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

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

Effect and Application of Laws


Civil Register
Use of Surnames
Family Relations
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
Parental Authority
Kinds of Obligations
Extinguishment of Obligations
Essential Elements
Defective Contracts
Rescissible Contracts
Voidable Contracts
Unenforceable Contracts
Void Contracts
Classification of Property
Ownership in General
Right of Accession
Quieting of Title
Ruinous Buildings and Trees in Danger of Falling
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Different Modes of Acquiring Ownership
Prescription of Ownership and Other Real Rights
Prescription of Actions
Actual or Compensatory Damages
Moral Damages
Nominal Damages
Temperate or Moderate Damages
Liquidated Damages
Exemplary or Corrective Damages
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
Bulk Sales Law
Anti-Dummy Law







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

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

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

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

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

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

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

b) c) Stages of Absence Provisional absence Declaration of Absence when the death of the absentee is provided and his estate or intestate heirs appear.7 years . 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. FC) Action to declare a person presumptively dead is proper only when the spouse of the absentee wants to remarry without administrator . of illegitimate children Varies depending on no.5 years from time of disappearance Presumption of death Ordinary absence: . FC) authority to be sole administrator of the conjugal partnership (Art 12. provided legitimes are not impaired TOTAL Varies depending on no. NCC) when the spouse of the absentee is asking for separation of property (Art 135. showing by a proper document that he has acquired the absentee's property by purchase or other title When to file Who may file Remedy No statutory period spouse receivership (Art 12. 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. of illegitimate children 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. if any after paying legitimes to be divided by the ratio of 2 for @ legitimate child TOTAL INTESTATE SHARE Whole estate divided by the ratio of 2:1 for @ legitimate child and illegitimate child respectively Illegitimate children ½ share of @ legit child 1 for @ illegitimate child (see above) 1 for @ illegitimate child (see above) Surviving spouse ¼ Same share as a legitimate child. respectively TOTAL INTESTATE SHARE Whole estate divided by the ratio of 2 @ legitimate child LEGITIMATE CHILDREN.2 years from time of disappearance with administrator . when a third person appears. FC) judicial separation of property (Art 12. ILLEGITIMATE CHILDREN AND SURVIVING SPOUSE Intestate Heir Legitimate children SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL Remaining portion of estate. provided legitimes are not impaired Same share as a legitimate child. of illegitimate children 1 Page 223 of 230 .4 years for purposes of remarriage 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 spouse Exception: Page 10 of 230 Intestate Heir Legitimate child SHARE AS LEGITIME ½ Illegitimate child ½ share of @ legitimate child 1 for @ illegitimate child (see above) 1 for @ illegitimate child Surviving spouse ¼ Same share as a legitimate child TOTAL Varies depending on no. of illegitimate children Legitimes wouldn’t be impaired 1 f.

from the time he is considered missing in action c) danger of death under other circumstances. Relevant facts have been fully and properly developed iv. of children 1 Extraordinary Absence: 4 years (2 years for purposes of remarriage) 4. 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. of children plus the surviving spouse No. 1 for @ illegitimate child 1 for @ illegitimate child provided that legitimes wouldn’t be impaired TOTAL Varies on no. from time of disappearance Civil Register d. 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. 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. Presence of opposing parties ii. Notice to indispensable parties iii. Requirements of an Adversarial Proceeding i. 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. AND p) change of time 2. AND SURVIVING SPOUSE Page 222 of 230 1. of children Intestate Heir e. LEGITIMATE CHILDREN AND ILLEGITIMATE CHILDREN SHARE AS LEGITIME SHARE AS FREE DISPOSAL TOTAL INTESTATE SHARE Legitimate children ½ Remaining portion of estate after paying legitimes 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. of children plus the surviving spouse (see above) TOTAL Varies on no. ONE LEGITIMATE CHILD.TOTAL ¾ c. of children Varies on no. Intestate Heir Legitimate children ¼ 1 succession – 10 years 75 years of age – 5 years 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 Surviving spouse Same as share of @ legitimate child Legitimes to be divided equally between total no. Opposing counsel was given an opportunity to demolish the opposite party's case (not ex parte) Page 11 of 230 . of children Varies on no. ILLEGITIMATE CHILD.

wife is the innocent party 3 Surname to be Used Father’s surname Father’s surname Adopter’s surname Mother’s surname.wife is the guilty party . Evidence has been thoroughly weighed and considered vi. father’s surname if acknowledged Father’s surname Legally separated she shall resume her maiden name and surname choices: resume using her maiden name and surname continue employing her husband’s surname. Legitimate parents and illegitimate parents Surviving spouse Other collaterals within 5th degree Collateral remoter in degree and state Legitimate children Illegitimate children Legitimate parents Illegitimate parents and Surviving spouse Collaterals in the same degree State No one Everyone No one Use of Surnames 1 2 3 4 5 6 1 2 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) Mother’s surname Surname to be Used maiden’s first name and surname + her husband’s surname maiden’s first surname + her husband’s surname e. unless: the court decrees otherwise. Mrs. Intestate Heir Legitimate child Surviving spouse SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL ½ TOTAL INTESTATE SHARE 1 ½ ½ 1 ONE LEGITIMATE CHILD AND SURVIVING SPOUSE SHARE AS LEGITIME ½ SHARE AS FREE DISPOSAL TOTAL INTESTATE SHARE ½ ¼ ¼ ½ Page 221 of 230 . but prefixing a word indicating that she is his wife e.v. Compliance with the publication requirement Siblings. 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) Page 12 of 230 A MORE DETAILED SUMMARY OF INTESTATE SHARES: a. illegitimate children. nephews nieces All other collaterals and state Legitimate children. LEGITIMATE CHILDREN AND LEGITIMATE DESCENDANTS ALONE Intestate Heir Legitimate children TOTAL b. 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) Marriage is annulled . Marife Tan her husband’s full name.g.g.

e) when the change is necessary to avoid confusion 3. adoptive parents surviving spouse 5 Legitimate siblings. Happy Lomibao Tan add the Roman numerals II. nephews. nieces illegitimate siblings. CONCURRENCE IN LEGAL OR INTESTATE SUCCESSION Intestate Heir Legitimate children and Legitimate descendants EXCLUDES Ascendants. shall either : add a middle name e. Ascendants and Descendants Grandsons and other male descendants. III and so on 4 Surviving spouse Legitimate children Illegitimate children Legitimate parents and Illegitimate parents 2. Remedies available against the usurper to the person whose name has been usurped a) Civil (insofar as private persons are concerned) i. Marife Lomibao-Tan. damages (actual and moral) b) Criminal (when public affairs are prejudiced) 5. collaterals and state No one Legitimate parents and legitimate ascendants Collaterals and state Legitimate children Surviving spouse Legitimate children and legitimate parents Illegitimate children and surviving spouse Illegitimate parents Collaterals and state Surviving spouse Collaterals other than siblings. b) must not be filed within 30d prior to an election. d) when the request for change is a consequence of a change of status. 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 4.and legitimate ascendants and legitimate or illegitimate descendants legitimate or illegitimate descendants Illegitimate children and legitimate or illegitimate descendants Surviving spouse illegitimate parents legitimate or illegitimate parents and legitimate ascendants. such as when a natural child is acknowledged or legitimated. When Use of Another's Name is Not Actionable Page 13 of 230 . nephews. c) the petition must be verified 5. 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. 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.g. nieces siblings. nieces 6 Legitimate collateral relatives State State 7 State 3 4 surviving spouse 1. Procedural Requirements for a Petition for Change of Name a) 3 years residency in the province where change is sought prior to the filing. Happy Chris Tan add the mother’s surname e. injunction ii.g. nephews and nieces Legitimate children and illegitimate children No one Page 220 of 230 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. Jr. nephews. collaterals and state EXCLUDED BY No one CONCURS WITH Surviving spouse Illegitimate children Illegitimate children and Descendants Illegitimate parents.g.

450. rabbi. no injury is caused to that person's right when use is motivated by modesty. If a person dies with a void will 3. FUNDAMENTAL UNDERLYING PRINCIPLES IN LEGAL OR INTESTATE SUCCESSION: 1. Consul-general. If a person dies with a will which has subsequently lost its validity 4. and no right of accretion takes place 8. or pen name. 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 2. 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. 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. consul or vice-consul – can solemnize marriage between Filipinos abroad vi. 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.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.50.000 Elvira-----------------. CAUSES FOR LEGAL OR INTESTATE SUCCESSION: 1. shall be respected. Incumbent member of the judiciary within the court’s jurisdiction ii. except in cases provided in the Code 2. a desire to avoid unnecessary trouble.250. Ship captain or airplane chief . Essential Requisites of Marriage a) Legal capacity of contracting parties b) Consent freely given in the presence of the solemnizing officer 3. 4. 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. or other reason not prohibited by law or morals the free portion. If a person dies without a will 2.250. In sum. If the heir dies before the testator. Military commander of a unit to which a captain is assigned. ORDER OF LEGAL OR INTESTATE SUCCESSION: 1 2 Legitimate Child Legitimate child and legitimate descendants ILLEGITIMATE CHILD legitimate child and legitimate descendants ADOPTED CHILD legitimate child and legitimate descendants Legitimate parents illegitimate children illegitimate children and Page 219 of 230 . Rule of Equal Division – the relatives who are in the same degree shall inherit in equal shares 3.000. there being no substitution. the estate of Lamberto will be distributed as follows: Baldo-----------------. screen. When the will does not institute an heir to.000 --------------1. Duly authorized priest. 7. Marriage Exempt from License Requirements Page 14 of 230 1.000 FAMILY RELATIONS Legal Succession Marriage 1.only in articulo mortis .a) b) c) d) when the name is used as stage. Mayor (Local Government Code of 1991) 4. and by using the name of another. If the heir repudiates the inheritance. Rule of Proximity – the relative nearest in degree excludes the farther one 2. imam or the minister of any church or religious sect iii.000 Ernie------------------. If the suspensive condition attached to the institution of the heir does not happen or is not fulfilled 6. provided: use of name is in good faith. When the heir instituted is incapable of succeeding.000 Vilma-----------------.

marriage counseling. even if lacking marriage is still valid. VACANCIES ARE FILLED: Substitution Representation Accretion 5. Bigamous or polygamous marriage iii. Legacies for Education 5.000. if lacking same effect as above 7.000. The legacy of 50. the testamentary provisions in the will shall be annulled but only to the extent that her legitime was impaired.Valid but party responsible for such irregularity shall be civilly. Legacies or devises declared by the testator to be preferential 3.5. disqualified to receive the legacy of 100. VACANCY IN SUCCESSION A) CAUSES OF VACANCY IN SUCCESSION: 1. suspend the issuance of the marriage license for a period of 3 months from the completion of publication of the application for marriage license. which applies only to Page 218 of 230 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.Voidable c) Irregularity in formal requisite. determinate thing which forms a part of the estate 6. Lamberto 1) disinherits his daughter Wilma because “she is disrespectful towards me and raises her voice talking to me”. 2) omits entirely his spouse Elvira.needs parental consent. On the other hand. Hence.00? 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. She is. if they are able to obtain a license during the 3-month period. Remuneratory legacies or devises 2. Marriages void under Article 53 Page 15 of 230 . he shall be entitled to receive it. the marriage shall be VOID. Only compulsory heirs in the direct line may be the subject of preterition. 6.00 to his mistress Rosa and P50. 7. However. or else marriage voidable b) 21 years old and above but below 25.000. Incapacity/Predecease . c) 18 years old and above but below 25. Not having been preterited. criminally and administratively liable 6. If the parties get married during the 3-month period without a license. Flaws in the Marriage Requisites and Effects a) ABSENCE of ANY essential or formal requisites. 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. The legacy in favor of Rosa is void under Article 1028 for being in consideration of her adulterous relation with the testator. ORDER OF PAYMENT IN CASE ESTATE IS INSUFFICIENT TO COVER ALL LEGACIES AND DEVICES: 1. therefore. 3) leaves a legacy of P100. How will you distribute his estate of P1.marriage void ab initio Except: If the marriage is solemnized by unauthorized person.The heir does something 3.The testator creates it himself 2. Repudiation . The institution of Baldo. she will be entitled only to her legitime. 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. Marriage between persons below 18 years old ii. 2. The total omission of Elvira does not constitute preterition because she is not a compulsory heir in the direct line. Legacies for Support 4.000 pesos.Something happens to the heir B) HOW 1.00 to his driver Ernie and 4) institutes his son Baldo as his sole heir. All others pro-rata Bar Question (2000). 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) 4.000. Mistake in identity iv.000 pesos in favor of Ernie is not inofficious not having exceeded the free portion. Disinheritance .needs parental advice. 3. Hence. In his last will and testament. the marriage will still be valid but may be held civilly and criminally liable. The cause must be certain and true. Other requirements: if either or both parties are: a) 18 years old and above but below 21.

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

and the institution of D-1 and D-2 shall only apply on the free portion in the amount of P500. 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 Failure to comply with these requisites will make the subsequent marriage void ab initio. while the other half will be inherited by the parents Page 216 of 230 9.00. and instituting daughters D-1 and D-2 as his heirs to his entire estate of P1. Luna as their inheritance from Mrs.000. the institution of D-1 and d-2 shall be annulled insofar as it prejudices the legitime of D. but the child died five hours after birth. then the compulsory heir is entitled to completion of legitime under Article 906 If the impairment is thru donation. recording in the civil registry and registries of property of the judgment of annulment or absolute nullity. Luna will go to the parents of Mrs. the resulting obligation shall be enforced against the ACP. D. The other spouse may object on valid. Hence. serious and moral grounds. Palma’s death. D-1 and D-2. If benefit accrued to the family before the objection. 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. VOID MARRIAGES (imprescriptible) a) Void Ab Initio under Article 35 ii. Solemnized by unauthorized solemnizing officer (Except if either or both parties believed in good faith that the officer had authority) iv. how should his estate be divided? Explain. His widow gave birth to a child four months after Mr. Who is entitled to Mr.00. then remedy is collation. 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). 5.000. and the parents of his widow.000. Solemnized without license (Except when license not required) v. The objection is proper AND Benefit has accrued to the family before and after the objection. He executed a Will disinheriting D because she married a man he did not like.66 + P250. REQUISITES (as provided in Chua v. 52 which requires the ff.66 + P250.000.000. Luna also died because she suffered from the difficult childbirth. Luna is now being claimed by his parents. a) Mr.00) Pesos. the shares will be: D P166. the resulting obligation shall be enforced against the separate property of the spouse who has not obtained consent.000. Therefore. Luna. Page 17 of 230 .b) c) If the impairment is partial. b) Mr. has three daughters D. a widower. Palma. In case of disagreement. Luna’s death.000. or a brother or sister.00 divided into three equal parts and D-1 and D-2 will get a reduced testamentary disposition of P250. If benefit accrued to the family after the objection has been made. ii. after the annulment of the marriage: i.000.00 each. leaving an estate of Ten Million (P10. partition and distribution of the spouses’ properties ii. Contracted by any party below 18 years old iii.00 b) Half of the estate of Mr. Two days after the child’s death. 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.66 D-1 P166. Luna died. The estate of Mr. Luna’s estate and why? 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. the widow of Mr.00 D-2 P166. Therefore.666. 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 c) d) Render mutual help and support Either spouse may exercise any legitimate profession or business without the consent of the other. 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. CFI [1977] & reiterated in Gonzales v. D-1 and D-2 will get their legitimes of P500.666. delivery of the presumptive legitime of the children iii. the court shall decide whether i.000. Upon Mr.666.

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

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

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

shall go to the four younger children by institution in the will. Five years later. The legitime therefore of the oldest son is P100. Juan opposed the will on the ground of preterition. At the time of her death. 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 B) EFFECTS OF PRETERITION: 1. he shall be disqualified to inherit from the innocent spouse both testate and intestate Distinction between Void and Voidable Marriages As to nature As to susceptibility to ratification As to effect on property As to effect on children Void Inexistent from the time of performance Cannot be ratified No community property.000 in a bank. This donation is considered an advance on the sonis inheritance. the estate of the testatrix is P1. The institution of heir is annulled 2. the institution shall be effectual. Of this amount. 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. 15. Because her eldest son Juan had been pestering her for capital to start a business.000.000 to him. Insurance If one spouse acted in bad faith.000. should be incapacitated to accept the inheritance (INCAPACITATED) Page 212 of 230 Propter Nuptias children or if there are none. If both spouses acted in bad faith.3. (RENOUNCE) or c.000.000. innocent spouse may revoke his designation as beneficiary in the insurance policy even if such designation be stipulated irrevocable Succession If one spouse contracted the marriage in bad faith. the innocent spouse Shall remain VALID except Same Same Same Same Same Same If donee contracted the marriage in bad faith. leaving a last will and testament in which she instituted only her four young children as her sole heirs. since the donation given him was P100. one-half or P500. the institutions in the will shall be respected but the legitime of the oldest son has to be completed if he received less. After collating the donation of P100. Josefa gave him P100.000 is the legitime of the legitimate children and it follows that the legitime of one legitimate child is P100. therefore. he has already received in full his legitime and will not receive anything more from the decedent.000 to the remaining property of P900. Devises and legacies shall remain valid as long as they are not inofficious 3. Each will receive P225. donations propter nuptias made to the donee are revoked by operation of law.000. 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. However.000. without prejudice to the right of representation Bar Question (2001). die before him (PREDECEASE) b. her only property left was P900. Answer: There was no preterition of the oldest son because the testatrix donated P100. There being no preterition. How should Josefa’s estate be divided among her heirs? State briefly the reason(s) for your answer.000. donations propter nuptias made by one in favor of the other are revoked by operation of law. children of the guilty spouse by previous marriage or in default.000. 4. to be divided equally among them. The remaining P900. only co-ownership (Art 147) Children are illegitimate Exceptions: In case of psycho incapacity (Art 36) Page 21 of 230 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 . should not wish. If the omitted compulsory heir should die before the testator. Josefa died.000.

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. He can give his estate to any person qualified to inherit under him However. some or all of the heir/s in the will 2. The will is formally valid 5. 2.e. iii. Dissolution of property regime Page 22 of 230 3. Attempt to corrupt or induce petitioner to engage in prostitution or connivance in such corruption or inducement iv. 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 a decree of annulment Can no longer be impugned after death of one of the parties 11. Final judgment sentencing respondent to imprisonment of more than 6 years v. Sexual infidelity or perversion ix. Designation in will of person/s to succeed 2. or threats If it was procured by undue and improper pressure and influence. Physical violence or moral pressure to compel change in religious or political affiliation iii. Simultaneity – when several heirs are instituted. 2. b. LEGAL SEPARATION a) Grounds for Legal Separation i. He can give only the disposable portion to strangers Legitimes of compulsory heirs must be respected 14. iv. Individuality – heirs collectively instituted are deemed individually named unless a contrary intent is proven 3. Drug addiction or habitual alcoholism vi. 4. i. Repeated physical violence or grossly abusive conduct directed against petitioner. Subsequent bigamous marriage viii. The person so named has capacity to succeed 4. Attempt by despondent against the life of the petitioner x. RULES REGARDING A PERSON’S RIGHT TO DISPOSE OF HIS ESTATE: 1. ii. v. 6. The omission must be that of a COMPULSORY HEIR Page 211 of 230 . 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 Effects of Separation i. or the influence of fear. No vice of consent is present 6. If one has no compulsory heirs: a. b. Marriage bond is not severed iii. 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 12. PRETERITION A) CONCEPT OF PRETERITION: 1. Cannot be attacked collaterally. he must respect restrictions imposed by special laws If one has compulsory heirs: a. If the formalities required by law have not been complied with If the testator was insane. only directly. 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. or otherwise mentally incapable of making a will. they are instituted simultaneously and not successively 13. Can still be impugned even after death of parties 1. at the time of its execution If it was executed through force or under duress. Equality – heirs who are instituted without a designation of shares inherit in equal parts 2. Spouses are entitled to live separately ii. There must be an omission of one. Lesbianism or homosexuality vii. a common child or a child of the petitioner ii. Abandonment for more than one year without justifiable cause b) c) Grounds i. vi. there must be judicial declaration of nullity.

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. The revocation by destruction therefore is dependent on the validity of the second will. Upon the death of Mr. may it now be admitted to probate and given effect? Why? (5%) Answer: Yes. except in case of voluminous books of account or inventories 10. Assuming that a copy of the first will is available. By the execution of a will. added to or altered 9. vi. (a) declaration of nullity of marriage. d) 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.e. and/or (d) separation of property. The marriage is voidable even though the husband was not aware that he had the disease at the time of marriage. the first will may be admitted to probate and given effect. provided that the disease was present at the time of the marriage.. v. (ii) If the wife refuses to come home for three (3) months from the expiration of her contract. or by some other person in his presence. 11. 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. (iv) If the husband has a serious affair with his secretary and refuses to stop notwithstanding advice from relatives and friends. Answer: (i) Since AIDS is a serious and incurable sexually-transmissible disease. alienations. 5. Innocent spouse may revoke designation of guilty spouse as beneficiary in insurance policy even if such designation be stipulated as irrevocable Effects of Reconciliation i. codicil or other writing executed as provided in case of wills 3. REVOCATION OF A WILL: 1. but it was denied probate due to formal defects. Mr. his second will was presented for probate by his heirs. When the testator tore the first will. she is presumed to have abandoned the husband and he Page 23 of 230 . perjury or false testimony iv. 37). 6. deaf or dumb Able to read and write Domiciled in the Philippines Have not been convicted of falsification of a document. GROUNDS FOR DISALLOWANCE OF A WILL: Page 210 of 230 vii. 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. Reyes. Molo. i. Which of the following remedies. 4.3. or obliterating the will with the intention of revoking it. A week later. (c) legal separation. following which he tore his first will to pieces. liens and encumbrances registered in good faith before the recording of the complaint for revocation in the registries of property shall be respected. (iii) If the husband discovers after the marriage that his wife has been a prostitute before they got married. Legal separation proceedings if still pending shall be terminated ii. he executed another will which expressly revoked his first will. the wife may file an action for annulment of the marriage on this ground whether such fact was concealed or not from the wife. by the testator himself. 90 Phil. 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). 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. Since it turned out that the second will was invalid. 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. By burning. and by his express direction Bar Question (2003). the tearing of the first will did not produce the effect of revocation. Not blind. tearing. however. Reyes executed a will completely valid as to form. By implication of law 2. (b) annulment of marriage. This is known as the doctrine of dependent relative revocation (Molo v. viii. canceling. However. (v) If the husband beats up his wife every time he comes home drunk.

