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Memory aid CIVIL LAW

Marriage
The Supreme Court had laid down the guidelines for the interpretation and application of Article 36:
(a) Grave It must be grave or serious such that the party would be incapable of carrying out the ordinary
duties required in a marriage;
(b) Juridical Antecedence It must be rooted in the history of the party antedating the marriage, although the
overt manifestations may emerge only after the marriage; and
(c) Incurable and Permanent It must be incurable or, even if it were otherwise, the cure would be beyond
the means of the party involved.
OR
a) The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any doubt should be
resolved in favor of the existence and continuation of the marriage and against its dissolution and nullity.
b) The root cause of the psychological incapacity must be: (a) medically or clinically identified, (b) alleged
in the complaint, (c) sufficiently proven by experts and (d) clearly explained in the decision.
c)

The incapacity must be proven to be existing at the time of the celebration of the marriage.

d)

Such incapacity must be also shown to be medically or clinically permanent or incurable.

e) Such illness must be grave enough to bring about the disability of the party to assume essential
obligations of marriage.
f)
The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family Code as
regards the husband and wife as well as Articles 220, 221, and 225 of the same Code in regard to parents and
their children.
g) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling or decisive, should be given great respect by our courts.
h) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as
counsel for the state. No decision shall be handed down unless the Solicitor General issues a certification,
which will be quoted in the decision, briefly stating therein his reasons for his agreement or opposition, as the
case may be, to the petition.
Obligations
General Provisions Obligation to give to do not to do + Law contract, Quasi, Delict, Quasi Delict +
contracts= force of law
Nature and Effect
Give
Care: Good father of family
The very thing, fruits, accessions

Do

Not do

and accessories
Fruits time obligation to deliver
arises (merely personal; real right
when delivered)
Determinate/ indeterminate
- Specific or equivalent
performance / substitute
performance
Effect of delay, loss, & fortuitous
event

No specific performance, but


execution at cost + poorly done be
undone

Undon at his expense

Defects: Fraud, negligence, delay (DAMAGES)


Delay
o Delay begins from either from demand (unless demand is not necessary) or when the other
fulfils hid obligations (in reciprocal obligations)
Demand not necessary: law/ obligation makes it express, time is of the essence,
demand will be useless
Specification of date is NOT demand. What must be express is that demand will nto
be necessary.
o Presumptions:
Receipt of principal: payment of interest
Later instalment: previous instalments
Fraud: future fraud non-waivable. Refers to dolo incidente. Dolo causante renders obligation void.
Negligence: may be waived, but only simple negligence. Gross negligence amounts to fraud.
Defense:
o Fortuitous event:
Events which could not be foreseen/ avoided. Only cause of loss. If it coincides with
negligence, fraud or delay, then it is not a defense.
Requisites:
Independent of will of debtor, unforeseen/unavoidable/ 1. Cause is
independent of the will of the debtor; absolute impossibility f performance;
free from participation in aggravation (no contributory negligence); must be
SOLE and only cause.

Kinds
1. Pure and Conditional (condition: future and uncertain event/ past event unknown to parties)
a. Immediately demandable: pure & resolutory
b. Suspensive potestative condition: fulfilment depnds upon sole will of debtor (ok lang if chance or
mixed)
c. Impossible, illegal, immoral = annul dependent obligation, but if divisible, that part rendered valid
must be sustained.
i. Provided this thing happens happening or impossibility of happening
ii. Provided this thing does not happen same
iii. Volutarily prevents fulfilment = constructive performance
d. Retractivity
e. Improvement, Loss, deterioration while performance is suspended (same with period)
i. Imporovement: creditor; debtor merley usufructuary
ii. Loss: with fault = damages, without fault = creditor, extinguished
iii. Deterioration: with fault = rescission/fulfilment+ damages, without fault = creditor
f. Rescissory/ Roslutory powers: attached to every reciprocal obligation
i. Fulfilment/rescission + damages

