LEIDA MAE BUMANLAG

MIDTERM EXAM IN CIVIL LAW

REFRESHER B
ANSWERS TO 2018 BAR EXAM ON CIVIL LAW
I.
Sidley and Sol were married with one (1) daughter, Solenn. Sedfrey and Sonia were another
couple with one son, Sonny. Sol and Sedfrey both perished in the same plane accident. Sidley
and Sonia met when the families of those who died sued the airlines and went through grief-
counseling sessions. Years later, Sidley and Sonia got married. At that time, Solenn was four (4)
years old and Sonny was five (5) years old. These two (2) were then brought up in the same
household. Fifteen (15) years later, Solenn and Sonny developed romantic feelings towards
each other, and eventually eloped. On their own and against their parents' wishes, they
procured a marriage license and got married in church.
a. Is the marriage of Solen and Sonny valid, voidable or void?
b. If the marriage is defective, can the marriage be ratified by the free cohabitation of the
spouses?
ANSWERS:
a. The Marriage is voidable. Under Article 45 of the Family Code, a marriage may be
annulled when, at the time of the marriage, the party in whose behalf it is sought to
have the marriage annulled was eighteen years of age or over but below twenty-one,
and the marriage was solemnized without the consent of the parents, guardian or
person having substitute parental authority over the party, in that order.
b. Yes. Under Article 45 of the Family Code, such marriage may ratified by the cohabitation
of the Contracting parties after attaining the age of twenty-one as husband and wife.

II.
After finding out that his girlfriend Sandy was four (4) months pregnant, Sancho married Sandy.
Both were single and had never been in any serious relationship in the past. Prior to the
marriage, they agreed in a marriage settlement that the regime of conjugal partnership of gains
shall govern their property relations during marriage. Shortly after the marriage, their daughter,
Shalimar, was born. Before they met and got married, Sancho purchased a parcel of land on
instalment, under a Contract of Sale, with the full purchase price payable in equal annual
amortizations over a period of ten (10) years, with no down payment, and secured by a
mortgage on the land. The full purchase price was PhP1 million, with interest at the rate of 6%
per annum. After paying the fourth (4th) annual instalment, Sancho and Sandy got married, and
Sancho completed the payments in the subsequent years from his salary as an accountant. The
previous payments were also paid out of his salary. During their marriage, Sandy also won PhP1
million in the lottery and used it to purchase jewellery. When things didn't work out for the
couple, they filed an action for declaration of nullity of their marriage based on the
psychological incapacity of both of them. When the petition was granted, the parcel of land and
the jewellery bought by Sandy were found to be the only properties of the couple.
a) What is the filiation status of Shalimar?
b) What system of property relationship will be liquidated following declaration of nullity
of their marriage?
c) In the liquidation, who should get the parcel of land? The jewelry?
d) Is Shalimar entitled to payment of presumptive legitime? If yes, how much should be her
share and from where should this be taken?

ANSWERS:

a. Shalimar is a legitimate child of Sancho and Sandy. Under Art. 164 of the Family
Code (FC), children conceived or born during the marriage of the parents are
legitimate. Since Sancho and Sandy had been married when Shalimar was born,
Shalimar is a legitimate child.
b. The regime of conjugal partnership of gains is the system of property relationship
that governed the marriage of Sancho and Sandy. Art. 75 of the FC provides that the
future spouses may, in the marriage settlements, agree upon the regime of conjugal
partnership of gains. Here, Sancho and Sandy agreed in their marriage settlement,
which they executed prior to their marriage, that the regime of conjugal partnership
of gains shall govern their property relations. Therefore, the conjugal partnership of
gains is the property regime that will be liquidated upon the declaration of nullity of
their marriage.
c. The parcel of land is a conjugal property of Sancho and Sandy. Art. 118 of the FC
states that property bought on instalments paid partly from exclusive funds of either
or both spouses and partly from conjugal funds belongs to the conjugal partnership
if such ownership was vested during the marriage.
d. Yes, Shalimar is entitled to the payment of presumptive legitime amounting to one-
half her parents’ estate as their legitimate child. Under Art. 888 of the NCC, the
legitime of legitimate children consists of onehalf of the estate of the parents. This
presumptive legitime will then be taken from the net estate of the parents during
the liquidation, partition and distribution of the properties of the spouses pursuant
to Art. 51 of the FC.

