ATENEO Civil Law Pre Week PDF

ATENEO CENTRAL BAR OPERATIONS 2018 civiL LAW Pe rd GENERAL PRINCIPLES Forms and | solemnities | celebrationis: Law of SSormites | OPor | She Soney nwt Cs sas pul | xcopion on Clr A. EFFECT AND APPLICATION OF — tans Agee geri a © Suremarice the governing. lens or ere Pi 7 A Note: Prohibitive laws Pere vic ‘have for tt La aa — Eat pede py and gos ia ye ce fendered wesfcive welveor | Terotety peed eel ‘oumin | unmet poce Dl Pehopine | where etme wes Dd ‘crore |" onmited | rr Cs ganas ton (relating to. the Nationality: -..rt~—S family tats | Phipines, | National ow GA foreigner maried to a Fipina had a a —L—LmLrt—s—O— mmm | aaa foreigner rofused. te suppor ihe “child — =r oat, fot blged to support ® eh. tthe Toreignets refusal ven? Provery | Resiand | texreisiaer |] NS wht te provtone ofthe Family Code ‘me | fanorat | .ewaltnesisce | on'suppurt erty Spy bipeo canta te Proper | whee popes | teatherin este de ner provelse couneys pen hr ocean prosunpton apples hate he | =. See aamteny| pros, curcnune wil posure fete eke e...Lr,rr—~—r—"C“C §ses serene, UE ne] itamallow Moreover ihe ierlgnts nator Se r— ceearaon is "unier| hon such contey isan soothed pute cosldsen oo hr |.hLhr,rrrt—~—<“—s—sSNCsrsC—C—isCaTrsN a rrr—— rrrt—~—s—=S although they may have real estate, (an. 416-417) OWNERSHIP : What is ownership? ‘Its the independent and general right of a person to the exclusive enjoyment and control fof a thing in his possession, enjoyment, disposition, and recovery, subject only to the restrictions or limitations established by law and the rights of others. (Art 427-428) Q: What is “treasure”? A: Any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ‘Ownership of which does not appear. (Art. 439) fhen can a finder of hidden treasurer be entitled to one-half? ‘A: The finder is entitled to % it (CN-TACO) 41. Finding is by Chance; 2. Finder is Not 3 a. Trespasser; ban Agent of the landowner; ©. Go-owner of the property ‘where itis found 4d. Quner of the land, building or ‘ther property on’ which it is found, because oif he is, he is entitled to the whole. (Ar. 438) : What is the doctrine of solf-help? A: The doctrine of sel-help provides that the ‘owner or lawful possessor of a thing has the right to exclude any person from the enjoyment ‘and disposal thereot. He may use such force as may be reasonably necessary to repel oF prevent an actual or threatened unlawlul physical invasion or usurpation of his property. (ant. 429) : What are the limitations to the doctrine of self-help? 2 The owner or lawful possessor may only: 1. Use such force as may be reasonably necessary to repel or prevent an actual fof threatened unlawful physical invasion or usurpation of his property; and 2. Exercise such right only at the time of ‘aclual or threatened dispossession, or immediately after the dispossession to regain possession of his property. (Gelman Management & Services, inc ¥. Court of Appeals, G.R. No. 76246, 1989) : When is there a disputable presumption of ownership? ‘A: Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recavery of the property. (Art. 433) @: Distinguish “beneficial ownership” from “naked ownership. K oer rari ‘Ownership Enjoyment ofall the recognized by law benefits and ‘and capable of privileges of boing enforced in ownership 25 ‘courts. against possession of the bare tte to property. Right to enjoyment | Bare le to property inoone person, while | where the right to the legal tite may be | the use and fruts in another's name. | _ has been denied, (Residents of Lower Atab & Teacher's Vilage ¥. Santa Monica Industrial & Development Corp... G.R. No. 198878, 2014) Q: Is X guilty of forum shopping for falling to disclose in the unlawful detainer case that an action for recovery of ownership of the same property is pending? A:NO. The issues or causes of action in the two ceases are not similar. In the summary action of Unlawful detainer, the question to be resolved is: which party has the better or superior right to the physical possession (de facto possession) of the disputed premises, independent of any claim of ownership by any party. Whereas in the action for recovery of ownership, the question to be resolved is which party has the lawful ttle Cor dominical right (owners right) to the disputed premises. A pending action involving ownership neither suspends nor bars the proceedings in the summary action for ejectment pertaining to the same property, in view of the dissimilarities ordiferences in the reliefs prayed for. (Bradford 7ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW United Church of Christ, In. v. Dante Ando, GR, 195669, May 30, 2016) @: Are tax receipts and declarations. considered proof of owernship? A: While tax receipts and declarations are ‘merely indicia of a claim of ownership, however, since X was unable 10 produce any shred of document as evidence of her claim, the tax ecaration becomes prima facie evidence of ‘nership in favor of Y. Absent any other strong evidence, tax receipts or tax declarations are prima facie proof of ownership or possession of the property for which such taxes have been paid. (Sps. Willam Guidangen v. Devote Wooden, G.R. 174445, February 15, 2012) IVACCESSION {@: What is accession? A: I is the right of the owner of a thing to become the owner of everything which i: 1. Produced (accession discreta) or 2. incorporated or attached, either naturally or artiicialy (accession Continua). (Art. 440) Q: What are examples of accession discreta or things produced? R 1. Natural fruits - spontaneous products of the soll, and the young and other products of animals; 2. Industrial fruits - produced by lands of any kind through cultivation or labor; and 3. Givi fruits - rents of buildings or lands, and perpetual or life annuities or other similar income. (Ar. 441-442) @: Is accession a mode of acquiring ‘ownership? ‘A: No. As accession presupposes a previously existing ownership by the owner over the Principal, accession isa right