2. Obligations with a Period arrival f day certain (future and certain)


a. when my means permit me to do so = period
b. Early payment = recoverable before arrival of period (debtor has right to period)
c. No period indicated = ascertain from terms if parties intended a period, and fix that period which
was intended,not what is equitable
d. Loss of right to period:
i. Insolvency unless may guarantee tapos no guarantee or he impairs those
guarantees/ or kahit di sinasadya tapos pag wala na, inattempt pa mag-abscond
3. Alternative Obligations bound to perform one alternative completely, not partially. There is a right of
choice given to DEBTOR.
a. Must be communicated. Once so, it cease to be alternative. Specific na siya.
b. If creditor nagmaldita and inalisan ng choice save for one rescission with damages
c. If debtor nagmaldita
i. Debtor given choice: All lost damages; Basis: last thing or service which disappeared
ii. Creditor given choice: All lost choose from any, plus damages
iii. One is lost (FE) choice sa natira
iv. One lost (fault of debtor) pwede pa rin siyang choice + damages
d. Facultative one choice, but may render another in substitution (noliability until chosen)
4. Joint and Solidary solidary MUST BE EXPRESS (law, stipulation, nature). Otherwise, presumed joint.
a. Solidarity is not indivisibility. Vice versa. The may be bound differently in manner and time, but it
may be indivisible.
i. Creditors: no prejudicial acts to others, no assignment without consent,
ii. Debtor: pay who demands. Otherwise, kahit sino. Upon payment by anyone,
extinguished.
1. Payor may demand from others their respective shares + proportionate burden in
case one is insolvent
iii. Release of some debtors y creditor, effects:
1. If creditor releases one of the debtors, debtors obligation to one who has paid is
not extinguished.
2. Remission of one debtor does not entitle him to reimbursement.
3. Creditor responsible to other creditors for te share remitted.
iv. Loss
1. GR: extinguished. If any ones at fault, all shall be liable but with action against
the pahamak one.
2. Also, you can availa yourself of defences personal to you and those which are
derived from the obligation. Keep out of others defences.
5. Divisible and Indivisible (indivisible if not susceptible of partial performance like maybe
anaesthesiologist and a surgeon na hindi marunogn maganaesthesia WUT anyway)
a. If the other s are ready to perform but one of the indivisible debtors shall not comply with his
undertaking, the ones ready to perform their obligaitons will not be liable beyond their
corresponding portion.
6. Penal Clause GR: penalty caluse is substitute for indemnity for damages and payment of interest in case
of noncompliance EXCEPT
a. Stipulation to contrary
b. Limitations: penalty cannot substitute for performance. Hindi rin pwedeng performance tapos
penalty. Isa lang mga the, bawal gahaman.
i. However, when performance has been choses and it is already impossible, penalty may
be enforced.
c. Nullity of penal clause does not nullify obli. Nullity of obli nullify penal clause. Sawsaw lang kasi
siya sa mga ganap.
Extinguishment (PaLoCoCoCoNo!)
1. Payment/performance

a.

2.

3.
4.
5.

6.

Must be complete. Substantial performance is ok as long as there is GF & compensation for


damages. Acceptance of incomplete performance is deemend complete performance (yan. We get
the love we think we deserve!)
i. Demand for parial fulfilment ok when partially liquidated
b. Must be the exact thing or if generic = neither superior nor inferior quality.
i. If money, legal tender. Unless otherwise stipulated. Check payment only when encashed
or impaired thorugh fault of creditor
c. Third person:
i. Creditor not bound to accept. Debtor not bound to reimburse if without knowledge (e. in
so far as it benefitted him). Third person cannot compel to be subrogated to creditors
rights. Donation ito actually.
d. Capacity
i. If incapacitated to alienate consideration not valid
ii. Payment mustbe made to payee. If not, ok pa din as long as tinago or nagbenefit.
1. Not necessary when there is subrogation or ratification
e. Application debtor must say kung saan, and hindi pwede sa hindi pa due. If issued a receipt
and you did not complain, you are estopped from claiming invalidity. Interets muna bago
principal. Most onerous pag wang specification.
i. Cession debtor may assign or cede property in payment of debts but only to the extent
of proceeds received from sale of the thing ceded.
ii. Consignation creditor refuses without just cause to receive payment:
1. 2 notice rule: notice of consignation to those interested in fulfilment then
deposit,then notice of consignation. Then cancellation of obligation .
Loss
a. Genus nun quam perit
b. Rebus sic stantibus service has become so difficutl (not impossible) as to be manifestly beyond
the contemplation of parties
c. Debt proceeds from criminal offense not excused from payment
Condonation (express or implied) characteristic of donation
a. Delivery of instrument evidenceing credit
b. Principal condoned, inclused accessories. But not vice versa.
Confusion/Merger C & D become one and the same. Benefits guarantors.
a. BUT. Guarantor & guarantor/creditor: nope. Obligation existing
b. If joint, confusion oextinguishhed only relevant share.
Compensation C& D of each other + same kind and quality + due liquidated and demandable
a. Guarantor mayset up defense of compensation re: what creditor owes principal debtor
b. What may be compensated:
i. Thoese not due, claims for damages. Rescissible or voidable debts
c. Assignment and compensation:
i. C assigns:
1. W debtors consent: cannt set up defense unless there is a reservation
2. W/knowledge, no consent: only those before, not after
3. /wo knowledge: compensation of all credits until knowledge of assignment
ii. BAWAL SA DEPOSIT CONTRACTS
Novation must be expressed or clearly incompatible terms
a. CHANGING OBJECT
i. If void, original will subsiste unless in was intended to be extinguished
ii. Principal extinguished: accessories too, except in so far as they may benefit third persons
iii. Novation void if orig was void. annulement may be claimed by debtor/ raitification
b. Substitution of debtor MUST ALWAYS BE WITH CONSENT OF CREDITOR kebs sa debtor,
although it affects his liability when the substitute turns out to be insolvent.
i. If debtor assigned or suggested substitute + insolvenct was existing anf known to debtor
c. Subrogating creditor

