Civil Code Case Doctrines

Republic Act No.
386 - Civil Code
Art. 2 - Publication
ABAKADA Guro Party List, et al. vs. Cesar V. Purisima, et al., G.R. No. 166715, August
14, 2008
What constitutes publication is set forth in Article 2 of the Civil Code, which
provides that "[l]aws shall take effect after 15 days following the completion of their
publication either in the Official Gazette, or in a newspaper of general circulation in
the Philippines."
Virgilio D. Garcillano vs. House of Rep. Committee on Public Information, etc., G.R.
Nos. 170338 & 179275, December 23, 2008
Executive Order No. 200, which repealed Art. 2 of the Civil Code, provides that
"laws shall take effect after fifteen days following the completion of their publication
either in the Official Gazette or in a newspaper of general circulation in the
Philippines, unless it is otherwise provided".
SEC vs. GMA Network, Inc., G.R. No. 164026, December 23, 2008
In a long line of decisions, this Court has ruled that publication in the Official
Gazette is necessary in those cases where the legislation itself does not provide for its
effectivity date — for then the date of publication is material for determining its date
of effectivity, which is the fifteenth day following its publication — but not when the
law itself provides for the date when it goes into effect.
Respondents' argument, however, is logically correct only insofar as it equates the

effectivity of laws with the fact of publication. Considered in the light of other statutes
applicable to the issue at hand, the conclusion is easily reached that said Article 2 does
not preclude the requirement of publication in the Official Gazette, even if the law
itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act
638 provides as follows:
"Section 1. There shall be published in the Official Gazette [1] all

important legislative acts and resolutions of a public nature of the Congress of
the Philippines; [2] all executive and administrative orders and proclamations,
except such as have no general applicability; [3] decisions or abstracts of
decisions of the Supreme Court and the Court of Appeals as may be deemed
by said courts of sufficient importance to be so published; [4] such documents
Copyright 2014 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Law Encyclopedia 2013 1
or classes of documents as may be required so to be published by law; and [5]
such documents or classes of documents as the President of the Philippines
shall determine from time to time to have general applicability and legal
effect, or which he may authorize so to be published. . . ."
The clear object of the above quoted provision is to give the general public
adequate notice of the various laws which are to regulate their actions and conduct as
citizens. Without such notice and publication, there would be no basis for the
application of the maxim "ignorantia legis non excusat." It would be the height of
injustice to punish or otherwise burden a citizen for the transgression of a law of
which he had no notice whatsoever, not even a constructive one.
National Electrification Administration vs. Victoriano B. Gonzaga, G.R. No. 158761,
December 4, 2007
Bank of the Phil. Islands vs. Casa Montessori Internationale, G.R. Nos. 149454 &
149507, May 28, 2004
Rodolfo C. Fariñas vs. Executive Secretary, Comelec, G.R. No. 147387, December 10,
2003
Republic of the Philippines vs. Express Telecommunication Co., G.R. No. 147096,
January 15, 2002
Rodolfo S. De Jesus vs. COA, G.R. No. 109023, August 12, 1998
Phil. International Trading Corp., et al. vs. Zosimo Z. Angeles, et al., G.R. No. 108461,
October 21, 1996
Phil. Association of Service Exporters, Inc. vs. Ruben D. Torres, G.R. No. 101279,
August 6, 1992
Reynaldo V. Umali vs. Jesus P. Estanislao, G.R. Nos. 104037 & 69, May 29, 1992
Caltex Philippines, Inc. vs. Commission on Audit, G.R. No. 92585, May 8, 1992
Cesar Bengzon vs. Franklin N. Drilon, G.R. No. 103524, April 15, 1992
Lorenzo M. Tañada vs. Juan C. Tuvera, G.R. No. 63915, April 24, 1985
Section 1 of P.D. No. 755 incorporated, by reference, the "Agreement for the
Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers" executed
by the PCA. [However,] [t]he PCA-Cojuangco Agreement referred to . . . in Section 1
of P.D. 755 was not reproduced or attached as an annex to the same law. And it is
well-settled that laws must be published to be valid. In fact, publication is an
indispensable condition for the effectivity of a law. . . . The publication, as further
held in Tañada, must be of the full text of the law since the purpose of publication is
to inform the public of the contents of the law. Mere referencing the number of the
presidential decree, its title or whereabouts and its supposed date of effectivity would
not satisfy the publication requirement. . . . We cannot, therefore, extend to the said
Agreement the status of a law.
Eduardo M. Cojuangco, Jr. vs. Republic of the Phil., G.R. No. 180705, November 27,
2012
Publication is a basic postulate of procedural due process. The purpose of

publication is to duly inform the public of the contents of the laws which govern them
and regulate their activities. . . . Procedural due process demands that administrative
rules and regulations be published in order to be effective. . . . There are, however,
several exceptions to the requirement of publication. First, an interpretative regulation
does not require publication in order to be effective. The applicability of an
interpretative regulation "needs nothing further than its bare issuance for it gives no
real consequence more than what the law itself has already prescribed." It "add[s]
nothing to the law" and "do[es] not affect the substantial rights of any person."
Second, a regulation that is merely internal in nature does not require publication for
its effectivity. It seeks to regulate only the personnel of the administrative agency and
not the general public. Third, a letter of instruction issued by an administrative agency
concerning rules or guidelines to be followed by subordinates in the performance of
their duties does not require publication in order to be effective.
Association of Southern Tagalog Electric Cooperatives, et al. vs. ERC, G.R. Nos.
192117 & 192118, September 18, 2012
Art. 3 - Ignorance of the law excuses no one from compliance therewith.
Juan Dulalia, Jr. vs. Pablo C. Cruz, A.C. No. 6854, April 27, 2007
Bernardo P. Betoy, Sr. vs. Mamerto Y. Coliflores, A.M. No. MTJ-05-1608, February 28,
2006
Leonardo Acabal, et al. vs. Villaner Acabal, et al., G.R. No. 148376, March 31, 2005
Alex L. David vs. COMELEC, G.R. No. 127116, April 8, 1997
Art. 4 - Laws shall have no retroactive effect, unless the contrary is provided
League of Cities of the Phils., et al. vs. COMELEC, et al., G.R. Nos. 176951, 177499 &
178056, November 18, 2008
Jerry C. Valeroso vs. People of the Phils., G.R. No. 164815, February 22, 2008
Allied Banking Corp. vs. Quezon City Government, et al., G.R. No. 154126, October 11,
2005
Gloria Santos Dueñas vs. Santos Subdivision Homeowners Asso., G.R. No. 149417,
June 4, 2004
Juan G. Frivaldo vs. Commission on Elections, G.R. No. 120295, June 28, 1996
Philippine National Bank vs. Office of the President, G.R. No. 104528, January 18, 1996
Albino S. Co vs. Court of Appeals, G.R. No. 100776, October 28, 1993
Rajah Humabon Hotel, Inc., vs. Cresenciano B. Trajano, G.R. Nos. 100222-23,
September 14, 1993
Virgilio Callanta vs. NLRC, G.R. No. 105083, August 20, 1993
Pio Balatbat vs. Court of Appeals, G.R. No. 36378, January 27, 1992
Rogelio Inciong vs. NLRC, G.R. No. 88943, May 21, 1990
Development Bank of the Phils. vs. National Labor Relations Commission, G.R. Nos.
82763-64, March 19, 1990
Retroactivity of laws is a matter of civil law, not of a constitutional law, as its

governing law is the Civil Code, not the Constitution. Article 4 of the Civil Code
provides that laws shall have no retroactive effect unless the contrary is provided. The
application of the Civil Code is of course self-explanatory — laws enacted by
Congress may permissibly provide that they shall have retroactive effect. The Civil
Code established a statutory norm, not a constitutional standard.
COMELEC vs. Conrado Cruz, et al., G.R. No. 186616, November 20, 2009
In all contractual, property or other relations, when one of the parties is at a

disadvantage on account of his moral dependence, ignorance, indigence, mental
weakness, tender age or other handicap, the courts must be vigilant for his protection.
Bienvenido T. Buada, et al. vs. Cement Center, Inc., G.R. No. 180374, January 22,
2010
Statutes are prospective and not retroactive in their operation, they being the
formulation of rules for the future, not the past. Hence, the legal maxim lex de futuro,
judex de praeterito — the law provides for the future, the judge for the past, which is
articulated in Article 4 of the Civil Code: "Laws shall have no retroactive effect,
unless the contrary is provided." The reason for the rule is the tendency of retroactive
legislation to be unjust and oppressive on account of its liability to unsettle vested
rights or disturb the legal effect of prior transactions.
PDIC vs. Stockholders of Intercity Savings and Loan Bank, Inc., G.R. No. 181556,
December 14, 2009
Art. 5 - Acts executed against the provisions of mandatory or prohibitory laws

shall be void, except when the law itself authorizes their validity
Nicasio I. Alcantara vs. DENR, et al., G.R. No. 161881, July 31, 2008
Manuel L. Lee vs. Regino B. Tambago, A.C. No. 5281, February 12, 2008
Arturo R. Abalos vs. Galicano S. Macatangay, Jr., G.R. No. 155043, September 30,
2004
Philippine National Bank vs. Court of Appeals, G.R. No. 108870, July 14, 1995
Art. 6 - Rights may be waived, unless the waiver is contrary to law, public
order, public policy, morals, or good customs, or prejudicial to a third person
with a right recognized by law
PNB vs. Nepomuceno Productions, G.R. No. 139479, December 27, 2002
Valenzuela Hardwood and Industrial Supply vs. Court of Appeals, G.R. No. 102316,
June 30, 1997
Pleasantville Dev't. Corp. vs. Court of Appeals, et al., G.R. No. 79688, February 1, 1996
People of the Phils. vs. Donato, G.R. No. 79269, June 5, 1991
Waiver of personal demand for immediate payment is allowed by Article 6 of the
New Civil Code and such waivers and automatic correction of the procedural defects
thus rendered moot the challenge against the validity of the levy.
Pablito T. Villarin, et al. vs. Coronado P. Munasque, G.R. No. 169444, September 17,
2008
While management may validly waive its prerogatives, such waiver should not be
contrary to law, public order, public policy, morals or good customs. An absolute and
unqualified employment for life in the mold of petitioner's concept of perpetual
employment is contrary to public policy and good customs, as it unjustly forbids the
employer from terminating the services of an employee despite the existence of a just
or valid cause. It likewise compels the employer to retain an employee despite the
attainment of the statutory retirement age, even if the employee has became a
"non-performing asset" or, worse, a liability to the employer.
Ronilo Sorreda vs. Cambridge Electronics Corp., G.R. No. 172927, February 11, 2010
Waiver is defined as "a voluntary and intentional relinquishment or abandonment

of a known existing legal right, advantage, benefit, claim or privilege, which except
for such waiver the party would have enjoyed; the voluntary abandonment or
surrender, by a capable person, of a right known by him to exist, with the intent that
such right shall be surrendered and such person forever deprived of its benefit; or such
conduct as warrants an inference of the relinquishment of such right; or the intentional
doing of an act inconsistent with claiming it."
F.F. Cruz & Co., Inc. vs. HR Construction Corp., G.R. No. 187521, March 14, 2012
citing People vs. Donato, G.R. No. 79269, June 5, 1991
As to what rights and privileges may be waived, the authority is settled: . . . the
doctrine of waiver extends to rights and privileges of any character, and, since the
word 'waiver' covers every conceivable right, it is the general rule that a person may
waive any matter which affects his property, and any alienable right or privilege of
which he is the owner or which belongs to him or to which he is legally entitled,
whether secured by contract, conferred with statute, or guaranteed by constitution,
provided such rights and privileges rest in the individual, are intended for his sole
benefit, do not infringe on the rights of others, and further provided the waiver of the
right or privilege is not forbidden by law, and does not contravene public policy; and
the principle is recognized that everyone has a right to waive, and agree to waive, the
advantage of a law or rule made solely for the benefit and protection of the individual
in his private capacity, if it can be dispensed with and relinquished without infringing
on any public right, and without detriment to the community at large.
citing People vs. Donato, G.R. No. 79269, June 5, 1991
Art. 7 - Laws are repealed only by subsequent ones
Purpose of Curative Statutes
Curative statutes are enacted to cure defects in a prior law or to validate legal
proceedings which would otherwise be void for want of conformity with certain legal
requirements. They are intended to supply defects, abridge superfluities and curb
certain evils. They are intended to enable persons to carry into effect that which they
have designed or intended, but has failed of expected legal consequence by reason of
some statutory disability or irregularity in their own action. They make valid that
which, before the enactment of the statute was invalid. Their purpose is to give
validity to acts done that would have been invalid under existing laws, as if existing
laws have been complied with. Curative statutes, therefore, by their very essence, are
retroactive.
The Coca-Cola Export Corp. vs. Clarita P. Gacayan, G.R. No. 149433, December 15,
2010, citing Narzoles v. National Labor Relations Commission, 395 Phil. 758, 763-765
(2000)
Nicasio I. Alcantara vs. DENR, et al., G.R. No. 161881, July 31, 2008
Planters Products, Inc. vs. Fertiphil Corp., G.R. No. 166006, March 14, 2008
Metropolitan Bank and Trust Co., Inc. vs. National Wages and Productivity
Commission, et al., G.R. No. 144322, February 6, 2007
Gregorio B. Honasan II vs. Panel of Investigating Prosecutors of the DOJ, G.R. No.
159747, April 13, 2004
Francisco vs. House of Representatives, G.R. No. 160261, November 10, 2003
Civil Service Commission vs. Dacoycoy, G.R. No. 135805, April 29, 1999
Municipality of Parañaque vs. V.M. Realty Corp., G.R. No. 127820, July 20, 1998
Pablo P. Garcia, et al. vs. Jose P. Burgos, et al., G.R. No. 124130, June 29, 1998
Eastern Shipping Lines, Inc. vs. Court of Appeals, et al., G.R. No. 116356, June 29,
1998
People of the Phil. vs. Aquino, G.R. No. 39274, July 26, 1991
Union of Filipro Employees vs. Nestle, G.R. Nos. 88710-13, December 19, 1990
The general rule is that a void law or administrative act cannot be the source of
legal rights or duties. Article 7 of the Civil Code enunciates this general rule, as well
as its exception: "Laws are repealed only by subsequent ones, and their violation or
non-observance shall not be excused by disuse, or custom or practice to the contrary.
When the courts declared a law to be inconsistent with the Constitution, the former
shall be void and the latter shall govern. Administrative or executive acts, orders and
regulations shall be valid only when they are not contrary to the laws or the
Constitution."
Commr. v. San Roque Power Corp., G.R. Nos. 187485, 196113 & 197156, October 8,
2013
The doctrine of operative fact is an exception to the general rule, such that a
judicial declaration of invalidity may not necessarily obliterate all the effects and
consequences of a void act prior to such declaration. In Serrano de Agbayani v.
Philippine National Bank, the application of the doctrine of operative fact was
discussed as follows:
The decision now on appeal reflects the orthodox view that an

unconstitutional act, for that matter an executive order or a municipal
ordinance likewise suffering from that infirmity, cannot be the source of any
legal rights or duties. Nor can it justify any official act taken under it. Its
repugnancy to the fundamental law once judicially declared results in its being
to all intents and purposes a mere scrap of paper. As the new Civil Code puts
it: "When the courts declare a law to be inconsistent with the Constitution, the
former shall be void and the latter shall govern. Administrative or executive
acts, orders and regulations shall be valid only when they are not contrary to
the laws of the Constitution." It is understandable why it should be so, the
Constitution being supreme and paramount. Any legislative or executive act
contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of simplicity.
It may not however be sufficiently realistic. It does not admit of doubt that
prior to the declaration of nullity such challenged legislative or executive act
must have been in force and had to be complied with. This is so as until after
the judiciary, in an appropriate case, declares its invalidity, it is entitled
to obedience and respect. Parties may have acted under it and may have
changed their positions. What could be more fitting than that in a subsequent
litigation regard be had to what has been done while such legislative or
executive act was in operation and presumed to be valid in all respects. It is
now accepted as a doctrine that prior to its being nullified, its existence as a
fact must be reckoned with. This is merely to reflect awareness that precisely
because the judiciary is the governmental organ which has the final say
on whether or not a legislative or executive measure is valid, a period of
time may have elapsed before it can exercise the power of judicial review
that may lead to a declaration of nullity. It would be to deprive the law of
its quality of fairness and justice then, if there be no recognition of what
had transpired prior to such adjudication. . . .
Clearly, for the operative fact doctrine to apply, there must be a "legislative or
executive measure," meaning a law or executive issuance, that is invalidated by the
court. From the passage of such law or promulgation of such executive issuance until
its invalidation by the court, the effects of the law or executive issuance, when relied
upon by the public in good faith, may have to be recognized as valid.
Commr. v. San Roque Power Corp., G.R. Nos. 187485, 196113 & 197156, October 8,
2013
Art. 8 - Judicial decisions applying or interpreting the laws or the Constitution

shall form part of the legal system of the Philippines
Cristenelli Fermin vs. People of the Phil., G.R. No. 157643, March 28, 2008
Filinvest Devt. Corp. vs. Commissioner of Internal Revenue, G.R. No. 146941, August
9, 2007
Republic of the Phils. vs. Carlos Flores Garcia, et al., G.R. No. 167741, July 12, 2007
Aquilino Q. Pimentel, et al. vs. Eduardo R. Ermita, et al., G.R. 164978, October 13,
2005
GSIS vs. Leo L. Cadiz, G.R. No. 154093, July 8, 2003
Gregorio R. Castillo vs. Sandiganbayan, G.R. No. 138231, February 21, 2002
Lorna Guillen Pesca vs. Zosimo A. Pesca, G.R. No. 136921, April 17, 2001
Pagpalain Haulers vs. Trajano, G.R. No. 133215, July 15, 1999
PBCom vs. CIR, G.R. No. 112024, January 28, 1999
Columbia Pictures vs. Court of Appeals, G.R. No. 110318, August 28, 1996
Kilosbayan, Inc. vs. Manuel L. Morato, G.R. No. 118910, July 17, 1995
Phil. Constitution Association vs. Enriquez, G.R. No. 113105, August 19, 1994
The principle of stare decisis et non quieta movere, as embodied in Article 8 of the
Civil Code of the Philippines, enjoins adherence to judicial precedents. It requires our
courts to follow a rule already established in a final decision of the Supreme Court.
That decision becomes a judicial precedent to be followed in subsequent cases by all
courts in the land.
Filinvest Development Corp. vs. Commissioner of Internal Revenue, et al., G.R. No.
146941, August 9, 2007
The principle of stare decisis embodies the legal maxim that a principle of law
which has been established by the decision of a court of controlling jurisdiction will
be followed in other cases involving a similar situation. It is founded on the necessity
for securing certainty and stability in the law and does not require identity of parties.
Pepsi Cola Products (Phils.), Inc. vs. Efren Espiritu, et al., G.R. No. 150394, June 26,
2007
The principle of stare decisis et non quieta movere enjoins adherence to judicial
precedents. It requires our courts to follow a rule already established in a final
decision of the Supreme Court. That decision becomes a judicial precedent to be
followed in subsequent cases by all courts in the land. The doctrine of stare decisis is
based on the principle that once a question of law has been examined and decided, it
should be deemed settled and closed to further argument.
De Mesa vs. Pepsi Cola, G.R. No. 153063-70, August 19, 2005
The principle of stare decisis enjoins adherence by lower courts to doctrinal rules
established by this Court in its final decisions. It is based on the principle that once a
question of law has been examined and decided, it should be deemed settled and
closed to further argument. Basically, it is a bar to any attempt to relitigate the same
issues, necessary for two simple reasons: economy and stability. In our jurisdiction,
the principle is entrenched in Article 8 of the Civil Code.
We have also previously held that "[u]nder the doctrine of stare decisis, once a
court has laid down a principle of law as applicable to a certain state of facts, it will
adhere to that principle and apply it to all future cases where the facts are substantially
the same."
The Baguio Regreening Movement, Inc., et al. vs. Brain Masweng, et al., G.R. No.
180882, February 27, 2013
Art. 9 - No judge or court shall decline to render judgment by reason of the

silence, obscurity or insufficiency of the laws
David Reyes vs. Jose Lim, G.R. No. 134241, August 11, 2003
Gilda C. Lim, et al. vs. Patricia Lim-Yu, G.R. No. 138343, February 19, 2001
The duty of the courts is to apply or interpret the law, not to make or amend it.
It is true that Article 9 of the Civil Code mandates that "[n]o judge or court shall
decline to render judgment by reason of the silence, obscurity or insufficiency of the
law." However, it is not a license for courts to engage in judicial legislation. The duty
of the courts is to apply or interpret the law, not to make or amend it. In our system of
government, it is for the legislature, should it choose to do so, to determine what
guidelines should govern the recognition of the effects of sex reassignment. The need
for legislative guidelines becomes particularly important in this case where the claims
asserted are statute-based. To reiterate, the statutes define who may file petitions for
change of first name and for correction or change of entries in the civil registry, where
they may be filed, what grounds may be invoked, what proof must be presented and
what procedures shall be observed. If the legislature intends to confer on a person who
has undergone sex reassignment the privilege to change his name and sex to conform
with his reassigned sex, it has to enact legislation laying down the guidelines in turn
governing the conferment of that privilege. It might be theoretically possible for this
Court to write a protocol on when a person may be recognized as having successfully
changed his sex. However, this Court has no authority to fashion a law on that matter,
or on anything else. The Court cannot enact a law where no law exists. It can only
apply or interpret the written word of its co-equal branch of government, Congress.
Rommel Jacinto Dantes Silverio vs. Republic of the Phil., G.R. No. 174689, October 19,
2007
Art. 10 - In case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail
ABD Overseas Manpower Corp. vs. NLRC, et al., G.R. No. 117056, February 24, 1998
Karen E. Salvacion vs. Central Bank of the Phils., G.R. No. 94723, August 21, 1997
Juan G. Privaldo vs. COMELEC, et al., G.R. Nos. 120295, 123755, June 28, 1996
It is well settled that courts are not to give a statute a meaning that would lead to
absurdities. If the words of a statute are susceptible of more than one meaning, the
absurdity of the result of one construction is a strong argument against its adoption,
and in favor of such sensible interpretation. We test a law by its result. A law should
not be interpreted so as not to cause an injustice. There are laws which are generally
valid but may seem arbitrary when applied in a particular case because of its peculiar
circumstances. We are not bound to apply them in slavish obedience to their language.
The court may consider the spirit and reason of the statute, where a literal meaning
would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of
the lawmakers.
NPC Drivers and Mechanics Association, et al. vs. NPC, et al., G.R. No. 156208,
December 2, 2009
Art. 13 - Years, months, days or nights
Metrobank vs. Sps. Antonio and Elisa Tan, et al., G.R. No. 178449, October 17, 2008
Arturo O. Radaza, et al. vs. Court of Appeals, et al., G.R. No. 177135, October 15, 2008
Mitsubishi Motors Phil. Corp. vs. Chrysler Phils. Labor Union, G.R. No. 148738, June
29, 2004
Radin C. Alcira vs. NLRC, G.R. No. 149859, June 9, 2004
People of the Phils. vs. Felipe Demate, G.R. Nos. 132310 & 143968-69, January 20,
2004
People of the Phils. vs. Manuel Gutierrez, G.R. Nos. 144907-09, September 17, 2002
Ramon Estanislao vs. Court of Appeals, G.R. No. 143687, July 31, 2001
People of the Phil. vs. Rolando A. Alfanta, G.R. No. 125633, December 9, 1999
Republic of the Phil. vs. NLRC, et al., G.R. No. 127162, November 18, 1999
Republic of the Phil. vs. NLRC, G.R. No. 127167, November 18, 1999
Luis Miguel Ysmael vs. Court of Appeals, G.R. No. 132497, November 16, 1999
Violeta Batara vs. Court of Appeals, G.R. No. 127906, December 16, 1998
CCBPI Postmix Workers Union vs. NLRC, G.R. Nos. 114521 & 123491, November 27,
1998
Philippine National Bank vs. Court of Appeals, G.R. No. 98382, May 17, 1993
State Investment House, Inc. vs. Court of Appeals, G.R. No. 99308, November 13,
1992
Sps. Go It Bun vs. Baltazar R. Dizon, G.R. Nos. 75915-16, September 18, 1992
A year is understood to be three hundred sixty-five (365) days.

Metrobank vs. Sps. Antonio and Elisa Tan, et al., G.R. No. 178449, October 17, 2008
Art. 14 - Penal laws and those of public security and safety shall be obligatory
upon all who live or sojourn in Philippine territory
Sps. Victor and Milagros Perez, et al. vs. Antonio Hermano, G.R. No. 147417, July 8,
2005
Carmen Bascon Tibajia, et al. vs. Court of Appeals, et al., G.R. No. 82193, February 16,
1991
Art. 15 - Laws relating to family rights and duties, or to status, condition and
legal capacity
Maria Jeanette C. Tecson vs. Comelec, G.R. No. 161434, March 3, 2004
Lucio C. Morigo vs. People of the Phils., G.R. No. 145226, February 6, 2004
Grace J. Garcia vs. Rederick A. Recio, G.R. No. 138322, October 2, 2001
Paula T. Llorente vs. Court of Appeals, G.R. No. 124371, November 23, 2000
A foreign judgment relating to the status of a marriage affects the civil status,
condition and legal capacity of its parties. However, the effect of a foreign judgment
is not automatic. To extend the effect of a foreign judgment in the Philippines,
Philippine courts must determine if the foreign judgment is consistent with domestic
public policy and other mandatory laws. Article 15 of the Civil Code provides that
"[l]aws relating to family rights and duties, or to the status, condition and legal
capacity of persons are binding upon citizens of the Philippines, even though living
abroad." This is the rule of lex nationalii in private international law. Thus, the
Philippine State may require, for effectivity in the Philippines, recognition by
Philippine courts of a foreign judgment affecting its citizen, over whom it exercises
personal jurisdiction relating to the status, condition and legal capacity of such citizen.
Minoru Fujiki vs. Maria Paz Galela Marinay, et al., G.R. No. 196049, June 26, 2013
Art. 16 - Real and personal property; intestate and testamentary succession
Paula T. Llorente vs. Court of Appeals, G.R. No. 124371, November 23, 2000
Art. 17, par. 3 - A declaration of public policy cannot be rendered ineffectual

by a judgment promulgated in a foreign jurisdiction
Lucio C. Morigo vs. People of the Phils., G.R. No. 145226, February 6, 2004
Art. 18 - In matters which are governed by the Code of Commerce and special
laws, their deficiency shall be supplied by the provisions of this Code.
Bank of the Phil. Islands vs. Casa Montessori Internationale, G.R. Nos. 149454 &
149507, May 28, 2004
Art. 19 - Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.
Heirs of Purisima Nala vs. Artemio Cabansag, G.R. No. 161188, June 13, 2008
ASJ Corp., et al. vs. Sps. Efren and Maura Evengelista, G.R. No. 158086, February 14,
2008
Phil. Bank of Communications, et al. vs. Elenita B. Trazo, G.R. No. 165500, August 30,
2006
Commissioner of Internal Revenue vs. Benguet Ciorp., G.R. Nos. 134587 & 134588,
July 8, 2005
MWSS vs. Act Theater, G.R. No. 147076, June 17, 2004
Lilian Capitle vs. Julieta Vda. De Gaban, G.R. No. 146890, June 8, 2004
Eli Lui vs. Sps. Eulogio and Paulina Matillano, G.R. No. 141176, May 27, 2004
Catalino P. Arafiles vs. Phil. Journalists, Inc., G.R. No. 150256, March 25, 2004
Andrade vs. Court of Appeals, G.R. No. 127932, December 7, 2001
Alfredo Long and Felix Almeria vs. Lydia Basa, G.R. No. 134963-64, September 27,
2001
Vicente Rellosa, et al. vs. Gonzalo Pellosis, et al., G.R. No. 138964, August 9, 2001
Sea Commercial Co. vs. Court of Appeals, G.R. No. 122823, November 25, 1999
RCBC vs. Court of Appeals, et al., G.R. No. 133107, February 25, 1999
Saudi Arabian Airlines vs. Court of Appeals, G.R. No. 122191, October 8, 1998
Barons Marketing Corp. vs. Court of Appeals, G.R. No. 126486, February 9, 1998
Traders Royal Bank vs. Court of Appeals, et al., G.R. No. 93397, March 3, 1997
In Re: Emil Jurado, A.M. No. 93-2-037 SC, April 6, 1995
Albenso Enterprises vs. Court of Appeals, G.R. No. 88694, January 11, 1993
Arturo De Guzman vs. National Labor Relations Commission, G.R. No. 90856, July 23,
1992
David P. Llorente vs. Sandiganbayan, G.R. No. 85464, October 3, 1991
Philippine Air Lines, Inc. vs. Court of Appeals, G.R. No. L-46558, July 31, 1981
Standards in the Exercise of One's Rights and Duties
This article, known to contain what is commonly referred to as the principle of

abuse of rights, sets certain standards which must be observed not only in the exercise
of one's rights but also in the performance of one's duties. These standards are the
following: to act with justice; to give everyone his due; and to observe honesty and
good faith. The law, therefore, recognizes a primordial limitation on all rights; that in
their exercise, the norms of human conduct set forth in Article 19 must be observed. A
right, though by itself legal because recognized or granted by law as such, may
nevertheless become the source of some illegality. When a right is exercised in a
manner which does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the wrongdoer must
be held responsible. But while Article 19 lays down a rule of conduct for the
government of human relations and for the maintenance of social order, it does not
provide a remedy for its violation. Generally, an action for damages under either
Article 20 or Article 21 would be proper.
Cebu Country Club, Inc., et al. vs. Ricardo F. Elizagaque, G.R. No. 160273, January 18,
2008
GF Equity, Inc. vs. Arturo Valenzona, G.R. No. 156841, June 30, 2005
Under Article 19 of the Civil Code, an act constitutes an abuse of right if the
following elements are present: (a) the existence of a legal right or duty; (b) which is
exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another.
ASJ Corporation, et al. vs. Sps. Efren & Maura Evangelista, G.R. No. 158086, February
14, 2008
Far East Bank and Trust Company vs. Themistocles Pacilan, Jr., G.R. No. 157314, July
29, 2005
When a right is exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be held responsible.
Heirs of Purisima Nala vs. Artemio Cabansag, G.R. No. 161188, June 13, 2008
An act constitutes an abuse of right if the following elements are present: (a) the
existence of a legal right or duty; (b) which is exercised in bad faith; and (c) for the
sole intent of prejudicing or injuring another.
ASJ Corp., et al. vs. Sps. Efren and Maura Evangelista, G.R. No. 158086, February 14,
2008
Elsewhere, we explained that when "a right is exercised in a manner which does
not conform with the norms enshrined in Article 19 and results in damage to another,
a legal wrong is thereby committed for which the wrongdoer must be responsible."
The object of this article, therefore, is to set certain standards which must be observed
not only in the exercise of one’s rights but also in the performance of one’s duties.
These standards are the following: act with justice, give everyone his due and observe
honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or
intent to injure. Its elements are the following: (1) There is a legal right or duty; (2)
which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another. When Article 19 is violated, an action for damages is proper under Articles
20 or 21 of the Civil Code.
Allan C. Go vs. Mortimer F. Cordero, G.R. No. 164703, May 4, 2010
Under the abuse of right principle found in Article 19 of the Civil Code, a person
must, in the exercise of his legal right or duty, act in good faith. He would be liable if
he instead acts in bad faith, with intent to prejudice another. Complementing this
principle are Articles 20 and 21 of the Civil Code which grant the latter indemnity for
the injury he suffers because of such abuse of right or duty.
Titus B. Villanueva vs. Emma M. Rosqueta, G.R. No. 180764, January 19, 2010
When a right is exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be held responsible. But a right, though by
itself legal because [it is] recognized or granted by law as such, may nevertheless
become the source of some illegality. A person should be protected only when he acts
in the legitimate exercise of his right, that is, when he acts with prudence and in good
faith; but not when he acts with negligence or abuse. There is an abuse of right when
it is exercised for the only purpose of prejudicing or injuring another. The exercise of
a right must be in accordance with the purpose for which it was established, and must
not be excessive or unduly harsh; there must be no intention to injure another.
Unicapital, Inc. v. Consing, Jr., G.R. Nos. 175277, 175285 & 192073, September 11,
2013, citing Hongkong and Shanghai Banking Corporation, Limited v. Catalan, 483 Phil.
525, 538 (2004)
Art. 20 - Every person who, contrary to law, wilfully or negligently causes

damage to another, shall indemnify the latter for the damage.
Michael John Z. Melto vs. People of the Phil., G.R. No. 164733, September 21, 2007
Petrophil Corp. vs. Court of Appeals, G.R. No. 122796, December 10, 2001
Bautista vs. Mangaldan Rural Bank, G.R. No. 100755, February 10, 1994
Art. 21 - Any person who wilfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate the
latter for the damage.
ACI Phil., Inc. vs. Editha C. Coquia, G.R. No. 174466, July 14, 2008
San Miguel Corp. vs. NLRC, et al., G.R. No. 147566, December 6, 2006
Alfredo S. Paguio vs. PLDT, G.R. No. 154072, December 3, 2002
Bibiano V. Bañas, Jr. vs. Court of Appeals, et al., February 10, 2000
Traders Royal Bank vs. Court of Appeals, et al., G.R. Nos. 114299 & 118862,
September 24, 1999
Saudi Arabian Airlines vs. Court of Appeals, G.R. No. 122191, October 8, 1998
Custodio vs. Court of Appeals, G.R. No. 116100, February 9, 1996
Filinvest Credit vs. Court of Appeals, G.R. No. 115902, September 27, 1995
Far East Bank vs. Court of Appeals, G.R. No. 108164, February 23, 1995
Gashem Shookat Baksh vs. Court of Appeals, G.R. No. 97336, February 19, 1993
1992
Conrado Bunag, Jr. vs. Court of Appeals, G.R. No. 101749, July 10, 1992
Philippine School of Business Administration vs. Court of Appeals, G.R. No. 84698,
January 4, 1992
Rafael Patricio vs. Oscar Leviste, G.R. No. 51832, April 26, 1989
Standards in the Exercise of One's Rights and Duties
This article, known to contain what is commonly referred to as the principle of

abuse of rights, sets certain standards which must be observed not only in the exercise
of one's rights but also in the performance of one's duties. These standards are the
following: to act with justice; to give everyone his due; and to observe honesty and
good faith. The law, therefore, recognizes a primordial limitation on all rights; that in
their exercise, the norms of human conduct set forth in Article 19 must be observed. A
right, though by itself legal because recognized or granted by law as such, may
nevertheless become the source of some illegality. When a right is exercised in a
manner which does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the wrongdoer must
be held responsible. But while Article 19 lays down a rule of conduct for the
government of human relations and for the maintenance of social order, it does not
provide a remedy for its violation. Generally, an action for damages under either
Article 20 or Article 21 would be proper.
2008
GF Equity, Inc. vs. Arturo Valenzona, G.R. No. 156841, June 30, 2005
Article 21 refers to acts contra bonus mores and has the following elements: (1)
There is an act which is legal; (2) but which is contrary to morals, good custom,
public order, or public policy; and (3) it is done with intent to injure.
A common theme runs through Articles 19 and 21, and that is, the act complained
of must be intentional.
Allan C. Go vs. Mortimer F. Cordero, G.R. No. 164703, May 4, 2010, citing Ramas v.
Quiamco, G.R. No. 146322, December 6, 2006
Art. 22 - Every person who through an act or performance by another, or any

other means, acquires or comes into possession of something at the expense of the
latter without just or legal ground, shall return the same to him.
Conditions of an Accion in Rem Verso
Unjust enrichment has been applied to actions called accion in rem verso. In order
that the accion in rem verso may prosper, the following conditions must concur: (1)
that the defendant has been enriched; (2) that the plaintiff has suffered a loss; (3) that
the enrichment of the defendant is without just or legal ground; and (4) that the
plaintiff has no other action based on contract, quasi-contract, crime, or quasi-delict.
The principle of unjust enrichment essentially contemplates payment when there is no
duty to pay, and the person who receives the payment has no right to receive it.
LBP vs. Alfredo Ong, G.R. No. 190755, November 24, 2010
Republic of the Phil. vs. Normelito J. Ballocanag, et al., G.R. No. 163794, November 28,
2008
Allied Banking Corp. vs. Lim Sio Wan, et al., G.R. No. 133179, March 27, 2008
Planters Products Inc. vs. Fertiphil Corp., G.R. No. 166006, March 14, 2008
H.L. Carlos Construction vs. Marina Properties Corp., G.R. No. 147614, January 29,
2004
NDC vs. Madrigal Wan Hai Lines, G.R. No. 148332, September 30, 2003
Alfred Fritz Frenzel vs. Ederlina P. Catito, G.R. No. 143958, July 11, 2003
MC Engineering, Inc. vs. Court of Appeals, G.R. No. 104047, April 3, 2002
Rilloraza, Africa, De Ocampo and Africa vs. Eastern Telecommunications Phil., Inc., et
al., G.R. 104600, July 2, 1999
Conchita Nool, et al. vs. Court of Appeals, et al., G.R. No. 116635, July 24, 1997
Security Bank & Trust Company vs. Court of Appeals, G.R. No. 117009, October 11,
1995
Principle of Unjust Enrichment; Principle of Equity.
The principle of unjust enrichment requires two conditions: (1) that a person is
benefited without a valid basis or justification, and (2) that such benefit is derived at
another's expense or damage.
Benguet Corp. vs. Department of Environment and Natural Resources, et al., G.R. No.
163101, February 13, 2008
Under the principle of unjust enrichment — nemo cum alterius detrimento

locupletari potest — no person shall be allowed to enrich himself unjustly at the
expense of others. This principle of equity has been enshrined in our Civil Code
[Article 22]. We have held that there is unjust enrichment when a person unjustly
retains a benefit to the loss of another, or when a person retains the money or property
of another against the fundamental principles of justice, equity and good conscience.
Equity, as the complement of legal jurisdiction, seeks to reach and complete justice
where courts of law, through the inflexibility of their rules and want of power to adapt
their judgments to the special circumstances of cases, are incompetent to do so. Equity
regards the spirit and not the letter, the intent and not the form, the substance rather
than the circumstance, as it is variously expressed by different courts.
LCK Industries Inc., et al. vs. Planters Dev't. Bank, G.R. No. 170606, November 23,
2007
Enrichment consists in every patrimonial, physical or moral advantage appreciable

in money.
Enrichment of the defendant consists in every patrimonial, physical, or moral

advantage, so long as it is appreciable in money. It may consist of some positive
pecuniary value incorporated into the patrimony of the defendant, such as: (1) the
enjoyment of a thing belonging to the plaintiff; (2) the benefits from service rendered
by the plaintiff to the defendant; (3) the acquisition of a right, whether real or
personal; (4) the increase of value of property of the defendant; (5) the improvement
of a right of the defendant, such as the acquisition of a right of preference; (6) the
recognition of the existence of a right in the defendant; and (7) the improvement of
the conditions of life of the defendant.
Vicente S. Almario vs. Philippine Airlines, Inc., G.R. No. 170928, September 11, 2007
The enrichment of the defendant must have a correlative prejudice, disadvantage,

or injury to the plaintiff.
The enrichment of the defendant must have a correlative prejudice, disadvantage,

or injury to the plaintiff. This prejudice may consist, not only of the loss of property or
the deprivation of its enjoyment, but also of non-payment of compensation for a
prestation or service rendered to the defendant without intent to donate on the part of
the plaintiff, or the failure to acquire something which the latter would have obtained.
The injury to the plaintiff, however, need not be the cause of the enrichment of the
defendant. It is enough that there be some relation between them, that the enrichment
of the defendant would not have been produced had it not been for the fact from
which the injury to the plaintiff is derived.
Vicente S. Almario vs. Philippine Airlines, Inc., G.R. No. 170928, September 11, 2007
Equity jurisdiction aims to do complete justice in cases where a court of law is

unable to adapt its judgments to the special circumstances of a case.
Equity is exercised in this case "as the complement of legal jurisdiction [that] seeks
to reach and to complete justice where courts of law, through the inflexibility of their
rules and want of power to adapt their judgments to the special circumstances of
cases, are incompetent to do so." The purpose of the exercise of equity jurisdiction in
this case is to prevent unjust enrichment and to ensure restitution. Equity jurisdiction
aims to do complete justice in cases where a court of law is unable to adapt its
judgments to the special circumstances of a case because of the inflexibility of its
statutory or legal jurisdiction.
Jacobus Bernhard Hulst vs. PR Builders, Inc., G.R. No. 156364, September 3, 2007
A person shall not be allowed to profit or enrich himself inequitably at another's

expense.
There is unjust enrichment when (1) a person is unjustly benefited, and (2) such
benefit is derived at the expense of or with damages to another. The main objective of
the principle of unjust enrichment is to prevent one from enriching oneself at the
expense of another. It is commonly accepted that this doctrine simply means that a
person shall not be allowed to profit or enrich himself inequitably at another's
expense. One condition for invoking this principle is that the aggrieved party has no
other action based on contract, quasi-contract, crime, quasi-delict or any other
provision of law.
Antonio Chieng vs. Sps. Eulogio and Teresita Santos, G.R. No. 169647, August 31,
2007
There is unjust enrichment "when a person unjustly retains a benefit to the loss of
another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience." The principle of
unjust enrichment requires two conditions: (1) that a person is benefited without a
valid basis or justification, and (2) that such benefit is derived at the expense of
another.
Arturo Sarte Flores vs. Sps. Enrico, Jr. and Edna Lindo, G.R. No. 183984, April 13,
2011
The DAR unjustly enriched itself when it appropriated the entire 147.6913-hectare
real property of respondents . . . because the entire lot was decidedly beyond the area
it had intended to subject to agrarian reform under the VOS arrangement. . . . Under
the Civil Code, there is unjust enrichment when a person retains the property of
another without just or legal ground and against the fundamental principles of justice,
equity and good conscience. Hence, although the Court affirms the award of just
compensation for the expropriated portion owned by respondents, the Republic cannot
hold on to the excluded portion consisting of 75.6913 hectares, despite both portions
being included under one new title issued in its favor. The consequence of our finding
of unjust and improper titling of the entire property by the Republic is that the title
over the excluded portion shall be returned or transferred back to respondents
Montalvan, with damages.
LBP vs. Paz O. Montalvan, et al., G.R. No. 190336, June 27, 2012
[T]he rationale underlying the owner's right to seek an evaluation of the

contractor's work is the right to pay only the true value of the work as may be
reasonably determined under the circumstances. This is consistent with the law
against unjust enrichment under Article 22 of the Civil Code which states that
"[e]very person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without
just or legal ground, shall return the same to him." Expounding on this provision in a
recent case, we have held that "[t]he principle of unjust enrichment essentially
contemplates payment when there is no duty to pay, and the person who receives the
payment has no right to receive it."
R.V. Santos Company, Inc. vs. Belle Corp., G.R. Nos. 159561-62, October 3, 2012
It is notable that the confusion on the amounts of compensation arose from the
parties' inability to agree on the fees that respondents should receive. Considering the
absence of an agreement, and in view of respondents' constructive fulfillment of their
obligation, the Court has to apply the principle of quantum meruit in determining how
much was still due and owing to respondents. Under the principle of quantum meruit,
a contractor is allowed to recover the reasonable value of the services rendered despite
the lack of a written contract. The measure of recovery under the principle should
relate to the reasonable value of the services performed. The principle prevents undue
enrichment based on the equitable postulate that it is unjust for a person to retain any
benefit without paying for it. Being predicated on equity, the principle should only be
applied if no express contract was entered into, and no specific statutory provision
was applicable.
Int'l. Hotel Corp. vs. Francisco B. Joaquin, Jr., et al., G.R. No. 158361, April 10, 2013
Art. 23 - Obligation to indemnify when one benefits from an act or event
which causes damage to another's property
Art. 24 - Protection for party who is at a disadvantage
Francisco Rayos vs. Ponciano G. Hernandez, G.R. No. 169079, February 12, 2007
Chua Tee Dee vs. Court of Appeals, G.R. No. 135721, May 27, 2004
Sps. James and Florence Tan vs. Carmina Mandap, G.R. No. 150925, May 27, 2004
Spouses Silvestre and Celia Pascual vs. Rodrigo V. Ramos, G.R. No. 144712, July 4,
2002
Pepito Bernardo vs. Court of Appeals, G.R. No. 107791, May 12, 2000
Sps. Narciso and Dolores Rongavilla vs. Court of Appeals, et al., G.R. 83974, August
17, 1998
Augusto Benedicto Santos III vs. Northwest Orient Airlines, G.R. No. 101538, June 23,
1992
While contracts of adhesion may be struck down as void and unenforceable for
being subversive of public policy, the same can only be done when, under the
circumstances, the weaker party is imposed upon in dealing with the dominant
bargaining party and is reduced to the alternative of taking it or leaving it, completely
depriving the former of the opportunity to bargain on equal footing.
Keppel Cebu Shipyard, Inc. vs. Pioneer Insurance and Surety Corp., G.R. Nos.
180880-81 & 180896-97, September 18, 2012
Art. 26 - Respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons
Rodrigo Concepcion vs. Court of Appeals, et al., G.R. No. 120706, January 31, 2000
The philosophy behind Art. 26 underscores the necessity for its inclusion in our
civil law. The Code Commission stressed in no uncertain terms that the human
personality must be exalted. The sacredness of human personality is a concomitant
consideration of every plan for human amelioration. The touchstone of every system
of law, of the culture and civilization of every country, is how far it dignifies man. If
the statutes insufficiently protect a person from being unjustly humiliated, in short, if
human personality is not exalted — then the laws are indeed defective. Thus, under
this article, the rights of persons are amply protected, and damages are provided for
violations of a person's dignity, personality, privacy and peace of mind. To add, a
violation of Article 26 of the Civil Code may also lead to the payment of moral
damages under Article 2219 (10) 75 of the Civil Code.
Unicapital, Inc. v. Consing, Jr., G.R. Nos. 175277, 175285 & 192073, September 11,
2013, citing Manaloto v. Veloso III, G.R. No. 171365, October 6, 2010
(2) - Meddling with or disturbing the private life or family relations of

another;
RCPI vs. Alfonso Verchez, et al., G.R. 164349, January 31, 2006
Blas F. Ople vs. Ruben D. Torres, et al., G.R. 127685, July 23, 1998
(3) - Intriguing to cause another to be alienated from his friends;
Jerome Castro vs. People of the Phil., G.R. 180832, July 23, 2008
(4) - Vexing or humiliating another on account of his religious beliefs, lowly

station in life, place of birth, physical defect, or other personal condition
MVRS Publications vs. Islamic Da'wah Council, G.R. No. 135306, January 28, 2003
Art. 27 - Action for damages when a public servant or employee refuses or

neglects to perform official duty
Philex Mining Corp. vs. Commissioner of Internal Revenue, G.R. No. 125704, August
28, 1998
Jose V. Nessia vs. Jesus M. Fermin, G.R. No. 102918, March 30, 1993
Domingo A. Tuzon vs. Court of Appeals, G.R. No. 90107, August 21, 1992
David P. Llorente vs. Sandiganbayan, G.R. No. 85464, October 3, 1991
Art. 28 - Unfair competition in agricultural, commercial or industrial

enterprises, or in labor
Calamba Medical Center, Inc. vs. NLRC, et al., G.R. No. 176484, November 25, 2008
Tatad vs. Secretary of Dept. of Energy, G.R. Nos. 124360 & 127867, November 5, 1997
The circulation of such list containing names of alleged union members intended to
prevent employment of workers for union activities similarly constitutes unfair labor
practice, thereby giving a right of action for damages by the employees prejudiced.
Calamba Medical Center, Inc. vs. NLRC, et al., G.R. No. 176484, November 25, 2008
Art. 29 - Civil action for damages
George Manantan vs. Court of Appeals, G.R. No. 107125, January 29, 2001
Remedios Nota Sapiera vs. Court of Appeals, G.R. No. 128927, September 14, 1999
Raul H. Sesbreno vs. Court of Appeals, G.R. No. 121433, September 23, 1996
Ruben Maniago vs. Court of Appeals, G.R. No. 104392, February 20, 1996
Roy Padilla vs. Court of Appeals, G.R. No. L-39999, May 31, 1984
People of the Phils. vs. Itong Amistad, G.R. No. L-34666, October 30, 1981
Civil liability is not extinguished by acquittal: (a) where the acquittal is based on
reasonable doubt; (b) where the court expressly declares that the liability of the
accused is not criminal but only civil in nature; and (c) where the civil liability is not
derived from or based on the criminal act of which the accused is acquitted.
Samson Ching vs. Clarita Nicdao, et al., G.R. No. 141181, April 27, 2007
Remedios Nota Sapiera vs. Court of Appeals, G.R. No. 128927, September 14, 1999
The civil action based on the delict is extinguished if there is a finding in the final
judgment in the criminal action that the act or omission from which the civil liability
may arise did not exist or where the accused did not commit the act or omission
imputed to him.
Samson Ching vs. Clarita Nicdao, et al., G.R. No. 141181, April 27, 2007
Anamer Salazar vs. People of the Phil., G.R. No. 151931, September 23, 2003
Art. 30 - Separate civil action to demand civil liability
People of the Phils. vs. Bayotas, G.R. No. 102007, September 2, 1994
Art. 31 - Civil case can proceed independently of criminal proceedings
Bobie Rose V. Frias vs. Flora San Diego-Sison, G.R. No. 155223, April 3, 2007
Pablito Murao, et al. vs. People of the Phil., G.R. 141485, June 30, 2005
Republic of the Phil. Thru the DPWH vs. Court of Appeals, G.R. No. 116463, June 10,
2003
Jose S. Cancio, Jr. vs. Emerenciana Isip, G.R. No. 133978, November 12, 2002
Eduardo Cojuangco, Jr. vs. Court of Appeals, G.R. No. 37404, November 18, 1991
Art. 32 - Liability for violations of rights and freedoms
Liwayway Vinzons-Chato vs. Fortune Tobacco Corp., G.R. No. 141309, December 23,
2008
Benjamin D. Obra vs. Court of Appeals, G.R. No. 120852, October 28, 1999
Lolito G. Aparicio vs. Ermelindo C. Andal, G.R. Nos. 86587-93, July 25, 1989
The remedy of petitioner against the warrantless search conducted on his vehicle is
civil.
Feliciano Galvante vs. Orlando C. Casimiro, et al., G.R. No. 162808, April 22, 2008
The general rule is that a public officer is not liable for damages which a person
may suffer arising from the just performance of his official duties and within the
scope of his assigned tasks. An officer who acts within his authority to administer the
affairs of the office which he/she heads is not liable for damages that may have been
caused to another, as it would virtually be a charge against the Republic, which is not
amenable to judgment for monetary claims without its consent. However, a public
officer is by law not immune from damages in his/her personal capacity for acts done
in bad faith which, being outside the scope of his authority, are no longer protected by
the mantle of immunity for official actions.
Liwayway Vinzons-Chato vs. Fortune Tobacco Corp., G.R. No. 141309, June 19, 2007
A public officer who directly or indirectly violates the constitutional rights of

another, may be validly sued for damages under Article 32 of the Civil Code even if
his acts were not so tainted with malice or bad faith.
The clear intention therefore of the legislature was to create a distinct cause of
action in the nature of tort for violation of constitutional rights, irrespective of the
motive or intent of the defendant. This is a fundamental innovation in the Civil Code,
and in enacting the Administrative Code pursuant to the exercise of legislative
powers, then President Corazon C. Aquino, could not have intended to obliterate this
constitutional protection on civil liberties.
Article 32 of the Civil Code specifies in clear and unequivocal terms a particular
specie of an "act" that may give rise to an action for damages against a public officer,
and that is, a tort for impairment of rights and liberties. Indeed, Article 32 is the
special provision that deals specifically with violation of constitutional rights by
public officers. All other actionable acts of public officers are governed by Sections
38 and 39 of the Administrative Code. While the Civil Code, specifically, the Chapter
on Human Relations is a general law, Article 32 of the same Chapter is a special and
specific provision that holds a public officer liable for and allows redress from a
particular class of wrongful acts that may be committed by public officers. Compared
thus with Section 38 of the Administrative Code, which broadly deals with civil
liability arising from errors in the performance of duties, Article 32 of the Civil Code
is the specific provision which must be applied in the instant case precisely filed to
seek damages for violation of constitutional rights.
[I]t is a basic principle of the law on public officers that a public official or
employee is under a three-fold responsibility for violation of duty or for a wrongful
act or omission. This simply means that a public officer may be held civilly,
criminally, and administratively liable for a wrongful doing. Thus, if such violation or
wrongful act results in damages to an individual, the public officer may be held civilly
liable to reimburse the injured party. If the law violated attaches a penal sanction, the
erring officer may be punished criminally. Finally, such violation may also lead to
suspension, removal from office, or other administrative sanctions. This
administrative liability is separate and distinct from the penal and civil liabilities.
Waldo Q. Flores, et al. vs. Antonio F. Montemayor, G.R. No. 170146, June 8, 2011,
citing Tecson v. Sandiganbayan, G.R. No. 123045, November 16, 1999
(6) The right against deprivation of property without due process of law.
Eduardo M. Cojuangco vs. Court of Appeals, G.R. No. 119398, July 2, 1999
Better Buildings vs. NLRC, G.R. No. 109714, December 15, 1997
(8) The right to the equal protection of the laws

(9) The right to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures
Silahis Int'l Hotel Inc., et al. vs. Rogelio S. Soluta, et al., G.R. 163087, G.R. No. 163087,
February 20, 2006
(10) The liberty of abode and of changing the same.

Paz S. Baens vs. Court of Appeals, G.R. No. L-57091, November 23, 1983
(16) The right of the accused to be heard by himself and counsel, to be

informed of the nature and cause of the accusation against him, to have a speedy
and public trial, to meet the witnesses face to face, and to have compulsory
process to secure the attendance of witness in his behalf
Sps. Antonio and Lorna Quisumbing vs. MERALCO, G.R. No. 142943, April 3, 2002
(19) Freedom of access to the courts

Last paragraph
Art. 33 - Civil action for damages in cases of defamation, fraud and physical
injuries
William Madarang, et al. vs. Court of Appeals, et al., G.R. No. 143044, July 14, 2005
Manolo P. Samson vs. Reynaldo B. Daway, G.R. Nos. 160054-55, July 21, 2004
Int'l Flavors & Fragrances (Phil.) vs. Merlin J. Argos, G.R. No. 130362, September 10,
2001
Espero Salao vs. Court of Appeals, G.R. No. 107725, January 22, 1998
Jose Bordador vs. Brigida D. Luz, G.R. No. 130148, December 15, 1997
People of the Phils. vs. Rogelio C. Bayotas, G.R. No. 102007, September 2, 1994
Prudential Bank vs. Intermediate Appellate Court, G.R. No. 74886, December 8, 1992
Eduardo Cojuangco, Jr. vs. Court of Appeals, G.R. No. 37404, November 18, 1991
Diong Bi Chu vs. Court of Appeals, G.R. No. 49588, December 21, 1990
Marcelo Jervoso vs. People of the Phils., G.R. No. 89306, September 13, 1990
Carmen L. Madeja vs. Felix T. Caro, G.R. No. L-51183, December 21, 1983
Art. 34 - Liability when member of police force refuses or fails to render aid
or protection
Manolo P. Samson vs. Reynaldo B. Daway, G.R. No. 160054-55, July 21, 2004
Art. 36 - Prejudicial questions
Reynaldo V. Tuanda vs. Sandiganbayan, G.R. No. 110544, October 17, 1995
Art. 41 - Intra-uterine life
People of the Phils. vs. Fernando Felipe, G.R. No. L-40432, July 19, 1982
Art. 42 - Effect of death upon the rights and obligations of the deceased
Teofila Ilagan-Mendoza, et al. vs. Court of Appeals, et al., G.R. No. 171374, April 8,
2008
Sections 40, 41 and 42 of the Civil Code do not provide at all a definition of death.
Moreover, while the Civil Code expressly provides that civil personality may be
extinguished by death, it does not explicitly state that only those who have acquired
juridical personality could die.
Death has been defined as the cessation of life. Life is not synonymous with civil
personality. One need not acquire civil personality first before he/she could die. Even
a child inside the womb already has life. No less than the Constitution recognizes the
life of the unborn from conception, that the State must protect equally with the life of
the mother. If the unborn already has life, then the cessation thereof even prior to the
child being delivered, qualifies as death.
Continental Steel Mfg. Corp. vs. Allan S. Montaño, et al., G.R. No. 182836, October 13,
2009
Art. 44 - Juridical persons
Milagros Joaquino vs. Lourdes Reyes, G.R. No. 154645, July 13, 2004
Gloria Santos Dueñas vs. Santos Subdivision Homeowners Assn., G.R. No. 149417,
June 4, 2004
Board of Optometry vs. Angel B Colet, G.R. No. 122241, July 30, 1996
Yao Ka Sin Trading vs. Court of Appeals, G.R. No. 53820, June 15, 1992
Genlite Industries is merely the DTI-registered trade name or style of the

respondent by which he conducted his business. As such, it does not exist as a
separate entity apart from its owner, and therefore it has no separate juridical
personality to sue or be sued. As the sole proprietor of Genlite Industries, there is no
question that the respondent is the real party in interest who stood to be directly
benefited or injured by the judgment in the complaint below. There is then no
necessity for Genlite Industries to be impleaded as a party-plaintiff, since the
complaint was already filed in the name of its proprietor, Engr. Luis U. Parada. To
heed the petitioner's sophistic reasoning is to permit a dubious technicality to frustrate
the ends of substantial justice.
S.C. Megaworld Construction Development Corp. v. Parada, G.R. No. 183804,
September 11, 2013
Art. 50 - The domicile of natural persons is the place of their habitual
residence
Agapito A. Aquino vs. COMELEC, G.R. No. 120265, September 18, 1995
Imelda Romualdez-Marcos vs. COMELEC, G.R. No. 119976, September 18, 1995
Antonio Y. Co vs. Electoral Tribunal, G.R. No. 92191-92, July 30, 1991
Art. 53 - Requisites of marriage
Republic of the Phils. vs. Jose A. Dayot, G.R. Nos. 175581 & 179474, March 28, 2008
For a marriage to be deemed void, the absence of a marriage license must be

apparent on the marriage contract.
To be considered void on the ground of absence of a marriage license, the law

requires that the absence of such marriage license must be apparent on the marriage
contract, or at the very least, supported by a certification from the local civil registrar
that no such marriage license was issued to the parties.
Restituto M. Alcantara vs. Rosita A. Alcantara, et al., G.R. No. 167746, August 28, 2007
Art. 58 - No marriage shall be solemnized without a license
Republic of the Philippines vs. Jose A. Dayot, G.R. Nos. 175581 & 179474, March 28,
2008
Art. 76 - When no marriage license is necessary
Evangeline Leda vs. Trebonian Tabang, A.C. No. 2505, February 21, 1992
Construction of Five-Year Common Law Cohabitation Period
The five-year common-law cohabitation period under Article 76 means a five-year

period computed back from the date of celebration of marriage, and refers to a period
of legal union had it not been for the absence of a marriage. It covers the years
immediately preceding the day of the marriage, characterized by exclusivity —
meaning no third party was involved at any time within the five years — and
continuity that is unbroken.
Republic of the Phil. vs. Jose A. Dayot, G.R. No. 175581, March 28, 2008
Engrace Niñal vs. Norma Bayadog, G.R. No. 133778, March 14, 2000
Art. 78 - Recognition of the right of Muslims to contract marriage in

accordance with their customs and rites
Neng "Kagui Kadiguia" Malang vs. Corocoy Moson, G.R. No. 119064, August 22, 2000
Art. 80 (3) - Solemnized without a marriage license, save marriages of

exceptional character
Art. 80 (4) - Bigamous and polygamous marriages
Filipina Y. Sy vs. Court of Appeals, G.R. No. 127263, April 12, 2000
Federico C. Suntay vs. Isabel Cojuangco-Suntay, G.R. No. 132524, December 29,
1998
Maria Apiag, et al. vs. Esmeraldo G. Cantero, A.M. MTJ-95-1070, February 12, 1997
Maria Rosario De Santos vs. Adoracion G. Angeles, G.R. No. 105619, December 12,
1995
Lilia Oliva Wiegel vs. Alicia V. Sempio-Diy, G.R. No. L-53703, August 19, 1986
Art. 81 - Incestuous marriages
1998
Art. 82 - Void marriages
1998
Art. 83 (2) - When subsequent marriage during lifetime of first spouse is

allowed
Ofelia P. Ty vs. Court of Appeals, G.R. No. 127406, November 27, 2000
Antonia Armas vs. Marietta Calisterio, G.R. No. 136467, April 6, 2000
1998
Nenita Bienvenido vs. Court of Appeals, G.R. No. 111717, October 24, 1994
Republic of the Phil. vs. Gregorio Nolasco, G.R. No. 94053, March 17, 1993
Art. 85 (3) - Either party was of unsound mind
1998
Art. 89 (par. 2) - Children conceived of voidable marriages before the decree

of annulment shall be considered as legitimate
1998
1995
Art. 101 - No decree of legal separation shall be promulgated upon a

stipulation of facts or by confession of judgment.
Enrico L. Pacete vs. Glicerio V. Carriaga, Jr., G.R. No. L-53880, March 17, 1994
Art. 103 - An action for legal separation shall in no case be tried before six
months shall have elapsed since the filing of the petition.
Enrico L. Pacete vs. Glicerio V. Carriaga, Jr., G.R. No. L-53880, March 17, 1994
Art. 106 (2) - Effect of decree of legal separation on property relations
Angelica Ledesma vs. Intestate Estate of Cipriano Pedrosa, G.R. No. 102126, March
12, 1993
Art. 110 - Residence of family
Imelda Romualdez-Marcos vs. COMELEC, G.R. No. 119976, September 18, 1995
Art. 113 (2) - Exception to rule that husband must be joined in all suits by wife
Josefina Santos vs. Intermediate Appellate Court, G.R. No. L-66671, October 28, 1986
Art. 117 - Exercise by wife of profession or occupation
Nancy Go vs. Court of Appeals, G.R. No. 114791, May 29, 1997
Art. 119 - Agreement as to property relations
Lorea De Ugalde vs. Jon De Ysasi, G.R. No. 130623, February 29, 2008
Art. 126 - Donations by reason of marriage
Donation propter nuptias of real property made in a private instrument before the
New Civil Code took effect on August 30, 1950 is void.
Under the Old Civil Code, donations propter nuptias must be made in a public
instrument in which the property donated must be specifically described. Article 1328
of the Old Civil Code provides that gifts propter nuptias are governed by the rules
established in Title 2 of Book 3 of the same Code. Article 633 of that title provides
that the gift of real property, in order to be valid, must appear in a public document. It
is settled that a donation of real estate propter nuptias is void unless made by public
instrument.
The Heirs of Marcelino Doronio, et al. vs. Heirs of Fortunato Doronio, et al., G.R. No.
169454, December 27, 2007
Art. 127 - Rules governing donations by reason of marriage
Romana Locquiao Valencia vs. Benito A. Locquiao, G.R. No. 122134, October 3, 2003
Art. 129 - Express acceptance is not necessary for the validity of donations by
reason of marriage
Romana Locquiao Valencia vs. Benito A. Locquiao, G.R. No. 122134, October 3, 2003
Art. 133 - Donations between spouses
Emilie T. Sumbad vs. Court of Appeals, G.R. No. 106060, June 21, 1999
Cornelia Matabuena vs. Petronila Cervantes, G.R. No. L-28771, March 31, 1971
Art. 135 - Paraphernal property
Art. 136 - The wife retains ownership of paraphernal property
Art. 142 - Common fund in conjugal partnership of gains
What is more, under the conjugal partnership of gains established by Article 142 of
the Civil Code, the husband and the wife place only the fruits of their separate
property and incomes from their work or industry in the common fund. . . . This
means that they continue under such property regime to enjoy rights of ownership
over their separate properties. Consequently, to automatically change the marriage
settlements of couples who got married under the Civil Code into absolute community
of property in 1988 when the Family Code took effect would be to impair their
acquired or vested rights to such separate properties.
Efren Pana vs. Heirs of Jose Juanite, Sr., et al., G.R. No. 164201, December 10, 2012
Now, when a couple enters into a regime of conjugal partnership of gains under
Article 142 of the Civil Code, "the husband and the wife place in common fund the
fruits of their separate property and income from their work or industry, and divide
equally, upon the dissolution of the marriage or of the partnership, the net gains or
benefits obtained indiscriminately by either spouse during the marriage." From the
foregoing provision, each of the couple has his and her own property and debts. The
law does not intend to effect a mixture or merger of those debts or properties between
the spouses. Rather, it establishes a complete separation of capitals.
Brigido B. Quiao vs. Rita C. Quiao, et al., G.R. No. 176556, July 4, 2012 citing Abalos
vs. Macatangay, Jr., 482 Phil. 877-894 (2004)
Art. 143 - All property of the conjugal partnership of gains is owned in

common by husband and wife
Art. 144 - Co-ownership
Eustaquio Mallilin vs. Ma. Elvira Castillo, G.R. No. 136803, June 16, 2000
Guillerma Tumlos vs. Mario Fernandez, G.R. No. 137650, April 12, 2000
1998
Antonio A. S. Valdes vs. RTC, Branch 102, Quezon City, G.R. No. 122749, July 31,
1996
Josephine B. Belcodero vs. Court of Appeals, G.R. No. 89667, October 20, 1993
Art. 145 - Conjugal partnership shall commence on the date of celebration of

the marriage
Art. 148 (2) - Exclusive property: that which is acquired during the marriage
by lucrative title
Alfonso Tan vs. Court of Appeals, G.R. No. 120594, June 10, 1997
Art. 153 (1) - Conjugal partnership property
Sps. Virgilio and Michelle Castro vs. Romeo V. Miat, G.R. No. 143297, February 11,
2003
Art. 158 (par. 1) - Ownership of improvements made on separate property of

spouse
As the respondents were married during the effectivity of the Civil Code, its
provisions on conjugal partnership of gains (Articles 142 to 189) should have
governed their property relations. However, with the enactment of the Family Code on
August 3, 1989, the Civil Code provisions on conjugal partnership of gains, including
Article 158, have been superseded by those found in the Family Code (Articles 105 to
133).
Francisco Muñoz, Jr. vs. Erlinda Ramirez, et al., G.R. No. 156125, August 25, 2010
Art. 158 (par. 2) - Buildings constructed using partnership funds on land

owned by one of the spouses
Lucia Embrado vs. Court of Appeals, G.R. No. 51457, June 27, 1994
Art. 160 - Presumption that property of the marriage is conjugal
Walter Villanueva, et al. vs. Florentino Chiong, et al., G.R. No. 159889, June 5, 2008
Metropolitan Bank and Trust Co. vs. Nicholson Pascual, G.R. No. 163744, February 29,
2008
Alfredo Ching vs. Court of Appeals, G.R. No. 124642, February 23, 2004
Flordeliza Calpatura Flora vs. Roberto Prado, G.R. No. 156879, January 20, 2004
Milagros Manongsong vs. Felomena Jumaquio Estimo, G.R. No. 136773, June 25,
2003
Teresita C. Francisco vs. Court of Appeals, G.R. No. 102330, November 25, 1998
Alfonso Tan vs. Court of Appeals, G.R. No. 120594, June 10, 1997
Paulino Estonina vs. Court of Appeals, G.R. No. 111547, January 27, 1997
Remedios G. Salvador vs. Court of Appeals, G.R. No. 109910, April 5, 1995
Bonifacio Olegario vs. Court of Appeals, G.R. No. 104892, November 14, 1994
Ramon C. Ong vs. Court of Appeals, G.R. No. 63025, November 29, 1991
Diosdidit Cuenca vs. Restituto Cuenca, G.R. No. 72321, December 8, 1988
Properties acquired during the marriage are presumed to belong to the conjugal
partnership.
All properties acquired during the marriage are disputably presumed to belong to
the conjugal partnership. As a condition for the operation of [Article 160], in favor of
the conjugal partnership, the party who invokes the presumption must first prove that
the property was acquired during the marriage. The presumption may be rebutted only
with strong, clear, categorical and convincing evidence. There must be strict proof of
the exclusive ownership of one of the spouses, and the burden of proof rests upon the
party asserting it.
Sps. Charlito and Annie Mesa Coja vs. Court of Appeals, et al., G.R. No. 151153,
December 10, 2007
Art. 161(1) - Obligations of the conjugal partnership
Alfredo Ching vs. Court of Appeals, G.R. No. 124642, February 23, 2004
Purita Alipio vs. Court of Appeals, G.R. No. 134100, September 29, 2000
Ayala Investment & Development Corp. vs. Court of Appeals, G.R. No. 118305,
February 12, 1998
Estela Costuna vs. Laureana Domondon, G.R. No. 82753, December 19, 1989
Art. 165 - Husband is the administrator of the conjugal partnership
Titan Construction Corp. vs. Manuel A. David, Sr., et al., G.R. No. 169548, March 15,
2010
Sps. Antonio and Lucy Vera Cruz vs. Lucy Calderon, G.R. No. 160748, July 14, 2004
Telesforo Opena vs. Court of Appeals, G.R. No. 96227, February 1, 1993
Melania A. Roxas vs. Court of Appeals, G.R. No. 92245, June 26, 1991
Art. 166 - The husband cannot alienate real property of the conjugal
partnership without the wife's consent
Vicente G. Villaranda vs. Sps. Honorio and Ana Maria Y. Villaranda, G.R. No. 153447,
February 23, 2004
Telesforo Opena vs. Court of Appeals, G.R. No. 96227, February 1, 1993
Eufracio Rojas vs. Court of Appeals, G.R. No. 77668, December 26, 1990
To establish his status as a buyer for value in good faith, a person dealing with land
registered in the name of and occupied by the seller need only show that he relied on
the face of the seller's certificate of title. But for a person dealing with land registered
in the name of and occupied by the seller whose capacity to sell is restricted, such as
by Articles 166 and 173 of the Civil Code or Article 124 of the Family Code, he must
show that he inquired into the latter's capacity to sell in order to establish himself as a
buyer for value in good faith.
Sps. Wilfredo and Patrocinia Ravina vs. Mary Ann P. Villa Abrille, et al., G.R. No.
160708, October 16, 2009
Art. 172 - Wife cannot bind the conjugal partnership without the husband's
consent
Titan Construction Corp. vs. Manuel A. David, Sr., et al., G.R. No. 169548, March 15,
2010
The husband cannot alienate or encumber any conjugal real property without the
consent, express or implied, of the wife. Should the husband do so, then the contract is
voidable. . . However, the same article does not guarantee that the courts will declare
the annulment of the contract. Annulment will be declared only upon a finding that the
wife did not give her consent.
Sps. Joe and Estrella Ros vs. PNB-Laoag Branch, G.R. No. 170166, April 6, 2011
Art. 173 - Annulment of contract entered into by husband without wife's

consent
Vicente G. Villaranda vs. Sps. Honorio and Ana Maria Y. Villaranda, G.R. No. 153447,
February 23, 2004
Ignacia Aguilar-Reyes vs. Sps. Cipriano and Florentina Mijares, G.R. 143826, August
28, 2003
Sps. Godofredo and Carmen Alfredo vs. Sps. Armando and Adelia Borras, G.R. No.
144225, June 17, 2003
Christina Ayuste vs. Court of Appeals, G.R. No. 118784, September 2, 1999
Philippine National Bank vs. Elpidia Devaras, G.R. No. L-69269, March 14, 1990
The plain meaning attached to the plain language of the law is that the contract, in
its entirety, executed by the husband without the wife's consent, may be annulled by
the wife. (Bucoy v. Paulino, No. L-25775, April 26, 1968)
Heirs of Domingo Hernandez, Sr. vs. Plaridel Mingoa, Sr., et al., G.R. No. 146548,
December 18, 2009
Under Article 173 of the New Civil Code, an action for the annulment of any
contract entered into by the husband without the wife's consent must be filed (1)
during the marriage; and (2) within ten years from the transaction questioned. Where
any one of these two conditions is lacking, the action will be considered as having
been filed out of time. (Vera-Cruz v. Calderon, G.R. No. 160748, July 14, 2004)
December 18, 2009
In the recent case of Heirs of Ignacia Aguilar-Reyes v. Spouses Mijares, we

reiterated the rule that the husband cannot alienate or encumber any conjugal real
property without the consent, express or implied, of the wife, otherwise, the contract
is voidable. To wit: Indeed, in several cases the Court has ruled that such alienation or
encumbrance by the husband is void. The better view, however, is to consider the
transaction as merely voidable and not void. This is consistent with Article 173 of the
Civil Code pursuant to which the wife could, during the marriage and within 10 years
from the questioned transaction, seek its annulment.
December 18, 2009
Likewise, in the case of Heirs of Christina Ayuste v. Court of Appeals, we declared

that: There is no ambiguity in the wording of the law. A sale of real property of the
conjugal partnership made by the husband without the consent of his wife is voidable.
The action for annulment must be brought during the marriage and within ten years
from the questioned transaction by the wife. Where the law speaks in clear and
categorical language, there is no room for interpretation — there is room only for
application.
December 18, 2009
Art. 175 - Dissolution of the conjugal partnership of gains
Art. 178 - The separation in fact between husband and wife without judicial
approval, shall not affect the conjugal partnership
Art. 178 (3) - Judicial separation of conjugal property
Prima Partosa-Jo vs. The Honorable Court of Appeals, G.R. No. 82606, December 18,
1992
Art. 188 - Support for surviving spouse and children from conjugal property
Hilario M. Ruiz vs. Court of Appeals, G.R. No. 118671, January 29, 1996
Art. 190 - Separation of property
Benigno Toda, Jr. vs. Court of Appeals, G.R. No. 78583-84, March 26, 1990
Art. 217 - Family relations
Salvador S. Esquivias vs. Court of Appeals, G.R. No. 119714, May 29, 1997
Gaudencio Guerrero vs. Regional Trial Court, G.R. No. 109068, January 10, 1994
Valentina G. Villanueva vs. Alfredo C. Florendo, G.R. No. L-33158, October 17, 1985
Art. 222 - No suit between family members without efforts to compromise
Pilar S. Vda. De Manalo vs. Court of Appeals, G.R. No. 129242, January 16, 2001
Salvador S. Esquivias vs. Court of Appeals, G.R. No. 119714, May 29, 1997
Art. 255 - Presumption of legitimacy of children
William Liyao, Jr. vs. Juanita Tanhoti-Liyao, G.R. No. 138961, March 7, 2002
Presumption of a child's legitimacy is not conclusive.
The presumption of legitimacy of the child, however, is not conclusive and

consequently, may be overthrown by evidence to the contrary.
Estate of Rogelio G. Ong vs. Joanne Rodjin Diaz, G.R. No. 171713, December 17,
2007
Art. 256 - Child presumed legitimate even if mother declares against

legitimacy or is sentenced as an adulteress
Milagros M. Barco vs. Court of Appeals, G.R. No. 120587, January 20, 2004
Carolina Abad Gonzales vs. Court of Appeals, G.R. No. 117740, October 30, 1998
Art. 263 - Action to impugn legitimacy
Ida C. Labagala vs. Nicolasa T. Santiago, G.R. No. 132305, December 4, 2001
Marissa Benitez vs. Court of Appeals, G.R. No. 105625, January 24, 1994
Art. 266 - Filiation proved by continuous possession of status of a legitimate

child
Leoncia Balogbog vs. Court of Appeals, G.R. No. 83598, March 7, 1997
Art. 267 - Legitimate filiation may be proved by any other means allowed by
Rules of Court and special laws
Leoncia Balogbog vs. Court of Appeals, G.R. No. 83598, March 7, 1997
Board of Commissioners (CID) vs. Joselito Dela Rosa, G.R. No. 95122-23, May 31,
1991
Art. 269 - Natural children
1995
Ma. Blyth B. Abadilla vs. Jose C. Tabiliran, Jr., A.M. No. MTJ-92-716, October 25, 1995
Artemio G. Ilano vs. Court of Appeals, G.R. No. 104376, February 23, 1994
Art. 270 - Legitimation
1995
Art. 271 - Legitimation of natural children by subsequent marriage
1995
Art. 276 - Recognition of natural children
Edna Padilla Mangulabnan vs. Intermediate Appellate Court, G.R. No. 71994, May 31,
1990
Art. 278 - How recognition may be made
Maria Jeanette C. Tecson vs. Comelec, G.R. Nos. 161434, 161634 & 161824, March 3,
2004
Sotenia Gono-Javier vs. Court of Appeals, G.R. No. 111994, December 29, 1994
Avelino Banaag vs. Manuel S. Bartolome, G.R. No. 76245, December 20, 1991
Victoria U. Baluyut vs. Felicidad S. Baluyut, G.R. No. 33659, June 14, 1990
Ligaya Gapusan-Chua vs. Court of Appeals, G.R. No. 46746, March 15, 1990
Jovita Quismundo vs. Workmen's Compensation Commission, G.R. No. L-33442,

October 23, 1984
Art. 279 - Minor cannot acknowledge natural child
Bienvenido Rodriguez vs. Court of Appeals, G.R. No. 85723, June 19, 1995
Art. 280 - Separate recognition by father or mother
John Paul E. Fernandez vs. Court of Appeals, G.R. No. 108366, February 16, 1994
Art. 281, par. 2 - When judicial approval of recognition is needed
Art. 283 - When father is obliged to recognize natural child
This provision contemplates compulsory recognition as distinguished from

voluntary recognition provided in Art. 278. The possession of status of a child does
not in itself constitute an acknowledgment; it is only a ground for a child to compel
recognition by his assumed parent. The provision provides the grounds for
compulsory recognition in an action which may be brought by the child.
October 23, 1984
Art. 283 (1) - In cases of rape, abduction or seduction, when the period of the
offense coincides more or less with that of the conception
People of the Phils. vs. Fernando Rafanan, G.R. No. 48362, February 28, 1990
Art. 283 (2) - When the child is in continuous possession of status of a child of the
alleged father by the direct acts of the latter or of his family
Miguela Campos Ong vs. Court of Appeals, G.R. No. 95386, May 29, 1997
Ma. Theresa R. Alberto vs. Court of Appeals, G.R. No. 86639, June 2, 1994
Avelino Banaag vs. Manuel S. Bartolome, G.R. No. 76245, December 20, 1991
Casimiro Mendoza vs. Court of Appeals, G.R. No. 86302, September 24, 1991

