expiration of the right of redemption. And where the
redemption is made under a property regime governed by the conjugal
partnership of gains, Article 109 of the Family Code provides that
property acquired by right of redemption is the exclusive property of the
spouses redeeming the property.

Section 3. Conjugal Partnership Property (Articles 116-120); Article


160 NCC
Presumption in Favor of Conjugality
Tan vs. CA, 273 SCRA 229, 236 (1997)

38

For the presumption to apply, it is not e ven necessary to prove that the
property was acquired with funds of the partnership. In fact, e ven when
the manner in which the property was acquired does not appear, the
presumption applies and it will be considered conjugal property.
Imani v. MBTC, G.R. NO.187023,Nov. 17, 2010 635 SCRA 357
The party who invokes it must first prove that the property was acquired
during the marriage. Proof of acquisition during the coverture is a
condition sine qua non to the operation of the presumption in favor of
the conjugal partnership.
Pisuea vs. Heirs of Petra Unating, G.R. NO. 132803 , Aug. 31, 1999
313 SCRA 384
The words "married to" were merely descriptive of Petra Unating's status
at the time the lot was awarded and registered in her name. Since Petra
Unating did not leave any other property, will or debt upon her demise in
1948, the property in question was thus inherited by her children, Felix
and Catalina Villar; and her husband, Aquilino Villar.
Improvement on Separate Property
Determination of Ownership
Ferrer v. Ferrer, G.R. NO.166496 , Nov. 29, 2006 508 SCRA 570
The obligation to reimburse rests on the spouse upon whom ownership
of the entire property is vested. There is no obligation on the part of the
purchaser of the property, in case the property is sold by the ownerspouse.
Section 4.Charges Upon & Oblig.of the Conjugal Partnership (Articles
121-123)
Alipio vs. Court of Appeals, G.R. NO. 134100, Sept. 29, 2000.
A creditor cannot sue the surviving spouse of a decedent in an ordinary
proceeding for the collection of a sum of money chargeable against the
conjugal partnership and that the proper remedy is for him to file a claim
in the settlement of estate of the decedent.
Homeowners Savings & Loan Bank vs. Dailo, 453 SCRA 283 (2005)

39

The burden of proof that the debt was contracted for the benefit of the
conjugal partnership of gains lies with the creditor-party litigant claiming
as such.
Ayala Investment & Development Corp. vs. Court of Appeals, 286
SCRA 272 (1998)
Where the husband contracts obligations on behalf of the family
business, the law presumes, and rightly so, that such obligation will
redound to the benefit of the conjugal partnership.
Ching vs. CA, G.R. NO. 124642 , Feb. 23, 2004 423 SCRA 356

The barefaced fact that the shares of stocks were registered in the
corporate books of Citycorp Investment Philippines solely in the name of
the petitioner-husband does not constitute proof that the petitionerhusband, not the conjugal partnership, owned the same.
Carlos vs. Abelardo, G.R. NO. 146504 , Apr. 09, 2002 380 SCRA 361
On the same principle, acknowledgment of the loan made by the
defendant-wife binds the conjugal partnership since its proceeds
redounded to the benefit of the family. Hence, defendant-husband and
defendant-wife are jointly and severally liable in the payment of the loan.

SBTC v. M ar Tierra Corp., G.R. NO. 143382 , Nov. 29, 2006 508
SCRA 419
To hold the conjugal partnership liable for an obligation pertaining to the
husband alone defeats the objective of the Civil Code to protect the
solidarity and well being of the family as a unit. The underlying concern
of the law is the conservation of the conjugal partnership. Hence, it limits
the liability of the conjugal partnership only to debts and obligations
contracted by the husband for the benefit of the conjugal partnership.
Ros v. PNB Laoag Br., G.R. NO.170166, Apr. 06, 2011 647 SCRA 334
It is enough that the benefit to the family is apparent at the signing of
the contract. From the very nature of the contract of loan or services, the
family stands to benefit from the loan facility or services to be rendered
to the business or profession of the husband.

40

Pana v. Heirs of Jose Juanite G.R. NO. 164201,Dec. 10, 2012 687
SCRA 414
Contrary to Efrens contention, Article 121 above allows payment of the
criminal indemnities imposed on his wife, Melecia, out of the partnership
assets even before these are liquidated. Indeed, it states that such
indemnities "may be enforced against the partnership assets after the
responsibilities enumerated in the preceding article have been covered."
No prior liquidation of those assets is required.

Section 5. Administration of the Conjugal Partnership Property


(Articles 124-125)
Joint Administration of CPG
Disposition or Encumbrance of CPG
Rules under the Civil Code
SERCONSISION R. MENDOZA v AURORA MENDOZA FERMIN, G.R No. 177235,
July 7, 2014. J. Peralta
As Leonardo and Serconsision were married sometime in 1985, the applicable
provision governing the property relations of the spouses is Article 172 of the Civil
Code of the Philippines which states that the wife cannot bind the conjugal
partnership without the husbands consent. The disposal by the wife of their
conjugal property without the husbands consent is voidable under Article 173,
which states that contracts entered by the husband without the consent of the wife
when such consent is required are annullable at her instance during the marriage
and within ten years from the transaction questioned.
In the present case, the fictitious Deed of Absolute Sale was executed on September
22, 1986, one month after Leonardo died. Auroraas one of the heirs and the duly
appointed administratrix of Leonardos estate, had the right therefore to seek for
the annulment of the Deed of Sale as it deprived her and the other legal heirs of
Leonardo of their hereditary rights.
SOLEDAD L. LAVADIA v HEIRS OF JUAN LUCES LUNA, represented by
GREGORIO Z. LUNA and EUGENIA ZABALLERO-LUNA, G.R No. 171914, July 23,
2014. J. BERSAMIN
Due to the second marriage between Atty. Luna and the petitioner being void ab
initio by virtue of its being bigamous, the properties acquired during the bigamous
marriage were governed by the rules on co-ownership, conformably with Article
144 of the Civil Code.

41

In such a situation, whoever alleges co-ownership carried the burden of proof to


confirm such fact. To establish co-ownership, therefore, it became imperative for the
Lavadia to offer proof of her actual contributions in the acquisition of property. Her
mere allegation of co-ownership, without sufficient and competent evidence, would
warrant no relief in her favor.

Tinitigan vs. Tinitigan, Sr., NO. L- 45418, October 30, 1980, 100
SCRA 619.
A husband may sell property belonging to the conjugal partnership even
without the consent of the wife if the sale is necessary to answer for a big
conjugal liability which might endanger the familys economic standing.
This is one instance where the wifes consent is not required and,
impliedly, no judicial intervention is necessary.
Spouses Guiang vs. Court of Appeals, G.R. No. 125172. June 26,
1998,
Under the Civil Code, the encumbrance or alienation of a conjugal real
property by the husband absent the wifes consent, is voidable and not
void.
Roxas vs. CA G.R. NO. 92245, Jun. 26, 1991 198 SCRA 541
The joinder of the wife, although unnecessary for an oral lease of
conjugal realty which does not exceed one year in duration, is required in
a lease of conjugal realty for a period of more than one year, such a lease
being considered a conveyance and encumbrance within the provisions
of the Civil Code requiring the joinder of the wife in the instrument by
which real property is conveyed or encumbered
Guiang vs. CA, G.R. NO. 125172, Jun. 26, 1998 291 SCRA 372
The sale of a conjugal property requires the consent of both the husband
and the wife. The absence of the consent of one renders the sale null and
void, while the vitiation thereof makes it merely voidable. Only in the
latter case can ratification cure the defect.
Jader-M analo vs. Camaisa, G.R. NO. 147978, Jan. 23, 2002 374
SCRA 498
Respondent Norma Camaisa admittedly did not give her written consent
to the sale. Even G.R.anting that respondent Norma actively participated
in negotiating for the sale of the subject properties, which she denied,
her written consent to the sale is required by law for its validity.
42

Significantly, petitioner herself admits that Norma refused to sign the


contracts to sell.

Rules under the Family Code


Uy vs. CA, G.R. NO. 10955, Nov. 29, 2000 346 SCRA 246
In regular manner, the rules on summary judicial proceedings under the
Family Code govern the proceedings under Article 124 of the Family
Code. The situation contemplated is one where the spouse is absent, or
separated in fact or has abandoned the other or consent is withheld or
cannot be obtained. Such rules do not apply to cases where the non consenting spouse is incapacitated or incompetent to give consent. In
this case, the trial court found that the subject spouse "is an
incompetent" who was in comatose.
Ravina v. Villa Abrille G.R. NO. 160708, Oct. 16, 2009 604 SCRA
120
Just like the rule in absolute community of property, if the husband,
without knowledge and consent of the wife, sells conjugal property, such
sale is void. If the sale was with the knowledge but without the approval
of the wife, thereby resulting in a disagreement, such sale is annullable
at the instance of the wife who is given five (5) years from the date the
contract implementing the decision of the husband to institute the case.
De la Cruz v. Segovia, G.R. NO. 149801, Jun. 26, 2008 555 SCRA
453
While Florindas husband did not affix his signature to the above mentioned Agreement, we find no ground to disturb the uniform findings
of the trial court and appellate court that Renato, by his actuations,
agreed and gave his conformity to the Agreement. As found by the courts
below, Renatos consent to the Agreement was drawn from the fact that
he was present at the time it was signed by the sisters and their
witnesses; he had knowledge of the Agreement as it was presented to him
for his signature, although he did not sign the same because his wife
Florinda insisted that her signature already carried that of her husband;
Renato witnessed the fact that Leonila contributed her hard earned
savings in the amount of P36,000.00 to complete their share in the
purchase price of the properties in question in the total amount of
P180,000.00.
Section 6. Dissolution of the Conjugal Partnership Regime (Articles
126-128)

43

After the marriage of petitioner and respondent has been declared void, petitioner
filed a complaint for the partition of the house and lot obtained by them during their
marriage. The SC ruled that what governs them is Art. 147 of the Family Code. Under
this article, property acquired by both spouses through their work and industry
shall be governed by the rules on equal co-ownership. Any property acquired during
the union is prima facie presumed to have been obtained through their joint efforts.
A party who did not participate in the acquisition of the property shall be
considered as having contributed to the same jointly if said party's efforts consisted
in the care and maintenance of the family household. Efforts in the care and
maintenance of the family and household are regarded as contributions to the
acquisition of common property by one who has no salary or income or work or
industry. In the case at bar since the former spouses both agreed that they acquired
the subject property during the subsistence of their marriage, it shall be presumed
to have been obtained by their joint efforts, work or industry, thus, the property is
jointly owned by them in equal shares. MARIETTA N. BARRIDO vs. LEONARDO V.
NONATO, G.R. No. 176492, October 20, 2014, J. Peralta

MBTC v. Pascual, G.R. NO. 163744, Feb. 29, 2008 547 SCRA 246
Termination of Conjugal Property Regime does not ipso facto End the
Nature of Conjugal Ownership. While the declared nullity of marriage of
Nicholson and Florencia severed their marital bond and dissolved the
conjugal partnership, the character of the properties acquired before
such declaration continues to subsist as conjugal properties until and
after the liquidation and partition of the partnership.
Dio v. Dio, G.R. NO. 178044, Jan. 19, 2011 640 SCRA 178
The trial court erred in ordering that a decree of absolute nullity of
marriage shall be issued only after liquidation, partition and distribution
of the parties properties under Article 147 of the Family Code. The ruling
has no basis because Section 19(1) of the Rule does not apply to cases
governed under Articles 147 and 148 of the Family Code.
Espinosa v. Omaa, AC. 9081, Oct 12, 2011 659 SCRA 1
Extrajudicial dissolution of the conjugal partnership without judicial
approval is void. The Court has also ruled that a notary public should
not facilitate the disintegration of a marriage and the family by
encouraging the separation of the spouses and extrajudicially dissolving
the conjugal partnership, which is exactly what Omaa did in this case.
The "Kasunduan Ng Paghihiwalay" has no legal effect and is against
public policy.

44

Section 7. Liquidation of the Conjugal Partnership Assets &


Liabilities (Articles 129-133);
Agtarap v. Agtarap, G.R. NO. 177099, Jun. 8, 2011 651 SCRA 455
We hold that the general rule does not apply to the instant case
considering that the parties are all heirs of Joaquin and that no rights of
third parties will be impaired by the resolution of the ownership issue.
More importantly, the determination of whether the subject properties
are conjugal is but collateral to the probate courts jurisdiction to settle
the estate of Joaquin.

Go v. Servacio, G.R. NO. 157537, Sept. 7, 2011 657 SCRA 10


There being no dispute that Protacio, Sr. and Marta were married prior to
the effectivity of the Family Code on August 3, 1988, their property
relation was properly characterized as one of conjugal partnership
governed by the Civil Code. Upon Martas death in 1987, the conjugal
partnership was dissolved, pursuant to Article 175 (1) of the Civil Code,
and an implied ordinary co-ownership ensued among Protacio, Sr. and
the other heirs of Marta with respect to her share in the assets of the
conjugal partnership pending a liquidation following its liquidation.

CHAPTER 5.SEPARATION OF PROP. OF THE SPOUSES &


ADM INISTRATION OF COMMON PROPERTY BY ONE SPOUSE
DURING THE M ARRIAGE (Arts 134-142)
CHAPTER 6. REGIME OF SEPARATION OF PROPERTY (Articles 143 146)
Grounds
Voluntary Separation of Property
Maquilan v. M aquilan, G.R. NO. 155409, Jun. 08, 2007 524 SCRA
166
Under Article 143 of the Family Code, separation of property may be
effected voluntarily or for sufficient cause, subject to judicial approval.
The questioned Compromise Agreement which was judicially approved is
exactly such a separation of property allowed under the law.
Effects of Decree Granting Separation of Property

45

CHAPTER 7. PROPERTY REGIMES OF UNIONS W ITHOUT MARRIAGE


(Articles 147-148)
Valdes vs. RTC Br. 102, QC G.R. NO. 122749, Jul. 31, 1996 260
SCRA 221
Whether or not, Articles 50, 51 and 52 in relation to Articles 102 and
129 of the Family Code govern the disposition of the family dwelling in
cases where a marriage is declared void ab initio, including a marriage
declared void by reason of the psychological incapacity of the spouses.
The rules set up to govern the liquidation of either the absolute
community or the conjugal partnership of gains, the property regimes
recognized for valid and voidable marriages (in the latter case until the
contract is annulled), are irrelevant to the liquidation of the co-ownership
that exists between common-law spouses.
Mallilin, Jr. vs. Castillo, G.R. NO. 136803, Jun. 16, 2000 333 SCRA
628
The Family Code, in addition to providing that a co-ownership exists
between a man and a woman who live together as husband and wife
without the benefit of marriage, likewise provides that, if the parties are
incapacitated to marry each other, properties acquired by them through
their joint contribution of money, property or industry shall be owned by
them in common in proportion to their contributions which, in the
absence of proof to the contrary, is presumed to be equal.
Dio v. Dio, G.R. NO. 178044,Jan. 19, 2011 640 SCRA 178
Petitioners marriage to respondent was declared void under Article 36 of
the Family Code and not under Article 40 or 45. Thus, what governs the
liquidation of properties owned in common by petitioner and respondent
are the rules on co-ownership. In Valdes, the Court ruled that the
property relations of parties in a void marriage during the period of
cohabitation is governed either by Article 147 or Article 148 of the Family
Code. The rules on co-ownership apply and the properties of the spouses
should be liquidated in accordance with the Civil Code provisions on coownership. Under Article 496 of the Civil Code, partition may be made by
aG.R.eement between the parties or by judicial proceedings. It is not
necessary to liquidate the properties of the spouses in the same
proceeding for declaration of nullity of marriage.
Lacbayan v. Samoy, G.R. NO. 165427, M ar. 21, 2011 645 SCRA 677
A careful perusal of the contents of the so-called Partition AG.R.eement
indicates that the document involves matters which nece ssitate prior
settlement of questions of law, basic of which is a determination as to
46

whether the parties have the right to freely divide among themselves the
subject properties. Moreover, to follow petitioners argument would be to
allow respondent not only to admit against his own interest but that of
his legal spouse as well, who may also be lawfully entitled co-ownership
over the said properties.
Cario v. Cario, G.R. NO. 132529, Feb. 02, 2001 351 SCRA 127
As to the property regime of petitioner Susan Nicdao and the deceased,
Article 147 of the Family Code governs. This article applies to unions of
parties who are legally capacitated and not barred by any impediment to
contract marriage, but whose marriage is nonetheless void for other
reasons, like the absence of a marriage license
San Luis v. San Luis G.R. NO. 133743, Feb. 06, 2007 514 SCRA 294
In the instant case, respondent would qualify as an interested person
who has a direct interest in the estate of Felicisimo by virtue of their
cohabitation, the existence of which was not denied by petitioners. If she
proves the validity of the divorce and Felicisimos capacity to remarry,
but fails to prove that her marriage with him was validly performed
under the laws of the U.S.A., then she may be conside red as a co-owner
under Article 144 76 of the Civil Code
TITLE V. THE FAM ILY HOME
CHAPTER 1. THE FAM ILY AS AN INSTITUTION (Articles 149-151)
Tuason vs. CA, 256 SCRA 158 (1996)
Our family law is based on the policy that marriage is not a mere
contract but a social institution in which the state is vitally interested.
Hontiveros vs. RTC Iloilo City, G.R. NO. 125465, Jun. 29, 1999 309
SCRA 340
Religious relationship and relationship by affinity are not given any legal
effect in this jurisdiction. Consequently, private respondent Ayson, who
is described in the complaint as the spouse of respondent Hontiveros,
and petitioner Maria Hontiveros, who is admittedly the spouse of
petitioner Augusto Hontiveros, are considered strangers to the
Hontiveros family, for purposes of Art. 151.
Gayon v. Gayon, 36 SCRA 104 (1970)

47

The enumeration of "brothers and sisters" as member of the same family


does not comprehend "sisters-in-law." In that case, then Chief Justice
Concepcion emphasized that "sisters-in-law" (hence, also "brother-inlaw") are not listed under Art. 217 of the New Civil Code as members of
the same family.

Magbaleta vs. Gonong, 76 SCRA 511


Efforts to compromis are not a jurisdictional prerequisite for the
maintenance of an action whenever a stranger to the family is a party
thereto, whether as necessary or indispensable one.
Tiggangay v. W acas, AM OCA 09-3243, April 1, 2013 694 SCRA 264
Indeed, "there is no affinity between the blood relatives of one spouse and
the blood relatives of the other. A husband is related by affinity to his
wifes brother, but not to the wife of his wifes brother. There is no affinity
between the husbands brother and the wifes sister; this is calle d
affinitas affinitatis."
CHAPTER 2. THE FAM ILY HOME (Arts 152-162)

Taneo, Jr. vs. CA, CA, 304 SCRA 308


Family home is a real right, which is gratuitous, inalienable and free
from attachment, constituted over the dwelling place and the land on
which it is situated, which confers upon a particular family the right to
enjoy such properties, which must remain with the person constituting it
and his heirs.
Taneo vs. Court of Appeals, G.R. NO. 108562, M ar. 09, 1999 304
SCRA 308
By the very definition of the law that the family home is the dwelling
house where a person and his family resides and the land on which it is
situated, it is understood that the house should be constructed on a
land not belonging to another.

Arriola v. Arriola, G.R. NO. 177703, Jan. 28, 2008 542 SCRA 666
Furthermore, Articles 152 and 153 specifically extend the scope of the
family home not just to the dwelling structure in which the family resides
48

but also to the lot on which it stands. Thus, applying these concepts, the
subject house as well as the specific portion of the subject land on which
it stands are deemed constituted as a family home by the deceased and
petitioner Vilma from the moment they began occupying the same as a
family residence 20 years back
Modequillo vs. Breva, G.R. No. 86355, M ay 31, 1990.
There is no need to constitute the same judicially or extrajudicially as
required in the Civil Code. If the family actually resides in the premises,
it is, therefore, a family home as contemplated by law
Patricio vs. Dario, G.R. NO. 170829, November 20, 2006.
Three requisites must concur before a minor beneficiary is entitled to the
benefits of Art. 159: (1) the relationship enumerated in Art. 154 of the
Family Code; (2) they live in the family home, and (3) they are dependent
for legal support upon the head of the family.
Cabang v. Basay, G.R. NO. 180587, M ar. 20, 2009 582 SCRA 172
The family home must be established on the properties of (a) the absolute
community, or (b) the conjugal partnership, or (c) the exclusive property
of either spouse with the consent of the other. It cannot be established
on property held in co-ownership with third persons. However, it can be
established partly on community property, or conjugal property and
partly on the exclusive property of either spouse with the consent of the
latter.
Olivia De M esa v. Acero, G.R. NO. 185064 Jan. 16, 2012 663 SCRA
40
The family homes exemption from execution must be set up and proved
to the Sheriff before the sale of the property at public auction. The
petitioners now are barred from raising the same. Failure to do so estop
them from later claiming the said exemption.
Manacop vs. CA, 277 SCRA 57 (1997)
Articles 152 and 153 of the Family Code do not have a retroactive effect
such that all existing family residences are deemed to have been
constituted as family homes at the time of their occupation prior to the
effectivity of the Family Code and are exempt from execution for the
payment of obligations incurred before the effectivity of the Family Code.

49

TITLE VI. PATERNITY & FILIATION


Chapter I Legitimate Children
Types of Filiation
Status of Children
Distinction between Paternity and Filiation
Laws governing Paternity and Filiation
Presumption of Legitimacy
How to impugn Childs Legitimacy

Benitez-Badua vs. CA G.R. NO. 105625, Jan. 24, 1994 229 SCRA 468
Article 170 of the Family Code is inapplicable to this case because this is
not an action to impugn the legitimacy of a child, but an action of the
private respondents to claim their inheritance as legal heirs of their
childless deceased aunt. They do not claim that petitioner Violeta
Cabatbat Lim is an illegitimate child of the deceased, but that she is not
the decedent's child at all.
Liyao vs. Tanhoti-Liyao,G.R. NO. 138961, M ar. 07, 2002 378 SCRA
563
The grounds for impugning the legitimacy of the child mentioned in
Article 255 of the Civil Code may only be invoked by the husband, or in
proper cases, his heirs under the conditions set forth under Article 262
of the Civil Code.
Labagla vs. Santiago, G.R. NO. 132305, Dec. 04, 2001 371 SCRA 360
A baptismal certificate, a private document, is not conclusive proof of
filiation. More so are the entries made in an income tax return, which
only shows that income tax has been paid and the amount thereof.
Macadangdang vs. Court of Appeals, 100 SCRA 73
In this case the husband and the wife continued to live in the same
province after their alleged separation, the Court did not discount the
possibility of physical access to each other considering their proximity to
50

each other and considering further that the wife still visited and
recuperated in her mothers house where her spouse resided with their
children.
Andal vs. M acaraig, 89 Phil 165
The court held that just because tuberculosis is advanced in a man does
not necessarily mean that he is incapable of sexual intercourse. There
are cases where persons suffering from tuberculosis can do the carnal
act even in the most crucial stage of health because then they seemed to
be more inclined to sexual intercourse.
Tison vs CA, 276 SCRA 582 (1997)
The issue of legitimacy cannot be attacked collaterally.
CHAPTER 2. PROOF OF FILIATION (Articles 172-174)
RODOLFO S. AGUILAR vs. EDNA G. SIASAT, G.R. No. 200169, January 28, 2015, J.
Del Castillo
The filiation of illegitimate children, like legitimate children, is established by (1) the
record of birth appearing in the civil register or a final judgment; or (2) an
admission of legitimate filiation in a public document or a private handwritten
instrument and signed by the parent concerned. In the absence thereof, filiation
shall be proved by (1) the open and continuous po ssession of the status of a
legitimate child; or (2) any other means allowed by the Rules of Court and special
laws. The due recognition of an illegitimate child in a record of birth, a will, a
statement before a court of record, or in any authentic writing is, in itself, a
consummated act of acknowledgment of the child, and no further court action is
required. In fact, any authentic writing is treated not just a ground for compulsory
recognition; it is in itself a voluntary recognition that does not require a separate
action for judicial approval.
It must be concluded that Rodolfo who was born during the marriage of Alfredo
Aguilar and Candelaria Siasat-Aguilar and before their respective deaths has
sufficiently proved that he is the legitimate issue of the Aguilar spouses. He
correctly argues, Alfredo Aguilars SSS satisfies the requirement for proof of filiation
and relationship to the Aguilar spouses under Article 172 of the Family Code; by
itself, said document constitutes an admission of legitimate filiation in a public
document or a private handwritten instrument and signed by the parent
concerned.
51

Solinap vs. Locsin Jr. G.R. NO. 146737 , Dec. 10, 2001 371 SCRA
711
Whether or not the certificate of live birth (Exhibit D) as presented by the
respondent, including the photograph showing that he and his mother
attended the deceased funeral, is sufficient to proof filiation of the
petitioner to the deceased. A birth certificate offers only prima facie
evidence of filiation and may be refuted by contrary evidence.
Verceles v. Posada, G.R. NO.159785, Apr. 27, 2007 522 SCRA 518
The court held that the due recognition of an illegitimate child in a record
of birth, a will, a statement before a court of record, or in any authentic
writing is, in itself, a consummated act of acknowledgement of the child,
and no further court action is required
De Asis vs CA, 303 SCRA 176
Paternity or filiation, or the lack of it, is a relationship that must be
judicially established and it is for the court to declare its existence or
absence.
Lucas v. Lucas, G.R. NO. 190710, Jun. 6, 2011 650 SCRA 667
Although a paternity action is civil, not criminal, the constitutional
prohibition against unreasonable searches and seizures is still
applicable, and a proper showing of sufficient justification under the
particular factual circumstances of the case must be made before a court
may order a compulsory blood test.
Rodriguez vs. CA, G.R. NO. 85723, Jun. 19, 1995 245 SCRA 150
When a recognition has been made by one parent, the name of the other
parent may be revealed in an action by the child to compel such other
parent to recognize him also.
Heirs of Cabais vs. CA, G.R. NO. 106314-15,Oct. 08, 1999 316 SCRA
338
A baptismal certificate, a private document, which, being hearsay, is not
a conclusive proof of filiation.

Cenido vs. Apacionado, G.R .NO. 132474, Nov. 19, 1999 318 SCRA
688
Under the law, this statement must be made personally by the parent
himself or herself, not by any brother, sister or relative; after all, the
52

concept of recognition speaks of a voluntary declaration by the parent, or


if the parent refuses, by judicial authority, to establish the paternity or
maternity of children born outside wedlock.

Tayag v. Tayag-Gallor, G.R. NO. 174680, M ar. 24, 2008 549 SCRA 68
Petitioner, however, overlooks the fact that respondents successional
rights may be established not just by a judicial action to compel
recognition but also by proof that she had been voluntarily acknowledged
and recognized as an illegitimate child. Respondent in this case had not
been given the opportunity to present evidence to show whether she had
been voluntarily recognized and acknowledged by her deceased father
because of petitioners opposition to her petition and motion for hearing
on affirmative defenses.

Puno v. Puno Ent. Inc., G.R. NO. 177066, Sept. 11, 2009 599 SCRA
585
A certificate of live birth purportedly 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 the certificate. The local
civil registrar has no authority to record the paternity of an illegitimate
child on the information of a third person.

Gotardo v. Buling, G.R. NO. 165166, Aug. 15, 2012 678 SCRA 436
We have held that such other proof of one's filiation may be a "baptismal
certificate, a judicial admission, a family bible in which [his] name has
been entered, common reputation respecting his pediG.R.ee, admission
by silence, the testimonies of witnesses, and other kinds of proof
admissible under Rule 130 of the Rules of Court." In this case, the
respondent established a prima facie case that the petitioner is the
putative father of Gliffze through testimony that she had been sexually
involved only with one man, the petitioner, at the time of her conception.
Rodulfo corroborated her testimony that the petitioner and the
respondent had intimate relationship.

Lucas v. Lucas, G.R . NO. 190710, Jun. 6, 2011 650 SCRA 667
Although a paternity action is civil, not criminal, the constitutional
prohibition against unreasonable searches and seizures is still
53

applicable, and a proper showing of sufficient justification under the


particular factual circumstances of the case must be made before a court
may order a compulsory blood test.

CHAPTER 3. ILLEGITIM ATE CHILDREN (Articles 175-176)


Rights of Illegitimate Children
Tonog vs. CA, G.R. NO. 122906 , Feb. 07, 2002 376 SCRA 523
In the case at bar, bearing in mind that the welfare of the said minor as
the controlling factor, the appellate court did not err in allowing her
father to retain in the meantime parental custody over her. Meanwhile,
the child should not be wrenched from her familiar surroundings, and
thrust into a strange environment away from the people and places to
which she had apparently formed an attachment.

Guy v. CA, G.R. NO. 163707, Sept. 15, 2006 502 SCRA 151
It is clear therefore that the resolution of the issue of prescription
depends on the type of evidence to be adduced by private respondents in
proving their filiation. However, it would be impossible to determine the
same in this case as there has been no reception of evidence yet.

De La Cruz v. Gracia G.R. NO. 177728, Jul. 31, 2009 594 SCRA 648
Where the private handwritten instrument is the lone piece of evidence
submitted to prove filiation, there should be strict compliance with the
requirement that the same must be signed by the acknowledging parent.
Where the private handwritten instrument is accompanied by other
relevant and competent evidence, it suffices that the claim of filiation
therein be shown to have been made and handwritten by the
acknowledging parent as it is merely corroborative of such other
evidence.
Uy v. Chu, G.R. NO. 183965, Sept. 18, 2009 600 SCRA 806
It is settled, then, in law and jurisprudence, that the status and filiation
of a child cannot be compromised. Public policy demands that there be
no compromise on the status and filiation of a child. Paternity and
filiation or the lack of the same, is a relationship that must be judicially

54

established, and it is for the Court to declare its existence or absence. It


cannot be left to the will or aG.R.eement of the parties.

CHAPTER 4. LEGITIM ATED CHILDREN (Articles 177-182);


See RA 9858
Legitimation
Concept and Definition
Who can be Legitimated
Procedure and effects of Legitimation
Abadilla vs. Tabiliran, Jr. A.M NO. M TJ-92-716, Oct. 25, 1995 249
SCRA 447
Whether or not, a child born out of wedlock, by parents who have a legal
impediment to marry each other, can be legitimated. As a lawyer and a
judge, respondent ought to know that, despite his subsequent marriage
to Priscilla, these three children cannot be legitimated nor in any way be
considered legitimate since at the time they were born, there was an
existing valid marriage between respondent and his first wife, Teresita B.
Tabiliran.
TITLE VII. ADOPTION
Domestic Adoption Act of 1988 (RA 8552)
as amended by RA 9523 (M arch 2009)
A.M . NO. 02-6-02-SC - Re: Proposed Rule on Domestic Adoption
Inter country Adoption Act of 1995 (RA 8043)
Amended IRR on Inter-Country Adoption (January 8, 2004)
Definition and concept of Adoption
Domestic Adoption and Inter country Adoption
Law governing Domestic Adoption
Who are qualified to adopt and to be adopted
Effects of Adoption
Rescission of Adoption
55

Procedure under ICA and DAA


Republic vs. Vergara, G.R. NO. 95551, M ar. 20, 1997 270 SCRA 206
The law here does not provide for an alien who is married to a former
Filipino citizen seeking to adopt jointly with his or her spouse a relative
by consanguinity, as an exception to the general rule that aliens may not
adopt.
Rosalina Dye cannot, on her own, adopt her brother and sister for the
law mandates joint adoption by husband and wife, subject to exceptions.
Republic vs. M iller, G.R. NO.125932, Apr. 21, 1999 306 5CRA 183
An alien qualified to adopt under the Child and Youth Welfare Code,
which was in force at the time of the filing of the petition, acquired a
vested right which could not be affected by the subsequent enactment of
a new law disqualifying him.
Republic vs. Toledano, G.R. NO.94147, Jun. 08, 1994 233 SCRA 9
The Family Code reiterated the rule by requiring that husband and wife
"must" jointly adopt, except in the cases mentioned before. Under the
said new law, joint adoption by husband and wife is mandatory

Cang vs. CA, G.R. NO.105308, Sept. 25, 1998 296 SCRA 128
Physical estrangement alone, without financial and moral desertion, is
not tantamount to abandonment. While admittedly, petitioner was
physically absent as he was then in the United States, he was not remiss
in his natural and legal obligations of love, care and support for his
children.
In re: Adoption of M ichelle & M ichael Lim G.R. NO.168992-93, M ay
21, 2009 588 SCRA 98
The filing of a case for dissolution of the marriage between petitioner and
Olario is of no moment. It is not equivalent to a decree of dissolution of
marriage. Until and unless there is a judicial decree for the dissolution of
the marriage between petitioner and Olario, the marriage still subsists.
That being the case, joint adoption by the husband and the wife is
required.

