Up Civil | Will And Testament | Intestacy

UP WOMEN IN LAW

For there must be courage in wisdom, grace in strength.

PANIC BOOKLET and QUIZZER
Civil Law

UP WINLAW Executive Board (2007-2008)
President: Angel Manalaysay VP-Academics: May Caniba VP-Externals: Suz Ojeda VP-Finance: Jan Lee VP-Internals: Miles Malaya VP-Publicity: Cha Valdez 4th year Rep: Len Abellar 3rd Year Rep: Weng Salonga 2nd Year Rep: Arianne Reyes Bar Ops Head: Karra dela Paz Updated by: Nash Lopez

TABLE OF CONTENTS Effect and Application of Laws PERSONS & FAMILY RELATIONS Persons Absence Civil Register Use of Surnames Family Relations Marriage Void Marriage Voidable Marriage Legal Separation Property Relations Between Spouses Absolute Community Conjugal Partnership of Gains Separation of Property of the Spouses The Family Paternity and Filiation Illegitimate Children Legitimated Children Adoption Support Parental Authority OBLIGATIONS & CONTRACTS Obligations Kinds of Obligations Extinguishment of Obligations Contracts Essential Elements Defective Contracts Rescissible Contracts Voidable Contracts Unenforceable Contracts Void Contracts PROPERTY Classification of Property Ownership Ownership in General Right of Accession Quieting of Title Ruinous Buildings and Trees in Danger of Falling Co-Ownership
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Possession Usufruct Different Modes of Acquiring Ownership Occupation Prescription Prescription of Ownership and Other Real Rights Prescription of Actions Donation TORTS & DAMAGES Quasi-Delict Damages Actual or Compensatory Damages Moral Damages Nominal Damages Temperate or Moderate Damages Liquidated Damages Exemplary or Corrective Damages SALES Definition; Characteristics Essential Requisites Form of Sales Formation, Perfection and Consummation of Sales Double Sales Sale by Non-Owner or One Having Voidable Title Loss, Deterioration, Fruits and Other Benefits Remedies for Breach of Contract of Sale Remedies of the Seller Remedies of the Buyer Sale of Movables by Installment (Recto Law) Sale of Immovables (In General) Sale of Immovables (By Installment) Conditions and Warranties Extinguishment Assignment Bulk Sales Law Anti-Dummy Law CREDIT TRANSACTIONS General Provisions Commodatum Mutuum Deposit Guaranty Pledge
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130 131 131 133 135 139 139 140

For there must be courage in wisdom, grace in strength.
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Under Philippine law. the successional rights to the estate of ADIL are governed by Pakistani law. Credits UP WINLAW Panic Booklet 2006. they are governed by Philippine law (Article 18. he left behind six children.Real Mortgage Antichresis Chattel Mortgage Concurrence and Preference of Credits AGENCY Nature. and an estate worth at least 30 million pesos in the Philippines. a Pakistani citizen. When he died an old widower. In his lifetime. Form and Kinds of Agency Obligations of the Agent to the Principal Obligations of the Principal to the Agent Extinguishment of Agency PARTNERSHIP General Provisions Obligations of the Partners Obligations Among Themselves Property Rights Obligations to 3rd Persons Dissolution and Winding Up Limited Partnership ESTOPPEL Concept of Estoppel Concept of Laches TRUSTS Definition. while the two middle-aged children are employees in Zamboanga City. that is the proper venue for the intestate settlement of his estate. Two of his oldest children are farmers in Sulu. Characteristics Express Trusts Implied Trusts SUCCESSION Concept Wills Legitimes Disinheritance Legal Succession Summary of Intestate Shares Validity and Effect of Legacy/Device 154 155 156 158 5 years from delivery to the State 1 month To claim property escheated to the State To report knowledge of violent death of decedent lest he be considered unworthy Action for declaration of incapacity & for recovery of the inheritance. Which court has jurisdiction now and is the proper venue for the intestate proceedings? The law of which country shall govern succession to his estate? 4 years form partition Answer: In so far as the properties of the decedent located in the Philippines are concerned. arguing that it should be in Jolo before a Shari-a court since his lands are in Sulu. Civil Code). However. his national law. The other siblings objected. UP Law Center Bar Q&A (1997-2006) Page 4 of 230 Page 229 of 230 . two sisters. ADIL. where he had a mansion and where two of his youngest children now live and work. 161 168 169 174 176 180 5 years from the time disqualified person took possession 30 days from issuance of order of distribution 1 month form written notice of sale 10 years Right to repurchase hereditary rights sold to a stranger by a co-heir To enforce warranty of title/quality of property adjudicated to co-heir from the time right of action accrues To enforce warranty of solvency of debtor of the estate at the time partition is made 187 191 5 years from partition 194 197 198 201 203 207 208 213 217 219 227 Action for rescission of partition on account of lesion Bar Question (2004). But Adil’s sisters in Pakistan want the proceedings held in Lahore before a Pakistani court. the proper venue for the settlement of the estate is the domicile of the decedent at the time of his death. married three times under Pakistani law. the youngest son wanted to file intestate proceedings before the Regional Trial Court of Cebu City. three homes. He was born in Lahore but last resided in Cebu City. Since the decedent last resided in Cebu City. devise or legacy Must signify acceptance/repudiation deemed accepted otherwise. Finding that the deceased left no will. under Article 16 of the Civil Code.

property which came from the estate of the decedent. Remedial statutes ii. in fact or by fiction. 2. Acts violating mandatory or prohibitory laws are void Exception: When law itself provides their validity 5.e. If thing was owned by testator at time will was made and L/D acquired the thing from him thereafter – law is silent *Balane – L/D deemed revoked *Tolentino – no intention to revoke (BUT if the testator has not alienated the thing directly to the L/D. the persons who concur in the inheritance bring back to the common hereditary mass the property which they have received from him.e. there is an intention to revoke) Valid. but which the law considers as an advance from the inheritance. 7. a) Publication is MANDATORY even if the law provides its own date of effectivity b) Internal regulations of admin agencies binding only the agency need not be published.. it can provide for a period less than or greater than 15 days after publication before the law takes effect. Laws interpreting other laws iv. Exception: The law can provide its own date of effectivity. Retroactivity a) General Rule: Rules are not retroactive. retroactivity applies) i. When laws take effect: 15 days after completion of publication in OG or newspaper of general circulation. if the encumbrance can be removed for a consideration EFFECT AND APPLICATION OF LAWS 1. If thing was acquired gratuitously by L/D – nothing is due iii. division and assignment of a thing held in common among those to whom it may belong the thing itself may be divided. morals or good customs and is not prejudicial to third person 6. Penal laws when favorable to the accused who is not a habitual delinquent 4. but to a 3rd person and the former just acquired it from the latter. b) It is the act by virtue of which. 10. The encumbrance must be removed by paying the debt unless the testator intended otherwise 8. Laws creating new rights v. burden of making a will proof is on the one claiming validity of the will 20 years Maximum period testator can prohibit alienation of dispositions Page 228 of 230 Page 5 of 230 . Ignorance of the law excuses no one from compliance therewith (Ignorantia juris neminem excusat) 3. or its value. public order. CONCEPT OF COLLATION: a) To collate is to bring back or to return to the hereditary mass. i. if publicly known to be insane. CONCEPT OF PARTITION: It is the separation. Repeal of Laws (a) Express repeal (b) Implied repeal – incompatible provisions between the two laws Rule: Repeal of the repealing law revives the old law unless the contrary is expressly provided in the last law. Requisites for a Valid Waiver: a) person making the waiver must have the right he is waiving b) capacity to make the waiver c) clear and unequivocal manner d) waiver is not contrary to law. IMPORTANT PERIODS TO REMEMBER: 1 month or less before Testator. during his lifetime. 9. public policy. Stare Decisis: Courts must follow the rule established in earlier decisions of the Supreme Court.Legacy/Devise to remove an encumbrance over a thing belonging to testator (Article 932 par2) Legacy/Devise of a thing pledged or mortgaged (Article 934) L/D – L/D entitled to be reimbursed ii. except when the law itself expressly provides the contrary b) Exception to the exception (i. Curative statutes iii. so that a division may be effected according to law and the will of the testator.

Real property and personal property are governed by the laws of the country where they are situated (Lex situs) Order of succession. 259). intrinsic validity of testamentary provisions are governed by the national law of the decedent Forms and solemnities of wills. Bar Question (1997). and was granted. California. If testator knew that the thing did not belong to him but did not order its acquisition . Mario returned to the Philippines and married Juana who well Mario’s past life. Conflict of Laws. He may convey less than what he owns (Article 794) General Rule: Thing owned by another a. both Filipino citizens.legacy/device is void Exception: if testator acquire the thing onerously or gratuitously after making of the disposition. was able to secure a decree of divorce in Reno. p. In 1987. associations. 6. If testator was not in error i.the order should be complied with. statutory and written law. condition and legal capacity of persons are binding upon Filipino citizens even though living abroad. Is the marriage between Mario and Juana valid? b. iii. Three years later. contracts and other public instruments. Mario and Clara. How would you compare the Civil Law system in its governance and trend with that of the Common Law system? Answer: As regards “governance” – Governance in Civil Law is codal. Yes. claiming to have been abandoned by Clara. As regards “trend” – Civil law is now tending to rely more and more on decisions of the courts explaining the laws. Nevada. In 1990. Applied in this case. So they are now merging towards similar systems. In 1977. Since the marriage between Page 6 of 230 b. the legatee/devisee should be given the monetary equivalent b. were married in the Philippines.Rules: a) Laws relating to family rights and duties or to the status. If the owner is unwilling to part with the thing. the divorce decree issued to Clara and Mario will be recognized as valid here considering that at the time the foreign decree was granted. Would the renvoi doctrine have any relevance to the case? Validity and Effect of Legacy/Devise General Rule: Conveys only interest or part Thing owned in part by owned by testator Exception: if testator otherwise provides – testator (Article 929) a. If thing was acquired onerously by Page 227 of 230 . In relation to Art. a country which grants/allows absolute divorce. Penal Laws: Those for public security & safety – obligatory upon all who live or sojourn in the Philippines. the estate should give the legatee/devisee the monetary equivalent (analogy with Article 931) b. USA. Individuals. both Clara and Mario are citizens of the US. Conflict of Laws provides that the recognition of an absolute divorce granted in another state rests on the citizenship of the parties at the time the divorce was granted. If thing already belonged to legatee/devisee at time of execution of will – legacy/devise is void Answer: a.lex loci celebrationis ii. Common law is basically derived from case law. Phil. If testator ordered acquisition of the thing (Articles 930-931) . If thing was owned by another person at time of making the will and thereafter it is acquired by legatee/devisee – If testator erroneously believed that he owned the thing – legacy /devise is void 1. they went to the US and established their residence in San Francisco. amount of successional rights. disposition is validated c. If testator erroneously believed that the thing belonged to him . US citizenship. Common law is now codifying laws more and more. In 1989.code is silent but disposition should be considered valid . If other parties are unwilling to alienate. 15 of the Civil Code. It is additionally derived from case law. Mario. Bar Question (1997). He may convey more than what he owns the state shld try to acquire the part or interest owned by other parties.8. (Paras. 2. Status Laws . and corporations not permitted by law to inherit b) Conflicts Rules i. a. the couple applied for. 9.there is an implied order to acquire and doubts must be resolved in favor of intestacy Thing already owned to the legatee/devisee (Articles 932-933) a.

surgeon. NEPHEWS AND NIECES SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL TOTAL INTESTATE SHARE ½ ½ ½ ½ ½ 1 5. organization. SIBLINGS. or. (Coals). including its essential requisites. nephews.” SURVIVING SPOUSE. or institution to which such priest or minister may belong 3. Mario and Juana can freely marry each other. i. Both these firms were not doing. Felipe is a Filipino citizen. or spouse 4. Intestate Heir Surviving spouse Siblings. b. Felipe brokered a contract between Sydney Coals Corp. Page 7 of 230 . A. children or any one claiming under such witness. wills. No. co-devisees. Physician. When he went to Sydney for vacation. B. Bothe firms paid Felipe his commission for four months. Felipe learned from his contacts. nephews. under which contracts he was guaranteed commissions by both firms based on percentage of deliveries for the three-year period. the church. community. nurse. Priest who heard the confession of the testator during his last illness. the system of law intended to govern the entire contract. respectively. and where the defendant airline company maintained its office. and still do not do. sister.Surviving spouse TOTAL p. their spouses. for Coals to supply coal to Energy on a monthly basis for three years. through deposits in accounts that he opened in the two cities. NEPHEWS AND NIECES ALONE SHARE AS LEGITIME ½ ½ SHARE AS FREE DISPOSAL ½ ½ TOTAL INTESTATE SHARE 1 1 Mario and Clara has been validly terminated. and other public instruments are executed and governs their “forms and solemnities. health officer or druggist who took care of the testator during his last illness Page 226 of 230 Answer: Lex loci contractus may be understood in two senses. and the issue involved is which of the laws of the two countries should apply to determine the order of succession. payable in Sydney and in Moscow. Guardian with respect to testamentary dispositions given by a ward in his favor before the final accounts of the guardianship have been approved. after which they stopped paying him. DEFINITION OF ACCRETION It is a right by virtue of which when two or more persons are called to the same inheritance. parents or children 5.” Answer: Forum non conveniens means that a court has discretionary authority to decline jurisdiction over a cause of action when it is of the view that the action may be justly and effectively adjudicated elsewhere. he met a former business associate. even if the testator should die after the approval thereof. who proposed to him a transaction which took him to Moscow. WHO ARE INCAPABLE OF SUCCEEDING: 1. Article 17 of the New Civil Code. descendant. Define or explain the principle of “lex loci contractus. The renvoi doctrine is relevant in cases where one country applies the domiciliary theory and the other the nationality theory.e. Such issue is not involved in this case. Bar Question (2002).. He now files suit in Manila against both Coals and Energy for specific performance. who are residents of Sydney and Moscow. Intestate Heir Siblings. as follows: (1) It is the law of the place where contracts. an Australian firm. CA (228 SCRA 23 (1993). nieces TOTAL q. and Moscow Energy Corp. the intrinsic validity of testamentary provisions. order. that the two firms talked to each other and decided to cut him off. 7. nieces TOTAL ¼ ½ ¼ ½ ½ 1 SIBLINGS. parents.” pursuant to the first paragraph. spouse. indicating the law of the place with which the contract has its closest connection or where the main elements of the contract converge. As illustrated by Zamalea v. or co-legatees. chapter. business in the Philippines. devise or legacy the part assigned to the one who renounces or cannot receive his share or who died before the testator is added or incorporated to that of his co-heirs. or (2) It is the proper law of the contract. it is the law of the place where the airline ticket was issued. brother. He also executed in Sydney a commission contract with Coals and in Moscow with Energy. Felipe shuttled between Sydney and Moscow to close the contract. where the passengers are nationals and residents of. Define or explain the rule of “forum non conveniens. a Russian firm. Relatives of such priest or minister of the gospel within the 4th degree. Attesting witness to execution of will. the amount of successional rights. or the minister of the gospel who extended spiritual aid to him during the same period 2. EXCEPT if the guardian is his ascendant. (Energy).

(Manila Hotel Corp. Firstly. extinguished by death b) BUT conceived child shall be considered born for all purposes Intestate Heir Illegitimate children alone TOTAL l. Intestate Heir Illegitimate children Surviving spouse TOTAL ILLEGITIMATE CHILDREN AND SURVIVING SPOUSE SHARE AS LEGITIME 1/3 SHARE AS FREE DISPOSAL 1/6 TOTAL INTESTATE SHARE ½ 1/3 2/3 1/6 1/3 ½ 1 m. the Philippine court is not a convenient forum as all the incidents of the case occurred outside the Philippines. Neither are both Coals and Energy doing business inside the Philippines. whoever alleges the death Page 8 of 230 Page 225 of 230 . ILLEGITIMATE CHILDREN ALONE SHARE AS LEGITIME ½ ½ SHARE AS FREE DISPOSAL ½ ½ TOTAL INTESTATE SHARE 1 1 Answer: No. if it lives for at least 24 hours after its complete delivery from the maternal womb ILLEGITIMATE PARENTS AND SURVIVING SPOUSE SHARE AS LEGITIME ¼ SHARE AS FREE DISPOSAL ¼ TOTAL INTESTATE SHARE ½ 4. k.determined by birth. And even if a proper decision could be reached. the Philippine court has no power to determine the facts surrounding the execution of said contract. ii. a) Minority b) Insanity or imbecility c) State of being deaf mute d) Prodigality e) Civil interdiction 3. Should the Philippine court assume jurisdiction over the case? Explain. Lastly. under the rule of forum non conveniens. such would have no binding effect on Coals and Energy as the court was not able to acquire jurisdiction over the said corporations. 343 SCRA 1. NLRC.C. Intestate Heir SHARE AS LEGITIME ½ or 1/3 SHARE AS FREE DISPOSAL ½ or 1/3 TOTAL INTESTATE SHARE 1 ½ or 1/3 ½ or 1/3 1 ILLEGITIMATE PARENTS ALONE SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL ½ TOTAL INTESTATE SHARE 1 favorable to it provided it be born later under the following conditions: i. Restrictions on Capacity to act .g. 13-14 (2000)) PERSONS AND FAMILY RELATIONS PERSONS 1. Intestate Heir Illegitimate parents TOTAL o. Doubts as to Order of Death Rule applies only to issue of succession (for other issues apply the presumptions in the Rules of Court): As between 2 or more persons called to succeed each Illegitimate parents other. if there is doubt as to which of them died first. v. If it is alive at the time it is completely delivered from the mother’s womb ½ ½ 1 BUT if it had an inter-uterine life of at less than 7 months. the Philippine courts cannot acquire jurisdiction over the case of Felipe. Under the principle of lex loci contractus. Kinds of Capacity a) Juridical capacity – fitness to be the subject of legal relations b) Capacity to act – power to do acts with legal effect 2. e.do not exempt incapacitated persons from certain obligations. Personality a) Natural persons. the contracts were not perfected in the Philippines. Secondly. SURVIVING SPOUSE Intestate Heir Surviving spouse TOTAL n.the law of the place where the contract is made shall apply.

it is presumed that they died at the same time and there shall be no transmission of rights from one to the other. LEGITIMATE PARENTS ALONE SHARE AS LEGITIME ½ ½ SHARE AS FREE DISPOSAL ½ ½ TOTAL INTESTATE SHARE 1 1 of prior to the other shall prove the same. His whereabouts are unknown. LEGITIMATE PARENTS AND SURVIVING SPOUSE SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL TOTAL INTESTATE SHARE ½ ¼ ¼ ½ ¾ ¼ 1 LEGITIMATE PARENTS. The Administration shall Cease in Any of the Following Cases a) when the absentee appears personally or by means of an agent. (Articles 390-396. leaving no administrator of his prop. He left an agent but agent's power has expired 2. (2) Normal or declared absence w/c is one juridically declared after 2 yrs. A person disappears from his domicile. Stages of Absence: (1) Temporary or provisional absence w/c happens as soon as a person disappears from his domicile and his whereabouts are unknown. Intestate Heir Legitimate parents Illegitimate children TOTAL i. a) The state and its political subdivisions b) Other corporations. Kinds of Absence a) Physical absence b) Legal absence c) Provisional Absence i. created by law c) Corporations. partnerships and associations for private interest or purpose Absence LEGITIMATE PARENTS AND ILLEGITIMATE CHILDREN SHARE AS LEGITIME ½ ¼ SHARE AS FREE DISPOSAL TOTAL INTESTATE SHARE ½ ½ ¼ ¾ ¼ 1 Absence .special legal status of one who is not in his domicile. his whereabouts being unknown. (3) Definite or presumptive death w/c takes place when after the period provided by law. (Articles 381-383). institutions and entities for public interest or purpose. since the last news was heard from him. He did not leave any agent. the period varies according to circumstances.g. and a. and it is uncertain whether he is dead or alive 1. SURVIVING SPOUSE AND ILLEGITIMATE CHILDREN SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL TOTAL INTESTATE SHARE ½ Intestate Heir Legitimate parents Surviving spouse Illegitimate children TOTAL 1/8 ¼ 1/8 ¼ ¼ 7/8 1/8 Page 224 of 230 1 Page 9 of 230 . in the absence of proof.A juridical person is an organic unit resulting from a group of persons or mass or property to w/c the State grants or recognizes personality and capacity to hold patrimonial rights independent of those of component members. or 5 yrs if he left an administrator (Articles 384-389). Intestate Heir Legitimate parents TOTAL h.) (a) ordinary presumptive death (b) qualified presumptive death 3. ii. or b. 5. Intestate Heir Legitimate parents Surviving spouse TOTAL j. Juridical Persons . a person is presumed dead.

b) c) when the death of the absentee is provided and his estate or intestate heirs appear. NCC) when the spouse of the absentee is asking for separation of property (Art 135.5 years from time of disappearance the spouse voluntary heirs intestate heirs those who may have over the property of the absentee some right subordinated to the condition of the absentee's death Varies depending on no. ILLEGITIMATE CHILDREN AND SURVIVING SPOUSE SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL Remaining portion of estate. showing by a proper document that he has acquired the absentee's property by purchase or other title When to file No statutory period Who may file spouse Remedy receivership (Art 12. FC) authority to be sole administrator of the conjugal partnership (Art 12. provided legitimes are not impaired 1 Intestate Heir Legitimate children Illegitimate children Surviving spouse ½ share of @ legit child ¼ Presumption of death Ordinary absence: . of illegitimate children Stages of Absence Provisional absence TOTAL INTESTATE SHARE Whole estate divided by the ratio of 2 @ legitimate child Illegitimate child Surviving spouse TOTAL ½ share of @ legitimate child ¼ 1 for @ illegitimate child Legitimes wouldn’t be impaired 1 Declaration of Absence without administrator . provided legitimes are not impaired Varies depending on no.7 years . FC) judicial separation of property (Art 12. respectively 1 for @ illegitimate child (see above) Same share as a legitimate child Varies depending on no. FC) Declaration of Absence and Appointment of Administrator (Spouse shall be preferred) but only under the following cases: when the absentee has properties which have to be taken cared of or administered by a representative appointed by the Court (Art 384. FC) Action to declare a person presumptively dead is proper only when the spouse of the absentee wants to remarry Intestate Heir Legitimate child SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL Remaining portion of estate after paying legitimes to be divided by the ratio of 2:1 for @ legitimate child and @ illegitimate child.2 years from time of disappearance with administrator . if any after paying legitimes to be divided by the ratio of 2 for @ legitimate child 1 for @ illegitimate child (see above) Same share as a legitimate child. FC) when the spouse of the absentee is asking the Court that the administration of all classes in the marriage be transferred to her (Art 142. of illegitimate children Page 223 of 230 . LEGITIMATE CHILDREN. of illegitimate children TOTAL INTESTATE SHARE Whole estate divided by the ratio of 2:1 for @ legitimate child and illegitimate child respectively 1 for @ illegitimate child (see above) Same share as a legitimate child. of illegitimate children f.4 years for purposes of remarriage spouse TOTAL Exception: Page 10 of 230 Varies depending on no. when a third person appears.

of children plus the surviving spouse Varies on no. Matters Recorded in the Civil Register a) birth b) marriage c) death d) legal separation e) annulment of marriage f) judgments declaring marriage void from the beginning. of children e. g) legitimation h) adoption i) acknowledgement of natural children j) naturalization k) loss of citizenship l) recovery of citizenship m) civil interdiction n) judicial determination o) voluntary emancipation of a minor. Period of Absence under Extraordinary Circumstances: 2 years (for purposes of remarriage) or 4 years a) if a person rode an airplane or sea vessel lost in the course of voyage. Notice to indispensable parties iii. Presence of opposing parties ii. Requirements of an Adversarial Proceeding i. of children 1 for @ illegitimate child provided that legitimes wouldn’t be impaired 1. Relevant facts have been fully and properly developed iv. of children No. Intestate Heir Legitimate children ¾ ¼ 1 LEGITIMATE CHILDREN AND SURVIVING SPOUSE SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL Remaining portion of estate after paying legitimes TOTAL INTESTATE SHARE Whole estate divided equally between total number of children plus the surviving spouse succession – 10 years 75 years of age – 5 years Extraordinary Absence: 4 years (2 years for purposes of remarriage) 4. of children Legitimes to be divided equally between total no. from time of disappearance Civil Register Surviving spouse Same as share of @ legitimate child Varies on no. Opposing counsel was given an opportunity to demolish the opposite party's case (not ex parte) Page 11 of 230 TOTAL Varies on no. from the time he is considered missing in action c) danger of death under other circumstances. AND p) change of time 2.TOTAL c. from the time of loss of the airplane or sea vessel b) if a person joined the armed forces who has taken part in war. ILLEGITIMATE CHILD. AND SURVIVING SPOUSE Page 222 of 230 . of children plus the surviving spouse (see above) TOTAL 1 d. LEGITIMATE CHILDREN AND ILLEGITIMATE CHILDREN Intestate Heir Legitimate children SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL Remaining portion of estate after paying legitimes TOTAL INTESTATE SHARE Whole estate divided by the ratio of 2:1 for each legitimate child as compared to the illegitimate child Illegitimate children ½ share of @ legitimate child Legitimes to be divided by the ratio of 2 for @ legitimate child. ONE LEGITIMATE CHILD. 1 for @ illegitimate child Varies on no.

g. or the wife of the former husband is married again to another person she shall continue using the name and surname she was employing prior to the legal separation (Tolentino v CA) State No one No one A MORE DETAILED SUMMARY OF INTESTATE SHARES: a.g. Intestate Heir Legitimate child Surviving spouse ONE LEGITIMATE CHILD AND SURVIVING SPOUSE SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL TOTAL INTESTATE SHARE ½ 3 Legally separated ¼ ¼ ½ Page 12 of 230 Page 221 of 230 . unless: the court decrees otherwise. illegitimate children. Legitimate parents and illegitimate parents Legitimate children Illegitimate children Legitimate parents Illegitimate parents and Surviving spouse Everyone Surviving spouse Other collaterals within 5th degree Collateral remoter in degree and state Collaterals in the same degree 1 Surname to be Used maiden’s first name and surname + her husband’s surname maiden’s first surname + her husband’s surname e. Happy Tan retain the use of her maiden name and surname (use of husband’s surname is not a duty but merely an option of the wife) she shall resume her maiden name and surname choices: resume using her maiden name and surname continue employing her husband’s surname. Mrs. but prefixing a word indicating that she is his wife e. LEGITIMATE CHILDREN AND LEGITIMATE DESCENDANTS ALONE Intestate Heir Legitimate children TOTAL SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL ½ TOTAL INTESTATE SHARE 1 2 Marriage is annulled .wife is the innocent party ½ ½ 1 b. Compliance with the publication requirement Use of Surnames Child Concerned Legitimate child Legitimated child Adopted child Illegitimate child Conceived prior to the annulment of the marriage Conceived after the annulment of the marriage Wife Valid marriage (before the husband dies) Surname to be Used Father’s surname Father’s surname Adopter’s surname Mother’s surname. nephews nieces All other collaterals and state 1 2 3 4 5 6 Legitimate children. father’s surname if acknowledged Father’s surname Mother’s surname Siblings.v.wife is the guilty party . Evidence has been thoroughly weighed and considered vi. Marife Tan her husband’s full name.

collaterals and state Illegitimate parents. nephews. Remedies available against the usurper to the person whose name has been usurped a) Civil (insofar as private persons are concerned) i. Proper and Reasonable Causes that may Warrant the Grant of a Petition for Change of Name: a) the petitioner’s true and official name is ridiculous. damages (actual and moral) b) Criminal (when public affairs are prejudiced) 5. d) when the request for change is a consequence of a change of status. e) when the change is necessary to avoid confusion 3.and legitimate ascendants and legitimate or illegitimate descendants illegitimate parents legitimate or illegitimate descendants 3 4 5 Illegitimate children and legitimate or illegitimate descendants Surviving spouse Legitimate siblings. nieces Legitimate collateral relatives State surviving spouse illegitimate siblings. III and so on 4 1. Happy Lomibao Tan add the Roman numerals II. adoptive parents surviving spouse siblings. Marife Lomibao-Tan. nieces State legitimate or illegitimate parents and legitimate ascendants. c) the petition must be verified 7 5. When Use of Another's Name is Not Actionable Page 13 of 230 Page 220 of 230 . nephews. Happy Chris Tan add the mother’s surname e.g. Procedural Requirements for a Petition for Change of Name a) 3 years residency in the province where change is sought prior to the filing. nephews and nieces Legitimate children and illegitimate children No one Legitimate children Illegitimate children Legitimate parents and Illegitimate parents 4. Ascendants and Descendants Grandsons and other male descendants. Elements a) b) c) of Usurpation of Name there is an actual use of another's name by the defendant the use is unauthorized the use of another's name is to designate personality or to identify a person Collaterals and state Surviving spouse Collaterals other than siblings. b) the petitioner’s true and official name is tainted with dishonor c) the petitioner’s true and official name is extremely difficult to write or pronounce. such as when a natural child is acknowledged or legitimated. b) must not be filed within 30d prior to an election. collaterals and state EXCLUDED BY No one CONCURS WITH Surviving spouse Illegitimate children Surviving spouse Legitimate children and legitimate parents Illegitimate children and surviving spouse Surviving spouse No one Legitimate parents and legitimate ascendants Illegitimate parents Collaterals and state Legitimate children 2. injunction ii. nephews. shall either : add a middle name e. Jr. nieces 6 State Divorce (at least if they allow it later choices: same as widowed spouse or for those who got divorced during the Japanese occupation Between Persons Younger person is obliged to use such additional name of surname as will avoid confusion Between Son may use the word “Junior” e.g. CONCURRENCE IN LEGAL OR INTESTATE SUCCESSION Intestate Heir Legitimate children and Legitimate descendants Illegitimate children and Descendants EXCLUDES Ascendants.g.

screen. Duly authorized priest. and by using the name of another. the estate of Lamberto will be distributed as follows: Baldo-----------------. If a person dies without a will 2. 7. When the will does not institute an heir to.a) b) c) d) when the name is used as stage. a desire to avoid unnecessary trouble. or dispose of all the property belonging to the testator (legal succession shall take place only with respect to the property of which the testator has not disposed) 5. or other reason not prohibited by law or morals the free portion. If a person dies with a void will 3. Essential Requisites of Marriage a) Legal capacity of contracting parties b) Consent freely given in the presence of the solemnizing officer 3.250. Definition a) b) c) d) e) of Marriage Marriage is a special contract Of permanent union Between a man and a woman Entered into in accordance with law For the establishment of conjugal and family life Legal Succession 1. 4. If the heir repudiates the inheritance.000 --------------1. Ship captain or airplane chief . If a person dies with a will which has subsequently lost its validity 4. provided: use of name is in good faith. rabbi.000 Vilma-----------------. imam or the minister of any church or religious sect iii. between persons within the zone of military operations whether members of the armed forces or civilians and only in the absence of the chaplain v. Mayor (Local Government Code of 1991) 4. Incumbent member of the judiciary within the court’s jurisdiction ii. consul or vice-consul – can solemnize marriage between Filipinos abroad vi. or pen name. there being no substitution. Formal Requisites of Marriage a) Authority of solemnizing officer b) Valid marriage license (except in cases where a marriage license is not required) c) Marriage ceremony d) Authorized Solemnizing Officers i. Rule of Equal Division – the relatives who are in the same degree shall inherit in equal shares 3.000 Ernie------------------.250. CAUSES FOR LEGAL OR INTESTATE SUCCESSION: 1. Rule of Proximity – the relative nearest in degree excludes the farther one 2. and no right of accretion takes place 8. no injury is caused to that person's right when use is motivated by modesty. Military commander of a unit to which a captain is assigned. When the heir instituted is incapable of succeeding. If the heir dies before the testator.450. shall be respected. except in cases provided in the Code 2.50. FUNDAMENTAL UNDERLYING PRINCIPLES IN LEGAL OR INTESTATE SUCCESSION: 1. Marriage Exempt from License Requirements Page 14 of 230 1 ADOPTED CHILD legitimate child and legitimate descendants 2 illegitimate children and .000 FAMILY RELATIONS Marriage 1. If the suspensive condition attached to the institution of the heir does not happen or is not fulfilled 6.000.000 Elvira-----------------. In sum.only in articulo mortis . Consul-general. DEFINITION OF RIGHT OF REPRESENTATION It is a right created by fiction of law by virtue of which the representative is raised to the place and degree of the person represented and acquires the rights which the latter would have of he were living or if he would have inherited. ORDER OF LEGAL OR INTESTATE SUCCESSION: Legitimate Child Legitimate child and legitimate descendants Legitimate parents ILLEGITIMATE CHILD legitimate child and legitimate descendants illegitimate children Page 219 of 230 2.only in articulo mortis between passenger or crew members while the ship is at sea or the plane is in flight and also during stopover at ports of call iv.

Legacies or devises declared by the testator to be preferential 3.00? 5. if they are able to obtain a license during the 3-month period. Marriages void under Article 53 Page 15 of 230 Answer: The disinheritance of Wilma was ineffective because the ground relied upon by the testator does not constitute maltreatment under Article 919(6) of the New Civil Code.marriage counseling. 2) omits entirely his spouse Elvira. which applies only to Page 218 of 230 . he shall be entitled to receive it. and must be proved by the interested heir if the person disinherited should deny it It must unconditional It must be total a) b) c) 4. Mistake in identity iv.needs parental consent. Hence.Something happens to the heir B) HOW 1. The legacy of 50.00 to his mistress Rosa and P50. Legacies for Education 5. suspend the issuance of the marriage license for a period of 3 months from the completion of publication of the application for marriage license.000. 7.00 to his driver Ernie and 4) institutes his son Baldo as his sole heir. Incapacity/Predecease . Legacies or devises of a specific. Rule on Marriages Solemnized Abroad a) General Rule: Marriages solemnized outside the RP in accordance with the law of the foreign country shall be valid in the Philippines (lex loci celebrationis) b) Exceptions: i. c) 18 years old and above but below 25. therefore. The legacy in favor of Rosa is void under Article 1028 for being in consideration of her adulterous relation with the testator.000. The institution of Baldo. criminally and administratively liable 6. Marriage between persons below 18 years old ii. In his last will and testament. Lamberto 1) disinherits his daughter Wilma because “she is disrespectful towards me and raises her voice talking to me”. 3) leaves a legacy of P100. She is. the marriage shall be VOID. ORDER OF PAYMENT IN CASE ESTATE IS INSUFFICIENT TO COVER ALL LEGACIES AND DEVICES: 1. The cause must be certain and true. If the parties get married during the 3-month period without a license.000 pesos.5. disqualified to receive the legacy of 100. Hence. the marriage will still be valid but may be held civilly and criminally liable. the testamentary provisions in the will shall be annulled but only to the extent that her legitime was impaired.The testator creates it himself 2. VACANCIES ARE FILLED: Substitution Representation Accretion d) e) Marriage in articulo mortis If the residence of either party is so located that there is no means of transportation to enable such party to appear personally before the civil registrar Marriage in articulo mortis in military zones and on planes and ships Marriage among Muslims or among members of ethnic cultural communities in accordance with their customs Marriage between persons who have lived together as husband and wife for at least five years and without any legal impediment to marry each other 5. How will you distribute his estate of P1. VACANCY IN SUCCESSION A) CAUSES OF VACANCY IN SUCCESSION: 1.000. 6.The heir does something 3. Flaws in the Marriage Requisites and Effects a) ABSENCE of ANY essential or formal requisites. determinate thing which forms a part of the estate 6. Remuneratory legacies or devises 2. Disinheritance .Voidable c) Irregularity in formal requisite. On the other hand.marriage void ab initio Except: If the marriage is solemnized by unauthorized person. However. or else marriage voidable b) 21 years old and above but below 25. Repudiation . Bigamous or polygamous marriage iii. All others pro-rata Bar Question (2000). the marriage will still be valid if either or both contracting parties believed in good faith that the solemnizing officer had legal authority [Article 35 (2)] b) Defect in ESSENTIAL Requisites. Other requirements: if either or both parties are: a) 18 years old and above but below 21. she will be entitled only to her legitime. Only compulsory heirs in the direct line may be the subject of preterition.000. The total omission of Elvira does not constitute preterition because she is not a compulsory heir in the direct line. even if lacking marriage is still valid.000 pesos in favor of Ernie is not inofficious not having exceeded the free portion. Not having been preterited.needs parental advice. if lacking same effect as above 7. 3. Legacies for Support 4.Valid but party responsible for such irregularity shall be civilly. 2.

Luna as reservatarios. They became sweethearts and got engaged to be married on New Year’s Eve aboard a cruise ship in the Carribbean. Incestuous marriages vii. while the other 5 Million Pesos will go to the parents of Mr. his legal capacity is governed by Philippine Law (Art15 Civil Code). Luna’s estate will go to the parents of Mrs. DIFFERENCES BETWEEN PRETERITION AND DISINHERITANCE: Disinheritance Express deprivation of legitime Always voluntary PRETERITION Tacit deprivation of legitime May also be voluntary but is presumed to be involuntary (as it is an omission to mention an heir or though mentioned. Luna inherited half of the 10 Million estate while the unborn child inherited the other half. Luna. If Boni was no longer a Filipino citizen. stating the cause in the will itself Page 217 of 230 . As the only heir. Since the marriage was celebrated aboard a vessel of Norwegian registry. In the hands of Mrs. Luna inherited. Anne retains your services to advise her on whether her marriage to Boni is valid under Philippine law? Is there anything else she should do under the circumstances? of Mr. The unborn child inherited because the inheritance was favorable to it and it was born alive later though it lived only for five hours. the line where the property came from. Disinheritance 1. the Filipino spouse shall likewise have the capacity to remarry under the Philippine law. He parents will inherit her estate consisting of the 5 Million she inherited from Mr. Luna. Luna. where there is a Filipino consulate. As to the second question. When Mr.v. Divorce obtained abroad by a Filipino is not recognized. the foreigner-spouse acquires the capacity to remarry. the marriage is valid and shall be recognized in the Philippines. It must be made expressly. his heirs were his wife and the unborn child. Boni himself is a resident of Norway where he and Anne plan to live permanently. Psychological incapacity vi. BONI and ANNE met while working overseas. 8. Luna as the resevatarios of the reserved property inherited by Mrs. is not instituted as an heir) Presumed by law to be a mere oversight Compulsory heir is merely restored to his legitime Answer: If Boni is still a Filipino citizen. respect and fidelity Page 16 of 230 Legal cause is present Even a compulsory heir may be totally excluded 3. Luna as beneficiaries of the reserved property. Under Philippine Law. Luna. Hence. if Boni is still a Filipino. REQUISITES FOR A VALID DISINHERITANCE: 1. It must be for a cause designated by law 3. what she inherited from her child was subject to the reserva troncal for the benefit of the relatives of the child within the third degree of consanguinity and who belong to the family of Mr. Back in Manila. Anne can file an action for declaration of nullity of her marriage to him. it was survived by its mother. Marriage void for reasons of public policy d) Qualified divorce law: If a Filipino is married to a foreigner and the latter subsequently obtains a valid divorce abroad capacitating him/her to remarry. Mrs. If the Ship Captain has authority to solemnize the marriage aboard his ship. Mrs. It must be made in valid will 4. Luna from her child. the divorce is valid. she was survived by her parents as her only heirs. the estate of the child consisting of its 5 Million inheritance from Mr. Bar Question (2004). When Mrs. His first wife was also a Filipina but now based in Sweden. Obligations of Husband and Wife a) Live together b) Observe mutual love. his marriage to Anne is void because of a prior existing marriage which was not dissolved by the divorce decreed in Oslo. Luna died. 5 Million Pesos of Mr. Anne discovered that Boni had been married in Bacolod City 5 years earlier but divorced in Oslo only last year. for just cause. Requisites of Art. Heir disinherited must be designated by name or in such a manner as to leave no room for doubt as to who is intended 2. 2. 26 par. by operation of law. Luna. 2: 1) one of the spouses is a foreigner 2) a divorce decree is obtained 3) the divorce decree is obtained at the instance of the foreign spouse 4) under the divorce decree. DEFINITION OF DISINHERITANCE . deprives a compulsory heir of his right to the legitime. Luna died. The other 5 Million she inherited from her child will be delivered to the parents of Mr. When the child died. Mrs. his marriage to Anne is valid if celebrated in accordance with the law of the place where it was celebrated. In sum.It is the act by which the testator. Luna. Norwegian law applies. They took the proper license to marry in New York City. But as planned the wedding ceremony was officiated by the captain of the Norwegian-registered vessel in a private suite among selected friends.