III.
 Silverio was a woman trapped in a man's body. He was born male and his birth
certificate indicated his gender as male, and his name as Silverio Stalon. When he
reached the age of 21, he had a sex reassignment surgery in Bangkok, and, from
then on, he lived as a female. On the basis of his sex reassignment, he filed an action
to have his first name changed to Shelley, and his gender, to female. While he was
following up his case with the Regional Trial Court of Manila, he met Sharon Stan,
who also filed a similar action to change her first name to Shariff, and her gender,
from female to male. Sharon was registered as a female upon birth. While growing
up, she developed male characteristics and was diagnosed to have congenital
adrenal hyperplasia ("CAH") which is a condition where a person possesses both
male and female characteristics. At puberty, tests revealed that her ovarian
structures had greatly minimized, and she had no breast or menstrual development.
Alleging that for all intents and appearances, as well as mind and emotion, she had
become a male, she prayed that her birth certificate be corrected such that her
gender should be changed from female to male, and that her first name should be
changed from Sharon to Shariff. Silverio and Sharon fell in love and decided to
marry. Realizing that their marriage will be frowned upon in the Philippines, they
travelled to Las Vegas, USA where they got married based on the law of the place of
celebration of the marriage. They, however, kept their Philippine citizenship.

(a) Is there any legal bases for the court to approve Silverio's petition for correction
of entries in his birth certificate?
(b) Will your answer be the same in the case of Sharon's petition?
(c) Can the marriage of Silverio (Shelley) and Sharon (Shariff) be legally recognized
as valid in the Philippines?

ANSWERS:
a. In both instances, No. A person’s first name cannot be changed on the ground of
sex reassignmentsince it is not among the grounds stated under R.A 9048.
Likewise, with respect to the change of sex from male to female, there is no law
which allows the change of entry in the birth certificate as to sex on the same
ground, the determination of a person’s sex is that which appears in his birth
certificate.
b. No, where the person is afflicted with CAH or is biologically or naturally intersex
the determining factor in his gender classification would be what the individual
having reached the age of majority, with good reason thinks of his/her sex.
c. No, Since Silverio is still a man and Sharon, upon approval of her petition is now
considered as a man, the marriage between them shall be void ab initio as it is
classified as same sex marriage violating Arts. 15 and 17 par. 3 of the new civil
code, as well as Art. 1 and 2 of the Family Code.
 IV.
Severino died intestate, survived by his wife Saturnina, and legitimate children Soler,
Sulpicio, Segundo and the twins Sandro and Sandra. At the time of his death, the twins
were only 11 years of age, while all the older children were of age. He left only one
property: a 5,000 sq. m. parcel of land. After his death, he older siblings Soler, Sulpicio,
and Segundo sold the land to Dr. Santos for PhP500,000 with a right to repurchase, at the
same price, within five (5) years from the date of the sale. The deed of sale was signed
only by the three (3) older siblings, and covered the entire property. Before the five (5)
years expired, Sole and Sulpicio tendered their respective shares of PhP166,666 each to
redeem the property. Since Segundo did not have the means because he was still
unemployed, Saturnina paid the remaining PhP166,666 to redeem the property. After the
property was redeemed from Dr. Santos, the three (3) older children and Saturnina, for
herself and on behalf of the twins who were still minors, sold the property to Dr. Sazon, in
an absolute sale, for PhP1 million. In representing the twins, Saturnina relied on the fact
that she was the natural guardian of her minor children.

(a) Was the first sale to Dr. Santos, and the subsequent repurchase, valid?
(b) Was the second sale to Dr. Sazon valid? May the twins redeem their share after they
reach the age of majority?

a. Yes, the first sale is valid but only insofar as the share of the older siblings. Article 777
of the NCC provides that the rights to the succession are transmitted from the
moment of the death of the decedent. The heirs can convey their rights to third
persons even before the settlement of the estate of the deceased. However, the
effect of the alienation is limited to what is ultimately adjudicated to the heir who
made the alienation. In this case, the sale by the older siblings affects only their
respective shares.
b. Yes, the second sale is valid in so far as the sale of the shares of the older siblings and
their mother. The twins may redeem their share at the age of majority. Article 412 of
the NCC provides that the father and the mother shall jointly exercise legal
guardianship over the property of the unemancipated common child without the
necessity of court appointment. Saturnina, being the mother of the twins indeed had
legal guardianship over the property of the twins while they are still minors.