56

Republic vs. CA & Bobiles, G.R. NO.92326, Jan. 24, 199 2 205 SCRA
356
Under the Child and Youth Welfare Code, private respondent had the
right to file a petition for adoption by herself, without joining her
husband therein. When Mrs. Bobiles filed her petition, she was
exercising her explicit and unconditional right under said law.
Lahom vs. Sibulo, G.R. NO. 143989, July 14, 2003
R.A. NO. 8552 has unqualifiedly withdrawn from an adopter a
consequential right to rescind the adoption decree even in cases where
the adoption might clearly turn out to be undesirable.
TITLE VIII. SUPPORT
Concept of Support
G.R.ounds for Action for Support
Right to support
Order of liability for support
Contractual support vs Legal Support
Mangonon v. CA, G.R. NO. 125041 , June.30, 2006 494 SCRA 1
The grandparents are liable to support their grandchildren if the parent
cannot give support or sufficient support.
Lim v. Lim, G.R. NO. 163209, Oct. 30, 2009 604 SCRA 691
The inability of the parents to sufficiently provide for their children shifts
a portion of their obligation to the ascendants in the nearest degree, both
in the paternal (petitioners) and maternal lines, following the ordering in
Article 199.
Gan vs. Reyes, G.R. NO.145527, M ay.28, 2002 382 SCRA 357
A judgment ordering for support is immediately executory despite
pendency of appeal.
De Asis vs. CA, G.R. NO.127578, Feb. 15, 1999 303 SCRA 176
Whether or not, a renunciation of the existence of filiation of the child
and the putative father, made by the mother, is valid. It is true that in
order to claim support, filiation and,or paternity must first be shown
between the claimant and the parent, however, paternity and filiation or
the lack of the same is a relationship that must be judicially established
and it is for the court to declare its existence or absence.

57

TITLE IX. PARENTAL AUTHORITY


CHAPTER 1. GENERAL PROVISIONS (Articles 209-215)
Concept
Effects of Parental Authority
Santos Sr. v. CA, G.R. NO. 113054, M ar. 16, 1995 242 SCRA 407
When a parent entrusts the custody of a minor to another, such as a
friend or godfather, even in a document, what is given is merely
temporary custody and it does not constitute a renunciation of parental
authority. Even if a definite renunciation is manifest, the law still
disallows the same.
Parents who exercises Parental Authority
Joint Parental Authority
Rule in case of Separation of Parents
Perez v. CA, G.R. NO. 118870, M ar. 29, 1996 255 SCRA 661
Only the most compelling of reasons shall justify the court's awarding
the custody of such a child to someone other than his mother, such as
her unfitness to exercise sole parental authority. In the past the following
grounds have been considered ample justification to deprive a mother of
custody and parental authority: neglect, abandonment, unemployment
and immorality, habitual drunkenness, drug addiction, maltreatment of
the child, insanity and being sick with a communicable disease.
Laxamana v. Laxamana, G.R. NO. 144763, Sept. 3, 2002 388 SCRA
296
It is clear that every child [has] rights which are not and should not be
dependent solely on the wishes, much less the whims and caprices, of
his parents. His welfare should not be subject to the parents' say-so or
mutual agreement alone. Where, as in this case, the parents are already
separated in fact, the courts must step in to determine in whose custody
the child can better be assured the rights granted to him by law. The
need, therefore, to present evidence regarding this matter, becomes
imperative.
Beckett v. Sarmiento, Jr. AM NO. RTJ-12-2326, Jan. 30, 2013 689
SCRA 494
In a very real sense, then, a judgment involving the custody of a minor
child cannot be accorded the force and effect of res judicata. Now to
58

another point. In disputes concerning post-separation custody over a


minor, the well-settled rule is that no child under seven (7) years of age
shall be separated from the mother, unless the court finds compelling
reasons to order otherwise.
CHAPTER 2. SUBSTITUTE & SPECIAL PARENTAL AUTHORITY (Arts
216-219)
Parental Preference Rule
Concept
Who may exercise Substitute Parental Authority
Liability of persons exercising special Parental Authority
St. M arys Academy v. Carpitanos, G.R. NO. 143363, Feb. 6, 2002
376 SCRA 473
The liability for the accident, whether caused by the negligence of the
minor driver or mechanical detachment of the steering wheel guide of the
jeep, must be pinned on the minors parents primarily. The negligence of
petitioner St. Marys Academy was only a remote cause of the accident.
CHAPTER 3. EFFECT OF PARENTAL AUTHORITY UPON THE
PERSONS OF THE CHILDREN
Right to Childs Custody
Sagala-Eslao vs. CA, 266 SCRA 317, 323 (1997).
It is a rule long accepted by the courts that the right of parents to the
custody of their minor children is one of the natural rights incident to
parenthood, a right supported by law and sound public policy.
Cang vs. CA, 296 SCRA 128 (1998).
Parental authority cannot be entrusted to a person simply because he
could give the child a larger measure of material comfort than his natural
parent.
Duty to Provide Support
BBB, vs. AAA, G.R. No. 193225, February 09, 2015, J. Reyes

59

It was improper for BBB, knowing that CCC was not his biological son, to have CCC
legitimated after the celebration of BBB and AAAs marriage. The legal process of
legitimation was trifled with when BBB voluntarily but falsely acknowledged CCC as
his son. The principle of estoppel under Article 1431 thus applies, and it now bars
BBB from making an assertion contrary to his previous representations. He should
not be allowed to evade a responsibility arising from his own misrepresentations.
He is bound by the effects of the legitimation process. CCC remains to be BBBs son,
and pursuant to Article 179 of the Family Code, the former is entitled to the same
rights as those of a legitimate child, including the receipt of his fathers support.
Duty of Representation
Obedencio vs. M urillo, A.M . NO. RTJ-03-1753. Feb. 5, 2004 422
SCRA 21
Licel was only 14 years old, definitely a minor, on May 22, 2001, when
she was presented before respondents sala to affirm the execution of her
affidavit of desistance. This being the case, said affidavit should have
been executed with the concurrence of her parents. Licel could not
validly give consent to an affidavit of desistance, for a minor is
incompetent to execute such an instrument.

Liability of Parents for damages caused by their minor children


CHAPTER 4. EFFECT OF PARENTAL AUTHORITY UPON THE
PROPERTY OF THE CHILDREN
(Articles 225-227)

Lindain v. CA, G.R. NO. 95305 , Aug. 20, 199 212 SCRA 725
Under the law, a parent, acting merely as the legal (as distinguished
from judicial) administrator of the property of his/her minor children,
does not have the power to dispose of, or alienate, the property of said
children without judicial approval.
Neri v. Heirs of Hadji Yusop, G.R. No 194366, Oct. 10, 2012 683
SCRA 253
Administration includes all acts for the preservation of the property and
the receipt of fruits according to the natural purpose of the thing. Any
act of disposition or alienation, or any reduction in the substance of the
patrimony of child, exceeds the limits of administration. Thus, a father or
60

mother, as the natural guardian of the minor under parental authority,


does not have the power to dispose or encumber the property of the latte r
CHAPTER 5. SUSPENSION
AUTHORITY (Arts 228-233)

OR

TERMINATION

OF

PARENTAL

G.R.ounds for termination and suspension of parental authority


Bondagjy vs. Bondagjy, G.R. NO. 140817, Dec. 07, 2001 371 SCRA
64
Indeed, what determines the fitness of any parent is the ability to see to
the physical, educational, social and moral welfare of the children, and
the ability to give them a healthy environment as well as physical and
financial support taking into consideration the respective resources and
social and moral situations of the parents.
Cang vs CA,296 SCRA 128
In reference to abandonment of a child by his parent, the act of
abandonment imports any conduct of the parent which evinces a settled
purpose to forego all parental duties and relinquish all parental claims to
the child. It means neglect or refusal to perform the natural and legal
obligations of care and support which parents owe their children.
Title X. EMANCIPATION AND AGE OF MAJORITY; See RA 6809;
2176 & 2180 NCC
Concept
Effects of Emancipation
Title XI SUMMARY JUDICIAL PROCEEDINGS IN THE FAM ILY LAW
Family Courts Act and SC AM Orders and Circulars
CHAPTER 1. SCOPE OF APPLICATION (Article 238)
CHAPTER 2. SEPARATION IN FACT BETWEEN HUSBAND AND W IFE
(Articles 239-248)
See RA 9262 (Anti Violence against W omen and Children [VAWC])
and Implementing Rules &
Regulations
CHAPTER 3. INCIDENTS
(Articles 249-252)

INVOLVING

PARENTAL

AUTHORITY

61

See RA 9262 (Anti Violence against W omen and Children [VAW C]) &
IRR
A.M . NO. 02-11-12-SC- Re: Proposed Rule on Provisional Orders
(M arch 4, 2003)
A.M . NO. 03-02-05-SC- Re: Proposed Rule on Guardianship of M inors
(April 1, 2003)
A.M . NO. 03-04-SC- Re: Proposed Rule on Custody of M inors and
Writ of
Habeas Corpus in Relation to Custody of M inors (April 30, 2003)
CHAPTER 4. OTHER MATTERS
PROCEEDINGS (Article 253)

SUBJECT

TO

SUMMARY

Uy (Jardeleza) vs. CA, G.R. NO. 109557, Nov. 29, 2000 346 SCRA
246
Rule 95 of the ROC, not the Rule on Summary Proceedings in the Family
Code, shall apply in a sale of a conjugal property where one spouse is is
an incompetent. A comatose spouse is incompetent.

Republic v. Tango, G.R. NO.161062, Jul. 31, 2009 594 SCRA 560
By express provision of law, the judgment of the court in a summary
proceeding shall be immediately final and executory. As a matter of
course, it follows that no appeal can be had of the trial courts judgment
in a summary proceeding for the declaration of presumptive death of an
absent spouse under Article 41 of the Family Code.

Rep. v. Bermudez-Lorino G.R. NO. 160258 , Jan. 19, 2005 449 SCRA
5
In Summary Judicial Proceedings under the Family Code, there is no
reglementary period within which to perfect an appeal, precisely because
judgments rendered thereunder, by express provision of Section 247,
Family Code, supra, are "immediately final and executory". It was
erroneous, therefore, on the part of the RTC to give due course to the
Republics appeal and order the transmittal of the entire records of the
case to the Court of Appeals.

62

Title X. FUNERAL (Articles 305 -310, NCC)


The petitioner alleges that being a common law spouse who took care of the
deceased, she has the right to make funeral arrangements for the deceased. The
Supreme Court ruled that the duty and the right to make funeral arrangements are
confined within the family of the deceased particularly the spouse of the deceased to
the exclusion of a common law spouse. FE FLORO VALINO vs. ROSARIO D.
ADRIANO, FLORANTE D. ADRIANO, RUBEN D. ADRIANO, MARIA TERESA
ADRIANO ONGOCO, VICTORIA ADRIANO BAYONA, and LEAH ANTONETTE D.
ADRIANO, G.R. No. 182894, April 22, 2014, J. Mendoza

Title XII. CARE AND EDUCATION OF CHILDREN (Articles 356 363,


NCC)
PD 603 The Child and Youth W elfare Code
RA 9262 (Anti Violence against W omen and Children [VAW C]) and
IRR; RA 9523

Title XIII. USE OF SURNAMES (Articles 364-380, NCC)


RA 9255 An Act Allowing Illegitimate Children to Use the
Surname of their Father (Amending Art.
176 of the Family Code); IRR of 9255; Passport Law (RA 8239)
Title XIV. ABSENCE (Articles 381-396, NCC);
See Article 41 FC; Rules (Section 4) 73, 74,107, Revised Rules of
Court;
Arts.774 & 777; Art. 1456; Arts 22, 2142-2175; Wills & Succession

Chapter 1. Provisional M easures in Case of Absence


Chapter 2. Declaration of Absence
Chapter 3. Administration of the Property of the Absentee
Chapter 4. Presumption of Death
Chapter 5. Effect of Absence Upon the Contingent Rights of the
Absentee
TITLE XII FINAL PROVISIONS (Articles 254-257)
63

P ROP ERTY

Title I. CLASSIFICATION OF PROPERTY


PRELIM INARY PROVISIONS

Concept of Property
Classification of Property
Immovable vs M ovable Properties
Laurel vs. Abrogar,

G.R. NO. 155076,

Jan.

13,

2009

International telephone calls placed by Bay Super Orient Card holders,


the telecommunication services provided by PLDT and its business of
providing said services are not personal properties under Article 308 of
the Revised Penal Code. The construction by the respondents of Article
308 of the said Code to include, within its coverage, the aforesaid
international telephone calls, telecommunication services and business
is contrary to the letter and intent of the law.
The words "Personal property" under the Revised Penal Code must be
considered in tandem with the word "take" in the law. The statutory
definition of "taking" and movable property indicates that, clearly, not all
personal properties may be the proper subjects of theft. The general rule
is that, only movable properties which have physical or material
existence and susceptible of occupation by another are proper obje cts of
theft.
Kinds of Immovable Properties
Bicerra vs. Teneza, 6 SCRA 649, 651 (1962).
A house (or a building) is classified as immovable property by reason of
its adherence to the soil on which it is built. Thus, a building which is
merely superimposed on the soil is not a real property.
Punzalan, Jr. v. Vda. De Lacsamana, 121 SCRA 331 (1983)

64

A building treated separately from the land on which it stood is


immovable property and the mere fact that the parties to a contract seem
to have dealt with it separate and apart from the land on which it stood
in no wise changed its character as immovable property.
Tsai vs. CA, 366 SCRA 324
In the instant case, the parties: (1) executed a contract styled as Real
Estate Mortgage and Chattel Mortgage, instead of just Real Estate
Mortgage if indeed their intention is to treat all properties included
therein as immovable, and (2) attached to the said contract a separate
LIST OF MACHINERIES & EQUIPMENT. These facts, taken together,
evince the conclusion that the parties intention is to treat these units of
machinery as chattels.
Caltex Phils.,

Inc.,

vs.

CBAA, M ay

31,

1982

SC held that the said equipment and machinery, as appurtenances to


the gas station building or shed owned by Caltex (as to which it is
subject to realty tax) and which fixtures are necessary to the operation of
the gas station, for without them the gas station would be useless, and
which have been attached or affixed permanently to the gas station site
or embedded therein, are taxable improvements and machinery within
the meaning of the Assessment Law and the Real Property Tax Code.
MERALCO vs.

CBAA,

M ay

31,

1982

While the two storage tanks are not embedded in the land, they may,
nevertheless, be considered as improvements on the land, enhancing its
utility and rendering it useful to the oil industry. It is undeniable that the
two tanks have been installed with some deG.R.ee of permanence as
receptacles for the considerable quantities of oil needed by Meralco for its
operations.
Rights as property
MBTC v. Alejo, 364 SCRA 812, 819 (2001)
A real estate mortgage is a real right and a real property by itself.
Chapter 2 M ovable Property
Concept

65

Kinds of M ovable Property


Chapter 3 Property in Relation to the Person to whom it belongs
Public Dominion vs Private Ownership
Classification of Property depending on ownership
Constitutional basis of State Ownership Jura Regalia
Chavez v. Public Estates Authority , 415 SCRA 403 (2003)
Submerged lands are part of the States inalienable natural resources
and classified as property of public dominion.
Republic v.
144

Santos, G.R. NO. 180027,July

18, 2012 677 SCRA

Jura Regalia simply means that the State is the original proprietor of all
lands and, as such, is the general source of all private titles. Thus,
pursuant to this principle, all claims of private title to land, save those
acquired from native title, must be traced from some grant, whether
express or implied, from the State. Absent a clear showing that land had
been let into private ownership through the States imprimatur, such
land is presumed to belong to the State
Public ownership vs State Ownership
Public Service vs Public Use
Villarico v. Sarmiento, 442 SCRA 110, 115 2004
Public use means use which is not confined to privileged individuals,
but is open to the indefinite public.
Characteristics of Properties of Public Dominion
Menchavez vs Teves, Jr, 449 SCRA 380
Properties of public dominion may not be alienated but may be subject to
joint venture, or production-sharing agreements with private individuals
or corporations for their exploration, development and utilization.
Dacanay vs Asistio,Jr 208 SCRA 404

66

Properties of public dominion is outside the commerce of mend and it


cannot be alienated or leased or otherwise be the subject matter of
contracts.
Manila Lodge 761 vs CA, 73 SCRA 162
An intention to devote it to public use or to public service is sufficient
and it is not necessary that it must actually be used as such.
Republic vs CA, 132 SCRA 514
Properties of public dominion is not susceptible to private appropriation
and cannot be acquired by acquisitive prescription and thus they cannot
be registered under the Land Registration Law and be the subject of a
torrents title.
Manila International Airport Authority vs CA, 495 SCRA 591
Properties of public dominion, being for public use, are not subject to
levy, encumbrance or disposition through public or private sale. Any
encumbrance, levy on execution or auction sale of any property of public
dominion is void for being contrary to public policy.
Tufexis v. Olaguera 32 Phil. 654.
The usufruct of the public market was not subject to attachment on
account of its being of a public character.
Kinds of Properties of Public Dominion
Santos vs M oreno, 21 SCRA 1141
Canals constructed by private persons within their private lands and
devoted exclusively for private use are of private ownership.
Almagro vs.

Kwan, G.R. NO. 175806, Oct.

20,

2010

To qualify as foreshore land, it must be shown that the land lies between
the high and low water marks and is alternately wet and dry according to
the flow of the tide. The land's proximity to the waters alone does not
automatically make it a foreshore land.
Binalay v. M analo, 195 SCRA 374, 384 (1991)

67

The buyer did not acquire private ownership of the bed of the eastern
branch of the Cagayan River even if it was included in the deeds of
absolute sale executed by the sellers since the sellers could not have
validly sold land that constituted property of public dominion.
Hilario vs City of M anila, G.R. No. L-19570, April 27, 1967
The phrase banks of a river is understood to be those lateral strips
orzones of its beds which are washed by the stream only during such
highfloods as do not cause inundations. In other words, the banks refer
to the lateral lines or strips reached by the waters when the river is at
high tide.
Manila International Airport Authority vs. CA, 495 SCRA 591
No one can dispute that properties of public dominion mentioned in
Article 420 of the Civil Code, like roads, canals, rivers, torrents, ports
and bridges constructed by the State, are owned by the State. The term
ports includes seaports and airports. The MIAA Airport Lands and
Buildings constitute a port constructed by the State.
Reclaimed Properties
Republic vs. Paraaque, G.R. NO. 191109,July 18, 2012
677 SCRA 246
The subject reclaimed lands are still part of the public domain,
owned by the State and, therefore, exempt from payment of real
estate taxes. Here, the subject lands are reclaimed lands,
specifically portions of the foreshore and offshore areas of Manila
Bay. As such, these lands remain public lands and form part of
the public domain.
Patrimonial Property of the State
Conversion of Property of Public Dominion to Patrimonial Property
Yu Chang v. Republic, G.R. NO. 171726. Feb. 23, 2011
The classification of land is descriptive of its legal nature or status and
does not have to be descriptive of what the land actually looks like. The
fact that the area within which the subject parcels of land are located is
being used for residential and commercial purposes does not serve to
convert the subject parcels of land into aG.R.icultural land. It is
68

fundamental that before any land may be declassified from the forest
G.R.oup and converted into alienable or disposable land for
aG.R.icultural or other purposes, there must be a positive act from the
government.
Laurel v. Garcia,187 SCRA 797
Any conveyance of a real property falling under the patrimonial property
of the State must be authorized and approved by a law enacted by the
Congress.
Property for public use of Provinces, Cities, and Municipalities
Patrimonial Property of Political Subdivision
Title II Ownership
Ownership in General
DEPARTMENT OF EDUCATION, represented by its REGIONAL DIRECTOR
TERESITA DOMALANTA vs. MARIANO TULIAO, G.R. No. 205664, June 9, 2014, J.
Mendoza
In actions for recovery of possession, the plaintiff must show proof to support his
claim of his right to possession of the property. The defendant in turn must show
proof to controvert the plaintiffs claim; otherwise the court will rule for the
plaintiff. Thus, when a landowner filed an action for recovery of possession against a
public school which built a gymnasium on a parcel of land which the owner allowed
the school to use as an access road for the schoolchildren, and the plaintiff showed
as evidence tax declarations and a certificate of title over the property, the lone
testimonial evidence the DepEd presented is not sufficient to controvert the
landowners case. In addition, the landowners claim is not barred by laches when
the schools possession of the property is not adverse, and when the landowner
brought suit two years after he learned that the school is constructing a gymnasium
over the property.
HEIRS OF PACIANO YABAO, represented by REMEDIOS CHAN vs. PAZ LENTEJAS
VAN DER KOLK, G.R. No. 207266, June 25, 2014, J. Mendoza
A tax declaration is not a proof of ownership; it is not a conclusive evidence of
ownership of real property. In the absence of actual, public, and adverse possession,
the declaration of the land for tax purposes does not prove ownership.

69

MIDWAY MARITIME AND TECHNOLOGICAL FOUNDATION, represented by its


Chairman/President PhD in Education DR. SABINO M. MANGLICMOT vs.
MARISSA E. CASTRO, ET AL., G.R. No. 189061, August 6, 2014, J. Reyes
The petitioner is a lessee of a parcel of land and disputes the title of the owners of
the building built on the land they are leasing. The Supreme Court ruled that it is
settled that "[o]nce a contact of lease is shown to exist between the parties, the
lessee cannot by any proof, however strong, overturn the conclusive presumption
that the lessor has a valid title to or a better right of possession to the subject
premises than the lessee." Section 2(b), Rule 131 of the Rules of Court prohibits a
tenant from denying the title of his landlord at the time of the commencement of the
relation of landlord and tenant between them.
SUBIC BAY LEGEND RESORTS AND CASINOS, INC VS. BERNARD C.
FERNANDEZ, G.R. No. 193426, Sept ember 29, 2014, J. Del Castillo
Though casino chips do not constitute legal tender, there is no law which prohibits
their use or trade outside of the casino which issues them. In any case, it is not
unusual nor is it unlikely that respondent could be paid by his Chinese client at
the former' s car shop with the casino chips in question; said transaction, if not
common, is nonetheless not unlawful. These chips are paid for anyway; petitioner
would not have parted with the same if their corresponding representative
equivalent - in legal tender, goodwill, or otherwise was not received by it in return
or exchange. Given this premise - that casino chips are considered to have been
exchanged with their corresponding representative value - it is with more reason
that this Court should require petitioner to prove convincingly and persuasively that
the chips it confiscated from Ludwin and Deoven were indeed stolen from it; if so,
any Tom, Dick or Harry in possession of genuine casino chips is presumed to have
paid for their representative value in exchange therefor. If petitioner cannot prove
its loss, then Article 559 cannot apply; the presumption that the chips were
exchanged for value remains..

ROLANDO S. ABADILLA, JR. vs. SPOUSES BONIFACIO P. OBRERO and


BERNABELA N. OBRERO, G.R. No. 199448, November 12, 2014, J. Reyes
The petitioner claims that they are the rightful owners of the disputed property.
Thus, an ejectment proceeding cannot be commenced against them. The Supreme
Court ruled that "ejectment proceedings are summary proceedings intended to
provide an expeditious means of protecting actual possession or right to possession
of property. Title is not involved. The sole issue to be resolved is who is entitled to
the physical or material possession of the premises or possession de facto." "Issues
as to the right of possession or ownership are not involved in the action; evidence

70

thereon is not admissible, except only for the purpose of determining the issue of
possession."
Concept of Ownership
Attributes of Ownership
Recovery of Property
Accion Reinvindicatoria; Ejectment
THE HEIRS OF EUGENIO LOPEZ, SR. NAMELY, OSCAR M. LOPEZ,
MANUEL M. LOPEZ AND PRESENTACION L. PSINAKIS, vs. THE
HONORABLE FRANCISCO QUERUBIN, IN HIS CAPACITY AS PRESIDING
JUDGE OF THE REGIONAL TRIAL COURT OF ANTIPOLO, BRANCH 74,
THE HEIRS OF ALFONSO SANDOVAL AND HIS WIFE ROSA RUIZ,
REPRESENTED BY THEIR ATTORNEY-IN-FACT, MRS. IMELDA RIVERA,
G.R. No. 155405/HEIRS OF EUGENIO LOPEZ, vs. ALFONSO SANDOVAL AND
ROMAN OZAETA, JR., G.R. No. 164092, MARCH 18, 2015, J. Leonardo-de
Castro
One who claims to be the owner of a property that is possessed by another must
bring the appropriate judicial action for its physical recovery. The term "judicial
process" could mean no less than an ejectment suit or reinvindicatory action in
which the ownership claims of the contending parties may be properly heard and
adjudicated.
Del Fierro v. Seguiran G.R. NO. 152141,Aug. 8, 2011 The first
requisite in an accion reinvindicatoria requires that the person who
claims that he has a better right to the property must first fix the identity
of the land he is claiming by describing the location, area and boundaries
thereof. Anent the second requisite, i.e., the claimant's title over the
disputed area, the rule is that a party can claim a right of ownership only
over the parcel of land that was the object of the deed.
Del
Rosario
NO. 170575,June

v. Roxas
8, 2011

Foundation,

G.R.

In forcible entry, the possession is illegal from the beginning and the only
issue is who has the prior possession de facto. In unlawful detainer,
possession was originally lawful but became unlawful by the expiration
or termination of the right to possess and the issue of rightful possession
is the one decisive, for in such action, the defendant is the party in

71

actual possession and the plaintiff's cause of action is the termination of


the defendant's right to continue in possession.
Jose v. Alfuerto, G.R. No 169380, Nov. 26, 2012
Acts merely tolerated are "those which by reason of neighborliness or
familiarity, the owner of property allows his neighbor or another person
to do on the property; they are generally those particular services or
benefits which ones property can give to another without material injury
or prejudice to the owner, who permits them out of friendship or
courtesy.
Barrientos v.Rapal, G.R. NO. 169594,July

20,

2011

A person who occupies the land of another at the latter's tolerance or


permission, without any contract between them, is necessarily bound by
an implied promise that he will vacate the same upon demand, failing
which a summary action for ejectment is the proper remedy against
them.
Doctrine of Self Help
German M anagement & Services, Inc. v. CA. 177 SCRA 495 (1989)
The doctrine of self-help can only be exercised at the time of actual or
threatened dispossession, and not when possession has already been
lost.
Right to Enclose or Fence
Limitations on Ownership
Right to sub-surface and airspace
Republic of the Philippines v. Court of Appeals, 160 SCRA 228
Rights to the sub-surface or sub-soil are indivisible, and, consequently,
require a definitive and categorical classification.
National Power Corporation v. Ibrahim, 526 SCRA 149 (2007)
The landowners right extends to such height or depth where it is
possible for them to obtain some benefit or enjoyment, and it is
extinguished beyond such limit as there would be no more interest
protected by law. In this case, the landowners could have dug upon their
72

property motorized deep wells but were prevented from doing so by the
authorities precisely because of the construction and existence of the
tunnels underneath the surface of their property.

Right to Hidden Treasure


Palero-Tan v. Urdaneta AM NO. P --07--2399, Jun. 18, 2008 - When
a person who finds a thing that has been lost or mislaid by the owner
takes the thing into his hands, he acquires physical custody only and
does not become vested with legal possession. In assuming such
custody, the finder is charged with the obligation of restoring the thing to
its owner. It is thus respondents duty to report to his superior or his
officemates that he found something.
Right to Airspace
Chapter 2 Right of Accession
General Provision
Accession
VILLASI VS. GARCIA, G.R. No. 190106, January 15, 2014, J. Perez
While it is a hornbook doctrine that the accessory follows the principal, that is, the
ownership of the property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or
artificially, such rule is not without exception. In cases where there is a clear and
convincing evidence to prove that the principal and the accessory are not owned by
one and the same person or entity, the presumption shall not be applied and the
actual ownership shall be upheld. To set the record straight, while petitioner may
have proven his ownership of the land, as there can be no other piece of evidence
more worthy of credence than a Torrens certificate of title, he failed to present any
evidence to substantiate his claim of ownership or right to the possession of the
building.
The rule on accession is not an iron-clad dictum. On instances where this Court was
confronted with cases requiring judicial determination of the ownership of the
building separate from the lot, it never hesitated to disregard such rule. The case at
bar is of similar import. When there are factual and evidentiary evidence to prove
that the building and the lot on which it stands are owned by different persons, they
shall be treated separately. As such, the building or the lot, as the case may be, can
be made liable to answer for the obligation of its respective owner.
73

BANK OF THE PHILIPPINE ISLANDS vs. VICENTE VICTOR C. SANCHEZ ET AL.;


GENEROSO TULAGAN ET AL. vs. VICENTE VICTOR C. SANCHEZ ET AL.;
REYNALDO V. MANIWANG vs. VICENTE VICTOR C. SANCHEZ and FELISA
GARCIA YAP, G.R. No. 179518; G.R. No. 179835; G.R. No. 179954, November 19,
2014, J. Velasco Jr.
Article 453 of the Civil Code clearly reads that a landowner is considered in bad faith
if he does not oppose the unauthorized construction thereon despite knowledge of
the same. The fact that the Sanchezes did take action to oppose the construction on
their property by writing the HLURB and the City Building Official of Quezon City.
The Court agrees with both the RTC and the CA that Garcia and TSEI are builders in
bad faith. They knew for a fact that the property still belonged to the Sanchezes and
yet proceeded to build the townhouses not just without the authority of the
landowners, but also against their will.
Prevailing jurisprudence reveals the following established rules:
1. Well settled is the rule that all persons dealing with property covered by a torrens
certificate of title are not required to go beyond what appears on the face of the title.
When there is nothing on the certificate of title to indicate any cloud or vice in the
ownership of the property, or any encumbrance thereon, 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 subsequently defeat his right
thereto.
2. This rule, however, admits of an exception as where the purchaser or mortgagee
has knowledge of a defect or lack of title in the vendor, or that he was aware
ofsufficient facts to induce a reasonably prudent man to inquire into the status of
the property in litigation.
3. Likewise, one who buys property withfull knowledge of the flaws and defects in
the title of the vendor is enough proof of his bad faith and estopped from claiming
that he acquired the property in good faith against the owners.