00. Luna will go to the parents of Mrs. then the compulsory heir is entitled to completion of legitime under Article 906 If the impairment is thru donation. is obliged to reserve such property as he may have acquired by operation of law for the benefit of relatives who are within the third degree and who belong to the line from which said property came REQUISITES (as provided in Chua v. CFI [1981]) 1) that the property was acquired by a descendant from an ascendant or from a brother or sister by gratuitous title 2) that said descendant died without an issue 3) that the property is inherited by another ascendant by operation of law 4) that there are relatives within the 3rd degree belonging to the line from which said property came Bar Question (1999). The other spouse may object on valid.000. the partition and distribution of the spouses’ properties and the delivery of the children’s presumptive legitime must be recorded in the appropriate civil registry and registries of property Answer: a) This is a case of ineffective disinheritance because marrying a man that the father did not approve of is not a ground for disinheriting D. Two days after the child’s death.00 divided into three equal parts and D-1 and D-2 will get a reduced testamentary disposition of P250. Palma’s death. Contracted by any party below 18 years old iii. Luna died.00 each. i. then remedy is collation. D-1 and D-2. partition and distribution of the spouses’ properties ii. Luna as their inheritance from Mrs. If benefit accrued to the family after the objection has been made. 9.00.000. Solemnized by unauthorized solemnizing officer (Except if either or both parties believed in good faith that the officer had authority) iv. Therefore. recording in the civil registry and registries of property of the judgment of annulment or absolute nullity.b) c) If the impairment is partial.000. after the annulment of the marriage: i. and instituting daughters D-1 and D-2 as his heirs to his entire estate of P1. but the child died five hours after birth. Page 17 of 230 . CFI [1977] & reiterated in Gonzales v.66 + P250.66 + P250. and the parents of his widow. He executed a Will disinheriting D because she married a man he did not like. Therefore. 5. Hence.000. 52 which requires the ff.000. and the institution of D-1 and D-2 shall only apply on the free portion in the amount of P500. while the other half will be inherited by the parents Page 216 of 230 Failure to comply with these requisites will make the subsequent marriage void ab initio. the resulting obligation shall be enforced against the ACP. how should his estate be divided? Explain. Who is entitled to Mr. Luna. the institution of D-1 and d-2 shall be annulled insofar as it prejudices the legitime of D. c) d) Render mutual help and support Either spouse may exercise any legitimate profession or business without the consent of the other. b) Mr. If benefit accrued to the family before the objection. serious and moral grounds. Mistake in identity b) Subsequent marriage void under Article 53 Rule: A person whose marriage has been annulled may remarry as long as he complies with Art. His widow gave birth to a child four months after Mr.00 D-2 P166. D. Solemnized without license (Except when license not required) v. Upon Mr. Luna’s death.000. VOID MARRIAGES (imprescriptible) a) Void Ab Initio under Article 35 ii.000.66 D-1 P166. Luna is now being claimed by his parents. delivery of the presumptive legitime of the children iii. Luna’s estate and why? In case of disagreement. Palma. CONCEPT OF RESERVA TRONCAL The ascendant who inherits from his descendant any property which the latter may have acquired by gratuitous title from another descendant.000. leaving an estate of Ten Million (P10. The estate of Mr.00 b) Half of the estate of Mr.666. has three daughters D. Luna also died because she suffered from the difficult childbirth. the shares will be: D P166. the resulting obligation shall be enforced against the separate property of the spouse who has not obtained consent. the widow of Mr.00) Pesos.666. the court shall decide whether The objection is proper AND Benefit has accrued to the family before and after the objection.666. a widower. or a brother or sister. ii. Bigamous or polygamous marriages (Except Article 41 – marriage contracted by a person whose spouse has been absent for 4 years (ordinary absence) or 2 years (extraordinary absence) where such person has a well founded belief that his/her absent spouse was already dead and after the absent spouse is judicially is declared presumptively dead) vi. D-1 and D-2 will get their legitimes of P500. a) Mr.000.

and that such disorder prevented him from complying with his duties as a married person. incapacity must be unknown to the other contracting party iv. REMEDY OF COMPULSORY HEIR IN CASE OF IMPAIRMENT OF LEGITIME: a) If the impairment is total. Arnell met an accident which disabled him from reporting for work and earning a living to support himself. at the time of the celebration of the marriage. The acts of Arnell complained about do not by themselves constitute psychological incapacity.Void under Article 36: Where one party. Legitimate parents alone Legitimate parents Illegitimate children Legitimate parents and Surviving spouse Legitimate parents Surviving spouse Illegitimate children Illegitimate children alone ½ ¼ ½ ¼ ½ 1/8 ¼ ½ Answer: Gemma’s suit will not prosper. It is not enough to prove the commission of those acts or the existence of his abnormal behavior.c) Psychological Incapacity . It must also be shown that such psychological incapacity. they met several times in social functions but he snubbed her. She alleged that after 2 months of their marriage. Will Gemma’s suit prosper? Explain. Arnell showed signs of disinterest in her. incapacity exists at the time of the celebration of the marriage ii. the other spouse must not himself/herself be incapacitated Bar Question (2006). Between step-parents and step-children Page 18 of 230 Illegitimate children Surviving spouse Surviving spouse alone Illegitimate parents alone Illegitimate parents Surviving spouse 1/3 ½ (divided by no. d) Incestuous Marriage i. there was no showing that Arnell was suffering from a serious mental disorder. incapacity must be permanent (it continues to the time when the case for annulment is being tried) and incurable iii. Between brothers and sisters.that his behavior was a manifestation of that disorder. then there may be preterition if the compulsory heir preterited is either an ascendant or descendant. Meanwhile. When she got sick. Between collateral blood relatives up to the 4th civil degree ii. Between ascendants and descendants of any degree ii. i. was psychologically incapacitated to comply with the essential marital obligations. he did not visit her even if he knew of her confinement in the hospital. Article 854 would come into play (annulment of institution of heir and reduction of devises and legacies) Page 215 of 230 . It must be shown that those acts or that behavior was manifestation of a serious mental disorder and that it is the root cause why he is not able to perform the essential duties of married life. neglected her and went abroad. He returned to the Philippines after 3 years but did not even get in touch with her. In this case. of children) ½ or 1/3 if marriage in articulo mortis ½ ¼ ¼ 4. Worse. as manifested in those acts or that behavior was existing at the time of the celebration of the marriage. Gemma filed a petition for the declaration of nullity of her marriage with Arnell on the ground of psychological incapacity. of children) 1/3 (divided by no. whether full or half blood e) Void for Reason of Public Policy i.

the subsequent marriage is valid but it shall be automatically terminated by the recording of the affidavit of reappearance of the absent spouse. ix. vii. Exception to Exception: If both spouses of the subsequent marriage acted in bad faith. Force. Insanity of one of the parties iii. killed that the other person’s spouse or his/her own spouse Legitimate children alone 1 legitimate child surviving spouse Legitimate children Surviving spouse Legitimate children Illegitimate children 1 legitimate child surviving spouse illegitimate children 2 or more legitimate children surviving spouse Illegitimate children ½ (divided by the # of children) ½ ¼ ½ (divided by no. the prior spouse had been absent for 4 consecutive years (ordinary absence) or 2 years (extraordinary absence) and the spouse has a well-founded belief that the absent spouse was already dead. 10. regardless of nature. intimidation or undue influence v. SUMMARY OF LEGITIMES OF COMPULSORY HEIRS: SURVIVING RELATIVES LEGITIMATE CHILDREN & DESCENDANTS SURVIVING ILLEGITIMATE LEGITIMATE ILLEGITIMATE CHILDREN PARENTS SPOUSE PARENTS & ASCENDANTS Between parents-in law and children-in law Between adopting parent and adoptive child Between surviving spouse of the adopter and the adopted Between surviving spouse of the adopted and the adopter Between adopted and legitimate child of adopter Between adopted children of same adopter Between parties where one with the intention to marry the other. habitual alcoholism. 3. Impotency vi. Exception: If before the celebration of the subsequent marriage. Illegitimate children and descendants (legitimate or illegitimate) iii. such marriage is void ab initio.3. VOIDABLE MARRIAGES (annullable) a) Grounds for Annulment of Marriage i. Fraud 1) Non-disclosure of conviction by final judgment of crime involving moral turpitude 2) Concealment of pregnancy by another man 3) Concealment of sexually transmissible disease. In this case. homosexuality and lesbianism iv. Lack of parental consent ii. existing at the time of marriage 4) Concealment of drug addiction. Affliction of sexually transmissible disease found to be serious and which appears incurable b) Rules on filing the action of annulment ½ ½ ¼ (preferred) ½ (divided by no. Concurring – those who succeed together with the primary or the secondary compulsory heirs a. of children) Same as the share @ legit child ½ of the share of @ legit child ½ of the share of @ legit child Rule on Bigamous Marriage (Article 41) General Rule: Marriage contracted by any person during the subsistence of a previous marriage is VOID. Widow or widower (legitimate) b. viii. vi. v. iv. of children) Same as the share of @ legit child ½ of the share of @ legit child Page 214 of 230 Page 19 of 230 .

The fideicommissary substitution is imposed on the free portion of the estate and never on the legitime Legitimes 1. Primary – those who have precedence over and exclude other compulsory heirs a. and one person for two or more heirs Reciprocal – if heirs instituted in unequal shares should be reciprocally substituted. A fiduciary or first heir instituted entrusted with the obligation to preserve and to transmit to a fideicommissary substitute or second heir the whole or part of the inheritance ii. If there are more than one substitute. they shall have the same share in the substitution as in the institution Free cohabitation after insane regains sanity Fraud Force. Spouse who contracted the marriage in bad faith. with respect to their legitimate parents and ascendants Secondary – those who succeed only in the absence of the primary heirs a. The fiduciary or first heir and the second heir are living at the time of the death of the testator iv. the one to receive the property is the fideicommissary or second heir REQUISITES FOR A FIDEICOMMISSARY SUBSTITUTION: i. The heir instituted to such condition is called the first heir or fiduciary heir.if the testator institutes an heir with an obligation to deliver to another the property so inherited. Such substitution must not go beyond one degree from the heir originally instituted iii. Brief or Compendious – two or more persons may be substituted for one. CLASSES OF COMPULSORY HEIRS: 1. intimidation or undue influence Impotence of one party Serious STD Injured party Injured party Potent party Healthy party Free cohabitation after knowledge of fraud Free cohabitation after cause has disappeared Cannot be ratified but action prescribes Cannot be ratified but action prescribes 2. Legitimate children and descendants (legitimate).Grounds for annulment Lack of parental consent Insanity of one party Who can file Party under age Parent or guardian Sane spouse Guardian of insane spouse Insane spouse Prescriptive period Within 5 years after attaining 21 Before child reaches 21 Before death of other party Anytime before the death of either party During the lucid interval or after regaining sanity also before death of other party Within 5 years from discovery of fraud Within 5 years from the cessation of cause Within 5 years after marriage Within 5 years after marriage Ratification Free cohabitation after reaching 21 i. or incapacitated. DEFINITION OF LEGITIME It is that part of the testator’s property which he cannot dispose of because the law has reserved it for certain heirs called compulsory heirs 2. his/her share in the net profits of community property shall be forfeited in favor of common Page 20 of 230 Page 213 of 230 . the substitute shall acquire the share of the heir who dies. unless it clearly appears that the intention of the testator was otherwise. renounces. Same Same 2. ii. Fideicommissary Substitution . The fideicommissary substitution must be expressly made v. with respect to their legitimate children and descendants Effects of Termination of Marriage Voidable bigamous marriage (Art 41) Children of subsequent marriage conceived before its termination – legitimate Declaration of nullity Illegitimate except Art 36 and Art 53 Annulment Children conceived or born before annulment decree – Status of children legitimate Property Relations ACP/CPG shall be liquidated. Legitimate parents and ascendants (legitimate).

However.000 to him. (RENOUNCE) or c. the institution shall be effectual.000. the institutions in the will shall be respected but the legitime of the oldest son has to be completed if he received less. Juan opposed the will on the ground of preterition. since the donation given him was P100. leaving a last will and testament in which she instituted only her four young children as her sole heirs. 15. die before him (PREDECEASE) b.000 in a bank. one-half or P500. Five years later. Because her eldest son Juan had been pestering her for capital to start a business. the estate of the testatrix is P1.3. donations propter nuptias made by one in favor of the other are revoked by operation of law. 4. Each will receive P225.000 is the legitime of the legitimate children and it follows that the legitime of one legitimate child is P100. without prejudice to the right of representation Bar Question (2001).000. Devises and legacies shall remain valid as long as they are not inofficious 3. There being no preterition. Josefa gave him P100. The remaining P900. Of this amount. Propter Nuptias If donee contracted the marriage in bad faith. he has already received in full his legitime and will not receive anything more from the decedent. her only property left was P900. to be divided equally among them. If both spouses acted in bad faith. How should Josefa’s estate be divided among her heirs? State briefly the reason(s) for your answer. The legitime therefore of the oldest son is P100. children of the guilty spouse by previous marriage or in default.000. Compulsory heir omitted must be of the DIRECT LINE The omitted compulsory heir must be LIVING at the time of testator’s death or must at least have been CONCEIVED before the testator’s death Donations children or if there are none.000. the innocent spouse Shall remain VALID except Same Same B) EFFECTS OF PRETERITION: 1. If the omitted compulsory heir should die before the testator. DEFINITION OF SUBSTITUTION: It is the appointment of another heir so that he may enter into the inheritance in default of the heir originally instituted CLASSES OF SUBSTITUTION: 1. After collating the donation of P100. only co-ownership (Art 147) Children are illegitimate Exceptions: In case of psycho incapacity (Art 36) Page 21 of 230 . This donation is considered an advance on the sonis inheritance. should be incapacitated to accept the inheritance (INCAPACITATED) Page 212 of 230 Succession If one spouse contracted the marriage in bad faith.000. shall go to the four younger children by institution in the will. he shall be disqualified to inherit from the innocent spouse both testate and intestate Same Same Distinction between Void and Voidable Marriages Void Inexistent from the time of performance Cannot be ratified Voidable Valid until annulled Can be ratified either by free cohabitation or prescription Absolute community exists unless another system is agreed upon in marriage settlement Children are legitimate if conceived before decree of annulment As to nature As to susceptibility to ratification As to effect on property As to effect on children No community property. should not wish.000 to the remaining property of P900.000.000. The institution of heir is annulled 2.000. innocent spouse may revoke his designation as beneficiary in the insurance policy even if such designation be stipulated irrevocable Same Same Answer: There was no preterition of the oldest son because the testatrix donated P100. At the time of her death. therefore. Insurance If one spouse acted in bad faith. Vulgar or Simple – the testator may designate one or more persons to substitute the heir or heirs instituted in case such heir or heirs should: a.000. donations propter nuptias made to the donee are revoked by operation of law. Josefa died.

Marriage bond is not severed iii. there must be a decree of annulment Can no longer be impugned after death of one of the parties 3. Abandonment for more than one year without justifiable cause b) Grounds i. Sexual infidelity or perversion ix. If the formalities required by law have not been complied with If the testator was insane. they are instituted simultaneously and not successively 13. b. 5. Will specifically assigns to such person an inchoate share in the estate 3. No preterition results from the effect of such will C) THREE PRINCIPLES IN THE INSTITUTION OF HEIRS: 1. 6. iv. Attempt by despondent against the life of the petitioner x. iii. or the influence of fear. Simultaneity – when several heirs are instituted. Cannot be attacked collaterally. Attempt to corrupt or induce petitioner to engage in prostitution or connivance in such corruption or inducement iv. He can give his estate to any person qualified to inherit under him However. Physical violence or moral pressure to compel change in religious or political affiliation iii. PRETERITION A) CONCEPT OF PRETERITION: 1. Equality – heirs who are instituted without a designation of shares inherit in equal parts 2. 4. to Deny Legal Separation Condonation Consent Connivance Mutual fault Collusion Prescription – action for legal separation must be filed within five years from the time of the occurrence of the cause of action 12. Repeated physical violence or grossly abusive conduct directed against petitioner. If one has no compulsory heirs: a. v. b. There must be an omission of one. vi. Subsequent bigamous marriage viii. or otherwise mentally incapable of making a will. INSTITUTION OF HEIRS A) DEFINITION OF INSTITUTION OF HEIR: – It is an act by virtue of which a testator designates in his will – the person or persons who are to succeed him in his property and transmissible rights and obligations B) REQUISITES FOR A VALID INSTITUTION OF HEIR: 1. there must be judicial declaration of nullity. only directly. Spouses are entitled to live separately ii. or threats If it was procured by undue and improper pressure and influence. Dissolution of property regime Page 22 of 230 14.As to how marriage may be impugned Children born of subsequent marriage (Art 53) May be attacked directly or collaterally but for purpose of remarriage. Lesbianism or homosexuality vii. ii. RULES REGARDING A PERSON’S RIGHT TO DISPOSE OF HIS ESTATE: 1. he must respect restrictions imposed by special laws He can give only the disposable portion to strangers Legitimes of compulsory heirs must be respected 2. The will is formally valid 5. c) Effects of Separation i. some or all of the heir/s in the will 2. Individuality – heirs collectively instituted are deemed individually named unless a contrary intent is proven 3. Final judgment sentencing respondent to imprisonment of more than 6 years v. i. 2. Can still be impugned even after death of parties 1. a common child or a child of the petitioner ii. at the time of its execution If it was executed through force or under duress. Designation in will of person/s to succeed 2. LEGAL SEPARATION a) Grounds for Legal Separation i.e. The omission must be that of a COMPULSORY HEIR Page 211 of 230 . The person so named has capacity to succeed 4. No vice of consent is present 6. Drug addiction or habitual alcoholism vi. on the part of the beneficiary or of some other person If the signature of the testator was procured by fraud If the testator acted by mistake or did not intend that the instrument should be his will at the time of affixing his signature thereto 11. If one has compulsory heirs: a.

37). The revocation by destruction therefore is dependent on the validity of the second will. Answer: Yes.. (b) annulment of marriage. by the testator himself. provided that the disease was present at the time of the marriage. A week later. and/or (d) separation of property. DEFINITION OF A CODICIL It is a supplementary or addition to a will made after the execution of the will and annexed to be taken as a part thereof by which any disposition in the original will may be explained. deaf or dumb Able to read and write Domiciled in the Philippines Have not been convicted of falsification of a document. she is presumed to have abandoned the husband and he Page 23 of 230 . By the execution of a will. and by his express direction Bar Question (2003). can be aggrieved spouse avail himself/herself of – (i) If the wife discovers after the marriage that her husband has “AIDS” (ii) If the wife goes abroad to work as a nurse and refuses to come home after the expiration of her three-year contract there. or by some other person in his presence. added to or altered 9. (ii) If the wife refuses to come home for three (3) months from the expiration of her contract. he executed another will which expressly revoked his first will. may it now be admitted to probate and given effect? Why? (5%) vii. Final decree of legal separation shall be set aside but the separation of property and any forfeiture of the share of the guilty spouse shall subsist unless the spouses agree to revive their former property regime Bar Question (2003). (iii) If the husband discovers after the marriage that his wife has been a prostitute before they got married. GROUNDS FOR DISALLOWANCE OF A WILL: Page 210 of 230 Answer: (i) Since AIDS is a serious and incurable sexually-transmissible disease. 4. but it was denied probate due to formal defects. 90 Phil. Which of the following remedies. 11. alienations. Assuming that a copy of the first will is available.e. except in case of voluminous books of account or inventories 10. 6. perjury or false testimony iv. Since it turned out that the second will was invalid. the tearing of the first will did not produce the effect of revocation. 5. Innocent spouse may revoke designation of guilty spouse as beneficiary in insurance policy even if such designation be stipulated as irrevocable d) Effects of Reconciliation i. REQUISITES FOR INCORPORATION BY REFERENCE: a) the document or paper referred to in the will must be in existence at the time of the execution of the will b) the will must clearly describe and identify the same. v. tearing. following which he tore his first will to pieces. By implication of law 2. Legal separation proceedings if still pending shall be terminated ii. (iv) If the husband has a serious affair with his secretary and refuses to stop notwithstanding advice from relatives and friends. or obliterating the will with the intention of revoking it. stating among other things the number of pages thereof c) it must be identified by clear and satisfactory proof as the document or paper referred to therein d) it must be signed by the testator and the witnesses on each and every page. the first will may be admitted to probate and given effect. However. 8. he was under the mistaken belief that the second will was perfectly valid and he would not have destroyed the first will had he known that the second will is not valid. (v) If the husband beats up his wife every time he comes home drunk. (c) legal separation. Mr. viii. (a) declaration of nullity of marriage. Forfeiture of the share of the guilty spouse in the net profits of the ACP/CP Custody of minor children to innocent spouse (subject to Article 213 which provides that parental authority shall be exercised by parent designated by the Court) Guilty spouse is disqualified from intestate succession and provisions made by him in favor of the innocent spouse in a will shall be revoked Innocent spouse may revoke the donation made by him in favor of the offending spouse. liens and encumbrances registered in good faith before the recording of the complaint for revocation in the registries of property shall be respected. his second will was presented for probate by his heirs. By burning. Reyes. vi. however. Molo. the wife may file an action for annulment of the marriage on this ground whether such fact was concealed or not from the wife. Upon the death of Mr. This is known as the doctrine of dependent relative revocation (Molo v.3. Not blind. When the testator tore the first will. codicil or other writing executed as provided in case of wills 3. The marriage is voidable even though the husband was not aware that he had the disease at the time of marriage. canceling. i. REVOCATION OF A WILL: 1. Reyes executed a will completely valid as to form.

FC). Bar Question (2006). FC). so they parted ways. C) ADDITIONAL REQUISITES FOR A NOTARIAL WILL IF THE TESTATOR BE DEAF OR A DEAF-MUTE: 1. She may also file an action for declaration of nullity of the marriage if the husband’s behavior constitutes psychological incapacity existing at the time of the celebration of marriage.55 (10) of the Family Code on the ground of abandonment of petitioner by respondent without justifiable cause for more than one year. No misrepresentation or deceit as to character. TH wife is deemed to have abandoned the husband when she leaves the conjugal dwelling without any intention of returning (Article 101. They decided to get married with the consent of Juliet’s parents. The intention not to return cannot be presumed during the 3-year period of her contract. rank. (iii) If the husband discovers after the marriage that his wife was a prostitute before they got married. Certain dispositions or additional matter may be suppressed or inserted PROVIDED that said cancellation is signed by the testator and written by the hand of the testator himself c. Laguna. if able to do so. I will file an action for the declaration of nullity of Gigi’s marriage to Ric on the ground of absence of authority of the Baptist Minister Page 24 of 230 . such insertion is considered as not written because the validity of the will cannot be defeated by the malice or caprice of a third person b) If the insertion after the execution of the will was with the consent of the testator. Juliet gave birth to twins. and everything is written by the hand of the testator himself b. he has no remedy. In a language or dialect known to the testator 3. a 16 year-old sophomore in a local college and a Seventh-Day Adventist. Of the age of 18 years or more Page 209 of 230 Suggested Answers: (1) As counsel for Gigi. the will remains valid but the insertion is void c) If the insertion after the execution is validated by the testator by his signature thereon. Catholics. the spouses developed irreconcilable differences. and signed by the hand of the testator himself 5. While separated. health. Holographic – in three ways a. AMENDING A WILL: 1. A year after. then the will is void because it is not written entirely by the testator 7. IF the refusal continues for more than one year from the expiration of her contract. Testator must personally read the will. (v) The wife may file an action for legal separation on the ground of repeated physical violence on her person (Article 55(1). in Calamba. 2. he shall designate two persons to read it and communicate to him. They got married in a Catholic church in Manila. Dispositions may be added below the signature. She may also file an action for judicial separation of property for failure of the husband to comply with his marital duty of mutual respect (Article 135(4). QUALIFICATIONS OF WITNESSES TO A NOTARIAL WILL: 1. in some practicable manner. EFFECT OF INSERTION ON THE VALIDITY OF A HOLOGRAPHIC WILL: (Tolentino) a) If made after the execution of the will. (Article 46 FC) (iv) The wife may file an action for legal separation. (4) If you were the counsel for Gigi. then the insertion becomes part of the will. The husband’s sexual infidelity is a ground for legal separation (Article 55. Ric never doubted her age much less the authenticity of her birth certificate. Aissa and Aretha. a Baptist Minister. Through a codicil which may either be notarial or holographic 6. or chastity shall constitute fraud as legal ground for an action for the annulment of marriage. She may also file an action for judicial separation of property for failure of her husband to comply with his marital duty of fidelity (Article 135(4). Ric fell in love with Juliet. Otherwise. He overlooked the fact that his license to solemnize marriage expired the month before and that the parties do not belong to his congregation. FC). the husband may file the action for legal separation under Art. dated. fortune. 1989 by Ric’s uncle. After 5 years of married life and blessed with 2 children.may file an action for judicial separation of property. Gigi and Ric. PROVIDED that said dispositions are also dated and signed. FC). In writing 2. its contents D) ADDITIONAL REQUISITE FOR A NOTARIAL WILL IF THE TESTATOR IS BLIND: The will shall be read to the testator twice -Once by one of the subscribing witnesses and once by the notary public before whom the will is acknowledged E) REQUISITES FOR HOLOGRAPHIC WILL: 1. got married when they were 18 years old. 101. Notarial – only through a codicil 2. what action/s will you take to enforce and protect her interests? Explain. Entirely written. Of sound mind 2. Their marriage was solemnized on August 2. and the entire will becomes void. but without the consent of the testator. because of failure to comply with the requirement that it must be wholly written by the testator d) If the insertion made by a third person is made contemporaneous to the execution of the will. Article 101. FC). She presented to him a birth certificate showing she is 18 years old.

and on the basis of the legal presumption that her marriage to Ric is valid. (2) As counsel for Gigi.Wills 1. It must contain an attestation clause.It is an act whereby a person is permitted with the formalities prescribed by law to control to a certain degree the disposition of his estate to take effect after his death 2. and by the instrumental witnesses of the will. What Governs Property Relations Between Spouses a) Marriage settlement – future spouses may agree upon the regime of ACP. there is already a property regime and this cannot be changed . Each and every page. under his express direction. All the instrumental witnesses witnessed and signed the will and all its pages in the presence of the testator and of one another 6. the system of ACP shall govern c) Local custom General rule: once marriage is celebrated. actions: (1) Legal separation on the grounds of subsequent bigamous marriage and sexual infidelity. REQUISITES OF WILLS A) COMMON REQUIREMENTS TO BOTH WILLS: 1. CPG or complete separation of property or any other regime b) Provision of the Family Code – if there is no marriage settlement or when the regime agreed upon is void. (Art 135/136) 2. Subscribed at the end by the testator himself or by the testator’s name written by some other person in his presence. (5) Action for damages for abuse of rights. Requisites a) b) c) d) of Valid Marriage Settlement In writing Signed by the parties Executed before the celebration of marriage If a party executing the settlement needs parental consent. In writing 2. at the time of its execution 3. must be signed by the testator or by the person requested by him to write his name. stating the following: i. on the left margin 4. It must be acknowledged before a notary public by the testator and the witnesses to solemnize the marriage between Ric and Gigi who were both nonmembers of the Baptist Church. consisting of the portion shared by Ric in whatever property was commonly or jointly acquired by Ric and Juliet. and (6) Action to declare the marriage of Ric and Juliet as null and void and to recover her share in her community of property with Ric. (3) Judicial separation of property. the guardian appointed by the court must be made a party to the settlement Registration (to bind 3rd persons) Page 25 of 230 f) Page 208 of 230 . Attested & subscribed by three or more credible witnesses in the presence of the testator and of one another 3. (2) Receivership of the conjugal or community property. in the presence of the instrumental witnesses iii. I will file the ff. Each and every page of the will must be numbered correlatively in letters placed on the upper part of each page 5. TESTAMENTARY CAPACITY: a) All persons who are not expressly prohibited by law b) 18 years old and above c) Of sound mind. or caused some other person to write his name. In a language or dialect known to the testator B) ADDITIONAL REQUISITES FOR VALID NOTARIAL WILL: 1. DEFINITION OF WILL.except: 1) legal separation (ACP/CPG is dissolved) 2) revival of former property regime upon reconciliation 3) petition of one spouse for separation in case of abandonment or failure to comply with marital obligations 4) judicial dissolution of regime: joint petition or petition by one spouse for cause. Property Relations Between Spouses 1. The fact that the testator signed the will and every page. except the last. the parent/guardian whose consent is needed must be made a party to the agreement e) If the party executing the settlement is under civil interdiction or any other disability. (4) Petition for sole administration of the conjugal or community property. The number of pages used upon which the will is written ii. KINDS OF WILLS: a) Notarial – an ordinary or attested will b) Holographic – a handwritten will 4. and by his express direction 2.

1149) from the time marriage is not solemnized on the fixed date ii. -Judicially declared void on grounds other than Art. because contracted by a spouse before prior void marriage is judicially declared void – by operation of law if donee-spouse contracted subsequent void marriage in bad faith. contained in the marriage settlement which are automatically rendered void if the marriage does not take place). trust) for the benefit of Juana with Juan as trustee of one-half undivided or ideal portion of each of the two lots. of which they cannot be deprived by the testator. relying on the transfer certificate of title showing that Juan is the registered owner of the land. moral damages for the mental anguish. made in a will executed in the form prescribed by law b) Legal or Intestate – that which takes place by operation of law in the absence of a valid will c) Mixed – that which is effected partly by will and partly by operation of law 3. Marriage without the needed parental consent iii. or to the portion of such estate not disposed of by will Page 207 of 230 -if subsequent marriage is void pursuant to Art. Donations by Reason of Marriage a) Requisites 1) made before marriage 2) in consideration of marriage 3) in favor of one or both of the betrothed b) Before Marriage General Rule: Future spouses cannot donate to each other more than 1/5 of their present property (excess shall be considered void) Exception: If they are governed by ACP c) During Marriage General Rule: Spouses cannot donate to each other. rights and obligations to the extent of the value of the inheritance of a person are transmitted through his death to another or others either by his will or by operation of law 2. moral shock and wounded feelings she had suffered. Therefore. directly or indirectly (donations made by spouses to each other during the marriage are void) Exception: Moderate gifts on the occasion of any family rejoicing d) Grounds to Revoke Donation Propter Nuptias i. Juana can file an action against Juan for partition or termination of the co-ownership with a prayer that the lot sold be adjudicated to Juan. KINDS OF SUCCESSION a) Testamentary – that which results from the designation of an heir. 52 and 53. Juana may claim actual or compensatory damage for the loss of her share in the land. 40 in relation to Arts. Juana can file an action for damages against Juan for having fraudulently sold one of the two parcels which he partly held in trust for Juana’s benefit. If marriage is judicially declared void. Donee commits acts of ingratitude e) Prescriptive Period for Filing Action for Revocation of Donation Propter Nuptias If marriage is not celebrated (except donations i. exemplary damage by way of example for the common good. KINDS OF HEIRS: a) Compulsory – those who succeed by force of law to some portion of the inheritance. Marriage is not celebrated or is judicially declared void ab initio ii. Juana has no cause of action against the buyer who acquired the land for value and in good faith. In legal separation and donee is the guilty spouse vi. However. Juana’s suit to have herself declared as sole owner of the entire remaining area will not prosper because while Juan’s act in selling the other lot was wrongful. If it is with a resolutory condition and the condition is complied with v.3. SUCCESSION 1. it did not have the effect of forfeiting his share in the remaining lot. 52 and 53 – 5 years from finality of judicial declaration of nullity (if action to recover property) Page 26 of 230 . it depends: 2. 40 in relation to Arts. DEFINITION OF SUCCESSION It is a mode of acquisition by virtue of which the property. except by a valid disinheritance b) Voluntary or Testamentary – those who are instituted by the testator in his will. and attorney’s fees. in an amount predetermined by law. anxiety. Marriage is annulled and donee in bad faith iv. to succeed to the portion of the inheritance of which the testator can freely dispose c) Legal or Intestate – those who succeed to the estate of the decedent who dies without a valid will.5 years (Art. and the remaining lot be adjudicated and reconveyed to her.

v. In 1996. 1. Bar Question (1998). c) The doctrine of laches. unless the trustee fraudulently and successfully conceals the facts giving rise to the trust. For if made by a party. but the trust is rebuttable by proof of a contrary intention of the persons from whom the consideration comes. will the suit prosper? (2%) iv. charges and expenses upon community property e) Taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse used by the family f) Expenses for professional or vocational course g) Antenuptial debts which redounded to the benefit of the family h) Donated or promised to common legit children for profession. The reason is there is a presumption that a gift or donation was intended in favor of the child. 7. and for the purpose of the rule. b) Exceptions: No trust is implied if the person to whom the legal estate is conveyed is a legitimate or illegitimate child of the payor. 8. Charges upon the ACP a) Support of spouses. no trust is created. General Rule under Article 1448 a) A resulting trust arises in favor of a person from whom a consideration comes for a reconveyance of property (real or personal) to another. quasi-delicts in absence of separate property j) Expenses of litigation between spouses unless the suit is found to be groundless Page 27 of 230 Answers: 1. vocational course or self improvement i) Other ante-nuptial debts. The trust results only in favor of one advancing the consideration. Juan and his sister Juana inherited from their mother two parcels of farmland with exactly the same areas. When marriage takes place without the required parental consent – 5 years If resolutory condition is complied with – 5 years from happening of condition When marriage is annulled and donee in bad faith – 5 years from finality of decree If donee commits an act of ingratitude – 1 year from donor’s knowledge of that fact In cases of legal separation – 5 years from the time the decree of separation has become final Absolute Community 1. 9. Article 1456 – Property acquired through mistake or fraud The mistake referred to in this article is a mistake made by a third person. b) Laches constitutes a defense to a suit to declare and enforce an implied trust. suppose Juana files a complaint to have herself declared sole owner of the entire remaining second lot. however. 2. vi. What rights of action. Exclusions from Community Property a) Property acquired during the marriage by gratuitous title and its fruits except if its expressly provided by the donor. testator or grantor that they shall form part of the community property b) Property for personal and exclusive use of either spouse (jewelry forms part of the ACP) c) Property acquired before the marriage by one with legitimate descendants by former marriage and its fruits and income 3. When an actual contrary intention is proved.spouse. express repudiation is not required. support of illegitimate child and liabilities for crime. not that made by a party to the contract. Since the two lots have the same area. Juan sold to an innocent purchaser one parcel in its entirety without the knowledge and consent of Juana. and such proof may be by parol evidence. Effect of Laches a) Implied trust may be barred not only by prescription but also by laches. there was created an implied trust (a resulting Page 206 of 230 . the Torrens certificates of title covering both lots were placed in Juan’s name alone. When. does Juana have against and/or the buyer? (3%) 2. the Torrens title to the two parcels pf land were placed in Juan’s name alone. vii. their common children and legitimate children of either spouse b) Debts and obligations contracted during the marriage by designated administrator . contending that her brother had forfeited his share thereof by wrongfully disposing of her undivided share in the first lot. if any. System of Absolute Community: The community property consists of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter. For convenience. and wrongfully kept for himself the entire price paid. is less strictly applied between near relatives than when the parties are strangers to each other. both spouses or by one with the consent of the other c) Debts and obligations contracted by either spouse without the consent of the other to the extent that it benefited the family d) Taxes. for convenience. Similarly. and not in favor of one for whose benefit the purchase may have been made.iii. liens. the fraud referred to is extra-contractual.

fruits and income of separate properties of spouses ii. it was ruled that the tenyear prescriptive period should be counted not from the registration of the simulated sale. the law creates a constructive trust in favor of the defrauded party. Net remainder of the ACP is divided equally between husband and wife 5. Adjudication of conjugal dwelling and custody of common children Conjugal Partnership of Gains 1. e) but where the rights of the beneficiary are recognized by the trustee. In the computation of time necessary for prescription. but from the date of recording of the release of the mortgage. This rule. the action is imprescriptible. Prescriptibility of Action for Reconveyance based on Implied Trust a) An action for reconveyance of property (real or personal) to enforce an implied trust in one’s favor prescribed in ten (10) years from the time the right of action b) Accrues (the action being based upon an obligation created by law). however. Debts and obligation of ACP are paid 3. The issuance of said certificate of title constitutes constructive notice to the public.If the community property is insufficient to cover all these liabilities. the matter should be brought to court and the court will give the authority. Administration of community property belongs to both spouses jointly. d) If one spouse acts without the consent of the other or without court approval. f) Continuous recognition of a resulting trust precludes any defense of prescription or laches in a suit to declare and enforce the trust. the present possessor may complete the period necessary for prescription by tacking his possession to that of his grantor. 5. she must do so within 5 years from the date of the contract implementing the husband’s decision. products. where the ownership of the land was sold fictitiously to avoid a foreclosure of mortgage. However. b) If the wife decides to go to court. c) Both spouses must approve any dispositions or encumbrances and consent of the other spouse regarding the disposition must be in writing. The latter is granted the right to recover the property fraudulently registered within a period of ten years. g) When a person through fraud succeeds in registering a land in his name. the ten-year prescriptive period commences to run from the time the trustee begins to assert his title or to hold adversely. which is deemed to have taken place from the inscription of the instrument and/or issuance of the new certificate of title by virtue thereof. Page 205 of 230 . Termination of ACP/CPG a) Death b) Legal separation c) Annulment d) Judicial separation of property during marriage 6. the transaction shall be construed as a continuing offer on the part of the consenting spouse and the 3rd person which may be perfected as a binding contract upon acceptance by the spouse or court approval. Everything acquired by spouses through chance Page 28 of 230 6. a) In cases of disagreement. on which date the cestui que trust was charged with the knowledge of the settlement of the mortgage obligation. therefore. as when the trustee files an ejectment suit against the beneficiary. c) Where the action for conveyance of real property is based on constructive trust resulting from its fraudulent registration in the name of another (see Article 1456). such disposition/encumbrance is void. But if the legitimate owner of the subject property. the spouses shall be solidarily liable for the unpaid balance with their separate properties. which was fraudulently registered in the name of another. d) In another case. the action may be filed from the discovery of the fraud or notice thereof. otherwise. System of Conjugal Partnership of Gains a) The spouses contribute the following to a common fund: i. (See Article 1456). from the moment the law creates the trust because the socalled trustee does not recognize any trust and has no intention to hold for the beneficiary. Procedure for Dissolution of ACP 1. The action for reconveyance is in reality an action to quiet title. if proper. or when he registers the deed of assignment of property to him and secures the cancellation of the certificate of title in the name of the former owner and the issuance of new certificate of title in his own name. or when he sells portions of the property. the constructive notice rule cannot be applied. the decision of the husband prevails. 9. Remains of the separate properties of the spouses are returned to the owner 4. however. that is. Inventory of all properties 2. Presumptive legitimes of children are delivered 6. 4. Proceeds. applies only where there is privity between successive possessors. except those falling under par. the attainment of the purpose for which the trust was created. had always been in possession thereof. Everything acquired by spouses through their efforts iii.

Livestock in excess of what was brought to the marriage vii. liens. When is an implied trust converted to express trust? An implied trust may be converted to an express trust by the recognition by the implied trustee of the right to the property of the owner. therefore. Those acquired through occupation vi. That acquired during the marriage gratuitously iii. Charges upon the CPG a) Support of the spouses. That acquired by redemption. Express trusts disable the trustee from acquiring for his own benefit the property committed to his management or custody at least while he does not openly repudiate the trust and makes such repudiation known to the beneficiary iv. expenses upon conjugal property e) Taxes and expenses for mere preservation of separate property f) Expenses for professional. He has performed open and unequivocal acts of repudiation amounting to an ouster of the cestui que trust 2. Thus. Such positive acts of repudiation have been made known to the cestui que trust The evidence thereon should be clear and conclusive. The possession of a trustee is in law possession of the cestui que trust and. 3. Trustee may claim title by prescription founded on adverse possession where it appears that: 1. and The period fixed by law has prescribed (the period commences to run from and after said repudiation and the knowledge thereof by the cestui que trust. 4. Fruits of conjugal property due or received during the marriage and net fruits of separate property iv. and continuous possession of a land adversely to the trust. work or profession of either or both spouse iii. their common children and legit children of either spouse b) Debts and obligations contracted by one without the consent of the other to the extent that the family benefited c) Debts and obligations contracted during the marriage by administrator. public. Those acquired during the marriage with conjugal funds ii. No prescription shall run in favor of a co-owner against his coowners or co-heirs as long as he expressly or impliedly recognizes the co-ownership iii. That purchased with exclusive money of spouse What Constitutes CPG i. Share in the hidden treasure v. 5. unless there is concealment of the fact giving rise to the trust b) Exclusive Property in CPG i.Created by the intention (through direct and positive acts) of the parties Cannot be proved by parol evidence when it concerns an immovable or any interest therein In order that laches or acquisitive prescription may bar an action to enforce it. barter or exchange with exclusive property iv. a third person who holds actual. both spouses or one with the consent of the other d) Taxes. acquires title to the land by prescription as against such trust. vocational or self-improvement courses of either spouse g) Antenuptial debts to extent family benefited h) Value of what is donated or promised to common legit children for professional. industry. it cannot be a good ground for title by prescription ii. Those acquired by chance c) 4. vocation or self improvement courses i) Expenses of litigation 3.spouse. Those obtained from labor. Page 204 of 230 . an express repudiation made known to the beneficiary is required Comes into being by operation of law independent of the particular intention of the parties Can be proved by oral evidence when it concerns an immovable or any interest therein Laches constitutes a bar to actions to enforce it. 2. Acquisition of property through prescription a) By trustee: i. Procedure for Dissolution of CPG a) Inventory of all property b) Amounts advanced by CP as payment for personal debts and obligations of either spouse are credited c) Reimbursement for use of exclusive funds d) Debts and obligations of the CP are paid e) Remains of exclusive properties are returned f) Indemnify loss of deterioration of movables belonging to either spouse used for the benefit of the family Page 29 of 230 b) By third persons: Though the statute of limitations does not run between trustee cestui que trust as long as the trust relation subsists. charges. open. it does not run between the trust and third persons. That brought into the marriage as his/her own ii.

the same shall be taken to have been made only upon the filing of his answer to the complaint. Will your answer be the same if Bob died before August 3. 2. Distinction between Express and Implied Trusts Express Trust Implied Trust Page 203 of 230 . Yes. expressly or impliedly evincing a direct intention to create a trust by the construction of equity in order to satisfy the demands of justice. or which are super induced on the transaction by operation of law. Art. trust can never result from acts violative of the law. in which case. In 1975. 2. it is a trust not created by words. Laches applies from the trustee openly denies or repudiates the trust and the beneficiary is notified thereof. 119.00 while the house.000. the property relations that should be applied as regards the property of the spouses is the system of relative community or conjugal partnership of gains (Art. or in its more restricted sense. without being expressed. the husband and the wife place in a common fund the fruits of their separate property and the income from their work or industry (Art. At that time. in a more restricted sense and as contra-distinguished from a resulting trust. Distinction between ACP and CPG ACP All the properties owned by the spouses at the time of marriage become community property CPG Each spouse retains his/her property before the marriage and only the fruits and income of such properties become part of the conjugal properties during the marriage Upon dissolution of the partnership. Civil Code). but not expressed in the deed or instrument of conveyance. the house constructed form his own savings in 1981 during the subsistence of his marriage with Issa is conjugal property and not exclusive property in accordance with the principle of “reverse accession” provided for in Art. Bob died.000. the lot was worth P800. However. the separate property of the spouses are returned and only the net profits of the partnership are divided equally between the spouses of their heirs a) b) c) d) e) f) g) h) Mutual agreement of all the parties Expiration of the term Fulfillment of the resolutory condition Rescission or annulment Physical loss or legal impossibility of the subject matter of the trust Order of the court Merger Accomplishment of the purpose of the trust Upon dissolution and liquidation of the community prop what is divided equally between the spouses or their heirs is the net remainder of the properties of the ACP 9. he having acquired the same by lucrative title (par. By conjugal partnership of gains. Implied Trusts 1. Concept: Implied trusts are those which. independently of the particular intention of the parties. are deducible from the nature of the transactions as matter of intent. Civil Code). b) On the other hand. Assuming that the relative values of both assets remained at the same proportion: 1. in 1981. Effect of Laches a) Cestui que trust is entitled to rely upon the fidelity of the trustee. he constructed a two-room bungalow with savings from his own earnings. As such. then the law that governs is the New Civil Code (Persons). In this instance. 2. when it does not appear when the trustee repudiated existence of the fiduciary relation. 158. 1988? Answers: 1. the lot inherited by Bob in 1975 is his own separate property. The doctrine of implied trusts is founded upon equity. Since Bob and Sofia got married in 1970. In 1970. Bob inherited from his father a residential lot upon which.00. State whether Sofia can rightfully claim that the house and lot are not conjugal but exclusive property of her deceased son. In 1989. then the property relations that will Page 30 of 230 3. it does not arise by agreement or intention but by operation of law Bar Question (1998). Civil Code. it is raised by implication of law and presumed always to have been contemplated by the parties. Since Bob and Issa contracted their marriage way back in 1970. Civil Code). Sofia. the answer would still be the same. 2. the intention as to which is to be found in the nature of their transaction. when finished. Kinds: a) Resulting trust – a trust whish is raised or created by the act or construction of law. is matters of equity. survived only by his wife Issa and his mother. Examples are those found in Articles 1448 to 1455 of the NCC b) Constructive trust – a trust raised by construction of law. or is otherwise plainly put on guard against the trustee.g) h) i) Net remainder of conjugal property is divided equally Delivery of children’s presumptive legitimes Adjudication of conjugal dwelling and custody of children 4. 148. cost P600. Bob and Issa got married without executing a marriage settlement. 142.