October 23, 1984
Art. 283 (4) - When the child has in his favor any evidence or proof that the
defendant is his father.
Bienvenido Rodriguez vs. Court of Appeals, G.R. No. 85723, June 19, 1995
Art. 285(1) - Action for recognition of natural children
Ernestina Bernabe vs. Carolina Alejo, G.R. No. 140500, January 21, 2002
Renato Cenido vs. Amadeo Apacionado, G.R. No. 132474, November 19, 1999
Jose E. Aruego, Jr. vs. Court of Appeals, G.R. No. 112193, March 13, 1996
Eutiquio Marquino vs. Intermediate Appellate Court, G.R. No. 72078, June 27, 1994
Ma. Theresa R. Alberto vs. Court of Appeals, G.R. No. 86639, June 2, 1994
Corito Ocampo Tayag vs. Court of Appeals, G.R. No. 95229, June 9, 1992
Art. 287 - Other illegitimate children
1990
Art. 289 - Investigation of paternity or maternity of children
Art. 291(3) - Acknowledged natural children
1990
Art. 294 - Claim for support
Tomas Eugenio, Sr. vs. Alejandro M. Velez, G.R. Nos. 85140 & 86470, May 17, 1990
Art. 301 - The right to receive support can neither be renounced nor
transmitted to a third person
Manuel De Asis vs. Court of Appeals, G.R. No. 127578, February 15, 1999
Art. 320 - Legal administrator of property of child under parental authority
Elena Lindain vs. Court of Appeals, G.R. No. 95305, August 20, 1992
Adelaida S. Maneclang vs. Juan T. Baun, G.R. No. 27876, April 22, 1992
When a father or mother is deemed legal administrator of his or her child's

property without giving a bond.
The father, or, in his absence, the mother, is considered legal administrator of the
property pertaining to the child under his or her parental authority without need of
giving a bond in case the amount of the property of the child does not exceed two
thousand pesos. Corollary to this, Rule 93, Section 7 of the Revised Rules of Court of
1964, applicable to this case, automatically designates the parent as legal guardian of
the child without need of any judicial appointment in case the latter's property does
not exceed two thousand pesos.
Nelson Cabales, et al. vs. Court of Appeals, et al., G.R. No. 162421, August 31, 2007
Art. 321 - Property acquired by unemancipated child belongs to him in

ownership
Anulina L. Vda. De Bogacki vs. Sancho Y. Inserto, G.R. No. L-39187, January 30, 1982
Art. 335 (1) - Who cannot adopt
Roderick Daoang vs. Municipal Judge, San Nicolas, Ilocos Norte, G.R. No. L-34568,
March 28, 1988
Art. 363 - No mother shall be separated from her child under 7 years of age
unless for compelling reasons
The task of choosing the parent to whom custody shall be awarded is not a
ministerial function to be determined by a simple determination of the age of a minor
child. Whether a child is under or over seven years of age, the paramount criterion
must always be the child's interests. Discretion is given to the court to decide who can
best assure the welfare of the child, and award the custody on the basis of that
consideration. In Unson III vs. Navarro (G.R. No. L-52242, November 17, 1980), we
laid down the rule that in all controversies regarding the custody of minors, the sole
and foremost consideration is the physical, education, social and moral welfare of the
child concerned, taking into account the respective resources and social and moral
situations of the contending parents": and in Medina vs. Makabali (G.R. No. L-26953,
March 28, 1969), where custody of the minor was given to a non-relative as against
the mother, then the country's leading civilist, Justice J.B.L. Reyes explained its basis
in this manner: . . . . While our law recognizes the right of a parent to the custody of
her child, courts must not lose sight of the basic principle that "in all questions on the
care, custody, education and property of children, the latter's welfare shall be
paramount" (Civil Code of the Philippines, Art. 363), and that for compelling reasons,
even a child under seven may be ordered separated from the mother (do.). This is as it
should be, for in the continual evolution of legal institutions, the patria potestas has
been transformed from the jus vitae ac necis (right of life and death) of the Roman
law, under which the offspring was virtually a chattel of his parents into a radically
different institution, due to the influence of Christian faith and doctrines. The
obligational aspect is now supreme. As pointed out by Puig Pena, now "there is no
power, but a task; no complex of rights (of parents) but a sum of duties; no
sovereignty, but a sacred trust for the welfare of the minor." As a result, the right of
parents to the company and custody of their children is but ancillary to the proper
discharge of parental duties to provide the children with adequate support, education,
moral, intellectual and civic training and development (Civil Code, Art. 356).
Nerissa Z. Perez vs. Court of Appeals, G.R. No. 118870, March 29, 1996
Reynaldo Espiritu vs. Court of Appeals, G.R. No. 115640, March 15, 1995
Art. 364 - Legitimate and legitimated children shall principally use the
surname of the father
In re: Estrella S. Alfon vs. Republic, G.R. No. L-51201, May 29, 1980
Art. 370 - Surname of married woman
Hatima C. Yasin vs. Shari'a District Court, G.R. No. 94986, February 23, 1995
Clearly, a married woman has an option, but not a duty, to use the surname of the
husband in any of the ways provided by Article 370 of the Civil Code. She is therefore
allowed to use not only any of the three names provided in Article 370, but also her
maiden name upon marriage. She is not prohibited from continuously using her
maiden name once she is married because when a woman marries, she does not
change her name but only her civil status. Further, this interpretation is in consonance
with the principle that surnames indicate descent.
Maria Virginia V. Remo vs. Secretary of Foreign Affairs, G.R. No. 169202, March 5,
2010
Article 370 in relation to Sec. 5 (d), RA 8239
The conflict between Article 370 of the Civil Code and Section 5 (d) of RA 8239 is
more imagined than real. RA 8239, including its implementing rules and regulations,
does not prohibit a married woman from using her maiden name in her passport. In
fact, in recognition of this right, the DFA allows a married woman who applies for a
passport for the first time to use her maiden name. Such an applicant is not required to
adopt her husband's surname.
In the case of renewal of passport, a married woman may either adopt her husband's
surname or continuously use her maiden name. If she chooses to adopt her husband's
surname in her new passport, the DFA additionally requires the submission of an
authenticated copy of the marriage certificate. Otherwise, if she prefers to continue
using her maiden name, she may still do so. The DFA will not prohibit her from
continuously using her maiden name.
However, once a married woman opted to adopt her husband's surname in her
passport, she may not revert to the use of her maiden name, except in the cases
enumerated in Section 5 (d) of RA 8239. These instances are: (1) death of husband,
(2) divorce, (3) annulment, or (4) nullity of marriage. Since petitioner's marriage to
her husband subsists, she may not resume her maiden name in the replacement
passport. Otherwise stated, a married woman's reversion to the use of her maiden
name must be based only on the severance of the marriage.
Even assuming RA 8239 conflicts with the Civil Code, the provisions of RA 8239
which is a special law specifically dealing with passport issuance must prevail over
the provisions of Title XIII of the Civil Code which is the general law on the use of
surnames. A basic tenet in statutory construction is that a special law prevails over a
general law.
Maria Virginia V. Remo vs. Secretary of Foreign Affairs, G.R. No. 169202, March 5,
2010
Art. 371 - Surname of wife in case of annulment of marriage
Art. 372 -Surname of wife in case of legal separation
Art. 373 - Surname of widow
Art. 376 - No person can change his name or surname without judicial
authority
The "change of name" contemplated under Article 376 and Rule 103 must not be
confused with Article 412 and Rule 108. A change of one's name under Rule 103 can
be granted, only on grounds provided by law. In order to justify a request for change
of name, there must be a proper and compelling reason for the change and proof that
the person requesting will be prejudiced by the use of his official name. To assess the
sufficiency of the grounds invoked therefor, there must be adversarial proceedings.
Republic of the Phil. vs. Merlyn Mercadera, G.R. No. 186027, December 8, 2010
Essentially, a change of name does not define or effect a change of one's existing
family relations or in the rights and duties flowing therefrom. It does not alter one's
legal capacity or civil status. However, "there could be instances where the change
applied for may be open to objection by parties who already bear the surname desired
by the applicant, not because he would thereby acquire certain family ties with them
but because the existence of such ties might be erroneously impressed on the public
mind." Hence, in requests for a change of name, "what is involved is not a mere
matter of allowance or disallowance of the request, but a judicious evaluation of the
sufficiency and propriety of the justifications advanced . . . mindful of the consequent
results in the event of its grant . . . ."
Republic of the Phil. vs. Merlyn Mercadera, G.R. No. 186027, December 8, 2010
R.A. No. 9048 now governs the change of first name.
The State has an interest in the names borne by individuals and entities for
purposes of identification. A change of name is a privilege, not a right. Petitions for
change of name are controlled by statutes. Article 376 was amended by RA 9048
(Clerical Error Law) [and the latter] now governs the change of first name. It vests the
power and authority to entertain petitions for change of first name to the city or
municipal civil registrar or consul general concerned. Under the law, therefore,
jurisdiction over applications for change of first name is now primarily lodged with
the aforementioned administrative officers. 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. It likewise lays down the corresponding venue, form and
procedure. In sum, the remedy and the proceedings regulating change of first name are
primarily administrative in nature, not judicial.
2007
Republic of the Phils. vs. Court of Appeals, G.R. No. 97906, May 21, 1992
Art. 390 - Presumption of death
Ma. Blyth B. Abadilla vs. Jose C. Tabiliran, Jr., A.M. No. MTJ-92-716, October 25, 1995
Art. 407 - Civil register
Republic of the Phils. vs. Jennifer B. Cagandahan, G.R. No. 166676, September 12,
2008
Hubert Tan Co vs. Civil Register of Manila, G.R. No. 138496, February 23, 2004
In Re: Flaviano Zapanta vs. Local Civil Registrar, G.R. No. 55380, September 26, 1994
Sex reassignment is not among those acts or events mentioned by law.
Article 407 of the Civil Code authorizes the entry in the civil registry of certain acts
(such as legitimations, acknowledgments of illegitimate children and naturalization),
events (such as births, marriages, naturalization and deaths) and judicial decrees (such
as legal separations, annulments of marriage, declarations of nullity of marriages,
adoptions, naturalization, loss or recovery of citizenship, civil interdiction, judicial
determination of filiation and changes of name). These acts, events and judicial
decrees produce legal 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.
2007
The term "sex" is not something alterable through surgery or something that allows
a post-operative male-to-female transsexual to be included in the category "female."
When words are not defined in a statute they are to be given their common and
ordinary meaning in the absence of a contrary legislative intent. The words "sex,"
"male" and "female" as used in the Civil Register Law and laws concerning the civil
registry (and even all other laws) should therefore be understood in their common and
ordinary usage, there being no legislative intent to the contrary. In this connection, sex
is defined as "the sum of peculiarities of structure and function that distinguish a male
from a female" or "the distinction between male and female." Female is "the sex that
produces ova or bears young" and male is "the sex that has organs to produce
spermatozoa for fertilizing ova." Thus, the words "male" and "female" in everyday
understanding do not include persons who have undergone sex reassignment.
Furthermore, "words that are employed in a statute which had at the time a
well-known meaning are presumed to have been used in that sense unless the context
compels to the contrary." Since the statutory language of the Civil Register Law was
enacted in the early 1900s and remains unchanged, it cannot be argued that the term
"sex" as used then is something alterable through surgery or something that allows a
post-operative male-to-female transsexual to be included in the category "female." For
these reasons, while petitioner may have succeeded in altering his body and
appearance through the intervention of modern surgery, no law authorizes the change
of entry as to sex in the civil registry for that reason. Thus, there is no legal basis for
his petition for the correction or change of the entries in his birth certificate.
2007
A Civil Registry Office cannot record a divorce decree based on mere presentation
of the decree.
The law requires the entry in the civil registry of judicial decrees that produce legal
consequences touching upon a person's legal capacity and status, i.e., those affecting
"all his personal qualities and relations, more or less permanent in nature, not
ordinarily terminable at his own will, such as his being legitimate or illegitimate, or
his being married or not." A judgment of divorce is a judicial decree, although a
foreign one, affecting a person's legal capacity and status that must be recorded. In
fact, Act No. 3753 or the Law on Registry of Civil Status specifically requires the
registration of divorce decrees in the civil registry. But while the law requires the
entry of the divorce decree in the civil registry, the law and the submission of the
decree by themselves do not ipso facto authorize the decree's registration. The law
should be read in relation with the requirement of a judicial recognition of the foreign
judgment before it can be given res judicata effect.
Gerbert R. Corpuz vs. Daisylyn Tirol Sto. Tomas, et al., G.R. No. 186571, August 11,
2010
Art. 408 - Entries in the civil registry
2008
Art. 408 (1) - Entries in civil registry: Births
Art. 410 - Books of the civil register considered public documents and prima
facie evidence of facts therein
Republic of the Phils. vs. T.A.N. Properties, Inc., G.R. No. 154953, June 26, 2008
Marissa Benitez vs. Court of Appeals, G.R. No. 105625, January 24, 1994
As public documents, they are admissible in evidence even without further proof of
their due execution and genuineness. Thus, the RTC erred when it disregarded said
documents on the sole ground that the petitioner did not present the records custodian
of the NSO who issued them to testify on their authenticity and due execution since
proof of authenticity and due execution was not anymore necessary. Moreover, not
only are said documents admissible, they deserve to be given evidentiary weight
because they constitute prima facie evidence of the facts stated therein.
Iwasawa v. Gangan, G.R. No. 204169, September 11, 2013
Art. 412 - No entry in a civil register shall be changed or corrected without

judicial order
2008
Republic of the Phils. vs. Petronio L. Benemerito, G.R. No. 146963, March 15, 2004
Marcelo Lee vs. Court of Appeals, G.R. No. 118387, October 11, 2001
Republic of the Phils. vs. Gladys C. Labrador, G.R. No. 132980, March 25, 1999
Republic of the Phils. vs. Court of Appeals, G.R. No. 103695, March 15, 1996
In Re: Flaviano Zapanta vs. Local Civil Registrar, G.R. No. 55380, September 26, 1994
Republic of the Phils. vs. Napoleon R. Flojo, G.R. No. L-49703, July 31, 1987
Republic of the Phils. vs. Delia P. Medina, G.R. No. L-45030, December 15, 1982
Republic of the Phils. vs. Florentina C. Caparosso, G.R. No. L-32746, August 31, 1981
In Re: Kumala Salim Wing vs. Ahmad Abubakar, G.R. No. L-25168, January 31, 1981
Ty Kong Tin Vs. Republic of the Phils., G.R. No. L-5609, February 5, 1954
The correction or change of entry in the civil registry relative to clerical or

typographical errors can now be made through administrative proceedings and
without the need for judicial order.
The determination of a person's sex appearing in his birth certificate is a legal issue
and the court must look to the statutes. In this connection, Article 412 of the Civil
Code provides: No entry in the civil register shall be changed or corrected without a
judicial order. Together with Article 376 of the Civil Code, this provision was
amended by RA 9048 in so far as clerical or typographical errors are involved. The
correction or change of such matters can now be made through administrative
proceedings and without the need for a judicial order. In effect, RA 9048 removed
from the ambit of Rule 108 of the Rules of Court the correction of such errors. Rule
108 now applies only to substantial changes and corrections in entries in the civil
register.
2007
The local civil registrar has primary, not exclusive, jurisdiction over such petitions
for correction of clerical errors and change of first name or nickname.
Indeed, there was no intent on the part of the lawmakers to remove the authority of
the trial courts to make judicial corrections of entries in the civil registry. It can thus
be concluded that the local civil registrar has primary, not exclusive, jurisdiction over
such petitions for correction of clerical errors and change of first name or nickname,
with R.A. No. 9048 prescribing the procedure that the petitioner and local civil
registrar should follow.
Re: Final Report on the Judicial Audit Conducted at the RTC, Br. 67, Paniqui, Tarlac,
A.M. No. 06-7-414-RTC, October 19, 2007
The Rules of Court provides for requirements before a judgment may be annotated
in the civil registry.
The Rules of Court supplements Article 412 of the Civil Code by specifically
providing for a special remedial proceeding by which entries in the civil registry may
be judicially cancelled or corrected. Rule 108 of the Rules of Court sets in detail the
jurisdictional and procedural requirements that must be complied with before a
judgment, authorizing the cancellation or correction, may be annotated in the civil
registry. It also requires, among others, that the verified petition must be filed with the
RTC of the province where the corresponding civil registry is located; that the civil
registrar and all persons who have or claim any interest must be made parties to the
proceedings; and that the time and place for hearing must be published in a newspaper
of general circulation.
Gerbert R. Corpuz vs. Daisylyn Tirol Sto. Tomas, et al., G.R. No. 186571, August 11,
2010
Art. 413 - All other matters pertaining to the registration of civil status shall
be governed by special laws
There is no special law in the country governing sex reassignment and its effects.
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: 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.
2007
Art. 415 - Immovable property
Marcelo R. Soriano vs. Sps. Ricardo and Rosalina Galit, G.R. No. 156295, September
23, 2003
Benguet Corporation vs. Central Board Of Assessment Appeals, G.R. No. 106041,
January 29, 1993
Art. 415 (5)

Star Two (SPV-AMC), Inc. vs. Paper City Corp. of the Phil., G.R. No. 169211, March 6,
2013
Serg's Products vs. PCI Leasing and Finance, G.R. No. 137705, August 22, 2000
Art. 415 (9)
Power barges are categorized as immovable property by destination, being in the

nature of machinery and other implements intended by the owner for an industry or
work which may be carried on in a building or on a piece of land and which tend
directly to meet the needs of said industry or work.
FELS Energy, Inc. vs. Province of Batangas, et al., G.R. Nos. 168557, February 16,
2007
Art. 420 - Property of public dominion (Regalian doctrine)
Philippine Ports Authority vs. City of Iloilo, G.R. No. 109791, July 14, 2003
Francisco I. Chavez vs. Public Estates Authority, G.R. No. 133250, July 9, 2002
Republic of the Phils. vs. Court of Appeals, G.R. No. 100709, November 14, 1997
Simplicio Binalay vs. Guillermo Manalo, G.R. No. 92161, March 18, 1991
Article 420 of the Civil Code classifies as properties of public dominion those that
are "intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads" and those that "are intended for
some public service or for the development of the national wealth." Properties of
public dominion are not only exempt from real estate tax, they are exempt from sale at
public auction. In Heirs of Mario Malabanan v. Republic, (G.R. No. 179987, April
29, 2009) the Court held that, "It is clear that property of public dominion, which
generally includes property belonging to the State, cannot be . . . subject of the
commerce of man."
City of Pasig vs. Republic of the Phil., G.R. No. 185023, August 24, 2011
The term "ports . . . constructed by the State" includes airports and seaports. The
Airport Lands and Buildings of MIAA are intended for public use, and at the very
least intended for public service. Whether intended for public use or public service,
the Airport Lands and Buildings are properties of public dominion. As properties of
public dominion, the Airport lands and Buildings are owned by the Republic and thus
exempt from real estate tax under Section 234(a) of the Local Government Code.
City of Pasig vs. Republic of the Phil., G.R. No. 185023, August 24, 2011, citing Manila
International Airport Authority vs. Court of Appeals, G.R. No. 155650, July 20, 2006
Here, the subject lands are reclaimed lands, specifically portions of the foreshore
and offshore areas of Manila Bay. As such, these lands remain public lands and form
part of the public domain. In the case of Chavez v. Public Estates Authority and
AMARI Coastal Development Corporation (433 Phil. 506, 589 (2002), the Court held
that foreshore and submerged areas irrefutably belonged to the public domain and
were inalienable unless reclaimed, classified as alienable lands open to disposition and
further declared no longer needed for public service. The fact that alienable lands of
the public domain were transferred to the PEA (now PRA) and issued land patents or
certificates of title in PEA's name did not automatically make such lands private. This
Court also held therein that reclaimed lands retained their inherent potential as areas
for public use or public service.
Republic of the Phil. vs. City of Parañaque, G.R. No. 191109, July 18, 2012
Art. 421 - Patrimonial property of the State
Francisco I. Chavez vs. Public Estates Authority, G.R. No. 133250, November 11, 2003
Art. 422 - Property of public dominion as patrimonial property of the State
Levy D. Macasiano vs. Roberto C. Diokno, G.R. No. 97764, August 10, 1992
Salvador H. Laurel vs. Ramon Garcia, G.R. Nos. 92013 & 92047, July 25, 1990
Art. 423 - Property of provinces, cities, and municipalities is divided into

property for public use and patrimonial property
Property for public use can be used by everybody but nobody can exercise over it
the rights of a private owner.
Properties of local government units under the Spanish Civil Code were limited to
properties for public use and patrimonial property. The same is still true under the
1950 Civil Code which governs us today. The principle has remained constant:
property for public use can be used by everybody, even by strangers or aliens, in
accordance with its nature; but nobody can exercise over it the rights of a private
owner.
In Re: Reversion/Recall of Reconstituted Titles in Tarlac Registry of Deeds, G.R. No.
171304, October 10, 2007
Art. 424 - Property of provinces, cities and municipalities
Levy D. Macasiano vs. Roberto C. Diokno, G.R. No. 97764, August 10, 1992
Schools, public markets and cemeteries are not for the free and indiscriminate use
of everyone.
Unlike a public square or a playground, schools, public markets and cemeteries are
not for the free and indiscriminate use of everyone. The determination of the persons
allowed to study in such schools, or put up stalls in the public market, or bury their
dead in public cemeteries are regulated by the government. As such, the subject
property is, under the Civil Code classification, patrimonial property, and the
Municipality may have the same registered in its name.
In Re: Reversion/Recall of Reconstituted Titles in Tarlac Registry of Deeds, G.R. No.
171304, October 10, 2007
Art. 427 - Ownership over things or rights
It bears stressing that "[o]wnership is defined as a relation in law by virtue of which

a thing pertaining to one person is completely subjected to his will in everything not
prohibited by law or the concurrence with the rights of another." The attributes of
ownership are: jus utendi or the right to possess and enjoy, jus fruendi or the right to
the fruits, jus abutendi or the right to abuse or consume, jus disponendi or the right to
dispose or alienate, and jus vindicandi or the right to recover or vindicate.
Hacienda Luisita, Inc. vs. Presidential Agrarian Reform Council, et al., G.R. No. 171101,
April 24, 2012
Art. 428 - Right of owner to dispose of a thing
The right to dispose of a thing without other limitations than those established by
law is an attribute of ownership.
Danilo Aluad, et al. vs. Zenaido Aluad, G.R. No. 176943, October 17, 2008
Under Article 428 of the New Civil Code, the owner has the right to dispose of a
thing without other limitations than those established by law. As an incident of
ownership therefore, there is nothing to prevent a landowner from donating his naked
title to the land. However, the new owner must respect the rights of the tenant.
Herminio Tayag vs. Amancia Lacson, G.R. No. 134971, March 25, 2004
PNB vs. Court of Appeals, G.R. No. 105760, July 7, 1997
Espiridion Tanpingco vs. Intermediate Appellate Court, G.R. No. 76225, March 31, 1992
Art. 429 - Right of owner or lawful possessor of a thing to exclude any person
from the enjoyment and disposal thereof
Aneco Realty and Dev't. Corp. vs. Landex Dev't. Corp., G.R. No. 165952, July 28, 2008
MWSS vs. Act Theater, G.R. No. 147076, June 17, 2004
PNB vs. Court of Appeals, G.R. No. 105760, July 7, 1997
People of the Phils. vs. Mamerto Narvaez, G.R. No. L-33466-67, April 20, 1983
Art. 430 - Owner may enclose or fence his land or tenements without
detriment to servitudes constituted thereon
People of the Phils. vs. Mamerto Narvaez, G.R. No. L-33466-67, April 20, 1983
Every owner has the right to enclose or fence his land or tenement by means of
walls, ditches, hedges or any other means. The right to fence flows from the right of
ownership.
Aneco Realty and Development Corp. vs. Landex Development Corp., G.R. No.
165952, July 28, 2008
Art. 431 - The owner of a thing cannot make use thereof in such manner as to
injure the rights of a third person
It must be stressed that the use of one's property is not without limitations. Article
431 of the Civil Code provides that "the owner of a thing cannot make use thereof in
such a manner as to injure the rights of a third person." SIC UTERE TUO UT
ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and
reciprocal duties which require that each must use his own land in a reasonable
manner so as not to infringe upon the rights and interests of others. Although we
recognize the right of an owner to build structures on his land, such structures must be
so constructed and maintained using all reasonable care so that they cannot be
dangerous to adjoining landowners and can withstand the usual and expected forces of
nature. If the structures cause injury or damage to an adjoining landowner or a third
person, the latter can claim indemnification for the injury or damage suffered.
Natividad V. Andamo vs. Intermediate Appellate Court, G.R. No. 74761, November 6,
1990
Art. 433 - Disputable presumption of ownership
One who claims to be the owner of a property possessed by another must bring the
appropriate judicial action for its physical recovery. The term "judicial process" could
mean no less than an ejectment suit or reivindicatory action, in which the ownership
claims of the contending parties may be properly heard and adjudicated. After all, the
actual possessor of a property enjoys a legal presumption of just title in his favor,
which must be overcome by the party claiming otherwise.
Candelaria Q. Dayot vs. Shell Chemical Co. (Phils.), Inc., G.R. No. 156542, June 26,
2007
PNB vs. Court of Appeals, G.R. No. 135219, January 17, 2002
This ex parte petition for the issuance of a writ of possession under Section 7 of
Act No. 3135 is not, strictly speaking, a "judicial process" as contemplated in Article
433 of the Civil Code. As a judicial proceeding for the enforcement of one's right of
possession as purchaser in a foreclosure sale, it is not an ordinary suit by which one
party "sues another for the enforcement of a wrong or protection of a right, or the
prevention or redress of a wrong."
PTA of St. Mathew Christian Academy, et al. vs. Metrobank, G.R. No. 176518, March 2,
2010
Art. 434 - Action to recover property
Leonor Delos Angeles vs. Court of Appeals, G.R. No. 57312, March 5, 1993
Settled is the principle that a party seeking to recover real property must rely on the
strength of her case rather than on the weakness of the defense. The burden of proof
rests on the party who asserts the affirmative of an issue. For he who relies upon the
existence of a fact should be called upon to prove that fact. Having failed to discharge
her burden to prove her affirmative allegations, we find that the trial court rightfully
dismissed respondent's complaint.
Modesto Palali vs. Juliet Awisan, G.R. No. 158385, February 12, 2010
Article 434 of the Civil Code provides that to successfully maintain an action to
recover the ownership of a real property, the person who claims a better right to it
must prove two (2) things: first, the identity of the land claimed; and second, his title
thereto. In regard to the first requisite, in an accion reinvindicatoria, the person who
claims that he has a better right to the property must first fix the identity of the land he
is claiming by describing the location, area and boundaries thereof. Anent the second
requisite, i.e., the claimant's title over the disputed area, the rule is that a party can
claim a right of ownership only over the parcel of land that was the object of the deed.
Cornelio del Fierro, et al. vs. Rene Seguiran, G.R. No. 152141, August 8, 2011
Art. 440 - Right of accession
Republic of the Phils. vs. Holy Trinity Realty Dev't. Corp, G.R. No. 172410, April 14,
2008
Art. 441 - What belongs to owner of property
An owner has the right to enjoy and dispose of a thing without other limitations
than those established by law. The right to enjoy includes the jus utendi or the right to
receive from the thing what it produces, and the jus abutendi, or the right to consume
the thing by its use. As provided for in Article 441 of the Civil Code, to the owner
belongs the natural fruits, the industrial fruits and the civil fruits. There are, however,
exceptions to this rule, as where the property is subject to a usufruct, in which case the
usufructuary gets the fruits.
Int'l. Hardwood and Veneer Co. of the Phils. vs. University of the Philippines, G.R. No.
521518, August 13, 1991
Art. 447 - When owner makes plantings, constructions or works with

materials of another
Heirs of Nicolas Y. Orosa vs. Eutropio Migrino, G.R. Nos. 99338-40, February 1, 1993
Jose Bagtas Jr. vs. Court of Appeals, G.R. No. 50732, August 10, 1989
Art. 448 - Right of owner to appropriate what has been built, planted or sown
in good faith
Art. 448 Applies Only to a Possessor in Good Faith
It is well settled that both Article 448 and Article 546 of the New Civil Code,
which allow full reimbursement of useful improvements and retention of the premises
until reimbursement is made, apply only to a possessor in good faith, i.e., one who
builds on land with the belief that he is the owner thereof. Verily, persons whose
occupation of a realty is by sheer tolerance of its owners are not possessors in good
faith.
Sps. Marcos and Victoria Esmaquel vs. Maria Coprada, G.R. No. 152423, December
15, 2010
National Housing Authority vs. Grace Baptist Church, G.R. No. 156437, March 1, 2004
Sps. Dario and Matilde Lacap vs. Jouvet Ong Lee, G.R. No. 142131, December 11,
2002
Rodolfo Morales vs. Court of Appeals, G.R. No. 117228, June 19, 1997
Heirs of Jaime Binuya vs. Court of Appeals, G.R. No. 100493, July 23, 1992
Rebecca Boyer-Roxas vs. Court of Appeals, G.R. No. 100866, July 14, 1992
By its clear language, Article 448 refers to a land whose ownership is claimed by
two or more parties, one of whom has built some works, or sown or planted
something. The building, sowing or planting may have been made in good faith or in
bad faith. The rule on good faith laid down in Article 526 of the Civil Code shall be
applied in determining whether a builder, sower or planter had acted in good faith.
Article 448 does not apply to a case where the owner of the land is the builder,
sower, or planter who then later loses ownership of the land by sale or donation. This
Court said so in Coleongco vs. Regalado: Article 361 of the old Civil Code is not
applicable in this case, for Regalado constructed the house on his own land before he
sold said land to Coleongco. Article 361 applies only in cases where a person
constructs a building on the land of another in good or in bad faith, as the case may
be. It does not apply to a case where a person constructs a building on his own land,
for then there can be no questions as to good or bad faith on the part of the builder.
Elsewise stated, where the true owner himself is the builder of works on his own
land, the issue of good faith or bad faith is entirely irrelevant.
Thus in strict point of law, Article 448 is not opposite to the case at bar.
Nevertheless, we believe that the provision therein on indemnity may be applied by
analogy considering that the primary intent of Article 448 is to avoid a state of forced
co-ownership and that the parties, including the two courts below, in the main agree
that Articles 448 and 546 of the Civil Code are applicable and indemnity for the
improvements may be paid although they differ as to the basis of the indemnity.
Pedro P. Pecson vs. Court of Appeals, G.R. No. 115814, May 26, 1995
Article 448 of the Civil Code is unequivocal that the option to sell the land on
which another in good faith builds, plants or sows on, belongs to the landowner.
The option is to sell, not to buy, and it is the landowner's choice. Not even a
declaration of the builder, planter, or sower's bad faith shifts this option to him per
Article 450 of the Civil Code. This advantage in Article 448 is accorded the
landowner because "his right is older, and because, by the principle of accession, he is
entitled to the ownership of the accessory thing." There can be no pre-emptive right to
buy even as a compromise, as this prerogative belongs solely to the landowner. No
compulsion can be legally forced on him, contrary to what petitioners asks from this
Court. Such an order would certainly be invalid and illegal. Thus, the lower courts
were correct in rejecting the petitioners' offer to buy the encroached land.
Rafael Benitez vs. Court of Appeals, G.R. No. 104828, January 16, 1997
Article 448 has been applied to improvements or portions of improvements built by

mistaken belief on land belonging to the adjoining owner.
Eden Ballatan vs. Court of Appeals, G.R. No. 125683, March 2, 1999
Article 448 of the Civil Code refers to a piece of land whose ownership is claimed
by two or more parties, one of whom has built some works (or sown or planted
something) and not to a case where the owner of the land is the builder, sower, or
planter who then later loses ownership of the land by sale or otherwise for, elsewise
stated, "where the true owner himself is the builder of works on his own land, the
issue of good faith or bad faith is entirely irrelevant."
PNB vs. Generoso De Jesus, G.R. No. 149295, September 23, 2003
Article 448 of the Civil Code applies only to a case where one builds on land in the
belief that he is the owner thereof and it does not apply where one's only interest in the
land is that of a lessee under a rental contract.
Marita Cabangis vs. Court of Appeals, G.R. No. 83722, August 9, 1991
Rosendo Balucanag vs. Alberto J. Francisco, G.R. No. L-33422, May 30, 1983
In a plethora of cases, this Court has held that Article 448 of the Civil Code, in
relation to Article 546 of the same Code, which allows full reimbursement of useful
improvements and retention of the premises until reimbursement is made, applies only
to a possessor in good faith, i.e., one who builds on land with the belief that he is the
owner thereof. It does not apply where one's only interest is that of a lessee under a
rental contract; otherwise, it would always be in the power of the tenant to "improve"
his landlord out of his property. plpecdtai
Federico Geminiano vs. Court of Appeals, G.R. No. 120303, July 24, 1996
Whether or not the provisions of Article 448 should apply to a builder in good faith
on a property held in common has been resolved in the affirmative in the case of
Spouses del Campo vs. Abesia, wherein the Court ruled that:
"The court a quo correctly held that Article 448 of the Civil Code cannot apply
where a co-owner builds, plants or sows on the land owned in common for then he
did not build, plant or sow upon land that exclusively belongs to another but of
which he is a co-owner. The co-owner is not a third person under the
circumstances, and the situation is governed by the rules of co-ownership.
"However, when, as in this case, the ownership is terminated by the partition

and it appears that the home of defendants overlaps or occupies a portion of 5
square meters of the land pertaining to plaintiffs which the defendants obviously
built in good faith, then the provisions of Article 448 of the new Civil Code should
apply. Manresa and Navarro Amandi agree that the said provision of the Civil
Code may apply even when there is a co-ownership if good faith has been
established."
In other words, when the co-ownership is terminated by a partition and it appears

that the house of an erstwhile co-owner has encroached upon a portion pertaining to
another co-owner which was however made in good faith, then the provisions of
Article 448 should apply to determine the respective rights of the parties.
Florencio Ignao vs. Intermediate Appellate Court, G.R. No. 72876, January 18, 1991
Article 448 of the Civil Code cannot apply where a co-owner builds, plants or sows
on the land owned in common for then he did not build, plant or sow upon land that
exclusively belongs to another but of which he is a co-owner. The co-owner is not a
third person under the circumstances, and the situation is governed by the rules of
co-ownership.
Concepcion Fernandez Del Ocampo vs. Bernarda Fernandez Abesia, G.R. No.
L-49219, April 15, 1988
The builder in good faith under Article 448 of the Civil Code, instead of being
outrightly ejected from the land, can compel the landowner to make a choice between
the two options: (1) to appropriate the building by paying the indemnity required by
law, or (2) sell the land to the builder. The landowner cannot refuse to exercise either
option and compel instead the owner of the building to remove it from the land. The
same benefit can be invoked by petitioner who is not the builder of the offending
structures but possesses them in good faith as buyer.
Tecnogas Phil. Mfg. Corp. vs. Court of Appeals, G.R. No. 108894, February 10, 1997
The rule that the choice under Article 448 of the Civil Code belongs to the owner
of the land is in accord with the principle of accession, i.e., that the accessory follows
the principal and not the other way around. Even as the option lies with the
landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse
to exercise either option and compel instead the owner of the building to remove it
from the land. The raison d'etre for this provision has been enunciated thus: Where
the builder, planter or sower has acted in good faith, a conflict of rights arises between
the owners, and it becomes necessary to protect the owner of the improvements
without causing injustice to the owner of the land. In view of the impracticability of
creating a state of forced co-ownership, the law has provided a just solution by giving
the owner of the land the option to acquire the improvements after payment of the
proper indemnity, or to oblige the builder or planter to pay for the land and the sower
the proper rent. He cannot refuse to exercise either option. It is the owner of the land
who is authorized to exercise the option, because his right is older, and because, by
the principle of accession, he is entitled to the ownership of the accessory thing.
Ophelia L. Tuatis vs. Sps. Eliseo and Visminda Escol, et al., G.R. No. 175399, October
27, 2009
The above-cited article covers cases in which the builders, sowers or planters
believe themselves to be owners of the land or, at least, to have a claim of title thereto.
The builder in good faith can compel the landowner to make a choice between
appropriating the building by paying the proper indemnity or obliging the builder to
pay the price of the land. The choice belongs to the owner of the land, a rule that
accords with the principle of accession, i.e., that the accessory follows the principal
and not the other way around. However, even as the option lies with the landowner,
the grant to him, nevertheless, is preclusive. He must choose one. He cannot, for
instance, compel the owner of the building to remove the building from the land
without first exercising either option. It is only if the owner chooses to sell his land,
and the builder or planter fails to purchase it where its value is not more than the value
of the improvements, that the owner may remove the improvements from the land.
The owner is entitled to such remotion only when, after having chosen to sell his land,
the other party fails to pay for the same.
Luciano Briones, et al. vs. Sps. Jose and Fe Macabagdal, et al., G.R. No. 150666,
August 3, 2010
Under Article 448 pertaining to encroachments in good faith, as well as Article 450
referring to encroachments in bad faith, the owner of the land encroached upon . . .
has the option to require respondent builder to pay the price of the land.
Mercy Vda. de Roxas vs. Our Lady's Foundation, Inc., G.R. No. 182378, March 6, 2013
In the event that the seller elects to sell the lot, "the price must be fixed at the
prevailing market value at the time of payment."
citing Ballatan vs. Court of Appeals, 63 Phil. 408, 423 (1999)
The present or current fair value of the land is to be reckoned at the time that the
landowner elected the choice, and not at the time that the property was purchased . . .:
Under the second option, Visminda may choose not to appropriate the
building and, instead, oblige Tuatis to pay the present or current fair value of
the land. The P10,000.00 price of the subject property, as stated in the
Deed of Sale on Installment executed in November 1989, shall no longer
apply, since Visminda will be obliging Tuatis to pay for the price of the
land in the exercise of Visminda's rights under Article 448 of the Civil
Code, and not under the said Deed. Tuatis' obligation will then be statutory,
and not contractual, arising only when Visminda has chosen her option under
Article 448 of the Civil Code.
Still under the second option, if the present or current value of the
land, the subject property herein, turns out to be considerably more than that
of the building built thereon, Tuatis cannot be obliged to pay for the subject
property, but she must pay Visminda reasonable rent for the same. Visminda
and Tuatis must agree on the terms of the lease; otherwise, the court will fix
the terms.
citing Tuatis vs. Spouses Escol, G.R. No. 175399, October 27, 2009
Art. 449 - Builder in bad faith
PNB vs. Generoso de Jesus, G.R. No. 149295, September 23, 2003
Art. 450 - Right of owner of land on which anything has been built, planted or
sown in bad faith
PNB vs. Generoso De Jesus, G.R. No. 149295, September 23, 2003
Tecnogas Phil. Mfg. Corp. vs. Court of Appeals, G.R. No. 108894, February 10, 1997
Under Article 448 pertaining to encroachments in good faith, as well as Article 450
referring to encroachments in bad faith, the owner of the land encroached upon . . .
has the option to require respondent builder to pay the price of the land.
In the event that the seller elects to sell the lot, "the price must be fixed at the
prevailing market value at the time of payment."
citing Ballatan vs. Court of Appeals, 63 Phil. 408, 423 (1999)
The present or current fair value of the land is to be reckoned at the time that the
landowner elected the choice, and not at the time that the property was purchased . . .:
Under the second option, Visminda may choose not to appropriate the
building and, instead, oblige Tuatis to pay the present or current fair value of
the land. The P10,000.00 price of the subject property, as stated in the
Deed of Sale on Installment executed in November 1989, shall no longer
apply, since Visminda will be obliging Tuatis to pay for the price of the
land in the exercise of Visminda's rights under Article 448 of the Civil
Code, and not under the said Deed. Tuatis' obligation will then be statutory,
and not contractual, arising only when Visminda has chosen her option under
Still under the second option, if the present or current value of the
land, the subject property herein, turns out to be considerably more than that
of the building built thereon, Tuatis cannot be obliged to pay for the subject
property, but she must pay Visminda reasonable rent for the same. Visminda
and Tuatis must agree on the terms of the lease; otherwise, the court will fix
the terms.
citing Tuatis vs. Spouses Escol, G.R. No. 175399, October 27, 2009
Art. 451 - When landowner is entitled to damages
Heirs of Ramon Durano vs. Angeles Sepulveda Uy, G.R. No. 136456, October 24, 2000
Art. 453 - When owner and builder, planter or sower are both in bad faith
Rebecca Boyer-Roxas vs. Court of Appeals, G.R. No. 100866, July 14, 1992
Art. 457 - Accretion
The reason behind the law giving the riparian owner the right to any land or
alluvion deposited by a river is to compensate him for the danger of loss that he
suffers because of the location of his land. If estates bordering on rivers are exposed
to floods and other evils produced by the destructive force of the waters and if by
virtue of lawful provisions, said estates are subject to incumbrances and various kinds
of easements, it is proper that the risk or danger which may prejudice the owner
thereof should be compensated by the right of accretion (Cortes vs. City of Manila, 10
Phil. 567).
Alfredo Yasay Del Rosario vs. Sps. Jose and Concordia Manuel, G.R. No. 153652,
January 16, 2004
Heirs of Navarro vs. Intermediate Appellate Court, G.R. No. 68166, February 12, 1997
Vda. De Nazareno vs. Court of Appeals, G.R. No. 98045, June 26, 1996
Pablito Meneses vs. Court Of Appeals, G.R. No. 82220, July 14, 1995
Gloria A. Ferrer vs. Antonio Bautista, G.R. No. 46963, March 14, 1994
Republic of the Phil. vs. Reynaldo M. Alon, G.R. No. 83804, July 18, 1991
Director of Lands vs. Court of Appeals, G.R. No. 31408, April 22, 1991
Eulogio Agustin vs. Intermediate Appellate Court, G.R. Nos. 66075-76, July 5, 1990
Angelica Viajar vs. Court of Appeals, G.R. No. 77294, December 12, 1988
Diogenes Tuason vs. Court of Appeals, G.R. No. L-48297, January 7, 1987
Republic of the Phils. vs. Court of Appeals, G.R. No. L-61647, October 12, 1984
Accretion benefits a riparian owner when the following requisites are present: (1)
that the deposit be gradual and imperceptible; (2) that it resulted from the effects of
the current of the water; and (c) that the land where accretion takes place is adjacent
to the bank of a river.
Jose Reynante vs. Court of Appeals, G.R. No. 95907, April 8, 1992
Art. 461 - Abandoned river beds
If the riparian owner is entitled to compensation for the damage to or loss of his
property due to natural causes, there is all the more reason to compensate him when
the change in the course of the river is effected through artificial means. The loss to
the petitioners of the land covered by the canal was the result of a deliberate act on the
part of the government when it sought to improve the flow of the Tripa de Gallina
creek. It was therefore obligated to compensate the Baeses for their loss.
Sps. Felix Baes and Rafaela Baes vs. Court of Appeals, G.R. No. 108065, July 6, 1993
The decrease in petitioner's land area and the corresponding expansion of

respondent's property were the combined effect of erosion and accretion respectively.
Art. 461 of the Civil Code is inapplicable. Petitioner cannot claim ownership over the
old abandoned riverbed because the same is inexistent. The riverbed's former location
cannot even be pinpointed with particularity since the movement of the Davao River
took place gradually over an unspecified period of time, up to the present.
Dionisia P. Bagaipo vs. Court of Appeals, G.R. No. 116290, December 8, 2000
Article 461 provides for compensation for the loss of the land occupied by the new
bed since it is believed more equitable to compensate the actual losers than to add
land to those who have lost nothing. Thus, the abandoned river bed is given to the
owner(s) of the land(s) onto which the river changed its course instead of the riparian
owner(s).
Rachel C. Celestial vs. Jesse Cachopero, G.R. No. 142595, October 15, 2003
If indeed a property was the former bed of a creek that changed its course and
passed through the property of the claimant, then, pursuant to Article 461, the
ownership of the old bed left to dry by the change of course was automatically
acquired by the claimant. Before such a conclusion can be reached, the fact of natural
abandonment of the old course must be shown, that is, it must be proven that the creek
indeed changed its course without artificial or man-made intervention. Thus, the
claimant . . . must prove three key elements by clear and convincing evidence. These
are: (1) the old course of the creek, (2) the new course of the creek, and (3) the change
of course of the creek from the old location to the new location by natural occurrence.
Sps. Crispin and Caridad Galang vs. Sps. Conrado and Fe de Kastro Reyes G.R. No.
184746, August 15, 2012
Art. 462 - New river bed on private estate
Sps. Beder Morandarte & Marina Febrera. vs. Court of Appeals, G.R. No. 123586,
August 12, 2004
Art. 463 - When current of river divides into branches
Maximo Jagualing vs. Court of Appeals, G.R. No. 94283, March 4, 1991
Art. 465 - Islands in non-navigable or non-floatable rivers
Maximo Jagualing vs. Court of Appeals, G.R. No. 94283, March 4, 1991
Art. 476 - An action to quiet title may be brought when there exists a cloud on
the title to real property or any interest therein
Robert San Pedro vs. Willy Ong, et al., G.R. No. 177598, October 17, 2008
Heirs of Susana De Guzman Tuazon vs. Court of Appeals, G.R. No. 125758, January
20, 2004
Agnes Gapacan, vs. Maria Gapacan Omipet, G.R. No. 148943, August 15, 2002
Lucio Robles vs. Court of Appeals, G.R. No. 123509, March 14, 2000
Benigna Secuya vs. Gerarda M. Vda. De Selma, G.R. No. 136021, February 22, 2000
Mario Z. Titong vs. Court of Appeals, G.R. No. 111141, March 6, 1998
Solid Homes, Inc. vs. Court of Appeals, G.R. No. 108451, April 11, 1997
Heirs of Celso Amarante vs. Court of Appeals, G.R. No. 76386, May 21, 1990
Action for Quieting of Title, Requisites
There are two indispensable requisites in order that an action to quiet title could
prosper: (1) that the plaintiff or complainant has a legal or an equitable title to or
interest in the real property subject of the action; and (2) that the deed, claim,
encumbrance or proceeding claimed to be casting cloud on his title must be shown to
be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.
Rosalina Clado-Reyes vs. Sps. Julius and Lily Limpe, G.R. No. 163876, July 9, 2008
Heirs of Enrique Diaz v. Virata, G.R. No. 162037, August 7, 2006
A claim of right based on acquisitive prescription or adverse possession constitutes

a removable cloud on title.
As a general rule, a cloud which may be removed by suit to quiet title is not created
by mere verbal or parol assertion of ownership of or an interest in property. This rule
is subject to qualification, where there is a written or factual basis for the asserted
right. Thus, a claim of right based on acquisitive prescription or adverse possession
has been held to constitute a removable cloud on title.
Efren Tandog, et al. vs. Renato Macapagal, et al., G.R. No. 144208, September 11,
2007
Eland Phil., Inc. vs. Azucena Garcia, et al., G.R. No. 173289, February 17, 2010
Whenever there is a cloud on title to real property or any interest in real property by
reason of any instrument, record, claim, encumbrance, or proceeding that is apparently
valid or effective, but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title. In such action, the competent court is tasked to
determine the respective rights of the complainant and the other claimants, not only to
place things in their proper places, and to make the claimant, who has no rights to said
immovable, respect and not disturb the one so entitled, but also for the benefit of both,
so that whoever has the right will see every cloud of doubt over the property
dissipated, and he can thereafter fearlessly introduce the improvements he may desire,
as well as use, and even abuse the property as he deems fit.
Teofisto Oño, et al. vs. Vicente N. Lim, G.R. No. 154270, March 9, 2010
There is no prescription when in an action for reconveyance, the claimant is in

actual possession of the property because this in effect is an action for quieting of
title:
[S]ince if a person claiming to be the owner thereof is in actual possession of

the property, as the defendants are in the instant case, the right to seek
reconveyance, which in effect seeks to quiet title to the property, does not
prescribe. The reason for this is that one who is in actual possession of a piece of
land claiming to be the owner thereof may wait until his possession is disturbed
or his title is attacked before taking steps to vindicate his right, the reason for the
rule being, that his undisturbed possession gives him a continuing right to seek
the aid of a court of equity to ascertain and determine the nature of the adverse
claim of a third party and its effect on his own title, which right can be claimed
only by one who is in possession.
PNB vs. Ciriaco Jumamoy, et al., G.R. No. 169901, August 3, 2011, citing Vda. de
Cabrera v. Court of Appeals, 335 Phil. 19 (1997)
The petitioner may vindicate its rights in the property through an action for quieting
of title, a common law remedy designed for the removal of any cloud upon, or doubt,
or uncertainty affecting title to real property. The action for quieting of title may be
brought whenever there is a cloud on title to real property or any interest in real
property by reason of any instrument, record, claim, encumbrance, or proceeding that
is apparently valid or effective, but is, in truth and in fact, invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said title. In the action, the
competent court is tasked to determine the respective rights of the plaintiff and the
other claimants, not only to put things in their proper places, and make the claimant,
who has no rights to the immovable, respect and not disturb the one so entitled, but
also for the benefit of both, so that whoever has the right will see every cloud of doubt
over the property dissipated, and he can thereafter fearlessly introduce any desired
improvements, as well as use, and even abuse the property.
Dare Adventure Farm Corp. vs. Court of Appeals, et al., G.R. No. 161122, September
24, 2012
Art. 477 - Plaintiff in action to quiet title must have legal or equitable title to,
or interest in, property
Ricardo Serrano vs. Court of Appeals, G.R. No. 77808, September 12, 1990
The rights to a person's succession are transmitted from the moment of his death.
Celestino Balus vs. Saturnino Balus, et al., G.R. No. 168970, January 15, 2010
Art. 484 - Co-ownership
Under Article 484 of the Civil Code, "there is co-ownership whenever the
ownership of an undivided thing or right belongs to different persons." A co-owner of
an undivided parcel of land is an "owner of the whole, and over the whole he
exercises the right of dominion, but he is at the same time the owner of a portion
which is truly abstract." On the other hand, there is no co-ownership when the
different portions owned by different people are already concretely determined and
separately identifiable, even if not yet technically described.
Manuel T. De Guia vs. Court of Appeals, G.R. No. 120864, October 8, 2003
Co Giok Lun vs. Jose Co, G.R. No. 184454, August 3, 2011
In order that a co-owner's possession may be deemed adverse to that of the cestui
que trust or the other co-owners, the following elements must concur:
1. The co-owner has performed unequivocal acts of repudiation of the

co-ownership amounting to an ouster of the cestui que trust or the other
co-owners;
2. Such positive acts of repudiation have been made known to the cestui que
trust or the other co-owners;
3. The evidence on the repudiation is clear and conclusive; and
4. His possession is open, continuous, exclusive, and notorious.

Heirs of Jose Reyes, Jr. vs. Amanda S. Reyes, et al., G.R. No. 158377, August 4, 2010
Art. 487 - Any co-owner may bring action for ejectment
Manuel T. De Guia vs. Court of Appeals, G.R. No. 120864, October 8, 2003
This article covers all kinds of action for the recovery of possession, i.e., forcible
entry and unlawful detainer (accion interdictal), recovery of possession (accion
publiciana), and recovery of ownership (accion de reivindicacion).
Leo Wee vs. George De Castro, et al., G.R. No. 176405, August 20, 2008
A co-owner is not even a necessary party to an action for ejectment, for complete
relief can be afforded even in his absence, thus:
In sum, in suits to recover properties, all co-owners are real parties in

interest. However, pursuant to Article 487 of the Civil Code and the relevant
jurisprudence, any one of them may bring an action, any kind of action for the
recovery of co-owned properties. Therefore only one of the co-owners, namely
the co-owner who filed the suit for the recovery of the co-owned property, is
an indispensable party thereto. The other co-owners are not indispensable
parties. They are not even necessary parties, for a complete relief can be
afforded in the suit even without their participation, since the suit is presumed
to have been filed for the benefit of all co-owners.
Rey Castigador Catedrilla vs. Mario and Margie Lauron, G.R. No. 179011, April 15,
2013 citing Wee vs. De Castro, et al., G.R. No. 176405, August 20, 2008
Art. 488 - Expenses for preservation of thing or right owned
Donato S. Paulmitan vs. Court of Appeals, G.R. No. 61584, November 25, 1992
Art. 491 - Alteration by Another Person of a Thing Owned in Common must

be Consented to by Co-Owners
It necessarily follows that none of the co-owners can, without the consent of the
other co-owners, validly consent to the making of an alteration by another person in
the thing owned in common. Alterations include any act of strict dominion or
ownership and any encumbrance or disposition has been held implicitly to be an act of
alteration.
Leonor B. Cruz vs. Teofila M. Catapang, G.R. No. 164110, February 12, 2008
Art. 493 - Each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto
Republic of the Phils. vs. Heirs of Francisca Dignos-Sorono, et al., G.R. No. 171571,
March 24, 2008
Heirs of Cesar Marasigan vs. Apolonio Marasigan, et al., G.R. No. 156078, March 14,
2008
Metropolitan Bank and Trust Co. vs. Nicholson Pascual, G.R. No. 163744, February 29,
2008
Under a co-ownership, the ownership of an undivided thing or right belongs to

different persons. During the existence of the co-ownership, no individual can claim
title to any definite portion of the community property until the partition thereof; and
prior to the partition, all that the co-owner has is an ideal or abstract quota or
proportionate share in the entire land or thing.
Julita Rombaua Panganiban, et al. vs. Julita S. Oamil, G.R. No. 149313, January 22,
2008
Under Article 493 of the Civil Code, the sale or other disposition affects only the
seller’s share pro indiviso, and the transferee gets only what corresponds to his
grantor’s share in the partition of the property owned in common. Since a co-owner is
entitled to sell his undivided share, a sale of the entire property by one co-owner
without the consent of the other co-owners is not null and void. However, only the
rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of
the property. The proper action in a case like this, is not for the nullification of the
sale, or for the recovery of possession of the property owned in common from the
third person, but for division or partition of the entire property if it continued to
remain in the possession of the co-owners who possessed and administered it. Such
partition should result in segregating the portion belonging to the seller and its
delivery to the buyer.
Benjamin Coronel vs. Florentino Constantino, G.R. No. 121069, February 7, 2003
Corinthian Realty vs. Hon. Court of Appeals, G.R. No. 150240, December 26, 2002
Tomas Claudio Memorial College vs. Court of Appeals, G.R. No. 124262, October 12,
1999
Article 493 therefore gives the owner of an undivided interest in the property the
right to freely sell and dispose of his undivided interest. The co-owner, however, has
no right to sell or alienate a concrete specific or determinate part of the thing owned in
common, because his right over the thing is represented by a quota or ideal portion
without any physical adjudication. If the co-owner sells a concrete portion, this,
nonetheless, does not render the sale void. Such a sale affects only his own share,
subject to the results of the partition but not those of the other co-owners who did not
consent to the sale.
Reynaldo Aguirre vs. Court of Appeals, G.R. No. 122249, January 29, 2004
Lilia Sanchez vs. Court of Appeals, G.R. No. 152766, June 20, 2003
City of Mandaluyong vs. Antonio N. Aguilar, G.R. No. 137152, January 29, 2001
Where a parcel of land, forming part of the undistributed properties of the

dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely
relied on the face of the certificate of title thereto, issued solely in the name of the
widow, the purchaser acquires a valid title to the land even as against the heirs of the
deceased spouse. The rationale for this rule is that "a person dealing with registered
land is not required to go behind the register to determine the condition of the
property. He is only charged with notice of the burdens on the property which are
noted on the face of the register or the certificate of title. To require him to do more is
to defeat one of the primary objects of the Torrens system."
Sps. Alexander and Adelaida Cruz vs. Eleuterio Leis, G.R. No. 125233, March 9, 2000
Although the right of an heir over the property of the decedent is inchoate as long
as the estate has not been fully settled and partitioned, the law allows a co-owner to
exercise rights of ownership over such inchoate right.
Mauricia Alejandrino vs. Court of Appeals, G.R. No. 114151, September 17, 1998
In Go Ong vs. Court of Appeals, this Court ruled that the heirs, as co-owners, shall
each have the full ownership of his, part and the fruits and benefits pertaining to it. An
heir may, therefore, alienate, assign or mortgage it, and even substitute another person
in its enjoyment, except when the personal rights are involved. But the effect of the
alienation or mortgage, with respect to the co-owners, shall be limited to the portion
which may be allotted to him in the division upon the termination of the
co-ownership.
Felicidad Vda. De Cabrera. vs. Court of Appeals, G.R. No. 108547, February 3, 1997
Pursuant to this law, a co-owner has the right to alienate his pro-indiviso share in
the co-owned property even without the consent of the other co-owners. Nevertheless,
as a mere part owner, he cannot alienate the shares of the other co-owners. The
prohibition is premised on the elementary rule that "no one can give what he does not
have" (Nemo dat quod non habet).
Nilo Mercado vs. Court of Appeals, G.R. No. 108592, January 26, 1995
In Ramirez vs. Bautista, this Court held that every co-heir has the absolute
ownership of his share in the community property and may alienate, assign, or
mortgage the same, except as to purely personal rights, but the effect of any such
transfer is limited to the portion which may be awarded to him upon the partition of
the property.
Maria Vda. De Reyes vs. Court of Appeals, G.R. No. 92436, July 26, 1991
The law does not prohibit a co-owner from selling, alienating or mortgaging his
ideal share in the property held in common. The law merely provides that the
alienation or mortgage shall be limited only to the portion of the property which may
be allotted to him upon termination of the co-ownership [See Mercado v. Liwanag,
G.R. No. L-14429, June 30, 1962; PNB v. The Honorable Court of Appeals, G.R. No.
L-34404, June 25, 1980; Go Ong v. The Honorable Court of Appeals, G.R. No.
75884, September 24, 1987] and, as earlier discussed, that the remaining co-owners
have the right to redeem, within a specified period, the shares which may have been
sold to the third party. [Articles 1620 and 1623 of the New Civil Code.]
Marina Z. Reyes vs. Alfredo B. Concepcion, G.R. No. 56550, October 1, 1990
Art. 494 - No co-owner shall be obliged to remain in the co-ownership
Vilma G. Arriola, et al. vs. John Nabor C. Arriola, G.R. No. 177703, January 28, 2008
Teresita S. Reyes-De Leon vs. Vicente B. Del Rosario, G.R. No. 152862, July 26, 2004
Tomas Claudio Memorial College vs. Court of Appeals, G.R. No. 124262, October 12,
1999
Vicente Coronel vs. Court of Appeals, G.R. No. 94699, January 24, 1992
Gregorio Favor vs. Court of Appeals, G.R. No. 80821, February 21, 1991
Article 494 of the Civil Code provides that no co-owner shall be obliged to remain
in the co-ownership, and that each co-owner may demand at any time partition of the
thing owned in common insofar as his share is concerned. Corollary to this rule, Art.
498 of the Code states that whenever the thing is essentially indivisible and the
co-owners cannot agree that it be allotted to one of them who shall indemnify the
others, it shall be sold and its proceeds accordingly distributed. This is resorted to (1)
when the right to partition the property is invoked by any of the co-owners but
because of the nature of the property it cannot be subdivided or its subdivision would
prejudice the interests of the co-owners, and (b) the co-owners are not in agreement as
to who among them shall be allotted or assigned the entire property upon proper
reimbursement of the co-owners.
Virgilio B. Aguilar vs. Court of Appeals, G.R. No. 76351, October 29, 1993
It has been said that Article 494 of the Civil Code which provides that each
co-owner may demand at any time the partition of the common property implies that
an action to demand partition is imprescriptible or cannot be barred by laches. The
imprescriptibility of the action cannot, however, be invoked when one of the
co-owners has possessed the property as exclusive owner and for a period sufficient to
acquire it by prescription.
Epitacio Delima vs. Court of Appeals, G.R. No. 46296, September 24, 1991
While as a general rule the action for partition among co-owners does not prescribe
so long as the co-ownership is expressly or impliedly recognized (Art. 494, Civil
Code), petitioners herein had never recognized respondent as a co-owner or co-heir
either expressly or impliedly. Consequently, the rule on non-prescription of action for
partition of property owned in common (Art. 494) does not apply to the case at bar.
Natividad Del Rosario Vda. De Alberto vs. Court of Appeals, G.R. No. 29759, May 18,
1989
The condition set by the decedent on the property's indivisibility is subject to a

statutory limitation. The provisions of law, particularly Articles 494, 870, and 1083 of
the Civil Code provide that the prohibition to divide a property in a co-ownership can
only last for twenty (20) years
In Re: Petition for Probate of Last Will and Testament of Basilio Santiago, G.R. No.
179859, August 9, 2010
Art. 495 - When co-owners cannot demand a physical division of the thing
owned in common
2008
Art. 497 - Creditors or assignees of the co-owners may take part in the division
of the thing owned in common
In the event of a division or partition of property owned in common, assignees of

one or more of the co-owners may take part in the division of the thing owned in
common and object to its being effected without their concurrence. But they cannot
impugn any partition already executed, unless there has been fraud, or in case it was
made notwithstanding a formal opposition presented to prevent it, without prejudice to
the right of the debtor or assignor to maintain its validity.
Julita Rombaua Panganiban, et al. vs. Julita S. Oamil, G.R. No. 149313, January 22,
2008
Art. 498 - Sale of indivisible thing when co-owners cannot agree on allotment
2008
The sale of the property held in common referred to in Art. 498 is resorted to when
(1) the right to partition the property among the co-owners is invoked by any of them
but because of the nature of the property, it cannot be subdivided or its subdivision
[See Article 495 of the New Civil Code] would prejudice the interests of the
co-owners [See Section 5 of Rule 69 of the Revised Rules of Court] and (2) the
co-owners are not in agreement as to who among them shall be allotted or assigned
the entire property upon reimbursement of the shares of the other co-owners.
Virgilio B. Aguilar vs. Court of Appeals, G.R. No. 76351, October 29, 1993
Art. 499 - Partition of a thing owned in common
Heirs of Panfilo F. Abalos vs. Aurora A. Bucal, et al., G.R. No. 156224, February 19,
2008
Art. 523 - Possession
People of the Phils. vs. Normando L. Del Rosario, G.R. No. 109633, July 20, 1994
Art. 524 - Possession may be exercised in one's own name or in that of another
Republic of the Philippines vs. Lourdes F. Alonte, G.R. No. 162787, June 13, 2008
Art. 525 - Two concepts of possession of a thing
Manotok Realty, Inc. vs. Jose H. Tecson, G.R. No. L-47475, August 19, 1988
Art. 526 - Possessor in good faith
Sps. Onesiforo and Rosario Alinas vs. Sps. Victor and Elena Alinas, G.R. No. 158040,
April 14, 2008
A possessor in good faith is one who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it. (Caram v. Laureta, G.R. No.
L-28740, February 24, 1981, Art. 526, Civil Code). One who acquires real estate with
knowledge of a defect or lack of title in his vendor cannot claim that he has acquired
title thereto in good faith as against the true owner of the land or of an interest therein;
and the same rule must be applied to one who has knowledge of facts which should
put a reasonable man upon his guard, and then claims that he acted in good faith under
the belief that there was no defect in the title of the vendor.
Manotok Realty, Inc. vs. Court of Appeals, G.R. No. L-39044, January 31, 1985
Art. 526, par. 2 - Possessor in bad faith
Agueda De Vera vs. Court of Appeals, G.R. No. 97761, April 14, 1999
Art. 527 - Presumption of good faith
Good faith is an intangible and abstract quality with no technical meaning or

statutory definition; and it encompasses, among other things, an honest belief, the
absence of malice and the absence of a design to defraud or to seek an unconscionable
advantage. An individual's personal good faith is a concept of his own mind and,
therefore, may not conclusively be determined by his protestations alone. It implies
honesty of intention, and freedom from knowledge of circumstances which ought to
put the holder upon inquiry. The essence of good faith lies in an honest belief in the
validity of one's right, ignorance of a superior claim, and absence of intention to
overreach another. Applied to possession, one is considered in good faith if he is not
aware that there exists in his title or mode of acquisition any flaw which invalidates it.
Heirs of the Late Joaquin Limense vs. Rita vda. de Ramos, et al., G.R. No. 152319,
October 28, 2009
Art. 528 - When possession in good faith loses its character
2002
Ignacio Wong vs. Lucas D. Carpio, G.R. No. 50264, October 21, 1991
Art. 531 - How possession is acquired
Republic of the Phils. vs. Jerry V. David, G.R. No. 155634, August 16, 2004
Commissioner of Internal Revenue vs. Solidbank Corp., G.R. No. 148191, November
25, 2003
Nicanor Somodio vs. Court of Appeals, G.R. No. 82680, August 13, 1994
Pharma Industries, Inc. vs. Meliton Pajarillaga, G.R. No. L-53788, October 17, 1980
Possession is acquired in any of the following ways: (1) by the material occupation
of the thing; (2) by the exercise of a right; (3) by the fact that the property is subject to
the action of our will; and (4) by the proper acts and legal formalities established for
acquiring the right.
Republic of the Phil. vs. Martin T. Ng, G.R. No. 182449, March 6, 2013
We explained the nature of the possession required to confirm one's title as follows:
Possession is open when it is patent, visible, apparent, notorious and not clandestine.
It is continuous when uninterrupted, unbroken and not intermittent or occasional;
exclusive when the adverse possessor can show exclusive dominion over the land and
an appropriation of it to his own use and benefit; and notorious when it is so
conspicuous that it is generally known and talked of by the public or the people in the
neighborhood.
Republic of the Phil. vs. Martin T. Ng, G.R. No. 182449, March 6, 2013 citing Director of
Lands v. IAC, G.R. No. 68946, 209 Phil. 214, 224 (1992)
The voluntary declaration of a piece of property for taxation purposes is an

announcement of one's claim against the State and all other interested parties. In fact,
these documents already constitute prima facie evidence of possession. Moreover, if
the holders of the land present a deed of conveyance in their favor from its former
owner to support their claim of ownership, the declaration of ownership and tax
receipts relative to the property may be used to prove their good faith in occupying
and possessing it. Additionally, when considered with actual possession of the
property, tax receipts constitute evidence of great value in support of the claim of title
of ownership by prescription.
Republic of the Phil. vs. Martin T. Ng, G.R. No. 182449, March 6, 2013
Art. 532 - Ratification of acquisition of possession
Commissioner of Internal Revenue vs. Solidbank Corp., G.R. No. 148191, November
25, 2003
Art. 533 - Possession of hereditary property
An heir can sell his right, interest, or participation in the property under
administration under Art. 533 of the Civil Code which provides that possession of
hereditary property is deemed transmitted to the heir without interruption from the
moment of death of the decedent. However, an heir can only alienate such portion of
the estate that may be allotted to him in the division of the estate by the probate or
intestate court after final adjudication, that is, after all debtors shall have been paid or
the devisees or legatees shall have been given their shares. This means that an heir
may only sell his ideal or undivided share in the estate, not any specific property
therein.
Jose C. Lee vs. RTC of Quezon City Branch 85, G.R. No. 146006, February 23, 2004
Art. 538 - Possession as a fact cannot be recognized at the same time in two
different personalities except in the cases of co-possession
Fernanda Mendoza Cequena vs. Honorata Mendoza Bolante, G.R. No. 137944, April 6,
2000
Atok-Big Wedge Mining Co. vs. Court of Appeals, G.R. No. 88883, January 18, 1991
Art. 539 - Every possessor has a right to be respected in his possession
Every possessor has a right to be respected in his possession; and should he be

disturbed therein he shall be protected in or restored to said possession by the means
established by the laws and the Rules of Court.
Julio A. Vivares, et al. vs. Jose J. Reyes, G.R. No. 155408, February 13, 2008
The phrase "every possessor" in the article indicates that all kinds of possession,
from that of the owner to that of a mere holder, except that which constitutes a crime,
should be respected and protected by the means established and the laws of procedure
Philippine Trust Co. vs. Court of Appeals, G.R. No. 124658, December 15, 1999
Art. 541 - Legal presumption that possessor in the concept of owner has just
title
Fernanda Mendoza Cequena vs. Honorata Mendoza Bolante, G.R. No. 137944, April 6,
2000
Art. 543 - Exclusive possession of allotted part in thing possessed in common
Rodolfo Eusebio vs. Intermediate Appellate Court, G.R. No. 72188, September 15,
1986
Art. 546 - Necessary expenses shall be refunded to every possessor
April 14, 2008
The objective of Article 546 of the Civil Code is to administer justice between the
parties involved. In this regard, this Court had long ago stated in Rivera vs. Roman
Catholic Archbishop of Manila, (40 Phil. 717 [1920]) that the said provision was
formulated in trying to adjust the rights of the owner and possessor in good faith of a
piece of land, to administer complete justice to both of them in such a way as neither
one nor the other may enrich himself of that which does not belong to him.
Art. 547 - Removal of useful improvements
Republic of the Phils. vs. Normelito J. Ballocanag, G.R. No. 163794, November 28,
2008
Art. 548 - Expenses for pure luxury or mere pleasure shall not be refunded to
the possessor in good faith
Art. 555(4) - Real right of possession is not lost till after the lapse of ten years
Catholic Vicar Apostolic vs. Court of Appeals, G.R. No. 80294-95, March 23, 1990
Art. 559 - Recovery of movable property
Edca Publishing & Distributing Corp. vs. Leonor Santos, G.R. No. 80298, April 26, 1990
Arthur Pajunar vs. Court of Appeals, G.R. No. 77266, July 19, 1989
It is quite clear that a party who (a) has lost any movable or (b) has been unlawfully
deprived thereof can recover the same from the present possessor even if the latter
acquired it in good faith and has, therefore, title thereto for under the first sentence of
Article 559, such manner of acquisition is equivalent to a title. There are three (3)
requisites to make possession of movable property equivalent to title, namely: (a) the
possession should be in good faith; (b) the owner voluntarily parted with the
possession of the thing; and (c) the possession is in the concept of owner.
Jaime Ledesma vs. Court of Appeals, G.R. No. 86051, September 1, 1992
Money, albeit characterized as a movable, is generic and fungible.
The movable property mentioned in Article 559 of the Civil Code pertains to a
specific or determinate thing. A determinate or specific thing is one that is
individualized and can be identified or distinguished from others of the same kind. In
this case, the deposit in [respondent's] accounts consists of money which, albeit
characterized as a movable, is generic and fungible. The quality of being fungible
depends upon the possibility of the property, because of its nature or the will of the
parties, being substituted by others of the same kind, not having a distinct
individuality. It bears emphasizing that money bears no earmarks of peculiar
ownership, and this characteristic is all the more manifest in the instant case which
involves money in a banking transaction gone awry. Its primary function is to pass
from hand to hand as a medium of exchange, without other evidence of its title.
Money, which had passed through various transactions in the general course of
banking business, even if of traceable origin, is no exception.
BPI Family Bank vs. Amado Franco, et al., G.R. No. 123498, November 23, 2007
Art. 579 - Improvements by usufructuary
Mariano Floreza vs. Maria D. De Evangelista, G.R. No. L-25462, February 21, 1980
Art. 609 - Expropriation of thing in usufruct
Ramona R. Locsin vs. Vicente P. Valenzuela, G.R. No. 51333, February 19, 1991
Art. 613 - Easement or servitude
Sps. Victor and Jocelyn Valdez vs. Sps. Francisco and Caridad Tabisula, G.R. No.
175510, July 28, 2008
In order to justify the imposition of an easement of right of way, there must be real,
not fictitious or artificial, necessity for it. Mere convenience for the dominant estate is
not what is required by law as the basis of setting up a compulsory easement. Even in
the face of necessity, if it can be satisfied without imposing the easement, the same
should not be imposed.
Crispin Dichoso, Jr., et al. vs. Patrocinio L. Marcos, G.R. No. 180282, April 11, 2011
The convenience of the dominant estate has never been the gauge for the grant of
compulsory right of way. To be sure, the true standard for the grant of the legal right
is "adequacy." Hence, when there is already an existing adequate outlet from the
dominant estate to a public highway, as in this case, even when the said outlet, for one
reason or another, be inconvenient, the need to open up another servitude is entirely
unjustified.
Art. 614 - Servitudes
Edilberto Alcantara vs. Cornelio B. Reta, Jr., G.R. No. 136996, December 14, 2001
Servitudes are merely accessories to the tenements of which they form part.
Although they are possessed of a separate juridical existence, as mere accessories,
they can not, however, be alienated from the tenement, or mortgaged separately.
Solid Manila Corp. vs. Bio Hong Trading, G.R. No. 90596, April 8, 1991
Art. 617 - Easements are inseparable from the estate to which they actively or
passively belong
Bryan U. Villanueva vs. Tirso D.C. Velasco, G.R. No. 130845, November 27, 2000
Art. 619 - Legal and voluntary easements
175510, July 28, 2008
National Irrigation Administration vs. Court of Appeals, G.R. No. 114348, September
20, 2000
Art. 620 - Continuous and apparent easements are acquired either by virtue of
a title or by prescription of ten years
Bogo-Medellin Milling Co. vs. Court of Appeals, G.R. No. 124699, July 31, 2003
National Power Corporation vs. Sps. Jose & Ma. Clara Campos, G.R. No. 143643, June
27, 2003
Concordio Abellana, Sr. vs. Court of Appeals, G.R. No. 97039, April 24, 1992
Art. 624 - Apparent sign of easement between two estates
Eduardo C. Tañedo vs. Juanito A. Bernad, G.R. No. L-66520, August 30, 1988
Art. 629 - Owner of servient estate cannot impair use of servitude
Ester Javellana vs. Intermediate Appellate Court, G.R. No. 72837, April 17, 1989
Art. 631 (1) - When easements are extinguished
Consequently, when the owner of Lots D and E also became the owner of Lot B,
the easement of right of way on Lot B became extinct by operation of law. The
existence of a dominant estate and a servient estate is incompatible with the idea that
both estates belong to the same person.
Sps. Manuel and Victoria Salimbangon vs. Sps. Santos and Erlinda Tan, G.R. No.
185240, January 20, 2010
Art. 649 - Easement of right of way
175510, July 28, 2008
St. Michael School of Cavite, Inc., et al. vs. Masaito Dev't. Corp., et al., G.R. No.
166301, February 29, 2008
Simeon Floro vs. Orlando A. Llenado, G.R. No. 75723, June 2, 1995
Adriana Dionisio vs. Rodolfo Ortiz, G.R. No. 95738, December 10, 1991
Tomas Encarnacion vs. Court of Appeals, G.R. No. 77628, March 11, 1991
Costabella Corp. vs. Court of Appeals, G.R. No. 80511, January 25, 1991
Four requisites of a legal or compulsory right of way.
A legal or compulsory easement is that which is constituted by law for public use
or for private interest. Pursuant to [Articles 649 and 650], the owner of an estate may
claim a legal or compulsory right of way only after he has established the existence of
these four (4) requisites: (a) the estate is surrounded by other immovables and is
without adequate outlet to a public highway; (b) after payment of the proper
indemnity; (c) the isolation was not due to the proprietor's own acts; and (d) the right
of way claimed is at a point least prejudicial to the servient estate.
Sps. Manuel and Rosalinda P. Mejorada vs. Glorificacion Vertudazo, et al., G.R. No.
151797, October 11, 2007
By express provision of Article 649 and 650 of the New Civil Code, the owner of
an estate may claim a compulsory right of way only after he has established the
existence of four (4) requisites, namely, (1) the estate is surrounded by other
immovables and is without adequate outlet to a public highway; (2) after payment of
the proper indemnity; (3) the isolation was not due to the proprietor's own acts; and
(4) the right way claimed is at a point least prejudicial to the servient estate, and in so
far as consistent with this rule, where the distance from the dominant estate to a public
highway may be the shortest.
Loreto Vda. De Baltazar vs. Court of Appeals, G.R. No. 106082, June 27, 1995
It must be stressed that, by its very nature, and when considered with reference to
the obligations imposed on the servient estate, an easement involves an abnormal
restriction on the property rights of the servient owner and is regarded as a charge or
encumbrance on the servient estate. It is incumbent upon the owner of the dominant
estate to establish by clear and convincing evidence the presence of all the
preconditions before his claim for easement of right of way may be granted.
Art. 649, second paragraph
For a complaint to state a cause of action in an easement case, Art. 649 of the Civil
Code has laid down the following requirements: (1) the dominant estate is surrounded
by other immovables and has no adequate outlet to a public highway; (2) there is
payment of proper indemnity; and (3) the isolation is not due to the acts of the
proprietor of the dominant estate.
St. Michael School of Cavite, Inc., et al. vs. Masaito Development Corp., et al., G.R. No.
166301, February 29, 2008
The Civil Code categorically provides for the measure by which the proper
indemnity may be computed: value of the land occupied plus the amount of the
damage caused to the servient estate. Settled is the rule in statutory construction that
"when the law is clear, the function of the courts is simple application." Thus, to
award the indemnity using factors different from that given by the law is a complete
disregard of these clear statutory provisions and is evidently arbitrary. This the Court
cannot countenance. The Civil Code has clearly laid down the parameters and we
cannot depart from them. Verba legis non est recedendum.
Woodbridge School, Inc., et al. vs. ARB Construction Co., Inc., G.R. No. 157285,
February 16, 2007
Art. 650 - Easement of right of way established at the point least prejudicial to
servient estate
175510, July 28, 2008
Ma. Linda T. Almendras vs. Court of Appeals, G.R. No. 110067, August 3, 1998
Cesar Sta. Maria, et al. vs. Court of Appeals, G.R. No. 127549, January 28, 1998
Anastacia Quimen vs. Court of Appeals, G.R. No. 112331, May 29, 1996
Loreto Vda. De Baltazar vs. Court of Appeals, G.R. No. 106082, June 27, 1995
Article 650 of the New Civil Code explicitly states that the easement of right of
way shall be established at the point least prejudicial to the servient estate and, insofar
as consistent with this rule, where the distance from the dominant estate to a public
highway may be the shortest. The criterion of least prejudice to the servient estate
must prevail over the criterion of shortest distance although this is a matter of judicial
appreciation. While shortest distance may ordinarily imply least prejudice, it is not
always so as when there are permanent structures obstructing the shortest distance;
while on the other hand, the longest distance may be free of obstructions and the
easiest or most convenient to pass through. In other words, where the easement may
be established on any of several tenements surrounding the dominant estate, the one
where the way is shortest and will cause the least damage should be chosen.
However, as elsewhere stated, if these two (2) circumstances do not concur in a single
tenement, the way which will cause the least damage should be used, even if it will
not be the shortest.
Anastacia Quimen vs. Court of Appeals, G.R. No. 112331, May 29, 1996
Art. 651 - Width of easement of right of way
Costabella Corp. vs. Court of Appeals, G.R. No. 80511, January 25, 1991
Under Article 651 of the Civil Code, it is the needs of the dominant property which
ultimately determine the width of the passage. And these needs may vary from time to
time.
Tomas Encarnacion vs. Court of Appeals, G.R. No. 77628, March 11, 1991
Art. 684 - No proprietor shall make such excavations upon his land as to
deprive any adjacent land or building of sufficient lateral or subjacent support
Ngo Sin Sing, et al. vs. Li Seng Giap & Sons, Inc., et al., G.R. No. 170596, November
28, 2008
Art. 694 - Nuisance
Camilo E. Tamin vs. Court of Appeals, G.R. No 97477, May 8, 1992
Celestino Tatel vs. Municipality of Virac, G.R. No 40243, March 11, 1992
Respondents' fence is not a nuisance per se. By its nature, it is not injurious to the
health or comfort of the community. It was built primarily to secure the property of
respondents and prevent intruders from entering it. And as correctly pointed out by
respondents, the sidewalk still exists. If petitioner believes that respondents' fence
indeed encroaches on the sidewalk, it may be so proven in a hearing conducted for
that purpose. Not being a nuisance per se, but at most a nuisance per accidens, its
summary abatement without judicial intervention is unwarranted.
Jaime S. Perez vs. Sps. Fortunito and Yolanda Madrona, G.R. No. 184478, March 21,
2012
Art. 695 - Public or private nuisance
Art. 699 (3) - Abatement of public nuisance
Art. 708 - Registry of Property
175510, July 28, 2008
Art. 709 - Titles over immovable property not annotated in Registry of