V.
Sol Soldivino, widow, passed away, leaving two (2) legitimate children: a 25- year old
son, Santino (whom she had not spoken to for five [5] years prior to her death since
he attempted to kill her at that time), and a 20-year-old daughter, Sara. She left an
estate worth PhP8 million and a will containing only one provision: that PhP1 million
should be given to "the priest who officiated at my wedding to my children's late
father." Sara, together with two (2) of her friends, acted as an attesting witness to the
will.

On the assumption that the will is admitted for probate and that there are no debts,
divide the estate and indicate the heirs/legatees entitled to inherit, the amount that
each of them will inherit, and where (i.e., legitime/free portion/intestate share) their
shares should be charged.

ANSWER:
Santino and Sara shall be entitled to half of the estate as their legitime. Thus, they are
entitled to 4M collectively, or 2M each. The legitime of legitimate children and
descendants consists of one-half of the hereditary estate of the father and of the
mother. The priest, being a legatee, is entitled to his 1M as provided by the
decedent’s last will and testament. This share is chargeable to the Free Portion of the
hereditary estate. The remaining 3M shall be subjected to the rules of intestate
succession. Sara is incapacitated to inherit since she was an attesting witness.

VI.
Sammy and Santi are cousins who separately inherited two (2) adjoining lots from
their grandfather. Sammy is based overseas but wants to earn income from his
inherited land, so he asked a local contractor to build a row of apartments on his
property which he could rent out. The contractor sent him the plans and Sammy
noticed that the construction encroached on a part of Santi's land but he said nothing
and gave approval to construct based on the plans submitted by the local contractor.
Santi, based locally, and who loved his cousin dearly, did not object even if he knew of
the encroachment since he was privy to the plans and visited the property regularly.
Later, the cousins had a falling out and Santi demanded that the portion of the
apartments that encroached on his land be demolished. Can Santi successfully file
legal action to require demolition?

ANSWER:

No, Santi cannot successfully file a legal action to require demolition. Art. 453 of the
NCC provides that if there was bad faith, not only on the part of the person who built
on the land of another, but also on the part of the owner of such land, the rights of
one and the other shall be the same as though both had acted in good faith. There is
bad faith on the part of the landowner whenever the act was done with his
knowledge and without the opposition on his part.

VII.
Sydney, during her lifetime, was a successful lawyer. By her own choice, she remained
unmarried and devoted all her time to taking care of her nephew and two (2) nieces:
Socrates, Saffinia, and Sophia. She wrote a will giving all her properties remaining
upon her death to the three (3) of them. The will was admitted to probate during her
lifetime. Later, she decided to make a new will giving all her remaining properties only
to the two (2) girls, Saffinia and Sophia. She then tore up the previously probated will.
The second will was presented for probate only after her death. However, the probate
court found the second will to be void for failure to comply with formal requirements.
(a) Will the doctrine of dependent relative revocation apply?
(b) Will your answer be the same if the second will was found to be valid but both
Saffinia and Sophia renounce their inheritance?

a. Yes, the doctrine of relative revocation will apply. Under this doctrine, when a first
will is revoked to connect with the making of the new will so as to fairly raise the
inference that the testator meant the revocation of the old will to depend upon the
efficacy of the new disposition, if for any reason the new will becomes inoperative,
the old will shall remain in force and the prior revocation is deemed void.

b. No, even if the instituted heirs in the second will renounced their rights to the
inheritance, it does not have the effect of revocation of the will as would permit the
application of the doctrine of dependent relative revocation. The effect will just pave
the way for intestate succession and not the revival of the previously revoked will.

VIII. Sofronio was a married father of two when he had a brief fling with Sabrina,
resulting in her pregnancy and the birth of their son Sinforoso. Though his wife knew
nothing of the affair, Sofronio regretted it, but secretly provided child support for
Sinforoso. Unfortunately, when Sinforoso was 10 years old, Sofronio died. Only
Sofronio's father, Salumbides, knew of Sabrina and Sinforoso. For the purpose of
providing support to Sinforoso, Salumbides gave Sabrina usufructruary · rights over
one of his properties - a house and lot - to last until Sinforoso reaches the age of
majority. Sabrina was given possession of the property on the basis of caucion
juratoria. Two (2) years after the creation of the usufruct, the house accidentally
burned down, and three (3) years thereafter, Sinforoso died before he could reach the
age of 18. Will the usufruct continue after the house has burned down? If yes, will it
continue after Sinforoso's death?