As Bob and Issa contracted their marriage way back in 1970. Termination Page 202 of 230 govern is still the relative community or conjugal partnership of gains (Art. with agreement of beneficiaries. 2. prescription is permitted) 4. Judicial separation of property may either be voluntary or for sufficient cause. Loss of parental authority as decreed by the court iv. It will not matter if Bob died before or after August 3. Civil interdiction of the spouse of petitioner ii. Acceptance of Trust by the Beneficiary a) This is essential to the creation and validity of a trust.e) The trustee cannot acquire the property held in trust by prescription as long as the trust is admitted (if he repudiates and this is made known to the party involved. Judicial declaration of absence iii. 6. Unions Governed by Article 147 Page 31 of 230 . When may a trustee sue as such? Before a trustee may sue or be sued alone as such. his acceptance of the trust is not necessary to its existence and validity. b) Acceptance is presumed if the granting of benefit is purely gratuitous (no onerous condition) EXCEPT if there is proof that he really did not accept. and on satisfaction of all legal liabilities growing out of the acceptance of the trust. the separation of property between the spouses during the marriage shall not take place except by judicial order. May a trustee of a trust estate be personally liable? In the absence of an express stipulation in a contract entered into by a trustee for a corporation that the trust estate and not the trustee should be liable on the contract. c) Unless a contrary intention appears in the instrument constituting the trust. acceptance of trust by a trustee is necessary to charge him with the office of the trustee and the administration of the trust and to vest the legal title in him. 5. the courts will appoint a trustee to fill the office that he declines. Civil Code). a) Sufficient Cause for Judicial Separation of Property i. 1988 (effectivity date of the Family Code). the trustee is liable in its individual capacity. Declination. d) Renunciation of a trust after its acceptance can only be by resignation or retirement with court approval. When the spouse who has abandoned the conjugal home returns and resumes common life with the other v. Grounds for Revival of Former Property Regime i. Civil Code) Separation of Property of the Spouses 1. or Renunciation by the Trustee a) In the case of an express trust. declination or refusal or disqualification of a trustee does not operate to defeat or void the trust. 8. the property relation that governs them is still the conjugal partnership of gains. Rule: In the absence of an express declaration in the marriage settlements. e) When a person administering property in the character of a trustee inconsistently assumes to be holding in his own right. When spouses agree to revive their former property regime 4. 158. When the absentee spouse reappears iii. Separation in fact for one year and reconciliation is highly improbable 3. nor does it operate to vest legal as well as equitable title in the beneficiary. When civil interdiction of the prisoner-spouse terminates ii. b) One designated or appointed as trustee may decline the responsibility and thereby be free from any legal or equitable duty or liability in the matter. Acceptance. (Art. Ground for Transfer of Administration of Exclusive Property of Either Spouse a) One spouse becomes guardian of the other b) One spouse judicially declared absent c) One spouse sentenced to penalty with civil interdiction d) One spouse becomes a fugitive from justice 5. this operates as renunciation of the trust and the beneficiaries of the property are entitled to maintain an action to declare their right and remove the unfaithful trustee. Abandonment or failure to comply with family obligation v. c) Acceptance by the beneficiary of a gratuitous trust is not subject to the rules for the formalities of donations. what matters is the date when the marriage was contracted. When parental authority is judicially restored to the spouse previously deprived thereof vi. However. since if he declines the trust. it is essential that his trust be express. When the court authorizes resumption of administration by the spouse formerly exercising such power iv. 119. 7. Administrator spouse has abused authority vi.

undue influence. or through breach of a fiduciary duty. Thus. and iii. the share of the spouse who is in bad faith shall be forfeited e) In favor of their common children f) In case of default of or waiver by any or all of the common children or their descendants. iii. or through the wrongful disposition of another’s property. c) By implication. be included under the Statute of Frauds. property or industry shall be owned in common in proportion to their respective contributions. e) Creation -There must be a clear intent to create a trust. By conveyance to the trustee by an act inter vivos or mortis causa ii. d) Regarding third persons. 3. each vacant share shall belong to the respective surviving descendants g) In the absence of such descendants. Requisites a) There must be: i. Sufficiently certain beneficiaries b) The requirement that the express trust be written is only for enforceability. Remember: a) Presumption: properties acquired during the cohabitation are presumed to have been acquired through their joint efforts. Capacity a) b) c) The trustor must be capacitated to convey property The trustee must be capacitated to hold property and to enter into contract The beneficiary must be capacitated to receive gratuitously from the trustor By admission of the trustee that he holds the property only as a trustee Rules: • Only properties acquired by the parties through their actual joint contribution of money. an oral agreement is valid and enforceable between the parties. 2. such share belongs to the innocent party 6. Administration of the Trust a) The trustee must file a bond b) The trustee must make an inventory of the real and personal property in trust c) The trustee must manage and dispose of the estate and faithfully discharge his trust in relation thereto according to law or according to the terms of the trust instrument as long as they are legal and possible d) The trustee must render a true and clear account Page 32 of 230 Page 201 of 230 . the duty to convey the property arises because it was acquired through fraud. by analogy. without the consent of the other. mistake. not for validity between the parties. work or industry b) Party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former’s efforts consisted in the care and maintenance of the family and of the household c) Parties cannot encumber or dispose by acts inter vivos their share in the property acquired during their cohabitation and owned in common. for a trust over personal property.a) b) When a man and a woman capacitated to marry each other live exclusively with each other as husband and wife without the benefit of marriage A man and a woman living together under a void marriage (inapplicable to bigamous marriage) Rules: • • Wages and salaries earned by either spouse during the cohabitation shall be owned by the parties in equal shares Properties acquired by them through their joint work or industry during the cohabitation shall be governed by the rules of co-ownership Express Trusts ground that he would be unjustly enriched if he were permitted to retain it. A competent trustor and trustee. i. hence. Unions Governed by Article 148 a) Bigamous marriages b) Adulterous relationships c) Relationships in a state of concubinage d) Relationships where both man and woman are married to other persons e) Multiple alliances of the same married man 1. An ascertainable trust res. no particular or technical words are required. until after termination of cohabitation d) In case of void marriage – if only one party is in good faith. ii. the trust must be in public instrument registered in the Registry of Property if it concerns real property. duress. Article 1443 may.

work or industry. Luis and Rizza now decide to terminate their cohabitation and they ask you to give them your legal advice on the following: a. properties acquired while they lived together shall be presumed to have been obtained by their joint efforts.000 was recently purchased for the same amount by the couple. and takes charge of the household chores. In the absence of proof to the contrary. P200. A car worth P100. Rizza is not employed. c) As fiduciary – A trustee. Beneficiary or cestui que trust or the person has an equitable interest in the property and enjoys the benefit of the administration of the trust by the trustee • In the absence of proof to the contrary contributions and the share of the parties to the properties acquired during the cohabitation are presumed equal • If one party is validly married to another: o o His/her share in the co-owned properties will accrue to the ACP/CPG of his/her existing valid marriage If the party who acted in bad faith is not validly married to another. his/her share shall be forfeited in the same manner as that provided in Art 147 11. 12. however. Of the P500. What would your answer be (to the above question) had Luis and Rizza been living together all the time. A resulting trust – which arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest in the property. From the viewpoint of the creative force bringing it into existence: a) Express trust – which can come into existence only by the manifestation of an intention to create it by the one having legal and equitable dominion over the property made subject to it.000 being used by the common law spouses. In fine. Art. for the benefit of another. their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules of co-ownership.000 had come from the sale of palay harvested from the hacienda owned by Luis and P300. a trustee has been regarded as an agent of beneficiaries of the trust at least for certain purposes. with certain powers and subject to certain duties. both 26 years of age and single. live exclusively with each other as husband and wife without the benefit of marriage. since 20 years ago.000 had been part of the fruits received during the period of cohabitation from their separate property.000 from the rentals of a building belonging to Rizza. After living together for a little over twenty years. should the bank deposit of P200. OR ii.b) c) Trustee or the person who takes and holds the legal tile to the trust property. the house and lot valued at P500. such as for the purpose of imputing to the beneficiaries of the trust notice given to the trustee. How. From the viewpoint of whether it becomes effective after the death of the trustor or during his life: a) Testamentary trust b) Trust inter vivos (sometimes called “living trusts”) B. like an executor or administrator.000 presently deposited in a bank.000 and the car worth P100.e. Luis is gainfully employed. is founded on the presumed intention of the parties. 147 of the Family Code provides in part that when a man and woman who are capacitated to marry each other. Luis was able to save from his salary earnings during that period the amount of P200. and shall be owned by them in equal shares. although subject to the terms of the trust and law of trusts. holds an office of trust. i. but he acts for himself in the administration of the trust estate. A party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former’s Page 33 of 230 . fixed and/or limited by law.000 be allocated to them? b. b) As agent – In some cases. live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage. b) Implied trust – which comes into existence either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of and even contrary to any such intention.000. Character of Office of Trustee a) As principal – The trustee is not an agent of the trust estate or of the cestui que trust. it may either be: i. The duties of the latter are. whereas those of trustee of an express trust are usually governed by the intention of the trustor or of the parties. under the law. stays at home. was donated just months ago to Rizza by her parents. if established by contract. Classification of Trust A..000 used by the common-law spouses to purchase the property. under a valid marriage? Answer: a. the sum of P500. A house and lot worth P500. A constructive trust – which is imposed where a person holding title to property is subject to an equitable duty to convey it to another on the Page 200 of 230 *The same rules on forfeiture shall apply if both parties are in bad faith Bar Question (1997): Luis and Rizza. however.

embracing a set of rights and duties fiduciary in character which may be created by a declaration without consideration. Suit between members of the same family – it should appear from the verified complaint or petition that earnest efforts towards a compromise have been made but failed a) Allegation of “earnest efforts” is JURISDICTIONAL. 2. Distinguished from Donation a) A trust is an existing legal relationship and involves the separation of legal and equitable title. upon mere acquiescence in the formation of the trust and acceptance under the second paragraph of Article 1311 of the Civil Code. 142. among other ascendants and descendants and among brothers and sisters. or executor does not have legal title to the property. administrator. Civil Code). the net gains or benefits obtained by either or both spouse shall be divided equally between them (Art.000 shall be divided equally between Luis and Rizza.000 shall be divided equally between Luis and Rizza. whereas a gift is a transfer of property and. ii. b) BUT this rule is inapplicable to the following cases i. a stipulation pour autrui can arise only in the case of contracts. a guardian.efforts consisted in the care and maintenance of the family and of the household. 4. Thus: 1. b) A trust constituted between two contracting parties for the benefit of a third person is not subject to the rules governing donations of real property. 148. Family relations include those between husband and wife. with each co-owner being a trustee for each of the others. 2.000 donated to Rizza by her parents shall be considered her own paraphernal property. Co-ownership as a Trust A co-ownership is a form of a trust. iv. Luis gets 2/5 while Rizza gets 3/5 of the P500. having been acquired by lucrative title (par. 3. Hence. the salary of Luis deposited in the bank in the amount of P200. Distinguished from Agency A trust and an agency are distinguishable on the basis of the nonrepresentative role of the trustee and the representative role of the agent. Parties to a Trust a) Trustor or the person who creates or established the trust. The property relations between Luis and Rizza. 2. Art. b) A trust refers to specific property. b. the car worth P100. whereas a contract is a legal obligation based on an undertaking supported by a consideration. and upon dissolution of the marriage or of the partnership. Distinguished from Stipulation Pour Autrui a) A trust may exist because of a legal provision or because of an agreement. 5. 8. full or half blood. iii.000 having been acquired by both of them through work or industry shall be divided between them in proportion to their respective contribution. Civil Code). 2. however. except in the case of a gift in trust. involves a disposition of both legal and equitable ownership. 10. a stipulation pour autrui refers to specific property or to other things. the same having been donated to her by her parents. 7. without legal title to the property subject to the bailment.000. Distinguished from Guardianship or Executorship In trust. vi. the trustee or holder has the legal title to the property. parents and children. if it is absent.000 and the house and lot valued at P500. Thus: 1. The Family 1. their marriage having been celebrated 20 years ago (under the Civil Code) shall be governed by the conjugal partnership of gains. Definition of Family Home Page 34 of 230 Page 199 of 230 . v. the car worth P100. products and fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance. The beneficiary of a trust may demand performance of the obligation without having formally accepted the benefit of the trust in a public document. the house and lot valued at P500. in consonance with the rules on co-ownership.000 shall be exclusively owned by Rizza. Civil status or persons Validity of marriage or legal separation Any ground for legal separation Future support Jurisdiction of courts Future legitime 3. under which the husband and wife place in a common fund the proceeds. 9. 6. the wages and salaries of Luis in the amount of P200. whereas it is a characteristic of a bailment that the bailee has possession of. Distinguished from Contract a) A trust always involves an ownership. which obligation may or may not be fiduciary in character. the court can dismiss the case title in the trustee.

and Page 35 of 230 . Laches and Prescription Distinguished PRESCRIPTION LACHES Concerned with the Concerned with the fact of delay fact of delay A matter of time Principally a question of inequity founded on some change in the condition of the property or the relation of the parties Statutory Not statutory Applies to law Applies to equity Based on a fixed time Not based on a fixed time d) e) f) TRUSTS 1. a family home is deemed constituted from the time it is occupied as a family residence Actual value of the family home shall not exceed P300. iv.ii. a) It is constituted jointly by the husband and the wife or by an unmarried head of the family It is the dwelling house where they and their family reside. incurred prior to constitution of home iii. Attachment Exceptions to Exemption of Family Home (Article 155) i. the court shall decide iv. The spouse of the person who constituted the family home must also give his/her written consent iii. e) It arises as a result of a manifestation of intention to create the relationship. Assignment or Encumbrance of the Family Home i. Parents. Donation. Debts secured by mortgages on the premises iv. b) It is a right. Execution 2. iii. the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. 2. Distinguished from Bailment A delivery of property in trust necessarily involves a transfer of legal title. and the land on which it is situated Under the FC. The person who constituted the same must give his/her written consent ii. architects. c) As it is founded in equity. mechanics. His claim is not among those excepted under Article155. with the legal Page 198 of 230 g) Beneficiaries of a Family Income i. to the beneficial enjoyment of property the legal title to which is in another. it can never result from act violative of law. ii. Non-payment of taxes ii. Debts due laborers. i) Requisites for Creditor to Avail of the Right under Article 160 i. enforceable in equity. d) It involves the existence of equitable duties. or at least a separation of equitable interest and legal title. Husband and wife. Injury or prejudice to the defendant in the event relief is accorded to the complainant. Characteristics of Trust a) It is a relationship. c) It is a relationship with respect to property. imposed upon the holder of the title of the property to deal with it for the benefit of another. builders. A majority of the beneficiaries of legal age must also give their written consent In case of conflict.000 (RURAL) [Article 157] The Family Home is Exempt from: 1. ascendants.000 (URBAN) and P200. b) It is a relationship of fiduciary character. not one involving merely personal duties. Delay in asserting complainant’s rights after he had knowledge of the defendant’s conduct and after he has had an opportunity to sue. brothers & sisters living in home and depend on head of family for support h) Sale. Definition of Trust: a) Trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property. or unmarried head of the family ii. materialmen and others who have rendered service or furnished materials for the construction of the building b) c) 2. 3. He must be a judgment creditor. Forced Sale 3. alienation. Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit.

iii. ii. Children by Artificial Insemination Rule: A child conceived by artificial insemination is considered legitimate under ii.iii. Action or inaction based thereon of such character as to change the position or status of the party claiming the estoppel to his injury. Laches 1. the latter is precluded from asserting his legal title or interest therein. There will be a hearing on the motion where the creditor must prove that the actual value of the family home exceeds the maximum amount fixed by the FC either at the time of its constitution or as a result of improvements introduced thereafter its constitution. The government is not estopped by mistake or error on the part of its officials or agents. in good faith. upon the conduct or statement as to the facts in question. The artificial insemination is made on the wife. of the real facts b) In relation to the party claiming the estoppel i. giving rise to the situation complained of. j) Procedure to Avail of Right under Article 160 i. could or should have been done earlier. the erroneous application and enforcement of the law by public officers does not prevent a subsequent correct application of the statute. An estoppel operates on the parties to the transaction out of which it arises and their privies.legitimate or illegitimate b) adoption 2. If the family home is sold for more than the value allowed. iii. or prejudice 10.conceived or born during the marriage Rule: the presumption is always in favor of legitimacy 3. Reliance. actual or constructive. b) The party precluded must intend that the other should act upon the facts as misrepresented. iii. Nature of Laches a) Laches is failure or neglect. If the creditor proves that the actual value exceeds the maximum amount the court will order its sale in execution. The creditor must file a motion in the court proceeding where he obtained a favorable for a writ of execution against the family home. by exercising due diligence. b) Elements of Laches i. it is negligence or omission to assert a right within a reasonable time. not on another woman The artificial insemination on the wife is done with the sperm of the husband or of a donor. plus all the costs of execution c) The excess. Intent or at least expectation that this conduct shall be acted upon by at least influence the other party. Page 197 of 230 the following conditions: i. iv. Conduct on the part of the defendant or of one under whom he claims. if any. Legitimate children . c) The party misled must have been unaware of the true facts. Filiation of Children a) by nature . to do that which. Lack of knowledge or of the means of knowing the truth as to the facts in question. . for an unreasonable and unexplained length of time. provided all these requisites are present: a) There must be fraudulent representation or wrongful concealment of facts known to the party estopped. He has reasonable grounds to believe that the family home is worth more than the maximum amount fixed in Article 157 ii. ii. detriment. shall be delivered to the judgment debtor Paternity and Filiation 1. Knowledge. the proceeds shall be applied as follows: a) First. and d) The party defrauded must have acted in accordance with the misrepresentation. and Page 36 of 230 iii. or both the husband and a donor The artificial insemination has been authorized or ratified by the spouse on a written instrument executed and signed by them before the birth of the child. Estoppel against Owner When in a contract between third persons concerning immovable property. one of them is misled by a person with respect to the ownership of real right over the real estate. warranting a presumption that the party entitled to assert it either has abandoned or declined to assert it. the obligations enumerated in Article 155 must be paid b) Then the judgment in favor of the creditor will be paid.

by conduct or by acceptance of benefits ii. he is not in estoppel b) Equitable Estoppel or Estoppel in Pais . by silence iv. so that he will be prejudiced if the former is permitted to deny the existence of such facts. Elements of Estoppel in Pais iv. If its proved that for biological or other scientific reasons. except in the case of children conceived through artificial insemination iii. or c. the person estopped must be capacitated. violence. by omission v. Physical incapacity of the husband to have sexual intercourse with his wife b. the written authorization or ratification of either parent was obtained through mistake. he is denied the right to plead or prove an otherwise important fact. or by his silence when he ought to speak out. and such other rightfully relies and acts on such belief. It was physically impossible for the husband to have sexual intercourse with his wife within the first 120 days of the 300 days which immediately preceded the birth of the child because of: a. There may be estoppel: i. The fact that the husband and wife were living separately in such a way that sexual intercourse was not possible. notarizes the same. The written instrument is recorded in civil registry together with the birth certificate of the child 4. In case of children conceived through artificial insemination. who is not a party to the instrument. If the child was born after the death of the husband a) Grounds to Impugn the Legitimacy of the Child: i. there should have been a duty or obligation to speak • A mere promise to perform or to omit at some future time does not necessarily result in estoppel (promissory estoppel). intentionally or through culpable negligence. but a minor is clever enough to deceive others. the promise must have been relied upon and prejudice would result unless estoppel is applied 9. fraud.asserted in it. It takes place in a situation where because if a party’s action or omission. the child could not have been that of the husband. intimidation or undue influence Page 37 of 230 a) In relation to the party sought to be estopped i. Page 196 of 230 . estoppel may result • If a person.It arises when one by his acts. induces another to believe certain facts to exist. Serious illness of the husband which absolutely prevented intercourse ii. Impugning the Legitimacy of a Child General Rule: Husband alone can impugn the legitimacy of a child Exception: The heirs of the husband may impugn the child’s filiation in the following cases: i. Presumption regarding the child’s filiation if the marriage is terminated and the mother contracts another marriage within 300 days: Termination of 1st marriage 2nd marriage 180 days after 2nd marriage 300 days after termination of 1st marriage presumed conceived during the 1st marriage presumed conceived during the 2nd marriage 5. a written instrument is necessary for there to be estoppel by deed Doctrines: • If the deed or instrument is null and void because of the contract. for this to exist. Conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than and consistent with those which the party subsequently attempts to assert. there is no estoppel • Ordinarily. If the husband dies before the expiration of period for filing the action ii. by representation or concealment iii. by laches Doctrines: • Conduct because of ignorance or mistake does not result in estoppel • Estoppel by laches bars an action to create a vested right (executory interest) but does not bar an action to protect a vested right (executed interest) • Just because a person is silent does not necessarily mean that he will be in estoppel. If the husband dies after filing without desisting iii. representations or admissions.

or from denying the truth of any material facts Page 195 of 230 iii. b) Estoppel by acquiescence is closely related to estoppel by silence. his heirs can file the action for him within 5 years form the child’s death d) If the child dies after commencing the action. from brothers and sisters Page 38 of 230 . Kinds of Estoppel a) Technical Estoppels i. Silence or Inaction a) This is sometimes referred to as estoppel by “standing by” or “laches. year ii. There must also be some element of turpitude or negligence connected with the silence by which another is misled to his injury. ascendants and in proper cases. Legitimate filiation may be proved by any of the following: a) Records of birth or final judgment b) Admission of legitimate filiation in a public document or in a private handwritten instrument and signed by the parent concerned. fraud may properly be a cause of action on account of the vitiated consent that it produces. It involves the conduct of both parties. HOWEVER. in proper cases) resides in the city or municipality where the child was born or where his birth certificate was recorded – within 1 An equitable estoppel may arise. his heirs can longer file the action after death c) If the child dies during minority in the state of insanity. ii. If the husband (or his heirs. the party is bound notwithstanding the fact that there was no such intention because the other party will be prejudiced and defrauded by his conduct unless the law treats him as legally bound. the legitimate filiation may be proved by: i. his guardian can bring the action in his behalf 7. however. 6. a person is prevented from maintaining a position inconsistent with one in which he has acquiesced. if the child’s birth was concealed from or was unknown to the husband or his heirs. Action to Claim Legitimacy a) The child can bring the action during his lifetime b) If the child dies after reaching majority without filing an action. In the former. Admissions: A party may be estopped to insist upon a claim. 5. even where there is no intention on the part of the person estopped to relinquish any existing right and frequently carries the implication of fraud. While estoppel may raised as a defense. Estoppel by record – the preclusion to deny the truth of matters set forth in a record. the period shall be counted from the discovery or knowledge of the birth of the child or of the act of registration of said birth. the party is bound because he intended to be bound. assert an objection. 8. Estoppel by deed – a bar which precludes one party to a deed and his privies from asserting as against the other party and his privies any right or title in derogation of the deed. whichever is earlier. or vice-versa – within 3 years 4. or take a position which is inconsistent with an admission which he had previously made and in reliance upon which the other party has changed his position. Rights of Legitimate Children a) Bear surname of parents b) Receive support from parents. 7. whether judicial or legislative.” Mere innocent silence will not work an estoppel. fraud presupposes an attempt to enter into a valid agreement or contract. If the husband (or his heirs) does not reside in the city or municipality where the child’s birth took place or was recorded but his residence is in the Philippines – within 2 years If the child’s birth took place or was recorded in the Philippines while the husband has his residence abroad. Open and continuous possession of the status of a legitimate child Any other evidence allowed by the Rules of Court 8. Distinguished from Fraud Estoppel exists with or without a contract. 6. Distinguished from Ratification In ratification. the action will survive and his heirs will substitute for him e) If the child is a minor or incapacitated or insane. and also to deny the facts adjudicated by a court of competent jurisdiction Example: the conclusiveness of a judgment on the parties to a case ii.b) Periods for Filing of Action to Impugn the Legitimacy of a Child b) The action to impugn the legitimacy of the child shall be brought: i. in estoppel. c) in the absence of these evidences. But one who invokes this doctrine of estoppel must show not only unjustified inaction but also some unfair injury would result to him unless the action is held barred. The period shall be counted from the knowledge of the child’s birth or its recording in the civil register.

Under the NCC. amount/character of contribution of ltd. It carries no implication of fraud. False/erroneous statement in certificate 8. praying that the latter be declared an acknowledged illegitimate son of Steve and that Joey be given his share in Steve’s estate. civil interdiction of gen. said repeal did not impair vested rights. Dina filed a case on behalf of Joey. On May 16. partner & business is continued 6. Death. 1981. Page 194 of 230 Bar Question (2005). Substitution of ltd. and imposes silence on a party only when in conscience and honesty he should not be allowed to speak. Admission of gen. or on other evidences allowed by the Rules of Court and special laws – during the lifetime of the alleged parent 2. While the Family Code has repealed provisions of the New Civil Code on proof of filiation. Partnership is dissolved other than by reason of expiry of term 2. 1993. in contemplation of law. as sole heir. Steve died on August 13. All limited partners cease to be such Amended: 1.c) 10. at birth. partner 2. been established as the truth. AMENDMENT/CANCELLATION OF CERTIFICATE Cancelled: 1. which is now being solely held by Tintin. Concept of Estoppel Estoppel is a bar which precludes a person from denying or asserting anything to the contrary of that which has. his secretary of 20 years. Tintin. It concludes the truth in order to prevent fraud and falsehood. Joey’s birth certificate does not show that Steve is his father. insolvency. Steve was married to Linda. with whom he had a daughter. leaving their legitimate daughter. Change in time as stated in the certificate for dissolution of partnership/return of contribution 9. while Linda died on December 3. according to Tintin. born on September 20. In any case. and d) Cannot be denied or disproved against the person relying thereon 2. 3. Distinguished from Waiver a) A waiver is a voluntary and intentional abandonment or relinquishment of a known right. Joey has such a cause of action against Tintin. Change in character of business 7. Rights of a) b) c) Illegitimate Children Use the surname of the mother Receive support according to the provision of the FC Receive legitimate (1/2 of that of a legitimate child) and other successional rights ESTOPPEL Estoppel 1. Estoppel (Article 1431) a) An admission. either expressed or implied. time specified 10. Admission of additional ltd. partner 4. Change in name of partnership. Joey was born an illegitimate child in 1981. While the FC has repealed this provision. 1994. partner 5. insanity. an illegitimate child may file an action to compel his recognition even after the death of the putative father when the father died during the minority of the child. a) Does Joey have a cause of action against Tintin for recognition and partition? Explain. Change in other statement in certificate Receive legitimate and other successional rights Illegitimate Children 1. Periods for Filing the Action to Establish Illegitimate Filiation a) If the action is based on the record of the birth of the child or on admission by the parent of the child’s filiation in a public document or in a private handwritten signed document –during the lifetime of the child b) If the action is based on the open and continuous possession by the child of the status of an illegitimate child. Tintin. partner 3. 1993. the right to prove his filiation in accordance with the law in force at the time. Answer: Yes. Time is fixed for dissolution of partnership. Tintin put up the defense that an action for recognition shall only be filed during the lifetime of the presumed parents and that the exceptions under Article 285 of the Civil Code do not apply to him since the said article has been repealed by the Family Code. he had acquired. Steve fathered a son with Dina. Return of contribution if no orig. Page 39 of 230 . either by the acts of judicial or legislative officers or by his own deed or representation. It involves the act or conduct of only one of the parties. whom Dina named Joey. it will not operate to prejudice Joey who has already acquired a vested right thereto. As an illegitimate child. b) Is rendered conclusive c) Upon the person making it. Joey’s birth certificate did not indicate the father’s name.

175. his action would be dimissed because the action was not transmissible to the heirs of the illegitimate child (Conde v. Prohibited a. at the time of child’s conception. Beside. In the same manner. Those due to limited partners of return of capital contributed 4. and Joey died during the pendency of the action. While it is true that capacity to inherit is determined at the time of death of the decedent and that filiation is an element of capacity to inherit. Abaya. Certificate is cancelled/amended as to set forth withdrawal /reduction of contribution 8. The fact that Joey’s birth certificate does not show that Steve was his father is of no moment. 6. retroacts to the time of the child’s birth. Transacting business with partnership c. Those due to general partner for return of capital contributed Page 193 of 230 Answer: The child is legitimate of the second marriage under Article 168(2) of the Family Code which provides that a “child born after one hundred eighty days Page 40 of 230 . Under the FC. b) The parents. Deficiency in Specific property stated as contributed but not yet contribution contributed/wrongfully returned 2. Answer: If Joey filed the action and died when the NCC was still in force. at least sufficient to cover them 2. Effect of legitimation: It confers on the child the rights of legitimate children 4. the NCC provides that when the father did not sign the birth certificate. 3. she delivered a baby. an action commenced by a legitimate child to claim his legitimate filiation is not extinguished by death. 4. In the absence of any evidence from Rose as to who is her child’s father. 1. Answer: The defenses of Tintin are not tenable. filiation is determined not at the time of death of the decedent but at the time of the birth of the child who is born with a status. LIABILITY OF LIMITED PARTNER AS CREDITOR AS TRUSTEE 1. what status does the law give to said child? Explain. release from liability if it will prejudice right of 3rd persons 7. a) Two (2) months after the death of her husband who was shot by unknown criminal elements on his way home from the office. recognition when given voluntarily by the father. But if the action was filed after the effectivity of the FC. conveyance. 7. it should not be dismissed. Rose married her childhood boyfriend. Those due to creditors. REQUITES FOR RETURN OF CONTRIBUTION OF LIMITED PARTNER: 1. Receiving any payment. 2. Legitimation takes place by the subsequent marriage of the child’s parents 3. All liabilities of partnership have been paid/if not yet paid. and seven (7) months after said marriage. Legitimation may be impugned only those who are prejudiced in their rights within 5 years from the time the cause of action accrues Bar Question (1999). Effects of legitimation retroact to the time of the child’s birth 5. Granting loans to partnership b. Right to have partnership books kept at principal place of business Right to inspect/copy books at reasonable hour Right to have on demand true and full info of all things affecting partnership Right to have formal account of partnership affairs whenever circumstances render it just and reasonable Right to ask for dissolution and winding up by decree of court Right to receive share of profits/other compensation by way of income Right to receive return of contributions provided the partnership assets are in excess of all its liabilities 6. 13 Phil 249 [1909]). Joey has a right to invoke this provision because it does not impair any vested rights (Art. or decreed by the court. DISSOLUTION OF LIMITED PARTNERSHIP Priority in Distribution of Assets: 1. c) Supposing that Joey died during the pendency of the action. Such status may subsequently change such as in legitimation. but legitimation is deemed to retroact to the time of birth. LOAN AND OTHER BUSINESS TRANSACTIONS WITH LIMITED PARTNERSHIP 1. including limited partners 2. Those due to general partner in respect to profits 6. Requisites for Legitimation a) The child was conceived and born outside of wedlock. should the action be dismissed? Explain. The FC makes this provision applicable to the action for recognition filed by an illegitimate child.b) Are the defenses set up by Tintin tenable? Explain. Legitimated children 1. Unpaid Money/other property wrongfully paid/ conveyed to him contribution on account of his contribution 9. Receiving pro rata share of partnership assets with general creditors if he is not also a general partner 2. were not disqualified by any impediment to marry each other 2. FC). Those due to limited partners in respect of their share in profits/compensation 3. 5. his name should not be disclosed therein. The law does not require such mention. Receiving/holding partnership property as collateral security b. Those due to general partner other than capital & profits 5. Consent of all members has been obtained 3. Allowed a.

civil interdiction. k. REQUIREMENTS FOR FORMATION OF LIMITED PARTNERSHIP 1.partners Name may appear in firm name Prohibition against engaging in business Retirement. The adopter is the natural parent of the child to be adopted. The adopter is the spouse of the legitimate parent of the person to be adopted 2. Of age b. When Dr. unless: i. or (4) a private handwritten document signed by the father (Article 175 in relation to Article 172 of the Family Code). or ii. insanity. matters: a. (2) a final judgment. Certificate must be filed with the SEC 4. civil interdiction. At least 16 years older than the person to be adopted. Before the petition could be heard. WHEN GENERAL PARTNER NEEDS CONSENT/RATIFICATION OF ALL LTD PARTNERS: 1." Character of business Location of principal place of business Name/place of residence of members Term for partnership is to exist Amount of cash/value of property contributed Additional contributions Time agreed upon to return contribution of limited partner Sharing of profits/other compensation Right of limited partner (if given) to substitute an assignee Right to admit additional partners Right of limited partners (if given) to priority for contributions Right of remaining gen partners (if given) or continue business in case of death. which repealed the Child and Youth Welfare Code. j. iii. Former Filipino adopting a relative by blood Alien adopting legitimate child of Filipino spouse Joint adoption by Alien and Filipino spouse of latter’s blood relative Those allowed by rules on inter-country adoption Bar Question (2001). but the legitimate family of Dr. m. g. even though it is born within three hundred days after the termination of the former marriage. Admit person as limited partner . retirement. Perez died. insolvency Right of limited partner (if given) to demand/receive property/cash in return for contribution Answer: To be able to inherit. insanity of gen partner dissolves partnership Name must appear in firm name No prohibition against engaging in business Does not have same effect. Perez is denying Nestor’s claim. l. A German couple filed a petition for adoption of a minor Filipino child with the Regional Trial Court of Makati under the provisions of the Child and Youth Welfare Code which allowed aliens to adopt. Certificate of articles of the limited partnership must state the ff. i. c. In possession of full civil capacity and legal rights c. Nestor intervened in the settlement of his father’s estate. (3) a public document signed by the father. the Family Code. In a position to support and care for his legitimate and illegitimate children. in keeping with the means of the family d. Do any act which would make it impossible to carry on the ordinary business of the partnership 3. rights transferred to legal representative following the celebration of the subsequent marriage is considered to have been conceived during such marriage. the illegitimate filiation of Nestor must have been admitted by his father in any of the following: (1) the record of birth appearing in the civil register. What evidence or evidences should Nestor present so that he may receive his rightful share in his father’s estate? 3. Adoption 1. Admit person as general partner 6. Consequently. Who May a) b) c) Not Adopt Guardian with respect to ward before final accounting Person convicted of crime involving moral turpitude Alien n. Perez. iv. came into effect.” b) Nestor is the illegitimate son of Dr. Confess judgment against partnership 4. h. Who May Adopt: Any person provided he is: a. ii. b. SPECIFIC RIGHTS OF LIMITED PARTNERS: Page 192 of 230 Exceptions (an alien may adopt): i. death. 2.unless authorized in certificate 7. Possess partnership property/assign rights in specific partnership property other than for partnership purposes 5. Do any act in contravention of the certificate 2. d. Name of partnership + word "ltd. insanity or insolvency of gen partner unless authorized in certificate 5. f. the Solicitor General filed a motion to Page 41 of 230 . claiming that he is the illegitimate son of said deceased. insolvency. retirement. e. Continue business with partnership property on death.

all partners who have not wrongfully dissolved the partnership 3. how will you rule on the motion? • Creditors have an equitable lien on the consideration paid to the retiring/deceased partner by the purchaser when retiring/deceased partner sold his interest w/o final settlement with creditors Answer: The motion to dismiss the petition for adoption should be denied. April 21. all No participation in management gen partners have an equal right in the mgt. Differences between General And Limited Partner/Partnership GENERAL LIMITED Personally liable for partnership obligations Liability extends only to his capital contributions When manner of mgt. The law that should govern the action is the law in force at the time of the filing of the petition. property or industry Contribute cash or property only. General Rule: Husband and Wife must jointly adopt • Rights if retiring/estate of deceased partner: a. Written Consent Necessary For Adoption a) Person to be adopted. not agreed upon. citing Republic v. 1999. Effects of Adoption a) Deemed a legitimate child of the adopter b) Acquired reciprocal rights and obligations arising from parent-child relationship c) Right to use surname of the adopter d) Parental authority of natural parents terminates and vested in adopter e) Remains intestate heir of natural parents and blood relatives 7. A child by nature of adopter or of spouse ii. Persons Authorized to Wind Up 1.may be exercised by: Winding up partner Surviving partner Person/partnership continuing the business Right to 1. CA. it was the Child and Youth Welfare Code that was in effect. 10 years old or over and living with him f) Spouse of the adopted. 125932. if 10 years old or over b) Natural parents or legal guardian of the person to be adopted c) Legitimate children of the adopter. Legal representative of last surviving partner Limited Partnership 1. b. Petitioners have already acquired a vested right on their qualification to adopt which cannot be taken away by the Family Code. At that time. If you were the judge. of the business Contribute cash. not industry Proper party to proceedings by/against Not proper party to proceedings partnership by/against partnership Interest not assignable w/o consent of other Interest is freely assignable Page 191 of 230 Exceptions: a) b) One spouse adopts his/her illegitimate child One spouse adopts legitimate child of the other 5. Miller G. at his option Account . ROC: Rescission and Revocation of Adoption Page 42 of 230 . 205 SCRA 356) 3. on the ground that the Family Code prohibits aliens from adopting. (Republic v. 2. 10 years old or over e) Illegitimate children of the adopter. Consistently considered by adopter as his own child during minority b) Alien whose country has no diplomatic relations with the Philippines c) Person previously adopted (not yet revoked) 4. Judicial Rescission of Adoption Rule 100. Partners designated by the agreement 2.dismiss the petition. To have the value of his interest ascertained as of the date of dissolution To receive as ordinary creditor the value of his share in the dissolved partnership with interest or profits attributable to use of his right. if married 6. not the Family Code. No.R. Who May Not Be Adopted a) Person of legal age Exception: An adult may be adopted if he is: i. In absence of agreement. if married g) Spouse of the adopter. 10 years old or over d) Adopted children of the adopter. 3. Characteristics a) Formed by compliance with statutory requirements b) One or more general partners control the business c) One or more general partners contribute to the capital and share in the profits but do not participate in the management of the business and are not personally liable for partnership obligations beyond their capital contributions d) May ask for the return of their capital contributions under conditions prescribed by law e) Partnership debts are paid out of common fund and the individual properties of general partners 2.

have the value of his interest at time of dissolution ascertained and paid in cash/secured by bond & be released from all existing/future partnership liabilities b. and her American husband Tom. If business not continued by others . If Tom and Sarah have been residing in the Philippines for at least 3 years prior to the effectivity of RA 8552. the petition cannot be granted because th American husband is not qualified to adopt. Under the Act. Sometime in 1990. This is the law applicable. Apply partnership property to discharge liabilities of partnership b. if any to pay in cash the net amount owed to partners c. SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS a) Assets of the partnership: 1. One of them not being qualified to adopt.return of capital contribution 4. Partnership property (including goodwill) 2.share of profits if any 4. Posses partnership property if business is continued 2. iv.iii. While Sarah. Right to lien on surplus of partnership property after satisfying partnership liabilities 2. ii. Inter-Country Adoption Act of 1995 (R. their petition has to be denied. Indemnity for damages caused by partner guilty of wrongful dissolution d. a) b) Who may petition? Adoptee only. is qualified to adopt under Section 7(b)(i) of the Act for being a former Filipino citizen who seeks to adopt a relative within the 4th degree of consanguinity or affinity. Restoration of previous legal custody (for minors) or appointment of guardians Extinguishment of reciprocal rights Cancellation of amended birth certificate and restoration of original birth certificate The adopted shall revert to his surname prior to the adoption Partner who wrongly caused dissolution: a. Rights of partner where dissolution in contravention of agreement 1. the petition may be granted. for the adoption of the minor child of her sister. Apply surplus. iii. Partners as investors . it was considered refilled upon the effectivity of RA 8552. is not qualified because he is neither a former Filipino citizen nor married to a Filipino. Page 43 of 230 . they are qualified to adopt the nephew of Sarah under Section 7(b) thereof. Right of indemnification by guilty partner against all partnership debts & liabilities 3. the Domestic Adoption Act of 1998. c) d) Effects of rescission: i. While the petition for adoption was filed in 1990. Partners as creditors 3. the Supreme Court has held in a line of cases that both of them must be qualified to adopt. iv. and the petition may granted. Otherwise. if they have been residents of the Philippines three years prior to the effectivity of the Act and continues to reside here until the decree of adoption is entered. 8043) • Inter-country adoption shall only be resorted to after all possibilities for the adoption of the Filipino child within the Philippines have been exhausted. Rights of injured partner where partnership contract is rescinded on ground of f fraud/misrepresentation by 1 party: 1. Contributions of the partners b) Order of Application of Assets: 1.apply partnership property to discharge liabilities of partnership & receive in cash his share of surplus less damages caused by his wrongful dissolution If business continued by others . the petition being still pending with the lower court. Sarah. 8. Sarah and Tom must adopt jointly because they do not fall in any of the exceptions where one of them may adopt alone. iii. Partner who did not cause dissolution wrongfully: a. Can the petition be granted? iv. a Filipina. ii. Grounds: Repeated physical and verbal maltreatment Attempt on life Sexual assault/violence Abandonment and failure to comply with parental obligation Remedy of adopter against the erring adoptee: Disinheritance i. When husband and wife must adopt jointly. Partners as investors . born a Filipino but by then a naturalized American citizen. Right to subrogation in place of creditors after payment of partnership liabilities 3. Partnership creditors 2. Continue business in same name during agreed term e. WHEN BUSINESS OF DISSOLVED PARTNERSHIP IS CONTINUED: • Creditors of old partnership are also creditors of the new partnership which continues the business of the old one w/o liquidation of the partnership affairs Page 190 of 230 Answer: It depends. filed a petition in the Regional Trial Court of Makati. Tom. However. an alien. Bar Question (2000).A. an alien.

possesses all the qualifications and none of the disqualifications provided herein and in other applicable Philippine laws. and has undergone appropriate counseling from an accredited counselor 4. Had known partnership prior to dissolution iii. Unfortunately. Hans and Rhoda cannot come to the Philippines to adopt Magno although they possess all the qualifications as adoptive parents. agrees to uphold the basic rights of the child as embodied under Phil laws. has the capacity to act and assume all right and responsibilities of parental authority under Phil law. 8043) 8. as necessary f) Recent photo of the child. Had no knowledge/notice of dissolution. except by agreement between: (1) partner himself (2) person/partnership continuing the business (3) partnership creditors ii. his/her spouse must jointly file adoption 3. however. could hardly afford to feed her own family. Had no knowledge/notice of dissolution. Rights of partner where dissolution not in contravention of agreement 1. if married. DISCHARGE OF LIABILITY – i. are permanent residents of Canada. Who may adopt – Any alien or Filipino permanently residing abroad if he/she: 1. Hans Herber. or Situation 2 i. has not been convicted of a crime involving moral turpitude 5. Partner cannot bind the partnership anymore after dissolution: (1) Where dissolution is due to unlawfulness to carry on with business (except: winding up of partnership affairs) (2) Where partner has become insolvent (3) Where partner unauthorized to wind up partnership affairs. They desire so much to adopt Magno. is eligible to adopt under his/her national law 6. unless the adopter is the parent by nature of the child.A. and his Filipino wife. he has been staying with his aunt who. Convention on the Rights of the Child.N. Dissolution does not discharge existing liability of partner. an 8-year old orphaned boy and a baptismal godson of Rhoda. Since the accidental death of Magno’s parents in 2004. a German national. if any to pay in cash the net amount owed to partners Page 189 of 230 Bar Question (2005). or the spouse of such parent 2. Apply surplus. In order that the child may be considered for placement. Had extended credit to partnership prior to dissolution & ii. comes from a country with whom the Philippines has diplomatic relations and whose government maintains a similarly authorized and accredited agency and that adoption is allowed under his/her national laws 9. Is there a possibility for them to adopt Magno? How should they go about it? Answer: Under RA 8043 establishing the rules for inter-country adoption of Filipino children. including the child to be adopted 7. Had no knowledge/notice of dissolution/fact of dissolution not advertised in a newspaper of general circulation in the place where partnership is regularly carried on 2. Had extended credit to partnership prior to dissolution & ii. is at least 27 yrs of age and at least 16 yrs older than the child to be adopted. or (b) Situation 2 i. the spouses may file an application to adopt a Filipino child with Page 44 of 230 . the U. and to abide by the rules and regulations issued to implement this Act (R.• • Who May be Adopted — Only a legally free child may be the subject of inter-country adoption. is in a position to provide the proper care and support and to give the necessary moral values and example to all his children. Had no knowledge/notice of dissolution/fact of dissolution not advertised in a newspaper of general circulation in the place where partnership is regularly carried on b. Rhoda. (a) (b) Situation 1 i. Did not extend credit to partnership prior to dissolution ii. Apply partnership property to discharge liabilities of partnership 2. except by transaction with one who: (a) Situation 1 i. the following documents must be submitted to the ICAB: a) Child study b) Birth certificate/foundling certificate c) Deed of voluntary commitment/decree of abandonment/death certificate of parents d) Medical evaluation/history e) Psychological evaluation. Did not extend credit to partnership ii. Had known partnership prior to dissolution iii.

