Civil Law Golden Notes PDF

EFFECT AND APPLICATION OF LAWS
I. EFFECT AND APPLICATION OF LAWS XPN:

1. Municipal Ordinances (governed by the
A.WHEN LAWS TAKE EFFECT Local Government Code not the Civil
Code)
Q: When did the Civil Code take effect? 2. Rules and regulations that are internal in
nature.
A: August 30, 1950 3. Letters of Instruction issued by
administrative supervisors on internal
Q: When do laws take effect? rules and guidelines.
4. Interpretative regulations regulating only
A: GR: Laws take effect after 15 days following the the personnel of administrative agency.
completion of their publication in the Official
Gazette or newspaper of general circulation in the XPN to the XPN: Administrative rules and
Philippines. regulations that require publication:
1. The purpose of which is to implement or
XPN: unless it is otherwise provided by the law. enforce existing laws pursuant to a valid
(Art. 2) delegation;
2. Penal in Nature;
Note: If the law provided a specific date for its 3. It diminishes existing rights of certain
effectivity, it becomes effective only upon the individuals
lapse of said period following its complete
publication and not before. Note: If the law is not published, it shall not be
effective. Non-publication is a violation of due process.
Q: What is meant by the phrase “unless it is
otherwise provided” in the provision on effectivity Q: Honasan questions the authority and
of laws? jurisdiction of the DOJ panel of prosecutors to
conduct a preliminary investigation and to
A: The clause "unless it is otherwise provided" eventually file charges against him, claiming that
refers to the date of effectivity and not to the since he is a senator with a salary grade of 31, it is
requirement of publication itself, which cannot, in the Office of the Ombudsman, not the DOJ, which
any event be omitted. This clause does not mean has authority and jurisdiction to conduct the
that the legislator may make the law effective preliminary investigation. DOJ claims that it has
immediately upon approval, or on any other date concurrent jurisdiction, invoking an OMB-DOJ
without its previous publication. Joint Circular which outlines the authority and
responsibilities among prosecutors of the DOJ and
Publication is indispensable in every case, but the the Office of the Ombudsman in the conduct of
legislature may in its discretion provide that the preliminary investigations. Honasan counters that
usual fifteen-day period shall be shortened or said circular is ineffective as it was never
extended. (Umali v Estanislao, G.R. No. 104037, published.
May 29, 1992, [citing Tañada v. Tuvera, G.R. No. L-
63915, Dec. 29, 1986]) Is OMB-DOJ Circular No. 95-001 ineffective
because it was not published?
Q: When will the law take effect if it is made to
take effect “immediately” or “upon approval? A: No. OMB-DOJ Circular No. 95-001 is merely an
internal circular between the two offices which
A: It shall take effect immediately after publication. outlines the authority and responsibilities among
The 15 day period after publication is dispensed prosecutors of the DOJ and of the Office of the
with but publication is not. In cases wherein the law Ombudsman in the conduct of preliminary
states that it shall be effective upon approval, it investigations. It does not contain any penal
likewise becomes effective only after its complete provision nor prescribe a mandatory act or prohibit
publication and not immediately after its signing by any under pain of penalty. Further, it does not
the President. regulate the conduct of persons or the public, in
general. As such therefore, it need not be
RULES ON PUBLICATION published. (Honasan, II v. The Panel of Investigating
Prosecutors of the Department of Justice, G.R. No.
Q: Are all laws required to be published? 159747, Jun. 15, 2004)
A: GR: Yes. Publication is indispensable. Q: What must be published in order to comply

with the publication requirement?
THE ACADEMICS COMMITTEE
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CHAIRPERSON: KAREN FELIZ G. SUPNAD
UNIVERSITY OF SANTO TOMAS
VICE CHAIRPERSON FOR ACADEMICS: MARIA IRENE I. SANTOS Facultad de Derecho Civil
VICE CHAIRPERSON FOR ADMINISTRATION AND FINANCE: JANICE G. NADAL
VICE CHAIRPERSON FOR LAYOUT AND DESIGN: EARL LOUIE M. MASACAYAN
UST GOLDEN NOTES 2012
A:
A: Publication must be in full or it is no publication MISTAKE OF FACT MISTAKE OF LAW
at all since its purpose is to inform the public of the Want of knowledge or
Want of knowledge of
contents of the law. The mere mention of the acquaintance with the
some fact or facts
number of the presidential decree, the title of such laws of the land insofar as
constituting or relating
decree, its whereabouts, the supposed date of they apply to the act,
to the subject matter in
effectivity, and in a mere supplement of the Official relation, duty, or matter
hand.
Gazette cannot satisfy the publication requirement. under consideration.
This is not even substantial compliance. (Tañada v. When some facts which Occurs when a person
Tuvera, G.R. No. L-63915, Dec. 29, 1986) really exist are unknown having full knowledge of
or some fact is supposed the facts come to an
to exist which really does erroneous conclusion as
Q: Publication must be made in the Official
not exist. to its legal effects
Gazette or in a newspaper of general circulation.
Not excusable, even if in
When is a newspaper of general circulation? Good faith is an excuse
good faith
A:
Note: Ignorance of a foreign law is a mistake of fact
1. It is published within the court’s jurisdiction
2. Published at regular intervals for disseminating
Q: Eduardo was married to Ruby. He then met
local news and general information.
Tina and proposed marriage, assuring her that
3. It has a bona fide subscription list of paying
he was single. They got married and lived
subscribers
4. It is not devoted to the interest or published together. Tina, upon learning that Eduardo had
for the entertainment of a particular class, been previously married, charged Eduardo for
profession, trade, calling, race or religious bigamy for which he was convicted.
denomination.
Eduardo testified that he declared he was
B. IGNORANCE OF THE LAW “single” because he believed in good faith that
his first wife was already dead, having not
Q: What is the presumption of knowledge of laws? heard from her for 20 years, and that he did not
know that he had to go to court to seek for the
A: GR: Everyone is conclusively presumed to know nullification of his first marriage before
the law. Hence, Ignorance of the law excuses no marrying Tina.
one from compliance therewith (Art. 3).
Is Eduardo liable for the crime of bigamy?
XPNs:
a. Mistake upon a doubtful or difficult A: Yes. Eduardo is presumed to have acted with
question of law may be the basis of good
malice or evil intent when he married Tina. As a
faith. [Art. 526 (3)]
general rule, mistake of fact or good faith of the
b. Art. 2155
accused is a valid defense in a prosecution for a
c. Art. 1344
felony by dolo; such defense negates malice or
Q: Differentiate mistake of law from mistake of criminal intent. However, ignorance of the law is
fact. not an excuse because everyone is presumed to
know the law. It was the burden of the Eduardo
to prove his defense that when he married the
Tina, he was of the well-grounded belief that his
first wife was already dead. He should have
adduced in evidence a decision of a competent
court declaring the presumptive death of his first
wife as required by Article 349 of the Revised
Penal Code, in relation to Article 41 of the Family
Code. Such judicial declaration also constitutes
proof that Eduardo acted in good faith, and
would negate criminal intent on his part when he
married the private complainant and, as a
consequence, he could not be held guilty of
bigamy in such case. Eduardo, however, failed to
2 CIVIL LAW TEAM

ADVISER: ATTY. TEOFILO RAGADIO, ATTY. MAURICIO ULEP, ATTY. ANICIA MARQUEZ, ATTY. IRVIN FABELLA, ATTY. ELMER RABUYA;
SUBJECT HEAD: CARLENE IRIS RUIZOL; ASST. SUBJECT HEADS: DENISE FE CAPACIO, CATHRINE CANTOS;
MEMBERS: CHINKY DANE SERASPI, KAREN BUENO, STEFANIE NOELLE LOZADA, CARLO ARTEMUS DIAZ, EDELISE PINEDA, JAMES BRYAN
ESTELEYDES, KENNETH HIZON, JESSA BERNARDO
discharge his burden. (Manuel v. People, G.R. No. 4. Declares the nullity of an act but
165842, Nov. 29, 2005) recognizes its effects as legally existing,
e.g. Child born after the annulment of
C. RETROACTIVITY OF LAWS marriage is considered legitimate.
Q: Do laws have retroactive effect? E. WAIVER OF RIGHTS
A: GR: Laws shall have no retroactive effect. (lex Q: What is a right?

prospicit, non respicit)
A: It is a legally enforceable claim of one person
XPNs: TIN CREEP against another, that the other shall do a given act,
1. Tax laws or shall not do a given act (Pineda, Persons, p. 23)
2. Interpretative statutes
3. Laws creating New Substantive Rights Q: What are the kinds of rights? Distinguish.
4. Curative Statutes
5. Remedial/procedural A:
6. Emergency Laws 1. Natural Rights – Those which grow out of the
7. When Expressly provided nature of man and depend upon personality.
8. Penal laws favorable to the accused
provided, accused is not a habitual E.g. right to life, liberty, privacy, and good
criminal reputation.
XPN to the XPN: Constitutional limits 2. Political Rights – Consist in the power to
where retroactivity would result to: IE participate, directly or indirectly, in the
1. Impairment of obligation of establishment or administration of
contracts government.
2. Ex Post Facto Laws
E.g. right of suffrage, right to hold public
Note: In case of doubt: laws apply prospectively, not office, right of petition.
retroactively.
3. Civil Rights– Those that pertain to a person by
Q: May judicial decisions be given retroactive virtue of his citizenship in a state or
effect? community.
A: No. When a doctrine of the Supreme Court is E.g. property rights, marriage, equal protection
overruled and a different view is adopted, the new of laws, freedom of contract, trial by jury.
doctrine should be applied prospectively and (Pineda, Persons, p. 24)
should not apply to parties who had relied on the a. Rights of personalty or human rights;
old doctrine and acted on the faith thereon. b. Family rights; and
(Rabuya, p. 10) c. Patrimonial rights:
i. Real rights
D. MANDATORY OR PROHIBITORY LAWS ii. Personal rights. (Rabuya Persons, p. 19)
Q: What is the status of acts which are contrary to Q: May rights be waived?
law?
A: GR: Yes.
A: GR: Acts executed against the provisions of
mandatory and prohibitory law are void. (Art. 5) XPNs:
1. If waiver is:
XPN: Where the law: a. Contrary to law, public order, public
1. Makes the act valid but punishes the policy, morals or good customs.
violator, b. Prejudicial to a third person with a
e.g. Marriage solemnized by a person not right recognized by law.
authorized to do so; 2. If the right is:
2. Itself authorizes its validity; a. A natural right, such as right to life.
3. Makes the act merely voidable i.e. valid b. Inchoate, such as future inheritance.
until annulled;
Q: What are the elements of waiver of rights?
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2. If the old law is impliedly repealed and

A: EKI repealing law is repealed: the Old law is
1. Must be an Existing right revived.
2. The one waiving such right must have
Knowledge of evidence thereof G. JUDICIAL DECISIONS
3. Intention to relinquish said right.
(Valderamma v. Macalde, G.R. Q: Are judicial decisions considered laws in this
No.165005, Sept. 16,2005) jurisdiction?
Q: What are the requisites of a valid waiver? A: No. However, decisions of the Supreme Court,
although in themselves not laws, are nevertheless
A: AFCUNF evidence of what the laws mean.
1. Waiving party must Actually have the
right he is renouncing. Q: When do judicial decisions form part of the law
2. He must have Full capacity to make the of the land?
waiver
3. Waiver must be Clear and Unequivocal A: As of the date of the enactment of said law. This
4. Waiver must Not be contrary to law, is so because the Supreme Court’s interpretation
public order, public morals, etc. merely establishes the contemporaneous legislative
5. When Formalities are required, they must intent that the construed law purports to carry into
be complied with. effect.
F. REPEAL OF LAWS Note: When a doctrine is overruled and a different

view is adopted, the new doctrine should be applied
Q: What are the kinds of repeal? Distinguish. prospectively and should not prejudice parties who
relied on the old doctrine.
A: Repeal may be:
1. EXPRESS - if the law expressly provides for Q: What is the Doctrine of Stare Decisis?
such
2. IMPLIED – if the provisions of the A: It is adherence to judicial precedents. Once a
subsequent law are incompatible or question of law has been examined and decided, it
inconsistent with those of the previous should be deemed settled and closed to further
law, PROVIDED, it is impossible to argument.
reconcile the two laws.
Note: This doctrine however is not inflexible, so that
Q: What are the two accepted instances of implied when in the light of changing conditions, a rule has
repeal? ceased to be beneficial to the society, courts may
depart from it.
A:
H. DUTY TO RENDER JUDGMENT
1. When the provisions in the two acts on the
same subject matter are irreconcilably
Q: Can the Court decline to render judgment by
contradictory, in which case, the later act, to
reason of silence of the law?
the extent of the conflict, constitutes an
implied repeal of earlier one; and
A: No. No judge or court shall decline to render
2. When the later act covers the whole subject of
judgment by reason of the silence, obscurity or
the earlier one and is clearly intended as a
insufficiency of the law (Art. 9).
substitute; thus it will operate to repeal the
earlier law (Carmelita Lledo v. Atty. Cesar V.
Note: However, this duty is not a license for courts to
Lledo, A.M. No. P-95-1167, February 9, 2010). engage in judicial legislation. The duty of the courts is
to apply or interpret the law, not to make or amend it.
Q: What is the rule on repeal of repealing laws?
I.PRESUMPTION AND APPLICABILITY OF CUSTOM
A: It depends upon how the old law is repealed by
the repealing law: Q: What is the presumption in case there is doubt
1. If the old law is expressly repealed and in the interpretation or application of laws?
repealing law is repealed: the Old law is
not revived A: It is presumed that the lawmaking body intended
right and justice to prevail (Art. 10).
4 CIVIL LAW TEAM

Note: In CIR v. Primetown Property Group, Inc., the SC

Q: What are customs? ruled that as between the Civil Code, which provides
that a year is equivalent to 365 days, and the
A: These are rules of conduct, legally binding and Administrative Code of 1987, which states that a year
obligatory, formed by repetition of acts uniformly is composed of 12 calendar months, it is the latter that
observed as a social rule. must prevail following the legal maxim, Lex posteriori
derogat priori.
Q: How are customs proved?
Q: What is the manner of computing a period?
A: GR: Must be proved as a fact, according to the
rules on evidence (Art. 12). A: The first day shall be excluded, and last day
included.
XPN: Courts may take judicial notice of a
custom if there is already a decision rendered Q: In a case for violation of the Copyright law filed
by the same court recognizing the custom. against her, Soccoro countered by saying that
since the crime was found out on September 3,
Q: What are the requisites to make a custom an 1963, while the information was filed on
obligatory rule? September 3, 1965, the crime had already
prescribed, since 1964 was a leap year. Has the
A: P-TOP crime prescribed?
1. Plurality or Repetition of acts
2. Practiced for a long period of Time A: Yes. With the approval of the Civil Code of the
3. The community accepts it as a proper way Philippines (RA 386) we have reverted to the
of acting, such that it is considered provisions of the Spanish Civil Code in accordance
Obligatory upon all. with which a month is to be considered as the
4. Practiced by the great mass of the social regular 30-month and not the solar or civil month
group. with the particularity that, whereas the Spanish
Civil Code merely mentioned 'months, days or
Q: May courts apply customs in deciding cases? nights,' ours has added thereto the term 'years' and
explicitly ordains in Article 13 that it shall be
A: understood that years are of three hundred sixty-
1. In civil cases, customs may be applied by the five days.(People v. Ramos GR L-25265, May 9,
courts in cases where the applicable law is: SOI 1978, Ramos v. Ramos GR L-25644, May 9, 1978)
a. Silent
b. Obscure However, when the year in questioned is a leap
c. Insufficient year, the 365 day rule is not followed because
February 28 and 29 of a leap year should be
Note: Provided said customs are not contrary to counted as separate days in computing periods of
law, public morals, etc. prescription (NAMARCO v. Tuazon, GR No L-29131,
Aug. 27, 1969).
2. In criminal cases, customs cannot be applied
because nullum crimen nulla poena sine lege Q: What is the rule if the last day falls on a Sunday
(There is neither crime nor punishment, or a legal holiday?
without a law).
J. LEGAL PERIODS A: It depends. If the act to be performed within the

period is:
Q: How do you compute the periods?
1. Prescribed or allowed by: ROO
A: Year – 365 days a. the Rules of Court
Month – 30 days, unless designated by its name, b. an Order of the court; or
in which case, it shall be computed according to c. any Other applicable statute
the number of days which it respectively have.
Day – 24 hours The last day will automatically be the next
Nighttime – from sunset to sunrise working day.
Week – 7 successive days regardless of which
day it would start 2. Arises from a contractual relationship – the act
Calendar week – Sunday to Saturday will still become due despite the fact that the
last day falls on a Sunday or a legal holiday.
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K. APPLICABILITY OF PENAL LAWS of the country where it is situated. (Art.

16)
Q: What is a law?
XPN: LEX NATIONALII – National law of
A: In its jural and concrete sense, law means a rule the person whose succession is under
of conduct formulated and made obligatory by consideration, applies to:
legitimate power of the state. (Diaz, Statutory Testate/Intestate Succession as to 3
Construction, p. 1) things only: OAI
Q: When, where and upon whom do the following a. Order of succession

laws apply? b. Amount of successional rights
c. Intrinsic validity of the testamentary
A: provisions.
1. PENAL LAWS
GR: TERRITORIALITY RULE - Penal laws and Note: The enumeration above is governed
laws of public security and safety shall be by the national law of the decedent,
obligatory upon all who live or sojourn in the regardless of place of death.
Philippine territory (Art. 14)
XPN: Treaty stipulations, Principle of Public 4. Law governing extrinsic validity of contracts,
International, Laws of Preferential Application. wills and public instruments.
E.g.
a. Ambassadors GR: Lex loci celebrationis (Art. 17)– forms and
b. Ministers solemnities of contracts, wills and other public
c. International agencies enjoying instruments shall be governed by the laws of
diplomatic immunity the country in which they are executed
Note: Consul is not entitled to the privileges and XPN: Philippine law shall apply in the following
immunities of ambassadors or ministers. cases even though performed abroad:
a. Acts are executed before the diplomatic
2. STATUS LAWS or consular officials of the Philippines.
GR: NATIONALITY RULE - Laws relating to b. Prohibitory laws concerning persons, their
a. family rights and duties acts or property, and those which have
b. status for their object public order, public policy
c. condition and good customs. (Art. 17)
d. legal capacity of persons
are binding upon citizens of the Q: What is the effect of laws, judgments
Philippines eventhough living abroad (Art. promulgated or conventions agreed upon in a
15) foreign country on Philippine laws?
XPN: A: As regards prohibitive laws:

a. In case of divorce obtained validly by an
alien pursuant to the rules that governs GR: Prohibitive laws concerning persons, their
his country, the Filipino spouse shall be acts, or property and laws which have for their
considered also as divorced. object public order, public policy or good
b. Domiciliary rule applies to stateless customs are not rendered ineffective by laws,
persons judgments promulgated or conventions agreed
upon in foreign country.
Note: the basis for determining the personal
law of an individual is either the Domiciliary XPN: Art 26, par. 2 of the Family Code (FC), on
Rule (Domicile) or Nationality Rule mixed marriages where the foreigner obtained a
(Citizenship) divorce decree abroad and was thereby
capacitated to remarry.
3. REAL STATUTES – Laws on Property
Note: in this case, even though divorce is not
GR: LEX REI SITAE – Real property as well recognized in the Philippines as a mode of terminating
as personal property is subject to the law marriage, still the marriage is terminated by virtue of a
judgment of divorce and issuance of a divorce decree
by a foreign court.
6 CIVIL LAW TEAM

L. CONFLICT OF LAWS, RELATIVE TO DIVORCE such law shall be presumed to be exactly the
same as the law of the forum.
Q: The second clause of the will of Joseph, a
Turkish citizen and a resident of the Philippines, 4. Doctrine of Operative Facts – Acts done
states that: pursuant to a law which was subsequently
declared unconstitutional remain valid, but not
xxx, it is my wish that the distribution of my when the acts are done after the declaration
property and everything in connection with of unconstitutionality.
this, my will, be made and disposed of in
accordance with the laws in force in the Q: Edward is a citizen of California domiciled in the
Philippine Islands, requesting all of my Philippines. After he executed his will, he went
relatives to respect this wish, otherwise, I back to America and stayed there. During the post
annul and cancel beforehand whatever mortem probate of the will, Helen, his illegitimate
disposition found in this will favorable to the natural child, opposed it on the ground of
person or persons who fail to comply with preterition. She claims that under Art. 16 par. 2 of
this request. the Civil Code, in case of succession, the national
law of the deceased - the civil code of California -
Is the clause above-quoted valid? should govern., which provides that if a Californian
not domiciled in California dies, the law of his
A: No, it is void. The second clause of the will domicile must govern. Lucy, on the other hand,
regarding the law which shall govern it and the counters that under the same provision, the
condition imposed, is null and void, being contrary national law of the deceased should apply. Which
to law. Article 792 of the Civil Code provides that law should be applied – Philippine law or
“Impossible conditions and those contrary to law or Californian Law?
good morals shall be considered as not imposed
and shall not prejudice the heir or legatee in any A: Philippine Law should be applied. Where the
manner whatsoever, even should the testator testator (Edward) was a citizen of California, and
otherwise provide.” domiciled in the Philippines, the amount of
successional rights should be governed by his
Said clause is contrary to law because it expressly national law, that is, Californian law. However, the
ignores the testator's national law when, according conflict of law rules of California provides that in
to article 10 of the Civil Code, such national law of cases of citizens who are residents of another
the testator is the one to govern his testamentary country, the law of the country of domicile should
dispositions. Said condition then is considered apply, hence, Philippine law on legitimes should be
unwritten, hence the institution of legatees is applied. This is so because California law itself
unconditional and consequently valid and effective. refers the case back to the Philippines. The
Philippine court has no other alternative but to
Q: Explain the following doctrines: accept the referring back, for to do otherwise,
might result again in its referring back to the
A: Philippines, which would give rise to a sort of an
1. Renvoi Doctrine (“referring back”) – Renvoi “international football”. (Aznar v. Garcia, G.R. No.L-
takes place when the conflicts rule of the 16749. Jan. 31, 1963)
forum makes a reference to a foreign law, but
the foreign law is found to contain a conflict
rule that returns or refers the matter back to
the law of the forum (Remission).
2. Transmission theory – Provides that when the

conflicts rule of the forum makes a reference
to a foreign law, but the foreign law is found to
contain a conflict rule that refers it to a third
country, the law of the third country shall
apply.
3. Doctrine of Processual Presumption – The

foreign law, whenever applicable, should be
proved by the proponent thereof, otherwise,
7
HUMAN RELATIONS deceptive device to inveigle her to obtain her

consent to the sexual act, could justify the award of
A. BREACH OF PROMISE TO MARRY damages pursuant to Article 21 not because of such
promise to marry but because of the fraud and
Q: Is breach of promise to marry an actionable deceit behind it and the willful injury to her honor
wrong? and reputation which followed thereafter. It is
essential, however, that such injury should have
A: GR: No. A breach of promise to marry per se is been committed in a manner contrary to morals,
not an actionable wrong. There is no provision of good customs or public policy. In the instant case,
the Civil Code authorizing an action for breach of Ayatollah's fraudulent and deceptive protestations
promise to marry. of love for and promise to marry Maria that made
her surrender her virtue and womanhood to him
XPN: When the act is not a mere breach of and to live with him on the honest and sincere
promise to marry but constitutes one where belief that he would keep said promise. In short,
damages pursuant to Art. 21 of the Civil Code Maria surrendered her virginity, the cherished
may be recovered, such as: possession of every single Filipina, not because of
lust but because of moral seduction. (Gashem
1. Where the woman is a victim of moral Shookat Baksh v. CA, G.R. No. 97336, Feb. 19, 1993)
seduction. (Gashem Shookat Baksh v. CA,
G.R. No. 97336, Feb. 19, 1993) Q: Soledad a high school teacher used to go
around together with Francisco, who was almost
2. Where one formally sets a wedding and ten (10) years younger than she. Eventually,
go through and spend for all the intimacy developed between them after Soledad
preparations and publicity, only to walk became an underwriter in Cebu. One evening,
out of it when the matrimony was about after coming from the movies, they had sexual
to be solemnized. (Wassmer v. Velez, G.R. intercourse in Francisco's cabin on board M/V
No. L-20089 , Dec. 26, 1964) "Escaño," to which he was then attached as
apprentice pilot. After a few months, Soledad
Q: Maria met Ayatollah, an Iranian medical advised Francisco that she was pregnant,
student, at the restaurant where she worked. A whereupon he promised to marry her. Later their
few days after, Ayatollah courted and proposed to child was born. However, subsequently, Francisco
marry Maria. The latter accepted his love on the married another woman. Soledad filed a
condition that they would get married; they complaint for moral damages for alleged breach of
therefore agreed to get married. When the couple promise to marry. May moral damages be
visited Maria's parents, Ayatollah was allowed to recovered for breach of promise to marry?
sleep with Maria during the few days of their stay.
The couple continued to live together in an A: No. It is the clear and manifest intent of our law
apartment. However, Ayatollah's attitude towards making body not to sanction actions for breach of
Maria changed. He maltreated her and when promise to marry. Moreover, Francisco is not
Maria became pregnant, Ayatollah gave her morally guilty of seduction, not only because he is
medicine to abort the fetus. Despite the abuses, approximately ten (10) years younger than the
Maria continued to live with Ayatollah and kept complainant — who around thirty-six (36) years of
reminding him of his promise to marry her. age, and as highly enlightened as a former high
However, Ayatollah told her that he could not do school teacher and a life insurance agent are
so because he was already married to a girl in supposed to be — when she became intimate with
Bacolod City. Maria left and filed a complaint for him, than a mere apprentice pilot, but, also,
damages against Ayatollah for the alleged because, the court of first instance found that,
violation of their agreement to get married. May complainant "surrendered herself" to Francisco
damages be recovered for a breach of promise to because, "overwhelmed by her love" for him, she
marry on the basis of Article 21 of the Civil Code? "wanted to bind" "by having a fruit of their
engagement even before they had the benefit of
A: A breach of promise to marry per se is not an clergy. (Hermosisima v. CA, G.R. No. L-14628,
actionable wrong. But where a man's promise to September 30, 1960)
marry is the proximate cause of the acceptance of
his love by a woman and his representation to fulfill Note: To constitute seduction there must be some
that promise thereafter becomes the proximate sufficient promise or inducement and the woman must
cause of the giving of herself unto him in a sexual yield because of the promise or other inducement. If
congress, proof that the promise was only a she consents merely from carnal lust and the
8 CIVIL LAW TEAM

HUMAN RELATIONS
intercourse is from mutual desire, there is no

seduction.
Q: What are the elements of an action under

Article 21 of the Civil Code?
A: LCI
1. there is an act which is Legal
2. but which is Contrary to morals, good
customs, public order or policy
3. the act is done with Intent to injure.
Note: Art. 21 deals with acts contra bonus mores or

contrary to good morals and presupposes loss or
injury, material or otherwise, which one may suffer as
a result of such violation
9
PERSONS Q: What are the circumstances that modify or limit

capacity to act?
I. PERSONS AND PERSONALITY
A: I-PAID-FAT-PIA
A.CAPACITY TO ACT 1. Insanity
2. Prodigality
1.CIVIL PERSONALITY 3. Age
4. Imbecility
Q: What are the two kinds of persons? 5. Deaf-Mute
6. Family Relations
A: 7. Alienage
1. NATURAL – human beings and have physical 8. Trusteeship
existence 9. Penalty
2. JURIDICAL –artificial persons and product of 10. Insolvency
legal fiction 11. Absence
Q: Distinguish juridical capacity from capacity to 3. BIRTH

act.
Q: How is personality acquired by natural persons?
A:
JURIDICAL CAPACITY CAPACITY TO ACT A: GR: Actual/Permanent Personality – Personality
begins at birth; not at conception
Definition
Fitness to be the
Power to do acts with XPN: Presumptive/Temporary – The law
subject of legal
legal effect considers the conceived child as born
relations
(Conceptus pro natohabetur)
Acquisition
Inherent (co-exists Note: For there to be presumptive personality,
Through the fulfillment of
with the natural the fetus must be “born later in accordance with
specific legal activities
person) law” and the purpose for which such personality
Loss is given must be beneficial to the child.
Through death and other
Only through death
causes Q: Explain the meaning of the clause: “Born later
In relation to the other in accordance with law”.
Can exist without Cannot exist w/o juridical
capacity to act capacity A: A fetus with an intra-uterine life of:
Limitation 1. Less than 7 months – Must survive for at
Art. 38 (restriction) least 24 hours after its complete delivery
Art. 39 (modification/ from the maternal womb
None 2. At least 7 months –If born alive:
limitation),
among others considered born, even it dies within 24
hours after complete delivery.
2.RESTRICTIONS ON CAPACITY TO ACT
Q: Does the conceived child have the right to be
Q: What are the restrictions on capacity to act? acknowledged even if it is still conceived?
A: MIDI-PC A: Yes. It is a universal rule of jurisprudence that a

1. Minority, child, upon being conceived, becomes a bearer of
2. Insanity, legal rights and is capable of being dealt with as a
3. Deaf-mute, living person. The fact that it is yet unborn is no
4. Imbecility, impediment to the acquisition of rights provided it
5. Prodigality, be born later in accordance with Law (De Jesus v.
6. Civil Interdiction Syquia, G.R. No. L-39110, Nov. 28, 1933).
(Art. 38)
Q: What do you mean by provisional personality of
Note: They do not exempt the incapacitated person a conceived child?
from certain obligations.
10 CIVIL LAW TEAM

PERSONS AND FAMILY RELATIONS
A: A conceived child, although as yet unborn, has a beneficiaries. Can Wilma successfully claim that
limited and provisional personality. Its personality is one-half of the proceeds should belong to Willy’s
essentially limited because it is only for purposes estate?
favorable to the child. Its personality is provisional
because it depends upon the child being born alive A: Yes, Wilma can invoke the presumption of
later under certain conditions. survivorship and claim that one-half of the
proceeds should belong to Willy’s estate, under
4. DEATH Sec.3 (jj) par.5 Rule 131, Rules of Court, as the
dispute does not involve succession.
Q: How does civil personality cease?
Under this presumption, the person between the
A: It depends upon the classification of persons: ages of 15 and 60 is deemed to have survived one
1. Natural persons – by death whose age was over 60 at the time of their deaths.
2. Juridical persons – by termination of The estate of Willy endowed with juridical
existence personality stands in place and stead of Willy, as
beneficiary. (1998 Bar Question)
Q: What rule would apply in case there is doubt as
to who died first? A. COMPARISON OF ART.43 AND RULE 131
A: It depends on whether the parties are called to SURVIVORSHIP RULE UNDER CIVIL CODE
succeed each other.
1. If successional rights are involved – Art. 43 Q: Explain the survivorship rule under the New
of the NCC: Survivorship Rule; and Rule Civil Code.
131, Sec. 3(kk): Presumption of
simultaneity of deaths between persons A: If there is doubt as to who died first between 2
called to succeed each other, applies. or more persons who are called to succeed each
2. If no successional rights are involved – other, as to which of them died first,
Rule 131, Sec. 3 (jj) of the Rules of Court
applies. (Presumption of survivorship) Burden of Proof: Whoever alleges the death of one
prior to the other has the burden of proving such
Note: Both are to be applied only in the absence of claim.
facts.
Absent such proof: Presumption is they all died at
Q: Jaime, who is 65, and his son, Willy, who is 25, the same time. There shall be no transmission of
died in a plane crash. There is no proof as to who successional rights. (Rule 131, Sec. 3 [kk],Rules of
died first. Jaime’s only surviving heir is his wife, Court)
Julia, who is also Willy’s mother. Willy’s surviving
heirs are his mother, Julia, and his wife, Wilma. Q: What are the conditions that may warrant the
application of the survivorship rule?
In the settlement of Jaime’s estate, can Wilma
successfully claim that her late husband, Willy, had A: It applies when the following conditions are
a hereditary share since he was much younger present:
than his father and therefore, should be presumed 1. The parties are heirs to one another
to have survived longer? 2. There is no proof as to who died first
3. There is doubt as to who died first
A: No, Wilma cannot successfully claim that Willy
had a hereditary share in his father’s estate. Q: What is the presumption under the survivorship
rule?
Under Art 43, Civil Code, two persons “who are
called to succeed each other” are presumed to have A: Presumption of simultaneity of deaths. When
died at the same time, in the absence of proof as to two or more persons who are called to succeed
which of them died first. This presumption of each other die, they shall be presumed to have died
simultaneous death applies in cases involving the at the same time.
question of succession as between the two who
died, who in this case, are mutual heirs, being PRESUMPTIONS ON SURVIVORSHIP UNDER THE
father and son. RULES OF COURT
Q: Suppose, Jaime had a life insurance policy with Q: What are the requisites for the presumptions
his wife Julia, and his son, Willy, as the on survivorship under the Rules of Court to apply?
11
Can Marian’s baby be the beneficiary of the

A: insurance taken on the life of the mother?
1. Two or more persons
2. They perish in the same calamity A: An unborn child may be designated as the
3. It is not shown who died first beneficiary in the insurance policy of the mother.
4. There are no particular circumstances from An unborn child shall be considered a person for
which it can be inferred that one died ahead of purposes favorable to it provided it is born later
the other
in accordance with the Civil Code. There is no
doubt that the designation of the unborn child as
Q: What are the presumptions under the
a beneficiary is favorable to the child.
survivorship rule under the Rules of Court?
A: The survivorship shall be determined from the Q: Between Marian and the baby, who is
probabilities resulting from the strength and age of presumed to have died ahead?
the sexes according to the following rules:
A: If the baby was not alive when completely
Age/Sex of decedents at the delivered from the mother’s womb, it was not
Who presumed born as a person, then the question of who
time of death
to have survived
Decedent A Decedent B between two persons survived will not be an
Under 15 Under 15 Older issue. Since the baby had an intra-uterine life of
Above 60 Above 60 Younger more than 7 months, it would be considered
Under 15 born if it was alive, at the time of its complete
Under 15 Above 60
(younger) delivery from the mother’s womb. We can
Different sexes gather from the facts that the baby was
Above 15 BUT Above 15 BUT – male completely delivered. But whether or not it was
under 60 under 60 Same sex – alive has to be proven by evidence.
Older
Under 15 OR Between 15 Between 15 If the baby was alive when completely delivered
over 60 and 60 and 60 from the mother’s womb, then it was born as a
person and the question of who survived as
Note: The statutory rules in the determination of between the baby and the mother shall be
sequence of death does not absolutely apply in a case
resolved by the provisions of the Rules of Court
where indirect and/or inferential evidence surrounding
the circumstances of the deaths exists. Where there on survivorship. This is because the question has
are facts, known or knowable, from which a rational nothing to do with succession. Obviously, the
conclusion can be made, the presumption does not resolution of the question is needed just for the
step in, and the rule of preponderance of evidence implementation of an insurance contract. Under
controls. It is the "particular circumstances from which Rule 13, Sec. 3, (jj), (5) as between the baby who
survivorship can be inferred" that are required to be was under 15 years old and Marian who was 18
certain as tested by the rules of evidence. (Joaquin v. years old, Marian is presumed to have survived.
Navarro, G.R. No. L-5426, May 29, 1953)
In both cases, therefore, the baby never acquired
Q: At the age 18, Marian found out that she was
any right under the insurance policy. The
pregnant. She insured her own life and named
proceeds of the insurance will then go to the
her unborn child as her sole beneficiary. When
estate of Marian.
she was already due to give birth, she and her
boyfriend Pietro, the father of her unborn child,
Q: Will Prieto, as surviving biological father of
were kidnapped in a resort in Bataan where
the baby, be entitled to claim the proceeds of
they were vacationing. The military gave chase
the life insurance on the life of Marian?
and after one week, they were found in
abandoned hut in Cavite. Marian and Pietro
A: Since the baby did not acquire any right under
were hacked with bolos. Marian and the baby
the insurance contract, there is nothing for
she delivered were both found dead, with the
Prieto to inherit. (2008 Bar Question)
baby’s umbilical cord already cut. Pietro
survived.
5. JURIDICAL PERSONS
12 CIVIL LAW TEAM

Q: What are the different kinds of Judicial family and an inviolable social institution whose
Persons? nature, consequences, and incidents are governed
by law and not subject to stipulation, except that
A: marriage settlements may fix the property relations
during the marriage within the limits provided by
1. The State and its political subdivisions;
the Family Code. (Art. 1, FC)
2. Other corporations, institutions and entities
for public interest or purpose, created by A. NATURE OF MARRIAGE
law; their personality begins as soon as they
have been constituted according to law; Q: What is meant by the law when it declares
3. Corporations, partnerships and associations marriage as an inviolable social institution?
for private interest or purpose to which the
law grants a juridical personality, separate A: Marriage is an institution in which the
and distinct from that of each shareholder, community is deeply interested. The State has
partner or member (Art. 44) surrounded it with safeguards to maintain its purity,
continuity and permanence. The security and
Q: May juridical persons acquire and possess stability of the State are largely dependent on it. It
property of all kinds, as well as incur obligations is in the interest and duty of each member of the
and bring civil or criminal actions? community to prevent the bringing about of a
condition that would shake its foundation and lead
to its destruction. The incidents of the status are
A: Yes, provided that they are in conformity with
governed by law, not by will of the parties. (Beso v.
the laws and regulations of their organization
Daguman, A.M. No. MTJ-99-1211, Jan. 28, 2000
(Art. 46) [citing Jimenez v. Republic, G.R. No. L-12790, Aug.
31,1960])
B. DOMICILE AND RESIDENCE OF PERSON
Q: Distinguish marriage from ordinary contract.
Q: Distinguish between residence and domicile.
A:
A: Residence is a place of abode, whether
MARRIAGE ORDINARY CONTRACT
permanent or temporary. Domicile denotes a
fixed permanent to which, when absent, one has As a contract
the intention of returning. Special contract
Merely a contract
Social institution
Q: Where is the domicile of a natural person for Applicable law
the exercise of civil rights and fulfillment of civil Governed by the law on Governed by the law on
obligations? marriage contracts
Right to stipulate
A: His place of habitual residence.
GR: Not subject to
stipulation
Q: Where is the domicile of juridical persons? Generally subject to
stipulations
XPN: Property relations
A: in marriage settlements
1. The place fixed by the law creating or Capacity to contract
recognizing the juridical person Minors may contract
2. In the absence thereof, the place where thru their parents or
their legal representation is established or Legal capacity required guardians or in some
where they exercise their principal instances, by
functions. themselves
Gender requirement
II. MARRIAGE Contracting parties
Contracting parties may
must only be two
Q: What is marriage? be two or more persons
persons of opposite
regardless of sex
sexes
A: Marriage is a special contract of permanent Dissolution by agreement
union between a man and a woman entered into in Dissolved only by death Can be dissolved by
accordance with law for the establishment of or annulment, never by mutual agreement
conjugal and family life. It is the foundation of the
13
mutual agreement among others. 2. Absence of any of the formal requisites?
KINDS OF REQUISITES A: GR: Void ab initio. (Art. 4)
ESSENTIAL REQUISITES XPN: Valid even in the absence of formal

requisite:
Q: What are the essential requisites of marriage? a. Marriages exempt from license
requirement
A: b. Either or both parties believed in
1. Legal capacity of the contracting parties who good faith that the solemnizing
must be a male and a female; officer had the proper authority.
2. Consent freely given in the presence of the (Art. 35 [2])
solemnizing officer. (Art. 2, FC)
3. Defect in essential requisites?
Q: What constitutes legal capacity of the parties to
marry? A: Voidable
A: ASL 4. Irregularity in formal requisites?

1. Age – at least 18years
2. Sex – between male and female A: Valid, but the party responsible for such
3. Lack of legal impediment to marry irregularity shall be civilly, criminally or
administratively liable. (Art. 4 par. 2)
Q: Are there other requirements, taking into
consideration the age of the parties to the MARRIAGE CEREMONY
marriage, for the validity of such marriage?
Q: What constitutes a valid marriage ceremony?
A: Yes, depending upon the age of the contracting
party. A: That which takes place with the:
1. personal appearance of the contracting
ADDITIONAL parties before the solemnizing officer and
AGE 2. their personal declaration that they shall
REQUIREMENTS
take each other as husband and wife
Parental consent and
18 to 21 years old 3. in the presence of not less that 2
Marriage counseling
witnesses of legal age.
Parental advice and
22 to 25 years old Note: No particular form of ceremony or religious rite
Marriage counseling
is required by law (Art. 6, FC).
Note: Absence of the additional requirement of
Q: Is marriage by proxy allowed?
parental consent does not make the marriage void but
only voidable.
A: It depends.
FORMAL REQUISITES 1. If performed in the Philippines – No, it is
not allowed, hence the marriage is void.
Q: What are the formal requisites of marriage?
Note: Philippine laws prohibit marriages by
proxy. Since the marriage is performed in
A: CAL
the Philippines, Philippine laws shall apply
1. Marriage Ceremony following the principle of lex loci
2. Authority of the solemnizing officer celebrationis.
3. Valid marriage License (Art. 3, FC)
2. If performed abroad – Whether it is
EFFECT OF ABSENCE OF REQUISITES allowed or not depends upon the law of
the place where the marriage was
Q: What is the status of marriage in case of: celebrated (lex loci celebrationis)
1. Absence of any of the essential requisites? Note: As to marriages between Filipinos - all
marriages solemnized outside the
A: Void ab initio (Art. 4) Philippines, in accordance with the laws
enforced in said country where they are
14 CIVIL LAW TEAM

solemnized, and valid there as such, shall A: No, it will not. The marriage will be still valid. The
also be valid here in the country, except Law permits marriages in articulo mortis without
those prohibited under Art. 35 (1), (2), (4), marriage license but it requires the solemnizing
(5), (6), 36, 37 and 38.(Art. 26, FC) officer to make an affidavit and file it.
SOLEMNIZING AUTHORITY However, such affidavit is not an essential or formal

requisite of marriage, the same with a Marriage
Q: Who are authorized to solemnize marriage? Contract. The signing of the marriage contract and
the affidavit is only required for the purpose of
A: It depends: evidencing the act, not a requisite of marriage. It is
1. Under ordinary circumstances: the obligation of the solemnizing officer. It does not
a. Incumbent judiciary member – affect the validity of marriage (De Loria v. Felix, G.R.
provided, within the court’s (his) No. L-9005, Jun. 20, 1958).
jurisdiction
b. Priest, rabbi, imam or minister of any Q: What are the authorized venues of marriage?
church/religious sect duly authorized
– provided at least one of the parties A: GR: Must be solemnized publicly within the
belongs to such church or religious jurisdiction of the authority of the solemnizing
sect. officer:
c. Consul general, consul or vice-consul 1. Chambers of the judge or in open court
– provided both parties are Filipinos 2. Church, chapel or temple
and marriage takes place abroad. 3. Office of the consul-general, consul or
d. Mayors (Arts 444 and 445 of LGC) vice-consul
Note: Includes “Acting Mayor” XPN:

1. Marriage at the point of death
2. Marriages in articulo mortis: 2. Marriage in remote places
a. Ship captain or airplane chief – 3. Marriage at a house or place designated
provided the marriage is performed: by the parties with the written request to
i. During voyage, even during the solemnizing officer to that effect.
stopovers
ii. Between passengers or crew Note: This provision is only directory, not mandatory.
members The requirement that the marriage be solemnized in a
b. Military commander of a unit who is particular venue or a public place is not an essential
a commissioned officer – provided requisite for the validity of the marriage.
the marriage is performed:
i. In absence of chaplain; Q: What is the exception to the rule requiring
ii. Within zone of military authority of the solemnizing officer?
operation;
iii. Between members of the A: Marriages contracted with either or both parties
armed forces or civilians believing in good faith that the solemnizing officer
had the authority to do so. (Art 35 (2))
Q: What must the solemnizing officer in a marriage
in articulo mortis do after solemnizing such LICENSE
marriage?
MARRIAGE LICENSE
A: He shall state in an affidavit executed before the
local civil registrar or any other person legally Q: What is the period of the validity of a marriage
authorized to administer oaths, that the marriage license?
was performed in articulo mortis and that he took
the necessary steps to ascertain the ages and A: The license shall be valid in any part of the
relationship of the contracting parties and the Philippines for a period of one hundred twenty days
absence of a legal impediment to the marriage. (120) from the date of issue, and shall be deemed
(Art. 29, FC) automatically cancelled at the expiration of said
period if the contracting parties have not made use
Q: Will the solemnizing officer’s failure to execute of it. (Art. 20, FC).
an affidavit that he solemnized the marriage in
articulo mortis affect the validity of marriage? Note: If the parties contracted marriage after 120 days
lapsed from the issuance of the marriage license, such
15
marriage shall be considered void for lack of marriage Q: What is the status of a marriage celebrated on
license. the basis of a license issued without the required
Certificate of Legal Capacity?
Q: What is the effect in the issuance of a marriage
license if a party who is required by law to obtain A: The marriage is valid as this is merely an
parental advice or undergo marriage counseling irregularity in complying with a formal requirement
failed to do so? of the law in procuring a marriage license, which
will not affect the validity of the marriage. (Garcia
A: The issuance of marriage license is suspended for v. Recio, G.R. 138322, Oct. 2, 2001)
3 months from the completion of publication of the
application. B. EXCEPTIONS
Note: The marriage is valid in this case. Q: What are the marriages exempt from the
license requirement?
Q: What is the status of the marriage if the parties
get married within said 3-month period? A: MARCOS-Z
A: It depends. 1. Marriages among Muslims or members of

1. If the parties did not obtain a marriage ethnic cultural communities.
license – the marriage shall be void for
lack of marriage license. 2. Marriages in Articulo mortis.
2. If the parties were able to obtain a a. Solemnized by a ship captain or
marriage license – the marriage shall be airplane pilot
valid without prejudice to the actions that b. within Zones of military operation.
may be taken against the guilty party.
3. Marriages in Remote places.
Q: Who issues the marriage license?
Note: “Remote Place” - no means of
A: The local civil registrar of the city or municipality transportation to enable the party to
where either contracting party habitually resides personally appear before the solemnizing
(Art. 9, FC). local civil registrar.
Note: Obtaining a marriage license in a place other 4. Marriages between parties Cohabiting for
than where either party habitually resides is a mere at least 5 years
irregularity.
5. Marriages solemnized Outside the
A. FOREIGN NATIONAL Philippines where no marriage license is
required by the country where it was
Q: What is required from the contracting parties solemnized.
before a marriage license can be obtained?
Q: What are the requisites for the 5-year
A: Each of the contracting parties shall file a cohabitation as an exception to the marriage
separate or individual sworn application with the license requirement?
proper local civil registrar (Art. 11, FC).
A: The requisites are: 5D PAS
Note: When either or both of the contracting parties 1. Living together as husband and wife at
are citizens of a foreign country, it shall be necessary least 5 years before the marriage.
for them to submit a certificate of legal capacity to
contract marriage, issued by their respective The 5 year period must be characterized
diplomatic or consular officials. by:
a. Exclusivity – the partners must live
Stateless persons or refugees from other country shall,
together exclusively, with no other
in lieu of the certificate of legal capacity herein
partners, during the whole 5-year
required, submit an affidavit stating the circumstances
showing such capacity to contract marriage. (Art 21,
period.
FC) b. Continuity – such cohabitation was
unbroken.
16 CIVIL LAW TEAM

Note: The period is counted from the date

of celebration of marriage. It should be the A: Yes, the marriage is still void. Even if they were
years immediately before the day of the separated in fact, and thereafter both Pepito and
marriage. Norma had started living with each other that has
already lasted for five years, the fact remains that
2. No legal impediment to marry each other Pepito had a subsisting marriage at the time when
During the period of cohabitation. he started cohabiting with Norma. It is immaterial
that when they lived with each other, Pepito had
Note: The five-year period of cohabitation already been separated in fact from his lawful
must have been a period of legal union had spouse. The subsistence of the marriage even
it not been for the absence of marriage. where there was actual severance of the filial
companionship between the spouses cannot make
3. Fact of absence of legal impediment must any cohabitation by either spouse with any third
be Present at the time of the marriage party as being one as "husband and wife". (Niñal v.
Bayadog, GR No. 133778, March 14, 2000)
4. Parties must execute an Affidavit that
they are living together as husband and MARRIAGE CERTIFICATE
wife for 5 years and that they do not have
any impediment to marry Q: What are the distinctions between a marriage
license and a marriage certificate?
5. Solemnizing officer must execute a Sworn
statement that he had ascertained the
MARRIAGE LICENSE MARRIAGE CERTIFICATE
qualifications of the parties and found no
Authorization by the Best evidence of the
legal impediment to their marriage
state to celebrate existence of the
(Manzano v. Sanches, Mar. 1, 2001)
marriage. marriage.
Not an essential or
Q: Pepito was married to Teodulfa. Teodulfa was Formal requisite of
formal requisite of
shot by him resulting in her death. After 1 year marriage.
marriage.
and 8 months, he married Norma without any
marriage license. In lieu thereof, they executed an
affidavit stating that they had lived together as Q: Guillermo and Josefa lived together as husband
and wife, but there is doubt as to whether they
husband and wife for at least five years and were
thus exempt from securing a marriage license. got married, since no record of the marriage
What is the status of their marriage? existed in the civil registry but their relatives and
friends maintained that the two in fact married
A: Void for lack of marriage license. To be exempt each other and lived as husband and wife for more
from the license requirement under the 5-year than half a century. Is Guillermo married to
cohabitation rule, the cohabitation should be in the Josefa?
nature of a perfect union that is valid under the law
but rendered imperfect only by the absence of the A: They are presumed to be married. In this
jurisdiction, every intendment of the law leans
marriage contract and is characterized by
continuity, that is, unbroken, and exclusivity, toward legitimizing matrimony. Persons dwelling
meaning no third party was involved at anytime together apparently in marriage are presumed to
within the 5 years. It should be a period of legal be in fact married. This is the usual order of things
union had it not been for the absence of the in society and, if the parties are not what they hold
marriage. themselves out to be, they would be living in
constant violation of the common rules of law and
In this case, Pepito and Norma are not exempt from propriety. Semper praesumitur pro matrimonio –
the marriage license requirement because at the always presume marriage. (Vda.De la Rosa v. Heirs
time of Pepito and Norma's marriage, it cannot be of Vda. De Damian, G.R. No. 103028, Oct. 10, 1997)
said that they have lived with each other as
husband and wife for at least five years prior to Note: Although a marriage contract is considered a
primary evidence of marriage, its absence is not always
their wedding day because from the time Pepito's
proof that no marriage took place. (Delgado Vda. De la
first marriage was dissolved to the time of his
Rosa, et al. v. Heirs of Marciana Rustia Vda. De
marriage with Norma, only about twenty months Damian, et al., G.R. No. 103028, Oct. 10, 1997)
had elapsed.
B. EFFECT OF MARRIAGE CELEBRATED ABROAD
Q: Would your answer be the same if Pepito was AND FOREIGN DIVORCE
separated in fact from Teodulfa?
17
2. Will your answer be the same if it was a

Q: What rules govern the validity of marriage? valid marriage between Filipinos?
A: It depends: A:
1. As to its extrinsic validity –Lex loci 1. Yes, the Filipino spouse is likewise capacitated.
celebrationis Divorce validly obtained abroad by the alien
spouse capacitating him/her to remarry will
Note: Locus regit actum -“the act is likewise allow the Filipino spouse to remarry.
governed by the law of the place where it is This is the rule laid down in Article 26 (2) of the
done” - is adhered to here in the Philippines Family Code.
as regards the extrinsic validity of marriage.
It should be noted however that the foreign
2. As to its intrinsic validity – Personal law spouse must be capacitated to remarry before
the Filipino spouse may also be capacitated to
Note: Personal law may either be the remarry.
national law or the law of the place where
the person is domiciled. Note: It is true that owing to the nationality
principle embodied in Art. 16 of the NCC, only
If the person involved is a stateless person, Philippine nationals are covered by the policy
domiciliary rule applies, otherwise, lex against absolute divorces the same being
nationalii applies. considered contrary to our concept of public
policy and morality. However, aliens may obtain
Q: What is the status of marriages between divorces abroad, which may be recognized in the
Filipinos solemnized abroad in accordance with Philippines, provided they are valid according to
the law in force in said country? their national law. The marriage tie, when thus
severed as to one party, ceases to bind either. A
A: GR: Marriages between Filipinos solemnized husband without a wife, or a wife without a
outside the Philippines in accordance with the law husband, is unknown to the law. (Van Dorn v.
of the foreign country where it is celebrated, if valid Romillo, Jr., GR No. L-68470, Oct. 8, 1985)
there, shall be valid here as such.
2. It depends. What is material in this case is the
XPN: It shall be void, even if it is valid in the citizenship of the spouse who obtained a
foreign country where the marriage was divorce decree abroad at the time the decree
celebrated, if any of the following was obtained and not their citizenship at the
circumstances are present: LIM – 2B – 2P time the marriage was celebrated.
1. Lack of legal capacity even with
parental consent (e.g. party is below If the Filipino spouse was naturalized as a
18); citizen of a foreign country before he/she
2. Incestuous; obtains a divorce decree and was thereafter
3. Contracted through Mistake of one capacitated to remarry, the Filipino spouse will
party as to the identity of the other; be capacitated to remarry.
4. Contracted following the annulment
or declaration of nullity of a previous Note: The naturalization of one of the
marriage but Before partition, etc.; parties, as well as the divorce decree
5. Bigamous or polygamous except as obtained by him or her, must be proven as a
provided in Art. 41 FC on terminable fact under our rules on evidence. The foreign
law under which the divorce was obtained
bigamous marriages;
must likewise be proven as our courts cannot
6. Void due to Psychological incapacity;
take judicial notice of foreign laws.
7. Void for reasons of Public policy
However, if the Filipino spouse remained to be
Q: Suppose in a valid mixed marriage (marriage a citizen of the Philippines when he/she
between a citizen of a foreign country and a citizen obtained a divorce decree abroad, such decree
of the Philippines,) the foreign spouse obtained a will not be recognized in the Philippines even if
divorce decree abroad and was capacitated to that spouse is subsequently naturalized as a
remarry. citizen of a foreign country. This is so because
1. May the Filipino spouse remarry despite at the time the spouse obtained the divorce
the fact that divorce is not valid in the decree, he/she was still a citizen of the
Philippines? Philippines and being naturalized afterwards
18 CIVIL LAW TEAM

does not cure this defect. (See: Republic v. negative. (Garcia v. Recio, G.R. No.
Iyoy, G.R. No. 152577, Sept. 21, 2005) 138322, Oct. 2, 2001)
Note: Burden of Proof lies with "the party C. VOID AND VOIDABLE MARRIAGES
who alleges the existence of a fact or thing
necessary in the prosecution or defense of
an action." Since the divorce was a defense Q: What may be the status of marriages?
raised by respondent, the burden of proving
the pertinent foreign law validating it falls A:
squarely upon him. Courts cannot take 1. Valid
judicial notice of foreign laws. The power of 2. Void
judicial notice must be exercised with 3. Voidable
caution, and every reasonable doubt upon
the subject should be resolved in the
Q: What are the distinctions between void and voidable marriages?
A:
VOID MARRIAGE VOIDABLE MARRIAGE
Status of marriage
Void ab initio Voidable: Valid until annulled
Petition filed
Declaration of Nullity of Marriage Annulment of Marriage
Who may file
GR: Solely by the husband or wife.
XPN: Any real party in interest, only in the
GR: Offended Spouse
following cases:
XPN:
1. Nullity of marriage cases commenced before
1.Parents or guardians in cases of insanity
the effectivity of A.M. No. 02-11-10.- March
2.Parents or guardians before the party
15, 2003.
reaches 21 years old on the ground of Lack of
2. Marriages celebrated during the effectivity of
Parental Authority
the Civil Code. (De Dios Carlos v. Sandoval,
G.R. No. 179922, December 16, 2008).
Prescriptive Period
GR: Within 5 years from discovery of the
ground
XPN:
No prescriptive period
1. Lifetime of spouse in cases of insanity
2. Before the party reaches 21 in cases where
parents or guardians may file annulment
How may be impugned
Either directly or collaterally Judicial declaration is necessary
Children
GR: Illegitimate;
XPN: Those conceived or born of marriages Legitimate

declared void under:
1. Art.36 (Psychological incapacity), or
2. Art. 52 in relation to Art. 53
Property
19
GR: governed by rules on absolute community

Property relations are governed by rules on co-
ownership XPN: unless another system is agreed upon in
marriage settlement
Judicial Declaration
GR: Not necessary that there is judicial declaration
Necessary
XPN: in case of remarriage
1. VOID MARRIAGE 1. If the change is artificial – No, he/she

cannot.
Q: What are the marriages that are void ab initio?
Note: The sex or gender at the time of birth
A: LAaMB- PIPS-18 shall be taken into account. He is still, in the
1. Absence of any of the essential or formal eyes of the law, a man although because of
requisites of marriage; the artificial intervention, he now has the
2. Marriages contracted by any party below physiological characteristics of a woman
18 years of age even with the consent of (Silverio v. Republic, G.R. No. 174689,
parents or guardians; Oct.22, 2007)
3. Solemnized without License, except those
marriages that are exempt from the 2. If the change is natural – He/she can.
license requirement;
4. Solemnized by any person not Authorized Q: Jennifer was registered as a female in her
to perform marriages unless such Certificate of Live Birth. In her early years, she
marriages were contracted with either or suffered from clitoral hypertrophy and was found
both parties believing in good faith that out that her ovarian structures had minimized. She
the solemnizing officer had the legal also alleged that she has no breasts or
authority to do so; menstruation. She was diagnosed to have
5. Contracted through Mistake of one of the Congenital Adrenal Hyperplasia (CAH) a condition
contracting parties as to the identity of where persons thus afflicted possess secondary
the other; male characteristics because of too much
6. Bigamous or polygamous marriages; secretion of androgen. She then alleged that for all
7. Subsequent marriages that are void under interests and appearances as well as in mind and
Art. 53 FC; emotion, she has become a male person. What is
8. Marriages contracted by any party, who Jennifer’s gender or sex?
at the time of the celebration of the
marriage, was Psychologically A: Male. Where the person is biologically or
incapacitated (Art. 36, FC); naturally intersex the determining factor in his
9. Incestuous Marriages (Art. 37, FC); gender classification would be what the individual,
10. Marriages declared void because they are having reached the age of majority, with good
contrary to Public policy (Art. 38, FC). reason thinks of his/her sex. Jennifer here thinks of
himself as a male and considering that his body
A. ABSENCE OF REQUISITES produces high levels of androgen, there is
preponderant biological support for considering
GENDER REQUIREMENT him as being male. Sexual development in cases of
intersex persons makes the gender classification at
Q: What is the status of a marriage between birth inconclusive. It is at maturity that the gender
Filipinos if the parties thereto are of the same sex? of such persons is fixed.
A: Void. For a marriage to be valid, it must be Jennifer has simply let nature take its course and
between persons of opposite sexes. has not taken unnatural steps to arrest or interfere
with what he was born with. And accordingly, he
Q: In case of a change in sex, can the person who has already ordered his life to that of a male. He
has undergone said change be allowed to marry could have undergone treatment and taken steps,
another of the same sex as he/she originally had? like taking lifelong medication, to force his body
into the categorical mold of a female but he did
A: It depends upon the cause for the change in sex. not. He chose not to do so. Nature has instead
taken its due course in his development to reveal
more fully his male characteristics.
20 CIVIL LAW TEAM

To him belongs the primordial choice of what Q: Judge Palaypayon solemnized marriages even
courses of action to take along the path of his without the requisite marriage license. Thus, some
sexual development and maturation. In the absence couples were able to get married by the simple
of evidence that he is an “incompetent” and in the expedient of paying the marriage fees. As a
absence of evidence to show that classifying him as consequence, their marriage contracts did not
a male will harm other members of society who are reflect any marriage license number. In addition,
equally entitled to protection under the law, the the judge did not sign their marriage contracts and
Court affirms as valid and justified his position and did not indicate the date of the solemnization, the
his personal judgment of being a male. (Republic v. reason being that he allegedly had to wait for the
Jennifer Cagandahan, G.R. No. 166676, Sep. 12, marriage license to be submitted by the parties.
2008) Such marriage contracts were not filed with the
Local Civil Registry. Are such marriages valid?
CONTRACTED BY PARTY BELOW 18
A: No. The Family Code pertinently provides that
Q: What is the status of marriages where one or the formal requisites of marriage are, inter alia, a
both of the parties are below 18 years of age? valid marriage license, except in the cases provided
for therein. Complementarily, it declares that the
A: It is void for lack of legal capacity. absence of any of the essential or formal requisites
shall generally render the marriage void ab initio
Q: Would your answer be the same if their parents and that, while an irregularity in the formal
consented to the marriage? requisites shall not affect the validity of the
marriage, the party or parties responsible for the
A: Yes. Parental consent does not have the effect of irregularity shall be civilly, criminally and
curing this defect. administratively liable.(Cosca v. Palaypayon, A.M.
No. MTJ-92-721, Sept. 30, 1994)
Q: What if the marriage was a mixed marriage
where the Filipino is 18 years old but the foreigner CONTRACTED THROUGH MISTAKE
is below 17 years of age. What is the status of the
marriage? Q: For the marriage to be void, on what
circumstance must the mistake refer to?
A: It depends. If the national law of the foreigner
recognizes 17 year old persons to be capacitated to A: For marriage to be rendered void, the mistake in
marry, then their marriage is valid, otherwise it is identity must be with reference to the actual
void. physical identity of other party, not merely a
mistake in the name, personal qualifications,
LACK OF AUTHORITY OF SOLEMNIZING OFFICER character, social standing, etc. (Rabuya, p. 213)
Q: What is the effect of lack of authority of BIGAMOUS MARRIAGES

solemnizing officer?
Q: If a person contracts a subsequent marriage
A: GR: The marriage is void ab initio. during the subsistence of a prior marriage, what is
the status of the subsequent marriage?
XPN:
1. Express - If either or both parties believed A: GR: Void for being bigamous or polygamous,
in good faith that the solemnizer had the even if celebrated abroad and valid there as such.
legal authority to do so. (Art. 35, FC)
2. Implied - Article 10 in relation to Article XPN: Valid if it is a terminable bigamous
26 of the Family Code. If the marriage marriage.
between a foreigner and a Filipino citizen
abroad solemnized by a Philippine consul Q: When is a marriage considered bigamous?
assigned in that country is recognized as
valid in the host country, such marriage A: It is when a person contracts a second or
shall be considered as valid in the subsequent marriage before the former marriage
Philippines. ( Sta. Maria Jr., Persons and has been legally dissolved, or before the absent
Family Relations Law) spouse has been declared presumptively dead by
means of judgment rendered in the proper
SOLEMNIZED WITHOUT LICENSE proceedings. (Art. 349, RPC)
21
A: There is no exact definition for psychological

Note: The same applies to polygamy. incapacity, but it was defined by the Supreme Court
as “no less than a mental (not physical) incapacity
Q: Arnold, a Filipino, and Britney, an American, that causes a party to be truly incognitive of the
both residents of California, decided to get basic marital covenants that concomitantly must be
married in their local parish, two years after their assumed and discharged by the parties to the
marriage, Britney obtained a divorce in California. marriage.”
While in Boracay, Arnold met Jenny, a Filipina,
who was vacationing there. Arnold fell in love with The determination is left solely with the courts on a
her. After a brief courtship and complying with all case-to-case basis. Determination of PI “depends on
the requirements, they got married in Hongkong the facts of the case. Each must be judged, not on
to avoid publicity, it being Arnold’s second the basis of a priori assumptions, predilections or
marriage. Is his marriage with Jenny valid? generalizations but according to its own facts
(Republic v. Dagdag, G.R. No. 109975. February 9,
A: Yes. The marriage will not fall under Art. 35(4) 2001).
on bigamous marriages, provided that Britney
obtained an absolute divorce, capacitating her to The intendment of the law has been to confine the
remarry under her national law. Consequently, the meaning of "psychological incapacity" to the most
marriage between Arnold and Jenny may be valid as serious cases of personality disorders clearly
long as it was solemnized and valid in accordance demonstrative of an utter insensitivity or inability to
with the laws of Hongkong. (2006 Bar Question) give meaning and significance to the marriage.
(Santos v. CA, G.R. No. 112019, Jan. 4, 1995)
Q: May a person contract a valid subsequent
marriage before a first marriage is declared void Q: What are the requisites of psychological
ab initio by a competent court? incapacity?
A: No. The Supreme Court has consistently held A:

that a judicial declaration of nullity is required 1. Juridical antecedence – must be rooted in the
before a valid subsequent marriage can be history of the party antedating the marriage,
contracted; or else, what transpires is a bigamous although overt manifestations may arise only
marriage, reprehensible and immoral. Article 40 of after such marriage.
the Family Code expressly requires a judicial 2. Gravity – grave enough to bring about the
declaration of nullity of marriage. (In re: Salvador v. disability of the party to assume the essential
Serafico, A.M. 2008-20-SC, Mar. 15, 2010) marital obligations.
3. Permanence or incurability – must be
Note: Under Art. 40 of the FC, before one can contract incurable. If curable, the cure should be
a second marriage on the ground of nullity of the first beyond the means of the parties involved.
marriage, there must first be a final judgment
declaring the first marriage void. If a party fails to Q: How is psychological incapacity proven?
secure a judicial declaration of nullity of the first
marriage, he or she runs the risk of being charged with
A: The root cause of psychological incapacity must
bigamy as the marital bond or vinculum in the first
be:
nuptial subsists (Mercado v. Tan GR: 137110,
Aug.,2000; Te v. CA GR No: 126746,Nov. 29,2009 ).
a. medically or clinically identified
b. alleged in the complaint
Q: What are the special cases when subsequent c. sufficiently proven by experts
marriage is allowed? d. clearly explained in the decision
Note: Expert evidence may be given by qualified

A:
psychiatrists and clinical psychologists.
1. Marriage between a Filipino and a foreigner
and procurement by the alien spouse of a valid
Q: Is a physician’s examination required in
divorce decree abroad, capacitating him/her to
establishing psychological incapacity as a ground
remarry.
for declaration of nullity?
2. Terminable bigamous marriages (Art. 41)
A: No. If the totality of evidence presented is
PSYCHOLOGICAL INCAPACITY
enough to sustain a finding of psychological
incapacity, physician’s examination of the person
Q: What is psychological incapacity?
concerned need not be resorted to.
22 CIVIL LAW TEAM

which would make respondent completely

Q: What are the guidelines set by the Court to aid unable to discharge the essential obligations
it in its disposition of cases involving psychological of a marital state, not merely youth,
incapacity? immaturity or sexual promiscuity. (Dedelvs
CA, G.R. no. 151867, Jan.29, 2004)
A:
1. Burden of proof to show the nullity of the 3. Disagreements regarding money matters.
marriage belongs to the plaintiff; (Tongol v. Tongol, G.R. No. 157610, Oct.
2. The root cause of the psychological incapacity 19, 2007)
must be: (a) medically or clinically identified,
(b) alleged in the complaint, (c) sufficiently 4. Mere abandonment.
proven by experts and (d) clearly explained in
the decision. Note: There must be proof of natal or
3. The incapacity must be proven to be existing at supervening disabling element in the
personality factor that effectively
“the time of the celebration” of the marriage.
incapacitates a person from accepting and
4. Such incapacity must also be shown to be
complying with the Essential Marital
medically or clinically permanent or incurable. obligations of Marriage. (Republic v.
5. Such illness must be grave enough to bring Quintero-Hamano, G.R. No. 149498, May 20,
about the disability of the party to assume the 2004)
essential obligations of marriage.
6. The essential marital obligations must be those 5. Sexual infidelity (Republic v. Dagdag, GR
embraced by Articles 68 up to 71 of the Family No. 109975, February 9, 2001).
Code as regards the husband and wife, as well
as Articles 220, 221 and 225 of the same Code Q: Would the state of being of unsound mind or
in regard to parents and their children. Such the concealment of drug addiction, habitual
non-complied marital obligation(s) must also alcoholism, homosexuality or lesbianism be
be stated in the petition, proven by evidence considered indicia of psychological incapacity, if
and included in the text of the decision. existing at the inception of marriage? Explain.
7. Interpretations given by the National Appellate
Matrimonial Tribunal of the Catholic Church in A: In the case of Santos v. CA (240 SCRA 20, 1995),
the Philippines, while not controlling or the Supreme Court held that being of unsound
decisive, should be given great respect by our mind, drug addiction, habitual alcoholism,
courts. lesbianism or homosexuality may be indicia of
8. The trial court must order the prosecuting psychological incapacity, depending on the degree
attorney or fiscal and the Solicitor General to of severity of the disorder. However, the
appear as counsel for the state. No decision concealment of drug addiction, habitual alcoholism,
shall be handed down unless the Solicitor lesbianism or homosexuality is a ground of
General issues a certification, which will be annulment of marriage. (2002 Bar Question)
quoted in the decision, briefly stating therein
his reasons for his agreement or opposition, as Q: Art. 36 of the FC provides that a marriage
the case may be, to the petition (Danilo A. contracted by any party who, at the time of the
Aurelio v. Vide Ma. Corazon P. Aurelio, G.R. No. celebration, was psychologically incapacitated to
175367, June 6, 2011). comply with the essential marital obligations of
marriage, shall be void.
Q: What are some instances where allegations of
psychological incapacity were not sustained? Choose the spouse listed below who is
psychologically incapacitated.
1. Mere showing of irreconcilable a. Nagger
differences and conflicting personalities. b. Gay or Lesbian
(Carating-Siayngco v. Siayngco, G.R. No. c. Congenital sexual pervert
158896, Oct, 27. 2004) d. Gambler
e. Alcoholic
2. Mere sexual infidelity or perversion, do
not by themselves constitute A: B and C. To be sure, the existence and
psychological incapacity, as well as concealment of these conditions at the inception of
immaturity and irresponsibility. marriage renders the marriage contract voidable
(Art 46, FC). They may serve as indicia of
Note: It must be shown that these acts are psychological incapacity, depending on the degree
manifestations of a disordered personality
23
and severity of the disorder (Santos v. CA, G.R. No. 3. Parents-in-law & children-in-law;
112019, January 4, 1995). Hence, if the condition of 4. Adopting parent & the adopted child;
homosexuality, lesbianism or sexual perversion, 5. Surviving spouse of the adopting parent &
existing at the inception of the marriage, is of such the adopted child;
a degree as to prevent any form of sexual intimacy, 6. Surviving spouse of the adopted child &
any of them may qualify as a ground for the adopter;
psychological incapacity. The law provides that the 7. Adopted child & legitimate child of the
husband and wife are obliged to live together, adopter;
observe mutual love, respect and fidelity (Art. 68, 8. Adopted children of the same adopter;
FC). The mandate is actually the spontaneous, 9. Parties where one, with the intention to
mutual affection between the spouses/ in the marry the other, kills the latter’s spouse,
natural order it is sexual intimacy which brings the or his/her spouse. (Art. 38, FC)
spouses wholeness and oneness. (Chi Ming Tsoi v.
CA, G.R. No. 119190, January 16, 1997) Note: The list is exclusive. If not falling within this
enumeration, the marriage shall be valid. Such as
Alternative Answer: marriages between:
None of them are necessarily psychologically 1. Adopted and Illegitimate child of the adopter
incapacitated. Being a nagger, etc., are at best only 2. Step brother and step sister
physical manifestations indicative of psychological 3. Brother-in-law and sister-in-law
incapacity. More than just showing the 4. Parties who have been guilty of adultery or
concubinage
manifestations of incapacity, the petitioner must
show that the respondent is incapacitated to
Q: Amor gave birth to Thelma when she was 15
comply with the essential marital obligations of
years old. Thereafter, Amor met David and they
marriage and that it is also essential that he must
got married when she was 20 years old. David has
be shown to be incapable of doing so due to some
a son, Julian, with his ex-girlfriend Sandra. Can
psychological, not physical illness. (Republic v.
Julian and Thelma get married?
Quintero-Hamano, G.R. No. 149498, May 20, 2004)
A: If the marriage was solemnized during the
Alternative Answer:
effectivity of the NCC, the marriage between
A congenital sexual pervert may be psychologically
stepbrother and stepsister is void. However, under
incapacitated if his perversion incapacitates him
the FC, the marriage may be valid. (2007 Bar
from discharging his marital obligations. For
Question)
instance, if his perversion is of such a nature as to
preclude any normal sexual activity with his spouse.
2. PRESCRIPTION
(2006 Bar Question)
Q: What is the prescriptive period of the action or
INCESTUOUS MARRIAGES
defense for the declaration of absolute nullity of
marriage?
Q: What marriages are considered incestuous?
A: None. The time for filing an action or defense for
A: Those marriages:
the declaration of absolute nullity of marriage,
1. Between ascendants and descendants of
whether in a direct or collateral manner, does not
any degree;
prescribe (Art. 39, FC).
2. Between brothers and sisters whether of
the full or half blood. (Art. 37, FC)
Note: Any of the parties in a void marriage can file an
action for the declaration of nullity of marriage even
Note: Regardless of whether the relationship between
though such party is the wrongdoer.
the parties is legitimate or illegitimate.
Q: What is the effect of death of a party in a
VOID BY REASON OF PUBLIC POLICY
petition for declaration of nullity of marriages?
Q: What are the marriages that are void by reason
A:
of public policy?
1. Before the entry of judgment – The court shall
order the case closed and terminated without
A: Marriages between:
prejudice to the settlement of estate in proper
1. Collateral blood relatives (legitimate or
th proceedings.
Illegitimate) up to the 4 civil degree;
2. After the entry of judgment – The decision
2. Step-parents & step-children;
shall be binding upon the parties and their
24 CIVIL LAW TEAM

successors-in-interest in the settlement of the party who files another action regarding the same
estate. controversy will be needlessly squandering time,
effort and financial resources because he is barred
Q: May the heirs of a deceased person file a by law from litigating the same controversy all over
petition for the declaration of nullity of his again. (Mallion v. Alcantara, G.R. No. 141528, Oct.
marriage after his death? 31, 2006)
A: No. The advent of the Rule on Declaration of Q: Is the declaration of nullity of marriage applied
Absolute Nullity of Void Marriages marks the prospectively?
beginning of the end of the right of the heirs of the
deceased spouse to bring a nullity of marriage case A: No, it retroacts to the date of the celebration
against the surviving spouse. While A.M. No. 02-11- of the marriage. However, although the judicial
10-SC declares that a petition for declaration of declaration of nullity of a marriage on the ground
absolute nullity of marriage may be filed solely by of psychological incapacity retroacts to the date
the husband or the wife, it does not mean that the of the celebration of the marriage insofar as the
compulsory or intestate heirs are without any vinculum between the parties is concerned, it
recourse under the law. They can still protect their
must be noted that the marriage is not without
successional right, for, compulsory or intestate
legal consequences or effects. One such
heirs can still question the validity of the marriage
consequence or effect is the incurring of criminal
of the spouses, not in a proceeding for declaration
of nullity but upon the death of a spouse in a liability for bigamy. To hold otherwise would be
proceeding for the settlement of the estate of the to render nugatory the State's penal laws on
deceased spouse filed in the regular courts. bigamy as it would allow individuals to
deliberately ensure that each marital contract be
However, with respect to nullity of marriage cases flawed in some manner, and to thus escape the
commenced before the effectivity of A.M. No. 02- consequences of contracting multiple marriages.
11-10 and marriages celebrated during the (Tenebro v. CA, G.R. No. 150758, Feb. 18, 2004)
effectivity of the Civil Code, the doctrine laid down
in the Niñal v. Bayadog case still applies; that the Q: While his marriage is subsisting, Veronico
children have the personality to file the petition to married Leticia, which marriage was later declared
declare the nullity of marriage of their deceased void on the ground of psychological incapacity.
father to their stepmother as it affects their When Veronico got married for the third time,
successional rights. (De Dios Carlos v. Sandoval, G.R. Leticia filed a case for bigamy against him.
No. 179922, Dec. 16, 2008).
For his defense, Veronico claims that effects of the
Q: If the court denies a petition for declaration of nullity of his marriage with Leticia retroacts to the
nullity of marriage based on psychological date when it was contracted, hence, he is not
incapacity, may a party to the said case file guilty of bigamy for want of an essential element –
another petition for declaration of its nullity based the existence of a valid previous marriage. Rule on
on the absence of marriage license? Veronico’s argument.
A: A petition to declare the marriage void due to A: No. Article 349 of the RPC penalizes the mere act
absence of marriage license, filed after the court of contracting a second or subsequent marriage
denied a petition to declare the marriage void due during the subsistence of a previous valid marriage.
to psychological incapacity, is barred by res Here, as soon as the second marriage to Leticia was
judicata. There is only one cause of action which is celebrated, the crime of bigamy had already been
the nullity of the marriage. Hence, when the second consummated as the second marriage was
case was filed based on another ground, there was contracted during the subsistence of the valid first
a splitting of a cause of action which is prohibited. marriage. (Tenebro v. CA,G.R. No. 150758, Feb. 18,
The petitioner is estopped from asserting that the 2004)
first marriage had no marriage license because in
the first case, he impliedly admitted the same when Q: Is the judicial declaration of absolute nullity of a
he did not question the absence of a marriage void marriage necessary?
license. Litigants are provided with the options on
the course of action to take in order to obtain A:
judicial relief. Once an option has been taken and a 1. For purposes of remarriage – judicial
case is filed in court, the parties must ventilate all declaration of absolute nullity is
matters and relevant issues therein. The losing necessary.
25
Note: In the instance where a party who has

previously contracted a marriage which is Q: What is the effect if the parties to the
legally unassailable, he is required by law to subsequent marriage obtains knowledge that the
prove that the previous one was an absolute spouse absent has reappeared?
nullity. But this he may do on the basis
solely of a final judgment declaring such A: None. If the absentee reappears, but no step is
previous marriage void.
taken to terminate the subsequent marriage, either
by affidavit or by court action, such absentee's mere
2. For purposes other than remarriage – no
reappearance, even if made known to the spouses
judicial action is necessary.
in the subsequent marriage, will not terminate such
marriage. (SSS v. Jarque Vda. De Bailon, G.R. No.
Note: Here, evidence may be adduced,
165545, Mar. 24, 2006)
testimonial or documentary, to prove the
existence of the grounds rendering such a
previous marriage an absolute nullity. But
Q: May a marriage be terminated extrajudicially?
these need not be limited solely to an earlier
final judgment of a court declaring such A: Yes. The recording of the affidavit of
marriage void. (Rabuya, Civil Law Reviewer, reappearance of the absent spouse in the civil
2009 ed) registry of the residence of the parties to the
subsequent marriage shall automatically terminate
SUBSEQUENT MARRIAGE the terminable bigamous marriage unless there is a
judgment annulling the previous marriage or
Q: In what cases may a person enter into a valid declaring it void ab initio. (Art. 42)
subsequent marriage during the subsistence of a
prior marriage? In Art 42, FC, no judicial proceeding to annul a
subsequent marriage contracted under Art. 41 is
A: In case of terminable bigamous marriages. If necessary. Also, the termination of the subsequent
before the celebration of the subsequent marriage: marriage by affidavit provided for in Art. 42 does
ABD not preclude the filing of an action in court to prove
1. The Absent spouse had been absent for 4 the reappearance of the absentee and obtain a
consecutive years (ordinary absence) or 2 declaration of dissolution or termination of the
consecutive years (extra-ordinary subsequent marriage. (SSS v. Jarque Vda. De Bailon,
absence); G.R. No. 165545, Mar. 24, 2006)
2. The present spouse has a well-founded
Belief that the absent spouse is already Q: When are non-bigamous subsequent marriages
dead; void?
3. There is judicial Declaration of
presumptive death in a summary A: The subsequent marriage of a person whose
proceeding. prior marriage has been annulled but contracted
said subsequent marriage without compliance with
Note: If both spouses of subsequent marriage acted in Art. 52, FC, shall be void.
bad faith, such marriage is void ab initio. Before he contracts a subsequent marriage, he must
first comply with the requirement provided for in
Q: Gregorio married Janet. When he was Art. 52, viz:
employed overseas, he was informed that Janet
left. Five years later, he filed an action for her to The recording in the civil registries and registries of
be declared presumptively dead without alleging properties of the following: JPDD
that he wishes to remarry. Will his action prosper? 1. Judgment of annulment;
2. Partition;
A: No. A petition to declare an absent spouse 3. Distribution of properties, and
presumptively dead may not be granted in the 4. Delivery of presumptive legitimes
absence of any allegation that the spouse present
will remarry. Also, there is no showing that Q: Ana Rivera had a husband, a Filipino citizen like
Gregorio conducted a search for his missing wife her, who was among the passengers on board a
with such diligence as to give rise to a "well- commercial jet plane which crashed in the Atlantic
founded belief" that she is dead. The four requisites Ocean ten (10) years earlier and had never been
not having concurred, his action for the declaration heard of ever since. Believing that her husband
of presumptive death of his wife should be denied. had died, Ana married Adolf Cruz Staedler, a
(Republic v. Nolasco, G.R. No. 94053, Mar. 17, 1993) divorced German national born of a German father
26 CIVIL LAW TEAM

and a Filipino mother residing in Stuttgart. To second marriage was celebrated, the second
avoid being required to submit the required marriage was void ab initio because of a prior
certificate of capacity to marry from the German subsisting marriage. Had Ana obtained a declaration
Embassy in Manila, Adolf stated in the application of presumptive death, the second marriage would
for marriage license stating that Adolf was a have been voidable.
Filipino, the couple got married in a ceremony
officiated by the Parish Priest of Calamba, Laguna In both cases, the fact that the German
in a beach in Nasugbu, Batangas, as the local misrepresented his citizenship to avoid having to
parish priest refused to solemnize marriage except present his Certificate of Legal Capacity, or the
in his church. Is the marriage valid? Explain fully. holding of the ceremony outside the church or
beyond the territorial jurisdiction of the solemnizing
A: The issue hinges on whether or not the missing officer, are all irregularities which do not affect the
husband was dead or alive at the time of the validity of the marriage. (2008 Bar Question).
second marriage.
VOIDABLE MARRIAGES
If the missing husband was in fact dead at the time
the second marriage was celebrated, the second Q: What is the effect if a marriage is voidable?
marriage was valid. Actual death of a spouse
dissolves the marriage ipso facto whether or not A: A voidable marriage is considered valid and
the surviving spouse had knowledge of such fact. A produces all its civil effects until it is set aside by
declaration of presumptive death even if obtained final judgment of a competent court in an action for
will not make the marriage voidable because annulment. (Rabuya, Persons, p. 295)
presumptive death will not prevail over the fact of
death. Q: What are voidable marriages and how may they
be ratified?
If the missing husband was in fact alive when the
A:
GROUND RATIFICATION WHO MAY FILE WHEN TO FILE
Contracting party who failed to
obtain parental consent: Through By the Within 5 years after
Marriage of a party 18 years contracting
free cohabitation after attaining party attaining the age of
of age or over but below 21
the age of 21. 21
solemnized without the
consent of the parents, Parent, guardian, or
Note: The parents cannot ratify the At any time before
guardian or person having person having legal
marriage. The effect of prescription such party has
substitute parental authority charge of the
on their part is that they are barred reached the age of
over the party, in that order contracting party
from contesting it but the marriage 21
is not yet cleansed of its defect.
At any time before
Sane spouse who had the death of either
no knowledge of the party
other’s insanity
Insane spouse: Through free At any time before
Either party was of unsound
cohabitation after coming to Any relative, guardian the death of either
mind
reason. or person having legal party
charge of the insane
During a lucid
Insane spouse interval or after
regaining sanity
Injured party: Through free
Within 5 years after
Consent of either party was cohabitation with full knowledge
Injured party the discovery of
obtained by fraud of the facts constituting the
fraud
fraud.
Vices of consent such as Injured party: Through free Within 5 years from
force, intimidation or undue cohabitation after the vices have Injured party the time the force,
influence ceased or disappeared. intimidation or
27
undue influence
disappeared or
ceased
May not be ratified but action
Within 5 years after
Impotence and STD may be barred by prescription
Injured party the celebration of
only, which is 5 years after the
marriage
marriage
UNSOUND MIND marriage cannot be annulled. (Buccat v. Buccat, G.R. No.

47101, Apr. 25, 1941)
Q: What is the test in determining unsoundness of
mind as a ground for annulment? Q: Aurora prayed for the annulment of her marriage
with Fernando on the ground of fraud in obtaining
A: It is essential that the mental incapacity must her consent after having learned that several
relate specifically to the contract of marriage and the months prior to their marriage, Fernando had pre-
test is whether the party at the time of the marriage marital relationship with a close relative of his.
was capable of understanding the nature and According to her the "non-divulgement to her of
consequences of the marriage. (Rabuya persons, p. such pre-marital secret" constituted fraud in
300) obtaining her consent w/in the contemplation of
no. 4 of Art.85, NCC. Is the concealment by the
Q: Who may file annulment based on unsound husband of a pre-marital relationship with another
mind? woman a ground for annulment of marriage?
A: GR: The sane spouse has the legal standing to file A: No. The non-disclosure to a wife by her husband
the action for annulment only in cases where he or of his pre-marital relationship with another woman is
she contracted the marriage without knowledge of not a ground for annulment of marriage. For fraud as
the other’s insanity. a vice of consent in marriage, which may be a cause
for its annulment, comes under Art. 85, No. 4 of the
XPN: When the sane spouse had knowledge of NCC.(now, Article 46 of the Family Code). This fraud,
the other’s insanity, action for annulment may be as vice of consent, is limited exclusively by law to
filed only by the following; those kinds or species of fraud enumerated in Art.
1. Any relative or guardian or person having 86.
legal charge of the insane
2. The insane spouse during a lucid interval or Note: The intention of Congress to confine the
after regaining sanity (Rabuya, p. 301) circumstances that can constitute fraud as ground for
annulment of marriage to the 3 cases therein may be
FRAUD deduced from the fact that, of all the causes of nullity
enumerated in Art. 85 (now, Article 46 of the Family
Q: What are the circumstances constituting fraud Code), fraud is the only one given special treatment in a
under Art. 45 (3)? subsequent article within the chapter on void and
voidable marriages. If its intention were otherwise,
Congress would have stopped at Art. 85, for anyway,
A: NPSD
fraud in general is already mentioned therein as a cause
1. Non-disclosure of conviction by final for annulment. (Anaya v. Palaroan, GR L-27930, Nov. 26
judgment of crime involving moral 1970)
turpitude;
2. Concealment by the wife of the fact that at DRUG ADDICTION
the time of marriage, she was Pregnant by
a man other than her husband; Q: Under what conditions, respectively, may drug
3. Concealment of Sexually transmitted addiction be a ground, if at all, for the declaration
disease, regardless of nature, existing at of nullity of marriage, annulment of marriage, and
the time of marriage; legal separation?
4. Concealment of Drug addiction, habitual
alcoholism, homosexuality and lesbianism. A:
(Art. 46) Declaration of Nullity of a. The drug addiction
Marriage must amount to
Note: Where there has been no misrepresentation or psychological
fraud, that is, when the husband at the time of the incapacity to comply
marriage knew that the wife was pregnant, the with the essential
28 CIVIL LAW TEAM

obligations of IMPOTENCE
marriage;
b. It must be antecedent Q: When may impotence be a ground for
(existing at the time of
annulment of marriage?
marriage), grave and
incurable:
Annulment of Marriage a. The drug addiction A: CPUII
must be concealed; 1. Exists at the time of the Celebration of
b. It must exist at the marriage
time of marriage; 2. Permanent (does not have to be absolute)
c. There should be no 3. Incurable
cohabitation with full 4. Unknown to the other spouse
knowledge of the drug 5. Other spouse must not also be Impotent
addiction;
d. The case is filed within
five (5) years from Q: In case there is no proof as to the potency of one
discovery. spouse, shall he be considered as impotent?
Legal Separation a. There should be no
condonation or A: GR: No. Presumption is in favor of potency.
consent to the drug
addiction; XPN: Doctrine of triennial cohabitation.
b. The action must be
filed within five (5)
Q:What is the doctrine of triennial cohabitation?
years from the
occurrence of the
cause. A: If after 3 years of living together with her
c. Drug addiction arises husband, the wife remained a virgin, the husband is
during the marriage presumed to be impotent (Rabuya, Persons, p. 310).
and not at the time of The husband will have to overcome this
marriage. (Bar presumption.
Question 1997)
Q: The day after John and Marsha got married, John
told her that he was impotent. Marsha continued to
Q: If drug addiction, habitual alcoholism, lesbianism live with John for two years. Is Marsha now
or homosexuality should occur only during the estopped from filing an annulment case against
marriage, would these constitute grounds for a John?
declaration of nullity or for legal separation, or
would they render the marriage voidable? A: No. Unlike the other grounds for annulment of
voidable marriage which are subject to ratification by
A: In accordance with law, if drug addiction, habitual continued cohabitation, the law does not allow
alcoholism, lesbianism or homosexuality should ratification in case of impotency. (2007 Bar
occur only during the marriage, they will: Question)
1. Not constitute as grounds for declaration
of nullity. (Art. 36, FC) SEXUALLY TRANSMITTED DISEASE
2. Constitute as grounds for legal separation.
(Art. 55, FC); and Q: When may affliction of a sexually transmitted
3. Not constitute as grounds to render the disease (STD) be a ground for annulment?
marriage voidable. (Arts. 45 and 46 of the
FC) (2002 Bar Question) A: Requisites: AESIAF
a. One of the parties is Afflicted with STD
VITIATED CONSENT
b. STD must be:
a. Existing at the time the marriage is
Q: When is vitiated consent a ground for annulment
celebrated
of marriage?
b. Serious
c. apparently Incurable
A: GR: Consent of either party was obtained by force,
c. The other spouse must not be Aware of
intimidation or undue influence
the other’s affliction
d. Injured party must be Free from STD.
XPN: If the same having disappeared or ceased,
such party thereafter freely cohabited with the
Q: Yvette was found to be positive for HIV virus,
other as husband and wife
considered sexually transmissible, serious and
29
incurable. Her boyfriend Joseph was aware of her opposed the same and where he does not allege that
condition and yet married her. After two (2) years evidence was suppressed or fabricated by any of the
of cohabiting with Yvette, and in his belief that she parties. (Tuason v. CA, G.R. No. 116607, April 10, 1996)
would probably never be able to bear him a healthy
child, Joseph now wants to have his marriage with Q: What are the actions prohibited in annulment
Yvette annulled on the ground that Yvette has STD. and declaration of absolute nullity of marriage
Yvette opposes the suit contending that Joseph is cases?
estopped from seeking annulment of their marriage
since he knew even before their marriage that she A: CCSSJ
was afflicted with HIV virus. 1. Compromise
2. Confession of judgment
Can the action of Joseph for annulment of his 3. Stipulation of facts
marriage with Yvette prosper? Discuss fully. 4. Summary judgment
5. Judgment on the pleadings
A: No. Concealment of a sexually transmitted disease
may annul the marriage if there was fraud existing in Note: What the law prohibits is a judgment based
the party concerned. In this case, there was no fraud exclusively or mainly on defendant's confession
because Joseph knew that Yvette was suffering from (Ocampo v. Florenciano, 107 Phil. 35). Thus, stipulation
HIV when he married her. (par 3, Art. 46, Family of facts or confession of judgment if sufficiently
supported by other independent substantial evidence to
Code)
support the main ground relied upon, may warrant an
annulment or declaration of absolute nullity.
Q: Differentiate Articles 45 and 46 of the Family
Code on STD as ground for annulment
6. PENDENCY OF ACTION
A:
Q: What is the duty of the Court during the
ARTICLE 45 ARTICLE 46 pendency of the action for annulment, declaration
Affliction Concealment of absolute nullity of marriage or legal separation?
The act of concealing is
The fact of being afflicted
the ground for A: The Court shall, in the absence of adequate
is the ground for
annulment as it written agreement between the spouses, provide for
annulment
constitutes Fraud the:
Whether concealed or There must be 1. Support of the spouses
not concealment 2. Support and custody of the common
Must be Serious and Does not have to be children.
Incurable serious and incurable 3. Visitation rights of the other
parent.(Art.49, FC)
5. PRESENCE OF PROSECUTOR
7. EFFECTS OF NULLITY
Q: What is the role of the prosecutor or Solicitor
General in all cases of annulment or declaration of Q: What rule governs the liquidation of properties
absolute nullity of marriage? in marriages declared void or annulled by final
judgment?
A: They shall take steps to prevent collusion between
the parties and to take care that evidence is not A:
fabricated or suppressed. Concomitantly, even if 1. Void marriages:
there is no suppression of evidence, the public GR: The rules on co-ownership under the Civil
prosecutor has to make sure that the evidence to be Code. (Valdes v. RTC)
presented or laid down before the court is not
fabricated. Truly, only the active participation of the XPN: Art. 43(2) of the Family Code in
public prosecutor or the Solicitor General will ensure marriages declared void under Art. 40. (Art.
that the interest of the State is represented and 50)
protected in proceedings for declaration of nullity of
marriages by preventing the fabrication or 2. Voidable marriages under Art. 45: shall be
suppression of evidence. (Art. 48, FC) liquidated in accordance with Art. 43(2) of the
Family Code.(Art. 50)
Note: The non-intervention of the prosecutor is not
fatal to the validity of the proceedings in cases where Note: In both instances under Articles 40 and 45, the
the respondent in a petition for annulment vehemently marriages are governed either by absolute community
30 CIVIL LAW TEAM

of property or conjugal partnership of gains unless the 2. Attempt to corrupt or induce petitioner,
parties agree to a complete separation of property in a common child, child of petitioner to
marriage settlement entered into before the marriage. engage in prostitution, or connivance in
(Dino v. Dino, G.R. No. 178044, Jan. 19, 2011) such corruption or inducement;
3. Attempt by respondent against Life of
Q: What must the final judgment of nullity or petitioner;
annulment provide? 4. Final judgment sentencing respondent to
imprisonment of more than 6 years, even if
A: The final judgment shall provide for the ff: pardoned;
1. Liquidation, partition and distribution of 5. Drug Addiction or habitual alcoholism of
the properties of the spouses; respondent;
2. Custody and support of the common
children; and Note: It must exist after celebration of
3. Delivery of their presumptive legitimes, marriage
Unless such matters had already been adjudicated in 6. Physical violence or moral pressure to
previous judicial proceedings, in which case, the final Compel petitioner to change religious or
judgment of nullity or annulment need not provide political affiliation;
for those which have already been adjudicated. 7. Bigamous marriage Subsequently
contracted by respondent in the
Note: Where there was a failure to record in the civil Philippines or abroad
registry and registry of property the judgment of 8. Sexual Infidelity or perversion;
annulment or absolute nullity of the marriage, the 9. Lesbianism or homosexuality of
partition and distribution of the property of the respondent;
spouses, and the delivery of the children’s presumptive
legitimes, it shall not affect third persons. (Arts. 52, FC) Note: It must exist after celebration of
marriage
Q: What are the forms of presumptive legitime?
10. Abandonment of petitioner by respondent
A: without justifiable cause for more than 1
1. Cash year.
2. Property
3. Sound security Q: If a man commits several acts of sexual infidelity,
particularly in 2002, 2003, 2004, 2005, does the
Q: What must be done by a person whose prior prescriptive period to file for legal separation run
marriage was annulled or declared void if he wishes from 2002?
to remarry?
A: The prescriptive period begins to run upon the
A: He must comply with the requirement provided commission of each act of infidelity. Every act of
for in Art. 52, before he contracts a subsequent sexual infidelity committed by the man is a ground
marriage, viz: for legal separation. (2007 Bar Question)
The recording in the civil registries and registries of Q: Lucita left the conjugal dwelling and filed a
properties of the following: JPDD petition for legal separation due to the physical
1. Judgment of annulment; violence, threats, intimidation and grossly abusive
2. Partition; conduct she had suffered at the hands of Wiliam,
3. Distribution of properties; and her husband. William denied such and claimed that
4. Delivery of presumptive legitimes. since it was Lucita who had left the conjugal abode,
then the decree of legal separation should not be
III. LEGAL SEPARATION granted, following Art.56 (4) of the FC which
provides that legal separation shall be denied when
A. GROUNDS both parties have given ground for legal separation.
Should legal separation be denied on the basis of
Q: What are the grounds for legal separation? William’s claim of mutual guilt?
A: PALFAC SILA A: No. Art. 56 (4) of the FC does not apply since the
1. Repeated Physical violence or grossly abandonment that is a ground for legal separation is
abusive conduct against petitioner, abandonment without justifiable cause for more
common child, child of petitioner; than one year. In this case, Lucita left William due to
31
his abusive conduct. Such act does not constitute the a. Force, or
abandonment contemplated in the said provision. b. threat of force;
Since this is so, there is no mutual guilt between c. physical harm, or
them as there is only one erring spouse. (Ong Eng d. through intimidation directed against
Kiam v. CA, GR No. 153206, Oct. 23, 2006) the woman or her child or her/his
immediate family;
Q: What acts are considered acts of violence under 7. Engaging in purposeful, knowing, or
R.A. 9262? reckless conduct, personally or through
another, that alarms or causes substantial
A: emotional or psychological distress to the
1. Causing, threatening to cause, or attempting woman or her child.
to cause physical harm to the woman or her
child; This shall include, but not be limited to, the
2. Placing the woman or her child in fear of following acts:
imminent physical harm; a. Stalking or following the woman
3. Attempting to compel or compelling the or her child in public or private
woman or her child: places;
a. to engage in conduct which the woman or b. Peering in the window or
her child has the right to desist from; or lingering outside the residence of
b. desist from conduct which the woman or the woman or her child;
her child has the right to engage in, c. Entering or remaining in the
4. Attempting to restrict or restricting the dwelling or on the property of
woman’s or her child’s freedom of movement the woman or her child against
or conduct by: her/his will;
a. Force, or d. Destroying the property and
b. threat of force; personal belongingness or
c. physical, or inflicting harm to animals or pets
d. other harm, or of the woman or her child; and
e. threat of physical or other harm; e. Engaging in any form of
f. intimidation directed against the woman or harassment or violence;
child. 8. Causing mental or emotional anguish,
This shall include, but not limited to, the public ridicule or humiliation to the woman
following acts committed with the purpose or or her child, including, but not limited to,
effect of controlling or restricting the woman’s repeated verbal and emotional abuse, and
or her child’s movement or conduct: denial of financial support or custody of
i. Threatening to deprive or actually minor children of access to the woman’s
depriving the woman or her child of child/children.
custody to her/his family;
ii. Depriving or threatening to deprive Q: What is a Protection Order under R.A. 9262?
the woman or her children of financial
support legally due her or her family, A: Protection order is an order issued under this act
or deliberately providing the woman’s for the purpose of preventing further acts of violence
children insufficient financial support; against a woman or her child and granting other
iii. Depriving or threatening to deprive necessary relief. (Rabuya, Persons, p. 376)
the woman or her child of a legal
right; The relief granted under a protection order serves
iv. Preventing the woman in engaging in the purpose of safeguarding the victim from further
any legitimate profession, occupation, harm, minimizing any disruption in the victim’s daily
business or activity or controlling the life, and facilitating the opportunity and ability of the
victim’s own money or properties, or victim to independently regain control over her life.
solely controlling the conjugal or The provisions of the protection order shall be
common money, or properties; enforced by law enforcement agencies. The
5. Inflicting or threatening to inflict physical protection orders that may be issued under this Act
harm on oneself for the purpose of are the barangay protection order (BPO), temporary
controlling her actions or decisions; protection order (TPO) and permanent protection
6. Causing or attempting to cause the woman order (PPO).
or her child to engage in any sexual activity
which does not constitute rape, by: Q: Who may file for protection order?
32 CIVIL LAW TEAM

cause and within five years from and after the date
A: when such cause occurred.
1. The offended party;
2. Parents or guardians of the offended party; In this case, William’s action is already barred
3. Ascendants, descendants or collateral relatives because of his failure to petition for legal separation
within the fourth civil degree of consanguinity proceedings until ten years after he learned of his
or affinity; wife's adultery, which was upon his release from
4. Officers or social workers of the DSWD or social internment in 1945. (Brown v.Yambao, G.R. No. L-
workers of local government units (LGUs); 10699, Oct. 18, 1957)
5. Police officers, preferably those in charge of
women and children’s desks; Note: This case was decided under the civil code not
6. Punong barangay or Barangay Kagawad; under the family code.
7. Lawyer, counselor, therapist or healthcare
provider of the petitioner; What is the effect of failure to interpose
8. At least two (2) concerned responsible citizens prescription as a defense?
of the city or municipality where the violence
against women and their children occurred and A: None. While it is true that prescription was not
who has personal knowledge of the offense interposed as a defense, nevertheless, the courts can
committed. take cognizance thereof, because actions seeking a
decree of legal separation, or annulment of
B. DEFENSES marriage, involve public interest and it is the policy
of our law that no such decree be issued if any legal
Q: What are the grounds for denial of petition for obstacles thereto appear upon the record. (Brown v.
legal separation? Yambao, G.R. No. L-10699, Oct. 18, 1957)
4 Q: Rosa and Ariel were married in the Catholic

A: C MP-DR
1. Condonation of the act complained of; Church of Tarlac, Tarlac on January 5. 1988. In 1990,
2. Consent to the commission of the Ariel went to Saudi Arabia to work. There, after
offense/act; being converted into Islam, Ariel married Mystica,
3. Connivance in the commission of the act; Rosa learned of the second marriage of Ariel on
4. Collusion in the procurement of decree of January 1, 1992 when Ariel returned to the
LS; Philippines with Mystica. Rosa filed an action for
5. Mutual guilt; legal separation on February 5, 1994.
6. Prescription: 5 yrs from occurrence of
cause; 1. Does Rosa have legal grounds to ask for
7. Death of either party during the pendency legal separation?
of the case (Lapuz-Sy v. Eufemio, G.R. No. 2. Has the action prescribed?
L-31429, Jan. 31, 1972);
8. Reconciliation of the spouses during the A:
pendency of the case (Art. 56, FC). 1. Yes, the abandonment of Rosa by Ariel for more
than one (1) year is a ground for legal
Q: What is the prescriptive period for filing a separation unless upon returning to the
petition for legal separation? Philippines, Rosa agrees to cohabit with Ariel
which is allowed under the Muslim Code. In this
A: An action for legal separation shall be filed within case, there is condonation.
five years from the time of the occurrence of the
cause (Art. 57, FC). An action filed beyond that The contracting of a subsequent bigamous
period is deemed prescribed. marriage whether in the Philippines or abroad is
a ground for legal separation under Article 55(7)
Q: William filed a petition for legal separation in of the Family Code. Whether the second
1955 grounded on Juanita’s adulterous relations marriage is valid or not, Ariel having converted
allegedly discovered by William in 1945. Was into Islam, is immaterial.
William’s action already barred by prescription?
2. No. Under Article 57 of the Family Code, the
A: Yes. Under Article 102, NCC, an action for legal aggrieved spouse must file the action within five
separation cannot be filed except within one (1) year (5) years from the occurrence of the cause. The
from and after the plaintiff became cognizant of the subsequent marriage of Ariel could not have
occurred earlier than 1990, the time he went
to Saudi Arabia. Hence, Rosa has until 1995 to
33
bring the action under the Family Code. (1994 The court denied the petition on the ground both of
Bar Question) them had incurred in a misconduct of similar nature
that barred the right of action under Art. 100, NCC.
C. COOLING-OFF PERIOD
William argues that in cross-examining him with
Q: What is the mandatory cooling-off period? regard to his marital relation with Lilia, who was
not his wife, the Assistant Fiscal acted as counsel
A: The requirement set forth by law that an action for Juanita when the power of the prosecuting
for legal separation shall in no case shall be tried officer is limited to finding out whether or not there
before 6 months has elapsed since the filing of the is collusion, and if there is no collusion, to intervene
petition, to enable the contending spouses to settle for the state. Is his argument correct?
differences. In other words, it is for possible
reconciliation (Art. 58, FC). A: The argument is untenable. It was legitimate for
the Fiscal to bring to light any circumstances that
The 6 months cooling-off period is a mandatory could give rise to the inference that Juanita's default
requirement. Petition shall not be granted if it is not was calculated, or agreed upon, to enable him to
observed (Pacete vs. Carriaga, G.R. No. L-53880 obtain the decree of legal separation that he sought
March 17, 1994). without regard to the legal merits of his case. One
such circumstance is the fact of William's
Note: There is no cooling-off period if the ground cohabitation with Lilia, since it bars him from
alleged are those under R.A. 9262 (Anti-violence against claiming legal separation by express provision of
Women and Children). The court can immediately hear Article 100 of the new Civil Code. Such evidence of
the case. misconduct is a proper subject of inquiry as they may
justifiably be considered circumstantial evidence of
D. RECONCILIATION EFFORTS collusion between the spouses.
Q: What is required of the Court before legal Article 101 NCC, calling for the intervention of the
separation may be decreed? state attorneys in case of uncontested proceedings
for legal separation (and of annulment of marriages,
A: The Court shall take steps toward the under Article 88) emphasizes that marriage is more
reconciliation of the spouses and must be fully than a mere contract; that it is a social institution in
satisfied, despite such efforts, that reconciliation is which the state is vitally interested, so that its
highly improbable (Art. 59, FC). continuation or interruption cannot be made depend
upon the parties themselves. It is consonant with this
E. CONFESSION OF JUDGMENT policy that the inquiry by the Fiscal should be
allowed to focus upon any relevant matter that may
Q: What is the rule in rendering a judgment of legal indicate whether the proceedings for separation or
separation based upon a stipulation of facts or annulment are fully justified or not. (Brown v.
confession of judgment? Yambao, G.R. No. L-10699, Oct. 18, 1957)
A: A decree of legal separation cannot be issued Q: Who may file, when and where should the
solely on the basis of a stipulation of facts or a petition for legal separation be filed?
confession of judgment. The grounds for legal
separation must be proved. Neither confession of A:
judgment nor summary judgment is allowed (Art. 60, Who may file Husband or wife
FC). Within 5 years from the time of the
When to file
occurrence of the cause
Note: What the law prohibits is a judgment based
Family Court of the province or city
exclusively or mainly on defendant's confession.
where the petitioner or the
(Ocampo v. Florenciano, G.R. No. L-13553, Feb. 23,
1960) respondent has been residing for at
least 6 months prior to the date of
Where to file
EXTENT OF INQUIRY OF PROSECUTOR filing or in case of a non-resident,
where he may be found in the
Q: After learning of Juanita’s misconduct, William Philippines, at the election of the
filed a petition for legal separation. During his petitioner
cross-examination by the Assistant Fiscal, it was
discovered that William lived with a woman named F. EFFECTS OF FILING PETITION
Lilia and had children with her after the liberation.
34 CIVIL LAW TEAM

Q: What are the effects of filing of a petition for Note: But offending spouse shall have no right to
legal separation? any share of the net profits earned by the AC/CP
which shall be forfeited in according w/ Art. 43(2).
A:
1. The spouses shall be entitled to live separately 3. Custody of minor children is awarded to the
from each other. innocent spouse (subject to Art. 213, FC);
2. In the absence of a written agreement between 4. Offending spouse is disqualified to inherit from
the parties, the court shall designate either the innocent spouse by intestate succession;
rd
husband or the wife or a 3 person to 5. Provisions in the will of innocent spouse which
administer the absolute community or conjugal favors offending spouse shall be revoked by
partnership property. operation of law;
6. Innocent spouse may revoke donations he/she
G. EFFECTS OF PENDENCY made in favor of offending spouse;
Q: What is the effect of the death of plaintiff- Note: Prescriptive period: 5 years from finality of
spouse before a decree of legal separation? decree of legal separation
7. Innocent spouse may revoke designation of

A: The death of plaintiff before a decree of legal
offending spouse as beneficiary in any insurance
separation abates such action. Being personal in
policy, even when stipulated as irrevocable.
character, it follows that the death of one party to
the action causes the death of the action itself - actio
Note: An action for legal separation which involves
personalis moritur cum persona. Even if property nothing more than bed-and-board separation of the
rights are involved, because these rights are mere spouses is purely personal. The Civil Code recognizes
effects of the decree of legal separation, being rights this by:
in expectation, these rights do not come into 1. By allowing only the innocent spouse and no
existence as a result of the death of a party. Also one else to claim legal separation;
under the Rules of Court, an action for legal 2. By providing that the spouses can, by their
separation or annulment of marriage is not one reconciliation, stop or abate the proceedings
which survives the death of spouse. (Lapuz v. and even rescind a decree of legal separation
Eufemio, G.R. No. L-31429, Jan. 31, 1972) already granted. (Lapuz v. Eufemio, G.R. No.
L-31429, Jan. 31, 1972)
Q: May the heirs of the deceased spouse continue
the suit (petition for decree of legal separation) if Q: May the wife who has been granted legal
the death of the spouse takes place during the separation petition be allowed to revert to her
pendency of the suit? maiden name?
A: No. An action for legal separation is purely A: No. The marriage bond not having severed, the
personal, therefore, the death of one party to the woman remains to be the lawful wife of the man.
action causes the death of the action itself – action
personalis moritur cum persona. Note: Even under the Civil Code, the use of the
husband's surname during the marriage (Art. 370, Civil
Note: In cases where one of the spouses is dead, or Code), after annulment of the marriage (Art. 371, Civil
where the deceased’s heirs continue the suit, Code) and after the death of the husband (Art. 373, Civil
separation of property and any forfeiture of share Code) is permissive and not obligatory except in case of
already effected subsists, unless spouses agree to revive legal separation (Art. 372, Civil Code). Under the present
former property regime article of our Code, however, the word "may" is used,
indicating that the use of the husband's surname by the
H. EFFECTS OF LEGAL SEPARATION wife is permissive rather than obligatory. We have no
law which provides that the wife shall change her name
to that of the husband upon marriage. This is in
Q: What are the effects of decree of legal
consonance with the principle that surnames indicate
separation? descent. It seems, therefore, that a married woman may
use only her maiden name and surname. She has an
A: option, but not a duty, to use the surname of the
1. Spouses entitled to live separately; husband in any of the ways provided by this Article.
(Yasin v. Hon. Judge Sharia’h District court, G.R. No.
Note: Marriage bond not severed 94986, Feb. 23, 1995)
2. ACP/CPG shall be dissolved and liquidated; Q: Which of the following remedies,

a. declaration of nullity of marriage,
35
b. annulment of marriage,
c. legal separation, and/or e. If the husband beats up his wife every time he
d. separation of property, comes home drunk?
can an aggrieved spouse avail himself/herself of:
A: The wife may file an action for legal separation on
a. If the wife discovers after the marriage that her the ground of repeated physical violence on her
husband has “AIDS”? person (Article 55 (1), FC). She may also file an action
for judicial separation of property for failure of the
A: Since AIDS is a serious and incurable sexually husband to comply with his marital duty of mutual
transmissible disease, the wife may file an action for respect (Article 135 (4), Article 101, FC). She may also
annulment of the marriage on this ground whether file an action for declaration of nullity of the
such fact was concealed or not from the wife, marriage if the husband’s behavior constitutes
provided that the disease was present at the time of psychological incapacity existing at the time of the
the marriage. The marriage is voidable even though celebration of marriage. (2003 Bar Question)
the husband was not aware that he had the disease
at the time of marriage. I. RECONCILIATION
b. If the wife goes (to) abroad to work as a nurse Q: What are the effects of reconciliation?
and refuses to come home after the expiration of
her three-year contract there? A:
1. As to the Decree:
A: If the wife refuses to come home for three (3) a. During the pendency of the case: LS
months from the expiration of her contract, she is proceedings terminated at whatever stage
presumed to have abandoned the husband and he b. After the issuance of the decree: Final
may file an action for judicial separation of property. decree of LS to be set aside
If the refusal continues for more than one year from 2. As to the Property Regime:
the expiration of her contract, the husband may file GR: With respect to separation of properties,
the action for legal separation under Art. 55 (10) of the same shall subsist.
the Family Code on the ground of abandonment of
petitioner by respondent without justifiable cause XPN: The parties, however, can come into
for more than one year. The wife is deemed to have an agreement to revive their previous
abandoned the husband when she leaves the regime. Their agreement must be under
conjugal dwelling without any intention of returning oath and must contain a list of the
(Article 101, FC). The intention not to return cannot properties desired to be returned to the
be presumed during the 30year period of her community or conjugal property and those
contract. which will remain separate, a list of
creditors and their addresses.
c. If the husband discovers after the marriage that
his wife has been a prostitute before they got 3. As to capacity to succeed: The Family Code does
married? not provide for the revival of revoked provisions
in a will originally made in favor of the offending
A: If the husband discovers after the marriage that party as a result of the LS. This absence gives
his wife was a prostitute before they got married, he the innocent spouse the right to choose
has no remedy. No misrepresentation or deceit as to whether the offending spouse will be
character, health, rank, fortune or chastity shall reinstituted.
constitute fraud as legal ground for an action for the 4. As to the forfeited shares: Those given to the
annulment of marriage (Article 46 FC). children cannot be returned since the spouses
are no longer the owners of such. But those
d. If the husband has a serious affair with his given to the innocent spouse may be returned.
secretary and refuses to stop notwithstanding
advice from relatives and friends? Note: In an action for legal separation on the ground of
adultery filed by the husband, even though the
A: The wife may file an action for legal separation. defendant wife did not interpose the defense of
The husband’s sexual infidelity is a ground for legal prescription, nevertheless, the courts can take
separation (Article 55, FC). She may also file an cognizance thereof, because actions seeking a decree of
action for judicial separation of property for failure of legal separation or annulment of marriage, involve
her husband to comply with his marital duty of public interest, and it is the policy of our law that no
such decree be issued if any legal obstacles thereto
fidelity (Article 135 (4), 101, FC).
appear upon the record. Also, the husband was guilty of
36 CIVIL LAW TEAM

commission of the same offense by living with another

woman. The agreement to revive must be under oath and
specify:
This is an exception to the Rules of Court provision that 1. The properties to be contributed anew to
defenses not raised in the pleadings will not be the restored regime;
considered since provisions on marriage are substantive 2. Those to be retained as separated
in nature.(Brown v. Yambao, G.R. No. L-10699, Oct. 18, properties of each spouse; and
1957) 3. The names of all their known creditors,
their addresses and the amounts owing to
Q: Does reconciliation automatically revive the each.
former property regime of the spouses?
Q: How do Declaration of Nullity of Marriage,
A: No. If the spouses want to revive the previous Annulment of Marriage and Legal Separation differ
property regime, they must execute an agreement to from each other?
revive the former property regime, which agreement
shall be submitted in court, together with a verified A:
motion for its approval. (Art. 67, Family Code)
DECLARATION OF NULLITY OF MARRIAGE ANNULMENT LEGAL SEPARATION
Marriage bond
No effect, marriage
Dissolved Dissolved
bond remains valid
Status of children
GR: Illegitimate
XPN: Children conceived or born of marriages before

declaration of nullity under Arts. 36 and 53 considered Legitimate
legitimate
Property relations
ACP/CPG shall be dissolved & liquidated. [Art. 43 (2)]
GR: Governed either by Article 147 or Article 148 of the
Share of spouse, who contracted the subsequent
Family Code. Thus, property regime shall be liquidated
marriage in bad faith, in the net profits of the
pursuant to the ordinary rules on co-ownership.
community property or conjugal partnership, shall be
forfeited in favor of the common children, or
XPN: Marriages declared void under Art. 40 which shall
be liquidated in accordance with Art. 43 (2).(Valdes v.
if there are none, the children of the guilty spouse by
RTC)
a previous marriage, or
in default of children, the innocent spouse

Donations propter nuptias
GR: Shall remain valid. [Art. 43 (3)]
XPN:
1. if donee contracted the marriage in bad faith,
such donations made to said donee shall be
revoked by operation of law.
2. if both spouses to the marriage acted in bad faith,
all donations propter nuptias shall be revoked by
operation of law.
Insurance
If one spouse acted in bad faith, innocent spouse may
revoke his designation as beneficiary in the insurance
policy even if such designation be stipulated as
37
irrevocable. [Art. 43 (4)]

Succession
If one spouse contracted the marriage in bad faith, he
shall be disqualified to inherit from innocent spouse by
testate and intestate succession. [Art. 43 (5)]
IV. RIGHTS AND OBLIGATIONS BETWEEN HUSBAND 2. Answer for civil liability arising from injuries
AND WIFE caused by children below 18;
3. Exercise parental authority over children’s
A. ESSENTIAL OBLIGATIONS property (Republic v. CA, Molina, G.R. No.
108763, Feb. 13, 1997).
Q: What are the rights and obligations of the
spouses? Q: May the performance of essential marital
obligations be compelled by court?
A:
1. Essential marital obligations (EMO): LOR A: GR: Performance of EMO under Art. 68 cannot
a. Live together be compelled by court because it will be a violation
of personal liberty.
Note: Includes consortium and copulation
XPN: Giving support (Arroyo v. Arroyo, G.R. No.
b. Observe mutual love, respect, fidelity L-17014, Aug. 11, 1921)
c. Render mutual help and support
2. Fix the family domicile (Art. 69, FC) Q: When may the Court exempt one spouse from
living with the other?
Note: In case of disagreement the Court shall
decide. A:
1. If one spouse should live abroad.
3. Jointly support the family (Art. 70, FC) 2. Other valid and compelling reasons.
a. Expenses shall be paid from the
community property Note: The Court shall not grant the exemption if it
b. In the absence thereof from the income is not compatible with the solidarity of the family.
or fruits of their separate properties
c. In the absence or insufficiency thereof Q: What law shall govern the property relations of
from their separate properties spouses?
4. Manage the household (Art. 71, FC)
5. Not to neglect duties, or commit acts which A: GR: Philippine laws shall govern, regardless of
tend to bring danger, dishonor, or injury to place of celebration and residence of spouses, in
family (Art. 72, FC) the absence of contrary stipulation in a marriage
6. Either spouse may practice any legitimate settlement. (Art. 80, FC)
profession/business, even without the consent
of the other. (Art. 73, FC) XPN: Lex rei sitae applies:
1. Where both spouses are aliens;
Note: Other spouse may object on valid, serious 2. With respect to the extrinsic validity of
and moral grounds. contracts:
a. affecting property not situated in the
In case of disagreement, the court shall decide Philippines; and
whether: b. executed in the country where the
a. Objection is proper; and property is located;
b. Benefit has accrued to the family before 3. With respect to extrinsic validity of
and after the objection. contracts:
a. entered into in the Philippines; but
Q: What are the other obligations of spouses? b. affecting property situated in a
foreign country whose laws require
A: different formalities for its extrinsic
1. Exercise the duties and enjoy the rights of validity
parents;
38 CIVIL LAW TEAM

Q: What governs the property relations of Note: The provisions in the marriage settlement must
spouses? be in accordance with law, morals or public policy,
otherwise such agreement is void (Paras, Civil Code,
A: The property relations shall be governed by the book I, pp. 516)
ff. in the stated order:
1. Marriage settlement Q: What are the additional requirements for the
2. Provisions of the Family Code validity of the MS?
3. Local custom
A:
Q: Marriage being a contract, may the parties ADDITIONAL
FACTUAL SITUATION
enter into stipulations which will govern their REQUIREMENT
marriage? The ff. must be made a
If one of both of the party to the MS,
A: Yes, only as to their property relations during the parties are: otherwise the MS is
marriage subject only to the condition that void:
whatever settlement they may have must be within Parents; or
the limits provided by the Family Code. However, 18-21 years old those required to give
the nature, consequences, and effects of marriage consent
cannot be subject to stipulation. (Rabuya, Persons, Sentenced with civil Guardian appointed by
p. 398) interdiction the court
Guardian appointed by
Note: Future spouses may agree upon the regime of Disabled
absolute community of property, conjugal partnership the court
of gains, absolute separation of property or any other
regime. Q: May a marriage settlement be modified?
Q: Are rights over share in the community or A: Yes. For any modification in the MS to be valid:
conjugal property waivable during the marriage? 1. The requisites for a valid MS must be
present;
A: GR: No. 2. There must be judicial approval;
3. Subject to the provisions of Arts. 66, 67,
XPN: In case of judicial separation of property. 128, 135, and 136.
Note: The waiver must be in a public instrument and Q: What is the effect on the ante nuptial
recorded in the office of the local civil registrar where agreement in case the marriage is not celebrated?
the marriage contract was recorded as well as in the
proper registry of property. A: GR: Everything stipulated in the settlements or
contracts in consideration of the marriage shall be
A. MARRIAGE SETTLEMENTS rendered void.
Q: What is a marriage settlement (MS)? XPN: Those not dependent upon or is not made
in consideration of the marriage subsists.
A: It is a contract entered into by spouses about to B. DONATIONS BY REASON OF MARRIAGE
be married for the purpose of fixing the terms and
conditions of their property relations with regard to Q: When are donations considered as donations by
their present and future property. reason of marriage?
It is also referred to as Ante Nuptial Agreement or A: Those donations which are made before the
Matrimonial Contract.(Pineda, 2008 edition) celebration of the marriage, in consideration of the
same, and in favor of one or both of the future
Q: What are the requisites of a valid MS? spouses.
A: I-SER Q: What are the requisites for donations propter

1. In writing; nuptias (DPN)?
2. Signed by the parties;
3. Executed before the celebration of A:
marriage; 1. Made before celebration of marriage;
rd 2. Made in consideration of the marriage;
4. Registration (to bind 3 persons).
39
3. Made in favor of one or both of the future XPN: Moderate gifts on the occasion of any
spouses. family rejoicing.
Q: What are the requisites if donation be made by Note: The aforementioned rules also apply to common
one spouse in favor of the other? law spouses.
A: Q: Why are donations between spouses during

1. There must be marriage settlement (MS) marriage considered void?
stipulating a property regime other than ACP;
2. Donation in the MS be not more that 1/5 of A:
the present property; 1. To protect unsecured creditors from being
3. There must be acceptance by the other defrauded;
spouse. 2. To prevent the stronger spouse from imposing
upon the weaker spouse transfer of the latter’s
Q: What is the effect of donations of property property to the former;
which is subject to encumbrances? 3. To prevent indirect modification of the
marriage settlement.
A: Such donations are valid. In case of foreclosure
of the encumbrance and the property is sold for Q: What if the parties agree upon a regime other
more less than the total amount of the obligation than absolute community of property?
secured, the done shall not be liable for the
deficiency. If the property is sold for more than the A: They cannot donate to each other in their
total amount of the obligation, the done shall be marriage settlements more than 1/5 of their
entitled to the excess. (Art 85. FC) present property. Any excess is considered void.
C. VOID DONATIONS BY THE SPOUSES Note: Donations of future property are governed by
provisions on testamentary succession and formalities
Q: What is the rule regarding donations made of wills.
between spouses?
Q: What are the donations that may be revoked by
A: the donor?
1. Before the marriage:
A: A donation by reason of marriage may be
GR: Future spouses cannot donate to each revoked by the donor in the following cases:
other more than 1/5 of their present property 1. Marriage is not celebrated or judicially declared
(Excess shall be considered void) void ab initio
XPN: If they are governed by ACP, then each XPN: donations made in the marriage
spouse can donate to each other in their settlements
marriage settlements present property
without limit, provided there is sufficient 2. Marriage takes place without the required
property left for their support and the consent of parents or guardians
legitimes are not impaired. 3. Marriage is annulled and done acted in bad
faith
2. During the marriage: 4. Upon legal separation, the done being the
guilty spouse
GR: Every donation or grant of gratuitous 5. If with a resolutory condition which was
advantage, direct or indirect, between spouses complied with
are considered void. 6. Donee has committed an act of ingratitud
Q: What are the grounds for filing an action for revocation of a DPN and what their respective prescriptive
periods?
A:
PRESCRIPTIVE PERIOD
G R O U N D S (Art. 86)
Period Reckoning Point
40 CIVIL LAW TEAM

Time the marriage was not

1. Marriage is not celebrated
5 yrs solemnized on the fixed date. (art.
XPN: Those automatically rendered void by law
1149)
Ground for nullity:
a. Contracted subsequent marriage
Revoked by operation of law
before prior marriage has been
2. Marriage is judicially
judicially declared void
declared void
Finality of judicial declaration of
b. any other grounds 5 yrs nullity (if action is to recover
property)
Time the donor came to know that
3. Marriage took place without consent of parents or guardian, when
5 yrs the required parental consent was not
required by law
obtained.
4. Marriage is annulled and donee acted in bad faith 5 yrs Finality of decree
5. Upon legal separation (LS), donee being the guilty spouse 5 yrs Time decree of LS has become final
Happening of the resolutory
6. Donation subject to resolutory condition which was complied with 5 yrs
condition.
From donor’s knowledge of the
7. Donee committed an act of ingratitude 1 yr
commission of an act of ingratitude.
Note: Acts of ingratitude:

1. Commission of an offense against the person, honor or property of the donor, his wife or his children under his
parental authority
2. GR: Imputation to the donor any criminal offense or any act involving moral turpitude
XPN: if the crime was committed against the donee himself, his wife or his children under his authority
3. Undue refusal to support the donor when he is legally or morally bound to give such support.
Q: What are the different property regimes which may be adopted by future spouses?
A:
1. Absolute Community of Property (ACP)
2. Conjugal Partnership of Gains (CPG)
3. Absolute Separation of Property (ASOP)
4. Any other regime within limits provided by the Family Code
41
Q: Distinguish ACP, CPG and ASOP.
A:
ACP CPG ASOP
When it applies
1. When future spouses adopt it

in a marriage settlement
2. ACP or CPG is dissolved
When spouses: 3. Prior marriage is dissolved due
1. Adopt it in a marriage to death of one spouse and
settlement; surviving spouse failed to
When the future spouses adopt it in
2. Do not choose any economic comply with the requirements
a marriage settlement.
system; or under Art 103 (judicial
3. Adopted a different property settlement proceeding of the
regime and the same is void. estate of deceased spouse)
4. By judicial order. Judicial
separation of property may
either be voluntary or for
sufficient cause.
Consist of
Each spouse retains his/her property
All the properties owned by the before the marriage and only the
spouses at the time of marriage fruits and income of such properties
become community property become part of the conjugal
properties during the marriage
Effect of separation in fact
The separation in fact shall not affect the regime of ACP. But:
1. The spouse who leaves the conjugal home or refuses to live therein,
without just cause, shall not have the right to be supported;
2. When consent of one spouse to any transaction of the other is
required by law, judicial authorization shall be obtained in a
summary proceeding.
3. In case of insufficiency of community or conjugal partnership
property, separate property of both spouses shall be solidarily liable
for the support of the family. Spouse present shall, upon proper
petition in a summary proceeding, be given judicial authority to
administer or encumber any specific separate property of the other
spouse and use the fruits or proceeds thereof to satisfy the latter’s
share.
(Arts. 100 & 127, FC)
Effect of dissolution
Upon dissolution and liquidation Upon dissolution of the partnership,
of the community property, what the separate property of the
is divided equally between the spouses are returned and only the
spouses or their heirs is the net net profits of the partnership are
remainder of the properties of the divided equally between the
ACP. spouses of their heirs.
42 CIVIL LAW TEAM

Q: When do the property regimes commence? TRANSFER OF ADMINISTRATION OF EXCLUSIVE

PROPERTY
A: Property regimes commence at the precise
moment of the celebration of the marriage. Q: What are the grounds for transfer of
administration of the exclusive property of each
Q: In the absence of a marriage settlement, what spouse?
property regime governs the property relations of
spouses? A: When one spouse: CFAG
1. is sentenced to penalty with Civil
A: GR: Absolute community of property. (Art. 75, interdiction;
FC) 2. becomes a Fugitive from justice or is
hiding as an accused in a criminal case;
XPNs: 3. is judicially declared Absent;
1. For marriages contracted prior to the 4. becomes a Guardian of the other.
effectivity of the Family Code on August
3, 1988, conjugal partnership of gains Note: Transfer of administration of the exclusive
shall govern the property relations. This is property of either spouses does not confer ownership
so because Article 119 of the New Civil over the same. (Rodriguez v. De la Cruz, GR No. 3629,
Code will apply. The provisions of the Sept. 28, 1907)
Family Code shall have no retroactive
effect because it shall impair vested D. ABSOLUTE COMMUNITYY
rights.
1. GENERAL PROVISIONS
2. Subsequent marriage contracted within
one year from the death of the deceased Q: When shall the absolute community of property
spouse without liquidation of the commence?
community property or conjugal
partnership of gains, either judicially or A: At the precise moment of the celebration of the
extrajudicially, as required under Arts. marriage. i.e. actual time the marriage is celebrated
103 and 130 of the Family Code. In such on a certain date.
case, a mandatory regime of complete
separation of property shall govern the Note: Any stipulation, express or implied, for the
subsequent marriage. (Rabuya, Civil Law commencement of the community regime at any other
time shall be void.
Reviewer, p. 100).
Q: What law governs the absolute community of
REVIVAL OF FORMER PROPERTY REGIME
property?
Q: What are the grounds for the revival of a
A:
former property regime?
1. Family code
2. Provisions on co-ownership
A: 1-CAR-APS
1. Civil interdiction of the prisoner-spouse
WHAT CONSTITUTES COMMUNITY PROPERTY
terminates;
2. Absentee spouse reappears
Q: What constitutes the community property?
3. Court authorizes Resumption of
administration by the spouse formerly
A:
exercising such power;
Includes:
4. Spouse who has Abandoned the conjugal
1. All the property owned by the spouses:
home returns and resumes common life
a. at the time of the celebration of the
with the other;
marriage; or
5. Parental authority is judicially restored to
b. acquired thereafter;
the spouse previously deprived thereof;
2. Property acquired during the marriage by
6. Reconciliation and resumption of
gratuitous title, if expressly made to form
common life of spouse who had been
part of the community property by the
separated in fact for at least 1 year;
donor, testator or grantor;
7. Spouses agree to revive their former
3. Jewelries, etc.;
property regime.
4. Winnings in gambling.
43
Excludes: Q: In a sale of a piece of land that she and her

1. Property acquired during the marriage by husband, David, owned, Lorenza, who witnessed
gratuitous title and its fruits as well as the sale, signed on the page reserved for witnesses
income thereof; to the deed. When the buyer sought to register
the sale, it was denied by the Register of Deeds for
XPN: If expressly provided by the donor, lack of the wife's consent to the sale. Decide.
testator or grantor that they shall form
part of the community property A: The register of deeds is incorrect. A wife, by
affixing her signature to a deed of sale on the space
2. Property for personal and exclusive use of provided for witnesses, is deemed to have given her
either spouse; implied consent to the contract of sale. The consent
need not always be explicit or set forth in any
XPN: Jewelries shall form part of the ACP particular document so long as it is shown by acts of
because of their monetary value. the wife that such consent or approval was in fact
3. Property acquired before the marriage by given (Pelayo v. Perez, G.R. No. 141323, Jun. 8,
one with legitimate descendants by 2005).
former marriage and its fruits and
income, if any; Note: In this case, it will be noted that the sale was
entered into prior to the effectivity of the FC. Because
4. Those excluded by the marriage of such, Art. 173, in relation to Art. 166 of the Civil
settlement. Code, would have applied if there was a finding of lack
of the wife's consent. Under said provisions, the sale
Q: In absence of evidence, does property acquired would have been merely voidable, and not void.
during the marriage belong to the community
property? Q: Andres sold a parcel of land belonging to the
conjugal partnership to Pepito. Days before the
A: Property acquired during the marriage is sale, Kumander, his wife, assented to such by
presumed to belong to the community, unless signing a document entitled "Marital Consent"
proven otherwise by strong and convincing contained in a jurat, which was then sworn to
evidence. (Art .93) before the same notary public who notarized the
deed of sale, and then appended to the deed of
Q: Mister, without Misis’ consent, executed a sale itself. Is the conveyance valid?
special power of attorney in favor of Drepa in
order to secure a loan to be secured by a conjugal A: It depends. The use of the jurat, instead of an
property, which loan was later obtained. When acknowledgment, does not elevate the marital
the loan was not paid, the mortgage was consent into the level of a public document but
foreclosed and sold on auction. Misis seeks the instead consigns it to the status of a private writing.
declaration of the mortgage and sale as void Hence, the presumption of regularity does not
invoking Art. 124 of the FC. Will the wife’s action apply and the wife still needs to prove its
prosper? genuineness and authenticity as required under the
rules of evidence. (Pan Pacific Industrial Sales Co., Inc.
A: Yes. The settled rule is that the sale or v. CA, G.R. No. 125283, Feb. 10, 2006
encumbrance of a conjugal property requires the
Note: The fact that the document contains a jurat, and
consent of both the husband and the wife (Guiang
not an acknowledgment, should not affect its
v. CA, 353 Phil. 578). The absence of the consent of
genuineness or that of the related document of
one renders the entire sale or encumbrance null conveyance itself, the Deed of Absolute Sale. In this
and void, including the portion of the conjugal instance, a jurat suffices as the document only
property pertaining to the husband who contracted embodies the manifestation of the spouse's consent, a
the sale. Neither would the conjugal partnership be mere appendage to the main document. (Pan Pacific
liable for the loan on the ground that it redounded Industrial Sales Co., Inc. v. CA, G.R. No. 125283, Feb.
to the benefit of the family. The sweeping 10, 2006)
conclusion that the loan was obtained by the
husband in order to finance the construction of Q: Will losses in gambling be charged upon the
housing units, without however adducing adequate community property?
proof, does not persuade. (Homeowners Savings
&Loan Bank v. Dailo, G.R. No. 153802, Mar. 11, A: No (Art. 95). However, any winnings therefrom
2005) shall form part of the community property.
44 CIVIL LAW TEAM

3. CHARGES UPON AND OBLIGATIONS OF THE

COMMUNITY PROPERTY Q: An individual, while single, purchases a house
and lot in 1990 and borrows money in 1992to
Q: What are the charges upon the ACP? repair it. In 1995, such individual is married while
the debt is still being paid. After the marriage, is
A: the debt still the responsibility of such individual?
1. The support of
a. the spouses A: No. Ante-nuptial debts of either spouse shall be
b. their common children considered as the liability of the absolute
c. legitimate children of either spouse; community of property insofar as they have
2. All debts and obligations contracted during the redounded to the benefit of the family. (2007 Bar
marriage by: Question)
a. the designated administrator-spouse for
the benefit of the community 4. OWNERSHIP, ADMINISTRATION, ENJOYMENT
b. by both spouses AND DISPOSITION OF THE COMMUNITY PROPERTY
c. by one spouse with the consent of the
other; Q: To whom does the right of administration of
3. Debts and obligations contracted by either the community property belong to?
spouse without the consent of the other to the
extent that the family may have been A: GR: It belongs to both spouses jointly.
benefited;
4. All taxes, liens, charges and expenses, XPN: If one spouse is incapacitated or otherwise
including major or minor repairs, upon the unable to participate in the administration of
community property; the common properties – capacitated or able
5. All taxes and expenses for mere preservation spouse may assume sole powers of
made during marriage upon the separate administration
property of either spouse used by the family;
6. Expenses to enable either spouse to But such powers do not include: DAE
commence or complete a professional or 1. Disposition;
vocational course, or other activity for self- 2. Alienation; or
improvement; 3. Encumbrance
7. Ante-nuptial debts of either spouse insofar as of the conjugal or community property.
they have redounded to the benefit of the
family; Q: In case of disagreement, whose decision shall
8. The value of what is donated or promised by prevail?
both spouses in favor of their common
legitimate children for the exclusive purpose of A: That of the husband but subject to recourse to
commencing or completing a professional or the court by the wife for proper remedy.
vocational course or other activity for self-
improvement; Note: Prescriptive period for recourse is within 5 years
9. Payment, in case of absence or insufficiency of from the date of the contract implementing such
the exclusive property of the debtor-spouse, decision.
of:
a. Ante-nuptial debts of either spouse which Q: In cases of alienation, disposition or
did not redound to the benefit of the encumbrance of the community property, and one
family; spouse is incapacitated or unable to participate in
b. the support of illegitimate children of the administration of the community property, is
either spouse; the approval of one spouse enough for said
c. liabilities incurred by either spouse by alienation, disposition or encumbrance to be
reason of a crime or quasi-delict; valid?
Note: The payment of which shall be considered A: No. Both spouses must approve any dispositions
as advances to be deducted from the share of the or encumbrances, and consent of the other spouse
debtor-spouse upon liquidation of the community regarding the disposition must be in writing,
otherwise, the matter should be brought to court
10. Expenses of litigation between the spouses. and the court will give the authority, if proper.
XPN: Suit is found to be groundless, it cannot Such consent or court approval must be obtained
be charged against the ACP. before the alienation, etc., otherwise, such will be
45
void and obtaining such consent or court approval b. When consent of one spouse to any
afterwards will not validate the act. A void act transaction of the other is required by
cannot be ratified. law, judicial authorization must be
obtained
Q: What if one spouse acts without the consent of c. If community property is insufficient,
the other or without court approval? the separate property of both spouses
shall be solidarily liable for the support
A: If one spouse acts without the consent of the of the family
other or without court approval, such disposition or
encumbrance is void. Q: If a spouse abandons without just cause his
family or fails to comply with obligations to the
However, the transaction shall be construed as a family, what are the remedies of the spouse
continuing offer on the part of the consenting present?
rd
spouse and the 3 person which may be perfected
as a binding contract upon acceptance by the A: Petition the court for:
spouse or court approval. 1. Receivership;
2. Judicial separation of property;
Q: When may one spouse resort to obtaining court 3. Authority to be the sole administrator of
approval for any alienation, encumbrance or the absolute community.
disposition of community property?
Q: When is there abandonment?
A: In absence of the written consent of the other
spouse. A: When a spouse leaves the conjugal dwelling
without intention of returning.
Q: What if the community property is insufficient
to cover the foregoing liabilities? Note: Three months disappearance without any
information as to the spouse’s whereabouts shall be
A: GR: The spouses shall be solidarily liable for the prima facie presumption of abandonment of the other
unpaid balance with their separate properties. spouse. (Art. 101, FC)
XPN: Those falling under paragraph 9 of Art. 94. Q: May spouses sell property to each other?
(Ante-nuptial debts, support of illegitimate
children, liabilities incurred by spouse by reason A: GR: No, such sale is considered void
of a crime or quasi-delict) –in which case the
exclusive property of the spouse who incurred XPNs:
such debts will be liable. However, if the 1. When a separation of property was
exclusive property is insufficient, payment will agreed upon in the marriage settlement;
be considered as advances to be deducted from 2. When there has been a judicial separation
share of debtor-spouse. (Art. 94 (9) of the of property under Articles 135 and 136 of
Family Code) FC (Art. 1490, NCC).
Q: What is the rule on donating a community Note: The proscription against the sale of property
property by a spouse? between spouses under Art. 1490 applies even to
common law relationships. In an earlier ruling, the SC
nullified a sale made by a husband in favor of a
A: GR: A spouse cannot donate any community
concubine, after he had abandoned his family and left
property without the consent of the other.
the conjugal home where his wife and children lived,
and from whence they derived their support, for being
XPN: Moderate donations for charity or on contrary to morals and public policy. The sale was
occasion of family rejoicing or distress. (Art. 98) regarded by the court as subversive of the stability of
the family, a basic social institution which public policy
Q: Will the separation in fact between husband cherishes and protects (Ching v. CA, GR No. 165879,
and wife affect the regime of absolute Nov. 10, 2006).
community?
GR: No. 5. DISSOLUTION OF COMMUNITY REGIME
XPNs:
a. Spouse who leaves the conjugal home Q: How is the ACP terminated?
or refuses to live therein without just
cause has no right to be supported A:
46 CIVIL LAW TEAM

1. Death of either spouse;

2. Legal separation; E. CONJUGAL PARTNERSHIP OF GAINS.
3. Annulment;
4. Judicial separation of property during 1. GENERAL PROVISIONS
marriage. (Art. 99, FC)
Q: What is the regime of CPG?
6. LIQUIDATION OF THE ABSOLUTE COMMUNITY
ASSETS AND LIABILITIES A: It is the property relation formed by the husband
and the wife by placing in a common fund:
Q: What is the applicable procedure in case of 1. the proceeds, product, fruits and income
dissolution of ACP? of their separate properties;
2. those acquired by either or both of them
A: through:
1. Inventory of all properties of the ACP, a. effort
excluding separate property of each spouse; b. chance
2. Payment of community debts; Q: When shall the conjugal partnership

commence?
Note: First, pay out of the community assets. If
not enough, husband and the wife are solidarily A: At the precise moment when the marriage
liable for the unpaid balance with their separate ceremony is celebrated.
properties
Q: What law governs the conjugal partnership?
3. Delivery to each spouse of his/her remaining
exclusive properties; A: The rules on the contract of partnership in all
that is not in conflict with what is expressly
4. Equal division of net community assets determined in the Family Code and by the spouses
Unless there is: in their marriage settlements (Art. 108, FC).
a. An agreement for a different proportion;
or 2. EXCLUSIVE PROPERTY OF EACH SPOUSE
b. A voluntary waiver of such share;
Q: What are the exclusive properties of the
5. Delivery of the presumptive legitimes of the spouses?
children;
A:
6. Adjudication of conjugal dwelling and custody 1. Those brought into the marriage as his/her
of common children. (Art. 102, FC) own;
Q: What is the applicable procedure in the Note: A property purchased before the marriage
dissolution of the ACP in case the marriage is and fully paid during the marriage remains to be
a separate property of either spouse. (Lorenzo v.
terminated by death?
Nicolas, L-4085, July 30, 1952)
A: Community property shall be liquidated in the
2. Those acquired during the marriage by
same proceeding for the settlement of the estate of
gratuitous title;
the deceased.
3. Those acquired by right of redemption, barter
or exchange with exclusive property;
If no judicial proceeding is instituted, the surviving
4. That purchased with exclusive money of either
spouse shall, judicially or extra-judicially, liquidate
spouse.
the community property within 1 year from the
death of the deceased spouse. (Art. 103) Note: The controlling factor is the source of the
money used, or the money promised to be paid.
Q: What if the surviving spouse failed to liquidate (Rivera v. Bartolome, C.A., 40 O.G. 2090)
the community property within 1 year from the
death of the deceased spouse contrary to Art. 103, Q: What are the rules in cases of improvement of
FC? exclusive property?
A: Failure to do so would render any disposition or A:

encumbrance involving community property of the
terminated marriage void.
47
1. Reverse accession – If the cost of the

improvement and the additional value is more Note: In either case, any amount advanced by the
than the value of the principal property at the partnership or by either or both spouses shall be
time of the improvement, the entire property reimbursed by the owner/s upon liquidation of the
becomes conjugal. partnership.
2. Accession – If the cost of the improvement and Q: Yamane asserts that the parcel of land, which
the additional value is equal to or less than the was purchased at auction, belonged to the
value of the principal property, the entire conjugal partnership of him and his late wife. In
property becomes the exclusive property of the title, his name appeared to be merely
the spouses descriptive of the civil status of the registered
owner, his late wife. The purchase took place prior
Note: In either case, there shall be to the advent of the Family Code. Is the property
reimbursement upon the liquidation of the conjugal or paraphernal property of his late wife?
conjugal partnership and ownership of entire
property shall be vested only upon A: Conjugal. In this case the provisions of the Civil
reimbursement. Code would apply since the purchase took place
before the FC took effect. Under Art. 160 of the
Q: What is the presumption with regard to NCC, all property of the marriage is presumed to
property acquired during marriage? belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband
A: GR: All property acquired during the marriage, or the wife. In this case, there was no proof that the
whether the acquisition appears to have been property had been acquired exclusively by
made, contracted or registered in the name of one Yamane's late wife. The mere registration of a
or both spouses, is presumed to be conjugal. property in the name of one spouse does not
destroy its conjugal nature in the absence of strong,
XPN: Unless the contrary is proved. clear and convincing evidence that it was acquired
using the exclusive funds of said spouse. (Spouses
3. CONJUGAL PARTNERSHIP PROPERTY Go v. Yamane, G.R. No. 160762, May 3, 2006)
Q: What constitutes CPG? Q: Dolores seeks to recover a parcel of land,

alleging that she and her husband acquired such
A: during their marriage, that it formed part of their
1. Those acquired by onerous title during the conjugal properties and that he sold it without her
marriage with conjugal funds; consent. She presents as evidence their marriage
2. Those obtained from labor, industry, work or contract and the initial tax declaration over the
profession of either or both spouses; property. Decide.
3. Fruits of conjugal property due or received
during the marriage and net fruits of separate A: Recovery is not warranted. The rule is all
property; property of the marriage is presumed to be
4. Share of either spouse in hidden treasure; conjugal in nature. However, for this presumption to
5. Those acquired through occupation such as apply, the party who invokes it must first prove that
hunting or fishing; it was acquired during the marriage. Here, Dolores's
6. Livestock in excess of what was brought to the evidence consisted of her marriage contract and
marriage; the initial tax declaration over the property. She did
7. Those acquired by chance such as winnings in not identify when she and her husband first
gamblings and bettings. (Art. 117, FC) occupied and possessed the land. Neither did she
present any witness to prove that they first
Q: What are the rules if a property is bought on occupied the property during their marriage and
installments paid partly from the exclusive funds that they both, worked on the land. (Pintiano-Anno
of the spouses and partly from conjugal funds? v. Anno, G.R. No. 163743, Jan. 27, 2006)
A: Q: H & W got married on October 1926. H

1. If full ownership was vested before the subsequently cohabited with X. During the
marriage – it shall belong to the buyer spouse. cohabitation of H with X, H acquired certain
2. If full ownership was vested during the properties and places his status as single. What is
marriage – it shall belong to the conjugal the nature of said properties?
partnership.
48 CIVIL LAW TEAM

A: They are conjugal properties. Whether a

property is conjugal or not is determined by law A: No. The payment of personal debts contracted
and not by the will of one of the spouses. No by the husband or the wife before or during the
unilateral declaration by one spouse can change the marriage shall not be charged to the conjugal
character of conjugal property. The clear intent of H partnership except as they redounded to the
in placing his status as single is to exclude W from benefit of the family. (Art. 122, FC)
her lawful share in the conjugal property. The law
does not allow this. The cohabitation of a spouse 5. ADMINISTRATION OF THE CPG
with another person, even for a long period, does
not sever the tie of a subsisting previous marriage. Q: To whom does the right to administer the
H and X’s cohabitation cannot work to the conjugal partnership belong?
detriment of W as the legal spouse. The marriage of
H and W continued to exist regardless of the fact A: GR: It belongs to both spouses jointly.
that H was already living with X. Hence, all property
acquired from the date of their marriage until the XPN: If one spouse is incapacitated or
death of W are presumed conjugal. It was neither otherwise unable to participate in the
claimed nor proved that any of the subject administration of the common properties –
properties was acquired outside or beyond this capacitated or able spouse may assume sole
period.(Villanueva v. CA, G.R. No. 143286, April 14, powers of administration
2004)
But such powers do not include: DAE
4. CHARGES UPON AND OBLIGATIONS OF THE CPG a. Disposition;
b. Alienation; or
Q: What are the charges upon the CPG? c. Encumbrance of the conjugal or community
property.
A: D2-T2-E2-VAS
1. Support of the spouses, their common Q: In case of disagreement, whose decision shall
children and the legitimate children of prevail?
either spouse;
2. Debts and obligations contracted by one A: That of the husband but subject to recourse to
without the consent of the other to the the court by the wife for proper remedy.
extent that the family benefited;
3. Debts and obligations contracted during Note: Prescriptive period for recourse is 5 years from
the marriage by an administrator-spouse, the date of the contract implementing such decision.
both spouses or one with the consent of
the other; 6. DISSOLUTION OF CPG REGIME
4. Taxes, liens, charges, expenses upon
conjugal property; Q: How is the conjugal partnership terminated?
5. Taxes and expenses for mere preservation
of separate property; A:
6. Expenses for professional, vocational or 1. Death of either spouse;
self-improvement courses of either 2. Legal separation;
spouse; 3. Annulment;
7. Ante-nuptial debts to the extent the 4. Judicial separation of property during
family has been benefited; marriage. (Art. 126, FC)
8. Value of what is donated or promised to
common legitimate children for 7. LIQUIDATION OF THE CONJUGAL PARTNERSHIP
professional, vocation or self- ASSETS AND LIABILITIES
improvement courses;
Q: What are the steps in the liquidation of the
9. Expenses of litigation. (Art. 121, FC)
CPG?
Note: If the conjugal partnership is insufficient to
A: R2-D4-IPA
cover the foregoing liabilities, spouses shall be
solidarily liable for the unpaid balance with their
1. Inventory of all the properties;
separate properties. 2. Restitution of advances made to each of
the spouses;
Q: Levy was made on the conjugal partnership of 3. Reimbursement for use of exclusive
husband and wife on the basis of liability of the funds;
husband as guarantor. Is the levy proper? 4. Debts and obligations of the CP are paid;
49
5. Delivery of exclusive properties; the property relations of the subsequent

6. Payment of losses and deterioration of marriage
movables belonging to each of the
spouses; F. SEPARATION OF PROPERTY OF THE SPOUSES
7. Division of the net conjugal partnership; AND ADMINISTRATION OF COMMON PROPERTY
8. Delivery of the children’s presumptive BY ONE SPOUSE DURING THE MARRIAGE
legitimes;
9. Adjudication of conjugal dwelling and Q: When shall the system of complete separation
custody of children. (Art. 129, FC) of property govern the property relations between
the spouses?
Q: Upon termination of the marriage by death,
how shall the community property be liquidated? A: Only in the following cases:
1. When it is expressly provided for in the
A: The community property shall be liquidated in marriage settlement
the same proceeding for the settlement of the 2. When it is so decreed by a competent
estate of the deceased spouse. court
3. Mandatory regime of complete
Q: From where shall the support to be given to the separation of property
surviving spouse and to the children be charged
against during the liquidation? Q: In what ways can there be judicial separation of
property?
A: The support shall come from the common mass
of property and shall be particularly charged against A: Judicial separation of property may either be:
the fruits, rents or income pertaining to their shares a. voluntary
to the inventories property. But where the support b. for sufficient cause
given exceeds the fruits, rents or income pertaining
to their shares, the excess shall be deducted from Q: What are the sufficient causes for judicial
their respective shares as these are deemed separation of property?
advances from the inventoried property. (Art. 133,
FC) A: CJ-LASA
1. Civil interdiction of the spouse of
Q: In the absence of a judicial settlement petitioner;
proceeding, how shall the community property be 2. Judicial declaration of absence;
liquidated? 3. Loss of parental authority as decreed by
the court;
A: The surviving spouse shall liquidate the 4. Abandonment or failure to comply with
community property either, judicially or family obligation;
extrajudicially within one year from the death of 5. Administrator spouse has abused
the deceased spouse. authority;
6. Separation in fact for one year and
Q: What if the conjugal partnership assets are less reconciliation is highly improbable. (Art.
than the conjugal partnership liabilities at the time 135, FC)
of liquidation of the CP?
Note: In cases provided in 1, 2 and 3, the
A: The surviving spouse and the children shall not presentation of the final judgment against the
be entitled to support. guilty or absent spouse shall be enough basis
for the grant of the decree of judicial
Q: What are the effects if the community property separation of property.
is not liquidated?
Q: What are the effects of judicial separation of
A: property between spouses?
1. Any disposition or encumbrance made by the
surviving spouse involving community A:
property of the terminated marriage shall be 1. The absolute community or conjugal
void. partnership is dissolved;
2. Should the surviving spouse contract a 2. The liability of the spouses to creditors shall be
subsequent marriage a mandatory regime of solidary with their separate properties;
complete separation of property shall govern
50 CIVIL LAW TEAM

3. Mutual obligation to support each other a. Total

continues; b. Partial – In this case, the property not
agreed upon as separate shall pertain to
XPN: When there is legal separation the absolute community.
2. As to kinds of property:
4. Rights previously acquired by creditors are not a. Present property
prejudiced. b. Future property
c. Both present and future property
Q; How and in what instances can the property
regime that existed between the spouses before Q: What are the rights of the spouses under the
the separation of property be revived? regime of separation of property?
A: Spouses may, in the same proceedings where A:

separation of property was decreed, file a motion 1. Each spouse shall own, dispose of, administer,
existed between them before the separation of possess, and enjoy his or her own separate
property in any of the following instances: property, without need of the consent of the
a. When the civil interdiction terminates other.
b. When absentee spouse reappears 2. Each spouse shall own all earnings from his or
c. When the court, being satisfied her profession, business or industry and all
fruits, natural, industrial or civil, due or
G. REGIME OF SEPARATION OF PROPERTY received during the marriage from his or her
separate property.
Q: What governs the regime of separation of
property? Q: What are the liabilities for family expenses of
the spouses under the regime of separation of
A: property?
1. Marriage settlement
2. Family Code in suppletory character. (Art. 149, A: GR: Both spouses shall bear the family expenses
FC) in proportion to their income.
Q: What are the kinds of separation of property? XPN: In case of insufficiency or default thereof,
to the current market value of their separate
A: properties.
1. As to extent:
H. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE
Q: What is the property regime of unions without marriage?
A:
ART. 147 ART. 148
Applicability
Presence of legal impediment:
1. No legal impediment to marry; 1. Adulterous relationships
2. Void marriage on the ground of psychological 2. Bigamous/polygamous marriages
incapacity. 3. Incestuous void marriages under Art 37
4. Void marriages by reason of public policy (Art. 38)
Salaries & wages
Separately owned by the parties. If any is married, his/her
Owned in equal shares
salary pertains to the CPG of the legitimate marriage.
Property exclusively acquired
Belongs to party
Belongs to such party
upon proof of acquisition through exclusive funds
Property acquired by both through their work or industry
Owned in common in proportion to their respective
Governed by rules of co-ownership
contributions
51
Presumption
Property acquired while living together presumed
No presumption of joint acquisition.
obtained by their joint efforts, work or industry and
owned by them in equal shares.
Actual joint contribution of money, property or industry
shall be owned by them in common proportion.
If one party did not participate in acquisition:
presumed to have contributed through care and
However, their contributions are presumed equal, in the
maintenance of family and household (Buenaventura
absence if proof to the contrary
v. Buenaventura, G.R. No. 127358, Mar. 31, 2005)
Forfeiture
When only one is in GF, share of party in BF in the co- If one of the parties is validly married to another, his/her
ownership be forfeited in favor of: share in the co-ownership shall accrue to the ACP or CPG
1. their common children existing in the marriage.
2. innocent party
in default of / waiver by any/all common children, or If the party who acted in BF is not validly married to
by another or if both parties are in BF, such share be
their descendants forfeited in manner provided in last par of Art. 147
Proof of actual contribution
Not necessary Necessary
Note: For as long as it is proven that property was acquired during marriage, the presumption of conjugality will attach
regardless in whose name the property is registered.
The presumption is not rebutted by the mere fact that the certificate of title of the property or the tax declaration is in
the name of one of the spouses. (Villanueva v. CA, G.R. No. 143286, Apr. 14, 2004)
Q: What property relation governs in case Is her contention correct?

marriage is declared null and void on the
ground of psychological incapacity? A: No. Art. 148 of the FC does not apply since, in
said article, a co-ownership may ensue in case of
A: The property relation between the parties is cohabitation where, for instance, one party has a
governed by Art. 147 of the FC. Under this property pre-existing valid marriage, provided that the
regime, property acquired by both spouses through parties prove their actual joint contribution of
their work and industry shall be governed by the money, property or industry and only to the extent
rules on equal co-ownership. Any property acquired of their proportionate interest thereon. Petitioner
during the union is prima facie presumed to have failed to adduce preponderance of evidence that
been obtained through their joint efforts. A party she contributed money, property or industry in the
who did not participate in the acquisition of the acquisition of the subject property and, hence, is
property shall still be considered as having not a co-owner of the property. Since the subject
contributed thereto jointly if said party's "efforts property was acquired during the subsistence of the
consisted in the care and maintenance of the family first marriage of Eduardo, under normal
household." Unlike the conjugal partnership of circumstances, the same should be presumed to be
gains, the fruits of the couple's separate property conjugal property of Eduardo and Josefina.
are not included in the co-ownership. (Francisco v. Master Iron Works Construction Corp.,
G.R. No. 151967. Feb. 16, 2005)
Q: Josefina’s petition for nullity of her marriage to
Eduardo was granted on the ground of existence Q: Francisco and Erminda’s marriage was nullified
of a prior marriage. She now asserts that since her by the trial court due to psychological incapacity.
marriage to Eduardo is void, their property He did not contest the decree of nullity but he
relation is to be governed by the rules on co- assailed the division in the properties which was
ownership under Art. 148 of the FC and not by contained in the decree. He asserted that the
Art.144 of the Civil Code. In this regime, Eduardo properties were acquired through his efforts and
has no share at all in the properties since no proof that she had no contribution whatsoever in their
was adduced by him as regards his participation in acquisition and maintenance; hence, she should
their purchase. However, she did not prove that not be entitled to a joint share in their properties.
she acquired the properties using her personal Is Francisco’s contention correct?
funds and prior to her cohabitation with Eduardo.
52 CIVIL LAW TEAM

A: No. The property relation between the parties is actually used her own money in either
governed by Art. 147 of the FC. Under this article, purchase, how do you decide the case?
there is a presumption that the properties which
they acquired during their cohabitation were A: Carol's action to recover both the rice land
acquired through their joint efforts, work or and the house and lot is well-founded. Both
industry. It further provides that a party who did are conjugal property, in view of the failure of
not participate in the acquisition thereof shall be Erlinda, the wife in a bigamous marriage, to
deemed to have contributed jointly in the prove that her own money was used in the
acquisition thereof if his or her efforts consisted in purchases made. The Supreme Court in a case
the care and maintenance of the family and of the applied Art. 148, Family Code, despite the fact
household. that the husband's death took place prior to
the effectivity of said law. However, even
Note: In this case, Francisco himself testified that his under Art. 144, Civil Code, the same
wife was not a plain housewife but one who helped conclusion would have been reached in view
him in managing the family's business. Hence, Erminda of the bigamous nature of the second
is rightfully entitled to a joint share in their properties. marriage. (1998 Bar Question)
(Gonzales v. Gonzales, G.R. No. 159521, Dec. 16, 2005)
Q: Luis and Rizza, both 26 years of age and single,
Q: Romeo and Juliet lived together as husband and live exclusively with each other as husband and
wife without the benefit of marriage. During their wife without the benefit of marriage, Luis is
cohabitation, they acquired a house. When they gainfully employed, Rizza is not employed, stays at
broke up, they executed an agreement where he home, and takes charge of the household chores.
agreed to leave the house provided Juliet will pay
his entire share in their properties. She failed to do After living together for a little over twenty years,
so but she also ignored his demand for her to Luis was able to save from his salary earnings
vacate. Romeo sued her for ejectment which the during that period the amount of P200,000.00
court granted. Was the court correct in granting presently deposited in a bank. A house and lot
the same? worth P500,000.00 was recently purchased for the
same amount by the couple. Of the P500.000.00
A: No. Under Art. 147 of the FC, the property is co- used by the common-law spouses to purchase the
owned by the parties. Under said provision, in the property, P200.000.00 had come from the sale of
absence of proof to the contrary, any property palay harvested from the hacienda owned by Luis
acquired by common-law spouses during their and P300,000.00 from the rentals of a building
cohabitation is presumed to have been obtained belonging to Rizza. In fine, the sum of P500.000.00
thru their joint efforts and is owned by them in had been part of the fruits received during the
equal shares. Their property relationship in such a period of cohabitation from their separate
case is essentially governed by the rules on co- property, a car worth P100.000.00 being used by
ownership. Thus, Romeo cannot seek the ejectment the common-law spouses, was donated just
of Juliet therefrom. As a co-owner, she is as much months ago to Rizza by her parents.
entitled to enjoy its possession and ownership as
him. (Abing v. CA,G.R. No. 146294, Jul. 31, 2006) Luis and Rizza now decide to terminate their
cohabitation, and they ask you to give them your
Q: In 1973, Mauricio, a Filipino pensioner of the legal advice on how, under the law should the
US Government, contracted a bigamous bank deposit of P200,000.00 the house and lot
marriage with Erlinda, despite the fact that his valued at P500.000.00 and the car worth
first wife, Carol, was still living. In 1975, P100.000.00 be allocated to them?
Mauricio and Erlinda jointly bought a parcel of
rice land with the title being placed jointly in A: Art. 147 of the Family Code provides in part that
their names. Shortly thereafter, they purchased when a man and a woman who are capacitated to
another property (a house and lot) which was marry each other, live exclusively with each other
placed in her name alone as the buyer. In 1981, as husband and wife without the benefit of
Mauricio died and Carol promptly filed an marriage or under a void marriage, their wages and
action against Erlinda to recover both the rice salaries shall be owned by them in equal shares and
land and the house and lot, claiming them to be the property acquired by both of them through
conjugal property of the first marriage. Erlinda their work or industry shall be governed by the
contends that she and the late Mauricio were rules of co-ownership. In the absence of proof to
co-owners of the rice land, and with respect to the contrary, properties acquired while they lived
the house and lot she claims she is the exclusive together shall be presumed to have been obtained
owner. Assuming she fails to prove that she had
53
by their joint efforts, worker industry, and shall be ownership (Art. 147, Family Code, first
owned by them in equal shares. A party who did paragraph).
not participate in the acquisition by the other party
of any property shall be deemed to have Addendum: However, after Rico's
contributed jointly in the acquisition thereof if the marriage to Letty, the half interest of Rico
former's efforts consisted in the care and in the riceland will then become absolute
maintenance of the family and of the household. community property of Rico and Letty.
Thus:
1. The wages and salaries of Luis in the 2. Rico is the exclusive owner of the coconut
amount of P200,000.00 shall be divided land. The relation is a sole/single
equally between Luis and Rizza. proprietorship (Art. 148. Family Code, first
paragraph is applicable, and not Art. 147
2. The house and lot valued at P500.000.00 Family Code).
having been acquired by both of them
through work or industry shall be divided Addendum: However, after Rico's
between them in proportion to their marriage to Letty, the coconut land of
respective contribution, in consonance Rico will then become absolute
with the rules on co-ownership. Hence, community property of Rico and Letty.)
Luis gets 2\5 while Rizza gets 3\5 of
P500.000.00. 3. Rico and Letty are the co-owners. The
relations is the Absolute Community of
3. The car worth P100,000.00 shall be Property (Arts, 75, 90 and 91, Family
exclusively owned by Rizza, the same Code).(1992 Bar Question)
having been donated to her by her
parents. (1997 Bar Question) VI. THE FAMILY
Q: In 1989, Rico, then a widower forty (40) years of A. THE FAMILY AS AN INSTITUTION
age, cohabited with Cora, a widow thirty (30)
years of age. While living together, they acquired Q: What is included in family relations?
from their combined earnings a parcel of riceland.
After Rico and Cora separated, Rico lived together A:
with Mabel, a maiden sixteen (16) years of age. 1. Between husband and wife
While living together, Rico was a salaried 2. Between parents and children
employee and Mabel kept house for Rico and did 3. Among other ascendants and descendants
full-time household chores for him. During their 4. Among brothers and sisters, whether of the
cohabitation, a parcel of coconut land was full or half blood. (Art. 150, FC)
acquired by Rico from his savings.
Q: What governs family relations?
After living together for one (1) year, Rico and
Mabel separated. Rico then met and married A: Family relations are governed by the law. No
Letty, a single woman twenty-six (26) years of age. custom, practice or agreement destructive of the
During the marriage of Rico and Letty, Letty family shall be recognized or given effect (Art. 149,
bought a mango orchard out of her own personal FC).
earnings.
Note: Even if not all forms of extra-marital relations
1. Who would own the riceland, and what are punishable under penal law, the sanctity of
property relations governs the marriage is constitutionally recognized and likewise
ownership? Explain. affirmed by our statutes as a special contract of
2. Who would own the coconut land, and permanent union. Accordingly, the Court has had little
what property relations governs the qualms with penalizing judicial employees for their
ownership? Explain. dalliances with married persons or for their own
betrayals of the marital vow of fidelity.(Concerned
3. Who would own the mango orchard, and
Employee v. Mayor, A.M. No. P-02-1564. November
what property elations governs the
23, 2004)
ownership? Explain.
Q: What are the requisites before a suit between
A:
members of the same family may prosper?
1. Rico and Cora are the co-owners of the
riceland. The relations is that of co-
54 CIVIL LAW TEAM

A:
1. Earnest efforts toward a compromise have A: No. The land where the house is erected is an
been made; integral part of the home and the home should be
2. Such efforts failed; permanent in character.
3. The fact that earnest efforts toward a
compromise have been made but the same Note: A house constructed on rented land or by
have failed appears in the verified complaint or tolerance of the owner is not a permanent
petition.. improvement on the land and the home will thus be
temporary.
Q: In a complaint filed by Manolo against his
brother, Rodolfo, it was alleged that the case "xxx Q: What are the exceptions to the rule that the FH
passed through the Barangay and no settlement is exempt from execution, forced sale or
was forged between the plaintiffs and defendant attachment?
as a result of which Certification to File Action was
issued xxx". Rodolfo moved to dismiss for failure A: LTPM
to comply with a condition precedent - that 1. Debts due to Laborers, mechanics,
earnest efforts for an amicable settlement among architects, builders, material men and
the parties had been exerted but that none was others who rendered service or furnished
reached. Decide. materials for the constitution of the
building;
A: The case will prosper. There was in fact 2. Non-payment of Taxes;
substantial compliance with Art. 151 of the Family 3. Debts incurred Prior to its constitution;
Code since the spouses alleged in the complaint for 4. Debts secured by Mortgages on the
ejectment that the case "xxx passed through the premises before or after such
Barangay and no settlement was forged between constitution.
the plaintiffs and defendant as a result of which
Certification to File Action was issued by Barangay Note: Exemption is limited to the value allowed in the
97, Zone 8, District I, Tondo, Manila xxx". It bears FC
stressing that under Sec. 412 (a) of R.A. 7160, no
complaint involving any matter within the authority Q: A complaint for damages was filed against
of the Lupon shall be instituted or filed directly in Hinahon in 1986 when she incurred liabilities as
court for adjudication unless there has been a early as 1977, which action prospered in 1989. The
confrontation between the parties and no house and lot that she owned was levied upon and
settlement was reached. sold at auction. She assails the levy and sale on the
ground that it was her family home and therefore
Moreover, the phrase "members of the same exempt from execution. Decide.
family" found in Art. 151 of the Family Code must
be construed in relation to Art. 150 thereof. A: It is not exempt. Under Art. 155 of the FC, the
(Martinez, et al. v. Martinez, G.R. No. 162084. Jun. family home shall be exempt from execution,
28, 2005) forced sale, or attachment except for, among other
things, debts incurred prior to the constitution of
Note: A sister-in-law or a brother-in-law is not covered the family home. In the case at bar, the house and
by these two provisions. Being an exception to the lot was not constituted as a family home, whether
general rule, Art. 151 must be strictly construed. judicially or extra-judicially, at the time that the
(Gayon v. Gayon, G.R. No. L-28394, Nov. 26, 1970) debtor incurred her debts. Under prevailing
jurisprudence, it is deemed constituted as such by
B. THE FAMILY HOME operation of law only upon the effectivity of the
Family Code on August 3, 1988, thus, the debts
Q: What is meant by family home (FH) and how is were incurred before the constitution of the family
it constituted? home. (Gomez-Salcedo, et al. v. Sta. Ines, et al.,G.R.
No. 132537, Oct. 14, 2005)
A: It is the dwelling house where the husband and
wife and their family reside, and the land on which Q: What are the rulesfor the family home to be
it is situated; it is constituted jointly by the husband exempt from execution?
and the wife or by an unmarried head of a family
(Art. 152, FC). A: If the family home was constructed before the
effectivity of the Family Code, then it must have
Q: Can FH be constituted on a house constructed been constituted either judicially or extra-
on a land belonging to another? judicially as provided under Articles 225, 229-231
55
and 233 of the Civil Code. Judicial constitution of 1. FH is deemed constituted from the time
the family home requires the filing of a verified of Actual occupation as a family
petition before the courts and the registration of residence;
the court’s order with the Registry of Deeds of 2. Only 1 FH may be constituted;
the area where the property is located. 3. Must be Owned by the person
Meanwhile, extrajudicial constitution is governed constituting it;
by Articles 240 to 242 of the Civil Code and involves 4. Must be Permanent;
the execution of a public instrument which must 5. Same rule applies to both valid and
also be registered with the Registry of Property. voidable marriages and even to common
law spouses; (Arts. 147 and 148)
For family homes constructed after the effectivity 6. It Continues despite death of one or both
of the Family Code, there is no need to spouses or an unmarried head of the
constitute extrajudicially or judicially, and the family for 10 years or as long as there is a
exemption is effective from the time it was minor beneficiary.
constituted and lasts as long as any of its
beneficiaries actually resides therein. Moreover, Note: The heirs cannot partition the same
the family home should belong to the absolute unless the court finds compelling reasons
community or conjugal partnership, or if therefor. This rule shall apply regardless of
exclusively by one spouse, its constitution must whoever owns the property or constituted
have been with consent of the other, and its the family home.
value must not exceed certain amounts depending
upon the area where it is located. Further, the Q: Who are the beneficiaries of a FH?
debts incurred for which the exemption does not
apply as provided under Art. 155 for which the A:
family home is made answerable must have been 1. Husband and wife, or unmarried head of the
incurred after the effectivity of the Family Code. family
2. Parents (may include parents-in-law),
And in both cases, whether under the Civil Code or ascendants, brothers and sisters (legitimate or
the Family Code, it is not sufficient that the illegitimate) living in the FH and dependent on
person claiming exemption merely alleges that the head of the family for support
such property is a family home. This claim for
exemption must be set up and proved. (Juanita Q: What are the requisites in the sale, alienation,
Trinidad Ramos, et al. v. Danilo Pangilinan et al. donation, assignment or encumbrance of the FH?
G.R. No. 185920, July 20, 2010)
A: The following must give their written consent:
Q: Does the exemption of family home from 1. The person who constituted the FH;
execution be set up and proved? 2. The spouse of the person who constituted
the FH;
3. Majority of the beneficiaries of legal age.
A: Yes. The family home’s exemption from
execution must be set up and proved to the Sheriff
Note: In case of conflict, the court shall decide.
before the sale of the property at public auction. It
should be asserted that the property is a family
Q: What are the requisites for the creditor to avail
home and that it is exempted from execution at the
of the right to execute?
time it was levied or within a reasonable time
thereafter. It is not sufficient that the person
A:
claiming exemption merely alleges that such
1. He must be a judgment creditor;
property is a family home. Failure to do so will
2. His claim must not be among those excepted
estop one from later claiming the said exemption.
under Art. 155;
(Spouses Araceli Oliva-De Mesa and Ernesto de
3. He has reasonable grounds to believe that the
Mesa v. Spouses Claudio D. Acero Jr. and Ma.Rufina
family home is worth more than the maximum
D. Acero, Sheriff Felixberto L. Samonte and Registrar
amount fixed in Art. 157.
Alfredo Santos, G.R. No. 185064, Jan. 16, 2012)
Q: What is the procedure in exercising the right to
Q: What are the guidelines in the constitution of
execute?
the family home?
A:
A: 1-SAPOC
1. Creditor must file a motion in the court
56 CIVIL LAW TEAM

proceeding where he obtained a favorable A: The following conditions must be present:

judgment for a writ of execution against the 1. The artificial insemination is made on the
FH; wife, not on another woman;
2. There will be a hearing on the motion where 2. The artificial insemination on the wife is
the creditor must prove that the actual value done with the sperm of the husband or of
of the FH exceeds the maximum amount fixed a donor, or both the husband and a
by the Family Code, either at the time of its donor;
constitution or as a result of improvements 3. The artificial insemination has been
introduced after its constitution; authorized or ratified by the spouse on a
3. If the creditor proves that the actual value written instrument executed and signed
exceeds the maximum amount, the court will by them before the birth of the child; and
order its sale in execution; 4. The written instrument is recorded in the
4. If the family home is sold for more than the civil registry together with the birth
value allowed, the proceeds shall be applied as certificate of the child.
follows:
a. The obligations enumerated in Art. 155 Q; On what grounds may legitimacy be impugned?
must be paid
b. The judgment in favor of the creditor will A: legitimacy of the child may be impugned only on
be paid, plus all the costs of execution the following grounds:
The excess, if any, shall be delivered to the 1. Physical impossibility of the husband to
judgment debtor (Art. 160, Family Code). have sexual intercourse with wife within
the first 120 days of the 300 days which
VII. PATERNITY AND FILIATION immediately preceded the birth of the
child
Q: To what do paternity and filiation refer to? 2. It is proved that the child could not have
been that of the husband
A: Paternity and filiation refer to the relationship 3. In case of artificial insemination, the
existing between parent and child. written authorization or ratification of
either parent was obtained through
Note: Filiation may be by nature or adoption, mistake, fraud, violence, intimidation, or
legitimate or illegitimate. undue influence.
Q: What are the classifications of filiation? Q: What is the rule on status of child where the
mother contracted another marriage within 300
A: LILA days after termination of the former?
GENERAL RULE EXCEPTIONS
Legitimate A: The child shall be considered as conceived during
Conceived or born within a valid marriage the:
Illegitimate 1. Former marriage– if child is born:

Conceived and born outside a valid marriage a. Before 180 days after the
solemnization of the subsequent
Legitimated marriage, provided it is born
Conceived or born outside of wedlock of parents b. Within 300 days after termination of
without impediment to marry at the time of
former marriage
conception and had subsequently married.
2. Subsequent marriage –if a child is born:
Requisites of Legitimation:
a. 180 days after the celebration of the
1. No legal impediment for parents to marry at subsequent marriage;
time of conception; b. even though it be born within 300
2. Valid marriage subsequent to child’s birth. days after the termination of the
Adopted former marriage.
(Please refer to related notes on Adoption laws)
A. LEGITIMATE CHILDREN
Q: When is a child conceived by artificial

insemination considered legitimate?
57
Illustrations:
th th
1. 180 day takes place before 300 day
Subsequent 180th day from 300th day

Former marriage marriage solemnization of from
terminated solemnized subsequent termination of
marriage former
marriage
Born during this period:

Conceived during Subsequent
Conceived during Former Marriage
th Marriage th
2. 180 day takes place after 300 day
300th day 180th day from
Subsequent
from solemnization of
Former marriage
termination of subsequent
marriage solemnized
former marriage
terminated marriage

Conceived during Subsequent
Conceived during Former
Marriage
Marriage
58 CIVIL LAW TEAM

Q: Distinguish action to impugn legitimacy and

action to claim legitimacy. 3. In case of children conceived through artificial
insemination, the written authorization or
A: ratification of either parent was obtained
ACTION TO IMPUGN ACTION TO CLAIM through mistake, fraud, violence, intimidation
LEGITIMACY LEGITIMACY or undue influence.
Remedy
Action to impugn Action to claim legitimacy Q: When does the prescriptive period start to run?
legitimacy or illegitimacy (compulsory recognition)
A: GR: The prescriptive period for filing action
Real party in interest
impugning the legitimacy of the child shall be
GR: Husband
counted from the knowledge of birth or its
recording in the civil registry.
XPN: Heirs, in cases
GR: Child
where:
1. Husband died XPN: If the birth was:
XPN: Heirs of the child, in 1. Concealed from or
before the
cases where: 2. Was unknown to the husband or his heirs,
expiration of the
1. Child died in state the periods shall be counted from the
period for bringing
of insanity discovery or knowledge of the birth of the
the action;
2. Child died during
2. Husband died after child or of the act of registration of said
minority
filing the complaint, birth, whichever is earlier.
without having
Note: Must be filed
desisted; CLAIMING FILIATION
within 5 years.
3. Child was born after
the death of Q: Is the right to claim filiation transmissible to the
husband. heirs of the child?
Prescription
GR: During the lifetime of A: GR: The right to claim filiation may be used only
1 year – husband reside
the child by the child. It is not transmissible to the heirs.
in the same municipality
or city where birth took
XPN: Lifetime of the
place XPN: In cases where child died:
putative father
2 years – husband reside 1. During minority or
In cases where the action
NOT in the same 2. In a state of insanity.
is for the recognition of
municipality or city
illegitimate child by
3 years – husband is Q: When should an action to claim legitimacy be
“open and continuous
living abroad brought?
possession” of the status.
Q: What are the grounds to impugn legitimacy of A: It depends on who is bringing the action:
the child? 1. By the child – during his lifetime
2. By his heirs – within 5 years should the
A: child die during minority or in a state of
1. Physical impossibility for the husband to have insanity
sexual intercourse with his wife within the first
120 days of the 300 days which immediately Note: Questioning legitimacy may not be collaterally
preceded the birth of the child because of: attacked. It can be impugned only in a direct action.
a. Physical incapacity of the husband to
B. PROOF OF FILIATION
have sexual intercourse with his wife,
b. The fact that the husband and wife were
Q: What are the different kinds of proof of
living separately in such a way that sexual
filiation?
intercourse was not possible, or
c. Serious illness of the husband which
A: Proof of filiation has two kinds: Primary and
absolutely prevented intercourse;
secondary.
1. Primary proof consists of the ff:
2. Proved that for biological or other scientific
a. Record of birth appearing in civil
reasons, the child could not have been that of
registrar or final judgment;
the husband, except in the case of children
b. Admission of legitimate filiation in
conceived through artificial insemination;
public document or private
59
handwritten instrument signed by impossibility of access under Art. 166. Further, upon
parent concerned. the expiration of the periods for impugning
2. Secondary consists of the ff: legitimacy under Art. 170, and in the proper cases
a. Open and continuous possession of under Art. 171, of the FC, the action to impugn
legitimacy; would no longer be legally feasible and the status
b. Any means allowed by the Rules conferred by the presumption becomes fixed and
of Court and special laws. unassailable. In this case, there is no showing that
Pablo, who has the right to impugn the legitimacy
Note: To prove open and continuous possession of the of Jeylynn, challenged her status during his lifetime.
status of an illegitimate child, there must be evidence Furthermore, there is adequate evidence to show
of manifestation of the permanent intention of the that the child was in fact his child, and this is the
supposed father to consider the child as his, by birth certificate where he affixed his signature. (SSS
continuous and clear manifestations of parental v. Aguas, et al., G.R. No. 165546, Feb. 27, 2006)
affection and care, which cannot be attributed to pure
charity. Q: In an action for partition of estate, the trial
court dismissed it on the ground that the
Such acts must be of such a nature that they reveal not
respondent, on the basis of her birth certificate,
only the conviction of paternity, but also the apparent
desire to have and treat the child as such in all
was in fact the illegitimate child of the deceased
relations in society and in life, not accidentally, but and therefore the latter's sole heir, to the
continuously. (Jison v. CA, G.R. No. 124853, Feb. 24, exclusion of petitioners. However, trial court failed
1998) to see that in said birth certificate, she was listed
therein as “adopted”. Was the trial court correct in
Q: What are the rules in proving filiation? dismissing the action for partition?
A: GR: Primary proof shall be used to prove filiation. A: No. The trial court erred in relying upon the said
birth certificate in pronouncing the filiation of the
XPN: In absence of primary proof, secondary respondent. However, since she was listed therein
proof may be resorted to. as “adopted”, she should therefore have presented
evidence of her adoption in view of the contents of
Note: For illegitimate children, if the action is based on her birth certificate. In this case, there is no
par. 2 of Art. 172 (secondary proof), the action may be showing that she undertook such. It is well-settled
brought only during the lifetime of the alleged parent. that a record of birth is merely prima facie evidence
of the facts contained therein. It is not conclusive
Q: May a will which was not presented for probate evidence of the truthfulness of the statements
sufficiently establish filiation? made there by the interested parties. (Rivera v.
Heirs of Romualdo Villanueva, GR No. 141501, July
A: Yes. It still constitutes a public document or 21, 2006)
private handwritten instrument signed by parent
concerned Q: In a complaint for partition and accounting with
damages, Ma. Theresa alleged that she is the
Q: Rosanna, as surviving spouse, filed a claim for illegitimate daughter of Vicente, and therefore
death benefits with the SSS upon the death of her entitled to a share in the estate left behind by the
husband, Pablo. She indicated in her claim that the latter. As proof, she presented her birth certificate
decedent is also survived by their minor child, which Vicente himself signed thereby
Jeylynn, who was born in 1991. The SSS granted acknowledging that she is his daughter. Is the
her claim but this was withdrawn after proof presented by Ma.Theresa sufficient to prove
investigation, when a sister of the decedent her claim that she is an illegitimate child of
informed the system that Pablo could not have Vicente?
sired a child during his lifetime because he was
infertile. However in Jeylynn’s birth certificate, A: Yes. Citing the earlier case of De Jesus v. Estate of
Pablo affixed his signature and he did not impugn Juan Dizon, (366 SCRA 499), the Supreme Court
Jeylynn’s legitimacy during his lifetime. Was the held that the Ma. Theresa was able to establish that
SSS correct in withdrawing the death benefits? Vicente was in fact her father. The due recognition
of an illegitimate child in a record of birth, a will, a
A: No. Under Art. 164 of the FC, children conceived statement before a court of record, or in any
or born during the marriage of the parents are authentic writing is, in itself, a consummated act of
legitimate. This presumption becomes conclusive in acknowledgment of the child, and no further court
the absence of proof that there is physical action is required. The rule is, any authentic writing
60 CIVIL LAW TEAM

is treated not just as a ground for compulsory Ramon and Van Bolatis, and contains as well the
recognition; it is in itself a voluntary recognition word "married" to reflect the union between the
that does not require a separate action for judicial two. However, it was not signed by Ramon and
approval. (Eceta v. Eceta, G.R. No. 157037, May 20, Vanemon Bolatis. It was merely signed by the
2004) attending physician, who certified to having
attended to the birth of a child. Does the
Q: Gerardo filed a complaint for bigamy against presumption of legitimacy apply to Cherimon?
Ma. Theresa, alleging that she had a previous
subsisting marriage when she married him. The A: No. Since the birth certificate was not signed by
trial court nullified their marriage and declared Cher's alleged parents but was merely signed by the
that the son, who was born during their marriage attending physician, such a certificate, although a
and was registered as their son, as illegitimate. public record of a private document is, under
What is the status of the child? Section 23, Rule 132 of the Rules of Court, evidence
only of the fact which gave rise to its execution,
A: The first marriage being found to be valid and which is, the fact of birth of a child. A birth
subsisting, whereas that between Gerardo and Ma. certificate, in order to be considered as validating
Theresa was void and non-existent, the child should proof of paternity and as an instrument of
be regarded as a legitimate child out of the first recognition, must be signed by the father and
marriage. This is so because the child's best interest mother jointly, or by the mother alone if the father
should be the primordial consideration in this case. refuses. There having been no convincing proof of
respondent's supposed legitimate relations with
Q: Gerardo and Ma. Theresa, however, admitted respect to the decedent, the presumption of
that the child was their son. Will this affect the legitimacy under the law did not therefore arise in
status of the child? her favor. (Angeles v. Angeles-Maglaya, G.R. No.
153798, Sept.2, 2005)
A: No. The admission of the parties that the child
was their son was in the nature of a compromise. Q: On the basis of the physical presentation of the
The rule is that the status and filiation of a child plaintiff-minor before it and the fact that the
cannot be compromised. Art. 164 of the FC is clear alleged father had admitted having sexual
that a child who is conceived or born during the intercourse with the child's mother, the trial court,
marriage of his parents is legitimate. (Concepcion v. in an action to prove filiation with support, held
CA,G.R. No. 123450. Aug. 31, 2005) that the plaintiff-minor is the child of the
defendant with the plaintiff-minor's mother. Was
Q: What is the effect of Ma.Theresa’s claim that the trial court correct in holding such?
the child is her illegitimate child with her second
husband to the status of the child? A: No. In this age of genetic profiling and DNA
analysis, the extremely subjective test of physical
A: None. This declaration – an avowal by the resemblance or similarity of features will not suffice
mother that her child is illegitimate – is the very as evidence to prove paternity and filiation before
declaration that is proscribed by Art. 167 of the courts of law. This only shows the very high
Family Code. This proscription is in consonance standard of proof that a child must present in order
with, among others, the intention of the law to lean to establish filiation.
towards the legitimacy of children. (Concepcion v.
CA,G.R. No. 123450. Aug. 31, 2005) Note: The birth certificate that was presented by the
plaintiff-minor appears to have been prepared without
Q: In a petition for issuance of letters of the knowledge or consent of the putative father. It is
administration, Cheri Bolatis alleged that she is the therefore not a competent piece of evidence on
sole legitimate daughter of decedent, Ramon and paternity. The local civil registrar in this case has no
Van Bolatis. Phoebe, the decedent's second wife, authority to record the paternity of an illegitimate child
opposed the petition and questioned the on the information of a third person. Similarly, a
baptismal certificate, while considered a public
legitimate filiation of Cheri to the decedent,
document, can only serve as evidence of the
asserting that Cheri’s birth certificate was not
administration of the sacrament on the date specified
signed by Ramon and that she had not presented therein but not the veracity of the entries with respect
the marriage contract between her alleged parents to the child's paternity (Macadangdang v. CA, 100
which would have supported her claim. SCRA 73). Thus, certificates issued by the local civil
registrar and baptismal certificates are per se
In said birth certificate, it was indicated that her inadmissible in evidence as proof of filiation and they
birth was recorded as the legitimate child of cannot be admitted indirectly as circumstantial
61
evidence to prove the same (Jison v. CA, 350 Phil. 138). solemnizing officer, but the parties or
(Cabatania v. CA, G.R. No. 124814. Oct. 21, 2004) either of them believed in good faith that
the solemnizing officer had authority, in
Q: Ann Lopez, represented by her mother Araceli which case the marriage will be
Lopez, filed a complaint for recognition and considered valid and the children will be
support of filiation against Ben-Hur Nepomuceno. considered legitimate.
She assailed that she is the illegitimate daughter of
Nepomuceno submitting as evidence the Q: In what instances may an illegitimate child use
handwritten note allegedly written and signed by the surname of their father?
Nepomuceno. She also demanded for financial
support along with filial recognition. Nepomuceno A: RAP
denied the assertions reasoning out that he was 1. Filiation has been Recognized by the
compelled to execute the handwritten note due father through the record of birth
to the threats of the National People’s Army. appearing in the civil register
RTC ruled in favor of Ann. Is the trial court correct? 2. Admission in public document
3. Private handwritten instrument is made
A: Ann’s demand for support is dependent on the by the father
determination of her filiation. However, she relies
only on the handwritten note executed by Note: Provided that the father has the right to institute
petitioner. The note does not contain any an action before the regular courts to prove non-
statement whatsoever about her filiation to filiation during his lifetime.
petitioner. It is, therefore, not within the ambit of
Article 172(2) vis-à-vis Article 175 of the FC which D. LEGITIMATED CHILDREN
admits as competent evidence of illegitimate
filiation an admission of filiation in a private Q: Who are legitimated children?
handwritten instrument signed by the parent
concerned. A; Legitimated children are those who, because of
the subsequent marriage of their parents to each
The Court is mindful that the best interests of the other are by legal fiction, considered legitimate.
child in cases involving paternity and filiation should
be advanced. It is, however, just as mindful of the Q: What is legitimation?
disturbance that unfounded paternity suits cause to
the privacy and peace of the putative father’s A: Legitimation is a remedy or process by means of
legitimate family. (Ben-HurNepomuceno v. which those who in fact not born in wedlock and
Archbencel Ann Lopez, represented by her mother should therefore be ordinarily illegitimate, are by
Araceli Lopez G.R. No. 181258, March 18, 2010) fiction, considered legitimate.
C. ILLEGITIMATE CHILDREN Q: Who are entitled to legitimation?
Q: Who are illegitimate children? A: Only children conceived and born outside of
wedlock of parents who, at the time of conception,
A: Children conceived and born outside a valid were not disqualified by any impediment to marry
marriage: each other (Art. 177, FC).
a. children born of couples who are not
legally married or of common law Q: How does legitimation take place?
marriages A: Legitimation takes place by a subsequent valid
b. children born of incestuous marriage marriage between parents.
c. children born of bigamous marriage
d. children born of adulterous relations Note: The annulment of a voidable marriage shall not
between parents affect the legitimation(Art. 178, FC).
e. children born of marriages which are void
Q: When does legitimation take place?
for reasons of public policy under Art. 18
f. children born of couples below 18,
A: It shall retroact to the time of the child’s birth
whether they are married (which
(Art 180, FC)
marriage is valid) or not
g. children born of void marriages under Art.
Q; Who may impugn legitimation?
35, except where the marriage is void for
A: Only by those who are prejudiced in their rights.
lack of authority on the part of the
62 CIVIL LAW TEAM

Q: Are children born of parents, who at the time of Was the marriage of Roderick and Faye valid?
conception and birth, were minors may be
legitimated? A: The marriage was void because there was no
marriage license. Their marriage was not exempt
A: Yes. RA 9858 amended Art. 177 of the Family from the requisite of a marriage license because
Code in allowing children conceived and born Roderick and Faye have not been cohabiting for at
outside of wedlock of parents who, at the time of least 5 continuous years before the celebration of
conception of the former, were not disqualified by their marriage. Their lovers’ trysts and brief
any impediment to marry each other, or were so visitations did not amount to “cohabitation”.
disqualified only because either or both of them Moreover, the Supreme Court held that for the
were below eighteen (18) years of age, to be marriage to be exempt from a license, there should
legitimated. be no impediment for them to marry each other
during the entire 5 years of cohabitation. Roderick
Q: What are the requisites of legitimation? and Faye could not have cohabited for 5 years of
cohabitation. Roderick and Faye could not have
A: been cohabited for 5 continuous years without
1. Child must have been conceived and born impediment because Faye was then legally married
outside of wedlock; to Brad. (2008 Bar Question)
2. Child’s parents, at the time of former’s
conception, were not disqualified by any What is the filiation status of Laica?
impediment to marry each other;
3. The subsequent valid marriage of the parents. A: Having been born during the marriage of Faye
(Art. 177, NCC) and Brad, she is presumed to be the legitimate child
of Faye and Brad, she is presumed to be the
Q: Why is an illegitimate child of a woman who legitimate child of Faye and Brad. This presumption
gets married allowed to bear the surname of her had become conclusive because the period of time
spouse, while a legitimate child may not? to impugn her filiation had already prescribed.
A: To allow the child to adopt the surname of his Can Laica bring an action to impugn her own status
mother’s second husband, who is not his father, on the ground that based on DNA results, Roderick
could result in confusion in his paternity. It could is her biological father?
also create the suspicion that the child, who was
born during the coverture of his mother with her A: No, she cannot impugn her own filiation. The law
first husband, was in fact sired by the second does not allow a child to impugn his or her own
husband, thus bringing his legitimate status into filiation. In the problem, Laica’s legitimate filiation
discredit. (Republic v. Vicencio, G.R. No. 88202. was accorded to her by operation of law which may
Dec. 14, 1998) be impugned only by Brad, or his heirs in the cases
provided by law within the prescriptive period.
Q: Roderick and Faye were high school
sweethearts. When Roderick was 18 and Faye, 16 Q: Can Laica be legitimated by the marriage of her
years old, they started living together as husband biological parents?
and wife without the benefit of marriage. When
Faye reached 18 years of age, her parents forcibly A: No she cannot be legitimated by the marriage of
took her back and arranged for her marriage to her biological parents. In the first place she is not,
Brad. Although Faye lived with Brad after the under the law, the child of Roderick. In the second
marriage, Roderick continued to regularly visit place, her biological parents could not have validly
Faye while Brad was away at work. During their married each other at the time she was conceived
marriage, Faye gave birth to a baby girl, Laica. and born simply because Faye was still married to
When Faye was 25 years old, Brad discovered her Roderick at that time. Under Article 177 of the
continued liaison with Roderick and in one of their Family Code, only children conceived or born
heated arguments, Faye shot Brad to death. She outside of wedlock of parents who, at the time of
lost no time in marrying her true love Roderick, the conception of the child were not disqualified by
without a marriage license, claiming that they any impediment to marry each other, may be
have been continuously cohabiting for more than legitimated. (2008 Bar Question)
5 years.
RIGHTS OF CHILDREN
63
Q: What are the rights of legitimate and illegitimate children?
A:
LEGITIMATE CHILDREN ILLEGITIMATE CHILDREN
Surname
Bear the surnames of both parents (mother and Bear the surname of either the mother or the father
father) under R.A. 9255
Support
Receive support from:
1. Parents;
2. Ascendants; and Receive support according to provision of FC
3. in proper cases, brothers and sisters under Art
174.
Legitime
Full Legitimes and other successional rights under the
Share is equivalent to ½ of the share of a legitimate child
Civil Code
Period for filing action for claim of legitimacy or illegitimacy
For primary proof: his/her whole lifetime
His/her whole lifetime regardless of type of proof
provided under Art 172 For secondary proof:
only during the lifetime of the alleged parent
Transmissibility of right to file an action to claim legitimacy
Yes No
Right to inherit ab intesto
No right to inherit ab intesto from legitimate children
Yes and relatives of father and mother under Art 992, NCC
(Iron Curtain Rule)
VIII. ADOPTION 7. GR: At least 16 years older than adoptee
A. DOMESTIC ADOPTION LAW XPN: It is not necessary that adopter be at

least 16 years older:
1. WHO CAN ADOPT a. Adopter is the biological parent of
the adoptee,
Q: Who may adopt? b. Adopter is the spouse of adoptee’s
parent.
A:
1. Filipino citizens; Q: What are the qualifications of an alien who may
2. Aliens; adopt under R.A. 8552?
3. Guardians with respect to their ward.
A: SD-3
Q: What are the qualifications of a Filipino who 1. Possesses Same qualifications as those
may adopt? enumerated for Filipino adopters;
2. His country has Diplomatic relations with
A: LPG-FEC-16 the Philippines;
1. Must be of Legal age; 3. GR: Has been living in the Philippines for
2. In a Position to support and care for his at least 3 continuous years prior to the
children; application for adoption and maintains
3. Good moral character; such residence until adoption decree has
4. Full civil capacity and legal rights; been entered.
5. Not been Convicted of any crime involving
moral turpitude; XPNs:
6. Emotionally and psychologically capable a. He is a former Filipino who seeks to
th
of caring for children; adopt a relative within the 4 civil
64 CIVIL LAW TEAM

degree of consanguinity or affinity, A: Yes. Section 7 Article 3 of R.A. 8552 reads: Sec. 7
b. He is married to a Filipino and seeks – Husband and wife shall jointly adopt, xxx.
to adopt jointly with his spouse a
th
relative within the 4 degree of The use of the word “shall” in the above-quoted
consanguinity or affinity, provision means that joint adoption by the husband
c. He is married to a Filipino and seeks and the wife is mandatory. This is in consonance
to adopt the legitimate or with the concept of joint parental authority over
illegitimate child of his filipino the child which is the ideal situation. As the child to
spouse. be adopted is elevated to the level of a legitimate
child, it but natural to require the spouses to adopt
Q: How may a guardian adopt his ward? jointly. The rule also ensures harmony between the
spouses.
A: A guardian may only adopt his ward after
termination of guardianship and clearance of his The law is clear. There is no room for ambiguity.
financial accountabilities. Monina, having remarried at the time the petitions
for adoption were filed, must jointly adopt. Since
Q: What is the rule when a person seeking to the petitions for adoption were filed only by
adopt has a spouse? Monina herself, without joining her husband,
Olario, the trial court was correct in denying the
A: GR: Such person must adopt with his spouse petitions for adoption on this ground. (In Re:
jointly. The general rule is that husband and wife Petition for Adoption of Michelle P. Lim, In Re:
shall jointly adopt. Petition for Adoption of Michael Jude P. Lim,
Monina P. Lim, G.R. Nos. 168992-93, May 21, 2009)
XPNs:
1. One spouse seeks to adopt the legitimate Q: Is joint adoption still needed when the
child of the other; adoptees are already emancipated?
2. One spouse seeks to adopt his own
illegitimate child; A: Yes. Even if emancipation terminates parental
3. Spouses are legally separated. authority, the adoptee is still considered a
legitimate child of the adopter with all the rights of
Q: Spouses Primo and Monica Lim, childless, were a legitimate child such as: (1) to bear the surname
entrusted with the custody of two minor children, of the father and the mother; (2) to receive support
the parents of whom were unknown. Eager of from their parents; and (3) to be entitled to the
having children of their own, the spouses made it legitime and other successional rights. Conversely,
appear that they were the children’s parents by the adoptive parents shall, with respect to the
naming them Michelle P. Lim and Michael Jude adopted child, enjoy all the benefits to which
Lim. biological parents are entitled such as support and
successional rights.
Subsequently, Monina married Angel Olario after
Primo’s death of her husband. She decided to ADOPTEE
adopt the children by availing the amnesty given
under R.A. 8552 to those individuals who Q: Who may be adopted?
simulated the birth of a child. She filed separate
petitions for the adoption of Michelle, then 25 A:
years old and Michael, 18. Both Michelle and 1. Any person below 18 of age who has been
Michael gave consent to the adoption. administratively or judicially declared available
for adoption;
The trial court dismissed the petition and ruled 2. Legitimate child of one spouse by the other
that Monina should have filed the petition jointly spouse;
with her new husband. Monina, in a Motion for 3. Illegitimate child by a qualified adopter to
Reconsideration argues that mere consent of her improve the status of said child to that of
husband would suffice and that joint adoption is legitimacy;
not needed, for the adoptees are already 4. Person of legal age, if prior to the adoption,
emancipated. said person has been consistently considered
and treated by adopters as their child since
Is the trial court correct in dismissing the petitions minority;
for adoption? 5. Child whose adoption has been previously
rescinded;
65
6. Child whose biological parents have died may be terminated and vested in the adoptive
provided no proceedings have been initiated parents. In this case, since the minors' paternal
within 6 months from time of death. grandmother had taken custody of them, her
consent should have been secured instead in view
Q: What is the definition of “child”? of the absence of the biological mother. This is so
under Sec. 9 (b) of R.A. 8552, otherwise known as
A: A child is any person below 18 years old. the Domestic Adoption Act of 1998. Diwata failed in
this respect, thus necessitating the dismissal of her
Q: What is the definition of “child legally free for petition for adoption. (Landingin v. Republic, G.R.
adoption”? No. 164948, June 27, 2006)
A: A child voluntarily or involuntarily committed to Q: On what grounds may an adoptee seek the
the DSWD, freed of his biological parents, rescission of the adoption?
guardians, adopters in case of rescission.
A:
Q: Whose written consent is necessary for 1. Attempt on the life of the adoptee;
adoption? 2. Sexual assault or violence;
3. Abandonment and failure to comply with
A: parental obligations;
1. Adoptee, if 10 years of age and over; 4. Repeated physical or verbal maltreatment by
2. Biological parents of the child, if known or the the adopter.
legal guardian, or the proper government
instrumentality which has legal custody of the Q: May the adopter seek the rescission of the
child; adoption?
3. Legitimate children of the adopter, if 10 years
old or over; A: No. Adopter cannot rescind but he may disinherit
4. Illegitimate children of the adopter, if 10 years the adoptee.
old or over and living with him;
5. Spouse of the adopted, if married; Q: What are the grounds by which an adopter may
6. Spouse of the adopter, if married. disinherit adoptee?
Q: Bernadette filed a petition for adoption of the A:

three minor children of her late brother, Ian. She 1. Groundless accusation against the testator of a
alleged that when her brother died, the children crime punishable by 6 years or more
were left to the care of their paternal imprisonment;
grandmother, Anna, who went to Italy. This 2. Found guilty of attempt against the life of the
grandmother died however, and so she filed the testator, his/her spouse, descendant or
petition for adoption. The minors gave their ascendant;
written consent to the adoption and so did all of 3. Causes the testator to make changes or
her own grown-up children. The trial court granted changes a testator’s will through violence,
the decree of adoption even though the written intimidation, fraud or undue influence;
consent of the biological mother of the children 4. Maltreatment of the testator by word or deed;
was not adduced by Bernadette. Was the trial 5. Conviction of a crime which carries a penalty
court correct in granting the decree of adoption? of civil interdiction;
6. Adultery or concubinage with the testator’s
A: No. The rule is adoption statutes must be wife;
liberally construed in order to give spirit to their 7. Refusal without justifiable cause to support
humane and salutary purpose which is to uplift the the parent or ascendant;
lives of unfortunate, needy or orphaned children. 8. Leads a dishonorable or disgraceful life.
However, the discretion to approve adoption
proceedings on the part of the courts should not to Q: What are the effects of adoption?
be anchored solely on those principles, but with
due regard likewise to the natural rights of the A:
parents over the child. The written consent of the 1. GR: Severance of all legal ties between the
biological parents is indispensable for the validity of biological parents and the adoptee and the
the decree of adoption. Indeed, the natural right of same shall then be vested on the adopters
a parent to his child requires that his consent must
be obtained before his parental rights and duties XPN: In cases where the biological parent is
66 CIVIL LAW TEAM

the spouse of the adopter; A: No, there is no legal obstacle to the legal
adoption of Amy by Andrew. While a person of age
2. Deemed a legitimate child of the adopter; may not be adopted, Amy falls within two
3. Acquires reciprocal rights and obligations exceptions: (1) she is an illegitimate child and she is
arising from parent-child relationship; being adopted by her illegitimate father to improve
4. Right to use surname of adopter; her status; and (2) even on the assumption that she
5. In legal and intestate succession, the adopters is not an illegitimate child of Andrew, she may still
and the adoptee shall have reciprocal rights of be adopted, although of legal age, because she has
succession without distinction from legitimate been consistently considered and treated by the
filiation. However, if the adoptee and his/her adopter as his own child since minority. In fact, she
biological parents had left a will, the law on has been living with him until now.
testamentary succession shall govern.
There is a legal obstacle to the adoption of Sandy by
Q: State the effects of rescission of the adoption in Andrew and Elena. Andrew and Elena cannot adopt
the Domestic Adoption Act of 1998 (RA 8552). jointly because they are not married.
A: Q: In his old age, can Andrew be legally entitled to

1. If adoptee is still a minor or is incapacitated – claim support from Amy, Jon, Ryan, Vina, Wilma
Restoration of: and Sandy assuming that all of them have the
a. Parental authority of the adoptee’s means to support him?
biological parents, if known’ or
b. Legal custody of the DSWD; A: Andrew can claim support from them all, except
2. Reciprocal rights and obligations of the from Sandy, who is not his child, legitimate,
adopters and adoptee to each other shall be illegitimate or adopted.
extinguished;
3. Court shall order the civil registrar to cancel Q: Can Amy, Jon, Ryan, Vina, Wilma and Sandy
the amended certificate of birth of the legally claim support from each other?
adoptee and restore his/her original birth
certificate; A: Amy, Jon, Ryan, Vina and Wilma can ask support
4. Succession rights shall revert to its status prior from each other because they are half-blood
to adoption, but only as of the date of brothers and sisters, and Vina and Wilma are full-
judgment of judicial rescission; blood sisters (Art. 195 [5], Family Code), but not
5. Vested rights acquired prior to judicial Sandy who is not related to any of them.
rescission shall be respected.
Q: Can Jon and Jane legally marry?
Q: Despite several relationships with different
women, Andrew remained unmarried. His first A: Jon and Jane can legally marry because they are
relationship with Brenda produced a daughter, not related to each other. Jane is not a daughter of
Amy, now 30 years old. His second, with Carla, Andrew. (2008 Bar Question)
produced two sons: Jon and Ryan. His third, with
Donna, bore him two daughters: Vina and Wilma. B. INTERCOUNTRY ADOPTION ACT OF 1995 (RA
His fourth, while Elena, bore him no children 8043)
although Elena has a daughter Jane, from a
previous relationship. His last, with Fe, produced ADOPTER
no biological children but they informally adopted
without court proceedings, Sandy, now 13 years Q: Who may adopt?
old, whom they consider as their own. Sandy, now
13 years old, whom they consider as their own. A:
Sandy was orphaned as a baby and was entrusted 1. Any alien;
to them by the midwife who attended to Sandy’s 2. Filipino citizen, both permanently residing
birth. All the children, including Amy, now live abroad.
with Andrew in his house.
Q: What are the qualifications needed for a
Is there any legal obstacle to the legal adoption of Filipino or alien to adopt?
Amy by Andrew? To the legal adoption of Sandy
by Andrew and Elena? A:
1. At least 27 years old and 16 years older than
the child to be adopted at the time of the
67
application unless adopter is the parent by ADOPTEE

nature of the child;
2. If married, his spouse must jointly file for Q: Who may be adopted?
adoption;
3. Has the capacity to act or assume all rights and A: Only a legally free child may be adopted provided
responsibilities of parental authority; the following are submitted:
4. Not been convicted of a crime involving moral 1. Child study;
turpitude; 2. Birth certificate/ foundling certificate;
5. Eligible to adopt under his national law; 3. Deed of Voluntary Commitment/Decree
6. In a position to provide for proper care and of Abandonment/Death Certificate of
support and give necessary moral values; parents;
7. Agrees to uphold the basic rights of the child 4. Medical evaluation or history;
mandated by the UN convention of rights of 5. Psychological evaluation;
Child and the Philippine Laws; 6. Recent photo;
8. Comes from a country with which the
Philippines has diplomatic relations and Q: What is the definition of “child”?
adoption is allowed under his national law;
9. Possesses all the qualifications and none of the A: A child is any person below 15 years old.
disqualifications under the law or other
applicable Philippine laws. Note: No child shall be matched to a foreign adoptive
family unless it is satisfactorily shown that the child
Q: Sometime in 1990, Sarah, born a Filipino but by cannot be adopted in the Philippines
then a naturalized American citizen, and her
American husband Sonny Cruz, filed a petition in GR: There shall be no physical transfer of a
the Regional Trial Court of Makati, for the voluntarily committed child earlier than 6
adoption of the minor child of her sister, a Filipina, months from the date of execution of Deed of
can the petition be granted? Voluntary Commitment.
A: It depends. If Sonny and Sarah have been XPN:

residing in the Philippines for at least 3 years prior 1. Adoption by relative;
to the effectivity of R.A. 8552, the petition may be 2. Child with special medical condition.
granted. Otherwise, the petition cannot be granted
because the American husband is not qualified to INTER-COUNTRY ADOPTION BOARD
adopt.
Q: What is the function of Inter-Country Adoption
While the petition for adoption was filed in 1990, it Board?
was considered refiled upon the effectivity of R.A.
8552. This is the law applicable, the petition being A: The Inter Country Adoption Board acts as the
still pending with the lower court. Under the Act, central authority in matters relating to inter-
Sarah and Sonny must adopt jointly because they country adoption. The Board shall ensure that all
do not fall in any of the exceptions where one of the possibilities for adoption of the child under the
them may adopt alone. When husband and wife Family Code have been exhausted and that the
must adopt jointly, the Supreme Court has held in a inter-country adoption is in the best interest of the
line of cases that both of them must be qualified to child
adopt. While Sarah, an alien, is qualified to adopt,
for being a former Filipino citizen who seeks to Q: What is trial custody?
th
adopt a relative within the 4 degree of
consanguinity or affinity, Sonny, an alien, is not A: It is the pre-adoptive relationship which ranges 6
qualified to adopt because he is neither a former months from the time of the placement. It starts
Filipino citizen nor married to a Filipino. One of from the actual transfer of the child to the applicant
them not being qualified to adopt, their petition has who, as actual custodian, shall exercise substitute
to be denied. However, if they have been residents parental authority over the person of the child
of the Philippines 3 years prior to the effectivity of
the Act and continues to reside here until the Note:
decree of adoption is entered, they are qualified to 1. If unsatisfactory – the relationship shall be
adopt the nephew of Sarah under Sec 7(b) thereof, suspended by the board and the foreign
and the petition may be granted. (2000 Bar adoption agency shall arrange for the child’s
voluntary care.
Question)
2. If satisfactory – the Board shall submit the
68 CIVIL LAW TEAM

written consent of the adoption to the 1. Legal – required or given by law;

foreign adoption agency within 30 days after 2. Judicial – required by court; May be:
the request of the latter’s request. a. Pendente lite
b. In a final judgment
IX. SUPPORT
3. Conventional – by agreement.
Q: What is support?
Q: What are the rules on support of illegitimate
A: It comprises everything indispensable for children of either spouse?
sustenance, dwelling, clothing, medical attendance
and transportation, in keeping with the financial A: It depends upon the property regime of the
capacity of the family, including the education of spouses.
the person entitled to be supported until he 1. ACP:
completes his education or training for some a. Exclusive property of the debtor
profession, trade or vocation, even beyond the age spouse shall be liable.
of majority. (Art. 194, FC) b. If the exclusive property is
insufficient, the community is liable.
Q: What are the characteristics of support?
Note: The same being considered as
A: PRIM PEN advance made by the absolute
1. Personal community to said spouse.
2. Reciprocal on the part of those who are
by law bound to support each other 2. CPG:
3. Intransmissible a. Property of the debtor-spouse is
4. Mandatory liable.
5. Provisional character of support judgment b. If the debtor spouse has no property
6. Exempt from attachment or execution or the same is insufficient, it may be
7. Not subject to waiver or compensation enforced against the conjugal
property.
A. WHAT IT COMPRISES
B. WHO ARE OBLIGED
Q: What comprises support?
Q: Who are persons obliged to support each
A: Support comprises of everything indispensable other?
for: SDC MET
1. Sustenance A:
2. Dwelling 1. Spouses;
3. Clothing 2. Legitimate ascendants & descendants;
4. Medical attendance 3. Parents and their legitimate children, and the
5. Education – includes schooling or training legitimate and illegitimate children of the
for some profession, trade or vocation, latter;
even beyond the age of majority 4. Parents and their illegitimate children, and the
6. Transportation – includes expenses going legitimate and illegitimate children of the
to and from school, or to from place of latter;
work 5. Legitimate brothers and sisters whether full or
half-blood. (Art. 195, FC)
Q: What are the rules on the amount of support?
Q: Are brothers and sisters not legitimately related
A: Amount of support shall be in proportion to the likewise bound to support each other?
resources or means of the giver and to the
necessities of the recipient. It shall be increased or A: GR: Yes, whether full or half-blood.
reduced proportionately, according to the
increase/reduction of necessities of the recipient XPN: When the need for support of the brother
and the resources of the person obliged. or sister, being of age, is due to a cause
imputable to the claimant’s fault or negligence.
Q: What are the different kinds of support? In this case, the illegitimate brother or sister has
no right to be supported.
A:
69
Q: What are the sources of support?
A:
SOURCES OF SUPPORT
During Marriage Pending Litigation After Litigation
Spouses
ACP
GR: From the community property assets

XPN: If Art 203 applies, that if the claimant
GR: No obligation to support
spouse is the guilty spouse, he/she is not
entitled to support.
From the community XPN: If there is Legal Separation.
property In which case, the court may
CPG
require the guilty spouse to give
Support is considered an advance of such
support
spouses’ share.
*The rule does not apply if the spouses are

under ACP based on Art 153.
Children
From the community From the separate properties of
From the community property
property the spouses
Q: To whom does the liability to support devolve support do not have the means to do so. Here,
upon? since it has been shown that the girls' father,
Federico, had no means to support them, then
A: In the following order: S-DAB Francisco, as the girls’ grandfather, should then
1. Spouse extend the support needed by them.
2. Descendants in the nearest degree
3. Ascendants in the nearest degree Note: The second option in Art. 204 of the FC, that of
4. Brothers and sisters taking in the family dwelling the recipient, is unavailing
in this case since the filing of the case has evidently
Q: Belen, in behalf of her minor children, made the relations among the parties bitter and
instituted a petition for declaration of legitimacy unpleasant. (Mangonon, et al. v. CA, et al.,G.R. No.
and support against Federico, their alleged father, 125041, Jun. 30, 2006)
and Francisco, father of Federico. It appears that
Q: Marcelo and Juana called Dr. Arturo to their
the marriage of the two was annulled due to the
house to render medical assistance to their
minority of Federico. May Francisco be ordered to
daughter-in-law who was about to give birth to a
give support?
child. He performed the necessary operation.
When Dr. Arturo sought payment, Marcelo and
A: Yes. There appears to be no dispute that the
Juana refused to pay him without giving any good
children are indeed the daughters of Federico by
reason. Who is bound to pay the bill for the
Belen. Under Art. 199 of the FC, “Whenever two or
services rendered by Arturo?
more persons are obliged to give support, the
liability shall devolve upon the following persons in
A: Her husband, not her father and mother- in-law.
the following order herein provided:
The rendering of medical assistance in case of
1. The spouse;
illness is comprised among the mutual obligations
2. The descendants in the nearest degree;
to which the spouses are bound by way of mutual
3. The ascendants in the nearest degree:
support. (Arts. 142 and 143.) If every obligation
and
consists in giving, doing or not doing something
4. The brothers and sisters.
(Art. 1088), and spouses are mutually bound to
support each other, there can be no question but
The obligation to give support rests principally on
that, when either of them by reason of illness
those more closely related to the recipient.
should be in need of medical assistance, the other
However, the more remote relatives may be held to
is under the unavoidable obligation to furnish the
shoulder the responsibility should the claimant
necessary services of a physician in order that
prove that those who are called upon to provide
70 CIVIL LAW TEAM

health may be restored, and he or she may be freed A: Amount shall be in proportion to the resources
from the sickness by which life is jeopardized. or means of the giver and to the necessities of the
recipient (Art. 201, FC).
C. SUPPORT DURING MARRIAGE LITIGATION
Q: May the amount of support be reduced or
Q: What is the source of support during the increased?
pendency of legal separation, annulment and
declaration of nullity of marriage proceedings? A: Yes. Support may be decreased or increased
proportionately according to the reduction or
A: The spouses and their common children shall be increase of the necessities of the recipient and the
supported from the properties of the absolute resources of the person obliged to furnish the same
community or the conjugal partnership. (Art. 202, FC).
Q: Are the spouses still obliged to render mutual E. WHEN DEMANDABLE

support after final judgment granting the petition?
Q: When is the obligation to give support
A: GR: No. The obligation of mutual support ceases demandable?
after final judgment.
A: From the time the person who has a right to
XPN: In case of legal separation the Court may receive support needs it for maintenance.
order that the guilty spouse shall give support
to the innocent one. Q: When shall support be paid?
Q: H and W are living separately. Both had been A: Only from the date of judicial or extrajudicial
unfaithful to each other. After their separation, H demand.
had been giving money to W for her support.
Subsequently, W brought an action against H for Note: The right to support does not arise from
separate maintenance. Will the action prosper? mere fact of relationship but from imperative
necessity without which it cannot be demanded.
A: Yes. The principle of in pari delicto is applicable. The law presumes that such necessity does not
Both are at fault. Consequently, H cannot avail of exist unless support is demanded.
himself of the defense of adultery of W. Besides,
the act of H in giving money to W is implied F. OPTIONS
condonation of the adultery of W. (Amacen v.
Baltazar, L-10028, May 28, 1958)
Q: What are the options given to persons giving
support?
Q: May the woman oblige her husband to pay the
attorney’s fee for the lawyer who defended her in
A:
a criminal action for adultery instituted against her
1. To Give a fixed monthly allowance; or
by the husband?
2. To Receive and maintain the recipient in the
giver’s home or family dwelling. (Art. 204, FC)
A: It depends.
Q: What if support is given by a stranger without
She may, in case of acquittal. Expenses such as
the knowledge of the person obliged to give
judicial costs and attorney’s fees incurred by the
support?
wife to defend herself against unjust prosecution
are chargeable as support against the husband.
A: GR: The stranger shall have the right of
However, the rule is different in case of conviction.
reimbursement.
Adultery on the part of the wife, when proved, is a
valid defense against an action for support.
XPN: Unless it appears that he gave it without
(Quinatana v. Lerma, G.R. No. L-7426, Feb. 5, 1913)
any intention of being reimbursed. (Art. 206,
FC)
D. AMOUNT
Q: What if the person obliged to give support
Q: What is the amount of support?
unjustly refuses or fails to give support when
urgently needed?
71
A: Any third person may furnish support to the extra-judicial, from them. Rule on his contention.
needy individual, with a right of reimbursement.
(Art. 207, FC) A: No. Edward could not possibly expect his
daughters to demand support from him considering
G. ATTACHMENT their tender years at the time that he abandoned
them. In any event, the mother of the girls had
Q: Is the right to receive support subject to made the requisite demand for material support
attachment or execution? although this was not in the standard form of a
formal written demand. Asking one to give support
A: GR: No. The right to receive support and any owing to the urgency of the situation is no less a
money or property obtained as support cannot be demand just because it came by way of a request or
attached no be subject to execution to satisfy any a plea. (Lacson v. Lacson, et al., G.R. No. 150644,
judgment against the recipient. Aug. 28, 2006)
XPN: In case of contractual support or support Q: Noel helped Lea by extending financial help to
given by will, the excess in amount beyond support Lea’s children with Edward. May Noel
that required for legal support shall be subject seek reimbursement of his contributions? If yes,
to levy on attachment or execution. from whom may he do so?
Note: Contractual support shall be subject to A: Yes. Pursuant to Art. 207 of the FC, Noel can
adjustment whenever modification is necessary rightfully exact reimbursement from Edward. This
due to changes in circumstances beyond the provision reads that "[W]hen the person obliged to
contemplation of the parties support another unjustly refuses or fails to give
support when urgently needed by the latter, any
Q: Jurisdictional questions may be raised at any third person may furnish support to the needy
time. What is the exception with respect to the individual, with right of reimbursement from the
provisional character of judgment for support and person obliged to give support." The resulting
the application of estoppels? juridical relationship between the Edward and Noel
is a quasi-contract, an equitable principle enjoining
A: Judgment for support is always provisional in one from unjustly enriching himself at the expense
character. Res Judicata does not apply. The lower of another. (Lacson v. Lacson, et al., GR No. 150644,
court cannot grant a petition based on grounds, Aug. 28, 2006)
such as bigamy, not alleged in the petition. Such a
decision based on grounds not alleged in the Q: Fe and her son Martin sued Martin’s alleged
petition is void on the ground of no jurisdiction. biological father Arnel for support. Arnel denied
having sired Martin arguing that his affair and
However, if the lower court’s void decision is not intimacy with Fe had allegedly ended in long
assailed on appeal which dealt only with the matter before Martin’s conception. As a result, Fe and
of support, the losing party is now estopped from Martin moved for the issuance of an order
questioning the declaration of nullity and the SC will directing all the parties to submit themselves to
not undo the judgment of the RTC declaring the DNA paternity testing. The said motion was
marriage null and void for being bigamous. granted by the court. Did the order of the court
convert the complaint for support to a petition for
It is axiomatic that while a jurisdictional question recognition?
may be raised at any time, this however admits of
an exception where estoppel has supervened. (Lam A: The assailed order did not convert the action for
v. Chua, G.R. No. 131286, Mar. 18, 2004) support into one for recognition but merely allowed
Fe to prove their cause of action. But even if the
Q: Edward abandoned his legitimate children order effectively integrated an action to compel
when they were minors. After 19 years from the recognition with an action for support, such was
time Edward left them, they, through their valid and in accordance with jurisprudence. In
mother, finally sued him for support, which the Tayag v. Court of Appeals (209 SCRA 665), the
court granted. The court ordered him to pay 2M Supreme Court allowed the integration of an action
pesos as support in arrears. to compel recognition with an action to claim one's
inheritance. A separate action will only result in a
Edward assails the grant of the support in arrears multiplicity of suits. Furthermore, the declaration of
as erroneous since under Art. 203 of the FC, there filiation is entirely appropriate to the action for
was never any demand for support, judicial or
72 CIVIL LAW TEAM

support. (Agustin v. CA, G.R. No. 162571, June 15, 4. Purely personal;
2005).
Note: It cannot be exercised through agents.
Q: Can DNA testing be ordered in a proceeding for
support without violating the constitutional right 5. Temporary.
against self-incrimination?
Q: What are the rules as to the exercise of
A: Yes. In People v. Yatar(428 SCRA 504), the parental authority?
Supreme Court had already upheld the
constitutionality of compulsory DNA testing and the A:
admissibility of the results thereof as evidence. 1. The father and the mother shall jointly exercise
Moreover, it has mostly been in the areas of legality parental authority over the persons of their
of searches and seizure and in the infringement of common children.
privacy of communication where the constitutional
right to privacy has been critically at issue. Note: In case of disagreement, the father’s
decision shall prevail unless there is a judicial
If, in a criminal case, an accused whose very life is order to the contrary.
at stake can be compelled to submit to DNA testing,
so much more so may a party in a civil case, who 2. If the child is illegitimate, parental authority is
does not face such dire consequences, be likewise with the mother.
compelled. DNA testing and its results is now
acceptable as object evidence without running Q: What is “visitation rights”?
afoul self-incrimination rights of a person. (Agustin
v. CA,GR No. 162571, Jun. 15, 2005) A: It is the right of access of a noncustodial parent
to his or her child or children
X. PARENTAL AUTHORITY
Q: Carlitos Silva and Suzanne Gonzales had a live-
A. GENERAL PROVISIONS in relationship. They had two children, namely,
Ramon Carlos and Rica Natalia. Silva and Gonzales
Q: What is patria potestas? eventually separated. They had an understanding
that Silva would have the children in his company
A: The sum total of the rights of parents over the on weekends. Silva claimed that Gonzales broke
persons and property of their unemancipated child. that understanding on visitation rights. Hence,
Silva filed a petition for custodial rights over the
Q: What does parental authority include? children before the RTC. The petition was opposed
by Gonzales who claimed that Silva often engaged
A: It shall include: in gambling and womanizing which she feared
1. Caring for and rearing of such children for could affect the moral and social values of the
civic consciousness and efficiency; children. In the meantime, Suzanne had gotten
2. Development of their moral, mental and married to a Dutch national. She eventually
physical character and well-being. immigrated to Holland with her children Ramon
Carlos and Rica Natalia. Can Silva be denied
Q: What are the characteristics of parental visitation rights?
authority?
A: GR: No.
A: Jo-Na-RePuTe
1. Jointly exercised by the father and XPN: If the fears and apprehensions were
mother; unfounded as to the father’s corrupting
2. Natural right and duty of the parents; influence over the children and if it is proven
3. Cannot be Renounced, transferred or therefore that indeed the father is a negative
waived; influence because of reasons like immorality,
drunkenness, etc. on the children, the court,
XPN: In cases authorized by law such as in taking into consideration the best interest of
cases of adoption, guardianship and the children, can deny his petition for the
surrender to a children's home or an exercise of his visitation rights. (Silva v. CA,
orphan institution (Santos vs. CA, G.R. No. G.R. No. 114742, July 17, 1997)
113054, March 16, 1995).
Q: What is meant by the parental preference rule?
73
immorality of the mother who, the husband

A: The natural parents, who are of good character asserted, was a lesbian. However, the trial court
and who can reasonably provide for the child are citing Art. 213 of the FC, denied Crisanto's prayer
ordinarily entitled to custody as against all persons. for temporary custody of his son, there having
been no compelling reason to so order it. Was the
Q: Who shall exercise parental authority in case of trial court correct in denying Crisanto’s prayer for
absence, death, remarriage of either parent or temporary custody?
legal or de facto separation of parents?
A: Yes. The petitioner failed to overcome the so-
A: called "tender-age presumption" rule under Art.
a. Absence or death of either parent – parent 213 of the FC. There was no compelling evidence of
present shall continue exercising parental the mother's unfitness. 'Sexual preference or moral
authority laxity alone does not prove parental neglect or
b. Remarriage of either parent – it shall not affect incompetence – to deprive the wife of custody, the
the parental authority over the children, unless husband must clearly establish that her moral
the court appoints another person to be the lapses have had an adverse effect on the welfare of
guardian of the person or property of the the child or have distracted the errant spouse from
children. (Art. 213, FC) exercising proper parental care.
c. Legal or de facto separation of parents – the
parent designated by the court. Note: The general rule that children less than seven
years of age shall not be separated from the mother
Q: What shall the Court take into account in the finds its raison d'etrein the basic need of minor
designation of the parent? children for their mother's loving care. This is
predicated on the "best interest of the child" principle
A: All relevant considerations, especially the choice which pervades not only child custody cases but also
of the child over seven years of age except when those involving adoption, guardianship, support,
personal status and minors in conflict with the law.
the parent chosen is unfit.
(Pablo-Gualberto v. Gualberto, G.R. No. 154994/G.R.
No. 156254, Jun. 28, 2005)
Q: What is the rule as to the custody of a child
below 7 years of age?
Q: In a petition for habeas corpus which he filed
before the Court of Appeals, Joey sought custody
A: GR: No child below 7 years of age shall be
of his minor son from his former live-in partner,
separated from the mother
Loreta. Joey alleged that the child's mother was
abroad most of the time and thus, he should be
XPN: When the court finds compelling reasons
given joint custody over their son. The CA however
to consider otherwise
denied the petition, and on the basis of Art. 213,
par (2) of the FC, awarded custody of the child in
Note: The paramount consideration in matters of
favor of the mother. Was the CA correct in denying
custody of a child is the welfare and well-being of the
child
Joey’s petition for habeas corpus for the custody
of his minor son?
Q: If the parents are separated de facto, who
between them has custody over their A: Yes. Under Art. 176 of the FC, parental authority
child/children? over an illegitimate child is vested solely in the
mother, and this is true notwithstanding that the
A: In the absence of a judicial grant of custody to child has been recognized by the father as his
one parent, both are entitled to the custody of their offspring. At most, such recognition by the father
child/children. would be a ground for ordering the latter to give
support to, but not custody of, the child (David v.
The parent who has been deprived of the rightful Court of Appeals, 250 SCRA 82). Custody over the
custody of the child may resort to the remedy of minor in this case was therefore awarded correctly
habeas corpus. (Salientes v. Abanilla, G.R. No. to the mother, and this is all the more so in view of
162734, Aug. 29, 2006) Art. 213 of the FC which lays down the Maternal
Preference Rule. There is also no showing that Joey
Q: The petition for declaration of nullity filed by was able to show proof of any compelling reason to
Crisanto against his wife included a prayer for wrest from the mother parental authority over their
custody pendente lite of their 4-year old son. The minor child.
supplication for custody was based on the alleged
Note: However, the CA erred in applying Sec. 6, Rule
74 CIVIL LAW TEAM

99 of the Rules of Court. This provision applies only the whereabouts of minors to seek redress from
when the parents of the child are married to each family courts whose writs are enforceable only
other but are separated either by virtue of a decree of within their respective territorial jurisdiction. This
legal separation or because they are leaving separately lack of recourse could not have been the legislative
de facto. In this case, the child's parents were never intent, and thus R.A. 8369 did not effectively divest
married. Hence, the portion of the CA decision the High Court and Court of Appeals of their
allowing the child, upon reaching the age of ten, to jurisdiction over habeas corpus cases involving
choose which parent to live, should be deleted
custody of minors. The primordial consideration
therefrom. (Briones v. Miguel, et al., G.R. No. 156343.
always is the welfare and best interest of the child.
Oct. 18, 2004)
As it stands then, the RTCs, thru the appropriately
designated Family Court branches, the CA and the
Q: In a petition for habeas corpus that was filed by
SC have concurrent jurisdiction over such petitions.
Loran against his estranged wife, as well as against
Since in this case, the petition was first filed before
his parents-in-law whom he alleged were
the RTC of Quezon City, then the latter acquired
unlawfully restraining him from having custody of
jurisdiction over the same to the exclusion of the
his child, the trial court issued an order directing
Court of Appeals and the Supreme Court. To hold
the aforesaid persons to appear in court and
otherwise would be to risk instances where courts
produce the child in question and to show cause
of concurrent jurisdiction might issue conflicting
why the said child should not be discharged from
orders. (Reyes-Tabujara v. CA, et al., GR No.
restraint. Does trial court's order run counter to
172813, July 20, 2006)
Art.213 of the FC?
A: No. The assailed order of the trial court did not B. SUBSTITUTE AND SPECIAL PARENTAL
grant custody of the minor to any of the parties but AUTHORITY
was merely a procedural directive addressed to the
petitioners for them to produce the minor in court Q: What is the order of substitute parental
and explain why they are restraining his liberty. authority?
Moreover, Art. 213 of the FC deals with the
adjudication of custody and serves as a guideline A: GOC
for the proper award of-custody by the court. While 1. Surviving Grandparent;
the petitioners can raise it as a counter argument in
the custody suit, it may not however be invoked by Note: The law considers the natural love of
a parent to outweigh that of the
them to prevent the father from seeing the child.
grandparents, such that only when the
parent present is shown to be unfit or
Note: Habeas corpus may be resorted to in cases
unsuitable may the grandparents exercise
where rightful custody is withheld from a person
substitute parental authority (Santos v. CA,
entitled thereto. Under Art. 211 of the FC, both
G.R. No. 113054, March 16, 1995)
parents in this case have joint parental authority over
their child and consequently joint custody over him.
Further, although the couple is separated de facto, the 2. Oldest brother or sister, over 21 years;
issue of custody has yet to be adjudicated by the court. XPN: unfit or disqualified
In the absence of a judicial grant of custody, both
parents are still entitled to the custody of their child. 3. Actual Custodian over 21 year;
(Salientes, et al. v. Abanilla, et al.,G.R. No. 162734, XPN: unfit or disqualified (Art. 216, FC)
Aug. 29, 2006)
Q: Bonifacia Vancil, a US citizen, is the mother of
Q: The tug of war over custody of their minor son Reeder C. Vancil, a Navy serviceman of USA who
resulted in Ivy's filing of a petition for habeas died in the said country on December 22, 1986.
corpus against Ernesto before the RTC. The trial During his lifetime, Reeder had two children
court then granted temporary custody over the named Valerie and Vincent by his common-law
child to Ernesto. Who has jurisdiction over habeas wife, Helen G. Belmes. Bonifacia obtained a
corpus cases? favorable court decision appointing her as legal
and judicial guardian over the persons and estate
A: The RTC. Both the Supreme Court and the Court of Valerie Vancil and Vincent Vancil Jr. She alleged
of Appeals still retain jurisdiction over habeas that Helen was morally unfit as guardian of Valerie
corpus cases involving minors despite the passage considering that Helen’s live-in partner raped
of Rep. Act No. 8369 (The Family Courts Act of Valerie several times. Can Bonifacia exercise
1997) - the law conferring upon family courts substitute parental authority over Valerie and
exclusive jurisdiction over such cases. SC had earlier Vincent?
ruled that it would be difficult for persons seeking
75
A: Bonifacia, as the surviving grandparent, can Q: What is the rule on the parent’s duty of
exercise substitute parental authority only in case representation?
of death, absence or unsuitability of Helen.
Considering that Helen is very much alive and has A: GR: Parents are duty-bound to represent their
exercised continuously parental authority over unemancipated children in all matters affecting
Vincent, Bonifacia has to prove, in asserting her their interests;
right to be the minor’s guardian, Helen’s
unsuitability. Bonifacia, however, has not proffered Note: This duty extends to representation in court
convincing evidence showing that Helen is not litigations.
suited to be the guardian of Vincent. Bonifacia
merely insists that Helen is morally unfit as XPN: A guardian ad litem may be appointed by
guardian of Valerie considering that her live-in the court to represent the child when the best
partner raped Valerie several times. (But Valerie, interest of the child so requires.
being now of major age, is no longer a subject of
this guardianship proceeding.) Q: What is the scope of the parent’s right to
discipline the child?
Even assuming that Helen is unfit as guardian of
minor Vincent, still Bonifacia cannot qualify as a A: Persons exercising parental authority may:
substitute guardian. She is an American citizen and 1. Impose discipline on minor children as
a resident of Colorado. Obviously, she will not be may be required under the
able to perform the responsibilities and obligations circumstances.
required of a guardian. In fact, in her petition,
Bonifacia admitted the difficulty of discharging the 2. Petition the court for the imposition of
duties of a guardian by an expatriate, like her. To be appropriate disciplinary measures upon
sure, she will merely delegate those duties to the child, which include the commitment
someone else who may not also qualify as a of the child in entities or institutions
guardian. (Vancil vs. Belmes, G.R. No. 132223, June engaged in child care or in children’s
19, 2001) homes duly accredited by the proper
government agency.
C. EFFECTS OF PARENTAL AUTHORITY UPON THE
PERSON OF THE CHILDREN Note: Such commitment must not exceed 30
days.
Q: What are the rules regarding the right to
custody over the child? Q: What are the limitations on the exercise of the
right to discipline the child and what are its
A: GR: Parents are never deprived of the custody consequences?
and care of their children.
A: Persons exercising such right is not allowed to:
XPNS: 1. Treat the child with excessive harshness
1. For cause or cruelty; or
2. Inflict corporal punishment.
Note: the law presumes that the child’s
welfare will be best served in the care and Otherwise, the following are its consequences:
control of his parents. 1. Parental authority may be suspended;
2. Parent concerned may be held criminally
2. If in consideration of the child’s welfare or liable for violation of RA 7160 (Special
well-being, custody may be given even to Protection of Children against Abuse,
a non-relative. Exploitation and Discrimination Act)
Q: What is the basis for the duty to provide Q: To whom may special parental authority be
support? granted?
A:
A: Family ties or relationship, not parental 1. School, its administrators and teachers;
authority. 2. Individual entity or institution engaged in child
care.
Note: The obligation of the parents to provide support
is not coterminous with the exercise of parental Q: What are the distinctions between substitute
authority. parental authority and special parental authority?
76 CIVIL LAW TEAM

A:
A: ADVENTITIOUS PROSFECTITIOUS
SUBSTITUTE PARENTAL SPECIAL PARENTAL
1. Earned or
AUTHORITY AUTHORITY
acquired by the
Exercised in case of: 1. Exercised child through his 1. Property
DAU concurrently with work or industry given by the
the parental by onerous or parents to the
1. Death, authority of the gratuitous title; child for the
2. Absence, or parents; 2. Owned by the latter to
3. Unsuitability of 2. Rests on the theory child; administer;
parents. that while the child 3. Child is also the 2. Owned by the
is in the custody of usufructuary, but parents;
the person the child’s use of 3. Parents are
exercising special the property shall usufructuary;
parental authority, be secondary to 4. Property
the parents all collective daily administered
temporarily needs of the by the child.
relinquish parental family;
authority over the 4. Administered by
child to the latter. the parents.
Q: What is the liability of persons exercising

Q: What are the rules regarding the use of the
special parental authority over the child?
child’s property?
A: They are principally and solidarily liable for
A:
damages caused by the acts or omissions of the
1. The property of minor children shall be devoted
child while under their supervision, instruction or
to their support and education unless the title
custody.
or transfer provides otherwise.
2. The parents have the right to use only the
Note: Parents, judicial guardians or those exercising
substitute parental authority over the minor are fruits and income of said property for the
subsidiarily liable for said acts and omissions of the following purposes:
minor. a. Primarily, to the child’s support;
b. Secondarily, to the collective daily
D. EFFECTS OF PARENTAL AUTHORITY UPON THE needs of the family.
PROPERTY OF THE CHILDREN
Q: What is the rule on lease of property belonging
Q: Who exercises legal guardianship over the to minor children?
property of an unemancipated child?
A: GR: The parents, as legal guardians of the
A: The father and the mother, jointly, without need minor’s property, may validly lease the same,
of court appointment. even without court authorization, because
lease has been considered as an act of
Note: In case of disagreement, the father’s decision administration.
shall prevail unless there is a judicial order to the
contrary. XPNS: Court authorization is required if:
1. If the lease will be recorded in the
Q: When is a parent required to post a bond? Registry of Property;
2. If the lease is for a period of more than
A: If the market value of the property or the annual one year, because this is already deemed
income of the child exceeds Php 50,000. an act of dominion.
Note: The bond shall not be less than 10% of the value
of the property or annual income. (Art. 225, FC) E. SUSPENSION OR TERMINATION OF PARENTAL
AUTHORITY
Q: What are the kinds of properties of a minor?
Distinguish. Q: When is parental authority terminated?
77
A: Q: How does emancipation take place?