QUALIFICATIONS OF WITNESSES TO A NOTARIAL WILL: 1. in some practicable manner. he has no remedy.may file an action for judicial separation of property. 1989 by Ric’s uncle. or chastity shall constitute fraud as legal ground for an action for the annulment of marriage. Entirely written. No misrepresentation or deceit as to character. 2. Holographic – in three ways a. Testator must personally read the will. 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 C) ADDITIONAL REQUISITES FOR A NOTARIAL WILL IF THE TESTATOR BE DEAF OR A DEAF-MUTE: 1. After 5 years of married life and blessed with 2 children. 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. Of the age of 18 years or more Page 209 of 230 . got married when they were 18 years old. (4) If you were the counsel for Gigi. They got married in a Catholic church in Manila. Bar Question (2006). Laguna. Article 101. FC). EFFECT OF INSERTION ON THE VALIDITY OF A HOLOGRAPHIC WILL: (Tolentino) a) If made after the execution of the will. PROVIDED that said dispositions are also dated and signed. then the insertion becomes part of the will. Gigi and Ric. Otherwise. Juliet gave birth to twins. health. 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. IF the refusal continues for more than one year from the expiration of her contract. then the will is void because it is not written entirely by the testator 7. a 16 year-old sophomore in a local college and a Seventh-Day Adventist. (Article 46 FC) (iv) The wife may file an action for legal separation. Ric never doubted her age much less the authenticity of her birth certificate. Aissa and Aretha. 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. In a language or dialect known to the testator 3. the spouses developed irreconcilable differences. FC). The intention not to return cannot be presumed during the 3-year period of her contract. in Calamba. Their marriage was solemnized on August 2. Dispositions may be added below the signature. In writing 2. he shall designate two persons to read it and communicate to him. She presented to him a birth certificate showing she is 18 years old. 101. and everything is written by the hand of the testator himself b. Notarial – only through a codicil 2.55 (10) of the Family Code on the ground of abandonment of petitioner by respondent without justifiable cause for more than one year. but without the consent of the testator. if able to do so. and the entire will becomes void. 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). A year after. They decided to get married with the consent of Juliet’s parents. (iii) If the husband discovers after the marriage that his wife was a prostitute before they got married. and signed by the hand of the testator himself 5. what action/s will you take to enforce and protect her interests? Explain. He overlooked the fact that his license to solemnize marriage expired the month before and that the parties do not belong to his congregation. (v) The wife may file an action for legal separation on the ground of repeated physical violence on her person (Article 55(1). TH wife is deemed to have abandoned the husband when she leaves the conjugal dwelling without any intention of returning (Article 101. a Baptist Minister. dated. 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. Suggested Answers: (1) As counsel for Gigi. The husband’s sexual infidelity is a ground for legal separation (Article 55. While separated. FC). fortune. AMENDING A WILL: 1. FC). Through a codicil which may either be notarial or holographic 6. 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). Of sound mind 2. rank. Catholics. the husband may file the action for legal separation under Art. Ric fell in love with Juliet. 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. so they parted ways. FC). 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.

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. actions: (1) Legal separation on the grounds of subsequent bigamous marriage and sexual infidelity. the system of ACP shall govern c) Local custom General rule: once marriage is celebrated. In writing 2. under his express direction. The fact that the testator signed the will and every page. Subscribed at the end by the testator himself or by the testator’s name written by some other person in his presence. consisting of the portion shared by Ric in whatever property was commonly or jointly acquired by Ric and Juliet. and by his express direction 2. except the last. Wills 1. (Art 135/136) 2. must be signed by the testator or by the person requested by him to write his name. It must be acknowledged before a notary public by the testator and the witnesses 1. DEFINITION OF WILL. All the instrumental witnesses witnessed and signed the will and all its pages in the presence of the testator and of one another 6. KINDS OF WILLS: a) Notarial – an ordinary or attested will b) Holographic – a handwritten will (2) As counsel for Gigi. (2) Receivership of the conjugal or community property. TESTAMENTARY CAPACITY: a) All persons who are not expressly prohibited by law b) 18 years old and above c) Of sound mind. and by the instrumental witnesses of the will. or caused some other person to write his name. 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. Each and every page. (3) Judicial separation of property. It must contain an attestation clause. (5) Action for damages for abuse of rights.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. The number of pages used upon which the will is written ii. I will file the ff. on the left margin 4.to solemnize the marriage between Ric and Gigi who were both nonmembers of the Baptist Church. and on the basis of the legal presumption that her marriage to Ric is valid. at the time of its execution 3. Requisites a) b) c) d) If a party executing the settlement needs parental consent. there is already a property regime and this cannot be changed . In a language or dialect known to the testator B) ADDITIONAL REQUISITES FOR VALID NOTARIAL WILL: 1. What Governs Property Relations Between Spouses a) Marriage settlement – future spouses may agree upon the regime of ACP. Attested & subscribed by three or more credible witnesses in the presence of the testator and of one another 3. REQUISITES OF WILLS A) COMMON REQUIREMENTS TO BOTH WILLS: 1. stating the following: i. Property Relations Between Spouses 4. Each and every page of the will must be numbered correlatively in letters placed on the upper part of each page 5. the guardian appointed by the court must be made a party to the settlement Registration (to bind 3rd persons) Page 25 of 230 . in the presence of the instrumental witnesses iii. the parent/guardian whose consent is needed must be made a party to the agreement e) f) Page 208 of 230 of Valid Marriage Settlement In writing Signed by the parties Executed before the celebration of marriage 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. 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.

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.3. except by a valid disinheritance b) Voluntary or Testamentary – those who are instituted by the testator in his will. relying on the transfer certificate of title showing that Juan is the registered owner of the land. it depends: -if subsequent marriage is void pursuant to Art. 52 and 53. 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. it did not have the effect of forfeiting his share in the remaining lot. 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. trust) for the benefit of Juana with Juan as trustee of one-half undivided or ideal portion of each of the two lots. If it is with a resolutory condition and the condition is complied with v. In legal separation and donee is the guilty spouse vi. or to the portion of such estate not disposed of by will Page 207 of 230 . 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. contained in the marriage settlement which are automatically rendered void if the marriage does not take place). Juana has no cause of action against the buyer who acquired the land for value and in good faith. moral shock and wounded feelings she had suffered. KINDS OF SUCCESSION a) Testamentary – that which results from the designation of an heir. Marriage is annulled and donee in bad faith iv. of which they cannot be deprived by the testator. 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. However. in an amount predetermined by law. anxiety. 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. 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. DEFINITION OF SUCCESSION It is a mode of acquisition by virtue of which the property. KINDS OF HEIRS: a) Compulsory – those who succeed by force of law to some portion of the inheritance.5 years (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. moral damages for the mental anguish. 52 and 53 – 5 years from finality of judicial declaration of nullity (if action to recover property) Page 26 of 230 2. SUCCESSION 1. and attorney’s fees. Therefore. 1149) from the time marriage is not solemnized on the fixed date ii. 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. 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. If marriage is judicially declared void. exemplary damage by way of example for the common good. Marriage without the needed parental consent iii. Marriage is not celebrated or is judicially declared void ab initio ii. Juana may claim actual or compensatory damage for the loss of her share in the land. and the remaining lot be adjudicated and reconveyed to her. 40 in relation to Arts. 40 in relation to Arts. -Judicially declared void on grounds other than Art.

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

If the community property is insufficient to cover all these liabilities. therefore. however. g) When a person through fraud succeeds in registering a land in his name. except those falling under par. 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). the decision of the husband prevails. as when the trustee files an ejectment suit against the beneficiary. In the computation of time necessary for prescription. Administration of community property belongs to both spouses jointly. the spouses shall be solidarily liable for the unpaid balance with their separate properties. However. fruits and income of separate properties of spouses ii. 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. 9. Page 205 of 230 . the attainment of the purpose for which the trust was created. b) If the wife decides to go to court. had always been in possession thereof. The issuance of said certificate of title constitutes constructive notice to the public. System of Conjugal Partnership of Gains a) The spouses contribute the following to a common fund: i. products. This rule. Debts and obligation of ACP are paid 3. the matter should be brought to court and the court will give the authority. 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. the present possessor may complete the period necessary for prescription by tacking his possession to that of his grantor. that is. Proceeds. e) but where the rights of the beneficiary are recognized by the trustee. but from the date of recording of the release of the mortgage. the law creates a constructive trust in favor of the defrauded party. c) Both spouses must approve any dispositions or encumbrances and consent of the other spouse regarding the disposition must be in writing. such disposition/encumbrance is void. The latter is granted the right to recover the property fraudulently registered within a period of ten years. The action for reconveyance is in reality an action to quiet title. Adjudication of conjugal dwelling and custody of common children Conjugal Partnership of Gains 1. Termination of ACP/CPG a) Death b) Legal separation c) Annulment d) Judicial separation of property during marriage 6. 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). on which date the cestui que trust was charged with the knowledge of the settlement of the mortgage obligation. the ten-year prescriptive period commences to run from the time the trustee begins to assert his title or to hold adversely. a) In cases of disagreement. Presumptive legitimes of children are delivered 6. Everything acquired by spouses through chance Page 28 of 230 6. Inventory of all properties 2. if proper. Remains of the separate properties of the spouses are returned to the owner 4. the action may be filed from the discovery of the fraud or notice thereof. Procedure for Dissolution of ACP 1. (See Article 1456). she must do so within 5 years from the date of the contract implementing the husband’s decision. otherwise. 5. Everything acquired by spouses through their efforts iii. the action is imprescriptible. however. where the ownership of the land was sold fictitiously to avoid a foreclosure of mortgage. or when he sells portions of the property. applies only where there is privity between successive possessors. which was fraudulently registered in the name of another. f) Continuous recognition of a resulting trust precludes any defense of prescription or laches in a suit to declare and enforce the trust. But if the legitimate owner of the subject property. d) In another case. it was ruled that the tenyear prescriptive period should be counted not from the registration of the simulated sale. Net remainder of the ACP is divided equally between husband and wife 5. 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. 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. 4. the constructive notice rule cannot be applied. d) If one spouse acts without the consent of the other or without court approval.

Those acquired during the marriage with conjugal funds ii. expenses upon conjugal property e) Taxes and expenses for mere preservation of separate property f) Expenses for professional. barter or exchange with exclusive property iv. 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 . both spouses or one with the consent of the other d) Taxes.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. 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. work or profession of either or both spouse iii. 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. Thus. He has performed open and unequivocal acts of repudiation amounting to an ouster of the cestui que i.spouse. Acquisition of property through prescription a) By trustee: The possession of a trustee is in law possession of the cestui que trust and. industry. charges. a third person who holds actual. Page 204 of 230 b) Exclusive Property in CPG i. vocation or self improvement courses i) Expenses of litigation 3. therefore. 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. Those acquired through occupation vi. Charges upon the CPG a) Support of the spouses. That purchased with exclusive money of spouse c) What Constitutes CPG i. 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. 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. Livestock in excess of what was brought to the marriage vii. liens. That acquired during the marriage gratuitously iii. Trustee may claim title by prescription founded on adverse possession where it appears that: 1. public. 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. open. Fruits of conjugal property due or received during the marriage and net fruits of separate property iv. trust 2. 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. acquires title to the land by prescription as against such trust. Share in the hidden treasure v. 3. That brought into the marriage as his/her own ii. unless there is concealment of the fact giving rise to the trust 4. b) Such positive acts of repudiation have been made known to the cestui que trust The evidence thereon should be clear and conclusive. it cannot be a good ground for title by prescription ii. That acquired by redemption. By third persons: Though the statute of limitations does not run between trustee cestui que trust as long as the trust relation subsists. 4. and continuous possession of a land adversely to the trust. Those acquired by chance 2. 5. it does not run between the trust and third persons. Those obtained from labor.

when it does not appear when the trustee repudiated existence of the fiduciary relation. then the law that governs is the New Civil Code (Persons). At that time. cost P600. but not expressed in the deed or instrument of conveyance. Bob died. he having acquired the same by lucrative title (par. in a more restricted sense and as contra-distinguished from a resulting trust. 1988? Answers: 1. or is otherwise plainly put on guard against the trustee.000. or which are super induced on the transaction by operation of law. 2. he constructed a two-room bungalow with savings from his own earnings. expressly or impliedly evincing a direct intention to create a trust by the construction of equity in order to satisfy the demands of justice. Bob and Issa got married without executing a marriage settlement. Yes. then the property relations that will Page 30 of 230 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 9. Since Bob and Sofia got married in 1970. 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. As such. 2. survived only by his wife Issa and his mother. By conjugal partnership of gains. it is a trust not created by words. 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. Will your answer be the same if Bob died before August 3. Kinds: a) Resulting trust – a trust whish is raised or created by the act or construction of law. Implied Trusts 1. Distinction between ACP and CPG ACP All the properties owned by the spouses at the time of marriage become community property 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 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. Laches applies from the trustee openly denies or repudiates the trust and the beneficiary is notified thereof. in which case. 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. In 1975. Art. Civil Code). it is raised by implication of law and presumed always to have been contemplated by the parties. it does not arise by agreement or intention but by operation of law 3. Civil Code). In this instance. Civil Code.000. 158. trust can never result from acts violative of the law. 2.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. Assuming that the relative values of both assets remained at the same proportion: 1. 148. is matters of equity. In 1970. Since Bob and Issa contracted their marriage way back in 1970. 119. the lot was worth P800. 142. In 1989. Civil Code). 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 Bar Question (1998). the answer would still be the same. the same shall be taken to have been made only upon the filing of his answer to the complaint. Bob inherited from his father a residential lot upon which. 2. independently of the particular intention of the parties. Sofia. or in its more restricted sense. are deducible from the nature of the transactions as matter of intent. in 1981. Concept: Implied trusts are those which.00 while the house.00. The doctrine of implied trusts is founded upon equity. However. the lot inherited by Bob in 1975 is his own separate property. State whether Sofia can rightfully claim that the house and lot are not conjugal but exclusive property of her deceased son. Effect of Laches a) Cestui que trust is entitled to rely upon the fidelity of the trustee. when finished. Examples are those found in Articles 1448 to 1455 of the NCC b) Constructive trust – a trust raised by construction of law. Distinction between Express and Implied Trusts Express Trust Implied Trust Page 203 of 230 . the intention as to which is to be found in the nature of their transaction. b) On the other hand.

and on satisfaction of all legal liabilities growing out of the acceptance of the trust. 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 8. the courts will appoint a trustee to fill the office that he declines. c) Unless a contrary intention appears in the instrument constituting the trust. 119. 1988 (effectivity date of the Family Code). the trustee is liable in its individual capacity. 1. It will not matter if Bob died before or after August 3. When spouses agree to revive their former property regime 7. declination or refusal or disqualification of a trustee does not operate to defeat or void the trust. Termination 5. 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. Loss of parental authority as decreed by the court iv. c) Acceptance by the beneficiary of a gratuitous trust is not subject to the rules for the formalities of donations. Grounds for Revival of Former Property Regime i. When the absentee spouse reappears iii. 4. since if he declines the trust. Declination. Unions Governed by Article 147 Page 202 of 230 Page 31 of 230 . Separation of Property of the Spouses 5. Civil Code) 4. it is essential that his trust be express. Administrator spouse has abused authority vi. When civil interdiction of the prisoner-spouse terminates ii. Rule: In the absence of an express declaration in the marriage settlements. When parental authority is judicially restored to the spouse previously deprived thereof vi. When the spouse who has abandoned the conjugal home returns and resumes common life with the other v. his acceptance of the trust is not necessary to its existence and validity. what matters is the date when the marriage was contracted. e) When a person administering property in the character of a trustee inconsistently assumes to be holding in his own right. a) Sufficient Cause for Judicial Separation of Property i. Abandonment or failure to comply with family obligation v. the separation of property between the spouses during the marriage shall not take place except by judicial order. Separation in fact for one year and reconciliation is highly improbable 3. However. (Art. Acceptance. 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. When the court authorizes resumption of administration by the spouse formerly exercising such power iv. Civil Code). As Bob and Issa contracted their marriage way back in 1970. 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. with agreement of beneficiaries. prescription is permitted) govern is still the relative community or conjugal partnership of gains (Art. d) Renunciation of a trust after its acceptance can only be by resignation or retirement with court approval. Acceptance of Trust by the Beneficiary a) This is essential to the creation and validity of a trust. 158. the property relation that governs them is still the conjugal partnership of gains. nor does it operate to vest legal as well as equitable title in the beneficiary.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. 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. When may a trustee sue as such? Before a trustee may sue or be sued alone as such. Civil interdiction of the spouse of petitioner ii. 6. or Renunciation by the Trustee a) In the case of an express trust. 2. Judicial separation of property may either be voluntary or for sufficient cause. 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.

until after termination of cohabitation d) In case of void marriage – if only one party is in good faith. 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 3. ii. 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 201 of 230 . Requisites a) There must be: i. not for validity between the parties. d) Regarding third persons. By admission of the trustee that he holds the property only as a trustee iii. mistake. the trust must be in public instrument registered in the Registry of Property if it concerns real property. each vacant share shall belong to the respective surviving descendants g) In the absence of such descendants. no particular or technical words are required. an oral agreement is valid and enforceable 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. the duty to convey the property arises because it was acquired through fraud. by analogy. and iii. undue influence. property or industry shall be owned in common in proportion to their respective contributions. duress. 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 Rules: • Only properties acquired by the parties through their actual joint contribution of money. Page 32 of 230 Express Trusts 1. A competent trustor and trustee. without the consent of the other. or through the wrongful disposition of another’s property. Thus. hence.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) ground that he would be unjustly enriched if he were permitted to retain it. e) Creation -There must be a clear intent to create a trust. for a trust over personal property. c) By implication. An ascertainable trust res. be included under the Statute of Frauds. or through breach of a fiduciary duty. Article 1443 may. 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 Remember: a) Presumption: properties acquired during the cohabitation are presumed to have been acquired through their joint efforts. 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. i. Sufficiently certain beneficiaries b) The requirement that the express trust be written is only for enforceability. By conveyance to the trustee by an act inter vivos or mortis causa ii.

Classification of Trust A. both 26 years of age and single. Luis and Rizza now decide to terminate their cohabitation and they ask you to give them your legal advice on the following: a. How. stays at home. 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. is founded on the presumed intention of the parties. such as for the purpose of imputing to the beneficiaries of the trust notice given to the trustee. for the benefit of another. 147 of the Family Code provides in part that when a man and woman who are capacitated to marry each other. A house and lot worth P500.000 and the car worth P100. 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. Luis was able to save from his salary earnings during that period the amount of P200. like an executor or administrator. 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 11. c) As fiduciary – A trustee.000 presently deposited in a bank. 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 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. since 20 years ago. the house and lot valued at P500. but he acts for himself in the administration of the trust estate. 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. under the law. and shall be owned by them in equal shares. The duties of the latter are. 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. Rizza is not employed. After living together for a little over twenty years. A car worth P100. properties acquired while they lived together shall be presumed to have been obtained by their joint efforts. live exclusively with each other as husband and wife without the benefit of marriage. should the bank deposit of P200. however.000 had come from the sale of palay harvested from the hacienda owned by Luis and P300. OR ii. Of the P500. the sum of P500. 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 . Character of Office of Trustee a) As principal – The trustee is not an agent of the trust estate or of the cestui que trust. with certain powers and subject to certain duties. under a valid marriage? Answer: a.000 be allocated to them? b. however. Art. it may either be: i.000.e. live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage. and takes charge of the household chores. In the absence of proof to the contrary.000 from the rentals of a building belonging to Rizza.. holds an office of trust.000 had been part of the fruits received during the period of cohabitation from their separate property. 12. Luis is gainfully employed. fixed and/or limited by law.b) c) Trustee or the person who takes and holds the legal tile to the trust property.000 being used by the common law spouses. work or industry. P200. In fine.000 was recently purchased for the same amount by the couple. b) As agent – In some cases. his/her share shall be forfeited in the same manner as that provided in Art 147 *The same rules on forfeiture shall apply if both parties are in bad faith Bar Question (1997): Luis and Rizza. was donated just months ago to Rizza by her parents. 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. a trustee has been regarded as an agent of beneficiaries of the trust at least for certain purposes. if established by contract. What would your answer be (to the above question) had Luis and Rizza been living together all the time. whereas those of trustee of an express trust are usually governed by the intention of the trustor or of the parties.000 used by the common-law spouses to purchase the property. i. although subject to the terms of the trust and law of trusts.