2. Support consists of everything indispensable for: a) Sustenance b) Dwelling c) Clothing d) Medical attendance e) Education – includes schooling or training for some profession. Business can only be carried on at a loss 6. If due to ADI. Transactions which would bind partnership if not dissolved. b) If the one asking for support is already of majority age. he is entitled to support from his illegitimate brother or sister to the full extent. Authority of partners to bind partnership by new contract is immediately terminated when dissolution is not due to ACT. Transactions in connection to winding up partnership affairs/completing transactions unfinished 2. acting partner must have knowledge/ notice 2. Amount of support shall be in proportion to the means of the giver and to the need of the recipient 3. partners are liable as if partnership not dissolved. With respect to partners a.8. Partner declared insane in any judicial proceeding or shown to be of unsound mind 2. trade or vocation. the adoptive parents or any one of them shall personally fetch the child in the Philippines for adoption in the court of the foreigner’s country. ii. Rules regarding Support to Illegitimate Brothers and Sisters (Whether Full or Half Blood) a) If the one asking for support is below majority age. With respect to persons not partners (art 1834) - a. The Following are Obliged to Support Each Other to the Whole Extent: a) Spouses b) Legitimate ascendants and descendants c) Parents and their legitimate children and the children of the latter (legitimate or illegitimate) d) Parents and their illegitimate children and the children of the latter (legitimate or illegitimate) 4. Willful or persistent breach of partnership agreement or conduct which makes it reasonably impracticable to carry on partnership with him 5. when the ff. Partner continues to dissolution in ff. Support 1. The spouses. b. when the other party/obligee: Page 188 of 230 . he is entitled to support only if his need for support is not due to a cause imputable to his fault or negligence 5. Exceptions: 1. even beyond the age of majority f) Transportation – includes expenses going to and from school. Wind up partnership affairs 2. without any condition. Partner guilty of conduct prejudicial to business of partnership 4. after filing a petition with the ICAB. DEATH or INSOLVENCY (ADI) of a partner (art 1833). After termination of specified term/particular undertaking Anytime if partnership at will when interest was assigned/charging order issued e) EFFECTS OF DISSOLUTION: 1. cases: bind partnership even after 1. If cause is ACT of partner. Complete transactions not finished • Qualifications: 1. or to from place of work 2. The Canadian agency will forward the required supporting documents to the ICAB for matching with a Filipino child. Other circumstances which render dissolution equitable the Inter-country Adoption Board (ICAB) after they have been determined fit and eligible to adopt by the State Welfare Agency or a licensed adoption agency in Canada. d) Decree of court under art 1831 GROUNDS FOR DISSOLUTION BY DECREE OF COURT (art 1831): 1. Incapacity of partner to perform his part of the partnership contract 3. acting partner must have knowledge of such dissolution If cause is DEATH or INSOLVENCY. shall be issued the Placement Authority and when all the travel documents of the child who is declared legally eligible for adoption as determined by the ICAB are ready. AUTHORITY OF PARTNER TO BIND PARTNERSHIP TERMINATED • General Rule: Authority of partners to bind partnership is terminated. Properties Liable for the Support of the Relatives a) Spouses – absolute community or conjugal property b) Common children of the spouses – absolute community or conjugal property Page 45 of 230 Upon application by purchaser of partner's interest: 1. concur: i.

if the same is insufficient or there is no such property. 6. (Art. No. By the expulsion of any partner from the business bonafide in accordance with power conferred by the agreement 2. Brothers and sisters 7. Options of the Person Giving Support a) To give a fixed monthly allowance. Under the system of absolute community – separate property of the parent-spouse. partnership is not terminated but continues until the winding up of partnership affairs is completed WINDING UP . or b) To receive and maintain the recipient in the giver's home or family dwelling Exception: when there is a legal or moral obstacle thereto Parental Authority 3.process of settling the business or partnership affairs after dissolution CAUSES OF DISSOLUTION: 1. by the express will of any partner at any time By any event which makes it unlawful for business to be carried on/for the members to carry it on for the partnership Loss of specific thing promised by partner before its delivery Death of any partner Insolvency of a partner/partnership Civil interdiction of any partner Page 187 of 230 iii. the absolute community is liable but the support is considered as advances on the share of the parent to be paid by him to the community at the time of liquidation. a conveyance by a partner of his whole interest in a partnership does not of itself dissolve the partnership in the absence of an agreement. 1813. Justine cannot interfere or participate in the management or administration of the partnership business or affairs. 1813. Under the system of conjugal partnership – separate property of the parent-spouse. if the same is insufficient or there is no such property. Illegitimate children of either spouse: i.change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business. Concept of Parental Authority (Patria Potestas) Parental authority is the mass of rights and obligations which parents have in relation to the person and property of their children until their emancipation. Civil Code) Dissolution and Winding Up a) DISSOLUTION . who must act in good faith. other legitimate and illegitimate descendants.000. if the same is not sufficient or there is none. when no definite term or particular undertaking is specified c. and even after under certain circumstances.00 which was realized after her purchase of Una’s interest? (3%) ii. the absolute community or conjugal property shall be liable if financially capable. Civil Code) 2. 7. In contravention of the agreement between the partners. Legitimate ascendants. . and legitimate and illegitimate brothers and sisters – separate property of the obligor-spouse. 1. 5. P120. (Art. Order of Liability if 2 or More are Obliged to Support: i. She may. if any. By the express will of any partner. Ascendants in nearest degree iv. receive the net profits to which Una would have otherwise been entitled. Without violation of the agreement between the partners a. either before or after the termination of any specified term or particular undertaking d. In this case. By termination of the definite term/ particular undertaking specified in the agreement b.000. Page 46 of 230 4. where the circumstances do not permit a dissolution under any other provision of this article.c) d) Children of a spouse by another marriage – absolute community or conjugal property 2. the conjugal property is liable if financially capable. should she desire to participate in the management of the partnership and in the distribution of a net profit of P360. Spouse ii. which support shall be deducted from the share of the spouse upon liquidation of the ACP or CPG b) c) 6. Descendants in nearest degree iii. By the express will of all the partners who have not assigned their interest/ charged them for their separate debts. Answers: 1. but the support paid to the child shall be deducted from the share of the parent-spouse at the time of liquidation of the partnership What are the rights of Justine. however.

Oldest brother or sister over 21 iii. Una conveys her whole interest in the partnership to Justine. Child’s actual custodian. Defendant represented himself as partner/represented by others as such and not denied/refuted by defendant 2. the surviving grandparent shall exercise substitute parental authority. instruction or custody: i. PARTNER BY ESTOPPEL. Not all partners of existing partnership consents to representation No existing partnership & not all represented consented. absence or unsuitability of both parents. Death or Remarriage of Either Parent. without the knowledge and consent of Dielle and Karlo. e) In case of death. Conveyance in name of all partners Conveyance will pass title 2. however. ii. transferred or waived except in cases authorized by law (Art 210 FC) c) It is jointly exercised by the father and the mother (Art. Characteristics of Parental Authority a) It is a natural right and duty of the parents (Art. neglected children or abused children. Is the partnership dissolved? (2%) Page 186 of 230 . or Separation of the Parents a) In case of absence of either parent – parent present b) In case of death of either parent – surviving parent c) In case of remarriage of surviving parent – still the surviving parent. Directly represents himself to anyone as a partner in an existing partnership or in a non-existing partnership 2.Title in name of all partners. or iii. 211. To answer for risks in consequence of its management Bar Question (1998). Orphanages. especially the choice of the child over 7 years old. After two years of operation. unless the court appoints a guardian over the child d) In case of separation of parents – parent designated by the court i. Indirectly represents himself by consenting to another representing him as a partner in an existing partnership or in a non existing partnership b) Elements to establish liability as a partner on ground of estoppel: 1. None of partners in existing partnership consented Partnership is liable Person who represented himself & all those who made representation liable prorata/jointly 2. The court shall take into account all relevant considerations. abandoned children. To refund the amounts disbursed by partner in behalf of the partnership + corresponding interest from the time the expenses are made (loans and advances made by a partner to the partnership aside from capital contribution) 2. To answer for obligations partner may have contracted in good faith in the interest of the partnership business 3. Heads of children’s homes ii. Dielle. entity or institution engaged in child care b) Liability of Those Exercising Special Parental Authority Over the Child Page 47 of 230 Person who represented himself liable & those who made/consented to representation separately liable 3. The individual. Statement of defendant not refuted c) Liabilities in estoppel All partners consented to representation No existing partnership & all those represented consented. Who Exercises Parental Authority in Case of Absence. summary judicial proceedings shall be instituted so that they may be entrusted to: i. 1. PARTNERSHIP BY ESTOPPEL a) Partner by estoppel . Order of Substitute Parental Authority i. FC) d) It is purely personal and cannot be exercised through agents e) It is temporary 3.A child under 7 years of age shall not be separated from the mother unless the court finds compelling reasons to order otherwise. In case of foundlings. The school. over 21 Note: This applies also to appointment of guardian over the child’s property 5. he does any of the ff. Karlo and Una are general partners in a merchandising firm. or ii.: 1. unless the parent is unfit. its administrators and teachers. 209 FC) b) It cannot be renounced. they also agree on equal distribution of whatever net profit is realized per fiscal period. Surviving grandparent ii. Special Parental Authority a) The following exercise special parental authority over the minor child while under their supervision.by words or conduct. 4. Similar institutions duly accredited by the proper government agency 6. Having contributed equal amounts to the capital. OBLIGATIONS OF PARTNERSHIP TO PARTNERS 1. Tender years rule. Plaintiff relied on such representation 3.

The parents and judicial guardians of the minor or those exercising substitute parental authority over the minor are subsidiarily liable for said acts and omissions of the minor. Buyer had knowledge of lack of authority Conveyance does not pass title but only equitable interest. Confess a judgment e. Liability of Parents for Torts Committed By Their Minor Children a) Parents and other person exercising parental authority are civilly liable for the torts committed by their minor children. Acts of strict dominion or ownership: a. Do an act w/c would make it impossible to carry on ordinary business of partnership d. Submit partnership claim or liability to arbitration g. Conveyance in name if partner/partners in whose name title stands Title in name of 1/more/all partners or 3rd person in trust for partnership. or if unsuitability of parents. the parent is required to furnish a bond of not less than 10% of the value of the child’s property or income 9. it is not exercised by the parents of parental authority over the minor children. Effect of Parental Authority Upon the Property of the Child a) The Father and Mother shall jointly exercise legal guardianship over the property of the minor child without court appointment b) In case of disagreement. Distinction between Substitute Parental Authority and Special Parental Authority Substitute Parental Authority It is exercised in case of death. Grounds for Termination of Parental Authority Page 48 of 230 Conveyance passes title partnership can recover if: 1. Buyer had knowledge of lack of authority Conveyance passes title but partnership can recover if: 1. PROVIDED they are living in their company b) This is subject to the appropriate defenses provided by law 8. or 2. unless: 1. Dispose of good-will of business c. Conveyance executed in partnership name of in name of partners Conveyance was not in the usual way of business. Conveyance in partner's name Title in name of 1/ more partners. HOWEVER. or 2. Special Parental Authority It is exercised concurrently with the parental authority of the parents and rest on the theory that while the child is in the custody of the person exercising special parental authority. 2. this liability is subject to the defense that the person exercising parental authority exercised proper diligence. counsel or example d) Compels child to beg e) Subjects or allows acts of lasciviousness 10. instruction or custody. Buyer had knowledge of lack of authority Conveyance will only pass equitable interest Page 185 of 230 . but Title in partnership name. unless there is judicial order to the contrary c) If the market value of the property or the annual income of the child exceeds P50.000. Hence. Conveyance was not in the usual way of business. the parents temporarily relinquish parental authority over the child to the latter Assign partnership property in trust for creditors b. Renounce claim of partnership Acts in contravention of a restriction on authority Partnership not liable to 3rd persons having actual or presumptive knowledge of the restrictions Effects of Conveyance of Real Property Belonging to the Partnership Title in partnership name. or 2. Conveyance was not in the usual way of business. absence. the father’s decision shall prevail. Enter into compromise concerning a partnership claim or liability f.• • • They are principally and solidarily liable for damages caused by the acts or missions of the child while under their supervision. Grounds for Suspension of Parental Authority a) Conviction of parent for crime with civil interdiction b) Treats child with excessive harassment and cruelty c) Gives corrupting orders. Conveyance in partnership name 7.

and which has for its purpose the payment of indemnity to prevent unjust enrichment Kinds: a. “Suspended” Parental Authority) a) Adoption of child b) Appointment of general abandonment c) Judicial declaration of abandonment d) Final judgment divesting parental authority e) Judicial declaration of absence or incapacity or person exercising parental authority OBLIGATIONS AND CONTRACTS OBLIGATIONS 1. he shall be permanently deprived of parental authority. iii. and it was unduly delivered thru mistake d) Acts or omissions punished by law. voluntary and unilateral act. Every partnership shall operate under a firm name. Sources of Obligations (Art. Knowledge of any other partner who reasonably could and should have communicated it to the acting partner Partners and the partnership are solidary liable to 3rd persons for the partner's tort or breach of trust a. Act w/c is not apparently for the carrying of business in the usual way Page 184 of 230 .must be expressly or impliedly set forth. OBLIGATION OF PARTNERS WITH REGARD TO 3RD PERSONS 1. Liability of incoming partner is limited to: His share in the partnership property for existing obligations b. This takes place when a person voluntarily takes charge of another’s abandoned business or property without the owner’s authority b. 1156. 4. to do or not to do (Art. Pro rata b.Right not assignable Right limited to share of what remains after partnership debts have been paid c) Nature of partner's right in the partnership. 1. 7. His separate property for subsequent obligations Creditors of partnership preferred in partnership property & may attach partner's share in partnership assets Every partner is an agent of the partnership a. 5. after all partnership assets have been exhausted a. 8. 1157. 2. NCC) a) Law . Page 49 of 230 3.must be complied with in good faith because it is the “law” between parties c) Quasi-contracts. Subsidiary Admission or representation made by any partner concerning partnership affairs within scope of his authority is evidence against the partnership ii.unauthorized management. Knowledge of the partner acting in the particular matter then present to his mind c. This takes place when something is received when there is no right to demand it. POWER OF PARTNER AS AGENT OF PARTNERSHIP Acts for carrying on in the usual way the business of the partnership Every partner is an agent and may execute acts with binding effect even if he has no authority Except: when 3rd person has knowledge of lack of authority Does not bind partnership unless authorized by other partners 1.undue payment . Cases where Parental Authority May be Revived (i. cannot be presumed b) Contracts . and e) Quasi-delicts 3. a) b) c) d) Death of parents Death of child Emancipation of child If the parents exercising parental authority has subjected the child or allowed him to be subjected to sexual abuse.-1) obligation to give 2) obligation to do. Solutio indebiti. Persons who include their names in the partnership name even if they are not members shall be liable as a partner All partners shall be liable for contractual obligations of the partnership with their property.e. NCC) 2. 11. An obligation is a juridical necessity to give.Share of profits and surplus C. Negotiorum gestio.juridical relation resulting from lawful. Notice to partner of any matter relating to partnership affairs operates as notice to partnership except in case of fraud: Knowledge of partner acting in the particular matter acquired while a partner b. and 3) obligation not to do. Three types of obligations. 6.

5. 3. Negligence c. His rights in specific partnership property 2.4.) c.g. b.delay in the performance (on the part of the debtor). Violation of the tenor of the obligation 8.To deliver accessions and accessories. Damages. express declaration in the obligation or law b. e. Art. acknowledgment of default 7.g. 1. a. Note: It is believed that industrial partners are also entitled to the remedy granted since they are equally prejudiced B. 3. c.-.. the cause of the breach of the obligation must be independent of the will of the debtor. Exclude him from the firm. Equal right to possession Page 183 of 230 Requisites for exemption from liability due to an "act of God. Mora Solvendi -.e. damages. iii. b. Loss due to Fortuitous Events (Art. 4. His interest in the partnership 3. When the law so specifies . in either case CAPITALIST PARTNER Capitalist partner cannot engage in business (with same kind of business with the partnership) for his own account. Page 50 of 230 . 1163. Avail themselves of the benefits which he may have obtained 3. Mora Accipiendi -. 1164. time is of the essence c. c. General Rule: there must be demand before delay may be incurred. Three Accessory Obligations in Obligation to Give: a.-.mutual delay 9.To take care of the thing w/ the diligence of a good father of a family until actual delivery. Delay is the non-fulfillment of the obligation w/ respect to time. rescission c.-. 2. Fraud b. Art. PROPERTY RIGHTS OF A PARTNER a) Comprises of: 1. demand is useless d. ii. 1174) Balane: General Rule: The happening of a fortuitous event exonerates the debtor from liability. specific performance b.) When the parties so agree When the nature of the obligation requires the assumption of risk. d.To deliver the fruits to the creditor (fruits produced after obligation to deliver arises. if the debtor is already in delay (Art. Bear all losses Exceptions: i. Compensation Morae -. or 2. Delay d. 1166. Art.the following must concur: i.delay in the acceptance (on the part of the creditor). His right to participate in the management b) Nature of partner's right in specific partnership property i. unless there is a stipulation to the contrary Capitalist partner in violation shall: 1.."-. 1165. Right to associate another person with him in his share without consent of other partners (subpartnership) Right to inspect and copy partnership books at any reasonable hour Right to a formal account as to partnership affairs (even during existence of partnership): If he is wrongfully excluded from partnership business or possession of its property by his copartners If right exists under the terms of any agreement As provided by art 1807 Whenever other circumstances render it just and reasonable Duty to render on demand true and full information affecting partnership to any partner or legal representative of any deceased partner or of any partner under legal disability Duty to account to the partnership as fiduciary Prohibition Against Engaging in Business INDUSTRIAL PARTNER PROHIBITION Industrial partner cannot engage in business (w/n same line of business with the partnership) unless partnership expressly permits him to do so REMEDY Capitalist partners may: 1. 5. except a. exclusively or in addition to either of both remedies 6. Bring to common fund any profits accruing to him from said transaction. b. par. an insurance contract. Remedies Available to the Creditor in case of breach a. Grounds for Liability a. Kinds of Delay: a. and 2.

h) Rules for Distribution of Profits and Losses DISTRIBUTION OF PROFITS DISTRIBUTION OF LOSSES With According to agreement According to agreement ii. In case of tie. . decision of partners owning controlling interest shall prevail Absence or disability of any one cannot be alleged unless there is imminent danger of grave or irreparable injury to partnership If refusal of partner is manifestly prejudicial to interest of partnership. the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. 3. decision of majority shall prevail. either suspends its demandability or produces its extinguishment. A term or period is an interval of time.The obligation is void. or aggravation of the injury to the creditor. 2. unless he gives new guaranty – he does not furnish creditor the promised guaranties and securities Page 51 of 230 Partner is appointed manager in the articles of partnership i) Rights and Obligations with Respect to Management Power of managing Vote of partners partner is irrevocable representing without just/lawful controlling interest cause. Revocable only necessary to revoke when in bad faith power Partner is appointed Power is revocable any manager after constitution of time for any cause Each may execute all acts of administration In case of opposition. when: – after the obligation is incurred. • Suspensive condition (condition precedent) wherein the happening of the event gives birth to an obligation • Resolutory condition (condition subsequent) wherein the happening of the event will extinguish the obligation. and iv. 2. agreement Without agreement 1. the debtor must be fee from any participation in. o Rule: debtor shall lose the right to make use period. he becomes insolvent. • Potestative-depends upon will of debtor • Casual.This is not expressly provided for in the provision but is implied. All partners are agents of the partnership Unanimous consent required for alteration of immovable property j) Other rights and obligations of partners: Page 182 of 230 . court's intervention may be sought partnership 2 or more persons entrusted with management of partnership without specification of duties/stipulation that each shall not act w/o the other's consent Stipulated that none of the managing partners shall act w/o the consent of others Concurrence of all necessary for the validity of acts c. E.as may be just and equitable under the circumstances 1. iii. 2.a condition not to do an illegal thing (negative)-. b. w/c. Conditional • A condition is a future and uncertain event upon w/c an obligation or provision is made to depend.from the day) or one the arrival of w/c will make the obligation demandable o Resolutory term (in die -. "I will sell you a piece of land provided you do not plant marijuana on it." With a term/period – a term is a future and certain event upon w/c the demandability (or extinguishment) of an obligation depends.depends on chance or will of 3rd persons • Mixed-depends partly upon will of the parties and partly in chance or will of third persons • Effect of Impossible conditions: . If sharing of profits is stipulated .a negative condition (not to do an impossible thing)-Disregard the condition. Kinds of Obligations According to Demandability: a. o Suspensive term (ex die -. Futurity and uncertainty must concur as characteristics of the event. Pure – A pure obligation is one w/c is not subject to a condition or a term.apply to sharing of losses If no profit sharing stipulated . Manner of management not agreed upon 1.losses shall be borne according to capital contribution Purely industrial partner not liable for losses the event must be either unforseeable or unavoidable. .into the day) or one the arrival of w/c will extinguish the obligation.g. Share of capitalist partner is in proportion to his capital contribution Share of industrial partner is not fixed . exerting an influence on an obligation as a consequence of a juridical act. The obligation is valid.a positive suspensive condition to do an impossible/ illegal thing-.

except: i. refusal to do so shall create an obligation on his part to sell his interest to the other partners e) Obligation of managing partners who collects debt from person who also owed the partnership 1. the presumption is that it is for the benefit of both parties. but the obligor may deliver or render another in substitution c. but the debtor cannot insist on payment bef.l In case of imminent loss to the business of the partnership and there is no stipulation otherwise. To contribute on the date fixed the amount he has undertaken to contribute to the partnership 2.o by his own acts. in consideration of which the creditor agrees to the period – debtor attempts to abscond General rule: If a period is attached in an obligation. Partners must contribute equal shares to the capital of the partnership unless there is stipulation to contrary 2. the period. Partners (capitalist) must contribute additional capita. the arrival of the term.The creditor cannot demand performance anytime. • There are as many obligations as there are debtors multiplied by the number of creditors. Passive joint where the obligation is joint on the debtor's side. the debtor cannot compel acceptance bef. unless he immediately gives new ones equally satisfactory – debtor violates any undertaking.-. To pay for the agreed or legal interest. If the term is for the benefit of the debtor. To reimburse any amount he may have taken from the partnership coffers and converted to his own use 3. but the debtor can insist on performance anytime. he impaired guaranties and securities after their establishment. The consequence is that the creditor cannot compel the performance before the arrival of the term.The creditor can demand performance anytime. • Kinds of joint obligations: i.-. 2. if he fails to pay his contribution on time or in case he takes any amount from the common fund and converts it to his own use 4. ii. If he received it for the account of partnership. – If the term is for the benefit of the creditor. Multiple Joint where there are multiple parties on each side of a joint obligation. only one is due General rule: right to choose pertains to debtor. Single Alternative – where out of 2 or more prestations which may be given. Joint obligation – one in w/c each of the debtors is liable only for a proportionate part of the debt or each creditor is entitled only to a proportionate part of the credit. Apply sum collected to 2 credits in proportion to their amounts 2. Obliged to bring to the partnership capital what he has received even though he may have given receipt for his share only g) Risk of Loss of Thing Contributed Specific and determinate things which are not fungible where only the use is contributed Specific and determinate things the ownership of which is transferred to the partnership Fungible things (consumable) Things contributed to be sold Things brought and appraised in the inventory According to Plurality of Objects: a. and when through a fortuitous event they disappear. and iii. Remedy of the other partner is not rescission but specific performance with damages from defaulting partner c) Obligations with respect to contribution of money and money converted to personal use 1. the whole sum shall be applied to partnership credit f) Obligation of partner who receives share of partnership credit 1. b. When expressly granted to 3rd persons Facultative – where only one prestation is agreed upon. ii. When the choice is expressly granted to the creditor or. To indemnify the partnership for the damages caused to it by delay in the contribution or conversion of any sum for his personal benefits d) Obligations with respect to contribution to partnership capital 1. Active joint where the obligation is joint on the creditor's side. According to Plurality of Subjects: a. • Effects of Joint Liability: Page 52 of 230 Risk is borne by partner Risk is borne by partnership Risk is borne by partnership Risk is borne by partnership Risk is borne by partnership Page 181 of 230 .

• An instrument w/c begins w/ "I. from the date they should have been contributed up to the time of actual delivery 4. the death of a solidary creditor does not transmit the solidarity to each of his heirs but to all of them taken together (IV Tolentino) . and in all other acts w/c tend to secure the credit or make it more advantageous. but not w/ respect to the others.one who does not take any active part in the business although he may be known to be a partner n) DORMANT . v. Relations among the partners themselves b. produces the effects of default only w/ respect to the creditor who demanded and the debtor on whom the demand was made.Since it is a reciprocal agency. • There is solidary obligation only in three cases: (1) When the obligation expressly so states. liability of joint tortfeasors) or (3) When the nature of the obligation requires solidarity. iv.one who continues the business of a partnership after it has been dissolved by reason of the admission of a new partner. nor does it authorize a creditor to demand anything from his co-creditors. retirement. The vices of each obligation arising from the personal defect of a particular debtor or creditor does not affect the obligation or rights of the others. Partners becomes ipso jure a debtor of the partnership even in the absence of any demand Page 180 of 230 g) • The demand by one creditor upon one debtor. does not benefit the other creditors nor interrupt the prescription as to other debtors iii.one who is not really a partner but is liable as a partner for the protection of innocent 3rd persons h) CONTINUING PARTNER . Relations of the partners with the partnership c. In the joint divisible obligation. OBLIGATIONS OF THE PARTNERS AMONG THEMSELVES a) Obligations with respect to contribution of property: 1. i.one who takes active part and known to the public as partner in the business l) SECRET . he must pay only to one demanding payment (Art. obligations are presumed to be joint. b. To indemnify partnership for any damage caused to it by the retention of the same or by the delay in its contribution b) Effect of Failure to contribute property promised: 1.g. He can interrupt the period of prescription or render the debtor in default. 1214) Page 53 of 230 . To answer to the partnership for the fruits of the property the contribution of which he delayed. property or industry which he may have promised to contribute 2. To contribute at the beginning of the partnership or at the stipulated time the money.one who is not a member of the partnership who contracts with a partner with reference to the latter's share in the partnership k) OSTENSIBLE . Relations of the partnership with 3rd persons with whom it contracts d. Hence. Relations of the partners with such 3rd persons Obligations of the Partners A.one who does not take active part in the business and is not known or held out as a partner 8. The insolvency of a debtor does not increase the responsibility of his co-debtors. Solidary obligations – one in w/c the debtor is liable for the entire obligation or each creditor is entitled to demand the whole obligation. death or expulsion of one of the partners i) SURVIVING PARTNER .Each creditor represents others in the act of requiring payment. judicial or extrajudicial is made on him. To answer for eviction in case the partnership is deprived of the determinate property contributed 3. the defense of res judicata is not extended from one If the contrary does not appear.one who remains after a partnership has been dissolved by death of any partner j) SUBPARTNER . for the benefit of all other creditors A credit once paid is shared equally among the creditors unless a different intention appears Debtor may pay any of the creditors but if any demand. ii. if he receives only a partial payment.one who takes active part in the business but is not known to be a partner by outside parties m) SILENT . To preserve said property with the diligence of a good father of a family pending delivery to partnership 5. (2) When the law (e." "WE" or "Either of us" promise to pay. RELATIONS CREATED BY A CONTRACT OF PARTNERSHIP a. The interruption of prescription by the judicial demand of one creditor upon a debtor. • Characteristics of Active Solidarity: . when signed by two or more persons. makes them solidarily liable.PARTNERS BY ESTOPPEL . he must divide it among the other creditors.

one which actually exists among the partners and also as to 3rd persons b. Answer: (a) A may avail the minority of B as a defense.one in which no time is specified and is not formed for a particular undertaking or venture which may be terminated anytime by mutual agreement PARTNERSHIP WITH A FIXED TERM . A solidary debtor may avail himself of any defense which Page 54 of 230 . As to publicity a. DE JURE PARTNERSHIP . D. OPEN OF NOTORIOUS PARTNERSHIP .one formed for the transaction of business b. b. When demanded payment from A. bec the extinguishment of the obligation by prescription extinguishes also the mutual representation among the solidary debtors The debtor who is required to pay may set up by way of compensation his own claim against the creditor. he can recover from the co-debtors their respective shares (this is something similar to subrogation) . or by fortuitous event after one of the debtors has incurred in delay The interests due by reason of the delay of one of the debtors are borne by all of them - - - Bar Question (2003). but the renunciation by one debtor of prescription D. PROFESSIONAL OR NON TRADING PARTNERSHIP .one who manages the affairs or business of the partnership f) LIQUIDATING .one whose liability to 3rd persons extends to his separate property d) LIMITED .Interruption of prescription as to one debtor affects all the others.one which has failed to comply with all the legal requirements for its establishment E.one which in reality is not a partnership but is considered a partnership only in relation to those who. ORDINARY OR REAL PARTNERSHIP . compensation and remission Each creditor may renounce his right even against the will of the debtor. As to purpose a.one wherein the existence of certain persons as partners is not avowed or made known to the public by any of the partners b. the effect is the same as that of payment The total remission of the debt in favor of a debtor releases all the debtors. and the latter need not thereafter pay the obligation to the former a. A. (c) D is insolvent. B. As to representation to others a. C. are precluded to deny or disprove its existence F. SECRET PARTNERSHIP .one who contributes money or property to the common fund b) INDUSTRIAL .one whose liability to 3rd persons is limited to his capital contribution e) MANAGING .Each debtor may be required to pay the entire obligation but after payment. PARTNERSHIP AT WILL .one who contributes only his industry or personal service c) GENERAL . by their conduct or omission. Kinds of Partners a) CAPITALIST . (d) E was given by X an extension of 6 months without the consent of the other four co-debtors.the term for which the partnership is to exist is fixed or agreed upon or one formed for a particular undertaking • Characteristics of Passive Solidarity: .one which has complied with all the legal requirements for its establishment b.one whose existence is avowed or made known to the public by the members of the firm G. if such defenses are found to be true. in this case.one who takes charge of the winding up of partnership affairs upon dissolution Page 179 of 230 already had does not prejudice the others. State the effect of each of the above defenses put up by A on his obligation to pay X. but when this remission affects only the share of one debtor. but only for B’s share of P10. DE FACTO . and E made themselves solidarily indebted to X for the amount of P50. COMMERCIAL OR TRADING PARTNERSHIP . (b) C has already been condoned by X. even if such loss is caused by the fault of only one of them. the other debtors are still liable for the balance of the obligation All the debtors are liable for the loss of the thing due. OSTENSIBLE OR PARTNERSHIP BY ESTOPPEL .- - One creditor does not represent the others in such acts as novation (even if the credit becomes more advantageous). the latter refused to pay on the following grounds: (a) B is only 16 years old.one formed for the exercise of a profession 7.000. As to legality of existence a.000.

one that must be performed in one act. CLASSIFICATIONS OF PARTNERSHIP A. FORM OF PARTNERSHIP CONTRACT a) GENERAL RULE: No special form is required for the validity of the contract b) EXCEPTIONS: i. Public instrument is necessary b.) When the nature of the obligation necessarily entails performance in parts (e.one susceptible of partial performance Indivisible. b. signed by the parties and attached to the public instrument otherwise it is VOID Where capital is P3. A guaranteed the payment of D’s share and of all the other co-debtors. 1. Exercise of profession or vocation B. With respect to those which personally belong to others. the latter not being personally liable for the obligations of the partnership C.comprises all that the partners may acquire by their industry or work during the existence of the partnership personally belongs to a solidary co-debtor. Where immovable property/real rights are contributed a. UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY comprises the following: a) Property which belonged to each of the partners at the time of the constitution of the partnership b) Profits which they may acquire from all property contributed ii. avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him or pertain to his own share. There is no novation of the obligation but only an act of liberality granted to E alone. Divisible .. Public instrument is necessary b. Reciprocal Obligations • One where two parties are reciprocally obliged to do or give something • Cause must be identical and obligations should arise simultaneously • Obligation or promise of each party is the consideration for the obligation or promise of the other Compensatio Morae – neither party incurs delay if the other does not or • is not ready to comply in a proper manner of what is incumbent upon him • In a reciprocal obligation. As to liability of partners a. As to extent of its subject matter a. When a penal clause is present. Specific undertaking iv. damages do not have to be proved. UNIVERSAL PARTNERSHIP OF PROFITS .has for its objects: i. Determinate things ii. exists only in reciprocal obligations Page 55 of 230 .consists of general partners who are liable pro rata and subsidiarily and sometimes solidarily with their separate property for partnership debts b. mortgage) Note: Persons who are prohibited from giving donations or advantage to each other cannot enter into a universal partnership According to Sanctions for Breach: a. (c) A may not interpose the defense of insolvency of D as a defense. iii. he may avail himself thereof only as regards that part of the debt for which the latter are responsible. Applying the principle of mutual guaranty among solidary debtors. (Article 1222.A penal clause is an accessory undertaking to assume greater liability in case of breach. but only as to the share of that co-debtor. The purpose is to strengthen the coercive force of the obligation. Must be registered with SEC 6. According to Performance: a.000. As to duration Page 178 of 230 11. Inventory of the property contributed must be made.g.5. UNIVERSAL PARTNERSHIP i. Exceptions to the Rule on Indivisibility: i. Simple With a penal clause.000 or more. breach by one party is a tacit resolutory condition • Right to rescind i. par. A cannot avail of the defense of D’s insolvency. in actions filed by the creditor. b. pledge.g. in money or property ii. GENERAL PARTNERSHIP . b. NCC). Their use or fruits iii. Hence. (d) The extension of six (6) months given by X to E may be availed of by A as a partial defense but only for the share of E. (b) A may avail of the condonation by X of C’s share of P10. (Art. PARTICULAR PARTNERSHIP . When the parties so provide. a. easements) Where the law provides otherwise (e. 1248. ii. A solidary debtor may. LIMITED PARTNERSHIP .one formed by 2 or more persons having as members one or more general partners and one or more limited partners.

vi. 3 Page 177 of 230 Effect of payment by a third person: • If the payment was w/ the debtor's consent. d. application of payments to equally onerous debts 3. viii. duty of mutual restitution not granted for slight and casual breach but for substantial breach Disposal/ Transferability of interest Power to act with 3rd persons Extinguishment of Obligations a. except in dacion en pago and novation 2. e. b. If without need of the creditor's consent i. iii. 1238. Indivisibility B. Requisites of Payment or Performance: A. guarantor) No.) Exception: If the person paying intended it to be a donation. ergo. The contract is void ab initio and the partnership never existed in the eyes of the law ii. The debtor himself ii. His agent iv. Anyone interested in the fulfillment of the obligation (e. c. vii. no need for express stipulation may be waived if availed of. a partner may bind partnership (each partner is agent of partnership) Death of partner results in dissolution of partnership May be dissolved at any time by the will of any or all of the partners Minimum of 2 persons From the moment of execution of contract of partnership Co-owner may freely do so Co-owner cannot represent the coownership instance Stockholder has a right to transfer shares without prior consent of other stockholders Management is vested with the Board of Directors Death of co-owner does not necessarily dissolve co-ownership May be dissolved anytime by the will of any or all of the co-owners Minimum of 2 persons From date of issuance of certificate of incorporation by the SEC Death of stockholder does not dissolve corporation Can only be dissolved with the consent of the state Minimum of 5 incorporators 4. f. can be demanded only if plaintiff is ready. As to the prestation 1. of incorporators Commencement of juridical personality Partner may not dispose of his individual interest unless agreed upon by all partners In absence of stipulation to contrary. h. EFFECTS OF UNLAWFUL PARTNERSHIP i. (Art. j. willing. NO PRESUMPTION OF PARTNERSHIP FROM RECEIPT OF PROFITS: a) As debt by installment b) As wages or rent c) As annuity d) As interest on loan e) As consideration for sale of goodwill of business/other property by installments 5. Integrity – delivery of the entire prestation due. Identity of the object. g. The payor may be – a. i. except in cases of: a. The instruments or tools and proceeds of the crime shall also be forfeited in favor of the government iv.) Page 56 of 230 .ii. iv. The profits shall be confiscated in favor of the government iii. v. substantial performance in good faith b. while the other is not not absolute needs judicial approval in certain cases implied to exist. the effect is subrogation (Articles 1236-1237. waiver of creditor c. Payment or performance Loss of the thing due Condonation or remission of the debt Confusion or merger of the rights of the creditor and debtor Compensation Novation Annulment Rescission Fulfillment of a resolutory condition Prescription Effect of death Dissolution 1. and able to comply.g. His heirs or assigns iii. The contributions of the partners shall not be confiscated unless they fall under no.

pay the price, Richard gave him a power-of-attorney authorizing him to subdivide the land, sell the individual lots, and deliver the proceeds to Richard, to be applied to the purchase price. Five years later, Richard revoked the power-ofattorney and took over the sale of the subdivision lots himself. Is the revocation valid or not? Why?

If payment was without the debtor's consent, the third person may demand repayment to the extent that the debtor has been benefited. (Art. 1236, par. 2.) b. With the creditor's consent -- Anyone. • C. Who may be the payee? a. The obligee proper (Articles 1240, 1626.) b. His successor or transferee (Art. 1240.) c. His agent (ibid.) d. Any third person subject to the following qualifications: i. Provided it redounded to the obligee's benefit and only to the extent of such benefit (Art. 1241, par. 2.) ii. If it falls under Art. 1241, par. 2 nos. 1, 2 & 3, the benefit is deemed to be total. e. Anyone in possession of the credit (Art. 1242.)

Answer: The revocation is not valid. The power of attorney given to buyer is irrevocable because it is coupled with an interest: the agency is the means of fulfilling the obligation of the buyer to pay the price of the land (Article 1927, CC). In other words, a bilateral contract (contract to buy and sell the land) is dependent on the agency.
PARTNERSHIP General Provisions 1. PARTNERSHIP - by the contract of partnership, 2 or more persons bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves 2. ESSENTIAL FEATURES: a) There must be a mutual contribution of money, property, or industry to a common fund b) The object must be lawful c) The purpose or primary purpose must be to obtain profits and divide the same among the parties 3. PARTNERSHIP DISTINGUISHED FROM CO-OWNERSHIP AND CORPORATION PARTNERSHIP CO-OWNERSHIP CORPORATION Creation Created by a Created by law Created by law contract, my mere agreement of the parties Juridical Has a juridical None Has a juridical personality personality personality separate and separate and distinct from that of distinct from that each partner of each partner Purpose Realization of Common Depends on AOI profits enjoyment of a thing or right Duration/ No limitation 10 years maximum 50 years Term of maximum, existence extendible to not more than 50 years in any one
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Note: In all these five (5) cases, it is required that the debt should not have been garnished. (Art. 1243.)
D. With respect to the time and place of payment 1. When payment to be made: When due 2. Place (Art. 1251.) a. Primary rule: As stipulated b. Secondary rule: Place where the thing was at the time the obligation was constituted if the obligation is to deliver a determinate thing. c. Tertiary rule: At the debtor's domicile 2. Four Special Kinds of Payments: i. Dacion en pago (Art. 1245.) – property alienated by debtor to creditor in satisfaction of the debt in money. Law on sales shall govern. ii. Application of payments – the designation of a debt which is being paid by the debtor who has several obligations of the same kind in favor of the creditor to whom the payment is made iii. Payment by cession – property is turned over by the debtor to the creditor who acquires the right to sell it and divide the net proceeds among themselves. iv. Consignation – deposit of the object of the obligation in a competent court in accordance with the rules prescribed by law after refusal or inability of the creditor to accept the tender of payment

Requisites of a Valid Consignation:
1) 2) A debt due That the consignation of the obligation had been made bec. the creditor to whom tender of payment was made refused to accept it, or bec. he was absent or
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3)

4) 5)

incapacitated, or bec. several persons claimed to be entitled to receive the amount due Previous notice of the consignation had been given to the person interested in the performance of the obligation (Art. 1257) That the amount due was placed at the disposal of the court (consignation proper) That after the consignation had been made the person interested was notifed thereof (second notice)

Necessity of Notice of Revocation As to the agent - express notice always necessary; sufficient notice if • the party to be notified actually knows, or has reason to know, a fact indicating that his authority has been terminated/suspended; revocation without notice to the agent will not render invalid an act done in pursuance of the authority As to 3rd persons - express notice necessary • As to former customers - actual notice must be given to them because • they always assume the continuance of the agency relationship As to other persons - notice by publication is enough • f) May the agency be extinguished at will? i. AGENT may do so but subject to the contractual obligations owing the principal (i.e. fixed period of time for the agency or purpose not yet accomplished); ii. PRINCIPAL may also revoke the agency at will Exceptions: a. Agency coupled with interest b. When a bilateral contract depends upon the agency c. When the agency is the means of fulfilling an obligation already contracted d. When a partner is appointed as manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. Exception to the exception: When the agent acts to defraud the principal g) Implied Revocation of Agency i principal appoints a new agent for the same business or transaction, only if there is incompatibility); effective as between the principal and the agent only if communicated to the agent; does not prejudice rights of third persons acting in GF without knowledge of the revocation ii principal directly manages the business entrusted to the agent, dealing directly with 3rd persons h) Effect of Extinguishment Without Notice: act of agent deemed valid insofar as 3rd parties acting in good faith and without knowledge of revocation i) Effect of Subsequent Issuance of a SPA: The general power is impliedly revoked as to matters covered by the special power because a special power naturally prevails over a general power. Bar Question (2001). Richard sold a large parcel of land in Cebu to Leo for P100 million payable in annual installments over a period of ten years, but title will remain with Richard until the purchase price is fully paid. To enable Leo to
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Causes for Consignation
1) 2) 3) 4) creditor is absent or unknown, or does not appear at the place of payment creditor incapacitated to accept payment at the time it is due 2 or more persons claim right to collect when the title of the obligation has been lost

3. Loss or Impossibility of Performance – object or prestation perishes, goes out of commerce of man, disappears in such a way that its existence is unknown or cannot be recovered. • Requisites: 1) thing lost is determinate 2) loss without any fault from debtor 3) loss occurred before delay of debtor •

Rule of Rebus sic stantibus.-Requisites:

This doctrine is also called the doctrine of extreme difficulty and frustration of commercial object. The event or change could not have been foreseen at the time of the execution of the contract. ii. The event or change makes the performance extremely difficult but not impossible. iii. The event must not be due to an act of either party. iv. The contract is for a future prestation. If the contract is of immediate fulfillment, the gross inequality of the reciprocal prestation may involve lesion or want of cause. i.

4. Condonation or Remission – an act of liberality by virtue of w/c, w/o receiving any equivalent, the creditor renounces enforcement of an obligation w/c is extinguished in whole or in part. Requisites: • 1) Existing debt 2) Renunciation must be gratuitous 3) Acceptance by the debtor 4) Capacity of the parties
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Extinguishment of Agency a) Modes 1. 2. 3. 4. 5. 6. 5. Confusion or Merger of Rights – the meeting in one person of the qualities of the creditor and debtor with respect to the same obligation. Requisites: • 1) It must take place between the creditor and the principle debtor (Art. 1276.) 2) The very same obligation must be involved 6. Compensation – a mode of extinguishing, to the concurrent amount, the obligations of those persons who in their own right are reciprocally debtors and creditors of each other. • Requisites: 1) each of the obligors are bound principally, and that at the same time each is a principal creditor of the other 2) both debts consists of sum of money, or if consumable-same kind and same quality 3) both debts are due 4) both are liquidated and demandable 5) compensation not prohibited by law 6) debt not garnished • Kinds of Compensation: 1) Legal Compensation (Articles 1279, 1290) - takes place automatically by operation of law once all the requisites are present. 2) Voluntary - agreement of the parties 3) Judicial - pleaded and effective only upon order of the court 4) Facultative Compensation - takes place when compensation is claimable by only one of the parties but not of the other, e.g., Articles 1287, 1288.

revocation withdrawal of the agent death, civil interdiction, insanity or insolvency of the principal or of the agent dissolution of the firm or corporation which entrusted or accepted the agency accomplishment of the object or purpose of the agency expiration of the period for which the agency was constituted

NOTE: list not exclusive; causes particular only to agency; may be extinguished by the modes of extinguishment of obligations in general whenever they are applicable, like loss of the thing and novation b) Presumption of Continuance of Agency: It means that when once shown to have existed, an agency relation will be presumed to have continued, in the absence of anything to show its termination. c) Exceptions to Extinguishment by Death i. if the agency is coupled with an interest ii. if the act of the agent was executed without the knowledge of the death of the principal and the third person who contracted with the agent acted in good faith iii. to avoid damage iv. if it has been constituted in the common interest of the principal and of the agent, or in the interest of a third person who has accepted the stipulation in his favor d) Can the heirs continue the agency? i. General Rule: agency calls for personal services on the part of the agent; rights & obligations intransmissible ii. Exceptions: 1. agency by operation of law, or a presumed or tacit agency 2. agency is coupled with an interest in the SM of the agency (ex. power of sale in a mortgage) e) Revocation – termination of the agency by the subsequent act of the principal Renunciation/Withdrawal - termination of the agency by the subsequent act of the agent

Bar Question (2002). Stockton is a stockholder of Core Corp. He desires to sell his shares in Core Corp. in view of a court suit that Core Corp. has filed against him for damages in the amount of P10 million, plus attorney’s fees of P1 million, as a result of statements published by Stockton which are allegedly defamatory because it was calculated to injure and damage the corporation’s reputation and goodwill. The articles of incorporation of Core Corp. provide for a right of first refusal in favor of the corporation. Accordingly, Stockton gave written notice to the corporation of his offer to sell his shares of P10 million. The response of Core Corp. was an acceptance of the offer in the exercise of its rights of first refusal, offering for the purpose payment in form of compensation or set-off against the amount of damages it is claiming against him, exclusive of the claim for attorney’s fees. Stockton rejected the offer of the corporation, arguing that compensation between the value of the shares and the amount of damages demanded by the corporation cannot legally take effect.
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bound by ratification to the same iii.relieves the agent from liability to the i. But before ratification. if w/o consent or against will . ii. In order that compensation may be proper. There is no right of compensation between his price of P10 million and Core Corp. b) Effects of Ratification with respect to agent .initiative is from 3rd person or new debtor.government neither estopped by the mistake/error of its agents. The principal must have capacity and power to ratify ii. Delegacion .initiative of old debtor. The act or conduct of the principal rather than his communication is the key. Active subjective or a change of creditor. cannot raise the question of the agent’s authority to do the ratified act c) Distinction Between Ratification & Estoppel Ratification rests on intention affects the entire transaction from the beginning substance of ratification is confirmation of an authorized acts or conduct after it has been done Estoppel rests on prejudice affects only relevant parts of the transaction substance of estoppel is the principal’s inducement to another to act to his prejudice Subjective (Personal) or novation by a change of subject i. d) Distinction Between Apparent Authority & Authority by Estoppel Apparent Authority Authority by Estoppel though not actually granted. Expromision . also known as subrogation. new debtor & creditor must consent.assumes responsibility for the ii. even though the principal necessary powers to act in a certain may have no notice or knowledge of the way conduct of the agent Page 173 of 230 . person interested in fulfillment of obligation pays debt even w/o knowledge of debtor Passive subjective or a change of debtor a. no need for consent. Novation – the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one w/c extinguishes or modifies the first. extent as if the ratified act had been authorized. subject to full reimbursement & subrogation if made w/ consent of old debtor. either by changing the object or principal conditions. full reimbursement.agreement & consent of all parties. Conventional . The case for the P10 million damages being still pending in court. The act must be capable of ratification v. the two debts must be liquidated and demandable. by his negligence. The act must be done in behalf of the principal * To be effective. the corporation has as yet no claim which is due and demandable against Stockton. He must have had knowledge of material facts iii. where the principal. or by substituting the person of the debtor. 3rd person not interested in obligation pays w/ approval of debtor 3. only beneficial reimbursement b. as fully as if the agent had acted under original authority but not liable for acts outside the authority approved by his ratification with respect to 3rd persons . unless: insolvency Page 60 of 230 1. all parties must consent. unauthorized act. 7. if insolvent new debtor – old debtor not responsible because obligation extinguished by valid novation. • Requisites of Novation: 1) There must be a previous valid obligation 2) Agreement of the parties to create the new obligation 3) Extinguishment of the old obligation 4) Validity of the new obligation • iv. Legal . clearly established b. He must ratify the acts in its entirety iv. Estoppel of the Government . and to his principal for acting without authority. Ratification a) Conditions for Ratification i. ratification need not be communicated or made known to the agent or the third party. Answer: Stockton is correct. or by subrogating a third person in the rights of the creditor.Is Stockton correct? Give reasons for your answer. principal knowingly permits/holds permits his agent to exercise powers not out the agent as possessing the granted to him. not presumed except as provided for in law: presumed when creditor pays another preferred creditor even w/o debtor’s knowledge 2.takes place by operation of law. the third party is free to revoke the unauthorized contract. may be estopped through affirmative acts of its officers acting within the scope of their authority 11. may recover compensation with respect to principal . a. old debtor released from obligation.’s unliquidated claim for damages. third party for the unauthorized transaction.