1. Permanent: DED
a. Death of parents; A: By attainment of majority at the age of (18)
b. Emancipation of the child; eighteen years.
c. Death of child.
Q: What are the effects of emancipation?
2. Temporary: AGA FIA – it may be revived
a. Adoption of the child; A:
b. Appointment of general Guardian; 1. Parental authority over the person and
c. Judicial declaration of Abandonment; property of the child is terminated
d. Final judgment divesting parents of PA; 2. Child shall be qualified and responsible for all
e. Incapacity of parent exercising PA; acts of civil life, save exceptions established by
f. Judicial declaration of Absence. existing laws.
3. Contracting marriage shall require parental
Q: What are the grounds for suspension of PA? consent until the age of (21) twenty-one.
4. The responsibility of parents or guardians for
A: CHAIN B children and wards below (21) twenty-one
1. Gives Corrupting orders, counsel and under the second and third paragraphs of
example; Art.2180 of the Civil Code shall not be
2. Treats child with excessive Harshness and derogated.
cruelty;
3. Subjects/allows child be subjected to Acts XII. SUMMARY JUDICIAL PROCEEDINGS IN THE
of lasciviousness; FAMILY LAW
4. Conviction of crime with penalty of civil
Interdiction ; Q: What are the matters subject to summary
5. Culpable Negligence of parent or person proceedings?
exercising PA;
6. Compels child to Beg. A:
1. Petition for judicial authority to administer or
Note: If the person exercising PA has subjected the encumber specific separate property of the
child or allowed him to be subjected to Sexual Abuse, abandoning spouse.
he/she shall be permanently deprived of PA. 2. Petition for an order providing for disciplinary
measures over a child.
Q: When may the suspension be revoked and 3. Petition for approval of bond of parents who
parental authority revived? exercise parental authority over the property
of their children.
A: There must be a case filed for the purpose or in 4. Judicial declaration of presumptive death.
the same proceeding if the court finds that the 5. Action of a child for delivery of presumptive
cause therefore had ceased and will not be legitime
repeated. 6. Judicial determination of family domicile in
case of disagreement between the spouses
GR: Parental authority and responsibility are 7. Objection of one spouse as to the profession
inalienable and may not be transferred and of the other.
renounced. 8. Action entrusting parental authority over
foundlings, abandoned, neglected or abused
XPN: In case authorized by law. children to heads of institutions.
9. Annulment by wife of the husband's decision
Note: Parents may exercise authority over their in the administration and enjoyment of
children’s property. community or conjugal property.
10. Appointment of one of the spouses as sole
XI. EMANCIPATION administrator but only when the other spouse
is absent, or separated in fact, or has
Q: What is emancipation? abandoned the other or the consent is
withheld. (Uy v. CA, G.R. No. 109557, Nov. 29,
A: It is the release of a person from parental 2000 )
authority whereby he becomes capacitated for civil
life. Q: How shall matters subject to summary
proceedings be decided?
78 CIVIL LAW TEAM

A: All cases requiring summary court proceedings A: GR: The Code shall have retroactive effect.
shall be decided in an expeditious manner, without
regard to technical rules. XPN: No retroactivity if it would prejudice
vested rights.
Q: W filed a petition with the RTC under the rules
on Summary Judicial Proceedings in the Family Q: What is a vested right?
Law provided for in the Family Code, for the
declaration of the presumptive death of her A: Some right or interest in property that has
absent spouse, H, based on the provisions of Art. become fixed or established, and is no longer open
41 of the Family Code, for purposes of remarriage. to doubt or controversy. Rights are vested when
After trial, the RTC rendered a decision declaring the right to enjoyment, present or prospective, has
the presumptive death of H. The Republic received become the property of some person as present
a copy of the decision on Nov 14, 2001. interest.
Subsequently, the Republic filed a Notice of
Appeal on Nov 22, 2001. The RTC held that the Q: Antonia Aruego and her sister Evelyn filed a
appeal was filed within the reglementary period petition in the courts seeking Jose Aruego, Jr. and
and thus, elevated the records to the Court of his five children to recognize them as illegitimate
Appeals. However, the Court of Appeals denied children and compulsory heirs of Jose. They claim
the Republic’s appeal and accordingly affirmed the there is open and continuous possession of status
appealed RTC decision. of illegitimate children of Jose who had an
amorous relationship with their mother Luz Fabian
Did the Court of Appeals acquire jurisdiction over until the time of the death of Jose. The court
the appeal on a final and executory judgment of declared that Antonia Aruego is an illegitimate
the RTC? daughter of the deceased with Luz Fabian while
Evelyn is not. Antonia and Evelyn contested the
A: No. In Summary Judicial Proceedings under the decision citing provisions of the Family Code
Family Code, there is no reglementary period within particularly Art. 127 on Filiation, Art.172 on
which to perfect an appeal, precisely because illegitimate children’s filiation, and Art.256 on the
judgments rendered thereunder, by express retroactivity of the code. Whether or not the
provision of Art. 247, Family Code, are provisions of the Family Code be applied
“immediately final and executory”. An appellate retroactively and will it impair the vested rights of
court acquires no jurisdiction to review a judgment the respondents?
which, by express provision of law, is immediately
final and executory. The right to appeal is not a A: The action for compulsory recognition and
natural right nor is it a part of due process, for it is enforcement of successional rights which was filed
merely a statutory privilege. Since, by express prior to the advent of the Family Code, must be
mandate of Article 247 of the Family Code, all governed by Article 285 of the Civil Code and not by
judgments rendered in summary judicial Article 175, paragraph 2 of the Family Code. The
proceedings in Family Law are “immediately final present law cannot be given retroactive effect
and executory”, the right to appeal was not granted insofar as the instant case is concerned, as its
to any of the parties therein. The Republic, as application will prejudice the vested right of private
oppositor in the petition for declaration of respondent to have her case decided under Article
presumptive death, should not be treated 285 of the Civil Code. The right was vested to her by
differently. It had no right to appeal the RTC the fact that she filed her action under the regime
decision of November 7, 2001. The RTC's decision of the Civil Code. Prescinding from this, the
was immediately final and executory upon notice to conclusion then ought to be that the action was not
the parties. (Republic v. Bermudez-Lorino, G.R. No. yet barred, notwithstanding the fact that it was
160258, January 19, 2005) brought when the putative father was already
deceased, since private respondent was then still a
Note: However, an aggrieved party may file a petition minor when it was filed, an exception to the general
for certiorari to question abuse of discretion rule provided under Article 285 of the Civil Code.
amounting to lack of discretion. (Republic v. Tango, Hence, the trial court, which acquired jurisdiction
G.R. No. 161062, July 31, 2009) over the case by the filing of the complaint, never
lost jurisdiction over the same despite the passage
XIII. FINAL PROVISIONS of E.O. No. 209, also known as the Family Code of
the Philippines. (Aruego v. CA, G.R. No. 112193,
Q: What is the rule on the retroactivity of the March 13, 1996)
Family Code?
79
XIV. FUNERAL prejudicing anyone;

4. The change will Avoid confusion;
Q: What are the rules regarding funeral? 5. The name is:
a. Ridiculous,
A: General Guidelines: b. Extremely difficult to write or
1. Duty and right to make arrangements in pronounce,
funerals in accordance with Art. 199, FC: c. Dishonorable.
a. Spouse,
b. Descendants in the nearest degree, Q: The petition filed by the parents in behalf of
c. Ascendants in the nearest degree, their minor son Julian Lin Carulasan Wang sought
d. Brothers and Sisters the dropping of the latter's middle name,
"Carulasan." The parents averred that their plan
Note: In case of descendants of the same for Julian to study in Singapore and adjust to its
degree, or of brothers and sisters, the oldest culture necessitates the drop since in that country,
shall be preferred. middle names or the mother's surname are not
carried in a person's name. They therefore
In case of ascendants, the paternal shall anticipate that Julian may be subjected to
have a better right. discrimination on account of his middle name,
which is difficult to pronounce in light of
2. Funeral shall be: Singapore's Mandarin language which does not
a. in keeping with the social position of have the letter "R" but if there is, Singaporeans
the deceased, pronounce it as "L." Should the petition for the
b. in accordance with the expressed dropping of his middle name be granted?
wishes of the deceased,
c. In absence of the expressed wishes, A: No. Petitioners’ justification for seeking the
his religious beliefs or affiliation shall change in the name of their child, that of
determine; convenience, was characterized by the Supreme
Court as amorphous, to say the least, and would
3. Any person who disrespects the dead or not warrant a favorable ruling. As Julian is only a
allows the same shall be liable for minor and has yet to understand and appreciate
damages; the value of any change in his name, it is best that
the matter be left to his judgment and discretion
4. Funeral expenses are chargeable against when he reaches legal age.
the property of the deceased. However, if
the deceased is one of the spouses, they The State has an interest in the names borne by
are chargeable against the conjugal individuals and entities for purposes of
partnership property. (Art 310, NCC) identification, and that a change of name is a
privilege and not a right, such that before a person
5. If the deceased is married, the tombstone can be allowed to change the name given him
or mausoleum is deemed part of the either in his birth certificate or civil registry, he
funeral expense and chargeable against must show proper or reasonable cause, or any
the community property or conjugal compelling reason which may justify such change.
partnership property. Otherwise, the request would be denied. (In Re:
Petition for change of name and/or
XV. USE OF SURNAMES correction/cancellation of entry in civil registry of
Julian Lin Carulasan Wang, G.R. No. 159966, Mar.
Q: What are the grounds for change of name 30, 2005)
which have been held valid?
Note: The touchstone for the grant of a change of
A: CLEARED name is that there be proper and reasonable cause for
1. One has Continuously used and been which the change is sought.
known since childhood by a Filipino name
and was unaware of alien parentage; Q: Can a person change his registered first name
2. The change results as a Legal and sex on the basis of a sex reassignment?
consequence, as in legitimation;
3. There is a sincere desire to adopt a A: No. Before a person can legally change his given
Filipino name to Erase signs of former name, he must present proper or reasonable cause
alienage, all in good faith and without or any compelling reason justifying such change. In
80 CIVIL LAW TEAM

addition, he must show that he will be prejudiced

by the use of his true and official name. Under the Q: What are the procedural requirements for a
Civil Register Law, a birth certificate is a historical petition for change of name?
record of the facts as they existed at the time of
birth. Thus, the sex of a person is determined at A:
birth, visually done by the birth attendant (the 1. 3 years residency in the province where the
physician or midwife) by examining the genitals of change is sought prior to the filing;
the infant. Considering that there is no law legally 2. Must not be filed within 30 days prior to an
recognizing sex reassignment, the determination of election;
a person’s sex made at the time of his or her birth, 3. Petition must be verified.
if not attended by error, is immutable. (Silverio v.
Republic, G.R. No. 174689, Oct. 22, 2007)
Q: What is the Rule with regard to the use of surname by a child who is (1) legitimate, (2) legitimated, (3)
adopted and (4) illegitimate?
A:
CHILD CONCERNED SURNAME TO BE USED
Legitimate
Father’s
Legitimated
Adopted Adopter’s
Mother’s or Father’s if requisites of R.A. 9255 are
Illegitimate
complied with
Conceived prior to annulment of marriage Father’s
Conceived after annulment of marriage Mother’s
FACTUAL CIRCUMSTANCE OF THE WIFE SURNAME TO BE USED

1. first name and maiden name + husband’s surname
2. first name + husband’s surname
3. husband’s full name + prefix indicating that she is his
Valid marriage (before husband dies) wife (e.g. Mrs.)
Art 370 4. retain the use of her maiden name
*use of husband’s surname is not a duty but merely an

option for the wife
Wife is the guilty party Shall resume using her maiden name
Choices:
1. resume using her maiden name
Marriage is Annulled 2. continue using husband’s surname
Art. 371
Wife is the innocent party Unless:
a. court decrees otherwise;
b. she or the former husband is married again
to another person
Legally Separated Wife shall continue using the name and surname
Art. 372 employed by her prior to the legal separation.
She may use the deceased’s husband’s surname as
Widowed Spouse
though he were still living. Art. 373
Divorced (at least if they allow it later or for those who got Choices same as widowed spouse.
divorced during the Japanese occupation)
Q: Virginia Remo, a Filipino citizen, is married to passport, Virginia applied for the renewal of her
Francisco Rallonza. In her passport, the following passport with the DFA, with a request to revert to
entries appear: "Rallonza" as her surname, "Maria her maiden name and surname in the replacement
Virginia" as her given name, and "Remo" as her passport. Virginia, relying on Article 370 of the
middle name. Prior to the expiration of her Civil Code, contends that the use of the husband’s
81
surname by the wife is permissive rather than person whose name was used;
obligatory. Is Virginia correct? 3. Use is Motivated by:
a. Modesty
A: No. A married woman has an option, but not a b. desire to avoid unnecessary trouble
duty, to use the surname of the husband in any of c. other reason not prohibited by law
the ways provided by Article 370 of the Civil Code. or morals.
However, R.A. 8239 or the Philippine Passport Act
of 1996 limits the instances when a married woman MIDDLE NAME
applicant may exercise the option to revert to the
use of her maiden name. These are death of Note: A middle name has practical or legal significance
husband, divorce, annulment, and declaration of as it serves to identify the maternal pedigree or
nullity of marriage. filiation of a person and distinguishes him from others
who may have the same given name and surname as
In case of renewal of passport, a married woman he has. Art. 364 of the Civil Code states that legitimate
may either adopt her husband’s surname or and legitimated children shall principally use the
continuously use her maiden name. However, once surname of their father. Art. 174 of the Family Code
gives legitimate children the right to bear the
she opted to use her husband’s surname in her
surnames of the father and mother, while illegitimate
original passport, she may not revert to the use of
children, under Art. 176, as amended by R.A. 9255,
her maiden name, except if any of the four grounds shall use the surname of their mother, unless their
provided under R.A. 8239 is present. father recognizes their filiation, in which case, they
may bear the father's surname. In the case of these
Further, even assuming R.A. 8239 conflicts with the children, their registration in the civil registry requires
Civil Code, the provisions of R.A. 8239 which is a that their middle names be indicated therein, apart of
special law specifically dealing with passport course from their given names and surnames. (In re:
issuance must prevail over the provisions of the Petition for Change of Name and/or Correction of Entry
Civil Code which is the general law on the use of in the Civil Registry of Julian Lin Carulasan Wang, 454
surnames. A basic tenet in statutory construction is SCRA 155)
that a special law prevails over a general law. (Remo
v. Sec. of Foreign Affairs, G.R. No. 169202, Mar. 5, Q: Honorato filed a petition to adopt his minor
2010) illegitimate child Stephanie. Stephanie has been
using her mother's middle name and surname. He
Q: What are the elements of usurpation of name? prayed that Stephanie's middle name be changed
from "Astorga" to "Garcia," which is her mother's
A: AUD surname and that her surname "Garcia" be
1. Actual use of another’s name by the changed to "Catindig," which is his surname. This
defendant; the trial court denied. Was the trial court correct
2. Use is Unauthorized; in denying Honorato’s request for Stephanie’s use
3. Use of another’s name is to Designate of her mother’s surname as her middle name?
personality or identify a person.
A: No. The name of an individual has two parts –
Q: What are the remedies available to the person the given name or proper name and the surname or
whose name has been usurped? family name. The given name may be freely
selected by the parents for the child, but the
A: surname to which the child is entitled is fixed by
1. Civil – insofar as private persons are law. The Civil Code (Arts. 364 to 380) is silent as to
concerned: the use of a middle name. Even Art. 176 of the FC,
a. Injunction as amended by R.A. 9255 (An Act Allowing
b. Damages Illegitimate Children to Use the Surname of
2. Criminal – when public affairs are prejudiced. Their Father) is silent as to what middle name a
child may use.
Q: Is the use of another’s name always actionable?
An adopted child is entitled to all the rights
A: No. It is not actionable when it is used as stage, provided by law to a legitimate child without
screen or pen name. discrimination of any kind, including the right to
bear the surname of her father and her mother. As
Provided: GIM she had become a legitimate child on account of
1. Use is in Good faith; her adoption, it follows that Stephanie is entitled to
2. No Injury is caused to the rights of the utilize the surname of her father, Honorato
82 CIVIL LAW TEAM

Catindig, and that of her mother, Gemma Garcia. being presumed to be the legitimate child of
Aimee’s husband is required by law to be registered
Since there is no law prohibiting an illegitimate under the surname of Aimee’s husband. While it is
child adopted by her natural father, like Stephanie, true that Gianna’s registered surname is erroneous,
to use, as middle name her mother's surname, the a judicial action for correction of entry to change
High Court found no reason why she should not be the surname of Gianna to that of Aimee’s maiden
allowed to do so. surname will also be erroneous. A judicial action to
correct an entry in the birth certificate is allowed to
Note: The Supreme Court, in granting the petition, correct an error and not to commit another error.
predicated its ruling upon the statutory principle that
adoption statutes, being humane and salutary, should Alternative Answers: It may be noted that the
be liberally construed to carry out the beneficent problems does not show whether Gianna was born
purposes of adoption. The modern trend is to consider while Aimee was living with her ex-husband.
adoption not merely as an act to establish a Neither does it show who filed the judicial action to
relationship of paternity and filiation, but also as an act correct the entries.
which endows a child with legitimate status. (In the
Matter of the Adoption of Stephanie Nathy Astorga
If the problem is intended only for purpose of
Garcia, G.R. No. 148311. Mar. 31, 2005)
determining whether factual changes are in order,
then the answers are:
Q: Giana was born to Andy and Aimee, who at the
time of Giana’s birth were not married to each
a. A change from “legitimate” to
other. While Andy was single at that time, Aimee
“illegitimate” is proper upon proof of lack
was still in the process of securing a judicial
of marriage between Andy and Aimee.
declaration of nullity on her marriage to her ex-
husband. Gianna’s birth certificate, which was
b. If the child is considered illegitimate, then
signed by both Andy and Aimee, registered the
she should follow the surname of her
status of Gianna as “legitimate”, her surname
mother.
carrying that of Andy’s, and that her parents were
married to each other.
Q: Instead of a judicial action, can administrative
proceedings be brought for the purpose of making
Can a judicial action for correction of entries in
the above corrections?
Gianna’s birth certificate be successfully
maintained to:
A: Under R.A. 9048, only typographical errors are
allowed to be corrected administratively. The
a. Change her status from “legitimate” to
change of status from legitimate to illegitimate is
“illegitimate”; and
not a typographical error and even assuming that it
is, its administrative correction is not allowed under
A: A judicial action cannot be maintained to change
R.A. 9048. Typographical errors involving status,
the status of Gianna from “legitimate” to
age, citizenship, and gender are expressly excluded
“illegitimate” child of Andy and Aimee. While it is
from what may be corrected administratively.
true that Gianna is the biological daughter of Andy
and Aimee conceived and born without marriage
The change of the surname is also not allowed
between them, Gianna is presumed, under the law
administratively. R.A. 9048 provides for an
as the legitimate child of Aimee and her husband.
administrative procedure for change of first name
This filiation may be impugned only by the
only and not for change of surname.
husband. To correct the status of Gianna in her
birth certificate from “legitimate child of Andy and
Q: Assuming that Aimee is successful in declaring
Aimee” to “illegitimate child of Andy and Aimee”
her former marriage void, and Andy and Aimee
will amount to indirectly impugning her filiation as
subsequently married each other, would Gianna
the child of Aimee’s husband in a proper action.
be legitimated?
What cannot be done directly cannot be done
indirectly.
A: No, Gianna will not be legitimated. While the
court may have declared the marriage void ab initio
b. Change her surname from that of Andy’s to
and, therefore, no marriage took place in the eyes
Aimee’s maiden surname?
of the law, Gianna will still not be legitimated. This
is because at the time she was conceived and born
A: A judicial action to change the surname of
her biological parents could not have validly
Gianna from the surname of Andy to the maiden
married each other. For their marriage to be valid,
surname of Aimee is also not allowed. Gianna,
83
the court must first declare the first marriage null Q: What is the duty of the Court after appointing
and void. In the problem, Gianna was conceived the representative?
and born before the court has decreed the nullity of
her mother’s previous marriage. (2008 Bar
Question) A: The Court shall:
1. Take the necessary measures to
XVI. ABSENCE safeguard the rights and interests of the
absentee.
A. PROVISIONAL MEASURES IN CASE OF ABSENCE 2. Specify the powers, obligations, and
remuneration of the representative.
Q: What is absence? 3. Regulate the powers, obligations and
remuneration according to the
A: The special status of a person who has left his circumstances by the rules concerning
domicile and thereafter his whereabouts and fate guardians.
are unknown, it being uncertain whether he is
already dead or still alive. (Olaguiviel v. Morada, 63 Q: What is the order of preference in the
O.G. 4940) appointment of a representative?
Q: What are the kinds of absence? A:

1. Spouse present, except, when legally
A: separated.
1. Physical Absence 2. In the absence of spouse, any competent
2. Legal Absence person.
Q: What are the 3 Stages of Absence? Note: The administrator of the absentee's property
shall be appointed in accordance with the same order.
A:
1. Provisional Absence – when a person disappears B. DECLARATION OF ABSENCE
from his domicile his whereabouts being unknown,
without leaving an agent to administer his property Q: What are the requisites for a declaration of
absence?
2. Declared Absence – when a person disappears
from his domicile and 2 years thereafter have A:
elapsed without any news about him or since the 1. The absentee have disappeared from his
receipt of the last news, or 5 years have elapsed in domicile
case he left a person to administer his property 2. His whereabouts are not known
3. he has been absent without any news for 2
3. Presumptive Death – the absentee is presumed years, if nobody was left to administer his
dead (Jurado, 2009) property or 5 years if somebody was left to
administer such property
Q: What is provisional absence?
Q: When may absence be judicially declared?
A:
1. When a person disappears from his domicile A: It depends.
2. His whereabouts are unknown and: 1. Where the absentee left no agent to
a. he did not leave any agent administer his property- after two (2)
b. he left an agent but the agent’s power years without any news about the
has expired absentee or since receipt of the last news.
2. Where the absentee has left a person to
Q: What is the remedy of an interested party, a administer his property- after five (5)
relative or a friend of the absentee to protect the years.
latter's interest?
Q: Who may ask for the declaration of absence?
A: They may petition the Court for the appointment
of a representative to represent the absentee in all A:
that may be necessary. 1. Spouse present
2. Heirs instituted in a will
3. Relatives who may succeed by intestacy
84 CIVIL LAW TEAM

4. Persons who may have over the property of A: At the end of the five, seven or ten year period,
the absentee some right subordinated to the as the case may be.
condition of his death.
Q: Who are presumed dead for all purposes
Q: When shall the judicial declaration of absence including the division of estate among heirs in case
take effect? of extraordinary presumption of death?
A: Six (6) months after its publication in a A: VAD

newspaper of general circulation. 1. Person on board a Vessel lost during a sea
voyage, or an airplane which is missing,
C. ADMINISTRATION OF THE PROPERTY OF THE who has not been heard of for four (4)
ABSENTEE years since the loss of the vessel or
airplane;
Q: When shall the administration of the property 2. Person in the Armed forces who has taken
of the absentee cease? at in war, and has been missing for four
(4) years;
A: ADD 3. Person who has been in Danger of death
1. When absentee Appears personally or by under other circumstances and his
means of an agent. existence has not been known for four (4)
2. When Death of the absentee is proved years.
and his testate or intestate heirs appear.
3. When a third person appears, showing by Q: When is the absentee presumed to have died
a proper Document that he has acquired under an extraordinary presumption?
the absentee's property by purchase or
other title. A: At the time of disappearance. i.e. when the
calamity took place.
D. PRESUMPTION OF DEATH
Q: May a petition for the declaration of
Q: What are the kinds of presumed death? presumptive death be the subject of a judicial
declaration, if it is the only question upon which a
A: competent court has to pass?
1. Ordinary presumption- ordinary absence;
absentee disappears under normal conditions A: No. Under the Civil Code, the presumption of
without danger or idea of death. death is established by law and no court declaration
2. Extraordinary presumption- qualified absence; is needed for the presumption to arise. Moreover,
disappearance with great probability of death. It is clear that a judicial declaration that a person is
presumptively dead, being a presumption juris
Q: What are the rules in ordinary presumption of tantum only, subject to contrary proof, cannot
death? become final. If a judicial decree declaring a person
presumptively dead, cannot become final and
A: In case of: executory even after the lapse of the reglementary
1. Disappearance upon or before reaching period within which an appeal may be taken, then a
the age of seventy five (75) years: petition for such a declaration is useless,
a. After an absence of seven (7) years - unnecessary, superfluous and of no benefit to the
the absentee is presumed dead for petitioner.
all purposes except, succession.
b. After an absence of ten (10) years - Q: Juana married Arturo on January 1973.
the absentee is presumed dead for However, because the latter was unemployed the
all purposes including succession. spouses constantly argued. Thus, Arturo left the
2. Disappearance at the age of seventy six conjugal dwelling on October 1975. Years passed
(76) years or older, after an absence of without any word from Arturo. Juana didn’t hear
five (5) years -the absentee is presumed any news of Arturo, his whereabouts or even if he
dead for all purposes including was alive or not. Believing that Arturo was already
succession. dead, Juana married Dante on June 1986.
Subsequently, however, Dante's application for
Q: When is the absentee presumed to have died naturalization filed with the United States
under an ordinary presumption? Government was denied because of the subsisting
marriage between Juana and Arturo. Hence, on
85
March, 2007, Juana filed a Petition for declaration Civil Code, it is not necessary to have the former
of presumptive death of Arturo with the RTC. The spouse judicially declared an absentee. The law
RTC dismissed the Petition on the ground that only requires that the former spouse has been
Juana was not able to prove the existence of a absent for seven consecutive years at the time of
well-grounded belief that her husband Arturo was the second marriage, that the spouse present does
already dead as required under Article 41 of the not know his or her former spouse to be living, that
Family Code. such former spouse is generally reputed to be dead
and the spouse present so believes at the time of
a. Was the RTC correct in dismissing the petition the celebration of the marriage. Since death is
based on Article 41 of the Family Code? presumed to have taken place by the seventh year
of absence, Arturo is to be presumed dead starting
No. Since the marriages were both celebrated October 1982.
under the auspices of the Civil Code it is the Civil
Code that applies to this case not Art. 41 of the FC. Further, the presumption of death cannot be the
Under the Civil Code, proof of well-founded belief is subject of court proceedings independent of the
not required. Juana could not have been expected settlement of the absentee’s estate. In case the
to comply with the requirement of proof of "well- presumption of death is invoked independently of
founded belief" since the FC was not yet in effect at such an action or special proceeding there is no
the time of her marriage to Dante. Moreover, the right to be enforced nor is there a remedy prayed
enactment of the FC in 1988 does not change this for by the petitioner against her absent husband.
conclusion. The FC shall have no retroactive effect Neither is there a prayer for the final determination
if it impairs vested rights. To retroactively apply the of his right or status or for the ascertainment of a
provisions of the FC requiring Juana to exhibit "well- particular fact, for the petition does not pray for a
founded belief" will, ultimately, result in the declaration that the petitioner's husband is dead,
invalidation of her second marriage, which was but merely asks for a declaration that he be
valid at the time it was celebrated. Such a situation presumed dead because he had been unheard from
would be untenable and would go against the in seven years. In sum, the petition for a declaration
objectives that the Family Code wishes to achieve. that the petitioner's husband is presumptively
dead, even if judicially made, would not improve
b. Will the petition for declaration of presumptive the petitioner's situation, because such a
death, therefore, prosper? presumption is already established by law. (Valdez
v. Republic, G.R. No. 180863, September 8, 2009)
No. Under the Civil Code, the presumption of death
is established by law and no court declaration is
needed for the presumption to arise. For the
purposes of the civil marriage law, Art. 83 of the
Q: Discuss the distinctions between declaration of presumptive death for purpose of contracting subsequent
marriage and opening succession and declaration of absence under Rules of Court.
A:
DECLARATION OF PRESUMPTIVE DEATH FOR PURPOSE OF:
CONTRACTING SUBSEQUENT DECLARATION OF ABSENCE
OPENING OF SUCCESSION
MARRIAGE
Applicable laws
Arts. 390-396, Civil Code Arts. 41-44, Family Code Rule 107, Rules of Court
Who may file petition
1. Spouse present;
2. Heirs instituted in the will;
3. Relatives who will succeed by
Absentee’s co-heirs, heirs, assigns,
intestacy; or
representative or successors-in- Spouse present
4. Those who have over the property of
interest
the absentee some right subordinated
to the condition of his death. (Sec. 2,
Rule 107)
86 CIVIL LAW TEAM

Purpose of petition
It is to appoint an administrator over the
For the purpose of contracting
properties of the absentee. This is proper
To open succession subsequent marriage by spouse
only where the absentee has properties to
present
be administered
When to file petition
GR: 4 consecutive years absence of
spouse – and the spouse present has After 2 years:
a well-founded belief that the absent 1. From his disappearance and
GR: Absence of ten years.
spouse was already dead without any news about the
absentee; or
XPN: If he disappeared after the age
XPN: 2 consecutive years absence of 2. Of the last news about the
of seventy-five years, an absence of
spouse – In case of disappearance absentee.
five years shall be sufficient in order
where there is danger of death under
that his succession may be opened
the circumstances set forth in the After 5 years: If he left an administrator of
provisions of Article 391 of the Civil his property. (Sec. 2)
Code (Art. 41, FC)
Effectivity of declaration
6 months after its publication of place and
time of hearing in a newspaper of general
Upon institution of a summary Upon institution of a summary circulation and in the Official Gazette. The
proceeding in court. proceeding in court. order must also be recorded in the Civil
Registry of the place where the absentee
last resided. (par. 2, Sec. 6, Rule 107)
Grounds for termination of declaration
1. Absentee appears personally or
Upon recording of the affidavit of through an agent;
reappearance of the absent spouse, 2. Absentee’s death is proved and heirs
Upon recording of the affidavit of
unless there is a judgment annulling appear; or
reappearance.
the previous marriage or declaring it 3. Third person appears showing that he
void ab initio. acquired title over the property of the
absentee (Sec. 8).
Effect of reappearance
It does not automatically terminate
the subsequent marriage. To cause
the termination of the subsequent
marriage, the reappearance must be
made in an affidavit of reappearance
If the absentee appears, or without and the recording of a sworn
appearing his existence is proved, statement of the fact and
he shall recover his property in the circumstances of such reappearance
The trustee or administrator shall cease in
condition in which it may be found, in the civil registry.
the performance of his office, and the
and the price of any property that
property shall be placed at the disposal of
may have been alienated or the If, however, there was previous
those who may have a right thereto.
property acquired therewith; but he judgment annulling or declaring the
cannot claim either fruits or rents. prior marriage void, then the
(Art. 392, Civil Code) reappearance of the absent spouse,
the execution of the affidavit, and
the recording of the sworn
statement shall not result to the
termination of the subsequent
marriage.
87
XVII. CIVIL REGISTRAR 7. Civil interdiction

8. Judicial determination of filiation
A. ARTICLE 407-413 9. Changes of name (Silverio v. Republic, G.R. No.
174689, October 22, 2007)
Q: What is the civil register?
Q: What is the nature of the books making up the
A: Refers to the various registry books and related civil register and the documents relating thereto?
certificates and documents kept in the archives of
the local civil registry offices, Philippine Consulate, A: The books and documents shall be considered
and of the Office of the Civil Registrar General. public documents and shall be prima facie evidence
of the facts therein contained.
Q: What shall be recorded in the civil register?
B. RA 9048
A: The following, concerning the civil status of
persons: Q: When did R.A. 9048 take effect?
1. Acts
2. Events A: March 22, 2001.
3. Judicial decrees
Q: What is the rule with regard to changing or
Q: What is civil status? correction of entries in the civil register?
A: The circumstances affecting the legal situation or A: GR: No entry in a civil register shall be changed
sum total of capacities or incapacities of a person in or corrected without a judicial order.
view of his age, nationality and family membership
(Beduya v. Republic, G.R. L-71639, May 29, 1964). It XPNs:
also includes all his personal qualities and relations, 1. Clerical or typographical errors and
more or less permanent in nature, not ordinarily 2. Change of first name or nickname which
terminable at his own will, such as his being can be corrected or changed
legitimate or illegitimate, or his being married or administratively by the concerned city or
not. municipal civil registrar or consul general
in accordance with the provisions of RA
Q: What are the acts authorized to be entered in 9048 (Clerical Error Law).
the civil register?
Q: What is a clerical or typographical error?
A:
1. Legitimation A: Refers to a mistake committed in the
2. Acknowledgment of illegitimate children performance of clerical work in writing , copying,
3. Naturalization transcribing or typing an entry in the civil register
that is harmless and innocuous, such as misspelled
Q: What are the events authorized to be entered name or misspelled place of birth or the like, which
in the civil register? is visible to the eyes or obvious to the
understanding, and can be corrected or changed
A: only by reference to other existing record or
1. Births records: Provided, that no correction must involve
2. Marriages the change of , nationality, age, status or sex of the
3. Naturalization petitioner. (Section 2(c), RA 9048)
4. Deaths
Q: Zirxthoussous delos Santos filed a petition for
Q: What are the judicial decrees authorized to be change of name with the Office of the Civil
entered in the civil register? Registrar of Mandaluyong City under the
administrative proceeding provided in RA No.
A: 9048. He alleged that his first name sounds
1. Legal separations ridiculous and is extremely difficult to spell and
2. Annulments of marriage pronounce. After complying with the
3. Declarations of nullity of marriage requirements of the law, the Civil Registrar
4. Adoption granted his petition and changed his first name
5. Naturalization Zirxthoussous to "Jesus." His full name now reads
6. Loss or recovery of citizenship, "Jesus delos Santos."
88 CIVIL LAW TEAM

“male”. Further, he alleged that he is a male

Jesus delos Santos moved to General Santos City transsexual. Prior to filing the petition, he
to work in a multi-national company. There, he fell underwent sex reassignment surgery Thailand.
in love and married Mary Grace delos Santos. She Thus, he seeks to have his name in his birth
requested him to have his first name changed certificate changed from “John Lloyd” to “Joanna,”
because his new name "Jesus delos Santos" is the and his sex from “male” to “female” on the ground
same name as that of her father who abandoned of sex reassignment pursuant to Articles 407 to
her family and became a notorious drug lord. She 413 of the Civil Code, Rules 103 and 108 of the
wanted to forget him. Hence, Jesus filed another Rules of Court and RA 9048.
petition with the Office of the Local Civil Registrar
to change his first name to "Roberto." He claimed 1. May a person's first name be changed on the
that the change is warranted because it will ground of sex reassignment?
eradicate all vestiges of the infamy of Mary
Grace's father. Will the petition for change of A: No. The State has an interest in the names borne
name of Jesus delos Santos to Roberto delos by individuals and entities for purposes of
Santos under Republic Act No. 9048 prosper? identification. A change of name is a privilege, not
a right. Petitions for change of name are controlled
A: No, under the law, Jesus may only change his by statutes. RA 9048 now governs the change of
name once. In addition, the petition for change of first name. RA 9048 provides the grounds for which
name may be denied on the following grounds: change of first name may be allowed:
(1) Jesus is neither ridiculous, nor tainted (1) The petitioner finds the first name or
with dishonor nor extremely difficult to nickname to be ridiculous, tainted with
write or pronounce. dishonor or extremely difficult to write or
(2) There is no confusion to be avoided or pronounce;
created with the use of the registered (2) The new first name or nickname has been
first name or nickname of the petitioner. habitually and continuously used by the
(3) The petition involves the same entry in petitioner and he has been publicly
the same document, which was known by that first name or nickname in
previously corrected or changed under the community; or
the Rules and Regulations Implementing (3) The change will avoid confusion.
RA 9048. (2006 Bar Question)
RA 9048 does not sanction a change of first name
C. RULE 108, RULES OF COURT on the ground of sex reassignment. Rather than
avoiding confusion, changing petitioner’s first name
Q: May clerical or typographical errors be for his declared purpose may only create grave
corrected under Rule 108 of the Rules of Court? complications in the civil registry and the public
interest. Before a person can legally change his
A: No. The correction or change of clerical or given name, he must present proper or reasonable
typographical errors can now be made through cause or any compelling reason justifying such
administrative proceedings and without the need change. In addition, he must show that he will be
for a judicial order. In effect, RA 9048 removed prejudiced by the use of his true and official name.
from the ambit of Rule 108 of the Rules of Court the In this case, he failed to show, or even allege, any
correction of such errors. Rule 108 now applies only prejudice that he might suffer as a result of using
to substantial changes and corrections in entries in his true and official name.
the civil register. (Silverio v. Republic, G.R. No.
174689, October 22, 2007) 2. May a person's sex as indicated in his
certificate of birth be changed on the ground
Q: What is a first name? of sex reassignment?
A: Refers to a name or nickname given to a person A: No. Under RA 9048, a correction in the civil
which may consist of one or more names in registry involving the change of sex is not a mere
addition to the middle and last names. clerical or typographical error. It is a substantial
change for which the applicable procedure is Rule
Q: John Lloyd Cruzada filed a petition for the 108 of the Rules of Court. The entries correctable
change of his first name and sex in his birth under Rule 108 of the Rules of Court are those
certificate in the RTC. He alleged that his name provided in Articles 407 and 408 of the Civil Code.
was registered as “John Lloyd Cruzada” in his These acts, events and judicial decrees provided in
certificate of live birth. His sex was registered as Articles 407 and 408 of the Civil Code produce legal
89
consequences that touch upon the legal capacity,

status and nationality of a person. Their effects are
expressly sanctioned by the laws. In contrast, sex
reassignment is not among those acts or events
mentioned in Article 407. Neither is it recognized
nor even mentioned by any law, expressly or
impliedly. A person’s sex is an essential factor in
marriage and family relations. It is a part of a
person’s legal capacity and civil status. In this
connection, Article 413 of the Civil Code provides
that, all other matters pertaining to the registration
of civil status shall be governed by special laws. But
there is no such special law in the Philippines
governing sex reassignment and its effects. (Silverio
v. Republic, G.R. No. 174689, Oct. 22, 2007)
Note: The jurisdiction over applications for change of

first name is now primarily lodged with the city or
municipal civil registrar or consul general concerned.
The intent and effect of the law is to exclude the
change of first name from the coverage of Rules 103
(Change of Name) and 108 (Cancellation or Correction
of Entries in the Civil Registry) of the Rules of Court,
until and unless an administrative petition for change
of name is first filed and subsequently denied. Hence,
the remedy and the proceedings regulating change of
first name are primarily administrative in nature, not
judicial. (Silverio v. Republic, G.R. No. 174689, Oct. 22,
2007)
90 CIVIL LAW TEAM

PROPERTY
PROPERTY a. Fungible
b. Non fungible
I. CHARACTERISTICS 7. As to accession
a. Principal
Q: What is property? b. Accessory
8. As to existence
A: It is an object or a right which is appropriated or a. Existing or present property (res
susceptible of appropriation by man, with capacity existentes)
to satisfy human wants and needs (Pineda Property, b. Future property (res futurae)
p. 1, 1999 Ed) 9. As to consumability
a. Consumable
Q: What are the requisites for a thing to be b. Non-consumable
considered as property? 10. As to divisibility
a. Divisible
A: USA b. Indivisible
1. Utility – capacity to satisfy human wants
2. Substantivity/Individuality – it has a A. HIDDEN TREASURE
separate and autonomous existence
3. Appropriability – susceptibility to Q: What is the concept of hidden treasure?
ownership/possession, even if not yet
actually appropriated A: Any hidden and unknown deposit of money,
jewelry or other precious objects, the lawful
Q: What properties are not susceptible of ownership of which does not appear. (Art 439)
appropriation?
Q: What is the meaning of “other precious
A: objects”?
1. Common things (res commones)
A: Under the ejusdem generis rule, the phrase
XPN: Those that may be appropriated under should be understood as being similar to money or
certain conditions in a limited way. jewelry.
e.g. Electricity
Q: Is oil or gold considered as hidden treasure?
2. Not susceptible due to physical impossibility
e.g. Sun A: No, these are natural resources. The Regalian
Doctrine applies and not the provisions on hidden
3. Not susceptible due to legal impossibility treasure.
e.g. Human body
Q: What is the rule regarding discovery of hidden
II. CLASSIFICATION OF PROPERTY treasure?
Q: What are the classifications of property? A: GR: If the finder is the owner of the land,
building, or other property where it is found, the
A: entire hidden treasure belongs to him.
1. As to mobility
a. Immovable or real property XPN: If the finder is not the owner or is a
b. Movable or personal property stranger (includes the lessee or usufructuary),
2. As to ownership he is entitled to ½ thereof. (Art 566)
a. Public dominion
b. Private ownership Q: What is the effect if the finder is married?
3. As to alienability
a. Alienable A: If the finder is married he or she gets one half of
b. Inalienable the treasure or its value his or her spouse is entitled
4. As to individuality to share one-half of that share it being a conjugal
a. Specific property property. (Art. 117, par. 4, FC)
b. Generic property
5. As to susceptibility to touch Q: When is the finder entitled to any share in the
a. Tangible hidden treasure?
b. Intangible
6. As to susceptibility to substitution A: Requisites: ACTA
91
1. Discovery was made on the property of may acquire them at their just price which in turn
Another, or of the State or any of its will be divided equally between Adam and Blas (Art.
political subdivisions; 438, par.3)
2. Made by Chance; and
3. He is not a Trespasser or Agent of the Alternative Answer: The Banco de las Islas Filipinas
landowner. (Art. 438 par. 2) is the owner of the vault. The finder and the owner
of the land cannot share in the notes and coins,
Note: If the things found be of interest to science or because they are not buried treasure under the law,
the arts, the State may acquire them at their just price, as the ownership is known. Although under Art. 720
which shall be divided in conformity with the rule of the Civil Code the finder shall be given a reward
stated. (Art. 438) of one-tenth of the price of the thing found, as a
lost movable, on the principle of quasi-contract.
Q: What is the meaning of ‘By Chance”?
However, the notes and coins may have become res
A: The finder had no intention to search for the nullius considering that Banco de las Islas Filipinas is
treasure. There is no agreement between the no longer a juridical person and has apparently
owner of the property and the finder for the search given up looking for them and Adam, the first one
of the treasure to take possession with intent to possess shall
become the sole owner.
Q: Adam, a building contractor, was engaged by
Blas to construct a house on a lot which he (Blas) Q: Assuming that either or both Adam and Blas are
owns. While digging on the lot in order to lay adjudged as owners, will the notes and coins be
down the foundation of the house, Adam hit a deemed part of their absolute community or
very hard object. It turned out to be the vault of conjugal partnership of gains with their respective
the old Banco de las Islas Filipinas. Using a spouses?
detonation device, Adam was able to open the
vault containing old notes and coins which were in A: Yes. The hidden treasure will be part of the
circulation during the Spanish era. While the notes absolute community or conjugal property, of the
and coins are no longer legal tender, they were respective marriages (Arts. 91, 93 and 106, FC).
valued at P 100 million because of their historical
value and the coins’ silver and nickel content. The Alternative Answer: It is not hidden treasure and
following filed legal claims over the notes and therefore, not part of the absolute or conjugal
coins: partnership of the spouses. But the finder of the
lost movable, then his reward equivalent to one-
i) Adam, as finder; tenth of the value of the vault’s contents, will form
ii) Blas, as owner of the property where part of the conjugal partnership. If the government
they were found; wants to acquire the notes and coins, it must
iii) Bank of the Philippine Islands, as expropriate them for public use as museum pieces
successor-in-interest of the owner of the and pay just compensation. (2008 Bar Question)
vault; and
iv) The Philippine Government because of B. RIGHT OF ACCESSION
their historical value.
Q: What is the right of accession?
Who owns the notes and coins?
A: That right of ownership of which an owner of a
A: Hidden treasure is money jewelry or other
precious objects the ownership of which does not thing has over the products of said thing (accession
discreta), as well as to all things inseparably
appear (Art. 439). The vault of the Banco de las Islas
Filipinas has been buried for about a century and attached or incorporated thereto whether naturally
or artificially (accession continua). (Pineda Property,
the Bank of the Philippine Islands cannot succeed
by inheritance to the property of Banco de las Islas p.116, 2009 ed)
Filipinas. The ownership of the vault, together with
the notes and coins can now legally be considered 1. FRUITS
as hidden treasure because its ownership is no
longer apparent. The contractor, Adams, is not a Q: What is the rule on the owners right of
trespasser and therefore entitled to one-half of the accession with respect to what is produced by his
hidden treasure and Blas as owner of the property, property?
is entitled the other half (Art. 438). Since the notes
and coins have historical value, the government A: To the owner belongs the:
92 CIVIL LAW TEAM

PROPERTY
1. natural fruits; Q: What is the obligation of the owner who

2. industrial fruits; receives the fruit from a third person?
3. civil fruits. (Art. 441)
A: He who receives the fruits has the obligation to
Note: Natural fruits are the spontaneous products of pay the expenses made by a third person in their
the soil, and the young and other products of animals. production, gathering, and preservation.
Industrial fruits are those produced by lands of any Note: Only such as are manifest or born are
kind through cultivation or labor. considered as natural or industrial fruits.
Civil fruits are the rents of buildings, the price of leases With respect to animals, it is sufficient that they are in
of lands and other property and the amount of the womb of the mother, although unborn.
perpetual or life annuities or other similar income.
2. ACCESSION; IMMOVABLE PROPERTY FRUITS
Q: What is the rule if the planter and owner of the land are different?
A: As to:
Gathered Fruits
Planter in GF Planter in BF
Reimbursed for expenses for
Planter Keeps fruits production, gathering, and
preservation
No necessity to reimburse the
Owner planter of expenses since he retains Gets fruits, pay planter expenses
the fruits
Standing Crops
Planter in GF Planter in BF
Reimbursed for expenses,
Loses everything. No right of
Planter for production, gathering, and
reimbursement
preservation.
Owns fruits provided he pays planter
expenses,
Owner Owns fruits
for production, gathering, and
preservation.
Q: Give the rule when the land owner is the builder, planter or sower.
A:
Land Owner
Owner of Materials
and Builder, Planter or Sower
Good Faith Good Faith
1. Remove materials if w/o injury to
works, plantings or constructions; or
Acquire building etc. after paying indemnity for value of materials.
2. Receive indemnity for value of
materials
Bad Faith Good Faith
1. Remove materials, w/ or w/o injury
Acquire building etc. after paying value of materials AND indemnity
and be indemnified for damages; or
for damages, subject to the right of the owner of materials to
2. Be indemnified for value of materials
remove
and damages
Good Faith Bad Faith
Lose materials w/o being indemnified and
Acquire w/o paying indemnity and right to damages.
pay damages
Bad Faith Bad Faith
93
As though both acted in good faith

(in pari delicto)
Q: Give the rule when land owner is not builder, planter or sower.
A:
Land Owner Builder, Planter, Sower and Owner of Materials
LO has option to: In case land owner exercises (1), builder has the right to
1. Acquire improvements after paying indemnity which could retain until indemnity is paid and cannot be required to
either be: pay rent.
a. Original costs of improvements
b. Increase in the value of the whole.
2. Sell the land to builder and planter or collect rent from

sower unless the value of the land is considerably greater than
the building etc., in which case, the builder and planter shall
pay rent under the terms fixed by the parties.
Good Faith Bad Faith
1. Option to:
a. Acquire improvements without paying indemnity and
collect damages. 1. Lose improvements without right to be indemnified.
b. Sell the land to builder and planter or rent it to the
sower, and collect damages in both cases. 2. Recover necessary expenses for preservation of land.
c. Order the demolition of work or restoration to former
condition and collect damages in both cases. 3. Pay damages to land owner.
2. Pay necessary expenses for preservation.

Bad Faith Good Faith
1. Land owner must indemnify builder, planter, sower for 1. Receive indemnity for improvements and receive
improvements and pay damages. damages; or
2. Remove them in any event and receive damages
2. Cannot compel Builder, planter and sower to buy land.
Bad Faith Bad Faith

As though both acted in good faith
(in pari delicto)
Q: Give the rule when the land owner, builder, planter, sower and owner of materials are different persons.
A:
Land Owner Builder, Planter, Sower Owner of Materials
Good Faith Good Faith Good Faith
1. Acquire improvements and pay 1. Right of retention for necessary 1. Collect value of materials primarily
indemnity to builder, planter, sower and useful expenses and 2. Pay value from BPS and subsidiarily from LO if
and be subsidiarily liable to owner of of materials to its owner. former is insolvent
materials for value of materials
2. Remove only if w/o injury
2. Either
a. Sell the land to builder and planter
except if its value is considerably
more.
b. Rent to sower.
94 CIVIL LAW TEAM

PROPERTY
Good Faith Good Faith Bad Faith

1. Option to: 1. Right of retention for necessary and 1. Lose materials without right to
a. Acquire improvements and pay useful expenses. indemnity.
indemnity to builder, planter,
sower. 2. Keep building etc. without 2. Pay damages.
b. indemnity to owner of materials and
i. Sell to builder, planter except if collect damages from him.
the value of land is
considerably more, then,
forced lease.
ii. Rent to sower
2. Without subsidiary liability for cost

of materials.
Good Faith Bad Faith Bad Faith

1. Option to:
1. Recover value from builder, planter,
a. Acquire improvements without
sower (in pari delicto)
paying indemnity and collect
1. Recover necessary expenses for
damages.
land preservation. 2. If builder, planter, sower acquired
b. Demolition/ restore plus
improvements, remove materials if
damages.
2. Loses improvements without right possible without injury.
c. Sell to builder, planter or collect
to indemnity from land owner unless
rent from sower plus damages.
the latter sells the land. 3. No action against land owner and
may be liable to the latter for
2. Pay necessary expenses to builder,
damages.
planter, sower
Bad Faith Bad Faith Bad Faith
Same as though both acted in good faith
(in pari delicto)
Bad Faith Good Faith Good Faith
1. Remove materials if possible

1. Acquire improvements after paying without injury.
1. Remove improvements
indemnity and damages to builder,
2. Be indemnified for damages in any
planter, sower, unless the latter 2. Collect value of materials primarily
event
decides to remove. from builder, planter, sower,
subsidiarily from land owner.
Bad Faith Bad Faith Good Faith

1. Acquire improvements after
indemnity, subsidiarily liable to owner
1. Right of retention for necessary
of materials.
expenses 1. Collect value of materials primarily
from builder, planter, sower,
2.
2. Pay value of materials to owner of subsidiarily from land owner.
a. Sell to builder, planter except if
materials and pay him damages.
value of land is more.
b. Rent to sower.
95
Good Faith Bad Faith Good Faith

1. Option to:
a. Acquire without paying
1. Collect value of materials and
indemnity and collect damages. 1. Recover necessary expenses.
damages from builder, planter,
b. Sell to builder, planter or rent to
sower.
sower and collect damages 2. Lose improvements without right
2. Pay necessary expenses to builder, of indemnity from land owner unless
2. Remove materials in any event if
planter, sower. the latter sells the land.
builder, planter, sower.
3. Subsidiarily liable to owner of
materials.
Bad Faith Good Faith Bad Faith
Acquire improvements and pay 1. Indemnity for damages No indemnity, loses materials.
indemnity and damages to builder,
planter, sower unless the latter 2. Remove improvements in any
decides to remove. event.
Q: When can the owner of the land appropriate as himself. In the latter option, however, Felix shall
his own the works, sowing or planting of the have the right to a part of the expenses of
builder, planter, sower respectively. cultivation and to a part of the net harvest, both in
proportion to the time of possession. (Art. 545)
A: Only when the builder, planter, sower believes (2000 Bar Question)
that he has the right to so build, plant, or sow
because he thinks he owns the land or believes Q: Because of confusion as to the boundaries of
himself to have a claim of title. (Morales v. CA, G.R. the adjoining lots that they bought from the same
No. 12196, Jan.28, 1998) subdivision company, X constructed a house on
the adjoining lot of Y in the honest belief that it is
Note: Improvements made prior to the annotation of the land that he bought from the subdivision
the notice of lis pendens are deemed to have been company.
made in good faith. After such annotation, the builder
can no longer invoke the rights of a builder in good 1. What are the respective rights of X and Y with
faith. (Carrascoso v. CA, G.R. No. 123672, Dec. 14, respect to X's house?
2005)
A: The rights of Y, as owner of the lot, and of X, as
Q: May the owner of the land choose neither to
builder of a house thereon, are governed by Art.
pay the building nor to sell the land and demand
448 which grants to Y the right to choose between
the removal of the structures and restoration of
two remedies: (a) appropriate the house by
possession of the lot? Decide.
indemnifying X for its value plus whatever
necessary expenses the latter may have incurred
A: The owner has the option of paying the value of
for the preservation of the land, or (b) compel X to
the building or selling the land. He cannot refuse
buy the land if the price of the land is not
either to pay or sell and compel the owner of the
considerably more than the value of the house. If it
building to remove it from the land where it is
is, then X cannot be obliged to buy the land but he
erected. He is entitled to such removal only when,
shall pay reasonable rent, and in case of
after having chosen to sell the land, the other party
disagreement, the court shall fix the terms of the
fails to pay for the same. (Ignacio v. Hilario, 76 Phil
lease.
606, 1946)
2. Suppose X was in good faith but Y knew that
Q: Felix cultivated a parcel of land and planted
X was constructing on his (Y's) land but simply
sugar cane, believing it to be his own. When the
kept quiet about it, thinking perhaps that he
crop was eight months old, and harvestable after
could get X's house later. What are the
two more months, a resurvey of the land showed
respective rights of the parties over X's house
that it really belonged to Fred. What are the
in this case?
options available to Fred?
A: As to the pending crops planted by Felix in good A: Since the lot owner Y is deemed to be in bad
faith, Fred has the option of allowing Felix to faith (Art. 453), X as the party in good faith may (a)
continue the cultivation and to harvest the crops, or remove the house and demand indemnification for
to continue the cultivation and harvest the crops damages suffered by him, or (b) demand payment
96 CIVIL LAW TEAM

PROPERTY
of the value of the house plus reparation for insists that he should be paid the current market
damages (Art. 447, in relation to Art. 454). Y value of the building, which was much higher
continues as owner of the lot and becomes, under because of inflation.
the second option, owner of the house as well,
after he pays the sums demanded. (1999 Bar 1. Who is correct, Pedro or Pablo?
Question)
A: Pablo is correct. Under Art. 448 in relation to Art.
Q: Pecson owned a commercial lot on which he 546, the builder in good faith is entitled to a refund
built a building. For failure to pay realty taxes, the of the necessary and useful expenses incurred by
lot was sold at public auction to Nepomuceno, him, or the increase in value which the land may
who in turn sold it to the spouses Nuguid. The have acquired by reason of the improvement, at
sale, however, does not include the building. The the option of the landowner. The builder is entitled
spouses subsequently moved for the delivery of to a refund of the expenses he incurred, and not to
possession of the said lot and apartment. Pecson the market value of the improvement.
filed a motion to restore possession pending
determination of the value of the apartment. May Note: The case of Pecson v. CA, G.R. No. 115814, May
Pecson claim payment of rentals? 26, 1995 is not applicable.
A: Yes, Pecson is entitled to rentals by virtue of his 2. In the meantime that Pedro is not yet paid, who
right of retention over the apartment. The is entitled to the rentals of the building, Pedro or
construction of the apartment was undertaken at Pablo?
the time when Pecson was still the owner of the lot.
When the Nuguids became the uncontested owner A: Pablo is entitled to the rentals of the building. As
of the lot, the apartment was already in existence the owner of the land, Pablo is also the owner of
and occupied by tenants. the building being an accession thereto. However,
Pedro who is entitled to retain the building is also
Art. 448 does not apply to cases where the owner entitled to retain the rentals. He, however, shall
of the land is the builder but who later lost the apply the rentals to the indemnity payable to him
land; not being applicable, the indemnity that after deducting reasonable cost of repair and
should be paid to the buyer must be the fair market maintenance. (2000 Bar Question)
value of the building and not just the cost of
construction thereof. To do otherwise would Q: What is the effect if the building built on the
unjustly enrich the new owner of the land. land owned by another is sold to pay for the land’s
value?
Note: While the law aims to concentrate in one person
the ownership of the land and the improvements A: The builder becomes part-owner of the land.
thereon in view of the impracticability of creating a
state of forced co-ownership, it guards against unjust Q: When may the land owner compel the removal
enrichment insofar as the good-faith builder’s of the building built on his land?
improvements are concerned. The right of retention is
considered as one of the measures to protect builders A: The landowner may not seek to compel the
in good faith. owner of the building to remove the building from
the land after refusing to pay for the building or to
Q: Pending complete reimbursement, may the sell the land. He is entitled to such removal only
spouses Nuguid benefit from the improvement? when, after having chosen to sell the land, the
other party fails to pay for said land. (Ignacio v.
A: No. Since spouses Nuguid opted to appropriate Hilario, G.R. L-175, April 30, 1946)
the improvement for themselves when they applied
for a writ of execution despite knowledge that the Q: What is the rule when the land’s value is
auction sale did not include the apartment building, considerably more than the improvement?
they could not benefit from the lot’s improvement
until they reimbursed the improver in full, based on A: Land owner cannot compel the builder to buy
the current market value of the property. (Pecson v. the land. In such event, a “forced lease” is created
CA, G.R. No. 115814, May 26, 1995) and the court shall fix the terms thereof in case the
parties disagree thereon (Depra v. Dumalo, No. L-
Q: In good faith, Pedro constructed a five-door 57348, May 16, 1985).
commercial building on the land of Pablo who was
also in good faith. When Pablo discovered the Q: What is the rule when land owner sells the land
rd
construction, he opted to appropriate the building to a 3 person who is in bad faith?
by paying Pedro the cost thereof. However, Pedro
97
rd
A: Builder must go against the 3 person but if the A: Yes. The Church and the NHA, both acted in bad
latter has paid the land owner, a case against such faith, hence, they shall be treated as if they were
land owner may still be filed by the builder and the both in good faith. (National Housing Authority v.
rd rd
3 person may file a 3 party complaint against Grace Baptist Church, G.R. No. 156437, Mar. 1,
land owner. 2004)
Q: Does the land owner have the right of removal USUFRUCTUARY

or demolition?
Q: What are the rights of the usufruct over
A: GR: No. improvements he introduced on the property held
in usufruct?
XPN: Option exercised was compulsory selling
and builder failed to pay.
A: GR: The usufructuary is not entitled to indemnity
Q: What is the recourse left to the parties where for the expenses he had incurred in the making of
the builder fails to pay the value of the land? the improvements.
A: While the Civil Code is silent on this point, XPN: He may remove the improvements even
guidance may be had from these decisions: against the will of the owner. Provided, that no
1. In Miranda v. Fadullon, G.R. No. L-8220, damage would be caused to the property. (Art.
Oct. 29, 1955, the builder might be made 579)
to pay rental only, leave things as they
are, and assume the relation of lessor and Note: The usufructuary may introduce useful or
lessee; luxurious improvements but is prohibited from altering
2. In Ignacio v. Hilario, G.R. L-175, April 30, the form and substance of the property
1946, owner of the land may have the
improvement removed; or Q: What if the improvements cannot be removed
3. In Bernardo v. Bataclan, G.R. No. L-44606, without causing damage to the property?
Nov. 28, 1938, the land and the
improvement may be sold in a public A: The usufructuary may set off the improvements
auction, applying the proceeds first to the he may have made on the property against any
payments of the value of the land, and damage to the same. (Art 580)
the excess if any, to be delivered to the
owner of the house in payment thereof.
(Filipinas College Inc. v. Timbang, G.R. No. 3. LAND ADJOINING RIVER BANKS
L-12812, Sept. 29, 1959)
A. ALLUVION
Q: Will the land owner upon demand for payment
automatically become the owner of the Q: What is alluvium or alluvion?
improvement for failure of the builder to pay for
the value of the land? A: It is the gradual deposit of sediment by natural
action of a current of fresh water (not sea water),
A: No. There is nothing in Art. 448 and 546 which the original identity of the deposit being lost.
would justify the conclusion that upon failure of the Where is by sea water, it belongs to the State.
builder to pay the value of the land, when such is (Government of Philippine Islands v. Cabangis, G.R.
demanded by the landowner, the land owner No. L-28379, Mar. 27, 1929)
becomes automatically the owner of the
improvement under Art. 445. Note: Art. 457 states “To the owners of the lands
adjoining the banks of the rivers belong the accretion
which they gradually receive from the effects of the
Q: The Church, despite knowledge that its
current of the waters.
intended contract of sale with the National
Housing Authority had not been perfected,
Q: Distinguish accretion from alluvium?
proceeded to introduce improvements on the
disputed land. On the other hand, NHA knowingly A: Accretion is the process whereby the soil is
granted the Church temporary use of the subject deposited while alluvium is the soil deposited.
properties and did not prevent the Church from
making improvements thereon. Did the Church Q: What are the requisites of alluvium?
and NHA act in bad faith?
98 CIVIL LAW TEAM

PROPERTY
A: GRA through gradual changes in the course of an

1. Deposit be Gradual and imperceptible adjoining stream
2. Resulted from the effects of the current
of the water Q: What are the reasons for granting a riparian
3. The land where the accretion takes place owner the right to alluvion deposited by a river?
is Adjacent to the banks of a river
A:
Q: What is the effect if all the requisites are 1. To compensate him for:
present? a. danger of loss that he suffers due to the
location of his land
A: The riparian owner is automatically entitled to b. for the encumbrances and other
the accretion. easements on his land
2 To promote the interests of agriculture as he is
Q: When does the alluvion start to become the in the best position to utilize the accretion.
property of the riparian owner?
B. CHANGE IN THE COURSE OF RIVER
A: From the time that the deposit created by the 3
current of water becomes manifest. (Heirs of Q: What happens when a river changes its course
Navarro v. IAC, GR. No. 68166, Feb. 12, 1997) by natural causes and its bed is formed on a
private estate?
Q: When does the rule on alluvion not apply?
A: It becomes of public dominion whether it is
A: The rule does not apply to man-made or artificial navigable or floatable or not.
accretions to lands that adjoin canals or esteros or
artificial drainage system (Ronquillo vs. CA, G.R. No Q: What are the requisites?
43346, Mar. 20, 1991).
A: NAPA
Q: What if the deposits accumulate, not through 1. There must be a Natural change in the
the effects of the current of the water, but course of the waters of the river;
because of the constructions made by the owner otherwise, the bed may be the subject of
purely for defensive purposes against the a State grant (Reyes-Puno, p.54)
damaging action of the water? 2. The change must be Abrupt or sudden;
3. The change must be Permanent;
A: The deposits are still deemed to be alluvion and
will belong to the riparian owner. Note: the rule does not apply to temporary
overflowing of the river.
Q: What if the deposit is brought about by sea
water? 4. There must be Abandonment by the
owner of the bed.
A: It belongs to the State and forms part of the
public domain. Note: Abandonment pertains to the decision not
to bring back the river to the old bed. (Reyes-
Q: Must alluvial deposits be registered? Puno, p.53)
A: Yes, though automatically it is owned by the Q: What is the effect when the river bed is
riparian owner. (Heirs of Navarro v. IAC, G.R. No. abandoned?
68166, Feb. 12, 1997)
A: River beds which are abandoned through the
Q: What if the riparian owner fails to register the natural change in the course of the waters ipso
deposits within the prescriptive period? facto belong to the owners whose lands are
occupied by the new course in proportion to the
A: Failure to register the alluvial deposit acquired area lost. However, the owners of the lands
by accretion for a period of 50 years subjects said adjoining the old bed shall have the right to acquire
accretion to acquisition thru prescription by third the same by paying the value thereof, which value
persons. (Reynante v. CA, G.R. No. 95907, Apr. 8, shall not exceed the value of the area occupied by
1992) the new bed. (Art 461)
Note: Registration under the Torrens System does Note: The rule on abandoned river bed does not apply
not protect the riparian owner against the to cases where the river simply dries up because there
diminution of the area of his registered land
99
are no persons whose lands are occupied by the 1. Abandonment; or

waters of the river. 2. Expiration of 2 years, whether the
failure to remove be voluntary or
C. AVULSION involuntary, and irrespective of the
area of the portion known to have
Q: What is avulsion? been transferred.
A: It is the deposit of known (identifiable) portion of 4. ISLANDS

land detached from the property of another which
is attached to the property of another as a result of Q: What are the rules on ownership with regard to
the effect of the current of a river, creek or torrent. formation of islands?
Note: Art. 459 states that “Whenever the current of a A:

river, creek, or torrent segregates from an estate on its LOCATION OWNER
banks a known portion of land and transfers it to
If formed on the sea
another estate, the owner of the land to which the
segregated portion belonged retains the ownership of W/in territorial waters State
it, provided he removes it within 2 years.
Outside territorial
First country to occupy
waters
Q: Distinguish alluvium from avulsion.
If formed on lakes or navigable/ floatable rivers
A: State
ALLUVIUM AVULSION If formed on non-navigable/ floatable rivers
Gradual and Nearer in margin to one Owner of nearer margin
Sudden or abrupt process bank is the sole owner
imperceptible
Soil cannot be Island divided
Identifiable and verifiable If equidistant
identified longitudinally in halves
Belongs to the owner Belongs to the owner
of the property to from whose property it Q: Eduave is the owner of land forming part of an
which it is attached was detached island in a non-navigable river. Said land was
Detachment followed by eroded due to a typhoon, destroying the bigger
Merely an attachment portion thereof and improvements thereon. Due
attachment
to the movements of the river deposits on the part
Q: What are the requisites of avulsion? of the land that was not eroded, the area was
increased. Later, Eduave allowed Dodong to
A: CAP introduce improvements thereon and live there as
1. Transfer is caused by the Current of a a caretaker. However, Dodong however later
river, creek, or torrent. denied Eduave’s claim of ownership so the latter
2. Transfer is sudden or Abrupt filed action to quiet title over the property. Who
3. The Portion of the land transported is has a better right to the land?
known or identifiable.
A: Eduave. Clearly, the land in question is an island
Q: What if land from one tenement is transferred that appears in a non-floatable and non-navigable
to another by forces of nature other than the river river, and it is not disputed that Eduave is the
current? owner of the parcel of land along the margin of the
river and opposite the island. Applying Art. 465, the
A: By analogy, it can still be considered as an island belongs to the owner of the parcel of land
avulsion. nearer the margin. More accurately, because the
island is longer than the property of Eduave, he is
Q: What is the rule on acquisition of titles over an deemed ipso jure the owner of that portion which
avulsion? corresponds to the length of his property along the
margin of the river. If however, the riparian owner
A: GR: Original owner retains title. fails to assert his claim thereof, the same may yield
to the adverse possession of the third parties, as
XPNs: The owner must remove (not merely indeed even accretion to land titled under the
claim) the transported portion within 2 years Torrens system must itself still be registered.
to retain ownership, otherwise, the land not Dodong thus may acquire said land by acquisitive
removed shall belong to the owner of the land prescription. But here, Dodong’s possession cannot
to which it has been adjudicated in case of: be considered to be in good faith, so 30 years of
100 CIVIL LAW TEAM

PROPERTY
possession is needed. (Jagualing v. CA, G.R. No. the improvements thereon, buildings, still a
94283, Mar. 4, 1991) building by itself may be mortgage apart from the
Note: There is no accession when islands are formed land on which it has been built. Such a mortgage
by the branching of a river; the owner retains would still be a real estate mortgage for the
ownership of the isolated piece of land. building would still be considered immovable
property even if dealt with separately and apart
C. BY OBJECT from the land. (Yee v. Strong Machinery Company,
G.R. No. 11658, Feb.15, 1918)
1. REAL OR IMMOVABLE
Q: Can a building erected on a land belonging to
Q: What are the categories of immovable another be mortgaged?
property?
A: Yes. A valid real estate mortgage can be
A: Real Property by: NIDA constituted. Art. 415 of the New Civil Code
1. Nature – cannot be carried from place to mentions “buildings” separate from land. This
place. means that the building by itself is an immovable
2. Incorporation – those which are attached and may be subject of a REM. (Prudential Bank v.
to an immovable in a fixed manner and Panis, G.R. No. L-50008, Aug. 31, 1987)
considered as an integral part thereof,
irrespective of its ownership. Q: Is the annotation or inscription of a deed of sale
3. Destination – things placed in buildings or of real property in a chattel mortgage registry
on lands by the owner of the immovable considered an inscription in the registry of real
or his agent in such a manner that it property?
reveals the intention to attach them
permanently thereto. A: No. By its express terms, the Chattel Mortgage
4. Analogy – classified by express provision Law contemplates and makes provisions for
of law. mortgages of personal property; and the sole
purpose and object of the chattel mortgage registry
IMMOVABLE BY NATURE & is to provide for the registry of “Chattel mortgages,”
BY INCORPORATION that is to say, mortgages of personal property
executed in the manner and form prescribed in the
Par. 1, Art. 415. Land, buildings, roads and statute. (Yee v. Strong Machinery Co, G.R. No. L-
constructions of all kinds adhered to the soil. 11658, Feb. 15, 1918)
Q: Are barong-barongs immovable property? Par. 2, Art. 415. Trees, plants and growing fruits,
while they are attached to the land or form an
A: No. They are not permanent structures but mere integral part of an immovable.
superimpositions on land.
Q: Are trees immovable or movable?
Q: Where buildings are sold to be demolished
immediately, are the buildings immovable or A:
movable? 1. Real property by nature- if they are
A: The sale involves movable property. What are spontaneous products of the soil
really sold are the materials. 2. Real property by incorporation-If they
have been planted thru cultivation or
labor
Q: What is the effect of demolition of a house?
Note: The moment trees are detached or uprooted
A: Once a house is demolished, its character as an from the land it is considered as personal property.
immovable ceases. This is because a house is However, in case of uprooted timber, they are still not
classified as an immovable property by reason of its considered as personal property because timber is an
adherence to the soil on which it is built. (Bicerra v. integral part of the timber land.
Teneza, G.R. No. L-16218, Nov. 29, 1962)
IMMOVABLE BY INCORPORATION
Q: May a building be mortgaged apart from the
Par. 3, Art. 415. Everything attached to an
land on which it was built?
immovable in a fixed manner, in such a way that it
A: While it is true that a mortgage of land cannot be separated therefrom without breaking
necessarily includes, in the absence of stipulation of the material or deterioration of the object.
101
Q: What is res vinta? c. Be Essential and principal to the

industry or work, and not merely
A: These are immovable by incorporation, which incidental thereto.
when separated from the immovable, they regain
their condition as movable? Q: Is machinery placed by a tenant or by a
usufructuary considered real property?
IMMOVABLE BY INCORPORATION & BY
DESTINATION A: No. Since it is placed by a person having only a
temporary right, it does not become immobilized.
Par. 4, Art. 415. Statutes, reliefs, paintings or other
objects for use or ornamentation, placed in Note: Where a tenant places the machinery under the
buildings or on lands by the owner of the express provision of lease that it shall become a part of
immovable in such a manner that it reveals the the land belonging to the owner upon the termination
of the lease without compensation to the lessee, the
intention to attach them permanently to the
tenant acts as an agent of the owner and the
tenements.
immobilization of the machineries arises from the act
of the owner in giving by contract a permanent
Q: What do you mean by “placed by the owner”? destination to the machinery. (Valdez v. Central
Altagracia, 225 U.S. 58, 1912)
A: The objects must be placed by the owner of the
immovable and not necessarily the owner of the Q: How is the equipment of a transportation
object. business classified?
Q: Distinguish Par. 3 from Par. 4. A: A transportation business is not carried on in a

building or on a specified land. Hence, equipment
A: destined only to repair or service a transportation
PAR. 3 PAR. 4 business may not be deemed real property, but
Cannot be separated Can be separated from personal property. (Mindanao Bus Co. v. City
from the immovable the immovable without Assessor and Treasurer, G.R. No. L-17870, Sept. 29,
without breaking or breaking or 1962)
deterioration deterioration.
Must be placed by the Note: Machines must be essential and principal
owner of the elements in the industry and must directly meet the
Need not be placed by
immovable, or by his needs of said industry. It does not include movables
the owner
agent whether express which are merely incidentals, without which the
or implied business can still continue or carry on their functions.
Real property by
Real property by Q: Are machineries bolted or cemented on real
incorporation and
incorporation property mortgaged considered an immovable
destination
property?
Par. 5, Art. 415. Machinery, receptacles,
A: No. The fact that machineries were bolted or
instruments or implements intended by the owner
cemented on real property mortgaged does not
of the tenement for an industry or works which
make them ipso facto immovable under Art. 415 (3)
may be carried on in a building or on a piece of land
and (5) as the parties intent has to be looked into.
& which tend directly to meet the needs of the said
industry or works.
Q: Can parties treat an immovable property by
nature as a chattel?
Q: What are the requisites for machinery to be
considered real property? A: Yes. Even if the properties appear to be
immovable by nature, nothing detracts the parties
A: COTE from treating them as chattels to secure an
1. The industry or work must be Carried on obligation under the principle of estoppel. (Tsai v.
in a building or on a piece of land; CA, G.R. No. 120098, Oct. 2, 2001)
2. The machinery must:
a. Be placed by the Owner of the Q: What is the effect of temporary separation of
tenement or his agent; movables from the immovables to which they are
b. Tend directly to meet the needs of attached?
the said industry or work; and
A: 2 views
102 CIVIL LAW TEAM

PROPERTY
1. They continue to be regarded as b.) Are the equipment and living quarters
immovables. movable or immovable property?
2. Fact of separation determines the
condition of the objects thus recovering A: With respect to the equipment, the same is real
their condition as movables. property under paragraph 5 of Art. 415, NCC. It is
intended to meet the needs of the industry being
Q: Petitioners contend that the machines that undertaken by MPC. The equipment partakes of the
were the subjects of the Writ of Seizure were nature of the immovable upon which it has been
placed in the factory built on their own land. placed.
Indisputably, they were essential and principal
elements of their chocolate making industry. The living quarters, if attached to the immovable
Hence, although each of them was movable or platform with permanence, becomes an immovable
personal property on its own, all of them have as well. Permanence means they cannot be
become immobilized by destination because they separated without destroying the platform or the
are essential and principal elements in the quarters. On the other hand, If the attachment is
industry. Petitioners argue that said machines are not permanent, or not merely superimposed on the
real property pursuant to Art. 415 (5) of the NCC platform, then the living quarters are movable
and are not, therefore, the proper subjects o a property. (2007 Bar Question)
Writ of Seizure. However, the lease agreement
entered into by the petitioners provides that the c.) Are the trees, plants and flowers
machines in question are to be considered as immovable or movable property?
personal property,
A: The trees, plants and flowers are also
A: The machines should be deemed personal immovable, having been “planted” in the garden
property pursuant to the Lease Agreement—is area, under Art. 415(2) which provides that “Trees,
good only insofar as the contracting persons are plants and growing fruits, while they are attached
concerned. Hence, while the parties are bound by to the land or form an integral part of the
the Lease Agreement, third persons acting in good immovable” are likewise immovable property.
faith are not affected by its stipulation (2007 Bar Question)
characterizing the subject machinery as personal.
(Serg’s Products, Inc. vs. PCI Leasing and Finance, Q: The City Assessor sought to impose realty tax
Inc., 338 SCRA 504, Aug. 22, 2000) on steel towers of MERALCO. The taxes were paid
under protest, MERALCO contending that the
Q: Manila Petroleum Co. (MPC) owned and towers were exempt from taxation and that they
operated a petroleum operation facility off the were personal and not real property. Decide.
coast of Manila. The facility was located on a
floating platform made of wood and metal, upon A: The towers are personal property. They are not
which was permanently attached the heavy buildings adhered to the soil (Art.415 par.1); they
equipment for the petroleum operations and living are not attached to an immovable in a fixed manner
quarters of the crew. The floating platform and they can be separated without substantial
likewise contained a garden area, where trees, damage or deterioration, and they are not
plants and flowers were painted. The platform machineries intended for works on the land. (Board
was tethered to a ship, the MV101, which was of Assessment Appeals vs. Meralco, G.R. No. L-
anchored to a seabed. 15334, Jan. 31, 1964)
a.) Is the platform movable or immovable 2. PERSONAL OR MOVABLE

property?
Q: What are movable properties?
A: The platform is an immovable property by
destination. It was intended by the owner to remain A: SOFTSS
at a fixed place on a river or coast. Art. 415 (9) of 1. Movables Susceptible of appropriation
the NCC considers as real property “docks and which are not included in Art. 415;
structures which, though floating are intended by 2. Real property which by any Special
their nature and object to remain at a fixed place provision of law considers as personalty
on a river, lake, or coasts.” (2007 Bar Question; Fels e.g. growing crops under the Chattel
Energy, Inc. vs. The Province of Batangas, G.R. No. Mortgage Law.
168557, Feb. 16, 2007) 3. Forces of nature which are brought under
the control of science
103
e.g. electricity generated by electric outside the commerce of man. They are neither
powers, solar light for batteries power. neither public nor private party.
4. In general, all things which can be
Transported from place to place without 1. PUBLIC DOMINION
impairment of the real property to which
they are fixed; Q: What are the kinds of property of public
5. Obligations and actions which have for dominion?
their object movables or demandable
sums; and A: Properties which are: USD
6. Shares of stock of agricultural, 1. For public Use;
commercial and industrial entities, 2. Intended for public Service and not for
although they have real estate. (Art. 416) public use; and
3. For the Development of the national
Q: State the tests to determine whether a wealth. (Art. 420)
property is a movable property.
Q: What are the characteristics of properties of
A: MES public dominion?
1. Test of Exclusion – everything not
included in Art. 415. A: ULEP- ROB
Note: E.g. ships or vessels or interest in a 1. In general, they can be Used by
business. everybody;
2. By reason of a Special law – immovable 2. Cannot be Levied upon by execution or
by nature but movable for the purpose of attachment;
the special law. 3. May Either be real or personal property;
Note: e.g. Growing crops for purposes of 4. Cannot be acquired by Prescription;
the Chattel Mortgage Law. 5. Cannot be Registered under Land
3. Test of Mobility – if the property is Registration Law and be the subject of
capable of being carried from place to Torrens Title;
place without injuring the real property to 6. Outside the commerce of man – cannot
which it may in the meantime be be alienated or leased or be subject of
attached. any contract;
7. Cannot be Burdened by voluntary
D. BY OWNER easement.
Q: How are properties classified according to Q: How are lands of public dominion classified?
ownership?
A:
A: 1. Agricultural;
1. Public dominion - property owned by the State 2. Forest or timber;
(or its political subdivisions) in its public or 3. Mineral lands;
sovereign capacity and intended for public use. 4. National Parks. (Art. XIV, Sec. 10, Philippine
2. Private ownership – property owned by: Constitution)
a. Private persons, either individually or
collectively; and Q: Who has the authority to classify or reclassify
b. The State in its private capacity public lands?
(patrimonial property).
c. The LGUs: A: As provided in the Public Land Act, the
i. Property for public use – roads, classification or reclassification of public lands into
streets, squares, fountains, public alienable or disposable, mineral or forest lands is a
waters, promenades and public prerogative of the executive department of the
works for public service paid for by government and not of the courts.
the LGUs.
ii. Patrimonial Property – all other Q: Can property of public dominion be converted
properties possessed by LGUs to patrimonial property?
without prejudice to special laws.
(Art. 419) A: Yes, through a formal declaration by the
executive or legislative body that the property is no
Note: Sacred and religious objects are considered longer needed for public use or for public service.
104 CIVIL LAW TEAM

PROPERTY
Q: May public streets or thoroughfares be leased National wealth – still property for public use under
or licensed to market stallholders by virtue of a the regalian doctrine.
city ordinance or resolution of the Metro Manila
Commission? Q: Are canals constructed by private persons
within private lands are of public dominion or of
A: No. The right of the public to use the city streets private ownership?
may not be bargained away through contract.
Hence, the agreement between the city A: Article 420 states that canals constructed by the
government and stall holders is contrary to law and State are of public ownership; conversely, canals
therefore void. constructed by private persons within private lands
are of private ownership. (Santos vs. Moreno, G.R.
Q: Do LGU’s have the power to withdraw a public No. L-15829, Dec. 4, 1967)
street from public use?
Q: The City of Cebu obtained a loan which was to
A: LGU cannot withdraw a public street from public be paid with its own funds. Part of the proceeds of
use, unless it has been granted such authority by this loan was used to fund the construction of the
law. (Dacanay v. Asistio Jr., G.R. No. 93654, May 6, City’s sewage system. NAWASA sought to
1992) expropriate the sewage system. This was opposed
with the arguments that there was no payment of
2. PRIVATE OWNERSHIP just compensation; NAWASA offered unliquidated
assets and liabilities. NAWASA averred, as an
Q: What are properties in private ownership of alternative course of action, that the property is
private persons or entities? one for public use and under the control of the
legislature. Decide whether the property is
A: All properties not belonging to the State or to its patrimonial property of the city or property for
political subdivision are properties of private public use.
ownership pertaining to private persons, either
individually or collectively. A: The property is patrimonial and not subject to
legislative control. It is property of the city,
Q: Are aliens prohibited to privately own lands?
purchased with private funds and not devoted to
public use (it is for profit). It is therefore
A: Yes. Aliens have no right to acquire any public or
patrimonial under the Civil Code. Nor can the
private agriculture, commercial or residential lands
system be considered “public works for public
(except by hereditary succession). (Krivenko v.
service” under Article 424 because such
Register or Deeds)
classification is qualified by ejusdem generis; it
Note: The same rule applies to a foreign corporation must be of the same character as the preceding
even if it is a religious non - stock corporation. items.(City of Cebu vs. NAWASA, G.R. No. 12892,
April 20, 1960)
Q: What is the patrimonial property of the State?
E. BY NATURE
A: It is the property not devoted to public use,
public service, or the development of the national Q: How are properties classified according to
wealth. It is intended rather for the attainment of consumability?
the economic ends of the State, that is, for
subsistence. It is owned by the State in its private or A:
proprietary capacity. 1. Consumable property – that which cannot be
used according to its nature without being
Note: It may be disposed of by the State in the same consumed or being eaten or used up.
manner that private individuals dispose of their own 2. Non-Consumable property – that which can be
property subject, however, to administrative laws and used according to its nature without being
regulations. consumed or being eaten or used up.
Q: Where now do properties for public service and Q: How are properties classified according to
properties for the development of national wealth susceptibility to substitution?
fall?
A:
A: Public service – depends on who pays for the 1. Fungible property – that property which
service. If paid for by the political subdivision, belongs to a common genus permitting its
public; if for profit, patrimonial. substitution.
105
2. Non- fungible property – that property which is 1. BUNDLE OF RIGHTS PERSONAL OR MOVABLE
specified and not subject to substitution.
A. JUS UTENDI, FRUENDI, ABUTENDI, VINDICANDI,
Note: As to whether a property is fungible or non- DISPODENDI, POSSIDENDI, ACCESIONES
fungible is determined by the agreement of the parties
and not on the consumability of the thing. Q: What are the attributes of ownership?
III. OWNERSHIP A:
1. Right to enjoy (jus utendi)
A. RIGHTS IN GENERAL 2. Right to the fruits (jus fruendi)
3. Right to abuse (jus abutendi)
Q: What is ownership? 4. Right to dispose (jus dispodendi)
5. Right to recover (jus vindicandi)
A: The juridical relation of a person over a thing by 6. Right to accessories (jus accessiones)
virtue of which said person has the exclusive power 7. Right to possess (jus possidendi)
or authority to receive all the benefits and
advantages arising from said thing, save those REMEDIES TO RECOVER POSSESSION
restricted by law or the recognized rights of others.
1. ACTIONS TO RECOVER OWNERSHIP AND
Q: What are the kinds of ownership? POSSESSION OF REAL PROPERTY
A: FNSC Q: What are the legal remedies to recover

1. Full ownership – includes all the rights of possession of one’s property?
an owner;
A:
Note: Naked ownership + Usufruct 1. Personal property- replevin
2. Real property
2. Naked ownership – ownership where the a. Accion Interdictal
rights to the use and to the fruits have i. Forcible Entry
been denied; ii. Unlawful detainer
b. Accion Publiciana
Note: Full ownership – Usufruct
c. Accion Reinvindicatoria
3. Sole ownership – ownership is vested in
A. DISTINCTIONS BETWEEN ACCION
only one person; REIVINDICATORIA, ACCION PUBLICIANA, ACCION
INTERDICTAL
4. Co-ownership– ownership is vested in 2 or
more persons. Unity of the property, ACCION INTERDICTAL
plurality of the subjects.
Q: What is accion interdictal?
Q: What are the characteristics of ownership?
A: A summary action to recover physical or material
A: possession only and must be brought within one
1. Elastic – power/s may be reduced and year from the time the cause of action arises.
thereafter automatically recovered upon the 1. Forcible Entry
cessation of the limiting; rights. 2. Unlawful detainer
2. General – the right to make use of all the
possibilities or utility of the thing owned, ACCION PUBLICIANA
except those attached to other real rights
existing thereon. Q: What is accion publiciana?
3. Exclusive – there can only be one ownership
over a thing at a time. There may be two or A: Ordinary civil proceeding to recover the better
more owners but only one ownership. right of possession, except in cases of forcible entry
4. Independent – other rights are not necessary and unlawful detainer. What is involved here is not
for its existence. possession de facto but possession de jure.
5. Perpetual – ownership lasts as long as the
thing exists. It cannot be extinguished by ACCION REINVINDICATORIA
nonuser but only by adverse possession.
106 CIVIL LAW TEAM

PROPERTY
Q: What is accion reinvindicatoria? purchased the entire property from Alava. Rudy
then filed a complaint for unlawful detainer
A: Action to recover real property based on against Jaime alleging that the latter had occupied
ownership. Here, the object is the recovery of the a portion of his property without any lease
dominion over the property as owner. agreement and without paying any rentals, and
prayed that an order be rendered directing Jaime
Q: What are the requisites of accion to vacate the premises. Should the complaint be
reinvindicatoria? dismissed?
A: A: Yes. The records in this case show that the

1. Identity of Property respondent has been in possession of the property
2. Plaintiff’s title to the property in question, not by mere tolerance or generosity of
Rudy, but as the manager of his mother, who
Note: Where the facts averred in the complaint reveals conducted her business in the building which stood
that the action is neither one of forcible entry nor on a portion of the property leased from Alava.
unlawful detainer but essentially involves a boundary Jaime’s possession was in behalf of his mother, and
dispute, the same must be resolved in an accion
not in his own right.
reinvindicatoria (Sarmiento v. CA, G.R. No. 116192,
Nov. 16, 1995).
Q: What is the effect of non-registration of the
contract of lease?
Q: A contract of lease executed by Alava (lessor)
and Anita Lao (lessee) was not registered with the
A: Although the lease contract was not filed with
Register of Deeds. Aside from Anita, Rudy Lao also
the Register of Deeds, nevertheless, Rudy was
leased a portion of the same property where he
bound by the terms and conditions of said contract.
put up his business. At that time, Rudy knew that
The lease, in effect became a part of the contract of
Anita and her husband were the owners of the
sale. However, Rudy had no cause of action for
said building. He also knew that she had leased
unlawful detainer against Anita because of the
that portion of the property, and that Jaime Lao,
subsisting contract of lease; hence, he could not file
their son, managed and maintained the building,
the complaint against her. (Lao v. Lao, G.R. No.
as well as the business thereon. Rudy eventually
149599, May 16, 2000)
B. DISTINCTION BETWEEN FORCIBLE ENTRY AND UNLAWFUL DETAINER
Q: Distinguish forcible entry from unlawful detainer.
A:
Forcible Entry Unlawful Detainer
As to when possession became unlawful
Possession is inceptively lawful but becomes illegal from
the time defendant unlawfully withholds possession
Possession of the defendant is unlawful from the after the expiration or termination of his right thereto.
beginning as he acquires possession by force,
Note: The question of possession is primordial, while the
intimidation, strategy, threat or stealth (FISTS).
issue of ownership is generally unessential in unlawful
detainer. (Rosa Rica Sales Center v. Sps. Ong, G.R. 132197,
Aug. 16, 2005)
As to necessity of demand
No previous demand for the defendant to vacate is Demand is jurisdictional if the ground is non-payment of
necessary. rentals or failure to comply with the lease contract.
As to necessity of proof of prior physical possession
Plaintiff must prove that he was in prior physical Plaintiff need not have been in prior physical
possession of the premises until he was deprived possession.
thereof by the defendant.
Note: The fact that petitioners are in possession of the lot
does not automatically entitle them to remain in
possession. (Ganilla v. CA, G.R. No. 150755, June 28, 2005)
As to when 1 year period is counted from
107
1 year period is generally counted from the date of 1 year period is counted from the date of last demand
actual entry of the land. or last letter of demand.
2. ACTIONS FOR RECOVERY OF POSSESSION OF locality where the land is situated and
MOVABLE PROPERTY definitely locate it.
REPLEVIN 2. Prove that he has a better title than the

defendant
Q: What is replevin? a. Best proof is a Torrens certificate.
b. Tax receipts, tax declarations are
A: It is the remedy when the complaint prays for only prima facie evidence of
the recovery of the possession of personal ownership; it is rebuttable.
property.
Note: Plaintiff’s title must be founded on positive right
Q: May a property in custodia legis be subject of a or title and not merely on the lack or inefficiency of the
replevin suit? defendant’s title. In other words, he shall not be
permitted to rely upon the defects of the defendant’s
A: No. A property validly deposited in custodia legis title (Art. 434)
cannot be subject of a replevin suit. (Calub v. CA,
G.R. No. 115634, Apr. 27, 2000) Q: Why is the plaintiff not allowed to rely on the
weakness of defendant’s title?
3. REQUISITES FOR RECOVERY OF
PROPERTY A:
1. Possibility that neither the plaintiff nor the
defendant is the true owner of the property. In
Q: What are the requisites in an action to recover
which case, the defendant who is in possession
property?
will be preferred.
2. One in possession is presumed to be the
A: owner and he cannot be obliged to show or
1. Clearly identify the land he is claiming in prove a better title
accordance with the title/s on which he 3. Possessor in the concept of an owner is
bases his right of ownership; and presumed to be in good faith and he cannot be
expected to be carrying every now and then
Note: Burden of proof lies on the party his proofs of ownership over the property
who asserts the affirmative of an issue. 4. He who relies on the existence of a fact, should
The description should be so definite that prove that fact. If he cannot prove, the
an officer of the court might ho to the defendant does not have to prove.
2. DISTINCTION BETWEEN REAL AND PERSONAL RIGHTS
Q: Distinguish real from personal rights
A:
Real Right Personal Right
Creation
Created by title alone-save when title is also the made
as in succession. It is not directly created over a thing
Created by both title and mode directly over a thing
but is exercised through another against whom the
action is to be brought.
Object
Generally corporeal or tangible. Object is specific Incorporeal or intangible. Object covers all the present
property or thing and future property of the debtor (Art. 2236)
Subjects
108 CIVIL LAW TEAM

PROPERTY
(a) One definite active subject (e.g. owner)

(b) One indefinite passive subject which is the
whole world (a) An active subject (creditor)
Right of pursuit is therefore available. Real (b) A definite passive subject (debtor)
right follows its object in the hands of any
possessor
Enforceability
Enforceable only against the original debtor or his
Enforceable against the whole world
transferee charged with notice of the personal rights
Limit
Limited by usefulness, value or productivity of the thing No such limitation
Extinguishment
Not so extinguished. Claim for damages may still be
Extinguished by loss or destruction of the thing
pursued-in case of loss or destruction of the thing
MODES OF ACQUIRING OWNERSHIP 4. Grantor of the property on the grantee,

either by:
Q: What are the modes of acquiring ownership? a. Contract
b. Donation or
c. Will;
A:
5. Those arising from Conflicts of private
1. Original – are those which do not arise or
rights
depend upon any pre-existing right or title of
a. Those which take place in accession
another person
continua;
6. Constitution
i.e. Occupation, Intellectual Creation,
a. Prohibition against the acquisition of
Acquisitive Prescription
private lands by aliens.
7. Acts in state of necessity – law permits
2. Derivative – are those which arise or depend
injury or destruction of things owned by
upon a pre-existing or preceding right or title
another provided this is necessary to
of another person
avert a greater danger (with right to
indemnity vs. principle of unjust
i.e. Law, Donation, Succession mortis cause,
enrichment)
tradition (delivery)
8. True owner must resort to judicial process
– when thing is in possession of another;
C. LIMITATIONS law creates a disputable presumption of
ownership to those in actual possession
Q: What are the limitations on the right of
ownership? IV. ACCESSION:
A: Those imposed by the: CC-SLOG Q: Define accession. Is accession a mode of

1. State in the exercise of: acquiring ownership? Explain.
a. Power of taxation
b. Police power A: Accession may be defined as the right pertaining
c. Power of eminent domain to the owner of a thing over everything which is
2. Law produced thereby, or which is incorporated or
a. Legal easements and attached thereto, either naturally or artificially.
b. The requirement of legatine in (Art. 440). From the very definition itself, it is clear
succession; that it is not a mode of acquiring ownership; it is
3. Owner himself merely a consequence of the right of ownership
a. Voluntary easement .Furthermore, under Art. 712 of the NCC which
b. Mortgage enumerates the different modes of acquiring
c. Pledge ownership or other real rights, accession is not
d. Lease; included.
109
GENERAL RULES the prices of leases of lands. (Art.

442)
1. FOR IMMOVABLES
Q: When can we say that the fruit is in existence?
ACCESSION DISCRETA
A: It depends on the type of fruit:
Q: What is accession discreta? a. Annual (must be planted every year/must
re-plant after harvest; rice, wheat, corn) –
A: It is the right pertaining to the owner of a thing deemed manifest the moment their
over everything produced thereby. seedlings appear.
b. Perennial (only planted once and bear
Q: What are the requisites of accession discreta? fruit for several seasons; mango and
coconut trees) –deemed to exist only
A: when they actually appear.
1. Increase or addition to the original thing
2. At repeated intervals Q: When are animal young considered as existing?
3. By inherent forces
A: They are considered existing even if still in the
Q: Is the rule of accession discreta—that to the maternal womb. They should be considered existing
owner of the thing belong the natural, industrial only at the commencement of the maximum
and civil fruits—absolute in character? ordinary period for gestation.
A: No. It is subject to the following exceptions: Q: When are civil fruits and natural fruits deemed
1. If the thing is in possession of a possessor to exist?
in good faith in which case such possessor
is entitled to the fruits. (Art. 544) A:
2. If the thing is subject to a usufruct, in a. Civil fruits accrue daily and are considered
which case the usufructuary is entitled to personal property and may be pro-rated.
the fruits. (Art. 566) b. Natural and industrial fruits, while still
3. If the thing is leased, in which case the growing, are considered as real property;
lessee is entitled to the fruits of the thing, ordinarily, they cannot be pro-rated.
although such lessee must pay the owner
rentals which are in the nature of civil Q: To whom do the fruits belong?
fruits. (Art. 1654)
4. If the thing is in possession of an A: GR: To the owner of the land. (Art. 441)
antichretic creditor, in which case such
creditor is entitled to the fruits with the XPNS: If the thing is: [PULPA]
obligation of applying them to the 1. In Possession of a possessor in good faith
interest and principal. (Art. 2132) (Art 546, NCC); before the possession is
legally interrupted.
Q: What are the kinds of fruits?
2. Subject to a Usufruct(Art. 566)
A: NIC
1. Natural – 3. Lease of rural land
a. Spontaneous products of the soil;
b. The young and 4. Pledged (Art. 1680 and Art. 2102, par. 7);
c. Other products of animals, whether pledge is entitled to the fruits but has the
brought about by scientific means or obligation to compensate or set-off what
not. he receives with those which are owing to
2. Industrial– produced by lands of any kind him.
through:
a. Cultivation or 5. In possession of an Antichretic creditor
b. Labor (Art. 2132)
3. Civil fruits –
Q: What does the maxim pratus sequitor ventrem
a. Derived from the use of property or
mean?
b. Income from the property itself.
They consist of rents of buildings and
A: The offspring follows the dam (mother).
110 CIVIL LAW TEAM

PROPERTY
ACCESSION CONTINUA 2. The accessory follows the nature of that to

which it relates.
Q: What is accession continua? 3. What is built upon the land goes with it; or the
land is the principal, and whatever is built on it
A: It is the right pertaining to the owner of a thing becomes the accessory.
over everything incorporated or attached thereto
either naturally or artificially; by external forces.
1. With respect to real property [IN] Q: What is the rule on ownership regarding
a. Accession Industrial (building, accession industrial?
planting or sowing)
b. Accession Natural(alluvium, avulsion, A: GR: The owner of the land is the owner of
change of a river course, and whatever is built, planted or sown on that land,
formation of islands) including the improvements or repairs made
thereon.
Note: In case of uprooted trees, the
owner retains ownership if he makes a XPN:
claim within 6 months. This does not
include trees which remain planted on 1. When the doer is in good faith the rule is
a known portion on land carried by the modified.
force of the waters. In this latter case, 2. Improvements on the land of one of the
the trees are regarded as accessions of spouses at the expense of the conjugal
the land through gradual changes in partnership will belong to the partnership
the course of adjoining stream. or to the spouse who owns the land
(Payatas v. Tuazon, No. 30067, March depending on which of the two properties
23, 1929) has a higher value (Art. 120, FC)
2. With respect to personal property [SAC]
Note: If the doer is in bad faith, he is entitled only to
a. Specification
necessary expenses for the preservation of the land
b. Adjunction or conjunction
c. Commixtion or confusion
ACCESSION NATURAL
Q: What are the basic principles in accession
continua? Q: To whom does the offspring of animals belong
when the male and female belong to different
A: BADONG-E owners?
1. He who is in Bad faith is liable for
damages. A: Under the Partidas, the owner of the female was
2. Accessory follows the principal considered also the owner of the young, unless
3. Union or incorporation must generally be there is a contrary custom or speculation.
effected in such a manner that to
separate the principal from the accessory The legal presumption, in the absence of proof to
would result in substantial Damage to the contrary, is that the calf, as well as its mother
either or diminish its value. belongs to the owner of the latter, by the right of
4. To the Owner of the thing belongs the accretion. (US v. Caballero, G.R. No. 8608, Sept. 26,
extension or increases to such thing. 1913).
5. Bad faith of one party Neutralizes the bad
faith of the other so that they shall be Note: This is also in accord with the maxim “pratus
considered in good faith. sequitor ventrem”
6. He who is in Good faith may be held
responsible but not penalized. 2. FOR MOVABLES
7. No one shall unjustly Enrich himself at the
expense of another A. ACCESSION CONTINUA
Q: What is the basic principle of accession with

ACCESSION INDUSTRIAL
respect to movable property?
Q: What are the maxims in connection with A: Accession exists only if separation is not feasible.
accession industrial? Otherwise, separation may be demanded.
A:
1. The accessory follows the principal.
111
Q: Enumerate different kinds of accession perfection- If it cannot be determined

continua as regard movables. from Art. 467. (Art. 467)
4. That which has greater Merits, utility and
A: AMS volume if things.
1. Adjunction or conjunction
2. Mixture Q: How is ownership determined if the adjunction
3. Specification involves three or more things?
ADJUNCTION A: The court should first distinguish the principal

and apply Art. 466 in an equitable manner such that
Q: What is adjunction? the principal acquires the accessory, indemnifying
the former owner thereof for its value.
A: The process by virtue of which two movable
things belonging to different owners are united in Q: How about if the adjunction involves three or
such a way that they form a single object and each more things?
of the things united preserves its own nature. (Art.
466) A: The principal should first be distinguished, after,
Art. 466 will be applied in an equitable manner,
Q: What are its characteristics? such that the principal acquires the accessory,
indemnifying the former owner thereof for its
A: That there are: 2BUS value.
1. 2 movables;
Note: Art. 466 states that “Whenever two movable
2. Belonging to different owners;
things belonging to different owners are, without bad
3. United forming a single object;
faith, united in such a way that they form a single
4. Separation would impair their nature or
object, the owner of the principal thing acquires the
result in substantial injury to either thing. accessory, indemnifying the former owner thereof for
its value.
Q: What are the classes of adjunction or
conjunction? Q: When is separation of things allowed?
A: PEWWS A: WIB
1. Painting (pintura) 1. Separation Without injury
2. Engraftment - like setting a precious stone 2. Separation with Injury – accessory is
on a golden ring) much more precious than the principal,
3. Writing (escritura) the owner of the former may demand its
4. Weaving separation even though the principal may
5. Soldering- joining a piece of metal to suffer injury.
another metal) 3. Owner of the principal acted in Bad faith.
a. Ferruminacion - principal and (Art. 469)
accessory are of the same metal
b. Plumbatura – different metals (Art. Q: What are the rules as regards rights of owners
468) over the thing in adjunction?
Q: Who owns the movables subject to adjunction? A:

OWNER OF THE OWNER OF THE
A: The owner of the principal by law becomes PRINCIPLE ACCESSORY
owner of the resulting object and should indemnify Good Faith Good Faith
the owner of the accessories for the values thereof 1. Receive payment for
value of accessory; OR
Q: What are the tests to determine the principal? 1. Acquire accessory 2. GR: Demand separation
and pay owner of the provided the thing
A: VVUM accessory for its suffers no injury
1. That of greater Value- If two things are of value; OR XPN: If accessory is more
equal value. (Art. 468) 2. Demand separation precious than principal,
2. That of greater Volume- If two things are provided the thing he may demand
of equal volume. (Art. 468) suffers no injury. separation w/ or w/o
3. That to which the other has been United injury to the thing.
as an ornament, or for its use or
112 CIVIL LAW TEAM

PROPERTY
Good Faith Bad Faith (caused the mixture)

Acquire accessory w/o
Lose accessory and pay 1st owner will lose his part on 2nd owner will acquire
paying the owner of
damages. the mixture and pay entire mixture and
accessory and entitled
to damages. damages to the 2nd owner entitled to damages
Bad Faith Good Faith Good Faith
1. Pay value of 1. Receive payment and Bad Faith
(caused the mixture)
accessory and pay damages; OR
damages; OR As if both acted in GF,
2. Have the things As if both acted in GF, since the 1st owner is in
separated, even 2. Have accessory because the 2nd owner in GF BF and the 2nd owner
though there is injury separated w/ or w/o was the one who caused the who caused the
to the principal and injury to principal and ratification, because the 1st mixture in GF in a way
pay damages. receive damages owner ratifies the BF of 1st
Bad Faith Bad Faith owner.
Same as though both acted in good faith
SPECIFICATION
Q: How is the indemnity made?
Q: What is a specification?
A:
1. Delivery of a thing equal in kind and value; or A: It is the giving of new form to another’s material
2. Payment of its price including the sentimental thru application of labor. The material undergoes a
value. (Article 471) transformation or change of identity.
MIXTURE Q: What are the respective rights of the maker and

the owner of the materials in specification?
Q: What is a mixture?
A:
A: It is the combination of materials where the Owner of Materials
respective identities of the component elements Maker (M)
(OM)
are lost either voluntarily or by chance. (Arts. 472- Good Faith Good Faith
473)
Appropriate the thing
transformed and pay the
Q: What are the kinds of mixtures?
owner of the materials for
its value
A: COM-CON XPN: If the material is more
1. Commixtion – mixture of solids precious than the thing
2. Confusion – liquids transformed, the owner of Receive payment for
the materials has the value of materials
Q: What are the rules regarding mixtures? option to:
A: 1. acquire the work and

st
1 Owner nd
2 Owner indemnify the maker for
his labor; or
By Will of Both Owners of by Accident 2. demand indemnity for
the material.
1. Right is subject to stipulations; OR
1. Receive payment for 1. Appropriate new
2. Right is in proportion to the part belonging
value of his work; OR thing and pay the
to him (Co-ownership arises)
2. Appropriate the new maker for the work;
By Will of Only 1 Owner/ By Chance thing and pay the owner OR
of materials for its value. 2. Receive payment for
Good Faith Good Faith value of materials
1. Have the things separated provided the thing suffers Bad Faith Good Faith
no injury; OR 1. Lose the new thing and 1. Appropriate the new
2. If cannot be separated w/o injury, acquire interest on pay damages to owner thing without paying
mixture in proportion to his part (co-ownership) of the materials; OR and receive damages;
Bad Faith Good Faith OR
Note: Not available if the
113
2. Pay value of materials new thing is more valuable A. REQUIREMENT

and damages to owner than materials for scientific
of the materials. or artistic reasons Q: What are the requisites for an action to quiet
title?
2. Receive payment for
the value of materials
and damages. A: LCDR
1. Plaintiff must have a Legal or equitable

Q: Distinguish adjunction, mixture and title to, or interest in the real property
specification. which is the subject matter of the action;
2. There must be Cloud in such title;
A:
3. Such cloud must be Due to some
ADJUNCTION MIXTURE SPECIFICATION a. Instrument;
b. Record;
May involve 1
c. Claim;
Involves at least Involves at least thing(or more)
d. Encumbrance; or
2 things 2 things but form is
changed e. Proceeding which is apparently valid
but is in truth invalid, ineffective,
Accessory voidable or unenforceable, and is
Co-ownership Accessory follows
follows the prejudicial to the plaintiff’s title; and
results the principal
principal 4. Plaintiff must
a. Return to the defendant all benefits
Things mixed or he may have received from the
The new object
confused may
Things joined retains or latter; or
either retain or
retain their preserves the b. reimburse him for expenses that may
lose their
nature nature of the have redounded to his benefit.
respective
original object
natures
Q: What are the reasons for quieting of title?
B. RULES FOR DETERMINING THE PRINCIPAL AND A:

ACCESSORY 1. Prevent litigation
2. Protect true title & possession
Q: What are the factors to determine the principal 3. Real interest of both parties which requires
and the accessory? that precise state of title be known
Q: Rules in Quieting of Title.

A: Primary Factors (Importance/purpose)
1. The thing which is incorporated to A:
another thing as an ornament is the 1. Put end to vexatious litigation in respect to
accessory. The other is the principal property involved; plaintiff asserts his own
2. The thing to which is added to or joined estate & generally declares that defendant’s
to another for the use or perfection of the claim is without foundation.
latter is the accessory. The other is the 2. Remedial
principal 3. Not suits in rem nor personam but suits
against a particular person or persons in
Secondary Factors respect to the res (quasi in rem).
1. The one which has a greater value shall be 4. May not be brought for the purpose of settling
considered principal a boundary disputes.
2. If they have equal value, the one with 5. Applicable to real property or any interest
greater volume shall be considered therein. The law, however, does not exclude
principal (Art. 467-468. personal property from actions to quiet title.
6. An action to quiet title brought by the person
Note: In painting and sculpture, writings, printed in possession of the property is
matter, engraving and lithographs, the board, metal,
IMPRESCRIPTIBLE.
stone, canvas, paper or parchment shall be deemed
7. If he is not in possession, he must invoke his
the accessory thing. (Art. 468)
remedy within the prescriptive period.
V. QUIETING OF TITLE
Q: What are the classifications of action?
114 CIVIL LAW TEAM

PROPERTY
A: 2. Plaintiff not in possession – 10 years (ordinary)

a.) Remedial action – one to remove cloud on title or 30 years (extra-ordinary)
b.) Preventive action – on to prevent the casting
of a (threatened) cloud on the title. Note: Laches is defined as the failure or neglect, for
unreasonable and unexplained length of time, to do
Q: What are the requisites for existence of a that which by exercising due diligence, could or should
cloud? have been done earlier.
A: ATP The negligence or omission to assert a right within a

1. There is an Apparently valid or effective reasonable time, warranting a presumption that the
instrument. party entitled to assert it either has abandoned it or
2. But such instrument is in Truth: declined to assert it. (Tijam v Sibonghanoy, L-21450,
Apr. 15, 1968)
a. Invalid;
b. ineffective;
Q: May an action filed within the period of
c. voidable;
limitations, still be barred?
d. unenforceable;
e. has been extinguished or
A: Yes, by laches. (See Arts. 1431, 1433, 1437)
terminated;
f. has been barred by extinctive Q: Is an action to quiet title imprescriptible?
prescription.
3. Such instrument may be Prejudicial to the A: Yes. Even though the Civil Code does not include
title. an action to quiet title as one of those actions
which are imprescriptible, the SC in this case held
Q: What is the purpose of an action to remove that such action is imprescriptible. The basis of the
cloud on title? court is Art. 480. The imprescriptibility of an action
to quiet title is a general principle from American
A: It is intended to procure the cancellation, or jurisprudence. (Bucton v. Gabar, G.R. No. L-36359,
delivery of, release of an instrument, encumbrance, Jan.31, 1974)
or claim constituting a claim on plaintiff’s title, and
which may be used to injure or vex him in the VI. CO-OWNERSHIP
enjoyment of his title.
A. CHARACTERISTICS OF CO-OWNERSHIP
B. DISTINCTION BETWEEN QUIETING TITLE. 1. IN GENERAL
AND REMOVING/PREVENTING A CLOUD.
Q: What is co-ownership?
Q: Differentiate an action to quiet title from an
action to remove cloud on title. A: It is a state where an undivided thing or right
belongs to two or more persons. (Art. 484). It is the
A: right of common dominion which two or more
ACTION TO REMOVE persons have in a spiritual (or ideal) part of the
ACTION TO QUIET TITLE
CLOUD ON TITLE thing which is not physically divided.
To put an end to
For the removal of a Q: What are the characteristics of co-ownership?
troublesome litigation
possible foundation for
with respect to the
a future hostile claim A: PRES-LG
property involved
1. Plurality of subjects / owners;
A remedial action A preventive action 2. There is no mutual Representation by the
Involving a present To prevent a future co-owners;
adverse claim cloud on the title 3. It exists for the common Enjoyment of the
co-owners;
C. PRESCRIPTION OR NON-PRESCRIPTION 4. There is a Single object which is not
OF ACTION materially divided;
5. It has no distinct Legal personality
Q: What are the prescriptive periods for bringing 6. It is Governed first of all by the contract of
an action to quiet title? the parties; otherwise, by special legal
provisions, and in default of such
provisions, by the provisions of Title III of
A: the New Civil Code on co-ownership.
1. Plaintiff in possession – imprescriptible
115
Q: What are the requisites of co-ownership? Note: A sale of the entire property by one co-owner
without the consent of the other co-owners is not null
A: POL and void but affects only his undivided share and the
transferee gets only what would correspond to his
1. Plurality of owners; grantor in the partition of the thing owned in common
2. Object, which is an undivided thing or (Paulmitan vs. CA, GR No. 51584, Nov. 25, 1992.)
right;
3. Each co-owner’s right must be Limited Q: Can there be an agreement to keep the thing
only to his ideal share of the physical undivided for a certain period of time?
whole
A: Yes. An agreement to keep the thing n undivided
Note: By the very nature of co-ownership, a co- for a certain period of time, not exceeding ten
owner cannot point to any specific portion of the years, shall be valid. This term may be extended by
property owned in common as his own because his a new agreement.
share remains intangible and ideal(Spouses Avila et
A donor or testator may prohibit partition for a
al vs. Spouses Barabat, GR. No. 141993, May 17,
period which shall not exceed twenty years.
2006).
Neither shall there be any partition when it is
Q: What are the limitations upon the right of a co-
prohibited by law.
owner to use the thing owned in common?
Q: How do you determine the share of the co-
A: The thing should be used only: owners in the benefits and charges arising from
1. In accordance with the purpose for which the co-ownership?
it is intended;
2. In such a way as not to injure the interest A: According to the NCC, the share of the co-
of the co-ownership; and owners in the benefits and charges arising from the
3. In such a way as not to prevent the other co-ownership shall be proportional to their
co-owners from using it according to their respective interests and any stipulation in a
rights. (Art. 486) contract to the contrary shall be void. (Art. 485,
par.1) Consequently, in order to determine the
Q: What happens when a co-owner sells the whole share of the co-owners in the benefits and charges,
property as his? we must first determine their respective interests in
the co-ownership. Under the law, such interests are
A: The sale will affect only his own share but not presumed equal, unless the contrary is proved.
those of the other co-owners who did not consent (Art.485, par.2)
to the sale.
Q: Distinguish co-ownership from joint tenancy
A:
CO-OWNERSHIP JOINT OWNERSHIP
Tenancy in common Joint Tenancy
As to the extent of ownership
Each co-owner is the owner of his own ideal share. Each joint owner owns the whole thing.
As to disposition
Each co-owner may dispose of his undivided share Joint owner may not dispose of his own share without
without the other co-owners’ consent. of all the rest, because he really has no ideal share.
As to transfer of shares in case of death
Upon the death of a co-owner, his ideal share goes to Upon the death of a joint owner, his share goes to the
his heirs. other joint owners by accretion.
As to minority or legal disability

In case of a minor who is a co-owner, this does not The legal disability of one joint owner benefits the
benefit the others. others.
116 CIVIL LAW TEAM

PROPERTY
Prescription
Prescription will continue to run among co-owners Prescription will not run among them.
Q: Distinguish co-ownership from partnership.
A:
CO-OWNERSHIP ORDINARY PARTNERSHIP
No legal personality. With legal personality.
Can be created without the formalities of a Can be created only by contract, express or
contract. implied.
By contract or by will. By contract only.
Agreement to exist for more than 10 years is
No term limit is set by law.
void.
No mutual representation. There is mutual representation.
Not dissolved by the death/incapacity of a co-
Dissolved by death or incapacity of a partner.
owner.
A co-owner can dispose of his share w/o the
A partner cannot be substituted w/o the
consent of the others hence in a way a co-
consent of the others.
owner is substituted.
Profits of a co-owner depend on his Profits may be stipulated upon (for e.g., profit-
proportionate share. sharing agreements)
For collective enjoyment. For profit.
No public instrument is needed even if the May be made in any form except when real
object of the co-ownership is an immovable. property is contributed.
2. SPECIAL RULES: 1. a separate interest in a unit in a

residential, industrial or commercial
A. CONCEPT OF CONDOMINIUM building; and
2. an undivided interest in common, directly
(1) CONDOMINIUM CORPORATION or indirectly, in the
a. land on which it is located; and
Q: What is a condominium corporation? b. In other common areas of the
building.
A: A condominium may include, in addition, a
separate interest in other portions of such real (3) CONCEPT OF COMMON AREAS, AMENDMENT
property. Title to the common areas, including the
land, or the appurtenant interests in such areas, Q: What are common areas?
may be held by a corporation specially formed for
the purpose (known as the “condominium A: The entire project excepting all units separately
corporation”) in which the holders of separate granted or held or reserved.
interest shall automatically be members or
shareholders, to the exclusion of others, in Q: What is a project?
proportion to the appurtenant interest of their
respective units in the common areas. A: The entire parcel of real property divided or to
be divided in condominiums, including all structures
The real right in condominium may be ownership or thereon.
any other interest in real property recognized by
law, on property in the Civil Code and other Q: Where the common areas in the condominium
pertinent laws. (Sec. 2, RA No. 4726) are held by the owners of separate units as co-
owners thereof, to whom can the units therein be
(2) INTEREST IN REAL PROPERTY conveyed?
Q: What is a condominium? A: GR: Only to Filipino citizens.
A: An interest in real property consisting of; XPN: To aliens in case of hereditary succession.
117
(4) DOCUMENTS TO CONSIDER Note: The enabling or master deed may be amended
or revoked upon registration of an instrument
executed by the registered owner or owners of the
Q: What are the requirements before a property
property and consented to by all registered holders of
be considered divided or to be divided into
any lien or encumbrance on the land or building or
condominiums? portion thereof. The term “registered owner” shall
include the registered owners of condominiums in the
A: An enabling or master deed must be recorded in project. Until registration of a revocation, the
the Register of Deeds of the province or city in provisions of RA. No. 4726 shall continue to apply to
which the property lies and duly annotated in the such property. (Sec. 4, RA. No. 4726)
corresponding certificate of the title of the land, if
the latter has been patented or registered under
B. RIGHTS AND OBLIGATIONS OF CONDOMINIUM
either the Land Registration or Cadastral Acts. (Sec.
OWNER
4, RA. No. 4726)
(1) CONTRIBUTIONS/DUES
Q: What must an enabling or master deed
contain? Q: What are the incidents of a condominium
grant?
A:
1. Description of the land on which the building A: Unless otherwise expressly provided in the
or buildings and improvements are or are to enabling or master deed or the declaration of
be located; restrictions, the incidents of a condominium grant
2. Description of the building or buildings, stating are as follows:
the number of stories and basements, the
number of units and their accessories, if any; 1. The boundary of the unit granted are the
3. Description of the common areas and facilities; interior surfaces of the perimeter walls,
4. A statement of the exact nature of the interest floors, ceilings, windows and doors
acquired or to be acquired by the purchaser in thereof. The following are not part of the
the separate units and in the common areas of unit bearing walls, columns, floors, roofs,
the condominium project. Where title to or foundations and other common structural
the appurtenant interests in the common elements of the building; lobbies,
areas is or is to be held by a condominium stairways, hallways, and other areas of
corporation, a statement to this effect shall be common use, elevator equipment and
included; shafts, central heating, central
5. Statement of the purposes for which the refrigeration and central air-conditioning
building or buildings and each of the units are equipment, reservoirs, tanks, pumps and
intended or restricted as to use; other central services and facilities, pipes,
6. A certificate of the registered owner of the ducts, flues, chutes, conduits, wires and
property, if he is other than those executing other utility installations, wherever
the master deed, as well as of all registered located, except the outlets thereof when
holders of any lien or encumbrance on the located within the unit.
property, that they consent to the registration 2. There shall pass with the unit, as an
of the deed; appurtenance thereof, an exclusive
7. The following plans shall be appended to the easement for the use of the air space
deed as integral parts thereof: encompassed by the boundaries of the
a. A survey plan of the land included in the unit as it exists at any particular time and
project, unless a survey plan of the same as the unit may lawfully be altered or
property had previously bee filed in said reconstructed from time to time. Such
office; easement shall be automatically
b. A diagrammatic floor plan of the building terminated in any air space upon
or buildings in the project, in sufficient destruction of the unit as to render it
detail to identify each unit, its relative untenantable.
location and approximate dimensions; 3. Unless otherwise, provided, the common
8. Any reasonable restriction not contrary to law, areas are held in common by the holders
morals or public policy regarding the right of of units, in equal shares, one for each
any condominium owner to alienate or dispose unit.
of his condominium. 4. A non-exclusive easement for ingress,
egress and support through the common
118 CIVIL LAW TEAM

PROPERTY
areas is appurtenant to each unit and the condominium after such expropriation or
common areas are subject to such condemnation; or
easements. 5. That the Conditions for such partition by
5. Each condominium owner shall have the sale have been met.
exclusive right to paint, repaint, tile, wax,
paper or otherwise refinish and decorate Q: When can a Corporation Condominium be
the inner surfaces of the walls, ceilings, voluntarily dissolved?
floors, windows and doors bounding his
own unit. A:
6. Each condominium owner shall have the 1. By the affirmative vote of all the stockholders
exclusive right to mortgage, pledge or or members thereof at a general or special
encumber his condominium and to have meeting duly called for the purpose: Provided
the same appraised independently of the all the requirements of Section 62 of the
other condominiums but any obligation Corporation Law are complied with.
incurred by such condominium owner is
personal to him. 2. GR: When the enabling or master deed is
7. Each condominium owner has also the revoked
absolute right to sell or dispose of his
condominium unless the master deed XPN:
contains a requirement that the property
be first offered to the condominium
1. That 3 years after damage or
owners within a reasonable period of
destruction to the project which
time before the same is offered to outside
renders a material part thereof unfit
parties. (Sec. 6, RA No. 4726)
for its use prior thereto, it has not
been rebuilt or repaired substantially
C. GROUNDS FOR PARTITION OF COMMON AREAS, to its prior state; or
OR DISSOLUTION OF THE CONDOMINIUM 2. That damage or destruction to the
project has rendered 1/2 or more of
Q: Can the common areas be divided? the units therein untenantable and
that more than 50% of the members
A: GR: No, there can be no judicial partition. of the corporation, if non-stock, or
the shareholders representing more
XPNs: A partition shall be made only upon a than 30% of the capital stock entitled
showing that: COURE to vote, if a stock corporation, are
1. That 3 yrs after damage to the project opposed to the repair or
which rendered a material part thereof reconstruction of the project, or
unfit for its use prior thereto, it has not 3. That the project has been in
been Repaired substantially to its state existence in excess of 50 years, that
prior to said damage; or it is obsolete and uneconomical, and
2. That damage to the project has rendered more than 50% of the members of
1/2 or more of the units therein the corporation, if non-stock, or the
Untenantable and owners holding, in stockholders representing more than
aggregate, more than 30% interest in the 50% of the capital stock entitled to
common areas are opposed to the repair; vote, if a stock corporation, are
or opposed to the repair or restoration
3. That the project has been in existence for or remodeling or modernizing of the
more than 50 yrs, is Obsolete and is project; or
uneconomic, and owners holding, in 4. That the project or a material part
aggregate, more than 50% interest in the thereof has been condemned or
common areas are opposed to the repair expropriated and that the project is
or modernizing; or no longer viable, or that the
4. That the project or a material part thereof members holding in aggregate more
has been condemned or Expropriated, the than 70% interest in the corporation,
project is no longer viable and owners if non-stock, or the stockholders
holding, in aggregate, more than 70% representing more than 70% of the
interest in the common areas are capital stock entitled to vote, if a
opposed to continuation of the stock corporation, are opposed to
the continuation of the
119
condominium regime after Q: What are the general rights of each co-owner as
expropriation or condemnation of a to the thing owned in common?
material portion thereof; or
5. That the conditions for such a A: USA-COPE-P
dissolution have been met. (Secs. 13 1. To Use the thing according to the purpose
& 14, RA 4726) intended provided that:
a. It is w/o prejudice to the interest of
Q: If you are the owner of a unit in a condominium the co-ownership; and
project, such as an apartment, office or store, can b. W/o preventing the use of other co-
you transfer your interest in the project to a third owners. (Art. 486)
person? Explain your answer? 2. To Share in the benefits in proportion to
his interest, provided the charges are
borne in the same proportion. (Art. 485)
A: Yes, I can. However, the limitations prescribed by
Sec.5 of the Condominium Act must be observed. Note: A contrary stipulation is void. Hence,
According to this section “Any transfer or benefits cannot be stipulated upon by the
conveyance of a unit or an apartment, office or co-owners.
store or other space therein, shall include the
transfer or conveyance of the undivided interest in 3. Each co-owner may bring an Action for
the common areas or, in a proper case, the ejectment. (Art. 487)
membership or shareholding in the condominium
corporation: Provided, however, That where the Note: Action for ejectment covers; forcible
common areas in the condominium project are held entry, unlawful detainer, accion publiciana,
by the owners of separate units as co-owners quieting of title, accion reivindicatoria,
thereof, no condominium unit therein shall be replevin.
conveyed or transferred to person other than
Filipino citizens or corporations at least 60% of the 4. To Compel other co-owners to contribute
capital stock of which belong to Filipino citizens, to expenses for preservation of the thing
except in cases of hereditary succession. Where the (Art. 488)
common areas in a condominium project are held 5. To Oppose to any act of alteration (Art.
by a corporation, no transfer or conveyance of a 491) even if beneficial to the co-owners.
unit shall be valid if the concomitant transfer of the 6. To Protect against acts of majority which
appurtenant membership or stockholding in the are prejudicial to the minority (Art. 492,
corporation will cause the alien interest in such par. 3)
corporation to exceed the limits imposed by 7. To Exercise legal redemption.
existing laws.” 8. To ask for Partition (Art. 494)
9. Right to exempt himself from obligation
of paying necessary expenses and taxes
B. SOURCE OF CO-OWNERSHIP
by renouncing his share in the pro-
indiviso interest; but can’t be made if
Q: What are the sources of co-ownership? prejudicial to co-ownership
10. Right to make repairs for preservation of
A: LOST-CC things can be made at will of one co-
1. Law - ex. easement of party walls (Article owner; receive reimbursement
658, NCC) therefrom; notice of necessity of such
2. Occupancy - ex. when two persons gather repairs must be given to co-owners, if
forest products or catch a wild animal practicable.
3. Succession- ex. heirs of undivided 11. Right to full ownership of his part and
property before partition fruits
4. Testamentary (or mortis causa) / 12. Right to alienate, assign or mortgage own
Donation inter vivos part; except personal rights like right to
i.e. Where the donor prohibits use and habitation
partition of the property for a 13. Right of pre-emption
certain period of time 14. Right to be adjudicated thing (subject to
5. Contract right of others to be indemnified)
6. by Chance or fortuitous event 15. Right to share in proceeds of sale of thing
Example: Hidden treasure if thing is indivisible and they cannot
agree that it be allotted to one of them.
C. RIGHTS OF CO-OWNERS
120 CIVIL LAW TEAM

PROPERTY
Q: What is the effect of redemption of the whole

property of a co-owner? EJECTMENT
A: Redemption of the whole property by a co- Q: Borromeo, a co-owner of a parcel of land,
owner does not vest in him sole ownership over allowed Resuena to reside in said land. After
said property. Redemption within the period sometime, Borromeo later demands that Resuena
prescribed by law by a co-owner will inure to the should vacate the property, but the latter refused.
benefit of all co-owners. Hence, it will not put an May Borromeo file an ejectment suit even if he is a
end to existing co-ownership.(Mariano vs. CA 222 mere co-owner of the lot?
SCRA 76, 1993)
A: Yes. Art. 487 of the Civil Code which provides
Q: What are the duties/liabilities of co-owners? that “anyone of the co-owners may bring an action
A: in ejectment” is a categorical and an unqualified
authority in favor of Borromeo to evict Resuena
1. Share in charges proportional to from the portion occupied. Borromeo’s action for
respective interest; stipulation to contrary ejectment against Resuena is deemed to be
is void. instituted for the benefit of all co-owners of the
2. Pay necessary expenses and taxes – may property. (Resuena v. CA, G.R. No. 128338, Mar. 28,
be exercised by only one co-owner 2005)
3. Pay useful and luxurious expenses – if
determined by majority Q: Does the filing of an ejectment suit require the
4. Duty to obtain consent of all if thing is to consent of the other co-owners?
be altered even if beneficial; resort to
court if non-consent is manifestly A: No. Art.487 states that “any one of the co-
prejudicial owners may bring action for ejectment”. The law
5. Duty to obtain consent of majority with does not require that consent of the co-owners
regards to administration and better must be first secured before bringing an action for
enjoyment of the thing; controlling ejectment.
interest; court intervention if prejudicial –
appointment of administrator Q: What if the case does not prosper, are the other
6. No prescription to run in favor co-owner co-owners bound by the judgment?
as long as he recognizes co-ownership;
requisites for acquisition through A: GR: No.
prescription
a. He has repudiated through XPN: They were also served with summons,
unequivocal acts even as unwilling plaintiffs.
b. Such act of repudiation is made
known to other co-owners Q: Can suit for ejectment be brought by one co-
c. Evidence must be clear and owner against another co-owner?
convincing
A: No, since the latter also has a right of possession;
7. Co-owners cannot ask for physical division
the only effect of the action will be to obtain
if it would render thing unserviceable; but
recognition of the co-ownership.
can terminate co-ownership.
8. After partition, duty to render mutual
accounting of benefits and 1. DISTINCTION BETWEEN RIGHT TO PROPERTY
reimbursements for expenses. OWNED IN COMMON AND FULL OWNERSHIP
rd
OVER HIS/HER IDEAL SHARE
Q: What are the rights of a co-owner to 3
parties?
Q: Distinguish right to property owned in common
A: and full ownership over his/her ideal share
1. Assignees may take part in division and object
if being effected without their concurrence, A:
but cannot impugn unless there is fraud or a. Right to property owned in common
made not withstanding their formal
opposition.
Each co- owner is granted the right to use the
2. Non-intervenors – retain rights of mortgage
property owned in common for the purpose for
and servitude and other real rights and
which it is intended.
personal rights belonging to them before
partition was made.
121
There are two restrictions in the enjoyment of this

substance or form or essence of the thing
right:
In relation to the
i. the co- ownership shall not be injured; right of a co-owner,
Requires the consent of all co-
ii. the exercise shall not prevent the other they require the
owners
co- owners from using the property consent of the
according to their own rights. majority
Can be exercised
b. Full ownership over his/her ideal share Must be exercised by the co-
by the co-owners
owners themselves
through others
A co- owner has full ownership of his share
(undivided interest) and the fruits and benefits
arising therefrom. Being the full owner thereof he Q: What is the liability of a co-owner who makes
may alienate, assign or mortgage it; he can also an alteration without the express or implied
substitute another person in the enjoyment of his consent of the others?
share, except only when personal rights are
involved. A: He shall: LDP
1. Lose what he has spent;
2. ACTS OF ALTERATION 2. Be obliged to Demolish the improvements
done; and
3. Pay for the loss and damages the
Q: What is an alteration?
community property or other co-owners
A: Alteration is a change which is more or less may have suffered.
permanent, which changes the use of the thing and
which prejudices the condition of the thing or its Q: What is conversion?
enjoyment by the others. (Paras, p.344)
A: It refers to the act of using or disposing of
Q: What does alteration include? another’s property without lawful authority to do
so in a manner different from that with which a
A: It includes the act by virtue of which a co-owner property is held by the trustees to whom the owner
changes the thing from the state in which the had entrusted the same. It is not necessary that the
others believe it should remain. It is not limited to use for which the property is given be directly to
material charges. (Viterbo v. Quinto, 35226-R, Dec. the advantage of the person misappropriating or
19, 1973) converting the property of another. (People v.
Carballo, 17136-CR, Nov. 17, 1976)
Q: Distinguish acts of administration from acts of
alteration. 3. RIGHT TO PARTITION
A: Q: What are the rights of co-owners as to the ideal

share of each?
ACTS OF
ACTS OF ALTERATION
ADMINISTRATION
A: FARTS
Acts, by virtue of which, a co- 1. Each has Full ownership of his part and of
owner, in opposition to the his share of the fruits and benefits;
Refer to the 2. Right to Alienate, dispose or encumber;
expressed or tacit agreement
enjoyment, 3. Right to Renounce part of his interest to
of all the co-owners, and in
exploitation, reimburse necessary expenses incurred
violation of their will, changes
alteration of the by another co-owner;
the thing from the state in
thing which do not 4. Right to enter into Transaction affecting
which the others believe it
affect its substance, his ideal share;
would remain, or withdraws it
form, or purpose
from the use to which they
Note: The transaction affects only his ideal
believe it is intended
share not that of the other co-owners.
Transitory in
Permanent 5. Right to Substitute another person in its
character
enjoyment, except when personal rights
Do not affect the Affect or relate the substance are involved.
122 CIVIL LAW TEAM

PROPERTY
XPN: Co-owner's possession may be deemed

Note: Personal rights or jus in personam is adverse to the cestui que trust or the other co-
the power belonging to one person to owners provided the following elements must
demand from another, as a definite passive concur:
subject-debtor, the fulfillment of a 1. That he has performed unequivocal acts
prestation to give, to do, or not to do. of repudiation amounting to an ouster of
(Paras, p.773) the cestui que trust or the other co-
owners;
Q: What is the rule as regards to the right to
2. That such positive acts of repudiation
demand partition?
have been made known to the cestui que
trust or the other co-owners; and
A: GR: Every co-owner has the right to demand
3. That the evidence thereon must be clear
partition.
and convincing. (Salvador v. CA, G.R. No.
109910, Apr. 5, 1995)
XPNs: EAS-PAUL
1. When partition would render the thing
Note: Prescription begins to run from the
Unserviceable; or
time of repudiation.
2. When the thing is essentially Indivisible;
3. Partition is prohibited by Law by reason of
Example of acts of repudiation: filing of an
their origin or juridical nature- ex. party
action to:
walls and fences;
1. Quiet title; or
4. When the co-owners Agree to keep the
2. Recovery of ownership.
property undivided for a period of time
but not more than 10 yrs;
XPN to XPN: Constructive trusts can
5. Partition is Prohibited by the transferor
prescribe. Express trust cannot prescribe as
(donor / testator) but not more than 20
long as the relationship between trustor and
yrs;
trustee is recognized. (Paras, p. 362)
Note: 10 years ordinary prescription, 30
Q: The two lots owned by Alipio was inherited by
years extra-ordinary partition.
his 9 children, including Maria, upon his death.
Pastor, Maria’s husband, filed a complaint for
6. When a co-owner possessed the property
quieting of title and annulment of documents
as an Exclusive owner for a period
against the spouses Yabo, alleging that he owned a
sufficient to acquire it through
total of 8 shares of the subject lots, having
prescription. (Acquisitive Prescription)
purchased the shares of 7 of Alipio's children and
7. Co-owners may agree that it be Allotted
inherited the share of his wife, Maria, and that he
to one of them reimbursing the others;
occupied, cultivated, and possessed continuously,
8. If they cannot agree, may Sell the thing
openly, peacefully, and exclusively the parcels of
and distribute the proceeds.
land. He prayed that he be declared the absolute
owner of 8/9 of the lots. His co-heirs then
Q: May the right to ask for partition be waived or
instituted an action to partition the lots. Did
renounced permanently?
Pastor acquire by prescription the shares of his
other co-heirs or co-owners?
A: No, such waiver or renunciation is void.
A: No. The only act which may be deemed as
Q: Can prescription run in favor of or against a co-
repudiation by Pastor of the co-ownership over the
owner?
lots is his filing of an action to quiet title. The period
of prescription started to run only from this
A: GR: As long as he expressly or impliedly
repudiation. However, this was tolled when his co-
recognizes the co-ownership, it cannot.
heirs, instituted an action for partition of the lots.
Hence, the adverse possession by Pastor being for
Reason: Possession of a co-owner is like that of a
only about 6 months would not vest in him
trustee and shall not be regarded as adverse to
exclusive ownership of his wife's estate, and absent
the other co-owners but in fact is beneficial to all
acquisitive prescription of ownership, laches and
of them. Acts considered adverse to strangers
prescription of the action for partition will not lie in
may not be considered adverse insofar as co-
favor of Pastor. (Salvador v. CA, G.R. No. 109910,
owners are concerned. (Salvador v. CA, G.R. No.
Apr. 5, 1995)
109910, Apr. 5, 1995)
123
Q: Should creditors and/or assignees be notified of 4. RIGHT TO CONTRIBUTIONS FOR EXPENSES

the proposed partition?
Q: What are the expenses which the co-owners
A: The law does not require that a notification be can be compelled to contribute?
given but:
1. If notice is given- it is their duty to appear A: Only necessary expenses. Useful expenses and
to concur /oppose, otherwise creditor’s those for pure luxury are not included.
claims are deemed waived.
2. If no notice is given- creditors and/or Q: Differentiate necessary, useful, expense of pure
assignees may still question the partition luxury.
made.
A: Necessary expenses are those made for the
Q: Can a partition already executed or preservation of the thing, or those without which
implemented be still impugned? the thing would deteriorate or be lost, or those that
augment the income of the things upon which are
A: GR: No. expended, or those incurred for cultivation,
production, upkeep, etc. (Mendoza v De Guzman,
XPN: 52 Phil. 171)
1. In case of fraud, regardless of notification
and opposition; Useful expenses incurred for the preservation of
2. In case of partition was made over their the realty in order that it may produce the natural,
objection even in absence of fraud (Article industrial, and civil fruits it ordinarily produce.
497) (Marcelino v. Miguel, 53 OG 5650)
Q: What are rights of co-owners are not affected Ornamental expenses add value to the thing only
by partition? for a certain persons in view of their particular
whims, neither essential for preservation nor useful
A: MRS-P to everybody in general.
1. Rights of:
a. Mortgage; Q: When may acts of preservation made in the
b. Servitude; property of the co-owners?
c. any other Real rights existing before
partition. A: At the will of one of the co-owners, but he must,
2. Personal rights pertaining to third persons if practicable, first notify the others of the necessity
against the co-ownership (Art. 499, NCC) of such repairs.
Q: What are those acts which require the majority

Example: A, B and C where co-owners of parcel of
consent of the co-owners?
land mortgaged to M. If A, B, and C should
physically partition the property, the mortgage in
A: IME
M’s favor still covers all the three lots, which,
a. Management
together, formerly constituted one single parcel. If
b. Enjoyment
A alone had contracted an unsecured obligation, he
c. Improvement or embellishment
would of course be the only one responsible.
(Paras, p. 376)
Q: What is the remedy in case the minority
opposes the decision of the majority in co-
Q: What are the rights of third persons in case of ownership?
partition?
A: Minority may appeal to the court against the
A: majority’s decision if the same is seriously
1. The partition of a thing owned in common prejudicial.
shall not prejudice third persons, who shall
retain the rights of mortgage, servitude or nay Q: Who shall decide on matters relating to
other real rights belonging to them before the expenses for the improvement or embellishment
division was made; of the thing?
2. Personal rights pertaining to them against the
co-ownership shall also remain in force, A: Expenses to improve or embellish the thing shall
notwithstanding the partition. be decided upon by the majority. (Art. 489, NCC)
124 CIVIL LAW TEAM

PROPERTY
Note: There is no majority unless the resolution is

approved by the co-owners who represent the A: The shares of all or any other co-owner if sold to
controlling interest in the object of the co-ownership a third person.
(par. 2 Art. 492)
Q: What if two or more co-owners want to
1. WAIVER redeem?
Q: May a co-owner opt not to contribute to the A: They may do so in proportion to the shares they
expenses for the preservation of the property? respectively have.
How?
Q: What is the effect of redemption by a co-
A: GR: Yes, by renouncing his undivided interest owner?
equal to the amount of contribution.
A: Redemption of the whole property by a co-
XPN: If the waiver or renunciation is prejudicial owner does not vest in him sole ownership over
to the co-ownership, otherwise he cannot said property. Redemption within the period
exempt himself from the contribution (Art. prescribed by law will inure to the benefit of all co-
488) owners. Hence, it will not put an end to existing co-
ownership (Mariano v. CA, GR. No. 101522, May 28,
Note: The value of the property at the time of the 1993).
renunciation will be the basis of the portion to be
renounced. Q: Fortunato, his siblings and mother are co-
owners of a parcel of land. Lumayno purchased
Q: Is the failure or refusal of a co-owner to the shares of Fortunato’s co-owners. When
contribute pro rata to his share in expenses Fortunato died, his wife claimed that she has the
tantamount to renunciation? right of redemption over the shares previously
sold by the co-owners to Lumayno because they
A: No, there must be an express renunciation, have not formally subdivided the property.
otherwise he is required to reimburse the others However, although the lot had not yet been
for the expenses they incurred. formally subdivided, still, the particular portions
belonging to the co-owners had already been
Q: What is the effect of renunciation? ascertained. In fact the co-owners took possession
of their respective parts. Can Fortunato’s wife be
A: It is in effect a dacion en pago since there is a entitled to right of legal redemption?
change in the object of the obligation (i.e. from sum
of money to interest in the co-ownership). A: No. She is no longer entitled to the right of legal
Consequently, the consent of the other co-owners redemption under Art. 1632 of the Civil Code. As
is necessary. legal redemption is intended to minimize co-
ownership, once the property is subdivided and
Note: Dacion en pago is a juridical concept whereby a distributed among the co-owners the community
debtor pays off his obligations to the creditor by the ceases to exist and there is no more reason to
conveyance of ownership of his property as an
sustain any right of legal redemption. The exercise
accepted equivalent of performance or payment. The
of this right presupposes the existence of a co-
end result may be the same, but the concept is entirely
ownership at the time the conveyance is made by a
different from that of a purchase. (Damicog v.
Desquitada, CV – 43611, Oct. 3, 1983) co-owner and when it is demanded by the other co-
owners. Even an oral agreement of partition is valid
Q: Can the renunciation be made without the and binding upon the parties. (Vda. de Ape v. CA,
consent of any unpaid creditor? G.R. No. 133638, Apr. 15, 2005)
A: No, for it is in effect a novation by substitution, it Q: Villaner, upon death of his wife, sold the
will prejudice the rights of the unpaid creditor. conjugal property to Leonardo. Villaner’s 8
children, as co-owners of the property, now claim
Note: Novation by substitution is the substitution of that the sale does not bind them as they did not
the person of the debtor. consent to such undertaking. Is the sale binding on
the children?
6. RIGHT OF REDEMPTION OF CO-OWNERS SHARE
A: No. While a co-owner has the right to freely sell
and dispose of his undivided interest, nevertheless,
Q: Whose shares may a co-owner redeem? as a co-owner, he cannot alienate the shares of his
125
other co-owners. The disposition made by Villaner lasted (Art. 543, NCC). In other words, it is
affects only his share pro indiviso, and the deemed continuous.
transferee gets only what corresponds to his
grantor's share in the partition of the property 2. RIGHTS AGAINST INDIVIDUAL CO-OWNERS IN
owned in common. The property being conjugal, CASE OF PARTITION
Villaner's interest in it is the undivided one-half
portion. When his wife died, her rights to the other
Q: What are the obligations of co-owners upon
half was vested to her heirs including Villaner and
partition?
their 8 legitimate children.
Q: What is the status of the sale? Is it valid, void or A: WARD

voidable? 1. Mutual Accounting for benefits received,
fruits and other benefits
A: A sale of the entire property by one co-owner 2. Mutual Reimbursements for expenses
without the consent of the other co-owners is valid. 3. Indemnity for Damages caused by reason
However, it will only affect the interest or share in of negligence/fraud
the undivided property of the co-owner who sold 4. Reciprocal Warranty for defects of title
the same. and quality of the portion assigned to the
co-owner (Art. 500-501)
Q: What is the remedy of the other heirs in this
case? 3. PARTITION IN CASE CO-OWNERS CANNOT
AGREE
A: The proper action in cases like this is not for the
nullification of the sale or the recovery of
Q: How is partition effected?
possession of the thing owned in common from the
third person who substituted the co-owner or co-
A:
owners who alienated their shares, but the division
1. By agreement between the parties; or
of the common property or that is, an action for
2. By judicial proceedings (Art. 496)
partition under Rule 69 of the Revised Rules of
Court. (Acabal v. Acabal, G.R. No. 148376, Mar. 31,
Q: What is the remedy in case the co – owners
2005)
cannot agree in the partition?
D. TERMINATION/EXTINGUISHMENT A: If realty is involved, an action for partition (under

Rule 69 of the Rules of Court) against the co-owners
Q: How is co-ownership extinguished? may be filed. In case of personalty and actual
partition could not be made, it may be sold under
A: CALSTEP the discretion of the court and the proceeds be
1. Consolidation or merger in one co-owner; divided among the owners after deducting the
2. Acquisitive prescription in favor of a third necessary expenses
person or a co-owner who repudiates;
3. Loss or destruction of thing co-owned;
4. Sale of thing co-owned; Q: What is the rule in case the co-owners cannot
5. Termination of period agreed upon; agree as to the partition of a thing which is
6. Expropriation; essentially indivisible?
7. Judicial or extra-judicial Partition.
A:
1. Firstly, the property may be allotted to one of
1. EFFECT OF PARTITION
the co-owners, who shall indemnify the other;
2. Otherwise, it shall be sold, and the proceeds
Q: What are the effects of partition? distributed. (Art. 498)
A: VII. POSSESSION
1. It confers upon the co-owner exclusive title
over the property adjudicated to him (Art. A. CHARACTERISTICS
1091);
2. Possession of the co-owner over the property Q: What is possession?
adjudicated to him shall be deemed exclusive
for the period during which the co-possession
126 CIVIL LAW TEAM

PROPERTY
A: Possession is the holding of a thing or the the right they respectively exercise over the
enjoyment of a right (Art. 523) thing.
Q: What are the requisites of possession? 7. Possession in Good faith

8. Possession in Bad faith
A: PAP
1. Possession in fact or holding or control of Note: Only personal knowledge of the flaw
a thing or right; in one’s title or mode of acquisition can
2. Animus possidendi or the deliberate make him possessor in bad faith. It is not
transmissible even to an heir.
intention to possess;
3. Possession by virtue of one’s own right
Possession in good faith ceases from the
moment defects in his title are made known
Q: What are the degrees of possession? to the possessor.
Distinguish.
9. Constructive possession- does not mean
A: NJJS
that a man has to have his feet on every
1. Possession with No right or title-
square meter of ground.
possessor knows that his possession is
wrongful,
Q: What kind of possession can serve as title?
2. With Juridical title - possession peaceably
acquired and will not ripen into full A: Possession with title in fee simple.
ownership as long as there is no
repudiation of the concept under which Q: Differentiate possession and occupation
property is held.
3. With Just title or title sufficient to transfer A:
ownership, but not from the true owner - POSSESSION OCCUPATION
ripens to full ownership by the lapse of Apply to properties Applies only to
time. whether with or without property without an
4. With a title in fee Simple - springs from an owner owner
ownership; highest degree of possession. Possession does not Occupation confers
confer ownership ownership
Q: What are the classes of possession? There can be no
There can be possession
occupation without
A: OVAL-OH-GBC without ownership
ownership
1. In one’s Own name – possessor claims the
thing for himself Q: Is it possible for a person who has been
2. Voluntary – by virtue of an agreement declared as the owner of a certain property not to
3. In the name of Another – held by the be entitled to its possession?
possessor for another; agent, subject to
authority and ratification; if not A: Yes. Possession and ownership are distinct legal
authorized, negotiorum gestio concepts. Ownership confers certain rights to the
4. Legal – by virtue of law; owner among which are the right to enjoy the thing
e.g. possession in behalf of incapacitated owned and the right to exclude other persons from
5. In the Concept of an owner (en concepto possession thereof. On the other hand, possession
de dueno)– possessor, by his actions, is is defined as the holding of a thing or the
believed by others as the owner, whether enjoyment of a right. Literally, to possess means to
he is in good or bad faith actually and physically occupy a thing with or
6. In the concept of a Holder – possessor without a right. Thus a person may be declared an
holds it merely to keep or enjoy it, the owner but not entitled to possession. (Heirs of
ownership pertaining to another; ex. Roman Soriano v. CA, GR No. 128177, August 15,
usufructuary 2001)
Note: Possession is merely one of the attributes

Note: None of these holders may assert a ownership. (Jus Possidendi)
claim of ownership for himself over the
thing but they may be considered as
B. ACQUISITION OF POSSESSION
possessors in the concept of an owner, or
under a claim of ownership, with respect to
Q: What are the ways of acquiring possession?
127
A: FAMS Q: When does possession in good faith cease?

1. By Material occupation/exercise of a
right A: Possession in good faith ceases from the
2. By Subjection of the thing/right to our moment defects in his title are made known to the
will possessor.
3. By proper Acts and legal Formalities
established for acquiring such right (Art. This interruption of good faith may take place:
531) 1. at the date of summons or
2. that of the answer if the date of summons
Q: What if the possession is acquired by a does not appear at the date
stranger?
Q: What is the effect in case possession ceases to
A: Where possession is acquired not by an agent or be in good faith?
representative but by a stranger without agency,
possession is not acquired until the act of the agent A: Possessor in bad faith is required to pay rent or
or representative is ratified (Art. 532). in case vacate the property, in both cases he is
required to pay damages to the lawful owner or
Q: What are the acts which do not give rise to possessor of the property.
possession?
Q: Jose offered to sell his lot to Rosario which the
A: Possession through: FAT-V latter accepted. They executed a document
1. Force or intimidation as long as there is a containing the sale. Later, Rosario sought the
possessor who objects thereto. (Art. 536) execution of the formal deed of sale, but Jose
2. Acts executed clandestinely and without could not continue the sale because he sold the lot
the knowledge of the possessor which to Emma with whom he executed a formal deed of
means that: sale. Informed that the sale in favor of Emma was
a. acts are not public; and not registered, Rosario registered her adverse
b. unknown to the owner or possessor claim. Later, Emma registered her deed of sale and
3. Mere Tolerance by the owner or the a TCT was issued to her but with Rosario’s adverse
lawful possessor. claim. Emma then took possession of the lot. Who
4. Acts executed by Violence. (Art 537) has a better right to the land?
Q: What kind of possession can serve as a title for A: Rosario. To merit the protection of Art 1544
acquiring dominion? (double sale) it is essential that the buyer of the
realty must act in good faith in registering his deed
A: Only the possession acquired and enjoyed in the of sale. Rosario’s prior purchase of the land was
concept of owner. (Art. 540) made in good faith; she was the only buyer at that
time. Her good faith did not cease after Jose told
C. EFFECTS OF POSSESSION him of the second sale to Emma. Because of that
information, Rosario wanted an audience with
1. POSSESSOR IN GOOD FAITH Emma but was snubbed by the latter. In order to
protect her right, Rosario registered her adverse
Q: When is a possessor in good faith? claim. Said recording is deemed to be in good faith
and emphasize Emma’s bad faith. (Carbonell v.CA
A: When he is not aware that there exists in his title G.R. No. L-29972, Jan. 26, 1976)
or mode of acquisition any flaw which invalidates it.
(Art. 526) Q: Is Emma entitled to the improvements she
introduced in the lot?
Q: What are the requisites in order to be
considered a possessor in good faith? A: No. Emma’s rights to the improvements she
introduced are governed by Arts. 546 and 547
A: (necessary and useful expense made by possessor
1. Ostensible title or mode of acquisition in good faith). These provisions seem to imply that
2. Vice or defect in the title the possessor in bad faith has neither the right of
3. Possessor is ignorant of the vice or defect and retention of useful improvements nor the right to
must have an honest belief that the thing demand refund for useful expenses. (Carbonell v.CA
belongs to him. G.R. No. L-29972, Jan. 26, 1976)
128 CIVIL LAW TEAM

PROPERTY
Q: What are the rights of a possessor? Q: What if the possessor refuses, for any reason,
to finish the cultivation and gathering?
A:
GOOD FAITH BAD FAITH A: He forfeits the right to be indemnified in any
As to fruits received other manner. (Art. 545, par. 3)
Reimburse fruits
Entitled while B. RIGHT TO BE REIMBURSED
received or which lawful
possession is in good
possessor would have
faith (1) NECESSARY AND USEFUL EXPENSES
received
As to pending fruits
Liable to the lawful No right to such pending Q: What are necessary expenses?
possessor for expenses fruits
of cultivation and shall A: Expenses incurred to preserve the property,
share in net harvest to without which, said property will physically
time of possession deteriorate or be lost.
As to expenses:
(Necessary expenses) Q: Who is entitled to reimbursement for necessary
Right of reimbursement Right of reimbursement expenses?
and retention and retention
(Useful expenses) A: Every possessor, whether the possessor is in
Right of removal No right of removal good faith or bad faith.
(Ornamental Expenses)
Reimbursement at Note: However, only the possessor in good faith may
owner’s option, retain the thing until he has been reimbursed. (Art.
however, removal can No reimbursement 546)
be effected provided no
injury is incurred Q: What are useful expenses?
As to liability in case of deterioration or loss
No liability, unless due Always liable for
A: Those which increase the value or productivity of
to his fault/negligence deterioration or loss
the property.
A. RIGHT TO PENDING FRUITS

Q: Who has the right to be refunded for useful
expenses?
Q: When are fruits considered received?
A: A: Only to the possessor in good faith with the

1. Natural and industrial fruits- from the time same right of retention as in necessary expenses.
they are gathered or severed (Art. 546)
2. Civil fruits - from the time of their accrual and
not their actual receipt. (Art. 544) Q: What is the effect of voluntary surrender of
property?
Q: What if there are ungathered natural or
industrial fruits at the time good faith ceases? A: It is a waiver of the possessor’s right of retention
but his right to be refunded may still be enforced,
A: The possessor shall share in the expenses of unless he also waived the same.
cultivation, net harvest, and charges in proportion
to the time of possession. (Art 545)
Q: May a possessor remove the useful
Q: What are the options of the owner in case there improvements he introduced?
are pending fruits at the time good faith ceases?
A: Yes, but only by a possessor in good faith and
A: only when no substantial damage or injury would
1. To pay the possessor in good faith indemnity be caused to the principal thing. (Art. 547)
for his cultivation expenses and charges and
his share in the net harvest; or Note: However, this right of removal is only
2. To allow him to finish the cultivation and subordinate to the owner’s right to keep the
gathering of the growing fruits. improvements himself by paying the expenses
129
incurred or the concomitant increase in the value of good faith. It is true that “ignorance of the law
the property caused by the improvements. excuses no one” but error in the application of the
law, in the legal solutions arising from such
(2) EXPENSES FOR PURE LUXURY application, and the interpretation of doubtful
doctrine can still make a person ignorance of the
law may be based on an error of fact. (Paras, p 463)
Q: What are luxurious expenses?
Note: Mistake upon a doubtful or difficult question of
A: Expenses incurred for improvements introduced law refers to the honest error in the application or
for pure luxury or mere pleasure. interpretation of doubtful or conflicting legal
provisions/doctrines, and not to the ignorance of the
Q: Are luxurious expenses refundable? law. (Art. 526, par. 3)
Q When Dolorico died, his guardian Ortiz

A: No, even if the possessor is in good faith. continued the cultivation and possession of the
property, without filing any application to acquire
Note: But he may remove the luxurious improvements title. In the homestead application, Dolorico
if the principal thing suffers no injury thereby, and if named Martin, as his heir and successor in
his successor in the possession does not prefer to interest. Martin later relinquished his rights in
refund the amount expended. (Art. 548) favor of Quirino his grandson and requested the
Director of Lands to cancel the homestead
2. POSSESSOR IN BAD FAITH application which was granted. Quirino filed his
sales applications and the said property was
Q: When is a possessor in bad faith? awarded to him being the only bidder. Is Ortiz
entitled to right of retention?
A: When he is aware that there exists in his title or
mode of acquisition any flaw which invalidates it. A: Yes. A possessor in good faith has the right of
retention of the property until he has been fully
Note: Only personal knowledge of the flaw in one’s reimbursed for all the necessary and useful
title or mode of acquisition can make him a possessor expenses made by him on the property. Its object is
in bad faith. to guarantee the reimbursement for the expenses,
such as those for the preservation of the property,
Q: When is good or bad faith material or or for the enhancement of its utility or productivity.
immaterial? It permits the actual possessor to remain in
possession while he has not been reimbursed by
A: It is important in connection with the the person who defeated him in the possession for
1. receipt of fruits, those necessary expenses and useful improvements
2. indemnity for expenses, and made by him on the thing possessed. (Ortiz v.
3. acquisition of ownership by prescription. Kayanan, G.R. No. L-32974, July 30, 1979)
It becomes immaterial when the right to recover is Q: What is the rule when two or more persons
exercised. (Art. 539) claim possession over the same property?
Q: What are the requisites to constitute A: It depends.

possession whether in good faith or in bad faith? GR: Possession cannot be recognized in two
different personalities
A:
1. Possessor has a title/mode of acquisition; XPN: In case of co-possession when there is no
2. There is a flaw or defect in said title/mode; conflict.
3. The possessor is aware or unaware of the flaw
or defect. Q: What are the criteria in case there is a dispute
of possession of 2 or more persons?
Q: May mistake upon a doubtful questions or
difficult question of law be the basis of possession A: Criteria in case of dispute: [A2DE]
in good faith? 1. Present/Actual possessor shall be
preferred
A: Yes. Mistake upon a doubtful or difficult 2. If there are 2 possessors, the one longer
questions of law (provided such ignorance is not in possession
gross and therefore inexcusable) may be a basis of
130 CIVIL LAW TEAM

PROPERTY
3. If the Dates of possession are the same, considerably diminish its value, it shall be sold at
the one with a title public auction eight days after the publication.
If all of the above are Equal, the fact of possession Q: May the lost movable be awarded to the
shall be judicially determined, and in the meantime, finder?
the thing shall be placed in judicial deposit. (Art.
538) A: Yes. If the owner or previous possessor did not
appear after 6 months from the publication, the
Q: What are the acts which do not give rise to thing found or its value or proceeds if there was a
possession? sale, shall be awarded to the finder. The finder ,
however, shall pay for the expenses incurred for the
A: Possession through: FAT-V publication. (Art. 719)
1. Force or intimidation as long as there is a
possessor who objects thereto. (Art. 536) Q: What is the duty of the owner who appeared?
2. Acts executed clandestinely and without
the knowledge of the possessor which A:
means that: 1. Give a reward to the finder equivalent to one-
a. acts are not public; and tenth (1/10) of the sum or of the price of the
b. unknown to the owner or possessor thing found. (Art. 720)
3. Mere Tolerance by the owner or the 2. Reimburse to the finder for the latter’s
lawful possessor. expenses incurred for the preservation of the
4. Acts executed by Violence. (Art 537) thing. (Art. 546) and expenses spent for the
location of the owner
Q: What kind of possession can serve as a title for 3. Reimburse the expenses for publication if
acquiring dominion? there was a public auction sale. (Pineda
Property, p. 505, 1999 ed)
A: Only the possession acquired and enjoyed in the
concept of owner. (Art. 540) 1. PERIOD TO RECOVER
D. LOSS OR UNLAWFUL DEPRIVATION OF A See: Prescriptive Periods

MOVABLE
2. FINDER OF LOST MOVABLE
Q: What is a lost thing?
Q: What is the right of a possessor who acquires a
movable claimed by another?
A: It is one previously under the lawful possession
and control of a person but is now without any
A:
possessor.
1. Bad faith - no right
2. Good faith- presumed ownership. It is
Note: An abandoned property is not considered as equivalent to title.
a lost thing. (Pineda Property, p. 503, 1999 ed) Requisites:
a. possession in good faith
Q: What is the duty of a finder of a lost movable? b. owner has voluntarily parted with the
possession of the thing; and
A: Whoever finds a lost movable, which is not a c. Possessor is in the concept of an owner.
treasure, must return it to its previous possessor. If
the latter is unknown, the finder shall immediately Q: Is the possession of movable property acquired
deposit it with the mayor of the city or municipality in good faith equivalent to a title?
where the finding has taken place.
A: Yes.
Note: The mayor in turn must publicly announce the
finding of the property for two consecutive weeks. GR: Doctrine of irrevindicability - The
possession of movable property acquired in
Q: When is public auction of the lost movable good faith is equivalent to title.
authorized?
Note: This is merely presumptive as it can be
A: If the movable cannot be kept without defeated by the true owner. (Art. 559)
deterioration, or without expenses which
XPNs:
131
1. When the owner has lost; or

2. Has been unlawfully deprived of a Q: What are the rights of a possessor?
movable.
In which case the possessor cannot retain A: RPR
the thing as against the owner, who may 1. to be Respected in his possession
recover it without paying any indemnity 2. to be Protected in said possession by
legal means
XPN to the XPNs: Where movable is 3. to secure in an action for forcible entry
acquired in good faith at a public sale, the the proper writ to Restore him in his
owner must reimburse to recover. (Art. 559 possession (Article 539, NCC
par. 2)
Q: During his lifetime, Velasco acquired Lot A from
Q: Using a falsified manager's check, Justine, as spouses Sacluti and Obial evidenced by a deed of
the buyer, was able to take delivery of a second sale. In 1987, spouses Padilla entered the said
hand car which she had just bought from United property as trustees by virtue of a deed of sale
Car Sales. Inc. The sale was registered with the executed by the Rural Bank. The Padilla’s averred
Land Transportation Office. A week later, the that the Solomon spouses owned the property
United Car Sales learned that the check had been which was identified as Lot B. However, it was
dishonored, but by that time, Justine was nowhere proved during trial that the land occupied by
to be seen. It turned out that Justine had sold the spouses Padilla was Lot A in the name of Velasco,
car to Jerico, the present possessor who knew whereas the land sold by the bank to the spouses
nothing about the falsified check. In a suit filed by Padilla was Lot B. The heirs of Velasco demanded
United Car Sales. Inc. against Jerico for recovery of that spouses Padilla vacate the property, but they
the car, United Car Sales alleges it had been refused. Thus, the heirs filed a complaint for
unlawfully deprived of its property through fraud accion publiciana. Who has the better right of
and should, consequently, be allowed to recover it possession?
without having to reimburse the defendant for the
price the latter had paid. Should the suit prosper? A: The heirs of Velasco has the better right. Accion
publiciana, or for recovery of the right to possess is
A: Yes, the suit should prosper because the criminal an action filed in the RTC to determine the better
act of estafa should be deemed to come within the right to possession of realty independently of the
meaning of unlawful deprivation under Art. 559, title. The objective of the plaintiffs in accion
Civil Code, as without it United Car Sales would not publiciana is to recover possession only, not
have parted with the possession of its car. (1998 ownership. Lot A was the subject of a cadastral
Bar Question) case. The OCT was issued to Sacluti and Obial who
sold the same to Artemio. From the date of sale,
Note: The possession of movable property acquired in until Artemio’s death, he was in continuous
good faith is equivalent to a title. Nevertheless, one possession of the land.
who has lost any movable or has been unlawfully
deprived thereof, may recover it from the person in Q: Has the action already prescribed?
possession of the same. (Art. 559, Civil Code)
A: No. The remedy of accion publiciana prescribes
3. DISTINGUISHED FROM VOIDABLE TITLE after the lapse of ten years. In the present case, the
action was filed with the RTC in 1991. Spouses
Q: What is the rule in case the seller of a thing has Padilla dispossessed the heirs of Velasco of the
voidable title on the thing sold? property in 1987. At the time of the filing of the
complaint, only 4 years had elapsed from the time
A: Where the seller of goods has a voidable title of dispossession. The real right of possession is not
thereto, but his title has not been avoided at the lost till after the lapse of 10 years. (Art. 554(4),
time of the sale, the buyer acquires a good title to NCC). (Spouses Padilla v. Velasco,G.R. No. 169956,
the goods, provided he buys them in good faith, for Jan. 19, 2009)
value, and without notice of the seller's defect of
Q: What are the presumptions in favor of a
title. (Art. 1506, NCC)
possessor?
E. IN CONCEPT OF OWNER, HOLDER, IN ONE’S A: GCENCE

OWN NAME, IN NAME OF ANOTHER 1. Good faith
2. Continuity of initial good faith
F. RIGHTS OF THE POSSESSOR
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PROPERTY
3. Enjoyment in the same character in which Reason: Necessary expenses affect the existence or
possession was acquired until the substance of the property itself.
contrary is proved
4. Non-interruption in favor of the present Note: Improvements be so incorporated to the
possessor principal thing that their separation must necessarily
5. Continuous possession by the one who reduce the value of the thing not curable by ordinary
recovers possession of which he was repairs.
wrongfully deprived
6. Extension of possession of real property Q: What are the rights of a possessor with regard
to all movables contained therein. to useful expenses?
Q: What are the rights of a possessor as regards A: If in good faith:

NECESSARY EXPENSES? 1. Right to refund
2. Right of retention until paid
A: 3. Right of removal, provided:
GOOD FAITH BAD FAITH a. without damage to the principal
thing
1. Right to refund; Right to b. subject to the superior right of the
2. Right of retention; refund prevailing party to keep the
improvements by paying the
Note: During his possession, he is The possessor expenses or the increase in value of
not obliged to pay rent nor has no right of the thing
damages in case he refuses to retention
vacate the premises. Q: What are the rights of a possessor with regard
to expenses for pure luxury?
Q: Why is there no right of retention in case of bad
faith? A:
GOOD FAITH BAD FAITH
A: As punishment for his bad faith. Right of removal, Provided: same rights, but liable only
1. without injury to for the value of the
Q: Is there right of removal? principal thing; ornaments at the time he
2. successor in possession enters into possession, in
does not prefer to refund case he prefers to retain
A: None, whether in good faith or bad faith.
amount expended.
Q: What are other rights of possessor?
A:
With respect to GOOD FAITH BAD FAITH
On capital Charged to owner Charged to owner
Taxes and
On fruits Charged to possessor Charged to owner
Charges
Charges Pro rata Charge to owner
Possessor must return value of fruits
already received as well as value of
Gathered or severed fruits Possessor is entitled to the fruits fruits which the owner or legitimate
possessor should be entitled
(does not apply to possessor in BF)
Cultivation expenses of Possessor is not entitled to be
Possessor is entitled to be reimbursed
gathered fruits reimbursed
Share pro-rata between
Pending or ungathered fruits possessor and owner of expenses, Owner is entitled to the fruits
net harvest, and charges
indemnity to possessor in pro
rata: (owner’s option)
Production expenses of pending
a. money No indemnity
fruits
b. allowing full cultivation and
gathering of all fruits
Improvements no longer No reimbursement No reimbursement
133
existing
Liable if acting with fraudulent
Liability for accidental loss or
intent or negligence, after Liable in every case
deterioration
summons
Improvements due to time or Inure to the owner or lawful
Inure to the owner or lawful possessor
nature possessor
Note: A possessor is protected regardless of the manner of acquisition.
Q: May the owner of a property eject the more anumus revertendi ( intention
possessor forcibly without court intervention? to return or get back) (Paras, pp.
344-345)
A: No. The owner must resort to the courts and
cannot forcibly eject a possessor (Bago vs. Garcia, 3. Recovery of the thing by the legitimate
No. 2587, January 8, 1906). owner
G. LOSS/TERMINATION 4. Destruction or total loss of the thing – a

thing is lost when it perishes or goes out
of commerce, or disappears in such a way
Q: How is possession lost?
that its existence is unknown, or it cannot
be recovered. (Art. 1189, Civil Code)
A: PRADA
1. Possession of another subject to the
5. Assignment - complete transmission of
provisions of Art. 537, if a person is not in
the thing/right to another by any lawful
possession for more than one year but
manner.
less than 10 years he losses possession de
fact. This means that he can no longer VIII. USUFRUCT
bring an action of forcible entry or
unlawful detainer, since the prescriptive A. CHARACTERISTICS
period is one year for such actions. But he
may still institute an accion publiciana to Q: What are the characteristics of usufruct?
recover possession de jure, possession as
a legal right or the real right of A: ENA
possession. (Paras, p. 548) 1. Essential – those without which it cannot
be termed as usufruct:
Note: Acts merely tolerated, and those
a. real right (whether registered in the
executed clandestinely and without the
knowledge of the possessor of a thing, or by
registry of property or not);
violence, do not affect possession. (Art. 537, b. constituted on property.
Civil Code) i. real
ii. personal;
2. Abandonment iii. consumable;
iv. non-consumable;
Note: Abandonment involves a voluntary v. tangible;
renunciation of all rights over a thing vi. intangible.
c. temporary duration;
Requisites: d. purpose: to enjoy the benefits and
1. the abandoner must have been a derive all advantages from the object
possessor in the concept of owner as a consequence of normal use or
(either an owner or mere possessor exploitation.
may respectively abandon either 2. Natural – that which ordinarily is present,
ownership or possession) but a contrary stipulation can eliminate it
2. the abandoner must have the because it is not essential.
capacity to renounce or to alienate ( a. The obligation of conserving or
for abandonment is the repudiation preserving the form and substance
of property right) (value) of the thing.
3. there must be physical b. Transmissible
relinquishment of the thing or object 3. Accidental – those which may be present
4. there must be no spes recuperandi or absent depending upon the stipulation
(expectation to recover) and no of parties
134 CIVIL LAW TEAM

PROPERTY
a. Whether it be pure or a conditional Extent of Enjoyment

usufruct
All fruits,
b. The number of years it will exist Only those particular or specific
uses and
c. Whether it is in favor of one person use.
benefits
or several, etc.
Cause
Q: Is the usufructuary bound to preserve the form A passive
and substance of the thing in usufruct? owner who
allows the
An active owner who makes the
usufructuary
A: GR: Yes. lessee enjoy
to enjoy the
object of
XPN: In case of an abnormal usufruct, whereby usufruct
the law or the will of the parties may allow the
modification of the substance of the thing. Repairs and Taxes
Usufructuary
Q: Chayong owned a parcel of land which she pays for
mortgaged to Michael. Upon the OCT was an ordinary
annotation of usufructuary rights in favor of repairs and
Lessee is not obliged to pay for
Cheddy. Is Michael obliged to investigate pays for
repairs/taxes
Chayong’s title? annual
charges and
A: No. The annotation is not sufficient cause to taxes on the
require Michael to investigate Chayong’s title fruits
because the latter’s ownership over the property
remains unimpaired despite such encumbrance.
B. CLASSIFICATION
Only the jus utendi and jus fruendi over the
property are transferred to the usufructuary. The
Q: What are the kinds of usufruct?
owner of the property maintains the jus disponendi
or the power to alienate, encumber, transform, and
A:ONES-E
even destroy the same. (Hemedes v. CA, G.R. Nos.
1. As to Origin:
107132 and 108472, Oct. 08, 1999)
a. Legal – created by law such as
usufruct of the parents over the
Q: Differentiate usufruct from lease.
property of their unemancipated
A: CRONEC children
b. Voluntary – created by will of the
USUFRUCT LEASE
parties either by act inter vivos (e.g.
Nature of the right donation) or by act mortis causa e.g.
Real right only if, as in the case of in a last will and testament)
a lease over real property, the c. Mixed (or prescriptive) – created by
Always a real both law and act of the person (e.g.
lease is registered, or is for more
right acquired by prescription: I possessed
than one year, otherwise it is a
personal right in good faith a parcel of land which
really belonged to another. Still in
Creator of Right
good faith, I gave in my will to X, the
May not be the owner, as in the naked ownership of land and to Y,
Owner or his
case of a sub-lessor or a the usufruct. In due time, Y may
agent
usufructuary acquire the ownership of the
Origin usufruct by acquisitive prescription.)
By contract, by way of exception (Paras, p. 572)
By law, by law (as in the case of an 2. As to Number of beneficiary
a. Simple – if only one usufructuary
contract, implied new lease, or when a
will of builder has built in good faith on enjoys the usufruct
b. Multiple – if several usufructuaries
testator or the land of another a building,
by when the land is considerably enjoy the usufruct
i. simultaneous – at the same
prescription worth more in value than the
building. time.
135
ii. successive – one after the 6. To Retain the thing until he is reimbursed
other. for advances for extraordinary expenses
3. As to Extent of object: and taxes on the capital (Art. 612, NCC)
a. Total – constituted on the whole thing 7. To Collect reimbursements from the
b. Partial – constituted only on a part owner for indispensable extra ordinary
4. As to Subject matter: repairs, taxes on the capital he advanced,
a. Over things and damages caused to him
i. Normal (or perfect or regular) – 8. To Remove improvements made by him if
involves non consumable things the same will not injure the property
where the form and substance
are preserved Q: 120-hectares of land from the NHA property
ii. Abnormal (or imperfect or were reserved for the site of the National
irregular) – involves consumable Government Center. 7 hectares from which were
things withdrawn from the operation. These revoked
b. Over rights – involves intangible lands were reserved for the Manila Seedling Bank
property; rights must not be Foundation, Inc. (MSBF). However, MSBF occupied
personal or intransmissible in approximately 16 hectares and leased a portion
character so present or future thereof to Bulacan Garden Corporation (BGC). BGC
support cannot be an object of occupies 4,590 sqm. Implementing such
usufruct. revocation, NHA ordered BGC to vacate its
5. As to Effectivity or extinguishment: occupied area. BGC then filed a complaint for
a. Pure – no term or condition injunction. Has BGC any right over the leased
b. With a term – there is a period which premises?
may be either suspensive or
resolutory A: A usufructuary may lease the object held in
i. ex die – from a certain day usufruct. The owner of the property must respect
ii. in diem – up to a certain day the lease entered into by the usufructuary so long
iii. ex die in diem – from a certain as the usufruct exists. MSBF was given a usufruct
day up to a certain day. over only a 7-hectare area. NHA cannot evict BGC if
c. Conditional – subject to a condition the 4,590 square meter portion MSBF leased to
which may be either suspensive or BGC is within the 7-hectare area held in usufruct by
resolutory. MSBF. However, the NHA has the right to evict BGC
if BGC occupied a portion outside of the 7-hectare
C. RIGHTS AND OBLIGATIONS OF USUFRUCTUARY area covered by MSBF's usufructuary rights. (NHA v.
CA, G.R. No. 148830, Apr. 13, 2005)
Q: What are the rights of the usufructuary as to
the thing and its fruits? Q: What are the rights of the usufructuary as to
the usufruct itself?
A: RISERI-CR
1. To Receive the fruits of the property in A: ARC
usufruct and half of the hidden treasure
he accidentally finds on the property a. To Alienate or mortgage the right of
(Arts. 566, 438, NCC) usufruct (Art. 572, NCC)
2. To enjoy any Increase which the thing in
usufruct may acquire through accession XPN: parental usufruct (Arts. 225, 226 FC)
(Art. 571, NCC)
b. In a usufruct to Recover property/real
3. To personally Enjoy the thing or lease it to
right, to bring the action and to oblige the
another (Arts. 572-577, NCC)generally for
owner thereof to give him the proper
the same or shorter period as the
authority and the necessary proof to
usufruct
bring the action (Art. 578, NCC)
4. To make such Improvements or expenses
on the property he may deem proper and
c. In a usufruct of part of a Common
to remove the improvements provided no
property, to exercise all the rights
damage is caused to the property (Art.
pertaining to the co-owner with respect
579, NCC)
to the administration and collection of
5. To Set-off the improvements he may have
fruits or interests.
made on the property against any
damage to the same (Art. 580, NCC) Q: Can usufructuary exercise acts of ownership?
136 CIVIL LAW TEAM

PROPERTY
A: GR: A usufructuary cannot exercise acts of A: Yes, but not being the owner, he cannot alienate,
ownership such as alienation or conveyance. pledge or mortgage the thing itself.
XPNs: When what is to be alienated or Q: May the usufructuary alienate, pledge, or

conveyed is a: CIA mortgage the right of usufruct?
1. Consumable’
2. Property Intended for sale; A: Yes, he, being the owner of the right itself. (Art.
3. Property which has been Appraised when 572, NCC)
delivered.
Q: Up to when may the transferee enjoy the rights
Note: if it has not yet been appraised or if it is not a transferred to him by the usufructuary?
consumable: return the same quality (mutuum)
A: Until the expiration of the usufruct. Transfer of
Q: What are the rights of the usufructuary as to usufructuary rights, gratuitous or onerous, is co-
advances and damages? terminous with the term of usufruct.
A: To be: ITD Q: What happens if the thing subject of usufruct is

a. reimbursed for Indispensable mortgaged by the owner?
extraordinary repairs made by him
A: Usufructuary has no obligation to pay mortgage.
Note: The reimbursement shall be in the But if the same is attached, the owner becomes
amount equal to the increase in value of the liable for whatever is lost by the usufructuary.
property (Art. 594, NCC)
Q: To what may the usufructuary be liable for?
b. reimbursed for Taxes on the capital
advanced by him (Art. 597, par. 2, NCC) A: For the damages suffered by the usufructuary on
account of fraud committed by him or through his
c. indemnified for Damages caused by negligence.
usufructuary to the naked owner (Art.
581, NCC) Q: When is the usufructuary not liable?
Q: What are the rights of a usufructuary on A:

pending natural and industrial fruits? 1. For deterioration due to wear and tear
2. For deterioration due to a fortuitous event
A:
Fruits Q: What are the rights and obligations of the
Rights of the usufructuary usufructuary with respect to consumable things?
Growing:
At the
not bound to refund to the owner A: The usufructuary shall have the right to make use
beginning
the expenses of cultivation and of the consumable thing. At the termination of the
of the
production usufruct, the usufructuary has the obligation to:
usufruct
1. If the thing has been appraised, pay its
belong to the owner but he is bound appraised value;
At the
to reimburse the usufructuary of 2. If the thing has not been appraised:
termination
the ordinary cultivation expenses a. Return the same quantity and
of the
(Art. 545, NCC) out of the fruits quality; or
usufruct
received (Art. 443, NCC) b. Pay its current price at such
termination.
Note: Civil fruits accrue daily, stock dividends and cash
dividends are considered civil fruits. Q: What if the damages exceed the value of the
improvements?
Q: What if the expenses exceed the proceeds of
the growing fruits? A: The usufructuary is liable for the difference as
indemnity.
A: The owner has no obligation to reimburse the
difference. (Art. 567, NCC) Q: What if the improvements exceed the amount
of damages?
Q: May the usufructuary lease the thing in
usufruct even without the owner’s consent
137
A: He may remove the portion of the improvements 1. The owner shall have the following options:
representing the excess in value if it can be done a. receivership of realty;
without injury; otherwise, the excess in value b. sale of movables;
accrues to the owner. c. deposit of securities; or
d. investment of money; or
Q: Why do improvements accrue to the owner? e. retention of the property as
administrator.
A: Because there is no indemnity for improvements. 2. The net product shall be delivered to the
usufructuary;
Q: What are the obligations of the usufructuary? 3. The usufructuary cannot collect credit due or
make investments of the capital without the
A: consent of the owner or of the court until the
1. Before the usufruct bond is given.
a. Make an inventory
b. Give security Q: What are the effects of failure to give security?
2. During the usufruct
a. Take care of property A:
b. Replace the young of animals that die or 1. On the rights of the naked owner
are lost or become prey when the a. May deliver the property to the
usufruct is constituted on a flock or herd usufructuary
of livestock; b. May choose retention of the property as
c. Make ordinary repairs administrator
d. Notify the owner of urgent extra-ordinary c. May demand receivership or
repairs administration of the real property, sale
e. Permit works & improvements by the of movable, conversion or deposit of
naked owner not prejudicial to the credit instruments or investment of cash
usufruct or profits
f. Pay annual taxes and charges on the fruits 2. On the rights of the usufructuary
g. Pay interest on taxes on capital paid by a. Cannot posses the property until he gives
the naked owner security
h. Pay debts when usufruct is constituted on b. Cannot administer property
the whole patrimony c. Cannot collect credits that have matured
i. Secure the naked owner’s/court's nor invest them except the court or naked
approval to collect credits in certain cases owner consents
j. Notify the owner of any prejudicial act d. May alienate his right to usufruct.
rd
committed by 3 persons
k. Pay for court expenses and costs
Q: When may the usufructuary be exempt from
3. At the termination
the obligation to give security?
a. Return the thing in usufruct to the naked
owner unless there is a right of retention
b. Pay legal interest for the time that the A: When: SIR
usufruct lasts 1. No one will be Injured by the lack of the
c. Indemnify the naked owner for any losses bond;
due to his negligence or of his transferees 2. The donor (or parent) Reserved the
usufruct of the property donated;
Note: If the animals all perish w/o fault but due to 3. The usufruct is Subject to caution
contagious disease/uncommon event – deliver curatorial where:
remains saved. If the young of animals perished in part a. The usufructuary: takes an oath to
due to accident, usufruct continues on remaining take care of the things and restore
portion. If the usufruct is constituted on sterile them to its previous state before the
animals, they are considered as if fungible and have usufruct is constituted.
the obligation to replace same kind and quality. b. The property subject to such cannot
be alienated or encumbered or
OBLIGATIONS BEFORE THE USUFRUCTT leased.
Q: What are the effects of failure to post a bond or Q: What is caution curatorial?
security?
A: The usufructuary, being unable to file the
A: required bond or security, files a verified petition in
138 CIVIL LAW TEAM

PROPERTY
the proper court asking for the delivery of the 2. The owner failed to make repairs
house and furniture necessary for himself and his notwithstanding such notification
family without any bond or security. (Art. 587) 3. The repair is necessary for the
preservation of the property.
Q: When does the usufructuary start to have a
right to the proceeds and benefits after the Q: Does the usufructuary have a right of retention
security has been given? even after the termination of the usufruct?
A: He shall have a right to all the proceeds and A: Yes, until he is reimbursed for the increase in
benefits from the day on which he should have value of the property caused by extraordinary
commenced to receive them. (Retroactivity) (Art. repairs for preservation.
588, NCC)
Q: How is the increase in value determined?
Q: What are ordinary repairs?
A: It is the difference between the value of the
A: Such as are required by the wear and tear due to property before the repairs were made and the
the natural use of the thing and are indispensable value after the repairs have been made.
for its preservation. (Art. 592, NCC)
D. RIGHTS OF THE OWNER
Note: GR: Usufructuary has no liability when the
thing deteriorates due to wear and tear. He is
Q: What are the rights of a naked owner and the
obliged to return the thing in such state.
limitations imposed upon him?
XPN: when there is fraud or negligence
A:
Q: What are extraordinary repairs?
Rights Limitations
A: Can alienate the thing in
Alienation
1. Those required by the wear and tear due to usufruct
the natural use of the thing but not Cannot alter the form
Alteration
indispensable for its preservation. and substance
2. Those required by the deterioration of or Cannot do anything
damage to the thing caused by exceptional Enjoyment prejudicial to the
circumstances and are indispensable for its usufructuary
preservation. Can construct any works
and make any
Q: Who pays for extraordinary repairs? improvement provided
Construction and
it does not diminish the
Improvement
A: Depends on the kind of extraordinary repairs: value or the usufruct or
(Art. 594, NCC) prejudice the rights of
1. If made by the owner - he can make them the usufructuary.
but to his expense and he shall have the
right to demand from the usufructuary Q: What is the effect of the death of the naked
the payment of legal interest on the owner on the usufruct?
amount expended during the duration of
the usufruct. A: It does not terminate the usufruct. His rights are
transmitted to his heirs.
2. If made by the usufructuary –
Q: Is renunciation an assignment of right?
GR: the usufructuary may make them but
he is not entitled to indemnity because A: No, it is really abandonment by the usufructuary
they are not needed for the preservation of his right and does not require the consent of the
of the thing. naked owner but it is subject to the rights of
creditors.
XPN: He shall have the right to demand the
payment of the increase in value at the Q: What is the obligation of the owner if the
termination of the usufruct provided that: property held in usufruct is expropriated for public
1. He notified the owner of the urgency use?
of the repairs
A: The owner is obliged to:
139
1. either replace it; or a certain age shall subsist for the number of years
2. pay legal interest to usufructuary of the specified even if the third person should die unless
net proceeds of the same. there is an express stipulation in the contract that
states otherwise.
Q: What happens when a part of the thing subject
of the usufruct is lost? In the case at bar, there is no express stipulation
that the consideration for the usufruct is the
A: The remaining part shall continue to be held in existence of Petronila’s son. Thus, the general rule
usufruct. and not the exception should apply in this case.
(1997 Bar Question)
Q: Can usufruct be constituted in favor of a town,
corporation or association? Q: What are considered special usufructs?
A: Yes, but it cannot be for more than 50 years. A: These are usufruct on:
1. Pension or income (Art. 570, NCC)
Q: A usufruct is constituted on an immovable 2. Property owned in common (Art. 582,
where a building is erected, and the building is NCC)
destroyed, what will happen? 3. Cattle (livestock) (Art. 591, NCC)
4. On Vineyards and woodland
A: Usufructuary will have the right to make use of (Arts 575-576, NCC)
the land and materials. 5. Right of action (Art. 578, NCC)
6. Mortgaged property (Art. 600, NCC)
Q: An insurance covering the object of 7. over the Entire patrimony (Art. 598, NCC)
usufructuary was obtained, who gets the 8. things which Gradually deteriorate
proceeds? (Art. 573, NCC)
9. Consumable property (Art. 574, NCC)
A: If both of them paid premium: both will share in
the insurance proceeds. If it was only the owner
E. EXTINCTION/TERMINATION
who paid, then proceeds will go to him alone.
Q: How is usufruct extinguished?
Q: What is the effect of improper use of the thing
by the usufructuary?
A: PLDT-ERM
1. Acquisitive Prescription
A: The owner may demand the delivery of and
administration of the thing with responsibility to
Note: The use by a third person and not the
deliver net fruits to usufructuary. non-use by the usufructuary
Q: On 1 January 1980, Minerva, the owner of a
2. Total Loss of the thing
building granted Petronila a usufruct over the
property until 01 June 1998 when Manuel, a son of
Note: If the loss is only partial, the usufruct
Petronila, would have reached his 3oth birthday. continues with the remaining part.
Manuel, however, died on 1 June 1990 when he
was only 26 years old. 3. Death of the usufructuary; unless a
contrary intention appears, since a
Minerva notified Petronila that the usufruct had
usufruct is constituted essentially as a
been extinguished by the death of Manuel and
lifetime benefit for the usufructuary or in
demanded that the latter vacate the premises and
consideration of his person
deliver the same to the former. Petronila refused
4. Termination of right of the person
to vacate the place on the ground that the
constituting the usufruct
usufruct in her favor would expire only on 1 June
th 5. Expiration of the period or fulfillment of
1998 when Manuel would have reached his 30
the resolutory condition
birthday and that the death of Manuel before his
th 6. Renunciation by the usufructuary.
30 birthday did not extinguish the usufruct.
Note: It partakes the nature of a
Whose contention should be accepted?
condonation or donation, it must comply
with the forms of donation.
A: Petronila’s contention is correct. Under Article
606 of the Civil Code, a usufruct granted for the
time that may elapse before a third person reaches
140 CIVIL LAW TEAM

PROPERTY
7. Merger of the usufruct and ownership in A: NICE LIAR

the same person who becomes the 1. Is a right limited by the Needs of the
absolute owner thereof. (Art. 1275, NCC) dominant owner or estate, without
possession;
IX. EASEMENTS 2. Is Inseparable from the estate to which it
is attached - cannot be alienated
A. CHARACTERISTICS independently of the estate; (Art. 617,
NCC)
Q: What is an easement or servitude? 3. Cannot consist in the doing of an act
unless the act is accessory in relation to a
A: It is an encumbrance imposed upon an real easement;
immovable for the benefit of: 4. Involves 2 neighboring Estates: the
1. another immovable belonging to a dominant estate to which the right
different owner; or belongs and the servient estate upon
2. for the benefit of a community or one or which an obligation rests;
more persons to whom the encumbered 5. Is a Limitation on the servient owner’s
estate does not belong by virtue of which rights of ownership;
the owner is obliged to abstain from 6. Is Indivisible- not affected by the division
doing or to permit a certain thing to be of the estate between two or more
done on his estate. (Arts. 613- 614, NCC) persons; (Art. 618, NCC)
7. It is enjoyed over Another immovable
Q: Distinguish Dominant Estate from Servient never on one’s own property;
Estate. 8. Is a Real right but will affect third persons
only when registered.
A:
DOMINANT ESTATE SERVIENT ESTATE Q: What are essential qualities of easements?
Immovable in favor of That property or estate
which, the easement is which is subject to the A:
established dominant estate 1. Incorporeal;
Upon which an 2. Imposed upon corporeal property;
Which the right belongs 3. Confer no right to a participation in the profits
obligation rests.
arising from it;
Note: The immovable in favor of which, the easement 4. Imposed for the benefit of corporeal property;
is established is called the dominant estate; that which 5. Has 2 distinct tenements: dominant and
is subject thereto, the servient estate. servient estate;
6. Cause must be perpetual.
Q: Can there be an easement over another
easement? Explain. Q: What is meant by “easement established only
on an immovable?”
A: There can be no easement over another
easement for the reason that an easement may be A: The term “immovable” must be understood in its
constituted only on a corporeal immovable common and not in its legal sense.
property. An easement, although it is real right over
an immovable, is not a corporeal right. (1995 Bar Q: Distinguish easement from usufruct.
Question)
A:
Q: Differentiate easement from servitude. EASEMENT USUFRUCT
Constituted on
A:
On real property Real or personal
EASEMENT SERVITUDE
Use granted
Used in civil law
An English law term Limited to a particular or
countries Includes all uses and
specific use of the
Real Real or personal fruits
servient estate
Burden imposed upon
The right enjoyed As to right of possession
another
Involves a right of
Non-possessing right
Q: What are characteristics of easement? possession in an
over an immovable
immovable or movable
141
As to effect of death as a rule particular or specific use

Not extinguished by Extinguished by death of Who may create
death of dominant owner usufructuary The lessor may or may
Can be created only by
Nature of right not be the owner as
the owner, or by a duly
Real right whether or not Real right whether or not when there is a sub-
authorized agent, acting
registered registered lease or when the lessor
in behalf of the owner
is only a usufructuary
As to transmissibility
How it is created
Transmissible Transmissible
GR: only by contract;
How it may be constituted
Cannot be constituted on XPN: by law as in the
May be constituted in May be created by: case of an implied new
an easement but it may
favor, or, burdening, a law, lease, or when a builder
be constituted on the
piece of land held in contract, has built in GF on the
land burdened by an
usufruct last will or land of another a
easement
prescription building, when the land
is considerably worth
Q: Can there be: more in value than the
building
a. An easement over a usufruct?
Passive or Active Owner
A: There can be no easement over a usufruct. Since The owner is more or The owner or lessor is
an easement may be constituted only on a less passive, and he more or less active
corporeal immovable property, no easement may allows the usufructuary
be constituted on a usufruct which is not a to enjoy the thing given
corporeal right. in usufruct
Who has the duty to make repairs
b. A usufruct over an easement?
Usufructuary has the Lessee generally has no
duty to make the duty to pay for repairs
A: There can be no usufruct over an easement.
ordinary repairs
While a usufruct may be created over a right, such
right must have an existence of its own Who bears payment of taxes and charges on the
independent of the property. A servitude cannot be property
the object of a usufruct because it has no existence Usufructuary pays for Lessee generally pays no
independent of the property to which it attaches. the annual charges and taxes
taxes and on the fruits
Q: Distinguish easement from lease. Limitation on the use of the property
A: The lessee cannot
Usufructuary may lease
constitute a usufruct on
Easement Lease the property to another
the property leased
Nature
Real right whether APPARENT SIGN
Real right only when
registered or not
registered OR when the
(whether real or Q: What is the doctrine of apparent sign?
lease exceeds 1 yr.
personal)
A: Easements are inseparable from the estate to
Where constituted
which they actively or passively pertain. The
Only on real properties Real or personal existence of apparent sign under Art. 624 is
Limitations on the use of right equivalent to a title. It is as if there is an implied
There is limited right to contract between the two new owners that the
Limited right to both easement should be constituted, since no one
the use of real property
possession and use of objected to the continued existence of the
of another but w/o right
another’s property windows.
of possession
Scope and Uses Note: It is understood that there is an exterior sign
Covers all fruits and uses Generally covers only a contrary to the easement of party wall whenever:
142 CIVIL LAW TEAM

PROPERTY
1. there is a window or opening in the dividing A: CAN C

wall of buildings 1. He cannot Alter the easement or render
2. entire wall is built within the boundaries of it more burdensome. (Art. 627 par.
one of the estates 1,NCC)
3. the dividing wall bears the burden of the 2. He shall Notify the servient owner of
binding beams, floors and roof frame of one works necessary for the use and
of the buildings, but not those of the others preservation of the servitude. (Art. 627
4. the lands enclosed by fences or live hedges
par. 2,NCC)
adjoin others which are not enclosed
3. He must Choose the most convenient
In all these cases, ownership is deemed to belong
exclusively to the owner of the property which has in
time and manner of making the
its favor the presumption based on any of these signs. necessary works as to cause the least
inconvenience to the servient owner.
Q: What is the effect of acknowledgement of an 4. If there are several dominant estates he
easement in one owns property? must Contribute to the necessary
expenses in proportion to the benefits
A: An acknowledgement of the easement is an derived from the works (Art. 628 par.
admission that the property belongs to another 1,NCC)
(BOMEDCO v. Heirs of Valdez, G.R. No. 124669).
SERVIENT OWNER
Q: How is easement acquired?
Q: What are the rights of the servient owner?
A:
1. Prescription of 10 years. A: RMC
2. By deed of recognition 1. Retain the ownership of the portion of
3. By final judgment the estate on which easement is imposed
4. By apparent sign established by the owner of 2. Make use of the easement unless there is
two adjoining estates an agreement to the contrary. (Art. 628
5. By title. par. 2, NCC),
3. Change the place or manner of the use of
PARTIES TO AN EASEMENT the easement, provided it be equally
convenient (Art. 629, par. 2,NCC)
Q: Who are the parties to an easement?
Q: What are the obligations or limitations imposed
A: on the servient owner?
1. Dominant estate – refers to the immovable for
which the easement was established. A: IC
2. Servient estate – the estate which provides the 1. He cannot Impair the use of the
service or benefit. easement.
2. He must Contribute to the necessary
DOMINANT OWNER expenses in case he uses the easement,
unless otherwise agreed upon
Q: What are the rights of the dominant owner? (Art. 628 par. 2, NCC)
A: MARE B. CLASSIFICATIONS OF EASEMENT

1. Exercise all rights necessary for the use of
Q: What are the classifications of easements?
the easement (Art. 625, Civil Code)
2. Make on the servient estate all works
A:
necessary for the use and preservation of
1. As to recipient of the benefit:
the servitude (Art. 627 par. 1,NCC)
a. Real (or Predial) – The easement is in
3. Renounce the easement if he desires to
favor of another immovable.
exempt from contributing necessary
b. Personal – The easement is in favor of a
expenses (Art. 628,NCC)
community, or of one or more persons to
4. Ask for mandatory injunction to prevent
whom the encumbered estate does not
impairment of his right. (Resolme v. Lazo,
belong (easement of right of way for
27 Phil 416)
passage of livestock).
2. As to purpose or nature of limitation:
Q: What are the obligations of the dominant
a. Positive – One which impose upon the
owner?
servient estate the obligation of allowing
143
something to be done or of doing it 1. By redemption agreed upon in case of

himself. voluntary redemption.
b. Negative – That which prohibits the 2. Expiration of the term or fulfillment of the
owner of the servient estate from doing resolutory condition.
something which he could lawfully do if 3. Merger of ownership of the dominant and
the easement did not exist servient estate
3. As to the manner of exercised: 4. Annulment of the title or servitude.
a. Continuous – Their use may or may not be 5. Permanent impossibility to use easement.
incessant 6. Non user for 10 years
7. Bad condition
Note: For acquisitive prescription, the 8. Resolution of the right to create the servitude.
easement of aqueduct and easement of 9. Expropriation of the servient estate.
light and view are considered 10. Waiver by the dominant owner
continuous.
1. LEGAL EASEMENT
b. Discontiuous – used at intervals and
depend upon the acts of man. Q: What is a Legal Easement?
4. As to whether their existence is indicated:
a. Apparent – Made known and continually A: An easement established by law for public use or
kept in view by external signs that reveal for the interest of private persons.
the use and enjoyment of the same
b. Non-apparent – They show no external Q: What is a Public Legal Easement?
indication of their existence.
5. As to the right given: A: A Public Legal Easement is for public or
a. Right to partially use the servient estate communal use.
b. Right to get specific materials or objects
from the servient estate Q: What is a Private Legal Easement?
c. Right to participate in ownership
d. Right to impede or prevent the A: A Private Legal Easements is for the interest of
neighboring estate from performing a private persons or for private use.
specific act of ownership.
6. As to source: Q: What are the kinds of legal easements?
a. Legal – those created by law for public
A: WIND – PLW
use or private interests.
1. Easement relating to Waters
b. Voluntary - constituted by will or
2. Easement relating to right of Way
agreement of the parties or by testator.
3. Intermediate distances and works for
c. Mixed – created partly by agreement and
certain construction and plantings
partly by law.
4. Easement against Nuisance
7. As to the duty of the servient owner:
5. Drainage of Building
a. Positive – Imposes upon the owner of the
6. Easement of Party wall
servient estate the obligation of allowing
7. Easement of Light and view
something to be done or doing it himself.
e.g. right of way - imposes the duty to A. RIGHT OF WAY

allow the use of said way.
Q: What is right of way?
b. Negative – Prohibits the owner of the
servient estate from doing something A: It is the right to demand that the owner of an
which he could lawfully do if the estate surrounded by other estates be allowed to
easement did not exist. pass thru the neighboring estates after payment of
proper indemnity.
e.g. Easement of light and view where the
owner is prohibited from obstructing the Q: Can easement of right of way be acquired by
passage of light. prescription?
Q: How is an easement extinquished? A: No, because it is discontinuous or intermittent

(Ronquillo, et al. vs. Roco, GR No. L-10619, Feb. 28,
A: 1958).
144 CIVIL LAW TEAM

PROPERTY
Q: What kind of servitude in favor of the through a portion of the land of Romulo to bring
government is a private owner required to his coconut products to the market. He has chosen
recognize? a point where he will pass through a housing
project of Romulo. The latter wants him to pass
A: The only servitude which he is required to another way which is 1km longer. Who should
recognize in favor of the government is: prevail?
1. the easement of a public highway,
2. private way established by law, or A: Romulo will prevail. Under Art. 650, the
3. any government canal or lateral that has easement of right of way shall be established at the
been pre-existing at the time of the point least prejudicial to the servient estate and
registration of the land. where the distance from the dominant estate to a
public highway is the shortest. In case of conflict,
Note: If the easement is not pre-existing and is sought the criterion of least prejudice prevails over the
to be imposed only after the land has been registered criterion of shortest distance. Since the route
under the LR Act, proper expropriation proceedings chosen by Federico will prejudice the housing
should be had, and just compensation paid to the project of Romulo, Romulo has the right to demand
registered owner (Eslaban v. Vda De Onorio, G.R. No. that Federico pass another way even though it will
146062). be longer. (2000 Bar Question)
Q: What are the requisites for easement on right Q: Spouses dela Cruz are occupants of a parcel of
of way? land located at the back of Ramiscal’s property.
They use as their pathway, to and from the
A: POON-D
nearest public highway from their property, a long
1. The easement must be established at the
strip of land owned by Ramiscal. They also
point least Prejudicial to the servient
enclosed such strip of land with a gate, fence, and
estate
roof. Ramiscal demanded that the spouses
2. Claimant must be an Owner of enclosed
demolish the same. The spouses refused. Are the
immovable or with real right
spouses entitled to a right of way?
3. There must be no adequate Outlet to a
public highway A: No. There is no voluntary nor legal easement
4. The right of way must be absolutely established. The spouses failed to show that they
Necessary not mere convenience entered into an agreement with Ramiscal to use the
5. The isolation must not be Due to the pathway. Art 649 provides that the easement of
claimant’s own act right of way is not compulsory if the isolation of the
6. There must be payment of proper immovable is due to the proprietor’s own acts.
Indemnity. Mere convenience for the dominant estate is not
enough to serve as its basis. There should be no
Q: What if the property is not the shortest way other adequate outlet to a public highway. Also,
and will not cause the least damage to the servient under Art. 649, it is the owner or any person who
estate? by virtue of a real right may cultivate or use any
immovable surrounded by other immovable
A: The way which will cause the least damage
pertaining to other persons, who is entitled to
should be used even if it will not be the shortest.
demand a right of way through the neighboring
estates. Here, the spouses fell short of proving that
The easement of right of way shall be established at
they are the owners of the supposed dominant
the point least prejudicial to the servient estate and
estate. (Eslaban v. Vda De Onorio, G.R. No. 146062)
where the distance from the dominant estate to a
public highway is the shortest. In case of conflict,
Q: David owns a subdivision which does not have
the criterion of least prejudice prevails over the
an access to the highway. When he applied for a
criterion of shortest distance
license to establish the subdivision, he
represented that he will purchase a ricefield
Q: What does “least prejudicial” mean in
located between his land and the highway, and
determining the right of way?
develop it into an access road. However, when the
A: It means it is the shortest way and the one which license was granted, he did not buy the rice field,
will cause the least damage to the property to the which remained unutilized. Instead, he chose to
servient estate in favor of the dominant estate. connect his subdivision with the neighboring
subdivision of Nestor, which has an access to the
Q: The coconut farm of Federico is surrounded by highway. When Nestor and David failed to arrive
the lands of Romulo. Federico seeks a right of way at an agreement as to compensation, Nestor built
145
a wall across the road connecting with David’s A: No. There must be a demand for extinguishment
subdivision. Is David entitled to an easement of coupled with tender of indemnity by the servient
right of way through the subdivision of Nestor owner.
which he claims to be the most adequate and
practical outlet to the highway? Q: Emma bought a parcel of land from Equitable-
PCI Bank, which acquired the same from Felisa, the
A: No, David is not entitled to the right of way being original owner. Thereafter, Emma discovered that
claimed. The isolation of his subdivision was due to Felisa had granted a right of way over the land in
his own act or omission because he did not develop favor of the land of Georgina, which had no outlet
an access road to the rice fields which he was to a public highway, but the easment was not
supposed to purchase according to his own annotated when the servient estate was
representation when he applied for a license to registered under the Torrens system. Emma then
establish the subdivision. (Floro vs. Llenado, 244 filed a complaint for cancellation of the right of
SCRA 713) way, on the ground that it had been extinguished
by such failure to annotate. How would you decide
Q: How much is the proper indemnity to the the controversy?
servient estate?
A: The complaint for cancellation of easement of
A: If the passage is: right of way must fail. The failure to annotate the
a. Continuous and permanent - the easement upon the title of the servient estate is not
indemnity consists of the value of the among the grounds for extinguishing an easement
land occupied plus the amount of under Art. 631 of the Civil Code. Under Art 617,
damages caused to the servient estate. easements are inseparable from the estate to
b. Temporary – indemnity consists in the which they actively or passively belong. Once it
payment of the damage caused attaches, it can only be extinguished under Art 631,
and they exist even if they are not stated or
Q: How wide should an easement of right of way annotated as an encumbrance on the Torrens title
be? of the servient estate. (2001 Bar Question)
A: The width of the easement shall be that which is OTHER LEGAL EASEMENTS
sufficient for the needs of the dominant estate.(Art.
651, NCC) WATERS
Q: Can a dominant owner demand a driveway for Q: What are the different easements relating to
his automobile? waters?
A: Yes, due to necessity of motor vehicles in the A: These are: DRAW – BN

present age. 1. Natural drainage (Art. 637)
2. drainage of Buildings (Art. 674)
Q: Who is responsible for repairs and taxes? 3. easement on Riparian banks for
navigation, floatage, fishing, salvage, and
A: tow path (Art. 638)
1. As to repairs the dominant owner is liable for 4. easement of a Dam (Arts. 639, 647)
necessary repairs. 5. easement for drawing Water or for
2. As to proportionate share of the taxes it shall watering animals (Arts. 640-641)
be reimbursed by said owner to the proprietor 6. easement of Aqueduct (Arts. 642- 636)
of the servient estate. This applies only to
permanent easements. (Art. 654, NCC) NATURAL DRAINAGE
Q: What are the special causes of extinguishment Note: Lower estates must receive waters which are
of right of way? naturally and without intervention of man descend
from higher estates including earth and stones carried
A: with them.
1. The opening of a public road, or
2. Joining the dominant tenement to another Q: What are its limitations?
which has an exit to a public road.
A:
Q: Is said extinguishment automatic? 1. Dominant owner must not increase the burden
but he may erect works to avoid erosion.
146 CIVIL LAW TEAM

PROPERTY
2. The servient owner must not impede the cannot be physically physically; a co-owner
descent of water (but may regulate it). segregated but they can cannot point to any
be physically identified definite portion of the
EASEMENT FOR DRAWING WATER OR FOR property belonging to
WATERING ANIMALS him
Note: This is a combined easement for drawing of None of the co-owners

water and right of way. No limitation as to use of may use the community
the party wall for property for his exclusive
Q: What are the requisites for easement for exclusive benefit of a benefit because he
watering cattle? party would be invading on
the rights of the others
A: Any owner may free
1. It must be imposed for reasons of public use himself from
2. It must be in favor of a town or village contributing to the cost
indemnity must be paid Partial renunciation is
of repairs and
allowed
construction of a party
Note: The right to make the water flow thru or wall by renouncing ALL
under intervening or lower estates his rights
Q: What are the requisites for drawing water or Q: What are the presumptions (juris tantum) of
for watering of animals? existence of a party wall?
A: A:
1. Owner of the dominant estate has the capacity 1. In adjoining walls of building, up to common
to dispose of the water; elevation
2. The water is sufficient for the use intended 2. In dividing walls of gardens and yards (urban)
3. Proposed right of way is the most convenient 3. In dividing fences, walls and live hedges of
and the least onerous to third persons. rural tenements
4. Pay indemnity to the owner of the servient 4. In ditches or drains between tenements
estate (Art. 643)
Rebuttal of presumption:
EASEMENT OF AQUEDUCT 1. Title
2. By contrary proof
Q: How is the easement of aqueduct considered? 3. By signs contrary to the existence of the
servitude (Arts. 660 & 661, NCC)
A: For legal purposes, it is considered continuous
and apparent even though the flow of water may Note: If the signs are contradictory, they
not be continuous or its use depends upon the cancel each other.
needs of the dominant estate or upon a schedule of
alternate days or hours. (Art. 646, NCC) Q: Who spends for the cost of repairs and
construction of party walls?
PARTY WALL
A: The part-owners. They are obliged to contribute
Q: What is a party wall?
in proportion to their respective interests.
A: A common wall which separates two estates,
Q: May an owner refuse to contribute?
built by common agreement at the dividing line
such that it occupies a portion of both estates on A: GR: Yes, any owner may free himself from the
equal parts. obligation to contribute by renouncing his rights in
the party wall.
Note: It is a kind of compulsory co-ownership.
XPN: When the party wall actually supports his
Q: Distinguish easement of party wall from co-
building, he cannot refuse to contribute for the
ownership.
expenses or repair and construction. (Art. 662,
A: NCC)
PARTY WALL CO-OWNERSHIP XPN to XPN: If the owner renounces his
Shares of co-owners Can be divided part-ownership of the wall, in this case he
147
shall bear the expenses of repairs and work A: it is voluntary when it is established by the will of
necessary to prevent any damage which the owners.
demolition may cause to the party wall. (Art.
663, NCC) Q: Who may constitute voluntary easements?
Q: May an owner increase the height of a party A: The owner possessing capacity to encumber
wall? property may constitute voluntary servitude. If
there are various owners, all must consent; but
A: Yes, provided that he must: consent once given is not revocable.
1. do so at his own expense;
2. pay for any damage caused even if it is Q: For whose favor are voluntary easements
temporary; established?
3. He must bear the cost of maintaining the
portion added; A:
4. He must pay the increased cost of 1. Predial servitudes:
preservation of the wall (Art. 664, NCC); a. for the owner of the dominant estate
5. He shall be obliged to reconstruct the wall b. for any other person having any juridical
at his expense if necessary for the wall to relation with the dominant estate, if the
bear the increased height and if owner ratifies it.
additional thickness is required, he shall 2. Personal servitudes: for anyone capacitated to
provide the space therefore from his own accept.
land.
Q: How are voluntary easements created and what
DRAINAGE OF BUILDINGS are the governing rules for such?
Q: Define drainage of buildings A:

1. If created by title (contract, will, etc.), the title
A: It is the right to divert the rain waters from one’s governs.
own roof to the neighboring estate. 2. If acquired by prescription, it is governed by the
manner or form of possession.
Q: What are the conditions for drainage of
buildings? Note: In both cases, the Civil Code will only apply
suppletorily.
A:
1. No adequate outlet C. MODES OF ACQUIRING EASEMENTS
2. The outlet must be at the point where egress is
easiest and establishing a conduit for the 1. COMPULSORY EASEMENTS
drainage of water
3. Proper indemnity Q: How are easements acquired?
LATERAL AND SUBJACENT SUPPORT A: FART-P

1. By Title – All easements:
Q: Can there be a stipulation or testamentary a. Continuous and apparent (Art.
provision allowing excavations that could cause 620)
danger to an adjacent land or building? b. Continuous non-apparent (Art.
622)
A: No, the same shall be void. (Art. 685, NCC) c. discontinuous, whether apparent
or non-apparent (Art. 622)
Q: What should be done first before making an 2. By Prescription of ten years –
excavation? continuous and apparent (Art. 620)
3. By deed of Recognition
A: Any proprietor who intends to make any 4. By Final judgment
excavation shall notify all owners of adjacent lands. 5. By Apparent sign established by the
owner of the two adjoining estates
2.VOLUNTARY EASEMENT
Q: How is the prescriptive period computed?
Q: When is an easement voluntary?
A:
148 CIVIL LAW TEAM

PROPERTY
a. Positive easement - the period is counted from 2. Thru a party wall or on one’s own wall
the day when the owner of the dominant which extends over the neighboring
estate begins to exercise it estate – The easement is positive.
b. Negative easement- from the day a notarial
prohibition is made on the servient estate Commencment of Period of prescription –
starts from the time the window is
2. EASEMENT OF LIGHT AND VIEW opened.
Reason: owner of the neighboring estate

Q: What is easement of light (jus luminum)? who has a right to close it up allows an
encumbrance on his property.
A: The right to admit light from neighboring estate
by virtue of the opening of a window or the making Q: How about with regard to openings at height of
of certain openings.
ceiling joists?
Q: What is easement of view (jus prospectus)?
A: The owner of a wall which is not a party wall may
A: The right to make openings or windows to enjoy make an opening to admit light and air, but not
the view thru the estate of another and the power view subject to the ff:
to prevent all constructions or works which could 1. The size must not be more than 30 square
obstruct such view or make the same difficult. centimeters
2. The opening must be at the height of the
Note: It necessarily includes easement of light. ceiling joists or immediately under the
ceiling
Q: What are its modes of acquisition of easement 3. There must be an iron grating imbedded
of light and view? in the wall
4. There must be wire a screen.
A:
1. By title Q: What are the restrictions as to easement of
2. By prescription views?
Q: What is the prescriptive period for acquisition A:

of easement of light and view? 1. Direct Views: the distance of 2 meters
between the wall and the boundary must be
A: 10 years. observed
2. Oblique Views: (walls perpendicular or at an
Q: From when does the prescriptive period start to angle to the boundary line) must not be 60 cm
run? to the nearest edge of the window.
A: The reckoning point depends on whether the Note: Any stipulation to the contrary is void (Art. 673,
easement is positive or negative which, in turn, is NCC).
dependent on where the opening is made if it is
made: Q: What if the wall upon which an opening is
made, becomes a party wall?
1. On one’s own wall and the wall does not
extend over the property of another – A: A part-owner can order the closure of the
The easement is negative. opening. No part-owner may make an opening thru
a party wall without the consent of the others.
Commencement of Period of prescription -
starts from the time formal prohibition is Note: If the wall becomes a party wall the part-owner
made. can close the window unless there is a stipulation to
the contrary (Art. 669, Civil Code, Paras p. 715)
Reason: The owner merely exercises his
right of dominion and not of an Q: Does non-observance of the distances provided
easement. Negative easement is not in Article 670 give rise to prescription?
automatically vested as formal
prohibition is a pre-requisite. A: No, this refers to a negative easement as the
window is thru a wall of the dominant estate.
149
Note: No windows, apertures, balconies, or other b. Shocks, defies or disregards decency

similar projections which afford a direct view upon or or morality
towards an adjoining land or tenement can be made, c. Annoys or offends the senses
without leaving a distance of two meters between the d. Hinders or impairs the use of
wall in which they are made and such contiguous property or
property. Neither can side or oblique views upon or e. Obstructs or interferes with the free
towards such conterminous property be had, unless passage to any public highway or
there be a distance of sixty centimeters. The
street or body of water
nonobservance of these distances does not give rise to
prescription. (Art. 670, Civil Code)
Q: May a nuisance be both public and private?
Q: How is easement of light and view
A: Yes, it is called mixed nuisance.
extinguished?
Q: Distinguish nuisance from trespass.
A:
1. Merger A:
2. When the easement can no longer be used
Nuisance Trespass
3. Expiration of the term (if temporary) or
fulfillment of the condition (if conditional) Use of one’s own Direct infringement of
4. Renunciation of the owner of the dominant property which causes another’s right or
estate of the redemption agreed upon injury to another property
5. Non-user for 10 years Injury is direct and
Injury is consequential
immediate
EXTINGUISHMENT OF EASEMENTS
Q: What are the kinds of nuisance?
Q: How are easements extinguished?
A:
A: MARINE-CREW 1. According to the number of persons affected:
1. Merger of ownership of the dominant and a. Public (or common) nuisance – is one
servient owner which affects the community or
2. Annulment of the title to the servitude neighborhood or considerable number of
3. Redemption agreed upon persons
4. Impossibility to use the easement b. Private nuisance – is one which affects an
5. Non-user : 10 years individual or few persons only.
6. Expiration of the term or fulfillment of the 2. Other classification of nuisance:
resolutory condition a. Nuisance Per Se – that kind of nuisance
7. Bad Condition – when either or both which is always a nuisance. By its nature,
estates fall into such a condition that the it is always a nuisance at all times and
easement could not be used under any circumstances regardless of
8. Resolution of the right of grantor to location of surroundings.
create the easement (as when the vendor b. Nuisance Per Accidens – that kind of
a retro redeems the land) nuisance by reason of location,
9. Expropriation of the servient estate surrounding or in the manner it is
10. Waiver by the dominant owner gathered conducted or managed.
from positive acts
Q: Distinguish nuisance per se from nuisance per
X. NUISANCE accidens.
Q: What is a nuisance? A:
PER SE PER ACCIDENS
A: Any:
As a matter of law As a matter of fact
1. act,
Depends upon its
2. omission,
location and
3. establishment, Need only be proved in
surroundings, the
4. business or any locality
manner of its conduct or
5. condition of property or
other circumstances
6. anything else which: ISAHO
a. Injures/dangers the health or safety May be summarily May be abated only with
of others abated under the law of reasonable notice to the
150 CIVIL LAW TEAM

PROPERTY
necessity person alleged to be Q: What are the requisites of extra-judicial

maintaining or doing abatement?
such nuisance
A: BAR VID
ATTRACTIVE NUISANCE 1. The nuisance must be specially Injurious
to the person affected.
Q: What is the doctrine of attractive nuisance? 2. No Breach of peace or unnecessary injury
must be committed
A. One who maintains on his estate or premises an 3. Demand must first be made upon the
attractive nuisance without exercising due case to owner or possessor of the property to
prevent children from playing therewith or abate the nuisance.
resorting thereto, is liable to a child of tender years 4. Demand is Rejected
who is injured thereby, even if the child is 5. Abatement is Approved by the district
technically a trespasser in the premises. (Jarco health officer and executed with the
Marketing Corp. v. CA, 117 SCAD 818, 321 SCRA 375 assistance of the local police, and
(1991), Paras, p. 741) 6. Value of destruction does not exceed
P3,000
Q: What is the basis for the liability?
Q: When can an owner of the thing abated recover
A: The attractiveness is an invitation to children. damages?
Safeguards to prevent danger must therefore be set
up. A: If the thing is found by the court not to be a
nuisance, the owner can claim damages.
Q: What are the elements of attractive nuisance?
Note: A private person or a public official
A: extrajudicially abating a nuisance shall be liable for
1. It must be attractive damages if he causes unnecessary injury or if the
2. Dangerous to children of tender years. alleged nuisance is later declared by the courts to be
not real nuisance.
Q: Is a swimming pool an attractive nuisance?
Q: Does the right to question the existence of a
A: GR: A swimming pool or water tank is not an nuisance prescribe?
attractive nuisance, for while it is attractive, it is
merely an imitation of the work of nature. Hence, if A: No. It is imprescriptible.
small children are drowned in an attractive water
tank of another, the owner is not liable even if XI. ACTION TO QUIET TITLE
there be no guards in the premises (Hidalgo
Enterprises v. Balandan, et. al, L-3422 Jun. 13, Q: What is an action to quiet title?
1952).
A: It is an action for the purpose of putting an end
XPN: Swimming pool with dangerous slides to vexatious litigation with respect to the property
involved.
Note: The doctrine of attractive nuisance does not
generally apply to bodies of water, artificial as well as Note: An action to quiet title is quasi in rem - an action
natural in the absence of some unusual condition or in personam concerning real property where judgment
artificial other than the mere water and its location. therein is enforceable only against the defeated party
and his privies.
REMEDIES AGAINST NUISANCE
Q: What are the reasons for quieting title?
Q: What are the remedies against nuisance?
A:
A: If the nuisance is: 1. Prevent litigation;
PUBLIC PRIVATE 2. Protect true title and possession;
Civil action Civil Action 3. Real interest of both parties which requires the
Abatement w/o judicial Abatement w/o judicial determination of the precise state of title.
proceedings proceedings
Prosecution under Q: What are the instances where action to quiet
RPC/local ordinance title does not apply?
A: GR:
151
1. To questions involving interpretation of transmitted

documents;
2. To mere written or oral assertions of Q: What are the modes of acquiring ownership?
claims.
A: OLD TIPS
XPNs: 1. Occupation
1. If made in a legal proceeding 2. Law
2. If it is being asserted that the instrument 3. Donation
or entry in plaintiff’s favor is not what it 4. Tradition
purports to be 5. Intellectual creation
3. To boundary disputes 6. Prescription
4. To deeds by strangers to the title unless 7. Succession
purporting to convey the property of the
plaintiff A. OCCUPATION
5. To instruments invalid on their face
6. Where the validity of the instrument
Q: What are the requisites of occupation?
involves pure questions of law
Q: Edgardo donated a parcel of land to a barangay A: WISCS

subject to the condition that it shall be used for 1. There must be Seizure of a thing,
the construction of a public plaza within 5 years 2. which must be a Corporeal personal
from execution of the Deed of Donation. property,
Otherwise, the deed shall have no force and effect 3. which must be Susceptible of
and ownership of the land will revert to the donor. appropriation by nature
The barangay took possession of the property and 4. The thing must be Without an owner
allowed the construction of buildings by public and 5. There must be an Intention to
private entities. Edgardo filed a complaint for appropriate.
quieting of title and recovery of possession of the
area donated against the barangay claiming that Q: Distinguish occupation from possession.
the donation had ceased to be effective, for failure
to comply with the conditions of the donation. A:
Was the action to quiet title properly made? OCCUPATION POSSESSION
As regards acquisition of ownership
A: No. The action to quiet title is unavailing until the
donation shall have first been revoked. In the case Merely raises the
at bar, the barangay traces its claim of ownership presumption of
Mode of acquiring
over the disputed property to a valid contract of ownership when
ownership
donation which is yet to be effectively revoked. exercised in the concept
Such rightful claim does not constitute a cloud on of owner
the supposed title of Edgardo over the same As to property involved
property removable by an action to quiet title. Involves only corporeal
(Dolar v. Brgy. Lublub, G.R. No. 152663, Nov. 18, Any kind of property
personal property
2005)
As regards ownership of the thing by another
XII. MODES OF ACQUIRING OWNERSHIP Requires that the object The property may be
be without an owner owned by somebody
Q: Differentiate mode from title. As regards the intent to acquire
A: May be had in the
There must be an intent
concept of a mere
MODE TITLE to acquire ownership
holder
Serves merely to give
Directly and immediately As regards possession
the occasion for its
produces a real right May not take place w/o May exist w/o
acquisition or existence
some form of possession occupation
Cause Means
As to period
Proximate cause Remote cause
Short duration Generally longer
Essence of the right Means whereby that
which is to be created or essence is transmitted As to leading to another mode of acquisition
152 CIVIL LAW TEAM

PROPERTY
Cannot lead to another May lead to another

mode of acquisition mode- prescription Q: What are the essential features or elements of
a true donation?
Q: What are the things susceptible of occupation?
A:
1. Alienation of property by the donor during his
A:
lifetime, which is accepted
1. Things that are without an owner – res nullius;
2. Irrevocability by the donor of the donation
abandoned
3. Animus Donandi (donative intent)
4. Consequent impoverishment of the donor
Note: Stolen property cannot be subject of
(diminution of his assets)
occupation
Q: What rules govern donations of the same thing

2. Animals that are the object of hunting and
to different donees?
fishing
3. Hidden treasure
A: These are governed by provisions on double sale
4. Abandoned movables.
as set forth in Article 1544. (Art. 744, NCC)
Q: May a person acquire ownership over a wild
Note: If the same thing should have been sold to
animal by occupation? different vendees, the ownership shall be transferred
to the person who may have first taken possession
A: Wild animals are considered res nullius when not thereof in good faith, if it should be movable property.
yet captured. After its capture, animals that Should it be immovable property, the ownership shall
escaped become res nullius again. belong to the person acquiring it who in good faith
first recorded it in the Registry of Property. Should
Q: When can land be the object of occupation? there be no inscription, the ownership shall pertain to
the person who in good faith was first in the
A: It depends. possession; and, in the absence thereof, to the person
1. If without an owner, it pertains to the who presents the oldest title, provided there is good
State (Regalian Doctrine). faith. (Art. 1544, Civil Code)
2. If abandoned and the property is private,
it can be the object of occupation. OBJECT OF DONATIONS
3. And if the land does not belong to anyone
is presumed to be public. Q: What may donation cover?
B. DONATION A: Donation may cover all present property.