i. Legal C pays another creditor who is preferred even witout Ds knowledge. OR. Third
person pay with approval f debtor. Or any person interested in fulfilment of obligation
ii. Conventional all must consent
Contracts
Essential Requisites
- Meeting of minds between two parties whereby one binds himself to give or render service.
- Determination of performance maybe left to third person, but must be communicated to perties
- Autonomy, mutuality, relativity (stipulation pour autrui)
o Contracts without authority: unenforceable but ratifiable
- Induce to commit fraud in contracts = damages
- Real perfected by delivery
1. Consent meeting of minds an absolute acceptance of offer
a. Ineffective when acceptance was not communicated to person
2. Object certain (SM)
a. Licit, commerce of man, possible, determinate
3. Cause prestation
Form:
Public Document real rights, cession, repudiation, renunciation of inheritance, cog, power of administration,
exceeding 500 pesos
Reformation there is meeting of minds but true intention not expressed (mistake, fraud, inequitable conduct
of one of the parties). If no meeting of minds annulment.
- Kahit isa lang yung nagkamali tapos aware yugn isa, reformation. Except if hindi talag akayo nagagree.
- Not allowed in:
o DIV with no condition, Wills, real agreement is void.
o Party who seeks enforcement
Interpretation: obscurity will not benefit one who caused it. Moreover, if gratuitous (least transmission of
rights). If onerous (greatest reciprocity of interests). If principal object cannot be determined talaga as to not
point to any intention, void.

1.
2.

3.
4.

Rescissible
LESION +FRAUD
(1/4 value of object)
Remedy of last resort
Lesion
a. G-W
b. Representatives
Fraud of creditors,
cannot recover in any
way
Under litigation without
judicial authority
Payments made in state
of insolvency

Voidable
VITIATION OF
CONSENT

Unenforcable
UNAUTHORIZED

Void
NON-EXISTENT

1. ONE is incapable of
giving consent
2. Consent is vitiated
3. Drunkenness
4. Mistake (material),
violence, intimidation,
undue influence, fraud
a. Mistake
material
b. Violence
serious

1. Not authorized
2. Statute of frauds
3. BOTH are
incapable of giving
consent

1. Contrary to law etc


2. Absolutely
simulated/fictitious
3. outside commerce
of man
4. Impossible service
5. Cannot be
ascertained
6. Law

irresistible force
Intimidation
fear of imminent
and grave evil
d. Undue influence
improper
advantage of
power over
anothers will
e. Fraud insidious
words or
machinations,
material
misrepresentatio
ns (causente)
i. Dolus bonus and
caveat emptor
5. Mutual error when
real purpose is
frustrated (di ba to
reformation?)
c.

Subsidiary and resorted to


only when the injured party
has no other means to
obtain reparation + only to
extent of damage
4 years

Valid until annulled.


Maybe ratified.
Clean once ratified

Linisin mo yung defect

Not ratifiable, non


waivable

4 years, but interested


parties except guilty
parties

Only by parties, not


third persons
(maybe 5 years since
none is providedin the
code)

Imprescriptible
If both are guilty, no
action against each
other but both shall be
criminally prosecuted

Rescissible
- Both parties must be able to restore what they have received. If not, this is not the proper remedy.
- If no reserved property to answer for debt to creditor, presumed to have been entered into in fraud of
creditors. Presumed onerous when writ of attachment has been issued
Voidable
- Restore what one may have received
- Incapacitated person not obliged to make substitution except in so far as he was befitted
- When the object is lost though fault of person who has the right to bring action, extinguished.
o Except if the other party is the incapacitated party
Unenforceable
- Statute of frauds: (unenforceable unless in writing and subscribed. Evidence cannot be recived without
writing) 5LA SIR! ratifiable by failure to object or by receiving benefits under them
1. Agreement to be performed 1 year from making
2. Lease longer than 1 year

Void
-

3. P500 or above sale un less partly or whole received or recorded in auction book
4. Special promise to answer for debt of another
5. In consideration of marriage
6. Representation as to credit
When one party gives consent, then voidable. If both, then validated.