As to sub-agent – to estop the principal from denying his liability to a third person. unless principal derives benefits from the contract ii. When X tries to withdraw his deposit. or that the latter would be allowed only a certain sum 10. In this connection. in compensation. who is correct? a) Who can be under estoppel to deny agency? i.. the obligations of those persons who in their own right are reciprocally debtors and creditors of each other (Tolentino. Page 61 of 230 . it has been held that the relation existing between a depositor and a bank is that of creditor and debtor. Payment means not only the delivery of money but also performance of an obligation (Article 1232. Estoppel of Agent. Compensation is a mode of extinguishing to the concurrent amount. the Supreme Court held: “The Civil Code contains provisions regarding compensation (set off) and deposit. 1991 ed. and the alleged agent seemed to have apparent or ostensible. because the compensation operates by law and not by the acts of the parties. will be estopped to deny the agency as against such other b. 1. (De Leon. iii. that he exercised due diligence for that purpose 8. Assuming that the promissory note signed by X to evidence the loan does not provide for compensation between said loan and his savings deposit. X. It involves the simultaneous balancing of two obligations in order to extinguish them to the extent in which the amount of one is covered by that of the other. All the requisites of Art.one professing to act as agent estopped to deny his agency both as against his asserted principal and the third persons interested in the transaction in which he is engaged ii. Define compensation as a mode of extinguishing an obligation.000. and distinguish it from payment.00. agent or 3rd persons in interest Page 172 of 230 Answers: 1. xxx As a general rule. PNB (62 Phil.. Principal’s Liability for Expenses: a) General Rule: principal liable for the expenses incurred by the agent b) Exceptions: i.” Hence. as here. In the case of Gullas v. X contends that compensation is improper when one of the debts. although not real authority to represent another already existing & of public knowledge or known to him at time of delegacion Bar Question (1998). to the injury of third persons who have dealt with the apparent agent as such in good faith and in the exercise of reasonable prudence. These portions of Philippine law provide that compensation shall take place when two persons are reciprocally creditor and debtor of each other. arises from a contract of deposit. Agent’s Right of Retention: specific (only for those goods connected with the agency) and until the principal effects the reimbursement and pays the indemnity 9. Y Bank allows only P200. Y Bank is correct. Civil Code. 1992 ed. When the agent incurred them with knowledge that an unfavorable result would ensure. capacity to dispose of the thing paid and capacity to receive payment are required for debtor and creditor. citing 8 Manresa. while in compensation there may be partial extinguishment of an obligation. If the agent acted in contravention of the principal's instructions. p. In payment. 221.00 to be withdrawn. if the principal was not aware thereof iv. having dealt with one as an agent may be estopped to deny the agency as against the principal.demandable. 401). or accept the benefits of them. a bank has a right of set off of the deposits in its hands for the payment of any indebtedness to it on the part of a depositor. Civil Code.000. Civil Code). 2. 2. less service charges. When it was stipulated that the expenses would be borne by the agent. p. 519). Art. In payment.000. who has a savings deposit with Y Bank in the sum of P1. 162 SCRA 753). When the expenses were due to the fault of the agent iii. IAC. respectively. citing 2 Castan 560 and Francia v.00 which has become due. are present. does not apply. supra). As to third persons – one who knows that another is acting as his agent or permitted another to appear as his agent. Estoppel by the Principal a. he must have known or be charged with knowledge of the transaction and the terms of the agreement between the agent and sub-agent c. claiming that compensation has extinguished its obligation under the savings account to the concurrent amount of X’s debt. Agency by Estoppel: there is no agency at all. As to agent – one knowing another is acting as his agent and fails to repudiate his acts.000. incurs a loan obligation with the said Bank in the sum of P800. is estopped to deny the agency Estoppel of Third Persons – a third person. such capacity is not necessary. compensation took place between the mutual obligations of X and Y Bank. 1279. 1287. UNLESS he proves. the performance must be complete. 365. (Tolentino.

may b) not exist on its own Page 62 of 230 . pledge. commodatum. UNLESS upon receiving them he should make a written statement of the damage and deterioration suffered by the same ii. sell on credit. Commission Agent: One whose business is to receive and sell goods for a commission and who is entrusted by the principal with the possession of goods to be sold. Relativity – binding only between the parties. Autonomy of wills – parties may stipulate anything as long as not illegal. without consent of the principal. strangers cannot demand enforcement. Requisites for stipulation pour autrui: 1) Parties must have clearly and deliberately conferred a favor upon a 3rd person 2) The stipulation in favor of a 3rd person should be a part of. and property which is the object which he purchases or sells of the transaction c) Obligations of a Commission Agent i. Kinds of Contracts Instructions 7. their assigns. donation) As to cause a) b) c) onerous – with valuable consideration gratuitous – founded on liberality remunerative – prestation is given for service previously rendered not as obligation As to importance or dependence of one upon another a) principal – contract may stand alone accessory – depends on another contract for its existence. deposit) c) formal/solemn – perfected by conformity to essential formalities (e. Mutuality – performance or validity binds both parties. make a distinction by counter marks and designate the merchandise respectively belonging to each principal iii. an to be placed in his possession and intermediary between the sellers and disposal the buyer Has a relation with principal. not left to will of one of parties c. principal may demand payment in cash. Stipulation pour autrui 3. etc. immoral. Obligatory Force – parties are bound from perfection of contract d. Exception to relativity: Accion pauliana. as described in the consignment. responsible for the goods received by him. Principal Characteristics: a. merely a go-between. heirs. cannot. Contracts – Meeting of minds bet 2 parties whereby one binds himself with respect to the other to give something or render some service 2.g. Accion directa. liable for damages if agent does not collect the credits of his principal at the time when they become due and Page 171 of 230 As to perfection or formation: a) consensual – perfected by agreement of parties b) real – perfected by delivery (e.g. buyers or maintains no relation with the thing sellers. but the commission agent entitled to any interest/benefit which may result from such sale iv. bears the risk of collection and pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser v. if goods are of the same kind and mark but belonging to different owners. should he do. if a del credere agent receiving guarantee commission. not the whole contract 3) That the favorable stipulation should not be conditioned or compensated by any kind of obligation whatsoever 4) Neither of the contracting parties bears the legal representation or authorization of 3rd party 5) The third person communicates his acceptance before revocation by the original parties 4.CONTRACTS 1. and usually selling in his own name a) Distinction Between Ordinary Agent & Commission Agent Commission agent act on his own name or in that his principal must be in possession of the goods Ordinary agent acts for and in behalf of his principal Need not have possession of principal’s goods b) Distinction Between Commission Agent & Broker Commission agent Broker engaged in the purchase and sale for a no custody or possession of the thing principal of personal property which has he disposes. b.

the purchaser directly (NOTE: A broker is never entitled to commission for unsuccessful efforts.) 4. Law on Double Agency: a) disapproved by law for being against public policy and sound morality EXCEPT where the agent acted with full knowledge and consent of the principals b) Compensation for a Double Agent: i. with knowledge of both principals - recovery can be had from both principals ii. without the knowledge of both principals - the agent can recover from neither iii. with knowledge of one principal - as to the principal who knew of that fact and as to the agent, they are in pari delicto and the courts shall leave them as they were, the contract between them being void as against public policy and good morals 5. Attorney-In-Fact: One who is given authority by his principal to do a particular act not of a legal character. 6. General Agent vs. Special Agent GENERAL AGENT all acts connected with the business or employment in which he is engaged involves continuity of service may bind his principal by an act within the scope of his authority although it may be contrary to the latter’s special instructions apparent authority does not terminate by the mere revocation of his authority without notice to the third party SPECIAL AGENT specific acts in pursuance of particular instructions or with restrictions necessarily implied from the act to be done no continuity of service

c)

preparatory – not an end by itself; a means through which future contracts may be made

As to parties obliged: a) unilateral – only one of the parties has an obligation bilateral – both parties are required to render reciprocal b)
prestations

As to name or designation: a) nominate b) innominate i. Do ut des – I give that you may give ii. Do ut facias – I give that you may do iii. Facio ut des – I do that you may give iv. Facio ut facias – I do that you may do
5. Stages in a Contract a) Preparation – negotiation b) Perfection/birth c) Consummation – performance 6. Essential Elements: a) Consent – meeting of minds between parties on subject matter & cause of contract; concurrence of offer & acceptance

Scope Authority

of

Note: We follow the theory of cognition and not the theory of manifestation. Under our civil law, the offer and acceptance concur only when the offeror comes to know, and not when the offeree merely manifests his acceptance.
• Persons who cannot give consent to a contract: Minors, Insane or demented persons, Illiterates/ deaf-mutes who do not know how to write, Intoxicated and under hypnotic spell Disqualified to enter into contracts: those under civil interdiction, hospitalized lepers, prodigals, deaf and dumb who are unable to read and write, those who by reason of age, disease, weak mind and other similar causes, cannot without outside aid, take care of themselves and manage their property, becoming an easy prey for deceit and exploitation Vices of Consent: violence, intimidation, undue influence Vices of Declaration-simulated contracts – The prestation 1) 2) Within the commerce of man - either existing or in potency Licit or not contrary to law, good customs
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Nature of Service Authorized Extent to Which Agent May Bind the Principal

can not bind his principal in a manner beyond or outside the specific acts which he is authorized to perform

Termination of Authority

Construction of Principal’s

merely advisory in nature

duty imposed upon the third party to inquire makes termination of the relationship as between the principal and agent effective as to such third party unless the agency has been entrusted for the purpose of contracting with such third party strictly construed as they limit the agent’s authority

b)

• • Object

Requisites:

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c)

Possible Determinate as to its kind or determinable w/o need to enter into a new contract Cause – reason why parties enter into contract

3) 4)

Obligations of the Principal to the Agent Comply with all the obligations agent contracted in representation of the principal Advance sums necessary for the execution of the agency, when agent so requests; liable for reimbursement regardless of the undertaking’s success whenever agent had advanced & has no fault; includes interest Reimburse the agent for all advances made by him provided the agent is free from fault Indemnify the agent for all the damages which the execution of the agency may have caused the latter without fault or negligence on his part Pay the agent the compensation agreed upon or the reasonable value of the latter’s services 1. Appointment of Sub-agent - Rules: • If there is no prohibition from the principal and the agent appoints a subagent, the agent is responsible for all the acts of the subagent. • If there is a prohibition but nevertheless the agent appoints a subagent, all the subagent’s acts are void as to the principal. • If there is authority to appoint and subagent is not designated by the principal, the agent will be liable for all the acts of the subagent if the subagent is notoriously incompetent or insolvent. • If there is authority to appoint and subagent is designated by the principal, the agent is released from any liability from the acts of the subagent. 2. Responsibility of 2 or More Agents Appointed Simultaneously: a) General Rule: liable jointly b) Exception: solidarity has been expressly stipulated; each of the agents becomes solidarily liable for (1) the non-fulfillment of the agency; of for (2) the fault or negligence of his fellow agent c) Exception to the exception: when one of the other agent/s acts beyond the scope of his authority – innocent agent is NOT liable NOTE however that if two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. Any of them also revoke the agency. 3. Broker: negotiate contracts relative to property in behalf of others and for a compensation or fee.

Requisites:
1) 2) 3) It must exist It must be true It must be licit

7. Form – required in some kinds of contracts only as contracts are generally consensual; form is a manner in which a contract is executed or manifested a. Informal – may be entered into whatever form as long as there is consent, object & cause b. Formal – required by law to be in certain specified form such as: donation of real property, stipulation to pay interest, transfer of large cattle, sale of land thru agent, contract of antichresis, contract of partnership, registration of chattel mortgage, donation of personal prop in excess of 5,000 c. Real – creation of real rights over immovable prop – must be written General Rule: contract is valid & binding in whatever form provided that 3 essential requisites concur except when form is important: 1) for validity (formal/solemn contracts) 2) for enforceability (statute of frauds) 3) for convenience 8. Reformation of Contracts – remedy to conform to real intention of parties due to mistake, fraud, inequitable conduct, accident.

REQUISITES:
a. b. c. d. e. there is a written instrument there is meeting of minds true intention not expressed in instrument clear & convincing proof facts put in issue in pleadings

Note: Action prescribes 10 years from date of execution of instrument. Remedy not available for: 1) simple donation inter vivos
2) 3) 4) 5) wills when real agreement is void in cases of estoppel when a party has already brought suit to enforce it

When Broker Entitled to Compensation: whenever he brings to his principal a
party who is able and willing to take the property, and enter into a valid contract upon the terms named by the principal, although the particulars may be arranged and the matter negotiated and completed between the principal and
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Obligations of the Agent to the Principal a) GENERAL i. act with utmost good faith & loyalty for the furtherance of principal’s interests ii. obey principal’s instructions iii. exercise reasonable care b) SPECIFIC i. carry out the agency ii. answer for damages which through his non-performance the principal may suffer iii. finish the business already begun on the death of the principal should delay entail any danger (exception to the rule that death extinguishes agency) iv. observe the diligence of a good father in the custody and preservation of the goods forwarded to him by the owner in case he declines an agency, until an agent is appointed v. advance necessary funds if there be a stipulation to do so (except when the principal is insolvent) vi. act in accordance with the instructions of the principal, and in default thereof, to do all that a good father of a family would do (NOTE: A departure from the principal’s instructions may be justified by a sudden emergency, or if the instructions are ambiguous, or if the departure is so insubstantial that it does not affect the result and the principal suffers no damage thereby. Further, an agent has the right to disobey the principal’s instructions when the instruction calls for the performance of illegal acts, or where he is privileged to do so to protect his security interest in the subject matter of the agency.) vii. not to carry out the agency if it would manifestly result in loss or damage to the principal viii. answer for damages if there being a conflict between his & principal’s interests, he prefers his own ix. not to loan to himself if he has been authorized to loan money at interest x. render an account of his transactions and deliver to the principal whatever he may have received by virtue of the agency (If the agent fails to deliver and instead converts or appropriates for his own use the money or property belonging to his principal, he may be charged with ESTAFA.) xi. be responsible in certain cases for the act of the substitute appointed by him xii. pay interest on funds he has applied to his own use

9. Defective contracts: a) Rescissible Contracts – Those which have caused a particular economic damage either to one of the parties or to a 3rd person and which may be set aside even if valid. It may be set aside in whole or in part, to the extent of the damage caused.

Requisites:
1) Rescissible under the Civil Code: i. Contracts entered into by persons exercising fiduciary capacity (a) Entered into by guardian whenever ward suffers damage by more than 1/4 of value of object (b) Agreed upon in representation of absentees, if absentee suffers lesion by more than ¼ of value of property (c) Contracts where rescission is based on fraud committed on creditor (accion pauliana) (d) Objects of litigation; contract entered into by defendant w/o knowledge or approval of litigants or judicial authority (e) Payment by an insolvent – on debts w/c are not yet due; prejudices claim of others (f) Provided for by law - art 1526, 1534, 1538, 1539, 1542, 1556, 1560, 1567 and 1659

2) 3) 4) 5)

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

b) Voidable Contracts – intrinsic defect; valid until annulled; defect is due to vice of consent or legal incapacity, may be ratified

Kinds:
1) those where one of the parties is incapable of giving consent to a contract (legal incapacity) i. minors ( below 18 ) ii. insane unless acted in lucid interval iii. deaf mute who can’t read or write iv. persons specially disqualified: civil interdiction v. in state of drunkenness vi. in state of hypnotic spell
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may seek recourse from the agent principal civilly liable so long as the tort is committed by the agent while performing his duties in furtherance of the principal’s business principal is liable for damages only the agent is liable for damages 7. Jo-Ann asked her close friend.refers to the subject of the thing i.when mistake is mutual and frustrates the real purpose of parties Violence – serious or irresistible force is ii. in excess of authority conferred ( ultra vires) 9. agent in bad faith and prejudices 3rd persons Note: Curable by RATIFICATION 2. Error as to legal effect . Article 1868 of the New Civil Code provides that by the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another. Was there a nominate contract entered into between Jo-Ann and Aissa? In the affirmative. Aissa.when it is the principal consideration of the contract. Both parties having no capacity to contract . reasonable & well-grounded fear of an imminent & grave danger upon person & property of himself.2) those where the consent is vitiated by mistake.2 minor or 2 insane persons NOTE: Agent always liable for fraud but not for negligence. which shall be judged with more or less rigor by the courts. mismanagement of the business by the agent 8. employed to wrest consent Intimidation – one party is compelled by a iii. agent in good faith but prejudices 3rd parties 10. Unauthorized/No sufficient authority – entered into in the name of another when: a. according to whether the agency was or was not for a compensation. principal. (5%) Answer: Yes. c. other is induced to enter into contract w/o w/c he will not enter (dolo causante) Exception: principal takes advantage of a contract or receives benefits made under false representation of his agent c. Bar Question (2003). Page 167 of 230 Note: Curable by ACKNOWLEDGMENT 3. for the agent’s own benefit – principal still liable. there was a nominate contract. of contracting parties. intimidation. which is the object of the contract. extrinsic defect. agent’s motive immaterial principal still responsible for the acts contracted by the agent with respect to 3rd persons. what they entered into was the nominate contract of Agency. however. default or miscarriage of another Agreement made in consideration of promise to marry Page 66 of 230 . violence. no authority conferred b. Agreement to be performed within a year after making contract Special promise to answer for debt. Error as to person . to buy some groceries for her in the supermarket. On the assumption that Aissa accepted the request of her close friend Jo-Ann to buy some groceries for her in the supermarket. Failure to comply with Statute of Frauds a. to the nature of the contract. undue influence or fraud (vice of consent) Mistake . what was it? Explain. tort committed by the agent c) Unenforceable Contracts – valid but cannot compel its execution unless ratified. ascendants or descendants (moral coercion) iv. produce legal effects only after ratified 1. spouse. to the principal conditions in an agreement. Undue influence – person takes improper advantage of his power over will of another depriving latter of reasonable freedom of choice Fraud – thru insidious words or machinations v. b. with the consent or authority of the latter.

Agreement for sale of goods. with improper motives insofar as 3rd persons are concerned (not required to inquire further than the terms of the written power. Imprescriptible g. object or purpose is contrary to law. donation propter nuptias – should conform to formalities of a donation to be valid). no action against each other.scope of authority 3. Anyone may invoke the nullity of the contract whenever its juridical effects are asserted against him KINDS OF VOID CONTRACT: 1) Lacking in essential elements: no consent. he can sue the principal. There is no action for annulment necessary as such is ipso jure. valid (1)3rd person knew agent was acting for his own benefit: principal is not liable to 3rd third person (2) owner is seeking recovery of personal property of which he has been unlawfully deprived 6.Contracts w/c violate any legal provision. Those which cause or object did not exist at the time of the transaction – no cause/object c. Those whose object is outside the commerce of man – no object d. chattels or things in action at price not less than 500. restoration is in order. public order or public policy . principal estopped motive is immaterial. with misrepresentations by the agent a. except if pari delicto will apply e. INCLUDING: a. If performed. remedy of the principal . Those w/c are absolutely simulated or fictitious – no cause b. f. those who come in equity must come with clean hands. does not apply when a superior public policy intervenes Page 67 of 230 . remedy of the third person . as long as within the scope of authority. It cannot be confirmed. d. exception: auction when recorded sale in sales book Agreement for lease of property for more than 1 year & sale of real property regardless of price Representation as to credit of another d) Void or Inexistent Contracts – of no legal effect a.damages for agent’s failure to comply with the agency 2. But when the contract involves things belonging to the principal. morals. Those w/c contemplate an impossible service – no object e. he can sue both. within the scope of authority but in the agent’s name unenforceable as against the principal but binds the agent to the third person not binding on the principal. Those w/c intention of parties relative to principal object of the contract cannot be ascertained 2) Prohibited by law – Those expressly prohibited or declared void by law . Ex: Contract to sell marijuana 4. beyond the scope of the agent’s authority GR: principal not liable Page 166 of 230 IN PARI DELICTO DOCTRINE – both parties are guilty. no cause (inexistent ones) OR essential formalities are not complied with (ex.If the case falls under the general rule. applies only to illegal contracts & not to inexistent contracts. good customs. ratified or cured d. e. The right to set up the defense of nullity cannot be waived f. principal has no cause of action against the 3rd parties and vice versa when ratified or when the principal allowed the agent to act as though he had full powers when the transaction involves things belonging to the principal 1. A judicial declaration to that effect is merely a declaration c. he can sue the agent. authorized principal still liable b. no object. whether it amounts to a crime or not 3) Illegal/Illicit ones – Those whose cause. It produces no effect whatsoever either against or in favor of anyone b. But if it cannot be determined without litigation who is liable. within the scope of the written power of attorney but agent has actually exceeded his authority according to an understanding between him & the principal 5. agent acted within scope of his authority.

to sell ii. Any other act of strict dominion Not Included in the Power to Mortgage: i. To make such payments as are not usually considered as acts of administration ii. plants & growing fruits adhered to soil b) everything attached to an immovable that it will break if separated c) statues. By destination – movables but purpose is to partake of an integral part of an immovable a) machinery placed by owner of the tenement & tend directly to meet the needs of such works/industry b) fertilizers – when applied to soil c) docks & floating structures iv. To lease any real property to another person for more than one year ix. To bind the principal in a contract of partnership xi. without or beyond Page 68 of 230 contract is Page 165 of 230 EXCEPTION/S agent liable if he (1)expressly makes himself liable. 18. (2)exceeds the limits of his authority without giving the parties sufficient notice of his powers binding on the principal . By nature – cannot be moved from place to place because of their nature a) land. return price plus interest Exception: No recovery can be had in cases where nullity of contract arose from illegality of contract where parties are in pari delicto PROPERTY • Requisites: a) Utility b) Individuality/Substantivity c) Susceptibility of appropriation d) Classification of Property I. buildings & all kinds of constructions adhered to soil b) mine. to mortgage for the agent’s or any 3rd persons’ benefit. iii. to renounce the right to appeal from a judgment. To loan or borrow money. paintings if intended by owner to be integral part of immovable d) animal houses if intended by owner to become permanently attached to immovable iii. UNLESS clearly indicated Power to compromise does not include submission to arbitration. unless the latter act be urgent and indispensable for the preservation of the things which are under administration viii. To effect novations which put an end to obligations already in existence at the time the agency was constituted iii. To accept or repudiate an inheritance xiv. Effects of Acts of Agent ACTS OF THE AGENT EFFECT 1. to execute a second mortgage iii. to submit questions to arbitration. agent principal. To waive any obligation gratuitously v. By analogy/by law – contracts for public works. within the not personally liable scope of authority 2. in behalf of the binds principal. return object of contract & fruits 2. to waive objections to the venue of an action or to abandon a prescription already acquired iv. servitude & other real rights over immovable property b) Movable property e) f) the agency should authorize a general and unlimited management Special Powers of Attorney needed: i. To create or convey real rights over immovable property xiii. By incorporation – essentially movables but attached to an immovable that it becomes an integral part of it a) trees. To bind the principal to render some service without compensation x. quarries ii. To make gifts. Classification by Mobility a) Immovable property i. To ratify or recognize obligations contracted before the agency xv. To compromise.MUTUAL RESTITUTION IN VOID CONTRACTS General Rule: parties should return to each other what they have given by virtue of the void contract in case where nullity arose from defect in essential elements 1. To obligate the principal as a guarantor or surety xii. except customary ones for charity or those made to employees in the business managed by the agent vii. To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration vi.

g. cities. vi. Ownership Ownership in General 1. When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent. property of public dominion when no longer intended for public use/service – declared patrimonial b) property belonging to private persons – individually or collectively 2. or from his silence of inaction according to the circumstances 1. the principal should state that he withholds no power ii. disposition. iv. primary purpose is to evidence agent’s authority to third parties within whom the agent deals b) Power of Attorney. municipalities 1. cities & municipalities Characteristics: • outside the commerce of men – cannot be alienated or leased • cannot be acquired by private individual through prescription • not subject to attachment & execution • cannot be burdened by voluntary easement Private Ownership – a) patrimonial property of state. susceptible of appropriation that are not included in enumeration in immovable immovable that are designated as movable by special provision of law forces of nature brought under control by science things w/c can be transported w/o impairment of real property where they are fixed obligations which involve demandable sums (credits) shares of stocks of agricultural. without prejudice to the provisions of the law.when it is oral or written B. Power of Attorney a) Definition: instrument in writing by which one person. Form of Agency: appointment of an agent may be oral or written.the agent is considered such with regard to any person 17.when it can be inferred from the acts of the agent which carry out the agency. and recovery. Way of Giving Notice of Agency & Its Effect a) By special information . enjoyment. provinces. Definitions of Ownership a) Independent and general right of a person to control a thing particularly in his possession. the agent may execute such acts as he may consider appropriate Page 164 of 230 i. consumable – cannot be utilized w/o being consumed 2. Classification by Consumability 1. agent’s sale of real property or any interest therein) 15. Public dominion – a) intended for public use b) intended for public service of state. and he did not reply to the letter or telegram 16. as principal. Between persons who are absent – acceptance not deemed implied from the silence of the agent EXCEPT: a. When the principal transmits his power of attorney to the agent.the person appointed as agent is considered such with respect to the person to whom it was given b) By public advertisement . provinces. commercial & industrial entities although they may have real estate II. b) Power of a person over a thing for purposes recognized by law & within the limits established by law Page 69 of 230 . Between persons who are present – implied acceptance if the principal delivers his power of attorney to the agent and the latter receives it without any objection 2. no formal requirements Exception: when the law requires a specific form (e. v. Express . Implied .14. appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. who receives it without any objection b. exist for attaining economic ends of state 2. subject to no restrictions except those imposed by the state or private persons. ii. non-consumable III. Exception: when strict construction will destroy the very purpose of the power *Sale of a Piece of Land/Any Interest Therein: agent’s authority must be in writing. otherwise sale is void c) Agency Couched in General Terms: covers only MERE ACTS OF ADMINISTRATION even if i. Form of Acceptance by Agent A. held to grant only those specified power. How Construed: strictly construed and strictly pursued. Classification by Ownership 1. iii.

1 year from unlawful deprivation) c) accion publiciana – plenary action to recover possession d) accion reinvindicatoria – recovery of dominion of property as owner 3. either orally or in writing Implied – agency is implied from the acts of the principal. cannot return the object sold Buyer can deal with the thing as he pleases. as a general rule. or from the acts of the agent which carry out the agency. movable – replevin (return of a movable) 2. Right to surface & everything under it only as far as necessary for his practical interest (benefit or enjoyment) 6. being the owner Actions for possession: 1.2. Principle of self help – self defense a) Elements: i. intimidation (physical possession. Classification of Agency owner Buyer pays the price Buyer. immovable – a) forcible entry – used by person deprived of possession through violence. There is actual or threatened unlawful physical invasion of his property iii. As to manner of creation Express – agent has been actually authorized by the principal. if already lost – must resort to judicial process c) May be exercised by 3rd person – negotiorum gestio 4. Distinction Between Agent & Contractor Agent represents his principal acts under the principal’s control and instruction principal is liable for torts committed by the agent within the scope of his authority 13. Right to hidden treasure found in own property a) hidden and unknown movables w/c consist of money or precious objects b) owner is unknown Page 70 of 230 Independent Contractor employed by the employer acts according to his own method employer not liable for torts committed by the independent contractor. 1 year unlawful deprivation) b) unlawful detainer – used by lessor/person having legal right over property when lessee/person withholding property refuses to surrender possession of property after expiration of lease/right to hold property (physical possession. or from his silence or inaction according to the circumstances As to character Gratuitous – agent receives no compensation for his services Onerous – agent receives compensation for his services As to extent of business of the principal General – agency comprises all the business of the principal Special – agency comprises one or more specific transactions As to authority conferred Couched in general terms – agency is created in general terms and is deemed to comprise only acts in the name and representation of the principal Simple or Commission – agent acts in his own name but for the account of the principal Page 163 of 230 . Person exercising rights is owner or lawful possessor ii. Use force as may be reasonably necessary to repel or prevent it b) Available only when possession has not yet been lost. from his silence or lack of action or his failure to repudiate the agency knowing that another person is acting on his behalf without authority. Right to enclose or fence w/o detriment to servitude constituted 5. Attributes: a) b) c) d) e) f) Jus possidendi – right to possess Jus utendi – right to enjoy Jus fruendi – right to fruits Jus abutendi – right to use and abuse Jus disponendi – right to dispose Jus vindicandi – right to exclude others from possession of the thing Agent delivers the proceeds of the sale Agent can return the object in case he is unable to sell the same to a third person Agent in dealing with the thing received is bound to act according to the instructions of his principal 12.

How would you decide the case? Answer: I would decide in favor of Marcelino since he is considered a finder by chance of the hidden treasure.. He succeeds. He has an idea of the land where the treasure might be found. learning of Marcelino’s “find”. Marcelino. Marcelino is not a trespasser since there is no prohibition for him to enter the premises. Leopoldo sues Marcelino for the recovery of the property. he learns that the owner of the land. seeks to recover the treasure from Marcelino but the latter is not willing to part with it. Agency may involve things other than property. he enters the land and conducts a search. agent and 2 persons: lessor and lessee the 3rd person with whom the agent contracts Types of relates to commercial or business relates more to the matters transactions of mere manual or transactions mechanical execution involved 9. Nobody. principle of unjust enrichment) h) true owner must resort to judicial process – when thing is in possession of another. 7. the finder must not be trespasser Basis Powers & agent exercises discretionary lessor ordinarily performs functions powers only ministerial functions Persons involved 3 persons: principal. Guardian is appointed by the court and stands in loco parentis. Upon inquiry. could give him Leopoldo’s exact address. Bar Question (1997). however. Distinction Between Agency to Sell & Sale Agency to sell Sale Agent receives the goods as the principal’s goods Buyer receives the goods as Page 162 of 230 . contract) d) limitations imposed by owner himself (voluntary servitude. still he is a finder by chance since it is enough that he tried to look for it. also if in another’s property. Agent is subject to the directions of the principal. easements) c) specific limitations imposed by party transmitting ownership (will. 11. police power. he is entitled to ½ of the hidden treasure. Ultimately. identify property Page 71 of 230 10. a treasure hunter as a hobby. Failing to reach an agreement. hence. Marcelino contests the action. implying that one who intentionally looks for the treasure is embraced by the provision. mortgages. based on trust & confidence 8. anyway. The reason is that it is extremely difficult to find hidden treasure without looking for it deliberately. Limitation on Ownership a) general limitations for the benefit of the state (eminent domain. Agent can bind the principal. taxation) b) specific limitations imposed by law (servitude. While he may have had the intention to look for the hidden treasure. Leopoldo. has found a map which appears to indicate the location of hidden treasure. By chance the law does not mean sheer luck such that the finder should have no intention at all to look for the treasure. By chance means good luck. Guardianship A guardian represents an incapacitated person. Agent can make the principal personally liable. Leopoldo. hence. Nature of Relationship Between Principal & Agent: Fiduciary. is a permanent resident of Canada. Guardian is not subject to the directions of the ward but must act for the benefit of the latter Guardian has no power to impose personal liability on the ward. Distinction Between Agency & Lease of Service Agency representation Lease of Service employment by chance – if property owner is state – ½ belongs to finder. Distinction Between Agency & Guardianship Agency Agent represents a capacitated person Agent is appointed by the principal and can be removed by the latter. he is entitled to half of the treasure. Distinction Between Agency & Lease of Property Agency Agent is controlled by the principal. law creates a disputable presumption of ownership to those in actual possession i. pledges) e) inherent limitations arising from conflicts with other similar rights (contiguity of property) f) owner cannot make use of a thing which shall injure/prejudice rights of 3rd persons (neighbors) g) acts in state of necessity – law permits injury or destruction of things owned by another provided this is necessary to avert a greater danger (with right to indemnity – vs. Lease of property Lessee is not controlled by the lessor. Lessee cannot bind the lessor.c) 7. Lease of property involves property.

The rule is if a person is capacitated to act for himself or his own right. While the life of an adverse claim is 30 days under P. 6. with the consent or authority of the latter. industrial. Moreover. as to the amount not paid.D.A. But insofar as his obligations to his principal are concerned. it is enough that the principal is capacitated. shall be satisfied according to the following rules: i. Essential Elements: a) consent of the parties to establish the relationship. In the order established in Article 2244. 2. the distinguishing features of agency are its representative character & its derivative authority.D. ii. Jorge had already registered the patent with the Register of Deeds of the province.D. 1529. 1529. 1997. Characteristics: a) consensual b) principal c) nominate d) unilateral. 1529 is good only for 30 days. the inscription thereof will remain annotated as a lien on the property. Will the suit prosper? Answer: The suit will prosper. Recently. Hence. Regina has been leasing foreshore land from the Bureau of Fisheries and Aquatic Resources for the past 15 years. Basis: Representation. was also registered to enforce a final judgment for money against the registered owner. 1997 there having been no formal cancellation of his notice of adverse claim. the BUYER pays to the seller-owner the agreed purchase price in full and registers the corresponding deed of sale. on the basis of a certification by the District Forester that the same is already “alienable and disposable”. provides a 30-day period of effectivity of an adverse claim. covering the same land.D. Section 70 of Presidential Decree No. The acts of the agent on behalf of the principal within the scope of his authority produce the same legal and binding effects as if they were personally done by the principal. b) As to the agent. And he must be capacitated. Purpose: extend the personality of the principal through the facility of the agent 5.ii. While an adverse claim duly annotated at the back of a title under Section 70 of P. insofar as the third persons are concerned. a notice of levy on execution in favor of a JUDGMENT CREDITOR. AGENCY Nature. it continues to be effective until it is canceled by formal petition filed with the Register of Deeds. concerning adverse claims on registered land. but on June 1. otherwise known as the Public Land Act. b) object of the contract is the execution of a juridical act in relation to third persons. foreshore lands are disposable for residential. Will the action prosper? Answer: An action for the annulment of Jorge’s Original Certificate of Title will prosper on the following grounds: 1) Under Chapter IX of C. 141. she learned that Jorge was able to obtain a free patent from the Bureau of Agriculture. 1529) Bar Question (1998). Page 72 of 230 . No. show that he has better title f Those credits which do not enjoy any preference with respect to specific property and those which enjoy preference. reciprocal (if for compensation) e) preparatory 3. or after the lapse of the 30-day period. Common credits referred to in Article 2245 shall enjoy no preference and shall be paid pro rata regardless of dated (Article 2251). Suppose a notice of averse claim based upon a contract to sell was registered on March 1. Property Registration Decree (P. the BUYER brings an action against the JUDGMENT CREDITOR to cancel such annotation. 1529 considering that the levy on execution can not be enforced against the buyer whose adverse claim against the registered owner was recorded ahead of the notice of levy on execution. 4. he can act through an agent. c) agent acts as a representative and not for himself. on June 15. Regina filed an action for annulment of Jorge’s title on the ground that it was obtained fraudulently. cancellation thereof is still necessary to render it ineffective. The cancellation of the notice of levy is justified under Section 108 of P. and he was issued an Original Certificate of Title for the same. 1997 at the instance of the BUYER. Because the annotation of the notice of levy is carried over to the new title in his name. commercial. Form and Kinds of Agency 1. but the latter claims that his lien is superior because it was annotated after the adverse claim of the BUYER had ipso facto ceased to be effective. Capacity of the Parties: a) The principal may be a natural or a juridical person. and d) agent acts within the scope of his authority Page 161 of 230 8. the agent must be able to bind himself. Definition: By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another. otherwise. Then. Bar Question (2000). counted from the date of its registration.

d If there are two or more credits with respect to the same specific real property or real rights. and only by lease when not needed by the government for public service. Regina is a party in interest and the case will prosper because she has a lease contract for the same land with the government. 5) The free patent of Jorge is highly irregular and void ab initio. In contrast with Articles 2241 and 2242. Order of Preference with Respect to Other Properties of the Debtor i. if any. That contract must be respected. 4) The certificate of the district forester that the land is already “alienable and disposable” simply means that the land is no longer needed for forest purposes. Accession continua – accession to products of the thing General Rule: Owner has the right to all natural. usufruct. Article 2244 creates no liens on determinate property which follow such property.administration ix. deposit is gradual & imperceptible 2. which is applicable only for agricultural lands. for the payment of the other credits (Article 2250). Peralta. it is the government that shall institute annulment proceedings considering that the suit carries with it a prayer for the reversion of the land to the state. appearing in public instrument or final judgment NOTES: 1. e The excess. Right of Accession 1. IMMOVABLES – Accession Natural (Accretion) a) Alluvion .D. 6. workmen’s compensation v. they shall be satisfied pro rata. b. but the Bureau of Lands could no longer dispose of it by free patent because it is already covered by a lease contract between BFAR and Regina. antichresis 3. principle of justice 2. after the payment of duties. If there are two or more credits with respect to the same specific movable property. accessory follows the principal 2. support for one year vi. land where accretion takes place is adjacent to banks of river Page 73 of 230 . shall be added to the free property which the debtor may have. (P. However. excluded all others to the extent of the value of the personal property to which the preference refers (Article 2246). fines in crimes viii. 150 SCRA 37 [1987]). Order of Preference of Credits a. as required by the free patent law. taxes x. wages of employees – one year iii. Those credits which enjoy preference in relation to specific real property or real rights.owner of lands adjoining banks of river belongs the accretion gradually received from effects of the water's current Requisites: 1. real or personal. after the payment of the taxes and assessments upon the immovable property or real right (Article 2249). 2. Those credits which enjoy preference with respect to specific movable. it comes under the jurisdiction of the Bureau of Fisheries and Aquatic Resources (BFAR) and can only be acquired by lease. they shall be satisfied pro-rata. lease. Chapter VII of the Public Land Act. In cases of this nature. Under Section 91 of the Public Land Act.5. c. but also because of the false statements made in his sworn application that he has occupied and cultivated the land since July 4. funeral expenses ii. expenses of last illness iv. legal expenses . Article 2244 relates to the property of the insolvent that is not burdened with the liens or encumbrances created or recognized by Article 2241 and 2242. and fees due the State or any subdivision thereof (Article 2247). 1945. donations xii. any patent. What Article 2244 creates are simply rights in favor or certain creditors to have the cash and other assets of the insolvent applied in a certain sequence or order of priority (Republic vs. concession or title obtained thru false representation is void ab initio. support during insolvency vii. after the payment of the credits which enjoy preference with respect to specific property. made through effects of current of water 3. taxes. Page 160 of 230 or similar productive purposes. 705) 3) Free Patent is a mode of concession under Section 41. 2) If the land is suited or actually used for fishpond or aquaculture purposes. industrial & civil fruits Exception: possession in good faith by another. not only because the Bureau has no statutory authority to issue a free patent over a foreshore area. tort xi. Accession – owner of thing becomes owner of everything it may produce or those which may be incorporated or united thereto 1. exclude all others to the extent of the value of the immovable or real right to which the preference refers (Article 8).

the property of any fisherman. while the registered land of Mario on the opposite bank has gradually increased in area by 200-square meters. The land transferred is now contested by Jose and Agustin as riparian owners and Vicente who claims ownership by prescription. 457 CC). Vicente cultivated the said area. therefore. did not adversely affect Jose’s possession and ownership (Art. clergymen. subject to reimbursement for necessary expenses for gathering them & putting them in safe place Change of river bed Right of owner of land occupied by new river course: 1. l) All moneys.one year deposit f) Answer: Jose should prevail. j) So much of the earnings of the debtor for his personal services within the month preceding the levy as are necessary for the support of his family. Owner of adjoining land to old bed shall have right to acquire the same by paying its value – value not to exceed the value of area occupied by new bed 3. Who should prevail? Household furniture and utensils necessary for housekeeping and used for that purpose by the debtor. k) Lettered gravestones. as given in the problem. beside the land of Agustin. 459. not exceeding the total value of one thousand pesos. For many years. it became an avulsion and ownership thereof is retained by Jose who has two years to remove it (Art. Right to trees uprooted if not claimed by owner w/in 6 months. surveyors. the riparian owner (Art. judges. pharmacists. Inasmuch as his possession is merely that of a holder. a like exemption shall exist which shall bear the same proportion to the moneys. chattel mortgage mechanic’s lien laborer’s wages salvage tenancy carrier’s lien hotel’s lien crop loan rentals . g) Provisions for individual or family use insufficient for three months. Mario or Andres? (b) May a third person acquire said 200-square meter land by prescription? Page 74 of 230 NOTE: The foregoing enumeration is not an order of preference (Articles 2248 – 2249) Page 159 of 230 . the Rio Grande river deposited soil along its bank. dentist. m) The right to receive legal support. teachers and other professionals. Bar Question (2003). or any pension or gratuity from the government. (a) Who has the better right over the 200-square meter area that has been added to Mario’s registered land. His land. Rule 39) o) Property under legal custody and of the public dominion. h) The professional libraries of attorney’s. physicians. and if they exceed the sum. benefits. benefits privileges and annuities so accruing or growing out of such insurance that said five hundred pesos bears to the whole premiums paid. of a value not exceeding one thousand pesos. a big flood occurred in the river and transferred the 1000 square meters to the opposite bank. Formation of island in non-navigable river a) owner of margin nearest to islands formed – if nearest to it b) owner of both margins – if island is in the middle (divided into halves longitudinally) 4. belongs by right of accretion to Jose. Right to old bed ipso facto in proportion to area lost 2. building. privileges or annuities accruing or in any manner growing out of any life insurance. such as the debtor may select. by the lawful use of which he earns a livelihood. Vicente’s claim based on prescription is baseless since his possession was by mere tolerance of Jose and. CC). beside the titled land of Jose. if the annual premiums paid do not exceed five hundred pesos. The disputed area. or money or property obtained as such support. Preferred a) b) c) d) e) f) g) h) i) j) k) l) m) Credits with Respect to Specific Movable Property taxes malversation by public officials vendor’s lien pledge. Right to portion of land transferred if not claimed by owner within 2 years (prescription) 2. i) One fishing boat and net. 537. When. he cannot acquire the disputed area by prescription. not exceeding three thousand pesos in value. 3. In time. Ten years later. n) Copyrights and other properties especially exempted by law (Section 12. Andres is a riparian owner of a parcel of registered land.b) c) Avulsion – transfer of a known portion of land from one tenement to another by force of current of waters Rights of riparian owner: 1. such deposit reached an area of one thousand square meters. planting & sowing Bar Question (2001). CC). however. With the permission of Jose. has gradually diminished in area due to the current of the river. engineers. the very same area was “transferred” by flood waters to the opposite bank. which is an alluvion.