Donations cannot comprehend future property.
1. DEFINITION
(Art. 751, NCC)
Q: What is donation?
Q: Can future inheritance or the inchoate right to
A: It is an act of pure liberality whereby a person inherit be donated?
disposes gratuitously of a thing or right in favor of
another who accepts it. (Art. 725, Civil Code.) A: No, because it is future property.
Q: What are the requisites of donation? Q: May property, the acquisition of which is
subject to suspensive condition be donated?
A: ACID
1. Donor must have Capacity to make the A: Yes, because once the condition is fulfilled, it
donation retroacts to the day the contract is constituted.
2. He must have donative Intent (animus (Art. 1187 par 1, NCC)
donandi)
Q: May ownership and usufruct of property be
3. There must be Delivery
donated to different persons separately?
4. Donee must Accept or consent to the
donation during the lifetime of the donor
A: Yes, provided all the donees are living at the time
and of the donee in case of donation inter
of donation. (Art. 756, NCC)
vivos (Art. 746, NCC); whereas in case of
donation mortis causa, acceptance is Q: Is there a limitation on the amount that can be
made after donor’s death because they donated?
partake of a will (Art. 728, NCC)
153
A: living at the time of the donation for any cause or

1. If the donor has forced heirs he cannot give or circumstances. (Art. 757)
receive by donation more than what he can
give or receive by will. Note: If the reversion is in favor of other persons who
2. If the donor has no forced heirs, donation may are not all living at the time of the donation, the
include all present property provided he reversion stipulated shall be void, but the donation
reserves in full ownership or in usufruct: shall remain valid.
a. the amount necessary to support him and
those relatives entitled to support from 3. KINDS
him.
b. property sufficient to pay the donor’s
debt contracted prior to the donation. Q: What are the kinds of donation?
2. CHARACTERISTICS A:
1. According to motive or cause: SRMO
A. EXTENT TO WHICH DONOR MAY DONATE a. Simple
PROPERTY b. Remuneratory (1st kind)
c. Remuneratory (2nd kind): Conditional or
Q: Up to what extent may a donation cover? Modal donations
d. Onerous donations
2. As to perfection or extinguishment:
A: It may comprehend all the present property of
a. Pure
the donor, or part thereof, provided he reserves, in
b. With a condition
full ownership or in usufruct, sufficient means for
c. With a term
the support of himself, and of all relatives who, at
3. According to effectivity:
the time of the acceptance of the donation, are by
a. Inter vivos (Art. 729, Civil Code)
law entitled to be supported by the donor. (Art.
b. Mortis Causa (Art. 728, Civil Code)
750, NCC)
c. Propter Nuptias
Q: Can future properties be subject of donation? Q: Discuss the kinds of donation according to
motive or cause?
A: No, donations cannot comprehend future
properties A:
PURPOSE FORM
Note: Future property means anything which the Simple
donor cannot dispose of at the time of the donation. same to that of forms in
(Art. 751, NCC) pure liberality
donations
Remuneratory (1st kind)
B. RESERVATIONS AND REVERSIONS to reward past services
provided the services do same to that of forms in
Q: What is the effect if the donor violates the not constitute a donations
requirement for reservation under Article 750? demandable debt.
Remuneratory (2nd kind)
A: A donation where the donor did not reserve 1. reward future
services; or 1. Onerous – same
property or assets for himself in full ownership or in form of that of
2. because of future
usufruct sufficient for his support and all relatives contracts
charges or
legally dependent upon him, is not void. It is merely 2. Gratuitous –
burdens, when
reducible to the extent that the support to himself the value of said same form of
and his relatives is impaired or prejudiced. (Pineda services, burdens, that of
Property, p. 571, 1999 ed) or charges is less donations
than the value of
Q: What is reversion in donation? the donation.
Onerous
Burdens, charges or
A: It is a condition established in the deed of same as that of
services are equal in
donation which has for its effect the restoration or contracts
value to that of the
return of the property donated to the donor or his donation.
estate or in favor of other persons who must be
154 CIVIL LAW TEAM

PROPERTY
Q: Discuss the kinds of donation according to C. DONATION MORTIS CAUSA

motive or cause?
Q: What is donation mortis causa?
A:
1. Pure donation – is one which is not subject to A:These are donations which are to take effect
any condition upon the death of the donor.
2. Conditional – is one wherein the donor
imposes on the donee a condition dependent Note: It partakes of the nature of testamentary
on the happening of a future event or past provisions and governed by the rules on succession.
event unknown to the parties. (Art. 728, NCC)
3. With a Term – is one wherein the donor
imposes on the donee a condition dependent Q: Distinguish donation inter vivos from donation
upon the happening of a future and certain mortis causa.
event.
A:
A. DONATION INTER VIVOS INTER VIVOS MORTIS CAUSA
As to when it takes effect
Q: What are the limitations imposed by law in Takes effect during the
making donations inter vivos? lifetime of the donor, Takes effect upon
independently of the his donor’s death
A: RFM death
1. Donor must Reserve sufficient means for As to cause or consideration
his support and for his relatives who are In contemplation of
entitled to be supported by him (Art. 750, donor’s death without
Cause is donor’s pure
NCC) intention to dispose of
generosity
2. Donation cannot comprehend Future the thing in case of
property except donations between survival
future husband and wife (See Art. 84 FC) On predecease
3. No person may give by way of donation Valid if donor survives
More than he may give by will Void if donor survives
the done
On revocability
B. DONATION BY REASON OF MARRIAGE Always revocable at any
Generally irrevocable
time and for any reason
except for grounds
Q: What are donations by reason of marriage or before the donor’s
provided for by law
donations propter nuptias (DPN)? death
On formalities
A: Those donations which are made before the Must comply with the Must comply with the
celebration of the marriage, in consideration of the formalities of donations formalities of a will
same, and in favor of one or both parties. On when acceptance is made
Acceptance during
After donor’s death
Q: What are the grounds for filing an action for donor’s lifetime
revocation of a DPN? On when property is conveyed to the donee
Property retained by
A: Property completely
the donor while he is
1. Marriage is not celebrated conveyed to the donee
still alive
2. Marriage is judicially declared void On tax payable
3. Marriage took place without consent of Donor’s tax Estate tax
parents, when required by law
4. Marriage is annulled and donee acted in bad D. ONEROUS DONATION
faith
5. Upon legal separation, donee being the guilty Q: What is an onerous donation?
spouse
6. Donation subject to resolutory condition and it A: A donation given for which the donor received a
took place valuable consideration which is the equivalent of
7. Donee committed an act of ingratitude the property so donated.
Q: What are the kinds of onerous donations?
155
A: Because the donee may not want to accept the

A: donor’s liberality or if donation is onerous, he may
1. Totally onerous – when the burden is equal to not agree with the burden imposed.
or greater than the value of the property
donated Note: Donation is perfected once the acceptance of
2. Partially onerous – when the burden is lesser the donation was made known to the donor.
than the value of the donation. (Pineda Accordingly, ownership will only revert to the donor if
Property, p. 547, 1999 ed) the resolutory condition is not fulfilled.
Q: What laws will apply to onerous donations? Q: What is the effect of donations made to
incapacitated persons?
A:
1. Totally onerous – rules on contracts A: Donations made to incapacitated persons shall
2. Partially onerous be void, though simulated under the guise of
a. Portion exceeding the value of the burden another contract or through a person who is
– simple donations interposed (Art. 743, NCC)
b. Portion equivalent to the burden – law on
contracts (Pineda Property, p. 547, 1999 Q: Who may accept donations made in favor of
ed) minors?
E. SIMPLE, MODAL, CONDITIONAL A: If the donation is pure and simple and does not
require written acceptance, the minors can accept
the donation by themselves
Q: What is a simple donation? If the donation needs written acceptance, it may be
accepted by their guardian or legal representatives
A: One which is not subject to any condition
Q: Who may accept donations made to conceived
Q: What is a conditional donation?
and unborn children?
A: One wherein the donor imposes on the done a
A: Donations made to conceived and unborn
condition dependent on the happening of a future children may be accepted by those who would
event or past event unknown to the parties.
legally represent them if they were already born
(Art. 742, NCC)
Q: What is the effect if a suspensive condition may
take place beyond the natural expectation of life
B. PERFECTION
of the donor?
Q: When is a donation perfected?
A: The condition does not destroy the nature of the
act as a donation intervolves, unless a contrary
A: Donation is perfected from the moment the
intention appears. (Art. 730)
donor knows of the acceptance by the donee (Art.
734, NCC).
Q: What is a modal donation?
A: A donation subject to burdens or charges. C. DIFFERENCES BETWEEN FORMALITIES FOR

(Pineda Property, p. 536-537, 1999 ed) DONATION OF REAL, PERSONAL PROPERTIES
4. FORMALITIES REQUIRED Q: What is the formalities required for donation of

real and personal properties?
A. HOW MADE AND ACCEPTED
A:
Q: Who must make the acceptance? 1. Of movable property:
a. With simultaneous delivery of property
A: Acceptance may be made by the donee himself donated:
or thru an agent with special power of attorney i. for P 5,000 or less - may be oral/written
otherwise, donation shall be void. (Art. 745, NCC) ii. for more than P 5,000 – written in
public or private document
Q: Why is there a need for an acceptance? b. Without simultaneous delivery:
i. The donation and acceptance must be
written in a public or private
156 CIVIL LAW TEAM

PROPERTY
instrument (Statute of Frauds), Q: What rights and actions does the donee
regardless of value. Otherwise, acquire?
donation is unenforceable
2. Of immovable property: A: The donee is subrogated to the rights and
a. Must be in a public instrument specifying actions which in case of eviction would pertain to
i. the property donated and the donor.
ii. the burdens assumed by the donee
b. Acceptance may be made: Q: When are donors liable for eviction of hidden
i. In the same instrument or defects?
ii. In another public instrument, notified
to the donor in authentic form, and A:
noted in both deeds. Otherwise, 1. If the donation is simple or remunerative,
donation is void. donor is not liable for eviction or hidden
defects because the donation is gratuitous,
unless the donor acted in bad faith.
5. QUALIFICATIONS OF DONOR, DONEE 2. If the donation is onerous, the donor is liable
on his warranty against eviction and hidden
Q: Who qualifies as a donor? defects but only to the extent of the burden.
A: Any person who has capacity to contract and Q: What are the rules regarding the liability of the
capacity to dispose of his property. (Art. 735, NCC) donee to pay the debts of donor?
Q: Why is there a need for capacity to contract? A:

1. Where donor imposes obligation upon the
A: Because a donation inter vivos is contractual in done; (Art. 758, NCC) the done is liable:
nature and is a mode of alienation of property. a. to pay only debts previously contracted;
b. for debts subsequently contracted only
Q: When is the possession of capacity to contract when there is an agreement to that
by the donor determined? effect;
A: His capacity shall be determined as of the time of Note: But he is not liable for debts in excess
the making of donation. (Art. 737, NCC) of the value of donation received, unless the
Note: “Making of donation” shall be construed to contrary is intended.
mean perfection.
2. Where there is no stipulation regarding the
Q: Who may qualify as donees? payment of debts: (Art. 759, NCC)
a. Donee is generally not liable to pay
A: All those who are not specially disqualified by donor’s debts
law. b. Donee is responsible only if donation has
been made in fraud of creditors.
Q: May an unborn child be a donee? A donor?
Note: The presumption that the donations
A: An unborn child may be a donee but not a donor. was made in fraud of creditors arises when
the donor has not left sufficient assets to
As a donee, donations made to conceived and pay his debts, at the time of donation.
unborn children may be accepted by those persons
who would legally represent them if they were c. The done shall not be liable beyond the
already born. (Art. 742, NCC) value of donation received.
Note: if the conceived child did not become a person, B. DOUBLE DONATIONS
the donation is null and void
Q: When is there double donation?
An unborn child cannot be a donor because it is
essential for a person to be able to make a donation, A: When the same thing has been donated to two
he must have full civil capacity or more persons.
6. EFFECTS OF DONATION/LIMITATIONS Q: What is the rule in case of a double donation?
A. IN GENERAL
157
A: The rule on double sale under Article 1544 shall or prejudiced. (Agapito v. De Joya, [CA]. 40 Off. Gaz.
be applicable: P. 3526)
1. Movable – Owner who is first to possess
in good faith Q: May future properties be donated?
2. Immovable –
a. First to register in good faith
A: No. The donor is not yet the owner of said
b. No inscription, first to possess in
property. A person cannot give what he does not
good faith
own.
c. No inscription & no possession in
good faith – Person who presents
oldest title in good faith Note: Future inheritance is future property, but not all
future property is future inheritance. Future
inheritance like future property cannot be disposed of
C. EXCESSIVE/INOFFICIOUS by donation. However, accrued inheritance, even if not
yet delivered, may be alienated by the heir because
Q: What is the rule in case of an excessive or in hereditary rights are transmitted from the moment of
officious donation? the death of the decedent. (Art. 777, NCC)
A: E. IN FRAUD OF CREDITORS
1. A donor may not donate more than what he
can give by will; Q: What is the remedy in case of donations
executed in fraud of creditors?
Reason: If he donates more than what he
cannot give by will, the donation will become A: The creditors may rescind the donation to the
excessive and to insist on it, the legitimism of extent of their credits. The action is known as
the compulsory heirs will be impaired. accion pauliana.
Legitimism are reserved for the compulsory
heirs and the same cannot be impaired or Note: If the donor did not reserved enough assets
disposed of by the testator. to pay his creditors whom he owned before the
donation, the donation is presumed to be in fraud
2. The donee cannot receive by way of donation of creditors.
more than what he may receive by will.
7. VOID DONATIONS
Reason: if the donee can receive by donation
(devise or legacy) more than what the testator Q: What are the donations prohibited by law?
is allowed by law to give, the donation is
inofficious and it may be suppressed totally or A: Donations made: LAW SCRA POP
reduced as to its excess. 1. By individuals, associations or
corporations not permitted by Law to
D. SCOPE OF AMOUNT make donations;
2. By persons guilty of Adultery or
concubinage at the time of donation;
Q: What properties may be donated?
3. By a Ward to the guardian before the
approval of accounts;
A: The donation may cover all present property of 4. By Spouses to each other during the
the donor. Present property refers to property of marriage or to persons of whom the other
the donor which he could dispose of at the time of spouse is a presumptive heir.
the donation. 5. Between persons found guilty of the same
Criminal offense in consideration thereof;
Q: What is the standing of the donation where the 6. To Relatives of such priest, etc. within the
th
donor did not reserved property or assets for 4 degree, or to the church to which such
himself sufficient for his support and all his priest belongs;
relatives legally dependent upon him? 7. To an Attesting witness to the execution
of donation, if there is any, or to the
A: It is valid. It is merely reducible to the extent that spouse, parents or children or anyone
the support to himself and his relatives is impaired claiming under them;
8. To the Priest who heard the confession of
the donor during the latter’s last illness,
158 CIVIL LAW TEAM

PROPERTY
or the minister of the gospel who B. HOW DONE

extended spiritual aid to him during the
same period; Q: Can a donation be revoked once it is perfected?
9. To a public Officer or his/her spouse,
descendants or ascendants in A: Once a donation is perfected, it cannot be
consideration of his/her office; revoked without the consent of the donee except
10. To a Physician, surgeon, nurse, health on grounds provided by law (Arts. 760, 764, 765,
officer or druggist who took care of the NCC)
donor during his/her last illness;
Q: Is revocation or reduction automatic?
REVOCATION OR REDUCTION
A: No. The emergence of the circumstances
A. GROUNDS FOR REVOCATION AND REDUCTION enumerated in Art. 760 does not automatically
revoke or reduce the donation. The revocation or
Q: What are the grounds for revocation of reduction is authorized only if the amount or value
donation? of the property donated exceeds the disposable
free portion.
A:
1. Under Art. 760 Q: For purposes of prescription of action, what is
a. Birth of a donor’s child or children the rule in case of concurrence of two or more
(legitimate, legitimated, or illegitimate) grounds for revocation or reduction?
after the donation, even though born
after his death. A: In the event that two or more causes are
b. Appearance of a donor’s child who is present, the earliest among them shall be the
missing and thought to be dead by the starting point in the reckoning of the period of
donor prescription of the action.
c. Subsequent adoption by the donor of a
minor child. Q: Can a donor execute a donation subject to a
condition?
2. Under Art. 764 – When the donee fails to
comply with any of the conditions which the A: Yes. A donor may execute a donation subject to a
donor imposed upon the donee. condition, the non- fulfillment of which authorizes
the donor to go to court to seek its revocation (not
3. Under Art. 765 – by reason of ingratitude reduction).
a. If the donee should commit some offense
Note: The word “condition” should be understood in
against the person, the honor or the
its broad sense and not in its strict legal sense. It
property of the donor, or of his wife or
means charges or burdens imposed by the donor.
children under his parental authority
b. If the donee imputes to the donor any Q: In a conditional donation, can revocation be
criminal offense, or any act involving done unilaterally by the donor?
moral turpitude, even though he should
prove it, unless the crime or act has been A: No. A donor cannot revoke a conditional
committed against the donee himself, his donation unilaterally, that is, without going to
wife or children under his authority court, even if the donee had breached any of the
c. If he unduly refuses him support when obligations imposed in the donation. A Judicial
the donee is legally or morally bound to action is essential if the donee refuses to return the
give support to the donor property, or pay its value to the donor, or to latter’s
heirs or assigns. However, the action must be filed
Q: What are the grounds for reduction of within the prescriptive period fixed buy law,
donation? otherwise, it will be barred. (Ongsiaco v. Ongsiaco,
101 Phil 1196)
A: The same grounds for revocation under Article
760. The donation shall be reduced insofar as it Q: Can the creditors of the deceased file an action
exceeds the portion that may be freely disposed of for reduction of inofficious donation?
by will, taking into account the whole estate of the
donor at the time of the birth, appearance, or A: No. Only compulsory heirs or their heirs and
adoption of a child. (Art. 761) successors in interest may sue for reduction of
inofficious donations. The remedy of the creditor is
159
to sue, during the lifetime of the donor, for the filing of the
annulment of inofficious donation made in fraud of original petition
creditors (Art. 1387); or they can go against the for adoption,
estate of the deceased and not against the donees. provided a decree
of adoption is
C. EFFECTS issued thereafter
Appearance 4 years From the date an
of a child information was
Q: What are the obligations of the donee upon the
believed to received as to the
revocation or reduction of donation?
be dead existence or
survival of the
A: child believed to
1. Return the thing or the object of the donation be dead
2. If the property had already been alienated and Non- 4 years From the non-
could not be recovered anymore, its value compliance compliance with
shall be paid to the donor. The value shall be with any the condition
the price of the property estimated at the time condition
of the perfection of the donation imposed
Act of 1 year From the time the
3. If the property had been mortgaged, the donor ingratitude donor had
may pay the mortgage obligations, subject to learned of the
reimbursement by the donee. (Art. 762) donee’s act of
ingratitude,
Q: Is the donee required to return the fruits? provided it was
possible for him
A: to file an ation.
1. If due to non-compliance with any condition
imposed on the donation – fruits acquired Q: What if the donor dies within the four-year
after non-compliance shall be returned prescriptive period?
2. If due to causes stated under Art. 760,
ingratitude, or inofficious donations – fruits
acquired from the time the complaint is filed A: The right of action to revoke or reduce is
shall be returned (Art. 768) transmitted to his heirs. (Pineda Property, p. 589,
1999 ed)
D. PRESCRIPTION
E. INOFFICIOUS DONATIONS
Q: What is the period of prescription of action for
revocation or reduction? Q: When is a donation inofficious?
A: A: A donation is inofficious or excessive when its

PRESCIPTIVE RECKONING amount impairs the legitimes of the compulsory
PERIOD PERIOD heirs.
Birth of child 4 years From the birth of
the first child Note: Donations must be charged only against the
Legitimation 4 years From Birth of the disposable free portion. If its amount exceeds the
legitimated child, same, the excess is void for being inofficious (Pineda
not from the date Property, p. 598, 1999 ed)
of marriage of the
parents Q: What is the status of an inofficious donation?
Recognition 4 years From the date the
of an recognition of the A: During the lifetime of the donor, the inofficious
illegitimate child by any donation is effective since the excessiveness of the
child means donation can only be determined after the donor’s
enumerated in death.
Article 712 of the
Family Code
Adoption 4 years From the date of
160 CIVIL LAW TEAM

PROPERTY
Note: Consequently, the donee is entitled to the fruits Q: What if there are mortgages and alienations
of the property donated during the lifetime of the effected before the notation of the complaint for
donor (Art. 771, Pineda Property, p. 599, 1999 ed) revocation in the Registry of Property?
Q: May an heir waive his right during the lifetime A: Such alienations and mortgages shall remain
of the donor to file an action for suppression or valid and must be respected. (Art. 766)
reduction of an inofficious donation?
Note: Alienations and mortgages after the registration
A: No. Such waiver, in whatever form it is extended, of the pendency of the complaint shall be void.
is void. (Art. 772)
Q: What is the remedy of the donor?
F. INGRATITUDE
A: If the property is already transferred in the name
Q: Are there any other grounds for revocation of of the buyer or mortgagee, the remedy of the
donation by reason of ingratitude other than those donor is to recover the value of the property
enumerated under Article 765? determined as of the time of the donation. (Art.
767, Pineda Property, p. 594, 1999 ed)
A: None. The grounds under Article 765 are
exclusive. Q: Can the donor make a renunciation of actions
to revoke in advance?
Q: Suppose the husband of the donee had
maligned the donor, is there a ground for A: No. Such waiver is void.
revocation by reason of ingratitude?
Note: However, the donor may renounce an action to
revoke if the act of ingratitude had already been done.
A: None. The act must be imputable to the donee
himself and not to another. (Pineda Property, p.
593, 1999 ed)
SUMMARY OF THE RULES ON REDUCTION OF DONATIONS
TIME OF FILING OF THE TRANSMISSIBILITY OF

EXTENT OF REDUCTION RIGHTS TO THE FRUITS
ACTION ACTION
1. Failure of the donor to reserve sufficient means for support (Art. 750, NCC)
Any time by the donor Not transmissible

Donation reduced to Donee is entitled to the
or by relatives entitled
Note: the duty to give extent necessary to fruits as owner of the
to support during the
and right to receive provide support (Art. property donated (Art.
donor’s lifetime (Art.
support are personal (Art. 750, NCC) 441, NCC)
750, NCC) 195, FC)
2. Inofficiousness for being in excess of what the donor can give by will (Art. 750, 771, NCC)
Transmissible to Donation effective

donor’s heirs as during the donor’s
Within 5 years after the
donation shall be lifetime subject to Donee appropriates fruits
donor’s death (Art.
reduced as regards the reduction only upon his (Art. 441, NCC)
771, 1149, NCC)
excess at donor’s death death with regard to the
(Art. 771, NCC) excess (Art. 771, NCC)
161
3. Birth, appearance or adoption of a child (Art. 760, NCC)
[Same as in #1
Donee appropriates fruits
Revocation]
not affected by reduction
[Same as in #1 [Same as in #1
(Art. 441, NCC). When
W/in 4 years from birth Revocation] Reduction]
st donation is revoked for
of 1 child, legitimation
any of the cause
(recognition),adoption, To children & Donation reduced to
mentioned in article 760,
judicial declaration of descendants of donor extent necessary to
the donee shall not return
filiation or receipt of upon his death provide support (Art.
the fruits except from the
info of existence of the (Art. 763, 2, NCC) 750, NCC)
filing of the complaint
child believed to be
(Art. 768, NCC).
dead. (Art. 763, NCC)
4. Fraud against creditors (Art. 759, NCC)
Fruits shall be returned in

Within 4 years from
Property returned for case donee acted in bad
perfection of donation
To creditor’s heirs or the benefit of creditors faith; if impossible to
or from knowledge by
successors-in-interest subject to the rights of return, indemnify the
the creditor of the rd
(Art. 1178, NCC) innocent 3 persons donor’s creditor for
donation (Art. 1389,
(Art. 1387, NCC) damages (Art. 1388, ,
NCC)
NCC)
MODES OF EXTINGUISHING OWNERSHIP
Q: What are the modes of extinguishing

ownership?
A:
1. Absolute – all persons are affected
a. physical loss or destruction
b. legal loss or destruction (when it goes out
of commerce of man)
2. Relative – only for certain persons for others
may acquire their ownership
a. law
b. succession
c. tradition as a consequence of certain
contracts
d. donation
e. abandonment
f. destruction of the prior title or right
i.e. expropriation , rescission, annulment,
fulfillment of a resolutory condition)
g. Prescription (Paras, p. 779)
Q: What is a de facto case of eminent domain?
A: Expropriation resulting from the actions of

nature as in a case where land becomes part of the
sea. In this case, the owner loses his property in
favor of the state without any compensation.
162 CIVIL LAW TEAM

PRESCRIPTION
PRESCRIPTION How proved

Should be
DEFINITION Can be proven under the
affirmatively pleaded
general issue without its
and proved to bar the
Q: What is meant by prescription? being affirmatively
action or claim of the
pleaded
adverse party
A: One acquires ownership and other real rights
Relationship by owner and possessor
through the lapse of time in the manner and under
the conditions laid down by law. In the same way, Relationship between the
rights and actions are lost by prescription. (Art. occupant and the land in
One does not look to
1106, NCC) terms of possession is
the act of the
capable of producing
possessor but to the
legal consequences; it is
Q: What are the kinds of prescription? neglect of the owner
the possessor who is the
A: actor
1. Acquisitive prescription - one acquires
ownership and other real rights through the Q: Who may acquire by prescription?
lapse of time in the manner and under the
conditions laid down by law. A: PSM
a. Ordinary – requires the possession of 1. Persons who are capable of acquiring
things in good faith and with a just title property by other legal modes
for the time fixed by law; 2. State
b. Extraordinary – does not require good 3. Minors – through guardians of personally
faith or just title but possession for a
period longer than ordinary acquisitive Q: Who are the persons against whom prescription
prescription runs?
2. Extinctive prescription – loss of property rights
or actions through the possession by another A: MAPJ
of a thing for the period provided by law or 1. Minors and other incapacitated persons
failure to bring the necessary action to enforce who have parents, guardians or other legal
one’s right with in the period fixed by law. representatives.
2. Absentees who have administrators.
Q: Differentiate acquisitive from extinctive 3. Persons living abroad who have managers
prescription. or administrators
4. Juridical persons, except the state and its
A: subdivision
ACQUISITIVE EXTINCTIVE
Q: Against whom does prescription not run?
How acquired
Inaction of the owner A: SPG
Requires possession by a 1. Between Spouses, even though there be a
of possession or
claimant who is not the separation of property agreed upon in the
neglect of his right to
owner marriage settlements or by judicial decree.
bring an action
2. Between Parents and children, during the
Rights covered
minority or insanity of the latter.
Applicable to all kinds 3. Between Guardian and ward during the
Applicable to ownership
of rights whether real continuance of the guardianship
and other real rights
or personal
Effect Q: What can be subject of prescription?
Vests ownership and Produces the
A: PP
other real rights in the extinction of rights or
1. Private property
occupant bars a right of action
2. Patrimonial property of the state
Results in the acquisition
Results in the loss of a
of ownership or other Note: Patrimonial property of the state is the property
real or personal right
real rights in a person as it owns but which is not devoted to public use, public
or bars the cause of
well as the loss of said service, or the development of national wealth. It is
action to enforce the
ownership or real rights wealth owned by the state in its private, as
right
in another distinguished from its public, capacity. (Paras, p. 58)
163
A. ACQUISITIVE B. JUST TITLE
1. CHARACTERISTICS Q: What does just title mean?
Q: What is the basis of acquisitive prescription?

A: It means that the possessor obtained the
possession of the property through one of the
A: It is based on the assertion of a usurper of an
modes recognized by law for acquiring ownership
adverse right for such a long period of time,
but the transferor or grantor was not the owner of
uncontested by the true owner of the right, as to
the property or he has no power to transmit the
give rise to the presumption that the latter has
right (Art. 1129)
given up such right in favor of the former.
(Tolentino, Civil Code, Vol. IV, p. 2)
Note: Just title is never presumed, it must be proved.
(Art. 1130, NCC)
Q: What are the basic requirements of prescription
as a mode of acquiring ownership?
Q: What is a true title?
A:
1. Actual possession of a property, which is A: One which actually exists and is not just a
susceptible of prescription pretended one.
2. Possession must be in the concept of an owner
and not that of a mere holder (Art. 1118) Note: An absolutely simulated or fictitious title is void
3. Possession must be public or open (Art. 1118) and cannot be a basis for ordinary prescription.
4. Possession must be peaceful (Art. 1118) (Pineda Succession and Prescription, p. 646, 2009 ed)
5. Possession must be continuous and not
interrupted (Art. 1118) Q: What is a valid title?
6. Possession must be adverse, that is, exclusive
and not merely tolerated
7. Possession must satisfy the full period required A: A title which is sufficient to transmit ownership
by law (Pineda Succession and Prescription, p. of the property or right being conveyed had the
606, 2009 ed) transferor or grantor been the real owner thereof.
3. EXTRAORDINARY
2. ORDINARY
Q: What is extraordinary prescription?

Q: What is ordinary prescription?
A: Prescription where the possessor is in bad faith.

A: It requires possession of things in good faith and It does not require good faith or just title but
with just title for the time fixed by law. possession for a period longer than ordinary
acquisitive prescription (Pineda Succession and
A. GOOD FAITH Prescription, p. 607, 2009 ed)
Q: When is a possessor in good faith? Q: How does ownership of personal property

prescribe?
A: If he is not aware of the existence of any flaw or
defect in his title or mode of acquisition which A: Through uninterrupted possession for 8 years,
invalidates it (Art. 526 in relation to Art. 1128) and without need of any other condition. (Art. 1132)
has reasonable belief that the person from whom
he received the thing was the owner thereof, and
could transmit his ownership (Art. 1127) Q: How about ownership and other real rights
over immovables?
Q: When must good faith exist?
A: They prescribe through uninterrupted adverse
possession for 30 years, without need of title or of
A: It must exist not only from the beginning but good faith (Art. 1137)
throughout the entire period of possession fixed by
law. (Pineda Succession and Prescription, p. 643,
2009 ed) Q: What are the requisites of extraordinary
prescription?
164 CIVIL LAW TEAM

PRESCRIPTION
A: CLAS G 6. WHAT CANNOT BE REQUIRED BY ACQUISITIVE

1. Capacity of the possessor to acquire by PRESCRIPTION
prescription;
2. Susceptibility of object to prescription; Q: What cannot be subject of prescription?
3. Adverse possession of the character
prescribed by law; A: PRIM
4. Lapse of time required by law; 1. Public domain;
5. Good faith of possessor or proof of just 2. Registered land;
title. 3. Intransmissible rights;
4. Movables possessed through a crime;
4. REQUISITES
Q: Emilio died, leaving 8 children. In 1960, His
Q: What are the basic requirements of prescription eldest child, Flores, took possession of and
as a mode of acquiring ownership? cultivated the land, caused the cancellation of the
tax declaration in Emilio’s name covering a parcel
A: of land and caused the issuance of another in his
1. Capacity to acquire by prescription; own name. The co-heirs of Flores discovered the
2. A thing capable of acquisition by prescription; cancellation. Upon Flores’ death, the heirs of his
3. Possession of the thing under certain sisters together with his surviving sisters filed a
conditions; and complaint in 1999 against the heirs of Flores for
4. Lapse of time provided by law partition of the lot and declaration of nullity of the
documents. Did the heirs of Flores acquire
ownership over the lot by extraordinary
Note: The first two requisites apply to both acquisitive prescription?
ordinary and extraordinary prescription, but the last
two requisites vary for each kind. A: Yes. While the action to demand partition of a
co-owned property does not prescribe, a co-owner
5. PERIOD may acquire ownership thereof by prescription,
where there exists a clear repudiation of the co-
Q: What are the periods as regards prescription as ownership, and the co-owners are apprised of the
a mode of acquisition of ownership? claim of adverse and exclusive ownership. In this
case, the respondents never possessed the lot,
A: much less asserted their claim thereto until 1999
1. Movables when they filed the complaint for partition. In
a. 4 years- good faith contrast, Flores took possession of the lot after
b. 8 years- bad faith Emilio’s death and exercised acts of dominion
2. Immovables thereon- tilling and cultivating the land, introducing
a. 10 years- good faith improvements, and enjoying the produce thereof.
b. 30 years- bad faith The statutory period of prescription commenced in
1960 when Flores, who had neither title nor good
Q: What are the rules for the computation of time faith, secured a tax declaration in his name and
necessary for prescription? may, therefore, be said to have adversely claimed
ownership of the lot. On said date, respondents
A: were also deemed to have become aware of the
1. The present possessor may complete the adverse claim. Flores’s possession thus ripened into
period necessary for prescription by tacking his ownership through acquisitive prescription after
possession to that of his grantor or the lapse of 30 years. (Heirs of Restar v. Heirs of
predecessor in interest. Cichon, G.R. No. 161720, Nov. 22, 2005)
2. It is presumed that the present possessor who
was also the possessor at a previous time, has Q: Sixto, owner of a parcel of land, died. He was
continued to be in possession during the survived by his wife and 3 children. The subject
intervening time, unless there is proof to the land was donated by his wife to Silverio, who
contrary. immediately entered into possession of the land,
3. The first day shall be excluded and the last day built a fence around it, constructed a residential
included. (Art 1138, NCC) house, declared it for tax purposes and paid the
taxes thereon, and resided there until his death.
After 45 years from the time of donation, Soledad,
one of Sixto’s children, filed a complaint for
165
recovery of ownership, and possession against he has not completed the ten-year period. Even if
Silverio. Who is the rightful owner of the land? Anthony tacks the 8-year period of possession by
Carlo who in the deed of sale is supposed to be his
A: By extraordinary acquisitive prescription, Silverio grantor or predecessor in interest (Article 1138[I],
became the rightful owner of the land. In CC), the period is still short of ten years.
extraordinary prescription ownership and other real
rights over immovable property are acquired Q: If Carlo is able to legally recover his property,
through uninterrupted adverse possession thereof can he require Anthony to account for all the fruits
for 30 years without need of title or of good faith. he has harvested from the property while in
possession?
When Soledad filed the case, Silverio was in
possession of the land for 45 years counted from A: Since Anthony is a possessor in good faith,
the time of the donation. This is more than the Anthony cannot be made to account for the fruits
required 30 years of uninterrupted adverse he gathered before he was served with summons. A
possession without just title and good faith. Such possessor in good faith is entitled to the fruits
possession was public, adverse and in the concept received before the possession was legally
of an owner. He declared the land for taxation interrupted by the service of summons (Art. 544,
purposes and religiously paid the realty taxes CC). After Anthony was served with summons, he
thereon. Together with his actual possession of the became a possessor in bad faith and a builder,
land, these tax declarations constitute strong planter, sower in bad faith. He can also be made to
evidence of ownership of the land occupied by him. account for the fruits but he may deduct expenses
(Calicdan v. Cendeña, G.R. No. 155080, Feb. 5, for the production gathering and preservation of
2004) the fruits (Art. 443, CC).
Q: Anthony bought a piece of untitled agricultural Q: If there are standing crops on the property
land from Bert. Bert, in turn, acquired the property when Carlo recovers possession, can Carlo
by forging Carlo’s signature in a deed of sale over appropriate them?
the property. Carlo had been in possession of the
property for 8 years, declared it for tax purposes, A: The value of the standing crops must be prorated
and religiously paid all taxes due on the property. depending upon the period of possession and the
Anthony is not aware of the defect in Bert’s title, period of growing and producing the fruits.
but has been in actual physical possession of the Anthony is entitled to a part of the net harvest and
property from the time he bought it from Bert, a part of the expenses of cultivation in proportion
who had never been in possession. Anthony has to his period of possession. However, Carlo may
since then been in possession of the property for allow Anthony to gather these growing fruits as an
one year. indemnity for the expenses of cultivation. If
Anthony refuses to accept this concession, he shall
Can Anthony acquire ownership of the property by lose the right to indemnity under Art. 443. (Art.
acquisitive prescription? How many more years 545, par. 3, NCC). (2008 Bar Question)
does he have to possess it to acquire ownership?
A: Yes, Anthony can acquire ownership of the B. EXTINCTIVE

property by ordinary acquisitive prescription which
requires just title and good faith (Art. 1117, CC). 1. CHARACTERISTICS
There was just title because a deed of sale was
issued in his favor even though it was forged, which Q: What is extinctive prescription?
fact he was not aware of. He needs to possess the
land in good faith and in the concept of owner for a A: It refers to the time within which an action may
total of ten years in order to acquire ownership. be brought, or some act done, to preserve a
Since Anthony possessed the land for only one year,
right (Pineda Succession and Prescription, p. 660, A: It based on the probability, born of experience,
2009 ed) that the alleged right which accrued in the past
never existed or has already been extinguished; or
Note: It is also referred to as prescription of actions, if it exists, the inconvenience caused by the lapse of
statute of limitations, and statute of repose. time should be borne by the party negligent in the
assertion of his right. (Tolentino, Civil Code of the
Philippines, Vol. IV, p. 2)
Q: What is the basis of extinctive prescription?
166 CIVIL LAW TEAM

PRESCRIPTION
2. REQUISITES 3. PERIODS
Q: What are the basic requirements of prescription Q: What are the periods as regards prescription of
as a mode of acquiring ownership? actions to recover movables and immovables?
A: A:
1. Capacity to acquire by prescription; 1. Movables
2. A thing capable of acquisition by prescription; a. 4 years- good faith
3. Possession of the thing under certain b. 8 years- bad faith (Art. 1140 in relation to
conditions; and Art. 1132)
4. Lapse of time provided by law 2. Immovables
a. 10 years- good faith
b. 30 years- bad faith (Art. 1144)
II. NO PRESCRIPTION APPLICABLE
NO PRESCRIPTION APPLICABLE
When it is possessed through a crime such as robbery, theft, or estafa.
Note: The person who cannot invoke the right of prescription is the offender or person
By Offender who committed the crime or offense, not a subsequent transferee who did not
participate in the crime or offense, unless the latter knew the criminal nature of the
acquisition of the property by the transferor. (Art. 1133, Pineda Succession and
Prescription, p. 651, 2009 ed)
1. An action to recover a registered land by the owner
2. Right to petition for the issuance for the issuance of a Writ of Possession filed
Registered Lands (PD
by the applicant for registered land
1529)
Note: Similarly, an action to recover possession of a registered land never prescribes.
1. Action legal to
demand a right of way Imprescriptible
2. To abate a nuisance
Action to quiet title if
Imprescriptible
plaintiff in possession
Applies to both action and defense.
Void contracts
Note: However, an action to annul a voidable contract prescribes after 4 years
Action to demand
partition
As long as the co-ownership is recognized expressly or impliedly (Art. 494)
Note: Distinguished
from laches
Right of reversion or reconveyance to the State of the public properties registered and
which are not capable of private appropriation or private acquisition does not prescribe
Property of public
Note: In contrast, where private property is taken by the Government for public use
dominion
without first acquiring title thereto either through expropriation or negotiated sale , the
owner’s action to recover the land or the value thereof does not prescribe.
167
III. PRESCRIPTION OR LIMITATION OF ACTIONS
Q: What are the respective prescriptive periods of

actions specified under the Civil Code?
A:
ACTIONS PRESCRIPTIVE PERIOD
8 years (good faith)or 4
years (bad faith) from
the time the possession
Recover Movables is lost (Art. 1140, Pineda
Succession and
Prescription, p. 666, 2009
ed)
30 years (Recover
ownership) (Art. 1141)
10 years (Recover real
right of possession) (Art.
Recover Immovables
555 (4),Pineda
Succession and
Prescription, p. 667, 2009
ed)
10 years from default of
Mortgage Action
mortgagor (Art. 1142)
Based on written
contract
Note: If contract is oral 10 years

or quasi, prescriptive
period is 6 years (Art.
1145)
10 years from the time
Based on obligation
the right of action
created by law
accrues
10 years from the day
judgment became final
Based on judgment
and executory (Art.
1144)
Based upon an injury to 4 years
the rights of plaintiff
Based on quasi-delicts 4 years (Art. 1146)
Forcible entry and 1 year
detainer
Defamation 1 year (Art. 1147)
All other actions not 5 years (Art. 1149)
specified
168 CIVIL LAW TEAM

OBLIGATIONS
OBLIGATIONS aspect while obligation is the passive aspect.

Thus, it is said that the concepts of credit
I. DEFINITION and debt are two distinct aspects of unitary
concept of obligation. (Pineda, Obligations
Q: What is an obligation? and Contracts, p. 2, 2000)
A: It is a juridical necessity to give, to do, or not to 4. Object or prestation – it is the subject

do. (Art. 1156) matter of the obligation which has an
economic value or susceptible of
It is a juridical relation whereby a person (creditor) pecuniary substitution in case of
may demand from another (debtor) the observance noncompliance. (Pineda, Obligations and
of a determinative conduct (giving, doing, or not Contracts, p. 2, 2000) It is a conduct that
doing), and in case of breach, may demand may consist of giving, doing, or not doing
satisfaction from the assets of the latter. (Arias something. (Pineda, Obligations and
Ramos) Contracts, p. 2, 2000)
Note: Art. 1156 refers only to civil obligations which Note: In order to be valid, the object must be:
are enforceable in court when breached. It does not 1. licit or lawful;
cover natural obligations (Arts. 1423-1430) because 2. possible, physically & judicially;
these are obligations that cannot be enforced in court 3. determinate or determinable; and
being based merely on equity and natural law and not 4. pecuniary value or possible equivalent
on positive law. (Pineda, Obligations and Contracts, in money.
2000 ed., p3)
Note: Absence of either of the first three (licit, possible
II. ELEMENTS OF AN OBLIGATION and/or determinate) makes the object void.
Form is not generally considered essential, though

Q: What are the elements of an obligation?
sometimes it is added as the 5threquisite.There is no
particular form to make obligations binding, except in
A: JAPO certain rare cases. (Tolentino, Civil Code of the
1. Juridical tie or vinculum juris or efficient Philippines, Vol. IV, 2002 ed. p. 57)
cause – is the efficient cause by virtue of
which the debtor has become bound to III. DIFFERENT KINDS OF PRESTATION
perform the prestation. Pineda,
Obligations and Contracts, 2000, p.2) ( Q: What are the different kinds of prestation?
Distinguish.
Note: The vinculum juris is established by:
1. law (i.e. – relation of husband and wife
A:
for support)
2. bilateral acts (i.e. – contracts) OBLIGATION OBLIGATION TO OBLIGATION NOT
3. unilateral acts (i.e. – crimes and quasi- TO GIVE DO TO DO
delicts) (Tolentino, Civil Code Vol. IV, Consists in the
Covers all kinds
1999 ed. p.59) delivery of a
of works or Consists in
movable or
services whether refraining from
2. Active subject [creditor (CR) or obligee] – immovable
physical or doing some acts
is the one who is demanding the thing to the
mental
performance of the obligation. It is he creditor
who in his favor the obligation is i.e. – Easement
constituted, established or created. prohibiting
(Pineda, Obligations and Contracts, 2000, building
p.2) proprietor or
i.e. – Contract possessor from
3. Passive subject [debtor (DR) or obligor] – i.e. – Sale, for professional committing
is the one bound to perform the deposit, pledge, services like nuisance(Art.
prestation to give, to do, or not to do. donation, painting, 682), restraining
antichresis modeling, order or
(Pineda, Obligations and Contracts, 2000
singing, etc. injunction
ed., p. 2)
(Pineda,
Obligations and
Note: When there is a right there is a
Contracts, p. 3,
corresponding obligation. Right is the active
2000)
169
6. Creation
Note: It is the conduct that must be observed by the a. Legal – imposed by law (Art. 1158)
debtor/obligor. (Pineda, Obligations and Contracts, p. b. Conventional – established by the
2, 2000) agreement of the parties like
contracts
Q: What are the requisites of a valid prestation? 7. Susceptibility of partial fulfillment
a. Divisible – obligation is susceptible of
A: partial performance (Art. 1223;
1. Possible, physically and juridically; 1224)
2. Determinate, or at least determinable b. Indivisible – obligation is not
according to pre-established elements or susceptible of partial performance
criteria; and (Art. 1225)
3. Has a possible equivalent in money (Tolentino, 8. Existence of burden or condition
Civil Code Vol. IV, p. 58, 1999 ed). a. Pure – is not burdened with any
condition or term. It is immediately
IV. CLASSIFICATION OF OBLIGATIONS demandable (Art. 1179)
b. Conditional – is subject to a
Q: What are the kinds of obligation? condition which may be suspensive
(happening of which shall give rise to
A: From the viewpoint of: the obligation) or resolutory
1. Sanction (happening of which terminates the
a. Civil – gives a right of action to obligation). (Art. 1181)
compel their performance 9. Character of responsibility or liability
b. Natural – not based on positive law a. Joint – each debtor is liable only for a
but on equity and natural law; does part of the whole liability and to
not grant a right of action to enforce each creditor shall belong only a part
their performance, but after of the correlative rights (8 Manresa
voluntary fulfillment by the obligor, 194; Art. 1207)
they authorize retention of what has b. Solidary – a debtor is answerable for
been delivered/ rendered by reason the whole of the obligation without
thereof. prejudice to his right to collect from
c. Moral – cannot be enforced by his co-debtors the latter’s shares in
action but are binding on the party the obligation (Art. 1207)
who makes it in conscience and 10. Right to choose and substitution
natural law. a. Alternative – obligor may choose to
2. Performance completely perform one out of the
a. Positive – to give; to do several prestations (Art. 1199)
b. Negative – not to do b. Facultative – only one prestation has
3. Subject matter been agreed upon, but the obligor
a. Personal – to do; not to do may render one in substitution of
b. Real – to give the first one (Art. 1206)
4. Object 11. Imposition of penalty
a. Determinate/specific – particularly a. Simple – there is no penalty imposed
designated or physically segregated for violation of the terms thereof
from all others of the same class. (Art. 1226)
b. Generic– is designated merely by its b. Obligation with penalty – obligation
class or genus. which imposes a penalty for violation
c. Limited generic– generic objects of the terms thereof (Art. 1226;
confined to a particular class (e.g. an Pineda, Obligations and Contracts,
obligation to deliver one of my 2000 ed, p. 5-7)
horses) (Tolentino, Civil Code of the
Philippines, Vol. IV, 2002 ed, p. 91)
5. Person obliged
a. Unilateral – only one party is bound
b. Bilateral – both parties are bound
170 CIVIL LAW TEAM

OBLIGATIONS
V. SOURCES OF OBLIGATIONS
A. SOURCES OF OBLIGATIONS
Q: What are the sources of obligations? Distinguish.
A: LCQ-DQ
Sources Obligations Perfection
Law ex lege From the time designated by the law creating or regulating them.
GR: From the time of the perfection of the contract (i.e. meeting of the
minds)
XPNs:
Contracts ex contractu
1. When the parties made stipulation on the right of the creditor to
the fruits of the thing
2. When the obligation is subject to a suspensive condition or period;
arises upon fulfillment of the condition or expiration of the period.
Quasi-
ex quasi-contractu
contracts
ex maleficio or ex
Delicts From the time designated by the law creating or regulating them.
delicto
Quasi- ex quasi maleficio or ex
delict quasi- delicto
Note: No obligation exists if its source is not one of those enumerated in Article 1157. (Navales v. Rias, 8 Phil. 508)
1. OBLIGATION EX LEGE
A: Yes. Obligations arising from contracts have the
Q: Are obligations derived from law presumed? force of law between the parties and should be
complied with in good faith. (Art. 1159)
A: No. Obligations derived from law are not
presumed. Only those expressly determined in the Q: What are the requisites for a contract to give
Code or in special laws are demandable and shall be rise to obligations ex contractu?
regulated by the precepts of the law which
establishes them and as to what has not been A:
foreseen by the provisions of Book IV of NCC. (Art. 1. It must contain all the essential requisites
1158) of a contract; (Art. 1318) and
2. It must not be contrary to law, morals,
Note: If there is conflict between the NCC and a special good customs, public order, and public
law, the latter prevails unless the contrary has been policy. (Art. 1306)
expressly stipulated in the NCC. (Art. 18, Paras, Civil
Code of the Philippines Annotated, Vol. IV, 2008 ed., p. Q: What is “compliance in good faith”?
86)
A: It is performance in accordance with the
Q: What are the characteristics of a legal stipulation, clauses, terms and conditions of the
obligation or an obligation ex lege? contract. (Pineda, Obligations and Contracts, 2000
ed., p. 12)
A:
1. Does not need the consent of the obligor; Note: The contract is the “law” between the parties.
2. Must be expressly set forth in the law creating (Art. 1159)
it and not merely presumed; and
3. In order that the law may be a source of Q: May a party unilaterally evade his obligation in
obligation, it should be the creator of the the contract?
obligation itself. (Art. 1158)
A: GR: Neither party may unilaterally evade his
2. OBLIGATION EX CONTRACTU obligation in the contract.
Q: Do obligations arising from contracts have the XPNs: Unilateral evasion is allowed when the:
force of law between the parties? 1. contract authorizes such evasion
171
2. other party assents thereto 4. OBLIGATIONS EX DELICTO
Q: What governs obligations arising from Q: What is delict?

contracts?
A: It is an act or omission punished by law.
A: GR: These obligations shall be governed primarily
by the stipulations, clauses, terms and conditions of Q: What is the basis for civil liability arising from
the parties’ agreements. delicts as according to the penal code?
XPN: Contracts with prestations that are A: Art. 100 of the Revised Penal Code provides that:
unconscionable or unreasonable. (Pineda, “Every person criminally liable for a felony is also
Obligations and Contracts, 2000 ed., p. 12-13) civilly liable.”
3. OBLIGATION EX QUASI - CONTRACTU A crime has dual character: (1) as an offense against
the state because of the disturbance of the social
Q: What is quasi-contract? order; and (2) an offense against the private person
injured unless it involves the crime of treason,
A: It is a juridical relation arising from lawful, rebellion, espionage, contempt and others wherein
voluntary and unilateral acts based on the principle no civil liability arises on the part of the offender
that no one shall be unjustly enriched or benefited either because there are no damages to be
at the expense of another. (Art. 2142) compensated or there is no private person injured
by the crime. (Reyes, The Revised Penal Code,
Q: What are the characteristics of a quasi- Criminal Law, Book One, 2008, ed., p. 875)
contract?
Q: What is the scope of civil liability?
A:
1. It must be lawful. A: RRI
2. It must be voluntary. 1. Restitution;
3. It must be unilateral. (Pineda, Obligations and 2. Reparation for damage caused; and
Contracts, p.14, 2000) 3. Indemnity for consequential damages.
(Art. 104, RPC)
Q: What is presumptive consent?
Q: Is civil action implicitly instituted in criminal
A: Since a quasi-contract is a unilateral contract case?
created by the sole act or acts of the gestor, there is
no express consent given by the other party. The A: GR: Yes. When a criminal action is instituted, the
consent needed in a contract is provided by law civil action for the recovery of the civil liability
through presumption. (Pineda, Obligations and arising from the offense charged shall be deemed
Contracts, p. 15, 2000) instituted with the criminal action. (Rule 111, Sec.
1, Rules of Court)
Q: What are the principal forms of quasi-
contracts? XPNs: No. When the offended party:
1. Waives the civil action
A: 2. Reserves the right to institute it
1. Negotiorium gestio (inofficious manager) – separately
arises when a person voluntarily takes charge 3. Institutes the civil action prior to the
of the management of the business or criminal action. (Rule 111, Sec. 1, Rules of
property of another without any power from Court)
the latter. (Art. 2144)
2. Solutio indebiti (unjust enrichment)–takes Q: What is the effect of acquittal in criminal case?
place when a person received something from
another without any right to demand for it, A: GR: The acquittal of the accused in criminal case
and the thing was unduly delivered to him on ground of reasonable doubt does not preclude
through mistake. (Art. 2154) the filing of a subsequent civil action and only
preponderance of evidence is required to prove the
Note: The delivery must not be through liberality or case.
some other cause.
172 CIVIL LAW TEAM

OBLIGATIONS
XPN: When the acquittal is based on the reason Q: Distinguish natural obligation from civil
that: obligation.
1. The accused did not commit the crime
charged; or A:
2. There is a declaration in the decision of NATURAL OBLIGATION CIVIL OBLIGATION
acquittal that no negligence can be Based from law,
attributed to the accused and that the Based on equity and contracts, quasi-
fact from which the civil action might natural law contracts, delicts, and
arise did not exist. (Art. 29) quasi-delicts
Cannot be enforced in
Can be enforced in court
5. OBLIGATIONS EX QUASI – DELICTO court because the obligee
because the obligee has a
has no right of action to
right of action
Q: What is quasi-delict or tort? compel its performance
A: It is an act or omission arising from fault or Q: Distinguish natural obligation from moral
negligence which causes damage to another, there obligation.
being no pre-existing contractual relations between
the parties. (Art. 2176) A:
Q: What are the elements of a quasi-delict? NATURAL OBLIGATION MORAL OBLIGATION

Juridical tie previously
A: NDCN existed between the
parties but because of
1. Negligent or wrongful act or omission; No juridical tie
certain intervening
2. Damage or injury caused to another;
causes they cannot be
3. Causal relation between such negligence enforced in courts
or fault and damage; Voluntary fulfillment by
4. No pre-exisitng contractual relationship Performance is a pure act
the debtor is a legal
between the parties (Article 2176). of liberality which springs
fulfillment with legal
from blood, affection
effect
B. NATURAL OBLIGATIONS Within the domain of the Within the domain of
law morals
Q: What are natural obligations? Performance of moral
When fulfilled produce obligations does not
A: Natural obligation, not being based on positive legal effects produce legal effects
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 Q: What are the instances of natural obligations?
authorize the retention of what has been delivered
or rendered by reason thereof. (Art. 1423 ) A:
1. Performance after the civil obligation has
Note: They are real obligations to which the law denies prescribed (Art. 1424);
an action, but which the debtor may perform 2. Reimbursement of a third person for a debt
voluntarily. that has prescribed (Art. 1425);
3. Restitution by minor of the thing or price after
Q: What are the conditions for natural obligations annulment of contract (Art. 1426);
to arise? 4. Delivery by minor of money or fungible thing in
fulfillment of obligation (Art. 1427);
A: 5. Performance after action to enforce civil
1. The obligation is not prohibited by law or obligation has failed (Art. 1428,);
contrary to morals and good customs. 6. Payment by heir of debt exceeding value of
2. There must be a previous juridical relationship property inherited (Art. 1429); and
between two persons but due to certain 7. Payment of legacy after will has been declared
intervening circumstances, it lost its legal void. (Art. 1430)
enforceability leaving its fulfillment entirely to
the free will or discretion of the supposed Note: The enumeration is not exclusive. The following
debtor. (Pineda, Obligations and Contracts, 2000 also constitute natural obligations:
ed, p. 633) 1. Support given to unrecognized illegitimate
children by their putative parents, including
support given to illegitimate children by the
173
putative parents despite judgment denying Q: What are the kinds of estoppel?
their recognition;
2. Interest voluntarily paid for the use of A:
money even if no interest is agreed upon in 1. Estoppel by deed (technical estoppel)
writing (Art. 1956; 1960); a. Estoppel by deed proper - signed by a
3. Support given to relatives for whom the law party, which bars him from denying the
made no provisions for their support; and truth of any material facts asserted in it. It
4. Indemnification given to a woman seduced,
applies only between the same parties,
although the seducer was acquitted of the
their privies and cannot be used against
charge of seduction.
strangers. (Pineda, Obligations and
Q: May natural obligations be converted into civil Contracts, 2000 ed. p. 655)
obligations? b. Estoppel by record – truth set forth in a
record, whether judicial or legislative,
A: Yes, by way of novation. The natural obligation cannot be denied (Pineda, Obligations
becomes a valid cause for a civil obligation after it and Contracts, 2000 ed. p. 655)
has been affirmed or ratified anew by the debtor.
(Pineda, Obligations and Contracts, 2000 ed, p. 634) Note: Estoppel by court record, the parties
are precluded from: (a) raising questions
involving matters which were directly
Q: What is the effect of partial performance?
adjudged because of the principle of res
judicata (Estoppel by judgment or direct
A: If only a part of the natural obligation has been estoppel by judgment); and (b) from raising
fulfilled, this partial payment cannot be recovered. questions involving matters that have not
It is converted into civil obligation if it is legally been adjudged but could have been placed
susceptible of confirmation or ratification. in issue and decide in the previous case
because of their relation to the issues
However, if the fulfilled portion is not susceptible of therein (Collateral estoppel by judgment)
confirmation or ratification, this portion can be the (Pineda, Obligations and Contracts, 2000 ed.
basis of a cause of action for recovery of what has p. 654)
been delivered because it has not been converted
into legal obligation. (Pineda, Obligations and 2. Estoppel in pais (equitable estoppel)
Contracts, 2000 ed, p. 634-635) a. by conduct or by acceptance of benefits
b. by representation or concealment
C. EXTRA-CONTRACTUAL OBLIGATIONS c. by silence
d. by omission
ESTOPPEL e. by laches
Q: What is estoppel? LACHES
A: It is an admission or representation is rendered Q: What is laches?

conclusive upon the person making it, and cannot be
denied or disproved as against the person relying A: It is the failure or neglect, for unreasonable
thereon. (Art. 1431) length of time, to do that which by exercising due
diligence could or should have been done earlier; its
Note: negligence or omission to assert a right within a
The admission or representation must be plain and
reasonable time, warranting a presumption that the
clear. Estoppel cannot be sustained on doubtful or
party entitled to assert it either has abandoned it or
ambiguous inferences.
declined to assert it. It is also known as stale
Estoppel is effective only between the parties thereto demands. (Lim Tay vs. Court of Appeals, 293 SCRA
or their successors in interest. (Art. 1439) 634; Pineda, Obligations and Contracts, 2000 ed. p.
609)
Q: What is the basis and purpose of estoppel?
Q: What is the basis of the doctrine of laches or
A: Estoppel is based on public policy, fair dealing, stale demands?
good faith and justice and its purpose is to forbid
one to speak against his own act, representation or A: It is based upon grounds of public policy which
commitments to the injury of one who reasonably requires for the peace of society, discouragement
relied thereon. (Pineda, Obligations and Contracts, of state claims.
2000 ed. p. 644)
174 CIVIL LAW TEAM

OBLIGATIONS
Q: What are the elements of laches? A: It depends upon the kind of obligation.
A: SPECIFIC GENERIC
1. Conduct on the part of the defendant or one Deliver the thing which is
under whom he claims, giving rise to the neither of superior nor
situation complained of; Deliver the thing agreed
inferior quality if quality
2. Delay asserting complainant’s right after he upon specific performance
and circumstances have
had knowledge of the defendant’s conduct and (Art. 1165)
not be stated by the
after he has opportunity to use; partiies (Art. 1246)
3. Lack of knowledge or notice on the part of the Take care of the thing with Specific performance i.e.
defendant that the complainant would assert the proper diligence of a delivery of another thing
the right on which he bases his suit; good father of a family within the same genus as
4. Injury or prejudice to the defendant in the unless the law requires or the thing promised if such
event relief is accorded to the complainant. parties stipulate another thing is damaged due to
(Pineda, Obligations and Contracts, 2000 ed. p. standard of care lack of care or a general
610) (Art.1163) breach is committed
Deliver all accessions,
Q: Distinguish laches from prescription. If the object is generic, but
accessories and fruits of
the source is specified or
the thing even though
A: delimited, the obligation is
they may not have been
to preserve the source
LACHES PRESCRIPTION mentioned (Art. 1166)
Concerned with the Concerned with the Pay damages in case of Pay damages in case of
effect of delay fact of delay breach of obligation by breach of obligation by
Principally a question reason of delay, fraud, reason of delay, fraud,
of inequity of negligence, contravention negligence, contravention
It is a matter of time
permitting a claimed to of the tenor thereof (Art. of the tenor thereof (Art.
be enforced 1170,) 1170)
Not statutory Statutory Obligation is not
Fortuitous event
Applies in inequity Applies at law extinguished (genus nun
extinguishes the
Based on fixed of time quam peruit – genus never
obligation
Not based on fixed of (Pineda, Obligations perishes)
time and Contracts, 2000
ed. p. 609-610) Q: In failing to deliver a thing, what are the
remedies of the creditor?
Note: The doctrine of laches is inapplicable when the
claim was file within the prescriptive period set forth A:
under the law. (Pineda, Obligations and Contracts, SPECIFIC OBLIGATION GENERIC OBLIGATION
2000 ed. p. 610)
Specific performance
(delivery of any thing
VI. NATURE AND EFFECTS OF OBLIGATIONS Specific performance
belonging to the same
A. OBLIGATION TO GIVE
species)
Q: What are the types of real obligation? Ask that the obligation be
Rescission (action to
complied with at the
rescind under Art. 1380,)
debtor’s expense
A:
a. Determinate/specific – particularly designated Resolution or specific
Resolution (action for
or physically segregated from all others of the performance, with
cancellation under Art.
same class. damages in either case
1191)
b. Indeterminate/Generic– is designated merely (Art. 1191)
by its class or genus. Damages, in both cases (Art. 1170)
c. Limited generic– generic objects confined to a
particular class (e.g. an obligation to deliver Note: May be exclusive or in addition to the above-
one of my horses) (Tolentino, Civil Code of the mentioned remedies(Pineda, Obligations and
Philippines, Vol. IV, 2002 ed, p. 91) Contracts, 2000 ed, p. 37)
Q: What are the obligations of the debtor in an Note: In an obligation to deliver a specific thing, the
creditor has the right to demand preservation of the
obligation to deliver a thing?
thing, its accessions, accessories, and the fruits. The
175
creditor is entitled to the fruits and interests from the Q: What is the principle of “balancing of equities”
time the obligation to deliver the thing arise. as applied in actions for specific performance?
Q: When is the debtor obliged to deliver the thing A: In decreeing specific performance, equity
and the fruits? requires not only that the contract be just and
equitable in its provisions, but that the
A: consequences of specific performance, is likewise
1. When obligation is based on law, quasi-delict, be just and equitable. The general rule is that this
quasi-contract or crime, the specific provisions equitable relief will not be granted if, under the
of the applicable law, shall determine when circumstances of the case, the result of the specific
the delivery shall be done or effected. performance of the contract would be harsh,
2. When the obligation is subject to a suspensive inequitable, and oppressive or result in an
condition, the obligation to deliver arises from unconscionable advantage to the plaintiff (Agcaoili
the happening of the condition. v. GSIS, G.R. No. 30056, Aug. 30, 1988).
3. When the obligation is subject to a suspensive
term or period, the obligation arises from the B. OBLIGATION TO DO OR NOT TO DO
constitution, creation or perfection of the
obligation. Q: What are the types of personal obligations?
4. When there is no condition or term (period),
the obligation to deliver arises from the A:
constitution, creation or perfection of the 1. Positive - to do
obligation. (Pineda, Obligations and Contracts, 2. Negative - not to do
2000 ed, p. 31)
Q: What are the remedies in personal obligations?
Q: What is the nature of the right of the creditor
with respect to the fruits? A:
1. Positive personal obligations
A: a. not purely personal act- to have
1. Before delivery – personal right obligation executed at debtor's expense
2. After delivery – real right plus damages
b. purely personal act- damages only.
Note: The creditor has a right to the fruits of the thing
from the time the obligation to deliver it arises. Note: Same rule applies if obligation is done in
However, he shall acquire no real right over it until the contravention of the terms of the obligation.
same has been delivered to him (Art. 1164). Furthermore, it may be decreed that what has
been poorly done be undone. (Art. 1167)
Q: Distinguish personal right from real right.
2. Negative personal obligation – to have the
A: prohibited thing undone at the expense of the
PERSONAL REAL debtor plus damages. However, if thing cannot
Jus ad rem Jus in re be physically or legally undone, only damages
may be demanded. (8 Manresa 58)
Enforceable only against a
Enforceable against the
definite person/group of
whole world Q: Is specific performance a remedy in personal
persons
obligations?
Right to demand from
Right over a specific thing,
another, as a definite A: No. Otherwise this may amount to involuntary
without a definite passive
passive subject, the servitude which is prohibited by the Constitution.
subject against whom the
fulfillment of the
right may be personally (Pineda, Obligations and Contracts, 2000 ed., p. 41)
prestation to give, to do or
enforced.
not to do.
Q: When may a thing be ordered undone?
No definite passive
subject A:
Has a definite passive
(Pineda, Obligations and 1. If made poorly
subject
Contracts, 2000 ed., p. 2. Negative personal obligations provided that
34-35) the undoing is possible
176 CIVIL LAW TEAM

OBLIGATIONS
C. BREACHES OF OBLIGATIONS
Note: In either case, the remedy is to seek recovery for
Q: What are the forms of breach of obligations? damages. (Art.1168)
A: 2. DELAY (MORA)
1. Voluntary –debtor is liable for damages if he is
guilty of: Q: When does delay or default arise?
a. default (mora)
b. fraud (dolo) A: Those obliged to deliver or to do something incur
c. negligence (culpa) in delay from the time the obligee (creditor)
d. breach through contravention of the judicially or extrajudicially demands from them the
tenor thereof (Art. 1170) fulfillment of their obligation.
2. Involuntary – debtor is unable to perform the
obligation due to fortuitous event thus not In reciprocal obligations, neither party incurs in
liable for damages. delay if the other does not comply or is not ready to
comply in a proper manner with what is incumbent
Q: What is the concept of a good father of the upon him. From the moment one of the parties
family? fulfills his obligations, delay by the other begins.
(Art. 1169)
A: The Supreme Court described a good father of a
family by first stating who is not. He is not and is Q: What are the kinds of delay?
not supposed to be omniscient of the future;
rather, he is one who takes precautions against any A:
harm when there is something before him to 1. Ordinary delay – this is the mere failure to
suggest or warn him of the danger or to foresee it. perform an obligation at the appointed time.
(Picart v. Smith, G.R. No. L-12406, Mar. 15, 1918). 2. Extraordinary delay or legal delay – this is the
delay which is tantamount to non-fulfillment
1. COMPLETE FAILURE TO PERFORM of the obligation and arises after the
extrajudicial or judicial demand has been made
Q: What are the effects of breach of obligation? upon the debtor. (Pineda, Obligations and
Contracts, 2000 ed, p. 31)
A: If a person obliged to do something fails to do it,
or if he does it in contravention of the tenor of the Q: What are the requisites of delay?
obligation or what has been poorly done be
undone, the same shall be executed at his cost. A:
(Art. 1167) 1. Obligation must be due, demandable and
liquidated;
When the obligation consists in not doing, and the 2. Debtor fails to perform his positive obligation
obligor does what has been forbidden him, it shall on the date agreed upon;
also be undone at his expense. (Art.1168) 3. A judicial or extra-judicial demand made by the
creditor upon the debtor to fulfill, perform or
Q: What are the instances where the remedy comply with his obligation; and
under Art. 1168 is not available? 4. Failure of the debtor to comply with such
demand.
A:
1. Where the effects of the act which is forbidden Note: In reciprocal obligations, the moment one party
are definite in character – even if it is possible is ready to comply with his obligation, delay by the
for the creditor to ask that the act be undone other begins. There is no need for demand from either
at the expense of the debtor, consequences party.
contrary to the object of the obligation will
have been produced which are permanent in Q: What are the kinds of delay or default?
character.
2. Where it would be physically or legally A:
impossible to undo what has been undone – 1. Mora solvendi – default on the part of the
because of: debtor/obligor
a. the very nature of the act itself; a. Ex re – default in real obligations (to give)
b. a provision of law; or b. Ex personae – default in personal
c. conflicting rights of third persons. obligations (to do)
177
2. Mora accipiendi – default on the part of the MORA ACCIPIENDI

creditor/obligee
3. Compensatio morae – default on the part of Q: What are the requisites of mora accipiendi?
both the debtor and creditor in reciprocal
obligations A:
1. Offer of performance by a capacitated debtor;
MORA SOLVENDI 2. Offer must be to comply with the prestation as
it should be performed; and
Q: What are the requisites of mora solvendi? 3. Refusal of the creditor without just cause.
A: Q: What are the effects of mora accipiendi?

1. Obligation pertains to the debtor;
2. Obligation is determinate, due and A:
demandable, and liquidated; 1. Responsibility of DR is limited to fraud and
3. Obligation has not been performed on its gross negligence.
maturity date; 2. DR is exempted from risk of loss of thing; CR
4. There is judicial or extrajudicial demand by the bears risk of loss
creditor; 3. Expenses by DR for preservation of thing after
5. Failure of the debtor to comply with such delay is chargeable to CR
demand. 4. If the obligation bears interest, DR does not
have to pay from time of delay
Q: Does mora solvendi apply in natural 5. CR liable for damages
obligations? 6. DR may relieve himself of obligation by
consigning the thing
A: No, because performance is optional or
voluntary on the debtor’s part. It does not grant a COMPENSATIO MORAE
right of action to enforce their performance.
Q: What are the rules on default?
Q: Does mora solvendi apply in negative
obligations? A:
1. Unilateral obligations
A: No because one can never be late in not giving or GR: Default or delay begins from extrajudicial
doing something. or judicial demand – mere expiration of the
period fixed is not enough in order that DR
Q: What are the effects of mora solvendi? may incur delay.
A: XPNs:
1. Debtor may be liable for damages or interests; a. The obligation or the law expressly
and so dictates;
b. Time is of the essence;
Note: The interest shall commence from the filing c. Demand would be useless, as DR has
of the complaint when there is no extrajudicial rendered it beyond his power to
demand. perform; or
d. DR has acknowledged that he is in
2. When it has for its object a determinate thing, default.
debtor may bear the risk of loss of the thing 2. Reciprocal obligations
even if the loss is due to fortuitous event. GR: Fulfillment by both parties should be
3. Rescission or resolution simultaneous.
Q: May the debtor’s liability be mitigated even if XPN: When different dates for the
he is guilty of delay? performance of obligation is fixed by the
parties.
A: Yes. If the debtor can prove that loss would
nevertheless transpire even if he had not been in Q: What are reciprocal obligations?
default, the court may equitably mitigate his
liability. (Art. 2215 (4); Pineda, Obligations and A: These are obligations created and established at
Contracts, 2000 ed., p. 47) the same time, out of the same cause and which
178 CIVIL LAW TEAM

OBLIGATIONS
results in the mutual relationship between the of the action for damages based on the same.
parties. However, the law does prohibit any waiver of an
action for future fraud since the same is contrary to
Q: When does a party incur in delay in reciprocal law and public policy. Waiver for future fraud is
obligations? void. (Art. 1171)
A: In reciprocal obligations, one party incurs in Note: Waiver of past fraud is valid since such can be
deemed an act of generosity. What is renounced is the
delay from the moment the other party fulfills his
effect of fraud, particularly the right to indemnity.
obligation, while he himself does not comply or is
not ready to comply in a proper manner with what
is incumbent upon him.
Q: What are the remedies of the defrauded party?
Q: In reciprocal obligations, when is demand
A:
necessary in order for a party to incur in delay?
1. Specific performance (Art. 1233)
2. Resolution of the contract (Art. 1191)
A: Only when the respective obligations are to be
3. Damages, in either case
performed on separate dates.
4. NEGLIGENCE
Q: What is the effect of non-compliance of both
parties in reciprocal obligations?
Q: Distinguish fraud from negligence.
A: If neither party complies with his prestation,
A:
default of one compensates for the default of the
other. FRAUD NEGLIGENCE
There is no deliberate
Q: What may cause the cessation of the effects of There is deliberate intention to cause
mora? intention to cause damage or injury even if
damage the act was done
A: voluntarily
1. Renunciation (express/implied); or Liability cannot be Liability may be
2. Prescription. mitigated mitigated
3. FRAUD GR: Waiver for future

negligence may be
Q: What is fraud? allowed in certain cases
A: It is an intentional evasion of the faithful Waiver for future fraud XPN:Nature of the
performance of the obligation (8 Manresa 72). It is is void obligation or public
also known as deceit or dolo. policy requires
extraordinary diligence
Q: What type of fraud is present in Art. 1171? (e.g. common carrier)
A: It is incidental fraud or fraud in the performance

of the obligation and not the fraud in the execution Note: When negligence is so gross that it amounts to
of the contract or causal fraud. It is the intentional wanton attitude on the part of the debtor, the laws in
evasion of the normal fulfillment of the obligation. case of fraud shall apply.
(Pineda, Obligations and Contracts, 2000 ed, p. 53)
Where negligence shows bad faith (i.e., deliberately
committed) it is considered equivalent to fraud. Any
Note: Responsibility arising from fraud is demandable
waiver of an action for future negligence of this kind is
in all obligations. Any waiver of an action for future
therefore void.
fraud is void. (Art. 1171)
Q: What is the effect if the obligor is in good faith
WAIVER OF FUTURE FRAUD
or in bad faith?
Q: May an action arising from fraud be waived?
A: If the obligor acted in good faith, he is
responsible for the natural and probable
A: With respect to fraud that has already been
consequences of the breach of contract and which
committed, the law does not prohibit renunciation
179
the parties have reasonably foreseen at the time of which led to the damage or injury complained
the constitution of the obligation. of, he cannot recover
If the obligor is guilty of fraud, bad faith, malice or Q: What are the kinds of negligence or culpa?
wanton attitude, he shall be responsible for all
damages which may be reasonably attributed to A:
the non-performance of the obligation. 1. Culpa contractual (contractual negligence) –
which result from breach of contract
Q: What are the effects of contributory negligence 2. Culpa aquiliana (civil negligence or tort or
of the creditor? quasi-delict) – this acts or omissions that cause
damage to another, there being no contractual
A: GR: It reduces or mitigates the damages which relation between the parties. (Art. 2176)
he can recover. 3. Culpa criminal (criminal negligence) – which
results in the commission of a crime or a delict.
XPN: If the negligent act or omission of the
creditor is the proximate cause of the event
Q: Distinguish culpa contractual from culpa aquiliana and culpa criminal.
CULPA CONTRACTUAL CULPA AQUILIANA CULPA CRIMINAL

(CONTRACT) (QUASI-DELICT) (DELICT)
Existence of Negligence
Negligence is merely an incident in Negligence is substantive and Negligence is substantive and
the performance of an obligation independent independent
Contractual Relations
There is always a pre-existing There is no pre-existing There is no pre-existing
contractual relation contractual relation contractual relation
Source of Obligation
The source of obligation of
defendant to pay damages is the The source of obligation is The source of obligation is an act
breach or non-fulfillment of the defendant’s negligence itself or omission punishable by law
contract
Proof of Negligence
Proof of the existence of the
Accused shall be presumed
contract and of its breach or non- The negligence of the defendant
innocent until the contrary is
fulfillment is sufficient prima facie must be proved
proved beyond reasonable doubt
to warrant recovery
Defense Available
Defense of “good father of a
Defense of “good father of a
family” in the selection &
family”in the selection &
supervision of the employees is
supervision of the employees is
not a proper complete defense Defense of “good father of a
not a proper defense
though it may mitigate damages. family”in the selection &
supervision of the employees is a
The employee’s guilt is
Respondeat superior or command proper and complete defense
automatically the employer’s civil
responsibility or the master and
guilt, if the former is insolvent
servant rule
Proof needed
Proof of guilt beyond reasonable
Preponderance of evidence Preponderance of evidence
doubt
180 CIVIL LAW TEAM

OBLIGATIONS
Q: What is the degree of diligence required? If the negligence was the proximate cause, the
obligation is not extinguished. It is converted into a
A: monetary obligation for damages
1. That agreed upon;
2. In the absence of such, that which is required Q: If the happening of an event is difficult to
by the law; foresee, is it a fortuitous event?
3. In the absence of the foregoing, diligence of a
good father of a family – that reasonable A: No. The mere difficulty to foresee the happening
diligence which an ordinary prudent person is not impossibility to foresee the same. (Republic v.
would have done under the same Luzon Stevedoring Corp., G.R. No. L-21749, Sept. 29,
circumstances. 1967)
XPN: Common carriers requiring
extraordinary diligence (Arts. 1998-2002) Q: Distinguish Act of God from Act of Man
5. CONTRAVENTION OF TENOR OF OBLIGATION A:

(VIOLATIO) ACT OF GOD ACT OF MAN
Fortuitous event Force majeure
Q: What is violation of the terms of the contract? Event caused by the
Event which is absolutely
legitimate or illegitimate
independent of human
A: It is the act of contravening the tenor or terms or acts of persons other
intervention
conditions of the contract. It is also known as than the obligor
“violatio,” i.e. failure of common carrier to take its i.e. – armed invasion,
i.e. – earthquakes, robbery, war (Pineda,
passenger to their destination. (Pineda, Obligations
storms, floods, epidemics Obligations and Contract,
and Contracts, 2000 ed, p. 50)
2000 ed, p. 60)
Note: Under Art.1170, the phrase “in any manner
Note: There is no essential difference between
contravene the tenor” of the obligation includes any
fortuitous event and force majuere; they both refer to
illicit act which impairs the strict and faithful
causes independent of the will of the obligor.
fulfillment of the obligation, or every kind of defective
(Tolentino, Civil Code of the Philippines, Vol. IV, 2002
performance. Such violation of the terms of contract is
ed, p. 127)
excused in proper cases by fortuitous events.
6. FORTUITOUS EVENT Q: Is there liability for loss due to fortuitous

event?
Q: What is fortuitous event?
A: GR: There is no liability for loss in case of
A: It is an occurrence or happening which could not fortuitous event.
be foreseen, or even if foreseen, is inevitable (Art.
1174). XPNs: LaNS-PCBaG
1. Law
Q: What are the requisites of a fortuitous event? 2. Nature of the obligation requires the
assumption of risk
A: 3. Stipulation
1. Cause of breach is independent of the will of 4. The debtor is guilty of dolo, malice or bad
the debtor; faith, has Promised the same thing to two
2. The event is unforeseeable or unavoidable; or more persons who does not have the
3. Occurrence renders it absolutely impossible for same interest (Art. 1165)
the debtor to fulfill his obligation in a normal 5. The debtor Contributed to the loss (Tan v.
manner; impossibility must be absolute not Inchausti & Co., G.R. No. L-6472, Mar. 7,
partial, otherwise not force majeure; and 1912)
4. Debtor is free from any participation in the 6. The possessor is in Bad faith (Art. 552)
aggravation of the injury to the creditor. 7. The obligor is Guilty of fraud, negligence
or delay or if he contravened the tenor of
Note: The fortuitous event must not only be the the obligation (Juan Nakpil v. United
proximate cause but it must also be the only and sole Construction Co., Inc. v. CA, G.R. No. L-
cause. Contributory negligence of the debtor renders 47851, Apr. 15, 1988)
him liable despite the fortuitous event. (Pineda,
Obligations and Contracts, 2000 ed, p. 62)
181
Q: Philcomsat contends that expiration of the RP- 1. On determinate obligation – the

US Military Bases Agreement and non-ratification obligation is extinguished
of the treaty is not a fortuitous event. Decide. 2. On generic obligation – the obligation is
not extinguished (genus nun quam peruit
A: No. The requisites for fortuitous events are – genus never perishes)
present in the instant case. Philcomsat and Globe
had no control over the non-renewal of the term of Q: Kristina brought her diamond ring to a jewelry
the RP-US Military Bases Agreement when the shop for cleaning. The jewelry shop undertook to
same expired in 1991, because the prerogative to return the ring by February 1, 1999. When the said
ratify the treaty belonged to the Senate. Neither did date arrived, the jewelry shop informed Kristina
the parties have control over the subsequent that the job was not yet finished. They asked her
withdrawal of the US military forces and personnel to return five days later. On February 6, 1999,
from Cubi Point. The events made impossible the Kristina went to the shop to claim the ring, but she
continuation of the agreement without fault on the was informed that the same was stolen by a thief
part of either party. Such fortuitous events who entered the shop the night before. Kristina
rendered Globe exempt from payment of rentals filed an action for damages against the jewelry
for the remainder of the term of the agreement. shop which put up the defense of force majeure.
(Philippine Communications Satellite Corp.v.Globe Will the action prosper or not?
Telecom, Inc.,G.R. No. 147324, May 25, 2004)
A: Yes. The action will prosper. Since the defendant
Q: MIAA entered into a compromise agreement was already in default for not having delivered the
with ALA. MIAA failed to pay within the period ring when delivery was demanded by plaintiff at
stipulated. Thus, ALA filed a motion for execution due date, the defendant is liable for the loss of the
to enforce its claim. MIAA filed a comment and thing and even when the loss was due to force
attributed the delays to its being a government majeure.
agency and the Christmas rush. Is the delay of
payment a fortuitous event? Alternative Answer:
The action will prosper. The defendant who is
A: No. The act-of-God doctrine requires all human obliged to deliver incurred delay from the time the
agencies to be excluded from creating the cause of plaintiff extrajudicially demands the fulfillment of
the mischief. Such doctrine cannot be invoked to the obligation. (Art. 1169) The defendant shall be
protect a person who has failed to take steps to held liable for the loss of the thing even it was due
forestall the possible adverse consequences of loss to fortuitous event. (2000 Bar Question)
or injury. Since the delay in payment in the present
case was partly a result of human participation - Q: AB Corp. entered into a contract with XY Corp.
whether from active intervention or neglect - the whereby the former agreed to construct the
whole occurrence was humanized and was research and laboratory facilities of the latter.
therefore outside the ambit of a caso fortuito. Under the terms of the contract, AB Corp. agreed
to complete the facility in 18 months, at the total
First, processing claims against the government are contract price of P10 million. XY Corp. paid 50% of
certainly not only foreseeable and expectable, but the total contract price, the balance to be paid
also dependent upon the human will. Second, the upon completion of the work. The work started
Christmas season is not a caso fortuito, but a immediately, but AB Corp. later experienced work
regularly occurring event. Third, the occurrence of slippage because of labor unrest in his company.
the Christmas season did not at all render AB Corp.’s employees claimed that they are not
impossible the normal fulfillment of the obligation. being paid on time; hence, the work slowdown. As
th
Fourth, MIAA cannot argue that it is free from any of the 17 month, work was only 45% completed.
participation in the delay. It should have laid out on AB Corp. asked for extension of time, claiming that
the compromise table the problems that would be its labor problems is a case of fortuitous event, but
caused by a deadline falling during the Christmas this was denied by XY Corp. When it became
season. Furthermore, it should have explained to certain that the construction could not be finished
ALA the process involved for the payment of AL’s on time, XY Corp. sent written notice cancelling
claim. (MIAA v. Ala Industries Corp., G.R. No. the contract and requiring AB Corp. to
147349, Feb. 13, 2004) immediately vacate the premises.
Q: What are the effects of fortuitous event? Can the labor unrest be considered a fortuitous
event?
A:
182 CIVIL LAW TEAM

OBLIGATIONS
A: Labor unrest is not a fortuitous event that will A:

excuse AB Corp. from complying with its obligation 1. Specific performance, or substituted
of constructing the research and laboratory performance by a third person in case of an
facilities of XY Corp. The labor unrest, which may obligation to deliver a generic thing, and in
even be attributed in large part to AB Corp. itself, is obligations to do, unless it is a purely personal
not the direct cause of non-compliance by AB Corp. act; or
It is independent of its obligation. It is similar to the 2. Rescission (or resolution in reciprocal
failure of a DBP borrower to pay her loan just obligations);
because her plantation suffered losses due to the 3. Damages, in any case;
cadang-cadang disease. It does not excuse 4. Subsidiary remedies of creditors:
compliance with the obligation (DBP v. Vda. De a. Accion subrogatoria
Moll). b. Accion pauliana
c. Accion directa
Additional Answer: The labor unrest in this case is
not a fortuitous event. The requisites of fortuitous 1. SPECIFIC PERFORMANCE
event are: (1) the event must be independent of
human will or at least of the debtor’s will; (2) the Q: What are the remedies in connection with
event could not be foreseen, or if foreseen is specific performance?
inevitable; (3) the event must have rendered
impossible debtor’s compliance of the obligation in A:
a proper manner; and (4) the debtor must not be 1. Exhaustion of the properties of the debtor (not
guilty of concurrent negligence. All the requisites exempt from attachment under the law)
are absent in this case. AB Corp. could have 2. Accion subrogatoria (subrogatory action) – an
anticipated the labor unrest which was caused by indirect action brought in the name of the
delays in paying the laborer’s wages. The company debtor by the creditor to enforce the former’s
could have hired additional laborers to make up for rights except:
the work slowdown. a. personal rights of the debtor
b. rights inherent in the person of the
Q: Can XY Corp. unilaterally and immediately debtor
cancel the contract? c. properties exempt from execution
(e.g .family home)
A: No. XY Corp. cannot unilaterally and immediately 3. Accion pauliana (rescissory action) – an action
cancel the contract because there is need for a to impugn or assail the acts done or contracts
judicial action of rescission. The provisions of Art. entered into by the debtor in fraud of his
1191 of the Civil Code providing for rescission in creditor.
reciprocal obligations can only be invoked judicially.
Note: Resort to the remedies must be in the order
Alternative Answer: Yes, XY Corp. may unilaterally stated above. (Art. 1177)
cancel the obligation but this is subject to the risk
that the cancellation of the reciprocal obligation Q: Sacramento Steel Corporation (SSC) is a
being challenged in court and if AB Corp. succeeds, business entity manufacturing and producing steel
then XY Corp. will be declared in default and be and steel products. It entered into a credit
liable for damages. agreement with respondent International
Exchange Bank (IEB). As security for its obligations,
Q: Must AB Corp. return the 50% down payment? SSC executed 5 separate deeds of chattel
mortgage constituted over various equipment
A: No, under the principle of quantum meruit, AB found in its steel manufacturing plant.
Corp. had the right to retain payment
corresponding to his percentage of accomplishment Subsequently, SSC defaulted in the payment of its
less the amount of damages suffered by XY Corp. obligations. IEB’s demand for payment went
because of the delay or default. (2008 Bar unheeded. Meanwhile, Metropolitan Bank and
Question) Trust Company (Metro Bank) filed a motion for
intervention as a creditor of SSC. It contends that
D. REMEDIES the mortgage contracts between IEB and SSC were
entered into to defraud the latter’s creditors.
Q: What are the remedies that may be availed of Thus, it prayed for the rescission of the chattel
in case of breach? mortgaged executed by SSC in favor of IEB. Will
the action to rescind the mortgage prosper?
183
A:No. Jurisprudence is clear that the following Q: What is substitute performance?

successive measures must be taken by a creditor
before he may bring an action for rescission of an A: It is a remedy of the creditor in case of non-
allegedly fraudulent contract: (1) exhaust the performance by the debtor; where another party
properties of the debtor through levying by performs the obligation or the same is performed at
attachment and execution upon all the property of the expense of the debtor.
the debtor, except such as are exempt by law from
execution; (2) exercise all the rights and actions of Q: When may there be substitute performance?
the debtor, save those personal to him (accion
subrogatoria); and (3) seek rescission of the A:
contracts executed by the debtor in fraud of their 1. Positive personal obligation:
rights (accion pauliana). It is thus apparent that an a. If not purely personal – substitute
action to rescind, or an accion pauliana, must be of performance; the obligation shall be
last resort, availed of only after the creditor has executed at debtor’s cost if he fails to do
exhausted all the properties of the debtor not it. (Art. 1167)
exempt from execution or after all other legal b. Purely personal – no substitute
remedies have been exhausted and have been performance may be demanded because
proven futile. (Metropolitan Bank and Trust of the personal qualifications taken into
Company v. International Exchange Bank, G.R. No. consideration. The only remedy is
176008, August 10, 2011) damages.
2. Real obligation:
Q: While the case was pending, Felix donated his a. Generic thing – substitute performance;
of parcels of land in favor of his children. delivery may be made by a person other
Judgment was rendered against Felix. When the than the debtor since the object is merely
sheriff, accompanied by counsel of Philam, sought designated by its class or genus. The
to enforce the alias writ of execution, they creditor may ask that the obligation be
discovered that Felix no longer had any property complied with at the expense of the
and that he had conveyed the subject properties debtor. (1165)
to his children. Thus, Philam filed an accion b. Specific thing – specific performance may
pauliana for rescission of the donations. Felix be demanded, that is, the creditor may
countered that an action for rescission of the compel the debtor to make the delivery.
donation had already prescribed since the time of
prescription has to run from the date of 2. RESCISSION
registration. Has the action filed by Philam
prescribed? Q: What is rescission under Article 1191?
A: No. Philam only learned about the unlawful A: It refers to the cancellation of the contract or
conveyances made by Felix more than four years reciprocal obligation in case of breach on the part
after the donations were effected, when its counsel of one, which breach is violative of the reciprocity
accompanied the sheriff to Butuan City to attach between the parties. This is properly called
the properties. There they found that he no longer resolution.
had any properties in his name. It was only then
that Philam's action for rescission of the deeds of Note: The rescission under Art. 1380 is rescission
donation accrued because then it could be said that based on lesion or fraud upon creditors.
Philam had exhausted all legal means to satisfy the
trial court's judgment in its favor. Since Philam filed Q: What kind of obligation is resolution available?
its complaint for accion pauliana against petitioners
barely a month from its discovery that Felix had no A: Reciprocal obligation, since resolution is implied
other property to satisfy the judgment award therein.
against him, its action for rescission of the subject
deeds clearly had not yet prescribed. (Khe Hong Q: Who may demand resolution?
Cheng v. CA,G.R. No. 144169, Mar. 28, 2000)
A: Injured party.
Note: The debtor is liable with all his property, present
and future, for the fulfillment of his obligations, Q: May the injured party demand resolution after
subject to the exemptions provided by law (De Leon, he elects specific performance?
Obligations and Contracts, 2003 ed, p.71)
184 CIVIL LAW TEAM

OBLIGATIONS
A: GR: No. His right is not conjunctive, thus, he may creditors; the creditor merely acts in the name and for
not choose both remedies of resolution and specific the account of the debtor after exhausting the assets
performance. of the latter but not enough to satisfy the claims of the
creditor.
XPN: Yes, if specific performance should
become impossible ACCION PAULIANA
3. DAMAGES Q: What is action pauliana?
Q: When does liability for damages arise? A: It is an action where the creditor files an action
in court for the rescission of acts or contracts
A: Those liable under Art. 1170 shall pay damages entered into by the debtor designed to defraud the
only if aside from the breach of contract, prejudice former.
or damage was caused. (Berg v. Teus, G.R. No. L-
6450, Oct 30, 1954) Note: When the creditor could not collect in any
manner, accion pauliana may be resorted by him to
Note: If action is brought for specific performance, rescind a fraudulent alienation of property. (Regalado,
damages sought must be asked in the same action; v. Luchsinger and Co., 5 Phil 625)
otherwise the damages are deemed waived. (Daywalt
v. Augusitinian Corp, 39 Phil 567 Q: What are the requisites of accion pauliana?
Q: What are the kinds of damages? A: PAPIL

1. Defendant must be Indebted to plaintiff;
A: MENTAL 2. The fraudulent act performed by the
1. Moral debtor subsequent to the contract gives
2. Exemplary Advantage to another;
3. Nominal 3. The creditor is Prejudiced by such act;
4. Temperate 4. The creditor must have Pursued all
5. Actual properties of the debtor subject to
6. Liquidated execution; and
5. The creditor has no other Legal remedy.
4. SUBSIDIARY DEMEDIES
ACCION DIRECTA
ACCION SUBROGATORIA
Q: What is accion directa?
Q: What is accion subrogatoria?
A: It is the right of a person to go directly against
A: It is an action where the creditor whose claim another who has no privity to the contract. (Arts.
had not been fully satisfied, may go after the 1652, 1608, 1729, 1893)
debtors (third persons) of the defendant-debtor.
VII. KINDS OF CIVIL OBLIGATIONS
Q: What are the requisites of accion subrogatoria?
A. PURE OBLIGATIONS
A: IPNI
1. The debtor’s assets must be Insufficient Q: What is pure obligation?
to satisfy claims against him;
2. The creditor must have Pursued all A: It is an obligation whose performance does not
properties of the debtor subject to depend upon a future or uncertain event, or upon a
execution; past event or upon a past event unknown to the
3. The right of action must Not be purely parties, is demandable at once (Art. 1179)
personal; and
4. The debtor whose right of action is B. CONDITIONAL OBLIGATIONS
exercised must be Indebted to the
creditor. Q: What is conditional obligation?
Note: Accion subrogatoria is different and distinct A: It is an obligation subject to a condition and the
from active subjective subrogation governed by effectivity of which is subordinated to the
Articles 1300 to 1304. In the latter, there is change of fulfillment or non-fulfillment of a future and
creditors whereas in the former there is no change of uncertain event, or upon a past event unknown to
185
the parties. (Pineda, Obligations and Contracts, Note: In suspensive condition or condition precedent,
2000 ed. p. 70) the efficacy or the obligatory force is subordinated to
the happening of a “future and uncertain event”; if the
Q: What is a condition? suspensive condition does not take place the parties
would stand as if the conditional obligation never
A: It is an uncertain event which wields an influence existed. (Gaite v. Fonacier, 2 SCRA 830; Cheng v.
on a legal relationship. (Manresa) Genato, 300 SCRA 722; Pineda, Obligations and
Contracts, 2000, ed. p. 76)
Q: Ramon, the judicial administrator of the estate
Q: Distinguish suspensive from resolutory
of Juan, found out that Rodriguez had enlarged the
conditions.
area of the land which he purchased from Juan
before his death. Thus, Ramon demanded
A:
Rodriguez to vacate the portion allegedly
RESOLUTORY
encroached by him. Rodriguez refused and SUSPENSIVE CONDITION
CONDITION
contested there was indeed a conditional sale with
Effect of Fulfillment
the balance of the purchase price payable within
Obligation arises or Obligation is
five years from the execution of the deed of sale.
becomes effective extinguished
Ramon then filed an action for recovery of
Effect of Non-fulfillment
possession of the disputed lot. Is the contract of If not fulfilled, no
sale a conditional one? If not fulfilled, juridical
juridical relation is
relation is consolidated
created
A: No. The stipulation that the "payment of the full When Rights are Acquired
consideration based on a survey shall be due and Rights are not yet
payable in 5 years from the execution of a formal Rights are already
acquired, but there is
deed of sale" is not a condition which affects the acquired, but subject to
hope or expectancy that
efficacy of the contract of sale. It merely provides the threat or danger of
they will soon be
extinction
the manner by which the full consideration is to be acquired
computed and the time within which the same is to
be paid. But it does not affect in any manner the Q: What are the effects of fulfillment of the
effectivity of the contract. (Heirs of San Andres v. suspensive condition?
Rodriguez, G.R. No. 135634, May 31, 2000)
A:
Q: Distinguish period from condition. 1. Real obligations:
GR: Retroacts to the day of the constitution of
A: the obligation.
PERIOD CONDITION
As to Time XPNs: There is no retroactive effect with
May refer to past event respect to the fruits and interest:
Refers to the future
unknown to the parties a. In reciprocal obligations, the fruits
As to Fulfillment and interests shall be deemed to
It will happen at an have been mutually compensated;
exact date or at an b. In unilateral obligations, the debtor
May or may not happen
indefinite time, but is appropriates the fruits and interest
sure to arrive received before the fulfillment of the
As to its Influence on the Obligation to be Fulfilled or condition unless contrary to the
Performed
intention of the parties. (Art. 1187)
No effect or influence May give rise to an
upon the existence of obligation (suspensive)
2. Personal obligations- the court determines the
the obligation but only in or the cessation of one
retroactive effect of the condition fulfilled.
its demandability or already existing
performance (resolutory) (Art. 1187)
1. SUSPENSIVE CONDITION Q: What are the rights of the parties before the
fulfillment of the condition?
Q: What is a suspensive condition?
A:
A: A condition the fulfillment of which will give rise 1. Creditor – may bring the appropriate actions
to the acquisition of a right. for the preservation of his right (Art. 1188),
such as:
186 CIVIL LAW TEAM

OBLIGATIONS
(a) action for prohibition restraining the Note: The same conditions apply in case of an obligor
alienation of the thing pending the in obligations with a resolutory condition. In such
happening of the suspensive condition; cases, the third requisite must read, “subject to a
(b) petition for the annotation of the creditor’s resolutory condition.”
right with the proper registry;
(c) action to demand security if the debtor 2. RESOLUTORY CONDITION
has become insolvent;
(d) action to set aside alienations made by Q: What is a resolutory condition?
the debtor in fraud of creditors; or
(e) action against adverse possessors to A: It is a condition where the rights already
interrupt the running of prescriptive acquired are lost upon fulfillment of the condition.
period. It is also known as condition subsequent.
2. Debtor – may recover what during the same
time he has paid by mistake in case of a Q: What are the effects of fulfillment of resolutory
suspensive condition. (Art. 1188) condition?
Q: In cases of obligations with a suspensive A:

condition and obligation for the delivery of 1. Real obligations:
determinate or specific things, what are the a. The parties shall return to each other
effects of loss, deterioration, and improvements in what they have received.
real obligations? b. Obligation is extinguished.
c. In case of the loss, deterioration or
A: improvement of the thing, Art. 1189, with
WITH DR’S FAULT WITHOUT DR’S FAULT respect to the debtor, shall be applied to
Loss the party who is bound to return. (Art.
DR pays damages Obligation extinguished 1190)
Deterioration 2. Personal obligations – the courts shall
CR- choose b/w determine, in each case, the retroactive effect
rescission of obligation of the condition that has been complied with.
or fulfillment (with Impairment borne by CR (Art. 1187; Art. 1190)
indemnity for damages in
either case) Q: X donated a parcel of land to the municipality
Improvement of Tarlac under a condition that a public school
1. By the thing’s nature or by time – inure to the shall be erected and a public park be made within
benefit of the CR 6 months from the date of the ratification of the
2. At the debtor’s expense – DR shall have no right donation by the parties. After the registration of
other than that granted to a usufructuary the said donation, X sold the same land to Y.
Thereafter, Y brought an action against the
Note: Loss, deterioration and improvement cannot Province of Tarlac, alleging that the conditions of
apply to indeterminate or generic things. “Genus nun
the donation is a condition precedent, thus, the
quam peruit” – “genus never perishes”
municipality of Tarlac did not acquire ownership
over the land when it failed to comply with the
Loss is understood that the thing is lost when it
perishes, or goes out of commerce, or disappears in said condition. Is the contention of Y correct?
such a way that its existence is unknown or it cannot
be recovered. A: No. In this case, the condition could not be
complied with except after giving effect to the
Q: What are the requisites for Art.1189 to apply? donation. The Municipality of Tarlac could not do
any work on the donated land if the donation had
A: not really been effected, because it would be an
1. Must be a real obligation; invasion of another's title, for the land would have
2. Object is a specific/determinate thing; continued to belong to the donor so long as the
3. Obligation is subject to a suspensive condition; condition imposed was not complied with. Thus,
4. The condition is fulfilled; and considering that the condition itself was for a public
5. There is loss, deterioration or improvement of school to be built means that ownership of the land
the thing during the pendency of the was already with the Municipality. (Parks v.
happening of the condition. Province of Tarlac, G.R. No. L-24190, July 13, 1926)
Q: The late Don Lopez, Sr., who was then a

member of the Board of Trustees of CPU, executed
187
a deed of donation in favor of the latter of a parcel Q: Does a condition which depends upon the will
of land subject to the condition that it shall be of the debtor invalidate both the condition and
utilized for the establishment and use of a medical the obligation?
college. However, the heirs of Don Lopez, Sr., filed
an action for annulment of the donation, A: It depends. If the condition is suspensive, both
reconveyance and damages against CPU alleging the condition and obligation are VOID. However, if
that CPU had not complied with the conditions of the condition is a pre-exisiting one or the condition
the donation. is resolutory, only the condition is void, leaving the
obligation itself valid because what is left to the
Are the conditions imposed resolutory or sole will of the debtor is not the existence or the
suspensive? fulfillment of the obligation but merely its
extinguishment.
A: Under Art. 1181 of the Civil Code, on conditional
obligations, the acquisition of rights, as well as the Q: What is the effect if the condition depends
extinguishment or loss of those already acquired, upon the will of the creditor?
shall depend upon the happening of the event
which constitutes the condition. Thus, when a A: The condition and obligation are valid, whether
person donates land to another on the condition the condition is suspensive or resolutory.
that the latter would build upon the land a school,
the condition imposed was not a condition CASUAL CONDITION
precedent or a suspensive condition but a
resolutory one. It is not correct to say that the MIXED CONDITION
school house had to be constructed before the
donation became effective, that is, before the Q: What is a casual condition?
donee could become the owner of the land,
otherwise, it would be invading the property rights A: It is the performance or the fulfillment of the
of the donor. The donation had to be valid before condition depends upon chance and/or the will of a
the fulfillment of the condition. If there was no third person.
fulfillment or compliance with the condition, the
donation may now be revoked and all rights which Q: What is a mixed condition?
the donee may have acquired under it shall be
deemed lost and extinguished. (Central Philippine A: It is the performance or fulfillment of the
University v. CA, G.R. No. 112127, July 17, 1995) condition depends partly upon the will of a party to
the obligation and partly upon chance and or the
Q: What does a constructive fulfillment of a will of a third person.
condition entail?
Q: What is the status of casual and mixed
A: The condition shall be deemed fulfilled when the conditions?
obligor voluntarily prevents its fulfillment. (Art.
1186) A: Casual and mixed conditions, unlike purely
potestative conditions, are valid.
Note: No person shall profit by his own wrong. Mere
intention to prevent the happening of thee condition Q: What are the other types of conditions?
will not be enough without actually preventing the
fulfillment. A: PN-DI-CAPI
1. Positive – involves the doing of an act
The doctrine applies only to suspensive condition. 2. Negative – involves the omission of an act
(Taylor v. Uy Tieng Piao, 43 Phil. 873) 3. Divisible – is susceptible of partial
performance
3. POTESTATIVE CONDITION 4. Indivisible – is not susceptible of partial
performance
Q: When is a condition said to be potestative? 5. Conjunctive – there are several conditions
in an obligation all of which must be
A: When the condition depends upon the will of performed
one of the contracting parties. (Art. 1182) 6. Alternative – there are several conditions
in an obligation but only one must be
performed
188 CIVIL LAW TEAM

OBLIGATIONS
7. Possible – is capable of fulfillment A:

according to the nature, law, public policy 1. Ex die – this is a term or period with
or good customs suspensive effect. The obligation begins only
8. Impossible – is not capable of fulfillment from a day certain, in other words upon the
according to nature, law, public policy or arrival of the period.
good customs (Art. 1183) 2. In diem – a period or term with a resolutory
effect. Up to the certain, the obligation
Q: What is the effect of an impossible or unlawful remains valid, but upon the arrival of said
condition? period, the obligation terminates.
3. Legal – a period granted under the provisions
A: GR: Impossible conditions annul the obligation of the law.
which depends upon the parties but not of a third 4. Conventional or voluntary – period agreed
person. upon or stipulated by the parties.
5. Judicial – the period or term fixed by the
XPNs: PD-DoNT. courts for the performance of an obligation or
1. Pre-existing obligation for its termination.
2. Obligation is Divisible 6. Definite – the exact date or time is known and
3. In simple or remuneratory Donations given.
4. In case of conditions Not to do an 7. Indefinite – something that will surely happens
impossible thing but the date of happening is unknown.
5. In Testamentary dispositions
Q: Is the statement of a debtor that he will pay
Note: In the foregoing, the obligations remain when his means permit him to do so relate to a
valid, only the condition is void and deemed to period or a condition? Is such a statement valid
have not been imposed. It is applicable only to considering that the same is left to the will of the
obligations not to do and gratuitous obligations. debtor?
C. OBLIGATIONS WITH A PERIOD A: When the debtor binds himself to pay when his
means permit him to do so, the obligation is
Q: What is an obligation with a period or a term? deemed with a period. (Art. 1180) This is valid
because it is not the payment itself that is
A: It is the obligations for whose fulfillment a day dependent upon the will of the debtor, but the
certain has been fixed, shall be demandable only moment of payment.
when that day comes. (Art. 1193)
As the time of payment is not fixed, the court must
Q: What are the requisites of a valid period or fix the same before any action for collection may be
term? entertained, unless, the prior action of fixing the
term or period will only be a formality and will
A: FCP serve no purpose but delay.(Tiglao v. Manila
1. Future Railroad Co., 98 Phil. 181)
2. Certain
3. Possible, legally and physically (Paras, Q: For whose benefit is the period constituted?
Civil Code of the Philippines Annotated,
Vol. IV., 2008 ed. p. 235) A: GR: When a period has been agreed upon for the
performance or fulfillment of an obligation, it is
Q: What is a term or period” presumed to have been established for the benefit
of both the creditor and the debtor. Whenever in
A: It is a certain length of time which determines an obligation a period is designated, it is presumed
the effectivity or the extinguishment of the to have been established for the benefit of both the
obligations. creditor and the debtor
Q: What is a “day certain”? XPN: When it appears from the tenor of the
period or other circumstances that it was
A: It is understood to be that which must established for the benefit of one of the parties.
necessarily come, although it may not be known
when. Q: What is the effect of the term being for the
benefit of either the CR or the DR?
Q: What are the kinds of terms or periods?
189
A: 4. When the debtor Violates any

1. When it is for the benefit of the Creditor – undertaking, in consideration of which
Creditor may demand the performance of the the creditor agreed to the period;
obligation at any time but the DR cannot 5. When the debtor attempts to Abscond.
compel him to accept payment before the (Art. 1198)
expiration of the period (e.g. “on demand”)
Note: In case of loss, deterioration or improvement of
2. When it is for the benefit of the Debtor – the thing before the arrival of the day certain, rules in
Debtor may oppose any premature demand on conditional obligation shall be observed.
the part of the CR for performance of the
obligation, or if he so desires, he may Q: What must a creditor ask the court before he can
renounce the benefit of the period by demand payment?
performing his obligation in advance.
A: If the time of payment is not fixed, the court must
(Manresa)
fix the same before any action for collection may be
entertained, unless, the prior action of fixing the term
Q: What is the effect of a fortuitous event in an or period will be a formality and will serve no purpose
obligation with a period? but delay.
A: It only relieves the contracting parties from the D. ALTERNATIVE OBLIGATION /

fulfillment of their respective obligation during the FACULTATIVE OBLIGATION
term or period.
Q: What is an alternative obligation?
Q: When may the court fix the period?
A: It is one where the debtor is alternatively bound
A: by different prestations but the complete
1. If the obligation does not fix a period, but performance of one of them is sufficient to
from its nature and circumstances it can extinguish the obligation.
be inferred that a period was intended by
the parties. Q: What is a facultative obligation?
2. If the duration of the period depends
upon the will of the debtor. A: It is one where the debtor is bound to perform
3. In case of reciprocal obligations, when one prestation or to deliver one thing with a
there is a just cause for fixing the period. reserved right to choose another prestation or thing
4. If the debtor binds himself when his as substitute for the principal.
means permit him to do so.
Q: Distinguish facultative from alternative
Note: Once fixed by the courts, the period cannot e obligations.
be changed by the parties.
A:
Q: When may a debtor lose his right to make use FACULTATIVE ALTERNATIVE
of the period? OBLIGATIONS OBLIGATIONS
Number of prestation
A: IGIVA Only one object is due Several objects are due
1. When after the obligation has been Manner of compliance
contracted he becomes Insolvent, unless May be complied with by May be complied with by
he gives a guaranty or security for the substitution of one that is fulfilling any of those
debt; due alternately due
2. When he does not furnish to the creditor Right to choice
the Guaranties or securities which he has GR: Choice pertain to
promised; debtor
Choice pertains only to
3. When by his own acts he has Impaired
debtor
said guaranties or securities after their XPN: Expressly granted to
establishment, and when through a creditor or third person
fortuitous event they disappear, unless he Effect of fortuitous loss
immediately gives new ones or equally Fortuitous loss Fortuitous loss of all
satisfactory; extinguishes the prestation will extinguish
obligation the obligation
Effect of culpable loss
190 CIVIL LAW TEAM

OBLIGATIONS
Culpable loss obliges the 2. The debtor shall have no right to choose those
Culpable loss of any object
debtor to deliver prestation which are impossible, unlawful or
due will give rise to
substitute prestation which could not have been the object of the
liability to debtor
without liability to debtor obligation. (Art. 1200)
Liability of the debtor 3. The debtor shall lose the right to choice when
The creditor shall have the among the prestation whereby he is
right of indemnity for alternatively bound, only one is practicable.
Substitution has been damages when, through (Art. 1202)
made and communicated the fault of the debtor, all
to the creditor, the obligor the things which are
Q: In alternative obligations, when does the choice
is liable for the loss of the alternatively the object of
made take effect?
thing on account of delay, the obligation have been
negligence or fraud lost or the compliance of
the obligation has become A: The choice made takes effect only upon
impossible. communication of the choice to the other party and
Void prestation from such time the obligation ceases to be
If principal obligation is If one prestation is void, alternative (Art. 1201; Art. 1205).
void, the creditor cannot the others free from vices
compel delivery of the preserve the validity of Note: The notice of selection or choice may be in any
substitute the obligation form provided it is sufficient to make the other party
Impossibility of prestation know that the election has been made. (Tolentino, Civil
If various prestations are Code of the Philippines, 2002 ed, p. 205)
If there is impossibility to
impossible to perform
deliver the principal thing Q: When will alternative obligation becomes a
except one, this one must
or prestation, the simple obligation?
be delivered.
obligation is extinguished,
If all prestations are
even if the substitute A:
impossible to perform, the
obligation is valid 1. When the debtor has communicated the
obligation is extinguished
Loss of substitute choice to the creditor.
Where the choice is given 2. When debtor lose the right to choice among
Loss of substitute before the prestations whereby the debtor is
to the creditor, the loss of
the substitution through
the alternative through alternatively bound, only one is practicable.
the fault of the debtor
the fault of the debtor (Art. 1202)
doesn’t make him liable
renders him liable for 3. When the choice has been expressly given to
damages the creditor and his choice has been
communicated to the debtor
Q: In alternative obligation, who has the right to
choose prestation? Q: Does the choice made by the DR require the
concurrence of the CR? What happens when
A: GR: The right of choice belongs to the debtor, through the CR’s fault, selection is deemed
impossible?
XPN: unless it has been expressly given to the
creditor. (Art. 1200) A: No. To hold otherwise would destroy the very
nature of the right to select given to the DR. Once a
Q: What are the limitations on debtor’s right to choice is made, it can no longer be renounced and
choose? the parties are bound thereto.
A: When choice is rendered impossible through the

1. The debtor must absolutely perform the CR’s fault, the DR may bring an action to rescind the
prestation chosen. He cannot compel the contract with damages (Art. 1203).
creditor to receive part of one and part of the
other undertaking.
191
Q: What are the effects of loss of objects in alternative obligations?
A:
DUE TO FORTUITOUS EVENT DUE TO DEBTOR’S FAULT
Choice Belongs to Debtor
CR shall have a right to indemnify for
damages based on the value of the last
All are lost DR released from the obligation
thing which disappeared/service which
become impossible
DR shall deliver that which he shall choose
DR shall deliver that which he shall choose
Some but not all are lost from among the remainder without
from among the remainder
damages
Only one remains Deliver that which remains
Choice Belongs to Creditor
CR may claim the price/value of any of
All are lost DR released from the obligation
them with indemnity for damages
CR may claim any of those subsisting
Some but not all are lost without a right to damages OR price/value
of one of those lost with right to damages
Only one remains Deliver that which remains. In case of fault of DR, CR has a right to indemnity for damages
VIII. JOINT AND SOLIDARY OBLIGATIONS to a proportionate part any of the debtors, the
of the credit payment or fulfillment of
Q: What are joint obligations? the entire obligation
(Tolentino, Civil CodeVol
A: It is one where the credit or debt shall be IV, 1999 ed. p. 217)
presumed to be divided into as many equal shares
as there are creditors or debtors, the credit or Q: What is the rule as regards the joint or solidary
debts being considered distinct from one another. character of an obligation?
(Art. 1208)
A: GR: When two or more creditors or two or more
It is where each debtor is liable only to only for debtors concur in one and the same obligation, the
proportionate part of the debt and each creditor is presumption is that the obligation is joint.
entitled only to a proportionate part of the credit.
XPNs: The obligation shall be solidary when:
Q: What are solidary obligations? ELN-CJ
1. Expressly stipulated that there is
A: It is where each of the debtors obliges to pay the solidarity;
entire obligation, and where each one of the 2. Law requires solidarity;
creditors has the right to demand from any of the 3. Nature of the obligation requires
debtors, the payment or fulfillment of the entire solidarity;
obligation (Art. 1207; Pineda, Obligations and 4. Charge or condition is imposed upon heirs
Contracts, 2000 ed, p. 139). or legatees and the will expressly makes
the charge or condition in solidum
Q: Distinguish joint from solidary obligation. (Manresa); or
5. Solidary responsibility is imputed by a
A: final Judgment upon several defendants.
JOINT OBLIGATION SOLIDARY OBLIGATION (Gutierrez v. Gutierrez, 56 Phil 177)
Not presumed. Must be
expressly stipulated by Q: Chua bought and imported to the Philippines
Presumed by law the parties, or when the dicalcium phosphate. When the cargo arrived at
(Art. 1208) law or the nature of the the Port of Manila, it was discovered that some
obligation requires were in apparent bad condition. Thus, Chua filed
solidarity. (Art. 1207) with Smith, Bell, and Co., Inc., the claim agent of
Each debtor is liable only First Insurance Co., a formal statement of claim for
Each debtor is obliged to
for a proportionate part the loss. No settlement of the claim having been
pay the entire obligation
of the entire debt made, Chua then filed an action. Is Smith, Bell, and
Each creditor, if there are Each creditor has the Co., solidarily liable upon a marine insurance
several, is entitled only right to demand from policy with its disclosed foreign principal?
192 CIVIL LAW TEAM

OBLIGATIONS
6. Vices of each obligation emanating from a

A: No. Article 1207 of the Civil Code clearly provides particular debtor or creditor will not affect the
that "there is a solidary liability only when the others; and
obligation expressly so states, or when the law or 7. In indivisible or joint obligation, the defense of
the nature of the obligation requires solidarity." The res judicata of one does not extend to the
well-entrenched rule is that solidary obligation others.
cannot lightly be inferred. It must be positively and
clearly expressed. (Smith, Bell & Co., Inc. v. CA, G.R. B. JOINT INDIVISIBLE OBLIGATIONS
No. 110668, Feb. 6, 1997)
Q: What are the different permutations of joint
Q: The labor arbiter rendered a decision, the fallo indivisible obligations? What are their effects?
of which states that the following respondents as
liable, namely: FCMC, Sicat, Gonzales, Chiu Chin A:
Gin, Lo Kuan Chin, and INIMACO. INIMACO 1. If there are two or more debtors, compliance
questions the execution, alleging that the alias with the obligation requires the concurrence
writ of execution altered and changed the tenor of of all the debtors, although each for his own
the decision by changing their liability from joint share. The obligation can be enforced only by
to solidary, by the insertion of the words preceding against all of the debtors.
"AND/OR". Is the liability of INIMACO pursuant to 2. If there are two or more creditors, the
the decision of the labor arbiter solidary or not? concurrence or collective act of all the
creditors, although each of his own share, is
A: INIMACO's liability is not solidary but merely also necessary for the enforcement of the
joint. Well-entrenched is the rule that solidary obligation.
obligation cannot lightly be inferred. There is a 3. Each credit is distinct from one another;
solidary liability only when the obligation expressly therefore a joint debtor cannot be required to
so states, when the law so provides or when the pay for the share of another with debtor,
nature of the obligation so requires. In the although he may pay if he wants to.
dispositive portion of the labor arbiter, the word 4. In case of insolvency of one of the debtors, the
"solidary" does not appear. The said fallo expressly others shall not be liable for his shares. To hold
states the following respondents therein as liable, otherwise would destroy the joint character of
namely: Filipinas Carbon Mining Corporation, Sicat, the obligation. (Art. 1209)
Gonzales, Chiu Chin Gin, Lo Kuan Chin, and
INIMACO. Nor can it be inferred therefrom that the Q: What is the effect of breach of a joint indivisible
liability of the six respondents in the case below is obligation by one debtor?
solidary, thus their liability should merely be joint.
(INIMACO v. NLRC, G.R. No. 101723, May 11, 2000) A: If one of the joint debtors fails to comply with his
undertaking, the obligation can no longer be
A. JOINT OBLIGATIONS fulfilled or performed. It is the converted into one
of indemnity for damages. Innocent joint debtor
Q: What are the legal consequences if the shall not contribute to the indemnity beyond their
obligation is joint? corresponding share of the obligation.
A: C. SOLIDARY OBLIGATIONS
1. Each debtor is liable only for a proportionate
part of the entire debt; Q: What is the effect of solidary obligation?
2. Each creditor, if there are several, is entitled
only to a proportionate part of the credit; A: Each one of the debtors is obliged to pay the
3. The demand made by one creditor upon one entire obligation, and each one of the creditors has
debtor, produces effects of default only as the right to demand from any of the debtors the
between them; payment or fulfillment of the entire obligation.
4. Interruption of prescription caused by the
demand made by one creditor upon one Q: Joey, Jovy and Jojo are solidary debtors under a
debtor, will NOT benefit the co-creditors or the loan obligation of P300,000.00 which has fallen
co-debtors; due. The creditor has, however, condoned Jojo's
5. Insolvency of a debtor will not increase the entire share in the debt. Since Jovy has become
liability of his co-debtor; insolvent, the creditor makes a demand on Joey to
pay the debt.
193
1. How much, if any, may Joey be 1. Anyone of the solidary creditors may collect or
compelled to pay? demand payment of whole obligation; there is
2. To what extent, if at all, can Jojo be mutual agency among solidary debtors (Arts.
compelled by Joey to contribute to such 1214, 1215)
payment?
2. Any of the solidary debtor may be required to
A: pay the whole obligation; there is mutual
1. Joey can be compelled to pay only the guaranty among solidary debtors (Arts. 1216,
remaining balance of P200,000, in view of the 1217, 1222)
remission of Jojo’s share by the creditor. (Art.
1219) 3. Each one of solidary creditors may do
whatever maybe useful to the others, but not
2. Jojo can be compelled by Joey to contribute anything prejudicial to them (Art. 1212);
P50,000. When one of the solidary debtors however, any novation, compensation,
cannot, because of his insolvency, reimburse confusion or remission of debt made by any
his share to the debtor paying the obligation, solidary creditors or with any of the solidary
such share shall be borne by all his co-debtors, debtors shall extinguish the obligation without
in proportion to the debt of each.(par. 3, Art. prejudice to his liability for the shares of the
1217) other solidary creditors. (Art. 1215; Art.1219)
Since the insolvent debtor's share which Joey Q: In cases of solidary creditors, may one act for
paid was Pl00,000, and there are only two all? What are the limitations?
remaining debtors - namely Joey and Jojo -
these two shall share equally the burden of A: Yes. However, while each one of the solidary
reimbursement. Jojo may thus be compelled creditors may execute acts which may be useful or
by Joey to contribute P50,000. (1998 Bar beneficial to the others, he may not do anything
Question) which may be prejudicial to them. (Art. 1212)
Q: What are the kinds of solidary obligation? Note: Prejudicial acts may still have valid legal effects,
but the performing creditor shall be liable to his co-
A: creditors. (Pineda, Obligations and Contracts, 2000 ed,
1. Passive – solidarity on the part of the debtors p. 157)
2. Active – solidarity on the part of the creditors
3. Mixed – solidarity on both sides Q: What are the effects of assignment of rights in a
solidary obligation?
Q: Distinguish solidarity from indivisibility.
A: GR: Solidary creditor cannot assign his right
A: because it is predicated upon mutual confidence,
INDIVISIBILITY SOLIDARITY meaning personal qualification of each creditor had
Refers to the prestation or
Refers to the vinculum been taken into consideration when the obligation
existing between the was constituted. (Art. 1213)
object of the contract
subjects or parties
Does not require plurality Requires the plurality of XPNs:
of subjects or parties parties or subjects
1. Assignment to co-creditor; or
In case of breach, it is
converted to one of In case of breach, the
2. Assignment is with consent of co-creditor.
indemnity for damages and liability of the solidary
the indivisibility of the debtors although Q: To whom must payment be made in a solidary
obligation is terminated converted into one of the obligation?
and so each debtor is liable indemnity for damages
only for his part of the remains solidary
A: GR: To any of the solidary creditors.
indemnity
Death of solidary debtor
Heirs of the debtor remain XPN: If demand, judicial or extra-judicial, has
terminates the solidarity,
bound to perform the been made by one of them, payment should be
the tie or vinculum being
same prestation made to him. (Art. 1214)
intransmissible to the heirs
Q: What are the rules in a solidary obligation?
A:
194 CIVIL LAW TEAM

OBLIGATIONS
D. DIVISIBLE AND INDIVISIBLE OBLIGATIONS Q: What is the effect of illegality of a part of a

contract?
Q: What is the primary distinction between
divisible and indivisible obligations? A:
1. Divisible contract – illegal part is void and
A: unenforceable. Legal part is valid and
DIVISIBLE INDIVISIBLE enforceable. (Art. 1420)
Non-susceptibility to be 2. Indivisible contract – entire contract is
Susceptibility of an performed partially indivisible and unenforceable.
obligation to be Partial performance is
performed partially tantamount to non- Q: What is the effect of partial performance in
performance indivisible obligation?
Q: What is the true test in determining divisibility? A: It is tantamount to non-performance. (Pineda,

A: Whether or not the prestation is susceptible of
partial performance, not in the sense of E. OBLIGATIONS WITH A PENAL CLAUSE
performance in separate or divided parts, but in the
sense of the possibility of realizing the purpose Q: What is a penal clause?
which the obligation seeks to obtain. If a thing
could be divided into parts and as divided, its value A: It is an accessory obligation or undertaking
is impaired disproportionately, that thing is attached to the principal obligation to assure
indivisible. (Pineda, Obligations and Contracts, 2000 greater responsibility in case of breach.
ed, p. 174)
Note: Proof of actual damages suffered by the creditor
is not necessary in order that the penalty may be
Q: What are the obligations that are deemed
demanded. (Art. 1228)
indivisible and obligations that are deemed
divisible:
Q: Can the debtor just choose penalty over non-
fulfillment?
A:
1. Obligations that are deemed indivisible:
A: GR: No. The debtor cannot exempt himself from
a. Obligations to give definite things;
the performance of the obligation by paying the
b. Those which are not susceptible of partial
penalty. (Art. 1227)
performance;
c. Even the object or service may be
XPN: Yes. When the right has been expressly
physically divisible, an obligation is
reserved to the debtor. (Art. 1227)
indivisible id so provided (i) by law or (i)
intended by the parties. (Art. 1225)
Q: Can the creditor demand both the fulfillment of
the principal obligation and the penalty?
Note: A joint obligation gives rise to indemnity for
damages from the time anyone of the debtors
does not comply with his undertaking. The
A: GR: No. The creditor cannot demand the
debtors who may have been ready to fulfill their fulfillment of the obligation and the satisfaction of
promises shall not contribute to the indemnity the penalty at the same time. (Art. 1227)
beyond the corresponding portion of the price of
the thing or of the value of the service in which XPNs: Yes.
the obligation consists. (Art. 1224) 1. When the right has been clearly granted
to him;
2. Obligations that are deemed divisible: 2. If the creditor has decided to require the
a. When the object of the obligation fulfillment of the obligation, the
involves: performance thereof should become
i. certain number of days of work; impossible without his fault, the penalty
ii. accomplishment of work by metrical may be enforced. (Art. 1227)
unit;
iii. Analogous things which are by their
nature are susceptible of partial
performance. (Art. 1225)
195
Q: What is the effect of incorporating a penal A: Yes. That is in the nature of “mutual desistance”
clause in an obligation? – which is a mode of extinguishing obligations. It is
a concept that derives from the principle that since
A: GR: The penalty fixed by the parties is a mutual agreement can create a contract, mutual
compensation or substitute for damages in case of disagreement by the parties can cause its
breach. extinguishment. (Saura v. Development Bank of the
Phils., G.R. No. 24968, Apr. 27, 1972)
XPNs: Damages shall still be paid even if there
is a penal clause if: SRG A. PAYMENT OR PERFORMANCE
1. there is a Stipulation to the contrary
2. the debtor Refuses to pay the agreed Q: Is the term “payment,” as used in the Code,
penalty limited to appreciable sums of money?
3. the debtor is Guilty of fraud in the
fulfillment of the obligation. (Art. 1126) A: No. Payment may consist not only in the delivery
of money but also the giving of a thing (other than
Note: The nullity of the penal clause does not carry money), the doing of an act, or not doing of an act.
with it that of the principal obligation.
Note: Payment means not only the delivery of money
The nullity of the principal obligation carries with it but also the performance, in any other manner, of an
that of the penal clause. (Art. 1230) obligation. (Art. 1232)
Q: When may penalty be reduced by the courts? Q: What is tender of payment?
A: PIU A: Tender of payment is the definitive act of

1. Partial performance of the obligation; offering the creditor what is due him or her,
2. Irregular performance of the obligation; together with the demand that the creditor accept
or the same.
3. Penalty is Unconscionable even if there
has been no performance. Note: There must be a fusion of intent, ability and
capability to make good such offer, which must be
IX. EXTINGUISHMENT OF OBLIGATIONS absolute and must cover the amount due. (FEBTC v.
Diaz Realty Inc., G.R. No. 138588, Aug. 23, 2001)
Q: What are the modes of extinguishment of an
obligation? Q: Is the creditor bound to accept payment or
performance by a third person?
A: A:
Principal Modes: PaLoCo₃N GR: No, the creditor is not bound.
1. Payment or performance
2. Loss of the thing due XPNs:
3. Condonation or remission of debt 1. When made by a third person who has
4. Confusion or merger interest in the fulfillment of the obligation
5. Compensation 2. Contrary stipulation (Art. 1236)
6. Novation (Art. 1231)
Q: What are the rights of a third person who paid
Other Modes: ARFP the debt?
7. Annulment
8. Rescission A:
9. Fulfillment of a resolutory condition 1. With knowledge and consent of the debtor:
10. Prescription (Art. 1231) a. can recover entire amount paid (absolute
reimbursement)
Note: The enumeration is not exclusive. b. can be subrogated to all rights of the
creditor.
MUTUAL DESISTANCE 2. Without knowledge or against the will of the
debtor – can recover only insofar as payment
Q: If the parties mutually disagree as regards the has been beneficial to the debtor (right of
obligation, may it be cancelled? conditional reimbursement)
Note: Payment made by a third person who does not

intend to be reimbursed by the debtor is deemed to be
196 CIVIL LAW TEAM

OBLIGATIONS
a donation, which requires the debtor's consent. But

the payment is in any case valid as to the creditor who Q: Can the debtor or creditor be compelled to
has accepted it. (Art. 1238) perform/accept partial prestations?
Q: State the requisites of a valid payment. A: GR: Debtor cannot be compelled by the creditor
to perform obligation in parts and neither can the
A: CCPAD debtor compel the creditor to accept obligation in
1. Capacity of the payor parts.
2. Capacity of the payee
3. Propriety of the time, place, manner of XPNs: When:
payment 1. partial performance has been agreed
4. Acceptance by the creditor upon
5. Delivery of the full amount or the full 2. part of the obligation is liquidated and
performance of the prestation part is unliquidated
3. to require the debtor to perform in full is
Q: What are the characteristics of payment? impractical
A: Q: Is the acceptance by a creditor of a partial

1. Integrity; payment an abandonment of its demand for full
2. Identity; and payment?
3. Indivisibility.
A: No. When creditors receive partial payment, they
INTEGRITY are not ipso facto deemed to have abandoned their
prior demand for full payment.
Q: How should performance be made?
To imply that creditors accept partial payment as
A: GR: Performance should always be in full. (Art. complete performance of their obligation, their
1233) acceptance must be made under circumstances
that indicate their intention to consider the
XPNs: performance complete and to renounce their claim
1. Substantial performance performed in arising from the defect.
good faith (Art. 1234)
2. When the obligee accepts the Note: While Article 1248 of the Civil Code states that creditors
performance, knowing its incompleteness cannot be compelled to accept partial payments, it does not
or irregularity and without expressing prohibit them from accepting such payments. (Selegna
Management and Development Corp. v. UCPB, G.R. No.
any protest or objection (Art. 1235) 165662, May 30, 2006)
3. Debt is partly liquidated and partly
unliquidated, but the liquidated part of Q: To whom payment should be made?
the debt must be paid in full.
A: Payment shall be made to:
IDENTITY 1. the person in whose favor the obligation
has been constituted
Q: What should be given as payment of an 2. his successor in interest, or
obligation? 3. any person authorized to receive it. (Art.
1240)
A: GR: Thing paid must be the very thing due and
cannot be another thing even if of same or more Q: Is payment to an unauthorized person a valid
quality and value. payment?
XPNs: A: GR: Payment to an unauthorized person is not a

1. Dation in payment valid payment. (Art. 1241)
2. Novation of the obligation
3. Obligation is facultative XPNs:
1. Payment to an incapacitated person if:
Note: In an obligation to do or not to do an act or a. he kept the thing delivered, or
forbearance cannot be substituted by another act
b. it has been beneficial to him (Art.
or forbearance against the obligee’s (CR) will.
1241)
INDIVISIBILITY
197
2. Payment to a third person insofar as it the former’s obligation to the latter (Pineda,
redounded to the benefit of the creditor Obligations and Contracts, 2000 ed, p. 241)
Consignation
XPNs: Benefit to the creditor need not be Act of depositing the object of the obligation with the
proved: RRE court or competent authority after the CR has
a. If after the payment, the third unjustifiably refused to accept the same or is not in a
person acquires the creditor’s Rights; position to accept it due to certain reasons or
b. If the creditor Ratifies the payment circumstances (Pineda, Obligations and Contracts,
to the third person; 2000 ed, p. 241)
c. If by the creditor’s conduct, the
debtor has been led to believe that 1. DATION IN PAYMENT
the third person had authority to
receive the payment. (Estoppel) (Art. Q: What does dation in payment or dacion en
1241) pago entail?
3. Payment in good faith to the possessor of A: Dacion en pago is the delivery and transmission
credit (Art. 1242) of ownership of a thing by the debtor to the
creditor as an accepted equivalent of the
Note: Payment made to the creditor by the performance of the obligation. The property given
debtor after the latter has been judicially ordered may consist not only of a thing but also of a real
to retain the debt shall not be valid. (Art. 1243) right. (Tolentino, Civil Code of the Philippines, Vol.
IV, 2002 ed, p. 293)
Q: Is consent of the debtor necessary when the
third person does not intend to be reimbursed? Note: The undertaking partakes of the nature of sale,
that is, the creditor is really buying the thing or
A: Yes. Payment made by a third person who does property of the debtor, payment for which is to be
not intend to be reimbursed by the debtor is charged against the debtor’s debt. As such, the
essential elements of a contract of sale, namely,
deemed to be a donation which requires the
consent, object certain, and cause or consideration
debtor’s consent. But the payment is in any case
must be present.
valid as to the creditor who has accepted it. (Art.
1238) Q: What are the elements of dation in payment?
SPECIAL FORMS OF PAYMENT A:

1. Existence of a money obligation
Q: What are the special forms of payment? 2. Alienation to the creditor of a property by the
debtor with the consent of the former
A: 3. Satisfaction of the money obligation of the
CONCEPT debtor
Dation in Payment
Alienation by the debtor of a particular property in Q: Lopez obtained a loan in the amount of
favor of his creditor, with the latter’s consent, for the P20,000.00 from the Prudential Bank. He executed
satisfaction of the former’s money obligation to the a surety bond in which he, as principal, and
latter, with the effect of extinguishing the said money
PHILAMGEN as surety, bound themselves jointly
obligation (Pineda, Obligations and Contracts, 2000 ed,
and severally for the payment of the sum. He also
p. 212)
executed a deed of assignment of 4,000 shares of
Application of Payment
the Baguio Military Institution in favor of
Designation of the particular debt being paid by the
debtor who has two or more debts or obligations of
PHILAMGEN. Is the stock assignment made by
the same kind in favor of the same creditor to whom Lopez dation in payment or pledge?
the payment is made (Pineda, Obligations and
Contracts, 2000 ed, p. 229) A: The stock assignment constitutes a pledge and
Payment by Cession not a dacion en pago. Dation in payment is the
Debtor cedes his property to his creditors so the latter delivery and transmission of ownership of a thing
may sell the same and the proceeds realized applied to by the debtor to the creditor as an accepted
the debts of the debtor (Pineda, Obligations and equivalent of the performance of the obligation.
Contracts, 2000 ed, p. 238) Lopez’s loan has not yet matured when he
Tender of Payment "alienated" his 4,000 shares of stock to Philamgen.
Voluntary act of the debtor whereby he offers to the Lopez's obligation would arise only when he would
creditor for acceptance the immediate performance of default in the payment of the principal obligation
198 CIVIL LAW TEAM

OBLIGATIONS
which is the loan and Philamgen had to pay for it. public or private and which the creditor cannot
Since it is contrary to the nature and concept of refuse to accept.
dation in payment, the same could not have been
constituted when the stock assignment was The legal tender covers all notes and coins issued
executed. In case of doubt as to whether a by the Bangko Sentral ng Pilipinas. The amount of
transaction is a pledge or a dation in payment, the coins that may be accepted as legal tender are:
presumption is in favor of pledge, the latter being a. 1-Peso, 5-Pesos, 10-Pesos coins in
amount not exceeding P1,000.00
the lesser transmission of rights and interests.
b. 25 centavos or less – in amount not
(Lopez v. CA,G.R. No. L-33157, June 29, 1982)
exceeding P100.00 (BSP Circulaar No.
537, Series of 2006, July 18, 2005)
Q: Cebu Asiancars Inc., with the conformity of the
lessor, used the leased premises as a collateral to 2. Payment in check or other negotiable
secure payment of a loan which Asiancars may instrument – not considered payment, they are
obtain from any bank, provided that the proceeds not considered legal tender and may be
of the loan shall be used solely for the refused by the creditor except when:
construction of a building which, upon the a. the document has been cashed; or
termination of the lease or the voluntary b. it had been impaired through the fault of
surrender of the leased premises before the the creditor.
expiration of the contract, shall automatically
become the property of the lessor. Meeting PAYMENT IN CASH
financial difficulties and incurring an outstanding
balance on the loan, Asiancars conveyed Q: Northwest Airlines, through its Japan Branch,
ownership of the building on the leased premises entered into an International Passenger Sales
to MBTC, by way of "dacion en pago."Is the dacion Agency Agreement with CF Sharp, authorizing the
en pago by Asiancars in favor of MBTC valid? latter to sell its air transport tickets. CF Sharp
failed to remit the proceeds of the ticket sales,
A: Yes. MBTC was a purchaser in good faith. MBTC thus, Northwest Airlines filed a collection suit
had no knowledge of the stipulation in the lease before the Tokyo District Court which rendered
contract. Although the same lease was registered judgment ordering CF Sharp to pay 83,158,195 Yen
and duly annotated, MBTC was charged with and damages for the delay at the rate of 6% per
constructive knowledge only of the fact of lease of annum. Unable to execute the decision in Japan,
the land and not of the specific provision stipulating Northwest Airlines filed a case to enforce said
transfer of ownership of the building to the Jaymes foreign judgment with the RTC of Manila. What is
upon termination of the lease. While the alienation the rate of exchange that should be applied for the
was in violation of the stipulation in the lease payment of the amount?
contract between the Jaymes and Asiancars,
MBTC’s own rights could not be prejudiced by A: The repeal of R.A. 529 by R.A. 8183 has the effect
Asiancars’ actions unknown to MBTC. Thus, the of removing the prohibition on the stipulation of
transfer of the building in favor of MBTC was valid currency other than Philippine currency, such that
and binding. (Jayme v. CA, G.R. No. 128669, Oct. 4, obligations or transactions may now be paid in the
2002) currency agreed upon by the parties. Just like R.A.
529, however, the new law does not provide for the
2. FORM OF PAYMENT applicable rate of exchange for the conversion of
foreign currency-incurred obligations in their peso
Q: What are the rules as regards payment in equivalent. It follows, therefore, that the
monetary obligations? jurisprudence established in R.A. 529 regarding the
rate of conversion remains applicable. Thus, in Asia
A: World Recruitment, Inc. v. National Labor Relations
1. Payment in cash– all monetary obligations Commission, the SC, applying R.A. 8183, sustained
shall be settled in the Philippine currency the ruling of the NLRC that obligations in foreign
which is legal tender in the Philippines. currency may be discharged in Philippine currency
However, the parties may agree that the based on the prevailing rate at the time of payment.
obligations or transactions shall be settled in It is just and fair to preserve the real value of the
any other currency at the time of payment. foreign exchange- incurred obligation to the date of
(Sec. 1, R.A. 8183) its payment.
Note: Legal tender refers to such currency which
may be used for payments of debts whether
199
Q: If the rate of interest is not stipulated, what A: No. Receipts of payment, although not exclusive,
should be the rate of interest that should apply? are deemed the best evidence of the fact of
When should the interest begin to run? payment. (Dela Peña and Villareal v. CA and Rural
Bank of Bolinao, Inc., G.R. No. 177828, Feb. 13,
A: In Eastern Shipping Lines, Inc. v. CA, it was held 2009)
that absent any stipulation, the legal rate of interest
in obligations which consists in the payment of a EXTRAORDINARY INFALTION OR DEFLATION
sum of money is 12% per annum to be reckoned
from the time of filing of the complaint therein until Q: What is the rule in payment in case of an
the said foreign judgment is fully satisfied. (C.F. extraordinary inflation or deflation?
Sharp & Co., Inc. v. Northwest Airlines, Inc., G.R. No.
133498, Apr. 18, 2002) A: In case an extraordinary inflation or deflation of
the currency stipulated should supervene, the value
PAYMENT BY NEGOTIABLE INSTRUMENT of the currency at the time of the establishment of
the obligation shall be the basis of payment, unless
Q: Diaz & Company obtained a loan from Pacific there is an agreement to the contrary. (Art. 1250)
Banking Corp which was secured by a real estate
mortgage over two parcels of land owned by the Note: It applies only to contractual obligations, it
plaintiff Diaz Realty. ABC rented an office space in cannot be applied to obligations arising from torts.
the building constructed on the properties covered
by the mortgage contract. The parties then agreed Q: Does the exchange rate at the time of the
that the monthly rentals shall be paid directly to establishment of the obligation apply in all cases?
the mortgagee for the lessor's account, either to
partly or fully pay off the aforesaid mortgage A: No. The rule that the value of the currency at the
indebtedness. Thereafter, FEBTC purchased the time of the establishment of the obligation shall be
credit of Diaz & Company in favor of PaBC, but it the basis of payment finds application only when
was only after 2 years that Diaz was informed there is an official pronouncement or declaration of
about it. Diaz asked the FEBTC to make an the existence of an extraordinary inflation or
accounting of the monthly rental payments made deflation.
by Allied Bank. Diaz tendered to FEBTC the amount
of P1,450,000.00 through an Interbank check, in 4. APPLICATION OF PAYMENTS
order to prevent the imposition of additional
interests, penalties and surcharges on its loan but Q: What does the concept of application of
FEBTC did not accept it as payment, instead, Diaz payments mean?
was asked to deposit the amount with the FEBTC’s
Davao City Branch Office. Was there a valid tender A: It is the designation of the debt to which the
of payment? payment must be applied when the debtor has
several obligations of the same kind in favor of the
A: Yes. True, jurisprudence holds that, in general, a same creditor. (Art. 1252)
check does not constitute legal tender, and that a
creditor may validly refuse it. It must be Q: What are the requisites of application of
emphasized, however, that this dictum does not payments?
prevent a creditor from accepting a check as
payment. In other words, the creditor has the A:
option and the discretion of refusing or accepting it. 1. There is only one debtor and creditor.
(FEBTC v. Diaz Realty Inc., G.R. No. 138588, Aug. 23, 2. The debtor owes the creditor two or more
2001) debts which are of the same kind or identical.
3. All debts are due and demandable
Q: Who has the burden of proving payment in an 4. The payment made by the debtor is not
action for sum of money? sufficient to cover ir settle all debts. (Pineda.
Obligations and Contracts, 2000 ed. p. 251)
A: The party who pleads payment as a defense has
the burden of proving that such payment has, in Q: What is the governing rule in case the debtor
fact, been made. fails to ascertain which debt his payment is to be
applied?
Q: Are receipts the only evidence that can be
presented to prove payment? A: The choice may be transferred to the creditor as
when the debtor makes payment and does not
200 CIVIL LAW TEAM

OBLIGATIONS
make application and debtor accepts a receipt in PAYMENT BY CESSION

which the application is made. In such a case, the
debtor cannot complain of the application the Q: What are the circumstances evidencing
creditor has made unless there be a cause for payment by cession?
invalidating the contract. (Art. 1252)
A: Debtor abandons all of his property for the
Note: The debtor has the preferential right to choose benefit of his creditors in order that from the
which debt of the several debts shall be due. (Art. proceeds thereof, the latter may obtain payment of
1252) credits.
Q: May application of payments be made even if Note: It presupposes insolvency of the debtor. All the
the debts are not yet due? debtor’s creditors must be involved and the consent of
the latter must be obtained.
A: GR: No. All debts must be due and demandable.
Q: Distinguish dation in payment from payment in
XPN: Yes. cession.
1. The parties so stipulate
2. Application is made by the party whose A:
benefit the term has been constituted DATION IN PAYMENT PAYMENT IN CESSION
(Art.1252) Number of creditors
Maybe one creditor Plurality of creditors
Q: If both the creditor and the debtor fail to apply Financial condition of the debtor
payments, what rule governs? Not necessarily in state of Debtor must be partially
financial difficulty or relatively insolvent
A: Legal application of payment governs wherein Object
the law makes the application. Thing delivered is
Universality or property
considered as equivalent
of debtor is what is ceded
The payment should be applied to the more of performance
onerous debts: Extent of the extinguishment
1. When a person is bound as principal in Payment extinguishes
one obligation and as surety in another, obligation to the extent Merely releases debtor
the former is more onerous. of the value of the thing for net proceeds of
delivered as agreed upon, things ceded or assigned,
2. When there are various debts, the oldest
proved or implied from unless there is contrary
ones are more burdensome.
the conduct of the intention
3. Where one bears interest and the other
creditor
does not, even if the latter is the older
Ownership
obligation, the former is considered more Ownership is transferred Ownership is not
onerous. to CR upon delivery transferred
4. Where there is an encumbrance, the debt Novation
with a guaranty is more onerous than that An act of novation Not an act of novation
without security. Presumption of insolvency
5. With respect to indemnity for damages, Does not presuppose
the debt which is subject to the general Presupposes insolvency
insolvency
rules on damages is less burdensome
than that in which there is a penal clause. TENDER OF PAYMENT
6. The liquidated debt is more burdensome
than the unliquidated one. Q: What constitutes a valid tender of payment?
7. An obligation in which the debtor is in
default is more onerous than one in A: Voluntary act of the debtor whereby he offers to
which he is not. (Tolentino, Civil Code of the creditor for acceptance the immediate
the Philippines, Vol. IV, 2002 ed, p. 314- performance of the former’s obligation to the
315) latter. (Pineda, Obligations and Contracts, 2000 ed,
p. 241)
Note: If the debts happen to be of same nature
and burden, the payment shall be applied
Tender of payment is the manifestation by debtors
proportionately.
of their desire to comply with or to pay their
obligation. (Sps. Benos v. Sps. Lawilao, G.R. No.
172259, Dec. 5, 2006)
201
4. Prior notice of consignation given to

Note: If the creditor refuses the tender of payment persons interested in the fulfillment of
without just cause, the debtors are discharged from the obligation;
the obligation by the consignation of the sum due. 5. Amount or thing is deposited at the
(Sps. Benos v. Sps. Lawilao, G.R. No. 172259, Dec. 5, disposal of judicial authority; and
2006) 6. Subsequent notice of the fact of
consignation to persons interested in the
CONSIGNATION fulfillment of the obligation.
Q: What is consignation? Q: Can the debtor withdraw the thing deposited?
A: Act of depositing the object of the obligation A: Before the creditor has accepted the
with the court or competent authority after the CR consignation, or before a judicial declaration that
has unjustifiably refused to accept the same or is the consignation has been properly made, the
not in a position to accept it due to certain reasons debtor may withdraw the thing or the sum
or circumstances. (Pineda, Obligations and deposited, allowing the obligation to remain in
Contracts, 2000 ed, p. 241) force. (Art. 1260)
Q: When and where is consignation made? Note: If, the consignation having been made, the
creditor should authorize the debtor to withdraw the
A: Consignation shall be made by depositing the same, he shall lose every preference which he may
things due at the disposal of judicial authority, have over the thing. The co-debtors, guarantors and
before whom tender of payment shall be proved, in sureties shall be released. (Art. 1261)
proper case, and the announcement of the
consignation in other cases. (Art. 1258) Q: Distinguish tender of payment from
consignation.
Note: Once the consignation has been duly made, the
debtor may ask the judge to order the cancellation of A:
the obligation. (Art. 1260) TENDER OF PAYMENT CONSIGNATION
Nature
Q: When will consignation produce effects of Antecedent of Principal or
payment? consignation or consummating act for the
preliminary act to extinguishment of the
A: GR: Consignation shall produce effects of consignation obligation
payment only if there is a valid tender of payment. Effect
It extinguishes the
It does not by itself
XPNs: When: ARTIT obligation when declared
extinguish the obligation
1. Creditor is Absent or unknown, or doesn’t valid
appear at place of payment Character
2. Creditor Refuses to issue a receipt Judicial for it requires the
without just cause filing of a complaint in
3. Title of the obligation has been lost Extrajudicial court (Pineda, Obligations
4. Creditor is Incapacitated to and Contracts, 2000 ed,
p. 242)
receive payment at the time it is due
5. Two or more persons claim the right to
collect. (Art. 1256) Q: In an ejectment case, X refused to vacate the
land alleging that Y had sold to him the additional
Note: The expenses of consignation, when properly area, the payment of which would be effected five
made, shall be charged against the creditor. (Art. 1259) years after the execution of a formal deed of sale.
However, the parties failed to execute a deed of
Q: What are the requisites of consignation? sale. During the pendency of the action, X
deposited the payment for the addition to the lot
A: VP-CPAS with the court. Is there a valid consignation?
1. Valid existing debt which is already due;
2. Prior valid tender of payment except A: No. Under Art. 1257 of this Civil Code,
when prior tender of payment is consignation is proper only in cases where an
dispensable; existing obligation is due. In this case, the
3. Creditor unjustly refuses the tender of contracting parties agreed that full payment of
payment; purchase price shall be due and payable within 5
202 CIVIL LAW TEAM

OBLIGATIONS
years from the execution of a formal deed of sale. B. LOSS OF THE THING DUE
At the time Rodriguez deposited the amount in
court, no formal deed of sale had yet been Q: When is a thing considered lost?
executed by the parties, and, therefore, the 5-year
period during which the purchase price should be A: When: DOPE
paid had not commenced. In short, the purchase 1. It Disappears in such a way that its
price was not yet due and payable. (Heirs of San existence is unknown;
Andres v. Rodriguez, G.R. No. 135634, May 31, 2. It goes Out of commerce;
2000) 3. It Perishes; or
4. Its Existence is unknown or if known, it
Q: Under a pacto de retro sale, X sold to Y his lot cannot be recovered.
and the building erected thereon. They agreed
that half of the consideration shall be paid to the Q: What is the effect of loss of the thing which is
bank to pay off the loan of X. After paying the first the object of the obligation?
installment, Y, instead of paying the loan to the
bank, restructured it twice. Eventually, the loan A: If the obligation is a:
became due and demandable. Thus, X paid the 1. Determinate obligation to give:
bank. On the same day, Y also went to the bank GR: The obligation is extinguished when
and offered to pay the loan, but the bank refused the object of the obligation is lost or
to accept the payment. destroyed. (Art. 1262)
Y then filed an action for consignation without XPNs: LAS-CD-PCG

notifying X. Is there a valid consignation by Y of a. Law provides otherwise (Art. 1262)
the balance of the contract price? b. Nature of the obligation requires the
Assumption of risk (Ibid)
A: No. Y filed the petition for consignation against c. Stipulation to the contrary (Ibid)
the bank without notifying the X, resulting to the d. Debtor Contributed to the loss (Ibid)
former’s failure to prove the payment of the e. Loss the of the thing occurs after the
balance of the purchase price and consignation. In debtor incurred in Delay (Ibid)
fact, even before the filing of the consignation case, f. When debtor Promised to deliver the
Y never notified the X of their offer to pay. (Sps. same thing to two or more persons
Benos v. Sps.Lawilao, G.R. No. 172259, Dec. 5, 2006) who do not have the same interest
(Art. 1165)
Q: Because of Ligaya’s refusal to accept several g. When the debt of a certain and
tenders of payment and notices of consignation determinate thing proceeds from a
given by OSSA in its desire to comply with its Criminal offense (Art. 1268)
obligation to pay on installments, OSSA brought a h. When the obligation is Generic (Art.
complaint for consignation against Ligaya before 1263)
the RTC. The RTC allowed OSSA, among others, to
deposit with it,by way of consignation, all future 2. Generic obligation to give:
quarterly installments without need of formal GR: The obligation is not extinguished
tenders of payment and service of notices of because a generic thing never perishes
consignation. (genus nun guam perit). (Art. 1263)
Ligaya assails the validity of the consignation on XPNs:

the ground that there was no notice to her 1. In case of generic obligations whose
regarding OSSA's consignation of the amounts object is a particular class or group
corresponding to certain installments. Is Ligaya with specific or determinate qualities
correct? (delimited generic obligation)
2. In case the generic thing has already
A: No. The motion and the subsequent court order been segregated or set aside, in
served on Ligaya in the consignation proceedings which case, it has become specific.
sufficiently served as notice to Ligaya of OSSA's
willingness to pay the quarterly installments and 3. An obligation to do – the obligation is
the consignation of such payments with the court. extinguished when the prestation
For reasons of equity, the procedural requirements becomes legally or physically impossible
of consignation are deemed substantially complied without the fault of the obligor. (Art.
with in the present case (De Mesa v. CA, G.R. Nos. 1266)
106467-68, Oct. 19, 1999).
203
presumed to have assumed the risk of unfavorable

Q: Differentiate legal from physical impossibility to developments. (Pineda, Obligations and Contracts,
perform an obligation to do. 2000 ed., p. 264)
A: Note: Principle of unforeseen events applies when the

1. Legal impossibility – act stipulated to be service has become so difficult as to be manifestly
performed is subsequently prohibited by law. beyond the contemplation of the parties, the obligor
may also be released therefrom in whole or in part.
2. Physical impossibility – act stipulated could not
(Art. 1267)
be physically performed by the obligor due to
reasons subsequent to the execution of the
Q: What are the requisites in order to relieve the
contract. (Pineda, Obligations and Contracts,
debtor from his obligation, in whole or in part,
2000 ed, p. 261)
based on unforeseen difficulty of service?
Note: The impossibility must be after the
constitution of the obligation. If it was before,
A:
there is nothing to extinguish. 1. Event or change in circumstance could not
have been foreseen at the time of the
Q: What is the effect of partial loss? execution of the contract;
2. Such event makes the performance extremely
A: difficult but not impossible;
1. Due to the fault or negligence of the debtor – 3. The event must not be due to the act of any of
CR has the right to demand the rescission of the parties; and
the obligation or to demand specific 4. The contract is for a future prestation.
performance, plus damages, in either case. (Tolentino, Civil Code of the Philippines, Vol. IV,
2. Due to fortuitous event: 2002 ed, p. 347)
a. Substantial loss – obligation is
extinguished. Q: What is the rule on obligation arising from
b. Unsubstantial loss – the CR shall deliver criminal offense?
the thing promised in its impaired
condition. (Art. 1264) A: Debt of a thing certain and determinate
proceeds from criminal offense:
Q: What is the effect when the thing is lost in the GR: Debtor shall not be exempted from the
payment of its price, whatever may be the
possession of the debtor?
cause for the loss.
A: GR: It is presumed that loss is due to DR’s fault.
XPN: The thing having been offered by
debtor to the person who should receive it,
XPN: Presumption shall not apply in case loss is
the latter refused without justification to
due to earthquake, flood, storm or other
accept it. (Art. 1268)
natural calamity. (Art. 1262)
Note: Offer referred in Art. 1268 is different
XPN to the XPN: Debtor still liable even if loss from consignation; the former refers to
is due to fortuitous event when: extinguishment of obligation through loss
1. Debtor incurred in delay; or while the latter refers to the payment of the
2. Debtor promised to deliver the thing to obligation.
two or more persons with different
interests (par. 3, Art. 1165) C. CONDONATION OR REMISSION OF DEBT
Q: What does rebus sic stantibus mean? Q: What is condonation?
A: A principle in international law which means that A: It is an act of liberality by virtue of which the
an agreement is valid only if the same conditions creditor, without receiving any price or equivalent,
prevailing at time of contracting continue to exist at renounces the enforcement of the obligation, as a
the time of performance. It is the basis of the result of which it is extinguished in its entirety or in
principle of unforeseen difficulty of service. (Art. that part or aspect of the same to which the
1267) condonation or remission refers. (Pineda,
Note: However, this principle cannot be applied
absolutely in contractual relations since parties are
204 CIVIL LAW TEAM

OBLIGATIONS
EXPRESS CONDONATION it is required that the DR gives his consent thereto

by making an acceptance. If there is no acceptance,
Q: What are the requisites of condonation? there is no condonation. (Pineda, Obligations and
Contracts, 2000 ed, p. 267)
A: GAIDE
1. Must be Gratuitous; D. CONFUSION OR MERGER OF RIGHTS
2. Acceptance by the debtor, it may be ;
3. Must not be Inofficious; Q: What is confusion or merger of rights?
4. Formalities provided by law on Donations
must be complied with if condonation is A: It is the merging or convergence of the rights of a
express; and creditor and debtor in one and in the same person
5. An Existing demandable debt. with regard to the same obligation.
IMPLIED CONDONATION Q: When is there a confusion or merger of rights?
Q: What is the effect of the delivery of a private A: The meeting in one person of the qualities of a
document evidencing a credit? creditor and debtor of the same obligation.
(Sanchez Roman)
A: The delivery of a private document evidencing a
credit, made voluntarily by the creditor to the Q: What are the requisites of confusion or merger
debtor, implies the renunciation of the action which of rights?
the former had against the latter.
A:
If in order to nullify this waiver it should be claimed 1. Merger in the same person of the
to be inofficious, the debtor and his heirs may characters of both a creditor and d debtor
uphold it by proving that the delivery of the (Art. 1275);
document was made in virtue of payment of the 2. Must take place in the persons of a
debt. (Art. 1271) principal creditor and a principal
debtor(Art. 1276); and
3. Merger is definite and complete.
Note: Whenever the private document in which the
debt appears is found in the possession of the debtor,
it shall be presumed that the creditor delivered it
Q: What is the effect of confusion or merger of
voluntarily, unless the contrary is proved. (Art. 1272) rights?
Q: What is the effect of the remission of the A: The creditor and debtor becomes the same
principal debt with respect to the accessory person involving the same obligation. Hence, the
obligation and vice versa? obligation is extinguished. (Art. 1275)
A: The renunciation of the principal debt shall Q: Can there be partial confusion?
extinguish the accessory but the waiver of the latter
shall leave the former in force. (Art. 1273) A: Yes. It will be definite and complete up to the
extent of the concurrent amount or value, but the
Note: It is presumed that the accessory obligation of remaining obligation subsists. (Pineda, Obligations
pledge has been remitted when the thing pledged, and Contracts, 2000 ed, p. 278)
after its delivery to the creditor, is found in the
possession of the debtor, or of a third person who Q: What is the effect when confusion or merger is
owns the thing. (Art. 1274) revoked?
Q: What is the effect of inofficious condonation?
A: If the act which created the confusion is revoked
for some causes such as rescission of contracts, or
A: It may be totally revoked or reduced depending
nullity of the will or contract, the confusion or
on whether or not it is totally or only partly
merger is also revoked. The subject obligation is
inofficious. (Pineda, Obligations and Contracts,
revived in the same condition as it was before the
2000 ed, p. 268)
confusion.
Q: Can there be a unilateral condonation? Note: During such interregnum, the running of the
period of prescription of the obligation is suspended.
A: No. Since it is a donation of an existing credit, (Pineda, Obligations and Contracts, 2000 ed, p. 279)
considered a property right, in favor of the debtor,
205
Q: What is the effect of confusion or merger in compensation as regards what the

relation to the guarantors? creditor may owe the principal (Art. 1280)
;
A: 2. Both debts consist in sum of money, or if
1. Merger which takes place in the person of the the things due are consumable, they be of
principal debtor or principal creditor benefits the Same kind and also of the same
the guarantors. The contract of guaranty is quality if the latter has been stated;
extinguished. 3. Both debts are Due;
2. Confusion which takes place in the person of 4. Both debts are Liquidated and
any of the guarantors does not extinguish the Demandable;
obligation. (Art. 1276) 5. Neither debt must be retained in a
Controversy commenced by third person
Q: What is the effect of confusion or merger in one and communicated in due time to the
debtor or creditor in a joint obligation? debtor (neither debt is garnished) (Art.
1279); and
A: GR: Joint obligation is not extinguished since 6. Compensation must not be Prohibited by
confusion is not definite and complete with regard law. (Art. 1290)
to the entire obligation. A part of the obligation still
remains outstanding. Note: When all the requisites mentioned in Art.
1279 of the Civil Code are present, compensation
XPN: Obligation is extinguished with respect takes effect by operation of law, and extinguishes
only to the share corresponding to the DR or CR both debts to the concurrent amount, even
concerned. In effect, there is only partial though the creditors and debtors are not aware
extinguishment of the entire obligation. (Art. of the compensation. (Art. 1290)
1277; Pineda, Obligations and Contracts, 2000
1. KINDS OF COMPENSATION
ed, p. 281)
Q: What are the kinds of compensation?
Q: In a solidary obligation, what is the effect of
confusion or merger in one debtor or creditor?
A:
A: If a solidary debtor had paid the entire 1. Legal compensation – by operation of law
2. Conventional – by agreement of the
obligation, the obligation is totally extinguished
parties
without prejudice to the rights of the solidary
3. Judicial (set-off) – by judgment of the
debtor who paid, to proceed against his solidary co-
court when there is a counterclaim duly
debtors for the latter’s individual contribution or
liability. (Pineda, Obligations and Contracts, 2000 pleaded, and the compensation decreed
4. Facultative – may be claimed or opposed
ed, p. 282)
by one of the parties.
E. COMPENSATION
LEGAL COMPENSATION
Q: What is compensation?
Q: What are the debts or obligations not subject to
compensation?
A: It is a mode of extinguishing obligations that take
place when two persons, in their own right, are
creditors and debtors of each other. (Art. 1278) A:
1. Debts or obligations arising from
Note: It is the offsetting of the respective obligation of contracts of depositum – loan (Art. 1287)
two persons who stand as principal creditors and 2. Debts arising from obligations of a
debtors of each other, with the effect of extinguishing depositary. (Ibid)
their obligations to their concurrent amount. 3. Debts arising from obligations of a baileee
in commodatum (Ibid)
Q: What are the requisites of compensation? 4. Claims for support due by gratuitous title
(Ibid)
A: PriSDue-LiDeCoP 5. Obligations arising from criminal offenses
1. Each one of the obligors be bound (Art. 1288)
Principally, and that he be at the same 6. Certain obligations in favor of government
time a principal creditor of the other(Art. (e.g. taxes, fees, duties, and others of a
1279) except guarantor who may set uo similar nature)
206 CIVIL LAW TEAM

OBLIGATIONS
Note: Compensation takes place by operation of law, FACULTATIVE COMPENSATION

even though the debts may be payable at different
places, but there shall be an indemnity for expenses of Q: What is facultative compensation?
exchange or transportation to the place of payment.
(Art. 1286) A: One of the parties has a choice of claiming or
opposing the compensation but waives his
Q: De Leon sold and delivered to Silahis various objection thereto such as an obligation of such
merchandise. Due to Silahis' default, De Leon filed party is with a period for his benefit alone and he
a complaint for the collection of said accounts. renounces the period to make the obligation
Silahis asserts, as affirmative defense, a debit become due.
memo as unrealized profit for a supposed
commission that Silahis should have received from Example: X owes Y P100,000 demandable and due
De Leon. Was there legal compensation? on Apr. 1, 2012. Y owes X P100,000 demandable
and due on or before Apr. 15, 2012. Y, who was
A: Silahis admits the validity of its outstanding given the benefit of the term, may claim
accounts with De Leon. But whether De Leon is compensation on April 1, 2012 s his debt is due on
liable to pay Silahis a commission on the subject or before Apr. 15, 2012. On the other hand, X, who
sale to Dole is disputed. This circumstance prevents demands compensation, can be properly oppose by
legal compensation from taking place. (Silahis Y because Y could not be made to pay until Apr. 15,
Marketing Corp. v. IAC, G. R. No. L-74027, Dec. 7, 2012
1989)
Note: Facultative compensation is unilateral and does
Note: Compensation is not proper where the claim of not require mutual agreement; voluntary or
the person asserting the set-off against the other is not conventional compensation requires mutual consent.
clear or liquidated; compensation cannot extend to
unliquidated, disputed claim existing from breach of Q: What are the obligations subject to facultative
contract. (Silahis Marketing Corp. v. IAC, G. R. No. L-
compensation?
74027, Dec. 7, 1989)
A: When one of the debts arises from:
CONVENTIONAL
1. Depositum
2. Obligations of a depositary
Q: What is conventional compensation?
3. Obligations in commudatum
4. Claim of support due to gratuitous title
A: It is one that takes place by agreement of the
parties.
XPN: Future support.
Q: What is the rule in conventional compensation?
5. Civil liability from a crime
A: Compensation to become effective:
Q: Distinguish compensation from payment.
GR: The mutual debts must be both due. (Art.
1279)
A:
COMPENSATION PAYMENT
XPN: The parties may agree that their mutual
A mode of extinguishing
debts be compensated even if the same are
to the concurrent
not yet due. (Art. 1282) Payment means not only
amount, the obligations
delivery of money but
of those persons who in
COMPENSATION also performance of an
their own right are
obligation
reciprocally debtors and
Q: When shall judicial compensation arise? creditors of each other
Capacity of parties not Debtor must have
A: If one of the parties to a suit over an obligation necessary capacity to dispose of the
has a claim for damages against the other, the thing paid;
former may set it off by proving his right to said Reason: Compensation creditor must have
damages and the amount thereof. (Art. 1283) operates by law, not by capacity to receive
the act of the parties payment
Note: All the requisites mentioned in Art. 1279 must The performance must be
There can be partial
be present, except that at the time of pleading, the complete and indivisible
extinguishment of the
claim need not yet be liquidated. The liquidation must unless waived by the
obligation
be made in the proceedings. creditor
207
Legal compensation takes

Takes effect by the act of
place by operation of law A:
the parties and involves
without simultaneous 1. After the compensation took place –
delivery or action
delivery GR: ineffectual; useless act since there is
It is not necessary that nothing more to assign
Parties must be mutually
the parties be mutually
debtors and creditors of
debtors and creditors of XPN: when the assignment was made with
each other
each other the consent of the debtor.
Q: Distinguish compensation from confusion. Note: Such consent operates as a waiver of the
rights to compensation.
A:
COMPENSATION CONFUSION XPN TO THE XPN: at the time he gave his
(Arts. 1278-1279) (Arts. 1275-1277) consent, he reserved his right to the
Two persons who are One person where compensation.
mutual debtors and qualities of debtor and
creditors of each other creditor are merged 2. Before compensation took place
At least two obligations One obligation a. With the consent of the debtor –
compensation cannot be set up except he
Q: Distinguish compensation from counterclaim or right to compensation is reserved.
set-off b. With the knowledge but without consent
of the debtor – compensation can be set
A: up regarding debts previous to the
COUNTERCLAIM / cession or assignment.
COMPENSATION
SET-OFF c. Without the knowledge of debtor - can set
Need not to be pleaded; up compensation as a defense for all
takes place by operation
debts maturing prior to his knowledge of
of law and extinguishes
the assignment.
reciprocally the two It must be pleaded to be
debts as soon as they effectual
exist simultaneously, to Q: Atty. Laquihon, in behalf of Pacweld, filed a
the amount of their pleading addressed to MPCC titled “motion to
respective sums. direct payment of attorney's fee”, invoking a
Generally, both debts Does not require that decision wherein MPCC was adjudged to pay
must be liquidated debts are liquidated Pacweld the sum of P10,000.00 as attorney's fees.
Judicial compensation MPCC filed an opposition stating that the said
provided that the amount is set-off by a like sum of P10,000.00,
Legal or conventional requirements of Rules of collectible in its favor from Pacweld also by way of
compensation governed Court, particularly on attorney's fees which MPCC recovered from the
by the Civil Code Counterclaims and/or same CFI of Manila in another civil case. Was there
Cross-claims are legal compensation?
observed.
A: MPCC and Pacweld were creditors and debtors
Q: What is the rule if one or both debts are of each other, their debts to each other consisting
rescissble or voidable? in final and executory judgments of the CFI in two
separate cases. The two obligations, therefore,
A: When one or both debts are recissible or respectively offset each other, compensation
voidable, they may be compensated against each having taken effect by operation of law and
other before they are judicially rescinded or extinguished both debts to the concurrent amount
avoided. (Art. 1284) of P10,000.00, pursuant to the provisions of Arts.
1278, 1279 and 1290 of the Civil Code, since all the
Note: If the prescriptive period had already lapsed, requisites provided in Art. 1279 of the said Code for
there is automatic compensation and the same will not automatic compensation "even though the
be disturbed anymore. Whereas, if the debt is creditors and debtors are not aware of the
rescinded or annulled, compensation shall be compensation" were present. (Mindanao Portland
restitution of what each party had received before the
Cement Corp. v. CA,G.R. No. L-62169, Feb. 28, 1983)
rescission or annulment.
Q: X, who has a savings deposit with Y Bank in the
Q: What are the effects of assignment on
sum of PI,000,000.00, incurs a loan obligation with
compensation of debts?
208 CIVIL LAW TEAM

OBLIGATIONS
the said bank in the sum of P800,000.00 which has requisites of legal compensation are present (Art.
become due. When X tries to withdraw his 1279). The payment of the rentals by XYZ Bank is
deposit, Y Bank allows only P200,000.00 to be not yet due, but the principal obligation of loan
withdrawn, less service charges, claiming that where both Eduardo and Ricardo are bound
compensation has extinguished its obligation solidarily and therefore any of them is bound
under the savings account to the concurrent principally to pay the entire loan, is due and
amount of X's debt. X contends that compensation demandable without need of demand. XYZ Bank
is improper when one of the debts, as here, arises may declare its obligation to pay rentals as already
from a contract of deposit. Assuming that the due and demand payment from any of the two
promissory note signed by X to evidence the loan debtors.
does not provide for compensation between said
loan and his savings deposit, who is correct? Alternative Answer: Legal compensation can be
validly asserted between the bank, Eduardo and
A: Y bank is correct. All the requisites of Art. 1279, Ricardo. This is a case of facultative obligation, thus,
Civil Code are present. Compensation shall take the bank can assert partial compensation. Banks
place when two persons are reciprocally creditor have an inherent right to set off where both
and debtor of each other. In this connection, it has obligations are due and demandable (Art. 1279).
been held that the relation existing between a
depositor and a bank is that of creditor and debtor. Q: Can Ricardo’s property be foreclosed to pay the
As a general rule, a bank has a right of set off of the full balance of the loan?
deposits in its hands for the payment of any
indebtedness to it on the part of a depositor" A: No, because there was no prior demand on
(Gullas v. PNB, GR No. L-43191, November 13, Ricardo, depriving him of the right to reasonably
1935). Hence, compensation took place between block the foreclosure by payment. The waiver of
the mutual obligations of X and Y bank. (1998 Bar prior demand in the PN is against public policy and
Question) violates the right to due process. Without demand,
there is no default and the foreclosure is null and
Q: Eduardo was granted a loan by XYZ Bank for the void. Since the mortgage, insofar as Ricardo is
purpose of improving a building which XYZ leased concerned is not violated, a requirement under Act
from him. Eduardo executed the promissory note 3135 for a valid foreclosure of real estate mortgage
in favor of the bank, with his friend Ricardo as is absent.
cosignatory. In the PN, they both acknowledged
that they are “individually and collectively” liable In the case of DBP v. Licuanan, it was held that: “the
and waived the need for prior demand. To secure issue of whether demand was made before the
the PN, Ricardo executed a real estate mortgage foreclosure was effected is essential. If demand was
on his own property. When Eduardo defaulted on made and duly received by the respondents and the
the PN, XYZ stopped payment of rentals on the latter still did not pay, then they were already in
building on the ground that legal compensation default and foreclosure was proper. However, if
had set in. Since there was still a balance due on demand was not made, then the loans had not yet
the PN after applying the rentals, XYZ foreclosed become due and demandable. This meant that the
the real estate mortgage over Ricardo’s property. respondents had not defaulted in their payment
Ricardo opposed the foreclosure on the ground and the foreclosure was premature.”
that he is only a co-signatory; that no demand was
made upon him for payment, and assuming he is Alternative Answer 1: No. Although the principal
liable, his liability should not go beyond half of the obligation of loan is due and demandable without
balance of the loan. Further, Ricardo said that need of further demand the foreclosure of the
when the bank invoked compensation between accessory contract of real estate mortgage, there is
the rentals and the amount of the loan, it a need of notice and demand.
amounted to a new contract or novation, and had
the effect of extinguishing the security since he did Alternative Answer 2: Yes. Ricardo’s property can
not give his consent (as owner of the property be foreclosed to pay the full balance of the loan. He
under the real estate mortgage) thereto. is admittedly “individually and collectively” liable.
His liability is solidary. He and Eduardo have waived
Can XYZ Bank validly assert legal compensation? notice for a prior demand as provided in the
promissory note.
A: XYZ Bank may validly assert the partial
compensation of both debts, but is should be
facultative compensation because not all of the five
209
Q: Does Ricardo have basis under the Civil Code

for claiming that the original contract was A:
novated? 1. As to essence
a. Objective or real novation – changing the
A: None of the three kinds of novation is applicable. object or principal conditions of the
There is no objective novation, whether express or obligation (Art. 1291).
implied, because there is no change in the object or b. Subjective or personal novation – change of
principal conditions of the obligation. There is no the parties.
substitution of debtors, either. Compensation is i. Substituting the person of the debtor
considered as abbreviated or simplified payment (passive novation) – may be made
and since Ricardo bound himself solidarily with without the knowledge of the or against
Eduardo, any facultative compensation which the will of the latter, but not without the
occurs does not result in partial legal subrogation. consent of the creditor.
Neither Eduardo nor Ricardo is a third person a) Delegacion – the substitution is
interested in the obligation under Art. 1302. (2008 initiated by the old debtor himself
Bar Question) (delegante) by convincing another
person (delegado) to take his place and
F. NOVATION to pay his obligation to the creditor.
b) Expromission – the substitution of the
Q: What is novation? old debtor by a new debtor is upon the
initiative or proposal of a third person.
A: It is the substitution or change of an obligation ii. Subrogating a third person to the rights of
by another, resulting in its extinguishment or the creditor (active novation)
modification, either by changing the object or c. Mixed – combination of the objective and
principal conditions, or by substituting another in subjective novation.
the place of the debtor or by subrogating a third
person to the rights of the creditor. (Pineda, 2. As to form of their constitution
Obligations and Contracts, 2000 ed, p. 298 a. Express – the parties declared in
unequivocal terms that the obligation is
Q: What are the requisites of novation? extinguished by the new obligation.
b. Implied – no express declaration that the old
A: OIC -SN obligation is extinguished by the new one.
1. Valid Old obligation The old and new obligation is incompatible
2. Intent to extinguish or to modify the old on every material point. (Art. 1292)
obligation
3. Capacity and consent of all the parties to 3. As to extent of their effects
the new obligation (except in case of a. Total or extinctive – obligation is originally
expromission where the old debtor does extinguished.
not participate) b. Partial or modificatory – original obligation
4. Substantial difference of the old and new is not extinguished but merely modified.
obligation – on every point incompatible
with each other (implied novation) 4. As to their origin
5. Valid New obligation a. Legal novation – by operation of law (Art.
1300 and 1302)
Q: What are the two-fold function of novation? b. Conventional novation – by agreement of
the parties (Art. 1300 and 1301)
A:
1. It is the extinguishes the old obligation; and 5. As to presence of absence of condition
2. Creates a new obligation in lieu of the old one. a. Pure – new obligation is not subject to a
condition
Note: A void obligation cannot be novated while a b. Conditional – when the creation of the new
voidable obligation may be novated before it is
obligation is subject to a condition.
annulled. On the other hand, if a new obligation
created by the parties is void, unless there is no
novation. The original obligation subsist, unless the
Q: Is novation presumed?
parties intended that the former relation is
extinguished in any event. A: No. Novation is never presumed, it must be
proven as a fact either by:
Q: What are the kinds of novation?
210 CIVIL LAW TEAM

OBLIGATIONS
1. Explicit declaration – if it be so declared in

unequivocal terms; or A: GR: Insolvency of the new debtor (delegado),
2. Material incompatibility – that the old who has been proposed by the original debtor
and the new obligations be on every point (delegante) and accepted by the creditor
incompatible with each other. (Art. 1292) (delegatario), shall not revive the action of the
latter against the original obligor. (Art. 1295)
Q: Is creditor’s consent mandatory in the
substituting the person of the creditor? XPN: Original debtor shall be held liable:
1. Insolvency was already existing and of
A: Yes. The consent of the creditor is mandatory public knowledge, or known to the debtor
both in delegacion and expromission. (Art. 1293) It (Art. 1295);
may be express or implied from his acts but not 2. Insolvency of the new debtor was already
from his mere acceptance of payment by a third existing and known to the original debtor
party, for there is no true transfer of debt. at the time of the delegation of the debt
to the new debtor. (Art. 1295)
Note: Creditor’s consent or acceptance of the
substitution of the old debtor by a new one may be Q: What are the requisites of expromission?
given at anytime and in any form while the agreement
of the debtor subsists. (Asia Banking Corp. v. Elser, 54 A:
Phil. 994) 1. Substitution is upon the initiative or proposal
of a third person who will step into the shoes
Q: What are the requisites of delegacion? of the debtor;
2. Creditor must give his consent to the proposal
A: of the third person.
1. Substitution is upon the initiative or proposal 3. Old debtor must be released from the
of the old debtor himself by proposing to the obligation with the consent of the creditor.
creditor the entry of another (third person) as
the new debtor who will replace him in Q: In case of expromission, what is the effect in
payment of the obligation. case the new debtor is insovent or could not fulfill
2. The creditor accepts and the new debtor the obligation?
agrees to the proposal of the old debtor.
3. The old debtor is released from the obligation A: If substitution is without the knowledge or
with the consent of the creditor. against the will of the debtor, the new debtor’s
insolvency or nonfulfillment of the obligation shall
Q: What are the rights of the new debtor? not give rise to any liability on the part of the
original debtor. (Art. 1294)
A:
1. With the debtor’s consent – right of Note: If the old debtor gave his consent and the new
reimbursement and subrogation. debtor could not fulfill the obligation, the old debtor
2. Without the consent of the old debtor or should be liable for the payment of his original
against his will – right to beneficial obligation.
reimbursement.
Q: In case of delegacion, what is the effect if the

new debtor is insolvent?
211
SUMMARY
Delegacion Expromission
Person who initiated the
Old debtor Third person
substitution
It may be express or implied from his acts but not from his mere acceptance of
Consent of the creditor
payment by a third party.
With or without the knowledge of
With the consent of the old debtor
Consent of the old debtor the debtor or against the will of the
(since he initiated the substitution)
old debtor
Consent is needed but it need not be
Consent of third person Consent is needed
given simultaneously
Intention of substitution Released from the obligation with the consent of the creditor
With the debtor’s consent – right of
reimbursement and subrogation
With the debtor’s consent – right of
Rights of the new debtor
reimbursement and subrogation Without the consent of the old
debtor or against his will – right to
beneficial reimbursement
Shall not revive the action of the latter
With the debtor’s consent - If the old
against the original obligor
debtor gave his consent and the new
debtor could not fulfill the obligation,
Original debtor shall be held liable:
the old debtor should be liable for
1. Insolvency was already
the payment of his original
existing and of public
obligation.
Insolvency or nonfulfillment of the knowledge, or known to the
obligation of the new debtor debtor
Without the consent of the old
2. Insolvency of the new debtor
debtor or against his will – the new
was already existing and
debtor’s insolvency or nonfulfillment
known to the original debtor
of the obligation shall not give rise to
at the time of the delegation
any liability on the part of the
of the debt to the new
original debtor.
debtor.
Q: What is subrogation? a. Total subrogation – credits or rights of the

creditor in the transaction are totally
A: It is the active subjective novation characterized transferred to the third person.
by the transfer to a third person of all rights b. Partial subrogation – only part of the
appertaining to the creditor in the transaction credit or rights of the creditor in the
concerned including the right to proceed against transaction are transferred to the third
the guarantors or possessors of mortgages and person.
similar others subject to any applicable legal
provision or any stipulation agreed upon by the Note: A creditor, to whom partial payment
parties in conventional subrogation. has been made, may exercise his right for
the remainder and he shall be preferred to
Q: What are the kinds of subrogation? the person who has been subrogated in his
place in virtue of the partial payment of the
A: same credit. (Art. 1304)
1. As to their creation
a. Legal subrogation – constituted by virtue Q: When does legal subrogation exist?
of a law (Art. 1300; Art. 1302))
b. Voluntary or conventional subrogation – A: It is presumed that there is legal subrogation:
created by the parties by their voluntary 1. When a creditor pays another creditor
agreement (Art. 1300) who is preferred, even without the
debtor’s knowledge;
Note: Conventional subrogation of a third 2. When a third person, not interested in
person requires the consent of the original the obligation, pays with the express or
parties and of the third person. (Art. 1301) tacit approval of the debtor;
3. When, even without the knowledge of the
2. As to their extent debtor, a person interested in the
212 CIVIL LAW TEAM

OBLIGATIONS
fulfillment of the obligation pays, without and initially paid his obligations to SDIC.
prejudice to the effects of confusion as to Thereafter, Danilo wrote SDIC a letter requesting it
the latter’s share. (Art. 1302) to upgrade his Regular Diners Club Card to a
Diamond (Edition) one. As a requirement of SDIC,
Note: GR: Legal subrogation is not presumed (Art. Danilo secured from Jeanette her approval and the
1300) latter obliged. Danilo's request was granted and
he was issued a Diamond (Edition) Diners Club
XPN: in cases expressly mentioned in the law - Card. Danilo had incurred credit charged plus
Art. 1302 appropriate interest and service charge. However,
he defaulted in the payment of this obligation.
Q: Distinguish conventional subrogation from Was the upgrading a novation of the original
assignment of credit. agreement governing the use of Danilo Alto's first
credit card, as to extinguish that obligation?
A:
CONVENTIONAL ASSIGNMENT OF A: Yes. Novation, as a mode of extinguishing
SUBROGATION CREDITS OR RIGHTS obligations, may be done in two ways: by explicit
Governing law declaration, or by material incompatibility.
Art. 1300-1304 Art. 1624-1627
Effect There is no doubt that the upgrading was a
The transfer of the novation of the original agreement covering the
credit or right does not first credit card issued to Danilo Alto, basically since
It extinguishes the extinguish or modify it was committed with the intent of cancelling and
original obligation and the obligation. The replacing the said card. However, the novation did
creates a new one transferee becomes not serve to release Jeanette from her surety
the new creditor for obligations because in the surety undertaking she
the same obligation. expressly waived discharge in case of change or
Need for consent of debtor novation in the agreement governing the use of the
The consent of the first credit card.(Molino v. Security Diners
debtor id not International Corp.,G.R. No. 136780, Aug. 16, 2001)
The consent of the
necessary. Notification
debtor is necessary.
is enough for the Q: What are the effects of novation?
(Art. 1301)
validity of the
assignment. (Art. 1626) A:
Effectivity 1. Extinguishment of principal also extinguishes
Begins from the Begins from the accessory, except:
moment of notification of the a. Mortgagor, pledgor, surety or guarantor
subrogation debtor agrees to be bound by the new obligation
Curability of defect or vice (Tolentino, Civil Code of the Philippines,
The defect in the old Vol. IV, 1999 ed, p. 395)
The defect in the credit b. Stipulation made in favor of a third
obligation may be
or rights is not cured person such as stipulation pour atrui (Art.
cured such that the
by its mere assignment 1311), unless beneficiary consents to the
new obligation
to a third person novation. (Art. 1296)
becomes valid
Defense 2. If old obligation is:
Debtor cannot set up a The debtor can still set a. Void – novation is void (Art. 1298)
defense against the up the b. Voidable – novation is valid provided that
new creditor which he defense(available the annulment may be claimed only by
could have availed against the old the debtor or when ratification validates
himself of against the creditor) against the acts. (Art. 1298)
old creditor new creditor. c. If the old obligation was subject to a
suspensive or resolutory condition, the
Note: In the law of subrogation, active subjective new obligation shall be under the same
novation is stricter than passive subjective novation. In condition, unless it is otherwise
the latter, the consent of the old debtor is not even stipulated. (Art. 1299)
required in expromission. 3. If old obligation is conditional and the new
obligation is pure:
Q: SDIC issued to Danilo a Diners Card (credit card)
with Jeannete as his surety. Danilo used this card
213
a. if resolutory and it occurred – old

obligation already extinguished; no new
obligation since nothing to novate.
b. if suspensive and it did not occur – it is as
if there is no obligation; thus, there is
nothing to novate
4. If the new obligation is:

a. Void – original one shall subsist, unless
the parties intended that the former
relation should be extinguished in any
event. (Art. 1297)
b. Voidable – novation can take place,
except when such new obligation is
annulled. In such case, old obligation shall
subsist.
c. Pure obligation – conditions of old
obligation deemed attached to the new,
unless otherwise stipulated (Tolentino,
Civil Code of the Philippines, Vol. IV, 1999
ed, p. 399)
d. Conditional obligation:
i. if resolutory– valid until the
happening of the condition (Art.
1181)
ii. if suspensive and did not
materialize– no novation, old
obligation is enforced (Art. 1181)
214 CIVIL LAW TEAM

