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UP Solid Civil Law Reviewer PDF
UP Solid Civil Law Reviewer PDF
OBLIGATIONS
Copyright and all other relevant rights over this material are
owned jointly by the University of the Philippines College of
CONTRACTS
Law, the Faculty Editor and the Student Editorial Team.
CREDIT
TRANSACTIONS
AGENCY
PARTNERSHIP
PRIVATE
INTERNATIONAL LAW
CIVIL LAW REVIEWER
SUCCESSION
Table of Contents
Chapter II. Testamentary Succession ..........61 Chapter VI. Application of the Important
I. Concept ...............................................61 Concepts through Sample Computational
II. Testamentary Capacity .......................61 Problems......................................................... 86
III. Formalities of Wills ..............................61 I. Institution of Heirs ............................... 86
IV. Qualifications of Witnesses to a Notarial II. Legitimes............................................. 86
Will 62 III. Intestate Succession........................... 87
V. Qualifications of Witnesses to a Notarial IV. Accretion ............................................. 87
Will 63 V. Collation .............................................. 88
VI. Institution of Heirs ...............................63
VII. Applicable Principles of Private
International Law .........................................63
VIII. Codicils and Incorporation by
Reference ....................................................64
IX. Revocation of Wills and Testamentary
Dispositions..................................................64
X. Allowance and Disallowance of Wills..65
XI. Substitution of Heirs ............................66
XII. Legitimes.........................................67
XIII. Preterition........................................69
XIV. Reserva Troncal .............................69
XV. Disinheritance .................................70
XVI. Legacies and Devises.....................71
OBLIGATIONS
Table of Contents
CONTRACTS
Table of Contents
PROPERTY
Table of Contents
SALES
Table of Contents
CREDIT TRANSACTIONS
Table of Contents
AGENCY
Table of Contents
PARTNERSHIP
Table of Contents
Chapter VII. Nationality................................436 Chapter XIV. Torts and Crimes ................... 453
I. Determination of Nationality ..............436 I. Torts .................................................. 453
II. Procedure for Naturalization .............436 II. Crimes............................................... 454
III. Loss of Philippine Citizenship ...........437
IV. Problems in Applying the Nationality Chapter XV. Torts and Crimes .................... 455
Principle .....................................................438 I. Personal Law of Corporations .......... 455
II. Domicile/Residence of Corporations 455
Chapter VIII. Domicile ..................................439 III. Jurisdiction Over Foreign Corporations
I. Domicile ............................................439 455
II. Comparative Merits and Demerits of IV. Right of Foreign Corporations to Bring
Domicile and Nationality ............................440 Suit 456
Chapter IX. Principles on Personal Status Chapter XVI. Foreign Judgments ............... 457
and Capacity.................................................441 I. Recognition v. Enforcement.............. 457
I. Definition ...........................................441 II. Bases of Recognition and Enforcement
II. Beginning and End of Personality.....441 457
III. Absence ............................................441 III. Policy of Preclusion Underlying
IV. Name.................................................442 Recognition and Enforcement ................... 457
V. Age of Majority ..................................442 IV. Requisites for Recognition or
VI. Capacity ............................................442 Enforcement .............................................. 457
V. Procedures for Enforcement ............. 457
Chapter X. Family Relations........................443 VI. Effect of Foreign Judgment in the
I. Marriage ............................................443 Philippines ................................................. 458
II. Divorce and Separation.....................445
III. Annulment and Declaration of Nullity 445
IV. Parental Relations.............................446
V. Adoption ............................................446
CIVIL LAW REVIEWER TABLE of CONTENTS
the latter implies that of the former. The Complete respiration = test/sign of
capacity or incapacity of persons depends independent life
upon the law. Both juridical capacity and 4
capacity to act are not rights but qualities of Note: For a fetus that had an intra-uterine life
General Rule: Birth determines personality (Art Article 42, Civil Code. Civil personality is
40). Death extinguishes civil personality (Art extinguished by death.
42).
The effect of death upon the rights and obligations of
the deceased is determined by law, by contract and
Exception: a conceived child shall be by will.
considered born for all purposes that are
FAVORABLE to it, provided it be born
People v. Tirol, (1981)
later (Art 40, 2nd clause) with the following
Criminal liability ends with death BUT civil
circumstances:
liability may be charged against the estate.
a. From the time it is completely delivered
from the mother's womb. Article 43, Civil Code. If there is a doubt, as
b. But if the fetus had an intra-uterine life between two or more persons who are called to
of less than seven months, it should succeed each other, as to which of them died first,
survive for at least 24 hours after its whoever alleges the death of one prior to the other,
complete delivery. (Art. 41, CC) shall prove the same; in the absence of proof, it is
presumed that they died at the same time and there
Article 40, Civil Code. Birth determines personality; shall be no transmission of rights from one to the
but the conceived child shall be considered born for other.
all purposes that are favorable to it, provided it be
born later with the conditions specified in the Note: Article 43 provides a statutory
following article. presumption when there is doubt on the
order of death between persons who are
Birth = complete removal of the fetus from the called to succeed each other (only).
mothers womb; before birth, a fetus is merely
part of the mothers internal organs Joaquin v. Navarro, (1948)
The statutory presumption of Article 43 was not
Personality of Conceived Child
applied due to the presence of a credible
1. Limited = only for purposes FAVORABLE to
eyewitness as to who died first.
it
2. Conditional = it depends upon the child Presumption in the Rules of Court (Rule 123,
being born alive later sec. 69, par. ii)
Period of Conception = the first 120 days of Age Presumed Survivor
the 300 days preceding the birth of the child 1. Both under 15 Older
2. Both above 60 Younger
3. One under 15, the One under 15
A conceived child can acquire rights while still in
other above 60
the mothers womb. It can inherit by will or by 4. Both over 15 and Male
intestacy. under 60; different
sexes
Geluz v CA, (1961) 5. Both over 15 and Older
An aborted fetus had conditional personality but under 60; same sex
never acquired legal rights/civil personality 6. One under 15 or One between 15 and 60
because it was not alive at the time of delivery over 60, the other
from the mothers womb. No damages can be between those ages
claimed in behalf of the unborn child.
Note: Applicable only to two or more persons
Article 41, Civil Code For civil purposes, the fetus who perish in the same calamity, and it is
is considered born if it is alive at the time it is not shown who died first, and there are no
completely delivered from the mother's womb. particular circumstances from which it can
However, if the fetus had an intra-uterine life of less
be inferred.
than seven months, it is not deemed born if it dies
within twenty-four hours after its complete delivery
from the maternal womb.
CIVIL LAW REVIEWER Chapter I. CIVIL PERSONALITY
7. Absence
Article 124, FC
a. administration and enjoyment of the
CPG shall belong to both spouses
jointly
b. in case of disagreement, husbands
decision shall prevail, subject to
recourse to the court by the wife for
proper remedy
c. if one spouse is incapacitated/unable
to administer, sole powers of
administration may be assumed by the
other spouse.
d. General Rule: This power does not
include disposition/encumbrance.
Exception: judicial authority or
written consent of other spouse
CIVIL LAW REVIEWER Chapter II. CITIZENSHIP AND DOMICILE
B. Kinds of Domicile
Chapter II. Citizenship and Domicile
(asked in 75, 81, 87, 93, 05 and 08 bar 1. Domicile of Origin 8
exams) Domicile of parents of a person at the
II. Domicile
1. Physical Presence
2. Intent to remain permanently (animus
manendi)
CIVIL LAW REVIEWER Chapter III. MARRIAGE
to avoid prosecution for rape is void for total d. A Military commander of a unit may
lack of consent. The accused did not intend solemnize marriages in articulo mortis
to be married. He merely used such between persons within the zone of 10
marriage to escape criminal liability. military operation. (Art 7,32 FC)
- Before a
Note: In a marriage in articulo mortis, when
marriage can one or both parties are unable to sign
be solemnized, the marriage certificate, it shall be
a valid sufficient for one of the witnesses to
marriage write the name of said party, which shall
license MUST be attested by the solemnizing officer.
FIRST (Art 6, par. 2)
BE
PRESENTED, 3. Places where marriage SHALL be
otherwise the
marriage is
solemnized: (CCO)
VOID. (Moreno a. Chambers of Judge or an open court
v Bernabe) b. Church, Chapel or Temple
c. Office of the consul general, consul or
3. Things to do at the local civil registrar: vice consul (Art. 8, FC)
a. File an application of marriage license at Exception:
the proper local civil registrar. (Art. 11, a. Marriages in articulo mortis
FC) b. Marriages in remote places
b. Present birth or baptismal certificate. c. Written request from both parties.
(Art. 12, FC)
c. If aged 18-21 years, present parental
consent. (Art. 14, FC) III. Marriages Solemnized Abroad
d. If aged 21-25, present parental advice.
(Art. 15, FC) General Rule
e. If aged 18-25, present certificate of Marriages solemnized abroad in accordance
marriage counseling from your priest. with the laws in force in that country shall be
(PD 965) valid in the Philippines. (Art 26 FC)
f. Pay the required fees. (Art 19, FC)
g. If foreigner, present certificate of legal Exceptions
capacity issued by diplomat or consular 1. Marriage between persons below 18 years
officials. (Art. 21, FC) old Art. 35(1)
2. Bigamous or polygamous marriage Art.
Marriage Ceremony 35(4)
1. No prescribed form or religious rite for the 3. Mistake in identity Art. 35 (5)
solemnization of marriage is required. (Art. 4. Marriages void under Article 53 Art. 35 (6)
6, FC 5. Psychological incapacity Art. 36
The couple's written agreement where 6. Incestuous marriages Art. 37
they declare themselves as husband 7. Marriage void for reasons of public policy
and wife, signed by them before a judge Art. 38
and two capable witnesses, even though
it was independently made by them, still
counts as a valid ceremony. (Martinez v
Tan, 12 Phil 731)
IV. Presumption of Marriage
Connected Provisions
this Code shall taken effect" has been Effects of Other Void Marriages
deleted by Republic Act No. 8533 [Approved 1. The effects provided for by paragraphs (2),
February 23, 1998]). (3), (4) and (5) of Article 43 and by Article 16
It must be noted that under the new 44 shall also apply in the proper cases to
TOLENTINO
A. Requirements for Subsequent Marriage Status of Subsequent Marriage: generally
to be Valid When Prior Spouse is considered bigamous & void EXCEPT par. 2 of
Absent (Art. 41, FC): this article; good faith w/o falling under par. 2 will
render marriage VOID
1. The prior spouse had been absent for 4
consecutive years, or 2 years in cases When Voidable: must act in GOOD FAITH and
under Art. 391 CC. 1. absent spouse not heard from 7 consecutive
2. The spouse present has a well-founded yrs
belief that the absent spouse was already 2. although absent for less than 7 yrs,
dead. generally considered dead
3. The spouse present must institute a 3. presumed to be dead after 4 yrs when
summary proceeding for the declaration occurrence of death in A391
of presumptive death of the absentee,
without prejudice to the effect of Judicial Declaration Unnecessary: purpose of
reappearance of the absent spouse. validity of marriage, missing spouse need not be
__________ judicially declared an absentee, enough required
CIVIL LAW REVIEWER Chapter V. VOIDABLE MARRIAGES
period elapsed from time the absentee was last expeditions, landslides, volcanic
heard not from judicial declaration. After 7 eruptions)
years, presumptive death arises w/o need for 22
3. 2-year period counted from event of death
judicial declaration
As to Subsequent Upon
Burden of Proof: two successive marriages, effect on marriage is reappearance,
nd
presumption on validity of 2 marriage and subsequen automatically judicial proceeding
ND
burden on party ATTACKING VALIDITY OF 2 t marriage terminated by the is necessary to
MARR. PRESUMPTION in favor of recording of an declare marriage
INNOCENCE prevails over PRESUMPTION of affidavit of null and void
ST reappearance of the
CONTINUANCE OF LIFE OF 1 SPOUSE &
MARITAL RELATIONS. absent spouse
Art. 363 (CC): No child under 7 years shall be Art. 48 (FC): To prevent collusion between the
separated from the mother unless there is a parties, fabrication or suppression of evidence,
compelling reason to do so. the prosecuting attorney or fiscal shall appear on 23
behalf of the State.
VI. Jurisdiction
in an Insurance policy, even if such Effect: Filipinos living abroad could not
stipulations are irrevocable (Art. 64. FC, cf. obtain a valid divorce even in countries
PD 612, sec. 11). where divorce is legally permissible. 26
7. Obligation for Mutual support ceases, but
A. In General
C. Charges Upon the ACP (Art. 94, FC) (4
(Asked in 98 and 07 bar exams) debts, 2 taxes, 2 expenses, support,
donation)
When it commences
At the precise moment of the celebration of the (asked in 76 bar exam)
marriage (Art. 88, FC). However, if the marriage
is celebrated before the Family Code took effect 1. Support
(1988), the default property regime is the Spouses
Conjugal Partnership of Gains (CPG). Even if not living together except
when a spouse leaves conjugal
Waiver of Rights (Art. 89, FC) home without just cause
General Rule: NOT ALLOWED Even during pendency of action for
Exceptions legal separation or annulment of
a. When there is judicial separation of marriage
property Common children
b. When there is legal separation Legitimate children of previous marriage
CIVIL LAW REVIEWER Chapter VIII. PROPERTY RELATIONS BETWEEN SPOUSES
Illegitimate children - follow the presumed that she agreed with the husbands
provisions on Support and (9) decision. (Art. 96, FC)
2. Debts and Obligations Contracted During 32
Marriage Except
authorization may be obtained from the the provisions of law on forfeitures and
court. delivery of presumptive legitimes.
3. Support for family will be taken from the 33
ACP. 6. After covering all community obligations and
CPG ACP
1. Property acquired Each spouse retains his/her property; Properties become part of community
before marriage. only fruits part of conjugal property property
2. Property acquired Part of conjugal property Becomes community property
during marriage
3. Upon dissolution Separate properties are returned; net Net remainder of ACP divided equally
of marriage profits divided between spouses or between spouses or heirs
heirs
4. Basis Capital and properties of spouses kept Mutual trust and confidence between
separate and distinct from benefits; spouses; fosters oneness of spouses
insurmountable obstacle to
presumption of solidarity
5. Liquidation Exclusive properties will have to be Easier to liquidate because net
identified and returned, and remainder of community properties are
sometimes, identification is difficult. simply divided between spouses or
heirs.
A. Where It Applies (Art. 105) Note: CPG begins at the precise moment the
marriage celebrated (Art 107)
1. For marriages before the implementation of
the Family Code.
2. For marriages after the Family Code, if
agreed to by the parties through a marriage
settlement.
CIVIL LAW REVIEWER Chapter VIII. PROPERTY RELATIONS BETWEEN SPOUSES
B. Husband and Wife Place in Common 4. Share of either spouse in hidden treasure,
Fund (PIPF-EC) (Art. 106) whether as finder or owner of property
where treasure is found 35
1. The proceeds, products, fruits, and income 5. Acquired through occupation such as
Art.147 Art.148
1. man and woman
1. man and woman
2. living together as husband and wife
2. living together as husband and wife
40
3. with capacity to marry (Art.5 without any
3. NOT capacitated to marry (Art.35(1)
3. They are dependent for legal support on the Versola v. Mandolaria, (2006)
head of the family The proof that the house is the family home
must be alleged against creditors; Applied 42
Requirements for the sale, alienation, the rule in Art. 160, FC.
III. Proof of Filiation (Arts. 172 and 175 De Jesus v. Syquia, (1933)
By "open and continuous possession of the
(1))
status of a legitimate child" is meant the
(asked in 85, 95, 05 and 06 bar exams) enjoyment by the child of the position and
A. Rules privileges usually attached to the status of a
legitimate child, like bearing the paternal
Legitimate or illegitimate children may prove surname, treatment by the parents and
their filiation in the same way and on the same family of the child as legitimate, constant
evidence. attendance to the child's support and
education, and giving the child the
General Rule: They may only prove their status
reputation of being a child of his parents.
using the following pieces of evidence:
1. Their record of birth appearing in the civil registry. Agustin v. CA, (2005)
2. An admission of his filiation (legitimate or DNA evidence can be used as proof of
illegitimate) by his parent or parents in a public
paternity.
document or a private handwritten instrument and
signed by said parent or parents. (SEMPIO-DIY) De Jesus v. Estate of Decedent Juan Gamboa
3. Proof of open and continuous possession of
Dizon (2001)
status as legitimate or illegitimate child
4. Any other means stated by the rules of court or The due recognition of an illegitimate child in
special laws a record of birth, a will, a statement before a
court of record, or in any authentic writing, is
CIVIL LAW REVIEWER Chapter X. PATERNITY and FILIATION
adopting parents and the adopted child. It B. Who May Be Adopted (Sec. 8)
does not extend to the blood relatives of
either party.) 1. Only a legally-free child may be the subject 49
of inter-country adoption.
4. Legitimate brothers and sisters, whether of B. Order of priority if there are multiple
full or half-blood; recipients (Sempio-Diy)
5. Illegitimate brothers and sisters, EXCEPT 52
when the need for support of one (of age) is 1. Observe order in Article 199 (SDAB);
Administer the property of a child for her/his 3. Childs actual custodian, over 21 years old,
support and education, unless title/transfer unless unfit or unqualified (Art. 216 FC par
provides otherwise (Art. 226 FC par 1) 3) 54
Administer the fruits and income (ONLY) of
Liability of parents for torts committed by St. Marys Academy v. Carpitanos, (2002)
their minor children (Art. 221 FC; Art. 2180 The special parental authority and
CC) responsibility applies to all authorized
Parents and other persons exercising activities, whether inside or outside the
parental authority are civilly liable for the premises of the school, entity or institution.
torts of their unemancipated children:
Provided they are living in their Liability of those exercising special parental
company, and authority over the child (Art. 219 FC)
Subject to the appropriate defenses 1. They are principally and solidarily liable
provided by law, like observing the for damages caused by the acts or missions
diligence of a good father of a family to of the minor child while under their
prevent the damage (Libi v. IAC, 1992) supervision, instruction or custody.
If the minor child is, therefore, not living with HOWEVER, this liability is subject to the
the parents but has been entrusted to the defense that the person exercising parental
care of other persons, or is an intern in authority exercised proper diligence.
school, the liability does not apply. 2. The parents and judicial guardians of the
This liability of the parents and those minor or those exercising substitute parental
exercising parental authority over the child is authority over the minor are subsidiarily
solidary and primary and direct, not liable for said acts and omissions of the
subsidiary minor.
Art. 3, PD603
to be born well
right to a wholesome family life
right to a well-rounded development
right to a balanced diet, adequate clothing,
shelter, proper medical attention, and all
basic physical requirements of a healthy life
raised in an atmosphere of morality and
rectitude
education commensurate to his abilities
full opportunities for a safe and wholesome
recreation
protection against exploitation and other bad
influences
right to the care, assistance and protection
of the State
right to an efficient and honest government
CIVIL LAW REVIEWER Chapter XIV. FUNERALS
SUCCESSION
Table of Contents
SUCCESSION
59 I. Concept of Partition ............................ 83
II. Opening of Succession (Art. 777, CC) 59 II. Effects of Partition............................... 84
III. Kinds of Succession (Art. 778, CC) ....59 III. Nullification of Partition ....................... 84
IV. Heirs ....................................................60 IV. Important Periods in Partition ............. 85
Chapter II. Testamentary Succession ..........61 Chapter VI. Application of the Important
I. Concept ...............................................61 Concepts through Sample Computational
II. Testamentary Capacity .......................61 Problems......................................................... 86
III. Formalities of Wills ..............................61 I. Institution of Heirs ............................... 86
IV. Qualifications of Witnesses to a Notarial II. Legitimes............................................. 86
Will 62 III. Intestate Succession........................... 87
V. Qualifications of Witnesses to a Notarial IV. Accretion ............................................. 87
Will 63 V. Collation .............................................. 88
VI. Institution of Heirs ...............................63
VII. Applicable Principles of Private
International Law .........................................63
VIII. Codicils and Incorporation by
Reference ....................................................64
IX. Revocation of Wills and Testamentary
Dispositions..................................................64
X. Allowance and Disallowance of Wills..65
XI. Substitution of Heirs ............................66
XII. Legitimes.........................................67
XIII. Preterition........................................69
XIV. Reserva Troncal .............................69
XV. Disinheritance .................................70
XVI. Legacies and Devises.....................71
SUCCESSION
Kristine Bongcaron I. DEFINITION OF SUCCESSION
Emil Lunasco II. OPENING OF SUCCESSION
Lead Writers
III. KINDS OF SUCCESSION
Alex Lopez IV. KINDS OF HEIRS 59
Writer
SUCCESSION
CIVIL LAW I. Definition of Succession (Art. 774,
Kristine Bongcaron CC)
Patricia Tobias It is a mode of acquisition
Subject Editors by virtue of which the property, rights and
ACADEMICS COMMITTEE obligations
to the extent of the value of the inheritance,
Kristine Bongcaron of a person
Michelle Dy are transmitted through his death to another
Patrich Leccio
Editors-in-Chief or others
either by his will, or by operation of law
PRINTING & DISTRIBUTION a process of transmission of property,
Kae Guerrero rights, and obligations not extinguished by
death (Balane)
DESIGN & LAYOUT
Pat Hernandez
Viktor Fontanilla II. Opening of Succession (Art. 777, CC)
Rusell Aragones
Romualdo Menzon Jr.
Rania Joya The rights to succession are transmitted
from the moment of the death of the
LECTURES COMMITTEE decedent.
Michelle Arias However, a person may be presumed
Camille Maranan dead for the purpose of opening his
Angela Sandalo succession (Rules on presumptive death
Heads in Arts. 390-391, CC). In this case,
Katz Manzano Mary Rose Beley succession is only of provisional character
Sam Nuez Krizel Malabanan because there is always a chance that the
Arianne Cerezo Marcrese Banaag
Volunteers absentee may still be alive.
60
IV. Heirs
SUCCESSION
Those who are called to the whole or to an
aliquot portion of the inheritance either by
will or by operation of law
SUCCESSION
VI. Institution of Heirs Kinds of Wills
VII. Applicable Principles of Private International 1. Notarial will- Ordinary or attested will (Arts.
Law
804-808, CC)
VIII. Codicils and Incorporation by Reference
IX. Revocation of wills and Testamentary 2. Holographic will (Arts. 804 and 810, CC)
disposition
X. Allowance and Disallowance of wills
XI. Substitution of Heirs Common Requirements for Both Kinds of
XII. Legitimes Wills (Art. 804, CC)
XIII. Preterition 1. Every will must be in writing; and
XIV. Reserva Troncal 2. Executed in the language known to the
XV. Disinheritance testator.
XVI. Legacies and Devices
_____________
SUCCESSION
Jaboneta vs. Gustilo, (1906): Not b. Testator shall personally designate two
whether they actually saw each other persons to read the contents and
sign, but whether they might have seen communicate it to him in some
each other sign had they chosen to do practicable manner.
so considering their mental and physical 2. Blind (Art. 808, CC)
condition and position with relation to a. The will shall be read to the testator
each other at the moment of inscription twice - By one of the subscribing
of each signature. witnesses and by the notary public
acknowledging the will.
5. MARGINAL SIGNATURES: Testator or his b. In the case of Garcia vs. Vasquez
representative shall write his name, and the (1970), the court considered a testator
witnesses shall sign each and every page suffering from Glaucoma as legally
except the last page (Art. 805, CC) blind.
_____________
Exceptions:
When the will consists of only one Requisites for a Holographic Will
page 1. In writing (Art. 804, CC)
Abangan vs. Abangan, (1919): 2. In a language known to the testator (Art.
When the will consists of only two 804, CC)
pages, the first of which contains all 3. Entirely written, dated and signed in the
dispositions and is signed at the hand of the testator himself (Art. 810, CC)
bottom by the testator and the
witnesses, and the second page
contains only the attestation clause IV. Qualifications of Witnesses to a
duly signed at the bottom by the Notarial Will
witnesses.
In the case of Matias vs. Salud (1957), Qualifications (Art. 820, CC)
the use of thumbprint was allowed. 1. Of sound mind
2. Aged 18 years or over
Icasiano vs. Icasiano, (1964): The 3. Not blind, deaf or dumb
inadvertent failure of one witness to affix 4. Able to read and write
his signature to one page of a
testament, due to the simultaneous Disqualifications (Art. 821, CC)
lifting of two pages in the course of 1. Person not domiciled in the Philippines
signing, is not per se sufficient to justify 2. Those who have been convicted of
denial of probate. falsification, perjury, or false testimony.
Notarial Will v. Holographic Will A voluntary heir who dies before the testator
Notarial Will Holographic WIll
or proves to be incapacitated transmits 63
nothing to his heirs (Art. 851, CC)
SUCCESSION
NOTARIAL codicil ONLY Notarial Codicil; or
Holographic Codicil; or
Additional dispositions Three principles in institution of heirs
below the signature, 1. Equality of heirs (Art. 846, CC)
dated and signed in the a. Heirs instituted without designation of
hand of the testator. shares shall inherit in equal parts
b. NOTE: This applies even to institution of
Codicil (Art. 825, CC)- it is a supplement full and half-blood siblings.
or addition to a will, made AFTER the
execution and annexed to be taken as 2. Individuality of institution (Art. 847, CC)
part thereof, by which any disposition Example: I designate A, B, and the
made in the original is explained, children of C. Unless otherwise stated, if
added to, or altered. C has two children, the estate will be
distributed in four equal parts.
Effect of insertion written by another person 3. Simultaneity of institution (Art. 849, CC)
on the validity of a holographic will) Example: I designate my brother A and
his children. A and his children will
When made Effect inherit at the same time, unless
After the execution, Insertion considered not otherwise expressly stated that they will
without consent of written. Validity cannot be inherit successively.
testator defeated by the malice or
caprice of a third person
Institution based on a false cause (Art. 850,
After execution, with Will is valid, insertion is
consent void.
CC)
After execution, validated Insertion becomes part of GENERAL RULE EXCEPTION
by testators signature the will. Entire will False cause is If the testator would
becomes void because it considered not written not have made the
is not wholly written by and the institution will institution had he
the testator. take effect known the false cause,
Contemporaneous to the Will is void because it is the institution would
execution of the will not written entirely by the NOT take effect
testator
Example: I designate A to half of the
estate ONLY because he is the husband
VI. Institution of Heirs of my daughter. Note that the reliance
(Asked in 94, 05, 06, and 08) on the false cause must be clear and
unmistakable.
Definition (Art. 841, CC)
It is an act by virtue of which a testator
designates in his will the persons who VII. Applicable Principles of Private
are to succeed him. International Law
Requisites for a valid institution
Governing Law As to Time of Execution of
1. Testator has capacity to make the
Will
institution
2. The institution is made in a will
Aspect of the Will Governing Law
3. Institution is made personally by the Formal Validity Law in force at the time
testator and is not left to a third person the will was made
4. Persons instituted must be identified or Intrinsic Validity Law of decedents
identifiable nationality at the time of
5. There must be no preterition of compulsory his death (Art. 16, CC)
heirs
CIVIL LAW REVIEWER Chapter II. TESTAMENTARY SUCCESSION
SUCCESSION
Outside of the 1. Law of the country
Philippines in which it is executed Reference
Filipino (Art. 17, CC); or
2. Philippine Law (Art. Codicil (Arts. 825-826, CC)
815, CC)
1. It is a supplement or addition to a will,
Alien Philippines 1. Philippine Law; or
2. Law of the country
2. made after the execution of a will,
of which testator is a 3. and annexed to be taken as a part of the
citizen or subject (Art. will,
817, CC) 4. by which any disposition made in the original
Outside of the 1. Law of the place will is explained, added to, or altered.
Philippines where the will is 5. in order that it may be effective, it shall be
executed (Art. 17, executed as in the case of a will.
CC); or
2. Law of the place Incorporation by Reference; Requisites (Art,
where the testator
827, CC)
resides; or
3. Law of the 1. The document or paper referred to in the will
testators country; or must be in existence at the time of the
4. Philippine Law (Art. execution of the will.
816, CC) 2. The will must clearly describe and identify
the same, stating among other things the
Aspects of the Will Governed by the National number of pages thereof.
Law of the Decedent 3. It must be identified by clear and
1. Order of succession; satisfactory proof as the document or paper
2. Amount of successional rights; referred to therein; and
3. Intrinsic validity of testamentary 4. It must be signed by the testator and the
provisions; and witnesses on each and every page,
4. Capacity to succeed. except in case of voluminous books of
account or inventories.
Joint Will
1. A single testamentary instrument,
2. Which contains the wills of two or more IX. Revocation of Wills and
persons, Testamentary Dispositions
3. Jointly executed by them,
4. Either for their reciprocal benefit or for the
benefit of a third person. Modes of Revocation (Art. 830, CC)
1. By implication of law; or
Mutual Wills 2. By the execution of a will, codicil or other
1. Executed pursuant to an agreement writing executed as provided in the case of
between two or more persons, wills; or
2. Jointly executed by them, 3. By burning, tearing, canceling, or
3. Either for their reciprocal benefit or for the obliterating the will with the intention of
benefit of a third person. revoking it, by the testator himself, or by
some other person in his presence, and
Reciprocal Wills by his express direction.
1. Testators name each other as beneficiaries
in their own wills, Note: The act contemplating revocation must be
2. under similar testamentary plans done at any time before the death of the
testator. The right of revocation cannot be
Note: A will that is both joint and mutual is one waived or restricted. (Art. 828, CC)
executed jointly by two or more persons,
the provisions of which are reciprocal and
which shows on its face the devises are
CIVIL LAW REVIEWER Chapter II. TESTAMENTARY SUCCESSION
Law Governing Revocation (Art. 829, CC) extrinsic validity of such wills may be
examined.
Place of Testators Governing
Revocation Domicile Law Exceptions:
Philippines, or Philippine Law a. Acain vs Diongson (1987): When the will
Philippines some other is intrinsically void, on its face such that 65
country to rule on its formal validity would be a
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Philippines Philippine Law futile exercise
1. Law of the b. Valera vs. Inserto, (1987): Claimants are
place where all heirs, and they consent, either,
the will was expressly or impliedly, to the submission
Foreign made; or of the question of intrinsic validity to the
Country 2. Law of the court.
Outside the place in which c. Pastor vs. CA, (1983): Probate court
Philippines the testator may pass upon the title thereto, but such
had his determination is provisional and not
domicile at the conclusive, and is subject to the final
time of decision in a separate action to resolve
revocation title.
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XI. Substitution of Heirs fideicommissary of the second heir. (Art.
863, CC)
Definition of Substitution (Art. 857, CC)
1. It is the appointment of another heir, Requisites of a Fideicommisary Substitution
2. So that he may enter into the inheritance in (Arts. 863-865, CC)
default of the heir originally instituted. 1. A Fiduciary or First Heir instituted is
entrusted with the obligation to preserve
Classes of Substitution and to transmit to a Fideicommissary
1. Simple or Common: The testator may Substitute or Second Heir the whole or part
designate one or more persons to substitute of the inheritance.
the heir/s instituted in case the heirs should: 2. The substitution must not go beyond one
a. die before him (predecease), degree from the heir originally instituted.
b. should not wish to accept the 3. The Fiduciary Heir and the
inheritance (repudiation), or Fideicommissary are living at the time of
c. should be incapacitated to accept the the death of the testator.
inheritance (incapacitated). (Art. 859, 4. The fideicommissary substitution must be
CC) expressly made.
2. Brief or Compendious (Art. 860, CC) 5. The fideicommissary substitution is imposed
a. Brief Two or more persons were on the free portion of the estate and
designated by the testator to substitute never on the legitime
for only one heir
b. Compendious One person is Note:
designated to take the place of two or a. Palacios vs. Ramirez (1982): Degree
more heirs refers to degree of relationship.
3. Reciprocal b. PCIB vs. Escolin (1974): In the absence
If the heirs instituted in unequal shares of an obligation on the part of the first
should be reciprocally substituted, the heir to preserve the property for the
substitute shall acquire the share of the second heir, there is no fideicommissary
heir who dies, renounces, or is substitution.
incapacitated, unless it clearly appears
that the intention of the testator was Effects of predecease of the first
otherwise. If there is more than one heir/fiduciary or the second
substitute, they shall have the same heir/fideicommisary
share in the substitution as the
institution. Legend:
Example (only 1 substitute): If two heirs T Testator
are reciprocally substituted, then if one FH First Heir / Fiduciary
of them dies before the testator dies, SH Second Heir / Fideicommissary
renounces, or turns out to be Substitute
incapacitated, the other will get his
share, regardless of whether or not their Situation 1: If the following is the sequence
shares are equal. of death of the three parties: FH SH T,
Example (more than 1 substitute): A is who will inherit? The legal heirs. There is
instituted to 1/3, B to 1/6, and C to . If no fideicommissary substitution because FH
C dies before the testator, renounces or and SH are not living at the time of the
turns out to be incapacitated, then the testators death. (Art 863, CC)
other two will get his shares in the same
proportion as in the institution. A will get Situation 2: T SH FH, who will inherit?
twice as much as B (because his share The SH and his heirs under Art. 866, CC.
of 1/3 in the institution is twice the size This is because the SH passes his rights to
of Bs share of 1/6) his own heirs when he dies before FH.
CIVIL LAW REVIEWER Chapter II. TESTAMENTARY SUCCESSION
SUCCESSION
Those in the direct ascending line
Definition of Legitime (Art. 886, CC)
shall, in turn, exclude those in the
1. It is that part of the testators property which
collateral line.
he cannot dispose of,
b. Rule of Proximity (Art 926, CC)
2. Because the law has reserved it for his
The relative nearest in degree
compulsory heirs.
excludes the farther one
c. Right or representation ad infinitum in
Classes of Compulsory Heirs (Art. 887, CC)
case of predecease, incapacity, or
1. Primary: Those who have precedence
disinheritance (Art 972 and 992, CC)
over and exclude other compulsory heirs:
For decedents who are Legitimate
Legitimate Children and Legitimate
Children, only the Legitimate
Descendants with respect to their
Descendants are entitled to right of
Legitimate Parents and Ascendants
representation.
2. Secondary: Those who succeed only in
For decedents who are Illegitimate
the absence of the Primary compulsory
Children, both the Legitimate and
heirs:
the Illegitimate Descendants can
a. Legitimate Parents and Legitimate
represent, only with respect to the
Ascendants, with respect to their
decedents illegitimate parents.
Legitimate Children and Descendants.
d. If all the Legitimate Children
(They will inherit only in default of
repudiate their legitime, the next
legitimate children and their
generation of Legitimate Descendants
descendants)
may succeed in their own right.
b. Illegitimate Parents with respect to their
Illegitimate Children. (They will inherit
2. Direct Ascending Line
only in default of the illegitimate and
a. Rule of division between lines
legitimate children and their respective
The father and the mother shall
descendants). Note that other
illegitimate ascendants are not included. inherit equally if both living. One
3. Concurring: Those who succeed together succeeds to the entire estate of the
with the primary or the secondary child if the other is dead. (Art. 986,
compulsory heirs: CC)
a. Widow or Widower / Surviving Spouse In default of the mother and the
(Legitimate) father, the ascendants nearest in
b. Illegitimate Children and Illegitimate
degree will inherit. (Art. 987)
Descendants
If there are more than one relative of
If the testator is a If the testator is an the same degree but of different
LEGITIMATE CHILD: ILLEGITIMATE CHILD: lines, one half will go to the paternal
1. LC and descendants 1. LC and descendants ascendants and the other half to the
2. In default of No. 1, LP 2. ILC and descendants
and ascendants maternal ascendants. (Art. 987)
3. SS 3. In default of Nos. 1-2. b. Rule of equal division
ILP only The relatives who are in the same
4. IC and descendants 4. SS degree shall inherit in equal shares.
(Art 987)
Legend:
LC Legitimate Children
ILC Illegitimate Children
SS Surviving Spouse
LP Legitimate Parents
ILP Illegitimate Parents
CIVIL LAW REVIEWER Chapter II. TESTAMENTARY SUCCESSION
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3 LC, SS (divided by # Same as
of children) share of 1
LC
4 LC, ILC share of 1
LC
5 1 LC, SS, ILC share of 1
(preferred) LC
6 2 or more LC, SS, (divided by # Same as share of 1
ILC of children) share of 1 LC
LC
7 LP alone
8 LP, ILC
9 LP, SS
1/8
10 LP, SS, ILC
11 ILC alone (divided
by # of
children)
1/3 1/3
12 ILC, SS (divided
by # of
children)
1/3
13 SS alone or if
marriage in
articulo
mortis
14 ILP alone
15 ILP, SS
1/3 1/3 1/3
16 Adopter, ILC, SS (adopter)
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(Reservatarios) belonging to the line from
compulsory heir.
which said property came.
3. 3. The compulsory heir omitted must be of
___________
the direct line.
4. The omitted compulsory heir must be living
C. Reserva Minima v. Reserva Maxima
at the time of the testators death or must
at least have been conceived before the
Situation
testators death.
1. The prepositus acquired property
B. Effects of Preterition (Art. 854, CC) gratuitously from an ascendant or a brother
1. The institution of the heir is annulled. or sister
2. Devises and legacies shall remain valid as 2. In his will, he institutes as his heir his
long as they are not inofficious. ascendant (who is also a compulsory heir)
3. If the omitted compulsory heir should die such that the ascendant receives half of the
before the testator, the institution shall be estate by operation of law as legitime and
effective, without prejudice to the right of
representation. the other half by testamentary disposition
Neri vs. Akutin (1941): When there are
no devises and legacies, preterition will Problem
result in the annulment of the will and Will the property acquired gratuitiously by
give rise to intestate succession. the prepositus from the source be treated as
acquired by the ascendant-heir by operation
XIV. Reserva Troncal of law (legitime) and therefore reservable or
(Asked in 79, 82, 85, and 87) by testamentary disposition?
A. Concept of Reserva Troncal (Art. 891,
CC) Two Views
1. Reserva Maxima: The entire property will be
Situation considered acquired as legitime and
1. A descendant (prepositus) inherits or therefore wholly reservable
acquires property from an ascendant 2. Reserva Minima: One half is reservable, the
(source) by gratiutious title or from a brother
other half is not subject to reserva troncal
or sister
2. The same property is inherited by another (Tolentino, p. 284)
ascendant (reservista) or is otherwise ___________
acquired by him by operation of law from the
said descendant (prepositus) D. Extinguishment of the Reserva
(Tolentino, p. 300-305) (LDD-RRP)
Then an obligation arises 1. Loss of the reservable property
The said ascendant (reservista) must 2. Death of the reservista
reserve the property for the benefit of the 3. Death of all the relatives within the third
relatives of the deceased descendant within degree belonging to the line from which the
the third civil degree and who belong to the
property came
line from which the said property came
(reservatorios). 4. Renunciation by the reservatorios
___________ 5. Registration of the reservable property
under the Torrens system as free
B. Requisites for Reserva Troncal 6. Prescription, when the reservista holds the
(Chua vs. CFI and Gonzales vs. CFI) property adversely against the reservatorios,
1. That the property was acquired by a as free from reservation
descendant (Prepositus) from an ascendant
CIVIL LAW REVIEWER Chapter II. TESTAMENTARY SUCCESSION
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must be proved by the interested heir if the
legitime.
person should deny it.
6. It must be unconditional.
B. Requisites of a Valid Disinheritance
7. It must be total.
1. Heir disinherited must be designated by
name or in such a manner as to leave no
_________________________________________________________________________________
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It is bequeathed It is devised
STATUS OF EFFECT ON THE
Persons Charged With the Duty to Give PROPERTY GIVEN LEGACY/DEVISE
Legacies and Devises in a Will BY LEGACY/DEVISE
1. Compulsory heir, provided, their legitimes The thing already Ineffective
are not impaired (Art. 925, CC) belongs to the legatee
2. Voluntary heir or devisee at the time
3. Legatee or devisee can be charged with of the execution of the
the duty of giving a sub-legacy or sub- will (Art. 932, CC)
devisee but only to the extent of the value of The thing is subject to Valid only as to the
the legacy or devise given him (Art. 925, an encumbrance or interest or
CC) interest of another encumbrance
4. The estate represented by the executor person (Art. 932, CC)
or administrator, if no one is charged with Legatee or devisee Ineffective
this duty to pay or deliver the legacy or subsequently alienates
devise in the will the thing (Art. 933,CC)
a. If there is an administration proceeding, After alienating the Ineffective
it constitutes a charge upon the estate. thing, the legatee or
b. If there is no administration proceeding, devisee subsequently
it is a charge upon the heirs. reacquires it
gratuitously (Art. 933,
CC)
Validity and Effect of Legacy or Devise After alienating the Legatee or devisee
Legacy or devise of a thing belonging to thing, the legatee or can demand
another (Art. 930, CC) devisee acquires it by reimbursement from
onerous title (Art. 933, the heir or estate
STATUS OF PROPERTY EFFECT ON CC)
GIVEN BY THE LEGACY/
LEGACY/DEVISE DEVISE
Testator erroneously Void
believed that the property
CIVIL LAW REVIEWER Chapter II. TESTAMENTARY SUCCESSION
SUCCESSION
7. Legacy of education (Art 944, CC)
8. Legacy of support (Art 944, CC)
Order of Payment In Case the Estate Is Not Sufficient to Cover All the Legacies and Devises
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Preferential legacies or devises Legacy for Support
All Other legacies or devises pro rata Legacy for Education
Legacy/devise of Specific, determinate thing
which forms a part of the estate
All Others pro rata
Application: Application:
When the reduction is necessary to When there are no compulsory heirs and the
preserve the legitime of compulsory entire estate is distributed by the testator as
heirs from impairment whether there are legacies or devises; or
donations inter vivos or not; or When there are compulsory heirs but their
When, although, the legitime has been legitime has already been provided for by the
preserved by the testator himself there are testator and there are no donations inter
donations inter vivos. vivos.
NOTE: NOTE:
Art. 911, CC governs when there is a conflict Art. 950, CC governs when the question of
between compulsory heirs and the devisees reduction is exclusively among legatees and
and legatees. devisees themselves.
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V. The right of Representation vacancy is caused by predecease,
VI. Order of Legal or Intestate Succession incapacity, or disinheritance.
VII. Concurrence in Legal or Intestate Succession c. The right of Accretion applies to the
VIII. Outline of Intestate Shares free portion when the requisites in Art.
IX. Order of Concurrence in the case of an 1016 are present.
Adopted Child d. If there is no substitute, and the right of
Representation or Accretion are not
The Civil Code does not state a definition of proper, the rules on Intestate
legal or intestate succession. Art. 960 only succession shall apply.
enumerates the instances when legal
succession takes place. This enumeration is not
exclusive, as there are other instances where II. The Intestate or Legal Heirs
intestacy may occur, as listed below.
1. Relatives
a. Legitimate ascendants
b. Illegitimate parents
I. Causes for Legal or Intestate c. Legitimate children
Succession d. Illegitimate children
1. If a person dies without a will (Art 960[1]) e. Surviving Spouse
2. If a person dies with a void will (Art 960[1]) f. Brothers, sisters, nephews and nieces
3. If a person dies with a will which has (BSNN)
subsequently lost its validity (Art 960[1]) g. Other collateral relatives
4. When the will does not institute an heir (Art 2. Surviving spouse
960[2]) 3. State (through escheat proceedings)
5. When the will does not dispose of all the
property belonging to the testator. Legal
succession shall take place only with III. Fundamental Underlying Principles in
respect to the property which the testator Legal or Intestate Succession
has not disposed (Art 960[2])
6. If the suspensive condition attached to the
institution of the heir does not happen or is Rule of Preference between Lines
not fulfilled (Art 960[3]) 1. Those in the direct descending line shall
7. If the heir dies before the testator (Art exclude those in the direct ascending and
960[3]) collateral lines;
8. If the heir repudiates the inheritance, there 2. Those in the direct ascending line shall, in
being no substitution, and no right of turn, exclude those in the collateral line.
accretion takes place (Art 960[3])
9. When the heir instituted is incapable of Rule of Proximity
succeeding, except in cases provided in The relative nearest in degree excludes the
the Civil Code (Art 960[4]) farther one. (Art. 962, par.1 CC), saving the right
10. Preterition Intestacy may be total or partial of representation when it properly takes place.
depending on whether or not there are
legacies or devises (Balane, p.426) Rule of Equal Division
11. Upon the expiration of a resolutory term 1. The relatives who are in the same degree
attached to the institution of heir (Balane, shall inherit in equal shares. (Arts. 962
p.426) par.2, 987 and 1006, CC)
12. Upon fulfillment if a resolutory condition 2. Exceptions: (Balane pp.427-428)
attached to the institution of heir, rendering a. the rule of preference of lines
the will ineffective (Balane, p.426) b. the distinction between legitimate and
illegitimate filiation (the ratio under
present law is 2:1) (Art 983, in relation to
Article 895 as amended by Article 176
FC)
CIVIL LAW REVIEWER Chapter III. INTESTATE SUCCESSION
c. the rule of division by line in the In adoption, the legal filiation is personal and
ascending line Article 987 par.2) exists only between the adopter and the
d. the distinction between full-blood and adopted. The adopted is deemed a
half-blood relationship among brothers legitimate child of the adopter, but still
and sisters, as well as nephews and remains as an intestate heir of his natural
nieces. (Art 1006 and 1008) parents and other blood relatives. (Art. 189, 75
e. representation FC)
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Rule of Barrier between the legitimate family
and the illegitimate family (the iron-curtain V. The Right of Representation (Art. 970,
rule) CC)
The illegitimate family cannot inherit by intestate
succession from the legitimate family and vice- (Asked in 77, 82, 85, 88, 92, 97, and 07)
versa. (Art. 992, CC)
It is a right created by fiction of law;
Rule of Double Share for full blood By virtue of which the representative is
collaterals raised to the place and degree of the person
When full and half-blood brothers or sisters, represented;
nephews or nieces, survive, the full blood shall And acquires the rights which the latter
take a portion in the inheritance double that of would have if he were living or if he would
the half-blood. (Arts. 895 and 983, CC) have inherited.
The representative is called to the must be a legal heir of both the person he is
succession by the law and not by the person representing and the decedent.
represented. The representative does not
succeed the person represented but the one Thus, illegitimate children can represent
whom the person represented would have illegitimate children parents in inheritance
succeeded. (Art. 971, CC) from illegitimate grandparents. (*Rationale: 76
Iron-curtain rule under Art. 992, CC)
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General Rule
Grandchildren inherit from the On the other hand, a legitimate child may
grandparents by right of represent either a legitimate or illegitimate
representation, if proper. parent in the inheritance of either a
legitimate or illegitimate grandparents. (Arts.
Exception 902, 989,990)
Whenever all the children repudiate,
the grandchildren inherit in their own Representation in Adoption (Asked in 94,
right because representation is not 04, and 07)
proper. (Art 969, CC) If the adopting parent should die before
the adopted child, the later cannot
Right of representation in the collateral line represent the former in the inheritance
is only possible in INTESTATE succession. of the parents or ascendants of the
It cannot take place in testamentary adopter. The adopted child is not related
succession. to the deceased in that case, because
filiation created by fiction of law is
In determining whether or not representation exclusively between the adopter and the
is proper, apply the DOUBLE HEIRSHIP adopted. (TOLENTINO pp. 448-449)
TEST (Art. 973, CC): the representative
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and Descendants Collaterals and LC and
State LP
LP and Collaterals and LC ILC and
Legitimate ascendants State SS
ILP Collaterals and LC and ILC SS
State
SS Collaterals other than No one LC, ILC, LP, ILP
siblings, nephews and nieces Siblings
Nephews
Nieces
Siblings, All other collaterals and LC, ILC, LP, ILP SS
Nephews State
Nieces
th
Other collaterals within 5 Collateral more remote in LC, ILC, LP, ILP and Collaterals in the same
degree degree and SS degree
State
State No one Everyone No one
11. Illegitimate children and surviving Divide the entire estate per capita, observing
spouse the 2 is to 1 ratio. (Arts. 975 and 1008, CC)
Illegitimate children get of the estate; the
surviving spouse gets the other . (Art. 998, 21. Other collaterals (Arts. 1009 and 1010)
CC) a. Divide entire estate per capita.
b. Collateral relatives must be with the 5
th
78
12. Surviving spouse only degree of consanguinity.
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Entire estate goes to the surviving spouse. c. Note: the nearer relative excludes the
(Art. 994/995, CC) more remote relatives.
SUCCESSION
IV. Collation
the legitimes. (Arts. 1021 and 1018, CC)
____________________________________________________________________________________
SUCCESSION
attempted against their virtue;
succession opens; (Art 1025) and
b. Any person who has been convicted of
He must not be incapacitated or disqualified
an attempt against the life of the
by law to succeed. (Art 1024, par.1)
testator, his or her spouse,
descendants, or ascendants;
B. Who Are Incapable of Succeeding
c. Any person who has accused the
testator of a crime for which the law
BASED ON UNDUE INFLUENCE OR
prescribes imprisonment for six years or
INTEREST (Art. 1027, CC) PIGRAP
more, if the accusation has been found
Priest who heard the last confession of
groundless;
the testator during his last illness, or the
d. Any heir of full age who, having
minister of the gospel who extended
knowledge of the violent death of the
spiritual aid to him during the same
testator, should fail to report it to an
period;
officer of the law within a month, unless
Individuals, associations and
the authorities have already taken
corporations not permitted by law to
action; this prohibition shall not apply to
inherit;
cases wherein, according to law, there is
Guardian with respect to testamentary
no obligation to make an accusation;
dispositions given by a ward in his favor
e. Any person convicted of adultery or
before the final accounts of the
concubinage with the spouse of the
guardianship have been approved, even
testator;
if the testator should die after the
f. Any person who by fraud, violence,
approval thereof; except if the guardian
intimidation, or undue influence should
is his ascendant, descendant, brother,
cause the testator to make a will or to
sister, or spouse;
change one already made;
Relatives of the priest or minister of the
g. Any person who by the same means
gospel within the fourth degree, the
prevents another from making a will, or
church, order, chapter, community,
from revoking one already made, or who
organization, or institution to which such
supplants, conceals, or alters the latter's
priest or minister may belong;
will;
Attesting witness to the execution of a
h. Any person who falsifies or forges a
will, the spouse, parents, or children, or
supposed will of the decedent.
any one claiming under such witness,
spouse, parents, or children;
C. Pardon of Acts of Unworthiness
Physician, surgeon, nurse, health officer
or druggist who took care of the testator
EXPRESS IMPLIED
during his last illness. Made by the execution of Effected when the
a document or any testator makes a will
BASED ON MORALITY OR PUBLIC writing in which the instituting the unworthy
POLICY (Arts. 739 and 1028, CC) decedent condones the heir with knowledge of
Those made in favor of a person with cause of incapacity the cause of incapacity
whom the testator was guilty of adultery Cannot be revoked Revoked when the
or concubinage at the time of the testator revokes the will
making of the will. or the institution
Those made in consideration of a crime
of which both the testator and the
beneficiary have been found guilty.
Those made in favor of a public officer
or his spouse, descendants and
ascendants, by reason of his public
office.
CIVIL LAW REVIEWER Chapter IV. PROVISIONS common to TESTAMENTARY and INTESTATE SUCCESSION
SUCCESSION
2. Irrevocable except if there is vitiation of Heirs in Two Capacities (Art. 1055, CC)
consent or an unknown will appears (Art 1. If a person is called to the same inheritance
1056, CC) as an heir by will and by law and he
3. Retroactive (Art 1042, CC) repudiates the inheritance in his capacity as
a testamentary heir, he will be considered to
Requisites (Art. 1043, CC) have also repudiated the inheritance as a
1. Certainty of death of the decedent legal heir.
2. Certainty of the right to the inheritance 2. If he repudiates it as a legal heir, without his
being a testamentary heir, he may still
Acceptance vs. Repudiation accept it in the latter capacity.
1. Acceptance involves the confirmation of
transmission of successional rights, while
repudiation renders such transmission
ineffective. IV. Collation (Arts. 1061-1077, CC)
2. Repudiation is equivalent to an act of (Asked in 77, 78, 79, and 93)
disposition and alienation.
3. The publicity required for repudiation is A. Concept of Collation
necessary for the protection of other heirs To collate is to bring back or to return to the
and also of creditors. hereditary mass in fact or by fiction property
which came from the estate of the decedent,
Forms of Acceptance (Arts. 1049 1050, during his lifetime by donation or other
CC) gratuitous title but which the law considers
1. Express Acceptance one made in a as an advance from the inheritance. (Art
public or private document. (Art. 1049 par. 1061, CC)
1) It is the act by virtue of which, the
2. Tacit Acceptance one resulting from acts compulsory heir who concurs with other
by which the intention to accept is compulsory heirs in the inheritance bring
necessarily implied or from acts which one back to the common hereditary mass the
would have no right to do except in the property which they may have received from
capacity of an heir. the testator so that a division may be
effected according to law and the will of the
Examples: (Art. 1050, CC) testator.
a. when the heir sells, donates or assigns In reducing inofficious donations, the last to
his right be donated should be the first to be
b. when the heir demands partition of the reduced.
inheritance RATIONALE FOR COLLATION: If
c. when the heir alienates some objects of donations inter vivos will not be collated,
the inheritance, etc. then the rule on legitimes shall be
3. Implied acceptance - Within thirty days circumvented or disregarded.
after the court has issued an order for the
distribution of the estate in accordance with B. Operations Related to Collation
the Rules of Court, the heirs, devisees and Collation adding to the mass of the
legatees shall signify to the court having hereditary estate the value of the donation
jurisdiction whether they accept or repudiate or gratuitous disposition.
the inheritance; if they do not do so within Imputing or Charging crediting the
that time, they are deemed to have accepted donation as an advance on the legitime (if
the inheritance. (Art 1057, CC) the donee is a compulsory heir) or on the
free portion (if the donee is a stranger).
Forms of Repudiation (Art. 1051, CC) (BALANE p 522)
1. in a public instrument acknowledged before Reduction determining to what extent the
a notary public; or donation will remain and to what extent it is
excessive or inofficious.
CIVIL LAW REVIEWER Chapter IV. PROVISIONS common to TESTAMENTARY and INTESTATE SUCCESSION
SUCCESSION
when the testator should have so and outfit, except when they exceed
expressly provided (Art. 1062, CC) 1/10 of the sum disposable by will. (Art.
when the compulsory heir should have 1070, CC)
repudiated his inheritance (Art 1062, Neither shall donations to the spouse of
CC) the child be brought to collation; but if
Grandchildren who survive with their uncles, they have been given by the parent to
aunts, or first cousins and inherit by right of the spouses jointly, the child shall be
representation (Art 1064, CC) obliged to bring to collation one-half of
the thing donated. (Art. 1066, CC)
*Note: Grandchildren may inherit from their
grandparent in their own right, i.e., as heirs Note: Parents are not obliged to bring to
next in degree, and not by right of collation in the inheritance of their
representation if their parent repudiates the ascendants any property which may have
inheritance of the grandparent, as no living been donated by the latter to their children.
person can be represented except in cases (Art 1065, CC)
of disinheritance and incapacity. In this
case, the grandchildren are not obliged to
bring to collation what their parent has
received gratuitously from their grandparent.
D. What to Collate
Any property or right received by gratuitous
title during the testators lifetime (Art 1061,
CC)
All that they may have received from the
decedent during his lifetime. (Art 1061, CC)
Expenses incurred by the parents in giving
their children a professional, vocational or
other career shall not be brought to collation
unless the parents so provide, or unless
they impair the legitime; but when their
collation is required, the sum which the child
would have spent if he had lived in the
house and company of his parents shall be
deducted therefrom. (Art 1068, CC)
Any sums paid by a parent in satisfaction of
the debts of his children, election expenses,
fines, and similar expenses shall be brought
to collation. (Art 1069, CC)
SUCCESSION
2. Voluntary heir upon fulfillment of condition if
any (Art 1084, CC)
I. Concept of Partition 3. Legatee or devisee
4. Any person who has acquired interest in the
estate
Separate, Divide, Assign. Partition is the
separation, division and assignment of a
When Partition Cannot Be Demanded
thing held in common among those to whom
1. When expressly Prohibited by the testator
it may belong. The thing itself or its value
for a period not exceeding 20 years (Art
may be divided. (Art. 1079, CC)
1083, CC)
Owned in common. Before partition, the
2. When the co-heirs Agreed that the estate
whole estate of the decedent is owned in
shall not be divided for a period not
common by the heirs. (Art 1078, CC)
exceeding 10 years, renewable for another
Thing or value may be divided. (Art 1079)
10 years
Acts deemed partition. Every act which is
3. When Prohibited by law
intended to put an end to indivision among
4. When to partition the estate would render it
heirs and legatees or devisees is deemed a
unserviceable for the use for which it is
parition, although it should purport to be a
intended
sale, an exchange, a compromise, or any
other transaction. (Art 1082, CC) Prohibition to Partition
1. The prohibition to partition for a period not
A void partition may be valid if
exceeding 20 years can be imposed on the
1. the will was in fact a partition
legitime.
2. the beneficiaries of the void will were legal
2. If the prohibition to the partition is for more
heirs
than 20 years, the excess is void.
3. Even if a prohibition is imposed, the heirs by
The titles of acquisition or ownership of each
mutual agreement can still make the
property shall be delivered to the co-heir to
partition.
whom said property has been adjudicated.
(Art. 1089 CC)
Effects of Inclusion of Intruder in Partition
(Art 1108, CC)
Kinds of Partition
1. Between a true heir and several mistaken
1. Judicial v. Extrajudicial Partition
heirs partition is void.
a. Judicial Partition done by Court
2. Between several true heirs and a mistaken
pursuant to an Order of Distribution
heir transmission to mistaken heir is void
which may or may not be based on a
3. Through error or mistake, share of true
project of partition.
heir is allotted to mistaken heir partition
b. Extra-judicial partition made by the
shall not be rescinded unless there is bad
decedent himself by an act inter vivos or
faith or fraud on the part of the other
by will or by a third person entrusted by
persons interested, but the latter shall be
the decedent or by the heirs themselves.
proportionately obliged to pay the true heir
(PARAS)
of his share. The partition with respect to the
2. Partition Inter Vivos (Asked in 85)
mistaken heir is void. (Sempio-Dy)
It is one that merely allocates specific
items or pieces of property on the basis
Right of Redemption in Partition
of the pro-indiviso shares fixed by law or
Should any of the heirs sell his hereditary
given under the will to heirs or
rights to a stranger before the partition, any
successors. (Art. 1080, cc)
or all of the co-heirs may be subrogated to
the rights of the purchaser by reimbursing
Who May Effect Partition
him for the price of the sale, provided they
1. The Decedent, during his lifetime by an act
do so within the period of one month from
inter vivos or by will (Art.1080, CC)
CIVIL LAW REVIEWER Chapter V. PARTITION and DISTRIBUTION of ESTATE
the time they were notified in writing of the When its has been so expressly stipulated in
sale by the vendor (Art. 1088, CC) the agreement of partition
Strangers those who are not heirs on the Unless there has been bad faith
succession. When the eviction is due to a cause
subsequent to the partition, or has been
caused by the fault of the distributee of the 84
II. Effects of Partition property. (Art. 1096, CC)
SUCCESSION
Effect
A partition legally made confers upon each heir III. Nullification of Partition
the exclusive ownership of the property (Asked in 90)
adjudicated to him (Art 1091, CC)
Causes for Rescission or Annulment
Warranty 1. A partition may be rescinded or annulled for
After the partition has been made, the co- the same causes as contracts. (Art 1097,
heirs shall be reciprocally bound to warrant CC)
the title to, and the quality of, each property 2. A partition, judicial or extra-judicial, may also
adjudicated (Art. 1092 CC) be rescinded on account of lesion, when any
The reciprocal obligation of warranty one of the co-heirs received things whose
referred to in the preceding article shall be value is less by at least one-fourth, than the
proportionate to the respective share to which he is entitled, considering the
hereditary shares of the co-heirs; value of the things at the time they were
But if any one of them should be adjudicated (Art. 1098, CC)
insolvent, the other co-heirs shall be This article applies only to cases of
liable for his part in the same proportion, partition among-coheirs
deducting the part corresponding to the Lesion is the injury suffered in
one who should be indemnified. consequence of inequality of situation by
Those who pay for the insolvent heir one party who does not receive the full
shall have a right of action against him equivalent for what she gives in a sale
for reimbursement, should his financial or any commutative contract
condition improve (Art. 1093 CC) 3. The partition made by the testator cannot be
An action to enforce the warranty among the impugned on the ground of lesion, except
co-heirs must be brought within ten years when the legitime of the compulsory heirs is
from the date the right of action accrues. thereby prejudiced, or when it appears or
(Art. 1094 CC) may be reasonably be presumed, that the
If a credit should be assigned as collectible, intention of the testator was otherwise. (Art.
the co-heirs shall not be liable for the 1099, CC)
subsequent insolvency of the debtor of the 4. Preterition of a compulsory heir in the
estate, but only for his insolvency at the partition (Art 1104, CC):
time the partition is made. (Art 1095, CC) Partition shall not be rescinded unless
The warranty of the solvency of the debtor bad faith or fraud on the part of other
can only be enforced during the five years heirs is proved.
following the partition. The culpable heirs shall share in the
Co-heirs do not warrant bad debts, if so damages of the prejudiced compulsory
known to, and accepted by the distributee. heir proportionately.
But if such debts are not assigned to a 5. A partition which includes a person believed
co-heir, and should be collected, in to be an heir, but who is not, shall be void
whole or in part, the amount collected only with respect to such person. (Art.
shall be distributed proportionately 1105 CC
among the heirs. (Art. 1095 CC) ___________
SUCCESSION
neither those who have not been prejudiced 5 years from To claim property escheated to
nor those who have not received more than delivery to the the State
their just share (Art. 1101, CC) State
1 month To report knowledge of violent
death of decedent lest he be
An heir who has alienated the whole or a
considered unworthy
considerable part of the real property 5 years from the Action for declaration of
adjudicated to him cannot maintain an action time disqualified incapacity & for recovery of the
for rescission on the ground of lesion, but he person took inheritance, devise or legacy
shall have a right to be indemnified in cash possession
(Art. 1102, CC) 30 days from Must signify
issuance of order acceptance/repudiation
The omission of one or more objects or of distribution otherwise, deemed accepted
securities of the inheritance shall not cause 1 month form Right to repurchase hereditary
the rescission of the partition on the ground written notice of rights sold to a stranger by a co-
sale heir
of lesion, but the partition shall be completed
10 years To enforce warranty of
by the distribution of the objects or securities title/quality of property
which have been omitted. (Art. 1103, CC) adjudicated to co-heir from the
time right of action accrues
Difference of Nullity from Rescission 5 years from To enforce warranty of solvency
Nullity is not the same as Rescission: partition of debtor of the estate at the time
1. Nullity - the act is supposed to never have partition is made
existed 4 years form Action for rescission of partition
2. Rescission - the act is valid at the origin partition on account of lesion
though it afterwards became ineffective
CIVIL LAW REVIEWER Chapter VI. APPLICATION
Chapter VI. Application of the Important property. How will you compute the proportional
Concepts through Sample increase in each heirs shares in order not to
Computational Problems exceed the total estate of Mickey (assuming no
legitimes were impaired)?
I. Institution of Heirs
II. Legitimes
Goofys 1/3 of 12,000 4,000 86
original share:
III. Intestate Succession
SUCCESSION
IV. Donalds 1/4 of 12,000 3,000
II. The Effect of Partition original share:
III. Nullification of Partition Minnies 1/4 of 12,000 3,000
IV. Important Periods in Partition original share:
TOTAL: 10,000
DEFICIENCY
(Based on the lectures of Prof. Danilo L. : 2,000
Concepcion)
Goofys increase = 4,000/10,000 x 2,000 = 800
Donalds increase = 3,000/10,000 x 2,000 = 600
I. Institution of Heirs Minnies increase = 3,000/10,000 x 2,000 = 600
Goofys reduction = 6,000/13,000 x 1,000 = The legitimate child should get of the estate
461.53846 while the illegitimate children get of what the
Donalds reduction = 4,000/13,000 x 1,000 = legitimate child gets.
307.69231 Bart - P60,000
Minnies reduction = 3,000/13,000 x 1,000 = Lisa - P30,000
230.76923 Maggie - P30,000
Wolverine - P30,000
Total Deduction = P1000 Cyclops - P30,000
P13,000 P1,000 = P12,000 (the total estate)
But this would amount to a total of P180,000.
Goofy gets P6000 P461.53846 Thus, there must be a reduction of the shares of
Donald gets P4,000 P307.69231 the illegitimate children.
Minnie gets P3,000 P230.76923
___________ Reduction = excess / number of illegitimate
children
B. Deficiency in Institution Reduction = (180,000 120,000) / 4 = 15,000
P30,000 (share) 15,000 (reduction) =
Mickey died testate, leaving a total estate of P15,000
P12,000. According to his Will, Goofy gets 1/3,
Donald gets and Minnie gets of the
CIVIL LAW REVIEWER Chapter VI. APPLICATION
SUCCESSION
___________ Mario = P15,000
Luigi = P15,000
B. Legitimes: Concurrence of Spouse and
Legitimate Children
III. Intestate Succession
Anderson Silva died, leaving a total estate of
P120,000. He was survived by his wife,
Hulk Hogan died intestate, with a total estate of
Machida, and his three children: Chuck, Quinton,
P70,000. His wife, Sable, his legitimate son,
and George. How much legitime is allotted by
Ultimate Warrior, and his two illegitimate
law to each heir?
children, Stone Cold and Undertaker, survived
him. How will his estate be divided among these
Legitimate Children get
heirs?
The is divided into as many legitimate
children.
Applying the law in intestate succession, each
Wife gets an amount equal to the share of a
heirs will receive the ff:
legitimate child.
Ultimate Warrior P35,000
Stone Cold P17,500
Final Answer:
Undertaker P17,500
Chuck = P20,000
Sable P35,000
Quinton = P20,000
George = P20,000
Since the total shares will exceed P70,000,
Machida = P20,000
reduction is in order. The share of those who will
Free Portion = P40,000
receive more than their legitimes must be
___________
reduced. The spouses share should be reduced
first to the amount of her legitime (P17,500)
(note: the share of the others are equal to their
C. Legitimes: Concurrence of Spouse,
legitimes)
Legitimate and Illegitimate Children
Further reductions shall be made since the
Princess toadstool died, survived by her
amount will still exceed the net estate. Following
husband, kupa, her legitimate child, mushroom,
the law of legitimes, namely that the legitime of
and by her two illegitimate children, mario and
the legitimate child and the surviving spouse
luigi. She has a total estate of p120,000. How
shall be preferred over the illegitimate childrens
much legitime is allotted by law to each heir?
shares, the reduction will be suffered by the
illegitimate children.
The legitimate child gets .
The wife gets of the share of the legitimate
Final Answer:
child (because there is only one legitimate child)
Ultimate Warrior P35,000
The illegitimate children will each get of the
Stone Cold P8750
share of the legitimate child.
Undertaker P8750
Sable P17,500
Mushroom P60,000
Kupa P30,000
Mario P30,000
Luigi P30,000 IV. Accretion
But this will yield a total of p150,000. Thus the Goku died testate, leaving an estate of P720. In
shares of the illegitimate children must be his will, he instituted his sons to his entire estate.
reduced. His sons are Vegeta, Napa, Raditz and Freeza.
Vegeta, who had two children (Trunks and
Reduction = excess / number of illegitimate Bulma), predeceased Goku. Napa, who hated
children
CIVIL LAW REVIEWER Chapter VI. APPLICATION
his fathers guts, repudiated his share in the P50,000 to Spiderman. In 1982, he made a
will. donation to Robinhood worth P100,000.
Compute for the shares of each heir.
Raditz, who likewise has two children Total Estate = Gross Estate Liabilities +
(Tenshenhan and Chowzu), was found to be Donations Inter Vivos
incapacitated to inherit from his father. Total Estate = 90,000 0 + 150,000 = P240,000 88
SUCCESSION
Lastly, Freeza, the youngest and most beloved Determine the Legitimes:
son of Goku, has a son, Magneato. Legitimate Children = of Total Estate
Therefore: Spiderman = P60,000
Determine Legitime and Free Portion: Robinhood = P60,000
Heir Will
Vegeta (predeceased) 180 = legitime:120 Surviving Spouse = amount equal to Legitimate
free: 60 Child
Napa (repudiated) 180 (automatically Therefore: Sandy = P60,000
becomes free portion)
Raditz (incapacitated) 180 = legitime:120
Determine their Intestate Shares
free: 60
Heir Final Answer
Freeza 180 = legitime:120
Spiderman 80, 000
free: 60
(60,000 = legitime)
Robinhood 80,000
Determine amount received by heirs through (60,000 = legitime)
representation for the legitimes Sandy 80,000
Heir Representation for (60,000 = legitime)
Legitime
Vegeta (predeceased) Legitime = 120 Determine Advances
Trunks: 60
Heir Advance
Bulma: 60
Spiderman 50,000
Napa (repudiated)
Robinhood 100,000
Raditz (incapacitated) Legitime = 120
Sandy
Tenshenhan: 60
Chowzu: 60
Freeza Compute:
Heir Computation
Determine if there is accretion: Spiderman Legitime: 60,000 50,000 = 10,000
Free Portion = 20,000
Heir Accretion
Robinhood Legitime: 60,000 60,000 = 0
Vegeta (predeceased) - 60
Free Portion: 20,000 20,000 = 0
Napa (repudiated) -180
(20,000 still unaccounted for)
Raditz (incapacitated) -60
Sandy
Freeza + (60 + 60 + 180) or +
300
Since Robinhoods share has been exhausted
COMPUTE: but there is still a deficiency of 20,000, this
Heir Final Answer 20,000 will be deducted from the free portions
Vegeta (predeceased) Trunks: 60 of Spiderman and Sandy Pro Rata.
Bulma: 60
Napa (repudiated) 0 Heir Computation
Raditz (incapacitated) Tenshenhan: 60 Spiderman Legitime Left: 10,000
Chowzu: 60 Free Portion Left =
Freeza 480 20,000 10,000 = 10,000
Robinhood 0
Sandy Legitime: 60,000
Free Portion: 20,000 10,000 =
V. Collation 10,000
- end of Succession -
CIVIL LAW REVIEWER TABLE of CONTENTS
OBLIGATIONS
Table of Contents
OBLIGATIONS
I. Kinds of Prestations ............................93
II. Breach of Obligation............................94
III. Fortuitous Event (Force Majeure) .......96
IV. Remedies to Creditors ........................96
V. Usurious Transactions and Rules on
Interest .........................................................97
OBLIGATIONS
Writers
Article 1156, Civil Code. An obligation is a juridical
CIVIL LAW necessity to give, to do or not to do.