4. To prove good faith, the following conditions must be present: (a) the seller is the
registered owner of the land; (b) the owner is in possession thereof; and (3) at the
time of the sale, the buyer was not aware of any claim or interest of some other
person in the property, or of any defect or restriction in the titleof the seller or in his
capacity to convey title to the property. All these conditions must be present,
otherwise, the buyer is under obligation to exercise extra ordinary diligence by
scrutinizing the certificates of title and examining all factual circumstances to enable
him to ascertain the sellers title and capacity to transfer any interest in the
property.
74

Definition
Kinds of Accession
Right of Accession with respect to what is produced by property
Accession Discreta
Kinds of Fruits
Right of Accession with respect to immovable property
Accession Continua
Fundamental rules
Industrial Accession
Building, Planting, and Sowing (BPS)
Rules in BPS in the presence of good faith and bad faith
Concept of Good Faith
Rules governing BPS
Floreza v. Evangelista, 96 SCRA 130
The rule under article 448 of the NCC applies only when the builder,
planter or sower believes he had the right so to build, plant or sow
because he thinks he owns the land or believes himself to have a claim of
title.
Mercado v. CA, 162 SCRA 75, 85 1988
To be deemed a builder in good faith, it is essential that a person asserts
title to the land on which he builds, i.e., it is essential that he be a
possessor in concept of owner and that he be unaware that there exists
in his title or mode of acquisition any flaw which invalidates it.
Bulacanag v. Francisco, 122 SCRA 498, 502 (1983)
Article 448 applies only to a case where one builds on land in the belief
that he is the owner thereof and it does not apply where ones only
interest in the land is that of a lessee under a rental contract.
75

PNB vs De Jesus, 411 SCRA 557


The landowner cannot refuse to exercise either option and compel
instead the owner of the building or improvement to remove it from the
land.
Javier v. Concepcion, Jr 94 SCRA 212 (1979)
The value of the useful improvements consisting of various fruits,
bamboos, a house and camarin made of strong materials based on the
market value of the said improvements.
Nuguid v. CA, 452 SCRA 243, 252 (2005)
The right of retention is considered as one of the measures devised by
the law for the protection of builders in good faith. Its object is to
guarantee full and prompt reimbursement as it permits the actual
possessor to remain in possession while he has not been reimbursed (by
the person who defeated him in the case for possession of the property)
for those necessary expenses and useful improvements made by him on
the things possessed.
Ballatan v. Court of Appeals 304 SCRA 37 (1999)- In the event the
landowner elects to sell the land to the builder in good faith, the price
must be fixed at the prevailing market value at the time of payment. In
the event of the failure of the builder to pay the land, after the owner
thereof has chosen this alternative, the builders right of retention
provided in Article 546 is also lost.
Natural Accession
Kinds of Natural Accession
Alluvion
Rules governing Alluvion
Heirs of Emiliano Navarro v. IAC, 268 SCRA 74, 85 (1997)
Riparian owners are, strictly speaking, distinct from owners, the latter
being owners of lands bordering the shore of the sea or lakes or other
tidal waters.
Vda. de Nazareno v. CA, 257 SCRA 598 (1996)
76

Since the subject land was the direct result of the dumping of sawdust
by the Sun Valley Lumber Co., the accretion was man-made, hence, Art.
457 does not apply. Ergo, the subject land is part of the public domain.
Roxas v. Tuason, 9 Phil. 408.
The right of the owners of the bank adjacent to rivers to the accretion
which they receive by virtue of the action of the waters of the river is ipso
jure and there is no need of an action of the owner of the bank to possess
the new addition since it belongs to him by the very fact of the addition.
Cureg v. IAC, 177 SCRA 313 (1989)
The accretion to registered land does not preclude acquisition of the
additional area by another person through prescription.
Avulsion
Definition
Avulsion vs Alluvion
Rules Governing Avulsion
Change of course of River
Agne v. Director of Lands, 181 SCRA 793, 805 (1990)
There need be no act on their part to subject the old river bed to their
ownership, as it is subject thereto ipso jure from the moment the mode of
acquisition becomes evident, without need of any formal act of
acquisition. Such abandoned riverbed had fallen to the private ownership
of the owner of the land through which the new river bed passes even
without any formal act of his will and any unauthorized occupant thereof
will be considered as a trespasser.
Formation of Island
Right of Accession with respect to M ovable Property
Adjunction or Conjunction
Rules governing Adjunction or Conjunction
Presence and absence of badfaith
77

Commixtion or Confusion
Specification
Chapter 3 Quieting of Title
Action to Quiet Title
HEIRS OF PACIFICO POCIDO, ET AL. VS. ARSENIA AVILA AND EMELINDA CHUA G.R. No.
199146, March 19, 2014, J. Carpio

The DENR Decision was affirmed by the Office of the President which held that lands
within the Baguio Townsite Reservation belong to the public domain and are no
longer registrable under the Land Registration Act. The Office of the President
ordered the disposition of the disputed property in accordance with the applicable
rules of procedure for the disposition of alienable public lands within the Baguio
Townsite Reservation, particularly Chapter X of Commonwealth Act No. 141 on
Townsite Reservations and other applicable rules. Having established that the
disputed property is public land, the trial court was therefore correct in dismissing
the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction
to determine who among the parties have better right over the disputed property
which is admittedly still part of the public domain.

For an action to quiet title to prosper, two indispensable requisites must concur,
namely: (1) the plaintiff or complainant has a legal or equitable title to or interest in
the real property subject of the action; and (2) the deed, claim, encumbrance, or
proceeding claimed to be casting cloud on the title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or efficacy. The
first requisite was not complied with. Petitioners alleged open, continuous,
exclusive, and uninterrupted possession of the subject property is belied by the fact
that respondents, in 2005, entered into a Contract of Lease with the Avico Lending
Investor Co. over the subject lot without any objection from the petitioners.
Petitioners inability to offer evidence tending to prove that Bienvenido and
Escolastica Ibarra transferred the ownership over the property in favor of
petitioners is likewise fatal to the latters claim.
JUANARIO G. CAMPIT v ISIDRA B. GRIP A, PEDRO BARDIAGA, and SEVERINO
BARDIAGA, represented by his son ROLANDO BARDIAGA, G.R No. 195443,
September 17, 2014. J. BRION

78

Considering that the action for annulment and cancellation of title filed by the
respondents is substantially in the nature of an action for reconveyance based on an
implied or constructive trust, combined with the fact that the respondents have
always been in possession of the subject property, the Court treated Civil Case No.
18421 as an action to quiet title, the filing of which does not prescribe.
Requisites
HERMINIO M. DE GUZMAN, FOR HIMSELF AND AS ATTORNEY-IN-FACT OF:
NILO M. DE GUZMAN, ANGELINO DE GUZMAN, JOSEFINO M. DE GUZMAN,
ESTRELLA M. DE GUZMAN, TERESITA DE GUZMAN, ELSA MARGARITA M. DE
GUZMAN, EVELYN M. DE GUZMAN, MA. NIMIA M. DE GUZMAN, ANTOLIN M. DE
GUZMAN, AND FERDINAND M. DE GUZMAN vs. TABANGAO REALTY
INCORPORATED, G.R. No. 154262, February 11, 2015, J. Leonardo-De Castro
The petitioners allege that they are the owners of the disputed property. This
allegation is anchored on the assertion that at the time of the death of their parents,
the disputed property is still under the latters name. The Supreme Court ruled that
for an action to quiet title to prosper, two indispensable requisites must concur: (1)
the plaintiff or complainant has a legal or equitable title or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting a cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy.
Petitioners Complaint in Civil Case No. TM-1118 failed to allege these two requisites
for an action to quiet title.
CLT REALTY DEVELOPMENT CORPORATION vs. PHIL-VILLE DEVELOPMENT
AND HOUSING CORPORATION, REPUBLIC OF THE PHILIPPINES (THROUGH
THE OFFICE OF THE SOLICITOR GENERAL) AND THE REGISTER OF DEEDS OF
METRO MANILA DISTRICT III, CALOOCAN, G.R. No. 160728, March 11, 2015, J.
Leonardo-De Castro
Thus, both requisites in order for an action for quieting of title to prosper have been
met in this case: (1) Phil-Ville had established its equitable title or interest in the 16
parcels of land subject of the action; and (2) TCT No. T-177013, found to overlap
titles to said properties of Phil-Ville, was previously declared invalid.
Chung Jr. vs. M ondragon, G.R. 179754,Nov.

21,

2012

The issues in a case for quieting of title are fairly simple; the plaintiff
need to prove only two things, namely: "(1) the plaintiff or complainant
has a legal or an equitable title to or interest in the real property subject
of the action; and (2) that the deed, claim, encumbrance or proceeding
claimed to be casting a cloud on his title must be shown to be in fact
79

invalid or inoperative despite its prima facie appearance of validity or


legal efficacy. Stated differently, the plaintiff must show that he has a
legal or at least an equitable title over the real property in dispute, and
that some deed or proceeding beclouds its validity or efficacy."
Bahais v.

Pascual, G.R. 169272,July

11,

2012

Under Articles 476 and 477 of the Civil Code, the two (2) indispensable
requisites in an action to quiet title are: (1) that the plaintiff or
complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) that a deed, claim, encumbrance
or proceeding is claimed to be casting cloud on his title.
In this case, an action to quiet title is not the proper remedy because
petitioner no longer had any legal or equitable title to or interest in the
lots. The petitioners status as possessor and owner of the lots had be en
settled in the final and executory December 4, 1985 decision of the
Bureau of Lands that the DENR Secretary and the OP affirmed on
appeal. Thus, the petitioner is not entitled to the possession and
ownership of the lots.
Vda.de Aviles v. CA, 264 SCRA 473
An action for quieting of title may not be brought for the purpose of
settling a boundary dispute.
Title III- Co-ownership
Definition
Requisites
Nature of Co-ownership
LOURDES C. FERNANDEZ v NORMA VILLEGAS and any person acting in her
behalf including her family, G.R No. 200191, August 20, 2014. J. PERLASBERNABE
Article 487 of the Civil Code explicitly provides that any of the co -owners may bring
an action for ejectment, without the necessity of joining all the other co -owners as
co-plaintiffs because the suit is deemed to be instituted for the benefit of all. To
reiterate, both Lourdes and Cecilia are co-plaintiffs in the ejectment suit. Thus, they
share a commonality of interest and cause of action as against respondents. Hence,

80

the lone signature of Lourdes on the verification attached to the CA petition


constituted substantial compliance with the rules.
EXTRAORDINARY DEVELOPMENT CORPORATION vs. HERMINIA F. SAMSONBICO and ELY B. FLESTADO, G.R. No. 191090, October 13, 2014, J. Perez
A co-owner cannot rightfully dispose of a particular portion of a co -owned property
prior to partition among all the co-owners. However, this should not signify that the
vendee does not acquire anything at all in case a physically segregated area of the
co-owned lot is in fact sold to him. Since the co-owner/vendors undivided interest
could properly be the object of the contract of sale between the parties, what the
vendee obtains by virtue of such a sale are the same rights as the vendor had as co owner, in an ideal share equivalent to the consideration given under their
transaction. In other words, the vendee steps into the shoes of the vendor as co owner and acquires a proportionate abstract share in the property held in common.
VICENTE TORRES, JR., CARLOS VELEZ, AND THE HEIRS OF MARIANO VELEZ,
NAMELY: ANITA CHIONG VELEZ, ROBERT OSCAR CHIONG VELEZ, SARAH JEAN
CHIONG VELEZ AND TED CHIONG VELEZ vs. LORENZO LAPINID AND JESUS
VELEZ, G.R. No. 187987, November 26, 2014, J. Perez
Under Article 493 of the New Civil Code, a co-owner has an absolute ownership of
his undivided and pro-indiviso share in the co-owned property. He has the right to
alienate, assign and mortgage it, even to the extent of substituting a third person in
its enjoyment provided that no personal rights will be affected. In this case, Jesus
can validly alienate his co-owned property in favor of Lapinid, free from any
opposition from the co-owners. Lapinid, as a transferee, validly obtained the same
rights of Jesus from the date of the execution of a valid sale. Absent any proof that
the sale was not perfected, the validity of sale subsists. In essence, Lapinid steps into
the shoes of Jesus as co-owner of an ideal and proportionate share in the property
held in common. Thus, from the perfection of contract on 9 November 1997, Lapinid
eventually became a co-owner of the property. Even assuming that the petitioners
are correct in their allegation that the disposition in favor of Lapinid before partition
was a concrete or definite portion, the validity of sale still prevails.
Alejandrino v. Court of Appeals, 295 SCRA 536, 548, Sept. 17, 1998
Each co-owner of property which is held pro indiviso exercises his rights
over the whole property and may use and enjoy the same with no other
limitation than that he shall not injure the interests of his co-owners.
Sources of Co-ownership
Rules Governing Co-ownership
81

A stipulation in a contract requiring a co-owner to secure an authority from his coowners for the alienation of his share, as seemingly indicated in this case, should be
considered mere surplusage and does not, in any way, affect the validity or the
enforceability of the contract. Pursuant to Article 493, a co-owner has the right to
alienate his proindiviso share in the co-owned property even without the consent of
his co-owners.
REYNALDO DELA ROSA, Namely: TEOFISTA DELA ROSA, JOSEPHINE SANTIAGO
AND JOSEPH DELA ROSA v MARIO A. BA TONGBACAL, IRENEO BATONGBACAL,
JOCELYN BA TONGBACAL, NESTOR BATONGBACAL AND LOURDES BA
TONGBACAL, G.R No. 179205, July 30, 2014 J. PEREZ
A contract of sale is a consensual contract, which becomes valid and binding upon
the meeting of minds of the parties on the price and the object of the sale. The mere
inadequacy of the price docs not affect its validity when both parties are in a
position to form an independent judgment concerning the transaction, unless fraud,
mistake or undue influence indicative of a defect in consent is present. A contract
may consequently be annulled on the ground of vitiated consent and not due to the
inadequacy of the price. In the case at bar, however, no evidence to prove fraud,
mistake or undue influence indicative of vitiated consent is attendant.
RAUL V. ARAMBULO AND TERESITA DELA CRUZ VS. GENARO NOLASCO AND JEREMY
SPENCER NOLASCO, G.R. No. 189420
March 26, 2014, J. Perez

The issue in this case is whether respondents, as coowners, can be compelled by


the court to give their consent to the sale of their shares in the coowned properties.
The ultimate authorities in civil law, recognized as such by the Court, agree that co
owners such as respondents have over their part, the right of full and absolute
ownership. Such right is the same as that of individual owners which is not
diminished by the fact that the entire property is coowned with others. That part
which ideally belongs to them, or their mental portion, may be disposed of as they
please, independent of the decision of their coowners. Therefore the respondents
cannot be ordered to sell their portion of the coowned properties.
De Guia v. CA, 413 SCRA 114, 124 (2003).
A co-owner of an undivided thing or right is an owner of the whole and
over the whole he exercises the right of dominion.
Bailon-Casilao v. CA, 160 SCRA 738, 745, April 15, 1988
The appropriate recourse of co-owners in cases where their consent were
not secured in a sale of the entire property as well as in a sale merely of
the undivided shares of some of the co-owners is an action for partition
under Rule 69 of the Revised Rules of Court.
82

Gapacan v. Omipet, 387 SCRA 383.


A state of co-ownership exists only because there is unity of the object or
property and plurality of subjects.
Extinguishment of Co-ownership
VILMA QUINTOS, represented by her Attorney-in-Fact FIDEL I. QUINTOS, JR.;
FLORENCIA I. DANCEL, represented by her Attorney-in-Fact FLOVY I. DANCEL;
and CATALINO L. IBARRA v PELAGIA I. NICOLAS, NOLI L. IBARRA, SANTIAGO L.
IBARRA, PEDRO L. IBARRA, DAVID L. IBARRA, GILBERTO L. IBARRA, HEIRS OF
AUGUSTO L. IBARRA, namely CONCHITA R., IBARRA, APOLONIO IBARRA, and
NARCISO IBARRA, and the spouses RECTO CANDELARIO and ROSEMARIE
CANDELARIO. G.R No. 210252, June 16, 2014. J. VELASCO, JR.
A partition case of a land co-owned by ten siblings was dismissed for the failure of
the parties and counsels to appear despite due notice under Rule 17, Section 3 of the
Rules of Court. Later, in a quieting of title case involving the same property, the
siblings demanded partition. The occupant of the lot claimed that the action for
partition is barred by res judicata.
It is indeed true that dismissal with prejudice under the above-cited rule amply
satisfies one of the elements of res judicata. However, dismissal with prejudice
under Rule 17, Sec. 3 of the Rules of Court cannot defeat the right of a co -owner to
ask for partition at any time, provided that there is no actual adjudication of
ownership of shares yet.
A perusal of Article 494 of the Civil Code shows that the law generally does not favor
the retention of co-ownership as a property relation, and is interested instead in
ascertaining the co-owners specific shares so as to prevent the allocation of
portions to remain perpetually in limbo. Thus, the law provides that each co-owner
may demand at any time the partition of the thing owned in common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co owners under Art. 494 of the Civil Code, the latter must prevail. To construe
otherwise would diminish the substantive right of a co-owner through the
promulgation of procedural rules. Such a construction is not sanctioned by the
principle, which is too well settled to require citation, that a substantive law cannot
be amended by a procedural rule. This is supported by Art. 496 of the New Civil
Code.
Thus SC held that Art. 494is an exception to Rule 17, Sec. 3 of the Rules of Court to
the effect that even if the order of dismissal for failure to prosecute is silent on
83

whether or not it is with prejudice, it shall be deemed to be without prejudice.


This is not to say, however, that the action for partition will never be barred by res
judicata. There can still be res judicata in partition cases concerning the same
parties and the same subject matter once the respective shares of the co-owners
have been determined with finality by a competent court with jurisdiction or if the
court determines that partition is improper for co-ownership does not or no longer
exists.
Adille v. Court of Appeals, 157 SCRA 455, Jan. 29, 1988.
The rule in this jurisdiction is that the redemption by one co-heir or coowner of the property in its totality does not vest in him ownership over it
since redemption is not a mode of terminating a co-ownership.
Sanchez v. Court of Appeals, 404 SCRA 541, 548, June 20, 2003
Co-ownership is a form of trust and every co-owner is a trustee for the
others, hence, the relationship of such co-owner to the other co-owners
is fiduciary in character and attribute.
Pangan v. Court of Appeals, 166 SCRA 375, 382, Oct. 17, 1988
If the co-owner actually holding the property asserts exclusive dominion
over it against the other co-owners, the corollary of the rule is that he
can acquire sole title to it after the lapse of the prescribed prescriptive
period.
Heirs of Flores Restar v. Heirs of Dolores R. Cichon 475 SCRA 731,
Nov. 22, 2005
While the action to demand partition of a co-owned property does not
prescribe, a co-owner may acquire ownership thereof by prescription
where there exists a clear repudiation of the co-ownership, and the coowners are apprised of the claim of adverse and exclusive ownership.
Delima v. Court of Appeals, 201 SCRA 641, Sept. 24, 1991
From the moment one of the co-owners claims that he is the absolute
and exclusive owner of the properties and denies the others any share
therein, the question involved is no longer one of partition but of
ownership
Maritegui v. Court of Appeals 205 SCRA 337,
84

When a co-owner or co-heir registered the properties in his name in


fraud of other co-owners or co-heirs, prescription can only be deemed to
have commenced from the time the latter discovered the formers act of
defraudation.
Lacbayan v.

Samoy, G.R. NO. 165427,

M ar.

21,

2011

The first phase of a partition and,or accounting suit is taken up with the
determination of whether or not a co-ownership in fact exists, and a
partition is proper (i.e., not otherwise legally proscribed) and may be
made by voluntary aG.R.eement of all the parties interested in the
property. This phase may end with a declaration that plaintiff is not
entitled to have a partition either because a co-ownership does not exist,
or partition is legally prohibited.
Cruz v.

Catapang G.R. 164110,

Feb.

12,

2008

Alterations include any act of strict dominion or ownership and any


encumbrance or disposition has been held implicitly to be an act of
alteration. The construction of a house on the co-owned property is an
act of dominion.
Santos
v.
Heirs
of
Lustre,
G.R.
NO. 151016, Aug.
06, 2008 - any adverse ruling in the earlier
case will not, in any way, prejudice the heirs who did not join, e ven if
such case was actually filed in behalf of all the co-owners. In fact, if an
action for recovery of property is dismissed, a subsequent action by a coheir who did not join the earlier case should not be barred by prior
judgment.
Title V Possession
SPOUSES REYNALDO AND HILLY G. SOMBILON v ATTY. REY FERDINAND
GARAY AND PHILIPPINE NATIONAL BANK, G.R No. 179914, June 16, 2014. DEL
CASTILLO
The spouses Sombilon executed a mortgage over their property to secure a loan
from PNB, who upon the Sombilons default, foreclosed the mortgage and acquired
the property. The spouses then approached their neighbor Atty. Garay if he could
advance the money needed to repurchase the lot. However, the spouses later found
out that PNB sold the lot to Atty. Garay. PNB applied for a writ of possession. The
Sombilons claim that PNB has no legal personality to apply for the writ since the lot
had already been sold to Atty. Garay, who is disqualified from purchasing the subject
property pursuant to paragraph 5, Article 1491 of the Civil Code.
85

The Court ruled that PNB has the right to the writ. The allegedly invalidity of the sale
between PNB and Atty. Garay is not a ground to oppose or defer the issuance of the
Writ of Possession as this does not affect PNBs right to possess the subject
property. As the registered owner, PNB is entitled to the possession of the subject
property as a matter of right.
NORMA V. JAVATE vs. SPOUSES RENATO J. TIOTUICO AND LERMA C. TIOTUICO,
G.R. No. 187606, March 09, 2015, J. Peralta
If the purchaser is a third party who acquired the property after the redemption
period, a hearing must be conducted to determine whether possession over the
subject property is still with the mortgagor or is already in the possession of a third
party holding the same adversely to the defaulting debtor or mortgagor. In the
instant case, while respondents' petition for the issuance of a writ of possession was
filed ex-parte, a hearing was, nonetheless, conducted when the RTC gave
petitioner her day in court by giving her the opportunity to file various pleadings to
oppose respondent's petition. Moreover, there is no dispute that petitioner
remained in possession of the subject property prior to the issuance of the
questioned writ of possession. It is, thus, clear that respondents' resort, as a
subsequent or third-party purchaser, the petition for the issuance of a writ of
possession is proper.
MARCELA M. DELA CRUZ VS. ANTONIO O. HERMANO, ET AL. G.R. No. 160914.
March 25, 2015, J. Sereno
To prove their claim of having a better right to possession, respondents submitted
their title thereto and the latest Tax Declaration prior to the initiation of the
ejectment suit. The CA erred in considering those documents sufficient to prove
respondents prior physical possession. Similarly, tax declarations and realty tax
payments are not conclusive proofs of possession. They are merely good indicia of
possession in the concept of owner based on the presumption that no one in ones
right mind would be paying taxes for a property that is not in ones actua l or
constructive possession.
The respondents have claimed from the inception of the controversy up to now that
they are using the property as their vacation house, this claim, however, is not
substantiated by any corroborative evidence. Their uncorroborated claim of that
fact, even if made under oath, is self-serving. . The respondents failed to discharge
their burden of proving the element of prior physical possession.
Concept of Possession
Elements of Possession
86

Kinds of Possession
Possession in Good Faith and Bad Faith
PNB v. De Jesus, G.R. NO. 149295, September 23, 2003 - One is
considered in good faith if he is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it.
Parilla v. Pilar, G.R. NO. 167680, Nov. 30, 2006 - One whose interest
is merely that of a holder, such as a mere tenant, agent or usufructuary,
is not qualified to become a possessor builder in good faith.
Abalos
v.
Heirs
of
Torio,
G.R.
NO. 175444,
Dec.
14,
2011 - Acts of possessory character
executed due to license or by mere tolerance of the owner are inadequate
for purposes of acquisitive prescription. Possession, to constitute the
foundation of a prescriptive right, must be en concepto de dueo, or, to
use the common law equivalent of the term, that possession should be
adverse, if not, such possessory acts, no matter how long, do not start
the running of the period of prescription.
Chapter 2 Acquisition of Possession
ANACLETO C. MANGASER, REPRESENTED BY HIS ATTORNEY-IN-FACT
EUSTAQUIO DUGENIAvs. DIONISIO UGAY, G.R. No. 204926, December 03, 2014,
J. Mendoza
For a forcible entry suit to prosper, the plaintiffs must allege and prove: (a) that they
have prior physical possession of the property; (b) that they were deprived of
possession either by force, intimidation, threat, strategy or stealth; and, (c) that the
action was filed within one (1) year from the time the owners or legal possessors
learned of their deprivation of the physical possession of the property.
There is only one issue in ejectment proceedings: who is entitled to physical or
material possession of the premises, that is, to possession de facto, not possession
de Jure? Issues as to the right of possession or ownership are not involved in the
action; evidence thereon is not admissible, except only for the purpose of
determining the issue of possession.
As a rule, the word "possession" in forcible entry suits indeed refers to nothing more
than prior physical possession or possession de facto, not possession de Jure or legal
possession in the sense contemplated in civil law. Title is not the issue, and the
absence of it "is not a ground for the courts to withhold relief from the parties in an
ejectment case."
87

Possession can be acquired by juridical acts. These are acts to which the law gives
the force of acts of possession. Examples of these are donations, succession,
execution and registration of public instruments, inscription of possessory
information titles and the like. The reason for this exceptional rule is that possession
in the eyes of the law does not mean that a man has to have his feet on every square
meter of ground before it can be said that he is in possession. It is sufficient that
petitioner was able to subject the property to the action of his will.

CARMENCITA SUAREZ VS. MR. AND MRS. FELIX E. EMBOY JR. AND MARILOU P. EMBOYDELANTAR G.R. No. 187944 March 12, 2014, J. Reyes

In a complaint for unlawful detainer, the following key jurisdictional facts must be
alleged and sufficiently established: (1) initially, possession of property by the
defendant was by contract with or by tolerance of the plaintiff;(2) eventually, such
possession became illegal upon notice by plaintiff to defendant of the termination of
the latters right of possession; (3) thereafter, the defendant remained in possession
of the property and deprived the plaintiff of the enjoyment thereof; and (4) within
one year from the last demand on defendant to vacate the property, the plaintiff
instituted the complaint for ejectment.
In the case at bar, the first requisite mentioned above is markedly
absent. Carmencita failed to clearly allege and prove how and when the
respondents entered the subject lot and constructed a house upon it. Carmencita
was likewise conspicuously silent about the details on who specifically permitted
the respondents to occupy the lot, and how and when such tolerance came
about. Instead, Carmencita cavalierly formulated a legal conclusion, sans factual
substantiation, that (a) the respondents initial occupation of the subject lot was
lawful by virtue of tolerance by the registered owners, and (b) the respondents
became deforciants unlawfully withholding the subject lots possession after
Carmencita, as purchaser and new registered owner, had demanded for the former
to vacate the property. It is worth noting that the absence of the first requisite
assumes even more importance in the light of the respondents claim that for
decades, they have been occupying the subject lot as owners thereof.
SPOUSES EDMUNDO DELA CRUZ AND AMELIA CONCIO-DELA CRUZ VS. SPOUSES
RUFINO R. CAPCO AND MARTY C. CAPCO G.R. No. 176055, March 17, 2014
"The only issue in an ejectment case is the physical possession of real property
possession de facto and not possession de jure." But "[w]here the parties to an
ejectment case raise the issue of ownership, the courts may pass upon that issue to
determine who between the parties has the better right to possess the property."
Here, both parties anchor their right to possess based on ownership, i.e., the spouses
Dela Cruz by their own ownership while the spouses Capco by the ownership of
Rufino as one of the heirs of the alleged true owner of the property. Thus, the MeTC
88

and the RTC correctly passed upon the issue of ownership in this case to determine
the issue of possession. However, it must be emphasized that "[t]he adjudication of
the issue of ownership is only provisional, and not a bar to an action between the
same parties involving title to the property."
BONIFACIO PIEDAD, MARIA PIEDAD represented by INSPIRACION DANAO
v SPOUSES VICTORIO GURIEZA and EMETERIA M. GURIEZA, G.R No.
207525, June 18, 2014. J. PERLAS-BERNABE
Unlawful detainer is an action to recover possession of real property from one who
unlawfully withholds possession thereof after the expiration or termination of his
right to hold possession under any contract, express or implied. An ejectment case,
based on the allegation of possession by tolerance, falls under the category of
unlawful detainer. Where the plaintiff allows the defendant to use his/her property
by tolerance without any contract, the defendant is necessarily bound by an implied
promise that he/she will vacate on demand, failing which, an action for unlawful
detainer will lie. In unlawful detainer actions, the Court shall solely resolve the issue
as to who between the parties has the better right of possession de facto over the
subject lot. Corollary thereto, issues pertaining to ownership are better threshed out
in another action instituted for such purpose.
FE U. QUIJANO v ATTY. DARYLL A. AMANTE, G.R No. 164277, October 8, 2014. J.
BERSAMIN
Where the plaintiff does not prove her alleged tolerance of the defendant's
occupation, the possession is deemed illegal from the beginning. Hence, the action
for unlawful detainer is an improper remedy. But the action cannot be considered as
one for forcible entry without any allegation in the complaint that the entry of the
defendant was by means of force, intimidation, threats, strategy or stealth .

ROBERT AND NENITA DE LEON, vs. GILBERT AND ANALYN DELA LLANA, G.R.
No. 212277, February 11, 2015, J. Perlas-Bernabe
An unlawful detainer complaint was filed by Gilbert dela Llana against petitioner
Robert de Leon and Gil de Leon. Robert and Gil contend that the lease contract was
simulated. It is quite apparent that the MCTC-Nabunturan-Mawab actually intended
to mean that the undated lease contract subject of this case was absolutely
simulated. Its pronouncement that the parties did not intend to be bound by their
agreement is simply inconsistent with relative simulation.
Bunyi v.
Factor, G.R. NO.
591 SCRA 350

172547,

Jun.

30,

2009

89

For one to be considered in possession, one need not have actual or


physical occupation of every square inch of the property at all times.
Possession can be acquired not only by material occupation, but also by
the fact that a thing is subject to the action of ones will or by the proper
acts and legal formalities established for acquiring such right, possession
can be acquired by juridical acts.
People v.

Peaflorida, G.R. NO.

175604,

Apr.

10,

2008

Knowledge refers to a mental state of awareness of a fact. Since courts


cannot penetrate the mind of an accused and thereafter state its
perceptions with certainty, resort to other evidence is necessary. Animus
possidendi, as a state of mind, may be determined on a case-to-case
basis by taking into consideration the prior or contemporaneous acts of
the accused, as well as the surrounding circumstances.
Soledad v. People, G.R. NO.
184274,
Feb
23,
2011 - The
acquisition of possession involves two elements: the corpus or the
material holding of the thing, and the animus possidendi or the intent to
possess it. Animus possidendi is a state of mind, the presence or
determination of which is largely dependent on attendant e vents in each
case. It may be inferred from the prior or contemporaneous acts of the
accused, as well as the surrounding circumstances.
Chua--Bruce

v.

CA, G.R. NO.

109595,

Apr.