CONTRACTS
CONTRACTS 2. Stipulation pour autrui (stipulation in

favor of a third person) – benefits clearly
Q: What is a contract? and deliberately conferred by parties to a
contract upon third persons (Art. 1311)
A: A contract is a meeting of minds between two and which stipulation is merely part of a
persons whereby one binds himself, with respect to contract entered into by the parties,
the other, to give something or to render some neither of whom acted as agents of the
service. (Art. 1305) third person and which favor can be
demanded by the third person if duly
It is a meeting of the minds between two or more accepted by him before it could be
persons whereby one binds himself, with respect to revoked.
the other, or where both parties bind themselves
reciprocally in favor of one another, to fulfill a Requisites of stipulation pour atrui:
prestation to give, to do, or not to do. (Pineda, a. Stipulation in favor of a third person;
Obligations and Contracts, 2000 ed, p. 328) b. Stipulation is just part and not the
whole obligations of the contract;
Q: What is the difference between an obligation c. Contracting parties must have clearly
and a contract? and deliberately conferred a favor
upon third person;
A: While a contract is one of the sources of d. Third person must have
obligations, an obligation is the legal tie or relations communicated his acceptance; and
itself that exists after a contract has been entered e. Neither of the contracting parties
into. bears the legal representation of the
third person. (Young v. Court of
Hence, there can be no contract if there is no Appeals G.R. No. 79518, Jan. 13,
obligation. But an obligation may exist without a 1989)
contract. (De Leon, Obligations and Contracts, 2003
ed, p. 283-284) 3. Third persons coming into possession of
the object of the contract creating real
Q: State the characteristics of a contract. rights subject to the provisions of
Mortgage Law and the Land Registration
A: ROMA Law. (Art. 1312)
1. Relativity (Art. 1311) 4. Contracts entered into in fraud of
2. Obligatoriness and consensuality (Art. creditors. (Art. 1313)
1315) 5. When a third person induces a party to
3. Mutuality (Art. 1308) violate the contract. (Art. 1314)
4. Autonomy (Art. 1306)
Requisites:
RELATIVITY OF CONTRACTS a. Existence of a valid contract;
b. Third person has knowledge of such
Q: What is the principle of relativity (principle of contract;
limited effectivity) of contracts? c. Third person interferes without
justification.
A: GR: A contract is binding not only between
parties but extends to the heirs, successors in Q: Fieldmen's Insurance issued, in favor of MYT, a
interest, and assignees of the parties, provided that common carrier, accident insurance policy. 50% of
the contract involves transmissible rights by their the premium was paid by the driver. The policy
nature, or by stipulation or by provision of law. (Art. indicated that the Company will indemnify the
1311) driver of the vehicle or his representatives upon
his death. While the policy was in force, the
Note: With respect to the heir, he shall not be liable taxicab driven by Carlito, met with an accident.
beyond the value of the property he received from the Carlito died. MYT and Carlito's parents filed a
decedent. (Art. 1311) complaint against the company to collect the
proceeds of the policy. Fieldmen’s admitted the
XPNs: existence thereof, but pleaded lack of cause of
1. Rights and obligations arising from the action on the part of the parents. Decide.
contract are not transmissible by their
nature, or by the stipulation or by
provisions of law. (Art. 1311)
215
A: Yes. Carlito’s parents- who, admittedly, are his illegality, may be valid. (Borromeo v. CA,G.R. No. L-
sole heirs have a direct cause of action against the 22962, Sept. 28, 1972)
Company. This is so because pursuant to the
stipulations, the Company will also indemnify third MUTUALITY OF CONTRACTS
parties. The policy under consideration is typical of
contracts pour autrui, this character being made Q: What is the principle of mutuality of contracts?
more manifest by the fact that the deceased driver
paid 50% of the premiums. (Coquia v. Fieldmen’s A: The contract must bind both contracting parties
Insurance Co., Inc.,G.R. No. L-23276, Nov. 29, 1968) and its validity or compliance cannot be left to the
will of one of them. (Art. 1308)
OBLIGATORY FORCE OF CONTRACTS
Q: May a third person determine the performance
Q: What is the obligatory force of contracts? of a contract? Does it automatically bind the
contracting parties?
A: The parties are bound from the moment the
contracts are perfected by mere consent not only A: Yes. The determination of the performance may
from only to the fulfillment of what has been be left to a third person. However, decision shall
expressly stipulated but also to all the not be binding until it has been known to both
consequences which, according to their nature, contracting parties. (Art. 1309) Moreover, the
may be in keeping with good faith, usage and law. determination made shall not be obligatory if it is
(Art. 1315) evidently inequitable. In such case, the courts shall
decide what is equitable under the circumstances.
Note: Obligations arising from contracts have the force (Art. 1310)
of law between the contracting parties and should be
complied with in good faith. (Art. 1159) AUTONOMY OF CONTRACTS
Contracts shall be obligatory, in whatever form they Q: What is the principle of autonomy of contracts?
may have been entered into, provided all the essential
requisites for validity are present. (Art. 1356) A: It is the freedom of the parties to contract and
includes the freedom to stipulate provided the
Q: Villamor borrowed a large amount from stipulations are not contrary to law, morals, good
Borromeo, for which he mortgaged his property customs, public order or public policy. (Art. 1306)
but defaulted. Borromeo pressed him for
settlement. The latter instead offered to execute a A: The contracting parties may establish such as
promissory note containing a promise to pay his stipulations, clauses, terms and conditions as they
debt as soon as he is able, even after 10 years and may deem convenient, provided they are not
that he waives his right to prescription. What are contrary to law, morals, good customs, public order
the effects of said stipulation to the action for or public policy. (Art. 1306)
collection filed by Borromeo?
I. ESSENTIAL REQUISITES OF A CONTRACT
A: None. The rule is that a lawful promise made for
a lawful consideration is not invalid merely because Q: State the essential elements of contracts.
an unlawful promise was made at the same time
and for the same consideration. This rule applies A: COC
although the invalidity is due to violation of a 1. Consent;
statutory provision, unless the statute expressly or 2. Object or subject matter; and
by necessary implication declares the entire 3. Cause or consideration.
contract void. Thus, even with such waiver of
prescription, considering that it was the intent of CONSENT
the parties to effectuate the terms of the
promissory note, there is no legal obstacle to the Q: Define consent.
action for collection filed by Borromeo. (Borromeo
v. CA,G.R. No. L-22962, Sept. 28, 1972) A: It is the manifestation of the meeting of the offer
and the acceptance upon the thing and the cause
Note: Where an agreement founded on a legal which are to constitute the contract. (Art. 1319)
consideration contains several promises, or a promise
to do several things, and a part only of the things to be
done are illegal, the promises which can be separated,
or the promise, so far as it can be separated, from the
216 CIVIL LAW TEAM

CONTRACTS
Q: What are the elements of consent? 3. Qualified or conditional acceptance of the

offer, which becomes counter-offer.
A: LM-CR 4. Subject matter becomes illegal or impossible
1. Legal capacity of the contracting parties; before acceptance is communicated.
2. Manifestation of the conformity of the 5. Period given to the offerree to signify his
contracting parties; acceptance has already lapsed.
3. Parties’ Conformity to the object, cause,
terms and condition of the contract must Q: What is the rule on complex offer?
be intelligent, spontaneous and free from
all vices of consent; and A:
4. The conformity must be Real. 1. Offers are interrelated – contract is perfected if
all the offers are accepted
Note: We follow the theory of cognition and not the 2. Offers are not interrelated – single acceptance
theory of manifestation. Under our Civil Law, the offer of each offer results in a perfected contract
& acceptance concur only when the offeror comes to unless the offeror has made it clear that one is
know, and not when the offeree merely manifests his dependent upon the other and acceptance of
acceptance. both is necessary.
Q: What are the requisites of a valid consent? Q: What is the rule on advertisements as offers?
A: It should be: A:
1. Intelligent, or with an exact notion of the 1. Business advertisements –not a definite offer,
matter to which it refers; but mere invitation to make an offer, unless it
appears otherwise. (Art. 1325)
Note: Intelligence in consent is vitiated by 2. Advertisement for bidders – simply invitation
error; freedom by violence, intimidation or to make proposals and advertiser is not bound
undue influence; and spontaneity by fraud. to accept the highest or lowest bidder, unless
the contrary appears. (Art. 1326)
2. Free; and
3. Spontaneous.
Q: What are the requisites of a valid acceptance?
Q: What are the elements of a valid offer and
A:
acceptance?
1. Must be absolute; a qualified acceptance
constitutes a counter-offer. (Art. 1319)
A:
2. No specified form but when the offeror
1. Definite – unequivocal
specifies a particular form, such must be
2. Intentional
complied with.
3. Complete – unconditional
Note: Offer or acceptance, or both, expressed in
Q: What are the requisites of a valid offer?
electronic form, is valid, unless otherwise agreed by
the parties (electronic contracts).
A:
1. Must be certain . (Art. 1345) Q: What is the period for acceptance?
2. May be made orally or in writing, unless the
law prescribes a particular form A:
1. Stated fixed period in the offer
Note: The person making the offer may fix the time,
a. Must be made within the period given by
place and manner of acceptance, all of which must be
the offeror.
complied with. (Art. 1321)
Offer may be made orally or in writing unless the law i. As to withdrawal of the offer:
prescribes a particular form. GR: It can be made at any time before
acceptance is made, by communicating
Q: When does offer become ineffective? such withdrawal.
A: XPN: When the option is founded upon

1. Death, civil interdiction, insanity or insolvency a consideration, as something paid or
of either party before acceptance is conveyed. promised since partial payment of the
2. Express or implied revocation of the offer by purchase price is considered as proof of
the offeree. the perfection of the contract.
217
Requisites:
2. No stated fixed period 1. Mistake must be with respect to the legal
a. Offer is made to a person present – effect of the agreement;
acceptance must be made immediately. 2. It must be mutual; and
b. Offer is made to a person absent – 3. Real purpose of the parties must have
acceptance may be made within such been frustrated.
time that, under normal circumstances,
an answer can be received from him. Q: When will mistake invalidate consent?
Note: Acceptance may be revoked before it comes to A: Mistake, in order to invalidate consent, should
the knowledge of the offeror (withdrawal of offer) refer to the substance of the thing which is the
(Art. 1319) object of the contract, or to those conditions which
have principally moved one or both parties to enter
Q: Who are the persons incapacitated to give into the contract. (Leonardo v. CA, G.R. No. 125485,
consent? Sept. 13, 2004)
A: DIM Q: Leonardo is the only legitimate child of the late

1. Deaf-mutes who do not know how to spouses Tomasina and Balbino. She only finished
read and write (illiterates) Grade three and did not understand English. The
2. Insane or demented persons, unless the Sebastians, on the other hand, are illegitimate
contract was entered into during a lucid children. She filed an action to declare the nullity
interval of the extrajudicial settlement of the estate of her
3. Minors (Art. 1327) except: parents, which she was made to sign without the
a. Contracts for necessaries (Art. 1489) contents thereof, which were in English, explained
b. Contracts by guardians or legal to her. She claims that her consent was vitiated
representatives & the court having because she was deceived into signing the
jurisdiction had approved the same extrajudicial settlement. Is the extra-judicial
c. When there is active settlement of estate of Tomasina valid?
misrepresentation on the part of the
minor (minor is estopped) A: No. When one of the parties is unable to read, or
d. Contracts of deposit with the Postal if the contract is in a language not understood by
Savings Bank provided that the him, and mistake or fraud is alleged, the person
minor is over 7 years of age enforcing the contract must show that the terms
e. Upon reaching age of majority – they thereof have been fully explained to the former.
ratify the same (Art. 1332) Leonardo was not in a position to give
her free, voluntary and spontaneous consent
Q: What are the vices of consent? without having the document, which was in English,
explained to her. Therefore, the consent of
A: MIVUF Leonardo was invalidated by a substantial mistake
1. Mistake or error, rendering the agreement voidable. The
2. Intimidation extrajudicial partition between the Sebastians and
3. Violence Leonardo should be annulled and set aside on the
4. Undue influence ground of mistake. (Leonardo v. CA, G.R. No.
5. Fraud 125485, Sept. 13, 2004)
MISTAKE INTIMIDATION
Q: What kind of mistake that will be considered as Q: What are the requisites of intimidation?
a vice of consent?
A:
A: GR: Mistake as a vice of consent refers to 1. One of the parties is compelled to give his
mistake of facts and not of law. consent by a reasonable and well-
grounded fear of an evil;
XPN: When mistake of law involves mutual 2. The evil must be imminent and grave;
error as to the legal effect of an agreement 3. It must be unjust; and
when the real purpose of the parties is 4. The evil must be the determining cause
frustrated (Art. 1334) for the party upon whom it is employed in
entering into the contract. (Art. 1335)
218 CIVIL LAW TEAM

CONTRACTS
4. Financial distress (Art. 1337)

Note: To determine the degree of the intimidation, the
age, sex and condition of the person shall be borne in Note: Enumeration is not exclusive. Moral
mind. (Art. 1335) dependence, indigence, mental weakness, tender age
or other handicap are some of the circumstances to
Q: What is the effect on the validity of a contract if consider undue influence.
consent is reluctant?
FRAUD
A: A contract is valid even though one of the parties
entered into it against his wishes and desires or Q: When does fraud vitiate consent?
even against his better judgment. Contracts are also
valid even though they are entered into by one of A: There is fraud when through the insidious words
the parties without hope of advantage or profit. or machinations of one of the contracting parties,
(Martinez v. Hongkong and Shanghai Banking Corp., the other is induce to enter into a contract which,
GR No. L-5496, Feb. 19, 1910) without them, he would not have agreed to. (Art.
1338)
Q: Is a threat to enforce a valid claim an
intimidation? Note: Insidious words refers to a deceitful scheme or
plot with an evil design, or a fraudulent purpose.
A: No. A threat to enforce a just or legal claim (Pineda, Obligations and Contracts. 2000 ed. p. 414)
through a competent authority does not amount to
intimidation nor vitiate consent. (Art. 1335) Q: What are the kinds of fraud?
VIOLENCE A:
1. Fraud in the perfection of the contract
Q: What are the requisites of violence? a. Causal fraud (dolo causante)
b. Incidental fraud (dolo incidente)
A:
1. Physical force employed must be serious or 2. Fraud in the performance of an obligation (Art.
irresistible; and 1170)
2. The determining cause for the party upon
whom it is employed in entering into the Requisites:
contract. a. Fraud, insidious words or machinations
must have been employed by one of the
Q: May a contract be annulled if the violence or contracting parties;
intimidation was employed by third person? b. It must have been material and serious;
c. It induced the other party to enter into a
A: Yes. Violence or intimidation shall annul the contract;
obligation, although it may have been employed by d. It must be a deliberate intent to deceive
a third person who did not take part in the contract. or and induce;
(Art. 1336) e. Should not have been employed by both
contracting parties or by third persons;
UNDUE INFLUENCE f. The victim suffered damage or injury.
Q: When does undue influence vitiate consent? Q: Distinguish dolo causante from dolo incidente.
Q: There is undue influence when a person takes A:

improper advantage of his power over the will of DOLOCAUSANTE DOLOINCIDENTE
(ART. 1338) (ART. 1344)
another, depriving the latter of a reasonable
Refers to fraud which is Refers to fraud which is not
freedom of choice. (Art. 1337) serious in character serious in character
It is the efficient cause It is not the efficient cause
Q: What are the circumstances to be considered which induces the party to which induces the party to
for the existence of undue influence? enter into a contract enter into a contract
Renders the contract Does not affect the validity
A: voidable of the contract
1. Confidential, family, spiritual and other Contract remains valid.
relations between the parties Annulment with damages Remedy is claim for
2. Mental weakness damages.
3. Ignorance
219
Q: Santos’ lease contract was about to expire but 2. Relative – the contracting parties conceal their
it was extended and he continued to occupy the true agreement; (Art. 1345) binds the parties
leased premises beyond the extended term. to their real agreement when it does not
Samson offered to buy Santos’ store and his right prejudice third persons or is not intended for
to the lease. Santos stated that the lease contract any purpose contrary to law, morals, good
between him and the lessor was impliedly customs, public order or public policy. Art.
renewed and that formal renewal thereof would 1346) If the concealed contract is lawful, it is
be made upon the arrival of a certain Tanya absolutely enforceable, provided it has all the
Madrigal, based on the letter to him given by the essential requisites: consent, object, and
lessor. When Samson occupied the premises, he cause. (Art. 1345; Art. 1346)
was forced to vacate for Santos’ failure to renew
his lease. He filed an action for damages against As to third persons without notice, the
Santos for fraud and bad faith claiming that the apparent contract is valid for purposes
misrepresentation induced him to purchase the beneficial to them. As to third persons with
store and the leasehold right. Decide. notice of the simulation, they acquire no
better right to the simulated contract than the
A: No, Santos was not guilty of fraud nor bad faith original parties to the same.
in claiming that there was implied renewal of his
contract of lease with his lessor. The letter given by Q: Tiro is a holder of an ordinary timber license
the lessor led Santos to believe and conclude that issued by the Bureau of Forestry. He executed a
his lease contract was impliedly renewed and that deed of assignment in favor of the Javiers. At the
formal renewal thereof would be made upon the time the said deed of assignment was executed,
arrival of Tanya Madrigal. Thus, from the start, it Tiro had a pending application for an additional
was known to both parties that, insofar as the forest concession. Hence, they entered into
agreement regarding the transfer of Santos’ another agreement.
leasehold right to Samson was concerned, the
object thereof relates to a future right. It is a Afterwards, the Javiers, now acting as timber
conditional contract, the efficacy of which depends license holders by virtue of the deed of assignment
upon an expectancy the formal renewal of the lease entered into a forest consolidation agreement
contract between Santos and lessor. The efficacy of with other ordinary timber license holders. For
the contract between the parties was thus made failure of the Javiers to pay the balance due under
dependent upon the happening of this suspensive the two deeds of assignment, Tiro filed an action
condition. (Samson v. CA, G.R. No. 108245, Nov. 25, against them. Are the deeds of assignment null
1994) and void for total absence of consideration and
non-fulfillment of the conditions?
Q: What are the acts not considered fraudulent?
A: The contemporaneous and subsequent acts of
A: Tiro and the Javiers reveal that the cause stated in
1. The usual exaggerations in trade, the other the first deed of assignment is false. It is settled
party had an opportunity to know the facts; that the previous and simultaneous and subsequent
are not themselves fraudulent (Art. 1340); acts of the parties are properly cognizable indicia of
2. A mere expression of an opinion does not their true intention. Where the parties to a contract
signify fraud, unless made by an expert and have given it a practical construction by their
the other party had relied on the former’s conduct as by acts in partial performance, such
special knowledge (Art. 1341); construction may be considered by the court in
3. Misrepresentation does not vitiate consent, construing the contract, determining its meaning
unless such misrepresentation has created and ascertaining the mutual intention of the parties
substantial mistake and the same is mutual at the time of contracting. The first deed of
(Art. 1342); and assignment is a relatively simulated contract which
4. Misrepresentation made in good faith is not states a false cause or consideration, or one where
fraudulent but may constitute error (Art. 1337). the parties conceal their true agreement. A contract
with a false consideration is not null and void per
Q: What are the kinds of simulation of contract? se. Under Article 1346 of the Civil Code, a relatively
simulated contract, when it does not prejudice a
A: third person and is not intended for any purpose
1. Absolute – the contracting parties do not contrary to law, morals, good customs, public order
intend to be bound by the contract at all, thus or public policy binds the parties to their real
the contract is void. (Art. 1345; Art. 1346)
220 CIVIL LAW TEAM

CONTRACTS
agreement. (Javier v. CA, G.R. No. L-48194, Mar. 15, affect in any manner the effectivity of the contract.
1990) (Heirs of San Andres v. Rodriguez, G.R. No. 135634,
May 31, 2000)
OBJECT
CAUSE
Q: What is an object?
Q: Define cause.
A: It is the subject matter of the contract. It can be
a thing, right or service arising from a contract. A: It is the essential and impelling reason why a
party assumes an obligation. (Manresa)
Q: What are the requisites of an object?
Q: What are the requisites of a cause?
A: DELiCT
1. Determinate as to kind (even if not A: It must:
determinate, provided it is possible to 1. Exist;
determine the same without the need of 2. Be true; and
a new contract); 3. Be licit.
2. Existing or the potentiality to exist
subsequent to the contract; Q: What are the two presumptions in contracts as
3. Must be Licit; to cause?
4. Within the Commerce of man; and
5. Transmissible. A:
1. Every contract is presumed to have a cause;
Note: The most evident and fundamental requisite in and
order that a thing, right or service may be the object of 2. The cause is lawful.
a contract, it should be in existence at the moment of
the celebration of the contract, or at least, it can exist Q: What are the kinds of causes?
subsequently or in the future.
A:
Q: What are the things which can be the object of 1. Cause of onerous contracts – the prestation or
contracts? promise of a thing or service by the other.
2. Cause of remuneratory contracts– the service
A: GR: All things or services may be the object of or benefit remunerated.
contracts. 3. Cause of gratuitous contracts – the mere
liberality of the donor or benefactor.
XPNs: 4. Accessory – identical with cause of principal
1. Things outside the commerce of men (Art. contract, the loan which it derived its life and
1347); existence (e.g.: mortgage or pledge)
2. Intransmissible rights;
3. Future inheritance, except in cases Q: Distinguish cause from motive.
expressly authorized by law;
4. Services which are contrary to law, A:
morals, good customs, public order or CAUSE MOTIVE
public policy; Direct and most
5. Impossible things or services; and Indirect or remote
proximate reason of a
6. Objects which are not possible of reasons
contract
determination as to their kind. Objective and juridical Psychological or purely
reason of contract personal reason
Q: A contract of sale of a lot stipulates that the Legality or illegality of Legality or illegality of
"payment of the full consideration based on a cause affects the motive does not affect
survey shall be due and payable in 5 years from existence or validity of the existence or validity
the execution of a formal deed of sale". Is this a the contract of contract
conditional contract of sale? Cause is always the same Motive differs for each
for each contracting contracting party
A: No, it is not. The stipulation is not a condition party
which affects the efficacy of the contract of sale. It
merely provides the manner by which the full Q: What is the effect of the error of cause on
consideration is to be computed and the time contracts?
within which the same is to be paid. But it does not
221
A: a. Personal property- if value exceeds 5000,

1. Absence of cause (want of cause; there is total the donation and acceptance must both
lack or absence of cause) – Confers no right be written. (Art. 748)
and produces no legal effect. b. Real property:
2. Failure of cause - Does not render the contract i. donation must be in a public
void instrument, specifying therein the
3. Illegality of cause (the cause is contrary to law, property donated and value of
morals, good customs, public order and public charges which donee must satisfy.
policy)–Contract is null and void. ii. acceptance must be written, either
4. Falsity of cause (the cause is stated but the in the same deed of donation or in a
cause is not true) – Contract is void; unless the separate instrument.
parties show that there is another cause which iii. if acceptance is in a separate
is true and lawful. instrument, the donor shall be
5. Lesion or inadequacy of cause –Does not notified thereof in authentic form,
invalidate the contract, unless: and this step shall be noted in both
a. there is fraud, mistake, or undue instruments. (Art. 749)
influence; 2. Partnership where real property contributed:
b. when the parties intended a donation or a. there must be a public instrument
some other contract; or regarding the partnership;
c. in cases specified by law (e.g. contracts b. the inventory of the realty must be made,
entered when ward suffers lesion of more signed by the parties and attached to the
than 25%) public instrument. (Art. 1773)
3. Antichresis- the amount of the principal and
II. KINDS OF CONTRACT interest must be in writing. (Art. 2134)
4. Agency to sell real property or an interest
Q: What are the kinds of contracts? therein- authority of the agent must be in
writing. (Art. 1874)
A: 5. Stipulation to charge interest- interest must
1. Consensual contracts which are perfected by be stipulated in writing. (Art. 1956)
the mere meeting of the minds of the parties. 6. Stipulation limiting common carrier's duty of
(Art. 1305) extraordinary diligence to ordinary diligence:
2. Real contracts that require delivery for a. must be in writing, signed by shipper or
perfection –creation of real rights over owner
immovable property must be written. b. supported by valuable consideration
3. Solemn contracts– contracts which must other than the service rendered by the
appear in writing, such as: comon carrier
a. Donations of real estate or of movables if c. reasonable, just and not contrary to
the value exceeding P5,000; public policy. (Art. 1744)
b. Partnership to which immovables are 7. Chattel mortgage- personal property must be
contributed; recorded in the Chattel Mortgage Register.
c. Contract of antichresis – requires the (Art. 2140)
amount of principal and interest be
specified; III. FORM OF CONTRACTS
d. Sale of piece of land or interest therein is
through an agent; Q: What are rules on the form of contracts?
e. Stipulation to charge interest;
f. Stipulation limiting common carrier's duty A:
of extraordinary diligence to ordinary 1. Contracts shall be obligatory, in whatever form
diligence; they may have been entered into, provided all
g. Chattel mortgage; or essential requisites for their validity are
h. Transfer of large cattle (Sec. 22, Act No. present.
1147; Art. 1581); 2. Contracts must be in a certain form –when the
law requires that a contract be in some form
Q: What are the formalities required in the to be:
following contracts? a. valid;
b. enforceable; or
A: c. for the convenience of the parties.
1. Donations:
222 CIVIL LAW TEAM

CONTRACTS
3. The parties may compel each other to reduce 1. Meeting of the minds to the contract
the verbal agreement into writing. 2. True intention is not expressed in the
instrument
Note: GR: Form is not required in consensual 3. By reason of: (MARFI)
contracts. a. Mistake,
b. Accident,
XPNs: When the law requires a contract be in c. Relative simulation,
certain for its: d. Fraud, or
1. validity (formal contracts); or e. Inequitable conduct
2. enforceability (under Statute of Frauds). f. Clear and convincing proof of MARFI.
Q: What are the acts which must appear in a public Note: When there is no meeting of the minds, the
document? proper remedy is annulment and not reformation.
(Pineda, Obligations and Contracts, 2000 ed., p.471)
A:
1. Donation of real properties (Art. 719); Q: In what cases is reformation of instrument
2. Partnership where immoveable property or allowed?
real rights are contributed to the common
fund (Arts. 1171 & 1773); A:
3. Acts and contracts which have for their object 1. When a mutual mistake of the parties causes
the creation, transmission, modification or the failure of the instrument to disclose their
extinguishment of real rights over immovable agreement. (Art. 1361)
property; sales of real property or of an 2. When one party was mistaken and the other
interest therein is governed by Arts. 1403, No. acted fraudulently on inequitably in such away
2, and 1405 [Art. 1358 (1)]; that the instrument does not show their true
4. The cession, repudiation or renunciation of intention, the former may ask for the
hereditary rights or of those of the conjugal reformation of the instrument. (Art. 1362)
partnership of gains [Art. 1358 (2)] 3. When the one party was mistaken and the
5. The power to administer property or any other other knew or believed that the instrument did
power which has for its object an act not state their real agreement, but concealed
appearing or which should appear in a public that fact from the former. (Art. 1363)
document or should prejudice a third person 4. When through the ignorance, lack of skill
[Art. 1358 (3)]; negligence or bad faith on the part of the
6. The cession of actions or rights proceeding person drafting the instrument or of the clerk
from an act appearing in a public document or typist, the instrument does not express the
[Art. 1358 (4)]. true intention of the parties. (Art. 1364)
5. If the parties agree upon the mortgage or
Q: What are contracts that must be registered? pledge of real or personal property, but the
instrument states that the property is sold
A: absolutely or with a right of repurchase. (Art.
1. Chattel mortgages (Art. 2140) 1365)
2. Sale or transfer of large cattle (Cattle
Registration Act) Q: In what cases is reformation of instruments not
allowed?
REFORMATION
A:
Q: What is reformation of instruments? 1. Simple, unconditional donations inter vivos;
2. Wills;
A: It is a remedy to conform to the real intention of 3. When the agreement is void;
the parties due to mistake, fraud, inequitable 4. When an action to enforce the instrument is
conduct, accident. (Art. 1359) filed (estoppel).
Note: Reformation is based on justice and equity. Q: What is the prescriptive period in reformation
(Pineda, Obligations and Contracts, 2000 ed., p.469) of instruments?
Q: What are the requisites in reformation of A: 10 years from the date of the execution of the
instruments? instrument. (Pineda, Obligations and Contracts,
2000 ed., p.483)
A:
223
Q: Who may ask for the reformation of an Q: In case of reformation of contracts, is the
instrument? prescription period in bringing an action for
reformation run from the time the contract
A: It may be ordered at the instance of: became disadvantageous to one party?
1. if the mistake is mutual – either party or
his successors in interest; otherwise; A: In reformation of contracts, what is reformed is
2. upon petition of the injured party; or not the contract itself, but the instrument
3. his heirs and assigns. embodying the contract. It follows that whether the
contract is disadvantageous or not is irrelevant to
Note: When one of the parties has brought an action reformation and therefore, cannot be an element in
to enforce the instrument, no subsequent reformation the determination of the period for prescription of
can be asked (estoppel). (Art. 1367) the action to reform. (Pineda, Obligations and
Contracts, 2000 ed., p.469)
V. DEFECTIVE CONTRACTS
RESCISSIBLE VOIDABLE UNENFORCEABLE VOID

Defect is caused by
Defect is caused by lack of Defect is caused by lack of
injury/damage either to Defect is caused by vices
form, authority or capacity essential elements or
one of the parties or to a of consent
of both parties illegality
3rd person
Cured by prescription Cured by prescription Not cured by prescription Not cured by prescription
Binding unless the defect
Binding unless rescinded Binding until annulled is raised against Not binding
enforcement
BASIC DISTINCTIONS
BASIS RESCISSIBLE VOIDALBE UNENFORCEABLE VOID

Entered without
authority or in excess
Incapacity of one of thereof; non- Absence of any of
Economic damage or
Origin of the parties to give compliance with essential requisites of
lesion; declaration by
defect consent or vitiated Statute of Frauds; a contract (consent,
law
consent incapacity of both object, cause)
parties to give
consent
Damage/ One of parties or 3rd To other party not
Not necessary Not necessary
prejudice person necessary
Inoperative until
Valid & legally Valid & legally ratified; not
Legal effect enforceable until enforceable until enforceable in court None
judicially rescinded judicially annulled without proper
ratification
Remedy/ Rescission or Annulment of Just a personal Declaration of nullity
action rescissory action contract defense of contract
Nature of Must be a direct Indirect attack Attacked directly or
Direct action needed
action action allowed indirectly
Contracting party; Generally contracting 3rd persons cannot
Who can file Must be contracting
XPN: CRs who are party; XPN: 3rd person unless interest are
the action party
defrauded prejudiced directly affected
Susceptibility Yes, but not of
Yes Yes No
of ratification ratification proper
Action for recovery; Action for declaration
specific performance of nullity or putting of
Action for rescission Action for annulment
Susceptibility or damages prescribes defense of nullity
prescribes after 4 prescribes after 4
prescription (10 years if basis does not prescribe
years years
written contract; 6
years if unwritten)
224 CIVIL LAW TEAM

SALES
A. RESCISSIBLE CONTRACTS a. Plaintiff has no other means to maintain

reparation;
Q: What are rescissible contracts? b. Plaintiff must be able to return whatever
he may be obliged to return due to
A: Those contracts validly agreed upon but have rescission;
caused a particular economic damage or lesion c. The things must not have been passed to
either to one of the parties or to a third person and third persons in good faith;
which may be set aside even if valid. It may be set d. It must be made within 4 yrs.
aside in whole or in part, to the extent of the
damage caused. (Art. 1381) Q: What are the requisites before a contract
entered into in fraud of creditors may be
Those contracts which has all the essential rescinded?
requisites but may be set aside by reason of
damage or injury to third pesons. A:
1. There must be credit existing prior to the
Q: What are the characteristics of rescissible celebration of the contract;
contract? 2. There must be fraud, or at least, the intent to
commit fraud to the prejudice of the creditor
A: seeking rescission;
1. It has all the elements of a valid contract; 3. The creditor cannot in any legal manner collect
2. It has the defect consisting in an injury to one his credit (subsidiary character of rescission);
of the contracting parties or third person, and
generally in the form of economic damage or 4. The object of the contract must not be legally
lesion, fraud, and alienation of the property. in possession of a third person in good faith.
3. It is valid and effective until rescinded;
4. It can be attacked only directly. Q: Distinguish resolution from rescission.
5. It is susceptible of convalidation only by
prescription. (Pineda, Obligations and A:
Contracts, 2000 ed., p. 513) RESOLUTION RESCISSION
(ART. 1191) (ARTICLE 1381)
Both presuppose contracts validly entered into and subsisting
Q: Which contracts are rescissible?
and both require mutual restitution when proper
Nature
A: Principal action. retaliatory in
1. Entered into by persons exercising fiduciary Subsidiary remedy
character
capacity: Grounds for Rescission
a. Entered into by guardians whenever the 5 grounds under Art. 1381.
wards whom they represent suffer lesion Only ground is non- (lesions or fraud of creditors)
by more than ¼ of value of the property performance of obligation Non-performance is not
important
[Art. 1381(1)];
Applicability
b. Agreed upon in representation of
Applies only to reciprocal Applies to both unilateral and
absentees, if absentee suffers lesion by obligations reciprocal obligations
more than ¼ of value of property [Art.
Person who can Initiate the Action
1381(2)];
Even third persons prejudiced
c. Contracts where rescission is based on Only the injured party who is
by the contract may bring the
fraud committed on creditor and cannot a party to the contract
action
collect the claim due (accion pauliana) Fixing of Period by the Court
[Art. 1381(3)]; Court may fix a period or
d. Objects of litigation; contract entered into grant extension of time for
the fulfillment of the Court cannot grant extension
by defendant without knowledge or
obligation when there is of time
approval of litigants or judicial authority sufficient reason to justify
[Art. 1381(4)]; such extension
e. Payment by an insolvent – on debts which Purpose
are not yet due; prejudices claim of Reparation for damage or
others; (Art. 1382) injury, allowing partial
f. Provided for by law (Arts. 1526, 1534, rescission of contract
Cancellation of the contract
(Pineda, Obligations and
1538, 1539, 1542, 1556, 1560, 1567 & Contracts, 2000 ed., pp. 514-
1659) 515)
2. Payments made in state of insolvency:
225
Note: While Article 1191 uses the term “rescission,” payment to prevent unjust enrichment by Reyes at the
the original term which was used in the old Civil Code, expense of Lim. Depositing the down payment in court
from which the article was based, was “resolution.” ensure its restitution to its rightful owner. Lim, on the
(Ong v. CA, G.R. No. 97347, July 6, 1999) other hand, has nothing to refund, as he has not
received anything under the contract to sell. (Reyes v.
Q: What is the obligation created by the rescission Lim, Keng and Harrison Lumber, Inc., G.R. No. 134241,
of the contract? Aug. 11, 2003)
A: Mutual restitution of things which are the Q: What are the badges of fraud attending sales,
objects of the contract and their fruits and of the as determined by the courts?
price with interest.
A:
Q: When is mutual restitution not applicable? 1. Consideration of the conveyance is inadequate
or fictitious;
A: 2. Transfer was made by a debtor after a suit has
1. Creditor did not receive anything from been begun and while it is pending against him
contract; or 3. Sale upon credit by an insolvent debtor;
2. Thing already in possession of third persons in 4. The presence of evidence of large
good faith; subject to indemnity only, if there indebtedness or complete insolvency of the
are two or more alienations – liability of first debtor;
infractor. 5. Transfer of all his property by a debtor when
he is financially embarrassed or insolvent;
Note: Rescission is possible only when the person 6. Transfer is made between father and son,
demanding rescission can return whatever he may be where there are present some or any of the
obliged to restore. A court of equity will not rescind a above circumstances; and
contract unless there is restitution, that is, the parties 7. Failure of the vendee to take exclusive
are restored to the status quo ante. (Article 1385) possession of the property. (Oria v.
McMicking, 21 Phil. 243)
Q: Reyes (seller) and Lim (buyer) entered into a
contract to sell of a parcel of land. Harrison Q: What are the characteristics of the right to
Lumber occupied the property as lessee. Reyes rescind?
offered to return the P10 million downpayment to
Lim because Reyes was having problems in A:
removing the lessee from the property. Lim 1. Can be demanded only if plaintiff is ready,
rejected Reyes’ offer. Lim learned that Reyes had willing and able to comply with his own
already sold the property to another. obligation and defendant is not;
2. Not absolute;
Trial court, in this case, directed Reyes to deposit 3. Needs judicial approval in the absence of a
the P10 million downpayment with the clerk of stipulation allowing for extra-judicial
court but Reyes refused. Does Reyes have the rescission, in cases of non-reciprocal
obligation to deposit the P10 million obligations;
downpayment in the court? 4. Subject to judicial review if availed of extra-
judicially;
A: Yes. There is also no plausible or justifiable 5. May be waived expressly or impliedly; and
reason for Reyes to object to the deposit of the P10 6. Implied to exist in reciprocal obligations
million down payment in court. The contract to sell therefore need not be expressly stipulated
can no longer be enforced because Reyes himself upon.
subsequently sold the property. Both Lim and Reyes
are seeking for rescission of the contract. Q: May an injured party avail of both fulfillment
and rescission as remedy?
By seeking rescission, a seller necessarily offers to
return what he has received from the buyer. Such a A: GR: The injured party can only choose between
seller may not take back his offer if the court deems fulfillment and rescission of the obligation, and
it equitable, to prevent unjust enrichment and cannot have both.
ensure restitution, to put the money in judicial
deposit. XPN: If fulfillment has become impossible,
Article 1191 allows the injured party to seek
Note: In this case, it was just, equitable and proper for rescission even after he has chosen fulfillment.
the trial court to order the deposit of the down
226 CIVIL LAW TEAM

SALES
(Ayson-Simon v. Adamos,G.R. No. L-39378, A: No. The agreement of the parties in this case
Aug. 28 1984) may be set aside, but not because of a breach on
the part of Ong for failure to complete payment of
Q: Vermen and Seneca entered into an "offsetting the purchase price. Rather, his failure to do so
agreement", where Seneca is obliged to deliver brought about a situation which prevented the
construction materials to Vermen, who is obliged obligation of the spouses to convey title from
to pay Seneca and to deliver possession of 2 acquiring an obligatory force.
condominium units to Seneca upon its completion.
Seneca filed a complaint for rescission of the The agreement of purchase and sale shows that it is
offsetting against Vermen alleging that the latter in the nature of a contract to sell. Ong’s failure to
had stopped issuing purchase orders of complete payment of the purchase price is a non-
construction materials without valid reason, thus fulfillment of the condition of full payment which
resulting in the stoppage of deliveries of rendered the contract to sell ineffective and
construction materials on its part, in violation of without force and effect. The breach contemplated
the Offsetting Agreement. Can the agreement be in Article 1191 is the obligor’s failure to comply with
rescinded? an obligation. In this case, Ong’s failure to pay is not
even a breach but merely an event which prevents
A: Yes, because the provisions of the offsetting the vendor’s obligation to convey title from
agreement are reciprocal in nature. Article 1191 of acquiring binding force.
the Civil Code provides the remedy of rescission
(more appropriately, the term is "resolution") in Note: In a contract to sell, the payment of the
case of reciprocal obligations, where one of the purchase price is a positive suspensive condition, the
obligors fails to comply with that is incumbent upon failure of which is not a breach, casual or serious, but a
him. situation that prevents the obligation of the vendor to
convey title from acquiring an obligatory force.
The question of whether a breach of contract is (Ongv.CA, G.R. No. 97347, July 6, 1999)
substantial depends upon the attendant
circumstances. Seneca did not fail to fulfill its Q: Goldenrod offered to buy a mortgaged property
obligation in the offsetting agreement. The owned by Barreto Realty to which it paid an
discontinuance of delivery of construction materials earnest money amounting to P1 million. It was
to Vermen stemmed from the failure of Vermen to agreed upon that Goldenrod would pay the
send purchase orders to Seneca. Vermen would outstanding obligations of Barreto Realty with
never have been able to fulfill its obligation in UCPB. However, Goldenrod did not pay UCPB
allowing Seneca to exercise the option to transfer because of the banks denial of its request for the
from Phase I to Phase II, as the construction of extension to pay the obligation. Thereafter,
Phase II has ceased and the subject condominium Goldenrod, through its brocker, informed Barreto
units will never be available. The impossibility of Realty that it could not go through with the
fulfillment of the obligation on the part of Vermen purchase of the property and also demanded the
necessitates resolution of the contract, for indeed, refund of the earnest money it paid. In the
the non-fulfillment of the obligation absence of a specific stipulation, may the seller of
aforementioned constitutes substantial breach of real estate unilaterally rescind the contract and as
the agreement. (Vermen Realty Development Corp. a consequence keep the earnest money to answer
v. CA and Seneca Hardware Co., Inc., G.R. No. for damages in the event the sale fails due to the
101762, July 6, 1993) fault of the prospective buyer?
Q: Ong and spouses Robles executed an A: No. Goldenrod and Barretto Realty did not
"agreement of purchase and sale" of 2 parcels of intend that the earnest money or advance payment
land. Pursuant to the contract they executed, Ong would be forfeited when the buyer should fail to
partially paid the spouses the by depositing it with pay the balance of the price, especially in the
the bank. Subsequently, Ong deposited sums of absence of a clear and express agreement thereon.
money with the BPI in accordance with their
stipulation that Ong pay the loan of the spouse Moreover, Goldenrod resorted to extrajudicial
with BPI. To answer for Ong’s balance, he issued 4 rescission of its agreement with Barretto Realty.
post-dated checks which were dishonored. Ong Under Article 1385, rescission creates the obligation
failed to replace the checks and to pay the loan in to return the things which were the object of the
full. Can the contract entered into by Ong and the contract together with their fruits and interest.
spouses be rescinded? Therefore, by virtue of the extrajudicial rescission of
the contract to sell by Goldenrod without
opposition from Barretto Realty, which in turn, sold
227
the property to other persons, Barretto Realty, had b. violence, intimidation or undue influence
the obligation to return the earnest money which ends; or
formed part of the purchase price plus legal interest c. mistake or fraud is discovered (Art. 1391)
from the date it received notice of rescission. It
would be most inequitable if Barretto Realty would Note: If the action has prescribed the
be allowed to retain the money at the same time contract can no longer be set aside.
appropriate the proceeds of the second sale made (Villanueva v. Villanueva, 91 Phil 43)
to another. (Goldenrod, Inc. v. CA, G.R. No. 126812,
Nov. 24, 1998) 2. Ratification–cleanses the contract of its
defects from the moment it was constituted.
What is the prescriptive period of action for (Art. 1396) It extinguishes the action to annul a
rescission? voidable contract. (Art. 1392)
A: 3. By loss of the thing which is the object of the

1. Under Art. 1381, no.1 – within 4 years from the contract through fraud or fault of the person
time the termination of the incapacity of the who is entitled to annul the contract. (Art.
ward; 1401)
2. Under Art. 1381, no. 2- within 4 years from the
time the domicile of the absentee is known; or Note: If the right of action is based upon the incapacity
3. Under Art. 1381, nos. 3 & 4 & Art. 1382 – of any one of the contracting parties, the loss of the
within 4 years from the time of the discovery thing shall not be an obstacle to the success of the
of fraud. action, unless said took place through the fraud or
fault of the plaintiff. (Art. 1401)
B. VOIDABLE CONTRACTS
Q: Who may institute action for annulment?
Q: What are voidable contracts?
A: By all who are thereby obliged principally or
subsidiarily.
A: Voidable contracts are those where consent is
vitiated either by the incapacity of one of the
Note: He who has capacity to contract may not invoke
contracting parties or by mistake, violence, the incapacity of the party with whom he has
intimidation, undue influence or fraud. These contracted nor can those who exerted intimidation,
contracts are binding, unless they are annulled by a violence or undue influence or employed fraud or
proper action in court. It is susceptible of caused mistake base their action upon these flaws of
ratification. (Art. 1390) the contract.
Note: Annulment may be had even if there be no Q: What are the effects of annulment?
damage to the contracting parties.
A:
Q: What are the characteristics of a voidable 1. If contract not yet consummated – parties shall
contract? be released from the obligations arising
therefrom.
A: 2. If contract has already been consummated –
1. Effective until set aside; rules provided in Arts. 1398-1402, shall govern.
2. May be assailed or attacked only in an action a. Restitution
for that purpose; GR: Mutual restitution. – the contracting
3. Can be confirmed; and parties shall restore to each other things
4. Can be assailed only by the party whose which have been the subject matter of
consent was defective or his heirs or assigns. the contract, with their fruits and the
price with its interest except in case
Q: What are the causes of extinction of action to provided by law. In an obligation to
annul? render services, the value thereof shall be
the basis for damages. (Art. 1398)
A:
1. Prescription – the action for annulment must XPN: No restitution. – the incapacity of
be commenced within 4 years from the time one of the parties, the incapacitated
the: person is not obliged to make any
a. incapacity ends; guardianship ceases; restitution except insofar as he has
228 CIVIL LAW TEAM

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been benefited by the thing or the Q: Who may ask for ratification of contract
price received by him. (Art. 1399) entered into by the incapacitated person?
b. Whenever the person obliged by the A: Ratification may be effected by the guardian of
decree of annulment to return the thing the incapacitated person. (Art. 1394)
cannot do so because it has been lost
through his fault, he shall return the fruits Note: Art. 1394 does not refer to a rescissible contract
received and the value of the thing at the entered into by the guardian in behalf of his ward.
time of the loss, with interest from the
same date. (Art. 1400) Q: Does retroactivity apply in ratification of
contracts?
Q: What is confirmation?
A: GR: Yes. Ratification cleanses the contract from
A: It is an act by which a voidable contract is cured all its defects from the moment it was constituted.
of its vice or defect. (Luna v. Linatoc, 74 Phil. 15) (Art. 1396)
Q: What is recognition? XPN: NO. Rights of innocent third person must

not be prejudiced.
A: It is an act whereby a defect of proof is cured
Note: Ratification does not require the conformity of
such as when an oral contract is put into writing or
the contracting party who has no right to bring the
when a private instrument is converted into a
action for annulment.
public instrument. (Luna v. Linatoc, 74 Phil. 15)
Q: Distinguish voidable contract from rescissible
Q: What is ratification?
contract.
A: It is the act or means by virtue of which efficacy
A:
is given to a contract which suffers from a vice of
VOIDABLE RESCISSIBLE
curable nullity. (Manresa)
Defect is intrinsic. Defect is external
It consist damage or
Q: What are the requisites of ratification? prejudice suffered by
It vitiates consent.
one of the contracting
A: parties or a third person.
1. It is a voidable contract; No damage or prejudice,
2. Person ratifying must know the reason for the Damage is immaterial. contract cannot be
contract being voidable; rescissible.
3. Cause must not exist or continue to exist Rescissibility of the
Annulability of the
anymore at the time of ratification; contract is based on
contract is based on law.
4. It must be made expressly or by an act equity.
implying a waiver of the action to annul; and Public interest Private interest
5. The person ratifying it must be the injured predominates. predominates.
party. Susceptible of Not susceptible of
ratification. ratification.
Q: What are the kinds of ratification? It is not a sanction but a
It is a sanction.
remedy.
A: Only parties to the Third persons who are
1. Express –the desire of the innocent party to contract can assail it. affected m
convalidate the contract, or his waiver or It is a subsidiary action.
renunciation of his right to annul the contract (Pineda, Obligations
It is a principal action.
is clearly manifested verbally or formally in and Contracts, 2000
writing. (Pineda, Obligations and Contracts, ed., p. 546)
2000 ed. p. 552)
2. Implied (tacit) – it is the knowledge of the C. UNENFORCEABLE CONTRACTS
reason which renders the contract voidable
and such reason having ceased, the person Q: What are unenforceable contract?
who has a right to invoke it should execute an
act which necessarily implies an intention to A: Those contracts which cannot be enforced by
waive his right. (Art. 1393) action or complaint, unless they have been ratified
by the party or parties who did not give consent.
229
Q: What are the kinds of unenforceable contracts? Q: What are the contracts or agreements covered
by the Statute of Frauds?
A: The following contracts are unenforceable unless
they are ratified: A:
1. Those entered into the name of another 1. An agreement that by its terms is not to be
person by one who has been given no performed within a year from the making
authority or legal representation or who thereof;
acted beyond his powers; 2. A special promise to answer for the debt,
2. Those that do not comply with the default or miscarriage of another;
Statute of Frauds; and 3. An agreement made in consideration of
3. Those where both parties are incapable of marriage, other than a mutual promise to
giving consent to a contract. (Art. 1403) marry;
4. An agreement for the sale of goods, chattels or
Q: What are the characteristics of unenforceable things in action, at a price not less than 500
contract? pesos, unless the buyer accepts and receives
part of such goods and chattels, or the
A: evidences, or some of them, of such things in
1. It cannot be enforced by a proper action in action, or pay at the time some part of the
court; purchase money; but when a sale is made by
2. It may be ratified; an auction and entry is made by the
3. it cannot be assailed by third person. auctioneer in his sales book, at the time of the
sale, of the amount and kind of property sold,
Q: What is Statute of Frauds? terms of sale, price, names of the purchasers
and person on whose account the sale is
A: The Statute of Frauds [Article 1403, (2)] requires made, it is a sufficient memorandum;
certain contracts enumerated therein to be 5. An agreement for the leasing for a longer
evidenced by some note or memorandum in order period than one year, or for the sale of real
to be enforceable. The term "Statute of Frauds" is property or of an interest therein;
descriptive of statutes which require certain classes 6. A representation as to the credit of a third
of contracts to be in writing. The Statute does not person. (Art. 1403)
deprive the parties of the right to contract with
respect to the matters therein involved, but merely Note: Enumeration is exclusive.
regulates the formalities of the contract necessary
to render it enforceable. Evidence of the agreement Q: What are the fundamental principles governing
cannot be received without the writing or a Statute of Frauds?
secondary evidence of its contents. (Swedish
Match, AB v. CA, G.R. No. 128120, Oct. 20, 2004) A:
1. It only applies to executor contracts and not
Note: The Statute of Frauds applies only to executory partially or completely executed.
contracts, not to those that are partially or completely 2. It cannot apply if the action is neither for
fulfilled. Where a contract of sale is alleged to be damages because violation of an agreement
consummated, it matters not that neither the receipt nor for the specific performance of said
for the consideration nor the sale itself was in writing. agreement.
Oral evidence of the alleged consummated sale is not 3. It is exclusive as it applies only to the
forbidden by the Statute of Frauds and may not be agreements or contracts enumerated in Art.
excluded in court. (Victoriano v. CA, G.R. No. 87550, 1403.
Feb. 11, 1991)
4. The defense of Statute of Frauds may be
waived
Q: What is the purpose of the Statute of Frauds?
5. It is a personal defense, it cannot be assailed
by third persons.
A: It is to prevent fraud and perjury in the
6. Contracts infringing the Statute of Frauds are
enforcement of obligations depending for their
not void; they are merely unenforceable.
evidence on the unassisted memory of witnesses,
7. It is a Rule of Exclusion as it excludes oral
by requiring certain enumerated contracts and
testimony.
transactions to be evidenced by a writing signed by
8. It does not determine the credibility or weight
the party to be charged. (Swedish Match, AB v. CA,
of evidence. It merely concerns itself with the
G.R. No. 128120, Oct. 20, 2004)
admissibility.
230 CIVIL LAW TEAM

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9. It does not apply if the claimed that the

contract does not express the true agreement 2. Contracts infringing the Statute of Frauds are
of the parties. (Paras, Civil Code of the ratified:
Philippines Annotated, Vol. IV, 2008 ed., a. by failure to object to the representation
pp.790-791) of oral evidence to prove the same; or
b. by the acceptance of benefits under
Q: Cenido, as an heir of Aparato and claiming to be them. (Art. 1317)
the owner of a house and lot, filed a complaint for
ejectment against spouses Apacionado. On the 3. In a contract where both parties are incapable
other hand, spouses Apacionado allege that they of giving consent, express or implied
are the owners which are unregistered purchased ratification by the parents or guardian, as the
by them from its previous owner, Aparato. Their case may be, of one of the contracting parties
claim is anchored on a 1-page typewritten shall give the contract the same effect as if
document entitled "Pagpapatunay," executed by only one of them is incapacitated.
Aparato. Is the “Pagpapatunay” entered into by
Bonifacio and spouse Apacionado valid and If the ratification is made by the parents or
enforceable? guardians as the case may be, of both
contracting parties, the contract shall be
A: It is valid but unenforceable. Generally, contracts validated from the inception.
are obligatory, in whatever form such contracts
may have been entered into, provided all the Q: What are the two ways of ratifying contracts
essential requisites for their validity are present. which infringe the Statute of Frauds?
When, however, the law requires that a contract be
in some form for it to be valid or enforceable, that A:
requirement must be complied with. 1. Failure to object during the trial to the
admissibility of parol evidence to support a
The sale of real property should be in writing and contract covered by the Statute of Frauds.
subscribed by the party charged for it to be 2. Acceptance of benefits – when the contract
enforceable. The "Pagpapatunay" is in writing and has been partly executed because estoppel
subscribed by Aparato, hence, it is enforceable sets in by accepting performance.
under the Statute of Frauds. Not having been
subscribed and sworn to before a notary public, D. VOID CONTRACTS
however, the "Pagpapatunay" is not a public
document, and therefore does not comply with par. Q: What are void contracts?
1, Art. 1358.
A: Void contracts are those which have no force
Moreover, the requirement of a public document in and effect from the beginning and which cannot be
Article 1358 is not for the validity of the instrument ratified or validated by lapse of time. (Pineda,
but for its efficacy. Although a conveyance of land is Obligations and Contracts, 2000 ed., p. 598)
not made in a public document, it does not affect
the validity of such conveyance. The private Q: What are the kinds of void contracts?
conveyance of the house and lot is therefore valid
between Aparato and the spouses. A:
(Cenidov.Spouses Apacionado, G.R. No. 132474, 1. Those lacking in essential elements:
Nov. 19, 1999) a. Those whose cause, object or purpose is
contrary to law, morals, good customs,
Q: When is ratification of an unenforceable public order or public policy: illicit cause,
contract available? or object.
b. Those which are absolutely simulated or
A: fictitious: no cause
1. A contract entered into in the name of another c. Those whose cause or object did not exist
by one who has no authority or legal at the time of the transaction: no cause
representation or who acted beyond his or object
powers shall be unenforceable, unless it is d. Those whose object is outside the
ratified expressly or impliedly, by the person commerce of man: no object
on whose behalf it has been executed, before e. Those which contemplate an impossible
it is revoked by the other contracting party. service: no object
(Art. 1317)
231
f. Those where the intention of parties the transaction questioned. Hence, the lack of
relative to principal object of the contract consent on her part will not make the husband’s
cannot be ascertained alienation or encumbrance of real property of the
2. Contracts prohibited by law conjugal partnership void, but merely voidable.
a. Pactum commisorium – the creditor (Villarandav. Villaranda, G.R. No. 153447, Feb. 23,
appropriates to himself the things given 2004)
by way of pledge or mortgage to fulfill the
debt Q: Judie sold one-half of their lot to Guiang under
b. Pactum de non alienando – an agreement a deed of transfer of rights without the consent
prohibiting the owner from alienating the and over the objection of his wife, Gilda and just
mortgaged immovable after the latter left for abroad. When Gilda
c. Pactum leonina – a stipulation in a returned home and found that only her son, Junie,
partnership agreement which excludes was staying in their house. She then gathered her
one or more partners from any share in other children, Joji and Harriet and went to stay in
the profits or losses their house. For staying in their alleged property,
3. Illegal or illicit contracts(e.g. contract to sell the spouses Guiang complained before the
marijuana) barangay authorities for trespassing.
Q: Cite some characteristics of void contracts. Is the deed of transfer of rights executed by Judie
Corpuz and the spouses Guiang void or voidable?
A:
1. It cannot be ratified. (Art. 1409) A: It is void. Gilda’s consent to the contract of sale
2. The right to set up the defense of illegality of their conjugal property was totally inexistent or
cannot be waived. (Art. 1409) absent. Thus, said contract properly falls within the
3. The action or defense for the declaration of ambit of Article 124 of the FC.
the inexistence of a contract does not
prescribe. (Art. 1410) The particular provision in the old Civil Code which
4. The defense of illegality of contracts is not provides a remedy for the wife within 10 years
available to third persons whose interests are during the marriage to annul the encumbrance
not directly affected. (Art. 1421) made by the husband was not carried over to the
5. A contract which is the direct result of a Family Code. It is thus clear that any alienation or
previous illegal contract is also void and encumbrance made after the Family Code took
inexistent. (Art. 1422) effect by the husband of the conjugal partnership
property without the consent of the wife is null and
Q: On July 6, 1976, Honorio and Vicente executed void. (Spouses Guiangv.CA, G.R. No. 125172, June
a deed of exchange. Under this instrument, 26, 1998)
Vicente agreed to convey his 64.22-square-meter
lot to Honorio, in exchange for a 500-square-meter Q: Distinguish void contract from voidable
property. The contract was entered into without contract.
the consent of Honorio’s wife. Is the deed of
exchange null and void? A:
VOID VOIDABLE
A: The deed is valid until and unless annulled. The Consent is vitiated or
Absence of essential
deed was entered into on July 6, 1976, while the there is incapacity to
element/s of a contract
Family Code took effect only on August 3, 1998. give consent
Laws should be applied prospectively only, unless a No effect even if not set Valid contract until set
legislative intent to give them retroactive effect is aside aside
expressly declared or is necessarily implied from Cannot be ratified Can be ratified
the language used. Hence, the provisions of the Nullity can be set up
Civil Code, not the Family Code are applicable. against any person
Nullity can be set up
According to Article 166 of the Civil Code, the asserting right arising
only against a party
husband cannot alienate or encumber any real from it, and his
thereto
successors in interest
property of the conjugal partnership without the
not protected by law
wife’s consent. This provision, however, must be
Action to annul contract
read in conjunction with Article 173 of the same
prescribes in 4 years
Code. The latter states that an action to annul an Action to declare nullity
(Pineda, Obligations and
alienation or encumbrance may be instituted by the does not prescribe
Contracts, 2000 ed, p.
wife during the marriage and within ten years from 606)
232 CIVIL LAW TEAM

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Defense may be availed Defense may be invoked

of by anybody, whether only by the parties V. EFFECT OF CONTRACTS
he is a party to the (those principally and
contract or not as long subsidiarily liable) or Q: Between whom do contracts take effect?
as his interest is directly their successors in
affected. (Art. 1421) interest and privies A: Contracts take effect only between the parties,
and their assigns and heirs, the latter being liable
Q: Distinguish void contract from rescissible only to the extent of the property received from the
contract. decedent. (Art. 1311)
A: Q: What are the instances when the heirs may be

VOID RESCISSIBLE liable for the obligation contracted by the
Defect is in its effects, decedent?
Defect is inherent in the
either against one of the
contract itself
parties or a third person A: When the rights and obligations arising from the
Based on equity and contract are transmissible:
Nullity is a matter of law
matter of private
and public interest 1. By their nature; or
interest
2. By stipulation; or
No legal effects even if Produces legal effects
3. By provision of law. (Art. 1311)
no action is filed to set it and remains valid if no
aside action is filed
Action to rescind Q: What are the requisites in order that a third
prescribes within 4 years person may demand the fulfillment of the
Action to declare its contract?
(Art. 1389; Pineda,
nullity does not
Obligations and
prescribe (Art. 1410) A:
Contracts, 2000 ed, p.
605) 1. The contracting parties must have clearly and
deliberately conferred a favor upon the third
Q: Distinguish void contract from unenforceable person;
contract. 2. The third person’s interest or benefit in such
fulfillment must not be merely incidental; and
A: 3. Such third person communicated his
VOID UNENFORCEABLE acceptance to the obligor before the
There is contract but stipulations in his favor are revoke. (Art. 1311)
No contract at all. which cannot be
enforced. SALES
It is not subject to It is subject to
ratification. ratification.
Q: What is a sale?
It can be easily assailed
It cannot be assailed by
by third persons whose
third persons. A: Sale is a contract where one party (seller)
interests are directly
obligates himself to transfer the ownership of and
affected.
to deliver a determinate thing, while the other
party (buyer) obligates himself to pay for said thing
Q: Distinguish void contract from inexistent
a price certain in money or its equivalent.
contract.
(Tolentino, p.1, 2000 ed.)
A:
I. INTRODUCTION
VOID CONTRACT INEXISTENT CONTRACT
Those where all the
requisites of a contract
A. DEFINITION OF THE CONTRACT OF SALE
are present, but the
cause, object or purpose Those where one or some Q: What is a contract of sale?
is contrary to law, morals, of the requisites which
good customs, public are essential for validity A: By the contract of sale, one of the contracting
order or public policy or are absolutely lacking parties obligates himself to transfer the ownership
the contract itself is of and to deliver a determinate thing, and the other
prohibited or declared to pay therefor a price certain in money or its
prohibited. equivalent. (Art. 1458, NCC)
Principle of in pari delicto Principle of in pari delicto
is applicable. Is not applicable.
233
Note: Gross inadequacy of price does not affect a Q: When is a sale absolute?
contract of sale, except as it may indicate a defect in
the consent, or that the parties really intended a
donation or some other act or contract. (Art. 1470) A: A sale is absolute when no condition is imposed
and ownership passes to the vendee upon delivery
KINDS OF SALES of the thing subject of the sale.
Q: What are the different kinds of sales? Q: When is a deed of sale considered absolute in
nature?
A: As to:
1. Nature of the subject matter: A: A deed of sale is considered absolute in nature
a. Sale of real property; where there is neither a stipulation in the deed that
b. Sale of personal property title to the property sold is reserved in the seller
2. Value of the things exchanged: until the full payment of the price, nor one giving
a. Commutative sale; the vendor the right to unilaterally resolve the
b. Aleatory sale contract the moment the buyer fails to pay within a
3. Whether the object is tangible or fixed period.
intangible:
a. Sale of property (tangible or CONDITIONAL SALE
corporeal);
Q: When is a sale conditional?
Note: A tangible object is also called
chose in possession A: It is conditional where the sale contemplates a
contingency, and in general, where the contract is
b. Sale of a right (assignment of a right, subject to certain conditions, usually in the case of
or a credit or other intangibles such the vendee, the full payment of the agreed
as copyright, trademark, or good purchase price and in the case of the vendor, the
will); fulfillment of certain warranties. (De Leon, p. 15)
Note: An intangible object is a chose Q: Distinguish a conditional sale from an absolute

in action. sale
4. Validity or defect of the transaction: A:

a. Valid CONDITIONAL SALE ABSOLUTE SALE
b. Rescissible One where the title to the
One where the seller is
c. Voidable property is not reserved
granted the right to
d. Unenforceable to the seller or if the seller
unilaterally rescind the
e. Void is not granted the right to
contract predicated on
5. Legality of the object: rescind the contract
the fulfillment or non-
based on the fulfillment
a. Licit object fulfillment, as the case
or non-fulfillment, as the
b. Illicit object may be, of the prescribed
case may be, of the
6. Presence or absence of conditions: condition.
prescribed condition.
a. Absolute Contracts, first the
b. Conditional contract to sell (which is
7. Wholesale or retail: conditional or preparatory
a. Wholesale Contract executed sale) and second, the final
b. Retail between the seller and deed of sale or the
8. Proximate inducement for the sale: the buyer principal contract which is
a. Sale by description executed after full
b. Sale by sample payment of the purchase
c. Sale by description and sample price
9. When the price is tendered:
a. Cash sale Q: What is the effect of the non-performance of
b. Sale on installment plan the condition or if the condition did not take
place?
AS TO PRESENCEOR ABSENCE OF CONDITION
A: Where the obligation of either party to a
ABSOLUTE SALE contract of sale is subject to any condition which is
234 CIVIL LAW TEAM

SALES
not performed, such party may refuse to proceed seller had. He cannot give what he does not have—
with the contract or he may waive performance of nemo dat quod non habet. A stream cannot rise
the condition. Unlike in a non-fulfillment of a higher than its source.
warranty which would constitute a breach of the
contract, the non-happening of the condition, XPNS:
although it may extinguish the obligation upon a) When the owner of the goods is, by his
which it is based, generally does not amount to a conduct, precluded from denying the
breach of a contract of sale. seller’s authority to sell. (Art. 1505)
b)
Q: In a sale with assumption of mortgage, is the 1) Factors’ acts, recording laws, or any
assumption of mortgage a condition without other provision of law enabling the
which there will be no perfected contract of sale? apparent owner of the goods to
dispose them as if he were the true
A: Yes. In sales with assumption of mortgage, the owner;
assumption of mortgage is a condition to the 2) Sales made under the order of a court
seller’s consent so that without approval by the of competent jurisdiction;
mortgagee, no sale is perfected (Ramos v. Court of 3) Sales made pursuant to a special law;
Appeals, G.R. No. 108294 Sept. 15, 1997) 4) Purchases made in a merchant’s store
or fairs or markets. (Art. 1505)
Q: When is a conditional sale considered an
absolute sale? FORMALITIES REQUIRED
A: A deed of sale is absolute in nature although Q: Is there a formal requirement for the validity of
denominated a “conditional sale” absent such a contract of sale?
stipulations reserving title to the vendor until full
payment of the purchase price, nor any stipulation A: GR: None. A contract of sale may be made in
giving them the right to unilaterally rescind the writing, or by word of mouth, or partly in writing
contract in case of non-payment. and partly by word of mouth, or may be inferred
from the conduct of the parties. (Art. 1483)
B. ESSENTIAL REQUISITES Contracts shall be obligatory, in whatever form they
OF A CONTRACT OF SALE have been entered into, provided all the essential
requisites for their validity are present.
Q: What are the elements of a contract of sale?
XPNS:
A: ANE
1. Accidental elements – dependent on a) If the law requires a document or other special
parties’ stipulations; Examples: form, the contracting parties may compel each
a. Conditions other to observe that form. (Art. 1357)
b. Interest b) Under Statute of Frauds, the following contracts
c. time & place of payment must be in writing; otherwise, they shall be
d. penalty unenforceable:
2. Natural elements – those that are 1. Sale of personal property at a price not
inherent even in absence of contrary less than P500;
provision. 2. Sale of a real property or an interest
E.g. warranties therein;
3. Essential elements – for validity: 3. Sale of property not to be performed
a. Consent within a year from the date thereof;
b. Determinate subject matter 4. When an applicable statute requires that
c. Consideration the contract of sale be in a certain form.
(Art. 1403, par.2)
Q: What is the effect and/or consequence of the
absence of consent of the owner in a contract of Note: Statute of Frauds applies only to executory
sale of said property? contracts but not to partially executed contracts.
(Pineda, p.81)
A: GR: The contract of sale is void. One of the
essential requirements of a valid contract of sale is Q: Are there instances where the Statute of Frauds
the consent of the owner of the property. The is not essential for the validity of a contract of
buyer acquires no better title to the goods than the sale?
235
A: Yes. otherwise, liable for damages

1. When there is a note or memorandum in
With a Extinguished by happening/ non-
writing and subscribed to by the party or
condition happening of condition
his agent (contains essential terms of the
contract); without Continues to be valid depending upon
2. When there has been partial period/ circumstances of time, place and
performance/execution (seller delivers condition person
with the intent to transfer title/receives
With a
price); counter- Original offer is extinguished
3. When there has been failure to object to offer
presentation of evidence aliunde as to the
existence of a contract without being in B. OPTION CONTRACT
writing and which is covered by the
Statute of Frauds; Q: What is an option contract?
4. When sales are effected through
electronic commerce. (Villanueva, p. 192) A: It is a contract by which the owner of the
property agrees with another person that he shall
Note: Rules on forms, and of validity and enforceability
have the right to buy his property at a fixed price
of contracts of sale, are strictly kept within the
within a certain time. It is a separate and distinct
contractual relationship of the seller and buyer
contract and not a contract of sale. It merely
pursuant to the characteristic of relativity of every
contract, and do not necessarily apply to third parties secures the privilege to buy or sell.
whose rights may be affected by the terms of a sale.
Q: What is the nature of an option contract?
C. STAGES OF A CONTRACT OF SALE
A: It is a preparatory contract in which one party
Q: What are the 3 stages involved in the formation grants to another, for a fixed period and at a
of a contract of sale? determined price, the privilege to buy or sell, or to
decide whether or not to enter into a principal
A: contract. It binds the party who has given the
1. Negotiation/ Policitation option not to enter into the principal contract with
2. Perfection any other person during the period designated, and
3. Consummation within that period, to enter into such contract with
the one whom the option was granted, if the latter
1. NEGOTIATION/PREPARATORY should decide to use the option. It is a separate and
distinct contract.
A. OFFER
Note: If the option is perfected, it does not result in
Q: What makes an offer certain? the perfection or consummation of the sale. (Diaz, p.7)
A: An offer is “certain” only where there is an offer Q: What is the period within which to exercise the
to sell or an offer to buy a subject matter and for a option?
price having all the essential requisites mandated
by law. A:
1. Within the term stipulated
Q: What are the rules in the conception stage 2. If there is no stipulation, the court may fix the
about the offer? term
A: Notes: An action for specific performance to enforce

OFFER IS the option to purchase must be filed within 10 years
FLOATED RULE from the time the cause of action accrues.
AND IT IS: The implied renewal of the lease on a month-to-month
Prior to acceptance, may be withdrawn basis did not have the effect of extending the life of
Offer is at will by offeror but no authority to the option to purchase which expired at the end of the
floated modify it original lease period. The lessor is correct in refusing to
Must be accepted within the period, sell on the ground that the option had expired. (2001
With a otherwise, extinguished at the end of Bar Question)
period period and may be withdrawn at will by
offeror but must not be arbitrary, Q: How is an option exercised?
236 CIVIL LAW TEAM

SALES
C. RIGHT OF FIRST REFUSAL

A: A notice of acceptance must be communicated
to offeror even without actual payment as long as Q: What is the right of first refusal?
payment is delivered in the consummation stage.
A: A right of first refusal is a contractual grant, not
Q: What is the effect of a separate consideration in of the sale of a property, but of the first priority to
an option contract? buy the property in the event the owner sells the
same.
A:
1. With separate consideration: Note: Where a time is stated in an offer for its
a. Contract is valid acceptance, the offer is terminated at the expiration of
b. Offeror cannot withdraw offer until after the time given for its acceptance. (Pineda, p. 76, 2010
expiration of the option ed.)
c. Is subject to rescission & damages but not
specific performance Q: When can the owner offer the sale of the
2. Without separate consideration: property to a third person?
a. the option contract is not deemed
perfected A: Only after the lessee grantee fails to exercise its
b. offer may be withdrawn at any time prior right under the same terms and within the period
to acceptance contemplated can the owner validly offer to sell the
property to a third person, again under the same
Note: However, even though the option was not terms as offered to the grantee.
supported by a consideration, the moment it was
accepted, contract of sale is perfected. (Art. 1324) Q: NDC and Firestone entered into a contract of
lease wherein it is stipulated that Firestone has
Q: What is the effect of acceptance and the right of first refusal to purchase the leased
withdrawal of the offer? property "should lessor NDC decide to sell the
same”. After the rumor that NDC will transfer the
A: If the offer had already been accepted and such lot to PUP, Firestone instituted an action for
acceptance has been communicated to before the specific performance to compel NDC to sell the
withdrawal is communicated, the acceptance property in its favor. PUP moved to intervene
creates a perfected contract, even if no arguing that the Memorandum issued by then
consideration was as yet paid for the option. President Aquino ordered the transfer of the
whole NDC compound to the Government, which
In which case, if the offeror does not perform his in turn would convey it in favor of PUP. Can
obligations under the perfected contract, he shall Firestone exercise its right of first refusal?
be liable for all consequences arising from the
breach thereof based on any of the available A: Yes. It is a settled principle in civil law that when
remedies such as specific performance, or a lease contract contains a right of first refusal, the
rescission with damages in both cases. lessor is under a legal duty to the lessee not to sell
to anybody at any price until after he has made an
Q: How is an offer accepted? offer to sell to the latter at a certain price and the
lessee has failed to accept it. The lessee has a right
A: The acceptance must be absolute and must not that the lessor's first offer shall be in his favor. (PUP
qualify the terms of the offer—it must be plain, v. CA, G.R. No. 143513, Nov. 14, 2001)
unequivocal, unconditional and without variance of
any sort from the proposal. Q: In a 20-year lease contract over a building, the
lessee is expressly granted a right of first refusal
Q: What are the obligations of the offeror? should the lessor decide to sell both the land and
building. However, the lessor sold the property to
A: a third person who knew about the lease and in
1) Not to offer to any third party the sale of the fact agreed to respect it. Consequently, the lessee
object of the option during the option period; brings an action against both the lessor-seller and
2) Not to withdraw the offer or option during the the buyer (a) to rescind the sale and (b) to compel
option period; specific performance of his right of first refusal in
3) To hold the subject matter for sale to the the sense that the lessor should be ordered to
offeree in the event that the latter exercises execute a deed of absolute sale in favor of the
his option during the option period. lessee at the same price. The defendants contend
that the plaintiff can neither seek rescission of the
237
sale nor compel specific performance of a "mere" or the protection of some incompatible and
right of first refusal. Decide the case. preferred right.
A: Q: Will the alternative prayer for extension of the

1. The action filed by the lessee, for both lease prosper?
rescission of the offending sale and specific
performance of the right of first refusal which A: No, the extension of the lease should be upon
was violated, should prosper. The ruling in the mutual agreement of the parties. (2008 Bar
(Equatorial Realty Development, Inc. v. Mayfair Question)
Theater, Inc., G.R. No. 106063, Nov. 21, 1996),
a case with similar facts, sustains both rights of Q: Is it necessary that the right of first refusal be
action because the buyer in the subsequent embodied in a written contract?
sale knew the existence of right of first refusal,
hence, in bad faith. A: Yes, the grant of such right must be clear and
express.
2. The action to rescind the sale and to compel
the right of first refusal will not prosper. (Ang Note: It is applicable only to executory contracts and
Yu Asuncion v. CA, G.R. No. 109125, Dec. 2, not to contracts which are totally or partially
1994). The court ruled that the right of first performed.
refusal is not founded upon a contract but on a
quasi-delictual relationship covered by the If a particular form is required under the Statute of
principles of human relations and unjust Frauds: sale is valid & binding between the parties but
enrichment (Art 19, et seq. Civil Code). Hence, not to 3rd persons.
the only action that will prosper according to
the Supreme Court is an action for damages in Q: Pozzolanic entered a long-term contract with
a proper forum for the purpose. (1998 Bar the National Power Corporation (NPC) for the
Question) purchase of all fly ash to be produced by the
latter’s future power plants. In the contract, NPC
Note: The offer of the person in whose favor the right granted Pozzolanic a right of first refusal to
of first refusal was given must conform with the same purchase the fly ash that may be generated in the
terms and conditions as those given to the offeree. future. When NPC’s two new power plants started
operation, it published an invitation to interested
Q: Andres leased his house to Iris for a period of 2 buyers for the purchase of the fly ash. Pozzolanic
years, at the rate of P25, 000 monthly, payable sent letters to NPC reminding its right of first
annually in advance. The contract stipulated that it refusal. NPC deferred its public bidding with the
may be renewed for another 2-year period upon first power plant’s fly ash but it nevertheless
mutual agreement of the parties. The contract also continued with the bidding of the second power
granted Iris the right of first refusal to purchase plant’s fly ash. Pozzolanic filed a complaint, but
the property at any time during the lease, if during the pendency of the case NPC decided to
Andres decides to sell the property at the same likewise dispose the fly ash from the first power
price that the property is offered for sale to a third plant without allowing Pozzolanic to exercise its
party. Twenty-three months after execution of the right of first refusal. Can Pozzolanic exercise its
lease contract, Andres sold the house to his right of first refusal?
mother who is not a third party. Iris filed an action
to rescind the sale and to compel Andres to sell A: No. We hold the right of first refusal granted to
the property to her at the same price. respondent in the Batangas Contract invalid for
Alternatively, she asked the court to extend the being contrary to public policy as the same violates
lease for another two years on the same terms. the requirement of competitive public bidding in
the award of government contracts. In this
Q: Can Iris seek rescission of the sale of the jurisdiction, public bidding is the established
property to Andres’mother? procedure in the grant of government contracts.
Thus, respondent’s right of first refusal cannot take
A: Iris can seek rescission because pursuant to precedence over the dictates of public policy. The
Equatorial Realty Co. v. Mayfair Theater rescission right of first refusal of respondent being invalid, it
is a relief allowed for the protection of one of the follows that it has no binding effect. It does not
contracting parties and even third persons from all create an obligation on the part of petitioner to
injury and damage the contract of sale may cause acknowledge the same. (PSALM Corp., vs.
Pozzolanic, G.R. No. 183789, Aug. 24, 2011)
238 CIVIL LAW TEAM

SALES
the contract to the time the contract is perfected.

Q: May the right of first refusal be waived? (Villanueva, p. 6).
A: Yes. Like other rights, the right of first refusal Q: What are usually included in a policitation?
may be waived or when a party entered into a
compromise agreement. (Diaz, p. 55) A: Legal matters arising prior to the perfection of
the sale, dealing with concepts of invitation to
Q: Can a sublessee avail of the right of first refusal make offer, offer, acceptance, right of first refusal
of the lessee? option contract, supply agreement, mutual
promises to buy and sell or contracts to sell, and
A: GR: No. The sublessee is a stranger to the lessor even agency to sell or agency to buy. (Villanueva, p.
who is bound to respect the right of first refusal in 135, 2009 ed.)
favor of the lessee only.
2. PERFECTION
XPN: When the contract of lease granted the
lessee the right to assign the lease, the Q: When is a contract of sale deemed perfected?
assignee would be entitled to exercise such
right as he steps into the shoes of the original A: GR: It is deemed perfected at the moment there
assignee. (Villanueva, p. 164, 2009 ed.) is meeting of minds upon the thing which is the
object of the contract and upon the price.
Q: Differentiate an option contract from a right of (Art.1475, par.1)
first refusal.
Note: The acceptance of the offer must be absolute. It
A: An option contract is a preparatory contract in must be plain, unequivocal, unconditional and without
which one party grants to another, for a fixed variance of any sort from the proposal.
period and at a determined price, the privilege to
buy or sell, or to decide whether or not to enter XPN: When the sale is subject to a suspensive
into a principal contract. condition by virtue of law or stipulation.
In a right of first refusal, while the object may be Q: What is the effect and/or consequence of a
determinate, the exercise of the right would be qualified acceptance?
dependent not only on the grantor’s eventual
intention to enter into a binding juridical relation A: It constitutes merely a counter-offer which must
with another but also on terms, including the price, in turn be accepted to give rise to a valid and
that are yet to be firmed up. (Diaz, p. 54) binding contract. (Villanueva, p. 171, 2009 ed.)
OPTION CONTRACT RIGHT OF FIRST REFUSAL Q: What is the form of acceptance required?
Principal contract; stands Accessory; cannot stand
on its own on its own A: It may be express or implied. Acceptance may be
Needs separate Does not need separate evidenced by some act, or conduct, communicated
consideration consideration to the offeror, either in a formal or an informal
There must be subject manner, that clearly manifest the intention or
Subject matter & price determination to accept the offer to buy or sell.
matter but price not
must be valid
important (Villanueva, p. 177, 2009 ed.)
Not conditional Conditional
Not subject to specific Subject to specific Q: Spouses Raet and Mitra negotiated with Gatus
performance performance about the possibility of buying his rights to certain
units at a subdivision developed by Phil-Ville for
D. POLICITATION/MUTUAL PROMISE TO BUY AND them to be qualified to obtain loans from GSIS.
They paid an amount for which Gatus issued them
SELL
receipts in her own name. GSIS disapproved their
loan application. Phil-Ville advised them to seek
Q: What is policitation?
other sources of financing. In the meantime, they
were allowed to remain in the subject premises. Is
A: Policitation is defined as an unaccepted
there a perfected and enforceable contract of sale
unilateral promise to buy or sell. This produces no
or at least an agreement to sell over the disputed
judicial effect and creates no legal bond. This is a
housing units?
mere offer, and has not yet been converted into a
contract. It covers the period from the time the
prospective contracting parties indicate interest in
239
A: None. There was no contract of sale perfected to contact all minority stockholders to convince
between the private parties over the said property, them to sell their shares to DBP at the price of 65%
there being no meeting of the minds as to terms, of the par value. He was able to contact all except
especially on the price thereof. (Sps. Raet & Sps. for one who was in Singapore. Medrano testified
Mitra v. CA, G.R. No. 128016, Sept. 17, 1998) that all have agreed to sell their shares to DBP.
Paragon made proposals to DBP and the sale was
Q: Severino executed two deeds when he sold his approved by a DBP resolution subject to terms and
property to Henry so that Henry can obtain a loan conditions. However, the required number of
with Philam Life. He also authorized Henry to file shares contained in the conditions was not
an ejectment suit against the lessees and when the delivered by Medrano. Is the sale perfected?
prayer for ejectment was granted, Henry took
possession of the property. Severino now claims A: No. DBP imposed several conditions to its
ownership over the property claiming that the sale acceptance and it is clear that Medrano indeed
is fictitious therefore there was no sale to speak tried in good faith to comply with the conditions
of. Is Severino’s contention correct? given by DBP but unfortunately failed to do so.
Hence, there was no birth of a perfected contract of
A: No. There is a perfected contract of sale due to sale between the parties. (DBP v. Medrano and
the second deed of sale in this case. The basic PMO, G.R. No. 167004. Feb. 7, 2011)
characteristic of an absolutely simulated or fictitious
contract is that the apparent contract is not really Q: Licup, through a letter, offered to buy parcels of
desired or intended to produce legal effects or alter land to The Holy See and Philippine Realty
the juridical situation of the parties in any way. Corporation (PRC). He enclosed a check for
However, in this case, the parties already P100,000.00 to “close the transaction” and
undertook certain acts which were directed accepted the responsibility of removing informal
towards fulfillment of their respective covenants settlers. Msgr. Cirilos, representative of the Holy
under the second deed, indicating that they See and PRC signed the conforme portion of the
intended to give effect to their agreement. Further, letter and accepted the check. A stop-payment
the fact that Severino executed the two deeds, order was issued by Licup and the latter requested
primarily so that Henry could eject the tenant and that the titles to the land instead be given to SSE.
enter into a loan/mortgage contract with Philam Msgr. Cirilos wrote SSE requesting to remove the
Life, is a strong indication that he intended to informal settlers, otherwise, the P100,000.00
transfer ownership of the property to Henry. would be returned. SSE replied with an “updated
Hernando R. Penalosa v. Severino Santos, G.R. No. proposal” that they will comply provided that the
133749, Aug. 23, 2001) purchase price is lowered. The proposal was
rejected. The parcel of land was sold to another
Q: What is the effect of Severino’s and Henry’s third person. Is there a perfected contract of sale
failure to appear before the notary public who between the two parties?
notarized the deed?
A: No. When Msgr. Cirilos affixed his signature on
A: None. The non-appearance of the parties before that letter, he expressed his conformity to the
the notary public who notarized the deed does not terms of Licup’s offer appearing on it. There was
necessarily nullify nor render the parties' meeting of the minds as to the object and
transaction void ab initio. Article 1358, NCC on the consideration of the contract. But when Licup
necessity of a public document is only for ordered a stop-payment on his deposit and
convenience, not for validity or enforceability. proposed in his April 26, 1988 letter to Msgr. Cirilos
Where a contract is not in the form prescribed by that the property be instead transferred to SSE, a
law, the parties can merely compel each other to subjective novation took place. The proposed
observe that form, once the contract has been substitution of Licup by SSE opened the negotiation
perfected. stage for a new contract of sale as between SSE and
the owners. (Starbright Sales v. Phil. Realty Corp.,
Note: Contracts are obligatory in whatever form they et. al, G.R. No. 177936, Jan. 18, 2012)
may have been entered into, provided all essential
requisites are present. (Penalosa v. Santos, G.R. No. Q: When is an auction sale perfected?
133749, Aug. 23, 2001)
A: A sale by auction is perfected when the
Q: DBP sought to consolidate its ownership with auctioneer announces its perfection by the fall of
Paragon Paper Industries, Inc. Medrano, President the hammer, or in other customary manner. (Art.
and General Manager of Paragon, was instructed 1476, par.2)
240 CIVIL LAW TEAM

SALES
Q: Does the seller have the right to bid in an 2. Accept delivery of thing sold
auction sale? 3. Pay for expenses of delivery
A: Yes. The seller has the right to bid provided that Note: A grace period granted the buyer in case of
such right was reserved and notice was given to failure to pay is a right not an obligation. Non-payment
that effect. (Pineda, p. 53) would still generally require judicial or extrajudicial
demand before default can arise.
Q: When is a contract of sale perfected through a
letter or a telegram? Q: What are the other obligations of the buyer?
A: It is perfected only when the offeror has received A:

or has knowledge of the acceptance made by the 1. To take care of the goods without the
offeree. Even if the buyer has accepted, the seller obligation to return, where the goods are
may still withdraw if he does not know yet of the delivered to the buyer and he rightfully refuses
buyer’s acceptance. (Pineda, p. 59, 2010 ed.) to accept;
3. CONSUMMATION Note: The goods in the buyer’s possession are at

the seller’s risk.
Q: How does the consummation stage in a
contract of sale take place? 2. To be liable as a depositary if he voluntarily
constituted himself as such;
A: It takes place by the delivery of the thing
together with the payment of the price. 3. To pay interest for the period between
delivery of the thing and the payment of the
Note: The ownership of the thing is acquired by the price in the following cases:
buyer in any of the ways specified by law or in any a. should it have been stipulated;
manner agreed upon by the parties. b. should the thing sold and delivered
produces fruits or income; or
Q: A and PDS Development Corp. executed a c. should he be in default, from the time of
contract to sell a parcel of land. A died without judicial or extra-judicial demand for the
having completed the installment on the property. payment of the price.
His heirs then took over the contract to sell and OBLIGATIONS OF THE SELLER
assumed his obligations by paying the selling price
of the lot from their own funds, and completed Q: What are the obligations of the seller?
the payment. To whom should the final Deed of
Absolute Sale be executed by PDS? A: DDTWTP
1. Deliver the thing sold;
A: Having stepped into the shoes of the deceased 2. Deliver fruits & accessions/accessories
with respect to the said contract, and being the accruing from perfection of sale;
ones who continued to pay the installments from 3. Transfer the ownership;
their own funds, A’s heirs became the lawful 4. Warranties;
owners of the said lot in whose favor the deed of 5. Take care of the thing, pending delivery,
absolute sale should have been executed by vendor with proper diligence;
PDS. (Dawson v. Register of Deeds of Quezon City, 6. Pay for the expenses of the deed of sale
G.R. No. 120600 Sept. 22, 1998) unless there is a stipulation to the
contrary
D. OBLIGATIONS CREATED
Q: What is the obligation of the seller in terms of
OBLIGATIONS OF THE BUYER the nature of the subject matter of the sale?
Q: What are the obligations of the buyer? A: When the subject matter of the sale is a
determinate thing, the seller must deliver the thing
A: to the buyer when compelled by the latter.
1. Payment of the price When the subject matter is an indeterminate or
GR: Seller is not bound to deliver unless the generic thing, the seller may be asked that the
purchase price is paid obligation be complied with at his expense. (Art.
1165, NCC)
XPN: A period of payment has been fixed
241
Q: What is the seller’s obligation in case of delay Onerous Gratuitous/onerous

or promise to deliver the thing to two or more Consensual Formal contract
persons who do not have the same interest?
Law on Sales Law on Donation
A: The seller shall be responsible for any fortuitous

event that may occur until he has delivered the 2. Barter
thing. (Art. 1165, NCC) SALE BARTER
Consideration is giving Consideration is
E. CHARACTERISTICS OF A CONTRACT OF SALE of money as payment giving of a thing
If consideration consists partly in money & partly by
thing–look at manifest intention;
Q: What are the characteristics of a contract of If intention is not clear – Art. 1468
sale? Value of thing is equal Value of thing is more than
or less than amount of amount of money = Barter
A: money = Sale
1. Consensual Both are governed by law on sales
2. Bilateral
3. GR: Commutative 3. Agency to Sell
SALE AGENCY TO SELL
XPN: Aleatory – In some contracts of sale, Agent not obliged to pay for
what one receives may in time be greater or Buyer pays for price of price; must account for
smaller than what he has given. (Tolentino, p. object the proceeds of the
2, 2000 ed) sale.
Principal remains the owner
Buyer becomes owner
4. Principal even if the object
of thing
5. Title and not a mode of acquiring ownership delivered to agent
6. Onerous Agent assumes no personal
7. Reciprocal Seller warrants liability as long as
8. Nominate within authority given
Not unilaterally May be revoked unilaterally
F. SALE IS A TITLE AND NOT A MODE revocable even w/o ground
Seller receives profit Agent not allowed to profit
Q: Does sale by itself transfer ownership? Real contract Personal contract
A: No. The most that sale do is to create the 4. Dacion en Pago

obligation to transfer ownership. It is only a title SALE DACION EN PAGO
and not a mode of transferring ownership. No pre-existing Contract where property is
credit alienated to extinguish pre-
Q: What then transfers ownership? existing credit/debt
Buyer-seller Novates creditor-debtor
A: It is tradition or delivery, which is a consequence relationship relationship into seller-buyer
of the sale, that transfers ownership.
5. Lease
Q: Differentiate mode and title. SALE LEASE
Use of thing is for
A: Mode is the legal means by which dominion or Obligation to absolutely
specified period only
ownership is created, transferred, or destroyed; transfer ownership of
with obligation to
title only constitutes the legal basis by which to thing
return
affect dominion or ownership. (Villanueva, p. 15, Consideration is the
2009 ed.) Consideration is the price
rental
Seller needs to be owner of
G. DISTINCTIONS OF THE CONTRACT OF SALE WITH thing to transfer
OTHER CONTRACTS ownership.
Lessor need not be
Q: Distinguish Sale from the following: Note: Lease with option to owner
buy – really a contract of
1. Donation. sale but designated as lease
SALE DONATION in name.
242 CIVIL LAW TEAM

SALES
6. Contract for piece-of-work title from becoming

SALE CONTRACT FOR effective.
PIECE-OF-WORK Remedies available
Manufacturing in the Manufacturing upon 1. Specific
ordinary course of special order of a customer 2. Performance 1. Resolution
business 3. Rescission 2. Damages
For the general market Not for the general market, 4. Damages
but specially for the
customer
Q: Project Movers Realty and Development
H. CONTRACT TO SELL Corporation (PMRDC) was indebted to Keppel
Bank for P200M. To pay the debt, PMRDC
Q: What is a contract to sell? conveyed to the bank 25 properties. Adao
occupies one of the properties conveyed.
A: It is one form of conditional sale where The bank demanded Adao to vacate the property
ownership or title is retained by the seller until the but he refused. Hence, an ejectment case was filed
fulfillment of a positive suspensive condition, against Adao. In his defense, Adao assailed that he
normally the payment of the purchase price by the had a Contract to Sell was entered between
buyer in the manner agreed upon. (Gomez v. CA, et. PMRDC and Adao. To prove full payment of the
al., G.R. 120747, Sept. 21, 2000) property, he presented an affidavit. The lower
court ordered that Keppel banks should respect
Q: Distinguish a contract to sell from a contract of the contract to sell because when the bank
sale. acquired the properties by way of dacion en pago,
it merely stepped into the shoes of PMRDC. Is
A: Keppel bank bound by the contract to sell
CONTRACT OF SALE CONTRACT TO SELL between PMRDC and Adao?
As regards transfer of ownership
Ownership is transferred A: No. Adao’s lone affidavit is self-serving, and
to the buyer upon cannot be considered as substantial evidence. As a
Ownership is transferred
delivery of the object to general rule, one who pleads payment has the
upon full payment of the
him. burden of proving it. Even where the petitioner
purchase price.
alleged non-payment, the general rule is that the
Note: Vendor has lost and
Note: Prior to full burden rests on the respondent to prove payment,
cannot recover ownership
payment, ownership is rather than on the petitioner to prove non-
until and unless the
retained by the seller. payment. (Kepel Bank Phils. Inc., v. Adao, G.R. No.
contract is resolved or
rescinded 158227, Oct. 19, 2005)
As to numbers of contracts involved
There are two contracts: Q: Ursal and Spouses Monesets entered into a
1. The contract to sell “Contract to Sell” of a house and lot. A
downpayment was to be paid by Ursal and
Note: Conditional or subsequently the balance of the price is to be paid
preparatory sale every month until it is fully paid. After 6 months,
There is only one contract the monthly installments were stopped because
executed between the 2. The deed of absolute the spouses did not give Ursal the transfer of
seller and the buyer. sale certificate title. Subsequently, the Spouses
Monesets the property was sold to Dr. Canora. The
Note: The principal same property was also mortgaged by the spouses
contract is executed after to a rural bank. When the spouses failed to pay
full payment of the the rural bank, the bank moved to foreclose the
purchase price. mortgage. Does Ursal have vested ownership over
Payment as a condition the property?
Full payment of the price
Non-payment of the price is a positive suspensive
A: No. In such contract, the prospective seller
is a resolutory condition. condition.
expressly reserves the transfer of title to the
Vendor loses ownership
prospective buyer, until the happening of an event,
over the property and Note: Failure to fully pay
cannot recover it until the price is not a breach which in this case is the full payment of the
and unless the contract is but an event that purchase price. In this case, the parties not only
resolved or rescinded. prevents the obligation titled their contract as “Contract to Sell Lot and
of the vendor to convey House” but specified in their agreement that the
243
vendor shall only execute a deed of absolute sale a deed of absolute sale in favor of Ramona.
on the date of the final payment by vendee. Since Ramona paid the downpayment as agreed. Is
the contract in this case is a contract to sell, the there a perfected contract of sale or a mere
ownership of the property remained with the contract to sell?
Monesets even after petitioner has paid the down
payment and took possession of the property. In A: The agreement could not have been a contract
other words, petitioner did not acquire ownership to sell because the sellers herein made no express
over the subject property as she did not pay in full reservation of ownership or title to the subject
the equal price of the contract to sell. (Ursal v. parcel of land. The Coronels had already agreed to
Court of Appeals, et. al, G.R. No. 142411, Oct. 14, sell the house and lot they inherited from their
2005) father, completely willing to transfer full ownership
of the subject house and lot to the buyer if the
Q: Caguiat offered to buy Spouses Herrera’s lot documents were then in order. However, the TCT
and subsequently gave the spouses a partial was then still in the name of their father, that is
payment. In turn, the spouses gave Caguiat the why they caused the issuance of a new TCT in their
corresponding receipt stating that respondent names upon receipt of the down payment. As soon
promised to pay the balance of the purchase price as the new TCT is issued in their names, they were
on or before a fixed date. Caguiat’s counsel wrote committed to immediately execute the deed of
the spouses informing them of his readiness to pay absolute sale. Only then will the obligation of the
the balance of the price and requesting them to buyer to pay the remainder of the purchase price
prepare the final deed of sale. However, the arise. This suspensive condition was fulfilled. Thus,
spouses’ counsel sent a letter to Caguiat stating the conditional contract of sale became obligatory,
that the wife is leaving for abroad and that they the only act required for the consummation thereof
are cancelling the transaction. The spouses being the delivery of the property by means of the
allowed Caguiat to recover the partial payment he execution of the deed of absolute sale in a public
paid them. Is the transaction a contract of sale? instrument, which they unequivocally committed
themselves to do as evidenced by the "Receipt of
Down Payment." (Coronel, et al. v. CA, G.R. No.
A: No. In this case, the "Receipt for Partial 103577, Oct. 7, 1996)
Payment" shows that the true agreement between
the parties is a contract to sell. First, ownership Q: Instead of executing a deed of Absolute Sale in
over the property was retained by petitioners and favor of Ramona, the Coronels sold the property
was not to pass to respondent until full payment of to Catalina and unilaterally and extrajudicially
the purchase price. In effect, petitioners have the rescinded the contract with Ramona. Ramona
right to rescind unilaterally the contract the then filed a complaint for specific performance.
moment respondent fails to pay within the fixed Will Ramona’s action prosper?
period. Second, the agreement between the parties
was not embodied in a deed of sale. The absence of A: Yes. Under Article 1187, the rights and
a formal deed of conveyance is a strong indication obligations of the parties with respect to the
that the parties did not intend immediate transfer perfected contract of sale became mutually due
of ownership, but only a transfer after full payment and demandable as of the time of fulfillment or
of the purchase price. Third, petitioners retained occurrence of the suspensive condition. Hence,
possession of the certificate of title of the lot. This is petitioner-sellers' act of unilaterally and
an additional indication that the agreement did not extrajudicially rescinding the contract of sale cannot
transfer to respondent, either by actual or be justified, there being no express stipulation
constructive delivery, ownership of the property. authorizing the sellers to extrajudicially rescind the
(Spouses Herrera v. Caguiat, G.R. No. 139173, Feb. contract of sale. (Coronel, et al. v. CA, G.R. No.
28, 2007) 103577, Oct. 7, 1996)
Q: Having agreed to sell property which they Q: What are the instances when what is involved is
inherited from their father, which was then still in a contract to sell?
their father’s name, the Coronels executed a
document entitled "Receipt of Down Payment" in A:
favor of Alcaraz for the purchase of their house 1. Where subject matter is indeterminate
and lot, with the condition that Ramona will make 2. Sale of future goods
a down payment upon execution of the document. 3. Stipulation that deed of sale & corresponding
The Coronels would then cause the transfer of the certificate of sale would be issued only after
property in the name of Ramona and will execute full payment
244 CIVIL LAW TEAM

SALES
II. PARTIES TO A CONTRACT OF SALE 2. Insane or demented persons, and deaf-mutes

who do not know how to write (Art. 1327,
Q: Who are the parties to a contract of sale? NCC)
A: Q: May a capacitated person file an action for

1. Seller – one who sells and transfers the thing annulment using as basis the incapacity of the
and ownership to the buyer incapacitated party?
2. Buyer – one who buys the thing upon payment
of the consideration agreed upon A: No. He is disqualified from alleging the incapacity
of the person whom he contracts (Art. 1397, NCC);
A. CAPACITY OF THE PARTIES
Q: In a defective contract, where such defect
Q: Who may enter into a contract of sale? consists in the incapacity of a party, does the
incapacitated party have an obligation to make
A: GR: Any person who has capacity to contract or restitution?
enter into obligations, may enter into a contract
of sale, whether as party-seller or as party- A: GR: he incapacitated person is not obliged to
buyer. make any restitution.
XPNs: XPN: insofar as he has been benefited by the

1. Minors, insane and demented persons thing or price received by him. (Art. 1399, NCC)
and deaf-mutes who do not know how to
write C. RELATIVE INCAPACITY
2. Persons under a state of drunkenness or
during hypnotic spell Q: Who are those relatively incapacitated to enter
3. Husband and wife - sale by and between
into a contract of sale?
spouses
A:
Note: Contracts of sale entered by such legally
1. Spouses (Art. 1490, NCC)
incapacitated persons are merely voidable,
2. Agents, Guardians, Executors and
subject to annulment or ratification. However,
the action for annulment cannot be instituted by Administrators, Public Officers and Employees,
the person who is capacitated since he is Court Officers and Employees, and others
disqualified from alleging the incapacity of the specially disqualified by law. (Art. 1491, NCC)
person with whom he contracts.
Note: Under Art. 1490 of the NCC, spouses cannot sell
However, status of prohibited sales between property to each other, except:
spouses is not merely voidable, but null and void.
a. When a separation of property was agreed
XPN to XPN: in the marriage settlements; or
1. Where necessaries are sold and delivered b. When there has been a judicial separation of
property agreed upon between them.
to a minor or other person without
capacity to act, he must pay a reasonable
Q : What is the status of the following contracts of
price therefor.
sale?
2. In case of sale between spouses:
a. when a separation of property was
A:
agreed upon in the marriage
1. That entered into by minors:
settlements; or
a. Merely voidable, subject to annulment or
b. when there has been a judicial
ratification
separation of property agreed upon
b. Action for annulment cannot be instituted
between them
by the person who is capacitated since he
is disqualified from alleging the incapacity
B. ABSOLUTE INCAPACITY
of the person with whom he contracts
(with partial restitution in so far as the
Q: Who are those absolutely incapacitated to
minor is benefited) where necessaries are
enter into a contract of sale?
sold and delivered to a minor or other
person without capacity to act, he must
A:
pay a reasonable price (Art. 1489)
1. Unemancipated minors(Art. 1327, NCC);
245
2. Sale by & between spouses (Art. 1490):

a. Status of prohibited sales between In Calimlim-Canullas v. Fortun, the Court
spouses: decided that sale between common law
GR: Null and void spouses is null and void because Art. 1490
prohibits sales between spouses to prevent
XPN: In case of sale between spouses: the exercise of undue influence by one spouse
i. When a separation of property was over the other, as well as to protect the
agreed upon in the marriage institution of marriage. The prohibition applies
settlements; or to a couple living as husband and wife without
ii. When there has been a judicial the benefit of marriage, otherwise, the
separation of property agreed upon condition of those incurred guilt would turn
between them out to be better than those in legal union.
(Calimlim-Canullas v. Fortun, et. al., G.R. No. L-
rd
b. Contract of sale with 3 parties: 57499, June 22, 1984)
GR: Under the law on sales, it would seem
that a spouse may, without the consent of But when the registered property has been
the other spouse, enter into sales conveyed subsequently to a third-party buyer
transactions in the regular or normal in good faith and for value, then reconveyance
pursuit of their profession, vocation or is no longer available to common-law spouse-
trade. (in relation with Art. 73, Family seller, since under the Torrens system every
Code) buyer has a right to rely upon the title of his
immediate seller. (Cruz v. CA, G.R. No. 120122,
XPN: Even when the property regime Nov. 6, 1997)
prevailing was the conjugal partnership
of gains, the Supreme Court held the Q: Who has the right to assail the validity of the
sale by the husband of a conjugal transaction between spouses?
property without the consent of the
wife is void, not merely voidable under A: The following are the only persons who can
Art. 124 of the Family Code since the question the sale between spouses:
resulting contract lack one of the 1. The heirs of either of the spouses who
essential elements of full consent. have been prejudiced;
(Guiang v. CA, G.R. No. 125172, June 2. Prior creditors; and
26, 1998) 3. The State when it comes to the payment
of the proper taxes due on the
3. Between Common Law Spouses - also null and transactions
void.
Q: Who are the persons with relative incapacity to be the vendee in a contract of sale?
A: AGE-COP
RELATIVELY RATIFICATION
PROPERTIES INVOLVED STATUS OF SALE
INCAPACITATED TO BUY
Property entrusted to them for
administration or sale
Agents
XPN: When principal gave his
Can be ratified after the
consent
inhibition has ceased
Property of the ward during
period of guardianship
Reason: the only wrong that
subsists is the private wrong
Note: Contracts entered by Voidable to the ward, principal or
Guardian guardian in behalf of ward are estate; and can be condoned
rescissible if ward suffers lesion by by the private parties
more than ¼ of the value of themselves
property.
Executors and Property of the estate under

administrators administration
246 CIVIL LAW TEAM

SALES
Property and rights in litigation or Cannot be ratified

Court officers and
levied upon on execution before the
employees
court under their jurisdiction Reason: It is not only a private
Void
Others specially disqualified wrong, but also a public
by law wrong. (Villanueva, Law on
Pubic officers and Property of the State entrusted to Sales, p. 58)
employees them for administration
Note: Prohibitions are applicable to sales in legal redemption, compromises and renunciations.
In the case of Rubias v. Batiller (51 SCRA 120), it sought to declare the difference in the nullity between contracts
entered into by guardians, agents, administrators and executors, from the contracts entered into by judges, judicial
officers, fiscals and lawyers.
D. SPECIAL DISQUALIFICATIONS Q: What are the requisites of a proper object of

sale?
Q: Who are those persons specially disqualified by
law to enter into contracts of sale? A:
1. Things
a. Determinate or determinable
A: ALIEN-UnOS b. Lawful (licit), otherwise contract is void
1. ALIENs who are disqualified to purchase c. Should not be impossible (within the
private agricultural lands (Art. XII Secs. 3 & commerce of men)
7)
2. Unpaid seller having a right of lien or Note: From the viewpoint of risk or loss, not
having stopped the goods in transitu, is until the object has really been made
prohibited from buying the goods either determinate can we say that the object has
directly or indirectly in the resale of the been lost, because “genus never perishes.”
same at public/private sale which he may
make (Art. 1533 [5]; Art. 1476 [4]) 2. Rights
3. The Officer holding the execution or GR: Must be transmissible.
deputy cannot become a purchaser or be Example: right of redemption, right of
interested directly or indirectly on any usufruct, sale of credit, right to
purchase at an execution. (Sec. 21 Rule 39, inheritance already assigned, etc.
Rules of Court)
4. In Sale by auction, seller cannot bid unless XPN:
notice has been given that such sale is a. Future inheritance
subject to a right to bid in behalf of the b. Service – cannot be the object of sale.
seller. (Art. 1476) They are not determinate things and no
transfer of ownership is available but it
Q: Atty. Leon G. Maquera acquired his client’s can be the object of certain contracts
property as payment for his legal services, then such uas contract for a piece of work.
sold it and as a consequence obtained an (Pineda, Sales, 2002 ed., p. 13)
unreasonable high fee for handling his client’s
case. Did he validly acquire his client’s property? Q: Rodriguez first purchased a portion of a Lot A
consisting of 345 square meters located in the
A: No. Article 1491 (5) of the New Civil Code middle of Lot B, which has a total area of 854
prohibits lawyer’s acquisition by assignment of the square meters, from Juan. He then purchased
client’s property which is the subject of the another portion of said lot. As shown in the
litigation handled by the lawyer. Also, under Article receipt, the late Juan received P500.00 from
1492, the prohibition extends to sales in legal Rodriguez as "advance payment for the residential
redemption. (In Re: Suspension from the Practice of lot adjoining his previously paid lot on three sides
Law in the territory of Guam of Atty. Leon G. excepting on the frontage. Juan’s heirs now
Maquera, B.M. No. 793, July 30, 2004) contests the validity of the subsequent sale,
alleging that the object is not determinate or
A. REQUISITES OF A VALID SUBJECT MATTER
determinable. Decide.
A: Their contention is without merit. There is no

dispute that Rodriguez purchased a portion of Lot A
247
consisting of 345 square meters. This portion is a. Sole owner may sell an undivided
located in the middle of B, which has a total area of interest. (Art. 1463) Ex. A fraction or
854 square meters, and is clearly what was referred percentage of such property
to in the receipt as the "previously paid lot." Since b. Sale of an undivided share in a specific
the lot subsequently sold to Rodriguez is said to mass of fungible goods makes the buyer a
adjoin the "previously paid lot" on three sides co-owner of the entire mass in proportion
thereof, the subject lot is capable of being to the amount he bought. (Art. 1464)
determined without the need of any new contract. c. A co-owner cannot sell more than his
The fact that the exact area of these adjoining share (Yturralde v. CA)
residential lots is subject to the result of a survey 4. Sale of Things in Litigation
does not detract from the fact that they are a. Sale of things under litigation is rescissible
determinate or determinable. Concomitantly, the if entered into by the defendant , without
object of the sale is certain and determinate. (Heirs the approval of the litigants or the court
of San Andres v. Rodriguez, G.R. No. 135634, May (Art. 1381)
31, 2000) b. No rescission is allowed where the thing is
rd
legally in the possession of a 3 person
Note: Where land is sold for a lump sum and not so who did not acted in bad faith.
much per unit of measure or number, the boundaries 5. Things subject to Resolutory Condition. Ex.
of the land stated in the contract determine the effects Things acquired under legal or conventional
and scope of the sale, not the area thereof. The right of redemption, or subject to reserva
vendors are obligated to deliver all the land included troncal. (Art. 1465)
within the boundaries, regardless of whether the real 6. Indeterminate Quantity of Subject Matter
area should be greater or smaller than that recited in
a. The fact that the quantity is not
the deed. This is particularly true where the area is
determinate shall not be an obstacle to
described as "humigit kumulang," that is, more or less.
(Semira v. CA, G.R. No. 76031, Mar. 2, 1994)
the existence of the contract provided it is
possible to determine the same, without
Q: Can rights be the objects of sale? need of a new contract. (Art. 1349)
IV. OBLIGATION OF THE SELLER

A: Yes, if they are transmissible. (Art. 1347)
TO TRANSFER OWNERSHIP
Q: When is a thing determinable?
Q: Should the seller be the owner at the time of
perfection of the contract?
A:
1. A thing is determinate when it is particularly
A: GR: No. Seller must have the right to transfer
designated or physically segregated from all
ownership at the time of delivery or consummation
the others of the same class. (Art. 1460, NCC)
stage. He need not be the owner at the time of
2. When the thing is capable of being made
perfection of the contract.
determinate without the necessity of a new or
further agreement between the parties. (Art.
XPN: Foreclosure sale wherein the mortgagor
1460, NCC)
should be the absolute owner.
B. PARTICULAR KINDS
Q: EJ was subjected to a buy-bust operation where
police officers posed to buy 500 pesos worth of
Q: What may be objects of sale?
“S”. She was then charged with a violation of the
Dangerous Drugs Act for trafficking drugs. EJ uses
A:
as defense her lack of possession of the object of
1. Existing Goods – owned/ possessed by seller at
the sale. Would her contention free her from
the time of perfection
liability?
2. Future Goods – goods to be manufactured,
raised, acquired by seller after perfection of
A: No. Though she was not in possession of the
the contract or whose acquisition by seller
object of sale, Article 1459 merely requires that the
depends upon a contingency (Art. 1462)
vendor must have the right to transfer ownership of
Note: Sale of future goods is valid only as an executory the object sold at the time of delivery. In the case
contract to be fulfilled by the acquisition & delivery of at bar, though Beth is not the owner, she had the
goods specified. right to dispose of the prohibited drug. Ownership
was thereafter acquired upon her delivery to the
3. Sale of Undivided Interest or Share men in the alley after her payment of the price.
248 CIVIL LAW TEAM

SALES
(People v. Ganguso, G.R. No. 115430, Nov. 23, thing having only a potential existence at
1995) the time of perfection; or even a thing
subject to a resolutory condition.
Q: Spouses De Leon alleged that they are the
owners of a parcel of land which was inherited by Note: If the seller later acquires title thereto and
the husband from his father. They engaged the delivers it, title passes by operation of law.
services of Atty. Juan to take care of the
documents of the properties of his parents. The 2. When seller is not owner at
lawyer let them sign voluminous documents. After consummation stage
the death of Atty. Juan, some documents surfaced a. Old view – the contract of sale is
and revealed that their properties had been valid, but the transfer of title is void.
conveyed by sale or quitclaim to the husband's (Mindanao-Academy, Inc. v. Yap,
brothers and sisters and to Atty. Juan and his G.R. No. L-17681, Feb. 26, 1965)
sisters, when in truth and in fact, no such b. New view – the sale by a non-owner
conveyances were ever intended by them. His of the subject property is void
signature in the deed was forged. The land in instead of treating the
question was subsequently sold to Alcantara by tradition/delivery aspect as having
Rodolfo De Leon, one of the brothers. The spouses no effect on transferring ownership
demanded annulment of the document and to the buyer. (DBP v. CA, G.R. No.
reconveyance but it was refused. Likewise, 110053, Oct. 16, 1995)
Alcantara averred that she bought the land in
question in good faith and for value. Was there a Note: Nemo dat quod non habet – you cannot
right to transfer ownership of the land? give what you do not have, properly applicable to
the consummation of a sale.
A: None. It is during the delivery that the law
requires the seller to have the right to transfer Q: What is the legal effect of sale by a non-owner?
ownership of the thing sold. In general, a perfected
contract of sale cannot be challenged on the A: GR: The buyer requires no better title to the
ground of the seller’s non-ownership of the thing goods than the seller had; caveat emptor (buyer
sold at the time of the perfection of the contract. beware).
Undisputed is the fact that at the time of the sale,
Rodolfo de Leon was not the owner of the land he XPNs:
delivered to petitioner. Thus, the consummation of 1. Estoppel – when the owner of the goods
the contract and the consequent transfer of is by his conduct precluded from denying
ownership would depend on whether he the seller’s authority to sell
subsequently acquired ownership of the land. A 2. When the contrary is provided for in
comparison of the genuine signatures of Hermoso recording laws
de Leon with his purported signature on the Deed 3. When the sale is made under statutory
of Extrajudicial Partition with Quitclaim will readily power of sale or under the order of a
reveal that the latter is a forgery. (Alcantara-Daus v. court of competent jurisdiction
Spouses De Leon, G.R. No. 149750, June 16, 2003) 4. When the sale is made in a merchant’s
store in accordance with the Code of
A. SALE BY A PERSON WHO DOES NOT OWN THE Commerce and special laws
THING SOLD 5. When a person who is not the owner sells
and delivers a thing, and subsequently
Q: What is the status of a sale by a person who acquired title thereto
does not own the thing subject of the sale? 6. When the seller has a voidable title which
has not been avoided at the time of the
A: It depends upon the stage of the sale. sale
1. When seller is not owner at perfection 7. Sale by co-owner of the whole property
stage – the sale is valid. or a definite portion thereof
8. Special rights of unpaid seller
Ownership of the subject matter by the
seller at this stage is not an essential Q: What are the instances when the Civil Code
requirement for the validity of sale. It is recognizes sale of things not actually or already
necessary at the time of delivery. Hence, owned by the seller at the time of sale?
a valid contract of sale can cover subject
matter that is not yet existing or even a A:
249
1. Sale of a thing having potential existence 2/3 thereof belonged to his sisters. Also, Ida could
(Art.1461, NCC) not have given her consent to the contract, being a
2. Sale of future goods (Art. 1462, NCC) minor at the time. Consent of the contracting
3. Contract for the delivery at a certain price of parties is among the essential requisites of a
an article, which the seller in the ordinary contract, including one of sale, absent which there
course of business manufactures/ procures for can be no valid contract. Moreover, Ida admittedly
the general market, whether the same is on did not pay any centavo for the property, which
hand at the time or not (Art. 1467, NCC) makes the sale void. Article 1471 of the Civil Code
provides: If the price is simulated, the sale is void,
B. SALE BY A PERON HAVING A VOIDABLE TITLE but the act may be shown to have been in reality a
donation, or some other act or contract. (Labagala
Q: What is the effect of a sale made by the seller v. Santiago, G.R. No. 132305, Dec. 4, 2001)
with voidable title over the object?
V. PRICE
A:
1. Perfection stage: valid – buyer acquires title of A. MEANING OF PRICE
goods
2. Consummation stage: valid – If the title has not Q: What is a price?
yet been avoided at the time of sale and the
buyer must buy the goods under the following A: Price signifies the sum stipulated as the
conditions: equivalent of the thing sold and also every incident
a. In good faith taken into consideration for the fixing of the price
b. For value put to the debit of the buyer and agreed to by him.
c. Without notice of seller’s defect of title (Villanueva, p. 52)
EMPTIO REI SPERATAE EMPTIO SPEI B. REQUISITES FOR A VALID PRICE

Sale of thing having Sale of mere hope or
potential existence expectancy Q: What are the requisites of price?
Uncertainty is w/ regard Uncertainty is w/ regard
to quantity & quality to existence of thing A: Must be:
Contract deals w/ present 1. Real
Contract deals w/ future
thing – hope or 2. In money or its equivalent
thing
expectancy 3. Certain or ascertainable at the time of the
Sale is valid even though perfection of the contract
expected thing does
Sale is valid only if the
not come into
expected thing will C. HOW PRICE IS DETERMINED
existence as long as the
exist.
hope itself validly
existed. (eg. lotto) Q: When is price certain?
Note: The presumption is Emptio Rei Speratae
A:
Q: What is the effect if a buyer in good faith 1. If there is a stipulation
purchased from a public sale a personal property 2. If it be with reference to another thing certain
belonging to another who has lost or has been 3. If the determination of the price is left to the
deprived thereof? judgment of specified person(s)
4. By reference to certain fact(s) as referred to in
A: The owner of the personal property cannot Art. 1472 (Art. 1469)
demand its return without reimbursing the price
Note: If the price is based on estimates, it is uncertain.
paid by the buyer in good faith. (Art. 559)
Q: When is the price of securities, grains, liquids
Q: Jose, as co-owner, sold the entire land in favor
and things considered certain?
of his minor daughter, Ida. Alleging that Jose had
fraudulently registered it in his name alone, his
A:
sisters, sued him for recovery of 2/3 share of the
1. When the price fixed is that which the thing
property. Ida did not pay for the land. Is the sale
would have on a definite day, or in a particular
valid?
exchange or market
2. When the amount is fixed above or below the
A: No. Jose did not have the right to transfer
price of such day, or in such exchange or
ownership of the entire property to petitioner since
250 CIVIL LAW TEAM

SALES
market, provided said amount be certain (Art. Q: Is annulment of sale the remedy in a simulated
1472, NCC) sale?
Q: Can the fixing of the price be left to the A: No. It is a well-entrenched rule that where the
discretion of one of the contracting parties? deed of sale states that the purchase price has been
paid but in fact has never been paid, the deed of
A: GR: No. The price cannot be fixed unilaterally by sale is null and void ab initio for lack of
one of the contracting parties. consideration. Moreover, Article 1471 of the Civil
Code, provides that “if the price is simulated, the
XPN: If the other party agreed or consented. sale is void,” which applies to the instant case, since
(Art. 1473, NCC) the price purportedly paid as indicated in the
contract of sale was simulated for no payment was
Q: What is the effect when the price in unilaterally actually made. Since it was well established that the
fixed by one of the contracting parties without Deed of Sale is simulated and, therefore void,
consent of the other party? petitioners’ claim that respondent's cause of action
is one for annulment of contract, which already
A: There is no meeting of the minds. The sale is prescribed, is unavailing, because only voidable
inefficacious. (Pineda, p. 54, 2010 ed.) contracts may be annulled. On the other hand,
respondent's defense for the declaration of the
D. GROSS INADEQUACY OF THE PRICE inexistence of the contract does not prescribe.
(Catindig v. Vda. de Meneses, Roxas v. Court of
Q: What is the effect of gross inadequacy of price? Appeals, G.R.No. 165851 & G.R. No. 165851 , Feb. 2,
2011)
A: GR: It does not affect the validity of the sale if it
is fixed in good faith and without fraud Q: What is considered reasonable price?
XPN: CoRDS A: Generally the market price at the time and place
3. If Consent is vitiated (may be annulled or fixed by the contract or by law for the delivery of
presumed to be equitable mortgage) the goods.
4. If the parties intended a Donation or
some other act/ contract Q: When is the time to determine the adequacy or
5. If the price is so low as to be “Shocking to inadequacy of price?
the conscience”
6. If in the event of Resale, a better price A: In determining the adequacy or inadequacy of
can be obtained the price, the price obtaining at the time of the
execution of the contract shall be considered, and
Note: GR: The validity of the sale is not necessarily not the price obtaining thereafter. (Pineda, p. 47,
affected where the law gives the owner the right to 2010 ed.)
redeem because the lesser the price, the easier it is for
the owner to effect redemption. Q: How is inadequacy of price proved?
XPN: While there is no dispute that mere A: Allegation of inadequacy of price must be proved
inadequacy of the price per se will not set aside a
by sufficient evidence. Without being substantiated
judicial sale of real property, nevertheless, where
with evidence, it is a mere speculation. (Pineda, p.
the inadequacy of the price is purely shocking to
the conscience, such that the mind revolts at it
47, 2010 ed.)
and such that a reasonable man would neither
directly or indirectly be likely to consent to it, the Q: What is the effect on the contract of sale in case
same will be set aside. (Cometa v. CA 351 SCRA of a breach in the agreed manner of payment?
294)
A: None. It is not the act of payment of price that
Q: What is the effect if the price is simulated? determines the validity of a contract of sale.
Payment of the price has nothing to do with the
A: GR: Contract of sale is void. perfection of the contract, as it goes into the
performance of the contract. Failure to pay the
XPN: The act may be shown to have been in consideration is different from lack of
reality a donation or some other act or contract. consideration. Failure to pay such results in a right
to demand the fulfillment or cancellation of the
obligation under an existing valid contract. On the
251
other hand, lack of consideration prevents the A: None. A contract of sale being a consensual
existence of a valid contract. (Sps. Bernardo contract, it becomes binding and valid upon the
Buenaventura and Consolacion Joaqui v. CA, GR No. meeting of the minds as to price.
126376, Nov. 20, 2003) 1. If there is such meeting of the minds as to
price, the contract of sale is valid, despite
Q: Is payment of the purchase price essential to the manner of payment, or even the
transfer ownership? breach of that manner of payment.
2. If the real price is not stated in the
A: Unless the contract contains a stipulation that contract, then the contract of sale is valid
ownership of the thing sold shall not pass to the but subject to reformation.
purchaser until he has fully paid the price, 3. If there is no meeting of the minds as to
ownership of the thing sold shall be transferred to the price because the price stipulated in
the vendee upon the actual or constructive delivery the contract is simulated, then the
thereof. (Diaz, p. 48) contract is void, in accordance with
Article 1471 of the Civil Code. (Sps.
E. WHEN NO PRICE IS AGREED UPON BY THE Buenaventura v. CA, G.R. No. 126376,
PARTIES Nov. 20, 2003)
Q: What is the effect of failure to determine the Note: A definite agreement on the manner of payment
price? of the price is an essential element in the formation of
a binding and enforceable contract of sale. (Co v. CA,
A: G.R. No. 123908, Feb. 9, 1998)
1. Where contract is executory – ineffective
2. Where the thing has been delivered to and Q: In an action for specific performance with
appropriated by the buyer – the buyer must damages, X alleged that there was an agreement
pay a reasonable price therefore to purchase the lot of Y. As regards the manner of
payment, however, Y’s receipts contradicted the
Note: The fixing of the price cannot be left to the testimony of X. The receipts failed to state the
discretion of one of the parties. However, if the price total purchase price or prove that full payment
fixed by one of the parties is accepted by the other, was made. For this reason, it was contended that
the sale is perfected. there was no meeting of their minds and there
was no perfected contract of sale. Decide.
Q: What is the effect when a thing or a part
thereof is delivered to the buyer although the A: The question to be determined should not be
contract is inefficacious and the latter whether there was an agreed price, but what that
appropriated the same? agreed price was. The sellers could not render
invalid a perfected contract of sale by merely
A: The buyer must pay the reasonable price for the contradicting the buyer’s obligation regarding the
thing received. (Art. 1474, NCC) price, and subsequently raising the lack of
agreement as to the price. (David v. Tiongson, G.R.
Q: How is reasonable price determined? No. 108169, Aug. 25, 1999)
A: Reasonableness of price is a question of fact. Its Q: Distinguish the failure to pay the consideration
determination is dependent upon the from lack of consideration.
circumstances of each particular case. The market
value is a good standard in determining the A:
reasonable price. (Pineda, p. 55) FAILURE TO PAY LACK OF
CONSIDERATION CONSIDERATION
Q: What is market value? As to validity of contract of sale
It is not the act of payment
A: It is that reasonable sum which a property would of price that determines the
command in a fair sale by a man willing but not validity of a contract of sale.
Lack of consideration
obliged to sell to another who is willing but not prevents the
obliged to buy. Note: Payment of the price
existence of a valid
has nothing to do with the
contract.
Q: What is the effect of a breach of the agreed perfection of the contract.
Instead, it goes into the
manner of payment to the contract of sale?
performance of the contract.
As to resultant right
252 CIVIL LAW TEAM

SALES
Failure to pay the Note: Option money may become earnest money if
consideration results in a The contract of sale is the parties so agree.
right to demand the null and void and
fulfillment or cancellation of produces no effect Q: When is payment considered an earnest
the obligation under an whatsoever money?
existing valid contract.
A: When the payment constitutes as part of the
G. EARNEST MONEY VIS-A-VIS OPTION MONEYY purchase price. Hence, in case when the sale did
not happen, it must be returned to the prospective
OPTION MONEY buyer.
Q: What is the effect of failure to determine the Q: What is the effect of rescission on earnest
price? money received?
A: A: When the seller seeks to rescind the sale, he is

1. Where contract is executory – ineffective obliged to return the thing which were the object of
2. Where the thing has been delivered to and the contract along with fruits and interest. (Art.
appropriated by the buyer – the buyer must 1385, NCC)
pay a reasonable price therefore
Q: Distinguish option money from earnest money.
Note: The fixing of the price cannot be left to the
discretion of one of the parties. However, if the price A:
fixed by one of the parties is accepted by the other, OPTION MONEY EARNEST MONEY
the sale is perfected.
Money given as distinct
Forms part of the purchase
consideration for an
Q: What is an option money? price
option contract
Applies to a sale Given only when there is
A: The distinct consideration in case of an option not yet perfected already a sale
contract. It does not form part of the purchase price When given, the buyer is
hence, it cannot be recovered if the buyer did not Prospective buyer is not
bound to pay the
continue with the sale. required to buy.
balance.
If sale did not materialize,
If buyer does not decide
Q: When is payment considered option money? it must be returned.
to buy, it cannot be
(Villanueva, p. 87,
recovered.
A: Payment is considered option money when it is Pineda, p.77)
given as a separate and distinct consideration from
the purchase price. Consideration in an option Q: Bert offers to buy Simeon's property under the
contract may be anything or undertaking of value. following terms and conditions: P1 million
purchase price, 10% option money, the balance
EARNEST MONEY payable in cash upon the clearance of the property
of all illegal occupants. The option money is
Q: What is an earnest money or “arras”? promptly paid and Simeon clears the property of
all illegal occupants in no time at all. However,
A: This is the money given to the seller by the when Bert tenders payment of the balance and
prospective buyer to show that the latter is truly asks for the deed of absolute sale, Simeon
interested in buying the property, and its aim is to suddenly has a change of heart, claiming that the
bind the bargain. (Pineda, p. 75) deal is disadvantageous to him as he has found out
that the property can fetch three times the agreed
Q: What is the effect of giving an earnest money? purchase price. Bert seeks specific performance
but Simeon contends that he has merely given
A: It forms part of the purchase price which may be Bert an option to buy and nothing more and offers
deducted from the total price. It also serves as a to return the option money which Bert refuses to
proof of the perfection of the contract of sale. The accept.
rule is no more than a disputable presumption and 1. Will Bert's action for specific
prevails only in the absence of contrary or performance prosper? Explain.
rebuttable evidence. (PNB v CA, 262 SCRA 464, 2. May Simeon justify his refusal to proceed
1996) with the sale by the fact that the deal is
financially disadvantageous to him?
Explain.
253
money differently, there is nothing alleged in the

A: present case that would give rise to a contrary
1. Bert's action for specific performance will presumption. In cases where the Court reached a
prosper because there was a binding conclusion contrary to the presumption declared in
agreement of sale, not just an option contract. Article 1482, we found that the money initially paid
The sale was perfected upon acceptance by was given to guarantee that the buyer would not
Simeon of 10% of the agreed price. This back out from the sale, considering that the parties
amount is in reality an earnest money which, to the sale have yet to arrive at a definite
under Art. 1482, "shall be considered as part of agreement as to its terms – that is, a situation
the price and as proof of the perfection of the where the contract has not yet been
contract." (Topacio v. CA, G.R. No. 102606, July perfected. These situations do not obtain in the
3, 1992; Villongco Realty v. Bormaheco, G.R. present case, as neither of the parties claimed that
No. L-26872, July 25, 1975). the P20,000.00 was given merely as guarantee by
the respondents, as vendees, that they would not
2. Simeon cannot justify his refusal to proceed back out from the sale. (Heirs of Pangan v. Spouses
with the sale by the fact that the deal is Perreras, G.R. No. 157374, Aug. 27, 2009)
financially disadvantageous to him. Having
made a bad bargain is not a legal ground for VI. FORMATION OF CONTRACT OF SALE
pulling out of a binding contract of sale, in the
absence of some actionable wrong by the Note: see Introduction, Stages of Contract of Sale
other party (Vales v. Villa, G.R. No. 10028, Dec. pp. 230-234
16, 1916), and no such wrong has been
committed by Bert. (2002 Bar Question) A. MANNER OF TRANSFER
Q: Spouses Pangan owned a lot and a two-door Q: What is the effect of delivery?
apartment. The wife, Consuelo Pangan agreed to
sell the properties to spouses Perreras. Consuelo A: GR: Title /ownership is transferred
received P20,000 from the respondents as earnest
money with a receipt that also contained the terms XPN: Contrary is stipulated as in the case of:
of agreement. Later on, the parties agreed to 1. Pactum reservatii in domini – agreement
increase the price from P540,000 to P580,000. that ownership will remain with seller
Spouses Perreras issued two checks in compliance until full payment of price (Contract to
to the new agreement amounting to P200,000 sell);
and P250,000. Consuelo, however, refused to 2. Sale on acceptance/approval;
accept the checks. She justified her refusal by 3. Sale on return;
saying that her children, co-owners of the subject 4. There is implied reservation of ownership;
properties, did not agree to sell the properties.
Consuelo offered to return the P20,000 earnest Note: Seller bears expenses of delivery.
money to the spouses buyers but the latter
rejected it. Hence, Consuelo filed a complaint for Q: Lagrimas Boy borrowed P15,000 from spouses
consignation. Spouses Perreras insisted on Ramos. Thereafter, Boy executed a Deed of
enforcing the agreement, hence they filed an Absolute Sale with the Ramoses involving a house
action for specific performance against. In and lot. The price agreed upon was P31,000. It was
Consuelo’s answer, she claimed that the contract alleged that Boy’s debt is to be deducted, so the
became ineffective for lack of the requisite consent spouses needed only to pay P16,000. Because the
from the co-owners, her children. Decide. Ramoses were not yet in immediate need of the
properties, Lagrimas stayed therein. Later on,
A: The presence of Consuelo’s consent and, Lagrimas went to the wife, Erlinda, asking that
corollarily, the existence of a perfected contract they execute a Kasunduan. In the Kasunduan, it
between the parties are further evidenced by the states that the spouses still had a remaining
payment and receipt of P20,000.00, an earnest balance of P16,000 and that interest is to be
money by the contracting parties’ common usage. deducted in favor of the spouses so that would
The law on sales, specifically Article 1482 of the leave a balance of P8,500. The Kasunduan was
Civil Code, provides that whenever earnest money notarized, however Erlinda changed her mind
is given in a contract of sale, it shall be considered upon signing. According to her, she realized that
as part of the price and proof of the perfection of they already paid P31,000 to Lagrimas when the
the contract. Although the presumption is not Deed of Sale was executed. When the spouses
conclusive, as the parties may treat the earnest Ramos already needed to occupy the land,
254 CIVIL LAW TEAM

SALES
Lagrimas refused to vacate. She invoked the delivery, it is necessary that the act of delivery,
Kasunduan. Decide. whether constructive or actual, should be coupled
with the intention of delivering the thing. The act,
A: A review of the Deed shows no indication that without the intention, is insufficient. Inasmuch as
there was a balance left to be paid to Lagrimas. there was neither physical nor constructive delivery
Under Article 1477 of the Civil Code, the ownership of a determinate thing, (in this case, the subject
of the thing sold shall be transferred to the vendee motor vehicle) the thing sold remained at the
upon the actual or constructive delivery thereof. In seller’s risk. The Union Motor should therefore bear
addition, Article 1498 of the Civil Code provides the loss of the subject motor vehicle after its agent
that when the sale is made through a public allegedly stole the same. (Union Motor Corp. v. CA,
instrument, as in this case, the execution thereof G.R. No. 117187, July 20, 2001)
shall be equivalent to the delivery of the thing
which is the object of the contract, if from the deed Q: How may the buyer accept the delivery of the
the contrary does not appear or cannot clearly be thing sold?
inferred. In this case, the Deed of Absolute Sale
does not contain any stipulation against the A:
constructive delivery of the property to private 1. Express – he intimates to seller that he has
respondents. In the absence of stipulation to the accepted
contrary, the ownership of the property sold passes 2. Implied
to the vendee upon the actual or constructive a. Buyer does not act inconsistent with
delivery thereof. The Deed of Absolute Sale, ownership of seller after delivery
therefore, supports private respondents’ right of b. Retains without intimating to seller that
material possession over the subject property. (Boy he has rejected
v. Court of Appeals, et. al, G.R. No. 125088, April 14,
2004) Q: What is the effect if the buyer refuses to accept
despite delivery of the object of the sale?
Q: Spouses Bernal purchased a jeepney from
Union Motor to be paid in installments. They then A: Delivery is completed. Since delivery of the
executed a promissory note and a deed of chattel subject matter of the sale is an obligation on the
mortgage in favor of Union Motor which in turn part of the seller, the acceptance thereof by the
assigned the same with Jardine Finance. To buyer is not a condition for the completeness of the
effectuate the sale as well as the assignment of delivery. (Villanueva, p. 117)
the promissory note and chattel mortgage, the
spouses were required to sign documents, one of Note: Thus, even with such refusal of acceptance,
which was a sales invoice. Although the Spouses delivery (actual/constructive), will produce its legal
effects. (e.g. transferring the risk of loss of the subject
have not yet physically possessed the vehicle,
matter to the buyer who has become the owner
Union Motor’s agent required them to sign the
thereof) (Villanueva, p. 117)
receipt as a condition for the delivery of the
vehicle. It was discovered that the said agent stole Under Art. 1588, when the buyer’s refusal to accept
the vehicle even prior to its delivery to the the goods is without just cause, the title thereto passes
spouses. Was there a transfer of ownership of the to him from the moment they are placed at his
subject vehicle? disposal. (Villanueva, p. 117)
A: No. The issuance of a sales invoice does not Q: Is payment of the purchase price essential to
prove transfer of ownership of the thing sold to the transfer ownership?
buyer; an invoice is nothing more than a detailed
statement of the nature, quantity and cost of the A: Unless the contract contains a stipulation that
thing sold and has been considered not a bill of ownership of the thing sold shall not pass to the
sale. purchaser until he has fully paid the price,
ownership of the thing sold shall be transferred to
The registration certificate signed by the spouses the vendee upon the actual or constructive delivery
does not conclusively prove that constructive thereof. (Diaz, p. 48)
delivery was made nor that ownership has been
transferred to the respondent spouses. Like the Q: What are the effects of a sale of goods on
receipt and the invoice, the signing of the said installment?
documents was qualified by the fact that it was a
requirement of Union Motor for the sale and A:
financing contract to be approved. In all forms of
255
1. Goods must be delivered in full except when bill of exchange by returning the bill of
stipulated lading to the seller
2. When not examined by the buyer – it is not 4. When sale is not VALID
accepted until examined or at least had 5. When the seller is not the owner of the goods
reasonable time to examine
XPNs:
Q: When may the buyer suspend payment of the a. Estoppel: when the owner is precluded
price? from denying the sellers authority to sell
b. Registered land bought in good faith:
A: GR: Ratio: Buyer need not go beyond the
1. If he is disturbed in the possession or Torrens title
ownership of the thing bought c. Order of Courts in a Statutory Sale
2. If he has well-grounded fear that his d. When the goods are purchased in a
possession or ownership would be Merchant’s store, Fair or Market (Art.
disturbed by a vindicatory action or 1505)
foreclosure of mortgage.
6. When goods are held by a third party
Note: These grounds are not exclusive. It can only
be exercised if the price or any part thereof has XPN: Third person acknowledges to the buyer
not yet been paid and the contract is not yet that he holds the goods in behalf of the buyer
consummated. (Art. 1590) If the disturbance is (Art. 1521, NCC)
caused by the existence of non-apparent
servitude, the remedy is rescission. 7. On sale or return – The ownership passes to
buyer upon delivery, but he may revest
XPN: ownership in the seller by returning or
1. Seller gives security for the return of the tendering the goods within the time fixed in
price in a proper case; the contract or within reasonable time. (Art.
2. A stipulation that notwithstanding any 1502, NCC)
such contingency, the buyer must make
payment; SALE ON TRIAL, APPROVAL OR SATISFACTION
3. Disturbance or danger is caused by the
seller; Q: What is sale on trial, approval or satisfaction?
4. If the disturbance is a mere act of
trespass; A: It is a contract in the nature of an option to
5. Upon full payment of the price. purchase if the goods prove to be satisfactory, the
approval of the buyer being a condition precedent.
B. WHEN DELIVERY DOES NOT TRANSFER TITLE
Q: In this kind of sale, when is ownership deemed
Q: When does delivery does not transfer title? transferred?
A: A:
1. Sale on Trial, Approval, or Satisfaction 1. When buyer signifies approval or acceptance
2. When there is an EXPRESS RESERVATION to the seller or does any act adopting the
a. If it was stipulated that ownership shall transaction
not pass to the purchaser until he has 2. If buyer did not signify approval or acceptance,
fully paid the price (Art. 1478) but retains the goods without giving notice of
3. When there is an IMPLIED RESERVATION rejection after the expiration of the period
a. When goods are shipped, but the bill of fixed or of reasonable time (Art. 1502, NCC)
lading states that goods are deliverable to
the seller or his agent, or to the order of Q: What are the rules in case of sale on trial,
the seller or his agent approval or satisfaction?
b. When the bill of lading is retained by the
seller or his agent A:
c. when the seller of the goods draws on the Title Remains with seller
buyer for the price and transmits the bill
of exchange and the bill of lading to the
buyer , and the latter does not honor the
256 CIVIL LAW TEAM

SALES
GR: Borne by seller 3. Quasi-tradition – delivery of rights, credits or

XPN: incorporeal property, made by:
Risk of Loss 1. Buyer is at fault a. Placing titles of ownership in the hands of
2. Buyer agreed to bear the buyer;
the loss b. Allowing buyer to make use of rights
GR: Buyer must give goods 4. Tradition by operation of law – Execution of a
a trial public instrument is equivalent to delivery. But
As to trial XPN: Buyer need not do so to be effective, it is necessary that the seller
if it is evident that it have such control over the thing sold that, at
cannot perform the work. the moment of sale, its material delivery could
When period within It runs only when all the have been made.
which buyer must parts essential for the
signify his acceptance operation of the object has GR: There is presumption of delivery
runs been delivered
Validity of stipulation XPN:
that a 3rd person must Valid, provided the 3rd a. Contrary stipulation;
satisfy approval or person is in good faith b. When at the time of execution, subject
satisfaction matter was not subject to the control of
If the sale is made to a seller;
Generally, it cannot be c. Seller has no capacity to deliver at time of
buyer who is an expert
considered a sale on execution;
on the object
approval
purchased d. Such capacity should subsist for a
reasonable time after execution of
C. KINDS OF DELIVERY instrument.
Q: What are the different kinds of delivery? Note: Delivery should be coupled with intention of
delivering the thing, and acceptance on the part of the
A: buyer to give legal effect of the act. Without such
1. Actual – thing sold is placed under the control intention, there is no such tradition.
and possession of buyer/agent;
2. Constructive – does not confer physical Q: How is incorporeal property delivered?
possession of the thing, but by construction of
law, is equivalent to acts of real delivery. A:
1. When sale is made through a public
Requisites: instrument (Art. 1498, NCC)
a. The seller must have control over the 2. By placing the titles of ownership in the
thing possession of the buyer
b. The buyer must be put under control 3. When buyer uses and enjoys the rights
c. There must be intention to deliver the pertaining to the incorporeal property with the
thing for purposes of ownership consent of the seller (Art. 1501, NCC)
i. Tradicion Symbolica – delivery of certain Q: Susan invested in commodity futures trading

symbols representing the thing in OCP, which involves the buying or selling of a
ii. Tradicion Instrumental – delivery of the specified quantity and grade of a commodity at a
instrument of conveyance. future date at a price established at the floor of
iii. Traditio Longa Manu – Delivery of thing the exchange. As per terms of the trading contract,
by mere agreement; when seller points to customer's orders shall be directly transmitted by
the property without need of actually OCP as broker to its principal, Frankwell
delivering Enterprises, which in turn must place the
iv. Tradicion Brevi Manu – Before contract of customer's orders with the Tokyo Exchange. In this
sale, the would-be buyer was already in case, however, there is no evidence of such
possession of the would-be subject transmission. When Susan withdrew her
matter of sale investment, she was not able to recover the entire
v. Constitutum Possessorium – at the time of amount. She thus filed a complaint and the trial
perfection of contract, seller continues to court ruled in her favor, saying that the contract is
have possession merely as a holder a species of gambling and therefore void. Is the
court’s ruling correct?
257
A: Yes. A trading contract is a contract for the sale of the property. Is there a constructive delivery of
of products for future delivery, in which either seller the subject properties?
or buyer may elect to make or demand delivery of
goods agreed to be bought and sold, but where no A: None. As a general rule, when the sale is made
such delivery is actually made. In this case, no through a public instrument, the execution thereof
actual delivery of goods and commodity was shall be equivalent to the delivery of the thing
intended and ever made by the parties. In the which is the object of the contract, if from the deed
realities of the transaction, the parties merely the contrary does not appear or cannot clearly be
speculated on the rise and fall in the price of the inferred. And with regard to movable property, its
goods/commodity subject matter of the delivery may also be made by the delivery of the
transaction. If Susan’s speculation was correct, she keys of the place or depository where it is stored or
would be the winner and OCP, the loser, so OCP kept. In order for the execution of a public
would have to pay her the "margin". But if she was instrument to effect tradition, the purchaser must
wrong in her speculation then she would emerge as be placed in control of the thing sold. However, the
the loser and OCP, the winner. OCP would then execution of a public instrument only gives rise to
keep the money or collect the difference from her. a prima facie presumption of delivery. Such
This is clearly a form of gambling provided for with presumption is destroyed when the delivery is not
unmistakable certainty under Article 2018. (Onapal effected because of a legal impediment. It is
Phils. Commodities, Inc. vs. CA and Susan Chua, G.R. necessary that the vendor shall have control over
No. 90707, Feb. 1, 1993) the thing sold that, at the moment of sale, its
material delivery could have been made. Thus, a
Note: Futures Commission Merchant/Broker refers to person who does not have actual possession of the
a corporation or partnership, which must be registered thing sold cannot transfer constructive possession
and licensed as a Futures Commission by the execution and delivery of a public
Merchant/Broker and is engaged in soliciting or in instrument. In this case, there was no constructive
accepting orders for the purchase or sale of any delivery of the machinery and equipment upon the
commodity for future delivery on or subject to the execution of the deed of absolute sale or upon the
rules of the contract market and that, in connection issuance of the gate pass since it was not petitioner
with such solicitation or acceptance of orders, accepts
but Creative Lines which had actual possession of
any money, securities or property (or extends credit in
the property. The presumption of constructive
lieu thereof) to margin, guarantee or secure any trade
or contract that results or may result therefrom.
delivery is not applicable as it has to yield to the
reality that the purchaser was not placed in
Q: Asset Privatization (petitioner) entered into an possession and control of the property. (Asset
absolute deed of sale over certain machinery and Privatization Trust v. T.J. Enterprises, G.R. No.
refrigeration equipment with T.J. Enterprises 167195, May 8, 2009)
(respondent) on an as-is-where-is basis.
Respondent paid the full amount of P84,000.00 as Q: Given that actual possession, control and
evidenced by a receipt. After two days, enjoyment is a main attribute of ownership, is
respondent demanded the delivery of the symbolic delivery by mere execution of the deed
machinery. The subject properties were located in of conveyance sufficient to convey ownership over
a compound under the possession of Creative property?
Lines, Inc. Some time after, respondent was able
to pull out from the petitioner’s compound the A: Yes, possession is also transferred along with
subject by means of a gate pass issued by the ownership thereof by virtue of the deed of
petitioner. However, during the hauling of the conveyance. The mere execution of the deed of
second lot, only nine items were pulled out conveyance in a public document is equivalent to
instead of sixteen because Creative Lines’ the delivery of the property, prior physical delivery
employees prevented respondent from hauling or possession is not legally required. The deed
the remaining machinery and equipment. operates as a formal or symbolic delivery of the
Respondent filed a complaint for specific property sold and authorizes the buyer or
performance and damages against petitioner and transferee to use the document as proof of
Creative Lines. Petitioner argued that upon the ownership. Nothing more is required. (Sps. Sabio v.
execution of the deed of sale it had complied with International Corporate Bank, Inc. et. at. G.R. No.
its obligation to deliver the object of the sale since 132709, Sept. 4, 2001)
there was no stipulation to the contrary. It further
argued that being a sale on an as-is-where-is basis, Q: Can delivery be effected through a carrier?
it was the duty of respondent to take possession
258 CIVIL LAW TEAM

SALES
A: GR: Yes, if the seller is authorized. Delivery to

carrier is delivery to the buyer. A:
1. Goods must be delivered in full except when
XPN: stipulated
1. A contrary intention appears 2. When not examined by the buyer – it is not
2. Implied reservation of ownership under accepted until examined or at least had
Art. 1503, pars 1, 2, 3. reasonable time to examine
Q: What are the kinds of delivery to carrier? Q: When is the seller not bound to deliver the
thing sold?
A:
1. FAS (Free Along Side) – when goods are A:
delivered alongside the ship, there is already 1. If the buyer has not paid the price;
delivery to the buyer 2. No period for payment has been fixed in the
2. FOB (Free On Board) – when goods are contract;
delivered at the point of shipment, delivery to 3. A period for payment has been fixed in the
carrier by placing the goods on vessel is contract but the buyer has lost the right to
delivery to buyer make use of the time.
3. CIF (Cost, Insurance, Freight) –
a. When buyer pays for services of carrier, D. DOUBLE SALE
delivery to carrier is delivery to buyer,
carrier as agent of buyer; Q: When is there a double sale?
b. When buyer pays seller the price – from
the moment the vessel is at the port of A: There is double sale when the same object of the
destination, there is already delivery to sale is sold to different vendees.
buyer
4. COD (Collect On Delivery) – the carrier acts for Note: Requisites:
the seller in collecting the purchase price, 1. Same subject matter
which the buyer must pay to obtain possession 2. Same immediate seller
of the goods. 3. Two or more different buyers
4. Both sales are valid
Q: What are the seller’s duties after delivery to the
carrier? Q: What is the rule on double sale?
A: A: First in time, priority in right

1. To enter on behalf of the buyer into such
contract reasonable under the circumstances; Note: Rule on Double Sale regarding immovables:
2. To give notice to the buyer regarding necessity GR: Apply Art.1544
of insuring the goods. XPN: Sale of registered lands – apply Torrens
System
Q: Where is the place of delivery?
Q: What are the rules according to Article 1544 of
A: the Civil Code?
1. That agreed upon
2. Place determined by usage of trade A:
3. Seller’s place of business 1. Movable – Owner who is first to possess in
4. Seller’s residence good faith
5. In case of specific goods, where they can be 2. Immovable –
found a. First to register in good faith
b. No inscription, first to possess in good
Q: When should the object be delivered? faith
c. No inscription & no possession in good
A: faith – Person who presents oldest title in
1. Stipulated time good faith
2. If there is none, at a reasonable hour.
E. PROPERTY REGISTRATION DECREE
Q: What are the effects of a sale of goods on
installment? 1. REQUISITES FOR REGISTRATION OF DEED OF
SALE IN GOOD FAITH
259
owner's duplicate certificate is presented with such

Q: What are the rules in the application for land instrument.
registration?
XPN: except in cases expressly provided for in
A: the decree or upon order of the court, for
1. The application for land registration shall be in cause shown.
writing and signed by the application or the
person duly authorized in his behalf. It shall be Q: What is the effect of the production of a
sworn in the place where it was signed. duplicate certificate of title?
2. If there is more than one applicant, the
application shall be signed and sworn to by A: It shall be conclusive authority from the
and in behalf of each. registered owner to the Register of Deeds to enter
a new certificate or to make a memorandum of
Q: What shall be contained in the application? registration in accordance with such instrument,
and the new certificate or memorandum shall be
A: binding upon the registered owner and upon all
1. Description of the land persons claiming under him, in favor of every
2. Citizenship and civil status of the applicant purchaser for value and in good faith.
3. If married, the name of the wife or husband
4. If the marriage has been legally dissolved, Q: What are the other payments to be made by
when and how the marriage relation the seller in the registration of property?
terminated
5. Full names and addresses of all occupants of A: The seller should pay capital gains tax and
the land and those of the adjoining owners, if documentary registration fees. The rate of capital
known, and, if not known, it shall state the gains tax is 6% of capital gains based on purchase
extent of the search made to find them. price, fair market value or zonal value, whichever is
higher.
Q: Suppose the applicant is a non-resident of the
Philippines, what are the requirements? Q: Spouses Guimba are the registered owners of a
parcel of land. The wife entrusted her copy of the
A: If the applicant is not a resident of the Owner’s Duplicate Certificate of Title to De La
Philippines, he shall file with his application an Cruz as collateral for a loan. Later on, De La Cruz
instrument in due form appointing an agent or
received a phone call from the wife, informing her
representative residing in the Philippines, giving his
that she had changed her mind and will no longer
full name and postal address, and shall therein
agree that the service of any legal process in the obtain the loan, consequently asking for her TCT
proceedings under or growing out of the back. However, the certificate had been deposited
application made upon his agent or representative in a bank. When she inquired at the bank, they
shall be of the same legal effect as if made upon the told her that the certificate was not there. The
applicant within the Philippines. wife received a telegram from Abad reminding her
of the maturity of her mortgage. The spouses was
Q: Where shall the application for land registration not aware of any actual mortgage involving their
be filed? property until the receipt of such telegram. Hence,
the spouses filed an adverse claim. Abad, in his
A: It shall be filed I the Court of First Instance of the
answer, alleged that spouses Guimba made a
province or city where the land is situated.
connivance with De La Cruz to defraud him. Is
2. ACCOMPANIED BY VENDOR’S DUPLICATE Abad an innocent holder for value?
CERTIFICATE OF TITLE, PAYMENT OF CAPITAL
GAINS TAX, AND DOCUMENTARY TAX A: The main purpose of land registration, covered
REGISTRATION FEES by PD 1529, is to facilitate transactions relative to
real estate by giving the public the right to rely
Q: In the registration of a voluntary instrument, is upon the face of the Torrens certificate of title.
a duplicate of certificate of title required? Therefore, as a rule, the purchaser is not required
to explore further than what the Certificate
A: GR: Yes. No voluntary instrument shall be indicates on its face. This rule however
registered by the Register of Deeds, unless the applies only to innocent purchasers for value and in
good faith; it excludes a purchaser who has
260 CIVIL LAW TEAM

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knowledge of a defect in the title of the vendor, or Note: Where one sale is absolute and the other is a
of facts sufficient to induce a reasonably prudent pacto de retro transaction where the period to redeem
man to inquire into the status of the property. has not yet expired, Art. 1544 will not apply. (Pineda,
Under Section 32 of PD 1529, an innocent p. 223)
purchaser for value is deemed to include an
innocent mortgagee for value. By insisting on the Q: Juliet offered to sell her house and lot, together
application of PD 1529 in his favor, petitioner begs with all the furniture and appliances therein, to
the question. He invokes Sections 52 and 53 of the Dehlma. Before agreeing to purchase the property,
law, which protects innocent mortgagees for value, Dehlma went to the Register of Deeds to verify
but which the RTC has already determined he Juliet’s title. She discovered that while the
was not. As already discussed, such factual property was registered in Juliet’s name under the
determination by the trial court is conclusive, Land Registration Act, as amended by the Property
because he did not question it in the proper forum. Registration Decree, it was mortgaged to Elaine to
The logical consequence, therefore, is the secure a debt of P80, 000. Wanting to buy the
inapplicability of the said law to his factual property, Dehlma told Juliet to redeem the
situation. Preliminarily, we should stress that the property from Elaine, and gave her an advance
remedy of appeal by certiorari under Rule 45 of the payment to be used for purposes of releasing the
Rules of Court contemplates only questions of law, mortgage on the property. When the mortgage
not of fact. Therefore, a party who files a Rule 45 was released, Juliet executed a Deed of Absolute
petition waives the opportunity to inquire into the Sale over the property which was duly registered
findings of fact of the lower court. Coming to the with the Registry of Deeds, and a new TCT was
present case, the paramount question regarding issued in Dehlma’s name. Dehlma immediately
the good faith of petitioner is obviously one of fact. took possession over the house and lot and the
(Abad v. Spouses Guimba, G.R. No. 157002, July 29, movables therein. Thereafter, Dehlma went to the
2005) Assessor’s Office to get a new tax declaration
under her name. She was surprised to find out that
Q: Ten Forty Realty purchased from Galino a parcel the property was already declared for tax
of land. However, the Deed of Sale was not purposes in the name of XYZ Bank which had
recorded in the Registry of Deeds. Subsequently, foreclosed the mortgage on the property before it
Galino sold the same property to Cruz who was sold to her. XYZ Bank was also the purchaser
immediately took possession of the said property. in the foreclosure sale of the property. At that
Who has a better right between Ten Forty and time, the property was still unregistered but XYZ
Cruz? Bank registered the Sheriff’s Deed of Conveyance
A: In the absence of the required registration, the in the day book of the Register of Deeds under Act
law gives preferential right to the buyer who in 3344 and obtained a tax declaration in its name.
good faith is first in possession. The subject Was Dehlma a purchaser in good faith?
property had not been delivered to Ten Forty;
hence, it did not acquire possession either A: Yes, Dehlma is a purchaser in good faith. She
materially or symbolically. As between the two learned about the XYZ tax declaration and
buyers, therefore, respondent was first in actual foreclosure sale only after the sale to her was
possession of the property. (Ten Forty Realty & registered. She relied on the certificate of title of
Dev’t. Corp. v. Cruz, G.R. No. 151212, Sept. 10, her predecessor-in-interest. Under the Torrens
2003) System, a buyer of registered lands is not required
by law to inquire further than what the Torrens
Q: Explain the principle of prius tempore, potior certificate indicates on its face. If a person proceeds
jure. to but it relying on the title, that person is
considered a buyer in good faith.
A: Knowledge by the first buyer of the second sale
cannot defeat the first buyer’s rights except when The “priority in time” rule could not be invoked by
the second buyer first registers in good faith the XYZ Bank because the foreclosure sale of the land in
second sale. Conversely, knowledge gained by the favour of the bank was recorded under Act 3344,
second buyer of the first sale defeats his rights even the law governing transactions affecting
if he is first to register, since such knowledge taints unregistered land, and thus, does not bind the land.
his registration with bad faith to merit the
nd Q: Who as between Dehlma and XYZ Bank has a
protection of Art. 1544 (2 par.), the second realty
buyer must act in good faith in registering his deed better right to the house and lot?
of sale. (Diaz, p. 125)
A: Between Dehlma and the bank, the former has a
better right to the house and lot.
261
Q: Who owns the movables inside the house? A: Deterioration is the lowering of the value or
character of a thing. It normally occurs by reason of
A: Unless there is a contrary stipulation in the ordinary wear and tear. (Pineda, Credit, p. 20)
absolute deed of sale, Dehlma owns the movables
covered by the Deed of Sale and her ownership is B. WHEN LOSS OCCURRED BEFORE PERFECTION
perfected by the execution and delivery of public
document of sale. The delivery of the absolute deed Q: What is the rule when the loss occurred before
of sale is a symbolical delivery of the house and lot, perfection?
including the contents of the house. This is an
obligation to deliver a specific thing, which includes A: Such loss or deterioration shall pertain to the
the delivery of the specific thing itself and all of its purported seller, since he owns the thing. Res perit
accessions and accessories even though they may domino—owner bears the risk of loss. (Villanueva,
not have been mentioned (Art. 1166, CC). (2008 Bar p. 345, 2009 ed.)
Question)
C. WHEN LOSS OCCURRED AT THE TIME OF
Q: Does prior registration by the second buyer of a PERFECTION
property subject of a double sale confer ownership
or preferred right in his favor over that of the first Q: What is the effect when the loss occurred at the
buyer? time of perfection of the contract of sale?
A: Prior registration of the disputed property by the A: GR: When the object of the contract is entirely
second buyer does not by itself confer ownership or lost, the contract shall be without effect.
a better right over the property. Article 1544
requires that such registration must be coupled XPN: In case of partial loss, the buyer may
with good faith. choose between withdrawing from the
contract and demanding the remaining part. If
Knowledge gained by the first buyer of the second he chooses the latter, he shall pay the
sale cannot defeat the first buyer's rights except remaining part’s corresponding price in
where the second buyer registers in good faith the proportion to the total sum agreed upon. (Art.
second sale ahead of the first, as provided by the 1493, NCC)
Civil Code.
Q: In the total or partial loss or deterioration of a
Knowledge gained by the second buyer of the first mass of specific goods without the knowledge of
sale defeats his rights even if he is first to register the seller, what are the options of the buyer with
the second sale, since such knowledge taints his regard to the sale?
prior registration with bad faith (Art. 1544) (Uraca,
et. al v. CA, G.R. No. 115158, Sept. 5, 1997) A:
1. He may treat the sale as avoided or cancelled
VIII. RISK OF LOSS 2. He may continue with the sale with respect to
the available or remaining goods (Art. 1494,
A. GENERAL RULE NCC)
Q: When is a thing considered lost? Q: What is the effect suppose the buyer chooses to
continue with the sale of the remaining goods?
A: It is understood that the thing is lost when it:
1. perishes, or A: The remaining goods shall pass in ownership to
2. goes out of commerce, or the buyer but subject to proportionate reduction of
3. disappears in such a way that its existence the price. But this is only capable only if the goods
is unknown or cannot be recovered. (Art. are divisible or capable of being divided. (Pineda, p.
nd
1189, 2 par.) 122, 2010 ed.)
XPN: In an obligation to deliver a generic thing, D. WHEN LOSS OCCURRED AFTER PERFECTION
the loss or destruction of anything of the same BUT BEFORE DELIVERY
kind does not extinguish the obligation (Art.
1263, NCC)
Q: Who bears the risk of loss or deterioration?
Q: What is deterioration?
262 CIVIL LAW TEAM

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A: Q: What is the purpose of the Documents of Title?

BEFORE Res perit domino – Seller is the
PERFECTION owner so seller bears risk of loss A:
1. Evidence of possession or control of goods
Res perit domino described therein
2. Medium of transferring title and possession
AT Contract shall be without any effect over the goods described therein without
PERFECTION – the seller bears the loss since the
having to effect actual delivery (Villanueva,
buyer is relieved of his obligation
2009 ed.)
under the contract
3. The custody of a negotiable warehouse
Two Views:
Paras: Buyer, except:
receipts issued to the order of the owner, or to
1. when object sold consists of bearer, is a representation of title upon which
fungible goods for a price fixed bona fide purchasers for value are entitled to
AFTER rely , despite breaches of t rust or violations of
2. when seller is guilty of fraud,
PERFECTION agreement on the part of the apparent owner
negligence, default, or violation
BUT (Siy Cong Bieng v. HSBC, 56 Phil 598)
of contractual terms; or
BEFORE
3. when object sold is generic.
DELIVERY
Q: What is the rationale behind a document of
Tolentino: Seller; title?
Deterioration & fruits – Buyer bears
loss A: Merchants are able to transact with goods and
Res perit domino merchandise without having to physically carry
them around, and that buyers should be assured
Buyer becomes the owner so buyer that they may deal with the evidence thereof with
AFTER bears risk of loss the same effect as though they could feel the
DELIVERY merchandise themselves. (Villanueva, p. 303, 2009
Delivery extinguish ownership vis-a-
ed.)
vis the seller & creates a new one in
favor of the buyer
Negotiable Documents of Title
Q: What is the effect of the loss of the thing
Q: What is a Negotiable Document of Title?
subject of the contract at the time of sale?
A: A document of title which states that the goods
A:
referred therein will be delivered to the bearer, or
1. Total loss – contract is void & inexistent
to the order of any person named in such
2. Partial loss – buyer may elect between
document (Art. 1509, NCC).
withdrawing from the contract or demanding
the remaining part, paying its proportionate
Q: Who may negotiate a Negotiable Document of
price
Title?
IX. DOCUMENTS OF TITLE
A:
1. Owner
Q: What is a Document of Title?
2. Person to whom the possession or custody of
the document has been entrusted by the
A: A document used in the ordinary course of
owner
business in the sale or transfer of goods , as proof
a. If bailee undertakes to deliver the goods
of the possession or control of the goods , or
to such person
authorizing or purporting to authorize the
b. If document is in such form that it may be
possessor of the document to transfer or receive,
negotiated by delivery.
either by endorsement or by delivery, goods
represented by such document (Art. 1636).
Non-Negotiable Documents of Title
Q: What may be considered as a document of
Q: What are Non-negotiable documents of title?
title?
A:
A: A document of title of goods includes any bill of
1. They are delivered only to a specified person
lading, dock warrant, quedan, or warehouse receipt
or order. (Villanueva, p. 301, 2009 ed.)
263
2. Carrier will not deliver the goods to any holder XPN:

of the document or to whom such document 1. When the document is first surrendered;
may have been endorsed by the consignee or
3. Must present the deed of sale or donation in 2. When its negotiation is enjoined.
his favour
Note: The bailee shall in no case be compelled to
Q: What are the warranties of seller of documents deliver the actual possession of the goods until
of title? the document is:
1. Surrendered to him; or
A: 2. Impounded by the court.
1. Genuineness of the Document (Art. 1519, NCC)
2. Legal right to negotiate or transfer
3. No knowledge of fact which would impair the Q: What is the reason behind this prohibition?
validity or worth of the document
4. Right to transfer Title to the goods and A: This is to protect the bailee from liability as the
merchantability or fitness for a particular document may have been negotiated by the holder
purpose, whenever such warranties would to subsequent transferees for value and in good
have been implied had the contract transfer faith. He may be liable for damages if he cannot
the goods without a document. produce and deliver the goods later. (Pineda, p.
181, 2010 ed.)
Rules Regarding Levy and Garnishment of Goods
Q: What are the rights of a creditor whose debtor
Q: What does a person to whom a non-negotiable is the owner of a negotiable document of title?
instrument has been transferred but not
negotiated, acquire as against the transferor? A: He is entitled to such aid from courts of
appropriate jurisdiction by:
A: He acquires: 1. injunction;
1. Title to the goods, subject to the terms of 2. attaching such document;
any agreement with the transferor; 3. as regards property which cannot be
2. Right to notify the bailee who issued the readily attached or levied upon by
document of the transfer thereof, and ordinary legal process - satisfying the
thereby to acquire the direct obligation of claim by means allowed by law or equity.
such bailee to hold possession of the (Art. 1520, NCC)
goods for him according to the terms of
the document. X. REMEDIES OF AN UNPAID SELLER
Q: How may the transferor’s creditor defeat the A. DEFINITION OF UNPAID SELLER
aforementioned rights of the transferee?
Q: Who is an unpaid seller?
A: Prior to the notification to such bailee by the
transferor or transferee of a non-negotiable A: The seller of goods is deemed to be an unpaid
document of title, the title of the transferee to the seller either:
goods and the right to acquire the obligation of 1. when the whole of the price has not been
such bailee may be defeated by the transferor’s paid or tendered; or
creditor by the levy of an attachment or execution 2. when a bill of exchange or other
upon the goods. (Art. 1514, NCC) negotiable instrument has been received
as conditional payment, and the condition
Q: If the goods are delivered to a bailee by the on which it was received has been broken
owner or by a person whose act in conveying the by reason of the dishonor of the
title to them to a purchaser in good faith for value instrument, the insolvency of the buyer,
and a negotiable instrument was issued for them, or otherwise.
can the said goods be attached, garnished or
Note: It includes an agent of the seller to whom the bill
levied upon?
of lading has been indorsed, or consignor or agent who
has himself paid, or is directly responsible for the
A: GR: No, the goods cannot be attached, garnished price, or any other person who is in the position of a
or levied upon while they are in the bailee’s seller.
possession.
264 CIVIL LAW TEAM

SALES
Q: When may the seller still be considered as c. Buyer in default for unreasonable
unpaid even though the title to the goods has time
passed to the buyer? 4. Special Right to Rescind
A: Whenever the seller was only paid partially, he Requisites:

remains an unpaid seller. (Pineda, p. 197, 2010 ed.) a. Expressly stipulated OR buyer is in
default for unreasonable time
B. REMEDIES OF UNPAID SELLER b. Notice needed to be given by seller
to buyer
Q: What are the remedies of an Unpaid Seller?
Note: Ownership of goods already with buyer but
A: seller may still rescind; ownership is destroyed even
I. Ordinary without court intervention but in ordinary sale, need
1. Action for Price to go to court.
Exercised when:
a. ownership has passed to buyer; Q: What are the instances when possessory lien is
b. price is payable on a day certain lost?
c. goods cannot readily be resold for
reasonable price and Art. 1596 is A:
inapplicable 1. Seller delivers without reserving ownership in
2. Action for Damages – In case of wrongful goods or right to possess them
neglect or refusal by the buyer to accept 2. Buyer or agent lawfully obtains possession of
or pay for the thing sold goods
II. Special 3. Waiver
1. Possessory Lien – Seller not bound to
deliver if buyer has not paid him the Note: Seller loses lien when he parts with goods (but
price. It is exercisable only in following still, stoppage in transitu can be exercised)
circumstances:
a. goods sold without stipulation as to Q: What is the right of stoppage in transitu?
credit
b. goods sold on credit but term of A: The seller may resume possession of the goods
credit has expired at any time while they are in transit, and he will
c. buyer becomes insolvent then become entitled to the same rights in regard
to the goods as he would have had if he had never
Note: When part of goods delivered, may parted with the possession. (Art. 1530, NCC)
still exercise right on goods undelivered Q: When are goods considered to be in transit?
2. Stoppage in Transitu A:
1. After delivery to a carrier or other bailee and
Requisites: I-SENT-U before the buyer or his agent takes delivery of
a. Insolvent buyer them; and
b. Seller must Surrender the negotiable 2. If the goods are rejected by the buyer, and the
document of title, if any carrier or other bailee continues in possession
c. Seller must bear the Expenses of of them. (Art. 1531, par. 1)
delivery of the goods after the
exercise of the right. Q: When are goods deemed to be no longer in
d. Seller must either actually take transit?
possession of the goods sold or give
Notice of his claim to the carrier or A:
other person in possession 1. After delivery to the buyer or his agent
e. Goods must be in Transit 2. If the buyer/agent obtains possession of the
f. Unpaid seller goods at a point before the destination
originally fixed;
3. Special Right to Resell the Goods 3. If the carrier or the bailee acknowledges that
Exercised when: he holds the goods in behalf of the buyer/ his
a. Goods are perishable, agent;
b. Stipulated the right of resale in case 4. If the carrier or bailee wrongfully refuses to
of default, or deliver the goods to the buyer or his agent.
(Villanueva, p. 181)
265
Q: What is the effect of exercising the special right A:

of resale? 1. The buyer may accept only the goods which
were included in the contract and reject the
A: The unpaid seller shall not be liable to the excess.
original buyer upon the sale or for any profit made 2. The buyer may accept the entire goods
by such resale, but may recover from the buyer delivered and he shall pay for them at the
damages for any loss occasioned by the breach of contract rate. (Art. 1522, NCC)
the sale. (Art. 1533, NCC)
Q: What is the rule when the seller delivers goods
Q: Is notice to the defaulting buyer required in the which are mixed with other goods of different
resale of goods? description not included in the contract?
A: GR: No. A: The buyer may accept the goods which are in
accordance with the contract and reject the rest.
XPN: Where the right to resell is not based on (Art. 1522, NCC)
the perishable nature of the goods or upon an
express provision of the sale. Q: What if the subject matter is indivisible?
Note: Notice of time and place of resale is not A: The buyer may reject the whole of the goods.
essential to the validity of such resale. (Art. 1433, NCC) (Art. 1522, NCC)
Q: What is the effect of exercising the special right Q: What is the duty of the seller with regard to
to rescind? accessions and accessories?
A: The unpaid seller shall not be liable to the buyer A: The seller has the duty to preserve the thing and
upon the sale, but may recover from the buyer its accessions and accessories from the time of the
damages for any loss occasioned by the breach of perfection of the contract of sale. (Art. 1537, NCC)
the sale. (Art. 1534, NCC)
Note: In case of loss or deterioration, the seller is liable
Q: When is a buyer deemed insolvent? for damages or the buyer may seek rescission with
damages. However, if loss or deterioration is due to a
A: One is deemed insolvent when he either ceased fortuitous event, the seller is not liable. (Art. 1538,
to pay his debts in the ordinary course of business NCC)
or cannot pay his debts as they become due,
INSTALLMENT SALES LAW
whether insolvency proceedings have been
commenced or not. (Villanueva, p. 369, 2009 ed.)
Q: What is the Installment Sales Law?
XI. PERFORMANCE OF CONTRACT
A: Commonly known as the Recto Law. It is
embodied in Art. 1484 of the NCC which provides
A. DELIVERY OF THING SOLD
for the remedies of a seller in the contracts of sale
of personal property by installments.
1. SALE OF MOVABLES
Note: Art. 1484 of the NCC incorporates the provisions
Q: What is the rule when the seller delivers goods
of Act No. 4122 passed by the Philippine Legislature on
lesser than what he has contracted to sell? Dec. 9, 1939, known as the "Installment Sales Law" or
the "Recto Law," which then amended Art. 1454 of the
A: Civil Code of 1889.
1. The buyer may reject the goods delivered and
he shall have no liability Q: To what does the Recto Law apply?
2. The buyer may accept the goods delivered, but
he will pay the contract price, if he has A: This law covers contracts of sale of personal
knowledge that the seller is not going to property by installments (Act No. 4122). It is also
deliver all the goods contracted for (Art. 1522, applied to contracts purporting to be leases of
NCC) personal property with option to buy, when the
lessor has deprived the lessee of the possession or
Q: What is the rule when the seller delivers goods enjoyment of the thing. (PCI Leasing and Finance
greater than what he has contracted to sell?
266 CIVIL LAW TEAM

SALES
Inc. v. Giraffe- X Creative Imaging, Inc., G.R. No. consequently there is no contract to rescind.
142618, July 12, 2007) (Villanueva, p. 381, 2009 ed.)
Q: What are the alternative remedies in case of B. SALE OF IMMOVABLES

sale of personal property in installments?
Q: What is the rule when the sale of immovable is
A: by unit of measure or number?
1. Specific Performance: Exact fulfillment should
the buyer fail to pay A: GR: The seller must deliver all that may have
been stated in the contract.
GR: If availed of, the unpaid seller cannot
anymore choose other remedies; XPN: If impossible to deliver all, the buyer may
choose between:
XPN: if after choosing, it has become 1. proportional reduction of the price
impossible, rescission may be pursued 2. rescission of the contract, provided the
deficiency is at least 1/10 of the area stated
2. Rescission: Cancel the sale if buyer fails to pay in the contract (Art. 1539, NCC)
2 or more installments. Deemed chosen when:
a. Notice of rescission is sent Q: what is the prescription period for the action of
b. Takes possession of subject matter of sale rescission of contract?
c. Files action for rescission
3. Foreclosure: Foreclose on chattel mortgage if A: 6 months from the day of delivery. (Art. 1543,
buyer fails to pay 2 or more installments NCC)
GR: Actual foreclosure is necessary to bar REALTY INSTALLMENT BUYER ACT

recovery of balance
Q: What is the Realty Installment Buyer Act?
XPN: Mortgagor refuses to deliver property
to effect foreclosure; expenses incurred in A: Commonly known as the “957 Law.” It is
attorneys fees, etc. embodied in R.A. 6552 which provides for certain
protection to particular buyers of real estate
Q: When the lessor of the property chose to payable on installments. The law declares as "public
deprive the lessee of the subject personal policy to protect buyers of real estate on
property, can the former recover any unpaid installment payments against onerous and
rentals from the latter? oppressive conditions.
A: In choosing, through replevin, to deprive the Note: The purpose of the law is to protect buyers in
respondent of possession of the leased equipment, installment against oppressive conditions.
the petitioner waived its right to bring an action to
recover unpaid rentals on the said leased items. Q: What are the transactions/sale covered by the
Maceda Law?
Q: What is the rationale of Recto Law?
A: The law involves the sale of immovables on
A: To remedy the abuses committed in connection installment (Maceda Law, R.A. 6552).
with the foreclosure of chattel mortgages and to 1. Coverage: Residential Real Estate
prevent mortgagees from seizing the mortgaged (Villanueva, p. 431)
property, buying it at a foreclosure sale for a low 2. Exclude:
price and then bringing suit against the mortgagor a. Industrial lots
for a deficiency judgment. (Villanueva, p. 278, 2009 b. Commercial buildings (and
ed.) commercial lots by implication)
c. Sale to tenants under agrarian laws
Q: Does Recto Law cover a contract to sell
movables? Q: What are the transactions/sale excluded by the
Maceda Law?
A: No. Because when the suspensive condition
upon which the contract is based fails to A:
materialize, it would extinguish the contract, and 1. Sales covering industrial lots
267
2. Sales covering commercial buildings (and every year of installment payments made,
commercial lots by implication) to pay the unpaid installments without
3. Sales to tenants under agrarian reform laws interest.
Note: The list is not exclusive. (Villanueva, p. 416, NCC) If the contract is cancelled, the seller shall
refund to the buyer the cash surrender
Q: What are the rights granted to buyers? value equivalent to fifty percent (50%) of
the total payments made, and after five
A: years of installments, an additional five
1. Buyer paid at least 2 years installment percent (5%) every year but not to exceed
a. Pay w/o interest the balance within grace ninety percent (90%) of the total payments
period of 1 month for every year of made.
installment payment. Grace period to be
exercised once every 5 years. 2. In case the installments paid were less than
b. When no payment – cancelled; buyer 2 years, the seller shall give the buyer a
entitled to 50% of what he has paid + 5% grace period of not less than 60 days. If the
for every year but not exceeding 90% of buyer fails to pay the installments due at the
payments made expiration of the grace period, the seller
may cancel the contract after 30 days from
Note: Cancellation to be effected 30 days receipt by the buyer of the notice of
from notice & upon payment of cash cancellation or demand for rescission by
surrender value. notarial act. (Rillo v. CA, G.R. No. 125347
June 19, 1997)
2. Buyer paid less than 2 years installment
a. Grace period is not less than 60 days from The Recto Law (Art.1484) refers to sale of movables
due date payable in installments and limiting the right of
b. Cancellation if failure to pay w/in 60 days seller, in case of default by the buyer, to one of
grace three remedies:
c. 30 days notice before final cancellation 1. Exact fulfillment;
2. Cancel the sale of two or more installments
Note: buyer can still pay w/in the 30 days have not been paid;
period with interest.
3. Foreclose the chattel mortgage on the
things sold, also in case of default of two or
Q: What are the other rights granted to a buyer?
more installments, with no further action
against the purchaser. (1999 Bar Question)
A:
1. Sell or assign rights to another
Q: Bernie bought on installment a residential
2. Reinstate contract by updating within 30 days
subdivision lot from DEVLAND. After having
before and cancellation
faithfully paid the installments for 48 months,
3. Deed of Sale to be done by notarial act
Bernie discovered that DEVLAND had failed to
4. Pay full installment in advance the balance of
develop the subdivision in accordance with the
price anytime w/o interest
approved plans and specifications within the time
5. Have full payment annotated in certificate of
frame in the plan. He thus wrote a letter to
title
DEVLAND informing it that he was stopping
payment. Consequently, DEVLAND cancelled the
Note: Applies to contracts even before the law was
sale and wrote Bernie, informing him that his
enacted. Stipulation to the contrary is void
payments are forfeited in its favor.
1. Was the action of DEVLAND proper?
Q: What are the so-called “Maceda” and “Recto”
Explain.
laws in connection with sales on installments?
2. Discuss the rights of Bernie under the
Give the most important features on each law.
circumstances.
3. Supposing DEVLAND had fully developed
A: The Maceda Law (R.A. 6552) is applicable to sales
the subdivision but Bernie failed to pay
of immovable property on installments. The most
further installments after 4 years due to
important features are:
business reverses. Discuss the rights and
obligations of the parties.
1. After having paid installments for at least
two years, the buyer is entitled to a
A:
mandatory grace period of one month for
268 CIVIL LAW TEAM

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1. Assuming that the land is a residential seller of his refusal in the absence of a contrary
subdivision project under P.D. No. 957 (The stipulation. (Art. 1587, NCC)
Subdivision and Condominium Buyers
Protective Decree), DEVLAND's action is not Note: If the refusal is without just cause, the title
proper because under Section 23 of said passes to the buyer from the moment the goods are
Decree, no installment payment shall be placed at his disposal. (Art. 1588, NCC)
forfeited to the owner or developer when the
buyer, after due notice, desists from further Q: What is the rule on the inspection of goods?
payment due to the failure of the owner-
developer to develop the subdivision A: GR: If the goods have not yet been previously
according to the approved plans and within examined, the buyer is not deemed to have
the time limit for complying with the same. accepted them unless and until he has had
reasonable to examine them (Art. 1584, NCC)
2. Under the same Section of the Decree, Bernie
may, at his option, be reimbursed the total XPNS:
amount paid including amortization interests 1. The buyer had reasonable time to inspect
but excluding delinquency interests at the legal the goods but he failed to do so
rate. He may also ask the Housing and Land 2. Stipulation to the contrary
Use Regulatory Board to apply penal sanctions 3. C.O.D. sales
against DEVLAND consisting of payment of
administrative fine of not more than B. PAYMENT OF PRICE
P20.000.00 and/or imprisonment for not more
than 20 years. Q: How is payment made?
3. Under R.A. No. 6552 (Maceda Law), DEVLAND A: Price is paid at the time and place stipulated in
has the right to cancel the contract but it has the contract. It is made to the person in whose
to refund Bernie the cash surrender value of favor the obligation has been constituted or his
the payments on the property equivalent to successor in interest, or any person authorized to
50% of the total payments made. (2005 Bar receive. (Villanueva, p. 297, 2009 ed.)
Question)
Q: When is interest required to be paid?
INSPECTIONS AND ACCEPTANCE
A: SFD
Q: How is acceptance made? 1. When it is Stipulated
2. When the object delivered produced
A: It is made at the time and place stipulated in the Fruits or income
contract. If there is no stipulation, it shall be made 3. When the buyer is in Default from the time
at the time and place of the delivery of the thing. of demand (Villanueva, p. 297, 2009 ed.)
(Art. 1582, NCC)
Q: What is a warranty?
Q: When is it deemed that the buyer has accepted
the goods? A: A statement or representation made by the
seller of goods, as part of the contract of sale,
A: having reference to the character, quality, or title,
1. When he intimates to the seller that he has of the goods, and by which he promises or
accepted them undertakes to insure that certain facts are or shall
2. When the goods have been delivered and he be as he then represents.
does any act inconsistent with the ownership
of the seller Note: May either be express or implied.
3. When, after the lapse of reasonable time, he
retains the goods without intimating to the Q: What is the effect of a breach of warranty?
seller that he rejected them (Art. 1585, NCC)
A: Buyer may:
Q: What is the rule on refusal to accept the goods 1. Refuse to proceed with the contract; or
by the buyer? 2. Proceed with the contract; waive the
condition.
A: The buyer is not bound to return the goods to
the seller and it is sufficient that he notifies the
269
Note: If the condition is in the nature that it should buyer; or made 3rd party defendant
happen, the non-performance may be treated as a through 3rd party complaint brought
breach of warranty. by buyer
e. No waiver on the part of the buyer
Q: What are the kinds of warranties? Distinguish.
Note: For eviction – disturbance in law is
A: required and not just trespass in fact.
1. Express
2. Implied 3. Warranty against encumbrances (non-
apparent)
A. EXPRESS WARRANTIES
Requisites:
Q: What are express warranties? a. immovable sold is encumbered with
non-apparent burden or servitude
A: Any affirmation of fact or any promise by the not mentioned in the agreement
seller relating to the thing if the natural tendency of b. nature of non-apparent servitude or
such affirmation or promise is to induce the buyer burden is such that it must be
to purchase the same, and if the buyer purchases presumed that the buyer would not
the thing relying thereon. (Art. 1546) have acquired it had he been aware
thereof
Q: What are the requisites of express warranties?
XPN: warranty not applicable when non-
A: AIR apparent burden or servitude is recorded
1. It must be an Affirmation of fact relating in the Registry of Property – unless there
to the subject matter of sale is expressed warranty that the thing is
2. Natural tendency is to Induce buyer to free from all burdens & encumbrances
purchase subject matter
3. Buyer purchases the subject matter 4. Warranty against Hidden Defects
Relying thereon
Requisites: HENNAS
Q: What is the liability of the seller for breach of a. Defect is important or Serious
express warranties? i. The thing sold is unfit for the
use which it is intended
A: The seller is liable for damages. (Villanueva, p. ii. Diminishes its fitness for such
249) use or to such an extent that
the buyer would not have
B. IMPLIED WARRANTIES acquired it had he been aware
thereof
Q: What are implied warranties? b. Defect is Hidden
c. Defect Exists at the time of the sale
A: Warranties deemed included in all contracts of d. Buyer gives Notice of the defect to
sale by operation of law. (Art. 1547) the seller within reasonable time
e. Action for rescission or reduction of
1. Warranty that seller has right to sell – the price is brought within the
refers to consummation stage. Not proper period
applicable to sheriff, auctioneer, i. 6 months – from delivery of the
mortgagee, pledge thing sold
ii. Within 40 days – from the
2. Warranty against eviction delivery in case of animals
f. There must be No waiver of
Requisites: JPENS warranty on the part of the buyer.
a. Buyer is Evicted in whole or in part
from the subject matter of sale Q: When is implied warranty not applicable?
b. Final Judgment
c. Basis of eviction is a right Prior to A: ASAP
sale or act imputable to seller 1. “As is and where is” sale
d. Seller has been Summoned in the 2. Sale of second hand articles
suit for eviction at the instance of 3. Sale by virtue of authority in fact or law
270 CIVIL LAW TEAM

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4. Sale at public auction for tax delinquency 5. The damages and interests and
ornamental expenses if sale was made in
D. EFFECTS OF WAIVER OF IMPLIED WARRANTIES bad faith.
Q: What are the effects of waiver of an implied Note: Vendor is liable for any hidden defect even if he
warranty? is not aware. (Caveat Venditor)
A: Purchaser must be aware of the title of the vendor.

1. Seller in bad faith & there is waiver against (Caveat Emptor)
eviction –void
2. When buyer w/o knowledge of a particular Q: What are the rights of buyer in case of partial
risk, made general renunciation of warranty – eviction?
is not a waiver but merely limits liability of
seller in case of eviction A:
3. When buyer with knowledge of risk of eviction 1. Restitution (with obligation to return the thing
assumed its consequences & made a waiver – w/o other encumbrances than those which it
seller not liable (applicable only to waiver of had when he acquired it)
warranty against eviction) 2. Enforcement of warranty against eviction
(Paras, p. 153 and Art. 1556)
WARRANTY AGAINST EVICTION
WARRANTY AGAINST HIDDEN DEFECT
Q: What is a warranty against eviction?
Q: What is a hidden defect?
A: In a contract of sale, unless a contrary intention
appears, there is an implied warranty on the part of A: A hidden defect is one which is unknown or
the seller that when the ownership is to pass, and could not have been known to the buyer. (Diaz, p.
that the buyer shall from that time have and enjoy 145)
the legal and peaceful possession of the thing. (Art.
st
1547, 1 paragraph) Note: Seller does not warrant patent defect; Caveat
emptor (buyer beware)
Q: What is covered by a warranty against eviction?
Q: What is a redhibitory defect?
A: It covers eviction by a final judgment based on a
A: It is a defect in the article sold against which
right prior to the sale or an act imputable to the
defect the seller is bound to warrant. The vice must
vendor, the vendee is deprived of the whole or of a
constitute an imperfection, a defect in its nature, of
part of the thing purchased.
certain importance; and a minor defect does not
give rise to redhibition. (De Leon, Comments and
The vendor shall answer for the eviction even
Cases on Sales and Lease, 2005 ed, p. 318)
though nothing has been said in the contract on the
subject. (Art. 1548, NCC)
Q: What is a redhibitory defect on animals?
Q: What is the effect of a breach of warranty
A: If the hidden defect of animals, even in case a
against eviction?
professional inspection has been made, should be
of such a nature that expert knowledge is not
A: The buyer shall have the right to demand the
sufficient to discover it, the defect shall be
seller:
considered as redhibitory.
1. The return of the value which the thing
sold had at the time of the eviction, be it
Q: When is the sale of animal void?
greater or lesser than the price of the sale
2. The income or fruits, if he has been
A: The sale is void if animal is:
ordered to deliver them to the party who
1. Suffering from contagious diseases;
won the suit against him
2. Unfit for the use or service for which they
3. The costs of suit which caused the
were purchased as indicated in the
eviction, and, in a proper case, those of
contract
suit brought against the vendor for the
waranty
Q: When is a vendor responsible for hidden
4. The expenses of contract if buyer has paid
defects?
them
271
A: If the hidden defects which the thing sold may 1. Withdrawing from the contract, or
have: 2. Demanding a proportionate reduction of
1. Render it unfit for the use for which it is the price, with damages in either case.
intended, or
2. Diminish its fitness for such use to such an Q: Is there a waiver of warranty against hidden
extent that, had the vendee been aware defects when the lessee inspected the premises
thereof, he would not have acquired it or and pushed through with the contract?
would have given a lower price for it. (Art.
1561) A: Yes. Under Arts. 1561 and 1653 of the Civil Code,
the lessor is responsible for warranty against
Q: Up to what extent does the seller warrant hidden defects, but he is not answerable for patent
against hidden defects? defects or those, which are visible. Jon de Ysasi
admitted on cross-examination that he inspected
A: The seller is responsible to the vendee for any the premises three or four times before signing the
hidden faults or defects in the thing sold, even lease contract. During his inspection, he noticed the
though he was not aware thereof. rotten plywood on the ceiling, which in his opinion
was caused by leaking water or termites. Yet, he
Q: When is the seller not answerable for the decided to go through with the lease agreement.
defects of the thing sold? Hence, respondents cannot be held liable for the
alleged warranty against hidden defects. (Jon and
A: Marissa De Ysasi v. Arturo and Estela Arceo, G.R.
1. For patent defects or those which are visible, No. 136586, Nov. 22, 2001)
or
2. Even for those which are not visible if the IMPLIED WARRANTIES IN CASE OF SALE OF GOODS
buyer is an expert who, by reason of his trade
or profession, should have known them (Art. Q: What are the specific implied warranties in sale
1561), or of goods?
3. If the contrary has been stipulated, and the
vendor was not aware of the hidden faults or A:
defects in the thing sold. (Art. 1566) 1. Warranty of fitness
Q: What is the effect of a breach of warranty GR: No implied warranty

against hidden defects?
XPN:
A: It would depend on whether the seller had a. Buyer manifests to the seller the
knowledge of such defect and whether there has particular purpose for which the goods
been a waiver of the warranty. are required; and
1. If the thing should be lost in consequence b. Buyer relies upon the seller’s skill or
of the hidden faults, and seller was aware judgment
of them – he shall: 2. Warranty of merchantability – That goods are
a. bear the loss, reasonably fit for the general purpose for
b. return the price and which they are sold.
c. refund the expenses of the contract
with damages CAVEAT EMPTOR
2. If the thing is lost and seller was not Q: What does the principle of caveat emptor
aware of the hidden faults – he shall: mean?
a. return the price and interest
b. reimburse the expenses of the A: It literally means, ‘Let the buyer beware’. The
contract which the buyer might have rule requires the purchaser to be aware of the
paid, but not for damages. supposed title of the vendor and one who buys
(Villanueva, Law on Sales,2004 ed, without checking the vendor’s title takes all the
pp. 548-549) risks and losses consequent to such failure.
(Agcaoili, p. 184)
Q: What are the remedies of the buyer in case of
sale of things with hidden defects? Q: In what particular sale transactions does caveat
emptor apply?
A: The vendee may elect between:
272 CIVIL LAW TEAM

SALES
A: the contract or demand a proportionate reduction

1. Sales of animals (Art. 1574) of the price, with damages in either case.
2. Double sales (Art. 1544)
3. In sheriff’s sales (Art. 1570) The vendee may also ask for the annulment of the
4. Tax sales (Art. 1547, last paragraph) contract upon proof of error or fraud, in which case
the ordinary rule on obligations shall be applicable.
Note: In the above sales, there is no warranty of title Under the law on obligations, responsibility arising
or quality on the part of the seller. The purchaser who from fraud is demandable in all obligations and any
buys without checking the title of the vendor is waiver of an action for future fraud is void.
assuming all risks of eviction. Responsibility arising from negligence is also
demandable in any obligation, but such liability may
In sheriff’s sales, the sheriff does not guarantee the be regulated by the courts, according to the
title to real property and it is not incumbent upon him circumstances.
to place the buyer in possession of such property.
(Pineda sales, p. 275)
The vendor could likewise be liable for quasi-delict
under Article 2176 of the Civil Code, and an action
Q: Is caveat emptor applicable in sales of
based thereon may be brought by the vendee.
registered land?
While it may be true that the pre-existing contract
between the parties may, as a general rule, bar the
A: No. The purchaser of a registered land under the
applicability of the law on quasi-delict, the liability
Torrens system is merely charged with notice of the
may itself be deemed to arise from quasi-delict, i.e.,
burdens and claims on the property which are
the acts which breaks the contract may also be a
inscribed on the face of certificate of title. (Pineda
quasi-delict. (Coca-Cola Bottlers Philippines, Inc. v.
sales, p. 275)
CA, G.R. No. 110295, Oct. 18, 1993)
Q: Does caveat emptor apply in judicial sales?
Q: What are the instances when the buyer cannot
rescind the sale in case there is a breach of
A: Yes. The purchaser in a judicial sale acquires no
warranty?
higher or better title or right than that of the
A:
judgment debtor. If it happens that the judgment
1. If he knew of the breach of warranty
debtor has no right, interest, or lien on and to the
2. If he fails to return or offer to return goods to
property sold, the purchaser acquires none. (Pineda
seller in substantially as good condition as they
sales, p. 280)
were at time ownership was transferred
3. If he fails to notify the seller within a
E. REMEDIES IN CASE OF BREACH OF WARRANTY reasonable time of his election to rescind
Q: What are the remedies of the buyer in case of Q: Goodyear Philippines sold a car to Anthony Sy.
breach of warranty? Later on, Sy sold the car to Jose Lee. When Lee
tried to register the car in his name, he failed to
A: have it registered because it turned out that the
1. Accept goods & set up breach of warranty by car was stolen before and was only subsequently
way of recoupment in diminution or extinction recovered by Goodyear. However, PNP did not lift
or the price. the alert alarm over the said car. Due to this, the
2. Accept goods & maintain action against seller car was impounded and Lee was sued by PNP. This
for damages problem was relayed by Lee to Sy. It led to Sy filing
3. Refuse to accept goods & maintain action a case against Goodyear for breach of warranty. It
against seller for damages is Sy’s argument that it is Goodyear’s duty to
4. Rescind contract of sale & refuse to receive convey the vehicle to Sy free from all liens,
goods/return them when already received. encumbrances and legal impediments. Was there
a breach of warranty by Goodyear?
Q: Are the remedies of the buyer in case of breach
of warranty absolute? A: No. Upon the execution of the Deed of Sale,
petitioner did transfer ownership of and deliver the
A: No. The vendee's remedies against a vendor with vehicle to Respondent Sy. The impoundment of the
respect to the warranties against hidden defects of vehicle and the failure to register it were clearly
or encumbrances upon the thing sold are not acts that were not deliberately caused by
limited to those prescribed in Article 1567 where petitioner, but that resulted solely from the failure
the vendee, in the case of Arts. 1561, 1562, 1564, of the PNP to lift the latter’s own alarm over the
1565 and 1566, may elect either to withdraw from
273
vehicle. Hence, the former did not breach its plans and within the time limit for complying with
obligation as a vendor to Respondent Sy; neither the same. (Sec. 23, P.D. 957)
did it violate his right for which he could maintain
an action for the recovery of damages. (Goodyear Q: What is the remedy of the buyer in case of non-
Philippines, Inc. v. Sy and Lee, G.R. No. 154554, Nov. compliance by the owner or developer of the
9, 2005) approved plans within the time limit?
F. CONDITION VIS-À-VIS WARRANTY

A: Such buyer may, at his option, be reimbursed the
total amount paid including amortization interests
Q: What is the effect of non-fulfillment of a
but excluding delinquency interests, with interest
condition?
thereon at the legal rate. (Sec. 23, P.D. 957)
A: If imposed on the perfection of contract –
prevents the juridical relation itself from coming Q: Is notice required in the demand of refund?
into existence
A: No. Section 23 of P.D. 957 does not require that
The other party may: a notice be given first by the buyer to the seller
1. Refuse to proceed with the contract before a demand for refund can be made as the
2. Proceed w/ contract, waiving the notice and demand can be made in the same letter
performance of the condition or communication. (Villanueva, p. 408, 2009 ed.)
Q: What is the difference between a condition and Q: What are the rights of the buyer in case he
a warranty? defaults in his installment payment due to causes
other than the failure of the owner or developer
A: to develop the project?
CONDITION WARRANTY
Purports to the A: Where the transaction or contract was entered
Purports to the existence
performance of
of obligation into prior to the effectivity of Republic Act No.
obligation
6552, the defaulting buyer shall be entitled to the
Need not be stipulated;
Must be stipulated to corresponding refund based on the installments
may form part of
form part of the paid after the effectivity of the law in the absence
obligation by provision of
obligation of any provision in the contract to the contrary.
law
Relates to the subject (Sec. 24, P.D. 957)
May attach itself to
matter itself or to
obligation of seller to B. REMEDIES OF THE BUYER
obligation of the seller as
deliver possession &
to the subject matter of
transfer Q: What are the remedies of the buyer?
the sale
XIII. BREACH OF CONTRACT A:

I. Immovables in general
A. REMEDIES OF THE SELLER 1. Disturbed in possession or with
reasonable grounds to fear disturbance –
Note: see Recto and Maceda Law (XI. Performance of Suspend payment
Contract) p. 258 2. In case of subdivision or condo projects –
If real estate developer fails to comply
P.D. 957 (SEC. 23 AND 24) with obligation according to approved
plan:
Q: When will there be non-forfeiture of a. Rescind
installment payments paid by the buyer? b. Suspend payment until seller
complies
II. Movables
A: No installment payment shall be forfeited in
1. Failure of seller to deliver – Action for
favor of the owner or developer when the buyer,
specific performance without giving the
after due notice to the owner or developer, desists
seller the option of retaining the goods on
from further payment due to the failure of the
payments of damages
owner or developer to develop the subdivision or
2. Breach of seller’s warranty – The buyer
condominium project according to the approved
may, at his election, avail of the following
remedies:
274 CIVIL LAW TEAM

SALES
a. Accept goods & set up breach of Q: Should the right to redeem be incorporated in
warranty by way of recoupment in every contract of sale?
diminution or extinction or the price.
b. Accept goods & maintain action A: The right of the vendor to redeem/ repurchase
against seller for damages must appear in the same instrument. However,
c. Refuse to Accept goods & maintain parties may stipulate on the right of repurchase in a
action against seller for damages separate document but in this case, it is valid only
d. Rescind contract of sale & refuse to between the parties and not against third persons.
receive goods/return them when (Pineda, p. 333)
already received.
Q: What is the difference between pre-emption
Note: When the buyer has claimed and been and redemption?
granted a remedy in any of these ways, no other
remedy can thereafter be granted, without A:
prejudice to the buyer’s right to rescind, even if PRE-EMPTION REDEMPTION
previously he has chosen specific performance Arises before sale Arises after sale
when fulfillment has become impossible. There can be rescission
(Villanueva, p. 389 in relation with Art. 1191, NCC) Rescission inapplicable
of original sale
Action is directed against Action is directed against
3. Disturbed in possession or with prospective seller buyer
reasonable grounds to fear disturbance –
Suspend payment B. CONVENTIONAL REDEMPTION
A. CAUSES OF EXTINGUISHMENT Q: What is conventional redemption?
Q: What are the causes for extinguishment of sale? A: Seller reserved the right to repurchase thing sold
coupled with obligation to return price of the sale,
A: A contract of sale is extinguished by: expenses of contract & other legitimate payments
1. Same causes as all other obligations, and the necessary & useful expenses made on the
namely: thing sold
a. Payment or performance
b. Loss of the thing due Note: Right to repurchase must be reserved at the
c. Condonation or remission of the time of perfection of sale. (Pineda, p. 333)
debt
d. Confusion or merger of the rights of C. EQUITABLE MORTGAGE
creditor and debtor
e. Compensation Q: What is an equitable mortgage?
f. Novation
g. Annulment A: One which lacks the proper formalities, form or
h. Rescission words or other requisites prescribed by law for a
i. Fulfillment of resolutory condition mortgage, but shows the intention of the parties to
j. prescription make the property subject of the contract as
2. Causes stated in the preceding articles; security for a debt and contains nothing impossible
3. Conventional Redemption; or or contrary to law
4. Legal redemption
Q: What are the essential requisites of equitable
Q: What is redemption? mortgage?
A: It is a mode of extinguishment wherein the seller A:

has the right to redeem or repurchase the thing 1. Parties entered into a contract of sale
sold upon return of the price paid. 2. Their intention was to secure an existing debt
by way of a mortgage.
Q: What are the kinds of redemption?
Q: What is the rule on the presumption of an
A: equitable mortgage?
1. Legal
2. Conventional A: A sale with conventional redemption is deemed
to be an equitable mortgage in any of the following
cases: (Art. 1602) AIR-STAR
275
1. Price of the sale with right to repurchase A: The contract shall be presumed to be an
is unusually Inadequate equitable mortgage, in any of the following cases:
2. Seller Remains in possession as lessee or (1) When the price of a sale with right to
otherwise repurchase is unusually inadequate; (2) When the
3. Upon or after the expiration of the right vendor remains in possession as lessee or
to repurchase Another instrument otherwise; (3) When upon or after the expiration of
extending the period of redemption or the right to repurchase another instrument
granting a new period is executed extending the period of redemption or granting a
4. Purchaser Retains for himself a part of the new period is executed; (4) When the purchaser
purchase price retains for himself a part of the purchase price; (5)
5. Seller binds himself to pay the Taxes on When the vendor binds himself to pay the taxes on
the thing sold the thing sold; (6) In any other case where it may be
6. In any other case where the real intention fairly inferred that the real intention of the parties
of the parties is that the transaction shall is that the transaction shall secure the payment of a
Secure the payment of a debt or the debt or the performance of any other obligation.
performance of any other obligation. (Article 1602, New Civil Code) Furthermore, a
7. Art. 1602 shall also apply to a contract contract purporting to be a pacto de retro is
purporting to be an Absolute sale. (Art. construed as an equitable mortgage when the
1604) terms of the document and the surrounding
circumstances so require. The law discourages the
Note: In case of doubt in determining whether it is use of a pacto de retro, because this scheme is
equitable mortgage or sale a retro (with right of frequently used to circumvent a contract known as
repurchase); it shall be construed as equitable a pactum commissorium. Jurisprudence has
mortgage. The remedy is reformation. consistently declared that the presence of even just
one of the circumstances set forth in the forgoing
An equitable mortgage is one which although lacking Civil Code provision suffices to convert a contract to
in some formality, or form or words, or other requisites an equitable mortgage. Article 1602 specifically
demanded by a statute, nevertheless reveals the
states that the equitable presumption applies
intention of the parties to charge real property as
to any of the cases therein enumerated. In the
security for a debt, and contains nothing impossible or
contrary to law.
present factual milieu, the vendor retained
possession of the property allegedly sold. Petitioner
Q: Does inadequacy of price constitute proof and her children continued to use it as their
sufficient to declare a contract as one of equitable residence, even after Jonas Ramos had abandoned
mortgage? them. In fact, it remained as her address for the
service of court orders and copies of Respondent
A: Mere inadequacy of the price is not sufficient. Sarao’s pleadings. (Ramos v. Sarao, G.R. No.
The price must be grossly inadequate, or purely 149756. Feb. 11, 2005)
shocking to the conscience. (Diaz, p. 186) Q: Respondent Dizon mortgaged to Monte de
Piedad a parcel of land including the two-storey
Q: Spouses Ramos executed a Deed Of Sale under apartment built thereon to secure a loan.
Pacto De Retro over their conjugal house and lot in Respondent failed to settle the loan, drawing
favor of Susana Sarao. The contract granted the Monte de Piedad to foreclose the mortgage,
Ramos spouses the option to repurchase the consolidate its ownership of the property, and
property within six months plus an interest of 4.5 register it in its name. Monte de Piedad
percent a month. It was further agreed that should nevertheless gave respondent until May 28, 1987
the spouses fail to pay the monthly interest or to to purchase back the property. On the day of the
exercise the right to repurchase within the expiration itself, one of the petitioners on behalf
stipulated period, the conveyance would be of respondent paid for the property. Monte de
deemed an absolute sale. In the succeeding Piedad thereupon executed a deed of sale in favor
months, the wife Myrna Ramos tendered to Sarao of respondent who, the following day, executed a
payment in the form of two manager’s checks, deed of sale in favor of petitioners. Also,
which the latter refused to accept for being respondent and petitioners executed an
allegedly insufficient. Myrna filed a complaint for agreement giving respondent repurchase within
the redemption of the property. She deposited three months from the date of this agreement.
with the RTC two checks that Sarao refused to Failure to repurchase shall result to respondent
accept. Is the contract a Pacto De Retro sale or an vacating the premises and turn over possession
equitable mortgage? Decide. thereof to petitioners. Three months passed
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without respondent repurchasing the property. Intestate Estate of the Late Emigdio Mercado, G.R.
Petitioners registered the Deed of Sale executed No. 155856, May 28, 2004)
by Monte de Piedad in favor of respondent, as
well as the Deed of Sale of the property executed Q: Eulalia was engaged in the business of buying
by respondent in favor of petitioners. and selling large cattle. In order to secure the
Notwithstanding this, respondent failed to vacate financial capital she advanced for her employees
the property. An ejectment case was filed against (biyaheros) she required them to surrender TCT of
respondent. Is the agreement a contract of sale or their properties and to execute the corresponding
an equitable mortgage? Deeds of Sale in her favor. Domeng Bandong was
not required to post any security but when Eulalia
A: It is a contract of sale. The presumption of discovered that he incurred shortage in cattle
equitable mortgage created in Article 1602 of the procurement operation, he was required to
Civil Code is not conclusive. It may be rebutted by execute a deed of sale over a parcel of land in
competent and satisfactory proof of the contrary. In favor of Eulalia. She sold the property to her
the case at bar, ample evidence supports grandniece Jocelyn who thereafter instituted an
petitioners’ claim that the transaction between action for ejectment against the Spouses Bandong.
them and respondent was one of sale with option To assert their right, Spouses Bandong filed an
to repurchase. While after the sale of the property action for annulment of sale against Eulalia and
respondent remained therein, her stay was not in Jocelyn alleging that there was no sale intended
the concept of an owner. Contrary to respondent’s but only equitable mortgage for the purpose of
claim that after the sale of the property in 1987, the securing the shortage incurred by Domeng in the
tax declarations remained in her name and she amount of P70, 000.00 while employed as
continued to pay realty taxes thereon, the record “biyahero” by Eulalia. Was the deed of sale
shows that the 1987 tax declarations were in the between Domeng and Eulalia a contract of sale or
names of Monte de Piedad and an equitable mortgage?
petitioners. (Spouses Cristobal, et. al v. Dizon, G.R.
No. 172771, Jan. 31, 2008) A: It is an equitable mortgage. In executing the said
deed of sale, Domeng and Eulalia never intended
Q: Ceballos was able to borrow from Mercado the transfer of ownership of the subject property
certain sum of money and as security, she but to burden the same with an encumbrance to
executed a Deed of Real Estate Mortgage over the secure the indebtedness incurred by Domeng on
subject property. The said mortgage was not the occasion of his employment with Eulalia. The
registered. Ceballos defaulted. Thereafter, a Deed agreement between Dominador and Eulalia was not
of Absolute Sale was executed by Ceballos and her avoided in its entirety so as to prevent it from
husband whereby the mortgaged property was producing any legal effect at all. Instead, the said
sold to Mercado for the price of P16, 500.00. transaction is an equitable mortgage, thereby
Ceballos offered to redeem the property from merely altering the relationship of the parties from
Mercado for the price of P30, 000.00 but the seller and buyer, to mortgagor and mortgagee,
latter's wife refused since the same was already while the subject property is not transferred but
transferred in their names by virtue of the Deed of subjected to a lien in favor of the latter. (Sps.
Absolute Sale. As a consequence, Ceballos filed Raymundo, et al. v. Sps. Bandong, G.R. No. 171250,
the case contending that the Contract should be Jul. 4, 2007)
declared as an equitable mortgage. Is the
contention of Ceballos correct? D. DISTINGUISHED FROM OPTION TO BUY
A: No. The instances when a contract, regardless of REDEMPTION OPTION TO BUY

its nomenclature, may be presumed to be an Forms part of the contract of Principal and
equitable mortgage are enumerated in Art. 1602 of sale preparatory contract
the Civil Code. Here, none of those circumstances May exist prior to or
were present. The original transaction was a loan. after the perfection of
The right must be imbedded
Ceballos failed to pay the loan; consequently, the the sale, or be
in a contract of sale upon its
parties entered into another agreement — the imbedded in another
perfection
assailed, duly notarized Deed of Absolute Sale, contract upon
which superseded the loan document. Ceballos had perfection
the burden of proving that she did not intend to sell Separate
Does not need a separate
consideration is
the property and that Mercado did not intend to consideration to be valid and
needed for it to be
buy it; and that the new agreement did not embody effective
valid and effective
the true intention of the parties. (Ceballos v.
Redemption period cannot Period for an option
277
exceed 10 years right may exceed 10 2. When there is agreement – should not exceed
years 10 years; but if it exceeded, valid only for the
Notice is required for its first 10 years.
exercise accompanied with 3. When period to redeem has expired & there
Only notice is required
tender of has been a previous suit on the nature of the
payment/consignment contract – seller still has 30 days from final
Its exercise results into judgment on the basis that contract was a sale
Its exercise extinguishes a
the perfection of a with pacto de retro:
existing contract of sale
contract of sale
(Villanueva, pp. 519-520, 2009 ed.) Rationale: no redemption due to erroneous
belief that it is equitable mortgage which can
Q: On May 19, 1951, the spouses-sellers executed be extinguished by paying the loan.
a public instrument of absolute sale in favor of the
buyer for a consideration which is sufficiently 4. When period has expired & seller allowed the
adequate. A few days thereafter, the buyers period of redemption to expire – seller is at
executed in favor of the sellers an option to buy fault for not having exercised his rights so
within one year, the property subject of the should not be granted a new period
absolute sale, which option was extended for a
month. Prior to the expiration of said one-year Note: Tender of payment is sufficient but it is not in
period, the buyer sold said property to a third itself a payment that relieves the seller from his
person. liability to pay the redemption price.
If the spouses-sellers would file an action for Q: When does period of redemption begin to run?
reformation of instrument where they seek
reformation of the absolute sale into one of A:
equitable mortgage, will said action prosper? 1. Right of legal pre-emption or redemption shall
be exercised within 30 days from written
A: No, it will not prosper. If a seller has been notice by the buyer – deed of sale not to be
granted merely an option to buy (not a right to recorded in Registry of Property unless
repurchase) within a certain period, and the price accompanied by affidavit that buyer has given
paid by the buyer is adequate, the sale is absolute notice to redemptioners
and cannot be construed nor presumed to be one 2. When there is actual knowledge, no need to
of equitable mortgage, even if the period within give written notice; period of redemption
which to exercise the option has been extended. begins to run from actual knowledge
(Villarica, et. al. v. CA, G.R. L-19196, Nov. 29, 1968)
Q: Can there an extension of the time to redeem?
Note: SC held that in this case, there was no sale a
retro and that the right of repurchase is not a right A: Yes. Parties may extend the period to redeem as
granted the seller by the buyer in a separate long as the total period shall not exceed ten years.
instrument. Such right is reserved by the vendor in However, such extension can only be granted when
the same instrument of the sale as one of the the original period has not yet expired. Otherwise,
stipulations in the contract. there exists only a promise to sell on the buyer’s
part. (Pineda, pp. 381-382, 2010 ed.)
Also, once the instrument of absolute sale is
executed, the seller can no longer reserve the right F. EXERCISE OF THE RIGHT TO REDEEM
of repurchase and any right thereafter granted the
seller by the buyer cannot be a right of repurchase Q: What are the obligations the vendor a retro if
but some other rights, like that of an option to buy. he desires to redeem?
E. PERIOD OF REDEMPTION A: The vendor a retro must pay or reimburse the

vendee a retro the following:
Q: What is the period of redemption? 1. Price of the sale
2. Expenses of the contract
A: 3. Other legitimate expenses
1. No period agreed upon – 4 years from date of 4. Necessary and useful expenses (Pineda,
contract pp. 397-398, 2010 ed.)
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Q: Is written notice mandatory for the right of confidence, by commission of wrong, or by any
redemption to commence? form of unconscionable conduct, artifice,
concealment, or questionable means, or who in any
A: Yes, the notice must be in writing stating the way against equity and good conscience, either has
execution of the sale and its particulars. It may be obtained or holds the legal right to property which
made in a private or public document. (Pineda, p. he ought not, in equity and good conscience, hold
400) and enjoy. It has been broadly ruled that a breach
of confidence, although in business or social
Q: Is there a prescribed form for an offer to relations, rendering an acquisition or retention of
redeem? property by one person unconscionable against
another, raises a constructive trust. It is raised by
A: There is no prescribed form for an offer to equity in respect of property, which has been
redeem to be properly effected. Hence, it can either acquired by fraud, or where, although acquired
be through a formal tender with consignation of the originally without fraud, it is against equity that it
redemption price within the prescribed period. should be retained by the person holding it. (Arlegui
What is paramount is the availment of the fixed and v. CA G.R. No. 126437, Mar. 6, 2002)
definite period within which to exercise the right of
legal redemption. Note: "A constructive trust is substantially an
appropriate remedy against unjust enrichment. It is
Note: Art. 1623 does not prescribe any distinctive raised by equity in respect of property, which has been
method for notifying the redemptioner. acquired by fraud, or where, although acquired
originally without fraud, it is against equity that it
Q: Is tender of payment necessary for redemption should be retained by the person holding it." (76 Am.
to take effect? Jur. 2d, Sec. 222, p. 447 cited in Arlegui v. CA G.R. No.
126437, Mar. 6, 2002)
A: Tender of payment is not necessary; offer to
redeem is enough. G. LEGAL REDEMPTION
Q: What is the effect of failure to redeem? Q: What is legal redemption?
A: There must be judicial order before ownership of A: Also referred to as “retracto legal”, it is the right
real property is consolidated to the buyer a retro. to be subrogated upon the same terms and
conditions stipulated in the contract, in the place of
Q: Can the vendor a retro be compelled to one who acquires the thing by purchase or by
redeem? dation in payment or by other transaction whereby
ownership is transmitted by onerous title.
A: No. There is no obligation on the part of the
vendor a retro to repurchase. He may or may not Q: What are the instances of legal redemption?
exercise the right to repurchase. (Pineda, p. 402,
2010 ed.) A:
1. Sale of a co-owner of his share to a stranger
TRUST DE SON TORT (Art. 1620)
2. When a credit or other incorporeal right in
Q: What is a trust de son tort? litigation is sold (Art. 1634)
3. Sale of an heir of his hereditary rights to a
A: It is a trust created by the purchase or stranger (Art. 1088)
redemption of property by one other than the 4. Sale of adjacent rural lands not exceeding 1
person lawfully entitled to do so and in fraud of the hectare (Art. 1621)
other. 5. Sale of adjacent small urban lands bought
merely for speculation (Art. 1622)
Q: Do constructive trusts arise only out of fraud or
duress? Q: Are there other instances when the right of
legal redemption is also granted?
A: No. A constructive trust, otherwise known as a
trust ex maleficio, a trust ex delicto, a trust de son A:
tort, an involuntary trust, or an implied trust, is a 1. Redemption of homesteads
trust by operation of law which arises contrary to 2. Redemption in tax sales
intention and in invitum, against one who, by fraud, 3. Redemption by judgment debtor
actual or constructive, by duress or abuse of 4. Redemption in extrajudicial foreclosure
279
5. Redemption in judicial foreclosure of mortgage subdivision project or a condominium unit

in a condominium project;
Q: What is the basis of legal redemption? 2. contract to sell;
3. contract of purchase and sale;
A: It is created partly for reason of public policy and 4. exchange;
partly for the benefit and convenience of the 5. attempt to sell;
redemptioner to afford him a way out of what 6. option of sale or purchase;
might be a disagreeable or inconvenient association 7. solicitation of a sale;
into which he has been in trust. It is intended to 8. offer to sell, directly or by an agent, or by
minimize co-ownership. (Pineda, p. 407, 2010 ed.) a circular, letter, advertisement or
otherwise; and
Q: When does legal redemption period begin to 9. a. privilege given to a member of a
run? cooperative, corporation, partnership, or
any association and/or
A: The right of legal redemption shall not be b. the issuance of a certificate or receipt
exercised except within 30 days from the notice in evidencing or giving the right of
writing by the prospective seller, or seller, as the participation in, or right to, any land in
case may be. The deed of sale shall not be recorded consideration of payment of the
in the Registry of Property unless accompanied by membership fee or dues. (Deemed sale)
an affidavit of the seller that he has given written
notice thereof to all possible redemptioners. (Art. Q: How are the terms “buy” and “purchase”
1623, NCC) defined under the Decree?
H. AGE REDEMPTION A: Shall include any contract to buy, purchase, or

otherwise acquire for a valuable consideration a
XV. LAW ON SALE OF SUBDIVISION AND subdivision lot, including the building and other
CONDOMINIUM (PD 957) improvements, if any, in a subdivision project or a
condominium unit in a condominium project.
SCOPE OF APPLICATION
Q: What is a subdivision project?
Q: Are sales or dispositions of subdivision lots or
condominium units prior to the effectivity of the A: A tract or a parcel of land registered under Act
decree exempt from compliance with the No. 496 which is partitioned primarily for
requirements stated therein? residential purposes into individual lots with or
without improvements thereon, and offered to the
A: No. It shall be incumbent upon the owner or public for sale, in cash or in installment terms.
developer of the subdivision or condominium
project to complete compliance with his or its Note: It shall include all residential, commercial,
obligations as provided in the decree within two industrial and recreational areas as well as open
spaces and other community and public areas in the
years from the date of effectivity of the Decree,
project.
unless otherwise extended by the Authority or
unless an adequate performance bond is filed.
Q: What is a subdivision lot?
Note: Failure of the owner or developer to comply
A: Any of the lots, whether residential, commercial,
with the obligations under this and the preceding
industrial, or recreational, in a subdivision project.
provisions shall constitute a violation punishable under
Sections 38 and 39 of the Decree.
Q: What is a complex subdivision plan?
DEFINITION OF TERMS
A: A subdivision plan of a registered land wherein a
Q: How is “sale” or “sell” defined under the street, passageway or open space is delineated on
Decree? the plan.
A: Shall include: Q: What is a condominium project?