ANSWER:

Yes, the usufructuary will continue even after the house has burned down. Article 607
of the NCC provides that if the usufruct is constituted on immovable property of
which a building forms part, and the latter should be destroyed in any manner
whatsoever, the usufructuary shall have a right to make use of the land and the
materials. In this case, since the usufruct was constituted on the house and lot, the
usufructuary continue even after the house has burned down.

IX.
Newlyweds Sam and Sienna had contracted with Sangria Hotel for their wedding
reception. The couple was so unhappy with the service, claiming, among other things,
that there was an unreasonable delay in the service of dinner and that certain items
promised were unavailable. The hotel claims that, while there was a delay in the
service of the meals, the same was occasioned by the sudden increase of guests to
450 from the guaranteed expected number of 350, as stated in the Banquet and
Meeting Services Contract. In the action for damages for breach of contract instituted
by the couple, they claimed that the Banquet and Meeting Services Contract was a
contract of adhesion since they only provided the number of guests and chose the
menu. On the other hand, the hotel's defense was that the proximate cause of the
complainant's injury was the unexpected increase in their guests, and this was what
set the chain of events that resulted in the alleged inconveniences.

a. Does the doctrine if proximate cause apply?

b. Was the Banquet and Meeting Services Contract a contract of adhesion? If yes, is
the contract void?

ANSWERS:

a. No. The doctrine of proximate cause is applicable only in actions for quasi-
delicts, not in actions involving breach of contract. The doctrine is a device for
imputing liability to a person where there is no relation between him and
another party. In such a case, the obligation is created by law itself. But, where
there is a pre-existing contractual relation between the parties, it is the parties
themselves who create the obligation, and the function of the law is merely to
regulate the relation thus created.
b. Yes. A contract of adhesion is defined as one in which one of the parties
imposes a ready-made form of contract, which the other party may accept or
reject, but which the latter cannot modify. One party prepares the stipulation
in the contract, while the other party merely affixes his signature or his
"adhesion" thereto, giving no room for negotiation and depriving the latter of
the opportunity to bargain on equal footing. However, contracts of adhesion
are not invalid per se. Contracts of adhesion, where one party imposes a
ready-made form of contract on the other, are not entirely prohibited. The one
who adheres to the contract is, in reality, free to reject it entirely; if he
adheres, he gives his consent.
 X.
Sinclair and Steffi had an illicit relationship while Sinclair was married to another. The
relationship produced a daughter Sabina, who grew up with her mother. For most parts of
Sabina's youth, Steffi spent for her support and education. When Sabina was 21 years old,
Sinclair's wife of many years died. Sinclair and Steffi lost no time in legitimizing their
relationship. After the 40-day prayers for Sinclair's late wife, Sinclair and Steffi got married
without a marriage license, claiming that they have been cohabiting for the last 20 years. After
graduating from college, Sabina decided to enroll in law school. Sinclair said that he was not
willing to pay for her school fees since she was no longer a minor. Sinclair claimed that, if
Sabina wanted to be a lawyer, she had to work and spend for her law education.
a) What is Sabina’s filiation status?
b) Is Sinclair legally required to finance Sabina’s law education?

ANSWERS:
a. Sabina is an illegitimate child under Article 165 of the Family Code.Article 165 states
that children who are conceived and born outside a valid marriage are
illegitimate.Sabina’s father Sinclair was married to another woman at the time she
was conceived and born. As no valid marriage could have existed between her
parents during her conception and birth, Sabina is clearly born outside of a valid
wedlock. Hence, Sabina is an illegitimate child
b. No. Under Article 194 of the FC, the education of the person entitled to be
supported shall include schooling or training for some profession, trade or vocation
even beyond the age of majority. The obligation of the parent to provide support for
the educational needs of the child is only up to tertiary education. Since Sabina has
necessarily finished obtaining a profession before entering law school, Sinclair is no
longer obliged to finance the former’s law education. Thus, Sabrina can no longer
demand support for her law education from her father.