Distinguished from Guardianship or Executorship In trust. a guardian. and upon dissolution of the marriage or of the partnership. b. Luis gets 2/5 while Rizza gets 3/5 of the P500.000 shall be exclusively owned by Rizza. if it is absent. 3. Distinguished from Donation a) A trust is an existing legal relationship and involves the separation of legal and equitable title. 5. except in the case of a gift in trust. 8. however. The property relations between Luis and Rizza. under which the husband and wife place in a common fund the proceeds. a stipulation pour autrui can arise only in the case of contracts. upon mere acquiescence in the formation of the trust and acceptance under the second paragraph of Article 1311 of the Civil Code.000 shall be divided equally between Luis and Rizza. whereas a contract is a legal obligation based on an undertaking supported by a consideration. the car worth P100. administrator. the house and lot valued at P500. 148. a stipulation pour autrui refers to specific property or to other things. Co-ownership as a Trust A co-ownership is a form of a trust. iii. Definition of Family Home Page 34 of 230 Page 199 of 230 . Civil Code). 2. the same having been donated to her by her parents. 142. parents and children. without legal title to the property subject to the bailment. iv. 2. among other ascendants and descendants and among brothers and sisters. Thus: 1. 4. the wages and salaries of Luis in the amount of P200. Hence. title in the trustee. whereas it is a characteristic of a bailment that the bailee has possession of. the car worth P100. vi. b) A trust refers to specific property. products and fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance. 3. Civil Code). having been acquired by lucrative title (par. whereas a gift is a transfer of property and. 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.000 and the house and lot valued at P500.efforts consisted in the care and maintenance of the family and of the household. Parties to a Trust a) Trustor or the person who creates or established the trust. involves a disposition of both legal and equitable ownership. 2. 10.000. which obligation may or may not be fiduciary in character. Distinguished from Contract a) A trust always involves an ownership.000 donated to Rizza by her parents shall be considered her own paraphernal property. with each co-owner being a trustee for each of the others. ii. Family relations include those between husband and wife. Civil status or persons Validity of marriage or legal separation Any ground for legal separation Future support Jurisdiction of courts Future legitime 9. the court can dismiss the case b) 7. 6. BUT this rule is inapplicable to the following cases i. 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. in consonance with the rules on co-ownership. 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. The beneficiary of a trust may demand performance of the obligation without having formally accepted the benefit of the trust in a public document. Thus: 1. the salary of Luis deposited in the bank in the amount of P200. the trustee or holder has the legal title to the property. Art. The Family 1. or executor does not have legal title to the property.000 having been acquired by both of them through work or industry shall be divided between them in proportion to their respective contribution. full or half blood. 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. their marriage having been celebrated 20 years ago (under the Civil Code) shall be governed by the conjugal partnership of gains. Distinguished from Stipulation Pour Autrui a) A trust may exist because of a legal provision or because of an agreement. v. embracing a set of rights and duties fiduciary in character which may be created by a declaration without consideration. 2.

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

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

If the husband dies before the expiration of period for filing the action ii. he is denied the right to plead or prove an otherwise important fact. 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. In case of children conceived through artificial insemination. or by his silence when he ought to speak out.asserted in it. he is not in estoppel b) Equitable Estoppel or Estoppel in Pais . The fact that the husband and wife were living separately in such a way that sexual intercourse was not possible. the person estopped must be capacitated. 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. Page 196 of 230 iv. 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. except in the case of children conceived through artificial insemination iii.It arises when one by his acts. the promise must have been relied upon and prejudice would result unless estoppel is applied 9. but a minor is clever enough to deceive others. 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. 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 presumed conceived during the 1st marriage 300 days after termination of 1st marriage presumed conceived during the 2nd marriage 5. If the husband dies after filing without desisting iii. Physical incapacity of the husband to have sexual intercourse with his wife b. fraud. the written authorization or ratification of either parent was obtained through mistake. induces another to believe certain facts to exist. If the child was born after the death of the husband a) Grounds to Impugn the Legitimacy of the Child: i. violence. so that he will be prejudiced if the former is permitted to deny the existence of such facts. by conduct or by acceptance of benefits ii. Elements of Estoppel in Pais a) In relation to the party sought to be estopped i. intentionally or through culpable negligence. There may be estoppel: i. If its proved that for biological or other scientific reasons. by silence iv. there is no estoppel • Ordinarily. the child could not have been that of the husband. by representation or concealment iii. Serious illness of the husband which absolutely prevented intercourse ii. for this to exist. intimidation or undue influence Page 37 of 230 . The written instrument is recorded in civil registry together with the birth certificate of the child 4. by omission v. or c. 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. and such other rightfully relies and acts on such belief. who is not a party to the instrument. representations or admissions. estoppel may result • If a person. It takes place in a situation where because if a party’s action or omission. notarizes the same. 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).

Open and continuous possession of the status of a legitimate child Any other evidence allowed by the Rules of Court 8. whether judicial or legislative. 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. b) Estoppel by acquiescence is closely related to estoppel by silence. his guardian can bring the action in his behalf 7. Kinds of Estoppel a) Technical Estoppels i. HOWEVER. 8. Estoppel by record – the preclusion to deny the truth of matters set forth in a record. 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. iii. 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. 5. If the husband (or his heirs. or vice-versa – within 3 years The period shall be counted from the knowledge of the child’s birth or its recording in the civil register. 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. 7.” Mere innocent silence will not work an estoppel. 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. 6.b) Periods for Filing of Action to Impugn the Legitimacy of a Child The action to impugn the legitimacy of the child shall be brought: i. from brothers and sisters Page 38 of 230 b) An equitable estoppel may arise. in proper cases) resides in the city or municipality where the child was born or where his birth certificate was recorded – within 1 year ii. 6. ii. 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. Admissions: A party may be estopped to insist upon a claim. fraud may properly be a cause of action on account of the vitiated consent that it produces. In the former. in estoppel. a person is prevented from maintaining a position inconsistent with one in which he has acquiesced. or from denying the truth of any material facts Page 195 of 230 . 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. fraud presupposes an attempt to enter into a valid agreement or contract. Silence or Inaction a) This is sometimes referred to as estoppel by “standing by” or “laches. There must also be some element of turpitude or negligence connected with the silence by which another is misled to his injury. his heirs can longer file the action after death c) If the child dies during minority in the state of insanity. 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. c) in the absence of these evidences. assert an objection. however. if the child’s birth was concealed from or was unknown to the husband or his heirs. ascendants and in proper cases. the action will survive and his heirs will substitute for him e) If the child is a minor or incapacitated or insane. 4. Distinguished from Ratification In ratification. the legitimate filiation may be proved by: i. 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. 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 party is bound because he intended to be bound. 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. Rights of Legitimate Children a) Bear surname of parents b) Receive support from parents. Distinguished from Fraud Estoppel exists with or without a contract. It involves the conduct of both parties.

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

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

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

b. 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. if married 6. (Republic v. if 10 years old or over b) Natural parents or legal guardian of the person to be adopted c) Legitimate children of the adopter. not the Family Code.R. 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. Judicial Rescission of Adoption Rule 100. if married g) Spouse of the adopter. it was the Child and Youth Welfare Code that was in effect. 125932. not agreed upon. Legal representative of last surviving partner 4. 2. No. At that time. Who May Not Be Adopted a) Person of legal age Exception: An adult may be adopted if he is: i. 3. on the ground that the Family Code prohibits aliens from adopting. 10 years old or over d) Adopted children of the adopter. In absence of agreement.dismiss the petition. Petitioners have already acquired a vested right on their qualification to adopt which cannot be taken away by the Family Code. If you were the judge. Right to 1. at his option Account . April 21. ROC: Rescission and Revocation of Adoption Page 42 of 230 Limited Partnership 1. 10 years old or over e) Illegitimate children of the adopter. 1999. all partners who have not wrongfully dissolved the partnership 3. General Rule: Husband and Wife must jointly adopt Exceptions: a) b) One spouse adopts his/her illegitimate child One spouse adopts legitimate child of the other 5. A child by nature of adopter or of spouse ii. 205 SCRA 356) • Rights if retiring/estate of deceased partner: 3. Miller G. 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) a. Partners designated by the agreement 2. CA.may be exercised by: Winding up partner Surviving partner Person/partnership continuing the business Persons Authorized to Wind Up 1. citing Republic v. The law that should govern the action is the law in force at the time of the filing of 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. 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 . of the business Contribute cash. property or industry Contribute cash or property only. 10 years old or over and living with him f) Spouse of the adopted. all No participation in management gen partners have an equal right in the mgt. Written Consent Necessary For Adoption a) Person to be adopted. 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. 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.

an alien.share of profits if any a) b) Who may petition? Adoptee only. Sarah and Tom must adopt jointly because they do not fall in any of the exceptions where one of them may adopt alone. One of them not being qualified to adopt. iii. 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 Bar Question (2000). iii. ii. it was considered refilled upon the effectivity of RA 8552. SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS a) Assets of the partnership: 1.return of capital contribution 4. Partner who did not cause dissolution wrongfully: a.A. Right to lien on surplus of partnership property after satisfying partnership liabilities 2. Indemnity for damages caused by partner guilty of wrongful dissolution d. Inter-Country Adoption Act of 1995 (R. Tom. Apply surplus. Otherwise. Right of indemnification by guilty partner against all partnership debts & liabilities 3. Page 190 of 230 Page 43 of 230 . Partner who wrongly caused dissolution: a. 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. the Domestic Adoption Act of 1998. Under the Act. Sarah. Can the petition be granted? Answer: It depends. filed a petition in the Regional Trial Court of Makati. Right to subrogation in place of creditors after payment of partnership liabilities 3. Continue business in same name during agreed term e. and her American husband Tom. a Filipina. Partners as investors . 4. Posses partnership property if business is continued 2. 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 . if any to pay in cash the net amount owed to partners c. the petition may be granted. Partners as creditors 3. While the petition for adoption was filed in 1990. Contributions of the partners b) Order of Application of Assets: 1. If business not continued by others . Partnership creditors 2. the Supreme Court has held in a line of cases that both of them must be qualified to adopt. Rights of partner where dissolution in contravention of agreement 1. the petition being still pending with the lower court. an alien. born a Filipino but by then a naturalized American citizen. they are qualified to adopt the nephew of Sarah under Section 7(b) thereof. for the adoption of the minor child of her sister.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 iv. c) d) 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 Effects of rescission: i. However. This is the law applicable. Apply partnership property to discharge liabilities of partnership b. is not qualified because he is neither a former Filipino citizen nor married to a Filipino. and the petition may granted. Partnership property (including goodwill) 2. 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. their petition has to be denied.apply b. Sometime in 1990. 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. Grounds: i. iv. the petition cannot be granted because th American husband is not qualified to adopt. When husband and wife must adopt jointly. If Tom and Sarah have been residing in the Philippines for at least 3 years prior to the effectivity of RA 8552. iv. 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 8. Partners as investors .iii. Rights of injured partner where partnership contract is rescinded on ground of f fraud/misrepresentation by 1 party: 1. ii. While Sarah.

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

after filing a petition with the ICAB. even beyond the age of majority f) Transportation – includes expenses going to and from school. AUTHORITY OF PARTNER TO BIND PARTNERSHIP TERMINATED • General Rule: Authority of partners to bind partnership is terminated. he is entitled to support only if his need for support is not due to a cause imputable to his fault or negligence 5. when the ff. Wind up partnership affairs 2. If cause is ACT of partner. cases: bind partnership even after 1. Partner declared insane in any judicial proceeding or shown to be of unsound mind 2. trade or vocation. The Canadian agency will forward the required supporting documents to the ICAB for matching with a Filipino child. Exceptions: 1. 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. e) After termination of specified term/particular undertaking Anytime if partnership at will when interest was assigned/charging order issued EFFECTS OF DISSOLUTION: 1.8. when the other party/obligee: Page 188 of 230 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. acting partner must have knowledge of such dissolution If cause is DEATH or INSOLVENCY. Authority of partners to bind partnership by new contract is immediately terminated when dissolution is not due to ACT. Other circumstances which render dissolution equitable Upon application by purchaser of partner's interest: 1. 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. partners are liable as if partnership not dissolved. Rules regarding Support to Illegitimate Brothers and Sisters (Whether Full or Half Blood) a) If the one asking for support is below majority age. 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 . without any condition. 2. Support 1. 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. Willful or persistent breach of partnership agreement or conduct which makes it reasonably impracticable to carry on partnership with him 5. b. b) If the one asking for support is already of majority age. Transactions in connection to winding up partnership affairs/completing transactions unfinished 2. Transactions which would bind partnership if not dissolved. 2. If due to ADI. Complete transactions not finished • Qualifications: 1. concur: i. Business can only be carried on at a loss 6. 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. With respect to partners a. Amount of support shall be in proportion to the means of the giver and to the need of the recipient 3. he is entitled to support from his illegitimate brother or sister to the full extent. or to from place of work 2. The spouses. acting partner must have knowledge/ notice With respect to persons not partners (art 1834) - a. Support consists of everything indispensable for: a) Sustenance b) Dwelling c) Clothing d) Medical attendance e) Education – includes schooling or training for some profession. ii. DEATH or INSOLVENCY (ADI) of a partner (art 1833). Partner continues to dissolution in ff. Partner guilty of conduct prejudicial to business of partnership 4.

conjugal property d) Illegitimate children of either spouse: i. if the same is not sufficient or there is none.000. Page 46 of 230 4. No. 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 . Spouse ii. 5. In this case. By termination of the definite term/ particular undertaking specified in the agreement b. Under the system of conjugal partnership – separate property of the parent-spouse. receive the net profits to which Una would have otherwise been entitled. property of the parent-spouse. Parental Authority 3. the absolute community or conjugal property shall be liable if financially capable. partnership is not terminated but continues until the winding up of partnership affairs is completed b) WINDING UP . By the expulsion of any partner from the business bonafide in accordance with power conferred by the agreement Legitimate ascendants. and even after under certain circumstances. 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. By the express will of any partner. either before or after the termination of any specified term or particular undertaking d. Options of the Person Giving Support a) To give a fixed monthly allowance. 6. 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 What are the rights of Justine. Brothers and sisters 7. where the circumstances do not permit a dissolution under any other provision of this article. Without violation of the agreement between the partners a. She may. 1813.c) Children of a spouse by another marriage – absolute community or 2. if the same is insufficient or there is no such property. Civil Code) Dissolution and Winding Up a) DISSOLUTION . 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 Answers: 1. however. who must act in good faith. 7. the conjugal property is liable if financially capable. By the express will of all the partners who have not assigned their interest/ charged them for their separate debts. 1813. if the same is insufficient or there is no such property. and legitimate and illegitimate brothers and sisters – separate property of the obligor-spouse. if any. which support shall be deducted from the share of the spouse upon liquidation of the ACP or CPG 6.000. other legitimate and illegitimate descendants. (Art.process of settling the business or partnership affairs after dissolution c) CAUSES OF DISSOLUTION: 1. Justine cannot interfere or participate in the management or administration of the partnership business or affairs.change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business. should she desire to participate in the management of the partnership and in the distribution of a net profit of P360. Descendants in nearest degree iii. P120. 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. Ascendants in nearest degree iv. Civil Code) 2. 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. 1. when no definite term or particular undertaking is specified c. In contravention of the agreement between the partners. Under the system of absolute community – separate ii. Order of Liability if 2 or More are Obliged to Support: i.00 which was realized after her purchase of Una’s interest? (3%) 2. (Art. iii.

by words or conduct. he does any of the ff. The individual. over 21 Note: This applies also to appointment of guardian over the child’s property 5. Child’s actual custodian. After two years of operation. Dielle. instruction or custody: 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. or iii. Una conveys her whole interest in the partnership to Justine. e) In case of death. In case of foundlings. Heads of children’s homes ii. without the knowledge and consent of Dielle and Karlo. Oldest brother or sister over 21 iii. Not all partners of existing partnership consents to representation No existing partnership & not all represented consented. 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. Is the partnership dissolved? (2%) 6. None of partners in existing partnership consented Partnership is liable Person who represented himself & all those who made representation liable prorata/jointly Person who represented himself liable & those who made/consented to representation separately liable 3. Similar institutions duly accredited by the proper government agency Bar Question (1998). 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. Having contributed equal amounts to the capital.Title in name of all partners. however. Order of Substitute Parental Authority i. Conveyance in name of all partners Conveyance will pass title 2. Surviving grandparent ii. Special Parental Authority a) The following exercise special parental authority over the minor child while under their supervision. 209 FC) b) It cannot be renounced. or ii. Plaintiff relied on such representation 3. summary judicial proceedings shall be instituted so that they may be entrusted to: i. Who Exercises Parental Authority in Case of Absence.A child under 7 years of age shall not be separated from the mother unless the court finds compelling reasons to order otherwise. Tender years rule. unless the court appoints a guardian over the child d) In case of separation of parents – parent designated by the court i. 4. absence or unsuitability of both parents. Directly represents himself to anyone as a partner in an existing partnership or in a non-existing partnership 2. Karlo and Una are general partners in a merchandising firm. 1. 211. FC) d) It is purely personal and cannot be exercised through agents e) It is temporary 3. the surviving grandparent shall exercise substitute parental authority. Defendant represented himself as partner/represented by others as such and not denied/refuted by defendant 2. Death or Remarriage of Either Parent. unless the parent is unfit. To answer for risks in consequence of its management 2. they also agree on equal distribution of whatever net profit is realized per fiscal period. ii. The court shall take into account all relevant considerations. Statement of defendant not refuted c) Liabilities in estoppel All partners consented to representation No existing partnership & all those represented consented.: 1. PARTNERSHIP BY ESTOPPEL a) Partner by estoppel . its administrators and teachers. abandoned children. entity or institution engaged in child care b) Liability of Those Exercising Special Parental Authority Over the Child - Page 186 of 230 Page 47 of 230 . PARTNER BY ESTOPPEL. OBLIGATIONS OF PARTNERSHIP TO PARTNERS 1. Orphanages. especially the choice of the child over 7 years old. 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. The school. To answer for obligations partner may have contracted in good faith in the interest of the partnership business 3. neglected children or abused 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. Conveyance was not in the usual way of business. HOWEVER. Renounce claim of partnership Acts in contravention of a restriction on authority Effects of Conveyance of Real Property Belonging to the Partnership 7. Submit partnership claim or liability to arbitration g. 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. 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. Grounds for Termination of Parental Authority Page 48 of 230 but Page 185 of 230 . or 2. unless: 1. Conveyance executed in partnership name of in name of partners Conveyance was not in the usual way of business. Conveyance in name if partner/partners in whose name title stands Title in name of 1/more/all partners or 3rd person in trust for partnership. Conveyance in partner's name 9. or 2. the parent is required to furnish a bond of not less than 10% of the value of the child’s property or income Title in partnership name. the parents temporarily relinquish parental authority over the child to the latter 2. Distinction between Substitute Parental Authority and Special Parental Authority Substitute Parental Authority It is exercised in case of death. Enter into compromise concerning a partnership claim or liability f. or if unsuitability of parents. Buyer had knowledge of lack of authority Conveyance passes title but partnership can recover if: 1. 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. this liability is subject to the defense that the person exercising parental authority exercised proper diligence. Buyer had knowledge of lack of authority Conveyance will only pass equitable interest 10. 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. 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. Assign partnership property in trust for creditors b. Dispose of good-will of business c. Title in name of 1/ more partners. the father’s decision shall prevail. counsel or example d) Compels child to beg e) Subjects or allows acts of lasciviousness Partnership not liable to 3rd persons having actual or presumptive knowledge of the restrictions Conveyance passes title partnership can recover if: 1. absence. instruction or custody.000. Do an act w/c would make it impossible to carry on ordinary business of partnership d. Acts of strict dominion or ownership: a. Hence. Conveyance was not in the usual way of business. Conveyance in partnership name 8. PROVIDED they are living in their company b) This is subject to the appropriate defenses provided by law Title in partnership name.• • • They are principally and solidarily liable for damages caused by the acts or missions of the child while under their supervision. or 2. it is not exercised by the parents of parental authority over the minor children.

OBLIGATION OF PARTNERS WITH REGARD TO 3RD PERSONS 1. NCC) 2. Negotiorum gestio. 1157. and which has for its purpose the payment of indemnity to prevent unjust enrichment Kinds: a. 3. NCC) a) Law . Every partnership shall operate under a firm name. iii. he shall be permanently deprived of parental authority. Three types of obligations. This takes place when a person voluntarily takes charge of another’s abandoned business or property without the owner’s authority b. Knowledge of any other partner who reasonably could and should have communicated it to the acting partner Partners and the partnership are solidary liable to 3rd persons for the partner's tort or breach of trust Liability of incoming partner is limited to: a. 1156. 4. 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. Knowledge of the partner acting in the particular matter then present to his mind c.-1) obligation to give 2) obligation to do. voluntary and unilateral act. and e) Quasi-delicts 3. 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 1.juridical relation resulting from lawful. Pro rata b.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 a. 5. “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 Notice to partner of any matter relating to partnership affairs operates as notice to partnership except in case of fraud: OBLIGATIONS Knowledge of partner acting in the particular matter acquired while a partner b.Share of profits and surplus C. 11.undue payment . 7. POWER OF PARTNER AS AGENT OF PARTNERSHIP Acts for carrying on in the usual way the business of the partnership 1. An obligation is a juridical necessity to give. Solutio indebiti. 8. 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. 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. a) b) c) d) Act w/c is not apparently for the carrying of business in the usual way 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 Page 184 of 230 OBLIGATIONS AND CONTRACTS 1. and 3) obligation not to do. and it was unduly delivered thru mistake d) Acts or omissions punished by law. cannot be presumed b) Contracts . Cases where Parental Authority May be Revived (i. 2. 6.e. Page 49 of 230 . His share in the partnership property for existing obligations b. This takes place when something is received when there is no right to demand it. Sources of Obligations (Art. after all partnership assets have been exhausted a.unauthorized management.must be expressly or impliedly set forth.ii. to do or not to do (Art.

Damages. time is of the essence c. c. Three Accessory Obligations in Obligation to Give: a. 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. e. specific performance b. Exceptions: i. When the law so specifies . ii. 2. except a.delay in the acceptance (on the part of the creditor). Delay is the non-fulfillment of the obligation w/ respect to time. 1174) Balane: General Rule: The happening of a fortuitous event exonerates the debtor from liability. rescission c. damages. iii. the cause of the breach of the obligation must be independent of the will of the debtor. Art. b. if the debtor is already in delay (Art. 1165. Art.the following a) Comprises of: 1. 1166. par. 5. 4. Bear all losses Note: It is believed that industrial partners are also entitled to the remedy granted since they are equally prejudiced B. Compensation Morae -. 1. His right to participate in the management must concur: i. Exclude him from the firm. His interest in the partnership 3. c."-. 5. and 2.-. a. His rights in specific partnership property 2.. Grounds for Liability a. Remedies Available to the Creditor in case of breach a. Loss due to Fortuitous Events (Art.To deliver the fruits to the creditor (fruits produced after obligation to deliver arises. 3.-. demand is useless d. 6. PROPERTY RIGHTS OF A PARTNER Requisites for exemption from liability due to an "act of God. Equal right to possession Page 50 of 230 Page 183 of 230 .) c.delay in the performance (on the part of the debtor). Violation of the tenor of the obligation 8. exclusively or in addition to either of both remedies b. unless there is a stipulation to the contrary Capitalist partner in violation shall: 1. an insurance contract. 3. Fraud b.g. Avail themselves of the benefits which he may have obtained 3.mutual delay 9. in either case CAPITALIST PARTNER Capitalist partner cannot engage in business (with same kind of business with the partnership) for his own account.To take care of the thing w/ the diligence of a good father of a family until actual delivery. Art. express declaration in the obligation or law b. b. Delay d. Kinds of Delay: a.e. General Rule: there must be demand before delay may be incurred.To deliver accessions and accessories. d. b) Nature of partner's right in specific partnership property i.) When the parties so agree When the nature of the obligation requires the assumption of risk. Mora Solvendi -. 1164. Bring to common fund any profits accruing to him from said transaction.4. or 2.g.-. 1163.. Negligence c. Mora Accipiendi -. acknowledgment of default 7.

