2012 Civil Law Summer Reviewer PDF

CIVIL LAW
BAR REVIEWER
FACULTY ADVISER ATTY. BENJAMIN LERMA
ACADEMICS HEAD PIERRE MARTIN REYES
SUBJECT HEADS FRANCESCO BENZON
ANBOCHI
HANNAH STEPHANIE ANG
ATENEO CENTRAL BAR OPERATIONS 2012
ACADEMICS COMMITTEE
Academics Head: Pierre Martin Reyes;

Understudy: Clariesse Jami Mari Chan
REVIEW COMMITTEE
Head: Yla Gloria Marie Paras;
Understudy: Ken Koga;
Members: Catherine Dela Rosa, Eric Lavadia, Iris Lucido,
Pearl Charisse Baustista; Mina Reyes
CIVIL LAW COMMITTEE
Heads: Francesco Benzon Anbochi, Hannah Stephanie

Ang;
Understudy: Alessandra Vilches, Ken Patrick Habana;
Volunteers: Rizza Anne Sy, John Benedict Ty, Rose
Angelique Dizon, Geoanne Christi Battad, Paolo de
Guzman, Roberto Miguel Ramiro;
CIVIL LAW
Table of Contents
PRELIMINARY TITLE……………………………………
5
1. Effect and Effectivity of Law
2. Human Relations
PERSONS…………………………………………………… PRESCRIPTION……………………………………………
…8 ……78
============================== ==============================
===== =====
A. General Provisions
B. Natural Persons A. Definition
C. Juridical Persons B. No Prescription Applicable
D. Domicile C. Prescription or limitation of actions
E. Marriage D. Interruption
F. Legal Separation
G. Rights and Obligations Between Husband and OBLIGATIONS
Wife ………………………………………………… 82
H. Property Relations Between Husband and Wife ==============================
I. The Family =====
J.
Family Home A. Definition
K. Paternity and Filiation B. Elements of an Obligation
L. Adoption C. Different Kinds of Prestations
M. Support D. Classification of Obligations
N. Parental Authority E. Sources of obligations (Arts. 1156-1157)
O. Funerals F. Nature and Effect of Obligations
P. Surname G. Kinds of Civil Obligations
Q. Absence H. Joint and Solidary Obligation
R. Civil Register I. Extinguishment of Obligations
PROPERTY………………………………………………… CONTRACTS
…37 ………………………………………………… 109
==============================
==============================
=====
=====
A. Classification of Property (Arts. 414-418, CC)
A. Essential Requisites (Art. 1261)
B. Ownership (Arts. 427-439, CC)
B. Kinds of Contracts
C. Accessions
C. Formality (Arts. 1356, 1357, 1358)
D. Quieting Title
D. Defective Contracts
E. Co-ownership
E. Effect of contracts (Art. 1311)
F. Condominium Act (RA 4726)
G. Possession
SALES ……………………………………………… 123
H. Usufruct
==============================
I. Easements
=====
J. Modes Of Acquring Ownership
K. Occupation
A. Introduction
L. Intellectual Creation
B. Parties to a Contract of Sale
M. Donation
C. Subject Matter
N. Other Modes of Acquiring Ownership
D. Obligations of the Seller to Transfer Ownership
O. Nuisance
E. Price
F. Formation of Contract of Sale
CIVIL LAW REVIEWER Page 3 of 401

G.
Transfer of Ownership E. General vs. Special Agency

H. Risk of Loss F. Agency Couched in General Terms
I. Documents of Title G. Agency Requiring Special Power of Attorney
J. Remedies of an Unpaid Seller H. Agency by Operation of Law
K. Performance of Contract I. Rights and Obligations of Principal
L. Warranties J. Modes of Extinguishment
M. Breach of Contract
N. Extinguishment of the Sale CREDIT
O. The Subdivision and Condominium Buyers' TRANSACTIONS…………………………………………
Protective Decree 235
P. The Condominium Act ==============================
===
SUCCESSION A. Loan
………………………………………………… 155 B. DEPOSIT
============================== C. Guaranty and Suretyship
===== D. Pledge
E. Real Mortgage
A. General Provisions F. Antichresis
B. Testamentary Succession G. Chattel Mortgage
C. Legal or Intestate Succession H. Quasi-contracts
D. Provisions Common to Testate and Intestate I. Concurrence and Preference of Credits
Succession J. Insolvency Law
E. Partition and distribution of estate
LAND TITLES AND DEEDS

LEASE………………………………………………………… …………………………………… 283
199 ==============================
============================== =====
===
A. Lease of Things A. Torrens System
B. Lease of Work or Services B. Regalian Doctrine
C. Lease of Rural and Urban Lands C. Citizen Requirements
D. Contract for Piece of Work D. Non-Registrable Properties
E. Rights and Obligations of Lessor and Lessee E. Original Registration
F. Subsequent Registration
PARTNERSHIP……………………………………………… G. Dealings With Unregistered Land
205
==============================
=== TORTS AND
A. Contract Of Partnership DAMAGES…………………………………… 323
B. Rights and Obligations of Partnership ==============================
C. Rights and Obligations of Partners Among =====
Themselves
D. Obligations of Partnership/Partnership to Third Book I--Torts
Persons A. Principles
E. Dissolution B. Classification of Torts
F. Limited Partnership C. The Tortfeasor
D. Act of Omission and Its Modalities
AGENCY……………………………………………………… E. Proximate Cause
… 221 F. Legal Injury
============================== G. Intentional Torts
=== H. Negligence
A. Definition of Agency I. Special Liability in Particular Activities
B. Powers J. Strict Liability
C. Express V. Implied Agency
D. Agency By Estoppel Book II--Damages

A.
General Considerations
B. Actual and Compensatory Damages
C. Moral Damages
D. Nominal Damages
E. Temperate or Moderate Damages
F. Liquidated Damages
G. Exemplary or Corrective Damages
H. Damages in Case of Death
I. Graduation of Damages
J. Miscellaneous Rules

CIVIL LAW
When Laws Take Effect (art.2)
================================ General Rule - 15 days after completion of
publication in OG or newspaper of general
TOPICS UNDER THE SYLLABUS circulation
A. PRELIMINARY TITLE
1. Effect and Effectivity of Law Exception - The law can provide for its own date
a. When laws become effective of effectivity
b. Mandatory effect of laws
c. Irretroactivity of laws
d. Waiver of rights b) Mandatory Effect of Laws
e. Repeal of laws
• Publication is MANDATORY for all
f. Judicial decisions statutes, including PDs and Eos
g. Presumption and Applicability • AOs and Regulations must also be
of Custom published if their purpose is to enforce or
h. Computation of Time implement existing law
i. Governing laws • An immediate effectivity clause does not
j. Rules on Prohibitive laws preclude the requirement of publication
2. Human Relations • Publication must be in full (otherwise,
a. Application it is not deemed published at all) since its
PURPOSE is to inform the public of its
b. Duty to act with justice,
contents
observe honesty and good faith • Non-publication of the law would offend
c. Actions for breach of promise due process (persons not aware of laws
to marry would be prejudiced)
d. Unjust enrichment at the • Effect of Publication: The people are
expense of others deemed to have conclusively been
e. Rights to personal dignity and notified of the law even if they have not
privacy read them.
f. Liability of Public Officers
Compliance with the Law (art.3):
========================= Ignorance of the law excuses no one from
================ compliance therewith (Ignorantia juris neminem
CIVIL LAW – branch of law that regulates excusat)
relations of assistance, authority and obedience
among family members as well as members of a NOTE: Applies only to mandatory and prohibitory
society for the protection of private interests laws (Consunji v. CA, [G.R. 137873 April 20,
2001])
NEW CIVIL CODE: took effect on August 30,
1950 c) Irretroactivity of Laws (art. 4)
==============================
=================== General rule: laws are not retroactive
TOPICS UNDER THE SYLLABUS
A. PRELIMINARY TITLE Exceptions: (PIERCER)
1. Effect and Effectivity of Laws 1. Penal laws when favorable to the accused
========================= who is not a habitual delinquent or
recidivist
================= 2. Interpretative statutes
3. When the law itself expressly provides
1. EFFECT AND EFFECTIVITY OF LAWS - Exception to the exception:
a. Ex post facto law
a) When the Laws Become Effective b. When retroactivity impairs the
obligations of contracts

4. Remedial statutes Customs which are contrary to law, public order
5. Curative statutes or public policy shall not be countenanced. A
6. Emergency laws custom must be proved as a fact according to the
7. Laws creating new substantive rights rules of evidence.
Mandatory and Prohibitory laws (art. 5): h) Computation of Time

General Rule - Acts executed against the
provisions of mandatory or prohibitory laws shall Legal Periods (Art. 13, as amended by Sec.
be void. 31, EO 292)
Year = 12 months; Month = 30 days, unless
Exception - If the law expressly provides for the referring to a specific calendar month; Day = 24
validity of acts committed in violation of a hours; Night = sunset to sunrise
mandatory or prohibitory provision of a statute.
i) Governing Laws (Arts. 14-17)
d) Waiver of Rights (art.6)
LAW Matters/Perso Principle/
General Rule- Rights may be waived ns Bound Doctrine
Penal Laws All those who Principle of
Exceptions - When waiver is live or Territoriality:
1. Contrary to law, public order, public sojourn in follow laws of the
policy, morals, good customs (e.g. waiver of Philippine place where
future inheritance, political rights, future support) territory crime was
2. Prejudicial to a third person with a right committed
recognized by law Status Citizens of Principle of
Laws the Nationality:
e) Repeal of Laws (art. 7) (relating to Philippines, follow one’s own
family rights including national laws
1. Express repeal - repeal of repealing law will and duties, those living
not revive the old law (unless expressly status, legal abroad
provided) capacity)
2. Implied repeal - the provisions of the Property Real and Lex rei sitae:
subsequent law are incompatible with those Laws personal follow laws of the
of the previous law property place where
Requisites: property is
1. Both laws cover the same subject situated
matter Laws on Forms and Lex loci
2. The latter law is repugnant to the Forms and solemnities celebrationis:
earlier law Solemnitie of contracts, follow laws of the
s wills, public country in which
f) Judicial Decisions instruments they are
executed
Judgment of the Courts (Arts. 8-9)
• Decisions of the SC form part of the law j) Rules on Prohibitive Laws (art. 17)
• All judges or courts have the duty to
render judgment even in the absence of a General Rule - Prohibitive laws concerning
law persons, their acts or property and laws which
have for their object public order, public policy or
g) Presumption & Applicability of good customs are not rendered ineffective by
Custom (Arts. laws, judgments promulgated or conventions
10-12) agreed upon in foreign country.
Construction and interpretation of laws come only Exception: Art. 26 (2) of Family Code
after it has been demonstrated that application is
impossible or inadequate without them. 2. HUMAN RELATIONS
a) Application

PRINCIPLE OF ABUSE OF RIGHTS (ART. 19) - ACCION IN REM VERSO (Art. 22) – action for
When one’s right is exercised for the purpose of recovery of what has been paid without just
prejudicing or injuring another cause.
Requisites/ Elements: Requisites:

1. There is a legal right or duty 1. Defendant has been enriched
2. Which is exercised in bad faith 2. Plaintiff suffered a loss
3. For the sole intent of prejudicing or injuring 3. Unjust Enrichment of defendant is without
another just or legal ground
4. Plaintiff has no other action based on
Standards to observe in the exercise of contract, quasi-contract, crime, or quasi-delict
one’s rights:
1. Act with justice • Distinguished from solutio indebiti: Mistake is
2. Give everyone his due an essential element in solutio indebiti but not
3. Observe honesty and good faith in accion in rem verso.
b) Duty to Act with Justice, Observe DUTY TO INDEMNIFY ONE FOR DAMAGE TO
Honesty and Good Faith HIS PROPERTY (Art. 23): when defendant was
benefitted even if not due to fault or negligence
ACTS CONTRA BONUS MORES (ART.21)-
When persons wilfully cause loss or injury to DUTY OF COURTS TO PROTECT A PARTY IN A
another CONTRACT (Art. 24): When such party is at a
disadvantage on account of his: (MIgIMenTO)
Elements: - Moral dependence
1. There is an act which is legal - Ignorance
2. But which is contrary to morals, good - Indigence
customs, public order, or public policy - Mental weakness
3. Done with intent to injure - Tender age
- Other handicap
Note:
• Similarities: In Arts. 19-21, at the core THOUGHTLESS EXTRAVAGANCE (Art. 25)
is bad faith or malice; and the May be prevented if the ff requisites are present:
aggrieved party must be indemnified. 1. During an acute public want or emergency
• Difference: Under Arts. 19 & 21, the 2. Person seeking to stop it is the gov’t or a
act must be done intentionally. Art. private charitable institution
20, however, does not distinguish (the
act may be done either willfully or e) Rights to Personal Dignity and
negligently, as long as the act is be Privacy
contrary to law).
Protection of Human Dignity (Art. 26)
c) Actions for Breach of Promise to Every person shall respect the dignity,
Marry personality, privacy and peace of mind of others
General Rule: Breach of promise to marry is not The following acts produce a cause of action for
actionable. damages, prevention and other relief:
Exception: When one party has already made (PryMIVex)
real efforts to prepare and spend for the wedding. 1. Prying into the privacy of another’s residence
Such act is unjustifiably contrary to good customs 2. Meddling with or disturbing the private life or
for which the defendant must be held answerable family relations of another
for damages in accordance with Art. 21 of the 3. Intriguing to cause another to be alienated
NCC. (Wassmer v. Velez 12 SCRA 649 from friends
(1964)) 4. Vexing or humiliating another on account of
his religious beliefs, lowly station in life, place
d) Unjust Enrichment at the Expense of of birth, physical defect, or other personal
Others condition

f) Liability of Public Officers
Relief Against Public Officials (Art. 27)

When one suffers material or moral loss because
a public officer fails without cause to perform his
duty, the officer is not protected by his office and
is personally liable.

I.
PERSONS 2. Insanity
3. State of being Deaf-mute
==============================
4. Imbecility
===================
5. Civil Interdiction
TOPICS UNDER THE SYLLABUS 6. Prodigality – state of squandering money or
A. General Provisions property with a morbid desire to prejudice the
1. Juridical Capacity v Capacity to heirs of a person (Martinez v. Martinez, 1 Phil.
Act 182)
2. Restrictions and Modifications on
Capacity to
Act Circumstances that Modify or Limit Capacity
B. Natural Persons to Act (art. 39)
1. When Personality Begins and Age Penalty Absence
Ends Insanity Prodigality Insolvency
2. Rules on Survivorship (Art.43, CC Imbecility Family Relations Trusteeship
v Rule 131 Sec Deaf-muteness Alienage
jj) CIVIL PERSONALITY – the aptitude of being the
C. Juridical Persons subject, active or passive, of rights and
1. Who are Juridical Persons obligations
2. When Personality Begins and
Ends B. NATURAL PERSONS
3. Rights of Juridical Persons
D. Domicile NATURAL PERSONS V. JURIDICAL PERSONS
Natural Persons Juridical Persons
=========================
A human being, has Exists only in
================= physical existence contemplation of law
Product of Product of legal
A. GENERAL PROVISIONS procreation fiction
1. Juridical Capacity v. Capacity to Act 1. When Personality Begins and Ends

(Art. 37)
JURIDICAL CAPACITY CAPACITY TO ACT Civil Personality, Natural Persons (Arts. 40-
Fitness to be the Power to do act with 43)
subject of legal legal effects
relations General Rule - Determined by birth,
Passive Active extinguished by death
Inherent Merely acquired
Lost only through death Lost through death and Exception - The conceived child shall be
other causes considered born for all purposes favorable to it,
Can exist without Cannot exist without provided it be born later under the following
capacity to act juridical capacity conditions:
Cannot be limited or Can be restricted, 1. It is alive at the time it is completely
restricted modified, or limited delivered from the mother’s womb
2. BUT if it had an inter-uterine life of less
Full Civil Rights: union of both juridical capacity than 7 months, only if it lives for at
and capacity to act least 24 hours after its complete
2. Restrictions on Capacity to Act delivery from the maternal womb
(Art. 38)
(MInD - ICIP) 2. Rules on Survivorship
Do not exempt the incapacitated person from Doubts as to Order of Death: As between two
certain obligations or more persons called to succeed each other, if
1. Minortiy there is doubt as to which of them died first,
whoever alleges the death of prior to the other

shall prove the same. In the absence of proof, it law creating them does not fix the
is presumed that they died at the same time and domicile)
there shall be no transmission of rights from one
to the other. A minor follows the domicile of his parents
• This rule applies only to cases involving • Domicile of origin can only be lost when a
succession change of domicile occurs.
C. JURIDICAL PERSONS Requirements for the acquisition of new

domicile:
1. Who are Juridical Persons 1. Bodily presence in a new locality
2. Intention to remain therein (animus
Civil Personality, Juridical Persons (Arts. 44- manendi)
47) 3. Intention to abandon the old domicile
1. The state and its political subdivisions (animus non revertendi)
2. Other corporations, institutions, and
entities for public interest or purpose, • The husband and the wife shall fix the family
created by law domicile. In case of disagreement, the court
3. Corporations, partnerships, and shall decide
associations for private interest or
purpose Kinds of Domicile
1. Domicile of origin – received by a person at
birth
2. When Personality Begins and Ends 2. Domicile of choice – the place freely chosen by
a person sui juris
• Creation: (1) and (2) are created by the 3. Constructive domicile – assigned to a child by
laws creating or recognizing law at the time of his birth
them, private corporations are
governed by the Corp. Code (B.P.
68) and partnership and ================================
associations are governed by the TOPICS UNDER THE SYLLABUS
provisions of the New Civil Code
E. Marriage (Arts. 1-54, Family
on partnerships
• Extinguished: by termination of existence
Code)
1. Concept
3. Rights of Juridical Persons 2. Essential and Formal
Requirements
1. Acquire and possess property of all kinds 3. Non-Essential Requirements
2. Incur obligations 4. Marriages Celebrated Outside
3. Bring civil or criminal actions the Philippines
CITIZENSHIP
a. Validity and Exceptions
• In the Philippine jurisdiction, what is followed b. Foreign Divorce
is the concept of jus sanguinis (citizenship by 5. Void Marriages
blood) as opposed to jus soli (citizenship by a. Void ab initio under Art. 35
place of birth) b. Void under Art. 36
c. Void for Being Incestuous
D. DOMICILE under Art. 37
d. Void for Reason of Public
DOMICILE ( Arts. 50-51) Policy under Art. 38
- For natural persons, it is the e. Imprescriptibility of action or
place of habitual residence
defense for declaration of
- For juridical persons, it is where
their legal representation is nullity of marriage. (Art. 39)
established or where they exercise
their principal functions (when the

f. Subsequent Marriage Without 2. or the residence of either party is
Judicial Declaration of Nullity of located that there is no means of
transportation to enable such
Previous Void Marriage (Art. 40)
party to appear personally before
6. Annullable Marriages the civil registrar,
7. Procedure and Effects of 3. cohabitation for 5 years,
Termination of Marriage then the marriage may be
============================== solemnized without the necessity of
================== a marriage license. (Article 27 and
E. MARRIAGE 28)
1. CONCEPT
2. Defect in any of the essential requisites –
Marriage is voidable
1. A special contract 3. Irregularity in any of the formal
2. of permanent union requisites – does not affect the validity of the
3. Between a man and a woman marriage but will make the party responsible
4. Entered into in accordance with law civilly, criminally, or administratively liable
5. For the establishment of conjugal and
family life Authorized Solemnizing Officers: (JPCCCM)
1. Incumbent member of the judiciary within
the court’s jurisdiction
2. ESENTIAL AND FORMAL REQUIREMENTS 2. Duly authorized priest, rabbi, imam or the
minister of any church or religious sect
1. Legal capacity of contracting parties 3. Ship captain or airplane chief only in
a. Must be between a man and woman articulo mortis between passengers or
b. Must be at least 18 years old crew members while the ship is at sea or
2. Consent freely given, IN the PRESENCE of the plane is in flight and also during
the solemnizing officer stopover at ports of call
4. Military commander of a unit to which a
Formal Requisites of Marriage: (ALC) chaplain is assigned only in articulo
1. Authority of solemnizing officer mortis between persons within the zone of
2. Valid marriage license (except in cases where military operations whether members of
a marriage license is not required) the armed forces or civilians and only in
• valid only for 120 days from issue in any part the absence of the chaplain
of the Philippines 5. Consul-general, consul or vice-consul only
3. Marriage ceremony where the contracting when contracting parties are both
parties appear before the solemnizing officer, Filipinos abroad
with their personal declaration that they take 6. Mayor (Local Government Code of 1991)
each other as husband and wife in the The vice mayor, in case the mayor is
presence of not less than two witnesses of temporarily incapacitated to discharge his
legal age duties
Effects: Marriages Exempt from License

1. Absence of essential or formal requisites Requirements:
– void ab initio 1. Marriage in articulo mortis (one of the
Exceptions: parties is at the point of death)
a. If solemnized by unauthorized person, the 2. If the residence of either party is so located
marriage will still be valid if either or both that there is no means of transportation
contracting parties believed in good faith that to enable such party to appear personally
the solemnizing officer had legal authority before the civil registrar
(Article 35(2)) 3. Marriage solemnized outside the
Those exempt from the license requirement. Philippines where no marriage license is
If either of the contracting parties are required by the country where it was
1. at a point of death (articulo solemnized
mortis),

4.
Marriage among Muslims or among 3.

members of ethnic cultural communities Marriage at a house or place designated by
in accordance with their customs the parties in a sworn statement upon
5. Marriage between persons who have lived their written request to the solemnizing
together as husband and wife for at least officer
five years and without any legal impediment
to marry each other
Requisites:
a. Man and woman must have been
living together as husband and wife OTHER REQUIREMENTS:
for at least five years before Either or Both Requires
marriage Parties
b. The parties must have no legal 18 years old and Parental consent
impediment to marry each other above but below 21 Marriage counseling
c. The fact of absence of legal 21 years old and Parental advice
impediment between the parties above but below 25 Marriage counseling
must be present at the time of
marriage EFFECTS
d. The parties must execute an Lack of parental Marriage is VOIDABLE
affidavit stating that they have lived consent
together for at least five years (and Lack of parental NO EFFECT on th
are without legal impediment to marry advice or marriage validity of marriage
each other) counselling However, this will
e. The solemnizing officer must suspend the issuance
execute a sworn statement that he of the marriage
had ascertained the qualifications of license for 3 months
the parties and that he had found no from the completion of
legal impediment to their marriage publication
If they get married
• No legal impediment during the entire during the 3-month
period: period without a
This 5-year period should be a period of license, the
cohabitation characterized by exclusivity – marriage shall be
meaning no third party was involved at any VOID
time – that is, unbroken. (Niñal vs. Bayadog, If they are able to
328 SCRA 122 (2000))
obtain a license
during the 3-month
AUTHORIZED VENUES FOR MARRIAGE:
period, the
marriage will still
General Rule: Must be solemnized publicly, and
be valid but civil
not elsewhere, in the:
and criminal
1. Chambers of the
liability may
judge or in open court
attach.
2. Church, chapel or
Office of consul-general, consul or vice-
consul
3. NON-ESSENTIAL REQUIREMENTS
Exceptions: Marriage Certificate

1. While a marriage certificate is considered the
Marriage at the point of death (articulo primary evidence of a marital union, it is not
mortis) regarded as the sole and exclusive evidence of
2. marriage. Jurisprudence teaches that the fact of
Marriage in remote places marriage may be proven by relevant evidence
other than the marriage certificate. Hence, even
a person’s birth certificate may be recognized as

competent evidence of the marriage between his were Filipino citizens but, later on, one of
parents. (Anonuevo vs. Int. Estate of them becomes naturalized as a foreign citizen
Jalandoni, [GR 178221, December 1, 2010]) and obtains a divorce decree. The Filipino
spouse should be allowed to remarry as if the
4. MARRIAGES SOLEMNIZED ABROAD other party was a foreigner at the time of the
solemnization of the marriage. Republic v.
a) Validity and Exceptions Orbecido III, 472 SCRA 114 (2005)
• For the second paragraph of Article 26 to
General Rule: Marriages solemnized outside the apply, a spouse who obtained the divorce
Philippines in accordance with the laws of the must not be a Filipino at the time of the
foreign country shall be valid here (lex loci divorce. Otherwise, the divorce is not
celebrationis). – Basis: Principle of comity recognized in the Philippines. Republic v.
• However, if solemnized inside the Philippine Iyoy, G.R. No. 15277, September 21,
Consulate abroad, Philippinelaws must be 2005
observed • Additionally, an action based on
the second paragraph of Article 26 of the
Family Code is not limited to the recognition
Exceptions: of the foreign divorce decree. If the court
1. Where either or both parties are below finds that the decree capacitated the alien
18 years old spouse to remarry, the courts can declare
2. Bigamous or polygamous marriage that the Filipino spouse is likewise
(except Art. 41 on presumptive death of capacitated to contract another marriage. No
spouse) court in this jurisdiction, however, can make a
3. Mistake in identity similar declaration for the alien spouse (other
4. Marriages void under Art. 53 – than that already established by the decree),
contracted following the annulment or whose status and legal capacity are generally
declaration of nullity of a previous governed by his national law. Corpuz vs.
marriage but before partition Sto. Tomas, G.R. No. 186571, August
5. Psychological incapacity 11, 2010
6. Incestuous marriages
7. Marriage void for reasons of public 5. VOID MARRIAGES
policy
a) Void ab initio under Art. 35
b) Foreign Divorce
1. Contracted by any party below 18 years
Divorce by Foreigner-Spouse: old
• If a Filipino is married to a foreigner and the
latter subsequently obtains a valid divorce 2. Solemnized by unauthorized solemnizing
abroad capacitating him/her to remarry, the officer (Except if either or both parties
Filipino spouse shall likewise have the believed in good faith that the officer had
capacity to remarry under the Philippine law. authority)
(Art. 26, par. 2)
• Requisites: 3. Solemnized without marriage license
a.) There is a valid marriage that had been (Except when license not required)
celebrated between Filipino citizen and a
foreigner • A petition to declare the marriage void
b.) A valid divorce is obtained abroad by due to absence of marriage license, filed
the alien spouse capacitating him or her after the court denied a petition to
to remarry declare the marriage void due to
psychological incapacity, is barred by
The traditional rule applies when parties at the RES JUDICATA. There is only one cause
time of celebration are a Filipino and an alien of action which is the nullity of marriage.
BUT Petitioner is estopped from asserting that
• This includes cases involving parties who, at the first marriage had no marriage license
the time of the celebration of the marriage, because he impliedly admitted the same
when he did not question the absence of a

marriage license in the first case. Mallion • Psychological Incapacity must be judged
v. Alcantara, G.R. No. 141528, on a case to case basis. It should refer to
October 31, 2006 no less than a mental (not physical)
incapacity. It must be characterized by a.
4. Bigamous or polygamous marriages gravity b. juridical antecedence c.
incurability. Carating-Siaynco v.
Exception: Art. 41 – Marriage Siaynco, 441 SCRA 422 (2004)
contracted by a person whose spouse has
been absent for 4 years (ordinary • Mere showing of irreconcilable differences
absence) or 2 years (extraordinary and conflicting personalities does NOT
absence), where such person has a well constitute psychological incapacity.
founded belief that his/her absent spouse Carating-Siaynco v. Siaynco, 441
is already dead, and after the absent SCRA 422 (2004)
spouse is judicially declared
presumptively dead, and at the time of • Mere sexual infidelity or perversion and
the marriage ceremony is in good faith abandonment do not by themselves
together with the subsequent spouse constitute psychological incapacity within
the contemplation of the Family Code.
5. Mistake in identity Neither could emotional immaturity and
• The contemplated mistake here refers irresponsibility be equated with
to the actual physical identity of the psychological incapacity. Dedel v. CA
other party, and not merely mistake in 421 SCRA 461 (2004)
the name, character, age, or other
attributes of the person. • It must be shown that these acts are
manifestations of a disordered personality
6. Subsequent marriage void under Art. 53 which make respondent completely
- A person whose marriage has been unable to discharge the essential
annulled may remarry as long as after obligations of a marital state. Root cause
the marriage is annulled, the properties must be traceable prior to the marriage
of the spouses must be partitioned and ceremony. Dedel v. CA 421 SCRA 461
distributed and the presumptive (2004)
legitimes of the children be distributed.
Furthermore, the judgment of • One of the essential marital obligations is
annulment or absolute nullity, the
"To procreate children based on the
partition and distribution, and the
universal principle that procreation of
delivery of the presumptive legitimes
children through sexual cooperation is the
must be recorded in the appropriate
basic end of marriage." Constant non-
civil registry and registries of property.
fulfillment of this obligation will finally
Failure to comply with these requisites
destroy the integrity or wholeness of the
will make the subsequent marriage
marriage. The senseless and protracted
void ab initio. Further, failure to record
refusal of one of the parties to fulfill this
in the proper registries will mean that
marital obligation is equivalent to
such will not affect third persons (Arts.
psychological incapacity. Chi Ming Tsoi
52-53)
v. CA, G.R. No. 119190, January 16,
1997
NOTE: The enumeration of void marriages under
Art. 35 is not exclusive.
• Psychological incapacity is not equated
b) Void under Art. 36 with insanity or total mental inability to
function in all aspects of human life…it is
Where any of the parties, who at the time of the a ground restricted to psychological
celebration of the marriage, was psychologically incapacity “to comply with marital
incapacitated to comply with the essential marital obligations”. Perez-Ferraris v. Ferraris
obligations, even if incapacity becomes manifest GR No. 162368 (2006)
only after solemnization.

• A finding of psychological incapacity on 7. Interpretations given by the National
the part of one spouse shows non- Appellate Matrimonial Tribunal of the
cognizance of one’s essential marital Catholic Church in the Philippines, while not
obligation, and therefore negates bad controlling or decisive, should be given
faith. As a consequence moral and great respect by our courts
exemplary damages cannot be awarded 8. The trial court must order the prosecuting
against him/her because bad faith is an attorney or fiscal and the Solicitor General
essential element in awarding moral and to appear as counsel for the state
exemplary damages. Award of moral
damages should be predicated, not on the • The foregoing guidelines do not require that a
mere act of entering into the marriage, physician examine the person to be declared
but on specific evidence that is was done psychologically incapacitated. What is
deliberately and with malice by a party important is that the totality of evidence can
who had known of his or her disability and adequately establish the party’s psychological
yet willfully concealed the same. condition. Republic v. CA & Molina, 268
Buenaventura v. CA, GR No. 127358, SCRA 198 (1997)
March 31, 2005
• In determining if one of the contracting
The Court emphasizes that the burden falls parties is psychologically incapable, the
upon petitioner, not just to prove that private courts should interpret the provision on a
respondent suffers from a psychological case-to-case basis. Courts should be guided
disorder, but also that such psychological by experience, the findings of experts and
disorder renders her "truly incognitive of the researchers in psychological disciplines, and
basic marital covenants that concomitantly by decisions of church tribunals. Te v. Te,
must be assumed and discharged by the G.R. No. 161793, February 13, 2009
parties to the marriage." Psychological
incapacity must be more than just a "difficulty," c) Void for Being Incestuous under Art.
a "refusal," or a "neglect" in the performance of 37
some marital obligations. An unsatisfactory
marriage is not a null and void marriage. Whether relationship is legitimate or illegitimate:
Baccay vs. Baccay, GR No. 117318, 1. Between ascendants and descendants of
December 1, 2010 any degree
2. Between brothers and sisters, whether full
JURISPRUDENTIAL GUIDELINES (BRE-IGO-IC) or half blood
(Republic v. CA & Molina 268 SCRA 198 (1997))
d) Void for Reason of Public Policy
1. Burden of proof to show the nullity of under Art. 38
marriage is upon the plaintiff
2. The root cause of the psychological 1. Between collateral blood relatives up to
incapacity must be: the 4th civil degree
a. Medically or clinically identified - There is no prohibition regarding
b. Alleged in the complaint marriages between collateral
c. Sufficiently proven by experts blood relatives by half-blood
d. Clearly explained in the decision 2. Between step-parents and step-children
3. The incapacity must be proven to be 3. Between parents-in-law and children-in-
existing at the time of the celebration of the law
marriage 4. Between adopting parent and adopted
4. Such incapacity must be shown to be child
medically or clinically permanent or 5. Between surviving spouse of the adopter
incurable and the adopted
5. Such illness must be grave enough to bring 6. Between surviving spouse of the adopted
about the disability of the party to assume and the adopter
the essential obligations of marriage 7. Between adopted and legitimate child of
6. Essential marital obligations must be those adopter
embraced by Art. 68-71, as well as Art. 220, 8. Between adopted children of same
221, and 225 of the Family Code. adopter

9. Between parties where one, with the -In a case for concubinage, the accused
intention to marry the other, killed that need not present a final judgment declaring
other person’s spouse or his/her own his marriage void for he can adduce
spouse evidence in the criminal case of nullity of
No prior criminal conviction by the his marriage other than proof of final
court for the killing is required by the judgment declaring his marriage void.
law since mere preponderance of Hence, the pendency of the civil action for
evidence is required to prove the nullity of marriage does not pose a
killing. prejudicial question in a criminal case for
concubinage.
Article 38 is an exclusive list.
•However, a judicial declaration of nullity is
Under the new Family Code, the following can not needed where no marriage ceremony
now marry each other: at all was performed by a duly authorized
a. Brother-in-law solemnizing officer as where the parties
and sister-in-law merely signed a marriage contract on
b. Stepbrother their own. The mere signing of a marriage
and stepsister contract bears no semblance to a valid
c. Guardian and marriage and thus needs no judicial
ward declaration of nullity. Lucio Morigo v.
d. Adopted and People, G.R. No. 145226, February 6,
illegitimate child of the adopter 2004
e. Parties who
have been convicted of adultery or •Second marriage is still bigamous even if the
concubinage first marriage is judicially declared void
after contracting the second marriage,
NOTE: R.A. 6995 (Mail Order Bride Act) declares only if the first marriage ostensibly
as unlawful the practice of matching Filipino transpired as there was a marriage
women for marriage to foreign nationals on a ceremony. However, if the first marriage
mail-order basis and other similar practices was void due to the fact that no marriage
including the advertisement, publication, printing ceremony was solemnized at all, then the
or distribution of brochures, fliers, and other second marriage is not bigamous. Morigo
propaganda materials in furtherance thereof. v. People, 422 SCRA 376 (2004)
e) Imprescriptibility of action or NOTE: Even if a marriage is void, it must be

defense for declaration of nullity of declared void first by final judgment before
marriage. (Art. 39) the parties to such void marriage can
remarry. The parties cannot decide for
A marriage that is invalid from the beginning is themselves the invalidity of their marriage.
non-existent, and in effect, cannot be dissolved.
The judicial decree to declare its nullity is a mere EXCEPTION: When the purpose is other than
confirmation of the voidness of the marriage, remarriage, a collateral attack of the marriage is
hence this petition is imprescriptible. allowed.
f) Subsequent Marriage Without PRESUMPTION OF DEATH FOR REMARRIAGE

Judicial Declaration of Nullity of (Art. 41)
Previous Void Marriage (Art. 40) General Rule: Marriage contracted by any
person during the subsistence of a previous
-For the purposes of remarriage, the only marriage is VOID
legally acceptable basis for declaring a
previous marriage an absolute nullity is a Exception: If before the celebration of the
final judgment declaring such previous subsequent marriage:
marriage void, whereas, for purposes other a.The previous spouse had been absent for
than remarriage, other evidence is 4 consecutive years (ordinary absence)
acceptable or 2 years (extraordinary absence) and

b.The remaining spouse has a well-founded b. If none, in favor of the children of
belief that the absent spouse is already the guilty spouse by previous
dead marriage
c.Judicial declaration of presumptive death c. In default of children, in favor of the
- In this case, the subsequent marriage innocent spouse
is valid but it shall be automatically 3. Donations by reason of the marriage
terminated by the recording of the remain valid except if the donee
affidavit of reappearance of the contracted the marriage in bad faith
absent spouse. 4. The innocent spouse may revoke the
- Without filing of the affidavit of designation of the spouse in bad faith as
reappearance, there will exist two the beneficiary in any insurance policy,
valid marriages (valid bigamous even if designation is stipulated as
marriage) irrevocable, and
5. The spouse who contracted the
Exception to the Exception: If both spouses of subsequent marriage in bad faith shall be
the subsequent marriage acted in bad faith, such disqualified to inherit from the innocent
marriage is void ab initio (Art. 44) spouse by testate or intestate succession
Effect of Reappearance NOTE: The above effects apply to voidable

• The subsequent bigamous marriage under bigamous marriages. Except for (1), the
Art. 41 remains valid despite reappearance of above effects also apply to marriages
the absentee spouse which are annulled or declared void ab
initio under Art. 40.
• UNLESS, the reappearance made in a sworn
statement is recorded in the civil registry in 6. ANNULLABLE MARRIAGES
the place where the parties to the subsequent
marriage resides. In such case, the Grounds for Annulment (art. 45): (PUFFIS)
subsequent marriage is automatically 1. Lack of parental consent
terminated. 2. Either party is of unsound mind
3. Fraudulent means of obtaining consent of
• HOWEVER, if there was a previous judgment either party
annulling or declaring the first marriage a
nullity, the subsequent bigamous marriage • Circumstances constituting fraud:
remains valid. (Art. 46)
a. Non-disclosure of conviction by
NOTE: Summary proceedings under the Family final judgment of crime involving
Code are final and executory pursuant to Article moral turpitude
247. Hence, summary proceeding for the b. Concealment of pregnancy by
declaration of presumptive death of an absent another man
spouse under Article 41 of the Family Code is non- c. Concealment of sexually
appealable. Republic v. Tango, G.R. No. transmissible disease, regardless
161062, July 31, 2009 of nature, existing at the time of
marriage
Effects of Termination of Subsequent d. Concealment of drug addiction,
Marriage: (LDDRI) habitual alcoholism,
1. Children of the subsequent marriage homosexuality and lesbianism
conceived prior to its termination shall be 4. Force, intimidation or undue influence
considered legitimate 5. Physical incapability of either party to
2. The absolute community or conjugal consummate the marriage with the other,
partnership shall be dissolved and and such incapacity continues and
liquidated appears to be incurable
Requisites of Annulment due to
• If either spouse acted in bad faith, Impotence:
his/her share in the net profits shall be a. Impotence exists at the time of the
forfeited: celebration of marriage
a. In favor of the common children b. Permanent

c. Incurable The STD must be The STD does not have
d. Unknown to the other spouse serious and incurable to be serious and
e. The other spouse must not also be appears incurable
impotent
• Doctrine of Triennial Cohabitation:
Presumption that the husband is
impotent should the wife still remain a
virgin after 3 years of living together
with her husband.
6. Affliction of Sexually Transmissible
Disease found to be serious and which
appears incurable
Elements:
a. Existing at the time of marriage
b. Sexually transmissible disease
c. Serious
d. Appears incurable
ARTICLE 45 ARTICLE 46
The STD is a ground The STD is a type of
for annulment fraud which in turn is a
ground for annulment
The STD does not The STD must be
have to be concealed concealed

EFFECTS OF TERMINATION OF MARRIAGE
GROUNDS FOR ANNULMENT WHO CAN FILE PRESCRIPTIVE PERIOD RATIFICATION
Lack of parental consent (PC) a. Underage party a. Within 5 years after Free cohabitation after reaching 21
(18-21) turning 21
b. Parent or guardian b. Before child reaches 21
Insanity of one party Sane spouse 2 views: Free cohabitation after insane spouse
(INSANITY) Sempio-Diy: regains sanity
Before death of other party
Dean Del Castillo:

Within 5 years from the time
the right or action accrues
Guardian of insane Anytime before the death

spouse of either party
Insane spouse During the lucid interval or
after regaining sanity also
before death of other party
Fraud Injured Party Within 5 years after Free cohabitation even with full
discovery of Fraud knowledge of facts constituting the
fraud
Vitiated consent Injured Party Within 5 years from time Free cohabitation after the cause (force,
force, intimidations or undue intimidation, undue influence)
influence disappeared or disappeared or ceased
ceased *intimidation can be on the person or the
property of the injured party and his/her
immediate family
Incapability to Consummate/ Injured Party Within 5 years after the No ratification since defect is permanent.
Sexually transmissible disease marriage ceremony
(CONSUMMATE/STD)

EFFECTS OF VOIDABLE BIGAMOUS MARRIAGE, DECLARATION OF NULLITY, AND ANNULMENT
BASIS VOIDABLE BIGAMOUS MARRIAGE (ART. 41) DECLARATION OF ANNULMENT
NULLITY
Status of Children of subsequent marriage conceived before its termination Illegitimate except Children conceived or born before
children – legitimate Art. 36 and Art. 53 annulment decree –
legitimate
Property ACP/CPG shall be liquidated. The share in the net profits of Same Same
Relations community property of the spouse who contracted the marriage
in bad faith, shall be forfeited in favor of common children or if
there are none, children of the guilty spouse by previous
marriage or in default, the innocent spouse (common children
-> children of guilty spouse by previous marriage -> innocent
spouse)
Donations Shall remain VALID except Same Same
Propter If donee contracted the marriage in bad faith, donations
Nuptias propter nuptias made to the donee are revoked by
operation of law.
If both spouses acted in bad faith, donations propter
nuptias made by one in favor of the other are revoked by
operation of law.
Insurance If one spouse acted in bad faith, innocent spouse may revoke Same Same
his designation as beneficiary in the insurance policy even if
such designation be stipulated as irrevocable
Successio If one spouse contracted the marriage in bad faith, he shall be Same Same
n disqualified to inherit from the innocent spouse both testate and
intestate

DISTINCTION BETWEEN VOID AND VOIDABLE MARRIAGES
BASIS VOID VOIDABLE
As to nature Inexistent from the time of performance Valid until annulled
As to susceptibility to Cannot be ratified Can be ratified either by free cohabitation or prescription
ratification
As to effect on property No community property, only co-ownership (Art Absolute community exists unless another system is agreed
147/148) upon in marriage settlement (Default: ACP)
As to effect on children Children are illegitimate Children are legitimate if conceived before decree of
Exceptions: annulment
aa In case of psychological incapacity (Art 36)
aa Children born of subsequent marriage (Art 53)
As to how marriage may a. May be attacked directly or collaterally but for a. Cannot be attacked collaterally, only directly,
be impugned purpose of remarriage, there must be judicial i.e. there must be a decree of annulment
declaration of nullity. b. Can no longer be impugned after death of one
b. Can still be impugned even after death of of the parties
parties c. Action prescribes
c. Action for nullity does not prescribe

7. PROCEDURE AND EFFECTS OF legal charge c. During lucid
TERMINATION OF MARRAIGE of insane interval or
after
A.M. No. 02-11-10-SC c. Insane regaining
PROPOSED RULE ON DECLARATION OF spouse sanity
ABSOLUTE NULLITY OF VOID MARRIAGES 3. Fraud Injured Party Within 5 years
AND ANNULMENT OF VOIDABLE from
MARRIAGES discovery of
fraud
SCOPE: 4. Vitiated Injured Party Within 5 years
• Petitions for declaration of absolute nullity Consent from time of
of void marriages and annulment of force,
voidable marriages under the Family Code intimidation or
• The Rules of Court shall apply suppletorily undue
influence
PETITION FOR DECLARATION OF disappeared
ABSOLUTE NULLITY: or ceased
5. Injured Party Within 5 years
Who may file: solely the husband or wife Incapability to after the
Consummate/ marriage
What to allege: If based on psychological Sexually ceremony
incapacity, complete facts showing either one is Transmitted
incapacitated from complying with marital Disease
obligations at the time of the celebration of the
marriage including physical manifestations, if A. Venue: Family Court of the province or city
any where the petitioner or the respondent has
been residing for at least 6 months prior to the
• Actions or defenses shall NOT prescribe date of filing (or non-resident respondent:
where he may be found in the Philippines) AT
PETITION FOR ANNULMENT OF VOIDABLE THE ELECTION OF THE PETITIONER.
MARRIAGES
Who may file: B. Petition shall allege:
GROUND PARTY TO PRESCRIPTIV 1. Complete facts constituting the cause of
FILE THE E PERIOD action
SUIT 2. Names and ages of the common children of
1. No Parental a. Parent or a. Anytime the parties and specify the regime governing
Consent Guardian before charge their property relations, and the properties
having Legal reaches 21 involved
Charge of yrs. old 3. Verified and accompanied by a certification
“no-consent” against forum shopping, which must be
party signed personally by the petitioner
b.“No- b. Within 5 • Petition may not be signed solely by

Consent” years after counsel or through an attorney-in-fact
Party reaching 21 • If petitioner is in a foreign country, the
2. Insanity a. Sane a. Anytime verification/certification shall be
spouse before death authenticated by the duly authorized
without of either party officer of the Philippine embassy or
knowledge of legation, consul general, consul, vice-
insanity consul, or consular agent in said country
b. Anytime
b. Relative, before death 4. Filed in 6 copies, a copy to be served to the
guardian or of either party OSG and the Office of the City or Provincial
person having Prosecutor, w/in 5 days from the date of its

filing and submit to the court proof of such F. Investigation Report of the Public
service w/in the same period Prosecutor
• To be made w/in 1 month after the
• Failure to comply with requirements receipt of the court order
may be a ground for immediate • Shall state whether the parties are in
dismissal of the petition. collusion and basis for such finding,
serve copies to parties & counsels
C. Service of Summons (a) there is collusion – parties shall file
• Governed by the Rule 14 of the Rules of their respective comments w/in 10
Court and the following: days from receipt of a copy
1. Respondent cannot be located at his (b) no collusion – set the case for pre-
given address or his whereabouts are trial
unknown and cannot be ascertained by • Public prosecutor shall represent the
diligent inquiry: State
(a) Service of summons by publication once • Investigation is a condition sine qua non
a week for 2 consecutive weeks in a for further proceedings in cases where
newspaper of general circulation in the the respondent does not answer. This is
Philippines and in such places as the true even if during the hearing the fiscal
court may order participated and cross-examined the
(b) Served at respondent’s last known witnesses. Corpus vs. Ochoterena,
address by registered mail or any other 435 SCRA 446 (2004)
means the court may deem sufficient
G. Court may require a social worker to conduct
2. Summons to be published shall be a case study and submit report at least 3 days
contained in a court order with the before the pre-trial
following data:
(a) title of the case H. Pre-trial is MANDATORY.
(b) docket number • Notice
(c) nature of the petition 1. Notice of pre-trial shall be served to
(d) principal grounds of the petition and the the parties, their counsels and the
reliefs prayed for public prosecutor, containing: date
(e) a directive for the respondent to answer of pre-trial conference and order
w/in 30 days from the last issue of the directing the parties to file pre-trial
publication brief, ensuring its receipt by the
adverse party at least 3 days before
D. Motion to Dismiss: not allowed, except the date of pre-trial
for lack of jurisdiction over the subject matter 2. Notice of pre-trial shall still be sent
or over the parties (however, any ground that to respondent even if he did not file
might warrant a dismissal may be raised as an an answer
affirmative defense in an answer)
• Personal Appearance
1. Parties should appear personally at
E. Answer
the pre-trial
• Verified by the respondent himself & 2. Failure of petitioner to appear at the
filed w/in 15 days from service of pre-trial personally w/o the valid
summons or w/in 30 days from the last cause, case dismissed
issue of publication in case of service of 3. Failure to file the pre-trial brief or to
summons by publication comply with its required contents,
• Failure to answer shall NOT make him in case dismissed
default 4. If respondent filed his answer but
• Court will order the public prosecutor to fails to appear at the pre-trial, the
investigate if there is collusion if no court shall proceed but public
answer is filed or when answer does not prosecutor required to investigate
tender an issue reason for non-appearance (if due to
collusion)

•
Pre-trial conference F. LEGAL SEPARATION

Court may refer issues to mediator, 1. Grounds
but should this fail or is not availed of,
2. Procedure
proceed with pre-trial conference
• Pre-trial order
3. Defenses
1. Parties are not allowed to raise 4. Liquidation
issues or present witnesses and 5. Effects of Legal Separation
evidence other than those stated in Pendente Lite
the pre-trial order 6. Reconciliation Effects
2. Parties have 5 days from receipt of ========================
pre-trial order to make corrections
==================
or modifications
3. Public prosecutor shall appear for
1. GROUNDS
the State to prevent collusion
(PRC-FAL-BILA)
1. Repeated physical violence or grossly
J. Prohibited Compromise
abusive conduct directed against petitioner,
(a) Civil status of persons
a common child or a child of the petitioner
(b) Validity of marriage or legal separation
2. Physical violence or moral pressure to
(c) Any ground for legal separation
compel the petitioner to change religious or
(d) Future support
political affiliation
(e) Jurisdiction of courts
3. Attempt of respondent to corrupt or induce
(f) Future legitimes
the petitioner, a common child, or a child of
the petitioner, to engage in prostitution, or
K. Decision
connivance in such corruption or
• Copies will be served on the parties, inducement
including the SolGen and public 4. Final judgment sentencing respondent to
prosecutor imprisonment of more than 6 years (even if
• Final after expiration of 15 days from pardoned)
notice to the parties 5. Drug addiction or habitual alcoholism
• Should be registered in the Civil Registry 6. Lesbianism or homosexuality
where the marriage was celebrated and in 7. Subsequent bigamous marriage
the Civil Registry of the place where the 8. Sexual infidelity or perversion
Family Court is located 9. Attempt by respondent against the life of
the petitioner
L. Appeal 10. Abandonment for more than 1 year without
• Not allowed if no motion for justifiable cause
reconsideration or new trial is made
w/in 15 days from notice of judgment Grounds to Deny Legal
Separation/Defenses to Legal Separation:
M. Death (C4-D-GRP)
• Party dies before entry of judgment:
case closed and terminated w/o 1. Condonation
prejudice to the settlement of the estate • failure of the husband to look for his
in proper proceedings in the regular adulterous wife is not condonation to
courts wife’s adultery
• Party dies after the entry of judgment: 2. Consent
binding upon the parties and their successors- 3. Connivance
in-interest in the settlement of the estate in the 4. Collusion
regular courts. 5. Mutual guilt
N. Date of Effectivity: March 15, 2003 6. Prescription – action for legal separation
must be filed within five years from the time
============================ of the occurrence of the cause of action
====================

7. •
P
Death of either party during the pendency of rocedure is almost the same as in the Rule
the case Lapuz-Sy v. Eufemio, 43 SCRA on Declaration of Absolute Nullity &
177 (1972) Annulment (see above)
8. Reconciliation of the spouses during the • Creditors are furnished copies of the
pendency of the case petition
• Pre-trial set not earlier than 6 months from
Effects of Separation: filing of the petition for possibility of
1. Spouses are entitled to live separately reconciliation (COOLING OFF PERIOD)
2. Marriage bond is not severed
3. Dissolution of property regime Exception: There is no cooling-off period if the
4. Forfeiture of the share of the guilty spouse ground alleged are those under R.A. 9262
in the net profits of the ACP/CPG (Violence Against Women & Children). The
5. Custody of minor children to innocent court shall proceed in the main case and other
spouse (subject to Art. 213: parental incidents of the case as soon as possible. R.A.
authority shall be exercised by parent 9262, Sec. 19.
designated by the court)
• The imposed custodial regime under the • The abandonment contemplated is one
second paragraph of Article 213 is limited in without justifiable cause for more than
duration, lasting only until the child’s one year. As it was established that
seventh year. From the eighth year until the Lucita left William due to his abusive
child’s emancipation, the law gives the conduct, such does not constitute
separated parents freedom, subject to the abandonment contemplated by the said
usual contractual limitations, to agree on provision. Ong Eng Kiam vs. Ong,
custody regimes they see fit to adopt. G.R. No. 153206, October 23, 2006
(Dacasin vs. Dacasin, GR168785, February
5, 2010) ============================
6. Guilty spouse is disqualified from intestate ====================
succession and provisions made by TOPICS UNDER THE SYLLABUS
innocent spouse in his favor in a will shall
be revoked by operation of law
G. RIGHTS AND OBLIGATIONS
7. Innocent spouse may revoke the donation BETWEEN HUSBAND AND WIFE
made by him in favor of the offending ========================
spouse. However, alienations, liens and ==================
encumbrances registered in good faith
before the recording of the complaint for Obligations of Husband and Wife (L2H2ds)
revocation in the registries of property shall 1. Live together
be respected. 2. Observe mutual love, respect and fidelity
8. Innocent spouse may revoke designation of 3. Render mutual help and support
guilty spouse as beneficiary in the 4. Management of the household
insurance policy even if such designation be 5. Fix the family domicile
stipulated as irrevocable 6. Joint responsibility for the support of the
family
2. PROCEDURE FOR LEGAL SEPARATION
Profession
A.M. No. 02-11-11-SC General Rule - Either spouse may exercise
PROPOSED RULE ON LEGAL SEPARATION any legitimate profession/business without the
consent of the other
• The Rules of Court shall apply suppletorily Exception - The other spouse may object on
valid, serious and moral grounds. In
Who may file: solely the husband or wife case of disagreement, the court
shall decide whether
When to file: within 5 years from the a. The objection is proper AND
occurrence of any of the grounds b. Benefit has accrued to the family
before and after the objection.

• • If benefit accrued to Requisites of a Valid Marriage Settlement:
the family before the objection, the (WSB-TC-CR)
resulting obligation shall be enforced 1. In writing
against the separate property of the spouse 2. Signed by the parties
who has not obtained consent 3. Executed before the celebration of
marriage
• If benefit accrued to the family after the 4. To fix the terms and conditions of their
objection has been made, the resulting property relations
obligation shall be enforced against the 5. If parental consent is needed for the
community property marriage, the parent/guardian must be
made a party to the agreement
============================ 6. If the party executing the settlement is
==================== under civil interdiction or any other
TOPICS UNDER THE SYLLABUS disability, the guardian appointed by the
court must be made a party to the
H. PROPERTY RELATIONS BETWEEN settlement
HUSBAND AND WIFE 7. Registration (to bind 3rd persons)
1. How Governed
2. Marriage Settlements General Rule: Property Relations are governed
3. Donations by Reason of by Philippine laws
Marriage Exceptions:
1. When both are aliens, even if married in the
4. Property Relations of Union
Phils.
with Marriage 2. As to extrinsic validity of contracts
a.System of Absolute Marriage 3. Contrary stipulation
b. Conjugal Partnership of Gains
5. Separation of Properties During 3. DONATIONS BY REASON OF
Marriage MARRIAGE (Donations Propter
6. Regime of Separation of Nuptias)
Property
Before Marriage
======================== General Rule: Future spouses cannot donate
================== to each other more than 1/5 of their present
property (excess shall be considered void)
1. WHAT GOVERNS PROPERTY Requisites:
RELATIONS BETWEEN SPOUSES 1. Made before celebration of marriage
1. Marriage settlement – future spouses may 2. In celebration of marriage
agree upon the regime of ACP, CPG, 3. In favor of one or both future spouses
complete separation of property, or any Exception: If they are governed by ACP
other regime
During Marriage
2. Family Code – if there is no marriage General Rule: Donations made by spouses to
settlement or when the regime agreed upon each other during the marriage are VOID
therein is void, the system of ACP shall REASON:
govern 1. To protect unsecured creditors from
being defrauded
3. Local customs 2. To prevent stronger spouse from
imposing upon the weaker one the
transfer of the latter’s property to the
former
3. To prevent indirect modification of the
2. MARRIAGE SETTLEMENT marriage settlement
Exceptions:
1. Moderate gifts on the occasion of any
family rejoicing

2. Donation mortis causa n
•Applies to common law spouses (Art. 87) Prescriptive Periods for Filing Action for
Revocation of Donation Propter Nuptias
Grounds to Revoke Donation Propter (Based on Sta. Maria)
Nuptias: (CARNIVL) If marriage is not 5 years (Art. 1149
1. Marriage is not celebrated celebrated NCC) from the time
2. Marriage is judicially declared void ab initio (Except: donations in marriage is not
3. Marriage without the needed parental marriage settlements solemnized on the
consent automatically void if fixed date
4. Marriage is annulled and donee is in bad marriage not
faith celebrated)
5. If it is with a resolutory condition and the
condition is complied with If marriage is judicially
6. In legal separation and donee is the guilty declared void, it
spouse depends: By operation of law if
7. Donee commits acts of ingratitude such as: (a) If subsequent donee-spouse
a. Commits an offense against the person, marriage is void contracted subsequent
honor or property of the donor, his wife, pursuant to Art. 40 in void marriage in bad
or his children under his parental relation to Arts. 52 faith
authority and 53, because
b. Imputes to the donor any criminal offense contracted by a
or any act involving moral turpitude, spouse before prior
unless the crime was committed against void marriage is
the donee himself, his wife, or his children judicially declared void 5 years from finality of
under his authority judicial declaration of
c. Unduly refuses to support the donor when (b) Judicially declared nullity (if action to
he is legally or morally bound to give such void on grounds other recover property)
support than Art. 40 in relation
to Arts. 52 and 53
DONATION PROPTER NUPTIAS v. When marriage takes 5 years
ORDINARY DONATION place without the
DONATIONS required parental
ORDINARY
BASIS PROPTER consent
DONATIONS
NUPTIAS If resolutory condition 5 years from
Governed by the is complied with happening of condition
rules on ordinary When marriage is 5 years from finality of
donations except Governed by annulled and donee in decree
Formaliti if future rules on bad faith
es property, it must donations (Arts. If donee commits an 1 year from donor’s
conform with 725-773 NCC) act of ingratitude knowledge of that fact
formalities of In cases of legal 5 years from the time
wills separation the decree of
No limit except separation has become
May be donated
that donor shall final
Present but up to 1/5 of
leave property
Property donor's present
enough for his
property 4. PROPERTY RELATIONS
support
May be included a. System of Absolute Community
Future provided Cannot be (acp)
Property donation is included
mortis causa The property regime of spouses in the absence
Grounds Art. 86 of Family Arts. 760, 764, of a marriage settlement or when the regime
for Code 765 NCC agreed upon is void.
revocatio

4.
E
NOTE: Shall commence at the precise moment xpenses of litigation between spouses
that the marriage is celebrated. Any stipulation, unless the suit is found to be groundless
express or implied, for the commencement of 5. Ante-nuptial debts which redounded to the
the regime at any other time shall be VOID. benefit of the family
6. Taxes and expenses for mere preservation
No waiver of rights allowed during the marriage made during the marriage upon the
except in case of judicial separation of property. separate property of either spouse used by
The waiver must be in a public instrument. the family
7. Expenses for professional or vocational
Property acquired during the marriage, whether course
acquisition appears to have been made in the 8. Other ante-nuptial debts, support of
name of one or both spouses, is PRESUMED to illegitimate child, and liabilities for crime or
belong to the community. quasi-delicts in absence of separate
property
9. Donated or promised to common legitimate
General Rule: The community property
children for profession, vocational course or
consists of all the property owned by the
self improvement
spouses at the time of the celebration of the
marriage or acquired thereafter.
If the community property is insufficient to
cover all these liabilities (except those falling
Exceptions/Exclusions from Community
under (8) spouses shall be solidarily liable for
Property:
the unpaid balance with their separate
1. Property acquired
properties
before the marriage by either spouse who
has legitimate descendants by a former
Dissolution of the ACP:
marriage and its fruits and income
1. Upon death of either spouse
2. Property for
2. Decree of legal separation
personal and exclusive use, except jewelry
3. Marriage is annulled or nullified
3. Property acquired
4. Judicial separation of property during the
during the marriage by gratuitous title,
marriage (Arts. 134-138)
except when the donor, testator, or grantor
expressly provides otherwise
Liquidation of the ACP:
1. Inventory of all properties
• Encumbrance or disposition of the a. Inventory of community property
community property without the consent of b. Inventory of separate property of the wife
the other spouse is totally void. Benefit to c. Inventory of separate property of the
the family must always be proven. husband
Homeowner’s Savings & Loan Bank vs. 2. Debts and obligations of ACP are paid
Dailo, G.R. No. 153802, March 11, 2005 3. Remainder of the separate properties of the
spouses are returned to the owner
Charges Upon and Obligations of the ACP: 4. Net remainder of the ACP is divided equally
1. Debts and obligations contracted during the between husband and wife
marriage: 5. Presumptive legitimes of children are
a.) By either spouse without the consent delivered
of the other to the extent that it 6. Adjudication of conjugal dwelling and
benefited the family custody of common children
b.) By designated administrator-spouse
c.) By both spouses b. System of Conjugal Property of
d.) By one with the consent of the other Gains (cpg)
2. Taxes, liens, charges and expenses
including major or minor repairs, upon The spouses contribute the following to a
community property common fund:
3. Support of spouses, their common children 1. Proceeds, products, fruits and income of
and legitimate children of either spouse separate properties of spouses

7.
T
2. Everything acquired by spouses through hose acquired by chance

their efforts
3. Everything acquired by spouses through Rules in Cases of Improvement of
chance Exclusive Property:
• Shall commence at the precise moment GENERAL RULE: The ownership of
that the marriage is celebrated. Any improvements made on the separate property
stipulation, express or implied, for the of the spouses at the expense of the
commencement of the regime at any other partnership or through efforts of both spouses
time shall be VOID. shall pertain to the partnership.
• No waiver of rights allowed during the 1. Accession – if the cost of the improvement
marriage except in case of judicial and any resulting increase in value are equal
separation of property. The waiver must be or less than the value of the entire property
in a public instrument. at the time of the improvement, the entire
property remains the exclusive property of
• Property acquired during the marriage, the owner-spouse (subject to reimbursement
whether acquisition appears to have been of improvement cost)
made in the name of one or both spouses, 2. Reverse Accession – if the cost of the
is PRESUMED to be conjugal. improvement and any resulting increase in
value are more than the value of the entire
property at the time of the improvement, the
• The presumption is not rebutted by the property becomes conjugal (subject to
mere fact that the certificate of title of the reimbursement of the value of the property
property or the tax declaration is in the of the owner-spouse)
name of one of the spouses. Villanueva v.
CA,427 SCRA 439 (2004) Charges upon CPG:
-Same as that under ACP, except that under
• It is not even necessary to prove that the taxes and expenses for preservation of
properties were acquired with funds of the separate property of either spouse during the
partnership. The presumption shall subsist marriage -> property need not be used by the
in the absence of clear, satisfactory and family
convincing evidence to overcome the same.
Chine v. CA, 423 SCRA 371 (2004) NOTE: If the conjugal partnership is
insufficient, the spouses shall be solidarily liable
Exclusive Property in CPG: for the unpaid balance with their separate
1. That brought into the marriage as properties.
his/her own
2. That acquired during the marriage Dissolution of CPG: Same as under ACP
gratuitously
3. That acquired by redemption, barter or Liquidation of the CPG:
exchange with exclusive property 1. Inventory of all property
4. That purchased with exclusive money 2. Amounts advanced by CP as payment for
personal debts and obligations of either
What Constitutes CPG: spouse are credited
1. Fruits of conjugal property due or received 3. Reimbursement for use of exclusive funds
during the marriage and net fruits of 4. Debts and obligations of the CP are paid
separate property 5. Remains of exclusive properties are returned
2. Those acquired through occupation 6. Indemnify loss of deterioration of movables
3. Livestock in excess of what was brought to belonging to either spouse used for the
the marriage benefit of the family
4. Those acquired during the marriage with 7. Net remainder of conjugal property is divided
conjugal funds equally
5. Share in hidden treasure 8. Delivery of children’s presumptive legitimes
6. Those obtained from labor, industry, work or
profession of either or both spouse

9.
Adjudication of conjugal dwelling and custody 2. In case one spouse is incapacitated or

of children unable to participate in the
• Prior to the liquidation of the administration of the common
conjugal partnership, the interest of properties, other spouse may assume
each spouse in the conjugal assets is sole powers
inchoate, a mere expectancy, which • These powers do not include:
constitutes neither a legal nor an a. disposition and
equitable estate, and does not ripen into b. encumbrance
title until after liquidation and - Both spouses must approve any
settlement. The right of the husband or disposition or encumbrance. Any
wife to one-half of the conjugal assets encumbrance or disposition is void if
does not vest until the dissolution and without the written consent of the other
liquidation of the conjugal partnership or spouse or the court approval. However,
after dissolution of the marriage and the transaction shall be construed as a
there are net assets left which can be continuing offer on the part of the
divided between the spouses or their consenting spouse, which may be
respective heirs. Abalos v. perfected as a binding contract upon
Macatangay, 439 SCRA 649 (2004) acceptance by the spouse or court
NOTES: approval.
• Property bought on installments paid partly
from exclusive funds of the spouses and Rules on Games of Chance: (ACP/CPG)
partly from conjugal funds: LOSS: Borne by the loser spouse and shall
a. If full not be charged to the community
ownership is vested before the marriage property
– it shall belong to the buyer-spouse WINNINGS: Form part of the community
b. If full property
ownership was vested during the
marriage – it shall belong to the Distinction between ACP and CPG
conjugal partnership ACP CPG
(In any case, the amount advanced by the All the properties Each spouse retains
partnership or by either/both spouses shall owned by the his/her property
be reimbursed by the owner upon spouses at the time before the marriage
liquidation) of marriage become and only the fruits
community property and income of such
• If the community or conjugal properties are properties become
insufficient, the separate properties shall be part of the conjugal
solidarily and subsidiarily liable for the properties during the
obligations marriage
Upon dissolution and Upon dissolution of
• The conjugal partnership property shall liquidation of the the partnership, the
likewise be liable for the payment of the community property, separate property of
personal debts of either spouse insofar as the net remainder is the spouses are
they have redounded to the benefit of the divided equally returned and only the
family. between the spouses. net profits of the
partnership are
Administration and Enjoyment of the divided equally
ACP/CPG between the spouses
General Rule: It shall belong to both spouses of their heirs
jointly
Exceptions: c. Separation of Property
1. In cases of disagreement, husband’s
decision shall prevail • Separation of property between the spouses
• Wife has recourse to the courts during the marriage shall not take place
within 5 years except by judicial order.

• 1.
O
Judicial separation of property may either be ne spouse becomes guardian of the other
voluntary or for sufficient cause. 2. One spouse judicially declared absent
3. One spouse sentenced to penalty with civil
SUFFICIENT CAUSE GROUNDS FOR interdiction
FOR SEPARATION REVIVAL OF 4. One spouse becomes a fugitive from justice
OF PROPERTY FORMER or is hiding as an accused in a criminal case
PROPERTY REGIME
1. Petitioner’s 2. Civil interdiction PROPERTY REGIME OF UNIONS WITHOUT
spouse sentenced to terminates MARRIAGE
penalty with civil BASIS ARTICLE 147 ARTICLE 148
interdiction 1. Man and
2. Petitioner’s 2. Absent spouse re- woman
spouse declared an appears 2. Living 1. Man and woman
absentee together as 2. Living together
3. Loss of parental 3. Parental authority husband and as husband and
authority of judicially restored wife wife
petitioner’s spouse 3. With capacity 3. NOT
declared by court to marry capacitated to
(without legal marry (Art.35(1)
impediment) under 18 years
• At least 18 old)
years old 4. Adulterous
4. Abandonment or 4. When spouse who Applicabil • Not Art. 37 relationship
failure to comply has left conjugal ity (incestuous (e.g.
with marital home without degree void concubinage)
obligations of legal separation marriage) 5. Bigamous/polyg
resumes common life • Not Art. 38 amous marriage
with the other (void (Art.35(4))
5. Spouse abused 5. Court authorizes marriage by 6. Incestuous
power of the resumption of reason of marriages under
administration administration, being public policy) Art.37
granted satisfied that there • Not 7. Void marriages
will be no abuse bigamous by reason of
6. At the time of 6. Spouses reconcile 4. Other void public policy
petition, spouses and resume common marriages / under Art.38
have been separated life live-in
in fact for at least Exclusively owned;
one year and Salaries married party 
Owned in equal
reconciliation is and property of CPG of
shares
highly improbable wages legitimate
7. When after marriage
voluntary dissolution Propertie
of the ACP or CPG s Remains
has been judicially acquired exclusive
decreed, spouses Remains exclusive
through provided there
agree to revive exclusive is proof
former regime (no funds
subsequent Propertie Presumed to be Only the
voluntary separation s obtained in properties
may be granted) acquired equal shares acquired by both
while since it is parties through
GROUNDS FOR TRANSFER OF living presumed to their actual joint
ADMINISTRATION OF EXCLUSIVE together have been contribution of
PROPERTY OF EITHER SPOUSE: (GACA) acquired money, property,

through joint or industry shall ===========================
efforts be owned by them ===================
in common in
If one party did proportion to their FAMILY - basic social institution which public
not participate respective policy cherishes and protects
in acquisition, contributions. • Hence, no suit between members of the
presumed to Properties owned family shall prosper unless earnest efforts
have in common shall towards a compromise have been made but
contributed be presumed to be failed.
through care equal; however, • Allegation of “earnest efforts” is
and proof may be JURISDICTIONAL, if it is absent, the court can
maintenance of shown to show dismiss the case. BUT this rule is
family and that their inapplicable to the following cases: (CLV-
household contribution and FJF)
respective shares 1. Civil status of persons
are not equal. 2. Any ground for legal separation
3. Validity of marriage or legal separation
• The registration of a property in the name 4. Future support
of the paramour who had no income 5. Jurisdiction of courts
whatsoever at the time of the donation by 6. Future legitime
another’s husband is tantamount to a
donation which is void under Article 87 of FAMILY RELATIONS INCLUDE:
the Family Code. The paramour then holds 1. Between husband and wife
the property under a constructive trust 2. Between parents and children
under Article 1456 in favor of the conjugal
3. Among other ascendants and descendants
partnership of the husband with the
legitimate spouse. Joaquino v. Reyes, 4. Among brothers and sisters, full or half
434 SCRA 260 (2004) blood
• Under Article 148, there must be proof of ============================

====================
actual joint contribution by both the live-in
partners before the property becomes co- TOPICS UNDER SYLLABUS
owned by them in proportion to their J.
contribution. Otherwise, there are no FAMILY HOME
presumptions of co-ownership and equal ============================
sharing. Villanueva v. CA, 427 SCRA 439 ====================
(2004)
FAMILY HOME It is deemed constituted from
• No co-ownership exists between parties to the time it is occupied as a family residence
an adulterous relationship. In such a
relationship, it is necessary for each of the BENEFICIARIES OF A FAMILY HOME
partners to prove his or her actual 1. Husband and wife, or unmarried head of the
contribution to the acquisition of property in family
order to be able to lay claim to any portion 2. Parents (may include parent-in-laws),
of it. Presumptions of co-ownership and ascendants, brothers and sisters
equal contribution do not apply. Rivera v. (legitimate/illegitimate) living in the family
Heirs of Villanueva, G.R. No. 141501, home and dependent on head of family for
July 21, 2006 support
=========================== 1. MANNER OF CONSTITUTION

===================
TOPICS UNDER SYLLABUS: GUIDELINES:
I. The Family (Arts 149-151, FC) 1. FH is deemed constituted from time of
actual occupation as a family residence

2. 2.
H
FH must be owned by person constituting it is claim is not among those excepted under
3. FH must be permanent Art. 155
4. Rule applies to valid, voidable and even to 3. He has reasonable grounds to believe that
common-law marriages under Arts. 147 and the family home is worth more than the
148 maximum amount fixed in Art. 157
5. FH continues despite death of one or more
spouses or unmarried head of family for 10 PROCEDURE:
years or as long as there is a minor 1. Creditor to file a motion in the court
beneficiary (Art. 159) proceeding where he obtained a favorable
6. Only one FH can be constituted for a writ of execution against FH.
2. Hearing on the motion where the creditor
2. QUALIFIED PROPERTY must prove that the actual value of the FH
exceeds the maximum amount fixed by the
Actual value of the family home shall not Family Code, either at the time of its
exceed P300,000 in URBAN areas and P200,000 constitution or as a result of improvements
in RURAL areas (Art.157) introduced thereafter its constitution.
3. If creditor proves that actual value exceeds
3. EXEMPTION FROM EXECUTION the maximum amount the, court will order
its sale in execution.
General Rule: (Art. 153) The family home 4. If FH is sold for more than the value
(FH) is exempted from: allowed, the proceeds shall be applied as
1. Execution follows:
2. Forced Sale a. First, the obligations enumerated in Art.
3. Attachment 155 must be paid (listed above)
Exceptions: (Art. 155) b. Then the judgment in favor of the
1. Non-payment of taxes creditor will be paid, plus all the costs of
2. Debts incurred prior to constitution of home execution
3. Debts secured by mortgages on the c. The excess, if any, shall be delivered to
premises the judgment debtor
4. Debts due laborers, mechanics, architects,
builders, materialmen, and others who have ============================
rendered service or furnished materials for ==================
the construction of the building TOPICS UNDER SYLLABUS
K. Paternity and Filiation (Arts. 163-
NOTE: The exemption is limited to the value 182, FC)
allowed by the Family Code
1. Kinds of Filiation
4. SALE 2. Children by Nature
a. Legitimate Children
Sale, Alienation, Donation, Assignment, Or b. Illegitimate Children
Encumbrance Of The Family Home c. Legitimated Children
1. The person who constituted the same must 3. Actions regarding filiation
give his/her written consent a. To claim filiation
2. The spouse of the person who constituted i. Proof of filiation
the family home must also give his/her
written consent
ii. Admissibility of Scientific
3. A majority of the beneficiaries of legal age Testing
must also give their written consent b. To impugn filiation
4. In case of conflict, the court shall decide 4. Rights of
Legitimate/Legitimated/Illegitimat
Requisites For Creditor To Avail Of The e Children
Right To Execute: (Art. 160)
1. He must be a judgment creditor ========================
==================

TOPICS UNDER SYLLABUS probative value. Concepcion v. CA, [G.R.
G. PATERNITY AND FILIATION No. 123450, Aug. 31, 2005]
1.Kinds of Filiation
b. Illegitimate Children
2 Children by Nature
============================ ILLEGITIMATE CHILDREN -are those
==================== conceived AND born outside a valid marriage.
1.KINDS OF FILIATION
2.CHILDREN BY NATURE Exceptions: Those children who are:
1. Born of marriages which are void ab initio
a. Legitimate Children such as bigamous and incestuous marriages
and void marriages by reason of public
LEGITIMATE CHILDREN -are those conceived policy
OR born during a valid marriage. 2. Born of voidable marriages born after the
decree of annulment
INCLUSIONS: Those children who are:
1. Conceived as a result of artificial c. Legitimated Children
insemination
2. Born of a voidable marriage before decree REQUISITES FOR LEGITIMATION:
of annulment 1. The child was conceived and born outside of
3. Conceived or born before judgment of wedlock
annulment or absolute nullity under Art. 36 2. The parents, at the time of child’s
(psychological incapacity) becomes final & conception, were not disqualified by any
executory impediment to marry each other
4. Conceived or born of a subsequent 3. There is a valid marriage subsequent to the
marriage under Art. 53 (failure to record the child’s birth
judgment, partition and distribution of
properties, and delivery of children’s
• Legitimation takes place by the subsequent
presumptive legitime)
marriage of the child’s parents
5. Of mothers who may have declared against
• Effect of legitimation:
their legitimacy or was sentenced as an
adulteress (Art.167) -Confers on the child the rights of legitimate
6. Legally adopted children
7. Legitimated, conceived and born outside of -Retroacts to the time of the child’s birth
wedlock of parents without impediment at • Legitimation may be impugned only by
the time of conception and who those who are prejudiced in their rights
subsequently married within 5 years from the time the cause of
action accrues (death of parents of
• A child born inside a valid marriage is legitimated child)
legitimate. Hence a child born inside a
bigamous marriage, which is void, is 3. ACTIONS REGARDING FILIATION
considered a child under the first marriage,
which has not been nullified or annulled. a. To claim filiation
Concepcion v. CA, [G.R. No. 123450, i. Proof of filiation
Aug. 31, 2005]
PROOF OF FILIATION
• An agreement by parties as to the status of General Rule: (Art. 172, Par. 1) Filiation of
a child is void. Only the law determines legitimate or illegitimate children is established
legitimacy or illegitimacy. Thus, the child, in by any of the following:
eyes of the law, is legitimate under the first
marriage notwithstanding the admission in 1. The record of birth appearing in the civil
pleadings by the wife and his second register or a final judgment
husband that the child is their legitimate
son. Similarly, any declaration of the • Must be prepared by the father. A
mother that her child is illegitimate has no certificate of live birth purportedly

2.
2.
2.
identifying the putative father is not Any other evidence allowed by the Rules of
competent evidence of paternity when Court and special laws
there is no showing that the putative father
had a hand in the preparation of said • The due recognition of an illegitimate child
certificate. The local civil registrar has no in a record of birth, a will, a statement
authority to record the paternity of an before a court of record, or in any authentic
illegitimate child on the information of a writing is, in itself, a consummated act of
third person. Cabatania v. CA, [441 SCRA acknowledgement of the child, and no
96 (2004)] further court action is required. In fact, any
• Record of Birth merely prima facie authentic writing is treated not just a
evidence. In Benitez-Badua v. CA, it is well- ground for compulsory recognition; it is in
settled that a record of birth is merely a itself a voluntary recognition that does not
prima facie evidence of the facts contained require a separate action for judicial
therein. It is not conclusive evidence of the approval. Eceta v. Eceta, [428 SCRA 204
truthfulness of the statements made there (2004)]
by the interested parties.
NOTE: For illegitimate children: when the
2. An admission of legitimate or illegitimate action is based on the par. 2 of Art. 172, the
filiation in a public document or a private action may be brought ONLY during the lifetime
handwritten instrument and signed by the of the alleged parent
parent concerned
ii. Admissibility of Scientific Evidence
Exception: (Art. 172, Par. 2) In the absence
of these evidences, the legitimate filiation may REQUISITES FOR CHILDREN BY ARTIFICIAL
be proved by: INSEMINATION TO BE CONSIDERED
1. Open and continuous possession of the LEGITIMATE: (Art. 164)
status of a legitimate (or illegitimate) child 1. The artificial insemination must made on
the wife;
• Definition. Continuous does not mean that 2. The sperm of the husband, or of a donor, or
the concession of status shall continue both the husband and a donor must be
forever but only that it shall not be of an used;
intermittent character while it continues. 3. The artificial insemination has been
The possession of such status means that authorized or ratified by both spouses on a
the father has treated the child as his own, written instrument executed and signed by
directly and not through others, them before the birth of the child; AND
spontaneously and without concealment 4. The written instrument is recorded in civil
though without publicity. Mendoza v. CA, registry together with the birth certificate of
[G.R. No. 86302, Sept. 21, 1991] the child
• How to prove. There must be evidence of b. To impugn filiation

the manifestation of the permanent
intention of the supposed father to consider WHO MAY IMPUGN THE LEGITIMACY OF A
the child as his, by continuous and clear CHILD:
manifestations of parental affection and General Rule: Only the husband can impugn
care, which cannot be attributed to pure the legitimacy of a child
charity. Such acts must be of such a nature Exceptions: The heirs of the husband may
that they reveal not only the conviction of impugn the child’s filiation in the following
paternity, but also the apparent desire to cases:
have and treat the child as such in all a. If the husband dies before the expiration of
relations in society and in life, not period for filing the action
accidentally, but continuously. Jison v. CA, b. If the husband dies after filing without
[G.R. No. 124853, February 24, 1998] desisting
c. If the child was born after the death of the
husband

•
L
GROUNDS TO IMPUGN THE LEGITIMACY OF egitimacy CANNOT be collaterally attacked

THE CHILD: (EXCLUSIVE LIST) (PBA) or impugned. It can be impugned only in a
1. It was physically impossible for the husband direct suit precisely filed for the purpose of
to have sexual intercourse with his wife assailing the legitimacy of the child.
within the first 120 days of the 300 days
which immediately preceded the birth of RULE ON STATUS OF A CHILD BORN
the child because of: WITHIN 300 DAYS AFTER TERMINATION OF
a. Physical incapacity of the husband to FORMER MARRIAGE (Art. 168):
have sexual intercourse with his wife Rules in the absence of proof to the contrary:
b. Fact that the husband and wife were
living separately in such a way that 1. If the child was born before 180 days after
sexual intercourse was not possible, or celebration of 2nd marriage provided born
c. Serious illness of the husband which within 300 days after the termination of the
absolutely prevented intercourse 1st marriage: considered to have been
2. If its proved that for biological or other conceived during the first marriage.
scientific reasons, the child could not have
been that of the husband, except in the 2. If the child was born after 180 days
case of children conceived through artificial following the celebration of the 2nd marriage
insemination whether born within 300 days after
3. In case of children conceived through termination of 1st marriage or afterwards:
artificial insemination, when the written considered to have been conceived during
authorization or ratification of either parent the second marriage.
was obtained through mistake, fraud,
violence, intimidation, or undue influence ACTION TO CLAIM LEGITIMACY:
1. The child can bring the action during his
PERIODS FOR FILING OF ACTION TO lifetime
IMPUGN LEGITIMACY: 2. If the child dies after reaching majority
1. If the husband (or his heirs, in proper cases) without filing an action, his heirs can no
resides in the SAME city or municipality: longer file the action after death
within 1 year from knowledge of the birth 3. If the child dies during minority or in the
OR its recording in the civil register state of insanity, his heirs can file the action
2. If the husband (or his heirs) does NOT for him within 5 years from the child’s death
RESIDE in the city or municipality where the 4. If the child dies after commencing the
child’s birth took place or was recorded BUT action, the action will survive and his heirs
his residence is IN THE PHILS.: within 2 will substitute for him
years 5. If the child is a minor, incapacitated or
3. If the child’s birth took place or was insane, his guardian can bring the action in
recorded in the PHILS. while the husband his behalf
has his residence ABROAD, or vice-versa:
within 3 years
4. RIGHTS OF
NOTE: LEGITIMATE/LEGITIMATED/ILLEGITIMATE
• The period shall be counted from the CHILDREN
knowledge of the child’s birth or its
recording in the civil register. RIGHTS OF LEGITIMATE AND ILLEGITIMATE
HOWEVER, if the child’s birth was CHILDREN
concealed from or was unknown to the LEGITIMAT
BASIS ILLEGITIMATE
husband or his heirs, the period shall be E
counted from the discovery or knowledge of Surname Use of Use of mother’s
the birth of the child or of the act of father and surname
registration of said birth, whichever is mother’s NOTE: R.A. 9255
earlier. surname amended Art. 176
of FC as of March
19, 2004  can

use father’s 3. Father’s admission in private
surname handwritten document (R.A. 9255, Sec. 1,
Entitled to effective March 19, 2004)
legitime and NOTE: The father under R.A. 9255, Sec. 1
other has the right to file an action to prove non-
Entitled only to ½
successional filiation during his lifetime.
Legitime of legitime of
rights
legitimate child
granted to ===========================
them by the
==================
NCC
Entitled to TOPICS UNDER SYLLABUS
receive L. ADOPTION (Arts 183-193, FC)
support • Inter-country Adoption Law
from • Domestic Adoption Law
parents,
ascendants, Receive support 1. Construction
Support and in according to the 2. Qualifications and
proper provision of the FC Disqualifications of Adopter
cases, 3. Qualifications and
brothers and Disqualifications of Adopted
sisters 4. Rights Granted by Adoption
under Art.
174 5. Rules on Succession
• His/her whole 6. Rescission of Adoption
His/her ========================
lifetime
whole ==================
regardless of
Action for lifetime
type of proof
claim for regardless
provided under R.A. 8043: INTER-COUNTRY ADOPTION
legitimacy of type of
Art.172 par. 1 ACT OF 1995
or proof
illegitimacy provided • ONLY lifetime of
under Art. alleged parent 1. CONSTRUCTION
172 for Art. 172 par.
2 INTER-COUNTRY ADOPTION -is the socio-
Transmissi legal process of adopting a Filipino child by a
ble to heirs foreigner or a Filipino citizen permanently
Yes No residing abroad where the petition is filed, the
under
Art.173? supervised trial custody is undertaken, and the
No right to inherit decree of adoption is issued outside the
ab intesto from Philippines.
Right to legitimate
inherit ab Yes children and 2. QUALIFICATIONS AND
intesto relative of father DISQUALIFICATIONS OF ADOPTER
and mother under
Art. 992 NCC An alien or a Filipino citizen permanently
residing abroad may file an application for
NOTE: inter-country adoption of a Filipino child if:
• Use the surname of the mother if the 1. At least 27 years of age and at least 16
requisites of R.A. 9255 are not complied years older than the child to be adopted, at
with the time of application unless the adopter is
the parent by nature of the child to be
• Use the surname of the father if the child’s
adopted or the spouse of such parent
filiation has been expressly recognized by
2. If married, his/her spouse must jointly file
the father, either through:
for the adoption
1. Record of birth in civil register
2. Father’s admission in public document

3.
Has the capacity to act and assume all rights 1. CONSTRUCTION

and responsibilities of parental authority
under his national laws, and has undergone 2. QUALIFICATIONS AND
the appropriate counseling from an DISQUALIFICATIONS OF ADOPTER
accredited counselor in his/her country
4. Has not been convicted of a crime involving WHO MAY ADOPT:
moral turpitude 1. FILIPINO CITIZEN
5. Eligible to adopt under his/her national law a. Of legal age
6. In a position to provide the proper care and b. In possession of full civil capacity
support and to give the necessary moral and legal rights
values and example to all his children, c. Of good moral character
including the child to be adopted d. Has not been convicted of any crime
7. Agrees to uphold the basic rights of the involving moral turpitude
child as embodied under Philippine laws, e. Emotionally and psychologically
the U.N. Convention on the Rights of the capable of caring for children,
Child, and to abide by the rules and f. At least 16 years older than the
regulations issued to implement the person to be adopted, unless:
provisions of this Act i. The adopter is the natural
8. Comes from a country with whom the parent of the child to be
Philippines has diplomatic relations and adopted, or
whose government maintains a similarly ii. The adopter is the spouse of the
authorized and accredited agency and that legitimate parent of the person
adoption is allowed under his/her national to be adopted
laws g. In a position to support and care for
9. Possesses all the qualifications and none of his legitimate and illegitimate
the disqualifications provided herein and in children, in keeping with the means
other applicable Philippine laws of the family
2. ALIEN
3. QUALIFICATIONS AND a. Possessing the same qualifications
DISQUALIFICATIONS OF ADOPTED as above stated for Filipino nationals
b. His/her country has diplomatic
WHO MAY BE ADOPTED: Only a legally free relations with the Philippines
child may be the subject of inter-country c. He/she has been living in the
adoption Philippines for at least 3 continuous
years prior to the filing of the
LEGALLY-FREE CHILD - is a child who has application for adoption and
been voluntarily or involuntarily committed to maintains such residence until the
the Department, in accordance with the Child adoption decree is entered, EXCEPT
and Youth Welfare Code in the case of:
i. A former Filipino citizen who
• No child shall be matched to a foreign seeks to adopt a relative within
adoptive family unless it is satisfactorily the 4th degree of consanguinity
shown that the child cannot be adopted or affinity; or
locally ii. One who seeks to adopt the
• Qualified children: Section 25, Article 8 of legitimate child of his/her
the Rules and Regulations provide: any Filipino spouse; or
child who has been voluntarily or iii. One who is married to a Filipino
involuntarily committed to the Department citizen and seeks to adopt jointly
as dependent, abandoned, or neglected with his/her spouse a relative
pursuant to the provisions of the Child and within the 4th degree of
Youth Welfare Code may be the subject of consanguinity or affinity of the
Inter-Country Adoption Filipino spouse; or
3. GUARDIAN - with respect to the ward
R.A. 8552: DOMESTIC ADOPTION ACT after the termination of the guardianship

and clearance of his/her financial EFFECTIVITY OF DECREE OF ADOPTION
accountabilities • A decree of adoption is effective as of the
date the original petition was filed. This also
applies in case the petitioner dies before
RULE ON ADOPTION BY SPOUSES the issuance of the decree of adoption
General Rule: Husband and wife shall jointly • Where the petition for adoption was granted
adopt after the child killed a girl, no retroactive
Exceptions: effect may be given to the decree of
1. One spouse seeks to adopt the legitimate adoption so as to impose a liability upon the
son/daughter of the other; or adopting parents accruing at a time when
2. One spouse seeks to adopt his/her own the adopting parents had no actual or
illegitimate son/daughter physically custody over the adopted child.
3. The spouses are legally separated from Retroactive effect may perhaps be given
each other. where such is essential to permit the
accrual of some benefit or advantage in
3. QUALIFICATIONS AND favor of the adopted child. To hold that
DISQUALIFICATIONS OF ADOPTED parental authority had been retroactively
lodged in the adopting parents so as to
WHO MAY BE ADOPTED: burden them with liability for a tortuous act
1. Any person below 18 years of age who has that they could not have foreseen nor
been administratively or judicially declared prevented would be unfair and
available for adoption; unconscionable. Tamargo v. CA, [G.R.
2. Legitimate son/daughter of one spouse by No. 85044, June 3, 1992]
the other spouse;
3. Illegitimate son/daughter by a qualified 4. RIGHTS GRANTED BY ADOPTION
adopter to improve his/her status to that of
legitimacy; EFFECTS OF ADOPTION:
4. Person of legal age if, prior to the adoption, 1. Severance of all legal ties between the
said person has been consistently biological parents and the adoptee and the
considered and treated by the adopter as same shall then be vested on the adopters
his/her own child since minority; EXCEPT in cases where the biological parent
5. Child whose adoption has been previously is the spouse of the adopter
rescinded; or 2. Deemed a legitimate child of the adopter
6. Child whose biological or adoptive parents 3. Acquired reciprocal rights and obligations
have died provided that no proceedings arising from parent-child relationship
shall be initiated within 6 months from the 4. Right to use surname of the adopter
time of death of said parents.
5. RULES ON SUCCESSION
WRITTEN CONSENT NECESSARY FOR
ADOPTION: In legal and intestate succession, the adopters
(A-BLISS-A) and the adoptee shall have reciprocal rights of
1. Adoptee, if 10 years of age or over; succession without distinction from legitimate
2. Biological parents of the child, if known, or filiation. However, if the adoptee and his/her
the legal guardian, or the proper biological parents had left a will, the law on
government instrumentality which has legal testamentary succession shall govern.
custody of the child
3. Legitimate children of the adopter, 10 years 6. RECISSION OF ADOPTION
old or over
4. Illegitimate children of the adopter, 10 GROUNDS FOR RECISSION OF ADOPTION:
years old or over and living with him (MASA)
5. Spouse of the adopted, if married 1. Repeated physical and verbal maltreatment
6. Spouse of the adopter, if married by the adopters despite having undergone
7. Adopted children of the adopter, 10 years counseling
old or over 2. Attempt on the life of the adoptee

3.
Sexual assault or violence SUPPORT consists of everything indispensable

4. Abandonment and failure to comply with for:
parental obligations. 1. Sustenance
• Adoption, being in the best interest of the 2. Dwelling
child, shall not be subject to rescission by 3. Clothing
the adopter 4. Medical attendance
• Only the adoptee is given the right to 5. Education – includes schooling (formal
rescind the decree of adoption education) or training (non-formal
• However, the adopters may disinherit the education) for some profession, trade or
adoptee for causes provided in Art. 919 NCC vocation, even beyond the age of majority
6. Transportation – includes expenses going to
EFFECTS OF THE RESCISSION OF THE and from school, or to and from place of
ADOPTION: work (art. 194)
1. The parental authority of the adoptee's
biological parents, if known, OR the legal • Makes no distinction between natural
custody of the DSWD shall be restored if the support (basic necessities) and civil support
adoptee is still a minor or incapacitated. (those beyond the basics)
2. The reciprocal rights and obligations of the
adopters and the adoptee to each other NOTE: Amount of support shall be in proportion
shall be extinguished. to the means of the giver and to the need of
3. The court shall order the Civil Registrar to the recipient
cancel the amended certificate of birth of
the adoptee and restore his/her original 2. PERSONS OBLIGED TO SUPPORT EACH
birth certificate. OTHER
4. Succession rights shall revert to its status
prior to adoption, but only as of the date of Persons Obliged To Support Each Other To
judgment of judicial rescission. Vested The Whole Extent: (Art. 195)
rights acquired prior to judicial rescission a. Spouses
shall be respected. b. Ascendants and
Descendants
============================ c. Parents and
==================== Legitimate/Illegitimate
TOPICS UNDER SYLLABUS Children/Descendants
M. SUPPORT (Arts 194-208) d. Legitimate/Illegitimate
Brothers and Sisters
1. What constitutes support
2. Persons Obliged to Support each RULES REGARDING SUPPORT TO
other ILLEGITIMATE BROTHERS AND SISTERS
a. Spouses (WHETHER FULL OR HALF BLOOD):
b. Ascendants and Descendants 1. If the one asking for support is below
c. Parents and Legitimate and majority age, he is entitled to support from
his illegitimate brother or sister to the full
Illegitimate
extent, without any condition
Children/Descendants 2. If the one asking for support is already of
d. Legitimate/Illegitimate majority age, he is entitled to support only if
Brothers and Sisters his need for support is not due to a cause
2. Contractual Support imputable to his fault or negligence (Art.
3. Basis of Support 196)
4. Options of Giver
======================== PROPERTIES THAT ARE LIABLE FOR THE
================== SUPPORT OF THE RELATIVES (SOURCES
OF MUTUAL SUPPORT)
1. WHAT CONSTITUTES SUPPORT Spouses

Absolute community Exempt from execution Not exempt from
of conjugal and attachment attachment and
partnership execution because it is
not a legal obligation
Common children of Absolute community
the spouses or conjugal property Exception: If the giver
Children of a spouse contracts with a person
Absolute community
by another marriage whom he is obliged by
or conjugal property
law to support, in which
Under ACP, separate case only the excess of
property of parent- what is obliged (based
spouse. But if on need) can be
insufficient, absolute attached or subject to
community liable but execution
considered as
Follow rules of
advances on the contracts which says
share of the parent to
that obligation must be
be paid during If contained in a will,
fulfilled (support must
liquidation apply the rules of
Illegitimate children be given) no matter
contractual support
of either spouse what happens (even if
Under CPG, separate because there is no
you lose your job). BUT
property of parent- more obligation of
if the change in
spouse. But if support to speak of
circumstances are
insufficient, conjugal since the giver is
manifestly beyond that
partnership liable if already dead
contemplation of the
financially capable, parties, support may be
but support paid shall
adjusted accordingly
be deducted from
share of spouse
• Judgment of support is always provisional
during liquidation
in character. Res Judicata does not apply.
Separate property of
Lam v. Chua, [426 SCRA 29 (2004])
the obligor-spouse
if the same is not 4. OPTIONS OF GIVER

Legitimate
sufficient or there is
ascendants, other Options Of The Person Giving Support:
none, the absolute
legitimate and 1. To give a fixed monthly allowance; or
community or
illegitimate 2. To receive and maintain the recipient in the
conjugal property
descendants, and giver's home or family dwelling (Art. 204)
shall be liable if
legitimate and
financially capable,
illegitimate brothers Exception to # 2: Existence of legal or moral
which support shall be
and sisters obstacle
deducted from the
share of the spouse
upon liquidation of the ORDER OF LIABILITY IF 2 OR MORE ARE
ACP or CPG OBLIGED TO SUPPORT:
1. Spouse
2. Descendants in nearest degree
2. CONTRACTUAL SUPPORT 3. Ascendants in nearest degree
3. BASIS OF SUPPORT 4. Brothers and sisters (Art. 199)
CONTRACTUAL • When the obligation to give support falls

LEGACY OF SUPPORT
SUPPORT upon two or more persons, the payment of
Based on contract, so it the same shall be divided between them in
Based on law can be between proportion to the resources of each.
strangers

•
However, in case of urgent need and by special CHILDREN

circumstances, the judge may order only From the
one of them to furnish the support From the
communit From the
provisionally, without prejudice to his right separate
y property community
to claim from the other obligors the share property of the
property
due from them. spouses
• When two or more recipients at the same
time claim support from one and the same ============================
person legally obliged to give it, and the =================
obligor does not have sufficient means to
satisfy all claims:
TOPICS UNDER SYLLABUS
-The order established in the preceding N. Parental Authority
article shall be followed: 1. Contempt
a. Spouse 2. Over Person
b. Descendants in nearest degree 3. Over Property
c. Ascendants in nearest degree 4. Substitute and Special Parental
d. Brothers and sisters (Art. 200)
Authority
- If the concurrent obligees should be the
spouse and a child subject to parental 5. Suspension/Termination of
authority, the child shall be preferred Parental Authority
6. Liability of Parents for Acts of
SOURCES OF SUPPORT Children
DURING ========================
PENDING AFTER
THE ==================
LITIGATION LITIGATION
MARRIAGE
SPOUSES 1. CONTEMPT
From the
community PARENTAL AUTHORITY (PATRIA
property assets POTESTAS) -is the mass of rights and
except if Art. obligations which parents have in relation to
203 applies, i.e. the person and property of their children until
if the claimant their emancipation, and even after, under
spouse is the certain circumstances.
guilty spouse,
No obligation to
he/she will not Characteristics Of Parental Authority:
support except if
be entitled to
there is legal 1. It is a natural right and duty of the parents
support.
From the separation, in (Art. 209)
communit which case the 2. It cannot be renounced, transferred or
If the spouses
y property court may waived, except in cases authorized by law
are under CPG,
require the guilty (Art. 210)
support is
spouse to give 3. It is jointly exercised by the father and the
considered an
support mother (Art. 211)
advance of such
spouses' share; 4. It is purely personal and cannot be
the rule does exercised through agents
not apply if the 5. It is temporary
spouses are
under ACP, 2. OVER PERSON
based on Art
153 RULES AS TO THE EXERCISE OF PARENTAL
AUTHORITY:
1. The father and the mother shall jointly
exercise parental authority over the persons
of their common children. In case of

disagreement, the father's decision shall minor common child without court
prevail, unless there is a judicial order to appointment
the contrary (Art. 211) 2. In case of disagreement, the father’s
2. If the child is illegitimate, parental authority decision shall prevail, unless there is judicial
is with the mother. order to the contrary
3. If the market value of the property or the
WHO EXERCISES PARENTAL AUTHORITY annual income of the child exceeds
Absence P50,000, the parent is required to furnish a
of either Parent present bond of not less than 10% of the value of
parent the child’s property or income
Death of
either Surviving parent 4. SUBSTITUTE AND SPECIAL PARENTAL
parent AUTHORITY
Remarriag
e of Surviving parent, unless the court Order Of Substitute Parental Authority:
surviving appoints a guardian 1. The surviving grandparent
parent 2. The oldest brother or sister, over 21 years
Parent designated by the court, old, unless unfit or disqualified
taking into account all relevant 3. The child's actual custodian, over 21 years
considerations, especially the old, unless unfit or disqualified (Art. 216)
choice of the child over 7 years
old, unless the parent chosen is • In case of foundlings, abandoned children,
unfit neglected children, or abused children,
GR: A child under 7 years of age summary judicial proceedings shall be
shall not be separated from instituted so that they may be entrusted to:
the mother UNLESS the court a. Heads of children’s homes
Separation
finds compelling reasons to b. Orphanages, or
of parents
order otherwise (TENDER c. Similar institutions duly accredited by
(Art. 213)
YEARS DOCTRINE) the proper government agency (Art.
Paramount consideration in 217)
matters of custody of a child is the
welfare and well-being of the child Person Exercising Special Parental
Tonog v. Court of Appeals, Authority:
[G.R. No. 122906, February 7, 1. School
2002] 2. Administrators and teachers
3. Individual, entity, or institution engaged in
• In case of death, absence or unsuitability of child care
both parents, the surviving grandparent
shall exercise substitute parental authority Liability Of Those Exercising Special
(Art. 214) Parental Authority Over The Child:
• No descendant shall be compelled, in 1. They are principally and solidarily liable for
criminal cases, to testify against his parents damages caused by the acts or omissions of
or grandparents, except when such the child while under their supervision,
testimony is indispensable in a crime instruction or custody. HOWEVER, this
against the defendant or by one parent liability is subject to the defense that the
against the other. (Art 215) person exercising parental authority
exercised proper diligence.
3. OVER PROPERTY 2. The parents and judicial guardians of the
minor or those exercising substitute
Effect Of Parental Authority Upon The parental authority over the minor are
Property Of The Child: subsidiarily liable for said acts and
1. The father and mother shall jointly exercise omissions of the minor.
legal guardianship over the property of the

DISTINCTION BETWEEN SUBSTITUTE AND habeas corpus has no leg to stand on to
SPECIAL PARENTAL AUTHORITY deprive the mother of a child below seven
SUBSTITUTE years of age, unless there are compelling
SPECIAL PARENTAL
PARENTAL reasons to do so. Gualberto v. Gualberto,
AUTHORITY
AUTHORITY G.R. No. 154994, June 28, 2005
It is exercised
concurrently with the Cases Where Parental Authority May Be
parental authority of Revived:
It is exercised in
the parents. The 1. Adoption of child
case of death,
parents temporarily 2. Appointment of general guardian
absence, or
relinquish parental 3. Judicial declaration of abandonment
unsuitability of
authority over the child 4. Final judgment divesting parental authority
parents.
to the person with
5. Judicial declaration of absence or incapacity
special parental
or person exercising parental authority
authority.
6. LIABILITY OF PARENTS FOR ACTS OF
5. SUSPENSION/TERMINATION OF CHILDREN
PARENTAL AUTHORITY
Liability Of Parents For Torts Committed
By Their Minor Children:
Grounds For Suspension Of Parental
Authority: (CHOBA) • Parents and other persons exercising
1. Conviction of parent for crime with civil parental authority shall be civilly liable for
the injuries and damages caused by the
interdiction
acts or omissions of their minors PROVIDED
2. Treats child with excessive harshness and
the children are living in their company and
cruelty under their parental authority
3. Gives corrupting orders, counsel or example • This is subject to the appropriate defenses
4. Compels child to beg provided by law
5. Subjects to or allows him to be subjected to
acts of lasciviousness NOTE:
• Parental authority and responsibility are
• The suspension or deprivation may be inalienable and may not be transferred and
revoked and the parental authority revived renounced except in cases authorized by
in a case filed for the purpose or in the law
same proceeding if the court finds that the • Parents may exercise parental authority
cause therefore has ceased and will not be over their child’s property
repeated
Grounds For The Permanent Termination ===================

Of Parental Authority : ==============
1. Death of parents
2. Death of child TOPIC UNDER SYLLABUS
3. Emancipation of child N. Funerals (Arts. 305-310,CC)
4. Parents exercising parental authority has O. Surname (Arts 364-380, CC)
subjected the child or allowed him to be P. Absence (Arts. 381-396,CC)
subjected to sexual abuse
Q. Civil Register (Arts. 407-413,CC)
• Lesbianism is not compelling reason to
deprive the mother of a child below seven ===================
years of age. To deprive the wife of ==============
custody, the husband must clearly establish
that her moral lapses have had an adverse
N. FUNERAL
effect on the welfare of the child or have
distracted the offending spouse from
General Guidelines:
exercising proper parental care. Writ of

1.
Duty and right to make arrangement in funerals

in accordance with Art. 199 FC:
a. Spouse
b. Descendants in nearest degree
c. Ascendants in nearest degree
d. Brothers and sisters
2. The funeral shall be in keeping with the
social position of the deceased
3. The funeral shall be in accordance with the
expressed wishes of the deceased WIFE SURNAME TO BE USED
a. In the absence of expressed wishes, his a. First name and
religious beliefs or affiliation shall maiden name + her
determine husband’s surname
b. In case of doubt, the persons in Art. 199 b. First name + her
of FC shall decide husband’s surname
4. Any person who disrespects the dead or c. Her husband’s full
Husband
allows the same shall be liable for damages name, but prefixing a
is living
word indicating that
(Art.
O. SURNAME Valid she is his wife, such
370)
USE OF SURNAME marriag as “Mrs”
e d. Retain the use of her
maiden name (use of
SURNAME TO BE
CHILD CONCERNED husband’s surname is
USED
not a duty but merely
Legitimate child Father’s surname an option of the wife)
Legitimated child Father’s surname
Adopted child Adopter’s surname Husband
She can use the surname
is dead
1. Mother’s surname; of the husband as if he
(Art.
or were still living
373)
2. Father’s name if
they were Wife is
Illegitimate child She shall resume using
recognized by their the guilty
her maiden name
father in the record party
of birth or in an 1. Resume using her
authentic writing Marriag maiden name; or
Conceived prior to e is 2. Continue employing
the annulment of the Father’s surname annulle her husband’s surname
Wife is
marriage d UNLESS:
the
Conceived after the (Art.37 a. Court decrees
innocent
annulment of the Mother’s surname 1) otherwise, or
party
marriage b. She or the former
husband is
• Since a legitimate child can ask for a married again to
change of name, an adopted child can do another person
the same. Continue using the name
and surname she was
Legally separated employing prior to the
• The interest of justice and of the child
(Art.372) legal separation Laperal
permits an illegitimate child to change his
v. Republic,[6 SCRA
name adopting the surname of his parent’s
357 (1962)]
other spouse. Calderon vs. Republic, [19
SCRA 721] IDENTITY OF NAMES AND SURNAMES
Between Younger person is obliged to
persons (Art. use such additional name OR
374) surname as will avoid
confusion

1. Son may use the word
“Junior”
2. Grandsons and other male
Between
descendants, shall either :
ascendants
a. Add a middle name
and
b. Add the mother’s
descendants
surname
(Art.
c. Add the Roman
375)
numerals II, III, and so
on
P. ABSENCE
Persons Who May Be Appointed By Way Of

Court Order As The Representative Of An
Absentee In Case Of Provisional Absence
Or As An Administrator
1. If no legal separation, the spouse present
2. If no spouse or if the spouse present is a
minor, any competent person
• The spouse who is appointed as
administratrix of the absentee spouse’s
property cannot alienate or encumber the
same, or that of the conjugal partnership,
without judicial authority.
When Administration Shall Cease

1. Absentee appears personally or by means
of an agent;
2. Death of the absentee is proved and his
estate or intestate heirs appear;
3. A third person appears, showing by a proper
document that he has acquired the
absentee's property by purchase or other
title
• The property shall be at the disposal of
those who may have a right thereto

STAGES WHEN TO FILE WHO MAY FILE? REMEDY COMMENTS
Provisional Absence In provisional
- A person disappears from a. Receivership (Art. 12, absence, the judge
his domicile, whereabouts FC) at the instance of an
are unknown and No statutory period a. Interested party b. Judicial separation of interested party, a
a. He did not b. Relative property (Art. 12, FC) relative, or a friend
leave any agent; or c. Friend c. Authority to be sole may appoint a
b.He left an agent but administrator of the conjugal person to represent
agent's power has partnership (Art . 12, FC) him in all that may
expired be necessary.
Judicial Declaration of Without administrator a. Spouse a. When the spouse of the Judicial declaration of
Absence - After 2 years having b. Voluntary absentee is asking for separation absence does not
-Necessary for interested elapsed without any heirs of property(Art. 135, FC) take effect until six
persons to be able to news about the c. Intestate b. When the spouse of the months after its
protect the interest of the absentee or since the heirs absentee is asking the Court publication in a
absentee last news d. Those who that the administration of all newspaper of general
With administrator may have over the classes in the marriage be circulation.
- After 5 years from time property of the absentee transferred to her(Art.142, FC)
of some right subordinated
disappearance to the condition of the
absentee's death
Presumption of death Spouse Action to declare a person Except for purposes
ORDINARY ABSENCE presumptively dead is proper only of remarriage, there
• 4 years  person presumed dead for purposes when the spouse of the absentee is no need for filing a
of remarriage of the spouse present wants to remarry case to declare that
• 7 years  presumed dead for all purposes one is presumptively
EXCEPT for those of succession dead. Presumption of
• 10 years  person presumed dead for purposes death takes effect by
of opening succession operation of law.
EXCEPT if he disappeared after the age of 75, an
absence of 5 years is sufficient
EXTRAORDINARY ABSENCE
aa If a person rode an airplane or sea vessel lost in
the course of voyage, from the time of loss of the
airplane or sea vessel
aa If a person joined the armed forces who has
taken part in war, from the time he is considered
missing in action
aa Danger of death under other circumstances,
from time of disappearance
• 4 years  for all purposes including those of opening

succession
• 2 years  for purposes of remarriage CIVIL LAW REVIEWER Page 49 of 401
Q. CIVIL REGISTER 5. When the change is necessary to avoid
confusion (Sec. 4, R.A. 9048)
MATTERS RECORDED/ENTERED IN THE CIVIL • R.A. 9048 does not sanction a change of first
REGISTER: name on the ground of sex reassignment.
1. Acts, events and judicial decrees concerning Rather than avoiding confusion, changing the
the civil status of persons first name to make it compatible with the sex
2. Birth he transformed himself into through surgery
3. Marriage may only create grave complications in the civil
4. Death registry and the public interest. Silverio vs.
5. Legal separation Republic, G.R. No. 174689, Oct. 22, 2007
6. Annulment of marriage
7. Judgments declaring marriage void from the 6. When the request for change is a consequence
beginning of a change of status, such as when a natural
8. Legitimation child is acknowledged or legitimated
9. Adoption
10. Acknowledgement of natural children USURPATION OF NAME - implies some injury to
11. Naturalization the interests of the owner of the name. It consists
12. Loss of citizenship in the possibility of confusion of identity between
13. Recovery of citizenship the owner and the usurper.
14. Civil interdiction
15. Judicial determination ELEMENTS OF USURPATION OF NAME:
16. Voluntary emancipation of a minor 1. An actual use of another's name by the
17. Change of name defendant
2. Use is unauthorized
General Rule: Entries in the civil register may be 3. Use of another's name is to designate
changed or altered only upon a judicial order. personality or to identify a person
Exception: Clerical or typographical errors or REMEDIES AVAILABLE TO THE PERSON

change in the name or nickname can be changed WHOSE NAME HAS BEEN USURPED:
administratively through verified petition with the 1. Civil (insofar as private persons are concerned)
local office of the civil registrar. a. Injunction
b. Damages (actual and moral)
Who may file petition: Any person having direct 2. Criminal (when public affairs are prejudiced)
and personal interest in any act, event, order or
decree concerning the civil status of persons or WHEN USE OF ANOTHER'S NAME IS NOT
change of name ACTIONABLE:
Used as stage, screen, or pen name, provided:
PROCEDURAL REQUIREMENTS FOR A 1. Use of name is in good faith; and
PETITION FOR CHANGE OF NAME: 2. By using the name of another, no injury is
1. 3 years residency in the province where caused to that person's right
change is sought prior to the filing 3. When use is motivated by modesty, a desire to
2. Must not be filed within 30 days prior to an avoid unnecessary trouble, or other reason not
election prohibited by law or morals
3. Petition must be verified
• The law does not allow dropping of middle
PROPER AND REASONABLE CAUSES THAT name from registered name unless there are
MAY WARRANT THE GRANT OF A PETITION justifiable reasons to do so. Mere convenience
FOR CHANGE OF FIRST NAME/NICKNAME: is not justifiable. Middle names serve to identify
1. Petitioner’s true and official name is ridiculous; the maternal lineage filiation of a person as
2. Petitioner’s true and official name is tainted well as further distinguish him from others who
with dishonor may have the same given name and surname
3. Petitioner’s true and official name is extremely as he has.
difficult to write or pronounce
4. New first name or nickname has been • An illegitimate child whose filiation is not
habitually and continuously used by the
recognized by the father bears only a given
petitioner and he has been publicly known by
name and his mother’s surname, and does not
the first names and nicknames in the
have a middle name, unless legitimated or
community
subsequently acknowledged by the father in a
public document or private handwritten
instrument. In Re: Petition for Change of 2. Change of first
legitimated
Name of Wang,[G.R. No. 159966, March name or nickname
30, 2005]
• If the correction is clerical: summary
proceeding
CHANGE OF ENTRIES IN CIVIL REGISTRY • If the rectification affects the civil status,
WITHOUT JUDICIAL WITH JUDICIAL citizenship or nationality of a party
AUTHORITY AUTHORITY (substantial): adversarial proceeding
Matters which may Change of surname
be made by the can only be done • Change of sex is not a mere clerical or
concerned city or through a court typographical error. There is no special aw in
municipal registrar proceeding the Philippines governing sex reassignment
or consul general EXCEPT when the and its effects. Silverio vs. Republic, [G.R.
(R.A. 9048): request for change is No. 174689, Oct. 22, 2007]
1. Clerical or a consequence of a
typographical error change of status, NOTE: The new law, R.A. 9048, applies only to
• NOT nationality, such as when a clerical and typographical errors in entries of name
age, civil status  natural child is and does not modify the rules mentioned above
needs court order acknowledged or
A. Within the commerce of man (or which
II. PROPERTY may be the objects of contracts or
===================== judicial transactions)
B. Outside the commerce of man
============== 4. Existence
TOPICS UNDER SYLLABUS A. Present property (res existents)
A. Classification of Property (Arts. 414- B. Future property (res futurae)
418, CC) NOTE: Both present and future
property may be the subject of sale but
1. Immovable Property
generally not the subject of donation.
2. Movable Property 5. Materiality or Immateriality
3. According to Ownership A. Tangible or corporeal
a. Public Dominion B. Intangible or incorporeal
b. Private Ownership 6. Dependence or Importance
A. Principal
===================== B. Accessory
============== 7. Capability of Substitution
A. Fungible – capable of substitution by
PROPERTY: An object or a right which is other things of the same quality and
appropriated or susceptible of appropriation by quantity
man, with capacity to satisfy human wants and B. Non-Fungible – incapable of such
needs. substitution, hence, the identical thing
must be given or returned
A. CLASSIFICATION OF PROPERTY 8. Nature or Definiteness
Requisites of Property: (USA) A. Generic – one referring to a group or
1. Utility for the satisfaction of some class
human wants B. Specific – one referring to a single,
• endows property with value susceptible of unique object
pecuniary estimation (e.g. food, shelter, 9. Whether in the Custody of the Court or
clothing, recreation) Free
2. Substantivity or individuality A. In “custodia legis” – in the custody of
• quality of having existence apart from the court
any other thing (e.g. blood, when B. “free” property
separated from the body)
3. Appropriability 1. IMMOVABLE PROPERTY
• susceptibility of being possessed by men
Juridical Classification of Immovable
• not susceptible of appropriation:
Properties: (NIDA)
I. Common things (res communes)
1. By nature – cannot be moved from place
• Exception: those that may be to place because of their nature (Art. 415
appropriated under certain par 1 & 8 NCC)
conditions in a limited way (e.g. A. land, buildings, roads and constructions
Electricity, oxygen) of all kinds adhered to soil
II. Due to physical impossibility (e.g.
− a structure which is merely
Sun)
superimposed on the soil may be
III. Due to legal impossibility (e.g.
considered movable.
Human body)
B. mines, quarries, and slag dumps, while
IV. Due to no ownership (e.g. wild
the matter thereof forms parts of the
animals) or abandonment by the
bed, and waters either running or
owner.
stagnant
Classification of Property
• Once a house is demolished, its character
1. Mobility and Non-mobility
A. Movable or personal property as an immovable ceases. Bicerra v.
B. Immovable or real property Teneza, [6 SCRA 649 (1962)]
2. Ownership
A. Public • A mortgage of land necessarily includes, in
B. Private the absence of stipulation of the
3. Alienability improvements thereon, buildings. Still a
building by itself may be mortgaged apart
from the land on which it has been built. of similar nature including the animals
Such would be a real estate mortgage for in these places
the building would still be considered Requisites: (OP)
immovable property. Leung Yee v. I. Placed by the owner of the or
Strong Machinery, [37 Phil. 644 his agent
(1981)] II. Intent to attach them
permanently to the land
• A valid real estate mortgage can be
constituted on the building erected on the 3. By destination – movable placed on
land belonging to another. Prudential immovable for the utility it gives to the
Bank v. Panis, [153 SCRA 390 (1987)] activity carried thereon (Art. 415 par
4,5,6,7,9)
• The contracting parties may validly A. Machinery, receptacles, instruments or
stipulate that a real property be considered implements intended by owner of the
as personal. After agreeing, they are tenement or his agent for an industry or
consequently estopped from claiming works which may be carried on in a
otherwise. However, third persons acting in building & which tend directly to meet
good faith are not affected by its stipulation the needs of such works/industry
characterizing the subject machinery as − attachment or incorporation to the
personal. Serg’s Products v. PCI immovable is not essential
Leasing, [328 SCRA 299 (2000)] Requisites: (COE)
I. industry or works must be
2. By incorporation – essentially movables carried on inside the building or
but attached to an immovable in a fixed on the land
manner to be an integral part of it (Art. II. placed by the owner of the
415 par 2,3,4,6) building or property or his agent
III. machines must be essential and
A. Trees, plants & growing fruits – while principal elements in carrying
adhered to soil, immovable out the industry
− once cut or uprooted, they cease to − does not include incidentals
be immovables (movables without which the
Except: Uprooted Timber businesses can still continue or
carry on their functions)
B. Everything attached to an immovable in
a fixed manner that it cannot be • Equipment destined only to repair or
separated without breaking the service a transportation business may not
material or deterioration of the object be deemed real property. Mindanao Bus
− intent to attach permanently is v. City Assessor, [6 SCRA 197 (1962)]
essential
− On temporary separation: 2 points B. fertilizers – actually used on a piece of
of view: land
I. May still be considered as C. docks & floating structures – intended
immovable – If there is intent to by their nature and object to remain at
put them back. a fixed place on a river, lake or coast.
II. Movable – because the material 4. By analogy/by law – contracts for public
fact of incorporation is what works, servitude & other real rights over
determines its condition immovable property (Art. 415 par 10)
C. Statues, reliefs, painting or other 2. MOVABLE PROPERTY

objects for use or ornamentation Movable Property: (SIFTOS)
Requisites: (OP) 1. Susceptible of appropriation that are not
I. Placed by the owner of the included in enumeration in immovables.
immovable or his agent Example−
II. Intent to attach them • ½ interest in the business is personal
permanently to the tenements property. Involuntary Insolvency of
Strochechker v. Ramirez,[44 Phil
D. Animal houses, pigeon houses, 933 (1922)]
beehives, fish ponds, or breeding places 2. Immovable that are designated as movable
by special provision of law. Examples−
• Growing crops are considered 3. Whether the object does not fall within any
immovable under Art. 415(2) but of the cases enumerated in Art. 415 (Rule
personal property by Chattel Mortgage of Exclusion)
Law. Sibal v. Valdez, 50 Phil 512
(1927) 3. ACCORDING TO OWNERSHIP
• House built on leased land may be a. Public Dominion
treated insofar as the parties are
concerned as personal property and be Public Dominion – outside the commerce of men.
the object of a chattel mortgage. • KINDS: (USD)
Navarro v. Reyes,[9 SCRA 63 A. intended for public use– can be
(1963)] used by the public or everybody
3. Forces of nature brought under control by B. intended for specific public service
science. Examples− of state, provinces, cities &
• Electricity, gas, rays, heat, light, municipalities – can be used only by
oxygen, atomic energy, water power duly authorized persons, such as
etc. government buildings and vehicles
• Electricity, the same as gas, is an C. for the development of national
article bought and sold like other wealth
personal property and is capable of • Characteristics:
appropriation by another. United A. Outside the commerce of men –
States v. Carlos,[21 Phil. 364 cannot be alienated or leased or be
(1946)] the subject of any contract
4. Things which can be transported w/o B. Cannot be acquired by private
impairment of real property where they are individual or even municipalities
fixed through prescription
5. Obligations which have for their object C. Not subject to attachment &
movables or demandable sums (credits) execution
• obligations and actions must be legally D. Cannot be burdened by voluntary
demandable easement
• demandable sums must be liquidated E. Cannot be registered under the
6. Shares of stocks of agricultural, commercial Land Registration Law and be the
& industrial entities although they may subject of a Torrens Title
have real estate F. In general, can be used by
everybody
Classification Of Movables: NOTE: Fishponds are considered as part of public
1. According to nature dominion and cannot be acquired by private
a. Consumable – cannot be utilized w/o persons unless it is converted into patrimonial
being consumed property. However, fishponds may be leased by
b. Non-consumable the government.
2. According to intention of the • Properties which the government owns for
parties/purpose (whether it can be fundamental purposes for rendering
substituted by other things of same kind, government services are properties of public
quality and quantity) dominion. They are held by the local
a. Fungible (res fungibles) – only the governments for public service, but at the
equivalent is returned same time, they can be removed by the State
b. Non-fungible (res nec fungibles) – from the LGUs without having to pay just
identical thing is returned, do not admit compensation because the LGUs are merely
of substitution acting as agents. (City of Zamboanga Del
Norte v. Province of Zamboanga Del
Test To Determine Whether Property Is Norte)
Real Or Personal
1. Whether the property can be transported or
carried from place to place (Rule of
Description) b. Private Ownership
2. Whether such change of location can be KINDS:
made without injuring the immovable to Patrimonial property - the property of the State
which the object may be attached (Rule of owned by it in its private or proprietary capacity,
Description) the property is not intended for public use, or for
•
some public service, or for the development of the T
national wealth. he right of the public to use the city
G. streets may not be bargained away
- Exist for attaining economic ends of through contract. Rule: Local government
state cannot withdraw a public street from public
- Property of public dominion when no use, unless it has been granted such authority
longer intended for public use/service – by law. Dacanay v. Asistio Jr.,[208 SCRA
declared patrimonial (Article 422 404 (1992)]
NCC)
- Subject to prescription • The power to vacate or withdraw a street or
- May be an object of ordinary contract alley from public use is discretionary and such
- Example: property acquired in will not be interfered with by the courts. The
execution and tax sales, incomes or Charter of Cebu City gives such power to the
rents of the State City Council. Such withdrawn portion thus
H. Property for LGUs becomes patrimonial property which can be the
- Property for public use object of an ordinary contract. Cebu Oxygen
- roads, streets, squares, fountains, v. Bercilles, [66 SCRA 481 (1975)]
public waters, promenades and public
works for public service paid for by the • A property continues to be part of the
LGUs public domain until there is a formal
- all other properties possessed by LGUs declaration on the part of the government
without prejudice to special laws are to withdraw it from being such. An
considered patrimonial abandonment of the intention to use the
NOTE: Patrimonial properties of LGUs cannot property for public service and to make it
be removed by the State without paying just patrimonial property must be definite. It cannot
compensation. be inferred from the non-use alone. Laurel v.
I. Property of Private Ownership - all Garcia, [187 SCRA 797 (1990)]
properties belonging to private persons and
those belonging to the State and any of its ==============================
political subdivisions which are patrimonial ======================
in nature TOPICS UNDER SYLLABUS
B. Ownership (Arts. 427-439, CC)
Conversion Of Property Of Public Dominion 1. Rights of Ownership/Limitations
To Patrimonial Property
1. Property of the National Government
2. Doctrines of Incomplete
• formal declaration by the executive or Privilege/Self Help
legislative department that the property 3. Presumption of Ownership
is no longer needed for public use or for 4. Rule of Hidden Treasure
public service ==========================
2. Property of political subdivisions ==================
• must be authorized by law OWNERSHIP -is the independent right of a person
NOTE: Sacred and religious objects are outside the to the exclusive enjoyment and control of a thing
commerce of man. They are neither public nor including its disposition and recovery subject only
private party. to the restrictions or limitations established by law
and the rights of others.
Political subdivisions cannot register as their own
any part of the public domain, UNLESS: TITLE -is that which constitutes a just cause of
1. grant has been made exclusive possession or which is the foundation of
2. possession has been enjoyed during the period ownership of property.
necessary to establish a presumption of
ownership Kinds Of Ownership:
1. FULL OWNERSHIP (dominium or jus in re
Aliens have no right to acquire any public or propia) – includes all the rights of the owner
private agricultural, commercial, or residential 2. NAKED OWNERSHIP (nuda proprietas) –
lands except by hereditary succession. where the right to the use and the fruits
has been denied
Private individual has superior right over the
property against the state.
• Naked ownership + usufruct = Full
ownership
3. SOLE OWNERSHIP – ownership is vested
only in one person
4. CO-OWNERSHIP/TENANCY IN COMMON
– ownership is vested in two or more
owners; unity of the property, plurality of
the subjects
1. RIGHTS OF OWNERSHIP/LIMITATIONS
Seven Rights Of Ownership:

1. JUS ABUTENDI – right to consume,
transform or abuse by its use
2. JUS ACCESIONES – right to fruits and
accessories
3. JUS DISPONENDI – right to dispose,
including the right not to dispose, or to
alienate
4. JUS FRUENDI – right to fruits
5. JUS POSSIDENDI – right to possess
• does not necessarily include the right to
use (e.g. contract of deposit)
6. JUS UTENDI – right to use and enjoy
• Includes the right to transform and
exclude any person from the enjoyment
and disposal thereof
• Limitation: use in such a manner as not
to injure the rights of a third person
7. JUS VINDICANDI – right to vindicate or
recover
Limitations on the Right of Ownership:

(CLOGS)
1. those arising from conflicts of private
rights (e.g. those which take place in
accession continua)
2. those imposed by law (e.g. Legal
easement)
3. those imposed by the owner himself (e.g.
Voluntary easement, pledge, lease)
4. those imposed by the grantor of the
property on the grantee
A. by contract (e.g. donation)
B. by last will
5. those imposed in general by the State
A. police power
B. power of taxation
C. power of eminent domain
Right of Ownership not absolute

• The welfare of the people is the
supreme law of the land. Salus populi
suprema est lex.
• Use your property so as not to impair
the rights of other. Sic utere tuo ut
alienum non laedas.
ACTIONS FOR POSSESSION:
MOVABLES – Replevin/ Manual Delivery (return of a movable)
• both principal and provisional remedy
• Plaintiff shall state in the affidavit that he is the owner of the property claimed,
particularly describing it or that he is entitled to possession, and that it is wrongfully
detained by the other.
• PERIOD: 4 or 8 years from the time the possession thereof is lost, in accordance with Art.
1132
• machinery and equipment used for an industry and indispensable for the carrying on of
such industry, cannot be the subject of replevin, because they are considered real
properties.
• property validly deposited in custodia legis cannot be the subject of a replevin suit
IMMOVABLES
ACTION CAUSE GROUND ISSUE PERIOD COURT PROCEEDIN
GS
Forcible GROUND: De facto Within 1 year MTC Summary
entry deprivation of or physical from (1) proceeding
(detenci possession through: possession unlawful
on) force, intimidation, deprivation, or
strategy, threat, or from (2)
stealth (FISTS) discovery, in
Accion case of stealth
Interdic or strategy
tal Unlawfu Lessor/person Physical Within 1 year MTC Summary
l having legal right possession from unlawful proceeding
detainer over property deprivation:
(desahui deprived of such date of last
co) when the demand or last
lessee/person letter of
withholding property demand
refuses to surrender
possession of
property after
expiration of
lease/right to hold
property
Accion Publiciana Better right of Possession Within a period Depends
possession DE FACTO of 10 years, on
otherwise the ASSESSE
real right of D VALUE
possession is
lost
Accion Recovery of OWNERSH 30 years Depends Civil
Reinvindicatoria dominion of property IP on
based on ownership ASSESSE
D VALUE
I. Injunction
- Generally not available as a remedy.
- When injunction is allowed:
A. Actions for forcible entry
B. Ejectment
- possessor admittedly the owner or in possession in concept of owner
- possessor clearly not entitled to property
- extraordinary cases – where urgency, expediency and necessity so required
II. Writ of possession
- When proper:
A. Land registration cases
B. Foreclosure, judicial or extra-judicial, of mortgage – provided that the mortgagor has
possession and no third party has intervened
C. Execution sales
D. Eminent domain proceedings
E. Ejectment
2.
DOCTRINE OF STATE OF NECESSITY e. Action is founded on positive rights
f. Evidence required: preponderance of
STATE OF NECESSITY—is the principle which evidence.
authorizes the destruction of a property which is
lesser in value to avert the danger poised to b) Eminent Domain
another property the value of which is much
greater. EMINENT DOMAIN—is the superior right of the
State to acquire private property whether
REQUISITES OF STATE NECESSITY: registered or not for public use upon payment of
1. Interference necessary to avert an imminent just compensation. It is one of the limitations of
danger the right of ownership.
2. Damage to another much greater than damage a. Absolute necessity for expropriation is not
required. It is enough that reasonable
to property
necessity for public use is intended.
• COMPARATIVE DANGE— Danger must be b. Just compensation is equivalent to the value of
greater than damage to property. Consider the land. (Market value plus consequential
the economic and sentimental value of the damages minus the consequential benefits)
property. c. The market value should be determined at the
time of the filing of the complaint or at the
• MEASURE OF RATIONAL NECESSITY—
time of taking of the property, whichever
the law does not require a person acting in transpires first.
a state of necessity to be free from d. The ownership over the property taken is
negligence or mistake. He must be given transferred only when the just compensation
the benefit of reasonable doubt as to with proper interest had been made
whether he employed rational means to
avert the threatened injury. Elements for Taking in Eminent Domain:
(CPJD)
• The owner of the sacrificial property is 1. Taking done by Competent authority
obliged to tolerate the act of destruction a. Executive branch
but subject to his reimbursement by all b. Municipal corporations, other government
those who benefited. entities, and public service corporations.
• In case of conflict between the exercise of 2. For Public use
aa That only a few actually benefit
the right of self-help and a proper and licit
does not diminish its public use
state of necessity, the latter prevails 3. Owner paid Just compensation
because there is no unlawful aggression a. Value at the time of the taking
when a person or group of persons acts 4. Due process of law observed
pursuant to the right given in a state of
necessity. Computation for Just Compensation under
Agrarian Reform
3. PRESUMPTION OF OWNERSHIP
LBP v. Cruz, [G.R. No. 175175, Sept. 29,
a) Requisites to Raise the Disputable 2008]
Presumption of Ownership:
How will the computation of just computation
1. Actual possession of the property applied? Section 17 of R.A. No. 6657: In
2. Possession is under the claim of ownership determining just compensation, the cost of
a. Possessor of property has the presumption acquisition of the land, the current value of like
of title in his favor properties, its nature, actual use and income, the
b. Judicial process contemplated for recovery sworn valuation by the owner, the tax declarations,
of property: ejectment suit or and the assessment made by government
reinvindicatory action assessors, shall be considered. The social and
c. The person claiming better right must economic benefits contributed by the farmers and
prove: the farmworkers and by government to the
a. That he has better title to the property as well as the non-payment of taxes or
property loans secured from any government financing
b. Identity of the property institution on the said land shall be considered as
d. One must depend on strength of his title additional factors to determine its valuation.
and not the weakness of the defense
Formula by the DAR in using Section 17 POLICE POWER— is another limitation of the right
of RA 6657 (DAR A.O. No. 5, series of of ownership wherein property may be interfered
1998): with, even destroyed, if so demanded by the
LV = Land Value welfare of the community. The owner of the
CNI = Capitalized Net Income property is not entitled to compensation
CS = Comparable Sales
MV = Market Value per declaration Requisites of Police Power: (PRO)
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 1. Public interest
0.1) 2. Reasonably necessary means for the
accomplishment of a purpose
Procedure of Expropriation under Agrarian 3. It is not unduly Oppressive upon individuals
Reform: a. No taking of property involved
LBP is an agency created primarily to provide b. No financial compensation
financial support in all phases of agrarian reform
pursuant to Section 74 of Republic Act (RA) No. SURFACE RIGHTS OF A LANDOWNER— right to
3844 and Section 64 of RA No. 6657. Once an surface & everything under it only as far as
expropriation proceeding for the acquisition of necessary for his practical interest (Benefit or
private agricultural lands is commenced by the Enjoyment)
DAR, the indispensable role of LBP begins. No 1. Rights subject to:
judicial determination of just compensation allowed a. Existing servitudes or easements
without LBP’s participation. Tabuena v. LBP, b. Special laws
[G.R. No. 180557, Sept. 26, 2008]. c. Local ordinances
d. Reasonable requirements of aerial
Abandonment of Property Expropriated: navigation
e. Rights of third persons
MCIAA v. Tudtud, [G.R. No. 174012, Nov. 14,
2008] 4. HIDDEN TREASURE
When a private land is expropriated for public use Concept of Treasure: (HUM)
and subsequently, the public use was abandoned, 1. Hidden and unknown
it returns to its owner unless there is a statutory 2. Unknown owner
provision that prohibits it. 3. Consists of Money, jewels, or other precious
objects. (not raw materials)
MCIAA has the obligation to return to X the land. X
has the obligation to return: Right to Hidden Treasure:
1. What he received as just compensation with 1. Finder is the same as owner of the property –
interest computed from default. treasure totally belongs to him.
2. Necessary expenses incurred by MCIAA in 2. Finder is third person and he discovered it by
sustaining lot and monetary value for services chance – finder is entitled to one half of the
in managing insofar as X was benefitted value of the treasure.
services in managing insofar as X was 3. Finder is an intruder – he is not entitled to
benefitted anything
4. Finder was given express permission by the
Following Article 1187 of the Civil Code, the MCIAA owner – subject to the contract of service and
may keep whatever income or fruits it may have principle of unjust enrichment
obtained from Lot No. 988, and X need not account
for the interests that the amounts they received as
just compensation may have earned in the
meantime.
Respondents, as creditors, do not have to settle as

part of the process of restitution the appreciation
in value of Lot 988 which is a natural consequence
of nature and time. x x x,"
c) Police Power
BASIS ACCION
REPLEVIN FORCIBLE ENTRY UNLAWFUL ACCION REINVINDICATORIA

DETAINER PUBLICIANA
Action or provisional remedy Summary action to Action brought when It is the Action to recover
where the complainant prays recover material or possession by a preliminary ownership of real
for the recovery of the physical possession of landlord, vendor or action to recover property
possession of the personal real property when a vendee or other a better right to
D property person originally in person of any land or possess
e possession was deprived building is being
f * NOT APPLICABLE TO thereof by (FISTS) unlawfully withheld
i (a) Movables distrained or Force, after the termination
n taken for a tax assessment or Intimidation, Strategy, or expiration of the
i fine pursuant to law Threat, or right to hold
t (b) Those under a writ of Stealth possession, by virtue
i execution or preliminary of a contract, express
o attachment or implied
n (c) Those under custodia legis
Where to MTC or RTC depending on the MTC MTC RTC RTC
file amount of money involved
Issue Recovery of possession of Material or physical Material or physical Better right of Ownership of real
involved personal property possession of real possession of real possession of property
property property real property.
Possession de facto Possession de facto Possession de
jure
Action In Personam Quasi in Rem Quasi in Rem Quasi in Rem Quasi in Rem
Prescripti 1 year from 1 year from the time 10 years 10 or 30 years
on dispossession the possession depending on
FIT – from dispossession became unlawful – whether it’s ordinary
SS – from discovery last date of demand or extraordinary
or letter of demand prescription
Others Steps: • May be brought • If there’s a fixed 2 kinds: • Accion
i. Complaint is filed at against the owner in period – 1 year from a) Possession not reinvindicatoria
commencement or at some cases such as the expiration of the through FISTS can be filed
any time before lease lease - can be filed simultaneously
answer of other party Immediately with FE
• Complaint must • If the reason is non-
ii. Complaint should
state FISTS or else it payment of rent or • Judgment of
allege OWTA (owner, b) 1 year period
wrongfully taken, would just be an non-fulfillment of for ownership usually
taken against law) accion publiciana the conditions of FE or UD has includes the right
iii. Pay bond double the which should be filed the lease – 1 year Elapsed of possession
amount of property with the RTC from demand to

iv. • Should
remember
Sheriff takes property vacate Article 434. In an
v. Doors broken if • Complaint filed 5 action to recover
necessary days after ownership, the
demand property must be
Defendant’s remedy: (buildings) or 15 identified, and the
aa File a bond double the days (land plaintiff must rely
amount, and on the strength of
• Refers to any kind
aa Give copy to plaintiff of land his title and not
on the weakness
Stranger’s remedy – File a 3rd • It should be
of the defendant’s
party claim alleged that the claim
right to possess
had been
terminated and
that the
continued
possession was
unlawful
• Not the remedy if
what is sought is
specific
performance
• Demand
Necessary - if there
is a breach
Not necessary – if the
fixed period just
expires

================================ 2.
TOPICS UNDER THE SYLLABUS Usufruct
3. Lease of rural lands
C. Accessions
4. Pledge
1. Accession Discreta
5. Antichresis
a. Natural Fruits
b. Industrial Fruits 2. ACCESSION CONTINUA — the extension
c. Civil Fruits of the right of ownership of a person to that
2. Accession Continua which is incorporated or attached to a thing
a.1 Accession Industrial which belongs to such person. It may take
i. Builder/ Planter/ Sower place:
(BPS) in Good Faith a. With respect to real property
a) accession industrial
ii. BPS in Bad Faith
b) accession natural
iii. No Claim of Ownership b. With respect to personal property
a.2 Accession Natural i. adjunction or conjunction
a.3 For Personal Property ii. commixtion or confusion
i. Adjucntion/ Conjunction iii. specification
ii. Mixture
iii. Specification a.1 Accession Industrial
================================
PRINCIPLES:
C. ACCESSION
1. Accessory follows the principal.
2. The incorporation or union must be intimate
ACCESSION— is the right of the owner of a
that removal or separation cannot be
thing, real or personal, to become the owner of
effected without substantial injury to either or
everything which is produced thereby, or which
both.
is incorporated or attached thereto, either
3. Good faith exonerates a person from punitive
naturally or artificially.
liability but bad faith may give rise to dire
consequences.
NOTE: It is NOT one of the modes of acquiring
4. Bad faith of one party neutralizes the bad
ownership enumerated in Article 712.
faith of the other.
5. No one should enrich himself at the expense
2 KINDS OF ACCESSION: of another.
1. ACCESSION DISCRETA— the extension of OBLIGATIONS:
the right of ownership of a person to the i. Gathered Fruits
products of a thing which belongs to such
person. It takes place with respect to:
PLANTER OWNER
a. NATURAL FRUITS – spontaneous
products of the soil and the young of Planter Keeps fruits No need to
animals. in Good reimburse the
b. INDUSTRIAL FRUITS – those produced Faith planter of expenses
by lands of any kind through cultivation (GF) since he retains the
or labor. fruits
c. CIVIL FRUITS – rents of buildings, the Planter Reimbursed Gets fruits, pay
price of lease of lands and other property in Bad for planter necessary
and the amount of perpetual or life Faith expenses expenses
annuities or other similar income. (BF) for
production,
GENERAL RULE: All fruits belong to the owner gathering,
of a thing. and
preservation
EXCEPTIONS: (PULPA) (necessary
1. Possession in good faith by another expenses)
CIVIL LAW REVIEWER Page 41 of

401
Exception: removal
ii. Standing Crops OM = OM exercises - provided no
BF the right of injury to the work
PLANTER OWNER LO = BF removal constructed or
Planter Reimbursed Owns fruits (as if destruction of the
in GF for expenses provided he pays both in plantings, etc. will
for planter expenses GF) be caused
production, for production, LO = BF Becomes the 1. Entitled to the
gathering, gathering, and OM = owner of the ABSOLUTE right of
and preservation. GF materials but removal and
preservation (forced co- he must pay: damages (whether
ownership) 1. Value or not substantial
Planter Loses Owns fruits 2. Damages injury is caused)
in BF everything. 2. Entitled to
No right to reimbursement
reimburseme and damages (in
nt case he chooses
not to remove)
iii. Re: Offsprng of Animals. When the
male and female animals belong to PLANTING V. SOWING
different owners, under the Partidas, the
owner of the female was considered also 1. PLANTING— pertains to a perennial fact.
the owner of the young, unless there is a Something that will grow and produce fruits
contrary custom or speculation. The legal year after year without having to be
presumption, in the absence of proof to replanted.
the contrary, is that the calf, as well as its 2. SOWING— pertains to an annual crop.
mother belong to the owner of the latter, Something that will grow and produce fruits
by the right of accretion. US v. and then you plant again before it will
Caballero, [25 Phil 356] This is also in produce fruits again.
accord with the maxim “pratus sequitor
ventrem” (the offspring follows the dam ESSENCE OF DISTINGUISHMENT
or mother). In planting: planter may be required to buy
the land.
Right of Accession with Respect to In sowing: sower may be required to pay
Immovables rents.
Two disputable presumptions as to

improvements on land:
1. Works made by the owner
2. Works made at the owner’s expense
WHERE LAND AND MATERIALS BELONG TO

DIFFERENT OWNERS
Land Owner Owner of
(LO) Materials (OM)
OM = Becomes the 1. Entitled to
GF owner of the reimbursement
LO = materials but - provided he does
GF; he must pay for not remove them
their value. 2. Entitled to
Or

401
WHERE A PERSON BUILDS (IN GOOD OR IN THE LAND OF ANOTHER
BAD FAITH) ON
LAND OWNER (LO) BUILDER

LO = GF OPTIONS: 1. Right to indemnification
Builder= GF; 1. Appropriate a. Necessary expenses, w/ right of retention
improvements as his own until reimbursed
Or after paying for indemnity b. Useful expenses, w/ right of retention
2. Compel the builder to buy 2. Right of removal - if the thing suffers no
LO = BF the land where the injury, and if his successor in the possession
Builder = BF building has been built does not prefer to refund the amount
Exception: expended.
(as if both in Value of land > Value of improvements
GF)  rent to be paid
If builder fails to pay the rent:

- no right of retention
- LO entitled to removal of
improvement
LO = GF OPTIONS: 1. Loses what is built, planted, or sown without
Builder= BF 1. Appropriate the improvements right to indemnity
- must pay for: 2. Liability for damages
- a. necessary expenses for the 3. Entitled to reimbursement for the necessary
preservation of the land expenses of preservation of land
- b. damages
- no need to pay for its value or other
expenses
2. right to demolish or removal +
damages
- at the builder’s expense
3. compel the builder or planter to pay
the price of the land, and the sower the
proper rent + damages
- whether or not the value of the land
is considerably more than the value of
the house
General Rule: LO has no right of removal or EXCEPTIONS to the Rule on Builders, etc.
demolition. (HSBC)
1. Builder, etc. does not claim ownership over
Exception: Option of right of removal is the land but possesses it as mere Holder,
compulsory on the part of the LO when builder fails agent, usufructuary or tenant; he knows
to pay. that the land is not his.
REMEDIES:
1. Demolish what has been built,
sown, or planted EXCEPTION TO THE EXCEPTION: Tenant whose
2. Consider price of land as an lease is about to expire, but still sows, not knowing
ordinary money debt of the builder that the crops will no longer belong to him
- may enforce payment thru an
ordinary action for the recovery of a
money debt (levy and execution)

401
2. A person constructs a building on his own Parties:
land, and then Sells the land but not the 1. Land owner (LO)
building to another 2. Builder, planter, sower (builder)
a. no question of good faith or bad 3. Owner of materials (OM)
faith on the part of the builder
b. can be compelled to remove the • Rights of LO and Builder  same as set
building forth in the table
c. new owner will not be required to • Rights of OM
pay any indemnity for the building a. Bad faith
i. Loses all rights to be indemnified
3. Builder is a Belligerent occupant ii. Can be liable for consequential
4. Builder, etc. is a Co-owner damages (as when the materials are of
a. even if later on, during the partition, an inferior quality)
the portion of land used is awarded b. Good faith
to another co-owner; i. Entitled to reimbursement
ii. In case of insolvency on the part of the
• For Art. 448 of the NCC to apply, the builder LO is subsidiarily liable, if he
construction must be of a permanent makes use of the materials.
character, attached to the soil with an idea
of perpetuity. It is of a transitory character RULE: OM bad faith, Builder bad faith, LO
or is transferable, there is no accession, good faith
and the builder must remove the 1. Between OM and Builder, good faith must
construction. Alviola v. CA, [G.R. govern.  Builder must reimburse OM,
117642, April 12, 1998] but in case Builder cannot pay, LO will not
be subsidiarily liable because as to him,
RULES WHEN LANDOWNER SELLS LAND OM is in bad faith. If the builder pays, he
TO A 3RD PERSON WHO IS IN BAD FAITH cannot ask reimbursement from LO
1. Builder must go against him. because as to LO, builder is in bad faith
2. BUT when the 3rd person paid the landowner: 2. LO  Can ask damages from BOTH; has
a. Builder may still file a case against him the choice to:
b. 3rd person may file a 3rd party complaint a. Appropriate what has been built as his
against landowner own
i. Without payment of any indemnity
for useful or necessary expenses for
• A promised to donate a property to B. B the building
constructed his house thereon before the ii. With indemnity for the necessary
donation. If the property was not donated to expenses for the preservation of the
him, can B be considered a possessor in good land
faith? Mere promise to donate the property to b. Demand the demolition at builder’s
B cannot convert him into a builder in good expense
faith. At the time the improvement was built, c. Compel builder to pay the price of the
such promise was not yet fulfilled, but a mere land
expectancy of ownership that may or may i. Whether the land is considerably
not be realized. If at all, B is a mere more valuable than the building or
possessor by tolerance. A person whose not.
occupation of a realty is by tolerance of its
owners are not possessors in good faith. • A lessee cannot be a builder in good faith.
Hence, he is not entitled to the value of the He is estopped to deny his landlord’s title,
improvements built thereon. Verona Pada- or to assert a better title not only in
Kilario v. CA, [G.R. No. 134329, January himself, but also in some third person while
19, 2000] he remains in possession of the leased
premises and until he surrenders
RULES WHEN THREE PARTIES ARE possession to the landlord. Munar v. CA,
INVOLVED: [230 SCRA 372]; Frederico Geminiano,

401
et al. v. CA, et al., [G.R. No. 120303, • Improvements made prior to the annotation
July 24, 1996] of the notice of lis pendens are deemed to
have been made in good faith. After such
• Estoppel applies even if the lessor had no annotation, P can no longer invoke the
title at the time. The relation of lessor and rights of a builder in good faith. Should E
lessee was created and may be asserted opt to appropriate the improvements made
not only by the original lessor, but also by by P, it should only be made to pay for
those who succeed to his title. As lessees, those improvements at the time good faith
they knew that their occupation of the existed to be pegged at its current market
premises would continue only for the life of value. Carrascoso v. CA, [G.R. No.
the lease. They cannot be considered as 123672, December 14, 2005]
possessors nor builders in good faith.
Racaza v. Susan Realty, Inc., [18 SCRA
1172]; Vda. De Bacaling v. Laguna, [54
SCRA 243]; Santos v. CA, [221 SCRA
42]
• Even if the lessor promised to sell, it would

not make the lessee possessor or builder in
good faith so as to be covered by the
provisions of Art. 448 of the NCC, if he
improves the land. The latter cannot raise
the mere expectancy of ownership of the
land because the alleged promise to sell
was not fulfilled nor its existence even
proven. (Jurado)
• The owner of the land on which a building

has been built in good faith by another has
the option to buy the building or sell his
land to the builder, he cannot refuse to
exercise either option. Sarmiento v.
Agana, [129 SCRA 122 (1984)]
• Owner of the land on which improvement

was built by another in good faith is entitled
to removal of improvement only after
landowner chose to sell the land and the
builder refused to pay for the same. Where
the land’s value is greater than the
improvement, the landowner cannot
compel the builder to buy the land. A
“forced lease” is then created and the court
shall fix the terms thereof in case the
parties disagree thereon. Depra v.
Dumlao, [136 SCRA 475 (1985)]
• The right to choose between appropriating

the improvement or selling the land on
which the improvement of the builder,
planter or sower stands, is given to the
owner of the land (not the court) Balatan
v. CA, [304 SCRA 34 (1999)]

401
ACCESSION
Accession Accession
Discreta Continua
Natural Industrial Civil Real Personal

Fruits Fruits Fruits
rents of buildings
price of leases of
land & Accession Accession Adjunction/ Specification Mixed
Spontaneous Industrial Natural Conjunction
products of the other property
soil, amount of
Young and other perpetual or life
products of annuities or
Building Alluvium commixtion
animals other similar (ISTEP)
Planting Avulsion confusion
income Inclusion or
Sowing Change of course
engraftment
of rivers
Formation of
Soldadura or
soldering
islands
Tejido or weaving
Escritura or writing
Pintura or Painting
Accession Natural AVULSION - accretion which takes place when
the current of a river, creek, or torrent
i. Alluvium segregates from an estate on its bank a known
portion and transfers it to another estate, in
ALLUVION - the accretion which the banks of which case, the owner of the estate to which the
rivers gradually receive from the effects of the segregated portion belonged, retain the
current of the waters and which belong to the ownership thereof.
owners of lands adjoining the said banks.
ALLUVIUM vs. AVULSION
ACCRETION - act or process by which a riparian ALLUVIUM AVULSION
land gradually and imperceptively receives Deposit of soil is Deposit of soil is sudden
addition made by the water to which the land is gradual and or abrupt.
contiguous. imperceptible.
Soil cannot be Soil is identifiable and
ESSENTIAL ELEMENTS: identified. verifiable.
1. Deposit or accumulation of soil or sediment Deposit of soil belongs Deposit of soil belongs to
must be gradual and imperceptible. to the owner of the the owner from whose
2. Accretion results from the effects or action of property to which it is property it was detached.
the current of the waters of the river. attached.
3. The land where accretion takes place must
be adjacent to the bank of a river. ESSENTIAL ELEMENTS:
1. Segregation and transfer must be caused by
• Registration under the Torrens System the Current of a river, creek or torrent.
does not protect the riparian owner 2. Segregation and transfer must be Sudden or
against the diminution of the area of his abrupt.
registered land through gradual changes 3. The portion of land transported must be
in the course of an adjoining stream. Known or identifiable.
Viajar v. CA, [168 SCRA 405 (1988)]
NOTE: The owner should remove the transferred
• Failure to register the acquired alluvial portion within two years; otherwise, it
deposit by accretion for 50 years becomes permanently attached.
subjected said accretion to acquisition
through prescription by third persons. Uprooted Trees
Reynante v. CA, [207 SCRA 794 1. Trees uprooted and carried away by the
(1992)] current of the waters
a. Owners do not claim them w/in
• The rules on alluvion do not apply to 6mos  Belong to the owner of the
man-made or artificial accretions to lands land upon which they may be cast
that adjoin canals or esteros or artificial b. Owners claim them  owners pay
drainage system. Ronquillo v. CA, [195 the expenses incurred in gathering
SCRA 433 (1991)] them or putting them in a safe
place
• Law of Waters: “ART. 4. Lands added to
the shores by accretions and alluvium iii. Change of Riverbed
deposits caused by the action of the sea,
form part of the public domain. When Requisites:
they are no longer washed by the waters 1. There must be a natural change in the course
of the sea, and are not necessary for the of the waters of the river.
purposes of public utility, or for the 2. The change must be abrupt or sudden.
establishment of special industries, or for
the coastguard service, the Government Right of owner of land occupied by new
shall declare them to be the property of river course:
the owners of the estates adjacent 1. Right to old bed ipso facto in proportion to
thereto and as an increment thereof.” area lost
Lanzar v. Dir. Of Lands, [78 SCRA 2. Owner of adjoining land to old bed: right to
152] acquire the same by paying its value – Value
not to exceed the value of area occupied by
ii. Avulsion new bed
New River Banks b. Indemnifies the owner of the
1. New river banks created  public dominion accessories for the values thereof.
2. New river bed may itself be abandoned, due
to natural or artificial causes authorized by Test To Determine Principal:
law. 1. Rule of importance and purpose
a. owners will get back this previous 2. Greater value - If they are of unequal value
property if the course of the river reverts 3. Greater volume - If they are of equal value
back to its original place 4. Greater merits
iv. Formation of Islands When Separation Allowed:

1. Separation without injury
ISLAND BELONGS TO THE STATE: 2. Separation with injury – accessory is much
1. On seas within the jurisdiction of the more precious than the principal; the owner
Philippines of the former may demand its separation
2. on lakes even though the principal may suffer injury.
3. on navigable or floatable rivers 3. Owner of principal in bad faith
Islands formed in Non-navigable or Non-

floatable Rivers: RULES AS TO OWNERSHIP
1. Island  to the owners of the margins or OWNER OF OWNER OF
banks of the river nearest to each of them. PRINCIPAL ACCESSORY (OA)
2. If in the MIDDLE of the river  divided (OP)
longitudinally in halves OP = Acquires the May demand
GF accessory reparation:
a.3 For Personal Property OA = - indemnifies a. If no injury will be
GF the former caused
i. Adjunction/ Conjunction owner for its b. If value of
Or value accessory is greater
ADJUNCTION OR CONJUNCTION — Is a process than principal -
whereby two movable things owned by different OP = even if damages
persons are joined together without bad faith, in BF will be caused to
such a way that they form a single object. OA = principal (expenses
GF is to the one who
Requisites: caused the
1. The two things conjunction)
belong to different owners. OP 1. Owns the 1. Loses the thing
2. They form a =GF accessory incorporated
single object. OA = 2. Right to 2. Indemnify the
3. They are BF damages OP for the damages
inseparable; that their separation would OP may have
impair their nature or result in substantial suffered
injury to either component. OP = 1. Pay OA Right to choose
BF value of between
CLASSES OF ADJUNCTION: (ISTEP) OA = accessory or 1. OP paying him
1. Inclusion (engraftment) GF 2. Principal its value or
i.e. setting a precious stone on a golden and accessory 2. That the thing
ring be separated belonging to him be
2. Soldadura (soldering) PLUS separated even
i.e. joining a piece of metal to another Liability for though it be
metal damages necessary to
a. Feruminatio – same metal destroy the
b. Plumbatura – different metals principal thing
3. Tejido (weaving) ii. Mixture

4. Escritura (writing)
5. Pintura (painting) MIXTURE— takes place when two or more things
a. Owner of the principal: belonging to different owners are mixed or
a. By law becomes the owner of the combined to such extent that the components
resulting object lose their identity.
KINDS: principal results
1. COMMIXTION – mixture of solid things The things May either The new object
2. CONFUSION – mixture of liquid things joined retain retain or retains or
their nature lose preserves the
RULES: respective nature of the
1. Mixture by the will of the owners natures original object
α. Rights governed by stipulations
β. Without stipulation: each acquires a right
or interest in proportion to the value of
his material
================================
2. Mixture caused by an owner in GF or by TOPICS UNDER THE SYLLABUS
chance D. Quieting Title
a. Each share shall still be in proportion to ================================
the value of their thing
3. Mixture caused by owner in BF QUIETING OF TITLE— is a remedy or
a. The actor forfeits his thing proceeding which has for its purpose an
b. Liable for damages adjudication that a claim of title to realty or an
interest thereon, adverse to the plaintiff, is
iii. Specification invalid or inoperative, or otherwise defective and
hence, the plaintiff and those claiming under him
SPECIFICATION — imparting of a new form to may forever be free of any hostile claim.
the material belonging to another; or the making
of the material of another into a thing of a Reasons:
different kind. 1. Prevent litigation
2. Protect true title & possession
RULES: 3. Real interest of both parties which requires
1. When the maker (considered principal) is that precise state of title be known
in GF
a. May appropriate but must ACTION TO QUIET TITLE
indemnify the owner of the 1. Puts an end to vexatious litigation in respect
material to property involved; plaintiff asserts his own
b. May not appropriate – when estate & generally declares that defendant’s
material transformed > new thing. claim is w/o foundation
The OM may: 2. Remedial
i. Appropriate the new thing 3. QUASI IN REM - suits against a particular
subject to the payment of person or persons in respect to the res May
the value of the work, or not be brought for the purpose of settling a
ii. Demand indemnity for the boundary disputes
material with damages 4. Applicable to real property or any interest
b. When the maker is in BF therein. The law, however, does not exclude
a. OM can appropriate the work personal property from actions to quiet title.
without paying for the labor or 5. An action to quiet title brought by the person
industry in possession of the property is
b. OM can demand indemnity plus IMPRESCRIPTIBLE.
damages 6. If he is not in possession, he must invoke his
c. OM cannot appropriate if the value of the remedy within the prescriptive period.
work is considerably more than the value
of the material due to artistic or scientific Classifications:
importance 1. Remedial action –to remove cloud on title
2. Preventive action –to prevent the casting of a
COMPARISON OF THE 3 TYPES OF (threatened ) cloud on the title.
ACCESSION OF MOVABLES Requisites: (TICR)
ADJUNCTION MIXTURE SPECIFICATION 1.
Involves at Involves at Involves at least 2 Plaintiff must have a legal or equitable Title
least 2 things least 2 things or interest in the real property
things 2.
As a rule, As a rule, As a rule, Cloud in such title
accessory co- accessory follows
follows ownership principal
3.
Such cloud must be due to some Instrument, Purpose To end Procure
record, claim, encumbrance or vexatious cancellation,
proceeding which is: litigation in release of an
a) apparently valid respect to the instrument,
b) but is in truth invalid, ineffective, voidable property encumbrance or
or unenforceable concerned claim in the
c) prejudicial to the plaintiff’s title plaintiff’s title-
4. which affects the
Plaintiff must Return to the defendant all title or enjoyment
benefits received from the latter or reimburse of the property
him for expenses that may have redounded Nature Plaintiff asserts Plaintiff declares
to his benefit own claim and his own claim and
declares that title, and at the
NO APPLICATION TO: the claim of the same time
1. Questions involving interpretation of defendant is indicates the
documents unfounded and source and nature
2. Mere written or oral assertions of claims, calls on the of the defendant’s
EXCEPT defendant to claim, pointing its
a. If made in a legal proceeding justify his claim defects and prays
b. If it is being asserted that the instrument on the property for the declaration
of entry in plaintiff’s favor is not what it that the same of its invalidity
purports to be may be
3. Boundary disputes determined by
4. Deeds by strangers to the title UNLESS the court
purporting to convey the property of the
plaintiff Except: In one case, a piece of land was owned
5. Instruments invalid on their face by as a husband and wife, and it was offered for
6. Where the validity of the instrument involves bail. They executed a mortgage in the land in
pure questions of law favor of the Court. Later on, the land was
foreclosed and the State was the sole bidder.
Deed of Sale was issued in favor of the State. The
ACTION TO REMOVE CLOUD owner of the land could not redeem it. But the
1. Intended to procure cancellation, delivery, State did not change the title to be under its
release of an instrument, encumbrance, or name. Many years after that, the heirs of the
claim constituting a on plaintiff’s title which couple brought an action to quiet title. The
may be used to injure or vex him in the Supreme Court denied the claim. The Court
enjoyment of his title failure of the State to have it registered does not
2. Preventive mean that the title is invalid. The Court also held
CLOUD—is a semblance of title, either legal or that the right for action to quiet title is
equitable, or a claim or a right in real property, imprescriptible so long as the plaintiff is in
appearing in some legal form but which is, in possession of the property.
fact, invalid or which would be inequitable to
enforce. Ruinous Buildings and Trees in Danger of
Falling
Existence of Cloud: (AIP) Liability for damages:
1. Instrument or record or claim or 1. Collapse – engineer, architect or contractor
encumbrance or proceeding which is 2. Collapse resulting from total or partial
Apparently valid or effective damage; no repair made – owner; state may
2. BUT is, in truth and in fact, Invalid, compel him to demolish or make necessary
ineffective, voidable, or unenforceable, or work to prevent if from falling
extinguished (or terminated) or barred by 3. If no action – done by government at expense
extinctive prescription of owner
3. May be Prejudicial to the title
• To constitute an Act of God:
DISTINCTIONS BETWEEN ACTION FOR Requisites:
QUIETING OF TITLE AND ACTION FOR 1. The cause of the breach of obligation
REMOVAL OF CLOUD must be independent of the will of the
BASIS ACTION TO ACTION TO debtor
QUIET TITLE REMOVE CLOUD
3.
2. The event must be either unforeseeable 3.
or unavoidable Succession
3. The event must be such as to render it 4.Fortuitous event/chance (i.e., commixtion)
impossible for the debtor to fulfill his 5.Occupancy (i.e.,2 persons catch a wild
obligation in a normal manner animal)
4. The debtor must be free form any 6.Donation
participation in, or aggravation of the
injury to the creditor. Nakpil v. CA, [144 Kinds of Co-ownership:
SCRA 595 (1986)] 1. Ordinary – right of partition exists
2. Compulsory – no right partition exists (party
================================ wall)
TOPICS UNDER THE SYLLABUS 3. Legal – created by law
E. Co-ownership 4. Contractual – created by contract
1. Elements 5. Universal – over universal things (co-heirs)
6. Singular or Particular – over particular or
2. How Created specific thing
3. Rights of Co-owners 7. Incidental – exists independently of the will of
a. Ownership over Whole the parties
Property
b. Sale/ Alienation DISTINGUISHED FROM PARTNERSHIP
i. Of Individual Interest BASIS CO- PARTNERSH
ii. Of Entire Property OWNE IP
RSHIP
iii. Redemption by Other Co- Legal No legal Has legal or
owners personality personality juridical
iv. Prescription personality
c. Benefits/ Fruits/ Interest/ Source Created by Created by
Income contract or contract only
d. Use/ Possession other things (express or
e. Management/ Administration implied)
Purpose Collective Profit
4. Partition enjoyment of a
a. Demandable Anytime thing
b. Prohibition for Indivision Term Agreement for No term limit
5. Obligations of Co-owners it to exist for set by law
6. Termination 10 years –
================================ valid (If more
than 10 years,
the excess is
void)
NOTE: 20
years is the
E. CO-OWNERSHIP maximum if
imposed by
CO-OWNERSHIP —is a form of ownership which the testator or
exists whenever an undivided thing or right donee of the
belongs to different persons. common
property
1. ELEMENTS Representatio As a rule, no As a rule,
1. Plurality of subjects – many owners n mutual there is
2. Object of ownership must be undivided representation mutual
3. Recognition of ideal shares; no one is an representatio
owner of a specific portion of the property n
until it is partitioned. Effect of death Not dissolved Dissolved by
by death or the death or
2. HOW CREATED incapacity of a incapacity of
1.Law co-owner a partner
2.Contracts Substitution Can dispose of Cannot
his share substitute ii. Of Entire Property
without another as
consent of partner in his iii. Redemption by Other Co-
others place without owners
consent of
others Right of redemption
Profits Must always May be i. Right to be adjudicated thing (subject
depend on stipulated to right of others to be indemnified)
proportionate upon ii. Right to share in proceeds of sale of
shares thing if thing is indivisible and they
cannot agree that it be allotted to one
DISTINGUISHED FROM JOINT TENANCY of them
BASIS CO- JOINT
OWNERSHIP TENANCY NOTE:
Shares Involves a Involves a • To be exercised w/in 30days from
physical whole. physical whole. written notice of sale of undivided
But there is an But there is no share of another co-owner to a
ideal (abstract) ideal (abstract) stranger
division; each division; each and • Redemption of the whole property
co-owner being all of them own by a co-owner does not vest in
the owner of the whole thing him sole ownership over said
his ideal share property. Redemption within the
Disposal Each co-owner Each co-owner period prescribed by law by a co-
of shares may dispose of may not dispose owner will inure to the benefit of
his ideal or of his own share all co-owners. Hence, it will not
undivided without the put an end to existing co-
share (without consent of all the ownership. Mariano v. CA, [222
boundaries) rest, because he SCRA 736 (1993)]
without the really has no ideal
other’s consent share iv. Prescription
Effect of share goes to share goes by
death his own heirs accretion to the General Rule - A co-owner cannot acquire the
other joint- whole property as against the other co-
tenants by virtue owners by acquisitive prescription.
of their
survivorship or jus Exception - When there is valid repudiation –
accrecendi prescription shall start from such repudiation
Effect of If a co-owner is If one joint-tenant
disability a minor, this is under legal Exception to the Exception - In constructive
does not disability (like trusts, prescription does not run
benefit the minority), this
others for the benefits the other i. A co-owner cannot sell the property
purpose of against whom without the other co-owners’ consent,
prescription, prescription will otherwise, the selling co-owner’s share
and not run shall be the only one valid. Paulmitan v.
prescription CA, [215 SCRA 866 (1992)]
therefore runs
against them ii. While the husband is the recognized
administrator of the conjugal property
3. RIGHTS OF CO-OWNERS under the Civil Code, there are instances
a. Ownership over Whole Property when the wife may assume
administrative powers or ask for the
b. Sale/ Alienation separation of property. Where the
husband is absent and incapable of
i. Of Individual Interest administering the conjugal property, the
o Right to alienate, assign or wife must be expressly authorized by the
mortgage own part; except husband or seek judicial authority to
personal rights like right to use assume powers of administration. Thus,
and habitation any transaction entered by the wife
at
without the court or the husband’s any time demand the partition of the thing
authority is unenforceable. Being an owned in common, insofar as his share is
unenforceable contract, the 2nd Contract concerned.
is susceptible to ratification. The husband
continued remitting payments for the b. Prohibition for Indivision
satisfaction of the obligation under the
questioned contract. These acts Exception - A co-owner may not successfully
constitute ratification of the contract. demand a partition:
Fabrigas v. San Francisco, [G.R. No. 1. If by agreement (for a period not
152346, Nov. 25, 2005] exceeding 10 years, renewable) partition is
prohibited
c. Benefits/ Fruits/ Interest/ Income 2. When partition is prohibited by a
o Right to benefits proportional to donor or testator (for a period not exceeding
respective interest 20 years) – from whom the property came
i. Stipulation to contrary is void 3. When partition is prohibited by law
o Right to full ownership of his part and 4. When a physical partition would
fruits render the property unserviceable, but in this
case, the property may be allotted to one of
d. Use/ Possession the co-owners, who shall indemnify the
o Right to use thing co-owned others, or it will be sold, and the proceeds
i. For purpose for which it is distributed
intended 5. When the legal nature of the
ii. Without prejudice to interest common property does not allow partition
of ownership
iii. Without preventing other co- REQUISITES OF REPUDIATION:
owners from making use aa Unequivocal acts of repudiation of the co-
thereof ownership amounting to an ouster of the
other co-owners
e. Management/ Administration aa Positive acts of repudiation have been
made Known
o Right to change purpose of co- aa Evidence is clear and conclusive
ownership by agreement aa Open, continuous, exclusive, notorious
o Right to bring action in ejectment in possession
behalf of other co-owner
o Right to compel co-owners to
contribute to necessary expenses for 5. OBLIGATIONS OF CO-OWNERS
preservation of thing and taxes
o Right to exempt himself from 1. Share in charges proportional to respective
obligation of paying necessary interest; stipulation to contrary is void
expenses and taxes by renouncing 2. Pay necessary expenses and taxes – may be
his share in the pro indiviso interest; exercised by only one co-owner
but can’t be made if prejudicial to 3. Pay useful and luxurious expenses – if
co-ownership determined by majority
o Right to make repairs for 4. Duty to obtain consent of all if thing is to be
preservation of things; can be made altered even if beneficial; resort to court if
at will of one co-owner; receive non-consent is manifestly prejudicial
reimbursement therefrom; notice of 5. Duty to obtain consent of majority with
necessity of such repairs must be regards to administration and better
given to co-owners, if practicable enjoyment of the thing; majority means
o Right to ask for partition anytime majority in the interest not in the number of
o Right of pre-emption co-owners; court intervention if prejudicial –
appointment of administrator
4. PARTITION 6. No prescription to run in favor co-owner as
long as he recognizes the co-ownership;
requisites for acquisition through prescription
a. Demandable Anytime
ι. He has repudiated through
unequivocal acts
General Rule: No co-owner shall be obliged to
remain in the co-ownership. Each co-owner may ιι. Such act of repudiation is made
known to other co-owners
ιιι. Evidence must be clear and General Rule: Common areas shall remain
convincing undivided, and there shall be no judicial partition
7. Co-owners cannot ask for physical division if thereof
it would render thing unserviceable; but can
terminate co-ownership Exceptions
8. After partition, duty to render mutual 1. When the project has not been rebuilt or
accounting of benefits and reimbursements repaired substantially to its state prior to its
for expenses damage or destruction 3 years after damage or
9. Under Art. 493 of the NCC, each co-owner destruction which rendered a material part
has full ownership of his part and of the fruits thereof unfit for use;
and benefits pertaining thereto, and he may 2. When damage or destruction has rendered ½
alienate, assign or mortgage the portion or more of the units untenable and that the
which may be allotted to him upon the condominium owners holding more than 30%
termination of the co-ownership. It appears interest in the common areas are opposed to
that while there is a single certificate of title, restoration of the projects;
the three lots are distinguishable from each 3. When the project has been in existence for
other. more than 50 years, and the condominium
owners holding in aggregate more than 50%
RIGHTS OF 3RD PARTIES interest in the common areas are opposed to
1. Creditors of assignees may take part in restoration, remodeling or modernizing;
division and object if being effected 4. When a project or a material part thereof has
without their concurrence, but cannot been condemned or expropriated and the project
impugn unless there is fraud or made is no longer viable or that the condominium
notwithstanding their formal opposition owners holding in aggregate more than 70%
2. Non-intervenors – retain rights of interest in the common areas are opposed to the
mortgage and servitude and other real continuation of the condominium regime.
rights and personal rights belonging to 5. When conditions for partition by sale set forth
them before partition was made in the declaration of restrictions duly registered
have been met.
================================
F. Condominium Act (RA 4726) ================================
================================
G. Possession
1. Elements
CONDOMINIUM – an interest in real property
consisting of a separate interest in a unit in a 2. Kinds
residential, commercial or industrial building and 3. Requirements—To Ripen into
an undivided interest in common, directly or Ownership
indirectly, in the land on which it is located and in 4. Acquisitive Prescription
other common areas of the building. 5. Rights of Legal Processor
a. Any transfer or conveyance of a unit or an
a. Peaceful & Uninterrupted
apartment office or store or other space
therein shall include the transfer and Possession
conveyance of the undivided interest in i. Co-possession
the common areas or in a proper case, ii. Actions in Case of
the membership or shareholdings in the Deprivation of Possession
condominium: provided however, that b. Fruits
where the common areas in the i. Civil Fruits
condominium project are held by the
owners of separate units as co-owners
ii. Natural/ Industrial Fruits
thereof, no condominium unit therein iii. Pending Fruits
shall be conveyed or transferred to c. Indemnity for Expenses/
persons other than Filipino citizens or Improvements
corporations at least 60% of the capital i. Necessary
stock of which belong to Filipino citizens, ii. Useful
except in cases of hereditary succession.
iii. Luxurious
iv. Possession by Lessee
6. Prescription of Just Title b. Capacity to possess
a. When Applicable c. Object must be capable of being
possessed
b. Meaning of Just Title
2. Thru authorized person (agent or legal
7. Possession of Movables representative)
a. When Lost Requisites:
b. Unlawful Deprivation a. Intent to possess for principal (not for
8. Loss of Possession agent)
================================ b. Authority or capacity to possess (for
another)
POSSESSION— is the holding of a thing or c. Principal has intent and capacity to
enjoyment of a right possess
3. Thru Unauthorized person (but only if
subsequently ratified)
1. ELEMENTS
Requisites:
a. Occupancy
a. Intent to possess for another (the
– actual or constructive (corpus)
principal)
b. Intent to
b. Capacity of “principal” to possess
possess (animus possidendi)
c. Ratification by principal
c. Must be by
virtue of one’s own right
2. REQUIREMENTS—TO RIPEN INTO
Extent of Possession: OWNERSHIP
1. Physical/actual – occupancy in fact of the
whole or at least substantially the whole Classes of Possession:
2. Constructive – occupancy in part in the name 1. In concept of owner – owner himself or
of the whole under such circumstances that adverse possessor
the law extends the occupancy to the Effects:
possession of the whole A. May be converted into ownership
through acquisitive prescription
Subject of possession: things or rights which B. Bring actions necessary to protect
are susceptible of being appropriated possession
C. Ask for inscription of possession
Exceptions: D. Demand fruits and damages from
1. Res communes one unlawfully detaining property
2. Property of public dominion 2. In concept of holder – usufruct, lessee,
3. Discontinuous servitudes bailee in commodatum
4. Non-apparent servitudes 3. In oneself – personal acquisition
A. must have capacity to acquire
DEGREES OF POSSESSION: possession
B. intent to possess
aa Holding w/o title and in violation
C. possibility to acquire possession
of right of owner (grammatical degree)
4. In name of another – agent; subject to
Ex. possession of a thief
authority and ratification if not
aa Possession with juridical title but
authorized; negotiorum gestio
not that of owner (juridical possession)
A. Voluntary – as when an agent
Ex. that of a lessee, pledge,
possesses for the principal
depositary
B. Necessary – as when a mother
aa Possession with just title but not
possesses for a child still in the
from true owner (possessory right)
maternal womb
Ex. A in good faith buys a car
C. Unauthorized – this will become
from B who delivers the same to A
the principal’s possession only
but B merely pretended to be the
after there has been a ratification
owner
without prejudice to the effects of
aa Possession with just title from true negotiorum gestio
ACQUISITION OF POSSESSION FROM THE
• Possession and ownership are distinct
VIEWPOINT OF WHO POSSESSES:
legal concepts. Ownership confers
1. Personal
certain rights to the owner, among which
Requisites:
are the right to enjoy the thing owned
a. Intent to possess
and the right to exclude other persons 1. Possession of hereditary property:
from possession thereof. On the other a. If ACCEPTED  deemed transmitted w/o
hand, possession is defined as the interruption from moment of death
holding of a thing or the enjoyment of a b. If NOT ACCEPTED  deemed never to
right. Literally, to possess means to have possessed the same
actually and physically occupy a thing 2. Except from date of death of decedent.
with or without a right. Thus, a person
may be declared an owner but he may EFFECTS OF BAD FAITH OF DECEDENT ON
not be entitled to possession. Heirs of HEIR
Roman Soriano v. CA, [363 SCRA 86 1. Heir shall not suffer the consequences of the
(2001)] wrongful possession of the decedent (bad
faith is personal)
4. ACQUISITIVE PRESCRIPTION EXCEPTION: when he becomes aware
of the flaws affecting the decedent’s title
POSSESSOR IN GOOD FAITH is one who is not 2. Interruption of good faith may take place at
aware that there exist a flaw in the title or mode the date of summons or that of the answer if
w/c invalidates it. the date of summons does not appear.
HOWEVER, there is a contrary view espousing
POSSESSOR IN BAD FAITH is one who is aware that summons is insufficient to make the
of defect. possessor in bad faith.
3. Effects of possession in good faith  counted
Notes on Good Faith/Bad Faith only from the date of the decedent’s death
• Mistake upon a doubtful/difficult question
of law  may be the basis of good faith MINORS/INCAPACITATED:
• Good faith is always presumed. Burden of 1. May acquire MATERIAL possession but not
proof lies on the one alleging bad faith right to possession;
• Possession is presumed to be enjoyed in 2. May only acquire them through guardian or
the same character in which it is legal representatives
acquired, until contrary is proven.
ACQUISITION: cannot be acquired through force
Ways of Acquiring Possession or intimidation when a possessor objects thereto
1. Material occupation or exercise of a – resort to courts
right
a. TRADICION BREVI MANU– when one • The execution of a deed of sale is merely a
already in possession of a thing by a title prima facie presumption of delivery of
other than ownership continues to possession of a piece of real property, which
possess the same under a new title, that is destroyed when the delivery is not effected
of ownership because of a legal impediment. Said
construction or symbolic delivery, being
b. TRADICION CONSTITUTUM merely presumptive, may be negated by the
POSSESSORIUM— when the owner failure of the vendee to take actual
continues in possession of the property possession of the land sold. Copuyoc v. De
alienated not as owner but in some other Sola, [G.R. No. 151322, October 26,
capacity. 2006]
b. By the subjection of the thing or right to 5. RIGHTS OF LEGAL POSSESSOR

our will
a. TRADICION LONGA MANU– effected by a. Peaceful & Uninterrupted
mere consent or agreement of the parties Possession
b. TRADICION SIMBOLICA– effected by
delivering an object (such as key) o Right to be respected in his
symbolizing the placing of one thing possession; if disturbed – protected
under the control of the vendee by means established by law;
spoliation
c. By proper acts and legal formalities o Possession acquired and enjoyed in
established for acquiring such right of concept of owner can serve as title for
possession acquisitive prescription
POSSESSION THROUGH SUCCESSION
4.
• Possession has to be in concept of Im
provements caused by nature or time to
owner, public, peaceful and
inure to the benefit of person who has
uninterrupted
succeeded in recovering possession
• Title short of ownership
5. Wild animals possessed while in one’s
o Legal presumption of just title (prima
control; domesticated – possessed if they
facie) – for person in concept of owner retain habit of returning back home
o Possession of real property presumes 6. One who recovers, according to law,
that movables are included possession unjustly lost is deemed to have
enjoyed it w/o interruption
i. Co-possession
Liabilities/ Duties Of Possessors
Co-possessors deemed to have exclusively 1. Return of fruits if in bad faith – fruits
possessed part which may be allotted to him; legitimate possessor could have received
interruption in whole or in part shall be to the 2. Bear cost of litigation
prejudice of all 3. Possessor in good faith not liable for loss
ii. Actions in Case of or deterioration or loss except when fraud
Deprivation of Possession and negligence intervened
4. Possessor in bad faith liable for loss or
b. Fruits deterioration even if caused by fortuitous
event
For possessors in good faith: 5. Person who recovers possession not
1. Entitled to fruits received before possession obliged to pay for improvements which
is legally interrupted (natural and industrial – have ceased to exist at the time of
gathered or severed; civil – accrue daily ) occupation
2. Entitled to part of net harvest and part of
expenses of cultivation if there are natural or General Rule Re: possession as a fact:
industrial fruits ( proportionate to time of Possession as a fact cannot be recognized at the
possession ) same time in two different personalities
a. Owner has option to require possessor to
finish cultivation and gathering of fruits Exceptions:
and give net proceeds as indemnity for 1. Co-possessor – there is no conflict of interest,
his part of expenses; both of them acting as co-owners, as in the
b. If possessor in good faith refuses – barred case of property owned or possessed in
from indemnification in other manner common
2. Possession of different concepts or different
c. Indemnity for Expenses/ Improvements degrees
For possessors in good faith: SUMMARY OF RULES ON NECESSARY/

1. Right to be reimbursed for useful expenses USEFUL/ LUXURIOUS POSSESSION &
with right of retention; owner has option of POSSESSION BY LESSEE
paying expenses or paying the increase in BASIS IF IN GOOD IF IN BAD
value of property which thing acquired by FAITH FAITH
reason of useful expenses
2. May remove improvements if can be done
w/o damage to principal thing- unless owner
exercises option of paying; possessor in bad
faith not entitled.
Regardless of good faith/bad faith:

1. Right to be indemnified for necessary
expenses;
2. Possessor in good faith has right of retention
over thing unless necessary expenses paid
by owner
3. Not entitled to payment for luxurious
expense but may remove them provided
principal is not injured – provided owner does
not refund the amount expended
Necessary 1. Right to Right to 1. On capital  1. On capital 
Expenses reimbursemen reimbursement charged to charged to
t - no right of owner owner
2. Right of retention
retention Taxes and 2. On fruits  2. On fruits 
1. Right to Charges charged to charged to
reimbursemen possessor owner
t of either the
amount spent 3. Charges 
Useful or the increase Possessor must
expenses in value – return value of
“plus value” – fruits already
at owner’s received as well
option (art. as value of fruits
546) which the owner
2. Right of or legitimate
retention until No right to Regarding possessor (not
paid reimbursement gathered or To possessor the possessor in
3. Right of severed BF)
removal fruits could have
(provided no received with
substantial due care or
damage or diligence, MINUS
injury is necessary
caused to the expenses for
principal, cultivation,
reducing its gathering, and
value) – harvesting, to
UNLESS the Cultivation prevent the to
Reimbursed
winner (owner expenses of possessor
or lawful gathered fruits
possessor) – not
exercises the reimbursed to
option in (1) possessor
In general, no In general, no Regarding pro-rating To owner
Luxurious right to refund right of refund or pending or between
or or retention retention but ungathered possessor and
Ornamenta but can can remove if no fruits owner of
l Expenses remove if no substantial expenses, net
substantial injury is caused. harvest, and
injury is However, owner charges
caused. has OPTION to
However, allow:
owner has 1. Possessor to
OPTION to remove
allow: 2. Or retain for
a. Possessor himself (the
to remove owner) the
b. Or retain ornament by
for himself refunding the
(the owner) value it has at
the ornament the time owner
by refunding enters into
the amount possession (art.
spent (art. 549)
548)
1.
Production No indemnity G
expenses of ood faith
pending fruits 2. Owner voluntarily parted with the possession
– indemnity of the thing
pro rata to 3. In the concept of owner
possessor: a. Possession in good faith - Equivalent
(owner’s to title
option) money b. One who has lost or has been
allowing full unlawfully deprived of it may recover
cultivation and the thing from whomever possesses
gathering of all it, ordinarily, w/o reimbursement.
fruits; if c. Owner must prove:
possessor i. Ownership of the thing
refused, he ii. Loss or unlawful deprivation or
shall lose all bad faith of the possessor
the right to be NOTE: Owner acts negligently or voluntarily
indemnified in parts w/ the thing owned  cannot recover from
any other possessor
manner.
Improveme No No SUMMARY OF RECOVERY OR NON-
nts no reimbursemen reimbursement RECOVERY PRINCIPLE
longer t Owner may1. from possessor in bad
existing recover without faith
reimbursement2. from possessor in good
Liability for Only if acting Liable in every
faith (if owner had lost the
accidental w/ fraudulent case
property or been
loss or intent or
unlawfully deprived of it)
deterioratio negligence,
the acquisition being from
n after summons
a private person [art. 559]
Improveme To owner or To owner or
Owner may if possessor acquired
nts due to lawful lawful possessor
recover but the object in good faith at
time or possessor
should a public sale or auction;
nature
REIMBURSE the owner to pay the price
possessor paid.
Rules in case of conflict or dispute
Owner cannot 1. if possessor had
regarding possession
recover, even if acquired it in good faith by
1. Present possessor shall be preferred
he offers to purchase from a
2. If both are present, the one longer in
reimburse merchant’s store, or in
possession
(whether or not fairs, or markets in
3. If both began to possess at the same time,
the owner had accordance with the Code
the one who present (or has) title
lost or been of Commerce and special
4. If both present a title, the Court will
unlawfully laws
determine. (Meantime, the thing shall be
deprived) 2. if owner is by his
judicially deposited.)
conduct precluded from
denying the seller’s
A NOTICE OF LIS PENDENS is proper in the
authority to sell
following cases: (PORC-Q)
3. if seller has voidable
1. Action to recover possession of real estate
title which has not been
2. Action to quiet title thereto
avoided at the time of sale
3. Action to remove clouds thereon
to the buyer in good faith
4. Action for partition
for value and without
5. Any other proceedings of any kind in Court
notice of the sellers defect
directly affecting the title to the land or the use
in title
or occupation thereof of the buildings thereon
4. if recovery is no longer
possible because of
6. PRESCRIPTION OF JUST TITLE prescription
5. if sale is sanctioned by
7. POSSESSION OF MOVABLES statutory or judicial
authority
Requisites:
6. if possessor had
obtained the goods Possession Equivalent To Title:
because he was an 1. Possession is in good faith
innocent purchaser for 2. Owner has voluntarily parted with the
value and holder of a possession of the thing - Possessor is in concept
negotiable document of of an owner
title to the goods
ANIMALS
================================
WILD ANIMALS – possessor is the one who has
control over them H. USUFRUCT
DOMESTICATED AND TAMED ANIMALS – the 1. Nature/Elements
possessor does not lose possession as long as 2. Application to Personal and Real
habitually they return to the possessor’s Properties
premises 3. How constituted
4. Rights of the Usufructuary
NOTE: For ownership, the owner must claim them
a. Fruits
within 20 days from their occupation by another
person
b. Possession and enjoyments
c. Lease of property
Loss Of Possession: (PALA)
d. Sale/Alienation of Usufructuary
1. Abandonment of the thing – renunciation rights
of right; intent to lose the thing 5. Obligations of the Usufructuary
2. Assignment made to another by onerous a. Before the Usufruct
or gratuitous title commences
3. Destruction or total loss of the thing or b. During the Usufruct
thing went out of commerce
i. Alteration of form and
4. Possession of another if new possession
lasted longer that 1 year (possession as substance
a fact); real right of possession not lost ii. Exercise of diligence
except after 10 years iii. Repairs
iv. Charges and Taxes
8. LOSS OF POSSESSION v. Insurance
6. Termination of Usufruct
Acts Not Affecting Possession: (not deemed
abandonment of rights); possession not ================================
interrupted
1. Acts merely tolerated USUFRUCT is the right to enjoy the property of
2. Clandestine and unknown acts another with the obligation of preserving its form
3. Acts of violence and substance, unless the title constituting it or
the law otherwise provides
Possession Not Lost When:
2. Even for time being he may not know their Quasi-usufruct is the usufruct pertaining to
whereabouts, possession of movable is not immovables.
deemed lost
3. When agent encumbered property without 1. NATURE/ELEMENTS
express authority – except when ratified
4. Possession may still be recovered: Characteristics or Elements
a. Unlawfully deprived or lost 1. Essential – those without which it cannot be
b. Acquired at public sale in good termed usufruct
faith – with reimbursement a. A real right (whether
c. Provision of law enabling the registered in the Registry of Property or
apparent owner to dispose as if he is not)
owner b. Of a temporary nature or
d. Sale under order of the court duration
e. Purchases made at merchant c. Purpose: to enjoy the benefits
stores, fairs or markets and derive all advantages from the object
f. Negotiable document of title
as a consequence of normal use or right
exploitation Creator Can be created The lessor may or
2. Natural – that which ordinarily is present, only by the may not be the
but a contrary stipulation can eliminate it owner, or by a owner as when
because it is not essential duly authorized there is a sub-
a. Obligation of conserving or agent, acting lease or when the
preserving the form and substance in behalf of the lessor is only a
(value) of the thing owner usufructuary
3. Accidental – those which may be present Origin May be created May be created as
or absent depending upon the stipulation of by law, a rule only by
the parties contract, last contract; and by
a. Whether it be a pure or a will, or way of exception
conditional usufruct prescription by law (as in the
b. The number of years it will case of an implied
exist new lease, or when
c. Whether it is in favor of one a builder has built
person or several, etc in good faith on
the land of another
DISTINGUISHED FROM EASEMENT a building, when
the land is
BASIS USUFRUCT EASEMENT considerably worth
Object May be real or Involves only more in value than
personal real property the building
property. Can Cause The owner is The owner or
also be on rights, more or less lessor is more or
but not personal passive, and less active, and he
rights he allows the makes the lessee
Extent What can be Limited to a usufructuary to enjoy the thing
enjoyed here are particular use enjoy the thing being leased
all uses and given in
fruits of the usufruct
property Repairs The The lessee
Coverag Cannot be May be usufructuary generally has no
e constituted on an constituted in has the duty to duty to pay for
easement; but it favor or, or make the repairs
may be burdening, a ordinary
constituted on piece of land repairs
the land held in usufruct Taxes The The lessee
burdened by an usufructuary generally pays no
easement pays for the taxes
Effect of Usually Not annual charges
death extinguished by extinguished by and taxes on
death of the death of the the fruits
usufructuary owner of the As to A usufructuary The lessee cannot
dominant estate other may lease the constitute a
things property itself usufruct on the
DISTINGUISHED FROM LEASE to another property leased
BASIS USUFRUCT LEASE
Extent Covers all fruits Generally covers KINDS:
and uses as a only a particular or 1. As to Origin
rule specific use a. Legal – created by law such as usufruct of
Nature Always a real A real right only if, parents over the properties of their
right as in the case of a children
lease over real b. Voluntary or conventional
property, the lease i. Created by will of the parties inter
is registered, or is vivos
for more than 1 ii. Created mortis causa
year, otherwise, it c. Mixed – partly created by law and partly
is only a personal by will
2.
d. Prescriptive – is one acquired by a third Us
person through continuous use of the ufruct CANNOT be constituted on an object
usufruct for the period required by law subject to Pledge
3. Usufruct can be constituted on an object
2. As to quantity or extent subjected previously to a Lease.
4. Usufructuary can lease out the property to
a. As to fruits
other parties
i. Total
5. Usufructuary can construct improvements
ii. Partial
over property subject to usufruct
b. As to extent
i. Universal – if over the entire
3. HOW CONSTITUTED
patrimony
ii. Particular/Singular - if only individual
How to constitute Usufruct
things are included
1. Legal Usufruct – but is not evident in today’s
laws
3. As to the number of persons enjoying
2. Act Inter Vivos
the right
3. By Prescription
a. Simple – if only one usufructuary enjoys
the right
4. RIGHTS OF USUFRUCTUARY
b. Multiple – if several usufructuaries enjoy
a. Fruits
the right
b. Possession and enjoyments
i. Simultaneous – at the same time
ii. Successive – one after the other
Right to civil, natural & industrial fruits of
property (jus fruendi and jus utendi)
BUT, in this case, if the usufruct is created by
a. Civil Fruits accrue daily
donation, all the donees must be alive, or at least
I. Belong to the usufructuary in
already conceived, at the time of the perfection
proportion in proportion to the time the
of the donation.
usufruct may last
II. Both stock dividends and cash
4. As to the quality or kind of objects dividends are considered civil fruits
involved b. Industrial and Natural Fruits
a. Usufruct over rights – rights must not be I. Fruits pending at the beginning of
personal or intransmissible in character, the usufruct
so present or future support cannot be an • Belong to the usufructuary
object of usufruct
• No necessity of refunding the
b. Usufruct over things
owner for expenses incurred, (for the
i. Normal (or perfect or regular) – this
owner gave the usufruct evidently
involves non-consumable things
without any thought of being
where the form and substance are
reimbursed for the pending fruits, or
preserved
because the value of said fruits must
ii. Abnormal (or imperfect or irregular) –
have already been taken into
involves consumable things
consideration in fixing the terms and
conditions of the usufruct, if for
5. As to terms or conditions
instance, the usufruct came about
a. Pure – no term or condition
because of contract)
b. With a term or period
• BUT without prejudice to the right
i. Ex die – from a certaign day
of 3rd persons. (Thus, if the fruits had
ii. In diem – up to a certain day
been planted by a possessor in good
iii. Ex die in diem – from a certain day up
faith, the pending crop expenses and
to a certain day
charges shall be pro-rated between
c. With a condition
said possessor and the usufructuary)
i. Suspensive
II. Fruits pending at the termination
ii. Resolutory
of usufruct
2. APPLICATION TO PERSONAL AND REAL • Belong to the owner
PROPERTIES • BUT the owner must reimburse the
usufructuary for ordinary cultivation
Some rules regarding Usufruct: expenses and for seeds and similar
1. Usufruct can be constituted even if the object expenses, from the proceeds of the
is subject to Mortgage fruits. (Hence, the excess of expenses
aa
over the proceeds need not be Ri
reimbursed) ght of usufructuary of woodland –
ordinary cutting as owner does habitually or
c. Lease of Property custom of place; cannot cut down trees
unless it is for the restoration of improvement
Right to lease the property of things in usufruct – must notify owner first
General Rule: The lease expires at the end of aa Right to leave dead, uprooted trees
the usufruct or earlier at the disposal of owner with right to
Exception: In the case of leases of rural lands demand that owner should clear and remove
which continues for the remainder of the them – if caused by calamity or extraordinary
agricultural year;. event – impossible to replace them
If the usufruct should expire before the aa Right to oblige owner to give
termination of the lease, he or his heirs and authority and furnish him proofs if
successors shall receive only the proportionate usufruct is extended to recover real property
share of the rent that must be paid by the or real right
lessees. (Art 568) If the naked owner allows the
lease to continue even after the expiration of the a aa Right to introduce useful and
usufruct, he will be entitled to the rentals luxurious expenses but with no
pertaining to such extension. obligation of reimbursement on part of
owner; may remove improvement if can be
d. Sale/Alienation of Usufructuary done without damage
rights
aaa Right to set-off improvements against
Right to transfer usufructuary rights – damages he made against the property
gratuitous or onerous; but is co-terminus with
term of usufruct; but cannot do acts of ownership a a a Right to administer when property is co-
such as alienation or conveyance except when owned; if co-ownership cease – usufruct of
property is: part allotted to co-owner belongs to
a. Consumable usufructuary – not affected
b. Intended for sale
c. Appraised when delivered; if not aaa Right to demand the increase in value of
appraised and consumable – return same property if owner did not spend for
quality (mutuum) extraordinary repairs; when urgent and
necessary for preservation of thing
OTHER RIGHTS OF THE USUFRUCTUARY:
aa Right to hidden treasure as stranger 5. OBLIGATIONS OF THE USUFRUCTUARY
• Pay expenses to 3rd persons for
aa Right not exempt from execution and cultivation and production at beginning
can be sold at public auction by owner of usufruct; those who have right to fruits
should reimburse expenses incurred
a a Naked owner still have rights but w/o • Generally, usufructuary has no liability
prejudice to usufructuary; may still when due to wear and tear, thing
exercise act of ownership – bring action to deteriorates, obliged to return in that
preserve ownership state; except when there is fraud or
negligence, then he shall be liable
aa Right to necessary expenses from
cultivation at end of usufruct a. Before the Usufruct commences
aa Right to enjoy accessions and Before entering into Usufructuary:

servitudes in its favor and all benefits a. Notice of inventory of property
inherent therein (appraisal of movables and description)
aa Right to make use of dead trunks of b. Posting of security
fruit bearing trees and shrubs or those i. Not applicable to parents who are
uprooted/cut by accident but obliged to usufructuary of children except when 2nd
plant anew marriage contracted
ii. Caucion Juratoria – promise under
oath to deliver:
A. Furniture necessary for the use of the OTHER OBLIGATIONS OF THE
usufructuary USUFRUCTUARY
B. House included in the usufruct 1. Obliged to notify owner of act of 3 rd
C. Implements, tools and other movable person prejudicial to rights of ownership
property necessary for an industry or – he is liable if he does not do so for damages
vocation for which he is engaged – as if it was caused through his own fault
iii. Excused – allowed by owner, not
required by law or no one will be injured 2. If usufruct is constituted on animals –
duty bound to replace dead animals that
Failure to give security, owner may demand die from natural causes or became prey;
that: if all of them perish w/o fault but due to
A. Immovables be placed under administration contagious disease / uncommon event –
B. Negotiable instruments can be converted into deliver remains saved; if perish in part due to
registered certificates or deposited in bank accident – continue on remaining portion; if
C. Capital and proceeds of sale of movables be on sterile animals – as if fungible – replace
invested in safe securities same kind & quality
D. Interest on proceeds or property under
administration belong to usufructuary RIGHTS OF THE NAKED OWNER
E. Owner may retain property as administrator 1. Alienate thing
w/ obligation to deliver fruits to usufructuary 2. Cannot alter form or substance
until he gives sufficient security 3. Cannot do anything prejudicial to
F. Effect of security is retroactive to day he is usufructuary
entitled to fruits 4. Construct any works and make any
b. During the Usufruct improvement provided it does not diminish
value or usufruct or prejudice right of
i. Alteration of form and substance usufructuary
ii. Exercise of diligence OBLIGATIONS OF THE NAKED OWNER

1. Extraordinary expenses; usufructuary obliged
Obligation to exercise diligence: to inform owner when urgent and there is the
1. Take care of property as a good father of need to make them
family 2. Expenses after renunciation of usufruct
2. Liable for negligence and fault of person who 3. Taxes and expenses imposed directly on
substitute him capital
4. If property is mortgaged, usufructuary has no
iii. Repairs obligation to pay mortgage; if attached,
owner to be liable for whatever is lost by
Obligation to make ordinary repairs – wear usufructuary
and tear due to natural use of thing and are 5. If property is expropriated for public use –
indispensable for preservation; owner may make owner obliged to either replace it or pay legal
them at expense of usufructuary – during interest to usufructuary of net proceeds of
existence of usufruct the same
iv. Charges and Taxes 6. TERMINATION OF USUFRUCT
Obligation to charges and taxes: Extinguishment of Usufruct: (PLDTERM)

A. Obliged to make expenses due to his fault; 1. Prescription – use by 3rd person
cannot escape by renouncing usufruct 2. Termination of right of person constituting
B. Pay legal interest from extraordinary usufruct
expenses made by owner 3. Total loss of thing
C. Payment of expenses, charges and taxes
4. Death of usufructuary – unless contrary
affecting fruits
intention appears
D. Payment of interest on amount paid by owner
5. Expiration of period of usufruct
charges on capital
E. Expenses, cost and liabilities in suits brought 6. Renunciation of usufructuary – express
with regard to usufructuary – borne by 7. Merger of usufruct and ownership
usufructuary
• Loss in part – remaining part shall
v. Insurance continue to be held in usufruct
called the dominant estate; that which is
• Usufruct cannot be constituted in subject thereto, the servient estate.
favor of a town, corporation or association for
more than 50 years 1. KINDS
a) According to purpose of easement or
• Usufruct constituted on the nature of limitation
immovable whereby a building is erected – a. Positive – one which imposes upon the
and building is destroyed – right to make use servient estate the obligation of allowing
of land and materials something to be done or of doing it
himself
• If owner wishes to construct a new b. Negative – that which prohibits the
building – pay usufructuary the value of owner of the servient estate from doing
interest of land and materials something which he could lawfully do if
the easement did not exist
• Both share in insurance if both
b) According to party given the benefit
pay premium; if owner only – then proceeds
a. Real (or predial) – for the benefit of
will go to owner only
another belonging to a different owner
(e.g. easement of water where lower
• Effect of bad use of the thing –
estates are obliged to allow water
owner may demand the delivery of and naturally descending from upper estates
administration of the thing with responsibility to flow into them)
to deliver net fruits to usufructuary at b. Personal – for the benefit of one or more
termination of usufruct persons or community (e.g. easement of
right of way for passage of livestock)
• Thing to be delivered to owner
with right of retention for taxes and c) According to the manner they are
extraordinary expenses w/c should be exercised
reimbursed, security of mortgage shall be i. Continuous – their use is incessant or may
cancelled be incessant
a. for legal purposes for acquisitive
================================ prescription, the easement of
TOPICS UNDER THE SYLLABUS aqueduct is considered continuous;
easement of light and view is also
I. EASEMENTS continuous
1. Kinds of Easements ii. Discontinuous – used at intervals and
2. Rights and Obligations depend upon
3. Modes of Extinguishment the acts of man
4. Legal Easements Ex. right of way because it can only
a. Public be used if a man passes
b. Private
d) According to whether or not their
i. Waters existence is indicated
ii. Right of Way i. Apparent – make known and continually
iii. Party Wall kept in view
iv. Light and View by external signs that reveal the use and
v. Drainage of Building enjoyment of
vi. Intermediate Distances the same
Ex. right of way when there is an
vii. Against Nuisance alley or a permanent path
viii. Lateral and Subjacent ii. Non-apparent – they show no external
Support indication of
================================ their existence
Ex. easement of not building to more
EASEMENT is an encumbrance imposed upon an than certain height
immovable for the benefit of another immovable
belonging to a different owner. The immovable DOCTRINE OF APPARENT SIGN - Easements
in favor of which the easement is established is are inseparable from the estate to which they
actively or passively pertain. The existence of
2.
the apparent sign under Art. 624 is equivalent to M
a title. It is as if there is an implied contract ake any works necessary for the use and
between the two new owners that the easement preservation of the servitude; subject to the
should be constituted, since no one objected to following conditions:
the continued existence of the windows. Amor A. The works shall be at his expense, are
v. Florentino, 74 Phil 404 (1951) necessary for the use and preservation of
the servitude;
e) According to right given B. They do not alter or render the servitude
i. Right to partially use the servient more burdensome;
estate C. The dominant owner, before making the
Ex. right of way works, must notify the servient owner;
ii. Right to get specific materials or and
objects from the servient estate D. They shall be done at the most
iii. Right to participate in ownership convenient time and manner so as to
Ex. easement of party wall cause the least inconvenience to the
iv. Right to impede or prevent the servient owner
neighboring estate from performing a 3. Renounce the easement if he desires to
specific act of ownership exempt himself from contribution to
necessary expenses
f) According to source or origin and 4. Ask for mandatory injunction to prevent
establishment of easement impairment of his use of the easement
a. Voluntary – constituted by will or
agreement of the parties or by a testator b) Obligations Of The Dominant Owner
b. Mixed – created partly by agreement and 1. Notify the servient owner of works necessary
partly by law for the use and preservation of the servitude
c. Legal – constituted by law for public use 2. Contribute to the necessary expenses if there
or for private interest are several dominant estates in proportion to
the benefits derived from the works
How established: 3. Cannot alter or impose added burden on the
1. By law (Legal) easement
2. By the will of the owners (Voluntary) 4. Choose the most convenient time and
3. Through prescription (only for continuous and manner in making the necessary works as to
apparent easements) cause the least inconvenience to the servient
owner
• Resultantly, when the court says that an
c) Rights Of The Servient Owner
easement exists, it is not creating one. For,
1. Retain ownership of the portion on which the
even an injunction cannot be used to create
easement is established, and may use it in
one as there is no such thing as a judicial
such a manner as not to affect the exercise
easement. The court merely declares the
of the easement
existence of an easement created by the
2. Change the place or manner of the use of the
parties. La Vista Association v. CA, 278
easement, provided it be equally convenient
SCRA 498 (1997)
3. Use the property subject of the easement,
unless there is an agreement to the contrary
Essential qualities of easements:
aa Incorporeal
d) Obligations Of The Servient Owner
aa Imposed upon corporeal property
1. Contribute to the necessary expenses in case
aa Confer no right to a participation in the
he uses the easement, unless there is an
profits arising from it
agreement to the contrary
a a Imposed for the benefit of corporeal property 2. Not to impair the use of the easement
aa Has 2 distinct tenements – dominant
and servient estate 3. MODES OF EXTINGUISHMENT
aa Cause must be perpetual
How extinguished:
2. RIGHTS AND OBLIGATIONS 1. Merger in the same person of the ownership
of the dominant and servient estates;
a) Rights Of Dominant Owner 2. Non-user for 10 years
1. Exercise all rights necessary for the use of α. If discontinuous easements  period
the easement
computed from the day it was ceased to
be used
•
β. If continuous  period from the day on Co
which an act contrary to the same took mpulsory easements for drawing of water
place and for watering animals can be imposed for
3. Expiration of the term or fulfillment of the reasons of public use in favor of a town or
condition (if temporary or conditional) village, after payment of the proper
4. Renunciation of the owner of the dominant indemnity
estate • Use of any water by anyone can be
5. Redemption agreed upon between owners of disposed by having the water flow through
the dominant and servient estates the intervening estates but is obliged to do
6. When either or both estates fall into a the following:
condition that the easement cannot be used; 1. Prove that he can dispose of the water
revived if subsequent condition should again and that it is sufficient for the use
permit its use, unless sufficient time for intended
prescription has elapsed 2. Show that the proposed right of way is
the most convenient and least onerous to
4.LEGAL EASEMENTS 3rd persons
3. Indemnify the owner of the servient
LEGAL EASEMENTS are those imposed by law estate
having for their object either public use or the • Easement of aqueduct is continuous and
interest of private persons. They shall be apparent even though the flow of water may
governed by the special laws and regulations not be continuous
relating thereto, and in the absence thereof, by
the Civil Code. b) Easement Of Right Of Way
• Right granted to a person or class of persons
Kinds Of Legal Easements: to pass over the land of another by using a
1. Public – for public or communal use particular pathway therein, to reach the
2. Private – for the interest of private former’s estates, which have no adequate
persons/private use, including those relating outlet to a public highway, subject, however
to: (WRPL-DIAL) to payment of indemnity to the owner of the
a. Waters servient estate
b. Right of Way
c. Party Wall Requisites: (LIPO NA)
d. Light and View 1. Claimant must be an owner of enclosed
e. Drainage of Building immovable or one w/ real right
f. Intermediate Distances 2. No adequate outlet to public highway
g. Against Nuisance 3. Right of way is absolutely necessary
h. Lateral and Subjacent Support 4. Least prejudicial
5. Isolation not due to claimant’s own act
a) Easement Relating To Waters 6. Proper indemnity
• Lower estates are obliged to receive the a. Not compulsory if the isolation of the
waters which naturally and without the immovable is due to the proprietor’s own
intervention of man descend from the higher acts
estates, as well as stones or earth which they b. Right of Way is granted without
carry with them indemnity if land was acquired by and is
• Cannot construct works which will impede surrounded by the other estates of the
the easement; neither can the owner of the vendor, exchanger or co-owner through:
higher estate make works which will increase i. Sale
the burden ii. Exchange
• Banks of rivers and streams, although of iii. Partition
private ownership, are subject throughout
their entire length and within a zone of 3 • Burden of proof of proving the requisites
meters along their margins, to the easement on the owner of the dominant estate
of public use in the general interest of
navigation, floatage, fishing and salvage EXTINGUISHMENT: Legal or compulsory
• Estates adjoining the banks of navigable right of way
and floatable rivers are, subject to the • When the dominant estate is joined to
easement of towpath, for the exclusive another estate (such as when the dominant
service of river navigation and floatage owner bought an adjacent estate) which is
2.
abutting a public road, the access being Di
adequate and convenient viding wall is on one side straight and plumb
• When a new road is opened giving access on all its facement, and on the other, it has
similar conditions on the upper part but the
to the isolated estate
lower part slants or projects outward
• In both cases: must substantially meet
3. Entire wall is built within the boundaries of
the needs of the dominant estate.
one of the estates
Otherwise, the easement may not be
4. The dividing wall bears the burden of the
extinguished.
binding beams, floors and roof frame of one
of the buildings, but not those of the others
• Extinguishment NOT ipso facto 5. The dividing wall between courtyards,
gardens and tenements is constructed in
• If extinguished, must return the amount such a way that the coping sheds the water
received as indemnity to the dominant owner upon only one of the estates
without any interest. Interest shall be 6. The dividing wall, being built by masonry, has
deemed in payment for the rent. stepping stones, which at certain intervals
project from the surface of one side only, but
• The only servitude w/c a private owner is not on the other
required to recognize in favor of the 7. The lands enclosed by fences or live hedges
government is the easement of a public adjoin others which are not enclosed
highway, way, private way established by
law, or any government canal or lateral that In all these cases, the ownership is deemed to
has been pre-existing at the time of the belong exclusively to the owner of the property
registration of the land. If the easement is which has in its favor the presumption based on
NOT PRE-EXISTING and is sought to be any of these signs.
imposed only AFTER the land has been
registered under the Land Registration Act, d) Easement Of Light And View
proper expropriation proceedings should be • Period of prescription for the acquisition shall
had, and just compensation paid to the be counted:
registered owner. Eslaban v. Vda. De 1. From the time of opening of the window,
Onorio, G.R. No. 146062 (2001) if through a party wall
2. From the time of the formal prohibition
• Easement of right of way is DISCONTINUOUS. upon the proprietor of the adjoining land,
It may be exercised only if a person passes or if window is through a wall on the
sets foot on somebody else’s land. An dominant estate
easement of right of way of railroad tracks is
discontinuous because the right is exercised 4. VOLUNTARY EASEMENTS are those which
only if and when a train operation by a may be established by the owner of a tenement
person passes over another’s property. of piece of land as he may deem suitable, and in
Bomedco v. Valdez, G.R. No. 124669 the manner and form which he may deem best,
(2003) provided that he does not contravene the laws,
public policy or public order.
c) Easement Of A Party Wall
• A wall erected on the line between two
================================
adjoining properties belonging to different
persons, for the use of both estates. TOPICS UNDER THE SYLLABUS
• Presumed, unless there is a title, or exterior J. Modes of Acquiring Ownership
sign, or proof to the contrary: 1. Mode v. Title
1. In dividing walls of adjoining buildings up 2. Original/Derivative Modes
to the point of common elevation K. Occupation
2. In dividing walls of gardens or yards L. Intellectual Creation
situated in cities, towns, or in rural M. Donation
communities
3. In fences, walls and live hedges dividing
1. Essential Elements
rural lands 2. Kinds
3. Conditional Donations
Exterior signs rebutting presumption: a. Effect of Impossible/Illegal
1. There is a window or opening in the dividing Conditions
wall of buildings
4. Inter Vivos/Mortis Causa Derivative Mode – there was a preceding
Donations owner
5. Form
Modes Of Extinguising Ownership:
a. Onerous Donations 1. Absolute – all persons are affected
6. Capacity a. Physical loss or destruction
a. Of Donor b. Legal loss or destruction (when it
b. Of Donee goes out of the commerce of man)
7. Revocation 2. Relative – only for certain persons for
a. Birth, Survival or Adoption others may acquire their ownership
b. Ingratitude a. Law
b. Succession
c. Non-fulfillment of Condition
c. Tradition as a consequence of
d. Innoficiousness certain contracts
N. OTHER MODES OF ACQUIRING d. Donation
OWNERSHIP e. Abandonment
1. Law f. Destruction of the prior title or
2. Prescription right (like expropriation, rescission,
O. NUISANCE annulment, fulfillment of a resolutory
condition)
================================ g. Prescription
MODES OF ACQUIRING OWNERSHIP:
(OLDTIPS) OCCUPATION is the acquisition of ownership by
1. Occupation seizing corporeal things w/c have no
2. Law owner, made with the intention of
3. Donation acquiring them, and accomplished
4. Tradition according to legal rules
5. Intellectual Creation
6. Prescription
Requisites:
7. Succession
1. Seizure or apprehension
1. MODE V. TITLE • The holding of the material is not
required as long as there is right of
Difference between Mode and Title disposition
2. Property must be corporeal personal property
MODE is the process of acquiring or transferring 3. Property must be susceptible of appropriation
ownership a. Abandoned
property – res derelicata, a thing is
TITLE is the juridical act, right or condition which considered abandoned when:
gives the juridical justification for a mode or i. The
means to their acquisition but which in itself is spes recuperandi (expectation to
insufficient to produce them recover) is gone
ii. The
Mode Title animo revertendi (intention to return
Directly and Serves merely to or to have it returned) has been given
immediately give the occasion for up by the owner
produces a real right its acquisition or b. Unowned
existence property – res nullius
4. Without an owner
The cause The means
5. Intent to appropriate
Proximate cause Remote cause
6. Compliance with the requisites or conditions
Essence of the right Means whereby that
of the law
which is to be essence is
• Abandonment requires (1) a clear and
created or transmitted
absolute intention to renounce a right or a
transmitted
claim or to abandon a right or property; and
(2) an external act by which that intention is
2. ORIGINAL/DERIVATIVE MODES
expressed or carried into effect. The intention
to abandon implies a departure, with the
Original Mode – independent of any pre-
avowed intent of never returning, resuming
existing or preceding title or right of another
or claiming the right and the interest that
have been abandoned. Castellano v. d. If finder retains the thing found – he may
Francisco, [G.R. No. 155640, May 7, be charged with theft
2008] e. If owner is unknown, give to mayor;
mayor shall announce finding of the
Things Susceptible to Occupation movable for 2 weeks in a way he deems
1. Things w/c has no owner – res nullius; best
abandoned f. If owner does not appear 6 months after
2. Stolen property cannot be subject of publication, thing found shall be awarded
occupation to the finder
3. Animals that are the object of hunting and g. If owner appears, he is obliged to pay the
fishing finder 1/10 of value of property as price
h. If movable is perishable or cannot be kept
NOTE: Hunting and fishing are regulated by w/o deterioration or w/o expenses it shall
special laws: Act 2590; Fisheries Act 4003 as be sold at public auction 8 days after the
amended by CA 116, CA 147 and RA 659; Act publication
1499 as amended by Act 1685; PD 534;
Municipal ordinances. Ownership of a piece of land cannot be
acquired by occupation
Kinds Of Animals • Because when a land is without an owner, it
a. Wild – considered res nullius when not yet pertains to the State
captured; when captured and escaped – • Land that does not belong to anyone is
becomes res nullius again presumed to be public land
b. Domesticated animals – originally wild but • But when a property is private and it is
have been captured and tamed; now belong abandoned it can be object of occupation
to their capturer; has habit of returning to
premises of owner; becomes res nullius if
J. INTELLECTUAL CREATION
they lose that habit of returning and regain
their original state of freedom
c. Domestic/tamed animals – born and • By Article 722 and Decree Intellectual
ordinarily raised under the care of people; Property (P.D. 49), the author, composer,
become res nullius when abandoned by artist, or scientist can be considered as the
owner owner of the creation or product even if it has
not been copyrighted or patented. (Jurado)
• Hidden treasure (only when found on • Letters and other private communications in
things not belonging to anyone) writing are owned by the person to whom
• Abandoned movables they are addressed and delivered, but they
cannot be published or disseminated without
the consent of the writer or his heirs EXCEPT
Animals
when the court so authorize if the public good
1. Swarm of bees
or the interest of justice so requires.
- owner shall have right to pursue
them to another’s land (owner to identify
latter for damages, if any) K. DONATION
- land owner shall occupy/retain the
bees if after 2 days, owner did not pursue DONATION is an act of liberality whereby a
the bees person disposes gratuitously of a thing or right in
2. Domesticated animals favor of another, who accepts it
- may be redeemed within 20 days
from occupation of another person; if no 1. ESSENTIAL ELEMENTS
redemption is made, they shall pertain to
the one who caught them Characteristics
3. Pigeons and fish 1. Unilateral – obligation imposed on the donor
- when they go to another breeding 2. Consensual – perfected at time donor knows
place, they shall be owned by the new of acceptance
owner provided they are not enticed
Requisites: (CIDA)
Movables: a a The donor must have capacity to make the
1. Treasure found on another’s property donation of a thing or right
2. Movable found w/c is not treasure:
c. Must be returned to owner
aa
Donative intent (animus donandi) or intent to reasons provided for
make the donation out of liberality to benefit by law (except
the donee onerous donations)
a a Delivery, whether actual or constructive of
the thing or right donated b) As to Consideration
a a donee must accept or consent to donation 1. Simple – the cause of which is the pure
• The donation is perfected once the liberality of the donor in consideration of
acceptance of the donation was made known the donee’s merits
to the donor. Accordingly, ownership will 2. Remuneratory or compensatory – it is
only revert to the donor if the resolutory given out of gratitude on account of the
condition is not fulfilled. Quijada v. CA, 299 services rendered by the donee to the
SCRA 695 (1998) donor, provided they do not constitute a
demandable debt.
Requirements of a Donation: 3. Modal – imposes upon the donee a
1. Subject matter – anything of value; burden less than the value of the gift
present and not future property, must 4. Onerous – the value of which is
not impair legitime considered the equivalent of the
2. Cause – anything to support a consideration for which it is given and
consideration, generosity, charity, thus governed by the rules of obligations
goodwill, past service, debt and contracts
3. Capacity to donate, dispose and accept
donation c) As to Effectivity of Extinguishment
4. Form – depends on value of donation 1. Pure – not subject to any condition
(uncertain event) or period
2. KINDS 2. Conditional – subject to suspensive or
resolutory condition
a) As to Effectivity 3. With a Term – subject to a period,
1. Inter vivos – takes effect during the suspensive or resolutory
lifetime of the donor 3. CONDITIONAL DONATIONS
2. Mortis Causa – takes effect upon the
death of the donor α. Effect of Impossible/Illegal
3. Propter Nuptias – made by reason of Conditions
marriage and before its celebration, in
consideration of the same and in favor of Conditional – subject to suspensive or
one or both of the future spouses. resolutory condition
DONATION INTER DONATION MORTIS 4. INTER VIVOS/MORTIS CAUSA

VIVOS CAUSA DONATIONS
Disposition and Disposition happens
acceptance to take upon the death of Inter vivos – takes effect during the lifetime of
effect during lifetime donor the donor
of donor and donee
Already pertains to Even if there is a term Mortis Causa – takes effect upon the death of
the donee unless of effectivity and the donor
there is a contrary effectivity is upon the
intent death of the donor, still 5. FORM
entitled to fruits a. Onerous Donations
Formalities required - Formalities required -
follow law on follow law on ONEROUS – the value of which is considered the
donations and certain succession to be valid, equivalent of the consideration for which it is
kinds of donations and and donation must be given and thus governed by the rules of
law on obligations and in the form of a will obligations and contracts
contracts (suppletory)
Irrevocable at the Revocable ad mutuum 6. CAPACITY
instance of the donor; (exclusive will of a. Of Donor
may be revoked only donor)
by reasons provided Who may give donations
by law All persons who may contract and dispose of
Revoked only for their property ― donor’s capacity shall be
determined as of the time of the making of the delivery of thing/document & acceptance
donation need not be in writing
above 5,000 - must be written and
b. Of Donee accepted also in writing
• Immovable - must be in a public
Who may accept donations instrument and acceptance must also be
1. Natural and juridical persons not especially in a public instrument (in same
disqualified by law instrument or in other instrument);
2. Minors and other incapacitated otherwise it is void
A. By themselves c. Must be made during the lifetime of the
I. If pure and simple donation donor and donee
II. If it does not require written
acceptance In case of doubt with regard to nature of
B. By guardian, legal representatives if donation: inter vivos
needs written acceptance
I. Natural guardian – not more than Badges of mortis causa:
50,000 2. Title remains with donor (full or naked
II. Court appointed – more than 50,000 ownership) and conveyed only upon
4. Conceived and unborn child, represented by death
person who would have been guardian if 3. Donor can revoke ad mutuum
already born 4. Transfer is void if transferor survives
transferee
Who are disqualified to donate • A donation mortis causa must comply with
1. Guardians and trustees with respect to the formalities of a last will and testament
property entrusted to them otherwise, it would be void and would
2. Husband and wife produce no effect. If the donation is made in
3. Between paramours/persons guilty of such a way that the full and naked ownership
adultery or concubinage at the time of will pass to the donee upon the death of the
donation donor, then it is at that time when the
4. Between parties guilty of same criminal donation will take effect and it is the donation
offense mortis causa which should be embodied in
5. Made to public officers, wife, descendant, the last will and testament. Maglasang v.
ascendant, by reason of his office Cabatingan, [G.R. No. 131953, June 2,
2002]
The prohibition against donations between
spouses must likewise apply to donations SOME RULES ON DETERMINATION WHETHER
between persons living together in illicit MORTIS CAUSA OR INTER VIVOS:
relations. Joaquino v. Reyes, [G.R. No. 1. A donation made “in consideration of love and
154645, July 13, 2003] affection of the donor and the donee” but further
stipulates that “It became effective upon the
Other persons disqualified to receive death of the donor provided that in the event the
donations donee should die before the donor, the present
1. Priest who heard confession of donor during donation shall be deemed automatically
his last illness rescinded and of no force and effect.”  mortis
2. Relatives of priest within 4th degree, church, causa since the right of disposition is not
order or community where priest belongs transferred to donee while donor is still alive.
3. Physician, nurse, etc. who took care of donor Sicad v. CA
during his last illness 5. A donation made stipulating that it will take
4. Individuals, corporations and associations not effect after the death of the donor but further
permitted stipulates that (1) the donor will not dispose
nor take it away from the donee and that (2)
Acceptance the donor is parting with the beneficial
a. Acceptance must be made personally or thru
ownership while he lived  inter vivos
agent
b. Donation may be made orally or in writing:
Donation Of The Same Thing To 2 Or More
• Movable: Different Persons
5,000 and below – may be oral or written, • Rules on double sale will apply
if oral it must be with simultaneous
2.
CLASSIFICATION OF DONATION INTER Fr
VIVOS om the viewpoint of the taking effect
1. From the viewpoint of motive, purpose, • Inter vivos – takes effect
or cause before the death
• In praesenti – to be
PURE/ REMUNERA COND ONEROU delivered in future (also considered inter
SIMPLE TORY ITION S vivos)
AL • Mortis causa
Consider Liberality Valuable Valuable 3. From the viewpoint of occasion
a-tion or merits considera considera • Ordinary donation
Merits of of donee -tion is -tion • Donation propter nuptias
donee or imposed given 4. From the viewpoint of object donated
burden/ but value • Corporeal property
charge of is less A. Donation of real property
past than B. Donation of personal property
services value of • Incorporeal property – donation of
provided thing
inalienable rights
they do donated
not
What may be given
constitute
• All or part of donor’s present property
demanda
ble debt provided he reserves sufficient means for the
support of the ff:
Law to Law on Extent of Law on
a. Himself
apply/ donations burden obligation
b. Relatives who by law are entitled to his
forms s
support
Law on imposed
c. Legitimes shall not be impaired
donations >
ObliCon • when w/o reservation or if inofficious, may be
excess> reduced on petition of persons affected
donation • Exception: conditional donation and
Form of Required Required Required donation mortis causa
accepta • Exception To The Exception: future
nce property (cannot be disposed of at the time
Required of donation)
Reservat Applicabl Applicabl Not
ion e e Applicabl • A donation would not be legally feasible if the
w/regar e donor has neither ownership nor real rights
d to that he can transmit to the donee. Hemedes
personal v. CA, [G.R. No. 107132, October 8,
support 2008]
and
legitime DOUBLE DONATIONS:
Applicabl Rule: Priority in time, priority in right
e 1. If movable – one who first takes possession in
Warrant In bad In bad Applies good faith
y faith only faith only 2. If immovable – one who recorded in registry
against of property in good faith
eviction • No inscription, one who first took
and possession in good faith
hidden • In absence thereof, one who presents
defects oldest title
In bad
faith only 7. REVOCATION
Revocati Applicabl Applicabl Applicabl
on e e e Grounds For Revocation
Applicabl 1. Birth, Adoption, Reappearance of a child
e • Period of 4 years from the time of birth,
adoption or reappearance to revoke the
donation
• Transmissible to the heirs of the donor if in the contract, the court can fix the period.
the donor dies within the 4 year period, in However, it has been 50 years, more than
which case the remaining period shall enough time to comply. The Court refused to
apply to the donor’s heirs fix a period and ruled that the donation can
• Reduction shall be based on the be revoked for failure to comply with
inofficiousness of the donation condition. Central Philippine University v.
2. Non-fulfillment of the conditions CA, 246 SCRA 511
3. Ingratitude
• Cannot be passed to the donor’s heir Action for revocation by reason of
ingratitude
• Period of 1 year from knowledge of the
1. Donee commits offense against person,
act of ingratitude, and it was possible for
honor, property of donor, spouse, children
him to bring the action
under his parental authority
2. Donee imputes to donor any criminal
Grounds For Reduction
offense or any act involving moral
1. Failure of the donor to reserve sufficient
turpitude even if he should prove it
means for support of himself or dependent
unless act/crime has been committed
relatives
against donee himself, spouse or children
2. Failure of donor to reserve sufficient
under his parental authority
property to pay off existing debts
3. Donee unduly refuses to give support to
3. Inofficiousness, that is, the donation
donor when legally or morally bound to
exceeds that which the donor can give by will
give support to donor
4. Birth, appearance or adoption of a child
BIRTH OF NON- INGRTITAUD
AUTOMATIC REVOCATION
CHILD FULFILLMEN E
• In contracts providing for automatic
T OF
revocation, judicial intervention is necessary
CONDITION
not for purposes of obtaining a judicial
Ipso jure Needs court Needs court
declaration rescinding a contract already
revocation, no action action
deemed rescinded by virtue of an agreement
need for
providing for rescission even without judicial
action, court
intervention, but in order to determine
decision is
whether or not the rescission was proper the
merely
stipulation of the parties providing for
declaratory
automatic revocation of the deed of donation,
Extent: Extent: whole Extent: Whole
without prior judicial action for that purpose,
portion which portion but portion
is valid subject to the determination of the
may impair court may returned
propriety of the rescission sought. Where
legitime of rule partial
such propriety is sustained, the decision of
heirs revocation
the court will be merely declaratory of the
only
revocation, but it is not in itself the
revocatory act. Zamboanga Barter Property must Property in Property to be
be returned excess returned
Traders v. Plagata, [G.R. No. 148433]
Alienation/mor Alienations/m Prior ones are
Revocation Of Donations tgages done ortgages void; demand
prior to imposed are value of
• Affects the whole donation
recording in void unless property
• Applies only to donation inter vivos Register of registered when
• Not applicable to onerous donations Deeds: with Register alienated and
• Donor can revoke donation if the donee If already sold of Deeds cannot be
fails to comply with the conditions imposed or cannot be recovered or
by the donor. Prescription: 4 years from the returned – the redeemed
non-compliance with condition. value must be from 3rd
returned persons
• X donated a parcel of land to the University If mortgaged –
on the condition that the latter will establish donor may
a medical college named after X. After 50 redeem the
years, X’s heirs filed annulment for failure to mortgage with
abide by the condition. Can this be revoked? right to
General rule is that if the period is not fixed recover from
donee 6. Effect of declaration as inofficious: the
Fruits to be Fruits to be donation is annulled only as to the
returned at returned at portion diminishing the legitime
filing of action filing of
for revocation complainant • Cause of action arising from the
Prescription of Prescription is Prescription is inofficiousness of donation arises only upon
action is 4 4 years from 1 year from death of the donor, as the value of the
years from non- knowledge of donation will be contrasted with the net value
birth, etc. fulfillment fact and it of the estate of the donor decedent. Eloy
was possible Imperial v. CA,[ G.R. No. 112483 (1999)]
for him to
bring action Checklist For Donation:
Action cannot Action cannot 1. Whether onerous or gratuitous – if onerous,
be renounced be renounced governed by law on contracts
in advance 2. If gratuitous, whether mortis causa or inter
Right of action Right of action Heirs cannot vivos – if mortis causa, governed by law on
transmitted to at instance of file action succession
heirs donor but 3. If inter vivos, whether perfected or not (made
may be known to the donor). If no perfection,
transmitted to donation is void.
heirs 4. If perfected, check for the capacity of the
Action Action does donor to give and the donee to receive. If no
extends to not extend to capacity, donation is void.
donee’s heirs donee’s heirs 5. Compliance with Art 748 (movable) and 749
(immovable) of NCC. Non-compliance,
Exception to rule on intransmissibility of donation is void.
action with regard to revocation due to
ingratitude: ILLEGAL AND IMPOSSIBLE CONDITIONS
1. Personal to the donor; general rule is heir - In Simple/Remunatory donations – shall be
cannot institute if donor did not institute considered as not imposed (Art 727)
2. Heirs can only file in the following cases: - In Onerous/Contract – annuls obligation;
a. Donor has instituted proceedings but dies obligation and conditions are void (Art
before bringing civil action for revocation 1183)
b. Donor already instituted civil action but
died, heirs can substitute N. Other Modes of Acquiring
c. Donee killed donor or his ingratitude Ownership
caused the death of the donor 1. LAW
d. Donor died w/o having known the
ingratitude done Refers to those instances where the law,
e. Criminal action filed but abated by death independently of the other modes of acquiring
3. Can only make heirs of donee liable if ownership, automatically and directly vests the
complaint was already filed when donee died ownership of the thing in a certain individual
once the prescribed requisites or conditions are
Inofficious donations: present or complied with (Jurado).
1. Shall be reduced with regard to the
excess 2. PRESCRIPTION
2. Action to reduce shall be filed by heirs PRESCRIPTION is a mode by which one acquires
who have right to legitime at time of ownership and other real rights thru lapse of
donation time; also a means by which one loses
3. Donees/creditors of deceased donor ownership, rights and actions; retroactive from
cannot ask for reduction of donation the moment period began to run; founded on
4. If there are 2 or more donation: recent grounds of public policy; regarded as a statute of
ones shall be suppressed repose
5. If 2 or more donation at same time –
treated equally and reduction is pro rata Kinds:
but donor may impose preference which 1. Acquisitive
must be expressly stated in donation General Requisites:
A. Capacity to acquire by prescription
B. Thing capable of acquisition by
prescription
C. Possession of thing under certain
conditions
D. Lapse of time provided by law
2. Extinctive – also called as limitation of actions
Morales v CFI, 97 SCRA 872, 1980
Who may acquire by prescription

1. Person who is capable of acquiring property
by other legal modes
2. State
3. Minors – through guardians or personally
Against whom prescription may run

1. Minors and incapacitated person who
have guardians
2. Absentees who have administrators
3. Persons living abroad who have
administrators
4. Juridical persons except the state with
regard to property not patrimonial in
character
5. Between husband and wife
6. Between parents and children (during
minority/insanity)
7. Between guardian and ward (during
guardianship)
8. Between co-heirs/co-owners
9. Between owner of property and
person in possession of property in concept
of holder
•
Prescription does NOT run Re
1. Between husband and wife, even asonable belief that person who transferred
though there be a separation of property the thing is the owner and could validly
agreed upon in the marriage settlements or transmit ownership
by judicial decree • Must exist throughout the entire period
2. Between parents and children, during required for prescription
the minority or insanity of the latter
3. Between guardian and ward during JUST TITLE (TRUE and VALID) – must be
the continuance of the guardianship proved and never presumed; only Titulo
Colorado is required
Things subject to prescription: all things • Titulo Colorado – such title where there was a
within the commerce of men mode of transferring ownership but
1. Private property something is wrong because the grantor is
2. Patrimonial property of the State not the owner
• Titulo putativo - a person believes he has
Things not subject to prescription obtained title but he has not because there
1. Public domain was no mode of acquiring ownership, as
2. Intransmissible rights when one is in possession of a thing in the
3. Movables possessed through a crime mistaken belief that it had been bequeathed
4. Registered land to him. Doliendo v Biarnesa, 7 Phil. 232,
1906
Renunciation of Prescription • Title must be one which would have been
• Persons with capacity to alienate may sufficient to transfer ownership if grantor had
renounce prescription already obtained but been the owner
not the right to prescribe in the future • Through one of the modes of transferring
• May be express or tacit ownership but there is vice/defect in capacity
• Prescription is deemed to have been of grantor to transmit ownership
tacitly renounced; renunciation results from
the acts w/c imply abandonment of right IN CONCEPT OF OWNER
acquired • Possession not by mere tolerance of owner
• Creditors and persons interested in but adverse to that of the owner
making prescription effective may avail it • Claim that he owns the property
themselves notwithstanding express or tacit
renunciation PUBLIC, PEACEFUL & UNINTERRUPTED
• Must be known to the owner of the
PRESCRIPTION OF OWNERSHIP AND OTHER thing
REAL RIGHTS • Acquired and maintained w/o violence
• Uninterrupted (no act of deprivation
Kinds of Acquisitive prescription
by others) in the enjoyment of property
1. Ordinary
a. Possession in good faith
INTERRUPTION
b. Just title
1. Natural
c. Within time fixed by law
A. Through any cause, possession ceases for
i. 4 years for movables
more than 1 year
ii. 8 years for immovables
B. If 1 year of less – as if no interruption
d. In concept of an owner
2. Civil
e. Public, peaceful, uninterrupted
A. Produced by judicial summons; EXCEPT:
i. Void for lack of legal solemnities
2. Extra-ordinary
ii. Plaintiff desists from complaint/allows
a. Just title is proved
proceedings to lapse
b. Within time fixed by law
iii. Possessor is absolved from complaint
i. 10 years for movables
ii. 30 years for immovables • Express or tacit renunciation
1. In concept of an owner • Possession in wartime
2. Public, peaceful, uninterrupted
RULES IN COMPUTATION OF PERIOD
GOOD FAITH • Present possessor may tack his possession to
that of his grantor or predecessor in interest
• 4.
Present possessor presumed to be in continuous O
possession even with intervening time unless bstructs or interferes with the free passage of
contrary is proved any public highway or street, or any body of
• First day excluded, last day included water
5. Hinders or impairs the use of property
TACKING PERIOD
• Lapse of time cannot legalize any nuisance,
• There must be privity between previous and
whether public or private
present possessor
• Possible when there is succession of rights
Kinds of Nuisances According To Number of
• If character of possession different: Persons Affected:
- predecessor in bad faith possessor in 1. Public (or common) nuisance – affects a
good faith – use extraordinary community or neighborhood or considerable
prescription number of persons
2. Private nuisance – affects a an individual or
PRESCRIPTION OF ACTIONS few persons only
PRESCRIPTIV ACTION
E PERIOD Other Classification:
30 yrs 1. action over immovables - 1. Nuisance Per Se – always a nuisance
from time possession is lost because of its nature regardless of location or
10 yrs 1. m surroundings
ortgage action 2. Nuisance Per Accidens – nuisance by
2. action upon written contract reason of location, surrounding or in the
3. action upon obligation manner it is conducted or managed.
created by law
4. action upon a judgment DOCTRINE OF ATTRACTIVE NUISANCE:
8 yrs 1. action to recover movables - aa REASON for the doctrine: one who maintains
from time possession is lost on his premises dangerous instrumentalities
6 yrs 1. action upon an oral contract or appliances of a character likely to attract
2. action upon a quasi-contract children in play, and who fails to exercise
4 yrs 1. upon injury to rights of ordinary care to prevent children from
plaintiff playing therewith or resorting thereto, is
2. upon a quasi-delict liable to a child of tender years who is injured
1 yr 1. forcible entry and unlawful thereby, even if the child is technically a
detainer trespasser in the premises. The principal
2. defamation reason for the doctrine is that the condition
5 yrs 1. others where periods are not or appliance in question although its danger
fixed by law is apparent to those of age, is so enticing or
alluring to children of tender years as to
Rights not extinguished by prescription: induce them to approach, get on or use it,
1. Demand right of way and this attractiveness is an implied
2. Abate public/private nuisance invitation to such children. Hidalgo
3. Declare contract void Enterprises, Inc. v. Balandan, 91 Phil.
4. Recover property subject to expressed trust 488 (1952)
5. Probate of a will aa Application to bodies of water – generally not
6. Quiet title applicable to bodies of water, artificial as well
as natural in the absence of some unusual
O. NUISANCE condition or artificial feature other than the
mere water and its location.
NUISANCE is any act, omission, establishment,
business, condition of property, or anything else Remedies against a public nuisance:
which: aa Prosecution under the Penal Code or any
1. Injures or endangers the health or safety of local ordinance
others aa Civil action
2. Annoys or offends the senses aa Extra-judicial abatement
3. Shocks, defies or disregards decency or • All remedies may be simultaneously pursued
morality to remove a nuisance
Requirements for abatement of a
public/private nuisance by a private person:
1. Demand has been made
2. Demand has been rejected
3. Abatement be approved by the district health
officer and executed with the assistance of
the local police
4. Value of the destruction does not exceed
P3000
5. If public nuisance, it must be specially
injurious to him
A private person or a public official extra-

judicially abating a nuisance shall be liable
for damages:
aa If he causes unnecessary injury
aa If an alleged nuisance is later declared by the
courts to be not a real nuisance
Remedies against a private nuisance:

aa Civil action
aa Abatement, without judicial proceedings
NOTE:
1. No legalization of nuisance, whether private
or public, by prescription
2. Even if nuisance no longer exists, the
aggrieved person may still pursue a civil
action for damages for the injuries suffered
during the existence of nuisance
3. Subsequent owner of the property, having full
knowledge of the existence of the nuisance,
did not remove the nuisance is solidarily
liable for the injuries and damages caused
4. Owner of nuisance property is not entitled to
compensation
5. Civil action against a public nuisance shall be
commenced by the mayor of the locality
6. A private person may commence a civil
action to eliminate a public nuisance only if
he suffered a particular harm or injury which
is different from the harm or damage
suffered by the general public by reason
thereof
OBLIGATIONS =========================================
A. GENERAL PROVISIONS
2. ELEMENTS OF AN OBLIGATION
================================
1. Definition ELEMENTS OF AN OBLIGATION: ARTS. 1156
2. Elements of an Obligation – 1162 (PAVO)
3. Different Kinds of Prestation
4. Classification of Obligations A. PASSIVE SUBJECT (obligor/debtor): one who
5. Sources of Obligations has the duty of giving, doing or not doing;
A. Art. 1157 person bound to the fulfillment
B. Natural obligations B. ACTIVE SUBJECT (obligee/creditor): one in
C. Extra-contractual obligations whose favor the obligation is constituted; person
entitled to demand
========================================= C. VINCULUM JURIS/ LEGAL TIE: the efficient