1. Every disposition, or attempt to dispose,
A: The entire parcel of real property divided or to
for a valuable consideration, of a
be divided primarily for residential purposes into
subdivision lot, including the building and
condominium units, including all structures
other improvements thereof, if any, in a
thereon.
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Q: What is a condominium unit? 2. If the conversion desired involves a

condominium project, the same
A: A part of the condominium project intended for procedure shall be followed except that,
any type of independent use or ownership, in addition, the NHA shall act upon and
including one or more rooms or spaces located in approve the plan with respect to the
one or more floors (or part of parts of floors) in a building or buildings included in the
building or buildings and such accessories as may condominium project in accordance with
be appended thereto. the National Building Code (R.A. No.
6541).
Q: Define the following terms: 3. The subdivision plan, as so approved, shall
1. Owner. then be submitted to the Director of
Lands for approval.
A: Registered owner of the land subject of a 4. In case of complex subdivision plans,
subdivision or a condominium project. court approval shall no longer be
required.
2. Developer. 5. The condominium plan as likewise so
approved, shall be submitted to the
A: person who develops or improves the Register of Deeds of the province or city
subdivision project or condominium project for in which the property lies and the same
and in behalf of the owner thereof. shall be acted upon subject to the
conditions and in accordance with the
3. Dealer. procedure prescribed in Section 4 of the
Condominium Act (R.A. No. 4726).
A: any person directly engaged as principal in
the business of buying, selling or exchanging Q: The owner or the real estate dealer interested
real estate whether on a full-time or part-time in the sale of lots or units, respectively, in such
basis. subdivision project or condominium project shall
register the project with the Authority by filing a
4. Broker. sworn registration statement. What shall be
contained in the sworn registration statement?
A: any person who, for commission or other
compensation, undertakes to sell or negotiate A:
the sale of a real estate belonging to another. (a) Name of the owner;
5. Salesman. (b) The location of the owner's principal business

office, and if the owner is a non-resident
A: person regularly employed by a broker to Filipino, the name and address of his agent or
perform, for and in his behalf, any or all representative in the Philippines is authorized
functions of a real estate broker. to receive notice;
REGISTRATION AND LICENSE TO SELL
(c) The names and addresses of all the directors
Q: Upon what agency is exclusive jurisdiction to and officers of the business firm, if the owner
regulate real estate trade and business vested? be a corporation, association, trust, or other
entity, and of all the partners, if it be a
A: National Housing Authority partnership;
Q: What must a registered owner of a parcel of (d) The general character of the business actually
land do if he wishes to convert said property into a transacted or to be transacted by the owner;
subdivision or condominium project? and
A: He shall:
1. Submit his subdivision plan to the (e) A statement of the capitalization of the owner,
Authority which shall act upon and including the authorized and outstanding
approve the same, upon a finding that the amounts of its capital stock and the proportion
plan complies with the Subdivision thereof which is paid-up.
Standards' and Regulations enforceable at
the time the plan is submitted. Q: Part of the required documentary attachments
to the application is a certificate of title to the
281
property which is free from all liens and 1. Sale of a subdivision lot resulting from the
encumbrances. Does this bar an owner of partition of land among co-owners and
mortgaged property from engaging in subdivision co-heirs.
or condominium project while the mortgage is in 2. Sale or transfer of a subdivision lot by the
force? original purchaser thereof and any
subsequent sale of the same lot.
A: No. In case any subdivision lot or condominium 3. Sale of a subdivision lot or a condominium
unit is mortgaged, it is sufficient if the instrument of unit by or for the account of a mortgagee
mortgage contains a stipulation that the mortgagee in the ordinary course of business when
shall release the mortgage on any subdivision lot or necessary to liquidate a bona fide debt.
condominium unit as soon as the full purchase price
for the same is paid by the buyer. Q: When may a license to sell be suspended?
Q: When is a subdivision or condominium project A:

deemed to be registered? 1. Upon verified complaint by a buyer of a
subdivision lot or a condominium unit in any
A: Upon completion of the publication requirement interested party, the Authority may, in its
discretion, immediately suspend the owner's
Note: The fact of such registration shall be evidenced or dealer's license to sell pending investigation
by a registration certificate to be issued to the and hearing of the case.
applicant-owner or dealer. 2. The NHA may motu proprio suspend the
license to sell if, in its opinion, any information
Q: After issuance of the registration certificate,
in the registration statement filed by the
may the owner or dealer already sell subdivision owner or dealer is or has become misleading,
lots or condominium units? incorrect, inadequate or incomplete or the sale
or offering for a sale of the subdivision or
A: No. He must first obtain a license to sell the condominium project may work or tend to
project within two weeks from the registration of work a fraud upon prospective buyers.
such project.
Q: When may a license to sell or registration of a
Q: When is a license to sell issued? subdivision or condominium project be revoked?
A: After an examination of the registration A: The Authority may, motu proprio or upon
statement filed by said owner or dealer and all the verified complaint filed by a buyer of a subdivision
pertinent documents attached thereto, the lot or condominium unit, revoke the registration of
Authority is convinced that the owner or dealer is of any subdivision project or condominium project and
good repute, that his business is financially stable, the license to sell any subdivision lot or
and that the proposed sale of the subdivision lots or condominium unit in said project by issuing an
condominium units to the public would not be order to this effect, with his findings in respect
fraudulent. thereto, if upon examination into the affairs of the
owner or dealer during a hearing, it shall appear
Q: What is the purpose of the requirement of there is satisfactory evidence that the said owner or
posting of a performance bonds before a license to dealer:
sell may be issued? 1. is insolvent; or
2. has violated any of the provisions of this
A: It is to guarantee the construction and Decree or any applicable rule or
maintenance of the roads, gutters, drainage, regulation of the Authority, or any
sewerage, water system, lighting systems, and full undertaking of his/its performance bond;
development of the subdivision project or the or
condominium project and the compliance by the 3. has been or is engaged or is about to
owner or dealer with the applicable laws and rules engage in fraudulent transactions; or
and regulations. 4. has made any misrepresentation in any
prospectus, brochure, circular or other
Q: Is a license to sell and performance bond literature about the subdivision project or
required in all subdivision and condominium condominium project that has been
projects? distributed to prospective buyers; or
5. is of bad business repute; or
A: No. The following transactions are exempt from
said requirements:
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6. does not conduct his business in Q: In making advertisements, does the owner or
accordance with law or sound business developer make warranties relative to such?
principles.
A: Yes.
Note: Where the owner or dealer is a partnership or 1. Advertisements that may be made
corporation or an unincorporated association, it shall through newspaper, radio, television,
be sufficient cause for cancellation of its registration leaflets, circulars or any other form about
certificate and its license to sell, if any member of such the subdivision or the condominium or its
partnership or any officer or director of such operations or activities must reflect the
corporation or association has been guilty of any act or real facts and must be presented in such
omission which would be cause for refusing or manner that will not tend to mislead or
revoking the registration of an individual dealer,
deceive the public.
broker or salesman.
2. The owner or developer shall answerable
and liable for the facilities, improvements,
DEALERS, BROKERS AMD SALESMEN
infrastructures or other forms of
Q: What is the duration of the registration of development represented or promised in
dealers, brokers and salesmen? brochures, advertisements and other
sales propaganda disseminated by the
A: On the thirty-first day of December of each year. owner or developer or his agents and the
same shall form part of the sales
However, in the case of salesmen, their registration warranties enforceable against said
shall also cease upon termination of their owner or developer, jointly and severally.
employment with a dealer or broker.
Note: Failure to comply with these warranties shall
Note: Renewal of registration for the succeeding year also be punishable in accordance with the penalties
shall be granted upon written application therefore provided for in this Decree.
made not less than thirty nor more than sixty days
before the first day of the ensuing year and upon Q: Within what period must the owner or
payment of the prescribed fee, without the necessity developer construct and provide the facilities,
of filing further statements or information, unless improvements, infrastructures and other forms of
specifically required by the Authority. development, including water supply and lighting
facilities, which are offered and indicated in the
All applications filed beyond said period shall be approved subdivision or condominium plans,
treated as original applications. brochures, prospectus, printed matters, letters or
in any form of advertisement?
Q: When can there be refusal or revocation of
registration as dealers, brokers or salesmen? A: GR: Within one year from the date of the
issuance of the license for the subdivision or
A: Such registration may be refused or revoked by
condominium project
the NHA if, after reasonable notice and hearing, it
shall determine that such applicant or registrant XPN: Such other period of time as may be fixed
has: by the Authority.
1. violated any provision of this Decree or
any rule or regulation made hereunder; or REGISTRATION
2. made a material false statement in his
application for registration; or Q: Is registration needed after the execution of a
3. been guilty of a fraudulent act in contract to sell relevant to the sale or conveyance
connection with any sale of a subdivision of subdivision lots and condominium units?
lot or condominium unit; or
4. demonstrated his unworthiness to A: Yes. All contracts to sell, deeds of sale and other
transact the business of dealer, broker, or similar instruments relative to the sale or
salesman, as the case may be. conveyance of the subdivision lots and
condominium units, whether or not the purchase
Note: The suspension or revocation of the registration price is paid in full, shall be registered by the seller
of a dealer or broker shall carry with it all the in the Office of the Register of Deeds of the
suspension or revocation of the registration of all his
province or city where the property is situated.
salesmen.
MORTGAGES
WARRANTIES OF THE OWNER OR DEVELOPER
283
Q: Can mortgage be made by the owner or Where the transaction or contract was entered into
developer without permission? prior to the effectivity of Republic Act No. 6552 on
August 26, 1972, the defaulting buyer shall be
A: No. There must be prior written approval of the entitled to the corresponding refund based on the
Authority. installments paid after the effectivity of the law in
the absence of any provision in the contract to the
Q: When is approval given by the Authority? contrary.
A: When it is shown that the proceeds of the Q: What is the owner or developer’s obligation in
mortgage loan shall be used for the development of case the lot bought and fully-paid by the buyer is
the condominium or subdivision project and mortgaged?
effective measures have been provided to ensure
such utilization. A: In the event a mortgage over the lot or unit is
outstanding at the time of the issuance of the title
ALTERATION IN APPROVED SUBDIVISION PLAN to the buyer, the owner or developer shall redeem
the mortgage or the corresponding portion thereof
Q: What is the rule if the owner desires to make within six months from such issuance in order that
alterations in the approved subdivision plan? the title over any fully paid lot or unit may be
secured and delivered to the buyer in accordance
A: GR: No owner or developer shall change or alter herewith.
the roads, open spaces, infrastructures, facilities for
public use and/or other form of subdivision Q: May the parties waive compliance with the
development as contained in the approved decree?
subdivision plan and/or represented in its
advertisements A: No. Any condition, stipulation, or provision in
contract of sale whereby any person waives
XPN: If he has obtained the permission of the compliance with any provision of the Decree or of
Authority and the written conformity or any rule or regulation issued thereunder shall be
consent of the duly organized homeowners void.
association, or in the absence of the latter, by
the majority of the lot buyers in the TAKE OVER DEVELOPMENT
subdivision.
Q: When can there be a Take-Over Development?
RIGHTS AND REMEDIES OF A BUYER
A: The NHA may take over or cause the
Q: May payment made by a buyer be forfeited in development and completion of the subdivision or
favor of the owner or developer in case the buyer condominium project at the expenses of the owner
desists from further payment due to the failure of or developer, jointly and severally, in cases where
the owner or developer to develop the subdivision the owner or developer has refused or failed to
or condominium project according to the develop or complete the development of the
approved plan within the time limit provided for project as provided for in the Decree.
such? What is the buyer’s remedy in this case?
Note: The Authority may, after such take-over,
A: No, such forfeiture is not allowed. Such buyer demand, collect and receive from the buyers the
may, at his option, be reimbursed the total amount installment payments due on the lots, which shall be
utilized for the development of the subdivision.
paid including amortization interests but excluding
delinquency interests, with interest thereon at the
XVI. THE CONDOMINIUM ACT (RA 4726)
legal rate.
Q: Does a defaulting buyer have any right under PRELIMINARIES

the Decree?
Q: What is a condominium?
A: Yes. The rights of the buyer in the event of this
failure to pay the installments due for reasons other A: It is an interest in real property consisting of
than the failure of the owner or developer to separate interest in a unit in a residential, industrial
develop the project shall be governed by Republic or commercial building and an undivided interest in
Act No. 6552. common, directly or indirectly, in the land on which
it is located and in other common areas of the
building.
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no condominium unit therein shall be

Note: It may include, in addition, a separate interest in conveyed or transferred to persons other than:
other portions of such real property. 1. Filipino citizens, or
2. Corporations at least sixty percent of the
Q: What comprises a real right in condominium? capital stock of which belong to Filipino
citizens
A: The real right in condominium may be ownership
or any other interest in real property recognized by XPN to the XPN: in cases of hereditary
law, on property in the Civil Code and other succession.
pertinent laws.
2. As regards corporations:
Q: What is a condominium unit? Where the common areas in a condominium
project are held by a corporation, no transfer
A: It is a part of the condominium project intended or conveyance of a unit shall be valid if the
for any type of independent use or ownership, concomitant transfer of the appurtenant
including one or more rooms or spaces located in membership or stockholding in the
one or more floors (or part or parts of floors) in a corporation will cause the alien interest in such
building or buildings and such accessories as may corporation to exceed the limits imposed by
be appended thereto. existing laws.
Q: What is a condominium project? Q: What are the incidents of a condominium

grant?
A: It is the entire parcel of real property divided or
to be divided in condominiums, including all A: Unless otherwise expressly provided in the
structures thereon, enabling or master deed or the declaration of
restrictions, the incidents of a condominium grant
Q: What are common areas? are as follows:
1. The boundary of the unit granted are the
A: The entire project excepting all units separately interior surfaces of the perimeter walls,
granted or held or reserved. floors, ceilings, windows and doors
thereof.
Q: What is meant by “to divide” real property?
Note: The following are not part of the unit
A: To divide the ownership thereof or other interest bearing walls, columns, floors, roofs,
therein by conveying one or more condominiums foundations and other common structural
therein but less than the whole thereof. elements of the building:
Q: What is the rule as regards acquisition of a. lobbies, stairways, hallways, and

ownership over common areas? other areas of common use,
b. elevator equipment and shafts,
central heating,
A: Transfer or conveyance of a unit or apartment,
c. central refrigeration and central air-
office or store or other space therein shall include
conditioning equipment,
the transfer or conveyance of the undivided d. reservoirs, tanks, pumps and other
interests in the common areas or, in a proper case, central services and facilities,
the membership or shareholdings in the e. pipes, ducts, flues, chutes, conduits,
condominium corporation wires and other utility installations,
wherever located, except the outlets
Q: Are there any restrictions as regards ownership thereof when located within the
of condominium units provided under the unit.
Condominium Act?
2. There shall pass with the unit, as an
A: appurtenance thereof, an exclusive
1. As regards individuals: easement for the use of the air space
GR: None. encompassed by the boundaries of the
unit as it exists at any particular time and
XPN: where the common areas in the as the unit may lawfully be altered or
condominium project are owned by the reconstructed from time to time.
owners of separate units as co-owners thereof,
285
Note: Such easement shall be automatically 1. three years after damage or destruction
terminated in any air space upon to the project which renders material part
destruction of the unit as to render it thereof unit for its use prior thereto, the
untenantable. project has not been rebuilt or repaired
substantially to its state prior to its
3. Common areas are held in common by damage or destruction, or
the holders of units, in equal shares, one 2. damage or destruction to the project has
for each unit, unless otherwise provided. rendered one-half or more of the units
therein untenantable and that
4. A non-exclusive easement for ingress, condominium owners holding in
egress and support through the common aggregate more than thirty percent
areas is appurtenant to each unit and the interest in the common areas are
common areas are subject to such opposed to repair or restoration of the
easements. project; or
3. the project has been in existence in
5. Each condominium owner shall have the excess of fifty years, that it is obsolete
exclusive right to paint, repaint, tile, wax, and uneconomic, and that condominium
paper or otherwise refinish and decorate owners holding in aggregate more than
the inner surfaces of the walls, ceilings, fifty percent interest in the common
floors, windows and doors bounding his areas are opposed to repair or restoration
own unit. or remodeling or modernizing of the
project; or
6. Each condominium owner shall have the 4. the project or a material part thereof has
exclusive right to mortgage, pledge or been condemned or expropriated and
encumber his condominium and to have that the project is no longer viable, or
the same appraised independently of the that the condominium owners holding in
other condominiums but any obligation aggregate more than seventy percent
incurred by such condominium owner is interest in the common areas are
personal to him. opposed to continuation of the
condominium regime after expropriation
7. GR: Each condominium owner has also or condemnation of a material portion
the absolute right to sell or dispose of his thereof; or
condominium. 5. the conditions for such partition by sale
set forth in the declaration of restrictions,
XPN: If the master deed contains a duly registered in accordance with the
requirement that the property be first terms of the Act, have been met.
offered to the condominium owners
within a reasonable period of time before Q: What is the rule regarding issuance of
the same is offered to outside parties; certificate of title where the enabling or master
deed provides that the land included within a
Q: May common areas be divided through judicial condominium project are to be owned in common
partition? by the condominium owners therein?
A: GR: Common areas shall remain undivided, and A: The Register of Deeds may, at the request of all
there shall be no judicial partition thereof. the condominium owners and upon surrender of all
their "condominium owner's" copies, cancel the
XPN: Where several persons own certificates of title of the property and issue a new
condominiums in a condominium project, an one in the name of said condominium owners as
action may be brought by one or more such pro-indiviso co-owners thereof.
persons for partition thereof by sale of the
entire project, as if the owners of all of the Q: How are deeds, declarations or plans for a
condominiums in such project were co-owners condominium project construed?
of the entire project in the same proportion as
their interests in the common areas: A:
1. Liberally, to facilitate the operation of the
Note: However, a partition shall be made only project
upon a showing that: 2. Provisions shall be presumed to be
independent and severable.
286 CIVIL LAW TEAM

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DECLARATION OF RESTRICTIONS other professional and technical

services;
Q: When should a declaration of restrictions be d. For purchase of materials, supplies
registered and what is the effect of such? and the like needed by the common
areas;
A: The owner of a project shall, prior to the e. For payment of taxes and special
conveyance of any condominium therein, register a assessments which would be a lien
declaration of restrictions relating to such project. upon the entire project or common
areas, and for discharge of any lien
Such restrictions shall constitute a lien upon each or encumbrance levied against the
condominium in the project, and shall insure to and entire project or the common areas;
bind all condominium owners in the project. f. For reconstruction of any portion or
portions of any damage to or
Note: Such liens, unless otherwise provided, may be destruction of the project;
enforced by any condominium owner in the project or g. The manner for delegation of its
by the management body of such project. powers;
h. For entry by its officers and agents
Q: What should a declaration of restrictions into any unit when necessary in
provide? connection with the maintenance or
construction for which such body is
A: The declaration of restrictions shall provide for responsible;
the management of the project by anyone of the i. For a power of attorney to the
following management bodies: management body to sell the entire
1. a condominium corporation, project for the benefit of all of the
2. an association of the condominium owners thereof when partition of the
owners, project may be authorized under
3. a board of governors elected by Section 8 of the Condominium Act,
condominium owners, or which said power shall be binding
4. a management agent elected by the upon all of the condominium owners
owners or by the board named in the regardless of whether they assume
declaration. the obligations of the restrictions or
5. voting majorities, not.
6. quorums, 2. The manner and procedure for amending
7. notices, such restrictions: Provided, That the vote
8. meeting date, and of not less than a majority in interest of
9. other rules governing such body or the owners is obtained.
bodies. 3. For independent audit of the accounts of
the management body;
Q: What may a declaration of restrictions provide? 4. For reasonable assessments to meet
authorized expenditures, each
A: Such declaration of restrictions, among other condominium unit to be assessed
things, may also provide: separately for its share of such expenses
1. As to any such management body; in proportion (unless otherwise provided)
a. For the powers thereof, including to its owners fractional interest in any
power to enforce the provisions of common areas;
the declarations of restrictions; 5. For the subordination of the liens
b. For maintenance of insurance securing such assessments to other liens
policies, insuring condominium either generally or specifically described;
owners against loss by fire, casualty, 6. For conditions, other than those provided
liability, workmen's compensation for in Sections 8 and 13 of the Act, upon
and other insurable risks, and for which partition of the project and
bonding of the members of any dissolution of the condominium
management body; corporation may be made.
c. Provisions for maintenance, utility,
gardening and other services Note: Such right to partition or dissolution
benefiting the common areas, for may be conditioned upon:
the employment of personnel a. failure of the condominium owners to
necessary for the operation of the rebuild within a certain period;
building, and legal, accounting and
287
b. specified inadequacy of insurance

proceeds; CONDOMINIUM CORPORATIONS
c. specified percentage of damage to the
building; Q: What is a condominium corporation?
d. a decision of an arbitrator; or
e. upon any other reasonable condition. A: A corporation specially formed for the purpose,
in which the holders of separate interest shall
Q: What is the duty of the Register of Deeds as automatically be members or shareholders, to the
regards this declaration of restrictions? exclusion of others, in proportion to the
appurtenant interest of their respective units in the
A: The Register of Deeds shall enter and annotate common areas.
the declaration of restrictions upon the certificate
of title covering the land included within the Note: As regards title to the common areas, including
project, if the land is patented or registered under the land, or the appurtenant interests in such areas,
the Land Registration or Cadastral Acts. these may be held by a condominium corporation.
POWERS OF AND RESTRICTIONS UPON Q: What is the term of a condominium

MANAGEMENT BODY corporation?
Q: What are the restrictions imposed by the law A: Co-terminus with the duration of the
upon corporations which is also the management condominium project, the provisions of the
body of the condominium project? Corporation Law to the contrary notwithstanding.
A: The restrictions are as follows: Membership

1. The corporate purposes of such a
corporation shall be limited to the: Q: What are the rules regarding membership in a
a. holding of the common areas, either condominium corporation?
in ownership or any other interest in
real property recognized by law, A: Membership in a condominium corporation,
b. management of the project, and regardless of whether it is a stock or non-stock
c. to such other purposes as may be corporation, shall not be transferable separately
necessary, incidental or convenient from the condominium unit of which it is an
to the accomplishment of said appurtenance.
purposes.
2. The articles of incorporation or by-laws of Note: When a member or stockholder ceases to own a
the corporation shall not contain any unit in the project in which the condominium
provision contrary to or inconsistent with corporation owns or holds the common areas, he shall
the: automatically cease to be a member or stockholder of
a. provisions of the Act; the condominium corporation.
b. enabling or master deed; or
c. declaration of restrictions of the Q: May a condominium corporation sell, exchange,
project. lease or otherwise dispose of the common areas
owned or held by it in the condominium project?
Q: May the management body may acquire and
hold, for the benefit of the condominium owners, A: GR: During its existence, it cannot do so.
tangible and intangible personal property and
dispose of the same by sale or otherwise? XPN: If authorized by the affirmative vote of all
the stockholders or members.
A: Yes, unless otherwise provided for by the
declaration of restrictions. Q: Is the so called appraisal right under the
Corporation Code available to stockholders or
Note: The beneficial interest in such personal property members of a condominium corporation?
shall be owned by the condominium owners in the
same proportion as their respective interests in the A: GR: Not available. The law provides that “the by-
common areas. laws of a condominium corporation shall provide
that a stockholder or member shall not be entitled
A transfer of a condominium shall transfer to the to demand payment of his shares or interest in
transferee ownership of the transferor's beneficial those cases where such right is granted under the
interest in such personal property. Corporation Law xxx”
288 CIVIL LAW TEAM

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common areas, which damage or

XPN: If said stockholder or member consents destruction renders a material part
to sell his separate interest in the project to thereof unfit for its use prior thereto,
the corporation or to any purchaser of the the project has not been rebuilt or
corporation's choice who shall also buy from repaired substantially to its state
the corporation the dissenting member or prior to its damage or destruction; or
stockholder's interest. b. damage or destruction to the project
has rendered one-half or more of the
Note: In case of disagreement as to price, the units therein untenantable and that
procedure set forth in the appropriate provision more than thirty percent of the
of the Corporation Law for valuation of shares members of the corporation, if non-
shall be followed. stock, or the shareholders
representing more than thirty
The corporation shall have two years within percent of the capital stock entitled
which to pay for the shares or furnish a purchaser to vote, if a stock corporation, are
of its choice from the time of award.
opposed to the repair or
reconstruction of the project, or
All expenses incurred in the liquidation of the
interest of the dissenting member or stockholder
c. the project has been in existence in
shall be borne by him. excess of fifty years, that it is
obsolete and uneconomical, and that
Dissolution and Liquidation more than fifty percent of the
members of the corporation, if non-
Q: What is the effect of involuntary dissolution of stock, or the stockholders
a condominium corporation for any of the causes representing more than fifty percent
provided by law? of the capital stock entitled to vote,
if a stock corporation, are opposed
A: to the repair or restoration or
1. The common areas owned or held by the remodeling or modernizing of the
corporation shall, by way of liquidation, be project; or
transferred pro-indiviso and in proportion to d. the project or a material part thereof
their interest in the corporation to the has been condemned or
members or stockholders thereof, subject to expropriated and that the project is
the superior rights of the corporation no longer viable, or that the
creditors. members holding in aggregate more
than seventy percent interest in the
Note: Such transfer or conveyance shall be corporation, if non-stock, or the
deemed to be a full liquidation of the interest of stockholders representing more than
such members or stockholders in the corporation. seventy percent of the capital stock
entitled to vote, if a stock
2. After such transfer or conveyance, the corporation, are opposed to the
provisions of this Act governing undivided co- continuation of the condominium
ownership of, or undivided interest in, the regime after expropriation or
common areas in condominium projects shall condemnation of a material portion
fully apply. thereof; or
e. the conditions for such a dissolution
Q: When may voluntary dissolution of a set forth in the declaration of
condominium corporation be allowed? restrictions of the project in which
the corporation owns or holds the
A: A condominium corporation may be voluntarily common areas, have been met.
dissolved only:
1. when the enabling or the master deed of Note: An action for voluntary dissolution is that under
the project in which the condominium Rule 104 of the Rules of Court.
corporation owns or holds the common
area is revoked; and Q: May the members or stockholders of a
2. upon a showing that: condominium corporation dissolve such
a. three years after damage or corporation?
destruction to the project in which
the corporation owns or holds the A: Yes, by the affirmative vote of all the
stockholders or members thereof at a general or
289
special meeting duly called for the Q: Who should pay for an assessment upon any
purpose: Provided, that all the requirements of condominium made in accordance with a duly
Section 62 of the Corporation Law are complied registered declaration of restrictions?
with.
A: It is an obligation of the owner thereof at the
Q: What is the consequence of voluntary time the assessment is made.
dissolution of a condominium corporation?
Q: What are the rules as regards the notice of
A: GR: The corporation shall be deemed to hold a assessment?
power of attorney from all the members or
stockholders to sell and dispose of their separate A: The notice:
interests in the project. 1. is to be registered with the Register of
Deeds of the city or province where such
XPN: Unless otherwise provided for in the condominium project is located.
declaration of restrictions 2. shall state the following:
a. amount of such assessment and such
Q: How is a condominium corporation liquidated? other charges thereon as may be
authorized by the declaration of
A: Liquidation of the corporation shall be effected restrictions,
by a sale of the entire project as if the corporation b. a description of the condominium
owned the whole thereof, subject to the rights of unit against which same has been
the corporate and of individual condominium assessed, and
creditors. c. the name of the registered owner
thereof.
Q: What should the Court do if, in an action for 3. Such notice shall be signed by an
partition of a condominium project or for the authorized representative of the
dissolution of condominium corporation on the management body or as otherwise
ground that the project or a material part thereof provided in the declaration of restrictions.
has been condemned or expropriated, the Court
finds that the conditions provided for in the Q: What is the effect if the management body
Condominium Act or in the declaration of causes a notice of assessment to be registered
restrictions have not been met? with the register of deeds?
A: The Court may decree a reorganization of the A: The amount of any such assessment plus any
project, declaring which portion or portions of the other charges thereon, such as interest, costs
project shall continue as a condominium project, (including attorney's fees) and penalties, as such
the owners thereof, and the respective rights of may be provided for in the declaration of
said remaining owners and the just compensation, restrictions, shall be and become a lien upon the
if any, that a condominium owner may be entitled condominium assessed.
to due to deprivation of his property.
Note: Effect of payment: Upon payment of said
Note: Upon receipt of a copy of the decree, the assessment and charges or other satisfaction thereof,
Register of Deeds shall enter and annotate the same the management body shall cause to be registered a
on the pertinent certificate of title. release of the lien.
Assessment, Notice thereof and Lien Created Q: What are the rules as regards the lien created in
case of unpaid assessments, etc?
Q: If real property has been divided into
condominiums, how will it be assessed for A: GR: Such lien shall be superior to all other liens
taxation purposes? registered subsequent to the registration of said
notice of assessment
A: Each condominium separately owned shall be
separately assessed, for purposes of real property XPNs:
taxation and other tax purposes to the owners 1. real property tax liens are superior;
thereof and the tax on each such condominium 2. when declaration of restrictions provide
shall constitute a lien solely thereon. for the subordination thereof to any other
liens and encumbrances.
290 CIVIL LAW TEAM

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Q: What is the rule as regards enforcement of the GR: it shall not be the basis of a lien against
lien? the condominium of any other condominium
owner
A: Such liens may be enforced in the same manner
provided for by law for the judicial or extra-judicial XPN: such other owners have expressly
foreclosure of mortgages of real property. consented to or requested the performance
of such labor or furnishing of such materials
Q: Can the management body bid in the or services.
foreclosure sale based on the lien for unpaid
assessments? Note: Such express consent shall be deemed to
have been given by the owner of any
A: GR: No, the management body shall have power condominium in the case of emergency repairs
to bid at foreclosure sale. of his condominium unit.
XPN: Unless otherwise provided for in the 2. If performed or furnished for the common
declaration of restrictions, areas and if duly authorized by the
management body provided for in a
Note: The condominium owner shall have the same declaration of restrictions governing the
right of redemption as in cases of judicial or extra- property: shall be deemed to be performed or
judicial foreclosure of mortgages. furnished with the express consent of each
condominium owner.
Q: What are the rules as regards labor performed
or services or materials furnished? Q: How may an owner of any condominium
remove his condominium from a lien against two
A: or more condominiums or any part thereof?
1. If with the consent of or at the request of a
condominium owner or his agent or his A: By payment to the holder of the lien of the
contractor or subcontractor: fraction of the total sum secured by such lien which
is attributable to his condominium unit.
SUCCESSION A: The inheritance includes all the property, rights

and obligations of a person which are not
I. GENERAL PROVISIONS extinguished by his death. (Art 776)
A. DEFINITION/WHAT IS TRANSMITTED Q: What is the relation of “Inheritance” to

“Succession”?
Q: What is succession?
A: Inheritance refers to the objective element of
A: Succession is a mode of acquisition by virtue of succession, to the mass or totality of the patrimony
which the property, rights and obligations to the of a deceased person. Succession, on the other
extent of the value of the inheritance of a person, hand refers to the legal mode by which inheritance
are transmitted through his death to another or is transmitted.
others either by his will or by operation of law. (Art.
774) Q: What is transferred by death in succession?
Q: What are the requisites of succession? A: Only the property, rights and obligations not
extinguished by death are transmitted to the heirs.
A: DATE
1. Death of decedent; Q: Are after-acquired properties of the decedent
2. Acceptance of the inheritance by the transmissible?
successor;
3. Transmissible estate; A: GR: Property acquired during the period
4. Existence and capacity of successor, between the execution of the will and the death of
designated by decedent or law. the testator is not included.
Q: What is an inheritance? XPN: When a contrary intention expressly

appears in the will. (Art. 793)
291
Note: Applies only to legacies and devises and A: No, because a contract of guaranty does not fall
not to institution of heirs. in any of the exceptions under Art. 1311 (relativity
of contracts). A guarantor’s obligation is basically to
The inheritance of a person includes not only pay the creditor if the principal debtor cannot pay.
the property and the transmissible rights and Payment does not require any personal
obligations existing at the time of his death, but qualifications. The personal qualifications become
also those which have accrued thereto since the relevant only at the time the obligation is incurred
opening of the succession. (Art. 781) but not so at the time of discharge or fulfillment of
the obligation. (Estate of Hemady v. Luzon Surety
Q: What are the rules on transmissibility of rights Co., Inc., G.R. No. L-8437, Nov. 28, 1956)
and obligations?
Q: The wife died while the action for legal
A: Purely personal rights are extinguished by death. separation was pending. Her children, however,
Hence, they are not transmitted to the heirs. wanted to continue the action. They ask that they
GR: patrimonial rights are transmissible to the heirs be allowed to substitute their deceased mother,
arguing that the action should be allowed to
XPN: continue. Decide.
1. Otherwise provided by law
2. by the will of the testator. A: The children cannot be substituted in an action
3. GR: rights and obligations arising from for legal separation upon the death of their mother
contracts are binding upon the heirs. who filed the case. An action for legal separation is
purely personal on the part of the innocent spouse
XPN: when the rights and obligations arising because such an action affects the marital status of
are not transmissible by the spouses. (Bonilla v. Barcena, G.R. No. L-41715,
a. Their nature June 18, 1976)
b. Stipulation
c. Provided by law. Q: Fortunata died while her action for quieting of
title of parcels of land was pending. Does her
Q: What are the rights that are extinguished by death result in the extinguishment of the action or
death? may her heirs substitute her in the case?
A: PAPULP A: Her heirs may substitute her because the action

1. Partnership rights is not extinguished by her death. Since the rights to
2. Agency the succession are transmitted from the moment of
3. Personal easements the death of the decedent, from that moment, the
4. Usufruct heirs become the absolute owners of his property,
5. Legal support subject to the rights and obligations of the
6. Parental authority decedent, and they cannot be deprived of their
rights thereto except by the methods provided for
Q: May heirs be held liable for the debts or by law. The right of the heirs to the property of the
obligations of the decedent? deceased vests in them upon such death, even
before judicial declaration of their being heirs in the
A: GR: No. It is the estate that pays for the debts testate or intestate proceedings.
left by the decedent.
When she died, her claim or right to the parcels of
XPN: It is true that the heirs assume liability for land in litigation was not extinguished by her death
the debts of the decedent, although it is limited but was transmitted to her heirs upon her death.
only to the extent of the value of the Her heirs have thus acquired interest in the
inheritance received. (Estate of Hemady v. properties in litigation and became parties in
Luzon Surety Co., G.R. No. L-8437, Nov. 28, interest in the case. (Bonilla v. Barcena, et al., G.R.
1956) No. L-41715, June 18, 1976)
Note: The heirs are not personally liable with their own Q: Can the heir enter into a contract of sale,
individual properties for the monetary obligations/debts conveyance or any disposition pertaining to his
left by the decedent. interest in the inheritance even pending the
settlement of the estate?
Q: Is a contract of guaranty extinguished by death?
292 CIVIL LAW TEAM

SUCCESSION
A: Yes, because his hereditary share/interest in the Q: What is the basis of the heirs’ rights to the
decedent’s estate is transmitted or vested fruits, if any?
immediately from the moment of decedent’s death.
This is, however, subject to the outcome of the A: The Right of Accession.
settlement proceedings.
B. SUCCESSION OCCURS AT THE MOMENT OF
Q: What is the nature of the transaction entered DEATH
into by the heir pertaining to his hereditary share
in the estate pending the settlement of the estate? Q: When will the descendant acquire the right to
inherit? Does that mean that they automatically
A: The effect of such transaction is to be deemed become owners of the inheritance?
limited to what is ultimately adjudicated to the heir.
However, this aleatory character of the contract A: The rights to the succession are transmitted from
does not affect the validity of the transaction. the moment of the death of the decedent. (Art.
777)
Q: Can an heir alienate or dispose his interest over
his future inheritance during the lifetime of the It is clear that the moment of death is the
decedent? determining point when the heirs acquire a definite
right to the inheritance, whether such right be pure
or conditional.
A: GR: Contracts entered into upon future
inheritance are void. (Art 1347, par 2)
The right of the heirs to the property of the
deceased vests in them even before judicial
XPN: Partition inter vivos (Art 1080) declaration of their being heirs in the estate or
intestate proceedings.
Q: Can an heir enter into a compromise agreement
to renounce his rights over a future inheritance? Note: It is immaterial whether a short or long period of
time elapses between the death of the predecessor and
the entry in the possession of the properties of the
A: NO. Every renunciation or compromise as
inheritance, because the right is always deemed to
regards a future legitime between the person owing retroact to the moment of death.
it and his compulsory heirs is void, and the latter
may claim the same upon the death of the former; Q: What kind of “death” is contemplated under
but they must bring to collation whatever they may the New Civil Code?
have received by virtue of the renunciation or
compromise.( Art 905) A: The principle under Art. 777 applies to both:
(a) ACTUAL death; and
A future legitime is merely an expectancy, and the (b) PRESUMPTIVE death.
heir does not acquire any right over the same until
the death of the testator. Hence, juridically, there is
Q: What are the different circumstances of
nothing on which to compromise. Furthermore, Art.
qualified or extraordinary absence in the Civil
1347 of NCC expressly provides that, “no contract
Code?
may be entered into upon future inheritance except
in cases expressly authorized by law.”
A:
Q: Is actual delivery necessary for an heir to 1. A person on board a vessel lost during a sea
acquire ownership over an inherited property? voyage, or an aeroplane which is missing, who
has not been heard of for four years since the
A: NO. The possession of hereditary property is loss of the vessel or aeroplane;
deemed transmitted to the heir without 2. A person in the armed forces who has taken
interruption and from the moment of the death of part in war, and has been missing for four
the decedent, in case the inheritance is years;
transmitted. 3. A person who has been in danger of death
under other circumstances and his existence
Q: Pending a proceeding determining the rightful has not been known for four years.
heirs, can the prospective heirs demand delivery
of their supposed inheritance? C. KINDS OF SUCCESSION AND SUCCESSORS
A: YES. Ownership passes to the heir at the very Q: What are the kinds of succession?
moment of death.
293
A: Represent the juridical Never represent the

1. Testamentary Succession- That which results personality of the personality of the
from the designation of an heir, made in a will deceased and acquire deceased no matter
executed in the form prescribed by law. (Art their rights, with certain how big the legacy or
779) exceptions to his the devise is
2. Legal or Intestate Succession- That which takes obligations
place if a person dies without a will, or with a Determinability of amount of inheritance
void will, or one which has subsequently lost Inherit an undetermined Are always given a
its validity. quantity whose exact determinate thing or a
3. Mixed Succession- that effected partly by will amount cannot be fixed amount
and partly by operation of law. (Art 780) known a priori and
4. Compulsory Succession- That which takes which cannot be fixed
place compulsorily by operation of law with until the inheritance is
respect to the legitime in favor of compulsory liquidated
heirs. Extent of successional right
Succeed to the Only succeed to the
Q: What are the kinds of heirs?
remainder of the determinate thing or
properties after all the quantity which is
A:
debts and all the mentioned in the legacy
1. Voluntary or testamentary heirs – called to
legacies and devices or devise
succeed either by virtue of the will of the
have been paid or given
testator:
As to when they exist
a. Devisee
b. Legatee Can exist whether the Only in testamentary
succession be testate or succession
Note: An heir is one who succeeds to the whole intestate
(universal) or aliquot part of the estate. Devisee Effect of preterition
or legatee is one who succeeds to definite, The institution of an heir The legacies and devises
specific, and individualized properties. is entirely annulled remain valid insofar as
they are not inofficious.
2. Compulsory – called by law to succeed to a Effect of defective disinheritance
portion of the testator’s estate known as In case of imperfect or The legacies and
legitime. Those who succeed by force of law to defective disinheritance, devisees remain valid
some portion of the inheritance, in an amount the institution of an heir insofar as they are not
predetermined by law, of which they cannot is annulled to the extent inofficious.
be deprived by the testator, except by a valid that the legitimes are
disinheritance impaired.
3. Legal or Intestate – by operation of law
Q: Suppose a person is named to succeed to an
through intestate succession. Those who
entire estate. The estate, however, consists of only
succeed to the estate of the decedent who
one parcel of land. Is he an heir or a devisee?
dies without a valid will, or to the portion of
such estate not disposed of by will. A: It depends on the manner of his designation in
the will. Here, because he is called to inherit the
Q: Who are devisees and legatees? entire estate, he is an heir.
A: Devisees are persons to whom gifts of real Q: In what instances do the distinctions between
property are given by virtue of a will. On the other heirs and devisees/legatees become significant?
hand, Legatees are persons to whom gifts of
personal property are given by virtue of a will A:
1. Preterition
Q: What are the distinctions between heirs and 2. Imperfect/defective disinheritance
legatees/devisees? 3. After-acquired property
4. Acceptance or repudiation of successional
A: rights
HEIRS DEVISEES OR LEGATEES
As to representation of deceased’s juridical person II. TESTAMENTARY SUCCESSION /
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WILLS
A: It is the exercise of the disposing power that
1. IN GENERAL cannot be delegated. But the mere mechanical act
of drafting the will may be done by a third person
A. DEFINITION AND CHARACTERISTICS as it does not constitute a delegation of the will or
disposition.
Q: What is a will?
Q: Can the testator delegate to a third person the
A: A will is an act whereby a person is permitted, power to determine whether or not a
with the formalities prescribed by law, to control to testamentary disposition is to be operative?
a certain degree the disposition of his estate, to
take effect after his death. (Art. 783) A: No. The testator may not make a testamentary
disposition in such a manner that another person
Q: What are the characteristics of a will? has to determine whether or not it is to be
operative. (Art 787). It is not only the delegation
A: A will is: which is void; the testamentary disposition whose
1. Statutory right – The making of a will is effectivity will depend upon the determination of
only a statutory not a natural right. the third person is the one that cannot be made.
Hence, a will should be subordinated to Hence, the disposition itself is void.
both the law and public policy.
2. Unilateral act – No acceptance by the Q: What cannot be delegated to the discretion of a
transferees is needed during the lifetime third person? What matters cannot be delegated
of the testator. to the discretion of a third person
3. Strictly personal act – The disposition of
property is solely dependent upon the A: The following cannot be delegated to a third
testator. person because they comprise the disposing power
4. Ambulatory – A will is essentially of the testator:
revocable during the lifetime of the 1. Duration or efficacy of designation of
testator. heirs, legatees, or devisees.
5. Free from vices of consent – A will must 2. Determination of the portions which the
have been executed freely, knowingly and heirs are to receive when referred to by
voluntarily, otherwise, it will be name.
disallowed. 3. Determination as to whether or not a
6. Individual act – A will must be executed disposition is to be operative. (Art. 785)
only by one person. A joint will is not
allowed in the Philippines. Q: What, on other hand, may be entrusted to third
persons?
Note: Mutual wills – Separate wills although
containing reciprocal provisions are not A:
prohibited, subject to the rule on disposicion 1. Distribution of specific property or sums of
captatoria. money that the testator may leave in general
to specified classes or causes
7. Solemn or formal act – A will is executed 2. Designation of the persons, institutions or
in accordance with formalities prescribed establishments to which such property or sums
by law. are to be given or applied. (Art. 786)
(1) PERSONAL ACT; Reason: Here, there is really no delegation because

NON-DELEGABILITY OF WILL-MAKING the testator has already set the parameters
required by law, namely:
Q: What is meant by “strictly personal act”? a. The specification of property or sums of
money
A: Under Art 784, the making of a will is a strictly b. The specification of classes or causes.
personal act; it cannot be left in whole or in part to
the discretion of a third person, or accomplished In effect, the third person will only be carrying out
through the instrumentality of an agent or the will of the testator as determined by these
attorney. parameters.
Q: What is the rule on non-delegability of will-

making?
295
(2) RULES OF CONSTRUCTION AND E.g. If it contains an imperfect description of

INTERPRETATION/LAW GOVERNING person or property; No peson or property
FORMAL VALIDITY exactly answers the description
Q: How should the provisions of a will be 2. Patent (Extrinsic) ambiguities – Those which
construed? are apparent on the face of the will.
A: If a testamentary disposition admits of different E.g. Uncertainty which arises upon the face of
interpretations, in case of doubt, that the will as to the application of any of its
interpretation by which the disposition is to be provisions. (Art. 789)
operative shall be preferred. (Art. 788)
Q: What are the steps in resolving the
Construing the provisions of a will, substance rather ambiguities?
than form must be regarded, and the instrument
should receive the most favorable construction to A:
accomplish the purpose intended by the testator. 1. Examine the will itself;
2. Refer to extrinsic evidence or the surrounding
Reason: Testacy is preferred over intestacy because circumstances, except oral declarations of the
testacy is the express will of the decedent whereas testator as to his intention.
intestacy is only his implied will. (Art. 791)
Q: What law governs the validity of wills?
Q: What are the rules in the construction of Wills?
A:
A: 1. As to extrinsic validity- refers to the forms and
1. Words of the will are to be taken in their solemnities required by law. It is governed by:
ordinary and grammatical sense unless there is a. As to time- the law in force at the time of
a clear intention to use them in another sense the making of the will.
b. As to place- the will can be executed in
can be gathered, and that can be ascertained.
accordance to the formalities of the
(Art. 790)
testator’s nationality, domicile, residence or
2. Technical words are to be taken in their the place where the will was executed.
technical sense, unless: 2. As to Intrinsic validity- refers to the legality of
a. The context clearly indicates a contrary provisions in the will. It is governed by:
intention or a. As to time- the law in force at the time of
b. It satisfactorily appears that he was the decedent’s death.
unacquainted with such technical sense. b. As to place- the national law of the testator
(Ibid.) governs the intrinsic validity of the will
3. The invalidity of one of several dispositions regardless of the place of execution.
contained in a will does not result in the
invalidity of the other dispositions unless it is Q: What law governs the formal validity of wills?
to be presumed that the testator would not
have made such other dispositions if the first A: The validity of a will as to its form depends upon the
invalid disposition had not been made. (Art. observance of the law in force at the time it made.
792) (Art. 795)
4. Every devise or legacy shall cover all the Place of execution Applicable Law
interest in the property disposed of unless it Testator is a Filipino
clearly appears from the will that he intended Philippines New Civil Code (NCC)
to convey a less interest. (Art. 794) Foreign country Law of the place of
execution
Q: What are the kinds of ambiguities in a will?
Testator is an alien
Philippines NCC or National law
A:
1. Latent (Intrinsic) ambiguities – Ambiguities Foreign country 1.Law of the place of
which are not apparent on the face of a will execution;
but to circumstances outside the will at the 2.National law;
time the will was made. 3.law of the place of
residence;
4.NCC
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SUCCESSION
2. TESTAMENTARY CAPACITY AND INTENT A: It is essential only at the time of the making (or
execution) of the will. (Art. 798; Alsua-Betts v. CA,
Q: Who can make a will? 92 SCRA 332)
A: All persons who are not expressly prohibited by Note: To be of sound mind, it is not necessary that the
law may make a will. (Art. 796) testator be in full possession of all his reasoning
faculties, or that his mind be wholly unbroken,
The law presumes capacity to make a will; hence, in unimpaired, or unshattered by disease, injury or other
order that a person may be disqualified to make cause.
one, he must be expressly prohibited by law.
Q: What is the status of the will if the testator is
Note: The ability as well as the power to make a will not of sound mind at the time of its execution?
must be present at the time of the execution of the
will. A: The will is invalid regardless of his state of mind
before or after such execution. In other words, the
Q: What are the requisites of testamentary will of an incapable is not validated by the
capacity? supervening of capacity. (Art. 801)
A: Note: Conversely, if the testator was of sound mind at

1. All persons not expressly prohibited by law the time of the making of the will, the will is valid even
2. At least 18 years of age; and if the testator should later on become insane and die
3. Of sound mind in that condition. In other words, supervening
incapacity does not invalidate an effective will.
Note: It shall be sufficient if the testator was
able at the time of making the will to know the: Q: If there is no proof as to the soundness of the
a. nature of the estate to be disposed of; mind of the testator at the time he executed his
b. proper objects of his bounty; and will, what is the status of his will assuming that he
c. character of the testamentary act. complies with all other requisites for its validity?
Q: Is a person suffering from civil interdiction A: The will is valid. The law presumes that every
qualified to make a will? person is of sound mind, in the absence of proof to
the contrary.
A: Yes. He is deprived only of the power to dispose
of his properties through acts inter vivos but not Such presumption of soundness of mind, however,
through acts mortis causa. (Art. 34, Revised Penal does not arise if the testator was:
Code) 1. Publicly known to be insane, one month,
or less, before making his will;
Q: Is a married woman required to obtain the 2. Under guardianship at the time of the
consent of the husband and the authority of the making of the will.
court before she can make a will?
Note: Mere weakness of mind or partial imbecility
A: No. A married woman may make a will without from disease of body or from age does not necessarily
the consent of her husband, and without the render a person incapable of making a will.
authority of the court. (Art 802)
Q: Who has the burden of proving that the
Note: A married woman may dispose by will all her testator acted in lucid interval?
separate property as well as her share of the conjugal
partnership or absolute community property. (Art 803) A: The person who maintains the validity of the will
based on the said ground. Person who maintains
A. AGE REQUIREMENT the validity of the will has the burden of proving
that the testator made the will during a lucid
Q: Can a person under eighteen years old make a interval.
will?
Q: When Brenda was a baby, she was accidentally
A: No. Persons of either sex under eighteen years dropped by her mother when her mother saw a
old cannot make a will. (Art. 797) cockroach. As a result, she suffered from insanity.
When she was in her thirties, she executed a will.
Q: When is soundness of the mind required?
297
After sometime, her brain damage was totally is a citizen and which might be proved and allowed
cured. What is the status of the will? by the law of his own country.
A: Still void. The will of an incapable cannot be Q: Is a joint will executed by a Filipino in a foreign
validated by supervening capacity. What is country valid?
important is that the ability, as well as the power to
make a will must be present at the time of the A: No. The same holds true even if it is authorized
execution of the will. by the law of the country where the joint will was
executed. (Art. 819) A joint will is against the public
Q: Will your answer be the same if the situation policy of the Philippines.
was the reverse – Brenda developed insanity after
she executed her will? (1) LAW GOVERNING SUBSTANTIVE VALIDITY
A: No. Supervening incapacity does not invalidate Q: What are the matters mentioned in Article 15
an effective will, hence the will is valid. of the New Civil Code which are governed by
Philippine laws?
Q: May an illiterate execute a will?
A:
A: GR: Yes, an illiterate can make an ordinary or 1. Family rights and duties
notarial will because a person who does not know 2. Status;
how to read and write does not mean he does not 3. Condition; and
understand the language. 4. Legal capacity of persons. (Art. 15)
XPN: The illiterate cannot make a holographic Q: What are the matters pertaining to intestate
will. and testamentary successions which are regulated
by the national law of the deceased?
3. FORM
A:
A. FORMAL VALIDITY RULES 1. Order of succession
2. Amount of successional rights
Q: What law governs the forms and solemnities of 3. Intrinsic validity of testamentary provisions
wills? 4. Capacity to succeed. (Art. 16; Art. 1039)
A: It is the law of the country where the will was B. COMMON REQUIREMENTS
executed that governs the form and solemnities of
st
wills. (Art. 17, 1 paragraph; Art. 815) Q: What are the formal requirements common to
both notarial and holographic wills?
Q: What are the effects of a will executed by an
alien abroad? A:
1. In writing;
A: The will of an alien who is abroad produces 2. In a language or dialect known to the testator.
effect in the Philippines if made with the formalities
prescribed by the law of the place in which he Note: The object of the solemnities surrounding the
resides, or according to the formalities observed in execution of wills is to close the door against bad faith
his country, or in conformity with those which the and fraud, to avoid substitution of wills and
Civil Code prescribes. (Art. 816) testaments and to guarantee their truth and
authenticity.
Q: What are the effects of a will executed by an
alien in the Philippines? (1) IN WRITING
A: It shall produce the same effect as if it was Q: Is the rule that every will must be in writing
executed in the Philippines if it is executed in mandatory?
accordance with the law of the country where he is
a citizen or subject, and which might be proved and A: Yes. If the will is not in writing, it is void and
allowed by the law of his own country. (Art. 817) It cannot be probated.
shall produce effect in the Philippines if executed in
accordance with the law of the country of which he Note: Philippine laws do not recognize the validity of
“nuncupative wills,” which are oral wills declared or
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dictated by the testator and dependent merely on oral A: No. The rule only applies to the testator,
testimony. whether in notarial or holographic will. Further, Art.
805 is clear that the attestation clause need not be
Q: In case of a holographic will, what is the in the language known to the witnesses.
requirement for its validity?
(1) ARTS. 805-806
A: It must be entirely handwritten by the testator
himself. (Art. 810) Q: What are the formalities in the execution of a
notarial will?
Q: What are the rules in relation to notarial or
attested wills? A: WESA-PNAN
1. In Writing;
A: Notarial or attested will may be: 2. Executed in a language or dialect known
1. entirely handwritten by a person other to the testator;
than the testator; 3. Subscribed at the end thereof by the
2. partly handwritten by the testator himself testator himself or by the testator’s name
and partly handwritten by another written by some other person in his
person; presence, and by his express direction;
3. entirely printed, engraved or 4. Attested and subscribed by three or more
lithographed; or credible witnesses in the presence of the
4. partly handwritten (whether by testator testator and of one another;
or another person) and partly printed, 5. The testator or the person requested by
engraved or lithographed. him to write his name must also sign
every page, except the last, on the left
(2) LANGUAGE/DIALECT REQUIREMENT margin in the presence of the witnesses;
6. All the pages shall be numbered
C. NOTARIAL WILLS correlatively in letters on the upper part
of each page;
Q: Is the rule that every will must be executed in a 7. Must contain an attestation clause which
language known to the testator mandatory? expressly states the following:
a. The number of pages used upon
A: Yes, otherwise, the will is void. (Suroza v. which the will is written;
Honrado, 110 SCRA 388). It is also applicable eve if b. The fact that the testator signed the
the provisions of the will are interpreted or will and every page thereof, or
explained to the testator. caused some other person to write
his name, under his express
Q: Is the fact that the will was executed in a direction, in the presence of the
language known to the testator required to be instrumental witnesses;
stated in the attestation clause? c. The fact that the witnesses
witnessed and signed the will and all
A: No. This fact can be established by extrinsic the pages thereof in the presence of
evidence or evidence aliunde. (Lopez v. Liboro, 81 the testator and of one another.
Phil. 429) 8. Must be acknowledged before a Notary
public by the testator and the witnesses.
Q: Is it presumed that the testator knows the
dialect of the locality where he resides? Q: What is the effect if one or some of the
requisites are lacking?
A: If the testator resides in a certain locality, it can
be presumed that he knows the dialect or the A: Lack of one of the requisites is a fatal defect
language in the said locality. (Abangan v. Abangan, which will render the will null and void
G.R. No. 13431, Nov. 12, 1919)
Q: Where must the testator sign the will?
Note: The fact that the testator knew the language
need not appear on the face of the will. This fact may A: The signature of the testator of the will must be
be proven by extrinsic evidence. at the end of which he may in the logical end (last
testamentary disposition) or physical end (non
Q: Does this rule apply to witnesses in a notarial or dispositive provisions).
attested will?
299
Q: What is the effect of testamentary dispositions Q: What are the special requirements if the
placed in the will after the signature of the testator is blind?
testator?
A: The will shall be read to him twice, once by one
A: Where the signature is followed by dispositive of the subscribing witnesses, and another time by
provisions, even the portion of the instrument the notary public before whom the will is
preceding the signature cannot be probated, acknowledged. (Art. 808) If the testator is blind, the
because the instrument must be considered as a will shall be read to him twice; once, by one of the
whole. subscribing witnesses, and again by the notary
public before whom the will is acknowledged. (Art
Q: What may be considered as sufficient signature 808).
in a will?
Note: Art. 808 applies not only to blind testators but
A: The habitual or customary signature or one of also to those who, for one reason or another, are
the ways by which he signed his name. incapable of reading their wills, either because of poor
or defective eye sight or because of illiteracy.
Q: Is a fingerprint sufficient signature? State the
rule. (3) SUBSTANTIAL COMPLIANCE
A: In notarial will, it is allowed as long as it is Q: When is a will not rendered invalid by reason of
voluntary made but not in holographic will because defects or imperfections in the form of attestation
it presupposes that he knows how to write. or in the language used therein?
Q: In what situation may an “X” be a sufficient A: In the absence of bad faith, forgery, or fraud, or
signature? Who has the burden of proof in proving undue and improper pressure and influence,
its validity? defects and imperfections in the form of attestation
or in the language used therein shall not render the
A: If it is the customary, habitual or one of the ways will invalid if it is proved that the will was in fact
he sign his signature. The one who alleges that it is executed and attested in substantial compliance
the customary, habitual or one of the ways he sign with all the requirements of article 805. (Art 809)
his signature has the burden of proof. In the
absence of proof, it is not a sufficient signature. Q: What is the rule in cases of omissions in the
will?
Q: In an ordinary will, may the testator validly
delegate the signing to someone else? A: Omissions which can be supplied by an
examination of the will itself, without the need of
A: Yes. By letting someone signed the testator’s resorting to extrinsic evidence, will not be fatal and,
name in the latter’s presence and by his express correspondingly, would not obstruct the allowance
direction. to probate of the will being assailed.
However, evidence aliunde are not allowed to fill a
(2) SPECIAL RULES FOR HANDICAPPED TESTATORS void in any part of the document or supply missing
details that should appear in the will itself. They
Q: What are the special requirements if the only permit a probe into the will, an exploration
testator is deaf or mute? into its confines, to ascertain its meaning or to
determine the existence or absence of the requisite
A: formalities of law. (Cañeda v. CA, G.R. No. 103554,
1. If the testator is able to read, he must May 28, 1993)
personally read the will; or
2. If the testator is unable to read, he must (4) REQUISITES
designate two persons to read it and
communicate to him, in some practicable WITNESSES
manner, the contents thereof. (Art. 807)
Q: What are the qualifications of witnesses?
Note: The law does not require that the persons
reading and communicating the contents of the will be A: Witnesses to a will must be: S18-ABCD
the instrumental witnesses. 1. Of Sound mind.
2. At least 18 years of age.
3. Able to read and write
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4. Not Blind, deaf or dumb 3. In either of the instances, must the will be read
5. Not have been Convicted by final to him?
judgment of falsification of a document,
perjury or false testimony. A: In case Stevie executes a notarial will, it has to be
6. Domiciled in the Philippines read to him twice. First by one of the instrumental
witnesses, and second by the notary public before
Note: The witnesses must be domiciled in the whom the will was acknowledged. (2008 Bar
Philippines applies only if a Filipino citizen executes his Question)
will in the Philippines.
Q: If a witness is of unsound mind, what is the
Q: When qualifications of witnesses determined? effect?
A: It is at the time of the attestation of the will. If A: The will shall be void since it was expressly
the witnesses attesting the execution of a will are provided under Art.820 of the NCC that for a
competent at the time of attesting, their becoming witness to a notarial or attested will to be qualified,
subsequently incompetent shall not prevent the he/she must be of sound mind and the age of
allowance of the will. 18y.o. or more, and not blind, deaf or dumb, and
able to read and write.
Q: If a person is a beneficiary under the will, is he
competent to act as an instrumental witness? Q: If a witness is a minor, what is the effect?
A: Yes, he is competent to act as an instrumental A: The will shall be void since it was expressly
witness of a will. If a person attest to the execution provided under Art.820 of the NCC that for a
of a will, to whom or to whose spouse, or parent or witness to a notarial or attested will to be
child, a devise or legacy is given by such will, such qualified, he/she must be of sound mind and
devise or legacy shall, so far only as concerns such the age of 18y.o. or more, and not blind, deaf or
person, or spouse, or parent, or child of such dumb, and able to read and write.
person, or any one claiming under such person or
spouse, or parent, or child, be void. Unless there Q: Can one of the witnesses be the same person
are three other competent witnesses to such will. who signs the will of the testator?
(Art 823)
A: No. The person signing the testator’s name must
Note: If the witness is instituted as heir, not as devisee not be one of the 3 instrumental witnesses because
or legatee, the rule would still apply, because undue he must sign in the presence of the testator and of
influence or pressure on the part of the attesting three other instrumental witnesses.
witness would still be present.
D. HOLOGRAPHIC WILLS
Q: Stevie was born blind. He went to school for the
blind, and learned to read in Braille language. He (1) REQUIREMENTS
speaks English fluently. Can he:
Q: What is a holographic will?
1. Make a will?
A: A holographic will is one entirely written, dated,
A: Stevie may make a notarial will. A blind man is and signed by the hand of the testator himself. It is
not expressly prohibited from executing a will. In subject to no other form, and may be made in or
fact, Art. 808 of NCC provides for additional out of the Philippines, and need not be witnessed.
formality when the testator is blind. Stevie (Art. 810)
however, may not make a holographic will in Braille
because the writing in Braille is not a handwriting. A Q: What are the formalities required in the
holographic will to be valid must be entirely execution of holographic will?
written, signed and dated by the testator in his own
handwriting. A:
1. Entirely handwritten by the testator,
2. Act as a witness to a will? 2. Dated
3. Signed by the hand of the testator himself
A: A blind man is disqualified by law to be a witness
to a notarial will. Q: What are the effects of insertions or
rd
interpolations made by a 3 person?
301
A: GR: When a number of erasures, corrections,

cancellation, or insertions are made by the testator Q: Natividad’s holographic will, which had only
in the will but the same have not been noted or one substantial provision, as first written, named
authenticated with his full signature, only the Rosa as her sole heir. However, when Gregorio
particular words erased, corrected, altered will be presented it for probate, it already contained an
invalidated, not the entirety of the will. alteration, naming Gregorio, instead of Rosa, as
sole heir, but without authentication by
XPNs: Natividad’s signature. Rosa opposes the probate
1. Where the change affects the essence of alleging such lack of proper authentication. She
the will of the testator; claims that the unaltered form of the will should
be given effect. Whose claim should be granted?
Note: When the holographic will had only
one substantial provision, which was altered A: None. Both their claims should be denied. As to
by substituting the original heir with Gregorio’s claim, the absence of proper
another, and the same did not carry the authentication is fatal to his cause. As to Rosa’s
requisite full signature of the testator, the claim, to state that the will as first written should
entirety of the will is voided or revoked. be given efficacy is to disregard the seeming change
of mind of the testatrix. But that change of mind
Reason: What was cancelled here was the can neither be given effect because she failed to
very essence of the will; it amounted to authenticate it in the manner required by law by
the revocation of the will. Therefore, affixing her full signature. (Kalaw v. Hon. Relova,
neither the altered text nor the original etc., et al., G.R. No. L40207, Sept. 28, 1984)
unaltered text can be given effect. (Kalaw
v. Relova, G.R. No. L-40207, Sept. 28, DATE
1984)
Q: Is it required that the date of the will should
2. Where the alteration affects the date of include the day, month and year of its execution?
the will or the signature of the testator.
rd A: GR: The "date" in a holographic will should
3. If the words written by a 3 person were include the day, month, and year of its execution.
contemporaneous with the execution of
the will, even though authenticated by XPN: When there is no appearance of fraud,
the testator, the entire will is void for bad faith, undue influence and pressure and
violation of the requisite that the the authenticity of the will is established and
holographic will must be entirely in the the only issue is whether or not the date
testator’s handwriting. appearing on the holographic will is a valid
compliance with Art. 810 probate of the
Q: In a holographic will, where must the signature holographic will should be allowed under the
be? principle of substantial compliance.
A: The signature must be at the end of the will. This
Note: The day and month may be indicated by
can be inferred from Article 812 of the NCC by the implication as long as there is no doubt as to the exact
reference to dispositions “written below his date. The date may be placed at the end or at the
signature.” This phrase implies that the signature is beginning of the will, or in the body, although its
at the end of the will, and any disposition below it normal location should be after the signature.
must further be signed and dated.
Q: Where must the date be placed in a holographic
Q: What is the effect of a testamentary disposition will?
after the signature? Will it affect the validity of a
will? A: The law does not specify the particular location
where the date should be placed in the will. The
A: “In a holographic wills, the dispositions of the only requirements are that the date be in the will
testator written below his signature must be dated itself and executed in the hand of the testator.
and signed by him in order to make them valid as
testamentary dispositions.” (Art. 812). If one Q: What is the effect in a holographic will if there
disposition below the signature of the testator is is no date?
not dated, even if signed, that particular disposition
is void, without affecting the validity of the others A: The will is void.
or of the will itself.
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(2) WITNESSES REQUIRED FOR PROBATE Q: What are the rules in case of insertion,
cancellation, erasure or alteration?
Q: What are the rules governing the probate of
holographic wills? A: In case of insertion, cancellation, erasure or
alteration in a holographic will, the testator must
A: In the post mortem probate of holographic wills, authenticate the same by his full signature. (Art.
the following rules are to be observed as to the 814)
number of witnesses to be presented:
1. If the will is not contested, it shall be Note: Full signature refers to the testator’s
necessary that at least one witness who habitual, usual and customary signature.
knows the handwriting and signature of
the testator explicitly declares that the Q: What is the effect if the insertion, cancellation,
will and the signature are in the erasure or alteration is not authenticated with the
handwriting of the testator. testator’s full signature?
2. If the will is contested, at least three of
such witnesses shall be required. A: It is considered as not made, but the will is not
3. In the absence of any competent witness invalidated. It does not affect the validity of the will
and if the court deems it necessary, itself.(id.) the will is not thereby invalidated as a
expert testimony may be resorted to. whole, but at most only as regards the particular
(Art. 811) words erased, corrected or inserted. (kalaw v.
Relova, 132 SCRA 237, 1984), citing Velasco v.
Note: In an earlier case, it was held that even if the Lopez, (1 Phil 720, 1903), unless the portion
genuineness of the holographic will is contested, involved is an essential part of the will, such as the
Article 811 of the NCC cannot be interpreted as to date.
require the compulsory presentation of three
witnesses to identify the handwriting of the testator, Note: Where the testator himself crossed out the
under penalty of having the probate denied. (Codoy v. name of the heir named, and substituted the name of
Calugay, 312 SCRA 333) another, without authentication, it was held that this
did not result in making the person whose name was
In a later case, however, the Court ruled that the crossed as heir. (Kalaw v. Relova, 132 SCRA 237; id.)
requirement of at least three witnesses in case the will
is contested is mandatory. The Court explained that E. JOINT WILLS
the possibility of a false document being adjudged as
the will of the testator cannot be eliminated, which is Q: Are joint wills allowed in the Philippines?
why if the holographic will is contested, the law
requires three witnesses to declare that the will was in
A: Two or more persons cannot make a will jointly,
the handwriting of the deceased.
or in the same instrument, either for their
Q: May the contents and due execution of a lost reciprocal benefit or for the benefit of a third
holographic will be established merely through oral person. (Art. 818)
testimonies of witness who allegedly seen the same?
Wills, prohibited by Article 818, executed by
A: The execution and contents of a lost or destroyed Filipinos in a foreign country shall not be valid in the
holographic will may not be proved by the bare Philippines, even though authorized by the laws of
testimony of witnesses who have seen or read such the country where they may have been
will. The will itself must be presented; otherwise, it executed. (Art. 819)
shall produce no effect. (Gan v. Yap, 104 Phil. 509; id.)
Q: Manuel, a Filipino, and his American wife
Q: May a holographic will which was lost or could not Eleanor, executed a Joint Will in Boston,
be found be proved by means of a photostatic copy Massachusetts when they were residing in said
(photocopy)? city. The law of Massachusetts allows the
execution of joint wills. Shortly thereafter, Eleanor
A: But a photostatic copy or Xerox copy of the
died. Can the said will be probated in the
holographic will may be allowed because comparison
Philippines for the settlement of her estate?
can be made with the standard writings of the
testator. (Rodelas v. Aranza, 119 SCRA 16; id.)
A: Yes, the will may be probated in the Philippines
ALTERATIONS, REQUIREMENTS insofar as the estate of Eleanor is concerned. While
the Civil Code prohibits the execution of joint wills
here and abroad, such prohibition applies only to
Filipinos. Hence, the joint will which is valid where
303
executed is valid in the Philippines but only with 4. CODICILS, DEFINITION AND FORMAL
respect to Eleanor. Under Article 819, it is void with REQUIREMENTS
respect to Manuel whose joint will remains void in
the Philippines despite being valid where executed. Q: What is a codicil?
Alternative Answer: The will cannot be probated in A: A codicil is a supplement or addition to a will,
the Philippines, even though valid where executed, made after the execution of a will and annexed to
because it is prohibited under Article 818 of the be taken as part thereof, by which any disposition
Civil Code and declared void under Article 819. The made in the original will is explained, added to, or
prohibition should apply even to the American wife altered. (Art. 825)
because the Joint will is offensive to public policy.
Moreover, it is a single juridical act which cannot be Note: A codicil is executed after the execution of a
valid as to one testator and void as to the other. prior will.
(2000 Bar Question) It must be executed in accordance with all the
formalities required in executing a will.
Q: John and Paula. British citizens at birth,
acquired Philippine citizenship by naturalization Q: Is a codicil a will per se?
after their marriage. During their marriage the
couple acquired substantial landholdings in A: GR: NO. A codicil is a supplement or addition to a
London and in Makati. Paula bore John three will made after the exection of a will and annexed
children, Peter, Paul and Mary. In one of their trips to be taken as a part thereof (Art.825)
to London, the couple executed a joint will
appointing each other as their heirs and providing XPN: If the latter instrument makes disposition
that upon the death of the survivor between them independent of those in the original will,
the entire estate would go to Peter and Paul only without explaining or modifying such original
but the two could not dispose of nor divide the will, then it is a new WILL, and it must be
London estate as long s they live. John and Paula executed in accordance with all the formalities
died tragically in the London Subway terrorist required in executing a will.
attack in 2005. Peter and Paul filed a petition for
probate of their parents’ will before a Makati Q: What are the distinctions between a codicil and
Regional Trial Court. a subsequent will?
Q: Should the will be admitted to probate? A:

CODICIL SUBSEQUENT WILL
A: No, the will cannot be admitted to probate. Joint Forms a part of the It is a new or a separate
wills are void under the New Civil Code. And even if original will. will.
the joint will executed by Filipinos abroad were
Supplements the Makes dispositions
valid where it was executed, the joint will is still not
original will, explaining, without reference to and
valid in the Philippines. adding to, or altering independent of the
any of its dispositions. original will.
Q: Are the testamentary dispositions valid?
If it provides for a full
disposition of the
A: If a will is void, all testamentary dispositions Does not, as a rule, testator’s estate, may
contained in that will are also void. Hence, all revoke entirely the revoke the whole prior
testamentary provisions contained in the void joint prior will. will by substituting a new
will are also void. and last disposition for the
same.
Q: Is the testamentary prohibition against the A prior will and a
division of the London estate valid? A will and a codicil,
subsequent will, being
being regarded as a
two separate wills, may be
A: The testamentary prohibition against the division single instrument are to
construed independently
by Peter and Paul of the London estate for as long be construed together.
of each other.
as they live, is not valid. Art. 494 of NCC provides
that a donor or testator may prohibit partition for a Q: If the former will is a notarial will, is it required
period which may not exceed twenty (20) years. that the codici be notarial in form as well?
(2008 Bar Question)
A: No. The law does not require that the codicil be
also in the form of a notarial will. It may either be in
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the form of a holographic will or notarial/attested 2. If the revocation takes place outside the
will. Philippines:
a. by a testator who is domiciled in the
5. INCORPORATION BY REFERENCE Philippines – Philippine laws
b. by a testator who is not domiciled in this
Q: What is incorporation by reference? country –
i. Laws of the place where the will was
A: Incorporation by reference is the incorporation of made, or
an extrinsic document or paper into a will by ii. Laws of the place in which the testator
reference so as to become a part thereof. had his domicile at the time of
revocation. (Art. 829)
Note: The documents or papers incorporated will be
considered part of the will even though the same are Q: What are the modes of revoking a will?
not executed in the form of a will.
The doctrine of incorporation by reference is not A:
applicable in a holographic will unless the documents 1. By implication of law;
or papers incorporated by reference are also in the 2. By the execution of a subsequent document;
handwriting of the testator. 3. By physical destruction through burning,
cancelation or obliteration. (Art. 830)
Q: What are the requisites of incorporation by
reference? REVOCATION BY IMPLICATION OF LAW
A: EDIS Q: Discuss revocation by implication of law.
1. The document or paper referred to in the
will must be in Existence at the time of A: It takes place when certain acts or events take
the execution of the will; place subsequent to the making of a will, which
2. The will must clearly Describe and identify nullify or render inoperative either the will itself or
the same, stating among other things the some testamentary disposition therein.
number of pages thereof;
3. It must be Identified by clear and Rationale: The law presumes a change of mind on
satisfactory proof as the document or the part of the testator due to certain changed
paper referred to therein; circumstance pertaining to the family relations or in
4. It must be Signed by the testator and the the status of the property.
witnesses on each and every page, except
in case of voluminous books of account or Q: How are wills revoked by operation of law?
inventories. (Art. 827)
A:
6. REVOCATION OF WILLS 1. When after the testator has made a will, he
sells or donates the legacy or devise;
Q: When may the testator revoke a will? 2. Provisions in a will in favor of a spouse who
has given cause for legal separation;
A: A will may be revoked by the testator at any time
before his death. Any waiver or restriction of this Note: The revocation shall take place the
right is void. (Art. 828) moment the decree of legal separation is
granted.
Q: May the right of the testator to revoke the will
be waived or restricted? 3. When an heir, legatee or devisee commits an
act of unworthiness;
A: No, the testator’s right to revoke during his 4. When a credit that has been given as a legacy
lifetime is absolute because a will is ambulatory. It is judicially demanded by the testator;
can neither be waived nor restricted. 5. When one, some or all the compulsory heirs
have been preterited or omitted
Q: What law governs in case of revocation?
Note: The institution of heirs is void.
A:
1. If the revocation takes place in the Philippines, REVOCATION BY EXECUTION OF A SUBSEQUENT
whether the testator is domiciled in the INSTRUMENT
Philippines or in some other country –
Philippine laws
305
Q: What are the requisites of revocation by devisees or legatees designated therein, or by their
subsequent will or codicil? renunciation. (Art. 832)
A: REVOCATION BY PHYSICAL DESTRUCTION

1. The subsequent instrument must comply with
the formal requirements of a will Q: What are the requisites of revocation by
2. The testator must possess testamentary physical act of destruction?
capacity
3. The subsequent instrument must either A: OTAP
contain a revocatory clause or be incompatible 1. Overt act of physical destruction;
with the prior will (totally or partially) 2. Testamentary capacity of the testator at
4. The revoking will must be admitted to probate. the time of performing the act of
revocation;
Note: The testator must have the testamentary 3. Animus Revocandi - intention to revoke;
capacity at the time of the making of the subsequent 4. Performed by testator himself or other
will. person in the presence and express
direction of the testator.
Q: In what ways may revocation by a subsequent
will be done? Note: It is not necessary that the will be totally
destroyed. It is sufficient if on the face of the will,
A: Revocation may be: there is shown some sign of the physical act of
a. Express – by providing for a revocatory destruction. (Maloto v. CA, G.R. No. 76464, Feb. 29,
clause; 1988)
b. Implied – provisions are completely
inconsistent with previous will. Q: How can a will be revoked by physical
destruction?
Note: The will containing the revocatory clause must
itself be valid, and admitted to probate, otherwise, A: The physical act of destruction of a will, like
there is no revocation. burning, does not per se constitute an effective
revocation, unless the destruction is coupled with
Q: What is the Principle of Instanter? animus revocandi on the part of the testator.
st
(Maloto v. CA, G.R. No. 76464, Feb. 29, 1988)
A: The express revocation of the 1 will renders it
nd
void because the revocatory clause of the 2 will, Q: What is the effect if the person directed by the
not being testamentary in character, operates to testator to revoke his will is incapacitated to make
st
revoke the 1 will instantly upon the execution of a will such as when he is below 18 years of age?
the will containing it.
A: None. In revocation of wills, what is essential is
Q: Can there be an instance where a subsequent the capacity of the testator to revoke. The capacity
will, which is incompatible with the prior will, and of the person directed by the testator to revoke his
such prior will subsist at the same time? will is immaterial.
A: Yes. The fact that the subsequent will is posterior Q: In 1919, Miguel executed a will. In the post
and incompatible with the first does not mean that mortem probate, there was a testimony to the
the first is entirely revoked because the revocation effect that the will was in the testator’s possession
may be total or partial. in 1919, but it can no longer be found. Is the will
revoked?
Note: In case of inconsistent wills, the subsequent will
prevails over the prior will because it is the latest
A: Yes, the Doctrine of Presumed Revocation
expression of testamentary intent of the testator.
applies, which provides that: where a will which
cannot be found, is shown to have been in the
Q: What is the effect if the revoking will becomes
possession of the testator when last seen, the
inoperative by reason of incapacity or
presumption is, in the absence of other competent
renunciation?
evidence, that the same was cancelled or
destroyed. The same presumption arises where it is
A: A revocation made in a subsequent will shall take
shown that the testator had ready access to the will
effect even if the new will should become
and it cannot be found after his death. (Gago v.
inoperative by reason of the incapacity of the heirs,
Mamuyac G.R. No. 26317, Jan. 29, 1927)
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will was successfully revoked by the second will

Note: The presumption is, however, not conclusive because the second will was later denied probate,
and anyone who has proof to the contrary may rebut the first will was, nevertheless, revoked when the
the presumption. testator destroyed it after executing the second
invalid will. (Diaz v. De Leon, G.R. No. 17714, May
Q: What is the Doctrine of Dependent Relative 31, 1922).
Revocation?
Q: What is the rule in case of revocation based on
A: Where the testator’s act of destruction is false or illegal cause?
connected with the making of another will, so as
fairly to raise the inference that the testator meant A: Revocation based on a false or illegal cause is
the revocation of the old to depend upon the null and void.
efficacy of the new disposition intended to be Requisites:
substituted, the revocation will be conditional and 1. The cause must be concrete, factual and
dependent upon the efficacy of the new not purely subjective
disposition; and if, for any reason, the new will 2. It must be false
intended to be made as a substitute is inoperative, 3. The testator must not know of its falsity
the revocation fails and the original will remains in 4. It must appear from the will that the
full force. (Molo v. Molo, G.R. No. L-2538, Sept. 21, testator is revoking because of the cause
1951) which is false.
Simply put, for this doctrine to operate, the testator Q: The will contains a statement whereby the
must have intended that the revocation of his first testator recognizes his illegitimate child. This will
will be dependent on the validity of his second will. was revoked. May the revoked will be used as
In this case the intention of the testator is clear: He basis for proving the said recognition?
does not want to die intestate.
A: Yes. Recognition in a will of an illegitimate child
Note: Failure of the new testamentary disposition
does not lose its legal effect even if the will is
upon whose validity the revocation depends is
revoked.
equivalent to the non-fulfillment of a suspensive
condition and thus prevents the revocation of the
7. ALLOWANCE AND DISALLOWANCE OF WILLS
original will.
A. PROBATE REQUIREMENT
Q: Mr. Reyes executed a will completely valid as to
Q: What is probate?
form. A week later, however, he executed another
will which expressly revoked his first will, which he
A: It is a special proceeding mandatorily required
tore his first will to pieces. Upon the death of Mr.
for the purpose of establishing the validity of a will.
Reyes, his second will was presented for probate
by his heirs, but it was denied due to formal
No will shall pass either real or personal property
defects. Assuming that a copy of the first will is
unless it is proved and allowed in accordance with
available, may it now be admitted to probate and
the Rules of Court. (Art. 838)
given effect? Why?
Q: May the parties agree to waive the probate
A: Yes, the first will may be admitted to probate proceedings?
and given effect. When the testator tore the first
will, he was under the mistaken belief that the A: No. It is a mandatory requirement. Until
second will was perfectly valid and he would not admitted to probate, no right can be claimed
have destroyed the first will had he known that the thereafter. Principle of estoppels not applicable in
second will is not valid. The revocation by probate proceeding.
destruction therefore is dependent on the validity
of the second will. Since it turned out that the Q: Does prescription apply to probate of wills?
second will was invalid, the tearing of the first will
did not produce the effect of revocation. This is A: The statute of limitations is not applicable to
known as the doctrine of dependent relative probate of wills (Imprescriptibility of Probate)
revocation (Molo v. Molo, G.R. No. L-2538, Sept. 21, Rationale: Probate proceedings are not established in
1951) (2003 Bar Question) the interest of the surviving heirs, but primarily for the
protection of the expressed wishes of the testator.
Alternative Answer: No, the first will cannot be
admitted to probate. While it is true that the first
307
Q: What are the characteristics of a probate probability exists that the case will come up once again
proceeding? on the same issue of the intrinsic validity or nullity of
the will, the same will result in waste of time, effort,
A: expense plus added anxiety.
1. Special proceeding;
2. Proceeding in rem; Q: Can a probate court decide on questions of
3. Not contentious litigation; ownership?
4. Mandatory;
5. Imprescriptible; A: GR: A probate court has no jurisdiction to decide
questions of ownership.
Q: What are the different kinds of probate?
XPN:
A: 1. When the parties voluntary submit the
1. Ante-mortem – testator himself petitions the issue of ownership to the court;
court for the probate of his own will. 2. When provisionally, the ownership is
2. Post-mortem – another person applies for passed upon to determine whether or not
probate of the will after the testator’s death. the property involved is part of the
estate.
(1) ISSUES TO BE RESOLVED IN PROBATE 3. The question of ownership is an
PROCEEDINGS extraneous matter which the probate
court cannot resolve with finality.
(A) EXCEPTIONS – WHEN PRACTICAL
CONSIDERATIONS Q: When Vic died, he was survived by his
DEMAND THE INTRINSIC VALIDITY OF THE WILL BE legitimate son, Ernesto, and natural daughter,
RESOLVED Rosario. Rosario, who had Vic’s will in her custody,
did not present the will for probate. She instituted
Q: What are the questions that can be determined an action against Ernesto to claim her legitime on
by a probate court? the theory that Vic died intestate because the
absence of probate. To support her claim, she
A: GR: Probate courts cannot inquire into the presented Vic’s will, not for its probate, but for
intrinsic validity of will. The only questions that can proving that Vic acknowledged her. Is the
be determined by a probate court are the: procedure adopted by Rosario allowed?
1. Due execution
2. Testamentary capacity A: No. It is in violation of procedural law and an
3. Identity of the will attempt to circumvent and disregard the last will
and testament of the decedent. The presentation of
XPN: Practical considerations (E.g. when the a will to the court for probate is mandatory and its
will is void on its face) allowance by the court is essential and
indispensable to its efficacy.
Q: The testator devised a part of his estate to his
concubine, which fact of concubinage was stated Note: SC held that the case of Leaño v. Leaño (25 Phil.,
in his will. On probate, the court ruled that the will 180), which sanctioned the extrajudicial partition by
was validly executed but the devise in favor of the the heirs of the properties left by a decedent, but not
the non-presentation of a will for probate, cannot be
concubine is null and void. Can the probate court
relied upon as an authority for the unprecedented and
pass upon the intrinsic validity of the testamentary
unheard of procedure adopted by Rosario in this case,
provision stated in the will? in the face of express mandatory provisions of the law
requiring her to present the will to the court for
A: Yes. While as a general rule, in probate probate. It does not affirmatively appear in the
proceedings, the court’s area of inquiry is limited to decision in that case that the partition made by the
an examination and resolution of the extrinsic heirs was not in accordance with the will or that they
validity of the will, given exceptional circumstances, in any way disregarded the will. No question of law
the probate court is not powerless to do what the was raised and decided in that case. (Guevara v.
situation constrains it to do and pass upon certain Guevara G.R. No. 48840, Dec. 29, 1943)
provisions of the will, as in this case. (Nepomuceno
v. CA, G.R. No. 62952, Oct. 9, 1985) Q: To put an end to the numerous litigations
involving decedent Francisco’s estate, his heirs
Note: The SC held as basis it’s finding that in the event entered into a compromise agreement whereby
of probate of the will, or if the court rejects the will, they agreed to pay Tasiana, Francisco’s surviving
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spouse, P800,000 as her full share in the

hereditary estate. (2) EFFECT OF FINAL DECREE OF PROBATE, RES
JUDICATA ON FORMAL VALIDITY
When submitted to the court for approval, Tasiana
attacked its validity on the ground that the heirs Q: What is the scope of a final decree of probate?
cannot enter into a compromise agreement
without first probating Francisco’s will. Tasiana A: A final decree of probate is conclusive as to the
relied on Guevara v. Guevara (74 Phil. 479) where due execution of the will, i.e., as to the extrinsic or
the court held that the presentation of a will for formal validity only.
probate is mandatory and that the settlement and
distribution of an estate on the basis of intestacy Q: After an ante mortem proceeding, the will was
when the decedent left a will, is against the law allowed. Later on, during the post mortem probate
and public policy. Decide. proceedings, one of the heirs filed a criminal case
alleging falsification in the execution of the will.
A: The Guevara ruling is not applicable in this case Will the action prosper?
because here, there was no attempt to settle or
distribute the estate among the heirs before the A: No. Pursuant to Sec. 1, Rule 75 of the Rules of
probate of the will. The clear object of the contract Court, the probate court inquires into its due
was merely Tasiana’s conveyance of any and all her execution. Regardless of whether it is ante mortem
individual share and interest, actual or eventual in or post mortem, once an issue of due execution has
the estate. There is no stipulation as to any other already been passed upon by the probate court, it
claimant, creditor or legatee. would constitute res judicata if such issue be raised
again. In the present scenario, the issue on due
As a hereditary share in a decedent's estate is execution was already passed upon and therefore,
transmitted or vested immediately from the allegations of whatever ground assailing the due
moment of the death of such causante or execution of the will, will be barred by res judicata.
predecessor in interest, there is no legal bar to a
successor (with requisite contracting capacity) Q: If a probate court passed upon the intrinsic
disposing of her or his hereditary share immediately validity of a will pursuant to the exceptions as
after such death, even if the actual extent of such regards its powers and jurisdiction, may the
share is not determined until the subsequent decision of that probate court be considered as res
liquidation of the estate. judicata?
Also, as Francisco’s surviving spouse, Tasiana was
his compulsory heir. Wherefore, barring A: Yes. As a general rule, a probate court may only
unworthiness or valid disinheritance, her pass upon the extrinsic validity of the will. However,
successional interest existed independent of by virtue of the exceptions, the probate court may
Francisco's last will and testament and would exist pass upon the intrinsic validity of a will. If it does so,
even if such will were not probated at all. Thus, the then it will constitute as a ruling on such issues on
prerequisite of a previous probate of the will, as the intrinsic validity and questioning such again in a
established in the Guevara and analogous cases, different proceeding shall be barred by res judicata.
can not apply to the case.
B. GROUNDS FOR DENYING PROBATE
Note: Neither the aleatory character of the contract
nor the coetaneous agreement that the numerous Q: What are the grounds for disallowance of a
litigations between the parties are to be considered will?
settled and should be dismissed, although such
stipulation gives the contract the character of a A: FIFUSM
compromise, affect the validity of the transaction. (De 1. The Formalities required by law have not
Borja, et al. v. Vda. de Borja, G.R. No. L-28040, Aug. been complied with;
18, 1972) 2. The testator was Insane or otherwise
mentally incapable of making a will, at the
Q: When a person dies testate, may his heirs opt time of its execution;
for an extrajudicial partition instead of having the 3. The will was executed through Force or
will probated? under duress, or influence of fear or
threats;
A: No. In the subsequent case of Riosa v. Rocha 4. The will was procured by Undue and
(1926), 48 Phil. 737, the Court held that an improper pressure and influence, on part
extrajudicial partition is not proper in testate of the beneficiary or some other person;
succession.
309
5. The Signature of testator was procured by the Philippines despite being valid where executed.
fraud. (2000 Bar Question)
6. The testator acted by Mistake or did not
intend that the instrument he signed B. INSTITUTION OF HEIRS
should be his will at the time of affixing
his signature thereto.(Art. 839) Q: How is institution of heir defined under Article
840?
Note: The list is exclusive.
A: Institution of heir is an act by virtue of which a
Q: When do the following constitute as grounds testator designates in his will the person or persons
for disallowance? who are to succeed him in his property and
transmissible rights and obligations (Art. 840, NCC).
1. Violence
Note: Institution cannot be allowed to affect the
A: When in order to compel the testator to legitime.
execute a will, serious or irresistible force is
employed There can be an instituted heir only in testamentary
succession.
2. Intimidation
Q: What are the requisites of a valid institution?
A: When the testator is compelled by a
reasonable and well-grounded fear of an A
imminent and grave evil upon his person or 1. The will must be extrinsically valid;
property of his spouse, descendants, or
ascendants, to execute the will Note: The testator must have the testamentary
capacity to make the institution.
3. Undue Influence
2. The institution must be intrinsically valid;
A: When a person takes improper advantage
of his power over the will of another, depriving Note: The legitime must not be impaired, the
person instituted must be identified or
the latter of a reasonable freedom of choice.
identifiable, and there is no preterition.
4. Mistake
3. The institution must be effective.
A: Pertains to the “mistake in execution” which
Note: No repudiation by the heir; testator is not
may either be: predeceased by the heir.
1. mistake as to the identity or character of
the instrument which he signed, or Q: What are the effects if a will does not contain
2. mistake as to the contents of the will an institution of heir?
itself.
A: The will shall be valid even though it does not
Q: Manuel, a Filipino, and his American wife contain an institution of heir, or such institution
Eleanor, executed a joint will in Boston, should not comprise the entire estate, and even
Massachusetts when they were residing in said though the person so instituted should not accept
city. The law of Massachusetts allows the the inheritance or should be incapacitated to
execution of joint wills. Shortly thereafter, Eleanor succeed. (Art. 841)
died. Can the said will be probated in the
Philiipines for the settlement of her estate? Note: Institution of heirs is not indispensable and its
absence will not render the will void, provided there
A: Yes, the will may be probated in the Philippines are other testamentary dispositions, like devises and
insofar as the estate of Eleanor is concerned. While legacies or where the will merely disinherits a
the Civil Code prohibits the execution of joint wills compulsory heir.
here and abroad, such prohibition applies only to
Filipinos. Hence, the joint will which is valid where Q: What are the three principles in the institution
executed is valid in the Philippines but only with of heirs?
respect to Eleanor. Under Article 819, it is void with
respect to Manuel whose joint will remains void in A:
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1. Equality – heirs who are instituted without a XPNS:

designation of shares inherit in equal parts. 1. If the identity can become certain by
some event or circumstance, the
Note: Applies only when the heirs are of the disposition is valid. It is important,
same class or same juridical condition and however, that the event or circumstance
involves only the free portion. must appear in the will itself; it cannot be
shown by extrinsic evidence, either oral
As between a compulsory heir and a voluntary or documentary
heir and they are instituted without any 2. A disposition in favor of a definite class or
designation of shares, the legitime must first be group of persons shall be valid.
respected and the free portion shall then be
equally divided between them.
Q: May evidence aliunde be presented to identify
the uknown person?
2. Individuality – heirs collectively instituted are
deemed individually instituted unless contrary A: No. The determinate event or circumstance,
intent is proven. sufficient to indicate with certainty the person
whom the testator wants to favor, must appear in
3. Simultaneity – when several heirs are the will itself; it cannot be shown by extrinsic
instituted, they are instituted simultaneously evidence, either oral or documentary.
and not successively, unless the contrary is
proved. Q: What is the effect if the institution of heir is
based on a false cause?
Q: What are the kinds of institution of heirs?
A: GR: The institution of heir is valid. The false
A: Institution of heir may be: cause shall be considered simply as not written.
1. with a condition
2. with a term XPN: If from the will itself, it appears that the
3. for a certain purpose or cause (modal testator would not have made the institution if
institution) he had known the falsity of the cause, the
institution shall be void.
Q: How must a testator designate an heir?
Note: In case of illegal cause, the cause shall be
A: Generally, the heir must be designated by his considered as not written, unless the illegal cause is
name and surname. This rule is not, however, the principal reason or motive for the disposition, in
mandatory. Even when the name of the heir has which case the institution shall be void.
been omitted but the testator has designated the
heir in such a manner that there can be no doubt as Q: The testatrix devised a parcel of land to Dr.
to who has been instituted, the institution is valid. Rabadilla. It was provided that Dr. Rabadilla will
acquire the property subject to the obligation,
Q: May a conceived child be instituted as an heir? until he dies, to give Maria 100 piculs of sugar, and
in the event of non-fulfillment, the property will
A: A conceived child may be instituted, provided pass to the nearest descendants of the testatrix.
the conditions in Arts. 40 and 41 are present
(Conceptus pro nato habetur). When Dr. Rabadilla died, Maria filed a complaint
to reconvey the land alleging that the heirs of Dr.
Q: May evidence aliunde be presented in order to Rabadilla violated the condition. Is the institution
prove that the testator indeed intended a of Dr. Rabadilla, a modal institution?
particular person to be an instituted heir?
A: Yes, because it imposes a charge upon the
A: Yes. Other proof, including proof aliunde (other instituted heir without, however, affecting the
than the oral declaration of the testator as to his efficacy of such institution.
intention), may be used to ascertain the intention
of the testator. In a modal institution, the testator states the object
of the institution, the purpose or application of the
Q: If the disposition is in favor of an unknown
property left by the testator, or the charge imposed
person, is such valid?
by the testator upon the heir. A mode imposes an
obligation upon the heir or legatee but it does not
A: GR: Every disposition in favor of an unknown
affect the efficacy of his rights to the succession.
person shall be void.
The condition suspends but does not obligate; and
311
the mode obligates but does not suspend.

(Rabadilla v. CA, G.R. No. 113725, June 29, 2000) Note: If a compulsory heir is given a share in
the inheritance, no matter how small, there
1. PRETERITION is no preterition.
Q: What is preterition? However, if a compulsory heir gets less than

his legitime, while this is not a case of
A: Preterition is the omission in testator’s will of preterition. In this case, he is entitled to a
completion of his legitime under Art. 906.
one, some or all of the compulsory heirs in the
direct line, whether living at the time of execution
2. Has received nothing by way of donation
of the will or born after the death of the testator.
inter vivos or propter nuptias; and
(Art. 854)
Note: If a compulsory heir has already
Q: What does “born after the death of the
received a donation from the testator, there
testator” mean? is no preterition.
A: It simply means that the omitted heir must Reason: A donation to a compulsory heir
already be conceived at the time of death of the is considered an advance of the
testator but was born only after the death of the inheritance.
testator.
3. Will receive nothing by way of intestate
Q: What are the requisites of preterition? succession.
A: Q: What are the effects of preterition?
1. There is a total omission in the inheritance;
2. The person omitted is a compulsory heir in the A:
direct line; 1. Preterition annuls the institution of heirs;
3. The omitted compulsory heir must survive the 2. Devices and legacies are valid insofar as they
testator, or in case the compulsory heir are not inofficious;
predeceased the testator, there is a right of 3. If the omitted compulsory heir dies before
representation; testator, institution shall be effectual, without
4. Nothing must have been received by the heir prejudice to right of representation.
by gratuitous title.
3. COMPULSORY HEIRS IN THE DIRECT LINE
2. CONCEPT
Q: May the omission of an illegitimate child in a
Q: Who may be preterited? will be equal to preterition?
A: Compulsory heirs in the direct line. A: Yes. Art 854 does not distinguish. It is immaterial
whether the heir omitted in the testator’s will is
Q: May a spouse be preterited? legitimate or illegitimate provided that he is a
compulsory heir in the direct line
A: No. While a spouse is a compulsory heir, he/she
is not in the direct line (ascending or descending). Q: If an ascendant was omitted, is there
preterition?
Q: May the decedent’s parents be preterited?
A: Yes. legitimate parents and ascendants with
A: Yes, if there is an absence of legitimate respect to their legitimate children and
compulsory heirs in the descending line. This is the descendants and Father and the mother of the
effect of the application of the rule on preference illegitimate persons are considered as compulsory
of lines. heirs in the direct line.
Q: When is there a total omission of a compulsory Q: May the omission of an adopted child amount
heir? to preterition?
A: There is total omission when the heir: A: Yes. It is submitted that an adopted child is by
1. Receives nothing under the will whether legal fiction considered a compulsory heir in the
as heir, legatee, or devisee;
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direct line. Besides an adopted child is by law given Reason: The nullification of such institution of the
all of the successional rights of a legitimate child. universal heirs without any other testamentary
disposition in the will amounts to a declaration
Q: Who are the compulsory heirs in the direct line? that nothing at all was written.
A: Q: Will the mere fact that an heir was omitted in a

1. Legitimate children and descendants with will, automatically equate to preterition?
respect to their legitimate parents or
ascendants; A: No. One must distinguish whether the omission
2. Legitimate parents of ascendants, with respect of a forced heir in the will of the testator is by
to their legitimate children and descendants; mistake or in advertence or voluntary or
3. Illegitimate children intentional:
4. The father or mother of illegitimate children a. If by mistake or inadvertence, there is
true preterition and total intestacy
Note: The surviving spouse is not included. An results.
adopted child is by legal fiction considered a b. If the omission is intentional, the effect
compulsory heir in the direct line. would be a defective disinheritance
covered by art 918 in which case the
4. PRETERITION VS. DISPOSITION LESS THAN institution of heir is not wholly void but
LEGITIME only in so far as it prejudices the legitime
of the person disinherited
Q: What are the distinctions and similarities
between imperfect disinheritance and preterition? Q: What are the rights of the preterited heirs?
A: A: They are entitled not only to their shares of the

IMPERFECT PRETERITION legitime but also to those of the free portion which
DISINHERITANCE was not expressly disposed of by the testator by
Distinctions way of devises and legacies.
The institution remains The institution of heirs
valid, but must be is completely annulled. Q: What is the effect if the heir predeceases the
reduced insofar as the testator?
legitime has been
impaired. A: If the heir who predeceases the testator is a
Similarities voluntary heir, a devisee or a legatee, he shall
In both cases, the omitted heir and the transmit no right to his own heirs.
imperfectly disinherited heir get at least their
Note: The rule is absolute with respect to a voluntary
legitime
heir and a devisee or legatee.
Both legacies and devises remain valid insofar as
the legitime has not been impaired. Q: What is the effect if the heir repudiated or
Both legacies and devises refer to compulsory renounced his inheritance?
heirs.
A: An heir who renounced his inheritance, whether
5. EFFECTS OF PRETERITION, DEVISEES ONLY as compulsory or as voluntary heir, does not
ENTITLED TO COMPLETION OF LEGITIME transmit any right to his own heirs.
Note: An heir who repudiated his inheritance, may
Q: What is the effect of preterition on the will represent the person whose inheritance he has
itself? renounced. (Art 976)
A: GR: The effect of annulling the institution of Q: What can the compulsory heir do if the testator
heirs will be, necessarily, the opening of a total left title less than the legitime belonging to the
intestacy except that proper legacies and devises former?
must be respected. Here, the will is not abrogated. A: Any compulsory heir to whom the testator has
left by any title less than the legitime belonging to
XPN: If the will contains a universal institution him may demand that the same be fully satisfied.
of heirs to the entire inheritance of the (Art. 906)
testator, the will is totally abrogated.
Note: Testamentary dispositions that impair or
diminish the legitime of the compulsory heirs shall be
313
reduced on petition of the same, insofar as they may Q: When will the substitution be extinguished?
be inofficious or excessive. (Art. 907)
A:
Q: If the testator instituted only one heir and 1. By the nullity of the will;
allotted only an aliquot part, what will happen to 2. By the annulment of the institution of heir;
the remainder? 3. By the death of the substitute before the
testator;
A: If the testator has instituted only one heir, and
4. When the substitute himself is incapacitated to
the institution is limited to an aliquot part of the succeed the testator;
inheritance, legal succession takes place with 5. When the substitute repudiates or renounces
respect to the remainder of the estate. the inheritance.
Q: If the testator instituted several heirs as sole
2. KINDS
heirs but what was allotted was only part of the
inheritance, what will happen?
Q: What are the different kinds of substitution?
A: If the testator instituted several heirs as sole
A:
heirs but allotted only an aliquot part of the
1. Simple/common – takes place when the heir
inheritance and together they do not cover the
instituted:
whole inheritance, or the whole free portion, each
a. predeceases testator;
part shall be increased proportionately.
b. repudiates the inheritance; or
Q: What if such allotment exceeds the whole of c. is incapacitated to succeed
the inheritance, what will happen? What will be
the extent of deduction, if any? Note: Simple substitution without a statement of
the causes, to which it refers, shall comprise the 3
above mentioned situations unless the testator
A: If each of the instituted heirs has been given an
has otherwise provided.
aliquot part of the inheritance and the parts
together exceed the whole inheritance, or the
2. Brief/compendious – when two or more
whole free portion, as the case may be, each part
persons are substituted for one or for two or
shall be reduced proportionately.
more heirs.
C. SUBSTITUTION OF HEIRS
3. Reciprocal – one heir designated as substitute
1. DEFINITION AND CONCEPT for instituted heir while latter is
simultaneously instituted as substitute for
Q: What is substitution? former.
Note: GR: The substitute shall be subject to the same

A: Substitution is the appointment of another heir
charges and conditions imposed upon the instituted
so that he may enter into the inheritance in default
heir
of the heir originally instituted. (Art 857)
XPN:
1. If the testator has expressly provided the
Q: Where does the concept of substitution apply? contrary
2. If the charges or conditions are personally
A: Substitution applies in cases if the heir or heirs applicable only to the heir instituted. (Art 862)
instituted should die before the testator or should
not wish, or should be incapacitated to accept the 4. Fideicommissary Substitution (Indirect
inheritance. If the statement of substitution is Substitution) – It is a substitution by virtue of
without a statement of the cases to which it refers, which the fiduciary or first heir instituted is
the same shall comprise three cases, unless the entrusted with the obligation to preserve and
testator provides otherwise. to transmit to a second heir the whole or part
of the inheritance, shall be valid and shall take
Q: What is the effect if the substitute dies ahead of effect, provided such substitution does not go
the testator? beyond one degree from the heir originally
instituted, and provided, further, that the
A: The substitute which dies ahead of testator fiduciary or first heir and the second heir are
prevents him from acquiring any rights, since these living at the time of the death of the testator.
is no substitution to speak of.
3. FIDEICOMMISSARY SUBSTITUTION
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the property but there is

Q: Who are the parties to a fideicommissary a limit to the circulation
substitution and what are their respective of the property.
obligations? The fideicommissary is
The identity of the limited to relatives
A: substitute does not within one degree from
matter. the first heir or fiduciary:
PARTIES OBLIGATIONS
parent–child.
He has the obligation to
First heir or
preserve and transmit the
fiduciary Q: What are the conditions for a valid
inheritance.
fideicommissary substitution?
Second heir or He eventually receives the
fideicommissary property from the fiduciary.
A:
Testator None
1. That the institution does not go beyond one
degree from the heir originally instituted;
Q: What are the distinctions between direct 2. That the substitution be expressly made;
substitution and indirect substitution? 3. That both the fiduciary and beneficiary be
living at the time of the testator’s death;
A: 4. That it should be imposed on the free portion
INDIRECT and not on the legitime.
SUBSTITUTION
DIRECT SUBSTITUTION
(Fideicommissary
Q: What are the elements/requisites of
Substitution)
fideicommissary substitution?
The substitute receives
The substitute receives
the property in default
the property after the A:
of the first heir
heir first instituted has 1. There must be a first heir or fiduciary;
instituted who does not
enjoyed the same for 2. An absolute obligation is imposed upon the
or cannot receive the
some time. fiduciary to preserve and to transmit to a
same.
There are various second heir the property at a given time;
liberalities, one that is 3. There is a second heir who must be one
immediate and the other degree from the first heir;
There are two liberalities
or others eventual, but 4. The first and second heir must both be living
which are both effective
with only one of them and qualified at the time of the death of the
but successively
effective (because testator.
enjoyed.
ultimately either the
instituted heir succeeds 1. FIDUCIARY
or it is the substitute).
The first heir instituted is There must be a first heir or fiduciary
The testator so directs obliged to preserve the
the transmission of his property for the benefit Note: The first heir receives property, either upon the
property that one or of one or more death of the testator or upon the fulfillment of any
more heirs enjoy and succeeding heirs and his suspensive condition imposed by the will.
may freely dispose of power of alienation is
the same. curtailed or at least The first heir is almost like a usufructuary with right to
limited. enjoy the property. Thus, like a usufructuary, he
Has a further social cannot alienate the property. The first heir is obliged
No other purpose than effect as it limits the free to make an inventory but he is not required to furnish
to prevent the circulation of property a bond.
succession of the and for such reason
intestate heirs. many laws prohibit the Q: What are the obligations of a fiduciary?
same or limit it.
There is only one
There are 2 transfers A:
transfer.
1. To preserve the inheritance;
No absolute disposition
2. To deliver the inheritance;
because it is subject to
Has the free and 3. To make an inventory of the inheritance.
the condition that he
absolute disposition and
will preserve and
control over the Q: What is the effect of alienation of the property
transmit the same to the
property. subject to the fideicommissary substitution by the
fideicommissary. And
also, there is control on first heir?
315
A: The transfer is not valid. The fiduciary cannot There is a second heir who must be one degree from
alienate the property either by an act inter vivos or the first heir.
mortis causa. He is bound to preserve the property
and transmit it to the second heir or Q: What does “one degree” mean?
fideicommissary.
A: "One degree" refers to the degree of
Q: What is the period of the fiduciary’s tenure? relationship; it means “one generation”. As such,
the fideicommissary can only be either a parent or
A: child of the first heir.
1. Primary rule – the period indicated by the
testator Note: The relationship is always counted from the first
2. Secondary rule – if the testator did not indicate heir. However, fideicommissary substitutions are also
a period, then the fiduciary’s lifetime limited to one transmission. Upon the lapse of time
for the first heir, he transmits the property to the
Q: Is the fiduciary allowed to make deductions to second heir. In other words, there can only be one
the inheritance? fideicommissary transmission such that after the first,
there can be no second fideicommissary substitution.
A: GR: The fiduciary should deliver the property
intact and undiminished to the fideicommisary heir CAPACITY TO SUCCEED OF FIDUCIARY AND
upon arrival of the period FIDEICOMMISSARY
XPN: The only deductions allowed, in the The first and second heir must both be living and
absence of a contrary provision in the will are: qualified at the time of the death of the testator.
1. Legitimate expenses;
2. Credits; Q: Why must both the first and second heir be
3. Improvements living and qualified at the time of the death of the
testator?
Note: The coverage of legitimate expenses and
improvements are limited to necessary and useful A: The fideicommissary inherits not from the first
expenses, but not to ornamental expenses. heir but from the testator, thus, the requirement
that the fideicommissary be alive or at least
2. ABSOLUTE OBLIGATION conceived at the time of the testator’s death.
TO PRESERVE AND TRANSMIT PROPERTY
Note: The fideicommissary substitution must not be
An absolute obligation is imposed upon the imposed on the legitime, only on the free portion.
fiduciary to preserve and to transmit to a second
heir the property at a given time. Q: Do the heirs to a fideicommissary substitution
inherit successively?
Q: How should an absolute obligation to preserve
and to transmit be imposed upon the fiduciary? A: No. Both the first heir and the fideicommissary
inherit the property simultaneously, although the
A: The obligation to preserve and transmit must be enjoyment and possession are successive.
given clearly and expressly by giving it a name
“fideicommissary substitution” or by imposing upon Note: From the moment of death of the testator, the
rights of the first heir and the fiduciary are vested.
the first heir the absolute obligation to preserve
and deliver the property to the second heir.
Q: What is the effect if the fideicommissary
st predeceases the fiduciary?
Q: If the testator provided that the 1 heir shall
enjoy the property during his life and that upon his
A: If the fideicommissary predeceases the fiduciary,
death it shall pass to another expressly designated
but survives the testator, his rights pass to his own
by the testator, but without imposing the
heirs.
obligation to preserve the property, is there
fideicommissary substitution in this case?
Q: What is the remedy of the fideicommissary to
A: None. There is no fideicommissary substitution
protect himself against alienation to an innocent
but merely a legacy of the usufruct of the property.
third person?
3.FIDEICOMMISSARY
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SUCCESSION
A: If the first heir was able to register the property A: In a fideicommissary substitution, the intention
in his name, fideicommissary should annotate his of the testator is to make the second heir his
claim on the land on the title to protect himself ultimate heir. The right of the second heir is simply
against any alienation in favor of innocent third postponed by the delivery of the inheritance to the
parties. first heir for him to enjoy the usufruct over the
inheritance. Hence, when the first heir predeceased
When the property passes to the fideicommissary, the testator, the first heir did not qualify to inherit
there is no more prohibition to alienate. and the right of the second heir to receive the
inheritance will no longer be delayed provided the
Q: What is the effect of the nullity of the second heir is qualified to inherit at the time of the
fideicommissary substitution? testator’s death. In fideicommissary substitution,
the first and second heirs inherit from the testator,
A: The nullity of the fideicommissary substitution hence, both should be qualified to inherit from the
does not prejudice the validity of the institution of testator at the time of his death.
the heirs first designated; the fideicommissary
clause shall simply be considered as not written. In the problem, when Ruffa predeceased Raymund,
she did not qualify to receive the inheritance to
Q: If the testator gives the usufruct to different enjoy it usufruct, hence, the right of Scarlet to
persons successively, what rules will apply? receive the inheritance upon the death of the
testator will no longer be delayed. However, Scarlet
A: The provisions on fideicommissary substitution is not qualified to inherit from Rayond because she
also apply in a case where the testator gives the is barred by Art. 992 of NCC being an illegitimate
usufruct to various persons successively. child of Raymond’s illegitimate father. The devise
will therefore be ineffective and the property will
Q: Raymond, single, named his sister Ruffa in his be disposed of by intestacy. (2008 Bar Question)
will as a devisee of a parcel of land which he
owned. The will imposed upon Ruffa the D. CONDITIONAL TESTAMENTARY DISPOSITIONS
obligation of preserving the land and transferring AND TESTAMENTARY DISPOSITIONS WITH A TERM
it, upon her death, to her illegitimate daughter
Scarlet who was then only one year old. Raymond Q: What are the various kinds of institution?
later died, leaving behind his widowed mother,
Ruffa and Scarlet. A: Institution of heir may be:
Is the condition imposed upon Ruffa to preserve 1. With a condition
the property and to transmit it upon her death to 2. With a term
Scarlet, valid? 3. For a certain purpose or cause (modal
Institution)
A: When an obligation to preserve and transmit the
property to Scarlet was imposed on Ruffa, the Note: Conditions, terms and modes are not presumed,
testator Raymond intended to create a they must be clearly expressed in the will. The
fideicommissary substitution where Ruffa is the condition must fairly appear from the language of the
will. Otherwise, it shall be considered pure.
fiduciary and Scarlet is the fideicommisary. Having
complied with the requirements of Art. 863 and 869
Q: What is a condition?
(NCC), the fideicomissary substitution is valid.
A: it is future or uncertain event or a past event
Q: If Scarlet predeceases Ruffa, who inherits the
unknown to the parties, upon which the
property?
performance of an obligation depends.
A: If Scarlet predeceases Ruffa, the fideicommissary
Q: What are the kinds of condition?
substitution is rendered null or ineffective under
Art.863 (NCC). And applying Art. 868 (NCC), the
A:
fideicommissary clause is disregarded without
1. Suspensive condition gives rise to the right if it
prejudice to the validity of the institution of the
happens.
fiduciary. In such case Ruffa shall inherit the device
2. Resolutory condition extinguishes the right if
free from the condition.
it happens.
Q: If Ruffa predeceases Raymond, can Scarlet
inherit the property directly from Raymond? Resolutory Condition Suspensive Condition
The disposition becomes The effectivity of the
effective upon the death disposition is
317
of the testator but is dependent upon the GR: The condition must be fulfilled as soon as
extinguished upon the fulfillment of the the heir learns of the testator’s death.
happening of the condition.
condition. XPN: If the condition has already been fulfilled
and it cannot be fulfilled again, the condition is
Q: What is the effect of an impossible condition on deemed.
the testamentary disposition?
2. Casual – The fulfillment of the condition
A: Impossible conditions and those contrary to law depends solely on chance or on the will of a
or good customs shall be considered as not third person.
imposed and shall in no manner prejudice the heir, 3. Mixed – The fulfillment of the condition
even if the testator should otherwise provide. (Art depends partly on chance and partly on the
873) will of the heir, devisee, or legatee.
Q: What is the rule on the imposition of condition, Q: What are the rules for casual and mixed
charge or burden on the legitimes? conditions?
A: GR: The condition may be fulfilled any time,

A: GR: The testator cannot impose any charge,
either before or after the testator’s death unless
condition or substitution whatsoever upon the
the testator provides otherwise.
legitimes. If a charge condition or substitution is
imposed, it shall be considered as not imposed.
XPN:
1. If the condition is fulfilled at any time
XPN: Testator can validly impose a prohibition
before the death of the testator, the
against the partition of the legitime for a
condition is deemed fulfilled, unless the
period not exceeding 20 years.
testator provides otherwise.
2. If condition is already fulfilled at the time
Q: What is the rule regarding conditions on the
of the execution:
prohibition to marry?
a. Testator is unaware- The condition is
deemed complied with or fulfilled.
A: GR: An absolute condition not to contract a first
b. Testator is aware-
or subsequent marriage is not a valid condition and
1. If the condition can no longer
shall be considered as not written. (Art.874)
be fulfilled again, it is deemed
However, the validity of the disposition itself shall
fulfilled.
not be affected.
2. If the condition can still be
fulfilled, fulfill it again.
XPN: If such condition was imposed on the
widow or widower by the deceased spouse or
Q: What is the effect of a Suspensive Condition?
by the latter’s ascendants or descendants, in
which case, the condition is valid. (Art. 874)
A:
Q: What is a “Disposition Captatoria”? 1. Heir, Devisee, or legatee acquires no rights
until the condition is fulfilled.
A: Any disposition made upon the condition that 2. If he dies before the condition is fulfilled, he
the heir shall make some provision in his will in transmits no rights to his heirs, even though he
favor of the testator or of any other person shall be survived the testator. Reason: Capacity to
void. (Art 875). Here, both the condition and the succeed by the conditional heir must be
disposition are void. determined both at the time of the death of
the testator and at the time of the fulfillment
Reason for the prohibition: Disposition captatoria is of the condition.
incompatible with good faith and with the nature of 3. Once the condition is fulfilled, its effects
testaments; it is immoral and contrary to the retroact to the moment of the death of the
freedom to make wills. testator.
4. If the suspensive condition is not fulfilled, the
Q: What are the kinds of suspensive conditions? estate will be placed under administration
until:
A: a. The condition is fulfilled, in which case
1. Purely Potestative – the fulfillment of the the estate should be given to the
condition depends solely upon the will of the instituted heir;
heir, devisee or legatee
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b. It becomes obvious that it cannot be after the testator but when the condition
fulfilled, in which case, the estate should before the term expires, happens. (Art 1034, par
be given to the intestate heirs. he can transmit his 3)
rights to his own heirs.
Q: Must there be actual or strict fulfillment of the The death of the The death of the
condition, or is constructive or substantial instituted heir before instituted heir before
fulfillment sufficient? the arrivalof the term the fulfillment of the
does not annul the condition annuls the
A: institution. institution.
1. Casual Condition- there must be actual or strict
fulfillment. Q: When the disposition is subject to a term, what
2. Potestative Condition- there can be should be done by the instituted heirs or legal
constructive fulfillment, i. e. Heir or legatee heirs so that they can enjoy possession of the
has done everything to perform the condition property?
and yet for some reason or another it cannot
be fulfilled. A: If the disposition or subject to a:
3. Mixed Condition- 1. Suspensive term- The legal heirs can enjoy
GR: There must be actual or strict fulfillment possession of the property until the
expiration of the period but they must put
XPN: There can be constructive fulfillment up a bond (caucion muciana) in order to
when the heir has done everything in his protect the right of the instituted heir.
power to comply and still the condition is not 2. Resolutory term- The legal heirs can enjoy
fulfilled because it was prevented by a third possession of the property but when the
party interes in its non-fulfillment. term arrives, he must give it to the legal
heirs. The instituted heir does not have to
Q: What is negative potestative condition? file a bond.
A: It consists in the non-performance of an act or Q: What is “Caucion Muciana”?

not giving something.
A: A caucion muciana is a security or bond required
Note: The heir instituted has a right to receive his from the conditional heir in order to secure the
share in the inheritance upon the death of the testator rights of those who would succeed to the property
and loses his right only when he violates the condition. upon violation of the condition.
Q: What is a term? Q: What are the instances when caucion muciana

is needed?
A: It is any future and certain event upon the arrival
of which the validity or efficacy of a testamentary A:
disposition subject to it depends. 1. Suspensive condition
2. Negative potestative condition
Note: A disposition with a suspensive term does not
3. Mode
prevent the instituted heir from acquiring his rights
and transmitting them to his heirs even before the
arrival of the term. Q: What is a mode?
Reason: The right of the heir instituted subject to a A: It is an obligation imposed upon the heir to do or
term is vested at the time of the testator's death - he to give something
will just wait for the term to expire.
Modal institution – statement of
If the heir dies after the testator but before the term 1. Object of the institution,
expires, he transmits his rights to his own heirs 2. Application of the property left by the
because of the vested right. testator,
3. Charge imposed by him.
Suspensive Term Suspensive Condition
The right of the heir The heir enters into the Q: What is a modal disposition?
instituted subject to a inheritance only when
term is vested at the he is alive and qualified A: A “mode” imposes an obligation upon the heir,
time of the testator’s at the time of the devisee or legatee, but it does not affect the
death. Hence, if he dies testator’s death and
319
efficacy of his rights to the succession. The mode 2. Donations made to strangers shall be charged
obligates but does not suspend. to that part of the estate of which the testator
could have disposed by his last will.
Q: How does a mode differ from a condition? 3. Insofar as they may be inofficious or may
exceed the disposable portion, they shall be
A: reduced according to the rules established by
MODE CONDITION this Code. (Art. 909)
Imposes an The condition must 4. Donations which an illegitimate child may have
obligation upon the happen or be fulfilled received during the lifetime of his father or
heir, devisee or in order for the heir mother, shall be charged to his legitime.
legatee, but it does to be entitiled to Should they exceed the portion that can be
not affect the succeed the testator. freely disposed of, they shall be reduced in the
efficacy of his rights manner prescribed by this Code. (Art. 910)
to the succession.
Obligates but does Suspends but does Q: In relation to Articles 908 to 910, how shall the
not suspend not obligate reduction from the legitime be made?
In case of doubt, the
institution should be A: After the legitime has been determined in
considered as modal accordance with the three preceding articles, the
not conditional. reduction shall be made as follows:
E. LEGITIME 1. Donations shall be respected as long as

the legitime can be covered, reducing or
1. DEFINITION annulling, if necessary, the devises or
legacies made in the will;
Q: Define legitime. 2. The reduction of the devises or legacies
shall be pro rata, without any distinction
A: Legitime is that part of the testator's property whatever.
which he cannot dispose of because the law has
reserved it for certain heirs who are, therefore, If the testator has directed that a certain
called compulsory heirs. (Art. 886) devise or legacy be paid in preference to
others, it shall not suffer any reduction
Note: There is compulsion on the part of the testator until the latter have been applied in full to
to reserve that part of the estate which corresponds to the payment of the legitime.
the legitime. 3. If the devise or legacy consists of a
usufruct or life annuity, whose value may
Q: How is legitime determined? be considered greater than that of the
disposable portion, the compulsory heirs
A: To determine the legitime, the value of the may choose between complying with the
property left at the death of the testator shall be testamentary provision and delivering to
considered, deducting all debts and charges, which the devisee or legatee the part of the
shall not include those imposed in the will. inheritance of which the testator could
freely dispose. (Art. 911)
To the net value of the hereditary estate, shall be 4. If the devise subject to reduction should
added the value of all donations by the testator consist of real property, which cannot be
that are subject to collation, at the time he made conveniently divided, it shall go to the
them. (Art. 908) devisee if the reduction does not absorb
one-half of its value; and in a contrary
Q: Cite the rules governing the donations made by case, to the compulsory heirs; but the
the testator in favor of his children, legitimate and former and the latter shall reimburse
illegitimate, and strangers and those which are each other in cash for what respectively
inofficious. belongs to them. (Art. 912) The devisee
who is entitled to a legitime may retain
A: the entire property, provided its value
1. Donations given to children shall be charged to does not exceed that of the disposable
their legitime. portion and of the share pertaining to him
as legitime. (id.)
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Note: If the heirs or devisees do not choose to

avail themselves of the right granted by the A:
preceding article, any heir or devisee who did not 1. Rule of preference between lines – descending
have such right may exercise it; should the latter line is preferred over the ascending line;
not make use of it, the property shall be sold at 2. Rule of proximity;
public auction at the instance of any one of the 3. Right of representation, in case of predecease,
interested parties. (Art. 913) incapacity and disinheritance;
4. If all the legitimate children repudiate their
The testator may devise and bequeath the free
legitime, the next generation of legitimate
portion as he may deem fit. (Art. 914)
descendants, succeed in their own right.
RULES ON LEGITIME
Q: What are the rules governing succession in the
ascending line?
Q: Can the testator deprive the compulsory heirs
their legitimes? A:
1. Rule of proximity – nearer excludes the more
A: No. The testator cannot deprive the compulsory remote;
heirs of their legitimes, except through 2. Division by line;
disinheritance. 3. Equal division within the line.
Note: Only the legitime is reserved. The free portion
Q: What is/are the remedy(ies) available to a
may be disposed of by will.
compulsory heir whose legitime has been
impaired?
Q: Must compulsory heirs accept their legitimes?
A:
A: No. There is no obligation on the compulsory
1. In case of preterition – annulment of
heirs to accept.
institution of heir and reduction of devises and
legacies
Q: What are the kinds of legitime?
2. In case of partial impairment – completion of
legitime
A:
3. In case of inofficious donation – collation
1. Fixed – If the amount (fractional part) does not
vary or change regardless of whether there are
Q: Is the renunciation or compromise of future
concurring compulsory heirs or not.
legitime allowed?
a. legitimate children and descendants
(legitimate children’s legitime is always ½)
A: The renunciation or compromise is prohibited
b. legitimate parents and ascendants
and considered null and void.
2. Variable – If the amount changes or varies in
accordance with whom the compulsory heir
Q: What is the scope of the prohibition?
concur.
A:
Note: Factors which affect the legitime:
1. Any renunciation of future legitimes, whether
1. Identity of the concurring compulsory heirs
and; for a valuable consideration or not;
2. Number of concurring compulsory heirs. 2. Any waiver of the right to ask for the reduction
of an innoficious donation;
3. Compromise between the compulsory heirs
Q: What are the limitations imposed on the
themselves during the lifetime of the testator.
testator regarding his rights of ownership?
Note: The prohibition is not applicable in cases of:
A: The testator cannot make donations inter vivos 1. Renunciations or compromises made after
which impinge upon the legitime or which are the death of the testator;
inofficious. 2. Donations or remissions made by the
testator to the compulsory heirs as advances
Note: The prohibition does not cover an onerous of their legitime.
disposition (sale) because this involves an exchange of
values.
Q: What is the order of preference in reducing
testamentary dispositions and donations?
Q: What are the rules governing succession in the
direct descending line?
A:
321
1. Legitime of compulsory heirs (Net hereditary estate = [Gross estate – Debts

2. Donations inter vivos and Charges] + donations)
3. Preferential legacies or devises
4. All other legacies or devises pro rata. 4. Determine who are the compulsory heirs and
their corresponding legitimes using the table
Note: The order of preference is applicable when: of legitimes below.
1. The reduction is necessary to preserve the 5. Determine the free portion.
legitime of compulsory heirs from
impairment whether there are donations Free portion = net hereditary estate
inter vivos or not; or Less: legitimes (total amount)
2. Although, the legitime has been preserved
by the testator himself there are donations 6. Imputation of donations
inter vivos.
7. Distribution of the remaining portion to the
legatees and devisees.
Q: What are the steps in the distribution of the
estate of the testator? Q: What is the effect of donations to the
inheritance of an heir?
A:
1. Determine the value of the property left at the A: Donations inter vivos given to children shall be
death of the testator. (Gross estate) charged to their legitime, unless otherwise
2. Deduct all debt and charges, except those provided by the testator.
imposed in the will from the gross estate.(Net
asset) Reason: Donations to the compulsory heirs are
3. Add the value of all donations by the testator advances to the legitime.
that are subject to collation.
Note: Donations inter vivos to strangers shall be
charged to the free portion.
TABLES OF LEGITIMES.
Legitimate children or Descendants

Share of legitimate children and descendants ½ of the net estate
Free portion ½ of the net estate
Legitimate Parents and Ascendants

Share of legitimate parents and ascendants ½ of the net estate
One Legitimate child or descendant and Surviving Spouse

Share of a legitimate child ½ of the net estate
Share of the surviving spouse ¼ of the net estate
Free portion ¼ of the net estate
Illegitimate children and legitimate children

Share of legitimate children and descendants ½ of the net estate
½ of the legitime of each legitimate children or
Share of each illegitimate children
ascendant
Free portion Whatever remains
Two or more legitimate children or descendant and Surviving Spouse

Share of a legitimate child ½ of the net estate
Portion equal to the legitime of each of the legitimate
Share of the surviving spouse
children or descendant
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Legitimate Parents or Ascendants and Surviving Spouse

Share of legitimate parents or
½ of the net estate
ascendants
Share of the surviving spouse ¼ of the net estate
Illegitimate children and Surviving Spouse

Share of illegitimate
1/3 of the net estate
children
Share of the surviving
spouse
Free portion 1/3 of the net estate
Legitimate Parents or Ascendants and Illegitimate Children

Shares and of legitimate
parents and ascendants
Illegitimate children ¼ of the net estate
Surviving Spouse; Legitimate Children or Ascendants; Illegitimate Children

Share of legitimate children
and descendants
Surviving spouse Equal to the portion of the legitime of each legitimate child
Illegitimate children ½ of the share of each legitimate child
Legitimate Parents; Surviving Spouse; Illegitimate Children

Shares and of legitimate
parents and ascendants
Surviving spouse 1/8 of the net estate
Illegitimate children ¼ of the net estate
Surviving Spouse Alone; Exception: Marriage in Articulo Mortis

Surviving spouse only ½ of the net estate
Surviving spouse only
(marriage in articulo mortis
, testator died w/in 3
months)
Surviving spouse only
(marriage in articulo mortis
, testator died w/in 3mos. ½ of the net estate
but have been living as
H&W for not less than 5yrs)
323
Illegitimate Children Alone

Share of illegitimate
children
Illegitimate Parents Alone; or With illegitimate children or Legitimate Children or Descendants; or With
Surviving Spouse
Share of the illegitimate
parents alone
Share of illegitimate ¼ of the net estate
parents
Share of the surviving ¼ of the net estate
spouse
TABLE OF INTESTATE SHARES
LEGEND:
Legit. Children or Descendants LCD Illegit. Children or Descendants ILCD
Legit. Parents or Ascendants LPA Illegit. Parents or Ascendants I LPA
Surviving Spouse SS Brothers and Sisters BS
Nephews and Nieces NN
INTESTATE HEIRS SHARE IN THE FREE PORTION

Any Class alone ½ of the free portion
LCD alone
SS ¼ (SS)
LCD Remaining portion of estate after paying legitimes
SS Legitimes to be divided equally between total number of children plus the SS

LCD Remaining portion of estate after paying legitimes
ILCD Legitimes to be divided by the ratio of 2: 1

One LCD Remaining portion of estate after paying legitimes to be divided by the ratio of 2:1
One ILCD One part goes to the ILCD
SS Same share as a legitimate child

LCD Remaining portion of estate after paying legitimes to be divided by the ratio of 2:1
One part goes to the ILCD
ILCD/SS Same share as a legitimate child, provided legitimes are not impaired
LPA
ILCD ¼ (ILCD)
LPA
SS ¼ (SS)
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LPA
SS ⅛ (SS)
ILCD
ILCD 1/6
SS 1/6
SS ½ or ⅓
ILPA ¼
SS ¼
BS,NN ½
SS
BS,NN ½ (BS,NN)
325
Steps in Determining the Legitime of Compulsory

Heirs
Step 1: INVENTORY  Determination of the gross value of the estate at the time of
(Gross Value of Estate) the death of the testator
Step 2: DEDUCT  Determination of all the debts and charges which are
OBLIGATIONS chargeable against the estate
 Determination of the net valueof the estate by deducting all

the debts and charges from the gross value of the estate
Step 3: Net Value
 Collation or addition of all the value of all donations inter

vivos to the net value of the estate
Step 4: Collation
 Determination of the Net Hereditary Estate from the total

Net Hereditary Estate thus found
 Imputation of all the value of donations inter vivos made to

compulsory heirs against their legitimes and of the value of
all donations inter vivos made to strangers against the
disposable free portion and restoration to the hereditary
estate if the donation is inofficious.
 If the legitime is impaired, the following reductions shall be

made:
a. First, reduce pro rata non-preferred legacies and
devices, and the testamentary dispositions.
b. Second, reduce pro rata the preferred legacies and
devises
c. Third, reduce the donations inter vivos according to
the inverse order of their dates.
*** As to the remaining portion of the estate, it shall be

distributed to the devisees and legatees
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2. COMPULSORY HEIRS AND VARIOUS A: “Legitimate children” includes adopted children

COMBINATIONS and legitimated children.
Q: Who are compulsory heirs? Under R.A. 8552 or the Domestic Adoption Law
adopted children have the same rights granted to
A: The following are compulsory heirs: the legitimate children. Adopted children, for all
1. Legitimate children and descendants, intents and purposes are considered as legitimate
with respect to their legitimate parents children.
and ascendants;
2. In default of the foregoing, legitimate The adopted child enjoys successional rights as a
parents and ascendants, with respect to legitimate child, he would exclude the legitimate
their legitimate children and descendants; parents and ascendants.
3. The widow or widower;
4. Acknowledged natural children, and Q: Is formal or judicial adoption necessary before
natural children by legal fiction; the adopted child can inherit from the adopter?
5. Other illegitimate children referred to in
article 287. A: Yes, because adoption is a juridical act, a
proceeding in rem, which created between two
Note: Compulsory heirs mentioned in Nos. 3, 4, and 5 persons a relationship similar to that which results
are not excluded by those in Nos. 1 and 2; neither do from legitimate paternity and filiation.
they exclude one another.
Without the benefit of formal (judicial) adoption,
In all cases of illegitimate children, their filiation must the adopted child is neither a compulsory nor a
be duly proved. legal heir. Hence, he is not entitled to inherit.
The father or mother of illegitimate children of the Q: Is there a relationship between the adpted child
three classes mentioned, shall inherit from them in the and the relatives of the adopter?
manner and to the extent established by this Code.
(Art. 887) A: The relationship established by adoption is
limited solely to the adopter and the adopted and
Q: What are the classifications of compulsory does not extent to the relatives of the adopting
heirs? parents or of the adopted child except only as
expressly provided for by law.
A:
1. Primary compulsory heirs – They are not Q: What is the rule regarding legitimated child?
excluded by the presence of other compulsory
heirs. those who have precedence over and A: Prior to the marriage of the parents of the child,
exclude other compulsory heirs. he is an illegitimate child since he is born outside a
valid marriage.
E.g. legitimate children and / or decendants
Legitimation takes place upon the marriage of the
2. Secondary compulsory heirs – Those who child’s parents, the marriage be valid or at least
succeed only in default of the primary voidable, the child is automatically raised to the
compulsory heirs. status of legitimacy, without need of any additional
act on the part of either the child or the parents.
E.g. legitimate parents and/ or legitimate
ascendants; illegitimate parents Legitimate parents and ascendants (LPA)
3. Concurring compulsory heirs – Those who Q: When do legitimate parents and ascendants
succeed together with the primary or inherit?
secondary compulsory heirs.
A: Legitimate parents and ascendants inherit in
E.g. Surviving spouse and illegitimate children default of legitimate children and descendants.
and descendants. They are secondary compulsory heirs.
Legitimate children and descendants (LCD) Q: Is the presence of illegitimate children of the
decedent exclude the LPA?
Q: Is an adopted child a compulsory heir?
327
A: No. Legitimate parents and ascendants concur 3. RESERVA TRONCAL

with the illegitimate children of the decedent.
Q: What is reserva troncal?
However, if the decedent is himself illegitimate, his
illegitimate children exclude the illegitimate parents A: Reserva troncal – The ascendant who inherits
and ascendants. from his descendant any property which the latter
may have acquired by gratuitous title from another
Surviving spouse (SS) ascendant, or a brother or sister, is obliged to
reserve such property as he may have acquired by
Q: Can a common law spouse be a compulsory operation of law for the benefit of relatives who are
heir? within the third degree and who belong to the line
from which said property came. (Art. 891)
A: No. There must be valid marriage between the
decedent and the surviving spouse. If the marriage Purpose: To prevent persons who are outsiders to
is null and void, the surviving spouse cannot inherit. the family from acquiring, by chance or accident,
property which otherwise would have remained
Q: How can the heirs of the decedent use the with the said family. In short, to put back the
nullity of marriage to prevent the surviving spouse property to the line from which it originally came.
from inheriting?
Note: Other terms used to refer to reserva troncal:
A: The heirs can raise the issue of nullity of the 1. Lineal
marriage in the same proceeding for the settlement 2. Familiar
of the estate. This is allowed because a marriage 3. Extraordinaria
that is null and void can be collaterally attacked. 4. Semi-troncal
5. Pseudo-troncal
However, in case of voidable marriages, if the
marriage is not annulled before the decedent died, Q: What are the requisites that must exist in order
the surviving spouse can still inherit that a property may be impressed with a
reservable character?
Reason: Voidable marriages can only be attacked in
a direct proceeding, i.e. annulment proceeding. A:
1. That the property was acquired by a
Note: The surviving spouse is not a compulsory heir of descendant (called “praepositus” or
his/her parent-in-law. propositus) from an ascendant or from a
brother or sister by gratuitous title when the
Separation-in-fact will not disqualify the surviving recipient does not give anything in return;
spouse from getting his/her legitime, regardless of 2. That said descendant (praepositus) died
his/her guilt. without an issue;
3. That the same property (called “reserva”) is
Illegitimate children inherited by another ascendant (called
“reservista”) by operation of law (either
Note: Under the Family Code, there is no more through intestate or compulsory succession)
distinction between acknowledged natural children from the praepositus; and
and illegitimate children. They are all considered as 4. That there are living relatives within the third
illegitimate. degree counted from the praepositus and
belonging to the same line from where the
Compulsory heirs of a person who is illegitimate:
property originally came (called
1. Legitimate children and descendants;
2. Illegitimate children and descendants;
“reservatarios”). (Art. 891; Chua v. CFI of
3. In default of the foregoing, illegitimate Negros Occidental, Branch V, 78 SCRA 412;
parents only; Rabuya, Civil Law Reviewer, pp. 634-635)
4. Surviving spouse.
Q: Does reserva troncal exist in an illegitimate or
Q: In what ways may compulsory heirs inherit? adoptive relationship?
A: Compulsory heirs inherit either: A: No. It only exists in the legitimate family.
1. in their own right; or (Centeno v. Centeno, 52 Phil. 322; id, p. 635)
2. by right of representation
328 CIVIL LAW TEAM

SUCCESSION
Q: What are the causes for the extinguishment of

the reserva? A: The transmission from the origin to the
propositus must be by gratuitous title.
A: DD LRR P
1. Death of the reservista Q: Can the origin alienate the property?
2. Death of all the relatives within the third
degree prior to the death of the reservista A: Yes. While the origin owns the property, there is
3. Accidental Loss of all the reservable no reserva yet, and therefore, he has the perfect
properties right to dispose of it, in any way he wants, subject,
4. Renunciation or waiver by the reserves or however to the rule on inofficious donations.
reservatarios
5. Registration under Act 496 without the PROPOSITUS
reservable character being annotated if it
falls into the hands of a buyer in good Q: Who must be the propositus?
faith for value
6. By Prescription – reservista seeks to A: The propositus must be a legitimate descendant
acquire (30 years – immovable; 8 years- or half-brother/sister of the origin of the property.
movable) Note: To give rise to reserve troncal, the propositus
must not have any legitimate children, otherwise, the
Q: Differentiate reserva minima and reserva reservable property will be inherited by the latter
maxima.
The presence of illegitimate children of the propositus
will not prevent his legitimate parents or ascendants
A:
from inheriting the reserved property.
RESERVA MINIMA RESERVA MAXIMA The propositus is the descendant whose death gives
All of the properties which rise to the reserva troncal, and from whom therefore
All of the properties which
the descendant had the third degree is counted.
the descendant had
previously acquired by
previously acquired by
gratuitous title from Q: Can the propositus alienate the property?
gratuitous title from
another ascendant or from
another ascendant or
a brother or sister must be A: Yes. While propositus is still alive, there is no
from a brother or sister
considered as passing to reserva yet, therefore, he is the absolute owner of
must be included in the
the ascendant- reservista the property, with full freedom to alienate or
ascendants legitime
partly by operation of law dispose or encumber.
insofar as such legitime
and partly by force of the
can contain.
descendant’s will. Inasmuch as the propositus is the full owner of the
Applies in testate Always followed in property, he may even defeat the existence of any
succession. intestate succession possible reserve by simply not giving the property
involved to his ascendant, by way of inheritance by
Q: Who are the parties in reserva troncal? operation of law.
A: Note: The propositus is referred to as the “arbiter of

1. Origin the reserva”.
2. Propositus
3. Reservista RESERVISTA
4. Reservatartios/Reservees
Q: Who is the reservista in reserva troncal?
ORIGIN
A: The reservista is the ascendant who inherits from
Q: Who must be the origin in reserva troncal? the propositus by operation of law. It is he who has
the obligation to reserve.
A: The origin of the property must be an ascendant,
brother or sister of the propositus. Note: The relationship between the reservista and the
Note: The origin must be a legitimate relative because propositus must be legitimate.
reserva troncal exists only in the legitimate family.
If he inherited the property from the propositus, not
by legal succession or by virtue of legitime, there is no
Q: In order for reserva troncal to take place, how
obligation to reserve.
should the property be transmitted from the origin
to the propositus?
329
Q: Does the reservista own the reservable moment the reservista dies, because by such death,
property? the reserva is extinguished.
A: The reservista is an absolute or full owner, Q: Who are the relatives within the third degree
subject to a resolutory condition. If the resolutory from the propositus?
condition is fulfilled, the reservista’s ownership of
the property is terminated. A:
1. Parents;
Resolutory condition: If at the time of the 2. Grandparents;
reservista’s death, there should still exist relatives 3. Full and half brothers and sisters;
within the third degree (reservatarios) of the 4. Great grandparents,
propositus and belonging to the line from which the 5. Nephews and nieces.
property came.
Q: What are the requisites for passing of title to
Note: The reservable property is not part of the estate the reservatarios?
of the reservista.
A:
Q: Can the reservista alienate the property? 1. Death of the reservista; and
2. The fact that the reservatarios survived the
A: The reservista can alienate the property being reservista.
the owner thereof but subject to the reservation.
Note: The reservatarios inherit the property from the
Q: Is the reservista required to furnish a bond? propositus, not from the reservista.
A: GR: He is required to furnish a bond, security or Reserva troncal is governed by the following rules on
mortgage to guarantee the safe delivery later on to intestate succession: (Applicable when there are
the reservatarios of the properties concerned, in concurring relatives within the third degree)
the proper cases. 1. Proximity - “The nearer excludes the
farther”
XPN: The bond, security or mortgage is not 2. “The direct line is preferred over the
needed when the property has been registered collateral line”
3. “The descending line is preferred over the
or annotated in the certificate of title as subject
ascending line”
to reserva troncal.
Note: Upon the reservista’s death the ownership of

Q: What are the rights of the reservatarios?
the reserved properties is automatically vested to the
reservatarios who are existing. Hence, the reservista A:
cannot dispose the reserved property by will if there 1. To ask for the inventory of all reservable
are reservatarios existing at the time of his death. property
2. The appraisal of all reservable movable
RESERVATARIOS property
3. The annotation in the registry of deeds of the
Q: Who are the reservatarios? reservable character of all reservable
immovable property
A: The reservatarios are relatives within the third 4. Constitution of the necessary mortgage
degree of the propositus, who belong to the same
line from which the property originally came, who Q: When does the reservatario acquire the right
will become the full owners of the property the over the reservable property?
A: There is representation in reserva troncal, but
A: Upon the death of the reservista, the the representative must also be within the third
reservatario nearest the decedent propositus degree from the propositus. (Florentino v.
becomes, automatically and by operation of law, Florentino)
the absolute owner of the reservable property.
(Cano v. Director of Lands) Q: Does the reservista acquire the title, dominion
and ownership over the reserve?
Q: Is there right of representation in reserva
troncal? A: YES. He acquires title and dominion to the
reservable property but subject to the condition; he
is like a usufructuary of the reservable property;
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that he may alienate the same subject to A:

reservation, said alienation transmitting only the 1. The death of the ascendant obliged to reserve
revocable and conditional ownership of the (reservista); and
reservista, the rights of the transferee being
revoked or resolved by the survival of reservatarios 2. The survival, at the time of his death, of relatives
at the time of death of the reservista.
within the third degree belonging to the line which
Q: What is the resolutory condition in reserva the property came from.
troncal?
OPERATION OF RESERVA TRONCAL
•The origin of the property is the legitimate ascendant, brother or sister of the propositus
•Upon death of the ORIGIN, his property is transmitted to the PROPOSITUS either by donation inter vivos
or mortis causa, as long as it is by gratuitous title.
ORIGIN
•The PROPOSITUS is a legitimate descendant or half-brother/sister of the ORIGIN of the property.

•To give rise to reserve troncal, the PROPOSITUS must not have any legitimate children, otherwise, the
reservable property will be inherited by the latter
•The PROPOSITUS is the descendant whose death gives rise to the reserva troncal, and from whom the
PROPOSITUS third degree is counted.
•The RESERVISTA is the ascendant who inherits from the PROPOSITUS by operation of law. It is he who has
the obligation to reserve.
•The relationship between the RESERVISTA and the PROPOSITUS must be legitimate.
•The RESERVISTA is an absolute or full owner, subject to a resolutory condition.
RESERVISTA •Resolutory condition: If at the time of the RESERVISTAS’s death, there should still exist relatives within the
third degree (reservatarios) of the propositus and belonging to the line from which the property came.
•The RESERVATARIO's are relatives within the third degree of the propositus, who belong to the same line
from which the property originally came, who will become the full owners of the property the moment the
reservista dies.
RESERVATARIO •The reservatarios inherit the property from the PROPOSITUS, not from the RESERVISTA.
•Upon the death of the RESERVISTA, the RESERVATARIO nearest the decedent PROPOSITUS becomes,
automatically and by operation of law, the absolute owner of the reservable property.
4. DISINHERITANCE Disinheritance is not automatic. There must be

evidence presented to substantiate the disinheritance
A. DISINHERITANCE FOR CAUSE and must be for a valid and sound cause.
Q: What is disinheritance? Effect of disinheritance: Total exclusion to the

inheritance, meaning, loss of legitime, right to
A: Disinheritance is the process or act, thru a intestate succession, and of any disposition in a prior
will.
testamentary disposition of depriving in a will any
compulsory heir of his legitime for true and lawful
Disinheritance, however, is without prejudice to the
cause. right of representation of the children and
descendants of the person disinherited.
Note: The only way in which a compulsory heir can be
deprived of his legitime is through valid disinheritance.
331
But the disinherited parent shall not have the usufruct 1. If made before disinheritance – right to
or administration of the property which constitutes disinherit is extinguished.
the legitime. 2. If made after disinheritance –
disinheritance is set aside.
Q: What are the requisites of a valid
disinheritance? B. DISINHERITANCE WITHOUT CAUSE
A: Disinheritance must be: Q: What is the effect of disinheritance without

1. Made in a valid will; cause?
2. Identity of the heir is clearly established;
3. For a legal cause; A: Disinheritance without a specification of the
4. Expressly made; cause, or for a cause the truth of which, if
5. Cause stated in the will; contradicted, is not proved, or which is not one of
6. Absolute or unconditional; those set forth in this Code, shall annul the
7. Total; institution of heirs insofar as it may prejudice the
8. Cause must be true and if challenged by person disinherited; but the devises and legacies
the heir, it must be proved to be true. and other testamentary dispositions shall be valid
to such extent as will not impair the legitime. (Art.
Note: Proponent of disinheritance has the burden of 918)
proof.
Q: What are the grounds for disinheritance?
(1) RECONCILIATION
A:
Q: What is the effect of subsequent reconciliation 1. Common causes for disinheritance of children
between the offender and the offended party on or descendants, parents or ascendants, and
the latter’s right to disinherit? spouse:
a. When the heir has been found guilty of an
A: A subsequent reconciliation between the attempt against the life of the testator,
offender and the offended person deprives the his/her descendants or ascendants, and
latter of the right to disinherit, and renders spouse, in case of children or parents.
ineffectual any disinheritance that may have been b. When the heir by fraud, violence,
made. (Art. 922) intimidation, or undue influence causes
the testator to make to make a will or to
(2) RIGHTS OF DESCENDANTS OF PERSON change one already made.
DISINHERITED c. When the heir has accused the testator of
a crime for which the law prescribes
Q: What is reconciliation? imprisonment of six years or more, if the
accusation has been found groundless.
A: There is reconciliation when two persons who d. Refusal without justifiable cause to
are at odds decide to set aside their differences and support the testator who disinherits such
to resume their relations. They need not go back to heir.
their old relation. 2. Peculiar Causes for Disinheritance
a. Children and Descendants:
Note: A handshake is not reconciliation. It has to be i. Conviction of a crime which carries
something more. It must be clear and deliberate.
with it a penalty of civil interdiction
ii. Maltreatment of the testator b word or
In order to be effective, the testator must pardon the
disinherited heir. The pardon whether express or tacit,
deed by the children or descendant
must refer specifically to the heir disinherited and to iii. When the children or descendant has
the acts he has committed, and must be accepted by been convicted of adultery or
such heir. concubinage with the spouse of the
testator
In disinheritance, reconciliation need not be in writing. iv. When the children or descendant leads
a dishonorable or disgraceful life
Q: What is the effect of reconciliation on a b. Parents or Ascendants:
person’s right to disinherit? i. When the parent or ascendant has
been convicted of adultery or
A: concubinage with the spouse of the
testator
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ii.When the parents have abandoned

their children or induced their A: The legacy or devise is ineffective even if the
daughters to live a corrupt or immoral legatee or devisee alienates the thing after the will
life, or attempted against their virtue is made.
iii. Loss of parental authority for causes
specified in the Code Q: Suppose the legatee or devisee acquired the
iv. Attempt by one of the parents against property after the will has been executed?
the life of the other, unless there has Suppose he acquired the thing by onerous title?
been reconciliation between them What would be the effect?
c. Spouse:
i. When the spouse has given cause for A: If at the time the legacy or devise is made, the
legal separation thing did not belong to the legatee or devisee but
ii. When the spouse has given grounds for later on he acquires it, then:
the loss of parental authority 1. If he acquired it by gratuitous title, then
the legacy or devise is void.
5. LEGACIES AND DEVISES
Reason: The purpose of the testator that the
Q: What can be bequeathed or devised? property would go to the devisee or legatee
has already been accomplished with no
A: Anything within the commerce of man or which expense to the legatee or devisee.
is alienable.
2. If he acquired it by onerous title, the
Q: Who may be charged with legacies and legacy or devise is valid and the estate
devices? may be required to reimburse the
amount.
A:
1. Any compulsory heir Q: Suppose the property bequeathed or devised
2. Any voluntary heir has been pledged or mortgaged, who has the
3. Any legatee or devisee obligation to free the property from such
4. The estate, represented by the executor or encumbrance?
administrator (Jurado, p. 345)
A: GR: The pledge or mortgage must be paid by the
Q: Can the testator bequeath or devise a thing or estate.
property belonging to someone else?
XPN: If the testator provides otherwise.
A: It depends on whether: However, any other charge such as easements
1. The testator thought that he owned it – and usufruct, with which the thing bequeathed
is burdened, shall be respected by the legatee
GR: A legacy or devise of a thing belonging to or devisee.
someone else when the testator thought that
he owned it is a void legacy or devise because Q: What is a legacy of credit?
it is vitiated by mistake.
A: It takes place when the testator bequeaths to
XPN: If the testator acquires it after making his another a credit against a third person. In effect, it
will. is a novation of the credit by the subrogation of the
legatee in the place of the original creditor.
2. The testator knows that he does not own but
ordered its acquisition – Q: What is a legacy of remission?
If the thing given as devise or legacy is not A: It is a testamentary disposition of a debt in favor
owned by the testator at the time he made the of the debtor. The legacy is valid only to the extent
will but he orders his estate to acquire it, it is a of the amount of the credit existing at the time of
valid legacy or devise. The testator knew that the testator's death. In effect, the debt is
he did not own it. There is no mistake. extinguished.
Q: What is the effect if the thing or property Note: Legacy applies only to the amounts outstanding
at the time of the testator's death.
bequeathed or devised belonged to the legatee or
devisee at the time the will was executed?
333
Q: Is a legacy or devise considered payment of a 1. Transformation of the thing in such a manner

debt, if the testator has a standing indebtedness that it does not retain either the form or the
to the legatee or devisee? denomination it had.
2. Alienation of the thing bequeathed.
A: No, legacy or devise is not considered payment
of a debt because if it is, then it would be a useless Note: GR: The alienation of the property revokes
legacy or devise since it will really be paid. the legacy or devise notwithstanding the nullity
of the transaction.
Q: What is the order of payment of legacies and
devises? However, whether or not the legacy or devise is
revoked or not depends on the basis for the
A: nullity of the contract:
1. Remuneratory legacies or devises
If the nullity is based on vitiated consent, the
2. Legacies or devises declared by testator to be
legacy or devise is not revoked because there was
preferential no intention to revoke.
3. Legacies for support
4. Legacies for education For all other grounds, the legacy or devise is
5. Legacies or devises of a specific determinate revoked.
thing which forms part of the estate
6. All others pro rata XPN: If the sale is pacto de retro and the testator
reacquired it during his lifetime.
Note: The order of preference is applicable when:
1. There are no compulsory heirs and the 3. Total loss of the thing bequeathed.
entire estate is distributed by the testator as
legacy/devise; or Note: The loss of the thing bequeathed
2. There are compulsory heirs but their must not be attributed to the heirs. There
legitime has already been provided for by should be no fault on the part of the heirs.
the testator and there are no donations
inter vivos. 4. If the legacy is a credit against a third person
or the remission of a debt, and the testator,
Q: What is the distinction between Art. 911 and subsequent to the making of the will, brings an
Art. 950? action against the debtor for payment.
A: III. LEGAL OR INTESTATE SUCCESSION

Order of preference Order of preference
under Art. 911 under Art. 950 A. GENERAL PROVISIONS
LDPO: 1. Remuneratory L/D;
1. Legitime of 2. Preferential L/D; 1. RELATIONSHIP
compulsory heirs; 3. Legacy for support;
2. Donations inter 4. Legacy for education; Q: What is legal or intestate succession?
vivos; 5. L/D of a specific,
3. Preferential determinate thing A: Legal or intestate succession is that which is
legacies or devises; which forms a part of effected by operation of law in default of a will. It is
4. All Other legacies the estate; legal because it takes place by operation of law; it is
or devises pro rata 6. All others pro rata intestate because it takes place in the absence or in
default of a last will of the decedent.
Note: When the question of reduction is between and
among legatees and devisees themselves, Art. 950 Q: What is the formula for application of
governs; but when there is a conflict between inheritance?
compulsory heirs and legatees/devisees, Art. 911
governs. A: The following are applied successively: ISRAI
1. Institution of an heir (Bequest, in case of
Q: What are the grounds for the revocation of legacies or devises)
legacy or devise? 2. Substitution, if proper
3. Representation, if applicable
A: 4. Accretion, if applicable
5. Intestacy, if all of The above are not
applicable
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Q: When can legal or intestate succession take A: Whenever there is succession by representation,
place? the division of the estate shall be made per stirpes,
in such manner that the representative or
A: Intestate succession takes place when: representatives shall not inherit more than what
1. there is no will; the will is void, or the will the person they represent would inherit, if he were
is revoked; living or could inherit. (Art. 974)
2. the will does not dispose all the property
of the testator. (partial intestacy); Note: Per stirpes means inheritance by group, all those
3. the suspensive condition attached to the within the group inheriting in equal shares.
inheritance is not fulfilled;
4. The heir predeceased the testator or Q: When does right of representation arise?
repudiates the inheritance and no
substitution and no right of accretion take A: Representation may arise either because of:
place. 1. death,
5. The heir instituted is incapacitated to 2. incapacity, or
succeed. 3. disinheritance.
Note: The enumeration is not exclusive; there are Q: When is right or representation not available?
other causes for intestacy which are not included in
the enumeration. A:
E.g. 1. As to compulsory heirs: In case of repudiation,
1. Preterition; the one who repudiates his inheritance cannot
2. Arrival of the resolutory term or period; be represented. Their own heirs inherit in their
3. Fulfillment of a resolutory condition own right.
attached to the inheritance; 2. As to voluntary heirs: Voluntary heirs, legatees
4. Non-compliance or impossibility of and devisees who:
complying with the will of the testator. a. Predecease the testator; or
b. Renounce the inheritance
Q: Can there be a valid will which does not cannot be represented by their own heirs,
institute an heir? with respect to their supposed
inheritance.
A: Yes, a will is valid even if it contains only a
provision for disinheritance or if only legacies and Q: Does the representative inherit from the person
devises are contained in the will. represented?
Q: Who are intestate heirs? A: No. In representation, the representative does

not inherit from the person represented but from
A: the testator or decedent.
1. Legitimate children or descendants
2. Illegitimate children or descendants Q: Where does right of representation take place?
3. Legitimate parents or ascendants
4. Illegitimate parents A: Representation takes place in the direct
5. Surviving spouse descending line, never in the ascending.
6. Brothers and sisters, nephews and nieces
th
7. Other collateral relatives up to the 5 degree Note: The representative himself must be capable of
8. The State. succeeding the decedent.
2. RIGHT OF REPRESENTATION An illegitimate child can represent his father, provided

that the father was also illegitimate.
Q: What is right of representation?
Q: Does right of representation apply in the
A: Right created by fiction of law where the collateral line?
representative is raised to the place and degree of
the person represented, and acquires the rights A: Right of representation takes place only in favor
which the latter would have if he were living or of children of brothers or sisters, whether full or
could have inherited. half blood and only if they concur with at least one
uncle or aunt.
Q: What is the effect of representation?
335
Note: This rule applies only when the decedent does A: GR: Intestate heirs equal in degree inherit in
not have descendants. equal shares.
Q: What is the effect if there is no uncle or aunt XPN:

upon whom the children, who seek to invoke the 1. In the ascending line, the rule of division
right of representation, can concur with? by line is ½ to the maternal line and ½ to
the paternal line, and within each line, the
A: There shall be no right of representation and division is per capita.
ultimately they shall not inherit following Art. 975. 2. In the collateral line, the full-blood
brothers/sisters will get double that of
Q: May an illegitimate sibling of the decedent be the half-blood.
represented? 3. The division in representation, where
division is per stirpes – the representative
A: Yes. An illegitimate brother or sister of the divide only the share pertaining to the
deceased can be represented by his children, person represented.
without prejudice to the application of the Iron
Curtain Rule. (Tolentino, p. 451) Note: Compulsory heirs shall, in no case, inherit ab
intesto less than their legitime as provided in
Q: Does the right of representation apply to testamentary succession.
adopted children?
IRON CURTAIN RULE
A: No. The right of representation cannot be
invoked by adopted children because they cannot Q: What is the iron-curtain rule?
represent their adopting parents to the inheritance
of the latter’s parents. A: Art. 992 of the Civil Code provides that
illegitimate children cannot inherit ab intestato
Reason: The law does not create any relationship from the legitimate children and relatives of his
between the adopted child and the relatives of the mother or father. Legitimate children and relatives
adopting parents, not even to the biological or cannot inherit in the same way from the illegitimate
legitimate children of the adopting parents. child.
Note: Under R.A. 8552 or the Domestic Adoption Law, Note: The iron curtain rule only applies in intestate
the adopted child and the adopting parents have succession.
reciprocal successional rights.
There is a barrier recognized by law between the
Q: What is the rule on equal division of lines? legitimate relatives and the illegitimate child so that
one cannot inherit from the other and vice-versa.
Q: Distinguish the application of iron curtain rule and right of representation.
A:
IRON CURTAIN RULE RIGHT OF REPRESENTATION
Prohibits absolutely a succession ab intestato between the
illegitimate child and the legitimate children and relatives Right created by fiction of law where the representative is
of the father or mother of said illegitimate child. raised to the place and degree of the person represented,
and acquires the rights which the latter would have if he
Note: Iron curtain rule imposes a limitation on right of were living or could have inherited.
representation.
Applies only in intestate succession Applies to both intestate and testate succession
Determining factor: who died first? Is it the parent of the illegitimate child or is it the legitimate relative or child of his
parent?
Applies if the one who died first is the illegitimate’s Applies if the one who died first is the legitimate parent or
parent. child of the illegitimate’s parent.
Reason: illegitimate will be representing his parent Reason: illegitimate inherits from his parent’s estate which
because of the predecease, the bar imposed by the iron includes his parent’s inheritance from said legitimate
curtain rule is rendered operative to prevent such. relative or child who died.
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Right of Representation and Iron Curtain Rule
(D)†
If the child to be represented is If the child to be represented is
LEGITIMATE – only legitimate children/ ILLEGITIMATE – both legit & illegit
descendants can represent him children/ descendants can represent him
Legit X† Illegit Y†
Predeceased D Predeceased D
legit illegit legit illegit

(X1) (X2) (Y2) (Y1)
Iron Curtain Rule applies
Since X and Y both predeceased D, only X1 can represent X. X2 cannot by virtue of the iron curtain
rule. Both Y1 and Y2 can represent Y
1. The legitimate children and descendants of a

B. ORDER OF INTESTATE SUCCESSION person who is an illegitimate child are
preferred over other intestate heirs, without
Q: What is the order of preference between lines prejudice to the right of concurrence of
in legal or intestate succession? illegitimate children and the surviving spouse.
A: Succession takes place: 2. In the absence of legitimate children and

First, in the direct descending line; descendants, the illegitimate children (of the
Second, in the direct ascending line; illegitimate child) and their descendants
Finally, in the collateral line. succeed to the entire estate, without prejudice
to the concurrent right of the surviving spouse.
Q: What is the order of intestate succession to a
legitimate child? 3. In the absence of children and descendants,
whether legitimate or illegitimate, the third in
A: In general, and without prejudice to the the order of succession to the estate of the
concurrent right of other heirs in proper cases, the illegitimate child is his illegitimate parents. If
order of intestate succession to a legitimate child is both parents survive and are entitled to
as follows: succeed, they divide the estate share and
1. legitimate children and descendants; share alike. Although the law is silent, if the
2. legitimate parents and ascendants; surviving spouse of the illegitimate child
3. illegitimate children; concurs with the illegitimate parents, the
4. the surviving spouse; surviving spouse shall be entitled to one-half
5. collaterals up to the fifth degree; and of the estate while the illegitimate parents get
6. the State. (Rabuya, Civil Law Reviewer, p. the other half.
678)
Note: In the ascending line, only the illegitimate
Q: What is the order of intestate succession to an parents are entitled to inherit from the
illegitimate child? illegitimate child; the other illegitimate
descendants are not so entitled.
A:
337
4. In default of children or descendants, 3. Renunciation

legitimate or illegitimate, and illegitimate 4. Non-fulfillment of suspensive condition
parents, the surviving spouse shall inherit the imposed upon instituted heir
entire estate. But if the surviving spouse 5. Ineffective testamentary disposition
should survive with brothers and sisters,
nephews and nieces, the surviving spouse shall Q: In intestate succession, in what instances may
inherit one-half of the estate, and the latter accretion take place?
the other half. The brothers and sisters must
be by illegitimate filiation, otherwise, the Iron A:
Curtain Rule shall apply. 1. Predecease of legal heir
2. Incapacity of legal heir
5. Although the law is silent, illegitimate brothers 3. Repudiation by legal heir
and sisters who survive alone shall get the
entire inheritance. The legitimate children of Note: Accretion takes place only if there is no
the illegitimate parents are not entitled to representation.
inherit from the illegitimate child by virtue of In renunciation, there is always accretion.
Article 992 of the NCC.
Reason: No representation in renunciation.
6. The State. (id., pp. 691-692)
In intestacy, apply representation first. If there is
IV. PROVISIONS COMMON TO TESTATE AND none, then accretion will apply.
INTESTATE SUCCESSION
In testacy, apply substitution first. If there is no
A. RIGHT OF ACCRETION substitution, then accretion will apply. However, in
testamentary succession, the inheritance must not
1. DEFINITION AND REQUISITES have been earmarked. Accretion cannot take place
if the inheritance is earmarked.
Q: What is accretion?
B. CAPACITY TO SUCCEED BY WILL OR INTESTACY
A: Accretion is a right by virtue of which, when two
or more persons are called to the same inheritance, 1. PERSONS INCAPABLE OF SUCCEEDING
devise or legacy, the part assigned to the one who
renounces or cannot receive his share, or who died Q: What does absolute incapacity to succeed
before the testator, is added or incorporated to mean?
that of his co-heir, co-devisees, or co-legatees.
A: It means the person is incapacitated to succeed
Basis: Accretion is a right based on the presumed in any form, whether by testate or intestate
will of the deceased that he prefers to give certain succession.
properties to certain individuals rather than to his
legal heirs. Accretion is preferred over intestacy. Q: Who are absolutely incapacitated to succeed?
Q: What are the requisites of accretion? A:

1. Those not living at the time of death of the
testator
A:
2. Those who cannot be identified. (Art. 845)
1. Two or more persons must have been called in
3. Those who are not permitted by law to inherit.
the testators will to the same inheritance,
(Art. 1027)
legacy or devise, or to the same portion
thereof, pro indiviso
Q: Who are incapacitated to succeed based on
2. There must be a vacancy in the inheritance,
morality or public policy?
legacy or devise as a result of predecease,
incapacity or repudiation
A: ACO
1. Persons guilty of Adultery or concubinage
Q: In testamentary succession, in what instances
with the testator at the time of the
may accretion take place?
making of the will;
2. Persons guilty of the same Criminal
A:
offense, in consideration thereof;
1. Predecease
2. Incapacity
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SUCCESSION
3. A public officer or his wife, descendants RELATIVE INCAPACITY TO SUCCEED

and ascendants, by reason of his Office.
(Art. 739) Q: What is relative incapacity to succeed?
Q: Who are incapacitated to succeed by reason of A: It means the person is incapacitated to succeed
unworthiness? because of some special relation to the testator.
A: P-CAV-AFP-F Q: What are the grounds for relative incapacity to

1. Parents who have abandoned their succeed?
children or induced their daughters to
lead a corrupt or immoral life, or A: UMA
attempted against their virtues; 1. Undue influence or interest (Art. 1027)
2. Persons Convicted of an attempt against 2. Morality or public policy (Art. 739)
the life of the testator, his or her spouse, 3. Acts of unworthiness (Art. 1032)
descendants or ascendants;
3. Persons who Accused the testator of a Q: Who are incapacitated to succeed based on
crime for which the law prescribes undue influence or interest?
imprisonment for six years or more, if the
accusation has been found to be A: PRG-WPI
groundless; 1. The Priest who heard the confession of
4. Heir of full age who, having knowledge of the testator during his last illness, or the
the Violent death of the testator, should minister of the gospel who extended
fail to report it to an officer of the law spiritual aid to him during the same
within a month unless the authorities period;
have already taken action.
2. The Relatives of such priest or minister of
Note: This prohibition shall not apply to the gospel within the fourth degree, the
cases wherein, according to law, there is no church, order, chapter, community,
obligation to make an accusation. organization, or institution to which such
priest or minister may belong;
5. Person convicted of Adultery or
concubinage with the spouse of the 3. A Guardian with respect to testamentary
testator; dispositions given by a ward in his favor
6. Person who by Fraud, violence, before the final accounts of the
intimidation, or undue influence should guardianship have been approved, even if
cause the testator to make a will or to the testator should die after the approval
change one already made; thereof; nevertheless, any provision made
7. Person who by the same means Prevents by the ward in favor of the guardian when
another from making a will, or from the latter is his ascendants, descendant,
revoking one already made, or who brother, sister, or spouse, shall be valid;
supplants, conceals, or alters the latter's
will; 4. Any attesting Witness to the execution of
8. Person who Falsifies or forges a supposed a will, the spouse, parents, or children, or
will of the decedent. (Art. 1032) any one claiming under such witness,
spouse, parents, or children;
Note: Grounds 1, 2, 3, 5 and 6 are the same grounds
as in disinheritance. Note: Numbers 1 to 4 do not apply to legitimes.
Numbers 6, 7 and 8 cover six (6) acts which relate to
wills: 5. Any Physician, surgeon, nurse, health
1. Causing the testator to make a will
officer or druggist who took care of the
2. Causing the testator to change an existing
testator during his last illness;
will
3. Preventing the decedent from making a will
Note: Number 5 is an absolute disqualification.
4. Preventing the testator from revoking his
will
5. Supplanting, concealing, or altering the
6. Individuals, associations and corporations
testator's will. not permitted by law to inherit.
6. Falsifying or forging a supposed will of the
decedent. PRIESTS
339
Q: Who are covered by this disqualification to A: It applies to guardians, with respect to

inherit? testamentary dispositions given by a ward in his
favor before the final accounts of the guardianship
A: PMRC have been approved, even if the testator should die
1. Priest who heard the confession of the after the approval thereof.
testator during his last illness;
2. Minister of the gospel who extended Q: When does the disqualification apply?
spiritual aid to him during the same
period; A: GR: The disqualification applies when the
3. Relatives of such priest or minister of the disposition is made after the guardianship began or
gospel within the fourth degree; or before guardianship is terminated – approval of
4. The Church, order, chapter, community, final accounts or lifting of guardianship.
organization, or institution to which such
priest or minister may belong; XPN: It does not apply even when the
disposition is made after the guardianship
Q: What are the requisites for this disqualification began or before it is terminated when the
to apply? guardian is an: ADBSS
1. Ascendant;
A: 2. Descendant;
1. The will was made during the last illness of the 3. Brother;
testator; 4. Sister; or
2. The spiritual ministration must have been 5. Spouse.
extended during the last illness;
3. The will was executed during or after the ATTESTING WITNESSES
spiritual ministration.
Q: Who are covered by the disqualification?
Q: If the confession was made before the will was
made, can the priest inherit upon the death of the A:
sick person, if: 1. Attesting witness to the execution of a will;
2. The attesting witness’:
1. The priest is the son of the sick person? a. spouse,
2. The priest was the sick person’s brother? b. parents, or
c. children, or
A: 3. Any one claiming under such witness, spouse,
1. Yes. He can get the legitime. parents, or children;
Note: A priest is incapacitated to succeed when Q: Will the disqualification still apply if there are
the confession is made prior to or simultaneously other witnesses to the will?
with the making of a will.
A: It depends upon compliance with the requisite
The disqualification applies only to testamentary number of witnesses. If, notwithstanding the
dispositions. disqualified witness, the number of witnesses is
sufficient, the former is not disqualified.
2. Yes. He can inherit by intestacy.
PHYSICIANS
Note: Despite this apparent restriction to
Christian ministers, this applies to all spiritual
Q: Upon whom does the disqualification apply?
ministers, e.g., Buddhist monks.
Reason: It is conclusively presumed that the A: PSN-HD

spiritual minister used his moral influence to 1. Physician;
induce or influence the sick person to make a 2. Surgeon;
testamentary disposition in his favor. 3. Nurse;
4. Health officer; or
GUARDIANS 5. Druggist
Q: What is the coverage of this disqualification? Note: For the disqualification to apply, the
aforementioned must have taken care of the testator
during his last illness.
340 CIVIL LAW TEAM

SUCCESSION
Q: What must be present for this disqualification A:

to apply? 1. It is voluntary and free
2. It is retroactive
A: 3. Once made, it is irrevocable
1. The will was made during the last illness
2. The sick person must have been taken cared of Q: What are the requisites of acceptance and
during his last illness. Medical attendance was repudiation?
made.
3. The will was executed during or after he was A:
being taken care of. 1. Certainty of the death of the decedent
2. Certainty of the right of inheritance
PROHIBITED BY LAW TO INHERIT
ACCEPTANCE
Individuals, associations and corporations not
permitted by law to inherit. Q: How may inheritance be accepted?
2. UNWORTHINESS VS. DISINHERITANCE A:

1. Express acceptance – through a public or
Q: Distinguish Unworthiness from Disinheritance. private instrument
2. Tacit acceptance – through acts by which the
A: intention to accept is necessarily implied or
DISINHERITANCE UNWORTHINESS which one would have no right to do except in
Effects on the inheritance the capacity of an heir.
Exclusion from the
Deprivation of a entire inheritance. Q: When is inheritance deemed accepted?
compulsory heir of his However, donations
legitime. inter vivos are not A:
affected. 1. When the heir sells, donates, or assigns his
rights
Effects of pardon or reconciliation
2. When the heir renounces it for the benefit of
Reconciliation between
one or more heirs
the offender and the
If the testator pardons 3. When renunciation is in favor of all heirs
offended party deprives
the act of unworthiness, indiscriminately for consideration
the latter of the right to
the cause of 4. Other tacit acts of acceptance:
disinherit, and renders
unworthiness shall be a. Heir demands partition of the inheritance
ineffectual any
without effect. b. Heir alienates some objects of the
disinheritance that may
inheritance
have been made.
c. Acts of preservation or administration if,
Manner of reconciliation or pardon through such acts, the title or capacity of
Express or implied the heir has been assumed
Grounds d. Under Art. 1057, failure to signify
acceptance or repudiation within 30 days
There are grounds for disinheritance which are also
after an order of distribution by the
causes for incapacity by reason of unworthiness.
probate court.
Effect of subsequent reconciliation if disinheritance
has already been made on any of the grounds REPUDIATION
which are also causes for unworthiness
The moment the testator uses one of the causes for Q: What are the ways by which the repudiation of
unworthiness as a ground for disinheritance, he the inheritance, legacy or devise may be made?
thereby submits it to the rule on disinheritance.
(Rabuya, Civil Law Reviewer, pp. 644-649; 704-708) A:
1. By means of a public instrument
C. ACCEPTANCE AND REPUDIATION OF THE 2. By means of an authentic instrument
INHERITANCE 3. By means of a petition presented to the court
having jurisdiction over the testamentary or
Q: What are the three principal characteristics of intestate proceedings.
acceptance and repudiation?
341
Q: What is the effect of repudiation if an heir is 1. Any property/right received by gratuitous title
both a testate and legal heir? during testator’s lifetime
2. All that may have been received from
A: If an heir is both a testate and legal heir, the decedent during his lifetime
repudiation of the inheritance as a testate heir, he 3. All that their parents have brought to collation
is understood to have repudiated in both capacities. if alive
However, should he repudiate as a legal heir,
without knowledge of being a testate heir, he may Q: What are the properties not subject to
still accept the inheritance as a testate heir. collation?
Q: What is the remedy if the heir repudiates the A:

inheritance to the prejudice of his creditors? 1. Absolutely no collation – expenses for support,
education (elementary and secondary only),
A: If the heir repudiates the inheritance to the medical attendance, even in extra-ordinary
prejudice of his own creditors, the latter may illness, apprenticeship, ordinary equipment or
petition the court to authorize them to accept it in customary gifts.
the name of the heir. 2. Generally not imputed to legitime:
a. Expenses incurred by parents in giving
Requisites: their children professional, vocational, or
1. The heir who repudiated his inheritance other career unless the parents so
must have been indebted at the time provide, or unless they impair the
when the repudiation is made legitime.
2. The heir-debtor must have repudiated his b. Wedding gifts by parents and ascendants
inheritance according to the formalities consisting of jewelry, clothing and outfit
prescribed by law except when they exceed 1/10 of the sum
3. Such act of repudiation must be disposable by will.
prejudicial to the creditor or creditors.
4. There must be judicial authorization (Art. Note: Only the value of the thing donated shall be
1052) brought to collation. This value must be the value of
the thing at the time of the donation.
D. COLLATION
E. PARTITION AND DISTRIBUTION OF ESTATE
Q: What is collation?
1. PARTITION
A: It is the process of adding the value of thing
donated to the net value of hereditary estate. Q: What is partition and distribution?
To collate is to bring back or return to the A: It is the separation, division and assignment of a
hereditary mass, in fact or fiction, property which thing held in common among those to whom it may
came from the estate of the decedent, during his belong.
lifetime, but which the law considers as an advance
from the inheritance. Q: Who may effect partition?
Collation is applicable to both donations to A: The partition may be effected either:

compulsory heirs and donations to strangers. 1. By the decedent himself during his
lifetime by an act inter vivos or by will
GR: Compulsory heirs are obliged to collate. 2. By a third person designated by the
decedent or by the heirs themselves
XPN: 3. By a competent court in accordance with
1. When testator should have so expressly the New Rules of Court
provided;
2. When compulsory heir repudiates his Q: Who can demand partition?
inheritance
A: Any:
Q: What are the properties that are to be collated? 1. Compulsory heir
2. Voluntary heir
A: 3. Legatee or devisee
342 CIVIL LAW TEAM

SUCCESSION
4. Person who has acquired an interest in otherwise, but the legitime shall always
the estate remain unimpaired.
b. When it has been expressly stipulated in
Q: When partition cannot be demanded? the agreement of partition, unless there
has been bad faith.
A: Partition cannot be demanded when: PAPU c. When the eviction was due to a cause
1. Expressly Prohibited by testator for a subsequent to the partition, or has been
period not more than 20 years caused by the fault of the distributee of
2. Co-heirs Agreed that estate not be the property.
divided for period not more than 10 4. An action to enforce warranty among co-heirs
years, renewable for another 10 yrs must be brought within 10 years from the date
3. Prohibited by law the right of cause of action accrues.
4. To partition estate would render it
Unserviceable for use for which it was Q: What are the effects of the inclusion of an
intended intruder in partition?
2. PARTITION INTER VIVOS A:

1. Between a true heir and several mistaken heirs
Q: Can an estate be partitioned inter vivos? – partition is void.
2. Between several true heirs and a mistaken heir
A: Yes. Such partition shall be respected, insofar as – transmission to mistaken heir is void.
it does not prejudice the legitime of compulsory 3. Through the error or mistake; share of true
heirs. (See Art. 1080) heir is allotted to mistaken heir – partition
shall not be rescinded unless there is bad faith
3. EFFECTS OF PARTITION or fraud on the part of the other persons
interested, but the latter shall be
Q: What are the effects of partition? proportionately obliged to pay the true heir of
his share.
A:
1. Confers upon each heir the exclusive Q: When partition cannot be demanded?
ownership of property adjudicated.
2. After the partition, the co-heirs shall be A: Partition cannot be demanded when: PAPU
reciprocally bound to warrant the title to 1. Expressly Prohibited by testator for a
(warranty against eviction) and the quality of period not more than 20 years
(warranty against hidden defects) each 2. Co-heirs Agreed that estate not be
property adjudicated. divided for period not more than 10
3. The obligation of warranty shall cease in the years, renewable for another 10 yrs
following cases: 3. Prohibited by law
a. When the testator himself has made the 4. To partition estate would render it
partition unless his intention was Unserviceable for use for which it was
intended.
343
PARTNERSHIP 6. Principal – it does not depend for its

existence or validity upon some other
I. CONTRACT OF PARTNERSHIP contracts
7. Preparatory – because it is entered into
A. DEFINITION as a means to an end, i.e. to engage in
business or specific venture for the
Q: What is partnership? realization of profits with the view of
dividing them among the contracting
A: A contract whereby two or more persons bind parties.
themselves to contribute money, property, or
industry to a common fund, with the intention of Q: Jose entered into a verbal agreement with
dividing the profits among themselves. (Art. 1767) Francisco to form a partnership for the purchase of
cascoes for a proposed boat rental business. It was
Note: Two or more persons may also form a agreed that Francisco would buy the cascoes and
partnership for the exercise of a profession. (Art. each partner is to furnish such amount of money
1767) as he could, and that the profits will be divided
proportionately. After Francisco purchased a casco
B. ELEMENTS with the money advanced by Jose, they undertook
to draft the articles of partnership and embody the
Q: What are the essential elements of a same in an authentic document. However, they
partnership? did not come to an agreement. So, Francisco
returned the money advanced by Jose, which the
A: latter received with an express reservation of all
1. Agreement to contribute money, property or his rights as a partner.
industry to a common fund (mutual 1. Was there a partnership formed
contribution to a common stock); and between Jose and Francisco?
2. Intention to divide the profits among the 2. If such partnership existed, was it
contracting parties (joint interest in the terminated by the receipt of Jose of the
profits). (Evangelista v. Collector of Internal money he advanced?
Revenue, G.R. No. L-9996, Oct. 15, 1987)
A:
Q: What are the requisites of a partnership? 1. Yes. Both elements in a contract of partnership
exist: a) mutual contribution to a common
A: ICJ stock, and b) a joint interest in the profits. If
1. Intention to create a partnership the contract contains these two elements, a
2. Common fund obtained from partnership relation results, and the law itself
contributions fixes the incidents of this relation if the parties
3. Joint interest in dividing the profits (and fail to do so. In this case, there was money
losses) furnished by Jose and received by Francisco for
the purchase of the cascoes and there was also
Q: What are the characteristics of a partnership? an intention to divide the profits
proportionately between them. Thus, there is
A: BON-CC-PP a partnership by virtue of the verbal
1. Bilateral – it is entered into by two or agreement between Jose and Francisco.
more persons and the rights and 2. No. There was no clear intent on the part of
obligations arising therefrom are always Jose, in accepting the money, to relinquish his
reciprocal rights as a partner. (Fernandez v. Dela Rosa,
2. Onerous – each of the parties aspires to G.R. No. 413, Feb. 2, 1903)
procure for himself a benefit through the
giving of something Q: Chim was the owner and manager of a lumber
3. Nominate – it has a special name or yard. Vicente and Ting participated in the profits
designation in our law and losses. A contract of sawing lumber was
4. Consensual – perfected by mere consent, entered into by Chim, acting in his own name, with
upon the express or implied agreement of Frank. At the time the contract was made, they
two or more persons were the joint proprietors and operators of the
5. Commutative – the undertaking of each of said lumber yard engaged in the purchase and sale
the partners is considered as the of lumber under the name and style of Chim. In an
equivalent of that of the others action to recover the balance under the contract
344 CIVIL LAW TEAM

PARTNERSHIP
filed by Frank against Chim, Vicente and Ting, the from the fruits of the land. Are they partners or co-
latter two alleged that they are not Chim’s owners?
partners. Did Chim, Vicente and Ting form a
partnership? A: They are co-owners because it does not appear
that they entered into any contract of partnership
A: No. A simple business was formed by Chim but only for the sole transaction of acquiring jointly
exclusively in his own name and under his personal or by mutual agreement of the land under the
management and he effected every transaction in condition that they would pay ½ of the price of the
his name and in the names of other persons land and that it be divided equally between them.
interested in the profits and losses of the business. (Gallemit v. Tabiliran, G.R. No. 5837, Sept. 15, 1911)
What has been formed is an accidental partnership
of cuentas en participacion. COMMON FUND
Note: Under the Code of Commerce, cuentas en Q: May a partnership be formed even if the
participacion means a sort of an accidental partnership common fund is comprised entirely of borrowed
constituted in such a manner that its existence was or loaned money? What would be the liability of
only known to those who had an interest in the same, the partners in such a case?
there being no mutual agreement between the
partners, and without a corporate name indicating to A: Yes. A partnership may be deemed to exist
the public in some way that there were other people among parties who agree to borrow money to
besides the one who ostensibly managed and pursue a business and to divide the profits or losses
conducted the business, governed under article 239 of that may arise therefrom, even if it is shown that
the Code of Commerce. (Bourns v. Carman, G.R. No. L- they have not contributed any capital of their own
2880, Dec. 4, 1906) to a "common fund." Their contribution may be in
the form of credit or industry, not necessarily cash
INTENT TO CREATE A PARTNERSHIP or fixed assets. Being partners, they are all liable for
debts incurred by or on behalf of the partnership.
Q: Henry and Lyons are engaged in real estate (Lim Tong Lim v. Philippine Fishing Gear Industries,
business and are co-owners of a parcel of land. Inc., G.R. No. 136448, Nov. 3, 1999)
Henry, with the consent of Lyons, mortgaged the
property to raise the funds sufficient to buy and SHARE IN PROFITS AND LOSSES
develop the San Juan Estate. Lyons expressed his
desire not to be part of the development project, Q: Mariano and Isabelo entered into a partnership
but Henry, nevertheless, pursued the business agreement wherein they are to contribute P15,000
alone. When the business prospered, Lyons each for the purpose of printing 95,000 posters.
demanded for a share in the business. Is Lyons Isabelo was unable to print enough posters
entitled to the shares in San Juan Estate? pursuant to the agreement, thus he executed in
favor of Mariano a promissory note in an amount
A: No. Lyons himself manifested his desire not to be equivalent to the unrealized profit due to
part of the development project. Thus, no insufficient printing. The whole amount became
partnership was formed. The mortgage of the land due but Isabelo defaulted payment. Is Mariano
was immaterial to the existence of the partnership. entitled to file a case for the recovery of the
It is clear that Henry, in buying the San Juan Estate, unrealized profit of the partnership?
was not acting for any partnership composed of
himself and Lyons, and the law cannot be distorted A: No. The essence of a partnership is to share in
into a proposition which would make Lyons a the profits and losses, thus, Mariano should
participant in this deal contrary to his express shoulder the losses with Isabelo. (Moran Jr., v. CA,
determination. (Lyons v. Rosenstock, G.R. No. G.R. No. L-59956, Oct. 31, 1984)
35469, Mar. 17, 1932)
Q: To form a lending business, it was verbally
Q: Catalino and Ceferino acquired a joint tenancy agreed that Noynoy would act as financier while
over a parcel of land under a verbal contract of Cory and Kris would take charge of solicitation of
partnership. It was stipulated that each of the said members and collection of loan payments. They
purchasers should pay one-half of the price and agreed that Noynoy would receive 70% of the
that an equal division should be made between profits while Cory and Kris would earn 15% each.
them of the land thus purchased. Despite The parties executed the 'Articles of Agreement'
Catalino’s demand for an equal division between which formalized their earlier verbal agreement.
them, Ceferino refused to do so and even profited Later, Noynoy filed a complaint against Cory and
Kris for misappropriation of funds allegedly in
345
their capacities as Noynoy’s employees. In their Q: What are the rules to determine the existence
answer, Cory and Kris asserted that they were of partnership?
partners and not mere employees of Noynoy.
What kind of relationship existed between the A:
parties? 1. Except as provided by article 1825, persons
who are not partners as to each other are not
A: A partnership was formed among the parties. partners as to third persons;
The "Articles of Agreement" stipulated that the 2. Co-ownership or co-possession does not of
signatories shall share the profits of the business in itself establish a partnership, whether such co-
a 70-15-15 manner, with Noynoy getting the lion's owners or co- possessors do or do not share
share. This stipulation clearly proved the any profits made by the use of the property;
establishment of a partnership. (Santos v. Spouses 3. The sharing of gross returns does not of itself
Reyes, G.R. No.135813, Oct. 25, 2001) establish a partnership, whether or not the
persons sharing them have a joint or common
Q: Jose conveyed his lots in favor of his four sons right or interest in any property from which
in order for them to build their residences. His the returns are derived;
sons sold the lots since they found the lots 4. The receipt by a person of a share of the
impractical for residential purposes because of profits of a business is prima facie evidence
high costs of construction. They derived profits that he is a partner in the business, but no such
from the sale and paid income tax. The sons were inference shall be drawn if such profits were
required to pay corporate income tax and income received in payment:
tax deficiency, on the theory that they formed an a. As a debt by installments or otherwise;
unregistered partnership or joint venture taxable b. As wages of an employee or rent to a
as a corporation. Did the siblings form a landlord;
partnership? c. As an annuity to a widow or
representative of a deceased partner;
A: No. The original purpose was to divide the lots d. As interest on a loan, though the amount
for residential purposes. If later, they found out of payment vary with the profits of the
that it is not feasible to build their residences on business;
the lots, they can dissolve the co-ownership by e. As the consideration for the sale for the
reselling said lots. The division on the profit was sale of a goodwill of a business or other
merely incidental to the dissolution of the co- property by installments or otherwise.
ownership which was in the nature of things a (Art. 1769)
temporary state. (Obillos, Jr. v. CIR, G.R. No. L-
68118, Oct. 29, 1985) Note: Art. 1825 provides for partnership by estoppel.
C. RULES TO DETERMINE EXISTENCE In sub-paragraphs a – e, the profits in the business are

not shared as profits of a partner as a partner, but in
some other respects or for some other purpose.
Q: What are the distinctions between partnership, co-ownership and corporation?
PARTNERSHIP CO-OWNERSHIP COPORATION

Creation
Created by contract or by mere
Created by law Created by law
agreement of the parties
Juridical Personality
Has juridical personality separate Has juridical personality separate
and distinct from that of each None and distinct from that of each
partner corporators
Purpose
Common enjoyment of a thing or Depends in Articles of
Realization of profits
right Incorporation (AOI)
Duration/ Term of Existence
50 years maximum, extendible for
No limitation 10 years maximum not more than 50 years in any one
instance
346 CIVIL LAW TEAM

PARTNERSHIP
Number of incorporators
Minimum of 2 persons Minimum of 2 persons Minimum of 5 persons
Commencement of Juridical Personality
From the moment of execution of From the date of issuance of the
None
the contract of partnership certificate of incorporation
Disposal/ Transferability of Interest
Partner may not dispose of his Stockholder has a right to transfer
individual interest unless agreed Co-owner may freely do so shares without prior consent of
upon by all partners other stockholders
rd
Power to Act with 3 Persons
In absence of stipulation to
contrary, a partner may bind Co-owner cannot represent the Management is vested with the
partnership – each partner is co-ownership BOD
agent of partnership
Effect of Death
Death of a partner results in Death of co-owner does not Death of stockholder does not
dissolution of partnership necessarily dissolve co-ownership dissolve the corporation
Dissolution
May be dissolved at any time by
May be dissolved anytime by the Can only be dissolved with the
the will of any or all of the
will of any or all of the co-owners consent of the State
partners
Q: A and B are co-owners of an inherited 2. They have equal rights in the management and
properties. They agreed to use the said common conduct of the partnership business. (Art.
properties and the income derived therefrom as a 1803)
common fund with the intention to produce 3. Every partner is an agent of the partnership,
profits for them in proportion to their respective and entitled to bind the other partners by his
shares in the inheritance as determined in a acts, for the purpose of its business. (Art.
project of partition. What is the effect of such 1818). He may also be liable for the entire
agreement on the existing co-ownership? partnership obligations.
4. All partners are personally liable for the debts
A: The co-ownership is automatically converted into of the partnership with their separate property
a partnership. From the moment of partition, A and (Arts. 1816, 1822-24) except limited partners
B, as heirs, are entitled already to their respective are not bound beyond the amount of their
definite shares of the estate and the income investment (Art 1843).
thereof, for each of them to manage and dispose of 5. A fiduciary relation exists between the
as exclusively his own without the intervention of partners. (Art. 1807)
the other heirs, and, accordingly, he becomes liable 6. On dissolution, the partnership is not
individually for all the taxes in connection terminated, but continues until the winding up
therewith. of partnership is completed. (Art 1828)
If, after such partition, an heir allows his shares to Note: Such incidents may be modified by stipulation of
be held in common with his co-heirs under a single the partners subject to the rights of third persons
management to be used with the intent of making dealing with the partnership.
profit thereby in proportion to his share, there can
be no doubt that, even if no document or Q: What are the rules regarding distribution of
instrument were executed for the purpose, for tax profits and losses?
purposes, at least, an unregistered partnership is
formed. (Ona v. Commissioner of Internal revenue, A:
45 SCRA 74 [1972]) 1. Distribution of profits
a. The partners share in the profits
Q: What are the typical incidents of partnership? according to their agreement
b. In the absence of such:
A: i. Capitalist partner – in proportion to his
1. The partners share in profits and losses. (Arts. contribution
1767,1797-98) ii. Industrial partner – what is just and
equitable under the circumstances
347
2. Distribution of losses 2. Real property or real rights – must be:

a. The partners share in the losses a. in a public instrument (Art. 1771)
according to their agreement b. with an inventory of said property
b. In the absence of such, according to their i. signed by the parties
agreement as to profits ii. attached to the public instrument
c. In the absence of profit agreement, in (Art. 1773)
proportion to his capital contribution
Note: Everything must be complied
Q: What is the rule regarding a stipulation which with; otherwise, partnership is void
excludes a partner in the sharing of profits and and has no juridical personality even
losses? as between the parties (Art. 1773)
A: GR: Stipulation is void. iii. registered in the Registry of

Property of the province, where
XPN: Industrial partner is not liable for losses the real property is found to bind
[Art. 1797(2)]. However, he is not exempted third persons (Paras, p. 412)
from liability insofar as third persons are
concerned. 3. Limited partnership – must be registered
as such with SEC, otherwise, it is not valid
Note: If the industrial partner has contributed as a limited partnership but may still be
capital other than his services, he shall also receive considered a general partnership with
a share in the profits in proportion to his capital. juridical personality (Paras, Civil Code of
the Philippines Annotated, Volume 5, p.
th
D. HOW PARTNERSHIP IS FORMED 412, 1969 6 ed)
Q: How are partnerships formed? Note: An agreement to enter in a

partnership at a future time, which “by its
A: It is created by agreement of the parties terms is not performed within a year from
(consensual). the making thereof” is covered by the
Statute of Frauds. [Art. 1403(2)] Such
Note: There is no such thing as a partnership created agreement is unenforceable unless the same
be in writing or at least evidenced by some
by law or by operation or implication of law alone. (De
Leon, Comments and cases on Partnership, Agency and note or memorandum therof subscribed by
the parties. (De Leon, Comments and Cases
Trust, p. 13, 2005 ed.
on Partnership, Agency and Trusts, 2010 ed.,
p. 63)
Q: What are the formalities needed for the
creation of a partnership?
Q: If the requirements under Art. 1773, as regards
contribution of real property to a partnership, has
A: GR: No special form is required for its validity or
not been complied with, what is the status of the
existence. (Art. 1771) The contract may be made
partnership?
orally or in writing regardless of the value of the
contributions. A: It is void. The contract of partnership is void.
Nonetheless, a void partnership under Art. 1773, in
XPN: If property or real rights have been
relation to Art. 1771, may still be considered by the
contributed to the partnership: courts as an ordinary contract as regards the parties
1. Personal property
thereto from which rights and obligations to each
a. Less than P3,000 – may be oral other may be inferred and enforced. (Torres v. CA,
b. P 3,000 or more – must be:
G.R. No. 134559, Dec. 9 1999)
i. in a public instrument; and
ii. registered with SEC (Art. 1772) Note: Torres v. CA does not involve third persons.
Note: Even if the partnership is Q: What must be done in order that the
not registered with SEC, the
partnership may be effective as against third
partnership is still valid and
persons whenever immovable property is
possesses a distinct personality
(Paras, Civil Code of the
contributed?
Philippines Annotated, Volume 5,
p. 412, 1969 6th ed) A: To be effective against third persons, the transfer
of real property to the partnership must be duly
348 CIVIL LAW TEAM

PARTNERSHIP
registered in the Registry of Property of the A: A partnership begins from the moment of the
province or city where the property contributed is execution of the contract, unless it is otherwise
located. (Art. 1771) stipulated. (Art 1784).
Q: Can there be a partnership based on a verbal Note: A partnership commences from the time of
agreement, and without such agreement being execution of the contract if there is no contrary
registered with SEC? stipulation as to the date of effectivity of the same.
A: Yes. Article 1772 requires that partnerships with Q: What is a future partnership?
a capital of P3,000 or more must register with SEC.
However, this registration requirement is not A: It is a kind of partnership where the partners
mandatory. Article 1768 explicitly provides that the may stipulate some other date for the
partnership retains its juridical personality even if it commencement of the partnership. Persons who
fails to register. The failure to register the contract enter into a future partnership do not become
of partnership does not invalidate the same as partners until or unless the agreed time has arrived
among the partners, so long as the contract has the or the contingency has happened. (De Leon,
essential requisites, because the main purpose of Comments and Cases on Partnership, Agency and
registration is to give notice to third parties, and it Trusts, 2010 ed. p.87)
can be assumed that the members themselves
Q: What is a partnership with a fixed term?
knew of the contents of their contract. Non-
compliance with this directory provision of the law
A: It is one in which the term of its existence has
will not invalidate the partnership.
been agreed upon by the partners either:
A partnership may be constituted in any form, 1. Expressly – there is a definite period
except where immovable property of real rights are 2. Impliedly – a particular enterprise or
contributed thereto, in which case a public transaction is undertaken
instrument shall be necessary. Hence, based on the
intention of the parties, a verbal contract of Note: The mere expectation that the business would
be successful and that the partners would be able to
partnership may arise. (Sunga-Chan v. Chua, G.R.
recoup their investment is not sufficient to create a
No. 143340, Aug. 15, 2001)
partnership for a term.
Note: Registration is merely for administration and
licensing purposes; hence, it shall not affect the Q: Can the partners fix any term in the partnership
liability of the partnership and the members thereof to contract?
third persons. [Art. 1772, (2)]
A: Yes, the partners may fix in their contract any
Q: A partnership was entered into between term and they shall be bound to remain under such
Mauricio and Severino to operate a fishpond. a relation for the duration of the term.
Neither partner contributed a fishpond or a real
right over any fish pond. Their capital Q: What is the effect when the fixed term has
contributions were in cash in the amount of expired?
P1,000 each. While the partnership contract was
done in a public instrument, no inventory of the A: The expiration of the term fixed or the
fishpond to be operated was attached in the said accomplishment of the particular undertaking
instrument. Is there a valid contract of specified will cause the automatic dissolution of the
partnership? partnership.
A: Yes. There is a valid contract of partnership Q: When does a partnership commence to exist?
despite the lack of inventory. The purpose of the
partnership was not to engage in the fishpond A: A partnership begins from the moment of the
business but to operate a fishpond. Neither said execution of the contract, unless it is otherwise
fishpond nor a real right to any fish pond was stipulated. (Art 1784).
contributed to the partnership or become part of
the capital thereof. (Agad v. Mabato, G.R. No. L- Note: A partnership commences from the time of
24193, June 28, 1968) execution of the contract if there is no contrary
stipulation as to the date of effectivity of the same.
E. PARTNERSHIP TERM
Q: What is a future partnership?
Q: When does a partnership commence to exist?
349
A: It is a kind of partnership where the partners

may stipulate some other date for the 2. Liability of partners
commencement of the partnership. Persons who a. General partnership – One where all
enter into a future partnership do not become partners are general partners who
partners until or unless the agreed time has arrived are liable even with respect to their
or the contingency has happened. (De Leon, individual properties, after the assets
Comments and Cases on Partnership, Agency and of the partnership have been
Trusts, 2010 ed. p.87) exhausted (Paras,p. 411)
b. Limited partnership – One formed by
Q: When is a partnership at will terminate? 2 or more persons having as
members one or more general
A: It may be lawfully terminated at any time by the partners and one or more limited
express will of all the partners or any of them. partners, the latter not being
personally liable for the obligations
Q: How is a partnership at will dissolved? of the partnership. (Art. 1843)
A: Any one of the partners may dictate a dissolution 3. Duration

of a partnership at will. a. Partnership at will – Partnership for a
particular undertaking or venture
Note: The partner who wants the partnership
which may be terminated anytime by
dissolved must do so in good faith, not that the
attendance of bad faith can prevent the dissolution of
mutual agreement.
the partnership, but to avoid the liability for damages b. Partnership with a fixed period – The
to other partners. term for which the partnership is to
exist is fixed or agreed upon or one
CLASSIFICATIONS OF PARTNERSHIP formed for a particular undertaking.
Q: State the classifications of partnership. 4. Legality of existence

a. De jure partnership – one which has
A: As to: complied with all the requirements
1. Object for its establishment
a. Universal partnership b. De facto partnership – one which has
i. of all present property (Art. 1778) failed to comply with all the legal
– the partners contribute all the requirements for its establishment.
property which actually belongs to
them to a common fund, with the 5. Representation to others
intention of dividing the same a. Ordinary or real partnership – one
among themselves, as well as all which actually exist among the
profits they may acquire partners and also as to third person.
therewith. The following become b. Ostensible or partnership by
the common fund of all the estoppel – When two or more
partners: persons attempt to create a
 property which belonged to partnership but fail to comply with
each of the partners at the time the legal personalities essential for
of the constitution of the juridical personality, the law
partnership considers them as partners, and the
 profits which they may acquire association is a partnership insofar as
from all property contributed it is favorable to third persons, by
ii. of all profits (Art. 1780) – reason of the equitable principle of
comprises all that the partners estoppel (MacDonald et. al. v. Nat’l.
may acquire by their industry or City Bank of New York, G.R. No. L-
work during the existence of the 7991, May 21, 1956)
partnership
b. Particular partnership – It is one 6. Publicity
which has for its object, determinate a. Secret partnership – Partnership that
things, their use and fruits, or a is not known to many but only as to
specific undertaking or the exercise its partners.
of a profession or a vocation. (Art.
1783)
350 CIVIL LAW TEAM

PARTNERSHIP
b. Notorious or open partnership – It is Note: Even if a partner will associate another person in
known not only to the partners, but his share in the partnership, the associate shall not be
to the public as well. admitted into the partnership without the consent of
all the partners, even if the partner having an associate
7. Purpose should be a manager (Art. 1804).
a. Commercial or trading – One formed
for the transaction of business. Q: May a corporation enter into a partnership with
b. Professional or non-trading – One another corporation?
formed for the exercise of a
profession A: As a rule, it is illegal for two corporations to
enter into a partnership. Nevertheless, a
Q: What are the different kinds of partnership corporation may enter into a joint venture with
under the Spanish Civil Code? another if the nature of the venture is in line with
the business authorized by its charter. (Tuason v.
A: Bolaños, G.R. No. L-4935, May 28, 1954)
1. Sociedad Anonima – similar to anonymous
partnership Q: What are the different kinds of partners?
2. Sociedad Colectiva – general or collective
partnership A:
3. Sociedad de Cuentas en Participacion – joint 1. Capitalist – Contributes money or property to
account partnership the common fund
4. Sociedad Mercantile Regular Colectiva – 2. Industrial – Contributes only his industry or
mercantile partnership company personal service
rd
5. Sociedad Leonila – partnership by which the 3. General – One whose liability to 3 persons
entire profits should belong to some of the extends to his separate or personal property
rd
partners in exclusion of the rest 4. Limited – One whose liability to 3 persons is
limited to his capital contribution
Q: Who may be partners? 5. Managing – Manages the affairs or business of
the partnership
A: GR: Any person capacitated to contract may 6. Liquidating – Takes charge of the winding up of
enter into a contract of partnership. partnership affairs upon dissolution
7. Partner by estoppel – Is not really a partner but
XPNs: is liable as a partner for the protection of
rd
1. Persons who are prohibited from giving innocent 3 persons
each other any donation or advantage 8. Continuing partner – Continues the business of
cannot enter into a universal partnership. a partnership after it has been dissolved by
(Art. 1782) reason of the admission of a new partner,
retirement, death or expulsion of one of the
Note: A husband and wife, however, may partners
enter into a particular partnership or be 9. Surviving partner – Remains after a
members thereof. (De Leon, Comments and partnership has been dissolved by death of any
Cases on Partnership, Agency and Trusts, partner
2010 ed., p. 78) 10. Sub-partner – Is not a member of the
partnership; contracts with a partner with
2. Persons suffering from civil interdiction reference to the latter's share in the
3. Persons who cannot give consent to a partnership
contract: 11. Ostensible – Takes active part and known to
a. Minors the public as partner in the business
b. Insane persons 12. Secret – Takes active part in the business but is
c. Deaf-mutes who do not know how to not known to be a partner by outside parties
write 13. Silent – Does not take any active part in the
business although he may be known to be a
Q: What is the principle of delectus personae? partner
14. Dormant – Does not take active part in the
A: This refers to the rule that is inherent in every business and is not known or held out as a
partnership, that no one can become a member of partner
the partnership association without the consent of
all the partners. Q: What are the relations created by a contract of
partnership?
351
PARTICULAR PARTNERSHIP
A:
1. Partners-Partners Q: What is particular partnership?
2. Partners-Partnership
3. Partnership-third persons with whom it A: It is one which has for its object determinate
contracts things, their use or fruits, or a specific undertaking,
4. Partners-third persons with whom partnership or the exercise of a profession or vocation. (Art.
contracts. 1783)
F. UNIVERSAL VS. PARTICULAR; Q: J, P and B formed a limited partnership called

GENERAL VS. LIMITED Suter Co., with P as the general partner and J and
B as limited partners. J and B contributed P18,000
UNIVERSAL PARTNERSHIP and P20,000 respectively. Later, J and B got
married and P sold his share of the partnership to
Q: Distinguish the classes of universal partnership. the spouses which was recorded in the SEC. Has
the limited partnership been dissolved by reason
A: of the marriage between the limited partners?
ALL PROFITS ALL PRESENT PROPERTY
What constitutes common property A: No. The partnership is not a universal but a
Only usufruct of All properties actually belonging particular one. As provided by law, a universal
the properties of to the partners are contributed partnership requires either that the object of the
the partners – they become common association must be all present property of the
become common property partners as contributed by them to a common fund,
property (owned by all of the partners or all else that the partners may acquire by their
and the partnership) industry or work. Here, the contributions were fixed
As to profits as common property sums of money and neither one of them were
As to profits from other industrial partners. Thus, the firm is not a
sources: partnership which the spouses are forbidden to
GR: Aside from the contributed enter into. The subsequent marriage cannot
properties, the profits of said
operate to dissolve it because it is not one of the
property become common
All profits causes provided by law. The capital contributions
property
acquired by the were owned separately by them before their
industry of the marriage and shall remain to be separate under the
XPN: Profits from other sources
partners become Spanish Civil Code. Their individual interest did not
may become common if there is
common property become common property after their marriage.
a stipulation to such effect
(whether or not (Commissioner of Internal Revenue v. Suter, G.R. No.
As to properties subsequently
they were L-25532, Feb. 28, 1969)
acquired:
obtained through
GR: Properties subsequently
the usufruct
acquired by inheritance, legacy GENERAL PARTNERSHIP
contributed)
or donation, cannot be included
in the stipulation Q: What is general partnership?
XPN: Only fruits thereof can be A: One where all partners are general partners who
included in the stipulation (Art. are liable even with respect to their individual
1779) properties, after the assets of the partnership have
been exhausted (Paras, Civil Code of the Philippines
Q: If the Articles of Universal Partnership fail to th
Annotated, Volume 5, p. 411, 1969 6 ed)
specify whether it is one of all present property or
of profits, what shall be its nature? Q: Who is a general partner?
A: Articles of Universal Partnership entered into A: One whose liability to third persons extends to
without specification of its nature only constitutes a his separate property; he may be either a capitalist
universal partnership of profits (Art. 1781), because or an industrial partner. (De Leon, Comments and
it imposes lesser obligations on the partners, since Cases on Partnership, Agency, and Trust, p. 77, 2005
they preserve the ownership of their separate ed) He is also known as real partner.
property.
352 CIVIL LAW TEAM

PARTNERSHIP
Q: What are the distinctions between a general and a limited partner/partnership?
GENERAL LIMITED
Extent of Liability
Personally liable for partnership obligations Liability extends only to his capital contributions
Right in Management
When manner of management has not agreed upon, all
general partners have an equal right in the management No participation in management
of the business
Contribution
Contribute money, property or industry Contribute cash or property only, not services
If Proper Party to Proceedings By or Against Partnership
Not proper party to proceedings by/against partnership,
unless:
Proper party to proceedings by/against partnership 1. He is also a general partner; or
2. Where the object of the proceeding is to enforce a
limited partner’s right or liability to the partnership
Assignment of Interest
Interest is not assignable without consent of other
Interest is freely assignable
partners
Firm Name
It must also operate under a firm name, followed by the
word “Limited.”
GR: The surname of a limited partner shall not appear in

the partnership name.
It must operate under a firm name, which may or may XPNs:

not include the name of one or more of the partners. 1. It is also the surname of a general partner;
2. Prior to the time when the limited partner became
Note: Those, whose, not being members of the such, the business had been carried on under a
partnership, include their names in the firm name, shall name in which his surname appeared.
be subject to the liability of a partner. (Art. 1815)
Note: A limited partner whose surname appears in a
partnership name is liable as a general partner to
partnership creditors who extend credit to the
partnership without actual knowledge that he is not a
general partner. (Art. 1846)
Prohibition to Engage in Other Business
The capitalist partner cannot engage for their own
account in any operation which is of the kind of business
in which the partnership is engaged, unless there is a
No prohibition against engaging in business
stipulation to the contrary
If he is an industrial partner- in any business for himself.