Property shall not prejudice third persons
175510, July 28, 2008
Shopper's Paradise Realty & Development Corp. vs. Efren Roque, G.R. No. 148775,
January 13, 2004
Ignacio Gonzales vs. Court of Appeals, G.R. No. 110335, June 18, 2001
Art. 712 - Ownership is acquired by occupation and by intellectual creation
Under Article 712 of the Civil Code, the modes of acquiring ownership are
generally classified into two (2) classes, namely, the original mode (i.e, through
occupation, acquisitive prescription, law or intellectual creation) and the derivative
mode (i.e., through succession mortis causa or tradition as a result of certain contracts,
such as sale, barter, donation, assignment or mutuum)
Heirs of Rosendo Sevilla Florencio vs. Heirs of Teresa Sevilla De Leon, G.R. No.
149570, March 12, 2004
Teodoro Acap vs. Court of Appeals, G.R. No. 118114, December 7, 1995
Art. 716 - Owner of domesticated animals may claim them within 20 days
from occupation by another
Arthur Pajunar vs. Court of Appeals, G.R. No. 77266, July 19, 1989
Art. 719 - Finder of a movable must return it to previous possessor or deposit

it with the mayor's office
Edna Palero-Tan vs. Ciriaco I. Urdaneta, Jr., A.M. No. P-07-2399, June 18, 2008
Art. 725 - Donation
Under Article 725 of the Civil Code, in order to be valid, such a donation must be
made in a public document and the acceptance must be made in the same or in a
separate instrument. In the latter case, the donor shall be notified of the acceptance in
an authentic form and such step must be noted in both instruments.
Rosita Peña vs. Court of Appeals, G.R. No. 91478, February 7, 1991
It is explicit in Article 725 of the Civil Code that acceptance is necessary in a

donation. This applies to all kinds of donation because the law does not make any
distinction. The rationale behind the requirement of acceptance is that nobody is
obliged to receive a benefit against his will (Arturo M. Tolentino, Commentaries and
Jurisprudence on the Civil Code of the Philippines, Volume II, 1972 Edition, p. 521).
Nazario Vita vs. Soledad Montanano, G.R. No. 50553, February 19, 1991
An agreement of the parties is essential in a donation.
A donation is an act of liberality whereby a person disposes gratuitously a thing or

right in favor of another, who accepts it. Like any other contract, an agreement of the
parties is essential. Consent in contracts presupposes the following requisites: (1) it
should be intelligent or with an exact notion of the matter to which it refers; (2) it
should be free; and (3) it should be spontaneous. The parties' intention must be clear and the
attendance of a vice of consent, like any contract, renders the donation voidable.
Corazon Catalan, et al. vs. Jose Basa, et al., G.R. No. 159567, July 31, 2007
Art. 728 - Donations mortis causa
As the subject deed then is in the nature of a mortis causa disposition, the
formalities of a will under Article 728 of the Civil Code should have been complied
with, failing which the donation is void and produces no effect.
Ursulina Ganuelas vs. Robert T. Cawed, G.R. No. 123968, April 24, 2003
"[I]rrevocability" is a quality absolutely incompatible with the idea of conveyances

mortis causa, where "revocability" is precisely the essence of the act.
Jarabini G. Del Rosario vs. Asuncion G. Ferrer, et al., G.R. No. 187056, September 20,
2010, citing Austria-Magat v. Court of Appeals, 426 Phil. 263 (2002)
A donation mortis causa has the following characteristics:
1. It conveys no title or ownership to the transferee before the death of the

transferor; or, what amounts to the same thing, that the transferor should retain the
ownership (full or naked) and control of the property while alive
2. That before his death, the transfer should be revocable by the transferor at will,
ad nutum; but revocability may be provided for indirectly by means of a reserved
power in the donor to dispose of the properties conveyed; and
3. That the transfer should be void if the transferor should survive the transferee.
2010
That the document in question in this case was captioned "Donation Mortis Causa"
is not controlling. This Court has held that, if a donation by its terms is inter vivos,
this character is not altered by the fact that the donor styles it mortis causa. . . .
The Court thus said in Austria-Magat that the express "irrevocability" of the
donation is the "distinctive standard that identifies the document as a donation inter
vivos." Here, the donors plainly said that it is "our will that this Donation Mortis
Causa shall be irrevocable and shall be respected by the surviving spouse." The intent
to make the donation irrevocable becomes even clearer by the proviso that a surviving
donor shall respect the irrevocability of the donation. Consequently, the donation was
in reality a donation inter vivos.
The donors in this case of course reserved the "right, ownership, possession, and
administration of the property" and made the donation operative upon their death. But
this Court has consistently held that such reservation (reddendum) in the context of an
irrevocable donation simply means that the donors parted with their naked title,
maintaining only beneficial ownership of the donated property while they lived.
Notably, the three donees signed their acceptance of the donation, which
acceptance the deed required. This Court has held that an acceptance clause indicates
that the donation is inter vivos, since acceptance is a requirement only for such kind of
donations. Donations mortis causa, being in the form of a will, need not be accepted
by the donee during the donor's lifetime.
2010
Art. 732 - Donations inter vivos
Roman Catholic Archbishop of Manila vs. Court of Appeals, G.R. No. 77425 & 50, June
19, 1991
An acceptance clause indicates that the donation is inter vivos, since acceptance is a
requirement only for such kind of donations. Donations mortis causa, being in the
form of a will, need not be accepted by the donee during the donor's lifetime.
2010
In case of doubt, the conveyance should be deemed a donation inter vivos rather
than mortis causa, in order to avoid uncertainty as to the ownership of the property
subject of the deed. Since the donation in this case was one made inter vivos, it was
immediately operative and final. The reason is that such kind of donation is deemed
perfected from the moment the donor learned of the donee's acceptance of the
donation. The acceptance makes the donee the absolute owner of the property
donated.
2010, citing Angeles Ubalde Puig, et al. vs. Estela Magbanua Peñaflorida, et al., G.R.
No. L-15939, November 29, 1965
Art. 733 - Donations with an onerous cause
Republic of the Phil. vs. Leon Silim, G.R. No. 140487, April 2, 2001
Tito R. Lagazo vs. Court of Appeals, G.R. No. 112796, March 5, 1998
Evelyn De Luna vs. Sofronio F. Abrigo, G.R. No. 57455, January 18, 1990
Art. 736 - Guardians and trustees cannot donate property entrusted to them
Ricardo F. Marquez vs. Court of Appeals, G.R. No. 125715, December 29, 1998
Art. 737 - Donor's capacity determined as of the time of the making of the
donation
Heirs of William Sevilla vs. Leopoldo Sevilla, G.R. No. 150179, April 30, 2003
Art. 739 (1) - Void donations: Those made between persons guilty of adultery
or concubinage at the time of donation
Nenita Bienvenido vs. Court of Appeals, G.R. No. 111717, October 24, 1994
Art. 744 - Donation of the same thing to two or more donees
Maxima Hemedes vs. Court of Appeals, G.R. No. 107132 & 108472, October 8, 1999
Art. 749 - Donation of immovable must be in a public document to be valid
Ricky Q. Quilala vs. Gliceria Alcantara, G.R. No. 132681, December 3, 2001
Ignacio Gonzales vs. Court of Appeals, G.R. No. 110335, June 18, 2001
Republic of the Phils. vs. David Rey Guzman, G.R. No. 132964, February 18, 2000
Heirs of Salud Dizon Salamat vs. Natividad Dizon Tamayo, G.R. No. 110644, October
30, 1998
Art. 750 - Donation may comprehend all present property of donor
Mariano B. Locsin vs. Court of Appeals, G.R. No. 89783, February 19, 1992
Art. 752, par. 2 - When donation is inofficious
A person's prerogative to make donations is a subject to certain limitations, one of

which is that he cannot give by donation more than he can give by will (Art. 752,
Civil Code). If he does, so much of what is donated as exceeds what he can give by
will is deemed inofficious and the donation is reducible to the extent of such excess,
though without prejudice to its taking effect in the donor's lifetime or the donee's
appropriating the fruits of the thing donated (Art. 771, Civil Code). Donation made in
violation of Art, 752 of the Civil Code is collationable, that is, its value is imputable
into the heredity estate of the donor at the time of his death for the purpose of
determining the lifetime of the forced or compulsory heirs and the freely disposable
portion of the estate.
Lucerna Vda. De Tupaz vs. RTC of Negros, G.R. No. L-65800, October 3, 1986
Art. 764, par. 3 - Prescription of action to revoke donation
Apolinaria Austria-Magat vs. Court of Appeals, G.R. No. 106755, February 1, 2002
Central Philippine University vs. Court of Appeals, G.R. No. 112127, July 17, 1995
Alberto Garrido vs. Court of Appeals, G.R. No. 101262, September 14, 1994
19, 1991
Art. 765 - Revocation of donation by reason of ingratitude
Romulo and Sally Eduarte vs. Court of Appeals, G.R. No. 105944, February 9, 1996
Art. 771 - Reduction of inofficious donation
Eloy Imperial vs. Court of Appeals, G.R. No. 112483, October 8, 1999
Lucerna Vda. De Tupaz vs. RTC of Negros, G.R. No. L-65800, October 3, 1986
Art. 774 - Succession
Romulo A. Coronel vs. Court of Appeals, G.R. No. 103577, October 7, 1996
Art. 776 - Inheritance
Speed Distributing Corp. vs. Court of Appeals, G.R. No. 149351, March 17, 2004
Johnny S. Rabadilla vs. Court of Appeals, G.R. No. 113725, June 29, 2000
Art. 777 - Rights to the succession are transmitted from the moment of death
of decedent
Oscar C. Reyes vs. RTC of Makati, Br. 142, et al., G.R. No. 164744, August 11, 2008
State Land Investment Corp. vs. CIR, G.R. No. 171956, January 18, 2008
Teodora A. Rioferio vs. Court of Appeals, G.R. No. 129008, January 13, 2004
Blanquita E. Dela Merced vs. Joselito P. Dela Merced, G.R. No. 126707, February 25,
1999
Danilo I. Suarez vs. Court of Appeals, G.R. No. 94918, September 2, 1992
At the moment of the decedent's death, the heirs start to own the property, subject
to the decedent's liabilities. In fact, they may dispose of the same even while the
property is under administration. (Barretto v. Tuason, 59 Phil. 845; Jakosalem v.
Rafols, 73 Phil. 628). If the heirs may dispose of their shares in the decedent's
property even while it is under administration with more reason should the heirs be
allowed to redeem redeemable properties despite the presence of an administrator.
Matilde S. Palicte vs. Jose O. Ramolete, G.R. No. L-55076, September 21, 1987
Art. 778 - Succession
Compulsory succession is a distinct kind of succession, albeit not categorized as

such in Article 778 of the Civil Code. It reserves a portion of the net estate of the
decedent in favor of certain heirs, or group of heirs, or combination of heirs,
prevailing over all kinds of succession.
Valente Raymundo vs. Teofista Isagon vda. De Suarez, et al., G.R. No. 149017,
November 28, 2008
Art. 781 - Inheritance of a person
Art. 783 - Will, defined
A will is an act whereby a person is permitted, with the formalities prescribed by

law, to control to a certain degree the disposition of his estate, to take effect after his
death.
Art. 800 - The law presumes that every person is of sound mind
Paz Samaniego-Celada vs. Lucia D. Abena, G.R. No. 145545, June 30, 2008
People of the Phils. vs. Anacito Opuran, G.R. No. 147674-75, March 17, 2004
People of the Phils. vs. Alberto Ocfemia, G.R. No. 126135, October 25, 2000
People of the Phils. vs. Rodolfo P. Cayetano, G.R. No. 112429-30, July 23, 1997
People of the Phils. vs. Teotimo Danao, G.R. No. 96832, November 19, 1992
Art. 804 - Every will must be in writing and executed in a language or dialect
known to the testator
A notarial will, as the contested will in this case, is required by law to be

subscribed at the end thereof by the testator himself. In addition, it should be attested
and subscribed by three or more credible witnesses in the presence of the testator and
of one another.
Art. 805 - Every will, other than a holographic will, must be subscribed at the
end thereof by the testator himself or by the testator's name written by some
other person in his presence, and by his express direction, and attested and
subscribed by three or more credible witnesses in the presence of the testator and
of one another
Clemente Calde vs. Court of Appeals, G.R. No. 93980, June 27, 1994
Teodoro Caneda vs. Court of Appeals, G.R. No. 103554, May 28, 1993
Art. 806 - Every will must be acknowledged before a notary public by testator
and witnesses
Ursulina Ganuelas vs. Robert T. Cawed, G.R. No. 123968, April 24, 2003
A notary public's commission is the grant of authority in his favor to perform

notarial acts. It is issued "within and for" a particular territorial jurisdiction and the
notary public's authority is co-extensive with it. In other words, a notary public is
authorized to perform notarial acts, including the taking of acknowledgments, within
that territorial jurisdiction only. Outside the place of his commission, he is bereft of
power to perform any notarial act; he is not a notary public. Any notarial act outside
the limits of his jurisdiction has no force and effect.
Bella A. Guerrero vs. Resurreccion A. Bihis, G.R. No. 174144 April 17, 2007
Art. 808 - If testator is blind
The following pronouncement in Garcia vs. Vasquez provides an insight into the
scope of the term "blindness" as used in Art. 808, to wit: "The rationale behind the
requirement of reading the will to the testator if he is blind or incapable of reading the
will himself (as when he is illiterate), is to make the provisions thereof known to him,
so that he may be able to object if they are not in accordance with his wishes . . ."
Clear from the foregoing is that Art. 808 applies not only to blind testators but also to
those who, for one reason or another, are "incapable of reading the(ir) will(s)."
In Re: Brigido Alvarado vs. Ramon G. Gaviola, Jr., G.R. No. 74695, September 14,
1993
Art. 809 - Defects and imperfections in the form and language of attestation
Teodoro Caneda vs. Court of Appeals, G.R. No. 103554, May 28, 1993
Art. 810 - Holographic will
Roberto and Thelma Ajero vs. Court of Appeals, G.R. No. 106720, September 15, 1994
In Re: Rosita Labrador vs. Court of Appeals, G.R. Nos. 83843-44, April 5, 1990
Art. 811 - Probate of holographic will
Eugenia Ramonal Codoy vs. Evangeline Calugay, G.R. No. 123486, August 12, 1999
Art. 813 - Dating of dispositions in a holographic will
Art. 814 - Insertion, cancellation, erasure or alteration in a holographic will

must be authenticated by testator
Likewise, a holographic will can still be admitted to probate, notwithstanding

non-compliance with the provisions of Article 814. In the case of Kalaw vs. Relova,
G.R. No. L-40207, September 28, 1984, this Court held: "Ordinarily, when a number
of erasures, corrections, and interlineations made by the testator in a holographic Will
have not been noted under his signature, . . . the Will is not thereby invalidated as a
whole, but at most only as respects the particular words erased, corrected or interlined.
Manresa gave an identical commentary when he said 'la omision de la salvedad no
anula el testamento, segun la regla de jurisprudencia establecida en la sentencia de 4
de Abril de 1895.'"
Art. 816 - Will of an alien
Salud Teodoro Vda. De Perez vs. Zotico A. Tolete, G.R. No. 76714, June 2, 1994
Art. 838 - No will shall pass property unless proved and allowed in accordance
with Rules of Court
Octavio S. Maloles II vs. Pacita De Los Reyes Phillips, G.R. Nos. 129505 & 133359,
January 31, 2000
Leonida Coronado vs. Court of Appeals, G.R. No. 78778, December 3, 1990
This Court has interpreted this provision to mean, "until admitted to probate, [a
will] has no effect whatever and no right can be claimed thereunder."
Sps. Ricardo Pascual vs. Court of Appeals, G.R. No. 115925, August 15, 2003
Art. 839 - When will shall be disallowed
These lists are exclusive; no other grounds can serve to disallow a will. Thus, in a
petition to admit a holographic will to probate, the only issues to be resolved are: (1)
whether the instrument submitted is, indeed, the decedent's last will and testament; (2)
whether said will was executed in accordance with the formalities prescribed by law;
(3) whether the decedent had the necessary testamentary capacity at the time the will
was executed; and, (4) whether the execution of the will and its signing were the
voluntary acts of the decedents.
Art. 841 - Will valid even though there is no institution of heir
Heirs of Matilde Montinola-Sanson vs. Court of Appeals, G.R. No. 76648, February 26,
1988
Art. 842 - One who has no compulsory heirs may dispose by will of all his
estate
Octavio S. Maloles II vs. Pacita De Los Reyes Phillips, G.R. Nos. 129505 & 133359,
January 31, 2000
Art. 854 - Preterition
Rafael E. Maninang vs. Court of Appeals, G.R. No. L-57848, June 19, 1982, 199 Phil
640
Art. 857 - Substitution of heir
Testate Estate of Jose Eugenio Ramirez vs. Marcelle D. Vda. De Ramirez, G.R. No.
L-27952, February 15, 1982
Art. 858 (1) and (4) - Simple or common substitution; fideicommissary

substitution
L-27952, February 15, 1982
Art. 859 - Substitution in case of predecease, renunciation or incapacity of heir
Celsa L. Vda. De Kilayko vs. Ernesto Tengco, G.R. Nos. L-45425 & 65, March 27, 1992
Vulgar substitution is valid although the heir survived the testator or stated
differently did not predecease the testator because dying before the testator is not the
only case for vulgar substitution. It also includes refusal or incapacity to accept the
inheritance as provided in Art. 859 of the Civil Code
L-27952, February 15, 1982
Art. 863 - Fideicommissary substitution
Ramona B. Vda. De Aranas vs. Vicente B. Aranas, G.R. No. L-56249, May 29, 1987
L-27952, February 15, 1982
Art. 870 - Dispositions declaring all or part of the estate inalienable for more
than twenty years are void
Ramona B. Vda. De Aranas vs. Vicente B. Aranas, G.R. No. L-56249, May 29, 1987
Art. 882 - Modal institution
The institution of an heir in the manner prescribed in Article 882 is what is known
in the law of succession as an institucion sub modo or a modal institution. In a modal
institution, the testator states (1) the object of the institution, (2) the purpose or
application of the property left by the testator, or (3) the charge imposed by the
testator upon the heir. A "mode" imposes an obligation upon the heir or legatee but it
does not affect the efficacy of his rights to the succession.
Art. 883 - When without the fault of the heir, an institution cannot take effect
Art. 886 - Legitime
Valente Raymundo vs. Teofista Isagon Vda. de Suarez, et al., G.R. No. 149017,
November 28, 2008
Art. 887 - Compulsory heirs
Classification of Compulsory Heirs
The compulsory heirs may be classified into (1) primary, (2) secondary, and (3)
concurring. The primary compulsory heirs are those who have precedence over and
exclude other compulsory heirs; legitimate children and descendants are primary
compulsory heirs. The secondary compulsory heirs are those who succeed only in the
absence of the primary heirs; the legitimate parents and ascendants are secondary
compulsory heirs. The concurring compulsory heirs are those who succeed together
with the primary or the secondary compulsory heirs; the illegitimate children, and the
surviving spouse are concurring compulsory heirs.
Amelia P. Arellano vs. Francisco Pascual, et al., G.R. No. 189776, December 15, 2010,
citing III Tolentino, 1992 Edition, p. 252
Juan De Dios Carlos vs. Felicidad Sandoval, et al., G.R. No. 179922, December 16,
2008
Valente Raymundo vs. Teofista Isagon vda. De Suarez, et al., G.R. No. 149017,
November 28, 2008
Lauro G. Vizconde vs. Court of Appeals, G.R. No. 118449, February 11, 1998
1990
Jose Baritua vs. Court of Appeals, G.R. No. 82233, March 22, 1990
Compulsory heirs like the widowed spouse shall have a share in the estate by way
of legitimes.
Mary Jane D. Velasco vs. Charlie Doroin, et al., A.C. No. 5033, July 28, 2008
Art. 888 - Legitime of legitimate children and descendants
Regina Francisco vs. Aida Francisco-Alfonso, G.R. No. 138774, March 8, 2001
Danilo I. Suarez vs. Court of Appeals, G.R. No. 94918, September 2, 1992
Art. 891 - Reserva troncal
In reserva troncal, (1) a descendant inherited or acquired by gratuitous title

property from an ascendant or from a brother or sister; (2) the same property is
inherited by another ascendant or is acquired by him by operation of law from the said
descendant, and (3) the said ascendant should reserve the said property for the benefit
of relatives who are within the third degree from the deceased descendant (
prepositus) and who belong to the line from which the said property came.
So, three transmissions are involved: (1) a first transmission by lucrative title
(inheritance or donation) from an ascendant or brother or sister to the deceased
descendant; (2) a posterior transmission, by operation of law (intestate succession or
legitime) from the deceased descendant (causante de la reserva) in favor of another
ascendant, the reservor or reservista, which two transmissions precede the reservation,
and (3) a third transmission of the same property (in consequence of the reservation)
from the reservor to the reservees (reservatarios) or the relatives within the third
degree from the deceased descendant belonging to the line of the first ascendant,
brother or sister of the deceased descendant (6 Castan Tobeñas, Derecho Civil, Part I,
1960, 6th Ed., pp. 198-9).
If there are only two transmissions there is no reserva. Thus, where one Bonifacia
Lacerna died and her properties were inherited by her son, Juan Marbebe, upon the
death of Juan, those lands should be inherited by his half-sister, to the exclusion of his
maternal first cousins. The said lands are not reservable property within the meaning
of article 811 (Lacerna vs. Vda. de Corcino, 111 Phil. 872).
The persons involved in reserva troncal are (1) the ascendant or brother or sister
from whom the property was received by the descendant by lucrative or gratuitous
title, (2) the descendant or prepositus ( propositus) who received the property, (3) the
reservor (reservista), the other ascendant who obtained the property from the
prepositus by operation of law and (4) the reservee (reservatario) who is within the
third degree from the prepositus and who belongs to the line (linea o tronco) from
which the property came and for whom the property should be reserved by the
reservor.
The reservees may be half-brothers and sisters (Rodriguez vs. Rodriguez, 101 Phil.
1098; Chua vs. Court of First Instance of Negros Occidental, L-29901, August 31,
1977). Fourth degree relatives are not included (Jardin vs. Villamayor, 72 Phil. 392).
The rationale of reserva troncal is to avoid "el peligro de que bienes poseidos
secularmente por una familia pasen bruscamente a titulo gratuito a manos extrañas por
el azar de los enlaces y muertes prematuras", or "impedir que, por un azar de la vida,
personas extrañas a una familia puedan adquirir bienes que sin aquel hubieran
quedado en ella" (6 Castan Tobeñas, Derecho Civil, Part 1, 6th Ed., 1960, p. 203;
Padura vs. Baldovino, 104 Phil. 1065).
Beatriz L. Gonzalez vs. CFI of Manila, G.R. No. L-34395, May 19, 1981
The issue raised is whether, as contended by the plaintiffs-appellees and ruled by

the lower Court, all relatives of the praepositus within the third degree in the
appropriation line succeed without distinction to the reservable property upon the
death of the reservista, as seems to be implicit in Art. 891 of the Civil Code, or, as
asserted by the defendant-appellant, the rights of said relatives are subject to, and
should be determined by, the rules on intestate succession. That question has already
been answered in Padura vs. Baldovino, where the reservatario was survived by
eleven nephews and nieces of the praepositus in the line of origin, four of whole
blood and seven of half blood, and the claim was also made that all eleven were
entitled to the reversionary property in equal shares. This Court, speaking through Mr.
Justice J.B.L. Reyes, declared the principles of intestacy to be controlling, and ruled
that the nephews and nieces of whole blood were each entitled to a share double that
of each of the nephews and nieces of half blood in accordance with Article 1006 of
the Civil Code.
Francisca T. De Papa vs. Dalisay T. Camacho, G.R. No. L-28032, September 24, 1986
The persons involved in reserva troncal are:
"1. The person obliged to reserve is the reservor (reservista) — the ascendant who
inherits by operation of law property from his descendants.
"2. The persons for whom the property is reserved are the reservees (reservatorios)
— relatives within the third degree counted from the descendant (propositus), and
belonging to the line from which the property came.
"3. The propositus — the descendant who received by gratuitous title and died
without issue, making his other ascendant inherit by operation of law." (p. 692, Civil
Law by Padilla, Vol. II, 1956 Ed.)
Clearly, the property of the deceased, Esteban Javellana, Jr., is not reservable
property, for Esteban, Jr. was not an ascendant, but the descendant of his mother,
Salustia Solivio, from whom he inherited the properties in question. Therefore, he did
not hold his inheritance subject to a reservation in favor of his aunt, Celedonia
Solivio, who is his relative within the third degree on his mother's side. The reserva
troncal applies to properties inherited by an ascendant from a descendant who
inherited it from another ascendant or a brother or sister. It does not apply to property
inherited by a descendant from his ascendant, the reverse of the situation covered by
Article 891.
Celedonia Solivio vs. Court of Appeals, G.R. No. 83484, February 12, 1990
Consistent with the rule in reserva viudal where the person obliged to reserve (the
widowed spouse) had the obligation to annotate in the Registry of Property the
reservable character of the property, in reserva troncal, the reservor (the ascendant
who inherited from a descendant property which the latter inherited from another
descendant) has the duty to reserve and therefore, the duty to annotate also.
The jurisprudential rule requiring annotation in the Registry of Property of the right
reserved in real property subject of reserva viudal insofar as it is applied to reserva
troncal stays despite the abolition of reserva viudal in the New Civil Code.
Mariquita O. Sumaya vs. Intermediate Appellate Court, G.R. Nos. 68843-44, September
2, 1991
Art. 895 - Legitime of acknowledged natural children and natural children by

legal fiction
Art. 909 - Donations to children shall be charged to legitime
Canuta Pagkatipunan vs. Intermediate Appellate Court, G.R. No. 70722, July 3, 1991
Art. 960 - Legal or intestate succession
Lourdes L. Dorotheo vs. Court of Appeals, G.R. No. 108581, December 8, 1999
Art. 962 - Relative nearest in degree excludes the more distant ones
Ofelia Hernando Bagunu vs. Pastora Piedad, G.R. No. 140975, December 8, 2000
Heirs of Pascasio Uriarte vs. Court of Appeals, G.R. No. 116775, January 22, 1998
Art. 966, par. 3 - In the collateral line, ascent is made to the common ancestor
and then descent is made to the person with whom the computation is to be
made.
Art. 970 - Representation
Isabel De La Puerta vs. Court of Appeals, G.R. No. 77867, February 6, 1990
Art. 979 - Legitimate children and their descendants succeed the parents and
other ascendants
The philosophy underlying this article is that a person's love descends first to his
children and grandchildren before it ascends to his parents and thereafter spreads
among his collateral relatives. It is also supposed that one of his purposes in acquiring
properties is to leave them eventually to his children as a token of his love for them
and as a provision for their continued care even after he is gone from this earth
Mauricio Sayson vs. Court of Appeals, G.R. Nos. 89224-25, January 23, 1992
Art. 982 - Grandchildren and other descendants inherit by right of
representation
Anselma Diaz vs. Intermediate Appellate Court, G.R. No. L-66574, February 21, 1990
Art. 985 - In default of legitimate children and descendants, parents and

ascendants shall inherit from deceased
Art. 990 - Right of representation of descendants of illegitimate children
Anselma Diaz vs. Intermediate Appellate Court, G.R. No. L-66574, June 17, 1987
Art. 992 - Illegitimate child cannot inherit ab intestato from legitimate children
and relatives of his father or mother and vice versa
Blanquita E. Dela Merced vs. Joselito P. Dela Merced, G.R. No. 126707, February 25,
1999
Olivia S. Pascual vs. Esperanza C. Pascual-Bautista, G.R. No. 84240, March 25, 1992
Anselma Diaz vs. Intermediate Appellate Court, G.R. No. L-66574, February 21, 1990
Isabel De La Puerta vs. Court of Appeals, G.R. No. 77867, February 6, 1990
Article 992, a basic postulate, enunciates what is so commonly referred to in the

rules on succession as the "principle of absolute separation between the legitimate
family and the illegitimate family." The doctrine rejects succession ab intestato in the
collateral line between legitimate relatives, on the one hand, and illegitimate relatives,
on other hand, although it does not totally disavow such succession in the direct line.
Since the rule is predicated on the presumed will of the decedent, it has no
application, however, on testamentary dispositions.
Benigno Manuel vs. Nicodemo T. Ferrer, G.R. No. 117246, August 21, 1995
Article 992 of the New Civil Code provides a barrier or iron curtain in that it
prohibits absolutely a succession ab intestato between the illegitimate child and the
legitimate children and relatives of the father or mother of said legitimate child. They
may have a natural tie of blood, but this is not recognized by law for the purposes of
Art. 992. Between the legitimate family and the illegitimate family there is presumed
to be an intervening antagonism and incompatibility. The illegitimate child is
disgracefully looked down upon by the legitimate family; the family is in turn, hated
by the illegitimate child; the latter considers the privileged condition of the former,
and the resources of which it is thereby deprived; the former, in turn, sees in the
illegitimate child nothing but the product of sin, palpable evidence of a blemish
broken in life; the law does no more than recognize this truth, by avoiding further
grounds of resentment.
Anselma Diaz vs. Intermediate Appellate Court, G.R. No. L-66574, June 17, 1987
Art. 1001 - Sharing when widow or widower survives with brothers and
sisters
Rodolfo Fernandez vs. Romeo Fernandez, G.R. No. 143256, August 28, 2001
A brother is not among those considered as compulsory heirs. But although a

collateral relative, such as a brother, does not fall within the ambit of a compulsory
heir, he still has a right to succeed to the estate.
2008
Art. 1003 - When collateral relatives may succeed to the entire estate of the
deceased
A brother is not among those considered as compulsory heirs. But although a

collateral relative, such as a brother, does not fall within the ambit of a compulsory
heir, he still has a right to succeed to the estate.
2008
To be entitled to moral damages, the respondents must have a right based upon law.
It is true that under Article 1003 of the Civil Code they succeeded to the entire estate
of the [decedent] in the absence of the latter's descendants, ascendants, illegitimate
children, and surviving spouse. However, they were not included among the persons
entitled to recover moral damages, as enumerated in Article 2219 of the Civil Code.
Article 2219 circumscribes the instances in which moral damages may be awarded.
The provision does not include succession in the collateral line as a source of the right
to recover moral damages. The usage of the phrase “analogous cases” in the provision
means simply that the situation must be held similar to those expressly enumerated in
the law in question following the ejusdem generis rule. Hence, Article 1003 of the
Civil Code is not concerned with recovery of moral damages.
In fine, moral damages may be recovered in an action upon breach of contract of

carriage only when: (a) where death of a passenger results, or (b) it is proved that the
carrier was guilty of fraud and bad faith, even if death does not result.
Sulpicio Lines, Inc. vs. Domingo E. Curso, et al., G.R. No. 157009, March 17, 2010
Art. 1009 - Other collateral relatives
Art. 1010 - Right to inherit ab intestato shall not extend beyond fifth degree of
relationship in the collateral line
Art. 1051 - Repudiation of inheritance
Art. 1061 - Collation
Two Concepts of Collation
The term collation has two distinct concepts: first, it is a mere mathematical
operation by the addition of the value of donations made by the testator to the value of
the hereditary estate; and second, it is the return to the hereditary estate of property
disposed of by lucrative title by the testator during his lifetime. The purposes of
collation are to secure equality among the compulsory heirs in so far as is possible,
and to determine the free portion, after finding the legitime, so that inofficious
donations may be reduced. Collation takes place when there are compulsory heirs, one
of its purposes being to determine the legitime and the free portion. If there is no
compulsory heir, there is no legitime to be safeguarded.
Amelia P. Arellano vs. Francisco Pascual, et al., G.R. No. 189776, December 15, 2010
Corazon M. Gregorio, et al. vs. Jose R. Madarang, et al., G.R. No. 185226, February
11, 2010
Natividad P. Nazareno vs. Court of Appeals, G.R. No. 138842, October 18, 2000
Florentino Zaragoza vs. Court of Appeals, G.R. No. 106401, September 29, 2000
Lauro G. Vizconde vs. Court of Appeals, G.R. No. 118449, February 11, 1998
Rolando Sanchez vs. Court of Appeals, G.R. No. 108947, September 29, 1997
Art. 1078 - Co-ownership before partition
Oscar C. Reyes vs. RTC of Makati, Br. 142, et al., G.R. No. 164744, August 11, 2008
Mauricia Alejandrino vs. Court of Appeals, G.R. No. 114151, September 17, 1998
Art. 1079 - Partition of estate
Carlos Gabila vs. Pablo Perez, G.R. No. 29541, January 27, 1989
Art. 1080 - Partition inter vivos or by will to be respected without prejudice to

legitime of compulsory heirs
Art. 1080 of the Civil Code clearly gives a person two options in making a partition
of his estate; either by an act inter vivos or by WILL. When a person makes a partition
by will, it is imperative that such partition must be executed in accordance with the
provisions of the law on wills; however, when a person makes the partition of his
estate by an act inter vivos, such partition may even be oral or written, and need not be
in the form of a will, provided that the partition does not prejudice the legitime of
compulsory heirs.
Raquel Chavez vs. Intermediate Appellate Court, G.R. No. 68282, November 8, 1990
Art. 1082 - Act intended to end in division among co-heirs and legatees or
devisees deemed to be a partition
Effect of Notarization of Deed of Extrajudicial Settlement
Notarization of the deed of extrajudicial settlement has the effect of making it a

public document that can bind third parties. However, this formal requirement appears
to be superseded by the substantive provision of the Civil Code in Article 1082.
Francisco Tayco vs. Heirs of Concepcion Tayco-Flores, G.R. No. 168692, December
13, 2010
Gregorio Favor vs. Court of Appeals, G.R. No. 80821, February 21, 1991
Carlos Gabila vs. Pablo Perez, G.R. No. 29541, January 27, 1989
Art. 1088 - Subrogation of co-heirs
Republic of the Phils. vs. Heirs of Francisca Dignos-Sorono, et al., G.R. No. 171571,
March 24, 2008
Clarita P. Hermoso vs. Court of Appeals, G.R. No. 108580, December 29, 1998
Leonardo Mariano vs. Court of Appeals, G.R. No. 101522, May 28, 1993
Francisco Garcia vs. Jose Calaliman, G.R. No. 26855, April 17, 1989
Art. 1100 - Prescription of action for rescission
It has also been ruled by this Court that the four years period provided in Article
1100 of the Civil Code (formerly Art. 1076 of the old Civil Code) should commence
to run from the approval of the agreement of partition by the Court (Samson vs.
Araneta, 60 Phil. 27, 36).
1989
Art. 1104 - Partition with preterition of compulsory heir
Aznar Brothers Realty Company vs. Court of Appeals, G.R. No. 128102, March 7, 2000
Art. 1105 - Partition which includes person who is not an heir
Maria Landayan vs. Angel Bacani, G.R. No. L-30455, September 30, 1982
Art. 1106 - Prescription
Republic of the Phils. vs. Candido P. Villanueva, G.R. No. L-55289, June 29, 1982
Art. 1106 of the Civil Code provides that by prescription, one acquires ownership
and other real rights through the lapse of time, in the manner and under the conditions
laid down by law. In the same way, rights and actions are lost by prescription. There
are thus two kinds of prescription: (1) the acquisition of a right by the lapse of time, or
acquisitive prescription; and (2) the loss of a right of action by the lapse of time, or
extinctive prescription.
Dominica Cutanda vs. Roberto Cutanda, G.R. No. 109215, July 11, 2000
Art. 1107 - Persons capable of acquiring property or rights by other legal

modes may acquire the same by prescription
Pan American World Airways, Inc. vs. Intermediate Appellate Court, G.R. No. L-70462,
August 11, 1988
Art. 1108 - Prescription
Differences between "laches" and "prescription."
"Laches" has been defined as "such neglect or omission to assert a right, taken in
conjunction with lapse of time and other circumstances causing prejudice to an
adverse party, as will operate as a bar in equity." It is a delay in the assertion of a right
"which works disadvantage to another" because of the "inequity founded on some
change in the condition or relations of the property or parties." It is based on public
policy which, for the peace of society, ordains that relief will be denied to a stale
demand which otherwise could be a valid claim. It is different from and applies
independently of prescription. While prescription is concerned with the fact of delay,
laches is concerned with the effect of delay. Prescription is a matter of time; laches is
principally a question of inequity of permitting a claim to be enforced, this inequity
being founded on some change in the condition of the property or the relation of the
parties. Prescription is statutory; laches is not. Laches applies in equity, whereas
prescription applies at law. Prescription is based on a fixed time, laches is not.
Bartola M. Vda. de Tirona, et al. vs. Cirilo Encarnacion, G.R. No. 168902, September
28, 2007
Heirs of Juan and Ines Panganiban vs. Angelina N. Dayrit, G.R. No. 151235, July 28,
2005
Elements of laches.
The four (4) elements of laches are as follows:
(1) conduct on the part of the defendant, or of one under whom he claims, giving
rise to the situation of which complaint is made for which the complaint seeks a
remedy;
(2) delay in asserting the complainant's rights, the complainant having had
knowledge or notice, of the defendant's conduct and having been afforded an
opportunity to institute a suit;
(3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and
(4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred.
28, 2007
Go Chi Gun, et al v. Co Cho, et al., G.R. No. L-5208, February 28, 1955
The second of element of laches is three-tiered.
The second element is three-tiered. There must be: (a) knowledge of defendant's
action; (b) opportunity to sue defendant after obtaining such knowledge; and (c) delay
in the filing of such suit.
28, 2007
Rationale for the doctrine of laches.
The reason upon which the rule is based is not alone the lapse of time during which
the neglect to enforce the right has existed, but the changes of condition which may
have arisen during the period in which there has been neglect. In other words, where a
court of equity finds that the position of the parties has to change that equitable relief
cannot be afforded without doing injustice, or that the intervening rights of third
persons may be destroyed or seriously impaired, it will not exert its equitable powers
in order to save one from the consequences of his own neglect." In effect, the
principle is one of estoppel because it prevents people who have slept on their rights
from prejudicing the rights of third parties who have placed reliance on the inaction of
the original patentee and his successors-in-interest.
28, 2007
Concordia Mejia de Lucas vs. Andres Gamponia, G.R. No. L-9335, October 31, 1956
The doctrine of laches is not strictly applied between near relatives.
Laches, being rooted in equity, is not always to be applied strictly in a way that
would obliterate an otherwise valid claim especially between blood relatives. The
existence of a confidential relationship based upon consanguinity is an important
circumstance for consideration; hence, the doctrine is not to be applied mechanically
as between near relatives. Adaza v. Court of Appeals (253 Phil. 364, 376 (1989)) held
that the relationship between the parties therein, who were siblings, was sufficient to
explain and excuse what would otherwise have been a long delay in enforcing the
claim and the delay in such situation should not be as strictly construed as where the
parties are complete strangers vis-a-vis each other; thus, reliance by one party upon his
blood relationship with the other and the trust and confidence normally connoted in
our culture by that relationship should not be taken against him. Too, Sotto v. Teves
(175 Phil. 343 (1978)) ruled that the doctrine of laches is not strictly applied between
near relatives, and the fact that the parties are connected by ties of blood or marriage
tends to excuse an otherwise unreasonable delay.
Estate of Margarita D. Cabacungan vs. Marilou Laigo, et al., G.R. No. 175073, August
15, 2011
Art. 1108 (1)

1989
Art. 1113 - All things within the commerce of men are subject to prescription
except property of the State not patrimonial in character
Eugenio De La Cruz vs. Court of Appeals, G.R. No. 120652, February 11, 1998
Art. 1116 - Prescription already running before the effectivity of this Code
shall be governed by laws previously in force
Marcelino Kiamco vs. Court of Appeals, G.R. No. 96865, July 3, 1992
Art. 1117 - Acquisitive prescription of dominion and other real rights may be
ordinary or extraordinary
Quirico Seraspi vs. Court of Appeals, G.R. No. 135602, April 28, 2000
Possession should be in the concept of an owner, public, peaceful, uninterrupted

and adverse.
Prescription is another mode of acquiring ownership and other real rights over
immovable property. It is concerned with lapse of time in the manner and under
conditions laid down by law, namely, that the possession should be in the concept of
an owner, public, peaceful, uninterrupted and adverse. Possession is open when it is
patent, visible, apparent, notorious and not clandestine. It is continuous when
uninterrupted, unbroken and not intermittent or occasional; exclusive when the
adverse possessor can show exclusive dominion over the land and an appropriation of
it to his own use and benefit; and notorious when it is so conspicuous that it is
generally known and talked of by the public or the people in the neighborhood. The
party who asserts ownership by adverse possession must prove the presence of the
essential elements of acquisitive prescription.
Heirs of Marcelina Arzadon-Crisologo vs. Agrifina Rañon, G.R. No. 171068, September
5, 2007
Acquisitive prescription is a mode of acquiring ownership by a possessor through

the requisite lapse of time. In order to ripen into ownership, possession must be in the
concept of an owner, public, peaceful and uninterrupted. Thus, mere possession with a
juridical title, such as by a usufructuary, a trustee, a lessee, an agent or a pledgee, not
being in the concept of an owner, cannot ripen into ownership by acquisitive
prescription, unless the juridical relation is first expressly repudiated and such
repudiation has been communicated to the other party. Acts of possessory character
executed due to license or by mere tolerance of the owner would likewise be
inadequate. Possession, to constitute the foundation of a prescriptive right, must be en
concepto de dueño, or, to use the common law equivalent of the term, that possession
should be adverse, if not, such possessory acts, no matter how long, do not start the
running of the period of prescription.
Franco Esguerra vs. Alfonso Manantan, et al., G.R. No. 158328, February 23, 2007
Art. 1119 - Acts of possessory character
Prescription as a mode of acquisition requires the existence of the following: (1)

capacity to acquire by prescription; (2) a thing capable of acquisition by prescription;
(3) possession of the thing under certain conditions; and (4) lapse of time provided by
law. Acquisitive prescription may either be ordinary, in which case the possession
must be in good faith and with just title; or extraordinary, in which case there is
neither good faith nor just title. In either case, there has to be possession, which must
be in the concept of an owner, public, peaceful and uninterrupted. . . . Acts of
possessory character performed by one who holds by mere tolerance of the owner are
clearly not en concepto de dueño, and such possessory acts, no matter how long so
continued, do not start the running of the period of prescription.
Herminio M. Gutierrez, et al. vs. Flora Mendoza-Plaza, et al., G.R. No. 185477,
December 4, 2009
Art. 1123 - Civil interruption
For civil interruption to take place, the possessor must have received judicial
summons.
Civil interruption is produced by judicial summons to the possessor. Moreover,

even with the presence of judicial summons, Article 1124 sets limitations as to when
such summons shall not be deemed to have been issued and shall not give rise to
interruption, to wit: 1) if it should be void for lack of legal solemnities; 2) if the
plaintiff should desist from the complaint or should allow the proceedings to lapse; or
3) if the possessor should be absolved from the complaint. Both Article 1123 and
Article 1124 of the Civil Code underscore the judicial character of civil interruption.
For civil interruption to take place, the possessor must have received judicial
summons.
5, 2007
Art. 1129 - Just title for purposes of prescription
Art. 1130 - Title for prescription must be true and valid
Reynaldo Aguirre vs. Court of Appeals, G.R. No. 122249, January 29, 2004
Art. 1132 - Ownership of movables prescribes through uninterrupted

possession for four years in good faith
Lim Tay vs. Court of Appeals, G.R. No. 126891, August 5, 1998
Art. 1134 - Ownership and other real rights over immovable property are
acquired by ordinary prescription through possession of ten years
Sotera Paulino Marcelo vs. Court of Appeals, G.R. No. 131803, April 14, 1999
Republic of the Phils. vs. Intermediate Appellate Court, G.R. No. 74830, July 5, 1993
Marcelina Sapu-an vs. Court of Appeals, G.R. No. 91869, October 19, 1992
While Art. 1134 of the Civil Code provides that "(o)wnership and other real rights
over immovable property are acquired by ordinary prescription through possession of
ten years," this provision of law must be read in conjunction with Art. 1117 of the
same Code. This article states that ". . . (o)rdinary acquisitive prescription of things
requires possession in good faith and with just title for the time fixed by law." Hence,
prescriptive title to real estate is not acquired by mere possession thereof under claim
of ownership for a period of ten years unless such possession was acquired con justo
titulo y buena fe (with color of title and good faith). The good faith of the possessor
consists in the reasonable belief that the person from whom he received the thing was
the owner thereof, and could transmit his ownership. For purposes of prescription,
there is just title when the adverse claimed came into possession of the property
through one of the modes recognized by law for the acquisition of ownership or other
real rights but the grantor was not the owner or could not transmit any right.
Distinctions between ordinary and extraordinary acquisitive prescription.
Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary

acquisitive prescription requires possession of things in good faith and with just title
for the time fixed by law; without good faith and just title, acquisitive prescription can
only be extraordinary in character. Regarding real or immovable property, ordinary
acquisitive prescription requires a period of possession of ten years, while
extraordinary acquisitive prescription requires an uninterrupted adverse possession of
thirty years.
5, 2007
Art. 1135 - In case the adverse claimant possesses by mistake an area greater,
or less, than that expressed in his title, prescription shall be based on the
possession
South City Homes, Inc. vs. Republic of the Phils., G.R. No. 76564, May 25, 1990
Art. 1136 - Possession in wartime
Republic of the Phils. vs. Court of Appeals, G.R. No. 29390, April 12, 1989
Art. 1137 - Ownership and other real rights over immovables also prescribe
through uninterrupted adverse possession thereof for thirty years
Octabela Alba Vda. De Raz vs. Court of Appeals, G.R. No. 120066, September 9, 1999
It is well-settled that properties classified as alienable and disposable land may be

converted into private property by reason of open, continuous and exclusive
possession of at least 30 years. Such property now falls within the contemplation of
"private lands" under Section 14 (2), over which title by prescription can be acquired.
Hence, because of Section 14 (2) of Presidential Decree No. 1529, those who are in
possession of alienable and disposable land, and whose possession has been
characterized as open, continuous and exclusive for 30 years or more, may have the
right to register their title to such land despite the fact that their possession of the land
commenced only after 12 June 1945.
Angelita F. Buenaventura, et al.vs. Republic of the Phil., G.R. No. 166865, March 2,
2007
Art. 1138 - Computation of time necessary for prescription
Open, exclusive, and continuous possession for at least 30 years of alienable public
land ipso jure converts the same to private property. The conversion works to summon
into operation Section 14(2) of the Property Registration Decree which, in turn,
authorizes the acquisition of private lands through prescription.
Limcoma Multi-Purpose Cooperative vs. Republic of the Phil., G.R. No. 167652, July
10, 2007
Art. 1138 (1) - Tacking of possession
However, tacking of possession is allowed only when there is a privity of contract

or relationship between the previous and present possessors. In the absence of such
privity, the possession of the new occupant should be counted only from the time it
actually began and cannot be lengthened by connecting it with the possession of the
former possessors.
South City Homes, Inc. vs. Republic of the Phils., G.R. No. 76564, May 25, 1990
Art. 1139 - Actions prescribe by the mere lapse of time fixed by law
William Cole vs. Potenciana Casuga Vda. De Gregorio, G.R. No. L-55315, September
21, 1982
Art. 1140 - Actions to recover movables shall prescribe eight years from the
time the possession thereof is lost
National Dev't Co. vs. Court of Appeals, G.R. No. 98467, July 10, 1992
Vicente T. Tan vs. Court of Appeals, G.R. No. 90365, March 18, 1991
Art. 1141 - Real actions over immovables prescribe after thirty years
Desamparados M. Soliva vs. Intestate Estate of Marcelo M. Villalba, G.R. No. 154017,
December 8, 2003
Aurora Alcantara-Daus vs. Sps. Hermoso & Socorro De Leon, G.R. No. 149750, June
16, 2003
Lina Abalon Lubos vs. Marites Galupo, G.R. No. 139136, January 16, 2002
Marciana De Morales vs. Court of First Instance of Misamis Occidental, G.R. No.
L-52278, May 29, 1980
Art. 1142 - A mortgage action prescribes after ten years
B & I Realty, Inc. vs. Teodoro Caspe, et al., G.R. No. 146972, January 29, 2008
Irene Benedicto vs. Court of Appeals, G.R. No. 81344, February 7, 1990
Under Article 1142 of the Civil Code, a mortgage action prescribes after ten (10)
years. Jurisprudence, however, has clarified this rule by holding that a mortgage
action prescribes after ten (10) years from the time the right of action accrued, which
is obviously not the same as the date of the mortgage contract. Stated differently, an
action to enforce a right arising from a mortgage should be enforced within ten (10)
years from the time the right of action accrues; otherwise, it will be barred by
prescription and the mortgage creditor will lose his rights under the mortgage. The
right of action accrues when the mortgagor defaults in the payment of his obligation to
the mortgagee.
Herminia Cando vs. Sps. Aurora and Claudio Olazo, G.R. No. 160741, March 22, 2007
Art. 1143 - Rights not extinguished by prescription
Phil. Petroleum Corp. vs Municipality of Pililla, G.R. No. 90776, June 3, 1991
Art. 1144 - Actions which must be brought within ten years from time right of
action accrues
Unlad Resources Development Corp., et al. vs. Renato P. Dragon, et al., G.R. No.
149338, July 28, 2008
In Re: Antonio S. Alano, A.M. No. 10654-Ret., June 27, 2008
Heirs of Pomposa Saludares vs. Court of Appeals, G.R. No. 128254, January 16, 2004
Apolinaria Austria-Magat vs. Court of Appeals, G.R. No. 106755, February 1, 2002
Shipside Incorporated vs. Court of Appeals, G.R. No. 143377, February 20, 2001
Alfonso T. Yuchengco vs. Republic of the Phils., G.R. No. 131127, June 8, 2000
Employees’ Compensation Commission vs. Edmund Sanico, G.R. No. 134028,

December 17, 1999
Jessie V. Pisueña vs. Petra Unating, G.R. No. 132803, August 31, 1999
Amado De Guzman vs. Court of Appeals, G.R. No. 132257, October 12, 1998
Republic of the Phils. vs. Sandiganbayan, G.R. Nos. 112708-09, March 29, 1996
Luis Tan vs. David G. Nitafan, G.R. No. 76965, March 11, 1994
Feliciana Licayan Tale vs. Court of Appeals, G.R. No. 101028, April 23, 1992
Board of Commissioners (CID) vs. Joselito Dela Rosa, G.R. No. 95122-23, May 31,
1991
Fortunata Vda. De Hornido vs. Employees' Compensation Commission, G.R. No.

78859, July 19, 1990
Crisanta F. Seno vs. Marcos Mangubat, G.R. No. L-44339, December 2, 1987
Liwalug Amerol vs. Molok Bagumbaran, G.R. No. L-33261, September 30, 1987
Anita Mang-Oy vs. Court of Appeals, G.R. No. L-27421, September 21, 1986
Gregorio Sta. Romana vs. Mariano M. Lacson, G.R. No. L-27754, April 8, 1981
When Right of Action Accrues
Article 1144 specifically provides that the 10-year period is counted from "the time
the right of action accrues". The right of action accrues from the moment the breach
of right or duty occurs.
Unlad Resources Development Corporation vs. Renato p. Dragon, G.R. No. 149338,
July 28, 2008
Constante Amor De Castro vs. Court of Appeals, G.R. No. 115838, July 18, 2002
Article 1144 of the Civil Code provides that actions based upon a written contract
must be brought within ten years from the time the right of action accrues.
Non-fulfillment of the obligation to pay on the last due date, that is, on November 15,
1974, would give rise to an action by the vendor, which date of reckoning may also
apply to any action by the vendee to determine his right under R.A. No. 6552.
Manuel Uy & Sons, Inc. v. Valbueco, Inc., G.R. No. 179594, September 11, 2013
Art. 1144 (3) - Upon judgment
Mary M. Bausa, et al. vs. Heirs of Juan Dino, et al., G.R. No. 167281, August 28, 2008
While indeed, the above provisions [Article 1144, Civil Code] on extinctive
prescription cannot be the basis for depriving a registered owner of its title to a
property, they nevertheless prohibit petitioners from enforcing the ex parte judgment
in their favor, which can likewise be the basis of a pronouncement of laches.
Alejandro B. Ty, et al. vs. Queen's Row Subdivision, Inc., et al., G.R. No. 173158,
December 4, 2009
While it is by express provision of law that no title to registered land in derogation

of that of the registered owner shall be acquired by prescription or adverse possession,
it is likewise an enshrined rule that even a registered owner may be barred from
recovering possession of property by virtue of laches.
Alejandro B. Ty, et al. vs. Queen's Row Subdivision, Inc., et al., G.R. No. 173158,
December 4, 2009
It is settled that an action for reconveyance based on a constructive implied trust

prescribes in 10 years likewise in accordance with Article 1144 of the Civil Code. Yet
not like in the case of a resulting implied trust and an express trust, prescription
supervenes in a constructive implied trust even if the trustee does not repudiate the
relationship. In other words, repudiation of said trust is not a condition precedent to
the running of the prescriptive period.
As to when the prescriptive period commences to run, Crisostomo v. Garcia (516
Phil. 743 (2006)) elucidated as follows: When property is registered in another's
name, an implied or constructive trust is created by law in favor of the true owner.
The action for reconveyance of the title to the rightful owner prescribes in 10 years
from the issuance of the title. An action for reconveyance based on implied or
constructive trust prescribes in ten years from the alleged fraudulent registration or
date of issuance of the certificate of title over the property.
It is now well settled that the prescriptive period to recover property obtained by
fraud or mistake, giving rise to an implied trust under Art. 1456 of the Civil Code, is
10 years pursuant to Art. 1144. This ten-year prescriptive period begins to run
from the date the adverse party repudiates the implied trust, which repudiation
takes place when the adverse party registers the land.
15, 2011
It is clear that an action for reconveyance under a constructive implied trust in

accordance with Article 1456 does not prescribe unless and until the land is registered
or the instrument affecting the same is inscribed in accordance with law, inasmuch as
it is what binds the land and operates constructive notice to the world. In the present
case, however, the lands involved are concededly unregistered lands; hence, there is
no way by which Margarita, during her lifetime, could be notified of the furtive and
fraudulent sales made in 1992 by Roberto in favor of respondents, except by actual
notice from Pedro himself in August 1995. Hence, it is from that date that prescription
began to toll.
15, 2011
Art. 1145 - Actions which must be commenced in six years
Maria L. Anido vs. Filomeno Negado and The Honorable Court of Appeals, G.R. No.
143990, October 17, 2001
National Development Company vs. Cebu City, G.R. No. 51593, November 5, 1992
Art. 1146 - Actions which must be instituted within four years
Noel E. Mora vs. Avesco Marketing Corp., G.R. No. 177414, November 14, 2008
Philippine Airlines, Inc. vs. Adriano Savillo, G.R. No. 149547, July 4, 2008
Texon Manufacturing vs. Grace Millena, G.R. No. 141380, April 14, 2004
Hagonoy Rural Bank vs. NLRC, G.R. No. 122075, January 28, 1998
Reno Foods vs. NLRC, G.R. No. 116462, October 18, 1995
Pablo R. Magno vs. Philippine National Construction Corporation, G.R. No. 87320, June
6, 1991
Art. 1149 - Actions whose periods are not fixed must be brought within five
years
Marcelo Lee vs. Court of Appeals, G.R. No. 118387, October 11, 2001
Art. 1150 - Prescription for all kinds of actions shall be counted from the day
they may be brought
Khe Hong Cheng vs. Court of Appeals, G.R. No. 144169, March 28, 2001
Banco Filipino Savings and Mortgage Bank vs. Court of Appeals, G.R. No. 129227, May
30, 2000
The day the action may be brought is the day a claim started as a legal possibility.
Virgilio G. Anabe vs. Asian Construction (Asiakonstrukt), et al., G.R. No. 183233,
December 23, 2009
Art. 1151 - Prescription of actions which have for their object the enforcement
of obligations to pay principal with interest or annuity
B & I Realty, Inc. vs. Teodoro Caspe, et al., G.R. No. 146972, January 29, 2008
Art. 1152 - Prescription of actions to demand the fulfillment of obligation

declared by a judgment commences when judgment becomes final
Gregorio Sta. Romana vs. Mariano M. Lacson, G.R. No. L-27754, April 8, 1981
Art. 1155 - When prescription is interrupted
William Alain Miailhe vs. Court of Appeals, G.R. No. 108991, March 20, 2001
Amado De Guzman vs. Court of Appeals, G.R. No. 132257, October 12, 1998
National Waterworks vs. NLRC, G.R. No. 121910, July 3, 1996
Jaime Ledesma vs. Court of Appeals, G.R. No. 106646, June 30, 1993
The filing of a complaint in court interrupts the running of prescription of actions.

Sps. Narciso and Julita Barnachea vs. Court of Appeals, et al., G.R. No. 150025, July
23, 2008
The written acknowledgment and assumption of the mortgage obligation by

respondents had the effect of interrupting the prescriptive period of the mortgage
action.
B & I Realty Co., Inc. vs. Sps. Teodoro and Purificacion A. Caspe, G.R. No. 146972,
January 29, 2008
Art. 1157 - How obligations arise
Lydia A. Villegas, et al. vs. Court of Appeals, et al., G.R. Nos. 82562 & 82592, April 11,
1997
The civil action which survives the death of the accused must hinge on other
sources of obligation provided in Article 1157 of the Civil Code.
ABS-CBN Broadcasting Corp., et al. vs. Office of the Ombudsman, et al., G.R. No.
133347, October 15, 2008
Art. 1159 - Obligations arising from contracts
Phil. Communications Satellite Corp. vs. Globe Telecom, G.R. Nos. 147324 & 147334,
May 25, 2004
Leonardo Chua vs. Mutya B. Victorio, G.R. No. 157568, May 18, 2004
City of Cebu vs. Sps. Apolonio and Blasa Dedamo, G.R. No. 142971, May 7, 2002
Philippine National Bank vs. Benito C. Se, Jr., G.R. No. 119231, April 18, 1996
Roman Catholic Bishop of Malolos, Inc. vs. Intermediate Appellate Court, G.R. No.
72110, November 16, 1990
Alex G. Lee vs. Salvador P. De Guzman, Jr., G.R. No. 90926, July 6, 1990
Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
Edsel Liga vs. Allegro Resources Corp., G.R. No. 175554, December 23, 2008
Aurora B. Go vs. Teresita C. Remotigue, A.M. No. P-05-1969, June 12, 2008
A contract is the law between the parties.

Dorie Abesa Nicolas vs. Del-Nacia Corp., G.R. No. 158026, April 23, 2008
Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
Prisma Construction & Dev't. Corp., et al. vs. Arthur F. Menchavez, G.R. No. 160545,
March 9, 2010
Art. 1161 - Civil obligations arising from criminal offenses
Sps. Alfredo and Cleopatra Pacis vs. Jerome Jovanne Morales, G.R. No. 169467,
February 25, 2010
Art. 1163 - Every person obliged to give something is also obliged to take care
of it with the proper diligence of a good father of a family
Optimum Motor Center Corp. vs. Annie Tan, G.R. No. 170202, July 14, 2008
Art. 1167 - If a person obliged to do something fails to do it, the same shall be
executed at his cost
Perla Palma Gil vs. Court of Appeals, G.R. No. 127206, September 12, 2003
Art. 1168 - When obligation consists in not doing
Eliseo Fajardo, Jr. vs. Freedom to Build, G.R. No. 134692, August 1, 2000
Juan L. Perez vs. Court of Appeals, G.R. No. 107737, October 1, 1999
Art. 1169 - Delay
Ek Lee Steel Works Corp. vs. Manila Castor Oil Corp., et al., G.R. No. 119033, July 9,
2008
Andre T. Almocera vs. Johnny Ong, G.R. No. 170479, February 18, 2008
Commonwealth Insurance Corp. vs. Court of Appeals, G.R. No. 130886, January 29,
2004
December 8, 2003
Aerospace Chemical Industries vs. Court of Appeals, G.R. No. 108129, September 23,
1999
Jesus T. David vs. Court of Appeals, G.R. No. 97240, October 16, 1992
Cetus Development Inc. vs. Court of Appeals, G.R. No. 77647, August 7, 1989
A demand is only necessary in order to put an obligor in a due and demandable

obligation in delay.
Autocorp Group, et al. vs. Intra Strata Assurance Corp., et al., G.R. No. 166662, June
27, 2008
"In order that the debtor may be in default[,] it is necessary that the following
requisites be present: (1) that the obligation be demandable and already liquidated; (2)
that the debtor delays performance; and (3) that the creditor requires the performance
judicially and extrajudicially." Default generally begins from the moment the creditor
demands the performance of the obligation. In this case, demand could be considered
to have been made upon the filing of the complaint on November 19, 1999, and it is
only from this date that the interest should be computed.
Rodolfo G. Cruz, et al. vs. Delfin Gruspe, G.R. No. 191431, March 13, 2013
Filing a case in court is the judicial demand referred to in Article 1169 of the Civil
Code, which would put the obligor in delay.
United Coconut Planters Bank vs. Sps. Samuel and Odette Beluso, G.R. No. 159912,
August 17, 2007
Art. 1169 (last par.)
Phil. Export & Foreign Loan vs. VP Eusebio Construction, G.R. No. 140047, July 13,
2004
Twin Towers Condominium vs. Court of Appeals, G.R. No. 123552, February 27, 2003
The use of a credit card to pay for a purchase is only an offer to the credit card
company to enter a loan agreement with the credit card holder. Before the credit card
issuer accepts this offer, no obligation relating to the loan agreement exists
between them. On the other hand, a demand is defined as the "assertion of a legal
right; . . . an asking with authority, claiming or challenging as due." A demand
presupposes the existence of an obligation between the parties. Petitioner's act of
"insisting on and waiting for the charge purchases to be approved by AMEX" is not
the demand contemplated by Article 1169 of the Civil Code.
Polo S. Pantaleon vs. American Express International, Inc., G.R. No. 174269, August
25, 2010
Art. 1170 - Liability for damages
Joseph Saludaga vs. Far Eastern University, et al., G.R. No. 179337, April 30, 2008
Manila Electric Company vs. Matilde Macabagdal Ramoy, et al., G.R. No. 158911,
March 4, 2008
Woodchild Holdings vs. Roxas Electric and Const. Co., G.R. No. 140667, August 12,
2004
Alejandro Mirasol vs. Court of Appeals, G.R. No. 128448, February 1, 2001
1999
RCBC vs. Court of Appeals, G.R. No. 133107, March 25, 1999
Legaspi Oil Co., Inc. vs. Court of Appeals, G.R. No. 96505, July 1, 1993
Juan J. Syquia vs. Court of Appeals, G.R. No. 98695, January 27, 1993
PNCC vs. NLRC, G.R. No. 81551, April 27, 1989
To put an obligor in a due and demandable obligation in delay is for the purpose of
making the obligor liable for interests or damages for the period of delay.
27, 2008
Those who are negligent in the performance of their obligations are liable for
damages.
Manila Electric Co. vs. Matilde Macabagdal Ramoy, et al., G.R. No. 158911, March 4,
2008
Art. 1172 - Responsibility arising from negligence also demandable
Consolidated Bank and Trust Corp. vs. Court of Appeals, G.R. No. 138569, September
11, 2003
Art. 1173, par. 2 - Diligence of a good father of a family
Osmundo S. Canlas vs. Court of Appeals, G.R. No. 112160, February 28, 2000
Bernardino Jimenez vs. City of Manila, G.R. No. 71049, May 29, 1987
The diligence of a good father of a family requires only that diligence which an
ordinary prudent man would exercise with regard to his own property.
Wildvalley Shipping Co. vs. Court of Appeals, G.R. No. 119602, October 6, 2000
Art. 1174 - Responsibility for events which cannot be foreseen (Caso fortuito)
Phil. Comm. Satellite Corp. vs. Globe Telecom, G.R. No. 147324, May 25, 2004
Fortune Express vs. Court of Appeals, G.R. No. 119756, March 18, 1999
Southeastern College vs. Court of Appeals, G.R. No. 126389, July 10, 1998
Jacinto Tanguilig vs. Court of Appeals, G.R. No. 117190, January 2, 1997
National Power Corporation vs. Court of Appeals, G.R. No. 103442-45, May 21, 1993
Bachelor Express, Incorporated vs. Court of Appeals, G.R. No. 85691, July 31, 1990
Bacolod-Murcia Milling Co., Inc. vs. Court of Appeals, G.R. No. 81100-01, February 7,
1990
"Fortuitous events" defined
Fortuitous events by definition are extraordinary events not foreseeable or

avoidable. It is therefore, not enough that the event should not have been foreseen or
anticipated, as is commonly believed but it must be one impossible to foresee or to
avoid. The mere difficulty to foresee the happening is not impossibility to foresee the
same.
Roberto C. Sicam, et al. vs. Lulu v. Jorge, et al., G.R. No. 159617, August 8, 2007
When an act of God or act of man constitutes a fortuitous event.
Article 1174 of the Civil Code defines a fortuitous event as that which could not be
foreseen, or which, though foreseen, was inevitable. Whether an act of God or an act
of man, to constitute a fortuitous event, it must be shown that: a) the cause of the
unforeseen and unexpected occurrence or of the failure of the obligor to comply with
its obligations was independent of human will; b) it was impossible to foresee the
event or, if it could have been foreseen, to avoid it; c) the occurrence rendered it
impossible for the obligor to fulfill its obligations in a normal manner; and d) said
obligor was free from any participation in the aggravation of the injury or loss. If the
negligence or fault of the obligor coincided with the occurrence of the fortuitous
event, and caused the loss or damage or the aggravation thereof, the fortuitous event
cannot shield the obligor from liability for his negligence.
College Assurance Plan, et al. vs. Belfranlt Development, Inc., G.R. No. 155604,
November 22, 2007
To constitute a fortuitous event, the following elements must concur: (a) the cause
of the unforeseen and unexpected occurrence or of the failure of the debtor to comply
with obligations must be independent of human will; (b) it must be impossible to
foresee the event that constitutes the caso fortuito or, if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be such as to render it impossible for the
debtor to fulfill obligations in a normal manner; and, (d) the obligor must be free from
any participation in the aggravation of the injury or loss.
An act of God cannot be invoked to protect a person who has failed to take steps to
forestall the possible adverse consequences of such a loss. One's negligence may have
concurred with an act of God in producing damage and injury to another; nonetheless,
showing that the immediate or proximate cause of the damage or injury was a
fortuitous event would not exempt one from liability. When the effect is found to be
partly the result of a person's participation - whether by active intervention, neglect or
failure to act - the whole occurrence is humanized and removed from the rules
applicable to acts of God.
In order to constitute a caso fortuito or force majeure that would exempt a person
from liability under Article 1174 of the Civil Code, it is necessary that the following
elements must concur: (a) the cause of the breach of the obligation must be
independent of the human will (the will of the debtor or the obligor); (b) the event
must be either unforeseeable or unavoidable; (c) the event must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (d) the
debtor must be free from any participation in, or aggravation of the injury to the
creditor (Lasam v. Smith, 45 Phil. 657 [1924]; Austria v. Court of Appeals, G.R. No.
L-29640, June 10, 1971; Estrada v. Consolacion, supra; Vasquez v. Court of Appeals,
G.R. No. L-42926, September 13, 1985; Juan F. Nakpil & Sons v. Court of Appeals,
G.R. No. L-47851, October 3, 1986). Caso fortuito or force majeure, by definition,
are extraordinary events not foreseeable or avoidable, events that could not be
foreseen, or which, though foreseen, are inevitable. It is, therefore, not enough that the
event should not have been foreseen or anticipated, as is commonly believed, but it
must be one impossible to foresee or to avoid. The mere difficulty to foresee the
happening is not impossibility to foresee the same (Republic v. Luzon Stevedoring
Corporation, G.R. No. L-21749, September 29, 1967). 05plpecda
Franklin G. Gacal vs. Philippine Air Lines, Inc., G.R. No. 55300, March 15, 1990
Burden of proving loss due to furtuitous event