TOPICS UNDER THE SYLLABUS cause or the juridical tie between two subjects
by reason of which the debtor is bound in favor
A. GENERAL PROVISIONS of the creditor to perform the obligation. It can
be established by various sources of obligations
(law, contract, quasi-contracts, delicts, and
1. Definition quasi-delicts) and may arise either from bilateral
or unilateral acts of persons.
=========================================
D. OBJECT/ SUBJECT MATTER: the prestation
or conduct which has to be observed by the
debtor/obligor. It is not a thing but a particular
1. DEFINITION conduct of the debtor.
REQUISITES OF A VALID PRESTATION:
OBLIGATION: a. Licit
1. A juridical necessity to give, to do or not to b. Possible

do. (Art. 1156)
c. Determinate/ Determinable
2. It is a “legal bond whereby constraint is laid
upon a person or group of persons to act or d. Must have pecuniary value
forbear on behalf of another person or group of
persons.”1
Ang Yu Asuncion vs Court of Appeals [G.R.
No. 109125, December 2, 1994].
========================================= The obligation is constituted upon the

concurrence of the essential elements thereof,
TOPICS UNDER THE SYLLABUS viz.: (a) The vinculum juris or the juridical tie
which is the efficient cause established by the
various sources of obligations (law, contracts,
A. GENERAL PROVISIONS quasi-contracts, delicts and quasi-delicts); (b)
the object which is the prestation or conduct,
2. Elements of an Obligation required to be observed (to give, to do, or not to
do); and (c) subject-persons who, viewed from
1 William F. Elliot, Commentaries on the Law of the demandability of the obligation, are the
Contracts, Volume 1, 1913 edition, Indianapolis, The
Bobbs-Merrill Company, page 6, citing Anson Cont. 5, 23.

active (obligee) and the passive (obligor) b. Natural Obligations – not based on
subjects. positive law but on equity and natural
law, do not grant a right of action to
enforce their performance, but after
voluntary fulfillment by the obligor, they
NOTE: The form in which the obligation is
authorize retention of what has been
manifested is sometimes added as a fifth
delivered or rendered by reason thereof.
element. This element, however, cannot be
considered as essential as there is no particular c. Moral Obligations – those that cannot
form required to make obligations binding, be enforced by action but which are
except in rare cases. binding on the party who makes it in
conscience and natural law.
========================================= B. Viewpoint of Performance
TOPICS UNDER THE SYLLABUS a. Positive Obligation – to give; to do.
A. GENERAL PROVISIONS b. Negative Obligation – not to do.
3. Different Kinds of Prestation

=========================================
C. Viewpoint of Subject Matter
3. DIFFERENT KINDS OF OBLIGATION
a) To give a. Personal Obligation
b) To do
c) Not to do – consists in abstaining from some b. Real Obligation
act, includes “not to give,” both being negative
obligations I. Determinate or Specific
II. Generic
III. Limited Generic
D. Viewpoint of Person Obliged
========================================= α. Unilateral – only one party is bound
TOPICS UNDER THE SYLLABUS β. Bilateral – both parties are bound
4. Classification of Obligations Distinguish a Civil Obligation from Natural

========================================= Obligation
CIVIL OBLIGATION NATURAL

4. CLASSIFICATION OF OBLIGATIONS
OBLIGATION
Art. 1156 Arts. 1423- 1430

A. Viewpoint of Sanction
Based on positive Based on equity and
a. Civil Obligations – give a right of action
law natural justice
to compel their performance
Enforceable by court Cannot be compeled

action by cour action but their correlative rights are governed by
depends exclusively the law by which they are created.
upon the good
conscience of the • It must be expressly or impliedly set
debtor forth and cannot be presumed.
========================================= A.2. CONTRACTS (OBLIGATION EX

CONTRACTU)
• A juridical conventions manifested in
A. GENERAL PROVISIONS legal form, by virtue of which one or
more persons bind themselves in favor
5. Sources of Obligations another, or others, or reciprocally, to the
========================================= fulfillment of a prestation to give, to do,
or not to do. (Sanchez Roman)
5. SOURCES OF OBLIGATION
• Obligations arising from contracts have
the force of law between the
A. ARTICLE 1157. OBLIGATIONS ARISE contracting parties and should be
FROM complied with in good faith. (Art. 1159)
(1) Law;
• The terms of the contracts determine the
(2) Contracts; respective obligations of the parties.
(3) Quasi-contracts; • If the terms of the contract are clear and

leave no doubt upon the contracting
(4) Acts or omissions punished by law; and parties’ intention, such terms should be
applied in their literal meaning.
(5) Quasi-delicts
• Neither party may unilaterally evade his
obligation in the contract, unless the
contract authorizes it or the other party
NOTE: The list is exclusive (Sagrado Orden v.
assents.
Nacoco, [G.R. No. L-37756, June 30, 1952]).
However, some writers expressly recognize that
• Parties may freely enter into any
a UNILATERAL PROMISE can give rise to
stipulations provided they are not
obligations (Tolentino, Volume IV, p. 62).
contrary to law, morals, good customs,
public order or public policy.
A.1. LAW (OBLIGATION EX LEGE)

A.3. QUASI-CONTRACTS (Obligation Ex
• The law cannot exist as a source of
Quasi-Contractu)
obligations, unless the acts to which its • Juridical relations resulting from lawful,
principles may be applied exist.
voluntary and unilateral acts, which has
for its purpose, the payment of
• Once the acts or facts exist, the
indemnity to the end that no one shall be
obligations arising therefrom by virtue of
unjustly enriched or benefited at the
the express provisions of the law are
expense of another.
entirely independent of the agreement of
the parties. And such obligations and

• Distinguished from other Sources himself of it in a distinct civil action or in
(LUV) cases where an independent civil action is
allowed by law.
a. The act giving rise to a quasi-contract
must be LAWFUL distinguishing it from
delict; GOVERNING RULES:
1. Articles 100-113 of the RPC and other penal
b. The act must be VOLUNTARY laws subject to Art 2177 Civil Code (quasi-
delict);
distinguishing it from a quasi-delict
2. Chapter 2, Preliminary title, on Human
which is based on fault or negligence; Relations ( Civil Code )
3. Title 18 of Book IV of the Civil Code on
c. The act must be UNILATERAL damages
distinguishing it from contract which is
based on agreement. (Tolentino, Volume
IV, p. 68) SCOPE OF CIVIL LIABILITY
1. Restitution
KINDS OF QUASI-CONTRACT 2. Reparation for damage caused
a. Negotiorum Gestio: is the voluntary 3. Indemnity for Consequential damages

management of the property or affairs of
another without the knowledge or consent of
the latter. (Art. 2144)
EFFECT OF ACQUITTAL IN CRIMINAL CASE
b. Solutio indebiti: is the juridical relation,
GENERAL RULE: The acquittal of the accused
which is created when something is received
in the criminal case does not prejudice the civil
when there is no right to demand it and it
action, in which the offended party may still be
was unduly delivered through mistake. (Art.
able to recover damages by a preponderance of
2145) The requisites are:
evidence.
c. There is no right to receive the thing
delivered;
EXCEPTION: Where the judgment of acquittal
d. The thing was delivered through mistake.
contained a declaration that no negligence can
e. Other cases (Art. 2164-2175) be attributed to the accused and that the fact
from which the civil action might arise did not
exist
A.4. DELICTS (OBLIGATION EX MALEFICIO
OR EX DELICTO)
• Article 100 of the Revised Penal Code –
Every person criminally liable for a felony is CRIMES WITHOUT CIVIL LIABILITY
also civilly liable.
1. Contempt
• The civil liability springs out and is
2. Insults to persons in authority
dependent upon the facts which, if true,
would constitute a crime. 3. Gambling
• Such civil liability is a necessary 4. Violations of traffic regulations (De

consequence of criminal responsibility, and Leon, 2003 ed.,p. 23)
is to be declared and generally enforced in
the criminal proceeding except where the
injured party reserves his right to avail

EXTINGUISHMENT OF LIABILITY: The civil c. An injury to the plaintiff through
liability for crimes is extinguished by the same such failure.
causes provided by the Civil Code for the
extinguishment of other obligations. • TEST of NEGLIGENCE: “Would a prudent
man, in the position of the person to whom
A.5. QUASI-DELICT/TORTS (OBLIGATION EX negligence is attributed, foresee harm to the
QUASI-DELICTO/ EX QUASI MALEFICIO) person injured as a reasonable consequence
• It is an act or omission arising from fault
of the course about to be pursued?” Picart
or negligence which causes damage to
v. Smith, [37 Phil. 809]
another, there being no pre-existing
contractual relations between the parties
• ELEMENTS: B. NATURAL OBLIGATIONS (Arts. 1423 –

1430)
1. That there exists a wrongful act or
omission imputable to the defendant by
reason of his fault or negligence;
NATURAL OBLIGATIONS
2. That there exists a damage or injury,
which must be proved by the person 1. They are real obligations to which the
claiming recovery; law denies an action, but which the debtor
may perform voluntarily.
3. That there must be a direct causal
connection or a relation of cause and 2. It is patrimonial, and presupposes a
effect between the fault or negligence prestation.
and the damage or injury; or that the
fault or negligence be the cause of the 3. The binding tie of these obligations is in
damage or injury. the conscience of man, for under the law, they
do not have the necessary efficacy to give rise
to an action.
DISTINCT FROM A CRIME: An injured party or

his heirs has the choice of either:
(a) An action to enforce civil liability arising from EXAMPLES OF NATURAL OBLIGATIONS
crime under Article 100 of the RPC, or ENUMERATED UNDER THE CIVIL CODE:
(b) An action from quasi-delict under Articles 1. Performance after the civil obligation has
2176-2194 of the Civil Code. prescribed
NEGLIGENCE: Failure to observe for the 2. Reimbursement of a third person for a

protection of the interests of another person, debt that has prescribed
that degree of care, precaution and vigilance
which the circumstances justly demand, 3. Restitution by minor after annulment of
whereby such other person suffers injury. US v. contract
Barrias, [23 Phil. 434, (1912)]
4. Delivery by minor of money or fungible
• ELEMENTS OF NEGLIGENCE: (DFI) thing in fulfillment of obligation
a. A duty on the part of the defendant 5. Performance after action to enforce civil
to protect the plaintiff from the obligation has failed
injury of which the latter complains;
6. Payment by heir of debt exceeding value
b. A failure to perform that duty; and of property inherited

7.
Payment of legacy after will have been declared
void.
ELEMENTS (CDLI)
1. Conduct on part of the defendant, or of one

C. EXTRA-CONTRACTUAL OBLIGATIONS under whom he claims, giving rise to the
situation of which complaint is made and for
which the complaint seeks a remedy
2. Delay in asserting the complainant’s

rights, the complainant having knowledge or
notice, of the defendant’s conduct and having
C.1. ESTOPPEL (Arts. 1431 – 1439) been afforded the opportunity to institute a suit
ESTOPPEL - a condition or state by virtue of 3. Lack of knowledge or notice on the part

which an admission or representation is of the defendant that the complainant would
rendered conclusive upon the person making it assert the right on which he bases his suit
and cannot be denied or disproved as against
4. Injury to the defendant in the event relief
the person relying thereon.
is accorded to the complainant, or the suit in not
held to be barred.
KINDS:
1. Estoppel in pais (by conduct) Distinguish Laches from Prescription
a. Estoppel by silence LACHES PRESCRIPTION
b. Estoppel by acceptance of benefits Concerned with effect of Concerned with

delay fact of delay
Question of inequity of Question or

2. Technical Estoppel permitting the claim to be matter of time
enforced
a. Estoppel by deed
Not statutory Statutory
b. Estoppel by record
Applies in equity Applies at law
c. Estoppel by judgment
Not based on a fixed time Based on a fixed
d. Estoppel by laches time
C.2. LACHES OR STALE DEMANDS END OF DISCUSSION ON TOPIC

LACHES – Failure or neglect, for an
unreasonable and unexplained length of time to ================================
do that which, by exercising due diligence, could
or should have been done earlier; it is
B. NATURE AND EFFECT OF
negligence or omission to assert a right within OBLIGATIONS
reasonable time warranting a presumption that ================================
the party entitled to assert it either has TOPICS UNDER THE SYLLABUS
abandoned it or declined to assert it B. NATURE AND EFFECT OF
OBLIGATIONS

1. Obligation to give =========================================
A. A determinate or specific thing
B. An indeterminate or generic
thing Personal Obligations: obligations to do or not
2. Obligation to do or not to do to do; where the subject matter is an act to be
3. Breaches of obligations done or not to be done
A. Complete failure to perform a. Positive – obligation to do

B. Default or Delay (Art. 1169)
B.1. Mora solvendi b. Negative – obligation not to do
B.2. Mora accipiendi
B.3. Compesatio morae
C. Fraud Real Obligations: obligations to give; where
C.1. Waiver of future fraud is void the subject matter is a thing which the obligor
must deliver to the obligee
(Art. 1171)
D. Negligence a. Determinate or specific – object is
D.1. Ordinary Diligence particularly designated or physically
D.2 Exceptions segregated from all other things of the
E. Contravention of the tenor of same class
obligation b. Generic –object is designated by its class
F. Fortuitous Event or genus
4. Remedies of Obligations c. Limited Generic – generic objects

confined to a particular class
A. Specific Performance
A.1. Substituted performance by a a. Ex: An obligation to deliver one
third person on obligation to deliver of my horses (Tolentino, Volume
generic thing and in obligation to do, IV, p. 91; De Leon, 2003 ed., p. 7)
unless a purely personal act
1. OBLIGATION TO GIVE
B. Rescission (resolution in
A. DUTIES OF OBLIGOR IN AN OBLIGATION
reciprocal obligations)
TO GIVE A DETERMINATE THING (Arts.
C. Damages, in any event 1163, 1164, 1166.)
D. Subsidiary remedies of creditors
To preserve or take care of the thing due with
(Art. 1177)
the diligence of a good father of a family
D.1. Accion subrogatoria
D.2. Accion pauliana EXCEPTION: if the law requires or the parties
stipulate another standard of care
D.3. Accion directa (Arts. 1652,
1608, 1729, 1893) B. DUTIES OF OBLIGOR IN AN OBLIGATION
TO GIVE A GENERIC THING (Arts. 1246 AND
1170)
========================================
To deliver the thing of the quality intended
TOPICS UNDER THE SYLLABUS by the parties, taking into consideration the
purpose of the obligation, intent of the parties,
and other circumstances;
OBLIGATIONS To be liable for damages in case of fraud,
negligence, or delay, in the performance of his
1. Obligation to give obligation, or contravention of the tenor thereof.

b. To demand rescission of the obligation
1. To deliver the fruits of the thing: Right to
the fruits of the thing from the time the with right to recover damages
obligation to deliver it arises;
2. To deliver its accessions and accessories c.To demand payment of damages when it
(Art. 1166) is the only feasible remedy
a. Accessions – additions to or improvements
upon a thing. Ex: air conditioner in a car. d. If the obligor delays, or has promised
to deliver the same thing to two or more
b. Accessories – things joined to, or included persons who do not have the same interest,
with the principal thing for its better use, he shall be responsible for any fortuitous
embellishment or completion. Ex: key of a event until he has effected delivery.
house; frame of a picture (De Leon, 2003
ed., pp. 37-38)
3. To deliver the thing itself (Specific NOTE: In an obligation to deliver a determinate

Performance) thing, the very thing itself must be delivered and
4. To pay damages in case of breach of the consequently, only the debtor can comply with
obligation by reason of delay, fraud, negligence the obligation.
or contravention of the tenor of the obligation.
RIGHTS OF THE CREDITOR TO THE FRUITS WHEN OBLIGATION TO DELIVER THE THING
AND FRUIT ARISES
1. Before Delivery – personal right
2. After Delivery – real right

1. If the source of the obligation is law, quasi-
contract, delict, quasi-delict, it arises from
RIGHTS OF THE CREDITOR IN REAL the time designated by the law creating or
OBLIGATION TO GIVE (Art. 1165) regulating them;
1. GENERIC REAL OBLIGATION (Obligation to 2. If the source is contract, it arises from the
deliver a generic thing): time of the perfection of the contract (i.e.
meeting of the minds between the parties),
a. To ask for performance of the obligation unless
b. To ask that obligation be complied with at
the expense of the obligor a.the parties made a stipulation to the
c. To recover damages in case of breach of contrary,
obligation
b. the obligation is subject to a suspensive
condition or period; arises upon fulfillment
NOTE: A generic real obligation can be of the condition or arrival of the period
performed by a third person since the object is
expressed only according to its family or genus. c.in a contract to sell, the obligation arises
from the perfection of the contract even if
the obligation is subject to a suspensive
condition or a suspensive period where the
2. DETERMINATE OR SPECIFIC REAL
OBLIGATION (Obligation to deliver a price has been paid
determinate thing):
a.To demand specific performance or
=========================================
fulfillment (if it is still possible) of the
obligation with a right to indemnity for
damages

B. NATURE AND EFFECT OF ========================================
OBLIGATIONS
2. Obligation to do or not to do
=========================================
OBLIGATIONS
2. OBLIGATION TO DO OR NOT TO DO
3. Breaches of obligations
RIGHTS OF A CREDITOR IN PERSONAL
========================================
OBLIGATION (TO DO OR NOT TO DO)
3. BREACHES OF OBLIGATIONS (Arts. 1170

– 1174)
A. POSITIVE PERSONAL OBLIGATIONS: A. Voluntary – debtor in the performance of
1. Performance at debtor’s cause: The the obligation is guilty of:
obligee is entitled to have the thing done in a 1. Delay (Mora)
proper manner, by himself or by a third person,
2. Fraud (Dolo)
at the expense of the debtor.
3. Negligence (Culpa)
2. To demand what has been poorly done be
undone
4. Contravention of the tenor of the
obligation
3. To recover damages because of breach of the
obligation
NOTE: debtor is liable for damages

B. NEGATIVE PERSONAL OBLIGATION
1. To have it undone at the expense of the
obligor; and B. Involuntary – debtor is unable to comply
with his obligation due to fortuitous event/s
2. To ask for damages
NOTE: debtor is not liable for damages
DISTINGUISH PERSONAL RIGHT FROM

REAL RIGHT
A.1. DEFAULT OR DELAY
PERSONAL REAL
GENERAL RULE: Those obliged to deliver or to
Jus ad rem, a right Jus in re, a right do something incur in delay from the time the
enforceable only enforceable against obligee judicially or extrajudicially demands
against a definite the whole world from them the fulfillment of their obligation.
person or group of (Art. 1169)
persons
Right pertaining to a Right pertaining to a

person to demand person over a EXCEPTION: Demand by the creditor shall not
from another, as a specific thing, be necessary in order that delay may exist:
definite passive without a definite
subject, the passive subject (1) When the obligation or the law expressly so
fulfillment of the against whom the declares;
prestation to give, right may be
to do or not to do. personally enforced (2) When from the nature and the circumstances
of the obligation it appears that the designation

of the time when the thing is to be delivered or 1. Law or obligation expressly declares so
the service is to be rendered was a controlling
motive for the establishment of the contract; or 2. Time is of the essence
(3) When the demand would be useless, as 3. Demand would be useless

when the obligor has rendered it beyond his
power to perform.
NOTE: In reciprocal obligations, a party does
not incur in delay for failure of the other party to
In reciprocal obligations, neither party incurs in assume and perform the obligation imposed
delay if the other does not comply or is not upon him/her.
ready to comply in a proper manner with what is
incumbent upon him. From the moment one of
the parties fulfills his obligation, delay by the A.2. FRAUD (Dolo)
other begins. It is the deliberate or intentional evasion of the
normal fulfillment of an obligation. (8 Manresa
72)
NOTE: Art. 1169 is applicable only when the It is the fraud in the performance or fulfillment
obligation is to do something other than the of an obligation already existing, as
payment of money. In case of obligation for distinguished from the fraud referred to in
payment of sum of money, the interest replaces Article 1338 which is the cause of nullity of
contracts and which exists before and at the
the damages.
moment of creating the obligation.
Samson vs Court of Appeals [G.R. No.

KINDS OF DELAY: 108245, November 25, 1994].
1. Mora solvendi – delay or default committed by Bad faith is essentially a state of mind
debtor affirmatively operating with furtive design or
with some motive of ill-will. It does not simply
2. Mora accipiendi – delay or default committed connote bad judgment or negligence. It imports
a dishonest purpose or some moral obliquity and
by creditor
conscious doing of wrong. Bad faith is thus
synonymous with fraud and involves a design to
3. Compensatio Morae – default of both parties mislead or deceive another, not prompted by an
in reciprocal obligations honest mistake as to one’s rights or duties, but
by some interested or sinister motive.
GENERAL RULE: An action or suit can be filed

at anytime after the non-compliance of the other
party. However, damages or interest shall only
start to run after judicial or extra-judicial
demand.
EXCEPTION: In ejectment and consignment TYPES OF FRAUD:

cases, the extra-judicial demand should first be
made prior to the filing of a civil suit. 1. Causal Fraud (Dolo Causante): fraud
employed in the execution of the contract
DEMAND IS NOT NECESSARY WHEN:

2.
Incidental Fraud (Dolo Incidente): fraud in circumstances of the persons, of the
performance of obligation already existing time and of the place (Art. 1173)
because of a contract
FRAUD IN THE CAUSAL FRAUD/

PERFORMANCE/ DOLO CAUSANTE
DOLO INCIDENTE (ART. 1338)
KINDS OF NEGLIGENCE
(ART. 1170)
a. Quasi-Delict (Culpa aquiliana/culpa
Present during the Present during the
extra contractual) – source of obligation;
performance of a perfection of a
wrong or negligence committed independent
pre-existing obligation contract
of contract and without criminal intent
Purpose is to evade Purpose is to secure
the normal the consent of b. Contractual Negligence (Culpa
fulfillment of the another to enter into Contractual) – wrong or negligence in the
obligation the contract performance of a obligation/contract
Results in the breach Results in vitiation c. Criminal Negligence (Culpa

of an obligation of consent; voidable Criminal) – wrong or negligence in the
contract commission of a crime
Gives rise to a right in Gives rise to a right of

favor of the creditor to an innocent party to
recover damages annul the contract INSTANCES WHERE THE LAW REQUIRES A
HIGHER STANDARD OF CARE:
C.1. Banks – as a business affected with public

NOTE: Future fraud cannot be waived. However, interest, and because of the nature of its
functions, the bank is under obligation to treat
the law does not prohibit renunciation of the
the accounts of its depositors with
action for damages on the ground of past fraud. meticulous care, always having in mind the
fiduciary nature of their relationship. (Simex v.
CA, 183 SCRA 360)
REMEDIES OF DEFRAUDED PARTY EXCEPTION: Extraordinary diligence does not

cover transactions outside bank deposits, ie:
a. Specific performance (Art 1233) commercial transactions (Reyes v. CA, 363
SCRA 51)
b. Resolve contract (Art 1191)
c. Damages, in either case C.2. Common Carriers – from the nature of their
business and for reasons of public policy,
common carriers are bound to observe
extraordinary diligence in the vigilance over the
A.3. NEGLIGENCE (Culpa) goods and for the safety of the passengers
transported by them, according to all the
• Any voluntary act or omission, there circumstances of each case (Art. 1733)
being no malice which prevents the
normal fulfillment of an obligation Diligence of a good father of a family:
ordinary care or that diligence which an average
• Consists in the omission of that diligence
or reasonably prudent person would exercise
which is required by the nature of the
over his own property.)
obligation and corresponds with the

AMOUNT OF Preponderance Proof beyond
EVIDENCE of evidence reasonable
NOTE: Rule on Standard of Care doubt
COMPROMIS Can be Criminal
• That which the law requires; or E compromised liability can
as any other never be
civil liability compromised
• That stipulated by the parties; or
PRESUMPTIO Presumption of Presumption
N negligence of innocence
• In the absence of the two, diligence of a
good father of a family
KINDS OF NEGLIGENCE, DISTINGUISHED
CULPA AQUILIANA CULPA

DISTINGUISH FRAUD FROM NEGLIGENCE CONTRACTUAL
Negligence is Negligence merely an

FRAUD substantive and incident of performance
independent of an obligation
NEGLIGENCE
There is deliberate There is no There may or may not There is a pre-existing
intention to cause deliberate intention be a pre-existing contractual relation
damage. to cause damage. contractual obligation
Liability cannot be Liability may be Source of the Source of the obligation

mitigated. mitigated. obligation is the is the breach of the
negligence itself contractual obligation
Presumed from the Must be clearly
breach of a proved Negligence must be Proof of existing of the
contractual obligation proved contract and its breach
is prima facie sufficient
Waiver for future Waiver for future to warrant recovery
fraud is void. negligence may be
allowed in certain Diligence in the Diligence in the
cases selection and selection and
supervision of the supervision of the
employees is a employees is not
defense available as a defense
DISTINGUISH NEGLIGENCE FROM CRIME
NEGLIGENCE CRIME
EFFECTS OF CONTRIBUTORY NEGLIGENCE
WHAT IT Any act with Acts
PUNISHABLE fault or punishable by OF THE OBLIGEE
negligence law
GENERAL RULE: Reduces or mitigates the
CONDITION Criminal intent Necessary damages which he can recover
OF THE unnecessary
MIND
LIABILITY Damages may Some crimes
FOR be awarded to do not give EXCEPTION: If the negligent act or omission of
DAMAGES injured party rise to civil the creditor is the proximate cause of the event,
liability
which led to the damage or injury complained
NATURE OF Violation of Public rights
THE RIGHT private rights of, he cannot recover.
VIOLATED

EFFECTS OF IMPOSSIBLE AND ILLEGAL 1. The cause of breach is independent of the
CONDITIONS debtor’s will.
CONDITION EFFECT ON EFFECT ON 2. The event must be unforeseeable or

OBLIGATIO CONDITION unavoidable
N
3. The events render performance impossible
TO DO VOID VOID
impossible OR 4. The debtor must be free from any
illegal participation, or aggravation of the injury.
NOT to Do an VALID VALID

Illegal Thing
NOTE: In the case of Republic v. Luzon
NOT to do an VALID DISREGARD Stevedoring [G.R. No. L-21749, September
impossible thing CONDITION 29, 1967], the Court held that the person
obliged to perform an obligation shall not be
Condition is pre- VALID VOID excused from a fortuitous event when the
existing and NOT nature of the obligation requires the assumption
dependent on of risk. In other words, it is not enough that the
the fulfillment of event should not be foreseen or anticipated, but
impossible it must be one that is impossible to foresee or to
condition for avoid.
existence
Condition ONLY THE AFFECTED

IMPOSSIBLE BUT OBLIGATION IS VOID. ========================================
Obligation
DIVISIBLE TOPICS UNDER THE SYLLABUS

A.4. CONTRAVENTION OF THE TENOR OF OBLIGATIONS
THE OBLIGATION
4. Remedies of obligations
========================================
B. FORTUITOUS EVENT (Force Majeure)

GENERAL RULE: The law protects the creditors.
GENERAL RULE: No one should be held to The creditors are given by law all possible
account for fortuitous cases, which are those remedies to enforce such obligations.
situations that could not be foreseen, or which
though foreseen, were inevitable.
A. SPECIFIC PERFORMANCE
EXCEPTION: There concurs a corresponding To demand specific performance or fulfillment

fraud, negligence, delay or violation or of the obligation with a right to indemnity for
contravention in any manner of the tenor of the damages
obligation.
B. RESCISSION
• It means to abrogate the contract from the

ELEMENTS OF A FORTUITOUS EVENT: beginning and to restore the parties to their

relative positions as if no contract has been
END OF DISCUSSION ON TOPIC
made.
• It is “to declare the contract void at its OBLIGATIONS
inception and to put an end to it as though it ================================
never was.”2
C. KINDS OF CIVIL
• It is predicated on the breach of faith by any
party that violates the reciprocity between OBLIGATIONS
them. ================================
C. KINDS OF CIVIL OBLIGATIONS
1. Pure Obligations (Arts. 1179-1180)
NOTE: In the case of Adorable v. Court of
Appeals [G.R. No. 119466, November 25, 2. Conditional Obligations (Art. 1181)
1999], the Court held that unless a debtor A. Suspensive Condition
acted in fraud of his creditor, the creditor has no B. Resolutory Condition
right to rescind a sale made by the debtor to C. Potestative; casual or mixed
someone on the mere ground that such sale will C.1. Obligations subject to
prejudice the creditors’ rights in collecting later
potestative suspensive conditions
on from the debtor. The creditor’s right against
the debtor is only a personal right to receive are void (Art. 1182)
payment for the loan; it is not a real right over D. Effect of the happening of
the lot subject of the deed of sale transferring suspensive condition or resolutory
the debtor’s property.3 condition (Art. 1187)
D.1. Extent of retroactivity
E. Effect of improvement, loss or
C. DAMAGES deterioration of specific thing
before the happening of a
To demand payment of damages when it is a
feasible remedy suspensive condition in obligation
to do or not to do (Art. 1189)
F. Effect when a resolutory
D. SUSIDIARY REMEDIES OF CREDITORS
condition in obligation to do or not
1. Accion Subrogatoria – action which the to do happens and there is
creditor may exercise in the place of his improvement, loss or deterioration
negligent debtor in order to preserve or recover of the specific thing (Art. 1190, par.
for the patrimony of the debtor the product of 3)
such action, and then obtain therefrom the
3. Obligation with a period or a term
satisfaction of his own credit
(Art.1193)
2. Accion Pauliana – action to revoke or A. Presumption that period is for
rescind acts which the debtor may have done to the benefit of both debtor and
defraud his creditor. creditor (Art. 1196)
3. Accion Directa - (Arts. 1652, 1608, 1729, B. Effect if suspensive period is for
1893) the benefit of both debtor and
creditor
C. Effect if given to debtor alone
2 SPOUSES VELARDE V. COURT OF APPEALS, [G.R. NO. 108346, C.1. Instances when debtor losses
JULY 11,2001].
3 MELENCIO S. STA. MARIA, JR., OBLIGATIONS AND CONTRACTS: benefit of period (Art. 1198)
TEXT AND CASES 101 (2ND ED. 2003).

D. Resolutory period 2. CONDITIONAL OBLIGATIONS
E. Definite or indefinite period
It is exactly the reverse of a pure obligation. The
E.1. Instances when courts may performance in conditional obligations depends
fix the period (Art. 1197) upon a future or uncertain event or upon a past
E.2. Creditor must ask court to set event unknown to parties.
the period before he can demand
payment
4. Alternative or facultative (Art. A. RESOLUTORY CONDITION
1199)
A. Difference between alternative • Demandable at once
and facultative obligations
• Once the condition is established or
B. Effect of loss of specific things or acknowledged, the right to demand
impossibility of performance of performance immediately exists and
alternative, through fault of therefore the obligation concomitant to the
debtor/creditor or through right can be demanded at once.
fortuitous events
• It is also known as “condition subsequent”
========================================= • It extinguishes obligations
C. KINDS OF CIVIL OBLIGATION NOTE: In case of a contract with a reciprocal

obligation, the obligation of one is a resolutory
1. Pure Obligations condition of the obligation of the other, the non-
fulfillment of which entitles the other party to
========================================= rescind the contract.
1. PURE OBLIGATIONS B. SUSPENSIVE CONDITION

It is an unqualified obligation which is
• Not demandable at once
demandable immediately. It is an obligation
whose performance does not depend upon a • It gives rise to the performance of an
future and uncertain event, or past event
obligation (ex. Contract to Sell)
unknown to the parties. (Art. 1179)
• It is also known as “condition precedent”
• It gives birth to obligations

=========================================

C. POTESTATIVE CONDITION
C. KINDS OF CIVIL OBLIGATION
The fulfillment of the condition entirely depends
2. Conditional Obligations upon the sole will of the debtor.
=========================================
GENERAL RULE: All potestative conditions are

void.

EXCEPTION: Potestative resolutory conditions NOTE: “LOSS” happens when the thing
are not void. If the potestative condition is perishes, goes out of commerce, or it disappears
imposed not on the birth (suspensive) of the in such a way that its existence is unknown or it
obligation but on its fulfillment (resolutory), only cannot be recovered. (Art. 1189)
the condition is avoided, leaving unaffected the
obligation itself.
E.1. Before the happening of a suspensive

condition in an obligation to do or not to
D. EFFECT OF SUSPENSIVE AND do (Art. 1189)
RESOLUTORY CONDITIONS
• If the thing is lost without the fault of debtor,
Art. 1187: the obligation shall be extinguished.
• When the obligation imposes reciprocal • If the thing is lost with the fault of debtor, he
prestations, the fruits and interests during shall be obliged to pay damages.
the pendency of the condition shall be
deemed to have been mutually • If the thing deteriorates without the fault of
compensated. debtor, the impairment is to be borne by
creditor
• If the obligation is unilateral, the debtor or
obligor shall appropriate the fruits and • If the thing deteriorates with the fault of
interests received, unless from the nature debtor, the creditor may choose between
and circumstances of the obligation it should rescission of the obligation and its
be inferred that the intention of the person fulfillment, with indemnity for damages in
constituting the same is different. either case
• If the thing improves by its nature or by

time, the benefit shall inure to the benefit of
the creditor.
• If the thing improves at the expense of

D.1. Extent of Retroactivity
debtor, he shall have no other right than
• In resolutory conditions, retroactivity is
that granted to the usufructuary.
irrelevant.
• In suspensive conditions, the effect of a

conditional obligation “to give” retroacts to E.2. When a resolutory condition in an
the day of the constitution of the obligation obligation to do or not to do happens (Art.
(Art 1187) 1190, par. 3)
• In obligations to do and not to do, the court

shall determine the effect of the
E. IMPROVEMENT, LOSS, AND
extinguishment of the obligation
DETERIORATION
Constructive fulfillment - The condition shall

be deemed fulfilled when the obligor (debtor) =========================================
voluntarily prevents its fulfillment (Art. 1186)

401
3. Obligations with a Period or Term KINDS OF OBLIGATIONS WITH A PERIOD:
========================================= 1. According to effect:
a. Resolutory (in diem) – demandable at

once but terminates upon arrival of the
day certain
• Day certain – that which must

necessarily come, although it may not be
3. OBLIGATIONS WITH A PERIOD OR known when
TERM
b. Suspensive (ex die) – obligation
becomes demandable on the day
stipulated
• WITH A PERIOD – An obligation whose
demandability or extinguishment depends 2. According to source
on a future and certain event; subject to the
expiration of a term of period (Arts 1193, a. Legal - when it is provided by laws
1196)]
b. Conventional or Voluntary - when it is
• PERIOD – Interval of time, which, exerting agreed to by the parties
an influence on an obligation as a
c. Judicial - when it is fixed by the court
consequence of a juridical act, either
suspends its demandability or produces its
3. According to definiteness:
extinguishment
a.Definite - when it is fixed or it is known
REQUISITES:
when it will come
1. Future
b. Indefinite - when it is not fixed or it is
not known when it will come
2. Certain
3. Legally and physically possible
WHEN STIPULATION SAYS “PAYABLE WHEN

ABLE”
• When the obligor binds himself to pay when

his means permit him to do so, the
obligation shall be deemed to be one with a
period.
• Remedy:
TERM VS. CONDITION, DISTINGUISHED
1. Agreement among parties
TERM CONDITION
2. Court shall fix period of payment when
parties unable to agree Interval of time Fact or event which is
which is future and future or uncertain or a
certain past event unknown to

401
the parties period has been established in favor of one or
the other.
Time w/c must Future and uncertain
necessarily come fact or event which may
although it may not or may not happen
be known when PERIOD FOR THE BENEFIT OF THE
CREDITOR
Exerts an influence Exerts an influence
upon the time of upon the very existence • Creditor may demand the fulfillment of the
demandability or of the obligation itself obligation at any time but the debtor cannot
extinguishment of an compel him to accept before the expiration
obligation of the period
Does not have any Has retroactive effect

retroactive effect
unless there is an PERIOD FOR THE BENEFIT OF THE DEBTOR
agreement to the
contrary • Debtor may oppose any premature demand
of the creditor but he may renounce the
When it is left When it is left benefit of the period by performing his
exclusively to the will exclusively to the will of obligation in advance (Manresa)
of the debtor, the the debtor, the
existence of the obligation is void WHEN DEBTOR LOSES RIGHT TO PERIOD
obligation is affected (Art 1198)
1. Insolvency of debtor, unless security

provided
WHEN COURTS MAY FIX PERIOD:
2. Did not deliver security promised
aa If the obligation does not fix a period,
but from its nature and circumstances it can be 3. Impaired security through his own acts or
inferred that a period was intended by the through fortuitous event unless he gives new
parties securities equally satisfactory
aa If the duration of the period depends 4. Violates undertaking in consideration of

upon the will of the debtor extension of period
aa In case of reciprocal obligations, when 5. Attempts to abscond

there is a just cause for fixing a period
aa If the debtor binds himself when his

=========================================
means permit him to do so
PERIOD, FOR WHOSE BENEFIT C. KINDS OF CIVIL OBLIGATION
GENERAL RULE: When a period is designated 4. Alternative or Facultative

for the performance or fulfillment of an Obligation
obligation, it is presumed to have been
established for the benefit of both parties. =========================================
EXCEPTION: When it appears from the tenor of

the obligation or other circumstances that the

401
4. ALTERNATIVE OR FACULTATIVE
OBLIGATION
WHEN CONVERTED TO SIMPLE
(ARTS. 1199 – 1206)
OBLIGATION:
1. When the person who has a right of choice

FACULTATIVE - only one prestation has been has communicated his choice
agreed upon but another may be given in
2. Only one is practicable
substitution
EFFECT OF LOSS OF OBJECTS OF

EFFECT OF LOSS OR DETERIORA0TION
ALTERNATIVE OBLIGATIONS
THRU NEGLIGENCE, DELAY OR FRAUD OF
OBLIGOR: 1. If the right of choice belongs to the
debtor
• Of thing intended as substitute - no liability
• If through a fortuitous event all were
• Of the substitute after substitution is made –
lost, debtor cannot be held liable for
with liability
damages
• If 1 or more but not all of the things are

ALTERNATIVE – bound by different prestations lost or one or some but not all of the
but only one is due prestations cannot be performed due to
fortuitous event or fault of the debtor,
creditor cannot hold the debtor liable for
damages because the debtor can still
RIGHT OF CHOICE IN ALTERNATIVE comply with his obligation
OBLIGATIONS
• If all things, except one, were lost, the
GENERAL RULE: the right of choice belongs to debtor must comply by performing that
debtor which remain
EXCEPTION: • If all were lost by fault of the debtor the
later is liable for the value of the last
1. Expressly granted to creditor
thing or service which became
2. Expressly granted to third person impossible
LIMITATIONS ON THE RIGHT OF CHOICE OF 2. If right of choice belongs to the

THE DEBTOR creditor
The debtor shall not have the right to choose the • If 1 of the things is lost through a
prestations, which are: fortuitous event, the debtor shall
perform the obligation by delivering that
a. Impossible which the creditor should choose from
among the remainder or that which
b. Unlawful remains if only 1 subsists
c. Those which could not have been the
• If the loss of 1 of the things occurs
object of the obligation
through the fault of the debtor, the

401
creditor may claim any of those If it is impossible to If it is impossible to
subsisting or the price of that which, give all except one, give the principal,
through the fault of the former, has the last one must still the substitute does
disappeared with a right to damages be given not have to be given;
if it is impossible to
• If all the things are lost through the fault give the substitute,
of the debtor, the choice by the creditor the principal must
shall fall upon the price of any 1 of them, still be given
also with indemnity for damages.
Right to choose may The right of choice is
be given either to given only to the
debtor or creditor debtor
REQUISITES FOR MAKING THE CHOICE:
1. Made properly so that creditor or his agent

will actually know END OF DISCUSSION ON TOPIC
2. Made with full knowledge that a selection is ================================
indeed being made
3. Made voluntarily and freely D. JOINT AND SOLIDARY

OBLIGATION
4. Made in due time – before or upon maturity
================================
5. Made to all proper persons TOPICS UNDER THE SYLLABUS
6. Made w/o conditions unless agreed by the D. JOINT AND SOLIDARY OBLIGATION
creditor
1. Joint (Divisible) Obligation
7. May be waived, expressly or impliedly A. Concurrence of two or more
creditors and/or two or more debtors
A.1. Joint obligation is presumed,
DISTINGUISH ALTERNATIVE FROM unless otherwise indicated by the
FACULTATIVE law or nature of obligation (Art.
1207)
ALTERNATIVE FACULTATIVE
A.2. Obligation presumed to be
Various things are due Only one thing is due divided into as many equal shares
but the giving but a substitute may as there are creditors or debtors
principally of one is be given to render A.3. Each credit is distinct from one
sufficient payment/fulfillment another, therefore a joint debtor
easy
cannot be required to pay for the
If one of prestations is If principal share of another with debtor,
illegal, others may be obligations is void although he may pay if he wants to
valid but obligation and there is no (Art. 1209)
remains necessity of giving
A.4. Insolvency of a joint debtor,
the substitute; nullity
of P carries with it
others not liable for his share (Art.
nullity of S 1209)
2. Joint (Indivisible) Obligation

401
A. Obligation cannot be performed in GENERAL RULE: The presumption of the law is
that an obligation is always joint.
parts but debtors are bound jointly
B. In case of failure of one joint EXCEPTIONS TO THE PRESUMPTION
debtor to perform his part (share),
there is default but only the guilty 1. When expressly stated that there is
solidarity
shall be liable for damages
2. When the law requires solidarity
3. Solidary Obligation
3. When the nature of the obligation requires
A. Mutual agency among solidary
solidarity
debtors (Arts. 1214-1215)
B. Mutual guaranty among solidary 4. When a charge or condition is imposed upon
debtors (Arts. 1216, 1217, 1222) heirs or legatees and the testament
C. Each one of solidary creditors may expressly makes the charge or condition in
solidum (Manresa)
do whatever may be useful to the
others, but not anything prejudicial 5. When a solidary responsibility is imputed by
to them (Art. 1212) a final judgment upon several defendants
C.1. Effect of any novation, (Gutierrez v. Gutierrez)
compensation, confusion or
remission of debt executed by a
solidary creditor EFFECTS OF JOINT LIABILITY
1. Demand on one produces delay only with

4. Divisible and Indivisible (Art.
respect to the debt
1225)
2. Interruption in payment by one does not
5. Obligations with a Penal Clause benefit or prejudice the other
(Arts. 1226, 1228-1230) 3. Vices of one debtor to creditor has no effect
on the others
=========================================
4. Insolvency of one debtor does not affect
other debtors
D. JOINT AND SOLIDARY

OBLIGATIONS JOINT DIVISIBLE OBLIGATIONS
1. Joint (Divisible) Obligation 1. Each creditor can demand for the payment
of his proportionate share of the credit, while
========================================= each debtor can be held liable only for the
payment of his proportionate share of the
1. JOINT (DIVISIBLE) OBLIGATION debt
2. A joint creditor cannot act in representation

JOINT OBLIGATION (Obligacion of the other creditors while a joint debtor
Mancumunada) – The whole obligation is to be cannot be compelled to answer for the acts
paid or fulfilled proportionately by different or liability of the other debtors
debtors or demanded proportionately by the
different obligees

401
NOTE: Unless there is no specification as to object of the of the obligation
their proportionate share in the credit or in the obligation
debt, the creditors and debtors in a joint
obligation shall be entitled or shall make Plurality of subjects Plurality of subjects is
payment in equal proportion. is not required indispensable
========================================= In case of breach, When there is liability
obligation is on the part of the
TOPICS UNDER THE SYLLABUS converted into 1 of debtors because of the
indemnity for breach, the solidarity
damages because among the debtors
OBLIGATIONS of breach, remains
indivisibility of the
2. Joint (Indivisible) Obligation obligation is
terminated
=========================================
2. JOINT (INDIVISIBLE) OBLIGATION PASSIVE SOLIDARITY SURETYSHIP

1. If there are 2 or more debtors, the fulfillment Stands for some other person
of or compliance with the obligation requires May be reimbursed after payment
the concurrence of all the debtors, although liable for his and co- only the
each for his own share. The obligation can debtor's share principal's share
be enforced only by proceeding against all of Primary Secondary
the debtors. Extension of time, Released
not released
2. If there are 2 or more creditors, the
concurrence or collective act of all the
creditors, although each for his own share, is =========================================
also necessary for the enforcement of the
obligation TOPICS UNDER THE SYLLABUS

OBLIGATIONS
EFFECT OF BREACH
If one of the joint debtors fails to comply with his 3. Solidary Obligation
undertaking, the obligation can no longer be
=========================================
fulfilled or performed. Consequently, it is
converted into one of indemnity for damages.
Innocent joint debtor shall not contribute to the
indemnity beyond their corresponding share of 3. SOLIDARY OBLIGATION
the obligation.
SOLIDARY OBLIGATION (Obligacion

INDIVISIBILITY and SOLIDARITY, Solidaria) – must be expressed in stipulation or
DISTINGUISHED provided by law or by nature of obligation
INDIVISIBILITY SOLIDARITY
Refers to the Refers to the legal tie 1. Active – on the part of creditor or oblige
prestation which and consequently to
constitutes the the subjects or parties EFFECTS:

401
• e.
Death of 1 solidary creditor transmits share to B
heirs (but collectively) ailees in commodatum
• Each creditor represents the other in the act

of recovery of payment
• EFFECTS:
• Credit is divided equally between creditors
a. Payment made before debt is due, no
as among themselves
interest can be charged, otherwise –
• Debtor may pay any of the solidary creditors interest can be charged
b. Insolvency of one – others are liable for

share pro-rata
2. Passive – on the part of debtors or obligors
c. If different terms and conditions – collect
EFFECTS: only what is due, later on collect from
any
• Each debtor may be requested to pay whole
obligation with right to recover from co- d. No reimbursement if payment is made
debtors after prescription or became illegal
e. Remission made after payment is made

• Interruption of prescription to one creditor
– co-debtor still entitled to
affects all
reimbursement
• Interest from delay on 1 debtor is borne by
f. Effect of insolvency or death of co-debtor
all
– still liable for whole amount
g. Fault of any debtor – everyone is

3. Mixed – on the part of the obligors and responsible – price, damage and interest
obligees, or the part of the debtors and the
h. Complete/ personal defense – total or
creditors
partial ( up to amount of share only ) if
not personal to him
4. Conventional – agreed upon by the parties

EFFECT OF LOSS OR IMPOSSIBILITY OF THE
PRESTATION:
5. Legal – imposed by law
1. If without fault – no liability
• Instances where law imposes
solidary obligation: 2. If with fault – there is liability (also for
damage and interest)
a. Obligations arising from tort
3. Loss due to fortuitous event after default –
b. Obligations arising from quasi-contracts there is liability (because of default)
c. Legal provisions regarding obligation of

devisees and legatees
NOTE: The law clearly provides that the creditor
d. Liability of principals, accomplices, and who may have executed any acts mentioned in
accessories of a felony Art. 1215 (Novation, Compensation, Merger or
Confusion), as well as he or she who collects the

401
•
debts, shall be liable to the others for the share In
in the obligation corresponding to them. tention of parties should be taken into
account to determine whether obligation is
divisible or not
=========================================
=========================================
OBLIGATIONS D. JOINT AND SOLIDARY
OBLIGATIONS
4. Divisible and Indivisible Obligation
5. Obligations with a Penal Clause
=========================================
=========================================
5. OBLIGATIONS WITH A PENAL CLAUSE

4. DIVISIBLE AND INDIVISIBLE OBLIGATION
WITH A PENAL CLAUSE – One to which an

DIVISIBLE - obligation that is capable of partial accessory undertaking is attached for the
performance purpose of insuring its performance by virtue of
which the obligor is bound to pay a stipulated
• Execution of certain no of days work indemnity or perform a stipulated prestation in
case of breach.
• Expressed by metrical units
PENAL CLAUSE DISTINGUISHED FROM
• Nature of obligation – susceptible of CONDITION
partial fulfillment PENAL CLAUSE CONDITION
Constitutes an Not an obligation
obligation
Demandable in default Never demandable
INDIVISIBLE - one not capable of partial Obligation exists No obligation until
condition happens
performance
Depends on the non- Principal itself is
performance of the dependent on an
• To give definite things
principal obligation uncertain event
• Not susceptible of partial performance
PENAL CLAUSE DISTIGUISHED FROM
• Provided by law
ALTERNATIVE OBLIGATIONS
PENAL CLAUSE ALTERNATIVE
• Intention of parties OBLIGATIONS
Only 1 prestation Several prestations
Impossibility of Impossibility of 1
principal extinguishes prestation does not
NOTES: penalty extinguish the
obligation
• Divisibility or indivisibility of the obligation Debtor may not Debtor may choose
refers to the performance of the prestation choose between among the
and not to the thing which is the object principal and penalty prestations
thereof

401
PENAL CLAUSE DISTINGUISHED FROM case of breach of the principal obligation
FACULTATIVE OBLIGATION (punitive).
PENAL CLAUSE FACULTATIVE
OBLIGATION
Penalty of payment Power to choose
in lieu of the prestation is absolute CHARACTERISTICS OF PENAL CLAUSES:
principal must be
expressly granted 1. Subsidiary - As a general rule, only penalty
Creditor may Creditor may not
can be demanded, principal cannot be
demand both if demand both principal
expressly granted and penalty demanded, except: Penalty is joint or
cumulative
2. Exclusive - takes place of damage, damage

can only be demanded in the ff. cases:
a. Stipulation – granting right
b. Refusal to pay penalty
c. With dolo ( not of creditor )

PENAL CLAUSE DISTINGUISHED FROM
GUARANTEE
PENAL CLAUSE GUARANTEE
PENALTY AS SUSTITUTE FOR DAMAGES
Insure performance of principal obligation
Accessory and subsidiary obligations
GENERAL RULE: the penalty fixed by the
Obligation to pay the Object of the
parties is or substitute for damages in case of
penalty is different principal and the
from the principal guarantee is the breach
obligation same
Principal and penalty No EXCEPTIONS:
can be assumed by the
same person 1. When there is a stipulation to the contrary
Penalty is extinguished Guarantee subsists
by the nullity of the even if the principal 2. When the debtor is sued for refusal to pay
principal obligation is the agreed penalty; and
voidable,
unenforceable or a 3. When debtor is guilty of fraud
natural one, same
applies if penal
clause is assumed
by a guarantee DOUBLE FUNCTIONS OF PENALTY
1. to provide for liquidated damages

PURPOSE OF PENALTY:
2. to strengthen the coercive force of
1. Funcion coercitiva o de garantia – to the obligation by the threat of greater
insure the performance of the obligation responsibility in the event of breach
2. Funcion liquidatoria – to liquidate the

amount of damages to be awarded to the
injured party in case of breach of the KINDS OF PENALTIES:
principal obligation (compensatory), and
1. Legal – constituted by law
3. Funcion estrictamente penal – in certain
exceptional cases, to punish the obligor in

401
2. Conventional – constituted by E. Tender of payment and
agreement of the parties consignation (Arts. 1256-1261)
3. Compensatory – established
for the purpose of indemnifying the damages 2. Loss of determinate thing due or
suffered by the obligee or creditor in case of impossibility or difficulty of
breach of the obligation performance (Arts. 1262, 1266-
1267)
4. Punitive – established for the
purpose of punishing the obligor or debtor in
case of breach of the obligation 3. Condonation or remission of debt
A. Express condonations and
5. Subsidiary or alternative- in required formality thereof (Art.
case of non-performance only the penalty is
1270)
demandable
B. Implied (Arts. 1271, 1272,
6. Joint or cumulative – both the 1274)
principal undertaking and the penalty may
be demanded 4. Confusion or Merger of Rights
(Arts. 1275, 1272)
CAUSES FOR REDUCTION OF PENALTY: 5. Compensation

1. Partial/irregular performance
A. Kinds (Arts. 1278, 1279)
A.1. Legal compensation (Arts.
2. Penalty provided is iniquitous/ 1286-1290)
unconscionable A.2. Agreement (Art. 1282)
A.3. Voluntary (Art. 1282)
A.4. Judicial (Art. 1283)
END OF DISCUSSION ON TOPIC A.5. Facultative
D. JOINT AND SOLIDARY OBLIGATION B. Obligations not compensable
================================ (Arts. 1287-1288)
E. EXTINGUISHMENT OF 6. Novation (Arts. 1291-1288)

OBLIGATIONS
================================
=========================================
E. EXTINGUISHMENT OF
OBLIGATIONS E. EXTINGUISHMENT OF
1. Payment (Arts. 1236-1238) OBLIGATIONS
A. Dation in payment (Art. 1245)
1. Payment
B. Form of payment (Art. 1249)
C. Extraordinary inflation or =========================================
deflation (Art. 1250)
D. Application of payment (Arts.
1252-1254) Principal Modes: (PAL-CoCoCo-No)

401
1.
Payment or performance 1. PAYMENT OR PERFORMANCE
Delivery of money and performance, in any
2. Loss of the thing due other manner of the obligation
3. Condonation or remission of debt
4. Confusion or merger of rights REQUISITES FOR VALID

PAYMENT/PERFORMANCE
5. Compensation
1. With respect to prestation itself
6. Novation
a. Identity
b. Integrity or completeness
Other Modes:
c. Indivisibility
7. Annulment
8. Rescission
2. With respect to parties - must be made by
9. Fulfillment of resolutory condition
proper party to proper party
10. Prescription
a. Payor
1. Payor - the one performing, he can be the

Not Stated in the Civil Code: debtor himself or his heirs or assigns or his
agent, or anyone interested in the fulfillment of
11. Death of a Party in Personal Obligations the obligation; can be anyone as long as it is
with the creditor's consent
12. Mutual Desistance
2. 3RD person pays/performs - only the
13. Compromise creditor's consent; if performance is done also
with debtor's consent - he takes the place of the
14. Impossibility of Fulfillment debtor. There is subrogation except if the 3rd
person intended it to be a donation
15. Happening of Fortuitous Event
3. 3rd person pays/performs with consent of
16. Arrival of Resolutory Period
creditor but not with debtor's consent, the
17. Will of One of the Parties Due to repayment is only to the extent that the
Indeterminate Duration or Nature of the payment has been beneficial to debtor
Prestation/ Unilateral Withdrawal in
b. Payee
Partnerships
i. Payee - creditor or obligee or successor
18. Change of Civil Status
in interest of transferee, or agent
19. Rebus Sic Stantibus (Art. 1267)
ii. 3rd person - if any of the ff. concur:
20. Want of Interest in Some Circumstances
a.It must have redounded to the
21. Abandonment in Special Cases obligee's
22. Insolvency Judicially Declared and Debtor is b. benefit and only to the extent of
Discharged such benefit

401
c.It falls under art 1241, par 1,2,3 - the
TO WHOM PAYMENY MUST BE MADE
benefit is total so, performance is total
1. The person in whose favor the obligation has
iii. Anyone in possession of the credit - but
been constituted
will apply only if debt has not been
previously garnished 2. His successor-in-interest
3. Any person authorized by law or by the

obligee at the time when payment is due to
PRINCIPLE OF INTEGRITY (Art. 1233)
receive it (not during the time when the
GENERAL RULE: A debt shall not be obligation is constituted)
understood to have been paid unless a thing or
service of which the obligation consists has been
completely delivered or rendered, as the case PAYMENT TO AN INCAPACITATED PERSON,
maybe. VALID IF:
EXCEPTIONS: 1. Incapacitated person kept the thing

delivered, or
1. When the obligation has been substantially
performed in good faith (Art. 1234); 2. Insofar as the payment has been
beneficial to him
2. When the obligee accepts performance
despite its incompleteness or irregularity and
without expressing any protest or correction.
(Art. 1235) PAYMENT TO 3RD PERSON
GENERAL RULE: Payment is not valid, even

though made in good faith
PERSONS FROM WHOM THE CREDITOR
MUST ACCEPT PAYMENT EXCEPTIONS:
1. Debtor himself or his legal representative 1. Payment which redounded to the benefit of
the obligee
2. Any person who has interest in the
obligation (i.e., guarantor) • Instances when the presumption that the
payment redounded to the benefit of the
3. A 3rd person who has no interest in the obligee:
obligation, when there is a stipulation to the
contrary 1. After payment, 3rd person acquires the
creditor’s rights (subrogation)
2. Creditor ratifies payment to 3rd person

PAYMENT MADE BY 3Rd PERSON
3. By creditor’s conduct, debtor has been
• If payment was made without the knowledge led to make the payment (estoppel)
or against the will: the recovery is only up to
the extent or the amount of the debt at the 2. Payment to the possessor of the credit,
time of the payment; the defense may only when made in good faith
be availed of by the obligor
• REQUISITES:
• If payment was with knowledge: the rights of
reimbursements and subrogation are a a Payment by debtor must be made in good
acquired by the 3 person
rd faith

401
aa
Creditor must be in possession of the credit
EFFECT OF SUBSTANTIAL PERFORMANCE IN
and not merely the evidence of indebtedness
GOOD FAITH
• Obligor may recover as though there has

NOTE: With respect to time and place of been strict and complete fulfillment, less
payment - must be according to the obligation damages suffered by the oblige
• Right to rescind cannot be used for slight

breach
WHERE PAYMENT SHOULD BE MADE
1. In the place designated in the obligation

SPECIAL RULES/FORMS OF PAYMENT
2. If there is no express stipulation and the
undertaking is to deliver a specific thing – at the 1. Application of Payments
place where the thing might be at the moment
the obligation was constituted 2. Dation in Payment/ Dacion en Pago/
Adjudication/ Dacion in Solutum/
3. In other case – in the place of the domicile of Adjudicacion en Pago/ Payment in Kind/
the debtor Dation en Paiement
• Time of payment - time stipulated 3. Payment by Cession/Cession en Pago
• Effect of payment – extinguish obligation 4. Tender of Payment and Consignation

Except: order to retain debt
SUBSTANTIAL PERFORMANCE A. APPLICATION OF PAYMENTS – the

A debt shall not be understood to have been designation of the debt which payment shall
paid unless the thing or service in which the be made, out of 2 or more debts owing the
obligation consists has been completely same creditor: stipulation or application of
delivered or rendered, as the case may be. party given benefit of period – OK; to be
valid: must be debtor’s choice or w/ consent
If the obligation has been substantially of debtor
performed in good faith, the obligor may recover
as though there had been a strict and complete
fulfillment, less damages suffered by the
obligee. REQUISITES FOR THE APPLICATION OF
PAYMENT:
When the obligee accepts the performance,
knowing its incompleteness or irregularity, and a. There must be only one debtor and
without expressing any protest or objection, the only one creditor
obligation is deemed fully complied with
b. Two or more debts of the same kind
• Attempt in Good Faith to perform without
c. All debts must be due
willful or intentional departure
EXCEPTION: there may be application of
• Deviation is slight
payment even if all debts are not yet due
if:
• Omission/Defect is technical or unimportant
i. Parties so stipulate
• Must not be so material that intention of
parties is not attained

401
ii. When application of payment is • If debts are of the same nature and
made by the party for whose benefit burden, application shall be made to
the term has been constituted all proportionately
iii. Payment is not enough to extinguish

all debts
B. DACION EN PAGO: mode of extinguishing
an obligation whereby the debtor alienates
in favor of the creditor property for the
d. Amount paid by the debtor is insufficient satisfaction of monetary debt; extinguish up
to cover the total amount of all debts. to amount of property unless w/ contrary
stipulation; A special form of payment
because 1 element of payment is missing:
HOW APPLICATION IS MADE: IDENTITY
a. Debtor makes the designation
b. If not, creditor makes it by so stating in REQUISITES FOR A VALID DACION EN

the receipt that he issues – unless PAGO:
there is cause for invalidating the
a. There must be the performance of the
contract
prestation in lieu of payment (animo
c. If neither the debtor nor creditor has solvendi) which may consist in the delivery
made the application or if the of a corporeal thing or a real right or a credit
application is not valid, then against the third person
application, is made by operation of
b. There must be some difference between the
law
prestation due and that which is given in
substitution (aliud pro alio)
WHO MAKES APPLICATION OF DEBTS c. There must be an agreement between the

creditor and debtor that the obligation is
GENERAL RULE: Debtor immediately extinguished by reason of the
performance of a prestation different from
EXCEPTION: Creditor that due
a. Debtor without protest accepts receipt in

which creditor specified expressly and
unmistakably the obligation to which such CONDITIONS FOR A VALID DACION:
payment was to be applied – debtor in this
case renounced the right of choice a. If creditor consents, because a sale
presupposes the consent of both parties
b. When monthly statements were made by
the bank specifying the application and the b. If dacion will not prejudice the other
debtor signed said statements approving the creditors
status of her account as thus sent to her
c. If debtor is not judicially declared
monthly by the bank
insolvent
c. In case no application is made:
• Apply payment to the most onerous

NOTE: DACION is governed by the law on sales

401
DACION EN PAGO DISTINGUISHED FROM C. CESSION or ASSIGNMENT (IN FAVOR
PACTUM COMMISORIUM OF CREDITORS) – the process by which debtor
DACION EN PACTUM transfer all the properties not subject to
PAGO COMMISORIUM execution in favor of creditors is that the latter
There is an Generally, only one
may sell them and thus, apply the proceeds to
intervening single contract
agreement where the parties their credits; extinguish up to amount of net
subsequent and agree that in the event proceeds ( unless w/ contrary stipulation)
independent from debtor fails to pay, the
the original mortgaged or pledged
contract is entered property shall
into by the parties automatically be KINDS OF ASSIGNMENT:
to have the appropriated or owned
property by the creditor a. Legal – governed by the insolvency law
collaterizes in the
original agreement b. Voluntary – agreement of creditors
as payment of the
debt
Valid Void
REQUISITES OF VOLUNTARY ASSIGNMENT:
a. More than one debt
b. More than one creditor
c. Complete or partial insolvency of debtor

DACION EN PAGO DISTINGUISHED FROM
PLEDGE d. Abandonment of all debtor’s property
DACION EN PLEDGE not exempt from execution
PAGO
Delivery and Delivery but no e. Acceptance or consent on the part of the
transfer of transfer of ownership
ownership creditors
Presumed since less
transmission of rights
EFFECTS OF ASSIGNMENT:
DACION EN PAGO DISTINGUISHED FROM
SALE
a. Creditors do not become the owner; they
DACION EN PAGO SALE
are merely assignees with authority to
Preexisting credit None
Obligation extinguished Obligation rises sell
Less freedom in Greater freedom
determining the price b. Debtor is released up to the amount of
Total or partial Payment of price the net proceeds of the sale, unless
extinguishment generally totally there is a stipulation to the contrary
extinguishes
if done by mistake, ... recovery of the c. Creditors will collect credits in the order
recovery of the thing price paid of preference agreed upon, or in default
of agreement, in the order ordinarily
DACION EN PAGO DISTINGUISHED FROM established by law
ASSIGNMENT
DACION EN PAGO ASSIGNMENT
Substitute forms of performance
1 creditor Several creditors DATION IN PAYMENT DISTINGUISHED FROM
Debtor not partially Debtor partially CESSION IN PAYMENT
insolvent insolvent
DATION IN PAYMENT CESSION IN

401
PAYMENT c. Prior Notice of Consignation had been
given to the person interested in
One creditor Plurality of creditors performance of obligation (1st notice)
Not necessarily in Debtor must b
d. Actual deposit/Consignation with proper
state of financial partially or relatively
judicial authorities
difficulty insolvent
e. Subsequent notice of Consignation (2nd
Thing delivered is Universality of
notice)
considered as property of debtor is
equivalent of what is ceded
performance
EFFECTS: EXTINGUISHMENT OF
Payment extinguishes Merely releases OBLIGATION
obligation to the debtor for net
extent of the value of proceeds of things a. Debtor may ask judge to order
the thing delivered as ceded of, assigned, cancellation of obligation
agreed upon, proved unless there is a
or implied from the contrary intention b. Running of interest is suspended
conduct of the creditor
c. Before creditor accepts or before judge
declares consignation has been properly
made, obligation remains (debtor bears
D. TENDER AND CONSIGNATION risk of loss at the meantime, after
acceptance by creditor or after judge
declares that consignation has been
TENDER -the act of offering the creditor what is properly made – risk of loss is shifted to
due him together with a demand that the creditor)
creditor accept the same (When creditor refuses
w/o just cause to accept payment, he becomes
in mora accepiendi and debtor is released from
responsibility if he consigns the thing or sum CONSIGNATION W/O PRIOR TENDER –
due) allowed in:
a. Creditor absent or unknown/ does not

appear at the place of payment
CONSIGNATION – the act of depositing the
thing due with the court or judicial authorities b. Incapacitated to receive payment at the
whenever the creditor cannot accept or refuses time it is due
to accept payment; generally requires prior
c. Refuses to issue receipt w/o just cause
tender of payment
d. 2 or more creditor claiming the same
right to collect
REQUISITES OF VALID CONSIGNATION:
e. Title of obligation has been lost
a. Existence of valid debt
b. Consignation was made because of some

legal cause - previous valid tender was TENDER OF PAYMENT DISTINGUISHED
FROM CONSIGNATION
unjustly refused or circumstances
TENDER OF CONSIGNATION
making previous tender exempt PAYMENT

401
antecedent act; principal act; ii. Indirectly – caused as when debtor is
preparatory produces the effects required to enter a military draft
of payment
extrajudicial judicial
EFFECT OF LOSS IN OBLIGATION TO

========================================= DELIVER A SPECIFIC THING
E. EXTINGUISHMENT OF GENERAL RULE: Loss shall extinguish the

OBLIGATIONS obligation
2. Loss of determinate thing due or EXCEPTIONS:
impossibility or difficulty of a. If by law the obligor is liable even for

performance fortuitous event
========================================= b. If by stipulation the obligor is liable even

for fortuitous event
2. LOSS OF DETERMINATE THING OR
IMPOSSIBILITY OR DIFFICULTY OF c. If the nature of the obligation requires the
PERFORMANCE assumption of the risk
d. If the loss of the thing occurs after the

LOSS OF THE THING DUE: partial or total/ obligor incurred in delay
includes impossibility of performance
e. If the loss of the thing occurs after the
obligor incurred delay
WHEN IS THERE A LOSS f. If the obligor promised to deliver the same

thing to two or more persons who do not
a. When the object perishes (physically) have the same interest
b. When it goes out of commerce g. IF the obligation is generic, unless the

object is a particular class or group with
c. When it disappears in such a way that: specific or determinate qualities
its existence is unknown or it cannot be
recovered
OBLIGATION TO DELIVER A GENERIC THING
GENERAL RULE: Not extinguished
WHEN IS THERE IMPOSSIBILITY OF EXCEPTIONS:

PERFORMANCE:
a. If the generic thing is delimited
a. Physical impossibility
b. If the generic thing has already been
b. Legal impossibility segregated
i. Directly – caused as when prohibited c. Monetary obligation

by law

401
EFFECT OF IMPOSSIBILITY OF performance; Obligor may be released in whole
PERFROMANCE IN OBLIGATION TO DO or in part based on this ground
GENERAL RULE: Debtor is released when REQUISITES:

prestation becomes legally or physically
impossible without fault on part of debtor A. The event or change could not have been
foreseen at the time of the execution of the
contract
EFFECT OF PARTIAL LOSS B. The performance is extremely difficult, but

not impossible (because if it is impossible, it is
a. When loss is significant – may be extinguished by impossibility)
enough to extinguish obligation
C. The event was not due to the act of any of the
b. When loss insignificant – not enough to parties
extinguish obligation
D. The contract is for a future prestation
NOTE:
==========================================
• Judicial determination of extent is TOPICS UNDER THE SYLLABUS
necessary
• Doctrine of Unforeseen Events: The
OBLIGATIONS
court is authorized to release the obligor,
in whole or in part, when the service has
3. Condonation or Remission of Debt
become so difficult as to be manifestly
beyond the contemplation of the parties. =========================================
• Doctrine of Subjective Impossibility: 3. CONDONATION OR REMISSION OF DEBT

The obligation undoubtedly becomes
impossible if there is no physical or legal
loss but the object obligation belongs to CONDONATION/REMISSION OF THE DEBT –
another person; the obligor must gratuitous abandonment of debt; right to
indemnify the obligee for the damages claim; donation; rules of donation applies;
suffered by the latter. express or implied
WHEN THING IS LOST IN THE POSSESSION REQUISITES:

OF THE DEBTOR
a. There must be an agreement
Presumption: Loss due to debtor’s fault
(disputable) b. There must be a subject matter (object
of the remission, otherwise there would
Exception: natural calamity, earthquake, flood, be nothing to condone)
storm
c. Cause of consideration must be liberality
(Essentially gratuitous, an act of
liberality )
REBUS SIC STANTIBUS: agreement is valid
only if the same conditions prevailing at time of
contracting continue to exist at the time of

401
a.
d. Parties must be capacitated and must If
consent; requires acceptance by obligor; in hands of joint debtor – only his share is
implied in mortis causa and expressed condoned
inter vivos
b. If in hands of solidary debtor - whole
e. Formalities of a donation are required in debt is condoned
the case of an express remission
c. Tacit – voluntary destruction of
f. Revocable – subject to rule on inofficious instrument by creditor; made to prescribe w/o
donation ( excessive, legitime is demanding
impaired ) and ingratitude and condition
not followed ==========================================
g. Obligation remitted must have been TOPICS UNDER THE SYLLABUS
demandable at the time of remission
h. Waivers or remission are not to be OBLIGATIONS
presumed generally
4. Confusion or Merger
=========================================
FORMS EXTENT KINDS
4. CONFUSION OR MERGER
a. Express – a. Total a. Principal –
formalities of accessory also
donation condoned
CONFUSION OR MERGER: – character of
debtor and creditor is merged in same person
with respect to same obligation
b. Implied – b. Partial b. Accessory –
conduct is principal still
sufficient outstanding
REQUISITES:
c. Accessory
a. It must take place between principal
obligation of pledge
debtor and principal creditor only
– condoned;
presumption only, b. Merger must be clear and definite
rebuttable
c. The obligation involved must be same and
identical – one obligation only
REQUISITES OF IMPLIED CONDONATION
d. Revocable, if reason for confusion
1. Voluntary delivery – presumption; when ceases, the obligation is revived
evidence of indebtedness is w/ debtor –
presumed voluntarily delivery by creditor;
=========================================
rebuttable
2. Effect of delivery of evidence of TOPICS UNDER THE SYLLABUS

indebtedness is conclusion that debt is
condoned – already conclusion; voluntary
delivery of private document OBLIGATIONS
5. Compensation

401
========================================= d. Judicial – set off; upon order of the
court; needs pleading and proof; all
5. COMPENSATION requirements must concur except
liquidation
COMPENSATION: Set off; it is a mode of e. Total – when 2 debts are of the same
extinguishment to the concurrent amount the amount
obligation of persons who are in their own right
reciprocally debtors or creditors f. Partial – when 2 debts are not of the
same amount
REQUISITES:
a. Both parties must be mutually creditors

and debtors - in their own right and as EFFECT OF ASSIGNMENT OF CREDIT TO 3RD
principals PERSON; CAN THERE STILL BE
COMPENSATION
b. Both debts must consist in sum of money
or if consumable , of the same kind or a. If made after compensation took place –
quality no effect; compensation already
perfected
c. Both debts are due
b. If made before compensation took place
d. Both debts are liquidated and – depends
demandable (determined)
i. With consent of debtor – debtor is
e. Neither debt must be retained in a estopped unless he reserves his right
controversy commenced by 3rd person and gave notice to assignee
and communicated w/ debtor (neither
debt is garnished) ii. With knowledge but w/o consent of
debtor – compensation may be set
up as to debts maturing prior to
1. Kinds OF COMPENSATION assignment
a. Legal – by operation of law; as long as 5
requisites concur- even if unknown to iii. W/o knowledge – compensation may
parties and if payable in diff places; be set-up on all debts prior to his
indemnity for expense of exchanges; knowledge
even if not equal debts – only up to
concurring amount
COMPENSATION DISTINGUISHED FROM
b. Conventional – agreement of parties is CONFUSION
enough, forget other requirement as COMPENSATION CONFUSION
long as both consented 2 persons; each is a only 1 person who is
debtor and creditor of creditor and debtor
c. Facultative – one party has choice of each other of himself
claiming/opposing one who has benefit 2 obligations one obligation
of period may choose to compensate: indirect payment impossibility of
payment
i. Not all requisites are present
ii. Depositum; commodatum; PAYMENT
criminal offense; claim for future COMPENSATION PAYMENT
support; taxes capacity not capacity to dispose and
necessary capacity to receive
required

401
•
may be partial must be complete C
performance performance hanging object or principal conditions
Simpler
more guarantee and • Substituting person of debtor
less risk
may take place by involves action or • Subrogating 3rd person in right of creditor
operation of law delivery of the amount
paid
REQUISITES:
a.Valid obligation
COUNTERCLAIM b. Intent to extinguish old obligation –
COMPENSATION COUNTERCLAIM expressed or implied:
takes place by operation must be pleaded completely/substantially incompatible old
of law and extinguishes to be effectual and new obligation on every point
reciprocally 2 claims as
soon as they exist c.Capacity and consent of parties to the new
simultaneously to the obligation
concurrent amounts
d. Valid new obligation
2. Obligations Not Compensable

• When one of the debts arises from a
depositum or from the obligations of a EFFECTS OF NOVATION:
depositary or of a baliee in
commodatum. (Art. 1287) a. Extinguishment of principal carries
accessory, except:
• Against a creditor who has a claim for
i. Stipulation to contrary
support due by gratuitous title, without
prejudice to Article 301 par. 2 (Article
ii. Stipulation pour autrui unless
1287)
beneficiary consents
• If one of the debts consists in civil iii. Modificatory novation only; obliged
liability arising from a penal offense. to w/c is less onerous
(Art. 1288)
iv. Old obligation is void
========================================= b. Old obligation subsists if new obligation is

void or voidable but annulled already
TOPICS UNDER THE SYLLABUS (except: intention of parties)
E. EXTINGUISHMENT OF c. If old obligation has condition

OBLIGATIONS
i. If Resolutory and it occurred – old
5. Novation obligation already extinguished; no
new obligation since nothing to
========================================= novate
5. NOVATION ii. If Suspensive and it never occurred

NOVATION: Extinguishment of obligation by –as if no obligation; also nothing to
creating/ substituting a new one in its place novate

401
d. If old obligation has condition, must be 1. Delegante – old debtor
compatible with the new obligation; if new is
w/o condition – deemed attached to new 2. Delegatario - creditor
e. If new obligation has condition 3. Delegado – new debtor
i. If resolutory: valid
ii. If suspensive and did not

materialize: old obligation is enforced EXPROMISION DISTINGUISHED FROM
DELEGACION
EXPROMISIO DELEGACION
N
KINDS OF NOVATION: Intention: old debtor be released from the
obligation
1. REAL/OBJECTIVE – change object, Consent of creditor may be express or tacit
cause/consideration or principal condition but not presumed by acceptance of
payment from third person
Donation cannot be presumed
consent of consent of debtor
2. PERSONAL/SUBJECTIVE creditor and (initiates), creditor and
third person third person; need not be
i. Substituting person of debtor given simultaneously
(passive) governed by same applies in the
the rules of absence of an agreement
payment by by old and new debtors
third persons
• EXPROMISION: initiative is if w/o subrogation
knowledge of
from 3 person or new debtor;
rd
debtor,
new debtor and creditor to beneficial
consent; old debtor released reimbursement
from obligation; subject to full , no
reimbursement and subrogation subrogation
if made w/ consent of old new debtor's same unless new debtor is
debtor; if w/o consent or against insolvency known to the public as
does not make insolvent or old debtor
will , only beneficial
old debtor knows of such insolvency
reimbursement; if new debtor is liable at the time of delegacion
insolvent, not responsible since creditor may not recover
w/o his consent from old debtor if he
knows of such insolvency
of the new debtor
quite rare delegante (old)
• DELEGACION: initiative of old delegado (new)
debtor; all parties to consent; delegatario (creditor)
full reimbursement; if insolvent
new debtor – not responsible old
ii. Subrogating 3rd person to rights of creditor
debtor because obligation
( active )
extinguished by valid novation
unless: insolvency already 1. Conventional - agreement and consent of all
existing and of public knowledge parties; clearly established
or know to him at time of
delegacion

401
2.
Legal - takes place by operation of law; no need 3rd person has no new debtor is obliged to
for consent; not presumed except obligation to pay pay
as provided for in law: if insolvent
PRESUMED WHEN -
• Creditor pays another preferred creditor

even w/o debtor’s knowledge
CONVENTIONAL SUBROGATION
• 3rd person not interested in obligation pays DISTINGUISHED FROM ASSIGNMENT OF
w/ approval of debtor RIGHTS
• Person interested in fulfillment of obligation CONVENTIONA ASSIGNMENT OF RIGHTS

pays debt even w/o knowledge of debtor L
SUBROGATION
Governed by Governed by Arts. 1624 to

Arts. 1300-1304 1627
debtor’s consent debtor’s consent is not

is required required
extinguishes the transmission of right of the

obligation and creditor to third person
gives rise to a without modifying or
new one extinguishing the obligation
defects and vices defects and vices in the old

in the old obligation and not cured
obligation are
DIFFERENCE FROM PAYMENT BY 3rd cured
PERSON vs CHANGE OF DEBTOR
takes effect upon as far as the debtor is
DIFFERENCE CHANGE OF DEBTOR moment of concerned, takes effect
FROM novation or upon notification
PAYMENT BY subrogation
3RD PERSON
debtor is not debtor is released

necessarily
released from ================================
debt
can be done w/o needs consent of creditor

consent of
creditor – express or implied
one obligation two obligations; one is

extinguished and new one
created

401
CONTRACTS (2) Pactum de non alienando (Art.
2130)
(3) Pactum leonine (Art. 1799)
================================
TOPICS UNDER THE SYLLABUS 7. Effect of contracts (Art. 1311)
A. GENERAL PROVISIONS =========================================

1. Essential Requisites (Art. 1261)
2. Kinds of Contracts
A. Consensual
B. Real 1. Essential Requisites
C. Formal or solemn
C.1. Donations (Arts. 748-749) =========================================
C.2. Partnership where real
1. ESSENTIAL REQUISITES
property contributed (Arts. 1771,
1773)
C.3. Antichresis (Art. 2134) ESSENTIAL ELEMENTS:
C.4. Agency to sell real property
1. Consent
or an interest therein (Art. 1874)
C.5. Stipulation to charge interest 2. Subject Matter
(Art. 1956)
C.6. Stipulation limiting common 3. Consideration
carrier’s duty of extraordinary

diligence to ordinary diligence
(Art. 1744) A. CONSENT
C.7. Chattel mortgage CONSENT – meeting of minds between parties
C.8. Sale of large cattle on subject matter and cause of contract;
concurrence of offer and acceptance
3. Formality (Arts. 1356, 1357, 1358)
4. Reformation of Contracts
5. Interpretation of Contracts REQUIREMENTS:
6. Defective Contracts
A. Rescissible contracts (Art. 1381) 1. Must be manifested by the concurrence of
the offer and payment;
A.1. Difference with rescission
(resolution) under Art. 1191 2. Parties are legally capacitate to enter into
B. Voidable contracts (Arts. 1328- contracts
1344, 1390-1402)
3. Consent must be intelligent, free,
C. Unenforceable contracts (Arts.
spontaneous, and real
1403-1408, 1317)
D. Void contracts (Arts. 1409, 1346)
(1) Pactum commissorium (Arts.
AUTO CONTRACTS - made by a person acting
2088, 2130, 1390) in another’s name in one capacity

401
4.
S
COLLECTIVE CONTRACTS - will of majority ubject matter becomes illegal or impossible
binds a minority to an agreement before acceptance is communicated
notwithstanding the opposition of the latter
ACCEPTANCE - manifestation by the offeree of

CONTRACTS OF ADHESION - one party has his assent to the terms of the offer; must be
already a prepared form of a contract, absolute
containing the stipulations he desires, and he
simply asks the other party to agree to them if
he wants to enter into the contract
NOTE: A qualified acceptance constitutes
counter-offer
NOTE: We follow the theory of cognition and not

the theory of manifestation.
PERIOD FOR ACCEPTANCE
1. Stated fixed period in the offer

Under our Civil Law, the offer and acceptance
concur only when the offeror comes to know, 2. No stated fixed period
and not when the offeree merely manifests his
a. Offer is made to a person present –
acceptance.
acceptance must be made immediately
b. Offer is made to a person absent –

OFFER – a proposal made by one party to acceptance may be made within such
another to enter into a contract; must be certain time that, under normal circumstances,
or definite, complete and intentional an answer can be received from him
NOTE: Acceptance may be revoked before it

comes to the knowledge of the offeror.
ELEMENTS OF VALID OFFER / ELEMENTS OF (withdrawal of offer)
VALID ACCEPTANCE
AMPLIFIED ACCEPTANCE
1. Definite--unequivocal
Under certain circumstances, a mere
2. Complete--unconditional
amplification on the offer must be understood as
an acceptance of the original offer, plus a new
3. Intentional
offer, which is contained in the amplification.
RULE ON COMPLEX OFFERS

WHEN OFFER BECOMES INEFFECTIVE:
1. Offers are interrelated – contract is
1. Death, civil interdiction, insanity or
perfected if all the offers are accepted
insolvency of either party before acceptance
is conveyed 2. Offers are not interrelated – single
acceptance of each offer results in a
2. Express or implied revocation of the offer by
perfected contract unless the offeror has
the offeree
made it clear that one is dependent upon
3. Qualified or conditional acceptance of the the other and acceptance of both is
offer, which becomes a counter-offer necessary.

401
transactions under the Code of Commerce use
• Offer inter praesentes must be the Manifestation Theory.
accepted IMMEDIATELY. If the parties
intended that there should be an express
acceptance, the contract will be
perfected only upon knowledge by the When the offeror refuses to open the letter or
offeror of the express acceptance by the telegram he is held to have a constructive notice
offeree of the offer. An acceptance which of the contents thereof and will be bound by the
is not made in the manner prescribe by acceptance of the offeree. (Jurado citing Castan)
the offeror is NOT EFFECTIVE, BUT A
COUNTER-OFFER which the offeror may
accept or reject. Malbarosa v. CA,
OPTION: option may be withdrawn anytime
[G.R. No. 125761, April 30, 2003]
before acceptance is communicated but not
when supported by a consideration other than
purchase price: option money
RULE ON ADVERTISEMENTS AS OFFERS
EFFECTS OF OPTION:
Business advertisements – Not a definite
offer, but mere invitation to make an offer, • NOT supported by independent
unless it appears otherwise consideration – the offeror can withdraw
the privilege at any time by
communicating the withdrawal before
acceptance
Advertisement for Bidders – only invitation to
make proposals and advertiser is not bound to • Supported by independent consideration
accept the highest or lowest bidder, unless – the offeror cannot withdraw his offer
appears otherwise
PERSONS WHO CANNOT GIVE CONSENT TO

THE 4 THEORIES IN ACCEPTANCE OF OFFER A CONTRACT:
BY TELEGRAM OR LETTER
1. Minors
1. Manifestation – perfected from the moment
the acceptance is declared or made 2. Insane or demented persons, unless the
contract was entered into during a lucid
2. Expedition – perfected from the moment the interval
offeree transmits the notification of acceptance
3. Illiterates/ deaf-mutes who do not know
3. Reception – perfected from the moment the how to write
offeror receives the letter
4. Intoxicated and under hypnotic spell
4. Cognition – perfected from the moment the
acceptance comes to the knowledge of the 5. Art 1331 - person under mistake; mistake
offeror may deprive intelligence
6. Art 1338 - person induced by fraud (dolo

causante)
NOTE: Contracts under the Civil Code generally
adhere to the Cognition Theory while NOTE: Dolus bonus (usual exaggerations in
trade) are not in themselves fraudulent

401
manage their property, becoming an easy prey
for deceit and exploitation (Rule 92, Sec.2, Rules
RULE ON CONTRACTS ENTERED INTO BY of Court)
MINORS
GENERAL RULE: VOIDABLE
EXCEPTIONS:
a. Upon reaching age of majority – they

ratify the same INCAPACITY DISTINGUISHED FROM
DISQUALIFICATION
b. They were entered unto by a guardian
and the court having jurisdiction had INCAPACITY DISQUALIFICATION
approved the same
Restrains the Restrains the very right
c. They were contracts for necessities exercise of the right itself
such as food, but here the persons who to contract
are bound to give them support should
May still enter into Absolutely disqualified
pay therefor
contract through
d. Minor is estopped and cannot be parent, guardian or
absolved from the contract they legal representative
entered into for having
Based upon Based upon public
misrepresented his age and misled
subjective policy and morality
the other party through his active
circumstance of
misrepresentation. Mercado vs.
certain person
Espiritu, [37 Phil 215] HOWEVER,
minors can set up the defense of Contracts entered Contracts entered into
minority to resist the claim when there into are merely are void
is only passive misrepresentation, as voidable
they did not disclose their minority
because they had no juridical duty to
disclose their inability. (Braganza vs.
CAUSES WHICH VITIATE FREEDOM
De Villa Abrille, [105 Phil 456]
1. Violence
DISQUALIFIED TO ENTER INTO CONTRACTS: • REQUISITES

(contracts entered into are void)
a. Irresistible physical force
1. Those under civil interdiction
b. Such force is the determining cause for
2. Hospitalized lepers giving consent
3. Prodigals
4. Deaf and dumb who are unable to read 2. Intimidation

and write
• REQUISITES:
5. Those who by reason of age, disease,
weak mind and other similar causes, cannot b. Determining cause for the contract
without outside aid, take care of themselves and
c. Threatened act is unjust and unlawful

401
o
d. Real and serious C
ausal Fraud (Dolo Causante)- Fraud in the
e. Produces a well grounded fear that the PERFECTION of the contract
person making it will carry it over
• Deception of serious character, without
Reluctant consent – a contract is valid which the other party would not have
even though one of the parties entered entered into
into it against his wishes and desires or
even against his better judgment. • It is the cause which induces the party to
Contracts are also valid even though enter into a contract
they are entered into by one of the
parties without hope of advantage or • Renders the contract voidable. Insidious
profit. Martinez vs. Hongkong and words or machinations are employed
Shanghai Bank, [15 Phil 252]
• Not employed by both or by third person
• Ground for annulment

3. Mistake
• Not only wrong conception of the thing

but also the lack of knowledge with o Incidental Fraud (Dolo Incidente)- Fraud
respect to it (Manresa) in the PERFORMANCE of an obligation
• Deception which are not serious and

without which the other party would still
Two General Kinds of Mistake: have entered into the contract
a.Mistake of Fact – when one or both of • It is not the cause which induced the
the contracting parties believe that a fact party to enter into a contract
exist when in reality it does not, or that such
fact does not exist when in reality it does • Renders the party liable for damages
b. 5. Undue influence
Mistake of Law
• When a person takes improper
General Rule: Mistake does not vitiate advantage of his power over the will of
consent another, depriving the latter of a
reasonable freedom of choice
Exception: Mutual error as to the effect of
an agreement when the real purpose of the
parties is frustrated
SIMULATED CONTRACTS
1. Absolute – no intention to be bound at

4. Fraud all, fictitious only – void from beginning
• When, through insidious words or 2. Relative – there is intention to be

machinations of 1 of the contracting bound but concealed; concealed contract
parties, the other is induced to enter into binds:
a contract which, without them, he would
not have agreed to. c. No prejudice to 3rd persons
KINDS: d. Not contrary to law, morals, etc.

401
2.
In
WANT OF EFFECT
transmissible rights
CAUSE
3. Future inheritance, except in cases expressly
ABSENCE Void - produce no legal effect
authorized by law
OF CAUSA
ILLEGALITY Void - produce no legal effect 4. Services which are contrary to law, morals,
OF CAUSA good customs, public order or public policy
FALSITY OF Voidable – party must prove 5. Impossible things or services

CAUSA that cause is untruthful;
6. Objects which are not possible of
presumption of validity but
determination as to their kind
rebuttable
CAUSA NOT Presumed to Exist - burden of

STATED IN proof is on the person
C. CAUSE (CAUSA)
CONTRACT assailing its existence
CAUSA- Immediate, direct and most proximate
INADEQUAC Does not Invalidate Contract
reason why parties enter into contract
Y OF CAUSA per se
REQUISITES:
Exceptions:
1. It must exist
* Fraud
* Mistake
2. It must be true
* Undue influence
* Cases specified by law
- contracts entered when 3. It must be licit
ward suffers lesion of more
than 25%
MOTIVE:
B. OBJECT
Purely private reason; illegality does not
REQUISITES:
invalidate contract except when it
1. Within the commerce of man – either predetermines purpose of contract; when
existing or in potency merged into one
2. Licit or not contrary to law, good customs
3. Possible CAUSE DISTINGUISHED FROM MOTIVE
4. Determinate as to its kind or determinable CAUSE MOTIVE

w/o need to enter into a new contract
Direct and most Indirect or remote
5. Transmissible proximate reason of a reasons
contract
Objective and juridical Psychological or purely

THINGS WHICH CANNOT BE THE OBJECT OF reason of contract personal reason
CONTRACT:
Cause us always same The motive differs for
1. Things which are outside the commerce of for each contracting each contracting party
men party
Legality or illegality of Legality or illegality of

401
cause affects the A
motive does not affect
existence or validity of contract is a meeting of minds between two
the existence or
the contract persons whereby one binds himself, with respect
validity of contract
to the other, to give something or to render
some service
CAUSA IN SOME CONTRACTS:
1. Onerous contracts – the prestation of

promise of a thing or service by the other
CONTRACT DISTINGUISHED FROM
2. Remuneratory contracts – the service or OBLIGATION
benefit remunerated
CONTRACT OBLIGATION
3. Pure Beneficence – mere liberality of the
One of the sources of Legal tie or relation
donor or benefactor
obligations itself
4. Accessory – identical with cause of principal
There must be an There need not be a
contract, the loan which it derived its life
obligation contract
and existence (ex: mortgage or pledge)
Want of Cause - There is a total lack or CONTRACT DISTINGUISHED FROM

absence of cause AGREEMENT
CONTRACT AGREEMENT
Illegal Cause – The cause is contrary to law, Agreements Cannot be enforced
morals, good customs, public order and public enforceable through by action in courts of
policy legal proceedings justice
Should have all the Need not have all

requisites of a contract the requisites
False Cause – The cause is stated but it is not
true There must be an There need not be a
agreement contract
Moral Obligation as Cause

A. PRINCIPAL CHARACTERISTICS:
• Where the moral obligation arises wholly
from ethical considerations, unconnected with 1. Autonomy of wills – parties may
any civil obligations, it cannot constitute a stipulate anything as long as not illegal,
sufficient cause or consideration to support an immoral, etc.
onerous contract. Fisher vs. Robb [69 Phil
101] 2. Mutuality – performance or validity
binds both parties; not left to will of one of
 Where such moral obligation is based upon a parties
previous civil obligation which has already been
3. Obligatory Force and Consensuality
barred by the statute of limitations at the time
– parties are bound from perfection of
when the contract is entered into, it constitutes
contract; contracts are perfected by mere
a sufficient cause or consideration to support a
consent and from that moment the parties
contract Villaroel vs. Estrada 71 Phil 14]
are bound not only to the fulfillment of what

401
has been expressly stipulated but also to all contract are bound thereby, subject to the
consequences which, according to their provisions of the Mortgage Law and the Land
nature may be in keeping with good faith, Registration Laws
usage and law.
4. Fulfill what has been expressly

stipulated D. REQUISITES:
5. All consequences w/c may be in keeping 1. Existence of a valid contract

with good faith, usage and law
2. Knowledge of the contract by a 3rd person
6. Relativity – binding only between the
3. Interference by the 3rd person
parties, their assigns, heirs; strangers cannot
demand enforcement
E. TEST OF BENFICIAL SITUATION
• The fairest to determine whether the

B. EXCEPTION TO RELATIVITY:
interest of 3rd person in a contract is a
1. Accion Pauliana stipulation pour autrui or merely an
incidental interest is to rely upon the
2. Accion directa intention of the parties as disclosed by
their contract. Determine whether
3. Stipulation pour autrui contracting parties desired to tender him
such interest Uy Tam vs. Leonard, [30
Phil 471]
C. REQUISITES OF STIPULATION POUR =========================================

AUTRUI
1. Parties must have clearly and
deliberately conferred a favor upon a 3rd person A. GENERAL PROVISIONS
2. The stipulation in favor of a 3rd person
2. Kinds of Contracts
should be a part of, not the whole contract
=========================================
3. That the favorable stipulation should not
be conditioned or compensated by any kind of
2. KINDS OF CONTRACTS
obligation whatsoever
1. As to perfection or formation
4. Neither of the contracting parties bears
the legal representation or authorization of 3rd α. Consensual – perfected by agreement
party of parties
5. The third person communicates his β. Real – perfected by delivery (e.g.

acceptance before revocation by the original commodatum, pledge, deposit)
parties
χ. Formal/solemn – perfected by
6. Art 1312; Art 1314 conformity to essential formalities
(donation )
2. As to cause
In contracts creating real rights, third persons
who come into possession of the object of the

401
8.
A
a. Onerous – with valuable consideration
s to the risk involved
b. Gratuitous – founded on liberality
a. Commutative – example lease
c. Remunerative – prestation is given for
b. Aleatory – example insurance
service previously rendered not as
obligation 9. As to name or designation
3. As to importance or dependence of one a. Nominate – those which have their own

upon another distinctive individuality and are
regulated by special provisions of law
α. Principal – contract may stand alone
b. Innominate – those which lack
β. Accessory – depends on another individuality and are not regulated by
contract for its existence; may not exist special provisions of law
on its own
a aa Do ut des – I give that you
χ. Preparatory – not an end by itself; a
means through which future contracts aaaa Do ut facias – I give that you may do
may be made
aVa Facio ut des – I do that you may give
4. As to parties obliged
Va Facio ut facias – I do that you may do
a. Unilateral – only one of the parties has
an obligations
b. Bilateral – both parties are required to NOTE: According to some authorities, do ut des
render reciprocal prestations is no longer an innominate contract. It has
already been given a name of its own, i.e. barter
5. As to form or exchange. (Art. 1638)
a. Common or informal – require no

STAGES IN A CONTRACT:
particular form
1. Preparation - negotiation
b. Special or formal – require some
particular 2. Perfection/birth
Form 3. Consummation – performance
6. As to their purpose
a. Transfer of ownership FORMAL CONTRACTS
b. Conveyance of use 1. Donation
c. Rendition of service • The donation of a movable may be made

orally or in writing (Article 748)
7. As to their subject matter
• An oral donation requires the
a. Things simultaneous delivery of the thing or of
the document representing the right
b. Services donated. (Article 748)

401
4.
• If the value of the personal property A
donated exceeds five thousand pesos, gency to Sell Real Property
the donation and the acceptance shall be
• When a sale of a piece of land or any
made in writing. Otherwise, the donation
interest therein is through an agent, the
shall be void. (Article 748)
authority of the latter shall be in writing;
• In order that the donation of an otherwise, the sale shall be void. (Article
immovable may be valid, it must be 1874)
made in a public document, specifying
therein the property donated and the
value of the charges which the donee
5. Interest
must satisfy. (Article 749)
• No interest shall be due unless it has
• The acceptance may be made in the
been expressly stipulated in writing
same deed of donation or in a separate
(Article 1876)
public document, but it shall not take
effect unless it is done during the
lifetime of the donor. (Article 749)
6. Ordinary Diligence
• If the acceptance is made in a separate
instrument, the donor shall be notified • A stipulation between the common
thereof in an authentic form, and this carrier and the shipper or owner limiting
step shall be noted in both instruments. the liability of the former for the loss,
(Article 749) destruction, or deterioration of the goods
to a degree less than extraordinary
diligence shall be valid, provided it be:
2. Partnership
o In writing, signed by the shipper
or owner;
• A partnership may be constituted in any
form, except where immovable property o Supported by a valuable
or real rights are contributed thereto, in consideration other than the
which case a public instrument shall be service rendered by the common
necessary. (Article 1771) carrier; and
• A contract of partnership is void, o Reasonable, just and not contrary

whenever immovable property is to public policy. (Article 1744)
contributed thereto, if an inventory of
said property is not made, signed by the
parties, and attached to the public
instrument. (Article 1773) 7. Chattel Mortgage
• By a chattel mortgage, personal property

is recorded in the Chattel Mortgage
3. Antichresis Register as a security for the
performance of an obligation. If the
• The amount of the principal and of the movable, instead of being recorded, is
interest shall be specified in writing; delivered to the creditor or a third
otherwise, the contract of antichresis person, the contract is a pledge and not
shall be void a chattel mortgage.

401
8. •
Sale of Large Cattle G
ENERAL RULE: contract is valid and binding
• The form of sale of large cattle shall be in whatever form provided that 3 essential
governed by special laws. (Article 1581) requisites concur
• EXCEPTIONS
=========================================
a. Law requires contract to be in some
TOPICS UNDER THE SYLLABUS form for validity - donation and
acceptance of real property
b. Law requires contract to be in some
3. Formality form to be enforceable - Statute of
Frauds; contract is valid but right to
========================================= enforce cannot be exercised; need
ratification to be enforceable
3. FORM OF CONTRACTS
c. Law requires contract to be in some
form for convenience - contract is valid
FORM: in some kind of contracts only as and enforceable, needed only to bind
contracts are generally consensual; form is a 3rd parties
manner in which a contract is executed or
manifested Ex: public documents needed for the ff:
1. Informal – may be entered into whatever i. Contracts w/c object is creation,

form as long as there is consent, object and transmission or reformation of real
cause rights over immovables
2. Formal – required by law to be in certain ii. Cession, repudiation, renunciation

specified form such as: donation of real of hereditary rights/CPG
property, stipulation to pay interest, transfer
iii. Power to administer property for
of large cattle, sale of land thru agent,
another
contract of antichresis, contract of
partnership, registration of chattel iv. Cession of action of rights
mortgage, donation of personal prop in proceeding from an act appearing
excess of 5,000 in a public inst.
3. Real – creation of real rights over v. All other docs where amount
immovable prop must be written involved is in excess of 500 (must
be written even private docs )
WHEN FORM IS IMPORTANT:

NOTE: RA 8792 (E-COMMERCE ACT) – formal
1. For validity (formal/solemn contracts)
requirements to make contracts effective as
2. For enforceability (statute of frauds) against third persons and to establish the
existence of a contract are deemed complied
3. For convenience with provided that the electronic document is
unaltered and can be authenticated as to be
useable for future reference.