XI.
Samantha sold all her business interest in a sole proprietorship to Sergio for the amount of
PhP1 million. Under the sale agreement, Samantha was supposed to pay for all prior unpaid
utility bills incurred by the sole proprietorship. A month after the Contract to Sell was executed,
Samantha still had not paid the PhP50,000 electricity bills incurred prior to the sale. Since
Sergio could not operate the business without electricity and the utility company refused to
restore electricity services unless the unpaid bills were settled in full, Sergio had to pay the
unpaid electricity bills. When the date for payment arrived, Sergio only tendered PhP950,000
representing the full purchase price, less the amount he paid for the unpaid utility bills.
Samantha refused to accept the tender on the ground that she was the one supposed to pay
the bills and Sergio did not have authorization to pay on her behalf.
a) What is the effect of payment made by Sergio without the knowledge and consent of
Samantha?
(b) Is Samantha guilty of mora accipiendi?
ANSWERS:
a. Under Art. 1236 of the Civil Code, whoever pays for another may demand from the debtor
what he has paid, except that if he has paid without the knowledge or against the will of the
debtor, he can only recover insofar as the payment has been beneficial to the debtor. In the
problem, Sergio paid the utility bills without the consent of Samantha. He cannot demand from
the latter what he has paid because the payment here cannot be said to have been beneficial to
Samantha because it can be inferred from the facts that she has the resources to do so.
b. Yes, Samantha is guilty of mora accipiendi. Under the Civil Code, mora accipiendi is delay on
the part of the creditor without justifiable reason to accept performance of an obligation. In the
problem, Samantha has the obligation, as a creditor in the sale of business of sole
proprietorship to accept the payment of Sergio representing P950,000. The fact that Sergio paid
her prior unpaid utility bills against her will will is not a justifiable reason to refuse acceptance
of compensation to their binding contract of sale.

XII.
Saachi opened a savings bank account with Shanghainese Bank. He made an initial deposit of
PhP100,000. Part of the bank opening forms that he was required to sign when he opened the
account was a Holdout Agreement which provided that, should he incur any liability or
obligation to the bank, the bank shall have the right to immediately and automatically take over
his savings account deposit. After he opened his deposit account, the Shanghainese Bank
discovered a scam wherein the funds in the account of another depositor in the bank was
withdrawn by an impostor. Shanghainese Bank suspected Saachi to be. the impostor, and filed
a criminal case of estafa against him. While the case was still pending with the Prosecutor's
office, the bank took over Saachi's savings deposit on the basis of the Holdout Agreement. (a)
What kind of contract is created when a depositor opens a deposit account with a bank?
(b) In this case, did the bank have the right to take over Saachi's bank deposit?

ANSWERS:
a.) The contract created when a depositor opens a deposit account with a bank is a simple loan
or mutuum. Article 1980 of the NCC provides fixed, savings, and current deposits of money in
banks and similar institutions shall be governed by the provisions of concerning simple loan or
mutuum. When a savings account is opened, a creditor-debtor relationship ensues with the
depositor as the creditor and the bank as the debtor.
b.) No, the bank had no right to take over Saachi’s bank deposit. The Hold over agreement
states that the right may be exercised by the bank only after the depositor incurs any liability to
the bank. In this case,
the depositor is only suspected of estafa by another bank in the Prosecutor’s office. Absent a
court order, the bank cannot withhold the deposit of the depositor.
 XIV.
Socorro is the registered owner of Lot A while Segunda is the registered owner of the adjoining
Lot B. Lot A is located at an elevated plateau of about 15 feet above the level of Lot B. Since
Socorro was allegedly removing portions of the land and cement that supported the adjoining
property, Segunda caused the annotation of an adverse claim against 50 sq. m. on Lot A's
Transfer Certificate of Title, asserting the existence of a legal easement.
a) Does a legal easement in fact exist? If so, what kind?
b) If a legal easement does in fact exist, is an annotation of an adverse claim on the title of the
servient estate proper?
ANSWERS:
a. Yes. An easement for subjacent support exists. An easement for subjacent support
exists when a supported land is above and the supporting land is beneath. In this kind of
easement, any stipulation or testamentary provision allowing excavations that cause
danger to an adjacent land or building shall be void.
b. No, the annotation of an adverse claim on the title is not proper. Under the law, an
annotation of the existence of the subjacent support is no longer necessary. It exists
whether or not it is annotated or registered in the registry of property. A judicial
recognition of the same already binds the property and the owner of the same,
including his successors-in-interests.