Effect of Death, Insolvency, Retirement, Insanity
Retirement, death, insolvency, insanity of general Does not have same effect; rights are transferred to
partner dissolves partnership legal representative
Creation
As a rule, it maybe constituted in any form, by contract Created by the members after substantial compliance in
or conduct of the parties good faith of the requirements set forth by law
Composition / Membership
Composed of at least one general partner and one
Composed only of general partners
limited partner.
353
G. PARTNERSHIP BY ESTOPPEL a duty which may be altered by agreement to share

both in profits and losses.
Q: Who is a partner by estoppel?
Partnership Joint Venture
A: One who, by words or conduct does any of the Transactions entered into
following:
1. Directly represents himself to anyone as a The duration of a Limited to the period in
partner in an existing partnership or in a partnership generally which the goods are sold
non-existing partnership relates to a continuing or the project is carried
2. Indirectly represents himself by business of various on or a single
consenting to another representing him transactions of a certain transaction.
as a partner in an existing partnership or kind.
in a non-existing partnership Nature
Permanent, partners are
Q: What are the elements before a partner can be interested in carrying on
held liable on the ground of estoppel? together of a general and
continuing business of a
A: particular kind. Temporary, although it
1. Defendant represented himself as partner or is may continue for a
represented by others as such, and did not Note: A particular number of years.
deny/refute such representation. partnership has a limited
and temporary or ad hoc
2. Plaintiff relied on such representation.
nature, being confined to
3. Statement of defendant is not refuted.
a single undertaking.
Firm Name and Liablities
Q: What are the liabilities in case of estoppel?
There must be a
partnership or firm name A firm name is not
A: under which the necessary, thus the
When Partnership is Liable partnership shall operate. participating persons
If all actual partners consented to the representation, The names of the partners can transact business
then the liability of the person who represented may appear in the firm under their own name
himself to be a partner or who consented to such name and the act of the and can be individually
representation and the actual partner is considered a partners will make the liable therefore.
partnership liability partnership liable.
Corporation as partner
When Liability is PRO RATA
Corporation cannot enter Corporations can engage
When there is no existing partnership and all those into a partnership in a joint venture with
represented as partners consented to the contract, thus it cannot be others through a
representation, then the liability of the person who a partner by reason of contract of agreement if
represented himself to be a partner and all who made public policy; otherwise the nature of the
and consented to such representation, is joint or pro- people other than its venture in line with the
rata officers may be able to business of the
When Liability is SEPARATE bind it (Albano, Civil Law corporation and it is
When there is no existing partnership and not all but Reviewer, 1998, p.570) authorized in its charter.
only some of those represented as partners consented Legal Personality
to the representation, or none of the partnership in an A partnership acquires
existing partnership consented to such representation, personality after following
then the liability will be separate the requisites required by
law. e.g. Art. 1771-1773)
A joint venture has no
H. PARTNERSHIP V. JOINT VENTURE legal personality.
Note: SEC registration is
not required before a
Q: What is a joint venture? partnership acquires legal
personality. (Art. 1768)
A: An association of persons or companies jointly
undertaking some commercial enterprise; I. PROFESSIONAL PARTNERSHIP
generally, all contributes assets and share risks. It
requires a community of interest in the Q: What is a professional partnership?
performance of the subject matter, a right to direct
and govern the policy in connection therewith, and
354 CIVIL LAW TEAM

PARTNERSHIP
A: It is a partnership formed by persons for the sole Power is irrevocable

purpose of exercising their common profession, no without just or lawful
part of the income of which is derived from cause
engaging in any trade or business.
Note: Vote required for
Q: In a professional partnership, who is deemed removal of manager Power to act is revocable
engaged in the practice of profession? 1. For just cause – anytime, with or without
Vote of the cause (should be done by
controlling partners the controlling interest)
A: It is the individual partners and not the
(controlling
partnership. Thus, they are responsible for their
financial interest)
own acts. 2. Without cause or
for unjust cause –
Q: What is prohibited in the formation of a Unanimous vote
professional partnership? Extent of Power
1. If he acts in good
A: Partnership between lawyers and members of faith, he may do all
other profession or non-professional persons As long as he is a
acts of
should not be formed or permitted where any part manager, he can perform
administration
all acts of administration
of the partnership’s employment consists of the (despite opposition
(if others oppose, he can
practice of law. (Canons of Professional Ethics) of his partners)
be removed)
2. If he acts in bad
Q: What are the characteristics of a partnership for faith, he cannot
the practice of law?
Q: What is the rule where there are two or more
A: managers?
1. A duty of public service, of which the
emolument is a by-product; A:
2. A relation as an “officer of court” to the Without specification of their respective duties
administration of justice involving thorough and without stipulation requiring unanimity of
sincerity, integrity, and reliability; action
3. A relation to clients in the highest fiduciary GR: Each may separately execute all acts of
degree; administration (unlimited power to administer)
4. A relationship to colleagues at the bar
characterized by candor, fairness, and XPN: If any of the managers opposes, decision of
unwillingness to resort to current business the majority prevails
methods of advertising and encroachment on
their practice, or dealing with their clients. (In Note: In case of tie – Decision of the controlling
interest (who are also managers) shall prevail
the Matter of Petition for Authority to Continue
Use of Firm Name “Sycip, Salazar, etc.” /
With stipulation that none of the managing partners
“Ozaeta Romulo, etc.,” 92 SCRA 1 [1979], citing
shall act without the consent of the others
H.S. Drinker, Legal Ethics [1953], pp4-5.)
GR: Unanimous consent of all the managing
partners shall be necessary for the validity of the
Q: What is prohibited in the firm name of a acts and absence or inability of any managing
partnership for the practice of law? partner cannot be alleged.
A: In the selection and use of firm name, no false, XPN: Where there is an imminent danger of grave or
misleading, assumed, or trade names should be irreparable injury to the partnership.
used. (Canons of Professional Ethics)
Q: What is the rule when the manner of
J. MANAGEMENT OF THE PARTNERSHIP management has not been agreed upon?
Q: What are the modes of appointment of a A:

manager? 1. All partners shall be considered agents and
whatever any one of them may do alone shall
A: bind the partnership, without prejudice to the
Appointment through provisions of Art. 1801.
Appointment Other Than
the Articles of 2. None of the partners may, without the consent
in the Articles
Partnership of the others, make any important alteration in
355
the immovable property of the partnership. Or at the very least, Arsenio is an agent of the
(Art. 1803) partnership. Being an agent, it is understood that
he acted for and in behalf of the firm. (Tai Tong
Q: Azucena and Pedro acquired a parcel of land Chuache & Co. v. Insurance Commissioner, G.R. No.
and a building. Azucena obtained a loan from Tai L-55397, Feb. 29, 1988)
Tong Co., secured by a mortgage which was
executed over the land and building. Arsenio, Note: If refusal of partner is manifestly prejudicial to
representative of Tai Tong, insured it with the interest of partnership, court’s intervention may
Travellers Multi Indemnity Corporation. The be sought.
building and the contents thereof were razed by
fire. Travellers failed to pay the insurance. Hence, Q: What are the remedies available to the
Azucena and Pedro filed a case against Travellers creditors of a partner?
wherein Tai Tong intervened claiming entitlement
to the proceeds from Travellers. Who is entitled A:
to the proceeds of the policy? 1. Separate or individual creditors should first
secure a judgment on their credit; and
A: Tai Toing is entitled to the insurance proceeds. 2. Apply to the proper court for a charging order
Arsenio contracted the insurance policy on behalf subjecting the interest of the debtor-partner in
of Tai Tong. As the managing partner of the the partnership for the payment of the
partnership, he may execute all acts of unsatisfied amount of the judgment debt with
administration including the right to sue debtors of interest thereon.
the partnership in case of their failure to pay their
obligations when it became due and demandable.
Q: What are the effects of the acts of partners?
A:
ACTS OF A PARTNER EFFECT
With binding effect except:
1. When the partner so acting has in fact no authority to
act for the partnership in the particular matter, and
Acts for apparently carrying on in the usual way the
2. The person with whom he is dealing has knowledge of
business of the partnership
the fact that he has no such authority.
Do not bind partnership unless authorized by other partners
Acts not in the ordinary course of business
(par. 2, Art. 1818)
Acts of strict dominion or ownership:
1. Assigning partnership property in trust for
creditors ; GR: One or more but less than all the partners have no
2. Disposing of goodwill of business; authority
3. Doing an act which would make it impossible to
carry on the ordinary business of partnership; XPNs:
4. Confessing a judgment; 1. authorized by the other partners; or
5. Entering into a compromise concerning a
partnership claim or liability; 2. partners have abandoned the business (par. 2, Art.
6. Submitting partnership claim or liability to 1818)
arbitration;
7. Renouncing claim of partnership
Partnership is not liable to 3rd persons having actual or
Acts in contravention of a restriction on authority
presumptive knowledge of the restriction
Q: What is the effect of conveyance of a real property?
A:
TYPE OF CONVEYANCE EFFECT
Conveyance passes title but partnership can recover unless:
Title in the partnership’s name;
Conveyance in partnership name 1.
a. Conveyance was done in the usual way of business, and
356 CIVIL LAW TEAM

PARTNERSHIP
b. The partner so acting has the authority to act for the

partnership; or
2. The property which has been conveyed by the grantee or a
person claiming through such grantee to a holder for value
without knowledge that the partner, in making the conveyance,
has exceeded his authority
Conveyance does not pass title but only equitable interest, provided:
Title in the partnership’s name; 1. Conveyance was done in the usual way of business, or
Conveyance in partner's name 2. The partner so acting has the authority to act for the
partnership
Conveyance passes title but the partnership may recover such
property if the partners’ act does not bind the partnership:
Title in the name of 1 or more partners, and
1. The partner so acting has no authority to act for the
the record does not disclose the right of the
partnership, and
partnership; Conveyance in name of partner/s
2. The person with whom he is dealing has knowledge of the fact
in whose name title stands
unless the purchaser of his assignee, is a holder for value,
without knowledge
Title in name of 1 or more or all partners or 3rd
Conveyance will only pass equitable interest, provided:
person in trust for partnership; Conveyance
1. The act is one within the authority of the partner, and
executed in partnership name or in name of
2. Conveyance was done in the usual way of the business
partners
Title in the names of all the partners;
Conveyance will pass all the rights in such property
Conveyance executed by all the partners
II. RIGHTS AND OBLIGATIONS OF PARTNERSHIP 5. Managing partner who collects debt (Art.
1792)
Q: What are the responsibilities of a partnership to 6. Partner who receives share of partnership
partners? credit (Art. 1793)
7. Damages to partnership (Art. 1794)
A: 8. Keep the partnership books (Art. 1805)
1. Refund the amounts disbursed by partner 9. Render information (Art. 1806)
in behalf of the partnership plus 10. Accountable as fiduciary (Art. 1807)
corresponding interest from the time the
expenses are made, not from the date of CONTRIBUTION OF PROPERTY
demand. (e.g. loans and advances made
by a partner to the partnership aside from Q: What are the obligations of partners with
capital contribution); respect to contribution of property?
2. Answer for obligations the partner may
have contracted in good faith in the A: To CAFPI
interest of the partnership business; 1. Contribute at the beginning of the
3. Answer for risks in consequence of its partnership, or at the stipulated time, the
management.(Art. 1796) money, property or industry which he
may have promised to contribute;
III. RIGHTS AND OBLIGATIONS OF PARTNERS
AMONG THEMSELVES 2. Answer for eviction in case the
partnership is deprived of the
OBLIGATIONS OF PARTNERS determinate property contributed
Q: What are the obligations of partners among 3. Answer to the partnership for the Fruits
themselves? of the property the contribution of which
he delayed, from the date they should
A: have been contributed up to the time of
1. Contribution of property (Art. 1786) actual delivery
2. Contribution of money and money converted
to personal use (Art. 1788) 4. Preserve said property with the diligence
3. Prohibition in engaging in business for himself of a good father of a family, pending
(Art. 1789) delivery to the partnership
4. Contribute additional capital (Art. 1791)
357
5. Indemnify the partnership for any 3. Indemnify the partnership for the
damage caused to it by the retention of damages caused to it by delay in the
the same or by the delay in its contribution or conversion of any sum for
contribution the partner’s personal benefit;
4. Pay the agreed or legal interest, if the
Q: Who bears the risk of loss of things partner fails to pay his contribution on
contributed? time or in case he takes any amount from
the common fund and converts it to his
A: own use.
WHO BEARS THE
KIND OF PROPERTY / THING
RISK? CONTRIBUTE ADDITIONAL CAPITAL
Specific and determinate things
which are not fungible where partners Q: What is the rule regarding obligation to
only the use is contributed contribute to partnership capital?
Specific and determinate things
A: Unless there is a stipulation to the contrary, the
the ownership of which is
partners shall contribute equal shares to the capital
transferred to the partnership
of the partnership (Art 1790). It is not applicable to
partnership
Fungible things (Consumable) an industrial partner unless, besides his services, he
has contributed capital pursuant to an agreement.
Things brought and appraised in
the inventory
Q: Is the capitalist partner required to contribute
additional capital?
Q: What is the effect if a partner fails to contribute
the property which he promised to deliver to the A: GR: A capitalist partner is not bound to
partnership? contribute to the partnership more than what he
agreed to contribute.
A:
1. Partners become ipso jure a debtor of the XPN:
partnership even in the absence of any 1. in case of imminent loss of the business
demand (Art. 1786) 2. there is no agreement to the contrary.
2. Remedy of the other partner is not rescission
but specific performance with damages and He is under obligation to contribute an
interest from defaulting partner from the time additional share to save the venture. If he
he should have complied with his obligation. refuses to contribute, he shall be obliged to sell
his interest to the other partners.
Note: When the capital or a part hereof which a
partner is bound to contribute consists of goods, their
Q: What are the requisites before capitalist
appraisal must be made in the manner prescribed in
the contract of partnership, and in the absence of partners are compelled to contribute additional
stipulation, it shall be made by experts chosen by the capital?
partners, and according to current prices, the
subsequent changes therof being for the account of A:
the partnership. (Art. 1787) 1. Imminent loss of the business of the
partnership;
CONTRIBUTION OF MONEY AND MONEY 2. Majority of the capitalist partners are of the
CONVERTED TO PERSONAL USE opinion that an additional contribution to the
common fund would save the business;
Q: What are the rules regarding contribution of 3. Capitalist partner refuses deliberately to
money to the partnership? contribute (not due to financial inability);
4. There is no agreement to the contrary.
A: To CRIP
1. Contribute on the date fixed the amount Note: The refusal of the partner to contribute his
additional share reflects his lack of interest in the
the partner has undertaken to contribute
continuance of the partnership. (De Leon, Comments
to the partnership;
and Cases on Partnership, Agency and Trusts, 2010 ed.
2. Reimburse any amount the partner may
p. 101)
have taken from the partnership coffers
and converted to his own use; MANAGING PARTNER WHO COLLECTS DEBT
358 CIVIL LAW TEAM

PARTNERSHIP
Q: What are the obligations of managing partners Q: What are the rules regarding the prohibition to
who collect his personal receivable from a person engage in another business?
who also owes the partnership?
A:
A: INDUSTRIAL PARTNER CAPITALIST PARTNER
1. Apply sum collected to 2 credits in proportion Prohibition
to their amounts Cannot engage in
Cannot engage in
2. If he received it for the account of partnership, business (with same
business for himself
the whole sum shall be applied to partnership kind of business with the
unless the partnership
credit partnership) for his own
expressly permits him to
account, unless there is
do so
Requisites: a stipulation to the
1. At least 2 debts, one where the collecting contrary
partner is creditor and the other, where Remedy
the partnership is the creditor Capitalist partners may: Capitalist partner, who
1. Exclude him from violated shall:
2. Both debts are demandable
the firm 1. Bring to the
3. Partner who collects is authorized to
2. Avail themselves of common fund any
manage and actually manages the
the benefits which profits accruing to
partnership he may have him from said
obtained transaction; and
Note: The debtor is given the right to prefer payment
3. Damages, in either 2. Personally bears all
of the credit of the partner if it should more onerous
case (Art. 1789) losses (Art. 1808)
to him in accordance with his right to application of
payment. (Art. 1252; De Leon, Comments and Cases on
Partnership, Agency and Trusts, 2010 ed. p. 103) Q: Joe and Rudy formed a partnership to operate a
car repair shop in Quezon City. Joe provided the
PARTNER WHO RECEIVES SHARE OF PARTNERSHIP capital while Rudy contributed his labor and
CREDIT industry. On one side of their shop, Joe opened
and operated a coffee shop, while on the other
Q: What is the obligation of a partner who side, Rudy put up a car accessories store. May they
receives share of partnership credit? engage in such separate businesses? Why?
A: To bring to the partnership capital what he has A: Joe, the capitalist partner, may engage in the
received even though he may have given receipt for restaurant business because it is not the same kind
his share only. of business the partnership is engaged in. On the
other hand, Rudy may not engage in any other
Requisites: business unless their partnership expressly permits
1. A partner has received in whole or in part, him to do so because as an industrial partner he has
his share of the partnership credit to devote his full time to the business of the
2. Other partners have not collected their partnership (Art. 1789). (2001 Bar Question)
shares
3. Partnership debtor has become insolvent DAMAGES TO PARTNERSHIP
Q: May a person who has not directly transacted Q: What is the rule with regard to the obligation of
in behalf of an unincorporated association be held a partner as to damages suffered by the
liable for a contract entered into by such partnership through his fault?
association?
A: GR: Every partner is responsible to the
A: Yes. The liability for a contract entered into on partnership for damages suffered by it through his
behalf of an unincorporated association or fault and he cannot compensate them with the
ostensible corporation may lie in a person who may profits and benefits which he may have earned for
not have directly transacted on its behalf, but the partnership by his industry.
reaped benefits from that contract. (Lim Tong Lim
v. Philippine Fishing Gear Industries Inc., G.R. No. XPN: The courts may equitably lessen this
136448, Nov. 3, 1999) responsibility if through the partner’s
extraordinary efforts in other activities of the
PROHIBITION IN ENGAGING IN BUSINESS partnership, unusual profit has been realized.
(Art. 1794)
359
DUTY TO KEEP THE PARTNESHIP BOOKS 5. Right to formal account as to partnership

affairs:
Q: What is the duty of the partners with respect to a. If he is wrongfully excluded from the
keeping the partnership books? partnership business or possession of its
property by his co-partners;
A: The partnership books shall be kept, subject to b. If the right exist under the terms of any
any agreement between partners, at the principal agreement;
place of business of the partnership. (Art. 1805) c. As provided by Art. 1807;
d. Whenever there are circumstances
DUTY TO RENDER INFORMATION render it just and reasonable.
5. Right to have the partnership dissolved.
Q: What is the duty of the partners with respect to 6. Property rights of a partner (Art. 1810)
information affecting the partnership?
Q: What are the rules regarding distribution of
A: Partners shall render on demand true and full profits and losses?
information of all things affecting the partnership
to: A:
1. any partner; or 1. Distribution of profits
2. legal representative of any deceased or a. The partners share in the profits
any partner under legal disability. (Art. according to their agreement
1806) b. In the absence of such:
i. Capitalist partner – in proportion to his
ACCOUNTABLE AS FIDUCIARY contribution
ii. Industrial partner – what is just and
Q: How are partners accountable to each other as equitable under the circumstances
fiduciary? 2. Distribution of losses
a. The partners share in the losses
A: Every partner must account to the partnership according to their agreement
for any benefit, and hold as trustee for it any profits b. In the absence of such, according to their
derived by him without the consent of the other agreement as to profits
partners from any transaction connected with the c. In the absence of profit agreement, in
formation, conduct, or liquidation of the proportion to his capital contribution
partnership or from any use by him of its property.
(Art. 1807) Q: What is the rule regarding a stipulation which
excludes a partner in the sharing of profits and
RIGHTS OF PARTNERS losses?
Q: What are the rights of partners among A: GR: Stipulation is void.

themselves?
XPN: Industrial partner is not liable for losses
A: [Art. 1797(2)]. However, he is not exempted
1. Right to reimbursement for amounts advanced from liability insofar as third persons are
to the partnership and to indemnification for concerned.
risks in consequence of management (Art.
1796); Note: Loss is different from liability
2. Right on the distribution of profits and losses
(Art. 1797) If the industrial partner has contributed capital
3. Right to associate another person with him in other than his services, he shall also receive a
his share without the consent of the other share in the profits in proportion to his capital.
partners. (Art. 1804)
Note: Such partnership formed between a member of a Q: What are the property rights of a partner?
partnership and a third person for a division of the
profits coming to him from the partnership enterprise is A: SIM
termed subpartnershiip. (De Leon, Comments and Cases
1. Right in Specific partnership property
on Partnership, Agency and Trusts, 2010 ed. p. 129-130)
2. Interest in the partnership (share in the
4. Right to free access and to inspect and copy at
profits and surplus)
any reasonable hour the partnership books.
3. Right to participate in the Management
(Art. 1805)
360 CIVIL LAW TEAM

PARTNERSHIP
Q: What is the nature of a partner's right in property for a specific purpose (such as that
specific partnership property? obtaining in the instant case) and he later
misappropriates the same, is guilty of estafa.
A: (Liwanag v. CA, G.R. No. 114398, Oct. 24, 1997)
1. Equal right to possession for partnership
purposes IV. OBLIGATIONS OF PARTNERSHIP/PARTNERS TO
2. Right is not assignable, except in connection THIRD PERSONS
with assignment of rights of all partners in the
same property Q: What are the obligations of partners with
rd
3. Right is limited to his share of what remains regard to 3 persons?
after partnership debts have been paid
4. Right is not subject to attachment or execution A:
except on a claim against the partnership 1. Every partnership shall operate under a firm
5. Right is not subject to legal support name. Persons who include their names in the
partnership name even if they are not
Q: What are the effects of assignment of partner’s members shall be liable as a partner (Art.
whole interest in the partnership? 1815)
2. All partners shall be liable for contractual
A: obligations of the partnership with their
1. Rights withheld from the assignee: property, after all partnership assets have
Such assignment does not grant the assignee been exhausted:
the right to: a. Pro rata
a. To interfere in the management b. Subsidiary(Art. 1816)
b. To require any information or account
c. To inspect partnership books Note: Any stipulation against the liability
laid down in Art. 1816 shall be void except
2. Rights of assignee on partner’s interest: as among the partners. (Art. 1817)
a. To receive in accordance with his contract
3. Partner as an agent of the partnership (Art.
the profits accruing to the assigning
1818)
partner
4. Conveyance of real property belonging to the
b. To avail himself of the usual remedies
partnership (Art. 1819)
provided by law in the event of fraud in
5. Admission or representation made by any
the management
partner concerning partnership affairs within
c. To receive the assignor’s interest in case
the scope of his authority is evidence against
of dissolution
the partnership (Art. 1820)
d. To require an account of partnership
6. Notice to partner of any matter relating to
affairs, but only in case the partnership is
partnership affairs operates as notice to
dissolved, and such account shall cover
partnership except in case of fraud:
the period from the date only of the last
a. Knowledge of partner acting in the
account agreed to by all the partners
particular matter acquired while a partner
b. Knowledge of the partner acting in the
CRIMINAL LIABILITY FOR MISAPPROPRIATION:
particular matter then present to his mind
ESTAFA
c. Knowledge of any other partner who
reasonably could and should have
Q: Rosa received from Jois money, with the
communicated it to the acting partner
express obligation to act as Jois’ agent in
(Art. 1821)
purchasing local cigarettes, to resell them to
7. Partners and the partnership are solidarily
several stores, and to give Jois the commission rd
liable to 3 persons for the partner's tort or
corresponding to the profits received. However,
breach of trust (Art. 1822-24)
Rosa misappropriated and converted the said
8. Liability of incoming partner is limited to:
amount due to Jois to her personal use and
a. His share in the partnership property
benefit. Jois filed a case of estafa against Rosa. Can
for existing obligations
Rosa deny liability on the ground that a
b. His separate property for subsequent
partnership was formed between her and Rosa?
obligations (Art. 1826)
9. Creditors of partnership are preferred in
A: No. Even assuming that a contract of partnership
partnership property & may attach partner's
was indeed entered into by and between the
share in partnership assets (Art. 1827)
parties, when a partner receives any money or
361
Note: On solidary liability. Art. 1816 should be the whole obligation if the case of the third person
construed together with Art. 1824 (in connection with falls under Articles 1822 and 1823. (Munasque v. CA,
Arts. 1822 and 1823). While the liability of the partners G.R. No. L-39780, Nov. 11, 1985)
is merely joint in transactions entered into by the
partnership, a third person who transacted with said
partnership may hold the partners solidarily liable for
PARTNER AS AGENT OF THE PARTNERSHIP
Q: What are the effects of the acts of partners?
A:
ACTS OF A PARTNER EFFECT
With binding effect except:
1. When the partner so acting has in fact no
authority to act for the partnership in the
particular matter, and
Acts for apparently carrying on in the usual way the 2. The person with whom he is dealing has
business of the partnership knowledge of the fact that he has no such
authority.
(par.1, Art. 1818)
Do not bind partnership unless authorized by other
Acts not in the ordinary course of business
partners (par. 2, Art. 1818)
Acts of strict dominion or ownership:
1. Assigning partnership property in trust for
creditors ; GR: One or more but less than all the partners have
2. Disposing of goodwill of business; no authority
3. Doing an act which would make it impossible to
carry on the ordinary business of partnership; XPNs:
4. Confessing a judgment; 1. authorized by the other partners; or
5. Entering into a compromise concerning a
partnership claim or liability; 2. partners have abandoned the business (par. 3,
6. Submitting partnership claim or liability to Art. 1818)
arbitration;
7. Renouncing claim of partnership
Partnership is not liable to 3rd persons having
Acts in contravention of a restriction on authority actual or presumptive knowledge of the restriction
(par. 4, Art. 1818)
Q: What is the effect of conveyance of a real property?
A:
TYPE OF CONVEYANCE EFFECT
Conveyance passes title but partnership can recover unless:
1.
a.Conveyance was done in the usual way of business, and
Title in the partnership’s name; b.The partner so acting has the authority to act for the
Conveyance in partnership name partnership; or
2. The property which has been conveyed by the grantee or a
person claiming through such grantee to a holder for value
without knowledge that the partner, in making the conveyance,
has exceeded his authority
Conveyance does not pass title but only equitable interest, provided:
Title in the partnership’s name; 3. Conveyance was done in the usual way of business, or
Conveyance in partner's name 4. The partner so acting has the authority to act for the
partnership
Title in the name of 1 or more partners, and Conveyance passes title but the partnership may recover such
the record does not disclose the right of the property if the partners’ act does not bind the partnership:
partnership; Conveyance in name of partner/s 1. The partner so acting has no authority to act for the
362 CIVIL LAW TEAM

PARTNERSHIP
in whose name title stands partnership, and

3. The person with whom he is dealing has knowledge of the fact
unless the purchaser of his assignee, is a holder for value,
without knowledge
Title in name of 1 or more or all partners or 3rd
Conveyance will only pass equitable interest, provided:
person in trust for partnership; Conveyance
1. The act is one within the authority of the partner, and
executed in partnership name or in name of
3. Conveyance was done in the usual way of the business
partners
Title in the names of all the partners;
Conveyance will pass all the rights in such property
Conveyance executed by all the partners
PARTNERSHIP TORT b. Express will of any partner in good faith,

when there is no definite term and no
Q: When is there a partnership tort? specified undertaking
c. Express will of all partners (except those
A: Where: who have assigned their interests or
1. by any wrongful act or omission of any suffered them to be charged for their
partner, acting in the ordinary course of separate debts) either before or after the
business of the partnership or with termination of any specified term or
authority of his co-partners, loss or injury particular undertaking
is caused to any person, not being a d. Expulsion of any partner in good faith of a
partner in the partnership; member
2. one partner, acting within the scope of his 2. Violating the agreement
apparent authority, receives money or 3. Unlawfulness of the business
property from a third person, and 4. Loss
misapplies it; or a. Specific thing promised as contribution is
3. the partnership, in the course of its lost or perished before delivery
business, receives money or property, b. Loss of a specific thing contributed before
and it is misapplied by any partner while it or after delivery, if only the use of such is
is in the custody of the partnership. contributed
Note: Partners are solidarily liable with the partnership Note: The partnership shall not be dissolved
for any penalty or damage arising from a partnership by the loss of the thing when it occurs after
tort. the partnership has acquired the ownership
thereof.
V. DISSOLUTION
5. Death of any of the partners
Q: Distinguish dissolution, winding up and 6. Insolvency of any partner or of the partnership
termination. 7. Civil interdiction of any partner
8. By decree of court under Art. 1831
Dissolution Winding up Termination a. a partner has been declared insane or of
A change in the unsound mind
Point in time
relation of the b. a partner becomes in any other way
when all
partners Settling the incapable of performing his part of the
partnership
caused by any partnership partnership contract
affairs are
partner ceasing business or c. a partner has been guilty of such conduct
wound up or
to be affairs after as tends to affect prejudicially the
completed; the
associated in dissolution carrying on of the business
end of the
carrying on the d. a partner willfully or persistently commits
partnership life
business.
a breach of the partnership agreement
e. the business of the partnership can only
Q: What are the causes of dissolution? be carried on at a loss
f. other circumstances render a dissolution
A: equitable
1. Without violating the agreement:
a. Termination of the definite term or Q: What are the effects of dissolution?
specific undertaking
A:
1. Partnership is not terminated
363
2. Partnership continues for a limited purpose A: Yes. The widow was not a mere agent, because
3. Transaction of new business is prohibited (De she had become a partner upon her husband's
Leon, Comments and Cases on Partnership, death, as expressly provided by the articles of co-
Agency, and Trust, p. 229, 2005 ed) partnership, and by authorizing the widow to
manage partnership property X recognized her as a
Note: The dissolution of a partnership must not be general partner with authority to administer and
understood in the absolute and strict sense so that at alienate partnership property. It is immaterial that
the termination of the object for which it was created W's name was not included in the firm name, since
the partnership is extinguished, pending the winding no conversion of status is involved, and the articles
up of some incidents and obligations of the of co-partnership expressly contemplated the
partnership, but in such case, the partnership will be admission of the partner's heirs into the
reputed as existing until the juridical relations arising partnership. (Goquiolay v. Sycip, G.R. No. L-11840,
out of the contract are dissolved. (Testate of Motta v.
Dec. 16, 1963)
Serra, G.R. No. L-22825, Feb. 14, 1925)
Dissolution does not automatically result in the

Q: What is the liability of a partner where the
termination of the legal personality of the partnership, dissolution is caused by the act, death or
nor the relations of the partners among themselves insolvency of a partner?
who remain as co-partners until the partnership is
terminated. (De Leon, Comments and Cases on A: GR: Each partner is liable to his co-partners for
Partnership, Agency, and Trust, p. 29, 2005 ed) his share, of any liability created by any partner for
the partnership, as if the partnership had not been
Q: What is the effect of dissolution on the dissolved.
authority of a partner?
XPNs: Partners shall not be liable when:
A: GR: The partnership ceases to be a going concern 1. the dissolution, being by act of any
partner, the partner acting for the
XPN: The partner’s power of representation is partnership had knowledge of the
confined only to acts incident to winding up or dissolution; or
completing transactions begun but not then 2. the dissolution, being by the death or
finished. (Art. 1832) insolvency of a partner, the partner acting
for the partnership had knowledge or
Note: Subject to the qualifications set forth in notice of the death or insolvency (Art.
Articles 1833 and 1834 in relation to Article 1832: 1833)
1. In so far as the partners themselves are
concerned – The authority of any partner to Q: After the dissolution of a partnership, can a
bind the partnership by a new contract is partner still bind the partnership?
immediately terminated when the
dissolution is not by the Act, Insolvency, or A: GR: Yes. A partner continues to bind partnership
Death of a partner (AID). even after dissolution in the following cases:
2. When the dissolution is by the act,
1. Transactions to wind up partnership
insolvency, or death, the termination of
affairs or to complete transactions
authority depends upon whether or not the
partner had knowledge or notice of
unfinished at dissolution;
dissolution (Art. 1833). 2. Transactions which would bind
partnership if dissolution had not taken
Q: The articles of co-partnership provide that in place, provided the other party/obligee:
case of death of one partner, the partnership shall a. Had extended credit to partnership
not be dissolved but shall be continued by the prior to dissolution; AND Had no
knowledge/notice of dissolution; or
deceased partner’s heirs. When H, a partner, died,
b. Did not extend credit to partnership;
his wife, W, took over the management of some of
Had known partnership prior to
the real properties with permission of the
dissolution; AND Had no
surviving partner, X, but her name was not
knowledge/notice of dissolution/fact of
included in the partnership name. She eventually dissolution not advertised in a
sold these real properties after a few years. X now newspaper of general circulation in the
claims that W did not have the authority to place where partnership is regularly
manage and sell those properties as she was not a carried on.
partner. Is the sale valid?
364 CIVIL LAW TEAM

PARTNERSHIP
XPNs: Partner cannot bind the partnership 5. Those to general partners in respect to
anymore after dissolution where dissolution is profits
due to unlawfulness to carry on business 6. Those to general partners in respect to
capital (Art. 1863)
XPN to XPN: Winding up of partnership
affairs Note: Subject to any statement in the certificate or to
1. Partner has become insolvent subsequent agreement, limited partners share in the
2. Act is not appropriate for winding up or partnership assets in respect to their claims for capital,
for completing unfinished transactions and in respect to their claims for profits or for
3. Completely new transactions which compensation by way of income on their contribution
would bind the partnership if respectively, in proportion to the respective amounts
of such claims.
dissolution had not taken place with
third persons in bad faith.
WINDING UP
4. Partner is unauthorized to wind up
partnership affairs, except by
Q: What takes place during the winding up of the
transaction with one who:
partnership?
a. Had extended credit to partnership
prior to dissolution; AND Had no
knowledge or notice of dissolution; or A: It is during this time after dissolution that
b. Did not extend credit to partnership partnership business or affairs are being settled.
prior to dissolution; Had known (De Leon, Comments and Cases on Partnership,
partnership prior to dissolution; AND Agency, and Trust, p. 229, 2005 ed)
Had no knowledge/notice of
dissolution/fact of dissolution not Q: Who are the persons authorized to wind up?
advertised in a newspaper of general
circulation in the place where A:
partnership is regularly carried on. 1. Partners designated by the agreement
2. In the absence of such, all partners who have
Q: Does the dissolution of a partnership discharge not wrongfully dissolved the partnership
existing liability of a partner? 3. Legal representative of last surviving partner
who is not insolvent
A: GR: No.
Q: What are partnership assets?
XPN: Said liability is discharged when there is an
agreement between: A:
1. Partner himself; 1. Partnership property
2. Person/s continuing the business; and 2. Contributions of the partners necessary for the
3. Partnership creditors payment of all liabilities [Art. 1839 (2)]
Q: What is the order of priority in the distribution Q: What is the order of payment in winding up?
of assets during the dissolution of a limited
partnership? A:
1. Those owing to creditors other than partners
A: In setting accounts after dissolution, the 3. Those owing to partners other than for capital
liabilities of the partnership shall be entitled to or profits
payment in the following order: 4. Those owing to partners in respect of capital
1. Those to creditors, in the order of priority 5. Those owing to partners in respect to profits
as provided by law, except those to [Art. 1839 (2)]
limited partners on account of their
contributions, and to general partners Q: What is the doctrine of marshalling of assets?
2. Those to limited partners in respect to
their share of the profits and other A:
compensation by way of income on their 1. Partnership creditors have preference in
contributions partnership assets
3. Those to limited partners in respect to the 2. Separate or individual creditors have
capital of their contributions preference in separate or individual properties
4. Those to general partners other than for 3. Anything left from either goes to the other.
capital and profits
365
Q: What are the rights of a partner where A:

dissolution is not in contravention of the 1. Right of a lien on, or retention of, the surplus of
agreement? partnership property after satisfying
partnership liabilities for any sum of money
A: Unless otherwise agreed, the rights of each paid or contributed by him;
partner are as follows: 2. Right of subrogation in place of partnership
1. To have the partnership property applied creditors after payment of partnership
to discharge the liabilities of partnership; liabilities; and
and 3. Right of indemnification by the guilty partner
2. To have the surplus, if any, applied, to pay against all debts and liabilities of the
in cash the net amount owing to the partnership.
respective partners.
Q: How are the accounts settled between
Q: What are the rights of a partner where partners?
dissolution is in contravention of the agreement?
A:
A: The rights of a partner vary depending upon 1. Assets of the partnership include:
whether he is the innocent or guilty partner. a. Partnership property (including goodwill)
1. Rights of partner who has not caused the b. Contributions of the partners
dissolution wrongfully: 2. Order of application of the assets:
a. To have partnership property applied a. First, those owing to partnership creditors
for the payment of its liabilities and b. Second, those owing to partners other
to receive in cash his share of the than for capital and profits such as loans
surplus given by the partners or advances for
b. To be indemnified for the damages business expenses
caused by the partner guilty of c. Third, those owing for the return of the
wrongful dissolution capital contributed by the partners
c. To continue the business in the same d. Fourth, the share of the profits, if any,
name during the agreed term of the due to each partner
partnership, by themselves or jointly
with others Q: A partnership was formed with Magdusa as the
d. To possess partnership property manager. During the existence of the partnership,
should they decide to continue the two partners expressed their desire to withdraw
business from the firm. Magdusa determined the value of
2. Rights of partner who has wrongfully the partners share which were embodied in the
caused the dissolution: document drawn in the handwriting of Magdusa
a. If the business is not continued by but was not signed by all of the partners. Later,
the other partners, to have the the withdrawing partners demanded for payment
partnership property applied to but were refused. Considering that not all partners
discharge its liabilities and to receive intervened in the distribution of all or part of the
in cash his share of the surplus less partnership assets, should the action prosper?
damages caused by his wrongful
dissolution A: No. A partner’s share cannot be returned
b. If the business is continued: without first dissolving and liquidating the
i. To have the value of his interest partnership, for the return is dependent on the
in the partnership at the time of discharge of creditors, whose claims enjoy
the dissolution, less any damage preference over those of the partner, and it is self-
caused by the dissolution to his evident that all members of the partnership are
co-partners, ascertained and interested in its assets and business, and are
paid in cash, or secured by bond entitled to be heard in the matter of the firm’s
approved by the court; and liquidation and distribution of its property. The
ii. To be released from all existing liquidation prepared by Magdusa not signed by the
and future liabilities of the other partners is not binding on them. (Magdusa v.
partnership Albaran, G.R. No. L-17526, June 30, 1962)
Q: What are the rights of injured partner where Q: What is partner’s lien?
partnership contract is rescinded?
366 CIVIL LAW TEAM

PARTNERSHIP
A: The right of every partner to have the 1. Winding up partner;

partnership property applied, to discharge 2. Surviving partner; and
partnership liabilities and surplus assets, if any, 3. Person or partnership continuing the business
distributed in cash to the respective partners, after
deducting what may be due to the partnership from Q: Emnace and Tabanao decided to dissolve their
them as partners. partnership in 1986. Emnace failed to submit the
statement of assets and liabilities of the
Q: Can a partner demand for his share during the partnership, and to render an accounting of the
existence of a partnership? partnership's finances. Tabanao’s heirs filed
against Emnace an action for accounting, etc.
A: No. A share in a partnership can be returned only Emnace counters, contending that prescription has
after the completion of the latter's dissolution, set in. Decide.
liquidation and winding up of the business.
A: Prescription has not yet set in. Prescription of
Since the capital was contributed to the the said right starts to run only upon the dissolution
partnership, not to partners, it is the partnership of the partnership when the final accounting is
that must refund the equity of the retiring partners. done. Contrary to Emnace’s protestations,
Since it is the partnership, as a separate and distinct prescription had not even begun to run in the
entity that must refund the shares of the partners, absence of a final accounting. The right to demand
the amount to be refunded is necessarily limited to an accounting accrues at the date of dissolution in
its total resources. In other words, it can only pay the absence of any agreement to the contrary.
out what it has in its coffers, which consists of all its When a final accounting is made, it is only then that
assets. (Villareal v. Ramirez, G.R. No. 144214, July prescription begins to run. (Emnace v. CA, G.R. No.
14, 2003) 126334, Nov. 23, 2001)
Q: What are the effects when the business of a Q: Pauline, Patricia and Priscilla formed a business
dissolved partnership is continued? partnership for the purpose of engaging in neon
advertising for a term of five (5) years. Pauline
A: subsequently assigned to Philip her interest in the
1. Creditors of old partnership are also creditors partnership. When Patricia and Priscilla learned of
of the new partnership who continues the the assignment, they decided to dissolve the
business of the old one without liquidation of partnership before the expiration of its term as
the partnership affairs. they had an unproductive business relationship
2. Creditors have an equitable lien on the with Philip in the past. On the other hand,
consideration paid to the retiring/deceased unaware of the move of Patricia and Priscilla but
partner by the purchaser when sensing their negative reaction to his acquisition of
retiring/deceased partner sold his interest Pauline’s interest, Philip simultaneously petitioned
without final settlement with creditors. for the dissolution of the partnership.
3. Rights of retiring/estate of deceased partner: Is the dissolution done by Patricia and Priscilla
a. To have the value of his interest without the consent of Pauline or Philip valid?
ascertained as of the date of dissolution; Explain.
and
b. To receive as ordinary creditor the value A: Under Art 1830(1)(c), the dissolution by Patricia
of his share in the dissolved partnership and Priscilla is valid and did not violate the contract
with interest or profits attributable to use of partnership even though Pauline and Philip did
of his right, at his option. not consent thereto. The consent of Pauline is not
necessary because she had already assigned her
Note: The right to demand on accounting of the value interest to Philip. The consent of Philip is also not
of his interest accrues to any partner or his legal necessary because the assignment to him of
representative after dissolution in the absence of an Pauline’s interest did not make him a partner,
agreement to the contrary. under Art. 1813.
Prescription begins to run only upon the dissolution of Does Philip have any right to petition for the
the partnership, when the final accounting is done. dissolution of the partnership before the
expiration of its specified term? Explain.
Q: Who are the persons required to render an
account?
A:
367
A: No, Philip has no right to petition for dissolution Q: Does a limited partnership have a personality
because he does not have the standing of a partner. separate and distinct from that of the partners?
(Art. 1813) (1995 Bar Question) What are the consequences of such?
VI. LIMITED PARTNERSHIP A: Yes. The personality of a limited partnership

being different from that of its members, it must,
A. DEFINITION on general principle, answer for, and suffer, the
consequence of its acts as such an entity capable of
Q: What is limited partnership? being the subject of rights and obligations. If the
limited partnership failed to pay its obligations, this
A: One formed by two or more persons having as partnership must suffer the consequences of such a
members one or more general partners and one or failure, and must be adjudged insolvent. (Campos
more limited partners, the latter not being Rueda & Co. v. Pacific Commercial Co., et. al, G.R.
personally liable for partnership debts (Art. 1843) No. L- 18703, Aug. 28, 1922)
Q: What are the characteristics of limited Q: When is the certificate or articles of limited
partnership? partnership cancelled?
A: A:
1. It is formed by compliance with the statutory 1. When the partnership is dissolved
requirements. 2. When all the limited partners ceased to be
2. One or more general partners control the such (Art. 1864)
business and are personally liable to creditors.
3. One or more limited partners contribute to the Q: When may a certificate or articles of limited
capital and share in the profits but do not partnership be amended?
participate in the management of the business
and are not personally liable for partnership A:
obligations beyond their capital contributions. 1. It must fall under the following changes and
4. The limited partners may ask for the return of conditions:
their capital contributions under conditions a. There is a change in the name of the
prescribed by law. partnership or in the amount or character
5. Partnership debts are paid out of common of the contribution of any limited partner
fund and the individual properties of general b. A person is substituted as a limited
partners partner
c. An additional limited partner is admitted
B. HOW LIMITED PARTNERSHIP IS d. A person is admitted as a general partner
FORMED/AMENDED e. A general partner retires, dies, becomes
insolvent or insane, or is sentenced to
Q: What are the essential requirements for the civil interdiction and the business is
formation of limited partnership? continued under Article 1860
f. There is a change in the character of the
A: business of the partnership
1. Certificate of articles of limited partnership g. There is a false or erroneous statement in
which states the matters enumerated in Art. the certificate
1844, must be signed and sworn; and h. There is a change in the time as stated in
2. Certificate must be filed for record in the office the certificate for the dissolution of the
of the SEC. partnership or for the return of a
contribution
Note: Strict compliance with legal requirements is not i. A time is fixed for the dissolution of the
necessary. It is sufficient that there is substantial partnership, or the return of a
compliance in good faith. If there is no substantial contribution, no time having been
compliance, the partnership becomes general specified in the certificate
partnership as far as third persons are concerned, in j. The members desire to make a change in
which the member are liable as general partners. (Jo any other statement in the certificate in
Chun v. Pacific Commercial Co., G.R. No. 19892, Sept. order that it shall accurately represent
6, 1923)
the agreement among them (Art. 1864)
2. Must be signed and sworn to by all of the
members including the new members if some
368 CIVIL LAW TEAM

PARTNERSHIP
added; in case of substitution, the assigning general partner unless authorized in the
limited partner must also sign. certificate.
3. Must be recorded in the SEC
PARTNERSHIP TORT
LIMITED PARTNER
Q: When is there a partnership tort?
Q: What are the liabilities of a limited partner?
A: Where:
A: 4. by any wrongful act or omission of any
AS CREDITOR AS TRUSTEE partner, acting in the ordinary course of
Specific property stated as business of the partnership or with
Deficiency in
contributed but not yet authority of his co-partners, loss or injury
contribution
contributed/ wrongfully returned is caused to any person, not being a
Money/other property wrongfully partner in the partnership;
Unpaid
paid/ conveyed to him on account 5. one partner, acting within the scope of his
contribution
of his contribution apparent authority, receives money or
property from a third person, and
Q: What transactions are allowed or prohibited in misapplies it; or
a limited partnership? 6. the partnership, in the course of its
business, receives money or property,
A: and it is misapplied by any partner while it
1. Allowed is in the custody of the partnership.
a. Granting loans to partnership
b. Transacting business with partnership Note: Partners are solidarily liable with the partnership for
c. Receiving pro rata share of partnership any penalty or damage arising from a partnership tort.
assets with general creditors if he is not
also a general partner C. RIGHTS AND OBLIGATIONS OF A LIMITED
2. Prohibited PARTNER
a. Receiving/holding partnership property as
collateral security Q: What are the specific rights of a limited
b. Receiving any payment, conveyance, partner?
release from liability if it will prejudice
rd A: To:
right of 3 persons
1. have partnership books kept at principal
Note: The prohibition is not absolute because there is place of business;
no prohibition if the partnership assets are sufficient 2. inspect/copy books at reasonable hours;
to discharge partnership liabilities to persons not 3. have on demand true and full information
claiming as general or limited partners. of all things affecting partnership;
4. have formal account of partnership affairs
Q: When does a general partner need consent or whenever circumstances render it just
ratification of all the limited partners? and reasonable;
5. ask for dissolution and winding up by
A: When he: decree of court;
1. does any act in contravention of the 6. receive share of profits/other
certificate; compensation by way of income; and
2. does any act which would make it 7. receive return of contributions, provided
impossible to carry on the ordinary the partnership assets are in excess of all
business of the partnership; its liabilities.
3. confesses judgment against partnership;
4. possesses partnership property / assigns Q: Who is a substituted limited partner?
rights in specific partnership property
other than for partnership purpose; A: A person admitted to all the rights of a limited
5. admits person as general partner; partner who has died or assigned his interest in the
6. admits person as limited partner – unless partnership
authorized in certificate; or
7. continues business with partnership Q: What are the rights and liabilities of a
property on death, retirement, civil substituted limited partner?
interdiction, insanity or insolvency of
369
A: GR: He has all the rights and powers and is partners on account of their contributions, have
subject to all the restrictions and liabilities of his been paid or there remains property of the
assignor. partnership sufficient to pay them and the
certificate is cancelled or so amended as to set
XPN: Those liabilities which he was ignorant of forth the withdrawal or reduction:
at the time that he became a limited partner 1. on the dissolution of the partnership;
and which could not be ascertained from the 2. upon the arrival of the date specified in
certificate the certificate for the return; or
3. after the expiration of 6 month notice in
Q: What are the requirements for the admission of writing given by him to the other partners
a substituted limited partner? if no time is fixed in the certificate for the
return of the contribution or for the
A: dissolution of the partnership.
1. All the members must consent to the assignee
becoming a substituted limited partner or the Note: Even if a limited partner has contributed
limited partner, being empowered by the property, he has only the right to demand and receive
certificate must give the assignee the right to cash for his contribution. The exceptions are:
become a limited partner; 1. When there is stipulation to the contrary in
2. The certificate must be amended in the certificate; or
accordance with Art. 1865; and 2. When all the partners (general and limited
3. The certificate as amended must be registered partners) consent to the return other than
in the form of cash
in the SEC.
Q: What are the liabilities of a limited partner?
Q: What is the basis of preference given to limited
partners over other limited partners?
1. To the partnership
A: Priority or preference may be given to some
A: Since limited partners are not principals in the
limited partners over other limited partners as to
transaction of a partnership, their liability as a rule,
the:
is to the partnership, not to the creditors of the
1. return of their contributions;
partnership. The general partners cannot, however
2. their compensation by way of income; or
waive any liability of the limited partners to the
3. any other matter.
prejudice of such creditors.
Note: In the absence of such statement in the
certificate, even if there is an agreement, all limited 2. To the partnership creditors and other
partners shall stand on equal footing in respect of partners
these matters.
A:
Q: What are the requisites for return of a. A limited partner is liable for partnership
contribution of a limited partner? obligations when he contributed services
instead of only money or property to the
A: partnership
1. All liabilities of the partnership have been paid b. When he allows his surname to appear in the
or if they have not yet been paid, the assets of firm name
the partnership are sufficient to pay such c. When he fails to have a false statement in the
liabilities; certificate corrected, knowing it to be false
2. The consent of all the members (general and d. When he takes part in the control of the
limited partners) has been obtained except business
when the return may be rightfully demanded; e. When he receives partnership property as
and collateral security, payment, conveyance, or
3. The certificate of limited partnership is release in fraud of partnership creditors
cancelled or amended f. When there is failure to substantially comply
with the legal requirements governing the
Q: When is the return of contribution of a limited formation of limited partnerships
partner a matter of right?
3. To separate creditors
A: When all liabilities of the partnership, except
liabilities to general partners and to limited A: As in a general partnership, the creditor of a
limited partner may, in addition to other remedies
370 CIVIL LAW TEAM

PARTNERSHIP
allowed under existing laws, apply to the proper 1. All the rights of a limited partner for the
court for a charging order subjecting the interest in purpose of settling his estate
the partnership of the debtor partner for the 2. To have the same power as the deceased had
payment of his obligation. (De Leon, Comments and to constitute his assignee as substituted
cases on Partnership, Agency and Trust, 2010, pp. limited partner.
306-307)
Q: What is the order of priority in the distribution
Q: What are the requisites for waiver or of assets during the dissolution of a limited
compromise of liabilities? partnership?
A: The waiver or compromise: A: In setting accounts after dissolution, the

1. is made with the consent of all partners; liabilities of the partnership shall be entitled to
and payment in the following order:
2. does not prejudice partnership creditors 1. Those to creditors, in the order of priority
who extended credit or whose claims as provided by law, except those to
arose before the cancellation or limited partners on account of their
amendment of the certificate. contributions, and to general partners
2. Those to limited partners in respect to
Q: When may a limited partner have the their share of the profits and other
partnership dissolved? compensation by way of income on their
contributions
A: 3. Those to limited partners in respect to the
1. When his demand for the return of his capital of their contributions
contribution is denied although he has a right 4. Those to general partners other than for
to such return; or capital and profits
2. When his contribution is not paid although he 5. Those to general partners in respect to
is entitled to its return because the other profits
liabilities of the partnership have not been 6. Those to general partners in respect to
paid or the partnership property is insufficient capital (Art. 1863)
for their payment.
Note: Subject to any statement in the certificate or to
Q: What is the effect of retirement, death, civil subsequent agreement, limited partners share in the
interdiction, insanity or insolvency of a partner? partnership assets in respect to their claims for capital,
and in respect to their claims for profits or for
A: compensation by way of income on their contribution
1. General partner - the partnership is dissolved respectively, in proportion to the respective amounts
(Art. 1860) unless the business is continued by of such claims.
the remaining general partners:
Q: Is limited partner, not a proper party to
a. Under the right stated in the certificate;
proceedings?
or
b. With the consent of all the partners.
A: GR: A limited partner is not a proper party to
2. Limited partner - the partnership is not
proceedings:
dissolved except all limited partners cease to
1. By a partnership
be such.
2. Against a partnership
Q: What are the rights of the
XPNs:
executor/administrator on the death of the
1. If he is also a general partner.
limited partner?
2. Where the object is to enforce a limited
partner’s right against or liability to the
A:
partnership. (Art. 1866)
SUMMARY OF RIGHTS AND OBLIGATIONS OF PARTNERS
GENERAL PARTNER LIMITED PARTNER

Rights
1. Right in specific partnership property 1. To have partnership books kept at principal place of
2. Interest in the partnership (share in the profits and business
surplus) 2. To inspect/copy books at reasonable hours
371
3. Right to participate in the management 3. To have on demand true and full information of all
4. Right to associate another person with him in his things affecting partnership
share without the consent of other partners (sub- 4. To have formal account of partnership affairs
partnership) whenever circumstances render it just and reasonable
5. Right to inspect and copy partnership books at any 5. To ask for dissolution and winding up by decree of
reasonable hour. court
6. Right to a formal account as to partnership affairs 6. To receive share of profits/other compensation by
(even during existence of partnership) way of income
a. if he is wrongfully excluded from partnership 7. To receive return of contributions, provided the
business or possession of its property by his co- partnership assets are in excess of all its liabilities
partners.
b. if right exists under the terms of any agreement.
c. as provided in Art. 1807
d. whenever the circumstances render it just and
reasonable.
Obligations
Obligations of partners among themselves
1. Contribution of property
To the partnership
2. Contribution of money and money converted to
personal use
Since limited partners are not principals in the transaction
3. Prohibition in engaging in business for himself
of a partnership, their liability as a rule, is to the
4. Contribute additional capital
partnership, not to the creditors of the partnership. The
5. Managing partner who collects debt
general partners cannot, however waive any liability of the
6. Partner who receives share of partnership credit
limited partners to the prejudice of such creditors.
7. Damages to partnership
8. Render information
9. Accountable as fiduciary
Obligations of partners to 3rd persons
1. Every partnership shall operate under a firm name.

Persons who include their names in the partnership
name even if they are not members shall be liable as a
partner
2. All partners shall be liable for contractual obligations
of the partnership with their property, after all
partnership assets have been exhausted:
To the partnership creditors and other partners
a. Pro rata
b. Subsidiary
1. A limited partner is liable for partnership obligations
3. Admission or representation made by any partner
when he contributed services instead of only money
concerning partnership affairs within the scope of his
or property to the partnership
authority is evidence against the partnership
2. When he allows his surname to appear in the firm
4. Notice to partner of any matter relating to partnership
name
affairs operates as notice to partnership except in
3. When he fails to have a false statement in the
case of fraud:
certificate corrected, knowing it to be false
a. Knowledge of partner acting in the particular
4. When he takes part in the control of the business
matter acquired while a partner
5. When he receives partnership property as collateral
b. Knowledge of the partner acting in the particular
security, payment, conveyance, or release in fraud of
matter then present to his mind
partnership creditors
c. Knowledge of any other partner who reasonably
6. When there is failure to substantially comply with the
could and should have communicated it to the
legal requirements governing the formation of limited
acting partner
partnerships
5. Partners and the partnership are solidarily liable to 3rd
persons for the partner's tort or breach of trust
6. Liability of incoming partner is limited to:
a. His share in the partnership property for existing
obligations
b. His separate property for subsequent obligations
7. Creditors of partnership are preferred in partnership
property & may attach partner's share in partnership
assets
372 CIVIL LAW TEAM

PARTNERSHIP
Other obligations To separate creditors
1. Duty to render on demand true and full information As in a general partnership, the creditor of a limited
affecting partnership to any partner or legal partner may, in addition to other remedies allowed under
representative of any deceased partner or of any existing laws, apply to the proper court for a charging order
partner under legal disability. subjecting the interest in the partnership of the debtor
2. Duty to account to the partnership as fiduciary. partner for the payment of his obligation.
AGENCY a. General – agency comprises all the

business of the principal (Art. 1876)
I. DEFINITION OF AGENCY b. Special – agency comprises one or more
specific transactions (Art. 1876)
Q: What is contract of agency? 4. As to authority conferred
a. Couched in general terms – agency is
A: By contract of agency a person binds himself to created in general terms and is deemed
render some service or to do something in to comprise only acts in the name and
representation or on behalf of another, with the representation of the principal (Art. 1877)
consent or authority of the latter. (Art. 1868) b. Couched in specific terms – agency
authorizing only the performance of a
Q: What are the characteristics of a contract of specific act or acts (Art. 1876)
agency? 5. As to nature and effects
a. Ostensible or representative – agent acts
A: BUNC-PP in the name and representation of the
1. Bilateral – If it is for compensation principal (Art. 1868)
because it gives rise to reciprocal rights b. Simple or commission – agent acts in his
and obligations own name but for the account of the
2. Unilateral – If gratuitous, because it principal (De Leon, Comments and Cases
creates obligations for only one of the on Partnership, Agency and Trusts, 2010,
parties p. 371)
3. Nominate
4. Consensual – It is perfected by mere Q: What are the essential elements of an agency?
consent
5. Principal A: CORS
6. Preparatory – It is entered into as a 1. Consent (express or implied) of the
means to an end (De Leon, Comments and parties to establish the relationship;
Cases on Partnership, Agency and Trusts,
2010, p. 325) Note: A person may express his consent (1)
by contract (Art. 1868), orally or in writing,
Q: What are the classifications of agency? (2) by conduct (Art. 1869) or (3) by
ratification (Art. 1910) or the consent may
A: arise (4) by presumption or operation of
1. As to manner of creation law. (De Leon, Comments and Cases on
a. Express – agent has been actually Partnership, Agency and Trusts, 2010, p.
329)
authorized by the principal, either orally
or in writing (Art. 1869)
2. The Object is the execution of a juridical
b. Implied – agency is implied from the acts
act in relation to third persons;
of the principal, from his silence or lack of
3. The agent acts as a Representative and
action or his failure to repudiate the
not for himself; and
agency, knowing that another person is
4. The agent acts within the Scope of his
acting on his behalf without authority
authority. (De Leon, Comments and Cases
(Art. 1869)
on Partnership, Agency and Trusts, 2010,
2. As to character
p. 329)
a. Gratuitous – agent receives no
compensation for his services (Art. 1875)
b. Onerous – agent receives compensation
Q: Are there any formal requirements in the
for his services (Art. 1875)
appointment of an agent?
3. As to extent of business of the principal
373
A: GR: There are no formal requirements governing A: It is fiduciary in nature that is based on trust and
the appointment of an agent. confidence. (De Leon, Comments and Cases on
Partnership, Agency and Trusts, 2010, p. 337)
XPN: When the law requires a specific form.
i.e. – when sale of land or any interest therein Q: What are the qualifications of a principal?
is through an agent, the authority of the latter
must be in writing; otherwise, the sale shall be A:
void (Art. 1874) 1. Natural or juridical person
2. He must have capacity to act
Q: What is the rule on the implied acceptance of
the agency? Note: If a person is capacitated to act for himself or his
own right, he can act through an agent.
A:
1. Between persons who are present – the Insofar as third persons are concerned, it is enough
acceptance of the agency may also be implied that the principal is capacitated. But insofar as his
of the principal delivers his power of attorney obligations to his principal are concerned, the agent
to the agent and the latter receives it without must be able to bind himself.
any objection. (Art. 1871)
Q: What is the term “joint principals”?
2. Between persons who are absent – the
acceptance of the agency cannot be implied
A: Two or more persons appoint an agent for a
from the silence of the agent except:
common transaction or undertaking. (Art. 1915)
a. When the principal transmits his power of
attorney to the agent, who receives it
Q: What are the requisites for solidary liability of
without any objection;
joint principals?
b. When the principal entrusts to him by
letter or telegram a power of attorney
A:
with respect to the business in which he is
1. There are two or more principals;
habitually engage as an agent and he did
2. They have all concurred in the appointment of
not reply to the letter or telegram. (Art.
the same agent; and
1872)
3. Agent is appointed for a common transaction
Note: Acceptance by the agent may also be express or or undertaking. (De Leon, Comments and Cases
implied from his acts which carry out the agency, or on Partnership, Agency and Trusts, 2010, p.
from his silence or inaction according to the 569)
circumstances. (Art. 1870)
Q: What are the kinds of agents?
Q: Who are the parties to a contract of agency?
Distinguish. A:
1. Universal agent – one employed to do all acts
A: which the principal may personally do, and
1. Principal – One whom the agent represents which he can lawfully delegate to another the
and from whom he derives authority; he is the power of doing (De Leon, Comments and Cases
one primarily concerned in the contract. on Partnership, Agency and Trusts, 2010, p.
2. Agent – One who represents the principal in a 403)
transaction or business. 2. General agent – one employed to transact all
business of the principal, or all the business of
Note: From the time the agent acts or transacts a particular kind or in a particular place, do all
the business for which he has been employed in acts connected with a particular trade,
representation of another, a third party is added business or employment (De Leon, Comments
to the agency relationship – the party with whom and Cases on Partnership, Agency and Trusts,
the business is transacted. (De Leon, Comments 2010, p. 403)
and Cases on Partnership, Agency, and Trust, 3. Special or particular agent – one authorized to
2010 ed., 328) do act in one or more specific transactions or
to do one or more specific acts or to act upon
Q: What is the nature of the relationship between a particular occasion (De Leon, Comments and
principal and agent? Cases on Partnership, Agency and Trusts, 2010,
p. 404)
Q: Can agency be created by necessity?
374 CIVIL LAW TEAM

AGENCY
resell it. If B were an agent, he is not bound to pay

A: No. What is created is additional authority in an the price if he is unable to resell it. As a buyer,
agent appointed and authorized before the ownership passed to B upon delivery and, under
emergency arose. Art. 1504, the thing perishes for the owner. Hence,
B must still pay the price. (1999 Bar Question)
Q: What are the requisites for the existence of
agency by necessity? Q: Is mere representation of an alleged agent
sufficient to prove the existence of a principal-
A: ARIA agent relationship?
1. Real existence of emergency
2. Inability of the agent to communicate A: No. The declarations of the agent alone are
with the principal generally insufficient to establish the fact or extent
3. Exercise of Additional authority is for the of agency. It is a settled rule that the persons
principal’s protection dealing with the assumed agent are bound at their
4. Adoption of fairly reasonable means, peril, if they would hold the principals liable, to
premises duly considered ascertain not only the fact of agency but also the
nature and extent of authority, and in case either is
Q: What is the rule regarding double agency? controverted, the burden of proof is upon them to
establish it. (Spouses Yu v. Pan American World
A: GR: It is disapproved by law for being against Airways, Inc., G.R. No. 123560, Mar. 27, 2000)
public policy and sound morality.
Q: A foreign manufacturer of computers and a
XPN: Where the agent acted with full Philippine distributor entered into a contract
knowledge and consent of the principals. whereby the distributor agreed to order 1,000
units of the manufacturer's computers every
Q: What are the acts that a principal may delegate month and to resell them in the Philippines at the
to his agent? manufacturer's suggested prices plus 10%. All
unsold units at the end of the year shall be bought
A: GR: What a man may do in person, he may do back by the manufacturer at the same price they
thru another. were ordered. The manufacturer shall hold the
distributor free and harmless from any claim for
XPNs: defects in the units. Is the agreement one for sale
1. Personal acts – personal performance is or agency?
required by law or public policy or the
agreement of the parties, the doing of the A: The contract is one of agency not sale. The
act by a person on behalf of another does notion of sale is negated by the following indicia:
not constitute performance by the latter. (1) the price is fixed by the manufacturer with the
2. Criminal acts or acts not allowed by law – 10% mark-up constituting the commission; (2) the
an attempt to delegate an act to another manufacturer reacquires the unsold units at exactly
authority to do an act which, if done by the same price; and (3) warranty for the units was
the principal would be illegal, is void. (De borne by the manufacturer. The foregoing indicia
Leon, Comments and Cases on negate sale because they indicate that ownership
Partnership, Agency and Trusts, 2010, pp. over the units was never intended to transfer to the
334-335) distributor. (2000 Bar Question)
Q: A granted B the exclusive right to sell his brand Q: Distinguish agency from guardianship.
of Maong pants in Isabela, the price for his
merchandise payable within 60 days from delivery, A:
and promising B a commission of 20% on all sales. AGENCY GUARDIANSHIP
After the delivery of the merchandise to B but Agent represents a Guardian represents an
before he could sell any of them, B’s store in capacitated person incapacitated person
Isabela was completely burned without his fault, Agent derives
Guardian derives authority
together with all of A's pants. Must B pay A for the authority from the
from the court
lost pants? Why? principal
Agent is appointed by
Guardian is appointed by
A: The contract between A and B is a sale not an the principal and can
the court, and stands in
agency to sell because the price is payable by B be removed by the
loco parentis
upon 60 days from delivery even if B is unable to latter
375
Agent is subject to Guardian is not subject to cestui que trust

directions of the the directions of the ward, Agency is really a Trust may be the result of
principal but must act for the ward’s contractual relation a contract, it may also be
benefit created by law
Agent can make the Guardian has no power to
principal personally impose personal liability on II. POWERS
liable the ward
Q: What are the kinds of agency as to extent of
Q: Distinguish agency from judicial administration. powers conferred?
A: A: An agency may be couched in general terms or
AGENCY JUDICIAL ADMINISTRATION couched in specific terms. (Art. 1869)
Agent is appointed Judicial Administrator is
by the principal appointed by the court Q: What is an agency couched in general terms?
Represents not only the
Represents the
court but also the heirs and A: One which is created in general terms and is
principal
creditors of the estate deemed to comprise only acts of administration
Agent does not file Judicial Administrator files a (Art. 1877).
a bond bond
Agent is controlled His acts are subject to Q: When is an express power necessary?
by the principal specific orders from the
thru the agreement court A: It is necessary to perform any act of strict
ownership. (De Leon, Comments and Cases on
Q: Distinguish agency from lease of services. Partnership, Agency and Trusts, 2010, p. 408)
A: Q: What is meant by acts of administration?

AGENCY LEASE OF SERVICES
Agent represents the Worker or lessor of A: Those which do not imply the authority to
principal services does not alienate for the exercise of which an express power
represent his employer is necessary. (De Leon, Comments and Cases on
Relationship can be Partnership, Agency and Trusts, 2010, p. 408-409)
Generally, relationship
terminated at the will
can be terminated only
of either principal or Q: When is payment an act of administration?
at the will of both
agent
Agent exercises Employee has ministerial A: When payment is made in the ordinary course of
discretionary powers functions management. (Art. 1878; De Leon, Comments and
Cases on Partnership, Agency and Trusts, 2010, p.
Q: Distinguish agency from trust. 415)
A: Q: When are making gifts an act of administration?

AGENCY TRUST
Agent usually holds Trustee may hold legal A: The making of customary gifts for charity, or
no title at all title to the property those made to employees in the business managed
Agent usually acts in by the agent are considered acts of administration.
Trustee may act in his (Art. 1878; De Leon, Comments and Cases on
the name of the
own name Partnership, Agency and Trusts, 2010, p. 418)
principal
Trust usually ends by the
Agency usually may Q: P granted to A a special power to mortgage the
accomplishment of the
be terminated or former’s real estate. By virtue of said power, A
purposes for which it was
revoked any time secured a loan from C secured by a mortgage on
formed
Agency may not be said real estate. Is P personally liable for said loan?
Trust involves control
connected at all with
over property A: No. A special power to mortgage property is
property
limited to such authority to mortgage and does not
Agent has authority Trustee does not
bind the grantor personally to other obligations
to make contracts necessarily or even
contracted by the grantee in the absence of any
which will be binding possess such authority to
ratification or other similar act that would estop the
on his principal bind the trustor or the
376 CIVIL LAW TEAM

AGENCY
grantor from questioning or disowning such other Q: What are the distinctions between authority
obligations contracted by the grantee. and the principal’s instructions?
A. TO BIND PRINCIPAL A:
AUTHORITY INSTRUCTIONS
Q: When is the act of an agent binding to the Contemplates only a
principal? Sum total of the powers private rule of guidance
committed to the agent to the agent;
A: by the principal independent and distinct
1. When the agent acts as such without expressly in character
binding himself or does not exceed the limits Relates to the
of his authority. (Art. 1897) subject/business with
Refers to the manner or
2. If principal ratifies the act of the agent which which the agent is
mode of agent’s action
empowered to deal or act
exceeded his authority. (Art. 1898)
Limitations of authority Without significance as
3. Circumstances where the principal himself
are operative as against against those with
was, or ought to have been aware. (Art. 1899)
those who have/charged neither knowledge nor
4. If such act is within the terms of the power of
with knowledge of them notice of them
attorney, as written. (Art.1900 & 1902)
Not expected to be made
5. Principal has ratified, or has signified his known to those with
willingness to ratify the agent’s act. (Art 1901) whom the agent deals
Contemplated to be made (De Leon, Comments
Q: Does knowledge of a fact by an agent bind the known to third persons
and Cases on
principal? dealing with the agent
Partnership, Agency,
and Trust, 2010 ed. p.
A: GR: Knowledge of agent is knowledge of 344)
principal.
Q: When is the principal bound by the actual or
XPNs: apparent authority of the agent?
1. Agent’s interests are adverse to those of
the principal; A: The principal is bound by the acts of the agent on
2. Agent’s duty is not to disclose the his behalf, whether or not the third person dealing
information (confidential information); or with the agent believes that the agent has actual
3. Where the person claiming the benefit of authority, so long as the agent has actual authority,
the rule colludes with the agent to express or implied.
defraud the principal. (De Leon,
Comments and Cases on Partnership, Q: What is doctrine of apparent authority?
Agency, and Trust, 2010 ed. p. 344)
A: The principal is liable only as to third persons
Q: What are the effects of the acts of an agent? who have been led reasonably to believe by the
conduct of the principal that such actual authority
A: exists, although none has been given.
1. With authority
a. In principal’s name – valid Q: What are the distinctions between apparent
b. In his own name – not binding on the authority and authority by estoppel?
principal; agent and stranger are the only
parties, except regarding things belonging A:
to the principal or when the principal Apparent Authority Authority by Estoppel
ratifies the contract or derives benefit Arises when the principal,
therefrom That which is though by his culpable negligence,
2. Without authority not actually granted, permits his agent to
a. In principal’s name – unauthorized and the principal knowingly exercise powers not granted
unenforceable but may be ratified, in permits the agent to to him, even though the
which case, may be validated exercise or holds him principal may have no
retroactively from the beginning out as possessing notice or knowledge of the
b. In his own name – valid on the agent, but agent’s conduct
not on the principal Founded in conscious Founded on the principal’s
permission of acts negligence in failing
beyond the powers properly to supervise the
granted affairs of the agent
377
performance of a contract which he has made on

Q: Can an agent maintain an action against his principal's account does not, from this fact
persons with whom they contracted on behalf of alone, have any claim against the other party for
his principal? breach of the contract, either in an action on the
contract or otherwise. An agent who is not a
A: No. Agents are not a party with respect to that promisee cannot maintain an action at law against a
contract between his principal and third persons. As purchaser merely because he is entitled to have his
agents, they only render some service or do compensation or advances paid out of the purchase
something in representation or on behalf of their price before payment to the principal. (Uy v. CA,
principals. The rendering of such service did not G.R. No. 120465, Sept. 9, 1999)
make them parties to the contracts of sale executed
in behalf of the latter. B. EXCEPTION
The fact that an agent who makes a contract for his Q: When is the act of an agent not binding to the
principal will gain or suffer loss by the performance principal?
or nonperformance of the contract by the principal
or by the other party thereto does not entitle him A: If an agent acts in his own name. In such case,
to maintain an action on his own behalf against the the agent is the one directly bound in favor of the
other party for its breach. An agent entitled to person with whom he has contracted, as if the
receive a commission from his principal upon the transaction were his own. (Art. 1883)
SUMMARY OF RULES; ACTS OF AN AGENT
In behalf of the principal, within the scope of authority

1. Binds principal;
2. Agent not personally liable
Without or beyond scope of authority
Contract is unenforceable as against the principal but binds the agent to the third person
Binding on the principal when:

1. Ratified or
2. The principal allowed the agent to act as though he had full powers
Within the scope of authority but in the agent’s name

1. Not binding on the principal;
2. Principal has no cause of action against the 3rd parties and vice versa
Note: When the transaction involves things belonging to the principal:

Remedy of the principal – damages for agent’s failure to comply with the agency
Within the scope of the written power of attorney but agent has actually exceeded his authority according
to an understanding between him and the principal
1. Insofar as 3rd persons are concerned (not required to inquire further than the terms of the written
power, agent acted within scope of his authority;
2. Principal estopped
With improper motives
Motive is immaterial; as long as within the scope of authority, valid
With misrepresentations by the agent
1. Authorized – principal still liable
2. Beyond the scope of the agent’s authority
GR: Principal not liable
XPN: Principal takes advantage of a contract or receives benefits made under false representation of his
agent
Mismanagement of the business by the agent
1. Principal still responsible for the acts contracted by the agent with respect to 3rd persons;
2. Principal, however, may seek recourse from the agent
Tort committed by the agent
378 CIVIL LAW TEAM

AGENCY
Principal civilly liable so long as the tort is committed by the agent while performing his duties in furtherance
of the principal’s business
Agent in good faith but prejudices 3rd parties
Principal is liable for damages
creditors of the estate
III. EXPRESS VS. IMPLIED AGENCY Agent does not file Judicial Administrator files a
a bond bond
Q: Distinguish express and implied agency. Agent is controlled His acts are subject to
by the principal specific orders from the
A: thru the agreement court
EXPRESS AGENCY IMPLIED AGENCY Q: Distinguish agency from lease of services.

As to definition
One where the agent A:
has been actually
One which is implied from AGENCY LEASE OF SERVICES
authorized by the
the acts of the principal, Agent represents the Worker or lessor of
principal, either orally
or in writing principal services does not
As to authority represent his employer
When it is incidental to the Relationship can be
Generally, relationship
transaction or reasonably terminated at the will
can be terminated only
necessary to accomplish the of either principal or
at the will of both
When it is directly purpose of the agency, and agent
conferred by words therefore, the principal is Agent exercises Employee has ministerial
deemed to have actually discretionary powers functions
intended the agent to
possess Q: Distinguish agency from trust.
Q: Distinguish agency from guardianship. A:

AGENCY TRUST
A: Agent usually holds Trustee may hold legal
AGENCY GUARDIANSHIP no title at all title to the property
Agent represents a Guardian represents an Agent usually acts in
capacitated person incapacitated person Trustee may act in his
the name of the
Agent derives own name
Guardian derives authority principal
authority from the
from the court Trust usually ends by the
principal Agency usually may
Agent is appointed by
accomplishment of the
Guardian is appointed by be terminated or
the principal and can purposes for which it was
the court, and stands in revoked any time
be removed by the formed
loco parentis Agency may not be
latter Trust involves control
Agent is subject to Guardian is not subject to connected at all with
over property
directions of the the directions of the ward, property
principal but must act for the ward’s Trustee does not
Agent has authority
benefit necessarily or even
to make contracts
Agent can make the Guardian has no power to possess such authority to
principal personally impose personal liability
which will be binding
bind the trustor or the
liable on the ward on his principal
cestui que trust
Agency is really a Trust may be the result of
Q: Distinguish agency from judicial administration. contractual relation a contract, it may also be
created by law
A:
AGENCY JUDICIAL ADMINISTRATION IV. AGENCY BY ESTOPPEL
Agent is appointed Judicial Administrator is
by the principal appointed by the court Q: When is there an agency by estoppel?
Represents the Represents not only the
principal court but also the heirs and
379
A: When one leads another to believe that a certain rights as such

person is his agent, when as a matter of fact such is As to liability to third persons
not true, and the latter acts on such 1. If caused by the
misrepresentation, the former cannot disclaim principal, he is liable,
liability, for he has created an agency by estoppel. 1. The principal is but only if the 3rd
(Paras, Civil Code of the Philippines Annotated, Vol. always liable person acted on the
th 2. The agent is never misrepresentation;
V, p. 558, 6 ed)
personally liable 2. If caused by the agent
Q: What are the rules regarding estoppel in alone, only the agent is
liable
agency?
A: V. GENERAL vs. SPECIAL AGENCY

1. Estoppel of agent – One professing to act as
agent for another may be estopped to deny his Q: Distinguish a general agent from a special
agency both as against his asserted principal agent?
and the third persons interested in the
transaction in which he engaged. A:
General Agent Special Agent
2. Estoppel of principal Scope of Authority
a. As to agent – One who knows that Specific acts in
another is acting as his agent and fails to All acts connected with pursuance of particular
the business or instructions or with
repudiate his acts, or accepts the
employment in which he restrictions necessarily
benefits, will be estopped to deny the
is engaged implied from the act to
agency as against the other.
be done
b. As to sub-agent – To estop the principal
Nature of Service Authorized
from denying his liability to a third Involves continuity of
person, he must have known or be No continuity of service
service
charged with knowledge of the fact of the Extent to which the Agent may Bind the Principal
transaction and the terms of the May bind his principal by
agreement between the agent and sub- Cannot bind his principal
an act within the scope
agent. in a manner beyond or
of his authority although
c. As to third persons – One who knows that outside the specific acts
it may be contrary to the
another is acting as his agent or permitted which he is authorized to
latter’s special
perform
another to appear as his agent, to the instructions
injury of third persons who have dealt Termination of Authority
with the apparent agent as such in good Apparent authority does Duty imposed upon the
faith and in the exercise of reasonable not terminate by mere third party to inquire
prudence, is estopped to deny the revocation of his makes termination of the
agency. authority without notice relationship effective
to the third party upon revocation
3. Estoppel of third persons – A third person, Construction of Principal’s Instruction
having dealt with one as agent may be Strictly construed as they
Merely advisory in
estopped to deny the agency as against the limit the agent’s
nature
principal, agent, or third persons in interest. authority
4. Estoppel of the government – The government Q: Who is a factor/commission agent?

is neither estopped by the mistake or error on
the part of its agents. A: It is one engaged in the purchase and sale of
personal property for a principal, which, for this
Q: Distinguish implied agency from agency by purpose, has to be placed in his possession and at
estoppel. his disposal.
A: Q: Who is a broker?
IMPLIED AGENCY AGENCY BY ESTOPPEL
As to liability between principal and agent A: He is a middleman or intermediary who in behalf
Agent is a true agent, If caused by the “agent”, he of others and for a commission or fee negotiates
with rights and duties is not considered a true contracts/transactions relating to real or personal
of an agent agent, hence, he has no property.
380 CIVIL LAW TEAM

AGENCY
A: No. SPA is not required to be in writing and need

Q: What is factorage? not be notarized in order to be valid. (De Leon,
Comments and Cases on Partnership, Agency, and
A: It is the compensation of a factor or commission Trust, p. 443, 2005 ed)
agent.
Q: Is the intervention of a notary public required
Q: What is ordinary commission? for the validity of an SPA?
A: It is the compensation for the sale of goods A: GR: A power of attorney is valid although no
which are placed in the agent’s possession or at his notary public intervened in its execution. (Barretto
disposal. v. Tuason, G.R. Nos. L-36811, 36827, 36840, 36872,
Q: What is guarantee commission? Mar. 31, 1934) (De Leon, p. 443, 2005 ed)
A: It is the fee which is given in return for the risk XPN: When SPA is executed in a foreign country,
that the agent has to bear in the collection of it must be certified and authenticated according
credits. to the Rules of Court, particularly Sec. 25, Rule
132.
Q: Who is a del credere agent?
Note: When the special power of attorney is executed
A: He is the agent who guarantees payment of the and acknowledged before a notary public or other
customer’s account in consideration of the competent official in a foreign country, it cannot be
commission. (De, Leon, Comments and Cases on admitted in evidence unless it is certified as such in
Partnership, Agensy and Trust, 2010, p. 516) accordance with the foregoing provision of the rules by
a secretary of embassy or legation, consul general,
Note: The purpose of the guarantee commission is to consul, vice consul, or consular agent or by any officer
in the foreign service of the Philippines stationed in
compensate the agent for the risks he will have to bear
in the collection of the credit due the principal. (De, the foreign country in which the record is kept of said
public document and authenticated by the seal of his
Leon, Comments and Cases on Partnership, Agensy and
Trust, 2010, p. 516) office. (Medina v. Natividad, G.R. No. 177505, Nov. 27,
2008)
A del credere agent may sue in his name for the
The failure to have the special power of attorney
purchawse price in the event of non-performance by
(executed in a foreign country) authenticated is not
the buyer. (De, Leon, Comments and Cases on
Partnership, Agensy and Trust, 2010, p. 517) merely a technicality – it is a question of jurisdiction.
Jurisdiction over the person of the real party-in-
interest was never acquired by the courts. (Ibid.)
VI. AGENCY COUCHED IN GENERAL TERMS
Q: When is a special power necessary?
Q: What is an agency couched in general terms?
A: CALL MO SPRING COW
A: One which is created in general terms and is
1. to Create or convey real rights over
deemed to comprise only acts of administration
immovable property;
(Art. 1877).
2. Convey or Acquire immovable
3. to Loan or borrow money, unless the
VII. AGENCY REQUIRING SPECIAL POWER OF
latter act be urgent and indispensable for
ATTORNEY
the preservation of the things which are
under administration;
Q: What is special power of attorney (SPA)?
4. to Lease any real property to another
person for more than one year;
A: It is an instrument in writing by which one
5. to Make such Payments as are not usually
person, as principal, appoints another as his agent
considered as acts of administration;
and confers upon him the authority to perform
6. to Obligate principal as guarantor or
certain specified acts or kinds of acts on behalf of
surety
the principal; primary purpose is to evidence
7. to bind the principal to render some
agent’s authority to third parties within whom the
Service without compensation;
agent deals.
8. to bind the principal in a contract of
Partnership;
Q: Should SPA be in writing and notarized in order
9. to Ratify obligations contracted before
to be valid?
the agency
10. to Accept or repudiate an Inheritance
381
11. Effect Novation Q: Is the principal liable for the expenses incurred
12. to make Gifts, except customary ones for by the agent?
charity or those made to employees in
the business managed by the agent A: GR: Yes.
13. Compromise, Arbitration and Confession
of Judgment XPNs:
14. any Other act of strict dominion 1. If the agent acted in contravention of the
15. Waive an obligation gratuitously principal's instructions, unless principal
should wish to avail himself of of the
Q: What are the limitations to a special power of benefits derived from the contract;
attorney? 2. When the expenses were due to the fault
of the agent;
A: 3. When the agent incurred them with
1. A special power to sell excludes the power to knowledge that an unfavorable result
mortgage (Art. 1879) would ensue, if the principal was not
2. A special power to mortgage does not include aware thereof; or
the power to sell (ibid) 4. When it was stipulated that the expenses
3. A special power to compromise does not would be borne by the agent, or that the
authorize submission to arbitration (Art. 1880) latter would be allowed only a certain
sum. (Art. 1918)
VIII. AGENCY BY OPERATION OF LAW
Q: What is the liability of the principal regarding
Q: When is an agency created by operation of law? contracts entered into by the agent?
A: When the agent withdraws from the agency for a A: GR: The principal must comply with all the
valid reason, he must continue to act until the obligations which the agent may have contracted
principal has had a reasonable opportunity to take within the scope of his authority.
the necessary steps like the appointment of a new
agent to remedy the situation caused by the XPN: Where the agent exceeded his authority.
withdrawal. (Art. 1929)
XPN to the XPN: When the principal ratifies
IX. RIGHTS AND OBLIGATIONS OF PRINCIPAL it expressly or tacitly. (Art. 1910)
Q: What are the obligations of the principal to the Note: Even if the agent has exceeded his authority, the
agent? principal is solidarily liable with the agent if the former
allowed the latter to act as though he had full powers
A: To: CARIP (Art. 1911)
1. Comply with all obligations which the
agent may have contracted within the Q: CX executed a special power of attorney
scope of his authority [Art. 1910(1)]; authorizing DY to secure a loan from any bank and
2. Advance to the agent, should the latter so to mortgage his property covered by the owner’s
request, the sums necessary for the certificate of title. In securing a loan from M Bank,
execution of the agency (Art. 1912); DY did not specify that he was acting for CX in the
3. Reimburse the agent for all advance made transaction with the bank. Is CX liable for the bank
by him, even if the business or loan?
undertaking was not successful, provided
the agent is free from fault (Ibid.); A: While as a general rule the principal is not liable
4. Indemnify the agent for all damages for the contract entered into by his agent in case
which the execution of the agency may the agent acted in his own name without disclosing
have caused the latter without fault or his principal, such rule does not apply if the
negligence on his part (Art. 1913); and contract involves a thing belonging to the principal.
5. Pay the agent the compensation agreed In such case, the principal is liable under Art. 1883.
upon, or if no compensation was The contract is deemed made in his behalf. (Sy-Juco
specified, the reasonable value of the v. Sy-Juco, G.R. No. L-13471, Jan. 12, 1920) (2004
agent’s services. (De Leon, Comments and Bar Question)
Cases on Partnership, Agency, and Trust,
2010 ed. p.523) Q: What is the liability of the principal for tort
committed by the agent?
382 CIVIL LAW TEAM

AGENCY
1. Carry out the agency which he has

A: GR: Where the fault or crime committed by the accepted (Art. 1884)
agent is not in the performance of an obligation of 2. Answer for damages which through his
the principal, the latter is not bound by the illicit non-performance the principal may suffer
acts of the agent, even if it is done in connection (Ibid)
with the agency. 3. Finish the business already begun on the
death of the principal should delay entail
XPNs: any danger (Ibid)
1. Where the tort was committed by the 4. Observe the diligence of a good father of
agent because of defective instructions a family in the custody and preservation
from the principal or due to lack of of the goods forwarded to him by the
necessary vigilance or supervision on his owner in case he declines an agency, until
part; or an agent is appointed (Art. 1885)
2. When the tort consists in the
performance of an act which is within the Note: The owner shall as soon as practicable
powers of an agent but becomes criminal either appoint an agent or take charge of
only because of the manner in which the the goods. (Art. 1885)
agent has performed it; the principal is
5. advance the necessary Funds should
civilly liable to 3rd persons who acted in
there be a stipulation to do so except
good faith.
when the principal is insolvent (Art. 1886)
6. Act in accordance with the instructions of
Q: When is the principal not bound by the act of
the principal, and in default thereof, to do
the agent?
all that a good father of a family would
do, as required by the nature of the
A:
business (Art. 1887)
1. GR: When the act is without or beyond the
7. Not to carry out the agency of its
scope of his authority in the principal’s name.
execution would manifestly result in loss
or damage to the principal (Art. 1888)
XPNs:
8. Answer for damages if there being a
a. Where the acts of the principal have
rd conflict between his interests and those
contributed to deceive a 3 person in
of the principal, he should prefer his own
good faith
(Art. 1889)
b. Where the limitation upon the power
9. not to Loan to himself if he has been
created by the principal could not have
rd authorized to lend money at interest (Art.
been known by the 3 person
1890)
c. Where the principal has placed in the
10. render an Account of his transactions and
hands of the agent instruments signed
to deliver to the principal whatever he
by him in blank
may have received by virtue of the
d. Where the principal has ratified the
agency, even though it may not be owing
acts of the agent
to the principal (Art. 1891)
2. When the act is within the scope of the agent’s Note: Every stipulation exempting the agent
authority but in his own name, except when from the obligation to render an account
the transaction involves things belonging to shall be void. [Art. 1891(2)]
the principal. (Art. 1883)
11. Distinguish goods by countermarks and
Note: The limits of the agent’s authority shall not designate the merchandise respectively
be considered exceeded should it have been belonging to each principal, in the case of
performed in a manner more advantageous to a commission agent who handles goods
the principal than that specified by him. of the same kind and mark, which belong
to different owners (Art. 1904)
RESPONSIBILITIES AND OBLIGATIONS OF AN 12. be Responsible in certain cases for the
AGENT acts of the substitute appointed by him
(Art. 1892)
Q: What are the specific obligations of an agent to 13. Pay interest on funds he has applied to his
the principal? own use (Art. 1896)
A: CAFO-FAN-ALAD-RIP-BIR
383
14. Inform the principal, where an authorized XPN: Solidarity has been expressly stipulated.
sale of credit has been made, of such sale Each of the agents becomes solidarily liable
(Art. 1906) for:
15. Bear the risk of collection and pay the 1. the non-fulfillment of the agency; or
principal the proceeds of the sale on the 2. fault or negligence of his fellow agent.
same terms agreed upon with the
purchaser, should he receive also on sale, XPNs to the XPN:
a guarantee commission (Art. 1907) 1. When one of the other agents acts
16. Indemnify the principal for damages for beyond the scope of his authority –
his failure to collect the credits of his innocent agent is not liable.
principal at the time that they become 2. When the the fault or negligence of his
due (Art. 1908) fellow agents acted beyond the scope of
17. be Responsible for fraud or negligence their authority – innocent agent is not
(Art. 1909; De Leon, Comments and Cases liable. (Art. 1895)
on Partnership, Agency, and Trust, 2010
ed., pp.451-452) Note: An innocent agent has a right later on to
recover from the guilty or negligent agent. (Art.
Note: The court shall judge with more or 1217)
less rigor, the fault or negligence of the
agent, according to whether the agency was Q: What is the rule with regard to the execution of
or was not for compensation. the agency?
Q: In case of breach of loyalty, is the agent still A: GR: The agent is bound by his acceptance to
entitled to commission? carry out the agency, in accordance with the
instruction of the principal and is liable for damages
A: No, The forfeiture of the commission will take which, through his non-performance, the principal
place regardless of whether the principal suffers may suffer. (Art. 1884; Art.1887)
any injury by reason of such breach of loyalty. It
does not even matter if the agency is for a XPN: If its execution could manifestly result in
gratuitous one, or that the principal obtained better loss or damage to the principal. (Art. 1888)
results, or that usage and customs allow a receipt of
such a bonus. Q: What are the instances when the agent may
incur personal liability?
Note: An agent has an absolute duty to make a full
disclosure or accounting to his principal of all A:
transactions and material facts that may have some 1. Agent expressly bound himself;
relevance with the agency. (Domingo v. Domingo, G.R.
2. Agent exceeds his authority;
No. L-30573, Oct. 29, 1971)
3. Acts of the agent prevent the performance on
the part of the principal;
Q: When is the obligation to account not
4. When a person acts as agent without authority
applicable?
or without a principal; or
5. A person who acts as an agent of an
A:
incapacitated principal unless the third person
1. If the agent acted only as a middleman with
was aware of the incapacity at the time of the
the task of merely bringing together the
making of the contract. (De Leon, Comments
vendor and vendees;
and Cases on Partnership, Agency, and Trust,
2. If the agent informed the principal of the
2010 ed. pp. 484-490)
gift/bonus/profit he received from the
purchaser and his principal did not object
Q: What is the scope of the agent’s authority as to
thereto; or
third persons?
3. Where a right of lien exists in favor of the
agent.
A: It includes not only the actual authorization
conferred upon the agent by his principal but also
Q: What is the responsibility of two or more
that which is apparent or impliedly delegated to
agents appointed simultaneously?
him. (De Leon, Comments and Cases on Partnership,
Agency, and Trust, 2010 ed. p.493)
A: GR: Jointly liable.
384 CIVIL LAW TEAM

AGENCY
Q: Is the third person required to inquire into the A: No. The law on agency has no application in
authority of the agent? criminal cases. When a person participates in the
commission of a crime, he cannot escape
A: punishment on the ground that he simply acted as
1. Where authority is not in writing – Every an agent of another party. (Ong v. CA, G.R. No.
person dealing with an assumed agent must 119858, Apr. 29, 2003)
discover upon his peril, if he would hold the
principal liable, not only the fact of the agency X. IRREVOCABLE AGENCY
but the nature and extent of the authority of
the agent. Q: When is agency irrevocable?
2. Where authority is in writing – 3rd person is
not required to inquire further than the terms A:
of the written power of attorney. 1. If a bilateral contract depends upon it
2. if it is the means of fulfilling an obligation
Note: A third person with whom the agent wishes to already contracted
contract on behalf of the principal may require the 3. if partner is appointed manager and his
presentation of the power of attorney or the removal from the management is unjustifiable.
instructions as regards the agency. (Art. 1902) (Art 1927)
4. if it has been constituted in the common
RIGHTS OF AGENTS interest of the principal and the agent (Art.
1930)
Q: What are the instances when the agent may 5. Stipulation pour atrui (Art. 1311)
retain in pledge the object of the agency?
Q: How may the agent withdraw from the agency?
A:
1. If principal fails to reimburse the agent the A: The agent may withdraw from the agency by
necessary sums, including interest, which the giving due notice to the principal. If the latter
latter advanced for the execution of the should suffer any damage by reason of the
agency (Art. 1912); or withdrawal, the agent must indemnify him therefor,
2. If principal fails to indemnify the agent for all unless the agent should base his withdrawal upon
damages which the execution of the agency the impossibility of continuing the performance of
may have caused the latter, without fault or the agency without grave detriment to himself.
negligence on his part. (Art. 1913) (Art. 1928)
Q: What is the rule where two persons deal Note: The agent, even if he should withdraw from the
separately with the agent and the principal? agency for a valid reason, must continue to act until
the principal has had reasonable opportunity to take
A: If the two contracts are incompatible with each the necessary steps to meet the situation. (Art. 1929)
other, the one of prior date shall be preferred. This
is subject however to the rule on double sale under XI. MODES OF EXTINGUISHMENT
Art. 1544.
Q: What are the modes of extinguishing an
Note: Rules of preference in double sale agency?
1. Personal property – possessor in good faith
2. Real property A: EDWARD
a. Registrant in good faith
1. Expiration of the period
b. Possessor in good faith
2. Death, civil interdiction, insanity or
c. Person with the oldest title in good
faith (Art. 1544)
insolvency of principal or of the agent
3. Withdrawal by the agent
If agent acted in good faith, the principal shall be liable 4. Accomplishment of the object or the
for damages to the third person whose contract must purpose of the agency
be rejected. If agent is in bad faith, he alone shall be 5. Revocation
liable. (Art. 1917) 6. Dissolution of the firm or corporation
which entrusted or accepted the agency.
Q: Can a person acting as an agent escape criminal (Art. 1919)
liability by virtue of the contract of agency?
Note: The list is not exclusive; May also be
extinguished by the modes of extinguishment of
385
obligations in general whenever they are applicable, 3. a partner is appointed manager of a

like loss of the thing and novation. partnership and his termination is
unjustifiable (Art. 1927)
Agency may be terminated: (1) by agreement (No.s 1 4. it is created not only for the interest of
and 4); (2) by the subsequent acts of the parties which the principal but also for the interest of
may be either: (a) by the act of both parties or by third persons (Art. 1930)
mutual consent; or (b) by unilateral act of one of them
(Nos. 3 and 5; (3) by operation of law (Nos. 2 and 6).
XPN to the XPN: When the agent acts to
(De Leon, Comments and Cases on Partnership,
defraud the principal.
Agency, and Trust, 2010 ed., p. 574-575)
Q: What is “presumption of continuance of Q: What are the kinds of revocation?

agency”?
A: Revocation may either be express or implied. (De
A: It means that when once shown to have existed, Leon, Comments and Cases on Partnership, Agency,
an agency relation will be presumed to have and Trust, 2010 ed. p. 590; Art. 1920)
continued, in the absence of anything which shows
its termination. (De Leon, Comments and Cases on Q: How is agency impliedly revoked?
Partnership, Agency, and Trust, 2010 ed., p. 574))
A: Principal:
Q: What are the essential elements for 1. appoints a new agent for the same
business or transaction (Art. 1923);
continuance of agency?
2. directly manages the business entrusted
to the agent (Art. 1924); or
A: Both principal and agent must be:
3. after granting general power of attorney
1. Present
to an agent, grants a special one to
2. Capacitated
another agent which results in the
3. Solvent (De Leon, Comments and Cases on
revocation of the former as regards the
Partnership, Agency, and Trust, 2010 ed.,
special matter involved in the latter. (Art.
p. 575)
1926)
Q: Can the heirs continue the agency?
Note: A special power of attorney is not revoked
by a subsequent general power of attorney given
A: GR: No. to another agent, unless that the latter refers also
to the act authorized under the special power.
Ratio: The agency calls for personal services on (Tolentino, Civil Code of the Philippines, Vol. V, p.
the part of the agent since it is founded on a 436)
fiduciary relationship; rights and obligations
intransmissible. Q: How is agency revoked when the agent has
been appointed by two or more principals?
XPNs:
1. Agency by operation of law, or a A: Any one of the principals is granted the right to
presumed or tacit agency revoke the power of attorney without the consent
2. Agency is coupled with an interest in the of the others. (Art. 1927)
subject matter of the agency (e.g. power
of sale in a mortgage) Q: Is notice of revocation necessary?
REVOCATION A:
1. As to the agent – Express notice is not always
Q: Is a contract of agency revocable? necessary; sufficient notice if the party to be
notified actually knows, or has reason to know,
A: GR: Yes. Agency is revocable at will by the a fact indicating that his authority has been
principal. terminated/ suspended; revocation without
notice to the agent will not render invalid an
XPNs: It cannot be revoked if: act done in pursuance of the authority (De
1. a bilateral contract depends upon it Leon, Comments and Cases on Partnership,
2. it is the means of fulfilling an obligation Agency, and Trust, 2010 ed., p. 590)
rd
already contracted 2. As to 3 persons – Express notice is necessary
386 CIVIL LAW TEAM

AGENCY
a. As to former customers – Actual notice A: Eduardo and Zenaida entered into a partnership
must be given to them because they with regard to the NIA project. Also, Eduardo was
always assume the continuance of the present when Zenaida contracted with Manuel.
agency relationship (Art. 1873) Under Art. 1818, every partner is an agent of the
b. As to other persons – Notice by partnership for the purpose of its business and each
publication is enough (Art. 1922) one may separately execute all acts of
administration, unless, under Art. 1801, a
Note: There is implied revocation of the previous specification of their respective duties has been
agency when the principal appoints a new agent for agreed upon, or else it is stipulated that any one of
the same business or transaction, provided there is them shall not act without the consent of all the
incompatibility. But the revocation does not become others. (Mendoza v. Paule, G.R. No. 175885, Feb.
effective as between the principal and the agent until 13, 2009)
it is in some way communicated to the latter.
WITHDRAWAL BY THE AGENT
Q: What is the effect of the direct management by
the principal? Q: Can the agent withdraw from the agency?
A: GR: The agency is revoked for there would no A: Yes. The agent may renounce or withdraw from
longer be any basis for the representation the agency at any time, without the consent of the
previously conferred. But the principal must act in principal, even in violation of the latter’s
good faith and not merely to avoid his obligation to contractual rights; subject to liability for breach of
the agent. contract or for tort.
XPN: The only desire of the principal is for him Q: What are the kinds of withdrawal by the agent?
and the agent to manage the business together.
A:
Q: Richard sold a large parcel of land in Cebu to 1. Without just cause – The law imposes upon the
Leo for P100 million payable in annual installments agent the duty to give due notice to the
over a period of ten years, but title will remain principal and to indemnify the principal should
with Richard until the purchase price is fully paid. the latter suffer damage by reason of such
To enable Leo to pay the price, Richard gave him a withdrawal.
power-of-attorney authorizing him to subdivide
the land, sell the individual lots, and deliver the 2. With just cause – If the agent withdraws from
proceeds to Richard, to be applied to the purchase the agency for a valid reasons (Art. 1929) as
price. Five years later, Richard revoked the power when the withdrawal is based on the
of attorney and took over the sale of the impossibility of continuing with the agency
subdivision lots himself. Is the revocation valid or without grave detriment to himself (Art. 1928)
not? Why? or is due to a fortuitous event (Art. 1174), the
agent cannot be held liable. (De Leon,
A: The revocation is not valid. The power of Comments and Cases on Partnership, Agency,
attorney given to the buyer is irrevocable because it and Trust, 2010 ed., p. 575)
is coupled with an interest – the agency is the
means of fulfilling the obligation of the buyer to pay Note: Even if the agent withdraws from the
the price of the land (Art. 1927). In other words, a agency for a valid reason, he must continue to act
bilateral contract (contract to buy and sell the land) until the principal has had reasonable
is dependent on the agency. (2001 Bar Question) opportunity to take the necessary steps to meet
the situation. (Art. 1929)
Q: Eduardo executed a SPA authorizing Zenaida to
participate in the pre-qualification and bidding of DEATH
a NIA project and to represent him in all
transactions related thereto. It was granted to Q: What is the effect of death of a party to the
them. Zenaida leased Manuel’s heavy equipment contract of agency?
to be used for the NIA project. Manuel interposed
no objection to Zenaida’s actuations. Eduardo A: GR: The agency is terminated by the death of the
later revoked the SPA alleging that Zenaida acted principal even if the agency is for a definite period.
beyond her authority in contracting with Manuel (Art. !919)
under the SPA. Decide.
XPNs:
387
1. If it has been constituted in common

interest of the principal and the agent or Where the principal and agent are in close daily
in the interest of the third person who contact, the agent's authority to act will not
accepted the stipulation in his favor; (Art. terminate upon a change of circumstances if the
1930) or agent knows the principal is aware of the change
2. Anything done by the agent, without the and does not give him new instructions. (De Leon,
knowledge of the death of the principal or Comments and Cases on Partnership, Agency, and
on any other cause which extinguishes Trust, 2010 ed., p. 582)
the agency is valid and shall be fully
effective with respect to third persons
who may have contracted with him in
good faith.
Note: The death of the principal

extinguishes the agency; but in the same
way that revocation of the agency does not
prejudice third persons who have dealt with
the agent in good faith without notice of the
revocation (Art. 1921, 1922) such third
persons are protected where it is not shown
that the agent had knowledge of the
termination of the agency because of the
death of the principal or of any other cause
which extinguishes the agency. (Hererra v.
Luy Kim Guan, 1 SCRA 406)
Q: Is the sale of the land by the agent after the

death of the principal valid?
A: Article 1931 provides that an act done by the

agent after the death of the principal is valid and
effective if these two requisites concur:
1. that the agent acted without the
knowledge of the death of the principal;
and
2. that the third person who contracted with
the agent himself acted in good faith.
Good faith here means that the third person was

not aware of the death of the principal at the time
that he contracted with said agent. (Rallos v. Felix
Go Chan, G.R. No. L-24332, Jan. 31, 1978)
CHANGE OF CIRCUMSTANCES SURROUNDING

TRANSACTION
Q: What is the effect of a change of circumstance

surrounding the transaction?
A: GR: The authority of the agent is terminated.
XPNs:
1. If the original circumstances are restored
within a reasonable period of time, the
agent's authority may be revived;
2. Where the agent has reasonable doubts
as to whether the principal would desire
him to act, his authority will not be
terminated if he acts reasonably; or
388 CIVIL LAW TEAM

COMPROMISE
COMPROMISE conducted. Can the judge reduce the rate of

interest?
I. DEFINITION
A: Yes. The courts may mitigate the damage to be
Q: What is a compromise? paid by the losing party who has shown a sincere
desire for a compromise. (Art. 2031)
A: A compromise is a contract whereby the parties,
by making reciprocal concessions, avoid litigation or Q: Who should seek court’s approval before
put an end to one already commenced. (Art. 2028) entering into a compromise?
Q: What are the characteristics of a compromise? A: The court’s approval is necessary in compromises
entered into by:
A: 1. Guardians
1. Consensual 2. Parents
2. Reciprocal 3. Absentee’s represenatatives
3. Nominate 4. Administrators or executors of decedents’
4. Onerous estates. (Art. 2032)
5. Accessory (in the sense that a prior conflict is
pre supposed) Q: Can a juridical person enter into a
6. Once accepted, it is Binding on the parties, compromise?
provided there is no vitiated consent
(McCarthy v. Barber Steamship Lines, 45 Phil. A: Yes. Juridical persons may compromise only in
488). the form and with the requisites which may be
7. It is the Settlement of a controversy principally, necessary to alienate their property. (Art. 2033)
and is but merely incidentally, the settlement
of a claim. (Ibid) Q: Can there be a compromise on the criminal
aspect of a crime?
Q: What are the kinds of compromise?
A: None. There may be a compromise upon the civil
A: liability arising from an offense; but such
1. Judicial – to end a pending litigation compromise shall not extinguish the public action
2. Extrajudicial – to prevent a litigation from for the imposition of the legal penalty. (Art. 2034)
arising
II. VOID COMPROMISE
Q: What is the basic duty of a court whenever a
suit is filed? Q: When is a compromise void?
A: The court shall endeavor to persuade the A: CVA-FJF

litigants in a civil case to agree upon some fair 1. Civil status of person
compromise. (Art. 2029) 2. Validity of a marriage or a legal
separation
Q: What circumstances may a proceeding in a civil 3. Any ground for legal separation
action be suspended? 4. Future support
5. Jurisdiction of courts
A: 6. Future legitime (Art. 2035)
1. If willingness to discuss a possible compromise
is expressed by one or both parties; or III. EFFECT
2. If it appears that one of the parties, before the
commencement of the action or proceeding, Q: What is the effect if two parties enter into a
offered to discuss a possible compromise but compromise?
the other party refused the offer. (Art. 2030)
A: It has the effect of res judicata. A compromise
Q: X is indebted to Y in the amount of P50, 000 has upon the parties the effect and authority of res
with the stipulation that the same shall earn judicata. (Art. 2037)
interest at 40% per annum. When X failed to pay, Y
sued him. In an effort to settle the case, X offered Q: What requirement is necessary in order that a
to pay the principal but begged for the reduction compromise be executed?
of the interest. Y refused, hence, trial was
389
A: In order that a compromise may be executed, A: If one of the parties fails or refuses to abide by
there must be approval of the court. (Art 2037) the compromise, the other party may either
enforce the compromise, or regard it as rescinded
Q: When will a compromise become voidable? and insist upon his original demand. (Art 2041).
A: A compromise which there is a mistake, fraud, Q: What is the effect of a contract or a

violence, intimidation, undue influence or falsity of compromise even if it is disadvantageous to one of
documents. (Art. 2038) the parties?
Note: However, one of the parties cannot set up a A: It is still a valid one. It is a long established
mistake of fact as against the other if the latter, by doctrine that the law does not relieve a party from
virtue of the compromise, has withdrawn from a the effects of an unwise, foolish, or disastrous
litigation already commenced. (Art. 2038)
contract, entered into with all the required
formalities and with full awareness of what he is
Q: A and B entered into a compromise agreement.
doing. Courts have no power to relieve parties from
A week thereafter, B filed an action in court
obligations voluntarily assumed, simply because
seeking to annul the compromise agreement
their contracts turned out to be disastrous deals or
contending that it is one-sided. Is the action
unwise investments. (Tanda v. Aldaya, 89 Phil. 497;
proper?
Villacorte v. Mariano, 89 Phil. 341)
A: No, because where the compromise is instituted
It is a truism that “a compromise agreement
and carried through in good faith, the fact that
entered into by party-litigants, when not contrary
there was a mistake as to the law or as to the facts,
to law, public order, public policy, morals, or good
except in certain cases where the mistake was
customs is a valid contract which is the law
mutual and correctible as such in equity, cannot
between the parties themselves. It follows,
afford a basis for setting aside a compromise.
therefore, that a compromise agreement, not
Compromises are favored without regard to the
tainted with infirmity, irregularity, fraud or illegality
nature of the controversial compromise, and they
is the between the parties who are duty bound to
cannot be set aside because the event shows all the
abide by it and observe strictly its terms and
gains have been on one side. (Asong v. Intermediate
conditions”. (Esguerra v. CA, GR 119310, February
Appellate Court, May 12, 1989)
3, 1997))
Note: if a after a litigation has been decided by a final
judgment, a compromise should be agreed upon,
either or both parties being unaware of the existence
of the final judgment, the compromise may be
rescinded.
Ignorance of a judgment which may be revoked or set

aside is not a valid ground or attacking a compromise.
(Art. 2040)
Q: X and Y entered into a compromise agreement

whereby X respected the ownership of Y over a
part of a creek (now a fishpond). Is the agreement
valid?
A: No, because that is contrary to public policy and

the law. The creek is a property belonging to the
State; hence, it is part of public domain which is not
susceptible to private appropriation and
acquisition. (Maneclang v Intermediate Appellate
Court, 161 SCRA 469
Q: X and Y entered into a compromise agreement,

terminating a suit between them. X failed to
comply with the terms and conditions of the same.
What are the remedies of the aggrieved party?
390 CIVIL LAW TEAM

CREDIT TRANSACTIONS
CREDIT TRANSACTIONS a. Onerous – This is a contract where

there is consideration or burden
Q: What is credit? imposed like interest.
b. Gratuitous – This is a contract where
A: It is a person’s ability to borrow money by virtue there is no consideration or burden
of confidence or trust reposed in him by the lender imposed. (e.g. commodatum)
that he will pay what he may promise.
Q: What is bailment?
Q: What is credit transaction?
A: It is the delivery of a personal property for some
A: It refers to agreement based on trust or belief of particular use, or on mere deposit, upon a contract,
someone on the ability of another person to comply express or implied, that after the purpose has been
with his obligations. fulfilled, it shall be redelivered to the person who
delivered it, or otherwise dealt with according to his
Q: What do credit transactions include? directions, or kept until he reclaims it, as the case
may be.
A: They include all transactions involving loans of:
1. goods Note: Generally, no fiduciary relationship is created by
2. services bailment. No trustee-beneficiary relationship is
3. money extended to another either created.
gratuitously or onerously with a promise
to pay or deliver in the future. Q: What are the contractual bailments with
reference to compensation?
Q: What is security?
A:
A: It is something given, deposited, or serving as a 1. For the sole benefit of the bailor (gratuitous)
means to ensure the fulfillment or enforcement of e.g. gratuitous deposit, commodatum
an obligation or of protecting some interest in the
property. 2. For the sole benefit of the bailee (gratuitous)
e.g. commodatum, mutuum
Q: What are the kinds of credit transactions?
3. For the benefit of both parties (mutual-benefit
A: bailments)
1. As contracts of security
a. Contracts of real security – These are
e.g. deposit for compensaton, involuntary
contracts supported by collateral/s or deposit, pledge and bailments for hire:
burdened by an encumbrance on a. hire of things – temporary use
property such as mortgage and pledge. b. hire of service – for work or labor
b. Contracts of personal security – c. hire of carriage of goods – for carriage
These are contracts where d. hire of custody – for storage
performance by the principal debtor is
not supported by collateral/s but only I. LOAN
by a promise to pay or by the personal
undertaking or commitment of another Q: What is loan?
person such as in surety or guaranty.
2. As to their existence A: It is a contract where one of the parties delivers
a. Principal contracts – They can exist to another, either something not consumable so
alone. Their existence does not depend that the latter may use the same for a certain time
on the existence of another contract. and return it, in which case is called a
(e.g. commodatum and mutuum) commodatum; or money or other consumable
b. Accessory contracts – They have to things, upon the condition that the same amount of
depend on another contract. These the same kind and quality shall be paid, in which
accessory contracts depend on the case the contract is simply called a loan or mutuum
existence of a principal contract of
(Art. 1933, NCC)
loan. (e.g. guaranty proper, suretyship,
pledge, mortgage and antichresis)
Q: What are the kinds of loan?
3. As to their consideration
A:
391
1. Commodatum – where the bailor (lender) Q: Distinguish loan from:

delivers to the bailee (borrower) a non- Credit;
consumable thing so that the latter may Discount;
use it for a given time and return the Rent or lease;
same thing (i.e. identical thing) Barter; and
2. Mutuum or Simple Loan – where the Deposit.
bailor (lender) delivers to the bailee
(borrower) money or other consumable A:
thing subject to the condition that the CREDIT LOAN
latter shall pay same amount of the same Ability to borrow money Delivery by one party and the
kind and quality by virtue of the receipt by the other party of a
confidence reposed by given sum of money, upon an
Q: What may be the object of a contract of loan? the lender unto him that agreement, expressed or implied,
he will pay what he has to repay the sum loaned, with or
A: It depends upon the kind of loan. promised without interest
1. Commodatum – the object is generally DISCOUNT LOAN
not consumable; Interest is deducted in Interest is taken at the expiration
2. Mutuum – the object is consumable. advance of a credit
Always on double-name
Generally on a single-name paper
paper
Q: Distinguish consumable from non-consumable
RENT LOAN
things.
The owner of property
does not lose the
A: A thing is consumable when it cannot be used in
ownership; he loses his The thing loaned becomes the
a manner appropriate to its nature without being control over the property property of the obligor
consumed. (Art. 418) (e.g. food, firewood, gasoline) rented during the period
of contract
On the other hand, a non-consumable thing is a Landlord-tenant
movable thing which can be used in a manner Obligor-obligee relationship
relationship
appropriate to its nature without it being BARTER LOAN
consumed. (Art. 418) (e.g. car, television, radio) Subject matter are non- Subject matter is money or other
fungible things fungible things
Q: Distinguish fungible from non-fungible things. Always onerous May be gratuitous or onerous
There is a mutual sale
A: Fungible thing is one where the parties have resulting in the transfer in mutuum, there is transfer of
agreed to allow the substitution of the thing given of ownership on both ownership, there is no sale
or delivered with an equivalent thing (3 Manresa sides
58). Non-fungible thing is one where the parties in commodatum, the bailee
The parties do not return
have the intention of having the same identical returns the thing after the
the things subject of the
thing returned after the intended use (Ibid). expiration of the period agreed
exchange
upon
Note: As to whether a thing is consumable or not, it LOAN DEPOSIT
depends upon the nature of the thing. Safekeeping of the thing
Lender grants the
deposited. Generally, the
borrower the use of the
As to whether it is fungible or not, it depends upon the depositary cannot use the thing
thing learned
intention of the parties. deposited
Generally, borrower pays Depositor can demand the return
Fungibles are usually determined by number, weight at the end of the period of the thing deposited at any time
or measure. Compensation of credits Compensation not applicable to
applicable things deposited
Q: Are non-fungible things irreplaceable? Relationship is one of
Relationship is one of depositor
lender and borrower; or
and depositary
A: GR: Non-fungible things are irreplaceable. They creditor and debtor
must be returned to the lender after the purpose of
the loan had been accomplished. Q: What is barter?
XPN: Non-fungible things may be replaced by A: It is a contract whereby one of the parties binds
agreement of the parties. In such case, the himself to give one thing in consideration of the
contract is barter and not loan. other’s promise to give another thing. (Art. 1638,
NCC)
392 CIVIL LAW TEAM

CREDIT TRANSACTIONS
Q: What is the legal effect of an accepted promise XPN: Consumable goods may be the object of
to deliver something by way of mutuum or simple commodatum if the purpose is not to consume
loan? them such as when they were loaned merely for
ad ostentationem or exhibition purposes. After
A: It is binding upon the parties, but the mutuum or the affair, the same and identical goods shall be
simple loan itself shall not be perfected until the returned to the lender or bailor (Art. 1936,
delivery of the object of the contract (Art. 1934, NCC).
NCC).
Q: What may be the object of commodatum?
Q: What is the effect if the loan is for an unlawful
purpose? A: Both movable and immovable property may be
the object of commodatum. (Art. 1937, NCC)
A: If the loan is executed for illegal or immoral or
unlawful purpose or use, the contract is void. The Q: What are the kinds of commodatum?
bailor may immediately recover the thing before
any illegal act is committed and provided he is A:
innocent or in good faith (Arts. 1411 and 1412, 1. Ordinary commodatum – bailor cannot
NCC). just demand the return of the thing at
will, because there is a period agreed
A. COMMODATUM AND MUTUUM upon by the parties.
COMMODATUM 2. Precarium – one whereby the bailor may

demand the thing loaned at will in the
Q: What is commodatum? following cases:
a. if the duration of the contract
A: It is a contract where one of the parties (bailor) had not been stipulated;
delivers to another (bailee) something not b. if the use to which the thing
consumable so that the latter may use the same for loaned should be devoted had
a certain time and thereafter returns it. not been stipulated; or
c. if the use of the thing is merely
Q: What are the characteristics of a contract of by tolerance of the owner
commodatum?
Note: The word “owner” in Art. 1947 (2) is not proper
A: because the bailor need not be the owner of the thing.
1. Real contract – delivery of the thing loaned is (Pineda, Credit Transactions and Quasi contracts, p. 26,
necessary for the perfection of the contract 2006 ed, Art 1938)
2. Unilateral contract – once subject matter is
delivered, creates obligations on the part of Q: What are the consequences of the purely
only one of the parties (the borrower) personal character of commodatum?
3. Essentially gratuitous
4. Purpose is to transfer the temporary use of the A: GR: Commodatum is purely personal in character
thing loaned hence death of either bailor or bailee extinguishes
5. Principal contract the contract (Art. 1939, NCC)
6. Purely personal contract
XPN: By stipulation, the commodatum is
Q: What are the elements of commodatum? transmitted to the heirs of either or both
party.
A: There must be:
1. a bailee and bailor In case of lease of the thing subject of
2. the bailee acquires the use of the thing commodatum:
3. it must be gratuitous
GR: The bailee can neither lend nor lease the
Q: What could be the subject of commodatum? object of the contract to a third person.
A: GR: Under Art. 1933, the subject matter of XPN: Members of the bailee’s household
commodatum must be non-consumable because may make use of the thing loaned.
the thing must be returned.
393
Note: Members of the bailee’s household are substituted or replaced with another equivalent thing,
not considered as third persons. it is a fungible thing.
XPN to the XPN: Q: Distinguish commodatum from mutuum.

Contrary stipulation; or
Nature of the thing forbids such use. A:
COMMODATUM MUTUUM
Note: Household members are those who Object
permanently living or residing within the same Non-consumable (Non- Money or consumable
residence including the household helpers. fungible) thing
Cause
Q: Distinguish commodatum from lease. Gratuitous, otherwise it is a May or may not be
lease gratuitous
A: Purpose
COMMODATUM LEASE Use or temporary
Real contract Consensual possession of the thing
Object is a non- loaned but
Object may even be work
consumable (non
or service GR: not its fruit because the
fungible) thing
Essentially gratuitous Onerous bailor remains the owner
If the bailor is not aware Consumption
Provisions governing XPNs:
of the flaws, he is not
warranty are made use of the fruits is
liable for the resulting
applicable stipulated;
danger caused by such.
enjoyment of the fruits
MUTUUM is stipulated; or
enjoyment of the fruits
is incidental to its use
Q: What is mutuum?
Subject Matter
Real or personal property
A: It is a contract whereby one of the parties called
the “lender” delivers to another called the
Generally non-consumable
“borrower”, money or other consumable thing things but may cover Only personal property
subject to the condition that the same amount of consumables if the purpose
the same kind and quantity shall be paid. of the contract is for
exhibition.
Q: What are the characteristics of a contract of Ownership of the thing
mutuum? Retained by the bailor Passes to the debtor
Thing to be returned
A: Equal amount of the
1. Borrower acquires ownership of the thing. Exact thing loaned
same kind and quality
(Art 1953) Who bears risk of loss
2. If the thing loaned is money, payment must Bailor Debtor
be made in the currency which is legal When to return
tender in the Philippines and in case of In case of urgent need even
extraordinary deflation or inflation, the basis before the expiration of Only after the
of payment shall be the value of the term (the contract is in the expiration of the term
currency at the time of the creation of the meantime suspended)
obligation. (Art 1249 and 1250) Contract
3. If fungible thing was loaned, the borrower is Contract of
Contract of use
obliged to pay the lender another thing of consumption
the same kind, quality and quantity even if it
should change in value. Q: Distinguish mutuum from:
Lease; and
Note: Mere issuance of checks does not perfect the Barter. (see Article 1954)
contract of loan. It is only after the checks have been
encashed that the contact may be deemed perfected. A:
Further, when the movable thing delivered in loan is MUTUUM LEASE
not to be returned to the bailor, but may be Object is money or any Object may be any thing,
consumable (fungible) whether movable or
394 CIVIL LAW TEAM

CREDIT TRANSACTIONS
thing immovable, fungible or GR: Payment shall be made in the currency

non-fungible stipulated.
There is transfer of
No transfer of ownership
ownership XPN: If not, that currency which is legal tender
Creditor-debtor in the Philippines.
Lessor-lessee relationship
relationship
Unilateral Bilateral Note: In case of extraordinary inflation – value of
the currency at the time of the creation of the
MUTUUM BARTER obligation.
Subject matter is money Subject matter are non-
or other fungible things fungible things Consumable or fungible thing – debtor or
May be gratuitous or borrower shall pay another thing of the
Always onerous same kind, quality and quantity even if it
onerous
While in mutuum, there There is a mutual sale should change in value. If cannot be done,
is transfer of ownership, resulting in the transfer of the value of the thing at the time of its
there is no sale ownership on both sides perfection (delivery) shall be the basis of the
The money or payment of the loan. (Art 1955)
consumable thing
The parties do not return
loaned is not returned Q: May a person be imprisoned for non-payment
the things subject of the
but the same amount of debt?
exchange
of the same kind and
quantity shall be paid. A: No. This is because of the constitutional
provision under Article III, Section 3 of the 1987
Q: What is the cause in a simple loan? Constitution which expressly provides that no
person shall be imprisoned for non-payment of a
A: debt or poll tax.
1. As to the borrower – the acquisition of the
thing Q: Can estafa be committed by a person who
2. As to the lender – the right to demand the refuses to pay his debt or denies its existence?
return of the thing loaned or its equivalent
(Monte de Piedad v. Javier, CA, 36 Off. Gaz. A: No, because the debtor in mutuum becomes the
2176). owner of the thing delivered to him. If he consumed
or disposed of the thing, the act which is an act of
Q: What may be the object of mutuum? ownership is not misappropriation. Hence, there is
no basis for a criminal prosecution.
A: Money or fungible and consumable things.
Q: Does destruction of the thing loaned extinguish
Q: Can loan of money be payable in kind? one’s obligation in a simple loan?
A: Yes, if there is an agreement between the parties A: The destruction of the thing loaned does not
(Art. 1958, NCC). extinguish one’s obligation to pay because his
obligation is not to return the thing loaned but to
Q: When is a contract of simple loan perfected? pay a generic thing.
A: Real contracts, such as deposit, pledge and Q: Who are the parties to a commodatum?
commodatum, are not perfected until the delivery Distinguish.
of the object of the obligation. (Art. 1316, NCC)
While mutuum or simple loan is not mentioned, it A:
has the same character as commodatum. Hence, 1. Bailor/Comodatario/Commodans – the giver/
mutuum is also a real contract which cannot be lender - the party who delivers the possession
perfected until the delivery of the object. or custody of the thing bailed.
2. Bailee/Comodante/Commodatarius – the
Q: What are the governing rules on payment of recipient/ borrower - the party who receives
loan? the possession or custody of the thing thus
delivered.
A: It depends on the object of the contract of loan.
B. OBLIGATIONS OF THE BAILOR AND BAILEE
Money – governed by Arts. 1249 and 1250, NCC
BAILOR
395
OBLIGATIONS OF THE BAILOR Q: Can the bailor demand the return of thing
loaned anytime he pleases?
Q: What are the obligations of the bailor?
A: GR: No. The return of the thing loaned may be
A: demanded by the bailor only (1) after the expiration
1. Allow the bailee the use of the thing loaned for of the period stipulated or (2) after the
the duration of the period stipulated or until accomplishment of the use for which it is
the accomplishment of the purpose. constituted.
2. Refund the extraordinary expenses the bailee
incurred for the preservation of the thing. XPNs:
1. In case of urgent need by the bailor
GR: The bailee must bring to the knowledge of 2. In case of precarium
the bailor such expenses before incurring the 3. If the bailee commits an act of ingratitude
same. specified in Article 765 to the bailor (Art.
1948), to wit:
XPN: In case there is urgency and delay would a. If the bailee should commit some
cause imminent danger. offenses against the person, honor or
the property of the bailor, or his wife or
Note: If the extraordinary expenses arise on the children under his parental authority;
occasion of the actual use of the thing loaned by b. If the bailee imputes to the bailor any
the bailee, the expenses shall be borne by the criminial offense, or any act involving
bailor and bailee equally, even though the bailee moral turpitude, even though he
is without fault. (Art. 1949, NCC) should prove it, unless the crime or the
act has been committed against the
3. To be liable for damages for known hidden bailee, his wife or children under his
defects. authority; or
4. Cannot exempt himself from payment of c. If the bailee unduly refuses the bailor
expenses or damages by abandonment of the support when the bailee is legally or
thing to bailee. morally bound to give support to the
bailor.
Q: When is the bailor liable for hidden defects?
Note: The rationale for the application of Art. 765
A: When the following requisites are present: which refers to donations is the fact that
1. there was a flaw or defect in the thing commodatum, like donation, is gratuitous in nature.
loaned;
2. the flaw or defect is hidden; Q: If the contract of commodatum is a precarium,
3. the bailor is aware thereof; will Art. 1942 (1) and (2) still apply?
4. he does not advise the bailee of the same;
and A: It depends. If there has been a demand on the
5. the bailee suffers damages by reason of part of the bailor before the loss of the thing under
said flaw or defect. the circumstances set forth under Art. 1942 (1) and
(2) and the bailee did not return the thing, then the
Q: What is the cause of action against the bailor latter is liable. However, if there has been no
who did not disclose the flaw or defect? demand on the part of the bailor and the thing was
lost, the bailor is estopped and cannot hold the
A: Action for recovery of damages on the ground of bailee liable for under a contract of precarium, the
quasi-delict because of negligence or bad faith. use of the thing by the bailee depends on the
pleasure of the bailor and no time is fixed for such
Q: What is the effect if both parties are aware of use. Hence, demand on the part of the bailor is
the flaws or defects? needed for the return of the thing. Without such,
loss of the thing on the hands of the bailee will not
A: If the bailor and bailee are aware of the flaws or make him liable.
defects in the thing loaned, the bailee is deemed to
have assumed a risk. The bailor is not liable for the
damages suffered by the bailee by reason thereof.
RIGHTS OF A BAILOR
396 CIVIL LAW TEAM

CREDIT TRANSACTIONS
Q: Must the bailor be the owner of the thing Q: What are the obligations of a bailee?
loaned?
A:
A: No. The bailor in commodatum need not be the Pay for the ordinary expenses for
As to ordinary
owner of the thing loaned. It is sufficient that he the use and preservation of the
expenses
has possessory interest over subject matter (Art. thing
1938, NCC). Liable for loss even through
fortuitous event when
Note: A mere lessee or usufructuary may gratuitously [ask-dl]:
give the use of the thing leased or in usufruct, 1. when being able to save
provided there is no prohibition against such. either of the thing borrowed
or his own thing, he chose to
BAILEE save the latter
As to the loss of 2. he keeps it longer than the
the thing in period stipulated, or after
Q: If there are two or more bailees to a contract of
case of the accomplishment of its
commodatum, what is the nature of their liability?
fortuitous use (in default);
event 3. the thing loaned has been
A: When there are 2 or more bailees to whom a delivered with appraisal of
thing is loaned in the same contract, they are liable its value
solidarily. (Art. 1945, NCC) 4. when he lends or leases it to
third persons who are not
Note: Their liability is solidary in order to protect the members of his household
bailor’s rights over the thing loaned. 5. there is deviation from the
purpose
Q: Following the principle of autonomy of Not liable for the deterioration of
contracts, may the parties to a contract of the thing loaned caused by the
As to the
commodatum validly stipulate that the liability of ordinary wear and tear of the thing
deterioration
the bailees shall be joint? loaned. (Art. 1943)
of the thing
loaned
A: No. Article 1245 expressly provides that in a Note: When there are two or more
contract of commodatum, when there are two or bailees, their liability is solidary.
more bailees to whom a thing is loaned in the same
contract, they are liable solidarily. It constitutes as Note: It is understood that the thing is lost when it
an exception to the general rule of “joint perishes or goes out of commerce, or disappears in
obligations” where there are two or more debtors, such a war that its existence is unknown or cannot be
who concur in one and same obligation under recovered.
Articles 1207 and 1208. Solidarity is provided to
safeguard effectively the rights of the bailor over RIGHTS OF A BAILEE
the thing loaned.
Q: What are the rights of a bailee?
Note: The concurrence of two or more creditors or
two or more debtors in one and the same obligation A: FRUD
does not imply that each one of the former has a right Use of the thing;
to demand, or that each one of the latter is bound to Make use of the fruits of the thing when such
render, entire compliance with the prestation. There is right is stipulated in the contract;
solidary liability only when the obligation expressly so Not answerable for the deterioration of the
states, or when the law or the nature of the obligation thing loaned due to the use thereof and
requires solidarity. (Art. 1207) without his fault; and
Right of retention for damages due to hidden
If from the law, or the nature or the wording of the defects or flaws of the thing of which he
obligations to which the preceding article refers the was not advised by the bailor.
contrary does not appear, the credit or debt shall be
presumed to be divided into as many equal shares as Q: Art. 1178 of the NCC provides that all rights
there are creditors or debtors, the credits or debts
acquired by virtue of an obligation are
being considered distinct from one another, subject to
transmissible. Is the right to use the thing by virtue
the Rules of Court governing the multiplicity of suits.
of a contract of commodatum transmissible?
(Art. 1208)
A: No, it is not transmissible for 2 reasons:
OBLIGATIONS OF THE BAILEE
397
Art. 1178 provides that the transmissibility of

said acquired rights are either subject to Q: Is there right of retention in commodatum?
the laws or to a contrary sipulation; and
Art. 1939 provides that a contract of A: GR: The bailee cannot retain the thing loaned on
commodatum is purely personal in the ground that the bailor owes the bailee.
character.
XPN: The bailee has the right of retention for
Note: To rule otherwise would be to run counter to claims of damages which the bailee incurred or
the purely personal character of the commodatum and suffered by reason of the hidden defects or
to the proviso that transmissibility is subject to the law flaws of the thing loaned, of which he was not
governing such obligations. informed or advised by the bailor.
Q: Can the bailee lend or lease the object of the Note: The reason for the general rule that there is no
contract to a third person? right of retention is that “bailment implies a trust that
as soon as the time has expired or the purpose
A: GR: The bailee can neither lend nor lease the accomplished, the bailed property must be returned to
object of the contract to a third person. the bailor.” Also, Art. 1287 provides that compensation
shall not be proper when one of the debts arises from
XPN: Members of the bailee’s household may the obligations of a bailee in commodatum. (Art. 1287,
make use of the thing loaned. reworded)
Note: Members of the bailee’s household are not Q: Suppose during the said retention of the bailee,
considered as third persons. the thing is lost due to a fortuitous event. Can the
bailor hold the bailee liable for said loss based on
XPN to the XPN: Art. 1942 (2)?
Contrary stipulation; or
Nature of the thing forbids such use. A: No, the bailee cannot be held liable for the loss.
Art. 1942 (2) contemplates wrongful retention or a
Q: What is the legal effect if the bailee pays for the situation where the bailee is not entitled to retain
use of the thing? the thing loaned.
A: The contract ceases to be commodatum; it Note: Article 1942 (2) provides that the bailee is liable
becomes lease. for the loss of the thing, even if it should be through a
fortuitous event if he keeps it longer than the period
stipulated, or after the accomplishment of the use for
Q: In commodatum, does the bailee acquire the which the commodatum has been constituted.
use of the fruits of the thing?
Q: What if the bailee is entitled to payment or
A: No. The bailee in commodatum acquires only the reimbursement of expenses incurred or damages
use of the thing loaned but not its fruits (Art. 1935, suffered and the bailor offers the thing loaned as
NCC). payment for said expenses or damages, would
such offer be valid or not, in view of the
Q: Is a stipulation that the bailee may make use of prohibition under Art. 1952 which states that the
the fruits of the thing loaned valid? bailor cannot exempt himself from the payment of
expenses or damages by abandoning the thing to
A: Yes. It is understood that the enjoyment of the the bailee?
fruits must only be incidental to the use of the
thing. It should not be the main cause; otherwise, A: The offer is not valid. It may be considered as
the contract is not a commodatum but a usufruct dation in payment. In this case, the abandonment
(Art. 1940, NCC). done by the bailor was made in favor of the bailee
for the payment of the expenses incurred by the
Q: Will the stipulation that the bailee may make latter, hence, a violation of what the law has
use of the fruits of the thing loaned impair the expressly prohibited under Article 1952.
essence of commodatum?
Q: When is the bailee not entitled to
A: No. It will not impair the essence of reimbursement for the expenses he incurred?
commodatum because the actual cause or
consideration therefore is still the liberality of the A: If, for the purpose of making use and
bailor or lender. preservation of the thing, the bailee incurs
398 CIVIL LAW TEAM

CREDIT TRANSACTIONS
expenses other than those ordinary and Tito, the bailee, even though he acted without fault.
extraordinary expenses. [Art. 1949(2), NCC] (2005 Bar Question)
Q: Before he left for Riyadh to work as a mechanic, C. INTEREST AND THE SUSPENSION OF THE USURY
Pedro left his van with Tito, with the LAW
understanding that the latter could use it for one
year for his personal or family use while Pedro Q: What is interest?
works in Riyadh. He did not tell Tito that the
brakes of the van were faulty. Tito had the van A: It is the compensation to be paid by the
tuned up and the brakes repaired. He spent a total borrower for the use of the money lent to him by
amount of P15,000.00. After using the vehicle for the lender.
two weeks, Tito discovered that it consumed too
much fuel. To make up for the expenses, he leased Q: What is the rule on interests?
it to Annabelle. Two months later, Pedro returned
to the Philippines and asked Tito to return the van. A: GR: No interest shall be due unless it is stipulated
in writing. (Art. 1956, NCC)
Unfortunately, while being driven by Tito, the van
was accidentally damaged by a cargo truck XPN: In case of interest on damages or
without his fault. indemnity for damages, it need not be in
writing.
Who shall bear the P15,000.00 spent for the repair
of the van? Explain. Q: What is the basis of the right to interest?
A: The contract between Pedro and Tito is one of A: It only arises by reason of the contract
commodatum. Of the P15, 000.00 spent, Pedro, the (stipulation in writing) or by reason of delay or
bailor, shall bear the expenses for the repair of the failure to pay principal on which interest is
faulty brakes, they being extraordinary expenses demanded (Baretto v. Santa Marina, No. 11908,
incurred due to the non-disclosure by the bailor of feb. 4, 1918).
the defect or fault; Tito, on the other hand, shall
shoulder "that part of the P15,000.00 spent for the If the obligation consists of the payment of a sum of
tune-up”, said expense being ordinary for the use money, and the debtor incurs delay, the indemnity
and preservation of the van. for damages shall be the payment of legal interest
(Philrock, Inc. v. Construction Industry Arbitration
Who shall bear the costs for the van's fuel, oil and Commission, G.R. Nos. 132848-49, June 25, 2001)
other materials while it was with Tito? Explain.
Q: Can there be interest in equitable mortgage?
A: The costs for the fuel and other materials are
considered ordinary expenses, and consequently A: No. Interest could not be collected on equitable
Tito, the bailee, shall shoulder them (Art. 1941, mortgage because the same is not stipulated in
NCC) writing (Tan v. Valdehueza, G.R. No. L-38745, Aug.
6, 1975).
Does Pedro have the right to retrieve the van even
before the lapse of one year? Explain. Note: One which, although it lacks the proper
formalities or other requisites of a mortgage required
A: No, Pedro cannot demand the return of the van by law, nevertheless reveals the intention of the
until after the expiration of the one-year period parties to burden real property as a security for a debt,
stipulated. However, if in the meantime he should and contains nothing impossible or contrary to law.
have urgent need of the van, he may demand its
return or temporary use. Q: Can paid unstipulated interest be recovered?
Who shall bear the expenses for the accidental A: If paid by mistake the debtor may recover as in
damage caused by the cargo truck, granting that the case of solutio indebiti or undue payment.
the truck driver and truck owner are insolvent? However if payment is made voluntarily, no
Explain. recovery can be made as in the case of natural
obligation. (Art. 1960)
A: Both Tito and Pedro shall bear equally the costs
of the extraordinary expenses, having been Q: Sabugo granted a loan to Samilin. The loan
incurred on the occasion of actual use of the van by agreement was not reduced in writing. Thereafter,
Sabugo demanded additional interest which was
399
paid by Samilin in cash and checks. Upon advice of A:

her lawyer, Samilin demanded for the return of 1. Simple – interest which is paid for the use of
the amount of interest paid. Is the payment of the money, at a certain rate stipulated in
interest valid? writing by the parties.
2. Compound – interest which is imposed upon
A: No. Payment of monetary interest is allowed accrued interest, that is, the interest due and
only if: unpaid.
1. there was an express stipulation for the 3. Legal – that interest which the law directs to
payment of interest; and be paid in the absence of any agreement as to
2. the agreement for the payment of the rate.
interest was reduced in writing.
Q: When can there be:
The concurrence of the two conditions is required 1. Monetary interest;
for the payment of monetary interest. Thus, 2. Compensatory interest?
collection of interest without any stipulation
therefor in writing is prohibited by law. (Siga-an v. A:
Villanueva, G.R. No. 173227, Jan. 20, 2009.) 1. Monetary interest must be expressly
stipulated in writing and it must be lawful.
Q: May interest be adjudged on unliquidated (Art. 1956, NCC) It is payable on the delay of
claims? the se of the money.
A: GR: No. 2. Indemnity for damages (compensatory

interest) – the debtor in delay is liable to pay
XPN: Unless the same can be established with legal interest (6% or 12%) as indemnity for
reasonable certainty. (Atlantic Gulf and Pacific damages even in the absence of stipulation for
Company of Manila, Inc. v. CA, G.R. Nos. the payment interest. Such interest as
114841-42, Aug. 23, 1995) indemnity for damages is payable only in case
of default or non-performance of contract.
Q: In case the interest may be adjudged on
unliquidated claim but the pleadings in court did Note: If the obligation consists in the payment of a
not spell out said amount with certitude, when sum of money and the debtor incurs in delay, the
shall legal interest thereon run? debtor is liable for damages. (Art. 2209, NCC)
A: The legal interest thereon shall run only from the Q: What is the basis for the interest rate for
promulgation of judgment of said court, it being at compensatory interest?
that stage that the quantification of damages may
be deemed to have been reasonably ascertained. A:
(Ibid) 1. Central Bank Circular 416 – 12% per annum in
cases of:
Q: What is the actual base for computing such a. Loans
legal interest? b. Forbearance of money, goods and credits
c. Judgement involving such loan or
A: It shall be the amount as finally adjudged by the forbearance, in the absence of express
Supreme Court. (Ibid) agreement as to such rate of interest
Q: What is the basis for computation for indemnity Note: During the interim period from the
for damages? date of judgment until actual payment.
A: It shall be the interest agreed upon by the parties d. Pursuant to P.D. No. 116 amending Act No.
and in the absence of stipulation, the legal interest 2655 (Usury Law), the Central Bank of the
Philippines issued Circular No. 416 raising
which is 6% per annum (Art. 2208, NCC).
the legal rate of interest from 6% to 12% per
annum.
Note: 6% because it is based on damages and it has
been said that judgments other than loans,
e. In the absence of a stipulation as to interest,
forbearance, etc. is based on 6%.
the loan due will now earn interest at the
legal rate of 12% per annum. (Sulit v. CA,
Q: What are the classes of interest? G.R. No. 119247, Feb. 17, 1997).
2. Art. 2209, NCC – 6% per annum in cases of:
400 CIVIL LAW TEAM

CREDIT TRANSACTIONS
a. Other sources (i.e. sale) set either by it or by the Central Bank, leaving the
b. Damages arising from injury from person. determination thereof to the sole will and control
c. Loss of property which does not involve a of the lender bank is invalid. While it may be
loan. acceptable for practical reasons given the
3. Interest accruing from unpaid interest – there fluctuating economic conditions for banks to
must first be a stipulation for payment of stipulate that interest rates on a loan not be fixed
interest due and this shall earn interest from and instead be made dependent on prevailing
the time it is judicially demanded although market conditions, there should be a reference rate
the obligation may be silent upon this point. upon which to peg such variable interest rates
[Consolidated Bank and Trust Corp. (Solid Bank) v.
Q: What is forbearance? CA, G.R. No. 114672, Apr. 19, 2001].
A: It signifies the contractual obligation of the Q: What is interest on damages?

creditor to forbear during a given period of time to
require the debtor payment of an existing debt A: Interest that which is imposed in a judgment as
then due and payable. Such forbearance of giving indemnity for damages.
time for the payment of a debt is, in substance, a
loan (91 C.J.S. 598). Note: It need not be in writing and computed from the
time of the finality of decision.
Q: What is the interest rate imposable for back
rentals? Q: In an action for Recovery of damages for injury
to person and loss of property, a judgment was
A: Back rentals being equivalent to a loan or rendered ordering the defendant Christopher to
forbearance of money, the interest rate due pay Ron with legal interest of 12% from the filing
thereon is 12% per annum from the time of extra- of the complaint until paid. The decision became
judicial demand (Catungal v. Hao, G.R. No. 134972, final and executory. Christopher argues that the
Mar. 22, 2001). rate of 12% under Central Bank Circular 416 was
misapplied. How much by way of legal interest
Note: Back rental is the full extended value of land let should a judgment debtor pay the judgment
by lease, payable by tenant for life or years. creditor?
Q: What is the rule on compounding of interest? A: The legal interest rate of 6% per annum will
apply. The judgments spoken of and referred to
A: GR: Accrued interest (interest due and unpaid) under Central Bank Circular 416 are judgments in
shall not earn interest. litigations involving loans or forbearances of
money, goods or credits. Any other kind of
XPN: When: monetary judgments which has nothing to do with,
1. judicially demanded; or nor involving loans or forbearance of any money
2. there is express stipulation made by the goods or credits does not fall within the coverage of
parties – that the interest due and unpaid said law. Coming to the case at bar, the decision
shall be added to the principal obligation herein sought to be executed is one rendered in an
and the resulting total amount shall earn Action for Damages for injury to persons and loss of
interest. property and does not involve any loan, much less
forbearances of any money, goods or credits.
Note: Compounding of interest may be availed only (Reformina v. Tomol, 139 SCRA 260)
when there is a written stipulation in the contract for
the payment of interest. Q: May the borrower recover the interest he paid
in usurious transactions?
Q: What is floating interest?
A: There are two conflicting decisions. In Palileo v.
A: It is the interest stipulated by banks which is not Cosio (97 Phil. 919) Article 1413 of the Civil Code
fixed and made to depend upon the prevailing was applied which provides that only the amount
market conditions, considering the fluctuating paid in excess of the legal rate can be recovered. On
economic conditions. the other hand, in Angel Jose Warehousing v.
Chelda Enterprises (23 SCRA 119), the Supreme
Q: Is a stipulation for floating interest valid? Court held that the borrower can recover all
interests paid and not only the excess over the
A: No. A stipulation for a floating rate of interest in prescribed ceilings because the stipulation on the
a letter of credit in which there is no reference rate
401
usurious interest is void, in accordance with Usury present problem, the debtor not having given his
law. consent to the increase in interest, the increase is
void. (2001 Bar Question)
Q: Must the principal debt still be paid in usurious
transactions? II. DEPOSIT
A: Yes. Under the Usury Law, notwithstanding Q: What is deposit?

stipulations of usurious interest, the debtor must
still pay the principal debt (Lopez v. El Hogar A: It is a contract whereby a person (depositor)
Filipino, No. 22678, Jan. 12, 1925). delivers a thing to another (depositary), for the
principal purpose of safekeeping it, with the
Q: What is the rationale behind the validity of obligation of returning it when demanded.
unconscionable Interest rate in a loan?
Q: When is a contract of deposit constituted?
A: The Supreme Court said nothing in said circular
(Circular 905) suspending Usury Law grants lender A: From the moment a person receives a thing
authority to raise interest rates to levels which will belonging to another, with the obligation of safely
either enslave their borrowers or lead to a keeping it and returning the same upon demand.
hemorraghing of their assets (Almeda v. CA, G.R.
No. 113412, Apr. 17, 1996) Q: What are the characteristics of contract of
deposit?
In the case of Medel v. CA (G.R. No. 131622, Nov.
27, 1998), the court ruled that while stipulated A:
interest of 5.5% per month on a loan is usurious 1. Real contract – because it can only be
pursuant to CBC No. 905, the same must be perfected by the delivery of the object of the
equitably reduced for being iniquitous, contract.
unconscionable and exorbitant. It is contrary to
morals. It was reduced to 12% per annum in However, an agreement to constitute a future
consonant with justice and fairplay. deposit is a consensual contract and is
therefore binding.
Q: Samuel borrowed P300,000.00 housing loan
from the bank at 18% per annum interest. Note: There is no consensual contract of deposit;
However, the promissory note contained a proviso there is only a consensual promise to deliver
that the bank "reserves the right to increase which is binding if such is accepted.
interest within the limits allowed by law." By
virtue of such proviso, over the objections of 2. Object of the contract must be a movable
Samuel, the bank increased the interest rate property. However, in cases of judicial deposit,
periodically until it reached 48% per annum. the subject matter may be a real property.
Finally, Samuel filed an action questioning the
right of the bank to increase the interest rate up to 3. Purpose is for the safekeeping of the thing
48%. The bank raised the defense that the Central deposited. This must be the principal purpose
Bank of the Philippines had already suspended the and not only secondary.
Usury Law. Will the action prosper or not? Why?
4. It is gratuitous, unless there is a:
A: The action will prosper. While it is true that the a. Contrary agreement; or
interest ceilings set by the Usury Law are no longer b. The depositary is engaged in the business
in force, it has been held that PD No. 1684 and CB of storing goods, like a warehouseman.
Circular No. 905 merely allow contracting parties to (Art. 1965)
stipulate freely on any adjustment in the interest
rate on a loan or forbearance of money but do not 5. The depositary cannot use the thing deposited,
authorize a unilateral increase of the interest rate unless:
by one party without the other's consent (PNB v. a. Permitted by the depositor; or
CA, G.R. No. 107569, Nov. 8, 1994). To say b. Preservation of the thing requires its use,
otherwise will violate the principle of mutuality of but only for said purpose.
contracts under Article 1308 of the Civil Code. To be
valid, therefore, any change of interest must be Q: Distinguish deposit from:
mutually agreed upon by the parties (Dizon v. 1. Mutuum;
Magsaysay, G.R. No. L-23399, May 31, 1974). In the 2. Commodatum;
402 CIVIL LAW TEAM

CREDIT TRANSACTIONS
3. Agency; A:
4. Lease; and 1. Judicial (sequestration)
5. Sale. 2. Extra-judicial
a. Voluntary – the delivery is made by the
A: will of the depositor. (Art. 2005)
DEPOSIT MUTUUM b. Necessary – made in compliance with a
Purpose legal obligation, or on the occasion of any
Safekeeping/custody Consumption calamity, or by travelers in hotels and
When to return inns, or by travelers with common
Upon expiration of the carriers. (Art. 1996)
Upon demand of the
term granted to the
depositor
borrower Q: Distinguish judicial from extra-judicial deposit?
Subject Matter
Movable (extrajudicial) or A:
Money or other fungible
may be immovable JUDICIAL EXTRA-JUDICIAL
thing
(judicial) Creation
Relationship Will of the contracting
Depositor-depositary Lender-borrower Will of the court
parties
Compensation Purpose
No compensation of Security or to ensure the
things deposited with There can be right of a party to
each other (except by compensation of credits property or to recover in Custody and safekeeping
mutual agreement) case of favorable
judgment
DEPOSIT COMMODATUM Subject Matter
Principal Purpose Movables or immovables
Movables only
Transfer of use but generally immovables
Safekeeping
Use of the thing Cause
Nature Generally gratuitous but
Always onerous
May be gratuitous or may be compensated
Always gratuitous
onerous When must the thing be returned
Upon order of the court
Upon demand of
DEPOSIT AGENCY or when litigation is
depositor
Purpose ended
Representation of the In whose behalf it is held
Safekeeping
principal by the agent Depositor or third person
Person who has a right
Reason for custody of the thing designated
The custody of the thing
is the principal and It is merely an incidental Q: What is the nature of the rent of safety deposit
essential reason for the obligation of the agent boxes?
deposit
Nature A: The rent of safety deposit boxes is an ordinary
It is generally onerous or contract of lease of things and not a special kind of
Essentially gratuitous
for compensation deposit because the General Banking Act as revised
has deleted the part where banks are expressly
DEPOSIT LEASE authorized to accept documents or papers for safe-
Principal Purpose keeping.
Safekeeping Use of the thing
When to return The case of Sia v. CA, G.R. No. 102970, May 13,
Upon demand of the Upon termination of the 1993 enunciating that a rent of a safety deposit box
depositor lease contract. is a special kind of deposit, was decided under the
former General Banking Act. However, SC has not
DEPOSIT SALE yet decided a case abandoning the ruling in Sia v.
CA, making it conform with the new General
Ownership
Banking Act.
Retained by depositor. Transferred to buyer.
Fixed, savings and current deposits in banks and

Q: What are the kinds of deposit?
other similar institutions are not true deposits but
403
are considered simple loans because they earn XPNs:

interest. (Art. 1980, NCC) a. When preservation of thing deposited
requires its use
Q: Is ownership necessary in a contract of deposit?
b. When authorized by depositor
A: The depositor need not be the owner of the
thing deposited because the purpose of the c. GR: In such case it is no longer a deposit
contract is safekeeping and not transfer of but a contract of loan or commodatum, as
ownership. the case may be.
Note: A deposit may also be made by two or more d. XPN: Principal reason for the contract is
persons each of whom believes himself entitled to the still safekeeping, it is still deposit.
thing deposited with a third person, who shall deliver
it in a proper case to the one to whom it belongs. 7. When the thing deposited is delivered sealed
and closed:
Q: What is the nature of advance payment in a a. return the thing in the same condition
contract of sale? b. pay damages if seal be broken through his
fault
A: A so called deposit of an advance payment in the c. keep the secret of the deposit when seal
case of a sale is not the deposit contemplated is broken w/ or w/o his fault
under Art. 1962. It is that advance payment upon d. However, the depositary is authorized to
which ownership is transferred to the seller once it open the seal or lock when:
is given subject to the completion of payment by a. there is presumed authority (i.e. the
the buyer under an agreement. (Cruz v. Auditor key is delivered)
General, No. L-12233, May 30, 1959). b. out of necessity
8. GR: Pay for any loss or damage that may arise
A. VOLUNTARY DEPOSIT due to his fault
Q: What are the obligations of depositary in XPN: Liability of loss through fortuitous event
voluntary deposit?
XPNs to XPN (Art. 1979): Even in case of loss
A: through fortuitous event, still liable if (USAD):
1. To keep the thing safely and return it a. Stipulated
2. Exercise same diligence as he would exercise b. he Uses thing w/o depositor’s
over his own property permission
rd
3. Not to deposit the thing with a 3 person, c. he Delays its return
except: d. he Allows others to use it (even if he
a. When expressly authorized by stipulation; himself is authorized to use it)
and
b. When the preservation of the thing 9. Return the thing deposited with all its fruits,
requires its use (Art. 1977) accessions, and accessories (Art. 1983)
10. Pay interest on sums converted to personal
Note: Depositary is liable for the loss if: use if the deposit consists of money
i. He deposits the thing to a 3rd person
without authority, even though the Q: When is a voluntary deposit extinguished?
loss is due to fortuitous events
ii. Deposits the thing to a 3rd person who
A:
is manifestly careless or unfit although
there is authority.
1. Loss or destruction of thing deposited;
2. In gratuitous deposit, upon death of either
4. If the thing should earn interest: depositor or depositary; or
a. collect interest as it falls due 3. Other causes (e.g. return of thing, novation,
b. take steps to preserve the value and expiration of the term, fulfillment of resolutory
rights corresponding to it condition)
5. Not to commingle things if so stipulated PARTIES
6. GR: Not to make use of the thing deposited Q: Who are the parties to a contract of deposit?
404 CIVIL LAW TEAM

CREDIT TRANSACTIONS
A: XPN: Should he discover that the thing has been

1. Depositary – to whom the thing is deposited stolen and who its true owner is, he must advise
2. Depositor – the one who deposits the thing the latter of the deposit.
DEPOSITARY Note: If the depositary has reasonable grounds to

believe that the thing has not been lawfully acquired
Q: May the depositary change the manner of the by the depositor, the former may return the same.
deposit?
Q: May the depository return the thing to the
A: Yes, if he may reasonably presume that the owner should he knew of the identity of the
depositor would consent to the change if the latter latter?
knew of the facts of the situation. However, before
the depositary may make such change, he shall A: The depositary is not authorized to return the
notify the depositor thereof and wait for his thing unceremoniously to the alleged owner
decision, unless delay would cause danger (Art. without the knowledge of the depositor. His duty is
1974, NCC). merely to advise the owner of the deposit.
Q: Is a guardian a depositary of the ward’s Note: If the depositor insists on his ownership as
property? against the true owner, the depositary may file an
Interpleader suit against both of them to avoid
A: The guardian is not holding the funds of the ward responsibility. If the identity of the true owner cannot
be ascertained, the depositary may return the thing to
merely for safekeeping exclusively but also
the depositor. (p. 82, Credit Pineda)
intended for the latter’s maintenance and support.
Losses, if any without the fault of the guardian shall
Q: What should the depositary do if he loses the
be deducted from the funds of the ward (Phil. Trust
thing through force majeure or government order
Co. v. Ballesteros, No. L-8261, April 20, 1956).
and receives money or another thing in its place?
Q: What is the effect when the depositary has
A: He shall deliver the sum or other thing to the
permission to use the thing deposited?
depositor.
A: GR: The contract loses the concept of a deposit
Q: What is the duty of the depositary’s heir if he
and becomes a loan or commodatum.
sold the thing which he did not know was
deposited?
XPN: Where safekeeping is still the principal
purpose of the contract (Art. 1978, NCC).
A: He shall be bound to return the price he may
have received or to assign his right of action against
Note: The permission shall not be presumed, and its
existence must be proved.
the buyer in case the price has not been paid by
him (Art. 1991, NCC).
Q: When the deposit consists of money, what
Note: The provision applies only when the depositary
must be returned upon the extinguishment of
has died and left heir/s who took possession of the
contract?
thing in the concept of an owner and sold it in good
faith to a third person.
A: The provision of Article 1896 shall apply wherein
the money deposited must be returned together Q: What is the right of the depositary if he has not
with interest for the use thereof. The imposition of been paid the amount due to him?
interest is in the form of penalty for the use of
money there being no agreement to pay the A: The depositary may retain the thing in pledge
interest at the outset, otherwise, the contract will until full payment of what may be due him by
be a mutuum. reason of the deposit (Art. 1994, NCC).
Q: Can the depositary demand that the depositor Q: May the depositary sell the thing retained in
should prove his ownership of the thing pledge?
deposited?
A: Yes, Article 2108 provides that if, without the
A: GR: No. fault of the pledgee, there is danger, destruction,
impairment, or diminution in value of the thing
pledged, he may cause the same to be sold at
405
public auction. The proceeds of the auction shall be

a security for the principal obligation in the same XPNs:
manner as the thing originally pledged. (Pineda, p. a. When at the time of deposit, the
93, 2006 ed) depositor was not aware of the
dangerous character of the thing or was
Q: Maneja assigned and conveyed to Serrano her not expected to know it;
time deposit. Notwithstanding series of demands b. When the depositor notified the
for encashment of the aforementioned time depositary; or
deposits, OBM refused to honor the time deposits. c. When the depositary was aware of it
Is OBM liable to Serrano despite the fact the without advice from the depositor.
Central Bank declared that OBM could no longer
operate due to its chronic reserve deficiencies? 3. In case of an onerous deposit, to pay the
compensation agreed upon as consideration
A: Yes. Bank deposits are in the nature of irregular for the deposit.
deposits. They are really loans because they earn
interest. All kinds of bank deposits, whether fixed, Q: To whom should the thing deposited be
savings or current, are to be treated as loans and returned?
are to be covered by the law on loans. Current and
savings deposits are loans to a bank because it can A:
use the same. Serrano, in making time deposits that 1. To the depositor, to his heirs and successors,
earn interest with OBM was in reality a creditor of or to the person who may have been
the respondent bank, and not a depositor. The bank designated in the contract (Art. 1972, NCC).
was in turn a debtor of Serrano. Failure of OBM to 2. If the depositor was incapacitated at the time
honor the time deposits is failure to pay its of making the deposit, to his guardian or
obligation as a debtor and not a breach of trust administrator or to the depositor himself
arising from a depositary’s failure to return the should he acquire capacity (Art. 1970, NCC).
subject matter of the deposit. (Serrano v. Central 3. Even if the depositor had capacity at the time
Bank, G.R. No. 30511, Feb. 14, 1980) of making the deposit but he subsequently
loses his capacity during the deposit, the thing
DEPOSITOR must be returned to his legal representative
(Art.1986).
Q: What is the rule when there are two or more
depositors? Q: Where should the thing deposited be returned?
A: If they are not solidary, and the thing admits of A: GR: At the place agreed upon.
division, each one cannot demand more than his
share. XPN: In the absence of stipulation, at the place
where the thing deposited might be, even if it
When there is solidarity or the thing does not admit should not be the same place where the
of division, the provisions of Art. 1212 and 1214 original deposit was made provided the
shall govern. However, if there is a stipulation that transfer was accomplished without malice on
the thing should be returned to one of the the part of the depositary. (Art. 1987)
depositors, the depositary shall return it only to the
person designated (Art. 1985, NCC). Q: When should the thing deposited be returned?
Q: What are the obligations of depositor? A: GR: Upon demand or at will, whether or not a
period has been stipulated.
A:
1. Payment for necessary expenses for XPNs:
preservation 1. Thing is judicially attached while in the
a. If the deposit is gratuitous – reimburse depositary’s possession.
depositary 2. Depositary was notified of the opposition
b. With compensation – no need for of a third person to the return or the
reimbursement; expenses borne by removal of the thing deposited (Art. 1986,
depositary NCC).change to Art. 1988
3. When the thing is stolen and the period of
2. GR: Pay losses incurred by depositary due to 30 days from notice to the true owner for
the character of the thing deposited. him to claim it had not yet lapsed, the
406 CIVIL LAW TEAM

CREDIT TRANSACTIONS
depositary cannot return the thing stipulation between the hotel keeper and the guest
deposited to the depositor. This is whereby the responsibility of the former (Arts.
intended to protect the true owner. 1998-2001) is suppressed or diminished shall be
4. In case of gratuitous deposit, if the void.
depositary has a justifiable reason for not
keeping the deposit. If the depositor Q: What is the extent of the liability of the hotel
refuses, the depositary may secure its keepers in case of loss?
consignation from the court (Art. 1989,
NCC). A:
1. It covers liability in hotel rooms which come
B. NECESSARY DEPOSIT under the term “baggage” or articles such as
clothing as are ordinarily used by travelers.
Q: When is deposit considered as necessary? 2. It includes lost or damages in hotels annexes
such as vehicles in the hotel’s garage.
A:
1. When it is in compliance with a legal Q: Can the keepers of the hotels or inns exercise
obligation; the right of retention?
2. It takes place on the occasion of any calamity,
such as fire, storm, flood, pillage, shipwreck, or A: Yes, as security for credits incident to the stay at
other similar events; the hotel (in the nature of a pledge created by
3. Made by passengers with common carriers; or operation of law).
4. Made by travelers in hotels or inns.
Q: What is the effect of obtaining food or
Q: When can the keepers of hotels or inns be held accommodation in a hotel or inn without payment?
responsible for loss of thing in case of deposit?
A: The act is equivalent to estafa under Art. 315 of
A: When both are present: the Revised Penal Code
1. they have been previously informed by
guest about the effects the latter brought C. JUDICIAL DEPOSIT
in; and
2. the guest has taken precautions Q: When does judicial deposit (sequestration) take
prescribed for their safekeeping. place?
Note: They are liable regardless of the A: When an attachment or seizure of property in
degree of care exercised when: litigation is ordered by a court. (Art. 2005, NCC)
a. loss or injury is caused by his
employees or even by strangers (Art. Note: It is auxiliary to a case pending in court. The
2000); or purpose is to maintain the status quo during the
b. loss is caused by act of thief or robber pendency of the litigation or to insure the right of the
when there is no use of arms or parties to the property in case of a favorable
irresistible force. (Art. 2001) judgment. (De Leon, Comments and cases on credit
transaction, p. 154, 2010)
Q: What are the instances when the keepers of
hotels or inns are not liable for loss of thing in case Q: What may be the object of Judicial
of deposit? sequestration?
A: They are not liable when: A: Movables and immovables (Art. 2006, NCC)
1. loss or injury is caused by force majeure;
2. loss due to the acts of guests, his family, Q: When will the properties sequestered cease to
his employees, or visitors; and be in custodia legis?
3. loss arises from the character of the
goods. (Art. 2002) A: When the insolvency proceedings of a
partnership terminated because the assignee in
Q: Are hotel or inn keepers still liable regardless of insolvency has returned the remaining assets to the
the posting of notices exempting themselves from firm, said properties cease to be in custodia legis
any liability? (Ng Cho Cio, et al. v. Ng Diong & Hodges, L-14832,
Jan. 28, 1961)
A: Yes. Hotel/Inn-keepers cannot escape or limit
liability by stipulation or the posting of notices. Any III. GUARANTY AND SURETYSHIP
407
A. NATURE AND EXTENT OF GUARANTY person is bound to title, quality or quantity of

another for the the subject matter of a
Q: What is guaranty? fulfillment of a promise contract is what it is
or undertaking of a represented to be, and
A: It is a contract where a person called the third person relates to some agreement
guarantor binds himself to the creditor to fulfill the made ordinarily by the
obligation of the principal debtor in case the latter party who makes the
warranty
should fail to do so.
Q: What is suretyship? Q: What are the kinds of guaranty?
A: It is a contract where a person binds himself A:

solidarily with principal debtor. 1. General classification
a. Personal – guaranty where an individual
personally assumes the fulfillment of the
Q: Distinguish guaranty from suretyship.
principal obligation;
b. Real – guaranty is property, movable, or
A:
immovable.
GUARANTY SURETYSHIP
2. As to its origin
Surety is an original
Collateral undertaking a. Conventional – constituted by agreement
promissory
of the parties
Guarantor-secondarily
Surety-primarily liable b. Legal – imposed by virtue of a provision of
liable
law
Guarantor binds himself Surety undertakes to pay
c. Judicial – required by a court to guarantee
to pay if the principal if principal
the eventual right of the parties in a case.
cannot pay does not pay
3. As to consideration
Insurer of solvency of
Insurer of the debt a. Gratuitous – guarantor does not receive
debtor
any price or remuneration for acting as such.
Guarantor can avail of
the benefit of excussion Surety cannot avail of b. Onerous – one where the guarantor
and division in case the benefit of excussion receives valuable consideration for his
creditor proceeds against and division guaranty
him 4. As to person
a. Single – constituted solely to guarantee or
secure performance by the debtor of the
Q: What is the similarity between guaranty and principal obligation.
suretyship? b. Double or subguaranty – constituted to
secure the fulfillment of the obligation of a
A: Both guarantor and surety promise or undertake guarantor by a sub-guarantor
to answer for the debt, default or miscarriage of 5. As to scope and extent
another person. a. Definite – where the guaranty is limited to
the principal obligation only, or to a specific
Q: What are the characteristics of guaranty and portion thereof.
suretyship? b. Indefinite or simple – where the guaranty
included all the accessory obligations of the
A: ACCUNCS principal, e.g. costs, including judicial costs.
1. Accessory
2. Consensual B. EFFECTS OF GUARANTY
3. Conditional
4. Unilateral Q: What are the obligations that may be secured in
5. Nominate a contract of guaranty?
6. Cannot be presumed
7. Subsidiary A:
8. Covered by the Statute of Frauds 1. Valid obligations
2. Voidable obligations
Q: Distinguish guaranty from warranty. 3. Unenforceable obligations
4. Natural obligations – When the debtor himself
A: offers a guaranty for his natural obligation, he
GUARANTY WARRANTY impliedly recognizes his liability, thereby
a contract by which a an undertaking that the transforming the obligation from a natural into a
civil one.
408 CIVIL LAW TEAM

CREDIT TRANSACTIONS
5. Conditional obligations – only in case of GUARANTOR

suspensive condition because it gives rise to the
principal and hence, gives rise also to the Q: Who is a guarantor?
accessory obligation.
A: The guarantor is the person who is bound to
Q: Is a valid principal obligation necessary in another for the fulfillment of a promise or
contract of guaranty? undertaking of a third person.
A: Since guaranty is an accessory contract, it is an Q: What are the qualifications of a guarantor?

indispensable condition for its existence that there
must be a principal obligation. Hence, if the A:
principal obligation is void, it is also void. 1. Possesses integrity;
2. Capacity to bind himself; and
Q: In what form should a contract of guaranty be 3. Has sufficient property to answer for the
made? obligation which he guarantees.
A: It must be expressed and in writing (par. 2, Art. Note: The qualifications need only be present at the
1403, NCC); otherwise, it is unenforceable unless time of the perfection of the contract.
ratified. It need not be in a public instrument.
Q: What is the effect of subsequent loss of
Note: Guaranty, as a contract, requires the expression required qualifications?
of the consent of the guarantor in order to be bound.
It cannot be presumed because of the existence of a A: The supervening loss of required qualifications
contract or principal obligation. It shall be will not generally end the guaranty. However, the
unenforceable by action unless made in writing. creditor is given the right to demand substitution of
guarantor.
Q: Is acceptance necessary in a contract of
guaranty? Q: When is the qualification of the guarantor lost?
A: GR: The acceptance of the creditor is not A:
essential in such contracts. 1. Conviction of a crime involving dishonesty
2. Insolvency
XPN: When there is a mere offer of a guaranty
or a conditional guaranty wherein the Q: What is the effect of absence of direct
obligation does not become binding until it is consideration or benefit to guarantor?
accepted by the creditor and notice of such
acceptance is given to the guarantor. A: Guaranty or surety agreement is regarded valid
despite the absence of any direct consideration
Q: In case of doubt, in whose favor should a received by the guarantor or surety, such
contract of guaranty or surety be resolved? consideration need not pass directly to the
guarantor or surety; a consideration moving to the
A: GR: Strict construction against the creditor and principal will suffice.
liberal in favor of the guarantor or surety; terms
cannot be extended beyond its terms. Q: What is the rule when a married woman is a
guarantor?
XPN: In cases of compensated sureties.
A: GR: Binds only her separate property.
Q: State the general character of guaranty.
XPNs:
A: GR: Generally gratuitous (Art. 2048, NCC) 1. If with her husband’s consent, it binds the
community or conjugal partnership
XPN: Stipulation to the contrary. property.
2. Without husband’s consent, in cases
Q: Who are the parties to a contract of guaranty? provided for by law, such as when the
guaranty has redounded to the benefit of
A: the family.
1. Guarantor
2. Creditor Q: What are the rights of a third person who pays
for the debt guaranteed or secured?
409
A: A: His heirs are still liable to the extent of the value

1. If payment is made without the knowledge or of the inheritance because the obligation is not
against the will of the debtor: purely personal and is therefore transmissible.
a. Guarantor can recover only insofar as the
payment has been beneficial to the Q: What is the effect of the debtor’s death?
debtor (Art. 1236)
b. Guarantor cannot compel the creditor to A: His obligation will survive. His estate will be
subrogate him in his rights. (Art. 1237) answerable. If the estate has no sufficient assets,
2. If payment is made with the knowledge or the guarantor shall be liable.
consent of the debtor – Subrogated to all the
rights which creditor had against the debtor. Q: What is the rule with respect to jurisdiction in
an action based on a contract of guaranty?
Q: What is the extent of guarantor’s liability?
A: The guarantor shall be subject to the jurisdiction
A: of the court of the place where the obligation is to
1. Where the guaranty is definite – It is limited in be complied with.
whole or in part to the principal debt to the
exclusion of accessories. BENEFIT OF EXCUSSION
2. Where the guaranty is indefinite or simple – It
shall comprise not only the principal obligation Q: What is the benefit of excussion?
but also all its accessories, including the
judicial costs provided that the guarantor shall A: It is a right by which the guarantor cannot be
only be liable for those cost incurred after he compelled to pay the creditor unless the latter has
has been judicially required to pay. exhausted all the properties of the principal debtor
and has resorted to all legal remedies against such
Q: What are the situations when a guarantor may debtor. (Art. 2058)
lawfully be required to pay more than the original
obligation of the principal debtor? Q: What are the requisites of benefit of exhaustion
or excussion?
A:
1. If upon demand, a guarantor fails to pay the A:
obligation, he can be held liable for interest, 1. The guarantor must set up the right of
even if in thus paying, the liability becomes excussion against the creditor upon the latter’s
more than that in the principal obligation. The demand for payment from him; and
increased liability is not because of the
contract but because of the default and the 2. He must point out to the creditor the available
necessity for judicial collection. It should be property of the debtor (not exempted from
noted, however, that the interest runs from execution) found within the Philippine
the time the complaint is filed, not from the territory (Art. 2060, NCC).
time the debt becomes due and demandable
(Tagawa v. Aldanese, No.18636, Sept. 28, Q: May a complaint be filed against the debtor and
1922 ). guarantor simultaneously in one case before the
exhaustion of all the properties of the debtor?
2. Creditors suing on a surety bond may recover
from the surety, as part of their damages, A: Yes. There is nothing procedurally objectionable
interest at the legal rate, judicial cost and in impleading the guarantor as a co-defendant. As a
attorney’s fees when appropriate even if the matter of fact, the Rules of Court on permissive
surety would thereby become liable to pay joinder of parties explicitly allow it. If the creditor
more than the total amount stipulated in the obtained a favorable judgment against the debtor
bond (Dino v. CA, G.R. No. 89775, Nov. 26, and guarantor, the latter is entitled to a deferment
1995). of the execution of the said judgment against him
until all properties of the debtor shall have been
3. A penalty clause may also increase the liability exhausted to satisfy the latter’s obligation involved
of the surety (General Insurance Surety Co. v. in the case.
Republic, G.R. No. L-13873, Jan. 31, 1963)
Note: Just because the guarantor was sued at the
Q: What is the effect of guarantor’s death? same time as the debtor does not mean that the
410 CIVIL LAW TEAM

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creditor has already made the demand on the the paying guarantor in the same joint proportion in
guarantor. accordance with the rule in solidary obligations.
Q: What is the effect of declaration of insolvency The right to be reimbursed from his co- guarantors is
with respect to the right of excussion? acquired ipso jure by virtue of said payment.
A: Just because the debtor has been declared Q: What is the effect of payment made by a co-
insolvent in insolvency proceeding does not guarantor not by virtue of a judicial demand or by
necessarily mean that he cannot pay, for part of the reason of insolvency?
debtor’s assets may still be available to the creditor.
One good proof of the debtor’s inability to pay is an A: The paying co-guarantor cannot directly seek
unsatisfied writ of execution which has been reimbursement from the other co-guarantors. He
returned by the implementing sheriff (Machetti v. has to pursue first the claim against the principal
Hospicio de San Jose, 43 Phil. 297, Feb. 7, 1920) debtor alone. (Sadaya v. Sevilla, 126 Phil. 101)
Q: When is there no benefit of excussion? Q: Distinguish benefit of division from benefit of

contribution.
A: RJS-AIR-FEDS
1. Guarantor has expressly renounced it. A:
2. Guarantor has bound himself solidarily BENEFIT OF
BENEFIT OF DIVISION
with the Debtor. CONTRIBUTION
3. Debtor is insolvent. Controversy is between Controversy between
4. Guarantor has absconded, or cannot be the co-guarantors and and among the several
sued within the Philippines unless he left the creditor co-guarantors
a manager or representative. There is no payment There is already
5. If it may be presumed that an execution yet, but there is merely payment of debt; the
on the property of the Debtor cannot a claim pressed against paying co-guarantor is
satisfy the obligation. one or more co- seeking the contribution
6. Guarantor does not invoke the benefit guarantors of the co-guarantors
against Creditor upon demand to him for
payment and he does not point out Q: What is the effect of the creditor’s negligence in
available property of the Debtor within exhausting the properties of the debtor?
the Philippines sufficient to cover the
obligation (Art. 2060, NCC). A: He shall suffer the loss to the extent of the value
7. Guarantor is a judicial bondsman or sub- of the pointed property which was not exhausted
surety. (Art. 2084) by the creditor (Art. 2061, NCC).
8. A pledge or mortgage of his own property
has been given by Guarantor as special Note: The article applies when the guarantor has
security. complied with the conditions of Art. 2060 (requisites
9. Guarantor fails to interpose it as a of benefit of excussion).
defense before judgment is rendered.
Q: What is the rule with regard to action of the
BENEFIT OF DIVISION creditor against the debtor?
Q: What is the principle of benefit of division? A: GR: Only the principal debtor should be sued
alone.
A: Should there be several guarantors of only one
debtor for the same debt, the obligation to answer XPN: If the benefit of excussion is not
for the same is divided among all. (Joint liability) available, the guarantor can be sued jointly
(Art. 2065) with the debtor.
Note: GR: Creditor can claim from the guarantors only Q: Is the guarantor entitled to be notified of the
up to the extent they are respectively bound to pay. complaint against the debtor?
XPN: When solidarity has been stipulated. A: Yes. If the guarantor desires to set up defenses
as are granted him by law, he may have the
Should any of the guarantors become insolvent, his opportunity to do so. (Art. 2062)
share shall be borne by the other guarantors including
411
Q: What are the consequences of the guarantor’s

appearance or non-appearance in the case against Q: What is the right of the guarantor after the
the debtor? payment of the debt is made to the creditor?
A: A: Right of subrogation. The guarantor is

1. If he does not appear and judgment is subrogated to all the rights which the creditor had
st
rendered against the debtor, he cannot set up against the debtor (1 par., Art. 2067)
defenses which he could have set up had he
appeared; moreover, he cannot question the Q: What happens when guarantor pays without
decision anymore; notice to the debtor?
2. If he appears such as by filing an answer in A: The debtor may interpose against the guarantor
intervention, he may lose or may win the case. defenses available to the debtor as against the
If he losses, he is still entitled to the benefit of creditor at the time payment was made.
excussion. There is no waiver of his benefit of
excussion by his appearance in the case. Note: GR: Guarantor must 1st notify the debtor before
paying, otherwise, if the debtor pays again, the
Q: What is the effect of compromise between the guarantor can only collect from the creditor and
creditor and the principal debtor? guarantor will have no cause of action against the
debtor even if the creditor becomes insolvent. (Art.
A: If the compromise is beneficial to the guarantor, 2070)
st
it is valid; otherwise, it is not binding upon him (1
sentence, Art. 2063, NCC). XPN: Guarantor may still recover from debtor if
the following circumstances concur:
Q: What is the effect of compromise between the
1. Guaranty is gratuitous;
creditor and the guarantor to the principal debtor? 2. Guarantor was prevented by fortuitous
event from notifying the debtor; and
A: If compromise is beneficial to the principal 3. Creditor was insolvent.
debtor, it is valid; otherwise, it is not binding upon
nd
him (2 sentence, Art. 2063, NCC). To be binding, it Q: What is the effect if guarantor pays the debt
must benefit both the guarantor and the debtor. before maturity?
Q: What is the rule on the right of indemnity and A: GR: The Guarantor cannot seek reimbursement
reimbursement of the guarantor who paid the from the debtor until expiration of the period
debt? stipulated. The guarantor must wait. For being
subsidiary in character, the guaratnty is not
A: GR: Guarantor is entitled to be reimbursed by enforceable until the debt has become due. (Art.
Debtor for: 2069)
1. total amount of the debt paid;
2. legal interest from the time payment was XPN: If ratified by the debtor.
made known to the debtor;
3. expenses incurred after notifying debtor Q: Can the guarantor proceed against the principal
that demand to pay was made upon him; debtor even before having paid the creditor?
and
4. damages in accordance with law. A: GR: No.
XPNs: XPNs:
1. Guaranty is constituted without the
knowledge or against the will of the 1. When he is sued for payment;
debtor. 2. In case of insolvency of the principal
Effect: Guarantor may only recover only so debtor;
much as was beneficial to the debtor. 3. When the debtor has bound himself to
rd
relieve him from the guaranty within a
2. Payment by 3 persons who does not intend specified period, and this period has
to be reimbursed. expired.
4. When the debt has become demandable
Effect: deemed a donation and as such by reason of the expiration of the period of
requires the consent of debtor. payment;
412 CIVIL LAW TEAM

CREDIT TRANSACTIONS
5. After the lapse of ten years, when the XPN: A chattel mortgage can only cover
principal obligation has no fixed period for obligations existing at the time the
its maturity, unless it be of such nature mortgage is constituted and not to
that it cannot be extinguished except obligations subsequent to the execution of
within a period longer than ten years; the mortgage.
6. If there are reasonable grounds to fear that
the principal debtor intends to abscond; or XPN to the XPN: In case of stocks in
7. If the principal debtor is in imminent department stores, drug stores etc.
danger of becoming insolvent.
Q: What is the test of continuing guaranty?
Note: In all these cases, the cause of action of the
guarantor is either to obtain release from the A: A guaranty shall be construed as continuing
guaranty, or to demand a security that shall protect when by the terms thereof it is evident that the
him from any proceedings by the creditor and from the object is to give a standing credit to the principal
danger of insolvency of the debtor (Art. 2071, NCC). debtor to be used from time to time either
indefinitely or until a certain period, especially if the
Q: What is the remedy of a person who becomes a right to recall the guaranty is expressly reserved
guarantor at the request of another for the debt of (Dino v. CA, G.R. No. 89775, Nov. 26, 1995)
a third person who is not present?
Q: May guaranty secure future debts?
A: He has the option of suing either the principal
debtor or the requesting party (Art. 2072, NCC). A: Yes. A guaranty may be given to secure even
future debts, the amount of which may not be
Note: The provision applies when the guarantor has known at the time the guaranty is executed. This is
actually paid the debt. the basis for contracts denominated as continuing
guaranty or suretyship. It is one which covers all
SUB-GUARANTY transactions, including those arising in the future,
which are within the description or contemplation
Q: What is double or sub-guaranty? of the contract of guaranty, until the expiration or
termination thereof. (Dino v. CA, G.R. No. 89775,
A: It is one constituted to guarantee the obligation Nov. 26, 1995)
of the guarantor.
Q: PAGRICO submitted a Surety Bond issued by
Note: In case of insolvency of the guarantor for whom
R&B Surety to secure an increase in its credit line
he bound himself, he is responsible to the co-
with PNB. For consideration of the Surety Bond,
guarantors in the same terms as the guarantors (Art.
2075, NCC).
Cochingyan and Villanueva entered into an
Indemnity Agreement with R&B Surety and bound
Q: Is a sub-guarantor entitled to the right of themselves jointly and severally to the terms and
excussion? conditions of the Surety Bond. When PAGRICO
defaulted, PNB demanded payment to R&B
A: Yes, both with respect to the guarantor and to Surety; R&B Surety, in turn, demanded payment to
the principal debtor (Art. 2064, NCC). Cochingyan and Villanueva. R&B sued them.
Villanueva argued that the complaint was
CONTINUING GUARANTY premature because PNB had not yet proceeded
against R&B Surety to enforce the latter's liability
Q: What is continuing guaranty or suretyship? under the Surety Bond. Is the contention correct?
A: A continuing guaranty is one which covers all A: No. Indemnity Agreements are contracts of
transactions, including those arising in the future, indemnification not only against actual loss but
which are within the description or contemplation against liability as well. While in a contract of
of the contract of guaranty until the expiration or indemnity against loss an indemnitor will not be
termination thereof. liable until the person to be indemnified makes
payment or sustains loss, in a contract of indemnity
GR: It is not limited to a single transaction but against liability, as in this case, the indemnitor's
contemplates a future course of dealings, liability arises as soon as the liability of the person
covering a series of transactions generally for an to be indemnified has arisen without regard to
indefinite time or until revoked. whether or not he has suffered actual loss.
Accordingly, R & B Surety was entitled to proceed
413
against petitioners not only for the partial 3. In case there are two or more sureties,
payments already made but for the full amount they may justify severally in amounts less
owed by PAGRICO to the PNB. (Cochingyan, Jr. v. than that expressed in the undertaking, if
R&B Surety and Ins. Co.,GR.No.L-47369, June 30, the entire sum justified to is equivalent to
1987) the whole amount of bail demanded.
(Sec. 12, Rule 114, Rules of Court)
C. EXTINGUISHMENT OF GUARANTY
Q: What is the nature of a bond?
Q: What are the grounds for extinguishing a
contract of guaranty? A: All bonds including “judicial bonds” are
contractual in nature.
A:
1. Principal obligation is extinguished Q: What is a Judicial Bond?
2. Same causes as all other obligations
3. If creditor voluntarily accepts immovable or A: Judicial bonds constitute merely as a special class
other properties in payment of the debt (even of contracts of guaranty, characterized by the fact
if he should afterwards lose the same through that they are given in virtue of a judicial order.
eviction or conveyance of property) (Art. 2077)
4. Release in favor of one of the guarantors, w/o Q: What is the liability of the surety if the creditor
consent of the others, benefits all to the extent was negligent in collecting the debt?
of the share of the guarantor to whom it has
been granted (Art. 2078) A: A surety is still liable even if the creditor was
5. Extension granted to debtor by creditor negligent in collecting from the debtor. The
without consent of guarantor (Art. 2079) contract of suretyship is not that the oblige will see
6. When by some act of the creditor, the that the principal pays the debt or fulfills the
guarantors even though they are solidarily contract, but that the surety will see that the
liable cannot be subrogated to the rights, principal pay or perform(PNB v. Manila Surety &
mortgages, and preferences of the former (Art. Fidelity Co., Inc., 14 SCRA 776, 1965)
2080)
Q: What is the effect of violation by the creditor of
D. LEGAL AND JUDICIAL BONDS the terms of the surety agreement?
Q: What is a Bond? A: A violation by the creditor of the terms of the

surety entitles the surety to be released therefrom.
A: A bond, when required by law, is commonly (Associated Ins. & Surety Co. v. Bacolod Murcia
understood to mean an undertaking that is Milling Co., GR. No. L-12334, May 22, 1959)
sufficiently secured, and not cash or currency.
Whatever surety bonds are submitted are subject Q: What is the effect of a surety bond filed for an
to any objections as to their sufficiency or as to the alien staying in the country which is forfeited for
solvency of the bondsman. violating its terms?
Q: What is a Bondsman? A: The effect of the violation is that its subsequent

unauthorized cancellation thru mistake or fraud
A: A bondsman is a surety offered in virtue of a does not relieve the surety. A bond surrendered
provision of law or a judicial order. He must have thru mistake or fraud may, therefore, be considered
the qualifications required of a guarantor and in as a valid and subsisting instrument. (Far Eastern
special laws like the Rules of Court. Surety and Ins. Co., v. CA, GR No. L-12019, Oct 16,
1958)
Q: What are the qualifications to a property bond?
Q: What is the rule when the performance of a
A: The necessary qualifications of sureties to a bond is rendered impossible?
property bond shall be as follows:
1. Each of them must be a resident owner of A: It is the surety’s duty to inform the court of the
real estate with in the Philippines; happening of the event so that it may take action or
2. Where there is only one surety, his real decree in the discharge of the surety when the
estate must be worth at least the amount performance of the bond is rendered impossible by
of the undertaking; an act of God, or the obligee, or the law. (People v.
414 CIVIL LAW TEAM

CREDIT TRANSACTIONS
Otiak Omal & Luzon Co., Inc., GR. No. L-14457, June
30, 1961)
PLEDGE, MORTGAGE, AND ANTICHRESIS
Q: What is pledge, mortgage and antichresis? Distinguish.
A:
PLEDGE MORTGAGE (Real) ANTICHRESIS
Definition
An accessory contract whereby a debtor
It is a contract whereby the debtor A contract whereby the CR
delivers to the creditor or a third person a
secures to the creditor the fulfillment acquires the right to receive the
movable or personal property, or
of a principal obligation, specially fruits of an immovable of the
document evidencing incorporeal rights,
subjecting to such security, debtor, with the obligation to
to \secure the fulfillment of a principal
immovable property or real rights apply them to the payment of
obligation with the condition that when
over immovable property, in case the interest, if owing, and thereafter
the obligation is satisfied, the thing
principal obligation is not paid or to the principal of his credit.
delivered shall be returned to the pledgor
complied with at the time stipulated.
with all its fruits and accessions, if any.
Object of the contract
movable or personal property, or immovable property or real rights
fruits of an immovable
document evidencing incorporeal rights over immovable property
Necessity of delivery
Property is delivered to the
Property must be delivered Delivery is not necessary
creditor
Q: What are the similarities of pledge and 3. Where there was failure of consideration
mortgage?
Q: What are the obligations that can be secured by
A: pledge, mortgage and antichresis?
1. Both are accessory contracts;
2. Both pledgor and mortgagor must be the A:
absolute owner of the property; 1. Valid obligations
3. Both pledgor and mortgagor must have the 2. Voidable obligations
free disposal of their property or be authorized 3. Unenforceable obligations
to do so; and 4. Natural obligations
4. In both, the thing proffered as security may be 5. Conditional obligations
sold at public auction, when the principal
obligation becomes due and no payment is Q: What rules are common to pledge and
made by the debtor. mortgage?
Q: Are the contracts of pledge, mortgage or A:

antichresis indivisible? 1. Constituted to secure the fulfillment of a valid
principal obligation.
A: GR: A pledge, mortgage or antichresis is 2. Pledgor or mortgagor must be the absolute
indivisible. owner of the thing pledged or mortgaged.
3. They must have the free disposal of their
Note: The mortgage is indivisible even if the property, and in the absence thereof, that they
obligation of the debtor is joint and not solidary. be legally authorized for such purpose.
Generally, the divisibility of the principal obligation 4. Debtor retains ownership of the thing given as
is not affected by the indivisibility of the pledge or a security.
mortgage.
Q: May property acquirable in the future be
XPNs: mortgaged?
1. Where each one of several things
guarantees determinate portion of the A: No. Where the mortgagor mortgaged a property
credit (Art. 2089) and in the contract he agreed to mortgage
2. Where only a portion of the loan was additional properties which he may acquire in the
released future, there was no valid mortgage as to the latter
415
because he was not yet the owner of the properties Q: What is the extent of the liability of an
at the time of the mortgage (Dilag v. Heirs of accommodation mortgagor?
Ressurrecion, No. 48941, May 6, 1946).
A: It extends up to the loan value of their
Q: Is mortgage constituted to secure future mortgaged property and not to the entire loan
advances valid? itself.
A: Yes. It is a continuing security and not discharged PACTUM COMMISSORIUM

by repayment of the amount named in the
mortgage, until the full amount of the advances is Q: What is pactum commisorium?
paid. However, a chattel mortgage can only cover
obligations existing at the time the mortgage is A: It is a stipulation whereby the thing pledged or
constituted and not to obligations subsequent to mortgaged or subject of antichresis shall
the execution of the mortgage. automatically become the property of the creditor
in the event of non-payment of the debt within the
Q: Is a third person who pledged and mortgaged term fixed. Such stipulation is null and void.
his property liable for any deficiency?
Q: What are the elements of pactum
A: GR: No. commissorium?
XPN: If the third party pledgor or mortgagor A:

expressly agreed to be bound solidarily with 1. There is a pledge, mortgage or antichresis of a
the principal debtor. property by way of security; and
2. There is an express stipulation for the
Q: What is the right of an owner of personal automatic appropriation by the creditor of the
property pledged without authority? property in case of non-payment
A: He may invoke Art. 559, NCC. The defense that Note: What are prohibited are those stipulations
pawnshop owner acquired ownership of the thing executed or made simultaneously with the original
in good faith is not available. contract, and not those subsequently entered into.
Note: Art. 559 – The possession of movable property Q: ABC loaned to MNO P40,000 for which the
acquired in good faith is equivalent to a title. latter pledged 400 shares of stock in XYZ Inc. It
Nevertheless, one who has lost any movable or has was agreed that if the pledgor failed to pay the
been unlawfully deprived thereof, may recover it from loan with 10% yearly interest within four years,
the person in possession of the same. the pledgee is authorized to foreclose on the
shares of stock. As required, MNO delivered
If the possessor of a movable lost or of which the possession of the shares to ABC with the
owner has been unlawfully deprived, has acquired it in understanding that the shares would be returned
good faith at a public sale, the owner cannot obtain its to MNO upon the payment of the loan. However,
return without reimbursing the price paid therefore. the loan was not paid on time. A month after 4
years, may the shares of stock pledged be deemed
Q: What is the nature of an assignment of rights to owned by ABC or not? Reason.
guarantee an obligation of a debtor?
A: The shares of stock cannot be deemed owned by
A: It is in effect a mortgage and not an absolute ABC upon default of MNO. They have to be
conveyance of title which confers ownership on the foreclosed. Under Article 2088, NCC, the creditor
assignee (Manila Banking Corp. v. Teodoro, Jr., G.R. cannot appropriate the things given by way of
No. 53955, Jan. 13, 1989) pledge. And even if the parties have stipulated that
ABC becomes the owner of the shares in case MNO
ACCOMMODATION MORTGAGE defaults on the loan, such stipulation is void for
being a pactum commissorium. (2004 Bar
Q: Who is an accommodation mortgagor? Question)
A: He is a third person who is not a party to a Q: To secure a loan obtained from a rural bank,
principal obligation and secures the latter by Purita assigned her leasehold rights over a stall in
mortgaging or pledging his own property. the public market in favor of the bank. The deed of
assignment provides that in case of default in the
416 CIVIL LAW TEAM

CREDIT TRANSACTIONS
payment of the loan, the bank shall have the right acquisition is automatic without need of any further
to sell Purita's rights over the market stall as her action. In the instant problem another act is
attorney-in-fact, and to apply the proceeds to the required to be performed, namely, the conveyance
payment of the loan. of the property as payment (dacion en pago). (1999
Bar Question)
Was the assignment of leasehold rights a
mortgage or a cession? Why? Q: In order to secure a bank loan, XYZ Corporation
Assuming the assignment to be a mortgage, does surrendered its deposit certificate, with a maturity
the provision giving the bank the power to sell date of September 1, 1997 to the bank. The
Purita's rights constitute pactum commissorium or corporation defaulted on the due repayment of
not? Why? the loan, prompting the bank to encash the
deposit certificate. XYZ Corporation questioned
A: The assignment was a mortgage, not a cession, the above action taken by the bank as being a case
of the leasehold rights. A cession would have of pactum commissorium. The bank disagrees.
transferred ownership to the bank. However, the What is your opinion?
grant of authority to the bank to sell the leasehold
rights in case of default is proof that no such A: I submit that there is no pactum commissorium
ownership was transferred and that a mere here. Deposits of money in banks and similar
encumbrance was constituted. There would have institutions are governed by the provisions of
been no need for such authority had there been a simple loans (Art. 1980, NCC). The relationship
cession. between the depositor and a bank is one of creditor
and debtor. Basically, this is a matter of
No, the clause in question is not a pactum compensation as all the elements of compensation
commissorium. It is pactum commissorium when are present in this case. (BPI v. CA, G.R. No. 104612,
default in the payment of the loan automatically May 10, 1994) (1997 Bar Question)
vests ownership of the encumbered property in the
bank. In the problem given, the bank does not Q: Spouses Uy Tong purchased seven motor
automatically become owner of the property upon vehicles from Bayanihan Investment payable in
default of the mortgagor. The bank has to sell the installments. It was agreed that if the spouses
property and apply the proceeds to the should fail to pay their obligation, Bayanihan will
indebtedness. (2001 Bar Question) automatically be the owner of the apartment
which the spouses has a leasehold right. The
Q: X borrowed money from Y and gave a piece of spouses after paying the downpayment, failed to
land as security by way of mortgage. It was pay the balance, hence, Bayanihan filed an action
expressly agreed between the parties in the for specific performance against the spouses. The
mortgage contract that upon nonpayment of the judgment provided that in case the spouses failed
debt on time by X, the mortgaged land would to pay the obligation within 30 days from notice,
already belong to Y. If X defaulted in paying, would they are to execute a Deed of Absolute Sale over
Y now become the owner of the mortgaged land? the apartment and/or leasehold rights. Is the
Why? stipulation a pactum commissorium?
A: No, Y would not become the owner of the land. A: No. The questioned agreement evinces no basis
The stipulation is in the nature of pactum for the application of pactum commissorium. There
commissorium which is prohibited by law. The is no contract of pledge or mortgage entered into
property should be sold at public auction and the by the parties. Bayanihan sought the intervention
proceeds thereof applied to the indebtedness. Any of the court by filing an action for specific
excess shall be given to the mortgagor. performance. Hence there was no automatic
appropriation of the property. (Uy Tong v. CA, G.R.
Q: Suppose in the preceding question, the No. 77465, May 21, 1988)
agreement between X and Y was that if X failed to
pay the mortgage debt on time, the debt shall be IV. PLEDGE
paid with the land mortgaged by X to Y. Would
your answer be the same as in the preceding A. DEFINITION
question? Explain.
Q: What is pledge?
A: No, the answer would not be the same. This is a
valid stipulation and does not constitute pactum A: A contract where debtor delivers to creditor or
rd
commissorium. In pactum commissorium, the 3 person a movable or document evidencing
417
incorporeal right for the purpose of securing

fulfillment of a principal obligation with the A: No. There is no valid pledge because Mike is not
understanding that when the obligation is fulfilled, the absolute owner of the property pledged. He
the thing delivered shall be returned w/ all its fruits who is not the owner or proprietor of the property
and accessions. pledged or mortgaged to guarantee the fulfillment
of a principal obligation, cannot legally constitute
B. KINDS OF PLEDGE such a guaranty as may validly bind the property in
favor of his creditor, and the pledgee or mortgagee
Q: What are the kinds of pledge? in such a case acquires no right whatsoever in the
property pledged or mortgaged. There is likewise
A: no valid deposit, in this case, where the principal
1. Conventional - by agreement of parties purpose for receiving the object is not safekeeping.
2. Legal - by operation of law (Calibo Jr. v. CA, G.R. No. 120528, Jan. 29, 2001)
Note: A thing lawfully pledged to one creditor, cannot Q: Is constructive or symbolic delivery of the thing
be pledged to another as long as the 1st pledge sufficient to constitute pledge?
subsists. (Mission de San Vicente v. Reyes 19 Phil 524)
A: GR: No.
C. ESSENTIAL REQUISITES
XPN: If the pledge consists of goods stored in a
Q: What are the essential requisites for a contract warehouse for purposes, of showing the
of pledge? pledgee’s control over the goods, the delivery
to him of the keys to the warehouse is
A: sufficient delivery of possession
1. Constituted to secure the fulfillment of a (constructive/symbolic delivery).
principal obligation;
2. Pledgor is the absolute owner of the thing The type of delivery will depend upon the
pledged; nature and peculiar circumstances of each case
3. Persons constituting the pledge have the free (Yuliongsiu v. PNB, G.R. No. L-19227, Feb. 17,
disposal of their property, and in the absence 1968)
thereof, that they be legally authorized for the
purpose. (Art. 2085, NCC) Q: What is the rationale behind the requirement
that the pledge cannot take effect against third
Note: A contract of pledge not appearing in a public persons if the thing is not described and the date
instrument does not affect its validity. It is valid does not appear in a public instrument?
between the parties.
A: To forestall fraud because a debtor may attempt
Q: What kind of possession is required in pledge? to conceal his property from his creditors when he
sees it in danger of execution by simulating a
A: The mere taking of the property is not enough. pledge thereof with an accomplice (Tec Bi & Co. v.
There must be continuous possession of the thing. Chartered Bank of India, No. 9802, Feb. 5,
However, the pledgee is allowed to temporarily 1916/March 31, 1917).
entrust the physical possession of the thing pledged
to the pledgor without invalidating the contract. Q: Can incorporeal rights evidenced by proper
But here, the pledgor would be in possession as a document be pledged?
mere trustee and his possession is subject to the
order of the pledgee. A: Yes (Art. 2095, NCC). It is, however, required that
the actual instrument be delivered to the pledge.
Q: Pablo owns a tractor which he left with his son More, if the instrument is a negotiable document, it
Mike for safekeeping. Mike then offered the said must be indorsed.
tractor to Calibo as security for the payment of his
debt. When Pablo came back and learned that the D. OBLIGATIONS OF PLEDGOR AND PLEDGEE
tractor was in the custody of Calibo, he demanded
its return. Calibo, however, refused. Calibo alleged Q: Who are the parties in a contract of pledge?
that the tractor was pledged to him, and in the
alternative, the tractor was left with him in the A:
concept of deposit and he may validly hold on to it 1. Pledgor – the debtor; the one who delivers the
until Mike pays his obligation. Is Calibo correct? thing pledged to the creditor
418 CIVIL LAW TEAM

CREDIT TRANSACTIONS
2. Pledgee – the creditor; the one who receives Q: Does the debtor continue to be the owner of
the thing pledged the thing in case the same is expropriated by the
State?
Q: What are the rights of a pledgee?
A: No. Ownership is transferred to the
A: expropriating authority.
1. Retain the thing until debt is paid. (Art. 2018,
NCC) Art. 2098 Note: The creditor may bring actions pertaining to the
2. To be reimbursed for the expenses made for owner of the thing pledged in order to recover it from,
the preservation of the thing pledged. (Art. or defend it against a third person (Art. 2103, NCC).
2099, NCC)
3. Creditor may bring any action pertaining to the Q: Can the debtor ask for the return of the thing
pledgor in order to recover it from or defend it pledged against the will of the creditor?
rd
against a 3 person. (Legal Subrogation) (Art.
2103) A: GR: No.
Q: What are the obligations of a pledgee? XPNs:

1. If the debtor has paid the debt and its
A: interest, with expenses in a proper case
1. Take care of the thing pledged with the (Art. 2105, NCC).
diligence of a good father of a family. (Art. 2. If the thing is in danger of destruction or
2099, NCC) impairment provided, the pledgor offers
an acceptable substitute for it which is of
Note: Pledgee is liable for the loss or the same kind and not of inferior quality
deterioration of the thing by reason of fraud, and without prejudice to the application
negligence, delay, or violation of the terms of the of Art. 2108 whenever warranted. (Art.
contract. 2107)
2. GR: Pledgee cannot deposit the thing pledged Q: Can the pledgee cause the sale of the thing
rd
to a 3 person. pledged in public auction where the obligation is
not yet due?
XPN: Unless there is stipulation to the contract (Art.
2100, NCC) A: Yes, if without the fault of the pledge, there is
danger of destruction, impairment or diminution in
Note: Pledgee is liable for the loss or deterioration of value of the thing pledged. The proceeds of the
the thing pledged caused by the acts or auction shall be security for the principal obligation
negligence of the agents or employees of the in the same manner as the thing originally pledged
pledgee. (Art. 2108, NCC).
3. Apply the fruits, income, dividends, or Q: What are the rights of the creditor who is
interests produced or earned by the property, deceived on the substance or quality of the thing
to interests or expenses first, then to the pledged?
principal. (Art. 2102, NCC)
A: To demand:
4. GR: Cannot use the thing pledged without 1. from the pledgor an acceptable substitute
authority. (Art. 2104) of the thing; or
2. the immediate payment of the principal
XPNs: obligation (Art. 2109, NCC).
a. If the pledgor had given him authority
or permission to use it; Note: The remedies are alternative and not
b. If the use of the thing is necessary for cumulative. Only one may be chosen. The law used the
its preservation but only for that conjunctive “or”. Either one is more convenient than
purpose. annulment.
5. Return the thing pledged to the pledgor when Q: What is the effect of the return of the thing
the principal obligation is fulfilled or satisfied pledged to the pledgor by the pledgee?
it.
A: The pledge shall be extinguished. Any stipulation
to the contrary shall be void (Art. 2110, NCC).
419
Q: What is the remedy of the pledgee if no sale

Q: What is the presumption when the thing is was effected on the second auction?
found in the possession of the pledgor subsequent
to the perfection of the pledge? A: The pledgee is now allowed to appropriate the
thing pledged. This is an exception to the
A: There is prima facie presumption that the thing prohibition against pactum commissorium.
pledged has been returned by the pledgee to the
pledgor or owner, in any of the following Q: What is deed of acquittance?
circumstances:
1. If the thing is found in the possession of A: It is a document of the release or discharge of
the pledgor or owner after the pledge had the pledgor from the entire obligation including
been perfected; or interests and expenses. This shall be executed by
2. If the thing is found in the possession of a the pledgee after appropriating the thing in case a
third person who received it from the no sale was made in a second auction.
pledgor or owner after the perfection of
nd
the pledge (2 par., Art. 2110, NCC). Q: Who can bid in the public auction?
Note: It is presumed that the accessory obligation of A:

pledge has been remitted when the thing pledged, 1. The public
after its delivery to the creditor, is found in the 2. Pledgor/owner/debtor – shall be preferred if
possession of the debtor, or of a third person who same terms as the highest bidder is offered
owns the thing (Art. 1274, NCC). 3. Pledgee/creditor – he must not be the only
one bidder, otherwise, his bid is invalid and
Q: What is the requisite for the renunciation or void
abandonment of the pledge by the pledgee?
Q: Can checks be accepted as payment as purchase
A: There must be a statement in writing to that price in a public sale?
st
effect (1 sentence, Art. 2111, NCC).
A: No, they are not legal tenders. (CFI v. CA, No. L-
Note: The renunciation of the pledge is not contrary to 4191, April 30, 1952).
law, public order, public policy, morals or good
customs. Further, Art. 1356 of the NCC, which speaks Note: The same rule applies to promissory notes, bill
of the form of contracts, must be complied with.
of exchange and other negotiable instruments because
they produce the effect of payment only when they
Q: Is acceptance or return of the thing necessary have been encashed.
for the validity of the renunciation under Art.
2111? Q: May a third person pay the pledgor’s debt?
A: No. it is not a case of donation where acceptance A: Yes, if he has any interest in the fulfillment of the
is necessary to make the donation valid. principal obligation (Art. 2117, NCC).
Q: Suppose the thing was not returned, is there Q: What is the rule when what has been pledged is
extinction of the pledge? a “credit”?
A: Yes. Even if the thing was not returned, as long A: Yes. The pledgee may collect and receive the
as there is an effective renunciation, abandonment amount due. He shall apply the same to the
or waiver, the pledge is already extinguished. payment of his claim, and deliver the surplus,
should there be any, to the pledgor (Art. 2118,
The pledgor is considered a depositor and the NCC).
pledgee shall become a depositary of the thing.
Accordingly, the law on deposit will apply. Q: Santos made time deposits with OBM. IRC,
through its president Santos, applied for a loan
Q: What happens when the property was not sold with PNB. To secure the loan, Santos executed a
at the first auction (such as when there are no Deed of Assignment of the time deposits in favor
participating bidders)? of PNB. When PNB tried to collect from OBM, the
latter did not pay the CTDs. PNB then demanded
A: There will be another setting for the second payment from Santos and IRC, but the latter
auction following the same formalities. refused payment alleging that the obligation was
420 CIVIL LAW TEAM

CREDIT TRANSACTIONS
deemed paid with the irrevocable assignment of

the CTDs. Q: When may the owner ask that the thing
pledged be deposited judicially or extrajudicially?
1. Is the liability of IRC deemed paid by
virtue of the deed of assignment? A:
2. Is OBM liable for damages 1. If the creditor uses the thing without authority
2. If he misuses the the thing in any other way; or
A: 3. If the thing is in danger of being lost or
1. No. For all intents and purposes, the deed of impaired because of the negligence or willful
assignment in this case is actually a pledge. act of the pledge (Art. 2106, NCC)
Where a CTD in a bank, payable at a future
time, was handed over by a debtor to his Q: Does the pledgor have the right to demand the
creditor, it was not payment, unless there was return of the thing pledged against the will of the
an express agreement on the part of the creditor?
creditor to receive it as such.
2. Yes. While it is true that no interest shall be A: No. He cannot ask for its return until the
due unless it has been expressly stipulated in obligation is fully paid including interest due
writing, this applies only to interest for the use thereon and expenses incurred for its preservation
of money. It does not comprehend interest (Art. 2105, NCC)
paid as damages. Santos has the right to
recover damages resulting from the default of Q: What are the requisites before the pledgor may
OBM and the measure of such damages is substitute the thing pledged with another thing?
interest at the legal rate of 6% per annum on
the amounts due and unpaid at the expiration A:
of the periods respectively provided in the 1. Pledgor has reasonable grounds to fear the
contracts. (Integrated Realty Corp. v. PNB, destruction or impairment of the thing
G.R. No. 60705, June 28, 1989) pledged;
2. No fault on the part of the pledge
Q: What is the rule when two or more things are 3. Pledgor is offering in place of the thing,
pledged? another thing in pledge which is of the same
kind and quality as the former; and
A: The pledgee may choose which he will cause to 4. Pledgee does not choose to exercise his right
be sold, unless there is a stipulation to the contrary to cause the thing pledged to be sold at public
st
(1 sentence, Art. 2119, NCC). auction (Art. 2107, NCC)
Q: What is the restriction on the right of the F. PERFECTION

st
pledgee under the 1 sentence of Art. 2119?
Q: How is a contract of pledge perfected?
A: He may only demand the sale of only as many of
the things as are necessary for the payment of the A: A contract of pledge is perfected when the thing
nd
debt (2 sentence, Art. 2119, NCC). pledged is placed in the actual possession of or
delivered to the pledgee or a third person
E. RIGHTS OF PLEDGOR designated by the parties by common consent. (Art.
2093, NCC)
Q: What are the rights of the pledgor?
Note: If Art. 2093 is not complied with, the pledge is
A: void.
1. Right to dispose the thing pledged, provided
there is consent of the pledgee (Art. 2097, Q: Four carabaos were pledged by T to E. T is the
NCC) registered owner of the carabaos. The carabaos
were actually in the possession of J. E never took
Note: The pledge however, shall continue in possession of the carabaos. There is nothing in the
possession. contract which stated that J was by common
consent made the depositary of the carabaos in E’s
2. Right to ask that the thing pledged be behalf. Is there a lawfully constituted pledge?
deposited (Art. 2104 and Art. 2106, NCC)
A: None. The delivery of possession of the property
3. Right to substitute thing pledged (Art. 2107, pledged requires actual possession and a mere
NCC)
421
symbolic delivery is not sufficient. (Betita v Ganzon, the buyer of the thing pledged is a third person. The
49 Phil. 87) fact that the person claiming as pledgee has taken
actual physical possession of the thing sold will not
Q: What is the effect when possession or delivery prevent the pledge from being declared void insofar
of the thing pledged was not made? as the innocent stranger is concerned. (Tec Bi & Co.
v. Chartered Bank of India, Australia and China, 16
A: An agreement to constitute a pledge only gives O.G. 908; Ocejo, Perez and Co. v. International
rise to a personal action between the contracting Bank, 37 Phil. 631)
parties. Unless the movable given as a security by
way of pledge be delivered to and placed in the Q: What is the effect of an undated contract of
possession of the creditor or of a third person pledge?
designated by common agreement, the creditor
acquires no right to the property because pledge is A: An undated instrument of pledge cannot ripen
merely a lien and possession is indispensable to the into a valid pledge. (Betita v. Ganzon, 49 Phil. 87)
right of a lien.
G. FORECLOSURE
Q: What is the effect if the pledgee fails to take
the property pledged into his possession? Q: When may a pledgee foreclose the thing
pledged?
A: If a pledgee fails or neglects to take the property
pledged into his possession, he is presumed to have A: When there is no payment of the debt on time,
waived the right granted him by the contract. (U.S. the object of the pledge may be alienated for the
v. Terrel, 2 Phil. 222) purpose of satisfying the claims of the pledgee.
Q: What are the requisites to bind third persons in Q: What is the procedure for the public sale of a
a contract of pledge? thing pledged?
A: To bind third persons, the pledge must be A:

embodied in a public instrument where the 1. The obligation must be due and unpaid
following entries must appear - 2. The sale of the thing pledged must be at public
1. A description of the thing pledged; and auction
2. Statement of date when the pledge was 3. There must be notice to the pledgor and
executed. (Art. 2096, NCC) owner, stating the amount for which the sale is
to be held
Q: A is indebted to B. A pledges his diamond ring 4. The sale must be conducted by Notary Public.
to B. The ring is delivered to B, but in the public
instrument executed, there is no description of the H. PLEDGE BY OPERATION OF LAW
ring, and the date of the pledge does not appear. If
A sells the ring to C, does C have to respect the Q: What is a pledge created by operation of law?
pledge in favor of B?
A: Pledge by operation of law or Legal Pledges are
A: No. C does not have to respect the pledge since those constituted or created by operation of law.
as to him, the pledge is not effective and valid. This refers to the right of retention.
Q: What is the reason behind the requisites? Q: What rules apply to legal pledge?
A: The purpose of the requirements is to forestall A:

fraud, because a debtor may attempt to conceal his 1. The rules governing conventional pledge
property from his creditors when he sees it in applies.
danger of execution by simulating a pledge thereof 2. There is no definite period for the payment of
with an accomplice. (Tec Bi & Co. v. Chartered Bank the principal obligation. The pledge must,
of India, 41 Phil. 576) therefore, make a demand for the payment of
the amount due him. Without such demand,
Q: What is the effect if no public instrument is he cannot exercise the right of sale at public
made? auction. (De Leon)
A: When the contract of pledge is not recorded in a Q: What are the instances of legal pledges where
public instrument, it is void as against third persons; there is right of retention?
422 CIVIL LAW TEAM

CREDIT TRANSACTIONS
compensate him for the eventuality where the

A: purchase price is lesser than the amount of the
1. Art. 546 – Right of the possessor in good faith debt, wherein he cannot receive any deficiency
to retain the thing until refunded of necessary unless there is a contrary agreement or in case
expenses. of legal pledge, the pledgor is entitled to the
2. Art. 1707 – Lien on the goods manufactured or excess
work done by a laborer until his wages had 3. If the proceeds of the sale is less than the
been paid. amount due, the creditor has no right to
3. Art. 1731 – Right to retain of a worker who recover the deficiency and the pledgor is not
executed work upon a movable until he is paid. liable for the deficiency even if there is a
4. Art. 1914 – Right of an agent to retain the stipulation that he be so liable. Such
thing subject of the agency until reimbursed of stipulation is void.
his advances and damages (Arts. 1912 and
1913, NCC). Q: What is the meaning of the right of the
5. Art. 1994 – Right of retention of a depositary mortgagee or pledgee to foreclose?
until full payment of what is due him by reason
of the deposit. A: If the debtor failed to pay on maturity date, the
6. Art. 2004 – Right of the hotel-keeper to retain thing pledged or mortgaged may be sold at public
things of the guest which are brought into the auction as provided by law so that the proceeds
hotel, until his hotel bills had been paid. may be used for payment of the obligation.
Q: What must the pledgee do before he may cause

I. PLEDGE DISTINGUISHED FROM MORTGAGE
sale of the thing pledged?
A: The pledgee must first make a demand of the Q: Distinguish contract of pledge from chattel
amount for which the thing is retained. After the mortgage.
demand, the pledgee must proceed with the sale of
the thing within thirty (30) days. Otherwise, the A:
pledgor can require of him the return of the thing CHATTEL MORTGAGE PLEDGE
retained. Delivery
Delivery is not necessary Delivery is necessary
Q: To whom will the remainder of the price Registration
pertain? Registration in the
Registration in the
Chattel Mortgage register
Registry Property is not
is necessary for its
A: The remainder of the price of sale shall be necessary.
validity
delivered to the obligor. (Art. 2121)
Law governing the sale
Procedure for the sale of
Q: What are the instances when the pledgor may the thing given as
demand that the thing pledged be deposited Art. 2112, NCC
security is governed by
judicially or extrajudicially? Sec. 14, Act No. 1508
Excess
A: If the property is sold, the
1. Creditor uses the thing without authority If the property is
debtor is not entitled to
2. Creditor misuses the thing foreclosed, the excess
the excess unless
3. The thing is in danger of being lost or impaired goes to the debtor
otherwise agreed.
due to the negligence or willful acts of the Recovery of deficiency
pledgee. The creditor is entitled to
The creditor is not
recover the deficiency
entitled to recover the
Q: What are the effects of sale of the thing from the debtor except if
deficiency
pledged? the chattel mortgage is a
notwithstanding any
security for the purchase
stipulation to the
A: of property in
contrary.
1. Extinguish the principal obligation even if the installments
proceeds of the sale do not satisfy the whole Possession
amount of the obligation. Possession remains with Possession is vested in
2. If proceeds from the sale exceed the amount the debtor the creditor
due, the debtor is not entitled to the excess, Contract
the excess goes to the pledgee. This is to Formal contract Real contract
Recording in a public instrument
423
Must be in a public 1. It covers only immovable property and

instrument containing alienable real rights imposed upon
Must be recorded in a
description of the thing immovables
public instrument to bind
pledged and the date 2. It must appear in a public instrument
third persons
thereof to bind third 3. Registration in the registry of property is
persons rd
necessary to bind 3 persons
Q: Distinguish contract of pledge from real estate Q: What are the kinds of real mortgages?
mortgage.
A:
A: 1. Conventional mortgages – constituted
REAL ESTATE voluntarily by the contracting parties.
PLEDGE
MORTGAGE 2. Legal mortgage – required by law.
Real contract Consensual contract 3. Equitable mortgage – intention of the parties
Subject matter is Subject matter is real is to make the immovable as a security for the
personal property property performance of the obligation but the
Possession of the thing Possession of the thing formalities of a real mortgage are not
pledged is vested in the mortgaged remains with
complied with.
creditor the debtor
Pledgee has the right to
Q: Distinguish contract of real estate mortgage
receive the fruits of the
thing pledged, with the from contract of sale with right of repurchase.
obligation of applying the Mortgagee does not
same to the interest of possess such right A:
the debt, if owing, and REAL ESTATE SALE WITH RIGHT OF
the balance, if any, to the MORTGAGE REPURCHASE
principal Principal and
Accessory contract
Sale at public auction of independent contract
Sale may be judicial or There is transfer of title
the thing pledged is There is no transfer of
extrajudicial and possession of the
always extrajudicial title and possession of
Description of the thing property, although
Must be registered, the property
and the date of pledge conditional
otherwise, it is not valid Creditor has no right to The vendee a retro is
must appear in a public
against third persons the fruits of the property entitled to the fruits even
instrument otherwise, it
although binding during the pendency of during the period of
is not valid as to third
between the parties the mortgage redemption
person
Real right and real If the debtor fails to pay As soon as there is a
Not a real right his debt, the creditor consolidation of title in
property by itself
cannot appropriate the the vendee a retro, he
V. REAL MORTGAGE property mortgaged nor may dispose of it as an
dispose of it absolute owner
A. DEFINITION AND CHARACTERISTICS
Q: Is registration of mortgage a matter of right?
Q: What is real estate mortgage (REM)?
A: Yes. By executing the mortgage, the mortgagor is
A: It is a contract whereby the debtor secures to the understood to have given his consent to its
creditor the fulfillment of the principal obligation, registration, and he cannot be permitted to revoke
specially subjecting to such security immovable it unilaterally.
property or real rights over immovable property in
case the principal obligation is not fulfilled at the Q: What is the meaning of mortgage as a real and
time stipulated inseparable right?
B. ESSENTIAL REQUISITES A: The mortgage directly and immediately subjects

the property upon which it is imposed, whoever the
Q: What are the requisites for valid constitution of possessor may be, to the fulfillment of the
a real mortgage? obligation for whose security it was constituted
(Art. 2126, NCC).
A:
Q: What are the things that are deemed included
in the mortgage?
424 CIVIL LAW TEAM

CREDIT TRANSACTIONS
advancement is a continuing security and is not

A: discharged by repayment of the amount named in
1. Natural accessions the mortgage, until the full amount of the
2. Improvements advancements is paid (Mojica v. CA, G.R. No. 94247,
3. Growing fruits Sept. 11, 1991).
4. Rents
5. Income Q: May a mortgage credit be alienated or assigned
6. Insurance proceeds to a third person?
7. Expropriation price (Art. 2127, NCC)
A: Yes, in whole or in part, with the formalities
Q: When does the mortgage lien attach in case of required by law (Art. 2128, NCC).
new or future improvements?
Q: What are the requisites to be followed for
A: On the date of the registration of the mortgage assignment of credit?
(Luzon Lumber and Hardware Co., Inc, v. Quiambao,
G.R. No. L-5638, Mar. 20, 1954). A: An assignment of a credit, right or action shall
produce no effect as against third persons, unless it
Q: What is dragnet clause? appears in a public instrument, or the instrument is
recorded in the Registry of Property in case the
A: It is a mortgage provision which is specifically assignment involves real property (Art. 1625, NCC).
phrased to subsume all debts of past or future
origin. Such clauses are “carefully scrutinized and Q: May the creditor claim from the third person in
strictly construed”. The mortgage contract is also possession of the property payment of the credit?
one of adhesion (Philippine Bank of
Communications v. CA, G.R. No. 118552, Feb. 5, A: Yes, up to the extent secured by the property
1996). which the third party possesses, in terms and with
the formalities which the law establishes (Art. 2129,
Q: Is the amount stated in the contract controlling NCC).
in case of mortgage securing future
advancements? Q: Is a stipulation forbidding the owner from
alienating the immovable mortgaged valid?
A: No. The amount named in the contract does not
limit the amount for which the mortgage stand as a A: No. The prohibition to alienate is contrary to
security, if, from the four corners of the instrument public good inasmuch as the transmission of
the intent to secure future and other indebtedness property should not be unduly impeded (Report,
can be gathered. Code Commission, p. 58).
Q: Petitioner obtained a loan of P20K from Q: What are the laws that govern contract of real
defendant Rural Bank of Kawit. The loan was mortgage?
secured by a REM over a parcel of land. The
mortgage contract states that the mortgage will A:
cover the payment of the loan of P20K and such 1. New Civil Code
other loans or other advances already obtained or 2. Mortgage Law
to be obtained by the mortgagors from the bank. 3. Property Registration Decree (PD 1529)
The loan of P20k was fully paid. Thereafter they 4. Sec. 194, as amended by Act No. 3344, Revised
again obtained a loan of P18K, secured by the Administrative Code (Phil. Bank of Commerce
same mortgage. The spouses defaulted. The bank v. De Vera, G.R. No. L-18816, Dec. 29, 1962)
extra judicially foreclosed the mortgage. Was the 5. R.A. 4882 – law governing aliens who become
foreclosure sale valid? mortgagees.
A: Yes. It has long been settled that mortgages C. FORECLOSURE

given to secure future advancements are valid and
legal contracts; that the amounts named as Q: What is foreclosure?
consideration in said contract do not limit the
amount for which the mortgage may stand as A: It is a remedy available to the mortgagee in
security, if from the four corners of the instrument which he subjects the mortgaged property to the
the intent to secure future and other indebtedness satisfaction of the obligation.
can be gathered. A mortgage given to secure
425
Q: What are the kinds of foreclosure? (Rural Bank of Oroquieta v. CA, No. 53466, Nov. 10,
1980).
A:
1. Judicial – governed by Rule 68, Rules of Court Q: What is the significance of confirmation in
2. Extrajudicial – mortgagee is given a SPA to sell judicial foreclosure?
the mortgaged property (Act No. 3135)
A: Confirmation cuts off all the rights and interests
Q: What is the nature of judicial foreclosure? of the mortgagor and of the mortgagee and persons
holding under him, and with them the equity of
A: It is an action quasi in rem (Ocampo v. redemption in the property and vests them in the
Domalanta, 20 SCRA 1136). purchaser. Confirmation retroacts to the date of the
sale. It is a final order, not interlocutory (Ocampo v.
Q: Does an action for foreclosure of mortgage Domalanta, No. L-21011, Aug. 30, 1967).
survive the death of mortgagor?
Note: If the property has been mortgaged in favor of
A: Yes, because the claim is not pure money claim the Philippine National Bank, redemption is allowed
but an action to enforce a mortgage lien. Being so, within one year from the confirmation of the sale
the judgment rendered therein may be enforced by (Gonzales v. PNB, No. 24850, March 1, 1926).
a writ of execution. The action may be prosecuted
by the interested person against the executor or The redemption must be made within one year after
administrator independently of the testate or the sale, if the mortgagee is a bank, banking or credit
institutions (Sec. 78, R.A. 337).
intestate proceedings of the settlement of the
mortgagor’s estate “for the reason that such claims
Q: What are the effects of confirmation of sale?
cannot in any just sense be considered claims
against the estate, but the right to subject specific
A: There can be no redemption of the property
property to the claim arises from the contract of
after confirmation. Such confirmation retroacts to
the debtor whereby he has during life set aside
the date of the auction sale. After the confirmation,
certain property for its payment, and such property
the previous owners lose any right they may have
does not, except in so far as its value may exceed
had over the property, which rights in turn vested
the debt, belong to the estate” (Testamentaria de
on the Purchaser of the property (Lonzame v.
Don Amadeo Matute Olave v. Canlas, No. L-12709,
Amores, No. L-53620, Jan. 31, 1985).
Feb. 28, 1962).
Q: What is the basis of extrajudicial foreclosure?
Q: What are the options or remedies of the
mortgagee in case of death of the debtor?
A: An extrajudicial foreclosure may only be effected
if in the mortgage contract covering a real estate, a
A:
clause is incorporated therein giving the mortgagee
1. To waive the mortgage and claim the entire
the power, upon default of the debtor, to foreclose
debt from the estate of the mortgagor as an
the mortgage by an extrajudicial sale of the
ordinary claim;
mortgage property (Sec. 1, Act No. 3135, as
2. To foreclose the mortgage judicially and prove
amended by Act No. 4148).
any deficiency as an ordinary claim; or
3. To rely on the mortgage exclusively,
The authority to sell may be done in a separate
foreclosing the same at any time before it is
document but annexed to the contract of
barred by prescription, without right to file
mortgage. The authority is not extinguished by the
claim for any deficiency (Maglaque v. Planters
death of the mortgagor or mortgagee as it is an
Development Bank, GR No. 109472, May 18,
essential and inseparable part of a bilateral
1999).
agreement (Perez v. PNB, No. L-21813, July 30,
1966).
Q: When is judicial foreclosure considered
completed?
Q: How is extrajudicial foreclosure initiated?
A: A foreclosure sale is not complete until it is
A: By filing a petition with the office of the sheriff. It
confirmed and before such confirmation, the court
may also be initiated through a Notary Public
retains control of the proceedings by exercising
commissioned in the place where the property is
sound discretion in regard to it either granting or
situated.
withholding confirmation as the rights and interests
of the parties and the ends of justice may require
426 CIVIL LAW TEAM