401
========================================= Requisites:
TOPICS UNDER THE SYLLABUS a.There is a written instrument
A. GENERAL PROVISIONS b. There is meeting of minds
4. Reformation of Instruments c.True intention not expressed in instrument
========================================= d. Clear and convincing proof
e.Facts put in issue in pleadings
4. REFORMATION OF INSTRUMENTS
NOTE:
REFORMATION OF CONTRACTS: remedy to • Prescribes in 10 years from date of

conform to real intention of parties due to execution of instrument
mistake, fraud, inequitable conduct, accident
• When one of the parties has brought an
action to enforce the instrument, no subsequent
reformation can be asked. (principle of estoppel)
CAUSES/GROUNDS:
• Reformation is based on justice and equity
1. Mutual: instrument includes something w/c
should not be there or omit what should be • When there is no meeting of the minds, the
there proper remedy is annulment and not
reformation
a. Mutual
b. Mistake of fact
WHEN REFORMATION NOT AVAILABLE:
c. Clear and convincing proof
1. Simple donation inter vivos
d. Causes failure of instrument to express
true intention 2. Wills
2. Unilateral 3. When real agreement is void
a. One party was mistaken 4. Estoppel when party has brought suit to
enforce it
b. Other either acted fraudulently or
inequitably or knew but concealed
c. Party in good faith may ask for =========================================

reformation
3. Mistake by 3rd persons – due to ignorance,
lack of skill, negligence, bad faith of drafter, A. GENERAL PROVISIONS
clerk or typist
5. Interpretation of Contracts
4. Others specified by law – to avoid
frustration of true intent =========================================

401
5. INTERPRETATION OF CONTRACTS =========================================
GENERAL RULE: If the terms of the contract TOPICS UNDER THE SYLLABUS
are clear and leave no doubt upon the intention
of the contracting parties, the literal meaning of A. GENERAL PROVISIONS
its stipulations shall control. (Art. 1370)
EXCEPTION: It is alleged and proved that the 6. Defective Contracts

intention of the parties is otherwise.
=========================================
Sec. 13 Rule 130 of the Rules of Court:
“When an instrument consists partly of written 6. DEFECTIVE CONTRACTS
words and partly of a printed form, and the two
are inconsistent, the former controls the latter.”
KINDS OF DEFECTIVE CONTRACTS:
NOTE:
1. If the law is clear, there is no room for
interpretation
2. In case of ambiguity, the most important
A. RESCISSIBLE CONTRACTS
guideline is intention of the parties.
3. Ambiguity is construed against the one who
caused it because he had control (e.g. contract RESCISSIBLE CONTRACTS - Those which have
of adhesion). However, this rule does not apply caused a particular economic damage either to
to all contracts of adhesion (e.g. if contract is one of the parties or to a 3rd person and which
negotiated) may be set aside even if valid. It may be set
4. In order to judge the intention of the aside in whole or in part, to the extent of the
contracting parties, their contemporaneous and damage caused
subsequent acts shall be principally considered.
(Art. 1371)
5. Words which may have different significations
shall be understood in that which is most in
REQUISITES:
keeping with the nature and object of the
contract. (Art. 1375)
(a) Contract must be rescissible
6. The interpretation of obscure words or
stipulations in a contract shall not favor the
Under Art 1381: Contracts entered into by
party who caused the obscurity. (Art. 1377)
7. If the court cannot resolve the ambiguity persons exercising fiduciary capacity:
based on the elements of the contract:
a. If a gratuitous contract, the least 1. Entered into by guardian whenever ward
transmission of rights and interests shall suffers damage by more than 1/4 of value of
prevail object
b. If an onerous contract, doubt shall be
settled in favor of the greatest 2. Agreed upon in representation of absentees,
reciprocity of interest if absentee suffers lesion by more than ¼ of
8. The principles of interpretation stated in Rule value of property
123 of the Rules of Court shall likewise be
observed in the construction of contracts
3. Contracts where rescission is based on fraud
In the case of Felipe v. Heirs of Maximo committed on creditor (accion pauliana)
Aldon [G.R. No. L-60174, February 16,
1983], the Court stated that the description 4. Objects of litigation; contract entered into by
that a contract is “invalid” is no longer precise, defendant w/o knowledge or approval of
since the Civil Code uses specific names in litigants or judicial authority
designating defective contract (e.g. rescissible,
voidable, unenforceable, and void or inexistent 5. Provided for by law – Arts 1526, 1534, 1539,
contracts) 1542, 1556, 1560, 1567 and 1659

401
• Art. 1526 – Unpaid seller of goods, • Art. 1567 – In cases of breach of
notwithstanding that the ownership warranty against hidden defects of
in the goods may have passed to the or encumbrances upon the thing sold
buyer, subject to other provisions on
Sales • Art. 1658 – If the lessor or lessee
should not comply with their
• Art. 1534 – Unpaid seller having the obligations, the aggrieved party
right of lien or having stopped the may ask for rescission
goods in transit, where he expressly
reserved his right to do so in case
the buyer should make default, or
ART 1191 COMPARED TO ART 1381
the buyer has been in default in
the payment of the price for an
RESCISSION IN RESCISSION
unreasonable time
ART 1191 PROPER IN ART
1381
• Art. 1539 – In the sale of real estate
at a rate of a certain price for a unit It is a principal it is a subsidiary
of measure or number, at the will of action retaliatory in remedy
the vendee, when the inferior value character
of the thing sold exceeds one-
tenth of the price agreed upon, or if Only ground is non- There are 5 grounds
the vendee would not have bought performance of to rescind. Non-
the immovable had he known of one’s obligation or performance by the
its smaller area or inferior quality what is incumbent other is not important
upon him
• Art. 1542 – In the sale of real estate,
made for a lump sum, where the Applies only to Applies to both
boundaries are mentioned and the reciprocal unilateral and
area or number within the obligation reciprocal obligations
boundaries exceed that specified in
Only a party to the Even a third person
the contract, when the vendee does
contract may who is prejudiced by
not accede to the failure to
demand fulfillment the contract may
deliver what has been stipulated
or seek the demand the rescission
rescission of the of the contract.
• Art. 1556 – Should the vendee lose,
contract
by reason of eviction, a part of the
thing sold of such importance, in Court may fix a Court cannot grant
relation to the whole, that he would period or grant extension of time for
not have bought it without said part extension of time fulfillment of the
for the fulfillment of obligation
• Art. 1560 – Vendee may ask for the obligation
recession if the immovable sold
should be encumbered with any Its purpose is to Its purpose is to seek
non-apparent burden or cancel the contract reparation for the
servitude, not mentioned in the damage or injury
agreement, of such a nature that it caused, thus allowing
must be presumed that the vendee partial rescission of
would not have acquired it had he the contract
been aware thereof

401
Under Art. 1382 - Payments made in a state of b. thing already in possession of party in
insolvency good faith; subject to indemnity only; if
there are 2 or more alienations – liability
1. Plaintiff has no other means to obtain of 1st infractor
reparation.
2. Plaintiff must be able to return whatever he

may be obliged to return due to rescission BADGES OF FRAUD
3. The things must not have been passed to 3rd a. consideration of the conveyance is
parties who did not act in bad faith inadequate or fictitious
4. It must be made within the prescribed period b. transfer was made by a debtor after a
(of 4 years) suit has been begun and while it is
pending against him
c. sale upon credit by an insolvent debtor

REQUISITES before a contract entered into
in fraud of creditors may be rescinded: d. evidence of indebtedness or complete
insolvency
1. There must be credit existing prior to the
celebration of the contract. e. transfer of all his property by a debtor
when he is financially embarrassed or
2. There must be fraud, or at least, the intent insolvent
to commit fraud to the prejudice of the
creditor seeking rescission f. transfer made between father and son
where there is present any of the above
3. The creditor cannot in any legal manner circumstances
collect his credit (subsidiary character of
rescission) g. failure of the vendee to take exclusive
possession of the property
4. The object of the contract must not be
legally in the possession of a 3rd person who B. VOIDABLE CONTRACTS
did not act in bad faith.
VOIDABLE CONTRACTS -intrinsic defect; valid
until annulled; defect is due to vice of consent or
legal incapacity
OBLIGATION CREATED BY THE RESCISSION
OF THE CONTRACT: Mutual Restitution
a. Things w/c are the objects of the contract CHARACTERISTICS:

and their fruits
a. Effective until set aside
b. Price with interest
b. May be assailed or attacked only in an
action for that purpose
MUTUAL RESTITUTION NOT APPLICABLE c. Can be confirmed (NOTE: confirmation is

WHEN the proper term for curing the defect of a
voidable contract)
a. creditor did not receive anything from
contract d. Can be assailed only by the party whose
consent was defective or his heirs or assigns

401
WHAT CONTRACTS ARE VOIDABLE: spouse, ascendants or descendants (moral
coercion)
a. Minors
b. Insane unless acted in lucid interval

UNDUE INFLUENCE
c. Deaf mute who can’t read or write
Person takes improper advantage of his power
d. Persons specially disqualified: civil over will of another depriving latter of
interdiction reasonable freedom of choice
e. In state of drunkenness
f. In state of hypnotic spell The doctrine on reluctant consent provides

that a contract is still valid even if one of the
parties entered it against his wishes or even
MISTAKE against his better judgment. Contracts are also
valid even though they are entered into by one
False belief of something which is contrary to of the parties without hope of advantage or
the real intention of the parties profit. Martinez vs. HSBC, [12 Phil 252]
REQUISITES: FRAUD
a. Refers to the subject of the thing which is Thru insidious words or machinations of
the object of the contract contracting parties, other is induced to enter
into contract w/o w/c he will not enter (dolo
b. Refers to the nature of the contract causante)
c. Refers to the principal conditions in an

agreement
KINDS OF FRAUD IN THE PERFORMANCE OF
d. Error as to person - when it is the principal OBLIGATION OR CONTRACTS
consideration of the contract
a. Causal Fraud (dolo causante) – deception
e. Error as to legal effect - when mistake is of serious character without which the other
mutual and frustrates the real purpose of party would not have entered into; contract is
parties VOIDABLE (Art. 1338)
b. Incidental Fraud (dolo incidente) –

deception which are not serious and without
VIOLENCE which the other party would still have entered
into the contract; holds the guilty party liable for
Serious or irresistible force is employed to wrest
DAMAGES (Art. 1344)
consent
c. Tolerated Fraud – includes minimizing the
defects of the thing, exaggeration of its god
INTIMIDATION qualities and giving it qualities it does not have;
LAWFUL misrepresentation
One party is compelled by a reasonable and
well-grounded fear of an imminent and grave
danger upon person and property of himself,

401
NOTE: ιιι. The injured party must have executed
an act which expressly or impliedly
Expression of an opinion – not fraud unless
conveys an intention to waive his right
made by expert and other party relied on the
former’s special knowledge
c. LOSS OF THE THING which is the object of

the contract through fraud or fault of the
Fraud by third person – does not vitiate
person who is entitled to annul the contract
consent; only action for damages except if there
is collusion between one party and the third
person, or resulted to substantial mistake,
mutual between parties. NOTE: Object is lost through a fortuitous event,
the contract can still be annulled, but the person
obliged to return the same can be held liable
only for the value of the thing at the time of the
CAUSES OF EXTINCTION OF ACTION TO
loss, but without interest thereon.
ANNUL
a.PRESCRIPTION - Period to bring an action

for Annulment Ratification cleanses the contract of its defects
from the moment it was constituted.
i. Intimidation, violence, undue influence - 4
years from time defect of consent ceases
C. UNENFORCEABLE CONTRACT
ii.Mistake, fraud – 4 years from time of UNENFORCEABLE CONTRACT – valid but cannot
discovery compel its execution unless ratified; extrinsic
defect; produce legal effects only after ratified
iii. Incapacity -
From time guardianship ceases
KINDS:
• Discovery of fraud must be reckoned to have a. Unauthorized or No sufficient

taken place from the time the document was authority – entered into in the name of
registered in the office of the register of another when:
deeds. Registration constitutes constructive
i. No authority conferred
notice to the whole world. Carantes v. CA,
[76 SCRA 514] ii. In excess of authority conferred
(ultra vires)
b. Curable by Ratification - Both parties

b. RATIFICATION
incapable of giving consent -2 minor or 2
REQUISITES: insane persons
ι. Knowledge of reason rendering c. Curable by Acknowledgment - Failure

contract voidable to comply with Statute of Frauds
ιι. Such reason must have ceased, except

in case of ratification effected by the STATUTE OF FRAUDS:
guardian to contracts entered into by
an incapacitated, Agreement to be performed within a year
after making contract

401
ii.
Special
promise to answer for debt, default or
miscarriage of another CHARACTERISTICS:
iii. Agreement made in consideration of promise a. It produces no effect whatsoever

to marry either against or in favor of anyone
iv. Agreement for sale of goods, chattels or b. There is no action for annulment
things in action at price not less than 500; necessary as such is ipso jure. A
exception: auction when recorded sale in judicial declaration to that effect is
sales book merely a declaration
v. Agreement for lease of property for more c. It cannot be confirmed, ratified or

than one year and sale of real property cured
regardless of price
d. If performed, restoration is in order,
vi. Representation as to credit of another except if pari delicto will apply
e. The right to set up the defense of

nullity cannot be waived
TWO WAYS OF CURING UNENFORCEABLE
CONTRACTS: f. Imprescriptible
a. Failure of defendant to object in time, g. Anyone may invoke the nullity of the
to the presentation of parole evidence in contract whenever its juridical effects
court, the defect of unenforceability is cured are asserted against him
b. Acceptance of benefits under the KINDS OF VOID CONTRACT:

contract. If there is performance in either
part and there is acceptance of a. Those lacking in essential elements:
performance, it takes it out of unenforceable no consent, no object, no cause
contracts; also estoppel sets in by accepting (inexistent ones) – essential formalities
performance, the defect is waived are not complied with ( ex: donation
propter nuptias – should conform to
formalities of a donation to be valid )
NOTES: i. Those w/c are absolutely simulated

or fictitious – no cause
• The contracts/agreements under the Statute
of Frauds require that the same be ii. Those which cause or object did not
evidenced by some note or memorandum or exist at the time of the transaction –
writing, subscribed by the party charged or no cause/object
by his agent, otherwise, the said contracts
shall be unenforceable. iii. Those whose object is outside the
commerce of man – no object
• The Statute of Frauds applies only to
executory contracts, not to those that are iv. Those w/c contemplate an
partially or completely fulfilled. impossible service – no object
v. Those w/c intention of parties

D. VOID OR INEXISTENT
relative to principal object of the
VOID OR INEXISTENT – of no legal effect contract cannot be ascertained

401
b. Prohibited by law Both parties are guilty, no action against each
other; those who come in equity must come with
c. Those expressly prohibited or clean hands; applies only to illegal contracts and
declared void by law - Contracts w/c not to inexistent contracts; does not apply when
violate any legal provision, whether it a superior public policy intervene
amounts to a crime or not
d. Illegal/Illicit ones – Those whose

cause, object or purpose is contrary to EXCEPTION TO PARI DELICTO RULE - If
law, morals, good customs, public order purpose has not yet been accomplished and if
or public policy ; Ex: Contract to sell damage has not been caused to any 3rd person
marijuana
OTHER VOID CONTRACTS: OTHER EXCEPTIONS:

1. PACTUM
COMMISSORIUM (Arts. 2088, 2130, 1390) a. Payment of Usurious interest
ELEMENTS: b. payment of money or delivery of

1. There should be a property mortgaged by property for an illegal purpose, where
way of security for the payment of the principal the party who paid or delivered
obligation. repudiates the contract before the
2. There should be a stipulation for automatic purpose has been accomplished, or
appropriation by the creditor of the thing before any damage has been caused to a
mortgaged in case of non-payment of the
3rd person
principal obligation within the stipulated period.
2. PACTUM DE NON ALIENANDO (Art. c. payment of money or delivery of

2130) property made by an incapacitated
person
• A stipulation forbidding the owner from
d. agreement or contract which is not
alienating the immovable mortgaged shall
illegal per se and the prohibition is
be void.
designed for the protection of the
• It is a clause in a mortgage giving the plaintiff
mortgagee the right to foreclose by
e. payment of any amount in excess of the
executory process directed solely against
maximum price of any article or
the mortgagor, and giving him or her the
commodity fixed by law or regulation by
right to seize and sell the mortgaged
competent authority
property, regardless of any subsequent
alienations. f. contract whereby a laborer undertakes
to work longer than the maximum
number of hours fixed by law
3. PACTUM LEONINA (Art. 1799)
g. One who lost in gambling because of
A stipulation which excludes one or more
partners from any share in profit or loss is void. fraudulent schemes practiced on him is
allowed to recover his losses (Art. 313
RPC) even if gambling is prohibited.
KINDS OF ILLEGAL CONTRACTS
PARI DELICTO DOCTRINE

REQUISITES OF ILLEGAL CONTRACTS:
a. Contract is for an illegal purpose

401
b. Contract must be repudiated by any of designated for the protection of the
the parties before purpose is plaintiff – may recover what he has paid
accomplished or damage is caused to 3rd or delivered by virtue of public policy
parties
c. Court believes that public interest will

be served by allowing recovery MUTUAL RESTITUTION IN VOID CONTRACTS
(discretionary upon the court) – based on
GENERAL RULE: parties should return to each
remorse; illegality is accomplished when
other what they have given by virtue of the void
parties entered into contract; before it
contract in case
takes effect – party w/c is remorseful
prevents it
• Where nullity arose from defect in essential
elements
WHERE LAWS ARE ISSUED TO PROTECT a. return object of contract

CERTAIN SECTORS: CONSUMER and fruits
PROTECTION, LABOR, AND USURY LAW
b. return price plus interest
a. Consumer protection – if price of
commodity is determined by statute,
any person paying an amount in excess EXCEPTION: No recovery can be had in cases
of the maximum price allowed may where nullity of contract arose from illegality of
recover such excess contract where parties are in pari delicto;
except when incapacitated – not obliged to
b. Labor – if law sets the minimum wage
return what he gave but may recover what he
for laborers, any laborer who agreed to
has given other party is less guilty or not guilty
receive less may still be entitled to
recover the deficiency; if law set max
working hours and laborer who
undertakes to work longer may =========================================
demand additional compensation
c. Interest paid in excess of the interest
allowed by the usury law may be A. GENERAL PROVISIONS
recovered by debtor with interest from
date of payment 7. Effect of Contracts
=========================================
EFFECTS OF ILLEGAL CONTRACTS 7. EFFECT OF CONTRACTS

a. If one party is incapacitated, courts may Contracts take effect only between the parties,
allow recovery of money, property their assigns and heirs, except in case where the
delivered by incapacitated person in the rights and obligations arising from the contract
interest of justice; pari delicto cannot are not transmissible by their nature, or by
apply because an incapacitated person stipulation or by provision of law. The heir is not
does not know what he is entering into; liable beyond the value of the property he
unable to understand the consequences received from the decedent. (Article 1311)
of his own action
If a contract should contain some stipulation in
b. If agreement is not illegal per se but favor of a third person, he may demand its
merely prohibited and prohibition is fulfillment provided he communicated his

401
acceptance to the obligor before its revocation.
A mere incidental benefit or interest of a person
is not sufficient. The contracting parties must
have clearly and deliberately conferred a favor
upon a third person. (Article 1311)

401
SALES 2. ELEMENTS OF A CONTRACT OF SALE
1. Consent
A. INTRODUCTION
2. Determinate subject matter
================================
TOPICS UNDER THE SYLLABUS 3. Price certain in money or its equivalent
A. Introduction
=========================================
1. Definition of sales (Arts. 1458,
1470) TOPICS UNDER THE SYLLABUS
2. Essential requisites of a contract
of sale (Art. 1505) A. INTRODUCTION
3. Stages of contract of sale 3. Stages of Contract of Sale
4. Obligations created (Art. 1165) =========================================
5. Characteristics of a contract of
sale 3. STAGES IN LIFE OF CONTRACT OF
SALE
6. Sale is title and not mode 1. Negotiation
7. Sale distinguished from other 2. Perfection
contracts 3. Consummation
8. Contract of sale/contract to sell
=========================================
=========================================
TOPICS UNDER THE SYLLABUS A. INTRODUCTION
A. INTRODUCTION 4. Obligations created

=========================================
1. Definition of Sales
4. OBLIGATIONS CREATED
2 sets of real obligations to give
=========================================
Obligation of the Seller:
1. DEFINITION OF SALES (Arts. 1458 &
a. to transfer ownership and
1470) b. to deliver possession
CONTRACT OF SALE – One of the contracting
=========================================
parties obligates himself to transfer the
ownership of and to deliver a determinate
thing, and the other to pay therefore a price TOPICS UNDER THE SYLLABUS
certain in money or its equivalent. A contract
of sale may be absolute or conditional. A. INTRODUCTION
========================================= 5. Characteristics of Contract of Sale

=========================================
5. CHARACTERISTICS OF CONTRACT OF
A. INTRODUCTION SALE:
1. Nominate
2. Elements of a Contract of Sale 2. Principal
3. Consensual
=========================================
4. Bilateral

401
5. Reciprocal hand or not)
6. Onerous
7. Commutatitve
8. Title and not a mode Essence is service Essence is object
Real obligation Personal obligation
========================================= Tests under Jurisprudence:
GR: IF YES, Contract for piece of work, IF
TOPICS UNDER THE SYLLABUS NO, SALE
A. INTRODUCTION 1. Timing test - Under art 1467: whether the

thing transferred only existed upon special
order
6. Sale is Title and not Mode
========================================= 2. Habituality test - if manufacturer engages
in activity with the need to employ
6. SALE IS TITLE AND NOT MODE extraordinary skills and equipment (Celestino v
CIR)
=========================================
3. Nature of the object test - Each product’s
TOPICS UNDER THE SYLLABUS nature of execution differs from the others;
products are not ordinary products of
A. INTRODUCTION Manufacturer (EEI v CIR)
7. Sale distinguished from other

BARTER DISTINGUISHED FROM SALE
contracts Barter Sale
======================================== Consideration: giving Consideration: giving
of a thing of money as payment
Governed by law on sales: species of the genus
sales
If consideration consists partly in money
and partly by thing –
look at manifest intention;
CONTRACT FOR PIECE OF WORK If intention is not clear: If intention is not

Lease Sale value of thing is clear: value of thing
more than amount of is equal or less than
Use of thing is for a Obligation to
money – barter amount of money –
specified period only absolutely transfer
sale
with an obligation to ownership of thing
return
Consideration is rent Consideration is price
Lessor need not be Seller needs to be
owner owner of thing to
transfer ownership
DISTINGUISHED FROM SALE
DATION IN PAYMENT DISTINGUISHED FROM
SALE
Contract for piece of Sale
Dation in Payment Sale
work
Pre-existing credit No pre-existing
Goods are to be Contract for delivery
credit
manufactured specially of an article which
Obligations are Obligations are
for a customer and the vendor in the
extinguished created
upon special order and ordinary course of
not for the general business Debtor’s consideration: Consideration of
market manufactures or extinguishment of the seller: price
procures for general debt Consideration of
market (whether on Creditor’s consideration: buyer: acquisition
acquisition of the object of the object

401
offered in lieu of the A. INTRODUCTION
original credit
Less freedom in Greater freedom 8. Contract of Sale/Contract to Sell
determining the price in determining
=========================================
the price
Payment is received by Buyer still has to
8. Contract of Sale/Contract to Sell
the debtor before the pay the price
contract is perfected Contract of Sale Contract to Sell
Absolute Conditional
Real obligation – Personal obligation –
AGENCY TO SELL DISTINGUISHED FROM
obligation to give obligation to do
SALE
Title passes to the Ownership is reserved
Agency to Sell Sale
buyer upon delivery in the seller and will
pass to the buyer only
Agent not obliged to Buyer pays for price
upon full payment of
pay for price, merely of object
the price
obliged to deliver price
Non-payment of the Full payment is a
received from buyer.
price is a negative positive suspensive
Preparatory contract Principal contract resolutory condition condition, the failure
Principal remains owner Buyer becomes of which is not a
even if object delivered owner of thing; in breach but prevents
to agent agency the obligation of the
Agent assumes no Seller warrants vendor to convey title
risk/liability as long as to arise
within the authority Remedies available: Remedies available:
given Specific Resolution
May be revoked Not unilaterally Performance Damages
unilaterally because revocable Rescission
fiduciary and even if Damages
revoked w/o ground
Agent not allowed to Seller receives profit END OF DISCUSSION ON TOPIC
profit A. INTRODUCTION
Personal Contract; Real Contract
Rescission is not
================================
available
B. PARTIES TO A CONTRACT
DONATION DISTINGUISED FROM SALE
Donation Sale OF SALE
Gratuitous or Onerous ================================
onerous TOPICS UNDER THE SYLLABUS
Formal contract Consensual contract
B. Parties to a Contract of Sale
NOTE: Lease with option to buy: really a
contract of sale but designated as lease in name 1. Capacity of parties (Arts. 1489-
only; it is a sale by installments 1492)
2. Absolute incapacity (Arts. 1327,
1397, 1399)
3. Relative incapacity: married
persons
4. Special disqualifications (Arts.
1491-1492)
=========================================
=========================================

401
TOPICS UNDER THE SYLLABUS 3. RELATIVE INCAPACITY
B. PARTIES TO A CONTRACT OF SALE A. SPOUSES - A spouse may, without the

consent of the other spouse, enter into sales
1. Capacity of Parties transactions in the regular pursuit of their
profession, vocation, or trade. These contracts
========================================= are void.
GENERAL RULE - All persons who are GENERAL RULE: The husband and the wife
authorized in this Code to obligate themselves cannot sell property to each other.
may enter into a contract of sale EXCEPTION:
• When a separation of property was agreed
========================================= upon in the marriage settlement
TOPICS UNDER THE SYLLABUS • When there has been a judicial separation
of property under Art. 191
B. PARTIES TO A CONTRACT OF SALE
NOTE: Prohibition likewise applies to common-
2. Absolute Incapacity law spouses
=========================================
B. OTHERS - TRUST RELATIONSHIPS
I. Art. 1491 - Two groups of parties prohibited
from acquiring by purchase certain properties:
2. ABSOLUTE INCAPACITY
a. Guardian/Agent/Executors and Administrators
MINORS, INSANE AND DEMENTED • Direct or indirect
PERSONS, AND DEAF-MUTES
• May be ratified since only private wrong is
• Contracts are voidable, subject to involved
annulment or ratification
b. Public Officers & Employees/Officers of Court
• Also includes:
i. Cannot be ratified since public wrong is
involved
- State of drunkenness ii. Requisites for the prohibition to
apply to attorneys:
- Hypnotic spell 1. Existence of attorney client
relationship;
- NECESSARIES: Those sold and delivered 2. Property is the subject matter in
to a minor or other person without litigation;
capacity to act, he must pay a 3. While in litigation (from filing of
reasonable price therefore complaint to final judgment)
========================================= NOTE: Exception to the prohibition against

attorneys: contingent fee arrangement where
TOPICS UNDER THE SYLLABUS the amount of legal fees is based on a value of
property involved in litigation (reason is that the
B. PARTIES TO A CONTRACT OF SALE transfer or assignment of the property takes
effect only after the finality of a favorable
3. Relative Incapacity judgment
========================================= II. Legal Status of Contract

1. Void (case law) – guardian/ executor/public
officers / officers of the court

401
2. Voidable (civil code) – agent; VALID if with i. Whether the subject
consent matter is of a type and nature that
exists or could be made to exist to
=========================================
allow the seller reasonable certainty
TOPICS UNDER THE SYLLABUS of being able to comply with his
obligations
ii. Minimum requirement of
potential existence: taking into
4. Special Disqualifications
consideration the state of science
========================================= and technology at the time of
perfection of the contract
B. Licit
4. SPECIAL DISQUALIFICATIONS B.1. Not outside the commerce of man
B.2. If illicit, contract is void
B.3. Prohibited:
i. Animals with contagious
END OF DISCUSSION ON TOPIC diseases
ii. Sale of future inheritance
================================ C. Determinate or determinable
i. Determinate: particularly designated or
C. SUBJECT MATTER OF SALE physically segregated from all others of
================================ the same class; always specific
ii. Determinable: always generic
C. Subject Matter a) Thing is capable of

1. Requisites of a valid subject being made determinate
matter (Arts. 1459-1465)
b) Without the
2. Particular kinds necessity of a new or further contract
between the parties.
=========================================
TOPICS UNDER THE SYLLABUS Emptio rei Emptio spei

speratae
C. SUBJECT MATTER OF SALE Sale of an Sale of a mere hope or
expected expectancy that the thing
1. Requisites of a valid subject thing will come to existence;
matter sale of the hope itself
========================================= Sale is Sale is effective even if
subject to the the thing does not come
condition; into existence, unless it is
1. REQUISITES OF A VALID SUBJECT that the thing a vain hope (Art 1461
MATTER will exist; if it Sale of a vain hope or
does not, expectancy is void)
there is no
Requisites: contract
1. Things Uncertainty The uncertainty is with
is with regard regard to the existence of
A. “Possible” - existing, future, and to the the thing
contingent quantity and
quality of the
thing and not
CIVIL LAW REVIEWER the existence Page 149 of
of the thing
401 Object is a Object is a present thing
future thing which is the hope or
expectancy
NOTE: Subject matter CAN NOT be ================================
DETERMINED BY a 3rd PARTY. TOPICS UNDER THE SYLLABUS
2. Rights – Must be transmissible, except:
D. Obligations of the Seller to
a. Future inheritance Transfer Ownership
b. Service 1. Sale by a person not the owner
at time of delivery (Arts. 1462, 1505,
1459); Exceptions
=========================================
2. Sale by a person having a
TOPICS UNDER THE SYLLABUS voidable title (Arts. 1506, 559)
C. SUBJECT MATTER OF SALE

=========================================
2. Particular Kinds
=========================================
2. PARTICULAR KINDS D. OBLIGATIONS OF THE SELLER TO

TRANSFER OWNERSHIP
GOODS THAT MAY BE THE OBJECTS OF
SALE 1. Sale by a person not the owner at
1. Existing goods – goods owned or
the time of delivery
possessed by the seller at the time of
=========================================
perfection
2. Future goods – goods to be 1. OBLIGATION OF THE SELLER TO

manufactured, raised or acquired by the TRANSFER OWNERSHIP
seller after the perfection of the contract GENERAL RULE: Seller need not be the owner
of the subject matter at the time of perfection:
sufficient that he is the owner at the time of
NOTES: delivery.
• Quantity of subject matter is not essential for
perfection; must determine nature and EXCEPTION: Foreclosure sale (mortgager must
be absolute owner)
quality of subject matter
RULES ON LEGAL EFFECTS OF SALE BY A
• Generic things may be the object of sale, but NON-OWNER
the obligation to deliver the subject matter GENERAL RULE: Sale by non-owner, buyer
can only be complied with when the subject acquires no better title than seller had.
matter has been made determinate (either
by physical segregation or particular EXCEPTIONS:
1. Owner by his conduct is precluded from
designation)
denying seller’s authority (ESTOPPEL)
2. Contrary is provided for in recording laws (PD
1529)
END OF DISCUSSION ON TOPIC 3. Sale is made under statutory power of sale or
C. SUBJECT MATTER OF SALE under order of a court of competent jurisdiction
4. Sale is made in a merchant’s store in
================================ accordance with code of commerce and special
laws.
D. OBLIGATIONS OF THE But subject to ANTI-FENCING LAW
SELLER TO TRANSFER
TITLE AS TO MOVABLE PROPERTIES
OWNERSHIP

401
GENERAL RULE: Possession is equivalent to
title =========================================
REQUISITES: Possession of movable and Good
Faith TOPICS UNDER THE SYLLABUS
EXCEPTIONS:
1. Owner lost movable – owner can recover E. PRICE
without reimbursing price
2. Owner is unlawfully deprived – owner can 1. Meaning of Price
recover w/o reimbursing price
=========================================
EXCEPTIONS TO THE EXCEPTIONS:
1. MEANING OF PRICE
1. Movable is bought at public sale – owner can
PRICE – The sum stipulated as the equivalent of
only recover after reimbursing price
the thing sold and also every incident taken into
2. Acquired in good faith and for value from
consideration for the fixing of the price, put to
auction
the debit of the vendee and agreed to by him.
=========================================

=========================================
D. OBLIGATIONS OF THE SELLER TO
TRANSFER OWNERSHIP TOPICS UNDER THE SYLLABUS
1. Sale by a person having a voidable E. PRICE

title
======================================== 2. Requisites for a Valid Price
=========================================
END OF DISCUSSION ON TOPIC 2. REQUISITES FOR A VALID PRICE:
D. OBLIGATIONS OF THE SELLER TO A. Real

When at the perfection of the contract of sale,
TRANSFER OWNERSHIP there is every intention on the buyer to pay the
price, and every expectation on the part of the
================================ seller to receive such price as the value of the
subject matter he obligates himself to deliver.
E. PRICE (Test of intention)
================================
TOPICS UNDER THE SYLLABUS B. In money or its equivalent
Consideration for a valid contract of sale can be
the price and other valuable consideration; at
E. Price the very least, a true contract of sale must have
1. Meaning of price (Arts. 1469- price as part of its consideration (Test of value
1474) consideration)
2. Requisites for a valid price C. Certain or ascertainable
3. How price is determined i. Certain: expressed and agreed in
4. Inadequacy of price (Arts. 1355, terms of specific pesos and/or
1470) centavos
5. When no price agreed (Art. 1474) ii. Ascertainable:
6. Manner of payment must be
agreed upon a. Set by third persons
7. Earnest money vs. Option money
(Art. 1482)

401
b. Set by the courts – in cases where 3. How price is determined
the third person fixes the price in bad =========================================
faith or by mistake
3. HOW PRICE IS DETERMINED
c. Set by reference to a definite day,
particular exchange or market
=========================================
d. Set by reference to another thing
certain TOPICS UNDER THE SYLLABUS
e. But never by one party to the
E. PRICE
contract (unless the price is accepted
by the other party)
4. Inadequacy of price
=========================================
Note: When the 3 party is unwilling to set the
rd
price, the parties may not ask the court to fix 4. INADEQUACY OF PRICE
the price because the condition imposed on the
contract has not happened yet and thus, no EFFECT OF GROSS INADEQUACY OF PRICE
enforceable contract has arisen.
NOTE: Mere inadequacy of the price does not
EFFECT WHERE PRICE IS SIMULATED affect the validity of the sale, except
• The act may be shown to have been in
reality a donation, or some other act or (1) When there is fraud, mistake, or undue
contract influence indicative of a defect in consent is
present,
• If not and neither party had any intention
whatsoever that the amount will be paid (2)When it shows that the parties really
intended a donation or some other act or
(absolutely simulated): the sale is void
contract.
If there is a real price but what is stated (3)Judicial sale, where the inadequacy is
in the contract is not the one intended to shocking to the conscience of man and there is
be paid (only relatively simulated): the showing that in event of resale, a better price
contract of sale is valid but subject to can be obtained.
reformation (false price)
=========================================
EFFECT OF NON-PAYMENT OF PRICE
NOTE: Non-payment of price does not cancel

sale, as the sale is still considered perfected. But
E. PRICE
it is a cause for either:
1. Specific performance or 5. When no price agreed

=========================================
2. Rescission.
5. WHEN NO PRICE AGREED
========================================= Note: If there was a failure of the contract to

set a price but the BUYER has already
TOPICS UNDER THE SYLLABUS APPROPRIATED IT, then the buyer must pay a
reasonable price (Article 1474)
E. PRICE
=========================================

401
TOPICS UNDER THE SYLLABUS Money given as distinct Part of the purchase
consideration for an price
E. PRICE option contract
6. Manner of payment must be Applies to a sale not Given only when

agreed upon perfected there is already a
========================================= sale
Not required to buy When given, buyer

6. MANNER OF PAYMENT MUST BE
is bound to pay the
AGREED UPON
balance
Manner of payment must be agreed upon
Marnelego v. Banco Filipino Savings and
Mortgage Bank, [G.R. No. 161524, January
27, 2006 END OF DISCUSSION ON TOPIC
E. PRICE
=========================================
================================
F. FORMATION OF CONTRACT
E. PRICE OF SALE
================================
7. Earnest money vs. Option money TOPICS UNDER THE SYLLABUS
=========================================
7. EARNEST VS. OPTION MONEY F. Formation of Contract of Sale

1. Preparatory (Art. 1479)
EARNEST MONEY 1.1. Offer (Art. 1475)
1. Money given as part of purchase price
1.2. Option contract (Arts. 1479,
2. Acceptance is the proof that contract of 1324)
sale exists 1.3. Right of first refusal
1.4. Mutual promise to buy and
3. Nothing in law prevents parties from
treating earnest money differently sell (Art. 1479)
2. Perfection (Arts. 1475, 1319,
4. Old concept: subject to forfeiture when 1325, 1326)
BUYER backs out 3. Formalities of the contract (Art.
5. New concept: cannot be forfeited – part 1403 (d)&(e))
of purchase price; must be restored
6. Qualification: if old concept is stipulated =========================================

– VALID
7. Presumption of perfection of contract of
sale and such earnest money as part of F. FORMATION OF CONTRACT OF
purchase price is disputable SALE
1. Preparatory
OPTION MONEY DISTINGUISHED FROM =========================================
EARNEST MONEY
OPTION MONEY EARNEST MONEY

401
1. PREPARATORY paid a separate consideration, to buy a certain
object within an agreed period
3 STAGES IN LIFE OF A CONTRACT OF SALE
A. Policitacion/Negotiation Stage - offer is
floated, acceptance is floated but they do not NOTE: There is no presumption of
meet; the time when parties indicate their consideration, it needs to be proven
interest but no concurrence of offer and
acceptance. OPTION- an unaccepted or unexercised
B. Perfection - concurrence of all requisites; contractual offer
meeting of the minds.
C. Consummation - parties perform their Characteristics of Option Contract
respective undertakings
a. Not the contract of sale by itself, separate
A. PREPARATORY and distinct
I. RULES: b. Nominate
1. Offer is Prior to acceptance, may c. Principal - but can be attached to other

floated be withdrawn at will by principal contracts
offeror
d. Onerous
2. Offer floated Without acceptance,
with a period extinguished when period e. Commutative
has ended and maybe
withdrawn at will by f. Unilateral – versus contract of sale which is
offeror; right to withdraw bilateral
must not be arbitrary
otherwise, liable to damage g. Preparatory
under Art 19, 20, 21 of Civil
Code
Consideration in an option contract may be
3. Offer floated Extinguished by
anything of value, unlike in sale where it must
w/ condition happening/non-happening
be price certain in money. (San Miguel
of condition
Philippines v. Cojuangco)
4. Offer floated Continues to be valid
without depending upon How EXERCISED: Notice of acceptance should be
circumstances of time, communicated to offeror without actual
period/without place and person payment as long as there is delivery of payment
condition in consummation stage
5. Offer is Original offer is destroyed,
floated and there is a new offer; can ELEMENTS OF VALID OPTION CONTRACT
there not go back to original offer
a. Consent – meeting of the minds
b. Subject matter – an option right, or accepted
is counter-offer
unilateral offer to buy, or accepted unilateral
6. Offer is No authority of offeror to
offer to sell:
floated modify offer i. a determinate object
ii. for a price certain (including manner of
7. Offer Proceed to perfected stage payment)
accepted
absolutely c. Prestation – a consideration separate from
purchase price for option given
OPTION CONTRACT - a contract granting an

exclusive right in one person, for which he has

401
SITUATIONS IN AN OPTION CONTRACT: OPTION CONTRACT DISTINGUISHED FROM
RIGHT OF FIRST REFUSAL
a. With separate consideration Option Contract Right of First
Refusal
i. Option contract is valid
Principal contract; Accessory; can not
ii. Offeror cannot withdraw offer until stands on its own stand on its own
after expiry period Needs separate Does not need
consideration separate consideration
iii. Subject to rescission, damages but Subject matter and There must be subject
not to specific performance because price must be valid matter but price not
important
this is not an obligation to give
Not conditional Conditional
b. Without separate consideration Not subject to Subject to specific
i. OLD RULE - offer is still valid, but specific performance performance
option contract is void and not
subject to rescission, damages
=========================================
ii. NEW RULE: Right of first refusal
recognized as a valid offer TOPICS UNDER THE SYLLABUS
F. FORMATION OF CONTRACT OF
RIGHT OF FIRST REFUSAL: SALE
1. Creates a promise to enter into a
contract of sale and it has no separate
2. Perfection of Sales
consideration, not subject to specific
=========================================
performance because there is no
contractual relationship here and it is
2. PERFECTION OF SALES
not an obligation to give (not a real
contract)
GENERAL RULE: A contract of sale is perfected
at the moment there is a meeting of the minds
2. New doctrine: May be subject to
upon the thing which is the object of the
specific performance. contract and upon the price; consensual
contract
The right of first refusal is only subject to
specific performance insofar as it is attached to EXCEPTION: When the sale is subject to a
a valid written principal contract (e.g. lease). suspensive condition
RFR becomes one of the considerations in the
contract. If RFR is violated, and property sold to REQUIREMENTS:
another buyer in bad faith, the sale to the 3rd
party buyer is rescissible. The price for the 3rd 1. When parties are face to face – when
party buyer is to be the basis for the price of the there is absolute acceptance of an offer
sale back to the one with the RFR. Equatorial that is certain
Dev’t v. Mayfair Theater, [370 SCRA 56]
2. When thru correspondence or
Effect of new doctrine: turned the world of telegram – when the offeror receives or
policitacion upside down because while valid had knowledge of the acceptance
option contract is not subject to specific
performance, right of first refusal which does not
even have a separate consideration may be 3. When the sale is subject to a
subject to specific performance suspensive condition – from the
moment the condition is fulfilled
Recognizes recovery of damage based on abuse
of rights doctrine

401
NOTES: Qualified acceptance: mere counter- 2. Sale of large cattle; must also be
offer which needs to be absolutely accepted to registered with Municipal treasurer –
give rise to perfected contract of sale
otherwise VOID
Business ads are mere invitations to make an 3. Sale of land by non-Christian if not
offer except when it appears to be otherwise approved by Governor– VOID
Rules governing auction sales:

When form is important for enforceability
1. Sales of separate lots by auction are separate
[STATUTE OF FRAUDS Article 1403 (2)]
contracts of sale
2. Sale is perfected by the fall of the hammer
3. Seller has the right to bid at the auction a. Performed 1 Year: A sale agreement
provided such right was reserved and notice was which by its terms is not to be
given to that effect performed within a year from the
making thereof;
b. 500 and Above: An agreement for the

=========================================
sale of goods, chattels or things in
action, at a price not less than P500.00;
TOPICS UNDER THE SYLLABUS and
F. FORMATION OF CONTRACT OF c. Sale Land: A sale of real property or of

SALE an interest therein.
3. Formalities of the Contract EXCEPTIONS TO COVERAGE OF STATUTE IN

========================================= SALES CONTRACTS:
3. FORMALITIES OF THE CONTRACT 1. WRITTEN: When there is a note or

memorandum in writing and subscribed
Form not important in validity of sale to by party or his agent (contains
essential terms of the contract)
A. Sale being consensual, may be oral or
2. PARTIAL EXECUTION: When there has
written, perfected by mere consent as to
been partial performance/execution
price and subject matter
(seller delivers with intent to transfer
B. If particular form is required under the title/receives price)
statute of frauds:
3. FAILURE TO OBJECT: When there has
- valid and binding between parties been failure to object to presentation of
but not binding to 3rd persons evidence (oral)
- Reason: purposes of 4. E-COMMERCE: When sales are effected

convenience only and not for validity through electronic commerce
and enforceability; cause of action is
granted to sue and compel other
While a sale of land appearing in a private deed
party to execute the document
is binding between the parties, it cannot be
considered binding on third persons if not
When form is important for validity; embodied in a public instrument and recorded in
exception by specific provision of law;
the Registry of Deeds. Secuya v. Vda. De
Selma, [G.R. No. 136021, February 22,
1. Power to sell a piece of land granted to
2000]
an agent – otherwise VOID

401
END OF DISCUSSION ON TOPIC 1. Preserve subject matter (proper diligence of a
E. FORMATION OF CONTRACT OF good father of a family unless law or parties
stipulate another standard)
SALE
2. Deliver – transfer ownership and deliver
object
3. Deliver fruits and accessories
4. Warrant subject matter against eviction and
hidden defects
A. Delivery of the Thing - Transfer ownership

(tradicion) covers twin obligations of the seller
which are:
1. To transfer the ownership; and
2. To deliver a determinate thing
================================ B. Delivery of the thing together with the

G. TRANSFER OF OWNERSHIP payment of the price, marks the consummation
of the contract of sale. PNB v. Ling, [69 Phil
================================ 611, October 5, 1927]
The act of delivery must be coupled with the
intention of delivering the thing and putting the
G. Transfer of Ownership
buyer under control. Norkis Distributor v. CA,
1. Manner of Transfer (Arts. 1477, [195 SCRA 694, February 7, 1991]
1496-1501)
=========================================
2. When delivery does not transfer
title TOPICS UNDER THE SYLLABUS
3. Kinds of delivery
4. Double sales (Art. 1544) G. TRANSFER OF OWNERSHIP
5. Property Registration Decree
5.1. Requisites for registration of 2. When Delivery does not transfer
deed of sale in good faith Title
=========================================
5.2. Accompanied by vendors
duplicate certificate of title, 2. WHEN DELIVERY DOES NOT TRANSFER
payment of capital gains tax, and TITLE
documentary tax registration fees
=========================================

=========================================
G. TRANSFER OF OWNERSHIP
3. Different Kinds of Delivery
=========================================
1. Manner of Transfer
3. DIFFERENT KINDS OF DELIVERY
=========================================
Different Kinds of Delivery:
1. MANNER OF TRANSFER 1. Actual or real - when thing sold is placed in
the control and possession of the buyer
NOTE: Stage where parties both comply with 2. Legal or Constructive- can take several forms
their obligation. and may be any manner signifying an
agreement that the possession is transferred
OBLIGATIONS OF THE SELLER from the vendor to the vendee.

401
Α.
C. Different forms of Constructive Delivery - W
Constructive delivery has same legal effect as HEN EXECUTION OF PUBLIC
actual or physical delivery INSTRUMENT DOES NOT PRODUCE THE
EFFECTS OF DELIVERY
Gives rise only to a prima facie presumption of
delivery which is destroyed when actual delivery
1. When there is stipulation to contrary,
is not effected because of a legal impediment.
Ten Forty Realty v. Cruz execution does not produce effect of
delivery
1. Traditio Longa Manu
2. When at the time of execution of
Delivery of thing by mere agreement; when instrument, subject matter was not
SELLER points to the property without need of subject to control of the seller
actually delivering
3. Subject matter should be within control
2. Traditio Brevi Manu
of seller; he should have capacity to
Before contract of sale, the would be buyer was deliver at the time of execution of public
already in possession of the would be subject instrument when he wants to effect
matter of sale (ex: as lessee) actual delivery
3. Symbolic delivery 4. Such capacity should subsist for a

reasonable time after execution of
As to movables – ex: delivery of the keys to a instrument (reasonable time depends on
car
circumstances of persons, places and
4. Constitutum possessarium things)
When at the time of the perfection of the

contract of sale, seller had possession of the • The presumption of delivery when the sale is
subject matter in the concept of owner and made through a public instrument can be
pursuant to the contract, seller continues to hold rebutted by clear and convincing evidence.
physical possession no longer in the concept of Presumptive delivery through a public
an owner but as a lessee or any other form of instrument can be negated by the failure of
possession other than in the concept of owner.
the vendee to take actual possession of the
land or the continued enjoyment of
possession by the vendor. Santos v.
5. Quasi-tradition Santos, [366 SCRA 395]
Delivery of rights, credits or incorporeal

property, made by: Β. Delivery of Fruits and Accessions/
Placing titles of ownership in the hands of Accessories
the buyer
Allowing buyer to make use of rights Right to fruits and accessions/accessories accrue
from time sale is perfected but no real right over
6. Tradition by operation of law it until it is delivered
The execution of a public instrument is Χ. Delivery Through Carrier

equivalent to delivery. But to be effective, it is
necessary that the vendor have such control
GENERAL RULE: Where the seller is authorized
over the thing sold that, at the moment of sale,
its material delivery could have been made. or required to send the goods to the buyer,
Addison v. Felix, [38 Phil. 404] delivery to the carrier is delivery to the buyer.
EXCEPTIONS: a contrary intention appears or

implied reservation of ownership under pars.
1,2, 3 of Art. 1503

401
Ι.
FAST – FREE ALONG SIDE - When goods 1. Contract to sell
delivered alongside the ship, there is already
delivery to the buyer (twin effects deemed 2. Sale on acceptance/approval –
fulfilled) ownership only passes to the buyer
when:
ΙΙ. FOB - FREE ON BOARD - Shipment – when  The buyer signifies approval to
goods are delivered at ship at point of the seller, or
shipment; delivery to carrier by placing
goods on vessel is delivery to buyer  The buyer does not signify his
rejection but retains the goods
Destination – when goods reach the port

even if not disembarked yet from the vessel, 3. Sale on return – ownership passes to
there is delivery to the buyer the buyer but he may re-vest ownership
to the seller by returning the goods
ΙΙΙ. CIF – COST, INSURANCE, FREIGHT within time fixed. If no time is fixed,
within reasonable time.
• When buyer pays for services of carrier –
delivery to carrier is delivery to buyer; NOTE: Who Bears Expenses of Delivery? Seller
carrier is agent of the buyer.
Φ. SALE BY
• When buyer pays seller the price – from DESCRIPTION/SAMPLE
moment the vessel is at port of
1. Sample – goods must correspond with
destination, there is already delivery to
sample shown
buyer.
2. Description – goods must correspond
See Arts. 1522, 1539, 1540, 1541, 1542, with description or sample
1543.
3. Effect if there is no compliance:
∆. TIME AND PLACE OF RESCISSION may be availed of by the
DELIVERY buyer
a. Follow stipulation in contact, or
b. Follow usage in trade, or Γ. OBLIGATIONS OF BUYER
c. Seller’s place of business or his 1. Pay the price

residence
o Buyer is obligated to pay price
d. Specific goods – place where the according to terms agreed upon
thing is regarding time, place and amount
e. At reasonable hour o If payment of interest is stipulated –

must pay; if amount of interest not
Ε. EFFECTS OF DELIVERY mentioned – apply legal rate
GENERAL RULE: The ownership of the thing o When buyer defaults – constitutes
sold shall be transferred to the buyer upon the breach: subject to specific
actual or constructive delivery thereof. performance/rescission and
damages; interest to be paid also
EXCEPTION: When the contrary is stipulated from default
such in the cases of:

401
I.
2. Accept delivery of thing sold REQUISITES FOR DOUBLE SALES TO
a. Where to accept: at time and place EXIST: (VOCS)
stipulated in the contract; if none
1. Two or more sales transactions must
specified – at the time and place of
constitute valid sales;
delivery goods; there is acceptance
when: 2. Two or more sales transactions must
pertain to the same object or subject
i. He intimates to seller that he has
matter;
accepted
3. Two or more buyers at odds over the
ii. When delivered and does any act
rightful ownership of the subject
inconsistent with ownership of seller
matter must each represent
iii. Retains without intimating to seller conflicting interests; and
that he has rejected
4. Two or more buyers must each have
bought from the very same seller.
3. Sale of Goods on installment
• If not all the elements are present for
1. Goods must be delivered in full,
Art. 1544 to apply, the priniciple of prior
except when stipulated
tempore, potior jure or simply “he who is
2. When not examined by buyer – not
first in time is preferred in right” should
accepted until examined or at least apply. Undisputably, he is a purchaser in
had reasonable time to examine good faith because at the time he
bought the real property, there was still
no sale to as a second vendee.
• Acceptance of goods in general, absent Consolidated Rural Bank v. CA, [Jan.
contrary express stipulation, does not 17, 2005]
discharge seller from liability in case of
breach of warranties (unless no notice or II. RULES ACCORDING TO 1544:
failure to give it within reasonable time)
1. MOVABLE
4. When buyer has a right to refuse goods, First to posses in good faith
no need to return; shall be considered
as depositary; unless there is stipulation 2. IMMOVABLE
to the contrary
1. First to register in good faith
=========================================
2. No inscription, first to possess in good
TOPICS UNDER THE SYLLABUS faith
3. No inscription and no possession in

good faith – Person who presents
oldest title in good faith
4. Double Sale
========================================= 4. Good Faith - one who buys property
without notice that another person
4. DOUBLE SALE
has a right or interest in such
GENERAL RULE: FIRST IN TIME, PRIORITY IN property; one who has paid price
RIGHT before notice that another has claim
When does it apply: when not all requisites or interest
embodied in Art. 1544 concur.

401
If
the condition is in the nature of a promise that it
III. LIS PENDENS – notice that subject matter is should happen, the non-performance of such
in litigation condition may be treated by the other party as
breach of warranty.
IV. ADVERSE CLAIM – notice that somebody is
claiming better right 2. Effect if buyer has already sold the
goods
V. POSSESSION - Both actual or constructive
GENERAL RULE: The unpaid seller’s right to
VI. REGISTRATION: any entry made in the lien or stoppage in transitu remains even if
books of the registry, including both buyer has sold the goods
registration in its ordinary and strict
sense, and cancellation, annotation, and EXCEPTION:
even marginal notes. It is the entry made • When the seller has given consent
in the registry which records solemnly thereto, or
and permanently the right of ownership
and other real rights. • When the buyer is a purchaser in good
faith for value of a negotiable document
• Registered under Torrens system of title.
1544 applies
• Not registered under the Torrens

system 1544 still applies =========================================
If 2nd sale is a judicial sale (by way of levy on G. TRANSFER OF OWNERSHIP

execution), buyer merely steps into the
shoes of the judgment debtor. Outside of 4. Property Registration Decree
such situation – must apply to conflicting
sales over the same unregistered parcel of =========================================
land. If sale 1 occurs when land is not yet
registered and sale 2 is done when land is 4. PROPERTY REGISTRATION DECREE
already registered – apply FIRST IN TIME,
PRIORITY IN RIGHT. END OF DISCUSSION ON TOPIC
Good faith must concur with registration. To ================================
be entitled to priority, the second purchaser H. RISK OF LOSS
must not only establish prior recording of his ================================
deed, but must have acted in good faith. TOPICS UNDER THE SYLLABUS
Gabriel v. Mabanta, [GR 142403, March
26, 2003]
H. Risk of Loss
CONDITION 1. General Rule (Arts. 1263, 1189)
1. Effect of Non-Fulfillment of Condition 2. When loss occurred before
The other party may perfection
a. refuse to proceed with the contract 3. When loss occurred at time of
perfection (Arts. 1493 and 1494)
b. proceed with the contract, waiving the
4. When loss occurred after
performance of the condition
perfection but before delivery

401
5. When ownership is transferred 3. AFTER PERFECTION BUT BEFORE
(Art. 1504) DELIVERY
• Loss – confused state

=========================================
• Paras: BUYER
• Tolentino: SELLER
H. RISK OF LOSS
• Deterioration and fruits - Buyer
========================================= bears loss;
1. GENERAL RULE 4. AFTER DELIVERY

• Legal consequences from point of perfection
are the same in both legal systems: upon • Res perit domino
perfection of an unconditional contract of
• Delivery extinguishes ownership vis-
sale involving specific or determinate
a-vis the seller and creates a new
subject matter, the risk of loss deterioration
one in favor of the buyer
and the benefits of fruits and improvements,
were fro the account of the buyer.
H. RISK OF LOSS
• If Subject matter is GENERIC, Simply replace
item. ================================
I. DOCUMENTS OF TITLE
================================
WHO BEARS RISK OF LOSS/
DETERIORATION/ FRUITS:
I. Documents of Title
1. BEFORE PERFECTION 1. Definition (Art. 1636)
• Res perit domino
2. Purpose of documents of title
3. Negotiable documents of title
• Owner is seller so seller bears risk of 4. Non-negotiable documents of
loss title
5. Warranties of seller of
2. AT PERFECTION documents of title (Art. 1516)
6. Rules on levy/garnishment of
• Res perit domino goods (Arts. 1514, 1519, 1520)
• Contract is merely inefficacious
because loss of the subject matter =========================================
does not affect the validity of the
sale TOPICS UNDER THE SYLLABUS
• Seller cannot anymore comply with I. DOCUMENTS OF TITLE

obligation so buyer cannot anymore
be compelled. 1. Definition
=========================================

401
1. DEFINITION
Even if face of instrument says NON-
DOCUMENTS OF TITLE NEGOTIABLE, it is still NEGOTIABLE;
1. Not creation of law but by merchants to allow limiting words does not destroy
them to deal with merchandise without having negotiability.
to physically carry them around
2. Pertains to specific type of movables only: If order instrument and no endorsement
GOODS was made – equivalent to assignment
a. Documents of title serve two (2)
functions: =========================================
i. Evidence of existence and TOPICS UNDER THE SYLLABUS

possession of goods described
therein I. DOCUMENTS OF TITLE
ii. Medium by which seller is able to
4. Non-negotiable documents of title
transfer possession of goods
=========================================
3. A document of title which states that the
goods referred to therein will be delivered to the
4. NON-NEGOTIABLE DOCUMENTS OF
bearer, or to the order of any person named in
such document TITLE
4. Negotiable by delivery or indorsement
Effects of Unauthorized Negotiation
========================================= The validity of the negotiation of a negotiable
document is not impaired by the fact that
TOPICS UNDER THE SYLLABUS negotiation was done in breach of duty or that
the owner of the document was deprived of the
same by loss, theft, accident, fraud, mistake if
I. DOCUMENTS OF TITLE the person to whom the document is delivered
is in good faith and without notice of the said
2. Purpose of documents of title irregularities.
========================================= Important Considerations

1. Negotiation gives better right than
2. PURPOSE OF DOCUMENTS assignment
=========================================
2. Assignee takes document with defects of
TOPICS UNDER THE SYLLABUS the assignor
3. Obligation of bailee – bailee is

immediately bound to the document
3. Negotiable documents of title
=========================================
=========================================
3. NEGOTIABLE DOCUMENTS OF TITLE
1. Deliver to bearer
(negotiation by mere delivery) 5. Warranties of seller of documents
of title
2. Deliver to specific
person or his order (negotiation by =========================================
endorsement + delivery)
Warranties on Negotiation

401
1. The document is genuine Transferor/holder Acquires title to
acquires title to goods against
2. He has legal right to negotiate or goods transferor
transfer it
Bailee has direct Acquires right to
3. He has knowledge of no fact which would obligation to holder notify bailee so
impair the validity or worth of the as if directly dealt that he acquires
document with him obligation of bailee
to hold goods for
4. He has right to transfer title to goods and him
goods are merchantable/fit
========================================= A. SALE BY NON-OWNER OR BY ONE

HAVINGVOIDABLE TITLE
1. PERFECTION STAGE
a. Sale by owner – VALID
6. Rules on Levy or Garnishment of
b. Sale by non-owner – VALID;
Goods
c. Reason why both sales are valid:
=========================================
ownership is necessary only at time
6. Rules of Levy/Garnishment of Goods when transfer title to goods; at
Covered by Documents of Title perfection stage, no obligation on
part of seller to transfer ownership
• NON NEGOTIABLE:
d. Law on estoppel further bolsters it:
o Notification is operative act to transfer title passes by operation of law to
title/possession of goods in favor grantee when person who is not
assignee owner of the goods sold delivers it
and later on acquires title thereto
o Before notification – can still be
garnished e. Since valid, action to annul is
improper; there is already a
perfected contract
• NEGOTIABLE:
o Cannot be levied or garnished when 2. CONSUMMATION STAGE

documents are already with purchaser in
a. Contract of sale is valid because it
good faith, unless:
has passed perfected stage, despite
o Document is first surrendered seller not being the owner or seller
having no authority to sell
o Document is pounded by court
b. What is void is the transfer of title/
o Negotiation is enjoined ownership did not pass
NEGOTIATION ASSIGNMENT c. Effect: buyer acquired no better right

than transferor
d. Legal effect: CAVEAT EMPTOR –

BUYER BEWARE

401
e. Sale of co-owner of whole property or J. REMEDIES OF UNPAID
definite portion
SELLER
GENERAL RULE: ================================
 Co-owner sells whole property prior to TOPICS UNDER THE SYLLABUS
partition – sale of property itself is void but
valid as to his spiritual share J. Remedies of an Unpaid Seller
1. Definition of unpaid seller (Art.
 Co-owner sells definite portion to partition –
sale is void as to other co-owner but valid as 1525)
to his spiritual share if the buyer would have 2. Remedies of unpaid seller
still bought such spiritual share had he
known that the definite portion sold would
not be acquired by him. =========================================

EXCEPTIONS TO THE RULE ON THE EFFECT
OF SALE OF A DEFINITE PORTION BY A CO- J. REMEDIES OF UNPAID SELLER
OWNER
1. Subject matter is indivisible in nature or by 1. Definition of unpaid seller
intent;
2. Sale of a particular portion of a property is =========================================
with consent of other co-owners;
3. Co-owner sells 1 of 2 commonly-owned lands 1. DEFINITION OF UNPAID SELLER
and does not turn over ½ of the proceeds, other
co-owner, by law and equity, has exclusive claim
GENERAL RULE: Any man may not take law in
over remaining land.
his own hands, must seek remedy through
B. SALE BY SELLER WITH VOIDABLE TITLE courts.
IN GOOD FAITH and WITHOUT NOTICE OF
EXCEPTION:
THE DEFECT
• DOCTRINE OF SELF HELP
1. PERFECTION STAGE
• SPECIAL REMEDIES
a. Valid sale – buyer acquires title of goods
2. CONSUMMATION STAGE REQUISITES:

1. Subject matter – goods
o Valid sale – if title has not yet been 2. Seller is unpaid – not completely paid or
received negotiable instrument under a
avoided, buyer buys goods under following
condition and condition has been breached by
condition: reason of dishonor
3. Physical possession is with seller
• in good faith
=========================================
• for value
• without notice of seller’s defect
of title J. REMEDIES OF UNPAID SELLER
END OF DISCUSSION ON TOPIC 2. Remedies of unpaid seller

=========================================
================================
2. REMEDIES OF UNPAID SELLER

401
•
The following are the special remedies of unpaid G
seller: oods are in transit
1. Possessory lien
2. Stoppage in transitu • Requisites when goods are in transit
3. Special right of re-sale
4. Special right to rescind 1. From the time goods are
delivered to carrier for purpose of
NOTE: Hierarchical Application - only when
transmission to buyer
unpaid seller has exercised possessory lien or
stoppage in transitu can the seller proceed with 2. Goods rejected by buyer and
his other special rights of resale or to rescind. carrier continues to possess them
Possessory Lien
When goods no longer in transit
1. Seller not bound to deliver if buyer has
not paid him the price 1. Reached point of destination
2. Right to retain; cannot be availed when 2. Before reaching destination, buyer obtains
seller does not have custody delivery of the goods
3. Exercisable only in following 3. Goods are supposed to have been delivered to

circumstances: buyer but carrier refused
a. goods sold without stipulation as to 4. Shown by seller that buyer is insolvent (failure
credit to pay when debts become due)
b. goods sold on credit but term of

credit has expired How is right exercised
c. buyer becomes insolvent 1. Obtain actual possession of goods
d. When part of goods delivered, may 2. Give notice of claim to carrier / bailee
still exercise right on goods in possession thereof
undelivered
3. Notice by seller to buyer is not
required; notice to carrier is essential
Instances when possessory lien lost:
1. seller delivers goods to carrier for

transmission to buyer without III. Special Right to Resell the Goods
reserving ownership in goods or right
to possess them 1. Goods are perishable
2. buyer or his agent lawfully obtains 2. stipulated the right of resale in case buyer
possession of goods defaults in payment
3. Waiver 3. Buyer in default for unreasonable time
4. loses lien when he parts with goods 4. Notice by seller to buyer not essential
(still has stoppage in transitu)
Why special? There are things which seller
5. notice by seller to buyer not essential
cannot do in ordinary sale:
Stoppage In Transitu

401
A. ownership is with buyer but seller TOPICS UNDER THE SYLLABUS
can sell goods
K. PERFORMANCE OF CONTRACT
B. title accorded to buyer is destroyed
even without court intervention 1. Delivery of thing sold
=========================================
Special Right to Rescind
1. DELIVERY OF THING SOLD
1. Expressly stipulated
A. MOVABLES
2. Buyer is in default for unreasonable time
a. Delivery of thing plus accessories
3. Notice needed to be given by seller to buyer and accessions in the condition in
which they were upon the perfection
of the contract including the fruits
Why special – ownership of goods already with
b. When the seller delivers to the buyer
buyer but seller may still rescind; ownership is
a quantity of goods LESS than he
destroyed even without court intervention but in
contracted to sell, buyer has the
ordinary sale, need to go to court to destroy
option to reject or accept it.
transfer of ownership
a.When accepts with knowledge
Remedies of Buyer
that seller is not going to perform
When Seller fails to deliver, buyer may seek contract in full, he must pay at
SPECIFIC PERFORMANCE WITHOUT GIVING price stipulated
SELLER OPTION TO RETAIN GOODS ON PAYMENT
b. When accepts and
OF DAMAGES
consumes before knowledge that
buyer will not perform contract in
full, liable only for fair value of
J. REMEDIES OF UNPAID SELLER
goods delivered
================================
c. When seller delivers to the
K. PERFORMANCE OF buyer a quantity of goods
CONTRACT LARGER than he contracted
================================ to sell the buyer has the
TOPICS UNDER THE SYLLABUS following options:
i. Accept per contract and reject

K. Performance of Contract the rest
1. Delivery of thing sold
(1) Sale of movables (Arts. 1522, ii. Accept the whole – pay price
stipulated
1537, 1480)
(2) Sale of immovables (Arts. iii. Eject whole if subject matter is
1539, 1543) indivisible
(3) Inspections and Acceptance
d. When the seller delivers to
2. Payment of price
the buyer the goods he
contracted to sell, MIXED with
========================================= goods of a different
description not included in

401
the contract, buyer has 2 ii.If Less in area:
options:
• Rescission
i. Accept good w/c are in
accordance with contract and • Proportional reduction of price:
reject the rest LACK IN AREA SHLD NOT BE LESS
THAN 1/10 OF AREA AGREED
ii. Reject goods entirely – if UPON
indivisible
iii. If Greater in area:
Obligations of a Vendor (Art. 1537)
 Accept per stipulation and
1. To deliver the subject matter reject the rest
2. To deliver the fruits and accessories
 Accept whole area – pay
at contract rate
 Those which pertains to the vendee
from the day on the perfection of
 Not applicable to judicial
contract
sales
3. To preserve the subject matter
iv. Sold for lump sum
 In the condition in which they were
upon the perfection of the contract. • When price per unit not
indicated
Article 1480. Any injury to or benefit from the
• If area delivered is either
thing sold, after the contract has been
greater or lesser – price will
perfected, from the moment of the perfection of
not be adjusted accordingly
the contract to the time of delivery, shall be
governed by articles 1163 to 1165, and 1262.
• The actions arising from above in delivery of
This rule shall apply to the sale of fungible
immovables shall prescribe in six months,
things, made independently and for a single
counted from the day of delivery.
price, or without consideration of their weight,
number, or measure. •
Should fungible things be sold for a price fixed C. INSPECTIONS AND ACCEPTANCE
according to weight, number, or measure, the
risk shall not be imputed to the vendee until Accept delivery of thing sold
they have been weighed, counted, or measured
and delivered, unless the latter has incurred in • Where to accept: at time and
delay. place stipulated in the contract; if
none specified – at the time and
B. IMMOVABLES place of delivery goods;
o Sold per unit or number • There is acceptance when: He

intimates to seller that he has
i. If the sale should be made
accepted
with statement of its area, rate at
certain price, deliver all that may • When delivered and does any
have been stated in the contract act inconsistent with ownership
if impossible, remedies of buyer: of seller

401
• Retains without intimating to TOPICS UNDER THE SYLLABUS
seller that he has rejected
L. WARRANTIES
1. Express warranties
=========================================
=========================================
1. EXPRESS WARRANTIES
K. PERFORMANCE OF CONTRACT
I. Condition
2. Payment of price
1. When a contract contains a condition, the
========================================= non happening of which would not constitute
a breach but extinguishes the obligation
2. PAYMENT OF PRICE
2. However, if party to the sales contract has
• Buyer is obligated to pay price according to promised that the condition should happen
terms agreed upon regarding time, place and or be performed, the non-performance of
amount which may be treated by parties as breach
• If payment of interest is stipulated – must pay; if

amount of interest not mentioned – apply legal II. Warranties
rate
A statement or representation made by the
seller contemporaneously and as a part of the
contract of sale, having reference to the
When buyer defaults – constitutes breach: character, quality, or title of the goods, and by
subject to specific performance/rescission and which he promises or undertakes to insure that
damages; interest to be paid also from default certain facts are or shall be as he then
represents
K. PERFORMANCE OF CONTRACT Express Warranties
REQUISITES:
================================
1. It must be an affirmation of fact or any
L. WARRANTIES promise by seller relating to the subject
================================ matter of sale
2. Natural tendency of affirmation or
promise is to induce buyer to purchase
L. Warranties subject matter
1. Express warranties
2. Implied warranties (Art. 1547) 3. Buyer purchases the subject matter
3. Effects of warranties relying thereon
4. Effects of waivers 4. When breached, seller is liable for
5. Buyer’s options in case of breach damages
of warranty (Art. 1599)
=========================================

401
1.
========================================= V
alue of the thing at the time of eviction;
2. Income or fruits if he has been ordered to
L. WARRANTIES deliver the to the party who won the suit
2. Implied warranties 3. Cost of the suit
========================================= 4. Expenses of the contract; and
2. Implied Warranties 5. Damages and interests if the sale was in bad

Deemed included in all contracts of sale whether faith
parties are actually aware or not, whether they
were intended or not; by operation of law
Partial Eviction
1. Warranty that seller has a right to sell
1. To enforce vendor’s liability for eviction
• Refers to consummation stage since (VICED);
in consummation stage, it is where
ownership is transferred by tradition 2. To demand rescission of contract.
• Not applicable to sheriff, auctioneer, a. No appeal needed nor a need for buyer
mortgagee, pledge to resist eviction for right to accrue; it is
enough that the aforementioned
requisites are complied with
2. Warranty against eviction
aa Implied, unless contrary b. Warranty cannot be enforced until
provision appears in contract aforementioned requisites concur
aa When ownership is transferred, c. Applies to judicial sale; judgment debtor

buyer shall enjoy the legal and peaceful responsible for eviction unless otherwise
possession of the thing decreed in judgment
d. Vendor not liable for eviction if adverse

aa Requisites of breach of
possession had been commenced before
warranty against eviction:
sale but prescriptive period is completed
• Buyer is evicted in whole or in part after transfer
from the subject matter of sale
e. Rights of buyer when deprived of only
• There is a final judgment part of the subject matter but would not
have bought such part if not in relation
• Basis of eviction is a right prior to for the whole:
sale or an act imputable to vendor
1. Rescission
• Seller has been summoned in the
2. Mutual restitution
suit for eviction at the instance of
buyer; or made 3rd party defendant 3. Warranty against encumbrances (non-
through 3rd party complaint brought
apparent)
by buyer
REQUISITES:
Vendor’s liability shall consists of (Total a. Immovable sold is encumbered with non–
Eviction) (VICED) apparent burden or servitude not
mentioned in the agreement

401
b. Nature of non–apparent servitude or δ. Seller is not aware - seller should return
burden is such that it must be presumed price and interest and refund expenses
that the buyer would not have acquired it (no damages)
had he been aware thereof
ε. Buyer may elect between withdrawing
c. When breach of warranty exist: buyer may from contract or demanding
ask for rescission of indemnity proportionate reduction of price with
damages in either case
d. Warranty not applicable when non–
apparent burden or servitude is recorded φ. Applicable to judicial sale except that
in the Registry of Property – unless there is judgment debtor not liable for damages
express warranty that the thing is free
from all burdens and encumbrances γ. Action to prescribe 6 months from
delivery of subject matter
5. Defects on animals
α. Even in the case of professional
4. Warranty against hidden defects
inspection but hidden defect is of such
• SELLER does not warrant patent nature that expert knowledge is not
defect; caveat emptor sufficient to discover it - defect shall be
considered as REDHIBITORY
• Except when hidden
β. If vet fails to discover through ignorance
1. subject matter may be movable or or bad faith, he is liable for damages
immovable
χ. Sale of animals on teams (2 or more)
2. nature of hidden defect is such that it
should render the subject matter • When only one is defective, only one
unfit for the use of which it was is prohibited and not the others
intended or should diminish its
• Exception: when it appears buyer
fitness
would not have purchased the team
3. had the buyer been aware, he would without the defective one
not have acquired it or would have
given a lower price • Apply to sale of other things
α. When defect is visible or even if not δ. Animals at fair or public auction

visible but buyer is an expert by reason
• No warranty against hidden defects
of his trade or profession, seller is not
liable
ε. Sale of animals with contagious disease
β. Obligation of seller for breach depends is void
on whether he has knowledge of such
φ. Sale of unfit animals
defect or not
• Void if use / service for which they are
χ. Seller is aware – seller should return
acquired has been stated in the
price and refund expenses of contract
contract and they are found to be
with damages
unfit therefor

401
• Prescription of action: 40 days from L. WARRANTIES
date of delivery to buyer
3. Effects of warranties
• If sale is rescinded, animals to be
returned in same condition when =========================================
they were acquired; buyer shall
answer for injury / loss due to his 3. EFFECTS OF WARRANTIES
fault
=========================================
• Buyer may elect between
withdrawing from sale and
demanding proportionate reduction
L. WARRANTIES
of price with damages in either case
4. Effects of waivers
Specific Implied Warranties in the Sale of =========================================

Goods
4. EFFECTS OF WAIVER
Waiver in Warranty against eviction -
A. Warranty as to fitness and quality;
Parties may increase or diminish implied
requisites:
warranty against eviction; but effect depends on
1. Buyer makes known to seller the good faith or bad faith on the part of the seller.
particular purpose for which goods are
o Seller in bad faith and there is waiver
acquired and it appears that the buyer
against eviction – null and void
relied on the seller’s skill or judgment
o Buyer without knowledge of a particular
2. Goods are bought by description from
seller who deals in goods of that risk, made general renunciation of
description warranty – not waiver but merely limits
liability of seller in case of eviction (pay
3. in case of sale of specified article under its value of subject matter at time of eviction)
patent or trade name, no warranty unless
there is a stipulation to the contrary o Buyer with knowledge of risk of eviction
assumed its consequences and made a
4. measure of damage: difference between waiver – vendor not liable (applicable only
value of goods at time of delivery and to waiver of warranty against eviction)
value they would have had if they had
answered to the warranty 1. Waiver to a specific case of eviction -
wipes out warranty as to that specific
risk but not as to eviction caused by
other reasons.
SALE OF GOODS BY SAMPLE
If seller is a dealer in goods of that kind, there is
Waiver against Hidden Defects
an implied warranty that the goods shall be free i. If there has been a stipulation exempting
from defect rendering them unmerchantable seller from hidden defects
which would not be apparent on reasonable
examination of the sample ii. If seller not aware of hidden defects –
loss of the thing due to such defect will
========================================= not make seller liable

401
iii. If seller aware – waiver is in bad faith, 4. Remedies of the Buyer
thus seller still liable (1) Sale of movable
Buyer’s Option in Case of Breach of (2) Sale of immovables
Warranty
1. Accept goods and set up breach of =========================================
warranty by way of recoupment in
diminution or extinction of the price. TOPICS UNDER THE SYLLABUS
2. Accept goods and maintain action against M. BREACH OF CONTRACT
seller for damages
1. Remedies of the seller
3. Refuse to accept goods and maintain
action against seller for damages =========================================
4. Rescind contract of sale and refuse to 1. REMEDIES OF THE SELLER
receive goods/return them when already
received. Remedies of Unpaid Seller (Art. 1484)
When rescission by buyer not allowed: 1. Exact fulfillment should the buyer fail to pay.
1. If the buyer accepted the goods knowing
the breach of warranty WITHOUT protest 2. Cancel the sale if buyer fails to pay 2 or
more installments.
2. If he fails to notify the seller within a
reasonable time of his election to rescind 3. Foreclose on chattel mortgage if buyer fails
to pay 2 or more installments
3. If he fails to return or offer to return the
goods in substantially as good condition
as they were in at the time of the =========================================
transfer of ownership to him
L. WARRANTIES M. BREACH OF CONTRACT
================================ 2. Recto Law: Sale of Movables on

M. BREACH OF CONTRACT Installment
================================ =========================================
TOPICS UNDER THE SYLLABUS 2. RECTO LAW: SALE OF MOVABLES ON

INSTALLMENT
M. Breach of Contract Incidents:
1. Remedies of the seller (Arts. 1. If buyer chooses foreclosure, no further
1636, 1594) action against buyer to recover any
(1) Sale of movables unpaid balance of the price
2. Recto Law: sale of movables on 2. When is the law applicable? Sale on

installment (Arts. 1484-1486) movables by installment
3. Sale of immovables
o Sale on installment:
(1) PD 957, sec. 23, 24
payment by several partial payments
(2)Maceda Law: sale of
in small amount
immovables on Installment

401
Rationale of the law: Buyer is lulled into
thinking that he could afford because of small
M. BREACH OF CONTRACT
amounts per installment and at the same time
remedy abuse of commercial houses
3. Sale of Immovables
Nature of remedies: alternative and not
=========================================
cumulative
3. SALE OF IMMOVABLES
Coverage: sale and financing transaction and
contracts of lease with option to purchase Remedies of Seller
GENERAL RULE: If already chose specific Anticipatory breach
performance, can no longer choose other
remedies 1. Seller has reasonable grounds to fear loss of
immovable sold and its price, sue for
EXCEPTION: After choosing, it has become RESCISSION
impossible, rescission may be pursued
2. Non–payment of price, sue for RESCISSION
• The fact that the seller did not foreclose
the chattel mortgage constituted on the
movable purchased on credit, but opted IMMOVABLES (BY INSTALLMENT)
specific performance, with a plea for a
writ of replevin, does not amount to a Art 1592 – Applies only to contract of sale
foreclosure of the chattel mortgage to be
MACEDA LAW
covered by Art. 1484. Tajanglangit v.
Southern Motors, [101 Phil. 606] 1. applies to COS and CTS and Financing
2. Coverage: REAL ESTATE – defined space

Rescission vs. CONDO – not defined space (w/
1. When chosen, there is correlative obligation
common areas)
to restitute
2. But stipulations that installments paid are
forfeited are valid if not unconscionable 1. Excluded:
3. Deemed chosen when:
- Notice of rescission is sent a. Industrial
- Takes possession of subject matter of sale b. Commercial
- Files action for rescission c. Sale to tenants under agrarian

laws
- Barring effect on recovery of balance
=========================
Foreclosure ================
i. Barring effect on recovery of balance
ii. Extent of barring effect: purchase price TOPICS UNDER THE SYLLABUS
iii. Exception: mortgagor refuses to deliver
property to effect foreclosure, recover also
expenses incurred in attorneys fees, etc. M. BREACH OF CONTRACT
(Perverse Buyer-Mortgagor)
3. Remedies of the Buyer
========================================= =========================================
4. REMEDIES OF THE BUYER

401
• In case of subdivision or condo projects,
suspend payment.
Purpose of law - Protect buyers in
• If real estate developer fails to comply installments against oppressive conditions
with obligation according to approved
Notice needed - waiver thereof if
plan:
oppressive
- RESCIND
Applies to contracts even before law
- SUSPEND PAYMENT UNTIL SELLER was enacted
COMPLIES
− Stipulation to contrary is void
Rights Granted to Buyers:
o Buyer paid at least 2 years installment Other rights:
1. Pay without interest the balance o Sell rights to another

within grace period of 1 month for
o Reinstate contract by updating
every year of installment payment
during grace period and before
2. Grace to be exercised once every 5 actual cancellation
years
o Deed of Sale to be done by notarial
3. When no payment - cancelled; buyer act
entitled to 50% of what he has
paid + if after 5 years of o To pay in advance any installment or
installments, 5% for every year but the full balance of price anytime
not to exceed 90% of total payments without interest
made
o Have full payment annotated in
4. Cancellation to be effected 30 days certificate of title
from notice and upon payment of
cash surrender value
REMEDY OF RESCISSION IN CONTRACTS
COVERING IMMOVABLES (Articles 1191 &
o Buyer paid less than 2 years 1592)
installment
GENERAL RULE: Judicial
1. 1 Grace period is 60 days from date
st
EXCEPTION: Extra judicial Rescission allowed
installment became due
but SUBJECT to COURT Confirmation.
2. 2nd grace period of 30 days from
a. allowed if stipulated; burden to sue
notice of cancellation/demand for
shifts to party who does not like
rescission
rescission
 buyer can still pay within the 30
b. court still has final say as to propriety
day period
of rescission
 with interest c. Forfeiture of amounts valid being in
nature of penal clause
 No payment after 30 day period,
can cancel.

401
• Contract of Sale – Rescission is 1. Payment or performance
Applicable
2. Loss of the subject matter
• Contract to Sell – Rescission not
3. Condonation or remission
Applicable
4. Confusion or merger of rights of creditor
• Non–payment of purchase price
and debtor
would automatically cancel even
without further action for rescission 5. Compensation
Exception: If subject matter is residential lots, 6. Novation

law on rescission applies when there is
substantial breach. Maceda law applies. 7. Annulment
END OF DISCUSSION ON TOPIC 8. Rescission
M. BREACH OF CONTRACT
9. Fulfillment of a resolutory condition
================================
10. Prescription
N. EXTINGUISHMENT OF SALE
================================
TOPICS UNDER THE SYLLABUS =========================
================
N. Extinguishment of Sale
1. Causes (Arts. 1600, 1231) TOPICS UNDER THE SYLLABUS
2. Conventional redemption (Art.
1601)
3. Equitable mortgage (Arts. 1602- 2. Conventional Redemption
1604) =========================================
4. Distinguish from option to buy
(Art. 1602) 2. CONVENTIONAL REDEMPTION
5. Period of redemption (Art. 1606) • Only extinguishes obligations pertaining
6. Exercise of the right to redeem to contract of sale, not extinguish
(Art. 1616) contract itself; only applies to contract of
7. Legal redemption (Art. 1619) sale
8. Age redemption (Art. 1619)
• The right which the vendor reserves to
himself to reacquire the property sold
========================================= provided he returns to the vendee:
a. The price of the sale,

b. Expenses of contract,
c. Other legitimate payments,
1. Causes
========================================= d. The necessary and useful expenses
made on the thing sold
1. CAUSES
e. And fulfills other stipulations which may
I. GROUNDS (same grounds whereby
obligations in general are extinguished) have been agreed upon

401
• The right is exercised only be seller in NOTE: In case of doubt – in determining
whom right is recognized in the contract whether it is an equitable mortgage or a sale a
or by any person to whom right was retro, the sale shall be construed as an equitable
transferred; must be in the same mortgage.
contract
2.What to Look for in Determining Nature of
Contract
=========================
a. Language of the contract
================
b. Conduct of parties – to reveal real intent
3.Remedy available to vendor: ask for
N. EXTINGUISHMENT OF SALE reformation of contract
3. Equitable Mortgage 4.Rationale behind provision on Equitable

========================================= Mortgage:
3. EQUITABLE MORTGAGE a. Circumvention of usury law
One which lacks the proper formalities, form of b. Circumvention of prohibition against
words, or other requisites prescribed by law for pactum commissorium – creditor cannot
a mortgage, but shows the intention of the appropriate the things given by way of
parties to make the property subject of the pledge or mortgage; remedy here is
contract as security for a debt and contains foreclosure. The real intention of parties
nothing impossible contrary to law. Cachola v. is that the pretended purchase price is
CA, [208 SCRA 496] money loaned and to secure payment of
the loan, sale with pacto de retro is
1.A contract with right to repurchase is drawn up
deemed to be an equitable mortgage if
the following requisites concur (IPERTI): =========================
================
a. Price of sale with right to repurchase is
unusually inadequate TOPICS UNDER THE SYLLABUS
b. Seller remains in possession as lessee or
otherwise
4. Distinguish from option to buy
c. Upon or after expiration of right to
=========================================
repurchase, another instrument
extending the period of redemption or
granting new period is executed 4. DISTINGUISH FROM OPTION TO BUY
d. Buyer retains for himself a part of the OPTION TO PURCHASE - Right to repurchase
purchase price the thing sold granted to the vendor in a
separate instrument from the deed of sale
e. Seller binds himself to pay taxes on
thing sold =========================
================
f. Real intention of parties is to secure the
payment of a debt or performance of TOPICS UNDER THE SYLLABUS
other obligation

401
5. Period of Redemption TOPICS UNDER THE SYLLABUS
=========================================
5. PERIOD OF REDEMPTION 6. Exercise of the Right to Redeem

=========================================
a. No period agreed upon – 4 years from date
of contract
b. Period agreed upon – should not exceed 10 EFFECT WHEN THERE IS NO REDEMPTION
years; if it exceeded, valid only for the first MADE
10 years.
i. Jurisprudence before the NCC: buyer a
c. When period to redeem has expired and retro automatically acquires full
there has been a previous suit on the ownership
nature of the contract – seller still has 30
days from final judgment on the basis that ii. Under present art 1607: there must be
contract was a sale with pacto de retro: judicial order before ownership of real
property is consolidated in the buyer a
d. Rationale: no redemption due to retro
erroneous belief that it is equitable
mortgage which can be extinguished by
paying the loan. HOW IS REDEMPTION EFFECTED
Seller a retro must first pay the following:
e. This refers to cases involving a transaction
where one of the parties contests or o The price of the thing sold
denies that the true agreement is one of
o Expenses of the contract and other
sale with the right to repurchase; not to
cases where the transaction is conclusively legitimate payments made by reason of
a pacto de retro sale. the sale
f. Example: Where a buyer a retro honestly o Necessary and useful expenses made on
believed that he entered merely into an the thing sold
equitable mortgage, not a pacto de retro
o Valid tender of payment is sufficient
transaction, and because of such belief he
had not redeemed within the proper o Mere sending of notice without valid
period. tender is insufficient
o Failure to pay useful and unnecessary

expenses entitles vendee to retain land
NOTE: When period has expired and seller
unless actual reimbursement is made
allowed the period of redemption to expire –
seller is at fault for not having exercised his
rights so should not be granted a new period IN CASE OF MULTI-PARTIES
1. When an undivided thing is sold because
Tender of payment is SUFFICIENT to compel co-owners cannot agree that it be
redemption, but is not in itself a payment that allotted to one of them – vendee a retro
relieves the vendor from his liability to pay the may compel the vendor to redeem the
redemption price. Paez v. Magno, G.R. No. :- whole thing
792, April 27, 1949
2. When an undivided thing is sold by co-
========================= owners / co-heirs, vendors a retro may
================ only exercise his right over his

401
respective share; vendee a retro may =========================
demand that they must come to an ================
agreement first and may not be
compelled to consent to a partial TOPICS UNDER THE SYLLABUS
redemption
3. When rights of co-owners over an
undivided thing is sold as regards to 7. Legal Redemption
their own share – vendee retro cannot =========================================
compel one to redeem the whole
property 7. LEGAL REDEMPTION
4. Should one of the co-heirs/co-owners LEGAL REDEMPTION

succeed in redeeming the property – • Only applies to contracts of sale.
such vendor a retro shall be considered
as trustee with respect to the share of • The right to be subrogated upon the same
the other co-owners/co-heirs. terms and conditions stipulated in the
contract, in the place of one who acquires
the thing by (1) purchase OR (2) by dation in
FRUITS payment OR (3) by other transaction
What controls is the stipulation between parties whereby ownership is transmitted by
as regards the fruits;
onerous title.
If none:
a. At time of execution of the sale a retro • Types of Legal Redemption:
there are visible or growing fruits – there
shall be no pro-rating at time of
a. Among co-heirs
redemption if no indemnity was paid by
the vendee a retro i. Any of the heirs sell his hereditary
rights to stranger before partition
b. At time of execution sale a retro there be
no fruits but there are fruits at time of ii. Any of the co-heirs may be subrogated
redemption – pro-rated between vendor to the rights of the purchaser by
a retro and vendee a retro giving the redeeming said hereditary right:
vendee a retro a part corresponding to reimburse buyer of the price of the
the time he possessed the land. sale
iii. Co-heirs has 1 month from receipt of

PRE-EMPTION REDEMPTION notice in writing
1. Arises before sale Arises after sale
2. No rescission There can be
because no sale exists rescission of the b. Among co-owners
yet original sale
3. The action is Action is directed i. any or all of co-owners sells their
directed against against buyer shares to 3rd person
prospective seller
ii. any co-owner may exercise right of
redemption by paying reasonable price
of property to the buyer
iii. if 2 or more co-owners desire to

exercise right of redemption, they may
only do so in proportion to the share

401
they respectively have in thing owned a. Redemption of homesteads
in common
b. Public Land Act
c. Among adjoining owners c. Land acquired under free patent

homestead subject to repurchase by
i. Rural land
wife, legal heirs within 5 years from date
o Where piece of rural land has an area of conveyance granted by law, need not
be stipulated
not exceeding 1 hectare, adjoining
owner has right to redeem unless
grantee does not own a rural land 1. Redemption in tax sales
o If two or more adjacent lot owners desire i. in case of tax delinquency/failure to

to exercise right to redeem, owner of pay tax assessments, property is
adjoining lot with smaller area shall be foreclosed
preferred
ii. delinquent payer has 1 year from date
o If two or more adjacent lit owners desire of sale to redeem by paying to the
to exercise right to redeem and both revenue District Officer the amount of
have same lot area, one who first tax delinquencies, and interest or
requested shall be granted purchase price.
2. Redemption by judgment debtor - 1 year

ii. Urban land from date of registration of certificate of
o when piece of land is small and sale to redeem by paying purchaser at
cannot be used for any practical public auction with interest
purpose and bought merely for
3. Redemption in extrajudicial foreclosure -
speculation, owner of adjoining land
1 year from date of sale and registration
can redeem
4. Redemption in judicial foreclosure of
o 2 or more owners of adjoining lot
mortgage - no right to redeem is granted
desire to exercise right to redeem,
to debtor mortgagor except when
owner whose intended use is best
mortgagee is bank of a banking
justified shall be preferred.
institution 90 days after finality of
judgment
d. Sale of credit in litigation
i. when a credit or other incorporeal right 5. When Period of Redemption Begins to
in litigation is sold, debtor shall have a Run - Right of legal pre-emption of
right to extinguish it by reimbursing redemption shall be exercised within 30
the assignee for the price the latter days from notice by the seller
paid therefor plus judicial costs,
6. How exercised - tender of payment is not
interest
necessary; offer to redeem is enough.
ii. debtor may exercise right within 30
i. There is no prescribed form for an
days from the date assignee demands
offer to redeem to be properly
payment from him
effected. Hence, it can either be
through a formal tender with
Other Instances When Right of Legal consignation of the redemption price
Redemption is Granted within the prescribed period. What is
paramount is the availment of the

401
fixed and definite period within which 2. Transfers all the accessory rights (e.g.
to exercise the right of legal guaranty, mortgage, pledge, preference)
redemption.
3. Debtor can set up against the assignee
ii. Deeds of sale are not to be recorded all the defenses he could have set up
in Register of Deeds unless against the assignor
accompanied by affidavit of seller
that he has given notice to all
possible redemptioners II. WHAT MAKES ASSIGNMENT
DIFFERENT FROM SPECIES SALE?
NOTE: Written notice under Art. 1623 is 1. Technical term but basically a sale
mandatory for the right of redemption to
commence (PSC vs. Sps. Valencia, [August 2. Sale of credits and other incorporeal
19, 2003]. things
GENERAL RULE: Actual knowledge III. EFFECTS OF ASSIGNMENT

notwithstanding, written notice is still
required 1. Lack of knowledge or consent of debtor
not essential for validity but has legal
EXCEPTION: When actual knowledge is effects (“meeting of minds” in
acquired by co-heirs living in same land with
assignment contemplates that between
purchaser, or co-owner was middleman in sale
to 3rd party. assignor of the credit and his assignee)
o Art. 1623 does not prescribe any 2. Assignment of rights made w/o
distinctive method for notifying the knowledge of debtor – debtor may set up
redemptioner. Etcuban v. CA, [148 against assignee the compensation w/c
SCRA 507] would pertain to him against assignor of
all credits prior to assignment and of
========================= later ones until he had knowledge of the
================ assignment
3. Debtor has consented to assignment –

cannot set up
N. EXTINGUISHMENT OF SALE 4. Compensation unless assignor was
notified by debtor that he reserved his
8. Age Redemption right to the compensation
=========================================
5. Debtor has knowledge but no consent -
may still set up compensation of debts
9. ASSIGNMENT (See Arts . 1624 – 1634) previous to assignment but not the
subsequent ones.
I. ASSIGNMENT: The owner of a credit
transfers to another his rights and actions in
IV. TRANSFER OF OWNERSHIP
consideration of a price certain in money or
its equivalent 1. By tradition and not by perfection
1. Transfers the right to collect the full 2. By execution of public instrument
value of the credit, even if he paid a because intangibles cannot be physically
price less than such value transferred

401
3. Without necessity of delivering the whole in general but not for each
document evidencing the credit. of the various parts
4. This rule does not apply to negotiable

documents and documents of title which VII. BREACH OF WARRANTY: LIABILITIES
are governed by special laws. OF THE ASSIGNOR OF CREDIT FOR
VIOLATION OF HIS WARRANTIES
V. EFFECT OF PAYMENT OF DEBTOR 1. Assignor in good faith

AFTER ASSIGNMENT OF CREDIT
Liability is limited to price received,
1. Before Notice of the Assignment expenses of the contract and other
legitimate payments made by reason of
Payment to the original creditor is the assessment
valid and debtor shall be released 2. Assignor in bad faith
from his obligation
Liable ALSO for (expenses of contract
and other legitimate payments plus
2. After Notice
useful and necessary expenses)
damages
a. Payment to the original creditor is
not valid as against the assignee VIII. ASSIGNMENT OF CREDIT OR
INCORPOREAL RIGHT IN LITIGATION
b. He may be made to pay again by the
- REQUISITES:
assignee
1. There must be a sale or assignment of credit
VI. WARRANTIES OF THE ASSIGNOR OF
2. There must be a pending litigation
CREDIT
1. NO warranty against hidden defect - N/A 3. The debtor must pay the assignee:
because intangibles has no physical
a. Price paid by him AND
existence
b. Judicial costs incurred by him AND
2. He warrants the existence and legality of
credit - there is warranty except when c. Interest on the price from the date of
expressly sold as a doubtful account payment
a. NO warranty as to the solvency
4. The right must be exercised by the debtor
of debtor unless it is expressly
within 30 days from the date the assignee
stipulated OR unless the
demands (judicially or extra-judicially) payment
insolvency was already existing
from him
and of public knowledge at the
time of the assignment
NOTE:
b. Warranty shall last for 1 year only
• Presumption: buyer’s purpose is speculation
c. One who assigns inheritance and; law would rather benefit the debtor of
right w/o enumerating rights shall such credits rather than the one who merely
be answerable for his character speculates for profit.
as an heir
• When credit or incorporeal right in litigation
d. One who sells whole of certain is assigned or sold, debtor has a right to
rights for a lump sum, shall be extinguish it by reimbursing the assignee for
answerable for legitimacy of the the price the buyer paid plus interest

401
P.D. 957: LAW ON SALE OF SUBDIVISION AND
IX. Right to redeem by debtor not CONDOMINIUM
available in the following instances
(not considered speculative
1. Assignment of credit / incorporeal right to REMEDIES FOR FAILURE OF THE

co-heir or co-owner; the law does not favor DEVELOPER TO DEVELOP THE SUBDIVISION
co-ownership OR CONDOMINIUM ACCORDING TO THE
APPROVED PLAN AND TO COMPLY WITH
2. Assignment to creditor in payment for his SUCH WITHIN THE TIME LIMIT.
credit
• The buyer may desist from further payment
• Presumption is that the assignment is any installments. Also, there would be no
above suspicion; assignment is in the forfeiture of past payments in favor of the
form of dacion en pago, thus perfectly developer after due notice has been given.
legal
• The buyer may demand reimbursement of
3. Assignment to possessor of tenement or the total amount paid including amortization
piece of land which is subject to the right in interests but excluding delinquency interests,
litigation assigned with interest thereon at the legal rate. (Sec. 23,
P.D. 957)
• Purpose is to presumably preserve the
tenement Otherwise: RA 6552 (Maceda Law) will apply.
REQUISITES OF SEC 3 OF RA 6552:
END OF DISCUSSION ON TOPIC • Failure to pay installments was due to

N. EXTINGUISHMENT OF SALE reasons, other than failure of the developer to
develop the subdivision or condominium
================================ according to the approved plan and to comply
O. THE SUBDIVISION AND with such within the time limit, and,
CONDOMINIUM BUYER’S • Only covers residential lots including

PROTECTIVE DECREE condominium units, excluding, sales to tenants.
================================
• The buyer has paid at least two years of
installments
The Subdivision and Condominium

Buyer’s Protective Decree (P.D. 957)
RIGHTS OF THE BUYER UNDER RA 6552
WITH AT LEAST TWO (2) YEARS OF
INSTALLMENT:
=========================
• To pay, without additional interest, the
================
unpaid installments due within the total grace
TOPICS UNDER THE SYLLABUS period earned by him. Said grace period is fixed
at the rate of one month grace period for every
O. THE SUBDIVISION AND one year of installments payments made. Thus,
here the buyer has at least two months grace
CONDOMINIUM BUYER’S PROTECTIVE
for he should have paid at least two years of
DECREE
installments to avail of the rights under this
section.
=========================================

401
This rights can only be exercised only END OF DISCUSSION ON TOPIC
once in every five (5) years of the life of O. THE SUBDIVISION AND
the contract and its extensions, if any. CONDOMINIUM BUYER’S PROTECTIVE
DECREE
• To be refunded of the cash surrender value ================================
of this payments equal to 50% of his total
payments if the contract is cancelled. But if he P. THE CONDOMINIUM ACT
has paid five years or more, he is entitled to an
================================
increase of 5% every year and so on but the
cash surrender value shall not exceed 90% of
his total payments. McLaughlin v CA, [G.R.
No. L-57552, Oct 10, 1986] The Condominium Act (R.A. 4726)
THE ACTUAL CANCELLATION OF THE =========================

CONTRACT REFERRED TO ABOVE SHALL ================
TAKE PLACE ONLY:
1. After 30 days from receipt by the buyer of the
notice of cancellation or demand for rescission, P. THE CONDOMINIUM ACT
AND =========================================
2. Upon full payment to the buyer of the cash

R.A. 4726: THE CONDOMINIUM ACT
surrender value
Restrictions and Additional requirements on
In the computation of the total number of transfer of condominiums:
installment payments the following are included:
• It shall include the transfer or conveyance of
1. downpayment and the undivided interests in the common areas
or membership or shareholdings in the
2. deposit or option money condominium corporation.
RIGHTS OF THE BUYER UNDER RA 6552 • Membership in a condominium

WITH LESS THAN 2 YEARS OF corporation, regardless whether stock or
INSTALLMENTS: non-stock, shall not be transferable
separately from the condominium unit of
• If he has paid less than two (2) years of
which it is an appurtenance.
installments, he still has the right to pay
within a grace period of not less than • No condominium owner’s copy of the
sixty (60) days from the date the certificate of title shall, subsequent to the
installment became due. original conveyance, be registered unless
accompanied by a certificate of the
• If the buyer fails to pay the installment
management body of the project that such
due at the expiration of the grace period,
conveyance is in accordance with the
i.e. 60 days, the seller may cancel the
provisions of the declaration of restrictions
contract after 30 days from receipt by
of such project.
the buyer of the notice of cancellation or
demand for rescission of the contract by END OF DISCUSSION ON TOPIC
a notarial act. P. THE CONDOMINIUM ACT
================================
Here the buyer is not entitled to any refund

401
H. SUCCESSION of the inheritance either by will or
================================= by operation on law (Art. 782)

I. General Provisions (Arts. 774-780)
KINDS OF HEIRS
A. Definition/what is transmitted 1. Compulsory – those who succeed by
(Arts. 774, 776, 781) force of law to some portion of the
inheritance, in an amount predetermined
B. When succession occurs (Art. by law, of which they cannot be deprived
777) by the testator, except by a valid
disinheritance
C. Kinds of successors: heirs,
2. Voluntary or Testamentary – those who
devisees, legatees (Art. 782)
are instituted by the testator in his will, to
================================= succeed to the portion of the inheritance of
which the testator can freely dispose
I. GENERAL PROVISIONS 3. Legal or Intestate – those who succeed
SUCCESSION – mode of acquisition by virtue of to the estate of the decedent who dies
which the property, rights and obligations to the without a valid will, or to the portion of
extent of the value of the inheritance, of a such estate not disposed of by will
person are transmitted through his death to
another or others either by his will or by
operation of law. (Art. 774) ii. Devisees or Legatees – persons to
whom gifts of real or personal
KINDS OF SUCCESSION (Balane) property are respectively given by
virtue of a will (Art. 782)
1. Compulsory—succession to the legitime
(this prevails over all kinds) NOTE: The distinction between heirs and
devisees/legatees are important in these cases:
2. Testamentary—succession by will
a. Preterition
3. Intestate—succession in default of a will
b. Imperfect disinheritance
4. Mixed—not a distinct kind really, but a
combination of any two or all of the first c. After-acquired properties
three
d. Acceptance or non-repudiation of
successional rights
ELEMENTS OF SUCCESSION
II. Causal Element (Art. 777)
I. Subjective Element
Death of the Person – However, a
A. Decedent — person whose property is person may be presumed dead for the
transmitted through succession (Art. purpose of opening his succession (see
775) rules on presumptive death). In this
case, succession is only of provisional
B. Successors character because there is always the
chance that the absentee may be alive.
i. Heirs – those who are called to
the whole or to an aliquot portion III. Objective Element (Art. 776)

401
Inheritance – is the subject matter of it. person who died.
Succession it includes:
i. Property and transmissible rights

and obligations =================================

II. Testamentary Succession
RIGHTS EXTINGUISHED BY DEATH
(NOT TRANSMISSIBLE) A. Wills
1. Support (1) In General
2. Usufruct
(a) Definition and
characteristics (Arts. 783-787)
3. Those arising from personal (2) Testamentary capacity and
consideration intent (Arts. 796-803)
(a) Age requirement (Art. 797)
4. Personal easements (b) Soundness of mind (Arts.
798-801)
5. Partnership rights
(3) Form
6. Agency (a) Rules governing the formal
validity of wills (Arts. 17, 815-
7. Life Annuity 817, 819)
(b) Common requirements (Art.
ii. Existing at the time of his death 804)
(c) Notarial wills
(d) Holographic wills
iii. AND those which have accrued
thereto since the opening of (e) Joint wills (Arts. 818-819)
succession (Art. 781) (4) Codicils (Arts. 825-826)
(a) Definition and formal
After-Acquired Property (Art. 793) requirements
(5) Incorporate by reference (Art.
GENERAL RULE: Property acquired during the 827)
period between the execution of the will and the
(6) Revocation (Arts. 828-834)
death of the testator is NOT included among the
property disposed of with REGARD to (a) Kinds (Art. 830)
LEGACIES and DEVISEES, not to heirs. (7) Allowance and disallowance of
wills (Arts. 838-839)
EXCEPTION: When a contrary intention
expressly appears in the will (a) Probate requirement (Art.
838)
Succession distinguished from Inheritance (b) Grounds for denying
Succession Inheritance
probate (Art. 839)
=================================
Refers to the legal Refers to the
mode by which universality or
inheritance is entirety of the
transmitted to the property, rights and
persons entitled to obligations of a

401
II. TESTAMENTARY SUCCESSION iii. Determination of
whether or not the testamentary
A. WILLS disposition is to be operative
CONCEPT OF A WILL (Art. 783)
b. Acts which may be entrusted to third
1. It is an act; persons (Article 787);
2. Whereby a person is permitted; i. Distribution of specific

property or sums of money that he
3. With the formalities prescribed by law; may leave in general to specified
classes or causes; and
4. To control to a certain degree;
ii. Designation of the
5. he disposition of his estate; persons, institutions or
establishments to which such
6. To take effect after his death.
property or sums are to be given or
applied.
KINDS OF WILLS:
1. Notarial – an ordinary or attested will

3. FREE AND VOLUNTARY ACT — any vice
2. Holographic – a handwritten will affecting testamentary freedom can cause
the disallowance of the will
COMMON REQUISITES BETWEEN THE TWO

WILLS: 4. FORMAL AND SOLEMN ACT — the formalities
1. Must be in writing and are essential for validity
2. In a language or dialect known to the

testator 5. ACT MORTIS CAUSA (Art. 783)— takes effect
only after the death of the testator
CHARACTERISTICS OF A WILL: 6. AMBULATORY AND REVOCABLE during the

testator’s lifetime
1. UNILATERAL — does not need the approval
of any other person (implied in Art. 783)
7. INDIVIDUAL ACT — two or more persons
cannot make a single joint will, either for
2. STRICTLY PERSONAL ACT (Art. 784-785) their reciprocal benefit or for another
person. However, separate or individually
a. Acts which may not be left to the executed wills, although containing
discretion of third persons (Arts. 785 and reciprocal provisions (mutual wills) are not
787): prohibited, subject to the rules on
disposicion captatoria.
i. Duration or efficacy of
the designation of heirs, devisees or
legatees; 8. Executed with ANIMUS TESTANDI
ii. Determination of the

portions which they are to take, 9. Executed with TESTAMENTARY CAPACITY
when referred to by name; and
10. DISPOSITIVE OF PROPERTY

401
disposed of. EXCEPT: When a contrary
11. STATUTORY intention expressly appears on the will.
INTERPRETATION OF WILLS (Art. 788-794) NOTE: This rule applies only to legacies and
devisees and not to institution of heirs
Underlying Principle: Testacy is always
preferred to intestacy, because the former is the NOTE: The validity of a will as to its form
express will of the decedent whereas the latter depends upon the observance of the law at the
is only his implied will. TIME it was MADE (Art. 795)
1. Animus Testandi - The testator’s intent TESTAMENTARY CAPACITY—the ability as

(animus testandi), as well as giving effect to well as the power to make a will (must be
such intent is primordial. present at the TIME of EXECUTION):
EXCEPT: when the intention of the 1. All persons who are not expressly prohibited
testator is contrary to law, morals or public by law (Art. 796)
policy.
2. 18 years old and above (Art. 797)
2. In case of doubt, the interpretation by which
the disposition is to be operative or will 3. Of sound mind, at the time of its execution
sustain and uphold the will in all its parts (Art. 798); A testator is considered of sound
shall be adopted, provided that it can be mind if he knows at the time of making of
done consistently with the established rules the will the following:
of law.
a. Nature of the estate to be disposed of

3. Ambiguities in Wills – Intrinsic or extrinsic
evidence may be used to ascertain the b. Proper objects of his bounty
testatorial intent of the testator.
c. Character of the testamentary act (Art.
EXCEPT: The oral declarations of the 799)
testator as to his intentions must be
excluded because such testimony would be
hearsay.
LEGAL PRESUMPTION IN FAVOR OF
SOUNDNESS OF MIND (Art. 800):
KINDS OF AMBIGUITIES (Art. 789)
General Rule: The law presumes that every
I. Latent or Intrinsic Ambiguities—
person is of sound mind, in the absence of proof
those which do not appear on the face of
to the contrary.
the will and is discovered only by
extrinsic evidence
Exceptions:
II. Patent or Extrinsic Ambiguities—
1. When the testator, one month or less
those which appear on the face of the
before the execution of the will, was
will itself
PUBLICLY KNOWN to be INSANE (Art. 800);
2. When the testator executed the will after

being placed under guardianship Torres
4. After Acquired Property - Property
and Lopez de Bueno vs. Lopez, [48
acquired during the period between the
Phil. 772] or ordered committed, in either
execution of the will and the death of the
case, for insanity (under Rules 93 and 101,
testator is NOT included among the property

401
respectively of the Rules of Court), and • Directory Part: The place of the
before said order has been lifted. signature, i.e. the left margin; the
signature can be affixed anywhere
• Supervening capacity or incapacity does on the page.
not invalidate an effective will, nor is the will
of an incapable validated by supervening
capacity (Art. 801). C. Each and every page, except the last, must
be signed by the testator or by the person
requested by him to write his name, and by
the instrumental witnesses of the will, on the
FORMS OF WILL left margin.
COMMON FORMALITIES: Signatures on the left margin on each and
every page NOT REQUIRED:
1. Every will must be in WRITING; and
i. In the last page, when the will
2. Executed in a LANGUAGE or DIALECT
consists of two or more pages;
KNOWN to the TESTATOR (Art. 804)
ii. When the will consists of only one
SPECIAL FORMALITIES:
page;
I. NOTARIAL WILL – a valid notarial will:
iii. When the will consists of two pages,
(Art. 805)
the first consists of all the
testamentary disposition and is
A. Subscribed at the end by the testator signed at the bottom by the testator
himself or by the testator’s name written and the witnesses and the second
by some other person in his presence, contains only the attestation clause
and by his express direction duly signed at the bottom by the
witnesses.
Physical end- where the writing
stops NOTE: A statute requiring a will to be signed is
satisfied if the signature is made by the
Logical end- where the last testator's mark. A thumbmark is sufficient
testamentary disposition ends signature. Payad v. Tolentino, [62 Phil 846]
But a mere sign of the cross cannot be accepted
B. Attested & subscribed by three or more as it does not have the trustworthiness of a
credible witnesses in the presence of the thumbmark Garcia v. Lacuesta, [90 Phil 489]
testator and of one another
D. Each and every page of the will must be
• Mandatory Part: The signing on numbered correlatively in letters placed
every page in the witnesses’ on the upper part of each page.
presence
• Mandatory Part: Pagination by

NOTE: Test of presence is not means of a conventional system.
whether they actually saw each other
sign, but whether they might have • Directory Part: The pagination in
seen each other sign had they letters on the upper part of each
chosen to do so considering their page
mental and physical condition and
position with relation to each other at
the moment of inscription of each E. It must contain an attestation clause,
signature. stating the following:

401
a. The number of pages used upon attestation clause at side margin of every
which the will is written the end or last page of page of the will
the will
b. The fact that the testator signed
the will and every page, or
caused some other person to
write his name, under his express • The attestation clause need not be written in
direction, in the presence of the a language or dialect known to the testator
instrumental witnesses nor to the witnesses since it does not form
part of the testamentary disposition
c. All the instrumental witnesses
witnessed and signed the will and
all its pages in the presence of • The attestation clause need only be signed
the testator and of one another by the witnesses and not by the testator as
it is a declaration made by the witnesses.
F. It must be acknowledged before a notary

public by the testator and the witnesses
(Art. 806) RULE ON SUBSTANTIAL COMPLIANCE (ART.
809)
• The notary public cannot be counted as 1. In the absence of

one of the attesting witnesses. Cruz v.
o bad faith
Villasor, [54 SCRA 31]
o forgery
o fraud
ATTESTATION v. SUBSCRIPTION
Attestation – An act of witnessing execution of o undue and improper pressure

will by testator in order to see and take note and influence
mentally those things are done which the
statute requires for the execution of a will and
that the signature of the testator exists as a fact 2. Defects and imperfections
Subscription – manual act of instrumental o in the form of attestation or in

witnesses in affixing their signature to the the language used therein
instrument
3. Shall not render the will invalid
ATTESTATION SUBSCRIPTION 4. If it is proved that the will was in fact

executed and attested in substantial
1. act of the senses 1. act of the hand
compliance with all the requirements of
2. mental act 2. mechanical act Article 805.
3. Purpose is to render 3. Purpose is for

available proof during identification • Defects and imperfections can be
the probate that such supplied by an examination of the will
will had been executed itself. Caneda v. CA [222 SCRA 781]
in accordance with the
formalities prescribed
by law
ADDITIONAL REQUISITES FOR VALIDITY
4. Found after the 4. Found at the left

401
a.
If dispositions preceding it, whatever be
the Testator be Deaf or Deaf-Mute: the time of prior dispositions
i. Testator must personally read the will,
• A holographic will is subject
if able to do so;
to no other form, and may be made in
ii. Otherwise, he shall designate two or out of the Philippines, and need not
persons to read it and communicate to be witnessed. (Art 810)
him, in some practicable manner, its
contents (Art 807) ELEMENTS OF A CODICIL (ART. 825)
1. It is a supplementary or addition to a will
b. If the Testator be Blind: The will shall be
read to the testator twice – 2. Made after the execution of the will
i. Once by one of the subscribing 3. Annexed to be taken as a part thereof

witnesses
4. By which any disposition in the original will
ii. Once by the notary public before may be explained, added to or altered
whom the will is acknowledged (Art
808)
REQUISITES FOR INCORPORATION BY
REFERENCE (Art. 827)
NOTE: Articles 807 and 808 are
mandatory, failure to comply with either 1. the document or paper referred to in the will
would result in nullity and denial of probate. must be in existence at the time of the
execution of the will
• The inadvertent failure of one witness to
affix his signature to one page of the original 2. the will must clearly describe and identify
will due to the simultaneous lifting of two the same, stating among other things the
pages in the course of signing is not per se number of pages thereof
sufficient to justify denial of probate when
3. it must be identified by clear and
the duplicate will shows such signatures.
satisfactory proof as the document or paper
Icasiano v. Icasiano, [11 SCRA 422]
referred to therein
4. it must be signed by the testator and the

II. HOLOGRAPHIC WILL – a holographic witnesses on each and every page, except
will is valid if it is: in case of voluminous books of account or
inventories
A. Entirely written, dated, and signed by
the hand of the testator himself
B. Dispositions of the testator written NOTE: The text of Art, 827 suggests that
below his signature must be dated and holographic wills cannot incorporate documents
signed by him in order to validate the by reference. Paragraph 4 requires the
testamentary dispositions. (Art 812) signatures of the testator and witnesses on
every page of the incorporated document. It
EXCEPT: In case of dispositions seems, therefore, that only attested wills can
appearing in a holographic will which incorporate documents by reference, since only
are signed without being dated, where these are witnessed (unless the testator has his
the last disposition has a signature holographic will superfluously witnessed)
and a date, such date validates the
PROBATE OF HOLOGRAPHIC WILL

401
A. There must be at least one witness. the requirement that it must be wholly
written by the testator
EXCEPTION: If the will is contested,

at least three of such witnesses shall be D. If the insertion made by a third person is
required (merely directory). In the made contemporaneous to the execution
absence of such competent witness
of the will, then the will is void because it
and if the court deems it necessary,
expert testimony may be resorted to. is not written entirely by the testator
B. Who knows the handwriting and

WHO MAY BE A WITNESS TO A WILL – Any
signature of the testator
person may be a witness provided he is:
C. Must explicitly declare that the will A. Of sound mind

and the signature are in the handwriting
B. Of the age of 18 years or more
of the testator. (Art 811)
C. Not blind, deaf or dumb
NOTE: This article applies only to post mortem
probates and not to ante mortem probates since D. Able to read and write
in such cases the testator himself files the
petition and will identify the document himself. E. Domiciled in the Philippines
• in the probate of a holographic will, the F. Have not been convicted of falsification
document itself must be produced; a lost of a document, perjury or false testimony
holographic will cannot be probated. Gan
v. Yap, [104 Phil 509] Exception: When
LAWS GOVERNING VALIDITY OF A WILL
copy of the will is produced or survives
Rodelas v. Aranza, [G.R. No. L-58509, 1. FORMAL VALIDITY
December 7, 1982]
FORMAL FILIPINO ALIEN
INSERTION, CANCELLATION, ERASURE OR VALIDITY
ALTERATION IN A HOLOGRAPHIC WILL
EXECUTED IN (a) CC of (a)CC of the
A. If made after the execution of the will, PHILIPPINES Philippines Philippines
but without the consent of the testator,
such insertion is considered as not (b)Law of His
written because the validity of the will Country
cannot be defeated by the malice or FOREIGN (a) CC of (a) CC of
caprice of a third person COUNTRY Philippines Philippines
(b) Law (b) Law of his

B. If the insertion after the execution of the
where Country
will was with the consent of the testator,
Made
the will remains valid but the insertion is (c) Law of
void. Country where
he resides
C. If the insertion after the execution is *CC – Civil Code
validated by the testator by his signature
thereon then the insertion becomes part
of the will, and, the entire will becomes
void, because of failure to comply with 2. SUBSTANTIVE VALIDITY

401
ASPECTS OF THE WILL GOVERNED BY a. decree of legal separation
NATIONAL LAW OF THE DECEDENT:
b. preterition
A. Order of succession
c. legacy or credit against third person or
B. Capacity to succeed remission of debt was provided in will
and subsequently, testator brings action
C. Amount of successional rights against debtor
D. Intrinsic validity d. substantial transformation of specific

thing bequeathed
VALIDITY OF JOINT WILLS
e. when heir, devisee or legatee commits
• Two or more persons cannot make a will any of the acts of unworthiness
jointly, or in the same instrument, either for
their reciprocal benefit or for the benefit of a
third person. 2. By the execution of a will, codicil or other
writing executed as provided in case of wills
NOTE: Joint wills executed by Filipinos in a
foreign country shall not be valid in the a. EXPRESS – When there is a
Philippines, even though authorized by the revocatory clause expressly revoking the
laws of the country where they may have
previous will or a part thereof
been executed.
b. IMPLIED – When the provisions
AMENDMENT, REVOCATION AND
thereof are partially or entirely
REPUBLICATION OF WILLS
inconsistent with those of the previous
wills
AMENDMENT OF WILLS
1. Notarial – only through a codicil

3. By burning, tearing, canceling, or
2. Holographic – in three ways obliterating the will with the intention of
revoking it, by the testator himself, or by
A. Dispositions may be added below the some other person in his presence, and by
signature, PROVIDED that said his express direction.
dispositions are also dated and signed,
and everything is written by the hand of
REQUISITES:
the testator himself
a. Testamentary capacity at the time of
B. Certain dispositions or additional
performing the act of destruction;
matter may be suppressed or inserted
PROVIDED that said cancellation is b. Intent to revoke (animus revocandi);
signed by the testator and written by the
hand of the testator himself c. Actual physical act of destruction;
C. Through a codicil which may either d. Completion of the subjective phase;

be notarial or holographic AND
e. Performed by the testator himself or

REVOCATION OF WILLS by some other person in his presence
and express direction
1. By operation of law – instances of revocation
by operation of law: (The list is NOT exclusive.)