because such is an accretion and not a result of the sudden detachment of a known portion of his land and its attachment to Mario’s land. Right of retention ceases when obliged to pay for value of and if he fails to do so Page 75 of 230 Answer: No. 1529. The bank has to sell the property and apply the proceeds to the indebtedness. not a cession. A cession would have transferred ownership to the bank. Oblige the planter. P. However. except when value of lands is greater than thing built – convert to rent Right of Builder in good faith before payment of indemnity of owner in good faith 1. That portion of the land has become part of the public domain. Jagualing v. applying Article 457 of the New Civil Code. for the fulfillment of his obligations. There would have been no need for such authority had there been a cession. the bank does not automatically become owner of the property upon default of the mortgagor. the clause in question is not a pactum commissorium. such as the debtor may select. plants or sows in his land: (OWNER & BUILDER BOTH IN GOOD FAITH) 1.Bar Question (2001). presumption is owner made them at his expense Exception: contrary is proven A. Right to be indemnified or paid of value of property by owner of land 2. Was the assignment of leasehold rights a mortgage or a cession? Why? Answer: The assignment was a mortgage. which provides that “to the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters”. increase in area. because he had lost it by operation of law. He can no longer claim ownership of the portion of his registered land which was gradually and naturally eroded due to the current of the river.D. The fact that the riparian land is registered does not automatically make the accretion thereto a registered land. of the leasehold rights. CA 194 SCRA 607 [1991]). builder to pay for price of land or rent. subject to some exemptions b) Right to receive support as well as any money or property obtained as such support c) Tools and implements necessarily used by him in his trade or employment. Purita assigned her leasehold rights over a stall in the public market in favor of the bank. Right not to be compelled to pay for rent 3. this does not involve the imprescriptibility conferred by Section 47. Accession Industrial General Rule: Whatever is built. d) Two horses. or two cows. Exempt Property a) Family home constituted jointly by husband and wife or by unmarried head of a family. Right to damages and demolition even if with injury to work if owner of land is in bad faith B. or two carabaos or other beasts of burden. Right to retain land & building 2. (Grande v. 521 [1962]. Andres cannot claim that the increase in Mario’s land is his own. does the provision giving the bank the power to sell Purita’s rights constitute pactum commissorium or not? Why? Answer: (a) Mario has a better right over the 200 square meters increase in area by reason of accretion. because it is not included in the Torrens Title of the riparian owner. No. It is pactum commissorium when default in the payment of the loan automatically vests ownership of the encumbered property in the bank. Page 158 of 230 . subject to the exemptions provided by law. Right of owner of material 1. not exceeding one thousand pesos in value and necessarily used by him in his ordinary occupation. the grant of authority to the bank to sell the leasehold rights in case of default is proof that no such ownership was transferred and that a mere encumbrance was constituted. Concurrence and Preference Of Credits 1. e) His necessary clothing and that of all his family. In the problem given. Right to remove materials if he can do so w/o injury to work constructed if owner has not paid 3. 115 Phil. The deed of assignment provides that is case of default in the payment. CA. 2. present and future. planted or sown belongs to owner of land. a third party may acquire by prescription the 200 square meters. B. Liability for Obligations The debtor is liable with all his property. Right of owner when another builds. a process called “avulsion”. and to apply the proceeds to the payment of the loan. Hence. A. To secure a loan obtained from a rural bank. Appropriate as his own after paying for indemnity 2. (b) Yes. the bank shall have the right to sell Purita’s rights over the market stall as her attorney-in-fact. Assuming the assignment to be a mortgage.

a) Because of confusion as to the boundaries of the adjoining lots that they bought from the same subdivision company. and in case of disagreement. 3. 4. (BPI vs. Basically this is a matter of compensation as all the elements of compensation are present in this case. are governed by Art. the court shall fix the terms of the lease. Bar Question (1997). XYZ questioned the above action taken by the bank as being a case of pactum commissorium. 2. or (b) compel X to buy the land if the price of the land is not considerably more than the value of the house. of Builder in good faith when owner is in bad faith Right to indemnity for value of building Right to damages Right to demolish w/o payment of indemnity for third persons without notice like creditors and subsequent encumbrances. Right to be reimbursed for necessary expenses preservation of land E. XYZ defaulted on the due repayment of the loan. no deficiency judgment can be asked and any agreement to the contrary shall be void (Article 1484). Foreclosure of Chattel Mortgage a) Public Sale – if the mortgagor defaults in the payment of the secured debt or otherwise fails to comply with the conditions of the mortgage b) Private Sale – if there is an express stipulation in the contract. 6. If it is. 2.C. Page 157 of 230 Page 76 of 230 . Bad faith on both builder & owner – in pari delicto (no cause of action against each other) G. Deposits of money in banks and similar institutions are governed by the provisions on simple loans (Art1980. b) The absence of the affidavit vitiates a mortgage only as against D. The bank disagrees. Affidavit of Good Faith a) The affidavit of good faith is an oath in a contract of chattel mortgage wherein the parties “severally swear that the mortgage is made for the purpose of securing the obligation specified in the conditions thereof and for no other purpose and that the same is just and valid obligation and one not entered into for the purpose of fraud. The relationship between the depositor and a bank is one of creditor and debtor. X constructed a house on the adjoining lot of Y in the honest belief that it is the land that he bought from the subdivision company. as security for the purchase of personal property payable in installments. When builder is in bad faith & owner in good faith & owner compel builder to remove improvements. Right of builder in bad faith when owner is in good faith 1. When 3rd person is paid by builder. Answer: We submit that there is no pactum commissorium here. with a maturity date of 1 September 1997 to the bank. builder may demand from landowner the value of labor & materials Bar Question (1999). What are the respective rights of X and Y with respect to X’s house? Answer: The rights of Y. 232 SCRA 302). 448 of the Civil Code which grants to Y the right to choose between two remedies: (a) appropriate the house by indemnifying X for its value plus whatever necessary expenses the latter may have incurred for the preservation of the land. Right to be indemnified for value of materials irrespective of good faith or bad faith of builder or owner. and X. if builder has no property. of owner in good faith when builder is in bad faith Right to appropriate what has been built w/o paying indemnity Order demolition of building Compel the builder to pay for price of land or rent Right to damages The registration of the chattel mortgage is an effective and binding notice to other creditors of its existence and creates a real right or a lien which being recorded follows the chattel wherever it goes. Right 1. XYZ Corporation surrendered its deposit certificate. The registration gives the mortgagee the symbolical possession. What is your opinion? F. CA. c) If the chattel mortgage is constituted. 5. prompting the bank to encash the deposit certificate. Civil Code). Right of 3rd person who owns materials 1. 3. Right of Mortgagee to Recover Deficiency a) The creditor may maintain an action for the deficiency although the Chattel Mortgage Law is silent on this point b) The action may be sought within ten (10) years from the time the cause of action accrues. owner is not subsidiarily liable 3. On order to secure a bank loan. as builder of a house thereon. Right 1. as owner of the lot. whether by the debtorvendee or a third person. 7. then X cannot be obliged to buy the land but he shall pay reasonable rent. owner is subsidiarily liable 2.

MOVABLES – A. transformation a) Rights: Page 77 of 230 . A chattel mortgage is: a) an accessory contract because it is for the purpose of securing the performance of a principal obligation. v. Y continues as owner of the lot and becomes. If both are in good faith – owner of principal acquired the accessory with indemnification If both are in good faith – may separate them if no injury will be caused. Intermediate Appellate Court. 2. c) It has been ruled however that if the chattel mortgage is not recorded. The parties. 4. or (b) demand payment of the value of the house plus reparation for damages (Art 447. the registration must be in both registers (Section 4. if the property as situated in a different province from that in which the mortgagor resides. the chattel mortgage is void. Specification – One employs the materials of another in whole or in part on order to make a thing of a different kind. that to w/c the other intended to be united as ornament or for its use of perfection ii. Conjunction / adjunction – 2 movable things which belong to different owners are united to form a single object a) Test to determine w/c one is the principal: i. the mortgage of which had been registered both with the Land Transportation Commission and the Chattel Mortgage Registry is order to affect third persons f) House which is intended to be demolished g) Growing crops and large cattle (section 7. Inc. value iii. 122 SCRA 296 [1983]. ii. the mortgage of which have been recorded with the Philippine Coast Guard in order to be effective as to third persons e) Motor vehicles. may agree on an extrajudicial foreclosure in the same manner as they are allowed in contracts of mortgage and pledge b) Suppose X was in good faith but Y knew that X was constructing on his (Y’s) land but simply kept quiet about it. b) Under the Chattel Mortgage Law. volume b) Rights i.a) b) To bring an action for specific performance To petition for the sale of the real property as in a foreclosure of mortgages under Rule 68 of the Rules of Court. iii. owner of accessory may demand separation even if damages will be caused to the principal (expenses to be borne by one who caused the conjunction) If owner of accessory is in bad faith – owner of accessory with damages to principal If owner of principal is in bad faith – owner of accessory shall have option of principal paying value of accessory or removal of accessory despite destruction of principal Owner of accessory or principal has right to indemnity when thing adjuncts w/o his consent – may demand that a thing equal is kind. value and price B. Subject Matter of Chattel Mortgage a) Shares of stock in a corporation b) Interest in business c) Machinery and house of mixed materials treated by parties as personal property and no innocent third person will be prejudiced thereby (Makati Leasing and Finance Corporation vs. in relation to Art. (Filipinas Marble Corporation vs. d) Vessels. 1508). paragraphs 2 and 3. b) a formal contract because for its validity. it is nevertheless binding between the parties. iv. Act No. Weaver Textile Mills. Act No. What are the respective rights of the parties over X’s house in this case? Chattel Mortgage 1. 142 SCRA 180 [1986] 4.. owner of the house as well. however. if value of accessory is greater than principal. 1508) 3. thinking perhaps that he could get X’s house later. Creation of Chattel Mortgage a) The registration of the personal property in the Chattel Mortgage Register as security for the performance of an obligation. X as the party in good faith may (a) remove the house and demand indemnification for damages suffered by him. under the second option. otherwise. after he pays the sums demanded. Effect of Registration Page 156 of 230 Answer: Since the lot owner Y is deemed to be in bad faith (Art. 453). c) a unilateral contract because it produces only obligations on the part of the creditor to free the thing from the encumbrance upon fulfillment of the obligation. registration in the Chattel Mortgage Register is indispensable. 454).

contract has been extinguished or terminated 2. Posting of notice of sale in at least 3 public places therein c.he shall appropriate the thing transformed as his own with indemnity to owner of material for its value If material is more precious than transformed thing – owner of material may appropriate the new thing to himself after indemnity paid to labor or demand indemnity for materials If person who made the transformation is in bad faith. delivery. remove cloud 2. iv. The property delivered stands as a security for the payment of the obligation of the debtor in antichresis. with the obligation to apply them to the payment of the interest. 3135 as amended. Action to remove cloud a) intended to procure cancellation. Public auction must be conducted in the province where the property is situated. otherwise the contract of antichresis is void. the mortgagee is entitled to recover the deficiency. b) apply the fruits. encumbrance. Action to quiet title a) put end to vexatious litigation in respect to property involved. Right of Mortgagee to Recover Deficiency If there be a balance due to the mortgagee after applying the proceeds of the sale. No. contract has prescribed 3. 3. The fruits of the immovable which is the object of the antichresis must be appraised at their actual market value at the time of the application. if owing and thereafter to the principal of his credit. and thereafter to the principal (Article 2132) in accordance with the provisions of Article 2133 or 2138 6. owner of material cannot appropriate ii. Publication in a newspaper of general circulation d.• i. release of an instrument. plaintiff asserts his own estate & generally declares that defendant’s claim is w/o foundation b) When proper: 1. If both owners are in good faith – Each owner shall acquire a right proportional to the part belonging to him (vis-a-vis the value of the things mixed or confused) If one owner is in bad faith – he shall lose the thing belonging to him plus indemnity for damages caused to owner of other thing mixed with his thing If both in bad faith no cause of action against each other 1. Extrajudicial Foreclosure governed by Act. or claim constituting a on plaintiff’s title which may be used to injure or vex him in the enjoyment of his title Page 78 of 230 5. a. Hence. Quieting of Title 1. The action to recover a deficiency after foreclosures prescribes after ten (10) years from the time the right of action accrues. iii. if and when the mortgagee is given a specific power or express authority to do so. owner of material shall appropriate the work to himself w/o paying maker or demand indemnity for value of materials & damages If transformed thing is more valuable than material. b. if owing. 4. iii. C. Obligations of Antichretic Creditor a) pay the taxes and charges upon the estate. Commixtion / confusion – 2 things of the same or different kinds are mixed & are not separable w/o injury a) Rights: i. Remedy of Creditor in Case of Default Page 155 of 230 . 2. Debtor has the right to redeem the property sold within the term of one year from and after the date of the registration of sale (Section 6). Antichresis is a contract whereby the creditor acquires the right to receive the fruits of an immovable of his debtor. Personal notice to mortgagor is not required e. 9. Characteristics a) accessory contract b) formal contract because the amount of the principal and of the interest must both be in writing. after receiving them to the interest. the debtor cannot demand its return until the debt is totally paid. If person who made the transformation is in good faith . Antichresis ii.

v. 4. no repair made – owner. 2. b) The mortgagor’s default does not operate to vest in the mortgagee the ownership of the encumbered property. none in co-ownership • partnership can be created for more than 10 years. Co-ownership a) plurality of subjects – many owners b) unity of material (indivision) of object of ownership c) recognition of ideal shares Sources: i. it follows the property wherever it goes and subsists notwithstanding changes of ownership. co-ownership is collective enjoyment of a thing • in partnership there is juridical personality distinct from individuals. specially subjecting to such security immovable property or real rights over immovable property in case the principal obligation is not complied with at the time stipulated. A mortgage creates a real right. The objects of a real mortgage are immovable (Article 415) and alienable real rights imposed upon immovables. in order to give them to the mortgagor. Effect of Mortgage a) The only right of a mortgagee in case of non-payment of a debt secured by real mortgage would be to foreclose the mortgage and have the encumbered property sold to satisfy the outstanding indebtedness. growing fruits and rents or income (see Article 2102) as well as to the proceeds of insurance should the property be destroyed of the expropriation value of the property should it be expropriated. 3. a lien inseparable from the property mortgaged. it must appear in a public document duly recorded in the Registry of Property NOTE: If the instrument of mortgage is not recorded. state may compel him to demolish or make necessary work to prevent if from falling c) if no action – done by government at expense of owner Co-Ownership 1. not in co-ownership • distribution of profits in partnerships may be stipulated. not in coownership • partners cannot transfer rights w/o consent of other co-partners. Need not be in possession of property 3. 5. improvements.Real Mortgage 1. co-ownership has many sources • purpose of partnership is to obtain profit. iv. Until discharged. the mortgage is nevertheless binding between the parties. 8. which is enforceable against the whole world. architect or contractor b) collapse resulting from total or partial damage. Extent of Mortgage General Rule: Not limited to the property itself but also extends to all its accessions. and pays the latter a certain percent thereof as interest on his principal by way of compensation for his sacrifice in depriving himself of the use of said money and the enjoyment of its fruits. b) c) Cloud – any instrument which is inoperative but has semblance of title Requisites: 1. this is not flexible in co-ownership but depends on ideal share/interest 2. Plaintiff must have legal or equitable interest 2. In order that a mortgage may be validly constituted. Page 154 of 230 Law Contracts succession fortuitous event/chance – commixtion occupancy – 2 persons catch a wild animal Distinguished from partnership: • partnership created only by agreement. Real Mortgage is a contract whereby the debtor secures to the creditor the fulfillment of a principal obligation. The mortgagor. not co-ownership • partnership extinguished when partner dies. 6. retains possession of the property mortgaged as security for the payment of the sum borrowed from the mortgagee. 7. Foreclosure of Mortgages • Judicial foreclosure governed by Rule 68 of the Rules of Court. Return to defendant all benefits received – he who wants justice must do justice Ruinous Buildings and Trees in Danger of Falling Liability for damages: a) collapse – engineer. as a general rule. iii. ii. Rights of co-owners Page 79 of 230 .

delay or violation of the terms of the contract. if the price of the sale is less. controlling interest. the debtor cannot demand for its return until the debt secured by it is paid. (Article 2100) The pledgee has no right to use the thing pledged or to appropriate the fruits thereof without the authority of the owner. but can’t be made if prejudicial to co-ownership g) Right to make repairs for preservation of things can be made at will of one co-owner. stipulation to contrary is void b) Right to use thing co-owned i. for purpose for which it is intended ii. He is entitled to reimbursement of the expenses incurred for its preservation and he is liable for loss or deterioration by reason of fraud. Exception: Pledgor is allowed to substitute the thing pledged which is in danger of destruction or impairment with another thing of the same kind and quality (Article 2107). except personal rights like right to use and habitation j) Right to ask for partition anytime k) Right of pre-emption l) Right of redemption m) Right to be adjudicated thing (subject to right of others to be indemnified) n) Right to share in proceeds of sale of thing if thing is indivisible and they cannot agree that it be allotted to one of them 3. Hence. if the thing is in danger of being lost or impaired because of the negligence or willful act of the pledge. income. requisites for acquisition through prescription i. Exception: stipulation authorizing pledgee to transfer possession. When the thing pledged is later found in the hands of the pledgor or the owner. neither is the creditor entitled to recover the deficiency. assign or mortgage own part. resort to court if non-consent is manifestly prejudicial e) Duty to obtain consent of majority with regards to administration and better enjoyment of the thing. The possession of the thing pledged by the debtor or owner subsequent to the perfection of the pledge gives rise to a prima facie presumption that the thing has been returned and. if practicable h) Right to full ownership of his part and fruits i) Right to alienate. receive reimbursement therefrom. 1170). But the pledgee can apply the fruits. Pledgor cannot ask for the return of the thing pledged until said obligation is fully paid including interest due thereon and expenses incurred for its preservation (Article 2099). The sale of the thing pledged extinguishes the principal obligation whether the price of the sale is more or less than the amount due. (Articles 1174. 2. Pledgee has the obligation to take care of the thing pledged with the diligence of a good father of the family. dividends. A contrary stipulation is void (Article 2115). not the principal obligation itself (Article 1274). stipulation to contrary is void b) Pay necessary expenses and taxes – may be exercised by only one coowner c) Pay useful and luxurious expenses – if determined by majority d) Duty to obtain consent of all if thing is to be altered even if beneficial. such act of repudiation is made known to other co-owners iii. Pledgee is not authorized to transfer possession of the thing pledged to a third person. • In the same way. 3. that the pledge has been extinguished. Page 153 of 230 1. without prejudice to interest of ownership iii.Right to benefits proportional to respective interest. g) h) i) j) . notice of necessity of such repairs must be given to co-owners. the debtor is not entitled to the excess unless the contrary is provided. evidence must be clear and convincing g) Co-owners cannot ask for physical division if it would render thing unserviceable. But the right of retention is limited only to the fulfillment of the principal obligation for which the pledge was created. or interest. if owing and thereafter to the principal of his credit. he has repudiated through unequivocal acts ii. If the price of the sale is more than the amount due the • creditor. therefore. court intervention if prejudicial – appointment of administrator f) No prescription to run in favor co-owner as long as he recognizes the co-ownership. Duties/Liabilities a) Share in charges proportional to respective interest. negligence. Exception: contrary stipulation f) The pledgor may ask that the thing pledged be deposited judicially or extrajudicially -if the creditor uses the thing without authority. but can terminate co-ownership Page 80 of 230 a) b) c) d) e) The possession of the pledgee constitutes his security. without preventing other co-owners from making use thereof c) Right to change purpose of co-ownership by agreement d) Right to bring action in ejectment in behalf of other co-owner e) Right to compel co-owners to contribute to necessary expenses for preservation of thing and taxes f) Right to exempt himself from obligation of paying necessary expenses and taxes by renouncing his share in the pro-indiviso interest. if he misuses the thing in any other way (Article 2104). only the accessory obligation of pledge is presumed remitted.

the thing delivered shall be returned with all its fruits and accessions. an innocent purchaser for value (like a mortgagee) relying on a torrens title issued is protected. material occupation – possession as a fact 1. physical 2. tenant) subject to action of our will. d) A stipulation whereby the thing pledged or mortgaged or under antichresis (Article 2137) shall automatically become the property of the creditor in the event of non-payment of the debt within the term fixed is known as pactum commisorium or pacto commissorio which is forbidden by law and declared null and void (article 2088) 5. The thing pledged must be delivered to the creditor or to a third person by common agreement.tradicion brevi manu (one who possess a thing short of title of owner – lease ). duty to render mutual accounting of benefits and reimbursements for expenses Every co-owner liable for defects of title and quality of portion assigned to each of the co-owner 4. Provisions Applicable only to Pledge a) The pledgor retains his ownership of the thing pledged. ii. tradicion longa manu – pointing out to transferee the things which are being transferred c.Pledge 1. constructive . proper acts and legal formalities established for acquiring rights – donation. tradicion constitutum possesorium (owner alienates thing but continues to possess – depositary. The pledgor or mortgagor is the absolute owner of the thing pledged or mortgaged iii. and in the absence thereof. He may. sale Rule. dates of possession the same – one who presents a title 4. 4. Rights of 3rd parties a) creditors of assignees may take part in division and object if being effected without their concurrence. Possession – holding of a thing or enjoyment of a right Elements of possession: a) occupancy – actual or constructive (corpus) b) intent to possess (animus) How acquired: a. tradicion simbolica – delivering object or symbol of placing thing under control of transferee (keys) 2. Page 81 of 230 . The pledge is constituted to secure the fulfillment of a principal obligation. sell the same provided the pledgee consents to the sale.possession as a right 1. c) While it is true that under Article 2085 it is essential that the mortgagor be the absolute owner of the property mortgaged. 5. 2. pledgee.cannot be recognized at the same time in 2 different personalities except co-possession Question arises regarding fact of possession. 2. Essential Requirements i. that they be legally authorized for the purpose. Pledge is a contract by virtue of which the debtor delivers to the creditor or to a third person a movable (Article 2094) or document evidencing incorporeal rights (Article 2095) for the purpose of securing the fulfillment of a principal obligation with the understanding that when the obligation is fulfilled. but cannot impugn unless there is fraud or made notwithstanding their formal opposition b) non-intervenors – retain rights of mortgage and servitude and other real rights and personal rights belonging to them before partition was made Possession 1. 4. Characteristics a) real b) accessory contract c) unilateral contract d) subsidiary contract 3. Stated differently. iv. therefore. Common Provisions Governing Pledge or Mortgage a) Contract may be constituted only by the absolute owner of the thing pledged or mortgaged otherwise. 2 possessors – one longer in possession 3. preference: 1. a mortgagee has the right to rely upon what appears in the certificate of title and does not have to inquire further. the pledge or mortgage is void. b. present possessor preferred 2. such as that constituted by an impostor b) A mortgage of conjugal property by one of the spouses is valid only as to one-half (1/2) of the entire property. Page 152 of 230 h) i) After partition. The persons constituting the pledge or mortgage have the free disposal of their property. both have titles – judicial resolution 3.

unless it be of such nature that it cannot be extinguished except within a period longer than ten years. bring actions necessary to protect possession c. possession with just title from true owner 8. guaranty is terminated when the principal obligation is extinguished b) c) d) creditor has released the guarantor although the principal obligation remains (Article 2078) In case of material alteration Release of one guarantor by the creditor without the consent of the other guarantors benefits all to the extent of the share of the guarantor released (Article 2078). subject to authority and ratification if not authorized. as when the creditor releases or fails to register a mortgage. 2. 6. mistake upon doubtful question of law. demand fruits and damages from one unlawfully detaining property in concept of holder – usufruct. In case of insolvency of the principal debtor. If the principal debtor is in imminent danger of becoming insolvent (Article 2071). negotiorum gestio a. possession with just title but not from true owner 4. After the lapse of ten years. Minors/ Incapacitated Page 82 of 230 Page 151 of 230 . Guarantor may either obtain release from the guaranty or demand a security that shall protect him from any proceedings by the creditor and from danger of debtor’s insolvency (Article 2071). 3. Possession through succession Rules: 1. it may be interrupted – by extraneous evidence or suit for recovery of property of true owner in bad faith – aware of defect a. The same rules applies even though the guarantors be solidarily (Article 2080). When the debtor has bound himself to relieve him from the guaranty within a specified period. Classes of possession: 1. c) Effects of Guaranty as Between Co-guarantors i. and this period has expired. Degrees of possession: 1. he must have capacity to acquire possession b. 9. always presumed. e) f) 2. representative has intention to acquire for another and not for himself b. the guarantors are thereby released. 8. lessee. ask for inscription of possession d. when the principal obligation has no fixed period for its maturity. holding w/o title and in violation of right of owner 2.6. bailee in oneself – personal acquisition a. possession with juridical title but not that of owner 3. in concept of owner – owner himself or adverse possessor f) g) h) i) j) k) Effects: may be converted into ownership through acquisitive prescription b. If there are reasonable grounds to fear that the principal debtor intends to abscond. person from whom it is acquired has intention of possessing it in good faith – not aware that there exist flaw in title or mode w/c invalidates it. 10. Requisites: a) b) payment must have been made by virtue of a judicial demand or because the principal debtor is insolvent 5. If there can be no subrogation because of the fault of the creditor. possibility to acquire possession in name of another – agent. but effects of possession in good faith shall not benefit him except from date of death of decedent. Extinguishment of Guaranty a) Being accessory and subsidiary. What can be subject of possession – things or rights which are susceptible of being appropriated 7. one who has paid the entire debt may seek reimbursement from each of his co-guarantors the share which is proportionately owing him. One who succeeds by hereditary title shall not tack the bad faith of predecessors in interest except when he is aware of flaws affecting title. Possession of hereditary property is deemed transmitted w/o interruption from moment of death (if accepted) and if not accepted (deemed never to have possessed the same). An extension of the term granted by the creditor to the debtor without guarantor’s consent extinguishes the guaranty (Article 2029). intent to possess c. When the debt has become demandable by reason of the expiration of the period for payment. 4.

if disturbed – protected by means established by law. requires the debtor’s consent. clandestine and unknown acts iii. The guarantor who pays for a debtor must be indemnified by the latter. even though it did not earn interest for the creditor. if possessor in good faith refuses – barred from indemnification in other manner h) Possessor has right to be indemnified for necessary expenses whether in good faith or in bad faith. A compromise between the creditor and the principal debtor benefits the guarantor but does not prejudice him. they are not liable beyond the shares which they are respectively bound to pay (Article 2065). Guarantor’s liability is only joint therefore. if they are due (Article 2066) Exceptions: Where the guaranty is constituted without the knowledge or against the will of the principal debtor. c) The expenses incurred by the guarantor after having notified the debtor that payment had been demanded of him. spoliation b) Possession acquired and enjoyed in concept of owner can serve as title for acquisitive prescription i. however. Exceptions: a) solidarity b) if any of the circumstances in Article 2057 should take place. Acquisition a) cannot be acquired through force or intimidation when a possessor objects thereto – resort to courts b) the following do not affect acts of possession ( not deemed abandonment of rights ). acts of violence 12. Guarantor has the right to proceed against the debtor even before payment in the following instances: e) When he is sued for the payment. Rights of possessor: a) Right to be respected in his possession.ii. Guarantor is likewise entitled to the benefit of division where there are several guarantors of only one debtor and for the same debt. Title short of ownership c) Person in concept of owner has in his favor the legal presumption of just title (prima facie) d) Possession of real property presumes that movables are included e) Co-possessors deemed to have exclusively possessed part which may be allotted to him. Guarantor has the right of subrogation against the debtor to enable him to enforce the indemnity granted in Article 2066 and he cannot demand more than what he actually paid (Article 2067).unless owner exercises option of paying. iii. d) Damages. Page 150 of 230 . iii. public. Page 83 of 230 b) Between the Debtor and the Guarantor i. interruption in whole or in part shall be to the prejudice of all f) Possessor in good faith entitled to fruits received before possession is legally interrupted (natural and industrial – gathered or severed. may only acquire them through guardian or legal representatives 11. Possession has to be in concept of owner. – may acquire material possession but not right to possession. a) ii. A compromise which is entered into between the guarantor and the creditor benefits but does not prejudice the principal debtor (Article 2063). the guarantor can recover only insofar as the payment had been beneficial to the debtor (Article 2050) b) Payment by a third person who does not intend to be reimbursed by the debtor is deemed to be a donation. owner has option to require possessor to finish cultivation and gathering of fruits and give net proceeds as indemnity for his part of expenses. civil – accrue daily) g) Possessor in good faith entitled to part of net harvest and part of expenses of cultivation if there are natural or industrial fruits ( proportionate to time of possession ). owner has option of paying expenses or paying the increase in value of property which thing acquired by reason of useful expenses j) Possessor in good faith may remove improvements if can be done w/o damage to principal thing. But the payment is in any case valid as to the creditor who has accepted it (Article 1238) c) The right to demand reimbursement is subject to waiver. acts merely tolerated ii. possession not interrupted i. possessor in bad faith not entitled. The indemnity comprises: a) the total amount of the debt. Possessor in good faith has right of retention over thing unless necessary expenses paid by owner i) Possessor in good faith has right to be reimbursed for useful expenses with right of retention. peaceful and uninterrupted ii. which. b) the legal interest thereon from the time the payment was made known to the debtor.

Guarantor has the right to the benefit of excussion or exhaustion of the debtor’s property before he can be compelled to pay. 669) Page 149 of 230 e) f) g) h) i) . 68 Phil. and future obligations (Article 2052). Price. 13. Sale under order of the court v. The qualifications of a guarantor are: a) He possesses integrity. bound thereby (see Articles 1159. is therefore. intent to lose the thing b) assignment made to another by onerous or gratuitous title c) destruction or total loss of the thing or thing went out of commerce d) possession of another if new possession lasted longer that 1 year ( possession as a fact). unenforceable. 7. and c) He has sufficient property to answer for the obligation which he guarantees 7. domesticated – possessed if they retain habit of returning back home n) One who recovers. Loss of possession: a) abandonment of the thing – renunciation of right. the creditor. 5. possession unjustly lost is deemed to have enjoyed it w/o interruption 4. fairs or markets vi. 6. natural. Guaranty is an accessory contract therefore there must be a valid principal obligation for guaranty to be valid. b) He has capacity to bind himself. 1306). according to law. Where the creditor has required and stipulated that a specified person should be a guarantor. Purchases made at merchant stores. the substitution of guarantor may not be demanded (Article 2057) because in such a case the selection of the guarantor is a term of the agreement and as a party. Guarantor may secure the performance of voidable.k) Possessor in good faith and bad faith may not be entitled to payment for luxurious expense but may remove them provided principal is not injured – provided owner does not refund the amount expended l) Improvements caused by nature or time to inure to the benefit of person who has succeeded in recovering possession m) Wild animals possessed while in one’s control. real right of possession not lost except after 10 years 15. Possession is equivalent to title Page 84 of 230 Exceptions: a) b) c) d) if guarantor has expressly renounced excussion if guarantor has bound himself solidarily with the debtor (suretyship) in case of debtor’s insolvency when guarantor has absconded or cannot be sued within the Philippines unless he left a manager or representative if it may be presumed that an execution on the debtor’s property will not satisfy the obligation if guarantor does not set up the benefit of excussion and fails to point out to the creditor available property of the debtor within the Philippines if he is a judicial bondsman and sub-surety where a pledge or mortgage has been given by the guarantor as a special security if guarantor fails to interpose it as a defense before judgment is rendered against him (Saavedra vs. Guaranty cannot be presumed. conditional. Possession Not Lost: a) Even for time being he may not know their whereabouts. Effects of Guaranty a) Between the Guarantor and the Creditor i. Unlawfully deprived or lost ii. Negotiable document of title 16. The rule of strictissimi juris commonly refers to an accommodation surety and is not applied in case of compensated sureties. Guarantor’s liability cannot exceed the principal obligation (Article 2054). possession of movable is not deemed lost b) When agent encumbered property without express authority – except when ratified c) Possession may still be recovered: i. Acquired at public sale in good faith – with reimbursement iii. Provision of law enabling the apparent owner to dispose as if he is owner iv. Liabilities/Duties of Possessor a) Return of fruits if in bad faith – fruits legitimate possessor could have received b) Bear cost of litigation c) Possessor in good faith not liable for loss or deterioration or loss except when fraud and negligence intervened d) possessor in bad faith liable for loss or deterioration even if caused by fortuitous event e) Person who recovers possession not obliged to pay for improvements which have ceased to exist at time of occupation 14.

his family. theft or robbery by a stranger (not by hotelkeeper’s servant or employee) with the use of arms or irresistible force (Article 2001). intended for sale iii. growing fruits at termination of usufruct belongs to owner g) Right to necessary expenses from cultivation at end of usufruct h) Right to enjoy accessions & servitudes in its favor & all benefits inherent therein i) Right to make use of dead trunks of fruit bearing trees & shrubs or those uprooted/cut by accident but obliged to plant anew Page 85 of 230 Page 148 of 230 . b.. 2. may still exercise act of ownership –bring action to preserve f) Right to fruits growing at time usufruct begins. 1. the hotelkeeper is apparently negligent. b) The loss is due to the acts of the guests. 1174). 3.parents over children voluntary – contracts.b) The loss is cause by the act of a thief or robber done without the use of arms and irresistible force (Article 2001) for in this cause. natural & industrial fruits of property b) Right to hidden treasure as stranger c) Right to transfer usufructuary rights – gratuitous or onerous. Suretyship Surety is primarily liable and is therefore not entitled to the exhaustion of the properties of the principal debtor Surety assumes liability as a regular party to the undertaking and undertakes to pay if the principal does not pay. fruits proportionate at duration of usufruct. Guaranty is a contract whereby a person binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. 3. if not appraised & consumable – return same quality (mutuum) d) Right not exempt from execution and can be sold at public auction by owner e) Naked owner still have rights but w/o prejudice to usufructuary. Kinds: a) b) c) d) e) f) g) h) i) j) legal . Consumable ii. Guaranty 1. wills mixed – prescription total partial simultaneous successive pure conditional With a term accessory subsidiary and conditional unilateral requires that the guarantor must be a person distinct from the debtor 3. Rights of usufructuary: a) Right to civil. servants or visitors (Article 2002). etc. Guarantor is an insurer of the debtor’s solvency. appraised when delivered. Guarantor binds himself to pay only when the principal cannot pay. c) The loss arises from the character of the things brought into the hotel (Article 2002). Characteristics a. c. Stipulations on exemption or diminution of liability is void (Article 2003). Distinction between Guaranty and Suretyship Guaranty Guarantor is secondarily liable. but can’t do acts of ownership such as alienation or conveyance except when property is: i. a) b) c) Usufruct possession is in good faith owner has voluntarily parted with the possession of the thing possessor is in concept of an owner 2. 4. but is coterminus with term of usufruct. Hotelkeeper has a right to retain the things of guests as security for unpaid lodging expenses and supplies. Surety is an insurer of the debt. d. fire (Article 2000). Hotelkeeper is not liable in the following cases: a) The loss or injury is caused by force majeure like flood. unless he is guilty of fault or negligence in failing to provide against the loss or injury from said cause (see Article 1170. Usufruct – right to enjoy another’s property with correlative duty of preserving its form and substance a) things – movable/immovable b) rights – provided it is not strictly personal 2.

if deposit is gratuitous. usufructuary has no liability when due to wear & tear. Obligations of Depositor a) He is obliged to pay expenses for the preservation of the thing deposited. and Page 147 of 230 4. The judicial deposit of a thing. savings and current. b. iii. whose who have right to fruits should reimburse expenses incurred b) Generally. whether fixed. Those required in suits as provided in the Rules of Court. then he shall be liable c) Before entering into usufructuary: 1. owner may demand that: a. depositary may avail of consignation therefore there is no right to return before expiration of the term designated if deposit is for valuable consideration (Article 1989). The deposit of a thing pledged when the creditor uses the same without the authority of the owner or misuses it in any other way (Article 2104) iv. cannot cut down trees unless it is for the restoration of improvement of things in usufruct – must notify owner first k) Right to leave dead. In this last case. obliged to return in that state. immovables be placed under administration Page 86 of 230 . the deposit arises from an obligation of public or administrative character. Notice of inventory of property (appraisal of movables & description) 2. except when there is fraud or negligence. may remove improvement if can be done w/o damage o) Right to set-off improvements against damages he made against the property p) Right to administer when property is co-owned. not required by law or no one will be injured • for failure to give security. Necessary deposit in compliance with a legal obligation i. b) He is obliged to pay for losses incurred due to the character of the thing deposited. and v.j) Right of usufructuary of woodland – ordinary cutting as owner does habitually or custom of place. Relation between Bank and Depositor Deposits of money in banks. are governed by the provisions on mutuum and the relation between a depositor and a bank is that of a creditor and a debtor. 14. Rights of naked owner a) Alienate thing b) Can’t alter form or substance c) Can’t do anything prejudicial to usufructuary d) Construct any works Y make any improvement provided it does not diminish value or usufruct or prejudice right of usufructuary 5. Necessary deposit made on the occasion of a calamity. c. Those constituted to guarantee contracts with the government. Obligations of usufructuary: a) Pay expenses to 3rd persons for cultivation & production at beginning of usufruct. Hotelkeeper is liable regardless of the amount in the following cases: a) The loss or injury is caused by his servants or employees as well as by strangers provided that notice has been given and proper precautions taken. Deposit by travelers in hotels and inns NOTES: 1. (Article 1998). thing deteriorates. ii. Posting of security • not applicable to parents who are usufructuary of children except when 2nd marriage contracted • excused – allowed by owner. or d) depositary was aware of it without depositor’s advice (Article 1993) NOTE: Depositary has the right to retain the thing deposited in pledge until full payment of what may be due him by reason of the deposit (Article 1994). 15. the possession of which is being disputed in a litigation by two or more persons (Article 538). The deposit with a bank or public institution of public bonds or instruments if credit payable to order or bearer given in usufruct when the usufructuary does not give proper security for their conservation (Article 586). a) unless depositor was not aware thereof Exceptions: b) depositor was not expected to know the dangerous character of the thing c) unless he notified the depositary of the same. if co-ownership cease – usufruct of part allotted to co-owner belongs to usufructuary – not affected q) Right to demand the increase in value of property if owner did not spend for extraordinary repairs when urgent & necessary for preservation of thing NOTE: Otherwise. Necessary Deposit a. 16. uprooted trees at the disposal of owner with right to demand that owner should clear & remove them – if caused by calamity or extraordinary event – impossible to replace them l) Right to oblige owner to give authority & furnish him proofs if usufruct is extended to recover real property or real right m) Right to necessary expenses n) Right to introduce useful & luxurious expenses but with no obligation of reimbursement on part of owner.

8. Obligations of owner a) extraordinary expenses. c) Even if the depositor had capacity at the time of making the deposit but he subsequently loses his capacity during the deposit. the property must be returned to his guardian or administrator or the person who made the deposit or to the depositor himself should he acquire capacity (Article 1970). Interest on proceeds or property under admin belong to usufructuary e. if perish in part due to accident – continue on remaining portion. (keys having been delivered to 9. the thing must be returned to his legal representative (Article 1988). Depositary has the obligation to return not only the thing but also all its products. Capital & proceeds of sale of movables be invested in safe securities d. Extinguishment of usufruct Page 87 of 230 b. NOTE: Depositor shoulders the expenses for transportation 12. and keep the secret of the deposit when the seal or lock is broken. cost & liabilities in suits brought with regard to usufructuary – borne by usufructuary 6. owner to be liable for whatever is lost by usufructuary e) if property is expropriated for public use – owner obliged to either replace it or pay legal interest to usufructuary of net proceeds of the same 7. owner may make them at expense of usufructuary – during existence of usufruct h) Obliged to make expenses due to his fault. and • justifiable reasons exist for its return Page 146 of 230 NI can be converted into registered certificates or deposited in bank c. if on sterile animals – as if fungible – replace same kind & quality g) Obliged to make ordinary repairs – wear & tear due to natural use of thing and are indispensable for preservation. a) thing is judicially attached Exceptions: possession b) depositary was notified of the to the return or the removal of 1986) 13. Right of Depositary to Return Thing Deposited • if deposit is gratuitous. to his heirs and successors. usufructuary has no obligation to pay mortgage. charges & taxes affecting fruits k) Payment of interest on amount paid by owner charges on capital l) Obliged to notify owner of act of 3rd person prejudicial to rights of ownership – he is liable if he does not do so for damages – as if it was caused through his own fault m) Expenses. usufructuary obliged to inform owner when urgent is the need to make them b) expenses after renunciation of usufruct c) taxes & expenses imposed directly on capital d) if property is mortgaged. Persons to whom Return of Thing Deposited Must be Made a) to the depositor. and b) in the absence of stipulation. with or without his fault. accessions and accessories which are a consequence of ownership. or to the person who may have been designated in the contract (Article 1972). Time of Return of Thing Deposited General Rule: Upon demand or at will. Depositary is authorized to open the thing deposited which is closed and sealed when there is: (a) (b) presumed authority depositary). if all of them perish w/o fault but due to contagious disease / uncommon event – deliver remains saved. if attached. cannot escape by renouncing usufruct i) Pay legal interest from extraordinary expenses made by owner j) Payment of expenses. Effect of security is retroactive to day he is entitled to fruits d) Take care of property as a good father of family e) Liable for negligence & fault of person who substitute him f) If usufruct is constituted on animals – duty bound to replace dead animals that die from natural causes or became prey. Owner may retain property as administrator w/ obligation to deliver fruits to usufructuary until he gives sufficient security f.(b) (c) pay for damages should the seal or lock be broken through his fault which is presumed unless proven otherwise. whether stipulated. or not a period has been while in the depositary’s opposition of a third person the thing deposited (Article . at the place where the thing deposited might be even if it should not be the same place where the original deposit was made provided the transfer was accomplished without malice on the part of the depositary. 11. 10. b) If the depositor was incapacitated at the time of making the deposit. or in case of necessity. Place of Return of Thing Deposited a) at the place agreed upon by the parties.