27,

2000

Juridical possession means a possession which gives the transferee a


right over the thing which the transferee may set up even against the
owner.In this case, petitioner was a cash custodian who was primarily
responsible for the cash-in-vault. Her possession of the cash belonging to
the bank is akin to that of a bank teller, both being mere bank employees
Effects of Possession
PAUL P. GABRIEL, JR, et al. vs. CARMELING CRISOLOGO, G.R. No. 204626,
June 9, 2014, J. Mendoza
When it is shown that the plaintiff in a case of accion publiciana had a valid title
issued in her name in 1967, within the period which the Supreme Court held that
titles issued over the same properties were valid; that she has been paying the
realty taxes on the said properties since l969; that she likewise appointed an
administrator of the disputed lands, and more importantly, there is no question that
she offered to sell to petitioners the portions of the subject properties occupied by

90

them, then she deserves to be respected and restored to her lawful possession as
provided in Article 539 of the New Civil Code.
SUBIC BAY LEGEND RESORTS AND CASINOS, INC. vs. BERNARD C. FERNANDEZ,
G.R. No. 193426, September 29, 2014, J. Del Castillo
Though casino chips do not constitute legal tender, there is no law which prohibits
their use or trade outside of the casino which issues them. In any case, it is not
unusual nor is it unlikely that respondent could be paid by his Chinese client at
the former's car shop with the casino chips in question; said transaction, if not
common, is nonetheless not unlawful. These chips are paid for anyway petitioner
would not have parted with the same if their corresponding representative
equivalent in legal tender, goodwill, or otherwise was not received by it in return
or exchange. Given this premise that casino chips are considered to have been
exchanged with their corresponding representative value it is with more reason
that the Court should require petitioner to prove convincingly and persuasively that
the chips it confiscated from the Fernandez brothers were indeed stolen from it; if
so, any Tom, Dick or Harry in possession of genuine casino chips is presumed to
have paid for their representative value in exchange therefor. If SBL cannot prove its
loss, then Art. 559 cannot apply; the presumption that the chips were exchanged for
value remains.
PENTA PACIFIC REALTY CORPORATION vs. LEY CONSTRUCTION AND
DEVELOPMENT CORPORATION, G.R. No. 161589, November 24, 2014, J.
Bersamin
Penta Pacific leased its properties to Ley Construction. Both parties then entered
into a contract to sell. Ley Construction failed to pay its amortizations prompting
Penta Pacific to file an action for ejectment.
The MeTC correctly exercised its authority in finding for the petitioner as the
plaintiff. In unlawful detainer, the possession was originally lawful but became
unlawful by the expiration or termination of the right to possess; hence, the issue of
rightful possession is decisive for, in the action, the defendant is in actual possession
and the plaintiffs cause of action is the termination of the defendant's r ight to
continue in possession.
A defendant's claim of possession de jure or his averment of ownership does not
render the ejectment suit either accion publiciana or accion reivindicatoria. The suit
remains an accion interdictal, a summary proceeding that can proceed
independently of any claim of ownership. Even when the question of possession
cannot be resolved without deciding the issue of ownership, the issue of ownership
is to be resolved only to determine the issue of possession.

91

HOMER C. JAVIER, represented by his mother and natural guardian, SUSAN G.


CANENCIA, vs. SUSAN LUMONTAD, G.R. No. 203760, December 3, 2014, J.
Perlas-Bernabe
In forcible entry, the complaint must necessarily allege that one in physical
possession of a land or building has been deprived of that possession by another
through force, intimidation, threat, strategy or stealth. It is not essential, however,
that the complaint should expressly employ the language of the law, but it would
suffice that facts are set up showing that dispossession took place under said
conditions.
EDCA Publ.
184 SCRA

V.
614

Santos, G.R. NO.

80298,

Apr.

26,

1990

Actual delivery of the books having been made, Cruz acquired ownership
over the books which he could then validly transfer to the private
respondents. The fact that he had not yet paid for them to EDCA was a
matter between him and EDCA and did not impair the title acquired by
the private respondents to the books.
BPI Family

v.

Franco, G.R. NO.

123498,

Nov.

23,

2007

Bad faith does not simply connote bad judgment or negligence; it imports
a dishonest purpose or some moral obliquity and conscious doing of
wrong; it partakes of the nature of fraud. We have held that it is a breach
of a known duty through some motive of interest or ill will.
Title VI Usufruct
Characteristics and Nature
Rights and Obligations of the Parties
Title VII. Easements or Servitude

Different kind of Easement


DEMETRIA DE GUZMAN, AS SUBSTITUTED BY HER HEIRS OLGA C.
BARBASO AND NOLI G. CEMENTTNA;* LOLITA A. DE GUZM AN; ESTHER
G.MILAN; BANAAG A. DE GUZMAN; AMOR G. APOLO, AS SUBSTITUTED
BY HIS HEIRS ALBERTO T. APOLO, MARK APOLO AND GEORGE
APOLO;* HERMINIO A. DE GUZM AN; LEONOR G. VTVENCIO; NORMA A.
DE
GUZMAN;
AND
JOSEFINA
G.
HERNANDEZ, vs. FBLINVEST
92

DEVELOPMENT CORPORATION,G.R. No. 191710, January 14, 2015, J. del


Castillo
Petitioners sought to establish a permanent easement upon the subservient estate.
Pursuant to the second paragraph of Article 649, the proper indemnity in this case
shall consist of the value of the land plus the damages caused to the servient estate.

ALICIA B. REYES vs. SPOUSES VALENTIN RAMOS, FRANCISCO S. AND ANATALIA,


G.R. No. 194488, February 11, 2015, J. Leonen
An easement of right of way is a real right. When an easement of right of way is
granted to another person, the rights of the propertys owner are limited. An owner
may not exercise some of his or her property rights for the benefit of the person
who was granted the easement of right of way.
Hence, the burden of proof to show the existence of the above conditions is imposed
on the person who seeks the easement of right of way.
Here the petitioner failed to establish that there was no adequate outlet to the
public highway and that the proposed easement was the least prejudicial to
respondents estate.
Mere convenience for the dominant estate is not what is required by law as the basis
of setting up a compulsory easement. Even in the face of necessity, if it can be
satisfied without imposing the easement, the same should not be imposed.
Based on the Ocular Inspection Report, petitioners property had another outlet to
the highway. In between her property and the highway or road, however, is an
irrigation canal, which can be traversed by constructing a bridge, similar to what
was done by the owners of the nearby properties.
There is, therefore, no need to utilize respondents property to serve petitioners
needs. Another adequate exit exists. Petitioner can use this outlet to access the
public roads.

Restrictive Covenant
Fajardo v. Freedom

to Build, G.R. NO.

134692, Aug. 1, 2000

While it may be correct to state that restrictive covenants on the use of


land or the location or character of buildings or other structures thereon
may broadly be said to create easements or rights, it can also be
contended that such covenants, being limitations on the manner in
93

which one may use his own property, do not result in true easements,
but a case of servitudes (burden), sometimes characterized to be negative
easements or reciprocal negative easements.
Abellana v. CA, G.R. NO.

97039, Apr.24, 1992

The use of a footpath or road may be apparent but it is not a continuous


easement because its use is at intervals and depends upon the acts of
man. It can be exercised only if a man passes or puts his feet over
somebody else's land.
Bicol Agro--Ind
v.
Obias, G.R. NO.
172077,
Oct.
09,
2009 - The easement of right of way the privilege of persons or a
particular class of persons to pass over anothers land, usually through
one particular path or linen is characterized as a discontinuous
easement because its use is in intervals and depends on the act of man.
Because of this character, an easement of a right of way may only be
acquired by virtue of a title.
Quintanilla v.

Abangan, G.R. NO. 160613, Feb.12, 2008

As between a right of way that would demolish a fence of strong


materials to provide ingress and egress to a public highway and another
right of way which although longer will only require a van or vehicle to
make a turn, the second alternative should be preferred. Mere
convenience for the dominant estate is not what is required by law as the
basis for setting up a compulsory easement.
Quimen v.

CA, G.R. NO.

112331,

M ay

29,

1996

As between a right of way that would demolish a store of strong


materials to provide egress to a public highway, and another right of way
which although longer will only require an avocado tree to be cut down,
the second alternative should be preferred.
Unisource v.

Chung, G.R. NO.

173252,

Jul.

17,

2009

Registration of the dominant estate under the Torrens system without


the annotation of the voluntary easement in its favor does not extinguish
the easement. On the contrary, it is the registration of the servient
estate as free, that is, without the annotation of the voluntary easement,
which extinguishes the easement.
Title VIII Nuisance
94

Classification of Nuisance
LINDA RANA vs. TERESITA LEE WONG, SPS. SHIRLEY LEE ONG and
RUBEN ANG ONG and SPS. ROSARIO and WILSON UY; SPS. ROSARIO and
WILSON UY; WILSON UY as attorney-in-fact of TERESITA LEE WONG, and
SPS. SHIRLEY LEE ONG and RUBEN ANG ONG vs. SPS. REYNALDO and
LINDA LANA, G.R. No. 192861; G.R. No. 192862, June 30, 2014, J. Perlas -Bernabe
It is a standing jurisprudential rule that unless a nuisance is a nuisance per se, it may
not be summarily abated. Aside from the remedy of summary abatement which
should be taken under the parameters stated in Articles 704 (for public nuisances)
and 706 (for private nuisances) of the Civil Code, a private person whose property
right was invaded or unreasonably interfered with by the act, omission,
establishment, business or condition of the property of another may file a civil
action to recover personal damages. Abatement may be judicially sought through a
civil action therefor if the pertinent requirements under the Civil Code for summary
abatement, or the requisite that the nuisance is a nuisance per se, do not concur. To
note, the remedies of abatement and damages are cumulative; hence, both may be
demanded.
LINDA RANA v TERESITA WONG, G.R No. 192861, June 30, 2014. J. PERLASBERNABE
The spouses Wong and the spouses Rana are neighbors who live across a road from
each other. The Ranas elevated and cemented the road without consultation from
the spouses Wong. Wong et al availed of the remedy of judicial abatement and
damages against Spouses Rana, claiming that the elevated and cemented portion are
nuisances that curtailed their use and enjoyment of their properties.

With respect to the elevated and cemented subject portion, the Court finds that the
same is not a nuisance per se. By its nature, it is not injurious to the health or
comfort of the community. It was built primarily to facilitate the ingress and egress
of Sps. Rana from their house which was admittedly located on a higher elevation
than the subject road and the adjoining Uy and Wong-Ong properties. Since the
subject portion is not a nuisance per se, it cannot be summarily abated. The
demolition order secured by Wong was thus unwarranted, entitling the spouses
Rana to nominal and temperate damages.
CRISOSTOMO B. AQUINO v MUNICIPALITY OF MALAY, AKLAN, represented by
HON. MAYOR JOHN P. YAP, SANGGUNIANG BA YAN OF MALAY, AKLAN,
represented by HON. EZEL FLORES, DANTE PASUGUIRON, ROWEN AGUIRRE,
WILBEC GELITO, JUPITER GALLENERO, OFFICE OF THE MUNICIPAL ENGINEER,
95

OFFICE OF THE MUNICIPAL TREASURER, BORACAY PNP CHIEF, BORACAY


FOUNDATION, INC., represented by NENETTE GRAF, MUNICIPAL AUXILIARY
POLICE, and JOHN and JANE DOES. G.R No. 211356, September 29, 2014. J.
VELASCO
Article 694 of the Civil Code defines nuisance as any act, omission, establishment,
business, condition or property, or anything else that (1) injures or endangers the
health or safety of others; (2) annoys or offends the senses; (3) shocks, defies or
disregards decency or morality; (4) obstructs or interferes with the free passage of
any public highway or street, or any body of water; or (5) hinders or impairs the use
of property.
Challenging the validity of the public respondents actuations, petitioner posits that
the hotel cannot summarily be abated because it is not a nuisance per se, given the
hundred million peso-worth of capital infused in the venture. Petitioner also argues
that respondents should have first secured a court order before proceeding with the
demolition.
SC said that the property involved cannot be classified as a nuisance per se, but not
for the reason he so offers. Property valuation, after all, is not the litmus test for
such a determination. More controlling is the propertys nature and conditions,
which should be evaluated to see if it qualifies as a nuisance as defined under the
law.
Nuisances are of two kinds: nuisance per se and nuisance per accidens. The first is
recognized as a nuisance under any and all circumstances, because it constitutes a
direct menace to public health or safety, and, for that reason, may be abated
summarily under the undefined law of necessity. The second is that which depends
upon certain conditions and circumstances, and its existence being a question of
fact, it cannot be abated without due hearing thereon in a tribunal authorized to
decide whether such a thing does in law constitute a nuisance. cralawlawlibrary
In the case at bar, the hotel, in itself, cannot be considered as a nuisance per se since
this type of nuisance is generally defined as an act, occupation, or structure, which
is a nuisance at all times and under any circumstances, regardless of location or
surrounding. Here, it is merely the hotels particular incidentits locationand not
its inherent qualities that rendered it a nuisance. Otherwise stated, had it not been
constructed in the no build zone, Boracay West Cove could have secured the
necessary permits without issue. As such, petitioner is correct that the hotel is not a
nuisance per se, but, it is still a nuisance per accidens.
Remedies
Telmo v.

Bustamante, G.R. NO.

182567,

Jul.

13,

2009
96

A nuisance per se is that which affects the immediate safety of persons


and property and may be summarily abated under the undefined law of
necessity. Evidently, the concrete posts summarily removed by petitioner
did not at all pose a hazard to the safety of persons and properties,
which would have necessitated immediate and summary abatement.
Gancayco v.

Quezon

City, G.R. NO. 177807,Oct

11,

2011

The wing walls do not per se immediately and adversely affect the safety
of persons and property. The fact that an ordinance may declare a
structure illegal does not necessarily make that structure a nuisance.
Perez v.
M adrona G.R. NO. 184478,
M ar.
21,
2012 Respondents fence is not a nuisance per se. By its nature, it is not
injurious to the health or comfort of the community. It was built
primarily to secure the property of respondents and prevent intruders
from entering it.
Donation
CHARLES BUMAGAT, JULIAN BACUDIO, ROSARIO PADRE, SPOUSES ROGELIO
and ZOSIMA PADRE, and FELIPE DOMINCIL v REGALADO ARRIBAY, G.R No.
194818, June 9, 2014. J. DEL CASTILLO
Under Article 749 and 709 of the Civil Code, it may be inferred that as between the
parties to a donation of an immovable property, all that is required is for said
donation to be contained in a public document. Registration is not necessary for it to
be considered valid and effective. However, in order to bind third persons, the
donation must be registered in the Registry of Land Titles and Deeds. Although the
non-registration of a deed of donation shall not affect its validity, the necessity of
registration comes into play when the rights of third persons are affected, as in the
case at bar.
In this case, the donation executed by Gonzales in favor of his grandchildren,
although in writing and duly notarized, has not been registered in accordance with
law. Hence, while the deed of donation is valid between the donor and the donees,
such deed, however, did not bind the tenants-farmers who were not parties to the
donation. Non-registration of a deed of donation does not bind other parties
ignorant of a previous transaction. It is of no moment that the right of the tenantfarmers in this case was created by virtue of a decree or law. They are still
considered "third persons" contemplated in our laws on registration, for the fact
remains that these tenant-farmers had no actual knowledge of the deed of donation.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE SECRETARY OF
AGRICULTURE vs. FEDERICO DACLAN, JOSEFINA COLLADO, AND HER HUSBAND
FEDERICO DACLAN AND MINVILUZ DACLAN, AS SURVIVING HEIRS OF
97

DECEASED JOSE DACLAN, G.R. No. 197115 (consolidated), March 23, 2015, J.
Del Castillo
The Daclans lament the supposed failure of the Province to provide agricultural
extension and on-site research services and facilities as required under the IRR of
the LGC of 1991, which failure they believe, constituted a violation of the stipulation
contained in the deeds of donation to develop and improve the livestock industry of
the country. Yet this cannot be made a ground for the reversion of the donated
lands; on the contrary, to allow such an argument would condone undue
interference by private individuals in the operations of government. The deeds of
donation merely stipulated that the donated lands shall be used for the
establishment of a breeding station and shall not be used for any other purpose, and
that in case of non-use, abandonment or cessation of the activities of the BAI,
possession or ownership shall automatically revert to the Daclans. It was never
stipulated that they may interfere in the management and operation of the breeding
station. Even then, they could not directly participate in the operations of the
breeding station.
Nature of Donations
Classification of Donations
Persons who may giver or receive a Donation
Formalities of Donation
ESPERANZA C. CARINAN vs. SPOUSES GAVINO CUETO and CARMELITA CUETO, G.R. No.
198636, October 8, 2014, J. Reyes

In order to sufficiently substantiate her claim that the money paid by the
respondents was actually a donation, petitioner should have also submitted in court
a copy of their written contract evincing such agreement. As earlier ruled by the
Court, a donation must comply with the mandatory formal requirements set forth by
law for its validity. When the subject of donation is purchase money, Article 748 of
the NCC is applicable. Accordingly, the donation of money as well as its acceptance
should be in writing. Otherwise, the donation is invalid for non-compliance with the
formal requisites prescribed by law.
Effects and limitation of Donation

Republic v. Guzman, G.R. No. 132964, February 18, 2000


The donation is null and void when (a) the deed of donation fails to show
the acceptance, or (b) where the formal notice of the acceptance made in
98

a separate instrument is either not given to the donor or else noted in the
deed of donation, and in the separate acceptance.
Villanueva vs. Spouses Branoco, G.R. No. 172804, January 24, 2011
When the donor used the words that the gift "does not pass title during
my lifetime; but when I die, she shall be the true owner of the two
aforementioned parcels"] the donor meant nothing else than that she
reserved of herself the possession and usufruct of said two parcels of
land until her death, at which time the donee would be able to dispose of
them freely.
Central Philippines University vs. CA, G.R. No. 112127 July 17,
1995
If there was no fulfillment or compliance with the condition, the donation
may now be revoked and all rights which the donee may have acquired under it
shall be deemed lost and extinguished.

Insular

Life

v.

Ebrado, G.R. NO.

44059,

Oct.

28,

1977

In essence, a life insurance policy is no different from a civil donation


insofar as the beneficiary is concerned. Both are founded upon the same
consideration: liberality. A beneficiary is like a donee, because from the
premiums of the policy which the insured pays out of liberality, the
beneficiary will receive the proceeds or profits of said insurance.
Zamboanga

v.

Plagata, G.R. NO. 148433,

Sept.

30,

2008

Since Article 1306 of said Code authorizes the parties to a contract to


establish such stipulations, . . . not contrary to law, . . . public order or
public policy, we are of the opinion that, at the very least, that
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.
Quijada vs.

CA, G.R. NO.

126444,

Dec.

4,

1998.

Since no period was imposed by the donor on when must the donee
comply with the condition, the latter remains the owner so long as he
has tried to comply with the condition within a reasonable period. Only
then - when the non-fulfillment of the resolutory condition was brought
99

to the donor's knowledge - that ownership of the donated property


reverted to the donor as provided in the automatic reversion clause of the
deed of donation.

PRESCR IP TION
METROPOLITAN FABRICS INC. ET AL. VS. PROSPERITY CREDIT RESOURCES
ENC. ET AL. G.R. No. 154390 March 17, 2014, J. Bersamin
With the contract being voidable, petitioners action to annul the real estate
mortgage already prescribed. Article 1390, in relation to Article 1391 of the Civil
Code, provides that if the consent of the contracting parties was obtained through
fraud, the contract is considered voidable and may be annulled within four years
from the time of the discovery of the fraud. The discovery of fraud is reckoned from
the time the document was registered in the Register of Deeds in view of the rule
that registration was notice to the whole world. Thus, because the mortgage
involving the seven lots was registered on September 5, 1984, they had until
September 5, 1988 within which to assail the validity of the mortgage. But their
complaint was instituted in the RTC only on October 10, 1991.Hence, the action,
being by then already prescribed, should be dismissed.
RURAL BANK OF CABADBARAN, INC v JORGITA A. MELECIO-YAP, LILIA
MELECIO PACIFICO (deceased, substituted by her only child ERILL* ISAAC M.
PACIFICO, JR.), REYNALDO A. MELECIO DELOSO, and SARAH MELECIO PALMAGIL, G.R No. 178451, July 30, 2014. J. PERLAS-BERNABE
In this case, the complaint for nullification of the SPA was filed before the RTC on
April 17,1996, or barely three years from the discovery of the averred forgery in
1993, which is within the four-year prescriptive period provided under Article 1146
of the Civil Code to institute an action upon the injury to their rights over the subject
properties. A delay within the prescriptive period is sanctioned by law and is not
considered to be a delay that would bar relief. Laches applies only in the absence of
a statutory prescriptive period.
SPOUSES FRANCISCO SIERRA (substituted by DONATO, TERESITA, TEODORA,
LORENZA, LUCINA, IMELDA, VILMA, and MILAGROS SIERRA) and ANTONINA
SANTOS, SPOUSES ROSARIO SIERRA and EUSEBIO CALUMA LEYVA, and
SPOUSES SALOME SIERRA and FELIX GATLABAYAN (substituted by BUENA
VENTURA, ELPIDIO, PAULINO, CATALINA, GREGORIO, and EDGARDO
GATLABAYAN, LORETO REILLO, FERMINA PEREGRINA, and NIDA HASHIMOTO)
vs. PAIC SAVINGS AND MORTGAGE BANK, INC., G.R. No. 197857, September 10,
2014, J. Perlas- Bernabe

100

Since the complaint for annulment was anchored on a claim of mistake, i.e., that
petitioners are the borrowers under the loan secured by the mortgage, the action
should have been brought within four (4) years from its discovery. As mortgagors
desiring to attack a mortgage as invalid, petitioners should act with reasonable
promptness, else its unreasonable delay may amount to ratification. Verily, to allow
petitioners to assert their right to the subject properties now after their unjustified
failure to act within a reasonable time would be grossly unfair to PSMB, and
perforce should not be sanctioned. As such, petitioners' action is already barred by
laches, which, as case law holds, operates not really to penalize neglect or sleeping
on one's rights, but rather to avoid recognizing a right when to do so would result in
a clearly inequitable situation.
INTELLECTUAL PROPERTY
SHANG PROPERTIES REALTY CORPORATION (formerly THE SHANG GRAND
TOWER CORPORATION) and SHANG PROPERTIES, INC. (formerly EDSA
PROPERTIES HOLDINGS, INC.), v ST. FRANCIS DEVELOPMENT CORPORATION,
G.R No. 190706, July 21, 2014. J. PERLAS-BERNABE

St. Francis Development Corporation (SFDC) uses the mark ST. FRANCIS to
identify numerous development projects at Ortigas Center. When Shang Properties
Realty (SPR) used the marks The St. Francis Towers and The St. Francis ShangriLa Place, SFDC filed a complaint for intellectual property violation for unfair
competition and damages.
For unfair competition to be established, there must be a showing that SPR
employed means to induce the public towards a false belief that it was offering
SFDCs goods/services. Here, this was not proven.
On the contrary, the Court upheld SPRs use of the St. Francis mark since the use
was meant not to ride on SFDCs goodwill, but merely to identify, or at least
associate, their real estate project/s with its geographical location. In the real estate
business, here can be no description of its geographical origin as precise and
accurate as that of the name of the place where they are situated.
ILLAWARE PRODUCTS CORPORATION V JESICHRIS MANUFACTURING
CORPORATION, G.R No. 195549, September 3, 2014. J. PERALTA
In order to qualify the competition as "unfair," it must have two characteristics: (1)
it must involve an injury to a competitor or trade rival, and (2) it must involve acts
which are characterized as "contrary to good conscience," or "shocking to judicial
sensibilities," or otherwise unlawful; in the language of our law, these include force,
intimidation, deceit, machination or any other unjust, oppressive or high-handed

101

method. The public injury or interest is a minor factor; the essence of the matter
appears to be a private wrong perpetrated by unconscionable means.
It is evident that petitioner Willaware is engaged in unfair competition as shown by
his act of suddenly shifting his business from manufacturing kitchenware to plasticmade automotive parts; his luring the employees of the respondent to transfer to his
employ and trying to discover the trade secrets of the respondent.
ABS-CBN CORPORATION, vs. FELIPE GOZON, GILBERTO R. DUAVIT, JR.,
MARISSA L. FLORES, JESSICA A. SOHO, GRACE DELA PEA-REYES, JOHN OLIVER
T. MANALASTAS, JOHN DOES AND JANE DOES, G.R. No. 195956, March 11, 2015,
J. Leonen
Several employees of GMA-7 were charged with copyright infringement. ABS-CBN
claims that news footage is subject to copyright and prohibited use of copyrighted
material is punishable under the Intellectual Property Code. It argues that the new
footage is not a "newsworthy event" but "merely an account of the arrival of Angelo
dela Cruz in the Philippines the latter being the newsworthy event".
The Supreme Court held that the news footage is copyrightable. he news footage is
copyrightable.
The Intellectual Property Code is clear about the rights afforded to authors of
various kinds of work. Under the Code, "works are protected by the sole fact of their
creation, irrespective of their mode or form of expression, as well as of their content,
quality and purpose." These include "[audio-visual works and cinematographic
works and works produced by a process analogous to cinematography or any
process for making audiovisual recordings."
It is true that under Section 175 of the Intellectual Property Code, "news of the day
and other miscellaneous facts having the character of mere items of press
information" are considered unprotected subject matter. However, the Code does
not state that expression of the news of the day, particularly when it underwent a
creative process, is not entitled to protection.
GMA-7's rebroadcast of ABS-CBN's news footage without the latter's consent is not
an issue. The mere act of rebroadcasting without authority from the owner of the
broadcast gives rise to the probability that a crime was committed under the
Intellectual Property Code.
Respondents cannot invoke the defense of good faith to argue that no probable
cause exists.Infringement under the Intellectual Property Code is malum prohibitum.
The Intellectual Property Code is a special law.
TAIWAN KOLIN CORPORATION, LTD VS. KOLIN ELECTRONICS CO., INC G.R. No.
209843. March 25, 2015, J. Velasco Jr.
102

The issue to be resolved in the case at bar is whether or not petitioner is entitled to
its trademark registration of KOLIN over its specific goods of television sets and
DVD players. Petitioner postulates, in the main, that its goods are not closely related
to those of Kolin Electronics. On the other hand, respondent hinges its case on the
CAs findings that its and petitioners products are closely-related. Thus, granting
petitioners application for trademark registration, according to respondent, would
cause confusion as to the public.
The Supreme Court held that identical marks may be registered for products for the
same classification. Mere uniformity in categorization, by itself, does not
automatically preclude the registration of what appears to be an identical mark, if
that be the case. In fact, SC, in a long line of cases, has held that such circumstance
does not necessarily result in any trademark infringement. It is hornbook doctrine
that emphasis should be on the similarity of the products involved and not on the
arbitrary classification or general description of their properties or characteristics.
The mere fact that one person has adopted and used a trademark on his goods
would not prevent the adoption and use of the same trademark by others on
unrelated articles of a different kind.
It is erroneous to conclude that all electronic products are related and that the
coverage of one electronic product necessarily precludes the registration of a
similar mark over another. In this digital age wherein electronic products have not
only diversified by leaps and bounds, and are geared towards interoperability, it is
difficult to assert readily, as respondent simplistically did, that all devices that
require plugging into sockets are necessarily related goods. In addition, Supreme
court rule that there is no confusing similarity between the marks, given that the
products covered by the trademark, i.e., jeans, were, at that time, considered pricey,
typically purchased by intelligent buyers familiar with the products and are more
circumspect, and, therefore, would not easily be deceived.Hence, petitioner's
trademark registration not only covers unrelated good, but is also incapable of
deceiving the ordinary intelligent buyer.
OBLIGA TIONS

I. DEFINITION
MAKATI STOCK EXCHANGE vs. CAMPOS, G.R. NO. 138814, April 16,
2009
Respondent used the terms "right and obligation" in his Petition from
which he concluded that that such Petition sufficiently states a cause of
action. Right and obligation are legal terms with specific legal meaning;
103

A right is a claim or title to an interest in anything whatsoever that is


enforceable by law, while an obligation is defined in the Civil Code as a
juridical necessity to give, to do or not to do and in the words of Arias
Ramos "An obligation is a juridical relation whereby a person (called the
creditor) may demand from another (called the debtor) the observance of
a determinative conduct (the giving, doing or not doing), and in case of
breach, may demand satisfaction from the assets of the latter."
II. ELEMENTS OF AN OBLIGATION
DEGAOS vs. PEOPLE OF THE PHILIPPINES, G.R. NO. 162826,
October 14, 2013
Degaos claims that his partial payments to the complainants novated
his contract with them from agency to loan, thereby converting his
liability from criminal to civil. The incompatibility in novation must take
place in any of the essential elements of the obligation, such as its object,
cause or principal conditions thereof; otherwise, the change would be
merely modificatory in nature and insufficient to extinguish the original
obligation.
ASUNCION vs. CA, G.R. NO. 109125, December 2, 1994
An obligation is a juridical necessity to give, to do or not to do (Art. 1156,
Civil Code) and is constituted upon the concurrence of the essential
elements thereof, viz: (a) The vinculum juris or juridical tie which is the
efficient cause established by the various sources of obligations (law,
contracts, quasi-contracts, delicts and quasi-delicts); (b) the object which
is the prestation or conduct; required to be observed (to give, to do or not
to do); and (c) the subject-persons who, viewed from the demandability of
the obligation, are the active (obligee) and the passive (obligor) subjects.
III. DIFFERENT KINDS OF PRESTATIONS
SSS vs M OONWALK DEVELOPMENT & HOUSING CORPORATION,
G.R. NO. 73345. April 7, 1993.
For failure to pay on time the amortization, SSS imposed the 12%
penalty contained in the penal clause of the contract entered into
between the parties. Inpositive obligations, (to give and to do), the
penalty is demandable when the debtor is in mora; hence, the necessity
of demand by the debtor unless the same is excused.

104

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION vs.