XV.
Simon owned a townhouse that he rented out to Shannon, a flight attendant with Soleil
Philippine Airlines (SPA). They had no written contract but merely agreed on a three (3)-year
lease. Shannon had been using the townhouse as her base in Manila and had been paying rentals
for more than a year when she accepted a better job offer from Sing Airlines. This meant that
Singapore was going to be her new base and so she decided, without informing Simon, to
sublease the townhouse to Sylvia, an office clerk in SPA.
(a) Can Simon compel Shannon to reduce the lease agreement into writing?
(b) Does the sublease without Simon's knowledge and consent constitute a ground for
terminating the lease?
ANSWERS:
a. Yes. Under the Civil Code, an agreement for the leasing of real property for more than one
year is covered under the Statute of Frauds which requires that the same should be reduced
into writing in order to be enforceable.In this problem, the lease agreement between Simon
and Shannon over a townhouse is for a period of 3 years. This gives Simon the right to
compel the lease agreement into writing because the same is within the purview of Statute
of Frauds.
b. Yes. Under Sec. 8 of RA 9653 or the Rent Control Act of 2009, subleasing a residential units in
whole or in part without the written consent of the lessor is prohibited. Accordingly, this
gives the lessor a ground for terminating the lease as well as a ground for ejectment.

XVI.
Selena was a single 18-year old when she got pregnant and gave birth to Suri. She then left to
work as a caregiver in Canada, leaving Suri with her parents in the Philippines. Selena, now 34
years old and a permanent resident in Canada, met and married Sam who is a 24-year old
Canadian citizen who works as a movie star in Canada. Sam's parents are of Filipino ancestry
but had become Canadian citizens before Sam was born. Wanting Suri to have all the
advantages of a legitimate child, Selena and Sam decided to adopt her. Sam's parents, already
opposed to the marriage of their son to someone significantly older, vehemently objected to
the adoption. They argued that Sam was not old enough and that the requisite age gap
required by the Inter-Country Adoption Act between Sam as adopter and Suri as adoptee was
not met. Are Sam's parents correct?
ANSWER: No, the parents of Sam are not correct. As a general rule, the Inter-Country Asoption
Act of 1995 provides that any alien or Filipino citizen permanently residing abroad may file an
application for intercountry adoption, if, the adopter is at least 27 years of age and at least 16
years older than the child to be adopted, at the time of the application unless the adopter is the
parent of the child to be adopted or the spouse of such parent.

XVII.
Sofia and Semuel, both unmarried, lived together for many years in the Philippines and begot
three children. While Sofia stayed in the Philippines with the children, Semuel went abroad to
work and became a naturalized German citizen. He met someone in Germany whom he wanted
to marry. Semuel thereafter came home and filed a petition with the Regional Trial Court (RTC)
for partition ofthe common properties acquired during his union with Sofia in the Philippines.
The properties acquired during the union consisted of a house and lot in Cavite worth PhP2
million, and some personal properties, including cash in bank amounting to PhP1 million. All
these properties were acquired using Samuel's salaries and wages since Sofia was a stay-at-
home mother. In retaliation, Sofia filed an action, on behalf of their minor children, for support.
a. How should the properties be partitioned?
b. Should Semuel be required to support minor children?
ANSWERS:
a. The property should be partitioned equally. Under Art. 147, FC, when a man and a woman
who are capacitated to marry each other, live exclusively with each other as husband and
wife without the benefit of marriage or under a void marriage, their wages and salaries
shall be owned by them in equal shares and the property acquired by both of them through
their work or industry shall be governed by the rules on co-ownership. For purposes of this
Article, a party who did not participate in the acquisition by the other party of any property
 shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts
consisted in the care and maintenance of the family and of the household.
b. Yes. Parents and their illegitimate children and the legitimate and illegitimate children of
the latter are obliged to support each other to the whole extent set forth in Art. 194 of the
Family Code.