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Note: Notice containing the place and date is required place. Prohibition does not lie to enjoin the
before an auction sale is made in extrajudicial implementation of a writ of possession. Once the
foreclosure. (Sec. 3, Act No. 3135) writ of possession has been issued, the trial court
has no alternative but to enforce the writ without
Q: What are the requisites of notice of sheriff’s delay. (Sps. Ong v. CA, G.R. No. 121494, June 8,
sale? 2000)
A: It must contain the correct number of the Q: Can the mortgagee recover the deficiency?
certificate of title and the correct technical
description of the real property to be sold (San Jose A: If there be a balance due to the mortgagee after
v. CA, GR No. 106953, Aug. 19, 1993). applying the proceeds of the sale, the mortgagee is
entitled to recover the deficiency (DBP v. Mirang,
Q: What is the purpose of notice of sale? G.R. No. L-29130, Aug. 8, 1975).
A: To inform the public of the nature and condition Note: In judicial foreclosure, the Rules of Court
of the property sold, and of the time, place and specifically gives the mortgagee the right to claim for
terms of the sale. deficiency in case a deficiency exists (Sec. 6, Rule 70).
Q: MBTC granted a loan to spouses Peñafiel, who While Act No. 3135 governing extrajudicial
mortgaged their two (2) parcels of land in foreclosures of mortgage does not give a mortgagee
Mandaluyong. The spouses defaulted in the the right to recover deficiency after the public auction
payment. MBTC instituted an extrajudicial sale, neither does it expressly or impliedly prohibit
foreclosure proceeding under Act No. 3135. The such recovery.
Notice of Sale was published in Maharlika
Pilipinas, which has no business permit in Q: What is stipulation of upset price?
Mandaluyong and its list of subscribers shows that
there were no subscribers from Mandaluyong. Did A: It is a stipulation of minimum price at which the
MBTC comply with the publication requirement property shall be sold to become operative in the
under Section 3, Act No. 3135? event of a foreclosure sale at public auction. It is
null and void.
A: No. Maharlika Pilipinas is not a newspaper of
general circulation in Mandaluyong where the REDEMPTION
property is located. To be a newspaper of general
circulation, it is enough that it is published for the Q: What is redemption?
dissemination of local news and general
information, that it has a bona fide subscription list A: Transaction by which the mortgagor reacquires
of paying subscribers, and that it is published at or buys back the property which may have passed
regular intervals. The newspaper must be available under the mortgage or divests the property of the
to the public in general, and not just to a select few lien which the mortgage may have created.
chosen by the publisher. Otherwise, the precise
objective of publishing the notice of sale in the
newspaper will not be realized. (Metropolitan Bank Q: What are the kinds of redemption?
and Trust Company, Inc. v. Eugenio Peñafiel, G.R.
No. 173976, Feb. 27, 2009) A:
1. Equity of redemption – right of mortgagor to
Q: May a mortgagor enjoin the implementation of redeem the mortgaged property after his
a writ of possession on the ground that there is a default in the performance of the conditions of
pending case for annulment of the extrajudicial the mortgage but before the sale of the
foreclosure of the REM? mortgaged property or confirmation of sale. It
applies in case of judicial foreclosure.
A: No. As a rule, any question regarding the validity 2. Right of redemption – right of the mortgagor
of the mortgage or its foreclosure cannot be a legal to redeem the mortgaged property within one
ground for refusing the issuance of a writ of year from the date of registration of the
possession. Regardless of whether or not there is a certificate of sale. It applies in case of
pending suit for annulment of the mortgage or the extrajudicial foreclosure.
foreclosure itself, the purchaser is entitled to a writ
of possession, without prejudice to the outcome of Q: X and Y, judgment creditors of A, obtained the
the case. Hence, an injunction to prohibit the transfer of the title of the mortgaged property in
issuance of writ of possession is entirely out of their names. Earlier, A executed a mortgage over
427
the same property in favor of FGU Insurance. The Q: Is the period of redemption a prescriptive
latter mortgage was registered. When A defaulted, period?
FGU foreclosed the property. A certificate of sale
was thereafter issued in FGU’s favor, which was A: No. The period of redemption is not a
confirmed by the RTC. However, before the new prescriptive period but a condition precedent
TCT could be issued, X and Y filed their respective provided by law to restrict the right of the person
motion for intervention and to set aside the exercising redemption.
judgment alleging that they are the new owners of
the property and the failure of FGU to implead X If a person exercising the right of redemption has
and Y in the action for foreclosure deprived the offered to redeem the property within the period
latter of due process. Is the contention of X and Y fixed, he is considered to have complied with the
correct? condition precedent prescribed by law and may
thereafter bring an action to enforce redemption.
A: No. Subordinate lien holders acquire only a lien
upon the equity of redemption vested in the If, on the other hand, the period is allowed to lapse
mortgagor, and their rights are strictly subordinate before the right of redemption is exercised, then
to the superior lien of the mortgagee. Such equity the action to enforce redemption will not prosper,
of redemption does not constitute a bar to the even if the action is brought within the ordinary
registration of the property in the name of the prescriptive period.
mortgagee. Registration may be granted in the
name of the mortgagee but subject to the Q: D obtained a loan from C secured by a REM
subordinate lien holders’ equity of redemption, over a parcel of land. When D defaulted, C
which should be exercised within ninety (90) days extrajudicially foreclosed the property. C was
from the date the decision becomes final. This declared the highest bidder in the auction. On
registration is merely a necessary consequence of October 29, 1993, C caused the registration of the
the execution of the final deed of sale in the certificate of sale. On November 9, 1994 D filed a
foreclosure proceedings. (Looyuko v. CA, G.R. No. complaint for annulment of the extrajudicial
102696, July 12, 2001) foreclosure and auction sale. Can D redeem the
property beyond the one year redemption period?
Q: What are the requisites for valid right of
redemption? A: No. D lost any right or interest over the subject
property primarily because of his failure to redeem
A: the same in the manner and within the period
1. Must be made within one year from the time prescribed by law. His belated attempt to question
of the registration of the sale. the legality and validity of the foreclosure
2. Payment of the purchase price of the property proceedings and public auction must accordingly
plus 1% interest per month together with the fail. (Sps. Landrito v. CA G.R. No. 133079, Aug. 9,
taxes thereon, if any, paid by the purchaser 2005)
with the same rate of interest computed from
the date of registration of the sale; and Q: What is the effect of failure to exercise right of
3. Written notice of the redemption must be redemption within the prescribed period?
served on the officer who made the sale and a
duplicate filed with the proper Register of A: The debtor loses his right over the property
Deeds (Rosales v. Yboa, G.R. No. L-42282, Feb.
28, 1983). Q: Can a mortgagor, whose property has been
extrajudicially foreclosed and sold, validly execute
Note: The redemptioner should make an actual tender a mortgage contract over the same property in
in good faith of the full amount of the purchase price favor of a third party during the period of
as provided above, i.e., the amount fixed by the court redemption?
in the order of execution or the amount due under the
mortgage deed, as the case may be, with interest A: Yes. The purchaser at the foreclosure sale merely
thereon at the rate specified in the mortgage, and all acquired an inchoate right to the property which
the costs, and judicial and other expenses incurred by could ripen into ownership only upon the lapse of
the bank or institution concerned by reason of the
the redemption period without his credit having
execution and sale and as a result of the custody of
been discharged, it is illogical to hold that during
said property less the income received from the
property. (Heirs of Quisimbing v. PNB, G.R. No. 178242,
that same period of twelve months the mortgagor
Jan. 20, 2009) was "divested" of his ownership, since the absurd
result would be that the land will consequently be
428 CIVIL LAW TEAM

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without an owner although it remains registered in

the name of the mortgagor. Such mortgage does
not involve a transfer, cession or conveyance of the
property but only constitutes a lien thereon
(Medida v. CA, G.R. No. 98334, May 8, 1992).
Q: DBP guaranteed LCD’s loan. When LCD

defaulted, DBP paid it and sought reimbursement.
LCD failed to reimburse DBP, hence DBP
extrajudicially foreclosed the REM, where it was
the highest bidder. The Sheriff’s certificate of sale
was annotated in the certificate of titles on April
30, 1976. La Campana failed to redeem the
properties. The court, among others, ordered LCD
to pay such sums of money unlawfully collected or
received by way of rentals and/or fruits from the
subject properties to DBP. When should the period
for the remittance of collected/received
rentals/fruits from the properties, of LCD to DBP
start?
A: In foreclosure proceedings, the buyer becomes

the absolute owner of the property purchased if it
is not redeemed during the prescribed period of
redemption, which is one year from the date of
registration of the sale. The Sheriff’s certificate of
sale was annotated in the certificate of titles on
April 30, 1976. DBP became the absolute owner of
the properties on May 1, 1977. Thus, the period to
be considered in determining the amount of
collection should start from May 1, 1997 up to the
time when the possession of the properties are
actually and completely surrendered to DBP. (La
Campana Development Corporation v. DBP, G.R. No.
146157, Feb. 13, 2009)
429
Flowchart of Extra-judicial Foreclosure of

Real Estate Mortgage
(Act No. 3135, as amended)

Execution of loan + REM agreement (REM-with
built-in SPA to sell in case of default)
Default of mortgagor for non-payment or

violation of the terms of the loan or REM
agreement
Filing of petition for sale with Clerk

of Court
Publication / posting of notice / Once a week for 3 consecutive weeks in a newspaper of

jurisdictional requirements general circulation
Foreclosure sale
Registration of the sale with Note: The redemption price:

Registry of Deeds
If the mortgagee is a bank:
outstanding obligation
One year redemption period
+ interest stipulated in the agreement
+ cost & expenses incurred

Consolidation of title by filing affidavit with
– income derived
Registry of Deeds (operative document)
If the mortgagee is not a bank:

Cancellation of title of the mortgagor and
issuance of new title in favor of mortgagee Bid price + 12% interest per annum
Note:
if after the expiration of the redemption period, the

Petition for writ of possession petition for writ of possession is mandatory or ministerial
but before the expiration of the redemption period,

such writ is only discretionary
430 CIVIL LAW TEAM

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Flowchart for Judicial Foreclosure of Real Estate Mortgage
(Rule 68, 1997 Rules of Civil Procedure)
Complaint with the court. Include

subsequent lien holders, otherwise
Entry of
equity of redemption will not be Hearing Judgment
judgment
divested. (Lampin v. IAC, No. L-
70987, Sept. 29, 1988))
90 days – 120 days

Upon failure to pay,
Mortgagee to from entry of
mortgagee to file
file motion for Execution sale judgment for
motion for execution
confirmation of mortgagor to pay his
foreclosing
sale debt, as determined
mortgage
by court
Issuance of order confirming

the sale (order is appealable)
(Ocampo v. Dimalanta, No. L- Cancellation of the title of
Registration of the order
21011, Aug. 30, 1967) the mortgagor/issuance of
confirming the sale
new title to the mortgagee
Wait for finality of order
* If mortgagee/bidder is bank or credit Secure a writ of

institution, mortgagor has one more year possession, by motion,
from registration of order confirming the from the same court that
sale + certificate of sale to redeem the ordered the foreclosure
property.
Note:
GR: In judicial foreclosure, there is only equity of redemption.
XPN: If the mortgagee is a bank or credit institution, there is one year right of redemption.
Equity of redemption – right of the mortgagor not to be divested of the ownership of the mortgaged
property and to stop the foreclosure sale by paying the mortgagee debt within 90-120 days from entry of
judgment and even beyond, until finality of order confirming the sale.
431
VI. CHATTEL MORTGAGE 1. Chattel Mortgage Law (Act No. 1508)

2. Provisions of the Civil Code on pledge
A. DEFINITION AND CHARACTERISTICS
Note: In case of conflict between nos. 1 and 2,
Q: What is chattel mortgage? the former shall prevail.
A: It is a contract by virtue of which personal 3. Revised Administrative Code

property is recorded in the Chattel Mortgage 4. Revised Penal Code (Art. 319)
Register as a security for the performance of an 5. Other special laws (i.e. Motor vehicle law)
obligation. 6. Ship Mortgage Decree of 1978 (P.D. No. 1521)
Q: What are the characteristics of chattel Q: What may be the subject matter of chattel
mortgage? mortgage?
A: A:
1. It is a formal contract because it must be 1. Shares of stock in a corporation;
embodied in a public instrument and recorded 2. Interest in business;
in the Chattel Mortgage Register; 3. Machinery and house of mixed materials
treated by parties as personal property and no
2. It is an accessory contract because its innocent third person will be prejudiced
existence depends upon an existing valid thereby (Makati Leasing and Finance Corp. v.
principal obligation; Weaver Textile Mills, Inc., No. L-58469, May,
16, 1983);
3. It is a unilateral contract because the 4. Vessels, the mortgage of which have been
obligation is only on the part of the creditor to recorded with the Philippine Coast Guard in
free the chattel from encumbrance upon the order to be effective as to third persons;
payment of the principal obligation; 5. Motor vehicles, the mortgage of which had
been registered both with the Land
Transportation Commission and the Chattel
4. It does not convey dominion but is only a
Mortgage Registry in order to affect third
security (In re: Du Tec Chuan, No. 11156,
persons;
March 28, 1916);
6. House which is intended to be demolished; or
7. Growing crops and large cattle (pars. 2 and 3,
5. It creates a real right or a lien which is being Sec. 7, Act No. 1508).
recorded and follows the chattel wherever it
goes (Northern Motors, Inc. v. Coquia, No. L- Note: Section 7 of the Chattel Mortgage Law does not
40018, Dec. 15, 1975). demand specific description of every chattel
mortgaged in the deed of mortgage, but only requires
Q: What are the requisites in a chattel mortgage? that the description of the mortgaged property be
such as to enable the parties to the mortgage or any
A: other person to identify the same after a reasonable
1. GR: It covers only movable property investigation and inquiry (Saldana v. Phil. Guaranty
Co., Inc., No. L-13194, Jan. 29, 1960); otherwise, the
XPN: When the parties treat as personalty that mortgage is invalid.
which is according to its nature realty.
Q: What is affidavit of good faith?
2. Registration with the Chattel Mortgage
Register. A: It is an oath in a contract of chattel mortgage
3. Description of the property. wherein the parties “severally swear that the
4. Accompanied by an affidavit of good faith to mortgage is made for the purpose of securing the
rd
bind 3 persons. obligation specified in the conditions thereof and
for no other purposes and that the same is a just
Note: The absence of an affidavit of good faith does and valid obligation and one not entered into for
not affect the validity of the contract. the purpose of fraud.”
Q: What are the laws that govern chattel Note: The absence of the affidavit vitiates the
mortgages? mortgage only as against third persons without notice
like creditors and subsequent encumbrances.
A:
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Q: Distinguish contract of chattel mortgage from Q: What is the effect of an increase in mortgage
contract of real estate mortgage. credit?
A: A: If the parties to a chattel mortgage take an oath

REAL ESTATE that the debt, honestly due and owing from the
CHATTEL MORTGAGE
MORTGAGE mortgagor to the mortgagee, it is obvious that a
Subject matter valid mortgage cannot be made to secure a debt to
Personal property Real property be thereafter contracted (11 C.J. 448). A mortgage
As to procedure that contains a stipulation in regard to future
Procedure for the foreclosure of a chattel mortgage advances in the credit will take effect only from the
is different from the procedure of foreclosure for date of the mortgage. The increase in the mortgage
real estate mortgage credit becomes a new mortgage (Belgian Catholic
As to Guaranty of Future Obligations Missionaries v. Magallanes Press, No. 25729, Nov.
Cannot guaranty future 24, 1926).
obligations because it May guaranty future
requires immediate obligations Q: What is the effect of obtaining a personal
recording judgment on the mortgage lien?
B. REGISTRATION A: It is deemed abandoned.
Q: What is the legal significance of registration? Q: What are the offenses involving chattel
mortgage?
A: It is tantamount to the symbolic delivery of the
mortgage to the mortgagee, which is equivalent to A:
actual delivery (Meyers v. Thein, No. 5577, Feb. 21, 1. Knowingly removing any personal property
1910). mortgaged under the Chattel Mortgage Law to
any province or city other than the one in
Q: What is the difference in registration of real which it was located at the time of the
mortgage and chattel mortgage? execution of the mortgage without the written
A: A deed of real estate mortgage is considered consent of the mortgagee; or
registered once recorded in the entry book. 2. Selling or pledging personal property already
However, chattel mortgage must be registered not mortgaged, or any part thereof, under the
only in the entry book but also in the Chattel terms of the Chattel Mortgage Law without
Mortgage Register. (Associated Insurance and the consent of the mortgagee written on the
Surety Co. v. Lim Ang, (CA) 52 Off. Gaz. 5218) back of the mortgage and duly recorded in the
Chattel Mortgage Register (Art. 319, RPC).
Q: When should the registration of the chattel
mortgage be made? C. FORECLOSURE
A: The law is silent on the time or period when Q: What is the procedure in foreclosure of a
registration should be made. The Court of Appeals chattel mortgage?
has held though that “the law is substantially and
sufficiently complied with where the registration is A: The mortgagee may, after thirty (30) days from
made by the mortgagee before the mortgagor has the time of the default or from the time the
complied with his principal obligation and no right condition is violated, cause the mortgaged property
of innocent third persons is prejudiced (Ledesma v. to be sold at public auction by a public officer (Sec.
Perez, 2 C.A. Rep. 126). 14, Act No. 1508)
Q: In case of foreclosure sale in chattel mortgage, The 30-day period to foreclose a chattel mortgage
may the creditor recover deficiency if the is the minimum period after violation of the
redemption price is less than the debt secured? mortgage condition for the mortgage
A: GR: CR may recover deficiency. The creditor has at least ten (10) days notice served
to the mortgagor
XPN: when the chattel mortgage is used to
secure the purchase of personal property in The notice of time, place and purpose of such sale,
installments (Recto Law). is posted
433
After the sale of the chattel at public auction, the 1. Covers only the Fruits of real property
right of redemption is no longer available to the
mortgagor. (Cabral v. Evangelista, 28 L-26860, July 2. Delivery of the property necessary so that CR
30, 1969) may receive the fruits therefrom
Q: What are the legal consequences of establishing Note: Delivery of the property to the creditor is
a chattel mortgage over a building erected not by required only in order that the creditor may
the owner of the land? receive the fruits and not for the validity of the
contract.
A: A building is immovable or real property whether
it is erected by the owner of the land, by a 3. Amount of principal and interest must be
usufructuary, or by a lessee. It may be treated as a specified in writing, otherwise, the contract
movable by the parties to a chattel mortgage but shall be void.
such is binding only between them and not on third
parties. As far as third parties are concerned, the 4. Express agreement that debtor will give
chattel mortgage does not exist. Possession to the CR and that CR will apply the
fruits to the interest and then to the principal.
VII. ANTICHRESIS
Note: The fruits of the immovable which is the
object of the antichresis must be appraised at
A. DEFINITION AND CHARACTERISTICS their actual market value at the time of the
application (Art. 2138).The property delivered
Q: What is antichresis? stands as a security for the payment of the
obligation of the debtor in antichresis. Hence, the
A: It is a contract whereby the CR acquires the right debtor cannot demand its return until the debt is
to receive the fruits of an immovable of the debtor, totally paid.
with the obligation to apply them to the payment of
interest, if owing, and thereafter to the principal of Q: Distinguish antichresis from:
his credit. 1. Real estate mortgage;
2. Pledge; and
Q: What are the characteristics of antichresis? 3. Pacto de retro sale.
A: A:
1. Accessory contract. REAL ESTATE
ANTICHRESIS
2. Formal contract – the amount of the principal MORTGAGE
and of the interest must both be in writing; Debtor usually retains
otherwise tdhe contract of antichresis is void. Property is delivered to
possession of the
creditor
3. It deals only with immovable property. property
4. It is a real right. Creditor acquires only
5. The creditor has the right to receive the fruits the right to receive the Creditor has no right to
of the immovable. fruits of the property; receive fruits, but
6. It is a real contract. does not produce a real mortgage creates real
7. It can guarantee all kinds of valid obligations. right unless registered in right against the property
the Registry Property
Note: It is not essential that the loan should earn Creditor obliged to pay
interest in order that it can be guaranteed with a the taxes and charges Creditor has no such
contract of antichresis. Antichresis is susceptible of upon the estate unless obligation
guaranteeing all kinds of obligations, pure or stipulated otherwise
conditional. [Javier v. Valliser, (CA) N. 2648-R, Apr. 29, There is an express
1950; Sta. Rosa v. Noble, 35 O.G. 27241] stipulation that the
creditor shall apply the
There is no such
A stipulation authorizing the antichretic creditor to fruits to the payment of
obligation on the part of
appropriate the property upon the non-payment of the interest, if owing, and
the mortgage
the debt within the period agreed upon is void (Art. thereafter to the
2038, NCC). principal of the debt.
Q: What is the form of a contract of antichresis ANTICHRESIS PLEDGE

and its contents? Refers to real property Personal property
Formal Real
A: FDA-Pa Principal and interest Need not be in writing,
434 CIVIL LAW TEAM

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must be specified in oral evidence may be 4. apply the fruits received for payment of
writing, otherwise allowed to prove the the outstanding interests, if any, and
contract is void same. thereafter of the principal.
ANTICHRESIS PACTO DE RETRO SALE Q: When can the antichretic debtor reacquire the
Creditor is given the right possession of his property?
to enjoy the fruits and
apply them to the Creditor does not have A: The debtor can only demand the return of the
payment of the interest such right property after having fully paid his obligations to
and to the principal of the creditor. It is not fair for the debtor to regain
the loan the possession of the property when his debt has
not been fully paid. Until there is full payment of
Q: Is prescription as a mode of acquiring the obligation, the property shall stand as security
ownership available to the creditor in antichresis? therefor (Macapinlac v. Gutierrez Repide, No.
18574, Sept. 20, 1922).
A: No. His possession of the property is not in the
concept of an owner but that of a mere holder Q: How can the creditor be exempted from the
during the existence of the contract (Ramirez v. CA, obligations imposed by Art. 2135?
G.R. No. L-38185, September 24, 1986).
A: The creditor may compel the debtor to re-enter
Q: How should the amount of payment in into the property.
antichresis be determined?
Note: Article 2135. The creditor, unless, there is a
A: The actual market value of the fruits at the time stipulation to the contrary, is obliged to pay the taxes
of the application thereof to the interest and the and charges upon the estate. He is also bound to bear
principal shall be the measure of such application the expenses necessary for its preservation and repair.
(Art. 2133, NCC).
Q: What is the remedy of the creditor in case of
Q: What is the effect if the amount of the principal nonpayment of his credit?
and of the interest is not specified in writing?
A: File:
A: The contract is void (Art. 2134, NCC). 1. an action for collection; or
2. a petition for the public sale of the
Q: Who are the parties to a contract of property (Barretto v. Barretto, No. 11933,
antichresis? Dec. 1, 1917).
A: VIII. QUASI-CONTRACTS
1. Antichretic creditor – one who receives the
fruits on the immovable property of the Q: What is a Quasi-Contract?
debtor.
2. Antichretic debtor – one who pays his debt A: Quasi-contracts are lawful, voluntary, and
through the application of the fruits of his unilateral acts which generally require a person to
immovable property. reimburse or compensate another in accordance
with the principle that no one shall be unjustly
B. OBLIGATIONS OF ANTICHRETIC CREDITOR enriched at the expense of another. (Art. 2142,
NCC)
Q: What are the obligations of an antichretic
creditor? Q: What are the bases for quasi-contracts?
A: To: A:
1. pay the taxes and charges assessable 1. No one must unjustly enrich himself at
against the property like real estate taxes another’s expense
and others; 2. if one benefits, he must reimburse
2. bear the necessary expenses for the 3. justice and equity
preservation of the property; 4. presumed consent of the person obliged to
3. bear the expenses necessary for the compensate (p. 347 Pineda)
repair of the property; and
435
A. NEGOTIORUM GESTIO Q: What is the rule if the owner is a minor?
Q: What is Negotiorum Gestio? A: Even if the owner is a minor, he is still liable

under the article for he should not be unjustly
A: This is a kind of quasi-contract where someone enriched at another’s expense. (Rotea v. Delupio,
called the gestor takes the management of the 67 Phil. 330)
business or property of another person known as
owner without the consent or authority of the Q: What are the causes for extinguishment of
latter. management?
Q: What are the essential requisites for A:

negostiorum gestio? 1. Repudiation or termination of the
management by the owner himself;
A: 2. Withdrawal of gestor from the management;
1. Taking charge of another’s business or and
property 3. Death, civil interdiction, insanity or insolvency
2. The property or business must have been of either party.
abandoned or neglected 1.
3. The officious manager (gestor) must not have B. SOLUTIO INDEBITI
been expressly or implicitly authorized
4. The officious manager (gestor) must have Q: What is Solutio Indebiti?
voluntarily taken charge
5. The officious manager or gestor must not be A: Solutio indebiti is the quasi-contract that arises
acting erroneously on the belief that he is the when a person is obliged to return whatever was
owner of the property or business. received by him through error or mistake or
received by him although there was no right to
Q: What is the required diligence from a gestor? demand it.
A: Diligence of a good father of a family (Art. 2145, Q: What are the requisites for solution indebiti?
NCC). Hence, a gestor is liable for the acts or
negligence of his employees (MRR Co. v. Compania A:
Transatlantica, 38 Phil. 875). 1. Receipt of something.
2. There was no right to demand it
Note: If there are two or more officious managers, 3. Undue delivery was because of mistake.
their liability for their acts is solidary.
Q: Can solutio indebiti be applied because of
Exception: When the management was assumed by doubtful or difficult question of law?
the officious managers to save the property or
business from imminent danger, in which case, the A: Yes, there can be payment because of “doubtful
liability is only joint. or difficult question of law” may lead to solutio
indebiti because of the mistake committed. (Art.
Q: What is the effect of ratification of the owner of 2155, NCC)
the business?
Q: What is the liability of a payee in good faith?
A: Ratification produces the effect of an express
agency; and this is true even if the business is not A:
successful (Art 2149, NCC). 1. In case of impairment or loss, liability is only to
the extent of benefit.
Q: What are the liabilities of the owner even if 2. In case of alienation, the price is to be
there is no ratification? reimbursed, or in case of credit, the same
should be assigned.
A:
1. Liability for the obligation incurred in his
IX. CONCURRENCE AND PREFERENCE OF CREDITS
interest.
2. Liability for necessary and useful expenses and
for damages. A. MEANING OF CONCURRENCE AND PREFERENCE
3. Damages suffered by the gestor while
performing his duties as such. (Art 2150, NCC) Q: What is concurrence of credits?
436 CIVIL LAW TEAM

CREDIT TRANSACTIONS
A: Concurrence of credit implies the possession by 10. Credits for lodging and supplies usually
two or more creditors of equal rights or privileges furnished to travelers by hotelkeepers, on the
over the same property or all the property of a movables belonging to the guest as long as
debtor. such movables are in the hotel, but not for
money loaned to the guests;
Q: What is preference of credit? 11. Credits for seeds and expenses for cultivation
and harvest advanced to the debtor, upon the
A: Preference of credit is a right held by a creditor fruits harvested;
to be preferred in the payment of his claim above 12. Credits for rent for one year, upon the
others out of the debtor’s assets. personal property of the lessee existing on the
immovable leased on the fruits of the same,
Note: The rules apply when two or more creditors but not on money or instruments of credit;
have separate and distinct claims against the same 13. Claims in favor of the depositor if the
debtor who has insufficient property. depository has wrongfully sold the thing
deposited, upon the price of the sale.
B. PREFERRED CREDITS ON SPECIFIC MOVABLES
Note: In the foregoing cases, if the movables to which
Q: What are the preferred credits with respect to the lien or preference attaches have been wrongfully
the specific movable property? taken, the creditor may demand them from any
possessor within thirty (30) days from the unlawful
A: seizures.
1. Duties, taxes and fees due thereon to the state
or any subdivision thereof; Summary:
2. Claims arising from misappropriation, breach 1. taxes
of trust, or malfeasance by public officials 2. malversation by public officials
committed in the performance of their duties, 3. vendor’s lien
on the movables, money or securities obtained 4. pledge, chattel mortgage
by them; 5. mechanic’s lien
3. Claims for the unpaid price of movable sold, on 6. laborer’s wages
said movables, so long as they are in the 7. salvage
possession of the debtor, up to the value of 8. tenancy
the same, and if the movable has been resold 9. carrier’s lien
by the debtor and the price is still unpaid, the 10. hotel’s lien
lien may be enforced on the price; this right is 11. crop loan
not lost by the immobilization of the thing by 12. rentals – one year
destination, provided it has not lost its form, 13. deposit
substance and identity; neither is the right lost
by the sale of the thing together with other
property for a lump sum, when the price C. PREFERRED CREDITS ON SPECIFIC IMMOVABLES
thereof can be determined proportionally;
4. Credits guaranteed with a pledge so long as Q: What are the preferred credits with respect to
the things pledged are in the hands of the specific immovable property?
creditor, or those guaranteed by a chattel
mortgage upon the things mortgaged, up to A:
the value thereof; 1. Taxes due upon the land or building;
5. Credits for making repairs or preservation or 2. For the unpaid price of real property sold
personal property on the movable thus made, upon the immovable sold;
repaired, kept or possessed; 3. Claims of laborers. Masons, mechanics and
6. Claims for laborers wages, on the goods other workmen, as well as of architects,
manufactured or the work done; engineers and contractors, engaged in the
7. For expenses of salvage, upon the goods construction, reconstruction or repair of
salvaged; buildings, canals or other works, upon said
8. Credits between the landlord and the tenant buildings, canals or other works;
arising from the contract of tenancy on shares, 4. Claims of furnishers of materials used in the
on the share of each in the fruits or harvest; construction, reconstruction, or repair of
9. Credits for transportation, upon the goods buildings, canals, and other works, upon said
carried, for the price of the contract and buildings, canals or other works;
incidental expenses, until their delivery and for 5. Mortgage credits recorded in the Registry of
thirty days thereafter; Property, upon the real estate mortgage;
437
6. Expenses for the preservation or improvement 4. Two horses, or two cows, or two carabaos
of real property when the law authorizes or other Beasts of burden, such as the
reimbursement, upon the immovable debtor may select, not exceeding one
preserved or improved; thousand pesos in value and necessarily
7. Credits annotated in the Registry of Property, used by him in his ordinary occupation;
by virtue of a judicial order, by attachments or 5. His necessary Clothing and that of all his
executions, upon the property affected, and family.
only as to later credits; 6. Household Furniture and utensils
8. Claims of co-heirs for warranty in the partition necessary for housekeeping and used for
of an immovable among them, upon the real that purpose by the debtor, such as the
property thus divided; debtor may select, of a value not
9. Claims of donors or real property for pecuniary exceeding one thousand pesos;
charges or other conditions imposed upon the 7. Provisions for individual or family use
donee, upon the immovable donated; insufficient for three months;
10. Credits of insurers, upon the property insured, 8. The professional Libraries of attorney’s,
for the insurance premium for two years. judges, physicians, pharmacists, dentist,
engineers, surveyors, clergymen, teachers
Summary: and other professionals, not exceeding
1. taxes three thousand pesos in value;
2. vendor’s lien 9. One fishing Boat and net, not exceeding
3. contractor’s lien the total value of one thousand pesos, the
4. lien of materialmen property of any fisherman, by the lawful
5. mortgage use of which he earns a livelihood;
6. expenses of preservation 10. So much of the Earnings of the debtor for
7. recorded attachments his personal services within the month
8. warranty in partition preceding the levy as are necessary for
9. conditional donations the support of his family;
10. premiums for 2 year – insurers 11. Lettered gravestones;
12. All Moneys, benefits, privileges or
D. EXEMPT PROPERTIES annuities accruing or in any manner
growing out of any life insurance, if the
Q: What are the exempt properties from execution annual premiums paid do not exceed five
and sale? hundred pesos, and if they exceed the
sum, a like exemption shall exist which
A: FST-BCF-PLB-ELM-CL shall bear the same proportion to the
1. GR: Family home constituted jointly by moneys, benefits privileges and annuities
husband and wife or by unmarried head so accruing or growing out of such
of a family (Art. 152, FC). insurance that said five hundred pesos
bears to the whole premiums paid;
XPNs: For: 13. Copyrights and other properties especially
a. non-payment of taxes; exempted by law (Sec. 12, Rule 39)
b. debts incurred prior to the 14. Property under Legal custody and of the
constitution of the family home; public dominion.
c. debts secured by mortgages on
the premises before or after Q: What is the order of preference with respect to
such constitution; and other properties of the debtor?
d. debts due to laborers,
mechanics, architects, builders, A:
material men and others who 1. Proper funeral expenses for the debtor, or
have rendered service or children under his or her parental authority
furnished material for the who have no property of their own, when
construction of the building approved by the court;
2. Credits for services rendered the insolvent by
2. Right to receive Support as well as any employees, laborers, or household helpers for
money or property obtained as such one year preceding the commencement of the
support. (Art. 205, FC) proceedings in insolvency;
3. Tools and implements necessarily used by 3. Expenses during the last illness of the debtor or
him in his trade or employment; of his or her spouse and children under his or
438 CIVIL LAW TEAM

CREDIT TRANSACTIONS
her parental authority, if they have no

property of their own; A:
4. Compensation due to the laborers of their 1. Special preferred credits – those listed in Arts.
dependents under laws providing for 2241-2242, NCC shall be considered mortgages
indemnity for damages in cases of labor and pledges of real and personal property or liens
accident or illness resulting from the nature of (Art. 2243). Hence, they are not included in the
the employment; insolvent debtor’s assets.
5. Credits and advancements made to the debtor 2. Ordinary preferred credits – those listed in Art
for support of himself or herself, and family, 2244, NCC as amended by Art. 110 of the Labor
during the last preceding insolvency; Code
6. Support during the insolvency proceedings, and 3. Common credits – those listed under Art. 2245,
for three months thereafter; NCC, which shall be paid pro rata regardless of
dates.
7. Fines and civil indemnification arising from a
criminal offense;
Q: What is the extent of liability of a debtor for his
8. Legal expenses, and expenses incurred in the
obligations?
administration of the insolvent’s estate for the
common interest of the creditors, when
properly authorized and approved by the A: The debtor is liable with all his property, present
court; and future, for the fulfillment of his obligations,
9. Taxes and assessments due the national subject to the exemptions provided by law. (Art.
government, other those mentioned in Articles 2236)
2241, No. 1, and 2242, No. 1;
10. Taxes and assessments due any province,
other than those mentioned in Articles 2241, F. ORDER OF PREFERENCE OF CREDIT
No. 1 and 2242, No. 1;
11. Taxes and assessments due any city or Q: What is the order of preference of credits?
municipality other than those mentioned in
Articles 2241, No.1 and 2242, No. 1; A:
12. Damages for death or personal injuries caused 1. Those credits which enjoy preference with
by a quasi-delict; respect to specific movable, excluded all
13. Gifts due to public and private institutions of others to the extent of the value of the
charity or beneficence; personal property to which the preference
14. Credits which without special privilege, appear refers (Article 2246).
in (a) a public instrument; or (b) in the final 2. If there are two or more credits with respect to
judgment, if they have been the subject of the same specific movable property, they shall
litigation. These credits shall have preference be satisfied pro-rata, after the payment of
among themselves in the order of priority of duties, taxes, and fees due the State or any
the dates of the instruments and of the subdivision thereof (Art. 2247, NCC).
judgments, respectively (Art. 2244). 3. Those credits which enjoy preference in
relation to specific real property or real rights,
Summary: exclude all others to the extent of the value of
1. funeral expenses the immovable or real right to which the
2. wages of employees – one year preference refers (Art. 2248).
3. expenses of last illness 4. If there are two or more credits with respect to
4. workmen’s compensation the same specific real property or real rights,
5. support for one year they shall be satisfied pro rata, after the
6. support during insolvency payment of the taxes and assessments upon
7. fines in crimes the immovable property or real right (Art.
8. legal expenses – administration 2249, NCC).
9. taxes 5. The excess, if any, after the payment of the
10. tort credits which enjoy preference with respect to
11. donations specific property, real or personal, shall be
12. appearing in public instrument or final added to the free property which the debtor
judgment may have, for the payment of the other credits
(Art. 2250, NCC).
E. CLASSIFICATION OF CREDITS 6. Those credits which do not enjoy any
preference with respect to specific property
Q: What are the general categories of credit? and those which enjoy preference, as to the
439
amount not paid, shall be satisfied according Q: What are the remedies of an insolvent debtor?
to the following rules:
a. In the order established in Article 2244; A:
b. Common credits referred to in Article 1. Petition the court to suspend payments of his
2245 shall enjoy no preference and shall debts; or
be paid pro rata regardless of dated (Art. 2. To be discharged from his debts and liabilities
2251, NCC). by voluntary or involuntary insolvency
proceedings. (Sec. 1)
X. INSOLVENCY LAW - FRIA
Q: What is the effect of insolvency proceedings
A. DEFINITION OF INSOLVENCY filed by individual debtors?
A:
Q: What is insolvency?
1. Suits pending in court –
a. secured obligations suspended until
A: The state of a person whose liabilities are more
assignee appointed
than his assets. The term is frequently used in the
b. unsecured obligations terminated except
more restricted sense to express inability of a
to fix amount of obligation
person to pay his debts as they become due in the
c. foreclosure suits pending continue
ordinary course of his business.
2. Suits not yet filed – cannot be filed anymore
but claims may be presented to assignee.
Q: Who are the debtors under FRIA law?
Note: The result is different if the petitioner is a
A: Debtor shall refer to, unless specifically excluded corporation because under the Revised Rules on
by a provision of this Act, Corporate Recovery, all claims whether secured or
1. a sole proprietorship duly registered with unsecured are stayed.
the Department of Trade and Industry
(DTI) Q: What are the three modes of rehabilitation
2. a partnership duly registered with the under FRIA law?
Securities and Exchange Commission
(SEC) A:
3. a corporation duly organized and existing 1. Court-supervised rehabilitation
under Philippine laws, or 2. Pre-negotiated rehabilitation
4. an individual debtor who has become 3. Out of court or informal restructuring
insolvent as defined herein. agreements or rehabilitation plans
Q: What are the classes of creditors? I. Court-supervised rehabilitation
A: Q: What are the kinds of proceedings in court-

1. Secured creditors; supervised rehabilitation?
2. Unsecured creditors;
3. Trade creditors and suppliers; and A:
4. Employees of the debtor. 1. Voluntary – the debtor, at its initiative, files a
petition in court, and states, among others, the fact
Q: Who are excluded from the above definition? and cause of its insolvency, its schedule of
liabilities, and proposed rehabilitation plan.
A: The term debtor does not include banks,
insurance companies, pre-need companies, and 2. Involuntary – the petition is filed by any creditor
national and local government agencies or units. or a group of creditors with a claim of at least 1
million pesos or 25% of the debtor’s subscribed
Q: What are the tests to determine insolvency? capital stock or partner’s contribution, whichever is
higher.
A:
1. Equity test – A state of inability of a person to Q: How does a court-supervised rehabilitation
pay his debts at maturity. proceeding initiated?
2. Balance sheet test – The assets, if all made
immediately available, would not be sufficient A: By filing a petition for rehabilitation with the
to discharge the balance. court.
440 CIVIL LAW TEAM

CREDIT TRANSACTIONS
6. the clearing and settlement of financial

If the court finds the petition to be sufficient in transactions through the facilities of a clearing
form and substance, it shall, issue a agency; and
Commencement Order, which, among others, shall 7. any criminal action against individual debtor or
declare that the debtor is under rehabilitation, owner, partner, director or officer of a debtor
appoint a rehabilitation receiver, and includes Stay shall not be affected by any proceeding
or Suspension Order. commend under this Act.
Note: The effects of the Commencement Order and

Q: What is the effect of creditors’ failure to file
the Stay or Suspension Order shall apply to
notice of claim?
government financial institutions.
Q: What is the effect of Suspension Order? A: A creditor whose claim is not listed in the
schedule of debts and liabilities and who fails to file
A: a notice of claim but subsequently files a belated
1. It suspends all actions or proceedings, in court claim shall not be entitled to participate in the
or otherwise, for the enforcement of claims rehabilitation proceedings but shall be entitled to
against the debtor; receive distributions arising therefrom.
2. suspends all actions to enforce any judgment,
attachment or other provisional remedies Q: What are the qualifications of a rehabilitation
against the debtor; receiver?
3. prohibits the debtor from selling,
encumbering, transferring or disposing in any A:
manner any of its properties except in the 1. A citizen of the Philippines or a resident of the
ordinary course of business; and Philippines in the six (6) months immediately
4. prohibits the debtor from making any payment preceding his nomination;
of its liabilities outstanding as of the 2. Of good moral character
commencement date except as may be 3. Has knowledge of insolvency and other
provided herein. relevant commercial laws, rules and
Q: What are the exceptions to the Stay or procedures, and the relevant training; and
Suspension Order? 4. Has no conflict of interest (such conflict of
interest may be waived)
A: It shall not apply to:
1. cases already pending appeal in the Supreme Note: If the rehabilitation receiver is a juridical entity,
Court as of commencement it must designate a natural person/s who possess/es
date Provided, That final and executory all the qualifications above.
judgment from such appeal shall be referred to
the court for appropriate action; Q: How does a Rehabilitation Receiver appointed?
2. subject to the discretion of the court, to cases
pending or filed at a specialized court or quasi- A: The court shall initially appoint the rehabilitation
judicial agency; receiver, who may or may not be from among the
3. enforcement of claims against sureties and other nominees of the petitioner,
persons solidarily liable with the debtor, and
third party or accommodation mortgagors as Note: If a qualified natural person or entity is
well as issuers of letters of credit, where the nominated by more than fifty percent (50%) of the
property subject of mortgage is necessary for secured creditors and the general unsecured creditors,
the rehabilitation. (In other words, claims may the court shall appoint the creditors' nominee.
be enforced despite issuance of suspension
order if the property is not necessary for Q: What are the powers of the Rehabilitation
rehabilitation); Receiver?
4. any form of action of customers or clients of a
securities market participant to recover or A: The rehabilitation receiver shall be deemed an
otherwise claim moneys and securities officer of the court with the principal duty of
entrusted to the latter in the ordinary course preserving and maximizing the value of the assets
of the latter's business; of the debtor during the rehabilitation proceedings,
5. the actions of a licensed broker or dealer to determining the viability of the rehabilitation of the
sell pledged securities of a debtor pursuant to debtor, preparing and recommending a
a securities pledge or margin agreement; Rehabilitation Plan to the court, and implementing
441
the approved Rehabilitation Plan and other powers A:

provided in FRIA. 1. Consultation with Debtor and Creditors.
2. Creditor Approval of Rehabilitation Plan - The
Note: The rehabilitation receiver shall not take over Plan is deemed to have been approved by a
the management and control of the debtor but may class of creditors if members of the said class
recommend the appointment of a management holding more than fifty percent (50%) of the
committee over the debtor. However, the court may total claims of the said class vote in favor of
appoint and direct the rehabilitation receiver to the Plan.
assume the powers of management of the debtor, or 3. Submission of Rehabilitation Plan to the Court.
appoint a management committee that will undertake 4. Filing of Objections to Rehabilitation Plan by
the management of the debtor. creditor under the following grounds:
(a) The creditors' support was induced by
Q: What are the grounds for Removal of the fraud;
Rehabilitation Receiver? (b) The documents or data relied upon in the
Rehabilitation Plan are materially false or
A: misleading; or
1. Incompetence, gross negligence, failure to (c) The Rehabilitation Plan is in fact not
perform or failure to exercise the proper supported by the voting creditors.
degree of care; 5. Hearing on the Objections.
2. Lack of a particular or specialized competency 6. Confirmation of the Rehabilitation Plan. –The
required by the specific case; court may confirm the Rehabilitation Plan
3. Illegal acts or conduct in the performance of notwithstanding unresolved disputes over
his duties and powers; claims if the Rehabilitation Plan has made
4. Lack of qualification or presence of any adequate provisions for paying such claims.
disqualification; 7. Termination of proceedings.
5. Conflict of interest that arises after his
appointment; and Q: What is the Effect of Confirmation of the
6. Manifest lack of independence. Rehabilitation Plan?
Note: The rehabilitation receiver may be removed at A:

any time by the court eithermotu proprio or upon 1. It shall be binding upon the debtor and all
motion by any creditor/s holding more than fifty persons who may be affected by it, including
percent (50%) of the total obligations of the debtor. the creditors;
2. The debtor shall comply with the provisions of
Q: What is the effect of Sale or Disposal of the Rehabilitation Plan and shall take all
Encumbered Property of the Debtor and Assets of actions necessary to carry out the Plan;
Third Parties Held by Debtor? 3. Payments shall be made to the creditors in
accordance with the provisions of the
A: The court may authorize the sale, transfer, Rehabilitation Plan;
conveyance or disposal of encumbered property of 4. Contracts and other arrangements between
the debtor, or property of others held by the debtor the debtor and its creditors shall be
pertaining to third parties under a financial, credit interpreted as continuing to apply to the
or other similar transactions if (a) such sale or extent that they do not conflict with the
disposal is necessary for the continued operation of provisions of the Rehabilitation Plan;
the debtor's business; and (b) the debtor has made 5. Any compromises on amounts or rescheduling
arrangements to provide a substitute lien or of timing of payments by the debtor shall be
ownership right that provides an equal level of binding on creditors regardless of whether or
security for the counter-party's claim or right. not the Plan is successfully implement; and
6. Claims arising after approval of the Plan that
Note: Third parties who have in their possession or are otherwise not treated by the Plan are not
control property of the debtor shall not transfer, subject to any Suspension Order.
conveyor otherwise dispose of the same to persons
other than the debtor, unless upon prior approval Q: What is the Period for Confirmation of the
of the rehabilitation receiver. Rehabilitation Plan.
Q: List the procedures after preparation to
approval of Rehabilitation Plan A: The court shall have a maximum period of one
(1) year from the date of the filing of the petition to
442 CIVIL LAW TEAM

CREDIT TRANSACTIONS
confirm a Plan, Otherwise, it may upon motion Q: What is suspension of payments?

or motu propio, be converted into one for the
liquidation of the debtor . A: It is the postponement, by court order, of the
payment of debts of one who, while possessing
II. Pre-negotiated Rehabilitation sufficient property to cover his debts, foresees the
impossibility of meeting them when they
Q: How does a court-supervised rehabilitation respectively fall due.
proceeding initiated?
Q: When is the remedy of suspension of payments
A: By filing a verified petition by the insolvent available?
debtor himself, or jointly with any of the creditors
for the approval of a pre-negotiated Rehabilitation A: The debtor who, possessing sufficient property
Plan, which has been endorsed or approved by to cover all his debts, foresees the impossibility of
creditors holding at least two-thirds (2/3) of the meeting them when they respectively fall due, may
total liabilities of the debtor, including secured petition that he be declared in the state of
creditors holding more than fifty percent (50%) of suspension of payments by the court of the
the total secured claims of the debtor and province or city in which he has resided for six
unsecured creditors holding more than fifty percent months next preceding the filing of his petition (Sec.
(50%) of the total unsecured claims of the debtor. 2 [1]).
Q: What period of approval of Rehabilitation Plan? Q: When does suspension take effect?
A: The court shall have a maximum period of one A: Upon the filing of the petition. The suspension
hundred twenty (120) days from the date of the order shall lapse when three (3) months shall have
filing of the petition to approve the Rehabilitation passed without the proposed agreement being
Plan. If the court fails to act within the said period, accepted by the creditors or as soon as such
the Rehabilitation Plan shall be deemed approved. agreement is denied. (Sec. 96, FRIA)
Q: What is the effect of approval of a Plan? Q: What are the steps in suspension of payments?
A: Approval shall have the same legal effect as A:

confirmation of a Plan 1. Filing of the petition by the debtor (Sec. 94);
2. Issuance by the court of an order calling a
III. Out of court or informal restructuring meeting of creditors (Sec.95);
agreements or rehabilitation plans 3. Publication of the order and service of
summons;
Q: What are the Minimum Requirements of Out- 4. Meetings of creditors for the consideration of
of-Court or Informal Restructuring Agreements the debtor’s proposition (Sec. 97);
and Rehabilitation Plans? 5. Approval by the creditors of the debtor’s
proposition (Sec. 8, [20]);
6. The Double Majority Rule applies. To obtain a
A:
majority vote, it is necessary that:
1. The debtor must agree to the out-of-court or
a. At least 2/3 of the creditors must vote on
informal restructuring/workout agreement or
the same proposition, and
Rehabilitation Plan;
b. Said 2/3 represent at least 3/5 of the total
2. It must be approved by creditors representing
liabilities of the debtor.
at least sixty-seven (67%) of the secured
7. Objections, if any, to the decision must be
obligations of the debtor;
made within 10 days following the meeting.
3. It must be approved by creditors representing (Sec. 100);
at least seventy-five percent (75%) of the 8. Issuance of order by the court directing that
unsecured obligations of the debtor; and the agreement be carried out in case the
4. It must be approved by creditors holding at decision is declared valid, or when no
least eighty-five percent (85%) of the total objection to said decision has been presented.
liabilities, secured and unsecured, of the (Sec. 101)
debtor.
Q: What are the documents that should
B. SUSPENSION OF PAYMENTS accompany the petition?
443
A: Q: Who are the creditors not affected by order of

1. A verified schedule containing a full and true suspension of payments?
statement of the debts and liabilities of the
petitioner together with a list of creditors; A:
(Secs. 15, 2) 1. Those having claims for personal labor,
2. A verified inventory containing a list of maintenance, expenses of the last illness and
creditors, an accurate description of all the funeral of wife or child of debtor, incurred
property of the petitioner including property during the 60 days immediately preceding the
exempt from execution and a statement as to filing of the petition; and
the value of each item of property, its location,
and encumbrances thereon, if any; (Secs. 16, 2. Those having legal or contractual mortgages.
2) (Sec. 9) change to: secured creditors who
3. A statement of his assets and liabilities; (Sec. 2) failed to attend the meeting or refrained from
and (not in FRIA) voting therein.
4. The proposed agreements he requests of his
creditors. (Ibid.) Q: When is a petition for suspension of payments
deemed rejected?
Q: What are the effects of filing of the petition?
A:
A: 1. When the number of creditors representing at
1. No disposition in any manner of his property least 3/5 of the liabilities not attend; (Secs. 8,
may be made by the petitioner except insofar 10) or
as concerns the ordinary operations of 2. When the two majorities required are not in
commerce or of industry in which he is favor of the proposed agreement (Sec. 10).
engaged; [(Sec. 95 (e)]
Q: Who may refrain from voting during the
2. No payments may be made by the petitioner creditor’s meeting?
except in the ordinary course of his business or
industry [(Sec. 95 (f)]; and; A: Creditors who are unaffected by the Suspension
Order may refrain from attending the meeting and
3. Upon motion, the court may issue an order from voting therein. Such persons shall not be
suspending any pending execution against the bound by any agreement determined upon at such
individual debtor. Provide, That properties meeting, but if they should join in the voting they
held as security by secured creditors shall not shall be bound in the same manner as are the other
be the subject of such suspension order. (Sec. creditors. (Sec. 98)
96)
Q: What is the effect of disapproval of petition?
Note: No creditor shall sue or institute proceedings to
collect his claim from the debtor from the time of the A: If the decision of the meeting be negative as
filing of the petition for suspension of payments and regards the proposed agreement or if no decision is
for as long as proceedings remain pending except: had in default of such number or of such majorities,
(a) those creditors having claims for personal the proceeding shall be terminated without
labor, maintenance, expense of last illness recourse. In such case, the parties concerned shall
and funeral of the wife or children of the be at liberty to enforce the rights which correspond
debtor incurred in the sixty (60) days to them. (Sec. 99)
immediately prior to the filing of the
petition; and LIQUIDATION
(b) secured creditors.
Q: Discuss the steps in Liquidation of INSOLVENT
Q: Who are the creditors affected by the filing of JURIDICAL DEBTORS.
the petition?
A:
A: Only creditors included in the schedules filed by A. Voluntary Liquidation –
the debtor shall be cited to appear and to take part 1. Filing of verified petition for liquidation with
in the meeting. (Sec. 5) Hence, those who did not the court containing the following:
appear because they were not informed of the a. a schedule of the debtor's debts and
proceedings are unaffected by the same. liabilities including a list of creditors with
444 CIVIL LAW TEAM

CREDIT TRANSACTIONS
their addresses, amounts of claims and 6. Determination of claims.

collaterals, or securities, if any; 7. Submit Liquidation Plan.
b. an inventory of all its assets including 8. Implementation of the Plan (e.g. Selling of
receivables and claims against third assets at public auction, payment of claims)
parties; and 9. Discharge of Liquidator.
c. the names of at least three (3) nominees
to the position of liquidator. Note: During the pendency of or after a rehabilitation
2. If the court finds the petition sufficient in form court-supervised or pre-negotiated rehabilitation
and substance it shall, within five (5) working proceedings, three (3) or more creditors whose claims
days issue the Liquidation Order. is at least either One million pesos (Php1,000,000.00)
3. Publication of the petition or motion in a or at least twenty-five percent (25%) of the subscribed
newspaper of general circulation once a week capital or partner's contributions of the debtor,
for two (2) consecutive weeks. whichever is higher, may also initiate liquidation
4. Election/Appointment of Liquidator proceedings.
5. Determination of claims.
6. Submit Liquidation Plan. INSOLVENCY OF INDIVIDUAL DEBTORS
7. Implementation of the Plan (e.g. Selling of
assets at public auction, payment of claims) C. VOLUNTARY INSOLVENCY
8. Discharge of Liquidator.
Q: Who may apply for voluntary liquidation? How
B. Involuntary Liquidation is this done?
1. Three (3) or more creditors the aggregate of
whose claims is at least either One million A: An individual debtor whose properties are not
pesos (Php1,000,000,00) or at least twenty- sufficient to cover his liabilities, and owing debts
five percent (25%0 of the subscribed capital exceeding Php500,000.00, may apply to be
stock or partner's contributions of the debtor, discharged from his debts and liabilities by filing a
whichever is higher, may apply for and seek verified petition with the court of the province or
the liquidation of an insolvent debtor by filing city in which he has resided for six (6) months prior
a petition for liquidation of the debtor with the to the filing of such petition with the following
court. The petition shall show that: attachments:
(a) there is no genuine issue of fact or law on 1. A schedule of debts and liabilities and
the claims/s of the petitioner/s, and that 2. Inventory of assets.
the due and demandable payments
Q: What is the procedure for voluntary insolvency?
thereon have not been made for at least
one hundred eighty (180) days or that the
A:
debtor has failed generally to meet its
1. Filing of the petition by the debtor praying for
liabilities as they fall due; and
the declaration of insolvency (Sec.103);
(b) there is no substantial likelihood that the
2. Issuance Liquidation order (Sec.104);
debtor may be rehabilitated.
3. Publication of petition or motion in a
2. If the petition or motion is sufficient in form newspaper of general circulation once a week
and substance, the court shall issue an Order: for two consecutive weeks [Sec. 112 (d)];
(1) directing the publication of the petition or 4. Election and appointment of Liquidator [Sec.
motion in a newspaper of general 112 (j)];
circulation once a week for two (2) 5. Liquidation of the debtor’s assets and payment
consecutive weeks; and of his debts (Sec. 119);
(2) directing the debtor and all creditors who 6. Composition, if agreed upon (Sec. 63);
are not the petitioners to file their 7. Discharge of Liquidator (Sec 122)
comment on the petition or motion 8. Appeal
within fifteen (15) days from the date of
last publication. Q: What are the documents to accompany the
3. If, after considering the comments filed, the petition?
court determines that the petition or motion is
meritorious, it shall issue the Liquidation Order A:
4. Publication of the petition or motion in a 1. A verified schedule must contain:
newspaper of general circulation once a week a. A full and true statement of all debts and
for two (2) consecutive weeks. liabilities of the insolvent debtor; and
5. Election/Appointment of Liquidator
445
b. An outline of the facts giving rise or which 8. He has suffered or procured his property to be
might give rise to a cause of action taken on legal process with intent to give a
against such insolvent debtor; (Sec. 15) preference to one or more of his creditors and
thereby hinder, delay, or defraud any one of
2. A verified inventory, which must contain: his creditors;
a. An accurate description of all the personal 9. He has made any assignment, gift, sale,
and real property of the insolvent exempt conveyance, or transfer of his estate, property,
or not from execution including a rights, or credits with intent to delay, defraud,
statement as to its value, location and or hinder his creditors;
encumbrances thereon; and 10. He has, in contemplation of insolvency, made
b. An outline of the facts giving rise or which any payment, gift, grant, sale, conveyance, or
might give rise to a right of action in favor transfer of his estate, property, rights, or
of the insolvent debtor. (Sec. 16) credits;
11. Being a merchant or tradesman he has
Q: What is the effect of filing petition? generally defaulted in the payment of his
current obligations for a period of 30 days;
A: Once the petition is filed, it ipso facto takes away 12. For a period of 30 days he has failed after
and deprives the debtor petitioner of the right to demand, to pay any moneys deposited with
do or commit any act of preference as to creditors, him or received by him in a fiduciary capacity;
pending the final adjudication. (Philippine Trust Co. and
v. National Bank, 42 Phil 413) 13. An execution having been issued against him
on final judgment for money, he shall have
D. INVOLUNTARY INSOLVENCY been found to be without sufficient property
subject to execution to satisfy the judgment.
(Sec. 105)
Q: Who may file for involuntary liquidation?
Q: What is the procedure in involuntary
A: Any creditor or group of creditors with a claim of,
insolvency?
or with claims aggregating at least Php500, 000.00
may file a verified petition for liquidation with the
A:
court of the province or city in which the individual
1. Filing of petition by creditor or group of
debtor resides.
creditors and posting of bond (Sec. 105);
2. Issuance of order requiring the debtor to show
Q: What are the acts of insolvency?
cause why he should not be adjudged
insolvent (Sec. 106);
A:
3. Service of order to show cause;
1. Such person is about to depart or has departed
4. Filing of answer or motion to dismiss;
from the Philippines, with intent to defraud his
5. Hearing of the case (Sec. 107);
creditors;
6. Issuance of Liquidation order
2. Being absent from the Philippines, with intent
7. Publication of petition or motion in a
to defraud his creditors, he remains absent;
newspaper of general circulation once a week
3. He conceals himself to avoid the service of
for two consecutive weeks [Sec. 112 (d)];
legal process for purpose of hindering or
8. Election and appointment of Liquidator [Sec.
delaying or defrauding his creditors;
112 (j)];
4. He conceals, or is removing, any of his
9. Liquidation of the debtor’s assets and payment
property to avoid its being attached or taken
of his debts (Sec. 119);
on legal process;
10. Discharge of Liquidator (Sec 122)
5. He has suffered his property to remain under
11. Appeal
attachment or legal process for 3 days for the
purpose of hindering or delaying or defrauding
Note: Assets of the insolvent which are not exempt
his creditors;
from execution will then be distributed among his
6. He has confessed or offered to allow judgment creditors in accordance with the rules of concurrence
in favor of any creditor or claimant for the and preference of credits in the Civil Code.
purpose of hindering or delaying or defrauding
any creditor or claimant; Q: Can a surety institute involuntary proceedings?
7. He has willfully suffered judgment to be taken
against him by default for the purpose of
hindering or delaying or defrauding his
creditors;
446 CIVIL LAW TEAM

CREDIT TRANSACTIONS
A: No, a surety for the debtor is not a creditor. A:

Hence, he cannot institute involuntary proceedings. 1. Those who did not file their claims at least 2
All he can do is to prove his claim. days prior to the time appointed for such
election;
Q: Distinguish voluntary insolvency from 2. Those whose claims are barred by the statute
involuntary insolvency. of limitations;
3. Secured creditors unless they surrender their
A: security or lien to the sheriff or receiver or
VOLUNTARY unless they shall first have the value of such
INVOLUNTARY INSOLVENCY
INSOLVENCY security; and
Filed by any creditor or group 4. Holders of claims for unliquidated damages
Filed by the debtor.
of creditors. arising out of pure tort.
Only 1 creditor is 3 or more creditors are
required. required. Q: Is the assignee required to give a bond?
Requirements for creditors:
A: After his election, the assignee is required to give
1. Residents of the a bond for the faithful performance of his duties.
Philippines;
2. Their credits or demands Note: Courts have the power to appoint receivers to
No requirement for
must have accrued in the hold the property of individuals or corporations
creditors.
Philippines; and although no insolvency proceedings are involved. A
3. Must not have been a receiver appointed by a court before the institution of
creditor by assignment within the insolvency proceedings may be appointed the
30 days prior to the filing of permanent assignee in such proceedings.
the petition.
Venue: where he has
Where the debtor has Q: What are the effects of Liquidation Order. –
resided 6 months
residence or has his principal
prior to the filing of
place of business. A: Upon the issuance of the Liquidation Order:
petition.
No need for the (a) the juridical debtor shall be deemed
commission of any of Debtor must have committed dissolved and its corporate or juridical
the acts of any of the acts of insolvency. existence terminated;
insolvency. (b) legal title to and control of all the assets
Amount of debts of the debtor, except those that may be
Amount of debts must not be
must exceed exempt from execution, shall be deemed
less than P500,000.00.
P500,000.00. vested in the liquidator or, pending his
Debtor deemed election or appointment, with the court;
insolvent through an Debtor is considered insolvent (c) all contracts of the debtor shall be deemed
order of adjudication upon the issuance by the terminated and/or breached, unless the
after filing of the court of an order after due liquidator, within ninety (90) days from
petition; hearing declaring him
the date of his assumption of office,
adjudication may be insolvent; adjudication
declares otherwise and the contracting
granted ex parte. granted only after hearing.
party agrees;
Bond is not required. Bond is required. (d) no separate action for the collection of an
unsecured claim shall be allowed. Such
actions already pending will be
Q: Who is an assignee in insolvency?
transferred to the Liquidator for him to
accept and settle or contest. If the
A: A person elected by the creditors or appointed
liquidator contests or disputes the claim,
by the court to whom an insolvent debtor makes an
the court shall allow, hear and resolve
assignment of all his property for the benefit of his
such contest except when the case is
creditors.
already on appeal. In such a case, the suit
Note: The assignee must be a person elected by the may proceed to judgment, and any final
majority of the creditors who have proven their claims, and executor judgment therein for a claim
such majority being in number and amount. against the debtor shall be filed and
allowed in court; and
Q: Who are the creditors not entitled to vote in (e) no foreclosure proceeding shall be allowed
the election of assignee? for a period of one hundred eighty (180)
days.
447
after its dissolution and before the final settlement

Q: What are the rights of secured creditors? thereof.
A: The Liquidation Order shall not affect the right of A partnership may be declared insolvent
a secured creditor to enforce his lien in accordance notwithstanding the solvency of the partners
with the applicable contract or law. A secured constituting the same. (Campos Rueda & Co. v.
creditor may: Pacific Commercial Co., G.R. No. L-18703 Aug.
(a) waive his right under the security or lien, 28, 1922)
prove his claim in the liquidation
proceedings and share in the distribution Q: Who may petition for declaration of insolvency
of the assets of the debtor; or of a partnership?
(b) maintain his rights under the security or
lien: A:
1. Voluntary insolvency – By all the partners or
If the secured creditor maintains his rights under any of them;
the security or lien: 2. Involuntary insolvency – By one or more of the
(1) the value of the property may be fixed in partners or three or more creditors of the
partnership.
a manner agreed upon by the creditor
and the liquidator. When the value of the
Q: What are the properties included in the
property is less than the claim it secures,
insolvency proceedings?
the liquidator may convey the property to
the secured creditor and the latter will be
A:
admitted in the liquidation proceedings as
1. All the property of the partnership; and
a creditor for the balance. If its value
2. All the separate of each of the partners except:
exceeds the claim secured, the liquidator a. Separate properties of limited partners (Art.
may convey the property to the creditor 1843, NCC)
and waive the debtor's right of b. Properties which are exempt by law
redemption upon receiving the excess
from the creditor; Q: What is the effect of insolvency of partnership
(2) the liquidator may sell the property and or any partner?
satisfy the secured creditor's entire claim
from the proceeds of the sale; or A:
(3) the secure creditor may enforce the lien 1. A partnership may be declared insolvent
or foreclose on the property pursuant to notwithstanding the solvency of the partners
applicable laws. constituting the same.
2. A partnership is not necessarily insolvent
Q: When may a partnership be declared insolvent? because one of its members is insolvent. The
solvent members are bound to wind up the
A: A partnership may be declared insolvent by a partnership affairs.
petition of the partners and may be done during 3. Under the law, a partnership is automatically
the continuation of the partnership business or dissolved by the insolvency of any partner or
of the partnership
Q: In the filing of claims in an insolvency proceeding, what debts may and may not be proved?
A:
DEBTS THAT MAY BE PROVED DEBTS THAT MAY NOT BE PROVED
The debts which may be proved against the estate of the The following debts are not provable or allowed in
debtor in insolvency proceedings are the following: insolvency proceedings:
1. All debts due and payable from the debtor at the time 1. Claims barred by the statute of limitations; (Sec. 29,
of adjudication of insolvency; (Sec. 53, Insolvency Law) 73)
2. All debts existing at the time of the adjudication of 2. Claims of secured creditors with a mortgage or
insolvency but not payable until a future time, a pledge in their favour unless they surrender the
discount being made if no interest is payable by the security; (Sec. 59)
terms of the contract; 3. Claims of creditors who hold an attachment or
3. Any debt of the insolvent arising from his liability as execution on the property of the debtor duly
indorser, surety, bail or guarantor, where such liability recorded and not dissolved; (Sec. 32)
448 CIVIL LAW TEAM

CREDIT TRANSACTIONS
became absolute after the adjudication of insolvency 4. Claims on account of which a fraudulent preference
but before the final dividend shall have been declare; was made or given; (Sec. 61)
(Sec. 54) 5. Support, as it does not arise from any business
4. Other contingent debts and contingent liabilities transaction but from the relation of marriage; and
contracted by the insolvent if the contingency shall 6. A claim for unliquidated damages arising out of a
happen before the order of final dividend; (Sec. 55); pure tort, which neither constitutes a breach of an
and express contract nor results in any unjust
5. Any debt of the insolvent arising from his liability to enrichment of the tortfeasor that may form the
any person liable as bail, surety, or guarantor or basis of an implied contract.
otherwise, for the insolvent, ho shall have paid the
debt in full, or in part. (Sec. 56)
Q: What is a contingent claim? A: Discharge, under the Insolvency Law, is the

formal and judicial release of an insolvent debtor
A: A claim in which liability depends on some future from his debts with the exception of those
event that may or may not happen and which expressly reserved by law.
makes it uncertain whether there will be any
liability. Note: Only natural persons may ask for discharge;
corporations cannot ask for discharge. (Sec. 52) When
Note: After the close of the insolvency proceedings granted, takes effect not from its date, but from the
and the happening of the contingency, the creditor commencement of the proceedings in insolvency.
may pursue any available remedy for the collection of
his claim. Q: When insolvent debtor may apply for
discharge?
Q: How are claims arising or acquired after
insolvency treated? A: A debtor may apply to the RTC for a discharge at
anytime after the expiration of 3 months from the
A: adjudication of insolvency, but not later than 1 year
1. Claim arose after commencement of from such adjudication of insolvency, unless the
proceedings – An obligation coming in force property of the insolvent has not been converted
after the initiation of the proceedings is not into money (Sec. 64) without his fault, thereby
generally a proper claim to be proved. delaying the distribution of dividends among the
creditors in which case the court may extend the
2. Claim owned by insolvent purchased after period
insolvency – One indebted to an insolvent will
not be permitted to interpose as an offset, a Any creditor may oppose the discharge by filing his
claim owned by the insolvent which he has objections thereto, specifying the grounds of his
purchased after the insolvency. opposition. After the debtor has filed and served his
verified answer, the court shall try the issue or
Q: What are the alternative rights of a secured issues raised. (Sec. 66)
creditor?
Q: What are the requisites for discharge?
A:
1. To maintain his rights under his security or lien A:
and ignore the insolvency proceedings, in 1. Compliance with statutory requirements
which case, it is the duty of the assignee to regarding surrender of his assets for the
surrender to him the property encumbered; benefit of the creditors and regarding the
rendition of an account of his assets and
2. To waive his right under the security or lien liabilities;
and thereby share in the distribution of the
assets of the debtor; or a. Note: A discharge in insolvency is a matter of
legislative grace or favour to the debtor, to be
3. To have the value of the encumbered property obtained only by a strict compliance with the
appraised and then share in the distribution of conditions prescribed by the statute.
the assets of the debtor with respect to the
balance of his credit. 2. Application for discharge should be filed after
the expiration of 3 months from the
Q: What is discharge? adjudication of insolvency, but not later than 1
year; (Sec. 64); and
449
satisfaction out of the mortgage or subject of

3. Insolvent debtor must not have committed any the lien;
of the acts of insolvency preventing discharge. 3. It is a special defense which may be pledged
and be a complete bar to all suits brought on
Q: What are the acts of debtor or grounds which any such debts, claims, liabilities or demands.
will prevent discharge? (Ibid.)
4. It does not operate to release any person
A: No discharge shall be granted, or if granted, shall liable for the same debt, for or with the
be valid, to the following cases: debtor, either as partner, joint contractor,
1. False swearing; indorser, surety or otherwise; (Sec. 68)
2. Concealment of any part of his estate or 5. The certificate of discharge is prima facie
effects; evidence of the fact of release, and the
3. Fraud or willful neglect in the care of his regularity of such discharge.
property or in the delivery thereof to the
assignee; Note: Where a debtor is judicially declared
4. Procuring his properties to be attached or insolvent, the remedy of the guarantor or surety
seized on execution within 1 month would be to file a contingent claim in the
before the commencement of insolvency insolvency proceeding, if his rights as such
proceedings; guarantor or sureties are not to be barred by the
5. Destruction, mutilation, alteration or subsequent discharge of the insolvent debtor
from all his liabilities.
falsification of his books, documents, and
papers;
Q: What are the debts and obligations not affected
6. Giving fraudulent preference to a
by discharge of insolvent?
creditor;
7. Non-disclosure of the assignee of a
A:
proven false or fictitious debt within 1
1. Taxes or assessments due the Government,
month after acquiring knowledge;
whether national or local;
8. Being a merchant, failure to keep proper
2. Any debt created by the fraud or
books or accounts;
embezzlement of the debtor;
9. Influencing the action of any creditor, at
3. Any debt created by the defalcation of the
any state of the proceedings, by
debtor as a public officer or while acting in a
pecuniary consideration;
fiduciary capacity;
10. Effecting any transfer, conveyance or
4. Debt of any person liable for the same debt,
mortgage in contemplation of insolvency;
for or with the insolvent debtor, either as
11. Conviction of any misdemeanor under the
partner, joint contractor, inorser, surety or
Insolvency Law:
otherwise; (Sec. 68)
12. In case of voluntary insolvency, he has
5. Debts of a corporation (Sec. 52);
received the benefit of insolvency within
6. Claim for support;
6 years next preceding his application for
7. Discharged debt but revived by a subsequent
discharge; and
new promise to pay;
13. If insolvency proceeding in which he could
8. Debts which have not been duly scheduled in
have applied are pending by or against
time for proof and allowance, unless the
him in the RTC of any other province or
creditors had notice or actual knowledge of
city. (Sec. 65)
the insolvency proceedings, are not discharged
as to such creditors;
Q: What are the effects of discharge?
9. Claims for unliquidated damages arising out of
a pure tort;
A:
10. Claims of secured creditors; (Sec. 59)
1. It releases the debtor from all claims, debts,
11. Claims not in existence or not mature at the
liabilities and demand set forth in the schedule
time of the discharge;
or which were or might have been proved
12. Claims that are contingent at the time of
against his estate in insolvency. (Sec. 69).
discharge.
Hence, non-provable debts are not affected
whether or not they were properly scheduled;
Q: When discharge may be revoked?
2. It operates as a discharge of the insolvent and
future acquisitions, but pemits mortgagees
A: A discharge may be revoked by the court which
and other lien creditors to have their
granted it on petition of any creditor:
450 CIVIL LAW TEAM

CREDIT TRANSACTIONS
1. Whose debt was proved or provable 2. Who has discovered facts constituting the
against the estate in insolvency on the fraud subsequent to the discharge and
ground that the discharge was fraudulent transfer; and provided,
fraudulently obtained; 3. The petition is filed within 1 year after the
date of the discharge. (Sec. 69)
451
LEASE result out of his work or labor for a certain

price.
Q: What is contract of lease?
Note: Duties of a contractor who furnishes work
A: A contract by which one of the parties agrees to and materials:
give the other for a fixed time and price the use or 1. to deliver;
profit of a thing or of his service to another who 2. to transfer ownership; and
undertakes to pay some rent, compensation or 3. to warrant eviction and hidden defects.
price.
3. Lease of service – One party binds himself to
Q: What are the characteristics of a contract of render to the other some service for a price
lease? certain.
A: Q: When is lease considered a contract of sale?

1. Consensual;
2. Bilateral; A: A lease of personal property with option to buy,
3. Commutative; where title is transferred at the end of the contract
4. Principal contract; provided rents have been fully paid.
5. Nominate;
6. Subject matter must be within the commerce Q: Distinguish lease from sale.
of man;
7. Purpose is to allow enjoyment or use of a A:
thing; LEASE SALE
8. Purpose to which the thing will be devoted Only the use or
Ownership is transferred
enjoyment is transferred
should not be immoral;
Transfer is temporary Transfer is permanent
9. Onerous;
Lessor need not to be the Seller must be the owner
10. Period is temporary;
owner at the time of delivery
11. Period may be definite or indefinite; and
The price of the object
12. Lessor need not be the owner.
(distinguished from the Usually, the selling price
rent) is usually not is mentioned
Q: What are the kinds of lease? mentioned
A:
1. Lease of things (immovable/ movable) – One of Q: Distinguish lease from usufruct.
the parties binds himself to give to another the
enjoyment or use of a thing for a price certain. A:
LEASE USUFRUCT
Ownership on the part of Ownership of the thing
Period: definite or indefinite but not more than
the lessor is not on the part of the grantor
99 years. (Art. 1634)
necessary is necessary
GR: Personal right
Note: It may be made orally but if the lease of
Real right
real property is for more than one year, it must
XPN: Real right
be in the writing (Statute of Frauds).
Includes all possible uses
Limited to the use
and enjoyment of the
Statute of Frauds requires certain agreements to specified in the contract
thing
be in writing before they can be proved and
Lessor places and
enforced in a judicial action. However, non- Owner allows the
compliance does not make the oral contract void. maintains the lessee in
usufructuary to use and
the peaceful enjoyment
The only effect is that no action for the enjoy the property
enforcement of the contract can be proved. of the thing
Moreover, the right to invoke the Statute of May be for an indefinite
Definite period
Frauds may be waived by failure to object to the period
presentation of oral evidence, or by cross Created by contract as a Created by law, contract,
examining the witness on the issue. (Pineda, general rule last will or prescription
Obligations and Contracts, pgs. 577, 579, 580) Lessee has no duty to Usufructuary has duty to
make repairs make repairs
2. Lease of work (contract for a piece of work) – Lessee has no duty to pay Usufructuary has a duty
One of the parties binds himself to produce a taxes to pay taxes
Lessee cannot constitute Usufructuary may
452 CIVIL LAW TEAM

LEASE
a usufruct of the property constitute a sublease 3. If lease of real property (private lands),
leased maximum of 25 years renewable for another
25 years (P.D. 713)
I. LEASE OF THINGS 4. Under the Investor ‘s Lease Act of 1995, the 25
year period was extended to 50 years
Q: Is lease of real property a real right? provided the following conditions are met:
a. Lessee must make investments
A: GR: Lease of a real property is a personal right b. Lease is approved by DTI
c. If terms are violated, DTI can terminate it
XPNs: It is a real right:
1. If it is for more than one year and to be Note: The ILA did not do away with P.D. 713,
enforceable – must be writing under ILA the consent of DTI is required,
2. If it is registered with Registry of Property - while in P.D. 713 no consent is required.
regardless of its period
Q: What is rent?
Q: What are the effects if the lease of real
property is not registered? A: The compensation either in money, provisions,
chattels or labor, received by the lessor from the
A: lessee.
1. It is not binding on third persons;
2. Such third person is allowed to terminate the Q: What are the requisites of rent?
lease in case he buys the property from the
owner-lessor; A:
3. Actual knowledge of existence and duration of 1. Not fictitious or nominal, otherwise the
lease is equivalent to registration; or contract becomes gratuitous;
4. A stranger who knows of the existence of the 2. Capable of determination; and
lease, but was led to believe that the lease 3. May be in the form of products, fruits, or
would expire soon or before the new lease in construction, as long as it has value.
favor of him begins, the stranger can still be
considered innocent. Note: Owner has the right to fix the rent because the
contract is consensual and not imposed by law, but
Q: What can be the subject matter of a lease? increasing the rent is not an absolute right of the
lessor. The new rate must be reasonable and in no
A: Things within the commerce of man. case shall the lessor be allowed to increase the rental
when the term has not yet expired, unless, the tenant
consents. (Paras, p. 262)
Note: Lease of properties belonging to the public
domain is void.
If the rent is fixed for the first time, courts cannot
interfere, but if it is a renewal, the courts can settle the
Q: What are the properties that may be leased?
disagreements.
A:
Q: What is the right of a purchaser of a leased
1. By Filipinos – public domain with an area of property?
500 hectares and may acquire not more than
12 hectares A: GR: Purchaser of thing leased can terminate the
2. By corporations
lease.
a. If at least 60% Filipinos-owned – public
domain for a period of 25 years,
XPNs:
renewable for another 25 years; the area 1. Lease is recorded in Registry of Property;
not to exceed more than 1,000 hectares 2. There is a stipulation in the contract of
sale that the purchaser shall respect the
Q: What are the rules on lease of things when lease;
lessee is an alien?
3. Purchaser knows the existence of the
lease;
A:
4. Sale is fictitious; or
1. Personal property – 99 year limit applies. 5. Sale is made with a right of repurchase.
2. Aliens cannot lease public lands, and cannot
acquire private lands except through
succession
453
SUBLEASE
Q: When does an assignment of lease take place?
Q: What is sublease?
A: It exists when the lessee made an absolute
A: It is an agreement between a sublessor and transfer of his leasehold rights in a contract, and he
sublessee whereby the former grants temporarily has disassociated himself from the original contract
the enjoyment or use of the same thing, service or of lease. (Pineda, p. 451)
work subject of the original contract of lease to the
latter in exchange for compensation or price, Note: The assignment has the effect of novation
respecting the terms and conditions of original consisting in the substitution. There being a novation,
contract of lease between the lessor and lessee. the consent of lessor is necessary to effect assignment
unless the contract of lease allows the lessee to assign.
Q: What is the nature of sublease? (Pineda, p. 452)
A: It is a separate and distinct contract of lease Q: What is the effect of assignment of lease?
wherein the original lessee becomes a sublessor to
a sublessee. A: The personality of the original lessee disappears
and there only remain in the juridical relation of
Q: What are the requisites of a valid sublease? two persons: the lessor and the assignee, who is
converted into a lessee. (Pineda, p. 451)
A: There must be no express prohibition for
sublease in a contract of lease. Also, the duration of Q: Distinguish sublease from assignment of lease.
sublease cannot be longer than that of the lease to
which it is dependent A:
SUBLEASE ASSIGNMENT OF LEASE
Q: Who are the parties to a sublease?
There are 2 leases and 2 There is only one juridical
A: distinct juridical relationship, that of the
1. Lessor relationships although lessor and the assignee,
2. Sublessor (original lessee in the contract of immediately connected who is converted into a
and related to each other lease
lease)
3. Sublessee Personality of the lessee Personality of the lessee
does not disappear disappears
Q: Does the lessee have the right to sublease the Lessee does not transmit
Lessee transmits
property? absolutely his rights and
absolutely his rights to
obligations to the
the assignee
sublessee
A: Yes, unless expressly stipulated.
Sublessee, generally,
Assignee has a direct
does not have any direct
Note: If the prohibition to sublease is not express but action against the lessor
action against the lessor
only implied, the sublease will still be allowed.
(Art.1650)
Q: May a lessee sublease a leased property
Q: What is the remedy of the lessor if the lessee without the consent of the lessor?
violates the prohibition as to sublease?
A: Yes, provided that there is no express prohibition
A: Rescission and damages or only damages against subleasing. Under the law, when in the
allowing the contract to remain in force. The contract of lease of things, there is no express
sublessee is subsidiarily liable for any rent due. The prohibition, the lessee may sublet the thing leased
lessor has an accion directa against the sublessee without prejudice to his responsibility for the
for unpaid rentals and improper use of the object. performance of the contract toward the lessor. (Art.
1650, NCC)
Q: Can rights under a contract of lease be
assigned? In case there is a sublease of the premises being
leased, the sublessee is bound to the lessor for all
A: GR: Lessee cannot assign the lease without the acts which refer to the use and preservation of
consent of lessor (Art. 1649, NCC) the thing leased in the manner stipulated between
the lessor and the lessee. (Art. 1651, NCC)
XPN: Stipulation to the contrary
454 CIVIL LAW TEAM

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The sublessee is subsidiarily liable to the lessor for

any rent due from the lessee. However, the Q: What are the remedies when either the lessor
sublessee shall not be responsible beyond the or the lessee did not comply with his obligations?
amount of the rent due form him.
A: RED
As to the lessee, the latter shall still be responsible 1. Rescission and damages;
to the lessor for the rents; bring to the knowledge 2. Damages only (contract will be allowed to
of the lessor every usurpation or untoward act remain in force); or
which any third person may have committed or 3. Ejectment
may be openly preparing to carry out upon the
thing leased; advise the owner the need for all IMPLIED NEW LEASE
repairs; to return the thing leased upon the
termination of the lease just as he received it, save Q: What is tacita reconducion (implied new lease)?
what has been lost or impaired by the lapse of time
or by ordinary wear and tear or from an inevitable A: A lease that arises if at the end of the contract
cause; responsible for the deterioration or loss of the lessee should continue enjoying the thing
the thing leased, unless he proves that it took place leased for 15 days with the acquiescence of the
without his fault. (1999 Bar Question) lessor, unless a notice to the contrary had
previously been given by the either party.
Q: What is the responsibility of the lessee to the
lessor in case he subleases the property? Q: What are the requisites for tacita reconducion?
A: By express provision of Article 1650, NCC, the A:

lessee is still responsible for the performance of his 1. The term of the original contract has expired
obligations toward the lessor. 2. The lessor has not given the lessee a notice to
vacate
Q: What are the responsibilities of a sublessee to 3. The lessee continued enjoying the thing leased
the lessor? for at least 15 days with the acquiescence of
the lessor
A: GR: No juridical relationship between lessor and
sublessee. Q: When is there no implied new lease?
XPNs: A:
1. All acts which affect the use and 1. Before or after the expiration of the term,
preservation of the thing leased there is a notice to vacate given by either
2. For any rent due to the lessor from the party;
lessee which the latter failed to pay, the 2. There is no definite fixed period in the original
lessor must collect first from the lessee, lease contract as in the case of successive
and if the lessee is insolvent, the renewals.
sublessee becomes liable (subsidiary
liability) Q: What are the effects of an implied new lease?
Q: When is a sub-lessee liable to the lessor? A:

1. The period of the new lease is not that stated
A: in the original contract; but for then legal
1. All acts which refer to the use and periods established by law in Art. 1682, if the
preservation of the thing leased in the manner lease is rural lease, or Art. 1687, if the lease is
stipulated between the lessor and the lessee urban lease.
2. The sublessee is subsidiary liable to the lessor 2. Accessory obligations contracted by a third
for any rent due from the lessee person are extinguished (Art. 1672, NCC)
3. Other terms of the original contract are
REMEDIES IN SUBLEASE revived
Q: What is accion directa? Note: The terms that are revived are only those
which are germane to the enjoyment of
A: A direct action which the lessor may bring possession, but not those with respect to special
against a sublessee who misuses the subleased agreements which are by nature foreign to the
property. right of occupancy or enjoyment inherent in a
contract of lease.
455
DURATION OF SUBLEASE 6. If the option is given to the lessor, the lessee

cannot renew the lease against the former’s
Q: What is the duration of the lease? refusal
7. The lessor may impose additional conditions
A: after the expiration of the original period
1. With determinate or fixed period – Lease will 8. Par. 2, Art. 1687, NCC provides that in the
be for the said period and it ends on the day event that the lessee has occupied the leased
fixed without need of a demand premises for over a year, courts may fix a
2. No fixed period longer term of lease
a. For rural lands (Art. 1682, NCC) – It shall
be all time necessary for the gathering of Note: The power of the courts to establish a
fruits which the whole estate may yield in grace period is potestative or discretionary,
1 year, or which it may yield once depending on the particular circumstances of the
b. For urban lands case.
3. If rent is paid daily, lease is from the day to day
4. If rent is paid weekly, lease is from week to Q: What is perpetual lease?
week
5. If rent paid monthly, lease is from month to A: A lease contract providing that the lessee can
month stay in the premises for as long as he wants and for
6. If rent is paid yearly, lease is from year to year as long as he can pay the rentals and its increase.
Q: When is the lessee entitled to a reduction of Note: It is not permissible. It is a purely potestative
rent? condition because it leaves the effectivity and
enjoyment of leasehold rights to the sole and exclusive
will of the lessee.
A: GR: In case of the loss of more than one-half of
the fruits through extraordinary and unforeseen
TERMINATION OF LEASE
fortuitous events.
Q: When does immediate termination of lease
XPN: Stipulation to the contrary.
apply?
Note: It is applicable only to lease of rural lands.
A:
1. Only to dwelling places or any other building
Q: What are the rules on the extension of the
intended for human habitation
lease period?
2. Even if at the time the contract was perfected,
the lessee knew of the dangerous condition or
A:
waived the right to rescind the contract on
1. If a lease contract for a definite terms allows
account of this condition
lessee to duly notify lessor of his desire to so
extend the term, unless the contrary is
Q: What are the grounds for termination of lease?
stipulated
2. “May be extended” as stipulation – lessee can
A: WiRe-LEx-Run
extend without lessor’s consent but lessee
1. Expiration of the period
must notify lessor
2. Resolution of the right of lessor (i.e.:
3. “May be extended for 6 years agreed upon by
when the lessor is a usufructuary and the
both parties” as stipulation – this must be
usufruct is terminated)
interpreted in favor of the lessee. Hence,
3. By the will of the purchaser or transferee
oridinarily the lessee, at the end of the original
of the thing
period, may either:
4. Loss of the thing
a. leave the premises; or
5. Rescission due to the performance of the
b. remain in possession
obligations of one of the parties stated
4. In co-ownership, assent of co-owner is needed,
under Art. 1654 and 1657.
otherwise, it is void or ineffective as against
6. The dwelling place or any other building is
non-consenting co-owners
unfit for human habitation and is
5. Where according to the terms of the contract,
dangerous to life or health.
the lease can be extended only by the written
consent of the parties thereto, no right of
Q: Will the death of the lessee extinguish the lease
extension can rise without such written
agreement?
consent
456 CIVIL LAW TEAM

LEASE
A: No. The death of the lessee will not extinguish rescission of the contract of lease and for
the lease agreement, since lease is not personal in damages.
character and the right is transmissible to the heirs. 1. Will the action prosper? If so,
(Heirs of Dimaculangan v. IAC, G.R. No. 68021, Feb. against whom? Explain.
20, 1989) (1997 Bar Question) 2. In case of rescission, discuss the
rights and obligations of the parties.
Q: What are the remedies of the aggrieved party in
case of non-compliance of the other party’s A:
obligations under Arts. 1654 (obligations of lessor) 1. Yes, the action for rescission of the lease will
and 1657 (obligations of lessee)? prosper because Joel cannot assign the lease
to Ernie without the consent of Victor (Art.
A: 1649, NCC). But Joel may sublet to Conrad
1. Rescission with damages because there is no express prohibition (Art.
2. Damages only allowing the lease to subsists 1650, NCC; Alipio v. CA, G.R. No. 134100, Sept.
29, 2000).
Q: What are the restrictions in exercising the right
to rescind? Victor can rescind the contract of lease with
Joel, and the assignment of the lease to Ernie,
A: JAS on the ground of violation of law and of
1. Breach must be Substantial and contract. The sub-lease to Conrad remained
fundamental (de minimis non curat lex – valid for 2 years from January 1, 1991, and had
the law is not concerned with trifles). not yet lapsed when the action was filed on
2. It requires Judicial action. May 15, 1992.
3. It can be filed only by the Aggrieved party.
2. In case of rescission, the rights and obligations
Q: In case of action to rescind, may the other party of the parties should be as follows: At the time
validly request for time within which to comply that Victor filed suit on May 15, 1992, the
with his duties? assignment had not yet lapsed. It would lapse
on December 1, 1994, the very same date that
A: No. The aggrieved party seeking rescission will the 5-year basic lease would expire. Since the
prevail. Under Article 1659, NCC, the court has no assignment is void, Victor can get the property
discretion to refuse rescission, unlike the situation back because of the violation of the lease.
covered by Art. 1191, NCC, in the general rules on Both Joel and Ernie have to surrender
obligations [Bacalla v. Rodriguez, et. al., C.A. 40 possession and are liable for damages. But
O.G. (supp.), Aug. 30, 1941] Conrad has not yet incurred any liability on the
sublease which still subsisted at the time of
Q: How is the amount of damages measured? the filing of the action on May 15, 1992.
A: Difference between the rents actually received Ernie can file a cross-claim against Joel for
and that amount stipulated in the contract damages on account of the rescission of the
representing the true rental value of the premises. contract of assignment. Conrad can file a
(A. Maluenda and Co. vs. Enriquez, 49 Phil. 916) counter-claim against Victor for damages for
lack of causes of action at the time of the filing
Q: Under a written contract dated December 1, of the suit. (2005 Bar Question)
1989, Victor leased his land to Joel for a period of
five (5) years at a monthly rental of P1,000.00, to Q: A is the owner of a lot on which he constructed
be increased to P1,200.00 and P1,500.00 on the a building in the total cost of P10,000,000. Of that
third and fifth year, respectively. On January 1, amount B contributed P5,000,000 provided that
1991, Joel subleased the land to Conrad for a the building as a whole would be leased to him (B)
period of 2 years at a monthly rental of P1,500.00. for a period of ten years from January 1, 1985 to
On December 31, 1992, Joel assigned the lease to December 31, 1995 at a rental of P100,000 a year.
his compadre, Ernie, who acted on the belief that To such condition, A agreed. On December 20,
Joel was the rightful owner and possessor of the 1990, the building was totally burned. Soon
said lot. Joel has been faithfully paying the thereafter, A’s workers cleared the debris and
stipulated rentals to Victor. When Victor learned started construction of a new building. B then
on May 15, 1992 about the sublease and served notice upon A that he would occupy the
assignment, he sued Joel, Conrad and Ernie for building being constructed upon completion, for
the unexpired portion of the lease term,
457
explaining that he had spent partly for the services by agreement were to be rendered
construction of the building that was burned. A gratuitously. (Pineda Sales, p. 444, 20002 ed)
rejected B’s demand. Did A do right in rejecting B’s
demand? III. LEASE OF RURAL AND URBAN LANDS
A: Yes, A was correct in rejecting the demand of B. Q: What is a rural land (Product-Producing Lands)?
As a result of the total destruction of the building
by fortuitous event, the lease was extinguished. A: Regardless of site, if the principal purpose is to
(Art. 1655, NCC) (1993 Bar Question) obtain products from the soil, the lease is of rural
lands. Hence, as used here, rural lands are those
II. LEASE OF WORK OR SERVICES where the lessee principally is interested in soil
products.
Q: What is a contract for a piece of work?
Q: What is an urban land (Non-Product Producing
A: A contract whereby one of the parties binds Lands)?
himself to produce a result out of his work or labor
and the other party binds himself to pay A: Lands leased principally for purposes of
remuneration therefor. residence are called urban lands.
Q: What is a contract for lease of services? Q: What is the form required of a contract of lease
of things?
A: A contract whereby one party binds himself to
render some service to the other party consisting A: Lease may be made orally, but if the lease of real
his own free activity of labor, and not its result and property is for more than a year, it must be in
the other party binds himself to pay a remuneration writings under the statute of frauds.
therefor. (Pineda Sales, p. 440-441, 2002 ed)
Note: Where the written contract of lease called for
Q: Distinguish lease of services from agency. the erection by the tenant, of a building of strong
wooden materials, but what he actually did construct
A: on the leased premises was semi-concrete edifice at a
LEASE OF SERVICES AGENCY much higher cost, in accordance with a subsequent
Based on employment – oral agreement with the lessor, oral evidence is
Based on representation admissible to prove the verbal modification of the
the lessor of services
– agent represent his original terms of the lease. (Paterno v. Jao Yan, GR. No.
does not represent his
principal and enter into L-12218, February 28, 1961)
employer nor does he
juridical acts
execute juridical acts
Principal contract Preparatory contract Q: What is the purpose in recording a lease?
Q: Distinguish contract of piece of work and A: A lease does not have to be recorded in the
contract of lease services. Registry of Property to be binding between the
parties; registration is useful only for the purpose of
A: notifying strangers to the transaction. (Art 1648,
PIECE OF WORK LEASE OF SERVICES NCC)
Object of contract is the Object of contract is the
result of the work service itself and not the Q: What is meant by proper authority?
without considering the result which it generates
labor that produced it A: Proper authority means a power of attorney to
If the result promised is Even if the result constitute the lease.
not accomplished, the intended is not attained,
lessor or promissory is the services of the lessor Q: When is a proper authority required?
not entitled to must still be paid
compensation A:
1. Husband – with respect to the paraphernal
Q: What if the value has not been agreed upon in a real estate of the wife;
contract of lease of service? 2. Father or Guardian – with respect to the
property of the minor or the ward;
A: When no rate has been fixed, the same shall be 3. Manager – with respect to the property under
determined by the courts according to the uses and administration.
customs of the place and the evidence, unless the
458 CIVIL LAW TEAM

LEASE
Q: Who is a manager? A. QUALIFIED PERSONS
A: Q: Who are persons disqualified to become

1. administrator of a conjugal property lessees?
2. administrator of a co-ownership
3. administrator of state patrimonial property A: Persons disqualified to buy referred to in article
1490 and 1491, are also disqualified to become
Q: Is the husband the administrator of the lessees of the things mentioned therein. (Article
paraphernal real property? 1646)
A: No, unless such administrator has been Q: Are foreigners disqualified to lease lands in the
transferred to him by virtue of a public document. Philippines?
(Art. 110, FC)
A: GR: Yes
Q: A husband was properly given his wife
authority to administer the paraphernal real XPN: lease of lands for residential purposes
property. Does this necessarily mean that just (Smith, Bell and Co. vs. Register of Deeds, 96
because the husband is now the administrator, he Phil 53)
can lease said property without any further
authority? B. REGISTRATION
A: It depends.
Q: What is the effect of recording of contract of
1. If the lease will be for one year or less, no
lease?
other authority is required.
2. If the lease on the real property will be for
A: Even if not recorded with the Registry of
more than a year, then a special power of
Property, the lease is binding between the parties.
attorney (aside from the public
However, if third persons have to be bound, the
instrument transferring administration) is
contract must be recorded.
required. (Art.1878, NCC)
3. Furthermore, whether it be a) or b), if the Note: However, if a purchaser has actual knowledge of
lease is to be recorded, there must be a the existence of the lease, which knowledge is
special power of attorney. (Art 1647, equivalent to registration, he is bound by the lease.
NCC). (Quimson vs. Suarez, 45 Phil. 901)
Note: If it is the wife who is administering her Q: When is “proper authority” required for the
paraphernal real estate, the husband has no authority recording of contract of lease?
whatever, to lease, in any way, or administer the
property.
A:
1. Spouse with respect to the separate or
Q: If a father, who is administering the real estate
exclusive properties of the other, unless the
of his minor son, wants to record the lease, should
administration of such properties has been
he ask for judicial permission?
transferred to said spouse done in a public
instrument duly recorded. (Art. 110, Family
A: Yes (Art. 1647, NCC). But even if no judicial
Code)
authorization is asked, such defect cannot be
invoked by a lessee who has dealt with him.
(Summers v. Mahinay, [CA] 40 O.G. [11th S] No. 18, Note: Conjugal property cannot be leased
p.40). Only the son or his own heirs may question without the joint consent of the spouses
the validity of the transaction.
2. Father or guardian with respect to the real
property of a minor child or ward
Q: How can leases of personal property be binding
3. Administrator or manager of a realty with
on third persons?
respect to the property under his
administration
A: By executing a public instrument (by analogy,
Art. 1625, NCC).
Note: The proper authority is a special power of
attorney duly executed if the lease is for more than
one year (Art. 1878 (8))
459
Q: When is lease of real property a real right? Q: What are the rules on changing the form of
thing leased?
A: Generally, a lease of real property is a personal
right. However, it is considered real under the A:
following conditions: 1. Lessor can alter the thing leased provided
1. If it is for more than one year and to be there is no impairment of the use to which the
enforceable, it must be in writing things are devoted under the terms of the
2. If it is registered with the Registry of lease
Property, regardless of its period. (Pineda 2. Alteration can be made by lessee provided the
Sales, p. 449, 2002 ed) value of property is not substantially impaired
C. PROHIBITIONS Q: What are the rules if urgent repairs are

necessary?
Q: What is the rule regarding sublease of rural or
urban lands? A:
1. Lessee is obligated to tolerate the work,
A: The lessee may sublet the property in absence of although it may be annoying to him and
an express prohibition. although during the same time he may be
deprived of a part of the premises, if repairs
Note: The sublease may be of the whole or part only last for not more than 40 days
of the thing leased. 2. If repairs last for 40 days or more, lessee can
ask for reduction of the rent in proportion to
This right to sublease is without prejudice to the st
the time – including the 1 40 days – and the
sublessor’s responsibility in the performance of the part of the property of which he is deprived
contract towards the lessor. (Art. 1650, NCC)
Note: In either case, rescission may be availed of if the
IV. RIGHTS AND OBLIGATIONS main purpose of the lease is to provide a dwelling
OF LESSORS AND LESSEES place and the property becomes uninhabitable.
Q: Who are the persons disqualified to become Q: What are the effects if the lessor fails to make
lessees? urgent repairs?
A: GR: Husband and wife with respect to their A: The lessee may:
separate properties. 1. order repairs at the lessor’s cost;
2. sue for damages;
XPN: Separation of property agreed upon or 3. suspend the payment of the rent; or
judicial separation of property. 4. ask for rescission, in the case of
substantial damage to him.
Q: What are the obligations of the lessor?
Q: What are the kinds of trespass in lease?
A: ReD-CaP
1. To Deliver the things in such condition as A:
to render it fit for the use intended 1. Trespass in the fact (perturbation de mere
(cannot be waived) hecho) – physical enjoyment is reduced. Lessor
2. GR: To make, during the lease all the will not be liable.
necessary Repairs in order to keep it 2. Trespass in the law (perturbation de derecho)
suitable for the use to which it has been – a 3rd person claims legal right to enjoy the
devoted premises. Lessor will be held liable.
XPN: Stipulation to the contrary. Q: What are the obligations of the lessee?
3. To maintain the lessee in the Peaceful and A: TRUE-PRU

adequate enjoyment of the lease for the 1. Pay the price of the lease according to the
entire duration of the contract terms stipulated
2. Use the thing leased as a diligent father of
4. Cannot alter the form of the thing leased a family devoting it to the use stipulated,
and in the absence of stipulation, to that
which may be inferred from nature of
460 CIVIL LAW TEAM

LEASE
thing leased, according to the custom of V. SPECIAL RULES FOR LEASE OF RURAL AND
the place URBAN LANDS
3. Pay the Expenses of the deed of lease
4. Notify the lessor of Usurpation or RURAL LANDS
untoward acts
5. To notify the lessor of need for Repairs
Q: What is the effect of sterility of land in case of
6. To Return the property leased upon
rural lease?
termination of the lease in the same
condition as he receive it except when
A: There is no reduction. The fertility or sterility of
what has been lost or impaired by lapse
the land has already been considered in the fixing
of time, ordinary wear and tear or
of the rent.
inevitable cause/ fortuitous event
7. Tolerance of urgent repairs which cannot
Q: What is the effect of damage caused by a
be deferred until the end of lease (par. 1,
fortuitous event on the rural lease?
Art. 1662, NCC)
A:
Q: What is the effect of the destruction of the
1. Ordinary fortuitous event – no reduction. The
thing leased?
lessee being the owner of crops must bear the
loss. Res perit domino
A:
2. Extraordinary fortuitous event –
1. Total destruction by fortuitous event – Lease is
a. More than one-half of the fruits were lost,
extinguished.
there is a reduction (XPN: specific
2. Partial destruction
stipulation to the contrary)
a. Proportional reduction of rent; or
b. Less than one-half, or if the loss is exactly
b. Rescission of the lease.
one-half, there is no reduction
Q: When may lessee suspend payment of rent? Note: The rent must be reduced proportionately.
A: When the lessor fails to: Q: X leased his land to Y for the purpose of
1. undertake urgent repairs; or growing crops thereon. Due to an extraordinary
2. maintain the lessee in peaceful and fortuitous event, more than one-half of the crops
adequate enjoyment of the property were. In the lease contract, the rent was fixed at
leased. an aliquot (proportional) part of the crops. Is Y
entitled to a reduction in rents?
Note: For the intervening period, the lessee does not
have to pay the rent.
A: No, because here the rent is already fixed at an
aliquot part of the crops. Thus, every time the crops
Q: When does the suspension become effective?
decrease in number, the rent is reduced
automatically. If therefore, the tenant here refuses
A: The right begins:
to give the stipulated percentage, he can be
1. In the case of repairs – from the time of
evicted. (Hijos de I. dela Rama v. Benedicto, 1 Phil.
the demand and it went unheeded
495)
2. In case of eviction – from the time the
final judgment for eviction becomes
Q: What is the rule for reduction of rent?
effective
A: The reduction on rent can be availed of only if
Q: What are the alternative remedies of the
the loss occurs before the crops are separated from
aggrieved party in case of non-fulfillment of
their stalk, root, or trunk. If the loss is afterwards,
duties?
there is no reduction of rent.
A:
Q: What is the duration of rural lease with an
1. Rescission and damages
unspecified duration?
2. Damages only, allowing the contract to remain
in force (specific performance)
A: The lease of a piece of rural land, when its
duration has not been fixed, is understood to have
been for all the time necessary for the gathering of
the fruits which the whole estate leased may yield
in one year, or which it may yield once, although
461
two or more years have to elapse for the purpose. time on two or more separate holdings belonging to
(Art. 1682, NCC) different landholders without the knowledge and
consent of the landholder with whom he had first
Q: A rural lease was agreed upon to last for a entered into the tenancy relationship. (Sec. 24, RA
certain definite period. But the tenant planted 1199)
fruit trees which would require a long period of
time to bear fruit, as well as introduce certain Q: What are the grounds for ejectment of the
more or less valuable improvements. Has this act tenant on shares?
of the tenant changed the duration of the
contract? A:
1. voluntary surrender of the land
A: No, the duration of the lease has not been 2. bona fide intention of the landholders to
changed. There was a fixed period for the lease and cultivate the land himself personally or thru
therefore the nature of the fruit trees or valuable the employment of farm machineries
improvements is immaterial. (Iturralde v. Garduno, 3. tenant violates or fails to comply with the
9 Phil. 605) terms and conditions of the contract or the RA
1199
Q: If at the end of the lease, there are still pending 4. failure to pay the agreed rental or deliver the
crops, who will own them? landholder’s share
5. tenant uses the land for different purpose
A: The lessee. However, a contrary stipulation will 6. share-tenant fails to follow farm practices
prevail. which will contribute towards the proper care
and increased production
Q: What is the rule for land tenancy on shares? 7. negligence permits serious injury to land which
will impair its productive capacity
A: This refers to the contracts of aparceria. Land 8. conviction by a competent court of a tenant or
tenancy on shares are primarily governed by special any member of his immediate family or farm
laws (ex: Agricultural Tenancy Act, RA 1199), and household of a crime against the landholder or
suppletorily, by the stipulations of the parties, the a member of his immediate family.
provisions on partnership, and the customs of the
place. Q: Will the sale of the land extinguish the farm-
tenancy relationship?
Q: Who is a tenant?
A: No. The purchaser or the transferee shall assume
A: A tenant is a person, who, himself, and with the the rights and obligations of the former landholder
aid of available from within his immediate farm in relation to the tenant.
household, cultivates the land belonging to, or
possessed by another, with the latter’s consent for Q: Does death extinguish the tenancy
the purpose of production, sharing the produce relationship?
with the landholder under the share tenancy
system, or paying to the landlord a price certain or A: It depends.
ascertainable in produce, or in money or both, 1. Death of tenant – extinguishes
under the leasehold tenancy system. (Pangilinan v. relationship but heirs and members of his
Alvendia, GR no. 10690, June 28, 1957) immediate farm household may continue
to work on the land until the close of the
Q: What is included in an immediate farm agricultural year.
household? 2. Death of landholder – does not extinguish
the relationship because his heirs shall
A: This includes the members of the family of the assume his rights and obligation.
tenant, and such other person/s, whether related
to the tenant or not, who are dependent upon him Q: Does the expiration of the period of the
for support, and who usually help him operate the contract of tenancy fixed by the parties extinguish
farm enterprise. the relationship?
Q: Can a tenant work for different landowners? A: No. The landlord is required by law, if the tenant
does not voluntarily abandon the land or turn it
A: It is prohibited for a tenant, whose holding is 5 over to him, to ask the court for an order of
hectares or more, to contract work at the same
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dispossession of the tenant. (Sec. 49, RA 1199, as

amended by RA 2263) A: The contract is void insofar as the excess is
concerned.
URBAN LANDS
Q: Is there a form of contract required for
Q: What are the rules applicable to repairs which household service?
an urban lessor is liable?
A: No formalities are required for the contract of
A: household service, and even if the term of
1. Special stipulation employment should exceed one year, the Statute of
2. If none, custom of the place. Frauds will not apply because in the contract,
performance is supposed to commence right away.
Q: What are the rules when the duration of lease
is not fixed? Q: Can house helpers work more than ten hours a
day?
A:
1. If there is a fixed period - the lease would be A: Yes because the law says “shall not be required.”
for the said period. Hence, if the helper agrees to work overtime, this is
2. If there are no fixed period - apply the clearly permissible. (Baloloy v. Uy, [CA] 62 O.G.
following: 5661)
a. rent paid daily – lease is from day to day
b. rent paid weekly – lease is from week to Q: When can additional compensation be
week demanded?
c. rent paid monthly – lease from month to
month A:
d. rent paid yearly – lease from year to year 1. if the voluntary overtime work is agreed upon;
2. if the nature of the work so demands such
VI. HOUSEHOLD SERVICE overtime service.
Q: What is the scope of household service? Q: What are included in the computation of period
for hours of work?
A: It includes the work of family servants and driver
but not that of laborers in a commercial or A: The hours of work include not only those of
industrial enterprise. actual work but also the time during which the
services of the helper are “available” to the
Q: Is working to reduce indebtedness allowed? employer, even if the services are not availed of.
A: Yes. What is prohibited is to work as a servant Q: What is the rule for yayas?
for free.
A: A “yaya” or nursemaid for small children, by the
Q: When is medical attendance given free? nature of her work, may render more than 10 hours
work, but she is evidently entitled to a higher rate
A: Medical attendance shall be given free only if the of compensation.
injury or illness arose out of and in the course of
employment. Q: What is the rule on vacation for helpers?
Q: What is the duration of the contract for A: The law says “four days” vacation each month,
household service? with pay. If the helper insists on this, the employer
must grant the vacation, and he cannot insist on
A: 2 years. Any period agreed upon in excess of two merely giving the monetary value.
years is void.
VII. CONTRACT OF LABOR
Note: Upon expiration, however, it is subject to a
renewal for such periods as may be agreed upon by Q: What is a contract of labor?
the parties. (Pineda Sales, p. 551, 2002 ed, Article 142,
Labor Code) A: It is a consensual, nominate, principal, and
commutative contract whereby one person, called
Q: What is the effect if the contract for household the employer, compensates another, called the
service is more than 2 years?
463
laborer, worker, or employee, for the latter’s Q: What are the elements of the contract of work?
service. It is relationship impressed with public
interest in keeping with our constitutional policy of A:
social justice. 1. Consent
2. Object – execution of piece of work
Q: What are the essential characteristics of a 3. Cause – certain price or compensation
contract of labor?
Q: Who is a contractor?
A:
1. Employer(Er) freely enters into a contract with A: The worker is also called a contractor. He in turn
the employee(Ee); may obtain the services of others, who will work
2. Employer can select who his Ee will be under him.
3. Employer can dismiss the Ee; the worker in
turn can quit his job; Q: What is the test to determine if one is an Ee or
4. Employer must give remuneration; and an independent contractor?
5. Employer can control and supervise the
conduct of the Ee. A: The “right of control” test is used. If the person
for whom services are to be performed controls
A. OBLIGATION IN CASE OF only the end to be achieved, the worker is a
DEATH OR INJURY OF LABORERS contractor; if the former controls not only the end
but also the manner and means to be used, the
Q: What are the rules regarding Er’s liability in latter is an employee.
case of death or injury?
Q: What can the contractor furnish?
A:
1. If the cause of the death or personal injury A: The contractor may furnish:
arose out of and in the course of employment, 1. Both material and the labor,
the Er is liable. 2. Or only the labor.
2. If the cause was due to the Ee’s own notorious
negligence, or voluntary act or drunkenness, Q: What are the duties of a contractor who
the employer shall not be liable. furnishes both work and the material?
3. If the cause was partly due to the Ee’s lack of
sue care, the compensation shall be A: This is equivalent to sale; therefore, these are
inequitably reduced. the duties:
4. If the cause was due to the negligence of a 1. To deliver
fellow Ee, the Er and the guilty Ee shall be 2. To transfer ownership
liable solidarily. 3. To warrant against eviction and hidden
5. If the cause was due to the intentional or defects
malicious act of fellow Ee, the felloe Ee is
liable; also the Er unless he exercised due Q: What are the remedies of the Er in case of
diligence in selecting and supervising said Ee. defects?
VIII. CONTRACT FOR PIECE OF WORK A:

1. Ask the contractor to remove the defect or to
Q: Distinguish contract for piece of work from execute another work.
lease of services. 2. If the contractor fails or refuses, the Er can ask
another at the contractor’s expense. If a
A: building is involved, expenses for correction
CONTRACT FOR PIECE OF and completion may be recovered.
LEASE OF SERVICES
WORK
The object is the Q: What is the rule on agreements waiving or
The object is services. limiting the contractor’s liability?
resultant work or object.
The risk is generally A:
borne by the Er, not by 1. In the absence of fraud, the agreement would
The risk is borne by the
the worker unless the
worker before delivery. ordinarily be valid.
latter is guilty of fault or
2. In the absence of prohibitory statute, the
negligence.
validity of a limitation is generally upheld, with
464 CIVIL LAW TEAM

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a view of obtaining compensation 5. Even if payment has been made, an action is

commensurate to the risk assumed. still possible. (Art. 1723, NCC)
Q: A asked B to make a radio cabinet. B bound Q: Who is liable when a building collapses during
himself to furnish the material. Before the radio an earthquake?
cabinet could be delivered, it was destroyed by a
fortuitous event. A) Who suffers the loss? B) Is the A: It depends.
contract extinguished? 1. If the proximate cause of the collapse of
the building is an earthquake, no one can
A: be held liable in view of the fortuitous
a. B suffers the loss of both the materials and the event.
work, unless there was mora accipiendi. If 2. If the proximate cause is, however,
there was mora accipiendi, it is evident that A defective designing or construction, or
suffers the loss. directly attributable to the use of inferior
or unsafe material, it is clear that liability
b. No, and therefore B may be required to do the exists.
work all over again, unless there had been a
prior stipulation to the contrary or unless a re-
making is possible. (Art. 1717, NCC)
Note: The law merely refers to the burden of the loss,

and not to the extinguishment of the contract.
Q: Who suffers the loss in case of a fortuitous

event or an unavoidable accident?
A: As a general principle, in the absence of an

express agreement to the contrary, the contractor
must bear the loss from the destruction of work
underway, even in case of an unavoidable accident.
Q: What is the effect when the Er accepts the

work?
A:
1. The contractor is generally relieved of liability.
2. If the acceptance is made without objection,
the Er may still sue for hidden defects.
Q: Where is the place of payment?
A:
1. Where stipulated
2. If no stipulation, then at time and place of
delivery.
Q: What are the rules on liability for collapse of a

building?
A:
1. The collapse of the building must be within 15
years from the completion of the structure.
2. The prescriptive period is 10 years following
the collapse.
3. If the engineer or architect supervises the
construction, he shall be solidarily liable with
the contractor.
4. The liability does applies to collapse or ruin,
not to minor defects.
465
LAND TITLES AND DEEDS matters that might be litigated or decided in the
land registration proceedings.
I. TORRENS SYSTEM
Q: What bodies implement land registration under
A. CONCEPT AND BACKGROUND the Torrens system?
Q: What is Torrens System? A:

1. Courts
A: It is a system for registration of land under 2. Department of Environment and Natural
which, upon the landowner’s application, the court Resources (DENR)
may, after appropriate proceedings, direct the 3. Department of Justice (DOJ) through the Land
register of deeds for the issuance of a certificate of Registration Authority (LRA) and its Register of
title. Deeds
4. Department of Land Reform (DLR)
Q: What are the purposes in adopting the Torrens 5. Department of Agriculture (DAR)
System of land registration?
B. CERTIFICATE OF TITLE
A: To:
1. avoid possible conflicts of title regarding Q: What is a Certificate of Title?
real property; and
2. facilitate transactions relative thereto by A: Certificate of title is the transcript of the decree
giving the public the right to rely on the of registration made by the Register of Deeds in the
face of the Torrens certificate of title and registry. It accumulates in one document a precise
to dispense with the need of inquiring and correct statement of the exact status of the fee
further. simple title which an owner possesses.
Note: The Government has adopted the Torrens Q: What are the two types of certificates of title?
system due to its being the most effective measure to
guarantee the integrity of land titles and to protect A:
their indefeasibility once the claim of ownership is 1. Original Certificate of Title (OCT) – the first title
established and recognized. (Casimiro Development issued in the name of the registered owner by
Corporation v. Nato Mateo, G.R. No. 175485, July 27, the Register of Deeds covering a parcel of land
2011) which had been registered under the Torrens
system by virtue of a judicial or administrative
Q: What is the nature of the proceeding for land proceeding.
registration under the Torrens System?
It consists of one original copy filed in the
A: The Torrens system is judicial in character and Register of Deeds, and the owner’s duplicate
not merely administrative. Under the Torrens certificate delivered to the owner.
system, the proceeding is in rem, which means that
it is binding upon the whole world. 2. Transfer Certificate of Title (TCT) – the title
issued by the Register of Deeds in favor of a
Accordingly, all occupants, adjoining owners, transferee to whom the ownership of a
adverse claimants, and other interested person are registered land has been transferred by any
notified of the proceedings, by publication of the legal mode of conveyance (e.g. sale, donation).
notice of initial hearing, and have a right to appear
in opposition to such application. It also consists of an original and an owner’s
duplicate certificate.
Note: In a registration proceeding instituted for the
registration of a private land, with or without
Q: Differentiate title over land, land title,
opposition, the judgment of the court confirming the
title of the applicant or oppositor, as the case may be,
certificate of title, and deed.
and ordering its registration in his name, constitutes,
when final, res judicata against the whole world. A: Title is a juridical act or a deed which is not
sufficient by itself to transfer ownership but
A decree of registration that has become final shall provides only for a juridical justification for the
be deemed conclusive not only on the questions effectuation of a mode to acquire or transfer
actually contested and determined but also upon all ownership.
466 CIVIL LAW TEAM

LAND TITLES AND DEEDS
Land title is the evidence of the owner’s right or which expanded the areas covered by the TCTs in
extent of interest, by which he can maintain question?
control, and as a rule, assert right to exclusive
possession and enjoyment of property. A: The general rule is that the State cannot be put
in estoppel by the mistakes or error of its officials or
Certificate of title is the transcript of the decree of agents. However, like all general rules, this is also
registration made by the Register of Deeds in the subject to exceptions, viz.:
registry. It accumulates in one document a precise
and correct statement of the exact status of the fee “Estoppels against the public are little
simple title which an owner possesses. favored. They should not be invoked except in rate
and unusual circumstances, and may not be
A deed is the instrument in writing, by which any invoked where they would operate to defeat the
real estate or interest therein is created, alienated, effective operation of a policy adopted to protect
mortgaged or assigned, or by which title to any real the public. They must be applied with
estate may be affected in law or equity. circumspection and should be applied only in those
special cases where the interests of justice clearly
Q: Is title over land synonymous with ownership? require it. Nevertheless, the government must not
be allowed to deal dishonorably or capriciously
A: No. Title is a juridical act or a deed which is not with its citizens, and must not play an ignoble part
sufficient by itself to transfer ownership but or do a shabby thing; and subject to limitations x x
provides only for a juridical justification for the x, the doctrine of equitable estoppel may be
effectuation of a mode to acquire or transfer invoked against public authorities as well as
ownership. It provides the cause for the acquisition against private individuals.”
of ownership. (i.e. sale = title; delivery = mode of
acquisition of ownership). In the case at bar, for nearly twenty years petitioner
failed to correct and recover the alleged increase in
Ownership, on the other hand, is an independent the land area of St. Jude. Its prolonged inaction
right of exclusive enjoyment and control of the strongly militates against its cause, as it is
thing for the purpose of deriving therefrom all tantamount to laches, which means “the failure or
advantages required by the reasonable needs of the neglect, for an unreasonable and unexplained
owner and the promotion of the general welfare length of time, to do that which by exercising due
but subject to the restrictions imposed by law and diligence could or should have been done earlier; it
the rights of others. (Art. 427, NCC) is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the
Note: Registration under the Torrens system, not party entitled to assert it either has abandoned it or
being a mode of acquiring ownership, does not create declined to assert it.”
or vest title. The Torrens certificate of title is merely an
evidence of ownership or title in the particular Likewise time-settled is the doctrine that where
property described therein. In that sense, the issuance innocent third persons, relying on the correctness
of the certificate of title to a particular person does not of the certificate of title, acquire rights over the
preclude the possibility that persons not named in the property, courts cannot disregard such rights and
certificate may be co-owners of the real property
order the cancellation of the certificate. Such
therein described with the person named therein, or
cancellation would impair public confidence in the
that the registered owner may be holding the property
in trust for another person (Casimiro Development
certificate of title, for everyone dealing with
Corporation v. Nato Mateo, G.R. No. 175485, July 27, property registered under the Torrens system
2011). would have to inquire in every instance whether
the title has been regularly issued or not. This
Q: St. Jude’s Enterprise, Inc. is the registered would be contrary to the very purpose of the law,
owner of a parcel of land located in Caloocan City. which is to stabilize land titles. Verily, all persons
It then subdivided the said land and was later on dealing with registered land may safely rely on the
found to have expanded and enlarged with an correctness of the certificate of title issued
increase of 1, 421 square meters. Subsequently, St. therefor, and the law or the courts do not oblige
Jude sold the lots to several individuals. Thus, the them to go behind the certificate in order to
Solicitor General filed an action seeking the investigate again the true condition of the
annulment and cancellation of the TCT issued in property. They are only charged with notice of the
the name of St. Jude. Is the government stopped liens and encumbrances on the property that are
from questioning the approved subdivision plan noted on the certificate. (Republic of the Philippines
467
v. Court of Appeals and Spouses Catalino Santos, et A: PERA PAID

al., G.R. No. 116111, January 21, 1999) 1. Public grant
2. Emancipation patent or grant
ACQUISITION OF TITLE 3. Reclamation
4. Adverse possession / acquisitive
Q: What are the modes of acquiring title over prescription
land? 5. Private grant or voluntary transfer
6. Accretion
A: I-AS-DO 7. Involuntary alienation
1. By possession of land since time 8. Descent or devise
Immemorial
2. By possession of Alienable and disposable TORRENS TITLE
public land
Q: What is Torrens title?
Note: Under the Public Land Act (CA No.
141), citizens of the Philippines, who by A: It is a certificate of ownership issued under the
themselves or through their predecessors- Torrens system of registration by the government,
in-interest have been in open, continuous, through the Register of Deeds (RD) naming and
exclusive and notorious possession and declaring the owner in fee simple of the real
occupation of alienable and disposable property described therein, free from all liens &
agricultural land of the public domain under encumbrances, except as may be expressly noted
a bona fide claim of ownership since June
there or otherwise reserved by law.
12, 1945, or earlier, (except when prevented
by war or force majeure), shall be
conclusively presumed to have performed
Q: Filomena allegedly bought a parcel of
all the conditions essential to a government unregistered land from Hipolito. When she had the
grant and shall be entitled to a certificate of property titled and declared for tax purposes, she
title. sold it. The Mapili’s question the transfer, saying
that Filomena falsely stated in her Affidavit of
3. By Sale, Donation, and Other modes of Transfer of Real Property that Hipolito sold it to
acquiring ownership her in 1949, since by that time, he is already dead.
Filomena maintains that she is the lawful owner of
Q: What are the modes of acquiring ownership such by virtue of the issuance of the Torrens
over land? certificate and tax declarations in her name. Is
Filomena the lawful owner of such property?
A: OLD TIPS
1. Occupation A: No. Torrens certificate pertaining to the disputed
2. Law property does not create or vest title, but is merely
3. Donation an evidence of an indefeasible and incontrovertible
4. Tradition title to the property in favor of the person whose
5. Intellectual creation name appears therein. Land registration under the
6. Prescription Torrens system was never intended to be a means
7. Succession of acquiring ownership.
Q: Differentiate possession from occupation. Neither does the existence of tax declarations
create or vest title. It is not a conclusive evidence of
A: ownership, but a proof that the holder has a claim
OCCUPATION POSSESSION of title over the property. (Larena v. Mapili, et. al.,
It applies only to It applies to properties G.R. No. 146341, Aug. 7, 2003)
property without whether with or
owner. without owner. Q: Hadji Serad Lantud filed an action to quiet title
By itself does not confer with damages with the RTC of Lanao del Sur.
It confers ownership. Accordingly, Datu Kiram Sampaco with several
ownership.
There can be no armed men, forcibly and unlawfully entered his
There can be possession property and destroyed the nursery buildings,
occupation without
without ownership. cabbage seedlings and other improvements. Datu
ownership.
Kiram however denied the material allegationos of
Hadji Lantud asserting that he and his
Q: How are land titles acquired?
predecessors-in-interest are the ones who had
468 CIVIL LAW TEAM

been in open, public, continuous, and exclusive A Torrens certificate is an evidence of indefeasible
possession of the property in dispute. He also title of property in favor of the person in whose
alleged that he inherited the land in 1952 from his name appears therein – such holder is entitled to
father and had been in adverse possession and the possession of the property until his title is
ownership of the subject lost, cultivating and nullified.
planting trees and plants. He also declared the
land for taxation purposes and paid real estate Q: In an action for recovery of possession of realty,
taxes. who has the better right of possession, the
registered owner armed with a Torrens title or the
Who is the rightful owner of the subject property? occupants brandishing a notarized but
unregistered deed of sale executed before the
A: Datu Kiram is the rightful owner. land was registered under the Torrens system?
The Torrens title is conclusive evidence with respect
to the ownership of the land described therein, and A: It is settled that a Torrens title is evidence of
other matters which can be litigated and decided in indefeasible title to property in favor of the person in
land registration proceedings. Tax declarations and whose name the title appears. It is conclusive evidence
tax receipts cannot prevail over a certificate of title with respect to the ownership of the land described
which is an incontrovertible proof of ownership. An therein. It is also settled that the titleholder is entitled to
original certificate of title issued by the Register of all the attributes of ownership of the property, including
Deeds under an administrative proceeding is as possession.
indefeasible as a certificate of title issued under
judicial proceedings. However, indefeasibility of In the present case, there is no dispute that petitioner is
title does not attach to titles secured by fraud and the holder of a Torrens title over the
misrepresentation. Nonetheless, fraud and entire Lot 83. Respondents have only their notarized but
misrepresentation, as grounds for cancellation of unregistered Kasulatan sa Bilihan to support their claim of
patent and annulment of title, should never be ownership. Thus, even if respondents’ proof of ownership
presumed, but must be proved by clear and has in its favor a juris tantum presumption of authenticity
convincing evidence, mere preponderance of and due execution, the same cannot prevail over
evidence not being adequate. Fraud is a question petitioner’s Torrens title..(Asuncion Urieta Vda. De Aguilar
of fact which must be proved. Thus, respondent’s v. Spouses Ederlina and Raul Alfaro, G.R. No. 104402, July
Torrens title is a valid evidence of his ownership of 5, 2010.)
the land in dispute. (Datu Kiram Sampaco v. Hadji
Serad Mingca Lantud, G.R. No. 163551, July 18, INDEFEASIBILITY AND INCONTROVERTIBILITY
2011) OF CERTIFICATES OF TITLE
Q: What are the effects of the issuance of a Q: What is meant by indefeasibility and
Torrens title? incontrovertibility of certificates of title?
A: TRINC A: The certificate, once issued, becomes a

1. The land is placed under the operation of conclusive evidence of the title ownership of the
Torrens System; land referred to therein. What appears on the face
2. Land is Relieved from all claims except of the title is controlling on questions of ownership
those noted thereon and provided by law; of the property in favor of the person whose name
3. The land becomes Incontrovertible and appears therein and such cannot be defeated by
indefeasible; adverse, open, and notorious possession; neither
4. Title to the land becomes Non- can it be defeated by prescription.
prescriptible; and
5. The certificate of title is not subject to Q: What are the rules as regards indefeasibility
Collateral attack. and incontrovertibility?
Q: What is the probative value of a Torrens title? A:

1. The certificate of title serves as evidence of an
A: Torrens title may be received in evidence in all indefeasible title to the property in favor of
courts of the Philippines and shall be conclusive as the person whose name appears therein.
to all matters contained therein, principally as to
the identity of the land owner except so far as 2. After the expiration of the one (1) year period
provided in the Land Registration Act (LRA) from the issuance of the decree of registration
469
upon which it is based, it becomes under a judicial registration proceeding, provided the
incontrovertible. land covered by said certificate is a disposable public
land within the contemplation of the Public Land Law.
3. Decree of registration and the certificate of
title issued pursuant thereto may be attacked MIRROR DOCTRINE
on the ground of actual fraud within one (1)
year from the date of its entry and such an Q: What is the mirror doctrine?
attack must be direct and not by a collateral
proceeding. The validity of the certificate of A: All persons dealing with a property covered by
title in this regard can be threshed out only in Torrens certificate of title are not required to go
an action expressly filed for the purpose. beyond what appears on the face of the title.
Where there is nothing on the certificate of title to
Note: The defense of indefeasibility of a Torrens title indicate any cloud or vice in the ownership of the
does not extend to a transferee who takes it with property, or any encumbrance thereon, the
notice of a flaw in the title of his transferor. To be purchaser is not required to explore further than
effective, the inscription in the registry must have what the Torrens title upon its face indicates in
been made in good faith. A holder in bad faith of a quest for any hidden defect or inchoate right that
certificate of title is not entitled to the protection of may defeat his right thereto.
the law, for the law cannot be used as a shield for
fraud. (Adoracion Rosales Rufloe, et al., v. Leonarda Note: Stated differently, an innocent purchaser for
Burgos et al., G.R. No. 143573, Jan. 30, 2009) value relying on the Torrens title issued is protected.
Q: There is no specific provision in the Public Land Q: When does the mirror doctrine apply?
Law (CA No. 141, as amended) or the Land
Registration Act (Act 496), now PD 1529, fixing the A: When a title over a land is registered under the
one (1) year period within which the public land Torrens system.
patent is open to review on the ground of actual
fraud as in Section 38 of the Land Registration Act, Q: Bee bought a parcel of land with a clean TCT.
now Section 32 of PD 1529, and clothing a public However, when he found some persons occupying
land patent certificate of title with indefeasibility. it, he fenced the property over the occupants’
What is the effect of such absence? objection. May Bee invoke the principle that a
person dealing with a registered land need not go
A: None. The rule on indefeasibility of certificates of beyond its certificate of title in this case?
title was applied by the Court in Public Land Patents
because, according to the Court, such application is A: No. Although it is a recognized principle that a
in consonance with the spirit and intent of person dealing on a registered land need not go
homestead laws. beyond it certificate of title, it is also a firmly settled
rule that where there are circumstances which
The Court held that the pertinent pronouncements would put a party on guard and prompt him to
in cases clearly reveal that Sec. 38 of the Land investigate or inspect the property being sold to
Registration Act, now Sec. 32 of PD 1529 was him, such as the presence of occupants/tenants
applied by implication by this Court to the patent thereon, it is of course, expected from the
issued by the Director of Lands duly approved by purchaser of valued piece of land to inquire first
the Secretary of Natural Resources, under the into the status or nature of the possession of the
signature of the President of the Philippines in occupants, i.e., whether or not the occupants
accordance with law. possess the land en concepto de dueno, in concept
of an owner.
The date of issuance of the patent, therefore,
corresponds to the date of the issuance of the As is the common practice in the real estate
decree in ordinary registration cases because the industry, an ocular inspection of the premises
decree finally awards the land applied for involved is a safeguard that a cautious and prudent
registration to the party entitled to it, and the purchaser usually takes. Should he find out that the
patent issued by the Director of Lands equally and land he intends to buy is occupied by anybody else
finally grants, awards, and conveys the land applied other than the seller who, as in this case, is not in
for to the applicant. actual possession, it would then be incumbent upon
the purchaser to verify the extent of the occupant’s
Note: A certificate of title issued under an possessory rights. The failure of the prospective
administrative proceeding pursuant to a homestead buyer to take such precautionary steps would mean
patent is as indefeasible as a certificate of title issued
470 CIVIL LAW TEAM

negligence on his part and would thereby preclude at the time of such purchase, or before he has
him from claiming or invoking the rights of a notice of the claim or interest of some other person
“purchaser in good faith.” (Mathay v. CA, G.R. No. in the property. (San Roque Realty and
115788, Sept. 17, 1988) Development Corp. v. Republic, G.R. No. 163130,
Sept. 7, 2007)
Q: Spouses X and Y mortgaged a piece of
registered land to A, delivering as well the OCT to Note: An innocent purchaser for value includes a
the latter, but they continued to possess and lessee, mortgagee, or other encumbrances for value.
cultivate the land, giving 1/2 of each harvest to A
in partial payment of their loan to the latter. A Purchaser in good faith and for value is the same as an
however, without the knowledge of X and Y, innocent purchaser for value.
forged a deed of sale of the aforesaid land in favor
Good faith consists in an honest intention to abstain
of himself, got a TCT in his name, and then sold the
from taking any unconscious advantage of another.
land to B.
Q: If the land subject of the dispute was not
B bought the land relying on A's title, and
brought under the operation of the Torrens
thereafter got a TCT in his name. It was only then
system, will the concept of an innocent purchaser
that the spouses X and Y learned that their land
for value apply?
had been titled in B's name. May said spouses file
an action for reconveyance of the land in question
A: If the land in question was not brought under the
against B? Reason.
operation of Torrens system because the original
certificate of title is null and void ab initio, the
A: The action of X and Y against B for reconveyance
concept of an innocent purchaser for value does
of the land will not prosper because B has acquired
not apply.
a clean title to the property being an innocent
purchaser for value.
Note: Good faith and bad faith is immaterial in case of
unregistered land. One who purchases an unregistered
A forged deed is an absolute nullity and conveys no land does so at his peril.
title. The fact that the forged deed was registered
and a certificate of title was issued in his name, did Q: In 1979, Nestor applied for and was granted a
not operate to vest upon A ownership over the Free Patent over a parcel of agricultural land with
property of X and Y. The registration of the forged an area of 30 hectares, located in General Santos
deed will not cure the infirmity. However, once the City. He presented the Free Patent to the Register
title to the land is registered in the name of the of Deeds, and he was issued a corresponding
forger and title to the land thereafter falls into the Original Certificate of Title (OCT) No. 375.
hands of an innocent purchaser for value, the latter Subsequently, Nestor sold the land to Eddie. The
acquires a clean title thereto. A buyer of a deed of sale was submitted to the Register of
registered land is not required to explore beyond Deeds and on the basis thereof, OCT No. 375 was
what the record in the registry indicates on its face cancelled and Transfer Certificate of Title (TCT) No.
in quest for any hidden defect or inchoate right 4576 was issued in the name of Eddie. In 1986, the
which may subsequently defeat his right thereto. Director of Lands filed a complaint for annulment
This is the "mirror principle" of the Torrens system of OCT No. 375 and TCT No. 4576 on the ground
which makes it possible for a forged deed to be the that Nestor obtained the Free Patent through
root of a good title. fraud. Eddie filed a motion to dismiss on the
ground that he was an innocent purchaser for
Besides, it appears that spouses X and Y are guilty value and in good faith and as such, he has
of contributory negligence when they delivered the acquired a title to the property which is valid,
OCT to the mortgagee without annotating the unassailable and indefeasible. Decide the motion.
mortgage thereon. Between them and the innocent
purchaser for value, they should bear the loss. A: Nestor’s motion to dismiss the complaint for
(1999 Bar Question) annulment of OCT No. 375 and TCT No. 4576 should
be denied for the following reasons:
Q: Who is a purchaser in good faith and for value?
1. Eddie cannot claim protection as an
A: A purchaser in good faith and for value is one innocent purchaser for value nor can he
who buys property of another, without notice that interpose the defense of indefeasibility of
some other person has a right to, or interest in such his title, because his TCT is rooted on a
property and pays a full and fair price for the same void title. Under Sec. 91, CA No. 141, as
471
amended, otherwise known as the Public 5. Sufficiently strong indications to impel

Land Act, statements of material facts in closer Inquiry into the location,
the applications for public land must be boundaries and condition of the lot;
under oath. Sec. 91 of the same act 6. Purchaser had full Knowledge of flaws
provides that such statements shall be and defects in the title; or
considered as essential conditions and 7. Where a person buys land not from the
parts of the concession, title, or permit registered owner but from whose rights
issued, any false statement therein, or to the land has been merely Annotated
omission of facts shall ipso facto produce on the certificate of title.
the cancellation of the concession. The
patent issued to Nestor in this case is void Q: Duran owned two parcels of land which were
ab initio not only because it was obtained made subject of a deed of sale in favor of Fe, her
by fraud but also because it covers 30 mother. After obtaining title in her name, Fe
hectares which is far beyond the mortgaged the property to Erlinda. With Fe’s
maximum of 24 hectares provided by the failure to redeem, Erlinda acquired the property at
free patent law. public auction. Duran, claiming that the deed of
sale is a forgery, sought to recover the property.
2. The government can seek annulment of Erlinda invokes the defense of being a purchaser in
the original and transfer certificates of good faith. Is Erlinda a purchaser in good faith?
title and the reversion of the land to the
State. Eddie's defense is untenable. The A: Yes. Erlinda, in good faith, relied on the
protection afforded by the Torrens certificate of title in the name of Fe. A fraudulent or
System to an innocent purchaser for value forged document of sale may become the root of a
can be availed of only if the land has been valid title if the certificate of title has already been
titled thru judicial proceedings where the transferred from the name of the true owner to the
issue of fraud becomes academic after name of the forger or the name indicated by the
the lapse of one (1) year from the forger. (Duran v. IAC, G.R. No. L-64159, Sept. 10,
issuance of the decree of registration. In 1985)
public land grants, the action of the
government to annul a title fraudulently Q: When may a forged document become the root
obtained does not prescribe such action of a valid title?
and will not be barred by the transfer of
the title to an innocent purchaser for A: When the seller thru insidious means obtains the
value. (2000 Bar Question) owner’s duplicate certificate of title, converts it in
his name, and subsequently sells or otherwise
Q: Is the right of the public to rely on the face of a encumbers it to an innocent purchaser for value.
certificate of title absolute?
Q: Cipriano, one of Pablo’s heirs, executed an
A: No. This is unavailing when the party concerned extrajudicial settlement of a sole heir and
has actual knowledge of facts and circumstances confirmation sales, declaring himself as the only
that should imply a reasonably cautious man to heir and confirmed the sales made in favor of the
make such further inquiry. spouses Rodolfo. Consequently, a certificate of
title was issued in the name of the spouses, who
Q: What are the exceptions to the application of then sold the property to Guaranteed Homes.
the mirror doctrine? Pablo’s other descendants seek reconveyance of
the property sold to the spouses alleging that the
A: BOB LIKA extrajudicial settlement was forged. Who is the
1. Where the purchaser or mortgagee is a rightful owner of the property?
Bank/financing institution;
2. Where the Owner still holds a valid and A: Guaranteed Homes is the rightful owner, even
existing certificate of title covering the assuming that the extrajudicial settlement was a
same property because the law protects forgery. Generally a forged or fraudulent deed is a
the lawful holder of a registered title over nullity and conveys no title. There are, however,
the transfer of a vendor bereft of any instances when such a fraudulent document may
transmissible right; become the root of a valid title. One such instance
3. Purchaser in Bad faith; is where the certificate of title was already
4. Purchases land with a certificate of title transferred from the name of the true owner to the
containing a notice of Lis pendens; forger, and while it remained that way, the land
472 CIVIL LAW TEAM

was subsequently sold to an innocent purchaser. b. In innocent purchaser for value is one who
For then, the vendee had the right to rely upon buys the property of another without notice
what appeared in the certificate. that some other person has a right to or
interest in it, and who pays a full and fair price
Also, the extrajudicial settlement was recorded in at the time of the purchase or before receiving
the Register of Deeds. Registration in the public any notice of another person’s claim. The
registry is notice to the whole world. (Guaranteed burden of proving the status of a purchaser in
Homes, Inc. v. Heirs of Valdez, Heirs of Tugade, good faith and for value lies upon one who
Heirs of Gatmin, Hilaria Cobero and Alfredo and asserts that status. This onus probandi cannot
Siony Tepol, G.R. No. 171531, Jan. 30, 2009) be discharged by mere invocation of the
ordinary presumption of good faith.
Q: Spouses Angel and Adoracion Ruflor acquired a c. The evidence shows that the Rufloes caused a
parcel of land located at Muntinlupa. However, in notice of adverse claim to be annotated on the
1978 Elvira Delos Reyes forged the signatures of title of Delos Reyes as early as November 5,
the spouses in Deed of Sale to make it appear that 1979. The annotation of an adverse claim is a
the disputed property was sold to her by the measure designed to protect the interest of a
former. On the basis of the said deed of sale, Delos person over a piece of real property, and
Reyes succeeded in obtaining title in her name. serves as a notice and warning to third parties
hence, the Rufloes filed a complaint for damages dealing with said property that someone is
against Delos Reyes alleging that the Deed of Sale claiming an interest on the same or may have
was falsified as their signatures appearing thereon a better right than the registered owner
was forged. thereof. Despite the notice of adverse claim,
the Burgos siblings still purchased the property
During the pendency of the case, Delos Reyes sold in question. Equally significant is the fact that
the subject property to the Burgos siblings. Delos Reyes was not in possession of the
Correspondingly, they sold the same to their aunt, subject property when she sold the same to
Leonarda Burgos. However, the sale in favor of the Burgos siblings. It was Amado Burgos who
Leonarda was not registered. Thus, no title was bought the property for his children, the
issued in her name. The subject property remained Burgos siblings.
in the name of the Burgos siblings who also
continued paying the real estate taxes thereon. In the same vein, Leonarda cannot be
categorized as a purchaser in good faith. Since
a. Are the sales of the subject property to it was the Rufloes who continued to have
Delos Reyes to the Burgos siblings and actual possession of the property, Leonarda
the subsequent sale to Leonarda valid should have investigated the nature of their
and binding? possession. (Adoracion Rosales Rufloe, et al.,
b. Who is an innocent purchaser for value? v. Leonarda Burgos et al., G.R. No. 143573, Jan.
c. Are the respondents considered as 30, 2009)
innocent purchasers in good faith and for
value despite the forged deed of sale of Q: Ruben C. Corpuz filed a complaint against
their transferor Delos Reyes? Spouses Hilarion and Justa Agustin on the
allegation that he is the registered owner of 2
A: parcels of land in Laoag City. Accordingly, his
a. It is undisputed that the forged deed of sale father bought it from Elias Duldulao and then
was null and void and conveyed no title. It is a allowed spouses Agustin to occupy the subject
well-settled principle that no one can give properties. Despite demand to vacate, the
what one does not have,nemo dat quod non Agustins refused to leave the premises.
habet. One can sell only what one owns or is
authorized to sell, and the buyer can acquire Ruben alleged that he has better right to possess
no more right than what the seller can transfer the property having acquired the same from his
legally. Due to the forged deed of sale, Delos father through a Deed of Quitclaim in 1971.
Reyes acquired no right over the subject Spouses Agustin however contends that they are
property which she could convey to the Burgos the rightful owners as evidenced by a Deed of
siblings. All the transactions subsequent to the Absolute Saale in their favor. Decide who between
falsified sale between the spouses Rufloe and the parties has the right to possession of the
Delos Reyes are likewise void, including the disputed properties.
sale made by the Burgos siblings to their aunt,
Leonarda.
473
C. CONCEPT OF NATIVE TITLE,

A: Indeed, a title issued under the Torrens system TIME IMMEMORIAL POSSESSION
is entitled to all the attributes of property
ownership, which necessarily includes possession. Q: What is a native title?
Petitioner is correct that as a Torrens title holder
over the subject properties, he is the rightful owner A: it refers to a pre- conquest rights to lands and
and is entitled to possession thereof. In this case, domains which, as far back as memory reaches,
the Quitclaim executed by the elder Corpuz in favor have been held under a claim of private ownership
of petitioner was executed ahead of the Deed of by Indigenous Cultural Communities of Indigenous
Sale of respondents. Thus, the sale of the subject Peoples, have never been public lands and are thus
properties by petitioner’s father to respondents indisputably presumed to have been held that way
cannot be considered as a prior interest at the time before Spanish conquest.
that petitioner came to know of the transaction.
(Ruben C. Corpuz v. Spouses Hilarion Agustin and Q: What is time immemorial possession?
Justa Agustin, G.R. No. 183822, Jan. 18, 2012)
A: It refers to a period of time as far back as
II. REGALIAN DOCTRINE memory can go, certain Indigenous Cultural
Communities of Indigenous Peoples are known to
A. CONCEPT have occupied, possessed in the concept of owner,
and utilized a defined territory devolved to them,
Q: What is Regalian doctrine (jura regalia)? by operation of customary law or inherited from
their ancestors, in accordance with their customs
A: A time-honored constitutional precept that all and tradition.
lands of the public domain belong to the State, and
that the State is the source of any asserted right to Q: Socorro Orcullo was a grantee of a Free Patent
ownership in land, and charged with the for a parcel of land in Cebu. Subsequently, the
conservation of such patrimony. subject lot was sold to SAAD Agro-Industries, Inc.
by one of Orculoo’s heirs. Yet, in 199, the Solicitor
B. EFFECTS General filed a complaint for the annulment of the
title and reversion of the said lot on the ground
Q: Discuss the application of the Regalian doctrine. that the issuance of the free patent and title was
irregular and erroneous, following the discovery
A: All lands not otherwise appearing to be clearly that the lot is allegedly part of the timberland and
within private ownership are presumed to belong forest reserve. Decide on the case.
to the State. Incontrovertible evidence must be
shown that the land is alienable or disposable in A: Under the Regalian doctrine or jura regalia, all
order to overcome such presumption. lands of the public domain belong to the State, and
the State is the source of any asserted right to
Note: It does not negate native title to lands held in ownership in land and charged with the
private ownership since time immemorial. (Cruz v. conservation of such patrimony. In instances where
Secretary of Environment and Natural Resources, G.R. a parcel of land considered to be inalienable land of
No. 135385, Dec. 6, 2000)
the public domain is found under private
ownership, the Government is
Q: Discuss the coordination of the 3 departments
the Government is allowed by law to file an
in their goals in achieving the objectives in the
action for reversion, which is an action where the
conservation and utilization of natural resources.
ultimate relief sought is to revert the land to the
government under the Regalian doctrine.
A: The legislature has the authority to implement
the constitutional provision classifying the lands of
Nevertheless, in applying this doctrine, we must not
the public domain; the executive, administers our
lose sight of the fact that in every claim or right by
public lands pursuant to their duty “to ensure that
the Government against one of its citizens, the
laws be faithfully executed” and in accordance with
paramount considerations of fairness and due
the policy prescribed; lastly, the judiciary steps into
process must be observed. Respondent in this case
the picture if the rules laid down by the legislature
failed to show that the subject lot is part of
are challenged or if it is claimed that they are not
timberland or forest reserve it adverted to. In the
being correctly observed by the executive branch.
face of the uncontroverted status of Free Patent
No. 473408 and OCT No. 0-6667 as valid and regular
issuances, respondent’s insistence on the
474 CIVIL LAW TEAM

classification of the lot as part of the forest reserve transfers it to a Filipino, the flaw in the original
must be rejected. (Saad Agro-Industries, Inc. v. transaction is considered cured and the title of the
Republic of the Philippines, G.R. No. 152570, Sept. transferee is rendered valid. (Borromeo v. Descallar,
27, 2006) G.R. No. 159310, Feb. 24, 2009)
III. CITIZENSHIP REQUIREMENT Q: Who may not file an application for

registration?
Q: Can an alien acquire a private land in the
Philippines? A: PAMP
1. A Public land sales applicant insofar as the
A: GR: An alien cannot acquire private lands. land covered by his sales application is
concerned
XPN: Acquisition by aliens is allowed when:
It is thru hereditary succession. Reason: He acknowledged that he is not
the owner of the land and that the same
Q: Spouses Pinoy and Pinay, both natural-born is a public land.
Filipino citizens, purchased property in the
Philippines. However, they sought its registration 2. An Antichretic creditor cannot acquire by
when they were already naturalized as Canadian prescription the land surrendered to him
citizens. Should the registration be denied on the by the debtor.
ground that they cannot do so being foreign
nationals? Reason: His possession is not in the
concept of an owner but mere holder
A: No. Foreign nationals can apply for registration placed in possession of the land by its
of title over a parcel of land which they acquired by owners.
purchase while still citizens of the Philippines, from
a vendor who has complied with the requirements 3. A Mortgagee or his successor in interest
for registration under the Public Land Act. (Republic to the mortgage, notwithstanding the
v. CA and Lapina, G.R. No. 108998, Aug. 24, 1994) lapse of the period for the mortgagor to
pay the loan secured to redeem it
Q: Joe, an alien, invalidly acquired a parcel of land
in the Philippines. He subsequently transferred it Reason: Such act would amount to a
to Jose, a Filipino citizen. What is the status of the pactum commissorium, which is against
transfer? good morals and public policy.
A: If a land is invalidly transferred to an alien who 4. A person or entity whose claim of

subsequently becomes a Filipino citizen or transfers ownership to land had been Previously
it to a Filipino, the flaw in the original transaction is denied in a reinvindicatory action.
considered cured and the title of the transferee is
rendered valid. Since the ban on aliens is intended Q: May a corporation own lands?
to preserve the nation’s land for future generations
of Filipinos, that aim is achieved by making lawful A: It depends.
the acquisition of real estate by aliens who became Corporation sole can acquire by purchase a
Filipino citizens by naturalization or those transfers parcel of private agricultural land without
made by aliens to Filipino citizens. As the property violating the constitutional prohibition since it
in dispute is already in the hands of a qualified has no nationality.
person, a Filipino citizen, there would be no more
public policy to be protected. The objective of the Corporation:
constitutional provision to keep our lands in Filipino Private Lands
hands has been achieved. (Borromeo v. Descallar, 1. At least 60% Filipino (Sec. 7, Art.
G.R. No. 159310, Feb. 24, 2009) XII, 1987 Constitution)
2. Restricted as to extent
Q: If Joe had not transferred it to Jose but he, reasonably necessary to enable
himself, was later naturalized as a Filipino citizen, it to carry out purpose for which
will his acquisition thereof remain invalid? it was created
3. If engaged in agriculture, it is
A: No. If a land is invalidly transferred to an alien restricted to 1,024 hectares.
who subsequently becomes a Filipino citizen or
475
Patrimonial property of the State (Sec. 3, Q: What is original registration?

Art. XII, 1987 Constitution)
1. Lease (cannot own land of the A: It is a proceeding brought before the MTC where
public domain) for 25 years there is no controversy or opposition, or contested
renewable for another 25 years lots where the value of which does not exceed
2. Limited to 1,000 hectares P100,000.00 (Sec. 4, R.A. 7691) or in the RTC (as a
3. Applies to both Filipinos and land registration court) when the value exceeds
foreign corporations. P100,000 to determine title or ownership of land on
the basis of an application for registration or
Q: May a corporation apply for registration of a answer/opposition by a claimant in a cadastral
parcel of land? registration.
A: Yes, through lease not exceeding 1,000 hectares. Q: What are the kinds of original registration?
Such lease shall not exceed twenty five (25) years Distinguish.
and renewable for not more than twenty five (25)
years. (Sec. 3, Art. XII, 1987 Constitution) A:
ADMINISTRATIVE/
Note: Determinative of this issue is the character of
JUDICIAL/ VOLUNTARY/
INVOLUNTARY/
the parcels of land – whether they were still public or ORDINARY
CADASTRAL
already private – when the registration proceedings Filing with the proper Compulsory registration
were commenced. If they are already private lands, court an application by initiated by the
the constitutional prohibition against acquisitions the private individual government, to
by a private corporation would not apply. himself adjudicate ownership of
land and involuntary on
IV. ORIGINAL REGISTRATION under PD 1529 the part of the
(Property Registration claimants, but they are
Q: What laws govern land registration? Decree) compelled to
substantiate their claim
A: under Sec. 48 of CA 141 or interest through an
1. Property Registration Decree (PD 1529, as (Public Land Act) answer.
amended)
A. WHO MAY APPLY
Note: Amended and superseded C.A. No. 496.
1. UNDER PD 1529
2. Cadastral Act (Act 2259, as amended)
3. Public Land Act (CA No. 141,as amended)
Q: Who may apply for registration in ordinary
4. Emancipation Decree (PD 27, as amended)
registration proceedings?
5. Comprehensive Agrarian Reform Law of 1988
(R.A. 6657)
A:
6. Indigenous Peoples Rights Act (R.A. 8371)
1. Those who by themselves or through their
predecessors-in-interest have been in open,
Q: What are the purposes of land registration?
continuous, exclusive, and notorious (OCEN)
possession and occupation of alienable and
A: To: QUIP-CC
disposable lands of public domain under a
1. Quiet title to the land and to stop forever
bona fide claim of ownership since June
any question as to the legality of said title;
12,1945 or earlier;
2. relieve land of Unknown claims;
3. guarantee the Integrity of land titles and
2. Those who have acquired ownership of private
to protect their indefeasibility once the
lands by prescription under provisions of
claim of ownership is established and
existing laws;
recognized;
4. give every registered owner complete
3. Those who have acquired ownership of private
Peace of mind;
lands or abandoned river beds by right of
5. issue a Certificate of title to the owner
accession or accretion under the existing laws.
which shall be the best evidence of his
ownership of the land; and
4. Those who have acquired ownership of land by
6. avoid Conflicts of title in real estate and
any other manner provided for by law.
to facilitate transactions.
476 CIVIL LAW TEAM

Where the land is owned in common, all the co- Q: Noynoy, Erap, Manny and Gibo are co-owners
owners shall file the application jointly. (Sec. 14, PD of a parcel of land. May Manny seek registration in
1529) his name of the land in its entirety?
Q: Who may apply for registration of a land A: Since a co-owner cannot be considered a true
subject to a: owner of a specific portion until division or partition
is effected, he cannot file an application for
1. Pacto de retro sale? registration of the whole area without joining the
co-owners as applicants.
GR: Vendor a retro may apply for registration.
Q: What are the requisites for the filing of an
XPN: Vendee a retro, should the period for application under Sec. 14(1) of PD. No. 1529?
redemption expire during pendency of
registration proceedings and ownership to A:
property is consolidated in vendee a retro. 1. That the property is an agricultural land of
public domain;
Note: Pacto de retro sale refers to a sale with right 2. That it has been classified by a positive act of
to repurchase. government as alienable and disposable (A and
D);
2. Trust? 3. That the applicant, by himself or through his
predecessors-in-interest has been in open,
GR: Trustee may apply for registration. continuous, exclusive and notorious
possession and occupation of the land in the
XPN: Unless prohibited by the instrument concept of owner (OCENCO); and
creating the trust. 4. That such possession and occupation is under
a bona fide claim of ownership since June 12,
Note: Trusteeship or trust is a fiduciary relationship 1945 or earlier.
with respect to property which involves the
existence of equitable duties imposed upon the 2. UNDER CA 141
holder of the title to the property to deal with it for
the benefit of another Q: Who may apply for registration under the
Public Land Act or CA No. 141?
3. Reserva troncal?
A: Those who by themselves or through their
Reservor has the right to apply for registration predecessors-in-interest have been in open,
but the reservable character of the property continuous, exclusive and notorious possession and
will be annotated in the title. occupation of alienable and disposable agricultural
lands of the public domain, under a bona fide claim
Note: In reserva troncal the ascendant who inherits of acquisition or ownership, since June 12, 1945,
from his descendant any property which the latter
except when prevented by war or force majeure.
may have acquired by gratuitous title from another
ascendant, or a brother or sister, is obliged to
Note: The following conditions must concur in order
reserve such property as he may have acquired by
that the benefits of the Public Land Act on the
operation of law for the benefit of relatives who are
confirmation of imperfect or incomplete title may be
within the third degree and who belong to the line
availed of:
from which said property came.
1. The applicant must be a Filipino citizen;
2. He must have, by himself or through his
Q: May private corporations hold alienable lands predecessors-in-interest, possessed and
of public domain? occupied an alienable and disposable
agricultural portion of the public domain;
A: No. The word “persons” refers to natural persons 3. Such possession and occupation must have
who are citizens of the Philippines. Juridical or been open, continuous, exclusive, notorious
artificial persons are excluded. Sec. 3, Art. XII of the and in the concept of owner, since June, 12,
1987 Constitution prohibits private corporations or 1945; and
associations from holding alienable lands of the 4. The application must be filed with the
public domain except by lease. proper court.
477
Q: What is meant by public land? registered to be already alienable and disposable at

the time of the application for registration of title is
A: The term is uniformly used to describe so much filed.
of the national domain under the legislative power
of the Congress as has not been subjected to The possession of INC has been established not only
private right or devoted to public use. from 1952 and 1959 when it purchased the
respective halves of the subject lot, but is also
Q: What are the means by which public lands may tacked on to the possession of its predecessors-in-
be disposed of? interest. These possessions and occupation––from
Sabuco, including those of his parents, to INC; and
A: from Sabuco to Badanguio to INC––had been in the
1. For homestead settlement; concept of owners: open, continuous, exclusive,
2. By sale; and notorious possession and occupation under
3. By lease; a bona fide claim of acquisition of property. These
4. By confirmation of imperfect of incomplete had not been disturbed as attested to by
titles: respondent’s witnesses. (Republic of the Philippines
a. By judicial legalization; or v. Iglesia ni Cristo, G.R. No. 180067, June 30, 2009.)
b. By administrative legalization (free
patent) Q: In 1913, Gov. Gen. Forbes reserved for
provincial park purposes a parcel of land which,
Q: When is a person deemed to possess an sometime thereafter, the court ordered registered
imperfect title over property? in Palomo’s name. In 1954, then Pres. Magsaysay
converted the land into the Tiwi Hot Spring
A: When the applicant for confirmation of National Park, under the management of the
imperfect title has shown possession and Bureau of Forest Development. The area was
occupation that is: (OCENI) never released as alienable or disposable. The
1. open, Palomos, however, continued to possess the said
2. continuous, property, had introduced improvements therein as
3. exclusive and well as paid real estate taxes. The Republic now
4. notorious seeks the cancellation of the titles over the subject
5. in the concept of an owner land. Should the cancellation be granted?
Q: What is the effect of possession of an imperfect A: Yes. The adverse possession which may be the
title? basis of a grant of title in confirmation of imperfect
title cases applies only to alienable lands of the
A: When the conditions set by law are complied public domain. There is no question that the lands
with, the possessor of the land, by operation of law, in the case at bar were not alienable lands of the
acquires a right to government grant, without the public domain. The records show that such were
necessity of a certificate of the title being issued. never declared as alienable and disposable and
subject to private alienation prior to 1913 up to the
Q: In 1998, Iglesia ni Cristo filed its application for present. (Sps. Palomo, et. al., v. CA, et. al., G.R. No.
Registration of Title before the MCTC in Paoay- 95608, Jan. 21, 1997)
Currimao. Yet, the Republic filed an opposition to
INC’s application. The cadastral court held that the Q: Bracewell asserts that he has a right of title to a
essential elements for judicial confirmation of an parcel of land having been, by himself and through
imperfect title over the subject lot have been his predecessors-in-interest, in xxx occupation xxx
complied with. The CA also held that the INC has under a bona fide claim of ownership since 1908.
been in continuous, open, and peaceful possession The land has been classified as alienable or
and occupation of the lot for more than 40 years. disposable only on May 27, 1972. May his
May a judicial confirmation of imperfect title application for confirmation of imperfect title be
prosper when the subject property has been granted?
declared as alienable only after June 12, 1945?
A: No. The land was only classified as alienable or
A: In Naguit, the Court held a less stringent disposable on May 27, 1972. Prior to said date,
requirement in the application of Sec. 14(1) of PD when the subject parcels of land were classified as
1529 in that the reckoning for the period of inalienable or not disposable, the same could not
possession is the actual possession of the property be the subject of confirmation of imperfect title.
and it is sufficient for the property sought to be There can be no imperfect title to be confirmed over
478 CIVIL LAW TEAM

lands not yet classified as disposable or alienable. In private persons. As held in Palomo v. CA, forest land is
the absence of such classification, the land remains not registrable and possession thereof, no matter how
unclassified public land until released and opened lengthy, cannot convert it into private property, unless
to disposition. Indeed, it has been held that the such lands are reclassified and considered disposable
rules on the confirmation of imperfect title do not and alienable. In the case at bar, the property in
apply unless and until the land classified as forest question was undisputedly classified as disposable and
land is released in an official proclamation to that alienable; hence, the ruling in Palomo is inapplicable.
effect so that it may form part of the disposable
agricultural lands of the public domain. (Bracewell Q: Who may apply for judicial confirmation?
v. CA, G.R. No. 107427, Jan. 25, 2000)
A:
Q: In an application for judicial confirmation of 1. Filipino citizens who by themselves or through
imperfect title filed by Naguit, the OSG argues that their predecessors-in-interest have been in
the property xxx must first be alienable. Since the open, continuous, exclusive and notorious
subject land was declared alienable only on 1980, possession and occupation of alienable and
Naguit could not have maintained a bona fide disposable lands of public domain under a
claim of ownership since June 12, 1945, as bona fide claim of acquisition since June 12,
required by Section 14 of the Property Registration 1945 or prior thereto or since time
Decree, since prior to 1980, the land was not immemorial;
alienable or disposable. Is it necessary under
Section 14(1) of the Property Registration Decree 2. Filipino citizens who by themselves or their
(now Sec. 48 (b) of the Public Land Act) that the predecessors-in-interest have been, prior to
subject land be first classified as alienable and the effectivity of PD 1073 on January 25, 1977,
disposable before the applicant’s possession under in open, continuous, exclusive and notorious
a bona fide claim of ownership could start? possession and occupation of agricultural lands
of the public domain under a bona fide claim
A: No. Section 14(1) merely requires the property of acquisition or ownership for at least 30
sought to be registered as already alienable and years, or at least since January 24, 1947;
disposable at the time the application for
registration of title is filed. If the State, at the time 3. Private domestic corporations or associations
the application is made, has not yet deemed it which had acquired lands from Filipino citizens
proper to release the property for alienation or who had possessed the same in the manner
disposition, the presumption is that the and for the length of time indicated in
government is still reserving the right to utilize the paragraphs 1 & 2 above; or
property; hence, the need to preserve its ownership
in the State irrespective of the length of adverse 4. Natural-born citizens of the Philippines who
possession even if in good faith. However, if the have lost their citizenship and who has the
property has already been classified as alienable legal capacity to enter into a contract under
and disposable, as it is in this case, then there is Philippine laws may be a transferee of private
already an intention on the part of the State to land up to a maximum are of 5,000 sq.m., in
abdicate its exclusive prerogative over the property. case of urban land, or 3 hectares in case of
(Republic v. CA and Naguit, G.R. No. 144057, Jan. rural land to be used by him for business or
17, 2005) other purposes.
Note: This case is distinguishable from Bracewell v. CA, Q: What must an applicant for judicial
where the claimant had been in possession of the land confirmation prove?
since 1908 and had filed his application in 1963, or
nine (9) years before the property was declared A:
alienable and disposable in 1972. Hence, registration 1. That the land is alienable and disposable land
was denied. The Bracewell ruling will not apply in this of public domain; and
case because here, the application was made years
after the property had been certified as alienable and 2. That they have been in open, continuous,
disposable. exclusive, and notorious possession and
occupation of the land for the length of time
A different rule obtains for forest lands, such as those
and in the manner and concept provided by
which form part of a reservation for provincial park
law.
purposes the possession of which cannot ripen into
ownership. It is elementary in the law governing
Note: Extended period for filing of application – Sec. 1,
natural resources that forest land cannot be owned by
R.A. 9176 provides in part that, “The time to be fixed in
479
the entire archipelago for the filing of applications 1. Original registration proceedings under
shall not extend beyond December 31, 2020. Provided the Property Registration Decree (PD
that the area applied for does not exceed 12 1529), and
hectares.” 2. Confirmation of imperfect or incomplete
title under Section 48(b) of the Public
Q: Doldol occupied a portion of land for 32 years, Land Act, as amended.
since 1959, which was reserved by Pres. Aquino as
a school site. In view of his refusal to vacate, the Q: What are the requisites in ordinary registration
school filed a complaint for accion possessoria. proceedings and judicial confirmation of imperfect
Who has a better right over the land in dispute? title?
A: The school has a better right. Doldol has no A: SA-ST-PSA-HPIEST

imperfect title over the land because he failed to 1. Survey of land by Bureau of Lands or any
meet the requirements provided for under Sec. duly licensed private surveyor
48(b) of CA No. 141, as amended by PD 1073, viz: 2. Filing of Application for registration by
applicant
Those who by themselves or through their 3. Setting of date for initial hearing by the
predecessors-in-interest have been in open, court
continuous, exclusive and notorious possession 4. Transmittal of application and date of
and occupation of agricultural lands of the public
initial hearing with all documents or other
domain, under a bona fide claim of acquisition or
pieces of evidence attached thereto by
ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application
clerk of court to National Land Titles and
for confirmation of title, except when prevented Deeds Registration Administration
by wars or force majeure. (NALTDRA)
5. Publication of notice of filing of
While the land is classified as an alienable and application and date and place of hearing
disposable tract of public land, thus meeting the 6. Service of notice by sheriff upon
first requirement, Doldol could not have acquired contiguous owners, occupants and those
an imperfect title to the disputed lot since his known to have interest in the property
occupation started only in 1959, much later than 7. Filing of Answer or opposition to the
June 12, 1945. Not having complied with the application by any person whether named
conditions set by law, Doldol cannot be said to have in the notice or not
acquired a right to the land in question as to 8. Hearing of case by court
segregate the same from the public domain. Doldol 9. Promulgation of judgment by court
cannot, therefore, assert a right superior to the 10. Issuance of a decree by court declaring
school. (Republic v. Doldol, G.R. No. 132963, Sept. the decision final, and instructing the
10, 1998) NALDTRA to issue a decree of
confirmation and registration
3. UNDER RA 8371 11. Entry of decree of registration in
NALDTRA
Q: What law governs the ownership and 12. Sending of copy of the decree of
disposition of ancestral lands and ancestral registration to corresponding RD
domains? 13. Transcription of decree of registration in
the registration book and issuance of
A: RA 8371 of the Indigenous Peoples Rights Act of owner’s duplicate original certificate of
1997 (IPRA) which was enacted October 29, 1997. title (OCT) of applicant by RD, upon
The IPRA is a law dealing with a specific group of payment of prescribed fees
peoples, ie., the Indigenous cultural communities or
the indigenous peoples. The law allows indigenous Note: After judgment has become final and executory,
peoples to obtain recognition of their right of the issuance of decree and OCT is ministerial on the
part of LRA and RD.
ownership over ancestral lands and ancestral
domains by virtue of native title.
Q: Are the Rules of Court applicable in land
registration proceedings
B. REGISTRATION PROCESS AND REQUIREMENTS
A: The Rules of Court could be applied in land
Q: What are the modes of registering land titles?
registration proceedings in a suppletory character
or whenever practicable or convenient.
A: There are two modes:
480 CIVIL LAW TEAM

7. Full names and addresses of All occupants

Note: Motion to intervene in a land registration case is of the land and those of the adjoining
not allowed. owners, if known, and if not known, the
applicant shall state the extent of the
1. APPLICATION search made to find them
FORM AND CONTENTS 8. If the application describes the land as

bounded by a public or private way or
Q: What is the form of the application for Road, it shall state whether or not the
registration or judicial confirmation? applicant claims any portion of the land
within the limits of the way or road, and
A: whether the applicant desires to have the
In writing; line of way or road determined
1. Signed by the applicant or person duly
authorized in his behalf; 9. If the applicant is a Non-resident of the
Philippines, he shall file an instrument in
2. Sworn to before an officer authorized to due form appointing an agent residing in
administer oaths for the province or city the Philippines and shall agree that
where the application was actually service of any legal process shall be of the
signed; and same legal effect as if made upon the
applicant within the Philippines (Sec.16,
3. If there is more than 1 applicant, they PD 1529)
shall be signed and sworn to by and in
behalf of each. Q: What documents must accompany the
application?
Q: What are the contents of the application?
A: All muniments of titles and copies thereof with
A: D CAME FAR N survey plan approved by Bureau of Lands must
1. Description of the land applied for accompany the application.
together with the buildings and
improvements; the plan approved by Q: What are muniments of title?
Director of Lands and the technical
descriptions must be attached A: They are instruments or written evidence which
the applicant holds/possesses to enable him to
2. Citizenship and civil status of the substantiate and prove title to his estate.
applicant
a. If married, name of spouse Q: What is the rule regarding application covering
b. If the marriage has been legally two or more parcels?
dissolved, when and how the
marriage relation was terminated A: An application may include two or more parcels
of land belonging to the applicant/s provided they
3. Assessed value of the land and the are situated within the same province or city. (Sec
buildings and other improvements based 18, PD no 1529)
on the last assessment for taxation
purposes WHERE FILED
4. Manner of acquisition of land Q: Where shall the application be filed?
5. Mortgage or Encumbrance affecting the A: If the application covers a single parcel of land
land or names of other persons who may situated within:
have an interest therein, legal or 1. only one city or province:
equitable RTC or MTC, as the case may be, of the
province or city where the land is
6. The court may require Facts to be stated situated.
in the application in addition to those 2. two or more provinces or cities:
prescribed by the Decree not inconsistent a. When boundaries are not defined –
therewith and may require the filing of in the RTC or MTC of the place where
additional papers it is declared for taxation purposes.
481
b. When boundaries are defined – b. Secretary of Public Highways, Provincial

separate plan for each portion must Governor and Mayor, if the applicant
be made by a surveyor and a requests to have the line of a public way
separate application for each lot or road determined
must be filed with the appropriate c. Secretary of Agrarian Reform, Solicitor
RTC or MTC. General, Director of Lands, Director of
Fisheries, and Director of Mines, if the
Note: MeTC, MCTC, and MTC has jurisdiction to decide land borders on a river, navigable stream,
cadastral and land registration cases, provided: or shore, or on an arm of the sea where a
1. There is no controversy or opposition river or harbor lies
(uncontested lots); or d. Other persons as the court may deem
2. Value of contested lots does not exceed proper
P100,000 (Sec. 4, R.A. 7691)
Note: Service of notice upon contiguous
In other cases, the RTC has jurisdiction. owners is indispensable and lack of service
constitutes extrinsic fraud.
Q: Does the RTC acting as a land registration court
have general or limited jurisdiction? Posting – In conspicuous place on subject land and
on bulletin board of the municipal building for at
A: Sec. 2 of P.D. No. 1529 has eliminated the least fourteen (14) days before the initial hearing.
distinction between the general and the limited
jurisdiction of the registration court. All conflicting Q: Is publication and notice necessary in case the
claims of ownership and interest in the land, and application is amended?
related issues submitted to the court with or
without the unanimity of the parties, may now be A: Publication and notice are necessary where the
heard and resolved by the court. The court is now amendment to the application consists in: SIA
authorized to hear and decide not only non- 1. Substantial change in the boundaries
controversial cases but even contentious issues 2. Increase in the area of the land applied
which used to be beyond its competence. for
3. The inclusion of Additional land
AMENDMENT OF THE APPLICATION
Note: Without such publication, the registration court
Q: When may an amendment of the application be cannot acquire jurisdiction over the area that is added.
made?
Q: When is publication not necessary in case the
A: Amendments to the application including application is amended?
joinder, substitution, or discontinuance as to the
parties may be allowed by the court at any stage of A:
the proceedings upon just and reasonable terms. 1. If the amendment consists in the exclusion of a
(Sec. 19, PD 1529) portion of the area covered by the original
application and the original plan as previously
Q: Who may order that an amendment be done? published, a new publication is not necessary
(Exclusion).
A: The court may at anytime, order an application
to be amended by striking out one or more parcels Note: In this case, the jurisdiction of the court is
of land or by severance of the application. (Sec.18, not affected by the failure of filing a new
PD 1529) application.
Q: What are the requirements in amending the 2. Amendments to the application including
application? joinder, substitution or discontinuance as to
the parties.
A: a. Joinder means joining of two or more
Publication defendants or plaintiffs involved in a single
claim, or where two or more claims or
1. Mailing of notice – Within 7 days after remedies can be disposed of in the same
publication of said notice in the OG to: legal proceedings.
a. Every person named in the notice whose
address is known. b. Substitution means the replacement of one
of the parties in a lawsuit because of events
482 CIVIL LAW TEAM

that prevent the party from continuing with notice of initial hearing and posting as required by
the trial. law has been complied with.
c. Discontinuance means the voluntary DEFECTIVE PUBLICATION

termination of litigation by a plaintiff who
has elected not to pursue it or by both Q: When is publication defective?
parties pursuant to a settlement.
A: There is a defective publication in the following
Note: This may be allowed by the court at
instances:
any stage of the proceedings upon just and
equitable terms.
1. Where what was published in the Official
Gazette is the description of a bigger lot
3. An amendment due to change of name of the which includes the lands subject of
applicant. registration.
2. PUBLICATION OF NOTICE OF FILING OF Reasons:

APPLICATION AND DATE AND PLACE OF HEARING a. Sec. 15, PD 1529 requires that the
application for registration should
Q: What are the purposes of the publication contain the description of the land
requirement for notice of the filing of the subject of registration and this is the
application and the date and place of hearing? description to be published;
b. It is the publication of specific
A: To: boundaries of lands to be registered
1. confer jurisdiction upon the court over that would actually put the
the res. interested parties on notice of the
2. Apprise the whole world of the pending registration proceedings and enable
registration case so that they may assert them, if they have rights and
their rights or interests in the land, if any, interests in the property, to show
and oppose the application. why the application for registration
should not be granted;
Note: The settled rule is that once the registration c. The adjoining owners of the bigger
court had acquired jurisdiction over a certain parcel, or lot would not be the same owners of
parcels of land in the registration proceedings by the smaller lots subject of
virtue of the publication of the application, that registration. Hence, notice to
jurisdiction attaches to the land or lands mentioned adjoining owners of the bigger lot is
and described in the application. not notice to those of the smaller
lots.
Q: May publication of the notice of filing of
application and date and place of hearing be 2. Where the actual publication of the
dispensed with? notice of initial hearing was after the
hearing itself.
A: No. Publication of the notice of filing of
application and date and place of hearing is Q: What is the effect of a defective publication?
mandatory.
A: It deprives the court of jurisdiction.
Q: Where must the said notice be published?
GR: If it is later shown that the decree of
A: registration had included land or lands not
1. Once in the Official Gazette (OG) – this confers included in the publication, then the
jurisdiction upon the court; and registration proceedings and the decree of
2. Once in a newspaper of general circulation registration must be declared null and void –
but only insofar – as the land not included in the
Note: Publication in the Official Gazette is sufficient to publication concerned. But the proceedings and
confer jurisdiction upon the court. (Sec. 23, P.D. 1529) the decree of registration, relating to the lands
that were included in the publication, are valid.
Q: What is considered conclusive proof of
publication and notice? XPN: However, if the difference is not as
substantial as would affect the identity of the
A: The certification of the LRA Administrator and of land, failure to publish the bigger area
the sheriff to the effect that the publication of the
483
(insubstantial inclusion) does not perforce affect

the court’s jurisdiction. Q: May a private person oppose registration on
the ground that the land sought to be registered is
3. OPPOSITION owned by the government?
Q: Who may properly oppose an application for A: No. A private person may not oppose an
registration? application for registration on the ground that the
land applied for is a property of the government.
A: Any person claiming an interest, whether named
in the notice or not, may appear and file an Q: Should an oppositor have title over the
opposition on or before the date of initial hearing, disputed land?
or within such further time as may be allowed by
the court. The opposition shall state all the A: No. The oppositor need not show title in himself;
objections to the application and shall set forth the he should however appear to have interest in the
interest claimed by the party filing the same and property.
apply for the remedy desired, and shall be signed
and sworn to by him or by some other duly Q: Should an oppositor’s interest over the land be
authorized person. (Sec. 25, PD No. 1529) legal or may it be merely equitable?
Q: What are the requisites for a valid opposition? A: It is immaterial whether his interest is in the
character of legal owner or is of a purely equitable
A: nature as where he is a beneficiary of a trust.
1. Set forth objections to the application;
2. State interest claimed by oppositor; ABSENCE OF OPPOSITION OR FAILURE TO OPPOSE
3. Apply for the remedy desired; and DEFAULT
4. Signed and sworn to by him or by some other
duly authorized person. Q: When may a person be declared in default in
land registration proceedings?
Note: The opposition partakes of the nature of an
answer with a counterclaim. A: A person may be declared in default if he fails to
file an opposition.
Q: Who may be an oppositor to the application for
registration or judicial confirmation? Q: What is the effect of failure to oppose?
A: Any person whether named in the notice or not, A: Order of default – The court shall, upon motion
provided, his claim of interest in the property of the applicant, no reason to the contrary
applied for is based on a right of dominion or some appearing, order a default to be recorded and
other real right independent of, and not require applicant to present evidence.
subordinate to, the rights of the government.
Q: A judge declared in default an oppositor who
Q: Who may be proper oppositors in specific had already filed with the court an opposition
cases? based on substantial grounds for his failure to
appear at the initial hearing of the application for
A: The following may be proper oppositors: registration. Is the default order proper? If not,
1. A homesteader who has not yet been what is his remedy?
issued his title but who had fulfilled all the
conditions required by law to entitle him A: No, it is not. Failure of the oppositor to appear at
to a patent. the initial hearing is not a ground for default. In
2. A purchaser of friar land before the which case, his proper remedy is to file a petition
issuance of the patent to him. for certiorari to contest the illegal declaration of
3. Persons who claim to be in possession of order of default, not an appeal.
a tract of public land and have applied
with the Bureau of Lands for its purchase. Q: What is the effect of an order of default in land
4. The Government relative to the right of registration proceedings?
foreshore lessees of public land as the
latter’s rights is not based on dominion or A: An order of default issued in a land registration
real right independent of the right of the case, a proceeding in rem, is binding “against the
government. whole world”, with the exception only of the
484 CIVIL LAW TEAM

parties who had appeared and filed pleadings in the or order of default, not an appeal. (Sec. 4, Rule
registration case. 65, Rules of Court)
Q: What is the effect of the absence of an Note: The petition shall be filed not later than 60
opposition as regards allegations in the days from notice of the order. In case a motion
application? for reconsideration or new trial is timely filed,
whether such motion is required or not, the
A: When there is no opposition, all allegations in petition shall be filed not later than 60 days
the application are deemed confessed on the part counted from the notice of the denial of the
of the opponent. motion. (Sec. 4, Rule 65, Rules of Court)
Q: What if a certificate of title was issued covering Q: Can a party who has been declared in default
non-registrable lands without the government appeal from the judgment by default without first
opposing, is the government estopped from filing a motion to set aside the order of default?
questioning the same?
A: Yes. As held in the case of Martinez v. Republic:
A: The government cannot be estopped from “If it cannot be made any clearer, we hold that a
questioning the validity of the certificates of title, defendant party declared in default retains the right
which were granted without opposition from the to appeal from the judgment by default on the
government. The principle of estoppel does not ground that the plaintiff failed to prove the material
operate against the government for the acts of its allegations of the complaint, or that the decision is
agents. contrary to law, even without need of the prior
filing of a motion to set aside the order of default.
Q: If an order of general default is issued, may the We reaffirm that the Lim Toco doctrine, denying
court automatically grant the application? such right to appeal unless the order of default has
been set aside, was no longer controlling in this
A: No. Even in the absence of an adverse claim, the jurisdiction upon the effectivity of the 1964 Rules of
applicant still has to prove that he possesses all the Court, and up to this day.” (G.R. No. 160895, Oct.
qualifications and none of the disqualifications to 30, 2005.)
obtain the title. If he fails to do so, his application
will not be granted. 4. EVIDENCE
Q: What is the remedy of a person who was Q: What must the applicant for land registration
declared in default by the court? prove?
A: A: The applicant must prove: DIP

1. Motion to set aside default order – A defaulted 1. Declassification – The land applied for has
interested person may gain standing in court been declassified from the forest or
by filing such motion at any time after notice timber zone and is a public agricultural
thereof and before judgment, upon proper land, is alienable and disposable, or
showing that: otherwise capable of registration.
a. his failure to answer (or file an opposition 2. Identity of the land; and
as in ordinary land registration case) was 3. Possession and occupation of the land for
due to: FAME: the length of time and in the manner
i. Fraud required by law.
ii. Accident
iii. Mistake EVIDENCE OF DECLASSIFICATION
iv. Excusable Neglect
b. and that he has a meritorious defense. Q: What may constitute sufficient proof to
(Sec. 3, Rule 9, Rules of Court) establish declassification of land from forest to
alienable or disposable, or agricultural?
2. Petition for Certiorari – Failure of the oppositor
to appear at the initial hearing is not a ground A: POEM-CIL
for default. In which case, his proper remedy is 1. Presidential proclamation
to file a petition for certiorari not later than 2. Administrative Order issued by the
sixty (60) days from notice of judgment, order Secretary of Environment and Natural
or resolution to contest the illegal declaration Resources
3. Executive order
485
4. Bureau of Forest Development (BFD) Land Note: However, under LRA Circular 05-2000, only a
Classification Map certified copy of the original tracing cloth plan need be
5. Certification by the Director of Forestry, forwarded to the LRA.
and reports of District Forester
6. Investigation reports of Bureau of Lands Although mere blue print copies were presented in
investigator court as evidence, the original tracing cloth plan was
7. Legislative act, or by statute attached to the application for registration and was
available to the court for comparison. Hence, the
approval of registration was proper (Republic v. IAC,
Q: The Cenizas applied for registration of their title
G.R. No. L-70594, Oct. 10, 1986)
over a parcel of public land which they inherited.
Without presenting proof that the land in question
Q: What is the effect of the failure to present the
is classified as alienable or disposable, the court
original tracing cloth plan?
granted the application, holding that mere
possession for a period as provided for by law
A: While the submission in evidence of the original
would automatically entitle the possessor the right
tracing cloth plan is a mandatory and even a
to register public land in his name. Was the court
jurisdictional requirement, the Court has
ruling correct?
recognized instances of substantial compliance with
this rule. It is true that the best evidence to identify
A: No. Mere possession for a period required by law
a piece of land for registration purposes is the
is not enough. The applicant has to establish first
original tracing cloth plan from the Bureau of Lands,
the disposable and alienable character of the public
but blueprint copies and other evidence could also
land, otherwise, public lands, regardless of their
provide sufficient identification. In the case of
classification, can be subject of registration of
Republic v. Ludolfo v. Muñoz , respondent
private titles, as long as the applicant shows that he
submitted, among other things, the following
meets the required years of possession. The
supporting documents: (1) a blueprint copy of the
applicant must establish the existence of a positive
survey plan approved by the Bureau of Lands; and
act of the government, such as a presidential
(2) the technical descriptions duly verified and
proclamation or an executive order; administrative
approved by the Director of Lands. (G.R. No.
action; reports of Bureau of Lands investigators and
151910, October 15, 2007).
a legislative act or a statute. (Republic v. Ceniza,
G.R. No. 127060, Nov. 19, 2002)
Q: Under what instance may its presentation be
dispensed with?
EVIDENCE OF IDENTITY OF THE LAND
A: If the survey plan is approved by the Director of
Q: What may be presented as proof of the identity
Lands and its correctness has not been overcome
of the land sought to be registered?
by clear, strong and convincing evidence, the
2 presentation of the tracing cloth plan may be
A: ST D
dispensed with. Thus, original tracing cloth plan
1. Survey plan in general
need not be presented in evidence. (Republic v.
2. Tracing cloth plan and blue print copies of
Ludolfo v. Muñoz, G.R. No. 151910, Oct. 15, 2007).
plan
3. Technical description of the land applied
Q: In case of conflict between areas and
for, duly signed by a Geodetic Engineer
boundaries, which prevails?
4. Tax Declarations
A: GR: Boundaries prevail over area.
Q: In an application for judicial confirmation of
imperfect title, is submission of the original tracing
XPNs:
cloth plan mandatory?
1. Boundaries relied upon do not identify
land beyond doubt.
A: Yes. The Supreme Court declared that the
2. Boundaries given in the registration plan
submission of the tracing cloth plan is a statutory
do not coincide with outer boundaries of
requirement of mandatory character. The plan of
the land covered and described in the
the land must be duly approved by the Director of
muniments of title.
Lands, otherwise the same have no probative value.
(Director of Lands v. Reyes, G.R. No. L-27594, Nov.
EVIDENCE OF POSSESSION AND OCCUPATION
28, 1975)
Q: What may constitute proof of possession?
486 CIVIL LAW TEAM

A: To prove possession, it is not enough to simply

declare one’s possession and that of the applicant’s 5. Where applicants Tacked their possession
predecessors-in-interest to have been “adverse, to that of their predecessor-in-interest
continuous, open, public, peaceful and in concept but they did not present him as witness or
of owner” for the required number of years. The when no proofs of what acts of ownership
applicant should present specific facts to show such and cultivation were performed by the
nature of possession because bare allegations, predecessor.
without more, do not amount to preponderant
evidence that would shift the burden to the Q: Mauricio and Carmencita testified to establish
oppositor. (Diaz v. Republic, G.R. No. 141031, Aug. their claim over the subject lots. When the
31, 2004) application was granted, the OSG appealed,
arguing that weight should not be given to the
Q: What are some specific overt acts of possession self-serving testimonies of the two; that their tax
which may substantiate a claim of ownership? declaration is not sufficient proof that they and
their parents have been in possession of the
A: property for at least thirty years, said tax
1. Introducing valuable improvements on the declaration being only for the year 1994 and the
property like fruit-bearing trees; property tax receipts presented by them were all
2. Fencing the area; of recent dates. Are the said pieces of evidence
3. Constructing a residential house thereon; or sufficient to establish actual possession of land for
4. Declaring the same for taxation purposes. the period required by law thus warranting the
grant of the application?
Note: Evidence to be admissible must, however, be
credible, substantial and satisfactory A: No. Their bare assertions of possession and
occupation by their predecessors-in-interest are
Q: What are insufficient proofs of possession? hardly "the well-nigh incontrovertible" evidence
required in cases of this nature. Proof of specific
A: COF-3T acts of ownership must be presented to
1. Mere Casual cultivation of portions of the substantiate their claim. They cannot just offer
land by claimant. general statements which are mere conclusions of
law than factual evidence of possession.
Reason: Possession is not exclusive and
notorious so as to give rise to a The law speaks of possession and occupation.
presumptive grant from the State. Possession is broader than occupation because it
includes constructive possession. When, therefore,
2. Possession of Other persons in the land the law adds the word occupation, it seeks to
applied for impugns the exclusive quality delimit the all encompassing effect of constructive
of the applicant’s possession. possession. Taken together with the words open,
continuous, exclusive and notorious, the word
3. Mere failure of Fiscal representing the occupation serves to highlight the fact that for an
State to cross-examine the applicant on applicant to qualify, his possession must not be a
the claimed possession. mere fiction.
4. Tax declaration of land sought to be Actual possession of a land consists in the

registered which is not in the name of manifestation of acts of dominion over it of such a
applicant but in the name of the deceased nature as a party would naturally exercise over his
parents of an oppositor. own property. (Republic v. Alconaba, G.R. No.
155012, Apr. 14, 2004)
Reason: Possession of applicant is not
completely adverse or open, nor is it truly Note: “Well-nigh incontrovertible evidence” refers to
in the concept of an owner. the degree of proof of registrable rights required by
law in registration proceedings.
5. Holding of property by mere Tolerance of
the owner. Q: Are tax declarations presented by them
sufficient proof of possession and occupation for
Reason: Holder is not in the concept of the requisite number of years?
owner and possessory acts no matter how
long do not start the running of the A: No. The records reveal that the subject property
period of prescription. was declared for taxation purposes by the
487
respondents only for the year 1994. While belated 4. Presidential issuances and legislative acts.
declaration of a property for taxation purposes does
not necessarily negate the fact of possession, tax Note: It is constitutive of a “fee simple” title
declarations or realty tax payments of property are, or absolute title in favor of the grantee.
nevertheless, good indicia of possession in the
concept of an owner, for no one in his right mind Q: Agustin executed an Affidavit of Transfer of
would be paying taxes for a property that is not in Real Property where Ducat is to perform all the
his actual or, at least, constructive possession. necessary procedures for the registration and
(Republic v. Alconaba, G.R. No. 155012, Apr. 14, acquisition of title over several parcels of land
2004) possessed and occupied by Agustin. Before Ducat
was able to accomplish his task, Agustin died and
EVIDENCE OF PRIVATE OWNERSHIP Bernardo administered the properties. Ducat then
filed an Application for Free Patent over the land,
Q: What are the proofs of private ownership of which was granted. The parcels of land were
land? registered in the names of Ducat and Kiong. The
heirs of Bernardo sought the reconveyance of the
A: STOP land with damages but did not question the
1. Spanish title, impending cases. authenticity of the agreement. Who is the rightful
owner of the property?
Note: However, Spanish titles are now
inadmissible and ineffective as proof of A: The spouses Ducat and Kiong. The Affidavit of
ownership in land registration proceedings Transfer of Real Property proved Ducat’s ownership
filed after Aug. 16, 1976. It is mere indicia of of the property. It stated that Ducat bought the
a claim of ownership that the holder has a subject property from Cecilio and Bernardo. The
claim of title over the property. heirs did not question the authenticity and due
execution of said document. It constitutes an
2. Tax declaration and tax payments. admission against interest made by Bernardo,
petitioners' predecessor-in-interest.
Note: While tax declarations are not
conclusive proof of ownership, they Bernardo's admission against his own interest is
constitute good indicia of possession in the binding on his heirs. The heirs' predecessor-in-
concept of owner and a claim of title over
interest recognized Ducat and Kiong as the legal
the subject property for no one in his right
owner of the lot in dispute.
mind would be paying taxes for a property
that is not in his actual or constructive
possession.(Charles L. Ong v. Republic of the Thus, there is no proof that the titling of the subject
Philippines, G.R. No. 175746, March 12, property was fraudulently obtained by Ducat and
2008 and Republic of the Philippines v. Kiong in their names. (Heirs of Bernardo Ulep v. Sps.
Teodoro P. Rizalvo, Jr. G.R. No. 172011, Cristobal Ducat and Flora Kiong, G.R. No. 159284,
March 7, 2011) Jan. 27, 2009)
Even if belatedly declared for taxation Q: What proofs are insufficient to establish private
purposes, it does not negate possession ownership or right over land?
especially if there is no other claimant of the
land. A:
1. Compromise agreement among parties to a
Mere failure of the owner of the land to pay land registration case where they have rights
the realty tax does not warrant a conclusion and interest over the land and allocated
that there was abandonment of his right to portions thereof to each of them.
the property.
Note: Assent of Director of Lands and Director of
3. Other kinds of proof. Forest Management to compromise agreement
did not and could not supply the absence of
E.g. Testimonial evidence (i.e. accretion is evidence of title required of the applicant.
on a land adjacent to a river).
2. Decision in an estate proceeding of a
Note: Any evidence that accretion was predecessor-in-interest of an applicant which
formed through human intervention involves a property over which the decedent
negates the claim. has no transmissible rights, and in other cases
488 CIVIL LAW TEAM

where issue of ownership was not definitely Q: After final adjudication in a land registration
passed upon . proceeding, Pepito and his family took possession
of the land subject of the registration proceedings.
3. Survey plan of an inalienable land. Don Ramon moved for their summary ouster from
the land. Rule on his motion.
Note: Such plan does not convert such land into
alienable land, much less private property. A: It should be denied. Persons who are not parties
to registration proceedings who took possession of
Q: After due hearing for registration, what will the the land after final adjudication of the same cannot
court do? be summarily ousted by a mere motion. The
remedy is to resort to the courts of justice and
A: If the court, after considering the evidence and institute a separate action for unlawful entry or
report of the LRA, finds that the applicant or the detainer or for reinvidicatory action, as the case
oppositor has sufficient title proper for registration, may be. Regardless of any title or lack of title of said
it shall render judgment confirming the title of the person, he cannot be ousted without giving him a
applicant, or the oppositor, to the land or portions day in court in a proper independent proceeding.
thereof, as the case may be. (Sec. 29, P.D. 1529)
Q: What does a decree of registration cover?
5. JUDGMENT AND DECREE
OF REGISTRATION A: Only claimed property or a portion thereof can
be adjudicated. A land registration court has no
Q: What must a judgment in land registration jurisdiction to adjudge a land to a person who has
proceedings contain? never asserted any right of ownership thereof.
A: When judgment is rendered in favor of the Q: May the court render a partial judgment in land
plaintiff, the court shall order the entry of a new registration proceedings?
certificate of title and the cancellation of the
original certificate and owner’s duplicate of the A: Partial judgment is allowed in a land registration
former registered owner. proceeding, where only a portion of the land,
subject of registration is contested, the court may
Q: What is decree of registration? render partial judgment provided that a subdivision
plan showing the contested land and uncontested
A: It is a document prepared in the prescribed form portions approved by the Director of Lands is
by the LRA Administrator, signed by him in the previously submitted to said court.
name of the court, embodying the final disposition
of the land by the court and such other data found Q: What is the effect of a decree of registration?
in the record, including the name and other
personal circumstances of the adjudicate, the A: The decree of registration binds the land, quiets
technical description of the property, liens and title, subject only to such exceptions or liens as may
encumbrances affecting it, and such other matters be provided by law.
as determined by the court in its judgment.
It is conclusive upon all persons including the
Q: In a registration case, the court rendered a national government and all branches thereof. And
decision granting Reyes’ application, hence the such conclusiveness does not cease to exist when
Director of Lands appealed. Reyes moved for the the title is transferred to a successor.
issuance of a decree of registration pending
appeal. May his motion be granted? Note: Title once registered cannot be impugned,
altered, changed, modified, enlarged or diminished,
A: No. Innocent purchasers may be misled into except in a direct proceeding permitted by law.
purchasing real properties upon reliance on a
judgment which may be reversed on appeal. A Q: Does the principle of res judicata apply to land
Torrens title issued on the basis of a judgment that registration proceedings?
is not final is a nullity as it violates the explicit
provisions of the LRA, which requires that a decree A: The principle of res judicata applies to all cases
shall be issued only after the decision adjudicating and proceedings, including land registration and
the title becomes final and executory. (Dir. of Lands cadastral proceedings.
v. Reyes, G.R. No. L-27594, Nov. 28, 1975)
Q: In 1950’s, the Government acquired a big landed
estate in Central Luzon from the registered owner
489
for subdivision into small farms and redistribution is cleansed anew with every transfer for value (De
of bonafide occupants. F was a former lessee of a Jesus v. City of Manila, G.R. No. L-26816, Feb. 28,
parcel of land, five hectares in area. After 1967; Laperal v. City of Manila, G.R. No. L-16991,
completion of the resurvey and subdivision, F Mar. 31, 1964; Penullar v. PNB, G.R. No. L-32762
applied to buy the said land in accordance with the Jan. 27, 1983)
guidelines of the implementing agency. Upon full
payment of the price in 1957, the corresponding Q: Suppose the government agency concerned
deed of absolute sale was executed in his favor and joined C in filing the said action against the
was registered, and in 1961, a new title was issued defendants, would that change the result of the
in his name. In 1963, F sold the said land to X; and litigation? Explain.
in 1965 X sold it to Y, new titles were successively
issued in the names of the said purchasers. A: Even if the government joins C, this will not alter
the outcome of the case so much because of
In 1977, C filed an action to annul the deeds of sale estoppel as an express provision in Sec. 45, Act 496
to F, X and Y and their titles, on the ground that he and Sec. 31, PD 1529 that a decree of registration
(C) had been in actual physical possession of the and the certificate of title issued in pursuance
land, and that the sale to F and the subsequent thereof “shall be conclusive upon and against all
sales should be set aside on the ground of fraud. persons, including the national government and all
Upon motion of defendants, the trial court branches thereof, whether mentioned by name in
dismissed the complaint, upholding their defenses the application or not.” (1990 Bar Question)
of their being innocent purchasers for value,
prescription and laches. Plaintiff appealed. Q: May the court reopen the judgment or decree
of registration?
Is the said appeal meritorious? Explain your answer
A: The court has no jurisdiction or authority to
A: The appeal is not meritorious. The trial court reopen the judgment or decree of registration, nor
ruled correctly in granting defendant's motion to impair the title or other interest of a purchaser
dismiss for the following reasons: holding a certificate for value and in good faith, or
1. While there is the possibility that F, a his heirs and assigns, without his or their written
former lessee of the land was aware of the consent.
fact that C was the bona fide occupant
thereof and for this reason his transfer ENTRY OF DECREE OF REGISTRATION
certificate of title may be vulnerable, the
transfer of the same land and the issuance Q: What are the effects of the entry of the decree
of new TCTs to X and Y who are innocent of registration in the National Land Titles and
purchasers for value render the latter's Deeds Registration Authority (NALDTRA)?
titles indefeasible. A person dealing with
registered land may safely rely on the A:
correctness of the certificate of title and 1. This serves as the reckoning date to determine
the law will not in any way oblige him to the 1-year period from which one can impugn
go behind the certificate to determine the the validity of the registration.
condition of the property in search for any 2. 1 year after the date of entry, it becomes
hidden defect or inchoate right which may incontrovertible, and amendments will not be
later invalidate or diminish the right to the allowed except clerical errors. It is deemed
land. This is the mirror principle of the conclusive as to the whole world.
Torrens System of land registration. 3. Puts an end to litigation.
2. The action to annul the sale was instituted WRIT OF POSSESSION

in 1977 or more than (10) years from the
date of execution thereof in 1957, hence, Q: In what instances may a writ of possession
it has long prescribed. issue?
Under Sec. 45, Act 496, “the entry of a certificate of A:

title shall be regarded as an agreement running with 1. In a land registration proceeding, which is a
the land, and binding upon the applicant and all his proceeding in rem;
successors in title that the land shall be and always 2. In an extrajudicial foreclosure of a realty
remain registered land. A title under Act 496 is mortgage;
indefeasible and to preserve that character, the title 3. In a judicial foreclosure of mortgage; and
490 CIVIL LAW TEAM

4. In execution sales was issued. Vencelao, who occupies the land,

contends that he was not the defeated oppositor
Q: How may possession of property be obtained? in the case, hence a writ of possession may not be
issued against him. May a writ of possession be
A: Possession of the property may be obtained by issued against Vencelao?
filing an ex parte motion with the RTC court of the
province or place where the property is situated. A: Yes. In a registration case, the judgment
Upon filing of the motion and the required bond, it confirming the title of the applicant and ordering
becomes a ministerial duty of the court to order the the registration in his name necessarily carried with
issuance of a writ of possession in favor of the it the delivery of possession which is an inherent
purchaser. After the expiration of the one-year element of the right of ownership.
period without redemption being effected by the
property owner, the right of the purchaser to the A writ of possession may be issued not only against
possession of the foreclosed property becomes the person who has been defeated in a registration
absolute. (PNB v. Sanao Marketing Corporation, case but also against anyone unlawfully and
G.R. No. 153951, July 29, 2005) adversely occupying the land or any portion thereof
during the land registration proceedings up to the
Q: PNCB purchased a parcel of land in a issuance of the final decree. (Vencelao v. Yano, G.R.
foreclosure sale and applied for a writ of No. 25660, Feb. 20, 1993)
possession after the lapse of more than 1 year. On
appeal, however, it was held that the writ of Q: If the court granted the registration, must the
possession cannot be issued because the applicant move for the issuance of a writ of
foreclosure sale, upon which it is based, was possession in case he is deprived of possession
infirm. Is said ruling correct? over the land subject of the registration
proceedings?
A: No. Any question regarding the regularity and
validity of the sale, as well as the consequent A: Yes, if it is against:
cancellation of the writ, is to be determined in a 1. the person who has been defeated in a
subsequent proceeding as outlined in Sec. 8, Act registration case; and
3135, as amended by Act 4118. Such question is not 2. any person adversely occupying the land
to be raised as a justification for opposing the or any portion thereof during the land
issuance of the writ of possession, since, under the registration proceedings up to the
Act, the proceeding is ex parte. issuance of the final decree.
As the purchaser of the properties in the extra- No, if it is against persons who took possession of
judicial foreclosure sale, the PNCB is entitled to a the land after final adjudication of the same in a
writ of possession therefore. The basis of this right registration proceeding. In which case, the remedy
to possession is the purchaser’s ownership of the is file a separate action for:
property. Mere filing of an ex parte motion for the
issuance of the writ of possession would suffice, 1. unlawful entry;
and no bond is required. (Sulit v. CA, G.R. No. 2. unlawful detainer; or
119247, Feb. 17, 1997) (Agcaoili, Registration 3. reinvindicatory action, as the case may
Decree and Related Laws, p. 508-509) be, and only after a favorable judgment
can the prevailing party secure a writ of
Q: Against whom may a writ of possession be possession. (Bernas v. Nuevo, G.R. No. L-
issued? 58438, Jan. 31, 1984)
A: In a registration case, a writ of possession may Q: Does petition for the issuance of a writ of
be issued against: possession prescribe?
1. The person who has been defeated in a
registration case; and A: GR: No.
2. Any person adversely occupying the land
or any portion thereof during the land XPN: If a party has once made use of the
registration proceedings up to the benefit of a writ of possession, he cannot again
issuance of the final decree. ask for it, if afterwards he loses possession of
the property obtained by virtue of the original
Q: Yano filed an application for registration which writ.
was granted. Consequently, a writ of possession
491
Q: Does a writ of possession issue in a for that purpose. incident in said action.
reconstitution case?
e.g. Torrens title is questioned
A: No. reconstitution does not confirm or in the ordinary civil action for
adjudicate ownership over the property covered by recovery of possession
the reconstituted title as in original land
registration proceedings where, in the latter, a writ Q: Valentin’s homestead application was
of possession may be issued to place the applicant- approved. After 19 years of possession, his
owner in possession. occupation was interrupted when Arcidio forcibly
entered the land. He filed an action for recovery of
6. DECREE OF CONFIRMATION AND REGISTRATION possession which was granted.
Q: What is decree of confirmation and In his appeal, may Arcidio seek the nullity of
registration? Valentin’s title, invoking as defense the ruling of
the Director of Lands in an administrative case
A: It is issued by LRA after finality of judgment, and that Valentin has never resided in said land and
contains technical description of land. It is subject declared that the homestead patent was
only to an appeal. improperly issued to him?
It is conclusive evidence of the ownership of the A: No, a collateral attack is not allowed. It was
land referred to therein and becomes indefeasible erroneous for Arcidio to question the Torrens OCT
and incontrovertible after one year from the issued to Valentin in an ordinary civil action for
issuance of the decree. recovery of possession filed by the registered
owner – Valentin – of the said lot, by invoking as
Q: Differentiate decree of confirmation and affirmative defense in his answer the Order of the
registration from decree of registration. Bureau of Lands issued pursuant to the
investigatory power of the Director of Lands under
A: Decree of registration is issued pursuant to the Section 91 of Public Land Law (CA No. 141 as
Property Registration Decree, where there already amended). Such a defense partakes of the nature of
exists a title which is confirmed by the court. a collateral attack against a certificate of title
brought under the operation of the Torrens system
Decree of confirmation and registration of title is of registration pursuant to Sec. 122, Land
issued pursuant to the Public Land Act, where the Registration Act, now Sec. 103, PD 1259. (Ybanez v.
presumption always is that the land applied for IAC, G.R. No. 68291, Mar. 6, 1991)
pertains to the State, and that the occupants and
possessors only claim an interest in the same by Q: In a case for recovery of possession based on
virtue of their imperfect title or continuous, open, ownership, is a third-party complaint to nullify the
and notorious possession. (Limcoma Multi-Purpose title of the third-party defendant considered a
Cooperative v. Republic, G.R. No. 167652, July 10, direct attack on the title?
2007)
A: If the object of the third-party complaint is to
Q: What is the doctrine of non-collateral attack of nullify the title of the third-party defendant, the
a decree or title? third-party complaint constitutes a direct-attack on
the title because the same is in the nature of an
A: A decree of registration and registered title original complaint for cancellation of title.
cannot be impugned, enlarged, altered, modified,
or diminished either in collateral or direct Q: If an attack is made thru a counterclaim, should
proceeding, after the lapse of one year from the it be disregarded for being a collateral attack?
date of its entry.
A: No. A counterclaim is also considered an original
Q: Differentiate direct from collateral attack. complaint, and as such, the attack on the title is
direct and not collateral.
A:
DIRECT ATTACK COLLATERAL ATTACK C. REMEDIES IN.REGISTRATION PROCEEDINGS
The issues are It is made when, in another
raised in a direct action to obtain a different Q: What are the remedies of an aggrieved party in
proceeding in an relief, an attack on the registration proceedings?
action instituted judgment is made as an
492 CIVIL LAW TEAM

A: RADAR-CCAN-QP Note: Even if an order for the issuance of decree has

1. Relief from judgment been issued but no decree was actually issued, remedy
2. Appeal is still available.
3. Action for Damages
4. Action for Compensation from the APPEAL
Assurance Fund
5. Action for Reconveyance Q: In land registration cases, within what period
6. Cancellation of suits may an appeal be filed?
7. Criminal Action
8. Annulment of judgment A: It must be filed within 15 days from receipt of
9. New trial the judgment or final order appealed from.
10. Quieting of title
11. Petition for Review (of a Decree) Q: Which courts have appellate jurisdiction over
land registration cases?
NEW TRIAL
A: Under PD 1529, judgments and orders in land
Q: What are the grounds for New Trial? registration cases are appealable to the CA or to the
SC in the same manner as ordinary actions.
A: Sec 1, Rule 37 (FAN)
1. Fraud, accident, mistake or excusable Q: Who may file an appeal in land registration
negligence which ordinary prudence cases?
could not have guarded against.
2. Award of excessive damages, or A: Only those who participated in the proceedings
insufficiency of the evidence to justify the can interpose an appeal.
decision
3. Newly discovered evidence Q: In land registration cases, may a party validly
move for execution pending appeal?
Q: When is the period of filing?
A: No. A motion for execution pending appeal is not
A: Within the 15 day period for perfecting an applicable to land registration proceedings. The
appeal reason is to protect innocent purchasers.
Relief from Judgment PETITION FOR REVIEW
Q: What is the nature of the remedy? Q: What are the requisites of a petition for review
of the decree?
A: It is a subsidiary remedy, i.e may be availed only
when the judgment has become final and a new A:
trial is not available. 1. Petitioner has a real right;
2. He has been deprived thereof;
Q: What are the grounds in order to avail the 3. The deprivation is through fraud
remedy Relief from judgment? (actual/extrinsic);
4. Petition is filed within 1 year from issuance of
A: When a judgment is entered against a party the decree; and
through fraud, accident, mistake or excusable 5. The property has not yet passed to an
negligence, such party may file a petition in the innocent purchaser for value.
court that rendered such judgment praying that the
said judgment be set aside. Q: Who may file petition for review?
Q: When is the period for filing it? A: Any person, including the government and the
branches thereof, deprived of land or of any estate
A: It must be filed within 60 days after the or interest therein. It is not only the aggrieved party
petitioner learns of the judgment, order, or in ordinary land registration proceedings or in
proceeding and not more than 6 months after such confirmation of imperfect title, but also an
judgment or order was entered or such proceeding aggrieved party in a cadastral proceedings.
was taken.
Q: When to file the petition?
493
A: Section 32 of the Decree provides that a petition Q: What are the basic allegations to support an
for review must be filed not later than one year action for reconveyance?
from and after the date of the entry of such decree
of registration. The one-year period within which a A: All that must be alleged in the complaint are: (1)
petition to re-open and review the decree of that the plaintiff was the owner of the land; and (2)
registration refers to the decree of registration that the defendant had illegally dispossessed him of
which is prepared and issued by the Land the same.
Registration Authority.
Q: What are the grounds and their corresponding
Q: What kind of fraud would justify the review of a period for filing an action for reconveyance?
decree of registration?
A:
A: The fraud must be extrinsic. It is extrinsic when it GROUNDS PRESCRIPTIVE PERIOD
is employed to deprive a party of his day in court, 4 years from the discovery of the
thereby preventing him from asserting his right to fraud (deemed to have taken
the property registered in the name of the place from the issuance of the
applicant. original certificate of title)
Note: The fraud that would justify review of decree of Fraud Note: The State has an
registration must be actual. There must have been an imprescriptible right to cause the
intentional concealment or omission of fact required reversion of a piece of property
by law to be stated in the application or a willful belonging to the public domain if
statement of a claim against the truth, either of which title has been acquired through
is calculated to deceive or deprive another of his legal fraudulent means.
rights. 10 years from the date of the
issuance of the OCT or TCT.
RECONVEYANCE It does not apply where the
Implied or
person enforcing the trust is in
Constructive
Q: What is action for reconveyance? actual possession of the property
Trust
because he is in effect seeking to
A: It is an action seeking to transfer or reconvey the quiet title to the same which is
land from the registered owner to the rightful imprescriptible.
owner. It is a legal and equitable remedy granted to Express Trust Not barred by prescription
the rightful owner of land which has been Void Contract Imprescriptible
wrongfully or erroneously registered in the name of
another for the purposes of compelling the latter to Q: In 1987, an Emancipation Patent OCT was
transfer or reconvey the land to him. (Spouses issued in Remy’s favor. In 1998, Madarieta filed a
Exequiel and Eusebia Lopez v. Spouses Eduardo and Complaint for Annulment and Cancellation of the
Marcelina Lopez, G.R. No. 161925, Nov. 25, 2009) OCT against Remy before the DARAB, alleging that
the Department of Agrarian Reform (DAR)
Q: What is the purpose of an action for mistakenly included her husband’s lot as part of
reconveyance? Luspo’s property where Remy’s house was
constructed and that it was only on 1997 that she
A: An action for reconveyance does not aim or discovered such mistake. Is Madarieta’s action
purport to re-open the registration proceedings and barred by prescription?
set aside the decree of registration but only to
show that the person who secured the registration A: Yes. Considering that there appears to be a
of the questioned property is not the real owner mistake in the issuance of the subject emancipation
thereof. The action, while respecting the decree as patent, the registration of the title to the subject
incontrovertible, seeks to transfer or reconvey the property in Remy’s name is likewise erroneous, and
land from the registered owner to the rightful consequently, Remy holds the property as a mere
owner. trustee. An action for reconveyance based on an
implied or constructive trust prescribes in 10 years
This action may be filed even after the lapse of 1 from the issuance of the Torrens title over the
year from entry of the decree of registration as long property. The title over the subject land was
as the property has not been transferred or registered in Remy’s name in 1987 while Madarieta
conveyed to an innocent purchaser for value. filed the complaint to recover the subject lot only in
1998. More than 11 years had lapsed before
494 CIVIL LAW TEAM

Madarieta instituted the action for annulment of

the patent OCT, which in essence is an action for Given the circumstances, can the action of the
reconveyance – the remedy of the rightful owner of Solicitor General and the case for reconveyance
the erroneously registered property. It is thus filed by Percival possibly prosper?
barred by prescription. (Rementizo v. Heirs of Vda.
De Madarieta, G.R. No. 170318, Jan. 15, 2009) A: If fraud be discovered in the application which led
to the issuance of the patent and Certificate of Title,
Note: In an action for reconveyance, the decree of this Title becomes ipso facto null and void. Thus, in a
registration is respected as incontrovertible but what case where a person who obtained a free patent,
is sought instead is the transfer of the property knowingly made a false statement of material and
wrongfully or erroneously registered in another’s essential facts in his application for the same, by
name to its rightful owner or to one with a better stating therein that the lot in question was part of
right. The person in whose name the land is registered the public domain not occupied or claimed by any
holds it as a mere trustee. other person, his title becomes ipso facto canceled
and consequently rendered null and void.
Q: If the ground relied upon for an action for
reconveyance is fraud, what is the period for filing It is to the public interest that one who succeeds In
the same? fraudulently acquiring title to public land should not
be allowed to benefit therefrom and the State,
A: If ground relied upon is fraud, action may be filed through the Solicitor General, may file the
within 4 years from discovery thereof. Discovery is corresponding action for annulment of the patent
deemed to have taken place when said instrument and the reversion of the land involved to the public
was registered. It is because registration constitutes domain (Dinero v. Director of Lands; Kayaban v.
constructive notice to the whole world. Republic L-33307, Aug. 20, 1973; Director of Lands
vs. Animas, L-37682, Mar. 29, 1974).
Q: On September 10, 1965, Melvin applied for a
free patent covering two lots - Lot A and Lot B - This action does not prescribe.
situated in Santiago, Isabela. Upon certification by
the Public Land Inspector that Melvin had been in With respect to Percival's action for reconveyance, it
actual, continuous, open, notorious, exclusive and would have prescribed, having been filed more than
adverse possession of the lots since 1925, the ten (10) years after registration and issuance of an
Director of Land approved Melvin's application on OCT in the name of Melvin, were it not for the
04 June 1967. On December 26, 1967, Original inherent infirmity of the latter's title. Under the
Certificate of Title (OCT) No. P-2277 was issued in facts, the statute of limitations will not apply to
the name of Melvln. Percival because Melvin knew that a part of the land
covered by his title actually belonged to Percival. So,
On September 7, 1971, Percival filed a protest instead of nullifying in toto the title of Melvin, the
alleging that Lot B which he had been occupying court, in the exercise of equity and jurisdiction, may
and cultivating since 1947 was included in the Free grant prayer for the reconveyance of Lot B to
Patent issued in the name of Melvin. The Director Percival who has actually possessed the land under a
of Lands ordered the investigation of Percival's claim of ownership since 1947. After all, if Melvin's
protest. The Special Investigator who conducted title is declared void ab initio and the land is
the investigation found that Percival had been in reverted to the public domain, Percival would just
actual cultivation of Lot B since 1947. the same be entitled to preference right to acquire
the land from the government. Besides, well settled
On November 28, 1986, the Solicitor General filed is the rule that once public land has been in open,
in behalf of the Republic of the Philippines a continuous, exclusive and notorious possession
complaint for cancellation of the free patent and under a bonafide claim of acquisition of ownership
the OCT issued in the name of Melvin and the for the period prescribed by Sec. 48, Public Land Act,
reversion of the land to public domain on the the same ipso jure ceases to be public and in
ground of fraud and misrepresentation in obtaining contemplation of law acquired the character of
the free patent. On the same date, Percival sued private land. Thus, reconveyance of the land from
Martin for the reconveyance of Lot B. Melvin to Percival would be the better procedure.
(Vital v. Anore, G.R. No. L-4136, Feb. 29, 1952; Pena,
Melvin filed his answers interposing the sole Land Titles and Deeds, p. 427, 1982 ed) (1997 Bar
defense in both cases that the Certificate of Title Question)
issued in his name became incontrovertible and
indefeasible upon the lapse of one year from the
issuance of the free patent.
495
Q: Rommel was issued a certificate of title over a necessary to record the lis pendens to protect her
parcel of land in Quezon City. One year later, interest because if she did not do it, there is a
Rachelle, the legitimate owner of the land, possibility that the land will fall into the hands of an
discovered the fraudulent registration obtained by innocent purchaser for value and in that event, the
Rommel. She filed a complaint against Rommel for court loses control over the land making any
reconveyance and caused the annotation of a favorable judgment thereon moot and academic.
notice of lis pendens on the certificate of title For these reasons, the notice of lis pendens may not
issued to Rommel. Rommel now invokes the be cancelled. (1995 Bar Question)
indefeasibility of his title considering that one year
has already elapsed from its issuance. He also Q: Juan, et. al. seek reconveyance of the property,
seeks the cancellation of the notice of lis pendens. imputing fraud to Ines, without adducing
evidence, saying that she used a forged affidavit to
Will Rachelle’s suit for reconveyance prosper? obtain title over the property despite full
Explain. knowledge that she owned only 1/5 portion
thereof. Note that when Ines applied for a free
A: Yes, Rachelle’s suit will prosper because all the patent over the property, Juan, et. al. filed their
elements of an action for reconveyance are claims, but when the Bureau of Lands denied their
present, namely: claims, they did not contest such denial any
1. Rachelle is claiming dominical rights over further. Should the reconveyance be granted?
the property;
2. Rommel procured his title to the land by A: No. It appears that they were notified of Ines’
fraud; application for free patent and were duly afforded
3. The action was brought within the the opportunity to object to the registration and to
statutory period of four years from substantiate their claims, which they failed to do
discovery of the fraud and not later than and they never contested the order of the Bureau
10 years from the date of registration of of Lands disregarding their claims. This could only
Rommel’s title; and mean that they either agreed with the order or
4. Title to the land has not yet passed into decided to abandon their claims.
the hands of an innocent purchaser for
value. Also, they failed to prove fraud in the execution of
the affidavit used by Ines to obtain title to the
Rommel can invoke the indefeasibility of his title if disputed property. No evidence was adduced by
Rachelle had filed a petition to re-open or review them to substantiate their allegation that their
the decree of registration. But Rachelle instead filed signatures therein were forged. It is not for private
an ordinary action in personam for reconveyance. respondents to deny forgery. The burden of proof
In the latter action, indefeasibility is not a valid that the affidavit of waiver is indeed spurious
defense, because in filing such action, Rachelle is rests on petitioners. Yet, even as they insist on
not seeking to nullify nor to impugn the forgery, they never really took serious efforts in
indefeasibility of Rommel’s title. She is only asking establishing such allegation by preponderant
the court to compel Rommel to reconvey the title evidence. Mere allegations of fraud are not
to her as the legitimate owner of the land. enough. Intentional acts to deceive and deprive
another of his right or in some manner injure him,
Q: May the court cancel the notice of lis pendens must be specifically alleged and proved. (Brusas v.
even before final judgment is rendered? Explain. CA, G. R. No. 126875, Aug. 26, 1999)
A: A notice of lis pendens may be cancelled even DAMAGES

before final judgment upon proper showing that
the notice is for the purpose of molesting or Q: When may an action for damages be resorted
harassing the adverse party or that the notice of lis to in land registration cases?
pendens is not necessary to protect the right of the
party who cause it to be registered. (Sec. 77, PD A: After one year from date of the decree and if
1529) reconveyance is not possible because the property
has passed to an innocent purchaser for value and
In this case, it is given that Rachelle is the legitimate in good faith, the aggrieved party aggrieved party
owner of the land in question. It can be said, may bring an ordinary action for damages only
therefore, that when she filed her notice of lis against the applicant or persons responsible for the
pendens her purpose was to protect her interest in fraud or were instrumental in depriving him of the
the land and not just to molest Rommel. It is property.
496 CIVIL LAW TEAM

A: As a general rule, the earlier in date must prevail.