If CRIMEL No action if both are guilty. Innocent party may claim what he has given.
If NOT CRIME: both at fault: no recovery or demand. If only one, then innocent party may recover
without need to comply with his obligation.
o Money paid for illegal purpose: may be repudiated before contract is accomplished/ damage
caused + recovery
o If one party to illegal contract is incapable of giving consent, then the court may allowe
recovery of thing delivered.
o Same with prohibited contractsand excess amounts received.
If possible, separate illegal terms from legal ones to give effect to contract.
TRUST

One whereby a party reposes confidence over his property to antoher for the benefit of antoher person.
Express trust on immovable: cannot be proved by parol evidence
Acceptance of beneficiary is necessary.Presumed if no onerous condition.
Implied trust: may be proved by parol evidence.
1. Property donated but done has no interest in property
2. property is sold, and as a result: legal estate is in one person but price paid by another for the purpose of
having beneficial interest (our arrangement over botika).
If trustee is child donation/ gift, not implied trust.
3. Price is paid by A for B, and conveyed to A: trust in favour of B.
4. Land passes to A but he casues it to be put under Bs name: trust in favour of A.
5. ABC buy property under As name. Trust for ABC.
6. Absolute conveyance of property to secure performance of obligation
7. Constructive trust:
a. Trustee uses trust funds to purchase property for him or another person trust in favour of owner
of funds.
b. TRUE CONSTRUCTIVE TRUST: Person obtains property thgough mistake or fraud trustee
for the benefit of person from whom propery comes
Sales

Deliver determinate things and transfer ownership for price or consideration in money /equivalent.
o The contract is perfected upon meeting of the minds as to the price and object certain. From this
moment, the obligation becomes reciprocally demandable.
o However, ownership of the thing shall be transferred upon actual or constructive delivery. Despite
delivery, it may also be that ownership does not transfer until price is paid in full (pactum reserve
dominii)
o DELIVERY transfers ownership. PAYMENT makes reciprocal obligation demandable.
EXECUTION OF CONTRACT evidences title. But until there is delivery, there is no transfer of
ownership. What does this imply?
Res perit domino Owner bears burden of loss.

In sales, after perfection, buyer bears risk of loss as exception to res perit
domino.jk
Delivery made to buy with express reservation of ownership: buyer bears risk of
loss.
Whoever is in delay bears risk of loss.
Remedies will depend on ownership if owner, then SP or rescission. Otherwise,
damages.

Elements:
o Consent
o Price or consideration + manner of payment gross inadequacy does not affect sale except when
it manifests defect in consent or it looks like a donation
Must be fixed and determinate/determinable.
INEFFICACIOUS if refusal to fix OR impossible to fix.
VOID if simulated. (maybe donation)
If fixed but bad faith, courts to fix price
Must always be agreed upon by both.
Issues: Instalment payments, Cash versus check payment
o Object licit, determinate or determinable, specific. Sale of generic things will not give rise to
ownership and will not terminate obligation
Ownership only at time of delivery. However, when ownership was never acquired or
authoried, tge buyer acquires no better title than seller, except also when there is estoppel.
When sellers title is merely voidable, buyer may acquire full title when at time
of sale: good faith, for value, no notice of defect in title.
VOID: illicit, vain hope,
6 month expiry:When the object is not at par/ less area than agreed upon: either ask for
specific performance, proportional price reduction , or rescission (but only when inferior
value exceed 1/10th or would not have bought property had he known
6 month expiry: What about lump sum sales (versus rate per unit) of real
property? Owner obliged to deliver all that is in boundaries/area agreed upon,
else: reduce price, rescission
Good faith: abstain from taking any unconscientious advantage of another as evidence by lack of NOTICE
of anothers title and payment of price. There must be showing of diligence (must be reasonably on guard.
Important in sales of registered land.
Parties:
o Capacity: all capacitated to contract. EXCEPTION
Husband and wife except when there is prenuptial or legal separation of property.
Guardians, agents, executors or administrators as to property under their guardianship, or
admisintration (agents may get conset of principal) RATIFIABLE
Public officer, all those involved in administration of justice (lawyers, judges, etc), as to
those properties in litigation or under their jurisdiction VOID
Delivery control. Execution of pulic instrument equivalent to delivery unless from the deed a contrary
intention appears. Applies to incorporeal property as well.
o Kinds: ACTUAL, CONSTRUCTIVE, QUASI-TRADITION, BY OPERATION OF LAW
symbolica (keys), longamanu (mere consent), brevi manu (possessor possession becomes
owner), constitutum possessarium (owner becomes possessor)
o There is execution of public instrument BUT no control by nedor: NO DELIVERY. No transfer of
ownership. Sale may be cancelled.
Special concepts
o Earnest money given as part of consideration, and proof of perfection (there is sale).
o Option Contract (preparatory) unilateral promise to buy and sell + price separate consideration