Kristine Bongcaron
Patricia Tobias I. Obligations
Subject Editors
Jill Hernandez
Lawful Distinguished from crimes
Head
Voluntary Distinguished from quasi-delict,
Loraine Mendoza Faye Celso which are based on fault and
Mary Mendoza Joie Bajo negligence
Members
Unilateral Distinguished from contract which is
based on agreement
CIVIL LAW REVIEWER Chapter I. GENERAL PROVISIONS
OBLIGATIONS
(De Leon, 2003) with fault or negligence causing damage to
another; not a crime nor a contract)
D. Delicts (Acts or omissions punished by law;
crimes) Quasi-Delict Crimes
Private, against Public, against the State
Extent of Civil Liability individual
Governed by the Revised Penal Code and the Criminal intent is not Criminal intent is
Civil Code, includes: necessary necessary for criminal
1. Restitution; liability
2. Reparation of damages caused; and Present in any act or An act can is only
3. Indemnity for consequential damages (Art. omission where fault or punishable when there is
104, Revised Penal Code). negligence intervenes a law penalizing it
(Tolentino, 1987)
Gives rise to liability for There are crimes from
Enforcement of Civil Liability damages to the injured which no civil liability
1. Independent: Criminal and civil action party arises
arising from the same offense may be Reparation, Fine or imprisonment or
instituted separately. compensation or both, to public treasury
2. Suspended: However, after criminal action indemnification of the
has been commenced prosecution for civil injury suffered by the
action is suspended in whatever stage it injured party
may be found, until final judgment in the Preponderance of Proof of guilt beyond
criminal proceeding is rendered; evidence reasonable doubt
3. Impliedly Instituted: Civil action is impliedly Can be compromised Can never be
instituted with the criminal action, when: compromised
offended party expressly waives the civil
action or reserves the right to institute a Requisites of Liability (DWD)
separate civil action; or 1. Wrongful act or omission by fault or
the law provides for an independent civil negligence
action 2. Damage or injury proven by the person
claiming recovery
Barredo v. Garcia, (1942): The same negligent act 3. Direct causal connection between the fault
may give rise to an action based on delict or quasi- or negligence and the damage or injury
delict and the injured party is free to choose which
remedy to enforce. Liability for Quasi- Liability for Crimes
Delict (Art. 2180, NCC) (Art. 103, RPC)
Mendoza vs. Arrieta, (1979): If the civil action is
based on quasi-delict, there is no need to reserve the Primary, can be directly Subsidiary, employee
right to file a civil action in the criminal case. sued by the injured must first be convicted
party and sentenced to pay
civil indemnity
Effect of Acquittal on Civil Actions
All employers, whether Employer is only liable
Barred No Effect engaged in some when he is engaged in
if based on the very an independent civil enterprise or not, are some kind of business
same facts on which action is allowed by law liable for acts of or industry
the criminal action acquittal is due to lack employees, even
which ended in of proof beyond household helpers
acquittal was based reasonable doubt Avoid civil liability by Subsidiary liability is
if the facts alleged in proving exercise of absolute and cannot be
the civil case has been diligence of a good avoided by any proof of
found to be non- father of a family diligence
existent in the criminal
CIVIL LAW REVIEWER Chapter II. NATURE and EFFECT of OBLIGATIONS
OBLIGATIONS
identified by same class as
I. Kinds of Prestations individuality. long as it is of
the same kind.
KINDS OF PRESTATION Cannot be Can be
1. TO GIVE: real obligation; to deliver either substituted. substituted by
(1) a specific or determinate thing, or (2) a any of the same
generic or indeterminate thing. class and same
2. TO DO: positive personal obligation; kind.
includes all kinds of work or services.
3. NOT TO DO: negative personal Personal Right Real Right
obligation; to abstain from doing an act; Vested before delivery Vested after delivery
A right enforceable only A right enforceable
includes the obligation not to give.
against the debtor against the world
Right of the creditor to Right pertaining to a
Accessories: those joined to or included with demand from the debtor, person over a specific
the principal for the latters completion, better the fulfillment of a thing, without a passive
use, perfection or enjoyment prestation to give, to do subject individually
or not to do determined against
Accessions: additions to or improvement upon whom such right may be
a thing, either naturally or artificially personally enforced
Not To Not to do what should not be done To ask to undo what should not be done
Do To shoulder the cost of undoing what To recover damages, where it would be
should not have been done physically or legally impossible to undo
To pay for damages in case of breach what has been undone, because of :
o the very nature of the act itself;
o rights acquired by third persons who
acted in good faith;
o when the effects of the acts prohibited
are definite in character and will not 94
cease even if the thing prohibited be
OBLIGATIONS
undone.
OBLIGATIONS
Effects Effects
Culpa Contractual Culpa Aquiliana Asked 1. The debtor is liable 1. The responsibility of
in 83, 84, and 86) for damages the debtor is
Negligence is merely Negligence is substantive 2. The debtor is liable reduced to fraud
incidental in the and independent even if the loss is due and gross
performance of an to fortuitous events negligence
obligation 3. For determinate 2. The debtor is
objects, the debtor exempted from risk
There is always a pre- There may or may not be
shall bear the risk of of loss of the thing
existing contractual a pre-existing contractual
loss which is borne by
relation obligation
the creditor
The source of obligation The source of obligation
3. The expenses
of defendant to pay is the defendants
incurred by the
damages is the breach or negligence itself
debtor for the
non-fulfillment of the
preservation of the
contract
thing after the mora
Proof of the existence of The negligence of the shall be chargeable
the contract and of its defendant must be to the creditor
breach or non-fulfillment proved 4. If the obligation
is sufficient prima facie to bears interest, the
warrant recovery debtor does not
Proof of diligence in the Proof of diligence in the have to pay from
selection and supervision selection and supervision the time of delay
of the employees is NOT of the employee is a 5. The creditor is liable
available as defense defense for damages
6. The debtor may
Culpa Criminal: wrong or negligence in relieve himself of
the commission of a crime obligation by
consigning the thing
OBLIGATIONS
III. Fortuitous Event (Force Majeure)
IV. Remedies to Creditors
Any event which could not be foreseen, or which
though foreseen are inevitable (Art. 1174) Art. 1170, Civil Code. Those who in the performance
of their obligations are guilty of fraud, negligence, or
A happening independent of the will of the delay and those who in any manner contravene the
debtor and which makes the normal fulfillment of tenor thereof, are liable for damages.
the obligation impossible (De Leon, 2003).
Transmissibility of Rights
A. Act of God: an accident, due directly or Art. 1178: Rights acquired by virtue of an
exclusively to natural causes without human obligation are transmissible in character,
intervention, which by no amount of UNLESS prohibited:
foresight, pains or care, reasonably to have 1. by their very nature (i.e. personal
been expected, cold have been prevented. obligations)
B. Act of Man: force majeure is a superior or 2. by stipulation of the parties
irresistible force, which is essentially an act 3. by operation of law
of man; Includes unavoidable accidents, (De Leon, 2003)
even if there has been an intervention of
human element, provided that no fault or Primary Remedies
negligence can be imputed to the debtor Arts. 1165-1168: PRESS
(Asked in 81, 87 and 88) 1. Specific Performance performance
by the debtor of the prestation itself
Liability in case of Fortuitous Event 2. Substituted Performance someone
No person shall be responsible for fortuitous else performs or something else is
events, UNLESS: performed at the debtors expense
1. expressly specified by law (Arts. 552(2), 3. Equivalent Performance right to
1942, 2147, 2148, 2159) claim damages (in either performance or
2. liability specified by stipulation rescission)
3. the nature of the obligations requires 4. Rescission right to rescind or cancel
assumption of risk (Art. 1174) the contract
4. when debtor is guilty of concurrent or 5. Pursue the Leviable to attach the
contributory negligence properties of the debtor, except those
5. debtor has promised to deliver the same exempt by law from execution
thing to two or more persons who do not
have the same interests (Art. 1165 par. 3) Subsidiary Remedies of Creditor
6. the thing is lost due to the obligors fraud,
negligence, delay or contravention of the General Rule: Contracts are binding only
tenor of the obligation (Art. 1170) between the parties thereto, and their heirs,
7. the obligation to deliver a specific thing assignees, and the estate, UNLESS: Accion
arises from a crime (Art. 1268) Subrogatoria and Accion Pauliana
8. the object is a generic thing, i.e. the genus 1. Accion Subrogatoria: right of creditor to
never perishes exercise all of the rights and bring all of the
actions which his debtor may have against
Requisites for Exemption third persons; Novation by change of debtor
1. The event must be independent of the (Art. 1291, par.3).
debtors will (fraud or negligence)
CIVIL LAW REVIEWER Chapter II. NATURE and EFFECT of OBLIGATIONS
Requisites
a. Debtor to whom the right of action Siguan v. Lim, (1999): Petitioner cannot invoke the
properly pertains must be indebted to credit of a different creditor to justify the rescission of
the creditor the subject deed of donation, because the only
b. The debt is due and demandable creditor who may benefit from the rescission is the
creditor who brought the action; those who are
c. The creditor must be prejudiced by the
strangers to the action cannot benefit from its effects.
failure of the debtor to collect his own
rd
debt from 3 persons either through
malice or negligence
V. Usurious Transactions and Rules on
97
d. The debtors assets are insufficient
OBLIGATIONS
(debtor is insolvent) Interest
e. The right of action is not purely personal
to the debtor USURY: stipulation of interest rates higher than
the ceiling provided by law.
2. Accion Pauliana: Rescission, which
involves the right of the creditor to attack or Note: Usury Law (Act No. 2655, as amended)
impugn by means of a rescissory action any was repealed by Central Bank Circular No. 905,
act of the debtor which is in fraud and to the Dec. 10, 1982.
prejudice of his rights as creditor.
INTEREST
Requisites: CASAL
a. There is a credit in favor of plaintiff Art. 1176, Civil Code. Receipt of the principal without
prior to alienation reservation as to the interest shall give rise to a
b. The debtor has performed a disputable presumption that the interest has been
subsequent contract conveying a paid. Receipt of the latter installment without
patrimonial benefit to third persons reservation as to prior installments shall likewise give
rise to a disputable presumption that such prior
c. The creditor has no other legal remedy
installments have been paid.
to satisfy his claim
d. The debtors acts are fraudulent to the
Determination of Interests
prejudice of the creditor
Eastern Shipping Lines v. CA (1961)
e. The third person who received the
property is an accomplice in the fraud
Stage 1
For loan or forbearance NOT for loan or
Accion Subrogatoria Accion Pauliana of money, goods or forbearance of money,
Not necessary that Credit must exist before credit, the interest rate goods or credit, the
creditors claim is prior to the fraudulent act is 12% interest rate is 6%
the acquisition of the right
by the debtor a) Interest = interest a) If date of demand is
No need for fraudulent Fraudulent intent is rate stipulated in certain, compute from
intent required if the contract writing + 12% legal the date when demand
rescinded is onerous interest, computed is made (judicial or
No period for prescription Prescribes in 4 years from date of judicial extra-judicial)
from the discovery of the demand (filing of
fraud complaint)
b) If there is no b) If date of demand is
stipulated interest rate, NOT certain, compute
3. Accion Directa (Art. 1729, 1652, 1608, the interest rate is 12% from the date of trial
1893): the right of lessor to go directly to a computed from date of court decision (judicial
sublessee for unpaid rents of the lessee default or demand demand)
(judicial or extra-
4. The right of laborers or persons who furnish judicial)
materials for a piece of work undertaken by Stage 2
a contractor to go directly to the owner for Add 12% interest from finality of SC decision until
any unpaid claim due to the contractor fully paid (equivalent to a forbearance of credit)
OBLIGATIONS
Principle of Retroactivity in
I. Pure and Conditional Obligations Suspensive Conditions
Art.1187, par.1: once the condition is
(Asked in 79, 88, 00, 03) fulfilled its effects must logically retroact
to the moment when the essential
Pure Obligation (Art.1179): Effectivity or elements, which gave birth to the
extinguishment does not depend upon the obligation have taken place. The
fulfillment or non-fulfillment of a condition or condition which is imposed is only
upon the expiration of a term or period and accidental, not an essential element of
characterized by the quality of its being the obligation.
IMMEDIATELY DEMANDABLE. Applied only to consensual
contracts. No application to real
Conditional Obligation (Art.1181): Effectivity is contracts which can only be
subject to the fulfillment or non-fulfillment of a perfected by delivery.
condition, which is characterized to be a
FUTURE and UNCERTAIN event. To Give To Do/Not To Do
If reciprocal, the fruits In obligations to do or not
Effects of Conditions and interests shall be to do, the court shall
1. Suspensive Condition: Obligation shall deemed to have been determine the retroactive
only be effective upon the fulfillment of the mutually compensated effect of the condition
condition (Art.1181). What is acquired by the as a matter of justice and that has been complied
obligee upon the constitution of the convenience with.
obligation is mere hope or expectancy, but is (Art. 1187, par. 1) (Art. 1187, par. 2)
If unilateral, the debtor The power of the court
protected by law.
shall appropriate the includes the
fruits and interests determination whether or
Before Fulfillment After Fulfillment received, unless from the not there will be any
The demandability and The obligation arises or nature and circumstance retroactive effects. This
acquisition or effectivity becomes effective. it should be inferred that rule shall likewise apply
of the rights arising from The obligor can be the intention of the in obligations with a
the obligation is compelled to comply with persons constituting the resolutory condition (Art.
suspended. Anything what is incumbent upon same was different. 1190 par. 3)
paid by mistake during him.
such time may be
recovered.
Preservation of Creditors Rights
Art.1188, par.1: The creditor may,
Doctrine of Constructive Fulfillment before the fulfillment of the condition,
of Suspensive Conditions bring the appropriate action for the
Art. 1186: the condition shall be deemed preservation of his rights. However, this
fulfilled when the obligor actually does not grant any preference of credit
prevented the obligee from complying but only allows the bringing of the proper
with the condition, and that such action for the preservation of the
prevention must have been voluntary or creditors rights.
willful in character.
Applicable to suspensive conditions 2. Resolutory Condition: Obligation becomes
and not to resolutory conditions. demandable immediately after its
The article can have no application establishment or constitution. The rights are
to an external contingency which is immediately vested to the creditor, but
lawfully within the control of the always subject to the threat or danger of
obligor. extinction by the happening of the resolutory
condition (Tolentino, 1987).
CIVIL LAW REVIEWER Chapter III. DIFFERENT KINDS of OBLIGATIONS
OBLIGATIONS
However, when condition shall annul the obligations which depend
is not fulfilled, rights are
consolidated and they
upon them (Art. 1183).
become absolute in If pre-existing obligation, only the
character impossible condition is void, but not the
obligation.
3. Potestative Condition If divisible obligation, that part which is
not affected by the impossible or
Exclusively Exclusively Exclusively unlawful condition shall be valid.
upon the upon the upon the If the condition is not to do an
Creditors Will Debtors Will Debtors Will impossible thing, it shall be considered
in case of a in case of a as not having been agreed upon (Art
Suspensive Resolutory 1183, par. 2). Consequently, it becomes
Condition Condition pure and immediately demandable.
(Art. 1182) (Art. 1179, par
If attached to a simple or remuneratory
2)
donation (Art. 727), or testamentary
Condition and Condition and Condition and
obligation is obligation are obligation is disposition (Art. 873), condition is
valid void because to valid because in considered as not imposed while the
allow such such situation, obligation is valid.
condition would the position of
be equivalent to the debtor is 7. Positive Condition: Obligation shall be
sanctioning exactly the extinguished as soon as the time expires or
obligations same as the if it becomes indubitable that the event will
which are position of the not take place (Art.1184)
illusory. It also creditor when
constitutes a the condition is
direct suspensive. It 8. Negative Condition: Obligation shall be
contravention of does not render rendered effective from the moment the time
the principle of the obligation indicated has lapsed, or if it has become
mutuality of illusory. evident that the event will not occur
contracts. (Art.1185)
When no period has been fixed, the
4. Casual Condition: The fulfillment of the intention of the parties is controlling,
condition depends upon chance and/or upon and the time shall be that which the
the will of a third person (Art. 1182) parties may have contemplated, taking
into account the nature of the obligation
5. Mixed Condition: The fulfillment of the (Art 1185, par. 2).
condition depends partly upon the will of a
party to the obligation and partly upon
chance and/or will of a third person Effects of Loss, Deterioration, and
Improvement in Real Obligations Pending the
Osmena v. Rama: Defendant executed an Condition (Art. 1189)
endorsement saying that shell pay her debt if the
house in which she lives is sold. Such condition Without With Debtors
depended upon her exclusive will thus it is void. Debtors Fault/Act
Fault/Act
Hermosa v. Longara: The condition that payment Loss Obligation is Obligation is
should be made by Hermosa as soon as he receives extinguished converted into
funds from the sale of his property in Spain is a mixed one of
condition. The condition implies that the obligor indemnity for
already decided to sell the house and all that was damages
CIVIL LAW REVIEWER Chapter III. DIFFERENT KINDS of OBLIGATIONS
Deterioration Impairment to be Creditor may shouldered by the first infractor. This shall
borne by the choose be determined by the courts. However, if it
creditor between cannot be determined who was the first
bringing an infractor, the contract shall be deemed
action for
extinguished and each shall bear his own
rescission of
the obligation damages (Art.1192).
OR bringing an
action for UP v. Delos Angeles (1970): The injured party may
specific extra-judicially rescind the contract on account of the 100
performance breach of the other party. However, this is without
OBLIGATIONS
with damages prejudice to the option of the other party to resort to
in either case. the courts in order to determine if the rescission made
is valid, if not, the party who rescinded the contract
Improvement Improvement at Improvement will be sentenced to pay damages.
the debtors by the things
expense, the nature or by Where the other party does not oppose the
debtor shall time shall inure extra-judicial declaration of rescission, such
ONLY have to the benefit of declaration shall produce legal effect.
usufructuary the creditor Effect is retroactive therefore invalidating
rights and unmaking the juridical tie between the
contracting parties, leaving things in their
Loss, defined: when the thing perishes; goes status before the celebration of the contract.
out of commerce; disappears in such a way that
its existence is unknown or it cannot be
recovered
III. Obligations with a Period
Exerts an influence upon Exerts an influence upon Art. 1197 does not apply to contract of
the time of demandability the very existence of the services and to pure obligations.
or extinguishment of an obligation itself The court, however, to prevent
obligation unreasonable interpretations of the
No retroactive effect Has retroactive effect immediate demandability of pure obligations,
unless there is an
agreement to the contrary
may fix a reasonable time in which the
When it is left exclusively When it is left exclusively debtor may pay.
to the will of the debtor, to the will of the debtor, (Tolentino, 1987)
the existence of the the very existence of the 101
obligation is not affected obligation is affected When Debtor Loses Right to Use Period
OBLIGATIONS
Art.1198: I GIV A LA
Benefit of the Period 1. Debtor becomes Insolvent, unless he gives
Presumption: Period in an obligation is a guaranty or security for his debt, after
presumed to be established for the benefit of obligation is contracted
both the creditor and debtor, UNLESS: If from 2. Debtor fails to furnish the Guaranties or
the tenor of the obligation or other securities promised
circumstances, it shall appear that the period 3. Debtor by his own acts Impaired said
has been established in favor of either the guaranties or securities after their
creditor or debtor (Art. 1196). establishment, and when through a
fortuitous event they disappear, unless he
Period for the Benefit of either Creditor or immediately gives new one equally
Debtor satisfactory
4. Debtor Violates any undertaking, in
Creditor Debtor consideration of which the creditor agreed to
Creditor may demand Debtor may oppose any the period
the fulfillment or premature demand on 5. Debtor attempts to Abscond
performance of the the part of the oblige for 6. By Law or stipulation
obligation at any time the performance of the 7. Parties stipulate an Acceleration Clause
but the obligor cannot obligation, of if he so
compel him to accept desires, he may
payment before the renounce the benefit of In the cases provided, the obligation becomes
expiration of the period the period by performing immediately due and demandable even if the
his obligation in advance period has not yet expired. The obligation is thus
converted into a pure obligation (Tolentino,
1987).
When court may fix period
Art. 1197: as general rule, the court is not
authorized to fix a period for the parties (De IV. Alternative and Facultative
Leon, 2003). Obligations
Araneta v. Phil. Sugar Estates, provides:
Alternative Obligations Facultative Obligations
First, the Court shall determine:
If the obligation does not fix a period, but from Several objects are due Only one object is due
its nature and circumstances, it can be inferred May be complied with by May be complied with by
that a period was intended delivery of one of the the delivery of another
If the period is void, such as when it depends objects or by performance object or by the
upon the will of the debtor of one of the prestations performance of another
If the debtor binds himself when his means which are alternatively prestation in substitution
permit him to do so. due of that which is due
Second, it must decide what period was probably Choice may pertain to Choice pertains only to
contemplated by the parties. debtor, creditor, or third the debtor
person
The only action that can be maintained
Loss/impossibility of all Loss/impossibility of the
under Art. 1197 is the action to ask the objects/prestations due to object/prestation due to
courts to fix the term within which the debtor fortuitous event shall fortuitous event is
must comply with his obligation. The extinguish the obligation. sufficient to extinguish
fulfillment of the obligation itself cannot be The loss/impossibility of the obligation
demanded until after the court has fixed the one of the things does not
period for compliance, therewith, and such extinguish the obligation.
period has arrived. Culpable loss of any of Culpable loss of the
the objects alternatively object which the debtor
CIVIL LAW REVIEWER Chapter III. DIFFERENT KINDS of OBLIGATIONS
OBLIGATIONS
service which
Right of Choice become impossible
Some Debtor to deliver Debtor to deliver
Art. 1200: to the debtor, UNLESS:
that which he that which the
1. when it is expressly granted to the shall choose creditor shall
creditor from among the choose from among
2. when it is expressly granted to a third remainder the remainder
person without damages
One Debtor to deliver Debtor to deliver
Limitations to the right of choice Remains that which that which remains
1. impossible prestations remains
2. unlawful prestations
3. those which could not have been the Art. 1205: Creditors Choice
object of the obligation Fortuitous Debtors Fault
4. only one prestation practicable (Art. Event
1202) All Lost Debtor is Creditor may claim
released from the the price/value of
(De Leon, 2003)
obligation any of them with
indemnity for
When choice shall produce effect damages
Art. 1201: Choice shall produce no effect except Some Debtor to deliver creditor may claim
from the time it has been communicated. The that which he any of those
effect of the notice is to limit the obligation of the shall choose subsisting without a
object or prestation selected. Notice of selection from among the right to damages
or choice may be in any form provided it is remainder OR price/value of
sufficient to make the other party know that the the thing lost with
right to damages
selection has been made. It can be:
One Creditor may Creditor may claim
o oral Remains claim any of the remaining thing
o in writing those subsisting without a right to
o tacit without a right to damages OR the
o any other equivocal means damages OR price/value of the
Choice of the debtor when communicated to price/value of the thing lost with right
the creditor does not require the latters thing lost with to damages
concurrence. right to damages
When the choice is rendered impossible
through the creditors fault, the debtor may
bring an action to rescind the contract with B. Facultative Obligation
damages (Art.1203).
Obligation is converted into a simple Only one prestation has been agreed upon but
obligation when: the debtor may render another in substitution
o When the person who has the right of (De Leon, 2003)
choice has communicated his choice
(Art. 1201) Effect of Loss of Substitute
o When only one prestation is practicable
(Art. 1202) Before Substitution is After Substitution is
Made Made
If due to bad faith or The loss or
fraud of obligor: obligor deterioration of the
is liable substitute on account
of the obligors delay,
negligence or fraud
CIVIL LAW REVIEWER Chapter III. DIFFERENT KINDS of OBLIGATIONS
OBLIGATIONS
debit
OBLIGATIONS
others, with the right on the part of the
Indivisibility Solidarity debtor-payor to recover from the others their
Refers to the prestation Refers to the legal tie or respective shares.
which constitutes the vinculum, and Creation of a relationship of mutual
object of the obligation consequently to the guaranty among co-debtors
subjects or parties of The total remission of the debt in favor
the obligation
of a debtor releases all the debtors
Plurality of subjects is not Plurality of subjects is
required indispensable All the debtors are liable for the loss of
In case of breach, When there is liability the thing due, even if such loss is
obligation is converted into on the part of the caused by the fault of only one of them
indemnity for damages debtors because of the and for delay, even if it is caused by just
because the indivisibility of breach, the solidarity one of them
the obligation is terminated among the debtors The interruption of prescription as to
remains one debtor affects all the others; but the
renunciation by one debtor of
The indivisibility of an obligation does not prescription already had does not
necessarily give rise to solidarity. Nor does prejudice the others
solidarity itself imply indivisibility. (Art. 1211) 3. Mixed: Solidarity among creditors and
debtors
Kinds of Solidary Obligations Solidarity is not destroyed by the fact
1. Active (solidarity among creditors): Each that the obligation of each debtor is
creditor has the authority to claim and subject to different conditions or periods.
enforce the rights of all, with the resulting The creditor can commence an action
obligation of paying everyone of what against anyone of the debtors for the
belongs to him. compliance with the entire obligation
Creation of a relationship of mutual minus the portion or share which
agency among co-creditors. corresponds to the debtor affected by
the condition or period.
____________________________________________________________________________________
Assignment of Loss or
Compensation &
Rights in Solidary Novation Remission Impossibility
Confusion
Obligations
The solidary If prejudicial, the If it is partial, the If entire If not debtors
creditor cannot solidary creditor rules regarding obligation, fault, the
assign his right who effected the application of obligation is totally obligation is
because it is novation shall payment shall extinguished. extinguished
predicated upon reimburse the apply (w/o) If for the benefit If thru debtors
mutual others for prejudice to the of one of the OR fortuitous
confidence, damages incurred right of other debtors covering event after delay,
UNLESS, the (1) by them; creditors who his entire share, the obligation is
the assignment is If beneficial and have not caused he is completely converted into
to a co-creditor; secured by one, the confusion or released from the indemnity for
(2) assignment is he shall be liable compensation to creditor/s. damages but the
with consent of to the others for be reimbursed to If for the benefit solidary character
co-creditor the share the extent that of one of the of the obligation
(obligation & their rights are debtors and it remains.
benefits) which diminished or covers only part
CIVIL LAW REVIEWER Chapter III. DIFFERENT KINDS of OBLIGATIONS
OBLIGATIONS
If by subrogating
a third person in
creditors rights,
the obligation is
not in reality
extinguished as
the relation
between the other
creditors and the
debtor/s is
maintained.
Effects of Prejudicial and Beneficial Acts The creditor may proceed If two or more solidary
(Art.1212) against any one of the debtors offer to pay, the
solidary debtors or all creditor may choose
1. Each one of the solidary creditors may do simultaneously (Art. which offer to accept.
whatever may be useful or beneficial to the 1216) (Art. 1217)
others, but not anything which may be A creditors right to The solidary debtor who
prejudicial to the latter. proceed against the made the payment shall
2. As far as the debtors are concerned, a surety exists have the right to claim
prejudicial act performed by a solidary independently of his right from his co-debtors the
creditor is binding. to proceed against the share which corresponds
3. As between the solidary creditors, the principal to them with interest,
UNLESS barred by
creditor who performed such act shall incur prescription or illegality.
the obligation of indemnifying the others for (Art. 1218)
damages.
When a solidary debtor pays the entire
Defenses Available to a Solidary Debtor (Art. obligation, the resulting obligation of the co-
1222) debtors to reimburse him becomes joint.
1. Those derived from the nature of the If payment was made before the debt
obligation became due, no interest during the
2. Those personal to him intervening period may be demanded. (Art.
3. Those pertaining to his own share 1217 par. 2)
4. Those personally belonging to other co- When one of the solidary debtors cannot
debtors but only as regards that part of the reimburse his share to the debtor paying the
debt for which the latter are responsible. obligation due to insolvency, such share
shall be borne by all his co-debtors, in
Effects proportion to the debt of each. (Art. 1217,
par. 2)
Demand Upon a Payment by a Debtor
Solidary Debtor
Inchausti v. Yulo, (1914): Debtors obligated
The demand made Full payment made by
themselves solidarily, so creditor can bring its action
against one of them shall one of the solidary
against any of them. Remission of any part o fthe
not be an obstacle to debtors extinguishes the
debt, made by the creditor in favor of one of the
those which may obligation. (Art. 1217)
solidary debtors, inures to the benefit of the rest of
subsequently be directed
them.
against the others so
long as the debt has not
been fully collected. (Art.
1216)
CIVIL LAW REVIEWER Chapter III. DIFFERENT KINDS of OBLIGATIONS
VI. Divisible and Indivisible Obligations If the principal obligation is void, penal
clause shall also be void. However, the
nullity of the penal clause does not carry
A. Divisible Obligations
with it the nullity of the principal
obligation (Art.1230).
One which is susceptible of partial performance;
that is, the debtor can legally perform the
Purposes of Penalty
obligation by parts and the creditor cannot 1. Funcion coercitiva de garantia - to insure the
demand a single performance of the entire
obligation (Tolentino, 1987). 2.
performance of the obligation.
Funcion liquidatoria - to liquidate the amount of
106
OBLIGATIONS
damages to be awarded to the injured party in
B. Indivisible Obligations case of breach of the principal obligation
(compensatory).
One which cannot be validly performed in parts 3. Function estrictamente penal - to punish the
(Tolentino, 1987). obligor in case of breach of the principal
Divisibility/indivisibility refers to the obligation (punitive).
performance of the prestation and not to the
thing which is the object thereof. The thing Effects of Penalty
may be divisible, yet the obligation may be 1. The penalty shall substitute the indemnity for
indivisible. damages and payment of interest in case of
When the obligation has for its object the non-compliance (Art. 1226), UNLESS:
a. There is a stipulation to the contrary
execution of a certain number of days of b. The obligor refuses to pay the penalty
work, the accomplishment of work by c. The obligor is guilty of fraud
metrical units, or analogous things which by 2. Debtor cannot exempt himself from the
their nature are susceptible of partial performance of the principal obligation by
performance, it shall be divisible (Art.1225, paying the stipulated penalty unless this
par. 2). right has been expressly reserved for him
When there is plurality of debtors and (Art. 1227).
creditors, the effect of divisibility/indivisibility 3. Creditor cannot demand the fulfillment of the
of the obligation depend upon whether the principal obligation and demanding the
obligation is joint or solidary. satisfaction of the penalty at the same time
A joint indivisible obligation give rise to unless the right has been clearly granted to
indemnity for damages from the time anyone him (Art. 1227). Tacit or implied grant is
of the debtors does not comply with is admissible.
undertaking. a. If creditor has chosen fulfillment of the
(Art. 1224) principal obligation and performance thereof
become impossible without his fault, he may
Effect still demand the satisfaction of the penalty.
Creditor cannot be compelled partially to receive b. If there was fault on the part of the debtor,
the prestation in which the obligation consists; creditor may demand not only satisfaction of
neither may the debtor be required to make the penalty but also the payment of damages.
c. If creditor chooses to demand the
partial payment (Art. 1248), UNLESS:
satisfaction of the penalty, he cannot
The obligation expressly stipulates the afterwards demand the fulfillment of the
contrary obligation.
The different prestations constituting the
objects of the obligation are subject to Proof of Actual Damage
different terms and conditions Art. 1228: Proof of actual damages is not
The obligation is in part liquidated and in part necessary is applicable only to the general rule
unliquidated stated in Art. 1226 and not to the exceptions.
The penalty is exactly identical with what is
known as liquidated damages in Art. 2226.
VII. Oblligations with a Penal Clause
When Penalty may be Reduced
Penal Clause: An accessory undertaking to Art. 1229:
assume greater liability in case of breach (De 1. If the principal obligation has been partly
Leon, 2003). It is attached to an obligation in complied with.
order to ensure performance. The enforcement 2. If the principal obligation has been irregularly
of the penalty can be demanded by the creditor complied with.
only when the non-performance is due to the 3. If the penalty is iniquitous or unsconscionable
fault or fraud of the debtor. even if there has been no performance.
CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS
OBLIGATIONS
VI. NOVATION
Delivery and transmission of ownership of a
thing by the debtor to the creditor as an
accepted equivalent of the performance of the
I. Payment or Performance obligation (dacion en pago).
Art. 1232, Civil Code. Payment means not only Dation in payment Payment by cession
delivery of money but also performance, in any
manner, of the obligation. In favor of only one There are various
creditor creditors
See Diagrams of Prof. Labitag at the end Payment extinguishes the Extinguishes credits
obligation to the extent of only up to the extent of
section of Obligations.
the value of the thing proceeds from sale of
delivered, unless the assigned property,
SPECIAL FORMS OF PAYMENT parties agree that the unless otherwise
obligation be totally agreed upon
A. Application of Payment (Art. 1252) extinguished
Transfer of ownership of Only possession and
Designation of the debt to which should be thing alienated to creditor administration with
applied a payment made by a debtor who owes authorization to convert
several debts to the same creditor property to cash with
which the debts shall
be paid
Rules on Application Not necessarily in state of Assignment
1. Preferential right of debtor - debtor has the financial difficulty presupposes
right to select which of his debts he is insolvency of debtor.
paying. Assignment of only some Assignment involves all
2. The debtor makes the designation at the specific thing the property of the
time he makes the payment debtor.
3. If not, the creditor makes the application, by
so stating in the receipt that he issues, D. Tender of payment and consignation
unless there is cause for invalidating the
contract. 1. Tender of payment: Manifestation made by
4. If neither the creditor nor debtor exercises debtor to creditor of his desire to comply
the right to apply, or if the application is not with his obligation, with offer of immediate
valid, the application is made by operation of performance
law. Preparatory act to consignation
5. If debt produces interest - payment not Extrajudicial in character
deemed applied to the principal unless
interests are covered. 2. Consignation: Deposit of the object of
6. When no application can be inferred from obligation in a competent court in
the circumstances of payment, it is applied accordance to the rules prescribed by law,
to: to the most onerous debt of the debtor; or whenever the creditor unjustly refuses
if debts due are of the same nature and payment or because of some circumstances
burden, to all the debts in proportion which render direct payment to the creditor
7. Rules of application of payment may not be impossible or inadvisable.
invoked by a surety or solidary guarantor. Principal act which constitutes a form of
payment.
Reparations Commission vs. Universal Deep Sea Judicial in character.
Fishing Corp. (1978): Rules on application of payment
cannot be made applicable to a person whose
obligation as a mere surety is both contingent and
CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS
When Tender and Refusal Not Required (Art. 2. After approval of the court or acceptance by
1259) the creditor, with the consent of the latter -
1. Creditor is absent or unknown, or does not Obligation remains in force, but guarantors
appear at the place of payment and co-debtors are liberated. Preference of
2. Creditor is incapacitated to receive the thing the creditor over the thing is lost.
due at time of payment 3. After approval of the court or acceptance by
3. Without just cause, creditor refuses to give the creditor, and without creditors consent -
receipt Obligation subsists, without change in the
4. Two or more persons claim the same right to liability of guarantors and co-debtors, or the 108
collect creditors right of preference.
OBLIGATIONS
5. Title of the obligation has been lost
Art. 1259, Civil Code. Expenses of consignation,
Effects of Withdrawal by Debtor when properly made, shall be charged against the
Arts. 1260- 1261 creditor.
1. Before approval of the court - Obligation
remains in force.
Application of
Cession Dation Tender and Consignation
Payment
Requisites Requisites Requisites Requisites
1. Plurality of 1. Plurality of debts 1. Should not be 1. There is a debt due
debts 2. Plurality of prejudicial to 2. consignation is made because
2. Debts are of creditors other creditors of some legal cause
the same kind 3. Partial insolvency 2. Should not 3. previous notice of consignation
3. Debts are owed of the debtor constitute a was given to those persons
to the same 4. Abandonment of pactum interested in the performance
creditor and by the totality of the commissorium of the obligation
the same debtors 4. amount or thing due was
debtor properties for the placed at the disposal of the
4. All debts must benefit of the court
be due creditors 5. after the consignation has been
5. Payment made 5. Acceptance by made, the persons interested
is not sufficient the creditors were notified thereof
to cover all
debts
Effects Effects Effects Effects
Payment of debt Assignment liberates Extinguishment of If accepted by the creditor or
designated as to debtor up to the debt from as an declared properly made by the
corresponding amount of the net equivalent of the Court:
amount proceeds of the sale performance of the 1. Debtor is released in same
of his assets obligation manner as if he had performed
Assignment does not the obligation at the time of
vets title to the consignation
property in the 2. Accrual of interest is
creditors, suspended from the moment of
who are only consignation.
authorized to sell it. 3. Deterioration or loss of the
thing or amount consigned,
occurring without the fault of
debtor, must be borne by
creditor from the moment of
deposit
4. Any increment or increase in
the value of the thing after
consignation inures to the
benefit of the creditor
CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS
OBLIGATIONS
debtor must indemnify the creditor for damages.
Effects of Loss
B. Impossibility of Performance (Arts. 1266-
Obligation to Deliver a Obligation to Deliver a
1267, CC)
Specific Thing Generic Thing
Extinguishment of the Loss of a generic thing
obligation if the thing was does not extinguish an When prestation becomes legally or physically
destroyed w/o fault of the obligation, UNLESS, impossible (by fortuitous event or force
debtor and before he has Delimited generic majeure), the debtor is released.Impossibility
incurred delay. things: kind or class is must have occurred without fault of debtor, and
limited itself, and the after the obligation has been constituted.
whole class perishes
PARTIAL IMPOSSIBILITY
rd 1. Courts shall determine whether it is so
Action against 3 persons - creditor shall have important as to extinguish the obligation.
all the rights of action the debtor may have 2. If debtor has performed part of the obligation
rd
against 3 persons by reason of the loss. when impossibility occurred, creditor must
pay the part done as long as he benefits
Presumption: The loss was due to the debtors from it.
fault, UNLESS: 3. If debtor received full payment from creditor,
1. Law provides that the debtor shall be liable he must return excess amount
even if the loss is due to fortuitous events corresponding to part which was impossible
(Arts. 1942, 1979, 2147, 2159) to perform.
2. Obligor is made liable by express stipulation
3. Nature of the obligation requires an Doctrine of Unforeseen Events
assumption of risk When the service has become so difficult as to
4. Fault or negligence concurs with the be manifestly beyond the contemplation of all
fortuitous event the parties, the obligor may be released in whole
5. Loss occurs after delay or in part (De Leon, 2003).
6. Debtor has promised to deliver the same
thing to two or more different parties Requisites:
7. Obligation arises from a criminal act 1. Event could not have been foreseen at the
8. Borrower in commodatum: saves his own time of the constitution of the contract.
things and not the thing of the creditor 2. Event makes performance extremely difficult
during a fortuitous event but not impossible.
3. Event not due to any act of the parties.
In Reciprocal Obligations 4. Contract is for future prestation.
Extinguishment of the obligation due to loss of
the thing or impossibility of performance affects
both the creditor and debtor; the entire juridical
relation is extinguished.
III. Condonation or Remission of the
Debt
Partial loss
Art. 1264: Partial loss due to a fortuitous event CONDONATION: An act of liberality, by virtue of
does not extinguish the obligation; thing due which, without receiving any equivalent, creditor
shall be delivered in its present condition, renounces the enforcement of the obligation.
without any liability on the part of the debtor, The obligation is extinguished either in whole or
UNLESS, the obligation is extinguished when in such part of the same which to remission
the part lost was of such extent as to make the refers.
thing useless.
CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS
Requisites Effects
1. Debt must be existing and demandable Arts. 1275- 1277:
2. Renunciation must be gratuitous; without 1. The obligation is extinguished from the time
any consideration the characters of the debtor and creditor are
3. Debtor must accept the remission merged in the same person.
2. In joint obligations, confusion does not
Effect extinguish the obligation except as regards
Art. 1273: Renunciation of the principal debt the corresponding share of the creditor or
shall extinguish the accessory obligations, but debtor in whom the two characters concur. 110
remission of the latter leaves the principal 3. In solidary obligations, confusion in one of
OBLIGATIONS
obligation in force. the solidary debtors extinguishes the entire
obligation.
Presumptions 4. Obligation is not extinguished when
Arts. 1271, 1272, 1274: confusion takes place in the person of
Whenever the private document in which the subsidiary debtor (e.g. guarantor), but
debt is found in the possession of the merger in the person of the principal debtor
debtor, it shall be presumed that the creditor shall benefit the former.
delivered it voluntarily, unless contrary is
proved.
Delivery of a private document evidencing V. Compensation
credit, made voluntarily by the creditor to the
debtor, implies the renunciation of the action
COMPENSATION: Offsetting of two obligations
of creditor against the latter.
which are reciprocally extinguished if they are of
the same value, or extinguished to the
Kinds
concurrent amount if of different values. (Asked
1. As to form (Art. 1270)
in 80, 81, 98, and 02)
Express: made formally; in accordance
with forms of ordinary donations
Compensation Confusion
Implied: inferred from the act of the
parties There must always be 2 Involves only one
2. As to extent obligations obligation
Total: entire obligation
Partial: may refer only to amount of There are 2 persons who are There is only one
indebtedness, or to an accessory mutually debtors and person whom the
obligation, or to some other aspect of creditors of each other in 2 characters of the
the obligation separate obligations, each creditor and debtor
3. As to constitution arising from the same cause. meet
Inter vivos: effective during the lifetime
of the creditor Kinds
Mortis causa: effective upon death of the 1. As to extent
creditor; must be contained in a will or Total: Debts are of the same amount
testament Partial: Amounts are not equal
2. As to origin
Legal: takes place by operation of law
Conventional: parties agree to
IV. Confusion or Merger of Rights compensate their mutual obligations
even when some requisite in Art. 1279 is
CONFUSION: The meeting in one person of the lacking (Art. 1282).
qualities of creditor and debtor of the same Judicial: decreed by court when there is
obligation. counterclaim; effective upon final
judgment (Art. 1283).
Requisites Facultative: when it can be claimed by
1. It should take place between principal debtor one of the parties who, however, has the
and creditor right to object to it.
2. It must be complete and definite- Parties
must meet all the qualities of creditor and
debtor in the obligation/ in the part affected.
CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS
OBLIGATIONS
same kind & quality 3. Both debts are
3. Both debts are due extinguished to the the same time, it creates a new one in lieu of the
4. Debts are liquidated concurrent amount, old. (Asked in 78, 88, 94 and 01)
and demandable eventhough the
5. There must be no creditors and debtors Requisites
retention or are not aware of the 1. A previous valid obligation
controversy over compensation. 2. Agreement of all the parties to the new
either of the debts, 4. Accessory obligation
rd
commenced by 3 obligations are also 3. Extinguishment of the old obligation
persons and extinguished.
communicated in
4. Validity of the new obligation
due time to the
debtor Novation is not presumed.
6. Compensation is not Express novation: Parties must expressly
prohibited by law disclose their intent to extinguish the old
obligation by creating a new one.
Compensation is prohibited in: Implied novation: No specific form is
1. Contracts of depositum required. There must be incompatibility
2. Contracts of commodatum between the old and new obligation or
3. Future support due by gratuitous title contract.
4. Civil liability arising from a penal offense (Asked in 79, 82, 88, and 94)
5. Obligations due to the government
6. Damage caused to the partnership by a California Bus Line v. State Investment (2003): In the
partner absence of an unequivocal declaration of
extinguishment of the pre-existing obligation, only
ASSIGNMENT OF CREDIT (Art. 1285): proof of incompatibility between the old and new
No effect and does not bind the debtor unless obligation would warrant a novation by implication.
and until the latter is notified of the assignment The restructuring agreement merely provided for a
or learns of it. new schedule of payments and authority giving Delta
to take over management and operations of CBLI in
Without case it fails to pay installments. There was no change
With Debtors With Debtors
Debtors in the object of prior obligations.
Consent Knowledge
Knowlege
Debtors Debtor may set Debtor may Test of Incompatibility
consent to up setup Whether or not the old and new obligation can
assignment of compensation compensation
stand together, each one having an independent
credit of debts of all credits
constitutes a (maturing) (maturing) prior existence. No incompatibility exists when they
waiver of before the to the can stand together. Hence, there is no novation.
compensation, assignment of assignment and Incompatibility exists when they cannot stand
unless he credit but not of also latter ones together. Hence, there is novation.
reserved his subsequent until he had
right to ones knowledge of Effects
compensation. the assignment.
In General If Original If New
Facultative compensation: Compensation which Obligation is Obligation is
can only be set up at the option of a creditor, when Void Void
legal compensation cannot take place because some 1. Old Novation is void if New obligation is
legal requisites in favor of the creditor are lacking. obligation is the original void, the old
Creditor may renounce his right to compensation, and extinguished obligation was obligation
he himself may set it up.As opposed to conventional and replaced void, except subsists, unless
compensation, facultative compensation is unilateral by the new when annulment the parties
one may be claimed intended that the
and does not depend upon the agreement of the stipulated. only by the former realations
parties.
CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS
OBLIGATIONS
before novation debtor and creditor
2. Knowledge or
consent of the old
Accessory obligations are also extinguished, debtor is not
but may subsist only insofar as they may required
rd
benefit 3 persons who did not give their Effects Effects
consent to the novation OR may not be 1. Old debtor is 1. Insolvency of the
affected upon agreement between the released new debtor revives
parties. 2. Insolvency of the the obligation of the
new debtor does not old debtor if it was
Original or new obligation with suspensive or revive the old anterior and public,
resolutory condition obligation in case the and known to the old
old debtor did not debtor.
Art. 1299: If original obligation was subject to a agree to expromision 2. New debtor can
suspensive or resolutory condition, the new 3. If with knowledge demand
obligation shall be under the same condition, and consent of old reimbursement of
unless it is otherwise stipulated. debtor, new debtor the entire amount he
can demand has paid, from the
Compatible Conditions Incompatible reimbursement the original debtor. He
Conditions entire amount paid may compel creditor
Fulfillment of both Original obligation is and w/ subrogation to subrogate him to
conditions: new extinguished, while of creditors rights all of his rights.
obligation becomes new obligation exists 4. If without knowledge
demandable Demandability shall of the old debtor,
Fulfillment of be subject to new debtor can
condition concerning fulfillment/ demand
the original nonfulfillment of the reimbursement only
obligation: old condition affecting it up to the extent that
obligation is revived; the latter has been
new obligation loses benefited w/o
force subrogation of
Fulfillment of creditors rights
condition concerning
rd
the new obligation: 2. Subrogation of a 3 person in the rights
no novation; of the creditor
requisite of a a. Conventional subrogation: by
previous valid and
agreement of the parties;
effective obligation
lacking rd
Requisites: the consent of the 3
person, and of the original parties (Art.
OBJECTIVE NOVATION 1301).
1. Change of the subject matter
Conventional Assignment of credit
2. Change of causa or consideration
subrogation
3. Change of the principal conditions or terms Debtors consent is Debtors consent is not
necessary required
SUBJECTIVE NOVATION Extinguishes an Refers to the same right
1. Substitution of the Debtor: Consent of obligation and gives which passes from one
creditor is an indispensable requirement rise to a new one person to another, without
both in expromision and delegacion. modifying or extinguishing
the obligation
CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS
OBLIGATIONS
debtors knowledge
rd
2. When a 3 person not interested in
the obligation pays with the express
or tacit approval of the debtor
3. When, even without the knowledge
of the debtor, a person interested in
the fulfillment of the obligation
without prejudice to the effects of
confusion as to the latters share
effects of confusion as to the latters
share
Effects
Total Partial
1. Transfers to the 1. A creditor, to whom
person subrogated partial payment has
the credit with all the been made, may
rights thereto exercise his right for
appertaining, either the remainder, and
against the debtor or shall be preferred to
rd
3 persons. the person
2. Obligation is not subrogated in his
extinguished, even if place in virtue of the
the intention is to partial payment.
pay it.
3. Defenses against the
old creditor are
retained, unless
waived by the debtor
CIVIL LAW REVIEWER Charts: PAYMENT & PERFORMANCE
OBLIGATIONS
1. Debtor or his: C = Creditor
2. Authorized Agent D = Debtor
3. Heir
4. Successor-in- interest
3rd PERSON
In GENERAL
Creditor /person in whose favor obligation was
constituted, or
His successor in interest, or
Any person authorized to received payment (1240) 115
OBLIGATIONS
G NOT valid
Payment to Incapacitated
Creditor (1241)
1) If C has kept the thing delivered
2) Insofar as payment benefited C
In GENERAL
The very prestation (thing or service
OBLIGATIONS
SPECIFIC thing has same value or more
deterioration Apply Art. valuable than that due
1189 (1244)
G:
C cannot demand a thing of superior quality;
can demand inferior
D cannot deliver a thing of inferior quality
Exceptions:
obligation is deemed extinguished
(estoppel) 117
1. Contrary stipulation * There must be intent to waive
OBLIGATIONS
2. When debt is in part liquidated & in part Except if C has no knowledge of
unliquidated the incompleteness
3. When there are several subjects/parties
are bound under different terms/conditions
In GENERAL
In the place designated in the obligation
OBLIGATIONS
wherever the thing was at
the moment obligation was
In GENERAL
constituted
Extrajudicial expenses
If no place is designated Unless there is a required by the payment
contrary express shall be borne by DEBTOR
stipulation
119
In GENERAL
OBLIGATIONS
Payment to be made when the creditor
makes a demand
(judicially/extrajudicially)
- end of Obligations -
CIVIL LAW REVIEWER TABLE of CONTENTS
CONTRACTS
Table of Contents
CONTRACTS
II. Object ................................................127
III. Cause ................................................127
CONTRACTS
Kristine Bongcaron
Patricia Tobias
Subject Editors
A. To formation:
1. Consensual: consent is enough; e.g.
ACADEMICS COMMITTEE sale
Kristine Bongcaron 2. Real: consent and delivery is required;
Michelle Dy e.g. deposit, pledge
Patrich Leccio 3. Solemn or formal: special formalities are
Editors-in-Chief required for perfection e.g. donation of
realty
PRINTING & DISTRIBUTION
Kae Guerrero B. To relation to other contracts:
1. Principal: may exist alone; e.g. lease
DESIGN & LAYOUT
2. Accessory: depends on another contract
Pat Hernandez for its existence; e.g. guaranty
Viktor Fontanilla 3. Preparatory: a preliminary step towards
Rusell Aragones
the celebration of a subsequent
Romualdo Menzon Jr.
Rania Joya contract; e.g. agency
G. To their purpose
CIVIL LAW REVIEWER Chapter I. GENERAL PROVISIONS
CONTRACTS
name
Requisites: D. CONSENSUALITY
a. There must be a stipulation in favor of a Contracts are perfected by mere consent and
third person from that moment, the parties are bound not only
b. The stipulation must be part, not the to the fulfillment of what has been expressly
whole of the contract stipulated but also to all consequences which, 124
c. The contracting parties must have according to their nature, may be in keeping with
CONTRACTS
clearly and deliberately conferred a good faith, usage and law, (Art.1315) EXCEPT
favor upon a third person, NOT a mere real contracts, such as deposit, pledge and
incidental benefit or interest. commodatum, are not perfected until the
d. The third person must have delivery of the object of the obligation.
communicated his acceptance to the (Tolentino)
obligor before its revocation
e. No relation of agency exists between E. OBLIGATORY FORCE
any of the parties and the third person
favored Art. 1159, Civil Code. Obligations arising from
contracts have the force of law between the
Florentino v. Encarnacion, 1977: contracting parties and should be complied with in
a. Contracts to perform personal acts good faith.
which cannot be as well performed by
others are discharged by the death of Art. 1308, Civil Code. The contract must bind both
contracting parties; its validity or compliance cannot
the promissor. Conversely, where the
be left to the will of one of them.
service or act is of such a character that
it may as well be performed by another, Art. 1315, Civil Code. Contracts are perfected by
or where the contract, by its terms, mere consent, and from that moment the parties are
shows that performance by others bound not only to the fulfillment of what has been
was contemplated, death does not expressly stipulated but also to all the consequences
terminate the contract or excuse which, according to their nature, may be in keeping
nonperformance. with good faith, usage and law.
b. In this case the stipulation is a
stipulation pour atrui because the true Art. 1356, Civil Code. Contracts shall be obligatory,
intent of the parties is to confer a direct in whatever form they may have been entered into,
and material benefit upon a third party. provided all the essential requisites for their validity
are present. However, when the law requires that a
contract be in some form in order that it may be valid
Accion Directa: Where the statute
or enforceable, or that a contract be proved in a
authorizes the creditor to sue on his certain way, that requirement is absolute and
debtors contract, e.g. lessor v. sub- indispensable. In such cases, the right of the parties
lessee (Art. 1651,1652) (J.B.L. Reyes) stated in the following article cannot be exercised.
3. Fraud
Where the contract is entered into in order to
defraud a person (Art. 1313)
4. Tortuous Interference
Where the third person induces a
contracting party to violate his contract
(Art.1314).
CIVIL LAW REVIEWER Chapter II. ESSENTIAL REQUISITES
CONTRACTS
2. Acceptance
Requisites: Requisites:
1. It must be manifested by the concurrence of a. Unqualified and Unconditional, i.e. it
the offer and acceptance (Arts. 1319-1326) must conform with all the terms of the
2. The contracting parties must possess the offer, otherwise it is a counter-offer (Art.
necessary legal capacity (Arts. 1327-1329) 1319)
3. It must be intelligent, free, spontaneous, and b. Communicated to the offeror and
real (not vitiated) (Arts. 1330-1346) learned by him (Arts. 1319, 1322). If
made through an agent, the offer is
A. Concurrence accepted from the time the acceptance
1. Offer: a unilateral proposition which one is communicated to such agent.
party makes to the other for the celebration c. Express/Implied, but is not presumed
of the contract. (Tolentino)
OPTION CONTRACT: A preparatory
Requisites: contract in which one party grants to the
a. Definite other, for a fixed period, the option to decide
b. Intentional whether or not to enter into a principal
c. Complete contract. (Art. 1324)
CONTRACTS
property under administration
actions against them would be dropped. A contract is
Public officers-state property under
valid even though one of the parties entered into it
their administration against his wishes and desires, or even against his
Justices, judges, prosecutors, clerks better judgment. Contracts are also valid even though
of court, lawyers-property attached they are entered into by one of the parties without
in litigation. hope of advantage or profit.
e. Members of Ethnic Minorities: their
contracts (excluding sale of personal 3. Violence
property or personal service contracts) Irresistible force used to extort consent
must be approved by the Governor or (J.B.L. Reyes)
his representative. (Public Land Act)
4. Undue Influence
Incapacity to Give Disqualification to When a person takes improper advantage of
Consent (Art. 1327) Contract (Art.1329) his power over the will of another, depriving
Restrains the exercise of Restrains the very right the latter of a reasonable freedom of choice
the right to contract itself (Art. 1337).
Based on subjective Based on public policy
circumstances of certain and morality
persons Circumstances:
a. Relationship of the parties (family,
Voidable Void spiritual, confidential etc.)
b. That the person unduly influenced was
suffering from infirmity (mental
C. Vices of Consent (Art. 1330, CC) (MIVUF) weakness, ignorance etc.) (Art.1337)
1. Mistake
Inadvertent and excusable disregard of a 5. Fraud
circumstance material to the contract. (J.B.L. When through insidious words or
Reyes) machinations of one of the contracting
In order that mistake may invalidate parties, the other is induced to enter into a
consent, it should refer to the contract which, without them, he would not
substance of the thing which is the have agreed to (Art. 1338).
object of the contract, or to those
conditions which have principally moved Art. 1339, Civil Code. Failure to disclose facts, when
one or both parties to enter into the there is a duty to reveal them, as when the parties are
bound by confidential relations, constitutes fraud.
contract (Art.1331)
Art. 1340, Civil Code. The usual exaggerations in
Mistake of Fact Mistake of Law Mutual Mistake
trade, when the other party had an opportunity to
When one or When one or Must be as know the facts, are not in themselves fraudulent.
both contracting both parties to the legal
parties believe arrive at an effect of an
Art. 1341, Civil Code. A mere expression of an
that a fact exists erroneous agreement
opinion does not signify fraud, unless made by an
when in reality it conclusion on Must be
expert and the other party has relied on the former's
does not, or vice the mutual
special knowledge.
versa interpretation of Real purpose
a question of of the parties
law or the legal must have Art. 1342, Civil Code. Misrepresentation by a third
effects been person does not vitiate consent, unless, such
frustrated misrepresentation has created substantial mistake
CIVIL LAW REVIEWER Chapter II. ESSENTIAL REQUISITES
and the same is mutual. Aleatory contract: where one of the contracting
parties assumes the risk that the thing will never
Art. 1343, Civil Code. Misrepresentation made in come into existence, e.g. insurance
good faith is not fraudulent but may constitute error.
III. Cause
SIMULATION OF CONTRACTS (Art. 1345-
1346): Declaration of a non-existent will made
deliberately for the purpose of producing the It is the impelling reason for which a party
appearance of a transaction that does not exist, assumes an obligation under a contract.
or which is different from the one which actually
arose. (J.B.L. Reyes) Requisites:
a. Existing
Absolute Relative b. Licit or Lawful 127
No real transaction is Real transaction is hidden c. True
CONTRACTS
intended
Fictitious contract Disguised contract Cause in:
Void Bound as to hidden
agreement, so long as it Onerous Renumeratory Pure
does not prejudice a third Contracts Contracts Beneficence
person and is not contrary As to each of The service or Mere
to law, morals, good the contracting benefit which is liberality of
customs, public order or parties is remunerated the
public policy understood to benefactor
be the
undertaking or
II. Object the promise of
the thing or
service by the
The thing right or service which is the subject other party
matter of the obligation arising from the contract.
In Villaroel v. Estrada (1940), where a moral
Requisites: obligation is based upon a previous civil obligation,
a. Lawful: Not contrary to law, morals, good which has already been barred by the statute of
customs, public order or public policy. limitations at the time the contract is entered into, it
b. Actual or possible constitutes a sufficient cause or consideration to
support a contract (Natural Obligation).
c. Transmissible: Within the commerce of man BUT,
d. Determinate or determinable In Fisher v. Robb (1939), if the moral obligation arises
wholly from ethical consideration, it cannot constitute
All things or services may be the object of a sufficient cause to support an onerous contract, as
contracts, EXCEPT: when the promise is made on the erroneous belief
Things which are outside the commerce of that one was morally responsible for the failure of an
men enterprise (Moral Obligation).
Intransmissible rights
Future inheritance except in cases Cause Defined Effect
authorized by law Lack of Absence or total The contract
Impossible things or services Cause lack of cause confers no right
and has no legal
Objects which are indeterminable as to their
effect
kind, the genus should be expressed Illegality of Contrary to law, Null and Void
Cause morals, good
In order that a thing, right or service may be the customs, public
object of a contract, it should be in existence at policy and
the moment of the celebration of the contract, or public order
at least, it can exist subsequently or in the Falsity of Cause is stated Void if it should
future. cause but is untrue not be proved that
it was founded
A FUTURE THING may be the object of a upon another
cause which was
contract, such contract may be interpreted as a: true and lawful
Conditional contract: where its efficacy Lesion or Cause is not Shall not invalidate
should depend upon the future existence of inadequacy proportionate to the contract
the thing of cause object except when
CIVIL LAW REVIEWER Chapter II. ESSENTIAL REQUISITES
a)there is fraud,
mistake, undue
influence
b)when parties
intended a
donation
CONTRACTS
CIVIL LAW REVIEWER Chapter III. FORMS OF CONTRACTS
CONTRACTS
Spiritual System of the Spanish Code: The law looks
3. Partnership where immovable property
more on the spirit rather than the form of contracts. or real rights are contributed to the
common fund (Arts.1771 and 1773)
Exceptions:
When the law requires that a contract be in BF Corporation v. CA, 1998: A contract may be
encompassed in several instruments even though
some form for validity (Arts. 1357-1358) every instrument is not signed by the parties since it is
When the law requires that contract be in sufficient if the unsigned instruments are clearly
some form to be enforceable (Statute of identified or referred to and made part of the signed
Frauds) instruments.
CONTRACTS
parties, the the least the doubt shall
instrument; contract shall transmission be settled in
3. Such failure to express their true intention is be null and of rights and favor of the
due to mistake, fraud, inequitable conduct, void. interests shall greatest
or accident; and prevail. reciprocity of
4. There is clear and convincing proof of interests.
mistake, fraud, inequitable conduct, or
accident.
I. RESCISSIBLE
II. VOIDABLE
III. UNENFORCEABLE
IV. VOID OR INEXISTENT
CONTRACTS
Contracts of entered into to
contracts? (Art representation to things in
guardians defraud existing
1381; see also Art of absentees litigation
creditors
1382)
What makes it When the acts of When the acts When the creditors If entered into by
defective? administration of administration cannot in any other the defendant
cause LESION or cause LESION manner collect the without the
damage to the or damage to claims due them knowledge &
WARD they the ABSENTEE approval of the
represent by more they represent litigants or
than 25% of the by more than competent judicial
value of the thing 25% of the value authority
of the thin
Effect on the Valid until rescinded (Art 1380)
Contract
How to rescind? Direct Action (different from action for Accion Pauliana for Contracts in Fraud of
rescission under Art 1191) Creditors
By ward, or by
guardian ad litem
of ward during
incapacity of ward
in an action
against the
original guardian
When to rescind Within four years Within 4 years Within 4 years from Within 4 years
(Art 1389) from [re-] gaining from knowledge knowledge of from knowledge of
capacity of domicile of fraudulent contract fraudulent contract
absentee
CIVIL LAW REVIEWER Chapter VI. DEFECTIVE CONTRACTS
What makes it
Incapacity of one party to the Consent vitiated by mistake, violence,
defective? (Art
contract intimidation, undue influence or fraud
1390)
Effect on the Valid until annulled by competent court (Art 1390 last par)
Contract
How to annul? 1. Directly, by an action for annulment
2. Indirectly, by counterclaim asking for positive action of the court to set aside the
contract
CONTRACTS
institute proceedings (art 1401 par 1);
2. the right of action is based upon the incapacity of any one of the contracting
parties and the thing is lost through the fault or fraud of the plaintiff (Art 1401 par
2)
Who can/cannot 1. Parties who are obliged principally or subsidiarily
annul? 2. Persons who are capable cannot allege the incapacity of those with whom they
(Art 1397) contracted
3. Persons who exerted intimidation, violence, or undue intimidation, or employed
fraud, or caused mistake, cannot base their action upon these flaws of the
contract
When? (Art 1391) Within four years after guardianship of Within four years
minors or incapacitated persons 1. After intimidation, violence or undue
ceases influence ceases
2. From the time of discovery of mistake
or fraud
Effect of 1. Mutual restitution of the things delivered, along with fruits and price paid with
Annulment interest (Art 1398)
2. Damages to be paid by party who caused defect of the contract, by virtue of
Article 20 and 21 of the Civil Code
How to Cure 1. Express (written or oral manifestation) or tacit ratification (acts or conduct) by
Defect? (Arts injured party, or guardian of incapacitated person.
1392 - 1396) - Ratification does not require the conformity of the contracting party
who has no right to bring the action for annulment (Art 1395)
CIVIL LAW REVIEWER Chapter VI. DEFECTIVE CONTRACTS
Effect on the No effect unless ratified. Cannot be enforced by a proper action in court.
Contract
How to assail? Not by direct action. Not by direct action. Not by direct action. 133
1. As a defense, by 1. As a defense, by motion 1. As a defense, by
CONTRACTS
motion to dismiss the to dismiss the complaint motion to dismiss the
complaint on the on the ground that the complaint on the
ground that the contract contract is unenforceable; ground that the
is unenforceable 2. Objection to the contract is
presentation of oral unenforceable
evidence to prove an oral
contract (See Art 1405)
Who can assail? By person whose name By party against whom the By party against whom
*an the contract was entered contract is being enforced; the contract is being
unenforceable into; By owner of property. or his privies. enforced; or his privies;
contract cannot or parents or guardians
be assailed by persons, as it is a
third persons (Art personal defense
1408)
When? When a party asks the court to enforce the contract
CONTRACTS
beginning (Art 3.Those whose cause or object did not exist at the time of the transaction
1409) 4.Those whose object is outside the commerce of men
5.Those which contemplate an impossible service
6.Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained
7.Those expressly prohibited or declared void by law
How to assail? 1. File for action for declaration of inexistence or nullity of contract
2.As a defense during trial (Art 1409 last par). Such defense not available to third
persons not directly affected by contract (Art 1421)
3.In pari delicto applies when cause or object of contract constitutes a criminal
offense (Art 1411)
Who can assail? 1. Innocent party Art 1. Any of the parties 1. Any person whose
1411 par 2; Art 1412 2. Any person whose interests are
par2) interests are directly directly affected by
2. Less-guilty party, upon affected by the contract the contract Art
court discretion (Art 1421) (1421)
3. Incapacitated person 2. By party for whose
who is a party to an protection the
illegal contract, upon prohibition of the
court discretion (Art law is designed (Art
1415) 1416)
4. Any person whose
interests are directly
affected by the
contract (Art 1421)
When? The action or defense does not prescribe (Art 1410)
- end of Contracts -
CIVIL LAW REVIEWER TABLE of CONTENTS
PROPERTY
Table of Contents
PROPERTY
II. General Principles of Accession .......147 X. Conditions Not Affecting Usufruct..... 194
III. Kinds of Accession............................147 Chapter VIII. Easement ................................ 196
IV. Principles Governing Each Kind of I. Concept............................................. 196
Accession...................................................147 II. Essential Features ............................ 196
Chapter IV. Quieting of Title........................152 III. Classification of Servitudes............... 197
I. In General .........................................152 IV. General Rules Relating to Servitudes
II. Purpose .............................................152 198
III. Nature: Quasi in Rem........................152 V. Modes of Acquiring Easements ........ 198
IV. Requisites .........................................152 VI. Rights and Obligations of Owners of
V. Prescription of Action ........................153 Dominant and Servient Estates ................. 199
Chapter V. Co-Ownership............................154 VII. Modes of Extinguishment of
I. Definition ...........................................154 Easements................................................. 200
II. Characteristics ..................................154 VIII. Legal Easements .......................... 202
III. Difference between Co-ownership and Chapter IX. Nuisance ................................... 212
Joint Tenancy.............................................155 I. Definition ........................................... 212
IV. Difference between Co-ownership and II. Classes ............................................. 212
Partnership.................................................155 III. Liability in Case of Nuisance............. 213
V. Sources of Co-Ownership .................155 IV. Regulation of Nuisances ................... 214
VI. Rights of Each Co-owner over the Thing Chapter X. Modes of Acquiring Ownership
or Property Owned in Common .................157 ....................................................................... 217
VII. Implication of Co-owners Right over I. Mode v. Title ..................................... 217
His Ideal Share ..........................................161 II. Mode ................................................. 217
VIII. Rules on Co-Ownership Not Chapter XI. Donation ................................... 222
Applicable to CPG or ACP.........................161 I. Nature ............................................... 222
IX. Special Rules on Ownership of Different II. Requisites ......................................... 222
Stories of a House as Differentiated from III. Kinds ................................................. 222
Provisions of the Condominium Act...........162 IV. Who May Give or Receive Donations
X. Extinguishment of Co-Ownership .....166 223
Chapter VI. Possession ...............................168 V. Who May Not Give or Receive
I. Definition ...........................................168 Donations................................................... 224
II. Degrees of Possession .....................169 VI. Acceptance ....................................... 225
III. Classes of Possession ......................169 VII. Form ............................................. 225
IV. Cases of Possession.........................169 VIII. What May Be Donated ................. 225
V. What Things May be Possessed ......170 IX. Effect ................................................. 226
VI. What May Not Be Possessed by Private X. Revocation and Reduction................ 227
Persons......................................................171 Chapter XII. Lease........................................ 232
VII. Acquisition of Possession .............171 I. General Characteristics .................... 232
VIII. Effects of Possession ...................173 II. Kinds ................................................. 232
IX. Effects of Possession in the Concept of III. Lease of Things ................................ 232
Owner ........................................................177
X. Presumption in Favor of the
Possessorfor Acquisitive Prescription ....178
XI. Possesion May Be Lost By ...............179
CIVIL LAW REVIEWER Chapter I. DEFINITION and CLASSIFICATION of PROPERTY
PROPERTY TEAM
Chapter I. Definition and Classification of
PROPERTY
Property
Prof. Solomon Lumba
Faculty Editor
Michelle Go I. DEFINITION
Lead Writer
II. CLASSIFICATION
Erika Esperas A. UNDER THE CIVIL CODE
Katrina Michelle Mancao
Celie Mari Santos
B. BY OWNERSHIP
Writers C. OTHER CLASSIFICATIONS
CIVIL LAW
I. Definition
Kristine Bongcaron
Patricia Tobias
Subject Editors PROPERTY: Mass of things or objects
characterized by
ACADEMICS COMMITTEE 1. Utility capacity to satisfy human wants 137
Kristine Bongcaron 2. Individualityand substantivity separate and
PROPERTY
Michelle Dy autonomous existence
Patrich Leccio 3. Susceptibility of being appropriated those
Editors-in-Chief which cannot be appropriated because of
PRINTING & DISTRIBUTION their distance, depth or immensity cannot be
considered as things (i.e. stars, ocean)
Kae Guerrero
them permanently attached to the land, and b. However, by special treatment of Act
forming a permanent part of it; the animals 1508 (Sec. 7, Chattel Mortgage Law),
in these places are included; growing crops may be subject of a
7. Fertilizer actually used on a piece of land; Chattel Mortgage.
8. Mines, quarries, and slag dumps, while the c. For the purpose of attachment: growing
matter thereof forms part of the bed, and crops are to be attached in the same
waters either running or stagnant; manner as realty. (Rule 59, Sec. 7)
9. Docks and structures which, though floating,
are intended by their nature and object to 2. Par. 3: Things incorporated
remain at a fixed place on a river, lake, or a. Res vinta in Roman Law
coast; b. Attachment in a fixed manner:
10. Contracts for public works, and servitudes breakage or injury in case of separation
and other real rights over immovable will be substantial e.g. wells, sewers,
property. aqueducts and railways
Whether attached by the owner
Immovables by Nature himself or some other person 138
Those which cannot be moved from place to 3. Par. 7: Fertilizer
PROPERTY
place; their intrinsic quality have no utility except Actually used means it has been spread
in a fixed place (Par. 1 & 8) over the land.
1. Par. 1: Lands, building, roads and
constructions
a. Buildings Immovables by Destination
To be considered a building, their Those which are essentially movables but by the
adherence to the land must be purpose for which they have been placed in an
permanent and substantial. immovable, partake of the nature of an
Buildings have been considered as immovable because of the added utility derived
immovables, despite: therefrom (Par. 4, 5, 6 & 9)
Treatment by the parties e.g. 1. Par. 4: Fixtures and ornaments
they constitute a separate Requisites:
mortgage on the building and a. Placed by the owner or by the tenant as
the land (Punzalan v. agent of the owner;
Lacsamana) b. With intention of attaching them
Separate Ownership i.e. a permanently even if adherence will not
building on rented land is still involve breakage or injury.
considered an immovable.