The burden of proving that the loss was due to a fortuitous event rests on him who
invokes it. And, in order for a fortuitous event to exempt one from liability, it is
necessary that one has committed no negligence or misconduct that may have
occasioned the loss.
Art. 1176 - Presumption that interest has been paid
Soledad Soco vs. Francis Militante, G.R. No. L-58961, June 28, 1983, 208 Phil 151
Art. 1177 - Rights of creditors
Thus, the following successive measures must be taken by a creditor before he may
bring an action for rescission of an allegedly fraudulent sale: (1) exhaust the
properties of the debtor through levying by attachment and execution upon all the
property of the debtor, except such as are exempt by law from execution; (2) exercise
all the rights and actions of the debtor, save those personal to him (accion
subrogatoria); and (3) seek rescission of the contracts executed by the debtor in fraud
of their rights (accion pauliana).
Salvador and Ligaya Adorable. vs. Court of Appeals, G.R. No. 119466, November 25,
1999
Art. 1178 - Rights acquired in virtue of an obligation are transmissible
Leonila J. Licuanan vs. Ricardo D. Diaz, G.R. No. 59805, July 21, 1989
Art. 1179 - Demandable obligations
Payroll deduction is merely a convenient mode of payment and not the sole source
of payment for the loans. The creditor never agreed that the loans will be paid only
through salary deductions. Neither did it agree that if the debtor ceases to be an
employee of HSBC, her obligation to pay the loans will be suspended. The creditor
can immediately demand payment of the loans at anytime because the obligation to
pay has no period.
HSBC-Staff Retirement Plan vs. Sps. Bienvenido and Editha Broqueza, G.R. No.
178610, November 17, 2010
Art. 1181 - Conditional obligations
Ryuichi Yamamoto vs. Nishino Leather Industries, Inc., et al., G.R. No. 150283, April
16, 2008
Tomas K. Chua vs. Court of Appeals, G.R. No. 119255, April 9, 2003
Direct Funders Holdings Corp. vs. Judge Celso D. Laviña, G.R. No. 141851, January
16, 2002
Felix L. Gonzales vs. Thomas and Paula Cruz, G.R. No. 131784, September 16, 1999
Emilio A. Salazar vs. Court of Appeals, G.R. No. 118203, July 5, 1996
Under Art. 1181 of the Civil Code, on conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those already acquired, shall depend
upon the happening of the event which constitutes the condition.
Central Philippine University vs. Court of Appeals, G.R. No. 112127, July 17, 1995
In conditional obligations, the acquisition of rights, as well as the extinguishment

or loss of those already acquired, shall depend upon the happening of the event which
constitutes the condition.
16, 2008
Art. 1182 - Conditional obligation void when fulfillment of condition depends

upon sole will of debtor
Virginia A. Perez vs. Court of Appeals, G.R. No. 112329, January 28, 2000
Virgilio R. Romero vs. Court of Appeals, G.R. No. 107207, November 23, 1995
Security Bank & Trust Company vs. Court of Appeals, G.R. No. 117009, October 11,
1995
Art. 1183 - Impossible conditions, those contrary to good customs or public

policy and those prohibited by law shall annul the obligation which depends
upon them
GSIS vs. Court of Appeals, et al., G.R. Nos. 124208 & 124275, January 28, 2008
Severina San Miguel vs. Court of Appeals, G.R. No. 136054, September 5, 2001
Art. 1184 - Condition that some event happen at a determinate time
Sps. Orlando and Mercedes Rayos vs. Court of Appeals, G.R. No. 135528, July 14,
2004
Art. 1186 - Condition deemed fulfilled when obligor voluntarily prevents its
fulfillment
Raymundo S. De Leon vs. Benita T. Ong, G.R. No. 170405, February 2, 2010
International Corporate Bank, Inc. vs. Court of Appeals, G.R. No. 94461, September 30,
1992
This provision refers to the constructive fulfillment of a suspensive condition,

whose application calls for two requisites, namely: (a) the intent of the obligor to
prevent the fulfillment of the condition, and (b) the actual prevention of the
fulfillment. Mere intention of the debtor to prevent the happening of the condition, or
to place ineffective obstacles to its compliance, without actually preventing the
fulfillment, is insufficient.
Under Article 1186 of the Civil Code, "[t]he condition shall be deemed fulfilled
when the obligor voluntarily prevents its fulfillment." Applying this to the
appointment process in the civil service, unless the appointee himself is negligent in
following up the submission of his appointment to the CSC for approval, he should
not be prejudiced by any willful act done in bad faith by the appointing authority to
prevent the timely submission of his appointment to the CSC. While it may be argued
that the submission of respondent's appointment to the CSC within 30 days was one of
the conditions for the approval of respondent's appointment, however, deliberately and
with bad faith, the officials responsible for the submission of respondent's
appointment to the CSC prevented the fulfillment of the said condition. Thus, the said
condition should be deemed fulfilled.
Arlin B. Obiasca vs. Jeane O. Basallote, G.R. No. 176707, February 17, 2010
Art. 1187 - Effects of a conditional obligation to give
Mactan-Cebu International Airport Authority, et al. vs. Bernardo L. Lozada, Sr., et al.,
G.R. No. 176625, February 25, 2010
Mactan-Cebu International Airport Authority vs. Benjamin Tudtud, et al., G.R. No.
174012, November 14, 2008
2008
Art. 1189 - Rules in case of the improvement, loss or deterioration of the thing
during the pendency of the condition to give
G.R. No. 176625, February 25, 2010
Art. 1190 - When the conditions have for their purpose the extinguishment of
an obligation to give, the parties, upon the fulfillment of said conditions, shall
return to each other what they have received
G.R. No. 176625, February 25, 2010
Mactan-Cebu International Airport Authority vs. Benjamin Tudtud, et al., G.R. No.
174012, November 14, 2008
Art. 1191 - Rescission
Jaime L. Yaneza vs. Court of Appeals, et al., G.R. No. 149322, November 28, 2008
Sps. Cornelio Joel and Maria Orden, et al. vs. Sps. Arturo and Melodia Aurea, et al.,
G.R. No. 172733, August 20, 2008
Sta. Lucia Realty and Dev't. Inc. vs. Romeo Uyecio, et al., G.R. No. 176217, August 13,
2008
Unlad Resources Dev't. Corp., et al. vs. Renato P. Dragon, et al., G.R. No. 149338, July
28, 2008
Heirs of Antonio Bernabe vs. Court of Appeals, et al., G.R. No. 154402, July 21, 2008
Congregation of the Religious of the Virgin Mary, et al. vs. Emilio Q. Orola, et al., G.R.
No. 169790, April 30, 2008
Sps. Lino and Guia Francisco vs. Deac Construction, Inc., et al., G.R. No. 171312,
February 4, 2008
2004
Adelfa S. Rivera vs. Fidela Del Rosario, G.R. No. 144934, January 15, 2004
Albert R. Padilla vs. Floresco Paredes, G.R. No. 124874, March 17, 2000
Alexander G. Asuncion vs. Eduardo B. Evangelista, G.R. No. 133491, October 13, 1999
Jaime G. Ong vs. Court of Appeals, G.R. No. 97347, July 6, 1999
Ricardo Cheng vs. Ramon B. Genato, G.R. No. 129760, December 29, 1998
Aniceta Ramirez vs. Court of Appeals, G.R. No. 96412, August 24, 1998
Odyssey Park, Inc. vs. Court of Appeals, G.R. No. 107992, October 8, 1997
Adoracion C. Pangilinan vs. Court of Appeals, G.R. No. 83588, September 29, 1997
Manuel A. Torres, Jr. vs. Court of Appeals, G.R. No. 120138, September 5, 1997
Hi-Precision Steel Center, Inc. vs. Lim Kim Steel Builders, Inc., G.R. No. 110434,
December 13, 1993
Vermen Realty Development Corporation vs. Court of Appeals, G.R. No. 101762, July
6, 1993
Massive Construction vs. Intermediate Appellate Court, G.R. No. 70310-11, June 1,
1993
Lawrence Bowe vs. Court of Appeals, G.R. No. 95771, March 19, 1993
Visayan Sawmill vs. Court of Appeals, G.R. No. 83851, March 3, 1993
Vergel de Dios vs. Court of Appeals, G.R. No. 80491, August 12, 1992
Alfredo E. Gimenez vs. Court of Appeals, G.R. No. 92171, March 13, 1991
Albert Nabus vs. Court of Appeals, G.R. No. 91670, February 7, 1991
Saturnino Songcuan vs. Intermediate Appellate Court, G.R. No. 75096, October 23,
1990
Bacolod-Murcia Milling Co., Inc. vs. Court of Appeals, G.R. No. 81100-01, February 7,
1990
Ricardo Cruz vs. Intermediate Appellate Court, G.R. No. 72313, December 29, 1989
Delta Motor Corporation vs. Eduarda Samson Genuino, G.R. No. 55665, February 8,
1989
Felipe C. Roque vs. Nicanor Lapuz, G.R. No. L-32811, March 31, 1980
The rescission referred to in this article (Article 1191 of the Civil Code), more
appropriately referred to as resolution is on the breach of faith by the defendant which
is violative of the reciprocity between the parties. The right to rescind, however, may
be waived, expressly or impliedly. While the right to rescind reciprocal obligations is
implied, that is, that such right need not be expressly provided in the contract,
nevertheless the contracting parties may waive the same.
The right of rescission is implied in every reciprocal obligation.
The right of rescission is implied in every reciprocal obligation where one party
fails to perform what is incumbent upon him while the other is willing and ready to
comply.
Uniwide Holdings, Inc. vs. Jandecs Transportation Co., Inc., G.R. No. 168522,
December 19, 2007
A party may rescind a contract even if a provision to that effect is not in the
agreement.
Even if a provision providing for a right to rescind is not in the agreement, a party
may still rescind a contract should one obligor fail to comply with its obligations.
Phil. Leisure and Retirement Authority vs. Court of Appeals, et al., G.R. No. 156303,
December 19, 2007
A complaint making out a case for rescission or resolution cures the petitioner's
shortcoming in filing an action to resolve or cancel the deed of sale.
Non-payment of the purchase price of property constitutes a very good reason to

rescind a sale for it violates the very essence of the contract of sale. While it is
preferable that respondent instead should have filed an action to resolve or cancel the
deed as the right to do so must be invoked judicially, this shortcoming was cured
when the complaint itself made out a case for rescission or resolution for failure of
petitioner to comply with his obligation to pay the full purchase price.
Alexander Macasaet vs. R. Transport Corp., G.R. No. 172446, October 10, 2007
Mutual restitution construed
Mutual restitution is required in cases involving rescission under Article 1191. This
means bringing the parties back to their original status prior to the inception of the
contract
Unlad Resources Development Corporation vs. Renato P. Dragon, G.R. No. 149338,
July 28, 2008
Oliverio Laperal vs. Solid Homes, Inc., G.R. No. 130913, June 21, 2005
The power to rescind obligations is implied in reciprocal obligations.
Article 1191 of the Civil Code provides that the power to rescind obligations is
implied in reciprocal ones, in case one of the obligors should not comply with what is
incumbent upon him. The rescission referred to in this article, more appropriately
referred to as resolution, is not predicated on injury to economic interests on the part
of the party plaintiff, but of breach of faith by the defendant which is violative of the
reciprocity between the parties.
Sps. Lino and Guia Francisco vs. Deac Construction, Inc., G.R. No. 171312, February
4, 2008
Articles 1191 of the Civil Code does not thus apply to a contract to sell since there
can be no rescission of an obligation that is still non-existent, the suspensive condition
not having occurred. In other words, the breach contemplated in Article 1191 is the
obligor's failure to comply with an obligation already extant, like a contract of sale,
not a failure of a condition to render binding that obligation.
Sta. Lucia Realty and Development, Inc. vs. Romeo Uyecio, et al., G.R. No. 176217,
August 13, 2008
The remedy of rescission is predicated on a breach of faith by the other party that
violates the reciprocity between them. Such a remedy does not apply to contracts to
sell.
Sps. Cornelio Joel I. Orden, et al. vs. Sps. Arturo and Melodia Aurea, et al., G.R. No.
172733, August 20, 2008
149338, July 28, 2008
Heirs of Antonio F. Bernabe vs. Court of Appeals, et al., G.R. No. 154402, July 21, 2008
No. 169790, April 30, 2008
Province of Cebu vs. Heirs of Rufina Morales, G.R. No. 170115, February 19, 2008
The equivalent of Article 1191 in the old code actually uses the term "resolution"
rather than the present "rescission". The calibrated meanings of these terms are
distinct. "Rescission" is a subsidiary action based on injury to the plaintiff's economic
interests as described in Articles 1380 and 1381. "Resolution", the action referred to
in Article 1191, on the other hand, is based on the defendant's breach of faith, a
violation of the reciprocity between the parties. As an action based on the binding
force of a written contract, therefore, rescission (resolution) under Article 1191
prescribes in 10 years. Ten years is the period of prescription of actions based on a
written contract under Article 1144.
Heirs of Sofia Quirong vs. DBP, G.R. No. 173441, December 3, 2009
Article 1191 gives the injured party an option to choose between, first, fulfillment
of the contract and, second, its rescission. An action to enforce a written contract
(fulfillment) is definitely an "action upon a written contract", which prescribes in 10
years (Article 1144). It will not be logical to make the remedy of fulfillment prescribe
in 10 years while the alternative remedy of rescission (or resolution) is made to
prescribe after only four years as provided in Article 1389 when the injury from which
the two kinds of actions derive is the same.
The remedy of rescission under Article 1191 cannot apply to mere contracts to sell.
In a contract to sell, title remains with the vendor and does not pass on to the vendee
until the purchase price is paid in full. Thus, in a contract to sell, the payment of the
purchase price is a positive suspensive condition. Failure to pay the price agreed upon
is not a mere breach, casual or serious, but a situation that prevents the obligation of
the vendor to convey title from acquiring an obligatory force. This is entirely different
from the situation in a contract of sale, where non-payment of the price is a negative
resolutory condition. The effects in law are not identical. In a contract of sale, the
vendor has lost ownership of the thing sold and cannot recover it, unless the contract
of sale is rescinded and set aside. In a contract to sell, however, the vendor remains
the owner for as long as the vendee has not complied fully with the condition of
paying the purchase price. If the vendor should eject the vendee for failure to meet the
condition precedent, he is enforcing the contract and not rescinding it. . . . Article
1592 speaks of non-payment of the purchase price as a resolutory condition. It does
not apply to a contract to sell. As to Article 1191, it is subordinated to the provisions
of Article 1592 when applied to sales of immovable property. Neither provision is
applicable [to a contract to sell].
Delfin Tan vs. Erlinda C. Benolirao, et al., G.R. No. 153820, October 16, 2009
G.G. Sportswear Mfg. Corp. vs. World Class Properties, Inc., G.R. No. 182720, March
2, 2010
Sps. Jose and Carmen Tongson vs. Emergency Pawnshop Bula, Inc., et al., G.R. No.
167874, January 15, 2010
The remedy of "rescission" is not confined to the rescissible contracts enumerated

under Article 1381. Article 1191 of the Civil Code gives the injured party in
reciprocal obligations, such as what contracts are about, the option to choose between
fulfillment and "rescission". Arturo M. Tolentino, a well-known authority in civil law,
is quick to note, however, that the equivalent of Article 1191 in the old code actually
uses the term "resolution" rather than the present "rescission". The calibrated
meanings of these terms are distinct. "Rescission" is a subsidiary action based on
injury to the plaintiff's economic interests as described in Articles 1380 and 1381.
"Resolution", the action referred to in Article 1191, on the other hand, is based on the
defendant's breach of faith, a violation of the reciprocity between the parties. As an
action based on the binding force of a written contract, therefore, rescission
(resolution) under Article 1191 prescribes in 10 years. Ten years is the period of
prescription of actions based on a written contract under Article 1144
Article 1191 gives the injured party an option to choose between, first, fulfillment
of the contract and, second, its rescission. An action to enforce a written contract
(fulfillment) is definitely an "action upon a written contract", which prescribes in 10
years (Article 1144). It will not be logical to make the remedy of fulfillment prescribe
in 10 years while the alternative remedy of rescission (or resolution) is made to
prescribe after only four years as provided in Article 1389 when the injury from which
the two kinds of actions derive is the same.
The right to rescind a contract arises once the other party defaults in the
performance of his obligation. In determining when default occurs, Art. 1191 should
be taken in conjunction with Art. 1169 of the same law.
Solar Harvest, Inc. vs. Davao Corrugated Carton Corp., G.R. No. 176868, July 26, 2010
In reciprocal obligations, as in a contract of sale, the general rule is that the

fulfillment of the parties' respective obligations should be simultaneous. Hence, no
demand is generally necessary because, once a party fulfills his obligation and the
other party does not fulfill his, the latter automatically incurs in delay. But when
different dates for performance of the obligations are fixed, the default for each
obligation must be determined by the rules given in the first paragraph of the present
article, that is, the other party would incur in delay only from the moment the other
party demands fulfillment of the former's obligation. Thus, even in reciprocal
obligations, if the period for the fulfillment of the obligation is fixed, demand upon
the obligee is still necessary before the obligor can be considered in default and before
a cause of action for rescission will accrue.
Solar Harvest, Inc. vs. Davao Corrugated Carton Corp., G.R. No. 176868, July 26, 2010
In cases involving rescission under the said provision [Art. 1191], mutual
restitution is required. The parties should be brought back to their original position
prior to the inception of the contract. "Accordingly, when a decree of rescission is
handed down, it is the duty of the court to require both parties to surrender that which
they have respectively received and to place each other as far as practicable in [their]
original situation."
Goldloop Properties, Inc. vs. GSIS, G.R. No. 171076, August 1, 2012
Rescission does not merely terminate the contract and release the parties from
further obligations to each other, but abrogates the contract from its inception and
restores the parties to their original positions as if no contract has been made.
Consequently, mutual restitution, which entails the return of the benefits that each
party may have received as a result of the contract, is thus required. To be sure, it has
been settled that the effects of rescission as provided for in Article 1385 of the Code
are equally applicable to cases under Article 1191. . .
Gotesco Properties, Inc., et al. vs. Sps. Eugenio and Angelina Fajardo, G.R. No.
201167, February 27, 2013
Articles 1191 and 1592 of the Civil Code are applicable to contracts of sale, while
R.A. No. 6552 applies to contracts to sell.
Manuel Uy & Sons, Inc. v. Valbueco, Inc., G.R. No. 179594, September 11, 2013, citing
Ramos v. Heruela 509 Phil. 658, 665 (2005)
Art. 1192 - When both parties have committed a breach of the obligation
2004
Oscar A. Jacinto vs. Rogelio Kaparaz, G.R. No. 81158, May 22, 1992
Art. 1197 - Court may fix period of obligation
Alfredo S. Lim vs. Felipe G. Pacquing, G.R. No. 115044, January 27, 1995
Pacific Banking Corporation vs. Court of Appeals, G.R. No. L-45656, May 5, 1989
Jose N. Mayuga vs. Court of Appeals, G.R. No. L-46953, September 28, 1987
Art. 1207 - Solidary obligation
Lilibeth Sunga-Chan, et al. vs. Court of Appeals, et al., G.R. No. 164401, June 25, 2008
Purita Alipio vs. Court of Appeals, G.R. No. 134100, September 29, 2000
Smith, Bell & Co., Inc. vs. Court of Appeals, G.R. No. 110668, February 6, 1997
A solidary obligation is one in which each of the debtors is liable for the entire
obligation, and each of the creditors is entitled to demand the satisfaction of the whole
obligation from any or all of the debtors. On the other hand, a joint obligation is one
in which each debtors is liable only for a proportionate part of the debt, and the
creditor is entitled to demand only a proportionate part of the credit from each debtor.
The well-entrenched rule is that solidary obligations cannot be inferred lightly. They
must be positively and clearly expressed. A liability is solidary "only when the
obligation expressly so states, when the law so provides or when the nature of the
obligation so requires." Article 1207 of the Civil Code explains the nature of solidary
obligations in this wise.
PH Credit Corporation vs. Court of Appeals and Carlos M. Farrales, G.R. No. 109648,
November 22, 2001
Art. 1216 - Creditor may proceed against any one of solidary debtors or some
or all of them simultaneously
Estrella Palmares vs. Court of Appeals, G.R. No. 126490, March 31, 1998
Republic of the Phils. vs. Sandiganbayan, G.R. No. 92594, March 4, 1994
Bicol Savings & Loan Association vs. Jaime Guinhawa, G.R. No. 62415, August 20,
1990
Traders Royal Bank vs. Court of Appeals, G.R. No. 78412, September 26, 1989
A surety contract is made principally for the benefit of the creditor-obligee and this
is ensured by the solidary nature of the sureties' undertaking.
Intra-Strata Assurance Corp., et al. vs. Republic of the Phil., G.R. No. 156571, July 9,
2008
Art. 1217 - Payment by solidary debtor/s
Jaguar Security and Investigation Agency vs. Rodolfo A. Sales, et al., G.R. No. 162420,
April 22, 2008
Lapanday Agricultural Devt. Corp. vs. Court of Appeals, G.R. No. 112139, January 31,
2000
Spartan Security vs. NLRC, G.R. No. 90693, September 3, 1992
Art. 1218 - Payment by solidary debtor/s
A solidary debtor is not entitled to reimbursement for payments made after the
obligation has prescribed or became illegal.
Article 2047 of the Civil Code specifically calls for the application of the
provisions on solidary obligations to suretyship contracts. In particular, Article 1217
of the Civil Code recognizes the right of reimbursement from a co-debtor (the
principal co-debtor, in case of suretyship) in favor of the one who paid (i.e., the
surety). In contrast, Article 1218 of the Civil Code is definitive on when
reimbursement is unavailing, such that only those payments made after the obligation
has prescribed or became illegal shall not entitle a solidary debtor to reimbursement.
Diamond Builders Conglomeration, et al. vs. Country Bankers Insurance Corp., G.R.
No. 171820, December 13, 2007
Art. 1226 - Obligations with a penal clause
Antonio Tan vs. Court of Appeals, G.R. No. 116285, October 19, 2001
Social Security System vs. Moonwalk Development & Housing Corporation, G.R. No.
73345, April 7, 1993
General Rule
As a general rule, in obligations with a penal clause, the penalty shall substitute the
indemnity for damages and the payment of interests in case of non-compliance. This is
specifically provided for in Article 1226, par. 1, New Civil Code. In such case, proof
of actual damages suffered by the creditor is not necessary in order that the penalty
may be demanded (Article 1228, New Civil Code). However, there are exceptions to
the rule that the penalty shall substitute the indemnity for damages and the payment of
interests in case of non-compliance with the principal obligation. They are first, when
there is a stipulation to the contrary; second, when the obligor is sued for refusal to
pay the agreed penalty; and third, when the obligor is guilty of fraud (Article 1226,
par. 1, New Civil Code). It is evident that in all said cases, the purpose of the penalty
is to punish the obligor. Therefore, the obligee can recover from the obligor not only
the penalty but also the damages resulting from the non-fulfillment or defective
performance of the principal obligation.
Country Bankers Insurance Corporation vs. Court of Appeals, G.R. No. 85161,
September 9, 1991
When both the penalty and the interest can be collected by creditor.
Where the contract stipulates the rate of interest and the amount of penalty to be
paid in case of failure to pay the obligation within a given period, both the penalty and
the interest can be collected by the creditor.
Edmerito Ang Gobonseng, et al. vs. Unibancard Corp., G.R. No. 160026, December 10,
2007
Instances when courts may equitably reduce a stipulated penalty in contracts.
As a general rule, courts are not at liberty to ignore the freedoms of the parties to
agree on such terms and conditions as they see fit as long as they are not contrary to
law, morals, good customs, public order or public policy. Nevertheless, courts may
equitably reduce a stipulated penalty in the contracts in two instances: (1) if the
principal obligation has been partly or irregularly complied with; and (2) even if there
has been no compliance if the penalty is iniquitous or unconscionable in accordance
with Article 1229 of the Civil Code.
Erminda F. Florentino vs. Supervalue, Inc., G.R. No. 172384, September 12, 2007
Art. 1228 - Proof of actual damages
Country Bankers Insurance Corporation vs. Court of Appeals, G.R. No. 85161,
September 9, 1991
Art. 1229 - The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor, or
iniquitous or unconscionable
Land Bank of the Phils. vs. Yolanda G. David, G.R. No. 176344, August 22, 2008
Bank of the Philippine Islands vs. Sps. Reynaldo and Victoria Royeca, G.R. No.
176664, July 21, 2008
Henry Dela Rama Co vs. Admiral United Savings Bank, G.R. No. 154740, April 16,
2008
Restituta M. Imperial vs. Alex A. Jaucian, G.R. No. 149004, April 14, 2004
Manila International Airport Authority vs. ALA Industries Corp., G.R. No. 147349,
February 13, 2004
Antonio Lo vs. Court of Appeals, G.R. No. 141434, September 23, 2003
Asiatrust Development Bank vs. Concepts Trading Corp., G.R. No. 130759, June 20,
2003
State Investment House vs. Court of Appeals, G.R. No. 112590, July 12, 2001
Choithram Jethmal Ramnani vs. Court of Appeals, G.R. No. 85494, July 10, 2001
Development Bank of the Phil. vs. Court of Appeals, G.R. No. 137557, October 30,
2000
Domel Trading Corp. vs. Court of Appeals, G.R. Nos. 84813 & 84848, September 22,
1999
Whether a penalty is reasonable or iniquitous can be partly subjective and partly

objective.
The question of whether a penalty is reasonable or iniquitous can be partly

subjective and partly objective. Its resolution would depend on such factor as, but not
necessarily confined to, the type, extent and purpose of the penalty, the nature of the
obligation, the mode of breach and its consequences, the supervening realities, the
standing and relationship of the parties, and the like, the application of which, by and
large, is addressed to the sound discretion of the court.
Tolomeo Ligutan vs. Court of Appeals, G.R. No. 138677, February 12, 2002
Whether a penalty is reasonable or iniquitous is addressed to the sound discretion

of the courts
The courts shall reduce equitably liquidated damages, whether intended as an

indemnity or a penalty, if they are iniquitous or unconscionable. The question of
whether a penalty is reasonable or iniquitous is addressed to the sound discretion of
the courts. To be considered in fixing the amount of penalty are factors such as — but
not limited to — the type, extent and purpose of the penalty; the nature of the
obligation; the mode of the breach and its consequences; the supervening realities; the
standing and relationship of the parties; and the like.
Sps. Rodelio and Alicia Poltan vs. BPI Family Savings Bank, et al., G.R. No. 164307,
March 5, 2007
Being iniquitous and unconscionable, the compounded interest rate of 5% per

month is void.
The compounded interest rate of 5% per month is iniquitous and unconscionable.

Being a void stipulation, it is deemed inexistent from the beginning. The debt is to be
considered without the stipulation of the iniquitous and unconscionable interest rate.
Accordingly, the legal interest of 12% per annum must be imposed in lieu of the
excessive interest stipulated in the agreement.
Sps. Isagani and Diosdada Castro vs. Angelina de Leon Tan, et al., G.R. No. 168940,
November 24, 2009
The promissory notes likewise required the payment of a penalty charge of 3% per
month or 36% per annum. We find such rates unconscionable. This Court has
recognized a penalty clause as an accessory obligation which the parties attach to a
principal obligation for the purpose of ensuring the performance thereof by imposing
on the debtor a special prestation (generally consisting of the payment of a sum of
money) in case the obligation is not fulfilled or is irregularly or inadequately fulfilled.
However, a penalty charge of 3% per month is unconscionable; hence, we reduce it to
1% per month or 12% per annum, pursuant to Article 1229 of the Civil Code.
Pentacapital Investment Corp. vs. Makilito B. Mahinay, G.R. Nos. 171736 & 181482,
July 5, 2010
Based on jurisprudence, the Court finds that the 24% per annum interest rate,
provided for in the subject mortgage contracts for a loan of P225,000.00, may not be
considered unconscionable. Moreover, considering that the mortgage agreement was
freely entered into by both parties, the same is the law between them and they are
bound to comply with the provisions contained therein. . . The Court also upholds the
validity of the 6% per annum penalty charge. . . . petitioners bound themselves to pay
the stipulated penalty charge of 6% per annum "of the principal amount of loan as
penalty for inexcusable neglect to pay any amount of t[he] loan when due." Since
petitioners failed to present evidence that their failure to perform their obligation was
due to either force majeure or the acts of respondent Bank or to any justifiable or
excusable cause, they are obliged to pay the penalty charge as agreed upon.
Sps. Nelson and Myra Villanueva vs. Court of Appeals, et al., G.R. No. 163433, August
22, 2011
Stipulated interest rates are illegal if they are unconscionable and courts are
allowed to temper interest rates when necessary. In exercising this vested power to
determine what is iniquitous and unconscionable, the Court must consider the
circumstances of each case. What may be iniquitous and unconscionable in one case,
may be just in another. We cannot uphold the petitioner's invocation of our ruling in
DBP v. Court of Appeals, wherein the interest rate imposed was reduced to 10% per
annum. The overriding circumstance prompting such pronouncement was the regular
payments made by the borrower. Evidently, such fact is wanting in the case at bar,
hence, the petitioner cannot demand for a similar interest rate.
RGM Industries, Inc. vs. United Pacific Capital Corp., G.R. No. 194781, June 27, 2012
We deem it proper to further reduce the penalty charge decreed by the CA from
2% per month to 1% per month or 12% per annum in view of the following factors:
(1) respondent has already received P7,504,522.27 in penalty charges, and (2) the loan
extended to respondent was a short-term credit facility.
citing Bank of the Philippine Islands, Inc. vs. Yu, G.R. No. 184122, January 20, 2010
Art. 1231 - How obligations are extinguished
Rafael Arsenio S. Dizon vs. Court of Tax Appeals, et al., G.R. No. 140944, April 30,
2008
February 13, 2004
Emilia M. Uraca vs. Court of Appeals, G.R. No. 115158, September 5, 1997
CKH Industrial and Dev. Corp. vs. Court of Appeals, G.R. No. 111890, May 7, 1997
Jose Baritua, et al. vs. Court of Appeals, G.R. No. 82233, March 22, 1990
Article 1231 of the New Civil Code on extinguishment of obligations does not
specifically mention unilateral termination as a mode of extinguishment of obligation
but, according to Tolentino, "there are other causes of extinguishment of obligations
which are not expressly provided for in this chapter" (Tolentino, Civil Code of the
Phils., Vol. IV, 1986 ed., p. 273). He further said: But in some contracts either
because of its indeterminate duration or because of the nature of the prestation which
is its object, one of the parties may free himself from the contractual tie by his own
will. (Unilateral extinguishment) . . .
Ace-Agro Development Corp. vs. Court of Appeals, et al., G.R. No. 119729, January 21,
1997
Art. 1234 - When obligation has been substantially performed in good faith
Diesel Construction Co., Inc. vs. UPSI Property Holdings, Inc., G.R. No. 145885 &
154937, March 24, 2008
Pilar Pagsibigan vs. Court of Appeals, G.R. No. 90169, April 7, 1993
It is well to note that Article 1234 applies only when an obligor admits breaching
the contract after honestly and faithfully performing all the material elements thereof
except for some technical aspects that cause no serious harm to the obligee. . . . The
provision refers to an omission or deviation that is slight, or technical and
unimportant, and does not affect the real purpose of the contract.
Tolentino explains the character of the obligor's breach under Article 1234 in the
following manner, to wit:
In order that there may be substantial performance of an obligation,

there must have been an attempt in good faith to perform, without any willful
or intentional departure therefrom. The deviation from the obligation must be
slight, and the omission or defect must be technical and unimportant, and
must not pervade the whole or be so material that the object which the parties
intended to accomplish in a particular manner is not attained. The
non-performance of a material part of a contract will prevent the performance
from amounting to a substantial compliance.
The party claiming substantial performance must show that he has

attempted in good faith to perform his contract, but has through oversight,
misunderstanding or any excusable neglect failed to completely perform in
certain negligible respects, for which the other party may be adequately
indemnified by an allowance and deduction from the contract price or by an
award of damages. But a party who knowingly and wilfully fails to perform
his contract in any respect, or omits to perform a material part of it, cannot be
permitted, under the protection of this rule, to compel the other party, and the
trend of the more recent decisions is to hold that the percentage of omitted or
irregular performance may in and of itself be sufficient to show that there had
not been a substantial performance.
By reason of the inconsequential nature of the breach or omission, the law deems
the performance as substantial, making it the obligee's duty to pay. The compulsion of
payment is predicated on the substantial benefit derived by the obligee from the partial
performance. Although compelled to pay, the obligee is nonetheless entitled to an
allowance for the sum required to remedy omissions or defects and to complete the
work agreed upon.
Conversely, the principle of substantial performance is inappropriate when the

incomplete performance constitutes a material breach of the contract. A contractual
breach is material if it will adversely affect the nature of the obligation that the obligor
promised to deliver, the benefits that the obligee expects to receive after full
compliance, and the extent that the non-performance defeated the purposes of the
contract. Accordingly, for the principle embodied in Article 1234 to apply, the failure
of Joaquin and Suarez to comply with their commitment should not defeat the ultimate
purpose of the contract.
To secure a DBP-guaranteed foreign loan did not solely depend on the diligence or
the sole will of the respondents because it required the action and discretion of third
persons — an able and willing foreign financial institution to provide the needed
funds, and the DBP Board of Governors to guarantee the loan. Such third persons
could not be legally compelled to act in a manner favorable to IHC. There is no
question that when the fulfillment of a condition is dependent partly on the will of one
of the contracting parties, or of the obligor, and partly on chance, hazard or the will of
a third person, the obligation is mixed. The existing rule in a mixed conditional
obligation is that when the condition was not fulfilled but the obligor did all in his
power to comply with the obligation, the condition should be deemed satisfied.
Art. 1235 - When obligee accepts incomplete or irregular performance
Empire East Holdings, Inc. vs. Capitol Industrial Construction Groups, Inc., G.R. No.
168074, September 26, 2008
Hanjin Heavy Industries and Construction Co., Ltd. vs. Dynamic Planners and
Construction Corp., G.R. Nos. 169408 & 170144, April 30, 2008
Pilar Pagsibigan vs. Court of Appeals, G.R. No. 90169, April 7, 1993
(An) obligation is deemed fully complied with when an obligee accepts the
performance thereof knowing its incompleteness or irregularity, and without
expressing any protest or objection. An obligee is deemed to have waived strict
compliance by an obligor with an obligation when the following elements are present:
(1) an intentional acceptance of the defective or incomplete performance; (2) with
actual knowledge of the incompleteness or defect; and (3) under circumstances that
would indicate an intention to consider the performance as complete and renounce any
claim arising from the defect.
Construction Corp., G.R. Nos. 169408 and 170144, April 30, 2008
Art. 1236 - Creditor not bound to accept payment or performance by third

person
UPSUMCO vs. Court of Appeals, et al., G.R. No. 126890, March 9, 2010
Chonney Lim vs. Court of Appeals, G.R. No. 104819-20, July 20, 1998
The creditor is not bound to accept payment or performance by a third person who
has no interest in the fulfillment of the obligation, unless there is a stipulation to the
contrary.
Herman C. Crystal, et al. vs. BPI, G.R. No. 172428, November 28, 2008
Art. 1236 second par.

Dominion Insurance Corp. vs. Court of Appeals, G.R. No. 129919, February 6, 2002
Art. 1238 - Payment made by a third person who does not intend to be
reimbursed by the debtor is deemed to be a donation
Empire East Land Holdings Inc. vs. Capitol Industrial Construction Groups, Inc., G.R.
No. 168074, September 26, 2008
Art. 1240 - Payment shall be made to person in whose favor obligation has
been constituted
Francisco Culaba vs. Court of Appeals, G.R. No. 125862, April 15, 2004
Philippine Airlines, Inc. vs. Court of Appeals, G.R. No. 49188, January 30, 1990
Art. 1245 - Dation in payment
Fort Bonifacio Dev't. Corp. vs. Yllas Lending Corp., et al., G.R. No. 158997, October 6,
2008
DBP vs. Court of Appeals, et al., G.R. No. 118342 & 118367, January 5, 1998
In dacion en pago, property is alienated to the creditor in satisfaction of a debt in

money. It is "the delivery and transmission of ownership of a thing by the debtor to
the creditor as an accepted equivalent of the performance of the obligation." It
"extinguishes the obligation to the extent of the value of the thing delivered, either as
agreed upon by the parties or as may be proved, unless the parties by agreement,
express or implied, or by their silence, consider the thing as equivalent to the
obligation, in which case the obligation is totally extinguished."
Phil. Lawin Bus vs. Court of Appeals, G.R. No. 130972, January 23, 2002
Art. 1245 - shall be governed by the law of sales

Phil. Lawin Bus vs. Court of Appeals, G.R. No. 130972, January 23, 2002
Article 1245 of the Civil Code defines dacion en pago, or dation in payment, as the
alienation of property to the creditor in satisfaction of a debt in money.
Fort Bonifacio Development Corp. vs. Yllas Lending Corp., et al., G.R. No. 158997,
October 6, 2008
Dacion en pago as a mode of extinguishing an existing obligation partakes of the

nature of sale whereby property is alienated to the creditor in satisfaction of a debt in
money.
Dao Heng Bank, Inc. vs. Sps. Reynaldo and Lilia Laigo, G.R. No. 173856, November
20, 2008
Dacion en pago, or dation in payment, is the alienation of property to the creditor in
satisfaction of a debt in money. Dacion en pago is governed by the law on sales.
October 6, 2008
Sps. Rafael and Zenaida Estanislao vs. East West Banking Corp., G.R. No. 178537,
February 11, 2008
[A] dacion en pago is in essence a form of sale, which basically involves a

disposition of a property. … Dacion en pago, according to Manresa, is the
transmission of the ownership of a thing by the debtor to the creditor as an accepted
equivalent of the performance of obligation. In dacion en pago, as a special mode of
payment, the debtor offers another thing to the creditor who accepts it as equivalent of
payment of an outstanding debt. The undertaking really partakes in one sense of the
nature of sale, that is, the creditor is really buying the thing or property of the debtor,
payment for which is to be charged against the debtor's debt. As such, the essential
elements of a contract of sale, namely, consent, object certain, and cause or
consideration must be present. In its modern concept, what actually takes place in
dacion en pago is an objective novation of the obligation where the thing offered as an
accepted equivalent of the performance of an obligation is considered as the object of
the contract of sale, while the debt is considered as the purchase price. In any case,
common consent is an essential prerequisite, be it sale or innovation to have the effect
of totally extinguishing the debt or obligation.
Strategic Alliance Development Corp. vs. Radstock Securities Limited, et al., G.R. Nos.
178158 & 180428, December 4, 2009
Art. 1248 - The creditor cannot be compelled partially to receive the

prestations in which the obligation consists
Under Article 1248 of the Civil Code, the creditor cannot be compelled to accept
partial payments from the debtor, unless there is an express stipulation to that effect.
More so, respondents cannot substitute or apply as their payment the value of the
chicks and by-products they expect to derive because it is necessary that all the debts
be for the same kind, generally of a monetary character. Needless to say, there was no
valid application of payment in this case.
ASJ Corporation, et al. vs. Sps. Efren & Maura Evangelista, G.R. No. 158086, February
14, 2008
Art. 1249 - Payment of debts in money shall be made in currency stipulated
Towne & City Dev't. Corp. vs. Court of Appeals, G.R. No. 135043, July 14, 2004
Alfaro Fortunado vs. Court of Appeals, G.R. No. 78556, April 25, 1991
Philippine Airlines, Inc. vs. Court of Appeals, G.R. No. 49188, January 30, 1990
Servicewide Specialists, Incorporated vs. Intermediate Appellate Court, G.R. No.

74553, June 8, 1989
Vicenta P. Tolentino vs. Court of Appeals, G.R. No. 50405-06, August 5, 1981
Art. 1249, second par.
Payment is defined as the delivery of money. Yet, because a check is not money
and only substitutes for money, the delivery of a check does not operate as payment
and does not discharge the obligation under a judgment. The delivery of a bill of
exchange only produces the fact of payment when the bill has been encashed.
Donnina C. Halley vs. Printwell, Inc., G.R. No. 157549, May 30, 2011
While it is true that the delivery of a check produces the effect of payment only
when it is cashed, pursuant to Art. 1249 of the Civil Code, the rule is otherwise if the
debtor is prejudiced by the creditor's unreasonable delay in presentment. The
acceptance of a cheek implies an undertaking of due diligence in presenting it for
payment, and if he from whom it is received sustains loss by want of such diligence, it
will be held to operate as actual payment of the debt or obligation for which it was
given. It has, likewise, been held that if no presentment is made at all, the drawer
cannot be held liable irrespective of loss or injury unless presentment is otherwise
excused. This is in harmony with Article 1249 of the Civil Code under which payment
by way of check or other negotiable instrument is conditioned on its being cashed,
except when through the fault of the creditor, the instrument is impaired. The payee of
a check would be a creditor under this provision and if its non-payment is caused by
his negligence, payment will be deemed effected and the obligation for which the
check was given as conditional payment will be discharged.
Cebu International Finance Corp. vs. Court of Appeals, G.R. No. 123031, October 12,
1999
Norberto Tibajia, Jr., et al. vs. Court of Appeals, et al., G.R. No. 100290, June 4, 1993
Myron C. Papa vs. A.U. Valencia, et al., G.R. No. 105188, January 23, 1998
Art. 1250 - Extraordinary inflation or deflation
Sps. Fermin and Maria Paz Nepomuceno vs. City of Surigao, et al., G.R. No. 146091,
July 28, 2008
Eufemia Almeda, et al. vs. Bathala Marketing Industries, Inc., G.R. No. 150806,
January 28, 2008
Equitable PCI Bank, et al. vs. Ng Sheung Ngor, et al., G.R. No. 171545, December 19,
2007
Simplicio A. Palanca vs. Court of Appeals, G.R. No. 106685, December 2, 1994
Philippine Manpower Services, Inc., vs. National Labor Relations Commission, G.R. No.
98450, July 21, 1993
Extraordinary inflation and extraordinary deflation: definition and requisites.
Extraordinary inflation exists when there is an unusual decrease in the purchasing

power of currency (that is, beyond the common fluctuation in the value of currency)
and such decrease could not be reasonably foreseen or was manifestly beyond the
contemplation of the parties at the time of the obligation. Extraordinary deflation, on
the other hand, involves an inverse situation. For extraordinary inflation (or deflation)
to affect an obligation, the following requisites must be proven: 1. that there was an
official declaration of extraordinary inflation or deflation from the Bangko Sentral ng
Pilipinas (BSP); 2. that the obligation was contractual in nature; and 3. that the parties
expressly agreed to consider the effects of the extraordinary inflation or deflation.
2007
Inflation has been defined as the sharp increase of money or credit or both without
a corresponding increase in business transaction. There is inflation when there is an
increase in the volume of money and credit relative to available goods resulting in a
substantial and continuing rise in the general price level.
Citibank, et al. vs. Modesta R. Sabeniano, G.R. No. 156132 February 6, 2007
Among the maxims of equity are (1) he who seeks equity must do equity, and (2)
he who comes into equity must come with clean hands. The latter is a frequently
stated maxim which is also expressed in the principle that he who has done inequity
shall not have equity.
Citibank, et al. vs. Modesta R. Sabeniano, G.R. No. 156132 February 6, 2007
We have held extraordinary inflation to exist when there is a decrease or increase in

the purchasing power of the Philippine currency which is unusual or beyond the
common fluctuation in the value of said currency, and such increase or decrease could
not have been reasonably foreseen or was manifestly beyond the contemplation of the
parties at the time of the establishment of the obligation.
Lucia R. Singson vs. Caltex (Phils.), G.R. No. 137798, October 4, 2000
Art. 1253 - Payment shall be applied to interest first
Douglas F. Anama vs. Court of Appeals, G.R. No. 128609, January 29, 2004
Caltex (Philippines), Inc. vs. Intermediate Appellate Court, G.R. No. 72703, November
13, 1992
The charging of interests for loans is considered the very core of a bank's
existence.
To hold that bank debtors should not pay interest on their loans would be anathema
to the nature of any bank's business. The charging of interest for loans forms a very
essential and fundamental element of the banking business. In fact, it may be
considered to be the very core of the banking's existence or being.
Sps. Virgilio and Digna Calina vs. DBP, G.R. No. 159748, July 31, 2007
Art. 1255 - Debtor may cede or assign his property to his creditors in payment
of his debts
DBP vs. Court of Appeals, G.R. Nos. 118342 & 118367, January 5, 1998
Art. 1256, par. 2 - Consignation
Subhash C. Pasricha, et al. vs. Don Luis Dison Realty, Inc., G.R. No. 136409, March
14, 2008
Teofilo Ercillo vs. Court of Appeals, G.R. No. 55361, December 10, 1990
In order that consignation may be effective, the debtor must show that: (1) there
was a debt due; (2) the consignation of the obligation had been made because the
creditor to whom tender of payment was made refused to accept it, or because s/he
was absent or incapacitated, or because several persons claimed to be entitled to
receive the amount due or because the title to the obligation had been lost; (3)
previous notice of the consignation had been given to the person interested in the
performance of the obligation; (4) the amount due was placed at the disposal of the
court; and (5) after the consignation had been made, the person interested was notified
of the action.
B.E. San Diego vs. Rosario T. Alzul, G.R. No. 169501 June 8, 2007
Where the creditor unjustly refuses to accept payment, the debtor desirous of being
released from his obligation must comply with two (2) conditions: (a) tender of
payment; and (b) consignation of the sum due. Tender of payment must be
accompanied or followed by consignation in order that the effects of payment may be
produced. Thus, in Llamas v. Abaya, the Supreme Court stressed that a written tender
of payment alone, without consignation in court of the sum due, does not suspend the
accruing of regular or monetary interest.
State Investment House vs. Court of Appeals, G.R. No. 90676, June 19, 1991
Art. 1257 - Consignation must be announced
Art. 1258 - How consignation is made
Jespajo Realty Corporation vs. Court of Appeals, G.R. No. 113626, September 27,
2002
Art. 1260, par. 2 - Debtor may withdraw sum or thing deposited
Teddy G. Pabugais vs. Dave P. Sahijwani, G.R. No. 156846, February 23, 2004
Art. 1262 - Loss of thing due
Imelda Syjuco vs. Court of Appeals, G.R. No. 80800, April 12, 1989
Art. 1266 - When the prestation becomes legally or physically impossible

without the fault of the obligor
Art. 1267 - Obligor may be released when service has become so difficult as to
be manifestly beyond the contemplation of the parties
Jesusito D. Legaspi vs. Republic of the Philippines, G.R. No. 160653, July 23, 2008
PNCC vs. Court of Appeals, G.R. No. 116896, May 5, 1997
Taking into consideration the rationale behind this provision, the term "service"
should be understood as referring to the "performance" of the obligation. x x x
Furthermore, a bare reading of this article reveals that it is not a requirement
thereunder that the contract be for future service with future unusual change.
According to Senator Arturo M. Tolentino, Article 1267 states in our law the doctrine
of unforeseen events. This is said to be based on the discredited theory of rebus sic
stantibus in public international law; under this theory, the parties stipulate in the light
of certain prevailing conditions, and once these conditions cease to exist the contract
also ceases to exist. Considering practical needs and the demands of equity and good
faith, the disappearance of the basis of a contract gives rise to a right to relief in favor
of the party prejudiced.
Naga Telephone Co. vs. Court of Appeals, G.R. No. 107112, February 24, 1994
Art. 1270 - Condonation
Condonation or remission of debt is an act of liberality, by virtue of which, without

receiving any equivalent, the creditor renounces the enforcement of the obligation,
which is extinguished in its entirety or in that part or aspect of the same to which the
remission refers. It is an essential characteristic of remission that it be gratuitous, that
there is no equivalent received for the benefit given; once such equivalent exists, the
nature of the act changes. It may become dation in payment when the creditor receives
a thing different from that stipulated; or novation, when the object or principal
conditions of the obligation should be changed; or compromise, when the matter
renounced is in litigation or dispute and in exchange of some concession which the
creditor receives.
Rafael Arsenio S. Dizon vs. Court of Tax Appeals, et al., G.R. No. 140944, April 30,
2008
Art. 1270, par. 2
Victor Yam & Yek Sun Lent vs. Court of Appeals, G.R. No. 104726, February 11, 1999
Art. 1271 - Delivery of private document evidencing credit implies

renunciation
The presumption created by the Art. 1271 of the Civil Code is not conclusive but
merely prima facie. If there be no evidence to the contrary, the presumption stands.
Conversely, the presumption loses its legal efficacy in the face of proof or evidence to
the contrary. In the case before us, we find sufficient justification to overthrow the
presumption of payment generated by the delivery of the documents evidencing
petitioners indebtedness. It may not be amiss to add that Article 1271 of the Civil
Code raises a presumption, not of payment, but of the renunciation of the credit where
more convincing evidence would be required than what normally would be called for
to prove payment. The rationale for allowing the presumption of renunciation in the
delivery of a private instrument is that, unlike that of a public instrument, there could
be just one copy of the evidence of credit. Where several originals are made out of a
private document, the intendment of the law would thus be to refer to the delivery
only of the original original rather than to the original duplicate of which the debtor
would normally retain a copy. It would thus be absurd if Article 1271 were to be
applied differently.
Trans-Pacific Industrial Supplies, Inc. vs. Court of Appeals, G.R. No. 109172, August
19, 1994
Art. 1278 - Compensation
Special Steel Products, Inc. vs. Lutgardo Villareal, G.R. No. 143304, July 8, 2004
E.G.V. Realty Dev't. Corp. vs. Court of Appeals, G.R. No. 120236, July 20, 1999
Philippine National Bank vs. Gloria G. Vda. De Ong Acero, G.R. No. L-69255, February
27, 1987
Mindanao Portland Cement Corp. vs. Court of Appeals, G.R. No. L-62169, February 28,
1983
In the case of The International Corporate Bank, Inc. v. The Intermediate Appellate
Court, et al. (G.R. No. L-69560, June 30, 1988), we reiterated the requisites of legal
compensation. We said: "Compensation shall take place when two persons, in their
own right, are creditors and debtors of each other. (Art. 1278, Civil Code). 'When all
the requisites mentioned in Art. 1279 of the Civil Code are present, compensation
takes effect by operation of law, even without the consent or knowledge of the
debtors.' (Art. 1290, Civil Code). Art. 1279 of the Civil Code requires among others,
that in order that legal compensation shall take place, 'the two debts be due' and 'they
be liquidated and demandable.' Compensation is not proper where the claim of the
person asserting the set-off against the other is not clear nor liquidated; compensation
cannot extend to unliquidated, disputed claim arising from breach of contract.
(Compania General de Tabacos v. French and Unson, 39 Phil. 34; Lorenzo &
Martinez v. Herrero, 17 Phil. 29).
Pioneer Insurance & Surety Corp. vs. Court of Appeals, G.R. No. 76509, December 15,
1989
Regardless of the type of compensation exercised (that is, whether legal or

conventional), the irreducible minimum requirement is that the parties must be
creditor and debtor of each other.
UPSUMCO vs. Court of Appeals, et al., G.R. No. 126890, March 9, 2010
Art. 1279 - Requisites of compensation
South African Airways vs. Commissioner of Internal Revenue, G.R. No. 180356,
February 16, 2010
April 14, 2008
Special Steel Products, Inc. vs. Lutgardo Villareal, G.R. No. 143304, July 8, 2004
Republic of the Phil. vs. Jose L. Africa, G.R. No. 128606, December 4, 2000
CKH Industrial and Dev. Corp. vs. Court of Appeals, G.R. No. 111890, May 7, 1997
Caltex Philippines, Inc. vs. Commission on Audit, G.R. No. 92585, May 8, 1992
Pioneer Insurance & Surety Corp. vs. Court of Appeals, G.R. No. 76509, December 15,
1989
Philippine National Bank vs. Gloria G. vda. De Ong Acero, G.R. No. L-69255, February
27, 1987
1983
When all the requisites mentioned in Art. 1279 of the Civil Code are present,
compensation takes effect by operation of law, even without the consent or knowledge
of the creditors and debtors. Article 1279 requires, among others, that in order that
legal compensation shall take place, "the two debts be due" and "they be liquidated
and demandable." Compensation is not proper where the claim of the person asserting
the set-off against the other is not clear nor liquidated; compensation cannot extend to
unliquidated, disputed claim existing from breach of contract.
Silahis Marketing Corp. vs. Intermediate Appellate Court, G.R. No. 74027, December 7,
1989
In order for compensation to be valid, the five requisites mentioned in the

abovequoted Article 1279 should be present. . . . IITC acted as a principal in the
purchase of treasury bills from PDB and in the subsequent sale to COEC of the COEC
T-Bills. Thus, COEC and IITC are principal creditors of each other in relation to the
sale of the COEC T-Bills and IITC T-Bills, respectively. . . . It should be noted that
the second requisite only requires that the thing be of the same kind and quality. The
COEC T-Bills and the IITC T-Bills are both government securities which, while
having differing interest rates and dates of maturity, have each been assigned a certain
face value to determine their monetary equivalent. . . . Both debts are due and
demandable because both remain unsatisfied, despite payment made by IITC for the
IITC T-Bills and by COEC for the COEC T-Bills. Moreover, COEC readily admits
that it has an outstanding balance in favor of IITC. Conversely, IITC has been found
by the lower courts to be liable, as principal seller, for the delivery of the COEC
T-Bills. The debts are also liquidated because their existence and amount are
determined. Finally, there exists no retention or controversy over the COEC T-Bills
and the IITC T-Bills.
Insular Investment and Trust Corp. vs. Capital One Equities Corp., et al., G.R. No.
183308, April 25, 2012
Art. 1282 - Parties may agree upon the compensation of debts which are not
yet due.
Agreements for compensation of debts or any obligations when the parties are
mutually creditors and debtors are allowed under Art. 1282 of the Civil Code even
though not all the legal requisites for legal compensation are present. Voluntary or
conventional compensation is not limited to obligations which are not yet due. The
only requirements for conventional compensation are (1) that each of the parties can
fully dispose of the credit he seeks to compensate, and (2) that they agree to the
extinguishment of their mutual credits.
Traders Royal Bank vs. Sps. Norberto and Milagros Castañares, G.R. No. 172020,
December 6, 2010
Art. 1285 - When creditor assigns credit to a third person, debtor cannot set
up compensation unless right to do so has been reserved
It is a firmly settled doctrine that the rights of an assignee are not any greater than
the rights of the assignor, since the assignee is merely substituted in the place of the
assignor and that the assignee acquires his rights subject to the equities — i.e., the
defenses — which the debtor could have set up against the original assignor before
notice of the assignment was given to the debtor.
Raul Sesbreño vs. Court of Appeals, G.R. No. 89252, May 24, 1993
Art. 1290 - When requisites are present, compensation takes place by
operation of law
1983
Art. 1291 - Novation; how obligations may be modified
Candida Mariano vs. People of the Phil., G.R. No. 80161, December 14, 1992
Novation is the extinguishment of an obligation by the substitution or change of the

obligation by a subsequent one which extinguishes or modifies the first, either by
changing the object or principal conditions, or by substituting another in place of the
debtor, or by subrogating a third person in the rights of the creditor.
Novation may be extinctive or modificatory. It is extinctive when an old obligation

is terminated by the creation of a new one that takes the place of the former; it is
merely modificatory when the old obligation subsists to the extent that it remains
compatible with the amendatory agreement.
For novation to take place, the following requisites must concur: (1) There must be
a previous valid obligation. (2) The parties concerned must agree to a new contract.
(3) The old contract must be extinguished. (4) There must be a valid new contract.
Novation may either be express, when the new obligation declares in unequivocal
terms that the old obligation is extinguished; or implied, when the new obligation is
on every point incompatible with the old one. The test of incompatibility is whether
the two obligations can stand together, each one with its own independent existence.
Adriatico Consortium, Inc., et al. vs. Land Bank of the Phil., G.R. No. 187838,
December 23, 2009
As a general rule, no form of words or writing is necessary to give effect to a

novation. Nevertheless, where either or both parties involved are juridical entities,
proof that the second contract was executed by persons with the proper authority to
bind their respective principals is necessary.
Violeta Tudtud Banate, et al. vs. Phil. Countryside Rural Bank (Liloan, Cebu), Inc., et al.,
G.R. No. 163825, July 13, 2010
Novation is the extinguishment of an obligation by the substitution or change of the

obligation by a subsequent one that terminates the first, either by (a) changing the
object or principal conditions; or (b) substituting the person of the debtor; or (c)
subrogating a third person in the rights of the creditor. In order that an obligation may
be extinguished by another that substitutes the former, it is imperative that the
extinguishment be so declared in unequivocal terms, or that the old and the new
obligations be on every point incompatible with each other. Obviously, in case of only
slight modifications, the old obligation still prevails.
Degaños v. People, G.R. No. 162826, October 14, 2013
In novation, a subsequent obligation extinguishes a previous one through

substitution either by changing the object or principal conditions, by substituting
another in place of the debtor, or by subrogating a third person into the rights of the
creditor. Novation requires (a) the existence of a previous valid obligation; (b) the
agreement of all parties to the new contract; (c) the extinguishment of the old contract;
and (d) the validity of the new one.
Philippine Reclamation Authority v. Romago, Inc., G.R. Nos. 174665 & 175221,
September 18, 2013
Art. 1291 (2) - Novation by substituting person of the debtor
Candida Mariano vs. People of the Phil., G.R. No. 80161, December 14, 1992
Art. 1292 - Novation must be declared in unequivocal terms
Sally Bueno vs. Land Bank of the Phils., G.R. No. 174711, September 17, 2008
Security Bank and Trust Company vs. Rodolfo M. Cuenca, G.R. No. 138544, October
3, 2000
Emiliano Rillo vs. Court of Appeals, G.R. No. 125347, June 19, 1997
Tropical Homes, Inc. vs. Court of Appeals, G.R. No. 111858, May 14, 1997
Candida Mariano vs. People of the Phils., G.R. No. 80161, December 14, 1992
Antonio Garcia, Jr. vs. Court of Appeals, G.R. No. 80201, November 20, 1990
Socorro vda. De Mondragon vs. Intermediate Appellate Court, G.R. No. 71889, April 17,
1990
Novation extinguishes an obligation by (1) changing its object or principal

conditions; (2) substituting the person of the debtor; and (3) subrogating a third person
in the rights of the creditor. Article 1292 of the Civil Code clearly provides that in
order that an obligation may be extinguished by another which substitutes the same, it
should be declared in unequivocal terms, or that the old and new obligations be on
every point incompatible with each other. Novation may either be extinctive or
modificatory. Novation is extinctive when an old obligation is terminated by the
creation of a new obligation that takes the place of the former. Novation is merely
modificatory when the old obligation subsists to the extent it remains compatible with
the amendatory agreement.
Republic Glass Corp. vs. Lawrence C. Qua, G.R. No. 144413, July 30, 2004
It has often been said that the minds that agree to contract can agree to novate. And
the agreement or consent to novate may well be inferred from the acts of a creditor,
since volition may as well be expressed by deeds as by words.
St. James College of Parañaque, et al. vs. Equitable PCI Bank, G.R. No. 179441,
August 9, 2010
Novation is one of the modes of extinguishment of obligations; 21 it is a single

juridical act with a diptych function. The substitution or change of the obligation by a
subsequent one extinguishes the first, resulting in the creation of a new obligation in
lieu of the old. It is not a complete obliteration of the obligor-obligee relationship, but
operates as a relative extinction of the original obligation.
Article 1292 of the Civil Code . . . contemplates two kinds of novation: express or
implied. The extinguishment of the old obligation by the new one is a necessary
element of novation, which may be effected either expressly or impliedly. In order for
novation to take place, the concurrence of the following requisites is indispensable:
(1) There must be a previous valid obligation;
(2) There must be an agreement of the parties concerned to a new contract;
(3) There must be the extinguishment of the old contract; and
(4) There must be the validity of the new contract.
Novation is never presumed, and the animus novandi, whether totally or partially,
must appear by express agreement of the parties, or by their acts that are too clear and
unmistakable. The contracting parties must incontrovertibly disclose that their object
in executing the new contract is to extinguish the old one. Upon the other hand, no
specific form is required for an implied novation, and all that is prescribed by law
would be an incompatibility between the two contracts. Nonetheless, both kinds of
novation must still be clearly proven.
PNB vs. Lilian S. Soriano, G.R. No. 164051, October 3, 2012
The settled rule is that novation is never presumed, but must be clearly and
unequivocally shown. In order for a new agreement to supersede the old one, the
parties to a contract must expressly agree that they are abrogating their old contract in
favor of a new one. Thus, the mere substitution of debtors will not result in novation,
and the fact that the creditor accepts payments from a third person, who has assumed
the obligation, will result merely in the addition of debtors and not novation, and the
creditor may enforce the obligation against both debtors. If there is no agreement as to
solidarity, the first and new debtors are considered obligated jointly.
September 11, 2013
In the civil law setting, novatio is literally construed as to make new. So it is deeply
rooted in the Roman Law jurisprudence, the principle — novatio non praesumitur —
that novation is never presumed. At bottom, for novation to be a jural reality, its
animus must be ever present, debitum pro debito — basically extinguishing the old
obligation for the new one.
September 11, 2013, citing Garcia v. Llamas, 462 Phil. 779, 788 (2003)
Novation is never presumed, and the animus novandi, whether totally or partially,
must appear by express agreement of the parties, or by their acts that are too clear and
unequivocal to be mistaken.
The extinguishment of the old obligation by the new one is necessary element of
novation which may be effected either expressly or impliedly. The term "expressly"
means that the contracting parties incontrovertibly disclose that their object in
executing the new contract is to extinguish the old one. Upon the other hand, no
specific form is required for an implied novation, and all that is prescribed by law
would be an incompatibility between the two contracts. While there is really no hard
and fast rule to determine what might constitute to be a sufficient change that can
bring about novation, the touchstone for contrarity, however would be an
irreconcilable incompatibility between the old and the new obligations.
There are two ways which could indicate, in fine, the presence of novation and
thereby produce the effect of extinguishing an obligation by another which substitutes
the same. The first is when novation has been explicitly stated and declared in
unequivocal terms. The second is when the old and the new obligations are
incompatible on every point. The test of incompatibility is whether or not the two
obligations can stand together, each one having its independent existence. If they
cannot, they are incompatible and the latter obligation novates the first. Corollarily,
changes that breed incompatibility must be essential in nature and not merely
accidental. The incompatibility must take place in any of the essential elements of the
obligation, such as its object, cause or principal conditions thereof; otherwise, the
change would be merely modificatory in nature and insufficient to extinguish the
original obligation.
Degaños v. People, G.R. No. 162826, October 14, 2013, citing Quinto v. People, G.R.
No. 126712, April 14, 1999
Art. 1293 - Novation which consists in substituting a new debtor in the place of
the original one, may be made even without the knowledge or against the will of
the latter, but not without the consent of the creditor
Novation, in its broad concept, may either be extinctive or modificatory. It is

extinctive when an old obligation is terminated by the creation of a new obligation
that takes the place of the former; it is merely modificatory when the old obligation
subsists to the extent it remains compatible with the amendatory agreement. An
extinctive novation results either by changing the object or principal conditions
(objective or real), or by substituting the person of the debtor or subrogating a third
person in the rights of the creditor (subjective or personal). Under this mode, novation
would have dual functions — one to extinguish an existing obligation, the other to
substitute a new one in its place — requiring a conflux of four essential requisites: (1)
a previous valid obligation; (2) an agreement of all parties concerned to a new
contract; (3) the extinguishment of the old obligation; and (4) the birth of a valid new
obligation.
LBP vs. Alfredo Ong, G.R. No. 190755, November 24, 2010, citing Sps. Benjamin and
Agrifina Lim v. M.B. Finance Corp., G.R. No. 164300, November 29, 2006
Chester Babst vs. Court of Appeals, G.R. No. 99398, January 26, 2001
Vicente B. Chuidian vs. Sandiganbayan, G.R. No. 139941, January 19, 2001
Elsa B. Reyes vs. Court of Appeals, G.R. No. 120817, November 4, 1996
Novation is a mode of extinguishing an obligation by changing its objects or

principal obligations, by substituting a new debtor in place of the old one, or by
subrogating a third person to the rights of the creditor. It is "the substitution of a new
contract, debt, or obligation for an existing one between the same or different parties."
. . . Thus, in order to change the person of the debtor, the former debtor must be
expressly released from the obligation, and the third person or new debtor must
assume the former's place in the contractual relation. Article 1293 speaks of
substitution of the debtor, which may either be in the form of expromision or
delegacion, as seems to be the case here. In both cases, the old debtor must be
released from the obligation, otherwise, there is no valid novation.
September 11, 2013
In general, there are two modes of substituting the person of the debtor: (1)
expromision and (2) delegacion. In expromision, the initiative for the change does not
come from — and may even be made without the knowledge of — the debtor, since it
consists of a third person's assumption of the obligation. As such, it logically requires
the consent of the third person and the creditor. In delegacion, the debtor offers, and
the creditor accepts, a third person who consents to the substitution and assumes the
obligation; thus, the consent of these three persons are necessary. Both modes of
substitution by the debtor require the consent of the creditor.
September 11, 2013
Romeo C. Garcia vs. Dionisio V. Llamas, G.R. No. 154127, December 8, 2003
Art. 1300 - Subrogation
On the other hand, subrogation, by definition, is the transfer of all the rights of the
creditor to a third person, who substitutes him in all his rights. It may either be legal or
conventional. Legal subrogation is that which takes place without agreement but by
operation of law because of certain acts. Conventional subrogation is that which takes
place by agreement of parties.
Edgar Leodonio vs. Capitol Dev't. Corp., G.R. No. 149040, July 4, 2007
Under our Code, however, conventional subrogation is not identical to assignment

of credit. In the former, the debtor's consent is necessary; in the latter, it is not
required. Subrogation extinguishes an obligation and gives rise to a new one;
assignment refers to the same right which passes from one person to another. The
nullity of an old obligation may be cured by subrogation, such that the new obligation
will be perfectly valid; but the nullity of an obligation is not remedied by the
assignment of the creditor's right to another.
Such distinction [distinction between an assignment of credit and a conventional

subrogation] is crucial because it would determine the necessity of the debtor's
consent. In an assignment of credit, the consent of the debtor is not necessary in order
that the assignment may fully produce the legal effects. What the law requires in an
assignment of credit is not the consent of the debtor, but merely notice to him as the
assignment takes effect only from the time he has knowledge thereof. A creditor may,
therefore, validly assign his credit and its accessories without the debtor's consent. On
the other hand, conventional subrogation requires an agreement among the parties
concerned — the original creditor, the debtor, and the new creditor. It is a new
contractual relation based on the mutual agreement among all the necessary parties.
Art. 1301 - Conventional subrogation
Art. 1302 - Legal subrogation
Phil. National Bank/National Investment Dev..Corp. vs. Court of Appeals, G.R. No.
128661, August 8, 2000
Chemphil Export & Import Corporation vs. Court of Appeals, G.R. Nos. 112438-39,
December 12, 1995
Art. 1305 - Contracts
167874, January 15, 2010
MMDA vs. Jancom Environmental Corp., G.R. No. 147465, January 30, 2002
Florencia T. Huibonhoa vs. Court of Appeals, G.R. Nos. 95897 & 102604, December
14, 1999
National Grains Authority vs. Intermediate Appellate Court, G.R. No. 74470, March 8,
1989
Article 1305 of the Civil Code defines a contract as a meeting of minds between
two persons whereby one binds himself, with respect to the other, to give something
or to render some service. A contract undergoes three distinct stages — (1)
preparation or negotiation; (2) perfection; and (3) consummation. Negotiation begins
from the time the prospective contracting parties manifest their interest in the contract
and ends at the moment of agreement of the parties. The perfection or birth of the
contract takes place when the parties agree upon the essential elements of the contract.
The last stage is the consummation of the contract wherein the parties fulfill or
perform the terms agreed upon in the contract, culminating in the extinguishment
thereof. Article 1315 of the Civil Code, on the other hand, provides that a contract is
perfected by mere consent, which is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the contract.
Gateway Electronics Corp. vs. Land Bank, G.R. No. 155217 & 156393, July 30, 2003
Robern Development Corp., et al. vs. People's Landless Association, G.R. No. 173622,
March 11, 2013
A contract is a meeting of the minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some service.
Titan-Ikeda Construction and Development Corp. vs. Primetown Property Group, Inc.,
G.R. No. 158768, February 12, 2008
Every contract has the following essential elements: (i) consent, (ii) object certain
and (iii) cause. Consent has been defined as the concurrence of the wills of the
contracting parties with respect to the object and cause which shall constitute the
contract. In general, contracts undergo three distinct stages, to wit: negotiation,
perfection or birth, and consummation. Negotiation begins from the time the
prospective contracting parties manifest their interest in the contract and ends at the
moment of their agreement. Perfection or birth of the contract takes place when the
parties agree upon the essential elements of the contract, i.e., consent, object and
price. Consummation occurs when the parties fulfill or perform the terms agreed
upon in the contract, culminating in the extinguishment thereof. The birth or the
perfection of the contract, which is the crux of the present controversy, refers to that
moment in the life of a contract when there is finally a concurrence of the wills of the
contracting parties with respect to the object and the cause of the contract.
Sargasso Construction & Development Corp. vs. Philippine Ports Authority, G.R. No.
170530, July 5, 2010
Contracts are obligatory no matter what their forms may be, whenever the essential
requisites for their validity are present. In determining whether a document is an
affidavit or a contract, the Court looks beyond the title of the document, since the
denomination or title given by the parties in their document is not conclusive of the
nature of its contents. In the construction or interpretation of an instrument, the
intention of the parties is primordial and is to be pursued. If the terms of the document
are clear and leave no doubt on the intention of the contracting parties, the literal
meaning of its stipulations shall control. If the words appear to be contrary to the
parties' evident intention, the latter shall prevail over the former.
Rodolfo G. Cruz, et al. vs. Delfin Gruspe, G.R. No. 191431, March 13, 2013
Art. 1306 - The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy
PNCC Skyway Traffic Mgt. and Security Division Workers Organization vs. PNCC
Skyway Corp., G.R. No. 171231, February 17, 2010
California Bus Lines, Inc. vs. Court of Appeals, et al., G.R. No. 145408, August 20,
2008
Intra-Strata Assurance Corp., et al. vs. Republic of the Phils., G.R. No. 156571, July 9,
2008
Lubeca Marine Management (HK) Ltd., et al. vs. Mateo Alcantara, G.R. No. 147628,
March 14, 2008
Manila International Airport Authority, et al. vs. Olongapo Maintenance Services, Inc., et
al., G.R. No. 146184-85, 161117 & 167827, January 31, 2008
Republic of the Phil. vs. Jerry V. David, G.R. No. 155634, August 16, 2004
Phil. Communications Satellite Corp. vs. Globe Telecom, G.R. Nos. 147324 & 147334,
May 25, 2004
National Sugar Trading and/or The Sugar Regulatory Administration vs. PNB, G.R. No.
151218, January 28, 2003
Natalia P. Bustamante vs. Rodito F. Rosel, G.R. No. 126800, November 29, 1999
June 30, 1997
CA Agro-Industrial Devt. Corp. vs. Court of Appeals, G.R. No. 90027, March 3, 1993
19, 1991
Pakistan International Airlines vs. Blas F. Ople, G.R. No. 61594, September 28, 1990
Ireneo Leal vs. Intermediate Appellate Court, G.R. No. L-65425, November 5, 1987
True, it is a fundamental rule that contracts, once perfected, bind both contracting
parties and a contract freely entered into should be respected since a contract is the
law between the parties. However, it must be understood that contracts are not the
only source of law that govern the rights and obligations between parties. More
specifically, no contractual stipulation may contradict law, morals, good customs,
public order or public policy. The principle of party autonomy in contracts is not an
absolute principle. The rule in Article 1306 of our Civil Code is that the contracting
parties may establish such stipulations as they may deem convenient provided they are
not contrary to law, morals, good customs, public order or public policy. Thus,
counter-balancing the principle of autonomy of contracting parties is the equally
general rule that provisions of applicable laws, especially provisions relating to
matters affected with public policy, are deemed written into the contract. Put a little
differently, the governing principle is that parties may not contract away applicable
provisions of law, especially peremptory provisions dealing with matters heavily
impressed with public interest.
PSALM Corp. vs. Pozzolanic Phil., Inc., G.R. No. 183789, August 24, 2011
In this jurisdiction, public bidding is the established procedure in the grant of

government contracts. The award of public contracts through public bidding is a
matter of public policy.
Public policy has been defined as that principle under which freedom of contract or
private dealing is restricted for the good of the community. Under the principles
relating to the doctrine of public policy, as applied to the law of contracts, courts of
justice will not recognize or uphold a transaction when its object, operation, or
tendency is calculated to be prejudicial to the public welfare, to sound morality or to
civic honesty.
Consistent with the principle that public auction in the conferment of government
contract involves public policy, Congress enacted various laws governing the
procedure in the conduct of public bidding and prescribing policies and guidelines
therefor. With respect to the disposal of government assets and property, of particular
application in this case are Circular Nos. 86-264 and 89-296 of the Commission on
Audit, dated 16 October 1986 and 27 January 1989, respectively. Both circulars
provide that the divestment or disposal of government property shall be undertaken
primarily through public auction.
PSALM Corp. vs. Pozzolanic Phil., Inc., G.R. No. 183789, August 24, 2011
Unless the stipulations in a contract are contrary to law, morals, good customs,
public order or public policy, the same are binding as between the parties.
Contracting parties may establish such stipulations, clauses, terms and conditions
as they deem convenient, provided that these are not contrary to law, morals, good
customs, public order, or public policy.
Far East Bank and Trust Co., et al. vs. Trust Union Shipping Corp., et al., G.R. No.
154716, September 16, 2008
Lubeca Marine Management (HK) Ltd., et al. vs. Mateo Alcantara, G.R. No. 147628,
March 14, 2008
al., G.R. Nos. 146184-85, 161117 and 167827, January 31, 2008
The terms of a contract — both express and implied — cannot be withdrawn except
by mutual consent or agreement of the contracting parties.
Arco Metal Products, Co., Inc., et al. vs. Samahan ng mga Manggagawa sa Arco
Metal-NAFLU, G.R. No. 170734, May 14, 2008
Courts have no choice but to enforce contracts so long as they are not contrary to
law, morals, good customs or public policy.
A compromise agreement is a contract whereby the parties make reciprocal

concessions in order to resolve their differences thereby putting an end to litigation.
Such means of dispute settlement is an accepted, even desirable and encouraged,
practice in courts of law and administrative tribunals.
DMG Industries, Inc. vs. Phil. American Investments Corp., G.R. No. 174114, July 6,
2007
Article 1306 of the same Code also provides that the contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided these are not contrary to law, morals, good customs, public order
or public policy.
Art. 1308 - Principle of mutuality of contracts
al., G.R. No. 146184-85, 161117 & 167827, January 31, 2008
2007
New Sampaguita Builders Construction vs. Phil. National Bank, G.R. No. 148753, July
30, 2004
Jespajo Realty Corporation vs. Hon. Court of Appeals, G.R. No. 113626, September 27,
2002
Danilo D. Mendoza vs. Court of Appeals, G.R. No. 116710, June 25, 2001
Philippine National Bank vs. Court of Appeals, G.R. No. 107569, November 8, 1994
Philippine National Bank vs. Court of Appeals, G.R. No. 88880, April 30, 1991
Francisco Lao Lim vs. Court of Appeals, G.R. No. 87047, October 31, 1990
Article 1308 of the Civil Code expresses what is known in law as the principle of
mutuality of contracts. It provides that "the contract must bind both the contracting
parties; its validity or compliance cannot be left to the will of one of them." This
binding effect of a contract on both parties is based on the principle that the
obligations arising from contracts have the force of law between the contracting
parties, and there must be mutuality between them based essentially on their equality
under which it is repugnant to have one party bound by the contract while leaving the
other free therefrom. The ultimate purpose is to render void a contract containing a
condition which makes its fulfillment dependent solely upon the uncontrolled will of
one of the contracting parties. PLPE05
Allied Banking Corp. vs. Court of Appeals, et al., G.R. No. 124290, January 19, 1998
When an Escalation Clause is void for violating the principle of mutuality of

contracts.
Escalation clauses are not void per se. However, one "which grants the creditor an
unbridled right to adjust the interest independently and upwardly, completely
depriving the debtor of the right to assent to an important modification in the
agreement" is void. Clauses of that nature violate the principle of mutuality of
contracts. Article 1308 of the Civil Code holds that a contract must bind both
contracting parties; its validity or compliance cannot be left to the will of one of them.
For this reason, we have consistently held that a valid escalation clause provides: 1.
that the rate of interest will only be increased if the applicable maximum rate of
interest is increased by law or by the Monetary Board; and 2. that the stipulated rate of
interest will be reduced if the applicable maximum rate of interest is reduced by law
or by the Monetary Board (de-escalation clause).
2007
Principles on the binding effect of contracts.
The binding effect of any agreement between the parties to a contract is premised
on two settled principles: (1) that obligations arising from contracts have the force of
law between the contracting parties; and (2) that there must be mutuality between the
parties based on their essential equality to which is repugnant to have one party bound
by the contract leaving the other free therefrom. Any contract which appears to be
heavily weighed in favor of one of the parties so as to lead to an unconscionable result
is void. Any stipulation regarding the validity or compliance of the contract which is
left solely to the will of one of the parties is likewise invalid.
Reynaldo P. Floirendo vs. Metropolitan Bank and Trust Company, G.R. No. 148325,
September 3, 2007
The contract between the parties is the law between them; mutuality being an
essential characteristic of contracts giving rise to reciprocal obligations.
al., G.R. Nos. 146184-85, 161117 and 167827, January 31, 2008
Art. 1311 - Contracts take effect only between the parties, their assigns and
heirs
Herman C. Crystal, et al. vs. Bank of the Philippines, G.R. No. 172428, November 28,
2008
Edsa Shangri-la Hotel and Resort, Inc., et al. vs. BF Corp., G.R. Nos. 145842 &
145873, June 27, 2008
Sps. Nestor and Ma. Nona Borromeo vs. Court of Appeals, et al., G.R. No. 169846,
March 28, 2008
Association of International Shipping Lines, Inc. vs. Phil. Ports Authority, G.R. No.
157484, March 6, 2008
Joseph Chan, et al. Vs. Bonifacio S. Maceda, G.R. No. 142591, April 30, 2003
Andres Villalon vs. Court of Appeals, et al., G.R. No. 115734, February 23, 2000
Andres Villalon vs. Court of Appeals, G.R. No. 116996, December 2, 1999
William Uy vs. Court of Appeals, G.R. No. 120465, September 9, 1999
Lorenzo V. Lagandaon vs. Court of Appeals, G.R. No. 102526-31, May 21, 1998
Smith, Bell & Co., Inc. vs. Court of Appeals, G.R. No. 110668, February 6, 1997
Republic of the Phil. vs. Sandiganbayan, G.R. No. 92594, March 4, 1994
Capital Insurance & Surety Co., Inc. vs. Central Azucarera Del Danao, G.R. No.
L-30770, April 7, 1993
Earth Minerals Exploration, Inc. vs. Catalino Macaraig, Jr., G.R. No. 78569, February
11, 1991
Angelina J. Malabanan vs. Gaw Ching, G.R. No. 74938-39, January 17, 1990
It has been held that a third party who avails himself of a stipulation pour autrui
under a contract becomes a party to that contract. This is why under Article 1311, a
beneficiary of a stipulation pour autrui is required to communicate his acceptance to
the obligor before its revocation.
Heirs of Mario Pacres, et al. vs. Heirs of Cecilia Ygoña, et al., G.R. No. 174719, May 5,
2010
Lease contracts, by their nature, are not personal. The general rule, therefore, is
lease contracts survive the death of the parties and continue to bind the heirs except if
the contract states otherwise.
Inocencio v. Hospicio de San Jose, G.R. No. 201787, September 25, 2013
A lease contract is not essentially personal in character. Thus, the rights and
obligations therein are transmissible to the heirs. The general rule, therefore, is that
heirs are bound by contracts entered into by their predecessors-in-interest except when
the rights and obligations arising therefrom are not transmissible by (1) their nature,
(2) stipulation or (3) provision of law. In the subject Contract of Lease, not only were
there no stipulations prohibiting any transmission of rights, but its very terms and
conditions explicitly provided for the transmission of the rights of the lessor and of the
lessee to their respective heirs and successors. The contract is the law between the
parties. The death of a party does not excuse nonperformance of a contract, which
involves a property right, and the rights and obligations thereunder pass to the
successors or representatives of the deceased. Similarly, nonperformance is not
excused by the death of the party when the other party has a property interest in the
subject matter of the contract.
Inocencio v. Hospicio de San Jose, G.R. No. 201787, September 25, 2013, citing Sui
Man Hui Chan v. Court of Appeals, 68 Phil. 244 (2004)
There is no corresponding liability if there is no contract.
It is a well-known rule that a contractual obligation or liability, or an action

ex-contractu, must be founded upon a contract, oral or written, either express or
implied. If there is no contract, there is no corresponding liability and no cause of
action may arise therefrom.
A & C Minimart Corp. vs. Patricia S. Villareal, et al., G.R. No. 172268, October 10, 2007
Art. 1311, 1st par. last sentence

DKC Holdings Corp. vs. Court of Appeals, G.R. No. 118248, April 5, 2000
Art. 1311, 2nd par.
Under this provision of the Civil Code, the following requisites must be present in
order to have a stipulation pour autrui: (1) there must be a stipulation in favor of a
third person; (2) the stipulation must be a part, not the whole of the contract; (3) the
contracting parties must have clearly and deliberately conferred a favor upon a third
person, not a mere incidental benefit or interest; (4) the third person must have
communicated his acceptance to the obligor before its revocation; and (5) neither of
the contracting parties bears the legal representation or authorization of the third
party. PLPE05
Timoteo Baluyot vs. Court of Appeals, G.R. No. 122947, July 22, 1999
In sum, a consignee, although not a signatory to the contract of carriage between
the shipper and the carrier, becomes a party to the contract by reason of either a) the
relationship of agency between the consignee and the shipper/consignor; b) the
unequivocal acceptance of the bill of lading delivered to the consignee, with full
knowledge of its contents or c) availment of the stipulation pour autrui, i.e., when the
consignee, a third person, demands before the carrier the fulfillment of the stipulation
made by the consignor/shipper in the consignee's favor, specifically the delivery of the
goods/cargoes shipped.
MOF Co., Inc. vs. Shin Yang Brokerage Corp., G.R. No. 172822, December 18, 2009
Art. 1314 - Third person who induces another to violate his contract liable for
damages
U-Bix Corp. vs. Milliken & Company, et al., G.R. No. 173318, September 23, 2008
While it is true that a third person cannot possibly be sued for breach of contract
because only parties can breach contractual provisions, a contracting party may sue a
third person not for breach but for inducing another to commit such breach.
The elements of tort interference are: (1) existence of a valid contract; (2)
knowledge on the part of the third person of the existence of a contract; and (3)
interference of the third person is without legal justification.
It may be stated as a general rule that joint tort feasors are all the persons who
command, instigate, promote, encourage, advise, countenance, cooperate in, aid or
abet the commission of a tort, or who approve of it after it is done, if done for their
benefit. They are each liable as principals, to the same extent and in the same manner
as if they had performed the wrongful act themselves. …
Allan C. Go vs. Mortimer F. Cordero, G.R. No. 164703, May 4, 2010, citing Lafarge
Cement Philippines, Inc. vs. Continental Cement Corporation, G.R. No. 155173,
November 23, 2004
The rule is that the defendant found guilty of interference with contractual relations
cannot be held liable for more than the amount for which the party who was inducted
to break the contract can be held liable.
There was no tortious interference if the intrusion was impelled by purely

economic motives. . . :
Authorities debate on whether interference may be justified where the

defendant acts for the sole purpose of furthering his own financial or
economic interest. One view is that, as a general rule, justification for
interfering with the business relations of another exists where the actor's
motive is to benefit himself. Such justification does not exist where his sole
motive is to cause harm to the other. Added to this, some authorities believe
that it is not necessary that the interferer's interest outweighs that of the party
whose rights are invaded, and that an individual acts under an economic
interest that is substantial, not merely de minimis, such that wrongful and
malicious motives are negatived, for he acts in self-protection. Moreover,
justification for protecting one's financial position should not be made to
depend on a comparison of his economic interest in the subject matter with
that of others. It is sufficient if the impetus of his conduct lies in a proper
business interest rather than in wrongful motives.
Inocencio v. Hospicio de San Jose, G.R. No. 201787, September 25, 2013, citing So
Ping Bun v. Court of Appeals, 373 Phil. 532 (1999)
Art. 1315 - Contracts perfected by mere consent
Sps. Noe and Clarita Quiamco vs. Capital Insurance and Surety Co., Inc., G.R. No.
170852, September 12, 2008
Central Cement Corp. vs. Mines Adjudication Board, et al., G.R. No. 173562, January
22, 2008
City of Cebu vs. Sps. Apolonio and Blasa Dedamo, G.R. No. 142971, May 7, 2002
Antonia Torres vs. Court of Appeals, G.R. No. 134559, December 9, 1999
The law does not relieve a party from the effects of an unwise, foolish or disastrous
contract.
A party to a contract cannot deny the validity thereof after enjoying its benefits
without outrage to one's sense of justice and fairness. It is a long established doctrine
that the law does not relieve a party from the effects of an unwise, foolish or
disastrous contract, entered into with all the required formalities and with full
awareness of what she was doing. Courts have no power to relieve parties from
obligations voluntarily assumed, simply because their contracts turned out to be
disastrous or unwise investments.
Jocelyn M. Toledo vs. Marilou M. Hyden, G.R. No. 172139, December 8, 2010
Once perfected, they bind other contracting parties and the obligations arising
therefrom have the force of law between the parties.
Article 1315 of the Civil Code provides that a contract is perfected by mere
consent, which is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract. Here, there is no dispute that
the MOU was already "perfected" as manifested by the parties' assent to it. They
freely and voluntarily signed the MOU.
22, 2008
Parties are bound to fulfill what has been expressly stipulated in the contract.
Marlou L. Velasquez vs. Solidbank, G.R. No. 157309, March 28, 2008
A compromise agreement is a simple contract which is perfected by mere consent.

Republic of the Philippines vs. Antonio Florendo, et al., G.R. No. 166866, March 27,
2008
Upon due acceptance, the contract is perfected, and from that moment the parties
are bound not only to the fulfillment of what has been expressly stipulated but also to
all the consequences which, according to their nature, may be in keeping with good
faith, usage and law.
February 11, 2008
A contract is perfected by mere consent, which is manifested by the meeting of the
offer and the acceptance upon the thing and the cause which are to constitute the
contract.
22, 2008
Contracts, other than real contracts are perfected by mere consent which is
manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract. Once perfected, they bind other contracting
parties and the obligations arising therefrom have the force of law between the parties
and should be complied with in good faith. The parties are bound not only to the
fulfillment of what has been expressly stipulated but also to the consequences which,
according to their nature, may be in keeping with good faith, usage and law.
Alexander Macasaet vs. R. Transport Corp., G.R. No. 172446, October 10, 2007
It is true that under Article 1315 of the Civil Code of the Philippines, contracts are
perfected by mere consent; and from that moment, the parties are bound not only to
the fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law.
A contract of sale is perfected at the moment there is a meeting of minds upon

the thing which is the object of the contract and upon the price. Thus, for a contract of
sale to be valid, all of the following essential elements must concur: "a) consent or
meeting of the minds; b) determinate subject matter; and c) price certain in money or
its equivalent." . . . As for the price, fixing it can never be left to the decision of only
one of the contracting parties. "But a price fixed by one of the contracting parties, if
accepted by the other, gives rise to a perfected sale." As regards consent, "[w]hen
there is merely an offer by one party without acceptance of the other, there is no
contract." The decision to accept a bidder's proposal must be communicated to the
bidder. However, a binding contract may exist between the parties whose minds have
met, although they did not affix their signatures to any written document, as
acceptance may be expressed or implied. It "can be inferred from the
contemporaneous and subsequent acts of the contracting parties." Thus, we held:
. . . The rule is that except where a formal acceptance is so required,

although the acceptance must be affirmatively and clearly made and must be
evidenced by some acts or conduct communicated to the offeror, it may be
made either in a formal or an informal manner, and may be shown by acts,
conduct, or words of the accepting party that clearly manifest a present
intention or determination to accept the offer to buy or sell. Thus, acceptance
may be shown by the acts, conduct, or words of a party recognizing the
existence of the contract of sale.
Robern Development Corp., et al. vs. People's Landless Association, G.R. No. 173622,
March 11, 2013
Art. 1317 - No one may contract in the name of another without authority
Uniland Resources vs. DBP, G.R. No. 95909, August 16, 1991
Art. 1317, 2nd par.