opportunity to make up ones mind about a sale


Only claim for damages since the only contract here is the unilateral promise of seller
that he will sell to buyer, which promise was given for a separation separate and distinct
from the price. When there is NO CONDISERATION, it is NOT binding. Or when one
nevertheless communicates his acceptance EVEN WITHOUT consideration, contract is
STILL PERFECTED.
o Contract to sell vs. Contract of sale
To sell: Ownership reserved until full payment (there may be delivery but no ownership).
Merely preparatory . No payment, no transfer of ownership.
Rescinded upon non-payment. Initial payments forfeited.
Connect with Realty Installment Buyer Protection Act
1. Unit sale: sold per unit but no all delivered reduction/ rescission
2. Lump sum sale: not per unit if all within boundaries given, then no
increase of decrease. But if not all within boundaries, then reduction or
rescission.
Of sale: Sale is perfected, and ownership is transferred even without delivery. Non
payemtn makes seller unpaid, but vendee is still owner. Connect with earnest money.
Specific performance. Rescission plus damages
o Right of first refusal - right to have the first opportunity to meet terms of contract
Must be express, must be same offer to others otherwise it will prejudice the lessee.
Condier is disputed sale actually transferred ownership. Where from unincorporated, it
became incorporated, then no actual ownership transfer.
o Contract fo piece of work (off the rack versus bespoke)/ barter (look at intent. Then look at value
of goods exchanged).
o Dation: Dation is substituting consideration for debt payment. There is preeisting debt.
o Cession: Assigning right to sell, not ownership. Creditors will be paid form proceeds.
o Emptio Rei Sperati: sale of an expected thing (if did not materialize, ineffective sale). Emptio
spei: sale of hope (if did not materialize, valid. You sold HOPE.)
o Assignment of credit: Acquisition of power to enforce, not ownership. binding only as between
parties.
o Agency to sell: no ownership by agent. No price paid by agent.
o Auction sales each lot is a separate contract, perfected upon fall of hammer
Right to bid reserved by the seller must be express and made known by notice.
Otherwise, unlawful and fraudulent.
o Installment sales:
Personal property SP, cancel when failure cover 2+ periods, foreclose on mortgage
when 2+ periods covered
Real property
Double sales
o Personal property First in GF possession
o Real property first to GF register it, then first in possession, then oldest title
Mere registration insufficient. There has to be GOOD FAITH.
Execution sales of registered land: registration is the operative fact that transfers
ownership (buyer not obliged to go behind registry and investigate).
UNLESS. BUYER KNEW. BAD FAITH.
Registered land:
Generally, one who registers first is first in right. BUT he has to be in good faith.
DONT REGISTER YOUR ADVERSE CLAIM IF YOU ARE BUYER 1. It will
only acknowledge sale to someone else. REGISTER YOUR TITLE. And do it
before buyer 2 registers.