(Tolentino) Where the improvement or ornaments
2. Par. 8: Mineral deposits and waters placed by the lessee are not to pass to the
a. Mineral Deposits owner at the expiration of the lease, they
Minerals still deposited in the soil remain movables for chattel mortgage
When minerals have been purposes. (Davao Sawmill v. Castillo)
extracted, they become chattel.
b. Slag Dump: dirt and soil taken from a 2. Par. 3 v. Par. 4
mine and piled upon the surface of the Par. 3 Par. 4
ground. Inside the dump can be found Cannot be separated from Can be separated from
the minerals. immovable without immovable without
c. Waters: those still attached to or running breaking or deterioration breaking or deterioration
thru the soil or the ground. Must be placed by the
Need not be placed by the
owner, or by his agent,
owner
expressed or implied
Immovables by Incorporation Real property by
Those which are essentially movables but are Real property by
incorporation and
attached to an immovable in such a way as to be incorporation
destination
an integral part thereof (Par. 2, 3, 4, 6 & 7)
1. Par. 2: Trees and plants 3. Par. 5: Machinery and equipment
a. Trees and plants: only immovables a. Immovable characteristic depends upon
when they are attached to the land or their being destined for use in the
form an integral part of an immovable industry or work in the tenement;
When they have been cut or The moment they are separated,
uprooted, they become movables. (from the immovable or from the
industry or work in which they are
CIVIL LAW REVIEWER Chapter I. DEFINITION and CLASSIFICATION of PROPERTY
utilized) they recover their usufruct and lease of real property for a
condition as movables. period of 1 year and registered
If it is still needed for the industry
but separated from the tenement Effect of Enumeration: Art. 415 not
temporarily, the property continues absolute
to be immovable. 1. Parties may by agreement treat as movable
b. Requisites for Immovability in Par. 5: that which is enumerated by law as
Placed by the owner or the tenant immovable, but effective only as to them.
as agent of the owner;
Adapted to the needs of the industry The view that parties to a deed of chattel
or work carried on mortgage may agree to consider a house as
EXCEPT: When estoppel operates personal property for the purposes of said
contract, "is good only insofar as the
Parties to a contract may by agreement contracting parties are concerned. It is
treat as personal property that which by based, partly, upon the principle of estoppel"
nature would be real property, as long (Evangelista vs. Alto Surety) 139
as no interest of third parties would be
PROPERTY
prejudiced. That characterization is 2. For purposes of taxation, improvements on
effective as between the parties. land are commonly taxed as realty, even
(Makati Leasing v. Wearever) though for some purposes, they might be
considered as personalty.
c. EFFECT of Attachment
Machinery become part of the It is a familiar phenomenon to see things
immovable. classified as real property for purposes of
The installation of machinery and taxation, which on general principle, might
equipment in a mortgaged sugar be considered personal property. (Manila
central for the purpose of carrying Electric v. Central Bank)
out the industrial functions of the
latter and increasing production,
constitutes a permanent MOVABLES OR PERSONAL PROPERTY
improvement on said sugar central
and subjects said machinery and Article 416, Civil Code. The following things are
equipment to the mortgage deemed to be personal property:
constituted thereon. (Berkenkotter 1. Those movables susceptible of
v. Cu Unjieng) appropriation which are not included in the
preceding article;
2. Real property which by any special
4. Par. 6: Animal houses and animals therein provision of law is considered as personal
a. Requisites: property;
Placed by the owner or the tenant 3. Forces of nature which are brought under
as agent of the owner, with the control by science; and
intention of permanent attachment; 4. In general, all things which can be
Forming a permanent part of the transported from place to place without
immovable. impairment of the real property to which
they are fixed.
5. Par. 9: Docks and fixed floating structures
a. A floating house tied to a shore or bank Article 417, Civil Code. The following are also
considered as personal property:
post and used as a residence is
1. Obligations and actions which have for their
considered real property, considering object movables or demandable sums; and
that the waters on which it floats are 2. Shares of stock of agricultural, commercial
considered immovables. and industrial entities, although they may
b. But if the floating house makes it a point have real estate.
to journey from place to place, it
assumes the category of a vessel, and
is considered immovable property Tests to Determine Movable Character
1. By exclusion everything NOT included in
Immovables by Analogy (Par. 10) Article 415
Contracts for public works, servitudes, other
real rights over immovable property e.g. Parties cannot by agreement treat as
immovable that which is legally movable.
CIVIL LAW REVIEWER Chapter I. DEFINITION and CLASSIFICATION of PROPERTY
PROPERTY
against or intimidation of persons nor
3. By special provision of law real property is force upon things, shall take personal
considered as personal property property of another without the latter's
a. Growing crops under the Chattel consent.
Mortgage Law
b. Machinery installed by a lessee not Form of Contracts Involving Movables and
acting as agent of the owner (Davao Immovables
Sawmill v. Castillo) 1. Subject matter of specific contracts: only
c. Intellectual property considered real property can be the subject of real
personal property; it consists in the mortgage (Art. 2124) and antichresis (Art
pecuniary benefit which the owner can 2132); only personal property can be the
get by the reproduction or manufacture subject of voluntary deposit (Art. 1966),
of his work. pledge (Art. 2094) and chattel mortgage (Act
1508)
4. By forces of nature e.g. electricity, gas, 2. Donations of real property are required to
heat, oxygen be in a public instrument (Art. 749) but a
donation of a movable mat be made orally or
in writing (Art. 748)
IMPORTANCE AND SIGNIFICANCE OF
CLASSIFICATION UNDER THE CIVIL CODE Acquisitive Prescription
1. Real Property can be acquired by
Criminal Law prescription in 30 years (bad faith) and 10
1. Usurpation of property can take place only years (good faith).
with respect to real property. 2. Movables can be acquired by prescription in
8 years (bad faith) and 4 years (good faith).
Art. 312. Occupation of real property
or usurpation of real rights in Venue
property. 1. Rule 4, Sec. 1: Venue of real actions.
Actions affecting title to or possession of
Any person who, by means of violence real property, or interest therein, shall be
against or intimidation of persons, shall commenced and tried in the proper court
take possession of any real property or which has jurisdiction over the area
shall usurp any real rights in property wherein the real property involved, or a
belonging to another, in addition to the portion thereof, is situated. Forcible
penalty incurred for the acts of violence entry and detainer actions shall be
executed by him, shall be punished by a commenced and tried in the municipal
fine from 50 to 100 per centum of the trial court of the municipality or city
gain which he shall have obtained, but wherein the real property involved, or a
not less than 75 pesos. portion thereof, is situated.
CIVIL LAW REVIEWER Chapter I. DEFINITION and CLASSIFICATION of PROPERTY
PROPERTY
Action for Recovery of Possession Article 424, Civil Code. Property for public use, in
1. Possession of real property may be the provinces, cities, and municipalities, consist of
recovered through accion reivindicatoria, the provincial roads, city streets, municipal streets,
accion publiciana, forcible entry and the squares, fountains, public waters, promenades,
and public works for public service paid for by said
unlawful detainer.
provinces, cities, or municipalities.
2. Possession of movable property may be
recovered through replevin.
Property of public dominion is outside the
commerce of man
B. CLASSIFICATION BY OWNERSHIP
They cannot be the subject matter of private
contracts, cannot be acquired by
Article 419, Civil Code. Property is either of public
dominion or of private ownership. prescription and they are not subject to
attachment and execution nor burdened with
a voluntary easement.
PROPERTY OF PUBLIC DOMINION
Article 420, Civil Code. The following things are PRIVATE OWNERSHIP
property of public dominion: Can be exercised by the State in its private
1. Those intended for public use, such as capacity or by private persons
roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, Patrimonal Property of the State
shores, roadsteads, and others of similar Article 421, Civil Code. All other property of the
character; State, which is not of the character stated in the
2. Those which belong to the State, without preceding article, is patrimonial property.
being for public use, and are intended for 1. Owned by the State over which it has the
some public service or for the development same rights as private individuals in relation
of the national wealth.
to their own property
2. Subject to the administrative laws and
Public Dominion As defined by Art. 420, CC
regulations on the procedure of exercising
Public Domain Used in Article XII, Section 2, of such rights.
the 1987 Constitution 3. Examples: friar lands, escheated properties
Public Lands Public Land Act
and commercial buildings
4. Purpose of Patrimonial Property
Characteristics of Public Dominion a. Enables the State to attain its economic
1. Not owned by the State and its subdivisions ends
but pertains to it as territorial sovereign, to b. Serves as a means for the States
hold in trust for the interest of the subsistence and preservation
community. c. Enables the State to fulfill its primary
2. Intended for public use, and not for use by mission
the State as a juridical person 5. Conversion of Property of Public
3. Cannot be the subject of appropriation either Dominion to Patrimonial Property
by the State or by private persons
CIVIL LAW REVIEWER Chapter I. DEFINITION and CLASSIFICATION of PROPERTY
PROPERTY
special laws.
Private Land converted to Property of Public
1. The province or municipality, as a juridical Dominion through abandonment and
entity, also possesses private property to reclamation
answer for its economic necessities. Through the gradual encroachment or
2. Classification of Properties of provinces, erosion by the ebb and flow of the tide,
cities and municipalities (Salas v. private property may become public IF the
Jarencio) owner appears to have ABANDONED the
a. Properties acquired with their own land, and permitted it to be totally destroyed
funds in their private or corporate so as to become part of the shore. The land
capacity over which the political having disappeared on account of the
subdivision has ownership and control gradual erosion, and having remained
b. Properties of public dominion held in submerged until they were reclaimed by the
trust for the States inhabitants are government, they are public land.
subject to the control and supervision of (Government v. Cabangis)
the State
3. A municipal corporation must prove that
they acquired the land with their own C. OTHER CLASSIFICATIONS
corporate funds
The presumption is that land comes from the By their physical existence
State upon the creation of the municipality. 1. Corporeal
All lands in the possession of the All property the existence of which can be
municipality, EXCEPT for those acquired determined by the senses (res qui tangi
with its private funds, are deemed to be possunt)
property of public dominion, held in trust for 2. Incorporeal
the State for the benefit of its inhabitants. a. Things having abstract existence,
created by man and representing value.
Congress has paramount power to dispose b. Includes rights over incorporeal things,
of lands of public dominion in a municipality, credits, and real rights other than
the latter being a subdivision only for ownership over corporeal things.
purposes of local administration. (Salas v.
Jarencio) By their autonomy or dependence
1. Principal
Private Property of Private Persons Those to which other things are considered
Article 425, Civil Code. Property of private
dependent or subordinated, such as the land
ownership, besides the patrimonial property of the
State, provinces, cities, and municipalities, consists on which a house is built.
of all property belonging to private persons, either 2. Accessory
individually or collectively. Those which are dependent upon or
subordinated to the principal. They are
Refers to all property belonging to private destined to complete, enhance or ornament
persons, natural or juridical, either another property.
CIVIL LAW REVIEWER Chapter I. DEFINITION and CLASSIFICATION of PROPERTY
PROPERTY
the object, as when it is merely for
exhibition.
Susceptibility to substitution
1. Fungibles
Things which because of their nature or the
will of the parties, are capable of being
substituted by others of the same kind, not
having a distinct individuality.
2. Non-Fungibles
Things which cannot be substituted for
another
By susceptibility to deterioration
1. Deteriorable that deteriorate through use or
by time
2. Non-deteriorable
By reason of designation
1. Generic
That which indicates its homogenous nature,
but not the individual such as a horse,
house, dress, without indicating it.
CIVIL LAW REVIEWER Chapter II. OWNERSHIP
PROPERTY
Completely subjected to his will or public function
In everything not prohibited by public c. Force used is reasonably necessary to
law or the rights of another repel or prevent the aggression (least
damage rule)
d. Physical invasion must not have
succeeded yet, and possession has not
been lost
II. Rights Included in Ownership Once property is lost, the owner can
no longer use force, but must file
Art. 428, Civil Code action to recover
1. The owner has the right to enjoy and
dispose of a thing, without other limitations Right to Enclose or Fence
than those established by law. Article 430, Civil Code. Every owner may enclose
2. The owner has also a right of action against or fence his land or tenements by means of walls,
ditches, live or dead hedges, or by any other means
the holder and possessor of the thing in
without detriment to servitudes constituted thereon.
order to recover it.
But right is limited by servitudes existing
5 + 1 BUNDLE OF RIGHTS thereon
1. Jus Utendi: Right to enjoy and receive what The owner of lower lands cannot erect
the property produces works that will impede or prevent such an
2. Jus Fruendi: Right to receive fruits easement or charge, constituted and
3. Jus Abutendi: Right to consume a thing by imposed by the law upon his estate for the
use benefit of higher lands belonging to different
1. Jus Disponendi: Right to to alienate, owners; neither can the latter do anything to
encumber, transform or even increase or extend the easement. It is true
destroy the thing owned that the Code authorizes every owner to
2. Jus Vindicandi: Right to recover enclose his estate by means of walls,
possession of property based on a ditches, fences or other device, but this right
claim of ownership is limited by the easement imposed upon his
4. Jus Possidendi: Right to possess the estate. (Lunod v. Meneses)
property (Implied from all the other rights)
Right to Receive Just Compensation (in case
III. Specific Rights under the Civil Code of expropriation)
Article 435, Civil Code. No person shall be
Specific Rights deprived of his property except by competent
1. Right to Self Help authority and for public use and always upon
payment of just compensation.
2. Right to Enclose of Fence
3. Right to Receive Just Compensation Should this requirement be not first complied with,
4. Right to Accession the courts shall protect and, in a proper case,
5. Right to Space and Subsoil restore the owner in his possession.
6. Right to Hidden Treasure
7. Right to Recover Possession
CIVIL LAW REVIEWER Chapter II. OWNERSHIP
PROPERTY
a. Can construct works, make plantings Prescription of Action: 30 years
and excavations b. Accion Publiciana: Recovery of a better
b. Respecting servitudes and reasonable right to possess (de jure)
requirements of aerial navigation Judgment as to who has the better
c. Easement of lateral and subjacent right of possession
support Also, actions for ejectment not filed
2. Subject to laws and ordinances within 1 year must be filed as accion
The doctrine that ownership of the land publiciana
extends to the periphery of the universe Prescription: 10 years
(Cujus est solum ejus est usque ad c. Accion Interdictal: Recovery of
coelum, usque ad infernos) is no longer actual/physical possession (de facto)
applied in the modern world, in view of the FORCIBLE ENTRY: Lawful possessor
doctrine that the air is a public highway. (US deprived through FISTS:
v. Causby) o FISTS (Force, Intimidation,
Strategy, Threats, Stealth)
Right to Hidden Treasure o Prescription: 1 year from
Article 438, Civil Code. Hidden treasure belongs to dispossession (force,
the owner of the land, building, or other property on
intimidation, threats) or from
which it is found.
knowledge of dispossession
Nevertheless, when the discovery is made on the (strategy, stealth)
property of another, or of the State or any of its UNLAWFUL DETAINER: Possessor
subdivisions, and by chance, one-half thereof shall refused to vacate upon demand by
be allowed to the finder. If the finder is a trespasser, owner
he shall not be entitled to any share of the treasure. o Legal possession (by
permission/tolerance) becomes
If the things found be of interest to science or the unlawful upon failure to vacate
arts, the State may acquire them at their just price,
o Prescription of action: 1 year
which shall be divided in conformity with the rule
stated. from last notice to vacate
Article 439, Civil Code. By treasure is understood, In case of leases of residential units, the
for legal purposes, any hidden and unknown deposit grounds for judicial ejectment are limited to
of money, jewelry or other precious objects, the those enumerated in, RA 9653: Rent
lawful ownership of which does not appear Control Law of 2009 (See Section on
Special Laws)
1. Legal concept of hidden treasure
a. Consist of money jewels or other 3. Requisites for Recovery [Art. 434, Civil
precious objects Code]
b. Hidden and unknown, such that the a. Property must be identified
finding is a real discovery Through a relocation survey and a title
2. Owner also owns hidden treasure found in properly identifying boundaries and
the land subject to: location
CIVIL LAW REVIEWER Chapter II. OWNERSHIP
PROPERTY
a. Police Power: Property taken with no Laedas
compensation for general welfare The owner of a thing cannot make use
When any property is condemned or thereof in such manner as to injure the
seized by competent authority in the rights of a third person. [Art. 431, Civil
interest of health, safety or security, Code]
the owner thereof shall not be entitled c. Act in State of Necessity
to compensation, unless he can show The owner of a thing has no right to
that such condemnation or seizure is prohibit the interference of another with
unjustified. [Art. 436, Civil Code] the same, if the interference is
Requisites: To justify the exercise of necessary to avert an imminent danger
police power, the following must and the threatened damage, compared
appear: to the damage arising to the owner from
o The interests of the public the interference, is much greater. The
generally, require such owner may demand from the person
interference (as distinguished benefited, indemnity for the damage to
from those of a particular class) him. [Art. 432, Civil Code]
o The means are reasonably
necessary for the
accomplishment of a purpose,
and not unduly oppressive
b. Taxation: Forced contribution to the
operation of government
c. Eminent Domain: Property taken for
public use/purpose, but subject to due
process and payment of just
compensation
Requisites To justify the exercise of
the right of eminent domain, the
following requisites must all be
present:
o Private property as the object of
the expropriation;
o The property is taken by the
State or by competent authority;
o The purpose of the taking is for
public use;
o The taking must be attended
with due process of law;
o There is payment of just
compensation
CIVIL LAW REVIEWER Chapter III. ACCESSION
PROPERTY
thereto, either naturally or artificially Time of Accrual depending on kind:
PROPERTY
c. Meaning of BAD FAITH Bad faith of one party neutralizes the
Bad faith bad faith of the other
o On the part of the landowner:
Whenever the building, planting
Case 2: BPS builds, plants, or sows on anothers ;and using his own materials
Landowner BPS and Owner of Material
Good faith Good faith
Landowner has option to: BPS has right to retain (right of retention) the land
a. Acquire the improvement after paying until the payment of indemnity
indemnity which may be the original cost of
improvement OR increase in value of the whole NOTE: During this period BPS is not required to pay
brought about by the improvement rent.
b. Sell the land to the BP or collect rent from
sower UNLESS value of land is more than the
thing built, planted or sown or BP shall pay rent
fixed by parties or by the court in case of
CIVIL LAW REVIEWER Chapter III. ACCESSION
disagreement.
NOTE: Landowner can be forced to choose under pain
of direct contempt or court can choose for him.
Good faith Bad faith
Landowner has right to collect damages in any case Pay damages to landowner
and option to: BPS lose materials without right to indemnity
a. Acquire improvements without paying No right to refuse to buy the land
indemnity if the improvements are still standing Recover necessary expenses for preservation of
on the land land
b. Sell the land to BP or collect rent from the
sower unless value of the improvements in
which case there will be a forced lease
c. Order demolition of improvements or
restoration o0f land to its former condition at
the expense of the BPS
PROPERTY
Bad faith Good faith
Landowner must indemnify BPS for the BPS has right to :
improvements and pay damages as if he himself did a. Be indemnified for damages
the BPS b. Remove all improvements in any event
Landowner has no option to sell the land and
cannot compel BPS to buy the land unless BPS
agrees to
Bad faith Bad faith
Same as though acted in bad faith under Article 453 Same as though acted in bad faith under Article 453
Case 3: BPS builds, plants or sows on anothers land with materials owned by third persons
Landowner BPS Owner of Material
Good faith Good faith Good faith
Right to acquire improvements Right of retention until Collect value of material
and pay indemnity to BPS; necessary and useful expenses primarily from BPS and
subsdiarily liable to OM are paid subsidiarily liable for landowner
Has option to: Pay value of materials to OM if BPS is insolvent
a. Sell land to BP except if the Limited right of removal
value of the land is
considerably more
b. Rent to sower
Good faith Good faith Bad faith
Right to acquire improvements Right of retention until Lose the material without right
and pay indemnity to BPS necessary and useful expenses to indemnity
Has option to: are paid. Must pay for damages to BPS
a. Sell land to BP except if the Keep BPS without indemnity to
value of the land is OM and collect damages from
considerably more him
b. Rent to sower
Without subsidiarily liability for
cost of materials
Good faith Bad faith Bad faith
Landowner has right to collect Recover necessary expenses Recover value from BPS (as if
damages in any case and for preservation of land from both are in good faith)
option to: landowner unless landowner If BPS acquires improvement,
a. Acquire improvements w/o sells land remove materials if feasible w/o
paying for indemnity; or injury
b. Demolition or restoration; No action against landowner but
or liable to landowner for damages
c. Sell to BP, or to rent to
sower
Pay necessary expenses to
BPS
Bad faith Bad faith Bad faith
Same as when all acted in good Same as when all acted in good Same as when all acted in good
faith under Article 453 faith under Article 453 faith under Article 453
CIVIL LAW REVIEWER Chapter III. ACCESSION
PROPERTY
Acquire imrovement after Right of retention until Collect value of materials
paying indemnity; subsidiarily necessary expenses are paid primarily from BPS and
liable to OM Pay value of materials to OM subsidiarily from landowner
Landowner has option to: Pay damages to OM Collect damages from BPS
a. Sell land to BP except if If BPS acquires improvements,
value of land is absolute right of removal in any
considerably more event
b. Rent to sower
Bad faith Good faith Bad faith
Acquire improvements and pay Receive indemnity for damages No right to indemnity
indemnity and damages to BPS Absolute right of removal of Loses right to mnaterial
unless latter decides to remove improvements in any event
materials
PROPERTY
area they lost
o Owners of the lands adjoining
the old bed are given the right to
acquire the same by paying the
value of the land
Not exceeding the value
of the land invaded by
the new bed (the old
property of the owner)
o The new bed opened by the
river on a private estate shall
become of public dominion
d. FORMATION OF ISLANDS
Belong to the State if:
o Formed on the SEAS within the
jurisdiction of the Philippines
o Formed on LAKES
o Formed on NAVIGABLE or
FLOATABLE RIVERS
Capable of affording a
channel or passage for
ships and vessels
Must be sufficient not only
to float bancas and light
boats, but also bigger
watercraft
Deep enough to allow
unobstructed movements of
ships and vessels
TEST: can be used as a
highway of commerce, trade
and travel
Belong to the Owners of the nearest
margins or banks if
o Formed through successive
accumulation of alluvial deposits
o On NON-NAVIGABLE and
NON-FLOATABLE RIVERS
If island is in the middle:
divided longitudinally in half.
CIVIL LAW REVIEWER Chapter IV. QUIETING OF TITLE
PROPERTY
Article 476, Civil Code. Whenever there is a cloud a. Unless made in a legal proceeding
on title to real property or any interest therein, by b. Or asserting that an instrument or entry
reason of any instrument, record, claim, in plaintiffs favor is not what it purports
encumbrance or proceeding which is apparently
valid or effective but is in truth and in fact invalid,
to be
ineffective, voidable, or unenforceable, and may be 3. To boundary disputes
prejudicial to said title, an action may be brought to 4. To deeds by strangers to the title unless
remove such cloud or to quiet the title. purporting to convey the property of the
plaintiff
An action may also be brought to prevent a cloud 5. To instruments invalid on their face
from being cast upon title to real property or any 6. Where the validity of the instrument involves
interest therein. a pure question of law
Article 478, Civil Code. There may also be an
action to quiet title or remove a cloud therefrom IV. Requisites
when the contract, instrument or other obligation has
been extinguished or has terminated, or has been REQUISITES OF AN ACTION TO QUIET
barred by extinctive prescription.
TITLE
1. There is a CLOUD on title to real property or
I. In General any interest to real property.
1. Applicable to real property 2. The plaintiff must have legal or equitable title
2. Basis: Equity comes to the aid of the plaintiff to, or interest in the real property.
who would suffer if the instrument (which 3. Plaintiff must return the benefits received
appear to be valid but is in reality void, from the defendant.
ineffective, voidable or unenforceable) was
to be enforced. A. There is a CLOUD on title to real property
or any interest to real property
II. Purpose 1. Cloud on title means a semblance of title,
either legal or equitable, or a claim or a right
1. To declare: in real property, appearing in some legal
a. The invalidity of a claim on a title form but which is, in fact, invalid or which
b. The invalidity of an interest in property would be inequitable to enforce.
2. To free the plaintiff and all those claiming 2. A cloud exists if:
under him any hostile claim on the property. a. There is a claim emerging by reason of:
Any instrument e.g. a contract, or
III. Nature: Quasi in Rem any deed of conveyance, mortgage,
1. A suit against a particular person or persons assignment, waiver, etc. covering the
in respect to the res and the judgment will property concerned
apply only to the property in dispute. Any record, claim, encumbrance
2. The action to quiet title are characterized as e.g. an attachment, lien, inscription,
proceedings quasi in rem. Technically, they adverse claim, lis pendens, on a title
are neither in rem nor in personam. In an Any proceeding e.g. an extrajudicial
action quasi in rem, an individual is named partition of property
CIVIL LAW REVIEWER Chapter IV. QUIETING OF TITLE
b. The claim should appear valid or assailed before taking steps to vindicate
effective and extraneous evidence is his right.
needed to prove their validity or b. An action to quiet title to property in
invalidity. ones possession is imprescriptible.
Test: Would the owner of the property The rationale for this rule has been
in an action for ejectment brought by aptly stated thus: The owner of real
the adverse party be required to offer property who is in possession thereof
evidence to defeat a recovery? may wait until his possession is invaded
As a general rule, a cloud is not or his title is attacked before taking
created by mere verbal or parole steps to vindicate his right. A person
assertion of ownership or an interest claiming title to real property, but not in
in property. possession thereof, must act
c. Such instrument, etc. is, in truth and in affirmatively and within the time
fact, invalid, ineffective, voidable, or provided by the statute. Possession is a
unenforceable, or has been continuing right as is the right to defend
extinguished or terminated, or has been such possession. So it has been 153
barred by extinctive prescription. determined that an owner of real
PROPERTY
d. Such instrument, etc. may be prejudicial property in possession has a continuing
to the true owner or possessor. right to invoke a court of equity to
remove a cloud that is a continuing
B. The plaintiff must have legal or equitable menace to his title. Such a menace is
title to, or interest in the real property compared to a continuing nuisance or
trespass which is treated as successive
Article 477, Civil Code. The plaintiff must have nuisances or trespasses, not barred by
legal or equitable title to, or interest in the real statute until continued without
property which is the subject matter of the action. He interruption for a length of time sufficient
need not be in possession of said property. to affect a change of title as a matter of
1. Legal title: the party is the registered owner law." (Pingol v. CA)
of the property.
2. Equitable title: the person has the 2. When the plaintiff is not in possession of
beneficial ownership of the property. the property, the action to quiet title may
prescribe.
C. Plaintiff must return the benefits received a. 10 yrs. ordinary prescription
from the defendant b. 30 yrs. extraordinary prescription
Article 479, Civil Code. The plaintiff must return to Article 480, Civil Code. The principles of the
the defendant all benefits he may have received general law on the quieting of title are hereby
from the latter, or reimburse him for expenses that adopted insofar as they are not in conflict with this
may have redounded to the plaintiffs benefit. Code.
NOTE: REQUISITES OF AN ACTION TO Article 481, Civil Code. The procedure for the
PREVENT A CLOUD quieting of title or the removal of a cloud therefrom
1. Plaintiff has a title to a real property or shall be governed by such rules of court as the
interest therein Supreme Court shall promulgate.
2. Defendant is bent on creating a cloud on the
title or interest therein. The danger must not
be merely speculative or imaginary but
imminent.
3. Unless the defendant is restrained or
stopped, the title or interest of the plaintiff
will be prejudiced or adversely affected.
V. Prescription of Action
1. When plaintiff is in possession of the
property the action to quiet title does not
prescribe.
a. The reason is that the owner of the
property or right may wait until his
possession is disturbed or his title is
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
PROPERTY
IV. DIFFERENCE BETWEEN CO-OWNERSHIP In default of contracts, or of special provisions, co-
AND PARTNERSHIP ownership shall be governed by the provisions of
V. SOURCES OF CO-OWNERSHIP this Title.
A. LAW
1. COHABITATION
2. PURCHASE II. Characteristics
3. INTESTATE SUCCESSION A. There is a plurality of owners but only
4. DONATION one real right or object of ownership
5. CHANCECOMMIXTION IN GOOD 1. There are at least 2 persons
FAITH 2. There is unity or material indivision of a
6. HIDDEN TREASURES
single object.
7. EASEMENT OF PARTY WALL
8. OCCUPATIONHARVESTING AND
FISHING B. There are ideal shares defined but not
9. CONDOMINIUM LAW physically identified
B. CONTRACTS
1. BY AGREEMENT OF 2 OR MORE Article 485, Civil Code. The share of the co-
PERSONS owners, in the benefits as well as in the charges,
2. BY UNIVERSAL PARTNERSHIP shall be proportional to their respective interests.
3. BY ASSOCIATION AND SOCIETIES Any stipulation in a contract to the contrary shall be
WITH SECRET ARTICLES void.
VI. RIGHTS OF EACH CO-OWNER OVER THE
THING OR PROPERTY OWNED IN COMMON The portions belonging to the co-owners in the co-
A. TO USE THE THING ACCORDING TO THE ownership shall be presumed equal, unless the
PURPOSE INTENDED contrary is proved.
B. TO SHARE IN THE BENEFITS IN
PROPORTION TO HIS INTEREST, C. Each co-owner has absolute control over
PROVIDED THE CHARGES ARE BORNE his ideal share
BY EACH IN THE SAME PROPORTION
Every co-owner has absolute ownership
C. TO BRING AN ACTION IN EJECTMENT
D. TO COMPEL THE OTHER CO-OWNERS of his undivided interest in the co-owned
TO CONTRIBUTE TO THE EXPENSES property and is free to alienate, assign
FOR THE PRESERVATION OF THE or mortgage his interest except as to
PROPERTY OWNED IN COMMON AND TO purely personal rights. While a co-
THE PAYMENT OF TAXES owner has the right to freely sell and
E. TO OPPOSE ANY ACT OF ALTERATION dispose of his undivided interest,
F. TO PROTEST AGAINST ACTS OF nevertheless, as a co-owner, he cannot
MAJORITY WHICH ARE SERIOUSLY alienate the shares of his other co-
PREJUDICIAL TO THE MINORITY
owners nemo dat qui non habet.
G. TO EXERCISE LEGAL REDEMPTION
H. TO ASK FOR PARTITION (Acabal v. Acabal)
VII. IMPLICATIONS OF CO-OWNERS RIGHT
OVER HIS IDEAL SHARE
A. RIGHTS OF A CO-OWNER
B. EFFECT OF TRANSACTION BY EACH CO-
OWNER
VIII. RULES ON CO-OWNERSHIP NOT
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
PROPERTY
Disposal of share
b. Each co-owner may enjoy the whole
A partner may not
property and use it.
Each co-owner may dispose of his
Only limitation: a co-owner cannot use dispose of his undivided share/interest or transfer
or enjoy the property in a manner that share without the consent
rd
the same to a 3 person
shall injure the interest of his other co- of others without the consent of
owners. (Pardell v. Bartolome) others
Mutual representation
III. Difference between Co-ownership No mutual representation Generally, a partner
(except if there is a binds other partners
and Joint Tenancy special authority for such (there is mutual
representation) representation)
Co-Ownership Joint Tenancy Effect of legal disability/ incapacity/ death
Origin Does not dissolve the co-
Dissolves partnership
Civil Law Common Law ownership
Other names Profit distribution
Tenancy in Common, Must be proportional to
Joint ownership, Depends upon the
ownership in common, the interest of each co-
all for one, one for all stipulation in their
Co-dominium owner (not subject to
contract
Extent of ownership stipulation)
Every joint tenant owns Duration
Each co-owner owns General rule: an
the whole property
undivided thing + own agreement to keep the
because their rights are No term limit set by law
ideal part/share of each ownership for more than
inseparable
Right to dispose of share 10 years is void
A joint tenant may not Attachment
dispose of his Creditors of a partner
Each co-owner may Creditors of a co-owner cannot attach and sell on
share/interest without the
dispose of his undivided can attach on the shares execution the shares of
consent of others
share without the consent of others other partners in the
(rationale: he may
of others. partnership
prejudice the others by
alienating his share)
Effect of death V. Sources of Co-Ownership
The ownership of a joint
tenant dies with him, and A. Law
his surviving joint tenants 1. Cohabitation: co-ownership between
The share of a co-owner
are subrogated to his common law spouses
descends to his heirs
rights by virtue of jus The Family Code, in the following
accrescendi provisions, made the rules on co-
(survivorship) ownership apply
Effect of legal disability/incapacity Article 147: between a man and a
Defense of one can be
Defense against woman capacitated to marry each
used by all, as
prescription is exclusive
disability/incapacity
other
to the co-owner with
inures to the benefit of
disability/incapacity
the others for purposes of
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
PROPERTY
3. Intestate succession: co-ownership of party wall shall be governed by the
between the heirs before partition of the provisions of this Title, by the local
estate ordinances and customs insofar as they
a. Article 1078, Civil Code. Where there do not conflict with the same, and by the
are two or more heirs, the whole estate rules of co-ownership.
of the decedent is, before its partition,
owned in common by such heirs, subject 8. Occupation: Harvesting and Fishing: co-
to the payment of debts of the ownership by two or more persons who
deceased. have seized a res nullius thing
b. Intestate Succession (without will)
c. For as long as the estate is left 9. Condominium Law: co-ownership of the
undivided the heirs will be considered common areas by holders of units
co-owners of the inheritance. If one of Sec. 6, RA 4726. The Condominium
the heirs dies, his heirs will in turn be co- Act. Unless otherwise expressly
owners of the surviving original heirs.
provided in the enabling or master deed
4. Donation: Co-ownership between donees
or the declaration of restrictions, the
Article 753, Civil Code. When a
incidents of a condominium grant are as
donation is made to several persons
follows:
jointly, it is understood to be in equal
(c) Unless otherwise, provided,
shares, and there shall be no right of
the common areas are held in
accretion among them, unless the donor
common by the holders of units,
has otherwise provided.
in equal shares, one for each
5. Chance/Commixtion in Good Faith: Co-
unit.
ownership between owners of 2 things that
are mixed by chance or by will of the owners
B. Contracts
Article 472, Civil Code. If by the will of
1. By Agreement of Two or More Persons
their owners two things of the same or
a. Article 494, Civil Code. No co-owner
different kinds are mixed, or if the
shall be obliged to remain in the co-
mixture occurs by chance, and in the
ownership. Each co-owner may demand
latter case the things are not separable
at any time the partition of the thing
without injury, each owner shall acquire
owned in common, insofar as his share
a right proportional to the part belonging
is concerned.
to him, bearing in mind the value of the
things mixed or confused.
Nevertheless, an agreement to keep the
6. Hidden Treasure co-ownership between
thing undivided for a certain period of
finder and owner of the land
time, not exceeding ten years, shall be
Article 438, Civil Code. Hidden
valid. This term may be extended by a
treasure belongs to the owner of the
new agreement.
land, building, or other property on
which it is found.
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
A donor or testator may prohibit partition each, only the usufruct passing to the
for a period which shall not exceed partnership.
twenty years.
3. By Associations and Societies with
Neither shall there be any partition when Secret Articles
it is prohibited by law. Article 1775, Civil Code. Associations
and societies, whose articles are kept
No prescription shall run in favor of a co- secret among the members, and
owner or co-heir against his co-owners wherein any one of the members may
or co-heirs so long as he expressly or contract in his own name with third
impliedly recognizes the co-ownership. persons, shall have no juridical
personality, and shall be governed by
b. Two or more persons may agree to the provisions relating to co-ownership.
create a co-ownership
c. Note: there is a 10-year term limit for
ownership by agreement; BUT: Term
VI. Rights of Each Co-owner over the 157
may be extended by a new agreement
Thing or Property Owned in Common
PROPERTY
2. By the creation of a Universal Rights of Each Co-owner over the Thing or
Partnership Property Owned in Common
a. Of all present property 1. To use the thing according to the purpose
Article 1778, Civil Code. A intended (Jus Utendi)
partnership of all present property is 2. To share in the benefits in proportion to his
that in which the partners contribute all interest provided the charges are borne by
the property which actually belongs to each in the same proportion
them to a common fund, with the 3. To bring an action in ejectment
intention of dividing the same among 4. To compel the other co-owners to contribute
themselves, as well as all the profits to expense for preservation of the property
which they may acquire therewith. owned in common and to the payment of
taxes
Article 1779, Civil Code. In a 5. To oppose any act of Alteration
universal partnership of all present 6. To protest against acts of majority which are
property, the property which belonged seriously prejudicial to the minority
to each of the partners at the time of 7. To exercise legal redemption
the constitution of the partnership, 8. To ask for partition
becomes the common property of all
the partners, as well as all the profits Right use the thing according to the purpose
which they may acquire therewith. intended (Jus Utendi)
Article 486, Civil Code. Each co-owner may use
A stipulation for the common the thing owned in common, provided he does so in
accordance with the purpose for which it is intended
enjoyment of any other profits may
and in such a way as not to injure the interest of the
also be made; but the property which co-ownership or prevent the other co-owners from
the partners may acquire using it according to their rights. The purpose of the
subsequently by inheritance, legacy, co-ownership may be changed by agreement,
or donation cannot be included in such express or implied.
stipulation, except the fruits thereof.
1. Limitations on co-owners right:
b. Of profits a. Use must be to the purpose for which it
Article 1780, Civil Code. A universal is intended.
partnership of profits comprises all that As stipulated in the agreement
the partners may acquire by their In the absence of agreement, the
industry or work during the existence of purpose for which it was ordinarily
the partnership. adapted according to its nature.
In the absence of the above, the use
Movable or immovable property which for which it was previously or formerly
each of the partners may possess at the devoted.
time of the celebration of the contract b. Use must be without prejudice to the
shall continue to pertain exclusively to interest of the co-ownership.
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
c. Use must not prevent the other co- property owned in common and to the
owners from making use of the property payment of taxes
according to their own rights.
Article 488, Civil Code. Each co-owner shall have a
2. Changing the purpose of the thing right to compel the other co-owners to contribute to
The purpose of the thing may be changed the expenses of preservation of the thing or right
by an agreement, express or implied, owned in common and to the taxes. Any one of the
latter may exempt himself from this obligation by
provided that the following will be observed:
renouncing so much of his undivided interest as may
It does not cause injury or prejudice to be equivalent to his share of the expenses and
the interest of the co-ownership taxes. No such waiver shall be made if it is
Any act against the collective interest prejudicial to the co-ownership.
is an act against ownership.
A co-owner cannot devote the 1. This provision includes only necessary
community property to his exclusive expenses and taxes, and NOT those for
use mere luxury, embellishment or pleasure
It does not prevent the use by other 158
a. Expenses for preservation: those which,
co-owners
PROPERTY
if not made, would endanger the
existence of the thing or reduce its value
Right to share in the benefits in proportion to or productivity
his interest provided the charges are borne b. Not used for the improvement of the
by each in the same proportion thing (what is intended is the
preservation of the thing, not gaining
Article 485, Civil Code. The share of the co- profit from it)
owners, in the benefits as well as in the charges, 2. Renunciation
shall be proportional to their respective interests.
a. Other co-owners have the option not to
Any stipulation in a contract to the contrary shall be
void. contribute by renouncing so much of his
undivided interest as may be equivalent
The portions belonging to the co-owners in the co- to his share of the necessary expenses
ownership shall be presumed equal, unless the and taxes
contrary is proved. Must be express; thus, failure to pay
is not a renunciation
Right to bring an action in ejectment Requires the consent of other co-
owners because it is a case of dacion
Article 487, Civil Code. Any one of the co-owners en pago (cessation of rights) involving
may bring an action in ejectment. expenses and taxes already paid
1. Action in Ejectment covers all kinds of action (J.B.L. Reyes)
for recovery of possession (reivindicatoria, b. A co-owner cannot renounce his share if
publiciana, forcible entry, unlawful detainer) it will be prejudicial to another co-owner
2. There is no need to include all the co-
owners as co-plaintiffs because the suit is 3. Procedure: Repairs for preservation
deemed to be instituted for the benefit of all
3. But the action will not prosper if the action is Article 489, Civil Code. Repairs for preservation
brought for the benefit of the plaintiff alone may be made at the will of one of the co-owners, but
and not for the co-ownership he must, if practicable, first notify his co-owners of
4. Article 487 of the Civil Code, which provides the necessity for such repairs. Expenses to improve
simply that any one of the co-owners may or embellish the thing shall be decided upon by a
majority as determined in article 492.
bring an action in ejectment, is a categorical
and an unqualified authority in favor of a. Notify other co-owners, as far as
owner to evict the petitioners from the practicable
portions of lot. The rule is a co-owner may b. However, a co-owner can advance
bring an action to exercise and protect the expenses for preservation of the
rights of all. When the action is brought by property even without prior consent of
one co-owner for the benefit of all, a others. He is entitled to reimbursement
favorable decision will benefit them; but an for the amount spent for necessary
adverse decision cannot prejudice their expenses.
rights. (Resuena v. CA)
PROPERTY
consent of all is sufficient
o Co-owner only entitled to be
reimbursed for the amount that a. Alteration without consent of all is illegal
should have been spent had he The one who did the alteration will
notified the others, and lose whatever he spent in case he is
difference shall be borne by him made to demolish the work he has
alone done (no right to reimbursement)
b. Decision by majority must be followed Damages to the non-consenting co-
owner can also be granted by the
Right to oppose any act of Alteration court
b. Note: This is subject to ratification if
Article 491, Civil Code. None of the co-owners co-owners decide to contribute to the
shall, without the consent of the others, make expenses by reimbursing the co-owner
alterations in the thing owned in common, even
who made the alteration (effect: benefit
though benefits for all would result therefrom.
However, if the withholding of the consent by one or of alteration will inure to the co-
more of the co-owners is clearly prejudicial to the ownership)
common interest, the courts may afford adequate
relief. Right to protest against acts of majority
1. Alteration: a change which more or less which are seriously prejudicial to the
permanently changes the use of a thing and minority
adversely affecting the condition of the thing
or its enjoyment by the others. Article 492(3), Civil Code. Should there be no
2. It involves: majority, or should the resolution of the majority be
a. Change of the thing from the state or seriously prejudicial to those interested in the
property owned in common, the court, at the
essence in which the others believe it
instance of an interested party, shall order such
should remain, or measures as it may deem proper, including the
b. Withdrawal of the thing from the use to appointment of an administrator.
which they wish to be intended, or 1. Acts of administration
c. Any other transformation which a. Acts of management that do not involve
prejudices the condition or substance of alteration of the property
the thing or its enjoyment by the others b. Acts which are temporary in character
3. Rule: Any act of alteration requires so much so that they do not bind the
UNANIMOUS CONSENT OF ALL CO- property for a long time
WORKERS c. Acts that do not create real rights over
a. BUT when there is unreasonable the common property
withholding of consent: the co-owner
may go to court to seek adequate relief. 2. Rule:
b. Note: consent may be express or tacit If there is a disagreement or conflict of
c. Reason for the rule: alteration is an act opinions by and among the co-owners
of ownership, not of mere on the matter of administration and
administration. better enjoyment of the common
property, the resolution of the co-owners
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
PROPERTY
piece of rural land, the area of which
Right to exercise legal redemption does not exceed one hectare, is
alienated, unless the grantee does
Article 1620, Civil Code. A co-owner of a thing may not own any rural land.
exercise the right of redemption in case the shares
of all the other co-owners or of any of them, are sold This right is not applicable to
to a third person. If the price of the alienation is adjacent lands which are separated
grossly excessive, the redemptioner shall pay only a
by brooks, drains, ravines, roads
reasonable one.
and other apparent servitudes for
Should two or more co-owners desire to exercise the the benefit of other estates.
right of redemption, they may only do so in
proportion to the share they may respectively have If two or more adjoining owners
in the thing owned in common. desire to exercise the right of
redemption at the same time, the
Article 1623, Civil Code. The right of legal pre- owner of the adjoining land of
emption or redemption shall not be exercised except smaller area shall be preferred; and
within thirty days from the notice in writing by the
should both lands have the same
prospective vendor, or by the vendor, as the case
may be. The deed of sale shall not be recorded in area, the one who first requested
the Registry of Property, unless accompanied by an the redemption.
affidavit of the vendor that he has given written
notice thereof to all possible redemptioners. b. Urban land
Article 1622, Civil Code. Whenever a
The right of redemption of co-owners excludes that piece of urban land which is so small
of adjoining owners. and so situated that a major portion
thereof cannot be used for any
1. Redemption: Act of reclaiming possession practical purpose within a reasonable
of something by payment of a specific price time, having been bought merely for
2. The 30-day redemption period starts from speculation, is about to be re-sold, the
the date of written notification of the sale owner of any adjoining land has a right
made by the co-owner. of pre-emption at a reasonable price.
Without such written notice, the 30-day
period does not start to run If the re-sale has been perfected, the
3. Exceptions: owner of the adjoining land shall have
a. Estoppel by laches (inaction) a right of redemption, also at a
If there is oral notification and reasonable price.
several years have passed (implied
waiver) and there is reliance on the When two or more owners of adjoining
non-action of co-owners lands wish to exercise the right of pre-
b. Estoppel by silence emption or redemption, the owner
When there is duty to speak whose intended use of the land in
4. Note: The written notification must come question appears best justified shall
from the prospective vendor be preferred.
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
PROPERTY
No prescription shall run in favor of a co-owner or B. Effect of Transaction by Each Owner
co-heir against his co-owners or co-heirs so long as 1. Limited to his share in the partition
he expressly or impliedly recognizes the co- 2. Transferee does not acquire any specific
ownership. portion of the whole property until partition
3. Creditors of co-owners may intervene in the
1. Partition: segregation or division of a partition to attack the same if it is prejudicial
property in common to those to whom it (Art. 499)
belongs
2. Rule: Right to demand partition does not Article 499, Civil Code. The partition of a thing
prescribe owned in common shall not prejudice third persons,
3. Exceptions to the rule: who shall retain the rights of mortgage, servitude or
a. When indivision within 10 years is any other real rights belonging to them before the
stipulated by the co-owners division was made. Personal rights pertaining to
b. When co-ownership is imposed as a third persons against the co-ownership shall also
remain in force, notwithstanding the partition.
condition in a donation or in a last will
and testament by the
transferor/donor/testator Note: Creditors cannot ask for rescission even if
c. When from the nature of the property in not notified in the absence of fraud (Art. 497,
common, it cannot be divided (i.e. party Civil Code)
wall)
Article 497, Civil Code. The creditors or assignees
d. When partition is generally prohibited by
of the co-owners may take part in the division of the
law (i.e. ACP, party wall) thing owned in common and object to its being
e. When the partition would render the effected without their concurrence. But they cannot
thing unserviceable or the thing held in impugn any partition already executed, unless there
common is essentially indivisible has been fraud, or in case it was made
If the thing cannot be physically notwithstanding a formal opposition presented to
partitioned, they may sell the thing prevent it, without prejudice to the right of the debtor
and the co-owners may divide the or assignor to maintain its validity.
proceeds)
f. When acquisitive prescription has set in VIII. Rules on Co-Ownership Not
favor of a stranger to con-ownership or Applicable to CPG or ACP
in favor of a co-owner
These two regimes are governed by the
VII. Implication of Co-owners Right over provisions on the Family Code
His Ideal Share Even void marriages and cohabitation of
incapacitated persons are governed by
A. Rights of a Co-owner Article 50, 147, and 148 of the Family Code
1. To share in fruits and benefits
2. To alienate, mortgage, or encumber and
dispose his ideal share (but other co-owners
may exercise right of legal redemption within
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
IX. Special Rules on Ownership of master deed which shall contain, among others, the
following:
Different Stories of a House as
Differentiated from Provisions of the a. Description of the land on which the building
Condominium Act or buildings and improvements are to be
located;
RA 4726. THE CONDOMINIUM ACT
b. Description of the building or buildings,
Sec. 2. A Condominium is an interest in real stating the number of storeys and basement,
the number of units and their accessories, if
property consisting of a separate interests in a unit
in a residential, industrial or commercial building or any;
in an industrial estate and an undivided interests in
c. Description of the common areas and
common, directly and indirectly, in the land, or the
facilities;
appurtenant interest of their respective units in the
common areas.
d. A statement of the exact nature of the
The real right in condominium may be ownership or
interest acquired or to be acquired by the 162
purchased in the separate units and the
any interest in real property recognized by law on
PROPERTY
property in the Civil Code and other pertinent laws. common areas of the condominium projects.
Where title to or to appurtenant interests in
Sec. 3. As used in this Act, unless the context the common areas is to be held by a
condominium corporation, a statement to
otherwise requires:
b. Unit" means a part of the condominium this effect shall be included;
project intended for any type of independent
use or ownership, including one or more e. A certificate of the registered owner of the
property, if he is other than those executing
rooms or spaces located in one or more
the master deed, as well as of all registered
floors (or parts of floors) in a building or
buildings and such accessories as may be holders of any lien or encumbrances on the
appended thereto: Provided, that in the case property, that they consent to the
registration of the deed;
of an industrial estate wherein the
condominium project consists of several
buildings, plants and factories may, by f. The following plans shall be appended to the
themselves, be considered separately as deed as integral parts thereof:
individual units as herein defined.
1. A survey plan of the land included in the
c. "Project" means the entire parcel of real project, unless a survey plan of the same
property divided or to be divided in property had previously been filed in said
office.
condominiums, including all structures
thereon.
2. A diagrammatic floor plan of the building
d. "Industrial Estate or Estate" means a certain or buildings each unit, its relative
location and approximate dimensions.
tract of land which is subdivided and
developed primarily for industrial purposes
and which usually includes provisions for g. Any reasonable restriction not contrary to
basic infrastructure facilities and common law, morals, or public policy regarding the
right of any condominium owner to alienate
services such as roads, water, electricity,
or dispose off his condominium.
drainage and waste disposal system.
e. "Common areas" means the entire project h. The enabling or master deed may be
amended or revoked upon registration of an
except all units separately granted or held or
instrument executed by a simple majority of
reserved.
the registered owners of the property:
f. "To divide" real property means to divide the Provided, That in a condominium project
exclusively for either residential or
ownership thereof or other interests therein
commercial use, simple majority shall be on
by conveying one or more condominium
therein but less than the whole thereof. a per unit of ownership basis and that in the
case of mixed use, simple majority shall be
Sec. 4. The provisions of this Act shall apply to on a floor area of ownership basis:
Provided, further, That prior notifications to
property divided or to be divided into condominium
all registered owners shall be submitted to
only if there shall be recorded in the Register of
Deeds of the province or city in which the property the Housing and Land Use Regulatory
lies, and duly annotated in the corresponding Board and the city/municipal engineer for
approval before it can be registered. Until
certificate of title of the land, if the latter had been
registration of a revocation, the provisions of
patented or registered under either the Land
Registration or Cadastral Acts, an enabling or this Act shall continue to apply to such
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
property.
d. A non-exclusive easement for ingress,
Sec. 5. Any transfer or conveyance of a unit or an egress and support through the common
apartment, office or store or other space therein, areas in appurtenant to each unit and the
shall include the transfer or conveyance of the common areas are subject to such
undivided interest in the common areas or in a easement.
proper case, the membership or share holdings in
the condominium corporation: Provided, however, e. Each condominium owner shall have the
That where the common areas in the condominium exclusive right to paint, repaint, tile, wax,
project are held by the owners of separate units as paper or otherwise refinish and decorate the
co-owners hereof, no condominium unit therein shall inner surfaces of the walls, ceilings, floors,
be conveyed or transferred to persons other than windows and doors hounding his own unit:
Filipino citizens or corporation at least 60% of the provided, that in the case of an industrial
capital stock of which belong to Filipino citizens, estate condominium unit, such right may be
except in cases of hereditary succession. Where the exercised over the external surfaces of the
common areas in a condominium project are held by said unit.
a corporation, no transfer or conveyance of a unit 163
shall be valid if the concomitant transfer of the f. Each condominium owner shall have the
PROPERTY
appurtenant membership or stockholding in the exclusive right to mortgage, pledge or
corporation will cause the alien interest in such encumber his condominium and to have the
corporation to exceed the limits imposed by existing same appraised independently of the other
laws. condominium owner.
Sec. 6. Unless otherwise expressly provided in the g. Each condominium owner has also the
enabling or master deed or the declaration of absolute right to sell or dispose of his
restrictions, the incidents of a condominium grant condominium unless the master deed
are as follows: contains a requirements that the property be
first offered to the condominium owners
a. the boundary of the unit granted are the within a reasonable period of time before
interior surfaces of the perimeter walls, the same is offered to outside parties;
floors, ceiling, windows and doors thereof:
Provided, that in the case of an industrial Sec. 7. Except as provided in the following section,
estate condominium projects, wherein whole the common areas shall remain undivided, and there
buildings, plants or factories may be shall be no judicial partition thereof.
considered as unit defined under section 3
(b) hereof, the boundary of a unit shall Sec. 8. Where several persons own condominium
include the outer surfaces of the perimeter in a condominium project, an action may be brought
walls of said buildings, plants or factories. by one or more such person for partition thereof, by
The following are not part of the unit: sale of the entire project, as if the owners of all the
bearing walls, columns, floors, roofs, condominium in such project were co-owners of the
foundations, and other common structural entire project in the same proportion as their
elements of the buildings; lobbies, interests in the common areas: Provided, however,
stairways, hall ways and other areas of that a partition shall be made only upon a showing:
common use, elevator equipment and
shafts, central heating, central refrigeration a. That three years after damage or
and central air conditioning equipment, destruction to the project which renders a
reservoir, tanks, pumps and other central material part thereof unfit for its use prior
services and facilities, pipes, ducts, flues, thereto, the project had not been rebuilt or
chutes, conduits wires and other utility repaired substantially to its state prior to its
installations, wherever located, except the damage or destruction; or
outlets thereof when located within the unit.
b. That damage or destruction to the project
b. There shall pass with the unit, as an has rendered one half or more of the units
appurtenant thereof, an exclusive casement therein untenantable and that condominium
for the use of the air space encompasses by owners holding in aggregate more than 30
the boundaries of the unit as it exists at any percent interest in the common areas are
particular time and as the unit may lawfully opposed to the repair or restoration of the
be altered or reconstructed from time to projects; or
time. Such easement shall be automatically
terminated in any air space upon destruction c. That project has been in existence in excess
of the units as to render it untenantable. of 50 years, that it is obsolete and
uneconomical, and that condominium
c. Unless otherwise provided, the common owners holding in aggregate more than 50
areas are held in common by the holders of percent interest in the common areas are
units, in equal share one for each unit. opposed to repair or restoration or
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
PROPERTY
conveyance of any condominium therein, register a owners thereof when partition of the
declaration of restrictions relating to such project, project may be authorized under
which restrictions shall constitute a lien upon each Section 8 of this Act, which said power
condominium in the project, and shall insure to and shall be binding upon all of the
bind all condominium owners in the project. Such condominium owners regardless of
liens, unless otherwise provided, may be enforced whether they assume the obligations of
by any condominium owner in the project or by the the restrictions or not.
management body of such project. The Register of b. The manner and procedure for amending
Deeds shall enter and annotate the declaration of such restrictions: Provided, That the vote of
restrictions upon the certificate of title covering the not less than a majority in interest of the
land included within the project, if the land is owners is obtained.
patented or registered under the Land Registration
or Cadastral Acts. c. For independent audit of the accounts of
the management body;
The declaration of restrictions shall provide for the
management of the project by anyone of the d. For reasonable assessments to meet
following management bodies: a condominium authorized expenditures, each
corporation, an association of the condominium condominium unit to be assessed
owners, a board of governors elected by separately for its share of such expenses in
condominium owners, or a management agent proportion (unless otherwise provided) to
elected by the owners or by the board named in the its owners fractional interest in any
declaration. It shall also provide for voting majorities common areas;
quorums, notices, meeting date, and other rules
governing such body or bodies. e. For the subordination of the liens securing
such assessments to other liens either
Such declaration of restrictions, among other things, generally or specifically described;
may also provide:
f. For conditions, other than those provided
for in Sections eight and thirteen of this Act,
a. As to any such management body; upon which partition of the project and
1. For the powers thereof, including power dissolution of the condominium corporation
to enforce the provisions of the may be made. Such right to partition or
declarations of restrictions; dissolution may be conditioned upon failure
2. For maintenance of insurance policies, of the condominium owners to rebuild
insuring condominium owners against within a certain period or upon specified
loss by fire, casualty, liability, inadequacy of insurance proceeds, or upon
workmen's compensation and other specified percentage of damage to the
insurable risks, and for bonding of the building, or upon a decision of an arbitrator,
members of any management body; or upon any other reasonable condition.
3. Provisions for maintenance, utility,
gardening and other services benefiting
the common areas, for the employment Sec. 10. Whenever the common areas in a
of personnel necessary for the condominium project are held by a condominium
operation of the building, and legal, corporation, such corporation shall constitute the
accounting and other professional and management body of the project. The corporate
technical services; purposes of such a corporation shall be limited to
4. For purchase of materials, supplies and the holding of the common areas, either in
the like needed by the common areas; ownership or any other interest in real property
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
recognized by law, to the management of the d. That project or material part thereof has
project, and to such other purposes as may be been condemned or expropriated and that
necessary, incidental or convenient to the the project is no longer viable or that the
accomplishment of said purposes. The articles of members holding in aggregate more than
incorporation or by-laws of the corporation shall not 70 percent interest in the corporation if non-
contain any provision contrary to or inconsistent with stock, or the stockholders representing
the provisions of this Act, the enabling or master more than 70 percent of the capital stock
deed, or the declaration of restrictions of the project. entitled to vote, if a stock corporation, are
Membership in a condominium corporation, opposed to the continuation of the
regardless of whether it is a stock or non-stock condominium regime after expropriation or
corporation, shall not be transferable separately condemnation of a material portion thereof;
from the condominium unit of which it is an or
appurtenance. When a member or stockholder
ceases to own a unit in the project in which the e. That the conditions for such a dissolution
condominium corporation owns or holds the set forth in the declaration of restrictions of
common areas, he shall automatically cease to be a the project in which the corporation, are
member or stockholder of the condominium opposed to the continuation of the 165
corporation. condominium regime after expropriation or
PROPERTY
condemnation of a material portion thereof.
Sec. 11. The registration and regulation of a
condominium corporation shall be vested with the Sec. 14. The condominium corporation may also be
Housing And Land Use Regulatory Board (HLURB) dissolved by the affirmative vote of all the
and the term of the said corporation shall be stockholders or members thereof at a general or
coterminous with the duration of the subdivision special meeting duly called for such purpose:
projects, the provision of the corporation law to the Provided, that all the requirements of Section 62 of
contrary notwithstanding. the Corporation Law are complied with.
PROPERTY
Pambansa Bilang 344 of 1994.
Sec. 26. Whenever real property has been divided X. Extinguishment of Co-Ownership
into condominiums, each condominium separately
owned shall be separately assessed, for purposes of
real property taxation and other tax purposes, to the A. Total destruction of thing or loss of the
owners thereof and tax on each such condominium property co-owned
shall constitute a lien solely thereon.
Is there still co-ownership if a building is
Sec. 27. All acts or parts of Acts in conflict on destroyed?Yes, over the land and the
inconsistent with this Act are hereby amended debris.
insofar as condominium and its incidents are
concerned.
B. Merger of all interests in one person
Concept of Condominium
C. Acquisitive Presciption
It is an interest in real property consisting of a:
By whom
1. SEPARATE INTEREST in a unit in a
1. A third person (Art. 1106)
a. residential, or
2. A co-owner against the other co-owners
b. industrial, or
c. commercial building
Requisites
2. UNDIVIDED INTEREST in common directly
1. Unequivocal acts of repudiation of the rights
or indirectly,
of the other co-owners (you oust the other
a. in the land on which it is located
co-owners)
b. in other common areas of the building
a. Must be shown by clear and convincing
evidence
When Ownership of the Unit is Acquired
b. Must be within the knowledge of the
1. Ownership is acquired only after the buyer
other co-owners
had fully paid the purchase price.
c. Must not be a mere refusal to recognize
2. The ownership of the unit is what makes the
the others as co-owners
buyer a shareholder in the condominium.
2. Open and adverse possession - Not mere
silent possession
Note: The condominium law effectively
separates the building from the land (by a
Note: there is a presumption that
master deed)
possession of a co-owner is NOT adverse
Prescription only arises and produces all
3. Building is deemed an accessory
effects when the acts are clearly meant
to oust the rights of the other co-owners
Amendments
Co-ownership in common areas means shared
D. Partition or Division
expenses in these areas
Effects of Partition
1. Sec 4: simple majority of the property
1. Confers upon each heir the exclusive
2. Sec 16: common areas may be disposed by
ownership of the property adjudicated to him
affirmative vote of a simple majority of the
registered owners
CIVIL LAW REVIEWER Chapter V. CO-OWNERSHIP
PROPERTY
undivided owner of the whole estate right of creditors and assignees to take
each co-owner shall have full ownership part in the division presupposes the duty
if his part even as to fruits and benefits. to notify them.
He may alienate, assign or mortgage his b. If notice is not given, the partition will not
share. The effect of such act shall be be binding on them.
limited to the portion allotted to him c. Once notice has been given, it is the
during partition. Until said partition duty of creditors and assignees to
though, he cannot alienate a specific intervene and make known their stand.
part of the estate. A co-owner cannot i. If they fail to do this, they cannot
adjudicate to himself a definite portion question the division made,
owned in common until partition by except in case of fraud.
agreement or by a judicial decree. Until ii. If they formulate a formal
then, they can only sell their question to its being made, they
successional rights. (Carvaria v. CA) can contest such partition mad
in spite of their opposition.
Rights of Creditors of Individual Co-
Owners
PROPERTY
POSSESSION IN THE NAME OF constructive) of a thing or exercise of a right,
ANOTHER if right is involved.
B. POSSESSION IN THE CONCEPT OF AN a. General Rule: Possession and
OWNER AND POSSESSION IN THE cultivation of a portion of a tract under
CONCEPT OF A HOLDER claim of ownership of all is a
C. POSSESSION IN GOOD FAITH AND
constructive possession of all, if the
POSSESSION IN BAD FAITH
V. WHAT THINGS OR RIGHTS MAY BE remainder is not in adverse possession
POSSESSED of another.
VI. WHAT MAY NOT BE POSSESSED BY b. Doctrine of constructive possession
PRIVATE PERSONS applies when the possession is under
VII. ACQUISITION OF POSSESSION title calling for the whole. It does not
A. WAYS OF ACQUIRING POSSESSION apply where possession is without title.
B. BY WHOM MAY POSSESSION BE
ACQUIRED Note: Possession in the eyes of law does
C. WHAT DO NOT AFFECT POSSESSION
not mean that a man has to have his
D. RULES TO SOLVE CONFLICTS OF
POSSESSION feet on every square meter of the
VIII. EFFECTS OF POSSESSION ground before it can be said that he is in
A. RIGHT TO BE PROTECTED IN HIS possession. The general rule is that the
POSSESSION possession and cultivation of a tract of
B. ENTITLEMENT TO FRUITS land under a claim of ownership of all, is
C. REIMBURSEMENT FOR EXPENSES a constructive possession of all, if the
D. GOOD FAITH (IN CONCEPT OF OWNER) remainder is not in adverse possession
IS EQUIVALENT TO TITLE of another. (Ramos v. Director of
IX. EFFECT OF POSSESSION IN THE CONCEPT
Lands)
OF OWNER
X. LOSS OF POSSESSION
A. ABANDONMENT 2. Animus possidendi: Intention to possess
B. ASSIGNMENT a. Animus possidendi is essential in
C. DESTRUCTION OR TOTAL LOSS OF possession. There is no possession if
THING OR THING GOES OUT OF the holder does not want to exercise the
COMMERCE rights of a possessor. Animus
D. POSSESSION BY ANOTHER FOR MORE possidendi is implied from the acts of
THAN 1 YEAR the possessor.
b. Animus possidendi may be contradicted
I. Definition and rebutted by evidence to prove that
Article 523, Civil Code. Possession is the holding the person who is in possession, does
of a thing or the enjoyment of a right. not in fact exercise power or control and
does not intend to do so
Concept of Possession
1. To possess, in a grammatical sense, means .
to have, to physically and actually occupy a
thing, with or without right. (Sanchez
Roman)
CIVIL LAW REVIEWER Chapter VI. POSSESSION
B. Possession with juridical title but not that Article 524, Civil Code. Possession may be
of ownership exercised in one's own name or in that of another.
e.g. possession of a tenant, depository
agent, bailee trustee, lessee, antichretic Name under which possession may be
creditor. exercised
This possession is peaceably acquired. 1. In ones own name the fact of possession 169
This degree of possession will never and the right to such possession is found in
PROPERTY
ripen into full ownership as long as there the same person.
is no repudiation of concept under which 2. In the name of another the one in actual
property is held. possession is without any right of his own,
but is merely an instrument of another in the
C. Possession with just title or title exercise of the latters possession.
sufficient to transfer ownership, but not
from the true owner Kinds of possession in the name of
e.g. possession of a vendee from a another
vendor who pretends to be the owner. 1. Necessary arises by operation of law
This degree of possession ripens into e.g. representatives who exercise
full ownership by lapse of time. possession in behalf of a conceived
child, juridical persons, persons not sui
D. Possession with a just title from the true juris and the conjugal partnership
owner. 2. Voluntary effected through the mutual
This is possession that springs from consent of the parties
ownership. e.g. agents or administrators appointed
by the owner or possessor.
III. Classes of Possession Third person may also voluntary
exercise possession in the name of
The Old Civil Code had a distinction between another, but it does not become
natural possession and civil possession. This effective unless ratified by the person in
distinction has been abolished by the present whose name it is exercise.
Code.
B. Possession in the Concept of an Owner,
A. Natural Possession and Possession in the Concept of a
Physical holding of a thing (detention); all Holder with the Ownership Belonging to
retention or enjoyment of a thing or right. Another
B. Civil Possession
Article 525, Civil Code. The possession of things
Natural possession coupled with the
or rights may be had in one of two concepts:
intention of acquiring ownership of the thing
either in the concept of owner, or in that of the
or right.
holder of the thing or right to keep or enjoy it,
the ownership pertaining to another person.
The following may be said to have civil
possession:
1. Possession in Concept of Holder:
a. The owner himself, who holds and
One who possesses as a mere holder,
enjoys the things belonging to him.
not in the concept of owner,
b. The possessor who is not the owner but
acknowledges in another a superior right
has the intention to act as such, and is
which he believes to be ownership,
considered as such by others.
whether his belief be right or wrong.
c. The thief and the usurper who, in spite
e.g. tenant, usufructuary, borrower in
of their intention and the fact that they
commodatum.
are civil possessors according to the
CIVIL LAW REVIEWER Chapter VI. POSSESSION
PROPERTY
Owner A misconception of the law, no matter
a. Converted into ownership by the lapse how honest cannot have the effect of
of time necessary for prescription making one a possessor in good faith,
b. Possessor can bring all actions when he does not hold a title valid in
necessary to protect his possession, form or a deed sufficient in terms to
availing himself of any action which an transfer property.
owner can bring, except accion
revindicatoria which is substituted by 2. Possessor in bad faith one who knows
accion publiciana. his title is defective
c. He can ask for the inscription of Only personal knowledge of the flaw in
possession in the registry of property the title or mode of acquisition can make
d. Upon recovering possession from one him a possessor in bad faith for bad faith
who has unlawfully deprived him of it, he is not transmissible from one person to
can demand fruits and damages another.
e. He can do on the thing possessed Mistake upon a doubtful or difficult
everything that the law authorizes an question of law as a basis of good faith
owner to do; he can exercise the right of Mistake or ignorance of the law, by
pre-emption and is entitled to the itself, cannot become the basis of good
indemnity in case of appropriation. faith. What makes the error or ignorance
a basis of good faith is the presence of
C. Possession in Good Faith and an apparent doubt or difficulty in the
Possession in Bad Faith law. In other words, the law is complex,
ambiguous, or vague such that it is open
Article 526, Civil Code. He is deemed a possessor to two or more interpretations.
in good faith who is not aware that there exists in his When the ignorance of the law is gross
title or mode of acquisition any flaw which and inexcusable, as when a person of
invalidates it. average intelligence would know the
law, such ignorance cannot be the basis
He is deemed a possessor in bad faith who
possesses in any case contrary to the foregoing. of good faith. Otherwise, the intendment
of Article 3 which states that, Ignorance
Mistake upon a doubtful or difficult question of law of the law excuses no one from
may be the basis of good faith. compliance therewith, will be defeated.
VI. What May Not Be Possessed by tranferee the things which are being
Private Persons transferred
1. Res Communes 3. By execution of proper acts under legal
2. Property of Public Dominion formalities
3. Right under discontinuous and/or non- This mode of acquiring possession
apparent easement refers to juridical acts or the acquisition
of possession by sufficient title
VII. Acquisition of Possession evidenced by the performance of
required formalities.
A. Ways of Acquiring Possession Examples:
Donations
Article 531, Civil Code. Possession is acquired by Succession
the material occupation of a thing or the exercise of Contracts (like a sale with right to
a right, or by the fact that it is subject to the action of repurchase)
our will, or by the proper acts and legal formalities Judicial possession 171
established for acquiring such right. Execution of judgments
PROPERTY
Execution and registration of public
1. By material occupation of the thing instruments
Material occupation occupation, Inscription of possessory information
under this provision, is used in its titles
ordinary meaning or general sense and The execution of the required formalities
not in its technical meaning under Article is equivalent to delivery of the property
712, which defines occupation as a subject thereof.
mode of acquiring ownership.
Possession acquired by material B. By Whom May Possession Be Acquired
occupation is only possession as a fact,
not the legal right of possession. Article 532, Civil Code. Possession may be
Constructive delivery is considered as acquired by the same person who is to enjoy it, by
an equivalent of material occupation in his legal representative, by his agent, or by any
two situations where such occupation is person without any power whatever: but in the last
essential to the acquisition of case, the possession shall not be considered as
possession: acquired until the person in whose name the act of
Tradicion brevi manu takes place possession was executed has ratified the same,
without prejudice to the juridical consequences of
when one who possess a thing by
negotiorum gestio in a proper case.
title other than ownership, continues
to possess the same under a new
Possession may be acquired by
title, that of ownership.
1. by the same person
Tradicion constitutum possessorium
2. by his legal representative
takes place when the owner
3. by his agent
alienates the thing, but continues to
4. by any person without any power
posses the same under a different
whatsoever but subject to ratification,
title.
without prejudice to proper case or
negotiorum gestio (Arts. 2144, 2149, 2150)
2. By subjection to the action of ones will
5. qualifiedly, minors and incapacitated
This mode of acquiring possession
persons
refers more to the right of possession
than to possession as a fact. The action
By the same person
of our will must be juridical, in the sense
Elements of personal acquisition:
that it must be according to law.