PHILIPPINE COMMERCIAL INTERNATIONAL BANK, G.R. NO. 153827
April 25, 2006
The [petitioner] may have experienced financial difficulties because of the
"1997 economic crisis" that ensued in Asia, however, the same does not
constitute a valid justification for the [petitioner] to renege on its
obligations to the [respondent], and [petitioner] cannot even find solace
in Articles 1266 and 1267 of the New Civil Code, since it is applicable
only to obligations "to do," and not obligations "to give." An obligation "to
do" includes all kinds of work or service; while an obligation "to give" is a
prestation which consists in the delivery of a movable or an immovable
thing in order to create a real right, or for the use of the recipient, or for
its simple possession, or in order to return it to its owner.
IV. CLASSIFICATION OF OBLIGATIONS
AS TO BASIS AND ENFORCEABILITY
1.NATURAL OBLIGATIONS
ANSAY vs. BOARD OF DIRECTORS, G.R. NO. L -13667, April 29, 1960
Appellants filed against appellees in the CFI a complaint praying for a
20% Christmas bonus, contending that there exists a cause of action in
their complaint because their claim rests on moral grounds or what in
brief is defined by law as a natural obligation.
Article 1423 of the New Civil Code classifies obligations into civil or
natural, "Civil obligations are a right of action to compel their
performance, while Natural obligations, not being based on positive law
but on equity and natural law, do not grant a right of action to enforce
their performance, but after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or rendered by reason
thereof".
DBP vs. CONFESSOR, G.R. NO. L-48889 May 11, 1989
Appellee refuses to pay his obligation despite his execution of a new
promissory note in consideration of a previous promissory note which
remained unpaid even after the lapse of 10 years on the ground of
prescription. When a debt is already barred by prescription, it cannot be
enforced by the creditor but a new contract recognizing and assuming
the prescribed debt with full knowledge of the prescription would be valid
and enforceable and he thereby waives the benefit of prescription.
105

2. CIVIL OBLIGATIONS
ANSAY vs. NDC, G.R. NO. L-13667, April 29, 1960
Appellants contend that there exists a cause of action in their complaint
because their claim rests on moral grounds or what in brief is defined by
law as a natural obligation. Article 1423 of the New Civil Code classifies
obligations into civil or natural. "Civil obligations are a right of action to
compel their performance. Natural obligations, not be ing based on
positive law but on equity and natural law, do not grant a right of action
to enforce their performance, but after voluntary fulfillment by the
obligor, they authorize the retention of what has been delivered or
rendered by reason thereof".
V. SOURCES OF OBLIGATIONS
ABS-CBN vs. OFFICE OF THE OM BUDSMAN, G.R. NO. 133347
April 23, 2010
Petitioner asserts that a criminal complaint may continue and be
prosecuted as an independent civil action. The claim for civil liability
survives notwithstanding the death of accused, if the same may also be
predicated on a source of obligation other than delict. Article 1157 of the
Civil Code enumerates these other sources of obligation from which the
civil liability may arise as a result of the same act or omission: a) law. b)
contracts. c) quasi-contracts. d) xxx xxx xxx. e) quasi-delicts.
1. OBLIGATIONS ARISING FROM LAW
SALEN vs. BALCE, G.R. NO. L-14414, April 27, 1960
Delfin, the father, was held jointly and severally liable with his minor son
Dante arising from the criminal act committed by the latter. The civil
liability which the law imposes upon the father and, in case of his death
or incapacity, the mother, for any damages that may be caused by the
minor children who live with them, is a necessary consequence of the
parental authority they exercise over them which imposes upon the
parents the "duty of supporting them, keeping them in their company,
educating them in proportion to their means", while, on the other hand,
gives them the "right to correct and punish them in moderation" .
2. OBLIGATIONS ARISING FROM CONTRACTS
106

METROPOLITAN BANK AND TRUST COMPANY vs. ANA GRACE ROSALES AND
YO YUK TO, G.R. No. 183204, January 13, 2014 J. del Castillo
Petitioner bank uses as basis for its refusal The Hold Out clause found in the
agreement it entered into with respondents. The Supreme Court held that the Hold
Out clause applies only if there is a valid and existing obligation arising from any of
the sources of obligation enumerated in Article 115779of the Civil Code, to wit: law,
contracts, quasi-contracts, delict, and quasi-delict. No such ground exists in this
case, hence the bank is guilty of breach of contract when it unjustifiably refused to
release respondents deposit despite demand.
SALUDAGA vs. FEU, G.R. NO. 179337 April 30, 2008
Saludaga, a sophomore law student of respondent FEU filed a case for
damages against it after he was shot by one of the security guards on
duty at the school premises. When an academic institution accepts
students for enrollment, there is a established contract between them,
resulting in bilateral obligations which both parties are bound to comply
with but which FEU failed to perform when it did not provide a safe and
secure environment to its students.
MERALCO vs RAMOY, G.R. NO. 158911, M arch 4, 2008
The respondents' cause of action against MERALCO is anchored on culpa
contractual or breach of contract for the latter's discontinuance of its
service to respondents. In culpa contractual the me re proof of the
existence of the contract and the failure of its compliance justify, prima
facie, a corresponding right of relief from law, recognizing the obligatory
force of contracts, the law will not permit a party to be set free from
liability for any kind of misperformance of the contractual undertaking or
a contravention of the tenor thereof.
3. OBLIGATIONS ARISING FROM QUASI CONTRACT
CRUZ vs.TUASON, G.R. NO. L-23749 April 29, 1977
Cruz alleged that Tuason had been enriched at the expense of Cruz by
virtue of an agreement made by Cruz and the Deudors in the clearing,
improving, subdividing and selling the large tract of land for the reasons
that said improvements are being used and enjoyed by Tuason. A
107

presumed quasi-contract cannot emerge as against one party when the


subject matter thereof is already covered by an existing contract with
another party.
A. NEGOTIORUM GESTIO
ADILLE vs. CA, G.R. NO. L-44546 January 29, 1988
Petitioner claims exclusive ownership on a land after exercising his right
of repurchase to the prejudice of the co owners. The redemption by one
co-heir or co-owner of the property in its totality does not vest in him
ownership over it but the petitioner, in taking over the property, did so
either on behalf of his co-heirs, in which event, he had constituted
himself a negotiorum gestor under Article 2144 of the Civil Code, or for
his exclusive benefit, in which case, he is guilty of fraud, and must act as
trustee, the private respondents being the beneficiaries, under the Article
1456.
B. SOLUTIO INDEBITI
ANDRES vs. M ANUFACTURERS HANOVER & TRUST CORPORATION,
G.R. NO. 82670 September 15, 1989
Petitioner refuses to return the second remittance to the respondent
bank when the respondent bank mistakenly remitted a certain amount
for a specific transaction twice on behalf of the buyer on the premise that
the buyer still owes the petitioner money. For quasi-contract of solutio
indebiti to apply the following requisites must concur: "(1) that he who
paid was not under obligation to do so; and, (2) that payment was made
by reason of an essential mistake of fact", hence petitioner must return
to the bank the amount which was mistakenly remitted for it is the buyer
not the respondent bank who has the obligation to the petitioner and not
the bank.
PUYAT & SONS, INC. vs. CITY OF MANILA, G.R. NO. L -17447, April
30, 1963
The City Treasurer of Manila refused to refund the retail dealer's tax
erroneously paid by the petitioner on it's belief that it was not exempted
from such, on the ground that the tax was voluntarily paid and not
under protest which was a condition sine qua non in order that a legal
basis may arise. Voluntariness is incompatible with mistake being a
108

case of solutio indebiti, protest is not required as a condition sine qua


non for its application.
4. OBLIGATIONS ARISING FROM DELICT
CINCO vs. CANONOY, G.R. NO. L-33171, May 31, 1979
Respondent Judge acted with grave abuse of discretion when he upheld
the Decision of the Lower court suspending the civil action based on a
quasi-delict until after the criminal case is finally terminated. When the
civil action is based on an obligation not arising from the act or omission
complained of as a felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result of the latter.
5. OBLIGATIONS ARISING FROM QUASI DELICT
NAPOCOR vs. CA, G.R. NO. 124378, M arch 8, 2005
The negligence of NPC as a result of its inability to maintain the level of
water in its dams has been satisfactorily and extensively established. In
crimes and quasi-delicts, the defendant shall be liable for all damages,
which are the natural and probable consequences of the act or omission
complained of and it is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the defendant.

NAPOCOR vs. THE HONORABLE COURT OF APPEALS, G.R. NO.


124378. M arch 8, 2005
NPC as a result of its inability to maintain the level of water in its dam
brought damages to defendants but asserts that the damages, if any,
were due to the heavy rains and should be regarded as a fortuitous
event.
Negligence or imprudence is human factor which makes the
whole occurrence humanized, as it were, and removed from the rules
applicable to acts of God
JIMENEZ vs. CITY OF M ANILA, G.R. NO. 71049, M ay 29, 1987
Respondent alleged that it is the Asiatic Integrated Corporation that is
managing the public market. Hence, it cannot be liable for the injuries
sustained by the petitioner when he fell into an open drainage hole. The
109

City of Manila is likewise liable for damages under Article 2189 of the
Civil Code, respondent City having retained control and supervision over
the Sta. Ana Public Market and as tort-feasor under Article 2176 of the
Civil Code on quasi-delicts Respondent City of Manila and Asiatic
Integrated Corporation being joint tort-feasors are solidarily liable under
Article 2194 of the Civil Code.
JIMENEZ vs. CITY OF M ANILA, G.R. NO. 71049, M ay 29, 1987
Petitioner fell into the open drainage holes, causing him physical
injuries, in a public market being managed by Asiatic Integrated
Corporation but such public market is still under the control and
supervision of the City of Manila. As a defense against liability on the
basis of a quasi-delict, one must have exercised the diligence of a good
father of a family. (Art. 1173 of the Civil Code).
VI. NATURE AND EFFECTS OF OBLIGATION
A. OBLIGATION TO GIVE A DETERM INATE THING vs A GENERIC
THING
SANCHEZ vs. RIGOS, G.R. NO. L-25494 June 14, 1972
In his complaint, plaintiff alleges that, by virtue of the option under
consideration, "defendant agreed and committed to sell" and "the plaintiff
agreed and committed to buy" the land described in the option, hence,
plaintiff maintains that the promise contained in the contract is
"reciprocally demandable. "A promise to buy and sell a determinate thing
for a price certain is reciprocally demandable and an accepted unilateral
promise to buy or to sell a determinate thing for a price certain is binding
upon the promissor if the promise is supported by a consideration
distinct from the price.
GAISANO CAGAYAN, INC. vs INSURANCE COMPANY OF NORTH
AMERICA, G.R. NO. 147839, June 8, 2006
Petitioners argument is that it is not liable for the unpaid accounts
because the fire is a fortuitous event. If the obligation is generic in the
sense that the object thereof is designated merely by its class or genus
without any particular designation or physical segregation from all others
of the same class, the loss or destruction of anything of the same kind
even without the debtors fault and before he has incurred in delay will
not have the effect of extinguishing the obligation, based on the principle
110

that the genus of a thing can never perish, (Genus nunquan perit) and
an obligation to pay money is generic; therefore, it is not excused by
fortuitous loss of any specific property of the debtor.
GAISANO CAGAYAN, INC. vs INSURANCE COMPANY OF NORTH
AMERICA, G. R. NO. 147839, June 8, 2006
Petitioners argument is that it is not liable for the unpaid accounts
because the fire is a fortuitous event. The rule that an obligor should be
held exempt from liability when the loss occurs thru a fortuitous event
only holds true when the obligation consists in the delivery of a
determinate thing and there is no stipulation holding him liable even in
case of fortuitous event and it does not apply when the obligation is
pecuniary in nature.
B. FAILURE OF PERFORMANCE
ART 1170
ARRIETA vs. NARIC, G.R. NO. L-15645, January 31, 1964
It is clear upon the records that the sole and principal reason for the
cancellation of the allocation of rice contracted by the appellee herein in
Burma, was the failure of the letter of credit to be opened by NARIC
within the contemplated period which resulted in the consequent
damage. Every debtor who fails in performance of his obligations due to
fraud, negligence, or delay is bound to indemnify for the losses and
damages caused thereby.
TELEFAST vs. CASTRO, G.R. NO. 73867, February 29, 1988
Petitioner and private respondent entered into a contract whereby, for a
fee, petitioner undertook to send said private respondent's message
overseas by telegram but which petitioner did not do, despite
performance by said private respondent of her obligation by paying the
required charges. Those who in the performance of their obligations are
guilty of fraud, negligence or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.
C. DELAY
1. M ORA SOLVENDI
ART 11
111

SANTOS VENTURA HOCORMA FOUNDATION, INC., vs. SANTOS, G.R.


NO. 153004, November 5, 2004
When respondents wrote a demand letter to petitioner, the obligation was
already due and demandable, and when the petitioner failed to pay its
due obligation after the demand was made, it incurred delay. Delay as
used in this article is synonymous to default or mora solvendi which
means delay in the fulfillment of obligations with respect to time and in
order for the debtor to be in default, it is necessary that the following
requisites be present: (1) that the obligation be demandable and already
liquidated; (2) that the debtor delays performance; and (3) that the
creditor requires the performance judicially or extrajudicially.
2. M ORA ACCIPIENDI
MANUEL vs. CA, G.R. NO. 95469

July 25, 1991

Petitioner contends that private respondents are in mora accipiendi. The


failure of the owners to collect or their refusal to accept the rentals are
not valid defenses, since consignation under such circumstances, is
necessary, and by this we mean one that is effected in full compliance
with the specific requirements of the law therefor.
3. COMPENSATIO MORAE
CORTES vs. CA, G.R. NO. 126083, July 12, 2006
Cortes admission agreed that the Corporations full payment of the sum
would depend upon his delivery of the TCTs of the three lots.
Considering that their obligation was reciprocal, performance thereof
must be simultaneous and the mutual inaction of Cortes and the
Corporation therefore gave rise to a compensation morae or default on
the part of both parties because neither has completed their part in their
reciprocal obligation.

UNLAD RESOURCES DEVELOPMENT CORPORATION vs. DRAGON,


G.R. NO. 149338, July 28, 2008

112

Petitioners contend that they have fully complied with their obligation
under the Memorandum of Agreement but due to respondents failure to
increase the capital stock of the corporation to an amount that will
accommodate their undertaking, it had become impossible for them to
perform their end of the Agreement. In reciprocal obligations, failure of
the other party to perform the obligation renders the other party to
demand fulfillment of the obligation or asked for the rescission of the
contract, but not simply not performing their part of the Agreement.
D. NEGLIGENCE
1. DEGREE OF DILIGENCE
SICAM vs. JORGE, G.R. NO. 159617, August 8, 2007
Sicam exempts himself from liability on the ground that the robbery of
his pawnshop is a fortuitous event which is by definition is an
extraordinary event not foreseeable or avoidable. In order for a fortuitous
event to exempt one from liability, it is necessary that one has committed
no negligence or misconduct that may have occasioned the loss and
robbery per se, just like carnapping, is not a fortuitous event for it does
not foreclose the possibility of negligence on the part of herein
petitioners.
MERALCO vs. RAM OY, G.R. NO. 158911, M arch 4, 2008
The respondents' cause of action against MERALCO is anchored on culpa
contractual or breach of contract for the latter's discontinuance of its
service to respondents. Article 1173 also provides that the fault or
negligence of the obligor consists in the omission of that diligence which
is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place, hence, as a
public utility, MERALCO has the obligation to discharge its functions
with utmost care and diligence.

MINDANAO TERM INAL AND BROKERAGE SERVICE, INC. vs.


PHOENIX ASSURANCE COMPANY OF NEW YORK,MCGEE & CO.,
INC., G.R. NO. 162467, M ay 8, 2009

113

Mindanao Terminal was required to observe ordinary diligence only in


loading and stowing the cargoes of Del Monte Produce aboard M,V
Mistrau since there is nothing in the contract which requires a higher
degree of diligence. If the law or contract does not state the degree of
diligence which is to be observed in the performance of an obligation
then that which is expected of a good father of a family or ordinary
diligence shall be required.
2. FORTUITOUS EVENT
COMGLASCO CORPORATION/AGUILA GLASS vs. SANTOS CAR CHECK CENTER
CORPORATION, G.R. No. 202989, March 25, 2015, J. Reyes
The principle of rebus sic stantibus neither fits in with the facts of the case. Under
this theory, the parties stipulate in the light of certain prevailing conditions, and
once these conditions cease to exist, the contract also ceases to exist. This theory is
said to be the basis of Article 1267 of the Civil Code. This article, which enunciates
the doctrine of unforeseen events, is not, however, an absolute application of the
principle of rebus sic stantibus, which would endanger the security of contractual
relations. The parties to the contract must be presumed to have assumed the risks
of unfavorable developments. It is therefore only in absolutely exceptional changes
of circumstances that equity demands assistance for the debtor.
Relying on Article 1267 of the Civil Code to justify its decision to pre-terminate
its lease with respondent, petitioner invokes the 1997 Asian currency crisis as
causing it much difficulty in meeting its obligations. In Philippine National
Construction Corporation v. CA, the Court held that the payment of lease rentals
does not involve a prestation to do envisaged in Articles 1266 and 1267 which has
been rendered legally or physically impossible without the fault of the obligorlessor. Article 1267 speaks of a prestation involving service which has been
rendered so difficult by unforeseen subsequent events as to be manifestly beyond
the contemplation of the parties. To be sure, the Asian currency crisis befell the
region from July 1997 and for sometime thereafter, but petitioner cannot b e
permitted to blame its difficulties on the said regional economic phenomenon
because it entered into the subject lease only on August 16, 2000, more than three
years after it began, and by then petitioner had known what business risks it
assumed when it opened a new shop in Iloilo City.

NAKPIL & SONS v. CA, G.R. NO. L-47851 April 15, 1988

114

There was an earthquake which caused the building heavy damage but
the other nearby structures had less damages as compared to the said
building, the architects, engineers and contractors are claiming
fortuitous event as a defense. To be exempt from liability due to an act of
God, the ff must occur:
1) cause of breach must be independent of the will of the debtor
2) event must be unforeseeable or unavoidable
3) event must be such that it would render it impossible for the debtor to
fulfill the obligation
4) debtor must be free from any participation or agG.R.avation of the
industry to the creditor.
3. EXTRAORDINARY INFLATION
ALMEDA vs. BATHALA MARKETING,G.R.NO.150806, January 28,
2008
The lower court denied petitioners right to pass on to respondent the
burden of paying the VAT and their right to collect the demanded
increase in rental, there being no extraordinary inflation or devaluation
as provided for in the seventh clause of the contract. Extraordinary
inflation exists when there is a decrease or increase in the purchasing
power of the Philippine currency which is unusual or beyond the
common fluctuation in the value of said currency, and such increase or
decrease could not have been reasonably foreseen or was manifestly
beyond the contemplation of the parties at the time of the establishment
of the obligation.
4. BREACH FOR RESCISSION
UNIVERSAL FOOD CORPORATION vs. THE COURT OF APPEALS,
G.R. NO. L-29155
M ay 13, 1970
Respondent patentee was dismissed as the permanent chief chemist of
the corporation without any fault or negligence on his part after the
execution of the Bill of Assignment, prompting him to rescind the
contract. The general rule is that rescission of a contract will not be
permitted for a slight or casual breach, but only for such substantial and
fundamental breach as would defeat the very object of the parties in
making the agreement.
VII. KINDS OF CIVIL OBLIGATIONS
115

A. PURE OBLIGATIONS
ART 1179
HONGKONG AND SHANGHAI BANKING CORP. vs. BROQUEZA, G.R.
NO. 178610 November 17, 2010
Respondents executed undated promissory notes. They were not able to
pay the monthly amortizations of their respective loans, which were
suppose to be paid through salary deduction, to the petitioner because of
their dismissal. Loans secured by their future retirement benefits to
which they are no longer entitled are reduced to unsecured and pure civil
obligations and the absence of a period within which to pay the
obligation, the fulfillment of which is demandable at once.
PAY vs. PALANCA, G.R. NO. L-29900June 28, 1974
Oppositor-appellee alleged that the rights of the petitioner-creditor had
already prescribed when the action based on a dated promissory note
was filed 15 years after. The wordings of the promissory note being "upon
demand," the obligation was immediately due and had prescribed upon
the lapse of ten years from the date on the promissory note.
B. CONDITIONAL OBLIGATIONS
SUSPENSIVE CONDITION
183 SCRA 171
Art. 1181
JAVIER vs. CA, G.R. No. L-48194 M arch 15, 1990
When a contract is subject to a suspensive condition, its birth and
effectivity can take place only if and when the event which constitutes
the condition happens or is fulfilled, and if the suspensive condition does
not take place, the parties would stand as if the conditional obligation
had never existed.
HEIRS OF PAULINO ATIENZA vs. ESPIDOL, G.R. NO. 180665
First, since Espidol failed to pay the installment on a day certain fixed in
their agreement, the Atienzas can afterwards validly cancel and ignore
the contract to sell because their obligation to sell under it did not
arise. Since the suspensive condition did not arise, the parties stood as
if the conditional obligation had never existed.
Second, it was not a pure suspensive condition in the sense that the
Atienzas made no undertaking while the installments were not yet
116

due. Mr. Justice Edgardo L. Paras gave a fitting example of suspensive


condition: Ill buy your land for P1,000.00 if you pass the last bar
examinations. This he said was suspensive for the bar examinations
results will be awaited. Meantime the buyer is placed under no
immediate obligation to the person who took the examinations.
Here, however, although the Atienzas had no obligation as yet to turn
over title pending the occurrence of the suspensive condition, it was
implicit that they were under immediate obligation not to sell the land to
another in the meantime. When Espidol failed to pay within the period
provided in their agreement, the Atienzas were relieved of any obligation
to hold the property in reserve for him.
REYES vs. TUPARAN, G.R. NO. 188064, June 1, 2011
The petitioner was rescinding the subject Deed of Conditional Sale
pursuant to Article 1191 of the Civil Code because of the respondents
failure,refusal to pay the balance of the total purchase price of the
petitioners properties within the stipulated period. The full payment of
the purchase price is the positive suspensive condition, the failure of
which is not a breach of contract, but simply an event that pre vented the
obligation of the vendor to convey title from acquiring binding force.
SPS. SANTOS vs. CA, G.R. NO. 120820, August 1, 2000
In view of our finding in the present case that the aG.R.eement between
the parties is a contract to sell, it follows that the appellate court erred
when it decreed that a judicial rescission of said aG.R.eement was
necessary. In a contract to sell, the payment of the purchase price is a
positive suspensive condition and failure to pay the price agreed upon is
not a mere breach, casual or serious, but a situation that prevents the
obligation of the vendor to convey title from acquiring an obligatory force.
CONDITION PRECEDENT
PARKS vs. PROVINCE OF TARLAC, G.R. NO. L -24190, July 13, 1926
Appellant contends that a condition precedent having been imposed in
the donation and the same not having been complied with, the donation
never became effective. The characteristic of a condition precedent is
that the acquisition of the right is not effected while said condition is not
complied with or is not deemed complied with, consequently, when a
117

condition is imposed, the compliance of which cannot be effected except


when the right is deemed acquired, such condition cannot be a condition
precedent but a condition subsequent.
RESOLUTORY CONDITION
ART 1181
CENTRAL PHILIPPINE UNIVERSITY vs. CA, G.R. NO. 112230. July
17, 1995
Petitioner failed to comply to build a school on the donated land given by
the private respondent, which prompted the private respondent to
rescind the donation. On conditional obligations, the acquisition of rights
as well the extinguishment or loss of those already acquired shall depend
upon the happening of the event which constitutes the condition, thus,
when a person donates land to another on the condition that the latter
would build upon the land a school is such a resolutory one and if there
was no fulfillment with the condition such as what obtains in the instant
case, the donation may be revoked & all rights which the donee may
have acquired shall be deemed lost & extinguished.
C. OBLIGATIONS W ITH A PERIOD
ROWENA R. SALONTE vs. COMMISSION ON AUDIT, CHAIRPERSON MA. GRACIA
PULIDO-TAN, COMMISSIONER JUANITO G. ESPINO, JR., COMMISSIONER HEIDI
L. MENDOZA, and FORTUNATA M. RUBICO, DIRECTOR IV, COA COMMISSION
SECRETARIAT, G.R. No. 207348, August 19, 2014, J. Velasco, Jr.,
Obligations with a resolutory period take effect at once, but terminate upon arrival
of the day certain. A day certain is understood to be that which must necessarily
come, although it may not be known when. If the uncertainty consists in whether
the day will come or not, the obligation is conditional. In the instant case, a plain
reading of the Contract of Reclamation reveals that the six (6)-year period provided
for project completion, or termination of the contract was a mere estimate and
cannot be considered a period or a "day certain" in the context of Art. 1193. To be
clear, par. 15 of the Contract of Reclamation states: "the project is estimated to be
completed in six (6) years." The lapse of six (6) years from the perfection of the
contract did not, make the obligation to finish the reclamation project demandable,
such as to put the obligor in a state of actionable delay for its inability to finish.
Thus, F.F. Cruz cannot be deemed to be in delay.

118

RADIOWEALTH FINANCE COMPANY vs. Spouses DEL ROSARIO, G.R.


NO. 138739. July 6, 2000
Petitioner claimed that respondents are liable for the whole amount of
their debt and the interest thereon, after they defaulted on the monthly
installments, due to acceleration clause therein. Respondents, on the
other hand, countered that the installments were not yet due and
demandable, evidenced by the blank space left for the date on which the
installments should have commenced and theorized that fulfillment of
the obligation is dependent on the sole will of the debtor, hence proper
court should first fix a period for payment. The act of leaving blank the
due date of the first installment did not necessarily mean that the
debtors were allowed to pay as and when they could, since the presence
of an acceleration clause and a late payment penalty, showed the
intention of the parties that the installments should be paid at a definite
date, this is an obligation with a period.
LIM vs.PEOPLE OF THE PHILIPPINES, G.R. NO. L -34338 November
21, 1984
Petitioner seeks the reversal of the decision of the lower court which
convicted her of the crime of Estafa when she failed to give the proceeds
of the sale of the tobacco in accordance with their agreement which says
that ''...payment should be given as soon as the tobaccos are sold...'' and
contended that the court should first fix the period. It is clear in the
aG.R.eement, that the obligation was immediately demandable as soon
as the tobacco was disposed of hence, Article 1197 of the New Civil Code,
which provides that the courts may fix the duration of the obligation if it
does not fix a period, does not apply.
ART 1197
ARANETA, INC., vs.PHILIPPINE SUGAR ESTATES, G.R. NO. L-22558
May 31, 1967
Araneta, who was not able to comply with his obligation to create side
streets on the sides of the land which were sold to the PSE due to the
presence of squatters, questions the decision of the lower court ordering
him to comply with his obligation within 2 years from the finality of the
decision. It must be recalled that Article 1197 of the Civil Code involves a
two-step process, the Court must first determine that "the obligation
does not fix a period", or from the nature and the circumstances it can be
inferred that a period was intended, because courts can not fix a period
merely because in its opinion it is or should be reasonable and the
119

complaint not having sought that the court should set a period, but must
set the time that the parties are shown to have intended.
4. OBLIGATIONS W ITH A PENAL CLAUSE
SSS vs. MOONWALK DEVELOPMENT & HOUSING CORPORATION,
G.R. NO. 73345, April 7, 1993.
Is the penalty demandable even after the extinguishment of the principal
obligation? For all purposes the principal obligation of defendantappellee was deemed extinguished as well as the accessory obligation of
real estate mortgage, the penal clause which is also an accessory
obligation must also be deemed extinguished, it would be otherwise, if
the demand for the payment of the penalty was made prior to the
extinguishment of the obligation because by then the debtor would be in
mora and therefore liable for the penalty.
THE BACHRACH M OTOR CO., INC., vs. ESPIRITU, G.R. NO. L -28497
November 6, 1928
Defendant alleged that the decision of the lower court to pay 25 percent
of the amount of the trucks in addition to the amount of the trucks plus
12 per cent per annum is unconscionable and exceeds the rate fixed by
law. The penalty agreed upon does not include the interest, and which
may be demanded separetely and the penalty is not to be added to the
interest for the determination of whether the interest exceeds the rate
fixed by the law, since said rate was fixed only for the interest.
ROBES-FRANCISCO REALTY & DEVELOPMENT CORPORATION vs.
CFI, G.R. NO. L-41093, October 30, 1978
Petitioner corporation questions the award for nominal damages and
attorney's fee since the contract agreed upon indicated an interest at 4%
per annum of the total amount to be paid which should be considered as
penalty clause for failure to comply with the obligation hence, the vendee
cannot recover more than what is agreed upon. Those who in the
performance of their obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor thereof, are liable for
damages and nominal damages are not intended for indemnification of
loss suffered but for the vindication or recognition of a right violated or
invaded.
5. RECIPROCAL OBLIGATION
120

GOLDEN VALLEY EXPLORATION, INC. vs. PINKIAN MINING COMPANY and COPPER
VALLEY, INC., G.R. No. 190080, June 11, 2014, J. Perlas-Bernabe

In reciprocal obligations, either party may rescind the contract upon the others
substantial breach of the obligation/s he had assumed thereunder. The basis
therefor is Article 1191 of the Civil Code. PMC rescinded the operating agreement
with GVEI due to failure of the latter to advance payment for actual cost. The court
ruled that in reciprocal obligations, either party may rescind the contract upon the
others substantial breach of the obligation/s he had assumed thereunder.
SWIRE REALTY DEVELOPMENT CORPORATION vs. JAYNE YU, G.R. No.
207133, March 09, 2015, J. Peralta
The right of rescission of a party to an obligation under Article 1191 of the Civil
Code is predicated on a breach of faith by the other party who violates the
reciprocity between them. The breach contemplated in the said provision is the
obligors failure to comply with an existing obligation. When the obligor cannot
comply with what is incumbent upon it, the obligee may seek rescission and, in the
absence of any just cause for the court to determine the period of compliance, the
court shall decree the rescission. Thus, the delay in the completion of the project as
well as of the delay in the delivery of the unit are breaches of statutory and
contractual obligations which entitle respondent to rescind the contract, demand a
refund and payment of damages.
AGCAOILI vs. GSIS, G.R. NO. L-30056, August 30, 1988
GSIS sold a house to Agcaoili, and required him to immediately occupy it
under pain of cancellation of the sale, but Agcaoili found out that the
house was uninhabitable hence payment was suspended which
prompted GSIS to cancel the sale. It is axiomatic that "(i)n 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."
UNLAD RESOURCES DEVELOPMENT CORPORATION vs. DRAGON,
G.R. NO. 149338, July 28, 2008
Petitioners contend that they have fully complied with their obligation
under the Memorandum of Agreement but due to respondents failure to
increase the capital stock of the corporation to an amount that will
accommodate their undertaking, it had become impossible for them to
perform their end of the Agreement. In reciprocal obligations, failure of
the other party to perform the obligation renders the other party to
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demand fulfillment of the obligation or asked for the rescission of the


contract, but not simply not performing their part of the Agreement.
AGCAOILI vs. GSIS, G.R. NO. L-30056, August 30, 1988
GSIS sold a house to Agcaoili, and required him to immediately occupy it
under pain of cancellation of the sale, but Agcaoili found out that the
house was uninhabitable hence payment was suspended which
prompted GSIS to cancel the sale. It is axiomatic that "(i)n 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."
VIII. JOINT AND SOLIDARY OBLIGATIONS
SOLIDARY OBLIGATION
SPOUSES RODOLFO BEROT AND LILIA BEROT vs.FELIPE C. SIAPNO, G.R. No.
188944, July 9, 2014, CJ. Sereno
As previous ruled by the Court, The well entrenched rule is that solidary
obligations cannot be inferred lightly. They must be positively and clearly
expressed. A liability is solidary only when the obligation expressly so states, when
the law so provides or when the nature of the obligation so requires. Respondent
was not able to prove by a preponderance of evidence that petitioners' obligation to
him was solidary. Hence, applicable to this case is the presumption under the law
that the nature of the obligation herein can only be considered as joint. It is
incumbent upon the party alleging otherwise to prove with a preponderance of
evidence that petitioners' obligation under the loan contract is indeed solidary in
character.
OLONGAPO CITY vs. SUBIC WATER AND SEWERAGE CO., INC., G.R. No.
171626, August 6, 2014, J. Brion
Solidary liability must be expressly stated. In the present case, the joint and several
liability of Subic Water and OCWD was nowhere clear in the agreement. The
agreement simply and plainly stated that Olongapo City and OCWD were only
requesting Subic Water to be a co-maker, in view of its assumption of OCWDs water
operations. Under these circumstances, Olongapo City cannot proceed after Subic
Water for OCWDs unpaid obligations. The law explicitly states that solidary liability
is not presumed and must be expressly provided for. Not being a surety, Subic
Water is not an insurer of OCWDs obligations under the compromise agreement.

122

ESTANISLAO AND AFRICA SINAMBAN VS. CHINA BANKING CORPORATION G.R.