Q: When will an action for damages in land However, this principle cannot apply if it is
registration cases prescribe? established that the earlier title was procured
through fraud or is otherwise jurisdictionally
A: An ordinary action for damages prescribes in ten flawed. (Republic v. CA and Guido, et. al., G.R. No.
(10) years after the issuance of the Torrens title 84966, Nov. 21, 1991). The rule is valid only absent
over the property. any anomaly or irregularity tainting the process of
registration. Where the inclusion of land in the
CANCELLATION SUIT certificate of title of prior date is a mistake, the
mistake may be rectified by holding the latter of the
Q: What is cancellation suit? two certificates to be conclusive. (Legarda v.
Saleeby, G.R. No. 8936, Oct. 2, 1915) Since the
A: It is an action for cancellation of title brought by earlier title was issued when the disputed land was
a private individual, alleging ownership as well as still a non-registrable property, the same may be
the defendant’s fraud or mistake, as the case may challenged through a cancellation suit and may be
be, in successfully obtaining title over a disputed declared as null and void. Pedro’s title must prevail.
land claimed by the plaintiff.
QUIETING OF TITLE
Q: When is resort to a cancellation suit proper?
Q: What is action for quieting of title?
A:
1. When two certificates of title are issued to A: It is an action that is brought to remove clouds
different persons covering the same parcel of on the title to real property or any interest therein,
land in whole or in part; by reason of any instrument, record, claim,
encumbrance, or proceeding which is apparently
2. When certificate of title is issued covering a valid or effective but is in truth and in fact invalid,
non-registrable property; or ineffective, voidable or unenforceable, and may be
prejudicial to said title.
3. Other causes such as when the certificate of
title is issued pursuant to a judgment that is Quieting of title is a common law remedy for the
not final or when it is issued to a person who removal of any cloud upon, doubt, or uncertainty
did not claim and applied for the registration affecting title to real property. Whenever there is a
of the land covered. cloud on title to real property or any interest in real
property by reason of any instrument, record,
Q: What are the rules as regards cancellation of claim, encumbrance, or proceeding that is
certificates of title belonging to different persons apparently valid or effective, but is, in truth and in
over the same land? fact, invalid, ineffective, voidable, or unenforceable,
and may be prejudicial to said title, an action may
A: Where two certificates are issued to different be brought to remove such cloud or to quiet the
persons covering the same land, the title earlier in title. In such action, the competent court is tasked
date must prevail. The latter title should be to determine the respective rights of the
declared null and void and ordered cancelled. complainant and the other claimants, not only to
place things in their proper places, and make the
Q: What is meant by prior est temporae, prior est claimant, who has no rights to said immovable,
in jura? respect and not disturb the one so entitled, but also
for the benefit of both, so that whoever has the
A: It is a principle which means he who is first in right will see every cloud of doubt over the
time is preferred in right. property dissipated, and he can thereafter
fearlessly introduce any desired improvements, as
Q: Pablo occupied a parcel of land since 1800. In well as use, and even abuse the property. (Phil-Ville
1820, he was issued a certificate of title over said Development and Housing Corporation v. Maximo
land. In 1830, however, the land was reclassified Bonifacio, et al., G.R. No. 167391, June 8, 2011)
as alienable and disposable, as it was originally a
forest land. In 1850, Pedro was able to obtain a Q: Who may file an action to quiet title?
certificate of title over the same land. Upon
learning of such, Pablo sought to have Pedro’s title A:
declared null and void. Decide. 1. Registered owner;
497
2. A person who has an equitable right or interest original form and condition, under the custody of
in the property; or Register of Deeds.
3. The State.
Q: What is the purpose of reconstitution of title?
Q: What are the 2 requisites in order that an
action for quieting of title may prosper? A: To have the same reproduced, after proper
proceedings, in the same form they were when the
A: loss or destruction occurred.
1. The plaintiff or complainant has a legal or
equitable title or interest in the real property The reconstitution or reconstruction of a certificate
subject of the action; of title literally denoted restoration of the
2. The deed, claim, encumbrance or proceeding instrument which is supposed to have been lost or
claimed to be casting cloud on his title must be destroyed in its original form and condition
shown to be in fact invalid or inoperative
despite prima facie appearance of validity or Q: Does reconstitution determine ownership of
legal efficacy. (Phil-Ville Development and land covered by a lost or destroyed certificate of
Housing Corporation v. Maximo Bonifacio, et title?
al., G.R. No. 167391, June 8, 2011)
A: A reconstituted title, by itself, does not
Criminal Action determine or resolve the ownership of the land
covered by the lost or destroyed title. The
Q: May a person who obtains registration through reconstitution of a title is simply the re-issuance of
fraud be held criminally liable? a lost duplicate certificate of title in its original form
and condition. It does not determine or resolve the
A: The State may criminally prosecute for perjury ownership of the land covered by the lost or
the party who obtains registration through fraud, destroyed title. A reconstituted title, like the
such as by stating false assertions in the application original certificate of title, by itself does not vest
for registration, sworn answer required of ownership of the land or estate covered thereby.
applicants in cadastral proceedings, or application (Alonso, et. al. v. Cebu Country Club Inc., G.R. No.
for public land and patent. 130876, Dec. 5, 2003)
REMEDY IN CASE OF LOSS OR Q: Where the title to the land was lost, does it
DESRUCTION OF CERTIFICATE OF TITLE: mean that the land ceased to be registered land?
Q: What is the remedy in case a person lost his A: The fact that the title to the land was lost does
certificate of title? not mean that the land ceased to be a registered
land before the reconstitution of its title.
A: It depends.
1. If what is lost is the OCT or TCT – Q: May a writ of possession be issued in a petition
Reconstitution of certificate of title; for reconstitution?
2. If, however, it is the duplicate of the OCT
or TCT – Replacement of lost duplicate A: No, because, reconstitution does not adjudicate
certificate of title. ownership over the property. A writ of possession is
issued to place the applicant-owner in possession.
RECONSTITUTION OF CERTIFICATE OF TITLE
Q: What must be shown before the issuance of an
Q: What is the remedy in case a certificate of title order for reconstitution?
is lost or destroyed?
A:
A: Remedy is reconstitution of lost or destroyed (a) that the certificate of title had been lost or
certificate of title in the office of Register of Deeds destroyed;
in accordance with R.A. 26. (b) that the documents presented by petitioner
are sufficient and proper to warrant
Q: What is reconstitution of certificate of title? reconstitution of the lost or destroyed
certificate of title;
A: The restoration of the instrument which is (c) that the petitioner is the registered owner of
supposed to have been lost or destroyed in its the property or had an interest therein;
498 CIVIL LAW TEAM

(d) that the certificate of title was in force at the For OCT (in the following order):
time it was lost or destroyed; and 1. Owner’s duplicate of the certificate of
(e) that the description, area and boundaries of title
the property are substantially the same as 2. Co-owner’s, mortgagee’s or lessee’s
those contained in the lost or destroyed duplicate of said certificate
certificate of title. (Republic of the Philippines 3. Certified copy of such certificate,
v. Apolinaria Catarroja, et al., G.R. No. 171774, previously issued by the Register of
Feb. 12, 2010) Deeds
4. Authenticated copy of the decree of
Q: What are the jurisdictional requirements in registration or patent, as the case may
petitions for reconstitution of title? be, which was the basis of the
certificate of title
A: Notice thereof shall be: 5. Deed or mortgage, lease or
1. Published twice in successive issues of the encumbrance containing description of
Official Gazette; property covered by the certificate of
2. Posted on the main entrance of the title and on file with the Registry of
provincial building and of the municipal Deeds, or an authenticated copy
building of the municipality or city, where thereof
the land is situated; and 6. Any other document which, in the
3. Sent by registered mail to every person judgment of the court, is sufficient and
named in said notice proper basis for reconstitution
Note: The above requirements are mandatory and For TCT (in the following order):
jurisdictional. 1. Owner’s duplicate of the certificate of
title
Q: What are the kinds of reconstitution of title? 2. Co-owner’s, mortgagee’s or lessee’s
duplicate of said certificate
A: 3. Certified copy of such certificate,
1. Judicial – partakes the nature of a land previously issued by the Register of
registration proceeding in rem. The registered Deeds
owners, assigns, or any person having an 4. Deed of transfer of other document
interest in the property may file a petition for containing description of property
that purpose with RTC where property is covered by the transfer certificate of
located. RD is not the proper party to file the title and on file with the Registry of
petition. Deeds, or an authenticated copy
2. Administrative – may be availed of only in case thereof
of: 5. Deed or mortgage, lease or
a. Substantial loss or destruction of the encumbrance containing description of
original land titles due to fire, flood, or property covered by the certificate of
other force majeure as determined by the title and on file with the Registry of
Administrator of the Land Registration Deeds, or an authenticated copy
Authority thereof
b. The number of certificates of title lost or 6. Any other document which, in the
damaged should be at least 10% of the judgment of the court, is sufficient and
total number in the possession of the proper basis for reconstitution
Office of the Register of Deeds
c. In no case shall the number of certificates Administrative reconstitution
of title lost or damaged be less than P500 1. Owner’s duplicate of the certificate of
d. Petitioner must have the duplicate copy title
of the certificate of title (R.A. 6732) 2. Co-owner’s, mortgagee’s or lessee’s
duplicate of said certificate
Note: The law provides for retroactive application
thereof to cases 15 years immediately preceding 1989. Q: Apolinario Catarroja et al., filed a petition for
reconstitution of title covering 2 lots in Cavite.
Q: From what sources may a certificate of title be Accordingly, the Catarrojas inherited these lands
reconstituted? from their parents. Allegedly, the LRA issued a
certification confirming that the land registration
A: court issued a Decree covering the lots. A copy of
Judicial reconstitution
499
the decree however was no longer available in the 4. A proceeding where the certificate of title was
records. It was also claimed that the owner’s not in fact lost or destroyed is null and void for
duplicate copy of the title had been lost while with lack of jurisdiction and the newly issued
their parents. If you were the judge, will you grant duplicate is null and void.
the petition for reconstitution of title?
AMENDMENT OR CORRECTION OF TITLE
A: In Republic v. Intermediate Appellate Court,
applied the principle of ejusdem generis in Q: What are the grounds for amendment or
interpreting Section 2(f) of R.A. 26. “Any other correction of certificate of title?
document” refers to reliable documents of the kind
described in the preceding enumerations. This A: When:
Court is not convinced that the above documents of 1. registered interests of any description,
the Catarrojas fall in the same class as those whether vested, contingent or inchoate
enumerated in paragraphs (a) to (e). None of them have terminated and ceased;
proves that a certificate of title had in fact been 2. new interests have arisen or been created
issued in the name of their parents. Accordingly, which do not appear upon the certificate;
the documents must come from official sources 3. any error, omission or mistake was made
which recognize the ownership of the owner and in entering a certificate or any
his predecessors-in-interest. None of the memorandum thereon or on any
documents presented in this case fit such duplicate certificate;
description. (Republic of the Philippines v. 4. the name of any person on the certificate
Apolinaria Catarroja, et al., G.R. No. 171774, Feb. has been changed;
12, 2010) 5. the registered owner has been married,
or registered as married, the marriage has
REPLACEMENT OF terminated and no right or interest of
LOST DUPLICATE CERTIFICATE OF TITLE heirs or creditors will thereby be affected;
6. a corporation, which owned registered
Q: If what is lost or destroyed is the duplicate title, land and has been dissolved, has not
is reconstitution the proper remedy? conveyed the same within 3 years after its
dissolution; or
A: No. When the duplicate title of the landowner is 7. there is a reasonable ground for the
lost, the proper petition is not reconstitution of amendment or alteration of title.
title, but one filed with the court for issuance of
new title in lieu of the lost copy. Q: What are the requisites for the amendment or
correction of title?
Q: Who are the persons entitled to a Duplicate
Certificate of Title? A: FREON-U
1. It must be Filed in the original case;
A: 2. By the Registered owner or a person in
1. Registered owner interest;
2. Each co-owner 3. On grounds Enumerated;
4. All parties must be Notified;
Q: What are the requirements for the replacement 5. There is Unanimity among them; and
of lost duplicate certificate of title? 6. Original decree must not be Opened.
A: CANCELLATION OF TITLE
1. Due notice under oath shall be sent by the
owner or by someone in his behalf to the Q: What are the grounds for cancellation of title?
Register of Deeds of the province or city where
the land lies as soon as the loss or theft is A:
discovered. 1. When title is void;
2. Petition for replacement should be filed with 2. Title is replaced by one issued under a
the RTC of the province or city where the land cadastral proceeding; or
lies. 3. When condition for its issuance has been
3. Notice to Solicitor General by petitioner is not violated by the registered owner.
imposed by law but it is the Register of Deeds
who should request for representation by the Q: Differentiate an action for reversion from an
Solicitor General. action for cancellation of title?
500 CIVIL LAW TEAM

instrumentalities, and its officials and agents in any

A: litigation, proceeding, investigation or matter
ACTION FOR ACTION FOR requiring the services of a lawyer. It shall represent
REVERSION CANCELLATION the government in all registration and related
Filed by the Initiated by a private proceedings and institute actions for the reversion
government through party usually in a case to the State of Lands of the public domain and
the Solicitor General where there are 2 titles improvements thereon and all lands held in
issued to different violation of the Constitution.
persons for the same lot
Q: When does reversion apply?
Q: In the remedy of action for cancellation of title,
does the land revert back to the mass of public A: Generally, reversion applies in all cases where
domain? lands of public domain and the improvements
thereon and all lands are held in violation of the
A: In this action, the land does not revert to the Constitution.
mass of the public domain, but is declared as
lawfully belonging to the party whose certificate of Q: What are the grounds for reversion of lands
covered by a patent?
title is held superior over the other.
A:
SURRENDER OF
1. Violation of Sec.s 118, 120, 121 and 122, Public
WITHHELD DUPLICATE CERTIFICATE OF TITLE
Land Act (e.g. alienation or sale of homestead
executed within the 5 year prohibitory period
Q: What are the grounds for surrender of withheld
2. When land patented and titled is not capable
duplicate certificate of title?
of registration
3. Failure of the grantee to comply with the
A:
conditions imposed by law to entitle him to a
1. When it is necessary to issue a new certificate
patent grant
of title pursuant to any involuntary instrument
4. When the area is an expanded area
which divests the title of the registered owner
5. When the land is acquired in violation of the
against his consent;
Constitution (e.g. land acquired by an alien
2. Where a voluntary instrument cannot be
may be reverted to the State)
registered by reason of the refusal or failure of
the holder to surrender the owner’s duplicate
Q: Luis filed a complaint for annulment of title
certificate of title; or
involving a foreshore land which was granted in
3. Where the owner’s duplicate certificate is not
Flores’ favor, alleging that his application therefor
presented for amendment or alteration
was granted by the government. Is Luis the real
pursuant to a court order.
party in interest with authority to file a complaint
for annulment of title of foreshore land?
REVERSION
A: No. In all actions for the reversion to the
Q: What is meant by reversion?
Government of lands of the public domain or
improvements thereon, the Republic of the
A: It is an action instituted by the government,
Philippines is the real party in interest. The action
through the Solicitor General, for cancellation of
shall be instituted by the Solicitor General or the
certificate of title and the consequential reversion
officer acting in his stead, in behalf of the Republic
of the land covered thereby to the State.
of the Philippines. Petitioners must first lodge their
complaint with the Bureau of Lands in order that an
Reversion connotes restoration of public land
administrative investigation may be conducted
fraudulently awarded or disposed of to the mass of
under Sec. 91, Public Land Act. (Manese v. Sps.
the public domain and may again be the subject of
Velasco, G.R. No. 164024, Jan. 29, 2009)
disposition in the manner prescribed by law to
qualified applicants.
Private persons have no right or interest over land
Q: Who initiates the action for reversion? considered public at the time the sales application
was filed. They have no personality to question the
A: An action for reversion is instituted by the validity of the title. (Vicente Cawis v. Hon. Antonio
Solicitor General. The Office of the Solicitor General Cerilles, G.R. No. 170207, April 19, 2010)
shall represent the government, its agencies, and
501
Note: Indefeasibility of title, prescription, laches and Q: What is the extent of authority of cadastral
estoppel do not bar reversion suits. courts?
D. CADASTRAL LAND REGISTRATION A: The cadastral court is not limited to merely

adjudication of ownership in favor of one or more
Q: What is cadastral registration? claimants. If there are no successful claimants, the
property is declared public land.
A: It is a proceeding in rem, initiated by the filing of
a petition for registration by the government, not Cadastral courts do not have the power to
by the persons claiming ownership of the land determine and adjudicate title to a lot already
subject thereof, and the latter are, on the pain of covered by homestead patent to a person other
losing their claim thereto, in effect compelled to go than a patentee.
to court to make known their claim or interest
therein, and to substantiate such claim or interest. Cadastral court possesses no authority to award
damages.
Q: What is the purpose of cadastral registration?
Note: A parcel of forestland is within the exclusive
A: Here, the government does not seek the jurisdiction of the Bureau of Forestry and beyond the
registration of land in its name. The objective of the power and jurisdiction of the cadastral court to
proceeding is the adjudication of title to the lands register under the Torrens system.
or lots involved in said proceeding. Furthermore, it
is to serve public interest by requiring that the titles V. SUBSEQUENT REGISTRATION
to the lands “be settled and adjudicated. (Sec 1 of
Act. No. 2259) Q: What is subsequent registration?
Q: Explain the process for the filing of Petition for A: It is where incidental matters after original
Registration. registration may be brought before the land
registration court by way of motion or petition filed
A: The Director of Lands, represented by the by the registered owner or a party in interest.
Solicitor General, shall institute original registration
proceedings by filing the necessary petition in the Q: What are the rules as to the necessity and
Regional Trial Court of the place where the land is effects of subsequent registration?
situated against the holders, claimants, possessors,
or occupants of such lands or any part thereof, A:
stating that public interest requires that the title to
such lands be settled and adjudicated and praying GR:
that such titles be settled and adjudicated.
1. as a contract between the parties thereto
Q: What is the procedure in cadastral registration? 2. as evidence of authority to the RD to
register such documents (Sec. 51, PD
A: 1529)
1. Cadastral survey
2. Filing of petition XPN: Wills that purport to convey or affect a
3. Publication of notice of initial hearing registered land.
4. Filing of answer
5. Hearing of case Note: It is only the act of registering the instrument in
6. Decision the RD of the province or the city where the land lies
7. Issuance of decree & certificate of title which is the operative act that conveys ownership or
affects the land insofar as third persons are concerned
Q: What should the petition contain? (Sec. 51, PD 1529).
The act of registration creates a constructive notice to

A: Petition shall contain:
the whole world of such voluntary or involuntary
a. Description of the lands
instrument or court writ or process. (Sec. 52, PD 1529)
b. Plan thereof
c. Such other data as to facilitate notice to Q: Is mere registration in the entry or day book of
all occupants and persons having claim or the deed of sale without the presentation of the
interest therein duplicate certificate enough to effect conveyance?
502 CIVIL LAW TEAM

A: It depends. 2. constitutes constructive notice of his

interest in the property to the whole
No, in case of voluntary transfer. world.
Reason: Such is the willful act of the owner. It is B. INVOLUNTARY DEALINGS

presumed that he is interested in registering the
instrument. Q: Must involuntary dealings be registered?
Yes, in case of involuntary transfer. A: Yes. It is the act of registration which creates a
constructive notice to the whole world of such
Reason: Such registration is contrary to the instrument or court writ or process and is the
interests of the owner. Mere entry is enough. operative act that conveys ownership or affects the
land insofar as third persons are concerned.
Note: The fact that no transfer certificate of title has as
yet been issued by the RD in the name of the vendor, ATTACHMENT
cannot detract from the rights of a purchaser for value
and in good faith entitled to the protection of law, Q: What is attachment?
once the deed of sale has been recorded in the day
book. What remains to be done lies not within his A: It is the legal process of seizing another’s
power to perform. property in accordance with a writ or judicial order
for the purpose of securing satisfaction of a
When a land subject of a sale is registered in the name
judgment yet to be rendered.
of the purchaser, registration takes effect retroactively
as of the date the deed was noted in the entry book by
the RD. Q: What is a writ of attachment?
VOLUNTARY DEALINGS A: It is used primarily to seize the debtor’s property

in order to secure the debt or claim of the creditor
Q: Must voluntary dealings be registered? in the event that a judgment is rendered.
A: No. Registration is not a requirement for validity Q: What is the effect of the non-recording of a writ
of the contract as between the parties. However, of attachment?
the act of registration shall be the operative act to
convey or affect the land insofar as third parties are A: An attachment levied on real state not duly
concerned. recorded in the Registry of Property is not an
encumbtance on the attached propety, nor can
Q: What are the requirements for registrability of such attachment unrecorded in the registry, serve
deeds and other voluntary acts of conveyance? as a ground for decreeing the annulment of the sale
of the property at the request of another creditor.
A: PIPE
1. Presentation of owner’s duplicate ADVERSE CLAIM
certificate whenever any duly executed
voluntary instrument is filed for Q: What is adverse claim?
registration;
2. Inclusion of one extra copy of any A: It is a notice to third persons that someone is
document of transfer or alienation of real claiming an interest on the property or has a better
property, to be furnished to the city or right than the registered owner thereof, and that
provincial assessor; any transaction regarding the disputed land is
3. Payment of prescribed registration fees subject to the outcome of the dispute.
and requisite doc stamps; and
4. Evidence of full payment of real estate tax Q: What is the purpose of adverse claim?
as may be due.
A: The purpose of annotating the adverse claim on
Q: What is the effect of registration of such the title of the disputed land is to apprise third
voluntary dealings? persons that there is a controversy over the
ownership of the land and to preserve and protect
A: It: the right of the adverse claimant during the
1. creates a lien that attaches to the pendency of the controversy.
property in favor of the mortgagee; and
503
Q: When is a claim of interest adverse?

Q: What is the effect of non-registration of an
A: adverse claim?
1. Claimant’s right or interest in registered land is
adverse to the registered owner; A: The effect of non-registration or invalid
2. Such right or interest arose subsequent to the registration of an adverse claim renders it
date of original registration; or ineffective for the purpose of protecting the
3. No other provision is made in the decree for claimant’s right or interest on the disputed land,
the registration of such right or claim. and could not thus prejudice any right that may
have arisen thereafter in favor of third parties.
Q: What are the formal requisites of an adverse
claim for purposes of registration? Q: What are the limitations to the registration of
an adverse claim?
A: WNR
1. Adverse claimant must state the following A: Yes.
in Writing: 1. No second adverse claim based on the
a. his alleged right or interest; same ground may be registered by the
b. how and under whom such alleged same claimant.
right of interest is acquired; 2. A mere money claim cannot be registered
c. description of the land in which the as an adverse claim.
right or interest is claimed; and
d. certificate of title number Q: May an adverse claim exist concurrently with a
subsequent annotation of a notice of lis pendens?
2. Such statement must be signed and
sworn to before a Notary public; and A: Yes, an adverse claim may exist concurrently
3. Claimant shall state his Residence or place with a subsequent annotation of a notice of lis
to which all notices may be served upon pendens. When an adverse claim exists
him. concurrently with a notice of lis pendens, the notice
of adverse claim may be validly cancelled after the
Q: How are adverse claims registered? registration of such notice, since the notice of lis
pendens also serves the purpose of the adverse
A: By filing a sworn statement with the Register of claim.
Deeds of the province where the property is
located, setting forth the basis of the claimed right Q: What is the lifespan of a registered adverse
together with other data pertinent thereto. claim?
Note: Entry of the adverse claim filed on the day book A: The adverse claim shall be effective for a period
is sufficient without the same being annotated at the of thirty (30) days from the date of registration and
back of the corresponding certificate of title (Director it may be cancelled.
of Lands v. Reyes, G.R. No. L-27594, Feb. 27, 1976)
Q: What is the effect of the expiration of the
Q: What claims may be registered as adverse period of effectivity of an adverse claim?
claims?
A: The expiration does not ipso facto terminate the
A: Any claim of part or interest in registered land claim. The cancellation of the adverse claim is still
that are adverse to the registered owner, arising necessary to render it ineffective, otherwise, the
subsequent to the date of the original registration inscription will remain annotated and shall continue
(Sec. 70, PD 1529) as a lien to the property.
Note: A mere money claim cannot be registered as an Q: May the RD cancel an adverse claim?
adverse claim.
A: The RD cannot, on its own, automatically cancel
Q: What is the effect of the registration of an the adverse claim.
adverse claim?
Note: Before the lapse of 30-day period, the claimant
A: It renders the adverse claim effective and any may file a sworn petition withdrawing his adverse
transaction regarding the disputed land shall be claim, or a petition for cancellation of adverse claim
subject to the outcome of the dispute. may be filed in the proper Regional Trial Court
504 CIVIL LAW TEAM

Q: When may a notice of lis pendens be made and

Q: What must an interested party do if he seeks when may it not be resorted to?
the cancellation of a registered adverse claim?
A:
A: The interested party must file with the proper NOTICE OF LIS PENDENS
court a petition for cancellation of adverse claim, When applicable When Inapplicable
and a hearing must also first be conducted. 1. Recover possession
of real estate 1. Attachments
NOTICE OF LIS PENDENS 2. Quieting of title 2. Levy or execution
3. Remove clouds upon 3. Proceedings on
Q: What is notice of lis pendens? title probate or wills
4. For Partition 4. Administration of
A: Lis pendens literally means a pending suit. The 5. Any other proceeding the real estate of
doctrine of lis pendens refers to the jurisdiction, of any kind in court deceased person
power or control which a court acquires over directly affecting title 5. Proceedings for the
property involved in a suit, pending the to the land or its use recovery of money
continuance of the action, and until final judgment. or occupation or the judgments
building thereon
It merely creates a contingency and not a lien. It
does not produce any right or interest which may
Q: What are the effects of the annotation of notice
be exercised over the property of another. It only
of lis pendens?
protects the applicant’s rights which will be
determined during trial.
A: The filing of notice of lis pendens has 2 effects:
Q: What is the basis for such notice? 1. It keeps the subject matter of litigation
within the power of the court until the
A: Such announcement is founded upon public entry of the final judgment to prevent the
defeat of the final judgment by successive
policy and necessity, the purpose of which is to
keep the properties in litigation within the power of alienation; and
the court until the litigation is terminated and to
2. It binds a purchaser, bona fide or not, of
prevent the defeat of the judgment or decree by
the land subject of the litigation to the
subsequent alienation. (Isabelita Cunanan et al., v.
judgment or decree that the court will
Jumping Jap Trading Corporation et al., G.R. No.
173834, April 24, 2009) promulgate subsequently.
Q: What are the purposes of a notice of lis Q: What statutory liens affecting title are not
barred even though not noted in the title?
pendens?
A: LUPD
A: To:
1. Liens, claims or rights arising or existing
1. protect the rights of the party causing the
under the laws and the Constitution, not
registration of the lis pendens; and
required by law to appear of record in the
2. advise third persons who purchase or
contract on the subject property that they RD;
do so at their peril and subject to the
result of the pending litigation. 2. Unpaid real estate taxes levied and
assessed within two (2) years immediately
Note: It is an announcement to the whole world that a preceding the acquisition of any right
particular real property is in litigation, serving as a over the land by an innocent purchaser
warning that one who acquires an interest over said for value without prejudice to right of the
property does so at his own risk, or that he gambles on government to collect taxes payable
the result of the litigation over the said property. The before that period from the delinquent
filing of a notice of lis pendens charges all strangers taxpayer alone;
with a notice of the particular litigation referred to
therein and, therefore, any right they may thereafter 3. Public highway or private way established
acquire on the property is subject to the eventuality of or recognized by law or any government
the suit. (Isabelita Cunanan et al., v. Jumping Jap irrigation canal or lateral thereof; and
Trading Corporation et al., G.R. No. 173834, April 24,
2009) 4. Any Disposition of the property or
limitation on the use thereof by virtue of
505
laws or regulations on agrarian reform VI. NON-REGISTRABLE PROPERTIES

(Sec. 44, PD 1529).
Q: What are non-registrable lands?
Q: When may a notice of lis pendens be cancelled?
A: These are properties of public dominion which,
A: A notice of lis pendens may be cancelled in the under existing legislation, are not the subject of
following cases before final judgment upon order of private ownership and are reserved for public
the court: MEND-PC purposes.
1. When it is shown that the notice is for the
purpose of Molesting the adverse party; Q: What is the reason behind their non-
2. Where the Evidence so far presented by registrability?
the plaintiff does not bear out the main
allegations of the complaint; A: They are intended for public use, public service
3. When it is shown that it is Not necessary or development of the national wealth. They are
to protect the right of the party who outside the commerce of men and, therefore, not
caused the registration thereof; subject to private appropriation.
4. Where the continuances of the trial are
unnecessarily Delaying the determination Q: Which lands are non-registrable?
of the case to the prejudice of the
defendant; A:
5. Upon verified Petition of the party who 1. Property of public domain or those intended
caused the registration thereof; or for public use, public service or development
6. It is deemed Cancelled after final of the national wealth.
judgment in favor of defendant, or other 2. Forest or timber lands
disposition of the action, such as to 3. Water sheds
terminate all rights of the plaintiff to the 4. Mangrove swamps
property involved. 5. Mineral lands
6. Parks and plazas
Q: May a notice of lis pendens be cancelled 7. Military or naval reservations
despite the pendency of the case? 8. Foreshore lands
9. Reclaimed lands
A: Yes. Though ordinarily a notice of lis pendens 10. Submerged areas
cannot be cancelled while the action is still pending 11. River banks
and undetermined, the proper court has 12. Lakes
discretionary power to cancel it under peculiar 13. Reservations for public and semi-public
circumstances, as for instance, where the evidence purposes
so far presented by the plaintiffs does not bear out 14. Others of similar character
the main allegations of his complaint, and where
the continuances of the trial, for which the plaintiffs FOREST LAND
is responsible are unnecessarily delaying the
determination of the case to the prejudice of the Q: In 1913, Gov. Gen. Forbes reserved a parcel of
defendants. (Baranda v. Gustillo, G.R. No. L-81163, land for provincial park purposes. Sometime
Sept. 26, 1988) thereafter, the court ordered said land to be
registered in Ignacio Palomo’s name. What is the
Q: When is a notice of lis pendens deemed effect of the act of Gov. Gen Forbes in reserving
cancelled? the land for provincial park purposes?
A: Under Section 77 of Presidential Decree (P.D.) A: As part of the reservation for provincial park
No. 1529, a notice of lis pendens shall be deemed purposes, they form part of the forest zone. It is
cancelled only upon the registration of a certificate elementary in the law governing natural resources
of the clerk of court in which the action or that forest land cannot be owned by private
proceeding was pending stating the manner of persons. It is not registrable and possession thereof,
disposal thereof if there was a final judgment in no matter how lengthy, cannot convert it into
favor of the defendant or the action was disposed private property, unless such lands are reclassified
of terminating finally all rights of the plaintiff over and considered disposable and alienable. (Sps.
the property in litigation. (Isabelita Cunanan et al., Palomo, et. al. v. CA, et. al., G.R. No. 95608, Jan. 21,
v. Jumping Jap Trading Corporation et al., G.R. No. 1997)
173834, April 24, 2009)
506 CIVIL LAW TEAM

Q: Under what instance is a forested area A: Mineral land means any land where mineral
classified as a forest land? resources are found. Mineral resources, on the
other hand, means any concentration of
A: A forested area classified as forest land of the mineral/rocks with potential economic value.
public domain does not lose such classification
simply because loggers or settlers may have Q: Can land be partly mineral and partly
stripped it of its forest cover. Parcels of land agricultural?
classified as forest land may actually be covered
with grass or planted with crops A: The rights over the land are indivisible and that
by kaingin cultivators or other farmers. “Forest the land itself cannot be half agricultural and half
lands” do not have to be on mountains or in out-of- mineral. The classification of land must be
the-way places. The classification of land is categorical; the land must be either completely
descriptive of its legal nature or status and does not mineral or completely agricultural.
have to be descriptive of what the land actually
looks like. (Vicente Yu Chang and Soledad Yu Chang WATERSHED
v. Republic, G.R. No. 171726, Feb. 23, 2011).
Q: What is watershed?
FORESHORE LAND
A: It is a land area drained by a stream or fixed body
Q: What is foreshore land? of water and its tributaries having a common outlet
for surface runoff.
A: A strip of land that lies between the high and low
water marks and is alternatively wet and dry Q: What is watershed reservation?
according to the flow of tide. It is that part of the
land adjacent to the sea, which is alternately A: It is a forest land reservation established to
covered and left dry by the ordinary flow of tides. protect or improve the conditions of the water yield
thereof or reduce sedimentation.
Note: Seashore, foreshoreland, and/or portions of the
territorial waters and beaches, cannot be registered. VII. DEALINGS WITH UNREGISTERED LANDS
Even alluvial formation along the seashore is part of
the public domain and, therefore, not open to Q: Which lands are registrable?
acquisition by adverse possession by private persons.
A:
MANGROVE SWAMPS 1. Alienable and disposable public agricultural
lands; and
Q: What are mangrove swamps? 2. Private lands.
A: These are mud flats, alternately washed and Q: What are the general incidents of registered
exposed by the tide, in which grows various kindred land?
plants which will not live except when watered by
the sea, extending their roots deep into the mud A: Registered land or the owners are not relieved
and casting their seeds, which also germinate there. from the following:
These constitute the mangrove flats of the tropics, 1. any rights incident to the relation of
which exist naturally, but which are also, to some husband and wife, landlord and tenant;
extent cultivated by man for the sake of the 2. liability to attachment or levy on
combustible wood of the mangrove and like trees execution;
as well as for the useful nipa palm propagated 3. liability to any lien of any description
thereon. (Montano v. Insular Government, G.R. No. established by law on the land and
3714, Jan. 26, 1909) buildings thereon, or in the interest of the
owner in such land or building;
Q: Are mangrove swamps disposable? 4. any right or liability that may arise due to
change of the law of descent;
A: No. Mangrove swamps or manglares are forestall 5. the rights of partition between co-
and not alienable agricultural land. owners;
6. the right of government to take the land
MINERAL LANDS by eminent domain;
Q: What are mineral lands?
507
7. liability to be recovered by an assignee in not him. (Rementizo v. Heirs of Vda. De Madarieta,

insolvency or trustee or bankruptcy under G.R. No. 170318, Jan. 15, 2009)
the laws relative to preferences; and
8. any other rights or liabilities created by Q: RP opposed the application for registration filed
law and applicable to unregistered land. by Manna Properties under Sec. 48(b), CA No. 141
arguing that, as a private corporation, it is
A. ADVERSE POSSESSION disqualified from holding alienable lands of the
public domain, except by lease, citing Sec. 3, Art.
Q: When is possession adverse? XII, 1987 Constitution. On the other hand, Manna
Properties claims that the land in question has
A: Possession of land is adverse when it is open and been in the open and exclusive possession of its
notorious. It is open when it is patent, visible, and predecessors-in-interest since the 1940s, thus, the
apparent and it is notorious when it is so land was already private land when Manna
conspicuous that it is generally known and talked of Properties acquired it from its predecessors-in-
by public or the people in the neighborhood. interest. Decide.
Q: Is adverse possession similar with the A: Lands that fall under Sec. 48, CA No. 141 are
possession required in acquisitive prescription? effectively segregated from the public domain by
virtue of acquisitive prescription. Open, exclusive
A: Yes. Possession, to constitute the foundation of a and undisputed possession of alienable public land
prescriptive right, must be possession under a claim for the period prescribed by CA No. 141 ipso jure
of title or it must be adverse. (Cuaycong v. converts such land into private land. Judicial
Benedicto, G.R. No. 9989, Mar. 13, 1918) confirmation in such cases is only a formality that
merely confirms the earlier conversion of the land
Q: What are the requisites in order to acquire land into private land, the conversion having occurred in
title thru adverse possession? law from the moment the required period of
possession became complete.
A:
1. Possession must be: OCENCU Under CA No. 141, the reckoning point is June 12,
a. Open; 1945. If the predecessors-in-interest of Manna
b. Continuous; Properties have been in possession of the land in
c. Exclusive; question since this date, or earlier, Manna
d. Notorious; Properties may rightfully apply for confirmation of
e. In the Concept of an owner; and title to the land. Manna Properties, a private
f. Uninterrupted possession for: corporation, may apply for judicial confirmation of
i. 10 Years – If possession is in good the land without need of a separate confirmation
faith and with just title proceeding for its predecessors-in-interest first.
ii. 30 Years – If possession is in bad (Republic v. Manna Properties Inc., G.R. No. 146527,
faith and without just title Jan. 31, 2005)
2. Land possessed must be an alienable or
disposable public land Note: Sec. 48(b), CA 141 or Public Land Act governs the
confirmation of imperfect or incomplete titles to lands
Q: An Emancipation Patent OCT was issued in of the public domain.
Remy’s favor. However, Madarieta filed a
complaint for annulment and cancellation of the Q: Against whom can acquisition of ownership by
OCT against Remy before the DARAB, alleging that prescription not be used?
the Department of Agrarian Reform mistakenly
included her husband’s lot as part of Luspo’s A: Acquisition of ownership by prescription is
property where Remy’s house was constructed. unavailing against the registered owner and his
From the facts of the case, what is the nature of hereditary successors because under Section 47 of
Remy’s possession of the subject land? the Property Registration Decree, registered lands
are not subject to prescription. No title to
A: Remy possessed the subject land in the concept registered land in derogation of the title of the
of an owner. No objection was interposed against registered owner shall be acquired by prescription
his possession of the subject land and Remy did not or adverse possession. (Agcaoili, Reviewer in
employ fraud in the issuance of the emancipation property registration and related proceedings, p.
patent and title. In fact, Madarieta faulted the DAR, 341, 2008 ed)
508 CIVIL LAW TEAM

B. ACQUISITION OF TITLE BY LAW Q: How are patents acquired?
Q: How may land titles be acquired by law? A: By:

1. Succession (testate or intestate)
A: a. By descent – title is acquired
1. Free Patents based on Public Land Act; when an heir succeeds the deceased
2. Title to Accretion in river banks; owner whether by testate or intestate.
3. Reclamation; or b. By devise – person acquires land
4. Title by Escheat (Rule 91, Rules of Court) from one who may or may not be a
relative, if he is named in the deceased’s
PATENTS UNDER THE PUBLIC LAND ACT will as devisee for such property.
2. Prescription – Possession of land for
Q: What are the different kinds of patents under required number of years and assertion of
the Public Land Act? To whom are they granted ownership through an uninterrupted actual
and what are the requirements for acquisition of possession of property within the period of
such? time prescribed by law. (Arts. 712, 1134, 1137,
NCC)
A:
TO WHOM LAND PATENTS
REQUIREMENTS
GRANTED
Q: How are public lands suitable for agricultural
Homestead Patent
purposes disposed of?
Does not own more than 24 hectares
of land in the Philippines or has A: Public Lands suitable for agricultural purposes
not had the benefit of any are disposed as follows:
To any Filipino
gratuitous allotment of more
citizen over the 1. homestead settlement;
than 24 hectares
age of 18 years 2. sale;
Must have resided continuously for at
or head of a 3. lease;
least 1 year in the municipality
family 4. confirmation of imperfect title
where the land is situated
Must have cultivated at least 1/5 of or incomplete titles either by judicial or
the land applied for administrative legalization; or
Free Patent 5. free title.
Does not own more than 12 hectares
Note: When a free patent title is issued to an applicant
of land
To any natural Has continuously occupied and
and the sea water moves toward the estate of the title
born citizen of cultivated, either by himself or holder, the invaded property becomes part of the
the Philippines his predecessors-in-interest foreshore land. The land under the Torrens system
tract/s of agricultural public land reverts to the public domain and the title is annulled.
subject to disposition
After a free patent application is granted and the
Sales Patent corresponding certificate of title is issued, the land
Citizens of the ceased to be part of the public domain and becomes
Philippines of To have at least 1/5 of the land private property over which the Director of Lands had
lawful age or broken and cultivated within 5 neither control nor jurisdiction.
such citizens not years from the date of the
of lawful age who award Q: What are the restrictions on alienation or
is head of a Shall have established actual encumbrance of lands titled pursuant to patents?
family may occupancy, cultivation and
purchase public improvement of at least 1/5 of
A:
agricultural land the land until the date of such
of not more than final payment 1. Lands acquired under free patent or
12 hectares homestead patent is prohibited from being
alienated, except if in favor of the government,
Special Patents
5 years from and after the issuance of the
Sec. of the DILG shall certify that the patent or grant.
To non-Christian
majority of the non-Christian 2. No alienation, transfer or conveyance of any
Filipinos under
inhabitants of any given reservation homestead after five (5) years and before
Sec. 84 of the
have advanced sufficiently in
Public Land Act twenty-five (25) years after the issuance of
civilization
title shall be valid without the approval of the
509
Secretary of DENR. (C.A. No. 141 as amended Note: In Republic v. CA and Tancinco, the court found
by C.A. No. 458) that the alleged alluvial deposits were artificial and
3. It cannot be alienated within five (5) years manmade and not the exclusive result fo the current of
after approval of such patent application. the Merycauayan and Bocaue rivers. The deposits
4. It cannot be liable for the satisfaction of debt came into being not because of the sole effect of the
within five (5) years after the approval of such current of the rivers but as a result of the transfer of
patent application. the dike towards the river and encroaching upon it.
(G.R. No. L-61647, Oct. 12, 1984)
5. It is subject to repurchase of the heirs within
five (5) years after alienation when such is
Q: To whom does accretion belong?
already allowed.
6. No private corporation, partnership or
A: It depends.
association may lease such land unless it is
1. Accretions on the bank of a lake – belong
solely for commercial, industrial, educational,
to the owners of the estate to which they
religious or charitable purposes, or right of
have been added.
way (subject to the consent of the grantee and
2. Accretion on the sea bank – still of public
the approval of the Secretary of the DENR).
domain, and is not available for private
[The Public Land Act (C.A. No. 141)].
ownership until formally declared by the
government to be no longer needed for
Q: What are the exceptions to the rule on
public use (Republic v. Amanda Vda. De
restrictions on alienation or encumbrance of lands
Castillo, G.R. No. L-69002 June 30, 1988).
titled pursuant to patents?
Q: If the area of a non-registrable land is increased
A:
due to accretion, may the alluvial deposits be
1. Actions for partition because it is not a
subjected to private ownership?
conveyance,
2. Alienations or encumbrances made in favor of
A: No. Non-registrable lands (property of public
the government.
dominion) are outside the commerce of man, they
are not subject to private appropriation.
Q: What is the proper action in cases of improper
or illegal issuance of patents?
Q: If the land, the area of which is increased by
accretion, has already been registered, is there still
A: Reversion suits, the objective of which is the
a need to register the alluvion?
cancellation of the certificate of title and the
consequent reversions of the land covered thereby
A: Yes. Accretion does not automatically become
to the State.
registered. It needs a new registration.
ACCRETION
Q: If the land area has been diminished due to
accretion, may the riparian owner claim protection
Q: Differentiate accretion from alluvium.
against such diminution based on the fact of
registration of his land?
A: Alluvium is the soil imperceptibly and gradually
deposited on lands adjoining the banks of rivers
A: Registration does not protect the riparian owner
caused by the current of the water.
against diminution of land through accretion.
Accretions become the property of the owners of
Accretion is the process whereby the soil is so
the banks and are natural incidents to land
deposited.
bordering on running streams and the provisions of
the Civil Code thereon are not affected by the Land
Q: What are the requisites of accretion?
Registration Act (now Property Registration
Decree). (Republic v. CA and Tancinco, G.R. No. L-
A:
61647, Oct. 12, 1984).
1. The deposit of soil or sediment be gradual and
imperceptible;
Q: The properties of Jessica and Jenny, who are
2. It is the result of the current of the waters
neighbors, lie along the banks of the Marikina
(river/sea); and
River. At certain times of the year, the river would
3. The land where accretion takes place is
swell and as the water recedes, soils, rocks and
adjacent to the banks of rivers or the sea
other materials are deposited on Jessica’s and
coast.
Jenny’s properties. This pattern of the river
510 CIVIL LAW TEAM

swelling, receding and depositing soil and other Jenny had a hotel built on the properties. They had
materials being deposited on the neighbors’ the earth and rocks excavated from the properties
properties have gone on for many years. Knowing dumped on the adjoining shore, giving rise to a
this pattern, Jessica constructed a concrete barrier new patch of dry land. Can they validly lay claim
about 2 meters from her property line and to the patch of land?
extending towards the river, so that when the
water recedes, soil and other materials are A: Jessica and Jenny cannot validly lay claim to the
trapped within this barrier. After several years, the price of dry land that resulted from the dumping of
area between Jessica’s property line to the rocks and earth materials excavated from their
concrete barrier was completely filled with soil, properties because it is a reclamation without
effectively increasing Jessica’s property by 2 authority. The land is part of the lakeshore, if not
meters. Jenny’s property, where no barrier was the lakebed, which is inalienable land of the public
constructed, also increased by one meter along domain. (2008 Bar Question)
the side of the river.
RECLAMATION
Can Jessica and Jenny legally claim ownership over
the additional 2 meters and one meter, Q: What is reclamation?
respectively, of land deposited along their
properties? A: Reclamation is the act of filling up of parts of the
sea for conversion to land.
A: Jenny can legally claim ownership of the lands by
right of accession (accretion) under Article 457 of Note: It must be initially owned by the government. It
the Civil Code. The lands came into being over the may be subsequently transferred to private owners.
years through the gradual deposition of soil and silt
by the natural action of the waters of the river. Q: Who may undertake reclamation projects?
Jessica cannot claim the two meter-wide strip of A: Only the National Government may engage in
land added to her land. Jessica constructed the reclamation projects.
cement barrier two meters in front of her property
towards the river not to protect her land from the Q: To whom does a reclaimed area belong?
destructive forces of the water but to trap the
alluvium. In order that the riparian owner may be A: Under the Regalian doctrine, the State owns all
entitled to the alluvium the deposition must occur waters and lands of the public domain, including
naturally without the intervention of the riparian those physically reclaimed.
owner (Republic v. CA 132 SCRA 514 [1984]).
ESCHEAT
Q: If Jessica’s and Jenny’s properties are
registered, will the benefit of such registration Q: Differentiate action for reversion from escheat
extend to the increased area of their properties? proceeding.
A: No, the registration of Jessica’s and Jenny’s A: An action for reversion is slightly different from
adjoining property does not automatically extend to escheat proceeding, but in its effects they are the
the accretions. They have to bring their lands under same. They only differ in procedure. Escheat
the operation of the Torrens system of land proceedings may be instituted as a consequence of
registration following the procedure prescribed in a violation of the Constitution which prohibits
P.D. No. 1529. transfers of private agricultural lands to aliens,
whereas an action for reversion is expressly
Q: Assume the two properties are on a cliff authorized by the Public Land Act. (Rellosa v. Gaw
adjoining the shore of Laguna Lake. Jessica and Chee Hun, G.R. No. L-1411, Sept. 29, 1953)
511
Q: What are the functions of the RD, LRA and the courts in land registration?
A:
RD LRA COURTS
1. Registration of an instrument 1. Assistance to the Jurisdiction over:
presented for registration dealing Department of Agrarian
with real or personal property Reform, the Land Bank, 1. Applications for original
which complies with the and other agencies in registration of title to lands,
requisites for registration the implementation of including improvements and
2. See to it that said instrument the land reform interests therein
bears the proper documentary program of the
and stamps and that the same government 2. Petitions filed after original
are properly cancelled 2. Assistance to courts in registration, with power to
3. If the instrument is not ordinary and cadastral hear and determine all
registerable: land registration questions arising upon such
4. deny the registration thereof and proceedings application or petitions.
inform the presentor of such 3. Central repository of
denial in writing, stating the records relative to the
ground or reason therefore, and original registration of
5. advising him of his right to lands titled under the
appeal by consulta in accordance Torrens system,
with Sec. 117 of PD 1529 including the
6. Prepare and keep an index subdivision and
system which contains the names consolidation plans of
of all registered owners and titled lands.
lands registered 4. Adjudicate appeal – en
consulta cases
512 CIVIL LAW TEAM

TORTS AND DAMAGES
TORTS AND DAMAGES i. Someone acquires or comes into

possession of “something” which means
BOOK I – TORTS delivery or acquisition of “things”; and
I. PRINCIPLES ii. Acquisition is undue and at the expense
of another, which means without any just
A. ABUSE OF RIGHT; ELEMENTS or legal ground.
Q: What is the principle of abuse of rights? Q: What is the remedy for unjust enrichment?
A: Every person must, in the exercise of his rights A: Accion In Rem Verso. It is an action for recovery
and in the performance of his duties, act with of what has been paid without just cause.
justice, give everyone his due, and observe honesty
and good faith. (Art. 19, NCC) Note: Mistake is not an essential element, as opposed
to solution indebiti where mistake is an essential
Note: This principle is based upon the famous element.
maxim suum jus summa injuria (the abuse of a right is
the greatest possible wrong). (Arlegui v. CA, G.R. No. Protection of Human Dignity–Every person shall
126437, Mar. 6, 2002) respect the dignity, personality, privacy and peace
of mind of his neighbors and other persons.
Q: What are the elements of the principle of abuse
of rights? Q: What are the requisites for accion in rem verso?
A: A:
1. Legal right or duty; 1. That the defendant has been enriched;
2. The right or duty is exercised in bad faith; and 2. That the plaintiff has suffered a loss;
3. For the sole intent of prejudicing or injuring 3. That the enrichment of the defendant is
another. without just or legal ground;
4. That the plaintiff has no other action based on
Q: What is the rationale behind the principle? contract, quasi-contract, crime or quasi-delict.
A: The exercise of a right ends when the right Q: When may accion in rem versobe availed of?
disappears, and it disappears when it is abused,
especially to the prejudice of others. The mask of a A: It can only be availed of if there is no other
right without the spirit of justice which gives it life is remedy to enforce it based on contract, quasi-
repugnant to the modern concept of social law. It contract, crime or quasi-delict.
cannot be said that a person exercises a right when
he unnecessarily prejudices another or offends Q: Distinguish accion in rem verso from
morals or good customs. (Pineda, Torts and solutioindebiti.
Damages, 2009, p. 325, citing BorrelMacia)
A:
Note: The abuse of rights rule established in Article 19 ACCION IN REM VERSO SOLUTIO INDEBITI
of the Civil Code requires every person to act with It is not necessary that Payment by mistake is
justice, to give everyone his due and to observe payment be made by an essential element
honesty and good faith. (RellosavsPellosis, 362 SCRA mistake (Art. 2154)
486)
Q: Is rendition of services included under Art. 22?
B. UNJUST ENRICHMENT
A: No. If services were rendered by someone
Q: What is the principle behind the prohibition
benefiting another, it does not mean that the latter
against unjust enrichment?
is exempted from indemnifying the former. The
liability will lie on quasi-contract under Article 2146.
A: No one shall unjustly enrich himself at the
expense of another. (Pacific Merchandising Corp. v.
C. LIABILITY WITHOUT FAULT
Consolacion Insurance and Surety Co., Inc., 73 SCRA
564)
Q: Is Liability Without Fault different from
Damnum Absque Injuria?
Coverage: the article applies only if:
A: Yes. Liability without Fault includes:
513
a. Strict Liability – there is strict liability if A: No. Generally, laws provide for their own
one is made independent of fault, sanctions and methods of enforcement thereof.
negligence or intent after establishing Article 20 applies only in cases where the law does
certain facts specified by law. It includes not provide for its own sanctions. Said article
liability for conversion and for injuries provides for a general sanction –indemnification for
caused by animals, ultra-hazardous damages. (Pineda, Torts and Damages, 2009, p.329-
activities and nuisance. 330)
b. Product Liability – is the law which
governs the liability of manufacturers and Q: In view of the general sanction provided for
sellers for damages resulting from under Art. 20, may a person have an absolute right
defective products. (Aquino, T., Torts and to be indemnified?
Damages, 2005, Second Ed.)
A: No. It is essential that some right of his be
Q: What is the concept of Damnum Absque impaired. Without such, he is not entitled to
Injuria? indemnification. (Pineda, Torts and Damages, 2009,
p.330)
A: A person who only exercises his legal rights does
no injury. If damages result from such exercise of Note: Article 20 does not distinguish; the act may be
legal rights, the consequences must be borne by done willfully or negligently.
the injured person alone. The law affords no
remedy for damages resulting from an act which E. ACTS CONTRARY TO MORALS
does not amount to a legal injury or wrong.
Q:Differentiate Article 20 from Article 21 of the
Q: Is the owner of a property obliged to take NCC.
reasonable care towards a trespasser for his
protection or from concealed danger? A: Article 20speaks of the general sanction for all
other provisions of law which do not especially
A: GR: No. provide for their own sanction. Article 21 on the
other hand, speaks of act which is legal but is
XPN: contrary to morals, good custom, public order or
1. Visitors – Owners of buildings or premises public policy and is done with intent to injure.
owe a duty of care to visitors.
Note: Any person who willfully causes loss or injury to
2. Tolerated Possession – The owner is still another in a manner that is contrary to morals, good
liable if the plaintiff is inside his property customs or public policy shall compensate the latter
by tolerance or by implied permission. for the damage. (Art. 21, NCC)
Common carriers may be held liable for Q: What are the elements of acts contra bonus
negligence to persons who stay in their mores under Art. 21, NCC?
premises even if they are not passengers.
A:
3. Doctrine of Attractive Nuisance 1. There is an act which is legal;
2. But which is contrary to morals, good custom,
4. State of Necessity (Art. 432) – A situation public order, or public policy; and
of present danger to legally protected 3. It is done with intent to injure.
interests, in which there is no other
remedy than the injuring of another’s also Q: What is the rule on breach of promise to marry?
legally protected interest.
A: GR: If a person promised to marry another and
D. ACTS CONTRARY TO LAW the promise was broken, no court can compel the
promissee. The right to marry is a personal one and
Every person who, contrary to law, willfully or is not subject to judicial compulsion.
negligently causes damage to another, shall
indemnify the latter for the same. (Art. 20, NCC) XPN: A breach of promise to marry may give
rise to damages under certain circumstances:
Q: Does the above stated rule apply to all cases of a) if there is criminal or moral seduction
‘violation of law? (Art. 2219, par. 3 and 10)
514 CIVIL LAW TEAM

TORTS AND DAMAGES
b) actual damages suffered by reason of and 21 are provisions on human relations that
breach of promise to marry “were intended to expand the concept of torts
(Pineda, Torts and Damages, 2009, in this jurisdiction by granting adequate legal
p.333-339) remedy for the untold number of moral
wrongs which is impossible for human
Q: Rosa was leasing an apartment in the city. foresight to specifically provide for in the
Because of the RentControl Law, her landlord statutes.” (Aquino, 2005, citing PNB v. CA, et
could not increase the rental as much as he al. 83 SCRA 237)
wanted to, nor terminate her lease as long as she
was paying her rent. In order to force her to leave 2. Specific torts - It includes trespass, assault and
the premises, the landlord stopped making repairs battery, negligence, products liability, and
on the apartment, and caused the water and intentional infliction of emotional distress. As
electricity services to be disconnected. The defined, torts fall into three different
difficulty of living without electricity and running categories: intentional, negligent and liability
water resulted in Rosa's suffering a nervous (manufacturing and selling defective products),
breakdown. She sued the landlord for actual and product liability tort.
moral damages. Will the action prosper?
a. Art. 19, 20, 21 (catch-all provisions)
A: Yes, based on quasi-delict under the human b. unjust enrichment (arts. 22, 23, 2142 &
relations provisions of the NCC (Articles 19, 20 and 2143)
21) because the act committed by the lessor is c. violation of right of privacy and family
contrary to morals. relations
d. dereliction of official duty of public
Moral damages are recoverable under Article officers
2219(10) in relation to Article 21. Although the e. unfair competition
action is based onquasi-delict and not on contract, f. malicious prosecution
actual damages may berecovered if the lessee is g. violation of rights and liberties of another
able to prove the losses andexpenses she suffered. person
(1996 Bar Question) h. nuisance
II. CLASSIFICATION OF TORTS III. THE TORTFEASOR
A. ACCORDING TO MANNER OF COMMISSION A. THE DIRECT TORTFEASOR
Q: What are the classes of tortsaccording to Q: Who are the persons liable for a quasi-delict?
manner of commission?
A: Defendants in tort cases can either be natural or
A: artificial beings.
1. Negligent torts – It involves voluntary acts or
omissions which results in injury to others, Q: Can a corporation be held liable for torts?
without intending to cause the same.
A: Yes. A corporation is civilly liable in the same
2. Intentional torts – The actor desires to cause manner as natural persons. (PNB v. CA, 83 SCRA
the consequences of his act or believes the 237)
consequences are substantially certain to
result therefrom. Note: With respect to close corporations, the
stockholders who are personally involved in the
3. Strict liability – The person is made liable operation of the corporation may be personally liable
independent of fault or negligence upon for corporate torts under Section 100 of the
submission of proof of certain facts. Corporation Code.
B. ACCORDING TO SCOPE: GENERAL OR SPECIFIC 1. IN GENERAL
1. General – the catch-all provisions on torts Q: Who are the persons made responsible for
provided for in the Civil Code i.e. Articles 19, others?
20 and 21. The effect is that “there is a general
duty owed to every person not to cause harm A:
either willfully or negligently. Articles 19, 20, 1. Father/ mother for their minor children
515
2. Guardians are liable for the minors and Q: Are de facto guardians vicariously liable?
incapacitated persons under their authority
3. Owners/managers of establishment or A: Yes. It is but just that if the children commit
enterprise for their employees tortuous acts while living with them and are below
4. Employers for their employees and household 21 years of age, the law should be applied by
helpers acting within the scope of their analogy.
assigned task.
5. State for their special agents Note: De facto guardians are relatives and neighbors
6. Teachers/Heads of establishment of arts and who take unto themselves the duty to care and
trades for their pupils/students/apprentices support orphaned children without passing through
(Art. 2180, NCC). judicial proceedings.
Q: What is the difference between a minor child Q: What is the rule in vicarious liability of owners
and an incapacitated person in the preceding and managers?
number?
A: GR: A mere manager, who does not own the
A: Minors here refer to those who are below 21 business, is not to be considered an employer
years and not to those below 18 years. While because as a manager, he is just a high class
incapacitated persons refer to persons beyond 21 employee.
years of age but are incapacitated such as those
who are insane or imbecile. (Pineda, Torts and XPN: A manager who is not an owner but who
Damages, 2009, p.81) assumes the responsibility of supervision over
the employees of the owner may be held liable
Q: What are the requisites of vicarious liability of for the acts of the employees.
parents?
Note: To be liable, the manager must be acting as an
A: employer with the same authority as the owner.
1. The child is below 21 years of age
2. The child committed a tortuous act to the Q: When is the employer liable for the tortuous
damage and prejudice of another person act of the employee?
3. The child lives in the company of the parent
concerned whether single or married. (Pineda, A: To make the employer liable under Art 2180(5
Torts and Damages, 2009, p.85) and 6), it must be established that the injurious or
tortuous act was committed at the time the
Q: Who is responsible for an illegitimate child? employee was performing his functions.
A: If the child is illegitimate and acknowledged by Note: If there is deviation from the scope of
employment, the employer is not liable no matter how
the father and lives with the latter, the father is
short in time is the deviation. However, Art. 1759 is an
responsible. However, an illegitimate child who is
exception to the rule of deviation. It must be noted, by
not recognized by the putative father but is under the nature of the business of the common carriers and
the custody and supervision of the mother, it is the for reason of public policy, extraordinary diligence is
latter who is vicariously liable.(Pineda, Torts and required of them in the vigilance over the goods and
Damages, 2009, p.87) for the safety of the passengers transported by them.
(Pineda, Torts and Damages, 2009, p.97-98)
Q: Is the mother liable simultaneously with the
father? Conviction is condition sine qua non before the
employer’s subsidiary liability may attach. The
A: No. The law does not make the father and employee’s criminal negligence or delict and
mother simultaneously liable. It is only in the case corresponding liability must be proved in a criminal
of death or incapacity of the father, that the action.
mother may be held liable.
Q: After working overtime up to midnight, Alberto,
Note: Consequently, the wife as a co-defendant with an executive of an insurance company drove a
the husband or if impleaded alone while the husband company vehicle to a favorite Videoke bar where
is alive and well, may move to dismiss the case filed he had some drinks and sang some songs with
against her for being premature. (Romano v. Parinas, friends to "unwind". At 2:00 a.m., he drove home,
101 Phil. 141) but in doing so, he bumped a tricycle, resulting in
the death of its driver. May the insurance
516 CIVIL LAW TEAM

TORTS AND DAMAGES
company be held liable for the negligent act of driver's license, to drive the car to buy pan de sal
Alberto? Why? in a bakery. On the way, Carlos driving in a
reckless manner, sideswiped Dennis, then riding a
A:The insurance company is not liable because bicycle. As a result, he suffered serious physical
when the accident occurred, Alberto was not acting injuries. Dennis filed a criminal complaint against
within the assigned tasks of his employment. Carlos for reckless imprudence resulting in serious
physical injuries.
It is true that under Art. 2180 (par. 5), employers
are liable for damages caused by their employees 1. Can Dennis file an independent civil action
who were acting within the scope of their assigned against Carlos and his father Benjamin for
tasks. However, the mere fact that Alberto was damages based on quasi-delict?
using a service vehicle of the employer at the time
of the injurious accident does not necessarily mean 2. Assuming Dennis' action is tenable, can
that he was operating the vehicle within the scope Benjamin raise the defense that he is not liable
of his employment. because the vehicle is not registered in his name?
In Castilex Industrial Corp. v. Vasquez Jr (321 (2006 Bar Question)
SCRA393 [1999]), the Supreme Court held that
notwithstanding the fact that the employee did A:
some overtime work for the company, the former 1. Yes, Dennis can file an independent civil action
was, nevertheless, engaged in his own affairs or against Carlos and his father for damages
carrying out a personal purpose when he went to a based on quasi-delict there being an act or
restaurant at 2:00 a.m. after coming out from work. omission causing damage toanother without
The time of the accident (also 2:00 a. m.) was contractual obligation. Under Section 1 ofRule
outside normal working hours. (2001 Bar 111 of the 2000 Rules on Criminal Procedure,
Question) what isdeemed instituted with the criminal
action is only the action torecover civil liability
Q: OJ was employed as professional driver of MM arising from the act or omission punishedby
Transit bus owned by Mr. BT. In the course of his law. An action based on quasi-delict is no
work, OJ hit a pedestrian who was seriously longer deemedinstituted and may be filed
injured and later died in the hospital as a result of separately [Section 3, Rule 111, Rules of
the accident. The victim’s heirs sued the driver Criminal Procedure].
and the owner of the bus for damages. Is there a
presumption in this case that Mr. BT, the owner, 2. No, Benjamin cannot raise the defense that
had been negligent? If so, is the presumption the vehicle is not registered in his name. His
absolute or not? liability, vicarious in character, is based on
Article 2180 because he is the father of a
A: Yes, there is a presumption of negligence on the minor who caused damage due to negligence.
part of the employer. However, such presumption While the suit will prosper against the
is rebuttable. The liability of the employer shall registered owner, it is the actual owner of the
cease when they prove that they observed the private vehicle who is ultimately liable (See
diligence of a good father of a family to prevent Duavit v.CA, G.R. No. L-29759, May 18, 1989).
damage (Article 2180, Civil Code). When the The purpose of car registration is to reduce
employee causes damage due to his own difficulty in identifying the party liable in case
negligence while performing his own duties, there of accidents (Villanueva v. Domingo, G.R. No.
arises the juristantum presumption that the 144274, Sept. 14, 2004).
employer is negligent, rebuttable only by proof of
observance of the diligence of a good father of a Q: Silvestre leased a car from Avis-Rent-A-Car Co.
family (Metro Manila Transit v. CA, 223 SCRA 521 at the Mactan International Airport. No sooner
[1993]; Delsan Transport Lines v, C&tA Construction, had he driven the car outside the airport when,
412 SCRA 524). Likewise, if the driver is charged and due to his negligence, he bumped an FX taxi
convicted in a criminalcase for criminal negligence, owned and driven by Victor, causing damage to
BT is subsidiarily liable for thedamages arising from the latter in the amount of P100,000.00. Victor
the criminal act. (2004 Bar Question) filed an action for damages against both Silvestre
and Avis, based on quasi-delict. Avis filed a
Q: Arturo sold his Pajero to Benjamin for P1M. motion to dismiss the complaint against it on the
Benjamin took the vehicle but did not register the ground of failure to state a cause of action. Should
sale with the Land Transportation Office. He the motion to dismiss be granted?
allowed his son Carlos, a minor who did not have a
517
A: Yes, the motion to dismiss should be granted, 1. Filing a civil action for damages based on
AVIS is not theemployer of Silvestre; hence, there is quasi-delict under Art. 2180 – liability of the
no right of actionagainst AVIS under Article 2180 of employer is primary, direct and solidary
the Civil Code. Not beingthe employer, AVIS has no 2. Filing a criminal case: (offender found guilty)
duty to supervise Silvestre.Neither has AVIS the the civil liability of the employer is subsidiary.
duty to observe due diligence in theselection of its
customers. Besides, it was given in theproblem that Q: What is the defense for the persons liable
the cause of the accident was the negligence under Art. 2180?
ofSilvestre.
A: The persons liable shall be exempted from
Alternative Answer: liability if they can prove that they have exercised
The motion should be denied. Under the Public all the diligence of a good father of a family to
Service Law,the registered owner of a public utility prevent damage.
is liable for thedamages suffered by third persons
through the use of suchpublic utility. Hence, the Q: What is the basis of quasi-delicts under Art.
cause of action is based in law, thePublic Service 2180?
Law. (2000 Bar Question)
A: Pater Familias. The reason for the master’s
A. QUASI-DELICTS UNDER ARTICLE 2180, liability is the negligence in the supervision of his
HOW INTERPRETED subordinates.
Q: How is quasi-delict under Art. 2180 Note: However, the “master” in pater familias under
interpreted? Art. 2180 will be freed from liability if he can prove
that he had observed all the diligence of a good father
A: A person or juridical entity is made liable of a family.
solidarily with a tortfeasor simply by reason of his
relationship with the latter. The relationship may Q: What is the nature of responsibility of the
either be a parent and child; guardian and ward; vicarious obligor?
employer and employee; school and student.
A: The liability of the vicarious obligor is primary
Note: Art. 2176, NCC - Whoever by act or omission and direct and not subsidiary. He is solidarily liable
causes damage to another, there being no fault or with the tortfeasor. His responsibility is not
negligence is obliged to pay for the damage done. Such conditioned upon the insolvency of or prior
fault or negligence, if there is no pre-existing recourse against the negligent tortfeasor.
contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this FAMILY CODE
Chapter.
Q: Who is a minor under Art.221 of the Family
Q: When is the actual tortfeasor not exempted Code?
from liability?
A: The term “unemancipated minor” found in Art.
A: The minor, ward, employee, special agent, pupil, 221means children below 18 years of age. This is in
students and apprentices who actually committed contrast with the “minor children” found in Art.
the delictual acts are not exempted by the law from 2180(2) of NCC which refers to children below 21
personal responsibility. They may be sued and years. To avoid the overlapping in ages, the better
made liable alone as when the person responsible option to settle the conflict is to consider Art 221 as
for them or vicarious obligor proves that he totally superseded by Art 236(FC) as amended by
exercised the diligence of a good father of a family R.A. 6809. Thus:
or when the minor or insane person has no parents
or guardians. In the latter instance, they are GR: 18 years of age – parental authority
answerable with their own property. (Pineda, Torts ceases(emancipation)
and Damages, 2009, p.83)
XPNS: 21 years of age in the following cases
Q: What are the remedies of an injured party for 1. marriage
the tortuous act of an employee? 2. Art. 2180(2) NCC
A: Note: Art. 221 of the Family Code provides that

parents and other persons exercising parental
518 CIVIL LAW TEAM

TORTS AND DAMAGES
authority shall be civilly liable for the injuries and unemancipated minor. The parents, judicial
damages caused by the act or omission or their guardians or the persons exercising substitute
unemancipated children living in their company and parental authority over said minor shall be
under parental authority subject to the appropriate subsidiarily liable.
defenses provided by law. The respective liabilities shall not apply if it is
proved that they exercised proper diligence
Q: Distinguish between Articles 218 of the Family required under the particular circumstances (Art
Code and 2180 of the New Civil Code. 219).
A: Q: A 15-year-old high school student stabs his

ARTICLE 218 ARTICLE 2180 classmate who is his rival for a girl, while they
School, its were going out of the classroom after their last
Teachers, head of
administrators, class. Who may be held liable?
establishment in arts
teachers engaged in
and trades are made
child care are made A: Under Section 218 of the Family Code, the
expressly liable
expressly liable school, its administrators and teachers, or the
Liability of school, its individual, entity or institution engaged in child care
administrators, No such express shall have special parental authority and
teachers is solidary and solidary nor subsidiary responsibility over the minor child while under their
parents are made liability is stated supervision, instruction or custody. Authority and
subsidiary liable responsibility shall apply to all authorized activities
Students involved must Students involved are whether inside or outside the premises of the
be a minor not necessarily minors school, entity or institution.
Q: Is the application of Article 2180 limited to Q: What defense, if any, is available to them?
school of arts and trades?
A: These persons identified by law to be liable may
A: No. It applies to all, including academic raise the defense that they exercised proper
institutions. diligence required under the circumstances. Their
responsibility will cease when they prove that they
Q: Can the liability be imputed to the teacher-in- observed all the diligence of a good father of a
charge even if the student has already reached the family to prevent damage. As regards the employer,
age of majority? if he shows to the satisfaction of the court that in
the selection and in the supervision of his
A: Yes. Under Article 2180, age does not matter. employees he has exercised the care and diligence
Unlike the parent who will be liable only if the child of a good father of a family, the presumption is
is still a minor, the teacher is held answerable by overcome and he is relieved from liability. (Layugan
the law for the act of the student regardless of the v. IAC, G.R. No. L-49542, Sept. 12, 1980). (2005 Bar
age of the student. (Pineda, Torts and Damages, Question)
2009, p.113, citingAmadora v. Court of Appeals, 160
SCRA 315) (1) ELEMENTS; DEFINITION
Q: Is it required that the student be only within Q: What are the elements of a quasi-delict?
the school premises in order for the liability to
arise under this article? A:
1. Negligent or wrongful act or omission;
A: No. Authority and responsibility shall apply to all 2. Damage or injury caused to another;
authorized activities whether inside or outside the 3. Causal relation between such negligence or
premises of the school, entity or institution. fault and damage;
4. No pre-existing contractual relationship
Note: The basis of the teacher’s liability is the principle between the parties (some authorities believe
of loco parentis (stand in place of parents). this element not essential). (Art. 2176)
Q: What is the nature of the liability of the persons In the case of Tison v. Spouses Pomasin, et. al., (G.R.
enumerated under Art. 218? No. 173180, Aug. 24, 2011), to sustain a claim
based on quasi-delict, the following requisites must
A: Those given authority and responsibility under concur: (a) damage suffered by the plaintiff; (b)
Art. 218 shall be principally and solidarily liable for fault or negligence of defendant; and (c) connection
damages caused by the acts or omissions of the
519
of cause and effect between the fault or negligence

of defendant and the damage incurred by the In negligence cases, prior conduct should be examined,
plaintiff. These requisites must be proved by a that is, conduct prior to the injury that resulted, or in
preponderance of evidence. The claimantsmust proper case, the aggravation thereof.
establish their claim or cause of action by
preponderance of evidence, evidence which is of Q: When is Art.2176 on quasi-delict inapplicable?
greater weight or more convincing than that which
is offered in opposition to it. A:
1. When there was a pre-existing contractual
Note: If there is pre-existing contractual relation relation. Otherwise, what results is a breach of
between the parties and the same is violated, the contract. (Robles v. Yap Wing, 41 SCRA 267)
proper cause of action is not anchored on quasi-delict
but breach of contract or culpa contractual. Note: However, if the act that breaches the
contract is tortuous, the pre-existing contractual
However, there may be cases of contractual relations relation will not bar the recovery of damages
where quasi-delict may arise when the contract was (Singson v. BPI, G.R. No. L-24837, June 27, 1968)
grossly violated. The tort liability is not based on the
contract of carriage but on some other bases like 2. When the fault or negligence is punished by
deliberate and malicious violation of the contract(Air law as a crime, Art. 100 of RPC shall be
France v. Carroscoso, G.R. No. L-21438, Sept. 28, 1966). applicable.
Q: When is a person liable for a quasi-delict? 3. If the action for quasi-delict is instituted after 4
years, it is deemed prescribed. (Afialda
A: He is liable for such when, by his act or omission, v.Hisole, 85 Phil 67)
he causes damage to another, there being fault or
negligence, and there is no pre-existing contractual 4. When the injury suffered by a person is the
relationship between them. (Art. 2176, NCC) result of a fortuitous event without human
Note: A single act or omission may give rise to two or intervention.
more causes of action. Thus, an act or omission may
give rise to an action based on delict, quasi-delict or
5. If there is no damage or injury caused to
contract.
another. (Walter A. Smith & Co. v. Cadwallader
Gibson Lumber Company, 55 Phil 517)
(2) DISTINGUISHED FROM CULPA CONTRACTUAL AND CULPA CRIMINAL
Q: Distinguish quasi-delict from culpa contractual and culpa criminal.
A:
CULPA CONTRACTUAL CULPA AQUILIANA CULPA CRIMINAL
Civil Negligence,Quasi-Delict,
Contractual Negligence Criminal Negligence
Tort,or Culpa Extra-Contractual
Proof Needed
Proof of guilt beyond
Preponderance of evidence Preponderance of evidence
reasonable doubt
Onus Probandi
Victim must prove:
Contracting party must prove:
1. The damage suffered; Prosecution must prove the
1. The existence of the
2. The negligence of the defendant; guilt of the accused beyond
contract;
3. The causal connection between the reasonable doubt.
2. The breach thereof.
damage and the negligence.
Defense Available
Exercise of extraordinary Exercise of diligence of a good father of a
Defenses provided for under
diligence (in contracts of family in the selection and supervision of
the Revised Penal Code.
carriage), Force majeure employees
Existence of Contract between the Parties
There is pre-existing contract No pre-existing contract No pre-existing contract
520 CIVIL LAW TEAM

TORTS AND DAMAGES
Note: The result in the criminal case, whether acquittal, or conviction is irrelevant in the independent civil action under
the Civil Code (Dionisio v.Alyendia, 102 Phil 443, ’57, cited in Mckee v. IAC, 211 SCRA 536) unless acquittal is based on the
court’s declaration that the fact from which the civil action arose did not exist, hence the dismissal of criminal action
carries with the extinction of the civil liability. (Andamo v. IAC, 191 SCRA 204, ’90 J. Fernan)
B. INDIRECT LIABILITY FOR INTENTIONAL ACTS b. under their authority

c. living in their company
See Vicarious Liability. 3. Owners and managers of establishments:
a. for their employees
C. PRESUMPTION OF NEGLIGENCE ON PERSONS b. in the service of the branches in
INDIRECTLY RESPONSIBLE which they are employed, or;
c. on the occasion of their functions
Q: What is the presumption of negligence on 4. Employers:
persons indirectly responsible? a. damages caused by employees and
household helpers
A: The presumption of law is that there was b. acting within the scope of their
negligence on the part of the master or employer assigned tasks
either in the selection of the servant or employee c. even if the employer is not engaged
(culpa in eligiendo) or in the supervision over him in any business or industry
after the selection (culpa vigilando), or both. 5. State – acting through a special agent and
not when the damage has been caused by
Note: The presumption is juristantumand not juriset de the official to whom the task done
jure; subsequently, it may be rebutted. Accordingly, if properly pertains.
the employer shows to the satisfaction of the court 6. Teachers or heads of establishments:
that in the selection and supervision of his employee a. of arts and trades
he has exercised the care and diligence of a good b. for damages caused by their pupils
father of a family, the presumption is overcome and he and students or apprentices
is relieved of the liability. c. so long as they remain in their
custody (Art. 2180, NCC)
D. NATURE OF LIABILITY; JOINT OR SOLIDARY
Q: Give the distinctions on the employer’s liability
Q: What is the principle of vicarious liability or law under Art. 2180 NCC and Revised Penal Code.
on imputed negligence?
A:
A: Under Art. 2180, a person is not only liable for a. Under the Civil Code: the liability is direct and
torts committed by him, but also for torts primary (solidary),the employer may be sued
committed by others with whom he has a certain even without suing the employee
relation or for whom he is responsible.
NOTE: Diligence of a good father is a defense.
Q: What is the nature of the responsibility of a Employer is liable even if not engaged in
vicarious obligor? business. Proof of negligence is by mere
preponderance of evidence
A: His liability is primary and direct, not subsidiary.
He is solidarily liable with the tortfeasor. His b. Under the RPC: the liability is subsidiary
responsibility is not conditioned upon the
insolvency of or prior recourse against the negligent NOTE: Diligence of a good father is not a defense.
tortfeasor(De Leon Brokerage v. CA, G.R. 15247, Must prove employer is engaged in business.
Feb. 28, 1962) Proof beyond reasonable doubt is required.
Q: Who are the persons vicariously liable? 2. IN PARTICULAR
A: F-GOES-T A. PARENTS
1. Father, or in case of death or incapacity,
mother: Q: What is the basis of the parents’ vicarious
a. damage caused by minor children liability?
b. living in their company
2. Guardians: A: This liability is made natural as logical
a. for minors or incapacitated persons consequences of the duties and responsibilities of
521
parents exercising parental authority which proceedings. (Pineda, Torts and Damages, 2009,
includes controlling, disciplining and instructing p.88)
their children. In this jurisdiction the parent’s
liability is vested by law which assumes that when a C. OWNERS AND MANAGERS OF ESTABLISHMENTS
minor or unemancipated child living with their AND ENTERPRISES
parent, commits a tortuous act, the parents are
presumed negligent in the performance of their Q: In what sense do the terms “owners and
duty to supervise the children under their custody. managers” used?
A presumption which juristantum, not jurises de
jure, rebuttable-overcome by proof having A: They are used in the sense of “employer” and do
exercised and observed all the diligence of a good not include the manager of a corporation who
father of a family (diligentissimi patris familias). himself is just an employee (Phil. Rabbit Bus Lines v.
(Tamagrovs CA, 209 SCRA 519) Phil. American Forwarders, Inc., G.R. No. L-25142,
Mar. 25, 1975).
Q: In the event of death or incapacity of the
parents, who are liable for acts or omissions of Q: What must be proved in order to make the
minors? employer liable?
A: In default of the parents or a judicially appointed A: To make the employer liable under Art. 2180
guardian, parental authority shall be exercised by (pars. 5 and 6), it must be established that the
the following persons in the order indicated: injurious or tortuous was committed at the time the
1. Surviving grandparents; employee was performing his functions (Marquez v.
2. Oldest sibling, over 21 years old unless Castillo, 68 Phil 568; Cerf v.Medel, 33 Phil 37).
unfit or unqualified;
3. Child’s actual custodian, over 21 years old D. EMPLOYERS
unless unfit or disqualified.
(1) MEANING OF EMPLOYERS
Note: Judicially adopted children are considered
legitimate children of their adopting parents. (Sec. 17, Q: Who is an employer?
RA 8552 Domestic Adoption Act of 1988)Thus,
adopters are civilly liable for their tortuous/criminal A: Employer includes any person acting directly or
acts if the children live with them and are minors. indirectly in the interest of an employer in relation
to an employee and shall include the government
As for an illegitimate child, if he is acknowledged by and all its branches, subdivisions and
the father and live with the latter, the father shall be
instrumentalities, all government-owned or
responsible. However, if he is not recognized by the
controlled corporations and institutions, as well as
putative father but is under the custody and
supervision of the mother, it is the latter who is the
non-profit private institutions, or organizations.
one vicariously liable. (Pineda, Torts and Damages, (Art. 97, P.D. 442)
2009, p.87)
(2) REQUISITES
B. GUARDIAN
Q: When is an employer liable?
Q: Who is a minor under this article?
A: The employer is liable only if the employee was
A: Minors here refer to those who are below performing his assigned task at the time the injury
twenty-one (21) years and not to those below 18 was caused. This includes any act done by the
years. The law reducing the majority age from 21 to employee in the furtherance of the interest ofthe
18 years did not amend these paragraphs. (Art. 236 employer at the time of the infliction of the injury
Family Code as amended by RA No. 6809) (Pineda, or damage. (Aquino, T., Torts and Damages, 2005,
Torts and Damages, 2009, p.81-82) Second Ed., p 697)
Q: Are de facto guardians covered by Art. 2180? (A) EMPLOYEE CHOSEN BY EMPLOYER OR
THROUGH ANOTHER
A: Yes, the law should be applied by analogy. De
facto guardians are relatives and neighbors who Q: What is required before an employer may be
take upon themselves the duty to care and support held liable for the act of its employees?
orphaned children without passing through judicial
A:
522 CIVIL LAW TEAM

TORTS AND DAMAGES
1. The employee was chosen by the employer

personally or through another; (3) EMPLOYER NEED NOT BE ENGAGED IN
2. The service is to be rendered in accordance BUSINESS OR INDUSTRY
with orders which the employer has the
authority to give all times; Q: Is it required that the employer is engaged in
3. That the elicit act of the employee was on the some kind of industry or work?
occasion or by reason of the functions
entrusted to him. A: No. Negligent acts of employees, whether or not
the employer is engaged in a business or industry,
Note: Before the employer’s subsidiary liability is are covered so long as they were acting within the
exacted, there must be proof that: scope of their assigned task. For, admittedly,
1. they are indeed the employer’s of the employees oftentimes wear different hats. They
convicted employee perform functions beyond their office, title or
2. the former are engaged in some kind of designation but which, nevertheless, are still within
industry the call of duty. (Castilex Industrial Corporation v.
3. the crime was committed by the employees Vasquez, et. al.)
in the discharge of their duties
4. that the execution against the latter has not
(4) DEFENSE OF DILIGENCE IN SELECTION AND
been satisfied due to insolvency.
SUPERVISION
(B) SERVICES RENDERED IN ACCORDANCE WITH
Q: What are the defenses available to an
ORDERS WHICH EMPLOYER HAS AUTHORITY TO
employer?
GIVE
A:
See discussion below.
1. Exercise of due diligence in the selection and
supervision of its employees (except in
(C) ILLICIT ACT OF EMPLOYEE WAS ON THE
criminal action);
OCCASION OR BY REASON OF THE FUNCTIONS
2. The act or omission was made outside working
ENTRUSTED TO HIM
hours and in violation of company’s rules and
regulations.
Q: Is it required that the employee must be
performing his assigned task at the time that the
Q: What are the remedies of the injured party in
injury is caused?
pursuing the civil liability of the employer for the
acts of his employees?
A: Yes. The vicarious liability of employers attaches
only when the tortuous conduct of the employee
A:
relates to, or is in the course of his employment.
1. If he chooses to file a civil action for damages
(Valenzuela v. CA)
based on quasi-delict under Article 2180 and
succeeds in proving the negligence of the
It is not necessary that the task performed by the
employee, the liability of the employer is
employee is his regular job or that which was
primary, direct and solidary. It is not
expressly given to him by the employer. It is enough
conditioned on the insolvency of the employee
that the task is indispensable to the business or
(Metro Manila Transit Corp. v. CA, G.R. No.
beneficial to the employer. (Filamer Christian
118069, Nov. 16, 1998).
Institute v. IAC, 212 SCRA 637)
2. If he chooses to file a criminal case against the
(D) PRESUMPTION OF NEGLIGENCE
offender and was found guilty beyond
reasonable doubt, the civil liability of the
Q: What is the presumption on the negligence of
employer is subsidiary. The employer cannot
the employer?
use as a defense the exercise of the diligence
of a good father of a family.
A: The employer is presumed to be negligent and
the presumption flows from the negligence of the
Once there is a conviction for a felony, final in
employee. Once the employee’s fault is established,
character, the employer under Article 103 of
the employer can then be made liable on the basis
the RPC, is subsidiary liable, if it be shown that
of the presumption that the employer failed to
the commission thereof was in the discharge
exercise diligentissimipatris families in the selection
of the duties of the employee. A previous
and supervision of its employees. (LRTA v. Navidad,
dismissal of an action based on culpa aquiliana
G.R. 145804, Feb. 6, 2003)
523
could not be a bar to the enforcement of the 1. Public/Governmental – where the State is
subsidiary liability required by Art. 103 liable only for the tortuous acts pf its special
RPC.(Jocson, et al. v. Glorioso, G.R. L-22686, agents.
Jan. 30, 1968) (Pineda, pp. 101-102, 2009 ed.) 2. Private/Non-governmental – when the State is
engaged in private business or enterprise, it
Q: Would the defense of due diligence in the becomes liable as an ordinary employer.
selection and supervision of the employee (Fontanilla v. Maliaman; NIA v. Fontanilla, 179
available to the employer in both instances? SCRA 685)
A: The defense of diligence in the selection and Note: If the special agent is not a public official and is
supervision of the employee under Article 2180 of commissioned to perform non-governmental
the Civil Code is available only to those primarily functions, then the State assumes the role of an
liable thereunder, but not to those subsidiary liable ordinary employer and will be held liable as such for
under Article 103 of the Revised Penal Code. (Yumul the tortuous acts of said agent. If the State
v. Juliano, G.R. No. 47690, Apr., 28, 1941) (1997 Bar commissioned a private individual to perform a special
Question) governmental task, it is acting through a special agent
within the meaning of the provision.(NIA v.
Fonatanilla, supra)
(5) NATURE OF EMPLOYER’S LIABILITY
F. TEACHERS AND HEADS OF ESTABLISHMENTS
Q: What is the nature of the employer’s vicarious
OF ARTS AND TRADES
liability?
Q: What is the basis of the teacher’s vicarious
A: If based on culpa aquiliana under Art. 2176 and
liability?
2180 of the Civil Code, the liability is primary, while
that under Art. 103 of the Revised Penal Code is
A: The basis of the teacher’s vicarious liability is, as
subsidiary.
such, they acting in Loco Parentis (in place of
parents). However teachers are not expected to
E. STATE
have the same measure of responsibility as that
imposed on parent for their influence over the child
Q: When is the State liable for the acts of others?
is not equal in degree. The parent can instill more
lasting discipline more lasting disciple on the child
A: The State is only liable for the negligent acts of
than the teacher and so should be held to a greater
its officers, agents and employees when they are
accountability than the teacher or the head for the
acting as special agents. The State has voluntarily
tort committed by the child.
assumed liability for acts done through special
agents. (Pineda, Torts and Damages, 2009, p.105)
Q: What is the rationale of the liability of school
heads and teachers for tortuous acts of their pupil
Note: The State assumes the role of an ordinary
employer and will be held liable for the special agent’s
and students?
torts (Fontanilla v. Malianan)
A: The rationale of school heads and teacher’s
Q: Who is a special agent? liability for tortuous acts of their pupil and students,
so long as they remain in custody, is that they
A: A special agent is one who receives a definite stand, to a certain extent, as to their pupils and
and fixed order or commission, foreign to the students, in loco parentis and are called upon to
exercise of the duties of his office. “exercise reasonable supervision over the conduct
of the child.” This is expressly provided for in
An employee who on his own responsibility Articles 349, 350 and 352 of the Civil Code. (Pineda,
performs functions inherent in his office and Torts and Damages, 2009, p.114)
naturally pertaining thereto is not a special agent.
(Meritt v. Government of the Philippine Islands, 34 Q: When are teachers and heads of schools liable?
Phil 311)
A: GR: The teacher-in-charge is liable for the acts of
Q: What are the aspects of liability of the State? his students.
A: XPN: In the case of establishments of arts and

trades, it is the head thereof, and only he, who
shall be liable. (Amadora v CA, 160 SCRA 315)
524 CIVIL LAW TEAM

TORTS AND DAMAGES
Note: There is really no substantial difference A: Any bodily movement tending to produce some
distinction between the academic and non-academic effect in the external world, it being unnecessary
schools in so far as torts committed by their students that the same be actually produced, as the
are concerned. The same vigilance is expected from possibility of its production is sufficient. (People v.
the teacher over the student under their control and Gonzales, 183 SCRA 309, 324)
supervision, whatever the nature of the school where
he is teaching. V. PROXIMATE CAUSE
Q: When is a student considered in the custody of A. CONCEPT
the school authorities?
1. DEFINITION
A: The student is in the custody of the school
authorities as long as he is under the control and Q: What is proximate cause?
influence of the school and within its premises,
whether the semester has not ended, or has ended A: An act from which an injury results as a natural,
or has not yet begun. The term “custody” signifies direct, uninterrupted consequence and without
that the student is within the control and influence which the injury would not have occurred.
of the school authorities. The teacher in charge is
the one designated by the dean, principal, or other 2. TEST
administrative superior to exercise supervision over
the pupils or students in the specific classes or Q: What are the tests to determine whether a
sections to which they are assigned. It is not cause is proximate?
necessary that at the time of the injury, the teacher
is physically present and in a position to prevent it. A:
1. Cause-In-Fact Test – It is necessary that there
C. JOINT TORTFEASORS is proof that defendant’s conduct is a factor in
causing plaintiff’s damage.
Q: Who are joint tortfeasors? a. But For Test / Sine Qua Non Test
b. Substantial Factor Test
A: All the persons who command, instigate, c. Necessary and Sufficient Test (NESS) – The
promote, encourage, advice, countenance, act or omission is a cause-in-fact if it is a
cooperate in, aid, or abet the commission of a tort, necessary element of a sufficient set.
or who approve it after it is done, if done for their (Aquino, Torts and Damages, 2005, p.267-
benefit; they are each liable as a principal, to the 270)
same extent and in same manner as if they have 2. Policy test – The law limits the liability of the
performed the wrongful act themselves. (Worcester defendant to certain consequences of his
v.Ocampo, 22 Phil 42) action; if the damage or injury to the plaintiff is
beyond the limit of the liability fixed by law,
Q: What is the nature of liability of joint the defendant’s conduct cannot be considered
tortfeasors? the proximate cause of the damage.
A: They are solidarily liable for the damage caused. NOTE: Such limit of liability is determined by
(Metro Manila Transit Corporation v. CA, 298 SCRA applying these subtests of the policy test:
495) a. Foreseeability Test;
b. Natural and Probable Consequence Test;
Note: In case of injury to a passenger due to the c. Natural and Ordinary or Direct
negligence of the driver of the bus on which he was Consequences Test;
riding and of the driver of another vehicle, the drivers d. Hindsight Test;
as well as the owners of the two vehicles are jointly e. Orbit of Risk Test;
and severally liable for damages. (Pineda, Torts and f. Substantial Factor Test. (Aquino, Torts
Damages, 2009, p.144, citing Tiu v. Arriesgado 437 and Damages, 2005, p.273)
SCRA 426)
3. DISTINGUISHED FROM IMMEDIATE CAUSE,
IV. ACT OR OMISSION AND ITS MODALITIES INTERVENING CAUSE, REMOTE AND CONCURRENT
A. CONCEPT OF ACT Q: Distinguish proximate, immediate, intervening,

remote and concurrent causes.
Q: What is an act?
A:
525
PROXIMATE INTERVENING REMOTE CONCURRENT though his act alone might not have caused the
CAUSE CAUSE CAUSE CAUSE entire injury.
It is the
One that
cause C. LEGAL CAUSE
destroys the Causes
which, in
causal brought
natural 1. NATURAL AND PROBABLE CONSEQUENCES
connection about by
and That cause
between the acts and
continuous which some Q: Explain natural and probable test.
the omissions of
sequence, independent
negligent third
unbroken force merely A: Where the defendant’s liability is recognized only
act and persons
by any took if the harm or injury suffered is the natural and
injury and which
efficient advantage
thereby makes the probable consequence of his act or omission
intervening of to
negatives defendant complained of. (Banzon v. CA, 175 SCRA 297)
cause, accomplish
liability. still liable.
produces something
Here, the 2. FORESEEABILITY
the injury, Note:
not the
proximate
and Foreseeable natural
cause is not Q: Explain the foreseeability test.
without Intervening effect
necessarily
which the causes cannot thereof.
be considered
the sole A: Where the particular harm was reasonably
result
sufficient cause of the foreseeable at the time of the defendant’s
would not
intervening accident
have misconduct, his act or omission is the legal cause
causes
occurred. thereof. To be negligent, the defendant must have
acted or failed to act in such a way that an ordinary
B. CAUSE IN FACT reasonable man would have realized that certain
interests of certain persons were unreasonably
1. BUT FOR TEST subjected to a general but definite class of risk
which made the actor’s conduct negligent, it is
Q: What is the “but for” test? obviously the consequence for the actor must be
held legally responsible. (Pineda, Torts and
A: This is also known as the sine qua non test. It Damages, 2009, p.53)
considers whether the injury would not have
occurred but for the defendant's negligent act. D. EFFICIENT INTERVENING CAUSE
Defendant’s conduct is the cause in fact of the
injury if the damage would not have resulted had Q: What is an efficient intervening cause?
there been no negligence on the part of the
defendant. A: It is one which destroys the causal connection
between the negligent act and the injury and
2. SUBSTANTIAL FACTOR TEST thereby negatives liability (Morril v.Morril, 60 ALR
102, 104 NJL 557). It is sometimes called,
Q: What is the substantial factor test? novusactusinterviens.
A: It makes the negligent conduct the cause-in-fact Q: When is there no efficient intervening cause?
of the damage if it was a substantial factor in
producing the injuries. It is important in cases A: If the force created by the negligent act or
where there are concurrent causes.(Aquino, Torts omission have either:
and Damages, 2005, p.268-269) 1. remained active itself; or
2. created another force which remained
3. CONCURRENT CAUSES active until it directly caused the result; or
3. created a new active risk of being acted
Q: What is the principle of concurrent causes? upon by the active force that caused the
result. (57 Am. Jur. 2d 507)
A: Where the concurrent or successive negligent
acts or omissions of two or more persons, although E. CAUSE VS. CONDITION
acting independently, are in combination with the
rd Q: Distinguish cause and condition.
direct and proximate cause of a single injury to a 3
person, and it is impossible to determine what
proportion each contributed to the injury, either of A: Cause is the active force while condition is the
them is responsible for the whole injury, even passive situation. The former is the active “cause”
526 CIVIL LAW TEAM

TORTS AND DAMAGES
of the harm and the latter is the existing North Expressway v. Baesa, G.R. Nos. 79050-
“conditions” upon which the cause operated. 51, Nov. 14, 1989)
Note: If the defendant has created only a passive 2. If the defendant’s negligence is a concurrent
static condition which made the damage possible, cause and which was still in operation up to
the defendant is said not to be liable. the time the injury was inflicted;
F. LAST CLEAR CHANCE 3. Where the plaintiff, a passenger, filed an

action against a carrier based on contract;
Q: What is the doctrine of last clear chance? (Bustamante v. CA, G.R. No. 89880, Feb. 6,
1991)
A: This is also called as the “humanitarian
negligence doctrine.” The contributory negligence 4. If the actor, though negligent, was not aware
of the party injured will not defeat the claim for of the danger or risk brought about by the
damages if it is shown that the defendant could, by prior fraud or negligent act;
the exercise of reasonable care and prudence, have
avoided the consequences of the negligence of the 5. In case of a collapse of a building or structure.
injured party. (De Roy v. CA, G.R. No. L-41154, Jan. 29, 1988)
Q: What are the requisites of the doctrine of last Q: What are the alternative views regarding the
clear chance? doctrine of last clear chance?
A: A:
1. Plaintiff is placed in danger by his own 1. Prevailing view: The law is that the person who
negligent acts and he is unable to get out from has the last fair chance to avoid the impending
such situation by any means; harm and fails to do so is chargeable with the
2. Defendant knows that the plaintiff is in danger consequences, without reference to the prior
and knows or should have known that the negligence of the other party.
plaintiff was unable to extricate himself
therefrom; and 2. Minority view: The last clear chance doctrine is
3. Defendant had the last clear chance or inapplicable in Philippine jurisdiction in
opportunity to avoid the accident through the determining the proximate cause of the
exercise of ordinary care but failed to do so, accident.
and the accident occurred as a proximate
result of such failure. (Pineda, Torts and 3. Third view: That the doctrine of comparative
Damages, 2009, p.59-60) negligence and the last clear chance doctrine
are not inconsistent with each other.
Q: Is the doctrine of last clear chance applicable in (AQUINO, 2005)
case of collision?
Q: Mr and Mrs R own a burned-out building, the
A: Yes. In case of collision, it applies in a suit firewall of which collapsed and destroyed the shop
between the owners and drivers of colliding occupied by the family of Mr and Mrs S, which
vehicles and not where a passenger demands resulted in injuries to said couple and the death of
responsibility from the carrier to enforce its their daughter. Mr and Mrs S had been warned by
contractual obligations.(Pineda, Torts and Mr & Mrs R to vacate the shop in view of its
Damages, 2009, p.60, citing Tiu v. Arriesgado, 437 proximity to the weakened wall but the former
SCRA 426) failed to do so. Mr & Mrs S filed against Mr and
Mrs R an action for recovery of damages the former
Note: There is a different rule in case of collision of suffered as a result of the collapse of the firewall. In
vessels. defense, Mr and Mrs R rely on the doctrine of last
clear chance alleging that Mr and Mrs S had the last
Q: What are the instances when the doctrine of clear chance to avoid the accident if only they
last clear chance is inapplicable? heeded the former’s warning to vacate the shop,
and therefore Mr and Mrs R’s prior negligence
A: should be disregarded. If you were the judge, how
1. When the injury or accident cannot be avoided would you decide the case?
by the application of all means at hand after
the peril has been discovered; (Pantranco
527
A: I would decide in favor of Mr & Mrs S. The 2. marriage,

proprietor of a building or structure is responsible 3. equal protection of laws,
for the damages resulting from its total or partial 4. freedom of contract, trial by jury. (Pineda,
collapse, if it should be due to the lack of necessary Persons, p. 24)
repairs (Art. 2190, NCC) As regards the defense of 5. Rights of personalty or human rights;
last clear chance, the same is not tenable because 6. Family rights; and
according to the SC in one case (De Roy v. CAL- 7. Patrimonial rights:
80718, Jan 29, 1988, 157 S 757) the doctrine of last i. Real rights
clear chance is not applicable to instances covered ii. Personal rights. (Rabuya Persons, p. 19)
by Art 2190 of the Civil Code. Further, in Phoenix
Construction, Inc. v. Intermediate Appellate Court C. VIOLATION OF RIGHT OR LEGAL INJURY
(G.R. L-65295, March 10, 1987. 148 SCRA 353) the
Supreme Court held that the role of the common Q: What are the available remedies for a person
law "last clear chance" doctrine in relation to Art. whose rights have been violated?
2179 of the Civil Code is merely to mitigate
damages within the context of contributory A: Legal remedies are either preventive or
negligence. (1990 Bar Question) compensatory. Every remedy in a certain sense is
preventive because it threatens certain undesirable
A. CONCEPT consequences to those who violate the rights of
others.
Q: What is injury as distinguished from damage?
The primary purpose of a tort action is to provide
A: Injury is the illegal invasion of a legal right while compensation to a person who was injured by the
damage is the loss, hurt or harm. Injury refers to tortuous conduct of the defendant. The remedy of
any indeterminate right or property, but also to the injured person is therefore primarily an action
honor and credit. for damages against the defendant. (Aquino, Torts
and Damages, 2005, p.20)
B. ELEMENTS OF RIGHT
D. CLASSES OF INJURY
Q: What is a right?
1. INJURY TO PERSONS
A: It is a legally enforceable claim of one person
against another, that the other shall do a given act, Q: What are the torts committed against persons?
or shall not do a given act (Pineda, Persons, p. 23)
A:
Q: What are the kinds of rights? Distinguish. 1. assault,
2. battery,
A: 3. false imprisonment,
1. Natural Rights – Those which grow out of the 4. intentional infliction of emotional distress, and
nature of man and depend upon personality. 5. fraud
E.g. right to life, liberty, privacy, and good 2. INJURY TO PROPERTY

reputation.
Q: What are the torts committed against
2. Political Rights – Consist in the power to property?
participate, directly or indirectly, in the
establishment or administration of A:
government. 1. trespass to land,
2. trespass to chattels, and
E.g. right of suffrage, right to hold public 3. conversion.
office, right of petition.
3. INJURY TO RELATIONS
3. Civil Rights – Those that pertain to a person by
virtue of his citizenship in a state or Q: What are the torts that cause injury to
community. relations?
E.g. A:
1. property rights, 1. Family relations
528 CIVIL LAW TEAM

TORTS AND DAMAGES
a. Alienation of affection 1. Violation of personal dignity

b. Loss of consortium 2. Infliction of emotional distress
c. Criminal conversation (adultery) 3. Violation of privacy
2. Social relations a. Appropriation
a. Meddling with or disturbing family b. Intrusion
relations c. public disclosure of private facts
b. Intriguing to cause another to be d. false light in the public eye
alienated from his friends 4. Disturbance of peace of mind
3. Economic relations 5. Malicious prosecution
a. Interference with contractual 6. Defamation
relations
b. Unfair competition B. INTERFERENCE WITH RELATIONS
4. Political relations
a. Violation of right to suffrage See Injury to Relations.
b. Violation of other political rights
(freedom of speech, press, assembly B. INTERFERENCE WITH RIGHTS TO PERSONS AND
and petition, etc.) PROPERTY
VII. INTENTIONAL TORTS 1. INTENTIONAL PHYSICAL HARMS
A. GENERAL A. GENERAL
1. CONCEPT
(1) CONCEPT
Q: What is intentional tort?
(2) KINDS
A: Tort or wrong perpetrated by one who intends to
do that which the law has declared wrong as B. VIOLATION OF PERSONS SECURITY, PHYSICAL
contrasted with negligence in which the tortfeasor INJURIES
fails to exercise that degree of care in doing what is
th (1) BATTERY (PHYSICAL INJURY)
otherwise permissible (Black’s Law Dictionary, 6
edition, p. 1489).
Q: What is battery as a basis for tort liability?
Note: Intentional torts are those which involve malice
or bad faith. A: It is the intentional, unprivileged, and either
harmful or offensive contact with the person of
2. CLASSES another.
A. INTERFERENCE WITH PERSONS AND PROPERTY Note: At common law, battery is the tort of
intentionally and voluntarily bringing about an
(1) PHYSICAL HARMS unconsented harmful or offensive contact with a
person or to something closely associated with them.
Q: What the kinds of physical harms?
Q: When is a person liable for tort based on
A: battery?
1. Violation of persons security, physical injuries
a. battery (physical injury) A: An actor is subject to liability to another for
b. assault (grave threat) battery if:
2. False imprisonment (illegal detention) 1. he acts intending to cause a harmful or
3. Trespass to land offensive contact with the person of the
4. Interference with personal property other or a third person, or an imminent
a. trespass to chattels apprehension of such a contact, and
b. conversion 2. a harmful/offensive contract with the
person of the other directly or indirectly
(2) NON-PHYSICAL HARMS results
Q: What the kinds of non-physical harms? Q: What are the elements of battery?
A: A:
529
1. There must be a voluntary act; 5. A contact may constitute a battery even if

2. That the person either (a) intended to cause a there is a delay between the defendant's act
harmful or offensive contact with his body or and the contact to the plaintiff's injury.
with the body of some third person or (b)
intended to cause a third person to have Q: What are the defenses in trespass to the person
apprehension of such harmful or offensive which are applicable to battery?
contact;
3. That a harmful or offensive contact with the A: The standard defenses to trespass to the person
body of a person actually resulted; are:
4. That the person in some sensed “caused” the 1. necessity,
harmful or offensive contact, either because 2. consent,
he himself touched another person or because 3. self defense, and
he set in motion some force that actually did 4. defense of others.
the touching;
5. That the person did not consent to the Note: Self defense as to battery can consist only of
contact. engaging in physical contact with another person in
order to prevent the other person from themselves
Q: Is actual contact necessary in battery? engaging in a physical attack.
A: No. Unlike assault, battery involves an actual (2) ASSAULT (GRAVE THREAT)
contact. The contact can be by one person
(the tortfeasor) of another (the victim), or the Q: What is assault in the context of torts?
contact may be by an object brought about by the
tortfeasor. For example, the intentional contact by A: It is the tort of acting intentionally and
a car is a battery. voluntarily causing the reasonable apprehension of
an immediate harmful or offensive contact.
Note: Unlike criminal law, which recognizes degrees of
various crimes involving physical contact, there is but a Q: What are the elements of assault as a basis for
single tort of battery. Lightly flicking a person's ear is tort liability?
battery, as is severely beating someone with a tire
iron. Neither is there a separate tort for a battery of a A:
sexual nature. 1. That a person committed a voluntary act;
2. That the person’s act created in another
Q: What are the major defenses to battery? person an apprehension of immediate harmful
or offensive contact with the latter’s person;
A: They are: self-defense, defense of others, 3. That the person intended to cause either a
defense of property, retaking of land, recapture of harmful or offensive contact or an
chattels, necessity, discipline, retention for apprehension of such a contact;
investigation (e.g. shoplifting), and legal authority. 4. That there was a causal connection between
the attacker and the other person’s
Q: What are some rules in determining liability for apprehension;
tort based on battery? 5. The victim lacks consent.
A: Q: When is an actor liable for tort based on

1. The victim of a battery need not be aware of assault?
the act at the time for the tort to have
occurred. A: An actor is liable for assault if:
2. Battery is a form of trespass to the person and 1. He acts intending to cause a harmful or
as such no actual damage (e.g. injury) needs to offensive contact with the person of the
be proved. Only proof of contact (with the other, or an imminent apprehension of
appropriate level of intention or negligence) such a contact, and
needs to be made. 2. The other is thereby put in such imminent
3. If there is an attempted battery, but no actual apprehension.
contact, that may constitute a tort of assault.
4. Battery need not require body-to-body Note: Assault requires intent.
contact. Touching an object "intimately
connected" to a person (such as an object he Actual ability to carry out the apprehended contact is
or she is holding) can also be battery. not necessary.
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TORTS AND DAMAGES
Q: When is an act not considered an assault? A:

1. An act or omission on the part of defendant
A: An act intended as a step toward the infliction of that confines or restrains plaintiff
a future contact, which is so recognized by the 2. That plaintiff is confined or restrained to a
other, does not make the actor liable for an assault bounded area;
under the rule. 3. Intent; and
4. Causation
Q: Is actual contact necessary in assault?
Q: When is an actor liable for false imprisonment?
A: No. As distinguished from battery, assault need
not to involve actual contact—it only needs intent A: Under the law on torts, an actor is liable for false
and the resulting apprehension. However, assault imprisonment if:
requires more than words alone. For example, 1. he acts intending to confine the other
wielding a knife while shouting threats could be within boundaries fixed by the actor,
construed as assault if an apprehension was 2. his act directly or indirectly results in such
created. a confinement, and
3. the other is conscious of the confinement
Note: A battery can occur without a preceding assault, or is harmed by it.
such as if a person is struck in the back of the head.
Fear is not required, only anticipation of subsequent Note: In the case of People v. Bisda, 406 SCRA 454,
battery. moral damages may be awarded to a victim of illegal
arrest and detention, especially if the victim is a minor,
Q: When is contact said to be “harmful”? the accused poked a knife at her, forcibly took her
from school, tied her hands and placed scotch tape on
A: While the law varies by jurisdiction, contact is her mouth.
often defined as "harmful" if it objectively intends
to injure, disfigure, impair, or cause pain. D. TRESPASS TO LAND
Q: When is an act deemed to be “offensive”? (1) CONCEPT
A: The act is deemed "offensive" if it would offend a Q: What is trespass to real property?
reasonable person’s sense of personal dignity.
A: It is a tort that is committed when a person
Q: In what context is “imminence” understood in unlawfully invades the real property of
determining tort liability for assault? another.(Aquino, Torts and Damages, 2005, p.367)
A: "Imminence" is judged objectively and varies Note: The Revised Penal Code punishes different forms
widely on the facts; it generally suggests there is of trespass. On the other hand, Art. 451 of the Civil
little to no opportunity for intervening acts. Code provides that damages may be awarded to the
real owner if he suffered such damages because he
Q: Distinguish apprehension from fear. was deprived of possession of his property by a
possessor in bad faith or by a person who does not
have any right whatsoever over the property.
A: The state of "apprehension" should be
differentiated from the general state of fear, as Anybody who builds, plants or sows on the land of
apprehension requires only that the person be another knowing full well that there is a defect in his
aware of the imminence of the harmful or offensive title is liable for damages. The liability is in addition to
act. the right of the landowner in good faith to appropriate
Q: What are some defenses in assault? what was built, planted or sown or to remove the
same.
A: Assault can be justified in situations of self-
defense or defense of a third party where the act Liability for damages under the above-cited provisions
was deemed reasonable. It can also be justified in of the RPC and the NCC requires intent or bad
situations where consent can often be implied (i.e. faith.(Aquino, Torts and Damages, 2005, p.367)
sports competitions).
(2) ELEMENTS
C. FALSE IMPRISONMENT (ILLEGAL DETENTION)
Q: Is intent or bad faith necessary for liability to
Q: What are the elements of false imprisonment attach?
as a basis for tort liability?
531
A: Yes, the Revised Penal Code and the New Civil 2. Unjustified deprivation of access to
Code requires intent or bad faith. property such as unjustified
disconnection of electricity service
Note: Chief Justice Concepcion observed however that
trespass may even be committed in good faith. Q: What is the difference between “conversion”
(Republic v. de los Angeles, G.R. L-26112, Oct. 4, 1971) and trespass to chattels?
Q: What is the extent of trespass to personal A: It is the seriousness of the damage. In

property? “conversion” claim, damage to the personal
property is so egregious as to merit the defendant’s
A: In the field of tort, trespass extends to all cases paying its full value in damages. Thus, not all
where a person is deprived of his personal property trespasses to chattels are conversions, but all
even in the absence of criminal liability. (Aquino, T., conversions are trespass to chattels. (Cf. U.S. v.
Torts and Damages, 2005, Second Ed. p.368) Calimag, 12 Phil 687)
E. INTERFERENCE WITH PERSONAL PROPERTY 2. INTENTIONAL NON-PHYSICAL HARMS
(1) TRESPASS TO CHATTELS A. GENERAL
Q: What is trespass to chattels? (1) CONCEPT
A: It is where a person took possession of the (2) KINDS

property of another in bad faith. (Aquino, Torts and
Damages, 2005, p. 369) B. VIOLATION OF PERSONAL DIGNITY
Note: It may also cover cases where the defendant Q: What is the rule with regard to the right of a
deprived the plaintiff of personal property for the person to his dignity, personality, privacy and
purpose of obtaining possession of a real property. peace of mind?
(Aquino, Torts and Damages, 2005, p.369, citing
Magbanaua vs. IAC, 137 SCRA 329)
A: Every person shall respect the dignity,
personality, privacy and peace of mind of his
(2) CONVERSION
neighbors and other persons. The following and
similar acts, though they may not constitute a
Q: What is “conversion?”
criminal offense, shall produce a cause of action for
damages, prevention and other relief:
A: It is an intentional interference with the
plaintiff’s personal property that is so substantial
1. Prying into the privacy of another's
that it is fair to require the defendant to pay the
residence;
property’s full value.
2. Meddling with or disturbing the private
life or family relations of another;
Q: What are the elements of conversion?
3. Intriguing to cause another to be
alienated from his friends;
A:
4. Vexing or humiliating another on account
1. An act by defendant that interferes with
of his religious beliefs, lowly station in life,
plaintiff's right of possession in a chattel.
place of birth, physical defect, or other
personal condition. (Art. 26, NCC)
2. The interference is so serious that it warrants
requiring defendant to pay the chattel's full
C. INFLICTION OF EMOTIONAL DISTRESS
value.
Q: What are the requisites for one to be able to
Q: What may be included in conversion?
recover for the intentional infliction of emotional
distress?
A: Conversion may include:
1. Cases where the defendant deprived the
A: The plaintiff must show that:
plaintiff of personal property for the
1. The conduct of the defendant was
purpose of obtaining possession of a real
intentional or in reckless disregard of the
property, as when a landlord deprived his
plaintiff;
tenants of water in order for them to
vacate the lot they were cultivating.
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TORTS AND DAMAGES
2. The conduct was extreme and

outrageous; Emotional distress properly belongs to the reactive
3. There was a causal connection between harm principle while defamation calls for the
the defendant’s conduct and the application of the relational harm principle.
plaintiff’s mental distress; and (Aquino, Torts and Damages, 2005, p.489-490)
4. The plaintiff’s mental distress was
extreme and severe. (MVRS Publications Note: The principle of relational harm includes harm to
Inc., et al v. Islamic Da’wah Council of social relationships in the community in the form of
the Philippines., et al., 396 SCRA 210) defamation as distinguished from the principle of
reactive harm which includes injuries to individual
Note: Even if there was no intentional infliction of emotional tranquility. (MVRS Publications Inc., et al
emotional distress in one case, the SC recognized the v. Islamic Da’wah Council of the Philippines., et al.,
possibility that one may be made liable for the tort of 396 SCRA 210)
intentional infliction of emotional distress.
Q: What is the so called “parasitic” damage for
Q: What does “extreme and outrageous conduct” emotional distress?
mean?
A: These are damages which depend on the
A: It is conduct that is so outrageous in character, existence of another tort.(Aquino, Torts and
and so extreme in degree, as to go beyond all Damages, 2005, p.490)
possible bounds of decency, and to be regarded as
atrocious, and utterly intolerable in civilized D. VIOLATION OF PRIVACY
society.(Aquino, Torts and Damages, 2005, p.487)
Q: What are the zones of privacy under the NCC,
Q: What does “emotional distress” mean? RPC, Rules of Court, and special laws?
A: It is any highly unpleasant mental reaction such A:

as extreme grief, shame, humiliation, 1. That every person shall respect the dignity,
embarrassment, anger, disappointment, worry, personality, privacy and peace of mind of his
nausea, mental suffering and anguish, shock, fright, neighbors and other persons and any act of a
horror, and chagrin.(Aquino, Torts and Damages, person of meddling and prying into the privacy
2005, p.487) of another is punishable as an actionable
wrong;
Note: “Severe emotional distress” in some 2. That a public officer or employee or any
jurisdictions, refer to any type of severe and disabling private individual shall be liable for damages
emotional or mental condition which may be generally for any violation of the rights and liberties of
recognized and diagnosed by professionals trained to another person, and recognizes the privacy of
do so, including posttraumatic stress disorder, letters and other private communications;
neurosis, psychosis, chronic depression, or phobia. 3. The RPC makes a crime the:
i. violation of secrets by an officer,
The plaintiff is required to show, among other things,
ii. revelation of trade and industrial secrets,
that he or she suffered emotional distress so severe
that no reasonable person could be expected to
and
endure it; severity of the distress is an element of the iii. trespass to dwelling.
cause of action, not simply a matter of damages. 4. Invasion of privacy is likewise an offense in
special laws such as the:
The plaintiff cannot recover merely because of hurt i. anti-wiretapping law; and
feelings. Liability cannot be extended to every trivial ii. secrecy of bank deposits act; and
indignity. The plaintiff must necessarily be expected 5. The Rules of Court provisions on privileged
and required to be hardened to a certain amount of communication.
rough language, and to acts that are definitely
inconsiderate and unkind. Q: What is the standard to be applied in
determining the existence of a violation of the
Q: Distinguish emotional distress from right to privacy?
defamation.
A: The right to privacy is not a guaranty to hermitic
A: An emotional distress tort action is personal in seclusion. The standard to be applied is that of a
nature. It is a civil action filed by an individual to person of ordinary sensibilities. It is relative to the
assuage the injuries to his emotional tranquility due customs of the time and place, and is determined
to personal attacks on his character. by the norm of an ordinary person.
533
2. invading his home; (Ford Motor Co. v.

Note: The essence of privacy is the right to be let Williams, 108 Ga.App. 21, 132, S.E.2d
alone. (Pineda, Torts and Damages, 2009, p.348) 206)
3. invading one’s privacy by looking from
Q: What is the two-part test in determining the outside;
reasonableness of a person’s expectation of 4. eavesdropping; (LaCrone v. Ohio Bell Tel.
privacy? Co., 114 Ohio App. 299, 182 N.E.2d 340,
59 O.O2d 236)or
A: 5. persistent and unwanted telephone calls.
1. Whether by his conduct, the individual has
exhibited an expectation of privacy; and Note: The tort of intrusion upon a person’s solitude
2. Whether this expectation is one that society protects a person’s sense of locational and
recognizes as reasonable. psychological privacy.
Q: What are the four general classes of tort actions Intrusion in public places:
for invasion of privacy?
Generally, there is no invasion of the right to
A: privacy when a journalist records, photographs, or
1. appropriation; writes about something that occurs in public places.
2. intrusion;
3. public disclosure of private facts; and However, while merely watching a person in public
4. false light in the public eye (Pineda, Torts and places is not a violation, one does not automatically
Damages, 2009, p.349) make public everything that he does in public. It
should not be tantamount to harassment or
(1) APPROPRIATION overzealous shadowing.
Q: What is appropriation? This protection is not limited to public figures.

Everyone is protected.
A: It consists of appropriation, for the defendant’s
benefit or advantage, of the plaintiff’s name or Intrusion and administrative investigation:
likeness. (Carlisle v. Fawcett Publications, 201 Cal.
App.2d 733, 20 Cal,Rptr. 405) There is no intrusion when an employer
investigates its employee or when a school
Q: What does this tort protect? investigates its student. In the latter case, the
investigation may cover an alleged offense
A: The tort of commercial appropriation of likeness committed outside the school premises.(Aquino,
has been held to protect various aspects of an Torts and Damages, 2005, p.430)
individual’s identity from commercial exploitation:
1. name Intrusion and public records:
2. likeness
3. achievements Generally, there is no intrusion into the right of
4. identifying characteristics privacy of another if the information sought is a
5. actual performances matter of public record. This is especially true in
6. fictitious characters created by a case the persons who are invoking the right to
performer privacy are public officers and the matter involved
7. phrases and other things associated with is of public concern.
an individual.
However, if the matter sought to be revealed does
(2) INTRUSION not involve anything of public concern, there can be
a violation or the right to privacy. (Aquino, Torts
Q: What is intrusion? and Damages, 2005, p.438)
A: Consists in the intrusion upon the plaintiff’s (3) PUBLIC DISCLOSURE OF PRIVATE FACTS
solitude or seclusion.
It includes: Q: What is public disclosure of private facts?
1. prying into the privacy of one’s home;
A: Consists of a cause of action in publicity, of a
highly objectionable kind, given to private
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TORTS AND DAMAGES
information about the plaintiff, even though it is Q: Is a governmental agency or officer tasked with,
true and no action would lie for defamation.(Melvin and acting in, the discharge of public duties vested
v. Reid, 112 Cal.App. 285, 297 P. 91) with a right to privacy?
Q: What is violated in public disclosure of private A: No, said right belongs only to individuals acting in
facts? a private capacity.(Aquino, Torts and Damages,
2005, p. 452)
A: The interest sought to be protected is the right
to be free from unwarranted publicity, from the (4) FALSE LIGHT IN THE PUBLIC EYE
wrongful publicizing of the private affairs and
activities of an individual which are outside the Q: What is false light in the public eye?
realm of legitimate concern.(Aquino, Torts and
Damages, 2005, p.450, citing Ayer Productions, Ltd. A: Consists of publicity which places the plaintiff in
Pty., et.al vs Hon. Ignacio Capulong, et. al. GR No. L- false light in the public eye. (Norman v. City of Las
82380) Vegas, 64 Nev. 38, 177 P.2d 442)
Q: What are the elements of public disclosure of Q: What is the interest to be protected in this tort?
private facts?
A: The interest to be protected in this tort is the
A: interest of the individual in not being made to
1. there must be a public disclosure; appear before the public in an objectionable false
2. the facts disclosed must be a private fact; light or false position.
3. the matter be one which would be offensive
and objectionable to a reasonable person of Q: How is false light in the public eye different
ordinary sensibilities. from defamation?
Q: Who is a “public figure”? A: In false light, the gravamen of the claim is not
reputational harm but rather the embarrassment of
A: a person who, by his accomplishments, fame or a person in being made into something he is not.
mode of living, or by adopting a profession or
calling which gives the public a legitimate interest in Publication in defamation is satisfied if a letter is
his doings, his affairs, and his character, has sent to a third person; while in false light cases, the
become a ‘public personage’ statement should be actually made public.
Q: Is it a tortuous conduct for one to publish facts In defamation, what is published lowers the esteem
derived from official proceedings? in which the plaintiff is held. In false light cases, the
defendant may still be held liable even if the
A: If the facts published are not declared by law to statements tell something good about the plaintiff.
be confidential, it is not tortuous.(Aquino, Torts and
Damages, 2005, p.452) F. MALICIOUS PROSECUTION
Note: The rule however admits certain exceptions. Q: What is a tort action for malicious prosecution?
Thus, Article 357 of the Revised Penal Code
prohibits publication of certain acts referred to in A: It is an action for damages brought by one
the course of official proceedings. It punishes “any against another whom a criminal prosecution, civil
reporter, editor, or manager of a newspaper, daily suit, or other legal proceedings has been instituted
or magazine, who shall publish facts connected with maliciously and without probable cause, after the
private life of another and offensive to the honor, termination of such prosecution, suit or proceeding
virtue, and reputation of said person, even though in favor of defendant therein.
said publication be made in connection with or
under the pretext that it is necessary in the Note: Malicious prosecution, both in criminal and civil
narration of any judicial or administrative cases, requires the elements of: (1) malice, and (2)
proceedings wherein such facts have been absence of probable cause. (Yasona v. De Ramos, 440
mentioned.” (Aquino, Torts and Damages, 2009, p. SCRA 154)
452)
RE: Malice: The presence of probable cause signifies,
as a legal consequence, the absence of malice.The
absence of malice, therefore, involves good faith on
535
the part of the defendant. This good faith may even be Q: When is an action for malicious prosecution
based on mistake of law. premature?
Re: Acquittal: Acquittal presupposes that a criminal

A: If the action filed by a party is still pending trial,
information is filed on court and final judgment is
the filing by the defendant of an action based on
rendered dismissing the case against the accused. It is
malicious prosecution anchored on the first case is
not enough that the plaintiff is discharged on a writ of
habeas corpus and granted bail. Such discharge is not premature. Its dismissal is in order. (Pineda, Torts
considered the termination of the action contemplated and Damages, 2009, p. 255. citing Cabacungan v.
to warrant the institution of a malicious prosecution Corrales, 95 PHIL 919)
suit against those responsible for the filing of the
information against him. Q: Is there liability for malicious prosecution in
case a suit is unsuccessful?
Nevertheless, it is believed that prior “acquittal” may
include dismissal by the prosecutor after preliminary A: None. The mere filing of a suit does not render
investigation. the plaintiff liable for malicious prosecution should
he be unsuccessful. Persons should have free resort
Q: What are the elements of malicious to the courts. The law does not impose a penalty on
prosecution? the right to litigate.(Pineda, Torts and Damages,
2009, p.255)
A: In criminal cases:
1. the fact of the prosecution and the Note: However, the repeated filing of a complaint all
further fact that the defendant was of which were dismissed shows malicious prosecution
himself the prosecutor, and that the entitling the injured party to an award of moral
action was terminated with an acquittal; damages. (Pineda, Torts and Damages, 2009, p.256,
2. that in bringing the action, the prosecutor citing Hawpia v. CA, 20 SCRA 536)
acted without probable cause;
3. the prosecutor was actuated or impelled G. DEFAMATION
by legal malice. (Yasona v. Ramos, G.R.
156339, Oct. 6, 2004) Q: What is defamation and what does it cover?
Note: The term “prosecutor” includes the complainant A:Defamation is tarnishing the reputation of
who initiated the case; the prosecutor himself; any someone; It is a public and malicious imputation of
other public officer authorized to file and prosecute a crime, or of a vice or defect, real or imaginary, or
the criminal case. any act, omission, condition, status, or
circumstance tending to cause the dishonor,
Mere witnesses are not included, but are liable for discredit, or contempt of a natural or juridical
false testimony or perjury for their falsehoods. person, or to blacken the memory of one who is
dead. (Art. 353, RPC). It has two
To constitute malicious prosecution, there must be varieties, slander and libel.
proof that the prosecution was prompted by a sinister
design to vex and humiliate a person, and that it was Note: Actual damages need not be proved, at least
initiated deliberately, knowing that the charges were where the publication is libelous per se, or where the
false and groundless. (Pineda, Torts and Damages, amount of damages is more or less nominal.
2009, p.254)
Q: What is the reason for liability for defamation?
In civil cases:
1. the defendant filed a civil action against the
A: The liability imposed for defamation is brought
plaintiff previously;
about by the desire to protect the reputation of
2. the action was dismissed for clear lack of
every individual. The enjoyment of reputation is
merit or for being baseless, unfounded, and
malicious; one of those rights necessary to human society that
3. the defendant who filed the previous underlie the whole scheme of civilization. It is as
complaint as plaintiff was motivated by ill- much a constitutional right as the possession of life,
will or sinister design; liberty or property. (Worcester v.Ocampo, 22 Phil
4. the present plaintiff suffered injury or 42)
damage by reason of the previous complaint
filed against him. Q: What are the requisites before one can be held
(Pineda, Torts and Damages, 2009, p.254-255) liable for defamatory imputations?
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A: publication and evince a desire to repair the wrong

1. It must be defamatory; occasioned thereby.
2. It must be malicious;
3. It must be given in publicity; and Q: What is the effect if the publication was by
4. The victim must be identifiable. (Alonzo v. reason of an honest mistake?
Court of Appeals, 241 SCRA 51)
A: It only serves to mitigate liability where the
Note: “Publication” is the communication of the article is libelous per se.
defamatory matter to some third person or persons.
(B) PRIVILEGE
Q: What is libel?
Q: If the defamatory imputations were made in a
A: it is a defamation committed by means of privileged communication, is there liability
writing, printing, lithography, engraving, radio, therefor?
phonograph, painting or theatrical or
cinematographic exhibition, or any similar means. A: None. An absolutely privileged communication is
one for which, by reason of the occasion on which it
Q: What is slander? is made, no remedy is provided for the damages in
a civil action for slander or libel.
A: An oral defamation.
H. FRAUD OR MISREPRESENTATION (FORMERLY
Q: What is slander by deed? DECEIT)
A: It is a crime committed by any person who Q: What are the elements of misrepresentation in
performs an act that costs dishonor, discredit or torts cases?
contempt upon the offended party in the presence
of other person or persons. A:
1. Affirmative misrepresentation of a material
Q: Is the imputation of criminal intention libelous? fact;
2. Defendant knew that statement being made
A: No, because intent to commit a crime is not a was false;
violation of law. 3. Intent;
4. Causation;
(1) DEFENSES 5. Justifiable reliance; and
6. Damages
(A) ABSENCE OF ELEMENTS
I. SEDUCTION
Q: Is the allegation that the offender merely
expresses his opinion or belief a defense in Q: When is a defendant liable for damages in case
defamation cases? of seduction?
A:In order to escape criminal responsibility, it is not A: Seduction, by itself, is an act which is contrary to
enough for the offender to say that he expresses morals, good customs and public policy. The
therein no more than his opinion or belief. The defendant is liable if he employed deceit,
communication must be made in the performance enticement, superior power or abuse of confidence
of a “legal, moral, or social duty.” in successfully having sexual intercourse with
another. (Aquino, Torts and Damages, 2005, p.364)
Q: What is retraction and what is its effect as
regards liability for defamation? Note: There is liability even if there is no breach of
promise to marry.
A: When a periodical gives currency, whether
innocently or otherwise, to a false and defamatory Q: What is included in “sexual assault”?
statement concerning any person, it is under both a
legal and moral duty to check the propagation of A: The defendant would be liable for all forms of
such statement as soon as practicable by publishing sexual assault. These include rape, acts of
a retraction. lasciviousness and seduction.
Retraction may mitigate the damages provided that Note: Gender is immaterial in seduction and sexual
it contains an admission of the falsity of the libelous assault.
537
J. UNJUST DISMISSAL Q: What is alienation of affection?
Q: What is the rule on dismissal of employees? A: This consists of depriving one spouse of the
affection, society, companionship and comfort of
A: It is a basic rule that an employer has a right to the other. (Aquino, Torts and Damages, 2005,
dismiss an employee in the manner and on the p.480)
grounds provided for under the NCC. If the
dismissal is for a valid cause, his dismissal is Note: The Family Code imposes on the spouses the
consistent with the employer’s right to protect his obligation to live together, observe mutual love,
interest in seeing to it that his employees are respect and fidelity, and render mutual help and
performing their jobs with honesty, integrity and support. (Article 68) Interference with such may result
good faith. (Aquino Torts and Damages, 2005, in the tort liability of alienation of affection.
p.375, citing Marilyn Bernardo v. NLRC, Mar. 15,
1996) The gist of the tort is an interference with one spouse’s
mental attitude toward the other and the conjugal
kindness of marital relations resulting in some actual
However, such exercise of the right to terminate
conduct which materially affects it.
must be consistent with the general principles
provided for under Articles 19 and 21 of the New
Q: In general, what is the scope of the tort
Civil Code. If there is non-compliance with said
‘alienation of affections’?
provisions, the employer may be held liable for
damages. The right to dismiss an employee should
A: It extends to all cases of wrongful interference in
not be confused with the manner in which the right
the family affairs of others whereby one spouse is
is exercised and the effects flowing therefrom. If
induced to leave the other spouse or to conduct
the dismissal is done anti-socially or oppressively
himself or herself in a manner that the comfort of
then the employer should be deemed to have
married life is destroyed. (Thomas M. Cooley and D.
violated Art. 1701, NCC which prohibits acts of
Avery Haggard, Treatise on the Law of Torts, Vol. 2,
oppression by either capital or labor against the
1932 Ed., p.6)
other, and Art. 21. (Quisaba v. Sta. Ines-Melale
Veneer and Plywood, Inc. ,Aug. 30, 1974)
Q: Who may be liable for alienation of affections?
An employer may be held liable for damages if the
A: The defendant who purposely entices the spouse
manner of dismissing the employee is contrary to
of another, to alienate his or her affections with his
morals, good customs and public policy. This may
or her spouse, even if there are no sexual intimacies
be done by false imputation of misdeed to justify
is liable for damages under this article. Likewise, a
dismissal or any similar manner of dismissal which
person who prevented the reconciliation of spouses
is done abusively. (Globe Mackay Cable & Radio
after their separation is liable for alienation of
Corp. v. Court of Appeals, Aug. 25, 1989)
affections.
Note: It is not necessary that there is adultery or the
C. INTERFERENCE WITH RELATIONS spouse is deprived of household services.
1. GENERAL Q: What are some cases where there is no tort

liability for alienation of affections?
A. CONCEPT
A:
B. KINDS 1. A woman cannot be made liable for alienation
of the affections of the husband (of another
Q: What are the four kinds of interference? woman) for being merely the object of the
affections of said husband. To be liable, she
A: Interference with: must have done some active acts calculated to
1. Family relations; alienate the affections of the husband. She
2. Social relations; must, in a sense, be the “pursuer, not merely
3. Economic relations; and the pursued”;
4. Political relations. 2. A prostitute is not liable for alienation of
affections of the husband for having sexual
2. FAMILY RELATIONS intimacies with him on a chance occasion.
3. When there is no more affection to alienate.
A. ALIENATION OF AFFECTION
538 CIVIL LAW TEAM

TORTS AND DAMAGES
Q: May parents be liable for alienation of Damages, 2009, p.249, citing People v. Bondoc, .GR.
affections? No. 22573-R, Apr. 21, 1959)
A: Yes. However, parents are presumed to act for A. MEDDLING WITH OR DISTURBING FAMILY
the best interest of their child. The law recognizes RELATIONS
the right of a parent to advise his/her child and
when such advise is given in good faith, the act, See Interference with family relations.
even if it results in separation, does not give the
injured party a right of action. B. INTRIGUING TO CAUSE ANOTHER TO BE
ALIENATED FROM HIS FRIENDS
In such case, malice must be established and it
must appear that the defendant’s acts were the Q: Who may be held liable for the tort intriguing to
controlling cause of the loss of affection. (Aquino, cause another to be alienated from his friends?
Torts and Damages, 2005, p.480)
A: A person who committed affirmative acts
B. LOSS OF CONSORTIUM intended to alienate the existing friendship of one
with his friends is liable for damages. (Pineda, Torts
Q: What is loss of consortium? and Damages, 2009, p.352)
A: A spouse has a legal obligation to live with his or 4. ECONOMIC RELATIONS

her spouse. If a spouse does not perform his or her
duty to the other, he may be held liable for A. INTERFERENCE WITH CONTRACTUAL
damages for such omission because the same is RELATIONS
contrary to law, morals and good customs.
Moral damages were awarded because of the Q: What is interference with contract?
wife’s refusal to perform her wifely duties, her
denial of consortium and desertion of her husband. A: Any third person who induces another to violate
Her acts constitute a willful infliction of injury upon his contract shall be liable for damages to the other
her husband’s feelings in a manner contrary to contracting parties. (Art.1314, NCC)
morals, good customs or public policy. (Tenchaves
v. Escaño, G.R. No. L-19671, July 26, 1966) Q: Why is interference with contract tortuous?
C. CRIMINAL CONVERSATION (ADULTERY) A: Such interference is tortious because it violates

the right of the contracting parties to fulfill the
Q: When is adultery committed? contract and to have it fulfilled, to reap the profits
resulting therefrom, and to compel the
A: Adultery is committed by any married woman performance by the other party. (45 Am. Jur. 2d
who shall have sexual intercourse with a man not 280-281)
her husband and by the man who has carnal
knowledge of her knowing her to be married, even Q: What are the elements of interference to
if the marriage was subsequently declared void. contractual relation?
(Art. 333, RPC)
A:
Note: Concubinage is committed by a husband who 1. existence of a valid contract;
shall: 2. knowledge on the part of the third person of
1. keep a mistress in the conjugal dwelling; the existence of the contract;
2. have sexual intercourse with her, under 3. interference of the third person without legal
scandalous circumstances, with a woman justification or excuse. (So Ping Bun v. Court of
not his wife; or Appeals, G.R. No. 120554, Sept.21, 1999)
3. cohabit with her in any other place. (Art.
334, RPC) Q: What is interference with prospective
advantage?
Liability for adultery or concubinage based on the law
on torts: not only moral damages but also for other
appropriate damages.
A: If there is no contract yet and the defendant is
only being sued for inducing another not to enter
There is no legal basis for the imposition of moral into a contract with the plaintiff, the tort
damages in case of Bigamy. (Pineda, Torts and committed is appropriately called interference with
prospective advantage.
539
Q: What is the rule regarding the extent of ordinary purchaser could avoid mistake by the
recovery against defendant found guilty of exercise of this special knowledge. (U.S. v. Manuel,
interference with contractual relations? 7 Phil. 221)
A: Such defendant cannot be held liable for more Q: What is included in unfair competition?
than the amount for which the party who induced
to break the contract can be held liable. It would A: Art. 28, NCC provides for unfair competition
seem that the rule is consistent with the provisions which includes:
of Article 2202 of the New Civil Code only if the 1. Passing off or disparagement of products
contracting party who was induced to break the 2. Interference with contractual relations
contract was in bad faith. 3. Interference with prospective advantage
4. Fraudulent misappropriation against a
However, when there is good faith, the party who competition
breached the contract is only liable for 5. Monopolies and predatory pricing
consequences that can be foreseen. (Art. 2201,
NCC) Q: What is predatory pricing?
Q: What is the nature of the liability of the A: It is a practice of selling below costs in the short
intermeddler? run in the hope of obtaining monopoly gains later,
after driving the competition from the market.
A: The liability of the intermeddler is solidary
because the former has committed a tortuous act 5. POLITICAL RELATIONS
or quasi-delict where liability is solidary. (Art. 2941,
NCC) A. VIOLATION OF RIGHT TO SUFFRAGE
(ART. 32, NCC)
Q: Is malice essential to make the intermeddler
liable? Q: What is the rule in case of violation of the right
to suffrage?
A: GR: Yes.
A: Under Article 32 of the New Civil Code, any
XPN: If the intention of the intermeddler is public officer or employee, or any private
honest and laudable such as when the individual, who directly or indirectly obstructs,
interference is intended to protect the defeats, violates or in any manner impedes or
contracting party he is intermeddling for, from impairs any of the following rights and liberties of
danger to his life or property, he should not be another person shall be liable to the latter for
made liable for damages for the breach of the damages:
contract. xxx(5) Freedom of suffrage;
B. UNFAIR COMPETITION 6. DEFENSES

A. ABSENCE OF ELEMENT
Q: What is unfair competition?
Q: What is the defense on interference?
A: It consists in employing deception or any other
means contrary to good faith by which any person A: The defendants are free from liability if they can
shall pass off the goods manufactured by him or in prove that at the time of the commission, the
which he deals, or his business, or services for those plaintiff knew of the act of interference or
of the one having established goodwill, or omission.
committing any acts calculated to produce such
result. (Second par., Sec. 29, R.A. No. 166) B. PRIVILEGE
Q: What is the true test of unfair competition? Q: What is the defense of privilege in torts cases?
A: The true test of unfair competition is whether A: To say that an act is “privileged” connotes that
certain goods have been intentionally clothed with the actor owes no legal duty to refrain from such
an appearance which is likely to deceive the contact.
ordinary purchaser exercising ordinary care, and
not whether a certain limited class of purchasers Q: Distinguish consensual and non-consensual
with special knowledge not possessed by the privilege.
540 CIVIL LAW TEAM

TORTS AND DAMAGES
A: Conduct that injures another does not make the

A: Consensual privileges depend on the plaintiff actor liable to the other, even though the other has
agreeing to the defendant’s otherwise tortious act. not consented to it if:
On the other hand, nonconsensual privileges shield 1. an emergency makes it necessary or
the defendant from liability for otherwise tortious apparently necessary to act before there
conduct even if the plaintiff objects to the is opportunity to obtain consent or one
defendant’s conduct. empowered to consent for him, and
2. the actor has no reason to believe that
1. CONSENT the other would decline.
Q: When is consent a defense in torts cases and Q: What is the rule if consent is procured by fraud
what is its basis? or duress?
A: Typically, one cannot hold another liable in tort A: Consent will not shield the defendant from
for actions to which one has consented. This is liability if it is procured by means of fraud or duress.
frequently summarized by the phrase "volenti non
fit injuria" ("to a willing person, no injury is done" Note: Courts invalidate consent procured by duress
or "no injury is done to a person who consents"). It when defendants threaten the plaintiff or plaintiff’s
operates when the claimant either expressly or loved ones with physical harm.
implicitly consents to the risk of loss or damage.
SELF-DEFENSE
Note: Consent is willingness in fact for the conduct to
occur. Q: Why is self-defense a defense in tort cases?
Q: What are some rules in determining whether A: An actor is privileged to use reasonable force,
consent is present as a defense? not intended or likely to cause death or serious
bodily harm, to defend himself against unprivileged
A: harmful contract which he reasonably believes that
1. It need not be communicated to the another is about to inflict.
defendant.
2. In determining whether plaintiff consented, Q: When is an actor privileged to defend himself?
defendant must reasonably interpret her overt
act and manifestations of her feelings. A: An actor is privileged to defend himself against
another by force likely to cause death or serious
Note: The defendant’s subjective state is based bodily harm when he reasonably believes that:
on the plaintiff’s objective actions. 1. the other is about to inflict upon him an
intentional contact and
3. Plaintiff has burden of proof to show intent to 2. he is thereby put in peril of death or
commit the act, lack of consent, and harm. serious bodily harm which can safely be
prevented only by immediate use of such
Q: Is consent a defense if the plaintiff or offended force.
party is a minor?
Note: Court requires objective and subjective belief
A: No.For one to surrender the right to be free from (reasonable person could have seen the situation as
intentional interference by others, one must have dangerous and subject believed that he was in
the mental capacity to consent. Defendant can be danger).
liable despite the fact that the plaintiff was
subjectively willing and communicated that Q: When does the privilege of self-defense exist?
willingness to the defendant.
A: The privilege exists even if the actor believes he
Note: In common law countries, most courts have can avoid defending himself by:
applied statutory rape statutes in civil cases regardless 1. retreating within his dwelling place, or
of proof that the plaintiff was able to understand the 2. permitting the other to intrude upon his
consequences of her act and consent. dwelling place, or
3. abandoning an attempt to effect a lawful
Q: When is consent not necessary in order to arrest.
absolve one from the injuries he caused to
another? Q: When does the privilege NOT exist?
541
A:The privilege does not exist if the actor believes 2. the actor reasonably believes that the
that he can avoid defending himself by: intrusion can be prevented only by the
1. retreating in any place other than his force used; and
dwelling place or 3. the actor has first requested the other to
2. relinquishing the exercise of any right desist or the actor believes such request
other than his privilege to prevent will be useless or substantial harm will be
intrusion onto his dwelling place. done before it can be made.
Q: May the actor use any means in order to defend Note: The intentional infliction which is intended or
himself? likely to cause death or serious bodily harm, for the
purpose of preventing or terminating the other’s
A: The actor is not privileged to use any means of intrusion upon the actor’s possession of land, is
self-defense which is intended or likely to cause a privileged only if the actor reasonably believes that the
bodily harm in excess of that which the actor intruder is likely to cause death or serious bodily harm.
correctly or reasonably believes to be necessary for
his protection. Q: The owner or lawful possessor of a thing has
the right to exclude any person from the
Note: A party claiming self-defense must prove not enjoyment and disposal thereof. For this purpose,
only that he acted honestly in using force, but that his he may use such force as may be reasonably
fears were reasonable under the circumstances, and necessary to repel or prevent an actual or
the means of self-defense were reasonable. threatened unlawful physical invasion or
usurpation of his property. (Art. 429, NCC)
DEFENSE OF OTHERS
Q: Is the owner’s right provided for in the said
Q: Is a person protecting a total stranger liable? article an absolute right?
A: The self-defense privilege extends to protecting A: No. In the following instances, this right may not
total strangers as well. be invoked by the owner:
1. One may sacrifice the personal property
Q: May the intervener use any means or amount of another to save his life or the lives of
of force in defending the other? his fellows;
2. One is privileged by necessity to trespass
A: No. The force that may be used by an intervener when there is a serious threat to life and
to repel an attack on another is measured by the no other lifesaving option is available; and
force that the other could lawfully use. 3. The owner of property may not eject a
trespasser if the trespasser requires entry
Q: What is the consequence of a mistake on the to protest himself and his property from
part of the intervener? harm.
A: If the intervener is mistaken, even reasonably Note: In these instances, intrusion is said to be
mistaken, the privilege is unavailable if it would not privileged.
be available to the person to be protected.
The necessity privilege to enter the land of another in
Note: The intervener’s mistake need only be order to avoid serious harm is coupled with an
reasonable; there is no need to show that the victim obligation on the part of the entrant to pay for
also had the privilege to defend himself. whatever harm he caused.
3. DEFENSE OF PROPERTY MISCELLANEOUS PRIVILEGES
Q: Up to what extent is an actor privileged to Q: What are the miscellaneous or other privileges
defend his property from intrusions? in connection with necessity as a defense?
A: An actor is privileged to use reasonable force, A:

not intended or likely to cause death or serious 1. To at least some extent, teachers and parents
bodily harm, to prevent or terminate another’s are exempt from battery claims brought on
intrusion upon the actor’s land if: behalf of children they have physically
1. the intrusion is not privileged; disciplined;
2. Other privileges include those relating to the
arrest of lawbreakers and the prevention of
542 CIVIL LAW TEAM

TORTS AND DAMAGES
crime, the enforcement of military orders, and the injury to the plaintiff, he will be liable even if
the recapture of land and possessions. there was a fortuitous event.
Note: The reasonableness of the actor’s perception of If upon the happening of a fortuitous event of an
the need to use force, as well as the reasonableness of act of God, there concurs a corresponding fraud,
the harm actually inflicted, are typically the negligence, delay or violation or contravention of
touchstones upon which the availability of the the tenor of the obligation as provided for in Article
privilege turns. 1170, NCC, which results in loss or damage, the
obligor cannot escape liability.
5. AUTHORITY OF LAW
VIII. NEGLIGENCE
C. PRESCRIPTION
A. CONCEPT
See Defenses; Prescription
Q: What is negligence?
D. WAIVER
A: The omission of that degree of diligence which is
See Persons: Waiver of Rights required by the nature of the obligation and
corresponding to the circumstances of the persons,
E. FORCE MAJEURE time and place. (Art. 1173, NCC)
Q: What are the two general causes of fortuitous Q: What is the test of negligence?
events?
A: The test is: Would a prudent man, in the position
A: of the tortfeasor, foresee harm to the person
1. By nature, such as earthquakes, storms, floods, injured as a reasonable consequence of the course
epidemics, fires, etc.; and about to be pursued? If so, the law imposes a duty
2. By the act of man, such as an armed invasion, on the actor to take precaution against its
attack by bandits, governmental prohibitions, mischievous results, and failure to do so constitutes
robbery, etc. negligence. (Picart v. Smith, 37 Phil 809)
Q: What are the essential characteristics of Q: What are the degrees of negligence?
fortuitous event? Distinguish.
A: A:
1. The cause of the unforeseen and unexpected 1. Simple negligence – want of slight care and
occurrence, or of the failure of the debtor to diligence only
comply with his obligation, must be
independent of the human will; 2. Gross negligence – there is a glaringly obvious
2. It must be impossible to foresee the event want of diligence and implies conscious
which constitutes the casofortuito, or if it can indifference to consequences (Amadeo v.Rio Y
be foreseen, it must be impossible to avoid; Olabarrieta, Inc., 95 Phil 33);
3. The occurrence must be such as to render it
impossible for the debtor to fulfill his
– pursuing a course of conduct which would
obligation in a normal manner; and
probably and naturally result to injury.
4. The obligor must be free from any
(Marinduque Iron Mines Agents, Inc. v. The
participation in the aggravation of the injury
Workmen’s Compensation Commission, 99 Phil
resulting to the creditor.
480)
Q: When is there liability for damages caused by
Q: What are the circumstances to be considered in
fortuitous events?
determining whether an act is negligent?
A: As an exception to the general rule that a person
A:
is not liable if the cause of the damage was an
1. Person Exposed to the Risk – A higher degree
event which could not be foreseen or which though
of diligence is required if the person involved is
foreseen was inevitable (fortuitous), if the
a child.
negligence of the defendant concurred with the
fortuitous event or resulted in the aggravation of
543
2. Emergency – The actor confronted with an Q: What is contributory negligence?

emergency is not to be held up to the standard
of conduct normally applied to an individual A: It is conduct on the part of the injured party,
who is in no such situation. contributing as a legal cause to the harm he has
suffered, which falls below the standard to which
3. Social Value or Utility of Action – Any act he is required to conform for his own protection
subjecting an innocent person to unnecessary (Valenzuela v. CA, G.R. No. 115024, Feb. 7, 1996).
risk is a negligent act if the risk outweighs the
advantage accruing to the actor and even to Q: Are children below nine (9) years capable of
the innocent person himself. contributory negligence?
4. Time of the day – May affect the diligence A: No. A child under nine (9) years of age is
required of the actor (Art. 1173); e.g. a driver conclusively presumed incapable of contributory
is required to exercise more prudence when negligence as a matter of law. (Jarco Marketing
driving at night Corp. v. Court of Appeals, 321 SCRA 377)
5. Gravity of the Harm to be Avoided – Even if the Q: What is the doctrine of comparative
odds that an injury will result are not high, negligence?
harm may still be considered foreseeable if the
gravity of harm to be avoided is great. A: The negligence of both the plaintiff and the
defendant are compared for the purpose of
6. Alternative Cause of Action – If the alternative reaching an equitable apportionment of their
presented to the actor is too costly, the harm respective liabilities for the damages caused and
that may result may still be considered suffered by the plaintiff. (Pineda, Torts and
unforeseeable to a reasonable man. More so if Damages, 2009, p.51)
there is no alternative thereto.
Note: The relative degree of negligence of the parties
7. Place – A man who should occasion to is considered in determining whether, and to what
discharge a gun on an open and extensive degree, either should be responsible for his negligence
marsh, or in a forest would be required to use (apportionment of damages).
less circumspection and care, then if he were
to do the same thing in an inhabited town, Q: Can the principle of contributory negligence
village or city. apply in criminal cases?
8. Violation of Rules and Statutes A: No. The principle of contributory negligence

a. Statutes cannot be used as defense in criminal cases through
b. Administrative Rules reckless imprudence because one cannot allege the
c. Private Rules of Conduct negligence of another to evade the effects of his
own negligence. (People v. Quinones, 44 O.G. 1520;
9. Practice and Custom – A practice which is People v. Orbeto, C.A. 430 O.G. 3173)
dangerous to human life cannot ripen into a
custom which will protect anyone who follows B. GOOD FATHER OF A FAMILY OR REASONABLY
it (Yamada v. Manila Railroad, G.R. No.10073, PRUDENT MAN
Dec. 24, 1915).
Q: What is the concept of a good father of the
Q: Will intoxication signify negligence? family (pater familias)?
A: GR: Mere intoxication is not negligence per se A: The Supreme Court described a good father of a
nor establishes want of ordinary care. But it may be family by first stating who is not. He is not and is
one of the circumstances to be considered to prove not supposed to be omniscient of the future;
negligence. (Wright v. Manila Electric Railroad & rather, he is one who takes precautions against any
Light Co., GR No. L-7760, Oct. 1, 1914) harm when there is something before him to
suggest or warn him of the danger or to foresee it
XPN: It is presumed that a person driving a (Picart v. Smith, G.R. No. L-12406, Mar. 15, 1918).
motor vehicle is negligent if at the time of the
mishap, he was violating traffic regulations. (Art. Note: A good father of a family is likewise referred to
2185) as the reasonable man, man of ordinary intelligence
and prudence, or ordinary reasonable prudent man. In
544 CIVIL LAW TEAM

TORTS AND DAMAGES
English law, he is sometimes referred to as the man on

top of a Clapham omnibus. (Aquino, 2005) Nevertheless, absence of negligence does not
absolutely excuse the child from liability, as his
Q: Does the standard of conduct applied to adults properties, if any, can be held subsidiarily liable. Nor
apply equally to children? will such absence of negligence excuse the child’s
parent’s vicarious liability.
A: GR: The action of a child will not necessarily be
judged according to the standard of an adult. Q: What is “diligence before the fact”?
XPN: If the minor is mature enough to A: The conduct that should be examined in
understand and appreciate the nature and negligence cases is prior conduct or conduct prior
consequences of his actions. In such a case, he to the injury that resulted or, in proper cases, the
shall be considered to have been negligent. aggravation thereof.
Note: R.A. 9344 (Juvenile Justice and Welfare Act of

2006): 15 years of age or younger – age of absolute
irresponsibility.
C. STANDARD OF CARE
STANDARD OF CONDUCT or DEGREE OF CARE REQUIRED

In General
If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of
a good father of a family shall be required (Article 1173, 2nd paragraph, NCC).
Note: Diligence of a good father of a family - bonos pater familias - A reasonable man is deemed to have knowledge of the facts that a
man should be expected to know based on ordinary human experience. (PNR v. IAC, GR No. 7054, Jan. 22, 1993)
Persons who have Physical Disability
GR: A weak or accident prone person must come up to the standard of a reasonable man, otherwise, he will be
considered as negligent.
XPN: If the defect amounts to a real disability, the standard of conduct is that of a reasonable person under like
disability.
Experts and Professionals
GR: They should exhibit the case and skill of one who is ordinarily skilled in the particular field that he is in.
Note: This rule does not apply solely or exclusively to professionals who have undergone formal education.
XPN: When the activity, by its very nature, requires the exercise of a higher degree of diligence
e.g. Banks; Common carriers
Insane Persons
The same rule applies under the New Civil Code. The insanity of a person does not excuse him or his guardian from
liability based on quasi-delict. (Arts. 2180 and 2182, NCC). This means that the act or omission of the person suffering
from mental defect will be judged using the standard test of a reasonable man.
The bases for holding a permanently insane person liable for his torts are as follows:
Where one of two innocent person must suffer a loss it should be borne by the one who occasioned it;
To induce those interested in the estate of the insane person (if he has one) to restrain and control him; and
The fear that an insanity defense would lead to false claims of insanity to avoid liability. (Bruenig v. American
Family Insurance Co., 173 N.W. 2d 619[1970]).
Note: Under the RPC, an insane person is exempt from criminal liability. However, by express provision of law, there may be civil liability
even when the actor is exempt from criminal liability. An insane person is still liable with his property for the consequences of his acts,
though they performed unwittingly. (US v. Baggay, Jr. G.R. No. 6706, Sept. 1, 1911)
Employers
That degree of care as mandated by the Labor Code or other mandatory provisions for proper maintenance of the work
place or adequate facilities to ensure the safety of the employees.
Note: Failure of the employer to comply with mandatory provisions may be considered negligence per se.
Employees
Employees are bound to exercise due care in the performance of their functions for the employers. Liability may be
545
based on negligence committed while in the performance of the duties of the employee (Araneta v. De Joya, G.R. No.
83491, Aug. 27, 1990)
Owners, Proprietors and Possessors of Property
GR: The owner has no duty to take reasonable care towards a trespasser for his protection or even to protect him from
concealed danger.
XPN:
1. Visitors
2. Tolerated Possession
3. Doctrine of Attractive Nuisance
4. State of Necessity
Doctors
If a General Practitioner – Ordinary care and diligence in the application of his knowledge and skill in the practice of his
profession
If a Specialist – The legal duty to the patient is generally considered to be that of an average physician.
Lawyers
An attorney is bound to exercise only a reasonable degree of care and skill, having reference to the business he
undertakes to do (Adarne v. Aldaba, Adm. Case No. 80, June 27, 1978).
1. NCC, ART. 1173

2. EMERGENCY RULE
Q: What is the general standard of diligence
provided for under the NCC? Q: What is the emergency rule?
A: Bonus Pater Familias or that of a good father of a A: One who suddenly finds himself in a place of
family. danger, and is required to act without time to
consider the best means that may be adopted to
Note: If the law or contract does not state the avoid the impending danger, is not guilty of
diligencewhich is to be observed in the performance, negligence, if he fails to adopt what subsequently
that which is expected of a good father of a family and upon reflection may have been a better
shall be required. (Art. 1173 (2)) method, unless the emergency in which he finds
himself is brought about by his own negligence.(Mc
Q: What is the rule in case of fault or negligence of Kee v. IAC, 211 SCRA 519)
an obligor?
Note: Emergency rule exempts common carriers.
A: Art. 1173. The fault or negligence of the obligor D. UNREASONABLE RISK OF HARM
consists in the omission of that diligence which is
required by the nature of the obligation and Q: In determining whether a person has exposed
corresponds with the circumstances of the persons, himself to an unreasonable great risk, what must
of the time and of the place. When negligence be present?
shows bad faith, the provisions of Articles 1171 and
2201, paragraph 2, shall apply. A: Reasonableness, the elements of which are as
follows:
Note: Art. 1171. Responsibility arising from fraud is 3. Magnitude of the risk
demandable in all obligations. Any waiver of an action 4. Principal object
for future fraud is void. 5. Collateral object
6. Utility of the risk
Art. 2201. In contracts and quasi-contracts, the
7. Necessity of the risk
damages for which the obligor who acted in good faith
is liable shall be those that are the natural and
probable consequences of the breach of the
If the magnitude of the risk is very great and the
obligation, and which the parties have foreseen or principal object, very valuable, yet the value of the
could have reasonably foreseen at the time the collateral object and the great utility and necessity
obligation was constituted. of the risk counterbalanced those considerations,
the risk is made reasonable.(Prosser and Keeton,
In case of fraud, bad faith, malice or wanton attitude, Law of Torts, 1984 Ed., p.173, citing Terry,
the obligor shall be responsible for all damages which Negligence, 24 Harv. L. Rev. 40,42)
may be reasonably attributed to the non-performance
of the obligation.
546 CIVIL LAW TEAM

TORTS AND DAMAGES
Note: In the Philippines, the courts do not use any use thereof is indispensable in his
formula in determining if the defendant committed a occupation or business.
negligent act or omission. What appears to be the
norm is to give negligence a common sense, intuitive Note: Proof of possession of dangerous
interpretation.(Aquino, Torts and Damages, 2005, weapons or substances required.
p.44-45)
4. Article 1756. In case of death or injuries of
In the field of negligence, interests are to be balanced passengers, common carriers are
only in the sense that the purposes of the actor, the presumed to have been at fault or acted
nature of his act and the harm that may result from negligently, unless they prove that they
action or inaction are elements to be considered. observed extraordinary diligence
Some may not be considered depending on the
prescribed in Articles 1733 and 1755.
circumstances.
The following are circumstances to be considered:

2. RES IPSA LOQUITUR
1. Time Q: What does res ipsa loquitur mean?

2. Place
3. Emergency A: The thing speaks for itself. The fact of the
4. Gravity of harm to be avoided occurrence of an injury, taken with surrounding
5. Alternative course of action circumstances, may permit an inference or raise a
6. Social value or utility of activity presumption of negligence, or make out a plaintiff’s
7. Person exposed to the risk prima facie case, and present a question of fact for
(Aquino, Torts and Damages, 2005, p.46- defendant to meet with an explanation.
56)
Note: However, res ipsa loquitur is not a rule of
E. EVIDENCE substantive law and, as such, does not create nor
constitute an independent or separate ground of
F. PRESUMPTION OF NEGLIGENCE liability. Instead, it is considered as merely
evidentiary or in the nature of a procedural
1. LEGAL PROVISIONS rule.(Professional Services v.Agana, 513 SCRA 478)
Q: Discuss the provisions relative to Q: What are the requisites for the application of
presumptionof negligence. the doctrine of res ipsa loquitur?
A: Persons are generally presumed to have taken A:

ordinary care of his concerns.There are however 1. the accident was of such character as to
exceptions when negligence is presumed. warrant an inference that it would not have
1. Article 2184. xxx. It is disputably happened except for defendant’s negligence;
presumed that a driver was negligent, if 2. the accident must have been caused by an
he had been found guilty of reckless agency or instrumentality within the exclusive
driving or violating traffic regulations at management or control of the person charged
least twice within the next preceding two with the negligence complained of;
months. Xxx 3. the accident must not have been due to any
voluntary action or contribution on the part of
2. Article 2185. Unless there is proof to the the person injured. (Windvalley Shipping Co.,
contrary, it is presumed that a person Ltd. Vs Court of Appeals, 342 SCRA 214)
driving a motor vehicle has been
negligent if at the time of the mishap, he Q: What are some cases where the doctrine was
was violating any traffic regulation. held to be inapplicable?
Note: Proof of traffic violation required. A:

1. Where there is direct proof of absence or
3. Article 2188. There is prima facie presence of negligence;
presumption of negligence on the part of 2. Where other causes, including the conduct of
the defendant if the death or injury the plaintiff and third persons, are not
results from his possession of dangerous sufficiently eliminated by the evidence;
weapons or substances, such as firearms 3. When one or more requisite is absent.
and poison, except when possession or (Aquino, Torts and Damages, 2005, p.149)
547
G. DEFENSES
Q: What is meant by volenti non fit injuria?
1. COMPLETE
A: This maxim means that “to which a person
Q: Why are they called “complete” defenses? assents is not esteemed in law as injury.” Stated
otherwise, “one is not legally injured if he has
A: They are called “complete” defenses because consented to the act complained of or was willing
they completely bar recovery as opposed to partial that it shall occur.” (Pineda, Torts and Damages,
defenses which only serve to mitigate liability. 2009, p76)
a. ABSENCE OF ELEMENT Q: What are the elements of the doctrine of

assumption of risk?
(1) DUE DILIGENCE
A:
See Rules on Degree or Standard of Care 1. The plaintiff must know that the risk is
present;
(2) ACTS OF PUBLIC OFFICERS 2. He must further understand its nature; and
3. His choice to incur it is free and voluntary.
b. ACCIDENT OR FORTUITOUS EVENT
Q: What are the two kinds of assumption of risk?
See Force Majeure or Fortuitous Event
A:
c. DAMNUM ABSQUE INJURIA 1. Express waiver of the right to recover;
2. Implied assumption
Q: What is meant by damnum absque injuria? a. Dangerous Conditions
b. Contractual Relations
A: There is no liability even if there is damage c. Dangerous Activities
because there was no injury. d. Defendant’s negligence
Note: There can be damage without injury in those Q: What is meant by:
instances in which the loss or harm was not the result 1. Dangerous conditions?
of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person A: A person who, knowing that he is exposed
alone. to a dangerous condition, voluntarily assumes
the risk of such dangerous condition may not
Q: What is injury? recover from the defendant who maintained
such dangerous condition.
A: it is the legal invasion of a legal right.
2. Contractual relations?
Q: What is damage?
A: There may be an implied assumption of risk
A: it is the loss, hurt or harm which results from the if the plaintiff entered into contractual
injury. relations with the defendant. By entering into
a relationship freely and voluntarily where the
Q: What is meant by damages? negligence of the defendant is obvious, the
plaintiff may be found to accept and consent
A: It refers to the recompense or compensation to it, and to undertake to look out for himself
awarded for the damage suffered. (So Ping Bun vs and to relieve the defendant of the duty.
Court of Appeals, et. al., 314 SCRA 751)
3. Dangerous activities?
Q: What is meant by the maxim quejure
suoutiturnullumdamnumfacit? A: A person who voluntarily participates in
dangerous activities assumes the risks which
A: One who exercises his legal right does no injury. are usually present in such activities.
d. AUTHORITY OF LAW 4. Defendant’s negligence?
e. ASSUMPTION OF RISK
548 CIVIL LAW TEAM

TORTS AND DAMAGES
A: When the plaintiff is aware of the risk Act also imposes liability for defective service
created by the defendant’s negligence, yet he “independently of fault”.
voluntarily proceed to encounter it, there is
implied assumption of risk on the part of the Q: Who are the persons made liable under the
plaintiff. Consumer Act?
f. LAST CLEAR CHANCE A: The strict liability under the Act is imposed on
the manufacturer.
See Last Clear Chance
Note: A manufacturer is any person who
g. PRESCRIPTION manufactures, assembles or processes consumer
products, except that if the goods are manufactured,
Q: What is the prescriptive period for quasi-delict? assembled or processed for another person who
attaches his own brand name to the consumer
A: Four (4) years reckoned from the date of the products, the latter shall be deemed the manufacturer.
accident. In case of imported products, the manufacturer’s
representatives or, in his absence, the importer shall
be deemed the manufacturer. (Art. 4, RA 7394)
h. WAIVER
Q: What are the kinds of defects in products?
See Persons: Waiver of Rights.
A:
i. DOUBLE RECOVERY
1. Manufacturing defect – defects resulting from
manufacture, construction, assembly and
Q: What is the rule against double recovery?
erection.
2. Design defect – defects resulting from design
A: The plaintiff cannot recover damages twice for
and formulas.
the same act or omission of the defendant. (Art.
3. Presentation defect – defects resulting from
2177, NCC)
handling, making up, presentation or packing
of the products.
A. GENERAL
4. Absence of Appropriate Warning – defect
resulting from the insufficient or inadequate
1. CONCEPT
information on the use and hazards of the
products.
B. PRODUCTS LIABILITY
Q: What are the defenses of a manufacturer and
Q: What is product and service liability?
supplier?
A: Product Liability is the law which governs the
A: Art. 97 of the Consumer Act provides thatthe
liability of manufacturers and sellers for damages
manufacturer shall not be liable when it evidences:
resulting from defective products. It is meant to
1. that it did not place the product on the
protect the consumers by providing safeguards
market;
when they purchase or use consumer products.
2. that although it did place the product on
(Aquino, T., Torts and Damages, 2005, p.758)
the market such product has no defect;
3. that the consumer or the third party is
1. MANUFACTURERS OR PROCESSORS
solely at fault.
a. ELEMENTS
On the other hand, Art. 99 of said Act provides that
the supplier shall not be liable when it is proven:
b. CONSUMER ACT
1. that there is no defect in the service
rendered;
Q: What is the Consumer Act (RA 7394)?
2. that the consumer or the third party is
solely at fault.
A: Consumer Act prohibits fraudulent sales acts or
practices. Chapter I of Title III expressly provides for
Q: What are the remedies of a consumer in the
protection against defective, unfair and
Consumer Act?
unconscionable sales acts and practices. The Act
likewise contains provisions imposing warranty
A: Sec. 60 of the law expressly provides that the
obligations on the manufacturers and sellers. This
court may grant injunction restraining the conduct
549
constituting the contravention of illegal sales act and who fails to exercise ordinary care to
and practices and/or actual damages and such prevent children from playing therewith
other orders as it thinks fit to redress injury to the or resorting thereto, is liable to a child of
person affected by such conduct. tender years who is injured thereby, even
if the child is technically a trespasser in
Q: What is nuisance? the premises.
A: A nuisance is any act, omission, establishment, 2. PUBLIC NUISANCE AND PRIVATE NUISANCE
business, condition of property, or any anything
else which: Q: What are the remedies against public
1) Injures or endangers the health or safety nuisances?
of others; or
2) Annoys or offends the senses; or A:
3) Shocks, defies or disregards decency or 1. Prosecution under the RPC or any local
morality; or ordinance; or
4) Obstructs or interferes with free passage 2. Civil action; or
of any public highway or street or any 3. Abatement, without judicial proceeding.
body of water; or (Article 699 of the New Civil Code)
5) Hinders or impairs the use of the
property. Q: Who may avail of remedies?
(Art. 694, NCC)
A:
1. NUISANCE PER SE AND NUISANCE PER 1. Public officers
ACCIDENCE 2. Private persons - if nuisance is specially
injurious to himself; the ff. steps
Q: What are the kinds of nuisance? must be made:
i. demand be first made upon owner or
A: possessor of the property to abate the
1. As to the number of persons affected: nuisance
a. Public (or common) – is one which affects ii. that such demand has been rejected
a community or neighborhood or iii. that the abatement be approved by the
considerable number of persons. district health officer and executed with
b. Private – is one which affects an the assistance of local police
individual or few persons only. iv. that the value of destruction does not
2. Other classification: exceed P3,000
a. Nuisance Per Se – that kind of nuisance
which is always a nuisance. By its nature, Q: What is a private nuisance?
it is always a nuisance all the time under
any circumstances regardless of location A: one that affects an individual or a limited
or surroundings. number of individuals only
b. Nuisance Per Accidens – that kind of
nuisance by reason of location, Q: What are the remedies against private
surrounding or in a manner it is nuisances?
conducted or managed.
c. Temporary – that kind which if properly A:
attended does not constitute a nuisance. 1. Civil action
d. Permanent – that kind which by nature of 2. Abatement, without judicial proceedings (Art.
structure creates a permanent 704, NCC)
inconvenience.
e. Continuing – that kind which by its nature Q: Who may avail of remedies?
will continue to exist indefinitely unless
abated A:
f. Intermittent – that kind which recurs off 1. Public officers
and on may be discontinued anytime. 2. Private persons - if nuisance is specially
g. Attractive Nuisance – one who maintains injurious to himself; the ff.
on his premises dangerous steps must be made:
instrumentalities or appliances of a
character likely to attract children in play,
550 CIVIL LAW TEAM

TORTS AND DAMAGES
i. demand be first made upon owner or 12. The right to become a member of
possessor of the property to abate the associations or societies for purposes not
nuisance contrary to law;
ii. that such demand has been rejected 13. The right to take part in a peaceable
iii. that the abatement be approved by the assembly to petition the government for
district health officer and executed with redress of grievances;
the assistance of local police 14. The right to be free from involuntary
iv. the value of destruction does not exceed servitude in any form;
P3,000 (Art. 704,NCC) 15. The right of the accused against excessive
bail;
3. ATTRACTIVE NUISANCE 16. The right of the accused to be heard by
himself and counsel, to be informed of
Q: What is an attractive nuisance? the nature and cause of the accusation
against him, to have a speedy and public
A: A condition or appliance in question although in trial, to meet the witnesses face to face,
danger is apparent to those of age, is so enticing and to have compulsory process to secure
and alluring to children of tender years as induce the attendance of witness in his behalf;
them to approach, get on or use it and this 17. Freedom from being compelled to be a
attractiveness is an implied invitation to children. witness against one's self, or from being
(Hidalgo Enterprises, Inc. v.Balandan, 91 Phil 488) forced to confess guilt, or from being
induced by a promise of immunity or
Note: The attractiveness of the premises or of the reward to make such confession, except
dangerous instrumentality to children of tender years when the person confessing becomes a
is to be considered as an implied invitation, which State witness;
takes the children who accepted it out of the category 18. Freedom from excessive fines, or cruel
of a trespasser and puts them in the category of and unusual punishment, unless the same
invitees, towards whom the owner of the premises or is imposed or inflicted in accordance with
instrumentality owes the duty of ordinary care a statute which has not been judicially
declared unconstitutional; and
D. VIOLATION OF CONSTITUTIONAL RIGHTS 19. Freedom of access to the courts. (Art. 32,
NCC)
Article 32 of the New Civil Code: Any public officer
or employee, or any private individual, who directly Note: The violation of a person’s rights under Article III
or indirectly obstructs, defeats, violates or in any of the 1987 Constitution as contemplated in Art. 32
manner impedes or impairs any of the following constitutes constitutional tort.
rights and liberties of another person shall be liable
to the latter for damages: 1. VIOLATION OF CIVIL LIBERTIES
1. Freedom of religion;
2. Freedom of speech; Q: What is the purpose of Article 32?
3. Freedom to write for the press or to
maintain a periodical publication; A: Its purpose is to provide a sanction to the deeply
4. Freedom from arbitrary or illegal cherished rights and freedoms enshrined in the
detention; Constitution. (Pineda, Torts and Damages, 2009, p.
5. Freedom of suffrage; 387)
6. The right against deprivation of property
without due process of law; Q: Are judges exempted from damages?
7. The right to a just compensation when
private property is taken for public use; A: GR: Yes, if by performing their duties in good
8. The right to the equal protection of the faith, they happen to violate or impair the rights
laws; and liberties mentioned in Article 32.
9. The right to be secure in one's person,
house, papers, and effects against XPN: If the judge’s act or omission constitutes
unreasonable searches and seizures; a violation of the Revised Penal Code or other
10. The liberty of abode and of changing the penal statute, the judge is liable for damages
same; aside from criminal liability. (Pineda, Torts and
11. The privacy of communication and Damages, 2009, p.388)
correspondence;
E. VIOLATION OF RIGHTS COMMITTED BY PUBLIC
OFFICERS
551
BUILDING OR STRUCTURE OR THING

Q: In what instances can a public officer be liable
for damages? Q: What is the rule regarding the liability of
proprietors of buildings:
A: When a member of a city or municipal police
force refuses or fails to render aid or protection to A:
any person in case of danger to life or property, a. The proprietor of a building or structure is
such peace officer shall be primarily liable for responsible for the damages resulting from its
damages. (Art. 34, NCC) total or partial collapse, if it should be due to
the lack of necessary repairs. (Art. 2190, NCC)
An action may be brought by any person suffering b. Proprietors shall also be responsible for
from material or moral loss because a public damages caused:
servant refuses or neglects, without just cause to 1) By the explosion of machinery which has
perform his official duty. (Art.27 ,NCC) not been taken care of with due diligence,
Requisites: and the inflammation of explosive
i. defendant is a public officer charged with substances which have not been kept in a
the performance of a duty in favor of the safe and adequate place;
plaintiff 2) By excessive smoke, which may be
ii. he refused or neglected without just harmful to persons or property;
cause to perform such duty (ministerial) 3) By the falling of trees situated at or near
iii. plaintiff sustained material or moral loss highways or lanes, if not caused by force
as consequence of such non-performance majeure;
iv. the amount of such damages, if material 4) By emanations from tubes, canals, sewers
or deposits of infectious matter,
Q: What is the intention of making public officers constructed without precautions suitable
liable under Art 34, NCC? to the place. (Art. 2191, NCC)
A: Art. 34 is intended to afford a remedy against I. HEAD OF FAMILY

police officers who connive with bad elements, are
afraid of them or simply indifferent to duty. See Persons Made Responsible For Others; Parents
F. PROVINCES, CITIES AND MUNICIPALITIES X. STRICT LIABILITY
Q: What instance would make cities and Q: When is there strict liability?
municipalities liable for damages?
A: Cities and municipalities shall be subsidiarily A: There is strict liability if one is made independent
liable for the neglect of duty of a member of a city of fault, negligence or intent after establishing
or municipal police force. (Art. 34, NCC) certain facts specified by law. It includes liability for
conversion and for injuries caused by animals, ultra-
Note: The defense of having observed the diligence of hazardous activities and nuisance.
a good father of a family to prevent the damage is not
available to the city or municipality. A. ANIMALS
G. OWNER OF MOTOR VEHICLE 1. POSSESSOR AND USER OF AN ANIMAL
Q: What is the liability of the owner of a vehicle in Q: Who is liable for damages caused by animals?
case of an accident?
A: The possessor or whoever makes use of the
A: In motor vehicle mishaps, the owner is solidarily animal is liable independent of fault.
liable with his driver, if the former, who was in the
vehicle, could have, by the use of the due diligence, Note: The only exception is when the damage is
prevented the misfortune. It is disputably presumed caused by force majeure or by the person who
that a driver was negligent, if he had been found suffered the damage.
guilty or reckless driving or violating traffic
regulations at least twice within the next preceding Q: What are the rules on liability of owners for
two months. (Art. 2184, NCC) damage caused by his animals?
H. PROPRIETOR OF A:
552 CIVIL LAW TEAM

TORTS AND DAMAGES
1. An owner is strictly liable for reasonably 1. CONSUMER ACT

foreseeable damage done by a trespass of his
animals. See Manufacturers or Processors; Consumer Act
2. An owner is strictly liable to licensees and
invitees for injuries caused by wild animals as BOOK II – DAMAGES
long as the injured person did nothing to bring
about the injury. I. GENERAL CONSIDERATIONS
3. An owner is not strictly liable for injuries
caused by domestic animals unless he has A. CLASSIFICATION
knowledge of that particular animal's
dangerous propensities that are not common Q: What are damages?
to the species.
4. Strict liability will generally not be imposed in A: The pecuniary compensation, recompense or
favor of trespassers in the absence of the satisfaction for an injury sustained or as otherwise
owner's negligence. An exception is expressed the pecuniary consequences which the
recognized for injuries inflicted by vicious law imposes for the breach of some duty or
watchdogs. violation of some rights.
2. EASEMENT AGAINST NUISANCE Note: A complaint for damages is personal in

nature (personal action)
Q: What is easement against nuisance?
Q: What are the kinds of damages?
A: Easement against nuisance is established by Art.
682 – 683. It is intended to prohibit the proprietor A: MENTAL
or possessor of a building or land from committing 1. Moral
nuisance therein through noise, jarring, offensive 2. Exemplary
odor, smoke, heat, dust, water, glare, and other 3. Nominal
causes. (Gonzalez-Decano, Notes on Torts & 4. Temperate
Damages Under the Civil Code of the Philippines, 5. Actual
2010, p166) 6. Liquidated
C. PRODUCTS LIABILITY
553
ACTUAL/
MORAL NOMINAL
COMPENSATORY
According to purpose
Actual or compensatory damages Awarded only to enable the injured Vindicating or recognizing the
simply make good or replace the party to obtain means, diversion or injured party’s right to a property
loss caused by the wrong. amusement that will alleviate the that has been violated or invaded.
moral suffering he has undergone, (Tan v. Bantegui, 473 SCRA 663)
by reason of defendants culpable
action. (Robleza v. CA, 174 SCRA
354)
According to manner of determination
Claimant must produce competent No proof of pecuniary loss is No proof of pecuniary loss is
proof or the best evidence necessary. The assessment is left to necessary. Proof that a legal right
obtainable such as receipts to justify the discretion of the court according has been violated is what is only
an award therefore. Actual or to the circumstances of each case. required. Usually awarded in the
compensatory damages cannotbe However, there must be proof that absence of proof of actual damages.
presumed but must be proved with the defendant caused physical
reasonable certainty. (People v. suffering etc. (CompaniaMaritima v.
Ereno, Feb. 22, 2000) Allied Free Worker’s Union, G.R. No.
L-31379, Aug. 29, 1988).
Actual damages must be GR: Factual basis must be alleged.

substantiated by documentary Aside from the need for the
evidence, such as receipts, in order claimant to satisfactorily prove the
to prove expenses incurred as a existence of the factual basis of the
result of the death of the victim or damages, it is also necessary to
the physical injuries sustained by prove its causal relation to the
the victim. (Philippine Hawk defendant’s act (Raagas v. Trava,
Corporation v. Vivian Tan Lee,G.R. G.R. No. L-20081, Feb. 27,1968;
No. 166869, Feb. 16, 2010) People v. Manero, G.R. Nos. 86883-
85, Jan. 29, 1993).
XPN: Criminal cases. Moral

damages may be awarded to the
victim in criminal proceedings in
such amount as the court deems
just without need for pleading or
proof of the basis thereof (People v.
Paredes, July 30, 1998).
Special/Ordinary
Ordinary Special Special
Note: Ordinary Damages are those Note: Special Damages are those
generally inherent in a breach of a which exist because of special
typical contract circumstances and for which a debtor
in good faith can be held liable if he
had been previously informed of such
circumstances.
554 CIVIL LAW TEAM

TORTS AND DAMAGES
EXEMPLARY/
TEMPERATE LIQUIDATED
CORRECTIVE
According to purpose
When the court is convinced that Liquidated damages are frequently Exemplary or corrective damages
there has been such a loss, the agreed upon by the parties, either are intended to serve as a deterrent
judge is empowered to calculate by way of penalty or in order to to serious wrongdoings. (People v.
moderate damages rather than let avoid controversy on the amount of Orilla, 422 SCRA 620)
the complainant suffer without damages.
redress. (GSIS v. Labung-Deang, 365
SCRA 341)
According to manner of determination
May be recovered when the court If intended as a penalty in 1. That the claimant is entitled to
finds that some pecuniary loss has obligations with a penal cause, moral, temperate or compensatory
been suffered but its amount proof of actual damages suffered by damages; and
cannot, from the nature of the case, the creditor is not necessary in
be proved with certainty. No proof order that the penalty may be 2. That the crime was committed
of pecuniary loss is necessary. demanded (Art. 1228, NCC). with 1 or more aggravating
circumstances, or the quasi-delict
No proof of pecuniary loss is was committed with gross
necessary. negligence, or in contracts and
quasi-contracts the act must be
accompanied by bad faith or done
in wanton, fraudulent, oppressive or
malevolent manner.
No proof of pecuniary loss is

necessary.
Special/Ordinary
Special Special Special
II. ACTUAL AND COMPENSATORY DAMAGES not to impose a penalty. (Algarra v.Sandejas, 27
Phil 284)
A. CONCEPT
B. REQUISITES
Q: What are actual or compensatory damages?
1. ALLEGED AND PROVED WITH CERTAINTY
A: It comprehends not only the value of the loss
suffered but also that of the profits which the Q: Is it necessary that loss be proved?
obligee failed to obtain. The amount should be that
which would put the plaintiff in the same position A: GR: Loss must be proved before one can be
as he would have been if he had not sustained the entitled to damages.
wrong for which he is now getting compensation or
reparation. To recover damages, the amount of loss XPN: Loss need not be proved in the following
must not only be capable of proof but must actually cases:
be proven. 1. Liquidated damages previously agreed
upon (Art. 2226)
Q: What is the purpose of the law in awarding
actual damages? Note: Liquidated damages take the place
of actual damages except when additional
A: Its purpose is to repair the wrong that has been damages are incurred.
done, to compensate for the injury inflicted, and
2. Forfeiture of bonds in favor of the
government for the purpose of promoting
555
public interest or policy (Far Eastern wage worker earning less than the minimum wage
Surety and Insurance Co. v. Court of under current labor laws.(Philippine Hawk Corporation
Appeals, 104 Phil 702) v. Vivian Tan Lee, G.R. 166869, Feb. 16, 2010)
3. Loss is presumed (Manzanares v.Moreta, Q: What must be considered in determining the

38 Phil 821) amount of damages recoverable?
4. When the penalty clause is agreed upon A: Much is left to the discretion of the court
in the contract between the parties (Art. considering the moral and material damages
1226) involved. There can be no exact or uniform rule for
measuring the value of a human life. The amount
2. NOT SPECULATIVE recoverable depends on the particular facts and
circumstances of each case.
Q: What is the required proof for actual damages?
A: It is necessary that the claimant produces The life expectancy of the deceased or of the
competent proof or the best evidence obtainable beneficiary, whichever is shorter, is an important
such as receipts to justify an award therefore. factor. Other factors that are usually considered
Actual or compensatory damages cannot be are:
presumed but must be proved with reasonable 1. Pecuniary loss to plaintiff or beneficiary;
certainty (People v. Ereno, Feb. 22, 2000) 2. Loss of support;
3. Loss of service;
Any person who seeks to be awarded actual or 4. Loss of society;
compensatory damages due to acts of another has 5. Mental suffering of beneficiaries; and
the burden of proving said damages as well as the 6. Medical and funeral expenses.
amount thereof. Actual damages cannot be allowed
unless supported by evidence on the record. The Thus, life expectancy is, not only relevant, but, also,
court cannot rely on speculations, conjectures or an important element in fixing the amount
guesswork as to the fact and amount of damages recoverable, although it is not the sole element
(Banas, Jr. v. CA, Feb. 10, 2000) determinative of said amount.
C. COMPONENT ELEMENTS Q: Is it proper for the heirs to claim as damages

the full amount of earnings of the deceased?
1. VALUE OF LOSS; UNREALIZED PROFIT
A: No. Said damages consist, not of the full amount
Q: What are the kinds of actual or compensatory of his earnings, but of the support they received or
damages? would have received from him had he not died in
consequence of the negligence of the bus' agent.
A: Stated otherwise, the amount recoverable is not
1. Damnun Emergens (dano emergente) – the loss of the entire earning, but rather the loss of that
value of the actual pecuniary loss for what the portion of the earnings which the beneficiary would
claimant already possesses before the incident have received. In other words, only net earnings,
which must be supported by receipts or the not gross earning, are to be considered.
best evidence available.
In fixing the amount of that support, the "necessary
2. Lucrum cessans (lucro cessante) –the expenses of his own living" should be deducted from
expected profits which were not realized by his earnings. Earning capacity, as an element of
reason of the act of the offender or tortfeasor. damages to one's estate for his death by wrongful
(Pineda, Torts and Damages, 2009, 163-164) act, is necessarily hisnet earning capacity or his
capacity to acquire money, less the necessary
Note: As a rule, documentary evidence should be expense for his own living. (Villa Rey Transit, Inc. v.
presented to substantiate the claim for damages for CA, et al., G.R. No. L-25499, Feb. 18, 1970)
loss of earning capacity. By way of exception, damages
for loss of earning capacity may be awarded despite 2. ATTORNEY’S FEES AND EXPENSES OF
the absence of documentary evidence when: (1) the LITIGATION
deceased is self-employed and earning less than the
minimum wage under current labor laws, in which Q: What are the two concepts of attorney’s fees?
case, judicial notice may be taken of the fact that in Distinguish one from the other.
the deceased's line of work no documentary evidence
is available; or (2) the deceased is employed as a daily
556 CIVIL LAW TEAM

TORTS AND DAMAGES
A: A: No. If the claim is pursued in the very action

1. Ordinary where the services were rendered, the court may
2. Extraordinary pass upon said claim, even if its amount were less
than the minimum prescribed by law for the
ORDINARY EXTRAORDINARY jurisdiction of said court, upon the theory that the
Nature right to recover attorney’s fees is but an incident of
The reasonable the case in which the services of the counsel have
compensation paid to a An indemnity for damages been rendered. The rule against multiplicity of suits
lawyer for the legal ordered by the court to be
will in effect be subserved. (Pan Pacific Co. v. Advt.
services rendered to a paid by the losing to the
client who has engaged prevailing party in litigation
Corp., 132 Phil 446)
him
Basis Note: Moral damages and attorney’s fees cannot be
The fact of employment consolidated for they are different in nature and each
of the lawyer by the Any cases authorized by law must be separately determined. (Philippine Veterans
client Bank v. NLRC, 317 SCRA 510)
To whom payable 3. INTEREST
Lawyer Client
Q: When can interest be part of damages?
Q:To what does Art. 2208 pertain?
A: In crimes and quasi-delicts, the court may
A: Art. 2208 pertains to extraordinary attorney’s appropriately impose interest on the amount of the
fees. They are actual damages due to the plaintiff. damages adjudicated by the court. The basis of
Plaintiff must allege the basis of his claim for interest is the legal rate which is 6% per annum.
attorney’s fees in the complaint. (Art. 2209)
Q: Are attorney’s fees recoverable as actual Note: No interest shall be adjudged on unliquidated
damages? claims or damages except when or until the demand
can be established with reasonable certainty. (Solid
A: GR: Not recoverable. Homes, Inc. v. IAC, 508 SCRA 165)
XPN: SWISS- MUD- ERC D. EXTENT OR SCOPE OF ACTUAL DAMAGES

1. Stipulation between parties
2. Recovery of Wages of household helpers, 1. IN CONTRACTS AND QUASI-CONTRACTS
laborers and skilled workers
3. Actions for Indemnity under workmen's Q: What should be the amount of actual damages?
compensation and employer liability laws
4. Legal Support actions A: The amount should be that which would put the
5. Separate civil action to recover civil plaintiff in the same position as he would have been
liability arising from crime if he had not sustained the wrong for which he is
6. Malicious prosecution now getting compensation or reparation.
7. Clearly Unfounded civil action or 1. Property – value at the time of
proceeding against plaintiff destruction, or market value, plus, in
8. When Double judicial costs are awarded proper cases, damages for the loss of use
9. When Exemplary damages are awarded during the period before replacement,
10. Defendant acted in gross & evident bad value of use of premises, in case of mere
faith in Refusing to satisfy plaintiff's just & deprivation of possession.
demandable claim
11. When defendant's act or omission 2. Personal injury- medical expenses; If the
Compelled plaintiff to litigate with 3rd qualifying circumstance is present to
persons or incur expenses to protect his justify the imposition of death penalty,
interest the civil indemnity should be no less than
P75,000. If the rape is simple rape, the
Note: If not pleaded and prayed for in the complaint, civil indemnity is P50,000. (People vs
attorney’s fees are barred. (Tin Po v. Bautista, 103 Banago, 309 SCRA 417)
SCRA 388)
Note: Civil indemnity is mandatory upon the
Q: Will the amount of attorney’s fees affect the finding of the fact of rape and is
jurisdiction of the court? automatically imposed upon the accused
without need of proof other than the fact of
557
the commission of the rape. (People v.

Lacerna, 309 SCRA 250) In addition to the amount to be awarded, the
defendant shall also be liable for the following:
3. Death – Wake and burial expenses, P
P75,000by way of civil indemnity ex 1. Loss of the earning capacity of the
delicto which requires no proof other deceased, and the indemnity shall be paid
than the fact of death of the victim and to the heirs of the latter; such indemnity
the assailant’s responsibility therefor. shall in every case be assessed and
(People v.Tabarnero, 693 SCRA 495 ) awarded by the court, unless the
deceased on account of permanent
4. Physical Injuries – Moral damages of physical disability not caused by the
P30,000may be recovered by way of civil defendant, had no earning capacity at the
indemnity. (Guillang v. Bedania. G.R. No. time of his death;
162987, May 21, 2009)
2. If the deceased was obliged to give
Q:Can actual damages be mitigated? support according to the provisions of
Article 291, the recipient who is not an
A: Yes, in the following cases: heir called to the decedent's inheritance
1. For Contracts: by the law of testate or intestate
a. Violation of terms of the contract by succession, may demand support from
the plaintiff himself; the person causing the death, for a period
b. Enjoyment of benefit under the not exceeding five years, the exact
contract by the plaintiff himself; duration to be fixed by the court;
c. Defendant acted upon advice of
counsel in cases where the Note: The article only mentioned heir.
exemplary damages are to be Consequently, it cannot speak of devisees
awarded such as under Articles 2230, and legatees who are receiving support
2231 and 2232; from the deceased.
d. Defendant has done his best to
lessen the plaintiff’s injury or loss. 3. The spouse, legitimate and illegitimate
2. For Quasi-contracts: descendants and ascendants of the
a. In cases where exemplary damages deceased may demand moral damages
are to be awarded such as in Article for mental anguish by reason of the death
2232; of the deceased.
b. Defendant has done his best to
lessen the plaintiff’s injury or loss. Note: The petitioner has correctly relied on the holding
3. For Quasi-delicts: in Receiver for North Negros Sugar Company, Inc. v.
a. That the loss would have resulted in Ybañez (G.R. No. L-22183, August 30, 1968), to the
any event because of the negligence effect that in case of death caused by quasi-delict, the
or omission of another, and where brother of the deceased was not entitled to the award
such negligence or omission is the of moral damages based on Article 2206 of the Civil
immediate and proximate cause of Code. (Sulpicio Lines Inc. v. Curso, et. al., G.R. No.
the damage or injury; 157009, Mar. 17, 2010)
b. Defendant has done his best to
lessen the plaintiff’s injury or loss. III. MORAL DAMAGES
(Pineda, Torts and Damages, 2009,
p.222-223) A. CONCEPT
2. IN CRIMES AND QUASI-DELICTS Q: What do moral damages include?
Q: What is the amount of damages in cases where A: It includes physical suffering, mental anguish,
death resulted from a crime or quasi-delict? fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation,
A:Art. 2206 provides that the amount of damages and similar injury. (Art. 2217, NCC)
for death caused by a crime or quasi-delict shall be
at least P75,000, even though there may have been Q: What is the nature of moral damages?
mitigating circumstances. (People v. Tabarnero, 693
SCRA 495) A: Although incapable of pecuniary estimation, they
are in the category of an award designed to
558 CIVIL LAW TEAM

TORTS AND DAMAGES
compensate the claimant for actual injury suffered 1. IN SEDUCTION, ABDUCTION, RAPE AND OTHER
and not to impose a penalty on the wrong does. LASCIVIOUS ACTS
(Pineda, Torts and Damages, 2009, p. 229)
Q: Is there any instance wherein the plaintiff may
Q: Why are moral damages awarded? not prove the factual basis for moral damages as
well as the causal relation to the defendant’s act?
A: They are awarded to enable the injured party to
obtain means, diversions or amusement that will A: Yes. In criminal proceedings for rape.
serve to alleviate the moral suffering he has
undergone by reason of the defendant’s culpable Requisites:
action. (Prudenciado v. Alliance Transport System, 1. There must be an injury whether physical,
Inc., 148 SCRA 440) mental or psychological, clearly sustained
by the claimant
Q: How can the plaintiff recover moral damages? 2. There must be culpable act or omission
A: GR: The plaintiff must allege and prove: 3. Such act or omission is the proximate
1. The factual basis for moral damages and cause of the injury
2. The causal relation to the defendant’s act 4. The damage is predicated on the cases
cited in Art. 2219
XPN: Moral damages may be awarded to the
victim in criminal proceedings without the Q: In rape cases, is civil indemnity the same with
need for pleading of proof or the basis thereof. moral damages?
B. WHEN RECOVERABLE A: No, civil indemnity is different from moral

damages. It is distinct from and should not be
Q: When are moral damages recoverable? denominated as moral damages which are based on
different jural foundations and assessed by the
A: Moral damages may be recovered in the court in the exercise of sound discretion (People v.
following and analogous cases: Caldona, G.R. No. 126019, Mar. 1, 2001).
1. A criminal offense resulting in physical
injuries; 2. IN ACTS REFERRED TO IN ARTS. 21, 26, 27, 28,
2. Quasi-delicts causing physical injuries; 29, 32, 34 & 35, NCC
3. Seduction, abduction, rape, or other
lascivious acts; Q: What are those tortuous acts referred to in
4. Adultery or concubinage; Articles 21, 26, 27, 28.29, 32, 34 and 35 of the NCC,
5. Illegal or arbitrary detention or arrest; wherein the plaintiff may recover moral damages?
6. Illegal search;
7. Libel, slander or any other form of A:
defamation; 1. Willful acts contrary to morals, good customs
8. Malicious prosecution; or public policy
9. Acts mentioned in Article 309; and 2. Disrespect to the dignity, personality, privacy
10. Actions referred to in Articles 21, 26, 27, and peace of mind of neighbors and other
28, 29, 30, 32, 34, and 35. (Art. 2219, NCC) persons
3. Refusal or neglect of a public servant to
Note: To award moral damages, a court must be perform his official duty without just cause
satisfied with proof of the following: 4. Unfair competition in enterprise or in labor
1. an injury – whether physical, mental or 5. Civil action for damages against accused
psychological; acquitted on reasonable doubt
2. a culpable act or omission factually 6. Violation of civil rights
established; 7. Civil action for damages against city or
3. a wrongful act or omission of the defendant municipal police force
as the proximate cause of the injury
8. When the trial court finds no reasonable
sustained by the claimant;
ground to believe that a crime has been
4. the award of damages predicated on any of
the cases stated in Art. 2219.
committed after a preliminary investigation or
when the prosecutor refuses or fails to
Art. 2219, NCC speaks provides for criminal offense institute criminal proceedings.
resulting from physical injuries and quasi-delicts
causing physical injuries. 3. IN CASES OF MALICIOUS PROSECUTION
559
Q: What is an action for malicious prosecution?

Note: Nominal damages cannot co-exist with actual or
A: It has been defined as an action for damages compensatory damages because nominal damages are
brought by or against whom a criminal prosecution, recoverable when the damages suffered cannot be
civil suit, or other legal proceeding has been proved with reasonable certainty. The law presumes
instituted maliciously and without probable cause, damage although actual or compensatory damages are
after the termination of such prosecution, suit or not proven. Award of actual, moral, temperate or
other proceeding in favor of the defendant therein. moderate damages preclude nominal damages. But it
may be awarded together with attorney’s fees.
(Diaz v. Davao Light and Power Co., 520 SCRA 510,
(Pineda, pp. 284-285, 2009 )
2007)
V. TEMPERATE OR MODERATE DAMAGES
Q: May moral and exemplary damages be granted
if a marriage was dissolved on the ground of
A. CONCEPT
psychological incapacity?
Q: What are temperate damages?
A: By declaring petitioner as psychologically
incapacitated, the possibility of awarding moral
A: Those damages, which are more than nominal
damages was negated, which should have been
but less than compensatory, and may be recovered
proved by specific evidence that it was done
when the court finds that some pecuniary loss has
deliberately. Thus, as the grant of moral damages
been suffered but its amount cannot be proved
was not proper, it follows that the grant of
with certainty.
exemplary damages cannot stand since the Civil
Code provides that exemplary damages are
Note: Elements:
imposed in addition to moral, temperate, liquidated 1. Some pecuniary loss;
or compensatory damages. Finally, since the award 2. Loss is incapable of pecuniary
of moral and exemplary damages is no longer estimation;
justified, the award of attorney's fees and expenses 3. The damages awarded are reasonable.
of litigation is left without basis. (Buenaventura v.
CA,G.R. No. 127358, Mar. 31, 2005) Q: What is the rationale behind the temperate or
moderate damages?
IV. NOMINAL DAMAGES
A: The rationale is precisely that from the nature of
A. CONCEPT the case, definite proof of pecuniary loss cannot be
offered. (Pineda, Torts and Damages, 2009, p.288)
Q: What is the purpose of nominal damages?
Note: In the absence of competent proof of the actual
A: In order that a right of the plaintiff which has damage caused on the motorcycle or the actual cost of
been violated or invaded by the defendant may be its repair, the award of temperate damages by the
vindicated or recognized, and not for the purpose of appellate court in the amount of P10,000.00 was
indemnifying the plaintiff for any loss suffered by reasonable under the circumstances. (Philippine Hawk
him. Corporation v. Vivian Tan Lee, G.R. No. 166869, Feb.
16, 2010)
Note: Elements:
1. Plaintiff has a right;
VI. LIQUIDATED DAMAGES
2. Such right is violated;
3. The purpose of awarding damages is to
vindicate or recognize the right violated. A. CONCEPT
B. WHEN AWARDED Q: What are liquidated damages?
Q: In what cases are nominal damages awarded? A: These are fixed damages previously agreed by
the parties to the contract and payable to the
A: Nominal damages are small sums fixed by the innocent party in case of breach by the other.
court without regard to the extent of the harm (Pineda, Torts and Damages, 2009, p.292)
done to the injured party.They are damages in
name only and are allowed simply in recognition of Q: When may liquidated damages be equitably
a technical injury based on a violation of a legal reduced?
right.
A:
560 CIVIL LAW TEAM

TORTS AND DAMAGES
1. Iniquitous or unconscionable 3. Contracts and Quasi-contracts – when

2. Partial or irregular performance defendant acted in wanton, fraudulent,
reckless, oppressive, or malevolent
B. RULES GOVERNING IN CASE OF BREACH OF manner (Art. 2232)
CONTRACT
Q: What are the damages that can be recovered in
Q: What is the rule governing in case of breach of case of death?
contract?
3
A: MEA-I
A: Art. 2228, NCC, provides that when the breach of 1. Moral damages
contract committed by the defendant is not the one 2. Exemplary damages
contemplated by the parties in agreeing upon the 3. Attomey's fees and expenses for litigation
liquidated damages, the law shall determine the 4. Indemnity for death
measure of damages, and not the stipulation. 5. Indemnity for loss of earning capacity
6. Interest in proper cases
VII. EXEMPLARY OR CORRECTIVE DAMAGES
C. REQUISITES
A. CONCEPT
Q: What are the requirements for an award of
Q: What are exemplary damages? exemplary damages?
A: Also known as “punitive” or “vindictive” A:

damages. These are imposed by way of example or 1. The claimant’s right to exemplary damages has
correction for the public good, in addition to the been established
moral, temperate, liquidated or compensatory 2. Their determination depends upon the
damages; amount of compensatory damages that may
be awarded to the claimant
Q: What is the rationale behind exemplary 3. The act must be accompanied by bad faith or
damages? done in wanton, fraudulent, oppressive or
malevolent manner. (National Steel Corp., v.
A: Exemplary damages are required by public RTC of Lanao del Norte, Br.2, Iligan City, 304
policy, for wanton acts must be suppressed. They SCRA 597)
are an antidote so the poison of wickedness may
not run through the body politic(Diaz vsAmante, VIII. DAMAGES IN CASE OF DEATH
104 Phil 968).They are intended to serve as a
deterrent to serious wrongdoings and as a A. IN CRIMES AND QUASI-DELICTS CAUSING
vindication of undue sufferings and wanton of DEATH
invasion of the rights of an injured or a punishment
for those guilty of outrageous conduct. (People v. Q: What is the rule with regard to crimes and
Catubig, 363 SCRA 621) quasi-delicts causing death?
B. WHEN RECOVERED A: In case of death, the plaintiff is entitled to the

amount that he spent during the wake and funeral
Q: In what cases may exemplary damages be of the deceased. However, it has been ruled that
imposed as accessory damages? expenses after the burial are not compensable.
A: GR: Exemplary damages cannot be recovered as Note: The amount of damages for death caused by a
a matter of right (Art. 2233, NCC) crime or quasi-delict shall be at least three thousand
pesos, even though there may have been mitigating
XPN: They can be imposed in the following circumstances. In addition:
cases: 1. The defendant shall be liable for the loss of
1. Criminal offense – when the crime was the earning capacity of the deceased, and
committed with one or more aggravating the indemnity shall be paid to the heirs of
the latter; such indemnity shall in every case
circumstances (Art. 2230)
be assessed and awarded by the court,
unless the deceased on account of
2. Quasi-delicts – when the defendant acted permanent physical disability not caused by
with gross negligence (Art. 2231) the defendant, had no earning capacity at
the time of his death;
561
2. If the deceased was obliged to give support A: In crimes, the damages to be adjudicated may be
according to the provisions of Article 291, respectively increased or lessened according to the
the recipient who is not an heir called to the aggravating or mitigating circumstances. (Art. 2204,
decedent's inheritance by the law of testate NCC)
or intestate succession, may demand
support from the person causing the death, 2. IN QUASI-DELICT
for a period not exceeding five years, the
exact duration to be fixed by the court;
Q: When can damages be reduced in quasi-delict?
3. The spouse, legitimate and illegitimate
descendants and ascendants of the
deceased may demand moral damages for
A: The contributory negligence of the plaintiff shall
mental anguish by reason of the death of reduce the damages he may recover. (Art. 2214,
the deceased. (Art. 2206, NCC) NCC)
1. IN DEATH CAUSED BY BREACH OF CONDUCT BY 3. IN CONTRACTS, QUASI-CONTRACTS AND

A COMMON CRIME QUASI-DELICTS; NCC ART. 2215
Q: What is the rule in graduation of damages in Q: When can the court equitably mitigate the
torts cases? damages in contract, quasi-contracts and quasi-
delicts?
A: Generally, the degree of care required is
graduated according to the danger a person or A: The court can mitigate the damages in the
property attendant upon the activity which the following instances other than in Art. 2214:
actor pursues or the instrumentality he uses. The 1. That the plaintiff himself has contravened
greater the danger the greater the degree of care the terms of the contract
required. 2. That the plaintiff has derived some
benefit as a result of the contract
However, foreseeability is not the same as 3. In cases where exemplary damages are to
probability. Even if there is lesser degree of be awarded, that the defendant acted
probability that damage will result, the damage upon the advice of counsel
may still be considered foreseeable. 4. That the loss would have resulted in any
event
Note: The test as respects foreseeability is not the 5. That since the filing of the action, the
balance of probabilities, but the existence, in the defendant has done his best to lessen the
situation in hand, of some real likelihood of some plaintiff’s loss or injury. (Art. 2215, NCC)
damage and the likelihood is of such appreciable
weight and moment to induce, or which reasonably 4. LIQUIDATED DAMAGES
should induce, action to avoid it on the part of a
person or a reasonably prudent mind. Q: When can liquidated damages be equitably
reduced?
A. DUTY OF INJURED PARTY
A: Liquidated damages, whether intended as an
1. ART. 2203 indemnity or a penalty, shall be equitably reduced if
they are iniquitous or unconscionable. (Art. 2227,
Q: What is the duty of the injured party? NCC)
A: The injured party is obligated to undertake 5. COMPROMISE

measures that will alleviate and not aggravate his
condition after the infliction of the injury or Q: What is a compromise?
nuisance. The injured party has the burden of
explaining why he did not do so. (Art. 2203, NCC) A: A compromise is a contract whereby the parties,
by making reciprocal concessions, avoid alitigation
B. RULES or put an end to one already commenced. (Art.
2028, NCC)
1. IN CRIMES
Q: What is the essence of a compromise?
Q: How are damages adjudicated in case of
crimes? A: The element of reciprocal concessions.
562 CIVIL LAW TEAM

TORTS AND DAMAGES
Q: What is the rule regarding compromise in case A: GR: not allowed

liability has a civil and criminal aspect?
XPN: in case of crimes against chastity and
A: If a crime has been committed, there can be violations of the National Internal Revenue Code.
compromise on the civil liability, but not, as a
general rule, on the criminal liability. X. MISCELLANEOUS PROVISIONS
Note: In a civil case, compromise must be entered Damages Damages that

into before or during litigation, never after final Damages that
that cannot must stand
must co-exist
judgment has been rendered. co-exist alone
Exemplary
Nominal
Compromise during litigation may be in the form of Damages must co-
Damages
a confession of judgment. exist with Moral,
cannot co- Nominal
Temperate,
exist with Damages
Liquidated or
Q: What is the rule regarding compromise of Exemplary
Compensatoy
criminal liability? Damages
Damages
563

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EFFECT AND APPLICATION OF LAWS

I. EFFECT AND APPLICATION OF LAWS XPN:

A: GR: Yes. Publication is indispensable. Q: What must be published in order to comply

THE ACADEMICS COMMITTEE

2 CIVIL LAW TEAM

Q: Do laws have retroactive effect? E. WAIVER OF RIGHTS

A: GR: Laws shall have no retroactive effect. (lex Q: What is a right?

THE ACADEMICS COMMITTEE

2. If the old law is impliedly repealed and

F. REPEAL OF LAWS Note: When a doctrine is overruled and a different

4 CIVIL LAW TEAM

Note: In CIR v. Primetown Property Group, Inc., the SC

J. LEGAL PERIODS A: It depends. If the act to be performed within the

THE ACADEMICS COMMITTEE

K. APPLICABILITY OF PENAL LAWS of the country where it is situated. (Art.

Q: When, where and upon whom do the following a. Order of succession

XPN: A: As regards prohibitive laws:

6 CIVIL LAW TEAM

2. Transmission theory – Provides that when the

3. Doctrine of Processual Presumption – The

THE ACADEMICS COMMITTEE

HUMAN RELATIONS deceptive device to inveigle her to obtain her

8 CIVIL LAW TEAM

intercourse is from mutual desire, there is no

Q: What are the elements of an action under

Note: Art. 21 deals with acts contra bonus mores or

THE ACADEMICS COMMITTEE

PERSONS Q: What are the circumstances that modify or limit

Q: Distinguish juridical capacity from capacity to 3. BIRTH

A: MIDI-PC A: Yes. It is a universal rule of jurisprudence that a

10 CIVIL LAW TEAM

THE ACADEMICS COMMITTEE

Can Marian’s baby be the beneficiary of the

12 CIVIL LAW TEAM

THE ACADEMICS COMMITTEE

mutual agreement among others. 2. Absence of any of the formal requisites?

KINDS OF REQUISITES A: GR: Void ab initio. (Art. 4)

ESSENTIAL REQUISITES XPN: Valid even in the absence of formal

A: ASL 4. Irregularity in formal requisites?

14 CIVIL LAW TEAM

SOLEMNIZING AUTHORITY However, such affidavit is not an essential or formal

Note: Includes “Acting Mayor” XPN:

THE ACADEMICS COMMITTEE

A: It depends. 1. Marriages among Muslims or members of

16 CIVIL LAW TEAM

Note: The period is counted from the date

THE ACADEMICS COMMITTEE

2. Will your answer be the same if it was a

18 CIVIL LAW TEAM

Q: What are the distinctions between void and voidable marriages?

Either directly or collaterally Judicial declaration is necessary

XPN: Those conceived or born of marriages Legitimate

THE ACADEMICS COMMITTEE

GR: governed by rules on absolute community

1. VOID MARRIAGE 1. If the change is artificial – No, he/she

20 CIVIL LAW TEAM

Q: What is the effect of lack of authority of BIGAMOUS MARRIAGES

THE ACADEMICS COMMITTEE

A: There is no exact definition for psychological

A: No. The Supreme Court has consistently held A:

Note: Expert evidence may be given by qualified

22 CIVIL LAW TEAM

which would make respondent completely