1. Must have the capacity to acquire
This includes the following kinds of
possession
constructive delivery:
2. Must have the intent to possess
Tradicion symbolica effected by
3. The possibility to acquire possession must
delivering some object or symbol
be present.
placing the thing under the control of
the transferee
Tradicion longa manu effected by
the transferor pointing out to the
CIVIL LAW REVIEWER Chapter VI. POSSESSION
By his legal representative the advantages of the same shall be liable for
Requisites of acquisition through another: obligations incurred in his interest, and shall
1. That the representative or agent has the reimburse the officious manager for the necessary
intention to acquire the thing or exercise the and useful expenses and for the damages which the
latter may have suffered in the performance of his
right for another, and not for himself
duties.
2. That the person for whom the thing has
been acquired or the right exercised, has the The same obligation shall be incumbent upon him
intention of possessing such thing or when the management had for its purpose the
exercising such right prevention of an imminent and manifest loss,
although no benefit may have been derived.
Note:
Bad faith is personal and Qualifiedly, minors and incapacitated
intransmissible. Its effects must be persons
therefore, be suffered only by the person Article 535, Civil Code. Minors and incapacitated
who acted in bad faith; his heir should persons may acquire the possession of things; but
not be saddled with the consequences they need the assistance of their legal 172
Good faith can only benefit the person representatives in order to exercise the rights which
PROPERTY
from the possession arise in their favor.
who has it; and the good faith of the heir
cannot erase the effects of bad faith of
Incapacitated all those who do not have
his predecessor.
the capacity to act (insane, lunatic, deaf-
Article 534, Civil Code. On who succeeds by mutes who cannot read and write,
hereditary title shall not suffer the consequences of spendthrifts and those under civil
the wrongful possession of the decedent, if it is not interdiction)
shown that he was aware of the flaws affecting it; Object of possession things only, not
but the effects of possession in good faith shall not rights.
benefit him except from the date of the death of the Method of acquisition material occupation;
decedent. acquisition by means for which the
incapacitated person has the capacity, such
By any person without any power as acquisition by succession, testate or
whatsoever but subject to ratification, intestate, or by donations propter nuptias,
without prejudice to proper case or pure and simple donations
negotiorum gestio (Arts. 2144, 2149, 2150)
Article 2144, Civil Code. Whoever voluntarily takes C. What Do Not Affect Possession
charge of the agency or management of the
business or property of another, without any power Article 537, Civil Code. Acts merely tolerated, and
from the latter, is obliged to continue the same until those executed clandestinely and without the
the termination of the affair and its incidents, or to
knowledge of the possessor of a thing, or by
require the person concerned to substitute him, if the violence, do not affect possession.
owner is in a position to do so. This juridical relation
does not arise in either of these instances:
1. When the property or business is not 1. Acts merely tolerated
neglected or abandoned; Those which by reason of
2. If in fact the manager has been tacitly neighborliness or familiarity, the owner
authorized by the owner. of property allows his neighbor or
another person to do on the property;
In the first case, the provisions of Articles 1317, Those particular services or benefits
1403, No. 1, and 1404 regarding unauthorized which ones property can give to another
contracts shall govern.
without material injury or prejudice to the
In the second case, the rules on agency in Title X of
owner, who permits them out of
this Book shall be applicable. friendship or courtesy
Acts of little disturbances which a
Article 2149, Civil Code. The ratification of the person, in the interest of neighborliness
management by the owner of the business produces or friendly relations permits others to do
the effects of an express agency, even if the on his property, although continued for a
business may not have been successful. long time, no right will be acquired by
prescription
Article 2150, Civil Code. Although the officious
management may not have been expressly ratified,
the owner of the property or business who enjoys
Note: Permissive use merely tolerated by
the possessor cannot affect possession
CIVIL LAW REVIEWER Chapter VI. POSSESSION
PROPERTY
Article 536, Civil Code. In no case may possession
be acquired through force or intimidation as long as
there is a possessor who objects thereto. He who VIII. Effects of Possession
believes that he has an action or a right to deprive
another of the holding of a thing, must invoke the aid A. Right to be Protected in His Possession
of the competent court, if the holder should refuse to
deliver the thing. In general, every possessor has a right to be
respected in his possession; if disturbed therein,
Possession acquired by force, not only possessor has a right to be protected in or
when one forcibly takes away the restored to said possession.
property from another, but also when
one occupied the property in the Article 539, Civil Code. Every possessor has a
property in the absence of another, and right to be respected in his possession; and should
repels the latter upon his return. he be disturbed therein he shall be protected in or
Force may be actual or threatened; and restored to said possession by the means
may be employed by the possessor established by the laws and the Rules of Court.
himself, or by another for him, and
against any possessor. A possessor deprived of his possession through
Effect on Possession: Acts mentioned forcible entry may within ten days from the filing of
the complaint present a motion to secure from the
do not constitute true possession. They
competent court, in the action for forcible entry, a
do not interrupt the period of prescription writ of preliminary mandatory injunction to restore
nor affect the rights to the fruits. him in his possession. The court shall decide the
For all purposes that may be favorable motion within thirty (30) days from the filing thereof.
to the true possessor, his possession is
not considered interrupted. Every possessor includes all kinds of
possession, from that of an owner to that of a
D. Rules to Solve Conflicts of Possession mere holder, except that which constitutes a
crime.
Article 538, Civil Code. Possession as a fact
cannot be recognized at the same time in two Reason for the rule: To prevent anyone from
different personalities except in the cases of co- taking the administration of justice into his own
possession. Should a question arise regarding the
fact of possession, the present possessor shall be
hands. Even the owner cannot forcibly eject the
preferred; if there are two possessors, the one possessor, but must resort to the courts.
longer in possession; if the dates of the possession
are the same, the one who presents a title; and if all Actions to Recover Possession
these conditions are equal, the thing shall be placed 1. Summary proceedings Forcible entry and
in judicial deposit pending determination of its Unlawful detainer
possession or ownership through proper
proceedings. Article 1674, Civil Code. In ejectment cases where
an appeal is taken the remedy granted in Article
539, second paragraph, shall also apply, if the
higher court is satisfied that the lessee's appeal is
CIVIL LAW REVIEWER Chapter VI. POSSESSION
frivolous or dilatory, or that the lessor's appeal is It is only the conviction of ownership externally
prima facie meritorious. The period of ten days manifested, which generates ownership.
referred to in said article shall be counted from the
time the appeal is perfected. Acts of possessory character done by virtue of a
license or mere tolerance on the part of the real
Plaintiff may ask for writ of preliminary owner are not sufficient and will not confer title
mandatory injunction within 10 days by prescription or adverse possession.
from filing of complaint in forcible entry
(Art. 539). The same writ is available in The following cannot acquire title by prescription:
unlawful detainer actions upon appeal. 1. Lessees, trustees, pledges, tenants on
(Art. 1674) shares or planters and all those who hold in
Forcible entry and Unlawful the name or representation of another;
Detainer 2. Mere holders placed in possession of the
Rule 70, Rules of Court gives any property by the owner, such as agents,
person deprived of the possession of employees;
any land or building by force, 3. Those holding in a fiduciary character, like 174
intimidation, strategy, or stealth at any receivers, attorneys, depositaries and
PROPERTY
time within one year after such unlawful antichretic creditors
deprivation, the action of forcible entry. 4. Co-owner, with regard to common property;
by force, intimidation, strategy, or Except: When he holds the same adversely
stealth includes every situation or against all of them with notice to them the
condition under which one person can exclusive claim of ownership
wrongfully enter upon real property and
exclude another, who has had prior Article 542, Civil Code. The possession of real
possession therefrom. property presumes that of the movables therein, so
long as it is not shown or proved that they should be
2. Accion Publiciana (based on superior right excluded.
of possession, no ownership)
Action for the recovery of possession of Refers to all kinds of possession, whether in
real property upon mere allegation and concept of owner or not, in good faith or in bad
proof of a better title thereto faith, and in ones own name or anothers in
reference to things only, NOT rights.
3. Accion Reinvindicatoria (recovery of
possession based on a claim of ownership) Article 543, Civil Code. Each one of the
An action setting up title and right to participants of a thing possessed in common shall
possession be deemed to have exclusively possessed the part
Not barred by a judgment in an action which may be allotted to him upon the division
thereof, for the entire period during which the co-
for forcible entry and unlawful detainer
possession lasted. Interruption in the possession of
the whole or a part of a thing possessed in common
4. Action for Replevin (possession or shall be to the prejudice of all the possessors.
ownership for movable property) However, in case of civil interruption, the Rules of
Court shall apply.
Lawful Possessor Can Employ Self-help
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law leans toward the latter Article 546, Civil Code. Necessary expenses shall
be refunded to every possessor; but only the
Right of the possessor in good faith possessor in good faith may retain the thing until he
Only limited to the fruits of the thing. He must has been reimbursed therefor.
restore the fruits received from the time such
Useful expenses shall be refunded only to the
good faith ceased. He has no rights to the possessor in good faith with the same right of
objects which do not constitute fruits. retention, the person who has defeated him in the
possession having the option of refunding the
Legal interruption of possession in good amount of the expenses or of paying the increase in
faith value which the thing may have acquired by reason
Takes place when an action is filed against thereof.
himfrom the time he learns of the complaint,
from the time he is summoned to the trial. Necessary Expenses
1. Imposed by the thing itself and have no
Article 545, Civil Code. If at the time the good faith relation to the desire or purpose of the
ceases, there should be any natural or industrial possessor; hence they are reimbursed,
fruits, the possessor shall have a right to a part of whatever may be the juridical character of
the expenses of cultivation, and to a part of the net the person who advanced them.
harvest, both in proportion to the time of the 2. They are the cost of living for the thing and
possession.
must be reimbursed to the one who paid
The charges shall be divided on the same basis by them, irrespective of GF or BF. Only a
the two possessors. possessor in GF is entitled to retain the thing
until he is reimbursed
The owner of the thing may, should he so desire, 3. Those imposed for the preservation of the
give the possessor in good faith the right to finish the thing. They are not considered
cultivation and gathering of the growing fruits, as an improvements; they do not increase the
indemnity for his part of the expenses of cultivation value of the thing, but merely prevent them
and the net proceeds; the possessor in good faith from becoming useless.
who for any reason whatever should refuse to
accept this concession, shall lose the right to be
indemnified in any other manner.
Useful Expenses
1. Incurred to give greater utility or productivity
Old Civil Code New Civil Code to the thing
Possessor in GF was 2. e.g. Wall surrounding an estate, an irrigation
reimbursed the entire Proportionate division of system, planting in an uncultivated land, a
expense of cultivation expenses of production fishpond, an elevator in the building, electric
incurred by him lighting system
3. They are reimbursed only to the possessor
Charges Those which are incurred, in GF as a compensation or reward for him.
not on the thing itself but because of it. Possessor in BF cannot recover such
It is borne by the two possessors in expenses
proportion to their respective
possession.
CIVIL LAW REVIEWER Chapter VI. POSSESSION
PROPERTY
Article 550, Civil Code. Improvements caused by
substance of the thing itself, but only the nature or time shall always inure to the benefit of the
comfort, convenience or enjoyment of the person who has succeeded in recovering
possessor. They are not the subject of possession
reimbursement, because the law does not
compensate personal whims or caprices. Includes all the natural accessions
2. e.g. Opening of a garden, placing fountains referred to by articles 457-465, and all
and statues in it, adorning the ceilings those which do not depend upon the will
paintings, and the walls with reliefs of the possessor.
e.g. widening of the streets, rising of
Useful Expenses Expenses for Luxury fountains of fresh or mineral water,
Those which increase the increase of foliage of trees
Those which merely
income derived from the
embellished the thing
thing
Result: Increase in the
products, either Liability for loss or deterioration of property
absolutely, or because of by possessor in bad faith
Result: Benefit or
greater facilities for
advantage is only for the Article 552, Civil Code. A possessor in good faith
producing them
convenience of definite shall not be liable for the deterioration or loss of the
possessors thing possessed, except in cases in which it is
Includes expenses
resulting in real benefit or proved that he has acted with fraudulent intent or
advantage to the thing negligence, after the judicial summons.
The resulting utility is The utility is for the
essential and absolute, to possessor or particular A possessor in bad faith shall be liable for
all who may have the persons alone and is deterioration or loss in every case, even if caused by
thing. therefore accidental. a fortuitous event.
Possessor in GF Possessor in BF
Entitled to the fruits while possession is in GF Must reimburse the legitimate possessor
Fruits Received
and before legal interruption (544) (549)
Entitled to part of the expenses of cultivation,
and to a part of the net harvest, in proportion
to the time of the possession.
Must reimburse the legitimate possessor
Pending Fruits
Indemnity may be, at the owners option, (549)
1. In money, OR
2. By allowing full cultivation and gathering
of the fruits (545)
Must share with the legitimate possessor, in
Charges proportion to the time of the possession (545) Same as with GF (545)
PROPERTY
to Title (Art. 559) proved. This presumption is prima facie
and it prevails until contrary is proved.
Article 559, Civil Code. The possession of movable
property acquired in good faith is equivalent to a Just title that which is legally sufficient
title. Nevertheless, one who has lost any movable or to transfer the ownership or the real right
has been unlawfully deprived thereof may recover it to which it relates.
from the person in possession of the same.
If the possessor of a movable lost or which the For the purposes of prescription, there is
owner has been unlawfully deprived, has acquired it just title when the adverse claimant
in good faith at a public sale, the owner cannot came into possession of the property
obtain its return without reimbursing the price paid through one of the modes recognized by
therefor law for the acquisition of ownership or
other real rights, but the grantor was not
Possessor has actual title which is defeasible the owner or could not transmit any
only by true owner. right. (Art. 1129)
1. Possession may be lapsed of time ripen into 6. Has right to the fruits and reimbursement of
full ownership, subject to certain exceptions. expenses (assuming he is possessor in
good faith)
2. Presumption of just title and cannot be
obliged to show or prove it (Art. 541); 7. Upon recovery of possession which has
exception (Art. 1131) unlawfully deprived may demand fruits and
damages
Article 541, Civil Code. A possessor in the concept
of owner has in his favor the legal presumption that 8. Generally, he can do on the things
he possesses with a just title and he cannot be
possessed everything that the law
obliged to show or prove it.
CIVIL LAW REVIEWER Chapter VI. POSSESSION
PROPERTY
Article 527, Civil Code. Good faith is always The old possession is not revived if a new
presumed, and upon him who alleges bad faith on possession should be exercised by the same
the part of a possessor rests the burden of proof. adverse claimant.
Presumption is only juris tantum because Article 1122, Civil Code. If the natural interruption
possession is the outward sign of is for only one year or less, the time elapsed shall be
counted in favor of the prescription.
ownership. Unless such proof of bad faith is
presented, the possessor will be held to be Article 1123, Civil Code. Civil interruption is
in good faith. produced by judicial summons to the possessor.
So long as the possessor is not actually
aware of any defect invalidating his title, he Article 1124, Civil Code. Judicial summons shall be
is deemed a possessor in good faith. deemed not to have been issued and shall not give
rise to interruption:
Of continuity of initial good faith in which 1. If it should be void for lack of legal
possession was commenced of possession solemnities;
2. If the plaintiff should desist from the
in good faith does not lose this character
complaint or should allow the proceedings
except in case and from the moment to lapse;
possessor became aware or is not unaware 3. If the possessor should be absolved from
of improper or wrongful possession the complaint.
Article 528, Civil Code. Possession acquired in In all these cases, the period of the interruption shall
good faith does not lose this character except in the be counted for the prescription
case and from the moment facts exist which show
that the possessor is not unaware that he possesses Other presumptions with respect to specific
the thing improperly or wrongfully. properties of property rights
1. Of extension of possession of real property
Good faith ceases from the date of the to all movables contained therein so long as
summons to appear at the trial in is not shown that they should be
Good faith ceases when there is: excluded; exceptions.
a. Extraneous evidence
b. Suit for recovery of the property by the Article 426, Civil Code. Whenever by provision of
true owner the law, or an individual declaration, the expression
"immovable things or property," or "movable things
Of enjoyment of possession in the same or property," is used, it shall be deemed to include,
character in which possession was required respectively, the things enumerated in Chapter 1
until contrary is proved and Chapter 2.
PROPERTY
before its partition, owned in common by such heirs, has lasted longer than one year; real
subject to the payment of debts of the deceased.
right of possession not lost after 10
years - (Subject to Article 537)
3. Of just title in favor of possessor in concept Article 537, Civil Code. Acts merely tolerated, and
of owner those executed clandestinely and without the
knowledge of the possessor of a thing, or by
Article 541, Civil Code. A possessor in the concept violence, do not affect possession.
of owner has in his favor the legal presumption that
he possesses with a just title and he cannot be Possession that is lost here refers only
obliged to show or prove it.
to possession as a fact (de facto), not
Article 1141, Civil Code. Real actions over the legal right of possession (de jure). It
immovables prescribe after thirty years. is the possession that the new
possessor acquires.
This provision is without prejudice to what is Real right of possession is lost only after
established for the acquisition of ownership and 10 years.
other real rights by prescription. After one year, the actions for forcible
entry and unlawful detainer can no
longer be brought. But accion publiciana
XI. Possesion May Be Lost By may still be instituted to recover
possession de jure
Article 555, Civil Code. A possessor may lose his
possession: Article 553, Civil Code. One who recovers
1. By the abandonment of the thing; possession shall not be obliged to pay for
improvements which have ceased to exist at the
2. By an assignment made to another either by time he takes possession of the thing.
onerous or gratuitous title;
The improvements, having ceased to
3. By the destruction or total loss of the thing, or exist, the lawful possessor or owner
because it goes out of commerce; cannot benefit from them; hence he
should not pay for them.
4. By the possession of another, subject to the Necessary expenses are not considered
provisions of Article 537, if the new possession
improvements, and even if the object for
has lasted longer than one year. But the real
right of possession is not lost till after the lapse
which they were incurred no longer
of ten years. exists at the time of entry upon
possession, the lawful possessor or
A. Abandonment owner has to pay for them.
Includes the giving up possession, and
not necessarily of ownership by every
possessor. Article 557, Civil Code. The possession of
immovables and of real rights is not deemed lost, or
transferred for purposes of prescription to the
prejudice of third persons, except in accordance with
CIVIL LAW REVIEWER Chapter VI. POSSESSION
PROPERTY
Article 556, Civil Code. The possession of
movables is not deemed lost so long as they remain
under the control of the possessor, even though for
the time being he may not know their whereabouts.
Kinds of Animals:
1. Wildthose which live naturally
independent of man
2. Domesticatedthose which, being wild by
nature, have become accustomed to
recognize the authority of man. When they
observe this custom, they are placed in the
same category as domestic and when they
lose it, they are considered as wild.
3. Domestic or Tamethose which are
bornand reared ordinarily under the control
and care of man; they are under the
ownership of man, and do not become res
nullius unless they are abandoned.
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
PROPERTY
Article 562, Civil Code. Usufruct gives a right to By the nature of Always a real Quasi-real or
enjoy the property of another with the obligation of the right right personal right
preserving its form and substance, unless the title By the creator Need not be an
Owner
constituting it or the law otherwise provides. of the right owner
Active owner or
Passive owner
lessor who
Objects of Usufruct who allows the
By the cause makes the
1. Independent Rights usufructuary to
lessee enjoy
A servitude which is dependent on the enjoy the thing
the thing
tenement to which it attaches cannot be Generally
the object of usufruct covers all the Generally
By the extent of
2. Things utility of which covers a
enjoyment
Non-consumable things the thing is particular utility
Consumable things, but only as to their capable
value if appraised, or on an equal May be created May only be
quantity and quality if they were not by law, by will of created by the
By the origin
the parties, or will of the
appraised
by prescription parties
3. Unproductive things e.g. sterile or absolutely Pays for
unproductive land, or things for mere As regards Generally not
ordinary repairs
pleasure, such as promenades, statues or repairs and borne by a
and taxes on
paintings, even if they do not produce any taxes lessee
the fruits
utility.
Usufruct vs. Servitude
II. Characteristics
Basis Usufruct Servitudes
May involve May only
Characteristics As to the object real or personal involve real
1. It is a real right property property
2. Of temporary duration Covers all the
3. To derive all advantages from the thing due By the extent or Limited to a
uses of the
enjoyment particular use
to normal exploitation thing
PROPERTY
vivos and for valuable consideration, a. Simultaneous: at the same time
the contract is unenforceable unless b. Successive: one after the other
in writing
b. By act mortis causa such as testament Limitations on successive usufruct
1. If usufruct is by donation, ALL donees must
2. Legal: as provided by law be alive.
Usufruct of parents over the property of Article 756, Civil Code. The ownership of property
unemancipated children (now limited to the may also be donated to one person and the usufruct
collectively daily needs of the family as per to another or others, provided all the donees are
the Family Code) living at the time of the donation.
Article 226, Family Code. The property of the 2. Fiduciary or first heir and the second heir
unemancipated child earned or acquired with his must be alive at the time of the death of the
work or industry or by onerous or gratuitous title testator.
shall belong to the child in ownership and shall be
devoted exclusively to the latter's support and Article 863, Civil Code. A fideicommissary
education, unless the title or transfer provides substitution by virtue of which the fiduciary or first
otherwise. heir instituted is entrusted with the obligation to
preserve and to transmit to a second heir the whole
The right of the parents over the fruits and income of or part of the inheritance, shall be valid and shall
the child's property shall be limited primarily to the take effect, provided such substitution does not go
child's support and secondarily to the collective daily beyond one degree from the heir originally instituted,
needs of the family. and provided further, that the fiduciary or first heir
and the second heir are living at the time of the
3. Mixed: created both by law and the acts of death of the testator.
persons
3. If by testamentary succession, there must
Article 565, Civil Code. The rights and obligations be only 2 successive usufructuaries, and
of the usufructuary shall be those provided in the both must be alive or at least already
title constituting the usufruct; in default of such title, conceived at the time of the testators death.
or in case it is deficient, the provisions contained in
the two following Chapters shall be observed.
Article 869, Civil Code. A provision whereby the
testator leaves to a person the whole or part of the
The rights and duties of the usufructuary inheritance, and to another the usufruct, shall be
provided by law may be modified or valid. If he gives the usufruct to various persons, not
eliminated by the parties. simultaneously, but successively, the provisions of
The title constituting the usufruct may Article 863 shall apply
validly authorize the usufructuary to
alienate the thing itself held in usufruct. C. By Object of Usufruct
If the usufructuary is authorized to
alienate the thing in case of Article 564, Civil Code. Usufruct may be
necessity, it is the usufructuary who constituted on the whole or a part of the fruits of the
thing, in favor of one more persons, simultaneously
or successively, and in every case from or to a
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
PROPERTY
b. Abnormal or irregular
Article 595, Civil Code. The owner may construct
Article 574, Civil Code. Whenever the usufruct any works and make any improvements of which the
includes things which cannot be used without being immovable in usufruct is susceptible, or make new
consumed, the usufructuary shall have the right to plantings thereon if it be rural, provided that such
make use of them under the obligation of paying acts do not cause a diminution in the value of the
their appraised value at the termination of the usufruct or prejudice the right of the usufructuary.
usufruct, if they were appraised when delivered. In
case they were not appraised, he shall have the A universal usufructuary must pay the
right to return at the same quantity and quality, or debts of the naked owner, if stipulated.
pay their current price at the time the usufruct If there are no stipulations, the
ceases. usufructuary only has to pay when the
usufruct has been made in fraud of
In reality, the usufruct is not upon creditors.
the consumable things themselves
which are delivered to the Article 758, Civil Code. When the donation
usufructuary, but upon the sum imposes upon the donee the obligation to pay the
representing their value or upon a debts of the donor, if the clause does not contain
quantity of things of the same kind any declaration to the contrary, the former is
and quality. understood to be liable to pay only the debts which
The usufructuary, in effect, becomes appear to have been previously contracted. In no
the owner of the things in usufruct, case shall the donee be responsible for the debts
exceeding the value of the property donated, unless
while the grantor becomes a mere
a contrary intention clearly appears.
creditor entitled to the return of the
value or of the things of the same Article 759, Civil Code. There being no stipulation
quantity and quality (as if converted regarding the payment of debts, the donee shall be
into a simple loan) responsible therefor only when the donation has
been made in fraud of creditors.
PROPERTY
he is bound to preserve the form and Without need to The owner shall
substance of the thing. reimburse the expenses reimburse to the
Usufructuary rights may be transferred, to the owners usufructuary ordinary
assigned or otherwise disposed of by cultivation expenses
the usufructuary. from the proceeds of the
Not exempt from execution and can be fruits (not to exceed the
sold at public auction. value of the fruits)
rd
Without prejudice to the Rights of innocent 3
rd
2. As to hidden treasure, usufructuary is right of 3 persons e.g. if parties should not be
the fruits had been prejudiced.
considered a stranger without a right to a planted by a possessor
share, unless he is also the finder of the in good faith, the
treasure pending crop expenses
and charges shall be
Article 566, Civil Code. The usufructuary shall be prorated between said
entitled to all the natural, industrial and civil fruits of possessor and the
the property in usufruct. With respect to hidden usufructuary
treasure which may be found on the land or
tenement, he shall be considered a stranger. Fruits already matured at the time of the
termination of the usufruct, which
Article 438, Civil Code. Hidden treasure belongs to
ordinarily would have already been
the owner of the land, building, or other property on
which it is found. gathered by the usufructuary, may
remain ungathered for no fault imputable
Nevertheless, when the discovery is made on the to him, but because of malice or an act
rd
property of another, or of the State or any of its imputable to the naked owner or a 3
subdivisions, and by chance, one-half thereof shall person, or even due to force majeure or
be allowed to the finder. If the finder is a trespasser, fortuitous event.
he shall not be entitled to any share of the treasure.
4. Right to civil fruits
If the things found be of interest to science of the
arts, the State may acquire them at their just price,
Article 569, Civil Code. Civil fruits are deemed to
which shall be divided in conformity with the rule
stated. accrue daily, and belong to the usufructuary in
proportion to the time the usufruct may last.
PROPERTY
Article 572, Civil Code. The usufructuary may
personally enjoy the thing in usufruct, lease it to as the tenant thereof; and,
another, or alienate his right of usufruct, even by a as long as the obligations
gratuitous title; but all the contracts he may enter she had assumed towards
into as such usufructuary shall terminate upon the the owner are fulfilled.
expiration of the usufruct, saving leases of rural (Fabie v. Gutierrez David)
lands, which shall be considered as subsisting A lease executed by the owner
during the agricultural year.
before the creation of the
usufruct is not extinguished by
a. Exceptions:
such usufruct.
Legal usufructs cannot be leased.
Caucion juratoria (lease would
d. Limitations on the Right to Lease the
show that the usufructuary does not Property
need the property badly)
Usufructuary cannot alienate a thing
b. Effect of the transfer of right:
in usufruct
The transfer or lease of the usufruct
Cannot alienate or dispose of
does NOT terminate the relation of
the objects included in the
the usufructuary with the owner
usufruct
Death of the transferee does not
Cannot renounce a servitude
terminate the usufruct but it
Cannot mortgage or pledge a
terminates upon the death of the
thing
usufructuary who made the transfer.
EXCEPT: When the right of
c. Rules as to Lease
usufruct is converted into the
The property in usufruct may be
right of ownership
leased even without the consent of
o When the things are
the owner.
consumable (574);
The lease should be for the same
o When the things by their
period as the usufruct.
nature are intended for sale,
EXCEPT: leases of rural lands
such as the merchandise in
continues for the remainder of
a commercial
the agricultural year
establishment; and
A lease executed by the
o When the things, whatever
usufructuary before the
their nature, are delivered
termination of the usufruct and
under appraisal as
subsisting after the termination
equivalent to their sale
of the usufruct must be
respected, but the rents for the
Future crops may be sold but such
remaining period will belong to
sale would be void if not ratified by
the owner.
the owner.
o If the usufructuary has
The buyers remedy is to
leased the lands or
recover from the usufructuary.
tenements given in usufruct,
Only voluntary usufruct can be
and the usufruct should
alienated.
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
PROPERTY
may deem proper, provided he does not alter its 1. Right to mortgage right of usufruct
form or substance; but he shall have no right to be
indemnified therefor. He may, however, remove
Article 572, Civil Code. The usufructuary may
such improvements, should it be possible to do so
personally enjoy the thing in usufruct, lease it to
without damage to the property.
another, or alienate his right of usufruct, even by a
gratuitous title; but all the contracts he may enter
Usufructuary is not entitled to into as such usufructuary shall terminate upon the
reimbursement. expiration of the usufruct, saving leases of rural
Whenever the usufructuary can remove lands, which shall be considered as subsisting
the improvements without injury to the during the agricultural year.
property in usufruct, he has the right to
do so, and the owner cannot prevent Does not include parental usufruct
him from doing so even upon payment because of personal and family
of their value. considerations.
This right does not involve an obligation
if the usufructuary does not wish to 2. Right to alienate the usufruct except in
exercise it, he cannot be compelled by purely personal usufructs or when title
the owner to remove the improvements. constituting it prohibits the same
This right to remove improvements can Parental usufruct is inalienable
be enforced only against the owner, not
against a purchaser in good faith to
whom a clean title has been issued. VI. Rights of the Naked Owner
Usufructuary may set off the
improvements against any damage to
1. At the beginning of the usufruct (see
the property
obligations of usufructuary at the beginning
Article 580, Civil Code. The usufructuary may set
of the usufruct)
off the improvements he may have made on the 2. During the usufruct
property against any damage to the same. a. Retains title to the thing or property
b. He may alienate the property: he may
It is necessary that the not alter the form or substance of the
improvements should have thing; nor do anything prejudicial to the
increased the value of the property, usufructuary
and that the damages are imputable
to the usufructuary. Article 581, Civil Code. The owner of property the
Increase in value and the amount of usufruct of which is held by another, may alienate it,
but he cannot alter its form or substance, or do
damages are set off against each anything thereon which may be prejudicial to the
other. usufructuary.
If the damages exceed the increase
in value, the difference should be c. He may construct buildings, make
paid by the usufructuary as improvements and plantings, provided:
indemnity. Value of the usufruct is not impaired
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
Rights of the usufructuary are not Title constituting usufruct excused the
prejudiced making of inventory
Title constituting usufruct already makes an
inventory
VII. Obligations of the Usufructuary
To give a bond for the faithful performance of
A. At the Beginning of Usufruct or Before
duties as usufructuary
Exercising the Usufruct
Any kind of sufficient security is allowed, e.g.
cash, personal bond, mortgage
Article 583, Civil Code. The usufructuary, before
entering upon the enjoyment of the property, is
No bond is required in the following
obliged: a. No prejudice would result (Art. 585)
1. To make, after notice to the owner or his b. Usufruct is reserved by a donor (Art.
legitimate representative, an inventory of all the 584)
property, which shall contain an appraisal of the Gratitude on the donees part
movables and a description of the condition of demands that the donor be excused 187
the immovables; from filing the bond
PROPERTY
2. To give security, binding himself to fulfill the c. Title constituting usufruct excused
obligations imposed upon him in accordance
usufructuary
with this Chapter.
d. If usufructuary takes possession under a
caucion juratoria (Art. 587)
[NOTE: These requirements are NOT conditions The security given may be by a
precedent to the commencement of the right of personal bond, a pledge, or a
the usufructuary but merely to the entry upon the mortgage.
possession and enjoyment of the property.] It is only by way of exception that a
caucion juratoria is allowed, and
To make an inventory only under the special
Requisites circumstances:
a. Immovables must be described o Proper court petition
b. Movables appraised because they are o Necessity for delivery of
easily lost or deteriorated. furniture, implements or house
Concurrence of the owner in the making of included in the usufruct
the inventory o Approval of the court
Expenses for the making of the inventory o Sworn promise
are borne by the usufructuary A usufructuary under this can
Inventory may be in a private document, neither alienate his right nor lease
except when immovables are involved (a the property, for that would mean
rd
public instrument is prescribed to affect 3 that he does not need the dwelling
persons) or the implements and furniture.
Failure to make an inventory failure does not
affect the rights of the usufructuary to enjoy Article 585, Civil Code. The share of the co-
the property and its fruits. owners, in the benefits as well as in the charges,
a. A prima facie presumption arises that shall be proportional to their respective interests.
the property was received by the Any stipulation in a contract to the contrary shall be
usfructuary in good condition void.
b. Even if he is already in possession, he
may still be required to make an The portions belonging to the co-owners in the co-
inventory. ownership shall be presumed equal, unless the
contrary is proved.
Exceptions to the requirement of
inventory Article 584, Civil Code. The provisions of No. 2 of
a. No one will be injured thereby the preceding article shall not apply to the donor
b. Title of the usufruct excuses the making who has reserved the usufruct of the property
of the inventory donated, or to the parents who are usufructuaries of
their children's property, except when the parents
Article 585, Civil Code. The usufructuary, whatever contract a second marriage.
may be the title of the usufruct, may be excused
from the obligation of making an inventory or of Article 587, Civil Code. If the usufructuary who has
giving security, when no one will be injured thereby. not given security claims, by virtue of a promise
under oath, the delivery of the furniture necessary
for his use, and that he and his family be allowed to
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
live in a house included in the usufruct, the court o He shall have the ff. options:
may grant this petition, after due consideration of the 1. Receivership of realty, sale of
facts of the case. movables, deposit of securities,
or investment of money; or
The same rule shall be observed with respect to
2. Retention of the property as
implements, tools and other movable property
necessary for an industry or vocation in which he is administrator.
engaged. o Net products less administration
expenses fixed by agreement or by
If the owner does not wish that certain articles be the Court, shall be delivered to the
sold because of their artistic worth or because they usufructuary.
have a sentimental value, he may demand their
delivery to him upon his giving security for the Right of the usufructuary
payment of the legal interest on their appraised o He may alienate his right over the
value.
property which he does not possess
in the same form as he holds it,
without prejudice to the right of the 188
Effect of filing a bond transferee to give the required
PROPERTY
security.
Article 588, Civil Code. After the security has been
given by the usufructuary, he shall have a right to all
the proceeds and benefits from the day on which, in
accordance with the title constituting the usufruct, he B. During the Usufruct
should have commenced to receive them
To take care of the thing like a good father of
Retroactivity: upon giving the security, a family
the usufructuary will be entitled to all the
benefits accruing since the time when Article 589, Civil Code. The usufructuary shall take
he should have begun to receive them. care of the things given in usufruct as a good father
of a family.
Effect of failure to give bond Article 610, Civil Code. A usufruct is not
extinguished by bad use of the thing in usufruct; but
Article 586, Civil Code. Should the usufructuary fail if the abuse should cause considerable injury to the
to give security in the cases in which he is bound to owner, the latter may demand that the thing be
give it, the owner may demand that the immovables delivered to him, binding himself to pay annually to
be placed under administration, that the movables the usufructuary the net proceeds of the same, after
be sold, that the public bonds, instruments of credit deducting the expenses and the compensation
payable to order or to bearer be converted into which may be allowed him for its administration.
registered certificates or deposited in a bank or
public institution, and that the capital or sums in
1. When damages are caused to the property
cash and the proceeds of the sale of the movable
property be invested in safe securities. by the fault or negligence of the
usufructuary, the naked owner need not wait
The interest on the proceeds of the sale of the for the termination of the usufruct before
movables and that on public securities and bonds, bringing the action to recover proper
and the proceeds of the property placed under indemnity.
administration, shall belong to the usufructuary. 2. The bad use of a thing, which causes
considerable injury, entitles the owner to
Furthermore, the owner may, if he so prefers, until demand the delivery and administration of
the usufructuary gives security or is excused from so
the thing.
doing, retain in his possession the property in
usufruct as administrator, subject to the obligation to 3. The exercise of this remedy does NOT
deliver to the usufructuary the net proceeds thereof, extinguish the usufruct.
after deducting the sums which may be agreed upon
or judicially allowed him for such administration. To undertake ordinary repairs
Right of the naked owner Article 592, Civil Code. The usufructuary is obliged
o Potestative right; if he does not wish to make the ordinary repairs needed by the thing
to exercise it, he may deliver the given in usufruct.
property to the usufructuary.
By ordinary repairs are understood such as are
o Delivery, however, does not mean a required by the wear and tear due to the natural use
renunciation of the right to demand of the thing and are indispensable for its
security. preservation. Should the usufructuary fail to make
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
them after demand by the owner, the latter may 2. General Rule: Naked owner must make the
make them at the expense of the usufructuary. extraordinary repairs
Usufructuary obliged to pay legal
1. Ordinary repairs: interest on the amount while usufruct
a. Deteriorations or defects arise from the lasts
natural use of the thing;
b. Repairs are necessary for the 3. If the extraordinary repairs are
preservation of the thing. indispensable, and the naked owner fails to
2. The usufructuary is bound to pay only for the undertake them, the usufructuary may make
repairs made during the existence of the such repairs
usufruct. Requisites:
If the defects existed already at the time a. There must be due notification to
the usufruct began, the obligation to the naked owner of the urgency if
defray the ordinary repairs falls upon the it is not urgent, there is no obligation
owner. to give notice.
3. If the defects are caused by the ordinary use b. The naked owner failed to make 189
of the thing, the usufructuary may exempt them
PROPERTY
himself from making the repairs by returning c. The repair is needed for
to the owner the fruits received during the preservation
time that the defects took place. The usufructuary who has made the
EXCEPT: When the ordinary repairs are extraordinary repairs necessary for
due to defects caused by the fault of the preservation, is entitled to recover from
usufructuary the owner the increase in value which
4. If the usufructuary fails to make the repairs the tenement acquired by reason of
even after demand, the owner may make such works.
them at the expense of the usufructuary Usufructuary may retain until he is paid.
To notify owner of need to undertake To pay for annual charges and taxes on the
extraordinary repairs fruits
Article 593, Civil Code. Extraordinary repairs shall Article 596, Civil Code. The payment of annual
be at the expense of the owner. The usufructuary is charges and taxes and of those considered as a lien
obliged to notify the owner when the need for such on the fruits, shall be at the expense of the
repairs is urgent. usufructuary for all the time that the usufruct lasts.
Article 594, Civil Code. If the owner should make Article 597, Civil Code. The taxes which, during the
the extraordinary repairs, he shall have a right to usufruct, may be imposed directly on the capital,
demand of the usufructuary the legal interest on the shall be at the expense of the owner.
amount expended for the time that the usufruct lasts.
If the latter has paid them, the usufructuary shall pay
Should he not make them when they are him the proper interest on the sums which may have
indispensable for the preservation of the thing, the been paid in that character; and, if the said sums
usufructuary may make them; but he shall have a have been advanced by the usufructuary, he shall
right to demand of the owner, at the termination of recover the amount thereof at the termination of the
the usufruct, the increase in value which the usufruct.
immovable may have acquired by reason of the
repairs. Article 612, Civil Code. Upon the termination of the
usufruct, the thing in usufruct shall be delivered to
the owner, without prejudice to the right of retention
1. Extraordinary repairs pertaining to the usufructuary or his heirs for taxes
and extraordinary expenses which should be
a. Those caused by exceptional
reimbursed. After the delivery has been made, the
circumstances, whether or not they are security or mortgage shall be cancelled.
necessary for the preservation of the
thing; It is well settled that a real tax, being a
b. Those caused by the natural use of the burden upon the capital, should be paid
thing, but are not necessary for its by the owner of the land and not by a
preservation. usufructuary. There is no merit in the
contention of distinguishing public lands
into alienable and indisposable. All
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
Article 601, Civil Code. The usufructuary shall be In either case they shall be distributed as civil fruits,
obliged to notify the owner of any act of a third and shall be applied in the manner prescribed in the
person, of which he may have knowledge, that may preceding article.
be prejudicial to the rights of ownership, and he shall
be liable should he not do so, for damages, as if B. Usufruct of property owned in common
they had been caused through his own fault.
Article 582, Civil Code. The usufructuary of a part 190
of a thing held in common shall exercise all the
PROPERTY
To shoulder the costs of litigation re rights pertaining to the owner thereof with respect to
usufruct the administration and the collection of fruits or
interest. Should the co-ownership cease by reason
Article 602, Civil Code. The expenses, costs and of the division of the thing held in common, the
liabilities in suits brought with regard to the usufruct usufruct of the part allotted to the co-owner shall
shall be borne by the usufructuary. belong to the usufructuary.
C. At the Time of the Termination of the Article 591, Civil Code. If the usufruct be
Usufruct constituted on a flock or herd of livestock, the
To deliver the thing in usufruct to the usufructuary shall be obliged to replace with the
owner in the condition in which he has young thereof the animals that die each year from
received it, after undertaking ordinary natural causes, or are lost due to the rapacity of
repairs beasts of prey.
Exception: abnormal usufruct return
If the animals on which the usufruct is constituted
the thing of same kind, quantity and should all perish, without the fault of the
quality; if with appraised value, must usufructuary, on account of some contagious
return value appraised disease or any other uncommon event, the
usufructuary shall fulfill his obligation by delivering to
the owner the remains which may have been saved
VIII. Special Cases of Usufruct from the misfortune.
Article 570, Civil Code. Whenever a usufruct is Should the usufruct be on sterile animals, it shall be
constituted on the right to receive a rent or periodical considered, with respect to its effects, as though
pension, whether in money or in fruits, or in the constituted on fungible things.
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
1. On sterile stock: same rules on the enforcement of the action he acquires the thing
consumable property govern (i.e. claimed, the usufruct shall be limited to the fruits, the
replacement upon termination) dominion remaining with the owner.
2. On fruitful stock
a. Must replace ordinary losses of the 1. The action may be instituted in the
stock with the young if: usufructuarys name. As the owner of the
Some animals die from natural usufruct, he is properly deemed a proper
causes party in interest.
Some animals are lost due to 2. If the purpose is the recovery of the property
rapacity of beasts of prey or right, he is still required under 578 to
obtain the naked owners authority.
b. There is no obligation to replace if: 3. If the purpose is to object to or prevent
There is a total loss of animals disturbances over the property, no special
because of some unexpected or authority from the naked owner is needed.
unnatural loss (like contagious
disease or any other uncommon 191
event, provided the usufructuary has F. Usufruct on mortgaged property
PROPERTY
no fault);
If all perish, the usufructuary Article 600, Civil Code. The usufructuary of a
should deliver the remains to mortgaged immovable shall not be obliged to pay
the debt for the security of which the mortgage was
the owner.
constituted.
There is a partial loss
If a part of the stock perishes, Should the immovable be attached or sold judicially
the usufruct subsists on the for the payment of the debt, the owner shall be liable
remainder. to the usufructuary for whatever the latter may lose
by reason thereof.
D. Usufruct over fruit bearing trees and 1. When the usufruct is universal and some
sprout and woodlands objects are mortgaged, apply Art. 598.
2. If the usufructuary mortgaged the usufruct
Article 575, Civil Code. The usufructuary of fruit- himself, he is liable to pay his own debt.
bearing trees and shrubs may make use of the dead
trunks, and even of those cut off or uprooted by
accident, under the obligation to replace them with G. Usufruct over an entire patrimony
new plants.
Article 598, Civil Code. If the usufruct be
Article 576, Civil Code. If the owner should make
constituted on the whole of a patrimony, and if at the
the extraordinary repairs, If in consequence of a
time of its constitution the owner has debts, the
calamity or extraordinary event, the trees or shrubs
provisions of Articles 758 and 759 relating to
shall have disappeared in such considerable number
donations shall be applied, both with respect to the
that it would not be possible or it would be too
maintenance of the usufruct and to the obligation of
burdensome to replace them, the usufructuary may
the usufructuary to pay such debts
leave the dead, fallen or uprooted trunks at the
disposal of the owner, and demand that the latter
The same rule shall be applied in case the owner is
remove them and clear the land.
obliged, at the time the usufruct is constituted, to
make periodical payments, even if there should be
The usufructuary can: no known capital.
1. Use dead trunks and those cut off or
uprooted by accident. 1. Applies when:
2. Make usual cuttings that owner used to do. a. If the usufruct is a universal one
3. Cut the trees that are not useful b. And the naked owner Has debts or is
obliged to make periodical payments
(whether or not there be known capital)
E. Usufruct on a right of action 2. General rule: the usufructuary is not liable
for the owners debts.
Article 578, Civil Code. The usufructuary of an 3. Exceptions:
action to recover real property or a real right, or any
a. When it is so stipulated; in which case
movable property, has the right to bring the action
and to oblige the owner thereof to give him the
The usufructuary shall be liable for
authority for this purpose and to furnish him the debt specified.
whatever proof he may have. If in consequence of
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
PROPERTY
usufructuary shall have the right to make use thereof
in accordance with the purpose for which they are
A. Death of usufructuary
intended, and shall not be obliged to return them at
the termination of the usufruct except in their Exceptions
condition at that time; but he shall be obliged to 1. In multiple usufructs: it ends at the death of
indemnify the owner for any deterioration they may the last survivor
have suffered by reason of his fraud or negligence.
Article 611, Civil Code. A usufruct constituted in
1. It is sufficient if the usufructuary returns the favor of several persons living at the time of its
things in the condition in which they may constitution shall not be extinguished until death of
have been found at the time of the expiration the last survivor.
of the usufruct despite ordinary defects
caused by use and deterioration produced a. If simultaneously constituted: all the
by age and time. usufructuaries must be alive (or at least
EXCEPT when caused by the conceived) at the time of constitution.
usufructuarys fraud and negligence. b. If successively constituted:
2. If usufructuary does not return the things If by virtue of donation all the
upon the expiration of the usufruct, he donees-usufructuaries must be
should pay an indemnity equivalent to the living at the time of the donation;
value of the things at the time of such If by will there should only be 2
expiration. successive usufructuaries and both
must have been alive at the time of
testators death.
I. Usufruct over consumable property
2. If the period is fixed by reference to the life
Article 574, Civil Code. Whenever the usufruct of another or there is a resolutory condition
includes things which cannot be used without being Death does not affect the usufruct and
consumed, the usufructuary shall have the right to the right is transmitted to the heirs of the
make use of them under the obligation of paying usfructuary until the expiration of the
their appraised value at the termination of the term or the fulfillment of the condition.
usufruct, if they were appraised when delivered. In
case they were not appraised, he shall have the Article 606, Civil Code. A usufruct granted for the
right to return at the same quantity and quality, or time that may elapse before a third person attains a
pay their current price at the time the usufruct certain age, shall subsist for the number of years
ceases. specified, even if the third person should die before
the period expires, unless such usufruct has been
Abnormal Usufruct expressly granted only in consideration of the
If the thing is appraised at delivery, the existence of such person.
usufructuary must pay their appraised
value at the termination of the usufruct.
If they were not appraised, he must 3. When a contrary intention clearly appears
return the same kind and quality or pay If the usufructuary dies before the
the current price at the expiration of the happening of a resolutory condition, the
usufruct. usufruct is extinguished.
CIVIL LAW REVIEWER Chapter VII. USUFRUCT
st
1 view: usufruct is personal and it Article 607, Civil Code. If the usufruct is constituted
CANNOT be extended beyond the on immovable property of which a building forms
lifetime of the usufructuary. (Sanchez part, and the latter should be destroyed in any
Roman and SC) manner whatsoever, the usufructuary shall have a
right to make use of the land and the materials.
B. Expiration of period or fulfillment of The same rule shall be applied if the usufruct is
resolutory condition imposed on constituted on a building only and the same should
usufruct by person constituting the be destroyed. But in such a case, if the owner
usufruct should wish to construct another building, he shall
have a right to occupy the land and to make use of
1. In favor of juridical persons: period cannot the materials, being obliged to pay to the
exceed 50yrs. usufructuary, during the continuance of the usufruct,
the interest upon the sum equivalent to the value of
Article 605, Civil Code. Usufruct cannot be the land and of the materials.
constituted in favor of a town, corporation, or
association for more than fifty years. If it has been
Article 608, Civil Code. If the usufructuary shares 193
with the owner the insurance of the tenement given
constituted, and before the expiration of such period
PROPERTY
in usufruct, the former shall, in case of loss, continue
the town is abandoned, or the corporation or
in the enjoyment of the new building, should one be
association is dissolved, the usufruct shall be
constructed, or shall receive the interest on the
extinguished by reason thereof.
insurance indemnity if the owner does not wish to
rd rebuild.
2. Time that may elapse before a 3 person
attains a certain age, even if the latter dies Should the usufructuary have refused to contribute
before period expires, unless granted only in to the insurance, the owner insuring the tenement
consideration of his existence alone, the latter shall receive the full amount of the
insurance indemnity in case of loss, saving always
Article 606, Civil Code. A usufruct granted for the the right granted to the usufructuary in the preceding
time that may elapse before a third person attains a article.
certain age, shall subsist for the number of years
specified, even if the third person should die before See Summary of Arts. 607 and 608
the period expires, unless such usufruct has been
expressly granted only in consideration of the F. Termination of right of person
existence of such person. constituting the usufruct
Example: usufructs constituted by a
vendee a retro terminate upon
C. Merger of rights of usufruct and naked redemption
ownership in one person
Illustration: H was the usufructuary of G. Prescription
land owned by X. x dies, leaving in his Adverse possession against the owner
will, the naked ownership of the land to or the usfructuary.
H. the usufruct is extinguished because It is not the non-use which extinguishes
now H is both the naked owner and the the usufruct by prescription, but the use
usufructuary. rd
by a 3 person.
There can be no prescription as long as
D. Renunciation of usufruct the usfructuary receives the rents from
1. Waiver: voluntary surrender of the rights of the lease of the property, or he enjoys
the usufructuary, made by him with intent to the price of the sale of his right.
surrender them
2. Limitations
a. Must be express: tacit renunciation is
not sufficient
b. Does not need the consent of naked
owner
c. If made in fraud of creditors, waiver may
be rescinded by them through action
under Article 1381 (accion pauliana)
SITUATION EFFECT
Art. 607
If destroyed property is not insured
If the building forms part of an immovable under Usufruct continues over the land and the remaining
usufruct materials
If usufruct is on the building only Usufruct continues over the land and materials (plus
interests), if owner does not rebuild
If owner rebuilds, usufructuary must allow owner to
occupy the land and to make use of materials; but the
owner must pay interest on the value of both the land
and the materials.
Art. 608 194
If destroyed property is insured before termination of the usufruct
PROPERTY
When insurance premium paid by owner and If owner rebuilds, usufruct subsists on new building
usufructuary (par. 1) If owner does not rebuild interest upon insurance
proceeds paid to usufructuary
When the insurance taken by the naked owner Owner entitled to insurance money (no interest paid to
only because usufructuary refuses to contribute to usufructuary)
the premium (par. 2) If he does not rebuild, usufruct continues over
remaining land and/or owner may pay interest on
value of both materials and land (607)
If owner rebuilds, usufruct does not continue on new
building, but owner must pay interest on value of land
and old materials
When insurance taken by usufructuary only Insurance proceeds goes to the usufructuary
depends on value of usufructuarys insurable No obligation to rebuild
interest Usufruct continues on the land
Owner has not share in insurance proceeds
195
PROPERTY
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
I. Concept
imposes on the owner a restriction as to
his enjoyment of his own property.
Art. 613, Civil Code. An easement or servitude is an o Being an abnormal limitation of
encumbrance imposed upon an immovable for the ownership, it cannot be
benefit of another immovable belonging to a different
presumed.
owner.
The immovable in favor of which the easement is 5. It creates a relation between tenements
established is called the dominant estate; that which o No transfer of ownership, but a
is subject thereto, the servient estate. (530) relationship is created, depending on the
easement.
A real right which burdens a thing with a
prestation of determinate servitudes for the 6. Generally, it may consist in the owner of
exclusive enjoyment of one who is NOT an the dominant estate demanding that the
owner of a tenement owner of the servient estate refrain from
doing something (servitus in non
A real right by virtue of which the owner has faciendo) or that the latter permit that
to ABSTAIN from doing or ALLOW something be done over the servient
somebody else to do something to his property (servitus in patendo), but not in
property for the benefit of another the right to demand that the owner of the
servient right to demand that the owner
II. Essential Features of the servient estate do something
(servitus in faciendo) except if such act
is an accessory obligation to a preadial
1. It is a real right it gives an action in rem servitude (obligation propter rem)
or real action against any possessor of o Servient owner merely allows something
the servient estate to be done to his estate.
o Owner of the dominant estate can file a o EXCEPTIONS: Praedial servitudes
real action for enforcement of right to an a. Right to place beams in an adjoining
easement wall to support a structure
o Action in rem: an action against the b. Right to use anothers wall to
thing itself, instead of against the support a building
person.
7. It is inherent or inseparable from estate
2. It is a right enjoyed over another property to which they actively or passively
(jus in re aliena) it cannot exist in ones belong
property (nulli res sua servit)
o When a dominant and servient estate Art. 617, Civil Code. Easements are inseparable
have the same owner, an easement is from the estate to which they actively or passively
extinguished. Separate ownership is a belong.
prerequisite to an easement.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
act of man.
9. It is indivisible Discontinuous easements are those which are used at
intervals and depend upon the acts of man.
Art. 618, Civil Code. Easements are indivisible. If the
servient estate is divided between two or more Apparent easements are those which are made
persons, the easement is not modified, and each of known and are continually kept in view by external
them must bear it on the part which corresponds to signs that reveal the use and enjoyment of the same.
him.
If it is the dominant estate that is divided between two Nonapparent easements are those which show no
or more persons, each of them may use the easement external indication of their existence. (532)
in its entirety, without changing the place of its use, or
making it more burdensome in any other way.
This classification is important in
10. It has permanence once it attaches, determining prescription: only continuous
whether used or not, it continues and and apparent easements can be created by
may be used at anytime prescription
o Perpetual: exists as long as property Continuous: Use is or may be incessant,
exists, unless it is extinguished. without the intervention of any man
Discontinuous: Used at intervals, and
dependent upon the acts of man.
III. Classification of Servitudes
4. As indication of its existence
1. As to recipient of benefits Also important for purposes of prescription
a. Real or Praedial: exists for the benefit of Apparent: Made known and continually
a particular tenement. kept in view by external signs that reveal
b. Personal: exists for the benefit of the use and enjoyment of the same
persons without a dominant tenement Non-apparent: No external indication of
e.g. usus habitatio (right to reside in a their existence
house) and operae servorum (right to
the labor of slaves) in Roman Law 5. By the object or obligation imposed
(Article 616)
2. As to cause or origin a. Positive: Imposes upon the owner of the
a. Legal: created by law, whether for public servient estate the obligation of allowing
use or for the interest of private persons something to be done, or doing it himself
o Once requisites are satisfied, the b. Negative: Prohibits the owner of the
owner of the dominant estate may servient estate from doing something
ask the Court to declare that an which he could lawfully do if the
easement is created. easement did not exist.
o Example: Natural drainage of o Prescription starts to run from
waters, Abutment of land, Aqueduct, service of notarial prohibition)
etc. o e.g. Negative Easement of Light
and View: An opening is made on
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
owner of the servient estate, in reality, should either of them be alienated, as a title in order
the primary obligation is still negative. that the easement may continue actively and
o Illustration: Under Article 680: the owner passively, unless, at the time the ownership of the two
of a tree whose branches extend over to estates is divided, the contrary should be provided in
a neighboring property is required to cut the title of conveyance of either of them, or the sign
off the extended branches, but the real aforesaid should be removed before the execution of
the deed. This provision shall also apply in case of the
essence of the easement is the
division of a thing owned in common by two or more
obligation NOT TO ALLOW the persons.
branches of the tree to extend beyond
the land o Illustration: The presence of 4 windows
3. Servitus servitutes esse non potes: There was considered an apparent sign which
can be no servitude over another servitude created a negative easement of light
and view (altius non tollendi) i.e. not to
4. A servitude must be exercised civiliter build a structure that will cover the
in a way least burdensome to the owner of windows. (Amor v. Florentino)
the land
Requisites
V. Modes of Acquiring Easements 1. Easement must be continuous and
apparent.
A. By Title juridical act which gives rise Although the road had been used for
to the servitude (e.g. law, donations, more than 20 years, since an easement
contracts or wills) of right of way is a discontinuous
easement, it CANNOT be acquired by
Because the road was voluntarily created as a prescription because of the requirement
servitude by the owner, he may close it at his of continuous or uninterrupted
pleasure. But while the road is open, he may not possession. Since the dominant owner
capriciously exclude the owner of the tuba saloon cannot be continually and
from its use. (North Negros Sugar v. Hidalgo) uninterruptedly crossing the servient
estate, but can do so only at intervals,
1. If easement has been acquired but no proof the easement is necessarily of an
of existence of easement available, and intermittent or discontinuous nature.
easement is one that cannot be acquired by (Ronquillo v. Roco)Sasa
prescription
2. Easement must have existed for 10 years.
Article 623, Civil Code. The absence of a document 3. NO NEED for good faith or just title.
or proof showing the origin of an easement which
cannot be acquired by prescription may be cured by a
deed of recognition by the owner of the servient
estate or by a final judgment.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
VI. Rights and Obligations of Owners of Encarnacion v. Court of Appeals: The Court
granted the modification of the easement stating that
Dominant and Servient Estates under the law, the needs of the dominant property
ultimately determine the width of the passage. And
A. Of Dominant Estate these needs may vary from time to time. When
petitioner started out as a plant nursery operator, he
1. Right of owner of dominant estate and his family could easily make do with a few
(Limited Jus Utendi: limited by the nature of pushcarts to tow the plants to the national highway.
But the business grew and with it the need for the use
the easement itself)
of modern means of conveyance or transport.
Petitioner should not be denied a passageway wide
a. To use the easement and exercise all enough to accomodate his jeepney since that is a
rights necessary for it reasonable and necessary aspect of the plant nursery
business.
Article 625, Civil Code. Upon the establishment of
an easement, all the rights necessary for its use are 2. Obligations of the owner of dominant
considered granted. estate 199
PROPERTY
Article 626, Civil Code. The owner of the dominant
estate cannot use the easement except for the benefit a. To use the easement for benefit of
of the immovable originally contemplated. Neither can immovable and in the manner
he exercise the easement in any other manner than originally established
that previously established. o Article 626 (supra): Right to use
the easement for the benefit of the
o Owner of the dominant estate is immovable originally contemplated,
granted the right to use the principal and in the manner originally
easement, and all accessory established.
servitudes o If established for a particular
o Example: Easement of drawing purpose, the easement cannot be
water carries with it the easement of used for a different one. However, if
right of way to the place where established in a general way,
water is drawn. without specific purpose, the
o Limitation: Only for the original easement can be used for all the
immovable and the original purpose needs of the dominant estate.
PROPERTY
If the owner of the servient estate should make use of caused by the change to the
the easement in any manner whatsoever, he shall owner of the dominant estate or
also be obliged to contribute to the expenses in the to those who may have a right
proportion stated, saving an agreement to the to use the easement
contrary.
c. To use the easement
B. Of Servient Estate o May use the easement but must
also contribute proportionately to the
1. Rights of owner of servient estate expenses
Nevertheless, if by reason of the place originally Article 631, Civil Code. Easements are extinguished:
assigned, or of the manner established for the use of 1. By merger in the same person of the ownership
the easement, the same should become very of the dominant and servient estates;
inconvenient to the owner of the servient estate, or 2. By nonuser for ten years; with respect to
should prevent him from making any important works, discontinuous easements, this period shall be
repairs or improvements thereon, it may be changed computed from the day on which they ceased to
at his expense, provided he offers another place or be used; and, with respect to continuous
manner equally convenient and in such a way that no easements, from the day on which an act
injury is caused thereby to the owner of the dominant contrary to the same took place;
estate or to those who may have a right to the use of 3. When either or both of the estates fall into such
the easement. condition that the easement cannot be used; but
it shall revive if the subsequent condition of the
estates or either of them should again permit its
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
use, unless when the use becomes possible, o EXCEPT: If the suspension exceeds 10
sufficient time for prescription has elapsed, in years, the easement is deemed
accordance with the provisions of the preceding extinguished by non-user
number;
4. By the expiration of the term or the fulfillment of
4. Expiration of the term or fulfillment of
the condition, if the easement is temporary or
conditional; resolutory condition
5. By the renunciation of the owner of the dominant o Applicable only to voluntary easements
estate;
6. By the redemption agreed upon between the 5. Renunciation of the owner of the
owners of the dominant and servient estates. dominant estate
(546a) o Must be specific, clear, express
(distinguished from non-user)
Modes of Extinguishment
1. Merger: must be absolute, perfect and 6. Redemption agreed upon between the
definite, not merely temporary owners
o Absolute: Ownership of the property 201
must be absolute, thus not applicable to 7. Other causes not mentioned in Article
PROPERTY
lease, usufruct, etc. 631
o Perfect: Merger must not be subject to o Annulment and rescission of the title
a condition constituting the voluntary easement
o If the merger is temporary, there is at o Termination of the right of grantor of the
most a suspension of the easement, but voluntary easement
no extinguishment. o Abandonment of the servient estate
Owner of the servient estate gives
2. By non-user for 10 years up ownership of the easement (e.g.
o Owner of dominant estate does not the strip of land where the right of
exercise right over easement. way is constituted) in favor of the
o Inaction, not outright renunciation. dominant estate.
o Due to voluntary abstention by the The easement is extinguished
dominant owner, and not to a fortuitous because ownership is transferred to
event the dominant owner, who now owns
o Computation of the period both properties.
Discontinuous easements: counted o Eminent domain
from the day they ceased to be used The governments power to
Continuous easements: counted expropriate property for public use,
from the day an act adverse to the subject to the payment of just
exercise of the easement took place compensation.
E.g. in an easement of light and o Special cause for extinction of legal
view, the erection of works rights of way; if right of way no longer
obstructing the servitude would necessary
commence the period of Art. 655, Civil Code
prescription If the right of way granted to a
o Use by a co-owner of the dominant surrounded estate ceases to be
estate bars prescription with respect to necessary because its owner
the others has joined it to another abutting
o Servitudes not yet exercised cannot be on a public road, the owner of
extinguished by non-user the servient estate may demand
An easement must have first been that the easement be
used, before it can be extinguished extinguished, returning what he
by inaction. may have received by way of
indemnity. The interest on the
3. Extinguishment by impossibility of use indemnity shall be deemed to be
o Impossibility referred to must render the in payment of rent for the use of
entire easement unusable for all time. the easement.
o Impossibility of using the easement due The same rule shall be applied
to the condition of the tenements (e.g. in case a new road is opened
flooding) only suspends the servitude giving access to the isolated
until it can be used again. estate.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
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demand that the easement be passage
extinguished. o SERVIENT OWNER (Lower Estate)
Owner of the servient estate must Cannot make works which
return indemnity he received (value would impede the servitude e.g.
of the land) dams which would block the
natural flow, walls, ditches that
VIII. Legal Easements enclose the tenements.
Can construct works that he
may deem necessary to prevent
A. Law governing legal easements
damage to himself, so long as
he does not cause damage to
1. For public easements
inferior tenements
a. Special laws and regulations relating
thereto (ex: PD 1067 and PD 705)
2. Easements on lands along riverbanks
b. By the provisions of Chapter 2, Title VII,
Book II, NCC Article 638, Civil Code. The banks of rivers and
streams, even in case they are of private ownership,
2. For private legal easements are subject throughout their entire length and within a
a. By agreement of the interested parties zone of three meters along their margins, to the
whenever the law does not prohibit it easement of public use in the general interest of
rd
and no injury is suffered by a 3 person navigation, floatage, fishing and salvage.
b. By the provisions of Chapter 2, title VII,
Book II Estates adjoining the banks of navigable or floatable
rivers are, furthermore, subject to the easement of
towpath for the exclusive service of river navigation
B. Private legal easements provided for by
and floatage.
the NCC
If it be necessary for such purpose to occupy lands of
THOSE ESTABLISHED FOR THE USE OF private ownership, the proper indemnity shall first be
WATER OR EASEMENTS RELATING TO paid.
WATERS
3. Abutment of a dam
1. Natural drainage of waters
Article 639, Civil Code. Whenever for the diversion
Article 637, Civil Code. Lower estates are obliged to or taking of water from a river or brook, or for the use
receive the waters which naturally and without the of any other continuous or discontinuous stream, it
intervention of man descend from the higher estates, should be necessary to build a dam, and the person
as well as the stones or earth which they carry with who is to construct it is not the owner of the banks, or
them. lands which must support it, he may establish the
easement of abutment of a dam, after payment of the
The owner of the lower estate cannot construct works proper indemnity. (554)
which will impede this easement; neither can the
owner of the higher estate make works which will
increase the burden.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
indemnify their owners, as well as the owners of the
Existing structures cannot be injured to
lower estates upon which the waters may filter or
descend. establish the easement.
RIGHT OF SERVIENT OWNER:
Article 643, Civil Code. One desiring to make use of May fence or build over the
the right granted in the preceding article is obliged: aqueduct in such a manner as not to
1. To prove that he can dispose of the water and cause any damage, or render
that it is sufficient for the use for which it is impossible any necessary repairs
intended; and cleanings
2. To show that the proposed right of way is the
most convenient and the least onerous to third
5. Stop lock and sluice gate
persons;
3. To indemnify the owner of the servient estate in
the manner determined by the laws and Article 647, Civil Code. One who for the purpose of
regulations. irrigating or improving his estate, has to construct a
stop lock or sluice gate in the bed of the stream from
Article 644, Civil Code. The easement of aqueduct which the water is to be taken, may demand that the
for private interest cannot be imposed on buildings, owners of the banks permit its construction, after
courtyards, annexes, or outhouses, or on orchards or payment of damages, including those caused by the
gardens already existing. new easement to such owners and to the other
irrigators.
Article 645, Civil Code. The easement of aqueduct
does not prevent the owner of the servient estate from 6. Stop lock and sluice gate
closing or fencing it, or from building over the 1. REQUISITES:
aqueduct in such manner as not to cause the latter 1) Can be imposed only for reasons of
any damage, or render necessary repairs and public use in favor of a town or
cleanings impossible. village
2) After payment of proper indemnity
Article 645, Civil Code. For legal purposes, the
easement of aqueduct shall be considered as
continuous and apparent, even though the flow of the
water may not be continuous, or its use depends upon THE EASEMENT OF RIGHT OF WAY
the needs of the dominant estate, or upon a schedule
of alternate days or hours. Article 649, Civil Code. The owner, or any person
who by virtue of a real right may cultivate or use any
o Any person wishing to use upon his own immovable, which is surrounded by other immovables
estate any water can make it flow pertaining to other persons and without adequate
outlet to a public highway, is entitled to demand a
through intervening estates with
right of way through the neighboring estates, after
obligation to indemnify owners of such payment of the proper indemnity.
estates
o Considered as a continuous and Should this easement be established in such a
apparent easement, even though the manner that its use may be continuous for all the
flow of water may not be continuous needs of the dominant estate, establishing a
permanent passage, the indemnity shall consist of the
value of the land occupied and the amount of the
damage caused to the servient estate.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
easement, because the lessor is the one E.g. as between a longer way
bound to maintain him in the enjoyment without injury to the servient
of the property estates constructions, etc. and
a shorter way that would cause
3. REQUISITES: injury
(1) Dominant estate is surrounded by
other immovables owned by other b. The criterion of least prejudice
persons to the servient estate must
(2) There must absolutely be no access prevail over the criterion of
to a public highway shortest distance although this
(3) Even if there is access, it is difficult is a matter of judicial
or dangerous to use, or grossly appreciation. While shortest
insufficient distance may ordinarily imply
4. Mere inconvenience in the use least prejudice, it is not always
of an outlet does not render the so as when there are permanent
easement a necessity. structures obstructing the
5. An adequate outlet is one that shortest distance; while on the
is sufficient for the purpose and other hand, the longest distance
needs of the dominant owner, may be free of obstructions and
and can be established at a the easiest or most convenient
reasonable expense. to pass through. (Quimen v.
6. Does not necessarily have to be CA)
by land an outlet through a
navigable river if suitable to the c. The fact that LGV had other
needs of the tenement is means of egress to the public
sufficient. highway cannot extinguish the
said easement, being voluntary
(4) Isolation of the immovable is NOT and not compulsory. The free
due to the dominant owners own ingress and egress along
acts e.g. if he constructs building to Mangyan Road created by the
others obstructing the old way voluntary agreement between
(5) Payment of indemnity the parties is thus legally
o If right of way is permanent and demandable with the
continuous for the needs of the corresponding duty on the
dominant estate = value of the servient estate not to obstruct
land + amount of damage the same. (La Vista
caused to the servient estate Association v. CA)
o If right of way is limited to
necessary passage for 2) Width of the easement shall be that
cultivation of the estate and for which is sufficient for the needs of
gathering crops, without the dominant estate
permanent way = damage
caused by encumbrance.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
servient estate
If the right of way is permanent, 3) Extinguishment is NOT automatic.
the necessary repairs shall be The owner of the servient estate
made by the owner of the must ask for such extinguishment
dominant estate. A
proportionate share of the taxes 4) Indemnity paid to the servient owner
shall be reimbursed by said must be returned:
owner to the proprietor of the a. If easement is permanent: value
servient estate (Art. 654, CC) of the land must be returned
b. If easement is temporary:
5) In cases where the dominant estate nothing to be returned
needing the right of way is acquired
by sale, exchange or partition and 9. SPECIAL RIGHTS OF WAY
the Estate is surrounded by other Right of way to carry materials for
estates owned by the vendor, the construction, repair,
exchanger of co-owner improvement, alteration or
beautification of a building through
a. Vendor, exchanger or co-owner the estate of another
shall grant the right of way Right of way to raise on anothers
WITHOUT INDEMNITY land scaffolding or other objects
Granting the servitude necessary for the work
without indemnity is a tacit If it be indispensable for the
condition of the sale, construction, repair,
exchange or partition: each improvement, alteration or
party receives something beautification of a building, to
b. Donor (simple donation) must carry materials through the
still be indemnified for right of estate of another, or to raise
way therein scaffolding or other
Grantor receives nothing objects necessary for the work,
from the grantee, therefore the owner of such estate shall
no implied condition as to a be obliged to permit the act,
right of way is constituted after receiving payment of the
c. If the land of the grantor is the proper indemnity for the
one which becomes isolated, he damage caused him. (Art. 656)
may demand right of way after Right of way for the passage of
paying an indemnity livestock known as animal path,
Whenever a piece of land animal trail, watering places, resting
acquired by sale, exchange places, animal folds (Art. 657)
or partition, is surrounded Easements of the right of way
by other estates of the for the passage of livestock
vendor, exchanger, or co- known as animal path, animal
owner, he shall be obliged trail or any other, and those for
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
the provisions of this Section (iii) Entire wall is built WITHIN the
and those of Articles 640 and boundaries of one of the estates
641 shall be observed. In this (iv) Dividing wall bears the burden of
case the width shall not exceed beams, floors and roof frame of only
10 meters one of the buildings
(v) Dividing wall between courtyards,
THE EASEMENT OF PARTY WALL garden or tenements is constructed
in such a way that the it sheds water
Article 659, Civil Code. The existence of an upon only one of the estates
easement of party wall is presumed, unless there is a (vi) Dividing wall has stepping stones
title, or exterior sign, or proof to the contrary: which project from the surface of
1. In dividing walls of adjoining buildings up to the one side only, but not on the other
point of common elevation;
(vii) Lands enclosed by fences or live
2. In dividing walls of gardens or yards situated in
cities, towns, or in rural communities; hedges adjoin others which are not
3. In fences, walls and live hedges dividing rural enclosed
lands.