A term or period is an interval of time. ." With a term/period – a term is a future and certain event upon w/c the demandability (or extinguishment) of an obligation depends.into the day) or one the arrival of w/c will extinguish the obligation.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: .a positive suspensive condition to do an impossible/ illegal thing-.from the day) or one the arrival of w/c will make the obligation demandable o Resolutory term (in die -. E. • Potestative-depends upon will of debtor • Casual. o Suspensive term (ex die -. 2.a negative condition (not to do an impossible thing)-Disregard the condition. b. w/c. 2. "I will sell you a piece of land provided you do not plant marijuana on it. or aggravation of the injury to the creditor. exerting an influence on an obligation as a consequence of a juridical act. . the debtor must be fee from any participation in.a condition not to do an illegal thing (negative)-. Futurity and uncertainty must concur as characteristics of the event. Conditional • A condition is a future and uncertain event upon w/c an obligation or provision is made to depend. the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. iii. and iv. In case of tie.The obligation is void. i) Rights and Obligations with Respect to Management Power of managing Vote of partners partner is irrevocable representing without just/lawful controlling interest cause. the event must be either unforseeable or unavoidable. If sharing of profits is stipulated . The obligation is valid. o Rule: debtor shall lose the right to make use period. when: – after the obligation is incurred. either suspends its demandability or produces its extinguishment. 2. Share of capitalist partner is in proportion to his capital contribution Share of industrial partner is not fixed . 3.h) Rules for Distribution of Profits and Losses DISTRIBUTION OF PROFITS DISTRIBUTION OF LOSSES With According to agreement According to agreement agreement Without agreement 1. unless he gives new guaranty – he does not furnish creditor the promised guaranties and securities Page 51 of 230 . Pure – A pure obligation is one w/c is not subject to a condition or a term.as may be just and equitable under the circumstances 1. court's intervention may be sought c. he becomes insolvent. decision of majority shall prevail. 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 Partner is appointed manager in the articles of partnership 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 Manner of management not agreed upon Each may execute all acts of administration Concurrence of all necessary for the validity of acts 1.g.This is not expressly provided for in the provision but is implied. 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. Kinds of Obligations According to Demandability: a. • 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.losses shall be borne according to capital contribution Purely industrial partner not liable for losses ii. 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 In case of opposition.apply to sharing of losses If no profit sharing stipulated .

-. 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 Page 181 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 . Single Alternative – where out of 2 or more prestations which may be given. ii. To pay for the agreed or legal interest. Multiple Joint where there are multiple parties on each side of a joint obligation. When expressly granted to 3rd persons Facultative – where only one prestation is agreed upon. except: i. c. 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. and iii.by his own acts. To contribute on the date fixed the amount he has undertaken to contribute to the partnership 2. in consideration of which the creditor agrees to the period – debtor attempts to abscond General rule: If a period is attached in an obligation. only one is due General rule: right to choose pertains to debtor.The creditor can demand performance anytime. If he received it for the account of partnership. The consequence is that the creditor cannot compel the performance before the arrival of the term. 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. but the debtor can insist on performance anytime. he impaired guaranties and securities after their establishment. and when through a fortuitous event they disappear. Passive joint where the obligation is joint on the debtor's side. but the debtor cannot insist on payment bef. – o If the term is for the benefit of the creditor.-. • There are as many obligations as there are debtors multiplied by the number of creditors. the period. the arrival of the term. To reimburse any amount he may have taken from the partnership coffers and converted to his own use 3. If the term is for the benefit of the debtor. ii. • Kinds of joint obligations: i. the whole sum shall be applied to partnership credit f) Obligation of partner who receives share of partnership credit 1. Active joint where the obligation is joint on the creditor's side. 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. but the obligor may deliver or render another in substitution According to Plurality of Subjects: a. 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. Partners (capitalist) must contribute additional capita. When the choice is expressly granted to the creditor or. Apply sum collected to 2 credits in proportion to their amounts 2.The creditor cannot demand performance anytime. unless he immediately gives new ones equally satisfactory – debtor violates any undertaking. b. the presumption is that it is for the benefit of both parties. 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. the debtor cannot compel acceptance bef.l In case of imminent loss to the business of the partnership and there is no stipulation otherwise. • Effects of Joint Liability: Page 52 of 230 2. According to Plurality of Objects: a. Partners must contribute equal shares to the capital of the partnership unless there is stipulation to contrary 2.

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

DE FACTO .one which in reality is not a partnership but is considered a partnership only in relation to those who.- - • One creditor does not represent the others in such acts as novation (even if the credit becomes more advantageous). and the latter need not thereafter pay the obligation to the former Characteristics of Passive Solidarity: . even if such loss is caused by the fault of only one of them. but only for B’s share of P10.one who contributes money or property to the common fund b) INDUSTRIAL .Interruption of prescription as to one debtor affects all the others. the other debtors are still liable for the balance of the obligation All the debtors are liable for the loss of the thing due. and E made themselves solidarily indebted to X for the amount of P50. A. State the effect of each of the above defenses put up by A on his obligation to pay X. SECRET PARTNERSHIP . (b) C has already been condoned by X. compensation and remission Each creditor may renounce his right even against the will of the debtor.one which actually exists among the partners and also as to 3rd persons b. Kinds of Partners a) CAPITALIST . A solidary debtor may avail himself of any defense which Page 54 of 230 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. C.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 . (d) E was given by X an extension of 6 months without the consent of the other four co-debtors. Answer: (a) A may avail the minority of B as a defense. 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). PROFESSIONAL OR NON TRADING PARTNERSHIP . b.one who takes charge of the winding up of partnership affairs upon dissolution Page 179 of 230 .one whose liability to 3rd persons extends to his separate property d) LIMITED .one which has failed to comply with all the legal requirements for its establishment E.one whose existence is avowed or made known to the public by the members of the firm G.one formed for the exercise of a profession 7. OSTENSIBLE OR PARTNERSHIP BY ESTOPPEL .000. (c) D is insolvent. DE JURE PARTNERSHIP . he can recover from the co-debtors their respective shares (this is something similar to subrogation) . but the renunciation by one debtor of prescription already had does not prejudice the others. OPEN OF NOTORIOUS PARTNERSHIP . but when this remission affects only the share of one debtor. As to legality of existence a. ORDINARY OR REAL PARTNERSHIP . D. by their conduct or omission. PARTNERSHIP AT WILL .one whose liability to 3rd persons is limited to his capital contribution e) MANAGING . the effect is the same as that of payment The total remission of the debt in favor of a debtor releases all the debtors. When demanded payment from A.one which has complied with all the legal requirements for its establishment b.Each debtor may be required to pay the entire obligation but after payment. COMMERCIAL OR TRADING PARTNERSHIP . 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. in this case. the latter refused to pay on the following grounds: (a) B is only 16 years old.one formed for the transaction of business b.the term for which the partnership is to exist is fixed or agreed upon or one formed for a particular undertaking D. B.000. As to representation to others a.one who contributes only his industry or personal service c) GENERAL .one who manages the affairs or business of the partnership f) LIQUIDATING . As to publicity a. are precluded to deny or disprove its existence F. if such defenses are found to be true.

According to Performance: a. CLASSIFICATIONS OF PARTNERSHIP A. Inventory of the property contributed must be made. 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. he may avail himself thereof only as regards that part of the debt for which the latter are responsible. UNIVERSAL PARTNERSHIP i. A cannot avail of the defense of D’s insolvency. Specific undertaking iv. a. Exceptions to the Rule on Indivisibility: i.has for its objects: i. 1248. As to liability of partners a.000 or more.g. (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. The purpose is to strengthen the coercive force of the obligation.A penal clause is an accessory undertaking to assume greater liability in case of breach.one susceptible of partial performance Indivisible. A solidary debtor may. iii..one formed by 2 or more persons having as members one or more general partners and one or more limited partners. exists only in reciprocal obligations C. damages do not have to be proved.) When the nature of the obligation necessarily entails performance in parts (e.5. PARTICULAR PARTNERSHIP . FORM OF PARTNERSHIP CONTRACT a) GENERAL RULE: No special form is required for the validity of the contract b) EXCEPTIONS: i. 1. in actions filed by the creditor. 11. LIMITED PARTNERSHIP . Public instrument is necessary b. (b) A may avail of the condonation by X of C’s share of P10. There is no novation of the obligation but only an act of liberality granted to E alone. Hence. Divisible . pledge. in money or property ii. Applying the principle of mutual guaranty among solidary debtors. Public instrument is necessary b.comprises all that the partners may acquire by their industry or work during the existence of the partnership Note: Persons who are prohibited from giving donations or advantage to each other cannot enter into a universal partnership b. When the parties so provide. UNIVERSAL PARTNERSHIP OF PROFITS . but only as to the share of that co-debtor. Simple With a penal clause. the latter not being personally liable for the obligations of the partnership personally belongs to a solidary co-debtor. Determinate things ii.consists of general partners who are liable pro rata and subsidiarily and sometimes solidarily with their separate property for partnership debts b. NCC). breach by one party is a tacit resolutory condition • Right to rescind i. signed by the parties and attached to the public instrument otherwise it is VOID Where capital is P3. (Art.000. (Article 1222. ii. Where immovable property/real rights are contributed a. easements) Where the law provides otherwise (e. Must be registered with SEC 6. A guaranteed the payment of D’s share and of all the other co-debtors. As to extent of its subject matter a. par. b. With respect to those which personally belong to others. Their use or fruits iii. b. Exercise of profession or vocation B.one that must be performed in one act. When a penal clause is present. 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. As to duration Page 178 of 230 Page 55 of 230 . (c) A may not interpose the defense of insolvency of D as a defense. 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.g. mortgage) According to Sanctions for Breach: a. GENERAL PARTNERSHIP .

i.g. v. f. Anyone interested in the fulfillment of the obligation (e. viii. d. The debtor himself ii. no need for express stipulation may be waived if availed of. can be demanded only if plaintiff is ready. His agent iv. 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 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 instance Stockholder has a right to transfer shares without prior consent of other stockholders Management is vested with the Board of Directors Death of stockholder does not dissolve corporation Can only be dissolved with the consent of the state Minimum of 5 incorporators 4. willing. As to the prestation 1.) Page 56 of 230 Effect of death Dissolution No. guarantor) Effect of payment by a third person: • If the payment was w/ the debtor's consent. waiver of creditor c. iii. ergo. His heirs or assigns iii. except in cases of: a.ii. The payor may be – a. Requisites of Payment or Performance: A. and able to comply. b. EFFECTS OF UNLAWFUL PARTNERSHIP i. iv. h. g. the effect is subrogation (Articles 1236-1237. If without need of the creditor's consent i. j. c. The instruments or tools and proceeds of the crime shall also be forfeited in favor of the government iv. Identity of the object. while the other is not not absolute needs judicial approval in certain cases implied to exist. Integrity – delivery of the entire prestation due. The contributions of the partners shall not be confiscated unless they fall under no. Indivisibility B. 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 1. 1238.) Exception: If the person paying intended it to be a donation. (Art. The contract is void ab initio and the partnership never existed in the eyes of the law ii. vi. except in dacion en pago and novation 2. 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. e. application of payments to equally onerous debts 3. The profits shall be confiscated in favor of the government iii. substantial performance in good faith b. 3 Page 177 of 230 . vii. 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. 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.

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.
b. With the creditor's consent -- Anyone.

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.

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.)

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
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
Created by a
Created by law
Created by law
contract, my mere
agreement of the
Has a juridical
Has a juridical
separate and
separate and
distinct from that of
distinct from that
each partner
of each partner
Realization of
Depends on AOI
enjoyment of a
thing or right
No limitation
10 years maximum
50 years
Term of
extendible to not
more than 50
years in any one
Page 176 of 230

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:

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
Page 57 of 230



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

Causes for Consignation

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.

1) thing lost is determinate
2) loss without any fault from debtor
3) loss occurred before delay of debtor

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);
PRINCIPAL may also revoke the agency at will
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

Rule of Rebus sic stantibus.--

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.
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.

1) Existing debt
2) Renunciation must be gratuitous
3) Acceptance by the debtor
4) Capacity of the parties
Page 58 of 230

g) Implied Revocation of Agency
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
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
Page 175 of 230

Extinguishment of Agency
a) Modes

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
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

Page 174 of 230

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.

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.

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
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.

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.
Page 59 of 230

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 . b) Effects of Ratification with respect to agent . third party for the unauthorized transaction.’s unliquidated claim for damages.bound by ratification to the same iii. may recover compensation with respect to principal .government neither estopped by the mistake/error of its agents. But before ratification. Conventional . and to his principal for acting without authority. Ratification a) Conditions for Ratification i. He must ratify the acts in its entirety iv. cannot raise the question of the agent’s authority to do the ratified act 1. unauthorized act. no need for consent. subject to full reimbursement & subrogation if made w/ consent of old debtor. if insolvent new debtor – old debtor not responsible because obligation extinguished by valid novation. 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 . by his negligence. Answer: Stockton is correct. new debtor & creditor must consent. the third party is free to revoke the unauthorized contract. Active subjective or a change of creditor.agreement & consent of all parties. ii. or by subrogating a third person in the rights of the creditor. if w/o consent or against will . not presumed except as provided for in law: presumed when - 11. Legal . Estoppel of the Government . either by changing the object or principal conditions.Is Stockton correct? Give reasons for your answer.relieves the agent from liability to the i. person interested in fulfillment of obligation pays debt even w/o knowledge of debtor Passive subjective or a change of debtor a. also known as subrogation. full reimbursement. where the principal. 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.takes place by operation of law. extent as if the ratified act had been authorized. The case for the P10 million damages being still pending in court.initiative of old debtor. the two debts must be liquidated and demandable. The principal must have capacity and power to ratify ii. Expromision . all parties must consent. 3rd person not interested in obligation pays w/ approval of debtor 3. Delegacion . He must have had knowledge of material facts iii.assumes responsibility for the ii. the corporation has as yet no claim which is due and demandable against Stockton. The act must be capable of ratification v. clearly established b. The act must be done in behalf of the principal * To be effective. In order that compensation may be proper.initiative is from 3rd person or new debtor. old debtor released from obligation. may be estopped through affirmative acts of its officers acting within the scope of their authority Page 60 of 230 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 d) Distinction Between Apparent Authority & Authority by Estoppel Apparent Authority Authority by Estoppel though not actually granted. The act or conduct of the principal rather than his communication is the key. only beneficial reimbursement b. • 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 • Subjective (Personal) or novation by a change of subject i. or by substituting the person of the debtor. unless: insolvency iv. ratification need not be communicated or made known to the agent or the third party. There is no right of compensation between his price of P10 million and Core Corp. principal knowingly permits/holds permits his agent to exercise powers not out the agent as possessing the granted to him. a. creditor pays another preferred creditor even w/o debtor’s knowledge 2. 7.

iii.000. Page 61 of 230 . 1279. compensation took place between the mutual obligations of X and Y Bank. 365. and the alleged agent seemed to have apparent or ostensible.. capacity to dispose of the thing paid and capacity to receive payment are required for debtor and creditor. are present. Civil Code. 1. will be estopped to deny the agency as against such other b. the Supreme Court held: “The Civil Code contains provisions regarding compensation (set off) and deposit. 401). 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. the performance must be complete. 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. These portions of Philippine law provide that compensation shall take place when two persons are reciprocally creditor and debtor of each other. and distinguish it from payment. Compensation is a mode of extinguishing to the concurrent amount. As to sub-agent – to estop the principal from denying his liability to a third person. All the requisites of Art. citing 2 Castan 560 and Francia v. Payment means not only the delivery of money but also performance of an obligation (Article 1232. 1991 ed. Define compensation as a mode of extinguishing an obligation. 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.00. less service charges. When X tries to withdraw his deposit. citing 8 Manresa.demandable. arises from a contract of deposit. or that the latter would be allowed only a certain sum 10. IAC. agent or 3rd persons in interest Page 172 of 230 already existing & of public knowledge or known to him at time of delegacion Bar Question (1998). incurs a loan obligation with the said Bank in the sum of P800.000. Y Bank allows only P200. Y Bank is correct. As to agent – one knowing another is acting as his agent and fails to repudiate his acts. Estoppel of Agent.000.000. UNLESS he proves. In this connection. supra). 2. as here. Estoppel by the Principal a. 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. X. 162 SCRA 753). 519). When the agent incurred them with knowledge that an unfavorable result would ensure. Agency by Estoppel: there is no agency at all. (Tolentino. Civil Code. 1287. having dealt with one as an agent may be estopped to deny the agency as against the principal. because the compensation operates by law and not by the acts of the parties. When the expenses were due to the fault of the agent iii. claiming that compensation has extinguished its obligation under the savings account to the concurrent amount of X’s debt. 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. is estopped to deny the agency Estoppel of Third Persons – a third person. Assuming that the promissory note signed by X to evidence the loan does not provide for compensation between said loan and his savings deposit. unless principal derives benefits from the contract ii. Principal’s Liability for Expenses: a) General Rule: principal liable for the expenses incurred by the agent b) Exceptions: i. X contends that compensation is improper when one of the debts. who is correct? Answers: 1. p. 1992 ed. 2. (De Leon. does not apply. while in compensation there may be partial extinguishment of an obligation. in compensation.00 to be withdrawn. 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. 221. respectively. although not real authority to represent another a) Who can be under estoppel to deny agency? i. or accept the benefits of them. PNB (62 Phil. if the principal was not aware thereof iv. it has been held that the relation existing between a depositor and a bank is that of creditor and debtor. Civil Code)..00 which has become due. When it was stipulated that the expenses would be borne by the agent. In payment. p.” Hence. In payment. If the agent acted in contravention of the principal's instructions. In the case of Gullas v. As to third persons – one who knows that another is acting as his agent or permitted another to appear as his agent. xxx As a general rule. that he exercised due diligence for that purpose 8. the obligations of those persons who in their own right are reciprocally debtors and creditors of each other (Tolentino. such capacity is not necessary. who has a savings deposit with Y Bank in the sum of P1.

g.CONTRACTS Instructions 1. make a distinction by counter marks and designate the merchandise respectively belonging to each principal iii. immoral. if a del credere agent receiving guarantee commission. commodatum. without consent of the principal. Obligatory Force – parties are bound from perfection of contract d. pledge. but the commission agent entitled to any interest/benefit which may result from such sale iv. heirs. buyers or maintains no relation with the thing sellers. Kinds of Contracts As to perfection or formation: a) consensual – perfected by agreement of parties b) real – perfected by delivery (e.g. Stipulation pour autrui 3. and property which is the object which he purchases or sells of the transaction c) Obligations of a Commission Agent i. an to be placed in his possession and intermediary between the sellers and disposal the buyer Has a relation with principal. Principal Characteristics: a. Autonomy of wills – parties may stipulate anything as long as not illegal. their assigns. strangers cannot demand enforcement. merely a go-between. and usually selling in his own name 2. etc. may b) not exist on its own Page 62 of 230 a) Distinction Between Ordinary Agent & Commission Agent Ordinary agent acts for and in behalf of his principal Need not have possession of principal’s goods b) Commission agent act on his own name or in that his principal must be in possession of the goods 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. should he do. Relativity – binding only between the parties. Mutuality – performance or validity binds both parties. responsible for the goods received by him. if goods are of the same kind and mark but belonging to different owners. Accion directa. cannot. 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. not left to will of one of parties c. bears the risk of collection and pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser v. 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 . Contracts – Meeting of minds bet 2 parties whereby one binds himself with respect to the other to give something or render some service 7. 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. as described in the consignment. Exception to relativity: Accion pauliana. 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. 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. deposit) c) formal/solemn – perfected by conformity to essential formalities (e. sell on credit. b. UNLESS upon receiving them he should make a written statement of the damage and deterioration suffered by the same ii. principal may demand payment in cash.

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



Extent to Which
Agent May Bind
the Principal

Termination of

Construction of

all acts connected with
the business or
employment in which
he is engaged
involves continuity of

specific acts in pursuance of
particular instructions or with
restrictions necessarily implied
from the act to be done
no 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

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

merely advisory in

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

Page 170 of 230


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

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

As to name or designation:
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

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
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
Vices of Consent: violence, intimidation, undue influence
Vices of Declaration-simulated contracts
– The prestation


Within the commerce of man - either existing or in
Licit or not contrary to law, good customs
Page 63 of 230



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


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
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.


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

when real agreement is void
in cases of estoppel
when a party has already brought suit to enforce it

Page 64 of 230

Obligations of the Principal to the Agent


Comply with all the obligations agent contracted in representation of the
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
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
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.

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
Page 169 of 230

Obligations of the Agent to the Principal
i. act with utmost good faith & loyalty for the furtherance of
principal’s interests
ii. obey principal’s instructions
iii. exercise reasonable care
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
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

Page 168 of 230

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.