1. However, when BUYER 1 is IN POSSESSION, then there will be bad


faith on part of BUYER 2. Registration will be rendered inoperative.
Unregistered land:
If sale to buyer 1 was effected PRIOR TO REGISTRATION, then the rules on
registration will not operate on execution sale.
1. Seller who has already transmitted his title will only be able to assign
and transfer all the rights he had to the thing which in this case is
none, having previously transferred them by way of sale to another.
Warranties and Conditions
o Warranty affirmation or promise relating to a thing re quality etc as to induce the buyer to
purchase (EXPRESS)
Value or opinion only are NOT warranties EXCEPT if made as an expert.
o EVICTION requisites: FJ, deprivation, prior rate due to fault of seller, seller notified by
vendee.
Seller cannot waive action against EVICTION. Only buyer can, and that will only make
the seller liable for value of thing at time of eviction. Unless vendee had knowledge of
risks, then vendor not liable. Consider non apparent easement but registered and
annotated.
Liablity of vendor (demandable!): VICED. OR vendee may rescind if an important thing
is missing (not both remedies)
Enforcement of warranty only upon final judgment for eviction.
o HIDDEN DEFECTS hidden and exist @time of sale, important for contract
Vendor liable even if not aware. But not liable if vendee knows or should have known.
Redhibitory (animal sales. Ay pwed eother things. Think Patrick-mannix pair )
o Vendee warrants to accept and pay.
Reasonable opportunity to examine before acceptance
Acceptance does not remove warranty of vendor. But whena reasonable time has lapsed
and no showing of non-acceptance or rejection, deemed accepted.
o Redemption
Consider if pacto de retr or equitable mortgage: if equitable mortgage, no right to redeem.
If pacto de retro, with right to redeem.
Equitable mortgage:
1. Significantly inadequate price
2. Vendor retains possession
3. Vendee retains price
4. Redemption period extended
5. No registration under name of vendee
Option to buy is NOT pacto de retro.
You must reserve the right to repurchase in SAME instrument.
Conventional
No stipulation, no redemption. With stipulation but no period: 4 years. With
stipulation with period: max of 10 years
In co-ownership, vendee cannot be compelled to accept partial redemption.
However. When vendor sells and buys on hiw own, then this is an exception. Or
when owner agrees, only that portion which pertains to him is redeemed.
Legal - right to be subrogated upon the same terms and conditions stipulated in the
contract, 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.
EG: When co-owner sells his share to stranger, another co-owner may exercise
right to redeem sold share.Exercised witin 30days from notice in writing by
prospective vendor

1. Also applies to owner of adjoining lands.


2. Compare with right of pre-emption: when land is so small tapos
ibebenta pa yung huge part of that right to pre-empt sale.
Rights and Obligations:
Obli - SELLER
Transfer ownership
Deliver thing
Warrant against eviction
& hidden defects

Rights - SELLER
Possessory lien
Stoppage in transit
Resale
rescind

Obli - Buyer
Accept
Pay

Rights - BUYER
Specific performance or
rescission with damages
If breach of warranty:
1. Accept + defense of
breach to decrease
price
2. Accept + breach
damages
3. Reject + breach
damages
4. Reject + rescission

Lease and Credit Transactions


What is a lease? Contract where one grants the temporary use of a thing or rendering some service to one
who undertakes to pay for such use or service. If gratuitous, commodatum.

What are the characteristics of a lease? Consensual, bilateral, onerous, commutative

Kinds: lease of things, services, work


o Financial leasing: bank engages to buy equipment needed by a leassee who shall pay rentals for
use thereof
o Lease of services vs. agency: lease of services is based on employment, and there is no
representation of owner in the performance of work. He does not execute juridical acts (compare
with agency). Lease of services, being employment, is NOT terminable at will.

Assignment vs. Subleasing:


o Assignment needs consent. (subjective novation. Lessee is steping out of the contract, and there
remains only two relations).
o Subleasing does NOT need consent UNLESS there is a prohibition (lessee remains a party and
there exists three relations).
o
o

Art. 1649. The lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary. .
Art. 1650. When in the contract of lease of things there is no express prohibition, the lessee may
sublet the thing leased, in whole or in part, without prejudice to his responsibility for the
performance of the contract toward the lessor.

Liability of sublessor for rental payments: SUBSIDIARY. You have to secure JUDGMENT + RETURN
showing insolvency of lessee before you can collect from sub lessee.
o Art. 1652. The sublessee is subsidiarily liable to the lessor for any rent due from the lessee.
However, the sublessee shall not be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the extrajudicial demand by the lessor.

Payments of rent in advance by the sublessee shall be deemed not to have been made, so far as
the lessor's claim is concerned, unless said payments were effected in virtue of the custom of the
place.

Use of premises by sublessee limited to contractual stipulations of both lease and sublease.