EXCEPT: if the defects were occasioned THE EASEMENT OF LIGHT AND VIEW
only by one owner 1. NATURE OF THE EASEMENT
PROPERTY
constructed. owners / violation of the right to
proportional use of the party wall.
c. An owner of a building supported by a
party wall who desires to demolish his b. NEGATIVE: Formal prohibition upon the
building, may also renounce his part owner of the adjoining land or tenement
ownership of the wall.
When a person opens a window on his
BUT he must still bear the cost of all the own building, he does nothing more than
repairs and work necessary to prevent exercise an act of ownership on his
any damage to the party wall. property.
Does not establish an easement
d. Every owner may increase the height
of the wall, at his own expense and Coexistent is the right of the owner of
paying for damages caused by the work. the adjacent property to build on his own
He must also pay for: land, even if such structures cover the
Expenses of maintaining the wall in window
the part newly raised, or deepened
foundation If the adjacent owner does not build
Indemnity for increased expenses structures to obstruct the window, such
necessary for the preservation of is considered mere tolerance and NOT a
the wall by reason of the greater waiver of the right to build.
height or depth which has been
given it An easement is created only when the
Reconstruction expenses in case owner opens up a window prohibits or
the party wall cannot bear the restrains the adjacent owner from doing
increased height. anything, which may tend to cut off or
If increased thickness is needed, the interrupt the light + prescriptive period
owner shall give the space required
from his own land 2. EASEMENT vs. DIRECT VIEW
Other owners may acquire part o Acquired by the person who opens the
ownership of the increased height, window
depth or thickness of the wall, by o The following structures cannot be built
paying proportionately the value of without following the prescribed
the work at the time of the distances
acquisition, and of the land for its Window, apertures, balconies and
increased thickness other projections with a direct view
upon or towards an adjoining land
e. Part-owners may use the party wall IN must have a distance of 2 METERS
PROPORTION to the right he may have between the wall and the contiguous
in the co-ownership, without interfering property.
with the common and respective uses of
the others.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
For structures with a side or oblique With iron grating imbedded in the
view (at an angle from the boundary wall
line), there should be a distance of With a wire screen
60 centimeters. o But owner of the adjoining estate can
close the opening if:
Measured from: He acquires part ownership of the
The outer line of the wall if the party wall
openings do not project He constructs a building or raises a
The outer line of the openings if wall on his land, unless an
they project easement of light has been acquired
The dividing line between the o If requirements are not complied with,
two properties in cases of the owner of the adjoining estate may
oblique view compel the closure of the opening.
If distances are not complied o The action to compel the closing of the
with: opening may prescribe, if the opening is
Windows are considered permitted without protest. 208
unlawful openings BUT prescription of the action to
PROPERTY
Owner may be ordered by the compel the closure of the opening
Court to close them DOES NOT MEAN that the
Even if the adjoining owner servitude of light and view has been
does not object to the acquired.
construction of such structures Period of acquisitive prescription will
at first, he cannot be held to be only start to run from the time the
in estoppel, except if 10-year owner asserting the servitude has
period of acquisitive prescription forbidden the owner of the adjoining
has passed. tenement from doing something he
Does not give rise to could lawfully do.
prescription THUS, although the action to
Mere opening of the window in compel the closure might have
violation of the distances does prescribed, the owner of the
not give rise to the easement of adjoining estate may still build on
light and view by prescription his own land a structure which might
obstruct the view.
o In buildings separated by a public way
or alley, not less than 3 meters wide, the THE EASEMENT OF DRAINAGE OF
distances required (2 m, 60 cm) do not BUILDINGS
apply.
o If an easement is acquired to have direct Article 674, Civil Code. The owner of a building shall
views, balconies or belvederes, the be obliged to construct its roof or covering in such
owner of the servient estate must not manner that the rain water shall fall on his own land or
build at less than 3 meters from the on a street or public place, and not on the land of his
neighbor, even though the adjacent land may belong
boundary line of the two tenements.
to two or more persons, one of whom is the owner of
The distances may be stipulated by the roof.
the parties, but should not be less
than what is prescribed by the law Even if it should fall on his own land, the owner shall
(2 meters and 60 cm) be obliged to collect the water in such a way as not to
cause damage to the adjacent land or tenement.
3. EXCEPTION TO EASEMENT vs. DIRECT
VIEW Article 675, Civil Code. The owner of a tenement or
o Owners of a wall (not a party wall) a piece of land, subject to the easement of receiving
water falling from roofs, may build in such manner as
adjoining a tenement of another can
to receive the water upon his own roof or give it
make openings to admit light without another outlet in accordance with local ordinances or
complying with the distance customs, and in such a way as not to cause any
requirements SO LONG AS: nuisance or damage whatever to the dominant estate.
Openings are made at the height of
the ceiling joists (horizontal beams) Article 676, Civil Code. Whenever the yard or court
or immediately under the ceiling of a house is surrounded by other houses, and it is
Size: 30 cm square not possible to give an outlet through the house itself
to the rain water collected thereon, the establishment
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
of an easement of drainage can be demanded, giving renounced by stipulation on the part of the adjoining
an outlet to the water at the point of the contiguous proprietors.
lands or tenements where its egress may be easiest,
and establishing a conduit for the drainage in such In the absence of regulations, such precautions shall
manner as to cause the least damage to the servient be taken as may be considered necessary, in order to
estate, after payment of the property indemnity. avoid any damage to the neighboring lands or
tenements.
1. Regulating the disposal of rain water
a. Owner of a building is obliged to Article 679, Civil Code. No trees shall be planted
near a tenement or piece of land belonging to another
construct a roof or covering so as to
except at the distance authorized by the ordinances or
ensure that the rain water shall fall on customs of the place, and, in the absence thereof, at
his own land, or on a street or public a distance of at least two meters from the dividing line
place, and NOT on the land of his of the estates if tall trees are planted and at a distance
neighbor. of at least fifty centimeters if shrubs or small trees are
b. Owner is also obliged to collect the war planted.
falling on his own land so as not to 209
cause damage to adjacent tenements Every landowner shall have the right to demand that
PROPERTY
2. Rain water is res nullius, and has no owner. trees hereafter planted at a shorter distance from his
land or tenement be uprooted.
This article merely imposes a limitation on
the use of ones property, so that rain water The provisions of this article also apply to trees which
falling thereon may not cause damage. have grown spontaneously.
3. Obligation to collect water (#2) is an
exception to the rule requiring lower Article 680, Civil Code. If the branches of any tree
tenements to receive water flowing from should extend over a neighboring estate, tenement,
higher tenements. garden or yard, the owner of the latter shall have the
right to demand that they be cut off insofar as they
EASEMENT GIVING AN OUTLET TO THE may spread over his property, and, if it be the roots of
a neighboring tree which should penetrate into the
WATER THROUGH CONTIGUOUS
land of another, the latter may cut them off himself
ESTATES within his property.
o Requisites:
a. Yard or court of a house is surrounded Art. 681, Civil Code. Fruits naturally falling upon
by other houses adjacent land belong to the owner of said land.
b. Water is collected thereon
c. Not possible to give an outlet through 1. SUMMARY
the house itself CONSTRUCTIONS may be built only after
d. Establishment of conduit for drainage complying with prescribed regulations
must be at a point where egress is (special laws, ordinances, regulations):
easiest and where it will cause the least a. Constructions or plantings near fortified
damage to the servient estate places or fortresses
e. After payment of proper indemnity b. Aqueduct, well, sewer, furnace, forge,
chimney, stable, depository of corrosive
INTERMEDIATE DISTANCES AND WORKS substances, machinery, factory (with
FOR CERTAIN CONSTRUCTIONS AND dangerous and noxious substances)
PLANTINGS Distances must be observed and
protective works necessary for the
Article 677, Civil Code. No constructions can be built conditions must be made
or plantings made near fortified places or fortresses c. Trees planted near a tenement or piece
without compliance with the conditions required in
of land
special laws, ordinances, and regulations relating
thereto In the absence of ordinances or
customs of the place:
Article 675, Civil Code. No person shall build any (1) TALL TREES: At a distance of
aqueduct, well, sewer, furnace, forge, chimney, at least 2 meters from the
stable, depository of corrosive substances, dividing line of the estates
machinery, or factory which by reason of its nature or
products is dangerous or noxious, without observing (2) SHRUBS/SMALL TREES: At
the distances prescribed by the regulations and least 50 cm from the dividing
customs of the place, and without making the
line
necessary protective works, subject, in regard to the
manner thereof, to the conditions prescribed by such
regulations. These prohibitions cannot be altered or
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
PROPERTY
within his property, even without such excavations upon his land as to deprive any
notice to the owner of the trees adjacent land or building of sufficient lateral or
subjacent support.
o Roots, by accession are converted
into the property of the owner of the
land into which they penetrate. 1. An owner cannot make such excavations as
o Also, cutting off the roots will not to deprive any adjacent land or building of
give the cutter any benefit, in sufficient lateral or subjacent support
contrast to cutting off the branches
of a tree. 2. LATERAL SUPPORT
o PRESCRIPTION OF ACTION TO a. Limitation on the right to excavate on his
CUT: Period only starts to run after own land: one cannot excavate so close
the owner of the estate has to an adjoining estate as to deprive it of
demanded that the owner of the natural support and cause it to crumble.
trees cut off the branches or roots, b. Not necessary that the excavation is
and the latter refuses. made on the lot immediately adjoining. It
The fact that the owner does not is sufficient if the excavation results in a
cut off the trees only constituted slide in the plaintiffs property
mere tolerance. c. An owner who makes excavations can
either:
c. Fruits naturally falling upon adjacent Observe a sufficient distance to
land belong to the owner of the land permit the necessary lateral support
o Not by right of occupation but by of adjoining land
principle of accession. Support the latter artificially through
o Owner of the tree retains ownership: walls, etc.
If he picks the fruits from the
branches which invade the 3. SUBJACENT SUPPORT
neighboring tenement a. Exists when there is severance of
If fruits fall on immovables for ownership (surface owner vs. substrata
public use (not considered as owner) as in mines and tunnels.
fruits of these b. The owners of the rights below the
surface are burdened with the easement
to refrain from removing such sufficient
THE EASEMENT AGAINST NUISANCES support which will protect the surface
from subsidence or sinking, and keep it
Article 682, Civil Code. Every building or piece of securely at its original level.
land is subject to the easement which prohibits the
proprietor or possessor from committing nuisance 4. REMEDIES FOR VIOLATION
through noise, jarring, offensive odor, smoke, heat, a. Action for Damages against the one who
dust, water, glare and other causes. made the excavation, whether owner or
contractor, etc.
CIVIL LAW REVIEWER Chapter VIII. EASEMENT
b. Injunction
Restraining the owner from
excavating so as to deprive the land
of natural support
Will prohibit merely any excavation
which shall cause the plaintiffs land
to fall away due to withdrawal of
support
5. OTHER RULES:
a. Stipulations or testamentary provisions
allowing excavations that cause danger
to adjacent land or building is VOID.
b. Also applicable to future constructions
c. Any proprietor intending to make any
excavation shall notify all owners of 211
adjacent lands.
PROPERTY
Notice must sufficiently inform the
adjoining owner of the nature and
extent of the proposed excavation,
so as to enable the owner to take
the necessary precautions to protect
his property.
No formal notice is necessary if the
adjoining owner already has actual
knowledge of such excavation.
But giving notice does not absolve
the excavator from the duty to
exercise reasonable care to avoid
injury to neighbors.
CIVIL LAW REVIEWER Chapter IX. NUISANCE
PROPERTY
any public highway or street, or any body of 3) Annoyance to senses
water; or slaughterhouses and cowhide storage
5. Hinders or impairs the use of property. vats from which emanated vile and
offensive odors; noise of animals kept in
To constitute a nuisance there must be an residential neighborhood
arbitrary or abusive use of property or disregard o To be judged by the effect they are
of commonly accepted standards set by society. calculated to produce upon
ordinary people under normal
Nuisance v. Trespass circumstances, not by their effect
upon the oversensitive, the
Nuisance Trespass
fastidious or the sick, nor, on the
Use of ones own
other hand, by their effect upon
property in such a
manner as to cause injury those who are abnormally
to the property or right or Direct infringement of indifferent to such things, or who by
interest of another, and anothers right of long experience have learned to
generally results from the property. endure them without
commission of an act inconvenience.
beyond the limits of the o Inconvenience must be materially
property affected. interfering with the ordinary
Injury is consequential Injury is immediate comfort, physically, of human
existence.
Nuisance v. Negligence 4) Shocking to decency bawdy or
disorderly house; building used for either
Nuisance Negligence lewdness or of assignation or
Whether it was prostitution
unreasonable for the Whether the defendants
5) Hinders or impairs the use of
defendant to act as he use of his property was
did in view of the unreasonable as to property illegal construction on
threatened danger or plaintiff, without regard to anothers land
harm to one in plaintiffs foreseeability of injury.
position.
Liability for the resulting II. Classes
injury to others
Liability is based on a Art. 695, Civil Code. Nuisance is either public or
regardless of the degree
want of proper care private. A public nuisance affects a community or
of care or skill exercised
to avoid such injury. neighborhood or any considerable number of persons,
Principles ordinarily apply although the extent of the annoyance, danger or
where the cause of action Principles ordinarily apply damage upon individuals may be unequal. A private
is for continuing harm where the cause of action nuisance is one that is not included in the foregoing
caused by continuing or is for harm resulting from definition.
recurrent acts which one act which created an
cause discomfort or unreasonable risk of 1. According to Nature (old classification)
annoyance to plaintiff in injury. a. Nuisance per se or at law
the use of his property.
CIVIL LAW REVIEWER Chapter IX. NUISANCE
PROPERTY
A swimming pool or water tank is not an attractive
The wrong is established nuisance, for while it is attractive, it cannot be a
by proof of the mere act. Proof of the act and its nuisance, being merely an imitation of the work of
It becomes a nuisance consequences. nature. (Hidalgo Enterprises v. Balandan)
as a matter of law.
not liable for continuing it in its original a. Criminal prosecution: Only for a public
form, unless he has been notified of its nuisance, not for a private one.
existence and requested to remove it, or Public nuisances are offenses
has actual knowledge that it is a against the State, and since early
nuisance and injurious to the rights of times it has been held that one who
others. is responsible for this may be
o Nature of liability: All persons who proceeded against criminally by
participate in the creation or maintenance of indictment.
a nuisance are jointly and severally liable for Question of intent is immaterial.
the injury done. Persons liable person is liable for
If 2 or more persons who create or the consequence which his act
maintain the nuisance act entirely produced
independent of one another, and without
any community of interest, concert of b. Civil action:
action, or common design, each is liable 1) Judgment with abatement
only so far as his acts contribute to the defendant convicted of maintain a 214
injury. nuisance may also be ordered to
PROPERTY
For joint liability, there must be some abate the nuisance
joint or concurrent act or community of 2) Injunction where the injury
action or duty, or the several wrongful occasioned by an indictable
acts done at several times must have nuisance is pressing or imminent, so
concurred in their effects as one single that the public safety is menaced or
act to produce the injury complained of. public rights are obstructed or
interfered with, and the special
o Right to recover damages circumstances are such that the
ordinary process of the court is not
Art. 697, Civil Code. The abatement of a sufficiently prompt or effective to
nuisance does not preclude the right of any prevent the injury or obstruction, the
person injured to recover damages for its remedy can be injunction provided
past existence. the right is clear and the wrong has
not been acquiesced in by the
Abatement and damages are plaintiff.
cumulative remedies.
c. Extrajudicial abatement: This right is
o No Prescription based upon necessity which must be
present to justify its exercise.
Art. 698, Civil Code. Lapse of time cannot It must be reasonably and efficiently
legalize any nuisance, whether public or
exercised, means employed must
private.
not be unduly oppressive on
individuals, and no more injury must
The action to abate a public or private
be done to the property or rights of
nuisance is NOT extinguished by
individuals than is necessary to
prescription. (Art. 1143[2])
accomplish the abatement.
No right to compensation if property
taken or destroyed is a nuisance.
IV. Regulation of Nuisances
2. Who can file an action for abatement
A. PUBLIC NUISANCE
Article 700, Civil Code. The district health officer
1. Remedies to abate a nuisance shall take care that one or all of the remedies against
a public nuisance are availed of.
Article 699, Civil Code. The remedies against a
public nuisance are: Article 701, Civil Code. If a civil action is brought by
1. A prosecution under the Penal Code or any local reason of the maintenance of a public nuisance, such
ordinance: or action shall be commenced by the city or municipal
2. A civil action; or mayor.
2. (3) Abatement, without judicial proceedings.
Article 702, Civil Code. The district health officer
shall determine whether or not abatement, without
judicial proceedings, is the best remedy against a
CIVIL LAW REVIEWER Chapter IX. NUISANCE
PROPERTY
Action becomes a tort if an
individual has suffered particular Article 706, Civil Code. Any person injured by a
harm, in which case the nuisance is private nuisance may abate it by removing, or if
treated as a private nuisance with necessary, by destroying the thing which constitutes
the nuisance, without committing a breach of the
respect to such person.
peace or doing unnecessary injury. However, it is
indispensable that the procedure for extrajudicial
3. Requisites of the right of a private abatement of a public nuisance by a private person be
individual to abate a public nuisance followed.
Article 704, Civil Code. Any private person may Article 707, Civil Code. A private person or a public
abate a public nuisance which is specially injurious to official extrajudicially abating a nuisance shall be
him by removing, or if necessary, by destroying the liable for damages:
thing which constitutes the same, without committing 1. If he causes unnecessary injury; or
a breach of the peace, or doing unnecessary injury. 2. If an alleged nuisance is later declared by the
But it is necessary: courts to be not a real nuisance.
1. That demand be first made upon the owner or
possessor of the property to abate the nuisance; a. Action for damages: Recovery is
2. That such demand has been rejected; limited to the damage occasioned up to
3. That the abatement be approved by the district
the time of the commencement of the
health officer and executed with the assistance of
the local police; and action.
4. That the value of the destruction does not exceed If nuisance continues to the time of
three thousand pesos. trial, then damages shall be
computed from that time.
a. The right must be exercised only in If nuisance is permanent, a single
cases of urgent or extreme necessity. action is enough to cover both past
The thing alleged to be a nuisance must and prospective damages. If
be existing at the time that it was alleged temporary or recurrent, each
to be a nuisance. repetition of it gives rise to a new
b. Summary abatement must be resorted cause of action and successive
to within a reasonable time after actions will lie.
knowledge of the nuisance is acquired
or should have been acquired by the b. Defenses to action:
person entitled to abate. 1) Public necessity private interest
c. Person who has the right to abate must must yield to the public good;
give a reasonable notice of his intention creation of nuisance amounts to
to do so, and allow thereafter a taking of property therefore just
reasonable time to enable the other to compensation must be made.
abate the nuisance himself. 2) Estoppel one who voluntarily
d. Means employed must reasonable and places himself in a situation
for any unnecessary damage or force, whereby he suffers an injury will not
the actor will be liable. Right to abate is be heard to say that his damage is
not greater than the necessity of the due to a nuisance maintained by
case and is limited to the removal of another.
CIVIL LAW REVIEWER Chapter IX. NUISANCE
PROPERTY
2) Enjoin the sale or destruction of the
property
3) Action for the proceeds of its sale
and damages if it has been sold
4) Enjoin private parties from
proceeding to abate a supposed
nuisance
CIVIL LAW REVIEWER Chapter X. MODES of ACQUIRING OWNERSHIP
PROPERTY
occupation.
PROPERTY
regulated by special laws.
two consecutive weeks in
o Occupation of a swarm of bees or the way he deems best.
domesticated animals If the movable cannot be
Article 716, Civil Code. The kept without deterioration, or
owner of a swarm of bees shall without expenses which
have a right to pursue them to considerably diminish its
anothers land, indemnifying the value, it shall be sold at
possessor of the latter for the public auction eight days
damage. If the owner has not after the publication.
pursued the swarm, or ceases Six months from the
to do so within two consecutive publication having elapsed
days, the possessor of the land without the owner having
may occupy or retain the same. appeared, the thing found,
The twenty days to be counted or its value, shall be
from their occupation by another awarded to the finder. The
person. This period having finder and the owner shall
expired, they shall pertain to him be obliged, as the case may
who has caught and kept them. be, to reimburse the
expenses.
Article 560, Civil Code. Wild Article 720, CC. If the owner
animals are possessed only should appear in time, he shall
while they are under one's be obliged to pay, as a reward
control; domesticated or tamed to the finder, one-tenth of the
animals are considered sum or of the price of the thing
domestic or tame if they retain found.
the habit of returning to the
premises of the possessor. 2. INTELLECTUAL CREATION
o Pigeons and fish Article 721, Civil Code. By intellectual creation, the
Article 717, Civil Code. following persons acquire ownership:
Pigeons and fish which from 1. The author with regard to his literary, dramatic,
historical, legal, philosophical, scientific or other
their respective breeding places work
pass to another pertaining to a 2. The composer; as to his musical composition;
different owner shall belong to 3. The painter, sculptor, or other artist, with respect
the latter, provided they have to the product of his art;
not been enticed by some 4. The scientist or technologist or any other person
artifice or fraud. with regard to his discovery or invention.
o Hidden treasure Article 722, Civil Code. The author and the
Article 718, Civil Code. He composer, mentioned in Nos. 1 and 2 of the
preceding article, shall have the ownership of their
who by chance discovers creations even before the publication of the same.
hidden treasure in anothers Once their works are published, their rights are
CIVIL LAW REVIEWER Chapter X. MODES of ACQUIRING OWNERSHIP
The painter, sculptor or other artist shall have 2. TRADEMARKS, TRADE NAMES and
dominion over the product of his art even before it is SERVICE MARKS
copyrighted.
Definitions under the Trademark Law
The scientist or technologist has the ownership of his (RA 166):
discovery or invention even before it is patented. o Trademark - any word, name,
symbol, emblem, sign or device or
Article 723, Civil Code. Letters and other private any combination thereof adopted
communications in writing are owned by the person to and used by a manufacturer or
whom they are addressed and delivered, but they merchant to identify his goods and
cannot be published or disseminated without the distinguish them from those
consent of the writer or his heirs. However, the court
manufactured, sold or dealt in by
may authorize their publication or dissemination if the
public good or the interest of justice so requires.
others.
o Trade-name - individual names and
surnames, firm names, trade-
219
Article 724, Civil Code. Special laws govern
PROPERTY
copyright and patent. names, devices or words used by
manufacturers, industrialists,
Dual interest in letters (ART. 723): merchants, agriculturists, and others
o From the viewpoint of the to identify their business, vocations
SENDER/WRITER the intellectual or occupations
property consists in the ideas and o Service mark - mark used in the
thoughts expressed therein. sale or advertising of services to
o From the viewpoint of the identify the services of one person
RECIPIENT the paper or material and distinguish them from the
used where the writing was services of others
impressed or done, pertains in
ownership to the recipient. 3. GEOGRAPHIC INDICATIONS of ORIGIN
False designation of origin is punishable
Intellectual Property Code of 1997 under ART. 189 of RPC
(RA 8293) is the special law which
governs copyright and patent 4. INDUSTRIAL DESIGNS
Any composition of lines and colors or
INTELLECTUAL PROPERTY RIGHTS any 3-dimensional form, w/n associated
with lines and colors
1. COPYRIGHT and RELATED RIGHTS 5. PATENTS
Copyright An exclusive right to invention granted to
o an intangible, incorporeal right a patentee, his heirs or assigns for the
o granted by statute term thereof
o to the author or originator of certain Essential elements of an invention to
literary or artistic productions, be patentable:
o whereby he is invested, for a o Novelty
specific period, o Prior art
30 YRS. renewable for another Requisites:
30 YRS. o There must be an invention
40 YRS for SERIAL publications o Of a new and useful machine,
st
from the publication of the 1 product/substance of possible
volume renewable for 30 YRS. advantage to the public
o with the sole and exclusive privilege o Not previously known or used or
of multiplying copies of the same described in printed publications or
and publishing and selling them. in public use or on sale in the Phils.
Purpose of the law: protect and control or covered by prior patent
the visible thing created and the o Includes new and original industrial
intangible estate arising from the designs
privilege of publishing and selling to o NOT patentable if:
others copies of the thing produced Contrary to public order, morals,
public health or welfare
Kinds Abstract idea/principle/theorem
o Common law copyright
CIVIL LAW REVIEWER Chapter X. MODES of ACQUIRING OWNERSHIP
PROPERTY
prescription:
1. LAW should be interpreted to apply only to o Capacity of the acquirer
situations where ownership is vested o Capacity of the loser to lose by
independently of the other modes prescription
o Object susceptible to prescription
2. DONATION see next chapter o Lapse of required time
Ordinary acquisitive
3. SUCCESSION MORTIS CAUSA - Movable property 4yrs
- Immovable 10yrs
Article 774, Civil Code. Succession is a mode of Extraordinary acquisitive
acquisition by virtue of which the property, rights and - Movable 8yrs
obligations to the extent of the value of the - Immovable 30yrs
inheritance, of a person are transmitted through his
death to another or others either by his will or by Additional requirements for ordinary
operation of law. acquisitive prescription:
o Good faith
Article 776, Civil Code. The inheritance includes all
the property, rights and obligations of a person which o Just title
are not extinguished by his death
5. TRADITION
Article 777, Civil Code. The rights to the succession Requisites:
are transmitted from the moment of the death of the o Pre-existence of right in estate of
decedent. grantor
o Just cause or title for the
Elements of Succession: transmission
o Transmission of property, rights and o Intention
obligations to another o Capacity
o Cause of transmission is the DEATH o Act of giving it outward form,
of the decedent physically, symbolically or legally
o Procedure of transmission is by
WILL or OPERATION of LAW Kinds:
o ACCEPTANCE of the inheritance by o Real tradition PHYSICALY
the heir DELIVERY of the thing; actual
Rights to the succession are vested as transfer of control and possession
of the MOMENT of DEATH of the with intent to pass ownership or real
decedent right over the property
Movable hand to hand transfer
4. (ACQUISITIVE) PRESCRIPTION of the thing
Mode of acquiring ownership through Immovable material acts
the lapse of time in the manner and performed by grantee
under the conditions laid down by law
Possession should be:
o In the concept of an owner
CIVIL LAW REVIEWER Chapter X. MODES of ACQUIRING OWNERSHIP
PROPERTY
of ownership
Traditio constitutum
possessorium owner
remains in possession of the
thing but in another concept
Quasi-tradition delivery of
incorporeal things or rights by
the grantee of his right with the
owners consent
Tradition by operation of law
CIVIL LAW REVIEWER Chapter XI. DONATION
PROPERTY
UNILATERAL obligations on the donors
part Succession.
Requires CONSENT of BOTH donor
and donee though it produces Becomes effective upon the death of
obligations only on the side of the donor
DONOR Donors death ahead of the donee is a
SUSPENSIVE CONDITION for the
existence of the donation
II. Requisites
Characteristics:
CONSENT and CAPACITY of the o Transferor retains ownership and
parties control of the property while alive
ANIMUS DONANDI (intent to donate) o Transfer is revocable at will before
DELIVERY of thing donated his death
FORM as prescribed by law o Transfer will be VOID if the
IMPOVERISHMENT of donors transferor should survive the
patrimony and ENRICHMENT on part of transferee
done
INTER VIVOS v. MORTIS CAUSA
III. Kinds
Inter vivos Mortis causa
A. As to its taking effect Must be in the
form of a will, with
Executed and all the formalities
1. INTER VIVOS accepted with for the validity of
As to
formalities wills
Article 729, Civil Code. When the donor intends formalities
prescribed by CC Otherwise, its
that the donation shall take effect during the lifetime of 748 & 749 void and cannot
the donor, though the property shall not be delivered transfer
till after the donor's death, this shall be a donation ownership.
inter vivos. The fruits of the property from the time of Effective during Effective after the
the acceptance of the donation, shall pertain to the As to
the lifetime of the death of the
donee, unless the donor provides otherwise. effectivity
donor donor
Acceptance must
Article 730, Civil Code. The fixing of an event or the be made after the
imposition of a suspensive condition, which may take death of the
place beyond the natural expectation of life of the donor, the
donor, does not destroy the nature of the act as a donation being
donation inter vivos, unless a contrary intention Acceptance must effective only
appears. As to be made during after the death of
acceptance the lifetime of the donor.
Article 731, Civil Code. When a person donates donor Acceptance
something, subject to the resolutory condition of the during the donors
donor's survival, there is a donation inter vivos. lifetime is
premature and
Take effect independently of the donors ineffective
death because there
CIVIL LAW REVIEWER Chapter XI. DONATION
can be no
contract regarding ORDINARY v. PROPTER NUPTIAS
future inheritance
Ownership is Ordinary Propter nuptias
As to immediately Express
transfer of transferred. Ownership is Necessary Not required
acceptance
ownership Delivery of transferred after
As to Cant be made by May be made by
for right of possession is death
minors minors minors (FC 78)
disposition allowed after
May include
death
As to future Cannot include future property
Irrevocable may
property future property (same rule as
be revoked only Revocable upon
As to wills)
for the reasons the exclusive will
revocation No limit to If present property
provided in CC of the donor Limit as to
donation of is donated and
760, 764, 765 donation of
present property property regime is
When it is present
provided legitimes ACP, limited to
excessive or property
are not impaired 1/5 223
inofficious, being When it is
Grounds
PROPERTY
As to preferred, it is excessive or
for Law on donations FC 86
reduction or reduced only after inofficious, it is
revocation
suppression the donations reduced first, or
mortis causa had even suppressed
been reduced or ______________
exhausted
B. As to cause or consideration
NATURE of the act, whether its one of disposition or
of execution, is CONTROLLING to determine whether 1. SIMPLE made out of PURE LIBERALITY
the donation is mortis causa or inter vivos. or because of the MERITS of the done
2. REMUNERATORY made for SERVICES
What is important is the TIME of TRANSFER of already rendered to the donor
ownership even if transfer of property donated may be 3. ONEROUS imposes a BURDEN inferior in
subject to a condition or a term.
value to property donated
a. Improper burden EQUAL in value to
Whether the donation is inter vivos or mortis causa
depends on whether the donor intended to transfer
property donated
ownership over the properties upon the execution of b. Sub-modo or modal imposes a
the deed. (Gestopa v. CA; Austria-Magat v. CA) prestation upon donee as to how
property donated will be applied
3. PROPTER NUPTIAS c. Mixed donations ex: sale for price
lower than value of property
Article 82, Family Code. W hen the donor intends
that the donation shall take effect during the lifetime of A simple or pure donation is one whose cause is pure
the donor, though the property shall not be delivered liberality, while an onerous donation is one subject to
till after the donor's death, this shall be a donation burdens, charges, or future services equal to or more
inter vivos. The fruits of the property from the time of in value than the thing donated. (Lagazo v. CA)
the acceptance of the donation, shall pertain to the
donee, unless the donor provides otherwise. C. As to effectivity or extinguishment
Article 87, Family Code. Every donation or grant of 1. PURE donation is without conditions or
gratuitous advantage, direct or indirect, between the
periods
spouses during the marriage shall be void, except
moderate gifts which the spouses may give each
2. CONDITIONAL donation is subject to
other on the occasion of any family rejoicing. The suspensive or resolutory conditions
prohibition shall also apply to persons living together 3. WITH A TERM
as husband and wife without a valid marriage.
IV. Who May Give or Receive Donations
Requisites
o Must be made BEFORE the Article 735, Civil Code. All persons who may
celebration of marriage contract and dispose of their property may make a
o Made in CONSIDERATION of the donation.
marriage
o Made in FAVOR of ONE or BOTH of Article 737, Civil Code. The donor's capacity shall be
the future spouses determined as of the time of the making of the
donation.
CIVIL LAW REVIEWER Chapter XI. DONATION
Article 738, Civil Code. All those who are not sister, or spouse, shall be valid;
specially disqualified by law therefor may accept 4. Any attesting witness to the execution of a will,
donations. the spouse, parents, or children, or any one
claiming under such witness, spouse, parents, or
Article 741, Civil Code. Minors and others who children;
cannot enter into a contract may become donees but 5. Any physician, surgeon, nurse, health officer or
acceptance shall be done through their parents or druggist who took care of the testator during his
legal representatives. last illness;
6. Individuals, associations and corporations not
Article 737, Civil Code. Donations made to permitted by law to inherit.
conceived and unborn children may be accepted by
those persons who would legally represent them if Article 1032, Civil Code. The following are incapable
they were already born. of succeeding by reason of unworthiness:
1. Parents who have abandoned their children or
Capacity to donate is required for donations induced their daughters to lead a corrupt or
inter vivos and NOT mortis causa immoral life, or attempted against their virtue;
o Donors capacity determined as of the
2. Any person who has been convicted of an 224
attempt against the life of the testator, his or her
TIME of the DONATION. Subsequent
PROPERTY
spouse, descendants, or ascendants;
incapacity is immaterial 3. Any person who has accused the testator of a
Capacity to accept donations ALL persons crime for which the law prescribes imprisonment
NOT disqualified by law may be donees for six years or more, if the accusation has been
found groundless;
4. Any heir of full age who, having knowledge of the
violent death of the testator, should fail to report it
V. Who May Not Give or Receive to an officer of the law within a month, unless the
Donations authorities have already taken action; this
prohibition shall not apply to cases wherein,
Article 736, Civil Code. All persons who may according to law, there is no obligation to make
contract and dispose of their property may make a an accusation;
donation.
Article 740, Civil Code. Incapacity to succeed by will
Article 739, Civil Code. The following donations shall shall be applicable to donations inter vivos.
be void:
1. Those made between persons who were guilty of Article 743, Civil Code. Donations made to
adultery or concubinage at the time of the incapacitated persons shall be void, though simulated
donation; under the guise of another contract or through a
2. Those made between persons found guilty of the person who is interposed.
same criminal offense, in consideration thereof;
3. Those made to a public officer or his wife, Article 744, Civil Code. Donations of the same thing
descedants and ascendants, by reason of his to two or more different donees shall be governed by
office.In the case referred to in No. 1, the action the provisions concerning the sale of the same thing
for declaration of nullity may be brought by the to two or more different persons.
spouse of the donor or donee; and the guilt of the
donor and donee may be proved by A. By reason of public policy (ART. 739)
preponderance of evidence in the same action. 1. Those made between persons guilty of
adultery or concubinage at the time of
Article 1027, Civil Code. The following are incapable donation
of succeeding: 2. Those made between persons guilty of the
1. The priest who heard the confession of the same criminal offense if the donation is
testator during his last illness, or the minister of
the gospel who extended spiritual aid to him
made in consideration thereof
during the same period; 3. Those made to a public officer, his spouse,
2. The relatives of such priest or minister of the descendants, and/or ascendants by reason
gospel within the fourth degree, the church, of the office
order, chapter, community, organization, or
institution to which such priest or minister may B. By reason of donees unworthiness
belong; (ART. 1032 and 1027 [except (4)])
3. A guardian with respect to testamentary C. By reason of prejudice to creditors or
dispositions given by a ward in his favor before heirs (voidable)
the final accounts of the guardianship have been
approved, even if the testator should die after the
approval thereof; nevertheless, any provision
made by the ward in favor of the guardian when
the latter is his ascendant, descendant, brother,
CIVIL LAW REVIEWER Chapter XI. DONATION
VI. Acceptance
B. REAL PROPERTY
Donation is perfected upon the
DONORS LEARNING of the Article 749, Civil Code. In order that the donation of
acceptance an immovable may be valid, it must be made in a
Acceptance may be made during the public document, specifying therein the property
LIFETIME of BOTH donor and donee donated and the value of the charges which the
donee must satisfy.
A. WHO MAY ACCEPT
The acceptance may be made in the same deed of
Article 745, Civil Code. The donee must accept the donation or in a separate public document, but it shall
donation personally, or through an authorized person not take effect unless it is done during the lifetime of
with a special power for the purpose, or with a general the donor.
and sufficient power; otherwise, the donation shall be
void. If the acceptance is made in a separate instrument,
the donor shall be notified thereof in an authentic
Article 747, Civil Code. Persons who accept form, and this step shall be noted in both instruments. 225
donations in representation of others who may not do
PROPERTY
so by themselves, shall be obliged to make the Must be in PUBLIC INSTRUMENT
notification and notation of which Article 749 speaks. specifying donated property and
burdens assumed by the donee
Acceptance or consent must be regardless of value
PERSONAL or through a person Acceptance must be EITHER:
AUTHORIZED generally or specifically o In the SAME INSTRUMENT OR
o In ANOTHER PUBLIC
B. TIME of ACCEPTANCE INSTRUMENT notified to the donor
in authentic form and noted in both
Article 746, Civil Code. Acceptance must be made deeds
during the lifetime of the donor and of the donee.
Title to immovable property does not pass from donor
The donation is perfected only upon the moment to donee by virtue of a deed of donation until and
the donor knows of the donees acceptance. If the unless it has been accepted in a public instrument
acceptance is made in a separate instrument, the and the donor duly notified thereof. Where the deed
donor shall be notified thereof in an authentic form, fails to show the acceptance, or where the formal
and this step shall be noted in both instruments. notice of the acceptance made in a separate
(Lagazo v CA) instrument is not given to the donor or else not noted
in the deed of donation and in the separate
acceptance, the donation is null and void. (Sumipat v
Banga)
VII. Form
Exceptions:
A. PERSONAL PROPERTY o Donations propter nuptias need
NO express acceptance
Article 748 , The donation of a movable may be o Onerous donations form governed
made orally or in writing. by the rules of contracts
An oral donation requires the simultaneous delivery of
the thing or of the document representing the right VIII. What May Be Donated
donated.
A. ALL PRESENT PROPERTY or PART
If the value of the personal property donated exceeds
THEREOF of THE DONOR
five thousand pesos, the donation and the acceptance
shall be made in writing, otherwise, the donation shall
be void. 1. Provided he RESERVES, in full ownership
or usufruct, sufficient means for support of
WITH simultaneous delivery of donated himself and all relatives entitled to be
property may be oral UNLESS it supported by donor at the time of
exceeds P5k in which case its VOID if acceptance
NOT in writing
Article 750, Civil Code. The donations may
WITHOUT simultaneous delivery must
comprehend all the present property of the donor, or
be in WRITING including the part thereof, provided he reserves, in full ownership or
ACCEPTANCE regardless of value in usufruct, sufficient means for the support of himself,
CIVIL LAW REVIEWER Chapter XI. DONATION
and of all relatives who, at the time of the acceptance Donations of future property shall be governed by the
of the donation, are by law entitled to be supported by provisions on testamentary succession and the
the donor. Without such reservation, the donation formalities of wills.
shall be reduced in petition of any person affected.
CC Article 130. The future spouses may give each
2. Provided that NO PERSON may give or other in their marriage settlements as much as one-
receive by way of donation, more than he fifth of their present property, and with respect to their
may give or receive by will (ART. 752); also, future property, only in the event of death, to the
reserves property sufficient to pay donors extent laid down by the provisions of this Code
referring to testamentary succession.
debts contracted before donation, otherwise,
donation is in FRAUD of creditors (ARTS.
759, 1387) b. Donation propter nuptias by an
ascendant consisting of jewelry,
Article 752, Civil Code. The provisions of Article 750 furniture or clothing not to exceed 1/10
notwithstanding, no person may give or receive, by of disposable portion
way of donation, more than he may give or receive by 226
will. Article 1070, Civil Code. Wedding gifts by parents
PROPERTY
and ascendants consisting of jewelry, clothing, and
The donation shall be inofficious in all that it may outfit, shall not be reduced as inofficious except
exceed this limitation. insofar as they may exceed one-tenth of the sum
which is disposable by will.
Article 759, Civil Code. There being no stipulation
regarding the payment of debts, the donee shall be B. WHAT MAY NOT BE DONATED
responsible therefor only when the donation has been FUTURE PROPERTY
made in fraud of creditors
. Article 751, Civil Code. Donations cannot
The donation is always presumed to be in fraud of comprehend future property.
creditors, when at the time thereof the donor did not
reserve sufficient property to pay his debts prior to the By future property is understood anything which the
donation. donor cannot dispose of at the time of the donation.
Article 1387, Civil Code. All contracts by virtue of Includes ALL property that belongs to
which the debtor alienates property by gratuitous title
others at the time the donation is made
are presumed to have been entered into in fraud of
creditors, when the donor did not reserve sufficient although it may or may not later belong
property to pay all debts contracted before the to the donor
donation.
IX. Effect
Alienations by onerous title are also presumed
fraudulent when made by persons against whom
some judgment has been issued. The decision or A. IN GENERAL
attachment need not refer to the property alienated,
and need not have been obtained by the party 1. Donee may demand actual delivery of thing
seeking the rescission. donated
2. Donee is SUBROGATED to rights of donor
In addition to these presumptions, the design to in the property donated
defraud creditors may be proved in any other manner
recognized by the law of evidence.
Article 754, Civil Code. The donee is subrogated to
all the rights and actions which in case of eviction
3. If donation EXCEEDS the disposable or free would pertain to the donor. The latter, on the other
portion of his estate, donation is inofficious hand, is not obliged to warrant the things donated,
4. EXCEPTIONS save when the donation is onerous, in which case the
a. Donations provided for in marriage donor shall be liable for eviction to the concurrence of
settlements between future spouses the burden.
not more than 1/5 of present property
The donor shall also be liable for eviction or hidden
defects in case of bad faith on his part.
FC Article 84. If the future spouses agree upon a
regime other than the absolute community of
property, they cannot donate to each other in their 3. Donor NOT obliged to warrant things
marriage settlements more than one-fifth of their donated EXCEPT in onerous donations in
present property. Any excess shall be considered which case donor is liable for eviction up to
void. extent of burden (ART. 754)
CIVIL LAW REVIEWER Chapter XI. DONATION
4. Donor is liable for EVICTION or HIDDEN third person in violation of what is provided in the
DEFECTS in case of BF on his part (ART. preceding paragraph shall be void, but shall not nullify
754) the donation.
5. In donation propter nuptias, donor must
RELEASE property donated from mortgages 4. Payment of donors debt
and other encumbrances UNLESS the
contrary has been stipulated Article 758, Civil Code. When the donation imposes
upon the donee the obligation to pay the debts of the
donor, if the clause does not contain any declaration
Article 131, Civil Code. The donor by reason of
to the contrary, the former is understood to be liable
marriage shall release the property donated from
to pay only the debts which appear to have been
mortgages and all other encumbrances upon the
previously contracted. In no case shall the donee be
same, with the exception of easements, unless in the
responsible for the debts exceeding the value of the
marriage settlements or in the contracts the contrary
property donated, unless a contrary intention clearly
has been stipulated.
appears.
If expressly stipulated donee to pay
6. Donations to several donees jointly NO
only debts contracted BEFORE the
227
right of accretion EXCEPT:
donation UNLESS specified otherwise.
PROPERTY
a. Donor provides otherwise
But in no case shall donee be
b. Donation to husband and wife jointly
responsible for debts exceeding value of
with right of accretion UNLESS donor
property donated unless clearly intended
provides otherwise
If theres NO stipulation donee
Article 753, Civil Code. When a donation is made to answerable only for donors debt ONLY
several persons jointly, it is understood to be in equal in case donation is in fraud of creditors
shares, and there shall be no right of accretion among
them, unless the donor has otherwise provided. 5. Illegal or impossible conditions
The preceding paragraph shall not be applicable to Article 272, Civil Code. Children who are legitimated
donations made to the husband and wife jointly, by subsequent marriage shall enjoy the same rights
between whom there shall be a right of accretion, if as legitimate children.
the contrary has not been provided by the donor.
Article 1183, Civil Code. Impossible conditions,
B. SPECIAL PROVISIONS those contrary to good customs or public policy and
those prohibited by law shall annul the obligation
1. Reservation by donor of power to dispose which depends upon them. If the obligation is
divisible, that part thereof which is not affected by the
(in whole or in part) or to encumber property
impossible or unlawful condition shall be valid.
donated The condition not to do an impossible thing shall be
considered as not having been agreed upon.
Article 755, Civil Code. The right to dispose of some
of the things donated, or of some amount which shall
be a charge thereon, may be reserved by the donor; X. Revocation and Reduction
but if he should die without having made use of this
right, the property or amount reserved shall belong to A. DISTINCTIONS
the donee.
Revocation Reduction
2. Donation of naked ownership to one donee Total, whether the Made insofar as the
and usufruct to another legitime is impaired or not legitime is prejudiced
Benefits the donors heirs
Article 756, Civil Code. The ownership of property (except when made on
may also be donated to one person and the usufruct Benefits the donor
the ground of the
to another or others, provided all the donees are living appearance of a child)
at the time of the donation.
B. CAUSES of REVOCATION OR
3. Conventional reversion in favor of donor or REDUCTION
other person
1. Inofficiousness
Article 757, Civil Code. Reversion may be validly
established in favor of only the donor for any case
Article 752, Civil Code. The provisions of Article 750
and circumstances, but not in favor of other persons
notwithstanding, no person may give or receive, by
unless they are all living at the time of the donation.
way of donation, more than he may give or receive by
will.
Any reversion stipulated by the donor in favor of a
CIVIL LAW REVIEWER Chapter XI. DONATION
The donation shall be inofficious in all that it may birth, adoption or reappearance of
exceed this limitation. the child
o Donee must return the property or
Article 771, Civil Code. Donations which in its value at the time of the donation
accordance with the provisions of Article 752, are
inofficious, bearing in mind the estimated net value of
o Fruits to be returned from the filing
the donor's property at the time of his death, shall be of the action
reduced with regard to the excess; but this reduction o Mortgages by the donee are valid
shall not prevent the donations from taking effect but may be discharged subject to
during the life of the donor, nor shall it bar the donee reimbursement from the donee
from appropriating the fruits.
Extent of revocation only to the
For the reduction of donations the provisions of this extent of the presumptive legitime of the
Chapter and of Articles 911 and 912 of this Code shall
child
govern.
Prescription 4yrs
Article 773, Civil Code. If, there being two or more 228
donations, the disposable portion is not sufficient to C. REVOCATION ONLY
PROPERTY
cover all of them, those of the more recent date shall
be suppressed or reduced with regard to the excess. 1. Ingratitude
Neither can this action be brought against the heir of When the property cannot be returned, it shall be
the donee, unless upon the latter's death the estimated at what it was worth at the time of the
complaint has been filed. donation.
Effect of revocation on alienations and Article 764, par. 2, Civil Code. In this case, the
property donated shall be returned to the donor, the
encumbrances
alienations made by the donee and the mortgages
imposed thereon by him being void, with the
Article 766, Civil Code. Although the donation is limitations established, with regard to third persons,
revoked on account of ingratitude, nevertheless, the by the Mortgage Law and the Land Registration Laws.
alienations and mortgages effected before the
notation of the complaint for revocation in the Registry Article 767, Civil Code. In the case referred to in the
of Property shall subsist. first paragraph of the preceding article, the donor shall
have a right to demand from the donee the value of
Later ones shall be void. property alienated which he cannot recover from third
persons, or the sum for which the same has been
Article 767, , Civil Code.In the case referred to in the
first paragraph of the preceding article, the donor shall
mortgaged. 229
have a right to demand from the donee the value of
PROPERTY
property alienated which he cannot recover from third
persons, or the sum for which the same has been
Effect as to fruits
mortgaged.
Article 768, Civil Code. When the donation is
The value of said property shall be fixed as of the time revoked for any of the causes stated in Article 760, or
of the donation. by reason of ingratitude, or when it is reduced
because it is inofficious, the donee shall not return the
fruits except from the filing of the complaint.
2. Violation of condition If the revocation is based upon noncompliance with
any of the conditions imposed in the donation, the
donee shall return not only the property but also the
D. Effect of revocation or reduction fruits thereof which he may have received after having
failed to fulfill the condition.
Article 762, Civil Code. Upon the revocation or
reduction of the donation by the birth, appearance or
adoption of a child, the property affected shall be
returned or its value if the donee has sold the same.
SUMMARY
Limitation:
1) He reserves in full ownership or
in usufruct, sufficient means for
his support and all relatives who
are at the time of the acceptance
of the donation are, by law,
entitled to be supported
PROPERTY
offense, in consideration thereof
(Article 739)
Who are allowed to accept Who are not allowed:
donations: Those who are not 1) Made between person who are
specifically disqualified by law guilty of adultery and
(Article 738) concubinage (Article 739)
2) Made between persons found
Those who are allowed, with guilty of the same criminal
qualifications: offense, in consideration thereof
1) Minors and others who are (Article 739)
incapacitated (see Article 38), 3) Made to a public officer or his
Donee
provided that their acceptance is wife, descendant and
done through their parents or ascendants, by reason of his
legal representatives (Article office (Article 739)
741) 4) Those who cannot succeed by
2) Conceived and unborn children, will (Article 740)
provided that the donation is 5) Those made to incapacitated
accepted by those who would persons, although simulated
legally represent them if they under the guise of another
were already born contract (Article 743)
Who may accept (Article 745):
1) Donee personally
When to accept: during the lifetime of
Acceptance of the donation 2) Authorized person with a special
the donor or donee (Article 746)
power for the purpose or with a
general sufficient power
He shall be subrogated to all the
What the donee acquires with the rights and actions that would pertain
thing to the donor in case of eviction
(Article 754)
Exception: when the donation is
Obligation of the donor No obligation to warrant (Article 754)
onerous
If the donation so states, the donee
may be obliged to pay the debts
previously contracted by the donor
Exception: when contrary intention
Obligation of the donee and in no case shall he be
appears
responsible for the debts exceeding
the value of the thing donated (Article
758)
Right to dispose of some of the If the donor dies without exercising
What may be reserved by the
things donated, or of dome amount this right, the portion reserved shall
donor
which shall be a charge thereon belong to the donee
The property donated may be
Limitation to (2): the third person
restored or returned to
Reversion whoul be living at the time of the
1) Donor or his estate; or
donation
2) Another person
CIVIL LAW REVIEWER Chapter XI. DONATION
REVOCATION/REDUCTION
PROPERTY
fact donor/ donee complaint returned
revocation in the
registry of property
subsist
Failure to reserve At any time, by the Reduced to the
sufficient means for donor or relatives Not transmissible extent necessary to Donee entitled
support entitled o support provide support
Donation takes
Inofficiousness for effect on the lifetime
Within 5 years from
being in excess of Transmitted to of donor. Reduction
the death of the Donee entitled
what the donor can donors heirs only upon his death
donor
give by will with regard to the
excess
Rescission within 4
Returned for the Fruits returned/ if
years from the Transmitted to
Fraud against benefit of the impossible,
perfection of creditors heirs or
creditors creditor who brought indemnify creditor
donation/ knowledge successors-in-interest
the action for damages
of the donation
CIVIL LAW REVIEWER Chapter XII. LEASE
PROPERTY
USUFRUCT, COMMODATUM
PROPERTY
has not been fixed, it is understood to be from year to direct action against the lessor to require
year, if the rent agreed upon is annual; from month to compliance with his or the lessees
month, if it is monthly; from week to week, if the rent obligations or vice versa
is weekly; and from day to day, if the rent is to be paid Sublessee is NOT a party to the contract
daily. However, even though a monthly rent is paid, between the lessor and lessee
and no period for the lease has been set, the courts
Obligation of sublessee to lessor
may fix a longer term for the lease after the lessee
has occupied the premises for over one year. If the
rent is weekly, the courts may likewise determine a Article 1651, Civil Code. Without prejudice to his
longer period after the lessee has been in possession obligation toward the sublessor, the sublessee is
for over six months. In case of daily rent, the courts bound to the lessor for all acts which refer to the use
may also fix a longer period after the lessee has and preservation of the thing leased in the manner
stayed in the place for over one month. stipulated between the lessor and the lessee.
Article 1649, Civil Code. The lessee cannot assign Article 1652, Civil Code. The sublessee is
the lease without the consent of the lessor, unless subsidiarily liable to the lessor for any rent due from
there is a stipulation to the contrary. 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
General Rule: lessee CANNOT assign the time of the extrajudicial demand by the lessor.
lease WITHOUT the CONSENT of the
lessor Payments of rent in advance by the sublessee shall
UNLESS theres a stipulation to the be deemed not to have been made, so far as the
contrary lessor's claim is concerned, unless said payments
ASSIGNMENT v. SUBLEASE were effected in virtue of the custom of the place.
Article 1661, Civil Code. The lessor cannot alter the Article 1667, Civil Code. The lessee is responsible
form of the thing leased in such a way as to impair the for the deterioration or loss of the thing leased, unless
use to which the thing is devoted under the terms of he proves that it took place without his fault. This
the lease. burden of proof on the lessee does not apply when
the destruction is due to earthquake, flood, storm or
2. Obligations of LESSEE other natural calamity.
PROPERTY
for the use to which it has
become necessary to make some urgent repairs upon absence of stipulation
been devoted, unless
the thing leased, which cannot be deferred until the according to the nature of
there is a stipulation to
termination of the lease, the lessee is obliged to the thing leased and
the contrary
tolerate the work, although it may be very annoying to custom of the place.
him, and although during the same, he may be Maintain the lessee in the
deprived of a part of the premises. peaceful and adequate
Pay for the expenses for
enjoyment of the lease
the deed of lease.
If the repairs last more than forty days the rent shall for the entire duration of
be reduced in proportion to the time - including the the contract.
first forty days - and the part of the property of which
the lessee has been deprived. 3. Right of LESSEE to suspend payment of
rentals
When the work is of such a nature that the portion
which the lessee and his family need for their dwelling
Article 1658, Civil Code. The lessee may suspend
becomes uninhabitable, he may rescind the contract if
the payment of the rent in case the lessor fails to
the main purpose of the lease is to provide a dwelling
make the necessary repairs or to maintain the lessee
place for the lessee.
in peaceful and adequate enjoyment of the property
leased.
Article 1663, Civil Code. The lessee is obliged to
bring to the knowledge of the proprietor, within the
shortest possible time, every usurpation or untoward 4. Right to ask for RESCISSION
act which any third person may have committed or
may be openly preparing to carry out upon the thing Article 1659, Civil Code. If the lessor or the lessee
leased. should not comply with the obligations set forth in
Articles 1654 and 1657, the aggrieved party may ask
He is also obliged to advise the owner, with the same for the rescission of the contract and indemnification
urgency, of the need of all repairs included in No. 2 of for damages, or only the latter, allowing the contract
Article 1654. to remain in force.
In both cases the lessee shall be liable for the Article 1660, Civil Code. If a dwelling place or any
damages which, through his negligence, may be other building intended for human habitation is in such
suffered by the proprietor. a condition that its use brings imminent and serious
danger to life or health, the lessee may terminate the
If the lessor fails to make urgent repairs, the lessee, in lease at once by notifying the lessor, even if at the
order to avoid an imminent danger, may order the time the contract was perfected the former knew of
repairs at the lessor's cost. the dangerous condition or waived the right to rescind
the lease on account of this condition.
Article 1665, Civil Code. The lessee shall return the
thing leased, upon the termination of the lease, as he 5. LESSOR not obliged to answer for mere
received it, save what has been lost or impaired by rd
act of trespass by a 3 person
the lapse of time, or by ordinary wear and tear, or
from an inevitable cause. Article 1664, Civil Code. The lessor is not obliged to
answer for a mere act of trespass which a third
Article 1668, Civil Code. The lessee is liable for any
person may cause on the use of the thing leased; but
deterioration caused by members of his household
the lessee shall have a direct action against the
and by guests and visitors.
intruder.
CIVIL LAW REVIEWER Chapter XII. LEASE
PROPERTY
The ejectment of tenants of agricultural lands is land which is under a lease that is not recorded in the
governed by special laws Registry of Property may terminate the lease, save
when there is a stipulation to the contrary in the
I. RIGHT to ASK for PRELIMINARY contract of sale, or when the purchaser knows of the
MANDATORY INJUNCTION in existence of the lease.
UNLAWFUL DETAINER CASES If the buyer makes use of this right, the lessee may
demand that he be allowed to gather the fruits of the
Article 1674, Civil Code. In ejectment cases where harvest which corresponds to the current agricultural
an appeal is taken the remedy granted in Article 539, year and that the vendor indemnify him for damages
second paragraph, shall also apply, if the higher court suffered.
is satisfied that the lessee's appeal is frivolous or
dilatory, or that the lessor's appeal is prima facie If the sale is fictitious, for the purpose of extinguishing
meritorious. The period of ten days referred to in said the lease, the supposed vendee cannot make use of
article shall be counted from the time the appeal is the right granted in the first paragraph of this article.
perfected. The sale is presumed to be fictitious if at the time the
supposed vendee demands the termination of the
Article 539 (2), Civil Code. A possessor deprived of lease, the sale is not recorded in the Registry of
his possession through forcible entry may within ten Property.
days from the filing of the complaint present a motion
to secure from the competent court, in the action for Article 1677, Civil Code. The purchaser in a sale
forcible entry, a writ of preliminary mandatory with the right of redemption cannot make use of the
injunction to restore him in his possession. The court power to eject the lessee until the end of the period
shall decide the motion within thirty (30) days from the for the redemption.
filing thereof.
L. USEFUL IMPROVEMENTS in GF MADE
J. IMPLIED EXTENSION of LEASE by LESSEE
Article 1679, Civil Code. If nothing has been Article 1678, Civil Code. If the lessee makes, in
stipulated concerning the place and the time for the good faith, useful improvements which are suitable to
payment of the lease, the provisions or Article 1251 the use for which the lease is intended, without
shall be observed as regards the place; and with altering the form or substance of the property leased,
respect to the time, the custom of the place shall be the lessor upon the termination of the lease shall pay
followed. the lessee one-half of the value of the improvements
at that time. Should the lessor refuse to reimburse
Article 1682, Civil Code. The lease of a piece of said amount, the lessee may remove the
rural land, when its duration has not been fixed, is improvements, even though the principal thing may
understood to have been for all the time necessary for suffer damage thereby. He shall not, however, cause
the gathering of the fruits which the whole estate any more impairment upon the property leased than is
leased may yield in one year, or which it may yield necessary.
once, although two or more years have to elapse for
the purpose. With regard to ornamental expenses, the lessee shall
Article 1687, Civil Code. If the period for the lease not be entitled to any reimbursement, but he may
has not been fixed, it is understood to be from year to remove the ornamental objects, provided no damage
year, if the rent agreed upon is annual; from month to is caused to the principal thing, and the lessor does
month, if it is monthly; from week to week, if the rent not choose to retain them by paying their value at the
is weekly; and from day to day, if the rent is to be paid time the lease is extinguished.
CIVIL LAW REVIEWER Chapter XII. LEASE
Article 1680, Civil Code. The lessee shall have no Article 1686, Civil Code. In default of a special
right to a reduction of the rent on account of the stipulation, the custom of the place shall be observed
sterility of the land leased, or by reason of the loss of with regard to the kind of repairs on urban property for
fruits due to ordinary fortuitous events; but he shall which the lessor shall be liable. In case of doubt it is
have such right in case of the loss of more than one- understood that the repairs are chargeable against
half of the fruits through extraordinary and unforeseen him.
fortuitous events, save always when there is a
specific stipulation to the contrary. Article 1687, Civil Code. If the period for the lease
has not been fixed, it is understood to be from year to
Extraordinary fortuitous events are understood to be: year, if the rent agreed upon is annual; from month to
fire, war, pestilence, unusual flood, locusts, month, if it is monthly; from week to week, if the rent
earthquake, or others which are uncommon, and is weekly; and from day to day, if the rent is to be paid
which the contracting parties could not have daily. However, even though a monthly rent is paid, 236
reasonably foreseen. and no period for the lease has been set, the courts
PROPERTY
may fix a longer term for the lease after the lessee
Article 1681, Civil Code. Neither does the lessee has occupied the premises for over one year. If the
have any right to a reduction of the rent if the fruits rent is weekly, the courts may likewise determine a
are lost after they have been separated from their longer period after the lessee has been in possession
stalk, root or trunk. for over six months. In case of daily rent, the courts
may also fix a longer period after the lessee has
Article 1682, Civil Code. The lease of a piece of stayed in the place for over one month.
rural land, when its duration has not been fixed, is
understood to have been for all the time necessary for Article 1688, Civil Code. When the lessor of a
the gathering of the fruits which the whole estate house, or part thereof, used as a dwelling for a family,
leased may yield in one year, or which it may yield or when the lessor of a store, or industrial
once, although two or more years have to elapse for establishment, also leases the furniture, the lease of
the purpose. the latter shall be deemed to be for the duration of the
lease of the premises.
Article 1683, Civil Code. The outgoing lessee shall
allow the incoming lessee or the lessor the use of the
premises and other means necessary for the
preparatory labor for the following year; and,
reciprocally, the incoming lessee or the lessor is
under obligation to permit the outgoing lessee to do
whatever may be necessary for the gathering or
harvesting and utilization of the fruits, all in
accordance with the custom of the place.
- end of Property-
CIVIL LAW REVIEWER TABLE of CONTENTS
F. RECORDING
It is the process whereby Register of Deeds
writes information in his Registry Book. This
does not guarantee the title
CIVIL LAW REVIEWER Chapter 1: BACKGROUND, BASIC CONCEPTS and GENERAL PRINCIPLES
rd
This 3 Chapter will first give you everything you need
Registration does not vest or give title to the
to know about original land registration: a summary of land, but merely confirms and thereafter
pertinent laws, steps in original registration protects the title already possessed by the
proceedings, among others. owner, making it imprescriptible by
occupation of third parties. It does not give
The chapter discusses FIVE MAJOR LESSONS: the owner any better title than he has.
(Asked in 98)
I. Laws Governing Land Registration Vagalidad vs. Vagalidad, (2006):
II.Effect of Registration
Registration is not a mode of acquiring
III.
Original Registration Proceedings
IV.Attributes of and Limitations on ownership. A certificate of title cannot be
Certificates of Title and used to protect a usurper from the true
Registration owner or as a shield for the commission of
V. Judicial Confirmation of Imperfect fraud.
or Incomplete Titles Camitan and Lopez vs. Fidelity Investment
Corp.: (2008,Nachura):Possession of an
I. Laws Governing Land Registration owners duplicate copy of a certificate of 242
title is not necessarily equivalent to
Republic vs. CA and Naguit, (2005): If in the alienable lands of the public domain except by lease,
public domain, the land must be classified for a period not exceeding twenty-five years,
as alienable and disposable. It must be renewable for not more than twenty-five years, and
classified as such at the time of filing the not to exceed one thousand hectares in area. xxx
application for registration.
Private lands may be owned for as long as
2. Non- registrable lands: (Asked in 07) the corporation is at least 60% Filipino. :
1987, CONSTITUTION
Art. XII 1987, CONSTITUTION
Sec. 2 Art. XII
All lands of the public domain, waters, minerals, coal, Sec. 2
petroleum, and other mineral oils, all forces of potential xxx The State may directly undertake such activities,
energy, fisheries, forests or timber, wildlife, flora and fauna, or it may enter into co-production, joint venture, or
and other natural resources are owned by the State. xxx production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per
Civil Code centum of whose capital is owned by such citizens.
Art. 420 Such agreements may be for a period not exceeding
The following things are property of public dominion: twenty-five years, and under such terms and
1. Those intended for public use, such as roads, conditions as may be provided by law. xxx
canals, rivers, torrents, ports and bridges constructed 243
by the State, banks, shores, roadsteads, and others Additional Requirements: (OCEN-PAAL)
PD 1529 H. HEARING
Sec. 23 Opposition to application in ordinary Proof of Ownership:
proceedings. Any person claiming an interest,
1. Municipality of Santiago vs. CA, (1983):
whether named in the notice or not, may appear and
file an opposition on or before the date of initial Tax declaration and receipts are not
hearing, or within such further time as may be allowed conclusive but have strong probative value
by the court. The opposition shall state all the when accompanied by proof of actual
objections to the application and shall set forth the possession.
interest claimed by the party filing the same and apply 2. Republic vs. Tayag, (1984): Payment in
for the remedy desired, and shall be signed and one lump sum to cover all past taxes is
sworn to by him or by some other duly authorized irregular and affects the validity of the
person. applicants claim of ownership
If the opposition or the adverse claim of any person
3. Spanish titles are no longer admissible.
covers only a portion of the lot and said portion is not
properly delimited on the plan attached to the
application, or in case of undivided co-ownership, I. JUDGMENT
conflicting claims of ownership or possession, or
overlapping of boundaries, the court may require the PD 1529
parties to submit a subdivision plan duly approved by Sec 30. When judgment becomes final; duty to cause
the Director of Lands. issuance of decree. The judgment rendered in a land
registration proceedings becomes final upon the
PD 1529 expiration of thirty days to be counted from the data of
Sec 26. Order of default; effect. If no person appears receipt of notice of the judgment. An appeal may be
and answers within the time allowed, the court shall, taken from the judgment of the court as in ordinary
civil cases.
CIVIL LAW REVIEWER Chapter 3: ORIGINAL REGISTRATION
Second. Unpaid real estate taxes levied and or an equivalent phrase occurs in this Decree, it shall
assessed within two years immediately preceding the be deemed to include an innocent lessee, mortgagee,
acquisition of any right over the land by an innocent or other encumbrancer for value.
purchaser for value, without prejudice to the right of
the government to collect taxes payable before that Upon the expiration of said period of one year, the
period from the delinquent taxpayer alone. decree of registration and the certificate of title issued
shall become incontrovertible. Any person aggrieved
Third. Any public highway or private way established by such decree of registration in any case may pursue
or recognized by law, or any government irrigation his remedy by action for damages against the
canal or lateral thereof, if the certificate of title does applicant or any other persons responsible for the
not state that the boundaries of such highway or fraud.
irrigation canal or lateral thereof have been
determined. Ground for reopening and reviewing the
decree of registration: actual fraud (Asked
Fourth. Any disposition of the property or limitation on
in 92)
the use thereof by virtue of, or pursuant to,
Presidential Decree No. 27 or any other law or Periods:
regulations on agrarian reform. Must be reopened not later than 1 yr
from and after the date of the entry of
A. FREE FROM LIENS AND such decree. (Asked in 90 and 03)
ENCUMBRANCES Upon the expiration of said period of 248
one year, the decree of registration and
C. PRIVATE CORPORATIONS
NOTE:
MAXIMUM LAND THAT CAN BE APPLIED
FOR: 144 hectares 250
In case of foreigner, it sufficient that he is
enter, in the order of their reception, all instruments unwarranted and confers no right on the
including copies of writs and processes filed with him purchaser
relating to registered land. RA 456 prohibits registration of documents
affecting real property which is delinquent in
He shall, as a preliminary process in registration, note
the payment of real estate taxes. Further, if
in such book the date, hour and minute of reception of
all instruments, in the order in which they were evidence of such payment is not presented
received. They shall be regarded as registered from with 15 days form the date of entry of said
the time so noted, and the memorandum of each document in the primary entry book of the
instrument, when made on the certificate of title to register of deeds the entry shall be deemed
which it refers, shall bear the same date: cancelled.
Pay fees and DST (government is exempt)
Provided, that the national government as well as the The instruments are regarded as registered
provincial and city governments shall be exempt from from the time ROD enters them in his book.
the payment of such fees in advance in order to be
entitled to entry and registration.
Every deed or other instrument, whether voluntary or V. Registration of Deeds of Sale and
involuntary, so filed with the Register of Deeds shall Transfers
be numbered and indexed and endorsed with a
reference to the proper certificate of title. All records 255
and papers relative to registered land in the office of PD 1529
Upon the approval of the plan and technical That plan with the certified copy of the
descriptions, the original of the plan, together with a technical descriptions shall be filed with the
certified copy of the technical descriptions shall be Register of Deeds for annotation in the TCT.
filed with the Register of Deeds for annotation in the Register of Deeds hall issue a TCT and
corresponding certificate of title and thereupon said
cancel the grantor's certificate partially OR
officer shall issue a new certificate of title to the
grantee for the portion conveyed, and at the same it may be canceled totally and a new one
time cancel the grantor's certificate partially with issued describing therein the remaining
respect only to said portion conveyed, or, if the portion
grantor so desires, his certificate may be canceled
totally and a new one issued to him describing therein C. IF THERE ARE SUBSISTING
the remaining portion: Provided, however, that ENCUMBRANCES AND ANNOTATIONS
pending approval of said plan, no further registration
or annotation of any subsequent deed or other They shall be carried over in the new
voluntary instrument involving the unsegregated
certificate or certificates; except when they
portion conveyed shall be effected by the Register of
Deeds, except where such unsegregated portion was have been simultaneously discharged.
purchased from the Government or any of its
instrumentalities.
VI. Mortgages and Leases
If the land has been subdivided into several lots, 256
designated by numbers or letters, the Register of
PD 1529
Sec 64. Power of attorney. Any person may, by power
of attorney, convey or otherwise deal with registered
land and the same shall be registered with the
Register of Deeds of the province or city where the
land lies. Any instrument revoking such power of
attorney shall be registered in like manner.
PD 1529
Sec 65. Trusts in registered land. If a deed or other
instrument is filed in order to transfer registered land
in trust, or upon any equitable condition or limitation
expressed therein, or to create or declare a trust or
other equitable interests in such land without transfer,
the particulars of the trust, condition, limitation or
other equitable interest shall not be entered on the
certificate; but only a memorandum thereof shall be
entered by the words "in trust", or "upon condition", or 257
other apt words, and by a reference by number to the
Decree for registering the same, make a statement in e. his residence or the place to which all
writing setting forth fully his alleged right or interest, notices may be served upon him.
and how or under whom acquired, a reference to the
number of the certificate of title of the registered NOTE: Non-compliance with the above
owner, the name of the registered owner, and a
requisites renders the adverse claim non-
description of the land in which the right or interest is
claimed. registrable and ineffective.
3. REQUISITES
The adverse claimant must give a statement
signed and sworn before a notary public, the
ff in writing:
a. his alleged right or interest
b. how and under whom such alleged right
or interest is acquired
c. the description of the land in which the
right or interest is claimed and
d. the number of the certificate of title
CIVIL LAW REVIEWER Chapter 6: SYSTEM of REGISTRATION of UNREGISTERED LANDS
Inalienable Alienable
I. Classification of Land of the Public
Domain 262
1Upon registration, there shall be paid to the Register of Deeds of 1% of the assessed value of the real estate on the
basis of the last assessment for taxation purposes, as contribution to the Assurance Fund.