Ravago Equipment Rentals, Inc. vs. Court of Appeals, G.R. No. 121313, April 10, 1997
Art. 1318 - Requisites of contracts
Florencia G. Diaz vs. Republic of the Phil., G.R. No. 181502, February 2, 2010
Felix Gochan and Sons Realty Corp. vs. Heirs of Raymundo Baba, G.R. No. 138945,
August 19, 2003
Salvador P. Malbarosa vs. Court of Appeals, G.R. No. 125761, April 30, 2003
Julian Francisco et al. vs. Pastor Herrera, G.R. No. 139982, November 21, 2002
Rido Montecillo vs. Ignacia Reynes, G.R. No. 138018, July 26, 2002
Pepito S. Pua vs. Court of Appeals, G.R. No. 134992, November 20, 2000
Virginia A. Perez vs. Court of Appeals, G.R. No. 112329, January 28, 2000
William Uy vs. Court of Appeals, G.R. No. 120465, September 9, 1999
San Juan Structural and Steel Fabricators vs. Court of Appeals, G.R. No. 129459,
September 29, 1998
Heirs Of Pedro Escanlar vs. Court of Appeals, G.R. No. 119777, October 23, 1997
Islamic Directorate of the Phils. vs. Court of Appeals, G.R. No. 117897, May 14, 1997
First Philippine International Bank vs. Court of Appeals, G.R. No. 115849, January 24,
1996
1989
Without acceptance, a mere offer produces no obligation.

16, 2008
As a contract, a compromise agreement must comply with the following basic

elements: (1) consent of the contracting parties; (2) object certain which is the subject
matter of the contract; and (3) cause of the obligation which is established.
22, 2008
Under Article 1318 of the Civil Code, the following are the essential requisites of a
valid contract: 1) the consent of the contracting parties, 2) the object certain which is
the subject matter of the contract, and 3) the cause of the obligation which is
established. When all the essential requisites are present, a contract is obligatory in
whatever form it may have been entered into, save in cases where the law requires that
it be in a specific form to be valid and enforceable.
December 8, 2003
Art. 1319 - Consent
When Lessee Loses His Right to Buy Property
Where the lessor makes an offer to sell to the lessee a certain property at a fixed
price within a certain period, and the lessee fails to accept the offer or to purchase on
time, then the lessee loses his right to buy the property and the owner can validly offer
it to another. The lessee's act of negotiating for a much lower price was a
counter-offer and is therefore not an acceptance of the offer of the owner. The
counter-offer of the lessee for a much lower price was not accepted by the owner.
There is therefore no contract that was perfected between them with regard to the sale
of subject property. Petitioner, thus, does not have any right to demand that the
property be sold to him at the price for which it was sold to the buyers neither does he
have the right to demand that said sale to the buyers be annulled.
Roberto D. Tuazon vs. Lourdes Q. del Rosario-Suarez, et al., G.R. No. 168325,
December 13, 2010
170852, September 12, 2008
Conchita Tan vs. Planters Products, Inc., G.R. No. 172239, March 28, 2008
Rockland Construction Co., Inc. vs. Mid-Pasig Land Dev't. Corp., G.R. No. 164587,
February 4, 2008
Insular Life Assurance Co. vs. Asset Builders Corp., G.R. No. 147410, February 5, 2004
Emilia M. Uraca vs. Court of Appeals, G.R. No. 115158, September 5, 1997
Maria Cristina Fertilizer Corp. vs. Court of Appeals, G.R. No. 123905, June 9, 1997
Limketkai Sons Milling Inc. vs. Court of Appeals, G.R. No. 118509, March 29, 1996
Johannes Schuback & Sons Philippine Trading Corp. vs. Court of Appeals, G.R. No.
105387, November 11, 1993
Marietta P. Santos vs. Court of Appeals, G.R. No. 101818, September 21, 1993
Suga Sotto Yuvienco vs. Auxencio C. Dacuycuy, G.R. No. L-55048, May 27, 1981
Consent to contracts is manifested by the meeting of the offer and the acceptance of
the thing and the cause which are to constitute the contract; the offer must be certain
and the acceptance absolute.
The acceptance of an offer must be made known to the offeror, and unless the
offeror knows of the acceptance, there is no meeting of the minds of the parties, no
real concurrence of offer and acceptance.
Sps. Rafael and Zenaida Estanislao vs. East West Banking Corporation, G.R. No.
178537, February 11, 2008
Alvador P. Malbarosa vs. Court of Appeals, G.R. No. 125761, April 30, 2003
Consent to contracts is manifested by the meeting of the offer and the acceptance of
the thing and the cause which are to constitute the contract; the offer must be certain
and the acceptance absolute.
February 11, 2008
Rockland Construction Co., Inc. vs. Mid-Pasig Land Development Corp., G.R. No.
164587, February 4, 2008
The acceptance of an offer must be made known to the offeror. Unless the offeror
knows of the acceptance, there is no meeting of the minds of the parties, no real
concurrence of offer and acceptance. The offeror may withdraw its offer and revoke
the same before acceptance thereof by the offeree. The contract is perfected only from
the time an acceptance of an offer is made known to the offeror. If an offeror
prescribes the exclusive manner in which acceptance of his offer shall be indicated by
the offeree, an acceptance of the offer in the manner prescribed will bind the offeror.
On the other hand, an attempt on the part of the offeree to accept the offer in a
different manner does not bind the offeror as the absence of the meeting of the minds
on the altered type of acceptance. An offer made inter praesentes must be accepted
immediately. If the parties intended that there should be an express acceptance, the
contract will be perfected only upon knowledge by the offeror of the express
acceptance by the offeree of the offer. An acceptance which is not made in the manner
prescribed by the offeror is not effective but constitutes a counter-offer which the
offeror may accept or reject. The contract is not perfected if the offeror revokes or
withdraws its offer and the revocation or withdrawal of the offeror is the first to reach
the offeree. The acceptance by the offeree of the offer after knowledge of the
revocation or withdrawal of the offer is inefficacious. The termination of the contract
when the negotiations of the parties terminate and the offer and acceptance concur, is
largely a question of fact to be determined by the trial court. plpecdtai
Salvador P. Malbarosa vs. Court of Appeals, G.R. No. 125761, April 30, 2003
Art. 1321 - Time, place and manner of acceptance
Insular Life Assurance Co. vs. Asset Builders Corp., G.R. No. 147410, February 5, 2004
Art. 1323 - When offer becomes ineffective
Under Article 1323 of the Civil Code, an offer becomes ineffective upon the death,
civil interdiction, insanity, or insolvency of either party before acceptance is
conveyed. The reason for this is that: [T]he contract is not perfected except by the
concurrence of two wills which exist and continue until the moment that they occur.
The contract is not yet perfected at any time before acceptance is conveyed; hence, the
disappearance of either party or his loss of capacity before perfection prevents the
contractual tie from being formed. (ARTURO M. TOLENTINO, Civil Code of the
Philippines, vol. IV, 463 [1985 ed.,] citing 2-1 Ruggiero 283 and 5 Salvat 34-35)
Miguela R. Villanueva vs. Court of Appeals, G.R. No. 114870, May 26, 1995
Art. 1324 - When offer may be withdrawn
Option Contract, Defined
An option contract is a contract by virtue of which A, in consideration of the

payment of a certain sum to B, acquires the privilege of buying from, or selling to, B
certain securities or properties within a limited time at a specified price. An agreement
in writing to give a person the 'option' to purchase lands within a given time at a
named price is neither a sale nor an agreement to sell. It is simply a contract by which
the owner of property agrees with another person that he shall have the right to buy
his property at a fixed price within a certain time. He does not sell his land; he does
not then agree to sell it; but he does sell something; that is, the right or privilege to
buy at the election or option of the other party. The second party gets in praesenti, not
lands, nor an agreement that he shall have lands, but he does get something of value;
that is, the right to call for and receive lands if he elects. The owner parts with his
right to sell his lands, except to the second party, for a limited period. The second
party receives this right, or rather, from his point of view, he receives the right to elect
to buy.
December 13, 2010
Difference between an Option Contract and a Right of First Refusal
An option contract is entirely different and distinct from a right of first refusal in
that in the former, the option granted to the offeree is for a fixed period and at a
determined price. Lacking these two essential requisites, what is involved is only a
right of first refusal.
December 13, 2010
Effect of Option Without Consideration vs. Option Founded upon a Consideration
It is clear from the provision of Article 1324 that there is a great difference between
the effect of an option which is without a consideration from one which is founded
upon a consideration. If the option is without any consideration, the offeror may
withdraw his offer by communicating such withdrawal to the offeree at anytime
before acceptance; if it is founded upon a consideration, the offeror cannot withdraw
his offer before the lapse of the period agreed upon.
December 13, 2010
Federico Serra vs. Court of Appeals, G.R. No. 103338, January 4, 1994
Cipriano Vasquez vs. Court of Appeals, G.R. No. 83759, July 12, 1991
Art. 1326 - Advertiser is not bound to accept highest or lowest bidder
Francis Lee vs. Court of Appeals, G.R. No. 90423, September 6, 1991
C & C Commercial Corp. vs. Antonio C. Menor, G.R. No. L-28360, January 27, 1983
Art. 1327(2) - Demented person cannot give consent to a contract
Samahan ng Magsasaka sa San Josep vs. Marietta Valisno, G.R. No. 158314, June 3,
2004
Julian Francisco vs. Pastor Herrera, G.R. No. 139982, November 21, 2002
Insanity impinges on consent freely given in donation of property.
In order for donation of property to be valid, what is crucial is the donor's capacity
to give consent at the time of the donation. Certainly, there lies no doubt in the fact
that insanity impinges on consent freely given. However, the burden of proving such
incapacity rests upon the person who alleges it; if no sufficient proof to this effect is
presented, capacity will be presumed.
From scientific studies it can be deduced that a person suffering from

schizophrenia does not necessarily lose his competence to intelligently dispose his
property.
Art. 1330 - Voidable contract
The law furnishes no protection to the inferior simply because he is inferior any
more than it protects the strong because he is strong. The law furnishes protection to
both alike — to one no more or less than the other. It makes no distinction between
the wise and the foolish, the great and the small, the strong and the weak. The foolish
may lose all they have to the wise; but that does not mean that the law will give it
back to them again. Courts cannot follow one every step of his life and extricate him
from bad bargains, protect him from unwise investments, relieve him from one-sided
contracts, or annul the effects of foolish acts.
Sps. Nilo and Eliadora Ramos vs. Raul Obispo, et al., G.R. No. 193804, February 27,
2013 citing Ocampo vs. Land Bank of the Philippines, G.R. No. 164968, July 3, 2009
Miguel Katipunan vs. Braulio Katipunan, Jr., G.R. No. 132415, January 30, 2002
Phil. Carpet Employees Association vs. Phil. Carpet Manufacturing Corp., G.R. Nos.
140269-70, September 14, 2000
Maxima Hemedes vs. Court of Appeals, G.R. Nos. 107132 & 108472, October 8, 1999
Archipelago Mgt. & Mktg. Corp. vs. Court of Appeals, G.R. No. 128850, November 20,
1998
Art. 1331 - When mistake may invalidate contract
Heinzrich Theis vs. Court of Appeals, G.R. No. 126013, February 12, 1997
Isabel Rubio Alcasid vs. Court of Appeals, G.R. No. 104751, October 7, 1994
Art. 1332 - When one party is illiterate
Jose S. Dailisan vs. Court of Appeals, et al., G.R. No. 176448, July 28, 2008
Andrea Mayor vs. Lourdes Masangkay Belen, G.R. No. 151035, June 3, 2004
Sps. James and Florence Tan vs. Carmina Mandap, G.R. No. 150925, May 27, 2004
Policarpio Cayabyab vs. Intermediate Appellate Court, G.R. No. 75120, April 28, 1994
Mariano T. Lim vs. Court of Appeals, G.R. No. 55201, February 3, 1994
Severo Sales vs. Court of Appeals, G.R. No. L-40145, July 29, 1992
Article 1332 was intended for the protection of a party to a contract who is at a
disadvantage due to his illiteracy, ignorance, mental weakness or other handicap. This
article contemplates a situation wherein a contract has been entered into, but the
consent of one of the parties is vitiated by mistake or fraud committed by the other
contracting party.
Maxima Hemedes vs. Court of Appeals, G.R. No. 107132 & 108472, October 8, 1999
Art. 1335, par. 2 - Intimidation
In order that intimidation may vitiate consent and render the contract invalid, the
following requisites must concur: (1) that the intimidation must be the determining
cause of the contract, or must have caused the consent to be given; (2) that the
threatened act be unjust or unlawful; (3) that the threat be real and serious, there being
an evident disproportion between the evil and the resistance which all men can offer,
leading to the choice of the contract as the lesser evil; and (4) that it produces a
reasonable and well-grounded fear from the fact that the person from whom it comes
has the necessary means or ability to inflict the threatened injury.
Virgilio Callanta vs. NLRC, G.R. No. 105083, August 20, 1993
Sylvia Lichauco De Leon vs. Court of Appeals, G.R. No. 80965, June 6, 1990
[A] threat to enforce one's claim through competent authority, if the claim is just or
legal, does not vitiate consent. It has been held that foreclosure of mortgaged
properties in case of default in payment of a debtor is a legal remedy afforded by law
to a creditor. Hence, a threat to foreclose the mortgage would not per se vitiate
consent.
Manuel T. De Guia, et al. vs. Presiding Judge, RTC, Branch 12, Malolos, Bulacan, et
al., G.R. No. 161074, March 22, 2010
Art. 1337 - Undue influence
There is undue influence when a person takes improper advantage of his power
over the will of another, depriving the latter of a reasonable freedom of choice. For
undue influence to be present, the influence exerted must have so overpowered or
subjugated the mind of a contracting party as to destroy his free agency, making him
express the will of another rather than his own.
Carmela Brobio Mangahas vs. Eufrocina A. Brobio, G.R. No. 183852, October 20, 2010
Undue influence depends upon the circumstances of each case and not on bare
academic rules. For undue influence to be established to justify the cancellation of an
instrument, three elements must be present: (a) a person who can be influenced; (b)
the fact that improper influence was exerted; (c) submission to the overwhelming
effect of such unlawful conduct. In the absence of a confidential or fiduciary
relationship between the parties, the law does not presume that one person exercised
undue influence upon the other. A confidential or fiduciary relationship may include
any relation between persons, which allows one to dominate the other, with the
opportunity to use that superiority to the other's disadvantage.
Andres Villalon vs. Court of Appeals, G.R. No. 115734, February 23, 2000
Art. 1338 - Fraud
Andrea Mayor vs. Lourdes Masangkay Belen, G.R. No. 151035, June 3, 2004
Consuelo Reyes vs. Court of Appeals, G.R. No. 94214, December 1, 1992
Vicente Cu vs. Court of Appeals, G.R. No. 75504, April 2, 1991
Under Article 1338 of the Civil Code, there is fraud when, through insidious words
or machinations of one of the contracting parties, the other is induced to enter into a
contract which, without them, he would not have agreed to. In order that fraud may
vitiate consent, it must be the causal (dolo causante), not merely the incidental (dolo
incidente), inducement to the making of the contract. Additionally, the fraud must be
serious.
167874, January 15, 2010
Art. 1344 - When fraud may make a contract voidable
167874, January 15, 2010
Art. 1345 - Simulation of contract
Edilberto Cruz vs. Bancom Finance Corp., G.R. No. 147788, March 19, 2002
When the parties do not intend to be bound at all, the contract is absolutely
simulated; if the parties conceal their true agreement, then the contract is relatively
simulated.
Lucia Carlos Alino, et al. vs. Angelica A. Lorenzo, et al., G.R. No. 159550, June 27,
2008
Art. 1346 - Absolutely simulated or fictitious contract
Jose M. Javier vs. Court of Appeals, G.R. No. 48194, March 15, 1990
Art. 1347, par. 2 - No contract may be entered into upon future inheritance
Florencia G. Diaz vs. Republic of the Phil., G.R. No. 181502, February 2, 2010
Belinda Tañedo vs. Court of Appeals, G.R. No. 104482, January 22, 1996
Article 1347, paragraph 2 of the Civil Code characterizes a contract entered into
upon future inheritance as void. The law applies when the following requisites concur:
(1) the succession has not yet been opened; (2) the object of the contract forms part of
the inheritance; and (3) the promissor has, with respect to the object, an expectancy of
a right which is purely hereditary in nature.
Lordito Arrogante, et al. vs. Sps. Beethoven and Leonora Deliarte, G.R. No. 152132,
July 24, 2007
Contracting parties must be juristic entities at the time of the consummation of the
contract. Stated otherwise, to form a valid and legal agreement it is necessary that
there be a party capable of contracting and a party capable of being contracted with.
Hence, if any one party to a supposed contract was already dead at the time of its
execution, such contract is undoubtedly simulated and false and, therefore, null and
void by reason of its having been made after the death of the party who appears as one
of the contracting parties therein. The death of a person terminates contractual
capacity.
Milagros de Belen Vda. de Cabalu, et al. vs. Sps. Renato and Dolores Tabu, G.R. No.
188417, September 24, 2012
Art. 1349 - Object of every contract must be determinate as to its kind
Domingo Realty, Inc., et al. vs. Court of Appeals, et al., G.R. No. 126236 January 26,
2007
1989
Art. 1350 - Cause of onerous contracts
While consideration is usually in the form of money or property, it need not be

monetary. . . . A consideration, in the legal sense of the word, is some right, interest,
benefit, or advantage conferred upon the promisor, to which he is otherwise not
lawfully entitled, or any detriment, prejudice, loss, or disadvantage suffered or
undertaken by the promisee other than to such as he is at the time of consent bound to
suffer.
2012 citing Gabriel v. Monte de Piedad y Caja de Ahorros, 71 Phil. 497, 501 (1941)
Art. 1355 - Lesion or inadequacy of cause
Sps. Bernardo Buenaventura and Consolacion Joaquin vs. Court of Appeals, G.R. No.
126376, November 20, 2003
Inadequacy of the consideration, however, does not render a contract void under
2012
[L]ack of ample consideration does not nullify the contract:
Inadequacy of consideration does not vitiate a contract unless it is

proven which in the case at bar was not, that there was fraud, mistake or
undue influence. We do not find the stipulated price as so inadequate to shock
the court's conscience, considering that the price paid was much higher than
the assessed value of the subject properties and considering that the sales were
effected by a father to her daughter in which case filial love must be taken into
account.
2012 citing Alsua-Betts vs. Court of Appeals, G.R. Nos. L-46430-31, July 30, 1979
[A] bad transaction cannot serve as basis for voiding a contract:
. . . Courts cannot follow one every step of his life and extricate him
from bad bargains, protect him from unwise investments, relieve him from
one-sided contracts, or annul the effects of foolish acts. . . . Men may do
foolish things, make ridiculous contracts, use miserable judgment, and lose
money by them — indeed, all they have in the world; but not for that alone
can the law intervene and restore. There must be, in addition, a violation of
law, the commission of what the law knows as an actionable wrong, before
the courts are authorized to lay hold of the situation and remedy it.
2012 citing Vales vs. Villa, 35 Phil. 769, 788 (1916)
Art. 1356 - Form of contracts
Republic of the Phil. vs. Sandiganbayan, G.R. No. 108292, September 10, 1993
[T]he Statute of Frauds only lays down the method by which the enumerated
contracts may be proved. But it does not declare them invalid because they are not
reduced to writing inasmuch as, by law, contracts are obligatory in whatever form they
may have been entered into, provided all the essential requisites for their validity are
present.
Municipality of Hagonoy, Bulacan, et al. vs. Simeon P. Dumdum, Jr., et al., G.R. No.
168289, March 22, 2010
Art. 1358 - What must appear in a public document
Woodchild Holdings vs. Roxas Electric & Construction Co., G.R. No. 140667, August
12, 2004
December 8, 2003
Gregorio Fule vs. Court of Appeals, G.R. No. 112212, March 2, 1998
Julio Tapec vs. Court of Appeals, G.R. No. 111952, October 26, 1994
Lydia Arriola vs. Bank of the Philippine Islands, G.R. No. 94385, July 18, 1991
PNB vs. Intermediate Appellate Court, G.R. No. 66715, September 18, 1990
The Civil Code requires certain transactions to appear in public documents.

However, the necessity of a public document for contracts which transmit or
extinguish real rights over immovable property, as mandated by Article 1358 of the
Civil Code, is only for convenience; it is not essential for validity or enforceability…
The only effect of non-compliance with the provisions of Article 1358 of the Civil
Code is that a party to such a contract embodied in a private document may be
compelled to execute a public document.
Bienvenido C. Teoco, et al. vs Metrobank, G.R. No. 162333, December 23, 2008
Any transaction involving the sale or disposition of real property must be in

writing.
175510, July 28, 2008
Although Article 1358 of the Civil Code states that the sale of real property must
appear in a public instrument, the formalities required by this article is not essential
for the validity of the contract but is simply for its greater efficacy or convenience, or
to bind third persons, and is merely a coercive means granted to the contracting parties
to enable them to reciprocally compel the observance of the prescribed form.
Consequently, the private conveyance of the house is valid between the parties.
Loreta Agustin Chong vs. Court of Appeals, et al., G.R. No. 148280, July 10, 2007
Article 1358 of the New Civil Code, which requires the embodiment of certain
contracts in a public instrument, is only for convenience, and the registration of the
instrument would merely affect third persons. Formalities intended for greater
efficacy or convenience or to bind third persons, if not done, would not adversely
affect the validity or enforceability of the contract between the contracting parties
themselves.
Universal Robina Sugar Milling Corporation vs. Heirs of Angel Teves, G.R. No. 128574,
September 18, 2002
Art. 1359 - Reformation of instrument
Proceso Quiros vs. Marcelo Arjona, G.R. No. 158901, March 9, 2004
Rita Sarming vs. Cresencio Dy, G.R. No. 133643, June 6, 2002
Florencia T. Huibonhoa vs. Court of Appeals, G.R. Nos. 95897 & 102604, December
14, 1999
Simon Lacorte vs. Court of Appeals, G.R. No. 124574, February 2, 1998
BA Finance Corporation vs. Intermediate Appellate Court, G.R. No. 76497, January 20,
1993
National Irrigation Administration vs. Estanislao Gamit, G.R. No. 85869, November 6,
1992
Cecilia Mata vs. Court of Appeals, G.R. No. 87880, April 7, 1992
Reformation is a remedy in equity, whereby a written instrument is made or

construed so as to express or conform to the real intention of the parties, where some
error or mistake has been committed. In granting reformation, the remedy in equity is
not making a new contract for the parties, but establishing and perpetuating the real
contract between the parties which, under the technical rules of law, could not be
enforced but for such reformation.
In order that an action for reformation of instrument may prosper, the following
requisites must concur: (1) there must have been a meeting of the minds of the parties
to the contract; (2) the instrument does not express the true intention of the parties;
and (3) the failure of the instrument to express the true intention of the parties is due
to mistake, fraud, inequitable conduct or accident.
Multi-Ventures Capital and Management Corp. vs. Stalwart Management Services
Corp., et al., G.R. No. 157439, July 4, 2007
In an action for reformation of contract, the court determines whether the parties'
written agreement reflects their true intention. In the present case, this intention refers
to the identity of the land covered by the second and third sale. On the other hand, in a
reivindicatory action, the court resolves the issue of ownership of real property and
the plaintiff's entitlement to recover its full possession. In this action, the plaintiff is
required to prove not only his ownership, but also the identity of the real property he
seeks to recover.
Rosito Bagunu vs. Sps. Francisco & Rosenda Aggabao, G.R. No. 186487, August 15,
2011
Art. 1367 - Party who has brought an action to enforce instrument cannot
subsequently ask for its reformation
Paradise Sauna vs. Alejandro Ng, G.R. No. 66394, February 5, 1990
Art. 1370 - Literal meaning of stipulations shall control
Southeast Asia Shipping Corp. vs. Seagull Maritime Corp., G.R. No. 144439, October
24, 2003
Dolores Ligaya De Mesa vs. Court of Appeals, G.R. No. 106467-68, October 19, 1999
Conchita Nool vs. Court of Appeals, G.R. No. 116635, July 24, 1997
Purita Salvatierra vs. Court of Appeals, G.R. No. 107797, August 26, 1996
Concepcion Nadal vs. Court of Appeals, G.R. No. L-46623, March 4, 1994
Capital Insurance & Surety Co., Inc. vs. Central Azucarera Del Danao, G.R. No.
L-30770, April 7, 1993
Marcopper Mining Corporation vs. National Labor Relations Commission, G.R. No.
83207, August 5, 1991
Sps. Leoncio G. Cifra vs. Court of Appeals, G.R. No. 91901, June 3, 1991
Francisco S. Pe vs. Intermediate Appellate Court, G.R. No. 74781, March 13, 1991
Jose Matienzo vs. Martin Servidad, G.R. No. L-28135, September 10, 1981
If the terms of the contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control. If the words
appear to be contrary to the evident intention of the parties, the latter shall prevail over
the former.
Sps. Ramon and Emma Reyes vs. Dominador Salvador, Sr., et al., G.R. Nos. 139047
and 139365, September 11, 2008
Benguet Corp., et al. vs. Cesar Cabildo, G.R. No. 151402, August 22, 2008
Law Firm of Tungol and Tibayan vs. Court of Appeals, et al., G.R. No. 169298, July 9,
2008
Juan Oliveros, et al. vs. Esperanza Dela Cruz Sarmiento, G.R. No. 158384, June 12,
2008
In the interpretation of contracts the intention of the parties is determined from the
express terms of their agreement.
2008
This provision is akin to the "plain meaning rule" applied by Pennsylvania courts,
which assumes that the intent of the parties to an instrument is "embodied in the
writing itself, and when the words are clear and unambiguous the intent is to be
discovered only from the express language of the agreement." It also resembles the
"four corners" rule, a principle which allows courts in some cases to search beneath
the semantic surface for clues to meaning. A court's purpose in examining a contract
is to interpret the intent of the contracting parties, as objectively manifested by them.
The process of interpreting a contract requires the court to make a preliminary inquiry
as to whether the contract before it is ambiguous. A contract provision is ambiguous if
it is susceptible of two reasonable alternative interpretations. Where the written terms
of the contract are not ambiguous and can only be read one way, the court will
interpret the contract as a matter of law. If the contract is determined to be ambiguous,
then the interpretation of the contract is left to the court, to resolve the ambiguity in
the light of the intrinsic evidence.
Enrique C. Abad, et al. vs. Goldloop Properties, Inc., G.R. No. 168108, April 13, 2007
The rule is that where the language of a contract is plain and unambiguous, its
meaning should be determined without reference to extrinsic facts or aids. The
intention of the parties must be gathered from that language, and from that language
alone. Stated differently, where the language of a written contract is clear and
unambiguous, the contract must be taken to mean that which, on its face, it purports to
mean, unless some good reason can be assigned to show that the words should be
understood in a different sense. Courts cannot make for the parties better or more
equitable agreements than they themselves have been satisfied to make, or rewrite
contracts because they operate harshly or inequitably as to one of the parties, or alter
them for the benefit of one party and to the detriment of the other, or by construction,
relieve one of the parties from the terms which he voluntarily consented to, or impose
on him those which he did not.
Enrique C. Abad, et al. vs. Goldloop Properties, Inc., G.R. No. 168108, April 13, 2007
Angel Bautista v. Court of Appeals, G.R. No. 123655, January 19, 2000
When the terms of a contract are clear and leave no doubt as to the intention of the
contracting parties, the literal meaning of its stipulations governs. In such cases,
courts have no authority to alter the contract by construction or to make a new
contract for the parties; a court's duty is confined to the interpretation of the contract
the parties made for themselves without regard to its wisdom or folly, as the court
cannot supply material stipulations or read into the contract words the contract does
not contain. It is only when the contract is vague and ambiguous that courts are
permitted to resort to the interpretation of its terms to determine the parties' intent.
March 9, 2010
The cardinal rule in the interpretation of contracts is embodied in the first

paragraph of Article 1370 of the Civil Code: "[i]f the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulations shall control." This provision is akin to the "plain meaning rule" applied
by Pennsylvania courts, which assumes that the intent of the parties to an instrument is
"embodied in the writing itself, and when the words are clear and unambiguous the
intent is to be discovered only from the express language of the agreement." It also
resembles the "four corners" rule, a principle which allows courts in some cases to
search beneath the semantic surface for clues to meaning. A court's purpose in
examining a contract is to interpret the intent of the contracting parties, as objectively
manifested by them. The process of interpreting a contract requires the court to make
a preliminary inquiry as to whether the contract before it is ambiguous. A contract
provision is ambiguous if it is susceptible of two reasonable alternative
interpretations. Where the written terms of the contract are not ambiguous and can
only be read one way, the court will interpret the contract as a matter of law. If the
contract is determined to be ambiguous, then the interpretation of the contract is left to
the court, to resolve the ambiguity in the light of the intrinsic evidence.
Adriatico Consortium, Inc., et al. vs. Land Bank of the Phil., G.R. No. 187838,
December 23, 2009
Abad vs. Goldloop Properties, Inc., G.R. No. 168108, April 13, 2007
A court's purpose in examining a contract is to interpret the intent of the

contracting parties, as objectively manifested by them. The process of interpreting a
contract requires the court to make a preliminary inquiry as to whether the contract
before it is ambiguous. A contract provision is ambiguous if it is susceptible of two
reasonable alternative interpretations. Where the written terms of the contract are not
ambiguous and can only be read one way, the court will interpret the contract as a
matter of law. If the contract is determined to be ambiguous, then the interpretation of
the contract is left to the court, to resolve the ambiguity in the light of the intrinsic
evidence.
citing Abad vs. Goldloop Properties, Inc., G.R. No. 168108, April 13, 2007
As this Court has held, all persons in need of money are liable to enter into
contractual relationships whatever the condition if only to alleviate their financial
burden albeit temporarily. Hence, courts are duty-bound to exercise caution in the
interpretation and resolution of contracts lest the lenders devour the borrowers like
vultures do with their prey.
Sps. Lehner and Ludy Martires vs. Menelia Chua, G.R. No. 174240, March 20, 2013
Art. 1371 - Intention of contracting parties
Salvador and Ligaya Adorable. vs. Court of Appeals, G.R. No. 119466, November 25,
1999
Vicente Villaflor vs. Court of Appeals, G.R. No. 95694, October 9, 1997
Kilosbayan, Incorporated vs. Teofisto Guingona, Jr., G.R. No. 113375, May 5, 1994
Concepcion Nadal vs. Court of Appeals, G.R. No. L-46623, March 4, 1994
In the interpretation of contracts the intention of the parties is determined as well

from their contemporaneous and subsequent acts.
2008
February 11, 2008
When the parties admit the contents of written documents but put in issue whether
these documents adequately and correctly express the true intention of the parties, the
deciding body is authorized to look beyond these instruments and into the
contemporaneous and subsequent actions of the parties in order to determine such
intent.
Well-settled is the rule that in case of doubt, it is the intention of the contracting
parties that prevails, for the intention is the soul of a contract, not its wording which is
prone to mistakes, inadequacies, or ambiguities. To hold otherwise would give life,
validity, and precedence to mere typographical errors and defeat the very purpose of
agreements.
Salun-at Marquez, et al. vs. Eloisa Espejo, et al., G.R. No. 168387, August 25, 2010
Art. 1372 - When terms of a contract are general
Rosario Gacos vs. Court of Appeals, G.R. No. 85962-63, August 3, 1992
When there is no doubt as to the intention of the contracting parties, its literal
meaning shall control (Art. 1370, New Civil Code; Cebu Portland Cement Co. vs.
Dumon, G.R. No. L-26738, Nov. 29, 1974). Article 1372 of the New Civil Code
further provides that however general the terms of a contract may be, they shall not be
understood to comprehend things that are distinct and cases that are different from
those upon which the parties intended to agree (Rep. vs. Vda. de Castellvi, G.R. No.
L-20620, Aug. 15, 1974). Therefore, a meaning other than that expressed or an
interpretation which would alter its strict and literal significance should not, be given
to it (City of Manila vs. Rital Park Co., G.R. No. 31063, September 13, 1929, 53 Phil.
515). Moreover, the entirety of the contract must be taken into consideration to
ascertain the meaning of its provision (Ruiz vs. Sheriff of Manila, G.R. No. L-24016,
July 31, 1970).
Jose Matienzo vs. Martin Servidad, G.R. No. L-28135, September 10, 1981
Art. 1373 - If stipulation admits of several meanings
Art. 1374 - Stipulations of a contract shall be interpreted together
Republic of the Phil. vs. Jerry V. David, G.R. No. 155634, August 16, 2004
Insular Life Assurance Co. vs. Court of Appeals, G.R. No. 126850, April 28, 2004
Southeast Asia Shipping Corp. vs. Seagull Maritime Corp., G.R. No. 144439, October
24, 2003
Sps. Efren and Zosima Rigor vs. Consolidated Orix Leasing and Finance Corp., G.R.
No. 136423, August 20, 2002
Gerardo F. Rivera vs. Edgardo Espiritu, G.R. No. 135547, January 23, 2002
Rodolfo P. Velasquez vs. Court of Appeals, G.R. No. 124049, June 30, 1999
HDMF vs. Court of Appeals, G.R. No. 118972, April 3, 1998
Natalia S. Mendoza vs. Court of Appeals, G.R. No. 116216, June 20, 1997
It is a familiar rule in interpretation of contracts that conflicting provisions should

be harmonized to give effect to all.
TSPIC Corp. vs. TSPIC Employees Union (FFW), et al., G.R. No. 163419, February 13,
2008
[T]he kasunduan sa bilihan ng lupa and the kasunduan should both be given effect
rather than be declared conflicting, if there is a way of reconciling them. Petitioner
and respondent would not have entered into either of the agreements if they did not
intend to be bound or governed by them. Indeed, taken together, the two agreements
actually constitute a single contract pertaining to the sale of a land to respondent by
petitioner. Their stipulations must therefore be interpreted together, attributing to the
doubtful ones that sense that may result from all of them taken jointly. Their proper
construction must be one that gives effect to all.
Valentin Movido vs. Luis Reyes Pastor, G.R. No. 172279, February 11, 2010
Art. 1375 - Words with different significations
Art. 1376 - Usage or custom of place considered in interpretation of contracts
Art. 1377 - Obscure words or stipulations
Juana Almira vs. Court of Appeals, G.R. No. 115966, March 20, 2003
Rizal Surety & Insurance Company vs. Court of Appeals, G.R. No. 112360, July 18,
2000
RCBC vs. Court of Appeals, G.R. No. 133107, March 25, 1999
Joaquin T. Servidad vs. NLRC, G.R. No. 128682, March 18, 1999
Bienvenido M. Cadalin vs. POEA Administrator, G.R. No. 104776, December 5, 1994
Finman General Assurance Corporation vs. Court of Appeals, G.R. No. 100970,
September 2, 1992
Orient Air Services & Hotel Representatives vs. Court of Appeals, G.R. No. 76931 & 33,
May 29, 1991
Art. 1378 - Least transmission of rights and interests and greatest reciprocity
of interests
Rosario Gacos vs. Court of Appeals, G.R. No. 85962-63, August 3, 1992
Art. 1380 - Contracts may be rescinded
Guman, Bocaling & Co. vs. Raoul S.V. Bonnevie, G.R. No. 86150, March 2, 1992
Rescission, as contemplated in Articles 1380, et seq., of the New Civil Code, is a

remedy granted by law to the contracting parties and even to third persons, to secure
the reparation of damages caused to them by a contract, even if this should be valid,
by restoration of things to their condition at the moment prior to the celebration of the
contract. It implies a contract, which even if initially valid, produces a lesion or a
pecuniary damage to someone.
All that matters is that since Smartnet failed to pay the balance of the purchase
price, automatic rescission set in and this placed Piltel under an obligation to return
the down payment it received, less the portion that it forfeited due to Smartnet's
default. Consequently, it is but proper for Piltel to fully abide by such obligation.
Piltel cannot avoid rescission since it in fact partially abided by rescission's
consequences when it returned to Smartnet on December 19, 1997 a P50 million
portion of the down payment it received. By returning part of the down payment, it is
clear that Piltel recognized that the contract to sell the Valgoson Property had reached
the point of automatic rescission. Piltel is, therefore, in estoppel to deny rescission
based on a claim that it had not yet sent a statement of account or a notice of
delinquency to Smartnet regarding the latter's default. Such statement of account and
notice of delinquency had become academic. . . . Smartnet's nonpayment of the full
price of the property was not an act of rescission. It was but an event that rendered the
contract to sell without force and effect. In a contract to sell, the prospective seller
binds himself to part with his property only upon fulfillment of the condition agreed,
in this case, the payment in full of the purchase price. If this condition is not fulfilled,
the seller is then released from his obligation to sell.
Pilipino Telephone Corp. vs. Radiomarine Network (Smartnet) Phil., Inc., G.R. No.
160322, August 24, 2011
Art. 1381 - Rescissible contracts
28, 2008
No. 169790, April 30, 2008
Equatorial Realty Development vs. Mayfair Theater, G.R. No. 133879, November 21,
2001
Maria Antonia Siguan vs. Rosa Lim, G.R. No. 134685, November 19, 1999
Air France vs. Court of Appeals, G.R. No. 104234, June 30, 1995
Guman, Bocaling & Co. vs. Raoul S.V. Bonnevie, G.R. No. 86150, March 2, 1992
Under Article 1381 of the Civil Code, an accion pauliana is an action to rescind
contracts in fraud of creditors. However, jurisprudence is clear that the following
successive measures must be taken by a creditor before he may bring an action for
rescission of an allegedly fraudulent contract: (1) exhaust the properties of the debtor
through levying by attachment and execution upon all the property of the debtor,
except such as are exempt by law from execution; (2) exercise all the rights and
actions of the debtor, save those personal to him (accion subrogatoria); and (3) seek
rescission of the contracts executed by the debtor in fraud of their rights (accion
pauliana). It is thus apparent that an action to rescind, or an accion pauliana, must be
of last resort, availed of only after the creditor has exhausted all the properties of the
debtor not exempt from execution or after all other legal remedies have been
exhausted and have been proven futile.
Metrobank vs. International Exchange Bank, G.R. Nos. 176008 & 176131, August 10,
2011
Rescission is a remedy granted by law to the contracting parties and even to
third persons, to secure the reparation of damages caused to them by a contract, even
if it should be valid, by means of the restoration of things to their condition at the
moment prior to the celebration of said contract. 41 It is a remedy to make ineffective a
contract, validly entered into and therefore obligatory under normal conditions, by
reason of external causes resulting in a pecuniary prejudice to one of the contracting
parties or their creditors. Contracts which are rescissible are valid contracts having all
the essential requisites of a contract, but by reason of injury or damage caused to
either of the parties therein or to third persons are considered defective and, thus, may
be rescinded.
The kinds of rescissible contracts, according to the reason for their susceptibility to
rescission, are the following: first, those which are rescissible because of lesion or
prejudice; second, those which are rescissible on account of fraud or bad faith; and
third, those which, by special provisions of law, are susceptible to rescission.
Lilia B. Ada, et al. vs. Florante Baylon, G.R. No. 182435, August 13, 2012
The rescission of a contract under Article 1381 (4) of the Civil Code only requires
the concurrence of the following: first, the defendant, during the pendency of the case,
enters into a contract which refers to the thing subject of litigation; and second, the
said contract was entered into without the knowledge and approval of the litigants or
of a competent judicial authority. As long as the foregoing requisites concur, it
becomes the duty of the court to order the rescission of the said contract. The reason
for this is simple. Article 1381 (4) seeks to remedy the presence of bad faith among
the parties to a case and/or any fraudulent act which they may commit with respect to
the thing subject of litigation.
Article 1381 (4) of the Civil Code requires that any contract entered into by a
defendant in a case which refers to things under litigation should be with the
knowledge and approval of the litigants or of a competent judicial authority. Further,
any disposition of the thing subject of litigation or any act which tends to render
inutile the court's impending disposition in such case, sans the knowledge and
approval of the litigants or of the court, is unmistakably and irrefutably indicative of
bad faith. Such acts undermine the authority of the court to lay down the respective
rights of the parties in a case relative to the thing subject of litigation and bind them to
such determination.
It bears stressing that the right to ask for the rescission of a contract under Article
1381 (4) of the Civil Code is not contingent upon the final determination of the
ownership of the thing subject of litigation. The primordial purpose of Article 1381
(4) of the Civil Code is to secure the possible effectivity of the impending judgment
by a court with respect to the thing subject of litigation. It seeks to protect the binding
effect of a court's impending adjudication vis-à-vis the thing subject of litigation
regardless of which among the contending claims therein would subsequently be
upheld. Accordingly, a definitive judicial determination with respect to the thing
subject of litigation is not a condition sine qua non before the rescissory action
contemplated under Article 1381 (4) of the Civil Code may be instituted. Moreover,
conceding that the right to bring the rescissory action pursuant to Article 1381 (4) of
the Civil Code is preconditioned upon a judicial determination with regard to the thing
subject litigation, this would only bring about the very predicament that the said
provision of law seeks to obviate. Assuming arguendo that a rescissory action under
Article 1381 (4) of the Civil Code could only be instituted after the dispute with
respect to the thing subject of litigation is judicially determined, there is the possibility
that the same may had already been conveyed to third persons acting in good faith,
rendering any judicial determination with regard to the thing subject of litigation
illusory. Surely, this paradoxical eventuality is not what the law had envisioned.
Art. 1383 - Action for rescission is subsidiary
Art. 1385 - Rescission creates obligation to return object of contract
167874, January 15, 2010
28, 2008
Sps. Manuel and Jocelyn Barredo vs. Sps. Eustaquio and Emilda Leaño, G.R. No.
156627, June 4, 2004
David Reyes vs. Jose Lim, G.R. No. 134241, August 11, 2003
Equatorial Realty Development vs. Mayfair Theater, G.R. No. 133879, November 21,
2001
Alexander G. Asuncion vs. Eduardo B. Evangelista, G.R. No. 133491, October 13, 1999
Goldenrod, Inc. vs. Court of Appeals, G.R. No. 126812, November 24, 1998
Gloria M. De Erquiaga vs. Court of Appeals, G.R. No. 47206, September 27, 1989
Grace Park Engineering Co., Inc. vs. Mohamad Ali Dimaporo, G.R. No. L-27482,
September 10, 1981
That rescission of a sale creates the obligation to return the things which were the
object of the contract, together with their fruits, and the price with its interests is
undisputed.
Development Bank of the Philippines vs. Romeo Teston, G.R. No. 174966, February
14, 2008
Art. 1387 - Contracts by which the debtor alienates property by gratuitous

title presumed to have been entered into in fraud of creditors
China Banking Corp. vs. Court of Appeals, G.R. No. 129644, September 7, 2001
China Banking Corp. vs. Court of Appeals, G.R. No. 129644, March 7, 2000
Maria Antonia Siguan vs. Rosa Lim, G.R. No. 134685, November 19, 1999
Art. 1387, 2nd par.
This article presumes the existence of fraud made by a debtor. Thus, in the absence
of satisfactory evidence to the contrary, an alienation of a property will be held
fraudulent if it is made after a judgment has been rendered against the debtor making
the alienation. This presumption of fraud is not conclusive and may be rebutted by
satisfactory and convincing evidence. All that is necessary is to establish affirmatively
that the conveyance is made in good faith and for a sufficient and valuable
consideration.
MR Holdings, Ltd. vs. Sheriff Carlos P. Bajar, G.R. No. 138104, April 11, 2002
Among the circumstances indicating fraud is a transfer of all or nearly all of the
debtor's assets, especially when the debtor is greatly embarrassed financially.
Accordingly, neither a declaration of insolvency nor the institution of insolvency
proceedings is a condition sine qua non for a transfer of all or nearly all of a debtor's
assets to be regarded in fraud of creditors. It is sufficient that a debtor is greatly
embarrassed financially.
Strategic Alliance Development Corp. vs. Radstock Securities Limited, et al., G.R. Nos.
178158 & 180428, December 4, 2009
Art. 1389 - Action for rescission must be commenced within four years
Jaime D. Ang vs. Court of Appeals, et al., G.R. No. 177874, September 29, 2008
28, 2008
Applicability of Article 1389 to Rescissible Contracts
Article 1389 applies to rescissible contracts, as enumerated and defined in Articles

1380 and 1381. We must stress however, that the "rescission" in Article 1381 is not
akin to the term "rescission" in Article 1191 and Article 1592. In Articles 1191 and
1592, the rescission is a principal action which seeks the resolution or cancellation of
the contract while in Article 1381, the action is a subsidiary one limited to cases of
rescission for lesion as enumerated in said article.
Unlad Resources Development Corporation vs. Renato p. Dragon, G.R. No. 149338,
July 28, 2008
Alfonso L. Iringan vs. Court of Appeals, G.R. No. 129107, September 26, 2001
The prescriptive period for instituting actions based on a breach of express

warranty is that specified in the contract, and in the absence of such period, the
general rule on rescission of contract, which is four years.
Art. 1390 - Voidable contracts
Samahan Ng Magsasaka Sa San Josep vs. Marietta Valisno, G.R. No. 158314, June 3,
2004
Ruperto L. Viloria vs. Court of Appeals, G.R. No. 119974, June 30, 1999
Antonio Guiang vs. Court of Appeals, G.R. No. 125172, June 26, 1998
Heinzrich Theis vs. Court of Appeals, G.R. No. 126013, February 12, 1997
A voidable or annullable contract is one where (i) one of the parties is incapable of
giving consent to a contract; or (ii) the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
Art. 1391 - Action for annulment must be brought within four years
Sps. Renato and Florinda Dela Cruz vs. Sps. Gil and Leonila Segovia, G.R. No.
149801, June 26, 2008
Placido Miranda vs. Court of Appeals, G.R. No. 109312, March 29, 1996
Erlinda B. Causapi vs. Court of Appeals, G.R. No. 107432, July 4, 1994
Jaime Villanueva vs. Court of Appeals, G.R. No. 84464, June 21, 1991
Francisca Salomon vs. Intermediate Appellate Court, G.R. No. 70263, May 14, 1990
Teodosia C. Lebrilla vs. Intermediate Appellate Court, G.R. No. 72623, December 18,
1989
An action to annul a contract is subject to a prescriptive period of four years from

the time of the discovery of the fraud.
When the consent of one of the contracting parties is vitiated by fraud, the contract
is voidable. However, even granting that [petitioner's] consent to the sale was indeed
obtained through fraud, the action to annul the contract is subject to a prescriptive
period of four years from the time of the discovery of the fraud. The time of discovery
is the date when the deed of sale was registered with the Register of Deeds because
registration constitutes constructive notice to the world.
Adoracion Redondo vs. Angelina Jimenez, G.R. No. 161479, October 18, 2007
The action for annulment must be brought within four (4) years from the time the
intimidation, violence or undue influence ceases, or four (4) years from the time of the
discovery of the mistake or fraud.
Where the basis of complaint for reconveyance is not fraud but threat, duress and
intimidation, the 4-year prescriptive period is reckoned from the ouster of Pres.
Marcos.
It is true that an action for reconveyance of real property resulting from fraud may
be barred by the statute of limitations, which requires that the action shall be filed
within four (4) years from the discovery of the fraud. The RTC, however, seemed to
have overlooked the fact that the basis of respondents' complaint for reconveyance is
not fraud but threat, duress and intimidation, allegedly employed by Marcos' cronies
upon the relatives of the Montanos while the latter were on self-exile. In fact, fraud
was neither specifically alleged nor remotely implied in the complaint. In the
circumstances prevailing in this case, the threat or intimidation upon respondents is
deemed to have ceased only upon the ouster of then President Marcos from power on
February 21, 1986. The four-year prescriptive period must, therefore, be reckoned
from the said date.
Associated Bank vs. Sps. Justiniano, Sr. and Ligaya Montano, et al., G.R. No. 166383,
October 16, 2009
Art. 1397 - Action for annulment of contracts may be instituted by all who are
thereby obliged principally or subsidiarily
Samahan Ng Magsasaka Sa San Josep vs. Marietta Valisno, G.R. No. 158314, June 3,
2004
Claudio Delos Reyes vs. Court of Appeals, G.R. No. 129103, September 3, 1999
Earth Minerals Exploration, Inc. vs. Catalino Macaraig, Jr., G.R. No. 78569, February
11, 1991
Angelina J. Malabanan vs. Gaw Ching, G.R. No. 74938-39, January 17, 1990
House Int'l. Building Tenants Association, Inc. vs. Intermediate Appellate Court, G.R.
No. 75287, June 30, 1987
Art. 1398 - When the obligation is annulled
If a voidable contract is annulled, the restoration of what has been given is proper.
Art. 1400 - When object of contract is lost
Traders Royal Bank vs. Court of Appeals, G.R. No. 114299 & 118862, March 9, 2000
Art. 1403 - Unenforceable contracts
Gregorio F. Averia vs. Domingo Averia, G.R. No. 141877, August 13, 2004
Antonio K. Litonjua vs. Mary Ann Grace Fernandez, G.R. No. 148116, April 14, 2004
Sps. Constante & Azucena Firme vs. Bukal Enterprises and Dev't. Corp., G.R. No.
146608, October 23, 2003
Rosencor Development Corporation vs. Paterno Inquing, G.R. No. 140479, March 8,
2001
Genaro Cordial vs. David Miranda, G.R. No. 135495, December 14, 2000
Viewmaster Construction Corp. vs. Allen C. Roxas, G.R. No. 133576, July 13, 2000
Mactan Cebu Int'l. Airport Authority vs. Court of Appeals, G.R. No. 121506, October 30,
1996
Heirs of Mariano Lagutan vs. Severina Icao, G.R. No. 58057, June 30, 1993
Heirs of Cecilio Claudel vs. Court of Appeals, G.R. No. 85240, July 12, 1991
Suga Sotto Yuvienco vs. Auxencio C. Dacuycuy, G.R. No. L-55048, May 27, 1981
The purpose of the statute is to prevent fraud and perjury in the enforcement of
obligations depending for their evidence on the unassisted memory of witnesses by
requiring certain enumerated contracts and transactions to be evidenced by a writing
signed by the party to be charged. It was not designed to further or perpetuate fraud.
Accordingly, its application is limited. It makes only ineffective actions for specific
performance of the contracts covered by it; it does not declare them absolutely void
and of no effect.
Asia Production Co., Inc. vs. Ernani Cruz Paño, G.R. No. 51058, January 27, 1992
[T]he Statute of Frauds found in paragraph (2), Article 1403 of the Civil Code,
requires for enforceability certain contracts enumerated therein to be evidenced by
some note or memorandum. The term "Statute of Frauds" is descriptive of statutes that
require certain classes of contracts to be in writing; and that do not deprive the parties
of the right to contract with respect to the matters therein involved, but merely
regulate the formalities of the contract necessary to render it enforceable.
Municipality of Hagonoy, Bulacan, et al. vs. Simeon P. Dumdum, Jr., et al., G.R. No.
168289, March 22, 2010
Art. 1405 - Contracts infringing Statute of Frauds; how ratified
Gregorio F. Averia vs. Domingo Averia, G.R. No. 141877, August 13, 2004
Severina San Miguel vs. Court of Appeals, G.R. No. 136054, September 5, 2001
Art. 1409 - Void or inexistent contracts
Sps. Edgardo and Natividad Fidel vs. Court of Appeals, et al., G.R. No. 168263, July 21,
2008
Mansueto Cuaton vs. Rebecca Salud, G.R. No. 158382, January 27, 2004
AF Realty & Development vs. Dieselman Freight Services, G.R. No. 111448, January
16, 2002
Philippine Commercial International Bank vs. Court of Appeals, G.R. No. 97785, March
29, 1996
Leandro Oliver vs. Court of Appeals, G.R. No. 107069, July 21, 1994
Paterno J. Ouano vs. Court of Appeals, G.R. No. 40203, August 21, 1990
General rule on "in pari delicto."
Generally, parties to a void agreement cannot expect the aid of the law; the courts
leave them as they are, because they are deemed in pari delicto or "in equal fault." In
pari delicto is "a universal doctrine which holds that no action arises, in equity or at
law, from an illegal contract; no suit can be maintained for its specific performance,
or to recover the property agreed to be sold or delivered, or the money agreed to be
paid, or damages for its violation; and where the parties are in pari delicto, no
affirmative relief of any kind will be given to one against the other."
Exceptions to the "in pari delicto" rule.

This rule, however, is subject to exceptions that permit the return of that which may
have been given under a void contract to: (a) the innocent party (Arts. 1411-1412,
Civil Code); (b) the debtor who pays usurious interest (Art. 1413, Civil Code); (c) the
party repudiating the void contract before the illegal purpose is accomplished or
before damage is caused to a third person and if public interest is subserved by
allowing recovery (Art. 1414, Civil Code); (d) the incapacitated party if the interest of
justice so demands (Art. 1415, Civil Code); (e) the party for whose protection the
prohibition by law is intended if the agreement is not illegal per se but merely
prohibited and if public policy would be enhanced by permitting recovery (Art. 1416,
Civil Code); and (f) the party for whose benefit the law has been intended such as in
price ceiling laws (Art. 1417, Civil Code) and labor laws (Arts. 1418-1419, Civil
Code).
Stipulations on usurious interest contrary to morals, hence void from the beginning
Stipulations authorizing iniquitous or unconscionable interests are contrary to

morals, if not against the law. Under Article 1409 of the Civil Code, these contracts
are inexistent and void from the beginning. They cannot be ratified nor the right to set
up their illegality as a defense be waived. The nullity of the stipulation on the usurious
interest does not, however, affect the lender's right to recover the principal of the loan.
Nor would it affect the terms of the real estate mortgage. The right to foreclose the
mortgage remains with the creditors, and said right can be exercised upon the failure
of the debtors to pay the debt due. The debt due is to be considered without the
stipulation of the excessive interest. A legal interest of 12% per annum will be added
in place of the excessive interest formerly imposed.
Heirs of Zoilo Espiritu, et al. vs. Sps. Maximo and Paz Landrito, G.R. No. 169617, April
3, 2007
Parties to a void agreement cannot expect the aid of the law
It is well-settled that parties to a void agreement cannot expect the aid of the law;
the courts leave them as they are, because they are deemed in pari delicto or "in equal
fault". No suit can be maintained for its specific performance, or to recover the
property agreed to be sold or delivered, or the money agreed to be paid, or damages
for its violation, and no affirmative relief of any kind will be given to one against the
other. Each must bear the consequences of his own acts. They will be left where they
have placed themselves since they did not come into court with clean hands.
Pedro T. Bercero vs. Capitol Dev't. Corp., G.R. No. 154765, March 29, 2007
A contract is inexistent and void from the very beginning when (i) its cause, object
or purpose is contrary to law, morals, good customs, public order or public policy; (ii)
it is absolutely simulated or fictitious; (iii) its cause or object did not exist at the time
of the transaction; (iv) its object is outside the commerce of men; (v) it contemplates
an impossible service; (vi) the intention of the parties relative to the principal object
of the contract cannot be ascertained; or (vii) it is expressly prohibited or declared
void by law.
Sps. Edgardo and Natividad Fidel vs. Court of Appeals, et al., G.R. No. 168263, July 21,
2008
Rolex Suplico vs. NEDA, et al., G.R. Nos. 178830, 179317 and 179613, July 14, 2008
James Svendsen vs. People of the Philippines, G.R. No. 175381, February 26, 2008
The supposed vendor's signature having been proved to be a forgery, the instrument
is totally void or inexistent as "absolutely simulated or fictitious" under Article 1409
of the Civil Code.
Sps. Patricio and Myrna Bernales vs. Heirs of Julian Sambaan, G.R. No. 163271,
January 15, 2010
The argument that the Director of Lands had delegated authority to approve
contracts of sale and deeds of conveyances over friar lands ignores the consistent
ruling of this Court in controversies involving friar lands. The aforementioned
presidential/executive issuances notwithstanding, this Court held in Solid State
Multi-Products Corporation v. CA, Liao v. Court of Appeals, and Alonso v. Cebu
Country Club that approval of the Secretary of Agriculture and Commerce (later the
Natural Resources) is indispensable to the validity of sale of friar land pursuant to
Sec. 18 of Act No. 1120 and that the procedure laid down by said law must be strictly
complied with. As to the applicability of Art. 1317 of the Civil Code, we maintain that
contracts of sale lacking the approval of the Secretary fall under the class of void and
inexistent contracts enumerated in Art. 1409 which cannot be ratified. Section 18 of
Act No. 1120 mandated the approval by the Secretary for a sale of friar land to be
valid.
Severino M. Manotok IV, et al. vs. Heirs of Homer L. Barque, G.R. Nos. 162335 &
162605, March 6, 2012
Banco Filipino cannot demand the reconveyance of the subject properties in the
present cases; neither can any affirmative relief be accorded to one party against the
other since they have been found to have acted in pari delicto . . . Clearly, the Bank
was well aware of the limitations on its real estate holdings under the General
Banking Act and that its "warehousing agreement" with Tala was a scheme to
circumvent the limitation.
Banco Filipino Savings and Mortgage Bank v. Tala Realty Services Corp., G.R. Nos.
158866, 181933 & 187551, September 9, 2013, citing Tala Realty Services Corporation
v. Banco Filipino Savings & Mortgage Bank, G.R. No. 137533, November 22, 2002
Art. 1410 - Action or defense for declaration of inexistence of a contract does

not prescribe
Natividad Bautista-Borja vs. Iluminada Bautista, et al., G.R. No. 136197, December 10,
2008
Solidstate Multi-Products Corp. vs. Sps. Victor and Erlinda Villaverde, G.R. No. 175118,
July 21, 2008
Maria Cabotaje vs. Sps. Sotero Pudunan and Maria Rivera, G.R. No. 134712, August
13, 2004
Felix Gochan and Sons Realty Corp. vs. Heirs of Raymundo Baba, G.R. No. 138945,
August 19, 2003
Private Development Corp. of the Phils. vs. Intermediate Appellate Court, G.R. No.
73198, Sept. 2, 1992
Narciso Buenaventura vs. Court of Appeals, G.R. No. 50837, December 28, 1992
When there is a showing of such illegality [forged deed], the property registered is
deemed to be simply held in trust for the real owner by the person in whose name it is
registered, and the former then has the right to sue for the reconveyance of the
property. The action for the purpose is also imprescriptible, and as long as the land
wrongfully registered under the Torrens system is still in the name of the person who
caused such registration, an action in personam will lie to compel him to reconvey the
property to the real owner.
Heirs of Rosa and Cirila Dumaliang vs. Damiano Serban, et al., G.R. No. 155133,
February 21, 2007
Where there is no consent given by one party in a purported contract, such contract
was not perfected; therefore, there is no contract to speak of… This being so, the
action based on said deed of sale shall not prescribe.
Mary Ann Deheza-Inamarga vs. Celenia C. Alano, et al., G.R. No. 171321, December
18, 2008
The action or defense for the declaration of the inexistence of a contract does not
prescribe.
Solidstate Multi-Products Corp. vs. Sps. Victor and Erlinda Villaverde, G.R. No. 175118,
July 21, 2008
According to Article 1410, "the action or defense for the declaration of the
inexistence of a contract does not prescribe". The inexistence of a contract is
permanent and incurable which cannot be cured either by ratification or by
prescription.
Sps. Patricio and Myrna Bernales vs. Heirs of Julian Sambaan, G.R. No. 163271,
January 15, 2010
Art. 1411 - When nullity proceeds from illegality of the cause or object of the
contract and act constitutes a criminal offense
Colito T. Pajuyo vs. Court of Appeals, G.R. No. 146364, June 3, 2004
Veronico Tenebro vs. Court of Appeals, G.R. No. 150758, February 18, 2004
Eduardo Arroyo, Jr. vs. Court of Appeals, G.R. No. 96602, November 19, 1991
Art. 1412 - If act consisting the unlawful or forbidden cause does not
constitute a criminal offense
Sps. Rufino and Emerita Angel vs. Simplicio Aledo, G.R. No. 145031, January 22, 2004
Cavite Development Bank vs. Cyrus Lim, G.R. No. 131679, February 1, 2000
City of Angeles vs. Court of Appeals, G.R. No. 97882, August 28, 1996
Nora Lumibao vs. Intermediate Appellate Court, G.R. No. 64677, September 13, 1990
A void contract is equivalent to nothing; it produces no civil effect. It does not

create, modify, or extinguish a juridical relation. Parties to a void agreement cannot
expect the aid of the law; the courts leave them as they are, because they are deemed
in pari delicto or in equal fault. To this rule, however, there are exceptions that permit
the return of that which may have been given under a void contract. One of the
exceptions is found in Article 1412 of the Civil Code.
Sps. Hadji Hasan Madlawi and Hadja Fatima Gaguil Magoyag vs. Hadji Abubacar
Maruhom, G.R. No. 179743, August 2, 2010
Art. 1413 - Recovery of payment made on usurious interest
This Court has consistently held that for sometime now, usury has been legally
non-existent and that interest can now be charged as lender and borrower may agree
upon. In fact, Section 1 of Central Bank Circular No. 905, Series of 1982, which took
effect on January 1, 1983, expressly provides that "[t]he rate of interest, including
commissions, premiums, fees and other charges, on a loan or forbearance of any
money, goods, or credits, regardless of maturity and whether secured or unsecured,
that may be charged or collected by any person, whether natural or juridical, shall not
be subject to any ceiling prescribed under or pursuant to the Usury Law, as amended."
Nonetheless, this Court has also held in a number of cases, that nothing in the circular
grants lenders carte blanche authority to raise interest rates to levels which will either
enslave their borrowers or lead to a hemorrhaging of their assets. Thus, the stipulated
interest rates are illegal if they are unconscionable.
Sps. Nelson and Myra Villanueva vs. Court of Appeals, et al., G.R. No. 163433, August
22, 2011
Art. 1414 - When contract may be repudiated
Art. 1416 - When agreement is prohibited
G.G. Sportswear Mfg. Corp. vs. World Class Properties, Inc., G.R. No. 182720, March
2, 2010
Alfred Fritz Frenzel vs. Ederlina P. Catito, G.R. No. 143958, July 11, 2003
Art. 1431 - Estoppel
Equitable PCI Banking Corp., et al. vs. RCBC Capital Corporation, G.R. No. 182248,
December 18, 2008
Monica B. Egoy vs. National Labor Relations Commission, et al., G.R. No. 152325,
August 28, 2008
British American Tobacco vs. Jose Isidro N. Camacho, et al., G.R. No. 163583, August
20, 2008
Standard Chartered Bank Employees Union vs. Ma. Nieves R. Confesor, G.R. No.
114974, June 16, 2004
Benjamin Navarro vs. Second Laguna Development Bank, G.R. No. 129428, February
27, 2003
Adelaida S. Maneclang vs. Juan T. Baun, G.R. No. 27876, April 22, 1992
Like the related principles of volenti non fit injuria (consent to injury), waiver and
acquiescence, estoppel finds its origin generally in the equitable notion that one may
not change his position, and profit from his own wrongdoing when he has caused
another to rely on his former representations (Sy vs. Central Bank, No. L-41480, April
30, 1976)
Servicewide Specialists, Inc. vs. Intermediate Appellate Court, G.R. No. 74553, June 8,
1989
Estoppel, an equitable principle rooted in natural justice, prevents persons from

going back on their own acts and representations, to the prejudice of others who have
relied on them.
British American Tobacco vs. Jose Isidro n. Camacho, et al., G.R. No. 163583, August
20, 2008
Philippine National Bank vs. Giovanni Palma, G.R. No. 157279, August 9, 2005
The doctrine of estoppel is based upon the grounds of public policy, fair dealing,
good faith, and justice; and its purpose is to forbid one to speak against one's own
acts, representations, or commitments to the injury of one to whom they were directed
and who reasonably relied on them.
Equitable PCI Banking Corp., et al. vs. RCBC Capital Corp., G.R. No. 182248,
December 18, 2008
Estoppel, an equitable principle rooted in natural justice, prevents persons from

going back on their own acts and representations, to the prejudice of others who have
relied on them.
British American Tobacco vs. Jose Isidro N. Camacho, et al., G.R. No. 163583, August
20, 2008
Where a party, by his or her deed or conduct, has induced another to act in a
particular manner, estoppel effectively bars the former from adopting an inconsistent
position, attitude or course of conduct that causes loss or injury to the latter. The
doctrine of estoppel is based upon the grounds of public policy, fair dealing, good
faith and justice, and its purpose is to forbid one to speak against his own act,
representations, or commitments to the injury of one to whom they were directed and
who reasonably relied thereon.
Sps. William and Rebecca Genato vs. Rita Viola, G.R. No. 169706, February 5, 2010
Art. 1432 - Principles of estoppel
Santiago Syjuco, Inc. vs. Jose P. Castro, G.R. No. 70403, July 7, 1989
Art. 1434 - When a person who is not the owner of a thing sells or alienates
and delivers it
Jessie V. Pisueña vs. Petra Unating, G.R. No. 132803, August 31, 1999
Art. 1440 - Definitions
Definition of "trust."
In the early case of Gayondato v. Treasurer of the Philippine Islands, 49 Phil. 244
(1926), this Court defines trust, in its technical sense, as "a right of property, real or
personal, held by one party for the benefit of another." Differently stated, a trust is "a
fiduciary relationship with respect to property, subjecting the person holding the same
to the obligation of dealing with the property for the benefit of another person."
Gilbert G. Guy vs. Court of Appeals, et al., G.R. Nos. 165849, 170185, 170186, 171066
& 176650, December 10, 2007
A trust is the legal relationship between one person having an equitable ownership
of property and another person owning the legal title to such property, the equitable
ownership of the former entitling him to the performance of certain duties and the
exercise of certain powers by the latter.
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Art. 1441 - Express and Implied Trusts
Two kinds of trust — express or implied
Trusts are either express or implied. Express or direct trusts are created by the
direct and positive acts of the parties, by some writing or deed, or will, or by oral
declaration in words evincing an intention to create a trust. Implied trusts — also
called "trusts by operation of law," "indirect trusts" and "involuntary trusts" — arise
by legal implication based on the presumed intention of the parties or on equitable
principles independent of the particular intention of the parties. They are those which,
without being expressed, are deducible from the nature of the transaction as matters of
intent or, independently of the particular intention of the parties, as being inferred
from the transaction by operation of law basically by reason of equity.
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Two kinds of implied trust — constructive and resulting
Implied trusts are further classified into constructive trusts and resulting trusts.
Constructive trusts, on the one hand, come about in the main by operation of law and
not by agreement or intention. They arise not by any word or phrase, either expressly
or impliedly, evincing a direct intention to create a trust, but one which arises in order
to satisfy the demands of justice. Also known as trusts ex maleficio, trusts ex delicto
and trusts de son tort, they are construed against one who by actual or constructive
fraud, duress, abuse of confidence, commission of a wrong or any form of
unconscionable conduct, artifice, concealment of questionable means, or who in any
way against equity and good conscience has obtained or holds the legal right to
property which he ought not, in equity and good conscience, hold and enjoy. They are
aptly characterized as "fraud-rectifying trust," imposed by equity to satisfy the
demands of justice and to defeat or prevent the wrongful act of one of the parties.
Constructive trusts are illustrated in Articles 1450, 1454, 1455 and 1456.
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Resulting trusts
On the other hand, resulting trusts arise from the nature or circumstances of the
consideration involved in a transaction whereby one person becomes invested with
legal title but is obligated in equity to hold his title for the benefit of another. This is
based on the equitable doctrine that valuable consideration and not legal title is
determinative of equitable title or interest and is always presumed to have been
contemplated by the parties. Such intent is presumed as it is not expressed in the
instrument or deed of conveyance and is to be found in the nature of their transaction.
Implied trusts of this nature are hence describable as "intention-enforcing trusts."
Specific examples of resulting trusts may be found in the Civil Code, particularly
Articles 1448, 1449, 1451, 1452 and 1453.
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While resulting trusts generally arise on failure of an express trust or of the purpose
thereof, or on a conveyance to one person upon a consideration from another
(sometimes referred to as a "purchase-money resulting trust"), they may also be
imposed in other circumstances such that the court, shaping judgment in its most
efficient form and preventing a failure of justice, must decree the existence of such a
trust. A resulting trust, for instance, arises where, there being no fraud or violation of
the trust, the circumstances indicate intent of the parties that legal title in one be held
for the benefit of another. It also arises in some instances where the underlying
transaction is without consideration, such as that contemplated in Article 1449 of the
Civil Code. Where property, for example, is gratuitously conveyed for a particular
purpose and that purpose is either fulfilled or frustrated, the court may affirm the
resulting trust in favor of the grantor or transferor, where the beneficial interest in
property was not intended to vest in the grantee.
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Trust pursuit rule
There is a fundamental principle in agency that where certain property

entrusted to an agent and impressed by law with a trust in favor of the principal is
wrongfully diverted, such trust follows the property in the hands of a third person and
the principal is ordinarily entitled to pursue and recover it so long as the property can
be traced and identified, and no superior equities have intervened. This principle is
actually one of trusts, since the wrongful conversion gives rise to a constructive trust
which pursues the property, its product or proceeds, and permits the beneficiary to
recover the property or obtain damages for the wrongful conversion of the property.
Aptly called the "trust pursuit rule," it applies when a constructive or resulting trust
has once affixed itself to property in a certain state or form.
Hence, a trust will follow the property — through all changes in its state and form
as long as such property, its products or its proceeds, are capable of identification,
even into the hands of a transferee other than a bona fide purchaser for value, or
restitution will be enforced at the election of the beneficiary through recourse against
the trustee or the transferee personally. This is grounded on the principle in property
law that ownership continues and can be asserted by the true owner against any
withholding of the object to which the ownership pertains, whether such object of the
ownership is found in the hands of an original owner or a transferee, or in a different
form, as long as it can be identified. Accordingly, the person to whom is made a
transfer of trust property constituting a wrongful conversion of the trust property and a
breach of the trust, when not protected as a bona fide purchaser for value, is himself
liable and accountable as a constructive trustee. The liability attaches at the moment
of the transfer of trust property and continues until there is full restoration to the
beneficiary. Thus, the transferee is charged with, and can be held to the performance
of the trust, equally with the original trustee, and he can be compelled to execute a
reconveyance.
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Art. 1443 - No express trusts concerning an immovable or any interest therein

may be proved by parol evidence
Be it noted that Article 1443 of the Civil Code which states "No express trusts
concerning an immovable or any interest therein may be proved by parol evidence,"
refers merely to enforceability, not validity of a contract between the parties.
Otherwise stated, for purposes of validity between the parties, an express trust
concerning an immovable does not have to be in writing. Thus, Article 1443 may be
said to be an extension of the Statute of Frauds. The action to compel the trustee to
convey the property registered in his name for the benefit of the cestui for trust does
not prescribe. If at all, it is only when the trustee repudiates the trust that the period of
prescription may run (Enriquez v. Court of Appeals, G.R. No. L-48978, 27 May
1981).
Maria G. De La Cruz vs. Court of Appeals, G.R. No. 76590, February 26, 1990
An express trust differs from the implied variety in terms of the manner of proving
its existence.
Irene Marcos-Araneta, et al. vs. Court of Appeals, et al., G.R. No. 154096, August 22,
2008
Art. 1444 - Express trust
No particular form of words or conduct is necessary for the manifestation of

intention to create a trust. It is possible to create a trust without using the word "trust"
or "trustee". Conversely, the mere fact that these words are used does not necessarily
indicate an intention to create a trust. The question in each case is whether the trustor
manifested an intention to create the kind of relationship which to lawyers is known as
trust. It is immaterial whether or not he knows that the relationship which he intends
to create is called a trust, and whether or not he knows the precise characteristics of
the relationship which is called a trust.
Heirs of Maximo Labanon, et al. vs. Heirs of Constancio Labanon, et al., G.R. No.
160711, August 14, 2007
An express trust is created by the direct and positive acts of the parties, by some
writing or deed or by words evidencing an intention to create a trust; the use of the
word trust is not required or essential to its constitution, it being sufficient that a trust
is clearly intended.
160711, August 14, 2007
Estate of Edward Miller Grimm v. Estate of Charles Parsons and Patrick C. Parsons,
G.R. No. 159810, October 9, 2006
Unrepudiated written express trusts are imprescriptible.
160711, August 14, 2007
Bueno vs. Reyes, No. L-22587, April 28, 1969
Express trusts prescribe 10 years from the repudiation of the trust

160711, August 14, 2007
Benigna Secuya vs. De Selma, G.R. No. 136021, February 22, 2000
Escay vs. Court of Appeals, No. L-37504, December 18, 1974
Art. 1446 - Express trust must be accepted by the beneficiary
An express trust differs from the implied variety in terms of the manner of proving
its existence.
Irene Marcos-Araneta, et al. vs. Court of Appeals, et al., G.R. No. 154096, August 22,
2008
Art. 1448 - Implied trust
Alejandro B. Ty vs. Sylvia S. Ty, G.R. No. 165696, April 30, 2008
Rodolfo Tigno vs. Court of Appeals, G.R. No. 110115, October 8, 1997
Rodolfo Morales vs. Court of Appeals, G.R. No. 117228, June 19, 1997
Ricardo and Milagros Huang vs. Court of Appeals, G.R. No. 108525, September 13,
1994
Herminia L. Ramos vs. Court of Appeals, G.R. No. 108121, May 10, 1994
Emilia O'Laco vs. Valentin Co Cho Chit, G.R. No. 58010, March 31, 1993
Art. 1448, last sentence - When no trust is implied by the law