No. 193890. March 11, 2015, J. REYES
A co-maker of a promissory note who binds himself with the maker jointly and
severally renders himself directly and primarily liable with the maker on the debt,
without reference to his solvency.
INIMACO vs. NLRC, G.R. NO. 101723, M ay 11, 2000
The absence of the word "solidary" in the dispositive portion of the
Decision, renders the liability joint. Well-entrenched is the rule that
solidary obligation cannot lightly be inferred, and there is a solidary
liability only when the obligation expressly so states, when the law so
provides or when the nature of the obligation so requires.
PNB vs. INDEPENDENT PLANTERS ASSOCIATION, INC., G.R. NO.L 28046.
M ay 16, 1983
PNB assails the order of dismissal of the lower court dismissing its
complaint against several solidary debtors on the gr.ound that one of the
defendants died during the pendency of the case and therefore the
complaint, being a money claim based on contract, should be prosecuted
in the testate or intestate proceeding for the settlement of the estate of
the deceased. The choice is undoubtedly left to the solidary creditor to
determine against whom he will enforce collection and in case of the
death of one of the solidary debtors, the creditor may, if he so chooses,
proceed against the surviving solidary debtors without necessity of filing
a claim in the estate of the deceased debtors.
JOINT OBLIGATIONS
TOPIC: JOINT and SOLIDARY OBLIGATIONS
RONQUILLO vs.CA, G.R. NO. L-55138September 28, 1984

Respondent filed a modification of the order of the lower court in a


collection case praying for the "execution of the decision in its entirety
against all defendants, jointly and severally." In the absence of a finding
of facts that the defendants made themselves individually liable for the
debt incurred they are each liable only for one-fourth of said amount, the
obligation being described as "individually and jointly".
123

JOINT and SOLIDARY OBLIGATIONS


SPOUSES CHIN KONG WONG CHOI AND ANA O. CHUA VS. UNITED COCONUT
PLANTERS BANK, G.R. No. 207747. March 11, 2015, J. Carpio
Spouses Choi entered into contract to sell with Primetown Property Group, Inc. a
domestic corporation engaged in the business of condominium construction and
real estate development. Primetown on the other hand assigned its receivables to
United Coconut Planters Bank. Despite full payment Primetown failed to deliver the
condominium unit. Spouses Choi sued UCPB and Primetown. UCPB was not
Primetowns successor-in-interest and was not jointly and severally liable with
Primetown for the latters failure to deliver the condominium unit. The Supreme
Court held that considering that UCPB is a mere assignee of the rights and
receivables under the Agreement, UCPB did not assume the obligations and
liabilities of Primetown under its contract to sell with Spouses Choi.
CALANG vs. PEOPLE OF THE PHILIPPINES, G.R. NO. 190696
August 3, 2010
Philtranco Bus has been held solidarily liable with its bus driver, Calang,
when Calang accidentally collided with a jeepney killing a bystander and
two jeepney passengers while other passengers were seriously injured.
Since the cause of action against Calang was based on delict, Philtranco
cannot be held jointly and severally liable with Calang, based on quasidelict under Articles 2176 and 2180 of the Civil Code which pertain to
the vicarious liability of an employer for quasi-delicts that an employee
has committed.
IX. EXTINGUISHMENT OF OBLIGATIONS
MODES OF EXTINGUISHING OBLIGATIONS
SAURA IMPORT and EXPORT CO., INC. vs. DEVELOPMENT BANK OF
THE PHILIPPINES, G.R. NO. L-24968
April 27, 1972
RFC turned down the request of Saura, Inc. for an additional loan which
prompted Saura, Inc. to ask that the mortgage be cancelled, which was
done. The action thus taken by both parties was in the nature mutual
desistance what Manresa terms "mutuo disenso" which is a mode of
extinguishing obligations, a concept that derives from the principle that
since mutual aG.R.eement can create a contract, mutual disaG.R.eement
by the parties can cause its extinguishment.
124

A. EXTINGUISHM ENT BY PAYMENT OR PERFORMANCE


RIVELISA REALTY, INC. VS. FIRST STA. CLARA BUILDERS CORPORATION G.R.
No. 189618, January 15, 2014, J. Perlas-Bernabe
First Sta. Clara is entitled to be compensated for the development works it had
accomplished on the project based on the principle of quantum meruit. Case law
instructs that under this principle, a contractor is allowed to recover the reasonable
value of the thing or services rendered despite the lack of a written contract, in
order to avoid unjust enrichment. Quantum meruit means that, in an action for work
and labor, payment shall be made in such amount as the plaintiff reasonably
deserves. The measure of recovery should relate to the reasonable value of the
services performed because the principle aims to prevent undue enrichment based
on the equitable postulate that it is unjust for a person to retain any benefit without
paying for it. In this case, it is undisputed that First Sta. Clara already performed
certain works on the project with an estimated value of P4,578, 152.10. Clearly, to
completely deny it payment for the same would result in Rivelisa Realty's unjust
enrichment at the former' s expense. Besides, as may be gleaned from the parties'
correspondence, Rivelisa Realty obligated itself to unconditionally reimburse First
Sta. Clara the amount of P3,000,000.00 (representing First Sta. Clara's valuation of
its accomplished works at P4,578,152.10, less the cash advances and
subcontractor's fees) after the JV A had already been terminated by them through
mutual assent. As such, Rivelisa Realty cannot unilaterally renege on its promise by
citing First Sta. Clara's non-fulfilment of the terms and conditions of the terminated
JVA. For all these reasons, the CA' s ruling must be upheld.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK (now BDO UNIBANK, INC.),
vs. ARTURO P. FRANCO, substituted by his heirs, namely: MAURICIA P.
FRANCO, FLORIBEL P. FRANCO, AND ALEXANDER P. FRANC0,G.R. No. 180069,
March 5, 2014, J. Peralta
Payment: Although Article 1271 of the Civil Code provides for a legal presumption of
renunciation of action (in cases where a private document evidencing a credit was
voluntarily returned by the creditor to the debtor), this presumption is
merely prima facie and is not conclusive; the presumption loses efficacy when faced
with evidence to the contrary. The provision merely raises a presumption, not of
payment, but of the renunciation of the credit where more convincing evidence
would be required than what normally would be called for to prove payment.
NETLINK COMPUTER INCORPORATED vs. ERIC DELMO, G.R No. 160827, June
18, 2014, J. Bersamin
One who pleads payment has the burden of proving it. Even where the plaintiff must
allege non-payment, the general rule is that the burden rests on the defendant to
prove payment, rather than on the plaintiff to prove non-payment. When the
125

creditor is in possession of the document of credit, he need not prove non-payment


for it is presumed. The creditor's possession of the evidence of debt is proof that the
debt has not been discharged by payment. In this case, respondent's possession of
the original copies of the subject Trust Indenture Certificate strongly supports his
claim that petitioner Bank's obligation to return the principal plus interest of the
money placement has not been extinguished.
As a general rule, all obligations shall be paid in Philippine currency. However, the
contracting parties may stipulate that foreign currencies may be used for settling
obligations. This notwithstanding, the practice of a company of paying its sales
agents in US dollars must be taken into consideration.
Thus, in the absence of a written agreement between the employer and the
employee that sales commissions shall be paid in a foreign currency, the latter has
the right to be paid in such foreign currency once the same has become an
established practice of the former. The rate of exchange at the time of payment, not
the rate of exchange at the time of the sales, controls.
With the payment of US dollar commissions having ripened into a company practice,
there is no way that the commissions due to Delmo were to be paid in US dollars or
their equivalent in Philippine currency determined at the time of the sales. To rule
otherwise would be to cause an unjust diminution of the commissions due and
owing to Delmo.
ELIZABETH DEL CARMEN vs. SPOUSES RESTITUTO SABORDO and MIMA
MAHILUM-SABORDO, G.R. No. 181723, August 11, 2014, J. Peralta
It is settled that compliance with the requisites of a valid consignation is
mandatory. Failure to comply strictly with any of the requisites will render the
consignation void. One of these requisites is a valid prior tender of payment. In the
instant case, the SC finds no cogent reason to depart from the findings of the CA and
the RTC that Del Carmen and her co-heirs failed to make a prior valid tender of
payment to Sabordo.

Under Article 1256, the only instances where prior tender of payment is excused
are: (1) when the creditor is absent or unknown, or does not appear at the place of
payment; (2) when the creditor is incapacitated to receive the payment at the time it
is due; (3) when, without just cause, the creditor refuses to give a receipt; (4) when
two or more persons claim the same right to collect; and (5) when the title of the
obligation has been lost. None of these instances are present in the instant case.
Hence, the fact that the subject lots are in danger of being foreclosed does not

126

excuse petitioner and her co-heirs from tendering payment to respondents, as


directed by the court.
LEONARDO BOGNOT vs. RRI LENDING CORPORATION, REPRESENTED BY ITS
GENERAL MANAGER, DARIO J. BERNARDEZ, G.R. No. 180144, September 24,
2014, J. Brion
Novation: In order to give novation legal effect, the creditor should consent to the
substitution of a new debtor. Novation must be clearly and unequivocally shown,
and cannot be presumed.
RODRIGO RIVERA VS. SPOUSES SALVADOR C. CHUA AND VIOLETA S. CHUA/
SPOUSES SALVADOR C. CHUA AND VIOLETA S. CHUA VS. RODRIGO RIVERA, G.R.
Nos. 184458/184472. January 14, 2015, J. Perez
There are four instances when demand is not necessary to constitute the de btor in
default: (1) when there is an express stipulation to that effect; (2) where the law so
provides; (3) when the period is the controlling motive or the principal inducement
for the creation of the obligation; and (4) where demand would be useless. In the
first two paragraphs, it is not sufficient that the law or obligation fixes a date for
performance; it must further state expressly that after the period lapses, default will
commence. Based on a promissory note the parties evidently agreed that the
maturity of the obligation at a date certain, 31 December 1995. Until 31 December
1995, demand was not necessary before Rivera could be held liable for the principal
amount of P120,000.00. Thereafter, on 1 January 1996, upon default, Rivera became
liable to pay the Spouses Chua not only the principal obligation but also damages, in
the form of stipulated interest.
THE WELLEX GROUP INC. VS. U-LAND AIRLINES CO. LTD. G.R. No. 167519.
January 14, 2015, J. Leonen
Petitioner Wellex and respondent U-Land bound themselves to negotiate with each
other within a 40-day period to enter into a share purchase agreement. If no share
purchase agreement was entered into, both parties would be freed from their
respective undertakings. It is the non-occurrence or non-execution of the share
purchase agreement that would give rise to the obligation to both parties to free
each other from their respective undertakings. This includes returning to each other
all that they received in pursuit of entering into the share purchase agree ment. At
the lapse of the 40-day period, the parties failed to enter into a share purchase
agreement. This lapse is the first circumstance provided for in Article 1185 that
gives rise to the obligation. Applying Article 1185, the parties were then obligate d to
return to each other all that they had received in order to be freed from their
respective undertakings.

127

NATIONAL POWER CORPORATION vs. LUCMAN M. IBRAHIM et al., G.R. No.


175863, February 18, 2015, J. Perez
Article 1242 of the Civil Code is an exception to the rule that a valid payment of an
obligation can only be made to the person to whom such obligation is rightfully
owed. It contemplates a situation where a debtor pays a possessor of credit i.e.,
someone who is not the real creditor but appears, under the circumstances, to be
the real creditor. In such scenario, the law considers the payment to the possessor
of credit as valid even as against the real creditor taking into account the good faith
of the debtor. Hence, NAPOCORs payment to Mangondato of the fees and indemnity
due for the subject land as a consequence of the execution of Civil Case No. 605 -92
and Civil Case No. 610-92 could still validly extinguish its obligation to pay for the
same even as against the Ibrahims and Maruhoms.
AZCONA vs. JAMANDRE, G.R. NO. L-30597, SCRA, June 30, 1987
The rental stipulated therein was P7,200.00 but payment being
acknowledged in the receipt was P7,000.00 only, yet no mention was
made in the receipt of the discrepancy and, on the contrary, the payment
was acknowledged "as per contract". 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.
J. M . Tuason & Co., Inc. vs. Javier, NO. L-28569, February 27, 1970
Apart from the initial installment of P396.12, paid upon the execution of
the contract, the defendant religiously satisfied the monthly installments
accruing thereafter, for a period of almost eight (8) years and although
the principal obligation under the contract was P3,691.20, the total
payments made by the defendant
including stipulated interest,
aggregated P4,134.08.
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.
ART 1240
TO W HOM PAYMENT SHOULD BE MADE
SPOUSES M INIAN0 vs. CONCEPCION, G.R. 172825, October 11,
2012

128

Admittedly, payment of the remaining balance of P200,000.00 was not


made to the creditors themselves, but rather, it was allegedly made to a
certain Losloso who was the authorized agent of petitioners.
Respondents obligation consists of payment of a sum of money, and in
general, a payment in order to be effective to discharge an obligation,
must be made to the proper person, thus, payment must be made to the
obligee himself or to an agent having authority, express or implied, to
receive the particular payment. Payment made to one having apparent
authority to receive the money will, as a rule, be treated as though actual
authority had been given for its receipt. If payment is made to one who
by law is authorized to act for the creditor, it will work as a discharge.
ARANAS vs. TUTAAN, 127 SCRA 828
All dividends accruing to the said shares after the rendition of judgment
belonged to Aranas but UTEX paid the co-defendants despite its
knowledge and understanding of the final judgment. It is elementary
that payment made by a judgment debtor to a wrong party cannot
extinguish the obligation of such debtor to its creditor.
PAYMENT NOT IN PHIL CURRENCY
HYDRO RESOURCES vs. NATIONAL IRRIGATION ADM INISTRATION,
G.R. NO. 160215, November 10, 2004
The contract between NIA and Hydro is an internationally tendered
contract considering that it was funded by the International Bank for
Reconstruction and Development (IBRD). As a contract funded by an
international organization, particularly one recognized by the
Philippines,3 the contract is exempt from the provisions of R.A. No. 529,
as amended by. R.A. No. 4100 (Act To Assure Uniform Value to
Philippine Coin And Currency).
PONCE vs. THE HONORABLE COURT OF APPEALS, G.R. NO. L -49494
May 31, 1979
The promissory note in question provided on its face for payment of the
obligation in Philippine currency, but the aG.R.eement between the
parties originally involved a dollar transaction.
If there is any agreement to pay an obligation in a currency other than
Philippine legal tender, the same is null and void as contrary to public
policy, pursuant to Republic Act No. 529, and the most that could be
demanded is to pay said obligation in Philippine currency, hence, a
129

creditor herein cannot oblige the debtor to pay him in dollars, even if the
loan were given in said currency.
KALALO vs. LUZ, G.R. NO. L-27782, July 31, 1970
Appellant claims that lower court erred in declaring and holding that the
balance owing from defendant-appellant to plaintiff-appellee on the IRRI
Project should be paid on the basis of the rate of exchange of the U.S.
dollar to the Philippine peso at the time of payment of judgment. Even if
the obligation assumed by the defendant was to pay the plaintiff a sum of
money expressed in American currency, the indemnity to be allowed
should be expressed in Philippine currency at the rate of exchange at the
time of judgment rather than at the rate of exchange prevailing on the
date of defendant's breach.
LEGAL TENDER
TIBAJIA vs. CA, G.R. NO. 100290, June 4, 1993
Checks representing deposit money do not have legal tender power and
their acceptance in the payment of debts, both public and private, is at
the option of the creditor.
ROMAN CATHOLIC vs. INTERMEDIATE APPELLATE COURT, G.R.
NO. 72110. November 16, 1990.
Since a negotiable instrument is only a substitute for money and not
money, the delivery of such an instrument does not, by itself, operate as
payment. A check, whether a managers check or ordinary check, is not
legal tender, and an offer of a check in payment of a debt is not a valid
tender of payment and may be refused receipt by the obligee or creditor.
PAPA vs. VALENCIA, G.R. NO. 105188, January 23, 1998
Petitioner received the payment partly in cash and partly in check but
was not able to encash the check, and now questions the said payment
after 10 years. Respondents, on the other hand, want the petitioner to
deliver to them the owners duplicate of the title and the peaceful
possession and enjoyment of the lot in question.
The geneal rule is delivery of a check produces the effect of payment only
when it is cashed, pursuant to Art. 1249 of the Civil Code. The rule does
not apply, however, if
the debtor is prejudiced by the creditors
unreasonable delay in the presentment of the check. Acceptance of a
check implies an undertaking of due diligence in presenting it for
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payment, and if he from whom it is received sustains loss by want of


such diligence, it will be held to operate as actual payment of the debt or
obligation for which it was given.
B. CONSIGNATION
ART 1257
SOCO vs. M ILITANTE, G.R. NO. L-58961 June 28, 1983
Defendant authorized the Commercial Bank and Trust Company to issue
checks to the plaintiff for the payment of rentals, but the plaintiff refused
to accept them. In view of such refusal, defendant instructed said bank
to make consignation with the Clerk of Court of the City Court, but the
bank did not send notice to Soco that the checks will be deposited in
consignation with the Clerk of Court.
The purpose of the notice, which is essential to the validity of the
consignation, is in order to give the creditor an opportunity to reconsider
his unjustified refusal and to accept payment thereby avoiding
consignation and the subsequent litigation, hence, failure to give such
notice renders the consignation void.
DALTON vs. FG.R. and DEVELOPMENT CORP, G.R. NO. 172577
January 19, 2011
The withdrawal by the creditor of the amounts consigned was subject to
the express reservation of assailing the validity of the consignation. In
such case, the creditor is not deemed to have waived the claims he
reserved against his debtor. When the amount consigned does not cover
the entire obligation, the creditor may accept it, reserving his right to the
balance.
ART 1258
SOCO vs. M ILITANTE, G.R. NO. L-58961 June 28, 1983
If the creditor to whom tender of payment has been made refuses without
just cause to accept it, the debtor shall be released from responsibility by
consignation which is the act of depositing the thing due with the court
or judicial authorities but it generally requires a prior tender of payment.
ART 1259
SOCO vs. M ILITANTE, G.R. NO. L-58961 June 28, 1983

131

Defendant contended that payments of rental thru checks were made to


the plaintiff but the latter refused to accept them, hence defendant
authorized the bank to make consignation with the Clerk of Court. In
order to be valid, the tender of payment must be made in lawful
currency, but payment in check by the debtor may be acceptable as
valid, if no prompt objection to said payment is made.
SOCO vs. M ILITANTE, G.R. NO. L-58961 June 28, 1983
The decision subject of the present petition for review holds the view that
there was substantial compliance with the requisites of consignation and
so ruled in favor of private respondent. Substantial compliance is not
enough and the essential requisites of a valid consignation, under
Articles 1256 to 1261 of the New Civil Code must be complied with fully
and strictly in accordance with the law and must be accorded a
mandatory construction.
Immaculata vs. Navarro, G.R. NO.L-42230, April 15, 1988
Respondents alleged that the offer to redeem was not sincere, because
there was no consignation. The right to redeem is a RIGHT, not an
obligation, therefore, there is no consignation required to preserve the
right to redeem.
TENDER OF PAYMENT
SPOUSES CACAYORIN vs. ARMED FORCES AND POLICE MUTUAL
BENEFIT ASSOCIATION, INC., G.R. NO.171298, April 15, 2013
Petitioner alleged that the lack of prior tender of payment to their
consignation case is because they were at a loss as to which between the
two the Rural Bank or AFPMBAI was entitled to such a tender of
payment. Article 1256 authorizes consignation alone, without need of
prior tender of payment, where the ground for consignation is that the
creditor is unknown, or does not appear at the place of payment; or is
incapacitated to receive the payment at the time it is due; or when,
without just cause, he refuses to give a receipt; or when two or more
persons claim the same right to collect; or when the title of the obligation
has been lost.
SPOUSES TEOFILO vs. REYES, G.R. NO. 150913, February 20, 2003
Petitioners failed to (a) offer a valid and unconditional tender of payment;
(b) notify respondents of the intention to deposit the amount with the
court; and (c) show the acceptance by the creditor of the amount
132

deposited as full settlement of the obligation, or in the alternative, a


declaration by the court of the validity of the consignation.
In order that consignation may be effective the debtor must show that (a)
there was a debt due; (b) the consignation of the obligation had been
made because the creditor to whom a valid tender of payment was made
refused to accept it; (c) previous notice of the consignation had been
given to the person interested in the performance of the obligation; (d)
the amount due was placed at the disposal of the court; and, (e) after the
consignation had been made the person interested was notified thereof.
SPOUSES CACAYORIN vs. ARMED FORCES AND POLICE MUTUAL
BENEFIT ASSOCIATION, INC., G.R. NO.171298 : April 15, 20 13
Petitioner alleged that the lack of prior tender of payment to their
consignation case was because they were at a loss as to which between
the two the Rural Bank or AFPMBAI was entitled to such a tender of
payment.
Article 1256 authorizes consignation alone, without need of prior tender
of payment, where the ground for consignation is that the creditor is
unknown, or does not appear at the place of payment; or is incapacitated
to receive the payment at the time it is due; or when, without just cause ,
he refuses to give a receipt; or when two or more persons claim the same
right to collect; or when the title of the obligation has been lost.
C. DACION EN PAGO
CALTEX (PHILIPPINES), INC., vs. CA, G.R. NO. 72703, November 13,
1992
Dation in payment does not necessarily mean total extinguishment of the
obligation but only up to the value of the thing given and the obligation is
totally extinguished only when the parties, by aG.R.eement, express or
implied, or by their silence, consider the thing as equivalent to the
obligation.
PNB vs. PINEDA, G.R. NO. L-46658 M ay 13, 1991
Dation in payment is the delivery and transmission of ownership of a
thing by the debtor to the creditor as an accepted equivalent of the
performance of the obligation. The repossession of the machinery and
equipment in question was merely to secure the payment of TCC's loan
133

obligation and not for the purpose of transferring ownership thereof to


PNB in satisfaction of said loan.
FILINVEST vs PHILIPPINE ACETYLENE, G.R. NO. L -50449 January
30, 1982
In the absence of clear consent of appellee to the proferred special mode
of payment, there can be no transfer of ownership from appellant to
appellee by mere delivery to and acceptance by him of the vehicle and
should not be construed as actual payment or more specifically, dacion
en pago.
CITIZENS SURETY vs. COURT OF APPEALS, G.R. NO. L -48958 June
28, 1988
In opposing the money claim, Respondent alleged that the surety bonds
and the indemnity agreements had been extinguished by the execution of
the deed of assignment, because this amounted to dation in payment
whereby the former is considered to have alienated his property in favor
of the latter in satisfaction of a monetary debt (Artide 1245).
The
transaction could not be dation in payment because the deed of
assignment was executed on December 4, 1959, the obligation of the
assignor to refund the assignee had not yet arisen, hence, there was no
obligation yet on the part of the petitioner.
D. COMPENSATION
FIRST UNITED CONSTRUCTIONS CORPORATION AND BLUE STAR
CONSTRUCTION CORPORATION vs. BAHANIHAN AUTOMOTIVE CORPORATION,
G.R. No. 164985, January 15, 2014, J. Bersamin
A debt is liquidated when its existence and amount are determined. Accordingly, an
unliquidated claim set up as a counterclaim by a defendant can be set off against the
plaintiffs claim from the moment it is liquidated by judgment. Article 1290 of the
Civil Code provides that when all the requisites mentioned in Article 1279 of the
Civil Code are present, compensation takes effect by operation of law, and
extinguishes both debts to the concurrent amount. With petitioners expenses for
the repair of the dump truck being already established and determined with
certainty by the lower courts, it follows that legal compensation could take place
because all the requirements were present. The legal interest rate to be imposed
from February 11, 1993,the time of the extrajudicial demand by respondent, should
be 6% per annum in the absence of any stipulation in writing in accorda nce with
Article 2209 of the Civil Code.

134

UNION BANK OF THE PHILIPPINES VS. DEVELOPMENT BANK OF THE


PHILIPPINES, G.R. No.191555, January 20, 2014, J. Perlas-Bernabe
Compensation is defined as a mode of extinguishing obligations whereby two
persons in their capacity as principals are mutual debtors and creditors of each
other with respect to equally liquidated and demandable obligations to which no
retention or controversy has been timely commenced and communicated by third
parties
In this case, Union Bank filed a motion to seek affirmation that legal compensation
had taken place in order to effectively offset (a) its own obligation to return the
funds it previously received from DBP as directed under the September 6, 2005 Writ
of Execution with (b) DBPs assumed obligations under the Assumption Agreement.
However, legal compensation could not have taken place between these debts for
the apparent reason that requisites 3 and 4 under Article 1279 of the Civil Code are
not present. Since DBPs assumed obligations to Union Bank for remittance of the
lease payments are in the Courts words in its Decision dated January 13, 2004 in
G.R. No. 155838 " contingent on the prior payment thereof by [FW] to DBP," it
cannot be said that both debts are due (requisite 3 of Article 1279 of the Civil Code).
Also, in the same ruling, the Court observed that any deficiency that DBP had to
make up (by December 29, 1998 as per the Assumption Agreement) for the full
satisfaction of the assumed obligations " cannot be determined until after the
satisfaction of Foodmasters obligation to DBP." In this regard, it cannot be
concluded that the same debt had already been liquidated, and thereby became
demandable (requisite 4 of Article 1279 of the Civil Code).
In fine, since requisites 3 and 4 of Article 1279 of the Civil Code have not concurred
in this case, no legal compensation could have taken place between the above -stated
debts pursuant to Article 1290 of the Civil Code. Perforce, the petition must be
denied, and the denial of Union Banks motion to affirm legal compensation
sustained.
CESAR V. AREZA and LOLITA B. AREZA V EXPRESS SAVINGS BANK, INC. and
MICHAEL POTENCIANO. G.R No. 176697, September 10, 2014. J. Perez
Under Art. 1278 of the New Civil Code, compensation shall take place when two
persons, in their own right, are creditors and debtors of each other.

The relationship of the depositors and the Bank or similar institution is that of
creditor-debtor. Article 1980 of the New Civil Code provides that fixed, savings and
current deposits of money in banks and similar institutions shall be governed by the
provisions concerning simple loans. The bank is the debtor and the depositor is the
creditor. The depositor lends the bank money and the bank agrees to pay the
depositor on demand. The savings deposit agreement between the bank and the
135

depositor is the contract that determines the rights and obligations of the parties.
Petitioners are not liable for the deposit of the altered checks. The Bank, as the
depositary and collecting bank ultimately bears the loss. Thus, there being no
indebtedness to the Bank on the part of petitioners, legal compensation cannot take
place.Under Art. 1278 of the New Civil Code, compensation shall take place when
two persons, in their own right, are creditors and debtors of each other.
FEDERAL BUILDERS, INC. vs.FOUNDATION SPECIALISTS, INC., G.R. No. 194507,
September 8, 2014, J. Peralta

In the landmark case of Eastern Shipping Lines, Inc. v. Court of Appeals, as regards
particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
When the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of stipulation, the
rate of interest shall be 12% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code. In line with the recent circular of the Monetary Board of the
Bangko Sentral ng Pilipinas No. 799 (July 1, 2013), the Court has modified the
guidelines in Nacar v. Gallery Frames, wherein the interest due shall itself earn
legal interest from the time it is judicially demanded and in the absence of
stipulation, the rate of interest shall be 6% per annum to be computed from default,
i.e., from judicial or extrajudicial demand under and subject to the provisions of
Article 1169 of the Civil Code. This case, however, does not involve acquiescence to
the temporary use of a partys money but a performance of a particular service,
specifically the construction of the diaphragm wall, capping beam, and guide walls
of the Trafalgar Plaza. Thus, in the absence of any stipulation as to interest in the
agreement between the parties herein, the matter of interest award arising from the
dispute in this case would actually fall under the second paragraph of the above quoted guidelines in the landmark case of Eastern Shipping Lines, which
necessitates the imposition of interest at the rate of 6%, instead of the 12% imposed
by the courts below. As to the rate of interest due thereon, however, the Court notes
that the same should be reduced to 6% per annum considering the fact that the
obligation involved herein does not partake of a loan or forbearance of money.
SOLINAP vs. DEL ROSARIO, G.R. No. L-50638 July 25, 1983
For compensation to take place, it is required that the amount involved
be certain and liquidated. Compensation cannot take place where one's
claim against the other is still the subject of court litigation.
ART 1980
BPI vs CA, G.R. NO. 136202, January 25, 2007
136

Petitioner, as a collecting agent, debited Salazar's account. The account


was different from the original account to which the proceeds of the
check were credited but both accounts belonged to Salazar. The debited
account was the account of the sole proprietorship she owns. The other
account was her personal account.
A bank generally has a right of set-off over the deposits therein for the
payment of any withdrawals on the part of a depositor, because fixed,
savings, and current deposits of money in banks and similar institutions
are governed by the provisions concerning simple loan, hence, the
relationship between banks and depositors is that of creditor and debtor.
Legal compensation under Article 1278 of the Civil Code may take place
when all the requisites mentioned in Article 1279 are present.
GAN TION vs. HON. COURT OF APPEALS, G.R. NO. L -22490, M ay 21,
1969
The award for attorney's fees is made in favor of the litigant, not of his
counsel, hence, it is the litigant, not his counsel, who is the judgment
creditor and who may enforce the judgment by execution, such credit,
therefore, may properly be the subject of legal compensation.
ART 1278
PNB vs VDA. DE ONG ACERO, G.R. NO. L-69255, February 27, 1987
PNB's main thesis is that when it opened a savings account for ISABELA,
it (PNB) became indebted to ISABELA, so that when ISABELA itself
subsequently came to be indebted to it on account of ISABELA's breach
of the terms of the Credit Agreement, ISABELA and PNB became at the
same time creditors and debtors of each other, thus compensation
automatically took place between them, in accordance with Article 1278
of the Civil Code.
Compensation shall take when two persons, in their own right, are
creditors and debtors of each other and that compensation may transpire
by operation of law, as when all the requisites therefor, set out in Article
1279, are present. Nonetheless these legal provisions can not apply if it
has not proven by competent evidence that PNB is a creditor of ISABELA.
FRANCIA vs. IAC, G.R. NO. L-67649 June 28, 1988

137

Francia contends that his tax delinquency has been extinguished by legal
compensation and claims that the government owed him when a portion
of his land was expropriated, hence, his tax obligation had been set-off
by operation of law.
The general rule based on grounds of public policy is well-settled that no
set-off admissible against demands for taxes levied for general or local
governmental purposes because taxes are not in the nature of contracts
between the party and party but grow out of duty to, and are the positive
acts of the government to the making and enforcing of which, the
personal consent of individual taxpayers is not required.
SYCIP vs. HONORABLE COURT OF APPEALS, G.R. NO. L -38711,
January 31, 1985
Petitioner contends that respondent Court of Appeals erred in not
applying the provisions on compensation or setting-off debts despite
evidence showing that Lapuz, an agent of Albert Smith and/or Dr.
Dwight Dill, owed him. Compensation takes place only when two persons
in their own right are creditors and debtors of each other, and that each
one of the obligors is bound principally and is at the same time a
principal creditor of the other.
MINDANAO PORTLAND CEMENT CORPORATION vs. CA, G.R. NO. L62169, February 28, 1983
It is clear from the record that both corporations, petitioner Mindanao
Portland Cement Corporation (appellant) and respondent Pacweld Steel
Corporation (appellee), were creditors and debtors of each other, their
debts to each other consisting in final and executory judgments of the
Court of First Instance in two (2) separate cases, ordering the payment to
each other of the sum of P10,000.00 by way of attorney's fees. The two
(2) obligations, therefore, respectively offset each other, compensation
having taken effect by operation of law and extinguished both debts to
the concurrent amount of P10,000.00, pursuant to the provisions of
Arts. 1278, 1279 and 1290 of the Civil Code, since all the requisites
provided in Art. 1279 of the said Code for automatic compensation "even
though the creditors and debtors are not aware of the compensation"
were duly present.
THE INTERNATIONAL CORPORATE BANK INC. vs. IAC, G.R. NO. L69560 June 30, 1988
Petitioner contended that, after extrajudicially foreclosing the mortgage,
private respondent still owes the former an amount, by way of deficiency.
138

Petitioner also claimed that it has the right to apply or set off private
respondent's money market claim despite the fact that the validity of the
extrajudicial foreclosure sale and petitioner's claim for deficiency are still
in question.
Article 1279 of the Civil Code requires among others, that in order that
legal compensation shall take place, "the two debts be due" and "they be
liquidated and demandable", because compensation is not proper where
the claim of the person asserting the set-off against the other is not clear
nor liquidated.
MONDRAGON vs. SOLA, JR., G.R. NO. 174882 January 21, 2013
Respondent reneged on his promise to pay petitioner. Petitioner
thereafter withheld the payment of respondent's service fees and applied
the same as partial payments of the debt by way of compensation.
Compensation is a mode of extinguishing to the concurrent amount the
obligations of persons who in their own right and as principals are
reciprocally debtors and creditors of each other. Legal compensation
takes place by operation of law when all the requisites are present, as
opposed to conventional compensation which takes place when the
parties aG.R.ee to compensate their mutual obligations even in the
absence of some requisites.
MONTEMAYOR vs. M ILLORA, G.R. NO. 168251.