Rescissible under the Civil Code:
i. Contracts entered into by persons exercising fiduciary
(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
(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

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


those where one of the parties is incapable of giving consent
to a contract (legal incapacity)
minors ( below 18 )
insane unless acted in lucid interval
deaf mute who can’t read or write
persons specially disqualified: civil interdiction
in state of drunkenness
in state of hypnotic spell
Page 65 of 230

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

There is no action for annulment necessary as such is ipso jure. remedy of the third person . no object. within the scope of authority but in the agent’s name 4. Those whose object is outside the commerce of man – no object d. 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 both. does not apply when a superior public policy intervenes Page 67 of 230 . remedy of the principal . public order or public policy . as long as within the scope of authority. It cannot be confirmed. with improper motives 6. Imprescriptible g. those who come in equity must come with clean hands. Ex: Contract to sell marijuana IN PARI DELICTO DOCTRINE – both parties are guilty. It produces no effect whatsoever either against or in favor of anyone b. good customs. he can sue the principal. Those w/c contemplate an impossible service – no object e. 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. with misrepresentations by the agent 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 . no action against each other. If performed. applies only to illegal contracts & not to inexistent contracts. But when the contract involves things belonging to the principal. f. principal estopped motive is immaterial. Those which cause or object did not exist at the time of the transaction – no cause/object c. chattels or things in action at price not less than 500. Those w/c are absolutely simulated or fictitious – no cause b. restoration is in order. agent acted within scope of his authority. (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 d. whether it amounts to a crime or not 3) Illegal/Illicit ones – Those whose cause.If the case falls under the general rule. principal has no cause of action against the 3rd parties and vice versa insofar as 3rd persons are concerned (not required to inquire further than the terms of the written power. no cause (inexistent ones) OR essential formalities are not complied with (ex. e. The right to set up the defense of nullity cannot be waived f.scope of authority 3. valid a. Agreement for sale of goods. authorized principal still liable b. except if pari delicto will apply e. he can sue the agent. INCLUDING: a. But if it cannot be determined without litigation who is liable. 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. ratified or cured d. object or purpose is contrary to law. A judicial declaration to that effect is merely a declaration c. morals. beyond the scope of the agent’s authority GR: principal not liable Page 166 of 230 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.Contracts w/c violate any legal provision. donation propter nuptias – should conform to formalities of a donation to be valid).

return object of contract & fruits 2. without or beyond Page 68 of 230 contract is Page 165 of 230 EXCEPTION/S agent liable if he (1)expressly makes himself liable. agent principal. To bind the principal in a contract of partnership xi. to waive objections to the venue of an action or to abandon a prescription already acquired iv. To make such payments as are not usually considered as acts of administration ii. 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 d) PROPERTY • Requisites: a) Utility b) Individuality/Substantivity c) Susceptibility of appropriation Classification of Property I. UNLESS clearly indicated Power to compromise does not include submission to arbitration. to renounce the right to appeal from a judgment. By analogy/by law – contracts for public works. plants & growing fruits adhered to soil b) everything attached to an immovable that it will break if separated c) statues. To loan or borrow money. To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration vi. 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. 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 accept or repudiate an inheritance xiv. to execute a second mortgage iii. By incorporation – essentially movables but attached to an immovable that it becomes an integral part of it a) trees.iii. To lease any real property to another person for more than one year ix. Effects of Acts of Agent ACTS OF THE AGENT EFFECT 1. By nature – cannot be moved from place to place because of their nature a) land. To bind the principal to render some service without compensation x. Any other act of strict dominion Not Included in the Power to Mortgage: i. To effect novations which put an end to obligations already in existence at the time the agency was constituted iii. To compromise. To ratify or recognize obligations contracted before the agency xv. to submit questions to arbitration. unless the latter act be urgent and indispensable for the preservation of the things which are under administration viii. buildings & all kinds of constructions adhered to soil b) mine. 18. (2)exceeds the limits of his authority without giving the parties sufficient notice of his powers binding on the principal . Classification by Mobility a) Immovable property i. To make gifts. within the not personally liable scope of authority b) Movable property 2. in behalf of the binds principal. quarries ii. to mortgage for the agent’s or any 3rd persons’ benefit. To create or convey real rights over immovable property xiii. servitude & other real rights over immovable property e) f) the agency should authorize a general and unlimited management Special Powers of Attorney needed: i. 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. To waive any obligation gratuitously v. to sell ii. 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.

without prejudice to the provisions of the law. and recovery. provinces. Power of Attorney a) Definition: instrument in writing by which one person. non-consumable III. 15. iii. Definitions of Ownership a) Independent and general right of a person to control a thing particularly in his possession. b) Power of a person over a thing for purposes recognized by law & within the limits established by law Page 69 of 230 .14. cities & municipalities Characteristics: 16. iv. II. When the principal transmits his power of attorney to the agent. who receives it without any objection b. 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. commercial & industrial entities although they may have real estate ii. disposition. Way of Giving Notice of Agency & Its Effect a) By special information .when it can be inferred from the acts of the agent which carry out the agency. otherwise sale is void c) Agency Couched in General Terms: covers only MERE ACTS OF ADMINISTRATION even if i. consumable – cannot be utilized w/o being consumed 2. property of public dominion when no longer intended for public use/service – declared patrimonial b) property belonging to private persons – individually or collectively Ownership Ownership in General 1. Form of Agency: appointment of an agent may be oral or written. agent’s sale of real property or any interest therein) i. vi. cities. 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. held to grant only those specified power. 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. 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. How Construed: strictly construed and strictly pursued. Form of Acceptance by Agent A.when it is oral or written B.the agent is considered such with regard to any person 17. municipalities 1. exist for attaining economic ends of state 2. the agent may execute such acts as he may consider appropriate Page 164 of 230 2.the person appointed as agent is considered such with respect to the person to whom it was given b) By public advertisement . enjoyment. Express . Classification by Consumability 1. no formal requirements Exception: when the law requires a specific form (e. primary purpose is to evidence agent’s authority to third parties within whom the agent deals b) Power of Attorney. and he did not reply to the letter or telegram v. as principal. Between persons who are absent – acceptance not deemed implied from the silence of the agent EXCEPT: a. subject to no restrictions except those imposed by the state or private persons.g. Implied . the principal should state that he withholds no power ii. Public dominion – a) intended for public use b) intended for public service of state. or from his silence of inaction according to the circumstances 1. provinces. 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. • 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. Classification by Ownership 1.

or from the acts of the agent which carry out the agency.2. 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. Distinction Between Agent & Contractor Actions for possession: 1. 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 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. Right to enclose or fence w/o detriment to servitude constituted 5. There is actual or threatened unlawful physical invasion of his property iii. Classification of Agency As to manner of creation Express – agent has been actually authorized by the principal. immovable – a) forcible entry – used by person deprived of possession through violence. 1 year from unlawful deprivation) c) accion publiciana – plenary action to recover possession d) accion reinvindicatoria – recovery of dominion of property as owner 3. 13. as a general rule. movable – replevin (return of a movable) 2. Use force as may be reasonably necessary to repel or prevent it b) Available only when possession has not yet been lost. Principle of self help – self defense a) Elements: i. Right to surface & everything under it only as far as necessary for his practical interest (benefit or enjoyment) 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 Independent Contractor employed by the employer acts according to his own method employer not liable for torts committed by the independent contractor. cannot return the object sold Buyer can deal with the thing as he pleases. either orally or in writing Implied – agency is implied from the acts of the principal. intimidation (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 6. if already lost – must resort to judicial process c) May be exercised by 3rd person – negotiorum gestio 4. being the owner 12. 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 owner Buyer pays the price Buyer. 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.

police power. could give him Leopoldo’s exact address. Lease of property Lessee is not controlled by the lessor. Agent is subject to the directions of the principal. Agent can make the principal personally liable. 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. Guardianship A guardian represents an incapacitated person. taxation) b) specific limitations imposed by law (servitude. Marcelino contests the action. Upon inquiry. he enters the land and conducts a search. Lease of property involves property. By chance the law does not mean sheer luck such that the finder should have no intention at all to look for the treasure. Ultimately. identify property Page 71 of 230 . mortgages. is a permanent resident of Canada. Marcelino. Failing to reach an agreement. however. hence. Distinction Between Agency & Guardianship Agency Agent represents a capacitated person Agent is appointed by the principal and can be removed by the latter. law creates a disputable presumption of ownership to those in actual possession i. principle of unjust enrichment) h) true owner must resort to judicial process – when thing is in possession of another. based on trust & confidence 8. has found a map which appears to indicate the location of hidden treasure. Limitation on Ownership a) general limitations for the benefit of the state (eminent domain. learning of Marcelino’s “find”. Nature of Relationship Between Principal & Agent: Fiduciary. 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 is entitled to half of the treasure. anyway. Leopoldo.. easements) c) specific limitations imposed by party transmitting ownership (will. Marcelino is not a trespasser since there is no prohibition for him to enter the premises. Distinction Between Agency & Lease of Service Basis Agency representation Lease of Service employment Powers & agent exercises discretionary lessor ordinarily performs functions powers only ministerial functions Persons involved 3 persons: principal. He succeeds. 10. He has an idea of the land where the treasure might be found. hence. he learns that the owner of the land. 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.c) 7. Leopoldo sues Marcelino for the recovery of the property. implying that one who intentionally looks for the treasure is embraced by the provision. he is entitled to ½ of the hidden treasure. also if in another’s property. The reason is that it is extremely difficult to find hidden treasure without looking for it deliberately. Agent can bind the principal. By chance means good luck. Nobody. Leopoldo. While he may have had the intention to look for the hidden treasure. 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. Guardian is appointed by the court and stands in loco parentis. Distinction Between Agency & Lease of Property Agency Agent is controlled by the principal. 11. still he is a finder by chance since it is enough that he tried to look for it. contract) d) limitations imposed by owner himself (voluntary servitude. a treasure hunter as a hobby. Lessee cannot bind the lessor. Agency may involve things other than property. 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 by chance – if property owner is state – ½ belongs to finder. 7. seeks to recover the treasure from Marcelino but the latter is not willing to part with it. the finder must not be trespasser Bar Question (1997).

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

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

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

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

as owner of the lot. if builder has no property. are governed by Art. b) The absence of the affidavit vitiates a mortgage only as against third persons without notice like creditors and subsequent encumbrances. for 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 F. 2. builder may demand from landowner the value of labor & materials Bar Question (1999). Page 76 of 230 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. as security for the purchase of personal property payable in installments. Civil Code). 7. Right of builder in bad faith when owner is in good faith 1. 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 D. On order to secure a bank loan. 3. 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. Deposits of money in banks and similar institutions are governed by the provisions on simple loans (Art1980. a) Because of confusion as to the boundaries of the adjoining lots that they bought from the same subdivision company. XYZ Corporation surrendered its deposit certificate. (BPI vs. 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. The relationship between the depositor and a bank is one of creditor and debtor. 6. no deficiency judgment can be asked and any agreement to the contrary shall be void (Article 1484). 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. 2. The bank disagrees. 4. with a maturity date of 1 September 1997 to the bank. the court shall fix the terms of the lease. Right 1. If it is. owner is not subsidiarily liable 3. or (b) compel X to buy the land if the price of the land is not considerably more than the value of the house. then X cannot be obliged to buy the land but he shall pay reasonable rent. whether by the debtorvendee or a third person. XYZ defaulted on the due repayment of the loan. and X. Page 157 of 230 . CA. What is your opinion? Answer: We submit that there is no pactum commissorium here. 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. owner is subsidiarily liable 2. Bad faith on both builder & owner – in pari delicto (no cause of action against each other) G. 232 SCRA 302). as builder of a house thereon. Basically this is a matter of compensation as all the elements of compensation are present in this case. What are the respective rights of X and Y with respect to X’s house? Answer: The rights of Y. Right to be reimbursed for necessary expenses preservation of land E.C. c) If the chattel mortgage is constituted. prompting the bank to encash the deposit certificate. 5. and in case of disagreement. 3. XYZ questioned the above action taken by the bank as being a case of pactum commissorium. When 3rd person is paid by builder. Bar Question (1997). When builder is in bad faith & owner in good faith & owner compel builder to remove improvements. Right to be indemnified for value of materials irrespective of good faith or bad faith of builder or owner. 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. Right of 3rd person who owns materials 1. Right 1. The registration gives the mortgagee the symbolical possession.

under the second option. Weaver Textile Mills. Act No. that to w/c the other intended to be united as ornament or for its use of perfection ii. 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. Y continues as owner of the lot and becomes. Effect of Registration Test to determine w/c one is the principal: i. b) a formal contract because for its validity. 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. 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. Creation of Chattel Mortgage a) The registration of the personal property in the Chattel Mortgage Register as security for the performance of an obligation. MOVABLES – A.. X as the party in good faith may (a) remove the house and demand indemnification for damages suffered by him. value and price B. transformation a) Rights: Page 156 of 230 Page 77 of 230 . (Filipinas Marble Corporation vs. 1508). if value of accessory is greater than principal. 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. Intermediate Appellate Court. may agree on an extrajudicial foreclosure in the same manner as they are allowed in contracts of mortgage and pledge Chattel Mortgage 1. 4. iv. the mortgage of which have been recorded with the Philippine Coast Guard in order to be effective as to third persons e) Motor vehicles. What are the respective rights of the parties over X’s house in this case? Answer: Since the lot owner Y is deemed to be in bad faith (Art. thinking perhaps that he could get X’s house later. ii. 454). b) Under the Chattel Mortgage Law. if the property as situated in a different province from that in which the mortgagor resides. 142 SCRA 180 [1986] 4. 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. it is nevertheless binding between the parties. 122 SCRA 296 [1983]. value iii. otherwise. d) Vessels. 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.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. after he pays the sums demanded. iii. in relation to Art. c) It has been ruled however that if the chattel mortgage is not recorded. 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. v. 1508) 3. Act No. 453). 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. Inc. volume b) Rights i. Conjunction / adjunction – 2 movable things which belong to different owners are united to form a single object a) 2. paragraphs 2 and 3. A chattel mortgage is: a) an accessory contract because it is for the purpose of securing the performance of a principal obligation. registration in the Chattel Mortgage Register is indispensable. The parties. owner of the house as well. however.

Hence. ii. 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 4. 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. remove cloud 2. and thereafter to the principal (Article 2132) in accordance with the provisions of Article 2133 or 2138 6. Antichresis a) Rights: i. Posting of notice of sale in at least 3 public places therein c. owner of material cannot appropriate C. Action to quiet title a) put end to vexatious litigation in respect to property involved. b. if owing and thereafter to the principal of his credit. ii. release of an instrument. If person who made the transformation is in good faith . b) apply the fruits. Right of Mortgagee to Recover Deficiency If there be a balance due to the mortgagee after applying the proceeds of the sale. delivery. 5. iv. No. Characteristics a) accessory contract b) formal contract because the amount of the principal and of the interest must both be in writing. the mortgagee is entitled to recover the deficiency. 9. with the obligation to apply them to the payment of the interest. otherwise the contract of antichresis is void.• i. contract has prescribed 3.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. a. 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). Remedy of Creditor in Case of Default Page 155 of 230 . Commixtion / confusion – 2 things of the same or different kinds are mixed & are not separable w/o injury Extrajudicial Foreclosure governed by Act. 3135 as amended. Publication in a newspaper of general circulation d. Action to remove cloud a) intended to procure cancellation. Public auction must be conducted in the province where the property is situated. 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. if and when the mortgagee is given a specific power or express authority to do so. encumbrance. 3. The action to recover a deficiency after foreclosures prescribes after ten (10) years from the time the right of action accrues. Quieting of Title 1. Antichresis is a contract whereby the creditor acquires the right to receive the fruits of an immovable of his debtor. Obligations of Antichretic Creditor a) pay the taxes and charges upon the estate. contract has been extinguished or terminated 2. 2. the debtor cannot demand its return until the debt is totally paid. iii. if owing. after receiving them to the interest. plaintiff asserts his own estate & generally declares that defendant’s claim is w/o foundation b) When proper: 1. iii. The property delivered stands as a security for the payment of the obligation of the debtor in antichresis. 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. Personal notice to mortgagor is not required e.

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

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. if he misuses the thing in any other way (Article 2104). When the thing pledged is later found in the hands of the pledgor or the owner. notice of necessity of such repairs must be given to co-owners. evidence must be clear and convincing g) Co-owners cannot ask for physical division if it would render thing unserviceable. stipulation to contrary is void b) Right to use thing co-owned i. if practicable h) Right to full ownership of his part and fruits i) Right to alienate. he has repudiated through unequivocal acts ii. not the principal obligation itself (Article 1274). But the right of retention is limited only to the fulfillment of the principal obligation for which the pledge was created. if the thing is in danger of being lost or impaired because of the negligence or willful act of the pledge. income. He is entitled to reimbursement of the expenses incurred for its preservation and he is liable for loss or deterioration by reason of fraud. A contrary stipulation is void (Article 2115). The sale of the thing pledged extinguishes the principal obligation whether the price of the sale is more or less than the amount due. for purpose for which it is intended ii. 2. or interest. negligence. But the pledgee can apply the fruits. without prejudice to interest of ownership iii. g) h) i) j) if the creditor uses the thing without authority. delay or violation of the terms of the contract. Pledgee has the obligation to take care of the thing pledged with the diligence of a good father of the family. Pledgee is not authorized to transfer possession of the thing pledged to a third person. • In the same way. if owing and thereafter to the principal of his credit. 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. Hence. but can terminate co-ownership Page 80 of 230 b) c) d) e) f) The possession of the pledgee constitutes his security. 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). (Articles 1174. 1170). 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. 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. the debtor cannot demand for its return until the debt secured by it is paid. requisites for acquisition through prescription i. court intervention if prejudicial – appointment of administrator f) No prescription to run in favor co-owner as long as he recognizes the co-ownership. receive reimbursement therefrom. 3. (Article 2100) The pledgee has no right to use the thing pledged or to appropriate the fruits thereof without the authority of the owner. 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. Exception: stipulation authorizing pledgee to transfer possession. controlling interest. dividends. Exception: contrary stipulation The pledgor may ask that the thing pledged be deposited judicially or extrajudicially -1. therefore. assign or mortgage own part. Page 153 of 230 . If the price of the sale is more than the amount due the • creditor. only the accessory obligation of pledge is presumed remitted. that the pledge has been extinguished. Duties/Liabilities a) Share in charges proportional to respective interest. neither is the creditor entitled to recover the deficiency. 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). 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. the debtor is not entitled to the excess unless the contrary is provided. if the price of the sale is less.a) Right to benefits proportional to respective interest. such act of repudiation is made known to other co-owners iii.

both have titles – judicial resolution Page 81 of 230 . sale 4. The thing pledged must be delivered to the creditor or to a third person by common agreement. Elements of possession: a) occupancy – actual or constructive (corpus) b) intent to possess (animus) 3. present possessor preferred 2. b. Rights of 3rd parties a) creditors of assignees may take part in division and object if being effected without their concurrence. 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. the thing delivered shall be returned with all its fruits and accessions. The pledge is constituted to secure the fulfillment of a principal obligation. The pledgor or mortgagor is the absolute owner of the thing pledged or mortgaged iii. The persons constituting the pledge or mortgage have the free disposal of their property. Essential Requirements i. tradicion longa manu – pointing out to transferee the things which are being transferred c. proper acts and legal formalities established for acquiring rights – donation.cannot be recognized at the same time in 2 different personalities except co-possession 5. Question arises regarding fact of possession. ii. an innocent purchaser for value (like a mortgagee) relying on a torrens title issued is protected.possession as a right 1. physical 2. that they be legally authorized for the purpose. How acquired: a. sell the same provided the pledgee consents to the sale. i) 2. material occupation – possession as a fact 1. c) While it is true that under Article 2085 it is essential that the mortgagor be the absolute owner of the property mortgaged. Common Provisions Governing Pledge or Mortgage a) Contract may be constituted only by the absolute owner of the thing pledged or mortgaged otherwise. tradicion constitutum possesorium (owner alienates thing but continues to possess – depositary. the pledge or mortgage is void. Stated differently. iv. dates of possession the same – one who presents a title 4. 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. 2 possessors – one longer in possession 3.tradicion brevi manu (one who possess a thing short of title of owner – lease ). tenant) subject to action of our will. therefore. 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 3. constructive . preference: 1. Page 152 of 230 1. Provisions Applicable only to Pledge a) The pledgor retains his ownership of the thing pledged. Characteristics a) real b) accessory contract c) unilateral contract d) subsidiary contract After partition. 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. a mortgagee has the right to rely upon what appears in the certificate of title and does not have to inquire further. pledgee. 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. and in the absence thereof. Possession – holding of a thing or enjoyment of a right 2. Rule. He may. tradicion simbolica – delivering object or symbol of placing thing under control of transferee (keys) 2. 4.Pledge h) 1.

when the principal obligation has no fixed period for its maturity. After the lapse of ten years. Minors/ Incapacitated Page 82 of 230 Page 151 of 230 . Requisites: a) b) principal obligation is extinguished b) c) d) Rules: 2. bring actions necessary to protect possession c. demand fruits and damages from one unlawfully detaining property in concept of holder – usufruct. may be converted into ownership through acquisitive prescription b. subject to authority and ratification if not authorized. An extension of the term granted by the creditor to the debtor without guarantor’s consent extinguishes the guaranty (Article 2029). 2. What can be subject of possession – things or rights which are susceptible of being appropriated f) g) 7. possibility to acquire possession in name of another – agent. holding w/o title and in violation of right of owner 2. it may be interrupted – by extraneous evidence or suit for recovery of property of true owner in bad faith – aware of defect k) 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). When the debt has become demandable by reason of the expiration of the period for payment. e) f) 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). Extinguishment of Guaranty a) Being accessory and subsidiary. and this period has expired. unless it be of such nature that it cannot be extinguished except within a period longer than ten years. lessee. The same rules applies even though the guarantors be solidarily (Article 2080). 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). one who has paid the entire debt may seek reimbursement from each of his co-guarantors the share which is proportionately owing him. the guarantors are thereby released. 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. c) Effects of Guaranty as Between Co-guarantors i. In case of insolvency of the principal debtor. possession with just title from true owner h) i) 8. always presumed. bailee in oneself – personal acquisition a. intent to possess c. 4. 6.6. possession with juridical title but not that of owner 3. in concept of owner – owner himself or adverse possessor j) Effects: a. If there are reasonable grounds to fear that the principal debtor intends to abscond. he must have capacity to acquire possession b. If the principal debtor is in imminent danger of becoming insolvent (Article 2071). Possession through succession 1. 3. When the debtor has bound himself to relieve him from the guaranty within a specified period. but effects of possession in good faith shall not benefit him except from date of death of decedent. If there can be no subrogation because of the fault of the creditor. representative has intention to acquire for another and not for himself b. 10. Classes of possession: 1. ask for inscription of possession d. 5. negotiorum gestio a. guaranty is terminated when the 9. payment must have been made by virtue of a judicial demand or because the principal debtor is insolvent 8. Degrees of possession: 1. possession with just title but not from true owner 4. as when the creditor releases or fails to register a mortgage. mistake upon doubtful question of law.

if they are due (Article 2066) Exceptions: a) ii. which. 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. if disturbed – protected by means established by law. even though it did not earn interest for the creditor. iii. iii. requires the debtor’s consent. d) Damages. may only acquire them through guardian or legal representatives 11. clandestine and unknown acts iii. Guarantor’s liability is only joint therefore. Guarantor is likewise entitled to the benefit of division where there are several guarantors of only one debtor and for the same debt. owner has option to require possessor to finish cultivation and gathering of fruits and give net proceeds as indemnity for his part of expenses. they are not liable beyond the shares which they are respectively bound to pay (Article 2065).unless owner exercises option of paying. spoliation b) Possession acquired and enjoyed in concept of owner can serve as title for acquisitive prescription i. b) Between the Debtor and the Guarantor i. acts merely tolerated ii. acts of violence 12. 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. possessor in bad faith not entitled.ii. 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 ). c) The expenses incurred by the guarantor after having notified the debtor that payment had been demanded of him. A compromise which is entered into between the guarantor and the creditor benefits but does not prejudice the principal debtor (Article 2063). Rights of possessor: a) Right to be respected in his possession. Page 83 of 230 . 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. A compromise between the creditor and the principal debtor benefits the guarantor but does not prejudice him. 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. Guarantor has the right to proceed against the debtor even before payment in the following instances: e) When he is sued for the payment. possession not interrupted i. peaceful and uninterrupted ii. Where the guaranty is constituted without the knowledge or against the will of the principal debtor. 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). b) the legal interest thereon from the time the payment was made known to the debtor. The indemnity comprises: a) the total amount of the debt. however. 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. Exceptions: a) solidarity b) if any of the circumstances in Article 2057 should take place. 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. Page 150 of 230 – may acquire material possession but not right to possession. Possession has to be in concept of owner. 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 ). public. The guarantor who pays for a debtor must be indemnified by the latter. 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.