CIVIL LAW REVIEWER Chapter 9: RECONSTITUTION of TITLES
RECONSTITUTED CERTIFICATE OF
Chapter 9: Reconstitution 0f Titles TITLE HAS BEEN ISSUED?
(Asked in 96) The ROD or party concerned should notify the
proper RTC. After which, shall order the
I. Grounds cancellation of the reconstituted certificate of
II. Petitions For Reconstitution title and render, with respect to the
III. Duties of the Land Registration
memoranda of new liens and encumbrances, if
Authority
any, made in the reconstituted certificate of
IV. Effects of Fraud in the
Reconstitution
title, after its reconstitution, such judgment as
justice and equity may require:
Provided, however, That if the reconstituted
I. Grounds certificate of title has been cancelled by virtue
of any deed or instrument, whether voluntary
A. LOSS or involuntary, or by an order of the court, and
B. DESTRUCTION a new certificate of title has been issued, the
procedure prescribed above, with respect to
II. Petitions for Reconstitution the memorandum of new liens and
encumbrances made on the reconstituted
A. WHO MAY FILE? certificate of title, after its reconstitution, shall
1. Registered owner be followed with respect to the new certificate 266
2. His assigns of title, and to such new liens and
SALES
Table of Contents
SALES
Immovables and Unregistered Lands ........286
SALES
Prof. Roberto N. Dio I. DEFINITION
Faculty Editor
II. ELEMENTS
Jaim Mari M. Crisostomo A. CONSENT
Lead Writer B. SUBJECT MATTER
Jessa Mary Ann C. Cedeo C. PRICE
Eva Marie Guttierez III. STAGES
Kristoffer Gabriel L. Madrid A. PREPARATION/NEGOTIATION
Ros Jean Nonato B. PERFECTION
Writers C. CONSUMMATION
IV. KINDS
CIVIL LAW A. ABSOLUTE
Kristine Bongcaron B. CONDITIONAL
Patricia Tobias V. FORM
Subject Editors VI. SALE DISTINGUISHED FROM OTHER
CONTRACTS
ACADEMICS COMMITTEE A. DONATION
Kristine Bongcaron B. BARTER
Michelle Dy C. CONTRACT FOR A PIECE OF WORK
Patrich Leccio D. LEASE OF THINGS
Editors-in-Chief E. AGENCY TO BUY AND SELL
F. DACION EN PAGO
PRINTING & DISTRIBUTION G. CONTRACT TO SELL 269
H. BILATERAL PROMISE TO BUY AND SELL
SALES
Kae Guerrero
SALES
manage their property without disinterestedness. (Valencia v
outside aid (Easy prey for deceit Cabanting, 1991)
and exploitation)
Prohibition is definite and permanent,
2. Relative Incapacity cannot be cured by ratification. (Rubias
a. Husband and Wife (Art 1490, CC) v Batiller, 1973)
(Asked in 75, 76, 00, 02, 06)
Exceptions: An assignment to a lawyer
General Rule: Cannot sell property to by his client of an interest in the property
each other does not violate Art 1491, where
Exceptions: A judgment has been rendered and
1. Separation of property in marriage has become final; and
settlement, OR In case of contingency fee
2. Judicial separation of property. arrangements. The interest of the
lawyer maybe annotated as an
b. Alienage (Art. 39, CC) adverse claim on the property
Aliens disqualified to purchase or awarded to his client (Director of
acquire property. Lands v Ababa, 1979)
3. Specific Incapacity (Art. 1491, CC) (AGE- Rationale: to prevent fraud and to
PLJ) surround their profession with prestige
a. Agents
Property whose administration or sale Prohibition applies only on sales or
was entrusted to them assignment during the pendency of
litigation involving the property.
Exception: principal gives consent. (Macariola v Asuncion, 1963)
SALES
Such prohibition shall likewise apply to highest or lowest bid
common law spouses. (Calimlim- Exception: Unless the contrary appears
Canulas v Fortun, 1984) BUT if (Art. 1326, CC)
already sold to a third person who relied
on the title of his immediate seller, Form of Acceptance
reconveyance to the seller spouse is no unconditional
longer available (Cruz v CA, 1997) Qualified acceptance = counter-offer (Art.
1319, CC)
3. Specific Incapacity May be express or implied (Art. 1320, CC)
Contracts expressly prohibited by law Acceptance must be in accordance with the
are void and cannot be ratified. Neither terms and conditions of the offer. There is
can the right to set-up the defense of no meeting of the minds if the offer lapsed
illegality be waived. (Art. 1409 (7), CC) even though the offeree later on was willing
Sales entered into by guardians, to accept the terms and conditions of the
administrators, and agents (specific offer. (Beaumont vs. Prieto, 1916)
incapacities) in violation of Art. 1491
may be ratified by means of and in the
form of a new contract when the cause MUST NOT BE VITIATED
of nullity has ceased to exist. Ratification A contract where consent is given through
is valid only from date of execution of mistake, violence, intimidation, undue
the new contract and does not retroact. influence, or fraud is voidable. (Art. 1330,
Those entered into by public 1390 (2), CC)
officer/employees, justices and judges, There is fraud where through insidious
and lawyers also in violation of Art. 1491 words or machinations of one of contracting
are inexistent and void from the parties, the other is induced to enter into a
beginning. (Rubias v Batiller, 1973). contract which, without them, he would not
have agreed to. (Art. 1338, CC)
OFFER AND ACCEPTANCE
_______
In General
The contract of sale is perfected at the B. SUBJECT MATTER
moment there is meeting of the minds upon
the thing which is the object of the contract Requisites
and upon the price. 1. Licit
From that moment, the parties may 2. Existing, future or contingent
reciprocally demand performance, subject to 3. Determinate or determinable
CIVIL LAW REVIEWER Chapter I. The CONTRACT of SALE
MUST BE LICIT (ART. 1459) come into existence: the price even if the
contract is considered as thing does not actually
The thing is licit when not made and there is no came into existence
1. Within the commerce of man (Art 1347, CC) obligation to pay the
price
Example of properties that are not within the
In case of doubt the presumption is in favor of
commerce of man: emptio rei speratae since it is more in keeping with
a. Those belonging to the State or its the commutative character of the contract.
political subdivisions intended for public
use or public service. (Art 420, CC). DETERMINATE OR DETERMINABLE
b. Church A thing is determinate when it is particularly
c. Narcotics or dangerous drugs except designated or physically segregated from all
upon prescription (RA 6425, the others of the same class. (Art 1460, CC)
dangerous drugs act of 1972) A thing is determinable when it is capable
2. Rights are also licit when not intransmissible of being made determinate at the time
(Art 1347, CC) the contract was entered into without the
necessity of a new or further agreement
Sale of future inheritance is void. (Art. 1347, between the parties. (Art 1460, CC)
CC) Failure to state the exact location of the land
1. The rights to succession are transmitted does not make the subject matter
from the moment of the death of the indeterminate, so long as it can be located.
decedent (Art. 777, CC). Thus, one cannot (Camacho v C,A 2007)
sell or promise to sell what he expects to The fact that the exact area of subject land 272
inherit from a living person. (Rivero v. in the contract of sale is subject to the result
SALES
Serrano, 1950) of a survey does not render the subject
2. -Heir may sell his hereditary rights (which matter indeterminate. (Heirs of Juan San
have accrued). Andres v. Rodriguez (2000))
When the subject matter is illicit, the contract of Particular Kinds
sale is void (Art. 1409 (7)) 1. Future Goods
Sale of future goods or those goods which
EXISTING, FUTURE, CONTINGENT are to be manufactured, raised, or acquired
by seller after the perfection of the sale is
The goods which form the subject of a valid (Art 1462, CC). Future goods are
contract of sale may be either those capable of future existence.
1. existing goods owned or possessed by the
seller; 2. Sale of Undivided Interest or Share
2. goods to be manufactured, raised, acquired a. Sole owner of a thing may sell an
by the seller, also called future goods; undivided interest therein. (Art
3. whose acquisition of the seller depends 1463,CC) Ex., a fraction ( or half) or
upon a contingency which may or may not percentage (50%), or my share in the
happen. (Art 1462, CC) property.
4. Things having potential existence may be b. The sale of an undivided share in a
the object of a contract of sale. (Art 1461, specific mass of fungible goods makes
CC) the buyer a co-owner of the entire mass
in proportion to the amount he bought.
Sale of MERE hope or Sale of VAIN hope or (Art 1464,CC)
expectancy expectancy
c. Co-owner cannot sell more than his
Valid BUT subject to Void
condition that the thing
share (Yturralde v CA, 1972) (Asked
will come into existence Example: Sale of a in 01, 02)
falsified raffle ticket
Example: Next catch of which will never win. 3. Sale of Things in Litigation
a fisherman. a. Sale of things under litigation entered
into by defendant, without the approval
Emptio Rei Speratei Emptio Spei of the litigants or the court is
Valid Void rescissible. (Art 1381 (4))
Parties make the Parties intend the b. NO RESCISSION where the thing is
contract depend upon contract to exist at all rd
legally in the possession of 3 persons
the existence of a thing, events who did not act in bad faith (Art 1385
If the thing does not Buyer will have to pay
(2))
CIVIL LAW REVIEWER Chapter I. The CONTRACT of SALE
4. Things Subject to Resolutory Condition 2. But if thing or part thereof has been
Sale of things subject to a resolutory delivered and appropriated by the buyer, he
condition, i.e. things acquired under legal or must pay a reasonable price therefore.
conventional right of redemption, or subject a. What is reasonable price? A question
to reserva troncal, may be the object of a of fact dependent on circumstances.
contract of sale. (Asked in 99) (Art 1465, (Art 1474, CC)
CC) b. In the case of Philippine Free Press v
CA (2005), the court held that the price
5. Quantity of Subject Matter not determinate was reasonable based on factual
The fact that the quantity is not determinate determination predicated on offered
shall not be an obstacle to the existence of evidence (Companys Balance
the contract provided it is possible to Sheet showed the book value or fair
determine the same, without the need of market value of its shares)
new contract. (Art. 1349, CC)
SALES
2. In Money or its equivalent be considered a barter if the value of the
3. Real thing exceed the amount of money or its
equivalent.(Art 1468,CC)
CERTAIN OR ASCERTAINABLE AT THE TIME
OF PERFECTION REAL
SALES
A. Negotiation/Preparation c. Right of first refusal (Asked in 93, 96,
98, 02, 08)
From the time the parties indicate interest in the As to enforceability
contract up to the time said contract is perfected Equatorial Realty Development
vs. Mayfair, (1996): If the right to
1. Offer the first offer is embodied in the
a. General Rule: Offer may be withdrawn contract, it should be executed
at any time without even communicating according to the terms
such withdrawal to the interested buyer. stipulated. The right should be
b. Exception: When the offerer has enforced according to the law
allowed the offeree a certain period to on contracts and not on the
accept, the offer may be withdrawn at panoramic and indefinite rule on
any time before acceptance by human relations. This juridical
communicating such withdrawal. (Art relation is not amorphous nor is
1324, CC) it merely preparatory.
c. Exception to the exception: Cannot be When the grantee fails to exercise
withdrawn within the period if offer is the right
founded upon a consideration. (Art 1324 Paranaque Kings vs. CA,
and 1479, CC) (1997): Only after the grantee
st
fails to exercise its right of 1
2. Option Contract (Asked in 75, 77, 80, 93, priority under the same terms
02) and conditions within the period
a. Definition agreed upon, could the grantor
An accepted unilateral promise to validly offer to sell the property
rd
buy or sell supported by a to a 3 person under the same
consideration distinct from the price terms as offered to the grantee.
(Art 1479, CC) As to the effects of the violation
An optional contract is a privilege of the right
existing in one person, for which he Rosencor Devt. Corp. Vs.
had paid a consideration, which Inquing (2001): A sale made in
gives him the right to buy, for violation of a right of first refusal
example, certain merchandise or is valid but rescissible, and
certain specified property, if he may be the subject of an action
chooses, at any time within the for specific performance.
However, before the sale to the
rd
3 person may be rescinded, he
CIVIL LAW REVIEWER Chapter I. The CONTRACT of SALE
must have been actually or Option Money vs. Earnest Money (Limson vs.
constructively aware of the Ca, 2001)
st
right of 1 refusal at the time
he bought it. OPTION MONEY EARNEST MONEY
The sanction for the Separate and distinct Part of purchase price
enforcement of the right of first consideration from the (Art 1482, CC)
refusal against third persons is purchase price
based on Art. 19 of NCC, as no Given when sale is not Given only when there
yet perfected is already a sale
real right was created on the
When given, the would- When given, the buyer
property. be-buyer is not required is bound to pay the
to buy, but may even balance
Difference from sale: forfeit it depending on
the terms of the option
ST
SALE RIGHT OF 1 REFUSAL Grantee of option is still Buyer manifests his
Bilateral Unilateral undecided whether or earnest desire to buy
Price and other Price and other terms are yet to not to buy or sell the the property
terms of payment be agreed upon property (Baviera)
are certain _______
the thing to be sold must be determinate
C. Consummation
Distinction from Option Contract
ST
Begins when the parties perform their respective 275
OPTION RIGHT OF 1 REFUSAL undertakings under the sale. It culminates in the
SALES
CONTRACT extinguishment of the sale. (See obligations of
Separate No need for a separate seller and buyer, Chapter II)
consideration is consideration
necessary
Grantee has the No right to buy or sell, only a
st
right to buy or sell right to match the 1 offer to IV. Kinds of Sale
buy should the grantor decide (Asked in 97, 00)
to sell
A. Absolute Sale
_______
Sale is not subject to any condition
B. Perfection
whatsoever; title passes to the buyer upon
(Asked in 88 and 91)
delivery of thing sold
When Perfected
B. Conditional Sale
1. Contract of sale is a consensual contract,
Contract is subject to certain conditions
hence perfected at the moment of the
(usually the payment of the purchase price);
meeting of the minds of the parties as to the
title will only pass once the conditions have
object of the contract and the price. (Art
been fulfilled
1475,CC)
2. It is the proof of all the essential elements of
In some cases, the Court makes finer
the contract of sale, and not the mere giving
distinctions between a conditional sale and a
of earnest money, which establishes the
contract to sell:
existence of a perfected sale. (Platinum
a. Contract to sell- The fulfilment of the
Plans Phils. vs. Cucueco, 2006)
suspensive condition, which is the full
payment of the price, will not
Effect of Perfection
automatically transfer ownership to the
From the moment of the perfection of the
buyer although the property may have
contract of sale, the parties may reciprocally
been previously delivered to him.
demand performance, subject to the provisions
b. Conditional Sale: The fulfilment of the
of the Statute of Frauds. (Art 1475,CC)
suspensive condition renders the sale
absolute and affects the sellers title
Earnest Money
thereto such that if there was previous
Definition- paid in advance of the purchase
delivery of the property, the sellers
price agreed upon by the parties in a contract of
ownership or title the property is
sale, given by the buyer to the seller, to bind the
automatically transferred to the buyer.
latter to the bargain. (Asked in 93, 02)
(Ursal vs. CA, 2005)
CIVIL LAW REVIEWER Chapter I. The CONTRACT of SALE
SALES
action at a price not less than P500
Barter is a contract where one of the parties
Sale not to be performed within 1
binds himself to give one thing in consideration
year
of the others promise to give another thing
Sale of real property or an interest
(Art.1638, CC)
therein (Art 1358, CC)
c. Applies only to executory contracts, not
If consideration consists partly in money and
to contracts either totally or partially
partly in another thing, the intention of the
performed. (Iigo v. Estate of Maloto,
parties determines whether the contract is one of
1967)
sale or barter:
If manifest intention is not clear: Barter
2. Sale of realty by an agent
when the value of thing is more than the
Agents authority must be in writing,
amount of money or its equivalent,
otherwise the sale is void (Art.1874, CC)
otherwise, sale. (Art.1468)
3. Sale of large cattle
C. CONTRACT FOR A PIECE OF WORK
To be valid, transfer of large cattle must be
registered with the municipal treasurer
SALE CONTRACT FOR A
(Sec.529, Revised Administrative Code) PIECE OF WORK
Goods are manufactured Goods are manufactured
Electronic Commerce Act (RA 8792) or procured in the for customer upon his
1. Electronic documents have the legal effect, ordinary course of special order
validity or enforceability of any other business
document or legal writing For the general market, Specifically for customer
2. As long as electronic document maintains its whether on hand or not
integrity and reliability and is capable of
being displayed to the person to whom it is The fact that the object were made by the seller
to be presented, containing the electronic only when customers placed their orders, does
signature of the person sending it. (Sec 7, 8 not alter the nature of the contract of sale, for it
of RA 8792) only accepted such orders as called for the
employment of such materials as it ordinarily
manufactured or was in a position habitually to
manufacture such. (Celestino Co & Co vs.
Collector, 1956)
contract for a piece of work. (Commissioner vs. SALE BILATERAL PROMISE TO BUY
Engineering Equipment and Supply Co., AND SELL
1975) Consideration Consideration is the promise
Buyer: thing made by the other (Baviera)
D. LEASE OF THINGS Seller: price
Title passes to No transfer of title
the buyer
SALE DACION EN PAGO
No pre-existing debt Pre-existing debt
Creates an obligation Extinguishes the
obligation (mode of
payment)
Price is more freely Price is value of the thing
agreed upon, fixed by the given
parties
SALES
(Asked in 97, 01, 03)
Sellers residence
Chapter II. Obligations of the Seller and
Buyer b. In case of specific goods, which the
parties knew to be at some other place
I. OBLIGATIONS OF THE SELLER when the contract was perfected, that
A. TO TRANSFER OWNERSHIP place is the place of delivery
B. TO WARRANT AGAINST EVICTION AND
HIDDEN DEFECTS
C. TO PRESERVE THE THING c. If goods are at the time of sale
D. TO PAY FOR THE EXPENSES FOR THE possessed by a third person, then there
EXECUTION AND REGISTRATION OF is no delivery until he acknowledges to
THE DEED OF SALE the buyer that he holds the goods for
II. OBLIGATIONS OF THE BUYER buyer.
A. TO ACCEPT DELIVERY
B. TO PAY THE PRICE OF THE THING SOLD 4. When to Deliver
Absent a stipulation as to time, delivery must
be made within a reasonable time; demand
I. Obligations of the Seller or tender of delivery shall be made at a
reasonable hour.
Obligations of the Seller (TWPP)
1. Transfer ownership Ways of Effecting Delivery
2. Warrant against eviction and hidden defects 1. Actual Delivery
3. Preserve the thing a. When deemed made: when the thing 278
4. Pay for the expensed for the execution and sold is placed in the control and
SALES
registration of the deed of sale possession of the vendee (Art. 1497)
b. Not always essential to passing of title
A. To transfer ownership (Art. 1475)
(Asked in 84, 98, 99, 03) c. Parties may agree when and on what
conditions the ownership in the subject
Obligation to transfer ownership and to deliver is of the contract shall pass to the buyer
really implied in every contract of sale (Arts. (example: Art 1478 where ownership will
1458-1459) only pass after full payment of the price)
SALES
d. Tradition Brevi Manu (Short Hand) gives new ones equally satisfactory;
MOVABLE is delivered when the buyer He violates any undertaking, in
had the thing already in his possession consideration of which the seller
before the sale took place, not as owner agreed to the period;
but as lessee, borrower, or depositary. He attempts to abscond. (Art.1536)
SALES
proportionate reduction in price b. Retains the goods without giving notice
Buyer may only avail of rescission if of rejection after the time fixed has
the area deficiency is 10% or more expired, if no time has been fixed, after
of total area or if the inferior value of the expiration of a reasonable time (Art
the part of the land exceeds 10% of 1502, CC)
the price agreed upon. (Art. 1539)
If the area turns out to be greater Difference between sale on approval and
than that stated, buyer may accept sale on return
area included and reject the excess
or accept all and pay a Sale on Approval Sale on Return
proportionate increase in price (Art. Ownership does not pass Ownership passes upon
1540) upon delivery delivery, but buyer may revest
ownership in the seller by
b. Sale for lump sum returning or tendering the
goods within the time fixed in
Follows the same rule as the sale of the contract
a specific mass which is explained Depends on the character Depends on the will of the
above or quality of goods buyer
There is no change in price even if Subject to a suspensive Subject to a resolutory
area or number turns out to be condition condition
greater or lesser than that stated Risk of loss remains with Risk of loss remains with the
(Art. 1542) the seller buyer
Exception: when the excess or
deficiency is no longer reasonable;
in Asian v Jalandoni, 1923, 644 sq 2. Express Reservation
m was found to be unreasonable. If it was stipulated that ownership in the
Exception to the exception: when thing shall not pass to the purchaser until he
buyer expressly assumes risk on has fully paid the price. (Art 1478, CC)
actual area of the land. (Garcia v
Veloso, 1941) 3. Implied Reservation
If the price per unit or measure is The following are instances when there is an
not provided for in the contract, then implied reservation of ownership
the rules of lump sum sale should a. Goods are shipped, but by the bill of
prevail. (Sta. Ana v Hernandez, lading goods are deliverable to the seller
1966) or his agent, or to the order of the seller
or his agent
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the SELLER and BUYER
b. Bill of lading is retained by the seller or 6. Sale by person having a voidable title
his agent. a. True owner may recover the thing when
c. When the seller of the goods draws on provided the ff. requisites concur:
the buyer for the price and transmits the Subject matter is movable
bill of exchange and bill of lading to the Owner has either lost the thing or
buyer, and the latter does not honor the has been unlawfully deprived. (Art
bill of exchange by returning the bill of 559, CC)
lading to the seller. b. Reimbursement is necessary before
owner can recover when:
4. When sale not valid Buyer acted in good faith
eg. When the thing sold is a public property Acquired at a public auction (Art
559, CC)
5. When Seller is not the owner c. Recovery no longer possible when:
(Asked in 77, 78, 86, 87) Buyer in good faith
Acquired it at a merchants store,
General Rule: Ownership is not acquired by fair or market. (Art 1506, CC)
the buyer. One cannot give what one does __________
not have. (Art 1505, CC)
B. To warrant against eviction & hidden
Exceptions: (RE-ROM) defects (Art. 1495; 1547)
a. Seller has a Right to transfer ownership
Seller need not be the owner of the Warranties 281
thing at the time of perfection of the A statement or representation made by the seller
SALES
contract It is sufficient that seller has contemporaneously and as part of the contract
a right to transfer ownership thereof of sale, having reference to the character,
at the time it is delivered (Art. 1459) quality, or title of the goods, and by which he
One who sells something he does promises or undertakes to ensure that certain
not own yet is bound by the sale facts are or shall be as he then represents.
when he acquires the thing later
(Bucton vs Gabar, 55 SCRA 469) Effects of Warranties
b. Estoppel: Owner is by his conduct 1. Natural tendency is to induce buyer to
precluded from denying the sellers purchase the subject matter
authority to sell. (Art. 1434) 2. Buyer purchases subject matter relying
c. Registered land bought in good faith thereon
General rule: Buyer need not go 3. Seller liable for damages in case of breach
beyond the Torrens title
Exception: When he has actual Effects of Waivers
knowledge of facts and Only applicable to waiver of warranty against
circumstances that would impel a eviction (see the following section) parties may
reasonably cautious man to make increase or decrease warranty against eviction
further inquiry but the effect depends on good/bad faith of the
d. Order of courts Statutory Sale seller
In execution sale, the buyer merely 1. Seller in bad faith and there is warranty
steps into the shoes of the judgment against eviction null and void
debtor (Rule 39, sec. 33, ROC) 2. buyer without knowledge of a particular risk,
e. When goods are purchased in made general renunciation of warranty not
Merchants store, Fair, or Market (Art waiver but merely limits liability of seller in
1505, CC) case of eviction (pay value of subject matter
The policy of the law has always at time of eviction)
been that where the rights and 3. buyer with knowledge of risk of eviction
interest of the vendor clash with that assumed its consequences and made a
of an innocent buyer for value, the waiver vendor not liable
latter must be protected. (Sun 4. waiver to a specific case of eviction wipes
Brothers and Co. V. Velasco, out warranty as to that specific risk but not
(1958) as to eviction caused by other reasons
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the SELLER and BUYER
SALES
1. Express Warranty (APIR) diligence.
For there to be express warranty, the
following requisites must concur:
a. An affirmation of fact or any promise 2. Implied Warranty
relating to the thing sold; a. Implied Warranty of Title
b. The natural tendency of such affirmation b. Implied Warranty against Encumbrance
or promise is to induce the buyer to buy; / Non-Apparent Servitudes
c. The buyer buys the thing relying c. Implied Warranty against Hidden
thereon. (Art. 1546) Defects (Art. 1547)
d. Made before the sale not upon delivery Implied warranty as to
or any other point Merchantable Quality and Fitness
of Goods
An express warranty can be made by and Implied warranty against
also be binding on the seller even in the sale Redhibitory Defect in the Sale of
of a second hand article. (Moles v. IAC, Animals (Art. 1572)
1989) Quality and Fitness of Goods in
Sale by Sample or Description
Express Warranty Dealers or Traders d. Other Warranties
Talk
What is specifically Affirmation of the Implied Warranty of Title
represented as true in value of the thing or 1. Implied warranty arises by operation of law
said document cannot be statement of the and need not be stipulated in the contract of
considered as mere sellers opinion only sale.
dealer's talk. (Moles v. is not a warranty 2. Warranty of Sellers Right to Sell: seller
IAC, 1989) unless:
warrants his right to sell at the time the
- The seller made
it as an expert; ownership is to pass.
- It was relied upon Inapplicable to a sheriff, auctioneer,
by the buyer. mortgagee, pledgee, or other person
(Art.1546) professing to sell by virtue of authority in
Ordinarily, what does fact or law. (Art. 1547)
not appear on the face 3. Warranty against Eviction: seller warrants
of the written that buyer, from the time ownership passes,
instrument (Moles v. shall have and enjoy legal and peaceful
IAC, 1989) possession of the thing. Its requisites are:
a. Buyer is deprived of the whole or a part
of the thing sold;
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the SELLER and BUYER
SALES
the thing is free from all burdens and its purchase due to a disease that existed at
encumbrances (Art.1560) the time of sale. (Art 1578)
written warranty was caused by damage due Exception: if there is a stipulation to the
to unreasonable use thereof. (Sec.68(d), RA contrary (Art. 1487)
7394)
Expenses incurred subsequent to the transfer of
2. Warranty in sale of Subdivision Lot or title are to be borne by the buyer, unless caused
Condominium Units by the fault of the seller
The owner or developer shall be answerable
and liable for the facilities, improvements,
infrastructures or other forms of II. Obligations of the Buyer
development represented or promised in
brochures, advertisements and other sales
Obligations of the Buyer
propaganda disseminated by the owner or
1. To Accept delivery
developer or his agents and the same shall
2. To Pay the price of the thing sold
form part of the sales warranties enforceable
against said owner or developer, jointly and
Pertinent Rules
severally. (Sec.19, PD 957: The
1. In a contract of sale, the seller is not
Subdivision and Condominium Buyers
required to deliver the thing sold until the
Protective Decree)
price is paid nor is the buyer required to pay
the price before the thing is delivered in the
__________
absence of an agreement to the contrary
(Art 1524) 284
C. To preserve the thing, pending delivery,
2. If stipulated, then the buyer is bound to
with proper diligence (Art. 1163)
SALES
accept delivery and to pay the price at the
time and place designated
Duration: From the perfection of sale until
3. If there is no stipulation as to the time and
delivery (Art 1480)
place of payment and delivery, the buyer is
bound to pay at the time and place of
Default standard of care: Diligence of a good
delivery
father of a family
4. In the absence also of stipulation, as to the
place of delivery, it shall be made wherever
General rule: seller is liable for loss or
the thing might be at the moment the
deterioration (Art. 1174)
contract was perfected (Art. 1521)
5. If only the time for delivery of the thing sold
Exception: fortuitous event (Art. 1174)
has been fixed in the contract, the vendee is
required to pay even before the thing is
Exception to exception: seller is still liable for
delivered to him.
fortuitous event if
1. Law provides for it (e.g. delay or promising
First Obligation: accept delivery
to deliver the same thing to 2 or more
1. Form
persons with different interests Art. 1165)
a. Express: buyer intimates acceptance
2. By stipulation
b. Implied:
3. Nature of obligation requires assumption of
Goods delivered to the buyer and he
risk
does any act in relation to them that
is inconsistent with the ownership of
Fungibles sold for a price fixed according to
the seller.
weight, number or measure: duty to preserve
After the lapse of a reasonable time,
begins only after the things are weighed,
the buyer retains the goods without
counted or measured except when seller is
intimating to the seller that he has
already in delay.
rejected them. (Art.1585)
__________
2. Manner
Right of Inspection: reasonable
D. To pay for the expenses for the execution
opportunity to examine the goods upon
and registration of the deed of sale (Art.
delivery. If there is a stipulation that delivery
1487)
is preconditioned on payment, then buyer
has no right of inspection until he has paid.
General rule: The seller has the duty to pay for
(Art.1584) Exception: in case such right of
the expenses for the execution and registration
inspection is permitted by agreement or
of the deed of sale
usage trade.
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the SELLER and BUYER
SALES
from the time of judicial or extrajudicial every year in excess of 5 years
demand for payment of the life of the contract or any
of its extensions
2. Suspension of payments
Buyer may suspend payment when:
a. his ownership or possession of the thing
is disturbed or
b. he has reasonable grounds to fear such
disturbance by a vindicatory action or a
foreclosure of mortgage
SALES
sold; transmitting, acknowledging, modifying or
4. Same seller extinguishing rights with respect to lands not
registered under the Land Registration Act
or the Spanish Mortgage Law, are required
to be registered in the Registry of Property
III. Rules Governing Sale of Movables, rd
to prejudice 3 persons, although such
Immovables and Unregistered Lands registration is understood to be w/o
rd
prejudice to a 3 party with a better right.
A. Sale of Movables (PD 1528 Sec 113)
Ownership shall be transferred to the person 2. Art. 1544 applies to unregistered land
who may have first taken possession in subject to a conventional sale (because of
good faith. Art. 1358) but NOT to unregistered land
subject to judicial sale.
B. Immovables
1. Ownership belongs to the person who: E. Purchaser in good faith
a. In good faith first recorded in the (Asked in 76, 86, 08)
Registry of Property; OR 1. General Characteristics
b. If there is no inscription, ownership a. One who buys the property of another,
passes to the person who in good faith without notice that some other person
was first in possession; OR has a right to or interest in such
c. In the absence thereof, to the person property, and who pays a full and fair
who presents the oldest title, price for the sale, at the time of the
PROVIDED there is good faith. NOTE: purchase or before he has notice of the
good faith is required all the time. claim/interest of some other person in
the property. (Agricultural and Home
NOTE: Extension Development Group v CA,
a. Oldest Title any public document 1992)
showing acquisition of the land in good b. A buyer could not have failed to know or
faith. To constitute title, the discover that the land sold to him was in
transmission of ownership must appear adverse possession; hence he is
in a public document [Art. 1358 (1)] deemed to have acted in bad faith.
b. Examples: Deed of Sale, Deed of (Heirs of Ramon Duran v Uy, 344
Donation, Deed of Trust SCRA 238)
2. Presumption
Gen Rule: As a rule, he who asserts the
status of a purchaser in good faith and for
value, has the burden of proving such
assertion. This onus probandi cannot be
discharged by mere invocation of the legal
presumption of good faith, i.e., that everyone
is presumed to act in good faith (Mathay v
CA, 295 SCRA 556)
SALES
maybe cancelled even may be cancelled only in
before the action is one instance, i.e., after the
finally terminated for claim is adjudged invalid
causes which may not or unmeritorious by the
be attributable to the Court
claimant
Both are intended to protect the interest of a
claimant by posing as notices and caution to those
said with the property that same is subject to a
claim.
I. GENERAL RULE
II. EXCEPTION
I. General Rule
II. Exceptions
1. Contrary stipulation
2. An obligation to deliver a generic thing is
not extinguished by loss. (Art 1263, CC)
3. Risk of loss of specific things is subject to
the ff: 288
a. When loss occurs before perfection,
SALES
such loss is borne by seller
b. When loss occurs at time of perfection,
loss must have occurred before the
contract was entered into, without the
knowledge of both parties
SALES
Purpose purpose, whenever such warranties would
1. Evidence of possession or control of goods have been implied had the contract been
described therein transfer the goods without a document
2. Medium of transferring title and possession
over the goods described therein without He does not warrant that
having to effect actual delivery thereof 1. Common carrier will fulfill its obligation to
(Villanueva) deliver the gods
3. The custody of a negotiable warehouse 2. Previous indorsers will fulfill their obligation
receipts issued to the order of the owner, or (Art. 1516-1517, CC)
to bearer, is a representation of title upon
which bona fide purchasers for value are Goods in the hands of the carrier covered by
entitled to rely, despite breaches of trust or a negotiable document cannot be attached or
violations of agreement on the part of the levied upon, UNLESS
apparent owner. (Siy Cong Bieng vs. 1. Document is first surrendered to the carrier;
HSBC, 56 Phil 598) or
2. Impounded by the court; or
3. Its negotiation is enjoined. (Art. 1519-
II. Negotiable Documents of Title 1520,CC)
Definition
Document of title which states that the goods III. Non-Negotiable Documents of Title
referred to therein will be delivered to the bearer,
or to the order of any person named in such Goods described in a non-negotiable
document (Art. 1508, CC). document of title are deliverable only to a
specified person
TERMS OF THE HOW NEGOTIATED Carrier will not deliver the goods to any
DOCUMENT holder of the document or to whom such
Goods are deliverable to By delivery of the document may have been endorsed by the
bearer document to another consignee
Must present the deed of sale or donation in
Endorsed in blank by the
his favor
person to whose order the
goods were deliverable
Goods are deliverable to By indorsement of
the order of a specified such person (Art.
person 1509,CC)
CIVIL LAW REVIEWER Chapter V. DOCUMENTS of TITLE
290
SALES
CIVIL LAW REVIEWER Chapter VI. REMEDIES of the SELLER and BUYER
SALES
when only partial delivery is
made (unless such is symbolic
I. General Remedies (Art. 1191, CC) delivery of the whole)
Not lost by mere fact that seller
The following remedies arise from the bilateral obtained a judgment for the
nature of the contract of sale: price
1. Specific performance (Asked in 02)
2. Rescission (Asked in 03, 08) When revived: Goods are returned by
General rule is that rescission of a the buyer in a wrongful repudiation of
contract will not be permitted for a slight the contract
or casual breach, but only for such
substantial and fundamental breach b. Right of stoppage in transitu
as would defeat the very object of the
parties in making the agreement. (Song An extension of the lien for the price;
Fo & Co. vs. Hawaiian-Philippine Co., entitles unpaid seller to resume
(1925)) possession of the goods while they are
3. Damages in transit before the goods come in
possession of the vendee (1530-1532,
Neither party incurs in delay if the other does not 1535, 1636[2])
comply or is not ready to comply in a proper
manner with what is incumbent upon him (Art Available when: Vendee becomes
1169, CC) INSOLVENT
SALES
instructions
Carrier not obliged to redeliver When available:
until the negotiable document of Seller expressly reserved right to
title, if any, has been rescind in case buyer defaults
surrendered for cancellation Buyer has been in default in
payment for an unreasonable time
Sellers right to stoppage in transitu not
affected even if buyer has sold or Transfer of title shall not be held to have
disposed of the goods; Unless the seller been rescinded by the unpaid seller until
assented he manifests by notice to the buyer or
some other overt act an intention to
c. Special right of resale rescind.
SALES
performed purchaser to recover any unpaid
balance of the price; and
c. Rescission by giving the buyer notice of although this Court has
the election to rescind (1597) construed the word action to
mean any judicial or
Under this rule, rescission would bar an extrajudicial proceeding by
action on the contract because it means virtue of which the vendor may
cancellation of the contractual lawfully be enabled to exact
obligations between the parties. recovery of the supposed
(Baviera) unsatisfied balance of the
purchase price from the
d. Special rule for sale of movables by purchaser or his privy, there is
instalments Recto Law (1484, 1485) no occasion at this stage to
(Asked in 99) apply the restrictive provision of
the said article because there
Applies in cases of: has not yet been a foreclosure
Sale of movables in installment sale resulting in a deficiency.
Levy Hermanos vs. Gervacio, The payment of the sum of
(1939): The rule is intended to P1,250 of Sapinoso was a
apply to sales of movables, the voluntary act on his part and did
price of which is payable in 2 or not result from a further action
more installments, but not to instituted by Northern Motors.
straight-term sales where the Bachrach Motor Co., Inc. v.
price is payable in full, after Millan, (1935): Purpose of the
making a down payment law is to remedy the abuses
because the law aims to protect committed in foreclosure of
improvident buyers who may be chattel mortgages. It prevents
tempted to buy beyond their mortgagees from seizing the
means. mortgaged property, buying it at
Lease of personal property with foreclosure sale for a low price
option to buy and then bringing the suit
When lessor has deprived the against the mortgagor for a
lessee of the possession or deficiency judgment. The
enjoyment of the thing (Ex. almost invariable result of this
When lessor files a complaint procedure was that the
for replevin against lessee) mortgagor found himself minus
CIVIL LAW REVIEWER Chapter VI. REMEDIES of the SELLER and BUYER
the property and still owing 4. Maceda Law: Sale of Residential Realty
practically the full amount of his on Installments
original indebtedness. (Asked in 77, 89, 99, 00)
Nonato vs. IAC (1985): Remedies are RA 6552: An Act To Provide Protection for
ALTERNATIVE, not cumulative, i.e. Buyers of Real Estate on Installment
exercise of one bars exercise of the Payments
others
DOES not apply to:
NOTE: Unpaid Seller (1525): a. Industrial lots
e. When the whole of the price has not b. Commercial buildings
been paid or tendered; c. Sale to tenants under Agricultural
f. When a bill of exchange or other Reform Code (RA 3844)
negotiable instrument has been received
as conditional payment, and the Imposes ADDITIONAL REQUIREMENTS
condition on which it was received has FOR A VALID RESCISSION:
been broken by reason of the dishonor a. If buyer has paid at least 2 years of
of the instrument, the insolvency of the installments: GRN
buyer, or otherwise. Grace period: 1 month per year of
_________ installment payments made. BUT
buyer may only avail of it only once
B. In the Sale of Immovables in every 5 years 294
Refund of Cash Surrender Value
SALES
1. Rescission for Anticipatory Breach (CSV): 50% of total amount paid +
st
(1591) 5% for every year after the 1 5
a. Available when seller has reasonable years of installments
grounds to fear the loss of the BUT not greater than 90% of
immovable property sold and its price total amount paid
b. Example: Buyer destroys the building Notice of cancellation of demand for
sold, there being no security therefor, rescission by notarial act, effective
and buyer becomes insolvent 30 days from the buyers receipt
c. Court has no discretion to compel the thereof and upon full payment of
seller to wait for the expiration of the CSV
period to pay, or to grant the buyer more
time to pay b. If buyer has paid less than 2 years: GN
Grace period: at least 60 days
2. Specific Performance + Damages (1191) Notice of cancellation or demand for
a. Seller may choose between specific rescission by notarial act, effective
performance and rescission, with 30 days upon receipt thereof
damages in either case
b. Court has discretion, for a just cause, to c. Down payments, deposits, or options on
give the buyer more time to pay even if the contract shall be included in the total
the seller chooses rescission number of installments made
III. Remedies of the Buyer deficiency from goods of the same kind and quality,
UNLESS a contrary intent appears.
SALES
A thing is lost when it 2. If for a lump sum:
1. Perishes
2. Goes out of commerce Everything is within Not everything is
3. Disappears in such a way that its existence boundaries, even if less or within boundaries
is unknown or it cannot be recovered more than stated area
No remedy Proportional
If thing deteriorates Rudolf Lietz, Inc. v. CA, reduction in price
(2005): Where both the area OR
Without fault of seller Through fault of seller and the boundaries of the Rescission
immovable are declared, the
No breach Rescission + damages
area covered within the
Impairment shall be Or
boundaries of the immovable
borne by buyer Specific performance +
prevails over the stated area.
damages
_________
Prescriptive period: 6 months, counted from
B. Remedy for breach of obligation to
date of delivery
deliver
_________
Delivery of wrong quantity (1522)
C. Remedy for breach of warranty
Goods are less than what More
was contracted
Express Warranty
Reject the goods Reject the excess (Or 1. Prescriptive period: Period specified in
OR the whole, if express warranty OR 4 years, if no period is
Accept and pay indivisible) specified (following the general rule on
At contract rate if buyer OR rescission of contracts)
accepts knowing that seller Accept the whole and 2. Remedies:
wont perform in full pay at contract rate a. Accept goods + demand
At fair value: If goods were diminution/extinction of price
used before knowing that b. Accept goods + damages
seller wont be able to
c. Refuse to accept goods + damages
perform in full
d. Rescind (Refuse to accept or return or
offer to return) + recover price paid
Art. 1464. Civil Code. In the sale of an undivided
share of a specific mass of fungible goods, if the
3. Rescission not available when buyer:
mass contains less than the number, weight, or a. Knew of breach of warranty when he
measure bought, the buyer becomes the owner of the accepted the goods without protest
whole mass and the seller is bound to make good the
CIVIL LAW REVIEWER Chapter VI. REMEDIES of the SELLER and BUYER
b. Fails to notify the seller about election to c. If property sold for nonpayment of taxes
rescind within a reasonable period of due and not made known to the buyer
time before the sale: seller liable
c. Fails to return or offer to return the d. Judgment debtor also responsible for
goods to the seller in substantially a eviction in judicial sales, unless it is
good condition as they were when otherwise decreed in the judgment
delivered, unless deterioration was due
to breach of warranty 2. If there is waiver of warranty:
4. Measure of damages: Difference between a. Seller acted in bad faith: Waiver is void,
value of goods at time of delivery and the seller liable for eviction
value they would have had if they had b. Buyer made waiver without knowledge
answered to the warranty of risks of eviction: Seller liable only for
5. Effects of rescission: the value of thing sold at time of eviction
a. Buyer no longer liable for price c. Buyer made waiver with knowledge of
Entitled to return of any part of price risks: Seller not liable, buyer assumed
paid, concurrently with or the consequences
immediately after an offer to return
the goods Implied warranty against encumbrances
b. If seller refuses to accept offer to return (1560)
goods: buyer deemed bailee for seller 1. Rescission: Within 1 year from execution of
and has right of lien to secure payment deed of sale OR
of part of price paid 2. Damages: Within 1 year from execution of 296
deed of sale or discovery of the burden or
SALES
servitude
Implied warranty against eviction
(1555,1556) Implied warranty against hidden defects
(1567-1571)
TOTAL EVICTION PARTIAL EVICTION 1. If thing is not lost:
Enforce liability for Enforce liability (demand a. Withdraw from contract (accion
eviction VICED) redhibitoria) + damages
- Demand from seller: OR b. Demand a proportionate reduction of the
VICED Rescind price (accion quanti minoris) + damages
Value of thing sold at If he would not have
time of eviction bought the thing sold
Income or fruits, if he without the part lost BUT 2. If thing is lost:
has been ordered to he must return the thing
deliver them to the without other Due to hidden Due to fortuitous event
party who won the encumbrances than fault or fault of buyer
eviction suit those which it had when If seller aware of Demand:
Costs of eviction suit he acquired it defect, buyer may - Price paid minus value of
and in a proper case, demand: thing when it was lost
suit against seller for - Return of price - Damages, if seller acted
warranty - Refund of in bad fait
Expenses of the expenses of
contract, if buyer has contract
paid them - Damages
Damages and
interests, and
ornamental If seller not aware
expenses, IF sale of defect:
was made in bad Buyer may demand
faith price and expenses
BUT NOT damages
1. Rules:
Prescriptive period: 6 months from delivery
a. Buyer need not appeal from decision to
hold seller liable for eviction
b. When adverse possession commenced Implied warranty against redhibitory defects
before sale, but prescription period of animals
completed after transfer: seller is not 1. Remedies
liable a. Withdraw from contract + damages
b. Demand a proportionate reduction of the
price + damages
CIVIL LAW REVIEWER Chapter VI. REMEDIES of the SELLER and BUYER
2. If sale is rescinded:
a. Buyer must return animal in condition in
which it was sold and delivered
b. Buyer shall be liable for injury due to his
negligence.
3. Prescriptive period: 40 days from delivery
SALES
discovery of the non-
conformity
CIVIL LAW REVIEWER Chapter VII. EXTINGUISHMENT of SALE
SALES
9. Resolutory condition fulfilled How exercised
10. Redemption (Conventional or Legal) 1. Returning the ff. to the buyer: (PEN)
a. Price of the sale;
b. Expenses of the contract and other
II. Conventional Redemption legitimate payments made by reason of
the sale;
c. Necessary and useful expenses made
Definition
on the thing sold
1. Vendor reserves the right to repurchase the
2. Complying with any other stipulation agreed
thing sold, with the obligation to comply with
upon, if any.
the provisions of Article 1616 and other
stipulations which may have been agreed
NOTE:
upon. (Art 1601,CC)
1. BPI Family Savings Bank, Inc. v. Veloso,
2. Available when the seller reserves the right
(2004): The general rule in redemption is
to repurchase the thing sold in the same
that it is not sufficient that a person offering
instrument of sale as one of the stipulations
to redeem manifests his desire to do so. The
of the contract (Villarica v CA, 1968)
statement of intention must be accompanied
by an actual and simultaneous tender of
Period (Asked in 77)
payment for the full amount of the
General Rule: Follow period stipulated in
repurchase price.
contract, but should not exceed 10 years.
2. Paez v. Magno, (1949):Tender of payment
1. If no period stipulated, then it shall be four
is enough (i.e., consignation is not
years from the execution of the contract
necessary), if made on time, as a basis for
2. But vendor may still exercise the right to
action against the buyer to compel him to
repurchase within thirty days from the time
resell. But that tender does not in itself
final judgment was rendered in a civil action
relieve the buyer from his obligation to pay
on the basis that the contract was a true
the price when redemption is allowed by the
sale with right to repurchase
court.
By whom exercised
Effect of redemption
1. Vendor
1. The seller shall receive the thing free from
2. His heirs, assigns or agents
all charges or mortgages constituted by the
3. Creditor, if he has exhausted the property of
buyer BUT he shall respect leases executed
the vendor
by the buyer in good faith and in accordance
with local custom.
2. If there are growing fruits at the time of sale
CIVIL LAW REVIEWER Chapter VII. EXTINGUISHMENT of SALE
and at the time of redemption: no the realty taxes having been paid by them, the
reimbursement or prorating if the buyer did contracts which purported to be pacto de retro
not pay indemnity at the time of sale transactions are presumed to be equitable
3. If there were no growing fruits at the time of mortgages, whether registered or not, there
sale, but some exist at the time of being no third parties involved.
redemption: fruits prorated (buyer entitled to
part corresponding to time he possessed the Legaspi v. Spouses Ong, (2005): A pactum
land in the last year, counted from the commissorium is a stipulation enabling the
anniversary of the date of sale) mortgagee to acquire ownership of the
mortgaged properties without need of
Effect of non-redemption foreclosure proceedings which is a nullity being
Ownership is consolidated in the buyer BUT contrary to the provisions of Article 2088 of the
the consolidation shall not be recorded in Civil Code. The inclusion of such stipulation in
the Registry of property w/o a judicial order, the deed shows the intention to mortgage rather
after the vendor has been duly heard. than to sell.
SALES
cannot exist unless another contract
reserved at the time of
Sale with right to Equitable mortgage
the perfection of the main
repurchase
contract of sale
Right to repurchase the When any of the
Does not need its Must have a
thing sold granted to cases in Art. 1602
separate consideration to consideration separate
the vendor in a arise
be valid and effective and distinct from the
separate instrument
purchase price to be valid
from the deed of sale
and effective (Arts. 1324
and 1479)
The maximum period for The period of the option Presumption that a contract is an equitable
the exercise of the right contract may be beyond mortgage arises when (5P-R)
to repurchase cannot the 10-year period 1. Price unusually inadequate;
exceed 10 years 2. Possession retained by the seller as lessee
Requires in addition a May be exercised by or otherwise;
tender of payment of the notice of its exercise to 3. Period of redemption extended (or granted
amount required by law, the offeror anew) upon or after the expiration of the
including consignment
thereof if tender of
right to repurchase;
payment cannot be made 4. Part of the purchase price retained by the
effectively on the buyer seller;
5. Payment of taxes on the thing sold borne by
the seller;
6. Any other case where it may be fairly
III. Equitable Mortgage
inferred that the Real intention of the parties
(Asked in 79, 80, 82, 84, 86, 89, 91, 05) is for the transaction to secure a debt or
other obligation.
Definition
Molina v. CA, (2003): An equitable mortgage is For the presumption of an equitable
defined as one which, although lacking in some mortgage to arise under Art. 1602, 2
formality, or form or words, or other requisites requisites must concur (Molina v. CA,
demanded by a statute, nevertheless reveals the 2003)
intention of the parties to charge real property 1. That the parties entered into a contract
as security for a debt, and contains nothing denominated as a contract of sale, and
impossible or contrary to law. 2. That their intention was to secure an existing
debt by way of a mortgage.
Tan v. Valdehueza, (2003): The Valdehuezas
having remained in possession of the land and
CIVIL LAW REVIEWER Chapter VII. EXTINGUISHMENT of SALE
SALES
litigation is sold
(Art.1634)
Applicant or his widow 5 yrs. from date of
IV. Legal Redemption or legal heirs in case of conveyance
sale of homestead
Definition (Sec.119, Public
Right to be subrogated: Land Act)
a. upon the same terms and conditions Taxpayer in case of tax 1 year from date of
sale (Sec. 215, forfeiture
stipulated in the contract, NIRC)
b. in the place of one who acquires a thing Judgment debtor, 1 year from the date of
by purchase or dation in payment, or by successorin- interest, registration of the
any other transaction whereby or creditor with certificate of sale
ownership is transmitted by onerous title subsequent lien, in case
(Art 1619, CC) of execution sale
(Rule 39, Sec.27,
Applies to transfers of ownership by onerous ROC)
title where subrogation is possible. Hence, it Debtor-mortgagor, 1 year from the date of
successors-in- interest, the sale
cannot apply to barter or to transfer by
judicial/judgment
gratuitous title or hereditary succession. creditor, any person
Applies to sales with pacto de retro having a lien on the
(BAVIERA citing MANRESA) property, in case of
extrajudicial foreclosure
Manner of mortgage (Act No.
1. a formal offer to redeem or 3135. Sec. 6. )
2. filing of an action in court together with the Debtor-mortgagor in 90 days from finality of
consignation of the redemption price within case of judicial judgment
the reglementary period foreclosure of real
estate mortgage IF the
mortgagee is a bank or
a banking institution.
(The
General Banking
Law of 2000)
CIVIL LAW REVIEWER Chapter VII. EXTINGUISHMENT of SALE
Agricultural lessee w/o 2 years from the Order of preference if two or more wish to
knowledge of sale of registration of the sale exercise the right:
landholding a. Owner with smaller land area
(Agrarian Land b. If same land area, then the one who first
Reform Code,
requested the redemption
Sec.12)
Ortega v. Orcine, (1971): What constitutes
Instances of Legal Redemption
rural or urban is to be determined from
1. Redemption by Co-owners (Art. 1621)
the character of the community or vicinity in
which it is found, and NOT from the nature
A co-owner of a thing may exercise the right
of the land itself nor the purpose to which it
of redemption in case the shares of all the
is devoted
co-owners or any of them are sold to a third
person
3. Redemption by adjoining land-owners of
a. Third person refers to all persons who
urban land (applies only to small
are not heirs of the vendor, by will or
portions of urban land) (Art. 1621)
intestate succession
b. The right is available not only to original
Right of Pre-emption Right of Redemption
co-owners, but to those who had later
Owner of any adjoining If the resale has been
acquired the share of the co-owner land has a right of pre- perfected, the owner of
c. But the right of redemption may be emption at a reasonable the adjoining land shall
exercised by a co-owner only when part price when: have a right of 301
of the community property is sold to a -Urban land is so small redemption, also at a
SALES
stranger. When the portion is sold to and so situated that a reasonable price
another co-owner, the right does not major portion of it cannot
arise because a new participant is not be used for any practical Priority if 2 or more
added to the co-ownership (Fernandez purpose w/in a adjoining owners want to
reasonable time; redeem: owner whose
v. Taun)
-Was bought merely for intended use of the land
speculation; appears to be best
If the price of the alienation is grossly -Was resold justified
excessive, the redemptioner shall pay only a
Arises before sale Arises after sale
reasonable one
No rescission because There can be rescission
no sale exists yet of the original sale
Should two or more co-owners desire to The action is directed Action is directed against
exercise the right, they may also do so in against prospective buyer
proportion to the share they may seller
respectively have in the thing owned in
common
4. Redemption of Credit
Rationale: Public Policy, since co-
ownership is a hindrance to the Available when it is sold while in litigation
development and administration of the (From the time the complaint is answered)
property (BAVIERA)
NOT available when the assignment in favor
2. Redemption by Adjoining Land-owners of:
of rural land (Art. 1621) a. Co-heir/co-owner of right assigned
b. Creditor in payment of his credit
The ff. Requisites must concur: c. Possessor of a tenement or piece of
a. A piece of rural land is alienated land which is subject to the right
b. Area does not exceed one hectare assigned
SALES
Lessees right of redemption
his direct descendant or heir
a. Sec. 12 RA 3844: In case landholding is
c. From whom: Subsequent purchasers rd
sold to 3 person without the knowledge
of the lessee, the latter shall have the
right to redeem the same at a
6. Redemption in Foreclosure and
reasonable price and consideration
Execution Sales
b. Period: within 180 days from notice in
writing
Who may redeem In extra judicial
foreclosure
-Debtor
-Successor in interest
-Judicial or judgment
creditor of said debtor
-Junior encumbrancer
In execution sales
-Judgment debtor
-Successor in interest
-Creditor having a lien
on the property sold by
attachment, judgment or
mortgage on the
property subsequent to
the judgment
Period to redeem Extra judicial foreclosure
- within 1 year from the
date of the sale
Execution sale
- within 12 months after
the sale
If land is mortgaged in
favor of a bank
- within 1 year after the
sale (not available in
case of a corporate
mortgagor)
Amount of redemption -Amount of the purchase
-Interest at 1% per
month from the time of
CIVIL LAW REVIEWER Chapter VIII. PHILIPPINE BULK SALES LAW
SALES
Menghraj, (1941))
3. Inventory of the goods, wares,
merchandise, provisions or materials
When made: at least 10 days before
II. Coverage sale or mortgage
Contents:
The Law covers all transactions, whether done Quantity
in good faith or not, that fall within the
Cost price of each article (as far as
description of what is bulk sale (Villanueva)
possible)
Transactions Covered
4. Notice to listed creditors
Applies to sales and transfers in bulk,
When made: at least 10 days before
including any sale, transfer, mortgage or
transfer of possession
assignment of:
1. A stock of goods, wares, merchandise, How: personally or by registered
provisions or materials NOT in the ordinary mail
course of trade and the regular prosecution Contents: Price, terms and
of the business of the seller, transferor, conditions of sale, transfer,
mortgagor, or assignor mortgage or assignment
2. All, or substantially all, of the business or
trade theretofore conducted by the seller, 5. Consideration for the sale, transfer,
transferor, mortgagor, or assignor mortgage or assignment
3. All, or substantially all, of the fixtures and Must not be nominal
equipment used in and about the business
of the seller, transferor, mortgagor, or
assignor
On Transaction Itself
If the purchase or mortgage money is not
applied pro-rata to the bona fide claims of listed
creditors: Sale, transfer or mortgage shall be
FRAUDULENT and VOID.
SALES
On Buyer, Mortgagee, Transferee or
Assignee
The Law imposes no direct obligation, thus a
buyer in bulk sale cannot be deemed to be
subject to the criminal liability under the Law
- end of Sales -
CIVIL LAW REVIEWER TABLE of CONTENTS
CREDIT TRANSACTIONS
Table of Contents
CREDIT TRANSACTIONS
III. Characteristics of Deposit .................314
IV. Deposit Distinguished From Mutuum
and Commodatum .....................................314
V. Obligations of the Depositary............314
VI. Obligations of the Depositor..............317
VII. Extinguishment of Deposit (Art. 1995)
317
VIII. Necessary Deposit........................317
IX. Judicial Deposit .................................318
CREDIT TRANSACTIONS
Prof. Roberto N. Dio I. TYPES OF CREDIT TRANSACTIONS
Faculty Editor
II. SECURITY
Katrina Elena Guerrero III. BAILMENT
Lead Writer
Diana Gervacio CREDIT TRANSACTIONS - include all
Patricia Andrea Hernandez transactions involving the purchase or loan of
Mark Luciano
Ixara Maroto
goods, services or money in the present with a
Writers promise to pay or deliver in the future (contract
of security)
CIVIL LAW
Kristine Bongcaron I. Types of Credit Transactions
Patricia Tobias
Subject Editors
Secured transactions or contracts of real
ACADEMICS COMMITTEE security Those supported by collateral or an
Kristine Bongcaron encumbrance of property
Michelle Dy
Patrich Leccio Unsecured transactions or contracts of
Editors-in-Chief personal security Those the fulfillment of
PRINTING & DISTRIBUTION which by the principal debtor is secured or
supported only by a promise to pay or the
Kae Guerrero personal commitment of another such as a
guarantor or surety
DESIGN & LAYOUT 307
Pat Hernandez
CREDIT TRANSACTIONS
Viktor Fontanilla
Rusell Aragones II. Security
Romualdo Menzon Jr.
Rania Joya SECURITY - something given, deposited or
LECTURES COMMITTEE serving as a means to ensure the fulfillment or
enforcement of an obligation or of protecting
Michelle Arias some interest in property.
Camille Maranan
Angela Sandalo
Heads 2 TYPES OF SECURITY
1. Personal Security as when an individual
Katz Manzano Mary Rose Beley
Sam Nuez Krizel Malabanan becomes a surety or a guarantor
Arianne Cerezo Marcrese Banaag 2. Real Security - as when a mortgage,
Volunteers pledge, antichresis, charge or lien or other
device used to have property held, out of
MOCK BAR COMMITTEE which the person to be made secure can be
Lilibeth Perez compensated for loss. Thus, a secured
creditor is one who holds a security from his
BAR CANDIDATES WELFARE debtor for payment of the latters debts.
Dahlia Salamat
LOGISTICS
III. Bailment
Charisse Mendoza
PARTIES IN BAILMENT
1. Bailor the giver, the party who delivers
possession/custody of the thing bailed
2. Bailee the recipient, the party who
receives the possession/custody of the thing
delivered
CREDIT TRANSACTIONS
piece of work, Art.1713)
c. Hire for carriage of goods for goods
delivered to be carried from place to
place by a common carrier (Art.1732) or
private person
d. Hire of custody for storage of goods
delivered (Arts.1507-1520, Warehouse
Receipts Law)
CREDIT TRANSACTIONS
(Art 418)
Unilateral contract
1. creates obligations on only one party, i.e., IV. Commodatum
the borrower
2. In a contract of loan, the cause is, as to the 2 KINDS OF COMMODATUM
borrower, the acquisition of the thing, and as 1. Ordinary commodatum - See Art.1933
to the lender, the right to demand its return 2. Precarium one whereby the bailor may
or its equivalent. (Monte de Piedad v. Javier)
demand the thing loaned at will; exists in
cases where:
III. Kinds of Loan: In General a. neither the duration of the contract nor
the use to which the thing loaned should
Commodatum Mutuum be devoted has been stipulated
Ordinarily involves Involves money or b. if the use of the thing is merely tolerated
something not other consumable thing by the owner (Art 1947)
consumable*
(Art.1936) GENERAL RULE: In a commodatum, the right
to use is limited to the thing loaned, and not to
Ownership of the thing Ownership is
its fruits
loaned is retained by transferred to the
lender (Art.1933) borrower
Essentially gratuitous Maybe gratuitous or it EXCEPTION: When there is stipulation to the
(Art.1933) maybe onerous, i.e. contrary (Art.1940). In cases where there is
with stipulated interest such a stipulation, enjoyment of the fruits must
CIVIL LAW REVIEWER Chapter II. LOAN
be incidental to the use of the thing itself. 6. Solidary obligation where there are 2 or
Otherwise, if the use of the fruits is the main more bailees to whom a thing was loaned in
cause, the contract may be one of usufruct. the same contract (Art.1945)
(Art.562) _______
What is the effect of an accepted promise to GENERAL RULE: Bailee is not liable for loss or
deliver by way of commodatum or mutuum? damage due to a fortuitous event (Art.1174),
It is binding upon the parties, but the since the bailor retains ownership of the thing
contract of loan shall not be perfected until
delivery of the contract. (Art.1934) EXCEPTION: Bailee is liable even for loss due
to a fortuitous event when: (Art 1942)
Who may be bailor in commodatum? 1. He devotes the thing to any purpose
1. Anyone. The bailor in commodatum need different from that for which it was loaned
not be the owner of the thing loaned. 2. He keeps it longer than the period
(Art.1938) stipulated, or after the accomplishment of
2. But the bailee himself may not lend nor the use for which the commodatum has
lease the thing loaned to him to a third been constituted
person (Art 1939(2)) 3. The thing loaned has been delivered with
_______ appraisal of its value, unless there is
stipulation exempting the bailee from
GENERAL RULE: Commodatum is purely responsibility in case of a fortuitous event
personal in character (Art.1939) such that: 4. He lends or leases the thing to a third
1. Death of either party extinguishes the person who is a not a member of his
contract household
2. Bailee can neither lend nor lease the thing 5. Being able to save either the thing borrowed 310
lent to him to a third person or his own thing, he chose to save the latter.
CREDIT TRANSACTIONS
_______
EXCEPTION: Members of the bailees
household may make use of the thing loaned GENERAL RULE: Bailee is liable for
deterioration of thing loaned.
CREDIT TRANSACTIONS
turpitude, even though he should (non-consumable) things.
prove it, unless the crime or the act 2. In commodatum, the bailee is bound to
has been committed against the return the identical thing borrowed when the
bailee himself, his wife, or children time has expired or the purpose has been
under his authority served. In barter, the equivalent thing is
Undue refusal to give the bailor given in return for what has been received.
support when the bailee is legally or 3. Mutuum may be gratuitous and
morally bound to commodatum is always gratuitous. Barter
on the other hand is an onerous contract. It
[NOTE: Article 765 is applicable, because is really a mutual sale.
like donation, commodatum is essentially
gratuitous. (Art.1933, par.2)] [NOTE: BARTER contract where by one of the
parties binds himself to give one thing in
2. To refund extraordinary expenses for the consideration of the others promise to give
preservation of the thing loaned provided another thing. (Art.1968)]
bailor is notified before the expenses were
incurred. (Art.1949) CONSUMABLE AND FUNGIBLE
EXCEPTION: Urgent need hence no DISTINGUISHED
notice is necessary. Whether a thing is consumable or not
depends on its nature and whether it is
3. To refund 50% of the extraordinary fungible or not depends on the intention of
expenses arising from actual use of bailee of the parties.
the thing loaned (Art.1949) Example: Wine is consumable by nature, but
EXCEPTION: Contrary stipulation it may be non-fungible if the intention is
merely for display or exhibition.
4. To pay damages to bailee for known hidden
flaws in the thing loaned. [NOTE: Fixed, savings, and current deposits of
money in banks and similar institutions shall be
[NOTE: Bailor has no right of abandonment; governed by the provisions concerning simple
he cannot exempt himself from payment of loan. (Art.1980)]
expenses to bailee by abandoning the thing to
the latter. (art. 1952)]
CIVIL LAW REVIEWER Chapter II. LOAN
CREDIT TRANSACTIONS
to have been reasonably ascertained). The
2. Upon judicial demand. HOWEVER, debtor
actual base for the computation of legal
is not liable to pay compound interest even
interest shall, in any case, be on the amount
after judicial demand when there is no
finally adjudged.
stipulation for payment of interest. (Art.2212)
3. When the judgment of the court awarding a
REQUISITES FOR INTEREST TO BE
sum of money becomes final and executory,
CHARGEABLE
the rate of legal interest, whether the case
1. Must be expressly stipulated
falls under paragraph 1 or paragraph 2,
2. Agreement must be in writing (Art.1956)
above, shall be 12% per annum from such
3. Must be lawful
finality until its satisfaction, this interim
period being deemed to be by then an
EXCEPTIONS TO REQUISITE OF EXPRESS
equivalent to a forbearance of credit.
STIPULATION
1. The debtor in delay is liable to pay legal
interest (6% or 12%) as indemnity for IX. The Usury Law
damages (Art.2209)
2. Interest accruing from unpaid interest THE USURY LAW (Act No.2566) is an act fixing
Interest demanded shall earn interest from rates of interests upon loans and declaring the
the time it is judicially demanded (Art.2212) effect of receiving or taking usurious rates and
or where there is an express stipulation for other purposes. (Arevalo v. Dimayuga 49
(Art.1959) Phil 894)
RULES FOR AWARD OF INTEREST IN THE CB Circular No. 905 abolished interest rate
CONCEPT OF ACTUAL & COMPENSATORY ceilings. Conversely, with the promulgation of
DAMAGES (Eastern Shipping Lines v. CA, 234 such circular, usury has become legally
SCRA 78) inexistent as the parties can now legally agree
1. When obligation is breached consists in on any interest that may be charged on the loan.
the payment of a sum of money, i.e., a
loan or forbearance of money, the interest ELEMENTS OF USURY
due should be that which may have been 1. A loan or forbearance of money
stipulated in writing. Furthermore, the 2. An understanding between parties that the
interest due shall itself earn legal interest loan shall and may be returned
CIVIL LAW REVIEWER Chapter II. LOAN
CREDIT TRANSACTIONS
borrowers or lead to a hemorrhaging of their
assets.
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Judicial takes place when an attachment or subject matter
seizure of property in litigation is ordered Depositor can demand Lender must wait until
(Arts.2005-2008) return of subject matter expiration of the period
at will granted to the debtor
Extrajudicial (Art. 1967) Both movable and Only money or any
1. Voluntary- delivery is made by the will of immovable may be the other fungible thing
the depositor or by two or more persons object may be the object
each of whom believes himself entitled to
the thing deposited; DEPOSIT AND COMMODATUM
2. Necessary- made in compliance with a legal DISTINGUISHED
obligation, or on the occasion of any
calamity, or by travelers in hotels and inns DEPOSIT COMMODATUM
(Arts.1996-2004) or by travelers with Principal purpose is Principal purpose is
common carriers (Arts.1734-1735) safekeeping transfer of use
May be gratuitous Always and essentially
gratuitous
III. Characteristics of Deposit In extrajudicial deposit, Both movable and
only movable immovable may be the
Characteristics (corporeal) things may object.
1. Real Contract because it is perfected by the be the object. But for
judicial deposits, object
delivery of the subject matter. may be movable or
2. Principal purpose of the contract of deposit immovable.
is the safekeeping of the thing delivered.
3. If gratuitous, it is unilateral because only the
depository has an obligation. If onerous, it is V. Obligations of the Depositary
bilateral.
OBLIGATIONS
The principal purpose is safekeeping of the 1. Depositary is obliged to keep the thing
thing delivered, so that if it is only an accessory safely and to return it when required, even
or secondary obligation, deposit is not though a specified term may have been
constituted but some other contract. stipulated in the contract. (Art.1972)
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is not responsible for loss of thing without use the same (Art.1979)
negligence of the third person with whom he
was allowed to deposit the thing if such third 9. Where thing deposited is delivered
person is not manifestly careless or unfit. closed and sealed, depositary has
obligation to:
4. Depositary is obliged not to change way a. Return the thing deposited when
of deposit. He may change the way or delivered closed and sealed
manner of deposit only if there are b. Pay for damages should seal or lock be
circumstances indicating that the depositor broken through his fault, which is
would consent to the change and notice is presumed unless proven otherwise
given to depositor. HOWEVER, notice is not c. Keep secret of the deposit when the
required if delay will cause danger. seal or lock is broken, with or without his
(Art.1974) fault (Art.1982)
5. If thing deposited should earn interest, the 10. Depositary is obliged to return the
depositary is under obligation (1) to collect products, accessories and accessions of
the interest as it becomes due and (2) to the thing deposited. (Art.1983)
take such steps as may be necessary to
preserve its value and the rights 11. Depositary is obliged to pay interest on
corresponding to it. The depositary is bound sums converted to personal use.
to collect not only the interest but also the (Art.1983)
capital itself when due. (Art.1975)
12. Depositary who receives the thing in
6. Depositary has the obligation not to deposit cannot require that the depositor
commingle things deposited if so prove his ownership over the thing (Art.
stipulated, even if they are of the same kind 1984)
and quality. (Article 1976)
13. Where the thing appears to be stolen and
GENERAL RULE: The depositary is the depositary knows the true owner, he
permitted to commingle grain or other must advise the true owner about the
articles of the same kind and quality. deposit. If the owner, in spite of such
EXCEPTION: When there is a stipulation to information, does not claim it within the
the contrary period of one month, the depositary is
CIVIL LAW REVIEWER Chapter III. DEPOSIT
relieved from liability. (Art.1984, pars.2 and there was no malice on the part of the
3) If the depositary has reasonable grounds depositary
to believe that the thing has not been
lawfully acquired by the depositor, he may TIME OF RETURN (Art.1988)
return the same. (Art.1984, par.4) 1. GENERAL RULE: The thing deposited must
be returned to the depositor upon demand,
RIGHT OF TWO OR MORE DEPOSITORS even though a specified period or time for
(Art.1985) such return may have been fixed.
1. Where the thing is divisible and depositors 2. EXCEPTIONS:
not solidary each one of the depositors a. When the thing is judicially attached
can demand only his share proportionate while in the depositarys possession
thereto. b. When notified of the opposition of a third
2. Where the thing is not divisible or the person to the return or the removal of
obligation is solidary rules on active the thing deposited
solidarity must apply
a. Each one of the depositors may do RIGHT OF THE DEPOSITARY TO RETURN
whatever may be useful to the others THE THING (Art.1989)
but not anything which may be 1. GENERAL RULE: The depositary may
prejudicial to the latter. (Art.1212) return the thing deposited notwithstanding
b. The depositary may return the thing to that a period has been fixed for the deposit
any one of the solidary depositors if:
UNLESS a demand for its return has a. The deposit is gratuitous;
been made by one of them in which b. The reason is justifiable.
case delivery should be made to him.