401
OUTSIDE Domicil Philippine Law
DOCTRINE of PRESUMED REVOCATION:
PHILIPPIN e
• Where the will cannot ES
Non (a) Where will was
be found following the death of the testator Domicil made
and it is shown that it was in the testator's e
possession when last seen, the presumption (b)Where
is that he must have destroyed it with DOMICILED at time
animus revocandi. of revocation
• Where the will cannot

be found following the death of the testator
and it is shown that the testator had ready REVOCATION BASED ON A FALSE OR
access to it, the presumption is that he must ILLEGAL CAUSE
have destroyed it with animus revocandi.
• Revocation based on a false or illegal
• Where it is shown that cause is null and void.
the will was in the custody of the testator
• REQUISITES:
after its execution, and subsequently, it was
found among the testator's effects after his
a. The cause must be concrete, factual and
death in such a state of mutilation,
not purely subjective
cancellation, or obliteration, as represents a
sufficient act of revocation within the b. It must be false
meaning of the applicable statute, it will be
presumed, in the absence of evidence to the c. The testator must not know of its falsity
contrary, that such act was perfomed by the
testator with animus revocandi. d. It must appear from the will that the
testator is revoking because of the cause
which is false.
• Art. 832 A revocation made in a subsequent
will shall take effect, even if the new will
should become inoperative by reason of the • Art. 834. The recognition of an
incapacity of the heirs, devisees or legatees illegitimate child does not lose its legal
designated therein, or by their renunciation. effect, even though the will wherein it
was made should be revoked.
EXCEPTION: Doctrine of Dependent Relative

Revocation – when the testator provides in the • Art. 837. If after making a will, the
subsequent will that the revocation of the prior testator makes a second will expressly
one is dependent on the capacity or acceptance revoking the first, the revocation of the
of the heirs, devisees, or legatees instituted in second will does not revive the first will,
the subsequent will. (Molo v, Molo, [90 Phil which can be revived only by another will
37]) or codicil.
LAWS WHICH GOVERN REVOCATION

•
LAW FOR LAW
REVOCATION FACTS DEMONSTRATING ART 837
IN PHILIPPINES Philippine Law • In 1985, X executed Will 1
Philippine Law • In 1987, X executed Will 2, expressly

revoking Will 1

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•
In 1. A special proceeding required for the
1990, X executed Will 3, revoking Will 1 purpose of establishing the validity of
the will.
CONCLUSION ON THE FACTS 2. Probate of a will is mandatory
• The Revocation of Will 2 by Will 3 does 3. The probate court can only inquire into
not revive Will 1 the extrinsic validity of testamentary
provisions, which include the following:
• This demonstrates the theory of instant
revocation because the revocatory effect of a. That the testator was of sound and
the second will is immediate upon the first disposing mind
will
b. That his consent was not vitiated
c. That the will was signed by the

NOTE: This article only applies where the required number of witness
revocation of the first will by the second will
is express. d. That the will is genuine
EXCEPTION: The probate court may pass upon

the intrinsic validity of the will when its probate
REPUBLICATION AND REVIVAL OF WILLS might become an idle ceremony if on the will’s
face it appears to be intrinsically void. Nuguid
• If the testator wishes to republish a will v. Nuguid, [17 SCRA 449]
that is void as to form, the only way to
republish it is to execute a subsequent will KINDS OF PROBATE
and reproduce it
1. Post-Mortem – after the testator’s
death
• The testator need only execute a
subsequent will or codicil referring to the 2. Ante-Mortem – during his lifetime
previous will if the testator wishes to
republish a will that is either: FINAL DECREE OF PROBATE
• Once a decree of probate becomes final
a. Void for reason other than a in accordance with the rules of
formal defect procedure it becomes Res Judicata
b. Previously revoked • It is conclusive as to the due execution of
the will (extrinsic validity only)
REPUBLICATION REVIVAL
II. DISALLOWANCE OF WILL - grounds for
Takes place by an act of Takes place by disallowance of a will:
the testator operation of law
1. If the formalities required by law have
Corrects extrinsic and Restores a revoked not been complied with;
extrinsic defects will
2. If the testator was insane, or otherwise
ALLOWANCE AND DISALLOWANCE OF mentally incapable of making a will, at
WILLS the time of its execution;
I. PROBATE OF A WILL

401
3. If it was executed through force or under b. Mandatory – identity of the heir
duress, or the influence of fear, or must be established, otherwise void
threats; disposition, unless his identity becomes
certain.
4. If it was procured by undue and improper
pressure and influence, on the part of NOTE: If there is ambiguity in the designation,
the beneficiary or of some other person; the designation must be resolved by discerning
the testator’s intent. If the ambiguity cannot be
5. If the signature of the testator was resolved, intestacy to that portion results.
procured by fraud;
2. Will specifically assigns to such person an
6. If the testator acted by mistake or did inchoate share in the estate.
not intend that the instrument should be
his will at the time of affixing his 3. The person so named has capacity to
signature thereto.(Art 839) succeed
REVOCATION DISALLOWANCE 4. The will is formally valid
Voluntary act of the Given by judicial 5. No vice of consent is present

testator decree
6. No preterition results from the effect of such
With or without cause Always for a legal will
cause
May be partial or total Always total EXCEPT

when the ground of THREE PRINCIPLES IN THE INSTITUTION OF
fraud or influence for HEIRS
example affects only
certain portions of the 1. Equality – heirs who are instituted without a
will designation of shares inherit in equal parts
2. Individuality – heirs collectively instituted are

deemed individually named unless a
B. INSTITUTION OF HEIRS contrary intent is proven
INSTITUTION OF HEIR
3. Simultaneity – when several heirs are
1. It is an act by virtue of which a testator instituted, they are instituted simultaneously
designates in his will and not successively
2. The person or persons who are to succeed

him in his property and transmissible
RULES ON A PERSON’S RIGHT TO DISPOSE
3. Rights and obligations OF HIS ESTATE
1. If one has no compulsory heirs:
REQUISITES FOR A VALID INSTITUTION OF a. He can give his estate to any person
HEIR qualified to inherit under him
1. Designation in will of person/s to succeed b. However, he must respect restrictions

imposed by special laws
a. Directory - designation of name and
surname 2. If one has compulsory heirs:

401
a. He can give only the ELEMENTS OF PRETERITION
disposable portion to strangers 1. There must be an omission of one, some or
all of the heir/s in the will
b. Legitimes of compulsory
heirs must be respected 2. The omission must be that of a
COMPULSORY HEIR
3. Compulsory heir omitted must be of the

REQUISITES FOR THE ANNULMENT OF
DIRECT LINE
INSTITUTION OF HEIRS:
4. The omitted compulsory heir must be LIVING
1. Cause of institution of the heirs must be
at the time of testator’s death or must at
stated in will
least have been CONCEIVED before the
2. Cause must be shown to be false testator’s death
3. It appears from the face of the will that 5. The omission must be complete and total in
the testator would not have made the character. : There is no omission if
institution had he known the falsity of
a. A devise or legacy has been
the cause.
given to the heir
b. A donation inter vivos has

RULES ON INSTITUTION OF ALIQUOT SHARE been previously given to the heir
LESS THAN OR IN EXCESS OF THE WHOLE
c. Anything is left from the
ESTATE:
inheritance which the heir may get by
1. Intestacy Results if way of intestacy
a. the heir institutes an aliquot portion of

the estate EFFECTS OF PRETERITION:
1. The institution of heir is annulled
b. to only one heir If the heir institutes
several heirs to an aliquot part of the 2. Devises and legacies shall remain valid as
long as they are not inofficious
3. If the omitted compulsory heir should die

2. Each heir’s share shall be proportionally before the testator, the institution shall be
increased: effectual, without prejudice to the right of
a. There are more than one instituted heir representation
b. The testator intended the heirs to inherit
the whole estate
c. The aliquot parts of each share do not DISTINGUISH PRETERITION FROM
cover the whole inheritance DISINHERITANCE
3. Each heir’s share shall be proportionally PRETERITION DISINHERITANCE

decreased:
Deprivation of a Deprivation of the
a. There are more than one instituted heir compulsory heir of his compulsory of his
b. The testator intended the heirs to inherit legitime is tacit legitime is express
the whole estate
c. The aliquot parts of each share exceed
the whole inheritance

401
May be voluntary but Always voluntary than one substitute, they shall have the
the law presumes that same share in the substitution as in the
it is involuntary institution
Law presumes that Done with a legal cause 4. Fideicommissary Substitution - if the
there has been merely testator institutes an heir with an obligation
an oversight or to deliver to another the property so
mistake on the part of inherited. The heir instituted to such
the testator condition is called the first heir or fiduciary
heir, the one to receive the property is the
Omitted heir gets not If disinheritance is
fideicommissary or second heir
only his legitime but unlawful, compulsory
also his share in the heir is merely restored
free portion not to his legitime
disposed of by way of REQUISITES FOR A FIDEICOMMISSARY
legacies or devises SUBSTITUTION:
1. A fiduciary or first heir instituted entrusted

with the dual obligation to preserve and to
transmit to a fideicommissary substitute or
second heir the whole or part of the
inheritance
C. SUBSTITUTION OF HEIRS 2. Such substitution must not go beyond one
CLASSES OF SUBSTITUTION degree from the heir originally instituted
1. Vulgar or Simple – the testator may 3. The fiduciary or first heir and the second heir
designate one or more persons to substitute are living and qualified to succeed at the
the heir or heirs instituted in case such heir time of the death of the testator
or heirs should:
4. The fideicommissary substitution must be
a. die before him (PREDECEASE) expressly made
b. should not wish, (RENOUNCE) or 5. The fideicommissary substitution is imposed

on the free portion of the estate and never
c. should be incapacitated to accept on the legitime
the inheritance (INCAPACITATED)
• Restricted simple substitution- The NOTE: Pending the transmission of the

testator may limit the operation of property, the fiduciary is entitled to all the
simple substitution by specifying only rights of a usufructuary although the
one or two of the three causes. fideicommissary is entitled to all the rights of
a naked owner.
2. Brief or Compendious – two or more
persons may be substituted for one; and one
person for two or more heirs D. CONDITIONAL TESTAMENTARY
DISPOSITIONS AND DISPOSITIONS WITH
3. Reciprocal – if heirs instituted in unequal
shares should be reciprocally substituted,
A TERM
the substitute shall acquire the share of the TESTAMENTARY DISPOSITIONS
heir who dies, renounces, or incapacitated,
unless it clearly appears that the intention of 1. Condition – future or uncertain event, or a
the testator was otherwise. If there are more past event unknown to the parties, upon

401
which the performance of an obligation already an heir; one who inherits
depends conditionally is not yet an heir.)
2. Term – the day or time when an obligation

either becomes demandable or terminates
RULES ON POTESTATIVE, CASUAL AND
3. Modal Institution – the statement of the MIXED CONDITIONS
institution; application of the property left by
the testator or the charge imposed on him 1. POTESTATIVE
4. Disposicion Captatoria/Scriptura Positive Potestative Condition:

Captatoria – condition that the heir shall
General Rule – must be fulfilled as soon as the
make some provision in his will of the
heir learns of the testator’s death
testator or of any other person (prohibited
because it will make the making of the will a EXCEPTION
contractual act)
a. the condition was already
5. Causal Condition – condition us casual if it complied with at the time the heir learns
depends upon chance and/or upon the will of of the testator’s death
a third person
b. the condition is of such
6. Mixed Condition - It is mixed if it depends nature that it cannot be fulfilled again
both partly upon the will of the heir himself
and upon chance and/or the will of a third
person Negative Potestative Condition:
• Heir must give security to guarantee the
7. Potestative Condition – one the fulfillment return of the value of property, fruits, and
of which depends purely on heir interests, in cases of contravention
8. Suspensive term – one that merely

suspends the demandability of a right. It is 2. CASUAL OR MIXED
sure to happen
9. Caucion Muciana – bond or security that Positive

should be given in favor of those who would
get the property if the condition not be • GENERAL RULE – may be fulfilled at any
complied with other time (before testator’s death), unless
testator provides otherwise.
• If ALREADY FULFILLED at the time of

INTERPRETATION execution of the will
• When in doubt whether there is a
ii. If testator unaware of fact of
condition or merely a mode, consider the
fulfillment- deemed fulfilled
same as mode
iii. If testator aware thereof –
• When in doubt as to whether there is
a mode or merely a suggestion, consider i. If it can no longer be fulfilled again –
same only as a suggestion deemed fulfilled
• The condition suspends but does not ii. If it can be fulfilled again – must be
obligate, the mode obligates but does not fulfilled again
suspends (for he who inherits with a mode is
Constructive Compliance

401
•
a. if casual – not applicable T
he portion of the decedent’s estate reserved
b. if mixed – by law is called the legitime.
i. If dependent partly on chance – not • The heirs for whom the law reserves such
applicable portion are called compulsory heirs.
ii. If dependent partly on will of third CLASSES OF COMPULSORY HEIRS

party –
1. Primary – those who have precedence over
1. if 3rd party interested – and exclude other compulsory heirs
applicable
• Legitimate children and descendants
2. if 3rd party not interested – not (legitimate), with respect to their
applicable legitimate parents and ascendants
2. Secondary – those who succeed only in the

absence of the primary heirs
EFFECTS OF SUSPENSIVE CONDITION OR
TERM • Legitimate parents and ascendants
(legitimate), with respect to their
The estate shall be placed under administration
legitimate children and descendants
until
3. Concurring – those who succeed together
1. condition is fulfilled
with the primary or the secondary
2. until it becomes certain condition will never compulsory heirs
be fulfilled
• Widow or widower (legitimate) – the
3. until arrival of the term surviving spouse referred to is the
spouse of the decedent.
CONDITIONS PROHIBITING MARRIAGE NOTE:

a. Mere estrangement is not a ground for the
1. If a first marriage is prohibited – condition disqualification of the surviving spouse as
considered always as not imposed heir
b. Effect of decree of legal separation:
2. If a subsequent marriage is prohibited as i. On the offending spouse – disqualified
imposed by the deceased spouse or by ii.On the innocent spouse – no effect
his/her ascendants or descendants - valid c. Death of either spouse during the
pendency of a petition for legal separation
3. if a subsequent marriage is prohibited and
– dismissal of the case
imposed by anyone else- considered not
• Illegitimate children and descendants
written
(legitimate or illegitimate)
E. LEGITIMES

401
b. Testamentary dispositions made by the
Testator is a Testator is an
predecessor to the compulsory heir,
Legitimate Person Illegitimate Person
unless the testator provides that it
Legitimate children Legitimate children should be considered part of the
and descendant and descendants legitime.
STEPS IN DETERMINING THE LEGITIME OF

COMPULSORY HEIRS:
In default of the Illegitimate parents
foregoing, legitimate and ascendants
1. Determination of the gross value of the
parents and
estate at the time of the death of the
ascendants
testator;
Surviving spouse In default of the
2. Determination of all debts and charges
foregoing, illegitimate
which are chargeable against the estate;
parents only
3. Determination of the net value of the estate
Illegitimate children Surviving spouse
by deducting all the debts and charged from
and descendant
the gross value of the estate;
4. Collation or addition of the value of all

GENERAL RULES IN ASCERTAINING donations inter vivos to the net value of the
LEGITIMES estate;
1. Direct descending line 5. Determination of the amount of the legitime

from the total thus found;
a. Rule of preference between lines
6. Imputation of all the value of all donations
b. Rule of proximity inter vivos made to compulsory heirs against
their legitimes and of the value of all
c. Right of representation ad infinitum in donations inter vivos made to strangers
case of predecease, incapacity or against the disposable free portion and
disinheritance restoration to the hereditary estate if the
donation is inofficious.
2. Direct ascending line
7. If legitime is impaired, the following
a. Rule of division by line
reductions shall be made:
b. Rule of equal division
a. First, reduce pro-rata non-preferred
3. Non-impairment of legitime legacies and devises, and the
testamentary dispositions.
a. Any compulsory heir who was given title
less than his legitime may demand that b. Second, reduce pro rata the preferred
the same be completed (Art 906) legacies and devises
c. Third, reduce the donations inter vivos

EXCEPTIONS: according to the inverse order of their
dates
a. If the predecessor gave the compulsory
heir a donation inter vivos and provided 8. Distribution of the residue of the estate in
that it was not charged against the accordance with the will of the testator.
legitime (Art 1062)

401
401
SHARES OF COMPULSORY HEIRS
HEIR LEGITIME FREE PORTION
LEGITIMATE CHILDREN & DESCENDANTS 1/2 1/2
LEGIMITATE PARENTS & ASCENDANTS 1/2 1/2
1 (ONE) LEGITIMATE CHILDREN – 1/2 1/4

CHILDREN/DESCENDANT & SURVIVING
SPOUSE -1/4
SPOUSE
LEGITIMATE CHILDREN (LC) & SPOUSE CHILDREN – 1/2 –
SPOUSE – EQUAL TO SHARE WHAT REMAINS

OF 1 (ONE) LC
LEGITIMATE CHILDREN (LC) & LC -1/2

ILLEGITIMATE CHILDREN (ILC)
ILC – 1/2 OF SHARE OF 1 (ONE) WHAT REMAINS (IF
LC ANY)
LEGITIMATE PARENTS/ASCENDANT & LEGITIMATE

SURVIVING SPOUSE PARENTS/ASCENDANT – 1/2
1/4
SPOUSE – 1/4
LEGIMITATE PARENTS/ASCENDANTS & LEGITIMATE

ILLEGIMTATE CHILDREN PARENTS/ASCENDANTS – 1/2
1/4
ILLEGIMITATE CHILDREN – 1/4
ILLEGITIMATE CHILDREN & SURVIVING

SPOUSE
ILC – 1/3 1/3
SPOUSE – 1/3
LEGIMIATE CHILDREN/DESCENDANTS,
SURVIVING SPOUSE & ILLEGITIMATE
LC –1/2 WHATEVER
CHILDREN
REMAINS
SPOUSE – EQUAL TO 1 (ONE)
LC
ILC – 1/2 OF SHARE OF ONE (1)

LC

401
LEGITIMATE PARENTS/ASCENDANTS, LEGIMIATE
1/8 ESTATE
SURVIVING SPOUSE, & ILLEGITIMATE PARENTS/ASCENDANTS –1/2
CHILDREN
SPOUSE – 1/8
ILC –1/4
SURVIVING SPOUSE GENERALLY 1/2 1/2
ARTICULO 1/3 2/3

MORTIS
ILLEGITIMATE CHILDREN ONLY 1/2 1/2
ILLEGITIMATE PARENTS 1/2 1/2
ILLEGITIMATE PARENTS & SURVIVING ILLEGITIMATE PARENTS – 1/4 1/2

SPOUSE
SPOUSE – 1/4

401
RESERVA TRONCAL 1. ORIGINATOR – the ascendant, brother
or sister from whom the propositus had
RESERVA TRONCAL: The reservation by virtue acquired the property by gratuitous title
of which an ascendant who inherits from his
descendant any property which the latter may 2. PROPOSITUS – The descendant who
have acquired by gratuitous title from another died and from whose death the reservistas
ascendant or a brother or sister, is obliged to in turn had acquired the property by
reserve the property for the benefit of relative operation of law. The so-called “ARBITER OF
within the 3rd degree and who belong from the THE FATE OF THE RESERVA TRONCAL.”
same line from which the property came from.
• It constitutes as an exception to both the NOTE: Prepositus can terminate the reserva
system of legitime and the order of intestate by:
succession. a. Substituting or alienating the
property
PURPOSE OF RESERVA TRONCAL: b. By bequeathing or devising it either
1. To reserve certain properties in favor of to the potential reservista or to other
certain persons; third person
2. To prevent person outside a family from c. By partitioning it and assigning the
acquiring, by some chance or accident, property to parties other than the
property which otherwise would have reservista
remained with the said family;
3. To maintain a separation between paternal 3. RESERVISTA – The ascendant, not
and maternal lines. belonging to the line from which the
property came that is the only compulsory
REQUISITES OF RESERVA TRONCAL heir and is obliged to reserve the property.
1. The property should have been acquired (Justice Vitug’s View)
by operation of law by an ascendant NOTE: Tolentino is of the view that even if
(RESERVISTA) from his descendant the reservista and the originator belong to
(PROPOSITUS) upon the death of the latter. the same line, there is still an obligation to
reserve.
NOTE: by operation of law is limited to
succession, either by legitime or intestacy 4. RESERVATARIOS – The relative of the
propositus within the 3rd degree and who
2. The property should have been belong to the line from which the property
previously acquired by gratuitous title by came and for whose benefit reservation is
the propositus from another ascendant or constituted. They must be related by blood
from a brother or sister (ORIGINATOR). not only to the propositus but also to the
originator.
NOTE: gratuitous encompasses
transmissions by donation, remission, and NOTE: The Civil Code did not provide for the
testate or intestate succession. rules on how the reservatarios would
succeed to the reservista. However, the
3. The propositus should have died without following rules on intestacy have been
any legitimate issue in the direct descending consistently applied:
line who could inherit from him. a. Rule of preference between the
• All relationships must be legitimate. lines
Nieva v. Alcala, [41 Phil 495] b. Rule of proximity
c. Right of representation –
4. That there are relatives within the third provided that the representative is a
degree belonging to the line from which relative within the 3rd degree, and that
said property came. he belongs to the line from which the
reservable property came
PERSONAL ELEMENTS
d. “full blood/double share” rule in 2. The right is subject to a suspensive condition
Article 1006 3. The right is alienable, but subject to the
same suspensive condition
• The reservista had no power to appoint, 4. The right is registrable
by will, which reservatarios were to get
the reserved property. Gonzales v. CFI, PROPERTY SUBJECT TO RESERVATION:
[104 Phil 479] GENERAL RULE: It must be the same
property which the reservista had acquired by
2 EVENTS TO BE CONSIDERED TO operation of law from the propositus upon the
DETERMINE THE RIGHT OF THE latter’s death and which the latter, in turn had
RESERVATARIOS OVER THE RESERVABLE acquired by gratuitous title during his lifetime
PROPERTY from another ascendant, brother or sister.
EXCEPTION: Substitution of the reservable
1. Death of Propositus – all qualified property through unavoidable necessity:
reservatario merely acquire an inchoate 1. Property is
right. The reservistas own the property consumable
subject to the resolutory condition 2. Lost or destroyed
2. Death of Reservista – surviving through the fault of the reservista
reservatarios acquire a perfect right. 3. Deteriorated through the same cause
4. It has been alienated
OBLIGATIONS OF A RESERVISTA AND THE
CORRESPONDING RIGHTS OF THE Reserva Maxima Reserva Minima
RESERVATARIOS (A-I-S-A) Much of the Every single property
1. To inventory reserved properties
potentially reservable in the Prepositus
2. To annotate the reservable character (if
property as possible estate must be
registered immovables) in the Registry of
must be deemed deemed to pass, partly
Property within 90 days from acceptance by
included in the part by will and partly by
the reservista
that passes by operation of law, in the
3. To appraise the movables
operation of law same proportion that
4. To secure by means of mortgage:
the part given by will
1. The indemnity for any
bears to the part not so
deterioration of or damage to the
given
property occasioned by the reservista’s
Maximizes the scope Minima finds wider
fault or negligence, and
of reserve acceptance here
2. The payment of the
value of such reserved movables as may EXTINGUISHMENT OF RESERVA TRONCAL
be alienated by the reservista onerously 1. The death of the Reservista
and gratuitously 2. The death of the all the Reservatorios
3. As restitution for 3. Waiver or renunciation by all
movables not alienated Reservatorios, provided none is born
subsequently
RIGHT OF THE RESERVISTA OVER THE 4. Total fortuitous loss of the reserved
RESERVABLE PROPERTY property
1. The right of the reservista over the reserved
5. Confusion or merger of rights
property is one of ownership
6. Prescription or adverse possession
2. The ownership is subject to a resolutory
condition
IMPORTANT NOTES:
3. The right of ownership is alienable
• A reservatario may dispose of his
4. The right of ownership is registrable
expectancy to the reservable property
during the pendency of the reserva in its
RIGHT OF THE RESERVASTARIOS OVER THE
uncertain and conditional form. If he dies
RESERVABLE PROPERTY
1. The reservatarios have a right of expectancy before the reservista, he has not transmitted
over the property
anything, but if he survives such reservista, Remedy is to demand Effect is the total
the transmission shall become effective. for completion of annulment of the
• A will may prevent the constitution of a legitime institution of heirs
reserva. In testate succession, only the
legitime passes by operation of law. The STEPS IN DETERMINING THE LEGITIME OF
propositus may, by will, opt to give the COMPULSORY HEIRS IF THERE ARE
DONATIONS:
legitime of his ascendant without giving to
1. Determination of the gross value of the
the latter properties he had acquired by
estate at the time of the death of the
gratuitous title from another ascendant, or
testator;
brother or sister. In such case, reserva
2. Determination of all debts and charges
troncal is avoided.
which are chargeable against the estate –
• Howerver, if the ascendant was not
this refers to the pre-existing obligations of
disentitled in the will to receive such the testator during his lifetime, and not to
properties, the reserva minima rule the charges or burdens which are created by
(proportional reserva) should be followed. the testamentary dispositions found in the
The rule holds that all properties passing to will;
the reservista must be considered as 3. Determination of the net value of the estate
passing partly by operation of law and partly by deducting all the debts and charges from
by will of the propositus. Thus, one-half of the gross value of the estate;
the properties acquired by gratuitous title 4. Collation or addition of the value of all
should be reservable and the other half donations inter vivos to the net value of the
should be free. estate;
5. Determination of the amount of the legitime
PRINCIPLE OF UNIMPAIRMENT OF THE from the total thus found;
LEGITIME OF THE COMPULSORY HEIR
NOTE: proceeds of an insurance policy
1. General Rule: The testator cannot deprive
where the beneficiary is a third person or
his compulsory heirs of their legitime.
even a compulsory heir belongs exclusively
Exception: valid disinheritance
to the beneficiary and not to the estate of
2. General Rule: He cannot impose upon the
the insured. Hence, not subject to collation.
same any burden, encumbrance, condition,
6. Imputation of the value of all donatioins inter
or substitution of any kind whatsoever.
vivos made to compulsory heirs against their
Exception: express prohibition of the
legitime and of the value of all donations
partition of the estate for a period not
inter vivos made to strangers against the
exceeding 20 years.
disposable free portion and restoration to
• Renunciation or compromise as regards
the hereditary estate if the donation is
future legitime between the person owing it
inofficious; and
and his compulsory heir is void.
7. Distribution of the residue of the estate in
i. The rights of the heirs accordance with the will of the testator.
are merely inchoate because it is only
perfected upon the testator’s death. REDUCTION OF TESTAMENTARY
DISPOSITIONS AND DONATIONS
Hence, there is still nothing to renounce. The order of preference is as follows:
ii. No contract may be 1. Legitime of compulsory heirs
entered into with respect to future 2. Donation inter vivos
inheritance except in cases expressly 3. Preferential legacies or devises
authorized by law. 4. All other legacies or devises
EFFECTS OF INCOMPLETE LEGITIME If after satisfying the legitime of the compulsory

Incomplete Legitime Preterition heirs, the disposable portion is sufficient to
Heir not entirely Total omission of the cover donations inter vivos but not the legacies
forgotten heir and devises, the rule is that such legacies and
Less than the portion Total deprivation of
devises will be reduced pro rate, after satisfying
of the legitime legitime
those preferential ones.
DISINHERITANCE testamentary disposition made in a prior
CAUSES OF VACANCY IN SUCCESSION will.
1. Disinheritance - The testator creates it
himself NOTE: Therefore, the heir loses his
2. Repudiation - The heir does something legitime. As to the free portion, it passes
3. Incapacity/Predecease - Something happens through Substitution, Accretion, and
to the heir Intestacy.
2. The children or descendants of the person
HOW VACANCIES ARE FILLED disinherited shall take his or her place and
1. Substitution shall preserve the rights of compulsory heirs
2. Representation with respect to the legitime.
3. Accretion
NOTE: The disinherited heir can be
DISINHERITANCE represented in the legitime.
1. Heir is being deprived of his legitime.
a. Only in the descending line, never in
2. Only in cases of testate succession.
the ascending
NOTE: Counterpart in intestate is
b. In collateral line, only with respect to
unworthiness.
nephews and nieces.
3. Even if validly disinherited, heir can still be
validly restored in the legitime by 3. The disinherited parents shall not have the
RECONCILIATION. usufruct or administration of the property
4. Reconciliation – when in “speaking terms which constitutes the legitime.
again,” no particular form
5. In unworthiness, there must a pardon in GROUNDS FOR DISINHERITANCE
writing to remove incapacity to inherit. Grounds for Disinheritance Common To All
However, it does not have to be in a will. Compulsory Heirs
6. If grounds for disinheritance and 1. Attempt on the life of testator, spouse,
unworthiness are common, reconciliation ascendant, descendant
does not erase the fact that the heir is a. Conviction necessary
unworthy. b. In case of spouse, giving cause for
7. As long as there is reconciliation, it should legal separation, no conviction needed
be considered to have revoked the c. Include both attempted and
inheritance as well as the unworthiness. frustrated.
8. Ineffective disinheritance v. Preterition d. Attempt on life of relatives, may be
consummated.
REQUIREMENTS FOR VALID 2. Accusation of a crime with penalty of
DISINHERITANCE six years or more.
1. Effected only through a valid will; a. Penalty imposable, not actually
NOTE: Will containing disinheritance must imposed.
be probated. b. Made by the heir in a proceeding as
2. For a cause expressly stated by law; a complainant or witness in a criminal
3. Cause must be expressly state in the will case.
itself; c. Found to be groundless, false.
4. Cause must be certain and true; d. Groundless – court should make a
5. Unconditional; positive finding that the testator has not
6. Total; AND committed the crime. It is then false.
7. The heir disinherited must be designated in e. Chismis – not the one referred here,
such a manner that there can be no doubt as it is outside criminal proceeding.
to his identity. 3. Induce testator to make/change the
will.
EFFECTS OF DISINHERITANCE a. Will – purely personal
1. Total exclusion of the compulsory heir in
b. Vices of consent.
from the inheritance, which includes his
legitime, his intestate portion, and any
c. It does not punish the result but the i.e., daughter living with a married man,
interference in the making/changing of estafadora, prostitutes, drug dealers,
the will. drug addict.
d. Will + disinheritance (will making) 3. Commission of crime which carries with
e. Will + amended will + disinheritance it the penalty of civil interdiction
(will changing) a. Descendant convicted of crime with
4. Support unjustifiably not given. civil interdiction. Necessarily
a. Must prove obligation to give support imposable, not actually imposed.
b. Spouses: mutual obligation to give b. Reclusion temporal, reclusion
support perpetua.
c. Reason must be unjustifiable
Ground for Disinheritance Only against
Grounds for Disinheritance Common Ascendants (Parents)
between Ascendants and Descendants
• Adultery and Concubinage – with the 1. Abandonment by parents
spouse of the testator a. Willfully left the children to fend for
1. It must be the heir who committed such themselves
liaison b. Abdication of parental duties.
2. With the legal spouse of the testator c. Only refers to abandoned child.
3. Not necessarily incestuous d. Induced daughters to lead a
4. Applicable to both legitimate and illegitimate disgraceful life – also applicable to sons.
descendant
2. Attempt on the life of one parent
Grounds for Disinheritance Common against another parent.
Ascendant and Spouse
Loss of parental authority a. Parent v. parent
1. Causes: Arts. 230, 231, 232 of the b. Even if parents are not married, it is
Family Code still a ground.
2. Ascendant of testator c. No need for conviction. As long as
3. Spouse has given cause for loss of the heir can prove that there is an
parental authority. attempt.
4. No actual deprivation, but it must d. They do not need to be spouses.
exist. It means that the act is committed However, the testator must be a
which may be a cause for loss of parental common child.
authority over their common children,
Grounds for Disinheritance Only against
EXCEPT for those enumerated in A.
spouse – refers to legal spouses only,
5. There are no common grounds
legally married to each other
between spouse and descendants.
1. Giving cause for legal separation
a. No need for previous conviction
Grounds for Disinheritance Only against
b. Prove infidelity if cause is contested
Descendant
c. No need to prove grounds unless
1. Maltreatment of testator
contested by the heir.
a. By word – slander, offensive
d. Legal separation instituted but not
language, insult, libel. May be spoken
terminated, OK
or written.
e. If there is already a decree:
b. By deed – no need for violence,
i. Ground is conclusive
something which caused the testator
ii. But, there is a need to
to be humiliated. Laying hands if not
disinherit
under attempt on life.
iii. Effects: Guilty spouse is not
2. Leading a disgraceful life (or dishonest) entitled to inherit.
f. See 10 causes under the Family
Code.
2. Support – refusal to give support to the
children
a. Offended the testator
b. Common children of the testator and
the spouse
c. Spouse refuses to give support to the
child
d. Parents share in support of their
common children. Refusal of the other
spouse causes damage to the other.
(testator)
GROUND CHILD/ PARENT/ SPOUSE
DESCEND ASCEND
Attempt against the life of √ √ √

the testator, spouse,
ascendant, descendant
Accusation of a crime with √ √ √

penalty of six years
Induce testator to √ √ √
make/change the will.
Support unjustifiably not √ √ √

given
Adultery and Concubinage √ √ N/A
Loss of parental authority N/A √ √
Grounds Specific to a 1.Maltreatment 1. Abandonment by 1 Giving Cause

Particular Heir of testator parents Legal
Separation
2. Leading a 2. Attempt on the
disgraceful life life of one parent 2. Support
against another
3. Commission
parent.
of crime which
carries with it
the penalty of
civil interdiction
IMPERFECT DISINHERITANCE: Disinheritance • Even if validly disinherited, heir can still be
which does not have one or more of the validly restored in the legitime by
essential requisites for its validity. RECONCILIATION.
EFFECTS OF IMPERFECT DISINHERITANCE
1. If the testator had made • A subsequent reconciliation between the
disposition of the entire estate; offender and the offended person deprives
annulment of the testamentary the latter of the right to disinherit and
disposition only in so far as they renders ineffectual any disinheritance that
prejudice the legitime of the person may have been made. (Art. 922)
disinherited; does not affect the • Reconciliation – when in “speaking terms
dispositions of the testator with respect again,” no particular form required, it may
to the free portion be express or tacit. However, mere civility
2. If the testator did not which may characterize their relationship is
dispose of the free portion; compulsory not enough.
heir given all that he is entitled to • In order for reconciliation to be effective, the
receive as if the disinheritance has not testator must pardon the disinherited heir.
been made, without prejudice to lawful Such pardon must specifically refer to the
dispositions made by the testator in heir and to the acts causing the
favor of others disinheritance. The heir must accept the
3. Devisees, legacies and pardon.
other testamentary dispositions shall be • In unworthiness, there must a pardon in
valid to such extent as will not impair the writing to remove incapacity to inherit.
legitime However, it does not have to be in a will.
• If grounds for disinheritance and
IMPERFECT PRETERITION unworthiness are common, reconciliation
DISINHERITANCE does not erase the fact that the heir is
Person disinherited may The person omitted unworthy. What then is the effect of a
be any compulsory heir must be a compulsory subsequent reconciliation upon the heir’s
heir in the direct line capacity to succeed?
EXPRESS IMPLIED 1. If disinheritance has
INTENTIONAL EITHER intentional or
been made: Rule on reconciliation
unintentional
applies, the disinheritance becomes
partial annulment of Effect: total
ineffective
institution of heirs annulment of
2. If disinheritance has
institution of heirs
not been made: The rule on
reconciliation does not apply, the heir
REVOCATION OF DISINHERITANCE
continues to be incapacitated to succeed
1. Reconciliation
unless the testator pardoned him under
NOTE: This refers to the resumption of
Art. 1033.
genuine cordial relationship between the
testator and the disinherited heir,
LEGACIES AND DEVISES
approximating that which prevailed before
PERSONS CHARGED WITH LEGACIES AND
the testator learned of the cause for
DEVISES:
disinheritance, reciprocally manifested by
their actions subsequent to the act of 1. Compulsory heir;
disinheritance. 2. Voluntary heir;
2. Subsequent institution of 3. Legatee or devisee;
the disinherited heir 4. Estate.
3. Nullity of the will which
contains the disinheritance • If the will is silent as to who
shall pay or deliver the legacy/devise,
NOTES: 1. If there is an
administration proceedings, there is a
presumption that such legacy or devise
constitutes a charge against the 1. Testator transforms the thing bequeathed in
decedent’s estate such a manner it does not retain either the
2. If there is no form or the denomination it had.
administration proceedings, it is a 2. The testator by any title or for any cause
charge upon the heirs (Art. 926, par. 2) alienates the thing bequeathed, or any part
• Since legacies and devises thereof, it being understood that in the latter
are to be taken from the disposable free case the legacy or devise shall be without
portion of the estate, the provisions on only with respect to the part alienated
institution of heirs are generally applicable EXCEPT: when the thing should again
to them belong to the testator after alienation.
• The legatees/devisees shall 3. The thing bequeathed is totally lost during
be liable for the charge to the extent of the the lifetime of the testator, or after his death
value of the legacy/devise received. without the heirs fault;
• The compulsory heir shall 4. Other Causes: nullity of the will;
NOT be liable for the charge beyond the noncompliance with suspensive conditions
disposable portion given to him. It should affecting the bequests; sale of the thing to
not affect his legitime. pay the debts of the deceased during the
settlement of his estate.
ORDER OF PAYMENT IN CASE ESTATE IS
INSUFFICIENT TO COVER ALL LEGACIES
AND DEVICES
1. Remuneratory legacies or devises
2. Legacies or devises declared by the testator
to be preferential
3. Legacies for Support
4. Legacies for Education
5. Legacies or devises of a specific,
determinate thing which forms a part of the
6. estate
7. All others, pro-rata
WHEN LEGACY/DEVISE CAN BE REVOKED

BY OPERATION OF LAW
1. If the testator transform the thing
bequeathed or devised in such a manner
that it does not retain its form and
denomination
2. If the testator, by any title or for any cause,
alienates the thing bequeathed or devised or
any part thereof
3. If the thing bequeathed or devised is totally
lost during the lifetime of the testator, or
after his death without the heir’s fault
4. If the legacy is a credit against a third
person or the remission of a debt, and the
testator, subsequent to the making of the
will brings an action against such debtor for
payment
GROUNDS FOR REVOCATION OF LEGACIES

OR DEVISES
VALIDITY AND EFFECT OF LEGACY
Thing owned in part by testator General Rule: Conveys only interest or part owned by testator
(Art. 929)
Exception: if testator otherwise provides –
1. He may convey more than what he owns - the state should

try to acquire the part or interest owned by other parties.
If other parties are unwilling to alienate, the estate should
give the legatee/devisee the monetary equivalent
(analogy with Article 931)
2. He may convey less than what he owns (Article 794)
Thing owned by another General Rule:

1. If testator ordered acquisition of the thing - the
(Arts. 930-931) order should be complied with. If the owner is unwilling to
part with the thing, the legatee/devisee should be given
the monetary equivalent
2. If testator erroneously believed that the thing

belonged to him - legacy/device is void
Exception: if testator acquire the thing onerously or

gratuitously after making of the disposition, disposition is
validated
3. If testator knew that the thing did not belong to

him but did not order its acquisition - code is silent
but disposition should be considered valid - there is an
implied order to acquire and doubts must be resolved in
favor of intestacy
Thing already owned to the 1. If thing already belonged to legatee/devisee at

legatee/devisee (Arts 932-933) time of execution of will – legacy/devise is void
2. If thing was owned by another person at time of

making the will and thereafter it is acquired by
legatee/devisee:
a. If testator erroneously believed that he owned

the thing – legacy /devise is void
b. If testator was not in error –
i. If thing was acquired onerously by L/D –

L/D entitled to be reimbursed
ii. If thing was acquired gratuitously by

L/D – nothing is due
3. If thing was owned by testator at time will was made
and L/D acquired the thing from him thereafter – law is
silent
*Balane – L/D deemed revoked
*Tolentino – no intention to revoke (BUT if the testator has

not alienated the thing directly to the L/D, but to a 3rd
person and the former just acquired it from the latter,
there is an intention to revoke)
Legacy/Devise to remove an Valid, if the encumbrance can be removed for a consideration

encumbrance over a thing
belonging to testator (Art 932
par 2)
Legacy/Devise of a thing pledged The encumbrance must be removed by paying the debt unless
or mortgaged (Article 934) the testator intended otherwise
================================= BASIC PRINCIPLES IN INTESTATE
SUCCESSION
1. Intestate heirs always related by blood.
Except:
III. Legal or Intestate Succession a. Spouse - not related by blood,
(Arts. 960-1014) stranger in the family
A. General provisions (Arts. 960- b. Adoptive relation – adopter/adopted,
969) fiction by law created by adoption,
(1) Relationship (Arts. 963-969) purely personal
c. State – in the event no heir can
(2) Right of representation (Arts. inherit.
970-977)
B. Order of intestate succession 2. Rule of Proximity – The nearer excludes
(Arts. 978-1014, 992) the farther – the relative nearest in degree
================================= exclude the farther one, saving the right of
representation when it properly takes place.
III. GENERAL PROVISIONS ON LEGAL
NOTE: This is subject to rule of preference
OR INTESTATE SUCCESSION between lines. In case of disposition made
LEGAL OR INTESTATE SUCCESSION: That under Art. 959 in general terms in favor or
which is effected by operation of law in the the testator’s relatives, only rule of
absence or default of a will. proximity applies.
CAUSES OF INTESTATE SUCCESSION IN 3. Rule of Preference Between Lines –
GENERAL Direct line is always preferred over
collateral lines. The direct descending line
1. In the absence of applicable shall exclude those in the direct ascending
valid will and collateral lines, and those in the direct
a. Annulment of institution of ascending line shall, in turn, exclude those in
heirs. the collateral line.
b. When will loses its validity.
c. Testator did not make any 4. Rule of equal division – the relatives who
will. are in the same degree shall inherit in equal
d. Will not probated. shares same class
e. Revocation. Exception:
f. Preterition
a. Descending line – difference in class in
2. In the absence of qualified heirs the cases of legitimate or illegitimate
a. Partial institution of heir. In filiation.
such case, intestacy takes place as to i. In case of paternal/maternal
the undisposed portion (mixed lines
succession) ii. Collateral – half or full blood
b. Ineffective disinheritance (a b. Ascending line – the shares are divided
portion) equally between maternal and paternal
c. Predecease lines, which could result to unequal
d. Repudiation (one or all) shares when there is only one
e. Incapacity grandparent in the maternal line while
f. Disinheritance both grandparents survived in the
g. Institution subject to paternal side.
conditions c. Division among brothers and sisters,
i. Suspensive condition did some of whom are of the full and others
not happen of half blood; and
ii. Resolutory condition d. Division in cases where the right of
happens. representation takes place.
iii. Expiration of term or period
of institution 5. Rule of Barrier between the legitimate
iv. Non-compliance or family and the illegitimate family – the
impossibility of compliance with the illegitimate family cannot inherit by intestate
will. succession from the legitimate family and
vice-versa.
those of the following degree shall inherit in
6. Rule of Double Share for full blood their own right (per capita) and cannot
collaterals – when full and half-blood represent the person repudiating the
brothers or sisters, nephews or nieces, inheritance.
survive, the full blood shall take a portion in
the inheritance doubt that of the half-blood. REPRESENTATION: A right created by fiction of
law, by virtue of which the representative is
NOTE: In all cases where there has been an raised to the place and degree of the person
institution of heirs, follow the [I.S.R.A.I.] order represented, and acquires the rights which the
of Justice Paras. If the Institution fails, latter would have if he were living or if he could
Substitution occurs. If there is no substitute, have inherited.
right of Representation applies in the direct
descending line to the legitime of the vacancy is INSTANCES WHEN REPRESENTATION
caused by predecease, incapacity or OCCURS:
disinheritance. The right of Accretion applies to
the free portion when the requisites in Article 1. Predecease
1016 are present. If there is no substitute, and 2. Incapacity of Unworthiness
the right of representation or accretion does not 3. Disinheritance
apply, the rule of Intestate succession shall take
over. NOTE: In case of repudiation, accretion
takes place.
RULES ON RELATIONSHIP
• Although a renouncer cannot be
1. Number of represented, he can represent the
generations determines proximity person whose inheritance he has
2. Each generation renounced. Sayson v. CA, [205 SCRA
forms a degree 324]
3. A series of degrees
forms a line CHARACTERISTICS OF REPRESENTATION
4. A line may be direct
or collateral. A direct line is that constituted 1. A right of subrogation
by the series of degrees among ascendants 2. Exception to the rule on proximity and
and descendants (ascending and equal division
descending) 3. Called to succession by law
5. A collateral line is that 4. Representative succeeds the decedent
constituted by the series of degrees among and NOT the person represented
persons who are not ascendants or 5. Takes place when there is vacancy in the
descendants, but who come from a common inheritance brought about by
ancestor. predecease, incapacity, or disinheritance
6. Full blood: same 6. As a general rule, exercised only by the
father and mother, half blood: only one of grandchildren of the decedent
either parent is the same.
7. In adoption, the legal
filiation is personal and exists only between TESTAMENTARY INTESTATE
adopter and the adopted. The adopted is When Takes Place
deemed a legitimate child of the adopter. COMPULSORY HEIR: LEGAL HEIR:
EFFECTS OF INCAPACITY OR REPUDIATION dies before the dies before the

testator testator
1. If there are several relatives of the same
degree and on or more of them are is unworthy to is unworthy to
unwilling or incapacitated to succeed, his succeed succeed
portion shall accrue to the others of the
same degree (right of accretion) save the is disinherited
right of representation when it should Effects Upon The Division
take place. Acquires the right Acquires the right
with respect to the with respect to the
2. If the inheritance should be repudiated by legitime entire legal portion
the nearest relative, should there be only Per stirpes Per stirpes
one, or by all the nearest relatives called by
law to succeed, should there be several,
IN WHAT KINDS OF SUCCESSION
REPRESENTATION OPERATES
1. Legitimes
The children and descendants of the person

disinherited shall take his or her place and
shall preserve the rights of compulsory heir
with respect to the legitime (Art 923)
• And only when the heir to be
represented:
a. Predecease, becomes incapacitated, or
was disinherited by the testator.
b. Is a compulsory heir.
c. No right of representation if the heir to
be represented is a voluntary heir.
2. Intestate succession
• Representation occurs in all intestate

estate. All legal heirs may be represented
when proper. (It is not proper only when the
heir to be represented repudiated his share
in the inheritance)
OUTLINE OF RULES:
KIND OF HEIR Predecease Incapacity Renunciation Disinheritance
Compulsory Transmits Transmits Transmits Transmits

nothing; nothing; nothing; nothing;
Representation Representation NO Representation

Representation
Voluntary Transmits Transmits Transmits Not applicable

nothing; nothing; nothing;
NO NO NO
Representation Representation Representation
Legal Transmits Transmits Transmits Not applicable

nothing; nothing; nothing;
Representation Representation NO
Representation
IN WHAT LINES DOES REPRESENTATION 3. An adopted child

OBTAIN can neither represent nor be represented
1. Legitime - in the direct descending line • The rationale why an adopted child can
only. neither represent or be represented is
Representation does not exist in the because the legal relationship created by
ascending line. Hence, the father cannot the adoption is strictly between the
represent the son in the inheritance from the adopter and the adopted. Teotica v.
grandfather. Del Val, [13 SCRA 406]
2. Intestacy:
a. In the direct descending line. QUALIFICATIONS TO REPRESENT
b. In the collateral line, it takes place 1. The representative himself must have
only in favor of the children of brother or capacity to succeed the decedent
sisters (nieces and nephews of the 2. The representative need not be qualified to
decedent, not grand-nieces or grand- succeed the person represented.
nephews), whether of the full or half
blood, and only if they concur with at HOW REPRESENTATION OPERATES
least 1 uncle or aunt.
 Division shall be made PER STIRPES.
NOTE: If all the brothers and sisters are

disqualified, the nephews and nieces shall Factual Situation Division
inherit per capita.
If all the children are All grandchildren still
REPRESENTATION OF ILLEGITIMATE OR disqualified inherit per stirpes
ADOPTED CHILDREN
If all the brothers Nephews and nieces
1. If the child to be /sisters are inherit per capita
represented is legitimate – only legitimate disqualified
children and descendants can represent him.
2. If the child to be THE SUCCESSIONAL BARRIER
represented is illegitimate – both legitimate
and illegitimate children/descendants can • An illegitimate child has no right to
represent him. inherit ab intestato from the legitimate
children and relatives of his father or 6. State
mother; nor shall such children or relatives
inherit in the same manner from the
illegitimate child. (Art 992)
• The Barrier rule only applies if there is a

legitimate and illegitimate relation.
Example: A is the legitimate son of B. C is
the illegitimate son of A. C cannot inherit
from B if A predeceases, or becomes
incapacitated or be disinherited by B.
EFFECTS OF REPUDIATION
1. By representative – right of representation is
present
Example: A child who repudiates his

inheritance when his father died may still
represent the latter when his grandfather
dies.
2. By heir – no right of representation
ORDER OF INTESTATE SUCCESSION
INTESTATE HEIRS: Those who are called by

law to the succession either in the absence of a
will or of qualified heirs, and who are deemed
called based on the presumed will of the
decedent.
REGULAR ORDER OF SUCCESSION
1. Legitimate Children/Descendants
2. Illegitimate Children/Descendants
3. Legitimate Parents/ Ascendants
4. Illegitimate Parents
5. Surviving Spouse
5. Brothers, Sisters, Nephews, Nieces
6. Other Collaterals – to the 5th degree
7. State
NOTE: Decedent is a legitimate person
ORDER OF SUCCESSION (If descendent is a

legitimate person)
1. Legitimate Children/Descendants
2. Illegitimate Children/Descendants
3. Illegitimate Parents
4. Surviving Spouse
5. Brothers, Sisters, Nephews, Nieces

RULES OF EXCLUSION AND CONCURRENCE
Intestate Heir EXCLUDES CONCURS WITH

EXCLUDED
BY
Legitimate children Ascendants, No one Surviving spouse
and Legitimate collaterals
descendants and state Illegitimate
children
Illegitimate children Illegitimate No one Surviving spouse

and Descendants parents,
collaterals Legitimate
and state children and
legitimate parents
Legitimate parents Collaterals Legitimate Illegitimate

and legitimate and state children children and
ascendants surviving spouse
Illegitimate parents Collaterals Legitimate Surviving spouse

and state children and
illegitimate
children
Surviving spouse Collaterals No one Legitimate

other than children
siblings,
nephews and Illegitimate
nieces children
Legitimate
parents and
Illegitimate
parents
Siblings, nephews All other Legitimate Surviving spouse

nieces collaterals children,
and state illegitimate
children,
Legitimate
parents and
illegitimate
parents
Other collaterals Collateral Legitimate Collaterals in the

within 5th degree remoter in children same degree
degree and
state Illegitimate
children
Legitimate
parents
Illegitimate
parents and
Surviving
spouse
State No one Everyone No one
SUMMARY OF INTESTATE SHARES
HEIR LEGITIME FREE PORTION TOTAL
LEGITIMATE CHILDREN & (1/2) (1/2) 100%

DESCENDANTS
LEGIMITATE PARENTS & (1/2) (1/2) 100%

ASCENDANTS
1 (ONE) LEGITIMATE CHILDREN – 1/2 CHILDREN –

CHILDREN/DESCENDANT & 1/2
SURVIVING SPOUSE
SPOUSE -1/4 SPOUSE -1/4 SPOUSE - 1/2
LEGITIMATE CHILDREN (LC) & CHILDREN – 1/2 ENTIRE

SPOUSE ESTATE IS
SPOUSE – EQUAL DIVIDED
TO SHARE OF 1 EQUALLY
(ONE) LC BETWEEN
TOTAL
NUMBER OF
CHILDREN &
SPOUSE
LEGITIMATE CHILDREN (LC) & LC -1/2 WHAT REMAINS (IF WHOLE

ILLEGITIMATE CHILDREN (ILC) ANY) ESTATE
ILC – 1/2 OF DIVIDED BY
SHARE OF 1 THE RATIO OF
(ONE) LC 2:1 FOR EACH
LEGITIMATE
CHILD AS
COMPARED TO
THE
ILLEGITIMATE
CHILD
LEGITIMATE LEGITIMATE PARENT – 1/2

PARENTS/ASCENDANT & PARENTS/ASCEN
SURVIVING SPOUSE DANT – 1/2
SPOUSE – 1/4 SPOUSE -1/4 SPOUSE - 1/2
LEGIMITATE LEGITIMATE PARENTS - 1/2

PARENTS/ASCENDANTS & PARENTS/ASCEN
ILLEGIMTATE CHILDREN DANTS – 1/2
ILLEGIMITATE ILLEGITIMATE ILC - 1/2
CHILDREN – 1/4 CHILDREN - 1/4
ILLEGITIMATE CHILDREN & ILC – 1/3 ILC - 1/6 ILC - 1/2

SURVIVING SPOUSE
SPOUSE – 1/3 SPOUSE - 1/6 SPOUSE - 1/2
LEGIMIATE WHOLE
CHILDREN/DESCENDANTS, ESTATE
SURVIVING SPOUSE & LC –1/2 DIVIDED BY
ILLEGITIMATE CHILDREN THE RATIO OF
SPOUSE – EQUAL
2:1 FOR EACH
TO 1 (ONE) LC
LEGITIMATE
ILC – 1/2 OF CHILD AS
SHARE OF ONE COMPARED TO
(1) LC THE
ILLEGITIMATE
CHILD
LEGITIMATE LEGIMIATE LEGITIMATE

PARENTS/ASCENDANTS, PARENTS/ASCEN PARENTS - 1/2
SURVIVING SPOUSE, & DANTS –1/2 SPOUSE - 1/4
ILLEGITIMATE CHILDREN ILC - 1/4
SPOUSE – 1/8 SPOUSE - 1/8
ILC –1/4
SURVIVING SPOUSE GENERA (1/2) (1/2) 100%

LLY
ARTICUL (1/3) (2/3) 100%

O
MORTIS
ILLEGITIMATE CHILDREN ONLY (1/2) (1/2) 100%
ILLEGITIMATE PARENTS (1/2) (1/2) 100%
ILLEGITIMATE PARENTS & ILLEGITIMATE ILLEGITIMATE ILLEGIMITATE

SURVIVING SPOUSE PARENTS – 1/4 PARENTS - 1/4 PARENTS - 1/2
SPOUSE - 1/4 SPOUSE - 1/2
SPOUSE – 1/4
SIBLINGS, NEPHEWS &

NIECE (1/2) (1/2) 100%
SPOUSE – 1/2
NEPHEWS/SIB
LINGS 1/2
NEPHEWS/SIBLINGS
SURVIVING SPOUSE, SIBLINGS, SPOUSE (1/2) (1/2)
NEPHEWS & NIECES
WHEN DECEDENT HAS NO HEIRS 8. A renouncer can represent, but cannot be
1. Assignment and represented
Disposition of Assets 9. A person who cannot represent a near
a. if decedent is a resident of the relative cannot also represent a relative
Philippines at any time father in degree.
i. Personal property – to the
municipality of last residence MIXED SUCCESSION OR PARTIAL
ii. Real property – where INTESTACY
situated Mixed Succession: Succession that is effected
b. If decedent was never a resident partly by will and partly by operation of law.
of the Philippines Rules:
- Personal and real property – 1. The law of legitimes must be brought into
where respectfully situated operation in partial intestacy because the
testamentary dispositions can affect only the
2. How Property is disposable free portion but never the
to be Used legitimes.
a. For the benefit of public 2. If among the concurring intestate heirs there
educational and charitable institutions in are compulsory heirs, whose legal or
the respective municipalities/cities intestate portions exceed their respective
b. Alternatively, at the instance of legitmes, then the amount of the
an interested party, or motu proprio, the testamentary disposition must be deducted
court may order the permanent trust for from the disposable free portion, to be borne
the benefit of the institutions concerned by all the intestate heirs in the proportions
that they are entitled to receive from such
CARDINAL PRINCIPLES OF INTESTATE disposable free portion as intestate heirs.
SUCCESSION (By Justice Paras) 3. If the intestate share of a compulsory heir is
1. Even if there is an order of intestate equal to his legitime, then the amount of the
succession, the compulsory heirs are never testamentary disposition must be deducted
excluded. The Civil Code follows the only from the intestate shares of the others,
concurrence theory, not the exclusion in the proportions stated above.
theory. 4. If the testamentary dispositions consume
2. Right of Representation in the collateral line the entire disposable free portion, then the
occurs only in intestate succession, never in intestate heirs who are compulsory heirs will
testamentary succession because a get only their legitime, and those who are
voluntary heir cannot be represented not compulsory heirs will get nothing.
(collateral relatives are not compulsory
heirs) =================================
3. The intestate shares are either equal to or TOPICS UNDER THE SYLLABUS
greater than the legitime.
IV. Provisions Common to Testate
4. General Rule: Grand Children always inherit
by Right of Representation, provided and Intestate Succession (Arts. 1015-
representation is proper. 1105)
Exception: Whenever all the children A. Right of accretion (Arts. 1015-
repudiate, the grandchildren inherit in their 1023)
own right because Right of Representation (1) Definition and requisites (Arts.
would not be proper 1015-1016)
5. Nephews and nieces inherit either by Right
of Representation or in their Own Right
B. Capacity to succeed by will or
a. Right of Representation when they intestacy (Arts. 1024-1040)
concur with aunts and uncles (provided (1) Persons incapable of
that Right of Representation is proper) succeeding (Arts. 1027, 739,
b. Own Right: when they do not concur with 1032)
aunts and uncles (2) Unworthiness vs.
6. Illegitimate Children and Descendants of
Disinheritance
legitimates cannot represent because of the
barrier, but both the Illegitimate and C. Acceptance and repudiation of
Legitimate Children and Descendants of the inheritance (Arts. 1041-1057)
Illegitimates can. D. Collation (Arts. 908-910, 1061-
7. There can be reserva troncal in intestate 1062)
succession E. Partition and distribution of
estate (Arts. 1078-1105) instituted heirs that result to a vacancy in
(1) Partition (Arts. 1079, 1080) the inheritance, legacy or devise.
(2) Partition inter vivos
FUNDAMENTAL PRINCIPLES IN ACCRETION
(3) Effects of partition (Arts. 1091, 1. Accretion in testate succession only takes
1097, 1100, 1104-1105) place in the free portion. No accretion in
================================= the legitime because when the compulsory
heir repudiates his legitime, the other co-
IV. PROVISIONS COMMON TO compulsory heir inherits the repudiated
TESTATE AND INTESTATE share in their own right and not through
accretion. If the cause of the vacancy is
SUCCESSION
PID, representation will occur.
2. Accretion also takes place in cases of
RIGHT TO ACCRETION: When two or more
devisees and legatees and usufructuaries
persons are called to the same inheritance,
under the same conditions established for
devisee, or legacy, the part assigned to one
heirs.
who renounce or cannot receive his share or
3. Accretion is subordinate to substitution,
who died before the testator, is added or
because substitutes are instituted by the
incorporated to that of his co-heirs, co-
testator; hence, express will prevails over
devisees, or co-legatees
presumed will.
NOTE: if there is neither accretion nor
1. In Testamentary Succession
substitution in testamentary succession,
a. Predecease
the part left vacant will lapse into testacy
b. Incapacity
4. The one that the heir gets from accretion
c. Repudiation
can be renounced separate from the
d. Non-fulfillment of suspensive
inheritance attributed to the heir who will
condition imposed upon instituted heir
renounced the accrued inheritance.
e. Ineffective testamentary disposition
SUMMARY:
2. In Intestate Succession
I. In testamentary succession:
a. Predecease of a legal heir (only when
1. Legitime:
representation does not apply)
b. Incapacity of legal heir (only when • In case of predecease of an heir,
representation does not apply) there is representation if there are
c. Repudiation by a legal heir children or descendants; if none, the
others inherit in their own rights.
ELEMENTS OF ACCRETION IN • In case of incapacity, results are the
TESTAMENTARY SUCCESSION same as in predecease.
1. Two or more persons are called to the same • In case of disinheritance, results are
inheritance, or to the same portion thereof, the same as in predecease.
pro indiviso (aliquot share) • In case of repudiation by an heir, the
a. In cases of legacy or devise, as long as others inherit in their own rights.
there is no specific designation of the 2. Disposable free portion:
specific share of each legacy or devise. • Accretion takes place when
b. Not necessarily equal. requisites are present, but if such
c. Once a certain specific part of the free requisites are not present, the others
portion has already been specifically inherit in their own right.
earmarked, there is no accretion and
there is no express provision on II. In intestate succession:
accretion. • In case of predecease, there is
d. But, it is okay to earmark parts of the representation if there are children or
free portion as long as no specific descendants; if none, the others inherit
property has been designated. in their own rights.
• In case of incapacity, results are the
NOTE: The heir to whom the portion same as in predecease.
goes by the right of accretion takes it in
• In case of repudiation, there is always
the same proportion that they inherit
accretion.
2. Renunciation, predecease or incapacity of
CAPACITY TO SUCCEED
one (or more but less than all) of the
The following are capable of succeeding:
1. Natural Persons
a. General Rule – must be (1) living incapacitated is a compulsory heir, it does
when succession opens, and (2) not not affect the legitime but only the free
incapacitated or disqualified by law to portion.
succeed.
NOTE: It is enough that the heir, devisee 2. Those prohibited under Art 739 from
or legatee be already conceived in giving and receiving donation from each
accordance with Arts 40 and 41, to be other based on Morality or Public Policy
considered living. a. Those made between persons who were
b. If institution subject to a guilty of adultery or concubinage at the
suspensive condition – successor must time of the donation;
be living both when decedent dies and b. Those made between persons found
when the condition happens guilty of the same criminal offense, in
c. If institution subject to a consideration thereof;
suspensive term – must be alive only at c. Those made to a public officer or his
the moment of decedent’s death, wife, descendants and ascendants, by
successor need not be alive when the reason of his office.
term arrives.
NOTE: Possible only in testamentary
2. Juridical Persons succession. Therefore, if the one
- Organizations or associations which incapacitated is a compulsory heir, it does
possess juridical personality not affect the legitime but only the free
portion.
WHO ARE INCAPABLE OF SUCCEEDING
A. ABSOLUTE INCAPACITY 3. The following are incapable of succeeding by
1. Those not living at the time of death reason of unworthiness:
except Arts. 1026, 1027, and 1030 a. Parents who have abandoned their
2. Those who cannot be identified – children or induced their daughters to
uncertain persons (Art. 845) lead a corrupt or immoral life, or
3. Those who are not permitted by law to attempted against their virtue;
inherit (Art. 1027) b. Any person who has been convicted of
an attempt against the life of the
B. RELATIVE INCAPACITY testator, his or her spouse, descendants,
1. Those Prohibited under Art 1027 due to or ascendants;
Undue Influence or Interest c. Any person who has accused the testator
a. Priest who heard the confession of the of a crime for which the law prescribes
testator during his last illness, or the imprisonment for six years or more, if
minister of the gospel who extended the accusation has been found
spiritual aid to him during the same period groundless;
b. Relatives of such priest or minister of the d. Any heir of full age who, having
gospel within the 4th degree, the church, knowledge of the violent death of the
order, chapter, community, organization, or testator, should fail to report it to an
institution to which such priest or minister officer of the law within a month, unless
may belong the authorities have already taken
c. Guardian with respect to testamentary action; this prohibition shall not apply to
dispositions given by a ward in his favor cases wherein, according to law, there is
before the final accounts of the guardianship no obligation to make an accusation;
have been approved, even if the testator e. Any person convicted of adultery or
should die after the approval thereof; concubinage with the spouse of the
EXCEPT if the guardian is his ascendant, testator;
descendant, brother, sister, or spouse f. Any person who by fraud, violence,
d. Attesting witness to execution of will, their intimidation, or undue influence should
spouses, parents, children or any one cause the testator to make a will or to
claiming under such witness, spouse, change one already made;
parents or children g. Any person who by the same means
e. Physician, surgeon, nurse, health officer or prevents another from making a will, or
druggist who took care of the testator during from revoking one already made, or who
his last illness supplants, conceals, or alters the latter's
f. Individuals, associations, and corporations will;
not permitted by law to inherit h. Any person who falsifies or forges a
NOTE: Possible only in testamentary supposed will of the decedent. (756, 673,
succession. Therefore, if the one 674a)
4. A testamentary provision in favor of a
NOTE: The cause of unworthiness shall be disqualified person, even though made
without effect if the testator had knowledge under the guise of an onerous contract, or
thereof at the time he made the will, or if, made through an intermediary, shall be void.
having known of them subsequently, he should (Art. 755)
condone them in writing.
This is applicable to both testamentary and legal MANNER OF ACCEPTANCE OF INHERITANCE
succession. It is total in the sense that it extends 1. Express
not only to the free portion but also to the a. Public Document
legitime. b. Private Writing
4. By Operation of Law – The moment the 2. Tacit Acceptance – one resulting from acts
testator uses one of the acts of unworthiness by which the intention to accept is
as a cause for disinheritance, he thereby necessarily implied or which one would have
submits it to the rules on disinheritance. no right to do except in the capacity of an
Thus, reconciliation renders the heir. It can be presumed from certain acts of
disinheritance ineffective. the heir such as:
a. When heir sells, donates, or assigns his
PARDON OF ACTS OF UNWORTHINESS right.
EXPRESS IMPLIED b. When heir renounces it for the benefit of
Made by the execution Effected when testator one or more heirs.
of a document or any makes a will instituting c. When renunciation is in favor of all heirs
writing in which the the unworthy heir with indiscriminately for consideration
descendent condones knowledge of the d. Other acts of tacit acceptance:
the cause of incapacity cause of incapacity i. Heir demands partition of the
Cannot be revoked Revoked when the inheritance
testator revokes the ii. Heir alienates some objects of
will or the institution the inheritance
iii. Under Article 1057, failure to
signify acceptance or repudiation
TIME TO DETERMINE THE CAPACITY within 30 days after an order of
GENERAL RULE: at the moment of the death of distribution by the probate court.
the descedent.
CHARACTERISTICS OF REPUDIATION
EXCEPTION: 1. Free and Voluntary Act
a. Those disqualified under Art. 1032 (2,3,5) 2. Irrevocable once made and cannot be
wherein it is necessary to wait until final impugned, except in cases vitiating consent.
judgment is rendered 3. Retroactive
b. Those disqualified under Art.1032 (4)
wherein it is necessary to wait for the REQUISITES FOR A VALID REPUDIATION
expiration for the month allowed for report
c. If the institution of the heirs, legacy or Heir repudiating must be certain of two things
devise is conditional, the time of compliance before repudiating:
with the condition shall be considered. a. Death of the person from whom he is
to inherit;
NOTE: The action for a declaration of b. Right to the inheritance.
incapacity and recovery of the inheritance,
devise or legacy shall be 5 years from the time • Who may accept or repudiate? Any
the disqualified person took possession thereof. person having the free disposal of his
property UNLESS he is incapacitated such as
ADDITIONAL NOTES when he is a minor, deaf-mute who cannot
1. The capacity to succeed is governed by the read and write, judicially declared insolvent,
law of the nation of the decedent. under civil interdiction, in which cases his
2. Persons not incapacitated by law may guardian or representative shall be the
succeed by will or ab intestato. one to accept or repudiate. However, judicial
3. If the heir excluded from the inheritance by authorization is necessary in case of
reason of incapacity is a compulsory heir, repudiation.
and if such compulsory heir has children or
descendant, the latter shall acquire the If the beneficiary happens to be the POOR:
incapacitated heir’s right to the legitime (by a. Acceptance – person designated by the
representation.). testator to determine the beneficiaries and
to distribute the property. In default thereof, would receive by accretion:
the executor. considered as tacit acceptance.
b. Repudiation – beneficiaries themselves once iii. If gratuitous in favor of one
they are determined or some of his co-heirs – deemed
conveyance in favor of the co-heirs
If the beneficiary happens to be a specified, hence there is acceptance.
CORPORATION, ASSOCIATION, c. If onerously:
INSTITUTION, OR ENTITY: • There is no
a. Acceptance – legal representative repudiation
b. Repudiation – legal representative with • Transfer considered
judicial authorization to be with consideration
• There are also tax
If the beneficiary happens to be a implications because there are two
MARRIED WOMAN: she may either accept or transfers.
repudiate the inheritance without her husband’s
consent EFFECTS OF ACCEPTANCE AND
• How is repudiation made? The REPUDIATION
repudiation of the inheritance shall be made General Rule: irrevocable
in: Exception:
a. a public document - acknowledged 1. if made through any of the causes that
before a notary public, or vitiates consent (mistake, violence,
b. authentic instrument – equivalent to intimidation, undue influence and fraud)
an indubitable writing or a writing whose 2. when an unknown will appears
authenticity is admitted or proved, or
c. by a petition presented to the court COLLATION: the act by virtue of which, the
having jurisdiction over the testamentary persons who concur in the inheritance bring
or intestate proceedings. back to the common hereditary mass the
property which they have received from him, so
RATIO: The law considers that the act of that a division may be effected according to law
repudiation is more solemn that the act of and the will of the testator.
acceptance and that repudiation produces To collate is to bring back or to return to the
more violent and disturbing consequences. hereditary mass, in fact or by fiction, property
which came from the estate of the decedent,
• If the heir repudiates the inheritance to the during his lifetime, but which the law considers
prejudice of his own creditors, the latter may as an advance from the inheritance
petition the court to authorize them to PROPERTIES OR RIGHTS RECEIVED BY
accept it in the name of the heir. COMPULSORY HEIR NOT SUBJECT TO
• If an heir is both a testate and legal heir, COLLATION
repudiation of the inheritance as a testate 1. Property left by will
heir, he is understood to have repudiated in 2. Property which may have been donated by
both capacities. However, should he an ascendant of the compulsory heir
repudiate as a legal heir, without knowledge 3. Property donated to the spouse of the
of being a testate heir, he may still accept compulsory heir
the inheritance as a legal heir. 4. Expenses for support, education, medical
attendance even in extraordinary illness,
NOTES: If renounced in favor of other heirs, apprenticeship, ordinary equipment or
does it mean acceptance? It depends: customary gifts
a. If specific heir – whether or not 5. Expenses incurred by parents in giving their
renouncing heir receives anything, children a professional, vocational, or other
considered as acceptance on the part of career
the heir. There are two transfers. 6. Wedding gifts consisting of jewelry, clothing
b. If gratuitous – and outfit, given by parents or ascendants,
i. In favor of all his co heirs so long as they do not exceed 1/10 of the
indiscriminately - there is repudiation disposable portion
because heir deemed to have not
accepted. Hence, accretion takes OPERATIONS RELATED TO COLLATION
place. 1. Collation – adding to the mass of the
ii. In favor of all co-heirs but in hereditary estate the value of the donation
proportion different from those they or gratuitous disposition
2. Imputing or Charging – crediting the PARTITION AND DISTRIBUTION : The
donation as an advance on the legitime (if separation, division and assignment of a thing
the donee is a compulsory heir) or on the held in common among those to whom it may
free portion (if the donee is a stranger) belong. It includes every act which is intended
3. Reduction – determining to what extent the to put an end to indivision among co-heirs, and
donation will remain and to what extent it is legatees or devisees, although it should purport
excessive or inofficious to be a sale, exchange, compromise, or any
4. Restitution – return or payment of the other transaction. It is not subject to any form
excess to the mass of hereditary estate.
WHO MAY EFFECT PARTITION
PERSONS OBLIGATED TO COLLATE i. Decedent himself
GENERAL RULE: compulsory heirs during his lifetime by an act inter vivos or by
EXCEPTION: will;
a. When the testator should ii. Heir themselves;
have so expressly provided; and iii. Competent court; 3rd
b. When the compulsory heir person designated by the decedent
should have repudiated his inheritance
WHO CAN DEMAND PARTITION
• Grandchildren who survive with their uncles,
1. Compulsory heir;
aunts, or first cousins, and inherit by right of 2. Voluntary heir
representation. 3. Legatee or devisee;
4. Any person who has acquired interest in
NOTE: Grandchildren may inherit from the estate
grandparent in their own right (i.e. heirs next
in degree) and not by right of representation
if their parent repudiates the inheritance of WHEN PARTITION CANNOT BE DEMANDED
the grandparent, as no living person can be (PAPU)
represented except in cases of 1. When expressly Prohibited by the testator
disinheritance and incapacity. (In such himself for a period not exceeding 20 years;
cases, grandchildren are not obliged to bring 2. When the co-heirs Agreed that the estate
to collation what their parent has received shall not be divided for a period not
gratuitously from their grandparent) exceeding 10 years, renewable for another
WHAT TO COLLATE 10 years;
1. Any property or right received by gratuitous 3. When Prohibited by law;
title during the testator’s lifetime 4. When to partition the estate would render it
2. All that they may have received from the Unserviceable for the use for which it is
decedent during his lifetime intended.
3. All that their parents would have brought to
collation if alive. NOTE:
• Partition Inter Vivos – it is one that
PROPERTIES NOT SUBJECT TO COLLATION merely allocates specific items or pieces
1. Absolutely no collation – expenses for of property on the basis of the pro-
support, education (elementary and indiviso shares fixed by law or given
secondary only), medical attendance, under the will to heirs or successors.
even in extraordinary illness, • Partition is not itself a mode of acquiring
apprenticeship, ordinary equipment or ownership, nor a title therefore, this
customary gifts. partition, being predicated on
2. Generally not imputable to legitime: succession, necessitates relationship to
a. Expenses incurred by parents in giving the decedent (in case of intestacy) or a
their children professional, vocational or will duly probated (in case of testacy). A
other career unless the parents so partition inter vivos made in favor or
provide, or unless they impair the intestate heirs could be operative.
legitime Dispositions, however, to non-intestate
b. Wedding gifts by parents and heirs may suffer an impediment unless
ascendants consisting of jewelry, based on a valid will, except perhaps
clothing, and outfit except when they when such dispositions are intended to
exceed 1/10 of the sum disposable by take effect during the life of the testator
will. and the formalities of donations are
properly complied with.
PARTITION AND DISTRIBUTION
PROHIBITION TO PARTITION 2. Between several true heirs and a mistaken
1. The prohibition to partition for a period not heir – transmission to mistaken heir is VOID
exceeding 20 years can be imposed on the 3. Through error or mistake; share of true heir
legitime. is allotted to mistaken heir – partition shall
2. If the prohibition to partition is for more than not be rescinded unless there is bad faith or
20 years, the excess is void. fraud on the part of the other persons
3. Even if a prohibition is imposed, the heirs by interested, but the latter shall be
mutual agreement can still make the proportionately obliged to pay the true heir
partition. of his share
LEGAL REDEMPTION IN FAVOR OF CO- NOTE: Partition with respect to the mistaken
HEIRS heir is VOID.
• The right of legal redemption predicated
upon the fact that the sale made by the co- A VOID WILL MAY BE A VALID PARITION
heir is effected before the partition of the 1. If the will was in fact a partition; and
estate but after the death of the decedent. 2. If the beneficiaries in the void will were legal
heirs
Requisites:
1. There must be IMPORTANT PERIODS TO REMEMBER
several co-heirs PERIODS TO REMEMBER ON PARTITION
2. That one of them 1 month or less Testator, if publicly known
sells his right to a stranger before making a to be insane, burden of
3. That the sale is will proof is on the one claiming
made before the partition validity of the will
4. That the right of 20 years Maximum period testator
redemption must be exercised by one or can prohibit alienation of
more of the co-heirs within 1 month from dispositions
the time they were notified in writing by 5 years from To claim property
the co-heir vendor delivery to the escheated to the State
5. The vendee is State
reimbursed for the price of the sale. 1 month To report knowledge of
violent death of decedent
EFFECTS OF PARTITION lest he be considered
• Confers upon each heir the exclusive unworthy
ownership of the property adjudicated. 5 years from the Action for declaration of
• After the partition, the co-heirs shall be time disqualified incapacity & for recovery of
reciprocally bound to warrant the title to person took the inheritance, devise or
(warranty against eviction) and the quality of possession legacy
(warranty against hidden defects), each 30 days from Must signify
property adjudicated. issuance of order acceptance/repudiation
• The obligation of warranty shall cease in the of distribution otherwise, deemed
following cases: accepted
i. When the testator himself has 1 month form Right to repurchase
made the partition unless his intention written notice of hereditary rights sold to a
was otherwise, but the legitime shall sale stranger by a co-heir
always remain unimpaired. 10 years To enforce warranty of
ii. When it has been expressly title/quality of property
stipulated in the agreement of partition, adjudicated to co-heir from
unless there has been bad faith. the time right of action
iii. When the eviction was due to accrues
a cause subsequent to the partition, or 5 years from To enforce warranty of
has been caused by the fault of the partition solvency of debtor of the
distributee of the property. estate at the time partition
is made
EFFECTS OF INCLUSION OF INTRUDER IN 4 years form Action for rescission of
PARTITION partition partition on account of
1. Between a true heir and several mistaken lesion
heirs – Partition is VOID
END OF DISCUSSION
=========================
=================
III. LEASE 2. Lease of work (contract for a piece of
========================= work)
======== - One of the parties binds himself to
TOPIC UNDER THE SYLLABUS: produce a result out of his work or labor
A. Lease of Things - For a price certain
B. Lease of Work or Services
C. Lease of Rural and Urban Lands Duties Of A Contractor Who Furnishes Work
And Material
1. Qualified persons 1. Duty to deliver
2. Registration 2. Duty to transfer ownership
3. Prohibitions 3. Duty to warrant eviction and hidden defects
D. Contract for Piece of Work
E. Rights and Obligations of Lessor
and Lessee Remedies Of Employer In Case Of Defects
========================= • Ask contractor to remove the defect or to
execute another work
========
• If contractor fails or refuses to remove the
CONTRACT OF LEASE is a contract by which
defect, employer can ask another person to
one person binds himself to grant temporarily,
do it at the contractor’s expense.
the use of a thing or the rendering of some
service to another who undertakes to pay some
3. Lease of service
rent, compensation, or price
- One party binds himself to render to the
other some service
Characteristics Of Lease Of Things: (CLONS-
- For a price certain
PEP-TP)
1. Consensual
2. Lessor need not be the owner CONTRACT CONTRACT CONTRACT
3. Onerous FOR A OF LEASE OF OF LEASE
4. Nominate PIECE OF SERVICE OF THING
5. Subject matter must be within the commerce WORK (Locatio
of man (i.e. not belonging to public domain) (Locatio Operarum)
6. Principal contract Operis)
7. Purpose is to allow Enjoyment or use of a The object of The object of The object
thing contract is the contract is the of contract
8. Purpose to which the thing will be devoted result of the service itself is a thing
should not be immoral work without and not the
9. Period is Temporary considering result which it
10. Period may be definite or indefinite the labor that generates
produced it
NOTE: Persons disqualified to buy under Arts. If the result Even if the Lessor has
1490 and 1491 of the Civil Code are also promised is result to deliver
disqualified to become lessees of the things not intended is the thing
mentioned therein. (Art. 1646, NCC) accomplished, not attained, leased.
the lessor is the services of In case of
Kinds Of Lease not entitled to the lessor breach,
1. Lease of things (whether immovable or compensation must still be there can be
movable property) paid. an action for
• One of the parties binds himself to give to In case of specific
another the enjoyment or use of a thing breach, no performance
action for
• For a price certain and
specific
• For a period which may be definite or performance
indefinite
NOTE: However, no lease for more than 99 years Elements Of A Tenancy Agreement
shall be valid. (PACAPS)
1. Parties are the landowner and the tenant or
General Rule: The contract of lease may be agricultural lessee
made orally 2. Subject matter of the relationship is an
Exception: Lease of real property for more than agricultural land
1 year (must be in writing to comply with Statute
of Frauds)
3. There is consent between the parties to the It is limited to the It includes all possible
relationship. use specified in the uses and enjoyment of
4. Purpose of the relationship is to bring about contract the thing
agricultural production Lessor places and Owner allows the
5. There is personal cultivation on the part of maintains the lessee usufructuary to use and
the tenant or agricultural lessee and in the peaceful enjoy the property
6. Harvest is shared between the landowner enjoyment of the
and the tenant or agricultural lessee. thing
Its term is generally Its term may be for an
NOTE: Absence of any of the elements will not for a definite period indefinite period
make the alleged tenant a de facto tenant. It may be created by It may be created by
contract as a general law, contract, last will
RENT is the compensation either in money, rule or prescription
provisions, chattels, or labor, received by the Lessee has no duty Usufructuary has duty
lessor from the lessee. to make repairs to make repairs
Lessee has no duty Usufructuary has a duty
REQUISITES: to pay taxes to pay taxes
1. Must not be fictitious or nominal, Lessee cannot Usufructuary may
otherwise the contract is considered constitute a usufruct constitute a sublease
essentially gratuitous of the property
2. Must be capable of determination leased
3. May be in the form of products, fruits,
or construction, as long as it has value LEASE DISTINGUISHED FROM SALE
LEASE SALE
• Owner has the right to fix the rent because Only the use or Ownership is transferred
the contract is consensual and not imposed enjoyment is
by law. transferred
• Increasing the rent is NOT an absolute right Transfer is Transfer is permanent
of the lessor. temporary
• If the rent is fixed for the first time, courts Lessor need not be Seller must be the
cannot interfere, but if it is a renewal, the the owner owner at the time the
courts can settle the disagreements. property is delivered
• There being no agreement on the reasonable The price of the Usually, the selling price
compensation that a lessee must pay for its object (distinguished is mentioned
continuing use and occupation of the from the rent) is
premises after the termination of the lease, it usually not
was proper for the lower courts to determine mentioned
the same. MATERCCO v. First Landlink
Asia Development Corporation, [G.R. No. LEASE OF SERVICE DISTINGUISHED FROM
175678 (2007)] AGENCY
• In lease of rural lands, lessee has no right to LEASE OF AGENCY
a reduction of the rent on account of the SERVICES
sterility of land leased, or by reason of the It is based on It is based on
loss of fruits due to ordinary fortuitous employment representation
events, except when the loss more than ½ of – the lessor of – agent represents his
the fruits is through extraordinary and services does not principal and enter into
unforeseen fortuitous events unless there be represent his juridical acts
stipulation to the contrary. employer nor does
he execute juridical
LEASE DISTINGUISHED FROM USUFRUCT acts
LEASE USUFRUCT Principal contract Preparatory contract
Ownership on the Ownership of the thing
part of the lessor is on the part of the General Rule: A lease of real property is a
not necessary to grantor is necessary to personal right
constitute a contract constitute a usufruct Exceptions:
of lease 1. If it is for more than one year and to be
It is generally a It is always a real right enforceable it must be in writing
personal right and is 2. If it is registered with Registry of Property,
a real right only by regardless of its period
exception
Effects If Lease Of Real Property Is Not E. Rights and Obligations of Lessor
Registered: and Lessee
1. The lease is not binding on third persons
2. Such third person is allowed to terminate the Obligations Of The Lessor (Art 1654) (DNM)
lease in case he buys the property from the 1. To DELIVER THE THING which is the
owner-lessor object of the contract in such condition as to
3. Actual knowledge of existence and duration render it fit for the use intended
of lease is equivalent to registration 2. To make on the same during the lease all
4. Stranger knows of the existence of the lease, the NECESSARY REPAIRS in order to keep it
but was led to believe that the lease would suitable for the use to which it has been
expire soon or before the new lease in favor devoted, unless there is a stipulation to the
of him begins, the stranger can still be contrary
considered innocent 3. To MAINTAIN THE LESSEE IN THE
PEACEFUL AND ADEQUATE ENJOYMENT
Persons Disqualified To Become Lessees: OF THE LEASE for the entire duration of the
1. Husband and wife cannot lease to each contract
other their separate properties (Exception: - This is true only if the contract is valid.
separation of property) Where the contract is void, for having an
2. Those disqualified due to fiduciary existent contract of lease, the lessor has
relationship no right to lease the same property.
• Guardian: ward Bercero v. Capitol Development
• Agent: principal Corporation,[ G.R. No. 154765
• Executor and administrators (2007)]
• Public officer: state property
• Justices/judges: property under litigation Nature Of The Duty Of The Lessor To
• Others disqualified by law Maintain Peaceful Possession Of The
Premises By The Lessor
Lease By Filipinos - This is merely a warranty that the lessee
shall not be disturbed in his legal, and not
• May lease lands of public domain with an
physical, possession. Chua Tee Dee v.
area of 500 hectares and may acquire not
Court of Appeals, 429 SCRA 418
more than 12 hectares
Obligations Of The Lessee (Art. 1657) (PUP)
Lease By Corporations
1. PAY THE PRICE of the lease according to
• At least 60% Filipino-owned, may lease lands the terms stipulated
of public domain for a period of 25 years, 2. USE THE THING leased as a diligent
renewable for not more than 25 years; the father of a family devoting it to the use
area not to exceed more than 1,000 hectares stipulated, and in the absence of stipulation,
to that which may be inferred from the
Rules On Lease Of Things When Lessee Is nature of the thing leased, according to the
An Alien custom of the place
1. 99-year limit applies to aliens as long as it is 3. PAY THE EXPENSES for the deed of
a lease of personal property lease
2. Aliens CANNOT lease public lands, and
cannot acquire private lands except through Rights Of The Lessee
succession 1. Right to be respected in his possession
3. If lease of real property (private lands), 2. Right to be restored to said possession by the
maximum of 25 years renewable for another means established by law or by the Rules of
25 years (P.D. 713) Court, should he be disturbed therein
4. Under the Investor’s Lease Act of 1995, the
25-year period was extended to 50 years Remedies When Lessor Or Lessee Does Not
renewable for another 25 years provided the Comply With Their Obligations
following conditions are met: 1. Rescission and damages or
a. Lessee must make investments 2. Damages while allowing the contract to
b. Lease is approved by DTI remain in force
c. If terms are violated, DTI can terminate it
Remedy Of Lessee Is Lessor Refuses To
NOTE: the ILA did not do away with P.D. 713. Accept The Rentals
Under ILA the consent of DTI is required, while in - To make a proper tender of payment and
P.D. 713 it is not. consignation in order to extinguish the debt
NOTE: Lessee has no right of retention of the
Rules On Changing The Form Of The Lease premises if the lessor does not pay. His only right
- The lessor can alter the thing leased provided is right of removal if lessor does opt not to pay
there is no impairment of the use to which and appropriate.
the thing is devoted under the terms of the
lease Kinds Of Trespass In Lease:
- Alteration can also be made by the lessee so 1. Trespass in fact (perturbacion de mere
long as the value of the property is not hecho):
substantially impaired - Lessor is not liable for the mere fact of a
trespass or trespass in fact made by a
Rules In Case Of Urgent Repairs third person of a leased property.
- The lessee is obliged to tolerate the work, - Mere fact or mere act of trespass is when
although it may be very annoying to him and the third person claims no right whatever
although during the same time he may be - Physical enjoyment is reduced
deprived of a part of the premises, if repairs
last for not more than 40 days 2. Trespass in law (perturbacion de derecho):
- If repairs last for 40 days or more, lessee can - A third person claims legal right to enjoy
ask for reduction of the rent in proportion to the premises
the time – including the 1 st 40 days – and the - Lessor will be held liable
part of the property of which he is deprived.
Duration Of Lease
NOTE: In either case, rescission may be availed 1. Lease may be for a determinate time or fixed
of if the main purpose of the lease is to provide a period
dwelling place and the property becomes - Lease will be for the said period and it
uninhabitable. ends on the day fixed without need of a
demand
Effects If Lessor Fails To Make Urgent 2. Lease may be without a fixed period
Repairs a. For rural lands (Art. 1682)
The lessee may: - It shall be for all time necessary for
1. Order repairs at the lessor’s cost the gathering of fruits which the
2. Sue for damages whole estate may yield in 1 year, or
3. Suspend the payment of the rent which it may yield once
4. Ask for rescission, in case of substantial b. For urban lands (Art. 1687)
damage to him - If rent is paid daily, lease is from day
to day
EFFECT OF DESTRUCTION OF THE SUBJECT - If rent is paid weekly, lease is from
MATTER WITH RESPECT TO THE LEASE week to week
IF TOTALLY IF ONLY PARTIALLY - If rent is paid monthly, lease is from
DESTROYED DESTROYED month to month
Lease is extinguished Lessee can choose - If rent is paid yearly, lease is from
between reduction of year to year
the rent and rescission
Rules On Extension Of The Lease Period
1. If a lease contract for a definite term allows
Rules Upon Termination Of Lease Governing lessee to extend the term, there is no
Useful Improvements Caused By The Lessee necessity for lessee to duly notify lessor of
If made in good faith and suitable to the use for his desire to so extend the term, unless the
which the lease is intended, without altering the contrary is stipulated.
form or substance of the property: 2. “may be extended” as stipulation: lessee can
1. Lessor may appropriate the improvements extend without lessor’s consent but lessee
provided he pays the lessee ½ of its value at must notify lessor.
that time 3. “may be extended for 6 years, agreed upon
2. If lessor does not appropriate, lessee may by both parties” as stipulation: this must be
remove the improvements even if the interpreted in favor of the lessee. Hence,
principal thing may suffer damage, ordinarily the lessee, at the end of the
3. If improvement is ornamental, no right of original period, may either:
reimbursement, but lessee may remove them a. leave the premises
provided no damage is caused to the b. remain in possession
principal thing 4. In co-ownership, assent of co-owner is
needed; otherwise, it is void or ineffective as
against non-consenting co-owners.
5. Where according to the terms of the contract, and for as long as he can pay the rentals and
the lease can be extended only by the its increases.
written consent of the parties thereto, no - This is not permissible; it is a purely
right of extension can rise without such potestative condition because it leaves the
written consent. effectivity and enjoyment of leasehold rights
to the sole and exclusive will of the lessee.
IMPLIED NEW LEASE (Tacita Reconducion)
- Lease that arises if at the end of the SUBLEASE
contract the lessee should continue enjoying - A lessee may sublease the thing leased
the thing leased for 15 days with the unless there is an express prohibition to do
acquiescence of the lessor, unless a notice to so
the contrary had previously been given by - Remedy of lessor if lessee violates
either party. prohibition: action for rescission of the lease
- Period of the implied new lease is not that and damages
of the original contract but the time - If the prohibition to sublease is not express
established in Arts 1682 and 1687 (see but only implied, the sublease will still be
Duration of Lease above) allowed
- Other terms of the original contract are - Duration of sublease cannot be longer than
revived except option to purchase in case that of the lease to which it is dependent
such was in the original contract - The prohibition against subleasing may not
embrace the taking in of boarders. Mallarte
NOTE: Terms that are revived are only those v. Court of Appeals, G.R. No. 85108
which are germane to the enjoyment of (1989)
possession, but not those with respect to special - In a sublease arrangement, there are two
agreements which are by nature foreign to the distinct leases: the principal lease and the
right of occupancy or enjoyment inherent in a sublease.
contract of lease – such as an option to purchase
the leased premises. Dizon v. Magsaysay, SUBLEASE DISTINGUISHED FROM AN
[G.R. No. 23399 (1974)] ASSIGNMENT OF A LEASE
SUBLEASE ASSIGNMENT
Requisites For Implied New Lease: Lessee remains a Lessee is disassociated
1. The term of the original contract has party in the contract from the original
EXPIRED contract of lease
2. The lessor HAS NOT GIVEN THE LESSEE a Two leases and two Only one (lessor-
notice to vacate distinct juridical assignee who becomes
3. The lessee CONTINUED ENJOYING THE relationship (lessor- the lessee) because
THING LEASED FOR AT LEAST 15 DAYS lessee and sublessor- lessee transmits
with the acquiescence of the lessor sublessee) absolutely his rights and
his personality
When There Is No Implied New Lease: disappears
1. When before or after the expiration of the Sublessee does not Assignee has a direct
term, THERE IS A NOTICE TO VACATE have any direct action against the lessor,
given by either party action against the there being novation
2. When there is NO DEFINITE FIXED PERIOD lessor
IN THE ORIGINAL LEASE CONTRACT as in Subleasing is allowed Assignment is not
the case of successive renewals unless there is an allowed unless the lessor
express prohibition gives his consent
EXTENSION DISTINGUISHED FROM
RENEWAL NOTE: The sub-lessee is primarily liable to his
EXTENSION OF RENEWAL OF LEASE sub-lessor and only a court can
LEASE CONTRACT CONTRACT extinguish or modify this primary liability
Original contract Original contract ceases if the sub-lessor contests the pre-
subsists to exist termination of the principal lease by the
Creates additional Creates a new contract lessor. Tamio v. Ticson, G.R. No.
term 154895 (2004)]
PERPETUAL LEASE Circumstances When A Sublessee Is Made

- A lease contract providing that the lessee can Liable To The Lessor:
stay in the premises for as long as he wants 1. For all acts which affect the use and
preservation of the thing leased in the
manner stipulated between the lessor and Grounds For Judicial Ejectment (SEC. 7)
the lessee 1. Assignment of lease or subleasing of
2. For any rent due to the lessor from the lessee residential units in whole or part, including
which the latter failed to pay the acceptance of boarders or bedspacers,
• Sublessee is subsidiarily liable without the written consent of the
• Sublessee shall not be responsible onwer/lessor.
beyond amount of rent due from him, in 2. Arrears in payment of rent for a total of 3
accordance with the terms of the months; Provided, That in the case of refusal
sublease, at the time of the extrajudicial by the lessor to accept payment of the rental
demand by the lessor agreed upon, the lessee may either deposit
by way of consignation, the amount in court,
Grounds For Ejectment or with the city or municipal treasurer, as the
1. When the period agreed upon or that case may be, or in a bank in the name of the
which is fixed for the duration of leases (Arts. lessor and with notice to the latter, within 1
1682 and 1687) has expired (see Duration of month after the refusal of the latter to accept
Lease) payment.
2. Lack of payment of the price stipulated • The lessee shall thereafter deposit the
- In case lessor refuses to accept rentals, rental within 10 days of every current
lessee should make tender of payment, month. Failure to deposit the rental or 3
and consignation otherwise there is no months shall constitute a ground for
payment ejectment.
- Willingness to pay is not payment • The lessor, upon authority of the court in
3. Violation of any of the conditions agreed case of consignation or upon joint
upon in the contract affidavit by him and the lessee to be
4. When the lessee devotes thing leased to submitted to the city or municipal
any use or service not stipulated which treasurer and to the bank where the
causes the deterioration thereof, or if he does deposit was made, shall be allowed to
not observe the requirement in Art 1657. withdraw the deposit.
3. Legitimate need of the owner/lessor to
R.A. 9341 - AN ACT ESTABLISHING repossess his /her property for his/her own
REFORMS IN THE REGULATION OF RENT OF use or of any immediate member of his/her
CERTAIN RESIDENTIAL UNITS, PROVIDING family as a residential unit.
THE MECHANISMS THEREFOR AND FOR 4. Need of the lessor to make necessary
OTHER PURPOSES (APPROVED LAST DEC. repairs of the leased premises which is the
21, 2005) subject of an existing order of condemnation
by appropriate authorities concerned in order
Limitations Imposed Upon The Lessor For to make the said premises safe and
The Protection Of The Lessee (SECS. 3, 5 habitable.
AND 8) 5. Expiration of the period of the lease
1. The rent of any residential unit covered contract.
by this Act shall not be increased by more
than 10% annually as long as the unit is
occupied by the same lessee. When the
residential unit becomes vacant, the lessor
may set the initial rent for the next lessee.
2. No lessor may demand more than 1
month advance rent. Neither can he demand
more than 2 months deposit which shall be
kept in a bank under the lessor’s account
name during the entire duration of the lease
agreement. Any and all interest that shall
accrue therein shall be returned to the lessee
at the expiration of the lease contract.
3. No lessor or his successor-in-interest shall
be entitled to eject the lessee upon the
ground that the leased premises have been
sold or mortgaged to a third person
regardless of whether the lease or mortgage
is registered or not.
IV. PARTNERSHIP b. "kept secret among the
members" - secrecy directed not to third
========================= persons but to some of the partners
======== c. This does not mean that there
TOPICS UNDER THE SYLLABUS could be no contractual relations amongst
A. CONTRACT OF PARTNERSHIP the parties; there is only no partnership or
B. RIGHTS AND OBLIGATIONS OF association with distinct legal personality
PARTNERSHIP
CHARACTERISTICS:
C. RIGHTS AND OBLIGATIONS OF 1. Essentially contractual in nature (Art. 1767,
PARTNERS AMONG THEMSELVES 1784)
D. OBLIGATIONS OF 2. Separate juridical personality (Art. 1768)
PARTNERSHIP/PARTNERSHIP TO 3. Delectus personae
THIRD PERSONS 4. Mutual Agency (Art. 1803)
E. DISSOLUTION 5. Personal liability of partners for partnership
debts
F. LIMITED PARTNERSHIP
========================= 3. RULES TO DETERMINE EXISTENCE
========
CHAPTER 1: GENERAL PROVISIONS GENERAL RULE: Persons who are NOT partners
as between themselves, CANNOT be partners as
A. CONTRACT OF PARTNERSHIP
to third persons. (Art. 1769(1))
1. DEFINITION
EXCEPTION: Partnership by Estoppel under Art.
1825
PARTNERSHIP - a contract wherein two or more
persons bind themselves to contribute money,
Other Rules to Determine whether a
property, or industry to a common fund, with the
partnership exists: (Art. 1769)
intention of dividing the profits among
The following, alone, do not establish partnership
themselves.
1. Co-ownership or co-possession
2. Sharing of gross returns, whether or not the
2. ELEMENTS
persons sharing them have a joint or
common right or interest in any property
ELEMENTS OF A PARTNERSHIP:
from which the returns are derived;
There shall be a partnership whenever:
1. There is a meeting of the minds;
Receipt by a person of a share of the profits of a
2. To form a common fund;
business is prima facie evidence that he is a
3. With intention that profits (and losses) will be
partner in the business, UNLESS such were
divided among the contracting parties.
received in payment:
1. Debt by installments or otherwise;
ESSENTIAL FEATURES:
2. Wages or rent;
1. There must be a VALID CONTRACT.
3. Annuity;
2. The parties must have legal capacity to
4. Interest on loan;
enter into the contract.
5. Consideration for sale of goodwill of
3. There must be a mutual contribution of
business/other property by installments
money, property, or industry to a
common fund.
A partnership must have a lawful object or
4. There must be a lawful OBJECT.
purpose, and must be established for the
5. The purpose or primary purpose must be to
common benefit or interest of the partners.
obtain profits and divide the same among
the parties.
When an unlawful partnership is dissolved by a
judicial decree, the profits shall be confiscated in
ADDITIONAL REQUIREMENT FOR JURICICAL
favor of the State, without prejudice to the
PERSONALITY
provisions of the Penal Code governing the
a. It is also required that the
confiscation of the instruments and effects of a
articles of partnership must NOT be kept
crime.
SECRET among the members; otherwise,
the association shall have no legal
EFFECTS OF AN UNLAWFUL PARTNERSHIP:
personality and shall be governed by the
1. Void ab initio - never existed in the eyes of
provisions on CO-OWNERSHIP (Art. 1775).
the law. (Art. 1409(1))
2. Profits shall be confiscated in favor of the 6. UNIVERSAL VS. PARTICULAR; GENERAL
government. (Art. 1770) VS. LIMITED
3. Instruments or tools and proceeds of the
crime shall also be forfeited in favor of the
UNIVERSAL VS. PARTICULAR
government. (Art. 1770, Art. 45-RPC)
4. The contributions of the partners shall not be
UNIVERSAL PARTNERSHIP OF ALL PRESENT
confiscated unless they fall under no. 3. (See
PROPERTY —comprises the following:
Arts. 1411 and 1412)
1. Property which belonged to each of the
partners at the time of the constitution of the
Judicial decree is not necessary to dissolve an
partnership
unlawful partnership.
2. Profits which they may acquire from all
property contributed
That there is no legally constituted partnership
UNIVERSAL PARTNERSHIP OF PROFITS —
DOES NOT mean that there are no contractual or
comprises all that the partners may acquire by
legal relations among the parties.
their industry or work during the existence of the
partnership
EFFECT OF PARTIAL ILLEGALITY:
Where a part of the business of a partnership is
Note: Persons who are prohibited from giving
legal and a part illegal, an account of that which
donations or advantage to each other cannot
is legal may be had.
enter into a universal partnership. (Art. 1782)
Where, without the knowledge or participation of
PARTICULAR PARTNERSHIP—has for its
the partners, the firm's profits in a lawful
objects:
business have been increased by wrongful acts,
1. Determinate things
the innocent partners are not precluded as
2. Their use or fruits
against the guilty partners from recovering their
3. Specific undertaking
share of the profits.
4. Exercise of profession or vocation
4. HOW PARTNERSHIP FORMED
GENERAL VS. LIMITED
GENERAL PARTNERSHIP—consists of general
GENERAL RULE: No special form is required for
partners who are liable pro rata and subsidiarily
the validity of a contract. (Art. 1356)
and sometimes solidarily with their separate
property for partnership debts.
BURDEN OF PROOF AND PRESUMPTION
1. Must be proven, not presumed.
LIMITED PARTNERSHIP—one formed by 2 or
2. Persons acting as partners presumed to have
more persons having as members one or more
entered into contract of partnership. Burden
general partners and one or more limited
of proof shifted to party denying its
partners, the latter not being personally liable for
existence.
the obligations of the partnership
3. Extant Parntership presumed to exist until
proven terminated.
7. PARTNERSHIP BY ESTOPPEL
4. Use of the term “partner” does not
necessarily show existence of partnership.
PARTNER BY ESTOPPEL—by words or conduct,
Non-use of the terms “parntership” or
he does any of the ff.:
“partners” not conclusive as to non-existence
Directly represents himself to anyone as a
or partnership, but entitled to weight.
partner in an existing partnership or in a non-
existing partnership
5. PARTNERSHIP TERM
Indirectly represents himself by consenting to
another representing him as a partner in an
PARTNERSHIP AT WILL — one in which no
existing partnership or in a non-existing
fixed term is specified and is not formed for a
partnership
particular undertaking or venture which may be
terminated anytime by mutual agreement
Elements to establish liability as a partner on
ground of estoppel:
PARTNERSHIP WITH A FIXED TERM — the
Defendant represented himself as
term for which the partnership is to exist is fixed
partner/represented by others as such and
or agreed upon or one formed for a particular
not denied/refuted by defendant
undertaking
Plaintiff relied on such representation
Statement of defendant not refuted
LIABILITIES IN ESTOPPEL form a partnership for the exercise of a
All partners Partnership is liable profession.
consented to
representation The Architecture Act of 2004 (R.A. 9266)
No existing Person who represented grants that a firm, company, partnership,
partnership & all himself & all those who corporation or association may be registered or
those represented made representation liable licensed as such for the practice of architecture
consented; pro-rata/jointly under the following conditions:
Not all partners of a. Only Filipino citizens properly registered
existing partnership and licensed as architects under this Act
consents to may, among themselves, or together with
representation allied technical professionals, form and
No existing Person who represented obtain registration as a firm, company,
partnership & not himself liable & those who partnership, association or corporation for
all represented made/consented to the practice of architecture;
consented; representation separately b. Registered and licensed architects shall
None of partners in liable compose at least seventy-five percent
existing partnership (75%) of the owners, shareholders,
consented members incorporators, directors,
executive officers, as the case may be;
8. PARTNERSHIP VS. JOINT VENTURE c. Individual members of such firm,
partnership association or corporation
Particular partnership distinguished from shall be responsible for their individual
joint venture: Heirs of Tan Eng Kee v. CA, G.R. and collective acts as an entity and as
No. 126881, October 3, 2000 provided by law;
d. Such firm, partnership, association or
A particular partnership is distinguished from corporation shall be registered with the
joint venture, to wit: Securities and Exchange Commission and
1. A joint venture (an American concept similar Board.
to our joint account) is a sort of informal
partnership, with no firm name and no legal 10. MANAGEMENT
personality. In a joint account, the See Rights and Obligations of Partners
participating merchants can transact Among Themselves
business under their own name, and can be
individually liable therefore; and B. RIGHTS AND OBLIGATIONS OF
2. Usually, but not necessarily a joint venture is PARTNERSHIP
limited to a single transaction, although the
business of pursuing to a successful General Rule – A partnership begins from the
termination may continue for a number of moment of the execution of the contract, unless
years; a partnership generally relates to a it is otherwise stipulated.
continuing business of various transactions of
a certain kind. Exception –
1. Where immovable property/real rights
It would seem that under Philippine law, a joint are contributed (Art. 1771)
venture is a FORM of PARTNERSHIP, Public instrument is necessary
specifically a particular partnership which has for Inventory of the property contributed must
its object specific undertaking. be made, signed by the parties and attached
to the public instrument otherwise it is VOID
The Supreme Court has, however, recognized 2. When the contract falls under the
a distinction between these two business coverage of the Statute of Frauds (Art.
forms and has held that although a 1409)
corporation cannot enter into a partnership, it 3. Where capital is P3,000 or more, in
may, however, engage in a joint venture with money or property (Art. 1772)
others. Aurbach v. Sanitary Wares, 180 Public instrument is necessary
SCRA 130 (1989) Must be registered with SEC
But failure to comply shall not affect the
9. PROFESSIONAL PARTNERSHIP liability of the partnership and the members
thereof to third persons
General Professional Partnership (Art.
A “void” partnership under Article 1773, in
1767, Par. 2): Two or more persons may also
relation to Article 1771, may still be considered
a partnership de facto or by estoppel vis-à-vis business or from transacting business with the
third persons; and may be considered by the partnership as if he were a stranger (Art. 1866,
courts as an ordinary contract (though not in relation to Arts. 1789, 1808, and 1854).
exactly an “Art. 1767” partnership) from which
rights and obligations may legally stem. Torres MUTUAL AGENCY
v. CA, 320 SCRA 428 (1999) (According to Dean Villanueva)
SEC Opinion, 1 June 1960: For purposes of Unless otherwise stated, all partners are
convenience in dealing with government offices considered agents and whatever any one of them
and financial institutions, registration of may do alone shall bind the partnership (Arts.
partnership having a capital of less than Php 1803(1), 1818)
3,000 is recommended.
Partners can dispose of partnership property
SEPARATE JURIDICAL PERSONALITY even when in partnership name (Art. 1819)
The partnership has a juridical personality Admission or representation made by any

separate and distinct from that of each of the partner concerning partnership affairs is
partners, even in case of failure to comply with evidence against the partnership (Art. 1820)
the requirements of Article 1772, first paragraph
(Registration with SEC). Notice to any partner of any matter relating to
partnership affairs is notice to the partnership
As a JURIDICAL PERSON, a partnership may: (Art. 1821)
1. Acquire and possess property of all kinds;
2. Incur obligations; and Wrongful act or omission of any partner acting
3. Bring suit, in conformity with the laws and for partnership affairs makes the partnership
regulations of their organization. (See Art. liable (Art. 1822)
46)
Partnership bound to make good losses for acts
DELECTUS PERSONAE - The selection or choice or misapplications of partners (Art. 1823)
of the person.
Implications: (Dean Villanueva) UNLIMITED LIABILITY
The assignment of a partner of his share does (According to Dean Villanueva)
not make assignee a partner (Art. 1804 and
1813) All partners are liable pro rata with all their
The existence of the partnership is closely properties and after partnership assets have
tied-up to the particular contractual been exhausted, for all partnership debts
relationship of the partners (see instances of (Art. 1816)
dissolution of the partnership upon change of
contractual relationship.) Any stipulation against personal liability of
partners for partnership debts is void, except
PARTNERSHIP RELATIONSHIP IS FIDUCIARY as among them (Art. 1817)
IN NATURE
1. Right to choose co-partners – No one can Partners are liable solidarily with the
become member of partnership without the partnership for everything chargeable to the
consent of all other partners partnership when caused by the wrongful act
2. Power to dissolve partnership – Allowed the or omission of any partner acting in the
power, not necessarily the right, to dissolve ordinary course of business of the
partnership. Dissolution must be in good partnership or with authority from the other
faith. Bad faith will not prevent dissolution partners and for partner's act or
but may result in liability for damages. misapplication of properties (Art. 1824)
Doctrine of Delectus Personae: Partnership at A newly admitted partner into an existing
will is predicated on the mutual desire and partnership is liable for all the obligations of
consent of the partners. The right to choose with the partnership arising before his admission
whom to associate himself is the very foundation but out of partnership property shares (Art.
and essence of that partnership. Ortega v. CA, 1826)
G.R. No. 109248, July 3, 1995
Partnership creditors are preferred to those
Delectus personarum; does not apply to a limited of each of the partners as regards the
partner who merely contributes his interest and partnership property (Art. 1827)
is not barred from engaging in competitive
Upon dissolution of the partnership, the act with of cannot nt is
partners shall contribute the amounts 3rd stipulation represent vested
necessary to satisfy the partnership liabilities persons to contrary, the co- with the
(Art. 1839(4), (7)) a partner ownershi Board of
may bind p Directors
partnership
(each
partner is
agent of
partnership
)
Effect of Death of Death of Death of
d partner co-owner stockholde
e results in does not r does not
PARTNERSHIP DISTINGUISHED FROM CO- a dissolution necessari dissolve
OWNERSHIP AND CORPORATION t of ly corporatio
h partnership dissolve n
PARTNERS CO-
BASIS CORP co-
HIP OWNER
ownershi
SHIP
p
Creation Created by Created Created by
Dissoluti May be May be Can only
a contract, by law law
o dissolved dissolved be
by mere
n at any time anytime dissolved
agreement
by the will by the with the
of the
of any or all will of consent of
parties
of the any or all the state
Juridical Has a None Has a
partners of the co-
personali juridical juridical
owners
ty personality personality
# of Minimum of Minimum Minimum
separate separate
incorpora 2 persons of 2 of 5
and distinct and
tors persons incorporat
from that distinct
ors
of each from that
Commen From the None From date
partner of each
cement moment of of
stockholde
of execution issuance
r
juridical of contract of
Purpose Realization Common Depends
personali of certificate
of profits enjoymen on AOI
ty partnership of
t of a
incorporati
thing or
on by the
right
SEC
Duration/ No 10 years 50 years
Term of limitation maximu maximum,
existence m extendible
WHO MAY BE PARTNERS
to not
more than GENERAL RULE: Any person capacitated to
50 years in contract may enter into a contract of partnership.
any one EXCEPTIONS
instance Persons who are prohibited from giving each
Disposal/ Partner Co-owner Stockholde other any donation or advantage cannot
Transfera may not may r has a enter into a universal partnership. (Art.
bility of dispose of freely do right to 1782)
interest his so transfer Persons suffering from civil interdiction.
individual shares Persons who cannot give consent to a
interest without contract:
unless prior Minors
agreed consent of insane persons
upon by all other deaf-mutes who do not know how to write
partners stockholde
rs De Leon: There is no prohibition for partnerships
Power to In absence Co-owner Manageme to be partners, BUT THIS IS DOUBTFUL AND
IMPRACTICAL on account of Art. 1768 (that a • stand in place of creditors of the
partnership has a juridical personality separate partnership for any payments made by
from that of each of the partners) and of the the injured partner in respect of
essential attribute called delectus personae. partnership liabilities, after all liabilities to
third persons have been satisfied
MAY CORPORATIONS ENTER INTO • indemnity by the guilty partner against all
PARTNERSHIP? partnership debts and liabilities (Art.
Philippine Corporate Law (2001) by Dean 1838); relate to Art. 1831: with or
Villanueva (p. 902) citing various SEC without fraud or misrepresentation,
Opinions: injured partner may seek judicial
dissolution
Corporations may enter into partnership
agreements on the following conditions: Property – may include intangible or
Authority to enter into a partnership relation incorporeal, e.g. credit Lim Tong
is expressly conferred by the charter or the Lim v. Phil. Fishing Gear, 316
articles of incorporation (AoI), and the nature SCRA 728 (1999)
of the business venture to be undertaken by
the partnership is in line with the business Art. 1786, ¶¶ 1 and 2 applies: liable for
authorized by the charter or AoI. fruits from the time property should have
If it is a foreign corporation, it must obtain a been delivered without need of demand; also
license to transact business in the country in include obligation to preserve the promised
accordance with the Corporation Code of the property with the diligence of a good father
Philippines. of a family pending delivery.
NOTE: How tax law treats the matter: Industry – may concur with any or both of the
first two or in the absence of any one or
Notion of partnership no matter how created or both of them; manual and/or
organized: a pool of insurance companies was intellectual in consideration of share in
considered a partnership under applicable tax the profits; hence, as generally,
law. Afisco v. CA, G.R. No. 112675, January partners are not entitled to charge each
25, 1999 other. Marsh’s Appeal, 69 Pa. St. 30
Without prejudice to the formation of a joint
venture. J.M. Tuazon v. Bolanos, 95 Phil. 106 “Every partner is bound to work to the extent
(1954); Aurbach v. Sanitary Wares of his ability for the benefit of the whole,
Manufacturing, 180 SCRA 130 (1989) without regard to the services of his co-
partners, and without comparison of value;
WHAT MAY BE CONTRIBUTED for services to the firm cannot, from their
very nature, be estimated and equalized by
Must be in equal shares unless otherwise compensation of differences.” Beatty v.
stipulated (Art. 1790). Wray, 7 Harris 519
Money – failure to contribute promised money
makes the promissory-partner liable for BUT: a partner who has agreed to render
the amount promised, and also for special service to the partnership, for the
interest due and damages arising from performance of which he is qualified, and
the time the former should have which is one of the inducements for the other
complied with his or her undertaking members to enter the partnership, was found
(Art. 1786, ¶ 1) (upon perfection of liable civilly to account for the value of such
contract, unless contrary stipulation) service upon a finding that he wrongfully
If there is fraud or misrepresentation, refused to perform such service.
action for rescission may be filed and the
party entitled to rescind, without BUT THEN AGAIN, specific performance not
prejudice to any other right, has the available due to constitutional prohibition vs.
right to: involuntary servitude
• lien on, or right of retention over, the
A limited partner is not allowed to contribute
surplus of partnership property after
services, only “cash or other property” (Art.
satisfying partnership liabilities to third
1845); otherwise, he is considered an
persons (for any sum paid by the injured
“industrial and general partner” and thus, not
partner for the purchase of an interest in
exempted from personal liability.
the partnership and for any capital or
advances contributed by the latter)
WHEN IMMOVABLES OR REAL RIGHTS Inventory
CONTRIBUTED
(Source: Bar Review Notes for Partnership
GENERAL RULE: Failure to comply with the Law by Atty. Villareal)
requirement of appearance in public
instrument and SEC Registration will not Atty. Villareal: The safer view is De Leon’s due
affect the liability of the partnership and the to his simplified view of statute.
members thereof to third persons. (Art. NOTE:
1772, ¶ 2) Partnerships void under Art.1773, in relation
Art. 1771 may still be considered either de
EXCEPTION: When IMMOVABLE PROPERTY/ facto or estoppel partnerships vis-à-vis third
REAL RIGHTS are contributed, persons; may even be treated as an ordinary
contract from which rights and obligations
*public instrument + inventory* may validly arise, although not exactly a
made and signed by the parties and attached partnership under the Civil Code. Torres v.
to the public instrument (Arts. 1771 and CA, 320 SCRA 428 (1999)
1773) is required for the benefit of third
persons. Failure to prepare an inventory of the immovable
property contributed, in spite of article 1773
declaring the partnership void would not render
the partnership void when:
NO THIRD PARTY INVOLVED (since Art. 1773
was intended for the protection of 3rd
parties;
Partners have MADE A CLAIM ON THE
PARTNERSHIP AGREEMENT.
EFFECT OF ABSENCE OF REQUIREMENTS

UNDER ARTICLES 1771 AND 1773
OTHER CLASSIFICATIONS OF PARTNERSHIP
Condition of
Partnership As to legality of existence
where Real Bautista, E. De Leon
Property is DE JURE PARTNERSHIP—one which has
Contributed complied with all the legal requirements for its
establishment
No public DE FACTO—one which has failed to comply with
Instrument, No VOID VOID all the legal requirements for its establishment
Inventory
As to purpose
With Public
Instrument, No VOID VOID COMMERCIAL OR TRADING
Inventory PARTNERSHIP—one formed for the
transaction of business
VALID PROFESSIONAL OR NON TRADING
But either party PARTNERSHIP—one formed for the exercise
may compel of a profession
execution of
public KINDS OF PARTNERS
instrument so it
No Public may be CAPITALIST—contributes money or property
Instrument, With registered in the VOID INDUSTRIAL—contributes only industry or
Inventory registry of personal service
property; GENERAL—liability to 3rd persons extends to
nonetheless, separate property
partnership LIMITED—liability to 3rd persons limited to
agreement may capital contribution
be enforced (cf. MANAGING—manages the affairs/business of
Arts. 1356 to the partnership
1358) LIQUIDATING—takes charge of the winding up
of partnership affairs upon dissolution
With Public VALID VALID
Instrument, With
PARTNERS BY ESTOPPEL—not really a partner Remedy of the other partner is not rescission but
but liable as a partner for the protection of specific performance with damages from
innocent 3rd persons defaulting partner (Art. 1788)
CONTINUING PARTNER—continues the
business of a partnership after dissolution by Obligations with respect to contribution of
reason of the admission of a new partner, money and money converted to personal
retirement, death or expulsion of one of the use:
partners 1. To contribute on the date fixed the amount
SURVIVING PARTNER—after a partnership has he has undertaken to contribute to the
been dissolved by death of any partner partnership
SUBPARTNER—not a member of the partnership 2. To reimburse any amount he may have taken
who contracts with a partner with reference to from the partnership coffers and converted to
the latter's share in the partnership his own use
OSTENSIBLE—takes active part and known to 3. To pay for the agreed or legal interest, if he
the public as partner in the business fails to pay his contribution on time or in case
SECRET—takes active part in the business but is he takes any amount from the common fund
not known to be a partner by outside parties and converts it to his own use
SILENT—does not take any active part in the 4. To indemnify the partnership for the
business although he may be known to be a damages caused to it by delay in the
partner contribution or conversion of any sum for his
DORMANT—does not take active part in the personal benefits
business and is not known or held out as a (See Art. 1788)
partner
FIDUCIARY DUTY
C. RIGHTS AND OBLIGATIONS OF PARTNERS
AMONG THEMSELVES A partnership is a fiduciary relation—one entered
into and to be maintained on the basis of trust
1) OBLIGATIONS OF THE PARTNERS AMONG and confidence. With that, a partner must
THEMSELVES observe the utmost good faith, fairness, and
integrity in his dealings with the others:
PROMISED CONTRIBUTION
He cannot directly or indirectly use partnership
Obligations with respect to contribution of assets for his own benefit;
property:
1. to contribute at the beginning of the He cannot carry on a business of the partnership
partnership or at the stipulated time the for his private advantage;
money, property or industry which he may
have promised to contribute (Art. 1786) He cannot, in conducting the business of the
To answer for eviction in case the partnership partnership, take any profit clandestinely;
is deprived of the determinate property
contributed (Art. 1786) He cannot obtain for himself that he should have
2. To answer to the partnership for the fruits of obtained for the partnership (e.g. business
the property the contribution of which he opportunity)
delayed, from the date they should have
been contributed up to the time of actual He cannot carry on another business in
delivery (Art. 1786) competition with the partnership;
3. To preserve said property with the diligence
of a good father of a family pending delivery He cannot avail himself of knowledge or
to partnership (Art. 1163) information which may be properly regarded as
4. To indemnify partnership for any damage the property of the partnership;
caused to it by the retention of the same or
by the delay in its contribution (Arts. 1788,
1170) PROHIBITION AGAINST ENGAGING IN
COMPETITIVE BUSINESS
Effect of failure to contribute property
promised: INDUSTRIAL PARTNER CAPITALIST
Partners becomes ipso jure a debtor of the PARTNER
partnership even in the absence of any demand - cannot engage in - cannot engage in
(See Art. 1169[1]) business (w/n same line business (with same
of business with the kind of business
partnership) unless with the
partnership expressly partnership) for his Requisites:
permits him to do so. own account, unless 1. There exist at least 2 debts, one where the
(Art. 1789) there is a collecting partner is creditor and the other,
stipulation to the where the partnership is the creditor
contrary. 2. Both debts are demandable
( Art. 1808)
The partner who collects is authorized to manage
CONSEQUENCES IF AN INDUSTRIAL and actually manages the partnership
PARTNER ENGAGES IN ANY BUSINESS:
(Art. 1789) Obligation of partner who receives share of
he can be excluded from the partnership; or partnership credit
the capitalist partners can avail of the benefit Obliged to bring to the partnership capital what
he obtained from the business, or he has received even though he may have given
the capitalist partners have the right to file receipt for his share only (Art. 1793)
an action for damages against the industrial
partner, in either case. Requisites:
1. A partner has received in whole or in part, his
CONSEQUENCES IF THE CAPITALIST share of the partnership credit
PARTNER ENGAGES IN A BUSINESS (which 2. The other partners have not collected their
competes with the business of the partnership): shares
1. he may be required to bring to the common 3. The partnership debtor has become insolvent
fund the profits he derived from the other
business; (Art. 1808)
2. he shall personally bear the losses; (Art.
1808)
3. he may be ousted form the partnership,
especially if there was a warning.
Obligations with respect to contribution to

partnership capital:
1. Partners must contribute equal shares to the
capital of the partnership unless there is
stipulation to contrary (Art. 1790)
2. Partners (capitalist) must contribute
additional capital in case of imminent loss to
the business of the partnership and there is
no stipulation otherwise; refusal to do so shall
create an obligation on his part to sell his
interest to the other partners (Art. 1790)
Requisites:
1. There is an imminent loss of the business of
the partnership
2. The majority of the capitalist partners are of
the opinion that an additional contribution to
the common fund would save the business
3. The capitalist partner refuses deliberately to
contribute (not due to financial inability)
4. There is no agreement to the contrary
Obligation of managing partners who

collects debt from person who also owed
the partnership (Art. 1792)
1. Apply sum collected to 2 credits in proportion
to their amounts
2. If he received it for the account of
partnership, the whole sum shall be applied
to partnership credit
TO MANAGEMENT
BEARING THE RISK OF LOSS OF THINGS Partner is Power of Vote of
CONTRIBUTED (Art. 1795) appointed managing partners
manager in the partner is representing
Specific and determinate things Risk is borne articles of irrevocable controlling
which are not fungible where by partner partnership without interest
only the use is contributed just/lawful necessary to
Specific and determinate things Risk is borne cause; revoke
the ownership of which is by Revocable power
transferred to the partnership partnership only when in
Fungible things (consumable) Risk is borne bad faith
by Partner is Power is
partnership appointed revocable any
Things contributed to be sold Risk is borne manager after time for any
by constitution of cause
partnership partnership
Things brought and appraised in Risk is borne 2 or more Each may In case of
the inventory by persons execute all opposition,
partnership entrusted with acts of decision of
Specific and determinate things Risk is borne management of administratio majority
which are not fungible where by partner partnership n shall prevail;
only the use is contributed without In case of tie,
specification of decision of
RULES FOR DISTRIBUTION OF PROFITS AND duties/stipulation partners
LOSSES that each shall owning
PROFITS LOSSES not act w/o the controlling
With According to According to other's consent interest shall
agreem agreement agreement prevail
ent Stipulated that Concurrence Absence or
Without Share of capitalist If sharing of none of the of all disability of
agreeme partner is in profits is managing necessary for any one
nt proportion to his stipulated - partners shall act the validity of cannot be
capital apply to sharing w/o the consent acts alleged
contribution of losses of others unless there
Share of industrial If no profit is imminent
partner is not sharing danger of
fixed - as may be stipulated - grave or
just and equitable losses shall be irreparable
under the borne according injury to
circumstances to capital partnership
contribution Manner of All partners If refusal of
Purely industrial management not are agents of partner is
partner not agreed upon the manifestly
liable for losses partnership prejudicial to
Unanimous interest of
A stipulation which excludes one or more consent partnership,
partners from any share in the profits and losses required for court's
is void. alteration of intervention
immovable may be
NOTE: Stipulation exempting a partner from property sought
losses should be allowed. If a person can make a
gift to another, there is no sound reason why a Other rights and obligations of partners:
person cannot also agree to bear all the losses. 1. Right to associate another person with him in
Of course, as far as THIRD PERSONS are his share without consent of other partners
concerned, any such stipulation may be properly (subpartnership)
declared void. (De Leon, pp. 124-125, citing 2. Right to inspect and copy partnership books
Espiritu and Sibal) at any reasonable hour
3. Right to a formal account as to partnership
RIGHTS AND OBLIGATIONS WITH RESPECT affairs (even during existence of partnership):
4. If he is wrongfully excluded from partnership Partners and the partnership are solidary
business or possession of its property by his liable to 3rd persons for the partner's
copartners tort or breach of trust
5. If right exists under the terms of any Liability of incoming partner is limited to:
agreement His share in the partnership
As provided by art. 1807 property for existing
Whenever other circumstances render it just and obligations
reasonable His separate property for
Duty to render on demand true and full subsequent obligations
information affecting partnership to any partner Creditors of partnership preferred in
or legal representative of any deceased partner partnership property & may attach
or of any partner under legal disability partner's share in partnership assets
Duty to account to the partnership as fiduciary Every partner is an agent of the
partnership
2) PROPERTY RIGHTS OF A PARTNER
His rights in specific partnership POWER OF PARTNER AS AGENT OF
property PARTNERSHIP
His interest in the partnership
His right to participate in the Acts for carrying on in Every partner is an
management the usual way the agent and may
(Art. 1810) business of the execute acts with
partnership binding effect even if
Nature of partner's right in specific he has no authority
partnership property—a partner has an equal Except: when 3rd
right to possession which is not assignable and person has
such right is limited to the share of what remains knowledge of lack of
after partnership debts have been paid authority
Act w/c is not Does not bind
Nature of partner's right in the partnership apparently for the partnership unless
—a share in the profits and surplus carrying of business in authorized by other
the usual way partners
3. OBLIGATION OF PARTNERS WITH REGARD Acts of strict dominion
TO THIRD PERSONS or ownership:
Every partnership shall operate under a firm Assign partnership
name. Persons who include their names in property in trust
the partnership name even if they are not for creditors
members shall be liable as a partner Dispose of good-
All partners shall be liable for contractual will of business
obligations of the partnership with their Do an act w/c
property, after all partnership assets have would make it
been exhausted: impossible to carry
Pro rata on ordinary
Subsidiary business of
Admission or representation made by any partnership
partner concerning partnership affairs Confess a
within scope of his authority is evidence judgment
against the partnership Enter into
Notice to partner of any matter relating to compromise
partnership affairs operates as notice to concerning a
partnership, except in case of fraud: partnership claim
Knowledge, of partner acting in or liability
the particular matter, acquired Submit partnership
while a partner claim or liability to
Knowledge of the partner acting arbitration
in the particular matter then Renounce claim of
present to his mind partnership
Knowledge of any other partner Acts in contravention of Partnership not liable
who reasonably could and a restriction on to 3rd persons having
should have communicated it authority actual or
to the acting partner presumptive
knowledge of the
restrictions Ask for annulment of contract of assignment if he
was induced to join through any of the vices of
EFFECTS OF CONVEYANCE OF REAL consent
PROPERTY BELONGING TO PARTNERSHIP Demand an accounting (only in case of
dissolution)
Title in partnership name, Conveyance passes
Conveyance in title but 4) RESPONSIBILITY OF PARTNERSHIP TO
partnership name partnership can PARTNERS
recover if: To refund the amounts disbursed by partner in
Conveyance was behalf of the partnership + corresponding
not in the usual interest from the time the expenses are made
way of business, or (loans and advances made by a partner to the
Buyer had partnership aside from capital contribution)
knowledge of lack To answer for obligations partner may have
of authority contracted in good faith in the interest of the
Title in partnership name, Conveyance does partnership business
Conveyance in partner's not pass title but To answer for risks in consequence of its
name only equitable management
interest, unless:
Conveyance was E. DISSOLUTION AND WINDING UP
not in the usual
way of business, or DISSOLUTION—change in the relation of the
2. Buyer had partners caused by any partner ceasing to be
knowledge of lack associated in the carrying on of the business;
of authority partnership is not terminated but continues until
Title in name of 1/ more Conveyance passes the winding up of partnership affairs is
partners, Conveyance in title but completed
name if partner/partners partnership can
in whose name title recover if: WINDING UP—process of settling the business
stands Conveyance was or partnership affairs after dissolution
not in the usual
way of business, or TERMINATION—that point when all partnership
Buyer had affairs are completely wound up and finally
knowledge of lack settled. It signifies the end of the partnership
of authority life.
Title in name of 1/more/all Conveyance will
partners or 3rd person in only pass equitable CAUSES OF DISSOLUTION:
trust for partnership, interest 1) Without violation of the agreement between
Conveyance executed in the partners
partnership name if in • By termination of the definite term/
name of partners particular undertaking specified in the
Title in name of all Conveyance will agreement
partners, Conveyance in pass title • By the express will of any partner, who
name of all partners must act in good faith, when no definite
term or particular undertaking is specified
ASSIGNMENT OF INTEREST IN PARTNERSHIP • By the express will of all the partners who
Assignment is subject to three (3) have not assigned their interest/ charged
conditions: them for their separate debts, either
made in good faith before or after the termination of any
for fair consideration specified term or particular undertaking
after a fair and complete disclosure of all • By the bona fide expulsion of any partner
important information as to its value from the business in accordance with
power conferred by the agreement
RIGHTS OF AN ASSIGNEE: B) In contravention of the agreement between
Get whatever assignor-partner would have the partners, where the circumstances do not
obtained permit a dissolution under any other provision of
Avail usual remedies in case of fraud in the this article, by the express will of any partner at
management any time
C) By any event which makes it unlawful for If cause is ACT of partner, acting
business to be carried on/for the members to partner must have knowledge of
carry it on for the partnership such dissolution
Loss of specific thing promised by partner before If cause is DEATH or INSOLVENCY,
its delivery acting partner must have
knowledge/ notice
D) Death of any partner
With respect to persons not partners (Art.
E) Insolvency of a partner/partnership 1834)—
Partner continues to bind partnership even after
F) Civil interdiction of any partner dissolution in ff. cases:
Transactions in connection to winding up
G) Decree of court under art. 1831 partnership affairs/completing transactions
unfinished
GROUNDS FOR DISSOLUTION BY DECREE OF Transactions which would bind partnership if not
COURT (Art. 1831) dissolved, when the other party/obligee:
• Partner declared insane in any judicial Situation 1 -
proceeding or shown to be of unsound Had extended credit to partnership prior to
mind dissolution &
• Incapacity of partner to perform his part Had no knowledge/notice of dissolution, or
of the partnership contract Situation 2 -
• Partner guilty of conduct prejudicial to i. Did not extend credit to partnership
business of partnership Had known partnership prior to dissolution
Had no knowledge/notice of dissolution/fact of
• Willful or persistent breach of partnership
dissolution not advertised in a newspaper of
agreement or conduct which makes it
general circulation in the place where
reasonably impracticable to carry on
partnership is regularly carried on
partnership with him
Partner cannot bind the partnership anymore
• Business can only be carried on at a loss
after dissolution:
• Other circumstances which render Where dissolution is due to unlawfulness to carry
dissolution equitable on with business (except: winding up of
• Upon application by purchaser of partnership affairs)
partner's interest: Where partner has become insolvent
o After termination of specified
term/particular undertaking Where partner unauthorized to wind up
o Anytime if partnership at will partnership affairs, except by transaction with
when interest was one who:
assigned/charging order issued Situation 1 -
i. Had extended credit to partnership prior to
1) EFFECTS OF DISSOLUTION dissolution &
ii. Had no knowledge/notice of dissolution, or
AUTHORITY OF PARTNER TO Situation 2 -
BIND PARTNERSHIP Did not extend credit to partnership prior to
dissolution
GENERAL RULE: Authority of partners to bind Had known partnership prior to dissolution
partnership is terminated Had no knowledge/notice of dissolution/fact of
dissolution not advertised in a newspaper of
EXCEPTIONS general circulation in the place where
1. To wind up partnership affairs partnership is regularly carried on
2. Complete transactions not finished
2) DISCHARGE OF LIABILITY
Qualifications: Dissolution does not discharge existing liability of
With respect to partners— partner, except by agreement between:
Authority of partners to bind partnership by new Partner and himself
contract is immediately terminated when person/partnership continuing the business
dissolution is not due to ACT, DEATH or partnership creditors
INSOLVENCY (ADI) of a partner (art 1833);
If due to ADI, partners are liable as if partnership Rights of partner where dissolution not in
not dissolved, when the ff. concur: contravention of agreement:
Apply partnership property to discharge
liabilities of partnership
Apply surplus, if any to pay in cash the net retiring/deceased partner sold his interest
amount owed to partners w/o final settlement with creditors
Rights if retiring/estate of deceased
Rights of partner where dissolution in partner:
contravention of agreement: To have the value of his interest
Partner who did not cause dissolution wrongfully: ascertained as of the date of
Apply partnership property to discharge liabilities dissolution
of partnership To receive as ordinary creditor the
Apply surplus, if any to pay in cash the net value of his share in the dissolved
amount owed to partners partnership with interest or profits
Indemnity for damages caused by partner guilty attributable to use of his right, at his
of wrongful dissolution option
Continue business in same name during agreed
term Persons Authorized to Wind Up
Posses partnership property if business is Partners designated by the agreement
continued In absence of agreement, all partners who have
not wrongfully dissolved the partnership
Partner who wrongly caused dissolution: Legal representative of last surviving partner
If business not continued by others - apply
partnership property to discharge liabilities of A partner’s share cannot be returned without
partnership & receive in cash his share of surplus first dissolving and liquidating the business
less damages caused by his wrongful dissolution for the partnership’s outside creditors have
If business continued by others - have the value preference over the enterprise’s assets. The
of his interest at time of dissolution ascertained firm’s property cannot be diminished to their
and paid in cash/secured by bond & be released prejudice. Magdusa v. Albaran, 115 Phil.
from all existing/future partnership liabilities 511 (1962)
Rights of injured partner where partnership Due to its separate juridical personality from
contract is rescinded on ground of the individual partners, it is thus the
fraud/misrepresentation by 1 party: partnership – having been the recipient of the
1. Right to lien on surplus of partnership capital contributions – which must refund the
property after satisfying partnership liabilities equity of retiring partners. Such duty does
2. Right to subrogation in place of creditors not pertain to partners who managed the
after payment of partnership liabilities business. The amount to be refunded, supra,
3. Right of indemnification by guilty partner consistent with the partnership being a
against all partnership debts & liabilities separate and distinct entity, must necessarily
be limited to what to the firm’s total
resources. It can only pay out what it has for
3) SETTLEMENT OF ACCOUNTS BETWEEN its total assets. But this is subject to the
PARTNERS priority enjoyed by outside creditors. “After
all the (said) creditors have been paid,
Assets of the partnership:
whatever is left of the partnership assets
Partnership property (including goodwill)
becomes available for the payment of
Contributions of the partners
partners’ shares. Villareal v. Ramirez, 406
Order of Application of Assets:
SCRA 145
Partnership creditors
Partners as creditors
F. LIMITED PARTNERSHIP
Partners as investors—return of capital
contribution
Characteristics:
Partners as investors—share of profits if
1. Formed by compliance with statutory
any
requirements
2. One or more general partners control the
4) WHEN BUSINESS OF DISSOLVED
business
PARTNERSHIP IS CONTINUED
3. One or more general partners contribute to
Creditors of old partnership are also
the capital and share in the profits but do not
creditors of the new partnership which
participate in the management of the
continues the business of the old one w/o
business and are not personally liable for
liquidation of the partnership affairs
partnership obligations beyond their capital
Creditors have an equitable lien on the
contributions
consideration paid to the retiring
/deceased partner by the purchaser when
4. May ask for the return of their capital Right of remaining gen partners (if given) or
contributions under conditions prescribed by continue business in case of death, insanity,
law retirement, civil interdiction, insolvency
5. Partnership debts are paid out of common Right of limited partner (if given) to
fund and the individual properties of general demand/receive property/cash in return for
partners contribution
Certificate must be filed with the SEC