1306). Negotiable document of title 16. 6. 5. Possession is equivalent to title Page 84 of 230 4. 669) Page 149 of 230 . Provision of law enabling the apparent owner to dispose as if he is owner iv. Possession Not Lost: a) Even for time being he may not know their whereabouts. real right of possession not lost except after 10 years 15. natural. Guarantor may secure the performance of voidable. unenforceable. and c) He has sufficient property to answer for the obligation which he guarantees 7. 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. fairs or markets vi. Loss of possession: a) abandonment of the thing – renunciation of right. conditional. Acquired at public sale in good faith – with reimbursement iii. 7. 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). Where the creditor has required and stipulated that a specified person should be a guarantor. 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. Guarantor’s liability cannot exceed the principal obligation (Article 2054). possession unjustly lost is deemed to have enjoyed it w/o interruption 13. The rule of strictissimi juris commonly refers to an accommodation surety and is not applied in case of compensated sureties. is therefore. Purchases made at merchant stores. according to law. Unlawfully deprived or lost ii. Guaranty cannot be presumed. 68 Phil. b) He has capacity to bind himself. domesticated – possessed if they retain habit of returning back home n) One who recovers.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. 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 has the right to the benefit of excussion or exhaustion of the debtor’s property before he can be compelled to pay. Guaranty is an accessory contract therefore there must be a valid principal obligation for guaranty to be valid. Effects of Guaranty a) Between the Guarantor and the Creditor i. the creditor. and future obligations (Article 2052). Price. bound thereby (see Articles 1159. Sale under order of the court v. Exceptions: a) b) c) d) e) f) g) h) i) 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. The qualifications of a guarantor are: a) He possesses integrity.

Characteristics a. Guarantor is an insurer of the debtor’s solvency. Page 148 of 230 a) b) c) possession is in good faith owner has voluntarily parted with the possession of the thing possessor is in concept of an owner Usufruct 1. but is coterminus with term of usufruct. theft or robbery by a stranger (not by hotelkeeper’s servant or employee) with the use of arms or irresistible force (Article 2001). Stipulations on exemption or diminution of liability is void (Article 2003).. his family. wills mixed – prescription total partial simultaneous successive pure conditional With a term 3. accessory subsidiary and conditional unilateral requires that the guarantor must be a person distinct from the debtor 3. fruits proportionate at duration of usufruct.parents over children voluntary – contracts. b) The loss is due to the acts of the guests. Surety assumes liability as a regular party to the undertaking and undertakes to pay if the principal does not pay. 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. may still exercise act of ownership –bring action to preserve f) Right to fruits growing at time usufruct begins. servants or visitors (Article 2002). fire (Article 2000). etc. 1174). unless he is guilty of fault or negligence in failing to provide against the loss or injury from said cause (see Article 1170. Distinction between Guaranty and Suretyship Guaranty Suretyship Guarantor is secondarily liable. appraised when delivered. natural & industrial fruits of property b) Right to hidden treasure as stranger c) Right to transfer usufructuary rights – gratuitous or onerous. 2. Hotelkeeper is not liable in the following cases: a) The loss or injury is caused by force majeure like flood. Surety is primarily liable and is therefore not entitled to the exhaustion of the properties of the principal debtor Guarantor binds himself to pay only when the principal cannot pay. but can’t do acts of ownership such as alienation or conveyance except when property is: i. Hotelkeeper has a right to retain the things of guests as security for unpaid lodging expenses and supplies.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. 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. Rights of usufructuary: a) Right to civil. b. 3. 2. c) The loss arises from the character of the things brought into the hotel (Article 2002). the hotelkeeper is apparently negligent. intended for sale iii. 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. Surety is an insurer of the debt. 4. Kinds: a) b) c) d) e) f) g) h) i) j) legal . c. 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 . Guaranty 1. Consumable ii. d.

immovables be placed under administration Page 86 of 230 NOTE: Otherwise. owner may demand that: a. 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. if deposit is gratuitous. iii. are governed by the provisions on mutuum and the relation between a depositor and a bank is that of a creditor and a debtor. Obligations of Depositor a) He is obliged to pay expenses for the preservation of the thing deposited. 14. b. The judicial deposit of a thing. Deposit by travelers in hotels and inns NOTES: 1. usufructuary has no liability when due to wear & tear. except when there is fraud or negligence. Necessary deposit made on the occasion of a calamity. not required by law or no one will be injured • for failure to give security. Obligations of usufructuary: a) Pay expenses to 3rd persons for cultivation & production at beginning of usufruct. 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. whose who have right to fruits should reimburse expenses incurred b) Generally.j) Right of usufructuary of woodland – ordinary cutting as owner does habitually or custom of place. 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. Relation between Bank and Depositor Deposits of money in banks. ii. obliged to return in that state. Necessary Deposit a. Necessary deposit in compliance with a legal obligation i. 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). 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). and v. whether fixed. Posting of security • not applicable to parents who are usufructuary of children except when 2nd marriage contracted • excused – allowed by owner. the possession of which is being disputed in a litigation by two or more persons (Article 538). 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). then he shall be liable c) Before entering into usufructuary: 1. thing deteriorates. 15. savings and current. 16. In this last case. (Article 1998). 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 4. Those constituted to guarantee contracts with the government. and Page 147 of 230 . 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. 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. Those required in suits as provided in the Rules of Court. the deposit arises from an obligation of public or administrative character. c. b) He is obliged to pay for losses incurred due to the character of the thing deposited. 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. 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. Notice of inventory of property (appraisal of movables & description) 2.

Depositary has the obligation to return not only the thing but also all its products. b) If the depositor was incapacitated at the time of making the deposit. if perish in part due to accident – continue on remaining portion. a) thing is judicially attached Exceptions: possession b) depositary was notified of the to the return or the removal of 1986) 13. 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). cannot escape by renouncing usufruct i) Pay legal interest from extraordinary expenses made by owner j) Payment of expenses. if attached. 11. 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. 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. and keep the secret of the deposit when the seal or lock is broken. NI can be converted into registered certificates or deposited in bank c. Place of Return of Thing Deposited a) at the place agreed upon by the parties. to his heirs and successors. 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. Obligations of owner a) extraordinary expenses. (keys having been delivered to 9. and b) in the absence of stipulation. Right of Depositary to Return Thing Deposited • if deposit is gratuitous. if all of them perish w/o fault but due to contagious disease / uncommon event – deliver remains saved. 8. 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. owner may make them at expense of usufructuary – during existence of usufruct h) Obliged to make expenses due to his fault. Extinguishment of usufruct Page 146 of 230 Page 87 of 230 . the thing must be returned to his legal representative (Article 1988). Owner may retain property as administrator w/ obligation to deliver fruits to usufructuary until he gives sufficient security f. Depositary is authorized to open the thing deposited which is closed and sealed when there is: (a) (b) presumed authority depositary). 10.(b) (c) pay for damages should the seal or lock be broken through his fault which is presumed unless proven otherwise. Capital & proceeds of sale of movables be invested in safe securities d. whether stipulated. cost & liabilities in suits brought with regard to usufructuary – borne by usufructuary 6. Interest on proceeds or property under admin belong to usufructuary e. 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. with or without his fault. Persons to whom Return of Thing Deposited Must be Made a) to the depositor. and • justifiable reasons exist for its return or not a period has been while in the depositary’s opposition of a third person the thing deposited (Article b. c) Even if the depositor had capacity at the time of making the deposit but he subsequently loses his capacity during the deposit. or in case of necessity. NOTE: Depositor shoulders the expenses for transportation 12. 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. 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. accessions and accessories which are a consequence of ownership. usufructuary has no obligation to pay mortgage.

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). for more than 50 years • Usufruct constituted on immovable whereby a building is erected . Exceptions: a) express permission of the depositor b) preservation of the thing deposited required its use (article 1977) Occupation 6. iii. (c) if he delays its return.& 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. corp. he deposits the thing with a third person who is manifestly careless or unfit although authorized.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. Obliged to first notify the depositor and wait for the latter’s decision if he will change the way or manner of the deposit. Exception: If delay will cause danger vi. otherwise he shall be liable for damages. Loss in part – remaining part shall continue to be held in usufruct 9. 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. (d) if he allows others to use it. 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. vii. viii. (b) is he uses the thing without the depositor’s permission. even though he himself may have been authorized to use the same (article 1979) 1.1 he transfers the deposit with a third person without authority although there is no negligence on his part and the third person 4. or assoc. Depositary has the obligation to: (a) return the thing deposited when delivered closed and sealed. Liable if the loss occurs through his fault or negligence Not allowed to deposit the thing with a third person Exception: contrary stipulation iv. or 4. Page 88 of 230 Page 145 of 230 2. Other rules: • Usufruct cannot be constituted in favor of a town. donation) TITLE – Remote cause of ownership. If thing deposited should earn interest. merely constituted the means . Requisites a) There should be a corporeal thing (tangible) which must have a “corpus” (body) & that thing should have no owner 7. even if they are of the same kind and quality (Article 1976). Depositary has the obligation not to commingle things deposited if so stipulated. Different Modes of acquiring ownership: a) Occupation b) Donation c) Prescription d) Succession e) Tradition ii. Depositary is liable for the loss of the thing deposited if: 4.2.3. in the same condition. The depositary is bound to collect not only the interest but also the capital itself when due. Depositary is liable for loss through a fortuitous event even without his fault. Terms: MODE – Proximate cause of ownership ( sales. 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: ü thing to be delivered to owner with right of retention for taxes & extraordinary expenses w/c should be reimbursed ü security of mortgage shall be cancelled Different Modes of Acquiring Ownership 1. (a) if it is so stipulated.

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

Kinds: a) Acquisitive b) Extinctive 2. thing found shall be awarded to finder if owner appears. it must be expressly stipulated in writing (Article 1956).- of owner does not appear 6 months after publication. 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 5. NOTE: Bailor has the right to demand return of the thing if bailee commits any act of ingratitude. Exception: c) To refund 50% of the extraordinary expenses arising from actual use of the thing loaned (i. b. Simple Loan Or Mutuum 1. 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. if duration of the contract has not been stipulated 2. Rules on Interest: In order that interest may be charged. What cannot be acquired by occupation -Ownership of a piece of land. 3. Things subject to prescription: all things within the commerce of men a) private property b) patrimonial property of the state 5. a. Bailee cannot retain the thing loaned as security for claims he has against the bailor. Things not subject to prescription: Page 90 of 230 b) If he devotes thing to any purpose different from that for which it has been loaned. 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. Urgent need during which time the Exceptions: commodatum is suspended. Exceptions: 1. also a means by which one loses ownership. 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. 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. 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). if use or purpose of the thing has not been stipulated 3. Page 143 of 230 . even though by reason of extraordinary expenses. Urgent need hence no notice is necessary. 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. 2. 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. because when a land is without an owner. it pertains to the state. land that does not belong to anyone is presumed to be public land.e. retroactive from the moment period began to run 1. rights & actions. 2. Precarium -1. 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. caused by fortuitous event) Contrary stipulation Exception: d) To pay damages to bailee for known hidden flaws in the thing loaned.

Obligations of the Bailee a) Bailee is liable for ordinary expenses for the use and preservation of the thing loaned. peaceful. 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. NOTE: 1.Commodatum 1. 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. it is sufficient that he has possessory interest over subject matter (Article 1938). 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. a) If he is guilty of fault or negligence Exceptions: Page 142 of 230 1. General Rule: Bailee is not liable for ordinary wear and tear due to use of the thing loaned.8 years for immovables d) in concept of an owner e) public.30 years for immovables 2.10 years for movables . 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 General Rule: Bailee can neither lend nor lease the object of the contract to a third person. Just Title (True and Valid) – must be proved & never presumed a) Titulo Colorado b) Titulo Putativo Page 91 of 230 . f) Commodatum is purely personal in character hence death of either bailor or bailee extinguishes the contract (Article 1939) a) b) c) d) public domain in transmissible rights movables possessed through a crime registered land 6. uninterrupted 3. Requisites for extra-ordinary prescription: a) just title is proved b) within time fixed by law .Reasonable belief that person who transferred thing is the owner & could validly transmit ownership . e) Bailor need not to be the owner. 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. Exception: Member of bailee’s household Exception to the exception: contrary stipulation or nature of thing forbids such use 2. peaceful. 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. Requisites a) b) c) c) d) in concept of an owner public. uninterrupted 4. Kinds of Acquisitive prescription a) ordinary b) extra-ordinary for ordinary prescription: possession in good faith just title within time fixed by law .4 years for movables . Good Faith .Must exist throughout the entire period required for prescription 5. Characteristics: a) Gratuitous.

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

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 Include or omit names of creditors & correct amount due in the statement Sale for no consideration 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 ANTI-DUMMY LAW 1. the land had been possessed by Robyn’s distant cousin. Mikaelo’s claim of laches. No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. 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 5. 1529. 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). it was not his fault that the Registry of Deeds could not issue the corresponding transfer certificate of title. operation as officers. there being no showing in the facts how he entered into the ownership and possession of the land. adversely and continuously in the concept of owner since 1960. It was only in April 1998 that Renren sued Mikaelo to recover possession. As often held by the Supreme Court. (Section 47. Mikaelo. Management. By lapse of time fixed by law v 30 years action over immovables from time possession is lost v 10 years mortgage action upon written contract Page 93 of 230 .D. Parties to a Bailment a) Bailor (Comodatario) – the giver. Meanwhile. P. However. In 1965. Not covered: a) with waiver of seller’s creditor b) receiver. Mikaelo invoked a) acquisitive prescription and b) laches. Penalizes Filipinos who permit aliens to use them as nominees or dummies to enjoy privileges reserved only for Filipinos 2. 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. 33 years of neglect or inaction is too long and may be considered unreasonable. employees or laborers 3. No. appears to be more sustainable. Mikaelo’s defense of prescription can not be sustained. It was not even an action to recover ownership but only possession of the land. 1529) The right to recover possession of registered land likewise does not prescribe because possession is just a necessary incident of ownership. he submitted the Deed of Sale to the Registry of Deeds for registration together with the owner’s duplicate copy of the title. however. By ordinary standards. 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. A Torrens title is imprescriptible. From the facts. b) Mikaelo’s defense of laches. Decide the case by evaluating these defenses. openly. services or money in the present with a promise to pay or deliver in the future. 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. Renren is considered the registered owner of the land.D. however. For all legal intents and purposes. 2. Control or non-control position CREDIT TRANSACTIONS General Provisions entry was made in the day book and corresponding fees were paid as evidenced by official receipt. and paid the corresponding registration fees. after buying the land from Robyn. Credit transactions include all transactions involving the purchase of loan of goods. Answers: a) Renren’s action to recover possession of the land will prosper. After all. assignee in insolvency proceeding 4. is weak insofar as the element of equity is concerned. No. Page 140 of 230 1. asking that he be declared owner of the land. Prescription of Actions 1. Renren bought the land and had the sale registered way back in 1965.3. Under Section 56 of P.

is entitled to be reimbursed the shares of her two sisters in the redemption price. however. PNB. However. she took possession of the hacienda and refused to share its fruits with her sisters. Sale of credits & other incorporeal things 2. the right of redemption belongs also to the 3 daughters. Sylvia won the grand prize at the lotto and used part of it to redeem the hacienda from the bank. Ambrosio died. she also exercised the right of redemption of her co-owners on their behalf. having bought it from the bank with her own money. When Sylvia redeemed the entire property before the lapse of the redemption period. 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. The problem did not give facts from which laches may be inferred. leaving his three daughters. in trust for them. Mere delay in filing an action. Thereafter. CA. the defense will not prosper. Sylvia. the action was brought within the ten-year prescriptive period provided by law wherein actions based on written contracts can be instituted. 309 SCRA 509). Belen. Assignment 1. does not constitute laches (Agra v. 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 . Due to the failure of the daughters to pay the bank. Is she correct or not? Answer: Sylvia is not correct. 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 defense of laches was raised as the claim was filed more than seven years from the maturity of the obligation. The 3 daughters are the co-owners of the hacienda being the only heirs of Ambrosio.v v v v v 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 2. Donation 1. Answer: No. In an action brought to collect a sum of money based on a surety agreement. Rationale: Protect creditor of merchant stores 2. As such she is holding the shares of her two sisters in the property. 157 SCRA 455). 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. Bulk Sales Law 1. Six months later. the latter foreclosed the mortgage and the hacienda was sold to it as the highest bidder. Will the defense prosper? Reason. Redemption by one co-owner inures to the benefit of all (Adille v. and all the fruits corresponding thereto. Characteristics: a) Unilateral – obligation imposed on the donor b) Consensual – perfected at time donor knows of acceptance Bar Question (2000). Rosario and Sylvia a hacienda which was mortgaged to the Philippine National Bank. contending that it was owned exclusively by her. standing alone. When the property was foreclosed.

Anastacia purchased a house and lot on installments at a housing project in Quezon City.if 2 or more adjacent lot owners desire to exercise right to redeem. she executed a deed of donation. still entitled to fruits Formalities required .when piece of land is small & cannot be used for any practical purpose & bought merely for speculation. Sale of credit in litigation • When a credit or other incorporeal right in litigation is sold. and donation must be in the form of a will Revocable ad mutuum (exclusive will of donor) **In case of doubt with regards to nature of donation: inter vivos 5. 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.where piece of rural land has an area not exceeding 1 hectare. must not impair legitime b) causa – anything to support a consideration: generosity. adjoining owner has right to redeem unless grantee does not own a rural land . Subsequently.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. 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 . present property & not future. Requirements of a donation: a) subject matter – anything of value.must be written and accepted also in writing Ø immovable . duly authenticated by the Philippine Consulate in Los Angeles.2 or more owners of adjoining lot desire to exercise right to redeem. debtor shall have a right to extinguish it by reimbursing the assignee for the price the latter paid therefor plus judicial costs. 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: ü Redemption of homesteads ü Redemption in tax sales ü Redemption by judgment debtor ü Redemption in extrajudicial foreclosure ü Redemption in judicial foreclosure of mortgage Page 138 of 230 3.000 . goodwill. owner of adjoining land can redeem . donating the house and lot to her friend Amanda. if oral it must be with simultaneous delivery of thing/document & acceptance need not be in writing above 5. owner of adjoining lot with smaller area shall be preferred . charity.000 & below – may be oral or written. past service. she was employed in California and a year later. one who first requested shall be granted Urban land . 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 . owner whose intended use is best justified shall be preferred. they may only do so in proportion to the share they respectively have in thing owned in common Among adjoining owners of: Rural land .must be in a public instrument & acceptance must also be in a public instrument (in same instrument or in other instrument) Bar Question (2000). debt c) capacity to donate & dispose & accept donation d) form – depends on value of donation 4.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. Acceptance a) acceptance must be made personally or thru agent b) donation may be made orally or in writing Ø movable: 5. California.follow law on donations and certain kinds of donations & law on obligations and contracts (suppletory) Irrevocable at the instance of the donor.