July 27, 2011

Jesus contends that offsetting cannot be made because the judgment of


the RTC failed to specify the amount of attorneys fees and maintains
that for offsetting to apply, the two debts must be liquidated or
ascertainable and the trial court merely awarded to Vicente attorneys
fees based on quantum meruit without specifying the exact amount
thereof. A debt is considered liquidated, not only when it is expressed
already in definite figures which do not require verification, but also
when the determination of the exact amount depends only on a simple
arithmetical operation.
E. NOVATION
ARCO PULP AND PAPER CO., INC. and CANDIDA A. SANTOS vs. DAN T. LIM,
doing business under the name and style of QUALITY PAPERS & PLASTIC
PRODUCTS ENTERPRISES, G.R. No. 206806, June 25, 2014, J. Leonen
Arco Pulp and Paper had an alternative obligation whereby it would either pay Dan
T. Lim the value of the raw materials or deliver to him their finished products of
139

equivalent value. When petitioner Arco Pulp and Paper tendered a check to Lim in
partial payment for the scrap papers, they exercised their option to pay the price.
This choice was also shown by the terms of the memorandum of agreement which
declared in clear terms that the delivery of petitioner Arco Pulp and Papers finished
products would be to a third person, thereby extinguishing the option to deliver the
finished products of equivalent value to respondent. The trial court erroneously
ruled that the execution of the memorandum of agreement constituted a novation of
the contract between the parties. Novation extinguishes an obligation between two
parties when there is a substitution of objects or debtors or when there is
subrogation of the creditor. The consent of the creditor must be secured for the
novation to be valid. In this case, Lim was not privy to the memorandum of
agreement, thus, his conformity to the contract need not be secured. If the
memorandum of agreement was intended to novate the original agreement between
the parties, respondent must have first agreed to the substitution of Eric Sy as his
new debtor.
THE WELLEX GROUP, INC. vs. U-LAND AIRLINES, CO., LTD., G.R. No. 167519.
January 14, 2015, J. Leonen
Because novation requires that it be clear and unequivocal, it is never presumed.
The parties did not enter into any subsequent written agreement that was couched
in unequivocal terms. The transaction of the First Memorandum of Agreement
involved large amounts of money from both parties. Any subsequent agreement
would be expected to be clearly agreed upon with their counsels assistance and in
writing, as well. Thus there was no express novation. There was also no implied
novation of the original obligation. There was no incompatibility between the
original terms of the First Memorandum of Agreement and the remittances ma de by
respondent U-Land for the shares of stock. These remittances were actually made
with the view that both parties would subsequently enter into a share purchase
agreement. It is clear that there was no subsequent agreement inconsistent with the
provisions of the First Memorandum of Agreement.
FORT BONIFACIO DEVELOPMENT CORPORATION vs. VALENTIN L. FONG., G.R.
No. 209370, March 25, 2015, J. Perlas-Bernabe
By virtue of the Deed of Assignment, the assignee is deemed subrogated to the rights
and obligations of the assignor and is bound by exactly the same conditions as those
which bound the assignor. Accordingly, an assignee cannot acquire greater rights
than those pertaining to the assignor. The general rule is that an assignee of a non negotiable chose in action acquires no greater right than what was possessed by his
assignor and simply stands into the shoes of the latter.55 Applying the foregoing,
the Court finds that MS Maxco, as the Trade Contractor, cannot assign or transfer
any of its rights, obligations, or liabilities under the Trade Contract without the
written consent of FBDC.
140

BANK OF THE PHILIPPINE ISLANDS VS. AMADOR DOMINGO (DECEASED)


SUBSTITUTED BY HIS CHILDREN, JOANN MOYA, ET AL. G.R. No. 169407. March
25, 2015, J. Leonardo-De Castro
The acceptance by a creditor of payments from a third person, who has assumed the
obligation, will result merely to the addition of debtors and not novation. The
creditor may therefore enforce the obligation against both debtors. As the Court
pronounced in Magdalena Estates, Inc. v. Rodriguez, 33 [t]he mere fact that the
creditor receives a guaranty or accepts payments from a third person who has
agreed to assume the obligation, when there is no agreement that the first debtor
shall be released from responsibility, does not constitute a novation, and the
creditor can still enforce the obligation against the original debtor. A stranger to a
contract may agree to assume an obligation; and while this may have the effect of
adding to the number of persons liable, it does not necessarily imply the
extinguishment of the liability of the first debtor. Neither would the fact alone that
the creditor receives guaranty or accepts payments from a third person who has
agreed to assume the obligation, constitute an extinctive novation absent an
agreement that the first debtor shall be released from responsibility.
Absent proof that BPI gave its clear and unmistakable consent to release the
spouses Domingo from the obligation to pay the car loan, Carmelita is simply
considered an additional debtor. Consequently, BPI can still enforce the obligation
against the spouses Domingo even 30 months after it had started accepting
payments from Carmelita.
LBP vs. ONG, , G.R. NO. 190755, November 24, 2010
Land Bank faults the CA for finding that novation given that substitution
of debtors was made without its consent, thus, it was not bound to
recognize the substitution under the rules on novation. Novation which
consists in substituting a new debtor in the place of the original one,
may be made even without the knowledge or against the will of the latter,
but not without the consent of the creditor.
BOYSAW vs. INTERPHIL PROMOTIONS, G.R. NO. L -22590, M arch 20,
1987
The assignment and transfer, first to Araneta, and subsequently, to
appellant Yulo, Jr., of the managerial rights over Boysaw is without the
knowledge or consent of Interphil. The consent of the creditor to the
change of debtors, whether in expromision or delegacion is an,
indispensable requirement , since substitution of one debtor for another
may delay or prevent the fulfillment of the obligation by reason of the

141

inability or insolvency of the new debtor, hence, the creditor should agree
to accept the substitution in order that it may be binding on him.
CALIFORNIA BUS LINES, INC. vs. STATE INVESTMENT HOUSE, INC.,
G.R. NO. 147950. December 11, 2003
There was no change in the object of the prior obligations in the
restructuring agreement since it merely provided for a new schedule of
payments and additional security giving Delta authority to take over the
management and operations of CBLI in case CBLI fails to pay
installments equivalent to 60 days. With respect to obligations to pay a
sum of money, this Court has consistently applied the well-settled rule
that the obligation is not novated by an instrument that expressly
recognizes the old, changes only the terms of payment, and adds other
obligations not incompatible with the old ones, or where the new contract
merely supplements the old one.
AJAX MARKETING vs. HON. COURT OF APPEALS, G.R. NO. 118585
September 14, 1995
In their interrelated first and second assignment of errors, petitioners
argue that a novation occurred when their three (3) loans, which are all
secured by the same real estate property were consolidated into a single
loan of P1 million under Promissory Note, thereby extinguishing their
monetary obligations and releasing the mortgaged property from liability.
The well settled rule is that novation is never presumed and it will not be
allowed unless it is clearly shown by express agreement, or by acts of
equal import, thus, to effect an objective novation it is imperative that
the new obligation expressly declare that the old obligation is thereby
extinguished, or that the new obligation be on every point incompatible
with the new one.
F. RESCISSION
SANGGUNIANG PANLUNGSOD NG BAGUIO CITY VS. JADEWELL PARKING SYSTEMS
CORPORATION
G.R.
NOS.
160025/163052/164107/165564/172215/172216/173043/174879/, April 23,
2014, J. SERENO

Rescission under Article 1191 takes place through either of two modes: (1) through
an extrajudicial declaration of rescission; or (2) upon the grant of a judicial decree of
rescission.
Extrajudicial declaration of rescission is recognized as a power which does not
require judicial intervention. If the rescission is not opposed, extrajudicial
142

declaration of rescission produces legal effect such that the injured party is already
relieved from performing the undertaking. However, the power of declaring
extrajudicial rescission conferred upon the injured party is regulated by the Civil
Code. If the extrajudicial rescission is impugned by the other party, it shall be
subject to a judicial determination where court action must be taken, and the
function of the court is to declare the rescission as having been properly or
improperly made, or to give a period within which the debtor must perform the
obligation alleged to be breached. A unilateral cancellation of a contract may be
questioned in courts by the affected party to determine whether or not cancellation
is warranted. Thus, in an extrajudicial decree of rescission, revocation canno t be
completely exercised solely on a partys own judgment that the other has committed
a breach of the obligation but always subject to the right of the other party to
judicially impugn such decision.
METROPOLITAN BANK AND TRUST COMPANY VS. WILFRED N. CHIOK/
BANK OF THE PHILIPPINE ISLANDS VS. WILFRED N. CHIOK/ GLOBAL
BUSINESS BANK INC.
VS.
WILFRED N. CHIOK G.R. Nos.
172652/175302/175394. November 26, 2014 J. LEONARDO-DE CASTRO
The injured party may choose between the fulfilment and the rescission of the
obligation, with the payment of damages in either case. He may also seek rescission,
even after he has chosen fulfilment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing
the fixing of a period. This is understood to be without prejudice to the rights of
third persons who have acquired the thing, in accordance with Articles 1385 and
1388 and the Mortgage Law.
The cause of action supplied by the above article, however, is clearly predicated
upon the reciprocity of the obligations of the injured party and the guilty party.
Reciprocal obligations are those which arise from the same cause, and in which each
party is a debtor and a creditor of the other, such that the obligation of one is
dependent upon the obligation of the other. They are to be performed
simultaneously such that the performance of one is conditioned upon the
simultaneous fulfillment of the other. When Nuguid failed to deliver the agreed
amount to Chiok, the latter had a cause of action against Nuguid to ask for the
rescission of their contract. On the other hand, Chiok did not have a cause of action
against Metrobank and Global Bank that would allow him to rescind the contracts of
sale of the managers or cashiers checks, which would have resulted in the crediting
of the amounts thereof back to his accounts.
THE WELLEX GROUP, INC. vs. U-LAND AIRLINES, CO., LTD., G.R. No. 167519.
January 14, 2015, J. Leonen

143

Wellex and U-Land bound themselves to negotiate with each other within a 40-day
period to enter into a share purchase agreement. If no share purchase agreement
was entered into, both parties would be freed from their respective undertakings.
For Article 1191 to be applicable, however, there must be reciprocal prestations as
distinguished from mutual obligations between or among the parties. A prestation is
the object of an obligation, and it is the conduct required by the parties to do or not
to do, or to give. Parties may be mutually obligated to each other, but the prestations
of these obligations are not necessarily reciprocal. The reciprocal prestations must
necessarily emanate from the same cause that gave rise to the existence of the
contract. U-Land correctly sought the principal relief of rescission or resolution
under Article 1191. The obligations of the parties gave rise to reciprocal prestations,
which arose from the same cause: the desire of both parties to enter into a share
purchase agreement that would allow both parties to expand their respective airline
operations in the Philippines and other neighboring countries.
SWIRE REALTY DEVELOPMENT CORPORATION VS. JAYNE YU. G.R. No. 207133.
March 9, 2015, J. PERALTA
Based on the ocular inspection conducted on the subject condominium project and
subject unit shows that the amenities under the approved plan have not yet been
provided as of May 3, 2002, and that the subject unit has not been delivered to
respondent as of August 28, 2002, which is beyond the period of development of
December 1999 under the license to sell. Incontrovertibly, petitioner had incurred
delay in the performance of its obligation amounting to breach of contract as it
failed to finish and deliver the unit to respondent within the stipulated period. The
delay in the completion of the project as well as of the delay in the delivery of the
unit are breaches of statutory and contractual obligations which entitle respondent
to rescind the contract under Article 1191, demand a refund and payment of
damages.
UNIVERSAL FOOD CORPORATION vs. CA, G.R. NO. L -29155, M ay 13,
1970
Respondent patentee was dismissed as the permanent chief chemist of
the corporation without any fault or negligence on his part after the
execution of the Bill of Assignment, prompting him to rescind the
contract. The general rule is that rescission of a contract will not be
permitted for a slight or casual breach, but only for such substantial and
fundamental breach as would defeat the very object of the parties in
making the agreement.
ART 1191
DEL CASTILLO Vda. DE M ISTICA vs. SPOUSES NAGUIAT, G.R. NO.
137909, December 11, 2003
144

In the present case, the failure of respondents to pay the balance of the
purchase price within ten years from the execution of the Deed did not
amount to a substantial breach. Under Article 1191 of the Civil Code,
the right to rescind an obligation is predicated on the violation of the
reciprocity between parties, brought about by a breach of faith by one of
them however, rescission is allowed only where the breach is substantial
and fundamental to the fulfillment of the obligation.
PALAY vs. CLAVE , G.R. NO. L-56076 September 21, 1983
The contract agreed upon by the parties provided for automatic
extrajudicial rescission upon default in payment without need of notice
and with forfeiture of all installments paid. Upon default of the
respondent, petitioner rescinded the contract. Responde nt questioned
the validity of the rescission. The judicial action for the rescission of a
contract is not necessary where the contract provides that it may be
revoked and cancelled for violation of any of its terms and conditions,
however there should be at least a written notice sent to the defaulter
informing him of the rescission.
ART 1169,1191
RODRIGO RIVERA vs. SPOUSES SALVADOR CHUA AND VIOLETA S. CHUA, G.R.
No. 184458 (consolidated), January 14, 2015, J. Perez
There are four instances when demand is not necessary to constitute the debtor in
default: (1) when there is an express stipulation to that effect; (2) where the law so
provides; (3) when the period is the controlling motive or the principal inducement
for the creation of the obligation; and (4) where demand would be useless. In the
first two paragraphs, it is not sufficient that the law or obligation fixes a date for
performance; it must further state expressly that after the period lapses, default will
commence.
Corollary thereto, Art. 2209 solidifies the consequence of payment of interest as an
indemnity for damages when the obligor incurs in delay.
Art. 2209 is specifically applicable in this instance where: (1) the obligation is for a
sum of money; (2) the debtor, Rivera, incurred in delay when he failed to pay on or
before 31 December 1995; and (3) the Promissory Note provides for an indemnity
for damages upon default of Rivera which is the payment of a 5% monthly interest
from the date of default.

145

SOLAR HARVEST, INC., vs DAVAO CORRUGATED


CORPORATION, G.R. NO. 176868.
July 26, 2010

CARTON

The CA added that even assuming that the agreement was for
respondent to deliver the boxes, respondent would not be liable for
breach of contract as petitioner had not yet demanded from it the
delivery of the boxes. Without a previous demand for the fulfillment of
the obligation, petitioner would not have a cause of action for rescission
against respondent as the latter would not yet be considered in breach of
its contractual obligation, since the right to rescind a contract arises
once the other party defaults in the performance of his obligation.
OSMEA III vs SSS, September 13, 2007
The Letter-Agreement, the SPA, the SSC resolutions assailed in this
recourse, and the Invitation to Bid sent out to implement said
resolutions, all have a common subject: the Shares the 187.84 Million
EPCIB common shares, which, as a necessary consequence of the BDOEPCIB merger which saw EPCIB being absorbed by the surviving BDO,
have been transferred to BDO and converted into BDO common shares
under the exchange ratio set forth in the BDO-EPCIB Plan of Merger. As
thus converted, the subject Shares are no longer equity security
issuances of the now defunct EPCIB, but those of BDO-EPCI, which,
needless to stress, is a totally separate and distinct entity from what
used to be EPCIB.
Under the law on obligations and contracts, the obligation to give a
determinate thing is extinguished if the object is lost without the fault of
the debtor, and per Art. 1192 (2) of the Civil Code, a thing is considered
lost when it perishes or disappears in such a way that it cannot be
recovered.
VILLAMAR vs. M ANGAOIL, G.R. NO. 188661 : April 11, 2012
Petitioner alleged that the absence of stipulations in the aG.R.eement
and absolute deed of sale entered into by Petitioner and Respondent
expressly indicating the consequences of the former's failure to deliver
the physical possession of the subject property and the certificate of title
covering the same, the Respondent is not entitled to demand for the
rescission of their contract pursuant to Article 1191 of the NCC.
The power to rescind obligations is implied in reciprocal ones, in case one
of the obligors should not comply with what is incumbent upon him",
146

this remains true notwithstanding the absence of express stipulations in


the agreement indicating the consequences of breaches which the parties
may commit.
AYSON-SIM ON vs. ADAM OS, G.R. NO. L-39378, August 28, 1984
Defendants contend (1) that the fulfillment and the rescission of the
obligation in reciprocal ones are alternative remedies, and plaintiff
having chosen fulfillment in the Civil Case, she cannot now seek
rescission; and (2) that even if plaintiff could seek rescission the action to
rescind the obligation has prescribed. The rule that the injured party
can only choose between fulfillment and rescission of the obligation, and
cannot have both, applies when the obligation is possible of fulfillment, if
the fulfillment has become impossible, Article 1191 (3) allows the injured
party to seek rescission even after he has chosen fulfillment.
ART 1234
ANGELES, ET AL vs. CALASANZ, G.R. NO. L -42283, M arch 18, 1985
The breach of the contract adverted to by the defendants-appellants is so
slight and casual when we consider that apart from the initial
downpayment of P392.00 the plaintiffs-appellees had already paid the
monthly installments for a period of almost nine (9) years. 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.
UP vs. DE LOS ANGELES, G.R. NO. L-28602, September 29,
In the first place, UP and ALUMCO had expressly stipulated in the
"Acknowledgment of Debt and Proposed Manner of Payments" that, upon
default by the debtor ALUMCO, the creditor (UP) has "the right and the
power to consider, the Logging Agreement dated as rescinded without the
necessity of any judicial suit."
The party who deems the contract violated may consider it resolved or
rescinded, and act accordingly, without previous court action, but it
proceeds at its own risk, for it is only the final judgment of the
corresponding court that will conclusively and finally settle whether the
action taken was or was not correct in law.
G. RESTITUTION

147

UNIVERSAL FOOD CORPORATION vs. THE COURT OF APPEALS,


MAGDALO V. FRANCISCO, SR., and VICTORIANO N. FRANCISCO,
G.R. NO. L-29155, M ay 13, 1970
Petitioner contends that the Court of Appeals erred in ordering the
corporation to return to the respondents the trademark and formula for
Mafran sauce. Rescission creates the obligation to return the things
which were the object of the contract.
C O N T R A C T S
SM LAND, INC. VS . BASES CONVERSION AND DEVELOPMENT AUTHORITY
AND ARNEL PACIANO D. CASANOVA, ESQ., IN HIS OFFICIAL CAPACITY AS
PRESIDENT AND CEO OF BCDA, G.R. No. 203655, August 13, 2014, J. Velasco
Jr.
BCDA and SMLI have agreed to subject SMLIs Original Proposal to Competitive
Challenge. This agreement is the law between the contracting parties with which
they are required to comply in good faith. Verily, it is BCDAs subsequent unilateral
cancellation of this perfected contract which this Court deemed to have been tainted
with grave abuse of discretion. BCDA could not validly renege on its obligation to
subject the unsolicited proposal to a competitive challenge in view of this perfected
contract, and especially so after BCDA gave its assurance that it would respect the
rights that accrued in SMLIs favor arising from the same.
GIDWANI VS. PEOPLE, G.R. No. 195064, January 15, 2014, J. Sereno
Considering that there was a lawful Order from the SEC, the contract is deemed
suspended. When a contract is suspended, it temporarily ceases to be operative; and
it again becomes operative when a condition occurs or a situation arises
warranting the termination of the suspension of the contract.
AVELINA ABARIENTOS REBUSQUILLO [substituted by her heirs, except
Emelinda R. Gualvez] and SALVADOR A. OROSCO v SPS. DOMINGO and
EMELINDA REBUSQUILLO GUALVEZ and the CITY ASSESSOR OF LEGAZPI CITY,
G.R No. 204029, June 4, 2014. J. VELASCO, JR.

In absolute simulation, there is a colorable contract but it has no substance as the


parties have no intention to be bound by it. The main characteristic of an absolute
simulation is that the apparent contract is not really desired or intended to produce
legal effect or in any way alter the juridical situation of the parties. As a result, an

148

absolutely simulated or fictitious contract is void, and the parties may recover from
each other what they may have given under the contract.
In the present case, the true intention of the parties in the execution of the Deed of
Absolute Sale is immediately apparent from respondents very own Answer wherein
they admitted that the purpose of the Deed of Absolute Sale was simply to facilitate
the titling of the subject property. considering that the Deed of Absolute Sale has
been shown to be void for being absolutely simulated, petitioners are not precluded
from presenting evidence to modify, explain or add to the terms of the written
agreement as an exception to the parol evidence rule.
I. A. DEFINITION
SPOUSES BALILA vs. IAC, G.R. NO. L-68477 October 29, 1987
A contract is a meeting of minds between two persons whereby one binds
himself with respect to the other to give something or render some
service, the Central Bank of the Philippines in the exercise of its
Administrative power did not create any contractual obligations.
B. CONTRACTS AS A SOURCE OF OBLIGATIONS
BATCHELDER vs. THE CENTRAL BANK OF THE PHILIPPINES, G.R.
NO. L-25071, July 29, 1972
Obligations arise from 1) law; 2) contracts; 3) quasi-contracts; 4) acts or
omissions punished by law and 5) quasi -delicts, the circular issued by
the Central Bank has the force and effect of the law. Obligations arising
from law, howe ver, is never presumed.
II. ESSENTIAL ELEMENTS OF A CONTRACT
SPOUSES TONGSON
vs. EMERGENCY PAWNSHOP BULA, G.R.
167874.
January 15, 2010
A valid contract requires the concurrence of the following essential
elements: (1) consent or meeting of the minds, that is, consent to transfer
ownership in exchange for the price; (2) determinate subject matter; and
(3) price certain in money or its equivalent.
In the present case, there is no question that the subject matter of the
sale is the 364-square meter Davao lot owned by the Spouses Tongson
and the selling price agreed upon by the parties is P3,000,000, but the
149

existence of the remaining element, which is consent of the contracting


parties, to sell the property, claiming that their consent was vitiated by
fraud, renders the contract of sale void.
A. CONSENT
SPOUSES VICTOR AND EDNA BINUA vs. LUCIA P. ONG, G.R. No. 207176, June 18,
2014, J. Reyes
Article 1390(2) of the Civil Code provides that contracts where the consent is
vitiated by mistake, violence, intimidation, undue influence or fraud are voidable or
annullable.
Intimidation may vitiate consent and render the contract invalid, the following
requisites must concur: (1) that the intimidation must be the determining cause of
the contract, or must have caused the consent to be given; (2) that the threatened
act be unjust or unlawful; (3) that the threat be real and serious, there being an
evident disproportion between the evil and the resistance which all men can offer,
leading to the choice of the contract as the lesser evil; and (4) that it produces a
reasonable and well-grounded fear from the fact that the person from whom it
comes has the necessary means or ability to inflict the threatened injury.
Based on the petitioners own allegations, what the respondent did was merely
inform them of petitioner Ednas conviction in the criminal cases for estafa. It might
have evoked a sense of fear or dread on the petitioners part, but certainly there is
nothing unjust, unlawful or evil in the respondent's act. The petitioners also failed to
show how such information was used by the respondent in coercing them into
signing the mortgages.
SC affirmed the finding of the CA that if the judgment of conviction is the only basis
of the [petitioners] in saying that their consents were vitiated, such will not suffice
to nullify the real estate mortgages and the subsequent foreclosure of the mortgaged
properties. No proof was adduced to show that [the respondent] used [force],
duress, or threat to make [petitioner] Victor execute the real estate mortgages.
Also, the threat to prosecute for estafa not being an unjust act, but rather a valid and
legal act to enforce a claim, cannot at all be considered as intimidation.

ECE REALTY AND DEVELOPMENT INC. vs.RACHEL G. MANDAP, G.R. No. 196182,
September 1, 2014, J. Peralta
Article 1338 of the Civil Code provides that "[t]here is fraud when through insidious
words or machinationsof one of the contracting parties, the other is induced to enter
into a contract which, without them, he would not have agreed to."
150

In addition, under Article 1390 of the same Code, a contract is voidable or


annullable "where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud."
Also, Article 1344 of the same Codeprovides that "[i]n order that fraud may make a
contract voidable, it should be serious and should not have been employed by both
contracting parties."
In order to constitute fraud that provides basis to annul contracts, it must fulfill two
conditions.
First, the fraud must be dolo causante or it must be fraud in obtaining the consent of
the party. This is referred to as causal fraud. The deceit must be serious. The fraud is
serious when it is sufficient to impress, or to lead an ordinarily prudent person into
error; that which cannot deceive a prudent person cannot be a ground for nullity.
The circumstances of each case should be considered, taking into account the
personal conditions of the victim.
Second, the fraud must be proven by clear and convincing evidence and not merely
by a preponderance thereof.
While the SC found that petitioner is guilty of false representation of a fact, it held
that the misrepresentation made by petitioner in its advertisements does not
constitute causal fraud which would have been a valid basis in annulling the
Contract to Sell between petitioner and respondent.
Thus, absent, as here, of (sic) any controverting evidence, it is reasonable to
presume that Mandap knew the contents of the Contract to Sell which was executed
with legal formalities
The rule that one who signs a contract is presumed to know its contentshas been
applied even to contract of illiterate persons on the ground that if such persons are
unable to read, they are negligent if they fail to have the contract read to them. If a
person cannot read the instrument, it is as much his duty to procure some reliable
persons to read and explain it tohim, before he signs it, as it would be to read it
before he signed it if he were able to do so and his failure to obtain a reading and
explanation of it is such gross negligence as will estop him from avoiding it on the
ground that he was ignorant of its contents.
In any case, even assuming that petitioners misrepresentation consists of fraud
which could bea ground for annulling their Contract to Sell, respondent's act of
affixing her signatureto the said Contract, after having acquired knowledge of the
property's actual location, can be construed as an implied ratification thereof.
SPOUSES FRANCISCO SIERRA (substituted by DONATO, TERESITA, TEODORA,
LORENZA, LUCINA, IMELDA, VILMA, and MILAGROS SIERRA) and ANTONINA
151

SANTOS, SPOUSES ROSARIO SIERRA and EUSEBIO CALUMA LEYVA, and


SPOUSES SALOME SIERRA and FELIX GATLABAYAN (substituted by BUENA
VENTURA, ELPIDIO, PAULINO, CATALINA, GREGORIO, and EDGARDO
GATLABAYAN, LORETO REILLO, FERMINA PEREGRINA, and NIDA HASHIMOTO)
vs.PAIC SAVINGS AND MORTGAGE BANK, INC., G.R. No. 197857, September 10,
2014, J. Perlas-Bernabe
One who alleges any defect or the lack of a valid consent contract must establish the
same by full, clear, and convincing evidence, not merely by preponderance of
evidence. The rule is that he who alleges mistake affecting a transaction must
substantiate his allegation, since it is presumed that a person takes ordinary care of
his concerns and that private transactions have been fair and regular. Where
mistake or error is alleged by parties who claim to have not had the benefit of a
good education, as in this case, they must establish that their personal
circumstances prevented them from giving their free, voluntary, and spontaneous
consent to a contract.
AVELINA ABARIENTOS REBUSQUILLO [substituted by her heirs, except
Emelinda R. Gualvez] and SALVADOR A. OROSCO, vs. SPS. DOMINGO and
EMELINDA REBUSQUILLO GUALVEZ and the CITY ASSESSOR OF LEGAZPI CITY,
G.R. No. 204029, June 4, 2014, J. Velasco, Jr.
The Deed of Absolute Sale executed by Avelina in favor of respondents was correctly
nullified and voided by the RTC. Avelina was not in the right position to sell and
transfer the absolute ownership of the subject property to respondents. As she was
not the sole heir of Eulalio and her Affidavit of Self-Adjudication is void, the subject
property is still subject to partition. Avelina, in fine, did not have the absolute
ownership of the subject property but only an aliquot portion. It is apparent from
the admissions of respondents and the records of this case that Avelina had no
intention to transfer the ownership, of whatever extent, over the property to
respondents. Hence, the Deed of Absolute Sale is nothing more than a simulated
contract.
SPOUSES VICTOR and EUNA BINUA v LUCIA P. ONG, G.R. No. 207176,
June 18, 2014. J. REYES
Edna Binua was convicted by the RTC of Estafa. For fear of conviction, Edna
executed several real estate mortgages over her husbands properties to be able to
pay her creditor, Lucia Ong. Subsequently, the whole scenario was novated into
purely civil in nature. When Edna failed to settle her obligation, Ong foreclosed on
the mortgages. Edna now claims that the real estate mortgages were voidable under
Articles 1335 and1390 of the Civil Code as they were executed under duress and
intimidation in the form of the estafa conviction.

152

Article 1390(2) of the Civil Code provides that contracts where the consent is
vitiated by mistake, violence, intimidation, undue influence or fraud are voidable or
annullable. Article 1335 of the Civil Code, meanwhile, states that "there is
intimidation when one of the contracting parties is compelled by a reasonable and
well-grounded fear of an imminent and grave evil upon his person or property, or
upon the person or property of his spouse, descendants or ascendants, to give his
consent." The same article, however, further states that a "threat to enforce ones
claim through competent authority, if the claim is just or legal, does not vitiate
consent."
In this case, Ong merely informed the spouses of Ednas conviction in the criminal
cases for estafa. It might have evoked a sense of fear or dread on Ednas part, but
certainly there is nothing unjust, unlawful or evil in Ongs act. The judgment of
conviction was a result of a valid judicial process and will not suffice to nullify the
real estate mortgages and the subsequent foreclosure of the mortgaged properties.
No proof was adduced to show that Ong used [force], duress, or threat to make Edna
execute the real estate mortgages.
MARIANO C. MENDOZA and ELVIRA LIM v SPOUSES LEONORA J. GOMEZ and
GABRIEL V. GOMEZ, G.R No. 160110, June 18, 2014. J. PEREZ
Article 2211 of the Civil Code provides that in crimes and quasi-delicts, interest as
part of the damage, may, in a proper case, be adjudicated in the discretion of the
court. Generally, interest is allowed as a matter of right for failure to pay liquidated
claims when due. For unliquidated claims, however, Article 2213 of the Civil Code
provides that interest cannot be recovered upon unliquidated claims or damages,
except when the demand can be established with reasonable certainty. In this case,
the Court allowed the award of interest on the actual and compensatory damages
based on justice, and because these damages could be measured against a
reasonably certain standard.
SPOUSES EDUARDO and LYDIA SILOS v PHILIPPINE NATIONAL BANK, G.R No.
181045, July 2, 2014. J. DEL CASTILLO
From 1987 to 1998, the spouses Silos executed promissory notes in favor of PNB, as
well as real estate mortgages to secure the loan. The loan contracts contained an
escalation clause: The Borrower agrees that the Bank may modify the interest rate
in the Loan depending on whatever policy the Bank may adopt in the future,
including without limitation, the shifting from the floating interest rate system to
the fixed interest rate system, or vice versa and the Borrower hereby agrees that
the Bank may, without need of notice to the Borrower, increase or decrease its
spread over the floating interest rate at any time depending on whatever policy it
may adopt in the future.