Bernardo De Los Santos vs. Faustino B. Reyes, G.R. No. 45027, January 27, 1992
If the person to whom the title is conveyed is the child of the one paying the price
of the sale, NO TRUST IS IMPLIED BY LAW. The law, instead, disputably
presumes a donation in favor of the child.
Alejandro B. Ty vs. Sylvia S. Ty, G.R. No. 165696, April 30, 2008
Art. 1449 - Implied trust when donation is made to a person
Natividad P. Nazareno vs. Court of Appeals, G.R. No. 138842, October 18, 2000
Horacio G. Adaza vs. Court of Appeals, G.R. No. 47354, March 21, 1989
Art. 1450 - Trust is created if price is paid for benefit of another and
conveyance is made to payor
Imelda A. Nakpil vs. Intermediate Appellate Court, G.R. No. 74449, August 20, 1993
Art. 1451 - Implied trust when land passes by succession to any person who
causes legal title to be put in the name of another
Jovita Yap Ancog vs. Court of Appeals, G.R. No. 112260, June 30, 1997
Emilia O'Laco vs. Valentin Co Cho Chit, G.R. No. 58010, March 31, 1993
Art. 1452 - Two or more persons purchase property and by common consent
legal title is taken in the name of one of them for the benefit of all
Feliciano Nito vs. Court of Appeals, G.R. No. 102657, August 9, 1993
Restituto Ceniza vs. Court of Appeals, G.R. No. 46345, January 30, 1990
Art. 1456 - Property acquired through mistake or fraud
Effect of Acquisition of Property through Fraud
Article 1456 of the Civil Code provides that a person acquiring property through
fraud becomes, by operation of law, a trustee of an implied trust for the benefit of the
real owner of the property. An action for reconveyance based on an implied trust
prescribes in ten years, the reckoning point of which is the date of registration of the
deed or the date of issuance of the certificate of title over the property.
Ramon B. Brito, Sr. vs. Severino D. Dianala, et al., G.R. No. 171717, December 15,
2010
In essence, an action for reconveyance respects the incontrovertibility of the decree

of registration but seeks the transfer of the property to its rightful and legal owner on
the ground of its having been fraudulently or mistakenly registered in another person's
name. There is no special ground for an action for reconveyance, for it is enough that
the aggrieved party asserts a legal claim in the property superior to the claim of the
registered owner, and that the property has not yet passed to the hands of an innocent
purchaser for value.
Heirs of Sps. Teofilo and Elisa Reterta vs. Sps. Lorenzo and Virginia Mores, G.R. No.
159941, August 17, 2011
Prescription of Action
The Court made a clear distinction in Olviga: when the plaintiff in such action is
not in possession of the subject property, the action prescribes in ten years from the
date of registration of the deed or the date of the issuance of the certificate of title
over the property. When the plaintiff is in possession of the subject property, the
action, being in effect that of quieting of title to the property, does not prescribe.
Heirs of Domingo Valientes vs. Reinerio (Abraham) B. Ramas, et al., G.R. No. 157852,
December 15, 2010, citing Heirs of Jose Olviga v. Court of Appeals, G.R. No. 104813,
October 21, 1993
Richard B. Lopez vs. Court of Appeals, et al., G.R. No. 157784, December 16, 2008
Heirs of Pomposa Saludares vs. Court of Appeals, G.R. No. 128254, January 16, 2004
Sps. Godofredo and Carmen Alfredo vs. Sps. Armando and Adelia Borras, G.R. No.
144225, June 17, 2003
Tiburcio Samonte vs. Court of Appeals, G.R. No. 104223, July 12, 2001
Marino Adriano vs. Court of Appeals, G.R. No. 124118, March 27, 2000
Purita Salvatierra vs. Court of Appeals, G.R. No. 107797, August 26, 1996
Edilberto Noel vs. Court of Appeals, G.R. Nos. 59550 & 60636, January 11, 1995
Magdalena Llenares vs. Court of Appeals, G.R. No. 98709, May 13, 1993
Philippine National Bank vs. Court of Appeals, G.R. No. 97995, January 21, 1993
Andres Sumaoang vs. Regional Trial Court, Branch XXXI, Guimba, Nueva Ecija, G.R.
No. 78173, October 26, 1992
Canuta Pagkatipunan vs. Intermediate Appellate Court, G.R. No. 70722, July 3, 1991
Vicmar Development Corp. vs. Court of Appeals, G.R. No. 81547, May 21, 1990
Elena J. Tomas vs. Court of Appeals, G.R. No. 79328, May 21, 1990
Celedonio Manzanilla vs. Court of Appeals, G.R. No. 75342, March 15, 1990
Registration of property by one person in his or her name, whether by mistake or

fraud, the real owner being another person, impresses upon the title so acquired the
character of a constructive trust for the real owner, which would justify an action for
reconveyance.
Heirs of Zoilo Espiritu, et al. vs. Sps. Maximo and Paz Landrito, G.R. No. 169617, April
3, 2007
If property is acquired through mistake or fraud, the person obtaining it is, by force
of law, considered a trustee of an implied trust for the benefit of the person from
whom the property comes. An action for reconveyance based on implied trust
prescribes in 10 years as it is an obligation created by law, to be counted from the date
of issuance of the Torrens title over the property. This rule, however, applies only
when the plaintiff or the person enforcing the trust is not in possession of the property.
PNB vs. Ciriaco Jumamoy, et al., G.R. No. 169901, August 3, 2011
A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense
for in a typical trust, confidence is reposed in one person who is named a trustee for
the benefit of another who is called the cestui que trust, respecting property which is
held by the trustee for the benefit of the cestui que trust. A constructive trust, unlike
an express trust, does not emanate from, or generate a fiduciary relation. While in an
express trust, a beneficiary and a trustee are linked by confidential or fiduciary
relations, in a constructive trust, there is neither a promise nor any fiduciary relation to
speak of and the so-called trustee neither accepts any trust nor intends holding the
property for the beneficiary.
Catalina Buan vda. De Esconde vs. Court of Appeals, G.R. No. 103635, February 1,
1996
15, 2011
Hence, a trust will follow the property — through all changes in its state and form
as long as such property, its products or its proceeds, are capable of identification,
even into the hands of a transferee other than a bona fide purchaser for value, or
restitution will be enforced at the election of the beneficiary through recourse against
the trustee or the transferee personally. This is grounded on the principle in property
law that ownership continues and can be asserted by the true owner against any
withholding of the object to which the ownership pertains, whether such object of the
ownership is found in the hands of an original owner or a transferee, or in a different
form, as long as it can be identified. Accordingly, the person to whom is made a
transfer of trust property constituting a wrongful conversion of the trust property and a
breach of the trust, when not protected as a bona fide purchaser for value, is himself
liable and accountable as a constructive trustee. The liability attaches at the moment
of the transfer of trust property and continues until there is full restoration to the
beneficiary. Thus, the transferee is charged with, and can be held to the performance
of the trust, equally with the original trustee, and he can be compelled to execute a
reconveyance. This scenario is characteristic of a constructive trust imposed by Article
1456 of the Civil Code, which impresses upon a person obtaining property through
mistake or fraud the status of an implied trustee for the benefit of the person from
whom the property comes.
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Art. 1457 - An implied trust may be proved by oral evidence.
Intention — although only presumed, implied or supposed by law from the nature
of the transaction or from the facts and circumstances accompanying the transaction,
particularly the source of the consideration — is always an element of a resulting trust
and may be inferred from the acts or conduct of the parties rather than from direct
expression of conduct. Certainly, intent as an indispensable element, is a matter that
necessarily lies in the evidence, that is, by evidence, even circumstantial, of statements
made by the parties at or before the time title passes. Because an implied trust is
neither dependent upon an express agreement nor required to be evidenced by writing,
Article 1457 of our Civil Code authorizes the admission of parol evidence to prove
their existence. Parol evidence that is required to establish the existence of an implied
trust necessarily has to be trustworthy and it cannot rest on loose, equivocal or
indefinite declarations.
15, 2011
Art. 1458 - Contract of sale
Rogelia Daclag, et al. vs. Elino Macahilig, et al., G.R. No. 159578, July 28, 2008
Hernando R. Peñalosa vs. Severino C. Santos, G.R. No. 133749, August 23, 2001
Juan San Andres vs. Vicente Rodriguez, G.R. No. 135634, May 31, 2000
Henry Co vs. Court of Appeals, G.R. No. 112330, August 17, 1999
City of Cebu vs. Heirs of Candido Rubi, G.R. No. 128579, April 29, 1999
Equatorial Realty Devt., Inc. vs. Mayfair Theater, Inc., G.R. No. 106063, November 21,
1996
Toyota Shaw, Inc. vs. Court of Appeals, G.R. No. 116650, May 23, 1995
Ang Yu Asuncion vs. Court of Appeals, G.R. No. 109125, December 2, 1994
People of the Phils. vs. Normando L. Del Rosario, G.R. No. 109633, July 20, 1994
Schmid & Oberly, Inc. vs. RJL Martinez Fishing Corp., G.R. No. 75198, October 18,
1988
A contract of sale is a consensual contract and is perfected at the moment there is a

meeting of the minds upon the thing which is the object of the contract and upon the
price. From that moment the parties may reciprocally demand performance subject to
the provisions of the law governing the form of contracts. The elements of a valid
contract of sale under Article 1458 of the Civil Code are (1) consent or meeting of the
minds; (2) determinate subject matter and (3) price certain in money or its equivalent.
Roberto Z. Laforteza vs. Alonzo Machuca , G.R. No. 137552, June 16, 2000
The principal obligation of a seller is to transfer the ownership of the property sold.
Rogelio Daclag, et al. vs. Elino Macahilig, et al., G.R. No. 159578, July 28, 2008
The elements of a valid contract of sale are: (1) consent or meeting of the minds;
(2) determinate subject matter; and (3) price certain in money or its equivalent.
Riosa v. Tabaco La Suerte Corp., G.R. No. 203786, October 23, 2013
The very essence of a contract of sale is the transfer of ownership in exchange for a
price paid or promised. In contrast, a contract to sell is defined as a bilateral contract
whereby the prospective seller, while expressly reserving the ownership of the
property despite delivery thereof to the prospective buyer, binds himself to sell the
property exclusively to the prospective buyer upon fulfillment of the condition agreed,
i.e., full payment of the purchase price. A contract to sell may not even be considered
as a conditional contract of sale where the seller may likewise reserve title to the
property subject of the sale until the fulfillment of a suspensive condition, because in
a conditional contract of sale, the first element of consent is present, although it is
conditioned upon the happening of a contingent event which may or may not occur.
Delfin Tan vs. Erlinda C. Benolirao, et al., G.R. No. 153820, October 16, 2009
In a conditional sale, as in a contract to sell, ownership remains with the vendor

and does not pass to the vendee until full payment of the purchase price. The full
payment of the purchase price partakes of a suspensive condition, and non-fulfillment
of the condition prevents the obligation to sell from arising. To differentiate, a deed of
sale is absolute when there is no stipulation in the contract that title to the property
remains with the seller until full payment of the purchase price.
Manuel Uy & Sons, Inc. v. Valbueco, Inc., G.R. No. 179594, September 11, 2013
As the Court said in Heirs of Cayetano Pangan and Consuelo Pangan v. Perreras
(G.R. No. 157374, August 27, 2009) the payment of the purchase price in a contract to
sell is a positive suspensive condition, the failure of which is not a breach but a
situation that results in the cancellation of the contract. Strictly speaking, therefore,
there can be no rescission or resolution of an obligation that is still non-existent due to
the non-happening of the suspensive condition.
Pilipino Telephone Corp. vs. Radiomarine Network (Smartnet) Phil., Inc., G.R. No.
160322, August 24, 2011
Based on the express terms and tenor of the Kasunduan at Katibayan, Degaños
received and accepted the items under the obligation to sell them in behalf of the
complainants ("ang mga hiyas (jewelries) na natatala sa ibaba nito upang ipagbili ko
sa kapakanan ng nasabing Ginang"), and he would be compensated with the
overprice as his commission ("Ang bilang kabayaran o pabuya sa akin ay ano mang
halaga na aking mapalabis na mga halagang nakatala sa ibaba nito."). Plainly, the
transaction was a consignment under the obligation to account for the proceeds of
sale, or to return the unsold items. As such, he was the agent of the complainants in
the sale to others of the items listed in the Kasunduan at Katibayan.
In contrast, according the first paragraph of Article 1458 of the Civil Code, one of
the contracting parties in a contract of sale obligates himself to transfer the ownership
of and to deliver a determinate thing, while the other party obligates himself to pay
therefor a price certain in money or its equivalent. Contrary to the contention of
Degaños, there was no sale on credit to him because the ownership of the items did
not pass to him.
Art. 1459 - Thing must be licit and vendor must have right to transfer
ownership
Heirs of Arturo Reyes vs. Elena Socco-Beltran, G.R. No. 176474, November 27, 2008
People of the Phils. vs. Elizabeth D. Ganguso, G.R. No. 115430, November 23, 1995
Under Article 1459 of the Civil Code on contracts of sale, "The thing must be licit
and the vendor must have a right to transfer ownership thereof at the time it is
delivered." The law specifically requires that the vendor must have ownership of the
property at the time it is delivered.
Heirs of Arturo Reyes vs. Elena Socco-Beltran, G.R. No. 176474, November 27, 2008
The thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered.
Art. 1461 - Things having potential existence
Heirs of Amparo del Rosario vs. Aurora O. Santos, G.R. No. L-46892, September 30,
1981
Art. 1461, second par. - Sale of mere hope or expectancy

Jose M. Javier vs. Court of Appeals, G.R. No. 48194, March 15, 1990
Art. 1462 - Subject of a contract of sale
Onapal Philippines Commodities, Inc. vs. Court of Appeals, G.R. No. 90707, February
1, 1993
Felix Danguilan vs. Intermediate Appellate Court, G.R. No. L-69970, November 28,
1988
Art. 1470 - Gross inadequacy of price
Sps. Bernardo Buenaventura and Consolacion Joaquin vs. Court of Appeals, G.R. No.
126376, November 20, 2003
Art. 1471 - Price is simulated
Felix Ting Ho, Jr., et al. vs. Vicente Teng Gui, G.R. No. 130115, July 16, 2008
Ida C. Labagala vs. Nicolasa T. Santiago, G.R. No. 132305, December 4, 2001
Art. 1473 - Fixing of the price can never be left to the discretion of one of the
contracting parties
Price Fixed by One of Contracting Parties, If Accepted by the Other, Gives Rise to
a Perfected Sale
A definite agreement as to the price is an essential element of a binding agreement

to sell personal or real property because it seriously affects the rights and obligations
of the parties. Price is an essential element in the formation of a binding and
enforceable contract of sale. The fixing of the price can never be left to the decision of
one of the contracting parties. But a price fixed by one of the contracting parties, if
accepted by the other, gives rise to a perfected sale.
Hyatt Elevators and Escalators Corp. vs. Cathedral Heights Building Complex Ass'n.
Inc., G.R. No. 173881, December 1, 2010, citing Boston Bank of the Philippines v.
Manalo, G.R. No. 158149, February 9, 2006
Art. 1475 - Contract of sale is perfected at the moment there is a meeting of

minds
Juan San Andres vs. Vicente Rodriguez, G.R. No. 135634, May 31, 2000
Regina P. Dizon vs. Court of Appeals, G.R. No. 122544, January 28, 1999
Leon Co vs. Court of Appeals, G.R. No. 123908, February 9, 1998
Toyota Shaw, Inc. vs. Court of Appeals, G.R. No. 116650, May 23, 1995
Lino R. Topacio vs. Court of Appeals, G.R. No. 102606, July 3, 1992
Benjamin Rodriguez vs. Court of Appeals, G.R. No. 84220, March 25, 1992
Sps. Julio D. Villamor and Marina Villamor vs. Court of Appeals, G.R. No. 97332,
October 10, 1991
1989
Art. 1477 - Ownership transferred to vendee upon actual or constructive

delivery
Lagrimas A. Boy vs. Court of Appeals, G.R. No. 125088, April 14, 2004
Art. 1478 - Ownership in the thing shall not pass to the purchaser until he has
fully paid the price
Sps. Ramon and Emma Reyes, et al. vs. Dominador Salvador, Sr., et al., G.R. No.
139047 & 139365, September 11, 2008
Art. 1479 - Promise to buy and sell a determinate thing for a price certain is
reciprocally demandable
Difference between an Option Contract and a Right of First Refusal
An option contract is entirely different and distinct from a right of first refusal in
that in the former, the option granted to the offeree is for a fixed period and at a
determined price. Lacking these two essential requisites, what is involved is only a
right of first refusal.
December 13, 2010
An Option Can Still Be Withdrawn, Even If Accepted, If Not Supported by Any

Consideration
Sanchez v. Rigos provided an interpretation of the said second paragraph of Article

1479 in relation to Article 1324. Thus: There is no question that under Article 1479 of
the new Civil Code "an option to sell," or "a promise to buy or to sell," as used in said
article, to be valid must be "supported by a consideration distinct from the price." This
is clearly inferred from the context of said article that a unilateral promise to buy or to
sell, even if accepted, is only binding if supported by consideration. In other words,
"an accepted unilateral promise can only have a binding effect if supported by a
consideration, which means that the option can still be withdrawn, even if accepted, if
the same is not supported by any consideration. Hence, it is not disputed that the
option is without consideration. It can therefore be withdrawn notwithstanding the
acceptance made of it by appellee.
It is true that under Article 1324 of the new Civil Code, the general rule regarding
offer and acceptance is that, when the offerer gives to the offeree a certain period to
accept, "the offer may be withdrawn at any time before acceptance" except when the
option is founded upon consideration, but this general rule must be interpreted as
modified by the provision of Article 1479 above referred to, which applies to "a
promise to buy and sell" specifically. As already stated, this rule requires that a
promise to sell to be valid must be supported by a consideration distinct from the
price.
December 13, 2010
Henry Co vs. Court of Appeals, G.R. No. 112330, August 17, 1999
Equatorial Realty Devt., Inc. vs. Mayfair Theater, Inc., G.R. No. 106063, November 21,
1996
Luz Ardena Salame vs. Court of Appeals, G.R. No. 104373, December 22, 1994
Federico Serra vs. Court of Appeals, G.R. No. 103338, January 4, 1994
Percelino Diamante vs. Court of Appeals, G.R. No. 51824, February 7, 1992
Trinidad Natino vs. Intermediate Appellate Court, G.R. No. 73573, May 23, 1991
Art. 1482 - Earnest money
San Miguel Properties Phil. vs. Alfredo Huang, G.R. No. 137290, July 31, 2000
Goldenrod, Inc. vs. Court of Appeals, G.R. No. 126812, November 24, 1998
Vicente Lim vs. Court of Appeals, G.R. No. 118347, October 24, 1996
Philippine National Bank vs. Court of Appeals, G.R. No. 119580, September 26, 1996
Lino R. Topacio vs. Court of Appeals, G.R. No. 102606, July 3, 1992
It is true that Article 1482 of the Civil Code provides that "Whenever earnest
money is given in a contract of sale, it shall be considered as part of the price and
proof of the perfection of the contract." However, this article speaks of earnest money
given in a contract of sale. In this case, the earnest money was given in a contract to
sell. The earnest money forms part of the consideration only if the sale is
consummated upon full payment of the purchase price. Now, since the earnest money
was given in a contract to sell, Article 1482, which speaks of a contract of sale, does
not apply.
Sps. Amparo and Onnie Serrano vs. Godofredo Caguiat, G.R. No. 139173, February
28, 2007
It is a statutory rule that whenever earnest money is given in a contract of sale, it

shall be considered as part of the price and as proof of the perfection of the contract.
(Article 1482, Civil Code) It constitutes an advance payment and must, therefore, be
deducted from the total price. Also, earnest money is given by the buyer to the seller
to bind the bargain.
Adelfa Properties, Inc. vs. Court of Appeals, G.R. No. 111238, January 25, 1995
Art. 1484 - Remedies of vendor in sale of personal property on installment
Leovillo C. Agustin vs. Court of Appeals, G.R. No. 107846, April 18, 1997
Zenaida M. Palma vs. Court of Appeals, G.R. No. 45158, June 2, 1994
Sps. Romulo De La Cruz vs. Asian Consumer and Industrial Finance Corp., G.R. No.
94828, September 18, 1992
Servicewide Specialists, Incorporated vs. Intermediate Appellate Court, G.R. No.

74553, June 8, 1989
The remedies provided for in Article 1484 of the Civil Code are alternative, not
cumulative. The exercise of one bars the exercise of the others. This limitation applies
to contracts purporting to be leases of personal property with option to buy by virtue
of the same Article 1485.
PCI Leasing and Finance, Inc. vs. Giraffe-X Creative Imaging, Inc., G.R. No. 142618,
July 12, 2007
Elisco Tool Manufacturing Corp. vs. Court of Appeals, G.R. No. 109966, May 31, 1999
The remedies under Article 1484 of the Civil Code are not cumulative but
alternative and exclusive, which means, as so held in Nonato vs. Intermediate
Appellate Court and Investor's Finance Corporation, that -" . . . Should the vendee or
purchaser of a personal property default in the payment of two or more of the agreed
installments, the vendor or seller has the option to avail of any of these three remedies
- either to exact fulfillment by the purchaser of the obligation, or to cancel the sale, or
to foreclose the mortgage on the purchased personal property, if one was constituted.
These remedies have been recognized as alternative, not cumulative, that the exercise
of one would bar the exercise of the others."
Daniel L. Borbon II vs. Servicewide Specialists, Inc., G.R. No. 106418, July 11, 1996
Art. 1486 - Stipulation that installments or rents paid shall not be returned to
the vendee or lessee is valid
People's Industrial and Commercial Corp. vs. Court of Appeals, G.R. No. 112733,
October 24, 1997
Art. 1491 - Who cannot acquire by purchase
In Re: Atty. Leon G. Maquera, BM 793, July 30, 2004
Regalado Daroy vs. Esteban Abecia, AC No. 3046, October 26, 1998
Thelma Arcenio vs. Virginia Pagorogon, AM MTJ-89-270, July 5, 1993
Paulino Valencia vs. Arsenio Fer. Cabanting, AC Nos. 1302, 1391 & 1543, April 26,
1991
Florencio Fabillo vs. Intermediate Appellate Court, G.R. No. 68838, March 11, 1991
Mauro P. Mananquil vs. Crisostomo C. Villegas, AC No. 2430, August 30, 1990
Paterno R. Canlas vs. Court of Appeals, G.R. No. L-77691, August 8, 1988
It should be noted that the persons mentioned in Art. 1491 of the Civil Code are
prohibited from purchasing the property mentioned therein because of their existing
trust relationship with the latter. A lawyer is disqualified from acquiring by purchase
the property and rights in litigation because of his fiduciary relationship with such
property and rights, as well as with the client.
Angel L. Bautista vs. Ramon A. Gonzales, AM No. 1625, February 12, 1990
Art. 1492 - Prohibitions applicable to sales in legal redemption, compromises

and renunciations
In Re: Atty. Leon G. Maquera, BM 793, July 30, 2004
Art. 1493 - Loss of the thing object of the contract upon perfection of contract
of sale
Art. 1495 - Obligations of vendor
Henry Koa vs. Court of Appeals, G.R. No. 84847, March 5, 1993
Art. 1496 - Ownership of thing sold is acquired by vendee when it is delivered
to him
Norkis Distributors, Inc. vs. Court of Appeals, G.R. No. 91029, February 7, 1991
Art. 1497 - Thing sold shall be understood as delivered when placed in the
control and possession of vendee
Municipality of Victorias vs. Court of Appeals, G.R. No. L-31189, March 31, 1987
Art. 1498 - When execution of public document equivalent to delivery
Lagrimas A. Boy vs. Court of Appeals, G.R. No. 125088, April 14, 2004
Leopoldo C. Leonardo vs. Virginia Torres Maravilla, G.R. No. 143369, November 27,
2002
Camilo L. Sabio vs. International Corporate Bank, G.R. No. 132709, September 4, 2001
Clara M. Balatbat vs. Court of Appeals, G.R. No. 109410, August 28, 1996
Ong Ching Po vs. Court of Appeals, G.R. No. 113472-73, December 20, 1994
Manuel R. Dulay Enterprises, Inc. vs. Court of Appeals, G.R. No. 91889, August 27,
1993
Perfecto Dy, Jr. vs. Court of Appeals, G.R. No. 92989, July 8, 1991
When the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the
deed the contrary does not appear or cannot be inferred.
Settled is the rule that the seller is obliged to transfer title over the properties and
deliver the same to the buyer. In this regard, Article 1498 of the Civil Code provides
that, as a rule, the execution of a notarized deed of sale is equivalent to the delivery of
a thing sold.
Art. 1499 - Delivery of movable property may be made by mere consent or

agreement of contracting parties
Perfecto Dy, Jr. vs. Court of Appeals, G.R. No. 92989, July 8, 1991
Art. 1502 - When goods are delivered to the buyer "on sale or return"
Industrial Textile Manufacturing Co. vs. LPJ Enterprises, Inc., G.R. No. 66140, January
21, 1993
Art. 1504 (2) - Where actual delivery is delayed through the fault of either
buyer or seller goods are at risk of party in fault
1999
Art. 1505 - Where goods are sold by a person who is not the owner thereof
Art. 1523 - Delivery of goods to carrier
Puromines, Inc. vs. Court of Appeals, G.R. No. 91228, March 22, 1993
Art. 1542 - Sale of real estate for a lump sum
Carmen Del Prado vs. Sps. Antonio and Leonarda Caballero, G.R. No. 148225, March
3, 2010
Veronica Roble vs. Dominador Arbasa, G.R. No. 130707, July 31, 2001
Luis Balantakbo vs. Court of Appeals, G.R. No. 108515, October 16, 1995
Art. 1542, 2nd par. - When two or more immovables are sold for a single price
Miguel Semira vs. Court of Appeals, G.R. No. 76031, March 2, 1994
Art. 1544 - Double sale
Sps. Jesus Ching and Lee Poe Tin vs. Sps. Adolfo and Arsenia Enrile, G.R. No.
156076, September 17, 2008
Sps. Noel and Julie Abrigo vs. Romana De Vera, G.R. No. 154409, June 21, 2004
Sps. Tomas and Silvina Occeña vs. Lydia Morales Obsiana Esponilla, G.R. No.
156973, June 4, 2004
Sps. Isabelo and Erlinda Payongayong vs. Court of Appeals, G.R. No. 144576, May 28,
2004
Isabela Colleges vs. Heirs of Nieves Tolentino-Rivera, G.R. No. 132677, October 20,
2000
Francisco Bayoca vs. Gaudioso Nogales, G.R. No. 138201, September 12, 2000
Severino Baricuatro, Jr. vs. Court of Appeals, G.R. No. 105902, February 9, 2000
Drs. Alendry and Flora P. Caviles vs. Evelyn and Ramon T. Bautista, G.R. No. 102648,
November 24, 1999
Ricardo Cheng vs. Ramon B. Genato, G.R. No. 129760, December 29, 1998
Rosita G. Tan vs. Court of Appeals, G.R. No. 125861, September 9, 1998
Clara M. Balatbat vs. Court of Appeals, G.R. No. 109410, August 28, 1996
Rebecca Desamito Vda. De Alcantara vs. Court of Appeals, G.R. No. 114762, January
29, 1996
Belinda Tañedo vs. Court of Appeals, G.R. No. 104482, January 22, 1996
Honorio Santiago vs. Court of Appeals, G.R. No. 117014, August 14, 1995
Virginia Calalang vs. Register of Deeds of Quezon City, G.R. No. 76265, March 11,
1994
Rufina Bautista vs. Court of Appeals, G.R. No. 106042, February 28, 1994
Lorenzo Berico vs. Court of Appeals, G.R. No. 96306, August 20, 1993
Evangeline C. Bucad vs. Court of Appeals, G.R. No. 93783, December 11, 1992
Agricultural and Home Extension Devt. Group vs. Court of Appeals, G.R. No. 92310,
September 3, 1992
Edilberto C. Abarquez vs. Court of Appeals, G.R. No. 95843, September 2, 1992
Maria P. Vda. De Jomoc vs. Court of Appeals, G.R. No. 92871, August 2, 1991
Radiowealth Finance Company vs. Manuelito S. Palileo, G.R. No. 83432, May 20, 1991
Romeo P. Co vs. Court of Appeals, G.R. No. 93687, May 6, 1991
Pastor Valdez vs. Court of Appeals, G.R. No. 85082, February 25, 1991
Genaro Navera, vs. Court of Appeals, G.R. No. L-56838, April 26, 1990
Registration under the Torrens System, not under the Land Registration Act, is the
operative act that gives validity to the transfer or creates a lien upon the land.
The registration contemplated in this provision refers to registration under the

Torrens System, which considers the act of registration as the operative act that gives
validity to the transfer or creates a lien upon the land. This rule precisely applies to
cases involving conflicting rights over registered property and those of innocent
transferees who relied on the clean title of the properties. Thus, we held that
registration must be done in the proper registry in order to bind the same . . . But if the
land is registered under the Land Registration Act (and therefore has a Torrens Title),
and it is sold and the sale is registered not under the Land Registration Act but under
Act 3344, as amended, such sale is not considered registered, as the term is used under
Art. 1544 of the New Civil Code.
Cecilia Amodia vda. de Melencion, et al. vs. Court of Appeals, et al., G.R. No. 148846,
September 25, 2007
Bad faith is a breach of a known duty partaking of the nature of fraud.
Bad faith does not simply connote bad judgment or negligence. It imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong. It means
breach of a known duty through some motive, interest or ill will that partakes of the
nature of fraud.
Sps. Florendo and Helen Dauz, et al. vs. Sps. Eligio and Lorenza Echavez, et al., G.R.
No. 152407, September 21, 2007
China Airlines, Ltd. v. Court of Appeals, G.R. No. 129988, July 14, 2003
Double sale by a single vendor
Article 1544 of the Civil Code contemplates a case of double sale or multiple sales
by a single vendor. More specifically, it covers a situation where a single vendor sold
one and the same immovable property to two or more buyers. It cannot be invoked
where the two different contracts of sale are made by two different persons, one of
them not being the owner of the property sold.
Sps. Avelino and Exaltacion Salera vs. Sps. Celedonio and Policronia Rodaje, G.R. No.
135900, August 17, 2007
First in time, stronger in right; exception
Jurisprudence teaches us that "(t)he governing principle is primus tempore, potior

jure (first in time, stronger in right). Knowledge gained by the first buyer of the
second sale cannot defeat the first buyer's rights except where the second buyer
registers in good faith the second sale ahead of the first, as provided by the Civil
Code. Such knowledge of the first buyer does not bar her from availing of her rights
under the law, among them, to register first her purchase as against the second buyer.
But in converso, knowledge gained by the second buyer of the first sale defeats his
rights even if he is first to register the second sale, since such knowledge taints his
prior registration with bad faith This is the price exacted by Article 1544 of the Civil
Code for the second buyer being able to displace the first buyer; that before the second
buyer can obtain priority over the first, he must show that he acted in good faith
throughout (i.e. in ignorance of the first sale and of the first buyer's rights) — from
the time of acquisition until the title is transferred to him by registration or failing
registration, by delivery of possession."
Emilia M. Uraca, et al. vs. Court of Appeals, et al., G.R. No. 115158, September 5,
1997
This provision clearly states that the rules on double or multiple sales apply only to
purchasers in good faith. Needless to say, it disqualifies any purchaser in bad faith.
Article 1544 of the Civil Code provides that when neither buyer registered the sale
of the properties with the registrar of deeds, the one who took prior possession of the
properties shall be the lawful owner thereof.
A purchaser in good faith is one who buys the property of another, without notice
that some other person has a right to, or interest in such property, and pays the full and
fair price for it at the time of such purchase or before he has notice of the claim or
interest of some other persons in the property. He buys the property with the belief
that the person from whom he receives the thing was the owner and could convey title
to the property. He cannot close his eyes to facts that should put a reasonable man on
his guard and still claim he acted in good faith.
Maria Lourdes Tamani, et al. vs. Roman Salvador, et al., G.R. No. 171497, April 4,
2011
It is undisputed that there is a double sale and that the respondents are the first
buyers while the petitioners are the second buyers. The burden of proving good faith
lies with the second buyer which is not discharged by simply invoking the ordinary
presumption of good faith. . . . As an heir, petitioner Esmeraldo cannot be considered
as a third party to the prior transaction between Martino and Purificacion. In Pilapil v.
Court of Appeals, it was written:
The purpose of the registration is to give notice to third persons. And,

privies are not third persons. The vendor's heirs are his privies. Against
them, failure to register will not vitiate or annul the vendee's right of
ownership conferred by such unregistered deed of sale.
The non-registration of the deed of sale between Martino and Purificacion is

immaterial as it is binding on the petitioners who are privies. Based on the privity
between petitioner Esmeraldo and Martino, the petitioner as a second buyer is charged
with constructive knowledge of prior dispositions or encumbrances affecting the
subject property. The second buyer who has actual or constructive knowledge of the
prior sale cannot be a registrant in good faith.
Sps. Esmeraldo and Arsenia Vallido vs. Sps. Elmer and Juliet Pono, et al., G.R. No.
200173, April 15, 2013 citing Pilapil v. Court of Appeals, 321 Phil. 156, 166 (1995)
Moreover, although it is a recognized principle that a person dealing on a registered

land need not go beyond its certificate of title, it is also a firmly settled rule that where
there are circumstances which would put a party on guard and prompt him to
investigate or inspect the property being sold to him, such as the presence of
occupants/tenants thereon, it is expected from the purchaser of a valued piece of land
to inquire first into the status or nature of possession of the occupants. As in the
common practice in the real estate industry, an ocular inspection of the premises
involved is a safeguard that a cautious and prudent purchaser usually takes. Should he
find out that the land he intends to buy is occupied by anybody else other than the
seller who, as in this case, is not in actual possession, it would then be incumbent
upon the purchaser to verify the extent of the occupant's possessory rights. The failure
of a prospective buyer to take such precautionary steps would mean negligence on his
part and would preclude him from claiming or invoking the rights of a "purchaser in
good faith." It has been held that "the registration of a later sale must be done in good
faith to entitle the registrant to priority in ownership over the vendee in an earlier
sale."
Sps. Esmeraldo and Arsenia Vallido vs. Sps. Elmer and Juliet Pono, et al., G.R. No.
200173, April 15, 2013
Art. 1545 - Where obligation of either party to a contract of sale is subject to

any condition which is not performed
Vicente Lim vs. Court of Appeals, G.R. No. 118347, October 24, 1996
Delta Motor Corporation vs. Eduarda Samson Genuino, G.R. No. 55665, February 8,
1989
Art. 1546 - Express warranty
Art. 1547 - Implied Warranty
PNB vs. Mega Prime Realty and Holdings Corp., G.R. Nos. 173454 & 173456, October
6, 2008
Binalbagan Tech. Inc. vs. Court of Appeals, G.R. No. 100594, March 10, 1993
Art. 1548 - Eviction
Art. 1561 - Vendor responsible for warranty against the hidden defects
Jon and Marissa De Ysasi vs. Arturo and Estela Arceo, G.R. No. 136586, November
22, 2001
Schmid & Oberly, Inc. vs. RJL Martinez Fishing Corp., G.R. No. No. 75198, October 18,
1988
Art. 1567 - Withdrawal or proportionate reduction of price
Coca-Cola Bottlers Philippines, Inc. vs. Court of Appeals, G.R. No. 110295, October 18,
1993
Art. 1571 - Prescription of actions to enforce warranties
Inocencia Yu Dino vs. Court of Appeals, G.R. No. 113564, June 20, 2001
Natividad Villostas vs. Court of Appeals, G.R. No. 96271, June 26, 1992
Art. 1582 - Obligations of vendee
D.M. Wenceslao and Associates, Inc. vs. Readycon Trading and Construction Corp.,
G.R. No. 154106, June 29, 2004
Art. 1583, par. 2 - When buyer neglects or refuses without just cause to take
delivery or pay for one or more instalments
Integrated Packaging Corp. vs. Court of Appeals, G.R. No. 115117, June 8, 2000
Art. 1589 - When vendee shall owe interest for period between delivery of
thing and payment of price
Gregorio Fule vs. Court of Appeals, G.R. No. 112212, March 2, 1998
Art. 1590 - When vendee may suspend payment of price
Central Bank of the Phil. vs. Alfonso Bichara, G.R. No. 131074, March 27, 2000
Adelfa Properties, Inc. vs. Court of Appeals, G.R. No. 111238, January 25, 1995
Art. 1592 - Vendee may pay even after expiration of period as long as no
demand for rescission is made
December 8, 2003
Perla Palma Gil vs. Court of Appeals, G.R. No. 127206, September 12, 2003
Alfonso L. Iringan vs. Hon. Court of Appeals, G.R. No. 129107, September 26, 2001
Albert R. Padilla vs. Floresco Paredes, G.R. No. 124874, March 17, 2000
City of Cebu vs. Heirs of Candido Rubi, G.R. No. 128579, April 29, 1999
Heirs Of Pedro Escanlar vs. Court of Appeals, G.R. No. 119777, October 23, 1997
Adoracion C. Pangilinan vs. Court of Appeals, G.R. No. 83588, September 29, 1997
Pilar T. Ocampo vs. Court of Appeals, G.R. No. 97442, June 30, 1994
Sps. Vicente and Lourdes Pingol vs. Court of Appeals, G.R. No. 102909, September 6,
1993
Oscar A. Jacinto vs. Rogelio Kaparaz, G.R. No. 81158, May 22, 1992
Joseph & Sons Enterprises, Inc. vs. Court of Appeals, G.R. No. L-46765, August 29,
1986
Felipe C. Roque vs. Nicanor Lapuz, G.R. No. L-32811, March 31, 1980
It is well-settled that the above-quoted provision applies only to a contract of sale,

and not to a sale on installment or a contract to sell. Thus, in Luzon Brokerage v.
Maritime Building, this Court ruled that "Art. 1592 of the new Civil Code (Art. 1504
of the old Civil Code) requiring demand by suit or notarial act in case the vendor of
realty wants to rescind does not apply to a contract to sell or promise to sell, where
title remains with the vendor until" full payment of the price. The Court stresses the
difference between these two types of contract. In a contract to sell, "the title over the
subject property is transferred to the vendee only upon the full payment of the
stipulated consideration. Unlike in a contract of sale, the title does not pass to the
vendee upon the execution of the agreement or the delivery of the thing sold."
Abelardo Valarao vs. Court of Appeals, G.R. No. 130347, March 3, 1999
Articles 1191 and 1592 of the Civil Code are applicable to contracts of sale, while
R.A. No. 6552 applies to contracts to sell.
Manuel Uy & Sons, Inc. v. Valbueco, Inc., G.R. No. 179594, September 11, 2013, citing
Ramos v. Heruela 509 Phil. 658, 665 (2005)
Art. 1593 - Rescission of sale of movable property
Art. 1597 - When seller may rescind contract of sale
Art. 1601 - Conventional redemption
Conchita Nool, et al. vs. Court of Appeals, et al., G.R. No. 116635, July 24, 1997
Percelino Diamante vs. Court of Appeals, et al., G.R. No. 51824, February 7, 1992
Art. 1602 - Equitable mortgage
18, 2008
Alexander Bacungan, et al. vs. Court of Appeals, et al., G.R. No. 170282, December
18, 2008
Sps. Jovenal and Cecilia Toring vs. Sps. Gilbert and Rosalie Olan, et al., G.R. No.
168782, October 10, 2008
Benjamin Bautista vs. Shirley G. Unangst, et al., G.R. No. 173002, July 4, 2008
Juan Olivares, et al. vs. Esperanza De la Cruz Sarmiento, G.R. No. 158384, June 12,
2008
Sps. Domingo and Ester Cristobal, et al. vs. Aida G. Dizon, G.R. No. 172771, January
31, 2008
Dionisia Dorado vda. De Delfin vs. Salvador D. Dellota, et al., G.R. No. 143697,
January 28, 2008
Sps. Carlos and Eulalia Raymundo, et al. vs. Sps. Dominador and Rosalia Bandong,
G.R. No. 171250, July 4, 2007
Leonora Ceballos vs. Intestae Estate of Emigdio Mercado, G.R. No. 155856, May 28,
2004
Erlinda San Pedro vs. Ruben Lee, G.R. No. 156522, May 28, 2004
Sps. Crispin Austria and Leonisa Hilario vs. Sps. Danilo and Veronica Gonzales, G.R.
No. 147321, January 21, 2004
Oscar C. Fernandez vs. Sps. Carlos and Narcisa Tarun, G.R. No. 143868, November
14, 2002
Raymundo Tolentino and Lorenza Roño vs. Court of Appeals, G.R. No. 128759, August
1, 2002
Georgina Hilado vs. Heirs of Rafael Medalla, G.R. No. 144227, February 15, 2002
Jayme C. Uy vs. Court of Appeals, G.R. No. 109197, June 21, 2001
Octavio Lorbes vs. Court of Appeals, G.R. No. 139884, February 15, 2001
Tomas See Tuazon vs. Court of Appeals, G.R. No. 119794, October 3, 2000
Mario Reyes, vs. Court of Appeals, G.R. No. 134166, August 25, 2000
Estelita Aguirre vs. Court of Appeals, G.R. No. 131520, January 28, 2000
Ching Sen Ben vs. Court of Appeals, G.R. No. 124355, September 21, 1999
Lydia R. Lapat vs. Josefino Rosario, G.R. No. 127348, August 17, 1999
Macario Misena vs. Maximiano Rongavilla, G.R. No. 130138, February 25, 1999
Felicidad L. Oronce vs. Court of Appeals, G.R. No. 125766, October 19, 1998
Aniceta Ramirez vs. Court of Appeals, G.R. No. 96412, August 24, 1998
Ponciano T. Matanguihan vs. Court of Appeals, G.R. No. 115033, July 11, 1997
Raymundo M. Dapiton vs. Court of Appeals, G.R. No. 107259, June 9, 1997
Alfonso D. Zamora vs. Court of Appeals, G.R. No. 102557, July 30, 1996
Thelma P. Olea vs. Court of Appeals, G.R. No. 109696, August 14, 1995
Flordeliz L. Bellido vs. Court of Appeals, G.R. No. 106822, December 21, 1993
Emiliano G. Lizares, Jr. vs. Court of Appeals, G.R. No. 98282, September 6, 1993
Lea O. Camus vs. Court of Appeals, G.R. No. 102314, May 26, 1993
Mariano M. Lazatin vs. Court of Appeals, G.R. No. 96054, July 3, 1992
Mauricio N. Cachola, Sr. vs. Court of Appeals, G.R. No. 97822, May 7, 1992
Heirs of Tabora Vda. De Macoy vs. Court of Appeals, G.R. No. 95871, February 13,
1992
Eufracio Rojas vs. Court of Appeals, G.R. No. 77668, December 26, 1990
Loreto Claravall vs. Court of Appeals, G.R. No. 47120, October 15, 1990
Oscar D. Ramos vs. Court of Appeals, G.R. No. 42108, December 29, 1989
Benjamin Vallangca vs. Court of Appeals, G.R. No. L-55336, May 4, 1989
An equitable mortgage has been defined as one which, although lacking in some
formality, or form or words, or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as security for a debt, there
being no impossibility nor anything contrary to law in this intent.
The law requires the presence of any one and not the concurrence of all of the
circumstances enumerated under Article 1602, to conclude that the transaction is one
of equitable mortgage.
Sps. Domingo and Felipa Lumayag vs. Heirs of Jacinto Nemeño, et al., G.R. No.
162112, July 3, 2007
One repurchases only what one has previously sold. The right to repurchase
presupposes a valid contract of sale between the same parties.
Amelia S. Roberts vs. Martin B. Papio, G.R. No. 166714, February 9, 2007
Essential Requisites of an Equitable Mortgage
The essential requisites of an equitable mortgage are: (1) the parties enter into what
appears to be a contract of sale, (2) but their intention is to secure an existing debt by
way of mortgage.
Dionisia Dorado vda. De Delfin vs. Salvador d. Dellota, et al., G.R. No. 143697, January
28, 2008
Article 1602 of the Civil Code is designed primarily to curtail the evils brought
about by contracts of sale with right of repurchase, such as the circumvention of the
laws against usury and pactum commissorium.
Benjamin Bautista vs. Shirley G. Unangst, G.R. No. 173002, July 4, 2008
Balatero vs. Intermediate Appellate Court, G.R. No. L-73889, September 30, 1987
The presumption of equitable mortgage created in Article 1602 of the Civil Code is
not conclusive. It may be rebutted by competent and satisfactory proof of the contrary.
Sps. Ester Santiago and Domingo Cristobal, et al. vs. Aida G. Dizon, G.R. No. 172771,
January 31, 2008
The existence of any one of the conditions enumerated under Article 1602 of the
Civil Code, not a concurrence of all or of a majority thereof, suffices to give rise to the
presumption that the contract is an equitable mortgage.
Heirs of Jose Reyes, Jr. vs. Amanda S. Reyes, et al., G.R. No. 158377, August 4, 2010
Art. 1603 - Contract purporting to be a sale with right to repurchase shall be

construed as an equitable mortgage
Benjamin Bautista vs. Shirley G. Unangst, et al., G.R. No. 173002, July 4, 2008
Raymundo M. Dapiton vs. Court of Appeals, G.R. No. 107259, June 9, 1997
Republic of the Phils. vs. Intermediate Appellate Court, G.R. No. 74830, July 5, 1993
The decisive factor in evaluating such agreement is the intention of the parties, as
shown not necessarily by the terminology used in the contract but by all the
surrounding circumstances, such as the relative situation of the parties at that time, the
attitude, acts, conduct, declarations of the parties, the negotiations between them
leading to the deed, and generally, all pertinent facts having a tendency to fix and
determine the real nature of their design and understanding. As such, documentary
and parol evidence may be submitted and admitted to prove the intention of the
parties.
Benjamin Bautista vs. Shirley G. Unangst, G.R. No. 173002, July 4, 2008
Lorbes vs. CA, G.R. No. 139884, February 15, 2001
Art. 1604 - Contract purporting to be an absolute sale shall be construed as an
equitable mortgage
18, 2008
Alexander Bacungan, et al. vs. Court of Appeals, et al., G.R. No. 170282, December
18, 2008
Juan Olivares, et al. vs. Esperanza De la Cruz Sarmiento, G.R. No. 158384, June 12,
2008
Sps. Crispin Austria and Leonisa Hilario vs. Sps. Danilo and Veronica Gonzales, G.R.
No. 147321, January 21, 2004
Luz Ardena Salame vs. Court of Appeals, G.R. No. 104373, December 22, 1994
Felimon Uy vs. Court of Appeals, G.R. No. 104784, March 3, 1994
Mariano M. Lazatin vs. Court of Appeals, G.R. No. 96054, July 3, 1992
Loreto Claravall vs. Court of Appeals, G.R. No. 47120, October 15, 1990
Benjamin Vallangca vs. Court of Appeals, G.R. No. L-55336, May 4, 1989
Under Art. 1604 of the Civil Code, a contract purporting to be an absolute sale
shall be presumed to be an equitable mortgage should any of the conditions in Art.
1602 be present. The existence of any of the circumstances therein, not a concurrence
nor an overwhelming number of such circumstances, suffices to give rise to the
presumption that the contract is an equitable mortgage.
Adoracion Lustan vs. Court of Appeals, G.R. No. 111924, January 27, 1997
Art. 1606 - Right of repurchase shall last four years from date of contract
Ronaldo P. Abilla vs. Carlos Ang Gobonseng, Jr., G.R. No. 146651, January 17, 2002
Inocente Leonardo vs. Court of Appeals, G.R. No. 82457, March 22, 1993
Clara Badayos vs. Court of Appeals, G.R. No. 57630, March 13, 1992
Heirs of Tabora Vda. De Macoy vs. Court of Appeals, G.R. No. 95871, February 13,
1992
Bienvenida Pangilinan vs. Fidel Ramos, G.R. No. 75304, January 23, 1990
Therefore, the applicability of Article 1606 rests on the bona fide intent of the
vendor a retro, i.e., respondent in this case. If he honestly believed that the transaction
was an equitable mortgage, the said article applies and he can still repurchase the
property within thirty days from finality of the judgment declaring the transaction as a
sale with pacto de retro. Parenthetically, it matters not what the vendee intended the
transaction to be.
Philadelphia Agan vs. Heirs of Sps. Andres and Diosdado Nueva, G.R. No. 155018,
December 11, 2003
Ronaldo P. Abilla vs. Carlos Ang Gobonseng, Jr., G.R. No. 146651, August 6, 2002
Art. 1607 - Consolidation of ownership in vendee
Sps. Alexander and Adelaida Cruz vs. Eleuterio Leis, G.R. No. 125233, March 9, 2000
Art. 1616 - Vendor cannot avail of right of repurchase without returning the
price of the sale
BPI Family Savings Bank vs. Sps. Januario Antonio and Natividad Veloso, G.R. No.
141974, August 9, 2004
Solid Homes, Inc. vs. Court of Appeals, G.R. No. 117501, July 8, 1997
State Investment House, Inc. vs. Court of Appeals, G.R. No. 99308, November 13,
1992
Mariano Floreza vs. Maria D. De Evangelista, G.R. No. L-25462, February 21, 1980
Art. 1620 - Co-owner may exercise right of redemption
Lee Chuy Realty Corporation vs. Court of Appeals, G.R. No. 104114, December 4,
1995
Leonardo Mariano vs. Court of Appeals, G.R. No. 101522, May 28, 1993
Bernardo Mendoza I vs. Court of Appeals, G.R. No. 44664, July 31, 1991
Valentina G. Villanueva vs. Alfredo C. Florendo, G.R. No. L-33158, October 17, 1985
Art. 1621 - When owners of adjoining lands have right of redemption
Primary Structures Corp. vs. Sps. Anthony and Susan T. Valencia, G.R. No. 150060,
August 19, 2003
Celso R. Halili vs. Court of Appeals, G.R. No. 113539, March 12, 1998
Art. 1622 - Owner of adjoining land has right of pre-emption
Sen Po Ek Marketing Corp. vs. Teodora Price Martinez, G.R. No. 134117, February 9,
2000
Vicente Del Rosario vs. Julio Bansil, G.R. No. 51655, November 29, 1989
Art. 1623 - Right of legal pre-emption or redemption shall not be exercised

except within thirty days from notice
Serafin Si vs. Court of Appeals, G.R. No. 122047, October 12, 2000
Adalia B. Francisco vs. Zenaida F. Boiser, G.R. No. 137677, May 31, 2000
Clarita P. Hermoso vs. Court of Appeals, G.R. No. 108580, December 29, 1998
Zosima Verdad vs. Court of Appeals, G.R. No. 109972, April 29, 1996
Lee Chuy Realty Corporation vs. Court of Appeals, G.R. No. 104114, December 4,
1995
Mariano Distrito vs. Court of Appeals, G.R. No. 95256, May 28, 1991
Vicente Del Rosario vs. Julio Bansil, G.R. No. 51655, November 29, 1989
Flavia Salatandol vs. Catalina Retes, G.R. No. L-38120, June 27, 1988
Erlinda O. Cabrera vs. Victoriana E. Villanueva, G.R. No. L-75069, April 15, 1988
Dominico Etcuban vs. Court of Appeals, G.R. No. L-45164, March 16, 1987
Who may exercise legal redemption over property owned in common.
Legal redemption may only be exercised by the co-owner or co-owners who did not
part with his or their pro-indiviso share in the property held in common.
Nelson Cabales, et al. vs. Court of Appeals, et al., G.R. No. 162421, August 31, 2007
Art. 1623, 2nd sentence - Right of redemption of co-owners excludes that of

adjoining owners
Primary Structures Corp. vs. Sps. Anthony and Susan T. Valencia, G.R. No. 150060,
August 19, 2003
Art. 1624 - Assignment of credits
An assignment of credit has been defined as an agreement by virtue of which the

owner of a credit (known as the assignor), by a legal cause — such as sale, dation in
payment or exchange or donation — and without need of the debtor's consent,
transfers that credit and its accessory rights to another (known as the assignee), who
acquires the power to enforce it, to the same extent as the assignor could have
enforced it against the debtor.
Art. 1625 - Assignment of credit must be in public document to affect third

persons
Bienvenido C. Teoco, et al. vs. Metrobank, G.R. No. 162333, December 23, 2008
Violeta Espino vs. Normandy P. Amora, et al., G.R. No. 172816, March 3, 2008
Caltex (Philippines), Inc. vs. Court of Appeals, G.R. No. 97753, August 10, 1992
Art. 1626 - Debtor who pays before knowledge of assignment of credit shall be
released from obligation
The law does not require any formal notice to bind the debtor to the assignee, all
that the law requires is knowledge of the assignment. Even if the debtor had not been
notified, but came to know of the assignment by whatever means, the debtor is bound
by it.
Agrifina Aquitney vs. Sps. Felicidad and Rico Tibong, G.R. No. 166704, December 20,
2006
Art. 1628 - Vendor in good faith responsible for existence and legality of credit
at the time of the sale
Sonny Lo vs. KJS Eco-Formwork System Phil., Inc., G.R. No. 149420, October 8, 2003
Nyco Sales Corporation vs. BA Finance Corporation, G.R. No. 71694, August 16, 1991
Art. 1629 - Duration of liability of assignor in good faith
Atok Finance Corporation vs. Court of Appeals, G.R. No. 80078, May 18, 1993
Art. 1643 - Lease of things
Under the law, lease is a grant of use and possession: it is not only a grant of
possession as opined by the Court of Appeals. The right to possess does not always
include the right to use. For while the bailee in the contract of deposit holds the
property in trust, he is not granted by law the right to make use of the property in
deposit. In the contract of lease, the lessor transfers his right of use in favor of the
lessee. The lessor s right of use is impaired, therein. He may even be ejected by the
lessee if the lessor uses the leased realty. Therefore, lease is a burden on the land, it is
an encumbrance on the land. The opinion of the Court of Appeals that lease is not an
encumbrance is not supported by law. The concept of encumbrance includes lease,
thus "an encumbrance is sometimes construed broadly to include not only liens such
as mortgages and taxes, but also attachment, LEASES, inchoate dower rights, water
rights, easements, and other RESTRICTIONS on USE." (Capitalization is Ours) (533
Pacific Reporter [second series] 9, 12).
Kilosbayan, Inc. vs. Manuel L. Morato, G.R. No. 118910, July 17, 1995
CA Agro-Industrial Devt. Corp. vs. Court of Appeals, G.R. No. 90027, March 3, 1993
The lease of a building includes the lease of the lot and consequently, the rentals of
the building include the rentals of the lot.
Art. 1646 - Persons disqualified to become lessees
Mauro P. Mananquil vs. Crisostomo C. Villegas, AC No. 2430, August 30, 1990
Art. 1648 - Lease of real estate may be recorded in Registry of Property
Land Bank of the Phils. vs. AMS Farming Corp., G.R. No. 174971, October 15, 2008
Manuel Ibasco vs. Eduardo P. Caguioa, G.R. No. L-62619, August 19, 1986
Art. 1649 - Assignment of lease
In the case of cession or assignment of lease rights on real property, there is a

novation by the substitution of the person of one of the parties — the lessee. The
personality of the lessee, who dissociates from the lease, disappears; only two persons
remain in the juridical relation — the lessor and the assignee who is converted into the
new lessee.
Inocencio v. Hospicio de San Jose, G.R. No. 201787, September 25, 2013, citing
Tamio v. Tecson, 485 Phil. 434 (2004)
Assignment or transfer of lease, which is covered by Article 1649 of the Civil

Code, is different from a sublease arrangement, which is governed by Article 1650 of
the same Code. In a sublease, the lessee becomes in turn a lessor to a sublessee. The
sublessee then becomes liable to pay rentals to the original lessee. However, the
juridical relation between the lessor and lessee is not dissolved. The parties continue
to be bound by the original lease contract. Thus, in a sublease arrangement, there are
at least three parties and two distinct juridical relations.
Art. 1650 - Sub-lease
Henry L. Mon vs. Court of Appeals, G.R. No. 118292, April 14, 2004
Virginia Ocampo Juarez vs. Court of Appeals, G.R. No. 93474, October 7, 1992
Ramon had a right to sublease the premises since the lease contract did not contain
any stipulation forbidding subleasing.
Art. 1651 - Sub-lessee is bound to lessor
Art. 1653 - Provisions concerning warranty applicable to contract of lease
Jon and Marissa De Ysasi vs. Arturo and Estela Arceo, G.R. No. 136586, November
22, 2001
Art. 1654 - Obligations of the lessor
Land Bank of the Phil. vs. AMS Farming Corp., G.R. No. 174971, October 15, 2008
Art. 1654 (1)

Roman Catholic Archbishop of Manila vs. Court of Appeals, G.R. No. 123321, March 3,
1997
Art. 1654 (3)

Chua Tee Dee vs. Court of Appeals, et al., G.R. No. 135721, May 27, 2004
Lydia Meliton vs. Court of Appeals, G.R. No. 101883, December 11, 1992
Liwayway Publications, Inc. vs. Permanent Concrete Workers Union, G.R. No. L-25003,
October 23, 1981
Art. 1657 - Obligations of the lessee
The right of first refusal, also referred to as the preferential right to buy, is available
to lessees only if there is a stipulation thereto in the contract of lease or where there is
a law granting such right to them (i.e., Presidential Decree No. 1517 (1978), which
vests upon urban poor dwellers who merely lease the house where they have been
residing for at least ten years, preferential right to buy the property located within an
area proclaimed as an urban land reform zone). Unlike co-owners and adjacent lot
owners, there is no provision in the Civil Code which grants to lessees preemptive
rights. Nonetheless, the parties to a contract of lease may provide in their contract that
the lessee has the right of first refusal.
Joven Yuki, Jr. vs. Wellington Co, G.R. No. 178527, November 27, 2009
Art. 1658 - Lessee may suspend payment of rent if lessor does not make
necessary repairs
Art. 1659 - When lessee or lessor may ask for rescission and/or damages
Lydia Meliton vs. Court of Appeals, G.R. No. 101883, December 11, 1992
The judicial rescission of a contract of lease is essentially governed by Article

1659 of the Civil Code, grounded on the breach of the parties' statutory obligations: in
the case of the lessee, for its failure to pay the rent or to use the property under lease
for the purpose it was intended. Article 1673, read with Section 2, Rule 70 of the
Rules, does away with the need for an independent judicial action to rescind
prior to ejectment by combining these remedies in an unlawful detainer action.
Cebu Autometic Motors, Inc., et al. vs. General Milling Corp., G.R. No. 151168, August
25, 2010
Art. 1664 - When a third person trespasses upon thing leased
Art. 1665 - Lessee shall return the thing leased upon termination of the lease
Art. 1667 - The lessee is responsible for the deterioration or loss of the thing
leased; exception; burden of proof
Lessee must prove that the deterioration or loss of thing leased was due to a
fortuitous event.
Article 1667 of the Civil Code creates the presumption that the lessee is liable for
the deterioration or loss of a thing leased. To overcome such legal presumption, the
lessee must prove that the deterioration or loss was due to a fortuitous event which
took place without his fault or negligence.
November 22, 2007
Art. 1669 - Lease for a determinate time ceases upon day fixed without need of
demand
Antonio Chua vs. Court of Appeals, G.R. No. 106573, March 27, 1995
Benjamin Del Rosario vs. Cecilio F. Balagot, G.R. No. L-55377, October 18, 1988
Art. 1670 - Implied new lease
Sps. Romeo and Emily Guda vs. Alan A. Leynes, G.R. No. 143675, June 9, 2003
Ligaya S. Santos vs. Court of Appeals, G.R. No. 135481, October 23, 2001
Pio Q. Paterno vs. Court of Appeals, G.R. No. 115763, May 29, 1997
Vicente J. Santi vs. Court of Appeals, G.R. No. 93625, November 8, 1993
Roberto E. Fermin vs. Court of Appeals, G.R. No. 95146, May 6, 1991
Heirs of Julio Rosas vs. Oscar R. Reyes, G.R. No. 91406, July 31, 1990
Felix Lim vs. Court of Appeals, G.R. No. 84154-55, July 28, 1990
Uy Hoo and Sons Realty Development Corporation vs. Court of Appeals, G.R. No.
83263, June 14, 1989
Benjamin Del Rosario vs. Cecilio F. Balagot, G.R. No. L-55377, October 18, 1988
Art. 1673 - When lessor may judicially eject lessee
Abaya Investment Corp. vs. Merit Phils., et al., G.R. No. 176324, April 16, 2008
14, 2008
LL and Co. Devt. and Agro-Industrial Corp. vs. Huang Chao Chum, G.R. No. 142378,
March 7, 2002
T & C Dev't. Corp. vs. Court of Appeals, G.R. No. 118381, October 26, 1999
Teresita Dio Vs. Rosalinda Melo Concepcion, G.R. No. 129493, September 25, 1998
Army and Navy Club of Manila vs. Court of Appeals, G.R. No. 110223, April 8, 1997
Heirs of Manuel T. Suico vs. Court of Appeals, G.R. No. 120615, January 21, 1997
Loida Acab vs. Court of Appeals, G.R. No. 112285, February 21, 1995
Teodoro Araos vs. Court of Appeals, G.R. No. 107057, June 2, 1994
Arturo Lipata vs. Court of Appeals, G.R. No. 79670, February 19, 1991
Aurora Pascua vs. Court of Appeals, G.R. No. 76851, March 19, 1990
The lessor may judicially eject the lessee for non-payment of the price stipulated
and violation of any of the conditions agreed upon in the contract.
Abaya Investments Corp. vs. Merit Phil., et al., G.R. No. 176324, April 16, 2008
14, 2008
Based on this provision, a lessor may judicially eject (and thereby likewise rescind
the contract of lease) the lessee if the latter violates any of the conditions agreed upon
in the lease contract. Implemented in accordance with Section 2, Rule 70, the lessor is
not required to first bring an action for rescission, but may ask the court to do so and
simultaneously seek the ejectment of the lessee in a single action for unlawful
detainer.
25, 2010
Article 1673, implemented pursuant to Section 2, Rule 70, does away with a
separate judicial action for rescission, and allows under a single complaint the judicial
ejectment of the lessee after extrajudicial rescission has taken place. These combined
remedies account for the separate aspects of the demand letter: the demand to pay
rentals or to comply with the terms of the lease, and to vacate. The tenant's refusal to
heed the demand to vacate, coming after the demand to pay or to comply similarly
went unheeded, renders unlawful the continued possession of the leased premises;
hence, the unlawful detainer action.
25, 2010
Art. 1675 - Lessee shall have right to use of periods in articles 1682 and 1687
March 7, 2002
Alejandro Sy Jueco vs. Court of Appeals, G.R. No. 98270, July 5, 1993
Art. 1676 - Purchaser of piece of land under lease not recorded in the Registry
of Property may terminate the lease
Ramon Francisco vs. Intermediate Appellate Court, G.R. No. 75909, February 6, 1990
Eusebio Bernabe vs. Artemon D. Luna, G.R. No. L-57645, February 27, 1987
Art. 1678 - When lessee, in good faith, makes useful improvements on

property leased
Land Bank of the Phils. vs. AMS Farming Corp., G.R. No. 174971, October 15, 2008
Rodolfo Guiang vs. Ricardo C. Samano, G.R. No. 50501, April 22, 1991
Enrique P. Syquia vs. Court of Appeals, G.R. No. L-61932, June 30, 1987
Consolacion Duque Salonga vs. Julita B. Farrales, G.R. No. L-47088, July 10, 1981
The foregoing provision applies if the improvements were: (1) introduced in good
faith; (2) useful; and (3) suitable to the use for which the lease is intended, without
altering the form and substance.
To be entitled to reimbursement for improvements introduced on the property, the

claimant must be considered a builder in good faith.
While it is true that under [Article 1678] of the Civil Code, the lessor is under the
obligation to pay the lessee one-half of the value of the improvements made should
the lessor choose to appropriate the improvements, Article 1678 however should be
read together with Article 448 and Article 546 of the same statute . . . Thus, to be
entitled to reimbursement for improvements introduced on the property, the petitioner
must be considered a builder in good faith. Further, Articles 448 and 546 of the Civil
Code, which allow full reimbursement of useful improvements and retention of the
premises until reimbursement is made, apply only to a possessor in good faith, i.e.,
one who builds on land with the belief that he is the owner thereof. A builder in good
faith is one who is unaware of any flaw in his title to the land at the time he builds on
it.
Lessees are not possessors or builders in good faith.
Being mere lessees, the private respondents knew that their occupation of the
premises would continue only for the life of the lease. Plainly, they cannot be
considered as possessors nor builders in good faith. In a plethora of cases, this Court
has held that Article 448 of the Civil Code, in relation to Article 546 of the same
Code, which allows full reimbursement of useful improvements and retention of the
premises until reimbursement is made, applies only to a possessor in good faith, i.e.,
one who builds on land with the belief that he is the owner thereof. It does not apply
where one's only interest is that of a lessee under a rental contract; otherwise, it would
always be in the power of the tenant to "improve" his landlord out of his property.
Federico Geminiano, et al. vs. Court of Appeals, et al., G.R. No. 120303, July 24, 1996
Art. 1678, 1st par.
Note that under the 1st paragraph of Art. 1678, the law on the right of REMOVAL
says that "should the lessor refuse to reimburse said amount, the lessee may remove
the improvements, even though the principal thing may suffer thereby." While the
phrase "even though" implies that Art. 1678 always applies regardless of whether or
not the improvements can be removed without injury to the leased premises, it is
believed that application of the Article cannot always be done. The rule is evidently
intended for cases where a true accession takes place as when part of the land leased
is, say, converted into a fishpond; and certainly not where as easily removable thing
(such as a wooden fence) has been introduced. There is no doubt that in a case
involving such a detachable fence, the lessee can take the same away with him when
the lease expires. [citing 5 E. PARAS, CIVIL CODE OF THE PHILIPPINES
ANNOTATED 345 (11th ed., 1986)]
2002
Marguerite J. Lhuillier vs. Court of Appeals, G.R. No. 128058, December 19, 2000
Virgilio Jimenez vs. Patricia, Inc., G.R. No. 134651, September 18, 2000
Henry L. Sia vs. Court of Appeals, G.R. No. 108222, May 5, 1997
Federico Geminiano vs. Court of Appeals, G.R. No. 120303, July 24, 1996
Antonio Chua vs. Court of Appeals, G.R. No. 106573, March 27, 1995
Artemio Santos vs. Court of Appeals, G.R. No. 100963, April 6, 1993
Juanito A. Rosario vs. Court of Appeals, G.R. No. 89554, July 10, 1992
Phil. National Bank vs. CFI Of Rizal, Branch XXI, G.R. No. 63201, May 27, 1992
Art. 1682 - Duration of lease of rural land
Art. 1687 - If period for lease has not been fixed
Leo Wee vs. George D. Castro, et al., G.R. No. 176405, August 20, 2008
Eulogio Lo Chua vs. Court of Appeals, G.R. No. 140886, April 19, 2001
Alfredo Arquelada vs. Phil. Veterans Bank, G.R. No. 139137, March 31, 2000
Danilo S. Yap vs. Court of Appeals, G.R. No. 140249, March 6, 2001
Consolacion De Vera vs. Court of Appeals, G.R. No. 110297, August 7, 1996
Loida Acab vs. Court of Appeals, G.R. No. 112285, February 21, 1995
Maura Inductivo vs. Court of Appeals, G.R. No. 108196, January 19, 1994
Vicente J. Santi vs. Court of Appeals, G.R. No. 93625, November 8, 1993
Virginia Ocampo Juarez vs. Court of Appeals, G.R. No. 93474, October 7, 1992
Yek Seng Co. vs. Court of Appeals, G.R. No. 87415, January 23, 1992
Arturo Lipata vs. Court of Appeals, G.R. No. 79670, February 19, 1991
Felix Lim vs. Court of Appeals, G.R. No. 84154-55, July 28, 1990
Aurora Pascua vs. Court of Appeals, G.R. No. 76851, March 19, 1990
Uy Hoo and Sons Realty Development Corporation vs. Court of Appeals, G.R. No.
83263, June 14, 1989
This Court has settled that the power of the court to "fix a longer term for lease is
potestative or discretionary — 'may' is the word — to be exercised or not in
accordance with the particular circumstances of the case; a longer term to be granted
where equities come into play, demanding extension, to be denied where none appear,
always with due deference to the parties freedom to contract."
Manuel D. Melotindos vs. Melecio Tobias, G.R. No. 146658, October 28, 2002
March 7, 2002
La Jolla vs. Court of Appeals, G.R. No. 115851, June 20, 2001
Art. 1700 - Relations between capital and labor are not merely contractual
Magsaysay Maritime Corp., et al. vs. Jaime Velasquez, et al., G.R. No. 179802,
November 14, 2008
Cherry J. Price, et al. vs. Innodata Phils. Inc., et al., G.R. No. 178505, September 30,
2008
Ruben Serrano vs. NLRC, G.R. No. 117040, January 27, 2000
Joaquin T. Servidad vs. NLRC, G.R. No. 128682, March 18, 1999
Pantranco North Express, Inc. vs. NLRC, G.R. No. 95940, July 24, 1996
Davao Integrated Port Stevedoring Services vs. Ruben V. Abarquez, G.R. No. 102132,
March 19, 1993
A contract of employment is impressed with public interest such that labor

contracts must yield to the common good
Cherry J. Price, et al. vs. Innodata Phils., Inc., et al., G.R. No. 178505, September 30,
2008
[T]he relations between capital and labor are not merely contractual. "They are so
impressed with public interest that labor contracts must yield to the common good . . .
." The supremacy of the law over contracts is explained by the fact that labor contracts
are not ordinary contracts; they are imbued with public interest and therefore are
subject to the police power of the state. However, it should not be taken to mean that
provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review
and nullification. If the provisions in the CBA run contrary to law, public morals, or
public policy, such provisions may very well be voided.
PNCC Skyway Traffic Mgt. and Security Division Workers Organization vs. PNCC
Skyway Corp., G.R. No. 171231, February 17, 2010
Art. 1702 - Labor legislation and labor contracts shall be construed in favor of
the safety and decent living for the laborer
Mindanao Steel Corp. vs. Minsteel Free Workers, G.R. No. 130693, March 4, 2004
Art. 1711 - Employers are obliged to pay compensation for death of or injuries
to their laborers
Julita T. Vda. De Severo vs. Luningning Feliciano Go, G.R. No. L-44330, January 29,
1988
Art. 1713 - Contract for a piece of work
Leighton Contractors Phil., Inc., vs. CNP Industries, Inc., G.R. No. 160972, March 9,
2010
Engineering & Machinery Corporation vs. Court of Appeals, G.R. No. 52267, January
24, 1996
Art. 1719 - Acceptance of work by the employer relieves contractor of liability
EPG Construction Company, Inc. vs. Court of Appeals, G.R. No. 103372, June 22,
1992
Art. 1724 (2) - Right of contractor when there is a change in plans and
specifications
Titan-Ikeda Construction & Development Corporation vs. Primetown Property Group,

Inc., G.R. No. 158768, February 12, 2008
Powton Conglomerate vs. Johnny Agcolicol, G.R. No. 150978, April 3, 2003
In contracts for a stipulated price, the recovery of additional costs (incurred due to
changes in plans or specifications) is governed by Art. 1724 of the Civil Code.
Titan-Ikeda Construction and Development Corp. vs. Primetown Property Group, Inc.,
G.R. No. 158768, February 12, 2008
In contracts for a stipulated price like fixed lump-sum contracts, the recovery of
additional costs is governed by Article 1724 of the Civil Code. Settled is the rule that
a claim for the cost of additional work arising from changes in the scope of work can
only be allowed upon the: (1) written authority from the developer or project owner
ordering or allowing the written changes in work and (2) written agreement of parties
with regard to the increase in price or cost due to the change in work or design
modification.
Furthermore, compliance with the two requisites of Article 1724, a specific

provision governing additional works, is a condition precedent for the recovery. The
absence of one or the other condition bars the recovery of additional costs. Neither the
authority for the changes made nor the additional price to be paid therefor may be
proved by any other evidence.
Leighton Contractors Phil., Inc., vs. CNP Industries, Inc., G.R. No. 160972, March 9,
2010
Art. 1725 - Owner may withdraw at will from construction of the work
National Power Corporation vs. Court of Appeals, G.R. No. 107631, February 26, 1996
Art. 1728 - Contractor liable for claims of laborers
Franklin Baguio vs. National Labor Relations Commission, G.R. No. 79004-08, October
4, 1991
When Claim for Cost of Additional Work Allowed
The Court reiterated that a claim for the cost of additional work arising from
changes in the scope of work can only be allowed upon the: 1. written authority from
the developer/owner ordering/allowing the changes in work; and 2. written agreement
of parties with regard to the increase in cost (or price) due to the change in work or
design modification.
Art. 1729 - Liability of owner of a piece of work
This provision imposes a direct liability on an owner of a piece of work in favor of

suppliers of materials (and laborers) hired by the contractor "up to the amount owing
from the [owner] to the contractor at the time the claim is made." Thus, to this extent,
the owner's liability is solidary with the contractor, if both are sued together. By
creating a constructive vinculum between suppliers of materials (and laborers), on the
one hand, and the owner of a piece of work, on the other hand, as an exception to the
rule on privity of contracts, Article 1729 protects suppliers of materials (and laborers)
from unscrupulous contractors and possible connivance between owners and
contractors.
JL Investment and Dev't., Inc. vs. Tendon Phil. Inc., et al., G.R. No. 148596 January
22, 2007
Art. 1731 - Pledge
Mechanic's Lien Construed
The mechanic's lien is akin to a contractor's or warehouseman's lien in that by way

of pledge, the repairman has the right to retain possession of the movable until he is
paid. However, the right of retention is conditioned upon the execution of work upon
the movable. The creation of a mechanic's lien does not depend upon the owner's
nonpayment. Rather, the contractor "creates" his or her own lien by performing the
work or furnishing the materials.
Optimum Motor Center Corporation vs. Annie Tan, G.R. No. 170202, July 14, 2008
The concept of a mechanic's lien is articulated in Article 1731 of the Civil Code.
Art. 1732 - Common carriers
Vector Shipping Corp., et al. vs. Adelfo B. Macasa, et al., G.R. No. 160219, July 21,
2008
Alejandro Arada vs. Court of Appeals, G.R. No. 98243, July 1, 1992
Pedro de Guzman vs. CA and Ernesto Cendaña, G.R. No. L-47822, December 22,
1988
The test to determine a common carrier is "whether the given undertaking is a part
of the business engaged in by the carrier which he has held out to the general public as
his occupation rather than the quantity or extent of the business transacted." . . .
Planters Products, Inc. vs. Court of Appeals, G.R. No. 101503, September 15, 1993
Estrellita M. Bascos vs. Court of Appeals, G.R. No. 101089, April 7, 1993
Article 1732 makes no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such carrying only as an
ancillary activity (in local idiom, as "a sideline"). Article 1732 also carefully avoids
making any distinction between a person or enterprise offering transportation service
on a regular or scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier
offering its services to the "general public," i.e., the general community or population,
and one who offers services or solicits business only from a narrow segment of the
general population
First Phil. Industrial Corp. vs. Court of Appeals, G.R. No. 125948, December 29, 1998
National Steel Corp. vs. Court of Appeals, G.R. No. 112287 & 112350, December 12,
1997
Engracio Fabre, Jr. vs. Court of Appeals, G.R. No. 111127, July 26, 1996
It is not necessary that the carrier be issued a certificate of public convenience, and
this public character is not altered by the fact that the carriage of the goods in question
was periodic, occasional, episodic or unscheduled
Asia Lighterage and Shipping, Inc. vs. Court of Appeals, G.R. No. 147246, August 19,
2003
Philippine American General Insurance Company vs. PKS Shipping Company, G.R. No.
149038, April 9, 2003
FGU Insurance Corp. vs. G.P. Sarmiento Trucking Corp., G.R. No. 141910. August 6,
2002
Virgines Calvo vs. UCPB General Insurance Co., G.R. No. 148496. March 19, 2002
Loadstar Shipping Co. vs. Court of Appeals, G.R. No. 131621. September 28, 1999
A freight forwarder's liability is limited to damages arising from its own

negligence, including negligence in choosing the carrier; however, where the
forwarder contracts to deliver goods to their destination instead of merely arranging
for their transportation, it becomes liable as a common carrier for loss or damage to
goods. A freight forwarder assumes the responsibility of a carrier, which actually
executes the transport, even though the forwarder does not carry the merchandise
itself.
Unsworth Transport International (Phils.), Inc. vs. Court of Appeals, et al., G.R. No.
166250, July 26, 2010
Art. 1733 - Common carriers are bound to observe extraordinary diligence
Virgines Calvo vs. UCPB General Insurance Co., G.R. No. 148496. March 19, 2002
Phil-Am General Insurance Co., Inc. vs. Court of Appeals, G.R. No. 116940, June 11,
1997
Trans-Asia Shipping Lines vs. Court of Appeals, G.R. No. 118126, March 4, 1996
American Home Assurance, Co. vs. Court of Appeals, G.R. No. 94149, May 5, 1992
Heirs of Amparo De Los Santos vs. Court of Appeals, G.R. No. 51165, June 21, 1990
Common carriers are bound to observe extraordinary diligence over the goods
they transport.
We need only to stress that from the nature of their business and for reasons of
public policy, common carriers are bound to observe extraordinary diligence over the
goods they transport according to all the circumstances of each case. In the event of
loss, destruction or deterioration of the insured goods, common carriers are
responsible, unless they can prove that the loss, destruction or deterioration was
brought about by the causes specified in Article 1734 of the Civil Code. In all other
cases, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence.
Aboitiz Shipping Corp. vs. New India Assurance Co., Ltd., G.R. No. 156978, August 24,
2007
A common carrier and, as such, is obliged to exercise extraordinary diligence in

transporting its passengers safely.
Victory Liner, Inc. vs. Pablo Race, G.R. No. 164820, December 8, 2008
A common carrier, from the nature of its business and for reasons of public policy,
is bound to observe extraordinary diligence for the safety of the passengers it
transports.
Armando G. Yrasuegui vs. Philippine Airlines, Inc., G.R. No. 168081, October 17, 2008
A common carrier is bound by law to exercise extraordinary diligence and utmost

care in ensuring for the safety and welfare of its passengers with due regard for all the
circumstances.
Philippine Airlines, Inc. vs. Court of Appeals, et al., G.R. No. 123238, September 22,
2008
Mere proof of delivery of the goods in good order to a common carrier and of their
arrival in bad order at their destination constitutes a prima facie case of fault or
negligence against the carrier. If no adequate explanation is given as to how the
deterioration, loss, or destruction of the goods happened, the transporter shall be held
responsible.
166250, July 26, 2010
Art. 1734 - When common carriers are not responsible for loss, destruction, or
deterioration of goods
Iron Bulk Shipping Phil., Co., Ltd. vs. Remington Industrial Sales Corp., G.R. No.
136960, December 8, 2003
DSR-Senator Lines vs. Federal Phoenix Assurance Co., Inc., G.R. No. 135377,
October 7, 2003
Asia Lighterage and Shipping, Inc. vs. Court of Appeals, G.R. No. 147246, August 19,
2003
Phil. American General Insurance vs. MGG Marine Services, G.R. No. 135645, March
8, 2002
Eastern Shipping Lines, Inc. vs. Court of Appeals, G.R. No. 97412, July 12, 1994
Though it is true that common carriers are presumed to have been at fault or to
have acted negligently if the goods transported by them are lost, destroyed, or
deteriorated, and that the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption, the plaintiff must still, before the
burden is shifted to the defendant, prove that the subject shipment suffered actual
shortage. This can only be done if the weight of the shipment at the port of origin and
its subsequent weight at the port of arrival have been proven by a preponderance of
evidence, and it can be seen that the former weight is considerably greater than the
latter weight, taking into consideration the exceptions provided in Article 1734 of the
Civil Code.
Asian Terminals, Inc. vs. Simon Enterprises, Inc., G.R. No. 177116, February 27, 2013
The Berth Term Grain Bill of Lading states that the subject shipment was carried
with the qualification "Shipper's weight, quantity and quality unknown," meaning that
it was transported with the carrier having been oblivious of the weight, quantity, and
quality of the cargo. This interpretation of the quoted qualification is supported by
Wallem Philippines Shipping, Inc. v. Prudential Guarantee & Assurance, Inc., a case
involving an analogous stipulation in a bill of lading, wherein the Supreme Court held
that:
Indeed, as the bill of lading indicated that the contract of carriage was
under a "said to weigh" clause, the shipper is solely responsible for the
loading while the carrier is oblivious of the contents of the shipment. . . .
The fact that the cargo was shipped with the arrangement "Shipper's weight,
quantity and quality unknown," indeed means that the weight of the cargo could not
be determined using as basis the figures written on the Berth Term Grain Bill of
Lading. . . . Consequently, the respondent must still prove the actual weight of the
subject shipment at the time it was loaded at the port of origin so that a conclusion
may be made as to whether there was indeed a shortage for which petitioner must be
liable. . . The respondent having failed to present evidence to prove the actual weight
of the subject shipment when it was loaded onto the M/V "Tern," its cause of action
must then fail because it cannot prove the shortage that it was alleging. Indeed, if the
claimant cannot definitively establish the weight of the subject shipment at the point
of origin, the fact of shortage or loss cannot be ascertained. The claimant then has no
basis for claiming damages resulting from an alleged shortage.
Asian Terminals, Inc. vs. Simon Enterprises, Inc., G.R. No. 177116, February 27, 2013
citing Wallem Philippines Shipping, Inc. v. Prudential Guarantee & Assurance, Inc., 445
Phil. 136, 153 (2003)
Art. 1735 - When common carriers are presumed to have been at fault or to
have acted negligently
Presumption of Fault or Negligence by Common Carriers
A business intended to serve the travelling public primarily, a contract of carriage

is imbued with public interest. The law governing common carriers consequently
imposes an exacting standard. Article 1735 of the Civil Code provides that in case of
lost or damaged goods, common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed extraordinary diligence as
required by Article 1733. Thus, in an action based on a breach of contract of carriage,
the aggrieved party does not have to prove that the common carrier was at fault or was
negligent. All that he has to prove is the existence of the contract and the fact of its
non-performance by the carrier.
Air France vs. Bonifacio H. Gillego, G.R. No. 165266, December 15, 2010
Aboitiz Shipping Corp. vs. Insurance Company of North America, G.R. No. 168402,
August 6, 2008
Home Insurance Corp. vs. Court of Appeals, G.R. No. 109293, August 18, 1993
Extraordinary diligence must include safeguarding the shipment from damage

coming from natural elements such as rainfall.
Aboitiz Shipping Corp. vs. Insurance Co. of North America, G.R. No. 168402, August 6,
2008
Art. 1736 - Extraordinary responsibility of common carriers
Eastern Shipping Lines, Inc. vs. Court of Appeals, G.R. No. 80936, October 17, 1990
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary
responsibility of the common carrier begins from the time the goods are delivered to
the carrier. This responsibility remains in full force and effect even when they are
temporarily unloaded or stored in transit, unless the shipper or owner exercises the
right of stoppage in transitu, and terminates only after the lapse of a reasonable time
for the acceptance of the goods by the consignee or such other person entitled to
receive them. And, there is delivery to the carrier when the goods are ready for and
have been placed in the exclusive possession, custody and control of the carrier for the
purpose of their immediate transportation and the carrier has accepted them. Where
such a delivery has thus been accepted by the carrier, the liability of the common
carrier commences eo instanti.
Benito Macam vs. Court of Appeals, G.R. No. 125524, August 25, 1999
Aniceto G. Saludo, Jr. vs. Court of Appeals, G.R. No. 95536, March 23, 1992
Art. 1739 - Common carrier must exercise due diligence to prevent or

minimize loss before, during and after natural disaster to be exempt from
liability
Alejandro Arada vs. Court of Appeals, G.R. No. 98243, July 1, 1992
Eastern Shipping Lines, Inc. vs. Intermediate Appellate Court, G.R. No. L-69044. May
29, 1987
Art. 1742 - Common carrier must exercise due diligence to forestall or lessen
loss
Iron Bulk Shipping Phil., Co., Ltd. vs. Remington Industrial Sales Corp., G.R. No.
136960, December 8, 2003
Art. 1744 - Stipulation limiting liability of common carrier to degree less than
extraordinary diligence
Samar Mining Co., Inc. vs. Nordeutscher Lloyd, G.R. No. L-28673. October 23, 1984
Amparo Servando vs. Phil. Steam Navigation Co., G.R. Nos. L-36481-2. October 23,
1982
It is to be noted that the Civil Code does not limit the liability of the common
carrier to a fixed amount per package. In all matters not regulated by the Civil Code,
the rights and obligations of common carriers are governed by the Code of Commerce
and special laws. Thus, the COGSA supplements the Civil Code by establishing a
provision limiting the carrier's liability in the absence of a shipper's declaration of a
higher value in the bill of lading.
166250, July 26, 2010
Art. 1745 - Stipulations considered unreasonable, unjust and contrary to