(Art. 1214) [NOTE: If the depositor refuses to receive 316
3. Where there is a stipulation of return to one the thing, the depositary may deposit the
CREDIT TRANSACTIONS
of the depositors, the depositary is bound to thing at the disposal of the judicial authority.]
return it only to the person designated
although he has not made any demand for 2. EXCEPTION: When the deposit is for a
its return. valuable consideration, the depositary has
no right to return the thing before the
PERSONS TO WHOM RETURN MUST BE expiration of the time designated even if he
MADE should suffer inconvenience as a
1. The depositary is obliged to return the thing consequence.
deposited, when required, to:
a. The depositor; Is the depositary liable for loss by force
b. To his heirs or successors; or majeure or government order?
c. To the person who may have been The depositary is not liable in cases of loss
designated in the contract. (Art.1972) by force majeure or by government order.
2. If the depositor was incapacitated at the time HOWEVER, he has the duty to deliver to the
of making the deposit, the property must be depositor money or another thing he
returned to: receives in place of the thing. (Art.1990)
a. His guardian or administrator;
b. To the person who made the deposit; ALIENATION IN GOOD FAITH BY
c. To the depositor himself should he DEPOSITARYS HEIR
acquire capacity. (Art.1970) When alienation is done in GOOD FAITH, the
3. Even if the depositor had capacity at the heir is obliged to:
time of making the deposit but he 1. Return the value of the thing deposited
subsequently loses his capacity during the 2. Assign the right to collect from the buyer.
deposit, the thing must be returned to his
legal representative. (Art.1986) NOTE: The heir does not need to pay the
actual price of the thing deposited.
PLACE OF RETURN (Art.1987)
1. At the place agreed upon by the parties When alienation is done in BAD FAITH, the heir
2. In the absence of stipulation, at the place must:
where the thing deposited might be even if it 1. Be liable for damages;
should not be the same place where the 2. Pay the actual price of the thing deposited.
original deposit was made, provided that
CIVIL LAW REVIEWER Chapter III. DEPOSIT
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the term baggage or articles such as
dangerous character;
clothing as are ordinarily used by travelers
4. Depositary was aware of the danger without
2. Include those lost or damages in hotel
advice from the depositor.
annexes such as vehicles in the hotels
garage.
VII. Extinguishment of Deposit (Art. 1995) 2. In the following cases, the hotel- keeper is
liable
A deposit is extinguished:
1. Upon the loss or deterioration of the thing WHEN HOTEL-KEEPER LIABLE
deposited; Regardless of the amount of care exercised -
2. Upon the death of the depositary, ONLY in 1. The loss or injury to personal property is
gratuitous deposits; caused by his servants or employees as well
3. By other modes provided in the Civil Code, as by strangers (Art. 2000).
e.g. novation, merger, etc. (See Art.1231) 2. The loss is caused by the act of a thief or
robber done without the use of arms and
EFFECT OF DEATH OF DEPOSITOR OR irresistible force. (Art. 2001)
DEPOSITARY (Art. 1995)
1. Where deposit gratuitous death of either of WHEN HOTEL-KEEPER NOT LIABLE
the depositor or depositary extinguishes the 1. The loss or injury is cause by force majeure,
deposit (personal in nature). By the word like flood, fire, (Art.2000) theft or robbery by
extinguished, the law really means that the a stranger - not the hotel-keepers servant or
depositary is not obliged to continue with the employee with the use of firearms or
contract of deposit. irresistible force (Art.2001)
2. (2) Where deposit for compensation not
extinguished by the death of either party. EXCEPTION: Hotel- keeper is guilty of fault
or negligence in failing to provide against the
VIII. Necessary Deposit loss or injury from his cause. (Arts.1170 and
1174)
KINDS OF NECESSARY DEPOSITS 2. The loss is due to the acts of the guests, his
1. It is made in compliance with a legal family, servants, visitors (Art.2002)
obligation, in which case it is governed by 3. The loss arises from the character of the
the law establishing it, and in case of things brought into the hotel (Ibid.)
CIVIL LAW REVIEWER Chapter III. DEPOSIT
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IX. Judicial Deposit
EXTRAJUDICIAL JUDICIAL
(Voluntary) deposit made Constituted by virtue of a
by free will of the court order
depositor.
of law
Chapter IV. Guaranty c. Judicial required by a court to
guarantee the eventual right of one of
I. DEFINITION the parties in a case.
II. CHARACTERISTICS 3. As to consideration:
III. CLASSIFICATION
a. Gratuitous guarantor does not receive
IV. RULES GOVERNING GUARANTY
V. GUARANTY DISTIGUISHED FROM OTHERS any price or remuneration for acting as
VI. THE GUARANTOR such (2048)
VII. EFFECTS OF GUARANTY b. Onerous one where the guarantor
VIII. EXTINGUISHMENT OF GUARANTY receives valuable consideration for his
guaranty
I. Definition 4. As to person guaranteed:
a. Single constituted solely to guarantee
or secure performance by the debtor of
GUARANTY is a contract whereby a person, the principal obligation;
called the guarantor, binds himself to the creditor b. Double or sub-guaranty constituted to
to fulfill the obligation of the principal debtor in secure the fulfillment by the guarantor of
case the latter should fail to do so. (Art. 2047) a prior guaranty
5. As to its scope and extent:
While a surety undertakes to pay if the principal a. Definite where the guaranty is limited
does not pay, the guarantor only binds himself to the principal obligation only, or to a
to pay if the principal cannot pay (See benefit of specific portion thereof;
excussion, 2058). b. Indefinite or simple where the
guaranty included all the accessory
II. Characteristics obligations of the principal, e.g. costs, 319
1. Accessory dependent for its existence including judicial costs.
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upon the principal obligation guaranteed by
it; IV. Rules Governing Guaranty
2. Subsidiary and conditional takes effect
only when the principal debtor fails in his 1. A guaranty is generally gratuitous (2048)
obligation a. General Rule: Guaranty is gratuitous
3. Unilateral b. Exception: When there is a stipulation to
a. It gives rise only to a duty on the part of the contrary
the guarantor in relation to the creditor 2. On the cause of a guaranty contract
and not vice versa
b. It may be entered into even without the
SEVERINO v SEVERINO: A guarantor or
intervention of the principal debtor.
surety is bound by the same consideration that
4. Guarantor must be a person distinct from
makes the contract effective between the
the debtor a person cannot be the
principal parties thereto.
personal guarantor of himself
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third person:
and demandable
a. Payment without the knowledge or
against the will of the debtor: Rationale: A contract of guaranty is
Guarantor can recover only insofar
subsidiary.
as the payment has been beneficial
to the debtor a. To secure the payment of a loan at
Guarantor cannot compel the
maturity surety binds himself to
creditor to subrogate him in his
guarantee the punctual payment of a
rights
loan at maturity and all other obligations
b. Payment with knowledge or consent of
of indebtedness which may become due
the debtor: Subrogated to all the rights or owing to the principal by the
which the creditor had against the borrower.
debtor
b. To secure payment of any debt to be
subsequently incurred a guaranty shall
5. The guaranty must be founded on a valid
be construed as continuing when by the
principal obligation (2052[1])
terms thereof it is evident that the object
Guaranty is an accessory contract: It is is to give a standing credit to the
an indispensable condition for its
principal debtor to be used from time to
existence that there must be a principal
time either indefinitely or until a certain
obligation. Hence, if the principal
period, especially if the right to recall the
obligation is void, it is also void.
guaranty is expressly reserved.
c. To secure existing unliquidated debts
6. A guaranty may secure the performance
refers to debts existing at the time of the
of a voidable, unenforceable, and natural
constitution of the guaranty but the
obligation (2052[2])
amount thereof is unknown and not to
A guaranty may secure the performance of
debts not yet incurred and existing at
a:
that time.
a. Voidable contract such contract is d. The surety agreement itself is valid and
binding, unless it is annulled by a proper binding even before the principal
court action
obligation intended to be secured
b. Unenforceable contract because such
thereby is born, any more than there
contract is not void
would be in saying that obligations
c. Natural obligation the creditor may
which are subject to a condition
CIVIL LAW REVIEWER Chapter IV. GUARANTY
precedent are valid and binding before more than the total amount stipulated in
the occurrence of the condition the bond.
precedent.
Interest runs from:
A continuing guaranty is one which is not limited to a Filing of the complaint (upon judicial
single transaction, but which contemplates a future demand); or
course of dealing, covering a series of transactions, The time demand was made upon
generally for an indefinite time or until revoked. It is the surety until the principal
prospective in its operation and is generally intended obligation is fully paid (upon extra-
to provide security with respect to future transactions
judicial demand)
within certain limits, and contemplates a succession of
liabilities, for which, as they accrue, the guarantor
becomes liable. Rationale: Surety is made to pay, not by
reason of the contract, but by reason of
A continuing guaranty is one which covers all his failure to pay when demanded and for
transactions, including those arising in the future, having compelled the creditor to resort to
which are within the description or contemplation of the courts to obtain payment.
the contract, of guaranty, until the expiration or
termination thereof. A guaranty shall be construed as b. Penalty may be provided a surety may
continuing when by the terms thereof it is evident that
be held liable for the penalty provided
the object is to give a standing credit to the principal
debtor to be used from time to time either indefinitely for in a bond for violation of the condition
or until a certain period, especially if the right to recall therein.
the guaranty is expressly reserved.
Principals liability may exceed
Where the contract of guaranty states that the same is guarantors obligations
to secure advances to be made "from time to time" 321
the guaranty will be construed to be a continuing one. The amount specified in a surety bond
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as the suretys obligation does not limit
8. A guaranty may secure the performance the extent of the damages that may be
of a conditional obligation (2053) recovered from the principal, the latters
a. Principal obligation subject to a liability being governed by theobligations
suspensive condition the guarantor is he assumed under his contract
liable only after the fulfillment of the
condition. 10. The existence of a guaranty is not
b. Principal obligation subject to a presumed (2055)
resolutory condition the happening of
the condition extinguishes both the Guaranty requires the expression of consent
principal obligation and the guaranty on the part of the guarantor to be bound. It
cannot be presumed because of the
9. A guarantors liability cannot exceed the existence of a contract or principal
principal obligation (2054) obligation.
its contents. However, It need not The subsequent loss of integrity or property or
appear in a public document supervening incapacity of the guarantor would
not operate to exonerate the guarantor of the
V. Guaranty Distinguished from Others eventual liability he has contracted, and the
contract of guaranty continues. The creditor can
merely demand another guarantor with the
GUARANTY DISTINGUISHED FROM
proper qualifications except that the creditor may
WARRANTY
waive such remedy if he chooses and hold the
guarantor to his bargain.
Guaranty Warranty
Guaranty is a contract Warranty is an
Selection of Guarantor:
by which a person is undertaking that the title,
bound to another for the quality, or quantity of the 1. Specified person stipulated as guarantor:
fulfillment of a promise subject matter of a Substitution of guarantor may not be
or engagement of a third contract is what is has demanded
party been represented to be,
and relates to some Reason: The selection of the guarantor is:
agreement made a. Term of the agreement;
ordinarily by the party b. As a party, the creditor is, therefore,
who makes the warranty bound thereby.
GUARANTY DISTINGUISHED FROM 2. Guarantor selected by the principal debtor:
SURETYSHIP Debtor answers for the integrity, capacity,
and solvency of the guarantor.
Guaranty Suretyship
Guarantors liability Surety assumes liability
depends upon an as a regular party to the
3. Guarantor personally designated by the 322
creditor: Responsibility of the selection
independent agreement undertaking
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to pay the obligation should fall upon the creditor because he
Guarantors engagement Surety is an original considered the guarantor to have the
is a collateral promissor qualifications for the purpose.
undertaking
Guarantor is subsidiarily Surety is primarily liable
liable i.e. only obliged to i.e. bound to pay if the VII. Effects of Guaranty
pay if the principal principal does not pay
cannot pay
EFFECTS OF GUARANTY BETWEEN THE
Guarantor not bound to Surety ordinarily held to
take notice of default of know every default of his GUARANTOR AND THE CREDITOR
his principal principal 1. The guarantor has the right to benefit
from excussion/ exhaustion (2058)
Guarantor often Surety not discharged
discharged by the mere either by the mere
indulgence of the indulgence of the Exceptions to the benefit of excussion
creditor and is usually creditor or by want of (2059)
not liable unless notified notice of default of the a. As provided in Art. 2059:
of the principals default principal If the guarantor has expressly
renounced it; waiver is valid but it
must be made in express terms.
VI. The Guarantor (Arts. 2056-2057) If he has bound himself solidarily
with the debtor, the liability assumed
is that of a surety. The guarantor
Qualifications:
becomes primarily liable as a
1. He possesses integrity;
solidary co- debtor. In effect, he
2. He has capacity to bind himself;
renounces in the contract itself the
3. He has sufficient property to answer for the
benefit of exhaustion.
obligation which he guarantees.
In case of insolvency of the debtor
guarantor guarantees the solvency
Exception: The creditor waives the
of the debtor. If the debtor becomes
requirements
insolvent, the liability of the
guarantor as the debtor cannot fulfill
The qualifications above need only be present at
his obligation
the time of the perfection of the contract.
When he (debtor) has absconded,
CIVIL LAW REVIEWER Chapter IV. GUARANTY
CREDIT TRANSACTIONS
given as special security for the payment of the
principal obligation. 3. The creditor has the duty to make prior
demand for payment from the guarantor
(2060)
LUZON STEEL CORP. v SIA: The surety in the a. The demand is to be made only after
present case bound itself "jointly and severally" judgment on the debt
(in solidum) with the defendant; and excussion b. Joining the guarantor in the suit against
(previous exhaustion of the property of the the principal debtor is not the demand
debtor) shall not take place "if he (the guarantor) intended by law. Actual demand has to
has bound himself solidarily with the debtor". be made.
b. If he does not comply with Art. 2060: In 4. The guarantor has the duty to set up the
order that the guarantor may make use benefit of excussion (2060)
of the benefit of excussion, he must: As soon as he is required to pay,
Set it up against the creditor upon guarantor must also point out to the
the latters demand for payment creditor available property (not in
from him; litigation or encumbered) of the debtor
Point out to the creditor: within the Philippines.
o Available property of the debtor
the guarantor should facilitate 5. The creditor has the duty to resort to all
the realization of the excussion legal remedies (2061)
since he is the most interested a. After the guarantor has fulfilled the
in its benefit. conditions required for making use of
o Within the Philippine territory the benefit of exhaustion, it becomes the
excussion of property located duty of the creditor to:
abroad would be a lengthy and b. Exhaust all the property of the debtor
extremely difficult proceeding pointed out by the guarantor;
and would not conform with the c. If he fails to do so, he shall suffer the
purpose of the guaranty to loss but only to the extent of the value of
provide the creditor with the the said property, for the insolvency of
means of obtaining the the debtor
fulfillment of the obligation.
o Sufficient to cover the amount of
CIVIL LAW REVIEWER Chapter IV. GUARANTY
6. The creditor has the duty to notify the the subrogation clause of Article 2067. The
guarantor in the action against the debtor assumption, however, is that the guarantor
(2062) who is subrogated to the rights of the
creditor, has the right to be reimbursed for
Under this article, notice to the guarantor is his answering for the obligation of the
mandatory in the action against the principal debtor. Absent this right of reimbursement,
debtor. The guarantor, however, is not duty subrogation will not be proper.
bound to appear in the case, and his non-
appearance shall not constitute default, w/ 2. The guarantor has the duty to notify the
its consequential effect. debtor before paying the creditor (2068).
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8. Co-guarantors are entitled to the benefit General rule: Since a contract of guaranty is
of division (2065) only subsidiary, the guarantor cannot be
The benefit of division applies only when liable for the obligation before the period on
there are several guarantors and one which the debtors liability will accrue. Any
debtor for a single debt. Except when payment made by the guarantor before the
solidarity has been stipulated among the obligation is due cannot be indemnified by
co-guarantors, a co- guarantor is liable the debtor.
only to the extent of his share in the
obligation as divided among all the co- Exception: Prior consent or subsequent
guarantors. ratification by the debtor
EFFECTS OF GUARANTY BETWEEN THE 4. The guarantor may proceed against the
DEBTOR AND THE GUARANTOR debtor even before payment has been made
(2071)
1. The guarantor has the right to be
subrogated to the rights of the creditor General rule: Guarantor has no cause of
(2067) action against the debtor until after the
A guarantor who pays the debt is entitled to former has paid the obligation.
every remedy which the creditor has against
the principal debtor, to enforce every Exceptions:
security and all means of payments; to stand a. When he is sued for the payment;
in the place of the creditor not only through b. In case of insolvency of the principal
the medium of the contract, but even by debtor;
means of the securities entered into w/out c. When the debtor has bound himself to
the knowledge of the surety; having the right relieve him from the guaranty within a
to have those securities transferred to him specified period, and this period has
though there was no stipulation for it, and to expired;
avail himself of all securities against the d. When the debt has become
debtor demandable, by reason of the expiration
of the period for payment;
The need to enforce the provisions on e. After the lapse of 10 years, when the
indemnity in Article 2066 forms the basis for principal obligation has no fixed period
CIVIL LAW REVIEWER Chapter IV. GUARANTY
CREDIT TRANSACTIONS
a. Of the insolvency of the debtor, or
b. By judicial demand
3. The paying guarantor seeks to be
indemnified only to the extent of his
proportionate share in the total obligation.
For purposes of proportionate
reimbursement, the other guarantors may
interpose such defenses against the paying
guarantor as are available to the debtor
against the creditor, except those that are
personal to the debtor.
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BONDSMAN NOT ENTITLED TO
EXCUSSION (2084)
SURETYSHIP is a relation which exists where 5. Prior demand by the creditor upon
one person (principal) has undertaken an principal not required. Surety is not
obligation and another person (surety) is also exonerated by neglect of creditor to sue
under a direct and primary obligation or other principal.
duty to the obligee, who is entitled to but one
performance, and as between the two who are STRICTISSIMI JURIS RULE APPLICABLE
bound, the second, rather than the first should ONLY TO ACCOMMODATION SURETY
perform.
Reason: An accommodation surety acts
If a person binds himself solidarily with the without motive of pecuniary gain and hence,
principal debtor, the contract is called suretyship should be protected against unjust
and the guarantor is called a surety. pecuniary impoverishment by imposing on
the principal, duties akin to those of a
fiduciary. This rule will apply only after it has
NATURE OF SURETYS UNDERTAKING been definitely ascertained that the contract
1. Liability is contractual and accessory but is one of suretyship or guaranty.
direct
2. Liability is limited by terms of contract
3. Liability arises only if principal debtor is STRICTISSIMI JURIS RULE NOT
held liable APPLICABLE TO COMPENSATED SURETIES
a. In the absence of collusion, the surety is Reasons:
bound by a judgment against the 1. Compensated corporate sureties are 327
principal event though he was not a business association organized for the
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party to the proceedings; purpose of assuming classified risks in large
b. The creditor may sue, separately or numbers, for profit and on an impersonal
together, the principal debtor and the basis.
surety; 2. They are secured from all possible loss by
c. A demand or notice of default is not adequate counter-bonds or indemnity
required to fix the suretys liability agreements.
d. Exception: Where required by the 3. Such corporations are in fact insurers and in
provisions of the contract of suretyship determining their rights and liabilities, the
e. A surety bond is void where there is not rules peculiar to suretyship do not apply.
principal debtor because such an
undertaking presupposes that the
obligation is to be enforceable against
someone else besides the surety, and
the latter can always claim that it was
never his intention to be the sole person
obligated thereby.
collect.
Chapter VII. Pledge, Mortgage,
Antichresis
MANILA SURETY V VELAYO: The accessory
character is of the essence of pledge and
I. ESSENTIAL REQUISITES COMMON TO mortgage. As stated in Art 2085 CC, an
PLEDGE AND MORTGAGE
essential requisite of these contracts is that they
II. PLEDGE
III. MORTGAGE be constituted to secure the fulfillment of a
IV. FORECLOSURE OF MORTGAGE principal obligation
V. ANTICHRESIS
VI. CHATTEL MORTGAGE 2. Creditor cannot appropriate to himself the
thing nor can he dispose of the same as
I. Essential Requisites Common to owner.
Pledge and Mortgage (Art. 2085)
PROHIBITION AGAINST PACTUM
COMMISSORIUM (Art. 2088)
ESSENTIAL REQUISITES COMMON TO
1. Stipulation is null and void: Stipulation where
PLEDGE AND MORTGAGE (Art. 2085)
thing or mortgaged shall automatically
1. Constituted to secure the fulfillment of a
become the property of the creditor in the
principal obligation.
event of nonpayment of the debt within the
2. Pledgor or mortgagor must be the absolute
term fixed.
owner of the thing pledged or mortgaged.
2. Requisites of pactum commissorium:
3. The persons constituting the pledge or
a. Pledge or mortgage.
mortgage have the free disposal of their
b. A stipulation for an automatic
property, and in the absence thereof, that
appropriation by the creditor of the
they be legally authorized for the purpose.
property in the event of nonpayment. 328
4. Cannot exist without a valid obligation.
3. Effect on security contract: Nullity of the
CREDIT TRANSACTIONS
5. Debtor retains the ownership of the thing
stipulation does not affect validity and
given as a security.
efficacy of the principal contract.
6. When the principal obligation becomes due,
the thing pledged or mortgaged may be
IMPORTANT POINTS
alienated for the payment to the creditor.
1. Debtor-owner bears the risk of loss of the
property.
IMPORTANT POINTS
2. Pledge or mortgage is indivisible (2089,
1. Future property cannot be pledged or
2090).
mortgaged.
Exceptions:
2. Pledge or mortgage executed by one who is
a. Where each of several things
not the owner of the property pledged or
guarantees a determinate portion of the
mortgaged is without legal existence and
credit.
registration cannot validate it.
b. Where only a portion of loan was
3. Mortgage of a conjugal property by one of
released.
the spouses is valid only as to of the
c. Where there was failure of
entire property.
consideration.
4. In case of property covered by Torrens title,
a mortgagee has the right to rely upon what
3. Rule that real property, consisting of several
appears in the certificate of title and does
lots should be sold separately, applies to
not have to inquire further.
sales in execution, and not to foreclosure of
5. Pledgor or mortgagor has free disposal of
mortgages.
property.
4. The mere embodiment of a real estate
6. Thing pledged or mortgaged may be
mortgage and a chattel mortgage in one
alienated.
document does not have the effect of fusing
7. Creditor not required to sue to enforce his
both securities into an indivisible whole.
credit.
8. Pledgor or mortgagor may be a third person.
UY TONG v CA: The 2 elements for pactum
RIGHT OF CREDITOR WHERE DEBTOR commissorium to exist:
FAILS TO COMPLY WITH HIS OBLIGATION (1) that there should be a pledge or mortgage
1. Creditor is merely entitled to move for the wherein a property is pledged or mortgaged by
sale of the thing pledged or mortgaged with way of security for the payment of the principal
the formalities required by law in order to obligation; (2) that there should be a stipulation
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
for an automatic appropriation by the creditor of mortgage becomes unenforceable to the extent
the thing pledged or mortgaged in the event of of such failure. Where the indebtedness actually
non-payment of the principal obligation within owing to the holder of the mortgage is less than
the stipulated period. the sum named in the mortgage, the mortgage
cannot be enforced for more than the actual sum
5. Pledge or mortgage may secure all kinds of due.
obligation, be they pure or subject to
suspensive or resolutory conditions (2091). The rule of indivisibility of the mortgage as
6. A promise to constitute pledge or mortgage outlined by Article 2089 above-quoted
creates no real right, only a personal right presupposes several heirs of the debtor or
binding upon the parties, only right of action creditor which does not obtain in this case.
to compel the fulfillment of the promise but Hence, the rule of indivisibility of a mortgage
there is no pledge or mortgage yet (2092). cannot apply.
7. Under the RPC, estafa is committed by a
person who, pretending to be the owner of BELO vs. PNB: From Art. 2089 is excepted the
any real property, shall convey, sell, case in w/c, there being several things given in
encumber or mortgage the same knowing mortgage or pledge, each one of them
that the real property is encumbered and guarantees only a determinate portion of the
shall dispose of the same as credit. The debtor, in this case, shall have a right
unencumbered. It is essential that fraud or to the extinguishment of the pledge or mortgage
deceit be practiced upon the vendee at the as the portion of the debt for w/c each thing is
time of the sale. specially answerable is satisfied. From the
wordings of the law, indivisibility arises only
II. Pledge when there is a debt, that is, there is a debtor-
creditor relationship. 329
CREDIT TRANSACTIONS
PLEDGE is a contract by virtue of which the
debtor delivers to the creditor or to a third person CHARACTERISTICS
a movable or document evidencing incorporeal 1. Real Perfected by delivery.
rights for the purpose of securing the fulfillment 2. Accessory Has no independent existence
of a principal obligation with the understanding of its own.
that when the obligation is fulfilled, the thing 3. Unilateral Creates obligation solely on the
delivered shall be returned with all its fruits and part of the creditor to return the thing subject
accessions. (Art.2085 in rel to 2093) upon the fulfillment of the principal
obligation.
KINDS 4. Subsidiary Obligation incurred does not
1. Voluntary or conventional Created by arise until the fulfillment of the principal
agreement of parties. obligation.
2. Legal Created by operation of law.
CAUSE OR CONSIDERATION
CENTRAL BANK vs. CA: The consideration of 1. Principal obligation In so far as the pledgor
the accessory contract of real estate mortgage is is concerned.
the same as that of the principal contract. For 2. Compensation stipulated for the pledge or
the debtor, the consideration of his obligation to mere liberality of the pledgor If pledgor is
pay is the existence of a debt. Thus, in the not the debtor.
accessory contract of real estate mortgage, the
consideration of the debtor in furnishing the PROVISIONS APPLICABLE ONLY TO
mortgage is the existence of a valid, voidable, or PLEDGE
unenforceable debt (Art. 2086, in relation to Art. 1. Transfer of possession to the creditor or to
2052, of the Civil Code). third person by common agreement is
essential in pledge (2093).
It is not necessary that any consideration should a. Actual delivery is important.
pass at the time of the execution of the contract b. Constructive or symbolic delivery of the
of real mortgage. It may either be a prior or key to the warehouse is sufficient to
subsequent matter. But when the consideration show that the depositary appointed by
is subsequent to the mortgage, the mortgage common consent of the parties was
can take effect only when the debt secured by it legally placed in possession.
is created as a binding contract to pay. And, 2. All movables within the commerce of man
when there is partial failure of consideration, the may be pledged as long as they are
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
CREDIT TRANSACTIONS
type of delivery will depend upon the nature and
RIGHTS AND DUTIES OF CREDITOR IN A the peculiar circumstances of each case.
PLEDGE
1. Shall take care of the thing pledged with the
diligence of a good father of a family (2099). PNB vs. ATENDIDO: according to law, a
2. Has right to reimbursement of the expenses pledgee cannot become the owner of, nor
made for preserving the thing. Shall be liable appropriate to himself, the thing given in pledge.
for loss or deterioration of the thing by If by the contract of pledge the pledgor continues
reason of fraud, negligence, delay or to be the owner of the thing pledged during the
violation of the terms of the contract, but not pendency of the obligation, it stands to reason
for fortuitous events (2099). that in case of loss of the property, the loss
3. May bring actions pertaining to the owner of should be borne by the pledgor.
the thing in order to recover it from, or
defend it against, a 3rd person (2103). 3. Subject to the right of the pledge under article
4. Cannot use the thing without the authority of 2108, pledgor is allowed to substitute the
the owner. If he uses the thing without thing which is in danger of destruction or
authority, or if he misuses the thing when he impairment without any fault on the part of
was authorized to use it, the owner may ask the pledgee with another thing of the same
that it be judicially or extrajudicially kind and quality (2107).
deposited (2104). 4. May require that the thing be deposited with
5. May use the thing if necessary for its a 3rd person, if through the negligence or
preservation (2104). willful act of the pledgee the thing is in danger
6. May either claim another thing in pledge or of being lost or impaired (2106).
demand immediate payment of the principal
obligation if he is deceived on the substance EXTINGUISHMENT OF A PLEDGE
or quality of the thing (2109). 1. Ways to extinguish a pledge:
a. Payment of the debt.
THE PLEDGEE b. Sale of the thing pledged at public
1. Cannot deposit the thing pledged with a 3rd auction.
person, unless there is a contrary stipulation c. Thing pledged is returned by the
(2100). pledgee to the pledgor or owner (2110).
2. Is responsible for the acts of his agents or d. Written statement by the pledgee that he
employees with respect to the thing pledged renounces or abandons the pledge.For
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
this purpose, neither the acceptance by Useful expenses shall be refunded only to
the pledgor or owner nor the return of the possessor in good faith with the
the thing pledged is necessary, and the same right of retention, the person who
pledgee becomes a depositary (2111). has defeated him in the possession
2. Presumptions: having the option of refunding the
a. If, subsequent to the perfection of the amount of the expenses or of paying the
pledge, the thing is found in the increase in value which the thing may
possession of the pledgor or owner, have acquired and by reason thereof
there is prima facie presumption that the (Art. 546)
thing has been returned by the pledge 2. He who has executed work upon a movable
(2110). has a right to retain it by way of pledge until
b. If the thing is in the possession of a 3rd he is paid. This is called the mechanics
person who received it from the pledgor lien. (Art. 1731)
or owner after the constitution of the 3. 3) The agent may retain the things which are
pledge, there is prima facie presumption the objects of agency until the principal
that the thing has been returned by the effects the reimbursement and pays the
pledge (2110). indemnity. This is called the agents lien.
(Art. 1914)
REQUIREMENTS IN SALE OF THE THING 4. 4) The laborers wages shall be a lien on the
PLEDGED BY A CREDITOR, IF CREDIT IS goods manufactured or the work done.
NOT PAID ON TIME (Art 2112) 5. (Art. 1707)
1. Debt is due and unpaid.
2. Sale must be at a public auction. NOTE:
3. Notice to the pledgor and owner, stating the 1. In legal pledges, the remainder of the price
amount due. of the sale shall be delivered to the obligor. 331
4. Sale must be made with the intervention of a 2. Public auction of legal pledges may only be
CREDIT TRANSACTIONS
notary public. executed after demand of the amount for
5. If at the first auction the thing is not sold, a which the thing is retained. It shall take
second one with the same formalities shall place within one month after the demand,
be held. otherwise the pledgor may demand the
6. If at the second auction, there is no sale return of the thing pledged, provided s/he is
either, the creditor may appropriate the thing able to show that the creditor did not cause
pledged but he shall give an acquittance the public sale without justifiable grounds.
(release) for his entire claim. (Article 2122)
OBJECTS OF REAL MORTGAGE (Art. 2124) Central Bank v CA: Where only a portion of the
1. Immovables loan is released, the mortgage becomes
2. Alienable real rights over immovables. enforceable only as to the proportionate value of
332
the loan
Future property cannot be object of mortgage;
CREDIT TRANSACTIONS
however, a stipulation subjecting to the Indivisibility applies only as to
mortgage improvements which the mortgagor pledgors/mortgagors who are themselves
may subsequently acquire, install or use in debtors in the principal obligation, and not to
connection with real property already mortgaged accommodation pledgors / mortgagors
belonging to the mortgagor is valid.
"When several things are pledged or mortgaged,
KINDS each thing for a determinate portion of the debt,
1. Voluntary constituted by the will of the the pledges or mortgage, are considered
owner of the property on which it is created separate from each other. But when the several
2. Legal required by law to be executed in things are given to secure the same debt in its
favor of certain persons: entirety, all of them are liable for the debt, and
a. Persons in whose favor the law the creditor does not have to divide his action by
establishes a mortgage have no other distributing the debt among the various things
right than to demand the execution and pledged or mortgaged. Even when only a part of
recording of the document in which the the debt remains unpaid, all the things are still
mortgage is formalized (Article 2125) liable for such balance." (Tolentino)
b. The bondsman who is to be offered in
virtue of a provision of law or of a judicial ESSENTIAL REQUISITES
order shall have the qualifications 1. Constituted to secure the fulfillment of a
prescribed in Art 2056 (integrity, principal obligation.
capacity to bind himself, and sufficient 2. Mortgagor must be the absolute owner of
property to answer the obligation), an in the thing mortgaged.
other laws (Article 2082) 3. The persons constituting the mortgage have
c. If the person bound to give a bond free disposal of the property; in the absence
should not be able to do so, a pledge or thereof, they should be legally authorized for
mortgage considered sufficient to the purpose. (Article 2085)
recover his obligation shall be admitted 4. Cannot exist without a valid obligation. (Art.
in lieu thereof (Article 2083) 2086 cf 2052)
5. When the principal obligation becomes due,
3. Equitable One which, although lacking the the thing in which the mortgage consists
proper formalities of a mortgage, shows the may be alienated for payment to the
intention of the parties to make the property creditor. (Art. 2087)
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
6. Must appear in a public document duly when the obligation becomes DUE,
recorded in the Registry of Property, to be including indemnity from insurance, and / or
validly constituted. (Art. 2125) amount received from expropriation for
In a legal mortgage, the persons in whose public use (Art. 2127)
favor the law establishes a mortgage a. Applies only when the accessions and
have the right to demand the execution accessories subsequently introduced
and recording of a document formalizing belongs to the mortgagor.
the mortgage. (Art. 2125, par. 2) b. To exclude them, there must be an
express stipulation, or the fruits must be
EFFECTS collected before the obligation becomes
1. Creates real rights, a lien inseparable from due.
the property mortgaged, enforceable against c. Third persons who introduce
the whole world. improvements upon the mortgaged
2. Creates merely an encumbrance. property may remove them at any time
CREDIT TRANSACTIONS
1. It creates a real right, a lien inseparable from 2125, CC).
the property mortgaged
2. If a person is the first mortgagee over a Registration only operates as a notice of the
property sold in an auction sale by the mortgage to others, but neither adds to its
second mortgagee, the only right left to him validity nor convert an invalid mortgage into a
is to collect his mortgage credit from the valid one between the parties. In Gurbax Singh
proceeds of the sale (by virtue of merger of Pabla vs. Reyes, SC ruled that "if the purpose of
rights, Art 1275). registration is merely to give notice, the
3. The first mortgagee has superior rights over questions regarding the effect or invalidity of
junior mortgagees / attaching creditors instruments are expected to be decided after,
not before, registration. It must follow as a
IMPORTANT POINTS necessary consequence that registration must
1. As a general rule, the mortgagor retains first be allowed and validity or effect litigated
possession of the property. He may deliver afterwards".
said property to the mortgagee without
altering the nature of the contract of INCIDENTS OF REGISTRATION OF
mortgage. MORTGAGE
2. It is not an essential requisite that the
1. Mortgagee is entitled to registration of
principal of the credit bears interest, or that
mortgage as a matter of right.
the interest as compensation for the use of
2. Proceedings for registration do not
the principal and the enjoyment of its fruits
determine validity of the mortgage or its
be in the form of a certain percentage effect
thereof. 3. Registration is without prejudice to better
3. Mortgage creates an encumbrance over the
rights of third parties.
property, but ownership of the property is
4. Mortgage deed, once duly registered, forms
not parted with. It merely restricts the
part of the records for the registration of the
mortgagors jus disponendi over the
mortgaged property.
property. The mortgagor may still sell the 5. Mortgage by a surviving spouse of his/her
property, and any stipulation to the contrary undivided share in the conjugal property can
is void (Art. 2130)
be registered.
4. Mortgage extends to the natural accessions,
to the improvements of growing fruits and
the rents or income NOT YET RECEIVED
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
CREDIT TRANSACTIONS
satisfaction of the obligation secured by the the payment of the:
mortgage. a. Costs of the sale;
b. Amount due the mortgagee;
In General: An action for foreclosure of a c. Claims of junior encumbrancers or
mortgage is limited to the amount mentioned persons holding subsequent mortgages
in the mortgage, EXCEPT when the in the order of their priority; and
mortgage contract intends to secure future d. Balance, if any shall be paid to the
loans or advancements mortgagor.
BLANKET mortgage / DRAGNET
mortgage that subsumes all debts of past or NATURE OF JUDICIAL FORECLOSURE
future origin PROCEEDINGS:
Mortgage may be used as a continuing 1. Quasi in rem action. Hence, jurisdiction may
security which secures future be acquired through publication.
advancements and is not discharged by the 2. Foreclosure is only the result or incident of
repayment of the amount in the mortgage the failure to pay debt.
Alienation or assignment of mortgage credit 3. Survives death of mortgagor.
is valid even if it is not registered
EXTRAJUDICIAL FORECLOSURE(Act No.
ACCELERATION CLAUSE, or the stipulation 3135)
stating that on the occasion of the mortgagors 1. Applies to mortgages where the authority to
default, the whole sum remaining unpaid foreclose is granted to the mortgagee.
automatically becomes due and demandable, is 2. Authority is not extinguished by death of
ALLOWED mortgagor or mortgagee. This is an agency
coupled with interest.
KINDS OF FORECLOSURE 3. Public sale should be made after proper
1. Judicial Foreclosure notice to the public, otherwise it is a
2. Extrajudicial Foreclosure jurisdictional defect which could render the
sale voidable.
JUDICIAL FORECLOSURE 4. There is no need to notify the mortgagor.
Rule 68, ROC: Proper notice consists of:
May be availed of by bringing an action in a. posting notice in three public places
the proper court which has jurisdiction over and / or
the area wherein the real or personal (in b. publication in newspaper of general
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
CREDIT TRANSACTIONS
required to post a bond equal to the value of WAIVER OF SECURITY BY CREDITOR
the mortgagees claim. 1. Mortgagee may waive right to foreclose his
8. Republication is of the notice of sale mortgage and maintain a personal action for
necessary for validity of postponed recovery of the indebtedness.
extrajudicial sale 2. Mortgagee cannot have both remedies.
9. In foreclosure of real estate mortgage under
Act 3135, the buyer at auction may petition REDEMPTION
the land registration court for a writ of 1. It is a transaction by which the mortgagor
possession pending the one-year period of reacquires the property which may have
redemption of the foreclosedproperty. passed under the mortgage or divests the
property of the lien which the mortgage may
Nature of power of foreclosure by have created
extrajudicial sale: 2. Kinds:
1. Conferred for mortgagees protection. a. Equity of redemption: in judicial
2. An ancillary stipulation. foreclosure of real estate mortgage
3. A prerogative of the mortgagee. under the ROC, it is the right of the
mortgagor to redeem the mortgaged
Note: property by paying the secured debt
a. Both should be distinguished from within the 120 day period from entry of
execution sale governed by Rule 39, judgment or after the foreclosure sale,
ROC. but before the sale of the mortgaged
b. Foreclosure retroacts to the date of property or confirmation of sale
registration of mortgage. formal offer to redeem preserves the
c. A stipulation of upset price, or the right of redemption, e.g., by filing an
minimum price at which the property action to enforce the right to redeem
shall be sold to become operative in the
event of a foreclosure sale at public b. Right of redemption: in extrajudicial
auction, is null and void. foreclosure of real estate mortgage, the
right of the mortgagor to redeem the
RIGHT OF MORTGAGEE TO RECOVER property within a certain period after it
DEFICIENCY was sold for the satisfaction of the debt.
1. Mortgagee is entitled to recover deficiency. For natural persons one year from
2. If the deficiency is embodied in a judgment, the registration of the TCT
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
CREDIT TRANSACTIONS
to apply then to the payment of the interest, if b. A stipulation authorizing the antichretic
owing, and thereafter to the principal of the creditor to appropriate the property upon
credit (Art 2132) the non-payment of the debt within the
agreed period is void (Art. 2088)
CHARACTERISTICS
1. Accessory contract it secures the VI. Chattel Mortgage
performance of a principal obligation
2. formal contract it must be in a specified
CHATTEL MORTGAGE is a contract by virtue
form to be valid (Art. 2134)
of which a personal property is recorded in the
SPECIAL REQUISITES: Chattel Mortgage Register as security for the
performance of an obligation.
1. it can cover only the fruits of an immovable
property
If the movable, instead of being recorded, is
2. delivery of the immovable is necessary for
delivered to the creditor, it is pledge and not
the creditor to receive the fruits and not that
chattel mortgage.
the contract shall be binding
3. amount of principal and interest must be
LAWS GOVERNING CHATTEL MORTGAGE
specified in writing
4. express agreement that debtor will give 1. Chattel Mortgage Law (Act.1508, as
possession of the property to creditor and amended).
2. New Civil Code.
that the latter will apply the fruits to the
3. Revised Administrative Code.
interest, if any, then to the principal of his
4. Revised Penal Code.
credit
5. Ship Mortgage Decree of 1978 (PD 1521)
5. NOTE: The obligation to pay interest is not
of the essence of the contract of antichresis; governs mortgage of vessels of domestic
there being nothing in the Code to show that ownership.
antichresis is only applicable to securing the
AFFIDAVIT OF GOOD FAITH
payment of interest-bearing loans. On the
An oath in a contract of chattel mortgage
contrary, antichresis is susceptible of
guaranteeing all kinds of obligations, pure or wherein the parties "severally swear that the
conditional mortgage is made for the purpose of
securing the obligation specified in the
conditions thereof and for no other purposes
CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS
and that the same is a just and valid RIGHT OF MORTGAGEE TO RECOVER
obligation and one not entered into for the DEFICIENCY
purpose of fraud. 1. Where mortgage foreclosed: Creditor may
maintain action for deficiency although the
EFFECT OF REGISTRATION Chattel Mortgage Law is silent on this point,
1. Creates real rights. because a chattel mortgage is given only as
2. Adds nothing to mortgage. a security and not as payment of the debt.
2. Where mortgage constituted as security for
Note: Registration of assignment of mortgage is purchase of personal property payable in
not required. installments: No deficiency judgment can be
asked and any contrary agreement shall be
RIGHT OF REDEMPTION OF MORTGAGE void.
1. When the condition of a chattel mortgage is 3. Where mortgaged property subsequently
broken, the following may exercise attached and sold: Mortgagee is entitled to
redemption: deficiency judgment in an action for specific
a. Mortgagor. performance.
b. Person holding a subsequent mortgage.
c. Subsequent attaching creditor. APPLICATION OF PROCEEDS OF SALE
2. An attaching creditor who so redeems shall 1. Costs and expenses of keeping and sale.
be subrogated to the rights of the mortgagee 2. Payment of the obligation.
and entitled to foreclose the mortgage in the 3. Claims of persons holding subsequent
same manner as a mortgagee. mortgages in their order.
3. Redemption is made by paying or delivering 4. Balance, if any, shall be paid to the
to the mortgagee the amount due on such mortgagor, or person holding rights under
mortgage and the costs and expenses him. 337
incurred by such breach of condition before
CREDIT TRANSACTIONS
the sale.
PERIOD TO FORECLOSE
1. After 30 days from the time of the condition
is broken.
2. The 30-day period is the minimum period
after violation of the mortgage condition for
the creditor to cause the sale at public
auction with at least 10 days notice to the
mortgagor and posting of public notice of
time, place, and purpose of such sale, and is
a period of grace for the mortgagor, to
discharge the obligation.
3. After the sale at public auction, the right of
redemption is no longer available to the
mortgagor.
CREDIT TRANSACTIONS
Family home. (Arts. 152, 153 and property to which the preference refers.
155, CC) 2. If there are 2 or more credits with respect to
Right to receive support, as well as the same specific movable property, they
money or property obtained by such shall be satisfied pro rata, after the payment
support, shall not be levied upon on of duties, taxes and fees due the State or
attachment or execution. (Art. 205, any subdivision thereof
CC) 3. Those credits which enjoy preference in
Sec. 13, Rule 39, ROC. relation to specific real property or real rights
Sec 118, Public Land Act. (CA 141, exclude all others to the extent of the value
as amended) of the immovable or real right to which the
b. Future property: A debtor who obtains a preference refers.
discharge from his debts on account of 4. If there are 2 or more credits with respect to
insolvency, is not liable for the the same specific real property or real rights,
unsatisfied claims of his creditors with they shall be satisfied pro rata, after the
said property. (Sec. 68 and 69, payment of the taxes and assessment of the
Insolvency Law, Act 1956) taxes and assessments upon the immovable
c. Property in custodia legis and of public property or real right.
dominion. 5. The excess, if any, after the payment of the
2. Insolvency shall be governed by the credits which enjoy preference with respect
Insolvency Law. (Act 1956, as amended) to specific property, real or personal, shall
3. Exemption of conjugal property or absolute be added to the free property which the
community or property, provided that: debtor may have, for the payment of other
a. Partnership or community subsists. credits.
b. Obligations of the insolvent spouse have 6. Those credits which do not enjoy any
not redounded to the benefit of the preference with respect to specific property,
family. and those which enjoy preference, as to the
4. If there is co-ownership, and one of the co- amount not paid, shall be satisfied according
owners is the insolvent debtor, his undivided to the following rules:
share or interest in the property shall be a. Order established by Art 2244
possessed by the assignee in insolvency b. Common credits referred to in Art 2245
proceedings because it is part of his assets. shall be paid pro rata regardless of
dates
-end of Credit Transactions -
CIVIL LAW REVIEWER TABLE of CONTENTS
AGENCY
Table of Contents
AGENCY
[Art. 1909, CC] ...........................................350
X. Special Obligations of Factor/
Commission Agents ...................................350
AGENCY
Michelle Arias
consent of the principal, which must not, in
Camille Maranan
Angela Sandalo
any way, be compelled by law or by any
Heads court. (Litonjua, Jr. v. Eternit Corp.)
Katz Manzano Mary Rose Beley
Sam Nuez Krizel Malabanan What acts may be authorized
Arianne Cerezo Marcrese Banaag 1. General Rule: What a man may do in
Volunteers person, he may do thru another.
2. Exceptions
MOCK BAR COMMITTEE a. Personal acts
Lilibeth Perez b. Criminal acts
c. Unlawful acts
BAR CANDIDATES WELFARE
Dahlia Salamat Theory of Imputed knoweldge
1. General Rule: For knowledge of agent to be
LOGISTICS imputed to the principal, there must be:
Charisse Mendoza a. Actual notice to the agent;
b. The notice must pertain to a matter of
SECRETARIAT COMMITTEE fact and not of law; and
Jill Hernandez c. The fact must be within the scope of the
Head agents authority.
Loraine Mendoza Faye Celso
2. Exceptions
Mary Mendoza Joie Bajo a. Agents interests are adverse to those of
Members the principal;
b. Agents duty is not to disclose
information;
c. 3rd person claiming the benefit of the
rule colludes with agent to defraud
principal.
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
NoteThe theory of imputed knowledge public into believing that the relationship or
ascribes the knowledge of the agent, to the the authority exists.
principal, not the other way around. The
knowledge of the principal cant be imputed to its The principal is bound by the acts of his
agent. (Sunace Internatl Mgt. Services v. NLRC, agent with the apparent authority which he
2006) knowingly permits the agent to assume, or
which he holds the agent out to the public as
III. Characteristics [CNPPBF] possessing. The question in every case is
whether the principal has by his voluntary
1. Consensual: perfected by mere consent
act placed the agent in such a situation that
2. Nominate: has its own name
a person of ordinary prudence, conversant
3. Preparatory: purpose is the execution of a
with business usages and the nature of the
juridical act in relation to a third person
particular business, is justified in presuming
4. Principal: can stand by itself without need of
that such agent has authority to perform the
another contract
particular act in question. (Professional
5. Bilateral: gives rise to reciprocal rights and
Services Inc. vs. Agana, G.R. No. 126297)
obligations
6. Fiduciary: since it is based on trust and
One who clothes another with apparent
confidence
authority as his agent, and holds him out to
the public as such, cannot be permitted to
IV. Essential Elements deny the authority of such person to act as
Essential Elements [CORS] (Rallos v Felix Go his agent, to the prejudice of innocent third
Chan, 1978) parties dealing with such person in good
1. Consent, express or implied, of the parties faith. (Macke v Camps, 1907)
to establish the relationship
2. Object is the execution of a juridical act in Capacity of the parties
relation to a third person The principal must be capacitated to give
3. Agent acts as a Representative and not for consent. 342
himself
AGENCY
4. Agent acts within the Scope of his authority The agent must have the capacity to enter
into contracts although he/she may not have
Intent to establish agency essential the capacity to enter into the particular
General Rule contract subject of the agency
1. On the part of the principal there must be an
intention to appoint or an intention naturally However, as between the principal and the
inferable from his words or actions; and agent, the agent can set up his incapacity
2. On the part of the agent, there must be an provided he is not estopped. [Paras, Civil
intention inferable from words or deeds to Code of the Philippines Annotated]
accept the appointment and act on it.
Exception
1. Agency by estoppel; and V. Determination of Existence of Agency
2. Agency by operation of law
Designation by partiesis not controlling.
Agency by Estoppel
Fact of existence
1. The principal manifested a representation of
If relations that constitute agency exist, there
the agents authority or knowlingly allowed
is agency regardless of whether or not the
the agent to assume such authority;
parties understood the exact nature of the
2. The third person, in good faith, relied upon
relation.
such representation;
3. Relying upon such representation, such third
No presumption of existence
person has changed his position to his
1. General Rule: Agency must exist as a fact.
detriment. (Litonjua vs. Eternit Corporation,
2. Exceptions:
G.R. No. 144806)
a. When agency arises ipso jure
b. To prevent unjust enrichment
Apparent Authority
It imposes liability, not as the result of the
Intention of the parties to create
reality of a contractual relationship, but
The nature of the contract depends on the
rather because of the actions of a principal
intention of the parties as gathered from
or an employer in somehow misleading the
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
AGENCY
agent contracts
principal; a partner can act for himself, for
his firm, and for his partners
2. Parity of Standing Test Lease of Property
A partnership generally presupposes a Agency Lease of Property
parity of standing between the partners, in 1. Control
The agent acts under Lessee is not
which each party has an equal proprietary
the control and controlled by the
interest in the capital or property contributes instruction of the lessor
& where each party exercises equal rights in principal.
the conduct of the business. (Sevilla v CA,
1988) 2. Things involved
Agency may involve Lease of property only
Independent Contractor (IC) things other than involves property
Agency IC property
1. Control
The agent acts under The IC is authorized to 3. Binding power
the control and do the work according Agent can bind the Lessee cannot bind
instruction of the to his own method, principal the lessor
principal. without being subject
to the other partys
control, except insofar Agency to Sell v Sale
as the result of the Agency to Sell Sale
work is concerned 1. Ownership of goods
Agent receives the Buyer receives the
goods as the goods of goods as owner
2. Liability for tort the principal
Principal is liable for Employer not liable for
torts committed by the torts committed by the 2. Payment
agent within the scope independent Agent delivers Buyer pays the price
of his authority. contractor. proceeds of the sale to
the principal
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
AGENCY
Guardianship Between persons who are absent:
Agency Guardianship General Rule: Acceptance
1. Person represented cannot be implied from the
Agent represents a A guardian represents silence of the agent
capacitated person an incapacitated Exceptions
person. i. when the principal transmits
2. Source of authority his POA to the agent, who
Agent is appointed by Guardian is appointed receives it without any
the principal and can by the court or by law. objection;
be removed by the ii. when the principal entrusts to
latter. him by letter or telegram a
3. Control POA with respect to the
The agent acts under Guardian is not subject
business in which he is
the control of the to the directions of the
principal. ward but must act for habitually engaged as an
the benefit of the latter. agent, and he did not reply to
4. Discretion the letter [Art. 1872, CC]
Agent exercises Lessor ordinarily
discretionary powers. performs only c. Agency by estoppel
ministerial functions. If a person specially informs another
5. Binding power or states by public advertisement
Agent can make the Guardian has no that he has given a power of
principal personally power to impose attorney to a third person, the latter
liable. personal liability on the becomes a duly authorized agent,
ward.
even if previously there was never a
meeting of minds between them.
The power shall continue to be in
full force until the notice is rescinded
in the same manner in which it was
given. [Art. 1869, CC]
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
AGENCY
It is not necessary that the real property Merely advisory in nature. Strictly construed as they
to be sold be precisely described in the limit the agents authority.
written authority of the agent. It is
sufficient if the authority is so expressed As to Authority Conferred
as to determine without doubt the limits 1. Agency may be couched in general or
of the agents authority. [Jimenez v specific terms
Rabot, 1918] a. Couched in general terms [Art. 1877,
CC]
As to Cause or Consideration If couched in general terms, it comprises
Agency may be onerouse or gratuitous only acts of administration, EVEN IF:
a. General RuleAgency is presumed to the principal states that he withholds
be for compensation [Art. 1875, CC] no power; or
b. ExceptionThere is proof to the he states that the agent may
contrary [Art. 1875, CC] execute such acts as he may
consider appropriate; or
As to Extent of Business Covered the agency should authorize a
1. Universal general and unlimited management
A universal agent is one authorized to b. Couched in specific termsauthorizing
do all acts for his principal which can only the performance of specific act/acts
lawfully be delegated to an agent. 2. Power of Attorney
[Siasat v. IAC (1985)] Definition
2. General Written authorization to an agent to
It comprises all the business of the perform specified acts in behalf of his
principal [Art. 1876, CC] principal which acts, when performed,
3. Special shall have binding effect on the principal
It comprises one or more specific [2 Am. Jur. 30]
transactions [Art. 1876, CC] Purpose
Not to define the agents authority, but to
evidence such authority to 3rd parties
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
Interpretation Note
General Rule: Power of Attorney should a. Art. 1878 refers to the nature of the
be strictly construed authorization, not to its form. Even if a
Exception: When strict construction will document is titled as a general power of
destroy the very purpose of the power attorney, the requirement of special
power of attorney is met if there is a
Special Power of Attorney clear mandate from the principal
A special power of attorney is an specifically authorizing the performance
authority granted by the principal to the of the act (Bravo-Guerrero v Bravo,
agent where the act for which it is drawn 2005)
is expressly mentioned. [Strong v. b. What SPA to sell/mortgage does not
Repide, 1906] include [Art. 1879, CC]
A special power to sell excludes the
A special power can be included in a power to mortgage;
general power of attorney, either by Special power to mortgage does not
giving authority for all acts of a particular include the power to sell.
character or by specifying therein the c. A special power to compromise does not
act/transaction for which a special power authorize submission to arbitration. [Art.
is needed. [Tolentino] 1880, CC]
d. The power to legally compel the
3. When special powers are necessary [Art. payment of debts owing to the principal
1878, CC] (PNC-WIG-LLB-PORIRS): is an express grant of the right to bring
a. to make such Payments as are not suit for the collection of such debts.
usually considered acts of administration (Germann & Co v Donaldson, 1901)
b. to effect Novations which put an end to e. A power of attorney to loan and borrow
obligations already in existence at the money and to mortgage the principals
time the agency was constituted property does not carry with it or imply
a. Compromise, to submit questions to that that the agent has a legal right to 346
arbitration, to renounce the right to make the principal liable for the personal
AGENCY
appeal from a judgment, to waive debts of the agent. (BPI v De Coster,
objections to the venue of an action or to 1925)
abandon a prescription already acquired f. Unless the contrary appears, the
b. to Waive any obligation gratuitously authority of an agent must be presumed
c. to enter into any contract by which the to include all the necessary and usual
ownership of an Immovable is means of carrying the agency into effect.
transmitted or acquired either (Macke v Camps, 1907)
gratuitously or for a valuable g. If agent is empowered to borrow
consideration moneythe agent may be the lender at
d. to make Gifts, except customary ones the current rate of interest.
for charity or those made to employees h. If agent is empowered to lend money at
in the business managed by the agent; interestthe agent cannot borrow the
e. to Loan or borrow money, unless the money without the consent of the
latter act be urgent and indispensable principal
for the preservation of the things which i. Effect of lack of SPA where one is
are under administration required It is neither accurate not
f. to Lease any real property to another correct to conclude that the absence of
person for more than one year SPA (where one is required by law)
g. to Bind the principal to render some renders the contract entered into by
service without compensation virtue of said SPA void. The contract is
h. to bind the principal in a contract of merely unenforceable. (Dungo v
Partnership Lopena, 1962, citing Art. 1403(1), CC)
i. to Obligate the principal as a guarantor
or surety As to Nature and Effects
j. to create or convey Real rights over 1. Ostensible or Representativeagent acts in
immovable property the name and representation of the principal
k. to accept or repudiate an Inheritance 2. Simple or Commissionagent acts in his
l. to Ratify or recognize obligations own name but for the principals account
contracted before the agency 3. Agency by Estoppelthere is no agency,
m. any other act of Strict dominion and the alleged agent seemed to have
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
AGENCY
ratification within his scope of authority.
v. He must have had Knowledge of [National Bank v Agudelo, 1933;
material facts. Rural Bank of Bombon v CA, 1992]
b. Effects of ratification
i. With respect to the agent: It relieves 3. Agent may still be sued even if principal is
the agent from liability. He may also undisclosed and contract involved things
recover compensation belonging to the principal.
ii. With respect to the principal: He Even if the principal is undisclosed and
assumes responsibility for the the contract involved things belonging to
unauthorized act, as fully as if the the principal, the third person who
agent had acted under original contracted with the agent has a right of
authority; but he is not liable for acts action not only against the principal but
outside the authority approved by also against the agent, when the rights
his ratification. and obligations which are the subject
iii. With respect to 3rd persons: They matter of the litigation cannot be legally
are bound by ratification. They and juridically determined without
cannot question agents authority. hearing both of them. In such case, the
agent being a necessary party to the full
Ratification Estoppel and complete determination of the case
Rests on intention Rests on prejudice which originated from his act should be
Affects the entire Affects only relevant included in the case as defendant.
transaction from the parts of the transaction. [Beaumont v Prieto, 1921]
beginning.
Chapter II. Obligations of the Agent II. To Act Within the Scope of His
Authority [Art. 1881, CC]
I. TO CARRY OUT THE AGENCY
II. TO ACT WITHIN THE SCOPE OF HIS Authority is the power of the agent to affect the
AUTHORITY legal relations of his principal by acts done in
III. TO ADVANCE NECESSARY FUNDS accordance with the principals manifestations of
IV. TO ACT IN ACCORDANCE WITH consent.
INSTRUCTIONS
V. TO PREFER PRINCIPALS INTEREST OVER
PERSONAL INTEREST When agent acting within the scope of his
VI. NOT TO LOAN TO HIMSELF WITHOUT authority
PRINCIPALS CONSENT 1. When he is performing acts which are
VII. TO RENDER ACCOUNT AND DELIVER conducive to the accomplishment of the
THINGS RECEIVED BY VIRTUE OF AGENCY purpose of the agency [Art. 1881, CC]
VIII. TO BE RESPONSIBLE FOR SUBSTITUTES 2. If the agency has been performed in a
IX. TO PAY INTEREST manner more advantageous to the principal
X. TO ANSWER FOR HIS FRAUD/NEGLIGENCE
than that specified by him [Art. 1882, CC]
XI. SPECIAL OBLIGATIONS OF
FACTOR/COMMISSION AGENTS 3. Insofar as third persons, when the agents
act is within the terms of the power of
attorney, as written, even if the agent has in
I. To Carry Out the Agency fact exceeded the limits of his authority
Obligation to carry out the agency he according to an understanding between the
accepted [Art. 1884, CC] principal and the agent. [Art. 1900, CC]
1. The agent is bound by his acceptance to
carry out the agency own Note:
rd
2. He shall be liable for damages that the 1. A 3 person with whom the agent wishes to
principal may suffer due to his non- contract on behalf of the principal may
performance [Art. 1884, CC] require the presentation of a power of
attorney or the principals instructions [Art. 348
Exception: An agent shall not carry out an 1902, CC]
AGENCY
agency if its execution would manifestly result in 2. The scope of the agents authority is what
loss or damages to the principal. [Art. 1888, CC] appears in the written terms of the power of
attorney. While third persons are bound to
Obligation to finish business began on inquire into the extent or scope of the
principals death [Art. 1884, CC] agents authority, they are not required to go
The agent must finish the business already beyond the terms of the written power of
begun on the death of the principal, should attorney. [Siredy Enterprises, Inc. v CA,
delay entail any danger 2002]
Obligation should he decline the agency [Art. Effect when agent acts within the scope of
1885, CC] his authority
1. He is bound to observe the diligence of a 1. General Rule The agent who acts as such
good father of a family in the custody and is not personally liable to the party with
preservation of the goods forwarded to him whom he contracts
by the owner until the latter should appoint 2. Exceptions
an agent or take charge of the goods a. If he expressly bound himself [Art. 1897,
2. However, the owner must act as soon as CC]
practicable either by appointing an agent or b. If he exceeds the limits of his authority
by taking charge of the property without giving such party sufficient
notice of his powers [Art. 1897, CC]
Obligation to continue agency should he c. If he acted in his own name; except if
withdraw [Art. 1929, CC] the contract involves things belonging to
The agent, even if he should withdraw from the principal [Art. 1883, CC]
the agency for a valid reason, must continue
to act until the principal has had reasonable
opportunity to take the necessary steps to
meet the situation.
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the AGENT
AGENCY
Effect when agent acts in accordance with
principals orders VI. To Render Accounts and Deliver
Principal cannot set up the ignorance of the Things Received by Virtue of the
agent as to circumstances whereof he Agency
himself was, or ought to have been aware
[Art. 1899, CC] Obligation to account and deliver [Art. 1891,
CC]
Authority v Instructions Every agent is bound to:
Authority Instructions 1. render an account of his transactions; and
The sum total of the Only a private rule of 2. deliver to the principal whatever he may
powers committed or guidance to the agent have received by virtue of the agency, even
permitted to the agent though it may not be owing to the principal.
Relates to the subject Refers to the manner
(biz/transaction) with or mode of agents
Effect of failure to comply
which the agent is action with respect to
empowered to deal or matters within the If he fails to do so or uses the
act. permitted scope of money/property for his own use, the agent is
action. liable for estafa [Art. 315, RPC]
Limits of authority to Binding only on the
operate vs those who principal and agent Contrary stipulation void
have/are charged with Every stipulation exempting the agent from
knowledge of them. the obligation to render an account shall be
void [Art. 1891, CC]
AGENCY
1. the sums he has applied to his own use from deemed to have been made for cash
the day on which he did so insofar as the principal is concerned.
2. those which he owes after the 5. To indemnify principal for damages for
extinguishment of the agency failure to collect the credits of his principal
when they fall due [Art. 1908, CC]
IX. To Answer for His Negligence or General Rule:
Fraud [Art. 1909, CC] The commission agent who does not
collect the credits of his principal at the
The agent is responsible not only for fraud, but time when they become due and
also for negligence demandable shall be liable for damages
Exception
Liability shall be judged with more or less rigor If he proves that he exercised due
by the courts, according to whether the agency diligence for that purpose
was or was not for a compensation 6. When he receives a guarantee commission
(del credere commission) [Art. 1907, CC]
X. Special Obligations of Factor/ a. Bear the risk of collection
Commission Agents b. Pay the principal the proceeds of the
sale on the same terms agreed upon
Definition with the purchaser
one whose business is to receive & sell
goods for a commission, and is entrusted by Ordinary Agent v Commission Agent
the principal with its possession [Mechem Ordinary Agent Commission Agent
on Agency] Acts for and in Acts in his own name or
behalf of the in that his principal.
principal.
Obligations of a commission agent Need not have Must be in possession
1. For goods received [Art. 1903, CC] possession of the of the goods of the
a. He shall be responsible for the goods goods of the principal.
received by him in the terms and principal.
conditions and as described in the
consignment
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the AGENT
351
AGENCY
CIVIL LAW REVIEWER Chapter III. LIABILITIES of the AGENT
NoteWhen an agent contracts in his Exception: The agent should base his
own name and without the express withdrawal upon the impossibility of
authority of his principal, the obligation continuing the performance of the agency 352
so contracted by him is personal and is without grave detriment to himself.
AGENCY
not binding on his principal. [PNB v.
Agudelo] Liability of agent for acts of substitute under
Art. 1892, CC
BUT Third persons cannot set up the The agent shall be responsible for the acts of the
fact that the agent has exceeded his substitute:
powers if the principal has ratified, or 1. when he was not given the power to appoint
has signified his willingness to ratify the one; or
agents acts [Art. 1901, CC] 2. when he was given such power, but without
designating the person, and the person
4. Under Art. 1898, CC appointed was notoriously incompetent or
a. Agent contracts in the name of the insolvent.
principal;
b. He exceeds the scope of his authority; Principal may bring an action against the
c. The party with whom he contracted with substitute with respect to the obligations which
is aware of the limits of his powers; AND he has contracted under the substitution. [Art
d. The agent undertook to secure the 1893, CC]
principals ratification.
All acts of the substitute appointed against the
Note Under Art. 1898, CC, the contract prohibition of the principal is void. [Art 1893, CC]
shall be void if the principal does not ratify
the contract and the party with whom the Responsibility for fraud or negligence
agent has contracted is aware of the limits of The agent is responsible not only for fraud,
the powers granted by the principal. but also for negligence, which shall be
judged with more or less rigor by the courts,
Agent liable for damages to third persons according to whether the agency was or was
under Art. 1916 & 1917, CC not for compensation. [Art. 1909, CC]
1. When two persons contract with regard to
the same thing, one of them with the agent
and the other with the principal;
CIVIL LAW REVIEWER Chapter III. LIABILITIES of the AGENT
AGENCY
implied consent of the principal [Art 1905,
CC]
SPECIFIC OBLIGATIONS OF THE PRINCIPAL Liability of Principal for Tort of Agent [Art.
[CARICS] 1910, CC]
3. to Comply with the obligations contracted by the The principal is civilly liable to third persons
agent for torts of an agent if he commit such in the
4. To Advance necessaty sums and Reimburse the course and within the scope of the agency.
agent
5. To Indemnify agent for damages
6. To pay the agents Compensation Agents negligence or disobedience to the
7. be Solidarily liable principal does not relieve him from liability,
even if he had no knowledge about the tort.
AGENCY
Liability of Joint Principals: Solidary [Art
Obligations principal is bound to comply 1915]
with Each principal may be sued by the agent for
1. obligations which the agent may have the entire amount due, not just for
contracted within the scope of his authority proportionate shares.
[Art. 1910, CC]
Any of the principals may revoke the agency
Note: Principal is directly liable to creditor for
debt incurred by agent acting within the Requisites of Solidary Liability:
scope of his authority. That the agent also a. Two or more principals
bound himself personally does not relieve b. All principals concurred in the
principal from liability if the debt was appointment of the same agent
incurred for his benefit. [Tuason v. Orozco] c. Agent was appointed for a common
undertaking
2. obligations which the agent may have
contracted beyond the scope of his authority Rules on Double Sale by Principal and Agent
but were ratified expressly or tacitly by the [Art. 1916-1917]
principal [Art. 1910, CC] General Rule:
1. When two persons contract with regard to
Note: Conditions for ratification (CaP-DECK) the same thing, one of them with the agent
a. The principal must have Capacity and and the other with the principal
Power to ratify. 2. two contracts are incompatible with each
b. The act must be Done in behalf of the other
principal 3. the agent acted in good faith
c. He must ratify the acts in its Entirety 4. the principal shall be liable for damages to
d. The act must be Capable of ratification the third person whose contract must be
e. He must have had Knowledge of rejected
material facts.
In case of double sale, which contracts are
incompatible with each other, that of PRIOR
CIVIL LAW REVIEWER Chapter IV. OBLIGATIONS of the PRINCIPAL
DATE shall be preferred, without prejudice to Art Obligation to reimburse [Art. 1912, CC]
1544. 1. Should the agent have advanced sums, the
principal must reimburse him even if the
Art. 1544 provides that: business or undertaking was not successful,
a. If the same movable property is sold to provided the agent is free from all fault.
different persons, ownership is 2. The reimbursement shall include interest on
transferred to whoever first took the sums advanced, from the day on which
possession in good faith. the advance was made.
b. If it be immovable, ownership belongs to
the person who in good faith first Exceptions to obligation to reimburse
recorded it in the Registry of Property. [Art.1918] (FCKS)
c. If there is no inscription, ownership shall 1. When the expenses were due to the Fault of
belong to the person who, in good faith the agent;
was first in possession; and in the 2. If the agent acted in Contravention of the
absence of such, to the one who principal's instructions, unless the latter
presents the oldest title, provided there should wish to avail himself of the benefits
is good faith. derived from the contract;
3. When the agent incurred them with
Principal not liable in the following cases Knowledge that an unfavorable result would
1. Void or inexistent contracts under Art. 1409, ensue, if the principal was not aware
CC thereof;
2. Sale of a piece of land or any interest 4. When it was Stipulated that the expenses
therein & the authority of the agent is not in would be borne by the agent, or that the
writing [Art. 1874, CC] latter would be allowed only a certain sum.
3. Acts of the substitute appointed against the
prohibition of the principal [Art. 1892, CC] Note: Under Art. 1236(2), CC:
4. Art. 1898, CC whoever pays for another may demand
Requisites: from the debtor what he has paid, except 355
a. agent contracts in the name of the that if he paid without the knowledge or
AGENCY
principal against the will of the debtor, he can recover
b. he exceeds the scope of the his only insofar as the payment has been
authority beneficial to the debtor.
c. the principal does not ratify the contract
d. the party with whom the agent Agents right to retain in pledge object of
contracted is aware of the limits of the agency should principal fail to reimburse him
powers granted by the principal; and 1. The agent may retain in pledge the things
i. the agent did not undertake to which are the object of the agency until the
secure the principals ratification principal:
5. Agent has no authority or acted beyond the a. effects the reimbursement set forth in
scope of his authority [Arts. 1403(1); 1910, Art. 1912, CC; and
CC; Dungo v Lopena, 1962] b. pays indemnity set forth in Art. 1913, CC
6. When the agent acts in his own name, 2. But agent is not entitled to the excess in
persons with whom the agent has case the thing was sold to satisfy his claim,
contracted have no right of action against and the proceeds are more than his claim
the principal, except when the contract [Arts. 2115, 2121, CC]. Also he must
involves things belonging to the principal. possess the thing lawfully in his capacity as
[Art. 1883, CC] agent [2 C.J.S. 457]
7. Unenforceable contracts under Art. 1403,
CC III. To Indemnify the Agent for Damages
II. To Advance the Necessary Sums and Obligation to pay indemnity for damages
Reimburse the Agent [Art. 1913, CC]
The principal must indemnify the agent for
Obligation to advance sums [Art. 1912, CC] all the damages which the execution of the
The principal must advance to the agent, agency may have caused the latter, without
should the latter so request, the sums fault or negligence on his part.
necessary for the execution of the agency.
CIVIL LAW REVIEWER Chapter IV. OBLIGATIONS of the PRINCIPAL
The agents has the right to retain in pledge the act as though he had full powers. [Art. 1911,
object of the agency should principal fail to pay CC]
the indemnity set forth in Art. 1913, CC.