153

The Court held that the escalation clause in the loan contract was null and void for
being violative of mutuality of contracts. Any modification in the contract, such as
the interest rates, must be made with the consent of the contracting parties. The
minds of all the parties must meet as to the proposed modification, especially when
it affects an important aspect of the agreement. In the case of loan agreements, the
rate of interest is a principal condition, if not the most important component. Thus,
any modification thereof must be mutually agreed upon; otherwise, it has no
binding effect.
LAND BANK vs. HEIRS OF SPOUSES SORIANO, G.R. NO. 178312.
January 30, 2012
Pending resolution of the case, both parties freely and voluntarily entered
into an agreement for the purpose of finally settling their dispute in this
case. As a contract, a compromise is perfected by mutual consent,
however, a judicial compromise, while immediately binding between the
parties upon its execution, is not executory until it is approved by the
court and reduced to a judgment.
LAGUNZAD vs. VDA. DE GONZALES, G.R. NO. L -32066 August 6,
1979
Petitioner takes the position that he was pressured into signing the
Agreement because of private respondent's demand, for payment for the
"exploitation" of the life story of Moises Padilla, otherwise, she would "call
a press conference declaring the whole picture as a fake, fraud and a
hoax and would denounce the whole thing in the press, radio, television
and that they were going to Court to stop the picture." It is necessary to
distinguish between real duress and the motive which is present when
one gives his consent reluctantly because a contract is valid e ven though
one of the parties entered into it against his own wish and desires, or
even against his better judgment.
VELASCO vs. HONORABLE COURT OF APPEALS, G.R. NO. L-31018
June 29, 1973
The material averments of petitioners' complaint disclose lack of
complete "agreement in regard to the manner of payment" of the lot in
question. A definite agreement on the manner of payment of the
purchase price is an essential element in the formation of a binding and
enforceable contract of sale.

154

PALATTAO vs. CA, G.R. NO. 131726, M ay 7, 2002


Appellant made a qualified acceptance of appellees letter-offer of a parcel
of land but appellee made a new proposal to pay the amount in staggered
amounts within two years in quarterly amortizations. To convert the
offer into a contract, the acceptance must be absolute and must not
qualify the terms of the offer, for a qualified acceptance constitutes a
counter-offer and is a rejection of the original offer and such acceptance
is not sufficient to generate consent.
B. CAUSE OF CONTRACTS
ART 1354
LAW vs. OLYMPIC SAWMILL CO., G.R. NO. L-30771, M ay 28, 1984
The defendants admitted the principal obligation but claimed that the
additional amount constituted usurious interest. Under Article 1354 of
the Civil Code, the agreement of the parties relative to the additional
amount is presumed to exist and is lawful, unless the debtor proves the
contrary. Since no evidentiary hearing had been held, the defendants
therefore had not proven that the obligation was illegal.
C. CONSIDERATION
ART. 1354
PENTACAPITAL INVESTMENT CORPORATION vs. M AHINAY, G.R.
NO. 171736, July 5, 2010
As proof of lack of consideration, respondent (a) denied under oath that
he owed petitioner a single centavo, (b) represented that he did not apply
for a loan and (c) said that when he signed the promissory notes, they
were all blank forms thus rendering the notes ineffective.
It is presumed that consideration exists and is lawful unless the debtor
proves the contrary and the presumption that a contract has sufficient
consideration cannot be overthrown by the bare, uncorroborated and
self-serving assertion of respondent that it has no consideration.
HEIRS OF URETA, SR. vs. HEIRS OF LIBERATO URETA, G.R. NO.
165748.
September 14, 2011

155

Although the contract states that the purchase price of 2,000.00 was
paid by Policronio to Alfonso for the subject properties, it has been
proven that no such payment was made. It is well-settled that where a
deed of sale states that the purchase price has been paid but in fact has
never been paid, the deed of sale is null and void for lack of
consideration.
III. FORM ALITIES
ART 1724
DUE OBSERVANCE OF PRESCRIBED FORMALITIES
WELDON CONSTRUCTION CORPORATION vs. COURT OF APPEALS,
G.R. NO. L-35721 October 12, 1987
There was no written agreement on the additional price to be paid for
said "extra works," hence, private respondent claims that the contractor
aG.R.eed to make the additions without additional cost.
In the absence of a written authority by the owner for the changes in the
plans and specifications of the building and of a written agreement
between the parties on the additional price to be paid to the contractor,
as required by Article 1724, the claim for the cost of additional works
must be denied.
LAO SOK vs. SABAYSABAY, G.R. NO. L-61898 August 9, 1985
Petitioner Lao Sok promised to give his employees their separation pay,
as soon as he receives the insurance proceeds for his burned building,
but contends that the contract was orally made hence unenforceable
since it does not comply with the Statute of Frauds. Contracts in
whatever form they may have been entered into are binding on the
parties unless form is essential for the validity and enforceability of that
particular contract.
ART 1356
GALLARDO vs.HONORABLE INTERMEDIATE APPELLATE COURT,
G.R. NO. L-67742 October 29, 1987

156

The issue here is whether or not the unnotarized deed of sale can be
considered as a valid instrument for effecting the alienation by way of
sale of a parcel of land registerd under the Torrens System.
The general rule enunciated in said Art. 1356 is that contracts are
obligatory, in whatever form they may have been entered, provided all the
essential requisites for their validity are present, except when the law so
requires requiring a contract to be in some form for validity or
enforceability.
IV. STAGES , PERFECTION
Bugatti v. Court of Appeals, G.R. No. 138113. October 17, 2000
A contract undergoes three distinct stages preparation or negotiation,
its perfection, and finally, its consummation. Negotiation begins from
the time the prospective contracting parties manifest their interest in the
contract and ends at the moment of agreement of the parties. The
perfection or birth of the contract takes place when the parties agree
upon the essential elements of the contract. The last stage is the
consummation of the contract wherein the parties fulfill or perform the
terms agreed upon in the contract, culminating in the extinguishment
thereof.
ART 1315 , 1319
TONG BROTHERS CO., vs. IAC, G.R. NO. 73918 December 21, 1987
From the exchange of telegrams between the two parties, there was not
yet a meeting of the minds as to the cause of the contract. The cause of a
contract has been defined "as the essential reason which moves the
contracting parties to enter into it (8 Manresa, 5th Edition, p. 450). In
other words, the cause is the immediate, direct and proximate reason
which justifies the creation of an obligation thru the will of the
contracting parties (3 Castan, 4th Edition, p. 347)." (General Enterprises,
Inc. v. Lianga Bay Logging Co., Inc., 11 SCRA 733, 739). For the private
respondent, the cause of the contract was the repair of its vessel
Zamboanga-J while for the petitioner the cause would be its commitment
to repair the vessel and make it seaworthy. The telegrams dated January
17, January 20, and January 28, 1975 sent by the petitioner to the
private respondent, however, indicate that the former had not accepted
the repair of Zamboanga-J, the reason being that the extent of the repair
to be made necessitated a major expense so that the petitioner insisted
on the presence of the private respondent for evaluation before it
accepted the repair of the wooden vessel. That the petitioner had not yet
consented to the contract is e vident when on January 28, 1975, it sent a
157

telegram stating: "... NO AGREEMENT AS TO THE EX TENT OF REPAIRS


AND PAYMENT WILL UNDOCK VESSEL." The fact that the private
respondent who received this telegram ignored it, confirms that there
was no perfected contract to repair Zamboanga-J.
SANCHEZ vs. RIGOS, G.R. NO. L-25494 June 14, 1972
Since there may be no valid contract without a cause or consideration,
the promisor is not bound by his promise and may, accordingly,
withdraw it, and pending notice of its withdrawal, his accepted promise
partakes, however, of the nature of an offer to sell which, if accepted,
results in a perfected contract of sale.
V. INTERPRETATION OF CONTRACTS
CITIZENS SURETY and INSURANCE COMPANY, INC., vs.
COURT OF APPEALS, G.R. NO. L-48958 June 28, 1988
It is a basic and fundamental rule in the interpretation of contract that if
the terms thereof are clear and leave no doubt as to the intention of the
contracting parties, then the literal meaning of the stipulations shall
control but when the words appear contrary to the evident intention of
the parties, the latter shall prevail over the former and in order to judge
the intention of the parties, their contemporaneous and subsequent acts
shall be principally considered.
ART 1375 , 1377
LIM YHI LUYA vs. COURT OF APPEALS, G.R. NO. L -40258 September
11, 1980
Words which may have different significations shall be understood in
that which is most in keeping with the nature and object of the contract
and in the interpretation of obscure words or stipulations in a contract
shall not favor the party who caused the obscurity.
VI. DEFECTIVE CONTRACTS
A. VOID CONTRACTS
ART 1411, 1420
BRIONES vs. CAMMAYO, ET AL., G.R. NO. L-23559, October 4, 1971
Stipulations authorizing the imposition of iniquitous or unconscionable
interest are contrary to morals, if not against the law for these contracts
are inexistent and void from the beginning.
158

ASIAN CATHAY FINANCE AND LEASING CORPORATION vs.


SPOUSES G.R.AVADOR et al, G.R. NO. 186550, July 5, 2010
A contract of adhesion may be struck down as void and unenforceable
for being subversive to public policy, when the weaker party is completely
deprived of the opportunity to bargain on equal footing.
TIU vs. PLATINUM PLANS PHIL., INC., G.R. NO. 163512 February 28,
2007
Respondent contends that the inclusion of the two-year non-involvement
clause in petitioners contract of employment was reasonable and needed
since her job gave her access to the companys confidential marketing
strategies. A non-involvement clause is not necessarily void for being in
restraint of trade as long as there are reasonable limitations as to time,
trade, and place.
CARIO vs. COURT OF APPEALS, G.R. NO. L -47661, July 31, 1987
Contracts of sale are void and produce no effect whatsoever where the
price, which appears therein as paid, has in fact never been paid by the
vendee to the vendor.
TOPIC: SIM ULATED CONTRACTS
URETA vs. URETA, G.R. No. 165748, September 14, 2011 -Lacking in
an absolutely simulated contract is consent which is essential to a valid
and enforceable contract. Thus, where a person, in order to place his
property beyond the reach of his creditors, simulates a transfer of it to
another, he does not really intend to divest himself of his title and control
of the property; hence, the deed of transfer is but a sham. Similarly, in
this case, Alfonso simulated a transfer to Policronio purely for taxation
purposes, without intending to transfer ownership over the subject
lands.
RUBIAS vs. BATILLER, G.R. NO. L-35702 M ay 29, 1973
The lower court held that the purchase by a lawyer of the property in
litigation from his client is categorically prohibited by Article 1491,
paragraph (5) of the Philippine Civil Code, and that consequently,
plaintiff's purchase of the property in litigation from his client was void
and could produce no legal effect, by virtue of Article 1409, paragraph (7)
of our Civil Code. Contracts "expressly prohibited or declared void by
159

law' are "inexistent and that "(T)hese contracts cannot be ratified, neither
can the right to set up the defense of illegality be waived."
ART 1410
TONGOY vs. THE HONORABLE COURT OF APPEALS, G.R. NO. L 45645 June 28, 1983
The issue in this case is whether or not the rights of herein respondents
over subject properties, which were the subjects of simulated or fictitious
transactions, have already prescribed. A void or inexistent contract is one
which has no force and effect from the very beginning, as if it had never
been entered into, and which cannot be validated either by time or by
ratification.
LITA ENTERPRISES, INC.,vs. IAC, G.R. NO. L -64693 April 27, 1984
Unquestionably, the parties herein operated under an arrangement,
commonly known as the "kabit system", whereby a person who has been
granted a certificate of convenience allows another person who owns
motors vehicles to operate under such franchise for a fee, and the
petitioner prays that private respondents be declared liable to petitioner
for whatever amount the latter has paid. It is a fundamental principle of
in pari delicto that the court will not aid either party to enforce an illegal
contract, but will leave them both where it finds them.
ARSENAL vs. IAC, G.R. NO. L-66696 July 14, 1986
Petitioner questions the validity of the sale between the respondent and
Suralta but the lower court held that the benefit of said prohibition in the
Public Land Act against the disposal of any land granted to a citizen
under that law does not inure to any third party. The right to set up the
nullity of a void or non-existent contract is not limited to the parties as in
the case of annulable or voidable contracts. The right to set up the
nullity of a void or non-existent contract is extended to third persons
who are directly affected by the contract.
MANOTOK REALTY, INC., vs. THE HON. COURT OF APPEALS, G.R.
NO. L-45038 April 30, 1987
Don Legarda sold the paraphernal property of Dona Clara to the
respondent. It was sold three months after he was appointed as
administrator of the estate of Dona Clara Tambunting. The sale between
Don Vicente Legarda and the private respondent is void ab initio, the
former being neither an owner nor administrator of the subject property,
160

and the sale cannot be the subject of the ratification by the probate
court.
PORTUGAL vs. IAC, G.R. NO. 73564 March 25, 1988
Respondent, through fraudulent means was able to transfer the lot from
his parents to himself without consideration or cause through a
purported deed of The IAC held that the action had already prescribed
because an action to annul a contract based on fraud prescribes in four
years. The SC, however, held that the alleged contract of sale is vitiated
by the total absence of a valid cause or consideration which is an
indispensable requisite for the existence of a valid contract. Thus, Article
1410 of the Civil Code provides that '(T)he action or defense for the
declaration of the inexistence of a contract does not prescribe.
PHILIPPINE BANKING CORPORATION vs. LUI SHE, G.R. NO. L 17587, September 12, 1967
The illicit purpose becomes the illegal causa rendering the contracts void.
TEJA M ARKETING vs. IAC, G.R. NO. L-65510 M arch 9, 1987
The parties operated under an arrangement, commonly known as the
"kabit system" whereby a person who has been granted a certificate of
public convenience allows another person who owns motor vehicles to
operate under such franchise for a fee.
Although not outrightly
penalized as a criminal offense, the kabit system is invariably recognized
as being contrary to public policy and, therefore, void and in existent and
it is a fundamental principle that the court will not aid either party to
enforce an illegal contract, but will leave both where it finds then.
B. VOIDABLE CONTRACTS
ART 1327
FRANCISCO vs. HERRERA, G.R. NO. 139982, November 21, 2002
The vendor Eligio, Sr. entered into an agreement with petitioner, but that
the formers capacity to consent was vitiated by senile dementia. Insane
or demented persons cannot give consent to a contract, but if an insane
or demented person does enter into a contract, the legal effect is that the
contract is voidable or annullable.
161

CORONEL vs. CONSTANTINO, G.R. NO. 121069, February 7, 2003


Applying Articles 1317 and 1403 of the Civil Code, the Court of Appeals
ruled that through their inaction and silence, the three sons of Emilia are
considered to have ratified the aforesaid sale of the subject property by
their mother. Ratification means that one under no disability voluntarily
adopts and gives sanction to some unauthorized act or defective
proceeding, which without his sanction would not be binding on him ,
hence, an alleged silence and inaction may not be interpreted as an act
of ratification on their part.
C. UNENFORCEABLE CONTRACTS
IGLESIA FILIPINA INDEPENDIENTE vs. HEIRS of BERNARDINO TAEZA, G.R. No.
179597, February 3, 2014, J. Peralta
Unenforceable contracts are those which cannot be enforced by a proper action in
court, unless they are ratified, because either they are entered into without or in
excess of authority or they do not comply with the statute of frauds or both of the
contracting parties do not possess the required legal capacity. In the present case,
however, respondents' predecessor-in-interest, Bernardino Taeza, had already
obtained a transfer certificate of title in his name over the property in question.
Since the person supposedly transferring ownership was not authorized to do so,
the property had evidently been acquired by mistake. This case clearly falls under
the category of unenforceable contracts mentioned in Article 1403, paragraph (1) of
the Civil Code, which provides, thus: (1) Those entered into in the name of another
person by one who has been given no authority or legal representation, or who has
acted beyond his powers.
YUVIENCO vs. DACUYCUY, G.R. NO. L-55048 M ay 27, 1981
Respondent judge assumed that as long as the requirements of
perfection of a contract are present in a contract which involves payment
in installments, the Statute of Frauds would no longer apply as long as
the total price or consideration is mentioned in some note or
memorandum and there is no need of any indication of the manner in
which such total price is to be paid. In any sale of real property on
installments, the Statute of Frauds read together with the perfection
requirements of Article 1475 of the Civil Code must be understood and
applied in the sense that the idea of payment on installments must be in
the requisite of a note or memorandum therein contemplated.

162

BISAYA LAND TRANSPORTATION CO., INC., vs. SANCHEZ, G.R. NO.


74623 August 31, 1987
In the case at bar, it is undisputed that Atty. Adolfo Amor was entrusted,
as receiver, with the administration of BISTRANCO and it business, but
the act of entering into a contract is one which requires the authorization
of the court which appointed him receiver. The questioned contracts can
rightfully be classified as unenforceable for having been entered into by
one who had acted beyond his powers, due to Receiver Amor's failure to
secure the court's approval of said Contracts.
STATUTE OF FRAUDS
AINZA vs. SPOUSES PADUA, G.R. NO. 165420, June 30, 2005
The contract of sale between Eugenia and Concepcion was evidenced by
a receipt signed by Eugenia. The verbal contract of sale between did not
violate the provisions of the Statute of Frauds because when a verbal
contract has been completed, executed or partially consummated, its
enforceability will not be barred by the Statute of Frauds, which applies
only to an executory agreement, thus, where one party has performed his
obligation, oral evidence will be admitted to prove the agreement.
ORDUA vs. FUENTEBELLA, G.R. NO. 176841, June 29, 2010
Gabriel Sr., during his lifetime, sold the subject property to Antonita, the
purchase price payable on installment basis, thus, Gabriel Sr. appeared
to have been a recipient of some partial payments but after his death, his
son questions the verbal sale contract between Gabriel Sr. and Antonita,
and alleged that the contract is unenforceable for non-compliance with
the Statute of Frauds. The Statute of Frauds, in context, provides that a
contract for the sale of real property or of an interest therein shall be
unenforceable unless the sale or some note or memorandum thereof is in
writing and subscribed by the party or his agent. Where the verbal
contract of sale, howe ver, has been partially executed through the partial
payments made by one party duly received by the vendor, as in the
present case, the contract is taken out of the scope of the Statute.
HERNANDEZ vs. COURT OF APPEALS, G.R. NO. L -41132 April 27,
1988

163

Both courts were of the view essentially that the evidence did not bear
out the claim of fraud; that under the Statute of Frauds, the parties'
covenant as to their properties' metes and bounds was unenforceable
since it was not reduced to writing. Not every agreement "affecting land"
must be put in writing to attain enforceability, under the Statute of
Frauds, Article 1403(2) (e) of the Civil Code, such formality is only
required of contracts involving leases for longer than one year, or for the
sale of real property or of an interest therein.
D. RESCISSIBLE CONTRACTS
CABALIW vs. SADORRA, G.R. NO. L-25650 June 11, 1975
The conveyances made by Sadorra in favor of his son-in-law were
fraudulent since about seven months after a judgment was rendered
against him in and without paying any part of that judgment, Sadorra
sold the only two parcels of land belonging to the conjugal partnership to
his son-in-law. Contracts by virtue of which the debtor alienates
property by gratuitous title or alienations by onerous title when made by
persons against whom some judgment has been rendered in any
instance or some writ of attachment has been issued, are presumed to be
made in fraud of creditors, and the decision or attachment need not refer
to the property alienated and need not have been obtained by the party
seeking rescission.
AIR FRANCE vs. HONORABLE COURT OF APPEALS, G.R. NO. 10 4234
June 30, 1995
Petitioner moved for the issuance of an alias writ of execution on the
ground of unsatisfied judgment against respondents and It likewise
moved to declare the sale to a third party of a parcel of land in the name
of the private respondent as one in fraud of creditors which was granted
by the lower court. Rescissible contracts, not being void, they remain
legally effective until set aside in a rescissory action and may convey title,
and an action for rescission may not be raised or set up in a summary
proceeding through a motion, but in an independent civil action and only
after a full-blown trial.
VII. EFFECT OF CONTRACTS
DOCTRINES , PRINCIPLES
1. CONSENSUALITY OF CONTRACTS
ART 1306 , 1336 , 1337
164

REPUBLIC OF THE PHILIPPINES vs. PLDT G.R. NO. L-18841


January 27, 1969
,
The Republic commenced suit against the PLDT commanding the PLDT
to execute a contract with it for the use of the facilities of latter's
telephone system throughout the Philippines. Parties can not be coerce d
to enter into a contract where no agreement is had between them as to
the principal terms and conditions of the contract since freedom to
stipulate such terms and conditions is of the essence of our contractual
system, and by express provision of the statute, a contract may be
annulled if tainted by violence, intimidation, or undue influence (Articles
1306, 1336, 1337).
2. AUTONOM Y OF CONTRACTS
ART 1306
WILLIAM GOLANGCO CONSTRUCTION CORPORATION vs.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, G.R. NO. 142830
March 24, 2006
The provision in the construction contract providing for defects liability
period was not shown as contrary to law, morals, good customs, pubic
order or public policy, and by the nature of the obligation in such
contract, the provision limiting liability for defects and fixing specific
guaranty periods was not only fair and equitable but was also necessary.
TIU vs. PLATINUM PLANS PHIL., INC., G.R. NO. 163512 February 28,
2007
Respondent contends that the inclusion of the two-year non-involvement
clause in petitioners contract of employment was reasonable and needed
since her job gave her access to the companys confidential marketing
strategies. A non-involvement clause is not necessarily void for being in
restraint of trade as long as there are reasonable limitations as to time,
trade, and place.
LEAL vs.IAC, G.R. NO. L-65425 November 5, 1987
It is admitted by both parties that the phrase "they shall not sell to
others these three lots but only to the seller Vicente Santiago or to his
heirs or successors" is an express prohibition against the sale of the lots
described in the "Compraventa" to third persons or strangers to the
165

contract. Parties may establish such stipulations, clauses, terms and


conditions as they may deem convenient, provided they are not contrary
to law, morals, good customs, public order, or public policy.
DEL CASTILLO Vda. DE M ISTICA vs. SPOUSES NAGUIAT, G.R. NO.
137909. December 11, 2003
In the Kasulatan, it was stipulated that payment could be made even
after ten years from the execution of the Contract, provided the vendee
paid percent interest. The stipulations of the contract constitute the law
between the parties; thus, courts have no alternative but to enforce them
as aG.R.eed upon and written.
MARIMPERIO vs. COURT OF APPEALS, G.R. NO. L -40234 December
14, 1987
A contract is the law between the contracting parties, and when there is
nothing in it which is contrary to law, morals, good customs, public
policy or public order, the validity of the contract must be sustained.
ART 1159
OCCENA vs. HON. JABSON, G.R. NO. L-44349, October 29, 1976
Respondent's complaint seeks that the court "render judgment modifying
the terms and Conditions of the Contract by fixing the proper shares that
should pertain to the herein parties out of the gross proceeds from the
sales of subdivided lots of subject subdivision", citing ART 1267 of the
New Civil Code. The cited article does not grant the courts this authority
to remake, modify or revise the contract between the parties as
contractually stipulated with the force of law between the parties, so as
to substitute its own terms for those covenanted by the parties
themselves.
CABAHUG vs NAPOCOR, G.R. NO. 186069, January 30, 2013
Disregarding the stipulations in the contract allowing additional
compensation for easement fee, the CA ruled that Cabahug's attempt to
collect further sums by way of additional easement fee and,or just
compensation is violative of said contract. It is settled that a contract
constitutes the law between the parties who are bound by its stipulations
which, when couched in clear and plain language, should be applied
according to their literal tenor and the courts cannot supply material
stipulations, which contradict the intent of the parties.
166

3. M UTUALITY OF CONTRACTS
BANCO FILIPINO SAVINGS vs. NAVARRO, G.R. NO. L -46591, July 28,
1987
Escalation clauses to be valid should specifically provide: (1) that there
can be an increase in interest if increased by law or by the Monetary
Board; and (2) in order for such stipulation to be valid, it must include a
provision for reduction of the stipulated interest "in the event that the
applicable maximum rate of interest is reduced by law or by the
Monetary Board" in order to be valid which is known as deescalation
clause.
SPOUSES FLORENDO vs. COURT OF APPEALS, G.R. NO. 101771
December 17, 1996
In order that obligations arising from contracts may have the force of law
between the parties, there must be mutuality between the parties based
on their essential equality, hence, a contract containing a condition
which makes its fulfillment dependent exclusively upon the uncontrolled
will of one of the contracting parties, is void.
ART 1308
PHILIPPINE NATIONAL BANK vs. SPOUSES AGUSTIN, G.R. NO.
164549
September 18, 2009
The spouses Rocamora posit that their loan would not have bloated to
more than double the original amount if PNB had not increased the
interest rates and had it immediately foreclosed the mortgages. Any
increase in the rate of interest made pursuant to an escalation clause
must not be left solely to the will of one of the parties, but must be the
result of a mutual agreement between the parties, hence, a de-escalation
clause that would authorize a reduction in the interest rates
corresponding to downward changes made by law or by the Monetary
Board must be included, otherwise, the change carries no binding effect.
4. RELATIVITY , PRIVITY OF CONTRACTS
DKC HOLDINGS CORPORATION vs. COURT OF APPEALS, G.R. NO.
118248
April 5, 2000
Being an heir there is privity of interest between the heir and the
deceased, hence, heirs are bound by contracts entered into by their
167

predecessors-in-interest except when the rights and obligations arising


therefrom are not transmissible by (1) their nature, (2) stipulation or (3)
provision of law.
METROPOLITAN BANK vs. REYNADO, G.R. NO. 164538, August 9,
2010
Respondents are not parties to the agreement, nor assigns or heirs of
either of the parties but who rely on the debt settlement agreement
petitioner and Universal to preclude prosecution of the offense of estafa
or prevent the incipience of any liability that may arise from the criminal
offense. The civil law principle of relativity of contracts provides that
"contracts can only bind the parties who entered into it, and it cannot
favor or prejudice a third person, even if he is aware of such contract and
has acted with knowledge thereof."
PRUDENTIAL BANK AND TRUST COMPANY vs. ABASOLO, G.R. NO.
186738, September 27, 2010
Contracts take effect only between the parties, their assigns and heirs,
and if a contract should contain some stipulation in favor of a third
person, the contracting parties must have clearly and deliberately
conferred a favor upon the third person.
VIII. KINDS OF CONTRACTS
A. INNOM INATE CONTRACTS
ART 1307
CORPUS vs. COURT OF APPEALS, G.R. NO. L -40424 June 30, 1980
There was no express contract between the parties for the payment of
attorney's fees, but the respondent rendered legal services to petitioner.
The payment of attorney's fees to respondent may be justified by virtue of
the innominate contract of facio ut des (I do and you give which is based
on the principle that "no one shall unjustly enrich himself at the expense
of another" and under Article 1307 such contracts shall be regulated by
the stipulations of the parties, by the general provisions or principles of
obligations and contracts, by the rules governing the most analogous
nominate contracts, and by the customs of the people.
B. DIVISIBLE CONTRACTS
BRIONES vs. CAMMAYO, ET AL., G.R. NO. L-23559, October 4, 1971

168

According to the appellants, a usurious loan is void due to illegality of


cause or object, the rule of pari delicto applies, so that neither party can
bring action against each other. A contract of loan with usurious
interest consists of two stipulations which are divisible in the sense that
the former can still stand without the latter, the principal and the
accessory stipulations; the principal one is to pay the debt; the accessory
stipulation is to pay interest thereon, and in case of a divisible contract,
if the illegal terms can be separated from the legal ones, the latter may be
enforced."
C. CONTRACT OF ADHESION
ART 1750
ONG YIU vs. HONORABLE COURT OF APPEALS, G.R. NO. L-40597
June 29, 1979
Petitioner contends that respondent Court committed grave error when it
limited PAL's carriage liability to the amount of P100.00 as stipulated at
the back of the ticket and argues that he had not actually entered into a
contract with PAL limiting the latter's liability for loss or delay of the
baggage of its passengers. While it may be true that petitioner had not
signed the plane ticket he is nevertheless bound by the provisions thereof
it being a contract of "adhesion", wherein one party imposes a ready
made form of contract on the other and the one who adheres to the
contract is in reality free to reject it entirely, but if he adheres, he gives
his consent.
ART 1326
C & C COMMERCIAL CORPORATION vs. M ENOR, G.R. NO. L-28360
January 27, 1983
Advertisements for bidders are simply invitations to make proposals, and
the advertiser is not bound to accept the highest or lowest bidder, unless
the contrary appears.
ART 1332
TANG vs. COURT OF APPEALS, G.R. NO. L -48563 M ay 25, 1979
It is the position of the petitioner that because Lee See Guat was illiterate
and spoke only Chinese, she could not be held guilty of concealment of
her health history because the applications for insurance were in English
and the insurer has not proved that the terms thereof had been fully
explained to her. The obligation to show that the terms of the contract
had been fully explained to the party who is unable to read or
169

understand the language of the contract, when fraud or mistake is


alleged, devolves on the party seeking to enforce it.
BUENAVENTURA ANGELES, ET AL. vs. URSULA TORRES CALASANZ,
ET AL., G.R. NO. L-42283
March 18, 1985
The plaintiffs-appellees, eager to acquire a lot upon which they could
build a home, affixed their signatures and assented to the terms and
conditions of the contract and they had no opportunity to question nor
change any of the terms of the agreement since it was offered to them on
a "take it or leave it" basis. Such contracts are called contracts of
adhesion, because the only participation of the party is the signing of his
signature or his "adhesion" thereto hence must be construed against the
party causing it.

IX.

STIPULATION POR AUTRUI

BONIFACIO BROS., INC., ET AL., vs. M ORA, ET AL., G.R. NO. L 20853
M ay 29, 1967
The appellants seek to recover the insurance proceeds, relying upon the
insurance contract executed by and between the State Bonding &
Insurance Company, Inc. and Mora. Contracts take effect only between
the parties thereto, except where the contract contains some
stipulations, known as stipulations por atrui, in favor of a third person,
who is allowed to avail himself of a benefit granted to him by the terms of
the contract, provided that the contracting parties have clearly and
deliberately conferred a favor upon such person, however such third
person not a party to the contract has no action zagainst the parties
thereto, and cannot generally demand the enforcement of the same, if he
did not communicate his acceptance thereto to the obligor before the
revocation.
FLORENTINO vs. ENCARNACION, SR., G.R. NO. L -27696 September
30, 1977
To constitute a valid stipulation pour autrui it must be the purpose and
intent of the stipulating parties to benefit the third. It is not sufficient
that the third person may be incidentally benefited by the stipulation.
G.R. NO. 120554 September 21, 1999
SO PING BUN vs. COURT OF APPEALS
170

Petitioner prevailed upon DCCSI to lease the warehouse to his enterprise


at the expense of respondent corporation. Although petitioner took
interest in the property of respondent corporation and benefited from it,
nothing on record imputes deliberate wrongful motives or malice on him.
Any third person who induces another to violate his contract shall be
liable for damages to the other contracting party, lack of malice, however,
precludes damages.

171