. Other rules: • Usufruct cannot be constituted in favor of a town. Depositary is liable for the loss of the thing deposited if: 4. he deposits the thing with a third person who is manifestly careless or unfit although authorized. vii. Depositary is under obligation not to make use of the thing deposited (because deposit is for safekeeping of the subject matter and not for its use). Different Modes of acquiring ownership: a) Occupation b) Donation c) Prescription d) Succession e) Tradition 2. viii.1 he transfers the deposit with a third person without authority although there is no negligence on his part and the third person 4. (c) if he delays its return. in the same condition. Loss in part – remaining part shall continue to be held in usufruct 9. otherwise he shall be liable for damages. (a) if it is so stipulated. Depositary is liable for loss through a fortuitous event even without his fault. Obliged to first notify the depositor and wait for the latter’s decision if he will change the way or manner of the deposit. (b) is he uses the thing without the depositor’s permission. Exception: If delay will cause danger vi. or assoc. Depositary has the obligation not to commingle things deposited if so stipulated. for more than 50 years • Usufruct constituted on immovable whereby a building is erected . even in the absence of negligence. the thing is lost through the negligence of his employees whether the latter are manifestly careless or not NOTE: Depositary is not responsible for loss of thing without negligence of the third person with whom he was allowed to deposit the thing if such third person is not manifestly careless or unfit v. corp. Exceptions: a) express permission of the depositor b) preservation of the thing deposited required its use (article 1977) 6. The depositary is bound to collect not only the interest but also the capital itself when due. Page 145 of 230 ii. Requisites a) There should be a corporeal thing (tangible) which must have a “corpus” (body) & that thing should have no owner Page 88 of 230 Liable if the loss occurs through his fault or negligence Not allowed to deposit the thing with a third person Exception: contrary stipulation iv. If thing deposited should earn interest. Depositary has the obligation to: (a) return the thing deposited when delivered closed and sealed. iii.& building is destroyed – right to make use of land & materials • If owner wishes to construct a new building – must pay usufructuary the value of interest of land & materials • Owner and usufructuary share in insurance if both pays premium.3. donation) TITLE – Remote cause of ownership. even though he himself may have been authorized to use the same (article 1979) 7. merely constituted the means Occupation 1. if only owner – then proceeds will go to owner only • Effect of bad use of the thing – owner may demand the delivery of and administration of the thing with responsibility to deliver net fruits to usufructuary • At termination of usufruct: thing to be delivered to owner with right of retention for taxes & extraordinary expenses w/c should be reimbursed security of mortgage shall be cancelled Different Modes of Acquiring Ownership 1.a) b) c) d) e) f) g) death of usufructuary – unless contrary intention appears expiration of period of usufruct merger of usufruct & ownership renunciation of usufructuary – express total loss of thing termination of right of person constituting usufruct prescription – use by 3rd person 8. or 4. Terms: MODE – Proximate cause of ownership ( sales.2. the depositary is under obligation (1) to collect the interest as it becomes due and (2) to take such steps as may be necessary to preserve its value and the rights corresponding to it. even if they are of the same kind and quality (Article 1976). (d) if he allows others to use it.

even though a specified term may have been stipulated in the contract. If onerous. To keep the thing safely and to return it when required. The debtor cannot be required to pay the increase in interest there being no law authorizing it. it is bilateral.b) Bar Question (2004). owner did not pursue the bees b. would OB’s action be just and valid? Why? Has TY a remedy against the imposition of the rate increase? Explain. they shall pertain to the one who caught them c) Pigeons & fish when they go to another breeding place. Animals: a) Swarm of bees owner shall have right to pursue them to another’s land (owner to identify latter for damages. Increasing the rate in the absence of such law violates the principle of mutuality of contracts. become res nullius when abandoned by owner hidden treasure (only when found on things not belonging to anyone) i. give to mayor. c) d) There must be actual occupancy. A deposit is constituted from the moment a person receives a thing belonging to another. domesticated animals – originally wild but have been captured & tamed. without a law authorizing such increase. Things susceptible to occupation a) things that are w/o owner. Characteristics: a) b) c) d) 2. The parties in a contract of loan of money agreed that the yearly interest rate is 12% and it can be increased if there is a law that would authorize the increase of interest rates. Deposit 1. precious objects & 2) hidden & owner is unknown finding must be by chance in order that stranger may be entitled to ½ of the treasure 2) Movable found w/c is not treasure must be returned to owner if finder retains the thing found – may be charged with theft if owner is unknown.) Domesticated animals may be redeemed within 20 days from occupation of another person. mayor shall announce finding of the movable for 2 weeks in way he deems best Page 89 of 230 3. Extrajudicial 1) Voluntary 2) Necessary 4. Page 144 of 230 . Voluntary Deposit – defined as one wherein the delivery is made by the will of the depositor. the borrower. 3. 2. becomes res nullius if they lose that habit of returning & regain their original state of freedom iii. just compensation should be given the depository. Contract of deposit is generally gratuitous. with the obligation of safety keeping it and of returning the same. when captured & escaped – become res nullius again ii. has habit of returning to premises of owner. they shall be owned by the new owner provided they are not enticed 4. Movables: 1) Treasure found on another’s property consist of (1) money. Suppose OB. if no redemption made. Principal purpose of the contract of deposit is the safekeeping of the thing delivered. now belong to their capturer. it is unilateral because only the depository has an obligation. if any) land owner shall occupy/retain the bees if after 2 days. would increase by 5% the rate of interest to be paid by TY. Kinds of Deposit a. domestic/tame animals – born & ordinarily raised under the care of people. the lender. abandoned (res nullius) stolen property cannot be subject of occupation b) animals that are the object of hunting & fishing Kinds of animals: wild – considered res nullius when not yet captured. as stipulated in the contract. c) Real Contract If gratuitous. thing must be subjected to one’s control/disposition There must e an intention to occupy Accomplished according to legal rules Answer: OB’s action is not just and valid. 5. Judicial b. 1) Contrary stipulation Exceptions: 2) Depository is in the business of storing goods 3) Property saved from destruction during calamity without owner’s knowledge. Obligations of the Depositary i.

rights & actions. because when a land is without an owner. Obligations of Bailor a) To allow the bailee the use of the thing loaned for the duration of period stipulated or until the accomplishment of the purpose for which commodatum was constituted. even though by reason of extraordinary expenses. Exception: c) To refund 50% of the extraordinary expenses arising from actual use of the thing loaned (i.e. a. Simple Loan Or Mutuum 1. Precarium -1. also a means by which one loses ownership. 2. Rules on Interest: In order that interest may be charged. land that does not belong to anyone is presumed to be public land. Kinds: a) Acquisitive b) Extinctive 2. if use of thing is merely tolerated by the bailor b) To refund extraordinary expenses for the preservation of the thing loaned provided bailor is notified before the expenses were incurred. Page 143 of 230 b) 5. Exceptions: 1. Interest due shall earn interest (compounding interest) from the time it is judicially demanded although the obligation may be silent upon this point (Article 2212) or when there is express stipulation (Article 1959). b. thing found shall be awarded to finder if owner appears. Things not subject to prescription: Page 90 of 230 . Bailee cannot retain the thing loaned as security for claims he has against the bailor. Urgent need hence no notice is necessary. Urgent need during which time the Exceptions: commodatum is suspended. if use or purpose of the thing has not been stipulated 3. caused by fortuitous event) Contrary stipulation Exception: d) To pay damages to bailee for known hidden flaws in the thing loaned. 2. it must be expressly stipulated in writing (Article 1956). Against whom prescription run: a) minors & incapacitated person who have guardians b) absentees who have administrators c) persons living abroad who have administrators d) juridical persons except the state with regards to property not patrimonial in character e) between husbands & wife f) between parents & children (during minority/insanity) g) between guardian & ward (during guardianship) h) between co-heirs/co-owners i) between owner of property & person in possession of property in concept of holder 4. Things subject to prescription: all things within the commerce of men a) private property b) patrimonial property of the state 5. 3. Who a) b) c) may acquire by prescription: person who are capable of acquiring property by other legal modes state minors – through guardians of personally 3. Definition: Mutuum is a contract whereby one of the parties delivers to another party money or other consumable thing with the understanding that the same amount of the same kind and quality shall be paid. BUT when a property is private and it is abandoned – can be object of occupation Prescription – mode by which one acquires ownership and other real rights thru lapse of time. he is obliged to pay 1/10 of value of property to finder as price if movable is perishable or cannot be kept w/o deterioration or w/o expenses it shall be sold at public auction 8 days after the publication If he devotes thing to any purpose different from that for which it has been loaned. retroactive from the moment period began to run 1.- of owner does not appear 6 months after publication. it pertains to the state. Debtor in delay is liable to pay legal interest as indemnity for damages even in the absence of stipulation for the payment of interest (Article 2209) 2. NOTE: Bailor has the right to demand return of the thing if bailee commits any act of ingratitude. What cannot be acquired by occupation -Ownership of a piece of land. if duration of the contract has not been stipulated 2.

if being able to save either the thing borrowed or his own thing chose to save the latter b) Bailees are solidarily liable when the thing is loaned to two or more bailees in the same contract.8 years for immovables d) in concept of an owner e) public. uninterrupted 4. otherwise it is a lease (Article 1935) b) Purpose is the temporary use of the thing loaned (Article 1935) c) right to use is limited to the thing loaned and not to its fruits (Article 1935) unless there is stipulation to the contrary (Article 1940) d) Subject matter is generally non-consumable things but may cover consumables if the purpose of the contract is for exhibition. renunciation results from the acts w/c imply abandonment of right acquired • Creditors & persons interested in making prescription effective may avail themselves notwithstanding express or tacit renunciation Prescription of Ownership and Other Real Rights 1. peaceful. Requisites a) b) c) for ordinary prescription: possession in good faith just title within time fixed by law .30 years for immovables c) d) in concept of an owner public. General Rule: Bailee is not liable for loss or damage due to a fortuitous event (because the bailor retains ownership) a) Bailee devote thing to a different purpose Exceptions: b) Bailee keeps thing longer than the period stipulated or after the accomplishment of the use for which commodatum was constituted.Must exist throughout the entire period required for prescription 5. a) If he is guilty of fault or negligence Exceptions: Page 142 of 230 a) b) c) d) public domain in transmissible rights movables possessed through a crime registered land 6.10 years for movables . c) Thing loaned was delivered with appraisal of its value (unless there is express stipulation to the contrary) d) Bailee lends thing to a third person not a member of his household e) Bailee. peaceful.Commodatum 1.Reasonable belief that person who transferred thing is the owner & could validly transmit ownership . Renunciation of prescription • Persons with capacity to alienate may renounce prescription already obtained but not the right to prescribe in the future • May be express or tacit • Prescription is deemed to have been tacitly renounced. Just Title (True and Valid) – must be proved & never presumed a) Titulo Colorado b) Titulo Putativo Page 91 of 230 . Characteristics: a) Gratuitous. Good Faith . General Rule: Bailee is not liable for ordinary wear and tear due to use of the thing loaned. uninterrupted 3. e) Bailor need not to be the owner. Kinds of Acquisitive prescription a) ordinary b) extra-ordinary 2. NOTE: 1. f) Commodatum is purely personal in character hence death of either bailor or bailee extinguishes the contract (Article 1939) General Rule: Bailee can neither lend nor lease the object of the contract to a third person.4 years for movables . it is sufficient that he has possessory interest over subject matter (Article 1938). Exception: Member of bailee’s household Exception to the exception: contrary stipulation or nature of thing forbids such use 2. Obligations of the Bailee a) Bailee is liable for ordinary expenses for the use and preservation of the thing loaned. Requisites for extra-ordinary prescription: a) just title is proved b) within time fixed by law .

borrower need only pay the same amount of the same kind and quality involves only personal property 5. Mutuum – where the bailor (lender) delivers to the ii.produced by judicial summons. Mutuum (Utang) subject matter is money or other consumable things ownership transferred to borrower may be gratuitous or onerous 2. In Concept of Owner .if character of possession different: predecessor in bad faith or possessor in good faith – use extraordinary prescription Bar Question (1998).if 1 year of less – as if no interruption b) Civil . Public. 4. may involved real or personal property loan for use or temporary possession right to demand the return of the thing loaned before expiration of term in case of urgent need loss is shouldered by bailor since he is the owner 5. 7.Must be known to the owner of the thing . plaintiff desists from complaint/allows proceedings to lapse 3. 6. Peaceful. no right to demand return before the lapse of the term agreed upon borrower suffers the loss even if the loss is caused exclusively by a fortuitous event 8. 3.- title must be one which would have been sufficient to transfer ownership if grantor had been the owner through one of the modes of transferring ownership but there is vice/defect in capacity of grantor to transmit ownership b) Bailee (Comodante) – the recipient.possession not by mere tolerance of owner but adverse to that of the owner . 8. loan for consumption 7.possible when there is succession of rights .claim that he owns the property 7. The owner presented the deed of sale and the owner’s certificate of title to the Register of Deeds. void for lack of legal solemnities 2. essentially gratuitous 3. 6. subject matter is non-consumable things ownership retained by lender 1. bailee (borrower) money or other consumable thing upon the condition that the latter shall pay same amount of the same kind of quality. 2. Real Contract Unilateral Contract ii.through any cause. b) Kinds of Loan: Commodatum – where the bailor (lender) delivers to i. In 1965. possession ceases for more than 1 year . Tacking Period . Page 141 of 230 . Rules in Computation of Period: • Present possessor may tack his possession to that of his grantor or predecessor in interest • Present possessor presumed to be in continuous possession I intervening time unless contrary is proved • First day excluded. the party who receives the possession or custody of the thing thus delivered. except when 1. Renren bought from Robyn a parcel of registered land evidenced by a duly executed deed of sale.Acquired & maintained w/o violence . Distinctions between Commodatum and Mutuum Commodatum (Hiram) 1.Uninterrupted (no act of deprivation by others) in the enjoyment of property 8. Loan in General a) Characteristics: i. possessor is absolved from complaint c) express or tacit renunciation d) possession in wartime 9. Interruption a) Natural . 6. the bailee (borrower) a non-consumable thing so that the latter may use it for a certain time and return the identical thing. last day included 10.there must be privity between previous & present possessor . borrower must return the same thing loaned 4. The Page 92 of 230 3. Uninterrupted .

As often held by the Supreme Court. the principle of imprescriptibility sometimes has to yield to the equitable principle of laches which can convert even a registered land owner’s claim into a stale demand. the party who delivers the possession or custody of the thing bailed. services or money in the present with a promise to pay or deliver in the future. Management. Control or non-control position CREDIT TRANSACTIONS General Provisions 1. assignee in insolvency proceeding 4. after buying the land from Robyn. No. appears to be more sustainable. and paid the corresponding registration fees. there being no showing in the facts how he entered into the ownership and possession of the land. b) Mikaelo’s defense of laches. By lapse of time fixed by law 30 years action over immovables from time possession is lost 10 years mortgage action upon written contract Page 93 of 230 . Mikaelo’s claim of laches. 33 years of neglect or inaction is too long and may be considered unreasonable. the land had been possessed by Robyn’s distant cousin. employees or laborers 3. 2. From the facts. the Deed of Sale to Renren is considered registered from the time the sale was entered in the Day Book (now called the Primary Entry Book). no transfer of certificate of title was issued to Renren because the original certificate of title in Robyn’s name was temporarily misplaced after fire partly gutted the Office of the Register of Deeds. P. Mikaelo. however. 1529) The right to recover possession of registered land likewise does not prescribe because possession is just a necessary incident of ownership. Mikaelo’s defense of prescription can not be sustained. However. Decide the case by evaluating these defenses. is weak insofar as the element of equity is concerned. (Section 47. It was not even an action to recover ownership but only possession of the land. Renren is considered the registered owner of the land. however. Not covered: a) with waiver of seller’s creditor b) receiver.D. it appears that it was only in 1998 after an inexplicable delay of 33 years that he took the first step asserting his right to the land. In 1965.3. Effects of Non-Compliance Failure to: Prepare & deliver sworn listing of creditors Apply proceeds pro-rata to listed creditors Make advance written disclosure transactions to creditors Register sworn statement with DTI of On Transaction Fraudulent & void Fraudulent & void Not void Not void Void Void On Seller Criminal Liability Criminal Liability No Criminal Liability No Criminal Liability Criminal Liability Criminal Liability Include or omit names of creditors & correct amount due in the statement Sale for no consideration ANTI-DUMMY LAW 1. Duty of law a) b) c) d) of seller to perform the following when transaction is within the coverage make sworn statement of listing of creditors delivery of sworn statement to buyer apply the proceeds pro-rata to claims of creditors shown in verified statement written advance disclosure to creditors entry was made in the day book and corresponding fees were paid as evidenced by official receipt. Renren bought the land and had the sale registered way back in 1965. Credit transactions include all transactions involving the purchase of loan of goods. It was only in April 1998 that Renren sued Mikaelo to recover possession. Penalizes Filipinos who permit aliens to use them as nominees or dummies to enjoy privileges reserved only for Filipinos 2. operation as officers. For all legal intents and purposes. openly. 5. Prescription of Actions 1.D. No. adversely and continuously in the concept of owner since 1960. Page 140 of 230 Answers: a) Renren’s action to recover possession of the land will prosper. A Torrens title is imprescriptible. he submitted the Deed of Sale to the Registry of Deeds for registration together with the owner’s duplicate copy of the title. No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. asking that he be declared owner of the land. 1529. By ordinary standards. it was not his fault that the Registry of Deeds could not issue the corresponding transfer certificate of title. Under Section 56 of P. Meanwhile. Mikaelo invoked a) acquisitive prescription and b) laches. Parties to a Bailment a) Bailor (Comodatario) – the giver. After all.

leaving his three daughters. Effect of Assignment a) lack of knowledge or consent of debtor not essential for validity but has legal effects b) assignment of rights made w/o knowledge of debtor – debtor may set up against assignee the compensation w/c would pertain to him against assignor of all credits prior to assignment and of later ones until he had knowledge of the assignment c) debtor has consented to assignment – cannot set up compensation unless assignor was notified by debtor that he reserved his right to the compensation may still set up d) debtor has knowledge but no consent compensation of debts previous to assignment but not the subsequent ones. 309 SCRA 509). and all the fruits corresponding thereto. PNB. Bulk Sales Law 1. Three types of transactions covered: a) Sale of goods other than in ordinary course of business b) Sale of all or substantially all of business c) Sale of all or substantially all of fixtures & equipments Page 139 of 230 . Thereafter. however.8 years 6 years 5 years 4 years 1 year - upon obligation created by law upon a judgement action to recover movables from time possession is lost upon an oral contract upon a quasi-contract actions where periods are not fixed by law upon injury to rights of plaintiff upon a quasi-delict for forcible entry & detainer for defamation Bar Question (2000). Rationale: Protect creditor of merchant stores 2. Will the defense prosper? Reason. Donation 1. Belen. the latter foreclosed the mortgage and the hacienda was sold to it as the highest bidder. CA. Is she correct or not? Answer: Sylvia is not correct. Sale of credits & other incorporeal things 2. Answer: No. Assignment 1. Requisites of Donation: a) Reduction in patrimony of donor b) Increase in patrimony of donee c) Intent to do act of liberality d) Donor must be owner of property donated Page 94 of 230 2. in trust for them. Mere delay in filing an action. Due to the failure of the daughters to pay the bank. the defense of laches was raised as the claim was filed more than seven years from the maturity of the obligation. Ambrosio died. having bought it from the bank with her own money. The 3 daughters are the co-owners of the hacienda being the only heirs of Ambrosio. does not constitute laches (Agra v. Redemption by one co-owner inures to the benefit of all (Adille v. the defense will not prosper. the right of redemption belongs also to the 3 daughters. As such she is holding the shares of her two sisters in the property. When Sylvia redeemed the entire property before the lapse of the redemption period. the action was brought within the ten-year prescriptive period provided by law wherein actions based on written contracts can be instituted. Sylvia. 157 SCRA 455). standing alone. Characteristics: a) Unilateral – obligation imposed on the donor b) Consensual – perfected at time donor knows of acceptance 2. she also exercised the right of redemption of her co-owners on their behalf. In an action brought to collect a sum of money based on a surety agreement. Six months later. is entitled to be reimbursed the shares of her two sisters in the redemption price. Rosario and Sylvia a hacienda which was mortgaged to the Philippine National Bank. Sylvia won the grand prize at the lotto and used part of it to redeem the hacienda from the bank. she took possession of the hacienda and refused to share its fruits with her sisters. When the property was foreclosed. Rights not extinguished by prescription: a) demand right of way b) abate public /private nuisance c) declare contract void d) recover property subject to expressed trust e) probate of a will f) quiet title Bar Question (2000). The problem did not give facts from which laches may be inferred. However. contending that it was owned exclusively by her.

must not impair legitime b) causa – anything to support a consideration: generosity. Requirements of a donation: a) subject matter – anything of value. Subsequently. she was employed in California and a year later. present property & not future. California. The latter brought the deed of donation to the owner of the project and discovered that Anastacia left unpaid installments and real estate Page 95 of 230 Page 138 of 230 . debtor shall have a right to extinguish it by reimbursing the assignee for the price the latter paid therefor plus judicial costs.must be written and accepted also in writing immovable . one who first requested shall be granted Urban land . past service.a) b) c) d) e) Among co-heirs • any of the heirs sell his hereditary rights to stranger before partition • any of the co-heirs may be subrogated to the rights of the purchaser by redeeming said hereditary right: reimburse buyer of the price of the sale • co-heirs has 1 month from receipt of notice in writing Among co-owners • any or all of co-owners sells their shares to 3rd person • any co-owner may exercise right of redemption by paying reasonable price of property to the buyer • if 2 or more co-owners desire to exercise right of redemption. Sale of credit in litigation • When a credit or other incorporeal right in litigation is sold. Anastacia purchased a house and lot on installments at a housing project in Quezon City. adjoining owner has right to redeem unless grantee does not own a rural land .where piece of rural land has an area not exceeding 1 hectare.must be in a public instrument & acceptance must also be in a public instrument (in same instrument or in other instrument) Bar Question (2000).if 2 or more adjacent lot owners desire to exercise right to redeem.when piece of land is small & cannot be used for any practical purpose & bought merely for speculation.follow law on donations and certain kinds of donations & law on obligations and contracts (suppletory) Irrevocable at the instance of the donor. if oral it must be with simultaneous delivery of thing/document & acceptance need not be in writing above 5. charity.2 or more owners of adjoining lot desire to exercise right to redeem. debt c) capacity to donate & dispose & accept donation d) form – depends on value of donation 4. still entitled to fruits Formalities required . they may only do so in proportion to the share they respectively have in thing owned in common Among adjoining owners of: Rural land .follow law on succession to be valid.if 2 or more adjacent lot owners desire to exercise right to redeem & both have same lot area. and donation must be in the form of a will Revocable ad mutuum (exclusive will of donor) Redemption of homesteads Redemption in tax sales Redemption by judgment debtor Redemption in extrajudicial foreclosure Redemption in judicial foreclosure of mortgage **In case of doubt with regards to nature of donation: inter vivos 5. duly authenticated by the Philippine Consulate in Los Angeles.000 & below – may be oral or written. may be revoked only by reasons provided by law Revoked only for reasons provided for by law (except onerous donations) Donation Mortis Causa Disposition happens upon the death of donor Even if there is a term of effectivity and effectivity is upon the death of the donor. interest Debtor may exercise right within 30 days from the date assignee • demands payment from him Other Instances When Right of Legal Redemption is Granted: 3. goodwill. she executed a deed of donation. donating the house and lot to her friend Amanda. owner of adjoining lot with smaller area shall be preferred . owner whose intended use is best justified shall be preferred. owner of adjoining land can redeem .000 . Kinds of Donation according to Effectivity: Donation Inter Vivos Disposition and acceptance to take effect during lifetime of donor and donee Already pertains to the donee unless there is a contrary intent Formalities required . Acceptance a) acceptance must be made personally or thru agent b) donation may be made orally or in writing movable: 5.

There being no showing that Amanda’s acceptance was made in a public instrument. The donation not being onerous. When rights of co-owners over an undivided thing is sold as regards to their own share – vendee retro cannot compel one to redeem the whole property 4. Will the suit prosper? • • Answer: Yes. Two months later. vendors a retro may only exercise his right over his respective share. In this instance. Legal Redemption The right to be subrogated upon the same terms and conditions stipulated in the contract. the donation is void.If none: • at time of execution of the sale a retro there are visible or growing fruits – there shall be no pro-rating at time of redemption if no indemnity was paid by the vendee a retro at time of execution sale a retro there be no fruits but • there are fruits at time of redemption – pro-rated between vendor a retro & vendee a retro giving the vendee a retro a part corresponding to the time he possessed the land. there is no such burden imposed by the donor on the donee. the burden must be imposed by the donor on the donee. Rosa filed an action to annul the donation on the ground that Amanda did not give her consent in the deed of donation or in a separate public instrument. In this instance. Page 96 of 230 How is Redemption Effected: 1. vendee a retro may demand that they must come to an agreement first and may not be compelled to consent to a partial redemption 3. In the problem. Fruits . the formalities of a will should be complied with. Page 137 of 230 . Article 749 of the New Civil Code requires both the donation and the acceptance to be in a public instrument. The donation is not onerous because it did not impose on Amanda the obligation to pay the balance on the purchase price or the arrears in real estate taxes. Valid tender of payment is sufficient 3. Anastacia died. Badges of mortis causa: a) Title remains with donor (full or naked ownership)& conveyed only upon death b) Donor can revoked ad mutuum c) Transfer is void if transferor survives transfer Bar Question (1998). For such donation to be valid. in the place of one who acquires the thing by purchase or by dation in payment or by other transaction whereby ownership is transmitted by onerous title. Moreover.What controls is the stipulation between parties as regards the fruits. Mere sending of notice without valid tender is insufficient 4. the price of the thing sold b. donation mortis causa embodied only in a public instrument without the formalities of a will could not have transferred ownership of disputed property to another. the fact that the donor did not intend to transfer ownership or possession of the donated property to the donee until the donor’s death. necessary and useful expenses made on the thing sold 2. 4. Failure to pay useful & unnecessary expenses entitles vendee to retain land unless actual reimbursement is made Rules In Case of Multi-Parties: 1. Seller a retro must first pay the following: a. Ernesto donated in a public instrument a parcel of land to Demetrio. who accepted it in the same document. Who is correct? • Answer: Rosa is correct because the donation is void. . alleging that the donation was void as it did not comply with the formalities of a will. Amanda took it upon herself to pay those amounts voluntarily. leaver her mother Rosa as her sole heir. After his death. When an undivided thing is sold because co-owners cannot agree that it be allotted to one of them – vendee a retro may compel the vendor to redeem the whole thing 2. the donation is void. it must comply with the formalities of Article 749. The property donated was an immovable. Ernesto also reserved in his deed his right to sell the property should he decide to dispose of it at anytime – a right which he did not exercise at all. Ernesto’s heirs seasonably brought an action to recover the property. For a donation to be onerous. It is there declared that the donation shall take effect immediately. expenses of the contract and other legitimate payments made by reason of the sale c. Amanda replied that the donation was an onerous one because she had to pay unpaid installments and taxes. the suit will prosper as the donation did not comply with the formalities of a will. would result in a donation mortis causa and in this kind of disposition. otherwise. The contention that the donation is onerous and therefore need not comply with Article 749 for validity is without merit.taxes/ Amanda paid these so that the donation in her favor can be registered in the project owner’s office. hence her acceptance may be implied. 6. When an undivided thing is sold by co-owners / co-heirs. with the donee having the right to take possession of the land and receive its fruits but not to dispose of the land while Ernesto is alive as well as for ten years following his death. Should one of the co-heirs/co-owners succeed in redeeming the property – such vendor a retro shall be considered as trustee with respect to the share of the other co-owners/coheirs.

ii.All persons who may contract and dispose of their property Who may accept donations: 1. When there is agreement – should not exceed 10 years. Effect when no redemption made: no automatic transfer of ownership. iii. must be in the same contract 3. under present art 1607: there must be judicial order before ownership of real property is consolidated in the buyer a retro Page 136 of 230 i. if it exceeded. expenses of contract & other legitimate payments and the necessary & useful expenses made on the thing sold • right is exercised only be seller in whom right is recognized in the contract or by any person to whom right was transferred. 3. minors & other incapacitated a) by themselves Page 97 of 230 • • . only applies to contract of sale *Legal redemption – only applies to contract of sale 2. Kinds of donation INTER VIVOS 1) pure/simple 2) remuneratory 3) conditional 4) onerous Pure/Simple a) Consideration Merits of donee Remuneratory Liberality or merits of donee or burden/ charge of past services provided they do not constitute demandable debt Conditional Valuable consideration is imposed but value is less than value of thing donated Onerous Valuable consideration given following requisites concur: price of sale with right to repurchase is unusually inadequate seller remains in possession as lessee or otherwise upon or after expiration of right to repurchase. 4. b) law to apply/ forms Law on donations Law on donations Extent of burden Law on obligations imposed>oblicon excess>donation • • • c) form of acceptance Required d) reservation w/regards to personal support & legitime Applicable e) warranty against eviction & hidden defects In bad faith only f) revocation Applicable • Required Required Required Applicable Applicable Not Applicable In bad faith only In bad faith only Applies Applicable Applicable Applicable Who may give donations . another instrument extending the period of redemption or granting new period is executed iv. natural & juridical persons w/c are not especially disqualified by law 2. Equitable Mortgage • A contract with right to repurchase is equitable mortgage if the 7. Conventional Redemption • seller reserved the right to repurchase thing sold • coupled with obligation to return price of the sale. No period agreed upon – 4 years from date of contract 2. valid only for the first 10 years.*Conventional redemption – only extinguishes obligations pertaining to contract of sale. When period has expired & seller allowed the period of redemption to expire – seller is at fault for not having exercised his rights so should not be granted a new period. seller binds himself to pay taxes on thing sold vi. When period to redeem has expired & there has been a previous suit on the nature of the contract – seller still has 30 days from final judgment on the basis that contract was a sale with pacto de retro: rationale: no redemption due to erroneous belief that it is equitable mortgage which can be extinguished by paying the loan. real intention of parties is to secure the payment of a debt or performance of other obligation In case of doubt – in determining whether it is equitable mortgage or sale a retro (with right of repurchase) – it shall be construed as equitable mortgage Remedy available to vendor: ask for reformation of contract Period of Redemption: 1. buyer retains for himself a part of the purchase price v. not extinguish contract itself.

associations not permitted unmerchantable which would examination of the sample not be apparent on reasonable • • What may be given: All or part of donor’s present property provided he reserves sufficient means for the support of the ff: a) himself b) relatives who by law are entitled to his support c) legitimes shall not be impaired when w/o reservation or if inofficious. compensation f. buyer can still return them in that condition if such is due to breach or warranty 5. may be reduced on petition of persons affected except: conditional donation & donation mortis causa Future property may not be donated. confusion or merger of rights of creditor and debtor e. legal representatives if needs written acceptance 1. conceived & unborn child. Extinguishment 1. b) Accept goods & maintain action against seller for damages c) Refuse to accept goods & maintain action against seller for damages d) Rescind contract of sale & refuse to receive goods/return them when already received. corporations. If child came out to be alive & not dead contrary to belief of donor Page 98 of 230 .not applicable to onerous donations With regards to donations made by person without children or descendants at time of donation: 1. wife. when goods deteriorated.if pure & simple donation if it does not require written acceptance b) by guardian. he cannot rescind sale if: 1.000 2.000 3. condonation or remission d. order. priority in right If movable – one who first take possession in good faith If immovable – one who recorded in registry of property in good faith . prescription Page 135 of 230 8. guardians & trustees with respect to property entrusted to them 2. annulment h. but effect depends on good faith or bad faith on the part of the seller: a) seller in bad faith & there is waiver against eviction – null & void b) buyer without knowledge of a particular risk. rescission i. Buyer’s Option in Case of Breach of Warranty a) Accept goods & set up breach of warranty by way of recoupment in diminution or extinction of the price. between paramours/persons guilty of adultery 4. he fails to return or offer to return goods to seller in substantially as good condition as they were in at time ownership was transferred 4. made general renunciation of warranty – not waiver but merely limits liability of seller in case of eviction (pay value of subject matter at time of eviction) c) buyer with knowledge of risk of eviction assumed its consequences & made a waiver – vendor not liable (applicable only to waiver of warranty against eviction) • When goods delivered to buyer. legitimated or illegitimate children 2. one who can present oldest title 9. novation g. between parties guilty of same criminal offense 5. physician. descendant. nurse. Double Donations: Rule: Priority in time. individuals. natural guardian – not more than 50. church.more than 50.no inscription. Revocation of Donations . loss of the subject matter c. relatives of priest within 4th degree. he knew of the breach of warranty when he accepted goods without protest 2.applies only to donation inter vivos . ascendant Other persons disqualified to receive donations: 1. he fails to notify seller within reasonable time of election to rescind 3. priest who heard confession of donor during his last illness 2. who took care of donor during his last illness 4. Effects of Waiver • Parties may increase or diminish implied warranty against eviction. husband & wife 3. etc. represented by person who would have been guardian if already born • Who are disqualified to donate: 1. Grounds: a. fulfillment of a resolutory condition j. payment or performance b. court appointed . 4. community where priest belongs 3. If donor should have legitimate. made to public officers. one who first took possession in good faith .in the absence thereof.

defect shall be considered as REDHIBITORY • If vet fails to discover through ignorance or bad faith. court decision merely Declaratory Extent: portion which may impair legitime of heirs Property must be returned Alienation/mortgages done prior to recording in Register of Deeds: If already sold or cannot be returned – the value must be returned If mortgaged – donor may redeem the mortgage with right to recover from donee Fruits to be returned at filing of action for revocation Prescription of action is 4 years from birth.when only one is defective. children under his parental authority 2. honor. or made 3rd party defendant through 3rd party complaint brought by buyer iii. spouse or children under his parental authority 3. Donee unduly refuses to give support to donor when legally or morally bound to give support to donor BIRTH OF CHILD Ipso jure revocation. NON-FULFILLMENT OF CONDITION Needs court action INGRATITUDE Needs court action Extent: whole portion but court may rule partial revocation only Property in excess Alienations/mortgages imposed are void unless registered with Register of Deeds Extent: Whole portion returned Property to be returned Prior ones are void.If seller is a dealer in goods of that kind. goods are bought by description from seller who deals in goods of that description b) Sale of Goods by sample . Specific Implied Warranties in the Sale of Goods a) Warranty as to fitness & quality – Requisites: 1. Donee commits offense against person. he is liable for damages Sale of animals on teams (2 or more) • . Donee imputes to donor any criminal offense or any cat involving moral turpitude even if he should prove it unless act/crime has been committed against donee himself. no need for action. buyer makes known to seller the particular purpose for which goods are acquired and it appears that the buyer relied on the seller’s skill or judgment 2.apparent) – Requisites: a) immovable sold is encumbered with non–apparent burden or servitude not mentioned in the agreement b) nature of non–apparent servitude or burden is such that it must be presumed that the buyer would not have acquired it had he been aware thereof iv. only one is redhibited & not the others . he would not have acquired it or would have given a lower price Defects in Animals • Even in the case of professional inspection but hidden defect is of such nature that expert knowledge is not sufficient to discover it . Warranty against encumbrances (non. spouse. Warranty against hidden defects a) subject matter may be movable or immovable b) nature of hidden defect is such that it should render the subject matter unfit for the use of which it was intended or should diminish its fitness c) had the buyer been aware.apply to sale of other things • • • c) 3. there is an implied warranty that the goods shall be free from defect rendering them Page 134 of 230 Fruits to be returned at filing of complainant Prescription is 4 years from non-fulfilment Prescription is 1 year from knowledge of fact and it was possible to bring action Action cannot be renounced Right of action transmitted to heirs Action extends to donee’s Action cannot be renounced in advance Right of action at instance of donor but may be transmitted to heirs Action does not extend to Page 99 of 230 Heirs can’t file action . etc.exception: when it appears buyer would not have purchased the team without the defective one . demand value of property when alienated and can’t be recovered or redeemed from 3rd persons Sale of animals at fair or public auction no warranty against hidden defects Sale of animals with contagious disease = void Sale of unfit animals 3.basis of eviction is a right prior to sale or an act imputable to vendor d) seller has been summoned in the suit for eviction at the instance of buyer. property of donor. If donor subsequently adopts a minor child Action for revocation based on failure to comply with condition in case of conditional donations Action for revocation by reason of acts of ingratitude: 1.

heirs can only file in the ff cases: a) donor has instituted proceedings but dies before bringing civil action for revocation b) donor already instituted civil action but died. Implied Warranties – deemed included in all contracts of sale whether parties are actually aware or not. personal to the donor. whether they were intended or not. if there is no pre-existing contractual relation between the parties. Bernie may.heirs • donee’s heirs Exception to rule on intransmissibility of action with regards to revocation due to ingratitude: 1. 2. may form part of obligation by provision of law Relates to the subject matter itself or to obligation of the seller as to the subject matter of the sale 10. DEVLAND has the right to cancel the contract but it has to refund Bernie the cash surrender value of the payments on the property equivalent to 50% of the total payments made. Answer: Under R. ii. ii. Elements of Quasi-Delict a) act or omission b) damage or injury is caused to another c) fault or negligence is present d) causal connection between damage done and act/omission e) there is no pre-existing contractual relations between the parties Page 100 of 230 2. general rule is heir cannot institute if donor did not institute 2. Discuss the rights and obligations of the parties. is obliged to pay for the damage done. c) Supposing DEVLAND had fully developed the subdivision but Bernie failed to pay further installments after 4 years due to business reverses. Conditions & Warranties CONDITION Purports to existence of obligation Condition must be stipulated to form part of the obligation May attach itself to obligation of seller to deliver possession & transfer ownership 1. Such fault or negligence. is called a quasi-delict and is governed by the provision of this Chapter.000. there being fault or negligence. Express Warranties – Requisites: i. He may also ask the Housing and Land Use Regulatory Board to apply penal sanctions against DEVLAND consisting of payment of administrative fine of not more than P20. iii. Warranty that seller has a right to sell Warranty against eviction – Requisites of breach of warranty against eviction: a) buyer is evicted in whole or in part from the subject matter of sale b) there is a final judgement Page 133 of 230 . by operation of law i. at his option. Article 2176. heirs can substitute c) donee killed donor or his ingratitude caused the death of the donor d) donor died w/o having known the ingratitude done e) criminal action filed but abated by death 3. seller is liable for damages WARRANTY Purports to performance of obligation Need not be stipulated. Inofficious donations: • shall be reduced with regards to the excess • action to reduce to be filed by heirs who have right to legitimate at time of donation • donees/creditors of deceased donor cannot ask for reduction of donation • if there are 2 or more donation: recent ones shall be suppressed • if 2 or more donation at same time – treated equally & reduction is pro rata but donor may impose preference which must be expressly stated in donation TORTS and DAMAGES Quasi-Delict 1. Civil Code: Whoever by act or omission causes damage to another.A.00 and/or imprisonment for not more than 20 years. it must be an affirmation of fact or any promise by seller relating to the subject matter of sale natural tendency of affirmation or promise is to induce buyer to purchase subject matter buyer purchases the subject matter relying thereon • when breached. 6552 (Maceda Law). can only make heirs of donee liable if complaint was already filed when donee died Answer: Under the same law. No. be reimbursed the total amount paid including amortization interests but excluding delinquency interests at the legal rate.

malicious. no installment payment shall be forfeited to the owner/developer when the buyer. Delict DIFFERENCE QUASI-DELICT Solidary Civil aspect of the quasi-delict is impliedly instituted with criminal action. No payment after 30 day period. after due notice. causal connection between negligence and damage done DELICT Act/omission committed by means of dolo (deliberate. Consequently. No. damage 2. Civil Liability in Quasi-Delict v.: 1. desists from further payment due to failure of the owner-developer to develop the subdivision according to the approved plans and within the time limit for complying with the same. buyer entitled to 50% of what he has paid + if after 5 years of installments. 4. He thus wrote a letter to DEVLAND informing it that he was stopping payment. breach Bar Question (2005). imprudence) 2. After having faithfully paid the installments for 48 months. • • 1st Grace period is 60 days from date installment became due b.D. Preponderance of Evidence Exercise of diligence of a good father of a family in the selection and supervision of employees No pre-existing contract Victim . can cancel. DEVLAND’S action is not proper since under Section 23 of the said law. Force Majeure Other rights: 1. DEVLAND cancelled the sale and wrote Bernie. Page 132 of 230 Effect of judgement of acquittal in a criminal case involving same act/omission Not a bar to recover civil damages . Distinguished from other sources of obligation: CONTRACT QUASI DELICT Vinculum Juris Contract Negligent act/ omission (culpa. 957 (The Subdivision and Condominium Buyers Protective Decree). Purpose of law : Protect buyers in installments against oppressive conditions Proof Needed Defense Available Preponderance of Evidence Exercise of extraordinary diligence (in contract of carriage). 2nd grace period of 30 days from notice of cancellation/demand for rescission • buyer can still pay within the 30 day period • with interest c. but under 2000 Crimpro Rules it is independent and separate Not a bar to recover civil damages EXCEPT when judgement pronounces that the negligence from which damage arise is non-existent Page 101 of 230 Liability of Employer Reservation Requirement DELICT Subidiary Civil aspect is Impliedly instituted with criminal action Answer: Assuming the land is a residential subdivision project under P. 4. Buyer paid less than 2 years installment a. 2. negligence 3. b) Discuss the rights of Bernie under the circumstances. Pay without interest the balance within grace period of 1 month for every year of installment payment • Grace to be exercised once every 5 years When no payment .cancelled.a. 5. b. Bernie bought on installment a residential subdivision lot from DEVLAND. 5% for every year but not to exceed 90% of total payments made • Cancellation to be effected 30 days from notice & upon payment of cash surrender value 3.Prove the ff. Bernie discovered that DEVLAND had failed to develop the subdivision in accordance with the approved plans and specifications within the time frame in the plan. existence of a contract 2. informing him that his payments are forfeited in its favor. 3. a) Was the action of DEVLAND proper? Explain. in bad faith) Proof beyond reasonable doubt No pre-existing contract Prosecution Accused is presumed innocent until the contrary is proved. Sell rights to another Reinstate contract by updating during grace period & before actual cancellation Deed of Sale to be done by notarial act To pay in advance any installment or the full balance of price anytime without interest Have full payment annotated in certificate of title Pre-existing contract Burden of Proof There is pre-existing contract Contractual partyProve the ff: 1.

Principle of res ipsa loquitur (the thing speaks for itself) b) c) grounded on the difficulty in proving thru competent evidence. CC – Applies only to contract of sale • Maceda Law – applies to COS & CTS & Financing 2. may still recover from defendant but must be reduced by the courts in proportion to his own negligence Concept of proximate cause – the adequate and efficient cause which in the natural order of events and under the particular circumstances surrounding the case. cannot be invoked by a common carrier against a passenger in an action for breach of contract of carriage • Elements: 1. public policy considerations Damage/injury Causal connection between negligence and damage (to be actionable) -Defendant’s negligence must be the proximate cause of the injury sustained by the plaintiff to enable plaintiff to recover. CONDO – not defined space (w/ common areas) 1. proximate cause of injury/damage must be the negligence of defendant b) CONCURRENT NEGLIGENCE . • This defense is available only in an action by the driver or owner of one vehicle against the driver or owner of the other vehicle involved. there can be no recovery c) DOCTRINE OF LAST CLEAR CHANCE . commercial 3. Maceda Law (RA 6552) • Coverage: REAL ESTATE – defined space vs.5. Defenses a) CONTRIBUTORY NEGLIGENCE . plaintiff must prove negligence of defendant Exception: 1. 2. plaintiff was in a position of danger by his own negligence Page 102 of 230 . SUSPEND PAYMENT UNTIL SELLER COMPLIES Sale Of Immovables (By Installment) 1.even though a person’s own acts may have placed him in a position of peril and an injury results. if plaintiff’s own conduct is the cause of the injury there can be no recovery.the theory here is that both parties are equally negligent. Remedies of Seller a) Anticipatory breach Seller has reasonable grounds to fear loss of immovable sold & its price – sue for RESCISSION b) Non – payment of price-RESCISSION 2. the courts will leave them as they are. financing transactions Excluded: • 1. sale to tenants under agrarian laws • Rights Granted to Buyers: 1. Remedies of Buyer a) Disturbed in possession or with reasonable grounds to fear disturbance – SUSPEND PAYMENT b) In case of subdivision or condo projects: If real estate developer fails to comply with obligation according to approved plan: i. Law applicable • Article 1592. would naturally produce the event 6. What must be proved a) Negligence . Thus. industrial 2. contract of sale 2. Buyer paid at least 2 years installment Page 131 of 230 If plaintiff's negligence is only contributory – he is considered partly responsible only. In cases where negligence is presumed or imputed by law this is only rebuttable/presumption juris tantum 2. RESCIND ii. to constitute a defense. contract to sell 3. When is the law applicable: Sale of movables on installment a) Sale on installment: payment by several partial payments in small amount b) Rationale of the law: Buyer is lulled into thinking that he could afford because of small amounts per installment and at the same time remedy abuse of commercial houses c) Nature of remedies: alternative & not cumulative d) Coverage: sale and financing transaction & contracts of lease with option to purchase e) Action : Judicial and Extrajudicial Sale of Immovables (In General) 1.the theory here is that the plaintiff was also negligent together with the defendant.In action for culpa aquiliana. the injured is entitled to recover if the defendant thru the exercise of reasonable care and prudence might have avoided injurious consequences to the plaintiff.