public policy
June 30, 1997
Estrellita M. Bascos vs. Court of Appeals, G.R. No. 101089, April 7, 1993
Pedro de Guzman vs. CA and Ernesto Cendaña, G.R. No. L-47822, December 22,
1988
Art. 1749 - Stipulation limiting common carrier's liability to value of the goods
appearing in bill of lading
Phil. Charter Insurance Corp. vs. Neptune Orient Lines, et al., G.R. No. 145044, June
12, 2008
A stipulation in the bill of lading limiting the common carrier's liability for loss or
destruction of a cargo to a certain sum, unless the shipper or owner declares a greater
value, is sanctioned by law.
Philippine Charter Insurance Corp. vs. Neptune Orient Lines, et al., G.R. No. 145044,
June 12, 2008
A bill of lading is a written acknowledgement of the receipt of goods and an

agreement to transport and to deliver them at a specified place to a person named or
on his or her order. It operates both as a receipt and as a contract. It is a receipt for the
goods shipped and a contract to transport and deliver the same as therein stipulated.
As a receipt, it recites the date and place of shipment, describes the goods as to
quantity, weight, dimensions, identification marks, condition, quality, and value. As a
contract, it names the contracting parties, which include the consignee; fixes the route,
destination, and freight rate or charges; and stipulates the rights and obligations
assumed by the parties.
166250, July 26, 2010
Art. 1750 - Contract fixing the sum that may be recovered by the owner or
shipper for the loss, destruction, or deterioration of the goods, when valid
Phil. Charter Insurance Corp. vs. Neptune Orient Lines, et al., G.R. No. 145044, June
12, 2008
A stipulation in the bill of lading limiting the common carrier's liability for loss or
destruction of a cargo to a certain sum, unless the shipper or owner declares a greater
value, is sanctioned by law.
Philippine Charter Insurance Corp. vs. Neptune Orient Lines, et al., G.R. No. 145044,
June 12, 2008
Art. 1753 - Governing law
Maritime Company of the Phils. vs. Court of Appeals, G.R. No. 47004, March 8, 1989
Eastern Shipping Lines, Inc. vs. Intermediate Appellate Court, G.R. No. L-69044. May
29, 1987
Art. 1755 - Duty or common carrier for safety of passengers
Japan Airlines vs. Jesus Simangan, G.R. No. 170141, April 22, 2008
Dangwa Transportation Co., Inc. vs. Court of Appeals, G.R. No. 95582, October 7,
1991
Kapalaran Bus Line vs. Angel Coronado, G.R. No. 85331, August 25, 1989
A common carrier is bound by law to exercise extraordinary diligence and utmost

care in ensuring for the safety and welfare of its passengers with due regard for all the
circumstances.
2008
A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
Art. 1756 - Common carriers presumed at fault or negligent in case of death of
or injuries to passengers
Batangas Laguna Tayabas Bus Co. vs. Intermediate Appellate Court, G.R. Nos.
74387-90, Nov. 14, 1988
Art. 1759 - When common carriers are liable for negligence or wilful acts of its
employees
Baliwag Transit, Inc. vs. Court of Appeals, G.R. No. 116110, May 15, 1996
Art. 1762 - Contributory negligence of passenger
Philippine National Railways vs. Court of Appeals, G.R. No. L-55347. October 4, 1985
Art. 1763 - When common carrier is responsible for wilful acts or negligence
of other passengers or of strangers
Jose Pilapil vs. Court of Appeals, G.R. No. 52159. December 22, 1989
A common carrier is bound to carry its passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances.
Art. 1764 - Damages against common carriers
Suplicio Lines, Inc. vs. Court of Appeals, G.R. No. 113578, July 14, 1995
Philippine Airlines, Inc. vs. Court of Appeals, G.R. No. 54470, May 8, 1990
The "receipt by a person of a share in the profits of a business is prima facie

evidence that he is a partner in the business."
Philex Mining Corp. vs. CIR, G.R. No. 148187, April 16, 2008
As a general rule, moral damages are not recoverable in actions for damages
predicated on a breach of contract, unless there is fraud or bad faith. As an exception,
moral damages may be awarded in case of breach of contract of carriage that results in
the death of a passenger, in accordance with Article 1764, in relation to Article 2206
(3) of the Civil Code.
[Articles 1764 and 2206] set forth the persons entitled to moral damages. The
omission from Article 2206 (3) of the brothers and sisters of the deceased passenger
reveals the legislative intent to exclude them from the recovery of moral damages for
mental anguish by reason of the death of the deceased. Inclusio unius est exclusio
alterius.
As a general rule, indeed, moral damages are not recoverable in an action

predicated on a breach of contract. This is because such action is not included in
Article 2219 of the Civil Code as one of the actions in which moral damages may be
recovered. By way of exception, moral damages are recoverable in an action
predicated on a breach of contract: (a) where the mishap results in the death of a
passenger, as provided in Article 1764, in relation to Article 2206 (3), of the Civil
Code; and (b) where the common carrier has been guilty of fraud or bad faith, as
provided in Article 2220 of the Civil Code.
Philtranco Service Enterprises, Inc. vs. Felix Paras, et al., G.R. No. 161909, April 25,
2012
Art. 1766 - Code of Commerce and other special laws
Art. 1767 - Contract of partnership
Elements of a Partnership
The fact that those who agree to form a co-ownership share or do not share any
profits made by the use of the property held in common does not convert their venture
into a partnership. Or the sharing of the gross returns does not of itself establish a
partnership whether or not the persons sharing therein have a joint or common right or
interest in the property. This only means that, aside from the circumstance of profit,
the presence of other elements constituting partnership is necessary, such as the clear
intent to form a partnership, the existence of a juridical personality different from that
of the individual partners, and the freedom to transfer or assign any interest in the
property by one with the consent of the others.
Federico Jarantilla, Jr. vs. Antonieta Jarantilla, et al., G.R. No. 154486, December 1,
2010
Vicente Sy vs. Court of Appeals, G.R. No. 142293, February 27, 2003
Antonia. Torres vs. Court of Appeals, G.R. No. 134559, December 9, 1999
Lim Tong Lim vs. Phil. Fishing Gear Industries, G.R. No. 136448, November 3, 1999
Afisco Insurance Corp. vs. Court of Appeals, G.R. No. 112675, January 25, 1999
Under a contract of partnership, two or more persons bind themselves to contribute
money, property, or industry to a common fund, with the intention of dividing the
profits among themselves.
Art. 1768 - Partnership has a juridical personality
Under Art. 1768 of the Civil Code, a partnership "has a juridical personality
separate and distinct from that of each of the partners." The partners cannot be held
liable for the obligations of the partnership unless it is shown that the legal fiction of a
different juridical personality is being used for fraudulent, unfair, or illegal purposes.
Alfredo N. Aguila vs. Court of Appeals, G.R. No. 127347, November 25, 1999
Art. 1769 - Rules in determining whether partnership exists
Heirs of Jose Lim vs. Juliet Villa Lim, G.R. No. 172690, March 3, 2010
Heirs of Tan Eng Kee vs. Court of Appeals, G.R. No. 126881, October 3, 2000
Art. 1769 (4) - The receipt by a person of a share of the profits of a business is
prima facie evidence that he is a partner in the business
Art. 1773 - Inventory of immovable property contributed to partnership
Antonia Torres vs. Court of Appeals, G.R. No. 134559, December 9, 1999
Art. 1786 - Every partner is a debtor of the partnership
Isabelo Moran, Jr. vs. Court of Appeals, G.R. No. 59956, October 31, 1984
Art. 1788 - Failure of partner to contribute sum of money
Isabelo Moran, Jr. vs. Court of Appeals, G.R. No. 59956, October 31, 1984
Art. 1822 - When partner commits wrongful act
Information Technology Foundation of the Phil. vs. Comelec, G.R. No. 159139, January
13, 2004
Art. 1823 - When partnership is bound to make good on loss
Information Technology Foundation of the Phil. vs. Comelec, G.R. No. 159139, January
13, 2004
Art. 1824 - When partners are liable solidarily with partnership
Information Technology Foundation of the Phils. vs. Comelec, G.R. No. 159139,
January 13, 2004
Art. 1828 - Dissolution of partnership
Since it is the partnership, as a separate and distinct entity, that must refund the
shares of the partners, the amount to be refunded is necessarily limited to its total
resources. In other words, it can only pay out what it has in its coffers, which consists
of all its assets. However, before the partners can be paid their shares, the creditors of
the partnership must first be compensated. After all the creditors have been paid,
whatever is left of the partnership assets becomes available for the payment of the
partners' shares.
Federico Jarantilla, Jr. vs. Antonieta Jarantilla, et al., G.R. No. 154486, December 1,
2010
Benjamin Yu vs. National Labor Relations Commission, G.R. No. 97212, June 30, 1993
Art. 1829 - Winding up of affairs of partnership
Art. 1830(b) - When dissolution is caused
Eufracio D. Rojas vs. Constancio B. Maglana, G.R. No. 30616, December 10, 1990
Art. 1840 - When creditors of dissolved partnership are also creditors of

person or partnership continuing the business
Art. 1842 - Right to account of interest
Emilio Emnace vs. Court of Appeals, G.R. No. 126334, November 23, 2001
Art. 1868 - Contract of agency
Chemphil Export & Import Corporation vs. Court of Appeals, G.R. Nos. 112438-39,
December 12, 1995
By the contract of agency, a person binds himself to render some service or to do

something in representation or on behalf of another, with the consent or authority of
the latter.
Filipinas Life Assurance Co. vs. Clemente N. Pedroso, et al., G.R. No. 159489,
February 4, 2008
In a contract of agency, a person binds himself to render some service or to do

something in representation or on behalf of another with the latter's consent. The
underlying principle of the contract of agency is to accomplish results by using the
services of others — to do a great variety of things like selling, buying,
manufacturing, and transporting. Its purpose is to extend the personality of the
principal or the party for whom another acts and from whom he or she derives the
authority to act. It is said that the basis of agency is representation, that is, the agent
acts for and on behalf of the principal on matters within the scope of his authority and
said acts have the same legal effect as if they were personally executed by the
principal. By this legal fiction, the actual or real absence of the principal is converted
into his legal or juridical presence — qui facit per alium facit per se.
The elements of the contract of agency are: (1) consent, express or implied, of the
parties to establish the relationship; (2) the object is the execution of a juridical act in
relation to a third person; (3) the agent acts as a representative and not for himself; (4)
the agent acts within the scope of his authority.
Eurotech Industrial Technologies vs. Edwin Cuizon, et al., G.R. No. 167552, April 23,
2007
Under the doctrine of apparent authority, acts and contracts of the agent, as are
within the apparent scope of the authority conferred on him, although no actual
authority to do such acts or to make such contracts has been conferred, bind the
principal. The principal's liability, however, is limited only to third persons who have
been led reasonably to believe by the conduct of the principal that such actual
authority exists, although none was given. In other words, apparent authority is
determined only by the acts of the principal and not by the acts of the agent. There can
be no apparent authority of an agent without acts or conduct on the part of the
principal; such acts or conduct must have been known and relied upon in good faith as
a result of the exercise of reasonable prudence by a third party as claimant, and such
acts or conduct must have produced a change of position to the third party's detriment.
G.R. No. 163825, July 13, 2010
It is a settled rule that persons dealing with an agent are bound at their peril, if they
would hold the principal liable, to ascertain not only the fact of agency but also the
nature and extent of the agent's authority, and in case either is controverted, the
burden of proof is upon them to establish it.
G.R. No. 163825, July 13, 2010
Art. 1869 - Agency may be express or implied
Article 1869 of the Civil Code states that implied agency is derived from the acts of
the principal, from his silence or lack of action, or his failure to repudiate the agency,
knowing that another person is acting on his behalf without authority. Implied agency,
being an actual agency, is a fact to be proved by deductions or inferences from other
facts. On the other hand, apparent authority is based on estoppel and can arise from
two instances. First, the principal may knowingly permit the agent to hold himself out
as having such authority, and the principal becomes estopped to claim that the agent
does not have such authority. Second, the principal may clothe the agent with the
indicia of authority as to lead a reasonably prudent person to believe that the agent
actually has such authority. In an agency by estoppel, there is no agency at all, but the
one assuming to act as agent has apparent or ostensible, although not real, authority to
represent another. The law makes no presumption of agency and proving its existence,
nature and extent is incumbent upon the person alleging it. Whether or not an agency
has been created is a question to be determined by the fact that one represents and is
acting for another.
Yun Kwan Byung vs. PAGCOR, G.R. No. 163553, December 11, 2009
The basis for agency is representation, that is, the agent acts for and on behalf of
the principal on matters within the scope of his authority and said acts have the same
legal effect as if they were personally executed by the principal. On the part of the
principal, there must be an actual intention to appoint or an intention naturally
inferable from his words or actions, while on the part of the agent, there must be an
intention to accept the appointment and act on it. Absent such mutual intent, there is
generally no agency.
Yun Kwan Byung vs. PAGCOR, G.R. No. 163553, December 11, 2009
Art. 1874 - Authority of agent in sale of land
Estate of Lino Olaguer, et al. vs. Emiliano M. Ongjoco, G.R. No. 173312, August 26,
2008
Regina P. Dizon vs. Court of Appeals, G.R. No. 122544, January 28, 1999
Art. 1878 - Special powers of attorney
Estate of Lino Olaguer, et al. vs. Emiliano M. Ongjoco, G.R. No. 173312, August 26,
2008
12, 2004
Antonio K. Litonjua vs. Mary Ann Grace Fernandez, G.R. No. 148116, April 14, 2004
Shopper's Paradise Realty & Development Corp. vs. Efren Roque, G.R. No. 148775,
January 13, 2004
Guillermo Adriano vs. Romulo Pangilinan, G.R. No. 137471, January 16, 2002
People of the Phil vs. Jaime Carpo, G.R. No. 132676, April 4, 2001
Gloria A. Anacleto vs. Alexander Van Twest, G.R. No. 131411, August 29, 2000
Loyola Security and Detective Agency vs. National Labor Relations Commission, G.R.
No. 113287, May 9, 1995
Conchita T. Vda. De Chua, et al. vs. Intermediate Appellate Court, G.R. No. 70909,
January 5, 1994
Union of Filipino Workers vs. NLRC, G.R. No. 90519, March 23, 1992
A power of attorney must be strictly construed and pursued. The instrument will be
held to grant only those powers which are specified therein, and the agent may neither
go beyond nor deviate from the power of attorney. Where powers and duties are
specified and defined in an instrument, all such powers and duties are limited and are
confined to those which are specified and defined, and all other powers and duties are
excluded. This is but in accord with the disinclination of courts to enlarge the
authority granted beyond the powers expressly given and those which incidentally
flow or derive therefrom as being usual and reasonably necessary and proper for the
performance of such express powers.
Lillian N. Mercado, et al. vs. Allied Banking Corp., G.R. No. 171460, July 27, 2007
It is a general rule that a power of attorney must be strictly construed; the

instrument will be held to grant only those powers that are specified, and the agent
may neither go beyond nor deviate from the power of attorney. However, the rule is
not absolute and should not be applied to the extent of destroying the very purpose of
the power. If the language will permit, the construction that should be adopted is that
which will carry out instead of defeat the purpose of the appointment. Clauses in a
power of attorney that are repugnant to each other should be reconciled so as to give
effect to the instrument in accordance with its general intent or predominant purpose.
Furthermore, the instrument should always be deemed to give such powers as
essential or usual in effectuating the express powers.
Eduardo B. Olaguer vs. Emilio Purugganan, Jr., et al., G.R. No. 158907, February 12,
2007
Art. 1883 - If agent acts in his own name
National Food Authority vs. Intermediate Appellate Court, G.R. No. 75640, April 5, 1990
Art. 1884 - Agent is bound by his acceptance
BA Finance Corporation vs. Court of Appeals, G.R. No. 82040, August 27, 1991
Art. 1897 - Agent not personally liable
Rustan Pulp & Paper Mills, Inc. vs. Intermediate Appellate Court, G.R. No. 70789,
October 19, 1992
Schmid & Oberly, Inc. vs. RJL Martinez Fishing Corp., G.R. No. No. 75198, October 18,
1988
The first part of Article 1897 declares that the principal is liable in cases when the
agent acted within the bounds of his authority. Under this, the agent is completely
absolved of any liability. The second part of the said provision presents the situations
when the agent himself becomes liable to a third party when he expressly binds
himself or he exceeds the limits of his authority without giving notice of his powers to
the third person. However, it must be pointed out that in case of excess of authority by
the agent, like what petitioner claims exists here, the law does not say that a third
person can recover from both the principal and the agent.
Eurotech Industrial Technologies vs. Edwin Cuizon, et al., G.R. No. 167552, April 23,
2007
The liability of an agent who exceeds the scope of his authority depends upon
whether the third person is aware of the limits of the agent's powers. . . . If the third
person dealing with an agent is unaware of the limits of the authority conferred by the
principal on the agent and he (third person) has been deceived by the non-disclosure
thereof by the agent, then the latter is liable for damages to him (V Tolentino,
Commentaries and Jurisprudence on the Civil Code of the Philippines, p. 422 [1992],
citing Sentencia [Cuba] of September 25, 1907). The rule that the agent is liable when
he acts without authority is founded upon the supposition that there has been some
wrong or omission on his part either in misrepresenting, or in affirming, or concealing
the authority under which he assumes to act (Francisco, V., Agency 307 [1952], citing
Hall v. Lauderdale, 46 N.Y. 70, 75).
Development Bank of the Philippines vs. Court of Appeals, G.R. No. 109937, March 21,
1994
Art. 1898 - When agent exceeds the scope of his authority
Safic Alcan & Cie vs. Imperial Vegetable Oil Co., G.R. No. 126751, March 28, 2001
Nicholas Y. Cervantes vs. Court of Appeals, G.R. No. 125138, March 2, 1999
Art. 1900 - If act is within the terms of the power of attorney
Siredy Enterprises vs. Court of Appeals, G.R. No. 129039, September 17, 2002
Art. 1902 - When agent contracts a third person
Lauro Cruz vs. Court of Appeals, G.R. No. 85685, September 11, 1991
Art. 1903 - Responsibility of commission agent for goods received on
consignment
Based on the express terms and tenor of the Kasunduan at Katibayan, Degaños
received and accepted the items under the obligation to sell them in behalf of the
complainants ("ang mga hiyas (jewelries) na natatala sa ibaba nito upang ipagbili ko
sa kapakanan ng nasabing Ginang"), and he would be compensated with the
overprice as his commission ("Ang bilang kabayaran o pabuya sa akin ay ano mang
halaga na aking mapalabis na mga halagang nakatala sa ibaba nito."). Plainly, the
transaction was a consignment under the obligation to account for the proceeds of
sale, or to return the unsold items. As such, he was the agent of the complainants in
the sale to others of the items listed in the Kasunduan at Katibayan.
In contrast, according the first paragraph of Article 1458 of the Civil Code, one of
the contracting parties in a contract of sale obligates himself to transfer the ownership
of and to deliver a determinate thing, while the other party obligates himself to pay
therefor a price certain in money or its equivalent. Contrary to the contention of
Degaños, there was no sale on credit to him because the ownership of the items did
not pass to him.
Art. 1909 - Agent responsible for fraud or negligence
Travel Wide Associated Sales vs. Court of Appeals, G.R. No. 77356, July 15, 1991
Metropolitan Bank & Trust Company vs. Court of Appeals, G.R. No. 88866, February
18, 1991
Art. 1910 - Obligations of principal
Filipinas Life Assurance Company vs. Clemente N. Pedroso, G.R. No. 159489,
February 4, 2008
Woodchild Holdings vs. Roxas Electric and Const. Co., G.R. No. 140667, August 12,
2004
Santos B. Areola vs. Court of Appeals, G.R. No. 95641, September 22, 1994
Prudential Bank vs. Court of Appeals, G.R. No. 108957, June 14, 1993
Sylvia H. Bedia vs. Emily A. White, G.R. No. 94050, November 21, 1991
The law allows a corporation to ratify the unauthorized acts of its corporate officer.
NYK-FIL Ship Management, Inc., et al. vs. Alfonso T. Talavera, G.R. No. 175894,
November 14, 2008
The acts of an agent beyond the scope of his authority do not bind the principal,
unless the principal ratifies them, expressly or impliedly.
February 4, 2008
Art. 1911 - When principal is solidarily liable with agent
It is intended to protect the rights of innocent persons. In such a situation, both the
principal and the agent may be considered as joint feasors whose liability is joint and
solidary (Verzosa vs. Lim, 45 Phil. 416).
Manila Remnant Co., Inc. vs. Court of Appeals, G.R. No. 82978, November 22, 1990
Even when the agent exceeds his authority, the principal is still solidarily liable
together with the agent if the principal allowed the agent to act as though the agent
had full powers.
February 4, 2008
Art. 1918(1) - If agent acts in contravention of principal's instructions
Art. 1919(3) - When agency is extinguished
Susana De Guzman Buado vs. Eufracio T. Layag, A.C. No. 5182, August 12, 2004
Estate of Juliana Diez vda. de Gabriel vs. Commissioner of Internal Revenue, G.R. No.
155541, January 27, 2004
Art. 1924 - Agency is revoked if principal directly manages business entrusted

to agent
CMS Logging, Inc. vs. Court of Appeals, G.R. No. 41420, July 10, 1992
Art. 1927 - An agency cannot be revoked; conditions therefor
In an agency coupled with interest, it is the agency that cannot be revoked or

withdrawn by the principal due to an interest of a third party that depends upon it, or
the mutual interest of both principal and agent.
Art. 1933 - Commodatum and mutuum
Producers Bank of the Phils. vs. Court of Appeals, G.R. No. 115324, February 19, 2003
Yong Chan Kim vs. People of the Phils., G.R. No. 84719, January 25, 1991
Art. 1934 - Accepted promise to deliver something is binding upon the parties
Celestina T. Naguiat vs. Court of Appeals, G.R. No. 118375, October 3, 2003
BPI Investment Corp. vs. Court of Appeals, G.R. No. 133632, February 15, 2002
Art. 1935 - Bailee in commodatum acquires use of thing loaned but not its
fruits
Producers Bank of the Phil. vs. Court of Appeals, et al., G.R. No. 115324, February 19,
2003
Art. 1936 - Consumable goods may be the subject of commodatum
Producers Bank of the Phils. vs. Court of Appeals, G.R. No. 115324, February 19, 2003
Art. 1946 - Obligation of bailor
Art. 1947 - Precarium
Art. 1953 - Simple loan or mutuum
Asean Pacific Planners, et al. vs. City of Urdaneta, et al., G.R. No. 162525, September
23, 2008
People of the Phil. vs. Teresita Puig, et al., G.R. Nos. 173654-765, August 28, 2008
Mariano Un Ocampo III vs. People of the Phils., G.R. Nos. 156547-51 & 156384-85,
February 4, 2008
Yong Chan Kim vs. People of the Phils., G.R. No. 84719, January 25, 1991
The relationship of the depositors and the Bank or similar institution is that of
creditor-debtor. Such deposit may be setoff against the obligation of the depositor
with the bank or similar institution.
Sps. Ramon and Narividad Nisce vs. Equitable PCI Bank, Inc., G.R. No. 167434,
February 19, 2007
In a contract of loan, a person who receives a loan or money or any fungible thing
acquires ownership thereof and is bound to pay the creditor an equal amount of the
same kind and quality.
Mariano Un Ocampo III vs. People of the Philippines, G.R. Nos. 156547-51 and
156384-85, February 4, 2008
A debtor can appropriate the thing loaned without any responsibility or duty to his
creditor to return the very thing that was loaned or to report how the proceeds were
used. Nor can he be compelled to return the proceeds and fruits of the loan, for there
is nothing under our laws that compel a debtor in a contract of loan to do so. As
owner, the debtor can dispose of the thing borrowed and his act will not be considered
misappropriation of the thing. The only liability on his part is to pay the loan together
with the interest that is either stipulated or provided under existing laws.
Republic of the Phil. vs. Sandiganbayan (First Division), et al., G.R. Nos. 166859,
169203 & 180702, April 12, 2011
The relationship between a bank and a client is one of debtor-creditor.

Art. 1955 - If what was loaned is a fungible thing other than money
In a contract of loan, one of the parties (creditor) delivers money or other

consumable thing to another (debtor) on the condition that the same amount of the
same kind and quality shall be paid. Owing to the consumable nature of the thing
loaned, the resulting duty of the borrower in a contract of loan is to pay, not to return,
to the creditor or lender the very thing loaned. This explains why the ownership of the
thing loaned is transferred to the debtor upon perfection of the contract. Ownership of
the thing loaned having transferred, the debtor enjoys all the rights conferred to an
owner of property, including the right to use and enjoy (jus utendi), to consume the
thing by its use (jus abutendi), and to dispose (jus disponendi), subject to such
limitations as may be provided by law. Evidently, the resulting relationship between a
creditor and debtor in a contract of loan cannot be characterized as fiduciary.
Republic of the Phil. vs. Sandiganbayan (First Division), et al., G.R. Nos. 166859,
169203 & 180702, April 12, 2011
Art. 1956 - No interest shall be due unless expressly stipulated in writing
Sps. Felimon and Maria Barrera vs. Sps. Emiliano and Maria Concepcion Lorenzo, G.R.
No. 130994, September 18, 2002
Ponciano Almeda vs. Court of Appeals, G.R. No. 113412, April 17, 1996
It is true that the imposition of an unconscionable rate of interest on a money debt

is immoral and unjust and the court may come to the aid of the aggrieved party to that
contract. However, before doing so, courts have to consider the settled principle that
the law will not relieve a party from the effects of an unwise, foolish or disastrous
contract if such party had full awareness of what she was doing.
After years of benefiting from the proceeds of the loans bearing an interest rate of
6% to 7% per month and paying for the same, the debtor cannot now go to court to
have the said interest rate annulled on the ground that it is excessive, iniquitous,
unconscionable, exorbitant, and absolutely revolting to the conscience of man. "This
is so because among the maxims of equity are (1) he who seeks equity must do equity,
and (2) he who comes into equity must come with clean hands. The latter is a
frequently stated maxim which is also expressed in the principle that he who has done
inequity shall not have equity. It signifies that a litigant may be denied relief by a
court of equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful as to the controversy in issue."
Article 1956 of the Civil Code specifically mandates that "no interest shall be due
unless it has been expressly stipulated in writing." Under this provision, the payment
of interest in loans or forbearance of money is allowed only if: (1) there was an
express stipulation for the payment of interest; and (2) the agreement for the payment
of interest was reduced in writing. The concurrence of the two conditions is required
for the payment of interest at a stipulated rate.
March 9, 2010
Article 1956 of the Civil Code, which refers to monetary interest, specifically
mandates that no interest shall be due unless it has been expressly stipulated in
writing. Therefore, payment of monetary interest is allowed only if: (1) there was an
express stipulation for the payment of interest; and (2) the agreement for the payment
of interest was reduced in writing.
The concurrence of the two conditions is required for the payment of monetary
interest.
We agree with petitioners' interpretation that in case of default, the consent of the
respondent is not needed in order to impose interest at the current bank lending rate.
Pan Pacific Service Contractors, Inc., et al. vs. Equitable PCI Bank, G.R. No. 169975,
March 18, 2010
Art. 1957 - Contracts and stipulations intended to circumvent laws against
usury shall be void
First Metro Investment Corporation vs. Este Del Sol Mountain Reserve, G.R. No.
141811, November 15, 2001
Investors Finance Corp. vs. Autoworld Sales Corp., G.R. No. 128990, September 21,
2000
Private Development Corporation of the Phil. vs. Intermediate Appellate Court, G.R. No.
73198, September 2, 1992
Art. 1962 - Deposit
Bank of the Philippine Islands vs. Intermediate Appellate Court, G.R. No. L-66826,
August 19, 1988
Art. 1980 - Deposits of money in banks shall be governed by provisions

concerning simple loan
People of the Phil. vs. Teresita Puig, et al., G.R. Nos. 173654-765, August 28, 2008
Consolidated Bank and Trust Corp. vs. Court of Appeals, G.R. No. 138569, September
11, 2003
Art. 2005 - Judicial deposit or sequestration
Zenith Insurance Corporation vs. Court of Appeals, G.R. No. L-57957, December 29,
1982
Art. 2014 - Any loser in a game of chance may recover his loss from the
winner
See Ban vs. Intermediate Appellate Court, G.R. No. L-66272, October 17, 1986
Art. 2016 - Creditors, spouse, descendants or persons entitled to be supported

by loser may institute action to recover losses
Ramon Nieves vs. Court of Appeals, G.R. No. 85184, June 3, 1991
Art. 2018 - If a contract which purports to be for the delivery of goods,

securities or shares of stock is entered into with the intention that the difference
between the price stipulated and the exchange or market price at the time of the
pretended delivery shall be paid by the loser to the winner, the transaction is null
and void
Onapal Philippines Commodities, Inc. vs. Court of Appeals, G.R. No. 90707, February
1, 1993
Art. 2028 - Compromise
22, 2008
Filcon Manufacturing Corp. vs. LMF-LMLC, G.R. No. 150166, July 26, 2004
February 13, 2004
Juan Asong vs. Intermediate Appellate Court, G.R. No. 74461, May 12, 1989
Compromise Construed
Article 2028 of the Civil Code defines a compromise as a contract whereby the
parties, by making reciprocal concessions, avoid litigation or put an end to one already
commenced. The purpose of compromise is to settle the claims of the parties and bar
all future disputes and controversies. However, criminal liability is not affected by
compromise for it is a public offense which must be prosecuted and punished by the
Government on its own motion, though complete reparation should have been made of
the damages suffered by the offended party. A criminal case is committed against the
People, and the offended party may not waive or extinguish the criminal liability that
the law imposes for the commission of the offense. Moreover, a compromise is not
one of the grounds prescribed by the Revised Penal Code for the extinction of
criminal liability.
Antonio Diaz vs. Davao Light and Power Co., Inc., et al., G.R. No. 160959, April 4, 2007
Article 2028 of the Civil Code spells out the nature of a compromise as a contract
whereby the parties, by making reciprocal concessions, avoid litigation or put an end
to one already commenced. Parties to a compromise are motivated by the hope of
gaining, balanced by the dangers of losing. It contemplates mutual concessions and
mutual gains to avoid the expenses of litigation, or, when litigation has already begun,
to end it because of the uncertainty of the result.
22, 2008
Philippine Journalist, Inc. vs. National Labor Relations Commission, G.R. No. 166421,
September 5, 2006
A compromise agreement is a contract whereby the parties, by making reciprocal

concessions, avoid a litigation or put an end to one already commenced.
UCPB General Insurance Corp. vs. M/V “Sarinderjit” Blue River Navigation Pte., Ltd.,
G.R. No. 182421, October 6, 2008
Far East Bank and Trust Co., et al. vs. Trust Union Shipping Corp., et al., G.R. No.
154716, September 16, 2008
Republic of the Philippines vs. Antonio Florendo, et al., G.R. No. 166866, March 27,
2008
22, 2008
A compromise is a contract whereby the parties, by making reciprocal concessions,

avoid litigation or put an end to one already commenced.
Anita Reyes-Mesugas vs. Alejandro A. Reyes, G.R. No. 174835, March 22, 2010
Mangontawar M. Gubat vs. NAPOCOR, G.R. No. 167415, February 26, 2010
The main purpose of a compromise agreement is to put an end to litigation because

of the uncertainty that may arise from it. Reciprocal concessions are the very heart and
life of every compromise agreement. By the nature of a compromise agreement, it
brings the parties to agree to something that neither of them may actually want, but for
the peace it will bring them without a protracted litigation.
Rosario P. Tan vs. Artemio G. Ramirez, et al., G.R. No. 158929, August 3, 2010, citing
Ramnani v. Court of Appeals, 413 Phil. 194, 207 (2001)
Art. 2029 - Court shall persuade litigants in a civil case to compromise
February 13, 2004
First Intramuros BF Condominium Corp. vs. NLRC, G.R. No. 103638, April 14, 1994
Art. 2032 - Court approval is necessary in compromises entered into by

guardians, parents, absentee's representatives, and administrators or executors
of decedent's estates
Settled is the rule that a probate court is a tribunal of limited jurisdiction. It acts on
matters pertaining to the estate but never on the rights to property arising from the
contract. It approves contracts entered into for and on behalf of the estate or the heirs
to it but this is by fiat of the Rules of Court.
Anita Reyes-Mesugas vs. Alejandro A. Reyes, G.R. No. 174835, March 22, 2010
Art. 2035 - When compromise is not valid
San Miguel Corporation vs. Sandiganbayan, G.R. Nos. 104637-38, September 14, 2000
Manuel De Asis vs. Court of Appeals, G.R. No. 127578, February 15, 1999
Republic of the Phils. vs. Sandiganbayan, G.R. No. 108292, September 10, 1993
Art. 2036 - Compromise comprises only those objects definitely stated therein
San Miguel Corporation vs. Sandiganbayan, G.R. Nos. 104637-38, September 14, 2000
Art. 2037 - A compromise has upon the parties the effect and authority of res
judicata
Sps. Emilio And Milagros Abinujar vs. Court of Appeals, G.R. No. 104133, April 18,
1995
Republic of the Phils. vs. Sandiganbayan, G.R. No. 108292, September 10, 1993
First Philippine Holdings Corporation vs. Sandiganbayan, G.R. No. 95197, September
30, 1991
Doroteo M. De Guia vs. Manuel V. Romillo, Jr., G.R. No. 51143, March 22, 1990
A compromise is a contract whereby the parties, by making reciprocal concessions,
avoid litigation or put an end to one already commenced. It is a consensual contract,
binding upon the signatories/privies, and it has the effect of res judicata. This cannot
however affect third persons who are not parties to the agreement.
Mangontawar M. Gubat vs. NAPOCOR, G.R. No. 167415, February 26, 2010
A compromise agreement intended to resolve a matter already under litigation is a

judicial compromise. Having judicial mandate and entered as its determination of the
controversy, such judicial compromise has the force and effect of a judgment. It
transcends its identity as a mere contract between the parties, as it becomes a
judgment that is subject to execution in accordance with the Rules of Court. Thus, a
compromise agreement that has been made and duly approved by the court attains the
effect and authority of res judicata, although no execution may be issued unless the
agreement receives the approval of the court where the litigation is pending and
compliance with the terms of the agreement is decreed.
PEA vs. Estate of Jesus S. Yujuico, et al., G.R. No. 181847, May 5, 2010
A compromise agreement is a contract, whereby the parties undertake reciprocal

obligations to avoid litigation, or put an end to one already commenced. The client
may enter into a compromise agreement with the adverse party to terminate the
litigation before a judgment is rendered therein. If the compromise agreement is found
to be in order and not contrary to law, morals, good customs and public policy, its
judicial approval is in order. A compromise agreement, once approved by final order
of the court, has the force of res judicata between the parties and will not be disturbed
except for vices of consent or forgery.
Malvar v. Kraft Food Phils., Inc., G.R. No. 183952, September 9, 2013
Art. 2040 - Final judgment may be subject of compromise
City of Zamboanga vs. Pelagio S. Mandi, G.R. No. 86760, April 30, 1991
Art. 2041 - When party may enforce compromise or regard it as rescinded and
insist upon original demand
Iloilo Traders Finance Inc. vs. Heirs of Oscar Soriano Jr., G.R. No. 149683, June 16,
2003
Estate of Salud Jimenez vs. Phil. Export Processing Zone, G.R. No. 137285, January
16, 2001
Province of Cebu vs. Ramon Am. Torres, G.R. No. 76950, December 15, 1988
Pasay City Government vs. Court of First Instance of Manila, G.R. No. L-32162,
September 28, 1984
Art. 2044 - Stipulation that arbitrators' award or decision shall be final is

valid
Gateway Electronics Corp., et al. vs. Asianbank Corp., G.R. No. 172041, December 18,
2008
Korea Technologies, Co., Ltd. vs. Alberto A. Lerma, et al., G.R. No. 143581, January 7,
2008
Lucas G. Adamson vs. Court of Appeals, G.R. No. 106879, May 27, 1994
Chung Fu Industries (Philippines) Inc. vs. Court of Appeals, G.R. No. 96283, February
25, 1992
Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause
or the finality and binding effect of an arbitral award.
Korea Technologies Co., Ltd. vs. Alberto A. Lerma, et al., G.R. No. 143581, January 7,
2008
Art. 2047 - Guaranty and suretyship
Gateway Electronics Corp., et al. vs. Asianbank, Corp., G.R. No. 172041, December
18, 2008
170852, September 12, 2008
Goldenrod vs. Honorable Court of Appeals and Pathfinder Holdings, G.R. No. 127232,
September 28, 2001
Baldomero Inciong vs. Court of Appeals, G.R. No. 96405, June 26, 1996
Pacific Banking Corporation vs. Intermediate Appellate Court, G.R. No. 72275,
November 13, 1991
A contract of suretyship is an agreement whereby a party called the surety,

guarantees the performance by another party, called the principal or obligor, of an
obligation or undertaking in favor of another party called the obligee. By its very
nature, under the laws regulating suretyship, the liability of the surety is joint and
several but is limited to the amount of the bond, and its terms are determined strictly
by the terms of the contract of suretyship in relation to the principal contract between
the obligor and the obligee.
American Home Insurance Co. of New York vs. F.F. Cruz & Co., Inc., G.R. No. 174926,
August 10, 2011
The surety is considered in law as possessed of the identity of the debtor in relation
to whatever is adjudged touching upon the obligation of the latter. Their liabilities are
so interwoven as to be inseparable. Although the contract of suretyship is, in essence,
secondary only to a valid principal obligation, the surety's liability to the creditor is
direct, primary, and absolute; he becomes liable for the debt and duty of another
although he possesses no direct or personal interest over the obligations nor does he
receive any benefit therefrom.
American Home Insurance Co. of New York vs. F.F. Cruz & Co., Inc., G.R. No. 174926,
August 10, 2011
A suretyship requires a principal debtor to whom the surety is solidarily bound by

way of an ancillary obligation of segregate identity from the obligation between the
principal debtor and the creditor. The suretyship does bind the surety to the creditor,
inasmuch as the latter is vested with the right to proceed against the former to collect
the credit in lieu of proceeding against the principal debtor for the same obligation. At
the same time, there is also a legal tie created between the surety and the principal
debtor to which the creditor is not privy or party to. The moment the surety fully
answers to the creditor for the obligation created by the principal debtor, such
obligation is extinguished. At the same time, the surety may seek reimbursement from
the principal debtor for the amount paid, for the surety does in fact "become
subrogated to all the rights and remedies of the creditor."
Salvador P. Escaño, et al. vs. Rafael Ortigas, Jr., G.R. No. 151953, June 29, 2007
Article 2047 itself specifically calls for the application of the provisions on solidary
obligations to suretyship contracts. Article 1217 of the Civil Code thus comes into
play, recognizing the right of reimbursement from a co-debtor (the principal debtor, in
case of suretyship) in favor of the one who paid (i.e., the surety). However, a
significant distinction still lies between a joint and several debtor, on one hand, and a
surety on the other. Solidarity signifies that the creditor can compel any one of the
joint and several debtors or the surety alone to answer for the entirety of the principal
debt. The difference lies in the respective faculties of the joint and several debtor and
the surety to seek reimbursement for the sums they paid out to the creditor.
A guarantor who binds himself in solidum with the principal debtor under the
provisions of the second paragraph does not become a solidary co-debtor to all intents
and purposes. There is a difference between a solidary co-debtor and a fiador in
solidum (surety). The latter, outside of the liability he assumes to pay the debt before
the property of the principal debtor has been exhausted, retains all the other rights,
actions and benefits which pertain to him by reason of the fiansa; while a solidary
co-debtor has no other rights than those bestowed upon him in Section 4, Chapter 3,
Title I, Book IV of the Civil Code.
The reference in the second paragraph of [Article 2047] to the provisions of

Section 4, Chapter 3, Title I, Book IV, on solidary or several obligations, however,
does not mean that suretyship is withdrawn from the applicable provisions governing
guaranty." For if that were not the implication, there would be no material difference
between the surety as defined under Article 2047 and the joint and several debtors, for
both classes of obligors would be governed by exactly the same rules and limitations.
Art. 2052 - Guaranty cannot exist without a valid obligation
Art. 2053 - A guaranty may be given as security for future debts
Nature of a Continuing Guaranty
A continuing guaranty is a recognized exception to the rule that an action to

foreclose a mortgage must be limited to the amount mentioned in the mortgage
contract. Under Article 2053 of the Civil Code, a guaranty may be given to secure
even future debts, the amount of which may not be known at the time the guaranty is
executed. This is the basis for contracts denominated as a continuing guaranty or
suretyship. A continuing guaranty is not limited to a single transaction, but
contemplates a future course of dealing, covering a series of transactions, generally
for an indefinite time or until revoked. It is prospective in its operation and is
generally intended to provide security with respect to future transactions within
certain limits, and contemplates a succession of liabilities, for which, as they accrue,
the guarantor becomes liable. In other words, a continuing guaranty is one that covers
all transactions, including those arising in the future, which are within the description
or contemplation of the contract of guaranty, until the expiration or termination
thereof.
Bank of Commerce, et al. vs. Sps. Andres and Eliza Flores, G.R. No. 174006,
December 8, 2010
When a Guaranty is Construed as Continuing
A guaranty shall be construed as continuing when, by the terms thereof, it is

evident that the object is to give a standing credit to the principal debtor to be used
from time to time either indefinitely or until a certain period, especially if the right to
recall the guaranty is expressly reserved. In other jurisdictions, it has been held that
the use of particular words and expressions, such as payment of "any debt," "any
indebtedness," "any deficiency," or "any sum," or the guaranty of "any transaction" or
money to be furnished the principal debtor "at any time" or "on such time" that the
principal debtor may require, has been construed to indicate a continuing guaranty.
December 8, 2010
A Mortgage Given to Secure Advancements is a Continuing Security
A mortgage given to secure advancements is a continuing security and is not

discharged by repayment of the amount named in the mortgage until the full amounts
of the advancements are paid. The mortgagors' full payment of the loans annotated on
the title of the property shall not effect the release of the mortgage because, by the
express terms of the mortgage, it was meant to secure all future debts of the spouses
and such debts had been obtained and remain unpaid. Unless full payment is made by
the spouses of all the amounts that they have incurred from mortgagee bank, the
property is burdened by the mortgage.
December 8, 2010
Philippine Blooming Mills, Inc. vs. Court of Appeals, G.R. No. 142381, October 15, 2003
South City Homes vs. BA Finance Corporation, G.R. No. 135462, December 7, 2001
Pacific Banking Corporation vs. Intermediate Appellate Court, G.R. No. 72275,
November 13, 1991
Art. 2054 - A guarantor may bind himself for less, but not for more than the
principal debtor
Pacific Banking Corporation vs. Intermediate Appellate Court, et al., G.R. No. 72275,
November 13, 1991
Art. 2054 enunciates the rule that the obligation of a guarantor may be less, but
cannot be more than the obligation of the principal debtor. The rule, however, cannot
plausibly be stretched to mean that a guarantor or surety is freed from liability as such
guarantor or surety in the event the principal debtor becomes insolvent or is unable to
pay the obligation. This interpretation would defeat the very essence of a suretyship
contract which, by definition, refers to an agreement whereunder one person, the
surety, engages to be answerable for the debt, default, or miscarriage of another
known as the principal.
Gateway Electronics Corp., et al. vs. Asianbank, Corp., G.R. No. 172041, December
18, 2008
Art. 2055 - A guaranty is not presumed
Sps. Antonio & Soledad Consing vs. Court of Appeals, G.R. No. 143584, March 10,
2004
Jacinto U. Diño vs. Court of Appeals, G.R. No. 89775, November 26, 1992
Art. 2058 - Guarantor cannot be compelled to pay creditor unless latter has
exhausted property of debtor
Goldenrod vs. Court of Appeals and Pathfinder Holdings, G.R. No. 127232, September
28, 2001
Art. 2059 (5) - Execution shall not take place if the execution on the property
of the principal debtor would not result in the satisfaction of the obligation
In order for the guarantor to make use of the benefit of excussion, he must set it up
against the creditor upon the latter's demand for payment and point out to the creditor
available property of the debtor within the Philippines sufficient to cover the amount
of the debt.
Benjamin Bitanga vs. Pyramid Construction Engineering Corp., G.R. No. 173526,
August 28, 2008
Art. 2060 - When the guarantor may make use of the benefit of excussion
In order for the guarantor to make use of the benefit of excussion, he must set it up
against the creditor upon the latter's demand for payment and point out to the creditor
available property of the debtor within the Philippines sufficient to cover the amount
of the debt.
Benjamin Bitanga vs. Pyramid Construction Engineering Corp., G.R. No. 173526,
August 28, 2008
Art. 2062 - In every action by creditor against the debtor, the former shall ask
the court to notify the guarantor
Pacionaria C. Baylon vs. Court of Appeals, G.R. No. 109941, August 17, 1999
Art. 2067 - The guarantor who pays is subrogated by virtue thereof to all the
rights which the creditor had against the debtor
The benefit of subrogation, an extinctive subjective novation by a change of

creditor, which "transfers to the person subrogated, the credit and all the rights thereto
appertaining, either against the debtor or against third persons", is granted by the
Article 2067 of the Civil Code only to the "guarantor (or surety) who pays".
27, 2008
Art. 2071 - The guarantor, even before having paid, may proceed against the
principal debtor
Autocorp Group, et al. vs. Intra-Strata Assurance Corp., et al., G.R. No. 166662, July
27, 2008
There are indeed cases in Article 2071 of the Civil Code wherein the guarantor or
surety, even before having paid, may proceed against the principal debtor, but in all
these cases, Article 2071 of the Civil Code merely grants the guarantor or surety an
action "to obtain release from the guaranty, or to demand a security that shall protect
him from any proceedings by the creditor and from the danger of insolvency of the
debtor".
27, 2008
Art. 2079 - Extension granted to the debtor by the creditor without the
consent of the guarantor extinguishes the guaranty
Sps. Vicky Tan Toh and Luis Toh vs. Solid Bank Corp., G.R. No. 154183, August 7,
2003
Art. 2080 - When guarantors are released from their obligation
Art. 2080 does not apply to contracts of suretyship.
Article 2080 of the Civil Code does not apply in a contract of suretyship. Art. 2047
of the Civil Code states that if a person binds himself solidarily with the principal
debtor, the provisions of Section 4, Chapter 3, Title I, Book IV of the Civil Code must
be observed. Accordingly, Articles 1207 up to 1222 of the Code (on joint and solidary
obligations) shall govern the relationship of petitioner with the bank.
Tomas Ang vs. Associated Bank, et al., G.R. No. 146511, September 5, 2007
Art. 2085 - Requisites of contracts of pledge and mortgage
2008
Land Bank of the Phils. vs. Republic of the Phils., G.R. No. 150824, February 4, 2008
Apolonia Ll. Ocampo vs. Fidela Ll. Ocampo, G.R. No. 150707, April 14, 2004
Mamerta Vda. De Jayme, et al. vs. Court of Appeals, G.R. No. 128669, October 4, 2002
Guillermo Adriano vs. Romulo Pangilinan, G.R. No. 137471, January 16, 2002
Flordeliza H. Cabuhat vs. The Honorable Court of Appeals, G.R. No. 122425,
September 28, 2001
Enrique M. Belo vs. Phil. National Bank, G.R. No. 134330, March 1, 2001
Manolo P. Cerna vs. Court of Appeals, G.R. No. L-48359, March 30, 1993
The validity of an accommodation mortgage is allowed under Article 2085 of the

Civil Code which provides that "[t]hird persons who are not parties to the principal
obligation may secure the latter by pledging or mortgaging their own property." An
accommodation mortgagor, ordinarily, is not himself a recipient of the loan, otherwise
that would be contrary to his designation as such.
2013
While it is true, . . . that a person dealing with registered lands need not go beyond
the certificate of title, it is likewise a well-settled rule that a purchaser or mortgagee
cannot close his eyes to facts which should put a reasonable man on his guard, and
then claim that he acted in good faith under the belief that there was no defect in the
title of the vendor or mortgagor.
Lourdes S. Arrofo vs. Pedro Quiño, G.R. No. 145794, January 26, 2005
Where the mortgagee does not directly deal with the registered owner of real
property, the law requires that a higher degree of prudence be exercised by the
mortgagee.
Jose T. Abad vs. Sps. Vivian and Ceasar Guimba, G.R. No. 157002, July 29, 2005
Unlike private individuals, [a mortgagee-bank] it is expected to exercise greater

care and prudence in its dealings, including those involving registered lands. A
banking institution is expected to exercise due diligence before entering into a
mortgage contract. The ascertainment of the status or condition of a property offered
to it as security for a loan must be a standard and indispensable part of its operations.
Edilberto Cruz vs. Bancom Finance Corporation, G.R. No. 147788, March 19, 2002
Articles 2085 and 2093 of the Civil Code enumerate the requisites essential to a
contract of pledge: (1) the pledge is constituted to secure the fulfillment of a principal
obligation; (2) the pledgor is the absolute owner of the thing pledged; (3) the persons
constituting the pledge have the free disposal of their property or have legal
authorization for the purpose; and (4) the thing pledged is placed in the possession of
the creditor, or of a third person by common agreement.
October 6, 2008
It is essential that the mortgagor be the absolute owner of the thing mortgaged.
Land Bank of the Philippines vs. Republic of the Philippines, G.R. No. 150824, February
4, 2008
It bears stressing that there can be no transfer of ownership if the delivery of the
property to the creditor is by way of security. In fact, in case of doubt as to whether a
transaction is one of pledge or dacion en pago, the presumption is that it is a pledge as
this involves a lesser transmission of rights and interests.
Union Bank of the Phil. vs. Alain Juniat, et al., G.R. No. 171569, August 1, 2011
Article 2085 of the Civil Code provides that a mortgage contract, to be valid, must
have the following requisites: (a) that it be constituted to secure the fulfilment of a
principal obligation; (b) that the mortgagor be the absolute owner of the thing
mortgaged; and (c) that the persons constituting the mortgage have free disposal of
their property, and in the absence of free disposal, that they be legally authorized for
the purpose. The presence of the second requisite — absolute ownership — is the
contentious determinative issue.
PNB vs. Sps. Alejandro and Myrna Reblando, G.R. No. 194014, September 12, 2012
It bears stressing that an accommodation mortgagor, ordinarily, is not himself a

recipient of the loan, otherwise that would be contrary to his designation as such. We
have held that it is not always necessary that the accommodation mortgagor be
apprised beforehand of the entire amount of the loan nor should it first be determined
before the execution of the Special Power of Attorney in favor of the debtor. This is
especially true when the words used by the parties indicate that the mortgage serves as
a continuing security for credit obtained as well as future loan availments.
2013
Art. 2087 - When thing pledged or mortgaged may be alienated for the
payment to the creditor
Sps. Nestor and Ma. Nona Borromeo vs. Court of Appeals, et al., G.R. No. 169846,
March 28, 2008
The mortgagee can sell the encumbered property to satisfy the outstanding debt.
Rafael R. Martelino, et al. vs. National Home Mortgage Finance Corp., et al., G.R. No.
160208, June 30, 2008
Art. 2088 - Creditor cannot appropriate or dispose things given by way of

pledge or mortgage
Leonides Mercado, et al. vs. Court of Appeals, et al., G.R. No. 169576, October 17,
2008
Sps. Wilfredo and Edna Ong vs. Roban Lending Corp., G.R. No. 172592, July 9, 2008
2008
Insular Life Savings and Trust Co. vs. Sps. Felix Mateo and Trinidad Runes, G.R. No.
152530, August 12, 2004
Uy Tong vs. Court of Appeals, G.R. No. 77465, May 21, 1988
A pacto commissorio is a provision for the automatic appropriation of the pledged

or mortgaged property by the creditor in payment of the loan upon its maturity. The
prohibition against a pacto commissorio is intended to protect the obligor, pledgor, or
mortgagor against being overreached by his creditor who holds a pledge or mortgage
over property whose value is much more than the debt. Where, as in this case, the
security for the debt is also money deposited in a bank, the amount of which is even
less than the debt, it was not illegal for the creditor to encash the time deposit
certificates to pay the debtors' overdue obligation, with the latter's consent. 05plpecda
A. Francisco Realty and Dev. Corp. vs. Court of Appeals, G.R. No. 125055, October 30,
1998
Imelda A. Nakpil vs. Intermediate Appellate Court, G.R. No. 74449, August 20, 1993
Hortensia L. Starke vs. Philippine Sugar Commission, G.R. No. 85997, August 19, 1992
Victoria Yau Chu vs. Court of Appeals, G.R. No. 78519, September 26, 1989
Article 2088 of the Civil Code prohibits the creditor from appropriating or
disposing the things pledged, and any contrary stipulation is void.
October 6, 2008
Since the original transaction between the parties was a mortgage, the subsequent
assignment of ownership of the subject lots to petitioners without the benefit of
foreclosure proceedings, partakes of the nature of a pactum commissorium, as
provided for under Article 2088 of the Civil Code.
Pactum commissorium is a stipulation empowering the creditor to appropriate the

thing given as guaranty for the fulfillment of the obligation in the event the obligor
fails to live up to his undertakings, without further formality, such as foreclosure
proceedings, and a public sale.
Art. 2089 - Pledge or mortgage is indivisible
Enrique M. Belo vs. Phil. National Bank, G.R. No. 134330, March 1, 2001
Phil. National Bank vs. Rustico De Los Reyes, G.R. No. 46898-99, November 28, 1989
Art. 2093 - Additional requisite in order to constitute a contract of pledge
Articles 2085 and 2093 of the Civil Code enumerate the requisites essential to a
contract of pledge: (1) the pledge is constituted to secure the fulfillment of a principal
obligation; (2) the pledgor is the absolute owner of the thing pledged; (3) the persons
constituting the pledge have the free disposal of their property or have legal
authorization for the purpose; and (4) the thing pledged is placed in the possession of
the creditor, or of a third person by common agreement.
October 6, 2008
Art. 2096 - When pledge has no effect against third persons
Union Bank of the Phil. vs. Alain Juniat, et al., G.R. No. 171569, August 1, 2011
Servicewide Specialists vs. Court of Appeals, G.R. No. 116363, December 10, 1999
Honesto Ong vs. Intermediate Appellate Court, G.R. No. 74073, September 13, 1991
Art. 2099 - Creditor to take care of the thing pledged
The creditor shall take care of the thing pledged with the diligence of a good father
of a family. This means that petitioners must take care of the pawns the way a prudent
person would as to his own property.
The diligence with which the law requires the individual at all times to govern his
conduct varies with the nature of the situation in which he is placed and the
importance of the act which he is to perform.
Art. 2102 - If pledge produces fruits, income, dividends, or interests, creditor

shall compensate what he receives with those owing
Art. 2105 - Debtor cannot ask for return of thing pledged against will of
creditor
Art. 2112 - Creditor to whom the credit has not been satisfied in due time may
proceed before a Notary Public to the sale of the thing pledged
Clementino Imperial vs. Mariano F. Santiago, AM P-01-1449, February 21, 2003
Insular Life Assurance Company vs. Robert Young, G.R. No. 140964, January 16, 2002
Art. 2125 - Registration in the Registry of Property
It is settled that registration in the public registry is notice to the whole world.
Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or
entry affecting registered land shall, if registered, filed or entered in the Office of the
Register of Deeds of the province or city where the land to which it relates lies, be
constructive notice to all persons from the time of such registering, filing or entering.
Under the rule of notice, it is presumed that the purchaser has examined every
instrument of record affecting the title. Such presumption may not be rebutted. He is
charged with notice of every fact shown by the record and is presumed to know every
fact shown by the record and to know every fact which an examination of the record
would have disclosed. This presumption cannot be overcome by any claim of
innocence or good faith. Otherwise, the very purpose and object of the law requiring a
record would be destroyed. Such presumption cannot be defeated by proof of want of
knowledge of what the record contains any more than one may be permitted to show
that he was ignorant of the provisions of the law. The rule that all persons must take
notice of the facts which the public record contains is a rule of law. The rule must be
absolute; any variation would lead to endless confusion and useless litigation.
Eufemia Balatico vda. de Agatep vs. Roberta L. Rodriguez, et al., G.R. No. 170540,
October 28, 2009
Art. 2126 - Mortgage subjects property upon which it is imposed to the

fulfillment of obligation for whose security it was constituted
Teresita Monzon vs. Sps. James and Maria Rosa Nieves Relova, et al., G.R. No.
171827, September 17, 2008
Corinthian Gardens Association, Inc. vs. Sps. Reynaldo and Maria Luisa Tanjangco, et
al., G.R. No. 160795, June 27, 2008
Phil. National Bank vs. RBL Enterprises, Inc., G.R. No. 149569, May 28, 2004
Sps. Antonio Pailano, Jr. vs. Court of Appeals, G.R. No. 99333, June 28, 1993
Jose B. Tiongco vs. Philippine Veterans Bank, G.R. No. 82782, August 5, 1992
Josefina B. Cenas vs. Antonio P. Santos, G.R. No. 49576, November 21, 1991
A mortgage is an accessory contract intended to secure the performance of the

principal obligation. One of its characteristics is that it is inseparable from the
property. It adheres to the property regardless of who its owner may subsequently be.
This is true even in the case of a real estate mortgage because, pursuant to Article
2126 of the Civil Code, the mortgage directly and immediately subjects the property
upon which it is imposed, whoever the possessor may be, to the fulfillment of the
obligation for whose security it was constituted. It is inseparable from the property
mortgaged as it is a right in rem — a lien on the property whoever its owner may be. It
subsists notwithstanding a change in ownership; in short, the personality of the owner
is disregarded. Thus, all subsequent purchasers must respect the mortgage whether the
transfer to them be with or without the consent of the mortgagee, for such mortgage
until discharged follows the property.
Eufemia Balatico vda. de Agatep vs. Roberta L. Rodriguez, et al., G.R. No. 170540,
October 28, 2009
Art. 2127 - Mortgage extends to natural accessions, improvements, growing

fruits, and rents or income not yet received when obligation becomes due
This article extends the effects of the real estate mortgage to accessions and
accessories found on the hypothecated property when the secured obligation becomes
due. The law is predicated on an assumption that the ownership of such accessions
and accessories also belongs to the mortgagor as the owner of the principal. The
provision has thus been seen by the Court, in a long line of cases beginning in 1909
with Bischoff vs. Pomar, to mean that all improvements subsequently introduced or
owned by the mortgagor on the encumbered property are deemed to form part of the
mortgage. That the improvements are to be considered so incorporated only if so
owned by the mortgagor is a rule that can hardly be debated since a contract of
security, whether real or personal, needs as an indispensable element thereof the
ownership by the pledgor or mortgagor of the property pledged or mortgaged. The
rationale should be clear enough - in the event of default on the secured obligation,
the foreclosure sale of the property would naturally be the next step that can
expectedly follow. A sale would result in the transmission of title to the buyer which
is feasible only if the seller can be in a position to convey ownership of the thing sold
(Article 1458, Civil Code).
RCBC vs. Courts of Appeals, G.R. Nos. 128833, 128834 and 128866, April 20, 1998
Luis Castro, Jr. vs. Court of Appeals, G.R. No. 97401, December 6, 1995
The mortgage directly and immediately subjects the property upon which it is
imposed, whoever the possessor may be to the fulfillment of the obligation for whose
security it was constituted. Otherwise stated, a mortgage creates a real right which is
enforceable against the whole world. Hence, even if the mortgage property is sold or
its possession transferred to another, the property remains subject to the fulfillment of
the obligation for whose security it was constituted.
In the early case of Bischoff v. Pomar and Cia. General de Tabacos [12 Phil. 691,
699 (1909)], the Court ruled that even if the machinery in question was not included
in the mortgage expressly, Article 111 of the [old] Mortgage Law provides that
chattels permanently located in a building, either useful or ornamental, or for the
service of some industry even though they were placed there after the creation of the
mortgage shall be considered as mortgaged with the estate, provided they belong to
the owner of said estate.
Star Two (SPV-AMC), Inc. vs. Paper City Corp. of the Phil., G.R. No. 169211, March 6,
2013
Art. 2128 - Mortgage credit may be alienated or assigned to a third person
Art. 2129 - Creditor may claim from third person in possession of mortgaged
property payment of part of credit secured by property which said third person
possesses
Phil. National Bank vs. RBL Enterprises, Inc., G.R. No. 149569, May 28, 2004
The mortgage directly and immediately subjects the property upon which it is
imposed, whoever the possessor may be to the fulfillment of the obligation for whose
security it was constituted. Otherwise stated, a mortgage creates a real right which is
enforceable against the whole world. Hence, even if the mortgage property is sold or
its possession transferred to another, the property remains subject to the fulfillment of
the obligation for whose security it was constituted.
[W]hen a mortgagor sells the mortgaged property to a third person, the creditor
may demand from such third person the payment of the principal obligation. The
reason for this is that the mortgage credit is a real right, which follows the property
wherever it goes, even if its ownership changes. Article 2129 of the Civil Code gives
the mortgagee . . . the option of collecting from the third person in possession of the
mortgaged property in the concept of owner. More, the mortgagor-owner's sale of the
property does not affect the right of the registered mortgagee to foreclose on the same
even if its ownership had been transferred to another person. The latter is bound by
the registered mortgage on the title he acquired.
Sps. Antonio and Leticia Vega vs. SSS, et al., G.R. No. 181672, September 20, 2010
Art. 2130 - Stipulation forbidding owner from alienating immovable

mortgaged shall be void
Sps. Samatra vs. Vda. De Parinas, G.R. No. 142958, April 24, 2002
Reynaldo K. Litonjua vs. L & R Corporation, G.R. No. 130722, December 9, 1999
Art. 2141 - Provisions of the Code on pledge applicable to chattel mortgages
Servicewide Specialists vs. Court of Appeals, G.R. No. 116363, December 10, 1999
Art. 2153 - When management is extinguished
Roberto S. Benedicto vs. Board of Administrators of Television Stations RPN, BBC and
IBC, G.R. No. 87710, March 31, 1992
Art. 2154 - Solution indebiti
Fatima Gonzales-Asdala vs. Victor Pedro A. Yaneza, A.M. Nos. P-08-2455, P-08-2456
& RTJ-08-2113, April 30, 2008
Titan-Ikeda Construction & Dev't. Corp. vs. Primetown Property Group, Inc., G.R. No.
158768, February 12, 2008
Roberto U. Genova vs. Levita De. Castro, G.R. No. 132076 & 140989, July 22, 2003
Dometila M. Andres vs. Manufacturers Hanover & Trust Corporation, G.R. No. 82670,
September 15, 1989
When money is paid to another under the influence of a mistake of fact, that is to
say, on the mistaken supposition of the existence of a specific fact, where it would not
have been known that the fact was otherwise, it may be recovered. The ground upon
which the right of recovery rests is that money paid through misapprehension of facts
belongs in equity and in good conscience to the person who paid it.
Commissioner of Internal Revenue vs. Acesite (Phil.) Hotel Corp., G.R. No. 147295,
February 16, 2007
Application of the Principle of Solutio Indebiti
Under the principle of solutio indebiti provided in Art. 2154, Civil Code, the BIR
received something "when there [was] no right to demand it," and thus, it has the
obligation to return it.
State Land Investment Corp. vs. Commissioner of Internal Revenue, G.R. No. 171956,
January 18, 2008
As a necessary corollary, when the taxpayer's entitlement to a refund stands

undisputed, the State should not misuse technicalities and legalisms, however exalted,
to keep money not belonging to it. As we stressed in G.R. Nos. 167274-75, the
government is not exempt from the application of solutio indebiti, a basic postulate
proscribing one, including the State, from enriching himself or herself at the expense
of another.
Commr. v. Fortune Tobacco Corp., G.R. Nos. 167274-75 & 192576, September 11,
2013
Requisites for Solutio Indebiti to Arise
For the extra-contractual obligation of solutio indebiti to arise, the following

requisites must be proven: 1. the absence of a right to collect the excess sums and 2.
the payment was made by mistake.
"[I]f something is received where there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises", he must return the same
if he had already received it.
Fatima Gonzales-Asdala vs. Victor Pedro A. Yaneza, A.M. Nos. P-08-2455, P-08-2456
and RTJ-08-2113, April 30, 2008
"[T]he indispensable requisites of the juridical relation known as solutio indebiti,

are, (a) that he who paid was not under obligation to do so; and (b) that the payment
was made by reason of an essential mistake of fact." In the case at bench, PNB cannot
recover the proceeds of the check under the principle it invokes. In the first place, the
gross negligence of PNB, as earlier discussed, can never be equated with a mere
mistake of fact, which must be something excusable and which requires the exercise
of prudence. No recovery is due if the mistake done is one of gross negligence.
PNB vs. Sps. Cheah Chee Chong and Ofelia Camacho Cheah, G.R. Nos. 170865 &
170892, April 25, 2012
Art. 2160 - Responsibility of a person in good faith who accepts an undue

payment of a thing certain and determinate

Art. 2163 - Mistake in payment, when presumed

Art. 2176 - Quasi-delicts
Fe Cayao-Lasam vs. Sps. Claro and Editha Ramolete, G.R. No. 159132, December 18,
2008
Ngo Sin Sing, et al. vs. Li Seng Giap & Sons Inc., et al., G.R. No. 170596, November
28, 2008
Corinthian Gardens Association, Inc. vs. Sps. Reynaldo and Maria Luisa Tanjangco, et
al., G.R. No. 160795, July 27, 2008
Bank of the Philippine Islands vs. Lifetime Marketing Corp., G.R. No. 176434, June 25,
2008
Cornelio Lampesa, et al. vs. Juan De Vera, Jr., et al., G.R. No. 155111, February 14,
2008
Dy Teban Trading, Inc. vs. Jose Ching, G.R. No. 161803, February 4, 2008
Manolo P. Samson vs. Reynaldo B. Daway, G.R. Nos. 160054-55, July 21, 2004
Ernesto Pleyto and Phil. Rabbit Bus Lines vs. Maria D. Lomboy, G.R. No. 148737, June
16, 2004
Yakult Philippines, et al. vs. Court of Appeals, G.R. No. 91856, October 5, 1990
Pedro T. Layugan vs. Intermediate Appellate Court, G.R. No. 73998, November 14,
1988
A careful examination of the aforequoted complaint shows that the civil action is
one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements
of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff; (b) fault or
negligence of the defendant, or some other person for whose acts he must respond;
and (c) the connection of cause and effect between the fault or negligence of the
defendant and the damages incurred by the plaintiff. (Taylor vs. Manila Electric
Company, 16 Phil. 8; Vergara vs. Court of Appeals, G.R. No. 77679, September 30,
1987)
Article 2176 of the Civil Code imposes a civil liability on a person for damage
caused by his act or omission constituting fault or negligence, and whenever Article
2176 refers to "fault or negligence", it covers not only acts "not punishable by law"
but also acts criminal in character, whether intentional and voluntary or negligent.
Consequently, a separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided that
the offended party is not allowed, (if the tortfeasor is actually charged also
criminally), to recover damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two, assuming the awards made in the two
cases vary. (citing Virata vs. Ochoa, G.R. No. L-46179, January 31, 1978)
Lou A. Atienza vs. Commission on Elections, G.R. No. 108533, December 20, 1994
Coca-Cola Bottlers Philippines, Inc. vs. Court of Appeals, G.R. No. 110295, October 18,
1993
Banco Filipino Savings Bank vs. Court of Appeals, G.R. No. 105138, August 5, 1993
Metro Manila Transit Corporation vs. Court of Appeals, G.R. No. 104408, June 21, 1993
Gashem Shookat Baksh vs. Court of Appeals, G.R. No. 97336, February 19, 1993
M. H. Wylie vs. Aurora I. Rarang, G.R. No. 74135, May 28, 1992
1990
Well-entrenched is the doctrine that Article 2176 covers not only acts committed
with negligence, but also acts which are voluntary and intentional. As far back as the
definitive case of Elcano v. Hill (G.R. No. L-24803, May 26, 1977), this Court already
held that: ". . . Article 2176, where it refers to "fault or negligence," covers not only
acts "not punishable by law" but also acts criminal in character, whether intentional
and voluntary or negligent. Consequently, a separate civil action lies against the
offender in a criminal act, whether or not he is criminally prosecuted and found guilty
or acquitted, provided that the offended party is not allowed, if he is actually charged
also criminally, to recover damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two, assuming the awards made in the two
cases vary. In other words, the extinction of civil liability referred to in Par. (e) of
Section 3, Rule 111, refers exclusively to civil liability founded on Article 100 of the
Revised Penal Code, whereas the civil liability for the same act considered as
quasi-delict only and not as a crime is not extinguished even by a declaration in the
criminal case that the criminal act charged has not happened or has not been
committed by the accused. Briefly stated, We here hold, in reiteration of Garcia, that
culpa aquiliana includes voluntary and negligent acts which may be punishable by
law."
Raymundo Odani Secosa vs. Heirs of Erwin Suarez Francisco, G.R. No. 160039, June
29, 2004
Delsan Transport Lines, Inc. vs. C & A Construction, Inc., G.R. No. 156034, October 1,
2003
Equitable Leasing Corp. vs. Lucita Suyom, G.R. No. 143360, September 5, 2002
Avelino Casupanan vs. Mario Llavore Laroya, G.R. No. 145391, August 26, 2002
Metro Manila Transit Corp. and Apolinario Ajoc vs. Court of Appeals, G.R. No. 141089,
August 1, 2002
Rafael Reyes Trucking Corporation vs. People of the Phils., G.R. No. 129029, April 3,
2000
San Ildefonso Lines, Inc. vs. Court of Appeals, G.R. No. 119771, April 24, 1998
Philtranco Service Enterprises, Inc. vs. Court of Appeals, G.R. No. 120553, June 17,
1997
Baliwag Transit, Inc. vs. Court of Appeals, G.R. No. 116624, September 20, 1996
Maria Benita A. Dulay vs. Court of Appeals, G.R. No. 108017, April 3, 1995
Article 2176 of the Civil Code provides that whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict. To sustain a claim based on quasi-delict, the
following requisites must concur: (a) damage suffered by plaintiff; (b) fault or
negligence of defendant; and (c) connection of cause and effect between the fault or
negligence of defendant and the damage incurred by plaintiff.
Cornelio Lampesa, et al. vs. Juan De Vera, Jr., G.R. No. 155111, February 14, 2008
Dy Teban Trading, Inc. vs. Jose Ching and/or Liberty Forest, Inc., G.R. No. 161803,
February 4, 2008
The requisites of quasi-delict are the following: (a) There must be an act or
omission; (b) Such act or omission causes damage to another; (c) Such act or omission
is caused by fault or negligence; and (d) There is no pre-existing contractual relation
between the parties.
Ngo Sin Sing, et al. vs. Li Seng Giap & Sons, Inc., et al., G.R. No. 170596, November
28, 2008
Whoever by act or omission causes damage to another, there being fault or

negligence, is obliged to pay for the damage done.
Cornelio Lampesa, et al. vs. Juan De Vera, Jr., et al., G.R. No. 155111, February 14,
2008
Dy Teban Trading, Inc. vs Jose Ching, et al., G.R. No. 161803, February 4, 2008
Sps. Alfredo and Cleopatra Pacis vs. Jerome Jovanne Morales, G.R. No. 169467,
February 25, 2010
Article 2176 in relation to Article 2180, Article 1431 and Article 1869
Where an employment relationship exists, the hospital may be held vicariously

liable under Article 2176 in relation to Article 2180 of the Civil Code or the principle
of respondeat superior. Even when no employment relationship exists but it is shown
that the hospital holds out to the patient that the doctor is its agent, the hospital may
still be vicariously liable under Article 2176 in relation to Article 1431 and Article
1869 of the Civil Code or the principle of apparent authority. Moreover, regardless of
its relationship with the doctor, the hospital may be held directly liable to the patient
for its own negligence or failure to follow established standard of conduct to which it
should conform as a corporation.
Professional Services, Inc. vs. Court of Appeals, et al., G.R. Nos. 126297, 126467 &
127590, February 2, 2010
The rationale for the rule that a registered owner is vicariously liable for damages
caused by the operation of his motor vehicle is explained by the principle behind
motor vehicle registration, which has been discussed by this Court in Erezo. . .:
The main aim of motor vehicle registration is to identify the owner so that if
any accident happens, or that any damage or injury is caused by the vehicle on
the public highways, responsibility therefor can be fixed on a definite individual,
the registered owner. Instances are numerous where vehicles running on public
highways caused accidents or injuries to pedestrians or other vehicles without
positive identification of the owner or drivers, or with very scant means of
identification. It is to forestall these circumstances, so inconvenient or prejudicial
to the public, that the motor vehicle registration is primarily ordained, in the
interest of the determination of persons responsible for damages or injuries
caused on public highways.
Thus, whether there is an employer-employee relationship between the registered

owner and the driver is irrelevant in determining the liability of the registered owner
who the law holds primarily and directly responsible for any accident, injury or death
caused by the operation of the vehicle in the streets and highways.
Filcar Transport Services vs. Jose A. Espinas, G.R. No. 174156, June 20, 2012
Art. 2177 - Quasi delict is separate and distinct from civil liability arising from
negligence under Penal Code
This Court held that a quasi-delict or culpa aquiliana is a separate legal institution
under the Civil Code with a substantivity all its own, and individuality that is entirely
apart and independent from a delict or crime — a distinction exists between the civil
liability arising from a crime and the responsibility for quasi-delicts or culpa
extra-contractual. The same negligence causing damages may produce civil liability
arising from a crime under the Penal Code, or create an action for quasi-delicts or
culpa extra-contractual under the Civil Code. Therefore, the acquittal or conviction in
the criminal case is entirely irrelevant in the civil case, unless, of course, in the event
of an acquittal where the court has declared that the fact from which the civil action
arose did not exist, in which case the extinction of the criminal liability would carry
with it the extinction of the civil liability. (citing Castillo vs. Court of Appeals, G.R.
No. 48541, August 21, 1989)
Avelino Casupanan vs. Mario Llavore Laroya, G.R. No. 145391, August 26, 2002
1990
The cause of action against the doctors in these cases is commonly known as
medical malpractice. It is a form of negligence which consists in the physician or
surgeon's failure to apply to his practice that degree of care and skill that the
profession generally and ordinarily employs under similar conditions and
circumstances. For this reason, the Court always seeks guidance from expert
testimonies in determining whether or not the defendant in a medical malpractice case
exercised the degree of care and diligence required of him. The Court has to face up to
the fact that physicians have extraordinary technical skills that laymen do not have.
To successfully mount a medical malpractice action, the plaintiff should establish

four basic things: (1) duty; (2) breach; (3) injury; and (4) proximate causation. The
evidence should show that the physician or surgeon, either failed to do something
which a reasonably prudent physician or surgeon would have done, or that he or she
did something that a reasonably prudent physician or surgeon would not have done;
and that the failure or action caused injury to the patient.
Eduardo Aquino vs. Heirs of Raymunda Calayag, G.R. Nos. 158461, 158634 & 158818,
August 22, 2012
Art. 2178 - Articles 1172 to 1174 are also applicable to quasi-delict
Art. 2179 - Plaintiff's negligence as immediate and proximate cause of injury;
contributory negligence
Doctrine of Last Clear Chance
The doctrine of last clear chance states that where both parties are negligent but the
negligent act of one is appreciably later than that of the other, or where it is
impossible to determine whose fault or negligence caused the loss, the one who had
the last clear opportunity to avoid the loss but failed to do so, is chargeable with the
loss. Stated differently, the antecedent negligence of plaintiff does not preclude him
from recovering damages caused by the supervening negligence of defendant, who
had the last fair chance to prevent the impending harm by the exercise of due
diligence.
Sealoader Shipping Corp. vs. Grand Cement Manufacturing Corp., et al., G.R. Nos.
167363 & 177466, December 15, 2010, citing Philippine National Railways v. Brunty,
G.R. No. 169891, November 2, 2006
Fe Cayao-Lasam vs. Sps. Claro and Editha Ramolete, G.R. No. 159132, December 18,
2008
National Power Corp. vs. Heirs of Noble Casionan, G.R. No. 165969, November 27,
2008
Medardo Ag. Cadiente vs. Bithuel Macas, G.R. No. 161946, November 14, 2008
Metro Manila Transit Corp. and Apolinario Ajoc vs. Court of Appeals, G.R. No. 141089,
August 1, 2002
Pilipinas Bank vs. Court of Appeals, G.R. No. 105410, July 25, 1994
If indeed there was contributory negligence on the part of the victim, then it is
proper to reduce the award for damages. This is in consonance with the Civil Code
provision that liability will be mitigated in consideration of the contributory
negligence of the injured party.
National Power Corp. vs. Heirs of Noble Casionan, G.R. No. 165969, November 27,
2008
The underlying precept on contributory negligence is that a plaintiff who is partly

responsible for his own injury should not be entitled to recover damages in full, but
must proportionately bear the consequences of his own negligence. The defendant is
thus held liable only for the damages actually caused by his negligence.
Medardo Ag. Cadiente vs. Bithuel Macas, G.R. No. 161946, November 14, 2008
Contributory negligence is conduct on the part of the injured party, contributing as

a legal cause to the harm he has suffered, which falls below the standard to which he
is required to conform for his own protection. . . . Indeed, Ofelia failed to observe
caution in giving her full trust in accommodating a complete stranger and this led her
and her husband to be swindled. Considering that Filipina was not personally known
to her and the amount of the foreign check to be encashed was $300,000.00, a higher
degree of care is expected of Ofelia which she, however, failed to exercise under the
circumstances. Another circumstance which should have goaded Ofelia to be more
circumspect in her dealings was when a bank officer called her up to inform that the
Bank of America check has already been cleared way earlier than the 15-day clearing
period. . . . PNB and the spouses Cheah are equally negligent and should therefore
equally suffer the loss. The two must both bear the consequences of their mistakes.
PNB vs. Sps. Cheah Chee Chong and Ofelia Camacho Cheah, G.R. Nos. 170865 &
170892, April 25, 2012
The doctrine of last clear chance, stated broadly, is that the negligence of the
plaintiff does not preclude a recovery for the negligence of the defendant where it
appears that the defendant, by exercising reasonable care and prudence, might have
avoided injurious consequences to the plaintiff notwithstanding the plaintiff's
negligence. The doctrine necessarily assumes negligence on the part of the defendant
and contributory negligence on the part of the plaintiff, and does not apply except
upon that assumption. Stated differently, the antecedent negligence of the plaintiff
does not preclude him from recovering damages caused by the supervening
negligence of the defendant, who had the last fair chance to prevent the impending
harm by the exercise of due diligence. Moreover, in situations where the doctrine has
been applied, it was defendant's failure to exercise such ordinary care, having the last
clear chance to avoid loss or injury, which was the proximate cause of the occurrence
of such loss or injury.
Allied Banking Corp. vs. BPI, G.R. No. 188363, February 27, 2013
Art. 2180 - Obligation under Art. 2176 is demandable also for acts or
omissions of persons for whom one is responsible
Sps. Buenaventura and Rosario Jaime vs. Rodrigo Apostol, et al., G.R. No. 163609,
November 27, 2008
Sps. Francisco and Aniceta Hernandez vs. Sps. Lorenzo and Margarita Dolor, G.R. No.
160286, July 30, 2004
Raymundo Odani Secosa vs. Heirs of Erwin Suarez Francisco, G.R. No. 160039, June
29, 2004
16, 2004
Hermana R. Cerezo vs. David Tuazon, G.R. No. 141538, March 23, 2004
Rufo Mauricio Construction vs. Intermediate Appellate Court, G.R. No. L-75357,
November 27, 1987
Liability of teachers of academic schools