XVIII.
Shasha purchased an airline ticket from Sea Airlines (SAL) covering Manila-Bangkok- Hanoi-
Manila. The ticket was exclusively endorsable to Siam Airlines (SMA). The contract of air
transportation was between Shasha and SAL, with the latter endorsing to SMA the Hanoi-
Manila segment of the journey. All her flights were confirmed by SAL before she left Manila.
Shasha took the flight from Manila to Bangkok on board SAL using the ticket. When she arrived
in Bangkok, she went to the SAL ticket counter and confirmed her return trip from Hanoi to
Manila on board SMA Flight No. SA 888. On the date of her return trip, she checked in for SMA
Flight No. SA 888, boarded the plane, and before she could even settle in on her assigned seat,
she was off-loaded and treated rudely by the crew. She lost her luggage and missed an
important business meeting. She thereafter filed a complaint solely against SAL and argued that
it was solidarily liable with SMA for the damages she suffered since the latter was only an agent
of the former.

a) Should either, or both, SAL and SMA be held liable for damages that Shasha suffered?
b) Assuming that one is an agent of the other, is the agency coupled with interest?
ANSWERS:
a. SAL should be held liable for damages suffered by Shasha. Sea Airlines (SAL) as the
ticket-issuing airline is the principal in a contract of carriage, while Siam Airlines
(SMA) as the endorsee-airline, is the agent. Under Article 1910 of the Civil Code, the
principal must comply with all the obligations which the agent may have contracted
within the scope of his authority. The contract of air transportation was between
Shasha and SAL with the latter endorsing to SMA the Hanoi-Manila segment of the
journey. Such contract of carriage has always been treated in our jurisdiction as a
single operation.
b. Yes. Where an agency is for the mutual benefit of the principal and of the agent, the
agency is deemed coupled with an interest. The agent’s interest must be in the
subject matter of the power conferred and not merely an interest in the exercise of
the power because it entitles him to compensation.

XIX.
Sebastian, who has a pending assessment from the Bureau of Internal Revenue (BIR), was
required to post a bond. He entered into an agreement with Solid Surety Company (SSC) for SSC
to issue a bond in favor of the BIR to secure payment of his taxes, if found to be due. In
consideration of the issuance of the bond, he executed an Indemnity Agreement with SSC
whereby he agreed to indemnify the latter in the event that he was found liable to pay the tax.
The BIR eventually decided against Sebastian, and judicially commenced action against both
Sebastian and SSC to recover Sebastian's unpaid taxes. Simultaneously, BIR also initiated action
to foreclose on the bond. Even before paying the BIR, SSC sought indemnity from Sebastian on
the basis of the Indemnity Agreement. Sebastian refused to pay since SSC had not paid the BIR
anything yet, and alleged that the provision in the Indemnity Agreement which allowed SSC to
recover from him, by mere demand, even if it (SSC) had not yet paid the creditor, was void for
being contrary to law and public policy. Can Sebastian legally refuse to pay SSC?

ANSWER: No, Sebastian’s argument has no merit. Under Art. 2073 of the Civil Code, when
there are two or more guarantors for the same debtor for the same debt, the one among them
who has paid may demand each of the others the share which is proportionately owing from
him.

XX.
Simeon was returning to Manila after spending a weekend with his parents in Sariaya, Quezon.
He boarded a bus operated by the Sabbit Bus Line (SBL) on August 30, 2013. In the middle of
the journey, the bus collided with a truck coming from the opposite direction, which was
overtaking the vehicle in front of the truck. Though the driver of the SBL bus tried to avoid the
truck, a mishap occurred as the truck hit the left side of the bus. As a result of the accident,
Simeon suffered a fractured leg and was unable to report for work for one week. He sued SBL
for actual and moral damages. SBL raised the defense that it was the driver of the truck who
was at fault, and that it exercised the diligence of a good father of a family in the selection and
supervision of its driver.
(a) Is SBL liable for actual damages? Moral damages?
(b) Will SBL be liable to pay interest if it is required to pay damages, and delays in the payment
of the judgment award? What is the rate of interest, and from when should the interest start
running?

ANSWERS:
a.) Yes, SBL is liable to pay actual damages. Article 1759 of the NCC provides that common
carriers are liable for the death or injuries to passengers through the negligence or
willfuk acts of the former’s employees, although such employees may have acted
beyond the scope of their authority or in violationof the orders of the common carriers.
The liability if the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their
employees.
b.) Yes, SBL will be liable to pay interest if a judgment to pay damages is given and it delays
in the payment of such damages. When the judgment of the court awarding a sum of
money becomes final and executory, the rate of the legal interest, shall be 6% per
annum from such finality until its satisfaction