Buyer is in default for unreasonable time **Notice needs to be given by seller to buyer Remedies of the Buyer 1. there is no legal injury LAW – specific provision of law 2. Exception: assumption of risk DAMNUM ABSQUE INJURIA – a principle that involves damage without injury. EXERCISE OF DILIGENCE OF GOOD FATHER OF FAMILY IN SELECTION AND SUPERVISION OF EMPLOYEES PRESCRIPTION Injury to right of plaintiff/quasi delict 4 years Defamation 1 year When no specific provision. Remedies a) b) c) of Seller (1484) Exact fulfillment should the buyer fail to pay Cancel the sale if buyer fails to pay 2 or more installments Foreclose on chattel mortgage if buyer fails to pay 2 or more installments If buyer chooses foreclosure. places. buyer may seek SPECIFIC PERFORMANCE WITHOUT GIVING SELLER OPTION TO RETAIN GOODS ON PAYMENT OF DAMAGES Sale of Movables on Installment (Recto Law) 1. as against 3rd persons EMERGENCY RULE – a person is not expected to exercise the same degree of care when he is compelled to act instinctively under a sudden peril because a person confronted with a sudden emergency may be left with no time for thought and must make a speedy decision upon impulse or instinct • Applicable only to situations that are sudden and unexpected such as to deprive actor of all opportunity for deliberation • But action must still be judged by the standard of the ordinary prudent man • Absence of foreseeability DOCTRINE OF ASSUMPTION OF RISK – Volenti non fit injuria • Intentional exposure to a known danger • One who voluntarily assumed the risk of an injury from a known danger cannot recover in an action for negligence or an injury is incurred • Plaintiff’s acceptance of risk (by law/contract/nature of obligation) has erased defendant’s duty so that his negligence is not a legal wrong • Applies to all known danger DUE DILIGENCE – diligence required by law/contract/depends on circumstances of persons. notice by seller to buyer not essential 5. Expressly stipulated ii. Special Right to Resell the Goods Requisites: i. must be counted from the day they may be brought PROSCRIPTION AGAINST DOUBLE RECOVERY . joint tortfeasors 2. goods are perishable ii. Obtain actual possession of goods ii. Give notice of claim to carrier / bailee in possession thereof d) Notice by seller to buyer is not required. things FORTUITOUS EVENT – No person shall be responsible for those events which cannot be foreseen. accident occurred as proximate cause of such failure • Who may invoke: plaintiff • Inapplicable to: 1. 3. When Seller fails to deliver. buyer obtains delivery of the goods Goods are supposed to have been delivered to buyer but carrier refused ii. or which through foreseen were inevitable. Special Right to Rescind Requisites: i. buyer in default for unreasonable time iv. therefore no liability is incurred. notice to carrier is essential 4. Buyer is insolvent (failure to pay when debts become due) b) How right is exercised: i.i. stipulated the right of resale in case buyer defaults in payment iii. no further action against buyer to recover any unpaid balance of the price Page 130 of 230 e) f) g) h) i) j) k) defendant knew of such position of the plaintiff defendant had the least clear chance to avoid the accident by exercise of ordinary care but failed to exercise such last clear chance and 4. defendants concurrently negligent 3. Goods are in transit From the time goods are delivered to carrier for purpose of transmission to buyer Goods rejected by buyer & carrier continues to possess them When are goods no longer in transit? Reached point of destination Before reaching destination.Responsibility for fault or negligence under quasi-delict is entirely separate and distinct from • • • Page 103 of 230 l) .

b. abandoned. buyer becomes insolvent o 7. Special right to rescind prior rights have been exercised 2. there is another action pending between same parties for same cause f. Possessory lien 2. a person who himself is not guilty of negligence is made liable for conduct of another Reason: . waived. 3.public policy – deeper pocket/capacity to pay . • • Vicarious liability – law on imputed negligence. Subject Matter: MOVABLES (IN GENERAL) Requisites: a. and in case of his death or incapacity. lack of jurisdiction over person of defendant b. Persons Liable for Quasi-Delict a. After delivery Res perit domino • • Owner is buyer so buyer bears risk of loss • Delivery extinguishes ownership vis-a-vis the seller & creates a new one in favor of the buyer Remedies of Parties For Breach Of Contract Of Sale Remedies of the Seller 1. under their authority & Page 104 of 230 2. lack of jurisdiction over subject matter c. father's decision shall prevail (art 211). b. cause of action is barred by prior judgement /statute of limitations g. PERSONS VICARIOUSLY LIABLE – the obligation imposed in 2176 is demandable not only for one’s own act or omission but also for those persons for whom one is responsible (art 2180). Stoppage in transitu 3. In case of disagreement. Seller is unpaid – not completely paid or received negotiable instrument under a condition & condition has been breached by reason of dishonor c. goods sold on credit but term of credit has expired 3. 3. goods sold without stipulation as to credit 2. Loss – 2 views: Paras: BUYER Tolentino: SELLER Deterioration & fruits – Buyer bears loss. there being no fault or negligence is obliged to pay for the damage done (art 2176). plaintiff has no legal capacity to sue e. condition precedent for filing claim has not been complied with a. cannot be availed when seller does not have custody o Exercisable only in following circumstances: 1. Subject matter – goods b. Possessory Lien o Seller not bound to deliver if buyer has not paid him the price o Right to retain. venue improperly laid d. Stoppage In Transitu a) Requisites: Page 129 of 230 . claim set forth in pleading has been paid.Guardians are liable for damages caused by the minor or incapacitated persons who are: i. seller delivers goods to carrier for transmission to buyer without reserving ownership in goods or right to possess them buyer or his agent lawfully obtains possession of goods waiver Note: Father and Mother shall jointly exercise parental authority over common children.civil action arising from the RPC but plaintiff cannot recover damages 2x for same act or omission of the defendant m) ACT OR OMISSION IS NOT THE PROXIMATE CAUSE OF THE DAMAGE n) OTHER GROUNDS – Motion to Dismiss a.violation of duty on account of relationship – he is negligent 1) PARENTS . TORTFEASOR . 2) GUARDIANS . extinguished i. claim is unenforceable under the provision of statute of fraud j.The father. pleading asserting claim states no cause of action h. Special right of re-sale Can only be exercised when the 2 4. 4.Whoever by act or omission causes damage to another. the mother are responsible for damage caused by minor children who live in their company Instances when possessory lien lost: 1. Physical possession is with seller Remedies 1.

without notice of seller’s defect of title OWNERS & MANAGERS OF ESTABLISHMENT/ENTERPRISE Owners & managers of establishment or enterprise are responsible for damages caused by their employees: i. Fruits & Other Benefits Who Bears Risk of Loss/Deterioration/Fruits 1. Owner loses movable – owner can recover w/o reimbursing price ii.c. illicit act of employee was on the occasion or by reason of the functions entrusted to him v. Owner is unlawfully deprived – owner can recover w/o reimbursing price Exception to Exception: i. Before perfection Res perit domino • • Owner is seller so seller bears risk of loss At Perfection Res perit domino • • Contract is merely inefficacious because loss of the subject matter does not affect the validity of the sale • Seller cannot anymore comply with obligation so buyer cannot be compelled also After Perfection but before delivery Page 128 of 230 STATE . instruction or custody (authority & responsibility shall apply Page 105 of 230 . Deterioration. art 218 .The state is responsible when it acts through a special agent. Movable is bought at public sale – owner can only recover after reimbursing price ii. Sale by Seller with Voidable Title a) Perfection Stage: Valid sale – buyer acquires title of goods b) Consummation Stage: Valid sale – if title has not yet been avoided. foreign to the exercise of the duties of his office if he is a special official. even though the former are not engaged in any business or industry (unlike in RPC – subsidiary liability of employer attaches in case of insolvency of employer for as long as the employer is engaged in business/industry) Defenses available to employers: a) exercise of due diligence ins election and supervision of employees b) act/omission was made outside working hours and in violation of company's rules and regulations 4) 3. 3) live in their company 2. buyer buys goods under following condition: i. NOTE: Family Code. ADMINISTRATOR. Services rendered in accordance with orders which employer had authority to give iii. SCHOOLS. as long as they remain in their custody 6) 2. for value iii.Teachers or heads of establishments of arts & trades shall be liable for damages caused by their: i. employee selected by employer or through another ii. entity or institution engaged in child care shall have special parental authority & responsibility over the minor child under their supervision. in the service of the branches in which the latter are employed OR ii. pupils. Title as to Movable Properties a) Rule: POSSESSION IS EQUIVALENT TO TITLE Requisites: i. acting w/in the scope of their assigned task iv.Employers shall be liable for damages caused by their employees & household helpers i. in occasion of their function EMPLOYERS . d. but not when the same is caused by an official to whom task done properly pertains in which case art 2176 is applicable • A special agent is one who receives a definite and fixed act or commission. Movable acquired in good faith & for value from auction b) c) 5) Loss. sale is made under statutory power of sale or under order of a court of competent jurisdiction sale is made in a merchant’s store in accordance with code of commerce & special laws ii.The school. students & apprentices ii. its administration & teachers or the individual. in good faith ii. In good faith Exception: i. 3. TEACHER . Possession of a movable ii.

This is because the second buyer. where the second sale is registered ahead of the first sale but with knowledge of the latter. Family Code.to all authorized activities whether inside or outside the premises or the school. he bumped a tricycle. No inscription & no possession in good faith – person who presents oldest title in good faith Art 2180 Teachers. but in doing so. he sold the same land to Jose. resulting in the death of its driver. b) The second sale is registered ahead of the first sale with knowledge of the latter? Why? basis of liability of teacher – principle of loco parentis (stand in place of parents) so long as they remain in their custody • not literal anymore. buyer acquires no better title than seller had. Bar Question (2001). owner by his conduct is precluded from denying seller’s authority (ESTOPPEL) b. One June 15. before: boarding & living with teacher due to peculiar characteristic of trade & arts school • as long as they are in the protective. When does the general rule apply? When not all requisites embodied in 1544 concur. No inscription. supervisory capacity of teacher – special parental authority. 1995. judicial guardian or person exercising substitute parental authority over said minor shall be subsidiarily liable. Why? • Answer: The first buyer has the better right if his sale was first to be registered. head of establishment in Arts and trades are made expressly liable No such express solidary nor subsidiary liability is stated Students minor involved not necessarily • Liability of the School general rule: schools are not liable as party defendants exception: a) FC 218 – schools are expressly made liable b) St. 1995. Difference between Articles 218 & 2180 Art 218 School. entity or institution). 2. includes recess time. parents. contrary is provided for in recording laws (PD 1529) Page 127 of 230 Bar Question (2001). First to register in good faith 2.first to posses in good faith = owner b) IMMOVABLE 1. Alberto an executive of an insurance company drove a company vehicle to a favorite Videoke bar where he had some drinks to “unwind. first to possess in good faith 3. even though the first buyer knew of the second sale. Exceptions: a. On June 30. Sale By Non-Owner Or By One Having Voidable Title 1. Special Rule – 1544 • Requisites: a) exactly same subject matter b) exactly same immediate seller c) buyers represent conflicting interest d) both sales are valid e) • Rules on double sales under 1544 a) MOVABLE . admin. General Rule: Sale by non-owner. Jesus sold a parcel of registered land to Jaime. hence. teachers engaged in child care are made expressly liable Liability of school. Who has a better right if: a) the first sale is registered ahead of the second sale. admin. art 219 . The fact that he knew of the second sale at the time of his registration does not make him as acting in bad faith because the sale to him was ahead in time. he drove home. What creates bad faith in the case of double sale of land is knowledge of a previous sale. for any legitimate reason for a child’s presence in school Answer: The first buyer is still to be preferred. with knowledge of the latter. After working overtime upto midnight.” At 2:00am. 3. has a priority in right.those given the authority & responsibility shall be solidarily & principally liable for damages caused by act/omission of the unemancipated minor. applies to all including academic institution per weight of jurisprudence based on obiter of Justice JBL Reyes in the Exconde case 1. acted in bad faith. May the insurance company be held liable for the negligent act of Alberto? Why? Page 106 of 230 . who at the time he registered his sale knew that the property had already been sold to someone else. Francis case ruling – school’s liability as employer c) PSBA case ruling – school has liability based on contract WON Article 2180 apply to school of arts & trades only? No. teachers is solidary and parents are made subsidiary liable Students involved must be minor 2.

because the student who caused it was under their special parental authority and they were negligent. He intimates to seller that he has accepted. FC).• ii. Sale by Description/Sample: Answer: The insurance company is not liable because when the accident occurred. PRIORITY IN RIGHT Page 126 of 230 Answer: The school.In motor vehicle mishap. The time of the accident (also 2:00am) was outside normal working hours. Goods must be delivered in full. Effect of Delivery: Title to thing is transferred/ownership is transferred Except: If contrary is stipulated as in the case of: a. • • Not applicable to judicial sales When price per unit not indicated If area delivered is either greater or lesser – price will not be adjusted accordingly Sold for lump sum 10. except when stipulated b. 2. Jr. absent contrary express stipulation. Force majeure Fault of the injured/damaged person OWNER OF MOTOR VEHICLE . OR He retains without intimating to seller that he has rejected. employers are liable for damages caused by their employees who are acting within the scope of their assigned tasks. 8. the Supreme Court held that notwithstanding the fact that the employee did some overtime work for the company. the teacher and the school authorities are liable for the blindness of the victim. General Rule: FIRST IN TIME. a 7-year old male pupil stabs the eye of another boy with a ballpen during a fight. causing permanent blindness to the victim. sale on acceptance/approval c. FC). However. engaged in his own affairs or carrying out a personal purpose when he went to a restaurant at 2:00am after coming out from work. Alberto was not acting within the assigned tasks of his employment. v. It is true that under Art. 14. c. If during class hours. the former was. Acceptance of goods in general. no need to return. They are principally and solidarily liable for the damages caused by the acts or omissions of the unemancipated minor unless they exercised the proper diligence required under the circumstances (Article 219. The incident could have been prevented had the teacher been inside the classroom at that time. Sale of Goods on installment: a. POSSESSOR OF AN ANIMAL OR WHOEVER MAKES USE OF THEM EVEN IF THE ANIMAL IS LOST OR ESCAPED Except: 1. b. or o follow usage in trade. the mere fact that Alberto was using a service vehicle of the employer at the time of the injurious accident does not necessarily mean that he was operating the vehicle within the scope of his employment. the owner is solidarily liable with the driver if: 1. b. and teachers have special parental authority and responsibility over the minor child while under their supervision. Thing delivered & he does any act inconsistent with ownership of seller. Vasquez. while the teacher was chatting with other teachers in the school corridor. implied reservation of ownership 12. 2180 (par. and Page 107 of 230 . does not discharge seller from liability in case of breach of warranties (unless no notice or failure to give it within reasonable time) 16. the school authorities. its administrators. shall be considered as depositary. he was in the vehicle. nevertheless. The guilty boy’s parents are subsidiarily liable under Article 219 of the Family Code.5). There is acceptance BY BUYER when: a. or the guilty boy’s parents? Explain. sale or return d. When not examined by buyer – not accepted until examined or at least had reasonable time to examine 15. who could be liable for damages for the boy’s injury: the teacher. Persons Expressly Made Liable By Law (even without fault) a. contract to sell b. or o seller’s place of business or his residence o specific goods – place where the thing is o at reasonable hour 11. instruction or custody (Article 218. unless there is stipulation to the contrary Double Sales 1. They were negligent because they were chatting in the corridor during the class period when the stabbing incident occurred. (321 SCRA 393 (1999). In Castilex Industrial Corp. When buyer has a right to refuse goods. In the problem. Who Bears Expenses of Delivery – Seller 13. Time & Place of Delivery Rules: o follow stipulation in contact. Bar Question (2003).

which may be harmful to persons or property 4) by falling of trees situated at or near highways or lanes. sewers or deposits of infectious matter. there is already delivery to buyer.they are liable for death and injuries caused by any noxious or harmful substances used although no contractual relation exists between them and the consumers DEFENDANT IN POSSESSION OF DANGEROUS WEAPONS OR SUBSTANCES. f. Completeness of Delivery a.liable for damages caused by things thrown or falling from the same destination even if not disembarked yet from the vessel. if LESS – buyer has 2 options: a) reject b) accept 1. he must pay at price stipulated 2. MANUFACTURERS & PROCESSORS OF FOODSTUFFS. and other public works under their control or supervision PROPRIETOR OF BUILDING OR STRUCTURE . action must be brought within 10 years from collapse HEAD OF FAMILY THAT LIVES IN A BUILDING OR PART THEREOF . 9. g. e. and the inflammation of explosive substances which have not been kept in a safe and adequate place 3) by excessive smoke. DRINKS. INSURANCE. h.2. When buyer pays seller the price – from moment the vessel is at port of destination. Principles Page 108 of 230 . bridges. remedies of buyer: LESS IN AREA a) rescission b) proportional reduction of price – LACK IN AREA SHOULD NOT BE MORE THAN 1/10 OF AREA AGREED UPON GREATER IN AREA a) accept per stipulation & reject the rest b) accept whole area – pay at contract rate Page 125 of 230 d.: 1) total or partial collapse of building or structure if due to lack of necessary repairs 2) explosion of machinery which has not been taken cared of with due diligence. when buyer pays for services of carrier – delivery to carrier is delivery to buyer.responsible for the damages resulting from any of the ff. liable only for fair value of goods delivered ii. CITIES & MUNICIPALITIES . when accepts with knowledge that seller is not going to perform contract in full. if not caused by force majeure 5) by emanations from tubes. TOILET ARTICLES & SIMILAR GOODS . Destination Point – when goods reach the port of c. public buildings. carrier is agent of the buyer ii. ARCHITECT OR CONTRACTOR .if damage of building or structure is caused by defect in construction which happens within 15 years from construction. canals. if MORE – buyer has 3 options: a) accept per contract & reject the rest b) accept the whole – pay price stipulated c) reject whole if subject matter is indivisible iii. constructed without precautions suitable to the place ENGINEER.there is prima facie presumption of negligence on the part of defendant if death or injury results from such possession Exception: The possession or use thereof is indispensable in his occupation or business PROVINCES. streets. Sold per unit or number • with statement of its area. rate at certain price • deliver all that may have been stated in the contract • if impossible. FREIGHT i. 9. as to IMMOVABLES i. if MIXED WITH GOODS OF DIFFERENT DESCRIPTION – buyer has 2 options: a) accept good w/c are in accordance with contract & reject the rest b) reject goods entirely – if indivisible b.shall be liable for damages for the death or injuries suffered by any person by reason of the defective condition of roads. SUCH AS FIREARMS AND POISON . as to MOVABLES – delivery of thing plus accessories & accessions in the condition in which they were upon the perfection of the contract including its fruits i. when accepts & consumes before knowledge that buyer will not perform contract in full. could have misfortune through due diligence prevented the ii. there is delivery to the buyer c) CIF – COST.

delivery of thing by mere agreement. seller continues to hold possession but no longer as owner .its acceptance is proof that contract of sale exists 6. 22. iii. Plaintiff has no other action based on contract. quasi contract. iii. as possession cannot be transferred at the time of sale (ex.money given as part of purchase price .as to movables only (ex.• • When deviations allowed: a. crime or quasi-delict • Distinguished from solutio indebeti: Mistake is an essential element in solutio indebeti but not in accion in rem verso. when there is stipulation to contrary.merely as a holder v. a) Art 19. when at the time of execution of instrument. there is already delivery to the buyer (twin effects deemed fulfilled) b) FOB – FREIGHT ON BOARD i. privacy and peace of mind of his neighbors and other persons. There is a legal right or duty Which is exercised in bad faith For the sole intent of prejudicing or injuring another 5. 20) – for all other provisions of law which do not especially provide their own sanction ELEMENTS: i. 2142 & 2143) Accion in Rem Verso: action for recovery of what has been paid • without just cause Requisites: • i. execution does not produce effect of delivery b. ABUSE OF RIGHTS (Art 19) ELEMENTS: i. Shipping Point – goods are delivered at point of shipment.Terms: a) FAS – FREIGHT ALONG SIDE When goods delivered alongside the ship. 23. Traditio Longa Manu . CONTRA BONOS MORES (ART 21) ELEMENTS: i. when seller points to the thing being sold without actually delivering it) Traditio Brevi Manu . 25) – thoughtless extravagance for pleasure or display during a period of public want or emergency VIOLATION OF RIGHT OF PRIVACY AND FAMILY RELATIONS (Art. 21 (catch-all provision) 1. Defendant has been enriched ii. The ff. GENERAL SANCTION (Art. prevention and other relief: 1. Different kinds of delivery (tradicion): a) Actual.before contract of sale. delivery of the keys to a car) Constitutum possessorium . Delivery through Carrier . the ii. as lessee) iii.when thing sold is placed in the control & possession of the buyer b) Constructive i. 20. small items are insignificant. prying into the privacy of another's residence Page 109 of 230 c) d) . good custom. delivery to carrier by placing goods on vessel is delivery to buyer Page 124 of 230 2. 26) every person shall respect the dignity. b) There is an act which is legal But which is contrary to morals. anything that refers to price is material b. Consummation: Delivery and transfer of ownership 7. Symbolic delivery . OSTENTATIOUS DISPLAY OF WEALTH (Art. acts though they may not constitute a criminal offense. Execution of public instrument Exceptions: a. shall produce a cause of action for damages. personality. Plaintiff suffered a loss iii. public order or public policy And it is done with intent to injure UNJUST ENRICHMENT (Arts. ii. ii. of contract. Enrichment of defendant is without just or legal ground iv. ii. In the exercise of his legal right or duty Willfully or negligently causes damage to another 3. would-be buyer was already in possession of the subject matter of sale (ex.at the time of perfection iv. does not make acceptance unconditional A sale by auction is perfected when the auctioneer announces its perfection by the fall of the hammer or in other customary manner. subject matter was not subject to control of the seller 8. Earnest Money .

Mayfair Theater Inc. prior thereto – offer may still be withdrawn • Acceptance must be of the exact terms to be considered absolute Page 123 of 230 h) i) VIOLATION OF RIGHTS AND LIBERTIES OF ANOTHER PERSON NUISANCE a. deceit. Offer – certain 2. f) g) ELEMENTS: 1. However. omission. the lessee brings an action against both the lessor-seller and the buyer (a) to rescind the sale and (b) to compel specific performance of his right of first refusal in the sense that the lessor should be ordered to execute a deed of absolute sale in favor of the lessee at the same price. right of first refusal which does not even have a separate consideration may be subject to specific performance Bar Question (1998). c. e. obstructs or interferes with the free passage of any public highway or streets. The ruling in Equatorial Realty Development. 4. Place of birth. f. annoys or offends the senses.Unfair competition in agricultural. or 4. (264 SCRA 483). Perfection: Offer & Acceptance • Meeting of Minds 1. by improper and sinister motive Answer: The action filed by the lessee. Acceptance – absolute Qualified acceptance – merely a counter-offer which needs to be • absolutely accepted to give rise to perfected contract of sale Business ads are mere invitations to make an offer except when it • appears to be otherwise Acceptance by letter/telegram – binds only at time it came to • knowledge of SELLER. sustains both rights of action because the buyer in the subsequent sale knew the existence of right of first refusal. that the defendant was himself the prosecutor/ he instigated its commencement that it finally terminates in his acquittal that in bringing it the prosecutor acted without probable cause. the lessee is expressly granted a right of first refusal should the lessor decide to sell both the land and the building. machination or other unjust. shocks.2. not subject to specific performance because there is no contractual relationship here & it is not an obligation to give (not a real contract) New doctrine: May be subject to specific performance • Effect of new doctrine: Turned the world of policitacion upside • down because while valid option contract is not subject to specific performance. • REQUISITES: 1. v. or 3. if material UNFAIR COMPETITION . d. Right of First Refusal • creates a promise to enter into a contract of sale and it has no separate consideration. lowly station in life. meddling with or disturbing the private life or family relations of another intriguing to cause another to be alienated from his friends vexing or humiliating another on account of his religious beliefs. or anything else which: 1. but can be attached to other principal contracts onerous commutative unilateral – vs contract of sale which is bilateral e) DERELICTION OF OFFICIAL DUTY OF PUBLIC OFFICERS • May be brought by any person suffering from material or moral loss because a public • servant refuses or neglects. oppressive or highhanded method (Art 28) MALICIOUS PROSECUTION 3. or other personal condition b. In a 20-year lease contract over a building. without just cause to perform his official duty (art 27). Consequently. plaintiff sustained material or moral loss as consequence of such non-performance 4. a case with similar facts. nominate principal. for both rescission of the offending sale and specific performance of the right of first refusal which was violated. Decide the case. should prosper. hence in bad faith. 3. commercial or industrial enterprises or in labor through the use of force. defendant is a public officer charged with the performance of a duty in favor of the plaintiff 2. or 2. physical defect. or any body of water Page 110 of 230 . defies. The defendants contend that the plaintiff can neither seek rescission of the sale nor compel specific performance of a “mere” right of first refusal. 3. 4. that is. the lessor sold the property to a third person who knew about the lease and in fact agreed to respect it. establishment. injures or endangers the health or safety to others. and that he was actuated by legal malice. 4. 2. the amount of such damages. Inc. or disregards decency or morality. Definition – any act. condition of property. he refused or neglected without just cause to perform such duty (ministerial) 3. intimidation.

exception by specific provision of law: a. Form of Sales 1. When form is important for enforceability (STATUTE OF FRAUDS) a.Sale being consensual.a. steps must be made: i. Agreement to sell things with value of 500 and up c. iii. but may become so by reason of their locality. When form is important for validity. Three Stages in the Life of a Contract of Sale a) Policitacion/Negotiation Stage – offer is floated. Option Contract – Characteristics: a.constitutes waiver e. Form not important in validity of sale . Particular form is required under the statute of frauds: a.those which are in their nature not nuisances. etc. Public officers 2. the ff. power to sell a piece of land granted to an agent – otherwise VOID b. Judicial sale • Shocking to conscience of man • Higher price can be obtained at re-sale Rescissible contracts due to lesion Sales with right to repurchase (raises presumption of equitable mortgage) – Remedy is reformation b. that such demand has been rejected iii. When there is a note or memorandum in writing & subscribed to by party or his agent (contains essential terms of the contract) When there has been partial performance/execution (seller delivers with intent to transfer title/receives price) when there has been failure to object to presentation of evidence (oral) . towards whom the owner of the premises or instrumentality owes the duty of ordinary care. meeting of the minds c) Consummation – parties perform their respective undertakings 2. 5. When the police found the illegal trade. REMEDIES AGAINST PUBLIC NUISANCES 1. Civil action 3. must also be registered with Municipal treasurer – otherwise VOID c. hinders or impairs use of property NUISANCE PER SE . Civil action 2. Abatement. sale of large cattle. they immediately demolished the house because according to them. which takes the children who accepted it out of the category of a trespasser and puts them in the category of invitees. not the contract of sale by itself. c. that the value of destruction does not exceed P3. Exceptions: i. the time when parties indicate their interest but no concurrence of offer & acceptance b) Perfection – concurrence of all requisites. Private persons . without judicial proceedings Doctrine of Attractive Nuisance A class of cases within the general rule that one is liable for the injury resulting to another from failure to exercise the degree of care commiserate with the circumstances The attractiveness of the premises or of the dangerous instrumentality to children of tender years is to be considered as an implied invitation. Page 111 of 230 . valid & binding between parties b. surroundings. Formation. acceptance is floated but they do not meet. perfected by mere consent as to price & subject matter 2. Abatement. may be oral or written. Sale of real property or any interest therein c.if nuisance is specially injurious to himself. Perfection and Consummation of a Contract of Sale 1. distinct Page 122 of 230 Bar Question (2006). demand be first made upon owner or possessor of the property to abate the nuisance ii. d. 2. sale of land by non-Christian if not approved by Governor – VOID 4. Sale to be performed 1 year after b.denounced as nuisance by common law or by statute NUISANCE PER ACCIDENS . b. without judicial proceeding Who May Avail of Remedies 1. or the manner in which they may be conducted. f.000 Remedies Against Private Nuisances 1. managed. ii. Kinds: 1. that the abatement be approved by the district health officer and executed with the assistance of local police iv. not binding to 3rd persons only 3. Prosecution under the RPC or any local ordinance 2. A drug lord and his family reside in a small bungalow where they sell shabu and other prohibited drugs.

Plead or allege the loss i. profits which obligee failed to obtain 2. Special Damages . exemplary. Impossible service c) Determinate or determinable 3. WHAT MUST BE DONE TO COLLECT ACTUAL DAMAGES: a. regardless of the location or surrounding. necessary and logical consequences of a particular wrongful act which result in injury. the house may be considered as an instrument of the crime and the law enforcers are justified in demolishing the house in the exercise of the police powers of the State. or structure must be nuisance at all times and under any circumstances. sale of things having potential existence (emptio rei speratae)valid ii. (2) The selling of the shabu is not a public nuisance but a grave threat to the welfare of the community. Sale of hope (emptio spei). judicial separation of property c) Guardian with regard to property of ward during period of guardianship d) Agent with regard to property of principal e) Executor/administrator with regard to the estate of the deceased f) Public officers with regard to the property of the State g) Officer of court & employee – with regard to the property in litigation moral. what may be considered as nuisance per se is not structure of the house but the use of the house for the selling of shabu. To demolish the house is an unnecessary damage and injury.damages which are the natural. CONCEPT: Adequate compensation for a. Future & Contingent i. in the abatement of a nuisance. Moreover. As such it can be enjoined and all instruments thereof be destroyed by the law enforcers. the following must concur: a) Existing. In this case. actual. temperate.aleatory in character but valid . but not the necessary and inevitable result of the wrongful act. Simulated/fictitious iii. the value of loss suffered b. Price 1. To be considered a nuisance per se. separation of property agreed (marriage settlement) ii.every sale of a future thing is subject to the condition that they will come into existence . Can this demolition be sustained? Explain.sale of empty hope is void b) Licit – must be within the commerce of men Void if subject-matter is: i. Damages Kinds of Damages: (“mental”) Actual/Compensatory Exception to General Rule: a) Minors *Status of contract: VOIDABLE only. Since the demolished house was not a nuisance during the times that it was not used for selling drugs. liquidated 2. The sale of the shabu in that community is facilitated by the house which hides the pernicious activity from the law enforcers. the abatement should not inflict unnecessary damage or injury. Contrary to law ii. However. • Exceptions: Page 121 of 230 . the demolition cannot be sustained. it cannot be considered nuisance per se. need to be pleaded Page 112 of 230 • • Price – signifies the sum stipulated as equivalent of the thing sold Characteristics of Valid Price a) Must be real b) Must be in money or its equivalent c) Must be certain or ascertainable at the time of the perfection of the contract d) Manner of payment provided for Gross inadequacy of price in ordinary sale does not render contract void unless it is shocking to conscience of man. need not be specifically pleaded because the law itself implies or presumes that they resulted from the wrongful act ii. occupation. Outside commerce of men iv. the act. nominal. • Answers: (1) No. The house cannot be considered as nuisance per se. therefore ratifiable b) Sale between spouses Exceptions: i. the demolition of the house is not necessary to abate the sale of shabu in that community. General Damages . whether judicially or extra-judicially. Subject Matter of Sale • To be a valid subject matter.it was a nuisance per se that should be abated.natural. This being the case.

in lease: consideration is rent in sale: seller needs to be owner of thing to transfer ownership. g) in sale: consideration is price. Medical & Hospital Bills b. Moral damages d. Attorney's fees . VALUE OF LOSS SUFFERED (DANO EMERGENTE) . fines or penalties.as a general rule. attorney's fees (other than judicial costs) are not recoverable. sale is a real contract (to give) – rescission is not available in agency b. TEST: essential clauses of whole instrument (art 1466 – motherhood statement. attorney's fees. Damages in case of bad faith a. WHEN LOSS NEED NOT BE PROVED: a. Pray for the relief that claim for loss be granted Prove the loss Bar Question (2000). and (3) warranty for the units was borne by the manufacturer.vi. it is a sale by installments Essential Requisites of a Contract of Sale 1. in dacion: novates creditor-debtor relationship into sellerbuyer iii. Loss or impairment of earning capacity (in case of physical disability) c. Forfeiture of bonds in favor of the government for the purpose of promoting public interest or policy (ex: bond for temporary stay of alien) CONTRACTS & QUASI CONTRACTS Answer: The contract is one of agency not sale. Damages in case of Good faith a. if deceased was obliged to give support (for period not more than 5 years) iv. The foregoing indicia negate sale because they indicate that ownership over the units was never intended to transfer to the distributor. stipulation between parties Page 113 of 230 f) in sale: obligation to absolutely transfer ownership of thing. (2) the manufacturer reacquires the unsold units at exactly the same price. in lease: lessor need not be owner Lease with option to buy .000 ii. c. it is sufficient that damages may be reasonably attributed to the nonperformance of the obligation CRIMES & QUASI-CRIMES • defendant is liable for all damages that are natural and probable consequence of the act/omission complained of • not necessary that damages have been forseen or could have been reasonably forseen 4. cost of litigation Damages recoverable: a. All unsold units at the end of the year shall be bought back by the manufacturer at the same price they were ordered.Destruction of things. not good law) Agency is a personal contract.000 units of the manufacturer’s computers every month and to resell them in the Philippines at the manufacturer's suggested prices plus 10%. b. 1. Minimum amount: P50. a contract of sale but designated as lease in name only. Consent Parties to a Contract of Sale • General Rule: All parties with capacity to contract can enter into a valid contract of sale Page 120 of 230 . except: i. vii. Natural and probable consequence of breach of obligation. satisfy/extinguish obligation to pay debt ii. Loss is presumed (ex: loss if a child or spouse) d. A foreign manufacturer of computers and a Philippine distributor entered into a contract whereby the distributor agreed to order 1. medical & hospital bills. Is the agreement one for sale or agency? 3.in reality. If damages other than actual are sought c. liquidated damages take the place of actual damages except when additional damages incurred b. e) Dacion en pago dacion: contract where property is alienated to i. The manufacturer shall hold the distributor free and harmless from any claim for defects in the units. iii. and Parties have forseen or could have reasonably forseen at time obligation was constituted 2. The notion of sale is negated by the following indicia: (1) the price is fixed by the manufacturer with the 10% mark-up constituting the commission. in dacion: delivery is required (real contract) Lease i. Loss of earning capacity unless deceased had permanent physical disability not caused by defendant so that deceased had no earning capacity at time of death iii. Damages for death i. Support. in lease: use of thing is for a specified period only with an obligation to return ii. Liquidated damages previously agreed upon. interests.

g. agent not allowed to profit Page 119 of 230 • Agency i. may she and her husband claim damages from the bus company for the death of their unborn child? Explain. not unilaterally revocable. contract of sale is sale of things. buyer pays for price of object. seller warrants. that the defendant acted upon the advise of counsel 4. in sale. however. vi. to sell in sale.future earnings 6. viii. products are not ordinary products of manufacturer. quasi-contracts and quasi-delict 1. vii. UNREALIZED PROFITS (LUCRO CESSANTE) . may be revoked unilaterally because fiduciary & even if revoked w/o ground n sale. ii. the consideration is the giving of a thing. in agency to sell.discretionary on part of the court 5. If a pregnant woman passenger of a bus were to suffer an abortion following a vehicular accident due to the gross negligence of the bus driver. each product’s nature of execution differs from the others. In contracts. it is giving of money as payment both are governed by law on sales. in agency. value of thing is equal or less than amount of money – sale c) b. both are species of the genus sales if consideration consists party in money & partly by thing – look at manifest intention. iv. in case where exemplary damages are to be awarded. Nature of the object test – enunciated in EEI v CIR. e. This is because the unborn child is not yet considered a person and the law allows indemnity only for loss of life of persons. e. in agency. Contributory negligence b. if intention is not clear (1468): a. merely obliged to deliver price received from buyer. seller receives profit. that since the filing of the action. Rules: Timing test – under art 1467. (5%) d) for piece of work. f. contract for piece of work is sale of service. in sale. agent not obliged to pay for price. v. The parents may also recover damages for injuries that are inflicted directly upon them. buyer becomes owner of thing. iii. contract of sale if manufacturer engages in activity without need to employ extraordinary skills and equipment. the spouses cannot recover actual damages in the form of indemnity for the loss of life of the unborn child. when exemplary damages are awarded when defendant's act/omission compelled plaintiff to litigate with 3rd persons or incur expenses to protect his interest malicious prosecution clearly unfounded civil action or proceeding against plaintiff defendant acted in gross & evident bad faith in refusing to satisfy plaintiff's just & demandable claim legal support actions recovery of wages of household helpers.. in agency. laborers & skilled workers actions for indemnity under workmen's compensation and employer liability laws separate civil action to recover civil liability arising from crime when double judicial costs are awarded iii. ix. ii. sale is governed by law on sales in barter. moral damages for mental anguish that attended the Page 114 of 230 iii. iv. plaintiff has contravened the terms of contract 2. The mother. . b) Barter i. value of thing is more than amount of money – barter Contract for piece of work Test in article 1467: • contract for delivery of an article which the vendor in the ordinary course of business manufactures or procures for general market (whether on hand or not) – sale • goods are to be manufactured specially for a customer and upon special order and not for the general market – contract Judicial costs Interest .ii. Answer: No. xi. v. donation is governed by law on donation. that the loss would have resulted in any event 5. principal remains owner even if object delivered to agent in sale. iii. in agency. agent assumes no risk/liability as long as within the authority given in sale. the defendant has done his best to lessen the plaintiff's loss or injury Bar Question (2003). WHEN DAMAGES MITIGATED: a. x. plaintiff derived some benefit as result of contract 3. Inchausti. whether the thing • transferred would have never existed but for the order – • contract for piece of work (abandoned) Habituality test – enunciated in Celestino v CIR. may recover damages for the bodily injury she suffered from the loss of the fetus which is considered part of her internal organs.

d. b. Since there is gross negligence. c. raped. abducted. 2231. A contract of sale may be absolute or conditional. 6. sale is onerous ii. Moral damages is awarded only to enable the injured party to obtain means. “PBMF-MWSS” a. 4. and the other to pay therefor a price certain in money or its equivalent. or malevolent manner.meeting of minds makes a perfect contract of sale but needs delivery to consummate. Spouse. When recovered a. Exemplary damages cannot be recovered as a matter of right. The social and economic/financial standing of the offender and the offended party should be taken into consideration in the computation of moral damages 4.with valuable consideration e) Commutative . Its amount need not be proved. the court will decide whether or not they should be adjudicated. Serious anxiety 2. exemplary damages can also be recovered. 2. Art. 2230. it is a mode w/c actually transfers ownership 3. Physical suffering b.imposes obligation on both parties d) Onerous . slander or other form of defamation Malicious prosecution Acts mentioned in art 309 of the RPC relating to disrespect of the dead and interference with funeral j. 27. In criminal offenses. or abused l. 2232. Art 2220 . exemplary damages may be granted if the defendant acted with gross negligence. 5. 32. Art. Acts and actions referred to in arts 21. Such damages are separate and distinct from fines and shall be paid to the offended party. 5. because its determination depends upon the amount of the compensatory damages that may be awarded to the claimant. fraudulent. donation is formal contract. i. Distinguished from other Contracts: a) Donation i. . f. Characteristics of Contract of Sale: a) Nominate . abduction. unlike accessory contract c) Bilateral .2. reckless. g) Title & not a mode . The parents of the female seduced. by reason of defendant's culpable action and not intended to enrich a complainant at the expense of defendant.equal value is exchanged for equal value f) Consensual . diversions or amusements that will serve to alleviate the moral suffering he has undergone. Mental anguish d. 28. e. b. 3. CA. SALES 1. 29. oppressive. Moral shock f.can stand on its own. h. ascendants and brother and sisters for acts mentioned in art 309 m. A stipulation whereby exemplary damages are renounced in advance shall be null and void. g. IN WHAT CASES MAY MORAL DAMAGES BE RECOVERED (enumeration not exclusive): Criminal offense resulting in physical injuries Quasi-delicts causing physical injuries Seduction. donation is gratuitous.title gives rise to an obligation to transfer. sale is consensual Page 118 of 230 loss of the unborn child. It need not also be alleged.law gave it a name b) Principal . 34 and 35 k. Fright e. Moral Damages 1. In quasi-delicts. 30. because it is merely incidental or dependent upon what the court may award as compensatory damages. Wounded feelings g. Social humiliation h. In contracts and quasi-contracts. (Geluz v. the court may award exemplary damages if the defendant acted in a wanton. Sentimental value of real or personal property may be considered in adjudicating moral damages 3. rape or other acts of lasciviousness Adultery and concubinage Illegal or arbitrary detention or arrest Illegal search Libel. exemplary damages as a part of the civil liability may be imposed when the crime was committed with one or more aggravating circumstances. Art. descendants. 26. 2 SCRA 801 [1961]). Besmirched reputation c. Contract of Sale – One of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing. c.in cases of willful injury to property or breaches of contract where defendant acted fraudulently or in bad faith Page 115 of 230 a.

Art 21 provides: “Any person who willfully causes loss or injury to another in a manner that is contrary to morals. Is the airline liable for actual and moral damages? Why or why not? Explain briefly. Right of plaintiff is violated c. however.”. Temperate or Moderate Damages 1. Purpose is not to identify but vindicate or recognize right violated 3. and not for the purpose of indemnifying the plaintiff for any loss suffered by him 2. However. Vasquez. they demanded an apology from FX’s management as well as indemnity payment. may be vindicated or recognized.. they were told they were upgraded by computer to First Class for the flight to manila because the Business Section was overbooked. Must be reasonable Liquidated Damages 1. However. when the stewardess allegedly threatened to offload them if they did not avail of the upgrade. DT and MT were prominent members of the frequent travelers’ club of FX Airlines. food. partial or irregular performance Exemplary or Corrective Damages 1.2005). in addition to the moral. 399 SCRA 2007 [2003]). Under Article 2219 of the Civil Code. moral damages may be recovered in the cases specified therein. RULE: It cannot co-exist with compensatory damages. they may recover moral damages if the cause of action is based on Article 21 of the Civil Code for the humiliation and embarrassment they felt when the stewardess threatened to offload them if they did not avail of the upgrade. 2219 (10) provides and includes: “Acts and actions referred to in Art. 2219 of the Civil Code. iniquitous or unconscionable b. There is also no basis to award moral damages for such breach of contract because the facts of the problem do not show bad faith or fraud on the part of the airline (Cathay Pacific v. While “immorality” and “dishonesty” are not included in Art. liquidated to compensatory damages Page 117 of 230 Answer: FX Airlines committed breach of contract when it upgraded DT and MT. On checking in. they are not entitled to actual damages. 2219 of the CC. After arrival in Manila. but during the transfer of luggage DT suffered pain in his arm and wrist. Concept: Adjudicated in order that a right of the plaintiff. Nominal Damages 1. although there is a breach of contract. Some pecuniary loss b. temperate. they sued the airline for a million pesos in damages. There is no showing that the pain in DT’s arm and wrist resulted directly from the carrier’s acts complained of. a) A criminal offense resulting in physical injuries b) Quasi-delicts causing physical injuries c) Immorality or dishonesty d) Illegal search e) Malicious prosecution Answers: (1) Moral damages may not be recovered in (c) immorality or dishonesty because it is not included in the enumeration of Art. Thus they gave in. embarrassed and vexed. DT and MT are entitled to actual damages only for such pecuniary losses suffered by them as a result of such breach. DT could have avoided the alleged injury by requesting the airline staff to do the luggage transfer as a matter of duty on their part. Hence. REQUISITES: a. They said they had guests in Business Class they should attend to. several of which are enumerated below. 2.Bar Question (2004. to be paid in case of breach thereof 2. however. Both refused to transfer despite better seats. Art. 1. Moreover. Bar Question (2006). Amount: More than nominal but less than compensatory where some pecuniary loss has been suffered but its amount can't be proved with certainty due to the nature of the case. They felt humiliated. Loss is incapable of pecuniary estimation c. Explain. over their objections. In Hong King. Immorality or dishonesty is analogous to acts contrary to morals and therefore covered by Art 2219. WHEN LIQUIDATED DAMAGES MAY BE EQUITABLY REDUCED: a. the same article provides that moral damages may be recovered “in the following analogous cases”. Choose the case wherein you cannot recover moral damages. which has been violated or invaded by the defendant. An award of nominal damages precludes the award of temperate or moderate damages. beverage and other services in First Class. There seems to be no showing that they incurred such pecuniary loss. to First Class because they had contracted for Business Class passage. ELEMENTS: a. 21. the couple were assigned seats in the Business Class for which they had bought tickets.. CONCEPT: imposed by way example or correction for the public good. Those agreed upon by the parties to a contract. Page 116 of 230 . When none was forthcoming. good customs or public policy shall compensate the latter for damages. Plaintiff has a right b. (2) Moral damages may be recovered in all of the five instances enumerated above.

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