Seller a retro must first pay the following: a. Legal Redemption The right to be subrogated upon the same terms and conditions stipulated in the contract. For a donation to be onerous. For such donation to be valid. Ernesto donated in a public instrument a parcel of land to Demetrio. Answer: Yes. 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. 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. necessary and useful expenses made on the thing sold 2. 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. Valid tender of payment is sufficient 3. 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). the suit will prosper as the donation did not comply with the formalities of a will. 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. . the donation is void. Ernesto’s heirs seasonably brought an action to recover the property. 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. it must comply with the formalities of Article 749. In this instance. Article 749 of the New Civil Code requires both the donation and the acceptance to be in a public instrument. the price of the thing sold b. Page 96 of 230 Page 137 of 230 . Fruits . Moreover. 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. The property donated was an immovable.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. the burden must be imposed by the donor on the donee. 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. who accepted it in the same document. In this instance. 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. 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. leaver her mother Rosa as her sole heir. expenses of the contract and other legitimate payments made by reason of the sale c. The donation not being onerous. Two months later.What controls is the stipulation between parties as regards the fruits. the formalities of a will should be complied with. It is there declared that the donation shall take effect immediately. 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. vendors a retro may only exercise his right over his respective share. would result in a donation mortis causa and in this kind of disposition. 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. In the problem. there is no such burden imposed by the donor on the donee. After his death. Will the suit prosper? • How is Redemption Effected: 1. 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. otherwise. Mere sending of notice without valid tender is insufficient 4. Amanda replied that the donation was an onerous one because she had to pay unpaid installments and taxes. 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. hence her acceptance may be implied. Failure to pay useful & unnecessary expenses entitles vendee to retain land unless actual reimbursement is made Rules In Case of Multi-Parties: 1. There being no showing that Amanda’s acceptance was made in a public instrument. Anastacia died. Amanda took it upon herself to pay those amounts voluntarily. 4. the donation is void. • • 6.

• • • • 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. valid only for the first 10 years. iii. 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. 4. buyer retains for himself a part of the purchase price v. natural & juridical persons w/c are not especially disqualified by law 2. another instrument extending the period of redemption or granting new period is executed iv. Effect when no redemption made: no automatic transfer of ownership. Conventional Redemption • seller reserved the right to repurchase thing sold • coupled with obligation to return price of the sale. 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. When there is agreement – should not exceed 10 years. only applies to contract of sale *Legal redemption – only applies to contract of sale 2. minors & other incapacitated a) by themselves Page 97 of 230 . Kinds of donation INTER VIVOS 1) pure/simple 2) remuneratory 3) conditional 4) onerous Pure/Simple a) Consideration Merits of donee 3. if it exceeded. 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 b) law to apply/ forms Law on donations 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 Remuneratory Conditional Onerous Liberality or merits of donee or burden/ charge of past services provided they do not constitute demandable debt Valuable consideration is imposed but value is less than value of thing donated Valuable consideration given Law on donations Extent of burden Law on obligations imposed>oblicon excess>donation Required Required Required Applicable Applicable Not Applicable In bad faith only In bad faith only Applies Applicable Applicable Applicable • Who may give donations .All persons who may contract and dispose of their property • Who may accept donations: 1. No period agreed upon – 4 years from date of contract 2. ii.*Conventional redemption – only extinguishes obligations pertaining to contract of sale. 3. not extinguish contract itself. must be in the same contract 7. 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. Equitable Mortgage • A contract with right to repurchase is equitable mortgage if the following requisites concur: i. seller binds himself to pay taxes on thing sold vi.

buyer can still return them in that condition if such is due to breach or warranty 5. loss of the subject matter c. 8. natural guardian – not more than 50. Extinguishment 1. 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. compensation f. he knew of the breach of warranty when he accepted goods without protest 2.more than 50. relatives of priest within 4th degree. Effects of Waiver • Parties may increase or diminish implied warranty against eviction. between paramours/persons guilty of adultery 4. legitimated or illegitimate children 2. descendant.applies only to donation inter vivos . fulfillment of a resolutory condition j. ascendant • Other persons disqualified to receive donations: 1. priest who heard confession of donor during his last illness 2. may be reduced on petition of persons affected Ø except: conditional donation & donation mortis causa Ø Future property may not be donated. legal representatives if needs written acceptance 1. condonation or remission d. community where priest belongs 3. Double Donations: Rule: Priority in time. one who first took possession in good faith . 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. priority in right Ø If movable – one who first take possession in good faith Ø If immovable – one who recorded in registry of property in good faith . If donor should have legitimate. prescription Page 135 of 230 . annulment h. wife. who took care of donor during his last illness 4. 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. guardians & trustees with respect to property entrusted to them 2. he fails to notify seller within reasonable time of election to rescind 3. individuals. confusion or merger of rights of creditor and debtor e. between parties guilty of same criminal offense 5. he cannot rescind sale if: 1. conceived & unborn child. etc. made to public officers. physician. novation g.in the absence thereof.no inscription. court appointed . rescission i.not applicable to onerous donations Ø With regards to donations made by person without children or descendants at time of donation: 1.if pure & simple donation if it does not require written acceptance b) by guardian. order. represented by person who would have been guardian if already born • Who are disqualified to donate: 1. Revocation of Donations .000 2. 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 4.000 3. associations not permitted • 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 Ø when w/o reservation or if inofficious. If child came out to be alive & not dead contrary to belief of donor Page 98 of 230 unmerchantable which would examination of the sample not be apparent on reasonable 4. corporations. payment or performance b. one who can present oldest title 9. church. 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. husband & wife 3. Grounds: a. nurse. when goods deteriorated.

defect shall be considered as REDHIBITORY • If vet fails to discover through ignorance or bad faith. he is liable for damages Sale of animals on teams (2 or more) • . 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. honor.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. etc. children under his parental authority 2. property of donor.when only one is defective. Donee commits offense against person.c) 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.apply to sale of other things • Sale of animals at fair or public auction • • Sale of animals with contagious disease = void Sale of unfit animals - no warranty against hidden defects 3. spouse or children under his parental authority 3. Specific Implied Warranties in the Sale of Goods a) Warranty as to fitness & quality – Requisites: 1. 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. no need for action. Alienations/mortgages imposed are void unless registered with Register of Deeds Action cannot be renounced Action cannot be renounced in advance Right of action at instance of donor but may be transmitted to heirs Action does not extend to Right of action transmitted to heirs Action extends to donee’s Fruits to be returned at filing of complainant Prescription is 4 years from non-fulfilment Page 99 of 230 INGRATITUDE Needs court action Extent: Whole portion returned Property to be returned Prior ones are void. 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. Donee unduly refuses to give support to donor when legally or morally bound to give support to donor BIRTH OF CHILD Ipso jure revocation. Warranty against encumbrances (non. or made 3rd party defendant through 3rd party complaint brought by buyer iii. court decision merely Declaratory Extent: portion which may impair legitime of heirs Property must be returned NON-FULFILLMENT OF CONDITION Needs court action Extent: whole portion but court may rule partial revocation only Property in excess 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.exception: when it appears buyer would not have purchased the team without the defective one . there is an implied warranty that the goods shall be free from defect rendering them Page 134 of 230 Ø Ø 3. only one is redhibited & not the others . demand value of property when alienated and can’t be recovered or redeemed from 3rd persons Prescription is 1 year from knowledge of fact and it was possible to bring action Heirs can’t file action . goods are bought by description from seller who deals in goods of that description b) Sale of Goods by sample .If seller is a dealer in goods of that kind. spouse. 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 . 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.

be reimbursed the total amount paid including amortization interests but excluding delinquency interests at the legal rate. Conditions & Warranties CONDITION Purports to existence of obligation WARRANTY Purports to performance of obligation Condition must be stipulated to form part of the obligation Need not be stipulated. can only make heirs of donee liable if complaint was already filed when donee died 10.000. ii. at his option.heirs • donee’s heirs Exception to rule on intransmissibility of action with regards to revocation due to ingratitude: 1. ii.00 and/or imprisonment for not more than 20 years. personal to the donor. Implied Warranties – deemed included in all contracts of sale whether parties are actually aware or not. general rule is heir cannot institute if donor did not institute 2. is obliged to pay for the damage done. Answer: Under R. 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. Such fault or negligence. 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. 2.A. 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 . Discuss the rights and obligations of the parties. 6552 (Maceda Law). No. Civil Code: Whoever by act or omission causes damage to another. 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 Answer: Under the same law. 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. Express Warranties – Requisites: i. if there is no pre-existing contractual relation between the parties. seller is liable for damages 2. by operation of law i. 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 iii. may form part of obligation by provision of law May attach itself to obligation of seller to deliver possession & transfer ownership Relates to the subject matter itself or to obligation of the seller as to the subject matter of the sale 1. Bernie may. there being fault or negligence. c) Supposing DEVLAND had fully developed the subdivision but Bernie failed to pay further installments after 4 years due to business reverses. 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. whether they were intended or not. 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. Article 2176. is called a quasi-delict and is governed by the provision of this Chapter. Quasi-Delict 1.

buyer entitled to 50% of what he has paid + if after 5 years of installments. Page 132 of 230 Proof Needed Defense Available Pre-existing contract Burden of Proof Preponderance of Evidence Exercise of extraordinary diligence (in contract of carriage). 5. after due notice. Delict QUASI-DELICT Liability of Employer DIFFERENCE Solidary DELICT Subidiary Reservation Requirement Civil aspect of the quasi-delict is impliedly instituted with criminal action. imprudence) 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 Bar Question (2005). no installment payment shall be forfeited to the owner/developer when the buyer. DEVLAND’S action is not proper since under Section 23 of the said law. 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. 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 . b) Discuss the rights of Bernie under the circumstances. Purpose of law : Protect buyers in installments against oppressive conditions a. He thus wrote a letter to DEVLAND informing it that he was stopping payment. damage 2. in bad faith) Proof beyond reasonable doubt No pre-existing contract Prosecution Accused is presumed innocent until the contrary is proved. negligence 3.Prove the ff. 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. 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. Answer: Assuming the land is a residential subdivision project under P. Consequently. breach 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 . Civil Liability in Quasi-Delict v. Distinguished from other sources of obligation: CONTRACT QUASI DELICT Vinculum Juris Contract Negligent act/ omission (culpa. 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 Buyer paid less than 2 years installment 1st Grace period is 60 days from date installment became due b. • • Other rights: 1. malicious.cancelled. 957 (The Subdivision and Condominium Buyers Protective Decree). a) Was the action of DEVLAND proper? Explain. existence of a contract 2. causal connection between negligence and damage done DELICT Act/omission committed by means of dolo (deliberate.: 1. 3. but under 2000 Crimpro Rules it is independent and separate Civil aspect is Impliedly instituted with criminal action Effect of judgement of acquittal in a criminal case involving same act/omission Not a bar to recover civil damages EXCEPT when judgement pronounces that the negligence from which damage arise is non-existent Not a bar to recover civil damages Page 101 of 230 . 2.a. informing him that his payments are forfeited in its favor. can cancel. 4. No. After having faithfully paid the installments for 48 months. 4. Force Majeure There is pre-existing contract Contractual partyProve the ff: 1. 3. 2. No payment after 30 day period.D. Bernie bought on installment a residential subdivision lot from DEVLAND. b. DEVLAND cancelled the sale and wrote Bernie.

commercial 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. SUSPEND PAYMENT UNTIL SELLER COMPLIES Sale Of Immovables (By Installment) 1. 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. 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. In cases where negligence is presumed or imputed by law this is only rebuttable/presumption juris tantum 2.even though a person’s own acts may have placed him in a position of peril and an injury results. Maceda Law (RA 6552) • Coverage: REAL ESTATE – defined space vs. CONDO – not defined space (w/ common areas) 1.the theory here is that both parties are equally negligent. contract of sale 2. to constitute a defense. 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.the theory here is that the plaintiff was also negligent together with the defendant. Buyer paid at least 2 years installment Page 131 of 230 . Law applicable • Article 1592. If plaintiff's negligence is only contributory – he is considered partly responsible only. • 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. Thus. there can be no recovery c) DOCTRINE OF LAST CLEAR CHANCE . CC – Applies only to contract of sale • Maceda Law – applies to COS & CTS & Financing 2. contract to sell 3. 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. would naturally produce the event 6. Principle of res ipsa loquitur (the thing speaks for itself) b) c) grounded on the difficulty in proving thru competent evidence. plaintiff must prove negligence of defendant Exception: 1. if plaintiff’s own conduct is the cause of the injury there can be no recovery.In action for culpa aquiliana. Defenses a) CONTRIBUTORY NEGLIGENCE . financing transactions Excluded: • 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. plaintiff was in a position of danger by his own negligence Page 102 of 230 2. the courts will leave them as they are. RESCIND ii. proximate cause of injury/damage must be the negligence of defendant b) CONCURRENT NEGLIGENCE . cannot be invoked by a common carrier against a passenger in an action for breach of contract of carriage • Elements: 1. What must be proved a) Negligence .5. industrial 2. sale to tenants under agrarian laws • Rights Granted to Buyers: 1.

no further action against buyer to recover any unpaid balance of the price Page 130 of 230 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. Exception: assumption of risk DAMNUM ABSQUE INJURIA – a principle that involves damage without injury. Give notice of claim to carrier / bailee in possession thereof v Notice by seller to buyer is not required. must be counted from the day they may be brought PROSCRIPTION AGAINST DOUBLE RECOVERY . defendants concurrently negligent 3. Buyer is in default for unreasonable time **Notice needs to be given by seller to buyer f) Remedies of the Buyer g) 1. 3. 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. buyer may seek SPECIFIC PERFORMANCE WITHOUT GIVING SELLER OPTION TO RETAIN GOODS ON PAYMENT OF DAMAGES h) Sale of Movables on Installment (Recto Law) 1. Obtain actual possession of goods ii. Goods are in transit Ø From the time goods are delivered to carrier for purpose of transmission to buyer Ø Goods rejected by buyer & carrier continues to possess them v When are goods no longer in transit? Ø Reached point of destination Ø Before reaching destination. accident occurred as proximate cause of such failure • Who may invoke: plaintiff • Inapplicable to: 1. Expressly stipulated ii. notice to carrier 2. or which through foreseen were inevitable. notice by seller to buyer not essential e) 5. therefore no liability is incurred. 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 v If buyer chooses foreclosure.i. things FORTUITOUS EVENT – No person shall be responsible for those events which cannot be foreseen. stipulated the right of resale in case buyer defaults in payment iii. When Seller fails to deliver. Special Right to Rescind Requisites: i. Special Right to Resell the Goods Requisites: i. buyer obtains delivery of the goods Ø Goods are supposed to have been delivered to buyer but carrier refused ii. buyer in default for unreasonable time iv. there is no legal injury LAW – specific provision of law 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.Responsibility for fault or negligence under quasi-delict is entirely separate and distinct from • • • l) Page 103 of 230 . Buyer is insolvent (failure to pay when debts become due) b) How right is exercised: i. places. joint tortfeasors 2. d) is essential 4. goods are perishable ii.

b. Physical possession is with seller Remedies 1. condition precedent for filing claim has not been complied with 7. goods sold on credit but term of credit has expired 3. 3.violation of duty on account of relationship – he is negligent 1) PARENTS . In case of disagreement. under their authority & Page 104 of 230 a. Stoppage in transitu 3. 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.Whoever by act or omission causes damage to another. venue improperly laid d. cannot be availed when seller does not have custody o Exercisable only in following circumstances: 1. there is another action pending between same parties for same cause f. extinguished i. • • Vicarious liability – law on imputed negligence. and in case of his death or incapacity. Possessory lien 2. Special right to rescind prior rights have been exercised 2. there being no fault or negligence is obliged to pay for the damage done (art 2176).Guardians are liable for damages caused by the minor or incapacitated persons who are: i. 4. pleading asserting claim states no cause of action h. TORTFEASOR . 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). a person who himself is not guilty of negligence is made liable for conduct of another Reason: . 2. lack of jurisdiction over subject matter c. the mother are responsible for damage caused by minor children who live in their company Note: Father and Mother shall jointly exercise parental authority over common children. buyer becomes insolvent o Instances when possessory lien lost: 1. b. Seller is unpaid – not completely paid or received negotiable instrument under a condition & condition has been breached by reason of dishonor c. waived. claim set forth in pleading has been paid.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. cause of action is barred by prior judgement /statute of limitations g. Special right of re-sale Can only be exercised when the 2 4. 2) GUARDIANS . Stoppage In Transitu a) Requisites: Page 129 of 230 . lack of jurisdiction over person of defendant b. 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 3.The father. plaintiff has no legal capacity to sue e. Possessory Lien o Seller not bound to deliver if buyer has not paid him the price o Right to retain. goods sold without stipulation as to credit 2. claim is unenforceable under the provision of statute of fraud j.public policy – deeper pocket/capacity to pay . abandoned. father's decision shall prevail (art 211). Subject matter – goods b. Loss – 2 views: Paras: BUYER Tolentino: SELLER Deterioration & fruits – Buyer bears loss. Subject Matter: MOVABLES (IN GENERAL) Requisites: a.

Possession of a movable ii. instruction or custody (authority & responsibility shall apply Page 105 of 230 . 3.Teachers or heads of establishments of arts & trades shall be liable for damages caused by their: i. for value iii. 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 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. acting w/in the scope of their assigned task iv. Deterioration.c. art 218 . Owner is unlawfully deprived – owner can recover w/o reimbursing price Exception to Exception: i. 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) 3. illicit act of employee was on the occasion or by reason of the functions entrusted to him v. Movable is bought at public sale – owner can only recover after reimbursing price ii. Title as to Movable Properties a) Rule: POSSESSION IS EQUIVALENT TO TITLE Requisites: b) c) i.Employers shall be liable for damages caused by their employees & household helpers i. in the service of the branches in which the latter are employed OR ii. its administration & teachers or the individual. In good faith Exception: i. pupils. 2. 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. as long as they remain in their custody Loss. buyer buys goods under following condition: 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 live in their company NOTE: Family Code. ADMINISTRATOR. foreign to the exercise of the duties of his office if he is a special official. Movable acquired in good faith & for value from auction 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 5) STATE . Services rendered in accordance with orders which employer had authority to give iii. d. Owner loses movable – owner can recover w/o reimbursing price ii. employee selected by employer or through another ii.The state is responsible when it acts through a special agent. 6) SCHOOLS. TEACHER . 3) OWNERS & MANAGERS OF ESTABLISHMENT/ENTERPRISE Owners & managers of establishment or enterprise are responsible for damages caused by their employees: i. without notice of seller’s defect of title ii. entity or institution engaged in child care shall have special parental authority & responsibility over the minor child under their supervision. students & apprentices ii. 2. in good faith ii. in occasion of their function 4) EMPLOYERS . Fruits & Other Benefits Who Bears Risk of Loss/Deterioration/Fruits 1.The school.

art 219 . so long as they remain in their custody • not literal anymore. Why? Answer: The first buyer has the better right if his sale was first to be registered. he bumped a tricycle. teachers engaged in child care are made expressly liable Liability of school.first to posses in good faith = owner b) IMMOVABLE 1. No inscription & no possession in good faith – person who presents oldest title in good faith Bar Question (2001). before: boarding & living with teacher due to peculiar characteristic of trade & arts school • as long as they are in the protective. first to possess in good faith 3. applies to all including academic institution per weight of jurisprudence based on obiter of Justice JBL Reyes in the Exconde case 1. admin. Difference between Articles 218 & 2180 Art 218 School. has a priority in right. 1995. May the insurance company be held liable for the negligent act of Alberto? Why? 1. 3. 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 . 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. What creates bad faith in the case of double sale of land is knowledge of a previous sale. where the second sale is registered ahead of the first sale but with knowledge of the latter. Jesus sold a parcel of registered land to Jaime. basis of liability of teacher – principle of loco parentis (stand in place of parents) 2. owner by his conduct is precluded from denying seller’s authority (ESTOPPEL) b. he sold the same land to Jose. Family Code. includes recess time. hence.to all authorized activities whether inside or outside the premises or the school. b) The second sale is registered ahead of the first sale with knowledge of the latter? Why? Answer: The first buyer is still to be preferred. 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. admin. parents. General Rule: Sale by non-owner. When does the general rule apply? When not all requisites embodied in 1544 concur. for any legitimate reason for a child’s presence in school 2. First to register in good faith 2. Alberto an executive of an insurance company drove a company vehicle to a favorite Videoke bar where he had some drinks to “unwind. judicial guardian or person exercising substitute parental authority over said minor shall be subsidiarily liable. 1995. but in doing so. contrary is provided for in recording laws (PD 1529) Page 106 of 230 Page 127 of 230 . No inscription.those given the authority & responsibility shall be solidarily & principally liable for damages caused by act/omission of the unemancipated minor. with knowledge of the latter. 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. who at the time he registered his sale knew that the property had already been sold to someone else. Sale By Non-Owner Or By One Having Voidable Title Bar Question (2001). One June 15. he drove home. entity or institution). On June 30. Exceptions: a. Who has a better right if: a) the first sale is registered ahead of the second sale. This is because the second buyer. After working overtime upto midnight. resulting in the death of its driver. buyer acquires no better title than seller had. even though the first buyer knew of the second sale.” At 2:00am. teachers is solidary and parents are made subsidiary liable Students involved must be minor • • Art 2180 Teachers. supervisory capacity of teacher – special parental authority. acted in bad faith.

However. POSSESSOR OF AN ANIMAL OR WHOEVER MAKES USE OF THEM EVEN IF THE ANIMAL IS LOST OR ESCAPED Except: 1.5). the Supreme Court held that notwithstanding the fact that the employee did some overtime work for the company. sale or return d. Thing delivered & he does any act inconsistent with ownership of seller. Goods must be delivered in full. Alberto was not acting within the assigned tasks of his employment. the former was. 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. because the student who caused it was under their special parental authority and they were negligent. The guilty boy’s parents are subsidiarily liable under Article 219 of the Family Code. Who Bears Expenses of Delivery – Seller 13. its administrators. In the problem. (321 SCRA 393 (1999). Page 126 of 230 Force majeure Fault of the injured/damaged person he was in the vehicle. 8. 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 Sold for lump sum • • When price per unit not indicated If area delivered is either greater or lesser – price will not be adjusted accordingly 10. OR He retains without intimating to seller that he has rejected. He intimates to seller that he has accepted. 14. or o follow usage in trade. Double Sales 1. The incident could have been prevented had the teacher been inside the classroom at that time. 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. nevertheless. It is true that under Art. the teacher and the school authorities are liable for the blindness of the victim. Answer: The school. employers are liable for damages caused by their employees who are acting within the scope of their assigned tasks. In Castilex Industrial Corp. 2180 (par. 16. They were negligent because they were chatting in the corridor during the class period when the stabbing incident occurred. When not examined by buyer – not accepted until examined or at least had reasonable time to examine Answer: The insurance company is not liable because when the accident occurred.• ii. Vasquez. The time of the accident (also 2:00am) was outside normal working hours. 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. a 7-year old male pupil stabs the eye of another boy with a ballpen during a fight. v. contract to sell b. implied reservation of ownership 12. FC). the owner is solidarily liable with the driver if: 1. FC). sale on acceptance/approval c. who could be liable for damages for the boy’s injury: the teacher. c. no need to return. or o seller’s place of business or his residence o specific goods – place where the thing is o at reasonable hour 11. and teachers have special parental authority and responsibility over the minor child while under their supervision. instruction or custody (Article 218. except when stipulated b. Sale by Description/Sample: There is acceptance BY BUYER when: a. Bar Question (2003). Sale of Goods on installment: a. Time & Place of Delivery Rules: o follow stipulation in contact. 2. or the guilty boy’s parents? Explain. shall be considered as depositary. while the teacher was chatting with other teachers in the school corridor. the school authorities. If during class hours. b.In motor vehicle mishap. does not discharge seller from liability in case of breach of warranties (unless no notice or failure to give it within reasonable time) a. PRIORITY IN RIGHT OWNER OF MOTOR VEHICLE . unless there is stipulation to the contrary b. Jr. General Rule: FIRST IN TIME. Persons Expressly Made Liable By Law (even without fault) 15. Acceptance of goods in general. causing permanent blindness to the victim. and Page 107 of 230 . When buyer has a right to refuse goods. absent contrary express stipulation.