Duties of lessor and lessee


1. To deliver the thing + fit for use intended
2. Necessary repairs refusal to provide necessary
repairs, there is right to withhold rentals.
3. Peaceful and adequate enjoyment

1. To pay the price of the lease


2. Use according to purpose stipulated/ inferred
(nature or custom)
3. Pay expenses
Otherwise, ejectment!

The buyer of a land with a lease not registered in the Registry of property may terminate the lease . Right
cannot be exercised in bad faith. If sale is not registered, then buyer and contract are presumed fictitious.
Grounds for ejectment (PaVE U)
a. Expiry of period demand is NOT necessary unless the reason is TERMINATION.
i. Possession beyond expiry AND no notice to vacate implied new lease or TACITA
RECONDUCCION (expiry, no demand, 15D possession with acquiescence)
1. Expired, no notice to vacate, continued possession for at least 15 days with
acquiescence of lessor
2. Renewed period will depend upon manner of payment. When you receive notice
thereafter, then period will terminate after aid period.
3. Only the provisions germane to possession will be renewed. Right to purchase is
not germane to possession.
4. Demand to increase the rental if the parties cannot agree is equivalent to demand
to vacate premises
b. Payment failure there MUST be demand to vacate AND pay. If vacate OR pay no
ejectment.
c. Violation of lease contract look at contract. If contract says you dont need to go to court, then
we follow that.
d. Devotes to another use leading to deterioration
e. No due diligence

Ejectment of tenant on ground of need to use the subject of lease:


o Owner or immediate family member needs property, 3 motnh notice, no other unit may of
landlord is available, lease has expired

A lessee can NEVER be a builder in good faith. Knowledge that possession is merely of holder makes one
a builder in bad faith.
o How much will you get if you construct?
If GF = 100% at time of payment. If BF (like lessee) = 50% of value of improvement.
If GF = builder has right of retention and may not be ejected without compensation.
LESSEE DOES NOT HAVE RIGHT OF RETENTION.
GF in the context of a lease contract means you got the consent of the lessor. So anything
you built with consent, is still BF as per BPS provisions. However, since you obtained the
consent, you are entitled to 50% of the value of the useful improvement that you
introduced. (other options: removal if reimbursed without damage if not with damage.
Ornamental cannot be removed without damage and never reimbursed).

BUT. If GF, hindi mo pwede ipatanggal.

Agency vs. Lease of service vs. Contract for piece of work

Destruction of leased premises


o Not extinguished as long as it can be used for the purpose for which it was intended. Extinguished
otherwise.

Buildings and plans (15 years)


o Plan: engineer/architect
o Construction: contractor. If supervisedby (1), then solidary liability

Credit Transactions
Loans one party delivers to another something consumable or non consumable subject to the ff. conditions:
o MUTUUM (simple): That when it is consumable, the same amount of the same kind and
quality shall be paid; aka forbearance of money. onerous or gratuitous, ownership passes,
perfected upon meeting of minds
o COMMODATUM (bailment): That when it is non-consummable, it may be used for a
particular time and purpose provided it be returned upon a certain time. gratuitous,
ownership does not pass, perfected upon delivery of object
MUTUUM
Interest must be express. If there is stipulation but no amount, then legal interest. Otherwise, no interest.
However, when there is demand and delay, interest begins to run regardless of stipulation (6% na lahat ng
interest)
Parties may stipulate for higher interest rates, as long as not unconscionable. Usurious interests are void.
However demand again and legal interest will run.
Note the difference in interest for use (moratory) and interest for default (compensatory) compute
moratory based on contract interest, then compensatory from default timterest.
o Further, the interest due shall earn legal interest from the time it is judicially demanded. If
there is not extrajudicial demand, there is no need to pay interest on accrued interest.
o If not forbearance of money, then theinterest is only 6% annual interest
Cash advances are loans. Ownership was transferred. No conviction for estafa kasi pinautang mo yun, so
he holds it in ownership not as agent or trustee. Hindi na yun sayo nung pinautang mo siya.
COMMODATUM
Since there is an obligation to return it, ownership does not pass. In fact, bailor need not be the owner.
Purely personal contract bawal ipahiram sa iba except sa member of household.
Object may be consumable when purpose is for exhibition only.
The moment it becomes onerous, it ceases to be a COMMODATUM. Lease na siya.
Bailor
1. No demand until expiry, but pwede if he needs it
urgently (suspended)
2. Refund extraordinary expenses unless nakuha

Bailee
Pay for ordinary expenses for use and preservation
Liability for FORTUITIOUS EVENT:

from actual use in whichcase pantay sila)


3. Damages suffered by bailee for flaws he did not
disclose

1.
2.
3.
4.
5.