DIFFERENCES BETWEEN GENERAL AND
LIMITED PARTNER/PARTNERSHIP To validly form a limited partnership, all that is
required is SUBSTANTIAL COMPLIANCE IN GOOD
GENERAL LIMITED FAITH with all the requirements under Art. 1844
Personally liable for Liability extends (i.e. signing and swearing to a certificate, affixing
partnership obligations only to his capital the word “Limited” to the partnership name,
contributions etc.). If no substantial compliance, then the firm
When manner of mgt. No participation in becomes a general partnership to third persons
not agreed upon, all management (but as amongst the partners, still limited).
general partners have
an equal right in the WHEN GENERAL PARTNER NEEDS
mgt. of the business CONSENT/RATIFICATION OF ALL LIMITED
Contribute cash, Contribute cash or PARTNERS:
property or industry property only, not 1. Do any act in contravention of the certificate
industry 2. Do any act which would make it impossible to
Proper party to Not proper party to carry on the ordinary business of the
proceedings by/against proceedings partnership
partnership by/against 3. Confess judgment against partnership
partnership 4. Possess partnership property/assign rights in
Interest not assignable Interest is freely specific partnership property other than for
w/o consent of other assignable partnership purposes
partners 5. Admit person as general partner
Name may appear in Name must appear 6. Admit person as limited partner - unless
firm name in firm name authorized in certificate
Prohibition against No prohibition 7. Continue business with partnership property
engaging in business against engaging in on death, retirement, civil interdiction,
business insanity or insolvency of gen partner unless
Retirement, death, Does not have authorized in certificate
insolvency, insanity of same effect; rights
general partner transferred to legal SPECIFIC RIGHTS OF LIMITED PARTNERS:
dissolves partnership representative 1. Right to have partnership books kept at
principal place of business
2. Right to inspect/copy books at reasonable
REQUIREMENTS FOR FORMATION OF
hour
LIMITED PARTNERSHIP:
3. Right to have on demand true and full info of
Certificate of articles of the limited
all things affecting partnership
partnership must state the ff. matters:
4. Right to have formal account of partnership
1. Name of partnership + word "ltd."
affairs whenever circumstances render it just
2. Character of business
and reasonable
3. Location of principal place of business
5. Right to ask for dissolution and winding up by
4. Name/place of residence of members
decree of court
5. Term for partnership is to exist
6. Right to receive share of profits/other
6. Amount of cash/value of property contributed
compensation by way of income
7. Additional contributions
7. Right to receive return of contributions
8. Time agreed upon to return contribution of
provided the partnership assets are in excess
limited partner
of all its liabilities
9. Sharing of profits/other compensation
Right of limited partner (if given) to substitute an
REQUISITES FOR RETURN OF
assignee
CONTRIBUTION OF LIMITED PARTNER:
Right to admit additional partners
1. All liabilities of partnership have been paid/if
Right of limited partners (if given) to priority for
not yet paid, at least sufficient to cover them
contributions
2. Consent of all members has been obtained
3. Certificate is cancelled/amended as to set partnership unless the business is continued
forth withdrawal /reduction of contribution by the surviving general partners under a
LIABILITIES OF A LIMITED PARTNER right stated in the certificate or with their
common (i.e. all) consent (Art. 1860). Still,
To the partnership even if allowed under the certificate or
For the difference between his contribution consented to by all, there must be an
as actually made and that stated in the amendment further to Arts. 1864 and 1865
certificate as having been made, and (cf. Bautista). Otherwise, limited partners
For any unpaid contribution which he agreed will not be able to avail of the protection of
in the certificate to make in the future time the law as regards liability. The partnership
will be considered general Lowe v. Arizona
As a trustee for the partnership Power & Light Co., 427 P. d. 366
For the specific property stated in the
certificate as contributed by him but which A limited partner shall not become liable as a
he had not contributed; general partner, unless in addition to the
For the specific property of the partnership exercise of his rights and powers as a limited
which had been wrongfully returned to him; one, he takes part in the control (and
and management) of the business (Art.
Money or other property wrongfully paid or 1848; Holzman v. Escamilla, 195 P. d.
conveyed to him on account of his 833). Actually, a person may be general and
contribution. limited at the same time provided this is
stated in the certificate. He shall have all the
DISSOLUTION OF LIMITED PARTNERSHIP powers, rights, and restrictions of a general
(Priority in Distribution of Assets): partner; but with respect to his capital
Those due to creditors, including limited partners contribution, his right against the other
Those due to limited partners in respect of their members of the firm would be that of a
share in profits/compensation limited partner (Art. 1853).
Those due to limited partners of return of capital
contributed A limited partner may also loan money to
Those due to general partner other than capital and transact other business with the firm.
& profits BUT, he cannot: (1) receive or hold as
Those due to general partner in respect to profits collateral any partnership property; or (2)
Those due to general partner for return of capital receive from a general partner or from
contributed the firm any payment, conveyance,
release if at that time assets of the firm
AMENDMENT OF CERTIFICATE OF are not sufficient to discharge liabilities to
PARTNERSHIP outside creditors; Art. 1854: any
1. In case any of the ten enumerated changes violation would be fraud on such
and circumstances in Art. 1864, par. 2 are creditors.
present.
2. It must be signed and sworn to by all the The remedy of a general partner who suffers
members including the new members if some from or faces interference from his limited
are added; in case of substitution, the partners is dissolution. Weil v. Diversified
assigning limited partner must also sign. Properties, 319 F. Supp
3. The cancellation or amendment must be
recorded in the SEC.
Any person who suffers loss by reliance on

false statement in certificate may hold liable
for damages any party to the certificate who
knew the statement to be false at the time
the latter signed the certificate or came to
know such falsity subsequently but within
sufficient time before reliance to enable such
party to cancel or amend the certificate or
file the proper petition for such purpose
(under Art. 1865). (Art. 1847; Walraven
v. Ramsay, 55 N.W.d 853).
A general partner’s DIIC (death, insolvency,

insanity, or civil interdiction) dissolves the
V. AGENCY its representative character & its derivative
authority.
=========================
======== Purpose: Extend the personality of the principal
TOPICS UNDER THE SYLLABUS through the facility of the agent
A. DEFINITION OF AGENCY
B. POWERS (ARTS. 1877-1878 Capacity of the Parties:
C. EXPRESS V. IMPLIED AGENCY
Principal
D. AGENCY BY ESTOPPEL He may be a natural or a juridical person
E. GENERAL VS. SPECIAL AGENCY He must be capacitated. General RULE: If a
F. AGENCY COUCHED IN GENERAL person is capacitated to act for himself or his
TERMS own right, he can act through an agent.
G. AGENCY REQUIRING SPECIAL The agent is not liable where he was ignorant of
POWER OF ATTORNEY the principal’s incapacity
H. AGENCY BY OPERATION OF LAW
I. RIGHTS AND OBLIGATIONS OF Agent
PRINCIPAL Insofar as third persons are concerned, it is
J. MODES OF EXTINGUISHMENT enough that the principal is capacitated.
========================= Insofar as his obligations to his principal are
======== concerned, the agent must be able to bind
himself.
A. DEFINITION OF AGENCY As an agent, some mental capacity is necessary,
therefore, those who are absolutely incapacitated
CONTRACT OF AGENCY is a contract whereby a (ex. Insane persons) cannot be agents.
person binds himself to render some service or to
do something in representation or on behalf of ESSENTIAL ELEMENTS
another, with the consent or authority of the Consent of the parties to establish the
latter. relationship;
Object of the contract is the execution of a
Characteristics: juridical act in relation to third persons;
Consensual: perfected by mere consent; Agent acts as a representative and not for
Nominate: it has its own name; himself; and
Preparatory: entered into as means to enter into Agent acts within the scope of his authority.
other contracts
Principal: does not depend on another contract An illegal termination of agency does not justify
for its existence and validity; reinstatement of the agent as such. The agency
Unilateral/Bilaterial: cannot be compelled by the courts to be
Unilateral: if contract is gratuitous or it creates reinstated because such relationship can only be
obligations for only one party (i.e. the agent) given effect with the consent of the principal.
Bilateral: if contract is for compensation or gives Orient Air Services v. CA, G.R. No. 76931,
rise to reciprocal rights and obligations May 29, 1991
Nature: Since it is a contract, there must be a Acts That Cannot Be Done By

meeting of the minds as to consent, object, and Agent:
cause. Personal Acts – ex. making of a will
Criminal or Illegal Acts
Exception to contractual nature:
When the agency is created by operation of Nature of Relationship between Principal
law and Agent:
Ex: Agency by Estoppel Fiduciary  based on trust & confidence
Agent is estopped from asserting interest
Basis: Representation adverse to his principal’s
The acts of the agent on behalf of the principal Agent must not act as an adverse party
within the scope of his authority produce the Agent must not act for an adverse party
same legal and binding effects as if they were Agent must not use or disclose secret
personally done by the principal. information
Agent must give notice of material facts
Hence, the distinguishing features of agency are
GENERAL RULE: Knowledge of the agent is
imputed to the principal even though the
agent never communicated it to his principal The special power of attorney can be included in
the general power when it specifies therein the
EXCEPTIONS: act or transaction for which the special power is
Where the interests of the agent are adverse to required.
those of the principal;
Agent Acts in Bad Faith or Where the person Powers Not Included in the Power to
claiming the benefit of the rule colludes with the Mortgage
agent to defraud the principal. To sell
To execute a second mortgage
B. POWERS (ARTS. 1877-1878) To mortgage for the agent’s or any 3rd
persons’ benefit, UNLESS clearly
indicated
Special powers of attorney are necessary in
the following cases: (PECWAM-LLB-
Powers Not Included in the Power to
BOCARO)
Compromise
- Submission to Arbitration
To make such payments as are not usually Rationale:
considered as acts of administration; A principal may authorize his agent to
To effect novations which put an end to compromise because of absolute confidence
obligations already in existence at the time in the latter’s judgment and discretion to
the agency was constituted; protect the former’s rights and obtain for him
To compromise, to submit questions to the best bargain in the transaction.
arbitration, to renounce the right to appeal If the transaction would be left in the hands
from a judgment, to waive objections to the of an arbitrator, said arbitrator may not enjoy
venue of an action or to abandon a the trust of the principal.
prescription already acquired;
To waive any obligation gratuitously; The agent must act within the scope of his
To enter into any contract by which the authority. He may do such acts as may be
ownership of an immovable is transmitted or conducive to the accomplishment of the purpose
acquired either gratuitously or for a valuable of the agency.
consideration;
To make gifts, except customary ones for charity Requisites for Principal to be Bound by Act
or those made to employees in the business of Agent:
managed by the agent; The agent must act in behalf of the principal
To loan or borrow money, unless the latter act be The agent must act within the scope of his
urgent and indispensable for the preservation authority
of the things which are under administration;
To lease any real property to another person for When a principal NOT BOUND by act of
more than one year; agent:
To bind the principal to render some service The latter acts without or beyond the scope
without compensation; of his authority in the former’s name
To bind the principal in a contract of partnership; Exceptions:
To obligate the principal as a guarantor or Where the acts of the principal have
surety; contributed to deceive a 3rd person in
To create or convey real rights over immovable good faith;
property; Where the limitations upon the power
To accept or repudiate an inheritance; created by the principal could not have
To ratify or recognize obligations contracted been known by the 3rd person;
before the agency; Where the principal has placed in the
Any other act of strict dominion. hands of the agent instruments signed by
him in blank;
A special power to sell excludes the power to Where the principal has ratified the acts
mortgage; and a special power to mortgage of the agent
does not include the power to sell.
The latter acts within the scope of his
Special Power of Attorney - an instrument in authority but in his own name, EXCEPT when
writing by which one person, as principal, the transaction involves things belonging to
appoints another as his agent and confers upon the principal
him the authority to perform certain specified
acts or kinds of acts on behalf of the principal. NOTE: The agent is not deemed to have
exceeded the limits of his authority should he
perform the agency in a manner more principal. ward but must act for
advantageous to the principal than that indicated the benefit of the latter
by him, since he is authorized to do such acts as
may be conducive to the accomplishment of the
purpose of the agency. Agent can make the Guardian has no power
principal personally to impose personal
The powers of an agent are particularly broad liable. liability on the ward.
in the case of one acting as a general agent
or manager; such a position presupposes a Distinction between Agency & Lease of
degree of confidence reposed and investiture Property
with liberal powers for the exercise of
judgment and discretion in transactions and AGENCY LEASE OF PROPERTY
concerns which are incidental or appurtenant
to the business entrusted to his care and Agent is controlled by Lessee is not controlled
management. In the absence of an the principal. by the lessor.
agreement to the contrary, a managing agent
may enter into contracts that he deems
reasonably necessary or requisite for the Agency may involve Lease of property
protection of the interests of his principal things other than involves property.
entrusted to his management. Eurotech v. property.
Cuizon, G.R. No. 167552, April 23, 2007
Agent can bind the Lessee cannot bind the
Distinction between Agency & Lease of principal. lessor.
Work/Service
AGENCY LEASE OF Distinction between Agency to Sell & Sale
WORK/SERVICE
Representation Employment AGENCY TO SELL SALE
Agent exercises Lessor ordinarily Agent receives the Buyer receives the
discretionary powers performs only goods as the principal’s goods as owner
ministerial functions goods
3 persons are involved: 2 persons are involved: Agent delivers the Buyer pays the price
principal, agent and lessor and lessee proceeds of the sale
the 3rd person with
whom the agent
Agent can return the Buyer, as a general
contracts
object in case he is rule, cannot return the
unable to sell the same object sold
Relates to commercial Relates more to the to a third person
or business matters of mere
transactions manual or
Agent in dealing with Buyer can deal with the
mechanical
the thing received is thing as he pleases,
execution
bound to act according being the owner
to the instructions of
Distinction between Agency & Guardianship
his principal
AGENCY GUARDIANSHIP
Distinction between Agent & Contractor
Agent represents a A guardian represents

AGENT INDEPENDENT
capacitated person an incapacitated
CONTRACTOR
person.
Represents his Employed by the

Agent is appointed by Guardian is appointed
principal employer
the principal and can by the court and
be removed by the stands in loco parentis.
latter. Acts under the Acts according to his own
principal’s control method
and instruction
Agent is subject to the Guardian is not subject
directions of the to the directions of the
in the name and representation of the
Principal is liable for Employer not liable for principal
torts committed by torts committed by the Simple or Commission – agent acts in his
the agent within the independent contractor. own name but for the account of the
scope of his principal.
authority
Distinction between Agency and Forms of Agency
Partnership GENERAL RULE: Appointment of an agent may
AGENCY PARTNERSHIP be oral or written; no formal requirements
EXCEPTION: When the law requires a specific
form (ex. agent’s sale of real
An agent must submit A co-partner is not property or any interest therein)
to the principal’s right subject to co-partner’s
to control right to control, unless Agency is presumed to be for compensation,
there is an agreement unless there is proof to the contrary.
to that effect The agent does not have to prove that the
agency is for compensation.
The agent assumes no The partner binds not But the prima facie presumption that the
personal liability where only the firm members agency is for a compensation may be
he acts within the but himself as well contradicted by contrary evidence
scope of his authority
Broker - negotiate contracts relative to property
The agent takes his The profits belong to all in behalf of others and for a compensation/fee
agreed share of profits the partners as When Broker Entitled to Compensation:
not as owner but as an common proprietors in Whenever he brings to his principal a party
agreed measure of agreed proportions who is able and willing to take the property,
compensation for his and enter into a valid contract upon the
services terms named by the principal, although the
particulars may be arranged and the matter
C. EXPRESS VS. IMPLIED AGENCY negotiated and completed between the
principal and the purchaser directly
Express – agent has been actually authorized However, a broker is never entitled to
by the principal, either orally or in writing commission for unsuccessful efforts.
Implied – agency is implied from the acts of The broker should be paid his commission
the principal, from his silence, or lack of where he is the efficient procuring cause
action, or his failure to repudiate the in bringing the sale.
agency knowing that another person is
acting on his behalf without authority, or Efficient procuring cause: when there is a
from the acts of the agent which carry out close proximate and causal connection
the agency, between the efforts and labor of the agent
and the principal’s sale of property. Manotoc
OTHER CLASSIFICATIONS OF AGENCY Brothers v. CA, 221 SCRA 224 (1993)
As to character
Gratuitous – agent receives no compensation LAW ON DOUBLE AGENCY
for his services Disapproved by law for being against public
Onerous – agent receives compensation for policy and sound morality EXCEPT where
his services the agent acted with full knowledge and
As to extent of business of the principal consent of the principals
General – agency comprises all the business of
the principal Right of agent to compensation in case of
Special – agency comprises one or more double agency:
specific transactions With knowledge of both principals - recovery
As to authority conferred can be had from both principals
Couched in general terms – only acts of Without the knowledge of both principals -
administration the agent can recover from neither
Couched in specific terms – only the With knowledge of one principal - as to the
performance of a specific act/s principal who knew of that fact and as to the
agent, they are in pari delicto and the courts
As to nature and effects shall leave them as they were, the contract
Ostensible or Representative – agent acts between them being void as against public policy
and good morals
provided it can be proven that 3rd persons in
ACCEPTANCE BY AGENT question read the revocation
Forms of Acceptance by Agent: D. AGENCY BY ESTOPPEL

Express - when it is oral or written There is really no agency at all, but the alleged
Implied -when it can be inferred from the agent seemed to have apparent or ostensible,
acts of the agent which carry out the although not real, authority to represent another.
agency, or from his silence or inaction
according to the circumstances Distinction between Agency by Estoppel &
Between persons who are present – implied Implied Agency
acceptance if the principal delivers his power of
attorney to the agent and the latter receives it BASIS AGENCY BY IMPLIED
without any objection ESTOPPEL AGENCY
Between persons who are absent –
acceptance not deemed implied from the silence
of the agent. Existence
There is an
of actual No agency at all
actual agency
EXCEPTIONS: agency
When the principal transmits his power of
attorney to the agent who receives it without Can be invoked
any objection Reliance only by a 3rd
When the principal entrusts to him by letter or by 3rd person who in
Such reliance is
telegram a power of attorney with respect to persons good faith relied
not needed,
the business in which he is habitually on the conduct
since the agent
engaged as an agent, and he did not reply to of the principal
is a real agent
the letter or telegram in holding the
agent out as
What is meant by “present”? being authorized
Generally, “face to face”, but includes people
conversing directly through technology (ex. over An agent by
the telephone). estoppel has
none of the An agent by
Power of Attorney - Instrument in writing by rights of an implied
which one person, as principal, appoints another agent, except appointment
as his agent and confers upon him the authority where the has all the
to perform certain specified acts or kinds of acts Nature of
principal’s rights and
on behalf of the principal; primary purpose is to Authority
conduct are such liabilities of an
evidence agent’s authority to third parties within that the agent agent, i.e. has
whom the agent deals reasonably actual authority
believed that the to act on behalf
Construction of Power of Attorney: principal of the principal
GENERAL RULE: Strictly construed and strictly intended him to
pursued; held to grant only those specified act as an agent
powers
EXCEPTION: when strict construction will An agency couched in general terms comprises
destroy the very purpose of the power only acts of administration, even if the principal
should state that he withholds no power or that
Ways of Giving Notice of Agency & Its the agent may execute such acts as he may
Effect: consider appropriate, or even though the agency
By special information - the person appointed should authorize a general and unlimited
as agent is considered as such with respect to management.
the person to whom it was given.
By public advertisement - the agent is Will an authority embodied in a letter be
considered as such with regard to any person sufficient?
Yes. Jimenez v. Rabot, 38 Phil 387 (1918)
Attorney-In-Fact
How do you revoke an agency? One who is given authority by his principal to
In the same manner as it was constituted. do a particular act not of a legal character
However, constitution by Special Information The term is, in loose language, used to
may be revoked by notice in a daily newspaper,
include agents of all kinds, but in its strict Instruction agent’s authority
sense, it means an agent having a special s
authority created by a deed.
E. AGENCY COUCHED IN GENERAL TERMS
V. GENERAL VS. SPECIAL AGENCY
Agency Couched in General Terms: Covers
G SPECIAL only MERE ACTS OF ADMINISTRATION even if:
BASIS E AGENT The principal should state that he withholds no
N power
E The agent may execute such acts as he may
R consider appropriate
A The agency should authorize a general and
L unlimited management
A
G How are contracts of agency construed?
E Contracts of agency, as well as general powers of
N attorney, must be interpreted in accordance with
C the language used by the parties.
T
All acts Specific acts in The real intention of the parties is primarily
S connected with pursuance of determined from the language used and
the business or particular gathered from the whole instrument.
employment in instructions or
which he is with restrictions In case of doubt, resort must be had to the
engaged necessarily situation, surroundings and relations of the
implied from the parties. The intention of the parties must be
act to be done sustained rather than defeated.
N Involves No continuity of
continuity of service If the contract is open to 2 constructions, one of
service which would uphold the intention while the other
May bind his Can not bind his would overthrow it, the former is to be chosen.
principal by an principal in a
Extent to act within the manner beyond F. AGENCY REQUIRING SPECIAL POWER OF
Which scope of his or outside the ATTORNEY
Agent May authority specific acts
Bind the although it may which he is
Principal be contrary to authorized to Special powers of attorney are necessary in
the latter’s perform the following cases: (PECWAM-LLB-
special BOCARO)
instructions
Apparent Duty imposed To make such payments as are not usually
authority does upon the third considered as acts of administration;
not terminate party to inquire To effect novations which put an end to
Terminatio by the mere makes obligations already in existence at the time
n of revocation of his termination of the agency was constituted;
Authority authority the relationship To compromise, to submit questions to
without notice as between the arbitration, to renounce the right to appeal
to the third principal and from a judgment, to waive objections to the
party agent effective venue of an action or to abandon a
as to such third prescription already acquired;
party unless the To waive any obligation gratuitously;
agency has been To enter into any contract by which the
entrusted for the ownership of an immovable is transmitted or
purpose of acquired either gratuitously or for a valuable
contracting with consideration;
such third party To make gifts, except customary ones for charity
or those made to employees in the business
Constructi Merely advisory Strictly managed by the agent;
on of in nature construed as To loan or borrow money, unless the latter act be
Principal’s they limit the urgent and indispensable for the preservation
of the things which are under administration;
To lease any real property to another person for When a principal NOT BOUND by act of
more than one year; agent:
To bind the principal to render some service The latter acts without or beyond the scope
without compensation; of his authority in the former’s name
To bind the principal in a contract of partnership; Exceptions:
To obligate the principal as a guarantor or Where the acts of the principal have
surety; contributed to deceive a 3rd person in
To create or convey real rights over immovable good faith;
property; Where the limitations upon the power
To accept or repudiate an inheritance; created by the principal could not have
To ratify or recognize obligations contracted been known by the 3rd person;
before the agency; Where the principal has placed in the
Any other act of strict dominion. hands of the agent instruments signed by
him in blank;
A special power to sell excludes the power to Where the principal has ratified the acts
mortgage; and a special power to mortgage of the agent
does not include the power to sell.
The latter acts within the scope of his
Special Power of Attorney - an instrument in authority but in his own name, EXCEPT when
writing by which one person, as principal, the transaction involves things belonging to
appoints another as his agent and confers upon the principal
him the authority to perform certain specified
acts or kinds of acts on behalf of the principal. NOTE: The agent is not deemed to have
exceeded the limits of his authority should he
The special power of attorney can be included in perform the agency in a manner more
the general power when it specifies therein the advantageous to the principal than that indicated
act or transaction for which the special power is by him, since he is authorized to do such acts as
required. may be conducive to the accomplishment of the
purpose of the agency.
Powers Not Included in the Power to
Mortgage The powers of an agent are particularly broad
To sell in the case of one acting as a general agent
To execute a second mortgage or manager; such a position presupposes a
To mortgage for the agent’s or any 3rd degree of confidence reposed and investiture
persons’ benefit, UNLESS clearly with liberal powers for the exercise of
indicated judgment and discretion in transactions and
concerns which are incidental or appurtenant
Powers Not Included in the Power to to the business entrusted to his care and
Compromise management. In the absence of an
- Submission to Arbitration agreement to the contrary, a managing agent
Rationale: may enter into contracts that he deems
A principal may authorize his agent to reasonably necessary or requisite for the
compromise because of absolute confidence protection of the interests of his principal
in the latter’s judgment and discretion to entrusted to his management. Eurotech v.
protect the former’s rights and obtain for him Cuizon, G.R. No. 167552, April 23, 2007
the best bargain in the transaction.
If the transaction would be left in the hands G. RIGHTS AND OBLIGATIONS OF PRINCIPAL
of an arbitrator, said arbitrator may not enjoy
the trust of the principal. OBLIGATIONS OF THE PRINCIPAL
The agent must act within the scope of his Obligations of the Principal to the Agent:
authority. He may do such acts as may be (CARIP)
conducive to the accomplishment of the purpose Comply with all the obligations agent contracted
of the agency. in representation of the principal
Advance sums necessary for the execution of the
Requisites for Principal to be Bound by Act agency, when agent so requests; liable for
of Agent: reimbursement regardless of the
The agent must act in behalf of the principal undertaking’s success whenever agent had
The agent must act within the scope of his advanced & has no fault; includes interest
authority Reimburse the agent for all advances made by
him provided the agent is free from fault
Indemnify the agent for all the damages which GENERAL RULE: Principal is liable for the
the execution of the agency may have expenses incurred by the agent
caused the latter without fault or negligence EXCEPTIONS: (AFUS)
on his part If the agent acted in contravention of the
Pay the agent the compensation agreed upon or principal's instructions, unless the latter
the reasonable value of the latter’s services should wish to avail himself of the
benefits derived from the contract
Liability of 3rd persons to the Principal
In Contract – a 3rd person is liable to the When the expenses were due to the fault of
principal upon contracts entered into by his the agent
agent, as if the contract has been entered When the agent incurred them with
into by the principal. knowledge that an unfavorable result
In Tort – the 3rd person’s tort liability to the would ensue, if the principal was not
principal, insofar as the agent is involved in aware thereof
the tort, arises in 3 situations: When it was stipulated that the expenses
Where the 3rd person damages or injures would be borne by the agent, or that the
property or interest of the principal in the latter would be allowed only a certain
possession of the agent sum
Where the 3rd person colludes with the agent
to injure/defraud the principal Who can be estopped to deny agency?
Where the 3rd person induces the agent to Estoppel of Agent- one professing to act as
violate his contract with the principal to agent is estopped to deny his agency
betray the trust reposed upon him by the both as against his asserted principal and
principal. the third persons interested in the
transaction in which he is engaged
Requisites for solidary liability of principals Estoppel by the Principal
There are 2 or more principals As to agent – one knowing another is acting
The principals have all concurred in the as his agent and fails to repudiate his
appointment of the same agent acts, or accept the benefits of them, will
The agent is appointed for a common transaction be estopped to deny the agency as
or undertaking against such other
As to sub-agent – for the principal to be
NOTE: The rule in Art. 1915 applies even when estopped from denying his liability to a
the appointments were made by the principals in third person, he must have known or be
separate acts, provided that they are for the charged with knowledge of the
same transaction. The solidarity arises from the transaction and the terms of the
common interest of the principals and not from agreement between the agent and sub-
the act of constituting the agency. agent
As to third persons – one who knows that
Rule where 2 persons contract separately another is acting as his agent or
with agent and principal permitted another to appear as his agent,
to the injury of third persons who have
Two persons may contract separately with the dealt with the apparent agent as such in
agent and the principal with regard to the same good faith and in the exercise of
thing. If the two contracts are incompatible with reasonable prudence, is estopped to deny
each other, the one of prior date shall be the agency
preferred. This is subject, however, to the rules Estoppel of Third Persons – a third person,
on Double Sales under Article 1544 of the Civil having dealt with one as an agent may be
Code (i.e. for movables: first in possession, first estopped to deny the agency as against
in right; for immovables: first to register in good the principal, agent or 3rd persons in
faith, first in right; absent any inscription: first in interest
possession or party who presents oldest title Estoppel of the Government - government
acquires ownership). neither estopped by the mistake/error of
its agents; may be estopped through
Agent’s Right of Retention: affirmative acts of its officers acting
Specific (only for those goods connected with within the scope of their authority
the agency) and
Until the principal effects the reimbursement Distinction between Ratification and
and pays the indemnity Estoppel
RATIFICATION ESTOPPEL
PRINCIPAL’S LIABILITIES FOR EXPENSES
not depart from the instructions of
Rests on intention Rests on prejudice principal): (SAI)
There’s a sudden emergency
If the instructions are ambiguous
Affects the entire Affects only relevant If the departure is so insubstantial that
transaction from the parts of the transaction it does not affect the result and the
beginning principal suffers no damage thereby
Substance of Substance of estoppel Not to carry out the agency if it would

ratification is is the principal’s manifestly result in loss or damage to the
confirmation of an inducement to another principal
authorized act or to act to his prejudice Answer for damages if there being a conflict
conduct after it has between his & his principal’s interests, he
been done prefers his own
Not to loan to himself if he has been authorized
Distinction between Apparent Authority & to loan money at interest
Authority by Estoppel Render an account of his transactions and
deliver to the principal whatever he may
APPARENT AUTHORITY BY have received by virtue of the agency (If the
AUTHORITY ESTOPPEL agent fails to deliver and instead converts or
Though not actually Where the principal, by appropriates for his own use the money or
granted, principal his negligence, permits property belonging to his principal, he may
knowingly his agent to exercise be charged with ESTAFA.)
permits/holds out the powers not granted to Be responsible in certain cases for the act of
agent as possessing him, even though the the substitute appointed by him
the necessary powers principal may have no Pay interest on funds he has applied to his own
to act in a certain way notice or knowledge of use
the conduct of the
agent Distinctions between Authority and the
Principal’s Instructions
OBLIGATIONS OF THE AGENT AUTHO INSTRU
RITY CTIONS
OBLIGATIONS OF THE AGENT TO THE PRINCIPAL Sum total of the Contemplates only a
powers committed to private rule of guidance
General: (GOC) the agent by the to the agent;
Act with utmost good faith & loyalty for the principal independent and
furtherance of principal’s interests distinct in character
Obey principal’s instructions Refers to the manner
Exercise reasonable care Relates to the or mode of agent’s
subject/business with action
Specific: (FADI – CALAMARI) which the agent is
Carry out the agency empowered to deal or
Answer for damages which through his non- act
performance the principal may suffer Limitations of authority Without significance as
Finish the business already begun on the are operative as against those with
death of the principal should delay entail against those who neither knowledge nor
any danger (exception to the rule that have/charged with notice of them
death extinguishes agency) knowledge of them
Observe the diligence of a good father of a Contemplated to be Not expected to be
family in the custody and preservation of made known to third made known to those
the goods forwarded to him by the owner in persons dealing with with whom the agent
case he declines an agency, until an agent the agent deals
is appointed
Advance necessary funds if there be a When agent has a right to disobey the
stipulation to do so (except when the principal’s instructions:
principal is insolvent) When the instruction calls for the performance of
Act in accordance with the instructions of the illegal acts
principal, and in default thereof, to do all Where he is privileged to do so to protect his
that a good father of a family would do security in the subject matter of the agency
Exceptions (to the rule that the agent must
When obligation to account not applicable: authority, it shall be VOID unless the principal
If the agent acted only as a middleman with ratifies it.
the task of merely bringing together the
vendor and the vendees. DOCTRINE OF AGENCY BY NECESSITY
If the agent had informed the principal of the An agency can never be created by necessity;
gift/bonus/profit he received from the what is actually created is additional authority in
purchaser and his principal did not object an agent appointed and authorized before the
thereto. emergency arose.
Where a right of lien exists in favor of the The existence of emergency or other unusual
agent. conditions may operate to invest in an agent
authority to meet the emergency, provided:
When agent may incur personal liability (PURE)
When the agent expressly binds himself The agent’s enlarged authority is exercised
When the agent exceeds his authority for the principal’s protection
When an agent by his act prevents The agent is unable to communicate with
performance on the part of the principal principal;
When a person acts as an agent without The means adopted are reasonable under the
authority or without a principal circumstances;
A person who purports to act as agent of an The emergency really exists;
incapacitated principal
When 3rd persons can repudiate the
Appointment of Sub-agent: contract
If the principal has not prohibited the agent from Before actual ratification by the principal, or
appointing a substitute, he will be liable to before the principal has signified his willingness
3rd persons for the acts of the sub-agent to ratify the agent’s acts.
within the scope of his authority
If there is a prohibition but nevertheless the Effect of the principal receiving the
agent appoints a sub-agent, all the sub- benefits of the transaction
agent’s acts are void as to the principal. He is deemed to have ratified it. A principal may
If there is authority to appoint and sub-agent is not accept the benefits of a transaction and at
not designated by the principal, the agent the same time repudiate its burdens
will be liable for all the acts of the sub-agent
if the sub-agent is notoriously incompetent or Conditions for Ratification:
insolvent. The principal must have capacity and power to
If there is authority to appoint and sub-agent is ratify
designated by the principal, the agent is He must have had knowledge of material facts
released from any liability from the acts of He must ratify the acts in its entirety
the sub-agent. The act must be capable of ratification
If the appointment of a sub-agent is not The act must be done in behalf of the principal
authorized but not prohibited, it shall be valid To be effective, ratification need not be
if it is beneficial to the principal. But, should communicated or made known to the agent or
the principal incur damage due to such the third party. The act or conduct of the
appointment, the agent shall be primarily principal rather than his communication is the
responsible for the acts of the sub-agent. key. But before ratification, the third party is free
to revoke the unauthorized contract.
Responsibility of 2 or More Agents
Appointed Simultaneously: Effects of Ratification
GENERAL RULE: Liable jointly With respect to agent - relieves the agent
from liability to the third party for the
EXCEPTION: When solidarity has been expressly unauthorized transaction, and to his principal
stipulated, in which case, each of the agents for acting without authority; may recover
becomes solidarily liable for (1) the non- compensation
fulfillment of the agency; and for (2) the fault or With respect to principal - assumes
negligence of his fellow agent(s) responsibility for the unauthorized act, as if
the agent had acted under original authority
EXCEPTION TO THE EXCEPTION: when one of but not liable for acts outside the authority
the other agent/s acts beyond the scope of his approved by his ratification
authority – innocent agent is NOT liable With respect to 3rd persons - bound by
ratification to the same extent as if the
Effect where 3rd person aware of limits of ratified act had been authorized; cannot raise
agent’s power: If the agent exceeds his the question of the agent’s authority to do
the ratified act less rigor by the courts, according to whether the
agency was or was not for compensation.
Ratification is spelled out when the principal
brings legal proceedings to enforce the
contract entered into by the unauthorized
agent, subject to qualification, however, that
the bringing of legal proceedings is not
deemed ratification where the principal’s
action is undertaken to avert a greater loss
rather than to assert a gain. Robinson v.
Borse
NOTE: Agent always liable for fraud but not for

negligence, which shall be judged with more or
Principal still responsible for the

Mismanageme acts contracted by the agent with
nt of the respect to 3rd persons;
business by the Principal, however, may seek
agent recourse from the agent
Principal civilly liable so long as

Tort committed the tort is committed by the
by the agent agent while performing his duties
in furtherance of the principal’s
business
Agent in good Principal is liable for damages
faith but
prejudices 3rd
parties
Agent in bad Only the agent is liable for
faith and damages
prejudices 3rd
persons
ACTS OF EFFECT EXCEPTION(S)
THE
AGENT
Binds principal; Agent liable if he:
In behalf of the principal, Agent not personally liable Expressly makes himself liable
within the scope of Exceeds the limits of his authority
authority without giving the parties
sufficient notice of his powers
Binding on the principal when:
Contract is unenforceable as Ratified or
Without or beyond scope
against the principal but binds The principal allowed the agent to
of authority
the agent to the third person act as though he had full
powers
When the transaction involves things
Within the scope of Not binding on the principal; belonging to the principal:
authority but in the agent’s Principal has no cause of action Remedy of the principal - damages
name against the 3rd parties and for agent’s failure to comply
vice versa with the agency
Remedies of the third person
If the case falls under the general
rule, he can sue the agent.
But when the contract involves
things belonging to the
principal, he can sue the
principal.
But if it cannot be determined
without litigation who is
liable, he can sue both.
Within the scope of the Insofar as 3rd persons are
written power of attorney concerned (not required
but agent has actually to inquire further than the
exceeded his authority terms of the written
according to an power, agent acted within
understanding between scope of his authority;
him & the principal Principal estopped
With improper motives Motive is immaterial; as long as Third person knew agent was acting
within the scope of authority, for his own benefit: principal is
valid not liable to 3rd third person
Owner is seeking recovery of
personal property of which he
has been unlawfully deprived
Authorized - principal still
liable
Beyond the scope of the
agent’s authority
GR: Principal not liable
Exception: principal takes
advantage of a contract or
receives benefits made under
false representation of his
agent
3. For the agent’s own benefit –
principal still liable; agent’s
motive immaterial
proceeds of the sale on the same terms
agreed upon with the purchaser. The agent
shall be liable for damages if he does not
collect the credits of his principal at the time
when they become due and demandable,
Commission Agent - one whose business is to UNLESS he proves, that he exercised due
receive and sell goods for a commission and who diligence for that purpose.
is entrusted by the principal with the possession
of goods to be sold, and usually selling in his own J. MODES OF EXTINGUISHMENT
name.
Agency is Extinguished: (EDWARD)
Distinction between Commission Agent & By the expiration of the period for which the
Broker agency was constituted.
COMMISSION AGENT BROKER By the death, civil interdiction, insanity or
Engaged in the No custody or insolvency of the principal or of the agent;
purchase and sale for a possession of the thing By the withdrawal of the agent;
principal of personal he disposes; merely a By the accomplishment of the object or purpose
property which has to go-between, an of the agency;
be placed in his intermediary between By its revocation;
possession and the seller and the By the dissolution of the firm or corporation
disposal buyer which entrusted or accepted the agency
(Art. 1919)
Has a relation with Maintains no relation
principal, buyer or with the thing which he The list not exclusive; causes particular only to
seller, and property purchases or sells agency; may be extinguished by the modes of
which is the object of extinguishment of obligations in general
the transaction whenever they are applicable, like loss of the
thing and novation
Distinction between Ordinary Agent & Agency is TERMINATED, as a matter of law, upon
Commission Agent the outbreak of war.
ORDINARY AGENT COMMISSION AGENT
Acts for and in behalf May act in his own Presumption of Continuance of Agency -
of his principal name or in that of the when once shown to have existed, an agency
principal relation will be presumed to have continued, in
Need not have Must be in possession the absence of anything to show its termination.
possession of the of the thing he
principal’s goods disposes Continuance of Agency
Parties must be
Present,
Obligations of a Commission Agent: (RMCB) Capacitated and
Responsible for the goods received by him, as Solvent
described in the consignment, UNLESS upon
receiving them he should make a written Modes of extinguishing an agency,
statement of the damage and deterioration generally: (ASO)
suffered by the same Agreement
If goods are of the same kind and mark but Subsequent acts of the parties which may be
belonging to different owners, make a either:
distinction by counter marks and designate By the act of both parties or by mutual
the merchandise respectively belonging to consent
each principal By the unilateral act of one of them
He cannot, without consent of the principal, sell NOTE: Even if the reason for extinguishing the
on credit; should he do, principal may agency is not true, the agent cannot insist on
demand payment in cash, but the reinstatement. The agent can only demand
commission agent entitled to any damages.
interest/benefit which may result from such
sale What happens if the subject matter of the
agency is lost or destroyed?
If an agent receives guarantee commission (a del In the absence of any agreement by the parties
credere agent), he shall bear the risk of to the contrary, the loss or destruction of the
collection and shall pay the principal the subject matter of the agency terminates the
agent‘s authority to deal with reference to it other property not affected
If the loss brought about by the principal
EXCEPTIONS: (ex.. principal sells subject matter to
If it is possible to substitute other material for another party even if an agent has been
that which was destroyed without substantial constituted in reference to it), principal
detriment to either party liable for damages for his wrongful
If the destroyed subject matter was not in fact terminating act; if subject matter is lost
essential to the contract without principal’s fault, no liability
A partial loss or destruction assumed by him
Change of Circumstance:
Form of renunciation GENERAL RULE: when there is a basic change
It is not always necessary for the agent to in the circumstances surrounding the
renounce the agency expressly. He can do so transaction, which was not contemplated by the
impliedly, such as: parties and which would reasonably lead the
Where he has conducted himself in a manner agent to believe that the principal would not
incompatible with his duties as agent desire him to act, the authority of the agent is
When he abandons the object of his agency and terminated
acts for himself in committing a fraud upon EXCEPTIONS:
his principals If the original circumstances are restored within a
When he files a complaint against the principal reasonable period of time, the agent's
and adopts an antagonistic attitude towards authority may be revived
him Where the agent has reasonable doubts as to
whether the principal would desire him to act,
Exceptions to Extinguishment by Death his authority will not be terminated if he acts
(CKID) reasonably
If the agency is coupled with an interest Where the principal and agent are in close daily
If the act of the agent was executed without the contact, the agent's authority to act will not
knowledge of the death of the principal and terminate upon a change of circumstances if
the third person who contracted with the the agent knows the principal is aware of the
agent acted in good faith change and does not give him new
To avoid damage instructions
If it has been constituted in the common interest
of the principal and of the agent, or in the Revocation - termination of the agency by the
interest of a third person who has accepted subsequent act of the principal
the stipulation in his favor
Renunciation/Withdrawal - termination of the
Can the heirs continue the agency? agency by the subsequent act of the agent
GENERAL RULE: agency calls for personal
services on the part of the agent; rights & May the agency be extinguished at will?
obligations are not transmissible AGENT may do so but subject to the contractual
obligations owing to the principal (i.e. fixed
EXCEPTIONS: period of time for the agency or purpose not
Agency by operation of law, or a presumed or yet accomplished);
tacit agency Expressly or impliedly
Agency is coupled with an interest in the subject conducted himself in a manner incompatible
matter of the agency (ex. power of sale in a with his duties;
mortgage). abandons the object of agency and acts for
himself in committing a fraud upon his
Exceptions to Extinguishment Upon Loss or principal;
Destruction of Subject Matter he files a complaint against the principal and
If it is possible to substitute other material for adopts an antagonistic attitude towards
that which was destroyed without substantial him
detriment to either party or if the destroyed with just cause - give due notice
subject matter was not in fact essential to the without just cause - liable for damages if
contract; the principal suffers damages thereby
A partial loss or destruction does not always UNLESS the agent should base his
result in a complete termination of the agency, withdrawal upon the impossibility of
and under such circumstances, while the agency continuing the performance of the agency
may be ended in so far as the destroyed property without grave detriment to himself
is concerned, it may continue in existence as to The mere fact that the agent violates his
instructions does not amount to renunciation, As to 3rd persons – express notice necessary
and although he may thus render himself As to former customers - actual notice must
liable to the principal, he does not cease to be given to them because they always
become an agent. assume the continuance of the agency
relationship
PRINCIPAL may also revoke the agency at will As to other persons - notice by publication is
EXCEPTION: agency coupled with interest enough
When a bilateral contract depends upon the
agency Effect of Extinguishment without Notice
When the agency is the means of fulfilling an Act of agent deemed valid insofar as 3 rd parties
obligation already contracted acting in good faith and without knowledge of
When a partner is appointed as manager of a revocation
partnership in the contract of partnership
and his removal from the management is
unjustifiable.
Exception to the exception: when the
agent acts to defraud the principal
Implied Revocation of Agency

Principal appoints a new agent for the same
business or transaction (only if there is
incompatibility); effective as between the
principal and the agent only if communicated
to the agent; does not prejudice rights of
third persons acting in good faith without
knowledge of the revocation
Principal directly manages the business
entrusted to the agent, or deals directly with
3rd persons
Effect of Issuance of a Special Power of

Attorney:
The general power is impliedly revoked as to
matters covered by the special power because a
special power naturally prevails over a general
power.
Principal’s Liability for Damages despite

Revocation
If the agency was constituted for a fixed period,
the principal shall be liable for damages
occasioned by the wrongful discharge of the
agent before the expiration of the period
fixed
Even if there was no time fixed for the
continuance of the agency, but the agent can
prove that the principal acted in bad faith by
revoking the agency in order to avoid the
payment of commission about to be earned,
the principal can be held liable for damages
Necessity of Notice of Revocation

As to the agent - express notice always
necessary; sufficient notice if the party to be
notified actually knows, or has reason to
know, a fact indicating that his authority has
been terminated/suspended; revocation
without notice to the agent will not render
invalid an act done in pursuance of the
authority
VI. CREDIT TRANSACTIONS CHARACTERISTICS
1. Real Contract – delivery is essential for
============================
perfection of the loan (BUT a promise to lend,
===== being consensual, is binding upon the
TOPIC UNDER THE SYLLABUS: parties)
A. Loan 2. Unilateral Contract - only the borrower has
1. Commodatum vs. Mutuum the obligation
2. Obligations of bailor and bailee
3. Interest and the suspension of 1. COMMODATUM VS. MUTUUM
usury law KINDS
1. COMMODATUM – bailor delivers to bailee a
===========================
non-consumable thing so that the latter may
===========
use it for a certain time and return the
identical thing
CREDIT TRANSACTIONS include all
Kinds of commodatum:
transactions involving the purchase or loan of
a. Ordinary commodatum –
goods, services or money in the present with a
bailee uses the thing for a certain period
promise to pay or deliver in the future (contract
of time
of security)
b. Precarium – bailor may
demand the thing loaned at will; exists in
2 Types of Credit Transactions:
cases where:
1. Secured transactions – those supported by
i. There is no stipulation as to the
a collateral or an encumbrance of property
duration of the contract or use of the
2. Unsecured transactions – those supported
thing loaned
only by a promise to pay or the personal
ii. Use of the thing is merely tolerated by
commitment of another such as a guarantor
the owner
or surety
2. MUTUUM OR SIMPLE LOAN - lender
delivers to the borrower money or other
SECURITY is something given, deposited or
consumable thing upon the condition that the
serving as a means to ensure the fulfillment or
latter will pay the same amount of the same
enforcement of an obligation or of protecting
kind and quality
some interest in the property
LOAN CREDIT
2 Types of Security:
1. Delivery by one Ability of an individual
1. Personal – when an individual becomes a
party and the to borrow money or
surety or a guarantor
receipt by the other things by virtue of the
2. Real or Property – when an encumbrance is
party of a given confidence or trust
made on property (e.g. mortgage or pledge)
sum of money or reposed by a lender
other consumable that he will pay what
BAILMENT - is the delivery of property of one
thing upon an he may promise w/in a
person to another in trust for a specific purpose,
agreement, express specified period
with a contract, express or implied, that the trust
or implied
shall be faithfully executed and the property
2. To repay the same
returned or duly accounted for when a special
amount of the
purpose is accomplished or kept until the bailor
same kind and
reclaims it. Generally, it is contractual, but may
quality, w/ or w/o
also be created by operation of law.
interest
PARTIES IN BAILMENT
1. BAILOR – The lender/giver; the party who COMMODATUM
delivers possession/custody of the (Articles 1935-1952)
thing bailed
2. BAILEE – The recipient; the party who CHARACTERISTICS AND CERTAIN RULES TO
receives the possession/custody of REMEMBER:
the thing delivered 1. Gratuitous: If there is compensation, then
it’s not commodatum. It may be a lease.
LOAN 2. Personal: Death of lender/borrower
EXTINGUISHES the contract
a. Borrower can’t lend or lease the d. LENDS THE SUBJECT
thing to third persons MATTER TO A 3RD PERSON - he lends or
i. EXCEPTION: when stipulated leases the thing to a third person who is
that he can not a member of his household
ii. EXCEPTION: the members of e. INGRATITUDE - being
the borrower’s household able to save the thing borrowed or his
may make use of the thing own thing, he chose to save the latter
iii. EXCEPTION TO EXCEPTION:
when stipulated that 2. OBLIGATIONS OF BAILOR AND BAILEE
members of the househould
cannot use or if the nature OBLIGATIONS OF BAILEE (borrower)
of the thing forbids such use
3. Subject Matter: 1. To take care of the thing with ordinary
a. Generally non-consumables (can be diligence
real or personal property) 2. To pay for ordinary expenses
b. If consumable, it must be for 3. To be liable for loss due to fortuitous
exhibition (1936) event if stipulated that he is such
4. Ownership
a. Lender does not have to be the OBLIGATIONS OF THE BAILOR (lender) (AD-
owner of the thing loaned in READ-HA)
commodatum
5. Right of retention: 1. Primary obligation of the bailor:
a. Borrower can’t retain the thing General Rule: To allow the bailee the use of the
loaned just because he has claims thing loaned for the duration of the period
against lender stipulated or until the accomplishment of the
b. Borrow can retain if he suffers purpose for w/c the commodatum was
damages by reason of hidden flaws constituted.
in the thing lent (1951) Exceptions: Bailor may demand the return of
6. Presumption of solidary liability of the thing or its temporary use when:
borrowers a. Bailor has an urgent need for the thing
a. If there are two or more borrowers, (Art. 1946) – the contract is suspended
the presumption is that they are b. Bailee commits an act of ingratitude (Art.
solidarily liable 1948)
7. Fruits: a stipulation to make use of fruits is
valid, but it is never presumed. The • If the bailee should commit an offense
enjoyment of the fruits must only be against the person, the honor or the
incidental to the use of the thing itself - if property of the bailor, or of the wife or
enjoyment of fruits is primary reason, it is a children under his parental authority
usufruct. • If the bailee imputes to the bailor any
criminal offense, or any act involving
When borrower is liable for loss of the thing moral turpitude, even though he should
(ADLIB) prove it, UNLESS the crime or the act has
been committed against the bailee
a. BAD FAITH – if the himself, his wife, or children under his
bailee devotes the thing to any purpose authority
different from that for which it has been
• If the bailee unduly refuses the bailor
loaned
support when the bailee is legally or
b. DELAY - he keeps it
morally bound to give support to the
longer than the period stipulated or after
bailor
the accomplishment of the use for which
the commodatum has been constituted
2. May demand the thing at will when the
c. HAS BEEN
contract is a precarium
DELIVERED W/ APPRAISAL - the thing
loaned has been delivered with appraisal
of its value, UNLESS there is a stipulation
exempting the bailee from responsibility
in case of a fortuitous event
c.
c.
c.
PRECARIUM – a kind of commodatum where the c.
bailor may demand the thing at will. It is a The bailor is aware thereof
contract by which the owner of a thing, at the d. Bailor does not advise the bailee of the same
request of another person, gives the latter the e. The bailee suffers damages by reason of the
thing for use as long as the owner shall tolerate flaw or defect
3. To refund the extraordinary expenses (Art.

1949) 8. The bailor has no right of abandonment for
expenses and damages (Art. 1952)
General Rule – Notice should be given by the REASON: expenses and/or damages may exceed
bailee to the bailor regarding such extraordinary the value of the thing loaned
expenses and consent should be obtained
SIMPLE LOAN OR MUTUUM
Exception – Where the extraordinary expenses
are so urgent that the reply to the notification (Arts. 1933-1961)
cannot be awaited w/o danger
SIMPLE LOAN OR MUTUUM is a contract
4. If the extraordinary expenses arise from the whereby one of the parties delivers to another
actual use of the thing and even though money or other fungible thing w/ the
bailee acted w/o fault, the expenses will be understanding that the same amount of the
borne equally by both the bailor and the same kind and quality shall be paid.
bailee (50-50) (Art. 1949, par. 2)
Nature of Mutuum
REASONS: a. Bilateral – borrower’s promise to pay is the
a. Bailee pays ½ because of the benefit consideration for the lender’s
derived from the use of the thing obligation to furnish the loan
b. Bailor pays the other ½ because he is the b. No criminal liability upon failure to pay
owner and the thing will be returned to him
Subject Matter
Exception – Stipulation to the contrary (e.g. a. Fungible or consumable - depending on
different apportionment or sole burden by bailee the intent of the parties; that the return of
or bailor) the thing is equivalent only and not the
identical thing
5. All other expenses which are not necessary
for the use and preservation of the thing Fungible things – those which are usually
must be shouldered by the borrower (bailee) dealt with by number, weight, or measure so
that any given portion is treated as the
6. The depreciation caused by the reasonable equivalent of any other unit or portion.
and natural use of the thing is borne by the bailor – depends upon the intention of
(Art. 1943) the parties (as opposed to consumable or
REASON: parties to the contract know that the non- consumable which depends upon its
thing borrowed cannot be used without nature)
deterioration due to ordinary wear and tear. - A fungible from the viewpoint of
the parties is easily replaceable
Exceptions:
a. When there is a stipulation to the contrary
b. When the bailee is guilty of fault or b. Money
negligence • If the transfer of ownership is on a non-
c. If he devotes the thing to any purpose fungible thing, with the obligation of the
different from that for which has been other to give things of the same kind,
loaned quantity and quality, it is a barter
7. To pay damages for known hidden flaws FORM OF PAYMENT

(Art. 1951) 1. If the thing loaned is money – currency
stipulated, otherwise that which is legal
Requisites: (the following must concur) tender in the Philippines. In case of
a. There is a flaw or defect in the thing loaned extraordinary inflation or deflation, payment
b. The flaw or defect is hidden
shall be in the value of the currency at the Exceptions:
time of the creation of the obligation. 1. Indemnity for damages – the debtor in
2. If other than money – another thing of the delay is liable to pay legal interest
same kind, quality and quantity. If impossible (6%/12%) as indemnity for damages even
to do so, payment must be its value at the in the absence of a stipulation for the
time of perfection of the loan. payment of interest. Interest as indemnity
for damages is payable only in case of
3. INTEREST AND THE SUSPENSION OF default or non-performance of contract.
USURY LAW
• Basis for computation for indemnity:
INTEREST a. Central Bank Circular 416 – 12% p.a. in
cases of:
General Rule – Interest must be expressly • Loans
stipulated in writing, and it must be lawful • Forbearance of money, goods or
(Art. 1956) credits
• Judgments involving such loans
1. When an obligation, regardless of its source, or forbearance, in the absence of
is breached, the contravenor can be held the express agreement as to
liable for damages. such rate of interest
2. If obligation consists in the payment of a sum
• During the interim period from
of money (loan, forbearance of money,
the date judgment until actual
judgment money)
payment
a. Interest due is what has been
b. Art. 2209 of the Civil Code – 6% p.a. in
stipulated by the parties
cases of:
b. The interest shall earn legal interest
from the time of judicial demand • Other sources (e.g. sale)
c. If there’s no stipulation, the rate is • Damages arising from injury to
12% from default (judicial or persons
extrajudicial demand) • Loss of property which does not
2. If obligation is not a loan or forbearance of involve a loan
money
a. Interest on the amount of damages 2. Interest accruing from unpaid interest -
awarded may be imposed at the interest due shall earn interest from the
discretion of the court at 6% time it is judicially demanded although the
b. No interest shall be adjudged on obligation may be silent upon this point.
unliquidated claims or damages,
except when or until the amount can Determination of interest payable in kind:
be established with reasonable Its value shall be appraised at the current price
certainty of the products or goods at the time and place of
c. Where the amount is established with payment. (Art. 1958)
reasonable certainty, the interest
shall begin from the time the claim is NOTE: In case of an unstipulated interest paid
made judicially or extrajudicially by mistake, the debtor may recover as in the
d. But when such certainty cannot be so case of solutio indebiti or undue payment. If such
reasonably established the time the was voluntarily paid, there can be no
demand is made, the interest shall recovery as in the case of natural obligations.
begin to run only from the date the
judgment of the court is made COMPOUNDING INTEREST (Art. 1959)
e. The actual base (principal) for the May be availed of only when there is a written
computation of the legal interest stipulation in the contract for the payment of
shall, in any case, be on the amount interest.
finally adjudged.
3. When judgment of court awarding a sum of General Rule – Accrued interest (interest due
money becomes final and executory, 12% and unpaid) shall not earn interest
interest from such until its payment
Eastern Assurance and Surety Corporation
v. CA [322 SCRA 73, Jan. 18, 2000]
Exceptions: 2. Necessary Deposit
• When judicially demanded(e.g. when 3. Judicial Deposit
case is filed to collect) ========================
• When there is an express stipulation ==============
made by the parties: that the interest due
and unpaid shall be added to the principal
obligation and the resulting total amount DEPOSIT
shall earn interest (Arts. 1962-2009)
DEPOSIT is constituted from the moment a
USURY person receives a thing belonging to another,
with the obligation of safely keeping it and of
USURY – is the contracting for or receiving returning the same. Safekeeping must be the
something in excess of the amount allowed by
principal purpose of the contract.
law for the loan or forbearance of money, goods
or chattels.
Characteristics
ELEMENTS OF USURY: (LUIT) 1. Real - because it is perfected only by the
1. Loan or forbearance delivery of the subject matter
2. Understanding between the parties that he • BUT an agreement to constitute a deposit
loan shall be paid. is binding and enforceable, since it is
3. Unlawful intent to take more than the legal merely consensual
rate. 2. Unilateral - if gratuitous
4. Taking or agreeing to take for the use of the 3. Bilateral - if with compensation
loan of something in excess of what is
allowed by law. Creation of deposit (Art. 1964)
1. By virtue of a court order or
NOTE: Usury now is legally inexistent. In Art. 2. By law
1306 of NCC, contracting parties may establish 3. Not by the will of the parties
such stipulations, clauses, terms and conditions 4. Depositary must not be the owner of the
as they may deem convenient, provided they are property deposited (Art. 1962)
not contrary to law, morals, good customs, public
order, or public policy. This may be invoked to Kinds of Deposit
annul the excessive stipulated interest.  1. Judicial - when an attachment or seizure of
However, Usury law has NOT been repealed property in litigation is ordered
2. Extrajudicial (Art. 1967)
a. Voluntary - delivery is made by
• Since the mortgage contract derives its
the will of the depositor or by two or more
vitality from the validity of the principal
persons each of whom believes himself
obligation, the invalid stipulation on interest
entitled to the thing deposited
rate is similarly insufficient to render void the
b. Necessary - made in compliance
ancillary mortgage contract. Sps. Carpo v.
with a legal obligation, or on the occasion
Chua, [G.R. No. 150773 & 153599,
of any calamity, or by travelers in hotels
September 20, 2005]
and inns or by travelers with common
carriers. There is lack of free choice in the
BARTER – A contract whereby one person
depositor.
transfers the ownership of non-fungible things
to another with the obligation on the part of BASIS JUDICIAL EXTRAJUDICIAL
the latter to give things of the same kind, Creati Will of the court Will of the
quantity and quality, shall be considered a on contracting
barter. parties
Purpos Security or to Custody and
======================== e ensure the right of safekeeping
a party to the
============== property or to
TOPIC UNDER THE SYLLABUS: recover in case of
B. Deposit favorable
1. Voluntary Deposit judgment
Subjec Generally Movables only DEPOSITARY DEPOSITARY
t immovables CAPACITATED / INCAPACITATED /
Matter DEPOSITOR DEPOSITOR
Cause Always onerous May be INCAPACITATED CAPACITATED
compensated but Depositary is subject Depositary does not
generally to ALL the obligations incur the obligations of
gratuitious of a depositary a depositary
Return Upon order of the Upon demand of
of court / end of depositor
thing litigation Depositary must return Depositary, however,
In Person who has a Depositor or / 3rd the property either to: is liable to:
whose right person designated a) Return the thing
behalf deposited while still
it is a) The legal in his possession;
held representative of the AND
incapacitated, OR b) Pay the depositor
Deposit is generally gratuitous: (Art. 1965) b) The depositor the amount by w/c
General Rule – A deposit is generally gratuitous. himself if he should he may have
Exceptions: (SBSJ) acquire capacity benefited himself w/
a. When there is a the thing or its price
contrary stipulation subject to the right
b. Where depositary is of any 3rd person
engaged in the business of storing goods who acquires the
c. Where property is thing in good faith
saved without knowledge of the owner
d. Judicial deposit BASIS IRREGUL MUTUUM
AR
DEPOSIT
Subject Matter of Deposit (Art. 1966) Demandable Lender is bound
General Rule: Only movable or personal at will of the by the
property may be the object of deposit (whether irregular provisions of the
voluntary or necessary) Demandabi depositor for contract and
Exception: In judicial deposit, it may cover both lity whose benefit cannot seek
movable and immovable property the deposit restitution until
has been the time of
Depositor need not be the owner of the constituted payment as
thing provided in the
General Rule: The depositor must be the owner contract has
of the thing deposited arisen
Exceptions: It may belong to another person
Benefit Benefit Necessity of the
than the depositor
accrues to the borrower
a. When two or more persons claiming to be
depositor
entitled to a thing may deposit the same
Depositor has Enjoy no
with a third person. In such case, the
Preference preference preference in
third person assumes the obligation to
of credit over other the distribution
deliver to the one to whom it belongs.
creditors with of the debtor’s
b. Interpleader – the action to compel the
respect to property
depositors to settle their conflicting
thing
claims. Here one of the depositors is not
deposited
the owner.
OBLIGATIONS OF THE DEPOSITARY
Form of contract of deposit
(SRT-CCC-ULC-RITT-RPPT-TL-HR)
General Rule: A contract of deposit may be
1. Two primary obligations (Art. 1972)
entered into (but not perfected) orally or in
a. Safekeeping of the object
writing (Art. 1969)
Exception: Delivery of the thing deposited is Degree of Care – same diligence as he
needed for perfection. would exercise over his property
• REASONS: General Rule: Depositary may not change the
i. Essential requisite of judicial way of the deposit
relation which involves the Exception: If there are circumstances indicating
depositor’s confidence in his good that the depositor would consent to the change.
faith and trustworthiness This is a situation wherein the depositary would
ii. The presumption that the reasonably presume that the depositor would
depositor took into account the agree to the change if he knows of the facts of
diligence which the depositary is the situation.
accustomed with respect to his Requisites:
own property a. The depositary must notify the depositor
b. Return of the thing when required of such change; and
– Even though a specified term or time for b. Must wait for the reply of the depositor to
such may have been stipulated in the such change.
contract • These requisites may not be dispensed
with unless delay would cause danger.
The depositary cannot excuse himself from
liability, in the event of loss, by claiming that he 4. Obligation to Collect on the choses in
exercised the same amount of care toward the action deposited (Art. 1975)
thing deposited as he would towards his own if • If the thing deposited should earn
such care is less than that required by the interest, the depositary is under the
circumstances obligation to:
a. Collect the interest as it becomes due
2. Obligation not to Transfer deposit (Art. b. Take such steps as may be necessary
1973) to preserve its value and the right
corresponding to it
General Rule: The depositary is not allowed to • The depositary is bound to collect the
deposit the thing with a third person capital, as well as the interest, when due
REASON: A deposit is founded on trust and
confidence and it can be supposed that the Contract of rent of safety deposit boxes
depositor, in choosing the depositary, has taken (Art. 1975)
into consideration the latter’s qualification - A contract for the rent of safety deposit
Exception: The depositary is authorized by boxes is not an ordinary contract of lease
express stipulation of things, but a special kind of deposit;
hence, it is not to be strictly governed by
LIABILITIES: Depositary is liable for loss of the the provisions on deposit.
thing deposited when: - The prevailing rule in the US is that the
a. He transfers the deposit with a third relation between a bank renting out
person without authority although there safety deposit boxes and its customer
is no negligence on his part and the third with respect to the contents of the box is
person; that of bailor and bailee.
b. He deposits the thing with a third person
who is manifestly careless or unfit 5. Obligation not to Commingle things if so
although authorized, even in the absence stipulated (Art. 1976)
of negligence; or
c. The thing is lost through the negligence General Rule: The depositary is permitted to
of his employees whether the latter are commingle grain or other articles of the same
manifestly careless or not. kind and quality
Effects:
• Exemption from liability: The thing is lost a. The various depositors of the mingled
without the negligence of the third person goods shall own the entire mass in
with whom he was allowed to deposit the common
thing if such third person is not “manifestly b. Each depositor shall be entitled to such
careless or unfit.” (i.e., minor) portion of the entire mass as the amount
deposited by him bears the whole
3. Obligation not to Change the way of
deposit (Art. 1974)
Exception: When there is a stipulation to the Relation between bank and depositor
contrary (Art. 1980)
6. Obligation not to make Use of the things • Fixed, savings, and current deposits of
deposited (Art. 1977) money in banks and similar institutions
General Rule: Deposit is for safekeeping of the shall be governed by the provisions
subject matter and not for its use concerning simple loan
Exceptions: a. Contract of loan – deposits in banks
a. Expressly authorized by the depositor are really loans because the bank can
b. Such use is necessary for its preservation but use the same for its ordinary
limited for the purpose only transactions
• Effect of unauthorized use: Liability for b. Relation of creditor and debtor –
damages the relation between a depositor and
• Effects of authorized use: (Art. 1978) a bank is that of a creditor and a
debtor.
a. If the thing deposited is non-
consumable: 8. Obligation when the thing deposited is
Closed and Sealed (Art. 1981)
General Rule: The contract loses the • The depositary has the obligation
character of a deposit and acquires that to:
of a commodatum, despite the fact that a. Return the thing deposited when
the parties may have denominated it as a delivered closed and sealed in the
deposit same condition
Exception: Safekeeping is still the b. Pay for damages should the seal or
principal purpose of the contract lock be broken through his fault,
which is presumed unless proven
b. If the thing deposited is money or otherwise
other consumable thing: c. Keep the secret of the deposit when
the seal or lock is broken, with or
General Rule: Converts the contract into without his fault
a simple loan or mutuum
Exception: Safekeeping is still the When depositary justified in opening
principal purpose of the contract, but it closed and sealed subject matter (Art.
becomes an irregular deposit. Bank 1982):
deposits are in the nature of irregular a. The depositary is presumed
deposits but they are really loans authorized to do so if the key has
governed by the law on loans. been delivered to him
b. When the instructions of the depositor
7. Liability for Loss through fortuitous as regards the deposit cannot be
event (Art. 1979) executed without opening the box or
receptacle (Necessity)
General Rule: Depositary is not liable for loss
through fortuitous event without his fault 9. Obligation to Return products,
Exceptions: (SUDA) accessories and accessions (Art. 1983)
a. If it is so stipulated
b. If he uses the thing without the depositor’s 10. Obligation to pay Interest on sums
permission converted for personal use (Art. 1983)
c. If he delays in its return
d. If he allows others to use it, even though he 11. The depositary who receives the thing in
himself may have been authorized to use deposit cannot require that the
the same depositor Prove his ownership over the
thing (Art. 1984)
NOTE: Liability for loss without fortuitous event:
Depositary presumed at fault since he is in
possession
(Art. 1265)
12.
Where Third person appears to be the • To the depositor himself should he

owner (Art. 1984) acquire capacity
• The depositary may be relieved from c. Even if the depositor had capacity at
liability when: the time of making the deposit, but
a. He advised the true owner of the he subsequently loses his capacity
thing of the deposit during the deposit, the thing must be
b. If the owner, in spite of such returned to his legal representative
information, does not claim it within
the period of one month (30 days) 15. Obligation to return at the Place of
return (Art. 1987)
13. Obligation of the depositary when there – same as the general rule of law regarding
are Two or more depositors (Art. 1985) the place of payment (Art. 1251)
a. Divisible thing and joint depositors –
each one of the depositors can GENERAL RULE: At the place agreed upon by
demand only his share proportionate the parties, transportation expenses shall be
thereto borne by the depositor
b. Indivisible thing or solidary depositors EXCEPTION: In the absence of stipulation, at the
– rules on active solidarity place where the thing deposited might be even if
it should not be the same place where the
General Rule: Each one of the original deposit was made
depositors may do whatever may be
useful to the others (Art. 1212) 16. Obligation to return upon the Time of
Exception: Anything w/c may be return (Art. 1988)
prejudicial to the other depositors
General Rule: The thing deposited must be
General Rule: The depositary may returned to the depositor upon demand, even
return the thing to any one of the though a specified period or time for such return
solidary depositors may have been fixed
Exception: When a demand, judicial Exceptions:
or extrajudicial, for its return has a. When the thing is judicially attached while
been made by one of them in which in the depositary’s possession
case delivery should be made to him b. When notified of the opposition of a third
person to the return or the removal of the
c. Return to one of the depositors thing deposited
stipulated
• If by stipulation, the thing should 17. Right of the depositary to return the
be returned to one of the Thing deposited (Art. 1989)
depositors, the depositary is NOTE: In this case, it is the depositary who is
bound to return it only to the returning the deposit WITH OR WITHOUT THE
person designated, although he DEMAND of the depositor.
has not made any demand for its
return General Rule: The depositary may return the
thing deposited, notwithstanding that a period
14. Obligation to Return to the person to has been fixed for the deposit, if:
whom return must be made (Art. 1986) a. The deposit is gratuitous
a. The depositary is obliged to return the b. The reason is justifiable
thing deposited, when required, to: • Remedy if depositor refuses to
• The depositor; receive the thing: The depositary may
• To his heirs or successors; or deposit the thing at the disposal of
• To the person who may have been the judicial authority
designated in the contract.
b. If the depositor was incapacitated at Exception: When the deposit is for a valuable
the time of making the deposit, the consideration, the depositary has no right to
property must be returned to: return the thing before the expiration of the time
• His guardian or administrator designated even if he should suffer
inconvenience as a consequence
• To the person who made the
deposit
18.
Depositary’s liability in case of Loss by - Applies only when the deposit is gratuitous
force majeure or government order (Art.
1990) aa Obligation to pay losses incurred due
to character of thing deposited (Art.
• Depositary is not liable in cases of loss by
force majeure or by government order. General Rule: The depositary must be
However, he has the duty to deliver to reimbursed for loss suffered by him because
the depositor money or another thing he of the character of the thing deposited.
receives in place of the thing. Exceptions:
a. Depositor was not aware of the danger
19. Liability in case of alienation by the b. Depositor was not expected to know the
depositary’s Heir (Art. 1991) dangerous character of the thing
c. Depositor notified the depositary of such
• When alienation is done in GOOD FAITH: dangerous character
a. Return the value of the thing d. Depositary was aware of the danger
deposited without advice from the depositor
b. Assign the right to collect from the
buyer aa Effect of death of depositor or
• The heir does not need to pay the depositary (Art. 1995)
actual price of the thing deposited a. Deposit gratuitous – death of either of the
• When alienation is done in BAD FAITH: depositor or depositary extinguishes the
a. Liable for damages deposit (personal in nature). By the word
b. Pay the actual price of the thing “extinguished,” the law really means that
deposited the depositary is not obliged to continue
with the contract of deposit.
20. Depositary may Retain the thing in b. Deposit for compensation – not
pledge until the full payment of what extinguished by the death of either party
may be due him by reason of the
deposit (Art. 1994) Extinguishment of Deposit
a. Upon the loss or deterioration of the thing
• The thing retained serves as security for deposited;
b. Upon the death of the depositary, ONLY in
the payment of what may be due to the
depositary by reason of the deposit (see gratuitous deposits;
c. Other provisions in the Civil Code
Arts. 1965, 1992 & 1993)
NOTE: The debt must be prior to the (novation, merger, etc.)
deposit
NECESSARY DEPOSIT
IRREGULAR MUTUUM
A deposit is necessary when: (LCCT)
DEPOSIT
1. It is made in compliance with a legal
May be demanded at Lender is bound by the
will by the irregular provision of the obligation
depositor for whose contract and cannot
benefit the deposit seek restitution until 2. It takes place on the occasion of any
has been constituted the time for payment, calamity, such as fire, storm, flood, pillage,
as provided in the shipwreck, or other similar events
contract, has arisen • There must be a causal relation between
Only benefit is that If with interest, benefit the calamity and the constitution of the
which accrues to the if both parties deposit
depositor
Depositor has No preference 3. Made by passengers with common carriers
preference over other • As to baggages the passengers or their
creditors agents carry
Obligations of the Depositor: (PLD)

aa Obligation to pay expenses of
preservation (Art. 1992)
4.
Made by travelers in hotels or inns (Art. 1998) The hotel-keeper cannot free himself
• Before keepers of hotels or inns may be from responsibility by posting notices to
held responsible as depositaries with the effect that he is not liable for the
regard to the effects of their guests, the articles brought by the guest (Art. 2003)
following must concur:
Elements: Effect: Any stipulation between the hotel-
a. They have been previously informed keeper and the guest whereby the
about the effects brought by the responsibility of the former (as set forth in Art.
guests; and 1998-2001) is suppressed or diminished shall
b. The latter have taken the precautions be VOID.
prescribed regarding their
safekeeping. • Hotel-keeper’s right to retain
The hotel-keeper has a right to retain the
Extent of liability: things brought into the hotel by the
a. Liability in hotel rooms which come guest, as a security for credits on account
under the term “baggage” or articles of:
such as clothing as are ordinarily used a. Lodging
by travelers b. Supplies usually furnished to hotel
b. Include those lost or damages in hotel guests
annexes such as vehicles in the Reason: It is given to hotel-keepers to
hotel’s garage. compensate them for the liabilities
imposed upon them by law. The right of
• When hotel-keeper liable: (Art. 2000 retention recognized in this article is in
– 2002) the nature of a pledge created by
operation of law.
NOTE: In the following cases, the hotel-
keeper is liable REGARDLESS of the • In compliance with a
amount of care exercised: legal obligation (governed by the law
a. The loss or injury to personal property establishing it, and in case of deficiency,
is caused by his servants or the rules on voluntary deposit e.g. Arts.
employees as well as by strangers 538, 586 and 2104)
(Art. 2000)
b. The loss is caused by the act of a thief • Made on the occasion of
or robber done without the use of any calamity (governed by the rules on
arms and irresistible force (Art. voluntary deposit and Art. 2168)
2001)
SEQUESTRATION OR JUDICIAL DEPOSIT
Reason: Hotel-keeper is apparently
negligent When judicial deposit takes place: When an
attachment or seizure of property in litigation is
• When hotel-keeper not liable: ordered by a court. (Art. 2005)
a. The loss or injury is caused by force
majeure, like flood, fire, theft or Nature: Auxiliary to a case pending in court
robbery by a stranger (not the hotel-
keeper’s servant or employee) with Purpose: To maintain the status quo during the
the use of firearms or irresistible force pendency of the litigation or to insure the right of
EXCEPTION: Unless the hotel-keeper the parties to the property in case of a favorable
is guilty of fault or negligence in judgment
failing to provide against the loss or Depositary of sequestered property: person
injury from his cause appointed by the court. (Art. 2007)
Obligations:
b. The loss is due to the acts of the a. To take care of the property with the
guests, his family, servants, visitors diligence of a good father of the family. (Art.
c. The loss arises from the character of 2008)
the things brought into the hotel
• Exemption or diminution of liability:

b.
He may not be relieved of his responsibility until CHARACTERISTICS OF THE CONTRACT

the litigation is ended or the court so orders.
(Art. 2007) 1. Accessory – dependent for its existence
upon the principal obligation guaranteed by it
Applicable law: The law on judicial deposit is hence if principal contract is void, then
remedial or procedural in nature. Hence, the guaranty is also void
Rules of Court are applicable. (Art. 2009)
2. Subsidiary and Conditional – takes effect
BASIS JUDICIAL EXTRAJUDIC only when the principal debtor fails in his
DEPOSIT IAL DEPOSIT obligation subject to limitation
Cause or By will of the By will of the
origin courts parties. 3. Unilateral –
Hence, there a. It gives rise only to a duty on the part of
is a contract the guarantor in relation to the creditor
Purpose Security; Custody; and not vice versa
Secure the right Safekeeping b. It may be entered into even without the
of a party to of the thing intervention of the principal debtor.
recover in case of
favorable 4. Distinct Person – a person cannot be the
judgment. personal guarantor of himself
Subject Either movable or Only movable
Matter immovable property Cause of contract of guaranty
property but 1. Presence of cause which supports
generally, principal obligation: Cause of the contract
immovable is the same cause which supports the
Remunerati Always Generally obligation as to the principal debtor. The
on remunerated gratuitous, consideration which supports the obligation
(onerous) but may be as to the principal debtor is a sufficient
compensated consideration to support the obligation of a
guarantor or surety.
In whose In behalf of the In behalf of
behalf it is person who, by the depositor 2. Absence of direct consideration or
held the judgment, or third benefit to guarantor: Guaranty or surety
has a right person agreement is regarded valid despite the
designated absence of any direct consideration received
by the guarantor or surety, such
======================== consideration need not pass directly to the
============== guarantor or surety; a consideration moving
TOPIC UNDER THE SYLLABUS: to the principal will suffice.
C. Guaranty and Suretyship
MARRIED WOMAN AS GUARANTOR (Art.
1. Nature and extent of guaranty 2049)
2. Effects of guaranty General Rule: Married woman binds only her
3. Extinguishment of guaranty separate property
4. Legal and judicial bonds Exceptions:
======================== 1. With her husband’s consent, binds the
============== community or conjugal partnership property
2. Without husband’s consent, in cases
GUARANTY AND SURETYSHIP provided by law, such as when the
(Arts. 2047-2084) guaranty has redounded to the benefit of the
family
GUARANTY – By guaranty, a person called the
guarantor, binds himself to the creditor, to fulfill GUARANTY UNDERTAKEN WITHOUT
the obligation of the principal debtor in case the KNOWLEDGE OF DEBTOR (Art. 2050)
latter should fail to do so. It is a contract between
the guarantor and the creditor.
a.
T
Rights of third persons who pay: o secure the payment of a loan at

1. Payment without the knowledge or maturity –guarantee of the punctual
against the will of the debtor: payment of a loan at maturity and all other
a. Guarantor can recover only insofar as the obligations of indebtedness
payment has been beneficial to the b. To secure payment if any debt to be
debtor (Art. 1236) subsequently incurred –construed as
b. Guarantor cannot compel the creditor to continuing when it is evident from the terms
subrogate him in his rights (Art. 1237) that the object is to give a standing credit to
2. Payment with knowledge or consent of the principal debtor to be used from time to
the debtor: Subrogated to all the rights time either indefinitely or until a certain
which the creditor had against the debtor period, especially if the right to recall the
(Art. 2067) guaranty is expressly reserved.
Double or sub-guaranty (Art. 2051(2)) Guaranty of conditional obligations: A

One constituted to guarantee the obligation of a guaranty may secure all kinds of obligations, be
guarantor. It should not be confounded with they pure or subject to a suspensive or resolutory
guaranty wherein several guarantors concur. condition.
1. Principal obligation subject to a
GUARANTY OF VOIDABLE, UNENFORCEABLE, suspensive condition – the guarantor is
AND NATURAL OBLIGATIONS (Art. 2052(2)) liable only after the fulfillment of the
condition.
A guaranty may secure the performance of a: 2. Principal obligation subject to a
1. Voidable contract – such contract is resolutory condition – the happening of
binding, unless it is annulled by a proper the condition extinguishes both the principal
court action obligation and the guaranty
2. Unenforceable contract – because such
contract is not void GUARANTOR’S LIABILITY CANNOT EXCEED
3. Natural obligation – the creditor may PRINCIPAL OBLIGATION (Art. 2054)
proceed against the guarantor although he General Rule: Guaranty is a subsidiary and
has no right of action against the principal accessory contract – guarantor cannot bind
debtor for the reason that the latter’s himself for more than the principal debtor
obligation is not civilly enforceable. • If he does, his liability shall be reduced to
• When the debtor himself offers a the limits of that of the debtor.
guaranty for his natural obligation, he • But the guarantor may bind himself for
impliedly recognizes his liability, thereby less than that of the principal.
transforming the obligation from a
natural into a civil one. Exceptions:
1. Interest, judicial costs, and attorney’s
GUARANTY OF FUTURE DEBTS (Art. 2053) fees as part of damages may be
recovered – creditors may recover from the
Continuing Guaranty or Suretyship: surety as part of their damages the
1. Not limited to a single transaction but which abovementioned fees even without
contemplates a future course of dealings, stipulation and even if the surety would
covering a series of transactions generally for thereby become liable to pay more than the
an indefinite time or until revoked. total amount stipulated in the bond.
2. It is prospective in its operation and is
generally intended to provide security with REASON: Surety is made to pay, not by
respect to future transactions. reason of the contract, but by reason of his
3. Future debts, even if the amount is not yet failure to pay when demanded and for
known, may be guaranteed but there can be having compelled the creditor to resort to
no claim against the guarantor until the the courts to obtain payment.
amount of the debt is ascertained or fixed
and demandable. Interest runs from: (demand)
a. Filing of the complaint (upon
Examples: judicial demand); or
b. The time demand was made upon nullifies the nature of the undertaking it had
the surety until the principal obligation is assumed.
fully paid (upon extra-judicial demand)
Remedy of surety: Foreclose the counterbond
2. Penalty may be provided –surety may be put up by the principal debtor (if there is any)
held liable for the penalty provided for in a
bond for violation of the condition therein. GUARANTY DISTINGUISHED FROM
SURETYSHIP
Principal’s liability may exceed guarantor’s GUARANTY SURETYSHIP
obligations Liability depends upon Assumes liability as a
The amount specified in a surety bond as the an independent regular party to the
surety’s obligation does not limit the extent of agreement to pay the undertaking
the damages that may be recovered from the obligation if the
principal, the latter’s liability being governed by primary debtor fails
the obligations he assumed under his contract. to do so
Engagement is a Charged as an original
GUARANTY NOT PRESUMED (Art. 2055) collateral undertaking promisor
Guaranty requires the expression of consent on Secondarily liable – Primarily liable –
the part of the guarantor to be bound. It cannot he contracts to pay if, undertakes directly for
be presumed because of the existence of a by the use of due the payment without
contract or principal obligation. diligence, the debt reference to the
cannot be paid solvency of the principal,
Guaranty Covered by the Statute of Frauds and is so responsible at
• Guaranty must not only be expressed but once the latter makes
must so be reduced into writing. default, without any
demand by the creditor
• Hence, it shall be unenforceable by action, upon the principal
unless the same or some note or whatsoever or any
memorandum thereof be in writing, and notice of default
subscribed by the party charged, or by his Only binds himself to Undertakes to pay if the
agent; evidence, therefore, of the agreement pay if the principal principal does not pay,
cannot be received without the writing, or a cannot or is unable to without regard to his
secondary evidence of its contents. pay ability to do so
• It need not appear in a public document. Insurer of the Insurer of the debt
solvency of the
Guaranty Strictly Construed debtor
Strictly construed against the creditor in favor of Does not contract Pay the creditor
the guarantor and is not be extended beyond its that the principal without qualification
terms or specified limits. Doubt in the terms and will pay, but simply if the principal debtor
conditions of the guaranty or suretyship that he is able to do does not pay. Hence, the
agreement should be resolved in favor of the so responsibility or
guarantor or surety. obligation assumed by
the surety is greater or
1. Liability for obligation stipulated – more onerous than that
guarantor is not liable to obligations assumed of a guarantor
previous to the execution of the guaranty
unless an intent to be so liable is clearly QUALIFICATIONS OF GUARANTOR (Arts.
indicated 2056-2057) (SIC)
2. Liability of surety limited to a fixed 1. He possesses integrity
period – the surety must only be bound in 2. He has the capacity to bind himself
the manner and to the extent, and under the 3. He has sufficient property to answer for
circumstances which are set forth or which the obligation which he guarantees
may be inferred from the contract of Exception: The creditor waives the
guaranty or suretyship, and no further. requirements
3. Liability of surety to expire on maturity
of principal obligation – such stipulation is Effect of Subsequent Loss of Required
unfair and unreasonable for it practically Qualifications: The qualifications need only be
present at the time of the perfection of the NOTE: Art. 2058 is not applicable to a contract of
contract. The subsequent loss of the suretyship.
qualifications would not extinguish the liability of
the guarantor, nor will it extinguish the contract Right of Creditor to Secure Judgment
of guaranty. against Guarantor prior to Exhaustion
Remedy of creditor: Demand another General Rule: An ordinary personal guarantor
guarantor with the proper qualifications (NOT a pledgor or mortgagor), may demand
Exception: Creditor may waive it if he chooses exhaustion of all the property of the debtor
and hold the guarantor to his bargain. before he can be compelled to pay.
Article 2057: Exception: The creditor may, prior thereto,

1. Requires conviction in the first instance of a secure a judgment against the guarantor, who
crime involving dishonesty to have the right shall be entitled, however, to a deferment of the
to demand another. execution of said judgment against him, until
2. Judicial declaration of insolvency is not after the properties of the principal debtor shall
necessary in order for the creditor to have a have been exhausted, to satisfy the latter’s
right to demand another guarantor. obligation.
Estate of Hemady v. Luzon Surety; The EXCEPTIONS TO THE BENEFIT OF

supervening incapacity of a guarantor EXCUSSION (Art. 2059)
DOES NOT terminate the guaranty for it
merely gives the creditor the OPTION to The guarantor is not entitled to the benefit
demand another guarantor. He is not bound of excussion:
to substitute the guarantor. 1. As provided in Art. 2059: (I-SAW-U)
Selection of Guarantor: a. If the guarantor has expressly waived it –

1. Specified person stipulated as Waiver
guarantor: Substitution of guarantor may • Waiver is valid but it must be made in
not be demanded express terms.
REASON: The selection of the guarantor is:
a. A term of the agreement; b. If he has bound himself solidarily with the
b. As a party, the creditor is, therefore, debtor – liability assumed that of a surety
bound thereby. • Guarantor becomes primarily liable as
2. Guarantor selected by the principal a solidary co-debtor. In effect, he
debtor: Debtor answers for the integrity, renounces in the contract itself the
capacity, and solvency of the guarantor. benefit of exhaustion.
3. Guarantor personally designated by the
creditor: Responsibility of the selection c. In case of insolvency of the debtor –
should fall upon the creditor because he guarantor guarantees the solvency of the
considered the guarantor to have the debtor
qualifications for the purpose. • If the debtor becomes insolvent, the
liability of the guarantor as the debtor
RIGHT OF GUARANTOR TO BENEFIT OF cannot fulfill his obligation
EXCUSSION OR EXHAUSTION (Art. 2058)
d. When he (debtor) has absconded, or
1. Guarantor only secondarily liable – cannot be sued within the Philippines – the
guarantor binds himself only in case the creditor is not required to go after a debtor
principal debtor should fail to do so. If the who is hiding or cannot be sued in our
principal debtor fulfills the obligation courts
guaranteed, the guarantor is discharged from
any responsibility. Exception: Debtor has left a manager or
representative
2. All legal remedies against the debtor to
be first exhausted – to warrant recourse e. If it may be presumed that a judicial action
against the guarantor for payment, it may including execution on the property of the
not be sufficient that the debtor appears principal debtor would not result in the
insolvent. Such insolvency may be simulated. satisfaction of the obligation – if such is
the case, the guarantor can no longer (not in litigation or encumbered) of the debtor
require the creditor to resort to all such within the Philippines.
remedies against the debtor as the same
would be but a useless formality. It is not DUTY OF THE CREDITOR TO RESORT TO ALL
necessary that the debtor be judicially LEGAL REMEDIES (Art. 2061)
declared insolvent. After the guarantor has fulfilled the conditions
required for making use of the benefit of
2. If he does not comply with Art. 2060: In exhaustion, it becomes the duty of the creditor
order that the guarantor may make use of to: Exhaust all the property of the debtor pointed
the benefit of excussion, he must: out by the guarantor
a. Set it up against the creditor upon the If he fails to do so, he shall suffer the loss but
latter’s demand for payment from him; only to the extent of the value of the said
b. Point out to the creditor: property, for the insolvency of the debtor.
i. Available property of the debtor – the
guarantor should facilitate the Resort to all legal remedies includes accion
realization of the excussion since he pauliana, among others.
is the most interested in its benefit.
ii. Within the Philippine territory – Joinder of Guarantor and Principal as
excussion of property located abroad Parties Defendant
would be a lengthy and extremely General Rule: The guarantor, not being a joint
difficult proceeding and would not contractor with his principal, cannot be sued with
conform with the purpose of the his principal.
guaranty to provide the creditor with Exception: Where it would serve merely to
the means of obtaining the fulfillment delay the ultimate accounting of the guarantor or
of the obligation. if no different result would be attained if the
iii. Sufficient to cover the amount of the plaintiff were forced to institute separate actions
debt. against the principal and the guarantors.
3. If he is a judicial bondsman and sub- PROCEDURE WHEN CREDITOR SUES (Art.

surety (Art. 2084) –because he is solidarily 2062)
liable
4. Where a pledge or mortgage has been 1. Sent against the principal – The guarantor
given by him as a special security cannot be sued with his principal, much less
5. If he fails to interpose it as a defense alone, except in the cases mentioned in Art.
before judgment is rendered against him 2059 where the guarantor is not entitled to
the benefit of excussion.
DUTY OF CREDITOR TO MAKE PRIOR
DEMAND FOR PAYMENT FROM GUARANTOR • As a rule, the creditor may hold the
(Art. 2060) guarantor only after judgment has been
obtained against the principal debtor and
1. When demand to be made – only after the latter is unable to pay.
judgment on the debt for obviously the
exhaustion of the principal’s property cannot 2. Notice to guarantor of the action –
even begin to take place before judgment guarantor must be notified so that he may
has been obtained. appear, if he so desires, and set up defenses
2. Actual demand to be made – joining the he may want to offer
guarantor in the suit against the principal a. Guaranty appears – voluntary
debtor is not the demand intended by law. appearance does not constitute a
There must be an actual demand and not renunciation of his right to excussion.
judicial demand.
b. Guaranty does not appear –
DUTY OF THE GUARANTOR TO SET UP i. He cannot set up the defenses which,
BENEFIT OF EXCUSSION (Art. 2060) by appearing are allowed to him by
As soon as he is required to pay, guarantor must law; and
also point out to the creditor available property
ii. It may no longer be possible for him
to question the validity of the 3. Extent of liability of several guarantors –
judgment rendered against the debtor joint obligation: the obligation to answer for
the debt is divided among all of them. The
3. Hearing before execution can be issued guarantors are not liable to the creditor beyond
against the guarantor – a guarantor is the shares which they are respectively bound to
entitled to be heard before an execution can pay.
be issued against him where he is not a party Exception: Solidarity has been expressly
in the case involving his principal. stipulated
EFFECTS OF COMPROMISE (Art. 2063) Benefit of Excussion among Several

Compromise – a contract whereby the parties, Guarantors:
by making reciprocal concessions, avoid a
litigation or put an end to one already In order that the guarantor may be entitled to
commenced. the benefit of division, it is not required that he
point out the property of his co-guarantors.
1. Compromise between creditor and principal REASON: Obligation of the guarantor with respect
debtor benefits the guarantor but does not to his co-guarantors is not subsidiary but direct
prejudice him. and does not depend as to its origin on the
2. Compromise between guarantor and the solvency or insolvency of the latter.
creditor benefits but does not prejudice the
principal debtor. RIGHT TO INDEMNITY OR REIMBURSEMENT
(Art. 2066) (DELT)
REASON: A compromise binds only the parties
thereto and not third persons. Thus, it cannot 1. Total amount of the debt - The guarantor
prejudice the guarantor or debtor who was not has no right to demand reimbursement until
party to the compromise. But if it benefits a third he has actually paid the debt, unless by the
person, then the compromise may bind that third terms of the contract, he is given the right
person. before making payment.
2. Legal interest - It is immaterial that the
SUB-GUARANTOR’S RIGHT TO EXCUSSION debt did not earn interest for the creditor,
(Art. 2064) because the guarantor’s right to legal
Sub-guarantor enjoys the benefit of excussion interest is granted by law by virtue of the
with respect to: payment he has made, and is independent of
1. Principal debtor; and the creditor’s right to claim interest which
2. Guarantor was necessarily regulated by the stipulations
between him and the debtor.
REASON: He stands with respect to the guarantor 3. Expenses incurred by the guarantor -
on the same footing as the latter does with The expenses referred to are only those that
respect to the principal debtor. the guarantor has to satisfy in accordance
with law as a consequence of the guaranty.
BENEFIT OF DIVISION AMONG SEVERAL These expenses are limited to those incurred
GUARANTORS (Art. 2065) by the guarantor after having notified the
1. In whose favor applicable - should there be debtor that payment has been demanded of
several guarantors of only one debtor and for the him by the creditor.
same debt, the obligation to answer for the same Exception: The guarantor cannot demand
is divided among all. for reimbursement for litigation expenses,
2. Cannot be availed of if there are: when such expenses are due to its failure to
α. Two or more debtors of one debt, even if fulfill its obligation to pay upon demand.
they be bound solidarily, each with (Tuason vs. Machuca, GR No. L-22177,
different guarantors; or December 2, 1924)
β. Two or more guarantors of the same 4. Damages, if they are due.
debtor but for different debts
χ. If any of the circumstances enumerated Exceptions to Right to Indemnity or
in Art. 2059 should take place, as would Reimbursement
the benefit of exhaustion of the debtor’s
property.
1.
Where the guaranty is constituted without the NOTE: In case of an unenforceable contract, if
knowledge or against the will of the principal the debtor consents to the guarantor paying, the
debtor, the guarantor can recover only guarantor can seek reimbursement from the
insofar as the payment had been beneficial to debtor. If the debtor did not consent to the
the debtor guarantor paying, the guarantor cannot seek
2. Payment by a third person who does not reimbursement from the guarantor.
intend to be reimbursed by the debtor is EFFECT OF PAYMENT BY GUARANTOR
deemed to be a donation, which, however, BEFORE MATURITY (Art. 2069)
requires the debtor’s consent. But the
payment is in any case valid as to the Debtor’s obligation with a period –
creditor who has accepted it (Art. 1238) demandable only when the day fixed comes.
3. Waiver 1. The guarantor who pays before maturity is
not entitled to reimbursement since there is
GUARANTOR’S RIGHT TO SUBROGATION no necessity for accelerating payment.
(Art. 2067) 2. A contract of guaranty being subsidiary in
character, the guarantor is not liable for the
SUBROGATION transfers to the person debt before it becomes due.
subrogated, the credit with all the rights thereto Exception: The debtor will be liable if the
appertaining either against the debtor or against payment was made:
third persons, be they guarantors or possessors a. With his consent; or
of mortgages, subject to stipulation in b. Subsequently ratified (express or
conventional subrogation. implied) by him
1. Accrual, basis, and nature of right – right EFFECT OF REPEAT PAYMENT BY THE
of subrogation is necessary to enable the DEBTOR (Art. 2070)
guarantor to enforce the indemnity given in General Rule: Before the guarantor pays the
Art. 2066 creditor, he must first notify the debtor.
a. Arises by operation of law upon payment • If he fails to give notice and the debtor
by the guarantor repeats payment:
b. It is not a contractual right Guarantor’s Remedy: collect from the
c. The guarantor is subrogated, by virtue of creditor
the payment, to the right of the creditor, • No cause of action against the debtor for the
not those of the debtor. return of the amount paid by him.
• In a gratuitous guaranty – if guarantor was
2. When right not available – since prevented to notify because of a fortuitous
subrogation is the means of effectuating the event, and creditor becomes insolvent,
right of the guarantor to be reimbursed, it debtor shall reimburse guarantor.
cannot therefore be invoked in those cases
where the guarantor has no right to be Exception: The guarantor may still claim
reimbursed. reimbursement from the debtor in spite of lack of
notice if the following conditions are present:
EFFECT OF PAYMENT BY GUARANTOR a. The creditor becomes insolvent
WITHOUT NOTICE TO DEBTOR (Art. 2068) b. That guarantor was prevented by
a fortuitous event to advise the debtor of
When the guarantor pays the creditor, but the the payment
debtor has already paid the latter, then the c. The guaranty is gratuitous
debtor can set up against the guarantor the
defense of previous extinguishments of the RIGHT OF GUARANTOR TO PROCEED
obligation by payment. AGAINST DEBTOR BEFORE PAYMENT (Art.
2071)
Hence, guarantor must notify the debtor before General Rule: Guarantor has no cause of action
making payment. against the debtor until after the former has paid
the obligation.
REASON: The guarantor cannot be allowed,
through his own fault or negligence to prejudice Exceptions: Art. 2071 enumerates instances
or impair the rights or interests of the debtor. when the guarantor may proceed against the
debtor even before the payment. (PAID-SIT)
1. When he is sued for the payment; AFTER PAYMENT) DEBTOR EVEN
2. In case of insolvency of the principal BEFORE PAYMENT)
debtor; Provides for the Provides for the
3. When the debtor has bound himself to enforcement of the protection before he
relieve him from the guaranty within a rights of the guarantor has paid but after he
specified period, and this period has against the debtor has become liable –
expired; after he has paid the gives a protective
4. When the debt has become demandable, debt – gives a right of remedy before payment
by reason of the expiration of the period action after payment
for payment; Substantive right Preliminary remedy
5. After the lapse of ten years, when the Gives a right of action,
Remedy given seeks to
principal obligation has no fixed period which, without the
obtain from the
for its maturity, unless it be of such provisions of the other
guarantor “release from
nature that it cannot be extinguished might be worthless the guaranty or to
except within a period longer than ten demand a security that
years; shall protect him from
6. If there are reasonable grounds to fear any proceedings by the
that the principal debtor intends to creditor and from the
abscond; danger of insolvency of
7. If the principal debtor is in imminent the debtor.”
danger of becoming insolvent. Recovery of Surety against Indemnitor even
before Payment
Purpose: To enable the guarantor to take
measures for the protection of his interest in 1. Indemnity agreement for the benefit of
view of the probability that he would be called surety –not for the benefit of the creditor
upon to pay the debt.
Remedy to which the Guarantor Entitled 2. Indemnity agreement may be against
The guarantor cannot demand reimbursement actual loss as well as liability – such
for indemnity when he has not paid the agreement is enforceable and not violative of
obligation. any public policy
REMEDIES AVAILABLE:
1. To obtain release from the guaranty; or a. Indemnity against loss – indemnitor
2. To demand security that shall protect him will not be liable until the person to be
from: indemnified makes payment or sustains
a. Any proceedings by the creditor; and loss
b. Against the insolvency of the debtor. b. Indemnity against liability –
Guarantor’s remedies are alternative. He has the indemnitor’s liability arises as soon as the
right to choose the action to bring. liability of the person to be indemnified
has arisen without regard to whether or
Suit by Guarantor against Creditor before not he has suffered actual loss
Payment c. Such agreement valid - A stipulation in
The guarantor’s or surety’s action for release can an indemnity agreement providing that
only be exercised against the principal debtor the indemnitor shall pay the surety as
and not against the creditor. soon as the latter becomes liable to make
payment to the creditor under the terms
REASON: The creditor cannot be compelled to of the bond, regardless of whether the
release the guarantor before payment of his surety has made payment actually or not,
credit. Release of the guarantor imports an is valid and enforceable, and in
extinction of his obligation to the creditor, accordance therewith, the surety may
connoting remission or a novation by subrogation demand from the indemnitor even before
which requires the creditor’s assent. the creditor has paid.
ARTS. 2066 and 2071 Distinguished Where the principal debtors are
ART. 2066 ART. 2071 simultaneously the same persons who
(RIGHT OF (RIGHT OF executed the indemnity agreement, the
GUARANTOR TO GUARANTOR TO position occupied by them is that of a
REIMBURSEMENT PROCEED AGAINST principal debtor and indemnitor at the
same, and their liability being joint and The right of reimbursement is acquired ipso jure
several. without need of any prior cession from the
creditor by the guarantor.
GUARANTOR OF A THIRD PERSON AT DEFENSES AVAILABLE TO CO-GUARANTORS

REQUEST OF ANOTHER (Art. 2072) (Art. 2074)
The guarantor who guarantees the debt of an
absentee at the request of another has a right to General Rule: All defenses which the debtor
claim reimbursement, after satisfying the debt would have interposed against the creditor (i.e.
from: fraud, prescription, remission, illegality, etc.).
1. The person who requested him to be a Exception: Those which cannot be transmitted
guarantor; for being purely personal to the debtor.
2. The debtor
RIGHTS OF THE GUARANTOR AGAINST THE LIABILITY OF SUB-GUARANTOR IN CASE OF

DEBTOR (BRIB) INSOLVENCY OF GUARANTOR (Art. 2075)
1. Indemnification
2. Benefit of Subrogation Sub-guarantor is liable to the co-guarantors in
3. Benefit of Compromise the same manner as the guarantor whom he
4. Right to obtain or demand a security under guaranteed in case of the insolvency of the
Art. 2071 guarantor for whom he bound himself as sub-
guarantor.
BETWEEN CO-GUARANTORS
RIGHT TO CONTRIBUTION OF GUARANTOR CAUSES OF EXTINGUISHMENT OF
WHO PAYS GUARANTY (Art. 2076) (PL3CN-ARFP)
(Art. 2073)
General Rule: Guaranty being accessory, it is
Presumption of joint liability of several extinguished when principal obligation is
guarantors when there are: extinguished, the causes of which are:
1. Two or more guarantors 1. Payment or performance;
2. Same debtor 2. Loss of the thing due;
3. Same debt 3. Condonation or remission of the debt;
4. Confusion or merger of the rights of the
Effect: Each is bound to pay only his creditor and debtor;
proportionate share. 5. Compensation; and
6. Novation
When Art. 2073 Applicable: 7. Other causes:
1. When one guarantor has paid the debt to a. Annulment;
the creditor; b. Rescission;
2. Payment by such guarantor must have c. Fulfillment of a resolutory condition;
been made: d. Prescription
a. By virtue of a judicial demand (benefit
of division must have ceased); or Exception: The guaranty itself may be directly
b. Because the principal debtor is extinguished although the principal obligation
insolvent; still remains such as in the case of the release
3. Guarantor who paid is seeking of the guarantor made by the creditor.
reimbursement from each of his co-
guarantors the share which is Material Alteration of Principal Contract –
proportionately owing him. any agreement between the creditor and the
principal debtor which essentially varies the
Effect of Insolvency of Any Guarantor: terms of the principal contract without the
Follows the rule on solidary obligations: The consent of the surety, will release the surety
share of the insolvent guarantor shall be borne from liability.
by the others including the paying guarantor in
the same joint proportion. Such material alteration would constitute a
novation or change of the principal contract,
Accrual and Basis of Right: which is consequently extinguished. Upon such
extinguishments, the accessory contract to The debtor may become insolvent during the
guaranty is also terminated and the guarantor extension, thus depriving the guarantor of his
cannot be held liable on the new contract to right to reimbursement.
which he has not given his consent.
It doesn’t matter if the extension is:
When Alteration Material – where such a. Prejudicial or not or
change will have the effect of making the b. For a long or short period of time
obligation more onerous.
1. Imposes a new obligation or added burden on Consent of the guarantor is a must!
the party promising; or
2. Takes away some obligation already Extension must be based on some new
imposed, changing the legal effect of the agreement between the creditor and the
original contract and not merely the form principal debtor by virtue of which the creditor
thereof. deprives him of his claim.
RELEASE BY CONVEYANCE OF PROPERTY 1. Where obligation payable in

(Art. 2077) installments: where a guarantor is liable for
different payments:
General Rule: Payment is made in money.
Exception: Any substitute paid in lieu of money General Rule: An extension of time to one
which is accepted by the creditor extinguishes or more will not affect the liability of the
the obligation and in consequence, the guaranty. surety for the others.
Exception: When the unpaid balance has
• If the creditor accepts property in payment become automatically due by virtue of an
of a debt from the debtor, the guarantor is acceleration clause for failure to pay an
relieved from responsibility. This is also true installment.
even in case the creditor is subsequently
evicted from the property. Effect of exception: The act of the creditor
extending the payment of said installment,
In case of eviction: Eviction revives the without the guarantor’s consent, discharges the
principal obligation but not the guaranty. guarantor.
REASON: The creditor’s action against the debtor REASON: The extension constitutes an extension
is for eviction and this is different from what the of the payment of the whole amount of the
guarantor guaranteed. indebtedness
RELEASE OF GUARANTOR WITHOUT 2. Where consent to an extension is

CONSENT OF OTHERS (Art. 2078) waived in advance by the guarantor:
Such waiver is not contrary to law, nor to
EFFECT: The release benefits all to the extent of public policy
the share of the guarantor released.
Effect: Amounts to the surety’s consent to all
REASON: A release made by the creditor in favor the extensions granted.
of one of the guarantors without the consent of
the others may prejudice the others should a NOTE: The mere failure or neglect on the part of
guarantor become insolvent. the creditor to enforce payment or to bring an
action upon a credit, as soon as the same or any
RELEASE BY EXTENSION OF TERM GRANTED part of it matures, does not constitute an
BY CREDITOR TO DEBTOR (Art. 2079) extension of the term of the obligation, and
Release Without Consent of Guarantor: therefore, the liability of the guarantor is not
Creditor grants an extension of time to the extinguished.
debtor without the consent of the guarantor.
In order to constitute an extension
EFFECT: Guarantor is discharged from his discharging a surety, it should appear that
undertaking. the extension was: (DEW)
REASON: To avoid prejudice to the guarantor 1. For a Definite period