Philippine School of Business Administration vs. Court of Appeals, G.R. No. 84698,
January 4, 1992
Benjamin Salvosa vs. Intermediate Appellate Court, G.R. No. L-70458, October 5, 1988
Federico Ylarde vs. Edgardo Aquino, G.R. No. L-33722, July 29, 1988
Liability of employer
When an injury is caused by the negligence of a servant or employee there instantly

arises a presumption of law that there was negligence on the part of the master or
employer either in the selection of the servant or employee, or in supervision over him
after selection, or both. Such presumption is juris tantum and not juris et de jure and
consequently, may be rebutted. If follows necessarily that if the employer shows to the
satisfaction of the court that in the selection and in the supervision he has exercised
the care and diligence of a good father of a family, the presumption is overcome and
he is relieved from liability.
Banco Filipino Savings Bank vs. Court of Appeals, G.R. No. 105138, August 5, 1993
Filamer Christian Institute vs. Intermediate Appellate Court, G.R. No. 75112, August 17,
1992
George Mckee vs. Intermediate Appellate Court, G.R. No. 68102, July 16, 1992
Maximino Soliman, Jr. vs. Hon. Judge Ramon Tuazon, G.R. No. 66207, May 18, 1992
Ernesto Martin vs. Court of Appeals, G.R. No. 82248, January 30, 1992
St. Francis High School vs. Court of Appeals, G.R. No. 82465, February 25, 1991
Dionisio Carpio vs. Sergio Doroja, G.R. No. 84516, December 5, 1989
Pedro T. Layugan vs. Intermediate Appellate Court, G.R. No. 73998, November 14,
1988
The liability of the employer under Article 2180 is direct and immediate; it is not
conditioned upon prior recourse against the negligent employee and a prior showing
of the insolvency of such employee (Kapalaran Bus Lines v. Coronado, G.R. No.
85331, August 25, 1989). Therefore, it is incumbent upon the private respondents to
prove that they exercised the diligence of a good father of a family in the selection and
supervision of their employee.
Rafael Reyes Trucking Corporation vs. People of the Phils., G.R. No. 129029, April 3,
2000
Armando Jose vs. Court of Appeals, G.R. No. 118441-42, January 18, 2000
Castilex Industrial Corp. vs. Vicente Vasquez, G.R. No. 132266, December 21, 1999
1997
Baliwag Transit, Inc. vs. Court of Appeals, G.R. No. 116624, September 20, 1996
Ma. Lourdes Valenzuela vs. Court of Appeals, G.R. No. 115024, February 7, 1996
Maria Benita A. Dulay vs. Court of Appeals, G.R. No. 108017, April 3, 1995
The liability of the employer under Art. 2180 of the Civil Code is direct or
immediate. It is not conditioned on a prior recourse against the negligent employee, or
a prior showing of insolvency of such employee. It is also joint and solidary with the
employee.
Mercury Drug Corp., et al. vs. Sps. Richard and Carmen Huang, et al., G.R. No.
172122, June 22, 2007
In the selection of its prospective employees, the employer is required to examine
them as to their qualifications, experience, and service records. With respect to the
supervision of its employees, the employer should formulate standard operating
procedures, monitor their implementation, and impose disciplinary measures for their
breach. To establish compliance with these requirements, employers must submit
concrete proof, including documentary evidence.
172122, June 22, 2007
Article 2180 of the Civil Code, in relation to Article 2176, makes the employer
vicariously liable for the acts of its employees. When the employee causes damage
due to his own negligence while performing his own duties, there arises the juris
tantum presumption that the employer is negligent, rebuttable only by proof of
observance of the diligence of a good father of a family. For failure to rebut such legal
presumption of negligence in the selection and supervision of employees, the
employer is likewise responsible for damages, the basis of the liability being the
relationship of pater familias or on the employer's own negligence. Mangoba, per
testimony of his conductor, was ten meters away from the Mitsubishi Lancer before
the collision and was driving 60 to 75 kilometers per hour when the speed limit was
50 kilometers per hour. The presumption under Article 2185 of the Civil Code was
thus proven true: Mangoba, as driver of the bus which collided with the Mitsubishi
Lancer, was negligent since he violated a traffic regulation at the time of the mishap.
RCJ Bus Lines, Inc. vs. Standard Insurance Company, Inc., G.R. No. 193629, August
17, 2011
The existence of hiring procedures and supervisory employees cannot be

incidentally invoked to overturn the presumption of negligence on the part of the
employer.
Article 2180 of the New Civil Code discusses the liability of the employer once
negligence or fault on the part of the employee has been established. The employer is
actually liable on the assumption of juris tantum that the employer failed to exercise
diligentissimi patris families in the selection and supervision of its employees. The
liability is primary and can only be negated by showing due diligence in the selection
and supervision of the employee, a factual matter that has not been demonstrated.
Even the existence of hiring procedures and supervisory employees cannot be
incidentally invoked to overturn the presumption of negligence on the part of the
employer.
Philippine National Railways, et al. vs. Court of Appeals, et al., G.R. No. 157658,
October 15, 2007
Presumption of Negligence of Employer
Once negligence on the part of the employee is established, a presumption instantly

arises that the employer was negligent in the selection and/or supervision of said
employee.
Cornelio Lampesa, et al. vs. Juan De Vera, Jr., G.R. No. 155111, February 14, 2008
Ernesto Syki vs. Salvador Begasa, G.R. No. 149149, October 23, 2003
A person is not only liable for one's own quasi-delictual acts, but also for those
persons for whom one is responsible for. This liability is popularly known as vicarious
or imputed liability. To sustain claims against employers for the acts of their
employees, the following requisites must be established: (1) That the employee was
chosen by the employer personally or through another; (2) That the service to be
rendered in accordance with orders which the employer has the authority to give at all
times; and (3) That the illicit act of the employee was on the occasion or by reason of
the functions entrusted to him.
Sps. Buenaventura and Rosario Jayme vs. Rodrigo Apostol, et al., G.R. No. 163609,
November 27, 2008
In cases where an injury is caused by the negligence of an employee, there instantly

arises a presumption of law that there has been negligence on the part of the employer,
either in the selection or supervision of one's employees. This presumption may be
rebutted by a clear showing that the employer has exercised the care and diligence of a
good father of the family.
Mercury Drug Corp., et al. vs. Raul De Leon, G.R. No. 165622, October 17, 2008
It is thus clear that the employer of a negligent employee is liable for the damages
caused by the latter. When an injury is caused by the negligence of an employee, there
instantly arises a presumption of the law that there was negligence on the part of the
employer, either in the selection of his employee or in the supervision over him after
such selection. However, the presumption may be overcome by a clear showing on the
part of the employer that he has exercised the care and diligence of a good father of a
family in the selection and supervision of his employee. In other words, the burden of
proof is on the employer. Thus, petitioners must prove two things: first, that they had
exercised due diligence in the selection of petitioner Añalucas, and second, that after
hiring Añalucas, petitioners had exercised due diligence in supervising him.
OMC Carriers, Inc., et al. vs. Sps. Roberto and Rosario Nabua, G.R. No. 148974, July
2, 2010
The general public policy involved in motor vehicle registration is the protection of
innocent third persons who may have no means of identifying public road malefactors
and, therefore, would find it difficult — if not impossible — to seek redress for
damages they may sustain in accidents resulting in deaths, injuries and other damages;
by fixing the person held primarily and directly liable for the damages sustained by
victims of road mishaps, the law ensures that relief will always be available to them.
To identify the person primarily and directly responsible for the damages would
also prevent a situation where a registered owner of a motor vehicle can easily escape
liability by passing on the blame to another who may have no means to answer for the
damages caused, thereby defeating the claims of victims of road accidents. We take
note that some motor vehicles running on our roads are driven not by their registered
owners, but by employed drivers who, in most instances, do not have the financial
means to pay for the damages caused in case of accidents.
Neither can Filcar use the defenses available under Article 2180 of the Civil Code
— that the employee acts beyond the scope of his assigned task or that it exercised the
due diligence of a good father of a family to prevent damage — because the motor
vehicle registration law, to a certain extent, modified Article 2180 of the Civil Code
by making these defenses unavailable to the registered owner of the motor vehicle.
Thus, for as long as Filcar is the registered owner of the car involved in the vehicular
accident, it could not escape primary liability for the damages caused to Espinas.
Thus, whether the driver of the motor vehicle, Floresca, is an employee of Filcar is
irrelevant in arriving at the conclusion that Filcar is primarily and directly liable for
the damages sustained by Espinas. While Republic Act No. 4136 or the Land
Transportation and Traffic Code does not contain any provision on the liability of
registered owners in case of motor vehicle mishaps, Article 2176, in relation with
Article 2180, of the Civil Code imposes an obligation upon Filcar, as registered
owner, to answer for the damages caused to Espinas' car. This interpretation is
consistent with the strong public policy of maintaining road safety, thereby reinforcing
the aim of the State to promote the responsible operation of motor vehicles by its
citizens.
This does not mean, however, that Filcar is left without any recourse against the
actual employer of the driver and the driver himself. Under the civil law principle of
unjust enrichment, the registered owner of the motor vehicle has a right to be
indemnified by the actual employer of the driver of the amount that he may be
required to pay as damages for the injury caused to another.
The set-up may be inconvenient for the registered owner of the motor vehicle, but
the inconvenience cannot outweigh the more important public policy being advanced
by the law in this case which is the protection of innocent persons who may be victims
of reckless drivers and irresponsible motor vehicle owners.
Under Article 2180 of the Civil Code, employers are liable for the damages caused
by their employees acting within the scope of their assigned tasks. Whenever an
employee's negligence causes damage or injury to another, there instantly arises a
presumption that the employer failed to exercise the due diligence of a good father of
the family in the selection or supervision of its employees. The liability of the
employer is direct or immediate. It is not conditioned upon prior recourse against the
negligent employee and a prior showing of insolvency of such employee. Moreover,
under Article 2184 of the Civil Code, if the causative factor was the driver's
negligence, the owner of the vehicle who was present is likewise held liable if he
could have prevented the mishap by the exercise of due diligence.
Paulita "Edith" Serra vs. Nelfa T. Mumar, G.R. No. 193861, March 14, 2012
In Aguilar Sr. v. Commercial Savings Bank, (412 Phil. 834 (2001)) the car of
therein respondent bank caused the death of Conrado Aguilar, Jr. while being driven
by its assistant vice president. Despite Article 2180, we still held the bank liable for
damages for the accident as said provision should defer to the settled doctrine
concerning accidents involving registered motor vehicles, i.e., that the registered
owner of any vehicle, even if not used for public service, would primarily be
responsible to the public or to third persons for injuries caused the latter while the
vehicle was being driven on the highways or streets. We have already ratiocinated
that:
The main aim of motor vehicle registration is to identify the owner so

that if any accident happens, or that any damage or injury is caused by the
vehicle on the public highways, responsibility therefor can be fixed on a
definite individual, the registered owner. Instances are numerous where
vehicles running on public highways caused accidents or injuries to
pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall these
circumstances, so inconvenient or prejudicial to the public, that the motor
vehicle registration is primarily ordained, in the interest of the determination
of persons responsible for damages or injuries caused on public highways.
Oscar del Carmen, Jr. vs. Geronimo Bacoy, et al., G.R. No. 173870, April 25, 2012
Art. 2181 - Whoever pays for damage caused by his dependents or employees
may recover from the latter what he has paid
Article 2181 does not make recovery from the employee a mandatory requirement.
A right to relief shall be recognized only when the party concerned asserts it through a
proper pleading filed in court.
1997
Pacific Banking Corporation vs. Court of Appeals, G.R. No. L-45656, May 5, 1989
Art. 2182 - If minor or insane person causes damage to another
Cresencio Libi vs. Intermediate Appellate Court, G.R. No. 70890, September 18, 1992
Art. 2184 - In motor vehicle mishaps, the owner is solidarily liable with his
driver
Res ipsa loquitur is not a rule of substantive law and does not constitute an
independent or separate ground for liability. Instead, it is considered as merely
evidentiary, a mode of proof, or a mere procedural convenience, since it furnishes a
substitute for, and relieves a plaintiff of, the burden of producing a specific proof of
negligence. In other words, mere invocation and application of the doctrine do not
dispense with the requirement of proof of negligence. It is simply a step in the process
of such proof, permitting plaintiff to present, along with the proof of the accident,
enough of the attending circumstances to invoke the doctrine, creating an inference or
presumption of negligence, and thereby placing on defendant the burden of going
forward with the proof.
Luz Palanca Tan vs. Jam Transit, G.R. No. 183198, November 25, 2009
Before resort to the doctrine (res ipsa loquitur) may be allowed, the following
requisites must be satisfactorily shown: (1) the accident is of a kind which ordinarily
does not occur in the absence of someone's negligence; (2) it is caused by an
instrumentality within the exclusive control of the defendant or defendants; and (3)
the possibility of contributing conduct which would make the plaintiff responsible is
eliminated.
Res ipsa loquitur is "merely evidentiary, a mode of proof, or a mere procedural

convenience, since it furnishes a substitute for, and relieves a plaintiff of, the burden
of producing a specific proof of negligence." It "recognizes that parties may establish
prima facie negligence without direct proof, thus, it allows the principle to substitute
for specific proof of negligence. It permits the plaintiff to present along with proof of
the accident, enough of the attending circumstances to invoke the doctrine, create an
inference or presumption of negligence and thereby place on the defendant the burden
of proving that there was no negligence on his part." The doctrine is based partly on
"the theory that the defendant in charge of the instrumentality which causes the injury
either knows the cause of the accident or has the best opportunity of ascertaining it
while the plaintiff has no such knowledge, and is therefore compelled to allege
negligence in general terms."
The requisites of the doctrine of res ipsa loquitur as established by jurisprudence

are as follows:
1) the accident is of a kind which does not ordinarily occur unless

someone is negligent;
2) the cause of the injury was under the exclusive control of the
person in charge and
3) the injury suffered must not have been due to any voluntary
action or contribution on the part of the person injured.
Art. 2185 - When person driving a motor vehicle is presumed negligent
16, 2004
Driving without a proper license is a violation of traffic regulation. Under Article

2185 of the Civil Code, the legal presumption of negligence arises if at the time of the
mishap, a person was violating any traffic regulation. However, in Sanitary Steam
Laundry, Inc. v. Court of Appeals, (G.R. No. 119092, December 10, 1998) we held
that a causal connection must exist between the injury received and the violation of
the traffic regulation. It must be proven that the violation of the traffic regulation was
the proximate or legal cause of the injury or that it substantially contributed thereto.
Negligence, consisting in whole or in part, of violation of law, like any other
negligence, is without legal consequence unless it is a contributing cause of the injury.
Likewise controlling is our ruling in Añonuevo v. Court of Appeals (G.R. No. 130003,
October 20, 2004) where we reiterated that negligence per se, arising from the mere
violation of a traffic statute, need not be sufficient in itself in establishing liability for
damages. In said case, Añonuevo, who was driving a car, did not attempt "to establish
a causal connection between the safety violations imputed to the injured cyclist, and
the accident itself. Instead, he relied on a putative presumption that these violations in
themselves sufficiently established negligence appreciable against the cyclist. Since
the onus on Añonuevo is to conclusively prove the link between the violations and the
accident, we can deem him as having failed to discharge his necessary burden of
proving the cyclist' s own liability." We took the occasion to state that: The rule on
negligence per se must admit qualifications that may arise from the logical
consequences of the facts leading to the mishap. The doctrine (and Article 2185, for
that matter) is undeniably useful as a judicial guide in adjudging liability, for it seeks
to impute culpability arising from the failure of the actor to perform up to a standard
established by a legal fiat. But the doctrine should not be rendered inflexible so as to
deny relief when in fact there is no causal relation between the statutory violation and
the injury sustained. Presumptions in law, while convenient, are not intractable so as
to forbid rebuttal rooted in fact. After all, tort law is remunerative in spirit, aiming to
provide compensation for the harm suffered by those whose interests have been
invaded owing to the conduct of other.
Albert Tison, et al. vs. Sps. Gregorio and Consorcia Pomasin, et al., G.R. No. 173180,
August 24, 2011
Under the doctrine of res ipsa loquitur, "[w]here the thing that caused the injury
complained of is shown to be under the management of the defendant or his servants;
and the accident, in the ordinary course of things, would not happen if those who had
management or control used proper care, it affords reasonable evidence — in the
absence of a sufficient, reasonable and logical explanation by defendant — that the
accident arose from or was caused by the defendant's want of care."
Res ipsa loquitur is not a rule of substantive law and does not constitute an
independent or separate ground for liability. Instead, it is considered as merely
evidentiary, a mode of proof, or a mere procedural convenience, since it furnishes a
substitute for, and relieves a plaintiff of, the burden of producing a specific proof of
negligence. In other words, mere invocation and application of the doctrine do not
dispense with the requirement of proof of negligence. It is simply a step in the process
of such proof, permitting plaintiff to present, along with the proof of the accident,
enough of the attending circumstances to invoke the doctrine, creating an inference or
presumption of negligence, and thereby placing on defendant the burden of going
forward with the proof.
Before resort to the doctrine (of res ipsa loquitur) may be allowed, the following
requisites must be satisfactorily shown: (1) the accident is of a kind which ordinarily
does not occur in the absence of someone's negligence; (2) it is caused by an
instrumentality within the exclusive control of the defendant or defendants; and (3)
The possibility of contributing conduct which would make the plaintiff responsible is
eliminated.
Art. 2194 - The responsibility of two or more persons for a quasi-delict is
solidary
Ngo Sin Sing, et al. vs. Li Seng Giap and Sons, Inc., et al., G.R. No. 170596, November
28, 2008
Joint tort-feasors are those who command, instigate, promote, encourage, advise,
countenance, cooperate in, aid or abet the commission of a tort, or who approve of it
after it is done, if done for their benefit. They are also referred to as those who act
together in committing wrong or whose acts, if independent of each other, unite in
causing a single injury. Under Article 2194 of the Civil Code, joint tort-feasors are
solidarily liable for the resulting damage. . . . Joint tort-feasors are each liable as
principals, to the same extent and in the same manner as if they had performed the
wrongful act themselves. It is likewise not an excuse for any of the joint tort-feasors
that individual participation in the tort was insignificant as compared to that of the
other. To stress, joint tort-feasors are not liable pro rata. The damages cannot be
apportioned among them, except by themselves. They cannot insist upon an
apportionment, for the purpose of each paying an aliquot part. They are jointly and
severally liable for the whole amount.
Malvar v. Kraft Food Phils., Inc., G.R. No. 183952, September 9, 2013
Art. 2199 - Actual damages
Erwin Tulfo vs. People of the Phils., G.R. No. 161032, September 16, 2008
Premiere Dev't. Bank vs. Court of Appeals, G.R. No. 159352, April 14, 2004
People of the Phil. vs. Jouriel Dimacuha, G.R. No. 152592-93, February 13, 2004
Luis Malaluan vs. Commission on Elections, G.R. No. 120193, March 6, 1996
Scott Consultants & Resource Devt. Corp., Inc. vs. Court of Appeals, G.R. No. 112916,
March 16, 1995
Lou A. Atienza vs. Commission on Elections, G.R. No. 108533, December 20, 1994
British Airways, Inc. vs. Court Of Appeals, G.R. No. 92288, February 9, 1993
The formula for the computation of unearned income is:
Net Earning Capacity = life expectancy x (gross annual income —

reasonable and necessary
living expenses).
Life expectancy is determined in accordance with the formula:
2 / 3 x [80 — age of deceased at the time of death]
Jurisprudence provides that the first factor, i.e., life expectancy, shall be computed
by applying the formula (2/3 x [80 — age at death]) adopted in the American
Expectancy Table of Mortality or the Actuarial of Combined Experience Table of
Mortality.
In the computation of the second factor, it is computed by multiplying the life

expectancy by the net earnings of the deceased, i.e., the total earnings less expenses
necessary in the creation of such earnings or income and less living and other
incidental expenses. The loss is not equivalent to the entire earnings of the deceased,
but only such portion that he would have used to support his dependents or heirs.
Hence, we deduct from his gross earnings the necessary expenses supposed to be used
by the deceased for his own needs.
In computing the third factor, the necessary living expense, a survey of more recent
jurisprudence shows that this Court consistently pegged the amount at 50% of the
gross annual income.
Candano Shipping Lines, Inc. vs. Florentina J. Sugata-on, G.R. No. 163212, March 13,
2007
Fundamental in the law on damages is that one injured by a breach of a contract, or

by a wrongful or negligent act or omission shall have a fair and just compensation
commensurate to the loss sustained as a consequence of the defendant's act. Actual
pecuniary compensation is awarded as a general rule, except where the circumstances
warrant the allowance of other kinds of damages. Actual damages are primarily
intended to simply make good or replace the loss caused by the wrong. Furthermore,
damages must not only be capable of proof, but must be actually proven with a
reasonable degree of certainty. They cannot be based on flimsy and non-substantial
evidence or upon speculation, conjecture or guesswork. They cannot include
speculative damages which are too remote to be included in an accurate estimate of
the loss or injury.
People of the Phils vs. Bernardo Sara, G.R. No. 140618, December 10, 2003
Gregorio De Vera vs. Court of Appeals, G.R. No. 132869, October 18, 2001
Cresente Y. Llorente vs. Sandiganbayan, G.R. No. 122166, March 11, 1998
A plaintiff is entitled to be compensated for proven pecuniary loss.

Sps. Fredelicto and Felicisima Flores vs. Sps. Dominador and Virginia Pineda, et al.,
G.R. No. 158996, November 14, 2008
Art. 2200 - Damages shall include value of loss and profits obligee failed to
obtain
12, 2004
William Uy vs. Bartolome Puzon, G.R. No. L-19819, October 26, 1977
Art. 2201 - In contracts and quasi-contracts, damages shall be the natural and
probable consequences of breach of obligation
12, 2004
China Airlines Ltd. vs. Court of Appeals, G.R. No. 94590, July 29, 1992
Samhwa Company Ltd. vs. Intermediate Appellate Court, G.R. No. 74305, January 31,
1992
Art. 2205 - When damages may be recovered
Indemnity for loss of earning capacity is determined by computing the net earning
capacity of the victim. The formula generally used by the courts to determine net
earning capacity, which is, to wit:
Net Earning Capacity = life expectancy x (gross annual income -

reasonable and necessary
living expenses).
Life expectancy shall be computed by applying the formula (2/3 x [80 - age at
death]) adopted from the American Expectancy Table of Mortality or the Actuarial of
Combined Experience Table of Mortality.
Constancia G. Tamayo, et al. vs. Rosalia Abad Señora, et al., G.R. No. 176946,
November 15, 2010
Article 2205 of the New Civil Code allows the recovery of damages for "loss or
impairment of earning capacity in cases of temporary or permanent personal injury."
Such damages covers the loss sustained by the dependents or heirs of the deceased,
consisting of the support they would have received from him had he not died because
of the negligent act of another. The loss is not equivalent to the entire earnings of the
deceased, but only that portion that he would have used to support his dependents or
heirs.
Endreo Magbanua vs. Jose Tabusares, Jr., G.R. No. 152134, June 4, 2004
Consolidated Plywood Industries Inc. vs. Court of Appeals, G.R. No. 101706,
September 23, 1992
Damages for loss of earning capacity is in the nature of actual damages, which as a
rule must be duly proven by documentary evidence, not merely by the self-serving
testimony of the widow. By way of exception, damages for loss of earning capacity
may be awarded despite the absence of documentary evidence when (1) the deceased
is self-employed earning less than the minimum wage under current labor laws, and
judicial notice may be taken of the fact that in the deceased's line of work no
documentary evidence is available; or (2) the deceased is employed as a daily wage
worker earning less than the minimum wage under current labor laws.
Paulita "Edith" Serra vs. Nelfa T. Mumar, G.R. No. 193861, March 14, 2012
Art. 2206 - Amount of damages for death caused by crime or quasi-delict
Sps. Fredelicto (deceased) and Felecisima Flores vs. Sps. Dominador and Virginia
Pineda, et al., G.R. No. 158996, November 14, 2008
People of the Phils. vs. Agripino M. Guevarra, G.R. No. 182192, October 29, 2008
People of the Phils. vs. Angelo Zeta, G.R. No. 178541, March 27, 2008
Roberto Licyayo vs. People of the Philippines, G.R. No. 169425, March 4, 2008
16, 2004
People of the Phils. vs. Jenelito Ibañez, G.R. No. 148627, April 28, 2004
People of the Phils. vs. Conrado Tagana, G.R. No. 133027, March 4, 2004
People of the Phils. vs. Reyman Foncardas, G.R. No. 144598, February 6, 2004
People of the Phils. vs. Ricardo P. Napalit, G.R. No. 142919 & 143876, February 4,
2003
People of the Phils. vs. Filomeno Barnuevo, G.R. No. 134928, September 28, 2001
People of the Phils. vs. Reynaldo Lazarte, G.R. No. 130711, June 29, 2000
People of the Phils. vs. Dionisio Marollano, G.R. No. 105004, July 24, 1997
1997
People of the Phils. vs. Claudio Teehankee, Jr., G.R. No. 111206-08, October 6, 1995
People of the Phils. vs. Gumercindo E. Quilaton, G.R. No. 69666, January 23, 1992
Philippine Airlines, Inc. vs. Court of Appeals, G.R. No. 54470, May 8, 1990
When testimonial evidence would suffice to support an award of indemnity for loss
of earning capacity.
Under Art. 2206 of the Civil Code, the heirs of the victim are also entitled to
indemnity for loss of earning capacity. To be entitled to such an award, documentary
evidence is necessary. By way of exception, testimonial evidence would suffice: (1) if
the victim was self-employed, earning less than the minimum wage under current
labor laws and judicial notice may be taken of the fact that in the victim's line of work,
no documentary evidence is available; or (2) if the victim was employed as a daily
wage worker earning less than the minimum wage under current labor laws.
People of the Phil vs. Arturo A. Barlaan, G.R. No. 177746, August 31, 2007
Under Article 2206 of the Civil Code, the heirs of the victims are entitled to
indemnity for loss of earning capacity. Ordinarily, documentary evidence is necessary
for the purpose. By way of exception, testimonial evidence may suffice if the victim
was either (1) self-employed, earning less than the minimum wage under current labor
laws, and judicial notice may be taken of the fact that in the victim's line of work, no
documentary evidence is available; or (2) employed as a daily-wage worker earning
less than the minimum wage under current labor laws.
People of the Phils. vs. Adones Abatayo, G.R. No. 139456, July 7, 2004
[T]he testimony of the victim's mother that [the victim] was earning P15,000.00 per
month is sufficient basis for an award of damages for loss of earning capacity.
It is well settled that the factors that should be taken into account in determining
the compensable amount of lost earnings are: (1) the number of years for which the
victim would otherwise have lived; (2) the rate of loss sustained by the heirs of the
deceased.
People of the Phil. vs. Marcelo Z. Bustamante, et al., G.R. No. 172357, March 19, 2010
Article 2206 of the Civil Code entitles the descendants, ascendants, illegitimate
children, and surviving spouse of the deceased passenger to demand moral damages
for mental anguish by reason of the death of the deceased.
The indemnity for loss of earning capacity of the deceased is provided for by
Article 2206 of the Civil Code. Compensation of this nature is awarded not for loss of
earnings, but for loss of capacity to earn money.
As a rule, documentary evidence should be presented to substantiate the claim for

damages for loss of earning capacity. By way of exception, damages for loss of
earning capacity may be awarded despite the absence of documentary evidence when:
(1) the deceased is self-employed and earning less than the minimum wage under
current labor laws, in which case, judicial notice may be taken of the fact that in the
deceased's line of work no documentary evidence is available; or (2) the deceased is
employed as a daily wage worker earning less than the minimum wage under current
labor laws.
Phil. Hawk Corp. vs. Vivian Tan Lee, G.R. No. 166869, February 16, 2010

passenger, as provided in Article 1764, in relation to Article 2206 (3) of the Civil
2012
Art. 2207 - Insurance company subrogated to rights of insured against

wrongdoer
GSIS vs. Pacific Airways Corp., et al., G.R. Nos. 170414, 170418 & 170460, August 25,
2010
Aboitiz Shipping Corp. vs. Insurance Company of North America, G.R. No. 168402,
August 6, 2008
Delsan Transport Lines vs. Court of Appeals, G.R. No. 127897, November 15, 2001
ABS-CBN Broadcasting Corp. vs. Court of Appeals, G.R. No. 128690, January 21, 1999
June 30, 1997
Coastwise Lighterage Corporation vs. Court of Appeals, G.R. No. 114167, July 12,
1995
Pan Malayan Insurance Corp. vs. Court of Appeals, G.R. No. 81026, April 3, 1990
Subrogation is the substitution of one person by another with reference to a lawful

claim or right, so that he who substitutes another succeeds to the rights of the other in
relation to a debt or claim, including its remedies or securities. The principle covers a
situation wherein an insurer who has paid a loss under an insurance policy is entitled
to all the rights and remedies belonging to the insured against a third party with
respect to any loss covered by the policy.
RCJ Bus Lines, Inc. vs. Standard Insurance Company, Inc., G.R. No. 193629, August
17, 2011
Art. 2208 - When attorney's fees and litigation expenses may be recovered
28, 2008
March 4, 2008
Padilla Machine Shop, et al. vs. Rufino A. Javilgas, G.R. No. 175960, February 19,
2008
Sps. Francisco and Aniceta Hernandez vs. Sps. Lorenzo and Margarita Dolor, G.R. No.
160286, July 30, 2004
Pedrito F. Reyes vs. Court of Appeals, G.R. No. 154448, August 15, 2003
Sps. Virginia and Emilio Junson vs. Sps. Benedicta and Antonio Martinez, G.R. No.
141324, July 8, 2003
Producers Bank of the Philippines vs. Court of Appeals, G.R. No. 111584, September
17, 2001
Wildvalley Shipping Co. vs. Court of Appeals, G.R. No. 119602, October 6, 2000
ABS-CBN Broadcasting Corp. vs. Court of Appeals, G.R. No. 128690, January 21, 1999
Development Bank of the Phil. vs. Court of Appeals, G.R. No. 118180, September 20,
1996
Rizal Surety & Insurance Co. vs. Court of Appeals, G.R. No. 96727, August 28, 1996
Servicewide Specialists vs. Court of Appeals, G.R. No. 110597, May 8, 1996
Valiant Machinery vs. National Labor Relations Commission, G.R. No. 105877, January
25, 1996
Crisanta Galay vs. Court of Appeals, G.R. No. 120132, December 4, 1995
Consolidated Bank and Trust Corporation vs. Court of Appeals, G.R. No. 91494, July
14, 1995
March 16, 1995
Solid Homes, Inc. vs. Court of Appeals, G.R. No. 97255, August 12, 1994
Pantranco North Express, Inc. vs. Court of Appeals, G.R. No. 105180, July 5, 1993
Jacinto U. Diño vs. Court of Appeals, G.R. No. 89775, November 26, 1992
Dilson Enterprises, Inc. vs. Intermediate Appellate Court, G.R. No. 74964, February 27,
1989
Two concepts of attorney's fees — the ordinary and the extraordinary.
In assessing attorney's fees against NPC and in favor of the respondents, the RTC
casually disregarded the fundamental distinction between the two concepts of
attorney's fees — the ordinary and the extraordinary. These concepts were aptly
distinguished in Traders Royal Bank Employees Union-Independent v. NLRC (G.R.
No. 120592, March 14, 1997) thuswise:
There are two commonly accepted concepts of attorney's fees, the so-called
ordinary and extraordinary. In its ordinary concept, an attorney's fee is the reasonable
compensation paid to a lawyer by his client for the legal services he has rendered to
the latter. The basis of this compensation is the fact of his employment by and his
agreement with the client.
In its extraordinary concept, an attorney's fee is an indemnity for damages ordered

by the court to be paid by the losing party in a litigation. The basis of this is any of the
cases provided by law where such award can be made, such as those authorized in
Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they
have agreed that the award shall pertain to the lawyer as additional compensation or as
part thereof.
NPC vs. Heirs of Macabangkit Sangkay, G.R. No. 165828, August 24, 2011
An award of attorney's fees is the exception, not the rule.
An award of attorney's fees has always been the exception rather than the rule. To
start with, attorney's fees are not awarded every time a party prevails in a suit. Nor
should an adverse decision ipso facto justify an award of attorney's fees to the winning
party. The policy of the Court is that no premium should be placed on the right to
litigate. Too, such fees, as part of damages, are assessed only in the instances
specified in Art. 2208, Civil Code. Indeed, attorney's fees are in the nature of actual
damages. But even when a claimant is compelled to litigate with third persons or to
incur expenses to protect his rights, attorney's fees may still be withheld where no
sufficient showing of bad faith could be reflected in a party's persistence in a suit
other than an erroneous conviction of the righteousness of his cause. And, lastly, the
trial court must make express findings of fact and law that bring the suit within the
exception. What this demands is that the factual, legal or equitable justifications for
the award must be set forth not only in the fallo but also in the text of the decision, or
else, the award should be thrown out for being speculative and conjectural
Attorney's fees cannot be recovered as part of damages.
The general rule is that attorney's fees cannot be recovered as part of damages
because of the policy that no premium should be placed on the right to litigate. They
are not to be awarded every time a party wins a suit. The power of the court to award
attorney's fees under Article 2208 of the Civil Code demands factual, legal and
equitable justification. A perusal of Article 2208 of the Revised Civil Code will reveal
that the award of attorney's fees in the form of damages is the exception rather than
the rule for it is predicated upon the existence of exceptional circumstances. In all
cases, it must be reasonable, just and equitable if the same is to be granted. It is
necessary for the court to make findings of fact and law to justify the grant of such
award. The matter of attorney's fees must be clearly explained and justified by the trial
court in the body of its decision.
Apo Fruits Corp., et al. vs. Court of Appeals, et al., G.R. No. 164195, December 19,
2007
Phil. Phosphate Fertilizer Corp. vs. Kamalig Resources, Inc., G.R. No. 165608,
December 13, 2007
Bobie Rose V. Frias vs. Flora San Diego-Sison, G.R. No. 155223, April 3, 2007
Quantum meruit — literally meaning as much as he deserves — is used as basis for
determining an attorney's professional fees in the absence of an express agreement.
The recovery of attorney's fees on the basis of quantum meruit is a device that
prevents an unscrupulous client from running away with the fruits of the legal services
of counsel without paying for it and also avoids unjust enrichment on the part of the
attorney himself. An attorney must show that he is entitled to reasonable
compensation for the effort in pursuing the client's cause, taking into account certain
factors in fixing the amount of legal fees.
Rule 20.01 of the Code of Professional Responsibility lists the guidelines for
determining the proper amount of attorney fees, to wit:
Rule 20.1 — A lawyer shall be guided by the following factors in

determining his fees:
a) The time spent and the extent of the services rendered or

required;
b) The novelty and difficult of the questions involved;
c) The important of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of

acceptance of the proffered case;
f) The customary charges for similar services and the schedule of

fees of the IBP chapter to which he belongs;
g) The amount involved in the controversy and the benefits

resulting to the client from the service;
h) The contingency or certainty of compensation;
i) The character of the employment, whether occasional or

established; and ECDaTI
j) The professional standing of the lawyer.
In the event of a dispute as to the amount of fees between the attorney and his
client, and the intervention of the courts is sought, the determination requires that
there be evidence to prove the amount of fees and the extent and value of the services
rendered, taking into account the facts determinative thereof. . . . Thus, the Court,
which holds and exercises the power to fix attorney's fees on a quantum meruit basis
in the absence of an express written agreement between the attorney and the client,
now fixes attorney's fees at 10% of the principal award of P113,532,500.00. Whether
it is Atty. Dibaratun or Atty. Ballelos, or both, who should receive attorney's fees from
the Heirs of Macabangkit is a question that the Court must next determine and settle
by considering the amount and quality of the work each performed and the results
each obtained. . . In fairness and justice, the Court accords full recognition to Atty.
Dibaratun as the counsel de parte of the Heirs of Macabangkit who discharged his
responsibility in the prosecution of the clients' cause to its successful end. It is he, not
Atty. Ballelos, who was entitled to the full amount of attorney's fees that the clients
ought to pay to their attorney. Given the amount and quality of his legal work, his
diligence and the time he expended in ensuring the success of his prosecution of the
clients' cause, he deserves the recognition, notwithstanding that some of the clients
might appear to have retained Atty. Ballelos after the rendition of a favorable
judgment. . . Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser,
Manta and Edgar, the only parties who engaged him. The Court considers his work in
the case as very minimal. His compensation under the quantum meruit principle is
fixed at P5,000.00, and only the Heirs of Macabangkit earlier named are liable to him.
. . . The Court PARTLY GRANTS the motion to register attorney's lien filed by Atty.
Macarupung Dibaratun, and FIXES Atty. Dibaratun's attorney's fees on the basis of
quantum meruit at 10% of the principal award of P113,532,500.00.
Attorney's fees in labor cases
[In] the award of attorney's fees, there need not be any showing that the employer
acted maliciously or in bad faith when it withheld the wages. What is important is
merely a showing that the lawful wages were not paid accordingly, as in the instant
controversy.
Marival Trading, Inc., et al. vs. NLRC, et al., G.R. No. 169600, June 26, 2007
Art. 2208 (2)

Royal Cargo Corp. vs. DFS Sports Unlimited, Inc., G.R. No. 159621, December 10,
2008
Attorney's fees may be recovered in cases where the defendant's act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses to protect his
interest.
2008
Art. 2208 (5)
Article 2208(5) contemplates a situation where one refuses unjustifiably and in

evident bad faith to satisfy another's plainly valid, just and demandable claim,
compelling the latter needlessly to seek redress from the courts. In such a case, the law
allows recovery of money the plaintiff had to spend for a lawyer's assistance in suing
the defendant — expenses the plaintiff would not have incurred if not for the
defendant's refusal to comply with the most basic rules of fair dealing. It does not
mean, however, that the losing party should be made to pay attorney's fees merely
because the court finds his legal position to be erroneous and upholds that of the other
party, for that would be an intolerable transgression of the policy that no one should
be penalized for exercising the right to have contending claims settled by a court of
law. In fact, even a clearly untenable defense does not justify an award of attorney's
fees unless it amounts to gross and evident bad faith.
Petron Corp. vs. NCBA, G.R. No. 155683, February 16, 2007
Attorney's fees may also be recovered where the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable
claim.
2008
Attorney's fees and costs of litigation are awarded in instances where "the
defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim."
Diesel Construction Co., Inc. vs. UPSI Property Holdings, Inc., G.R. Nos. 154885 and
154937, March 24, 2008
Attorney's fees can be recovered in actions for the recovery of wages of laborers
and actions for indemnity under employer's liability laws.
Virgilio Sapio vs. Undaloc Construction, et al., G.R. No. 155034, May 22, 2008
Since exemplary damages are awarded, attorney's fees are also proper.
ASJ Corp., et al. vs. Sps. Efren and Maura Evangelista, G.R. No. 158086, February 14,
2008
On the basis of the same precedent, the attorney's fees must likewise be equitably
reduced considering that: (1) the petitioner has already made partial payments; (2) the
attorney's fees are not an integral part of the cost of borrowing but a mere incident of
collection; and (3) the attorney's fees were intended as penal clause to answer for
liquidated damages, hence, the rate of 10% of the unpaid obligation is too onerous.
Under the premises, attorney's fees equivalent to one percent (1%) of the outstanding
balance is reasonable.
citing Bank of the Philippine Islands, Inc. vs. Yu, G.R. No. 184122, January 20, 2010
As to attorney's fees, the general rule is that such fees cannot be recovered by a
successful litigant as part of the damages to be assessed against the losing party
because of the policy that no premium should be placed on the right to litigate. Indeed,
prior to the effectivity of the present Civil Code, such fees could be recovered only
when there was a stipulation to that effect. It was only under the present Civil Code
that the right to collect attorney's fees in the cases mentioned in Article 2208 of the
Civil Code came to be recognized. Such fees are now included in the concept of
actual damages. Even so, whenever attorney's fees are proper in a case, the decision
rendered therein should still expressly state the factual basis and legal justification for
granting them. Granting them in the dispositive portion of the judgment is not enough;
a discussion of the factual basis and legal justification for them must be laid out in the
body of the decision. Considering that the award of attorney's fees in favor of the
respondents fell short of this requirement, the Court disallows the award for want of
the factual and legal premises in the body of the decision. The requirement for express
findings of fact and law has been set in order to bring the case within the exception
and justify the award of the attorney's fees. Otherwise, the award is a conclusion
without a premise, its basis being improperly left to speculation and conjecture.
Numeriano P. Abobon vs. Felicitas Abata Abobon, et al., G.R. No. 155830, August 15,
2012
The rule is settled that the trial court must state the factual, legal or equitable
justification for its award of attorney's fees. Indeed, the matter of attorney's fees
cannot be stated only in the dispositive portion, but the reasons must be stated in the
body of the court's decision. This failure or oversight of the trial court cannot even be
supplied by the CA.
September 11, 2013
Article 2208 of the New Civil Code enumerates the instances where such may be
awarded and, in all cases, it must be reasonable, just and equitable if the same were to
be granted. Attorney's fees as part of damages are not meant to enrich the winning
party at the expense of the losing litigant. They are not awarded every time a party
prevails in a suit because of the policy that no premium should be placed on the right
to litigate. The award of attorney's fees is the exception rather than the general rule.
As such, it is necessary for the trial court to make findings of facts and law that would
bring the case within the exception and justify the grant of such award. The matter of
attorney's fees cannot be mentioned only in the dispositive portion of the decision.
They must be clearly explained and justified by the trial court in the body of its
decision. On appeal, the CA is precluded from supplementing the bases for awarding
attorney's fees when the trial court failed to discuss in its Decision the reasons for
awarding the same.
September 11, 2013, citing Frias v. San Diego-Sison, 549 Phil. 49 (2007)
Art. 2209 - When debtor incurs in delay, indemnity for damages shall be the
payment of the interest
2008
Romel P. Almeda vs. Leonor A. Cariño, G.R. No. 152143, January 13, 2003
Arwood Industries vs. D.M. Consunji, G.R. No. 142277, December 11, 2002
Crismina Garments, Inc. vs. Court of Appeals, G.R. No. 128721, March 9, 1999
Antonio L. Castelo vs. Court of Appeals, G.R. No. 96372, May 22, 1995
National Power Corporation vs. Zain B. Angas, G.R. No. 60225-26, May 8, 1992
Pacific Mills, Inc. vs. Court of Appeals, G.R. No. 87182, February 17, 1992
Tio Khe Chio vs. Court of Appeals, G.R. No. 76101-02, September 30, 1991
State Investment House vs. Court of Appeals, G.R. No. 90676, June 19, 1991
Reinsurance Company of the Orient, Inc. vs. Court of Appeals, G.R. No. 61250, June 3,
1991
Philippine Virginia Tobacco Administration vs. Ricardo P. Tensuan, G.R. No. 58817,
August 20, 1990
Central Azucarera De Bais vs. Court of Appeals, G.R. No. 87597, August 3, 1990
The guidelines for awarding interest are:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,

delicts or quasi-delicts is breached, the contravenor can be held liable for damages.
The provisions under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.
II. With regard particularly to an award of interest, in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed,
as follows:
1. When the obligation is breached, and it consists in the payment of a sum of

money, i.e., a loan or forbearance of money, the interest due should be that which may
have been stipulated in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is

breached, an interest on the amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is established
with reasonable certainty, the interest shall begin to run from the time the claim is
made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is made, the interest shall
begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The
actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to a forbearance of
credit.
Jose C. Cordova vs. Reyes Daway Lim Bernardo Lindo Rosales Law Offices, et al.,
G.R. No. 146555, July 3, 2007
Sps. Sheikding and Bily Booc vs. Five Star Marketing Co., Inc., G.R. No. 157806,
November 22, 2007
While there can be no stipulated interest, there can be legal interest pursuant to
Carolyn M. Garcia vs. Rica Marie S. Thio, G.R. No. 154878, March 16, 2007
Under Article 2209 of the Civil Code, the appropriate measure for damages in case
of delay in discharging an obligation consisting of the payment of a sum of money is
the payment of penalty interest at the rate agreed upon in the contract of the parties. In
the absence of a stipulation of a particular rate of penalty interest, payment of
additional interest at a rate equal to the regular monetary interest becomes due and
payable. Finally, if no regular interest had been agreed upon by the contracting parties,
then the damages payable will consist of payment of legal interest which is 6%, or in
the case of loans or forbearances of money, 12% per annum. It is only when the
parties to a contract have failed to fix the rate of interest or when such amount is
unwarranted that the Court will apply the 12% interest per annum on a loan or
forbearance of money.
Pan Pacific Service Contractors, Inc., et al. vs. Equitable PCI Bank, G.R. No. 169975,
March 18, 2010
Pursuant, then, to Central Bank Circular No. 416, issued on July 29, 1974, in the
absence of a written stipulation, the interest rate to be imposed in judgments involving
a forbearance of credit shall be 12% per annum, up from 6% under Article 2209 of the
Civil Code. This was reiterated in Central Bank Circular No. 905, which suspended
the effectivity of the Usury Law from January 1, 1983. But if the judgment refers to
payment of interest as damages arising from a breach or delay in general, the
applicable interest rate is 6% per annum, following Article 2209 of the Civil Code.
Both interest rates apply from judicial or extrajudicial demand until finality of the
judgment. But from the finality of the judgment awarding a sum of money until it is
satisfied, the award shall be considered a forbearance of credit, regardless of whether
the award in fact pertained to one, and therefore during this period, the interest rate of
12% per annum for forbearance of money shall apply.
September 11, 2013
But notice must be taken that in Resolution No. 796 dated May 16, 2013, the
Monetary Board of the Bangko Sentral ng Pilipinas approved the revision of the
interest rate to be imposed for the loan or forbearance of any money, goods or credits
and the rate allowed in judgments, in the absence of an express contract as to such rate
of interest. Thus, under BSP Circular No. 799, issued on June 21, 2013 and effective
on July 1, 2013, the said rate of interest is now back at six percent (6%).
September 11, 2013
Art. 2212 - Interest due shall earn legal interest from the time it is judicially
demanded
Rules on the Computation of Legal Interest
Article 2212 of the Civil Code has been incorporated in the comprehensive
summary of existing rules on the computation of legal interest laid down by the Court
in Eastern Shipping Lines, Inc. v. Court of Appeals, to wit:
1. When an obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that which may
have been stipulated in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is

breached, an interest on the amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is established
with reasonable certainty, the interest shall begin to run from the time the claim is
made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is made, the interest shall
begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The
actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to a forbearance of
credit.
PCI Leasing and Finance, Inc. vs. Trojan Metal Industries, Inc., et al., G.R. No. 176381,
December 15, 2010, citing Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No.
97412, July 12, 1994
Phil. Banking Corp. vs. Court of Appeals, G.R. No. 127469, January 15, 2004
It has been established that in the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, that is, from judicial or extrajudicial
demand under and subject to the provisions of Article 1169 of the Civil Code. In
Ongson v. People (504 Phil. 214 (2005)), we held that interest began to run from the
time of the extrajudicial demand, as duly proved by the creditor. Thus, petitioner
should also be held liable for the amount of the dishonored check, which is
P1,500,000, plus 12% legal interest covering the period from the date of the receipt of
the demand letter on 14 May 1999 to the finality of this Decision. The total amount
due in the dispositive portion of the CA's Decision, inclusive of interest, shall further
earn 12% interest per annum from the finality of this Decision until fully paid.
Eleanor de Leon Llenado vs. People of the Phil., et al., G.R. No. 193279, March 14,
2012
Art. 2213 - Interest cannot be recovered upon unliquidated claims or damages
Jesus Cuenco vs. Talisay Tourist Sports Complex, Inc., et al., G.R. No. 174154,
October 17, 2008
Pacific Mills, Inc. vs. Court of Appeals, G.R. No. 87182, February 17, 1992
Central Azucarera De Bais vs. Court of Appeals, G.R. No. 87597, August 3, 1990
Art. 2216 - Moral, nominal, temperate, liquidated or exemplary damages
Phil. Airlines, Inc. vs. Court of Appeals, et al., G.R. No. 123238, September 22, 2008
Premiere Dev't. Bank vs. Court of Appeals, G.R. No. 159352, April 14, 2004
Assessment of damages is left to the discretion of the court according to the

circumstances of each case. This discretion is limited by the principle that the amount
awarded should not be palpably excessive as to indicate that it was the result of
prejudice or corruption on the part of the trial court.
2008
Art. 2217 - Moral damages
People of the Phils. vs. Andres Ortiz, G.R. No. 133814, July 17, 2001
Alejandro Mirasol vs. Court of Appeals, G.R. No. 128448, February 1, 2001
People of the Phils. vs. Carlito Cortez, G.R. No. 131924, December 26, 2000
Jon De Ysasi III vs. National Labor Relations Commission, G.R. No. 104599, March 11,
1994
Radio Communications of the Philippines, Inc. vs. Rufus B. Rodriguez, G.R. No. 83768,
February 28, 1990
Telefast Communications/Philippine Wireless, Inc. vs. Ignacio Castro, Sr., G.R. No.
73867, February 29, 1988
When moral damages are awarded.
Moral damages may be awarded to compensate one for manifold injuries such as
physical suffering, mental anguish, serious anxiety, besmirched reputation, wounded
feelings and social humiliation. These damages must be understood to be in the
concept of grants, not punitive or corrective in nature, calculated to compensate the
claimant for the injury suffered. Although incapable of exactness and no proof of
pecuniary loss is necessary in order that moral damages may be awarded, the amount
of indemnity being left to the discretion of the court, it is imperative, nevertheless,
that (1) injury must have been suffered by the claimant, and (2) such injury must have
sprung from any of the cases expressed in Article 2219 and Article 2220 of the Civil
Code.
People of the Phil. vs. Jose Pepito D. Combate, G.R. No. 189301, December 15, 2010,
citing Del Mundo v. Court of Appeals
Rationale for awarding moral damages.
The rationale for awarding moral damages has been explained in Lambert v. Heirs
of Rey Castillon: "[T]he award of moral damages is aimed at a restoration, within the
limits possible, of the spiritual status quo ante; and therefore, it must be proportionate
to the suffering inflicted."
People of the Phil. vs. Jose Pepito D. Combate, G.R. No. 189301, December 15, 2010
Proof necessary for award of moral damages.
Moral damages are in the category of an award designed to compensate the

claimant for actual injury suffered, not to impose a penalty to the wrongdoer. To be
entitled to moral damages, a claimant must prove: 1. That he or she suffered
besmirched reputation, or physical, mental or psychological suffering sustained by the
claimant; 2. That the defendant committed a wrongful act or omission; 3. That the
wrongful act or omission was the proximate cause of the damages the claimant
sustained; 4. The case is predicated on any of the instances expressed or envisioned by
Article 2219 and 2220.
2007
There is no hard and fast rule in determining the fair amount for moral damages,
since each case must be governed by its own peculiar circumstances. It should enable
the injured parties to obtain means, diversions or amusements that will serve to
alleviate the moral sufferings the injured party has undergone by reason of defendant's
culpable action. In other words, the award of moral damages is aimed at a restoration
within the limits of the possible, of the spiritual and/or psychological status quo ante;
and therefore it must be proportionate to the suffering inflicted.
U-bix Corp. vs. Richel Bandiola, G.R. No. 157168 June 26, 2007
Purpose of award of moral damages
The award of moral damages is aimed at a restoration, within the limits of the
possible, of the spiritual status quo ante. Moral damages are designed to compensate
and alleviate in some way the physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,
and similar injury unjustly caused a person. Although incapable of pecuniary
computation, they must be proportionate to the suffering inflicted. The amount of the
award bears no relation whatsoever with the wealth or means of the offender.
172122, June 22, 2007
When a juridical person may avail of moral damages
A juridical person is not entitled to moral damages under Article 2217 of the Civil
Code. It may avail of moral damages under the analogous cases listed in Article 2219,
such as for libel, slander or any other form of defamation.
Republic of the Phil. vs. Juan C. Tuvera, et al., G.R. No. 148246, February 16, 2007
Moral damages are meant to compensate the claimant for any physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation and similar injuries unjustly caused.
Noel E. Mora vs. Avesco Marketing Corp., G.R. No. 177414, November 14, 2008
Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. Though incapable of pecuniary computation, moral damages may be recovered
if they are the proximate result of defendant's wrongful act or omission.
Mercury Drug Corp., et al. vs. Raul De Leon, G.R. No. 165622, October 17, 2008
Art. 2218 - Adjudication of moral damages
No hard-and-fast rule in determining the fair amount of moral damages.
There is no hard-and-fast rule in the determination of what would be a fair amount

of moral damages since each case must be governed by its own peculiar facts. The
yardstick should be that it is not palpably and scandalously excessive. Moreover, the
social standing of the aggrieved party is essential to the determination of the proper
amount of the award. Otherwise, the goal of enabling him to obtain means, diversions,
or amusements to restore him to the status quo ante would not be achieved.
Alice A.I. Sandejas, et al. vs. Sps. Arturo and Evelyn Ignacio, G.R. No. 155033,
December 19, 2007
In accordance with prevailing jurisprudence on heinous crimes where the

imposable penalty is death but reduced to reclusion perpetua pursuant to R.A. No.
9346, the award of moral damages should be increased from P50,000.00 to
P75,000.00, while the award for exemplary damages, in view of the presence of
aggravating circumstances, should be P30,000.00.
People of the Phil. vs. Francisca Talaro, et al., G.R. No. 175781, March 20, 2012 citing
People vs. Alberto Anticamara y Cabillo, et al., G.R. No. 178771, June 8, 2011
Art. 2219 - When moral damages may be recovered
B.F. Metal (Corp.) vs. Sps. Rolando and Linaflor Lomotan, et al., G.R. No. 170813, April
16, 2008
2008
People of the Phils. vs. Angelito Martinez, G.R. No. 137519, March 16, 2004
People of the Phils. vs. Teresa Bernardo, G.R. No. 144316, March 11, 2002
People of the Phils. vs. David Silvano, G.R. No. 127356, June 29, 1999
1992
M. H. Wylie vs. Aurora I. Rarang, G.R. No. 74135, May 28, 1992
Eustaquio A. Mayo vs. People of the Phil., G.R. No. 91201, December 5, 1991
Eulogio Occena vs. Pedro M. Icamina, G.R. No. 82146, January 22, 1990
Solomon Boysaw vs. Interphil Promotions, Inc., G.R. No. L-22590, March 20, 1987
Purpose of Imposition of Moral Damages
Moral damages are not intended to impose a penalty to the wrongdoer, neither to
enrich the claimant at the expense of the defendant.
2008
Vicente Lamis vs. David Ong, G.R. No. 148923, August 11, 2005

Although this action does not fall under either of the exceptions, the award of
moral damages to Paras was nonetheless proper and valid. There is no question that
Inland filed its third-party complaint against Philtranco and its driver in order to
establish in this action that they, instead of Inland, should be directly liable to Paras
for the physical injuries he had sustained because of their negligence. To be precise,
Philtranco and its driver were brought into the action on the theory of liability that the
proximate cause of the collision between Inland's bus and Philtranco's bus had been
"the negligent, reckless and imprudent manner defendant Apolinar Miralles drove and
operated his driven unit, the Philtranco Bus with Plate No. 259, owned and operated
by third-party defendant Philtranco Service Enterprises, Inc." The apparent objective
of Inland was not to merely subrogate the third-party defendants for itself, as
Philtranco appears to suggest, but, rather, to obtain a different relief whereby the
third-party defendants would be held directly, fully and solely liable to Paras and
Inland for whatever damages each had suffered from the negligence committed by
Philtranco and its driver. In other words, Philtranco and its driver were charged here
as joint tortfeasors who would be jointly and severally be liable to Paras and Inland.
2012
Art. 2219 (6) - Illegal search
Art. 2219 (10) - Acts and actions referred to in articles 21, 26, 27, 28, 29, 30,
32, 34, and 35
Moral damages may be recovered, among others, in acts and actions referred to in
Article 21 (of the Civil Code).
2008
Art. 2220 - Willful injury to property may be a legal ground for awarding
moral damages
167874, January 15, 2010
Associated Bank vs. Sps. Rafael and Monaliza Pronstroller, G.R. No. 148444, July 14,
2008
March 4, 2008
Northwest Airlines, Inc. vs. Steven P. Chiong, G.R. No. 155550, January 31, 2008
Armando M. Lascano vs. Universal Steel Smelting Co. Inc., G.R. No. 146019, June 8,
2004
Ramon Tan vs. Court of Appeals, G.R. No. 108555, December 20, 1994
Lufthansa German Airlines vs. Court of Appeals, G.R. No. 83612, November 24, 1994
Pan American World Airways, Inc. vs. Intermediate Appellate Court, G.R. No. 68988,
June 21, 1990
Error alone is not a ground for granting moral damages.
In the absence of fraud or bad faith, moral damages cannot be awarded; and that
the adverse result of an action does not per se make the action wrongful, or the party
liable for it. One may err, but error alone is not a ground for granting such damages.
BPI Family Bank vs. Amado Franco, et al., G.R. No. 123498, November 23, 2007
Moral damages may be recovered in case of a breach of contract where the

defendant acted in bad faith.
149338, July 28, 2008
Associated Bank vs. Sps. Rafael and Monaliza Pronstroller, G.R. No. 148444, July 14,
2008
16, 2008
2008
Northwest Airlines, Inc. vs. Steven P. Chiong, G.R. No. 155550, January 31, 2008

2012
Art. 2221 - Nominal damages
Cathay Pacific Airways vs. Sps Daniel and Maria Luisa Vazquez, G.R. No. 150843,
March 14, 2003
Napocor vs. Court of Appeals, G.R. No. 122195, July 23, 1998
Maria Elena Malaga vs. Manuel R. Penachos, Jr., G.R. No. 86695, September 3, 1992
Art. 2224 - Temperate or moderate damages
People of the Phils. vs. Adones Abatayo, G.R. No. 139456, July 7, 2004
People of the Phils. vs. Federico Genita, G.R. No. 126171, March 11, 2004
Viron Transportation Co. vs. Alberto Delos Santos, G.R. No. 138296, November 22,
2000
Ignacio Barzaga vs. Court of Appeals, G.R. No. 115129, February 12, 1997
Consolidated Plywood Industries Inc. vs. Court of Appeals, G.R. No. 101706,
September 23, 1992
The amount of temperate or moderate damages is usually left to the court's

discretion.
Temperate or moderate damages may be availed when some pecuniary loss has
been suffered but its amount cannot, from the nature of the case, be proved with
certainty. The amount thereof is usually left to the discretion of the courts but the
same should be reasonable, bearing in mind that temperate damages should be more
than nominal but less than compensatory.
November 22, 2007
Temperate damages may be recovered, because the heirs of the victims suffered
pecuniary loss although the exact amount was not proved.
People of the Phil. vs. Cesario Osianas, et al., G.R. No. 182548, September 30, 2008
People of the Phil. vs. Jessie Ballesta, G.R. No. 181632, September 25, 2008
Peter C. Tarapen vs. People of the Phil., G.R. No. 173824, August 28, 2008
Temperate damages may be recovered when the court finds that some pecuniary
loss has been suffered but its amount cannot, from the nature of the case, be proved
with certainty.
People of the Philippines vs. Mukim M. Eling, G.R. No. 178546, April 30, 2008
Jose S. Ingal vs. People of the Philippines, G.R. No. 173282, March 4, 2008
Roberto Licyayo vs. People of the Philippines, G.R. No. 169425, March 4, 2008
[E]ven if the pecuniary loss suffered by the claimant is capable of proof, an award
of temperate damages is not precluded. The grant of temperate damages is drawn from
equity to provide relief to those definitely injured. Therefore, it may be allowed so
long as the court is convinced that the aggrieved party suffered some pecuniary loss.
Reno R. Gonzales, et al. vs. Camarines Sur II Electric Coop., Inc., G.R. No. 181096,
March 6, 2013
The rationale for Article 2224 has been stated in Premiere Development Bank v.
Court of Appeals (G.R. No. 159352, April 14, 2004) in the following manner:
Even if not recoverable as compensatory damages, Panacor may still

be awarded damages in the concept of temperate or moderate damages. When
the court finds that some pecuniary loss has been suffered but the amount
cannot, from the nature of the case, be proved with certainty, temperate
damages may be recovered. Temperate damages may be allowed in cases
where from the nature of the case, definite proof of pecuniary loss cannot be
adduced, although the court is convinced that the aggrieved party suffered
some pecuniary loss.
The Code Commission, in explaining the concept of temperate

damages under Article 2224, makes the following comment:
In some States of the American Union, temperate damages are

allowed. There are cases where from the nature of the case, definite proof of
pecuniary loss cannot be offered, although the court is convinced that there
has been such loss. For instance, injury to one's commercial credit or to the
goodwill of a business firm is often hard to show with certainty in terms of
money. Should damages be denied for that reason? The judge should be
empowered to calculate moderate damages in such cases, rather than that the
plaintiff should suffer, without redress from the defendant's wrongful act.
2012
A government agency's prolonged occupation of private property without the

benefit of expropriation proceedings entitles the landowner to damages. Temperate or
moderate damages may be recovered when the court finds that some pecuniary loss
has been suffered, but its amount cannot be proved with certainty from the nature of
the case. These damages may be allowed when the court is convinced that the
aggrieved party suffered some pecuniary loss but, from the nature of the case, definite
proof of that pecuniary loss cannot be adduced. When the court is convinced that there
has been such a loss, the judge is empowered to calculate moderate damages, rather
than let the complainant suffer without redress from the defendant's wrongful act.
LBP vs. Paz O. Montalvan, et al., G.R. No. 190336, June 27, 2012
Art. 2226 - Liquidated damages, defined
Liquidated damages are those agreed upon by the parties to a contract to be paid in
case of breach thereof.
Sps. Antonio and Soledad Leonor Suatengco vs. Carmencita O. Reyes, G.R. No.
162729, December 17, 2008
Art. 2227 - Liquidated damages may be reduced
Henry Dela Rama Co vs. Admiral United Savings Bank, G.R. No. 154740, April 16,
2008
State Investment House vs. Court of Appeals, G.R. No. 112590, July 12, 2001
Domel Trading Corp. vs. Court of Appeals, G.R. Nos. 84813 & 84848, September 22,
1999
Art. 2229 - Exemplary or corrective damages
In-n-Out Burger, Inc. vs. Sehwani Inc., et al., G.R. No. 179127, December 24, 2008
March 16, 1995
Jon De Ysasi III vs. National Labor Relations Commission, G.R. No. 104599, March 11,
1994
Exemplary damages are designed to permit the courts to mould behavior that has
socially deleterious consequences, and their imposition is required by public policy to
suppress the wanton acts of the offender.
U-bix Corp. vs. Richel Bandiola, G.R. No. 157168 June 26, 2007
Purpose of imposition of exemplary damages
Anent the award of exemplary damages, Article 2229 allows it by way of example
or correction for the public good. Nonetheless, since exemplary damages are imposed
not to enrich one party or impoverish another but to serve as a deterrent against or as a
negative incentive to curb socially deleterious actions. . .
2008
Country Bankers Insurance Corporation vs. Lianga Bay and Community Multi-Purpose
Cooperative, Inc., G.R. No. 136914, January 25, 2002
Exemplary damages may be imposed by way of example or correction for the

public good, such as the enhancement of the protection accorded to intellectual
property and the prevention of similar acts of unfair competition. However, exemplary
damages are not meant to enrich one party or to impoverish another, but to serve as a
deterrent against or as a negative incentive to curb socially deleterious action.
Inn-n-Out Burger, Inc. vs. Sehwani, Inc., et al., G.R. No. 179127, December 24, 2008
Exemplary damages are awarded to serve as a deterrent to serious wrongdoings, as

vindication of undue suffering and wanton invasion of the rights of an injured person,
and as punishment for those guilty of outrageous conduct.
People of the Phil. vs. Florenda Castro, et al., G.R. No. 172370, October 6, 2008
Exemplary damages are imposed by way of example or correction for the public
good, in addition to moral, temperate, liquidated or compensatory damages.
Francisco R. Nunga, Jr., et al. vs. Francisco N. Nunga, III, G.R. No. 178306, December
18, 2008
16, 2008
Art. 2230 - Exemplary damages may be imposed when crime was committed
with one or more aggravating circumstances PLPE05
People of the Phil. vs. Dante Jadap, G.R. No. 177983, March 30, 2010
Erwin Tulfo vs. People of the Phil., et al., G.R. Nos. 161032 and 161176, September 16,
2008
People of the Phil. vs. Medardo C. Crespo, G.R. No. 180500, September 11, 2008
People of the Phil. vs. Salvador C. Nieto, G.R. No. 177756, March 3, 2008
People of the Phil. vs. Bobby Orense, G.R. No. 152969, July 7, 2004
People of the Phil. vs. Francisco Dacillo, G.R. No. 149368, April 14, 2004
People of the Phil. vs. Angelito Martinez, G.R. No. 137519, March 16, 2004
People of the Phil. vs. Claudio Barcimo, Jr., G.R. No. 147231, February 18, 2004
People of the Phil. vs. Reyman Foncardas, G.R. No. 144598, February 6, 2004
People of the Phil. vs. Arturo Manambay, G.R. No. 130684, February 5, 2004
People of the Phil. vs. Felipe Demate, G.R. No. 132310 & 143968-69, January 20, 2004
People of the Phil. vs. De La Torre, G.R. No. 121213 & 121216-23, January 13, 2004
Exemplary damages may be awarded, not only in the presence of an aggravating

circumstance, but also where the circumstances of the case show the highly
reprehensible or outrageous conduct of the offender. Also known as "punitive" or
"vindictive" damages, exemplary or corrective damages are intended to serve as a
deterrent to serious wrong doings, and as a vindication of undue sufferings and
wanton invasion of the rights of an injured or a punishment for those guilty of
outrageous conduct. These terms are generally, but not always, used interchangeably.
In common law, there is preference in the use of exemplary damages when the award
is to account for injury to feelings and for the sense of indignity and humiliation
suffered by a person as a result of an injury that has been maliciously and wantonly
inflicted, the theory being that there should be compensation for the hurt caused by the
highly reprehensible conduct of the defendant — associated with such circumstances
as willfulness, wantonness, malice, gross negligence or recklessness, oppression,
insult or fraud or gross fraud — that intensifies the injury. The terms punitive or
vindictive damages are often used to refer to those species of damages that may be
awarded against a person to punish him for his outrageous conduct. In either case,
these damages are intended in good measure to deter the wrongdoer and others like
him from similar conduct in the future.
People of the Phil. vs. Jose Pepito D. Combate, G.R. No. 189301, December 15, 2010,
citing People v. Dalisay
In criminal offenses, exemplary damages as a part of civil liability may be imposed

when the crime was committed with one or more aggravating circumstances.
People of the Phil. vs. Jose Perez, G.R. No. 182924, December 24, 2008
People of the Phil. vs. Rolly L. Montesa, G.R. No. 181899, November 27, 2008
People of the Phil. vs. Millano Muit, et al., G.R. No. 181043, October 8, 2008
People of the Phil. vs. Edwin C. Fuentes, G.R. No. 175995, September 23, 2008
Erwin Tulfo vs. People of the Phil., et al., G.R. Nos. 161032 and 161176, September 16,
2008
People of the Phil. vs. Reynaldo P. Teczon, G.R. No. 175098, September 12, 2008
People of the Phil. vs. Mukim M. Eling, G.R. No. 178546, April 30, 2008
Exemplary damages are awarded to serve as a deterrent to serious wrongdoings, as

vindication of undue suffering and wanton invasion of the rights of an injured person,
and as punishment for those guilty of outrageous conduct.
In accordance with prevailing jurisprudence on heinous crimes where the

imposable penalty is death but reduced to reclusion perpetua pursuant to R.A. No.
9346, the award of moral damages should be increased from P50,000.00 to
P75,000.00, while the award for exemplary damages, in view of the presence of
aggravating circumstances, should be P30,000.00.
People of the Phil. vs. Francisca Talaro, et al., G.R. No. 175781, March 20, 2012 citing
People vs. Alberto Anticamara y Cabillo, et al., G.R. No. 178771, June 8, 2011
The term "aggravating circumstances" used by the Civil Code, the law not having
specified otherwise, is to be understood in its broad or generic sense. The commission
of an offense has a two-pronged effect, one on the public as it breaches the social
order and the other upon the private victim as it causes personal sufferings, each of
which is addressed by, respectively, the prescription of heavier punishment for the
accused and by an award of additional damages to the victim. The increase of the
penalty or a shift to a graver felony underscores the exacerbation of the offense by the
attendance of aggravating circumstances, whether ordinary or qualifying, in its
commission. Unlike the criminal liability which is basically a State concern, the award
of damages, however, is likewise, if not primarily, intended for the offended party
who suffers thereby. It would make little sense for an award of exemplary damages to
be due the private offended party when the aggravating circumstance is ordinary but
to be withheld when it is qualifying. Withal, the ordinary or qualifying nature of an
aggravating circumstance is a distinction that should only be of consequence to the
criminal, rather than to the civil, liability of the offender. In fine, relative to the civil
aspect of the case, an aggravating circumstance, whether ordinary or qualifying,
should entitle the offended party to an award of exemplary damages within the
unbridled meaning of Article 2230 of the Civil Code.
People of the Phil. vs. Erland B. Sabadlab, G.R. No. 175924, March 14, 2012 citing
People vs. Catubig, G.R. No. 137842, August 23, 2001
People of the Phil. vs. Edgardo F. Lupac, G.R. No. 182230, September 19, 2012 citing
People vs. Catubig, G.R. No. 137842, August 23, 2001
Art. 2232 - Exemplary damages in contracts and quasi-contracts
Phil. Airlines, Inc. vs. Court of Appeals, et al., G.R. No. 123238, September 22, 2008
Singapore Airlines Limited vs. Andion Fernandez, G.R. No. 142305, December 10,
2003
Lufthansa German Airlines vs. Court of Appeals, G.R. No. 83612, November 24, 1994
Exemplary damages may be awarded in a breach of contract if the defendant acted

in a wanton, fraudulent, reckless, oppressive or malevolent manner.
2008
In contracts and quasi-contracts, exemplary damages may be awarded if the
defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.
18, 2008
2008
2008
In quasi-delicts, exemplary damages may be granted if the defendant acted with

gross negligence.
16, 2008
Art. 2233 - Award of exemplary damages
(The award of exemplary damages) cannot, however, be considered as a matter of

right; the court has to decide whether or not such damages should be adjudicated.
18, 2008
16, 2008
Art. 2234 - When court may consider granting exemplary in addition to

liquidated damages
Francisco R. Nunga, Jr., et al. vs. Francisco N. Nunga III, G.R. No. 178306, December
18, 2008
Ernesto Canada vs. All Commodities Marketing Corp., G.R. No. 146141, October 17,
2008
March 16, 1995
A showing that the plaintiff is entitled to temperate damages allows the award of
exemplary damages.
Ernesto Canada vs. All Commodities Marketing Corp., G.R. No. 146141, October 17,
2008
The plaintiff must show that he is entitled to moral damages before he can be
awarded exemplary damages.
2008
Before the court may consider an award for exemplary damages, the plaintiff must
first show that he is entitled to moral, temperate or compensatory damages; but it is
not necessary that he prove the monetary value thereof.
18, 2008
16, 2008
Art. 2241 - Preferred claims or liens on specific movable property of debtor
Conchita S. Hautea vs. National Labor Relations Commission, G.R. No. 96149,
February 16, 1994
Arabesque Industrial Phils. vs. Court of Appeals, G.R. No. 101431, December 14, 1992
Development Bank of the Phils. vs. National Labor Relations Commission, G.R. No.
82763-64, March 19, 1990
[A] distinction should be made between a preference of credit and a lien. A

preference applies only to claims which do not attach to specific properties. A lien
creates a charge on a particular property. The right of first preference as regards
unpaid wages recognized by Article 110 of the Labor Code, does not constitute a lien
on the property of the insolvent debtor in favor of workers. It is but a preference of
credit in their favor, a preference in application. It is a method adopted to determine
and specify the order in which credits should be paid in the final distribution of the
proceeds of the insolvent's assets. It is a right to a first preference in the discharge of
the funds of the judgment debtor.
Manuel D. Yngson, Jr. vs. PNB, G.R. No. 171132, August 15, 2012
Art. 2242 - Preferred claims, mortgages and liens on immovables or real rights
Atlantic Erectors vs. Herbal Cove Realty Corp., G.R. No. 148568, March 20, 2003
Dev't. Bank of the Phil. vs. Court of Appeals, G.R. No. 126200, August 16, 2001
State Investment House, Inc. vs. Court of Appeals, G.R. No. 123240, August 11, 1997
Conchita S. Hautea vs. NLRC, G.R. No. 96149, February 16, 1994
Development Bank of the Phils. vs. NLRC, G.R. Nos. 100264-81, January 29, 1993
Development Bank of the Phils. vs. NLRC, G.R. Nos. 82763-64, March 19, 1990
Art. 2243 - Preferred claims or credits considered mortgages or pledges
Dev't. Bank of the Phils. vs. Court of Appeals, G.R. No. 126200, August 16, 2001
State Investment House, Inc. vs. Court of Appeals, G.R. No. 123240, August 11, 1997
Art. 2244 - Preferred claims or credits with reference to other property of

debtor
Conchita S. Hautea vs. NLRC, G.R. No. 96149, February 16, 1994
Development Bank of the Phils. vs. NLRC, G.R. Nos. 100264-81, January 29, 1993
Development Bank of the Phil. vs. NLRC, G.R. Nos. 82763-64, March 19, 1990
Art. 2245 - Credits which do not enjoy preference
Arabesque Industrial Phils. vs. Court of Appeals, G.R. No. 101431, December 14, 1992
Art. 2249 - Two or more credits with respect to specific real property or real
rights shall be satisfied pro rata
Dev't. Bank of the Phils. vs. Court of Appeals, G.R. No. 126200, August 16, 2001
Art. 2254 - No vested or acquired right can arise from illegal acts or those that
infringe upon the rights of others
Nicasio I. Alcantara vs Department of Environment and Natural Resources, et al., G.R.

No. 161881, July 31, 2008
Art. 2263 - Governing law on rights to the inheritance of a person who died
before the effectivity of Code

Civil Code Case Doctrines

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Republic Act No.

386 - Civil Code

Respondents' argument, however, is logically correct only insofar as it equates the

"Section 1. There shall be published in the Official Gazette [1] all

Publication is a basic postulate of procedural due process. The purpose of

Art. 3 - Ignorance of the law excuses no one from compliance therewith.

Alex L. David vs. COMELEC, G.R. No. 127116, April 8, 1997

Retroactivity of laws is a matter of civil law, not of a constitutional law, as its

In all contractual, property or other relations, when one of the parties is at a

Art. 5 - Acts executed against the provisions of mandatory or prohibitory laws

Waiver is defined as "a voluntary and intentional relinquishment or abandonment

Art. 7 - Laws are repealed only by subsequent ones

Purpose of Curative Statutes

The decision now on appeal reflects the orthodox view that an

Art. 8 - Judicial decisions applying or interpreting the laws or the Constitution

GSIS vs. Leo L. Cadiz, G.R. No. 154093, July 8, 2003

PBCom vs. CIR, G.R. No. 112024, January 28, 1999

Art. 9 - No judge or court shall decline to render judgment by reason of the

Art. 13 - Years, months, days or nights

Radin C. Alcira vs. NLRC, G.R. No. 149859, June 9, 2004

A year is understood to be three hundred sixty-five (365) days.

Art. 16 - Real and personal property; intestate and testamentary succession

Art. 17, par. 3 - A declaration of public policy cannot be rendered ineffectual

Andrade vs. Court of Appeals, G.R. No. 127932, December 7, 2001

David P. Llorente vs. Sandiganbayan, G.R. No. 85464, October 3, 1991

Standards in the Exercise of One's Rights and Duties

This article, known to contain what is commonly referred to as the principle of

Art. 20 - Every person who, contrary to law, wilfully or negligently causes

Alfredo S. Paguio vs. PLDT, G.R. No. 154072, December 3, 2002

Custodio vs. Court of Appeals, G.R. No. 116100, February 9, 1996

Standards in the Exercise of One's Rights and Duties

This article, known to contain what is commonly referred to as the principle of

Art. 22 - Every person who through an act or performance by another, or any

Conditions of an Accion in Rem Verso

Principle of Unjust Enrichment; Principle of Equity.

Under the principle of unjust enrichment — nemo cum alterius detrimento

Enrichment consists in every patrimonial, physical or moral advantage appreciable

Enrichment of the defendant consists in every patrimonial, physical, or moral

The enrichment of the defendant must have a correlative prejudice, disadvantage,

The enrichment of the defendant must have a correlative prejudice, disadvantage,

Equity jurisdiction aims to do complete justice in cases where a court of law is

A person shall not be allowed to profit or enrich himself inequitably at another's

[T]he rationale underlying the owner's right to seek an evaluation of the

Art. 23 - Obligation to indemnify when one benefits from an act or event

Art. 24 - Protection for party who is at a disadvantage

(2) - Meddling with or disturbing the private life or family relations of

(3) - Intriguing to cause another to be alienated from his friends;

(4) - Vexing or humiliating another on account of his religious beliefs, lowly

Art. 27 - Action for damages when a public servant or employee refuses or

David P. Llorente vs. Sandiganbayan, G.R. No. 85464, October 3, 1991

Art. 28 - Unfair competition in agricultural, commercial or industrial

Art. 29 - Civil action for damages

Art. 30 - Separate civil action to demand civil liability

Art. 31 - Civil case can proceed independently of criminal proceedings

Art. 32 - Liability for violations of rights and freedoms

A public officer who directly or indirectly violates the constitutional rights of

(8) The right to the equal protection of the laws

(10) The liberty of abode and of changing the same.

(16) The right of the accused to be heard by himself and counsel, to be

(19) Freedom of access to the courts

Art. 36 - Prejudicial questions

Art. 41 - Intra-uterine life

Art. 44 - Juridical persons