Devotes to diff purpose


Delay
With appraisal for value
Pinahiram sa hindi member ng household
Instead of saving the borrowed item, mas pinili
nya yung kanya

PRECARIUM commodatum where the bailor can demand the return of te thing at will:
1. No stipulation on duration or purpose
2. Use merely tolerated

DEPOSIT receipt of a movable thing from another FOR SAFEKEEPING


Real contract perfected by delivery
1. Depositary has to keep it safe, not use the item generally, keep the secret of the deposit, return
te things with all its products UPON demand.
2. Depositor has duty to reimburse for expenses incurred for safekeeping
Versus: commodatum

Commodatum
Deposit
Nature
Both real
Both real
Object
Im/movable
movable
Purpose
Use
Safekeeping
Compens Gratiutous
Gratuitous or Onerous
e
If lost due to FE and it is proximate and only cause, depositary is NOT liable for damages.
o Extinguished. Or if death of anyparty and contract is gratuitous extinguished
When liable with or without FE:
1. Stipulated
2. Use without consent of depositor or not for preservation
3. Delays return
4. Allows others to use it
INNKEEPERS/ HOTEL KEEPERS
o Notice was given and travellers took precautions
o Liable whether caused by servants or strangers (unless armed = FM)

SURETY vs GUARANTY
(Benefit of excussion)
Guaranty
Person binds himself to fulfil the obligations of debtor
should he FAIL to do so. Liablity is subsidiary
Insurer of insolvency
BENEFIT of EXCUSSION
Hindi na makabayad.

Surety
Person binds himself to fulfil the obligations of debtor
should he REFUSE to do so. Liability is solidary.
Insurer of debt.
No benefit
Ayaw magbayad.

Guranty can only up to extent of debt.


Continuing guaranty guarantees a credit line, to insure obligations for a particular period of time
(versus a particular debt)
How does guaranty work? Execute the writ of exexution against the debtor first before guarantor.
Otherwise, gurantor can raise defense of excussion.

Excussion right to have properties exhausted before he can made liable (guarantor)
RUSIA (not available): renunciation, useless because properties of debtor would not
satisfy obligation, solidarily bound, insolvency of debtor, debtor has absconded
Partial and total excussion excused from liability only to extent covered by
properties of debtor
o Gurantor can still be reimbursed for debt even without excussion, because one cannot be
unjustly enriched by anothers acts. Further, the right of excussion is for the guarantor to
waive. By paying the debt despite absence of demand or execution, the guarantor waives his
right to excussion but NOT to reimbursement.
Benefit of division- several guarantors are jointly bound, not solidarily, unless stipulated.
May guanrator proceed against debtor before payment? YES. SIPETAI.
o Guarantor sued, insolvency if debtor, period of guaranty expired, expiration of period of
payment, ten years lapsed and there is no extinguishment, debtors absconds, imminent
insolvency.
Even if surety did not receive notice of demand from creditor, it remains SOLIDARILY BOUND. It
will be liable for everything debtor is liable for.
Surety cannot apply application of payments. FULL LIABILITY ang sa lolo mo.
Extinguishment
o Like other contracts.
o Extinguishment of principal debt.
o Creditor extends loan without knowledge of guarantor.
o

MORTGAGE and PLEDGES


The sale of the thing pledge or mortgaged is a total acquittance of the debt.
o If you sold for more, you are NOT entitled to excess except when there is a stipulation. BUT
you cannot recover for deficiency because it is a TOTAL acquittance, notwithstanding any
provision to the contrary.
o HOWEVER: in mortgage, you can recover for deficiency.
You CANNOT appropriate the object for yourself. PACTUM COMMISSORIUM IS NOT
ALLOWED.
o However, if the charter or contract does not prohibit extrajudicial foreclosure you can
foreclose.
o If there is an act that has to be performed before appropriation, it is not pactum
commissorium.
o 2-bidding rule: When nobody buys after 2 biddings, you can appropriate for yourself.
Continuing mortgage over immovable is allowed. BUT THERE IS NO CONTINUING MORTGAGE
OVER CHATTEL.
There is no partial release of mortgages. It is indivisible Except
o Mortgaged in order to secure partial portion of debt, then partial release allowed.
Partial redemption is also allowed when there has already been foreclosure. Indivisibility applies only
when there has been no foreclosure yet.
ANTICHRESIS
Delivery of thing, which fruits shall be made to answer for the interests of the loan.
It has to be in writing.
NEGOTIORUM GESTIO and SOLUTIO INDEBITI

LAND TITLES
AGENCY & PARTNERSHIP
CONFLICTS