2.
Pursuant to an Enforceable agreement SURETYSHIP

between the principal and the creditor
3. Made Without the consent of the surety or SURETYSHIP is a relation which exists where
with a reservation of rights with respect to one person (principal) has undertaken an
him. obligation and another person (surety) is also
under a direct and primary obligation or other
• The contract must be one which precludes duty to the obligee, who is entitled to but one
the creditor from, or at least hinders him in, performance, and as between the two who are
enforcing the principal contract within the bound, the second, rather than the first should
period during which he could otherwise have perform.
enforced it, and precludes the surety from • If a person binds himself solidarily with the
paying the debt. principal debtor, the contract is called
suretyship and the guarantor is called a
• The law does not even grant the surety the surety.
right to sue the creditor for delay, as
protection against the risks of possible NATURE OF SURETY’S UNDERTAKING
insolvency of the debtor; but in view of the 1. Liability is contractual and accessory but
efficacy of the action on the contract against direct:
the surety, beginning with the date the 2. Liability is limited by terms of contract
obligation becomes due, his vigilance must 3. Liability arises only if principal debtor is
be exercised rather against the principal held liable
debtor. a. In the absence of collusion, the surety is
bound by a judgment against the
RELEASE WHEN GUARANTOR CANNOT BE principal event though he was not a party
SUBROGATED (Art. 2080) to the proceedings;
b. The creditor may sue, separately or
• If there can be no subrogation because of the together, the principal debtor and the
fault of the creditor, the guarantors are surety;
thereby released, even if the guarantors are c. A demand or notice of default is not
solidary. required to fix the surety’s liability
• If the creditor has acquired a lien upon the EXCEPTION: Where required by the
property of a principal, the creditor at once provisions of the contract of suretyship
becomes charged with the duty of retaining d. A surety bond is void where there is no
such security, or maintaining such lien in the principal debtor because such an
interest of the surety, and any release or undertaking presupposes that the
impairment of this security as a primary obligation is to be enforceable against
resource of payment of a debt, will discharge someone else besides the surety, and the
the surety to the extent of the value of the latter can always claim that it was never
property or lien released for there his intention to be the sole person
immediately arises a trust relation between obligated thereby.
the parties, and the creditor as trustee is
bound to account to the surety for the value NOTE: Surety is not entitled to
of the security in his hands. exhaustion
4. Undertaking is to creditor, not to
REASON: The act of one cannot prejudice debtor: The surety’s undertaking is that the
another. It also avoids collusion between the principal shall fulfill his obligation and that
creditor and the debtor or a third person. the surety shall be relieved of liability when
the obligation secured is performed.
DEFENSES AVAILABLE TO GUARANTOR EXCEPTION: Unless otherwise expressly
AGAINST CREDITOR (Art. 2081) provided.
General Rule: All defenses, which pertain to the
principal debtor and are inherent in the debt. NOTE: Surety is not entitled to notice of
principal’s default
Exception: Those which are purely personal to
the debtor. 5. Prior demand by the creditor upon
principal not required: Surety is not
NOTE: Art 2081 does not cover a surety.
A
exonerated by neglect of creditor to sue judicial bondsman and the sub-surety are not
principal entitled to the benefit of excussion.
Strictissimi Juris Rule Applicable Only to REASON: They are not mere guarantors, but
Accommodation Surety sureties whose liability is primary and solidary.
REASON: An accommodation surety acts
without motive of pecuniary gain and hence, Effect of negligence of creditor: Mere
--should be protected against unjust pecuniary negligence on the part of the creditor in
impoverishment by imposing on the principal, collecting from the debtor will not relieve the
duties akin to those of a fiduciary. surety from liability.
This rule will apply only after it has been ========================

definitely ascertained that the contract is one of ==============
suretyship or guaranty.
TOPIC UNDER THE SYLLABUS:
Strictissimi Juris Rule Not Applicable to D. Pledge
Compensated Sureties 1. Definition
2. Kinds
REASONS: 3. Essential requirements
1. Compensated corporate sureties are business 4. Obligation of pledge
association organized for the purpose of 5. Rights of pledgor
assuming classified risks in large numbers,
for profit and on an impersonal basis.
6. Perfection (Arts. 2093, 2096)
2. They are secured from all possible loss by 7. Foreclosure (Arts. 2112, 2115)
adequate counter-bonds or indemnity 8. Pledge by operation of law (Art.
agreements. 2121-2122)
3. Such corporations are in fact insurers and in 9. Distinguished from chattel
determining their rights and liabilities, the mortgage (Arts. 2140, 1484)
rules peculiar to suretyship do not apply.
========================
LEGAL AND JUDICIAL BONDS ==============
MEANING AND FORM OF BOND (Art. 2082) PROVISIONS COMMON TO PLEDGE AND
MORTGAGE (Arts. 2085-2123)
Bond – an undertaking that is sufficiently
secured, and not cash or currency Essential Requisites to Contracts of
Pledge and Mortgage: (FARCAS)
Bondsman – a surety offered in virtue of a 1. Constituted to secure the fulfillment of a
provision of law or a judicial order. principal obligation
2. Pledgor or mortgagor be the absolute
Qualifications of personal bondsman: (SIC) owner of the thing pledged or mortgaged
1. He possesses integrity; 3. The persons constituting the pledge or
2. He has the capacity to bind himself; mortgage have the free disposal of their
3. He has sufficient property to answer for the property, and in the absence thereof, that
obligation which he guarantees. they be legally authorized for the purpose
4. Cannot exist without a valid obligation
PLEDGE OR MORTGAGE IN LIEU OF BOND 5. Debtor retains the ownership of the thing
(Art. 2083) given as a security
6. When the principal obligation becomes due,
Guaranty or suretyship is a personal security. the thing in which the pledge or mortgage
Pledge or mortgage is a property or real security. consists may be alienated for the
If the person required to give a legal or judicial payment to the creditor.
bond should not be able to do so, a pledge or
mortgage sufficient to cover the obligation shall Important Points
be admitted in lieu thereof. 1. Future property cannot be pledged or
BONDSMAN NOT ENTITLED TO EXCUSSION mortgaged
(Art. 2084) 2. Pledge/mortgage executed by one who is not
the owner of the property pledged or
•
mortgaged is without legal existence and Effect on Security Contract

registration cannot validate it. Nullity of the stipulation does not affect
3. Mortgage of a conjugal property by one of validity and efficacy of the principal contract
the spouses is valid only as to ½ of the entire
property Important Points
4. In case of property covered by Torrens title, a 1. Debtor -owner bears the risk of loss of the
mortgagee has the right to rely upon what property
appears in the certificate of title and does not 2. Pledge or mortgage is indivisible
have to inquire further. Exceptions to the rule of indivisibility:
5. Pledgor or mortgagor has free disposal of a. Where each one of several things
property guarantees determinate portion of credit
6. Thing pledged or mortgaged may be b. Where only portion of loan was
alienated. released
7. Creditor not required to sue to enforce his Example: X borrowed 80k from the bank
credit and he mortgaged his 100 ha. property.
8. Pledgor or mortgagor may be third person Lender was only able to release 40k due
9. The liability of an accommodation pledgor or to CB restrictions. The Court held that the
mortgagor extends only to the property bank can only foreclose on 50% of the
pledged or mortgaged. mortgaged land (50 ha.) Central Bank
v. CA, [139 SCRA 46]
PLEDGE MORTGAGE c. Where there was failure of
Constituted on Constituted on consideration
movables immovables
Property is delivered Delivery not necessary 3. The rule that real property, consisting of
to the pledgee, or by several lots should be sold separately,
common consent to a applies to sales in execution, and not to
3rd person foreclosure of mortgages
4. The mere embodiment of a real estate
Not valid against 3rd Not valid against 3rd
mortgage and a chattel mortgage in one
persons unless a persons if not
document does not have the effect of fusing
description of the registered
both securities into an indivisible whole
thing pledged and
5. Contract of pledge or mortgage may secure
the date of the
all kinds of obligation, be they pure or subject
pledge appear in a
to a suspensive or resolutory condition
public instrument
6. A promise to constitute pledge or mortgage
gives rise only to a personal right binding
Right of Creditor where Debtor fails to
upon the parties and creates no real right in
Comply with his Obligation
the property. What exists is only a right of
1. Creditor is merely entitled to move for the
action to compel the fulfillment of the
sale of the thing pledged or mortgaged with
promise, but there is no pledge or mortgage
the formalities required by law in order to
yet.
collect
7. Under RPC, estafa is committed by a person
2. Creditor cannot appropriate to himself the
who, pretending to be the owner of any real
thing nor can he dispose of the same as
property, shall convey, sell, encumber or
owner.
mortgage the same knowing that the real
property is encumbered shall dispose of the
Prohibition against pactum commissorium
same as unencumbered. It is essential that
• Stipulation is null and void - stipulation
fraud or deceit be practiced upon the vendee
where thing pledged or mortgaged shall at the time of the sale.
automatically become the property of the
creditor in the event of nonpayment of the PLEDGE (Arts. 2093-2123)
debt within the term fixed
PLEDGE is a contract by virtue of which the
• Requisites of pactum commissorium: debtor delivers to the creditor or to a third
a. There should be a pledge or mortgage person a movable or document evidencing
b. There should be a stipulation for an incorporeal rights for the purpose of securing the
automatic appropriation by the creditor of fulfillment of a principal obligation with the
the property in the event of nonpayment
understanding that when the obligation is alienation, but the latter shall continue in
fulfilled, the thing delivered shall be returned possession
with all its fruits and accessions.
6. Contract of pledge gives the creditor the right
Kinds of Pledge: to retain the thing in his possession or in that
1. Voluntary or conventional - created by of a third person to whom it has been
agreement of the parties delivered, until the debt is paid
2. Legal - created by operation of law
7. Creditor :
Characteristics of Pledge: a. Shall take care of the thing pledged with
1. Real - perfected by delivery the diligence of a good father of a family
2. Accessory - has no independent existence
of its own b. Has the right to the reimbursement of the
3. Unilateral - creates obligation solely on the expenses made for its preservation and is
part of the creditor to return the thing subject liable for its loss or deterioration by
upon the fulfillment of the principal obligation reason of fraud, negligence, delay or
4. Subsidiary - obligation incurred does not violation of the terms of the contract, and
arise until the fulfillment of the principal not due to fortuitous event
obligation
c. May bring the actions which pertain to
Cause or Consideration in Pledge the owner of the thing in order to recover
1. Principal obligation – in so far as the it from, or defend it against a 3rd person
pledgor is concerned
2. Compensation stipulated for the pledge d. Cannot use the thing without the
or mere liberality of the pledgor- if authority of the owner, and if he should
pledgor is not the debtor do so, or misuse the thing, the owner
may ask that it be judicially or
PROVISIONS APPLICABLE ONLY TO PLEDGE extrajudicially deposited
1. Transfer of possession to the creditor or to e. May use the thing if it is necessary for the
third person by common agreement is preservation of the thing (e.g. car has to
essential in pledge be driven once in a while)
a. ACTUAL DELIVERY is important
b. CONSTRUCTIVE delivery or symbolic
f. May either claim another thing in pledge
delivery of the key to the warehouse is or demand immediate payment of the
sufficient to show that the depositary
principal obligation if he is deceived on
appointed by common consent of the the substance or quality of the thing
parties was legally placed in possession.
8. Pledgee:
2. All movables within commerce of men may
a. Take care of the thing with diligence of a
be pledged as long as susceptible of good father of a family.
possession
b. Cannot deposit the thing pledged with a
3. Incorporeal right may be pledged. The
third person, unless there is a stipulation
instruments pledged shall be delivered to the authorizing him to do so
creditor and if negotiable, must be indorsed.
c. Is responsible for the acts of his agents or
4. Pledge shall take effect against 3rd persons
employees with respect to the thing
only if the ff appears in a public instrument: pledged
a. Description of the thing pledged
b. Date of the pledge
d. Has no right to use the thing or to
appropriate the fruits without the
5. Thing pledged may be alienated by the
authority of the owner
pledgor or owner only if with the consent of
the pledgee. Ownership of the thing pledged
is transmitted to the vendee or transferee as e. May cause public sale of the thing
soon as the pledgee consents to the pledged if, without fault on his part, there
is danger of destruction, impairment or
4.
diminution in value of the thing. The The sale must be made with the intervention of a
proceeds of the auction shall be a notary public
security for the principal obligation.
EFFECT OF THE SALE OF THE THING
9. Pledgor: PLEDGED
a. Has the responsibility for flaws of the 1. Extinguishes the principal obligation
thing pledged. whether the price of the sale is more or less
than the amount due
b. Cannot ask for the return of the thing 2. If the price is more than amount due, the
against the will of the creditor, unless and debtor is not entitled to the excess unless
until he has paid the debt and its interest, the contrary is provided
with expenses in a proper case 3. If the price of the sale is less, neither is the
creditor entitled to recover the deficiency.
c. Is allowed to substitute the thing which is Contrary stipulation is void.
in danger of destruction or impairment
without any fault on the part of the Legal Pledges
pledgee, with another thing of the same
kind and quality 1. Necessary expenses shall be refunded to
every possessor, but only possessor in good
d. May require that the thing be deposited faith may retain the thing until he has been
with a 3rd person if through the reimbursed
negligence or willful act of the pledgee
the thing is in danger of being lost or Useful expenses shall be refunded only to the
impaired possessor in good faith with the same right of
retention, the person who has defeated him in
EXTINGUISHMENT OF PLEDGE (R2P23A) the possession having the option of refunding
the amount of the expenses or of paying the
1. If the thing pledged is returned by the increase in value which the thing may have
pledgee to the pledgor or owner, pledge is acquired and by reason thereof. (Art. 546)
extinguished.
2. A statement in writing by the pledgee that he 2. He who has executed work upon a movable
renounces or abandons the pledge is has a right to retain it by way of pledge until
sufficient to extinguish it. For this purpose, he is paid. (Art. 1731)
neither the acceptance by the pledgor or
owner, nor the return of the thing pledged is 3. The agent may retain the things which are
necessary, the pledgee becoming a the objects of agency until the principal
depositary. effects the reimbursement and pays the
3. If subsequent to the perfection of the pledge, indemnity. (Art. 1914)
the thing is in the possession of the pledgor
or owner, there is prima facie presumption 4. The laborer’s wages shall be a lien on the
that the thing has been returned by the goods manufactured or the work done. (Art.
pledgee. 1707)
4. If the thing is in the possession of 3rd person
who has received it from the pledgor or
owner after the constitution of the pledge, Special Laws apply to pawnshops and
there is prima facie presumption that the establishments which are engaged in making
thing has been returned by the pledgee loans secured by pledges. Provisions of the Civil
5. Payment of the debt Code shall apply subsidiarily.
6. Sale of the thing pledged at public auction
========================
Formalities required in sale by a creditor if
==============
credit not paid in due time:
1. The debt is due and unpaid TOPIC UNDER THE SYLLABUS:
2. The sale must be at a public auction E. Real Mortgage
3. There must be notice to the pledgor and 1. Definition and characteristics
owner, stating the amount due, and 2. Essential requisites
3. Foreclosure
3.
Eq
uit
======================== ab
le – one which, although it lacks the proper
============== formalities of a mortgage shows the intention of
the parties to make the property as a security for
MORTGAGE a debt (governed by Arts. 1365, 1450, 1454,
1602, 1603, 1604 and 1607)
REAL MORTGAGE (Arts. 2124-2131) is a
contract whereby the debtor secures to the ESSENTIAL REQUISITES OF MORTGAGE:
creditor the fulfillment of a principal obligation, (FADVAP)
specially subjecting to such security immovable 1. Constituted to secure the fulfillment of a
property or real rights over immovable property principal obligation
in case the principal obligation is not complied 2. Mortgagor be the absolute owner of the thing
with at the time stipulated. pledged or mortgaged
3. Mortgagor has free disposal of the property,
OBJECTS OF REAL MORTGAGE: and in the absence thereof, that he be legally
1. Immovables authorized for the purpose
2. Alienable real rights in accordance with the 4. Cannot exist without a valid obligation
laws, imposed upon immovables. 5. When the principal obligation becomes due,
the thing in which the mortgage consists may
General Rule: Future property cannot be be alienated for the payment to the creditor.
object of mortgage 6. Appears in a public document duly recorded
Exception: (AFTER-ACQUIRED in the Registry of Property to be validly
PROPERTIES) A stipulation subjecting to the constituted
mortgage lien, improvements which the
• If the instrument is not recorded, the
mortgagor may subsequently acquire, install,
mortgage is nevertheless binding
or use in connection with the real property
between the parties.
already mortgaged belonging to the
LEGAL MORTGAGE: the persons in whose favor
mortgagor is valid People’s Bank and
the law establishes a mortgage have no other
Trust Co. v. Dahican Lumber Co., [20
right than to demand the execution and the
SCRA 84 (1967)]
recording of the document in which the
mortgage is formalized.
Example: X owns a factory. In that factory, he
installed a machine and subsequently
INCIDENTS OF REGISTRATION OF
mortgaged it. The parties may validly
MORTGAGE
stipulate that if the original machine is
1. Mortgagee entitled to registration of
replaced, the replacement shall be subject to
mortgage as a matter of right
the mortgage. The reason for this is that
2. Proceedings for registration do not determine
after-acquired properties are understood to
validity of mortgage or its effect
be replacements, as the original machine
3. Registration is without prejudice to better
may be subject to wear and tear.
right of third parties
4. Mortgage deed once duly registered forms
Important Points
part of the records for the registration of the
1. As a general rule, the mortgagor retains
property mortgaged
possession of the property. He may deliver
5. Mortgage by surviving spouse of his/her
said property to the mortgagee without
undivided share of conjugal property can be
altering the nature of the contract of
registered
mortgage.
2. It is not an essential requisite that the
Effect of Invalidity of Mortgage on principal
principal of the mortgage credit bears
obligation
interest, or that the interest as compensation
1. Principal obligation remains valid
for the use of the principal and the enjoyment
2. Mortgage deed remains as evidence of a
of its fruits be in the form of a certain percent
personal obligation
thereof.
Effect of Mortgage
Kinds of Mortgage:
1. Creates right in rem or real rights. A lien
1. Voluntary
inseparable from the property mortgaged,
2. Legal
enforceable against the whole world as long
as it is registered. If not registered the mortgage, until the full amount of the
third party must know of the mortgage. advancements is paid.
2. Creates merely an encumbrance. The law
considers void any stipulation forbidding the ALIENATION OR ASSIGNMENT OF
owner from alienating the immovable MORTGAGE CREDIT
mortgaged (Art. 2130). The mortgage credit is a real right which may be
• The mortgagor’s default does not operate alienated by the mortgagee without need to
to vest in the mortgagee the ownership of obtain the consent of the debtor. Alienation of
the encumbered property. the mortgage credit is valid even if it is not
• His failure to redeem the property does registered. Registration is necessary only to
not automatically vest ownership of the affect third persons.
property to the mortgagee.
Laws Governing Mortgage
EXTENT OF MORTGAGE (AIGRiPE) 1. New Civil Code
A real estate mortgage constituted on 2. P.D. 1952
immovable property is not limited to the property 3. Revised Administrative Code
itself but also extends to its: 4. R.A. 4882, as regards aliens becoming
1. Accessions mortgages
2. Improvements
3. Growing fruits Foreclosure of Mortgage is the remedy
4. Rents or income available to the mortgagee by which he subjects
5. Proceeds of insurance should the property be the mortgaged property to the satisfaction of the
destroyed obligation to secure which the mortgage was
6.Expropriation value of the property should it be given.
expropriated.
• A foreclosure sale retroacts to the date of
To exclude them, it is necessary that there be registration of the mortgage and that a
an express stipulation to that effect. person who takes a mortgage in good faith
and for valuable consideration, the record
But if the mortgaged estate passes into the showing clear title to the mortgagor, will be
hands of a third person, the mortgage does not protected against equitable claims on the
extend to any machinery, object, chattel or title in favor of third persons of which he had
construction which he may have brought or no actual or constructive notice St. Dominic
placed there and which such third person may Corporation v. IAC, 151 SCRA 577 (1987)
remove whenever it is convenient for him to do • Mere inadequacy of the price obtained at the
so. sheriff’s sale will not be sufficient to set aside
MORTGAGE TO SECURE FUTURE the sale unless “the price is so inadequate as
ADVANCEMENTS (BLANKET OR DRAGNET to shock the conscience of the court” taking
CLAUSE) into consideration the peculiar circumstances
Blanket/Dragnet Clause - one which is specifically attendant thereto. Sulit v. CA, 268 SCRA
phrased to subsume all debts of past or future 441 (1997)
origin. • The action to recover a deficiency after
foreclosure prescribes after 10 years from the
General Rule: There must be a stipulation for time the right of action accrues (Arts. 1142 &
the inclusion of future advancements. 1144)
Mortgage with a dragnet clause enable the JUDICIAL FORECLOSURE (governed by Rule 68
parties to provide continuous dealings, the of Rules of Court): (J-PACE-PC)
nature or extent of which may not be known or 1. Judicial action for the purpose in the proper
anticipated at the time, and they avoid the court which has jurisdiction over the area
expense and inconvenience of executing a new wherein the real property involved or a
security on each new transaction. portion thereof is situated
2. Court order to mortgagor to pay mortgage
A mortgage given to secure future advancements debt with interest and other charges within a
is a continuing security and is not discharged period of not less than 90 days nor more than
by the repayment of the amount named in the 120 days from the entry of judgment
3. 1.
Fil
Sale to the highest bidder at public auction, ing of application before the Executive Judge
should the mortgagor fail to pay at the time through the Clerk of Court
directed.
2. Clerk of Court will examine whether the
Confirmation of sale, which operates to divest requirements of the law have been complied
the rights of all parties in the action and to vest with, that is, whether the notice of sale has
their rights to the purchase, subject to the right been posted for not less than 20 days in at
of redemption allowed by law least 3 public places of the municipality or
city where the property is situated, and if the
4. Execution of judgment same is worth more than P400.00, that such
notice has been published once a week for at
5. Application of proceeds of sale to: least 3 consecutive weeks in a newspaper of
a. Costs of the sale; general circulation in the city or municipality
b. Amount due the mortgagee;
c. Claims of junior encumbrancers or 3. The certificate of sale must be approved by
persons holding subsequent mortgages in the Executive Judge
the order of their priority; and
d. The balance, if any shall be paid to the 4. In extrajudicial foreclosure of real mortgages
mortgagor in different locations covering one
indebtedness, only one filing fee
6. Sheriff’s certificate is executed, corresponding to such debt shall be collected
acknowledged and recorded to complete the
foreclosure 5. The Clerk of Court shall issue certificate of
payment indicating the amount of
Nature of Judicial Foreclosure Proceedings indebtedness, the filing fees collected, the
1. Quasi in rem action mortgages sought to be foreclosed, the
2. Foreclosure is only the result or incident of description of the real estates and their
the failure to pay debt respective locations
3. Survives death of mortgagor
6. The notice of sale shall be published in a
EXTRAJUDICIAL FORECLOSURE (governed by newspaper of general circulation
Act No. 3135, as amended)
1. Express authority to sell is given to the 7. The application shall be raffled among all
mortgagee sheriffs
2. Authority is not extinguished by death of
mortgagor or mortgagee 8. After the redemption period has expired, the
3. Public sale should be made after proper Clerk of Court shall archive the records
notice (posting and publication)
4. Surplus proceeds of foreclosure sale belong 9. No auction sale shall be held unless there are
to the mortgagor or his assigns at least 2 participating bidders, otherwise the
5. Debtor has the right to redeem the property sale shall be postponed to another date. If on
sold within 1 year from and after the date of the new date there shall not be at least 2
sale bidders, the sale shall then proceed. The
6. Remedy of party aggrieved by foreclosure is names of the bidders shall be reported by the
a petition to set aside sale and cancellation of Sheriff or the Notary Public who conducted
writ of possession the sale to the Clerk of Court before the
7. Republication is necessary for the validity of issuance of the certificate of sale
a postponed foreclosure sale (parties have no
right to waive the publication requirement) Right of mortgagee to recover deficiency
1. Mortgagee is entitled to recover deficiency
Procedure for Extrajudicial Foreclosure of 2. If the deficiency is embodied in a judgment, it
Real Estate Mortgage (Act No. 3135 ) is referred to as deficiency judgment
& 3. Action for recovery of deficiency may be filed
Chattel Mortgage even during redemption period
(Act No. 1508, A.M. N0. 99-10-05-0; January 4. Action to recover prescribes after 10 years
15, 2000) from the time the right of action accrues
(ARC-DIN-REA)
1.
E
Nature of power of foreclosure by quity of redemption: right of the
extrajudicial sale mortgagor to redeem the mortgaged
1. Conferred for mortgagee’s protection property after his default in the performance
2. An ancillary stipulation supported by the of the conditions of the mortgage but before
same cause or consideration for the confirmation of the sale.
mortgage a. Applies to judicial foreclosure of
3. A prerogative of the mortgagee real mortgage and chattel mortgage
foreclosure
Stipulation of Upset Price or “tipo” b. A second mortgagee acquires only
A stipulation of minimum price at which the the equity of redemption vested in the
property shall be sold to become operative in the mortgagor, and his rights are strictly
event of a foreclosure sale at public auction is subordinate to the superior lien of the
NULL and VOID first mortgagee.
NOTE: Redemption of the banking
Effect of inadequacy of price in foreclosure institutions is allowed within 1 year from
sale confirmation of sale
1. Where there is right to redeem
General Rule: Inadequacy of price is 2. Right of redemption: right of the
immaterial because the judgment debtor mortgagor to redeem the property within a
may redeem the property certain period after it was sold for the
Exception: The price is so inadequate as to satisfaction of the debt
shock the conscience of the court taking into a. Applies only to extrajudicial
consideration the peculiar circumstances foreclosure of real mortgage
2. Property may be sold for less than its fair NOTE: The right of redemption, as long as within
market value upon the theory that the lesser the period prescribed, may be exercised
the price the easier for the owner to redeem irrespective of whether or not the mortgagee has
subsequently conveyed the property to some
3. The value of the mortgaged property has no other party Sta. Ignacia Rural Bank, Inc. v.
bearing on the bid price at the public auction, CA, 230 SCRA 513 (1994)
provided that the public auction was
regularly and honestly conducted A sale by the mortgagor to a third party of the
mortgaged property during the period of
Waiver of security by creditor redemption transfers only the right to redeem
1. Mortgagee may waive right to foreclose his the property and the right to possess, use, and
mortgage and maintain a personal action for enjoy the same during the period. The judgment
recovery of the indebtedness debtor remains in possession of the property
2. Remedies are alternative, not cumulative. foreclosed and sold during the period of
3. Options in case the debtor dies: redemption, but he cannot make a conveyance
a. To waive mortgage and claim of the ownership of the property, since it belongs
entire debt from the mortgagor’s estate to the purchaser at the foreclosure sale Dizon v.
as an ordinary claim Gaborro, 83 SCRA 688 (1978)
b. To judicially foreclose mortgage
and prove any deficiency PERIOD OF REDEMPTION
c. To rely on the mortgage Extra-judicial (Act No. 3135)
exclusively without filing a claim for a. Natural person – 1 year from registration
deficiency of the certificate of sale with Registry of
NOTE: Foreclosure retroacts to the date of Deeds
registration of mortgage b. Juridical person – same rule as natural
person
REDEMPTION is a transaction by which the c. Juridical person (mortgagee is bank) – 3
mortgagor reacquires or buys back the property months after foreclosure or before
which may have passed under the mortgage or registration of certificate of foreclosure
divests the property of the lien which the whichever is earlier (Sec. 117 of General
mortgage may have created. Banking Law)
KINDS OF REDEMPTION
2.
H
Judicial – before confirmation of the sale by the e is entitled to the payment of his credit the
court excess of the proceeds of the auction sale.
3. In case the credit of the first mortgagee has
Periods of Judicial Extrajudicial absorbed the entire proceeds of the sale, the
redemption Foreclosure Foreclosure second mortgage is extinguished, since the
Mortgage: BANKS NON- BANKS NON-
mortgage cannot be enforced beyond the
BANK BANKS
S
total value of the mortgaged property.
Individual 1 year 1 year 1 year
debtors/mortga from X from from Mortgagee in Possession – one who has
gors registrati registrati registrati lawfully acquired actual or constructive
on of on of on of possession of the premises mortgaged to him,
sale sale sale
standing upon his rights as mortgagee and not
Juridical persons 1 year X Until 1 year
as from registrati from claiming under another title, for the purpose of
debtors/mortga registrati on of registrati enforcing his security upon such property or
gors on of certificat on of making its income help to pay his debt
sale e of sale sale
or 3 RIGHTS AND OBLIGATIONS OF MORTGAGEE
months
from sale
IN POSSESSION
whichev 1. Similar to an antichresis creditor – entitled to
er is retain such possession until the indebtedness
earlier is satisfied and the property redeemed.
2. Without right to reimbursement for useful
NOTE: Allowing redemption after the lapse of the expenses
statutory period when the buyer at the
foreclosure sale does not object but even RIGHT OF PURCHASER TO WRIT OF
consents to the redemption, will uphold the POSSESSION
policy of the law which is to aid rather than Writ of Possession – order whereby the sheriff
defeat the right of redemption Ramirez v. CA, is commanded to place in possession of real or
219 SCRA 598 (1993) personal property the person entitled thereto
such as when a property is extrajudicially
AMOUNT OF THE REDEMPTION PRICE: foreclosed.
1. Mortgagee is not a bank (Act No. 3135 in
relation to Sec. 28, Rule 39 of Rules of Court) The issuance of the writ of possession in an
a. Purchase price of the property extrajudicial foreclosure is merely a ministerial
b. 1% interest per month on the purchase function.
price The purchaser at the foreclosure sale is entitled
c. Taxes paid and amount of purchaser’s as of right to a writ of possession.
prior lien, if any, with the same rate of Before lapse of redemption period – file an
interest computed from the date of ex parte application and file a bond
registration of sale, up to the time of
redemption After lapse of redemption period – file an ex
2. Mortgagee is a bank (GBL 2000) parte application and no need for a bond
a. Amount due under the mortgage deed
b. Interest ========================
c. Cost and expenses ==============
NOTE: Redemption price in this case is
reduced by the income received from the F. Antichresis
property 1. Definition and Characteristics
2. Obligations of Antichretic
Junior Mortgagees Creditor
1. After the ========================
foreclosure sale, there remains in the second
==============
mortgagee a mere right of redemption. His
remedy is limited to the right to redeem by
ANTICHRESIS
paying off the debt secured by the first
(Arts. 2132-2139)
mortgage.
ANTICHRESIS is a contract whereby the creditor NOTE: The parties, however, may agree on an
acquires the right to receive the fruits of an extrajudicial foreclosure in the same manner as
immovable of the debtor, with the obligation to they are allowed in contracts of mortgage and
apply them to the payment of the interest, if pledge. Tavera v. El Hogar Filipino, Inc. [68
owing, and thereafter to the principal of the Phil 712]
credit.
A stipulation authorizing the antichretic creditor
CHARACTERISTICS to appropriate the property upon the non-
1. Accessory contract – it secures the payment of the debt within the agreed period is
performance of a principal obligation void (Art. 2088)
Formal contract – it must be in a specified form
to be valid (Art. 2134) ========================
==============
SPECIAL REQUISITES:
1. Only the fruits of an immovable property
2. Delivery of the immovable is necessary for G. Chattel Mortgage
the creditor to receive the fruits and not that 1. Definition and characteristics
the contract shall be binding 2. Registration
3. Amount of principal and interest must be ========================
specified in writing (otherwise, void) ==============
4. Express agreement that debtor will give
possession of the property to creditor and CHATTEL MORTGAGE
that the latter will apply the fruits to the CHATTEL MORTGAGE (Arts. 2140-2141) is a
interest, if any, then to the principal of his contract by virtue of which a personal property is
credit recorded in the Chattel Mortgage Register as
security for the performance of an obligation.
NOTE: The obligation to pay interest is not NOTE: If the movable, instead of being recorded
essential in a contract of antichresis, there being is delivered to the creditor, it is a pledge and not
nothing in the Code to show that antichresis is a chattel mortgage.
only applicable to securing the payment of
interest-bearing loans. On the contrary, CHATTEL MORTGAGE PLEDGE
antichresis is susceptible of guaranteeing all Involves movable Involves movable
kinds of obligations, pure or conditional property property
Delivery of the Delivery of the
OBLIGATIONS OF ANTICHRETIC CREDITOR: personal property is personal property is
(FAT-P) NOT necessary necessary
1. To pay taxes and charges on the estate, Registration is Registration is NOT
including necessary expenses necessary for validity necessary for validity
NOTE: Creditor may avoid said obligation by: Procedure: Sec 14 of Procedure: Art 2112 of
a. Compelling debtor to reacquire Act no 1508, as Civil Code
enjoyment of the property amended
b. By stipulation to the contrary If the property is If the property is sold,
2. To apply all the fruits, after receiving them, foreclosed, the excess the debtor is not
to the payment of interest, if owing, and over the amount due entitled to the to the
thereafter to the principal goes to the debtor excess UNLESS it is
3. To render an account of the fruits to the otherwise agreed or in
debtor case of legal pledge
4. To bear the expenses necessary for its Creditor is entitled to Creditor is not entitled
preservation and repair recover deficiency from to recover deficiency
the debtor EXCEPT if it notwithstanding any
REMEDIES OF CREDITOR IN CASE OF NON- is a security for the stipulation to the
PAYMENT OF DEBT purchase of personal contrary
1. Action for specific performance property in
2. Petition for the sale of the real property as in installments
a foreclosure of mortgages under Rule 68 of
the Rules of Court
Laws Governing Chattel Mortgage on such mortgage and the costs and
1. Chattel Mortgage Law, Act No. 1508, as expenses incurred by such breach of
amended condition before the sale
2. Civil Code
3. Revised Administrative Code Right of Mortgagee to Possession
4. Revised Penal Code 1. Before default, mortgagee is not entitled to
5. Ship Mortgage Decree of 1978 (P.D. 1521) the possession of the property (otherwise, it
governs mortgage of vessels of domestic will become a pledge)
ownership 2. When default occurs and the creditor desires
to foreclose, he has the right to take the
Affidavit of Good Faith - An oath in a contract property.
of chattel mortgage wherein the parties 3. If the debtor refuses to surrender the
"severally swear that the mortgage is made for property, the creditor’s remedy is to institute
the purpose of securing the obligation specified an action to effect judicial foreclosure or to
in the conditions thereof and for no other secure possession preliminary to sale.
purposes and that the same is a just and valid • The creditor cannot take the property by
obligation and one not entered into for the force nor can the sheriff seize the property.
purpose of fraud.”
• Not essential to the validity of the FORECLOSURE OF CHATTEL MORTGAGE
mortgage but only transforms a valid one 1. Public sale
into a preferred one 2. Private sale – there is nothing illegal, immoral
• Absence vitiates a mortgage only as or against public order in an agreement for
against third persons without notice the private sale of the personal properties
NOTE: A chattel mortgage can only cover covered by chattel mortgage
obligations existing at the time the mortgage is
constituted. A mortgage that contains a Period to Foreclose
stipulation in regard to future advances in the 1. After 30 days from the time the condition was
credit will take effect only from the date the broken
same are made and not from the date of the 2. The 30-day period is the minimum period
mortgage Jaca v. Davao Lumber Co., 113 after violation of the mortgage condition for
SCRA 107 (1982) the creditor to cause the sale at public
auction with at least 10 days notice to the
EFFECT OF REGISTRATION mortgagor and posting of public notice of
1. Creates real rights – binding notice and time, place, and purpose of such sale, and is
symbolical possession a period of grace for the mortgagor, to
2. Adds nothing to mortgage discharge the obligation.
3. After the sale at public auction, the right of
NOTE: Registration of assignment of mortgage is redemption is no longer available to the
not required mortgagor.
RIGHT OF REDEMPTION Civil Action to Recover Credit

• When the condition of a chattel mortgage is 1. Independent action not required
broken, the ff may redeem: 2. Mortgage lien deemed abandoned by
a. Mortgagor; obtaining a personal judgment (civil action to
b. Person holding a subsequent mortgage; recover amount of loan)
c. Subsequent attaching creditor.
Right of Mortgagee to Recover Deficiency
Redemption can be done within 30 days from the 1. Where mortgage foreclosed: creditor may
time the condition is broken. maintain action for deficiency although
Chattel Mortgage Law is silent on this point.
• An attaching creditor who so redeems shall Reason is chattel mortgage is only given as a
be subrogated to the rights of the mortgagee security and not as payment of the debt.
and entitled to foreclose the mortgage in the 2. Where mortgage constituted as security
same manner that the mortgagee could for purchase of personal property
foreclose it payable in installments: no deficiency
judgment can be asked and any contrary
• The redemption is made by paying or
agreement shall be void
delivering o the mortgagee the amount due
3.
Where mortgaged property subsequently Negotiorium Gestio (Art 2144)

attached and sold: mortgagee is entitle to
deficiency judgment in an action for specific • One who voluntarily takes charge of the
performance agency/management of the business or
property of another (without any power
Application of Proceeds of Sale from the latter), is obliged to continue
1. Costs and expenses of keeping and sale such agency or management until:
2. Payment of the obligation o The termination of the affair or its
3. Claims of persons holding subsequent incidents or
mortgages in their order o He has required the person
4. Balance, if any, shall be paid to the concerned to substitute him (if the
mortgagor, or person holding under him owner is in a position to do so)
• However, this juridical relation does not
========================= arise in the following:
============= o When the property or business is
TOPIC UNDER THE SYLLABUS: NOT neglected or abandoned
H. Concurrence and Preference of o If the manager has been impliedly
Credits authorized by the owner
1. Solutio Indebiti
2. Negotiorum Gestio =========================
========================= =============
============= TOPIC UNDER THE SYLLABUS:
I. Concurrence and Preference of
Solutio Indebiti and Negotiorium Gestio Credits
1. Meaning of Concurrence and
Solutio Indebiti (Art 2154) Preference
2. Preferred Credits on Specific
• The principle of solution indebiti provides Movables
that if something is received when there
3. Exempt Property
is no right to demand it, and it was
unduly delivered through mistake, the 4. Classification of Credits
obligation to return it arises. =========================
• In such a case, a creditor-debtor =============
relationship is created under a quasi-
contract whereby the payor becomes the CONCURRENCE AND PREFERENCE OF
creditor who then has the right to CREDITS
demand the return of payment made by (Arts. 2236-2251)
mistake, and the person who has no right
to receive such payment becomes CONCURRENCE OF CREDIT implies possession
obligated to return the same by two or more creditors of equal rights or
• The principle ofsolutio indebiti applies privileges over the same property or all of the
where property of a debtor.
PREFERENCE OF CREDIT is the right held by a
(1) a payment is made when there exists creditor to be preferred in the payment of his
no binding relation between the payor, claim above others out of the debtor’s assets.
who has no duty to pay, and the person • Preference creates no interest or lien on
who received the payment; and the property, but merely a preference to
the application of the proceeds.
(2) the payment is made through • The right of preference can be made
mistake, and not through liberality or effective only by being asserted and
some other cause maintained. Otherwise, it is lost.
(Siga-An v. Villanueva, GR 173227 General Provisions:

January 2009) 1. The debtor is liable with all his property,
present and future, for the fulfillment of
his obligations, subjects to exemptions a. Considered as mortgages or pledges of
provided by law real or personal property or liens within
- Exempt property: the purview of legal provisions
a. Present property governing insolvency
1. Family home (Arts b. Taxes due to the State shall first be
152, 153 and 155, NCC) satisfied
2. Right to receive 2. Ordinary preferred credits (Art 2244) -
support as well as money or preferred in the order given by law
property obtained by such support 3. Common credits (Art 2245) - credits of
shall not be levied upon on any other kind or class, or by any other
attachment or execution (Art 205, right or title not comprised in Arts 2241-
NCC) 2244 shall enjoy no preference
3. Sec 13, Rule 39,
Rules of Court (Ordinary tools, Order of Preference of Credit
lettered gravestones, necessary
clothing, etc.) 1. Credits which enjoy preference with respect
4. Sec 118, the Public to specific movables, exclude all others to the
Land Act,( CA No. 141, as extent of the value of the personal property
amended) to which the preference refers.
b. Future property
• A debtor who obtains a discharge 2. If there are 2 or more credits with respect to
from his debts on account of the same specific movable property, they
insolvency, is not liable for the shall be satisfied pro rata, after the payment
unsatisfied claims of his creditors of duties, taxes and fees due the State or any
with said property (Secs. 68 and 69, subdivision thereof
Insolvency Law, Act No. 1956)
c. Property in custodia 3. Those credits which enjoy preference in
legis and of public domain relation to specific real property or real
rights, exclude all others to the extent of the
2. Insolvency shall be governed by the value of the immovable or real right to which
Insolvency Law (Act No. 1956, as the preference refers.
amended)
4. If there are 2 or more
3. Exemption of conjugal property or credits with respect to the same specific real
absolute community or property provided property or real rights, they shall be satisfied
that: pro rata, after the payment of the taxes and
a. Partnership or community subsists assessment of the taxes and assessments
b. Obligations of the insolvent upon the immovable property or real right.
spouse have not redounded to the
benefit of the family 5. The excess, if any, after
the payment of the credits which enjoy
4. If there is co-ownership, and one of the preference with respect to specific property,
co-owners is the insolvent debtor, his real or personal, shall be added to the free
undivided share or interest in the property which the debtor may have, for the
property shall be possessed by the payment of other credits.
assignee in insolvency proceedings
because it is part of his assets 6. Those credits which do
not enjoy any preference with respect to
5. Property held by the insolvent debtor as a specific property, and those which enjoy
trustee of an express or implied trust, preference, as to the amount not paid, shall
shall be excluded from the insolvency be satisfied according to the following rules:
proceedings
• Order established by Art. 2244
CLASSIFICATION OF CREDITS
• Common credits referred to in Art. 2245
1. Special preferred credits (Arts 2241 and shall be paid pro rata regardless of dates.
2242 of NCC)
NOTE: Preference of mortgage credits is Jurisdiction is acquired upon publication of notice
determined by the priority of registration, of the commencement of proceedings in any
following the maxim “prior tempore potior jure” newspaper of general circulation
(He who is first in time is preferred in right.)
MODES OF REHABILITATION
========================= • Court-supervised rehabilitation
=============
TOPIC UNDER THE SYLLABUS: • Pre-negotiated rehabilitation
J. Insolvency Law
• Out of court or informal restructuring
1. Definition of insolvency agreements or rehabilitation plans
2. Suspension of payments
3. Voluntary insolvency
4. Involuntary insolvency 1. COURT-SUPERVISED REHABILITATION
========================= • Owner, partnership or corporation may
============= initiate proceedings for rehabilitation,
which the proper court oversees and
INSOLVENCY LAW – FRIA deliver a final judgment regarding the
rehabilitation plan
FRIA DEFINITION OF “INSOLVENCY”
Financial condition of a debtor that is generally • REHABILITATION
unable to pay its or his liabilities as they gall due
o Restoration of the debtor to a
in the ordinary course of business or has
liabilities that are greater than its or his assets condition of successful operation
For FRIA to be applicable, there must be and solvency
insolvency proceedings in the courts designated
o The debtor is economically
by the Supreme Court to hear and resolve cases
feasible and its creditors can
brought under this act
recover by way of present value
of payments projected in the plan
PURPOSES OF FRIA
1. To effect equitable distribution of the
• REHABILITATION PLAN
insolvent’s property among its or his
creditors
o Plan by which the financial well-
2. To benefit the debtor in discharging him being and viability of the insolvent
from his liabilities and enabling him to debtor can be restored using
start afresh with the property set apart to various means
him as exempt
• REHABILITATION RECEIVER
3. To ensure or maintain certainty and
predictability of commercial affairs o Persons or persons, natural or
juridical, appointed as such by the
FRIA DEFINTION OF “DEBTOR” court entrusted with powers and
• Sole proprietorship (juridical debtor) duties set forth in the FRIA
• Partnership (juridical debtor) • KINDS
• Corporation (juridical debtor) • Voluntary proceedings
• Individual debtor who has become o Filing a petition for rehabilitation

insolvent (natural debtor) with the court done by the
insolvent debtor
NATURE OF PROCEEDINGS
Insolvency proceedings in FRIA are proceedings • Involuntary proceedings
in rem
o Filed by a creditor or group of
HOW JURISDICTION IS ACQUIRED creditors
o Claim or aggregate claim is at 5. Names of at least 3 nominees for
least P1M or at least 25% of rehabilitation receiver position
capital stock or partner’s
contribution, whichever is higher 6. Other information required
depending on relief requested
• TYPES OF PROCEEDINGS
7. Other documents required by the
Initiation proceedings act or rules promulgated by the
SC
o Attachments in the petition for
rehabilitation: Voluntary
Proceedings
GROUNDS TO INITIATE INVOLUNTARY
1. Identification of debtor, principal PROCEEDINGS
activities and addresses
• No genuine issue of fact on law on the
2. State fact of and cause of debtor’s claim/s of the petitioner/s (creditors) and
insolvency or inability to pay debt demandable payments due have not
been made for at least 60 days or debtor
3. Specific relief sought pursuant to failed in meeting obligations
the Act
• A third-person creditor other than
4. Grounds which petition is based petitioner/s has initiated foreclosure
against debtor, preventing debtor to pay
5. Other information required by the debts due or will render him insolvent
act, depending on the kind of
relief requested  Action on the Petition and
Commencement of Proceedings
6. List of debtors, liabilities and
creditors with addresses, amounts • If court finds the petition for rehabilitation
of claims and collaterals to be sufficient in form and substance, it
shall within 5 working days from filing,
7. Inventory of assets, includes issue a Commencement Order.
receivables and claims against 3rd
parties • If in the same period the court finds the
petition deficient, court may give
8. Rehabilitation plan
petitioner time to amend or supplement
9. Names of at least 3 nominees for petition, or to submit documents
rehabilitation receiver position necessary to fix said petition.
10. Other documents required by the - 5 working days provided for

Act or rules promulgated by the issuing the order will be reckoned
SC from date of filing the amended
petition or submission of
o Attachments in the petition for additional documents
rehabilitation: Involuntary
Proceedings • Commencement order:
1. Identification of debtor, principal - Identifies the debtor

activities and addresses - Summarizes the grounds for
initiating the proceedings
2. Circumstances sufficient for a - States the relief
petition to initiate rehabilitation - States the legal effects of the CO
proceedings - Declares that the debtor is under
rehab
3. Specific relief sought - Directs publication in newspaper
of general circulation in the
4. Rehabilitation plan Philippines
- Appoints a rehabilitation receiver to the latter in the ordinary course
- Summarizes the requirements and of the latter’s business
deadlines for creditors to establish o To the actions of a licensed broker
their claims against the debtor (5) or dealer to sell pledged securities
days before the initial hearing of a debtor pursuant to a
- Sets the case for initial hearing securities pledge or margin
• Suspension/Stay Order (effects) agreement
 Suspend all actions or o To the clearing and settlement of
proceedings for enforcement of financial transactions through the
claims against the debtor facilities of a clearing agency
 Suspend all actions to enforce any o To any criminal action against the
judgment, attachment or other debtor/owner
provisional remedies against the o Effectivity and Duration of
debtor Commencement Order
 Prohibit the debtor from selling, o Unless lifted by the court, CO shall
encumbering, transferring or be effective for the duration of the
disposing in any manner any of its rehabilitation proceedings.
properties except in the ordinary o Minimum requirements must be
course of business met:
 Prohibit the debtor from making • Rehabilitation plan complies with
any payment of its outstanding minimum contents prescribed by
liabilities as of the the act
commencement date • Sufficient monitoring by
• Note: Stay order applies to rehabilitation receiver
government financial institutions • Debtor has met with creditors in
(Sec 20) attempts for consensus proposed
• Exceptions to the Stay and Suspension by rehabilitation plan
Order • Rehabilitation receiver submits a
• Cases already pending appeal in report, a preliminary evaluation of
the SC as of the commencement how realistic the goals of
date. Provided that any final rehabilitation plan are and how
judgment on the appeal be reasonable and realistic success is
referred to the court for based on
appropriate action  Sufficient assets to rehabilitate
o Cases pending in specialized court debtor
or quasi-judicial agency, on the  Sufficient cash flow to maintain
court’s discretion operations of debtor
o Enforcement of claims against  Petition is not a filing intended to
sureties and other persons defraud creditors and delay claims
solidarily liable with debtor and 3rd  Debtors, partners, stockholders,
party accommodation mortgagors directors and officers acting in
even issuers of letters of credit good faith and due diligence
UNLESS the property subject of  Debtor likely to be able to pursue
the 3rd party/accommodation viable rehabilitation plan
mortgage is necessary for the • Attachments on petition for rehabilitation
rehabilitation of the debtor as are not materially false
determined by the court (in other
• If petitioner is the debtor, he has met
words, secured creditors can
with creditors representing ¾ of total
enforce their claims/foreclose if
obligation made in good faith. If petitioner
the security they’re holding is not
is a creditor, he has met with the debtor,
necessary for rehabilitation)
made a good faith effort to reach
o To any form of action of
consensus
customers of a security
• Effect of Failure to File Notice of Claim
market participant to recover
or claim securities entrusted o Instead of filing a notice of claim, the
creditor files a subsequent belated claim
o Such claim shall not be entitled to to confirm rehabilitation plan. If
participate in rehabilitation proceedings no plan is confirmed within said
o Creditor is still entitled to receive period proceedings may upon a
distributions arising from rehabilitation motion or motu proprio be
 Rehabilitation Receiver converted to one for liquidation of
o Within 40 days from initial hearing, the the debtor
rehabilitation receiver shall submit a o Accounting discharge of
report to court stating preliminary Rehabilitation Receiver
findings and recommendations on  Upon confirmation of
whether: rehabilitation plan, rehabilitation
• Debtor is insolvent, causes of receiver shall provide a final
insolvency including any unlawful report and accounting to the
acts done by oweners which may court. Unless the plan requires or
have contributed to the describes the role of the
insolvency rehabilitation receiver after
• If the rehab plan is indeed feasible approval of the plan, curt shall
and reasonable in relation to goals discharge rehabilitation receiver
and underlying assumptions of duties.
• Substantial likelihood exists or not o Termination Proceedings
• Petition should be dismissed or  Upon motion of any stakeholder
or rehabilitation receiver, the
not
rehabilitation plan may be
• Debtor should be liquidated
terminated by order of court.
and/or dissolved or not
 Failure of rehabilitation:
 Giving due course to or dimissal of
• Dismissal of petition by court
petition or conversion of
proceedings • Debtor fails to submit a
o Within 10 days from receipt of rehabilitation plan
rehabilitation receiver report mentioned • Under rehabilitation plan
in section2 24, court may submitted by debtor, there is no
• Give due course to petition upon substantial likelihood for
finding rehabilitation
 Debtor is insolvent • Though amended and approved,
debtor fails to implement the
 Substantial likelihood for success
rehabilitation plan, failure to
exists
realize objectives
• Debtor shall comply with
• Commission of fraud in securing
provisions of the Rehab Plan and
the approval for the plan
take action to carry out the plan
• Analogous circumstances as may
• Payments made to creditors
be defined by rules of procedure
according to the Rehab Plan
• Contracts with creditors  Court action upon break of or failure
of rehabilitation plan (upon motion
interpreted as continuing to the
of an affected party)
extent that they do not conflict
with the Rehab Plan • Issue an order directing breach be
• Compromises on amounts or cured within specified period,
failing which, proceeding may be
rescheduling of timing of
converted to liquidation
payments by debtor shall be
binding to creditor regardless • Issue and order converting
whether plan ins a success or not proceedings to liquidation
• Claims after approval of plan not • Allow debtor to submit
treated by the plan are not amendments to plan subject to
subject to suspension order approval under same
o Period for confirmation of requirements for approval under
rehabilitation plan provisions
 Court has a maximum period of 1 • Issue any other order to remedy
year from date of filing of petition breach consistent with present
regulation
• Enforce applicable provision of • Issuance of Court Order
rehabilitation plan through writ of • Publication of the order in a
execution newspaper of general circulation in
 Effects of termination the Philippines once a week for at
• The discharge of the rehabilitation least two consecutive weeks
receiver subject to his submission • Objection to the petition or
of a final accounting rehabilitation plan if any
• The lifting of the Stay Order and • Hearing on the objections if necessary
any other court order holding in • Approval of the plan
abeyance any action for the
enforcement of a claim against Cause for which objection may be made to
the debtor petition or plan
• PROVIDED, that if the termination • The allegation in the petition or the
is due to failure of rehabilitation or Rehabilitation Plan or the attachments
dismissal of petition for reasons thereto are materially false or misleading
other than technical grounds, • The majority of any class of creditors do
proceedings will automatically be not in fact support the Rehabilitation Plan
converted to LIQUIDATION • The Rehabilitation Plan fails to accurately
account for a claim against the debtor
and the claim is not categorically
2. PRE-NEGOTIATED REHABILITATION declared as contested claim; or
• The support of the creditors, or any of
Parties to file a petition for a pre-
them was induced by fraud
negotiated rehabilitation plan
• Note: if objection is meritorious, the
• Insolvent debtor by itself; or
debtor is directed to cure the defect
• Jointly with any of its creditors
within a reasonable period
• Note: if the debtors/creditors supporting
Requisites for a petition for a pre-
the plan acted in bad faith or the
negotiated rehabilitation plan
objection is non-curable, the Court may
• Petition must be filed by
order conversion of proceedings into
o An insolvent debtor by itself or liquidation
jointly with any of its creditors • Note: if the objection is not meritorious or
o With the court
the objection is cured, the rehabilitation
• The pre-negotiated rehabilitation plan plan is deemed approved
must be endorsed or approved by
creditors holding at least 2/3 of the total Effect of Approval of Plan
liabilities of the debtor, including secured Same effect as confirmation of Plan under
claims of the debtor and unsecured Court=Supervised Rehabilitation
creditors holding more than 50% of the
total unsecured claims of the debtor 3. OUT-OF-COURT OR INFORMAL
RESTRUCTING AGREEMENTS OR
Documents that must accompany the REHABILITATION PLANS
petition as a minimum
• Schedule of debtor’s debts and liabilities Informal restructuring/workout agreement
• Inventory of debtor’s assets or rehabilitation plan defined
• The pre-negotiated Rehabilitation Plan, Done outside or without the intervention of court
including the names of at least 3 qualified provided it meets the minimum requirements set
nominees for rehabilitation receiver for the in the Act
• Summary of disputed claims against
debtor, and report on provisioning of Requisites for an Out-of-court or informal
refunds to account for appropriate restructuring/workout agreement or
payments rehabilitation plan
• The debtor must agree to the out-of-court
Procedure for pre-negotiated rehabilitation or informal restructuring/workout
• Filing of the petition agreement or Rehabilitation Plan
• It must be approved by creditors
representing at least 67% of the Ι. Voluntary Liquidation:
SECURED obligations of the debtor
• It must be approved by creditors α. An insolvent debtor may apply for
representing at least 75% of the liquidation by filing a verified petition
UNSECURED obligations of the debtor for liquidation with the court
• It must be approved by creditors holding ι. Contents:
at least 85% of the TOTAL LIABILITIES, 1. Schedule of debtor’s liabilities
SECURED and UNSECURED, of the debtor with a list of creditors
2. An inventory of all its assets
Standstill Period 3. Names of at least 3 nominees to
It is a period that may be agreed upon by the the position of liquidator
parties pending negotiation/finalization of the
out-of-court agreement or Rehab Plan (similar to β. Procedure:
a stay order) ι. Filing of Petition (Sec 90)
ιι. If court finds petition sufficient in
Requirements for the standstill period to be form and substance, it shall issue
enforceable against 3rd parties the Liquidation Order (Sec 104)
ιιι. Publication of the petition or
• Agreement is approved by creditors motion in a newspaper of general
representing 50% of the total liabilities of circulation once a week for 2
the debtor consecutive weeks [Sec 112 (d)]
• Notice is published ιϖ. Hearing for election and
o Must invite creditors to participate appointment of liquidator [Sec
in the negotiation 112 (j)]
o All creditors must be given due ϖ. Direct payments of any claims and
notice conveyance of any property due
• Period does not exceed 120 days the debtor to the liquidator [Sec
112 (e)]
Effect of Standstill Period ϖι. Liquidation of the debtor’s assets
Any court action shall not stay the plan’s and payment of his debts by the
implementation UNLESS the relevant party is Liquidator (Sec 119)
able to secure a TRO or injunctive relieve from
ϖιι. Discharge of Liquidator (Sec 122)
the Court of Appeals to stay the implementation
of proceedings ϖιιι. Appeal if proper
The effect of the approval of the plan is the same ΙΙ. Involuntary Liquidation:
to that of confirmation of Plan under Court
Supervised Rehabilitation α. A verified petition may be filed in
court by 3 or more creditors with the
Notice of Out-of-Court rehabilitation plan is aggregate claims of at least 1M or at
required least 25% of the subscribed capital
Published once a week for at least 3 consecutive stock or partner’s contributions of the
weeks in a newspaper of general circulation in debtor, whichever is higher.
the Philippines. It shall take effect after 15 days ι. Contents:
from the date of the last publication of the notice 1. Must show that there’s
thereof no genuine issue of
fact or law on the
Amendments or modification to the plan claim/s of the
Amendments or modification must be made in petitioner/s, and that
accordance with the terms of the agreement and the due and
with due notice on all creditors demandable payments
thereon have not been
LIQUIDATION OF INSOLVENT JURIDICAL made for at least 180
DEBTORS days or the debtor has
failed generally to
meet its liabilities as suspension of payments. PD. 902-A cannot be
they fall due stretched to include petitions for insolvency.
2. Must show that no Petitions for declaration of insolvency of private
substantial likelihood corporations are within the original and exclusive
that the debtor may be jurisdiction of regular courts. SEC may entertain
rehabilitated such petitions only as an incident of and in
continuation of its already acquired jurisdiction
β. Procedure: over petitions to be declared in the state of
ι. Filing of the petition of 3 or suspension payments.
more creditors (Sec 91)
ιι. Issuance of order: INSOLVENCY OF INDIVIDUAL DEBTORS
1. Directing publication of
petition or motion in a
newspaper of general I. Suspension of Payments: postponement,
circulation once a by court order, of the payment of debts of
week for 2 consecutive one who possesses sufficient property to
weeks cover all his debts but foresees the
2. Directing the debtor impossibility of meeting them when they
and all creditors to file respectively fall due (Sec 94)
their comment on the
petition a. Purpose: to suspend or delay the
ιιι. Filing of comments payment of debts; debtor’s inability to
ιϖ. Consideration of comments meet his obligations when they
respectively fall due, despite the fact
filed by the court
that he has sufficient assets to cover
ϖ. Issuance of the liquidation
his liabilities (De Leon)
order
ϖι. Publication of the petition or b. A debtor may file a verified petition
motion in a newspaper of for suspension of payments if:
general circulation once a i. Individual debtor possesses
week for 2 consecutive weeks sufficient property to cover all
[Sec 112 (d)] his debts
ϖιι. Hearing for election and ii. But he foresees the
appointment of the liquidator impossibility of meeting them
[Sec 112 (j)] when they respectively fall
ϖιιι. Direct payments of any claims due
and conveyance of any iii. Contents:
property due the debtor to the 1. He has to state his
liquidator [Sec 112 (e)] residence 6 months
ιξ. Liquidation of the debtor’s before filing of his
assets and payment his debts petition (and file in the
by the Liquidator (Sec 119) court where he resided
ξ. Discharge of Liquidator (Sec 6 months prior to the
122) filing)
ξι. Appeal if proper 2. Schedule of
debts/liabilities
Note: Under both voluntary and involuntary 3. Inventory of assets
liquidation, the debtor or the 3 or more creditors 4. Proposed agreement
may initiate liquidation proceedings by filing a with creditors
motion in court at any time during the pendency
of the court-supervised or pre-negotiated c. Procedure:
rehabilitation proceedings. i. Filing of petition by debtor
(Sec 94)
Ching vs. Landbank of the Philippines [201 ii. Issuance by the court of an
SCRA 190 (1991)]: SC held that the SEC has order calling a meeting of
jurisdiction only with regard to petitions of creditor (Sec 95)
juridical debtors to be declared in the state of
iii. Publication of said order and and funeral of wife or
service of summons children of the debtor,
iv. Meeting of the creditors for incurred 60 days
the consideration of the before petition is filed.
debtor’s proposition (Sec 97) 2. Secured debtors.
v. Approval of the creditors of
the debtor’s proposition e. Creditor’s meeting (Only creditor
vi. Objections, if any, to the included in the schedules filed by the
decision which must be made debtor shall be cited to appear and
within 10 days from the date take part in the meeting)
of the last creditors’ meeting i. To form a majority (Rule of
(Sec 100) Double Majority):
vii. Issuance of order by the court 1. 2/3 of the creditors
directing that the agreement voting unite on the
be carried out in case the same proposition, and
decision is declared valid or 2. That the claims
when no objection to said represented by said
decision has been presented majority vote amount
(Sec 101) to at least 3/5 of the
total liabilities of the
d. Effect of filing a petition for debtor [Sec 97 (d)]
suspension of payments: ii. If the majority agrees, the
i. No disposition in any manner court will approve on the
of his property may be made agreement of the
by the individual debtor, creditors/debtors as regards
except those used in the the payment
ordinary operation of iii. But petition is deemed
commerce or of industry in rejected when:
which he is engaged [Sec 95 1. the number of
(e)]. creditors representing
ii. No payments may be made by at least 3/5 of the
the individual debtor outside liabilities of the
of the necessary and individual debtor do
legitimate expenses of his not attend, or
business or industry [Sec 95 2. if the double majority
(f)]. rule are not in favor of
iii. Suspension Order: Upon the proposed
motion by the debtor, the agreement (Sec 99)
court may issue an order iv. Effect of disapproval of
suspending any pending petition: Court shall declare
execution against the the proceedings terminated
individual debtor provided and the creditors shall be at
that properties held as liberty to exercise the rights
security by secured creditors which may correspond to
shall not be subject of such them (Sec 100, par. 2)
suspension order (Sec 96, par. v. Causes for which objection
1). may be made to the decision
iv. No creditor shall sue or of the meeting:
institute proceedings to collect 1. Defects in the call for
his claim from the debtor from the meeting, in the
the time of filing of petition as holding thereof and in
long as proceedings remain the deliberations,
pending, except: which prejudice the
1. Those creditors with right of the creditors;
claims for personal
labor, maintenance,
expenses of last illness
2. Fraudulent connivance which he has resided 6 months prior
between one or more to filing the petition.
creditors and the i. Contents:
individual debtor ot 1. Schedule of debts and
vote in favor of the liabilities
proposed agreement; 2. Inventory of Assets
3. Fraudulent connivance 3. Proposed Agreement
of claims for the with creditors
purpose of obtaining a
majority. b. Procedure:
vi. Effect of failure or individual i. Filing of the petition by the
debtor to perform agreement: debtor praying for the
If the debtor fails, wholly or in declaration of insolvency (Sec
part, to perform the 103)
agreement decided upon the ii. If the court finds the petition
meeting of the creditors, all sufficient in form and
rights which the creditors had substance, it shall issue the
against the debtor before the Liquidation Order (Sec 104)
agreement shall revest in iii. Publication of the petition or
them (Sec 102). motion in a newspaper of
Distinctions between Suspension of general circulation once a
Payments and Insolvency: week for 2 consecutive weeks
[Sec 112 (d)]
SUSPENSION INSOVENCY iv. Hearing for election and
OF appointment of the liquidator
PAYMENTS [Sec 112 (j)]
Purpose Suspend or Discharge the v. Direct payments of any claims
delay the debtor from and conveyance of any
payment of the payment property due the debtor to the
debts of debts liquidator [Sec 112 (e)]
Property Debtor has Debtor does vi. Liquidation of the debtor’s
sufficient not have assets and payment of his
property sufficient debts by the Liquidator (Sec
property 119)
Amount of Amount of Creditors vii. Discharge of Liquidator (Sec
Indebtedness indebtedness receive less 122)
is not affected than their viii. Appeal if proper
credits, and in
case there are c. Effect of filing of petition: The filing of
preferences, the petition shall be an act of
some insolvency (Sec 103). Once the
creditors may petition is filed, it ipso facto takes
not receive away and deprives the debtor of the
any amount at right to do or commit any act of
all preference as to creditors, pending
the final adjudication.
LIQUIDATION OF INDIVIDUAL INSOLVENT d. Effects of errors in description or

DEBTORS omission of property in inventory:
i. The erroneous or ambiguous
description of the insolvent’s
I. Voluntary Liquidation property in inventory does not
affect the title of purchasers in
a. A verified petition may be filed by an the insolvency proceedings.
insolvent debtor (owing debts Legal title of the property of
exceeding the amount of P500,000) in the insolvent passes to the
the court of the province or city in liquidator and is administered
in the insolvency proceedings
regardless of errors in the c. Acts of Insolvency:
inventory. i. That such person is about to
ii. If the insolvent omits property depart or has departed from
from his inventory, it is the the Republic of the
duty of the liquidator to Philippines, with intent to
recover any property or its defraud his creditors;
value, fraudulently conveyed ii. That being absent from the
by the debtor [Sec 119 (f)]. Republic of the Philippines,
iii. Even property exempt from with intent to defraud his
execution must be included in creditors, he remains absent;
order to preclude possible iii. That he conceals himself to
fraudulent omission under the avoid the service of legal
pretext that such property is process for the purpose of
exempt. hindering or delaying the
liquidation or of defrauding his
e. If the debt exceeds the secured creditors;
property: iv. That he conceals, or is
i. To the extent of the removing, any of his property
unsecured portion, the to avoid its being attached or
creditor can join the taken on legal process;
proceedings. v. That he has suffered his
ii. If the creditor wants to property to remain under
participate as an ordinary attachment or legal process
creditor, he has to let go of for three (3) days for the
the mortgage. purpose of hindering or
delaying the liquidation or of
II. Involuntary Liquidation defrauding his creditors;
vi. That he has confessed or
a. Purpose: It is not a mere personal offered to allow judgment in
action against the insolvent for the favor of any creditor or
collection of debts, but its purpose is claimant for the purpose of
to impound all of his non-exempt hindering or delaying the
property, to distribute it equitably liquidation or of defrauding
among his creditors, and release him any creditors or claimant;
from further liability. vii. That he has willfully suffered
judgment to be taken against
b. Any creditor or group of creditors, him by default for the purpose
with a claim of or with claims of hindering or delaying the
aggregating at least P500,000, may liquidation or of defrauding his
file a verified petition in the court of creditors;
the province or city in which the viii. That he has suffered or
individual debtor resides. procured his property to be
i. Petitioning creditor must post taken on legal process with
a bond. intent to give a preference to
ii. Petition must allege at least one or more of his creditors
one act of insolvency. and thereby hinder or delay
1. Any debtor who the liquidation or defraud any
commits an act of one of his creditors;
insolvency may ix. That he has made any
adjudged insolvent. assignment, gift, sale,
The date of conveyance or transfer of his
adjudication of estate, property, rights or
insolvency retroacts to credits with intent to hinder or
the date of the filing of delay the liquidation or
the petition for defraud his creditors;
insolvency.
x. That he has, in contemplation iv. Filing of answer or motion to
of insolvency, made any dismiss by individual debtor
payment, gift, grant, sale, v. Hearing of the case (Sec 107)
conveyance or transfer of his vi. Issuance of the Liquidation
estate, property, rights or Order
credits; vii. Publication of the petition or
xi. That being a merchant or motion in a newspaper of
tradesman, he has generally general circulation once a
defaulted in the payment of week for 2 consecutive weeks
his current obligations for a [Sec 112 (d)]
period of thirty (30) days; viii. Hearing for election and
xii. That for a period of thirty (30) appointment of liquidator [Sec
days, he has failed, after 112 (j)]
demand, to pay any moneys ix. Direct payments of any claims
deposited with him or and conveyance of any
received by him in a fiduciary; property due the debtor to the
and liquidator [Sec 112 (e)]
xiii. That an execution having x. Liquidation of the debtor’s
been issued against him on assets and payment of his
final judgment for money, he debts by the Liquidator (Sec
shall have been found to be 119)
without sufficient property xi. Discharge of Liquidator (Sec
subject to execution to satisfy 122)
the judgment. xii. Appeal if proper
d. Procedure:
i. Filing of the petition by any e. The petitioners shall pay the debtor
creditor or group of creditors all costs, expenses, damages due to
and posting of required bond the proceedings if the case is
(Sec 105) dismissed, withdrawn by them or if
ii. Issuance of Order to Show the debtor is not insolvent.
Cause (Sec 106): court will
order the individual debtor to f. Absent Individual debtor:
defend himself and state why i. Resides outside the
he is not an insolvent. Philippines;
1. Nothing in the order ii. Departed from the Philippines;
shall impair the rights iii. Cannot be found with due
of a secured creditor to diligence; or
enforce his lien in iv. Hides to avoid service of the
accordance with its order to show cause (Sec 108)
terms (secured
creditor may foreclose g. Liquidation Process if the individual
notwithstanding an debtor is absent:
order forbidding the i. Creditors must file the petition
debtor to ii. Petitioning creditors must:
alienate/encumber any 1. Submit the required
of his property) affidavits for the Order
2. If the debtor cannot be of publication
found, the creditors 2. Present the bonds
may ask the court to equivalent to twice the
issue an order amount of their claims
directing the sheriff to against the debtor
take possession of the iii. Court shall issue and Order
debtor’s property in directing the sheriff to take a
order for it to be sold sufficient amount of the
at a public sale (sale debtor’s property not exempt
under execution) from execution to satisfy the
iii. Service of order to show cause claim;
iv. The sheriff shall then: b) Order the liquidation of the debtor, or in
1. Take said property case of a juridical debtor, declare it as
2. Prepare a complete dissolved
inventory of the c) Order the sheriff to take the property of
property within 3 days the debtor
from said taking and d) Order the publication of the petition in a
may be extended for newspaper of general circulation
good cause; e) Direct payments of any claims and
3. Give such to the court conveyance of any property due to the
as soon as completed; debtor to the liquidator
4. Prepare a schedule of f) Prohibit the transfer of property and
the names and payment by the debtor
residences of the g) Direct all creditors to file their claims with
creditors and the the liquidator within the period set by the
amounts due to them. rules
h) Authorize the payment of admin
Distinction between Voluntary and expenses ad they become due
Involuntary Liquidation:
Effects of the Liquidation Order
VOLUNTARY INVOLUNTAR a) The juridical debtor is dissolved and its
Y juridical existence terminated
Number of One Any creditor or b) Legal title of all the assets of the debtor
creditors group of shall be vested in the liquidator/court
creditors c) All contracts of the debtor shall be
Filed by: Insolvent 3 or more deemed terminated unless the liquidator,
debtor creditors with w/in 90 days from the date of his
qualifications assumption of office, declares otherwise
set by laws and the contracting party agree
Acts of Must not be Must have d) No separate action for the collection of an
insolvency guilty committed one unsecured claim shall be allowed (direct
or more claims to liquidator)
Amounts of Must exceed Not less than e) No foreclosure proceeding shall be
indebtedness P500,000 P500,000 allowed for 180 days
Bond Not Required Required
Order of May be Granted only Rights of Secured Creditors: The Liquidation
Adjudication granted ex after hearing Order shall NOT affect the right of a secured
parte creditor to enforce his lien. He may:
Length of Province or Immaterial a) Waive his right under the security, prove
residence (for city in which his claim in the liquidation proceedings
RTC) debtor has and share in the distribution of assets
resided for 6 b) Maintain his rights under the security
months prior a. If he chooses to maintain:
to petition i. If the value of the property
When does Upon filing of Only until after used as security is LESS
the court the voluntary hearing the than the claim it secures,
order the petition case the liquidator may convey
adjudication? the property to the
secured creditor and the
creditor will be admitted in
PROVISIONS COMMON TO LIQUIDATION IN
the liquidation
INSOLVENCY OF INDIVIDUAL AND JURIDICAL
proceedings as a creditor
DEBTORS
for the balance (basically,
he can recover deficiency)
What is a liquidation order? The liquidation
ii. If it is MORE, the liquidator
order shall:
may convey the property
a) declare the debtor insolvent
to the creditor and waive
the debtor’s right of
redemption upon receiving b) has the value of the property subject of
the excess from the his security or lien fixed by agreement
creditor with the liquidator, and is admitted for
b. The liquidator may sell the the balance of his claim.
property and satisfy the secured NOTE: The creditors entitled to vote will elect the
creditor’s entire claim from the liquidator in open court. The nominee receiving
proceeds the highest number of votes cast in terms of
c. The secured creditor may amount of claims and who is qualified shall be
foreclose/enforce his lien appointed as the liquidator.
Functions of Liquidator When can the court appoint the liquidator?

The liquidator shall be deemed an officer of the a) on the date set for the election of the
court with the principal duly of preserving and liquidator, the creditors do not attend;
maximizing the value and recovering the b) the creditors who attend, fail or refuse to
assets of the debtor, with the end of elect a liquidator;
liquidating them and discharging to the c) after being elected, the liquidator fails to
extent possible all the claims against the qualify; or
debtor. d) a vacancy occurs for any reason
whatsoever, In any of the cases provided
The powers, duties and responsibilities of the herein, the court may instead set another
liquidator shall include, but not limited to: hearing of the election of the liquidator.
a. to sue and recover all the assets,
debts and claims, belonging or due to the What are the qualifications of the
debtor; Liquidator?
b. to take possession of all the property of a) A citizen of the Philippines or a resident of
the debtor except property exempt by the Philippines in the six (6) months
law from execution; immediately preceding his nomination;
c. to sell, with the approval of the b) Of good moral character and with
court, any property of the debtor acknowledged integrity, impartiality and
which has come into his possession independence;
or control; c) Has the requisite knowledge of insolvency
d. to redeem all mortgages and pledges, and other relevant commercial laws, rules
and so satisfy any judgment which may and procedures, as well as the relevant
be an encumbrance on any property sold training and/or experience that may be
by him; necessary to enable him to properly
e. to settle all accounts between the debtor discharge the duties and obligations of a
and his creditors, subject to the approval rehabilitation receiver; and
of the court; d) Has no conflict of interest: Provided, That
f. to recover any property or its value, such conflict of interest may be waived,
fraudulently conveyed by the debtor; expressly or impliedly, by a party who
g. to recommend to the court the creation of may be prejudiced thereby.
a creditors' committee which will assist
him in the discharge of the functions and Preliminary Registry of Secured and
which shall have powers as the court Unsecured Creditors:
deems just, reasonable and necessary The liquidator shall prepare a preliminary registry
of claims within twenty (20) days from his
NOTE: In sum, the liquidator shall have the assumption into office.
right and duty to take all reasonable steps to
manage and dispose of the debtor's assets Unsecured Creditors defined
with a view towards maximizing the They are Secured Creditors who have:
proceedings therefrom, to pay creditors and a) Waived their security or lien; or
stockholders, and to terminate the debtor's b) Who has fixed the value of the property
legal existence. subject of their security or lien by
agreement with the liquidator and is
When can a secured creditor be allowed to admitted as a creditor for the balance,
vote for a liquidator? shall be considered as unsecured
a) he waives his security or lien; or creditors.
The liquidator shall make the registry available The Liquidator shall submit a Liquidation Plan to
for public inspection and provide publication the court within three (3) months from his
notice (on where and when they may inspect it) assumption into office,
to: The Liquidation Plan shall, as a minimum
a) Creditors, enumerate:
b) Individual debtors owner/s of the sole a) All the assets of the debtor; and
proprietorship-debtor, b) A schedule of liquidation of the assets
c) Partners of the partnership debtor; and and payment of the claims.
d) Shareholders or members of the NOTE: Duty of the Court to exempt and set
corporation-debtor. apart for the use and benefit of the said
insolvent such real and personal property
Right of Set-off as is by law exempt from execution.
Debtor and Creditor are MUTUALLY Debtor and
Creditor of each other: One Debt shall be SET
OFF against the other, The Balance, if any shall
be allowed in the liquidation proceedings.
Opposition or Challenge to Claims

A Challenge to Claim or Claims may be
submitted to the court by serving a certified copy
on the liquidator and the creditor holding the
challenged claim; within thirty (30) days from the
expiration of the period for filing of applications
for recognition of claims, creditors, individual
debtors, owner/s of the sole proprietorship-
debtor.
Who may submit a Challenge to Claim or

Claims:
a) Partners of the partnership-debtor;
b) Shareholders or members of the
corporation-debtor; and
c) Other interested parties
Transactions that may be rescinded or

nullified
The Following Transactions may be Rescinded or
Nullified:
a) Any transaction occurring prior to the
issuance of the Liquidation Order; or
b) A transaction entered into by the debtor
or involving its assets; in case of the
conversion of the rehabilitation
proceedings prior to the commencement
date.
Grounds for rescission or nullification:

a) It was executed with intent to defraud a
creditor or creditors; or
b) It constitutes undue preference of
creditors.
The Liquidation Plan.

LIQUIDATION
REHABILITATION
COURT SUPERVISED INSOLVENT JURIDICAL INDIVIDUAL INSOLVENT
INFORMAL DEBTORS DEBTORS
PRE- RESTRUCTU
NEGOTIATED RING
Voluntary Involuntar AGREEMENT Voluntar Involunta Suspensi
Proceeding y Voluntary Involunta y ry on of
s Proceeding ry Liquidati Liquidati Payments
s on on
How - verified - verified -verified Done without 1) verified 1) verified Verified Verified Verified
Made petition petition petition court petition for petition petition petition in petition
intervention liquidation in for court of the court before
court liquidation the of the city/provin
provided that
2) verified in court city/provin province ce where
it meets the motion to 2) verified ce where or city in debtor has
minimum convert motion to debtor has which the resided 6
requirement pending convert resided 6 individual months
of FRIA rehabilitation pending months debtor prior to
proceeding rehabilitati prior to resides filing
into a on filing
liquidation proceedin
proceeding g into a *filing of
liquidation such
proceedin petition=a
g ct of
insolvency
Purpose Establish Establish the approval of To negotiate To establish To to apply to to be
insolvency insolvency the terms of the the establish for impound declared in
and the and the Rehabilitation rehabilitation insolvency of the discharge all of a state of
viability of viability of plan in court plan without debtor for insolvency of debts debtor’s suspension
rehabilitatio rehabilitatio court purposes of of debtor and non- of
n in court n in court intervention liquidation for liabilities exempt payment
purposes property,
of to
liquidation distribute
it
equitably
among his
creditors
and to
release
him
from
further
liability
Parties Filed by Filed by Filed by Rehabilitation Filed by the 3 or more Individual Creditor or Individual
Insolvent Creditor or Insolvent Plan must be Insolvent creditors debtor group of debtor
Debtor group of debtor by approved by: debtor with the creditors
-sole creditors itself or jointly 1) debtor aggregate with a
proprietorsh with with other 2) creditors claims of claim or
ip: owner aggregate creditors representing at least aggregate
- claim of at at least 67% 1M or at claim of at
partnership: least 1M or of the least 25% least 500K
partners at least 24% SECURED of the
- of obligations of subscribed
corporation: subscribed the debtor capital
majority capital stock 3) creditors stock or
vote of BoD or partner’s representing partner’s
or trustees contribution at least 75% contributio
+ 2/3 vote s, whichever of the ns of the
of SH is higher UNSECURED debtor,
representing obligations of whichever
outstanding the debtor is higher
capital stock 4) creditors
or 2/3 vote holding at
of members least 85% of
the TOTAL
LIABILITIES,
SECURED and
UNSECURED,
of the debtor
Grounds Debtor’s 1) no Pre-negotiated Consent of the Rehabilitatio 1) no Debtor Acts of Debtor has
insolvency genuine Rehabilitation parties n is no longer genuine doesn’t Insolvency sufficient
or inability issue of fact plan which involved to possible issue of have which property to
to pay its or law on must approved the informal fact or law sufficient tends to cover all
obligations the claim/s by creditors re-structuring on the properties delay the his debts
as they of the holding at agreement claim/s of to cover liquidation BUT
become due petitioner/s least 2/3 of the his or to foresees
and that the total liabilities petitioner/ liabilities defraud the
due and including: s, and that and the any impossibili
demandable a) secured the due debts creditors ty of
payments creditors and which he like: meeting
have not holding more demandab owes 1)debtor debts
been made than 50% of le exceeds has when they
for at least the total payments 500k departed become
from the due
60 days or secured claims thereon Philippines

that the of the debtor have not , with
debtor has and been intent to
generally b) unsecured made for defraud
failed to creditors at least his
meet its holding more 180 days creditors;
liabilities as than 50% of or the 2) he
they fall due the total debtor has conceals
unsecured failed himself to
2)creditor, claims of the generally avoid the
other than debtor to meet its service of
the liabilities legal
petitioner/s as they process
has initiated fall due for the
foreclosure purpose of
proceedings 2) no hindering
against the substantia or
debtor that l likelihood delaying
will prevent that the the
the debtor debtor liquidation
from paying may be
its debts as rehabilitat
they ed
become due
or will
render it
insolvent
Minimu 1) schedule 1) 1) schedule of N/A 1) schedule none 1)schedul Posting of 1)schedule
m of debtor’s circumstanc debtor’s of debtor’s e of debts bond in of debts
require liabilities es sufficient liabilities with liabilities with and the and
ments of with list of to support list of creditors list of liabilities amount liabilities
the creditors petition 2)an inventory creditors 2) determine 2)inventor
petition 2)an 2)specific of all its assets 2)an inventory d by the y of assets
inventory of relief sought 3) pre- inventory of of assets court 3)propose
all its assets 3)Rehabilita negotiated all its assets d
3)Rehabilita tion Plan Rehabilitation 3) names of agreement
tion Plan 4) names of plan and at least 3 with
4) names of at least 3 names of at nominees to creditors
at least 3 nominees to least 3 the position
nominees to the position nominees to of liquidator
the position of receiver the position of
of receiver receiver
4) summary of
disputed
claims against
debtor and
report on the
provisioning of
funds
Court COMMENCEMENT ORDER Court order Insolvent Liquidation Court Liquidatio 1) show Court
Action -shall appoint a -shall appoint a debtor or Order Order: n order cause Order:
(if rehabilitation receiver rehabilitation creditor may 1)publicati order 1) calling
sufficien -summarize requirements receiver, if seek court on 2) of
t in form and deadlines for creditors provided in the assistance for 2)directing liquidation creditor’s
and to establish their claim plan the execution debtors order meeting
substanc -include a STAY or - service of or and 2)publicati
e) SUSPENSION ORDER petition to implementatio creditors on of said
each creditor n of the to file order and
who is not a agreed comment service of
petitioner Rehabilitation such order
holding at least Plan Liquidatio to all
10% of total n order creditors
liabilities of 3)suspend
debtor any
- pending
execution
against
debtor
upon
motion
Publicati none Once a week Notice of Petition or Petition or none none Order:
on for 2 Rehabilitation motion: Once motion: Once a
consecutive plan: a week for 2 Once a week for 2
weeks in a published consecutive week for 2 consecutiv
newspaper of once a week weeks in a consecutiv e weeks in
general for 3 newspaper of e weeks in a
circulation; consecutive general a newspaper
with first weeks in a circulation newspape of general
publication newspaper of r of circulation;
made within 7 general general with first
days from circulation circulation publication
issuance of made
Order within 7
days from
issuance of
Order
Hearing 1) for For the
the election
determination of the For the N/A For the For the For the and
creditors determination election and election election appointme
2) determine any of the appointment and and nt of
objections to the objections to of liquidator appointme appointme liquidator
appointment of receiver the nt of nt of
3) direct creditors to Rehabilitation liquidator liquidator
comment on the plan
Rehabilitation Plan
4) direct the rehabilitation
receiver to evaluate the
financial condition of the
debtor and submit report
within 40 days
Effect -there shall be a waiver of Approval of the CRAM DOWN LIQUIDATION ORDER: SUSPENSI
taxes and fees due to the Rehabilitation EFFECT: the 1)The juridical debtor is dissolved and its juridical ON
National Government and plan shall have Rehabilitation existence terminated ORDER:
to LGUs from the issuance the legal effect Plan shall 2)Legal title of all the assets of the debtor shall be No
of the commencement as have the vested in the liquidator/court creditor
order until approval of the Confirmation same legal 3)All contracts of the debtor shall be deemed shall sue
Rehabilitation plan or the of Plan effect as terminated unless the liquidator, w/in 90 days from or institute
dismissal of petition, Confirmation the date of his assumption of office, declares proceedin
whichever is earlier *court has 120 of a Plan otherwise and the contracting party agree gs to
days from date 4)No separate action for the collection of an collect his
CONFIRMATION OF of filing to unsecured claim shall be allowed (direct claims to claim from
REHABILITATION PLAN approve the liquidator) the debtor
1) Rehabilitation plan and Plan. Failing to 5) No foreclosure proceeding shall be allowed for from the
its provisions shall be do so, the 180 days time of
binding upon the debtor Rehab Plan filing of
and all creditors whether or shall be the
not such persons have deemed petition
participated in the approved. and for so
proceeding long as
2) debtor shall comply with the
the provisions proceedin
3)payments shall be made gs remain
to creditors in accordance pending
with the plan Except:
4)contracts bet. Debtor and a)those
creditors shall be creditors
interpreted as continuing to having
apply to the extent that claims for
they don’t conflict with the personal
plan labor,
5) any maintenan
ce,
expense
compromises/reschedule of of last
timing of payments by illness of
debtor shall be binding on debtor 60
the creditor regardless days prior
whether the plan is filing
successfully implemented b) secured
6) claims arising after the creditors
approval of the plan that
are otherwise not treated
by the Plan are NOT subject
to Suspension Order
COMMODATUM MUTUUM DEPOSIT BARTER WAREHOUSE
RECEIPTS ACT
Object Non- Fungible/ Movable/person Non- Goods (chattels,
consumable consumable al property consumable merchandise)
(i.e. money)
Except:
consumable if
used for
exhibition
purposes only
Purpose Temporary Consumption Safekeeping Use or Store for profit
use of the consumption
thing
Exchange
(sale)
Obligation Take care of Return a thing Take care of the Exchange a Take care of the
the thing with of the same thing thing of the goods
due diligence kind and same kind,
quality Do not use the quality and Do not commingle
Return the thing deposited quantity with other goods
thing upon unless
expiration of authorized or is Issue a receipt for
period or required for its the goods
purpose preservation
Status of Retained by Passes to Retained by the Passes to the Retained by the
Ownership bailor bailee depositor other party depositor
(mutual
exchange)
Ability to Anytime, if no Only after the Anytime Cannot Anytime up to:
demand period or expiration of demand a. Surrender of
return purpose has the period return warehouse
been agreed because receipt
upon or if by contract is b. Offer to pay
mere already warehouse
tolerance only extinguished man’s lien
(precarium) c. Sign the
Rescission acknowledg
If there is an only if ement
urgent grounds exist
necessity
Acts of
ingratitude by
the bailee
Compensatio Essentially Gratuitous or Gratuitous or onerous Onerous
n gratuitous onerous onerous
Object Immovables Movables Movables Immovables
Real Rights over Incorporeal rights
immovables (leasehold Except: can CM evidenced by
rights) buildings by negotiable
agreement and no instruments, bills
innocent third party of lading, shares of
prejudiced stock, bonds,
warehouse
receipts
Requisit 1. Constituted to secure fulfillment of principal obligation 1. Must be in
es 2. Mortgagor/Pledgor absolute owner writing
3. Mortgagor/Pledgor has free disposal/legal authority 2. Express
agreement
*RM, CM and Pledge is VALID as between the parties even if between debtor-
registration requirements are not complied with BUT is not binding to creditor that the
3rd persons fruits will be
applied to
payment of
interest if any,
and then to the
principal
To bind Must be registered in Must be registered in Must be in a public Must be registered in
3rd the RD the CM Registry instrument with a the RD
persons description of thing
*If vehicle, must also pledged and the
be registered in the date
LTO
Delivery Generally not required Generally not required Delivery essential
Delivery essential
? to constitute
only so that the
pledge antichretic creditor
can enjoy the fruits
Effect of Ownership does not pass to the creditor upon default. Principle of pactum comissorium
default applies
Except: In pledge, after two sales and the thing remains unsold, the pledgee can appropriate
(in this case, he has to waive his claim)
Foreclos Extrajudicial/Judicial Sale through a notary Extrajudicial Extrajudicial/Judicial

ure public Private sale
Deficien Creditor can sue for No express right No deficiency Creditor can sue for
cy deficiency in either EJ/J granted by law, BUT deficiency in either
allowed by EJ/J
jurisprudence
Except: No deficiency
in sale on movables in
installment (Recto
Law)
VIII. LAND TITLES AND DEEDS PURPOSES: (QUIP-CC)
1. To quiet title to the land and to stop forever
========================= any question as to the legality of said title
======== 2. To relieve the land of unknown claims
TOPIC UNDER THE SYLLABUS: 3. To guarantee the integrity of land titles and to
A. Torrens System protect their indefeasibility once the claim of
1. Concept and background ownership is established and recognized
2. Certificate of title 4. To give every registered owner complete
peace of mind
B. Regalian Doctrine 5. To issue a certificate of title to the owner which
1. Concept shall be the best evidence of his ownership of
2. Effects the land
3. Concept of native title, time 6. To avoid conflicts of title in and to real estate
immemorial possession and to facilitate transactions. Lagarda v.
C. Citizen Requirements Saleeby [31 Phil 590, 1915]
D. Non-Registrable Properties The registration of property is to: (1) avoid possible
E. Original Registration conflicts of title, and (2) facilitate transactions
1. Registration relative to real property by giving the public the
process and requirements right to rely upon the face of the Torrens certificate
2. Who may apply of title and to dispense with the need of inquiring
a. Under P.D. 1529 further, EXCEPT when the party concerned has
actual knowledge of facts and circumstances that
b. Under C.A. 141
should impel a reasonably cautious man to make
3. Remedies such further inquiry. Capitol Subdivision v.
4. Cadastral registration Province of Negros, [7 SCRA 60 ,1963)
F. Subsequent Registration
1. Voluntary Dealings NATURE OF TORRENS SYSTEM
2. Involuntary Dealings
G. Dealings With Unregistered Land • Judicial in character and not merely
administrative
=========================
• Proceeding is in rem (binding upon the
========
whole world)
1. CONCEPT AND BACKGROUND
In a registration proceeding, the judgment of the
LAND TITLE is evidence of the owner’s right or court confirming the title, and ordering its
extent of interest, by which he can maintain registration in one’s name constitutes, when final,
control and as a rule assert right to exclusive res judicata against the whole world. Ronald Ting
possession and enjoyment of property v. Heirs of Lirio, [G.R. No. 168913, March 14,
2007]
DEED is an instrument in writing by which any
real estate or interest therein is created, TORRENS TITLE is a certificate of ownership
alienated, mortgaged, or assigned, or by which issued under the Torrens System, through the
title to any real estate may be affected in law or Register of Deeds, naming and declaring the owner
equity of the real property described therein, free from all
liens and encumbrances except such as may be
LAND REGISTRATION is a judicial or expressly noted there or otherwise reserved by
administrative proceeding whereby a person’s law. (See Section 44, PD 1529)
claim over a particular land is determined and
confirmed or recognized so that such land and General Rule – A title once registered cannot be
the ownership thereof may be recorded in a impugned, altered, changed, modified, enlarged,
public registry or diminished
TORRENS SYSTEM is a system for registration Exception – Direct proceeding permitted by law,
of land under which, upon the landowner’s usually for the protection of innocent third
application, the court may, after appropriate persons
proceedings, direct the issuance of a certificate
of title 2. CERTIFICATE OF TITLE
PROBATIVE VALUE OF THE TORRENS TITLE only against the registered
Torrens Title may be received in evidence in owner, but also against his
all Philippine courts , and shall be conclusive as hereditary successors
to all matters contained therein, principally as to 3. Accretion Requisites: G-C-A
the identity of the land owner except so far as 1. The deposit of soil or
provided in the Land Registration Act. sediment be gradual and
imperceptible,
• As opposed to an unregistered deed of sale, 2. It is the result of the
the certificate of title certainly deserves more current of the waters
probative value. Indeed, a Torrens Certificate (river/sea), and
is evidence of indefeasible title of property in 3. The land where accretion
favor of the person in whose name appears takes place is adjacent to
therein—such holder is entitled to the the banks of rivers or the
possession of the property until his title is sea coast
nullified. Pascual v. Coronel, [527 SCRA
474, 2007] Accretion to registered lands
needs new registration
TYPES OF TORRENS CERTIFICATES OF TITLE
There must be No human
1. ORIGINAL CERTIFICATE OF TITLE - the first intervention,
title issued in the name of the registered • The current causing the
owner by the Register of Deeds (ROD) alluvial deposit must be
covering a parcel of land which had been from a river. If it is from
registered by virtue of a judicial or the sea, the deposit will
administrative proceeding. pertain to the state.
2. TRANSFER CERTIFICATE OF TITLE - the title (Government of the
issued by the ROD in favor of the transferee Phils. v. Cabangis 53
to whom the ownership of the already Phil. 112 (1929))
registered land had been transferred by 4. Reclamation Filling of submerged land by
virtue of a sale or other modes of deliberate act and reclaiming
conveyance. title thereto
• Must be initially owned
by the government
MODES OF ACQUIRING TITLE • May be subsequently
1. Public Grant A conveyance of public land transferred to private
by government to a private owners
individual 5. Voluntary 1. Private grant
2. Acquisitive Requisites: ONCE Transfer 2. Voluntary execution of
Prescription Open, deed of conveyance
Continuous, • Contractual relationship
Exclusive, and between the parties
Notorious possession
• Consensual
6. Involuntary • No consent from the
If in good faith & with just
Alienation owner of land
title: 10 yrs. uninterrupted
possession is required • Forcible acquisition by
If in bad faith & without just the State
title: 30 yrs. continuous 7. Descent or Hereditary succession to the
possession is required Devise estate of deceased owner
8. Emancipation To ameliorate the sad plight
Only available if the land Patent/Grant of tenant-farmers (to answer
possessed is public, alienable (Certificate of their problems)
and disposable Land Ownership
Award) Such grant is not
A property registered under transferable except by
the Torrens System is not hereditary succession
subject to prescription
LAWS IMPLEMENTING LAND REGISTRATION
Prescription is unavailing not 1. Property Registration Decree (P.D. 1529, as
4.
amended) Pr
2. Cadastral Act (Act 2259, as amended) epare and keep an index system which
3. Public Land Act (Commonwealth Act 141, as contains the names of all registered owners
amended) and lands registered
4. Emancipation Decree (P.D. 27, as amended)
5. Comprehensive Agrarian Reform Law of 1988 The function of the ROD with reference to
(R.A. 6657, as amended) registration of deeds, encumbrances, instruments,
and the like is ministerial in nature, provided the
ADMINISTRATION OF THE TORRENS SYSTEM applicant complies with all the requisites. Baranda
1. Land Registration Authority v. Gustilo, [165 SCRA 757, 1988]
(LRA)
Agency charged with the efficient execution of It is enough that in the ROD’s opinion an
the laws relative to the registration of lands, instrument is registrable for him to register it. The
under the executive supervision of the DOJ act being an administrative act does not
contemplate notice to and hearing of interested
Composition: parties. Ledesma v. Villasenor, [13 SCRA 494,
a. Administrator 1965]
b. 2 Deputy Administrators (as assistants)
The determination of whether a document is valid
The Functions of the LRA are: (SAC) or not is a function that belongs to a court of
competent jurisdiction, and not to the ROD.
2. Extend speedy and effective assistance
Almirol v. ROD of Agusan, [G.R. No. L-22486,
to the Dept. of Agrarian Reform, the Land
March 20, 1968]
Bank, and other agencies in the
implementation of the land reform program
Instances when the ROD may validly deny
of the government
registration of a voluntary instrument:
2. Extend assistance to
1. Where there are more than 1 copy of the
courts in ordinary and cadastral land
owner’s duplicate certificate of title and not all
registration proceedings
such copies are presented to the ROD
3. Be the central
2. Where the voluntary instrument bears on its
repository of records relative to original
face an infirmity
registration of lands titled under the Torrens
3. Where the validity of the instrument sought to
system, including the subdivision and
be registered is in issue in a pending court suit,
consolidation plans of titled lands
notice of which must be given to parties
4. Registration may be suspended Balbin v.
2. Register Of Deeds (ROD)
ROD, [28 SCRA 12,1969]
It is the public repository of records and
instruments affecting registered or unregistered
The ROD may also refuse to register a private
lands and chattel mortgages in the province or
document since Section 112 of PD 152 provided
city wherein such office is situated
that deeds of conveyances affecting lands should
be verified and acknowledged before a notary
Composition:
public or other public officer authorized by law to
a. Register of Deeds
take acknowledgement. Gallardo v. IAC, [155
b. Deputy (as assistant)
SCRA 248, 1987]
The functions of the ROD: (PIDI)
NOTE: When the ROD is in doubt as to the proper
1. Immediately register an instrument
action to take on an instrument or deed presented
presented for registration dealing with real or
to him for registration, he should submit the
personal property which complies with the
question to the Administrator of the LRA en
requisites for registration
consulta (Section 117, PD 1529).
2. Shall see to it that said instrument bears
the proper documentary and science stamps
and that the same are properly cancelled B. REGALIAN DOCTRINE
3. If the instrument is not registerable, he
shall deny the registration thereof and inform 1. CONCEPT
the presentor of such denial in writing,
stating the ground or reason therefore, and Under the Regalian doctrine which is embodied in
advising him of his right to appeal by Section 2, Article XII of the 1987 Constitution, all
consulta in accordance with Sec. 117 of PD lands of the public domain belong to the State,
1529 which is the source of any asserted right to
ownership of land. ll lands of the public domain, NON-REGISTRABLE PROPERTIES
waters, minerals, coal, petroleum and other Article 420 1. Those intended for public
mineral oils, all forces of potential energy, NCC use, such as roads, rivers,
fisheries, forests, or timber, wildlife, flora and torrents, ports and bridges
fauna, and natural resources belong to the state. constructed by the State,
With the exception of agricultural lands, all other banks, shores, roadsteads,
natural resources shall not be alienated and others of similar
character
2. EFFECTS
2. Those which belong to the
All lands not appearing to be clearly within State, without being for
private ownership are presumed to belong to the public use, and are intended
State. Unless public land is shown to have been for some public service or for
reclassified or alienated to a private person by the development of the
the State, it remains part of the inalienable public national wealth.
domain. To overcome this presumption,
incontrovertible evidence must be established Arts. 5 & 6, 1. Rivers and their natural
that the land subject of the application is Water Code beds;
alienable or disposable. (PD 1067 ) 2. Continuous or intermittent
waters of springs and brooks
To prove that the land subject of an running in their natural beds
application for registration is alienable, an and the beds themselves;
applicant must establish the existence of a 3. Natural lakes and lagoons;
positive act of the government such as a 4. All other categories of
presidential proclamation or an executive order; surface waters such as water
an administrative action; investigation reports of flowing over lands, water
Bureau of Lands investigators; and a legislative from rainfall whether natural
act or a statute. The applicant may also secure a or artificial, and water from
certification from the Government that the lands agriculture runoff, seepage
applied for are alienable and disposable. and drainage;
5. Atmospheric water;
3. CONCEPT OF NATIVE TITLE, 6. Subterranean or ground
water;
TIME IMMEMORIAL 7. Seawater;
NATIVE TITLE - refers to pre-conquest rights to
Found in private lands:
lands and domains which, as far back as memory
8. Continuous or intermittent
reaches, have been held under a claim of private
waters rising on such lands;
ownership by ICCs/IPs, havenever been public
9. Lakes and lagoons naturally
lands and are thus indisputably presumed to
occuring on such lands;
have been held that way sincebefore the Spanish
10. Rain water and falling on
Conques
such lands;
11. Subterranean or ground
C. CITIZEN REQUIREMENTS waters; and
12. Waters in swamps and
1. INDIVIDUALS AND marshes
CORPORATIONS Regalian Forest or timberland, public
Doctrine forest, forest reserves lands,
Alienable lands of the public domain: under the mineral lands
1935, 1973,
Only Filipino citizens may acquire not more than and 1987
12 hectares by purchase, homestead or grant, or Constitution
lease not more than 500 hectares.
It is not the court which determines the
Private corporations may lease not more than classification of lands of the public domain into
1,000 hectares for 25 years renewable for agricultural, forest or mineral but the Executive
another 25 years Branch of the government, through the Office of
the President. Bureau of Forestry v. CA, [153
SCRA 351, 1987]
D. NON-REGISTRABLE PROPERTIES
The State has an imprescriptible right to cause claim of acquisition of ownership. Republic v. Sta.
the reversion of a piece of property belonging to Ana-Burgos, [523 SCRA 309, 2007]
the public domain if title has been acquired
through fraudulent means. Republic v. Heirs of b. Always filed with the RTC of the place
Alejaga, [393 SCRA 361, 2002] where land is situated
c. Indorsed to the MTC if there is no
A land classified as a military reservation zone, controversy over the land or if its value is
until reclassified or released from the said less than 100,000
classification remains inalienable public land. d. In cases of delegated jurisdiction to the
Republic v. Southside, [G.R. No. 156951, MTC, appeal is directed to the CA
Sept. 22, 2006] e. If land is situated between boundaries of
2 provinces, application must be filed:
E. ORIGINAL REGISTRATION • When boundaries are not defined:
with the RTC of the place where it is
Types Of Registration: declared for taxation purposes;
1. Original Registration • When boundaries are defined: a
2. Subsequent Registration separate plan for each portion must
be made by a surveyor and a
ORIGINAL REGISTRATION UNDER P.D. 1529 separate application for each lot must
is a proceeding brought before the RTC (as a be filed with the appropriate RTC
land registration court) to determine title or
ownership of land on the basis of an application 3. Setting of the Date of initial hearing of
for registration or answer by a claimant in a application by the RTC
cadastral registration. - Within 5 days, set hearing 45-90 days from
date of order
1. REGISTRATION PROCESS AND 4. Transmittal of the application and the date of
REQUIREMENTS the initial hearing, with all the documents or
other evidence attached thereto, by the Clerk
Kinds Of Judicial Registration: of Court to the LRA
1. Judicial/Voluntary/Ordinary – by filing 5. Publication of notice of the filing of the
with the proper court; application by the application and the date and place of the
private individual himself hearing in the Official Gazette. The notices
2. Administrative/Involuntary/Cadastral – required are mandatory.
compulsory registration initiated by the a. Publication of notice of initial hearing
government i. Once in the Official Gazette (this
confers jurisdiction upon the court)
Procedure In Ordinary Land Registration ii. Once in a newspaper of general
(SurF-D-TraPS-AHJ-DECT) circulation
1. SURvey of land by the Bureau of Lands or a
duly licensed private surveyor Purpose of publication:
- Survey plan must be duly approved by 1. To confer jurisdiction
the Director of Lands. over the land applied for upon the court
2. Filing of application for registration by the 2. To charge the whole
applicant world with knowledge of the application of
a. With all muniments of titles and copies the land involved, and invite them to take
thereof with survey plan approved by part in the case and assert and prove their
Bureau of Lands rights over the subject land
MUNIMENTS OF TITLE are instruments or b. Mailing