With person who appointed an agent with
IV. To Pay the Agents Compensation him for a common transaction
If two or more persons have appointed an
agent for a common transaction or
Agency is presumed to be for a compensation,
undertaking, they shall be solidarily liable to
unless there is proof to the contrary. [Art. 1875,
the agent for all the consequences of the
CC]
agency. [Art. 1915, CC]
General Rule on Commission
The agent must be the efficient procuring
cause in order to be entitled to
compensation [Inland Realty v. Court of
Appeals]. His efforts must have resulted in
finding a ready, able and willing buyer of the
goods.
Compensation of Brokers
Since the brokers only job is to bring
together the parties to a transaction, it 356
follows that if the broker does not succeed in
AGENCY
bringing the mind of the purchaser and the
vendor to an agreement with reference to
the terms of a sale, he is not entitled to a
commission. [Rocha v Prats, 1922]
V. To Be Solidarily Liable
AGENCY
performance of the agency without grave
If no time is specified, Art. 1197 shall apply. detriment to himself. [Art. 1928, CC]
The courts may fix the period as under the
circumstances have been probably 2. The agent, even if he should withdraw from
contemplated by the parties. the agency for a valid reason, must continue
to act until the principal has had reasonable
Period may be implied from terms of opportunity to take the necessary steps to
agreement, purpose of agency, and the meet the situation. [Art. 1929, CC]
circumstances of the parties
IV. Accomplishment of the object of the
II. Death, civil interdiction, insanity, agency
insolvency Between principal and agent, the fulfilment
of the purpose for which agency was
Death extinguishes agency created ipso facto terminates agency even if
General Rule: Death extinguishes agency it be expressly made irrevocable. If the
purpose has not been accomplished, the
Exceptions: agency continues indefinitely for as long as
1. Agency coupled with an interest the intent to continue is manifested through
a. Interest common to principal and agent; words or actions of the parties
or
rd
b. Interest of a 3 person who has V. Revocation
accepted the stipulation in his favor. [Art.
1930, CC] Principal may revoke the agency at will as a
2. Anything done by the agent, without general rule
knowledge of the death of the principal or of General Rule:
any other cause which extinguishes the The principal may revoke the agency at will,
agency, is valid and fully effective with and compel the agent to return the
rd
respect to 3 persons who may have document evidencing the agency. Such
CIVIL LAW REVIEWER Chapter V. EXTINGUISHMENT of AGENCY
revocation may be express or implied. [Art. agent, as regards the special matter
1920, CC] involved in the latter [Art. 1926, CC]
d. In all three cases, there is implied
Exceptions: revocation only where the new
1. The right of the principal to terminate the appointment is incompatible with the
authority of his agent is absolute and previous one.
unrestricted, except only that he may not do
so in bad faith [Danon v Brimo, 1921] When revocation makes principal liable for
2. Agency is coupled with an interest [Art. damages
1927, CC] 1. If there is a period stipulated in the agency
a. A bilateral contract depends upon it contract, the agent may still revoke the
b. It is the means of fulfilling an obligation agents authority at will; but principal will be
already contracted; liable for damages.
c. Partner is appointed manager of a 2. No period fixed: principal liable if the agent
partnership in the contract of partnership can prove the former acted in bad faith.
and his removal from the management
rd
is unjustifiable. Effect of revocation with respect to 3
persons [Arts. 1921-1922,CC]
Note:
1. Powers of attorney falling under 1927 Agency to contract Agency to contract
cannot be revoked at the pleasure of the with specific with general public
principal, but may be revoked for a just persons
rd
cause, such as when the attorney-in-fact Wont prejudice 3 Wont prejudice those
betrays the interest of the principal. persons until notice is in good faith & w/o
given them. knowledge.
(Coleongco v Claparols, 1964)
Notice must be Notice must be
2. A mere statement in the power of attorney personal. published (Arts. 1873,
that it is coupled with an interest is not 1922).
enough. In what does such interest consist 358
must be stated in the power of attorney. (Del Revocation in case of solidary principals
AGENCY
Rosario v Abad, 1958) [Art. 1925, CC]
3. Irrevocability of the contract cannot affect When two or more principals have granted a
3rd persons and is obligatory only on the power of attorney for a common transaction,
principal who executed the agency. (New any one of them may revoke the same
Manila Lumber v Republic, 1960) without the consent of others.
Revocation may be express or implied Notice of Revocation as against third
1. Expressprincipal clearly and directly persons
makes a cancellation of the authority of the 1. If agent had general powers:
agent in writing or orally Revocation DOES NOT prejudice third
2. Implied persons who acted in good faith and
a. The appointment of a new agent for the without knowledge of the revocation
same business or transaction revokes
the previous agency from the day on Notice of revocation in a newspaper of
which notice thereof was given to the general circulation is a sufficient warning
former agent, without prejudice to the to third persons
provisions Art. 1921 and Art. 1922, CC
[Art. 1923, CC] 2. If agency is for the purpose of contracting
b. The agency is revoked if the principal specified persons: to prejudice persons
directly manages the business entrusted specified, they must be given actual notice.
to the agent, dealing directly with third
persons. [Art. 1924, CC]
VI. Dissolution of the firm/corp. Which
c. A general power of attorney is revoked
by a special one granted to another entrusted/accepted the agency
- end of Agency -
CIVIL LAW REVIEWER TABLE of CONTENTS
PARTNERSHIP
Table of Contents
PARTNERSHIP
III. Bound by Notice Partner ...................370
IV. Liable for Acts of the Partnership......370
ACADEMICS COMMITTEE
Art. 1767. By the contract of partnership two or
Kristine Bongcaron
more persons bind themselves to contribute
Michelle Dy
Patrich Leccio money, property, or industry to a common fund,
Editors-in-Chief with the intention of dividing the profits among
themselves.
PRINTING & DISTRIBUTION Two or more persons may also form a
Kae Guerrero partnership for the exercise of a profession.
(1665a)
DESIGN & LAYOUT
Pat Hernandez
Viktor Fontanilla
Rusell Aragones
I. Essential Features
Romualdo Menzon Jr. 1. A mutual contribution of money, property, or
Rania Joya industry to a common fund;
2. With the intention of dividing profits among
LECTURES COMMITTEE
themselves
Michelle Arias Note: The object must be for profit and
Camille Maranan not merely for common enjoyment; 361
Angela Sandalo otherwise only a co-ownership has been
PARTNERSHIP
Heads
formed.
Katz Manzano Mary Rose Beley 3. The parties must have legal capacity.
Sam Nuez Krizel Malabanan
Arianne Cerezo Marcrese Banaag Exception: corporation cannot become a
Volunteers partner on grounds of public policy.
4. It has a separate juridical personality (Art.
MOCK BAR COMMITTEE 1768, CC) apart from the separate
Lilibeth Perez personality of each of the member.
Note: Associations and societies, whose
BAR CANDIDATES WELFARE articles are kept secret among the
Dahlia Salamat members, and wherein any one of the
members may contract in his own name
LOGISTICS with third persons, shall have no
Charisse Mendoza
juridical personality, and shall be
governed by the provisions relating
SECRETARIAT COMMITTEE to co-ownership. (Art. 1775, CC)
Jill Hernandez
Head
Although not a juridical entity, it may still
be sued by third persons under the
Loraine Mendoza Faye Celso
common name it uses. (Sec. 15, Rule 3,
Mary Mendoza Joie Bajo
Members Rules of Court)
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
PARTNERSHIP
agreement of the
parties; upon the to keep the
May be organized by Requires at least 5 duration is set thing
only two persons incorporators; by law undivided, not
Juridical personality Personality commences from exceeding ten
commences from SECs issuance of the years, shall be
the moment of certificate of incorporation valid. (Art. 494,
execution of the CC)
contract of
Transfer of Need A co-owner can
partnership
Interests unanimous dispose of his
May exercise any Can exercise such powers
power authorized by expressly granted by law or consent of share without
the partners as long incident to its existence partners to the consent of
as it is not contrary make the others
to law, etc. assignee of
If no agreement as Power to do business is interest a
to mgt. - every vested in the board of partner
partner is an agent directors/ trustees Power to A partner may A co-owner
of the partnership act with bind the cant represent
A partner as such Suit against the board/director Third partnership the co-
may sue a co- who mismanages must be
partner who brought in the corp.s name
Persons ownership
mismanages Dissolution Death or Death or
Has no right of Has right of succession incapacity of a incapacity of a
succession partner co-owner does
The partners are The stockholders are liable to dissolves the not dissolve the
liable personally and the extent of the shares partnership co-ownership
subsidiarily for subscribed by them Representa- There is There is no
partnership debts tion mutual agency mutual agency
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
PARTNERSHIP
d. As Interest on a loan, though the b. Effect: The rights and duties of the
amount of payment vary with the profits partners remain the same as they were
of the business; and at such termination, so far as is
e. As the consideration for the sale of consistent with a partnership at will
goodwill of a business or other property (1785)
by instalment or otherwise.
VII. Kinds of Partnerships
V. How Partnership is Formed
As to legality of existence
1. Form of Contract 1. De jure has complied with all the
General Rule: The contract may be necessary requisites for lawful
constituted in any form (Art. 1771, CC) establishment (Arts. 1772, 1773, CC)
2. De facto failed to comply with the
Exceptions requisites
a. Where immovable property or real rights
are contributed (Art. 1771, CC) As to its object
i. The contract must appear in a public 1. Universal (Art. 1777, CC)
instrument (1771) a. As to all present property (Art. 1778,
ii. It must have an inventory of such CC)
immovable property signed by the Partners contribute all their properties to
parties and attached to the a common fund with the intention of
instrument (1773) dividing them among themselves as well
b. Where the capital is at least P3,000, in as all the profits they may acquire
money or property
i. The contract must appear in a public Includes all properties which belonged
instrument which must be recorded to each partner at the time of the
CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY
PARTNERSHIP
d. A person and a public officer (or his
wife, descendants, ascendants) by
reason of his office
PARTNERSHIP
losses as as to losses
between
partners but it 2. if none,
is liable to 3rd the
persons without agreement
prejudice to as to profits
reimbursement
from the 3. if none,
capitalist pro rata to
partners contribution
Partnership by Estoppel
1. Requisites of Partner By Estoppel:
a. The person
represents himself as a partner of
an existing partnership or of two or
more persons not actual partners, or
consents to another representing
him as a partner of an existing
partnership or of two or more
persons not actual partners
b. Third person relied on the
misrepresentation, unaware of the
deception.
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the PARTNERSHIP
PARTNERSHIP
2. When money or property has been received
Note: If breached by a partner for a specific purpose and he
Partnership may recover indemnity from later misappropriated it, such partner is
contributing partner. guilty of estafa. (Liwanag v CA, 2008)
2. Liable for fruits from the time they should Bring to partnership capital credit received
have been delivered without need of any Equal contribution by general partners:
demand (Art. 1786, CC) capitalist partners shall contribute equal
shares to the capital of the partnership (Art.
3. Other duties of contributing partners: 1790, CC).
a. to preserve the property with the
diligence of a good father of a family Obligation of capitalist partner to contribute
(Art. 1163, CC) additional capital
b. to indemnify the partnership for 1. To contribute additional capital in case of
damages caused to it by delay in imminent loss, requisites:
contribution of property (Art. 1170, CC) a. There is an imminent loss of the
business
4. Risk of loss of things contributed (Art. 1795, b. There is a need to contribute additional
CC) capital to save the venture
a. Borne by the partner who owns them c. Capitalist partner refuses deliberately to
If they are not fungible, so that only contribute an additional share
their use and fruits may be for the d. There is no agreement to the contrary
common benefit 2. If refused to contribute: the partner must sell
b. Borne by the partnership his interest in the partnership to the other
If the things contributed are: partners (Art. 1791, CC)
i. fungible; 3. Industrial partner is exempted from
ii. cannot be kept without deteriorating; contributing.
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the PARTNERSHIP
Obligation of managing partner who is also a 2. Right to manage may either be:
creditor of the same partnership debtor a. exercised by all the partners, or
1. Requisites: b. limited to a certain number of partners
a. 2 separate credits, both demandable, called managing partners
b. one credit is owed to the partnership,
c. the other to the collecting partner whos If a specific person has been appointed as
a managing partner. manager (Art. 1800, CC)
2. Managing partner should: 1. If right is conferred in the articles of
a. If issued receipt for own account only partnership
apply the sum to the 2 credits in a. Manager may execute all acts of
proportion to their amounts administration despite the opposition of
b. Issued receipt for partnerships account other partners unless he is in bad faith
apply whole sum to partnerships b. Power is irrevocable without just or
credit (Art. 1792, CC) lawful cause.
Note: The vote of the controlling
When the partner who has received, in whole interest of the partners is necessary
or in part, his share of a partnership credit for revocation.
Partner shall give to the partnership what he 2. If power is granted after constitution of
received if: partnership, it may be revoked at anytime
1. a debtor made a partial payment of his debt
to the partnership If two or more partners are appointed as
2. a partner received his share of the credit managers
and the others havent 1. Without specification of their duties or
3. the debtor later becomes insolvent, (Art. without a stipulation of how each one will
1793, CC). act-- (Art. 1801, CC)
4. Cf. 1792: in 1793 theres only 1 debt where a. Each one may separately execute all
the partnership is the creditor acts of administration
b. If opposed, decision of majority prevails
c. In case of a tie, the matter is to be
decided by the controlling interest.
2. If there is a stipulation that managers must
II. Pay Damages act jointly (Art. 1802, CC)
367
PARTNERSHIP
a. The concurrence of all managers is
Liability for damages due to partners fault necessary for validity of the acts
The damages cannot be compensated with b. Their absence or disability cannot be
the profits and benefits he may have earned alleged as a defense unless there is
for the partnership by his industry (Art. imminent danger or grave or irreparable
1794, CC). injury to the partnership.
Mitigation of liability If the manner of management has not been
The courts may equitably lessen his agreed upon (Art. 1803, CC)
responsibility if through his extraordinary 1. All partners are considered agents and the
efforts in other activities unusual profits have act of anyone bind the partnership without
been realized (Art. 1794, CC) prejudice to Art. 1801
2. To make important alterations in the
Before a partner may sue another for immovable property of the partnership, even
alleged fraudulent management and if useful, need the consent of all the partners
resultant damages, a liquidation must first
be effect to determine the extent of the If refusal to give consent is manifestly
damage. Without liquidation of partnership prejudicial to the partnership, the courts
affairs, partner cannot claim damages. intervention may be sought
(Soncuya v. De Luna)
Every partner is considered an agent (Art.
III. Manage the Partnership 1818, CC)
General Rule:
General Rules Every partner is considered an agent of the
1. Right of management is primarily governed partnership for the purpose of its business
by agreement of the partners as provided in and any act of the agent for apparently
the articles of partnership (Art. 1800, CC)
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the PARTNERSHIP
PARTNERSHIP
7. Submit a partnership claim or liability to subsidiary liability to 3 persons (La Compania
arbitration; Maritima v Munoz, 1907).
IV. Render Full Information While the liability of the partners is joint in
transactions entered into by the partnership, a
rd
3 person who transacted with the partnership
Duty to give information:
can hold partners solidarily liable for the whole
1. On demand, to give true and full information rd
obligation if the 3 persons case falls under
of all things affecting the partnership to any
Arts. 1822-1823 (Muasque v. CA, 1985)
partner or their legal representatives (Art.
1806, CC).
However, any party may enter into a separate
2. Voluntary disclosure of material facts within
obligation to perform a partnership contract.
his knowledge relating to/affecting
(Art. 1816, CC)
partnership affairs (Art. 1821, CC).
Stipulation against pro-rata liability void
V. Account for benefits 1. General Rule: Stipulation against pro rata
Duty to account (Art. 1807, CC) liability is void
Every partner must: 2. Exception:such stipulation is valid among
1. Account to the partnership for any benefit; the partners (Art. 1817, CC)
AND
2. Hold as trustee for it any profits derived by Art. 1817 vs. 1799
him without the consent of the other partners it is permissible to stipulate among partners
from any transaction connected with the that a capitalist partner will be exempted
formation, conduct or liquidation of the from liability in excess of the original capital
partnership contributed; but wont be exempted insofar
as his capital is concerned (Paras).
CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the PARTNERSHIP
PARTNERSHIP
rd
d. 3 person is not a partner (Art. 1822,
CC);
2. Misappropriation of one partner (Art. 1824,
CC)
a. partner acts within the scope of his
apparent authority
b. when partner in the course of business,
receives money or property and the
same is misapplied by the partner while
in the custody of the said partner.
Extent of liability
firm is liable to the same extent as the
partner (Art. 1822, CC) and all partners are
solidarily liable with the firm (Art. 1824, CC)
CIVIL LAW REVIEWER Chapter III. OBLIGATIONS as to THIRD PERSONS
PARTNERSHIP
in the firm name unless An industrial partner is liable to third persons
1. It is also the surname of a general partner but as between the partners, he is not liable
2. Before the limited partner became such, the for losses (Art. 1797, CC)
business had been carried on under a name Partners are individually liable after
in which his surname appeared (Art. 1846, partnership assets are exhausted
CC)
Contracts for which partners are liable pro
rata with their individual property
II. Bound by Partnership Admission 1. those entered into in the name and account
of the partnership
Requisites to be admissible against the 2. entered into under its signature
partnership 3. entered into by a person authorized to act
1. it must be connected with partnership affairs for the partnership
2. it is within the scope of the partners Exception: partner may enter into a
authority (Art. 1820, CC) separate obligation to perform a
3. it is made during the firms existence partnership contract.
2. Share of 2.If no profit Any partner shall have the right to a formal 371
purely industrial sharing account as to partnership affairs
PARTNERSHIP
partner is not stipulated - 1. If he is wrongfully excluded from the
fixed - as may losses shall be business/possession of the property by his
be just and borne according co-partners
equitable under to capital 2. If the right exists by agreement
the contribution 3. When the partner derives any profit as
circumstances
provided in Art. 1807
3.Purely
4. Whenever other circumstances render it just
industrial partner and reasonable (Art. 1809, CC)
not liable for
losses The right of a partner to demand an accounting
exists as long as the partnership exists. The
If the partners agreed to entrust to a third prescription period begins to run only upon the
person the designation of the share in profits dissolution when the final accounting is done
and losses (Art. 1798, CC) (Fue Leung v. IAC,1989).
Designation may only be impugned if
manifestly inequitable
Even if manifestly inequitable, the V. Property Rights
designation cannot be impugned in the
following instances: Property rights (Art. 1810, CC)
a. The aggrieved partner has already 1. In the specific partnership property
begun to execute the decision 2. In the partnership, and
b. If he has not impugned within three 3. To participate in the management
months from the time he had knowledge
of it
CIVIL LAW REVIEWER Chapter IV. RIGHTS of PARTNERS
PARTNERSHIP
3. hold the title to partnership property in his 1. their separate property
own name without having it belong to him 2. with partnership property, with the consent
of all partners whose interests are not
Property acquired by a partner with charged/sold (Art. 1814, CC)
partnership funds
General Rule: partnership property VI. Convery Real Property (Art. 1819, CC)
Exceptions:
1. contrary intention appears
Title in Conveyance passes title but
2. property was acquired after dissolution but partnership partnership can recover unless:
before winding up name: 1. The partner who sold it
Any partner was carrying on in the
Partners interest in the partnership may convey usual way the business of
his share in the profits and surplus (Art. 1812, under the partnership hence
CC). This may be assigned, attached, subject to partnership binding the partnership; or
payment of support as there was already a name
liquidation of the partnership affairs. The 2. Buyer had no knowledge
of the lack of authority of
assignee is only entitled to the profits assigned.
the seller
Conveyance of partners entire interest Title in Conveyance does not pass title
It does not dissolve the partnership (Art. 1813, partnership but only equitable interest.
CC) name: Provided that: The partner who
Conveyance in sold it was carrying on in the
partner's name usual way the business of the
partnership hence binding the
partnership
CIVIL LAW REVIEWER Chapter IV. RIGHTS of PARTNERS
373
PARTNERSHIP
CIVIL LAW REVIEWER Chapter V. RIGHTS of the PARTNERSHIP
I. Acquire Immovables
An immovable property or any interest
therein may be acquired in the partnership
name, and title so acquired can only be
conveyed in the partnership name (Art.
1774, CC).
Cf Art. 1819: see table
374
PARTNERSHIP
CIVIL LAW REVIEWER Chapter VI. DISSOLUTION and WINDING UP
PARTNERSHIP
(Testate Estate of Mota v. Serra, 1925) Partnership is not bound by any act of a
partner when
1. dissolution is not by the act, insolvency or
II. Causes for Dissolution
death of a partner
Voluntary 2. dissolution is by such act, insolvency or
1. without violation of the agreement between death and the partners acting have
the partners (Art. 1830, CC) knowledge thereof
a. termination of the term or particular 3. acts not connected with winding up
undertaking
b. express will of any partner in good faith, Partnership is not bound with respect to
when the partnership is at will third persons (Art. 1834, CC)
c. express will of all partners who have not 1. business becomes unlawful
assigned their interests or suffered them 2. partner dealing with third party becomes
to be charged insolvent
d. bona fide expulsion of any partner in 3. partner has no authority to wind up
accordance with the agreement
2. in contravention of the agreement, by Partner can bind the partnership even after
express will of one partner dissolution (Art. 1834, CC)
effects partner is liable for damages; 1. acts appropriate to winding up
other partners may continue the 2. third person is in good faith and without
business knowledge of dissolution:
a. third person who extended credit to the
Involuntary (Grounds) partnership
1. business becomes unlawful b. third person who knew the existence of
2. specific thing promised perishes before the partnership
delivery to the partnership, the use and
CIVIL LAW REVIEWER Chapter VI. DISSOLUTION and WINDING UP
IV. Partners Liability 5. Not only the retiring partners but also the
new partnership itself which continued the
business of the dissolved one, are liable for
If partner transacts business with third
the debts of the prior partnership. A
persons notwithstanding death or insolvency rd
withdrawing partner remains liable to a 3
of a co-partner, liability shall be satisfied out
party creditor of the old partnership
of partnership assets alone if
(Singsong vs. Isabela Sawmill, 1979).
1. Partner was unknown as partner to third
person
2. Partner is unknown and inactive in
partnership affairs
PARTNERSHIP
c. When all but one partner retire and
assign their rights to the remaining
partner
d. Any partner retires or dies without any
assignment of his right in partnership
property
e. All the partners or their representatives
assign their rights in partnership
property to one or more third persons
who promise to pay the debts and who
continue the business of the dissolved
partnership
f. Any partner wrongfully causes a
dissolution
g. When a partner is expelled
PARTNERSHIP
property applied to the payment of the firms
without prejudice to any other right, entitled:
debt
a. To a lien on, or right of retention of, the
2. Surplus is applied to payment in cash of the
surplus of the partnership property after
net amount owed to the respective partners
satisfying the partnership liabilities to
third persons for any sum of money paid
Each partner who has not caused
by him for the purchase of an interest in
dissolution wrongfully shall have the right, as
the partnership and for any capital or
against each partner who has caused the
advances contributed by him;
dissolution wrongfully, to damages for
b. To stand, after all liabilities to third
breach of the agreement.
persons have been satisfied, in the
place of the creditors of the partnership
The partners who have not caused the
for any payments made by him in
dissolution wrongfully, if they all desire to
respect of the partnership liabilities; and
continue the business in the same name
c. To be indemnified by the person guilty of
either by themselves or jointly with others,
the fraud or making the representation
may do so, during the agreed term for the
against all debts and liabilities of the
partnership and for that purpose may
partnership.
possess the partnership property, provided
a. they secure the payment by bond
approved by the court, or IV. Right of Retiring/Deceased Partner
b. pay any partner who has caused the (Art. 1841, CC)
dissolution wrongfully, the value of his
interest in the partnership at the Factual Situation
dissolution, less any damages 1. any partner retires or dies, and
recoverable 2. the business is continued without any
c. In like manner indemnify him against all settlement of accounts as between him or
present or future partnership liabilities.
CIVIL LAW REVIEWER Chapter VII. RIGHTS of PARTNERS upon DISSOLUTION
Rights
1. he or his legal representative as against
such person or partnership may have the
value of his interest at the date of dissolution
ascertained
2. either:
a. receive as an ordinary creditor an
amount equal to the value of his interest
in the dissolved partnership with
interest; or,
b. at his option or at the option of his legal
representative, receive in lieu of interest,
the profits attributable to the use of his
right in the property of the dissolved
partnership;
PARTNERSHIP
When right accrues
At the date of dissolution, in the absence of
any agreement to the contrary.
CIVIL LAW REVIEWER Chapter VIII. RULES on SETTLEMENT
PARTNERSHIP
Order in case of insolvency of a partner or
his estate (in case of death)
1. Separate creditors
2. Partnership creditors
3. Partners who gave contributions
Liquidation needed
The business profits cant be determined by
taking into account the result of 1 transaction
instead of all the transactions had, thus the need
for a general liquidation before a partner may
claim a specific sum as his share of the profits
(Sison v. McQuaid, 1953).
PARTNERSHIP
6. EFFECT OF DEATH OF A LIMITED participate in mgt. not agreed in management
PARTNER management upon, all
7. PERSON ERRONEOUSLY general
BELIEVING HES A LIMITED partners have
PARTNER an equal right in
IV. GENERAL PARTNER business mgt
V. DISSOLUTION Contribution Cash, property Cash or
VI. SETTLING OF ACCOUNTS AFTER or industry property only,
DISSOLUTION not industry
Proper party Proper party to Not proper party
to proceedings to proceedings
I. Definition proceedings by/against by/against
by or against partnership partnership
Limited Partnership the unless:
partnership 1. he is also a
1. formed by two or more persons; general partner
2. in accordance with the requirements of law; 2. where the
and object of the
3. composed of one or more general partners proceedings is
and one or more limited partners (Art. 1843, to enforce a
CC). limited partner's
right against or
Limited partners are not bound by the liability to the
partnerships obligations (Art. 1843, CC). partnership
Name in firm Name may Name must
name appear in firm appear in firm
name name
CIVIL LAW REVIEWER Chapter IX. LIMITED PARTNERSHIP
PARTNERSHIP
name word Company the word Limited and the business is continued:
(SEC Memo Circ. (SEC Memo Circ. a. Under a right so to do stated in the
#14-00) unless its #14-00) certificate, or
a professional
b. With the consent of all members
partnership
6. Change in the character of business
7. False/erroneous statement in the cert.
Every partnership 8. Change in the time as stated in the cert. for
shall operate under The surname of a the dissolution of the partnership or return of
a firm name, which limited partner shall a contribution
may or may not not appear in the 9. Time is fixed for dissolution or return of a
include the name of partnership name contribution
one or more of the unless: 10. The Members want to change a statement in
partners.
the cert. to make it more accurate (Art.
(1) It is also the
surname of a 1864, CC)
general partner, or
Requirements to amend
(2) Prior to the time 1. Must be in writing, under oath, and set forth
when the limited clearly the change desired
partner became 2. Signed and sworn to by all the members,
such, the business including the new members and assigning
has been carried on members
under a name in
3. The cert., as amended, must be filed in the
which his surname
appeared. SEC (Art. 1865, CC)
CIVIL LAW REVIEWER Chapter IX. LIMITED PARTNERSHIP
When the certificate shall be cancelled b. Whose claims arose before such return.
1. When the partnership is dissolved Liabilities to partnership creditors and other
2. When all limited partners cease to be such partners
(Art. 1864, CC) 1. Contributes services (Art. 1845, CC); Effect
a. The limited partner:
Requirements to cancel o Will be considered an industrial and
1. Must be in writing general partner; or
2. Signed by all the members o If the certificate states that hes a
3. Filed with the SEC; if cancellation is court- limited partner, he will be a general
ordered, a certified copy of the order shall partner and limited partner at the
also be filed (Art.1865, CC) same time.
b. He divests himself of the privilege of
III. Limited Partner limited liability and will be exposed to all
the liabilities of a general partner.
2. Surname in firm name (Art.1846, CC)
Who may be limited partners
General rule: the surname of a limited
1. A partnership no
partner shall not appear in the partnership
2. A general partnership may be changed into
name
a limited one, and a partner in the former
If used in firm name, he is liable as a
general partnership may be a limited partner
general partner to creditors who did
in the limited partnership formed.
not know that he is not a general
partner.
Contribution
3. False statement (Art. 1847, CC)
May be cash or property, but not services.
If a person suffers loss by reliance on the
false statement in the certificate, he may
Liabilities of a Limited Partner
hold liable any party to the certificate who
General rule: He is not liable as a general
knew the statement to be false:
partner. His liability is limited to the extent of
a. At the time he signed the certificate, or
his contribution to the partnership.
b. Subsequently but within a sufficient time
before the reliance to enable him to
Liabilities to the partnership (Art. 1858, CC)
amend or cancel the certificate
1. Difference between his actual contribution
4. Control of business (Art. 1848, CC)
382
and that stated in the certificate as having
PARTNERSHIP
a. He becomes liable as a general partner
been made
without acquiring the rights of one.
2. Unpaid contributions which he agreed to
b. Control here contemplates active
make at specified future time and on the
participation in the business and not just
conditions stated in the certificate
having the option to exercise control.
5. Prohibited Transactions (Art. 1854, CC)
Liabilities as Trustee for the Partnership
a. Prohibited transactions of limited
1. Specific property which he committed but
partners:
did not contribute, or which he contributed
Receiving or holding as collateral
but was wrongfully returned to him
security any partnership property
2. Money or property wrongfully paid or
Receiving any payment,
conveyed to him
conveyance, or release from liability
rd
if it will prejudice the rights of 3
Liabilities of a limited partner can be waived
persons
or compromised only by the consent of all
b. If prohibited acts are performed
the members. However, this too shall not
Presumption of fraud on the
affect the right of the creditor who:
creditors.
a. Extended credit; or
But the law does not absolutely
b. Whose claim arose after the filing and
prohibit the taking as collateral
before a cancellation or amendment of
security of the property, as the
the certificate.
prohibitions are modified by the
Even if a limited partner rightfully received
requirement of sufficient assets to
back his contribution to capital, he remains
discharge the partnership
liable to the partnership for any sum
obligations.
necessary to discharge the liabilities of the
partnership to creditors who:
a. Extended credit or
CIVIL LAW REVIEWER Chapter IX. LIMITED PARTNERSHIP
PARTNERSHIP
at the principal place of business property is insufficient for payment
b. Inspect and copy any of the books and the limited partner would
c. Demand true and full info of all things otherwise be entitled to the return of
affecting the partnership his contribution
d. Demand a formal account whenever e. In case of several limited partners:
circumstances render it just and Members may agree to give priority
reasonable to one or more limited partners, and
e. Resort to the court for the dissolution This must be stated in the certificate
and winding up of the business of partnership. The preference
f. Receive a share of the profits or other covers
compensation by way of income o Return of contributions;
g. Demand the return of his contribution o Compensation; and
provided assets are more than the o Other matters where some
liabilities benefit is granted (Art. 1855,
2. Loan money and transact business (Art. CC).
1854, CC) f. In the absence of such statement, all the
a. Limited partner allowed to loan money, limited partners shall stand upon equal
transact business because the footing.
relationship between the limited partner 4. Share of profits (Art. 1856, CC)
and partnership is not based on trust When the assets exceed liabilities
and confidence. There is no conflict of (except those to limited and general
interests. partners), a limited partner may recover
b. Unless he is also a general partner, he his share in the profits or compensation
is entitled to a pro rata share of the by way of income stipulated in the
partnership assets together with the certificate.
general creditors. 5. Assign interests (Art. 1859, CC)
a. A limited partners interest is assignable.
CIVIL LAW REVIEWER Chapter IX. LIMITED PARTNERSHIP
PARTNERSHIP
In either case, it is still required that the
5. Admit a person as a general partner
certificate be amended (Art. 1865, CC)
6. Continue the business with partnership
and registered with the SEC.
property on the death, retirement, insanity,
e. That the assignee has become a
civil interdiction or insolvency of a general
substituted limited partner does not
partner, unless the power is granted in the
relieve the assignor from liabilities to the
certificate
partnership under Art. 1858, as a
7. Admit a person as a limited partner, unless
trustee, or for false statement in the
the right is granted in the certificate (Art.
certificate.
1850, CC)
6. Effect of death of a limited partner (Art.
1861, CC)
a. Rights of executors or administrators: V. Dissolution
All the rights of a limited partner for
the purpose of settling the estate When a limited partnership may be
If the deceased had assigned his dissolved
interest in the partnership, the 1. The misconduct of a general partner
executor or administrator may 2. Fraud on the limited partner by the general
constitute the assignee a substituted partner
limited partner if the deceased was 3. The retirement, death, insolvency, insanity,
empowered to do so or civil interdiction of a general partner,
b. The deceased limited partners estate is except: if the business is continued by the
liable for all the deceaseds obligations remaining general partners
and liabilities to the partnership as a a. Under a right stated in the certification
limited partner b. When all members consented to the
continuation (Art. 1860, CC)
4. When all the limited partners ceased to be
such (Art. 1864, CC)
CIVIL LAW REVIEWER Chapter IX. LIMITED PARTNERSHIP
PARTNERSHIP
capital contributions
4. Those to general partners other than for
capital and profits
5. Those to general partners in respect to
profits
6. Those to general partners in respect to
capital
- end of Partnership -
CIVIL LAW REVIEWER TABLE of CONTENTS
B. Damages
389
1
However, the court has held that there can be a tort even
where there is a pre-existing contract between the parties.
(Far East vs. CA, infra)
CIVIL LAW REVIEWER Chapter II. CONCEPT of QUASI-DELICT
391
A. CONCEPT OF NEGLIGENCE
1. DEFINITION; ELEMENTS
2. STANDARD OF CONDUCT
i. SPECIAL CASES
a. CHILDREN
b. EXPERTS/PROFESSIONALS
c. INSANITY
ii. EMERGENCY RULE
B. DEGREES OF NEGLIGENCE
C. PROOF OF NEGLIGENCE
1. BURDEN OF PROOF
2. PRESUMPTIONS
3. RES IPSA LOQUITUR
D. DEFENSES
1. PLAINTIFF'S NEGLIGENCE
2. CONTRIBUTORY NEGLIGENCE
3. FORTUITOUS EVENT
4. ASSUMPTION OF RISK
5. DUE DILIGENCE
6. PRESCRIPTION
7. DOUBLE RECOVERY
392
Cruz vs. CA (1997): Whether or not a Marinduque vs. Workmen's (1956): "Notorious"
physician has committed an negligence, is the same thing as "gross"
"inexcusable lack of precaution" in the negligence: pursuing a course of conduct which
treatment of his patient is to be would naturally and probably result in injury, or
determined according to the standard of utter disregard of consequences.
care observed by other members of the
profession in good standing under Benguet vs. CA (1999): Acting or omitting to act
similar circumstances bearing in mind in a situation where there is duty to act, not
the advanced state of the profession at inadvertently but willfully and intentionally, with a
the time of treatment or the present conscious indifference to consequences in so far
state of medical science. as other persons may be affected.
c) Insanity
C. Proof of Negligence
Art. 2180. Guardians are liable for damages caused
by the minors or incapacitated persons who are under
their authority and live in their company 1. Burden of Proof (ROC)
Art. 2182. If the minor or insane person causing Rule 131, Sec. 3(c and d)
damage has no parents or guardian, the minor or
insane person shall be answerable with his own (c) That a person intends the ordinary consequences
property in an action against him where a guardian ad of his voluntary act;
litem shall be appointed.
(d) That a person takes ordinary care of his concerns:
US vs. Baggay (1911): A lunatic or
insane person who, in spite of his 2. Presumptions
irresponsibility on account of the
deplorable condition of his deranged Art. 2184. In motor vehicle mishaps, the owner is
mind, is still reasonably and justly liable solidarily liable with his driver, if the former, who was
with his property for the consequences in the vehicle, could have, by the use of due diligence,
of his acts. prevented the misfortune. It is disputable presumed
that the driver was negligent, if he had been found
guilty of reckless driving or violating traffic regulations
ii. Emergency Rule at least twice within the next preceding two months.
not happen if those who have the management Bernardo vs. Legaspi (1914): Both of the parties
use proper care, it affords reasonable evidence, contributed to the proximate cause; hence, they
in the absence of an explanation by the cannot recover from one another.
defendant, that the accident arose from want of
care. 2. Contributory Negligence
Ramos vs. CA (1999): The injury itself, taken Art. 2214. In quasi-delicts, the contributory negligence
together with the circumstances raises the of the plaintiff shall reduce the damages that he may
presumption of negligence that the defendant recover.
must meet with an explanation.
Genobiagon vs. CA (1989): The alleged
Elements: contributory negligence of the victim, if any, does
The accident is such that it would not not exonerate the accused in criminal cases
have happened in the ordinary course of committed through reckless imprudence, since
events without the negligence of one cannot allege the negligence of another to
someone; evade the effects of his own negligence.
The defendant exercises control and
management. Rakes vs. Atlantic (1907): If so, the
There is no contributory negligence on disobedience of the plaintiff in placing himself in
the part of the plaintiff. danger contributed in some degree to the injury
as a proximate, although not as its primary
DM Consunji vs. CA (2001): The res ipsa cause.
loquitur doctrine is based in part upon the theory
that the defendant in charge of the (Supreme Court in this case cited numerous
instrumentality which causes the injury either foreign precedents, mostly leaning towards the
knows the cause of the accident or has the best doctrine that contributory negligence on the part
opportunity of ascertaining it and that the plaintiff of the plaintiff did not exonerate defendant from
has no such knowledge, and therefore is liability, but it led to the reduction of damages
compelled to allege negligence in general terms awarded to the plantiff.)
and to rely upon the proof of the happening of
the accident in order to establish negligence. 3. Fortuitous Event
4. Assumption of Risk
Exception:
5. Due Diligence
7. Double Recovery
person can be liable for the acts or omissions of parents had exercised all the diligence of a good
another. father of a family to prevent the damage
Parental liability is, in other words, Libi vs. IAC (1992): The parent's liability under
anchored upon parental authority coupled with 2180 should be primary and not subsidiary. If it
presumed parental dereliction in the discharge were subsidiary, the parents cannot invoke due
of the duties accompanying such authority. The diligence as a defense. Such interpretation
parental dereliction is, of course, only presumed reconciles 2180 with 2194 which calls for
and the presumption can be overturned under solidary liability of joint tortfeasors.
Article 2180 of the Civil Code by proof that the
CIVIL LAW REVIEWER Chapter V. PERSONS LIABLE
Art. 2180, par 3. Guardians are liable for damages Parents - (mnemonic: 21 + Authority &
caused by the minors or incapacitated persons who Company):
are under their authority and live in their company. 1. The child is below 21 years old
2. The child is under the parental authority
Art. 216. In default of parents or a judicially appointed of the parents
guardian, the following person shall exercise
3. The child is living in the company of the
substitute parental authority over the child in the order
indicated: parents
The surviving grandparent, as provided in Art.
214; Guardians - (mnemonic: Authority & Company)
The oldest brother or sister, over twenty-one 1. The ward if minor is below 21 years
years of age, unless unfit or disqualified; and old. If incapacitated, the guardian is
The child's actual custodian, over twenty-one liable for the acts of the ward regardless
years of age, unless unfit or disqualified. of the latters age.
Whenever the appointment or a judicial guardian over 2. The child is under the parental
the property of the child becomes necessary, the authority of the parents.
same order of preference shall be observed. 3. The tortfeasor is under his authority.
Art. 217. In case of foundlings, abandoned neglected
4. The tortfeasor is living in his
or abused children and other children similarly company.
situated, parental authority shall be entrusted in
summary judicial proceedings to heads of children's Is a minor or insane tortfeasor with NO parent or
homes, orphanages and similar institutions duly guardian liable?
accredited by the proper government agency. Yes. He shall be answerable with his own
property in an action against him where a
guardian ad litem shall be appointed. (Art. 2182)
Palisoc vs, Brillantes (1971): Custody means now be deemed to have been set aside by this
the protective and supervisory custody that the decision
school and its heads and teachers exercise over
the pupils and students for as long as they are at
Amadora vs. CA (1988): Art. 2180 should apply
attendance in the school and includes recess
to ALL schools, academic as well as non-
time.
academic. Where the school is academic rather
than technical or vocational in nature,
There is nothing in the law that
responsibility for the tort committed by the
requires that for such liability to attach, the pupil
student will attach to the teacher in charge of
or student who commits the tortious act must
such student. In establishments of arts and
live and board in the school, as erroneously held
trades, it is the head thereof, and only he, who
by the lower court, and in the dicta in Mercado
shall be held liable as an exception to the
(as well as in Exconde) on which it relied, must
general rule.
CIVIL LAW REVIEWER Chapter V. PERSONS LIABLE
interests, or for the account of the employer at b. Art. 2189 provides for state liability for
the time of the infliction of the injury or damage. damages caused by defective condition of
public works.
De Leon Brokerage v. CA (1962): Employer c. Local Government Code provides for the
need not be riding in the vehicle to become liability of local government units for
liable for a drivers negligence. Article 2184 wrongful exercise of its proprietary (as
mandating that the owner is only held solidarily opposed to its governmental) functions. The
liable if he is riding in the vehicle at the time of latter is the same as that of a private
the mishap, only applies to those owners of corporation or individual. (Mendoza vs. De
vehicles, who do not come within the ambit of Leon, 1916)
Article 2180 (as owners of an establishment or
enterprise.) The state agencies or subdivisions, in the
pursuance of proprietary functions, are akin to
5. State any other private corporation. They may be sued
for:
Sec 3, Art XVI, 1987 Constitution. The State may not torts committed by them (Art. 2176) or
be sued without its consent.
torts committed by their employees (art
Art 2180, par 6. The State is responsible in like
manner when it acts through a special agent; but not 2180).
when the damage has been caused by the official to
whom the task done properly pertains, in which case As long as it is performing proprietary functions,
what is provided in Article 2176 shall be applicable. it can be held liable for the acts of its employees,
both regular and special.
Merrit vs. Government of the Philippine Islands
(1960): A special agent is one who receives a Quick Glance
definite and fixed order or commission, foreign o As a governmental entity: Liable only for
to the exercise of the duties of his office if he is a acts of its special agents
special official. o As a corporate entity: May be held liable
just as any other employer for the acts of its
This concept does not apply to any executive employees
agent who is an employee of the active o Special Agent: One duly empowered by a
administration and who on his own responsibility definite order or commission to perform
performs the functions which are inherent in and some act or one charged with some definite
naturally pertain to his office. purpose which give rise to the claim; if he is
a government employee or official, he must 403
The responsibility of the state is limited to that be acting under a definite and fixed order or
QUICK GLANCE
Person Strictly Liable For What Defenses or Exceptions
Possessor of an animal or whoever For the damage it may cause Force majeure
makes use of them even if the Fault of the person who suffered
animal is lost or escaped damage
Owner of Motor Vehicle Motor vehicle mishaps Solidary liability only if the owner was
in the vehicle and if he could have
prevented it thru due diligence
If not in vehicle 2180
Manufacturers and Processors of death and injuries caused by any Absence on contractual relation NOT
foodstuffs, drinks, toilet articles and noxious or harmful substances used a defense
similar goods (FDTAS)
Defendant in possession of death or injury results from such possession or use thereof is
dangerous weapons/ substances possession indispensable in his occupation or
such as firearms and poison business
Provinces, Cities and Municipalities the death or injuries suffered by any Public works must be under their
person by reason of the defective supervisions
condition of roads, streets, bridges,
public buildings, and other public
works
Proprietor of building/ structure total or partial collapse of Responsibility for collapse should be
building or structure if due to due to the lack of necessary repairs
lack of necessary repairs
explosion of machinery which
has not been taken cared of
with due diligence, and the
inflammation of explosive
substances which have not
been kept in a safe and
adequate place
by excessive smoke, which
may be harmful to persons or
property
by falling of trees situated at or
near highways or lanes, if not
caused by force majeure 406
by emanations from tubes,
BAR QUESTION: MOTOR VEHICLE MISHAPS E. Civil Liability Arising From Crime
A van owned by Orlando and driven by Diego,
while negotiating a downhill slope of a city road, Art. 2177. Responsibility for fault or negligence under
suddenly gained speed, obviously beyond the the preceding article is entirely separate and distinct
authorized limit in the area, and bumped a car in from the civil liability arising from negligence under the
front of it, causing severe damage to the car and Penal Code. But the plaintiff cannot recover damages
serious injuries to its passengers. Orlando was twice for the same act or omission of the defendant.
not in the car at the time of the incident. The car (n)
owner and the injured passengers sued Orlando
and Diego for damages cause by Diegos 1. Distinguished from Independent Civil
negligence. In their defense, Diego claims that Actions and Liability for QD
the downhill slope caused the van to gain speed (Arts. 31-34, 2176)
and that, as he stepped on the brakes to check
the acceleration, the brakes locked, causing the Rule 111, Rules of Court
van to go even faster and eventually to hit the Sec. 3. When civil action may proceed independently.
car in front of it. Orlando and Diego contend that In the cases provided in Articles 32, 33, 34 and
the sudden malfunction of the vans brake 2176 of the Civil Code of the Philippines, the
system is a fortuitous event and that, therefore, independent civil action may be brought by the
offended party. It shall proceed independently of the
they are exempt from any liability.
criminal action and shall require only a preponderance
(a) Is this contention tenable? Explain. of evidence. In no case, however, may the offended
(b) Explain the concept of vicarious party recover damages twice for the same act or
liability in quasi-delicts. omission charged in the criminal action.
(c) Does the presence of the owner
inside the vehicle causing damage Sec. 5. Judgment in civil action not a bar. A final
to a third party affect his liability judgment rendered in a civil action absolving the
for his drivers negligence? Explain. defendant from civil liability is not a bar to a criminal
action against the defendant for the same act or
omission subject of the civil action.
Suggested Answer:
F. Prescription
408
Elements:
a) existence of a valid contract
b) knowledge of the third person of the
existence of the contract
c) interference of the third person WITHOUT
legal justification or excuse
(So Ping Bun vs. CA, 1999)
409
Alternative Answer:
No such reservation is necessary. Under Section 1
Rule 111 of the 2000 Rules on Criminal Procedure,
what is deemed instituted with the criminal action is
only the action to recover civil liability arising from the
crime or ex delicto. All the other civil actions under
Articles 32, 33, 34, 2176 of the New Civil Code are no
longer deemed instituted, and may be filed
separately and prosecuted independently even
without any reservation in the criminal action (Section
3, Rule 111, 2000 Rules on Criminal Procedure). The
failure to make a reservation the criminal action is not
a waiver of the right to file a separate and
independent civil action based on these articles of the
New Civil Code (Casupanan vs. Laroya, G.R. No.
145391, August 26, 2002)
412
When pecuniary loss need not be proved capacity of a minor is even stronger if he
1) Liquidated damages previously agreed or she was a student, whether already
upon training for a specific profession or still
2) If damages other than actual are sought engaged in general studies. Formula
(Art. 2216) established in decided cases for
3) Loss is presumed (ex: loss of a child or computing net earning capacity:
spouse)
4) Forfeiture of bonds in favor of the MMTC v. CA: Net earning capacity (X) =
government for the purpose of life expectancy * [gross annual income
promoting public interest or policy (ex: reasonable, necessary living expenses]
bond for temporary stay of alien
Life expectancy = 2/3 (80- age of
iii. Damages for Personal Injury & Death deceased)
(Art. 2206)
iv. Attorneys Fees
Recoverable damages for death
caused by a crime or quasi-delict: Attorneys Fees is the exception NOT
(a) At least three thousand pesos, even the general rule.
though there may have been
mitigating circumstances. Art. 2208: can be recovered:
- (People vs. Robert Brodett y (1) If there is a stipulation to that effect
Pajaro, Jan. 18, 2008: so as of (2) When exemplary damages are
2008, it is P75,000 awarded;
(3) When the defendant's act or omission
(b) Loss of the earning capacity of the has compelled the plaintiff to litigate with
deceased, third persons or to incur expenses to
- paid to his heirs protect his interest;
- unless the deceased on account (4) In criminal cases of malicious
of permanent physical disability prosecution against the plaintiff;
not caused by the defendant, (5) In case of a clearly unfounded civil
had no earning capacity at the action or proceeding against the plaintiff;
time of death; (6) Where the defendant acted in gross and
(c) Support according to the provisions evident bad faith in refusing to satisfy
the plaintiff's plainly valid, just and
of Article 291 demandable claim;
- the recipient who is not a testate (7) In actions for legal support; 417
or intestate heir may demand (8) In actions for the recovery of wages of
b. Furthermore, the INTEREST legal interest from the time it is JUDICIALLY demanded.
DUE shall itself earn
c. When an obligation, NOT at the rate of 6% per annum. If claim or damages are LIQUIDATED,
constituting a loan or forbearance from default, i.e., from judicial or 418
of money, is breached, an interest extrajudicial demand. (Art. 1169, Civil
420
and respected businessman in his community, and (b) line with prevailing jurisprudence. In
attorneys fees. addition, the presence of the qualifying
circumstances of minority and
(a) Does Ortillo have a legal basis for his claim for relationship entitles the offended party to
moral damages?
(b) How about his claim for attorneys fees, having
exemplary damages in the amount of
hired a lawyer to defend him? P25K.
conduct despite the offender's knowledge of his therefore, experience physical suffering and
or her social and financial standing. mental anguish, which call be experienced only
by one having a nervous system. The statement
PNB vs. CA: Petitioner has not presented in People vs. Manero and Mambulao Lumber
adequate evidence to show that private Co. vs. PNB that a corporation may recover
respondent is indeed a big time gambler. moral damages if it "has a good reputation that
Petitioner has besmirched private respondent's is debased, resulting in social humiliation" is an
reputation and has considerably caused him obiter dictum.
undue humiliation. The records further show that NAPOCOR vs. Philipp Brothers: While it is true
plaintiff is a prominent businessman, licensed that besmirched reputation is included in moral
and engaged in the real estate business. He is damages, it cannot cause mental anguish to a
at the same time a consultant of Dizon-Esguerra corporation, unlike in the case of a natural
Real Estate Company. Defendant treated him as person, for a corporation has no reputation in the
a valued and VIP client. Because of the bank's sense that an individual has, and besides, it is
refusal to encash the entire one million face inherently impossible for a corporation to suffer
amount of his manager's checks, he was so mental anguish.
embarrassed for he was not able to purchase a
house and lot in Baguio City. BAR QUESTION
Lopez, et al. vs. Pan American World Airways:
International carriers like defendant know the Rosa was leasing an apartment in the city. Because
prestige of such an office. For the Senate is not of the Rent Control Law, her landlord could not
only the Upper Chamber of the Philippine increase the rental as much as he wanted to, nor
terminate her lease as long as she was paying her
Congress, but the nation's treaty-ratifying body.
rent. In order to force her to leave the premises, the
And he was former Vice-President of the landlord stopped making repairs on the apartment,
Philippines. An award of P100,000,000 is and cause the water and electricity services to be
appropriate. Mrs. Maria J. Lopez, as wife of disconnected. The difficulty of living without electricity
Senator Lopez, shared his prestige and and running water resulted in Rosas suffering a
therefore his humiliation. Mr. and Mrs. Alfredo nervous breakdown. She sued the landlord for actual
Montelibano, Jr. were traveling as immediate and moral damages. Will the action prosper?
members of the family of Senator Lopez. As Explain.
such they likewise shared his prestige and
Answer:
humiliation.
Yes, based on quasi-delict under the human relations
Producers Bank vs. CA: In the case of Leopoldo provisions of the New Civil Code (Articles 19, 20 and
Araneta v. Bank of America, we held that: "The
financial credit of a businessman is a prized and
21) because the act committed by the lessor is
contrary to morals. Moral damages are recoverable
422
valuable asset, it being a significant part of the under Article 2219 (10) in relation to Article 21.
For Corporations: (b) Yes, based on contract and/or on tort. The lessor
willfully breached his obligations under Article
ABS-CBN vs. CA: The award of moral damages 1654, NCC, hence, he is liable for breach of
cannot be granted in favor of a corporation contract. For such breach, the lessee may
because, being an artificial person and having recover moral damages under Art. 2220 of the
existence only in legal contemplation, it has no NCC, and actual damages that she may have
suffered on account thereof. And since the
feelings, no emotions, no senses, It cannot,
conduct of the lessor was contrary to morals, he
CIVIL LAW REVIEWER Chapter IX. DAMAGES
may also be held liable for quasi-delict. The nominal damages for insensitivity, inadvertence
lessee may recover moral damages under Article or inattention to their customer's anxiety and
2219 (10) in relation to Article 21, and all actual need of the hour.
damages which she may have suffered by reason
of such conduct under Articles 9, 20 and 21.
4. Temperate Damages
(c) Yes, the action should prosper for both actual
and moral damages. In fact, even exemplary Temperate or moderate damages are more than
damages and attorneys fees can be claimed by nominal but less than compensatory damages.
Rosa, on the authority of Magbanua vs. IAC (137 It may be recovered when some pecuniary loss
SCRA 328), considering that, as given, the has been suffered but its amount can not be
lessors willful and illegal act of disconnecting the provided with certainty. (Art. 2224)
water and electric services resulted in Rosas
suffering a nervous breakdown. Art. 20 NCC and Temperate damages must be reasonable under
Art. 21 NCC authorize the award of damages for
the circumstances. (Art. 2225)
such willful and illegal conduct.
i. Requisites:
3. Nominal Damages
(1) There is actual damage.
(2) The pecuniary amount of the damage
Art. 2221. Nominal damages are adjudicated in order
that a right of the plaintiff, which has been violated or
cannot be proved.
invaded by the defendant, may be vindicated or (3) Amount must be reasonable.
recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him. In cases where the resulting injury might be
continuing and possible future complications
Art. 2222. The court may award nominal damages: directly arising from the injury, while certain to
- in every obligation in Article 1157, or occur are difficult to predict, temperate damages
- where any property right has been invaded. can and should be awarded on top of actual or
compensatory damages; in such cases there is
Art. 2223. Adjudication of nominal damages
precludes:
no incompatibility between actual and temperate
- further contest upon the right involved damages.
- all accessory questions between the parties
or their respective heirs and assigns. Citytrust Bank vs. IAC: Temperate damages are
incompatible with nominal damages hence,
i. Requisites: cannot be granted concurrently.
(1) A legal right has been violated.
(2) There is no loss or damage suffered or Pleno vs. CA: Temperate damages are included 423
such cannot be proven or was not within the context of compensatory damages
Francisco v. Ferrer: No moral or exemplary Those agreed upon by the parties to a contract,
damages was awarded. Nevertheless, when to be paid in case of breach thereof. (Art. 2226)
confronted with their failure to deliver on the
wedding day the wedding cake ordered and paid Grounds for equitable reduction:
for, petitioners gave the lame excuse that - iniquitous or
delivery was probably delayed because of the - unconscionable. (Art. 2227)
traffic, when in truth, no cake could be delivered
because the order slip got lost. For such Stipulation is not controlling:
prevarication, petitioners must be held liable for
CIVIL LAW REVIEWER Chapter IX. DAMAGES
When the breach of the contract is not the one i. Requisites to recover exemplary
contemplated by the parties in agreeing upon damages and liquidated damages
the liquidated damages. In this case, the law agreed upon in addition to exemplary
shall determine the measure of damages. (Art. (Art.2234):
2228)
These damages are agreed upon in a The plaintiff must show that he is
contract in case of breach thereof. entitled to moral, temperate or
There is no need to prove the amount, compensatory damages:
only the fact of the breach.
The amount can be reduced if: If arising from When exemplary
- unconscionable as determined by damages are granted
the court Art. Crimes the crime was
2230 committed with an
- partial or irregular performance.
aggravating
circumstance/s
General Rule: The penalty shall substitute the Art. Quasi-delicts defendant acted with
indemnity for damages and the payment of the 2231 gross negligence
interests in case or breach. Art. Contracts and defendant acted in a
2232 Quasi- contracts wanton, fraudulent,
Exceptions reckless, oppressive, or
(1) When there is a stipulation to the contrary. malevolent manner
(2) When the obligor is sued for refusal to pay (WFROMM)
the agreed penalty.
(3) When the obligor is guilty of fraud. A stipulation whereby exemplary
damages are renounced in advance
6. Exemplary/Corrective Damages shall be null and void. (Art. 2235)
Chapter VII. Nationality................................436 Chapter XIV. Torts and Crimes ................... 453
I. Determination of Nationality ..............436 I. Torts .................................................. 453
II. Procedure for Naturalization .............436 II. Crimes............................................... 454
III. Loss of Philippine Citizenship ...........437
IV. Problems in Applying the Nationality Chapter XV. Torts and Crimes .................... 455
Principle .....................................................438 I. Personal Law of Corporations .......... 455
426
II. Domicile/Residence of Corporations 455
Chapter IX. Principles on Personal Status Chapter XVI. Foreign Judgments ............... 457
and Capacity.................................................441 I. Recognition v. Enforcement.............. 457
I. Definition ...........................................441 II. Bases of Recognition and Enforcement
II. Beginning and End of Personality.....441 457
III. Absence ............................................441 III. Policy of Preclusion Underlying
IV. Name.................................................442 Recognition and Enforcement ................... 457
V. Age of Majority ..................................442 IV. Requisites for Recognition or
VI. Capacity ............................................442 Enforcement .............................................. 457
V. Procedures for Enforcement ............. 457
Chapter X. Family Relations........................443 VI. Effect of Foreign Judgment in the
I. Marriage ............................................443 Philippines ................................................. 458
II. Divorce and Separation.....................445
III. Annulment and Declaration of Nullity 445
IV. Parental Relations.............................446
V. Adoption ............................................446
CIVIL LAW REVIEWER Chapter I. INTRODUCTION
Sources Custom
Treaty
general
principles of
law
recognized by
National
civilized
conflict rule
nations
International
judicial
conflict rules
decisions
teachings of
the most
highly
qualified
publicists
Remedies diplomatic
protest
resort to forum negotiation,
court or conciliation,
administrative arbitration
tribunals (as adjudication
provided by before
municipal laws international
of the state) tribunal
use of force
war
must exist among the forum, defendant, and Factors which justify the application of forum law
the cause of action. 1. A specific law of the forum decrees that
4. Long-arm statutes: statutes that allow the internal law should apply.
forum state to exercise jurisdiction over a 2. The proper foreign law was not properly
non-resident defendant, provided that the pleaded and proved.
prospective defendant has sufficient 3. The case falls under any of the exceptions
minimum contacts with the forum state. to the application of foreign law:
a. The foreign law is contrary to an
III. Ways of Dealing with Jurisdiction in a IMPORTANT PUBLIC POLICY of the
Conflicts Problem forum
b. The foreign law is PROCEDURAL in
nature
A. Dismiss the Case c. The foreign law is PENAL in nature
d. The case involves real or personal
Grounds PROPERTY SITUATED IN THE
1. For Lack of jurisdiction over the subject FORUM (Lex Situs)
matter or over the parties to the suit e. The issue involved in the enforcement of
2. On the ground of FORUM NON foreign claim is FISCAL or
CONVENIENS ADMINISTRATIVE
f. The foreign law is contrary to GOOD
Doctrine of Forum Non Conveniens MORALS (contra bonus mores)
(Asked in 94, 04 BAR EXAMINATIONS) g. The application of foreign law will work
1. This literally means the forum is UNDENIABLE INJUSTICE to citizens of
inconvenient. the forum
2. This doctrine requires the court to dismiss h. The application of foreign law might
the case on the ground that the controversy endanger the VITAL INTERESTS of the
may be suitably tried elsewhere. state
The doctrine of forum non conveniens
should NOT be used as a ground for a
motion to dismiss because Sec. 1, Rule
16 of the Rules of Court does not
include said doctrine as a ground.
The propriety of dismissing a case
based on the principle of forum non
conveniens requires a factual
determination; hence it is more properly
considered as a matter of defense.
(Bank of America NT&SA v. CA, 2003) 430
3. Reasons for applying forum non conveniens:
B. Assume Jurisdiction
Criticisms:
a. Conflicts cases were ordinarily
concerned only with private and not
governmental interests.
b. ii.Not all state legislatures publish
reports that explain background and
purpose of laws, thus courts are left
to speculate.
Illustration:
B and J, NY residents, met a car
accident in Ontario thru Js fault. B sued
J in NY for damages. Ontario bars
recovery under a guest statute. NY does
not have a similar rule. B should be
allowed to recover. NY had a greater
and more direct interest than Ontario.
NYs policy is to afford compensation to
a guest tortfeasor host while Ontarios
policy is to prevent fraudulent collusion
to the prejudice of Ontario defendants
and insurance companies. Ontario had 432
no interest in denying a remedy to a NY
3. Comparative Impairment
Court weighs conflicting interests and
apply the law of the state whose interest
would be more impaired it its laws were
not followed
Chapter VI. Notice and Proof of Foreign II. Exceptions to the Application of
Law Foreign Law
I. DETERMINATION OF NATIONALITY Sec.1, Art IV. The following are citizens of the
II. PROCEDURE FOR NATURALIZATION Philippines:
III. LOSS OF PHILIPPINE CITIZENSHIP (1) Those who are citizens of the Philippines at the
IV. PROBLEMS IN APPLYING THE NATIONALITY time of the adoption of this Constitution;
PRINCIPLE (2) Those whose fathers or mothers are citizens of
the Philippines;
Most civil law countries such as the (3) Those born before January 17, 1973, of Filipino
Philippines follow the NATIONAL LAW mothers, who elect Philippine citizenship upon
THEORY: (Asked in 98, 04, BAR reaching the age of majority; and
EXAMINATIONS) (4) Those who are naturalized in accordance with
law.
It is the nationality or citizenship of the
individual, which regulates the following: 1. Natural-Born Citizens
Civil status DEFINITION: Those who are citizens of
Capacity the Philippines without having to perform
Condition any act to acquire or perfect citizenship.
Family rights and duties Two principles:
Laws on Succession JUS SOLI looks to the PLACE of
Capacity to succeed BIRTH to determine ones
nationality
According to the Supreme Court, it is a JUS SANGUINIS
conflict of laws theory by virtue of which - means rule of DESCENT OR
jurisdiction over the particular subject matter BLOOD
affecting a person is determined by the - Principle followed in the
latters nationality. (Ellis vs. Republic, 1963) Philippines
2. Citizens by Naturalization
In the Philippines, the nationality principle is NATURALIZATION: confers to an
expressed in Art. 15 of the Civil Code as alien a nationality after birth by any
follows: means provided by law.
In the Philippines, this is done by
Article 15, Civil Code. Laws relating to family rights judicial method under CA No. 73 as
and duties, or to status, condition and capacity of amended by RA 530.
persons are binding upon citizens of the Philippines
even though living abroad.
II. Procedure for Naturalization 436
I. Determination of Nationality
2. Statelessness
Two senses:
a. DE JURE statelessness: A person has
been stripped of his nationality by his
former government without having an
opportunity to acquire another
b. DE FACTO statelessness: A person
possessed of a nationality but whose
country does not give him protection
outside its own territory (refugees)
C. Kinds of Domicile
Chapter VIII. Domicile 1. Domicile of Origin
A persons DOMICILE AT BIRTH
I. DOMICILE
II. COMPARATIVE MERITS AND DEMERITS OF LEGITIMATE CHILD ILLEGITIMATE CHILD
DOMICILE AND NATIONALITY
Follow the FATHERs Follow the MOTHERs
domicile domicile
I. Domicile
2. Domicile of Choice
A. Municipal Law/Philippine Law Definition: i. A persons VOLUNTARY
DOMICILE
PERSON DOMICILE The place freely chosen by a
Natural persons Art. 50. For the exercise person sui juris (of full age and
of civil rights and the capacity)
fulfillment of civil ii. To acquire it, there must be a
obligations, the domicile concurrence of:
of natural persons is the
PLACE OF THEIR
ACTUAL RESIDENCE; and
HABITUAL REDENCE. ANIMO MANENDI - intent to
Juridical persons Domicile is determined make it ones home
by the LAW CREATING
OR RECOGNIZING IT. Domicile of Domicile of
DISTINCTION
In the absence Origin Choice
thereof, place where As to: Stronger As compared to
legal representation condition presumption in domicile of
or place of business necessary for favor of its origin, less
is. its continuance presumption in
abandonment favor of its
CONFLICTS of LAW DEFINITION NOT lost by continuance
(Restatement): mere
abandonment
The place with which a person has a and remains until
SETTLED CONNECTION for certain replaced by a
legal purposes, either because: domicile of
His home is there; or choice
Place is assigned to him by law As to: capacity Presumed to be Deemed
for revival revived once the extinguished by
To acquire a domicile, there must be a domicile of removal of
concurrence of TWO ELEMENTS: choice is given intent even prior
up and before a to the
i. INTENTION to make it ones
new one is acquisition of a 439
domicile; and acquired new domicile
Art. 69, Family Code. The husband and wife shall fix
the family domicile. In case of disagreement, the court
shall decide. The court may exempt one spouse from
living with the other if the latter should live abroad or
there are other valid and compelling reasons for such
exemption
2. Demerits
a. does not provide solution with respect to
stateless persons
those with multiple nationalities
states with diverse legal systems
b. persons ties to his nation may be so
attenuated if he has lived in another
country most of his life
B. Domicile
1. Merits
a. genuine linkadequate basis for him to
exercise rights therein and the state to
impose duties on him
CIVIL LAW REVIEWER Chapter IX. PRINCIPLES on PERSONAL STATUS and CAPACITY
IV. Name
A. Governing Law
Determined by PERSONAL LAW
V. Age of Majority
A. Governing LawDetermined by
PERSONAL LAW
B. Age of Majority under Philippine Law
Age of majority is 18 years old [RA 6809]
CIVIL LAW REVIEWER Chapter X. FAMILY RELATIONS
NOTE:
NOTE: These exceptions put into issue the 1. Rule on Proxy Marriages (Asked in 85-89
capacity of the parties to enter into the marriage BAR EXAMINATIONS)
and therefore relate to the substantive a. proxy marriages, where permitted by the
requirement for marriage. Since the personal law law of the place where the proxy
of the parties, e.g. the national law of Filipinos, participates in the marriage ceremony,
governs the questions of intrinsic validity of are entitled to recognition in countries
marriages between Filipinos abroad, the above adhering to the lex loci celebrationis
enumerations are exceptions to lex loci rule, at least insofar as formal validity is
celebrationis precisely because they are concerned
controlled by lex nationalii b. internal Philippine law, however, does
not sanction proxy marriages.
B. Domestic Adoption Act of 1998 NOTE: Adoption is one of the ways prescribed 446
1. An alien may adopt, provided he is: by law for the acquisition of Filipino citizenship
Will is revoked in
815, CC]
the Philippines
Philippine
2. Philippine law [see III Domiciliary
Tolentino 117]
Philippine Law
A. Controlling Law
NOTE: Rule re: Joint Wills The probate of a will being essentially
1. Joint wills prohibited under Art. 818, CC procedural in character, the law of the
executed by Filipinos in a foreign country forum (lex fori) governs.
shall not be valid in the Philippines even
though authorized by the laws of the country B. Wills Proved and Allowed in a Foreign
where they were executed. [Art. 819, CC] Country
(Asked in 00-04 BAR EXAMINATIONS) 1. A will proved and allowed in a foreign
2. Civil Code is silent as to the validity of a joint country in accordance with the laws of that
will executed by an alien in the Philippines. It country may be allowed, filed, and recorded
is suggested that that it should not be in the proper Regional Trial Court in the
probated if it would affect the heirs in the Philippines [RULES OF COURT, Rule 77,
Philippines. Sec.1]
CIVIL LAW REVIEWER Chapter XIII. SUCCESSION
VII. Trusts
Extrinsic Validity: rules governing wills apply
Intrinsic Validity: lex situs since a trust
involves property
452
II. Crimes
A. General Rule
Lex Loci Delicti Commissi/ Locus Regit
Actum (law of the place where the act was
committed)
B. Exceptions
1. Crimes committed by state officials,
diplomatic representatives and officials of
recognized international organizations
(based on the doctrine of state immunity
from suit.
2. Crimes committed on board a foreign vessel
even if it is within the territorial waters of the
coastal state, as long as the effect of such
crime does not affect the peace and order of
the coastal state.
3. Crimes which, although committed by
Philippine nationals abroad are punishable
under Philippine law as provided in Art. 2,
Revised Penal Code:
b. offenses committed in a Philippine 454
vessel or airship
Chapter XV. Torts and Crimes B. Rule if the Same Not Fixed by Law
If the law does not fix the same, the domicile of
I. Personal Law of Corporations juridical persons shall be understood to be [Art.
A. General Law: Law of Incorporation 51, CC]:
B. Exceptions 1. place where their legal representation is
1. Constitutional and Statutory
established; or
Restrictions
2. Control Test During War 2. place where they exercise their principal
II. Domicile/Residence of Corporations functions
A. General Rule
B. Exceptions NOTE: A foreign corporation granted license to
III. Jurisdiction Over Foreign Corporations operate in the Philippines acquires domicile
A. Consent Doctrine here.
B. Foreign Corporations Doing Business
Bound by Philippine Law
1. Art. 129, Corporation Code
2. Service Upon Foreign Corporations III. Jurisdiction Over Foreign
Doing Business in the Philippines Corporations
IV. Right of Foreign Corporations to Bring Suit
A. General Rule
A. Consent Doctrine
B. Exceptions
1. Isolated Transactions A foreign corporation shall be recognized
2. Action to Protect Trademark, Trade and will be allowed to transact business in
Name, Goodwill, Patent or for Unfair any state which gives it consent. The
Competition consent doctrine is established in Sections
3. Agreements Fully Transacted 125, 126, 127 and 128 of the Corporation
Outside the Philippines Code.
4. Petitions Filed Merely as Corollary .
Defense in a Suit Against It B. Foreign Corporations Doing Business in
Philippines Bound by Philippine Law
1. Under Art. 129 of the Corporation Code, all
foreign corporations lawfully doing business
I. Personal Law of Corporations in the Philippines shall be bound by all laws,
rules, and regulations applicable to domestic
A. General Rule corporations; EXCEPT:
Law of the State where it is incorporated a. provisions for the creation, formation,
[Art. 2, Corporation Code] organization or dissolution of
corporations
b. those which fix the relations, liabilities, 455
NOTE: Hence, if the law creating the corporation
responsibilities, or duties of
A. General Rule
License to transact business in the
Philippines is an essential prerequisite for
filing a suit before Philippine courts [Art. 133,
Corporation Code]
B. Exceptions
1. isolated transactions
2. action to protect trademark, trade name,
goodwill, patent or for unfair competition
3. agreements fully transacted outside the
Philippines
4. when the petition filed is merely a corollary
defense in a suit against the corporation
456
B. Summary Proceeding
1. Followed in most civil law countries
2. A summary proceeding for enforcement is
provided by statute.
C. Judgment Registration
An authenticated copy of the foreign
judgment is filed in the registrars office
together with other proofs required by
domestic laws and the foreign judgment is
converted into a local one that is
immediately executory.