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 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. streets.responsible for the damages resulting from any of the ff. he must pay at price stipulated 2. FREIGHT i. 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. Destination Point – when goods reach the port of destination even if not disembarked yet from the vessel. rate at certain price • deliver all that may have been stated in the contract • if impossible. ARCHITECT OR CONTRACTOR . as to IMMOVABLES i. DRINKS. DEFENDANT IN POSSESSION OF DANGEROUS WEAPONS OR SUBSTANCES. HEAD OF FAMILY THAT LIVES IN A BUILDING OR PART THEREOF . Completeness of Delivery a. there is already delivery to buyer. could have misfortune through due diligence prevented the c. 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.liable for damages caused by things thrown or falling from the same 9.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 e. there is delivery to the buyer c) CIF – COST. constructed without precautions suitable to the place g. when accepts & consumes before knowledge that buyer will not perform contract in full. if LESS – buyer has 2 options: a) reject b) accept 1. action must be brought within 10 years from collapse h. when buyer pays for services of carrier – delivery to carrier is delivery to buyer. which may be harmful to persons or property 4) by falling of trees situated at or near highways or lanes. SUCH AS FIREARMS AND POISON . TOILET ARTICLES & SIMILAR GOODS . PROPRIETOR OF BUILDING OR STRUCTURE .shall be liable for damages for the death or injuries suffered by any person by reason of the defective condition of roads. liable only for fair value of goods delivered ii. if not caused by force majeure 5) by emanations from tubes.if damage of building or structure is caused by defect in construction which happens within 15 years from construction.2. PROVINCES. CITIES & MUNICIPALITIES . INSURANCE. remedies of buyer: Ø LESS IN AREA a) rescission b) proportional reduction of price – LACK IN AREA SHOULD NOT BE MORE THAN 1/10 OF AREA AGREED UPON Ø GREATER IN AREA a) accept per stipulation & reject the rest b) accept whole area – pay at contract rate Page 125 of 230 . ENGINEER. Sold per unit or number • with statement of its area. bridges. When buyer pays seller the price – from moment the vessel is at port of destination. 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. when accepts with knowledge that seller is not going to perform contract in full. and the inflammation of explosive substances which have not been kept in a safe and adequate place 3) by excessive smoke. MANUFACTURERS & PROCESSORS OF FOODSTUFFS. canals. carrier is agent of the buyer ii. public buildings. and other public works under their control or supervision f. Principles Page 108 of 230 ii. sewers or deposits of infectious matter. 9.

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

Mayfair Theater Inc. annoys or offends the senses. (264 SCRA 483). if material UNFAIR COMPETITION . Inc. prior thereto – offer may still be withdrawn • Acceptance must be of the exact terms to be considered absolute Page 123 of 230 . intimidation. 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. 4. defendant is a public officer charged with the performance of a duty in favor of the plaintiff 2. commercial or industrial enterprises or in labor through the use of force. and that he was actuated by legal malice. or 4. a case with similar facts.Unfair competition in agricultural. lowly station in life. defies. injures or endangers the health or safety to others. the lessor sold the property to a third person who knew about the lease and in fact agreed to respect it. f. • REQUISITES: 1. without just cause to perform his official duty (art 27). establishment. but can be attached to other principal contracts onerous commutative unilateral – vs contract of sale which is bilateral 3. sustains both rights of action because the buyer in the subsequent sale knew the existence of right of first refusal. or other personal condition 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. or disregards decency or morality. Place of birth. obstructs or interferes with the free passage of any public highway or streets. Definition – any act. Decide the case. 4. The defendants contend that the plaintiff can neither seek rescission of the sale nor compel specific performance of a “mere” right of first refusal. 4. c. omission. Offer – certain 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. Right of First Refusal • creates a promise to enter into a contract of sale and it has no separate consideration. the amount of such damages. However. hence in bad faith. ELEMENTS: 1. plaintiff sustained material or moral loss as consequence of such non-performance 4. or any body of water Page 110 of 230 Answer: The action filed by the lessee. 2. e) f) g) 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. he refused or neglected without just cause to perform such duty (ministerial) 3. physical defect. 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 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. for both rescission of the offending sale and specific performance of the right of first refusal which was violated. oppressive or highhanded method (Art 28) MALICIOUS PROSECUTION b. shocks.2. machination or other unjust. the lessee is expressly granted a right of first refusal should the lessor decide to sell both the land and the building. or anything else which: 1. should prosper. nominate principal. 3. Perfection: Offer & Acceptance • Meeting of Minds 1. deceit. that is. Consequently. or 3. or 2. 3. right of first refusal which does not even have a separate consideration may be subject to specific performance Bar Question (1998). v. The ruling in Equatorial Realty Development. e. d. by improper and sinister motive h) VIOLATION OF RIGHTS AND LIBERTIES OF ANOTHER PERSON i) NUISANCE a. condition of property. In a 20-year lease contract over a building.

power to sell a piece of land granted to an agent – otherwise VOID b.denounced as nuisance by common 2. Particular form is required under the statute of frauds: a. acceptance is floated but they do not meet.000 e.those which are in their law or by statute nature not nuisances. Form of Sales 1. Civil action 2. 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) . managed. Remedies Against Private Nuisances 1. Agreement to sell things with value of 500 and up c. ii. Three Stages in the Life of a Contract of Sale a) Policitacion/Negotiation Stage – offer is floated. without judicial proceeding d. Perfection and Consummation of a Contract of Sale 1. that such demand has been rejected iii. Page 111 of 230 . surroundings. steps must be made: i. sale of land by non-Christian if not approved by Governor – VOID 4. Form not important in validity of sale . When the police found the illegal trade. Option Contract – Characteristics: a. that the abatement be approved by the district health officer and executed with the assistance of local police iv. etc. 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. Abatement. towards whom the owner of the premises or instrumentality owes the duty of ordinary care. When form is important for enforceability (STATUTE OF FRAUDS) a. Prosecution under the RPC or any local ordinance 2. meeting of the minds c) Consummation – parties perform their respective undertakings 2. not the contract of sale by itself. Sale to be performed 1 year after b. c. b. which takes the children who accepted it out of the category of a trespasser and puts them in the category of invitees. 2. Private persons . Sale of real property or any interest therein Exceptions: i.Sale being consensual. not binding to 3rd persons only hinders or impairs use of property NUISANCE PER SE .a. must also be registered with Municipal treasurer – otherwise VOID c. Who May Avail of Remedies 1. valid & binding between parties b. exception by specific provision of law: a. c. Kinds: 1. the ff. 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.if nuisance is specially injurious to himself. without judicial proceedings f. but may become so by reason of their locality. the time when parties indicate their interest but no concurrence of offer & acceptance b) Perfection – concurrence of all requisites. or the manner in which they may be conducted. distinct Page 122 of 230 Bar Question (2006). that the value of destruction does not exceed P3. Abatement. 3. may be oral or written. demand be first made upon owner or possessor of the property to abate the nuisance ii. When form is important for validity. sale of large cattle. Public officers 2. they immediately demolished the house because according to them. REMEDIES AGAINST PUBLIC NUISANCES 1. Civil action 3. A drug lord and his family reside in a small bungalow where they sell shabu and other prohibited drugs. iii.constitutes waiver Formation. NUISANCE PER ACCIDENS . perfected by mere consent as to price & subject matter 5.

However. the demolition cannot be sustained. Outside commerce of men iv. To be considered a nuisance per se. Subject Matter of Sale • To be a valid subject matter. Price 1. the act. whether judicially or extra-judicially. Since the demolished house was not a nuisance during the times that it was not used for selling drugs. Can this demolition be sustained? Explain. General Damages .damages which are the natural. Impossible service c) Determinate or determinable Actual/Compensatory 3. Special Damages . in the abatement of a nuisance. As such it can be enjoined and all instruments thereof be destroyed by the law enforcers. it cannot be considered nuisance per se. The house cannot be considered as nuisance per se. 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. liquidated Exception to General Rule: a) Minors *Status of contract: VOIDABLE only.aleatory in character but valid .every sale of a future thing is subject to the condition that they will come into existence .sale of empty hope is void b) Licit – must be within the commerce of men Void if subject-matter is: i. To demolish the house is an unnecessary damage and injury. 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 2. the value of loss suffered b. The sale of the shabu in that community is facilitated by the house which hides the pernicious activity from the law enforcers. sale of things having potential existence (emptio rei speratae)valid ii. 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. This being the case. the following must concur: a) Existing. 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. occupation. the abatement should not inflict unnecessary damage or injury. • Answers: (1) No. the demolition of the house is not necessary to abate the sale of shabu in that community. profits which obligee failed to obtain 2.natural. nominal. CONCEPT: Adequate compensation for a. Future & Contingent i. need not be specifically pleaded because the law itself implies or presumes that they resulted from the wrongful act ii. Simulated/fictitious iii. Exceptions: Page 121 of 230 .it was a nuisance per se that should be abated. or structure must be nuisance at all times and under any circumstances. necessary and logical consequences of a particular wrongful act which result in injury. actual. but not the necessary and inevitable result of the wrongful act. regardless of the location or surrounding. Sale of hope (emptio spei). Contrary to law ii. exemplary. In this case. (2) The selling of the shabu is not a public nuisance but a grave threat to the welfare of the community. temperate. Moreover. WHAT MUST BE DONE TO COLLECT ACTUAL DAMAGES: a. separation of property agreed (marriage settlement) ii. Plead or allege the loss i. Damages Kinds of Damages: (“mental”) moral. therefore ratifiable b) Sale between spouses Exceptions: i.

in lease: consideration is rent in sale: seller needs to be owner of thing to transfer ownership. Liquidated damages previously agreed upon. iii. 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. Loss is presumed (ex: loss if a child or spouse) d. a contract of sale but designated as lease in name only. if deceased was obliged to give support (for period not more than 5 years) iv. stipulation between parties Page 113 of 230 . in lease: use of thing is for a specified period only with an ii. vii. in lease: lessor need not be owner obligation to return g) Lease with option to buy .000 units of the manufacturer’s computers every month and to resell them in the Philippines at the manufacturer's suggested prices plus 10%. Pray for the relief that claim for loss be granted Prove the loss 3. c. WHEN LOSS NEED NOT BE PROVED: a. in sale: consideration is price. cost of litigation Damages recoverable: a. Medical & Hospital Bills b. VALUE OF LOSS SUFFERED (DANO EMERGENTE) . satisfy/extinguish obligation to pay debt ii. Damages in case of Good faith a. Support. TEST: essential clauses of whole instrument (art 1466 – motherhood statement. Minimum amount: P50. liquidated damages take the place of actual damages except when additional damages incurred b. b. 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 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. attorney's fees (other than judicial costs) are not recoverable. The foregoing indicia negate sale because they indicate that ownership over the units was never intended to transfer to the distributor. The manufacturer shall hold the distributor free and harmless from any claim for defects in the units. interests.as a general rule. Natural and probable consequence of breach of obligation. in sale: obligation to absolutely transfer ownership of thing. medical & hospital bills. 1. Moral damages d. and (3) warranty for the units was borne by the manufacturer. 2.Destruction of things. 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. e) f) Dacion en pago dacion: contract where property is alienated to i. in dacion: delivery is required (real contract) Lease i. and Parties have forseen or could have reasonably forseen at time obligation was constituted Damages in case of bad faith a. If damages other than actual are sought c. (2) the manufacturer reacquires the unsold units at exactly the same price. sale is a real contract (to give) – rescission is not available in agency Bar Question (2000).in reality. Is the agreement one for sale or agency? b. A foreign manufacturer of computers and a Philippine distributor entered into a contract whereby the distributor agreed to order 1. attorney's fees. not good law) Agency is a personal contract. it is a sale by installments Essential Requisites of a Contract of Sale 1. All unsold units at the end of the year shall be bought back by the manufacturer at the same price they were ordered.000 ii. in dacion: novates creditor-debtor relationship into sellerbuyer iii. Damages for death i. except: i. Attorney's fees . fines or penalties. 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. Loss or impairment of earning capacity (in case of physical disability) c.vi.

iii. ii. viii. plaintiff has contravened the terms of contract 2. seller warrants. that the defendant acted upon the advise of counsel 4. This is because the unborn child is not yet considered a person and the law allows indemnity only for loss of life of persons. 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. in barter. seller receives profit. in agency to sell. buyer becomes owner of thing. iv. the consideration is the giving of a thing. vi. Contributory negligence b.ii. in agency. in sale. e.. in case where exemplary damages are to be awarded. it is giving of money as payment both are governed by law on sales. x. not unilaterally revocable. in agency. Inchausti. moral damages for mental anguish that attended the Page 114 of 230 iii. may recover damages for the bodily injury she suffered from the loss of the fetus which is considered part of her internal organs. contract of sale is sale of things. if intention is not clear (1468): a. products are not ordinary products of manufacturer. 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. sale is governed by law on sales b) Barter i. that since the filing of the action. contract for piece of work (abandoned) Habituality test – enunciated in Celestino v CIR. agent not obliged to pay for price. ix. that the loss would have resulted in any event 5. donation is governed by law on donation. vii. Nature of the object test – enunciated in EEI v CIR. in agency. the defendant has done his best to lessen the plaintiff's loss or injury Bar Question (2003). (5%) Rules: Timing test – under art 1467. to sell in sale. Answer: No. may be revoked unilaterally because fiduciary & even if revoked w/o ground n sale. v. 6. In contracts. The parents may also recover damages for injuries that are inflicted directly upon them. e. contract for piece of work is sale of service. xi. 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 for piece of work. principal remains owner even if object delivered to agent in sale. merely obliged to deliver price received from buyer. The mother. in sale. may she and her husband claim damages from the bus company for the death of their unborn child? Explain. agent assumes no risk/liability as long as within the authority given in sale. iv. v. whether the thing • transferred would have never existed but for the order – • • d) Agency i. agent not allowed to profit Page 119 of 230 . both are species of the genus sales if consideration consists party in money & partly by thing – look at manifest intention. WHEN DAMAGES MITIGATED: a. value of thing is equal or less than amount of money – sale c) Judicial costs Interest .g. each product’s nature of execution differs from the others. in agency. the spouses cannot recover actual damages in the form of indemnity for the loss of life of the unborn child.future earnings b.discretionary on part of the court 5. however. ii. buyer pays for price of object. f. quasi-contracts and quasi-delict 1. plaintiff derived some benefit as result of contract 3. 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. contract of sale if manufacturer engages in activity without need to employ extraordinary skills and equipment. iii. UNREALIZED PROFITS (LUCRO CESSANTE) .

c. or abused l. oppressive. Moral shock f. c. 2. 2 SCRA 801 [1961]). fraudulent. h.equal value is exchanged for equal value f) Consensual . 34 and 35 k. A contract of sale may be absolute or conditional. Distinguished from other Contracts: a) Donation i. unlike accessory contract c) Bilateral . donation is gratuitous. by reason of defendant's culpable action and not intended to enrich a complainant at the expense of defendant. (Geluz v. 27.imposes obligation on both parties d) Onerous . diversions or amusements that will serve to alleviate the moral suffering he has undergone. 3. In contracts and quasi-contracts. In quasi-delicts. b. Since there is gross negligence. Art. 26. Sentimental value of real or personal property may be considered in adjudicating moral damages 5. CA. reckless. exemplary damages as a part of the civil liability may be imposed when the crime was committed with one or more aggravating circumstances. the court will decide whether or not they should be adjudicated. d. the court may award exemplary damages if the defendant acted in a wanton. descendants.with valuable consideration e) Commutative . 32. Acts and actions referred to in arts 21. Fright e. Serious anxiety 4.2. exemplary damages can also be recovered. exemplary damages may be granted if the defendant acted with gross negligence. e. Criminal offense resulting in physical injuries Quasi-delicts causing physical injuries Seduction. Physical suffering b. “PBMF-MWSS” a. Social humiliation h. Contract of Sale – One of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing. f. abducted. raped. and the other to pay therefor a price certain in money or its equivalent. 2231. ascendants and brother and sisters for acts mentioned in art 309 m. it is a mode w/c actually transfers ownership 3. Such damages are separate and distinct from fines and shall be paid to the offended party. Exemplary damages cannot be recovered as a matter of right. sale is consensual Page 118 of 230 5. Art 2220 . rape or other acts of lasciviousness Adultery and concubinage Illegal or arbitrary detention or arrest Illegal search Libel. abduction. 28. The social and economic/financial standing of the offender and the offended party should be taken into consideration in the computation of moral damages 6. 3. 30. Moral Damages 1. g. 2. Moral damages is awarded only to enable the injured party to obtain means.law gave it a name b) Principal .title gives rise to an obligation to transfer. donation is formal contract. Art. 1. Wounded feelings g. A stipulation whereby exemplary damages are renounced in advance shall be null and void.can stand on its own. loss of the unborn child. In criminal offenses. b. Mental anguish d.meeting of minds makes a perfect contract of sale but needs delivery to consummate.in cases of willful injury to property or breaches of contract where defendant acted fraudulently or in bad faith Page 115 of 230 . It need not also be alleged. 2232. 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. Characteristics of Contract of Sale: a) Nominate . When recovered a. 2230. SALES 4. The parents of the female seduced. Its amount need not be proved. Spouse. because its determination depends upon the amount of the compensatory damages that may be awarded to the claimant. Art. g) Title & not a mode . IN WHAT CASES MAY MORAL DAMAGES BE RECOVERED (enumeration not exclusive): a. or malevolent manner. i. sale is onerous ii. because it is merely incidental or dependent upon what the court may award as compensatory damages. Besmirched reputation c. 29.

good customs or public policy shall compensate the latter for damages. Page 116 of 230 (2) Moral damages may be recovered in all of the five instances enumerated above.Bar Question (2004. to be paid in case of breach thereof 2. 2219 of the CC. but during the transfer of luggage DT suffered pain in his arm and wrist. Both refused to transfer despite better seats.. 2. However. although there is a breach of contract. Thus they gave in. however. ELEMENTS: a. Temperate or Moderate Damages 1. they were told they were upgraded by computer to First Class for the flight to manila because the Business Section was overbooked. Right of plaintiff is violated c. They said they had guests in Business Class they should attend to. several of which are enumerated below. Plaintiff has a right b. to First Class because they had contracted for Business Class passage. Art. Art 21 provides: “Any person who willfully causes loss or injury to another in a manner that is contrary to morals. Must be reasonable Liquidated Damages 1. Under Article 2219 of the Civil Code. they are not entitled to actual damages. Those agreed upon by the parties to a contract. There seems to be no showing that they incurred such pecuniary loss.”. Vasquez. There is no showing that the pain in DT’s arm and wrist resulted directly from the carrier’s acts complained of. they sued the airline for a million pesos in damages. 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. An award of nominal damages precludes the award of temperate or moderate damages. CONCEPT: imposed by way example or correction for the public good. may be vindicated or recognized. partial or irregular performance Exemplary or Corrective Damages 1. the same article provides that moral damages may be recovered “in the following analogous cases”. DT and MT were prominent members of the frequent travelers’ club of FX Airlines. Bar Question (2006). moral damages may be recovered in the cases specified therein. in addition to the moral. 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. 1. Choose the case wherein you cannot recover moral damages. Explain. 2219 (10) provides and includes: “Acts and actions referred to in Art. When none was forthcoming. over their objections. Hence. Answer: FX Airlines committed breach of contract when it upgraded DT and MT. Some pecuniary loss b. food. They felt humiliated. 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.2005). Concept: Adjudicated in order that a right of the plaintiff. beverage and other services in First Class. Immorality or dishonesty is analogous to acts contrary to morals and therefore covered by Art 2219. On checking in. Nominal Damages 1. WHEN LIQUIDATED DAMAGES MAY BE EQUITABLY REDUCED: a. 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. In Hong King. which has been violated or invaded by the defendant. DT and MT are entitled to actual damages only for such pecuniary losses suffered by them as a result of such breach. iniquitous or unconscionable b. and not for the purpose of indemnifying the plaintiff for any loss suffered by him 2. Loss is incapable of pecuniary estimation c. 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. However. REQUISITES: a. temperate. embarrassed and vexed. they demanded an apology from FX’s management as well as indemnity payment. After arrival in Manila. Purpose is not to identify but vindicate or recognize right violated 3. Is the airline liable for actual and moral damages? Why or why not? Explain briefly. Moreover. 399 SCRA 2007 [2003]). RULE: It cannot co-exist with compensatory damages. 21. however. when the stewardess allegedly threatened to offload them if they did not avail of the upgrade. the couple were assigned seats in the Business Class for which they had bought tickets. 2219 of the Civil Code. liquidated to compensatory damages Page 117 of 230 . While “immorality” and “dishonesty” are not included in Art..