written evidence which applicant hold or possess • Within 7 days after publication of said
to enable him to substantiate and prove title to notice in the OG, mailing of notice to:
his estate. i. Persons named in the notice
ii. Sec. of Public Highways, Provincial
Tax declarations or realty tax payment of Governor, and Mayor, if the applicant
property are not conclusive evidence of requests to have the line of a public
ownership. At most, they serve as a good way or road determined
indicium of possession in the concept of an iii. Sec. of Agrarian Reform, Solicitor
owner. Such an act strengthens one’s bona fide General, Director of Lands, Director of
Fisheries, and Director of Mines, if the
land borders on a river, navigable open, continuous, exclusive, notorious
stream, or shore, or on an arm of possession and occupation of alienable and
the sea where a river or harbor lies disposable lands of the public domain under
iv. Other persons as the court may a bona fide claim of ownership since June 12,
deem proper 1945 or earlier
2. Those who acquired ownership of private
c. Posting land by prescription under the provisions of
Posting in conspicuous place on subject existing laws
land and on bulletin board of municipal 3. Those who acquired ownership of private
building at least 14 days before initial lands or abandoned river beds by right of
hearing accession or accretion under the existing
laws
6. Service of notice by the sheriff upon 4. Those who have acquired ownership of land
contiguous owners, occupants and those in any manner provided for by law
known to have interests in the property
7. Filing of answer to the application by any NOTE: All these persons must be natural-born
person whether named in the notice or not Filipino citizens. By way of exception juridical
8. Hearing by the court persons may apply for registration of leased
9. Promulgation of judgment by the Court agricultural and disposable lands not exceeding
10. Issuance of the decree declaring the 1,000 hectares in area for a period of 25 years and
decision final and instructing the LRA to renewable for not more than 25 years (Sec. 3,
issue a decree of confirmation and Article XII, 1987 Constitution), and except
registration when the land has been previously acquired by
prescription by a natural person and subsequently
Decree– issued by LRA after finality of judgment; transferred to a juridical entity. In this case, a
contains technical description of land. corporation may apply for judicial confirmation of
i. Decrees dismissing application title. Dir. of Lands v. IAC and ACME, [146
ii. Decrees of confirmation and SCRA 159 (1986]
registration
*0. Subject only to appeal Limitation To Ownership Of Land By
Corporation:
11. Entry of the decree of registration in the 1. Private Lands
LRA a. At least 60% Filipino (Sec. 7, Article XII,
1 year after the date of entry, it becomes 1987 Constitution)
incontrovertible and amendments will not be b. Restricted as to extent reasonably
allowed except clerical errors. It is deemed necessary to enable it to carry out
conclusive as to the whole world. purpose for which it was created
- Puts an end to litigation c. If engaged in agriculture, it is restricted
- Purpose of Torrens system is protected to 1,024 hectares
12. Sending a copy of the decree of registration 2. Patrimonial Property of the State (Sec. 3,
to the corresponding ROD Article XII, 1987 Constitution)
a. May only Lease (CANNOT own land of the
13. Transcription of the decree of registration public domain) for 25 years renewable
in the registration book and issuance of the b. Limited to 1,000 hectares
owner’s duplicate original certificate of title c. Apply to both Filipinos & foreign
to the applicant by the ROD upon payment corporations
of the prescribed fees
Determinative of this issue is the character of the
NOTE: Noncompliance with the requisites will parcels of land – whether they were still public or
make the Certificate of Title (CT) issued invalid already private – when the registration
and cancellable by the courts. proceedings were commenced. If they are already
private lands, the constitutional prohibition against
2 .WHO MAY APPLY acquisitions by a private corporation would not
apply. Natividad v. CA, [202 SCRA 439, 1991]
a. UNDER PD 1529 (OPAL) FORM OF THE APPLICATION
(Sec. 15, PD 1529): (WSS)
1. Those who by themselves or through their 1. Written
predecessors-in-interest have been in
2.
Si muniments of titles or copies thereof and a survey
gned by the applicant or person duly plan of the land as approved by the Bureau of
authorized in his behalf Lands
- If there is more than 1 applicant, the
application shall be signed and sworn to P.D. 1529 has eliminated the distinction between
by and in behalf of each. the general jurisdiction vested in the RTC and the
2. Sworn to before an officer authorized to limited jurisdiction conferred upon it by the former
administer oath for the province or city where law when acting merely as land registration court.
the application was actually signed Aimed at avoiding multiplicity of suits, the change
has simplified registration proceedings by
CONTENTS OF APPLICATION conferring upon the RTCs the authority to act not
(Sec. 15, P.D. 1529): (MADFARCE) only on original applications but also those filed
1. Manner of acquisition of land after original registration, with power to hear and
2. Assessed value of the land and the buildings determine all questions arising upon such
and other improvements based on the last applications or petitions. Averia v. Caguioa, [146
assessment for taxation purposes SCRA 459, 1986]
3. Description of the land applied for together
with the buildings and improvements; the If there are several parcels of land situated in
plan approved by Director of Lands and the different provinces/cities but belong to one owner,
technical descriptions must be attached he must file in RTC of each province/city where the
4. The court may require Facts to be stated in different parcels of land are located for registration
the application in addition to those purposes
prescribed by the Decree not inconsistent
therewith and may require the filing of Exception – Delegated jurisdiction of the MTC to
additional papers hear and determine cadastral or land registration
5. Full names and addresses of All occupants of cases covering lots where:
the land and those of the Adjoining owners, if − there is no controversy or opposition, or
known; and if not known, the applicant shall − contested lots, the value of which does not
state the extent of the search made to find exceed 100,000
them
6. If the application describes the land as AMENDMENTS IN ORDINARY REGISTRATION
bounded by a public or private way or Road, PROCEEDINGS
it shall state whether or not the applicant
1. Striking out one or The court may strike
claims any portion of the land within the more of the parcels of out at any time
limits of the way or road, and whether the
land applied for or by a
applicant desires to have the line of way or severance of the
road determined (Sec. 20, PD 1529)
application
7. Citizenship and Civil status of the applicant
2. Substantial change in New technical
• if married, name of spouse, and boundaries, increase in description and new
• if the marriage has been legally area, inclusion of publication and notice
dissolved, when and how the additional land are necessary
marriage relation was terminated 3. Joinder, substitution, File motion with court
8. Mortgage or Encumbrance affecting the land or discontinuance of any
or names of other persons who may have an of the parties
interest therein, legal or equitable 4. Decrease in area File motion with court;
9. If the applicant is a non-resident of the no need for new
Philippines, he shall file an instrument publication or notice
appointing an agent residing in the Phils. and
shall agree that service of any legal process If the amendment consists in the inclusion in the
shall be of the same legal effect as if made application for registration an area or parcel of
upon the applicant within the Philippines land not previously included in the original
(Sec. 16, PD 1529) application, as published, a new publication of the
amended application must be made. The purpose
Where To File Application of the new publication is to give notice to all
persons concerned regarding the amended
General Rule – RTC of the province or city application. Without a new publication, the
where the land is situated registration court cannot acquire jurisdiction over
the area or parcel of land that is added to the area
File together with application all original covered by the original application, and the
decision of the registration court would be a
nullity insofar as the decision concerns the newly NOTE: Form, Contents, Notice, Mailing, Posting
included land. But if the amendment consists in Requirements are the same as those required in
the exclusion of a portion of the area covered by original registration under PD 1529.
the original application and the original plan as
previously published, a new publication is not A judicial declaration that a parcel of land is public,
necessary. In the latter case, the jurisdiction of does not preclude even the same applicant from
the court is not affected by the failure of a new subsequently seeking a judicial confirmation of his
application. Benin v. Tuason, [57 SCRA 531, title to the same land, provided he thereafter
1974] complies with the provisions of Sec. 48 of C.A. 141,
as amended and as long as said public land
Requisites of Opposition: an opposition remains alienable and disposable. Director of
may be filed by any person claiming an Lands v. CA, [106 SCRA 426, 1981]
interest
1. Set forth objections to the application Proof of Private Ownership (STOP)
2. State interest claimed by oppositor 1. Spanish title (inadmissible and ineffective
3. Apply for the remedy desired proof of ownership in land registration
4. Signed and sworn to by him or by some proceedings filed after Aug. 16, 1976)
other duly authorized person 2. Tax declarations and tax payments (not
5. Filed on or before the date of initial hearing conclusive evidence of ownership, must be
6. If only a portion of the land applied for is coupled with proof of actual possession for
contested and such portion is not properly the period required by law)
delimited, court may require submission of 3. Other kinds of proof (ex. testimonial
a division plan approved by the Director of evidence to prove accretion, deeds of sale)
Lands 4. Presidential issuances and legislative acts
(constitutive of a fee simple title or absolute
GENERAL DEFAULT SPECIAL DEFAULT title in favor of the grantee, a law ceding full
Those persons who When a party appears at ownership to a government institution)
did not appear and initial hearing without
answer within the having filed an answer The holder of a Spanish title may still lose his
time prescribed and asks court for time to ownership of the real property to the occupant who
file answer but failed to actually possesses the same for the required
do so within period prescriptive period. Taking the law as a whole, it
allowed has clearly set a deadline for the filing of
applications for registration of ALL Spanish titles
under the Torrens system (i.e., 6 months from its
b. UNDER C.A. 141 effectivity or on 14 August 1976), after which, the
Spanish titles may no longer be presented to prove
Judicial Confirmation of Imperfect or ownership. Spanish titles can no longer be
Incomplete Title under the Public Land Act countenanced as indubitable evidence of land
• In rem, judicial proceedings ownership. Santiago v. SBMA, [G.R. No.
156888, November 20, 2006]
• The decree of registration issued is
conclusive and final
JUDGMENT is a decision of court constituting its
• Governed by court procedure and law of opinion after taking into consideration the
evidence evidence submitted.
When To File It becomes final upon the lapse of 15 days counted
Extended up to December 31, 2020, as provided from the receipt of notice of the judgment.
in Sec. 2 of RA 9176
However, notwithstanding the lapse of the 15-day
Limitation To Area Applied For period from receipt of judgment by the parties, the
Maximum of 12 hectares (Sec. 3, RA 6940) court continues to retain control over the case until
the expiration of 1 year after the entry of decree of
What Applicant Must Prove registration by the LRA. Republic v. Assosacion
• The land is alienable and disposable land of Benevola de Cebu [178 SCRA 692, 1989]
the public domain, and
• His possession was for the length of time and In special proceedings the purpose of execution of
in the manner and concept required by law judgment is to establish a status, condition or fact;
in
land registration proceedings, the ownership by a Process of Issuing The OCT
person of a parcel of land is sought to be 1. Within 15 days from finality of order of
established. After the ownership has been judgment directing registration of title – court
proved and confirmed by judicial declaration, no orders the LRA to issue decree of registration
further proceeding to enforce said ownership is and certificate of title
necessary, except when the adverse or losing 2. Clerk of court will send order of court and
party had been in possession of the land and the copies of judgment
winning party desires to oust him therefrom. 3. Writ of Demolition may be issued. The court
Ronald Ting v. Liro, [G.R. No. 168913, has authority to order, as a consequence of
March 14, 2007] the writ of possession issued by it, the
demolition of improvements introduced by
Post-Judgment Incidents the defeated oppositor or his successor-in-
1. Writ of Possession: order to sheriff to interest
deliver the land to the successful party 4. Administrator will issue a decree of
litigant; no prescription against: (1) the registration and original and duplicate of OCT
loser and (2) anyone unlawfully and that is signed by the Administrator, enter and
adversely occupying file decree of registration in LRA
5. Send to ROD the original and duplicate of
When writ may not issue: When a party title and certificate for entry in his
entered into property after issuance of final registration book
decree, is not an oppositor in registration 6. Enter in record book, dated, signed,
proceeding, and is in possession of land for at numbered and sealed to take effect upon
least 10 years date of entry
7. ROD to send notice to registered owner ready
2. Writ of Demolition: the complement of for delivery after payment of fees
writ of possession; to demolish 8. ROD shall send duplicate and note on each
improvements introduced by oppositor or certificate of title to whom it is issued
his successor in interest 9. Original copy to be filed in ROD
10. Bound in consecutive order
Means to Recover Possession
1. Forcible entry Attributes and Limitations on Certificates of
2. Unlawful detainer Title and Registered Lands
3. Accion publiciana 1. Free from liens and encumbrances
4. Accion reivindicatoria General Rule – Claims and liens of whatever
character existing against the land prior to the
Decree of Registration issuance of the certificate of title are cut off by
• The decree issued by the LRA pursuant to such certificate and the certificate so issued binds
the order of the court. the whole world, including the government.
• Binds the land, quiets title thereto, subject
only to such exceptions or liens as may be Exceptions: (CNT-PD)
provided by law i. Those noted on the certificate
• Conclusive upon all persons including the ii. Liens, claims, or rights arising or
government existing under the laws and the
Constitution, which are not by law required
Contents of The Decree (DMD-DO) to appear on record in the Register of
1. Date, hour and minute of its entry Deeds in order to be valid
2. Whether the owner is married or iii. Unpaid real estate taxes levied and
unmarried, and if married, the name of the assessed within 2 years immediately
spouse; provided that if the land is conjugal preceding the acquisition of any right over
property, the decree shall be issued in the the land by an innocent purchaser for value
name of both spouses iv. Any public highway, or private way
3. If the owner is under disability, the nature established or recognized by law, or any
of such disability, and if a minor, his age government irrigation, canal or lateral
4. Description of the land and shall set forth thereof, if the certificate of title does not
the estate of the owner, and also show their state the boundaries of such highway or
relative easements, liens, attachments, and irrigation canal or lateral thereof have been
other encumbrances determined
5. Other matters to be determined in v. Any disposition of the property or limitation
pursuance of the law on the issue thereof pursuant to PD 27 or
any other law or regulations on agrarian certificate of title shall not be subject to collateral
reform attack. It cannot be altered, modified, or cancelled
except in a direct proceeding in accordance with
2. Incontrovertible and indefeasible the law.”
General Rule – Upon expiration of 1 year
from and after the entry of the decree of Torrens title cannot be collaterally attacked. The
registration in the LRA, the decree and the question on the validity of a Torrens title, whether
corresponding certificate of title becomes fraudulently issued or not, can be raised only
incontrovertible and indefeasible. in an action expressly instituted for that purpose.
The action for the declaration of nullity of deed of
Exceptions: (PNF) sale commenced by the petitioners in the RTC is
a. If previous not the direct proceeding required by law to attack
valid title of the same land exists a Torrens certificate of title. Tapuroc v.
b. When land Loquellano de Mende, 512 SCRA 97 (2007
covered is not capable of registration
c. When 4. Torrens Certificate presumed valid and
acquisition of certificate is attended devoid of flaws
by fraud General Rule – Torrens Certificate of Title is
presumed to have been regularly issued,
The rule on the incontrovertible nature of a valid, and without defects. The buyer has the
certificate of title applies when what is right to rely upon the face of the Torrens title
involved is the validity of the OCT, not when and dispense with the trouble of inquiring
it concerns that of the TCT. Arguelles v. further.
Timbancaya, [72 SCRA 193, 1976]
Exception – When he has actual knowledge
2. Registered land not subject to of facts and circumstances that would impel
prescription a reasonably cautious man to make inquiry.
a. Even adverse, notorious and continuous
possession under claim of ownership for While, it is a familiar doctrine that a forged or
the period fixed by law is ineffective fraudulent document may become the root of a
against a Torrens title. JM Tuason and valid title, if title to the property has been
Co. Inc. v. CA, [93 SCRA 146, 1979] transferred from the forger to an innocent
b. The fact that the title to the land was purchaser in good faith, the same does not apply in
lost does not mean that the land ceased case of banking institutions or those engaged in
to be registered land before the real estate for they are expected expected to
reconstitution of its title. It cannot exercise more care and prudence than private
perforce be acquired by prescription. individuals in their dealing with registered lands. In
Ruiz v. CA, [79 SCRA 525 , 1977] the absence of inquiry, the respondent Bank
c. Laches may be invoked to bar cannot and should not be regarded as a
reconveyance of land to the registered mortgagee/purchaser in good faith. Erasusta v.
owner only if there are intervening CA, [G.R. No. 149231, July 17, 2006]
rights of third persons which may be
affected or prejudiced if such land is 5. General incidents of registered land
returned to the registered owner. De
Lucas v. Gamponia, [100 Phil 277 , Registered land or the owners thereof are not
1956] relieved from the following:
a. From any rights incident to the relation of
With respect to a claim of acquisitive husband and wife, landlord and tenant
prescription, it is baseless when the land b. From liability to attachment or levy on
involved is a registered land since no title to execution
registered land in derogation of that of the c. From liability to any lien of any
registered owner shall be acquired by adverse description established by law on the land
possession. Feliciano v. Zaldivar, [G.R. No. and buildings thereon, or in the interest
162593, Sept. 26, 2006] of the owner in such land or buildings
d. From any right or liability that may arise
3. Certificate of title not subject to due to change of the law on descent
collateral attack e. From the rights of partition between co-
owners
Sec. 48 of P.D. 1529 provides that “a f. From the right of the government to take
the land by eminent domain Additionally, while the court has no jurisdiction to
g. From liability to be recovered by an adjudicate lands already covered by a Certificate of
assignee in insolvency or trustee in Title, it is nonetheless true that this rule only
bankruptcy under the laws relative to applies where there exists no serious controversy
preferences as to the certificate’s authenticity vis-à-vis the land
h. From any other rights or liabilities covered therein. Republic v. Vera, 120 SCRA
created by law and applicable to 210 (1983)
unregistered land
BASIS PD 1529 CADASTRAL
6. Where certificate of title is obtained Nature Voluntary Compulsory
by a trustee Applicant Landowner Director of
a. Trustee who obtains a Torrens title in Lands
his name, over property held in trust by Lands usually all classes of
him for another cannot repudiate the covered involves lands are
trust relying on the registrations, such private land included
being one of the limitations upon the
finality of title it may also
b. Trustee could not perforce legally refer to public
convey ownership of the registered agricultural
property in her will for she is not the lands if the
absolute owner thereof object of the
action is
confirmation of
3. CADASTRAL REGISTRATION an imperfect
title
CADASTRAL REGISTRATION is a proceeding in Parties Applicant and Government,
rem initiated by the filing of a petition for opponent Landowners
registration by the government, not by the must come to
persons claiming ownership of the land subject court as
thereof, and the latter are, on the pain of losing claimants of
their claim thereto, in effect, compelled to go to their own lands
court to make known their claim or interest Purpose Petitioner Government
therein and to substantiate such claim or interest comes to court asks the court
to confirm his to settle and
Procedure: (NN-CP-PAHD-DI) title and seeks adjudicate the
1. Notice of cadastral survey published once the registration title of the land
in OG and posted in conspicuous place with of the land in
a copy furnished to the mayor and his name
barangay captain Person who Landowner Government
2. Notice of date of survey by the Bureau of requests
Land Management and posting in bulletin the survey
board of the municipal building of the Effect of • no adverse • if none of the
municipality or barrio, and he shall mark judgment claim applicants can
the boundaries of the lands by monuments • if the prove that he
set-up in proper places thereon applicant fails is entitled to
3. Cadastral survey to prove his the land, the
4. Filing of petition title, his same shall be
5. Publication (twice in successive issues of application declared public
OG), mailing, posting may be (res judicata)
6. Filing of answer dismissed
7. Hearing of the case without
8. Decision prejudice (no
9. Issuance of the decree and certificate of res judicata)
title
PATENTS
NOTE: The cadastral court is not limited to a Classification of Land of Public Domain:
mere adjudication of ownership in favor of one or The classification is the exclusive prerogative of
more claimants. If there are no successful executive and not of the judiciary
claimants, the property is declared public land.
Anyone who applies for confirmation of imperfect Title Issued Pursuant to Registration of
title has the burden of proof to overcome the Patent:
presumption that the land sought to be 1. Indefeasible when registered, and deemed
registered forms part of public domain (Regalian incorporated with Torrens system 1 year
doctrine) after the issuance of patent
2. GR: May not be opened 1 year after entry
Under the Constitution: by LRA (otherwise, confusion and
1. Agricultural – the only classification uncertainty on the government system of
subject to alienation the distribution of public lands may arise
2. Forest or timber and this must be avoided)
3. Mineral lands Exception: if it is annullable on ground of
4. National park fraud, then it may be reopened even after 1
year because registration does not shield
Under the Public Land Act: bad faith
1. Alienable/disposable: • The court, in the exercise of its equity
a. Agricultural jurisdiction, may direct reconveyance
b. Residential, commercial, industrial even without ordering cancellation of
c. Educational, charitable title
d. Town sites and for public and quasi-
public uses Homestead Restrictions:
2. Timber lands: inalienable 1. Land cannot be alienated within 5 years after
3. Mineral lands: inalienable approval of application for patent
• If patent or title is issued, it is void ab 2. It cannot be liable for satisfaction of debt
initio for lack of jurisdiction within 5 years after approval of patent
General Rule – It is not subject to application
acquisitive prescription even if in 3. Subject to repurchase of heirs within 5 years
possession for long time, it will not ripen after alienation when allowed already
into ownership 4. No private corporation, partnership,
association may lease land unless it is solely
Exception – Mineral lands and forest for commercial, industrial, educational,
lands acquired before inauguration of religious or charitable purpose, or right of
Commonwealth in November 15, 1935 way (subject to consent of grantee and
because there are vested rights which are approval of Secretary of Environment &
protected Natural Resources)
FISHPONDS Exceptions:
Before: It was included in the definition of 1. Action for partition because it is not a
agriculture, therefore the conversion of conveyance
agricultural land to fishponds did not change 2. Alienations or encumbrances made in favor
character of land of the government
Now: It has a restricted meaning; Fishponds are Erring Homesteader not Barred by Pari Delicto
of a distinct category and cannot be alienated - Pari delicto rule does not apply in void
but may be leased from government contracts
- Violation of prohibition results in void contract
When Government Grant Deemed Acquired - Action to recover does not prescribe
by Operation of Law:
1. Deed of conveyance issued by government KIND TO OTHER REQUIREMENTS
patent/grant S WHOM
2. Registration with the ROD: mandatory, it is GRANTE
the operative act to convey and transfer D
title • Grantee does not own more
3. Actual physical possession, open and To any than 12 hectares of land in the
continuous Home Filipino Philippines or has not had the
• Land ceased to be part of public domain - citizen benefit of any gratuitous
stead over the allotment of more than 12
& now ownership vests to the grantee
Paten age of 18 hectares
• Any further grant by Government on t years or • must have resided
same land is null and void head of a continuously for at least 1 year
• Upon registration, title is indefeasible family in the municipality where the
land is situated Procedure for Registration of Public Lands:
• must have cultivated at least (IFEFI)
1/5 of the land applied for 1. Official issues an instrument of conveyance
• Grantee does not own more 2. File the instrument with ROD
than 12 hectares of land 3. Instrument is to be entered in books and
To any • has continuously occupied owner’s duplicate to be issued
natural and cultivated, either by • Instrument is only a contract between
Free born himself or his predecessors-in-
Government and private person and
Paten citizen of interest, tracts of disposable
does not take effect as conveyance if
t the agricultural public land for at
Philippine least 30 years prior to March unregistered, it is registration which is
s 28,1990 operative act of conveying land;
(filing • has paid real property taxes evidence of authority for ROD to
ended on the property while the same register
Dec. 31, has not been occupied by any 4. Fees to be paid by grantee
2000) person 5. After issuance of certificate of title, land is
• grant will be limited to 12 deemed registered land within the purview of
hectares only the Torrens system
• to have at least 1/5 of the
land broken and cultivated RESTRICTION ON ALIENATION/
Citizens of within 5 years from the date of ENCUMBRANCE OF LANDS TITLED PURSUANT
the the award (public auction) TO PATENTS:
Philippine • shall have established actual 1. Lands under free patent or
s of lawful occupancy, cultivation, and homestead patent is prohibited from being
age or improvement of at least 1/5 of alienated/encumbered, except if in favor of
head of the land until the date of such the government, within 5 years from and
the family final payment after the issuance of the patent or grant.
may • for agricultural lands suitable
When lands are conveyed within that period,
purchase for residential, commercial or
the owner-vendor, his widow or heirs, may
Sales public industrial purposes, patent is
repurchase the same within five years from
Paten agricultur issued only after:
t al land of 1.) full payment of purchase conveyance, such right cannot be waived.
not more price, and Republic v. Heirs of Felipe Alejaga, Sr.,
than 12 2.) completion of the 393 SCRA 361 (2002)
hectares construction of permanent 2. Transfer or conveyance of any
improvements appropriate for homestead after 5 years but before 25 years
purpose for which the land is after the issuance of the title without the
purchased (must be completed approval of the DENR Secretary
within 18 months from date of 3. Lands acquired under emancipation
award) patents issued to landless tenants and
To any • does not own a home lot in farmers must not be alienated or
citizen of the municipality in which he encumbered within 10 years from issuance of
legal age resides the title
for • in good faith, established his 4. Conveyances and encumbrances
residential residence on a parcel of land of made by persons belonging to the “non-
purposes public domain not needed for Christian tribes” may be made only when the
public service person making the conveyance or
• not more than 1000 sq. m. encumbrance is able to read and understand
• occupant must have the language in which the instrument or deed
constructed his house on the is written. If illiterate, must be approved by
land and actually resided
the then Commissioner of Mindanao and Sulu
therein
• no public auction required
• not subject to any restriction
NATURE OF TITLE TO PUBLIC LANDS
against encumbrance or CONVEYED:
alienation
Speci To Non- • Secretary of the DILG shall 1. Indefeasible And Conclusive
al Christian certify that the majority of the The certificate of title becomes indefeasible and
Paten Filipinos non-Christian inhabitants of incontrovertible upon the expiration of one year
t under the any given reservation have from the date of the issuance of the order for the
Public advanced sufficiently in issuance of the patent. As such, the land cannot be
Land Act civilization the subject of a cadastral proceeding nor decreed
to
another person Grounds (FAMINE):
a. FAME
In absence of registration, title to public land b. Newly discovered evidence:
is not perfected and therefore not Discovered after trial
indefeasible not discovered earlier even with exercise of
In case of 2 titles obtained on same date, the diligence
one procured through a decree of registration is will probably alter judgment
superior than patent issued by director of lands c. Award of excessive damages, or insufficiency
of evidence to justify decision, or that the
2 titles procured by one person: one from decision is against the law
homestead patent, and one from judicial decree Appeal
and sold to 2 different persons, the one who by aggrieved party
bought it for value and in good faith and who Within 15 days from notice of judgment
registered first shall have preference To the CA by ordinary appeal; thence to SC by
petition for review
A free patent obtained through fraud or Relief from Judgment
misrepresentation is void. Furthermore, the (Rule 38 § 2)
one-year prescriptive period provided in the By aggrieved party
Public Land Act does not bar the State from Within 60 days from knowledge of, and 6 months
asking for the reversion of property acquired from, judgment
through such means. Once a patent is registered no new trial
and the corresponding certificate of title issued, upon finality of judgment
the land covered by them ceases to be part of
the public domain and becomes private property. Requisites:
indefeasibility of a title does not attach to titles a. FAME, with affidavit of merit; in case of
secured by fraud and misrepresentation. Well- extrinsic fraud, state that deprived of hearing
settled is the doctrine that the registration of a or prevented from appealing
patent under the Torrens System does not by b. After judgment
itself vest title; it merely confirms the registrant’s c. Person deprived of right is party to case
already existing one. Verily, registration under (applicant or oppositor)
the Torrens System is not a mode of acquiring Petition for Review of Registration Decree
ownership. Therefore, under Section 101 of (§ 32 PD1529)
Commonwealth Act No. 141, the State -- even By aggrieved party, including person deprived of
after the lapse of one year -- may still bring an opportunity to be heard
action for the reversion to the public domain of To be filed in same registration case
land that has been fraudulently granted to Within 1 year after entry of decree of
private individuals. Further, this indefeasibility registration
cannot be a bar to an investigation by the State it will not prosper if transferred to innocent
as to how the title has been acquired, if the purchaser for value
purpose of the investigation is to determine
whether fraud has in fact been committed in Grounds:
securing the title. Republic v. Heirs of a. actual or extrinsic fraud, committed outside
Alejaga, [393 SCRA 361, 2002] trial, preventing petitioner from presenting
his side
4. REMEDIES b. fatal infirmity in the decision for want of due
process
REMEDIES AVAILABLE TO AGGRIEVED PARTY c. lack of jurisdiction of the court
IN REGISTRATION PROCEEDINGS Requisites:
Motion to Lift/Set Aside order of default a. Petitioner has a real and dominical right
(Rule 9 § 3) b. He has been deprived of such right
By defaulted oppositor c. Through actual or extrinsic fraud
Before judgment d. The petition is filed within 1 year from the
Fraud, accident, mistake, excusable negligence issuance of the decree
(FAME) and with valid defense, under oath e. The property has not been passed on to an
Motion for New Trial innocent purchaser for value (IPV)
(Rule 37) Action for
By aggrieved party Reconveyance
Within 15 days from receipt of judgment (§96 PD 1529/ §102 Act 496)
By aggrieved party, whose land was registered
a.
wrongly to another person T
Before issuance of decree, or within/after 1 year he aggrieved party sustained loss or damage,
from entry or is deprived land or any estate or interest
Available so long as property not yet passed to therein
IPV b. Such loss, damage or deprivation was
action in personam occasioned by the bringing of the land under
if based on fraud, it must be instituted within 4 the operation of the Torrens system or arose
years from the discovery of the fraud after the original registration of the land
if based on implied trust: it must be filed within c. The loss, damage or deprivation was due
10 years from issuance of OCT, to: fraud, or any error, omission, mistake, or
if action brought by registered owner or his misdescription in any certificate of title or in
children, co-heir, or plaintiff in possession: any entry or memorandum in the registration
imprescriptible book. (Loss or damage should not be due to
if based on expressed trust: imprescriptible breach of trust or mistake in resurvey
if based on void contract: imprescriptible resulting in expansion of area in certificate of
title.)
Action for Damages d. The aggrieved party was not negligent.
e. He is barred under the provisions of PD
By aggrieved party 1529 or under the provisions of any law from
After 1 year from decree and no reconveyance recovering such land;
possible due to IPV f. The action has not prescribed: must be
Within 4 years from discovery of fraud (actual or instituted within 6 years from the issuance of
constructive) the certificate of title (If plaintiff is minor,
Against person responsible for fraud insane or imprisoned, he has additional 2
years after disability is removed to file the
Requisites: action.)
a. Person is wrongfully deprived of his land by Cancellation Suits
registration in name of another By aggrieved party or the government
b. No negligence on his part In case of double title: earlier title prevails,
c. Barred/ precluded from bringing an action unless procured by fraud or is jurisdictionally
(after 1 year from decree) flawed. The later title is void even if IPV derives
d. Action for compensation has not prescribed title therefrom
Action for Compensation from the In case of non-registered land: to be filed by
Assurance Fund the Sol-Gen for cancellation of title or reversion
to State)
By person deprived of his land by reason of Voiding or cancellation of OCT does not affect
operation of Torrens System, provided: no derivative TCTs if their holders not given
negligence on his part and barred from opportunity to be heard and defend their title
recovering land Annulment of Judgment
Against person responsible for fraud, and ROD May only be availed of when the ordinary
and National Treasurer remedies of new trial, petition for relief, or
other appropriate remedies are no longer
Compensation: fair market value of land at available through no fault of the petitioner.
time of loss. Amount to be recovered not Linzag v. CA, [291 SCRA 304 , 1998]
limited to 500,000 which is maintained as Reversion Suit
standing fund. If fund is not sufficient, National The objective is the cancellation of the title and
Treasurer is authorized to make up for the consequential reversion of the land to the
deficiency from other funds available to State
Treasury even if not appropriated. Grounds:
a. Violation of Sections 118, 120, 121 and
Execution first against person responsible for 122 of the Public Land Act (ex. alienation
fraud; if insolvent, against national treasury. or sale of homestead executed within the
Thereafter, the Government shall be 5 year prohibitory period)
subrogated to the rights of plaintiff to go b. When the land patented and titled is not
against other parties or securities capable of registration
c. Failure of the grantee to comply with
Any court of competent jurisdiction: RTC in city conditions imposed by law to entitle him
where property lies or resident of plaintiff to a patent or grant
d. When area is an expanded area
Requisites: e. When the land is acquired in violation of
c.
the Constitution (e.g. land acquired by an c.
alien) After notice and hearing, the court is to order
issuance of new title with a memorandum
Indefeasibility of title, prescription, laches, and that it is issued in place of lost certificate
estoppel do not bar reversion suits (duplicate)
Quieting of Title
2. Adverse claim in registered land
(Article 476 of the new civil code)
Different from lis pendens:
By registered owner or person with an equitable
right or interest in the property. Mamadsul v.
Lis pendens has no expiration period but
Moson, [190 SCRA 82, 1990]
adverse claim is only for 30 days.
An ordinary civil case brought to remove clouds
Lis pendens is a notice that property is in
on the title to real property or any interest
litigation while adverse claim signifies that
therein, by reason of any contract, record,
somebody is claiming better right
claim, encumbrance, or proceeding that is void,
voidable or unenforceable, and may be
Recent Ruling: adverse claim can only be
prejudicial to said title
removed upon court order, therefore, it is
Quasi-in rem
considered to be the more permanent and
If plaintiff is in possession, imprescriptible;
stable one as compared to lis pendens
if not in possession, must be brought within 10
years from loss of possession
3. Petition Seeking Surrender of Duplicate
Criminal Action
Title
(§ 116 Act 496)
When a person in possession of the owner’s
duplicate certificate fails to surrender the same to
The State may criminally prosecute for perjury
the ROD, a party in interest may file a petition in
the party who obtains registration through
the RTC to compel the surrender of such duplicate
fraud, such as by stating false assertions in the
title.
sworn answer required of applicants in
cadastral proceedings. People v. Cainglet, 16
Grounds: registration pursuant to voluntary and
SCRA 749 (1966)
involuntary conveyances and issuance of a new
certificate and for purposes of amendment or
MORE ON THE ASSURANCE FUND
alteration
Upon entry of certificate in name of owner or
TCT, ¼ of 1% based on assessed value of land
After hearing, the court may order issuance of a
shall be paid to the ROD as a contribution to the
new certificate and annul the old certificate
assurance fund. In case there is no assessment
The new certificate shall contain an annotation
yet, a sworn declaration of 2 disinterested
regarding the annulment of the old certificate
persons on the value of the land, subject to court
approval, is required.
4. Amendment and Alteration of Certificate
of Title
This shall be in the custody of the National
A certificate of title entered in a registration book
Treasurer. It shall be invested until the principal
cannot be altered, amended except in direct
plus interest aggregates to 500,000. The excess
proceeding in court (summary proceeding). A
shall be paid to the Assurance Fund and be
court order is necessary to alter entries of such
included in the annual report of Treasurer to
registration books.
Secretary of Budget.
A petition for such purpose may be filed by the (a)
PETITIONS AND MOTIONS AFTER ORIGINAL
registered owner, or (b) other person having an
REGISTRATION:
interest in the registered property, or (c) in proper
1. Lost Duplicate Certificate
cases, the ROD with the approval of the LRA
a. Person in interest makes a
Administrator
sworn statement regarding the loss or
destruction of the owner’s duplicate
Grounds (CRIMENN):
certificate of title to be filed with ROD. If
1. New interest that does not appear on the
statement is false, he can be charged with
instrument have been created
the complex crime of estafa through
2. Interest have been terminated or ceased
falsification of public document
3. Omission or error was made in entering
b. File a petition for replacement of
certificate
lost or destroyed owner’s duplicate of OCT/
4. Name of person on certificate has been
TCT in court for the issuance of new title
changed
5. Registered owner has married or petition, it shall issue a corresponding order
registered as married and the marriage to ROD.
has terminated
6. Corporation, which owned registered Sources:
land, has dissolved and has not conveyed 1. FOR OCT (in this order):
the property within 3 years after its a. Owner’s duplicate of the
dissolution certificate of title
7. When there is reasonable ground for b. Co-owner’s, mortgagee’s
the amendment or alteration. What or lessee’s duplicate of said certificate
corrections are permitted in title (which c. Certified copy of such
does not include lands included in certificate, previously issued by the
original; technical description as long as ROD
original decree of registration will not be d. Authenticated copy of the
reopened and rights or interest of decree of registration or patent, as the
persons not impaired; old survey was case may be, which was the basis of the
incorrect; substitution of name of certificate of title,
registered owner) e. Deed of mortgage, lease,
a. Alterations which do not impair or encumbrance containing description
rights and of property covered by the certificate of
b. Alterations which impair rights: title and on file with the ROD, or an
with consent of all parties authenticated copy thereof indicating
c. Alterations to correct obvious that its original had been registered
mistakes f. Any other document
which, in the judgment of the court, is
5. Reconstitution of Original Certificate
sufficient and proper basis for
of Title
reconstitution.
The restoration of the instrument which is
2. FOR TCT
supposed to have been lost or destroyed in its
a. Same as sources (a), (b),
original form and condition, under the custody of
ROD and (c) for reconstitution of OCT
b. Deed of transfer or other
Purpose: to have the same reproduced, after document containing description of
proper proceedings, in the same form they were property covered by TCT and on file
when the loss or destruction occurred. Heirs of with the ROD, or an authenticated copy
Pedro Pinote v. Dulay, [187 SCRA 12, 1990] thereof indicating its original had been
registered and pursuant to which the
The applicant should prove : lost or destroyed certificate of title was
1. The loss or the destruction of the issued
title sought to be reconstituted c. Same as sources (e) and
and (f) for reconstitution of OCT
2. At the time the said title was lost
or destroyed, he was the ADMINISTRATIVE RECONSTITUTION
registered owner thereof
May be availed of only in case of:
a. When reconstituted, the new title has 1. Substantial loss or destruction
the same validity as old one of the original land titles due to fire, flood,
b. Kinds of Reconstitution: or other force majeure as determined by
a. Judicial the Administrator of the LRA
b. Administrative 2. The number of certificates of
title lost or damaged should be at least
JUDICIAL RECONSTITUTION 10% of the total number in the possession
Process: of the Office of the ROD
1. File a petition with the RTC (In rem 3. These lost or damaged titles
proceeding) should not be less than 500, and
2. The court shall cause a NOTICE to 4. Petitioner must have the
be PUBLISHED, POSTED and MAILED. Non- duplicate copy of the certificate of title
compliance voids the proceeding as such (RA 6732)
requirements are jurisdictional
Sources:
3. When the court grants the
1. Owner’s duplicate of the certificate of
title occupants and adjacent owners).
2. Co-owner’s, mortgagee’s, or lessee’s PUBLICATION, POSTING AND SENDING BY MAIL
duplicate of said certificate should be done at least 30 days prior to date of
hearing. These notice requirements are mandatory
Contents and jurisdictional. Non-compliance voids the
a. That the owner’s duplicate proceeding.
of the certificate of title had been lost
or destroyed The publication of the petition ,the service of the
b. That no co-owner’s, notice of hearing to the adjoining owners and
mortgagor’s, or lessee’s duplicate had actual occupants of the land, as well as posting of
been issued the notices are mandatory and jurisdictional
c. The location, area and requisites… If an order of reconstitution is issued
boundaries of the property without any previous publication, such order of
d. The nature and description reconstitution is null and void. Even the publication
of the buildings or improvements, if of the notice of hearing in a newspaper of general
any, which do not belong to the owner circulation like the Manila Daily Bulletin, is not a
of the land, and the names and substantial compliance with the law because
addresses of the owners of such Section 13 specifies publication in the OG and does
buildings or improvements not provide for any alternative medium or manner
e. The names and addresses of of publication. MWSS v. Sison, [124 SCRA 394,
the (a) occupants or persons in 1983]
possession of the property, (b) of the
owners of the adjoining properties Notice must be actually sent or delivered to parties
and (c) of all persons who may have affected by the petition for reconstitution. The
any interest in the property order of reconstitution issued without compliance
f. A detailed description of the with the said requirement never becomes final - it
encumbrance, if any, affecting the was null and void. Manila Railroad v. Moya,
property [215 Phil 593, 1984]
g. A statement that no deeds
or other instruments affecting the Service of notice of the petition for reconstitution
property have been presented for filed under RA 26 to the occupants of the property,
registration, or, if there be any, the owners of the adjoining properties, and all persons
registration thereof has not been who may have any interest in the property is NOT
accomplished, as yet REQUIRED if the petition is based on the owner’s
duplicate certificate of title or on that of the co-
NOTE: owner’s, mortgagee’s, or lessee’s. Sections 9 and
The law provides for retroactive application 10 requires that 30 days before the hearing (1) a
thereof to cases 15 years immediately preceding notice be published in 2 successive issues of the
1989 OG at the expense of the petitioner, and (2) such
notice be posted at the main entrances of the
When the duplicate title of the landowner is lost, provincial building and of the municipal hall where
the proper petition is not reconstitution of title, the property is located. The notice shall state the
but one filed with the court for issuance of new following: (1) the number of the certificate of title,
title in lieu of the lost copy (2) the name of the registered owner, (3) the
names of the interested parties appearing in the
PUBLICATION, MAILING AND POSTING IN reconstituted certificate of title, (4) the location of
PETITIONS FOR RECONSTITUTION OF TITLE: the property, and (5) the date on which all persons
having an interest in the property must appear and
Notice shall be PUBLISHED twice in successive file such claims as they may have. Puzon v. Sta.
issues of the Official Gazette, Lucia, [353 SCRA 699, 2001]
Must be POSTED on the main entrance of the The failure to meet any of the necessary
provincial building and of the municipal building publication, notice of hearing and mailing
of the municipality or city where the land is requirements did not vest jurisdiction of the case
situated, and to the court. Thus, the judgment rendered by the
RTC regarding the reconstitution of title is void.
Must be SENT BY REGISTERED MAIL or Republic v. Sanchez [G.R. No. 146081, July
otherwise, at the expense of the petitioner, to 17, 2006]
every person named in said notice (actual
When the owner’s duplicate certificate of title a. as a contract between the parties
has not been lost, but is in fact in the possession thereto, and
of another person, then the reconstituted b. as evidence of authority to the ROD to
certificate is void, because the court that register such documents
rendered the decision had no jurisdiction. 2. It is only the act of registering the
Consequently, the issuance of TCT No. T-17993 is instrument in the ROD of the province or
also void, as it emanated from the void in city where the land lies which is the
Zaldivar’s name. The indefeasibility of a Torrens operative act that conveys ownership or
title does not apply where fraud attended the affects the land insofar as third persons
issuance of the title, such as when it was based are concerned.
on void documents. Feliciano v. Zaldivar, 3. The act of registration creates a
[G.R. No. 162593, September 26, 2006] constructive notice to the whole world of
such voluntary or involuntary instrument
6. Registration of Transaction evidenced or court writ or process.
by lost document
ROD is forbidden to effect registration of lost or VOLUNTARY INVOLUNTARY
destroyed documents DEALINGS DEALINGS
Refer to deeds, Refer to such writ or
Steps by interested parties: instruments, or order or process issued
1. Procure an authenticated copy of lost or documents which are by a court of record
destroyed instrument results of the free and affecting registered land
2. Secure an order from court voluntary acts of the which by law should be
parties thereto registered to be
OFFENSES IN LAND REGISTRATION: effective, and also to
1. Larceny such instruments which
2. Perjury: false statement under oath are not the willful acts of
3. Fraudulent procurement of certificate the registered owner
4. Forgery and which may have
a. Forging of seal in ROD, name, signature been executed even
or handwriting of any officer of court of without his knowledge or
ROD against his consent
b. Fraudulent stamping or assistance in • Sale • Attachment
stamping • Real property • Injunction
c. Forging of handwriting, signature of mortgage • Mandamus
persons authorized to sign • Lease • Sale on execution of
d. Use of any document which an • Pacto de retro sale judgment or sales for
impression of the seal of the ROD is • Extra-judicial taxes
forged settlement • Adverse claims
5. Fraudulent sale: sale of mortgaged • Free • Notice of lis pendens
property under the misrepresentation that patent/homestead
it is not encumbered; deceitful disposition • Powers of attorney
of property as free from encumbrance • Trusts
An innocent Entry thereof in the day
F. SUBSEQUENT REGISTRATION purchaser for value of book of the ROD is
registered land sufficient notice to all
SUBSEQUENT REGISTRATION becomes the persons even if the
Where incidental matters after original registered owner the owner’s duplicate
registration may be brought before the land moment he presents certificate of title is not
registration court by way of motion or petition and files a duly presented to the ROD
filed by the registered owner or a party in notarized and valid
interest. deed of sale and the
same is entered in the
Rules as to the necessity and effects of day book and at the
registration in general same time he
1. Except a will that purports to convey or surrenders or
affect a registered land, the mere presents the owner’s
execution of the deeds of sale, duplicate certificate
mortgage, or lease or other voluntary of title covering the
documents serve only 2 purposes: land sold and pays
3.
the registration fees 3.
Purchaser in bad faith. Egeo v. CA, [174 SCRA
Need to present title No presentation
484, 1989]
to record the deed in required; annotation in
4. Where a person buys land not from the
registry & to make entry book is sufficient
registered owner but from one whose rights
memorandum on title
to the land has been merely annotated on
the certificate of title. Quiniano v. CA, [39
SCRA 221, 1971]
5. Sufficiently strong indications to impel closer
1. VOLUNTARY DEALINGS inquiry into the location, boundaries, and
condition of the lot. Francisco v. CA, [153
Operative Act: registration by owner, if deed is SCRA 330, 1987]
not registered, is binding only between parties
Person’s legal interest cannot raise this exception
General Rule – MIRROR DOCTRINE: Where
there is nothing on the certificate of title to Principle of caveat emptor simply requires the
indicate any cloud or vice in the ownership of the purchaser of real property to be aware of the
property, or any encumbrance thereon, the alleged title of the vendor such that one who buys
purchaser is not required to explore further than without checking the vendor's title takes all the
what the Torrens title upon its face indicates in risks and losses consequent to such failure. While a
quest for any hidden defect or inchoate right that buyer of registered land need not go beyond its
may defeat his right thereto. Fule v. Legare,[ 7 certificate of title, the buyer is obliged to
SCRA 351, 1963] investigate or inspect the property sold to him
when there are circumstances that would put him
Every person dealing with registered land may on guard, such as the presence of occupants other
safely rely on the correctness of the certificate of than the registered owner. This does not apply in
title issued therefore Even if a decree in a this case. D’Oro Land v. Claunan,[ 516 SCRA
registration proceeding is infected with nullity, 681, 2007]
still, an innocent purchaser for value relying on a
Torrens title issued in pursuance thereof is 6. Purchases land with a certificate of title
protected. Cruz v. CA & Suzara, [281 SCRA containing a notice of lis pendens
491, 1997] 7. Purchaser had full knowledge of flaws and
defects of the title. Bernales v. IAC, [166
Although generally a forged or fraudulent deed is SCRA 519, 1988]
a nullity and conveys no title, however, there are
instances where such a fraudulent document Process of Registration: (Generally)
may become the root of a valid title. One such 1. File the instrument creating or transferring
instance is where the certificate of title was the interest and the certificate of title with
already transferred from the name of the true ROD, including:
owner to the forger, and while it remained that a. Owner’s duplicate
way, the land was subsequently sold to an b. Payment of fees and documentary stamp
innocent purchaser. Fule v. Legare, [7 SCRA tax
351, 1963] c. Evidence of full payment of real estate
tax
Exceptions – (BOB-MILK) d. Document of transfer: 1 additional copy
1. Where the purchaser or mortgagee is a for city/provincial assessor
bank/financing institution, the general rule 2. ROD shall make a memorandum on the
that a purchaser or mortgagee of the land certificate of title, signed by him
is not required to look further than what 3. Issuance of the TCT
appears on the face of the title does not
apply. Dela Merced v. GSIS, [365 SCRA Registration of Real Property Mortgage
1, 2001] 1. Execution of deed in a form sufficient in law
2. The ruling in Fule v. Legare cannot be (public instrument)
applied where the owner still holds a valid 2. Registration with ROD where the land lies
and existing certificate of title covering the a. Present deed of mortgage together with
same property because the law protects b. Owner’s Duplicate and affidavit of good
the lawful holder of a registered title over faith
the transfer of a vendor bereft of any c. Payment of fees
transmissible right. Tomas v. Tomas, [98 d. ROD shall enter upon original certificate of
SCRA 280, 1980] title and upon duplicate a memorandum
3.
(date, time of filing, signature, file 3.
number assigned to deed) No new certificate shall be issued
e. ROD to note on the deed the date and
time of filing, and reference to volume NOTE: When there is prohibition in mortgaged
and page of the registration book in property as regards subsequent conveyances, etc.,
which it was registered leasehold cannot be registered in the title thereof
3. No duplicate need be issued
Effects of Registration
Registration of Chattel Mortgage 1. Creates a real right but without prejudice to
1. Execution of document rights of 3rd persons
2. Present the document together with affidavit 2. If it is not registered, it is valid as between
of good faith parties but not to 3rd persons without notice
3. Payment of fees
4. ROD enters in Day Book in strict order of their May Aliens Register Lease? Yes
presentation chattel mortgages and other 1. May be granted temporary rights for residential
instruments relating thereto (primary purposes
process) 2. Limit: 25 years, renewable for another 25 years
5. ROD thereafter enters in a more detailed Who Else May Register? Builder in Good Faith
form the essential contents of the instrument
in the Chattel Mortgage Register Registration of Trust
(complementary process) 1. Implied Trust: present a sworn statement
claiming interest by reason of an implied trust
Effects of Registration with description of land, the name of the
1. Creates a lien that attaches to the property in registered owner and a reference to the
favor of the mortgagee number of the certificate of title shall be
2. Constructive notice of his interest in the registered in ROD
property to the whole world 2. Express Trust: instrument creating the trust
does not prohibit registration
Effects of Failure to Register
*1. Valid between parties but void against 3rd Registration of Appointed Trustee by Court
persons *7. Certified copy of decree shall be presented to
*2. If instead of registration, it is delivered, it ROD and surrender duplicate certificate
shall be a pledge and not a chattel mortgage *8. Cancel duplicate & new certificate shall be
(if no chattel mortgage deed executed) entered by ROD
*3. Actual knowledge is same effect as
registration 2. INVOLUNTARY DEALINGS
An Affidavit of Good Faith states that: Transactions affecting land in which cooperation of
1. Mortgage is made to secure obligation registered owner is not needed, or even against his
specified will
2. That it is a valid and just obligation
3. That it is not entered into for purposes of aa Attachment
fraud A writ issued at the institution or during progress of
an action commanding the sheriff to attach the
Effect of Absence of Affidavit of Good Faith property, rights, credits, or effects of the defendant
*4. Vitiates mortgage as against creditors and to satisfy demands of the plaintiff
subsequent encumbrancers
*5. Mortgage is not valid as between parties Kinds:
*6. No need to be in public document b. Preliminary
c. Garnishment
Registration of Lease d. Levy on execution
It is the lessee, not the lessor, who is required to
initiate the registration. Registration of Attachment/Other Liens
1. Copy of writ in order to preserve any lien,
1. File with ROD the instrument creating right, or attachment upon registered land
lease together with owner’s duplicate of may be filed with ROD where land lies,
certificate of title containing number of certificate of title of
2. ROD to register by way of memorandum land to be affected or description of land
upon certificate of title 2. ROD to index attachment in names of both
plaintiff and defendant or name of person for
whom property is held or in whose name strictly observed
stands in the records e. Tax lien is superior to an
3. If duplicate of certificate of title is not attachment
presented: f. There is no need to register a
a. ROD shall, within 36 hours, send notice tax lien because it is automatically registered
to registered owner by mail stating that once the tax accrues
there has been registration and request g. But the sale of registered land
him to produce duplicate so that to foreclose a tax lien needs to be registered
memorandum may be made Procedure of Registration of Tax Sale
b. If the owner neglects or refuses to 1. Officer’s return shall be submitted to the
comply, the ROD shall report the matter ROD together with the owner’s duplicate title
to the court 2. Register in the registration book
c. The court, after notice, shall enter an 3. Memorandum shall be entered in the
order to owner to surrender certificate certificate as an adverse claim or
at the time and place named therein encumbrance
4. Although notice of attachment is not 4. After the period of redemption has expired
noted in duplicate, notation in book of and no redemption was made (2 years from
entry of ROD produces the effect of registration of auction sale), title must be
registration already. cancelled and a new title will be issued
5. Before the cancellation, notice shall be sent
Effects of Registration of Attachment to registered owner, with the directive that
(REEA) he surrender title and show cause why it
1. Creates real right should not be cancelled
2. Has priority over execution sale
3. But between 2 attachments, one that is aa Adverse Claim
registered earlier is preferred A notice to third persons that someone is claiming
4. If it is not registered, actual knowledge is the an interest on the property or has a better right
same as registration than the registered owner thereof. The disputed
land is subject to the outcome of the dispute.
Sajonas v. CA, [258 SCRA 79, 1996]
aa Execution Sale
To enforce a lien of any description on registered
Claim is adverse when:
land, any execution or affidavit to enforce such
1. A claimant’s right or interest in the
lien shall be filed with ROD where land lies
registered land is adverse to the
registered owner;
Register in registration book & memorandum
2. Such right arose subsequent to date of
upon proper certificate of title as adverse claim
original registration
or as an encumbrance
3. No other provision is made in the
Decree for the registration of such right
To determine preferential rights between 2 liens:
or claim (Sec. 70, PD 1529)
priority of registration of attachment
A mere money claim cannot be registered as an
aa Tax Sale
adverse claim. Sanchez v. CA, [69 SCRA 327,
Sale of land for collection of delinquent taxes and
1976]
penalties due the government
a. In personam (all persons
Actual knowledge is equivalent to registration of
interested shall be notified so that they may
adverse claim.
be given an opportunity to be heard)
b. Notice to be given to
No 2nd adverse claim based on the same ground
delinquent tax payer at his last known
may be registered by the same claimant.
address
c. Publication of notice must
Formal Requisites of an Adverse Claim for
also be made in English, Spanish, and local
Purposes of Registration (WNR)
dialect, posted in a public and conspicuous
a. Adverse claimant must state
place in the place where the property is
the following in writing:
situated and at the main entrance of the
1. His alleged right or interest
provincial building
2. How and under whom such alleged right
d. Sale cannot affect rights of
or interest is acquired
other lien holders unless given the right to
3. The description of the land in which the
defend their rights: due process must be
right or interest is claimed
4. The certificate of title number action, and may well be inferior and subordinate to
b. Such statement must be those which may be finally determined and laid
signed and sworn to before a notary public down therein. Heirs of Marasigan v. IAC, [152
c. Claimant shall state his SCRA 253, 1987]
residence or place to which all notices may
be served upon him When Notice of Lis Pendeds is Proper:
(RQCPO)
NOTE: Noncompliance with said formal requisites 1. To recover possession of real estate
renders such adverse claim non-registrable and 2. To quiet title thereto
ineffective. 3. To remove clouds upon the title thereof
4. For partition, and
PERIOD OF EFFECTIVITY; WHEN CANCELLED 5. Any other proceeding of any kind in court
The adverse claim shall be effective for a period directly affecting the title to the land or the
of 30 days from the date of registration and it use of occupation thereof or the building
may be cancelled: thereon.
a. After the lapse of 30 days,
upon the filing by the party-in-interest Effect of Registration:
of a verified petition for such purpose 1. Impossibility of alienating the property in
b. Before the lapse of said 30 days, upon dispute during the pendency of the suit
the filing by the claimant of a sworn 2. It may still be alienated but the purchaser
petition withdrawing his adverse claim is subject to the final outcome of pending suit
c. Before the lapse of the 30-day period, 3. ROD is duty-bound to carry over notice of
when a party-in-interest files a petition lis pendens on all new titles to be issued
in the proper RTC for the cancellation of
the adverse claim and, after notice and Cancellation of Lis Pendens: (M-NUVD)
hearing, the court finds that the claim is • Before final judgment, the court may order
invalid. If the court also finds the claim the cancellation:
to be frivolous, it may fine the claimant 1. After showing that notice is only for
the amount of not less than 1,000 purpose of molesting an adverse party
pesos nor more than 5,000 pesos, in its 2. When it is shown that it is not necessary to
discretion protect the right of the party who caused the
registration thereof
For this purpose, the interested party must file 3. When the consequences of the trial are
with the proper court a petition for cancellation unnecessarily delaying the determination of
of adverse claim, and a hearing must also first be the case to the prejudice of the other party
conducted. The Register of Deeds cannot on its 4. ROD may also cancel by verified petition of
own automatically cancel the adverse claim. party who caused such registration
Diaz-Duarte v. Ong, [298 SCRA 388, 1998] 5. Deemed cancelled when certificate issued
by clerk of court stating manner of disposal
An adverse claim may exist concurrently with a of proceeding is registered
subsequent annotation of a notice of lis pendens.
Ty Sin Tei v. Dy Piao, [103 Phil 858, 1958] When Lis Pendedns has no Application:
(P2LAR)
When an adverse claim exists concurrently with a 1. Preliminary attachment
notice of lis pendens, the notice of adverse claim 2. Proceedings for the probate of wills
may be validly cancelled after the registration of 3. Levies on execution
such notice, since the notice of lis pendens also 4. Proceedings for administration of
serves the purpose of the adverse claim. estate of deceased persons and
Villaflor v. Juezan, [184 SCRA 315, 1990] 5. Proceedings in which the only object
is the recovery of a money judgment
NOTICE OF LIS PENDENS
It merely creates a contingency and not a lien Other Parties Required to Register:
1. Assignee in Involuntary Proceeding for
The purpose of the notice of lis pendens is to Insolvency
constructively advise, or warn all people who It is the duty of the officer serving the notice to file
deal with the property that they so deal with it at a copy of such notice to ROD where the property of
their own risk, and whatever rights they may the debtor is located
acquire in the property in any voluntary
transaction are subject to the results of the Assignee elected or appointed by court shall be
entitled to entry of a new certificate of registered
land upon presentment of copy of assignment
with the bankrupt’s duplicate certificate of title
New certificate shall not state that it is entered

into by him as assignee or trustee in insolvency
proceedings
Judgment/Order Vacating Insolvency

Proceedings
a. order shall also be registered
b. Surrender title issued in name of assignee &
debtor shall be entitled to entry of new certificate
2. Government in Eminent Domain

a. Copy of judgment filed in ROD
which states description of property,
certificate number, interest expropriated,
nature of public use
b. Memorandum shall be made or
new certificate of title shall be issued
c. The government does not seek
registration of the land in its own name
d. The objective of the proceeding is
the adjudication of title to the lands
involved in the proceeding
G. DEALINGS WITH UNREGISTERED

LAND
SYSTEM OF REGISTRATION FOR

UNREGISTERED LANDS
a. System of registration for
unregistered land under the Torrens
System (Act 3344)
b. Before, it only covered voluntary dealings.
Now, it includes involuntary dealings
c. Effect: if prospective, it binds 3rd persons
after registration but yields to better rights
of 3rd person prior to registration (limited
effect to 3rd parties)
d. Reason: no strict investigation involved
e. Subsequent dealings are also valid if
recorded
f. ROD keeps day book and a register, and an
index system is also kept
g. Procedure:
1. Presentment of instrument dealing
in unregistered land
2. If found in order, register
3. If found defective, then registration is
refused writing his reason for refusal
ANNEX A: ORDINARY LAND REGISTRATION
FILING of APPLICATION SETTING OF DATE of PROCEEDINGS
Initial Hearing by court
Survey plan approved by order
Bureau of Lands Set 45-90 days from order
Muniments of title
NOTICE of Initial Hearing
Publication - 1x in OG
1x in newspaper
Mailing - to named parties
Transmittal of documents w/in (7) days from OG
and evidence to LRA Posting - (14) days at least
before initial hearing
INITIAL HEARING Filing of

JUDGMENT TRIAL OPPOSITION
same order as ordinary Order of Default vs. By any party
civil proceedings all who did not oppose claiming interest
On/ before
hearing OR time
Appeal
(15) days allowed by court
FINALITY OF JUDGMENT
Entry of DECREE OF OCT
Decree of finality REGISTRATION in LRA Transcription of the
Instruction to LRA to issue Copy sent to Registrar of decree and issuance of
decree of registration Deeds the OCT
CADASTRAL STATE FILES
HEARING JUDGMENT DECREE
SURVEY PETITION
President Geodetic Instituted by Dir. ANSWER to Same as ordinary land reg.

orders Dir. Of Engineer/ of Lands Petition proceedings
Lands to cause employees of (represented by Any claimant
cadastral survey Bureau of Sol-Gen) files answer
Lands inform Containing: (partakes of an
occupants/ technical action to
persons description recover) on/ Appeal
NOTICE of claiming survey plan before hearing
Survey to interest OR time allowed Court may
by court issue writ of
persons
appearing to Persons NOTICE of possession
claim interest claiming Initial Hearing or order
interest to parties demolition
Publication cooperate w/ appearing to have
– 1x in OG Engineer re: interest and
Mailing boundaries adjoining owners
Posting MOTION TO
Publication – 2x
in OG
DISMISS ANNEX B:
If land covered CADASTRAL
(successive
prior OCT REGISTRATION
issues)
pursuant to land
Mailing
patent
PROCEEDINGS
Posting
if barred by res
judicata
O. TORTS • An action can only prosper when
damage, material or otherwise, was
=================================
suffered by the plaintiff. An action based
on Articles 19-21 will be dismissed if the
TOPICS UNDER THE SYLLABUS plaintiff merely seeks “recognition”
I. Principles • A defendant may likewise be guilty of
A. Abuse of right; elements tort under Articles 19-21 even if he acted
B. Unjust enrichment in good faith. Here, liability to pay moral
damages may not be imposed on the
C. Liability without fault defendant who acted in good faith.
D. Acts contrary to law
E. Acts contrary to morals GENERAL SANCTION (ART. 20)
• For all other provisions of law which do
II. Classification of Torts
not especially provide their own sanction
A. According to manner of • In the exercise of his legal right or duty
commission: intentional, negligent • Willfully or negligently causes damage to
and strict liability another
B. According to scope: general or • Article 20 does not distinguish, the act
specific may be done either willfully or
negligently
=================================
CONTRA BONUS MORES (ART 21)
I. PRINCIPLES 1. There is an act which is legal
Art. 2176. Whoever by act or omission causes 2. But which is contrary to morals, good
damage to another, there being fault or custom, public order or public policy
negligence, is obliged to pay for the damage 3. And it is done with intent to injure
done. Such fault or negligence, if there is no pre-
Damages are recoverable even if no
existing contractual relation between the
positive law has been violated
parties, is called a quasi-delict and is governed
by the provisions of this Chapter. (1902a)
UNJUST ENRICHMENT
ELEMENTS:
ELEMENTS OF QUASI DELICT/TORTS:
a. That a person is benefited
1. Act or omission
without a valid basis or justification, and
2. Damage or injury is caused to another
b. That such benefit is derived at
3. Fault or negligence is present
another’s expense or damage.
4. There is no pre-existing contractual
relations between the parties
CONCEPT OF VICARIOUS LIABILITY
5. Causal connection between damage
A person who himself is not guilty of negligence
done and act/omission
is made liable for the conduct of another
NEGLIGENCE
The omission of that degree of diligence which is II. CLASSIFICATION OF TORTS
required by the nature of the obligation and
corresponding to the circumstances of the COMISSION OF TORTS
persons, time and place. (Art. 1173, NCC)
1. INTENTIONAL (DELICT): Every person
KINDS OF NEGLIGENCE criminally liable for a felony is also civilly liable.
1. Quasi delict (Art. 2176 NCC) NOTE: QUASI DELICT includes acts done
2. Criminal negligence (Art. 356 RPC) through FAULT.
3. Contractual negligence (NCC provisions on
contracts particularly Arts. 1170 to 1174) 2. NEGLIGENT (QIUASI DELICT): Whoever by
act or omission causes damage to another,
ABUSE OF RIGHTS (ART 19) there being fault or negligence, is obliged to pay
1. There is a legal right or duty for the damage done. Such fault or negligence,
2. The right or duty is exercised in bad faith if there is no pre-existing contractual relation
3. For the sole intent of prejudicing or injuring between the parties.
another
• Common element under Articles 19 and
21: the act must be intentional

3.
STRICT LIABILITY: Persons Expressly Made speaking, the rules governing the liability of a
Liable By Law Even without Fault principal or master for a tort committed by an
agent or servant are the same whether the
ACCORDING TO SCOPE principal or master be a natural person or a
GENERAL TORTS: Covered by Art. 2176 on corporation, and whether the servant or agent
Quasi-Delict be a natural or artificial person. All of the
authorities agree that a principal or master is
SPECIFIC TORTS: These are those found in liable for every tort which he expressly directs or
specific provisions of law, including the Chapter authorizes, and this is just as true of a
on Human Relations, Common Carriers, etc. corporation as of a natural person, A corporation
================================= is liable, therefore, whenever a tortious act is
TOPICS UNDER THE SYLLABUS committed by an officer or agent under express
direction or authority from the stockholders or
members acting as a body, or, generally, from
III. The Tortfeasor the directors as the governing body.
A. The direct tortfeasor
(1) Natural persons PERSONS VICARIOUSLY LIABLE – the
(2) Juridical persons obligation imposed in 2176 is demandable not
B. Persons made responsible for only for one’s own act or omission but also for
others those persons for whom one is responsible (art
2180).
(1) In General VICARIOUS LIABILITY
(a) Quasi-delicts under Article – A person who himself is not guilty of
2180, how interpreted – negligence is made liable for the conduct of
Family Code, Arts. 218-219, another
221
(b) Indirect liability for NOTE: Vicarious liability is not governed by the
doctrine of respondeat superior. Employers or
intentional acts
parents are made liable not only because of the
(c) Presumption of negligence on negligent or wrongful act of the person for
persons indirectly responsible whom they are responsible but also because of
(d) Nature of liability; joint or their own negligence (i.e. liability is imposed on
solidary? the employer because he failed to exercise due
(2) In Particular diligence in the selection and supervision of his
employees)
(a) Parents
Whenever an employee’s negligence causes
(b) Guardian damage or injury to another, there instantly
(c) Owners and managers of arises a presumption juris tantum that the
establishments and employer failed to exercise diligentissimi patris
enterprises families in the selection (culpa in eligiendo) or
(d) Employers supervision (culpa in vigilando) of its employees.
(e) State To avoid liability for a quasi-delict committed by
its employee, an employer must overcome the
(f) Teachers and heads of presumption by presenting convincing proof that
establishments of arts and he exercised the care and diligence of a good
trades father of a family in the selection and
C. Joint tortfeasors (Art. 2194, Civil supervision of his employee
Code)
EXCEPTION: The doctrine of respondeat
=================================
superior is applicable in:
a. Liability of employers under Article 103
III. TORTFEASOR of the RPC
TORTFEASOR - Whoever by act or omission b. Liability of a partnership for the tort
causes damage to another, there being no fault committed by a partner
or negligence is obliged to pay for the damage
done (art 2176). WHO ARE THE PERSONS VICARIOUSLY
LIABLE:
CORPORATE TORTFEASOR
A corporation is civilly liable in the same manner
as natural persons for torts, because "generally

1. PARENTS - The an official to whom task done properly
father, and in case of his death or incapacity, pertains in which case Art 2176 is applicable
the mother are responsible for damage
caused by minor children who live in their 6. SCHOOL
company. ADMINISTRATOR, TEACHER - Teachers or
heads of establishments of arts & trades
Father and Mother shall jointly exercise shall be liable for damages caused by their
parental authority over common children. In pupils, students & apprentices as long as
case of disagreement, father's decision shall they remain in their custody even if they are
prevail (Art. 211). beyond the age of majority
NOTE: Persons liable for the act of minors
other than parents: NOTE: Art. 2180 applies to all including
a. Those exercising substitute parental academic institution per weight of
authority jurisprudence based on obiter of Justice JBL
b. Surviving grandparents Reyes in the Exconde case. Exconde v.
c. Oldest sibling, over 21 years old Capuno, [G.R. No. L-10134, June 29,
unless unfit or unqualified 1957]
d. Child’s actual custodian, over 21
years old unless unfit or disqualified TEACHER’S LIABILITY:
The basis of the teacher’s liability is the
2. GUARDIANS - principle of loco parentis (stand in place of
Guardians are liable for damages caused by parents). So long as the students remain in
the minor or incapacitated persons who are the protective and supervisory capacity of
under their authority and who live in their teachers, the latter shall be deemed to have
company. custody over the students. It’s not necessary
for the students to board and live with the
3. OWNERS & teachers so that there can be custody over
MANAGERS OF ESTABLISHMENT/ them.
ENTERPRISE - Owners & managers of
establishment or enterprise are responsible SCHOOL’S LIABILITY:
for damages caused by their employees who GENERAL RULE: The School itself is NOT
are: liable as party defendants
o in the service of the branches in which
the latter are employed OR EXCEPTIONS: Art. 218 of Family Code –
o in occasion of their function schools are expressly made liable
• School is liable as an employer, as in the
4. EMPLOYERS - case where the tortfeasor is a teacher, an
Employers shall be liable for damages employee of the school. St. Francis High
caused by their: vs. CA, [194 SCRA 341]
o employees and • School has a contract with the student,
o household helpers and thus, if the tortfeasor is a stranger, the
who are acting w/in the scope of their school is liable for the breach of the
assigned task even though the former are contract. PSBA cs. CA, [205 SCRA 729]
not engaged in any business or industry
(unlike in RPC – subsidiary liability of
employer attaches in case of insolvency of
employer for as long as the employer is FAMILY CODE PROVISIONS:
engaged in business/industry) a. Family Code, Art 218 - The school,
its administration & teachers or the
DEFENSES AVAILABLE TO EMPLOYERS: individual, entity or institution engaged in
o exercise of due diligence ins election child care shall have special parental
and supervision of employees authority & responsibility over the minor
o act/omission was made outside child under their supervision, instruction or
working hours and in violation of custody (authority & responsibility shall
company rules apply to all authorized activities whether
inside or outside the premises or the
5. STATE - The state is school, entity or institution).
responsible when it acts through a special b. Family Code, Art 219 - Those given the
agent, but not when the same is caused by authority & responsibility shall be solidarily

& principally liable for damages caused by 4. NATURE OF ACTIVITY
act/omission of the unemancipated minor; There are activities which by nature impose
parents, judicial guardian or person duties to exercise a higher degree of
exercising substitute parental authority diligence (ex. Banks, Common Carriers)
over said minor shall be subsidiarily liable.
5. INTOXICATION
JOINT TORTFEASORS GENERAL RULE: Mere intoxication is not
Joint tortfeasors are all the persons who negligence nor establishes want of ordinary
command, instigate, promote, encourage, care. But it may be considered to prove
advise, countenance, cooperate in, aid or abet negligence.
the commission of a tort, or who approve of it
after it is done, if done for their benefit. EXCEPTION: Under Art. 2185 of the NCC it is
The responsibility of two or more persons who presumed that a person driving a motor vehicle
are liable for quasi-delict is solidary has been negligent if at the time of the mishap,
he was violating any traffic regulation
SPECIAL RULES
6. INSANITY
1. CHILDREN An insane person is exempt from liability.
The action of the child will not necessarily be However, by express provision of law, there may
judged according to the standard of an adult. be civil liability even when the perpetrator is
But if the minor is mature enough to understand held to be exempt from criminal liability. The
and appreciate the nature and consequences of insanity of a person does not excuse him or his
his actions, he will be considered negligent if he guardian from liability based on quasi delict (Art.
fails to exercise due care and precaution in the 2180 and 2182 NCC)
commission of such acts.
NOTE: Applying the provisions of the RPC, =================================
Judge Sangco takes the view that a child TOPICS UNDER THE SYLLABUS
who is 9 or below is conclusively presumed
to be incapable of negligence. On the other V. Proximate Cause
hand, if the child is above 9 years but below A. Concept
15, there is a disputable presumption of (1) Definition
absence or negligence. (2) Test
• Absence of negligence does not (3) Distinguished from immediate
necessarily mean absence of liability. A child cause
under 9 years can still be subsidiarily liable (4) Distinguished from intervening
with his property (Art. 100 RPC)
cause
• Absence of negligence of the child may (5) Distinguished from remote and
not excuse the parents from their vicarious concurrent
liability under Art. 2180 NCC or Art. 221 FC. B. Cause in fact
(1) Substantial factor test
2. PHYSICAL DISABILITY (2) Concurrent causes
GENERAL RULE: a weak or accident prone C. Legal cause
person must come up to the standard of a
reasonable man, otherwise, he will be
(1) Natural and probable
considered as negligent consequences
(2) Foreseeability
EXCEPTION: If the defect amounts to a real D. Efficient intervening cause
disability, the standard of conduct is that of a E. Cause vs. Condition
reasonable person under like disability. F. Last clear chance
=================================
3. EXPERTS AND PROFESSIONALS V. PROXIMATE CAUSE
They should exhibit the case and skill of one A. CONCEPT OF PROXIMATE CAUSE
who is ordinarily skilled in the particular field
that he is in; the rule regarding experts is PROXIMATE CAUSE is defined as that cause
applicable not only to professionals who have which, in natural and continuous sequence,
undergone formal education. (Fernando v. CA) unbroken by any efficient intervening cause,

produces the injury, and without which the Vda. de Bataclan v. Medina, [G.R. No. L-
result would not have occurred. 10126, October 22, 1957]
More comprehensively, proximate cause is It may be that ordinarily, when a passenger
that cause acting first and producing the injury, bus overturns, and pins down a passenger,
either immediately or by setting other events in merely causing him physical injuries, if
motion, all constituting a natural and continuous through some event, unexpected and
chain of events, each having a close causal extraordinary, the overturned bus is set on
connection with its immediate predecessor, the fire, say, by lightning, or if some highwaymen
final event in the chain immediately effecting after looting the vehicle sets it on fire, and the
the injury as natural and probable result of the passenger is burned to death, one might still
cause which first acted, under such contend that the proximate cause of his death
circumstances that the person responsible for was the fire and not the overturning of the
the first event should, as an ordinarily prudent vehicle. But in the present case and under the
and intelligent person, have reasonable ground circumstances obtaining in the same, we do
to expect at the moment of his act or default not hesitate to hold that the proximate cause
that an injury to some person might probably of the death of Bataclan was the overturning
result therefrom. of the bus, this for the reason that when the
vehicle turned not only on its side but
completely on its back, the leaking of the
gasoline from the tank was not unnatural or
unexpected; that the coming of the men with
aBrinas
lightedv.torch
People wasofinthe
response to the call
Philippines, G.R. forL-
help,
30309, made not only25,
November by 1983.
the passengers, but
most probably, cause
The proximate by the of thedriver andis the
injury not
conductor
necessarilythemselves,
the immediate and cause
that because
of, or the it
was
causevery dark (about
nearest in time 2:30
to, in theinjury.
the morning),
It is the
only
rescuers
when the had to carry
causes area independent
light with them; and
of each
coming
other thatas the
they did from
nearest is toabe rural area with
charged wherethe
lanterns
disaster. and
So longflashlights
as there were
is a not available,
natural, direct
they
and had to use a torch,
continuous sequencethe most handy and
between the
available;
negligent and act what was more
the injury (sic) natural
that itthan can
that said rescuers
reasonably be said should
that innocently
but for the approach
act the
the overturned
injury could notvehicle to extendsuch
have occurred, the negligent
aid and
NECESSARY LINK effect rescue requested
act is the proximate cause of from them. and
the injury, In
other
whoeverwords, the coming therefore
is responsible of the men is with
liablethe for
torch
damages was to be expected
resulting and was
therefrom. Onenatural
who
sequence
negligentlyof creates
the overturning
a dangerous of the bus, the
condition
trapping of someliability
cannot escape of its passengers’
for the natural bus, theand
trapping
probable of some of its thereof,
consequences passengers and the
although the
call
act for
of aoutside help or an act of God for which
third person,
he is not responsible intervenes to precipitate
the loss.
NOTE: If plaintiff's negligence is only

contributory, he is considered partly
responsible only. Plaintiff may still recover from
defendant but the award may be reduced by the
courts in proportion to his own negligence
IMMEDIATE CAUSE
The cause nearest in time to, the injury.
INTERVENING CAUSE

Phoenix Construction v. IAC, [G.R. L- negligence of other actors. Each wrongdoer is
65295, March 10, 1987] responsible for the entire result and is liable as
If the intervening cause is one which in though his acts were the sole cause of the
ordinary human experience is reasonably to be injury.
anticipated or one which the defendant has
reason to anticipate under the particular B. CAUSE IN FACT
circumstances, the defendant may be
negligence among other reasons, because of ‘BUT FOR’ TEST
failure to guard against it; or the defendant The (but for) test requires a plaintiff to establish
may be negligent only for that reason. Thus that the act complained of probably caused the
one who sets a fire may be required to foresee subsequent disability. NELSON V.
that an ordinary, usual and customary wind FIBREBOARD CORPORATION, [912 F.2d
arising later wig spread it beyond the 469]
defendant's own property, and therefore to
take precautions to prevent that event. The The test applied to determine whether negligent
person who leaves the combustible or conduct was the efficient, or proximate cause of
explosive material exposed in a public place the injury or loss suffered by the claimant is
may foresee the risk of fire from some whether such conduct is a cause without which
independent source. ... In all of these cases the injury would not have taken place (which
there is an intervening cause combining with test is frequently referred to as the "sine qua
the defendant's conduct to produce the result non rule"), or is the efficient cause which set in
and in each case the defendant's negligence motion the chain of circumstances leading to the
consists in failure to protect the plaintiff against injury. {Sangco, Philippine Law on Torts
that very risk. and Damages, 1994)
REMOTE CAUSE SUBSTANTIAL FACTOR

It is the rule under the substantial factor test
Manila Electric Co. v. Remoquillo, [G.R. No. that if the actor's conduct is a substantial
L-8828, May 18, 1956] factor in bringing about harm to another, the
A prior and remote cause cannot be made the fact that the actor neither foresaw nor should
be of an action if such remote cause did nothing have foreseen the extent of the harm or the
more than furnish the condition or give rise to manner in which it occurred does not prevent
the occasion by which the injury was made him from being liable. Philippine Rabbit Bus
possible, if there intervened between such prior Lines v. IAC, [G.R. 66102, August 30, 1990]
or remote cause and the injury a distinct,
successive, unrelated, and efficient cause of the CONCURRENT CAUSES
injury, even though such injury would not have If one suffers damage as the proximate result of
happened but for such condition or occasion. If the negligence of two others, and the damage
no danger existed in the condition except would not have occurred but for the negligence
because of the independent cause, such of each of such parties, both are liable to the
condition was not the proximate cause. And if person so injured. MENNE v. CELOTEX
an independent negligent act or defective CORPORATION, [861 F.2d 1453]
condition sets into operation the instances,
which result in injury because of the prior C. LEGAL CAUSE
defective condition, such subsequent act or
condition is the proximate cause.
TEST OF FORSEEABILITY
CONCURRENT CAUSE Where the particular harm was reasonably
Where several causes producing an injury are foreseeable at the time of the defendant’s
concurrent and each is an efficient cause misconduct, his act or omission is the legal
without which the injury would not have cause thereof. Foreseeability is the fundamental
happened, the injury may be attributed to all or test of the law of negligence. To be negligent,
any of the causes and recovery may be had the defendant must have acted or failed to act
against any or all of the responsible persons in such a way that an ordinary reasonable man
although under the circumstances of the case, it would have realized that certain interests of
may appear that one of them was more certain persons were unreasonably subjected to
culpable, and that the duty owed by them to the a general but definite class of risk which made
injured person was not the same. No actor's the actor’s conduct negligent, it is obviously the
negligence ceases to be a proximate cause consequence for the actor must be held legally
merely because it does not exceed the

responsible. Otherwise, the legal duty is entirely Phoenix Construction v. IAC, G.R. L-65295,
defeated. Accordingly, the generalization may [March 10, 1987]
be formulated that all particular consequences,
that is, consequences which occur in a manner Many courts have sought to distinguish
which was reasonably foreseeable by the between the active "cause" of the harm and
defendant at the time of his misconduct are the existing "conditions" upon which that cause
legally caused by his breach of duty. operated. If the defendant has created only a
passive static condition, which made the
TEST OF NATURAL AND PROBABLE CAUSES damage possible, the defendant is said not to
A natural consequence of an act is the be liable. But so far as the fact of causation is
consequence which ordinarily follows it. A concerned, in the sense of necessary
probable consequence is one that is more likely antecedents which have played an important
to follow than fail to follow its supposed cause part in producing the result it is quite
but it is need one be one which necessarily impossible to distinguish between active forces
follow such cause. (Sangco, Philippine Law and passive situations, particularly since, as is
on Torts and Damages, 1994) invariably the case, the latter are the result of
other active forces which have gone before.
HINDSIGHT TEST The defendant who spills gasoline about the
A party guilty of negligence or omission is premises creates a "condition," but the act may
responsible for all the consequences which a be culpable because of the danger of fire.
prudent and experienced party, fully acquainted When a spark ignites the gasoline, the
with all the circumstances which in fact exist, condition has done quite as much to bring
whether they could have been ascertained by about the fire as the spark; and since that is
reasonable diligence, or not, would have thought the very risk, which the defendant has created,
at the time of the negligent act as reasonably the defendant will not escape responsibility.
possible to follow, if they had been suggested to Even the lapse of a considerable time during
his mind. which the "condition" remains static will not
necessarily affect liability; one who digs a
ORBIT TEST trench in the highway may still be liable to
If the foreseeable risk to plaintiff created a duty another who fans into it a month afterward.
which the defendant breached, liability is "Cause" and "condition" still find occasional
imposed for any resulting injury within the orbit mention in the decisions; but the distinction is
or scope of such injury, it is not the unusual now almost entirely discredited. So far as it has
nature of the act resulting in injury that is the any validity at all, it must refer to the type of
test of foreseeability, but whether the result of case where the forces set in operation by the
the act is within the ambit of the hazards defendant have come to rest in a position of
covered by the duty imposed upon defendant. apparent safety, and some new force
D. EFFICIENT INTERVENING CAUSE intervenes. But even in such cases, it is not the
distinction between "cause" and "condition"
An independent intervening cause as one which which is important but the nature of the risk
is so distinct as to sever the connection of cause and the character of the intervening cause.
and effect between the negligent act and the
injury BARTELS v. CITY of WILLISTON, [629
F.2d 509] E. LAST CLEAR CHANCE
If an independent cause intervenes, which is of Canlas v. Court of Appeals, [G.R. 112160,

itself sufficient to produce the result, it is February 28, 2000]
regarded as proximate cause, and the originator
of the first cause is relieved from liability In essence, the doctrine of last clear chance is
MICHAEL v. U.S., [338 F.2d 219] to the effect that where both parties are
negligent but the negligent act of one is
appreciably later in point of time than that of
the other, or where it is impossible to
E. CAUSE/CONDITION determine whose fault or negligence brought
about the occurrence of the incident, the one
who had the last clear opportunity to avoid
the impending harm but failed to do so, is
chargeable with the consequences arising
therefrom.

Stated differently, the rule is that the (b) Interference with relations
antecedent negligence of a person does not B. Interference with rights to
preclude recovery of damages caused by the
persons and property
supervening negligence of the latter, who had
the last fair chance to prevent the impending (1) Intentional physical harms
harm by the exercise of due diligence. (a) General
(b) Violation of persons security,
================================= physical injuries (Art. 33, Civil Code)
TOPICS UNDER THE SYLLABUS (c) False imprisonment (illegal
VI. Legal Injury detention)
A. Concept (d) Trespass to land
B. Elements of right (e) Interference with personal
C. Violation of right or legal injury property
D. Classes of injury (2) Intentional non-physical harms
(1) Injury to persons (a) General
(2) Injury to property (b) Violation of personal dignity
(3) Injury to relations (c) Infliction of emotional
================================= distress
(d) Violation of privacy
VI. LEGAL INJURY (e) Disturbance of peace of mind
DAMAGE – the detriment, injury or loss which is (f) Malicious prosecution
occasioned by reason of fault of another in the
(g) Defamation
property or person
DAMAGES – the pecuniary compensation, (h) Fraud or misrepresentation
recompense or satisfaction for an injury (formerly deceit)
sustained, or as otherwise expressed, the (i) Seduction
pecuniary consequences which the law imposes (j) Unjust dismissal
for the breach of some duty or the violation of C. Interference with relations
some rights (1) General
DAMNUM ABSQUE INJURIA or Damage
without Injury – a person may have suffered
(a) Concept
physical hurt or injury, but for as long as no (b) Kinds
legal injury or wrong has been done, there is no (2) Family relations
liability (a) Alienation of affection
INJURY DAMAGE DAMAGES (b) Loss of consortium
Legal Loss, hurt or The (c) Criminal conversation
invasion of a harm which recompense (adultery)
legal right results from or
the injury compensatio
(3) Social relations
n awarded (a) Meddling with or disturbing
for the family relations
damage (b) Intriguing to cause another
suffered to be alienated from his friends
(4) Economic relations
(a) Interference with contractual
relations
(b) Unfair competition
================================= (5) Political relations
TOPICS UNDER THE SYLLABUS (a) Violation of right to suffrage
VII. Intentional Torts (NCC, Art. 32)
A. General (b) Violation of other political
(1) Concept rights (freedom of speech,
(2) Classes press, assembly and petition,
(a) Interference with persons etc.)
and property (6) Defenses

(a) Absence of element
(b) Privilege 4. DESERTION BY A SPOUSE
(c) Prescription • A spouse has the legal obligation to live
with his/her spouse. If a spouse does not
(d) Waiver
perform his/her duty to the other, he
(e) Force majeure may be liable for damages for such
================================= omission because the same is contrary
to law, morals, good customs and public
VI. INTERNATIONAL TORTS policy.
1. BREACH OF A PROMISE TO MARRY
GENERAL RULE: Breach of a promise to marry 5. TRESPASSES AND DEPRIVATION OF
by itself is not actionable. PROPERTY
EXCEPTION: In cases where there is another 2 KINDS:
act independent of the breach of a promise to A. TRESPASS TO AND/OR
marry which gives rise to liability DEPRIVATION OF REAL PROPERTY
a. Cases where there was financial • Liability for damages under the RPC
damage and Art. 451 of the Civil Code
b. Social humiliation caused to one of requires intent or bad faith
the parties • A builder in good faith who acted
c. Where there was moral seduction negligently may be held liable under
d. If the breach was done in a manner Art. 2176 NCC
that is clearly contrary to good • Art. 448 of the Civil Code in relation
morals to Art. 456 does not permit action for
damages where the builder, planter
• Moral seduction connotes the idea of or sower acted in good faith. The
deceit, enticement, superior power or landowner is limited to the options
abuse of confidence on the part of the given to him under article 448
seducer to which the woman has yielded
for which the seducer can be held liable B. TRESPASS TO AND/OR DEPRIVATION
for damages. Gashem Shookat Baksh OF PRIVATE PROPERTY
v. CA, [G.R. No. 97336, February 19, • In tort, trespass extends to all cases
1993] where a person is deprived of his
personal property even in the
• Sexual intercourse is not by itself a basis absence of criminal liability
for recovery but damages could be • Examples: theft, robbery
awarded if the sexual intercourse is not a • It may cover cases where the
product of voluntariness or mutual
defendant was deprived of personal
desire. Constantino v. Mendez, [G.R.
property for the purpose of obtaining
NO. 57227, May 14, 1992]
possession of real property. The
defendant who was landlord, was
2. SEDUCTION WITHOUT BREACH OF
held liable because he deprived the
PROMISE TO MARRY
plaintiffs, his tenants of water in
• Seduction by itself, is also an act order to force them to vacate the lot
contrary to morals, good customs and they were cultivating. Magbanua v.
public policy IAC, [137 SCRA 352]
• The defendant is liable if he employed • The right to disconnect and deprive
deceit, enticement, superior power or the customer, who unreasonably fails
abuse of confidence in successfully to pay his bills of electricity should
having sexual intercourse with another be exercised in accordance with the
even if he satisfied his lust without law and rules. Example: If a company
promising to marry the offended party disconnects the electricity service
• It may not even matter that the plaintiff without prior notice as required by
and the defendant are of the same the rules, the company commits a
gender tort under Art. 21 NCC, Manila
Electric Co. v. CA, [G.R. No.
3. SEXUAL ASSAULT 132539, July 11, 2001]
• Defendant is liable for all forms of sexual
assault 6. ABORTION AND WRONGFUL DEATH

• Damages may be recovered by both b. That in bringing the action, the
spouses if: prosecutor acted without probable cause
a.The abortion was cause through the c. The prosecutor was actuated or impelled
physician’s negligence or by legal malice
b. Done intentionally without their NOTE: Presence of probable cause signifies
consent absence of malice.
• Absence of malice signifies good faith on
NOTE: A doctor who performs an illegal the part of the defendant. Good faith
abortion is criminally liable under Art. may even be based on mistake of law.
259 RPC Acquittal presupposes that criminal
• Husband of a woman who voluntarily information is filed in court and final
procured her abortion may recover judgment rendering dismissing the case.
damages from the physician who cause Nevertheless, prior acquittal may include
the same on account of distress and dismissal by the prosecutor after
mental anguish attendant to the loss of preliminary investigation. Globe
the unborn child and the disappointment Mackay and Radio Corp v. CA, [G.R.
of his parental expectation. [Geluz v. No. 81262, August 25, 1989]
CA, 2 SCRA 80]
9. PUBLIC HUMILIATION
7. ILLEGAL DISMISSAL • Such acts also constitute an offense
• The right of the employer to dismiss an under Art. 359, RPC (Slander by Deed)
employee should not be confused with • A person can be held liable for damages
the manner in which the right is for slapping another in public. Patricio
exercised and its effects. v. Hon. Oscar Leviste, [G.R. No. L-
• If the dismissal was done anti-socially 51832, April 26, 1989]
and oppressively, the employer should • A defendant may likewise be guilty of a
be deemed to have violated Art. 1701 of tort even if he acted in good faith if the
the NCC (which prohibits acts of action has caused humiliation to
oppression by either capital or labor another. Grand Union Supermarket v.
against the other) and Art. 21 Espino, [G.R. No. L-48250, December
• An employer may be held liable for 28, 1979]
damages if the manner of dismissing is
contrary to morals good customs and 10. UNJUST ENRICHMENT
public policy. ELEMENTS:
a. That a person is benefited without a
8. MALICIOUS PROSECUTION valid basis or justification, and
• An action for damages brought by one b. That such benefit is derived at another’s
against another whom a criminal expense or damage.
prosecution, civil suit, or other legal
proceeding has been instituted 11. OSTENTATIOUS DISPLAY OF WEALTH
maliciously and without probable cause, • Thoughtless extravagance for pleasure
after termination of such prosecution, or display during a period of public want
suit or proceeding in favor of the or emergency
defendant therein.
• The action which is terminated should be 12. VIOLATION OF RIGHT OF PRIVACY AND
one begun in malice, without probable FAMILY RELATIONS
cause to believe that the charges can be • The following acts though they may not
sustained constitute a criminal offense, shall
• STATUTORY BASIS: Art. 19-21, 2, 32, produce a cause of action for damages,
33, 35, 2217, 2219(8) NCC prevention and other relief:
a. Prying into the privacy of
ELEMENTS: another's residence
a. The fact of the prosecution and the b. Meddling with or disturbing the
further fact that the defendant was private life or family relations of
himself the prosecutor; and that the another
action was finally terminated with an c. Intriguing to cause another to
acquittal be alienated from his friends
d. Vexing or humiliating another
on account of his religious beliefs,

lowly station in life. Place of birth, a. That the defendant was himself the
physical defect, or other personal prosecutor/ he instigated its
condition commencement
b. That it finally terminates in his
13. DERELICTION OF OFFICIAL DUTY OF acquittal
PUBLIC OFFICERS c. That in bringing it the prosecutor
• May be brought by any person suffering acted without probable cause, and
from material or moral loss because a public d. That he was actuated by legal
servant refuses or neglects, without just malice, that is, by improper and
cause to perform his official duty (art 27). sinister motive
REQUISITES: 16. VIOLATION OF RIGHTS AND LIBERTIES

a. Defendant is a public officer OF ANOTHER PERSON
charged with the performance of a • Any public officer or employee, or any
duty in favor of the plaintiff private individual, who directly or indirectly
b. 3perform such duty (ministerial) obstructs, defeats, violates or in any manner
c. Plaintiff sustained material or impedes or impairs any of the rights and
moral loss as consequence of such liberties (under Article 32 of the NCC) of
non-performance another person shall be liable to the latter
d. The amount of such damages, if for damages.
material
17. NUISANCE
14. ECONOMIC RELATIONS ELEMENTS
A. UNFAIR COMPETITION a. Any act, omission, establishment,
Unfair competition in agricultural, condition of property, or anything
commercial or industrial enterprises or in else
labor through the use of force, b. Which:
intimidation, deceit. Machination or other • Injures or endangers the health or
unjust, oppressive or highhanded safety to others, or
method (Art 28) • Annoys or offends the senses, or
B. INTERFERENCE • Shocks, defies, or disregards
One becomes liable in an action for decency or morality, or
damages for a nontrespassory invasion
• Obstructs or interferes with the
of another's interest in the private use
free passage of any public highway
and enjoyment of asset if
or streets, or any body of water, or
(a) the other has property rights and
• Hinders or impairs use of property
privileges with respect to the use or
enjoyment interfered with,
(b) the invasion is substantial, KINDS
(c) the defendant's conduct is a legal • Nuisance Per Se - denounced as
cause of the invasion, and nuisance by common law or by statute
(d) the invasion is either intentional and • Nuisance Per Accidens - those which are
unreasonable or unintentional and in their nature not nuisances, but may
actionable under general negligence become so by reason of their locality,
rules. 7 surroundings, or the manner in which they
may be conducted, managed, etc.
ELEMENTS OF TORT INTERFERENCE : • Public - affects a community or
(1) existence of a valid contract; neighborhood or any considerable number
(2) knowledge on the part of the third of persons
person of the existence of contract; and • Private - one that is not included in the
(3) interference of the third person is foregoing definition; affect an individual or
without legal justification or excuse. So a limited number of individuals only
Ping Bun v. CA, [G.R. 120554,
September 21, 1999] REMEDIES AGAINST PUBLIC NUISANCES
• Prosecution under the RPC or any
15. MALICIOUS PROSECUTION local ordinance
ELEMENTS • Civil action
• Abatement, without judicial
proceeding

REMEDIES AGAINST PRIVATE
NUISANCES
1. Civil Action
2. Abatement, without judicial
proceedings
WHO MAY AVAIL OF REMEDIES

• Public officers
• Private persons - if nuisance is
specially injurious to himself; the
ff. must be made:
a. Demand be first made upon owner or
possessor of the property to abate
nuisance
b. That such demand has been rejected
c. That the abatement be approved by
the district health officer and
executed with the assistance of local
police
d. That the value of destruction does
not exceed P3,000
DOCTRINE OF ATTRACTIVE NUISANCE –

Cases within the general rule that one is liable
for the injury resulting to another from
failure to exercise the degree of care
commensurate with the circumstances the
attractiveness of the premises or of the
dangerous instrumentality to children of
tender years is to be considered as an implied
invitation, which takes the children who
accepted it out of the category of a trespasser
and puts them in the category of invitees,
towards whom the owner of the premises or
instrumentality owes the duty of ordinary..

================================= 3. Contractual negligence (NCC provisions
TOPICS UNDER THE SYLLABUS on contracts particularly Arts. 1170 to
VII. Negligence 1174)
A. Concept
B. Good father of a family or
NOTE:
reasonably prudent man • Failure of the court to make any
C. Standard of care pronouncement, favorable or unfavorable, as
(1) Civil Code, Art. 1173 to the civil liability of the accused amounts
(2) Emergency Rule to a reservation of the right to have the civil
D. Unreasonable risk of harm liability litigated and determined in a
E. Evidence separate action. The rules nowhere provide
F. Presumption of negligence that if the court fails to determine the civil
(1) Legal provisions liability it becomes no longer enforceable.
(2) Res ipsa loquitur Jarantilla v. CA, [171 SCRA 42]
G. Defenses • A quasi-delict is a separate legal
(1) Complete
institution under the Civil Code and is
(a) Absence of element entirely apart and independent from a delict
(b) Accident or fortuitous event or crime – a distinction exists between the
(c) Damnum absque injuria civil liability arising from a crime and the
(d) Authority of law responsibility for quasi-delicts or culpa extra-
(e) Assumption of risk contractual. Castillo v. CA, [176 SCRA
(f) Last clear chance 591]
(g) Prescription (Civil Code, Arts.
1144, 1146, and 1150) TESTS OF NEGLIGENCE
(h) Waiver • Did the defendant in doing the alleged
(i) Double recovery (Civil Code,
negligent act use the reasonable care and
Art. 2177)
caution which an ordinary prudent person
=================================
would have used in the same situation?
• If not, then he is guilty of
VII. NEGLIGENCE
negligence
ELEMENTS OF QUASI DELICT/TORTS:
1. Act or omission • Could a prudent man, in the case under
2. Damage or injury is caused to another consideration, foresee harm as a result of
3. Fault or negligence is present the course pursued?
4. There is no pre-existing contractual • If so, it as the duty of the actor to
relations between the parties take precautions to guard against harm
5. Causal connection between damage
done and act/omission
NEGLIGENCE - The omission of that degree of

diligence which is required by the nature of the
obligation and corresponding to the
circumstances of the persons, time and place
KINDS OF NEGLIGENCE
1. Quasi delict (Art. 2176 NCC)
2. Criminal negligence (Art. 356 RPC)

DISTINGUISHED FROM OTHER SOURCES OF OBLIGATION:
CONTRACT QUASI DELICT

Vinculum Juris Contract Negligent act/ omission (culpa,
imprudence)
Proof Needed Preponderance of evidence Preponderance of evidence
Defense available Exercise of extraordinary diligence Exercise of diligence of a good father of a
(in contract of carriage), Force family in the selection and supervision of
Majeure employees
Pre-existing contract There is a pre-existing contract No pre-existing contract
Burden of proof Contractual party. Victim.
Prove the ff.: Prove the ff.:
1. existence of a contract 1.damage
2. breach 2. negligence
3.causal connection between negligence
and damage done
CONTRACT DELICT
Vinculum Juris Contract Act / omission committed by means of dolo

(deliberate, malicious, in bad faith)
Proof Needed Preponderance of Proof beyond reasonable doubt
evidence
Defense available Exercise of
extraordinary
diligence (in contract
of carriage), Force
Majeure
Pre-existing contract There is a pre-existing No pre-existing contract
contract
Burden of proof Contractual party. Prosecution. Accused is presumed innocent until
Prove the ff.: the contrary is proved.
1. existence of a
contract
2. breach
Liability of Employer Solidary Subsidiary
Reservation Requirement Civil aspect of the Civil aspect is Impliedly instituted with criminal
quasi-delict is action
impliedly instituted
with criminal action,
but under 2000
Crimpro Rules it is
independent and
separate
Effect of judgment of Not a bar to recover Not a bar to recover civil damages
acquittal in a criminal case civil damages EXCEPT
involving same when judgment
act/omission pronounces that the
negligence from
which damage arise is

non-existent

CIRCUMSTANCES TO CONSIDER Morales, [G.R. 169467, February 25, 2010]
1. Time
2. Place EVIDENCE
3. Personal circumstances of the Actors 1. NEGLIGENCE - plaintiff must prove negligence
of defendant
GOOD FATHER OF A FAMILY (pater familias) Exceptions:
• The only standard of conduct used in the a. In cases where negligence is presumed or
Philippines (Art. 1173 NCC) imputed by law - this is only
rebuttable/presumption juris tantum
• A reasonable man is deemed to have b. Principle of res ipsa loquitur (the thing
knowledge of the facts that a man should be speaks for itself) - grounded on the difficulty in
expected to know based on ordinary human proving thru competent evidence, public policy
experience. considerations
• The law presumes or requires a man to possess 2. DAMAGE / INJURY

ordinary capacity to avoid harming his
neighbors unless a clear and manifest 3. CAUSAL CONNECTION BETWEEN
incapacity is shown and the law does not hold NEGLIGENCE AND DAMAGE – Defendant’s
him liable for unintentional injury unless, negligence must be the proximate cause of the
possessing such capacity, he might and ought injury sustained by the plaintiff to enable plaintiff
to have foreseen the danger. Corliss v. Manila to recover. Thus, if plaintiff’s own conduct is the
Railroad cause of the injury there can be no recovery.
• The law fixes no arbitrary age at which a minor NOTE: If plaintiff's negligence is only
can be said to have the necessary capacity to contributory, he is considered partly responsible
understand and appreciate the nature and only. Plaintiff may still recover from defendant but
consequences of his acts. Taylor v. Meralco, the award may be reduced by the courts in
[16 Phil 8] proportion to his own negligence
EMERGENCY RULE Proximate Cause - the adequate and efficient

Under this rule, one who suddenly finds himself in cause which in the natural order of events and
a place of danger, and is required to act without under the particular circumstances surrounding
time to consider the best means that may be the case, would naturally produce the event
adopted to avoid the impending danger, is not
guilty of negligence, if he fails to adopt what A person claiming damages for the negligence of
subsequently and upon reflection may appear to another has the burden of proving the existence of
such fault or negligence causative thereof. The
have been a better method, unless the danger in
facts constitutive of negligence must be
which he finds himself is brought about by his own affirmatively established by competent evidence.
negligence DELSAN Transport v. C&A Whosoever relies on negligence for his cause of
Construction, [G.R. 156034, October 1, 2003] action has the burden in the first instance of
proving the existence of the same if contested,
UNREASONABLE RISK OF HARM otherwise his action must fail. PLDT v. CA, G.R.
Indeed, a higher degree of care is required of L-57079, [September 29, 1989]
someone who has in his possession or under his
PRESUMPTION OF NEGLIGENCE
control an instrumentality extremely dangerous in
character, such as dangerous weapons or 1. DRIVER PRESUMED NEGLIGENT BY LAW IF:
substances. Such person in possession or control of a. He had been found guilty or reckless
dangerous instrumentalities has the duty to take driving or violating traffic regulations at
exceptional precautions to prevent any injury least twice within the next preceding two
being done thereby. Unlike the ordinary affairs of months.
life or business which involve little or no risk, a b. at the time of the mishap, he was violating
business dealing with dangerous weapons requires any traffic regulation.
the exercise of a higher degree of care. Pacis v.
2. COMMON CARRIERS defendant thru the exercise of reasonable
Article 1733 of the New Civil Code mandates that care and prudence might have avoided
common carriers, by reason of the nature of their injurious consequences to the plaintiff. This
business, should observe extraordinary diligence in defense is available only in an action by the
the vigilance over the goods they carry. driver or owner of one vehicle against the
driver or owner of the other vehicle involved.
In case of loss of the goods, the common carrier is
presumed to have been at fault or to have acted REQUISITES:
negligently. a. Plaintiff was in a position of
In case of death of or injuries to passengers, danger by his own negligence
common carriers are presumed to have been at b. Defendant knew of such position
fault or to have acted negligently of the plaintiff
c. Defendant had the last clear
3. DEFENDANT IN POSSESSION OF chance to avoid the accident by exercise
DANGEROUS WEAPONS OR SUBSTANCES, of ordinary care but failed to exercise such
SUCH AS FIREARMS AND POISON last clear chance and
•There is prima facie presumption of negligence d. Accident occurred as proximate
on the part of defendant if death or injury cause of such failure
results from such possession • Who may invoke: Plaintiff
EXCEPTION: The possession or use thereof is
NOTE: The doctrine is inapplicable to
indispensable in his occupation or business
o Joint tortfeasors
o Defendants concurrently negligent
4. RES IPSA LOQUITOR
(The thing speaks for itself) - Grounded on the o As against 3rd persons
difficulty in proving thru competent evidence,
public policy considerations. 4. EMERGENCY RULE - "one who suddenly
Where the thing which causes injury is shown to be finds himself in a place of danger, and
under the management of the defendant, and the is required to act without time to consider
accident is such as in the ordinary course of things the best means that may be adopted to
does not happen if those who have the avoid the impending danger, is not guilty of
management use proper care, it affords reasonable negligence, if he fails to adopt what
evidence, in the absence of an explanation by the subsequently and upon reflection may
defendant, that the accident arose from want of appear to have been a better method,
care. Layugan v. IAC, [G.R. 73998, November unless the emergency in which he finds
14, 1998] himself is brought about by his own
negligence."
• An individual will nevertheless be subject to
G. DEFENSES TO QUASI DELICT liability if the emergency was brought
1. CONTRIBUTORY NEGLIGENCE - the plaintiff about by his own negligence. Valenzuela
was also negligent together with the v. CA, [253 SCRA 303]
defendant; to constitute a defense,
proximate cause of injury/damage must be NOTE: Applicable only to situations that are
the negligence of defendant sudden and unexpected such as to deprive
actor of all opportunity for deliberation
2. CONCURRENT NEGLIGENCE – if both (absence of foreseeability); the action shall still
parties are equally negligent the courts will be judged by the standard of the ordinary
leave them as they are; there can be no prudent man
recovery
FACTORS TO CONSIDER:
3. DOCTRINE OF LAST CLEAR CHANCE - a. Gravity of the Harm to be avoided
even though a person’s own acts may have b. Alternative courses of action - If the
placed him in a position of peril and an injury alternative presented to the actor is too
results, the injured is entitled to recover if the costly, the harm that may result may still
be considered unforeseeable to a
reasonable man GENERAL RULE: Fortuitous Event is a
c. Social Value and Utility of the Action - complete defense and a person is not
The act which subjects an innocent person liable if the cause of the damage is a
to an unnecessary risk is a negligent act if fortuitous event.
the risk outweighs the advantage accruing
to the actor and even to the innocent EXCEPTION: It is merely a partial
person himself. defense and the courts may mitigate the
d. Person exposed to the risk - A higher damages if the loss would have resulted in
degree of diligence is required if the person any event [Art. 2215(4) NCC]
involved is a child.
NOTE: A person may still be liable for a
5. DOCTRINE OF ASSUMPTION OF RISK – fortuitous event if such person made an
Volenti non fit injuria / That to which a ASSUMPTION OF RISK.
person assents is not deemed in law an
injury. 8. DAMNUM ABSQUE INJURIA – a principle
that involves damage without injury,
REQUISITES: therefore no liability is incurred; there is no
a. Intentional exposure to a known legal injury
danger
b. One who voluntarily assumed the risk 9. LAW – specific provision of law
of an injury from a known danger
cannot recover in an action for EXAMPLES
negligence or an injury is incurred • The owner or lawful possessor of a thing
c. Plaintiff’s acceptance of risk (by has the right to exclude any person from
law/contract/nature of obligation) has the enjoyment and disposal thereof. For
erased defendant’s duty so that his this purpose, he may use such force as may
negligence is not a legal wrong be reasonably necessary to repel or
d. Applies to all known danger prevent an actual or threatened unlawful
physical invasion or usurpation of his
6. DUE DILIGENCE - diligence required by property (Art. 429 NCC)
law/contract/ depends on circumstances of • Article 11 of the Revised Penal Code (Act
persons, places, things 3815):
i. Self-Defense
7. FORTUITOUS EVENT - no person shall be ii. Defense of Property
responsible for those events which cannot iii. Obedience to Lawful Order
be foreseen, or which though foreseen were iv. Lawful Exercise of a right or
inevitable duty
REQUISITES:
10. EXERCISE OF THE DILIGENCE OF A
a. The cause of the unforeseen and
GOOD FATHER OF A FAMILY IN THE
unexpected occurrence, or of the failure
SELECTION AND SUPERVISION OF
of the debtor to comply with his obligation,
EMPLOYEES
must be independent of the human will;
b. It must be impossible to foresee the
11. PRESCRIPTION
event which constitutes caso fortuito or if
a. Injury to right of plaintiff/quasi delict
it can be foreseen it must be impossible to
- 4 years
avoid
b. Defamation - 1 year
c. The occurrence must be such as to
c. When no specific provision, must be
render it impossible for the debtor to
counted from the day they may be
fulfill his obligation in a normal manner
brought
d. The obligor must be free from any
participation in the aggravation of the
injury resulting to the creditor.
12. PROSCRIPTION AGAINST DOUBLE (1) Violation of civil liberties
RECOVERY - Responsibility for fault or E. Violation of rights committed by
negligence under quasi-delict is entirely public officers
separate and distinct from civil action F. Provinces, cities and municipalities
arising from the RPC but plaintiff cannot G. Owner of motor vehicle
recover damages twice for same act or H. Proprietor of building or structure
omission of the defendant or thing
I. Head of family
13. WAIVER/ CONSENT X. Strict Liability
a. Animals
14. ACT OR OMISSION IS NOT THE
(1) Possessor and user of an animal
PROXIMATE CAUSE OF THE DAMAGE
b. Nuisance (supra)
15. OTHER GROUNDS – Motion To Dismiss:
(1) Classes: Per se or per accidents;
a. Lack of jurisdiction over person of
Public or Private
defendant
(2) Easement against nuisance
b. Lack of jurisdiction over subject
c. Products Liability (supra)
matter
(1) Consumer Act
c. Venue improperly laid ===============================
d. Plaintiff has no legal capacity to sue
e. There is another action pending IX. SPECIAL LIABILITY
between same parties for same cause STRICT LIABILITY: PERSONS EXPRESSLY MADE
f. Cause of action is barred by prior LIABLE BY LAW EVEN WITHOUT FAULT
judgment /statute of limitations 1. POSSESSOR OF AN ANIMAL
g. Pleading asserting claim states no
GENERAL RULE: The possessor of an animal or
cause of action
whoever may make use of the same is
h. Claim set forth in pleading has been responsible for the damage which it may cause
paid, waived, abandoned, extinguished
i. Claim is unenforceable under the EXCEPTIONS:
provision of statute of fraud a. Force majeure
j. Condition precedent for filing claim b. Fault of the injured/damaged person
has not been complied with
2. OWNER OF MOTOR VEHICLE
• In motor vehicle mishap, the owner is
=============================== solidarily liable with the driver if:
TOPICS UNDER THE SYLLABUS a. he was in the vehicle, and
b. could have, through due diligence,
IX. Special Liability in Particular
prevented the misfortune
Activities
• A Driver is Presumed Negligent by law If:
A. General
c. He had been found guilty or reckless
(1) Concept
driving or violating traffic regulations at
B. Products Liability
least twice within the next preceding
(1) Manufacturers or processors
two months.
a. Elements
d. at the time of the mishap, he was
b. Consumer Act [RA 7394, Sec.
violating any traffic regulation.
92-107, (Ch. 1)]
C. Nuisance (Civil Code, Arts. 694-
707) NOTE: Every owner of a motor vehicle shall file
with the proper government office a bond executed
(1) Nuisance per se and nuisance by a government-controlled corporation or office,
per accidence to answer for damages to third persons.
(2) Public nuisance and private
nuisance 3. MANUFACTURERS & PROCESSORS OF
(3) Attractive nuisance FOODSTUFFS, DRINKS, TOILET ARTICLES
D. Violation of constitutional rights & SIMILAR GOODS
• They are liable for death and are designed or decrease their value, and for those
injuries caused by any harmful substances resulting from inconsistency with the information
used although no contractual relation exists provided on the container, packaging, labels or
between them and the consumers publicity messages/advertisement, with due regard
to the variations resulting from their nature, the
CONSUMER ACT R.A. 7394 consumer being able to demand replacement to
NOTE ON STIPULATIONS: The stipulation in a the imperfect parts.
contract of a clause preventing, exonerating or
reducing the obligation to indemnify for damages 4. Suppliers are jointly liable for imperfections in
effected, as provided for in this and in the the quantity of the product when, in due regard for
preceding Articles, is hereby prohibited, if there is variations inherent thereto, their net content is less
more than one person responsible for the cause of than that indicated on the container, packaging,
the damage, they shall be jointly liable for the labeling or advertisement.
redress established in the pertinent provisions of
this Act. However, if the damage is caused by a 5. The service supplier is liable for any quality
component or part incorporated in the product or imperfections that render the services improper for
service, its manufacturer, builder or importer and consumption or decrease their value, and for those
the person who incorporated the component or resulting from inconsistency with the information
part are jointly liable. contained in the offer or advertisement.
SUMMARY OF LIABILITIES: 6. When services are provided for the repair of

1. Any Filipino or foreign manufacturer, producer, any product, the supplier shall be considered
and any importer, shall be liable for redress, implicitly bound to use adequate, new, original
independently of fault, design, manufacture, replacement parts, or those that maintain the
construction, assembly and erection, formulas and manufacturer's technical specifications unless,
handling and making up, presentation or packing otherwise authorized, as regards to the latter by
of their products, as well as for the insufficient or the consumer.
inadequate information on the use and hazards
thereof. NOTE: The supplier's ignorance of the quality
imperfections due to inadequacy of the products
NOTE: The manufacturer, builder, producer or and services does not exempt him from any
importer shall not be held liable when it evidences: liability.
a) that it did not place the product on the 4. PROVINCES, CITIES & MUNICIPALITIES
market; • Shall be liable for damages for the death or
b) that although it did place the product on the
injuries suffered by any person by reason of the
market such product has no defect;
c) that the consumer or a third party is solely defective condition of roads, streets, bridges,
at fault. public buildings, and other public works under
their control or supervision
NOTE: This liability applies to tradesman/seller
when the persons named above cannot be, or are 5. PROPRIETOR OF BUILDING OR STRUCTURE
not identified, or when the tradesman did not • Responsible for the damages resulting from
preserve the goods adequately. any of the ff.:
2. The service supplier is liable for redress, 1. Total or partial collapse of building or
independently of fault, for damages caused to structure if due to lack of necessary
consumers by defects relating to the rendering of repairs
the services, as well as for insufficient or 2. Explosion of machinery which has not
inadequate information on the fruition and hazards been taken cared of with due diligence, and
thereof. the inflammation of explosive substances
which have not been kept in a safe and
3. The suppliers of durable or nondurable adequate place
consumer products are jointly liable for 3. By excessive smoke, which may be
imperfections in quality that render the products harmful to persons or property
unfit or inadequate for consumption for which they
4. By falling of trees situated at or near • Prosecution under the RPC or any local
highways or lanes, if not caused by force ordinance
majeure • Civil action
5. By emanations from tubes, canals, • Abatement, without judicial proceeding
sewers or deposits of infectious matter,
constructed without precautions suitable to REMEDIES AGAINST PRIVATE NUISANCES
the place • Civil Action
• Abatement, without judicial proceedings
6. ENGINEER, ARCHITECT OR CONTRACTOR
• If damage of building or structure is caused WHO MAY AVAIL OF REMEDIES
by defect in construction which happens • Public officers
within 15 years from construction; action • Private persons - if nuisance is
must be brought within 10 years from specially injurious to himself; the ff.
collapse must be made:
a. Demand be first made upon owner or
7. HEAD OF FAMILY THAT LIVES IN A possessor of the property to abate
BUILDING OR PART THEREOF nuisance
• Liable for damages caused by things b. That such demand has been rejected
thrown or falling from the same c. That the abatement be approved by
the district health officer and
8. NUISANCES executed with the assistance of local
ELEMENTS police
a. Any act, omission, establishment, condition d. That the value of destruction does
of property, or anything else not exceed P3,000
b. Which:
• Injures or endangers the health or safety DOCTRINE OF ATTRACTIVE NUISANCE – Cases
to others, or within the general rule that one is liable for the
• Annoys or offends the senses, or injury resulting to another from failure to
• Shocks, defies, or disregards decency or exercise the degree of care commensurate with
morality, or the circumstances the attractiveness of the
• Obstructs or interferes with the free premises or of the dangerous instrumentality to
passage of any public highway or streets, children of tender years is to be considered as
or any body of water, or an implied invitation, which takes the children who
accepted it out of the category of a trespasser and
• Hinders or impairs use of property
puts them in the category of invitees, towards
whom the owner of the premises or instrumentality
KINDS
owes the duty of ordinary.
• Nuisance Per Se - denounced as nuisance
by common law or by statute
9. PUBLIC OFFICERS
• Nuisance Per Accidens - those which are in
Art. 32 Any public officer or employee, or any
their nature not nuisances, but may become private individual, who directly or indirectly
so by reason of their locality, surroundings, or obstructs, defeats, violates or in any manner
the manner in which they may be conducted, impedes or impairs any of the following rights and
managed, etc. liberties of another person shall be liable to the
• Public - affects a community or latter for damages:
neighborhood or any considerable number of (1) Freedom of religion;
persons (2) Freedom of speech;
• Private - one that is not included in the (3) Freedom to write for the press or to
foregoing definition; affect an individual or a maintain a periodical publication;
limited number of individuals only (4) Freedom from arbitrary or illegal
detention;
REMEDIES AGAINST PUBLIC NUISANCES (5) Freedom of suffrage;
(6) The right against deprivation of property
without due process of law; DAMAGES-BOOK II
(7) The right to a just compensation when I. General Considerations
private property is taken for public use; A. Classification
(8) The right to the equal protection of the (1) Under Art. 2197 of the Civil Code
laws; (2) According to purpose
(9) The right to be secure in one's person, (3) According to manner of
house, papers, and effects against determination
unreasonable searches and seizures; (4) Special and ordinary
(10) The liberty of abode and of changing the II. Actual and Compensatory Damages
same; A. Concept
(11) The privacy of communication and B. Requisites
correspondence; (1) Alleged and proved with
(12) The right to become a member of certainty
associations or societies for purposes not (2) Not speculative
contrary to law; C. Component Elements
(13) The right to take part in a peaceable
(1) Value of loss; unrealized profit
assembly to petition the Government for
(2) Attorney’s fees and expenses of
redress of grievances;
litigation
(14) The right to be a free from involuntary
(3) Interest
servitude in any form;
D. Extent or scope of actual damages
(15) The right of the accused against
(1) In contracts and quasi-contracts
excessive bail;
(2) In crimes and quasi-delicts
(16) The right of the accused to be heard by
===============================
himself and counsel, to be informed of the
X. DAMAGES
nature and cause of the accusation against
A. GENERALLY
him, to have a speedy and public trial, to meet
the witnesses face to face, and to have DAMAGES MAY BE: (MENTAL)
compulsory process to secure the attendance 1. Actual or compensatory;
of witness in his behalf; 2. Moral;
(17) Freedom from being compelled to be a 3. Nominal;
witness against one's self, or from being 4. Temperate or moderate;
forced to confess guilt, or from being induced 5. Liquidated; or
by a promise of immunity or reward to make 6. Exemplary or corrective.
such confession, except when the person
confessing becomes a State witness; NOTE:
(18) Freedom from excessive fines, or cruel • A complaint for damages is a personal action
and unusual punishment, unless the same is • Proof of pecuniary loss is necessary to
imposed or inflicted in accordance with a successfully recover actual damages from the
statute which has not been judicially declared defendant. No proof of pecuniary loss is
unconstitutional; and necessary in case of moral, nominal,
(19) Freedom of access to the courts. temperate, liquidated or exemplary damages.
Art. 34 When a member of a city or municipal • The assessment of damages, except liquidated
police force refuses or fails to render aid or
ones, is left to the discretion of the court
protection to any person in case of danger to life or
according to the circumstances of each case.
property, such peace officer shall be primarily
liable for damages, and the city or municipality B. ACTUAL
shall be subsidiarily responsible therefor. The civil
• Adequate compensation for the value of
action herein recognized shall be independent of
loss suffered or profits which obligee failed to
any criminal proceedings, and a preponderance of
obtain
evidence shall suffice to support such action.
=============================== EXCEPTIONS:
TOPICS UNDER THE SYLLABUS 1. Law
2. Stipulation
KINDS OF ACTUAL OR COMPENSATORY VALUE OF LOSS SUFFERED
DAMAGES • Destruction of things, fines or penalties,
a. General Damage - natural, medical & hospital bills, attorney's fees,
necessary and logical consequences of a interests, cost of litigation
particular wrongful act which result in
injury; need not be specifically pleaded LOSS OF EARNING CAPACITY:
because the law itself implies or presumes • Variables to consider are:
that they resulted from the wrongful act a. life expectancy
b. Special Damages - damages b. net income/earnings – total of the earnings
which are the natural, but not the necessary less expenses necessary for the creation of
and inevitable result of the wrongful act. such earnings and less living or other
(i.e., attorney’s fees) incidental expenses
REQUIREMENTS: Formula: American Expectancy Table of Mortality

i. Need to be pleaded or the Actuarial of Combined Experience Table of
ii. Pray for the relief that claim for loss be Mortality
granted [2/3 x 80 – (age at the time of death)] x monthly
iii. Prove the loss earnings x 12 = GROSS EARNINGS
GE - Approximate Expenses (50% of GE) = Net
WHEN LOSS NEED NOT BE PROVED: Earnings
a. Liquidated damages previously
agreed upon; liquidated damages take the LOSS OF PROFITS (Lucrum Cessans)
place of actual damages except when • May be determined by considering the average
additional damages incurred profit for the preceding years multiplied by the
b. If damages other than actual are number of years during which the business was
sought affected by the wrongful act or breach
c. Loss is presumed (ex: loss if a child
or spouse) ATTORNEY’S FEES
d. Forfeiture of bonds in favor of the • They are actual damages. It is due to the
government for the purpose of promoting plaintiff and not to counsel
public interest or policy (ex: bond for • Plaintiff must allege the basis of his claim for
temporary stay of alien) attorney’s fees in the complaint; the basis
should by one of the cases under Art. 2208
CONTRACTS AND QUASI-CONTRACTS
a. Damages in case of Good Faith WHEN ARE ATTORNEY’S FEES RECOVERABLE:
i. Natural and probable consequences • In the absence of stipulation, attorney's fees
of breach of obligations
and expenses of litigation, other than judicial
ii. Parties have foreseen or could have
costs, cannot be recovered, except:
reasonably foreseen at the time the
a. When exemplary damages are
obligation was created
awarded;
b. Damages in case of Bad Faith
b. When the defendant's act or
i. It is sufficient that damages may be
omission has compelled the plaintiff
reasonably attributed to the non-
to litigate with third persons or to
performance of the obligation.
incur expenses to protect his
interest;
CRIMES AND QUASI-CRIMES
c. In criminal cases of malicious
a. Defendant is liable for all damages
prosecution against the plaintiff;
that are natural and probable
d. In case of a clearly unfounded civil
consequences of the act complained of;
action or proceeding against the
b. Not necessary that damages have
plaintiff;
been foreseen or could have been
e. Where the defendant acted in gross
reasonably foreseen.
and evident bad faith in refusing to
satisfy the plaintiff's plainly valid, of contract
just and demandable claim; VII. Exemplary or Corrective Damages
f. In actions for legal support; A. Concept (Civil Code, Art. 2229)
g. In actions for the recovery of wages B. When recovered
of household helpers, laborers and (1) In criminal offenses (Civil Code,
skilled workers; Art. 2230)
h. In actions for indemnity under (2) In quasi-delicts (Civil Code, Art.
workmen's compensation and 2231)
employer's liability laws; (3) In contracts and quasi-contracts
i. In a separate civil action to recover (Civil Code, Art. 2232)
civil liability arising from a crime; C. Requisites
j. When at least double judicial costs (1) Arts. 2233, 2234
are awarded; ===============================
WHEN IS ACTUAL DAMAGES MITIGATED: C. MORAL

a. Contributory negligence
b. In contracts. Quasi-contracts and quasi- MORAL DAMAGES Include: (PBMF-MWSS)
delict a. Physical suffering
i. Plaintiff has contravened the terms b. Besmirched reputation
of contract c. Mental anguish
ii. Plaintiff derived some benefit as d. Fright
result of contract e. Moral shock
iii. In case where exemplary damages f. Wounded feelings
are to be awarded, that the defendant g. Social humiliation
acted upon the advice of counsel h. Serious anxiety
iv. That the loss would have resulted in i. Sentimental value of real or personal
any event property may be considered in adjudicating
v. That since the filing of the action, moral damages
the defendant has done his best to j. The social and economic/financial standing
lessen the plaintiff's loss or injury of the offender and the offended party
should be taken into consideration in the
=============================== computation of moral damages
TOPICS UNDER THE SYLLABUS k. Moral damages is awarded only to enable
III. Moral Damages the injured party to obtain means,
A. Concept (Arts. 2217-2218) diversions or amusements that will serve to
B. When recoverable (Arts. 2219- alleviate the moral suffering he has
2220) undergone, by reason of defendant's
(1) In seduction, abduction, rape culpable action and not intended to enrich
and other lascivious acts a complainant at the expense of defendant
(2) In acts referred to in Arts. 21,
26, 27, 28, 29, 32, 34 & 35, Civil IN WHAT CASES MAY MORAL DAMAGES BE
Code RECOVERED (Enumeration Not Exclusive):
(3) In cases of malicious prosecution a. Criminal offense resulting in physical
IV. Nominal Damages injuries
A. Concept b. Quasi-delicts causing physical injuries
B. When awarded c. Seduction, abduction, rape or other acts of
V. Temperate or Moderate Damages lasciviousness
A. Concept d. Adultery and concubinage
B. When awarded e. Illegal or arbitrary detention or arrest
VI. Liquidated Damages f. Illegal search
A. Concept (Civil Code, Art. 2226) g. Libel, slander or other form of defamation
B. Rules governing in case of breach h. Malicious prosecution
i. Acts mentioned in art 309 of the RPC occur are difficult to predict, temperate
relating to disrespect of the dead and damages can and should be awarded on top of
interference with funeral actual or compensatory damages; in such
j. Acts and actions referred to in arts 21, 26, cases there is no incompatibility between
27, 28, 29, 30, 32, 34 and 35 actual and temperate damages.
k. The parents of the female seduced,
abducted, raped, or abused REQUISITES:
l. Spouse, descendants, ascendants and a. Some pecuniary loss
brother and sisters for acts mentioned in b. Loss is incapable of pecuniary estimation
art 309 c. Must be reasonable
m. Art 2220 - in cases of willful injury to
property or breaches of contract where F. LIQUIDATED DAMAGES
defendant acted fraudulently or in bad faith • Those agreed upon by the parties to a contract,
to be paid in case of breach thereof
GENERAL RULE: The plaintiff must allege and
prove the factual basis for moral damages and its WHEN LIQUIDATED DAMAGES MAY BE
causal relation to the defendant’s act EQUITABLY REDUCED:
EXCEPTION: Moral damages may be awarded to a. Iniquitous or unconscionable
the victim in criminal proceedings without the need b. Partial or irregular performance
for pleading proof of the basis hereof.
G. EXEMPLARY
D. NOMINAL DAMAGES
• Adjudicated in order that a right of the
plaintiff, which has been violated or invaded EXEMPLARY OR CORRECTIVE DAMAGE
by the defendant, may be vindicated or • Imposed by way example or correction for
recognized, and not for the purpose of the public good, in addition to the moral,
indemnifying the plaintiff for any loss temperate, liquidated to compensatory
suffered by him damages
ELEMENTS: NOTE: Exemplary damages cannot be

a. Plaintiff has a right recovered as a matter of right; the court will
b. Right of plaintiff is violated decide whether or not they should be
c. Purpose is not to identify but vindicate or adjudicated.
recognize right violated
WHEN IMPOSABLE:
NOTE: Criminal offenses – exemplary damages as a
• The Law presumes damage although actual part of the civil liability may be imposed when the
or compensatory damages are not proven crime was committed with one or more
aggravating circumstances. Such damages are
• They are damages in the name only and
separate from fines and shall be paid to the
are allowed simply in recognition of a technical offended party.
injury based on a violation of a legal right
• Nominal damages cannot coexist with Quasi-delicts – exemplary damages may be
actual or compensatory damages granted if the defendant acted with gross
negligence.
E. TEMPERATE OR MODERATE DAMAGES
Contracts and quasi-contracts – the court may
• More than nominal but less than compensatory award exemplary damages if the defendant acted
where some pecuniary loss has been suffered in a wanton, fraudulent, reckless, oppressive, or
but its amount can't be proved with certainty malevolent manner.
due to the nature of the case
WHAT MUST BE PROVED:
• In cases where the resulting injury might be
a. While the amount of exemplary damages
continuing and possible future complications
need not be proved, the plaintiff must show
directly arising from the injury, while certain to
that he is entitled to moral, temperate or
compensatory damages before the court 2. Damages for death
may consider the question of whether or i. Minimum amount: P50,000
not exemplary damages should be ii. Loss of earning capacity unless
awarded. deceased had permanent physical
b. In case liquidated damages have been disability not caused by defendant so
agreed upon, although no proof of loss is that deceased had no earning capacity
necessary in order that such liquidated at time of death
damages may be recovered, nevertheless, iii. Support, if deceased was obliged to
before the court may consider the question give support (for period not more than
of granting exemplary in addition to the 5 years)
liquidated damages, the plaintiff must show iv. Moral damages
that he would be entitled to moral,
temperate or compensatory damages were IN CASES OF COMMON CARRIER
it not for the stipulation for liquidated Article 2206 shall also apply to the death of a
damages. passenger caused by the breach of contract by a
common carrier. (See Preceding heading)
===============================
TOPICS UNDER THE SYLLABUS I .GRADUATION
XIII. Damages in Case of Death
DUTY OF INJURED PARTY.
A. In crimes and quasi-delicts causing
The party suffering loss or injury must exercise the
death
diligence of a good father of a family to minimize
(1) In death caused by breach of
the damages resulting from the act or omission in
conduct by a common crime
question.
IX. Graduation of Damages
A. Duty of injured party
RULES
(1) Art. 2203
1. Responsibility for fault or
B. Rules
negligence under the preceding article is
(1) In crimes
entirely separate and distinct from the civil
(2) In quasi-delict (Civil Code, Art.
liability arising from negligence under the
2214)
Penal Code. But the plaintiff cannot recover
(3) In contracts, quasi-contracts and
damages twice for the same act or omission
quasi-delicts (Civil Code, Art. 2215) of the defendant.
(4) Liquidated damages (Civil Code, 2. In quasi-delicts, the contributory
Art. 2227) negligence of the plaintiff shall reduce the
(5) Compromise damages that he may recover.
X. Miscellaneous Rules 3. In contracts, quasi-contracts, and
A. Damages that cannot co-exists quasi-delicts, the court may equitably
(1) Nominal with other damages mitigate the damages under circumstances
(Art. 2223) other than the case referred to in the
(2) Actual and Liquidated (Art. preceding article, as in the following
2226) instances:
B. Damages that must co-exist (1) That the plaintiff himself has
(1) Exemplary with moral, contravened the terms of the contract;
temperate, liquidated or (2) That the plaintiff has derived some
compensatory benefit as a result of the contract;
C. Damages that must stand alone (3) In cases where exemplary damages are
(1) Nominal Damages (Art. 2223) to be awarded, that the defendant acted
=============================== upon the advice of counsel;
(4) That the loss would have resulted in any
H. DAMAGES IN CASE OF DEATH event;
BY CRIMES AND QUASI-DELICT
1. Medical & Hospital Bills
(5) That since the filing of the action, the
defendant has done his best to lessen the
plaintiff's loss or injury.
4. Liquidated damages, whether
intended as an indemnity or a penalty, shall
be equitably reduced if they are iniquitous or
unconscionable.
5. There may be a compromise upon
the civil liability arising from an offense; but
such compromise shall not extinguish the
public action for the imposition of the legal
penalty.
J. MISCELLANEOUS RULES
Damages that cannot co-exists
1. Actual and Liquidated damages
2. Nominal with Actual, Moral or Temperate
damages
Damages that must co-exist

1. Exemplary with moral, temperate, liquidated or
compensatory damages
a. One must prove that he is entitled to moral,
temperate or compensatory damages before the
court may consider if the award for exemplary
damages.
b. No proof of loss is necessary in order that
liquidated damages may be recovered. However,
before the court may consider the question of
granting exemplary in addition to the liquidated
damages, the plaintiff must show that he would be
entitled to moral, temperate or compensatory
damages were if not for the stipulation for
liquidated damages

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CIVIL LAW

Academics Head: Pierre Martin Reyes;

CIVIL LAW COMMITTEE

Heads: Francesco Benzon Anbochi, Hannah Stephanie

CIVIL LAW REVIEWER Page 3 of 401

Transfer of Ownership E. General vs. Special Agency

LAND TITLES AND DEEDS

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Mandatory and Prohibitory laws (art. 5): h) Computation of Time

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Requisites/ Elements: Requisites:

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Relief Against Public Officials (Art. 27)

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1. Juridical Capacity v. Capacity to Act 1. When Personality Begins and Ends

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C. JURIDICAL PERSONS Requirements for the acquisition of new

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Effects: Marriages Exempt from License

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Marriage among Muslims or among 3.

Exceptions: Marriage Certificate

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e) Imprescriptibility of action or NOTE: Even if a marriage is void, it must be

f) Subsequent Marriage Without PRESUMPTION OF DEATH FOR REMARRIAGE

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Effect of Reappearance NOTE: The above effects apply to voidable

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Before death of other party

Dean Del Castillo:

Guardian of insane Anytime before the death

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b.“No- b. Within 5 • Petition may not be signed solely by

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Pre-trial conference F. LEGAL SEPARATION

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2. Everything acquired by spouses through hose acquired by chance

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Adjudication of conjugal dwelling and custody 2. In case one spouse is incapacitated or

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• Under Article 148, there must be proof of ============================

=========================== 1. MANNER OF CONSTITUTION

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• How to prove. There must be evidence of b. To impugn filiation

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GROUNDS TO IMPUGN THE LEGITIMACY OF egitimacy CANNOT be collaterally attacked

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