implicitly included in ownership. (Spouses Gulla v. Heirs of Labrador, G.R. No. 149418, 2006) : What is the obligation of the person who receives the fruits? ‘A: He who receives the fru has the obligation to pay the expenses made by a third person In their production, gathering, and preservation, (a. 443) Q: What is alluvium? ‘A: The accretion received by the land adjoining the banks of the river must be the result of the {gradual and natural action of the current of the fiver. The accretion does not automatically become registered land just because the land which receives it is covered by Torrens tie Registration does not give tile to the land, but merely confirms and thereafter protects the title already possessed by the owner, making it Imprescriptble by occupation of third parties (Art. 457) (Grande v. CA, 115 Phil 521) Q: What is avulsion? ‘A: Whenever the current of a river, creek or torrent segregates a known portion of land and transfers it to another estate, the owner of the ‘segregated portion retains the ownership of it, provided itis removed within two years. (Art. 459) Q: Differentiate “alluvium” from “avulsion.” & EXTEN ‘Accretion is gradual | Accretion is sudden. ‘and abrupt “Rearotion cannolbe | Accretion can be identified ‘dentiied There is detachment followed by attachment ‘ecretion belongs to | Ownership is the owner of the | retained by the land to which the | owner of the land altachment is made | from which tis, ipso jure detached for a cortain period. @: Summarize the rules when a landowner- builder/planterfsower makes constructions with the materials of another. a ‘Owner of Penn) pees Cee eet (LO-BPS) ‘Becomes the owner of | 1. Be entived to the materials, but he | full payment must pay fortheirvalue. | for value of, materials; or 2. Remove materials, provided no delstruction oF substantial injury to. the ‘work made. 18ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW 7 Be entitled to full payment for value of materials, plus. ‘damages; or 2. Remove materials, even if there is destruction oF substantial Injury to work done, plus damages, Can acquire the materials, but he must pay for their value plus damages. “Acquire the] 1. Loses, materials, without | "materials, paying for the} without value; and indemnity; 2 Be eniiled to] and 2. Will be able for damages due to defects damages due 10 defects or inferior Quality of materials. or inferior quality of materials. : Discuss the rights and obligations of the landowner and the builder, planter and & era) ‘Option Tr] 1. Recewe indemnity for Appropriate what| necessary, useful, hos been bulk, | and toxurious planted, or sown | expenses; ftir paying | 2. Right of retention over Indemnity for the land without 1. Necessary ‘obligation to pay rent ‘expenses: tnt ful payment of 2. Usetut indemnity; expenses; | 3. Remove useful 3. And Luxurious | improvements expenses, if] provided i does not theLOwantsto | cause any nary, ‘appropriate the | 4. Remove huxurious ‘oxurous improvements, if LO improvements. | does not appropeate and provided that there igo injury tothe ‘Option 1: Acquire ‘whatever has boon bul, planted or sown plus damages. _ without paying indemnity, except 4 Necessary expenses for Preservation of fond; and 2. unurous expenses, should LO want to acquire oxuious Improvements Tomove whalever has been bull planted, "or 2. tthe vale of land is considerably “more than that of "the building or trees, BP ‘cannot be compolied to buy the land and wit instead pay teasonabie rent. Note: tf BPS cannot pay the rent, LO can eject the BPS from the tnd, ‘Loses whatever has been bull, planted or ‘sown ‘without indemnity 2. Entitled to reimbursement for necessary expenses for preservation of Tand ‘but no. right of retention, 3. Entitled 0 Felmbursement for Useful expenses but ‘cannot remove useful Improvements even if Femoval wil not cause injury 4, NOt” entitled to Feimbursoment for hxuious expenses except when LO. wants to acquire Texurious Improvements (value of which wil be the fone at the time LO enters into possession), ‘5, Eniled to remove txurious Improvements i wit rot cause injury and LO does aot want to ‘cquite them: and 6. lable pay damages, Note: BPS in bad faith cannot insist on purchasing the land, he ‘does not have the option to ay forthe pice. principal hing | ‘plion 2: Obige the | 7. To purchase the Tend 'BIP to uy the land | at fair market valve, forthe Sto pay the | when. value Is not propor rent considerably more than thal) of the Note: Uniess the | building or tees: value of the land i Considerably more | Note: It BP cannot pay than that of the | purchase price of land, LO builing oc wees, | ean requite the BPS to ‘Oplion 2 To obkae BP to. buy and, even it price. is considerably more than the value of inmprovement, and S to pay proper rent lus damages. ‘Obiged 1 pay for and OF proper font and pay Samages. 19ATENEO CENTRAL \L BAR OPERATIONS 2018 civIL LAW ‘Option 5 To comipal BPS to remove or ‘emalsh work done plus damages. To ‘soqure whatever has boon uit, planted » or sown by paying indemnity pe somages. ‘Same a5 A ‘Note: LO" in bad faith whenever the fact was. done with bis knowledge and ‘wlo opposition. ‘Obiged to remove or] ‘demolish work dane at hss expense and pay | samages. IT LO acquis whatever has beon bull, planted or sown, BPS. must be Inderiied the value thereof plus damages. Note: LO does not fscquie whatever has been” bull, planted "or sown, BPS cannot insist ‘0m purchasing land, BPS can remove whatever thas been buit, planted or sown regardless of ‘whether oF ott wil cause injury and willbe entitled to damages 20ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW 4: Discuss the rules when 3 parties (Landowner, Bullder/Planter/Sower, Owner of Materials) are involved. RULES WHEN THREE (3) PARTIES ARE INVOLVED: LANDOWNER (LO) Ca (BPs) ‘A. GOOD FAITH Cea) ‘Option 1 To acquire whatever has been bull, planted or sown provided there is payment of indemnity (which includes value of what has been bul, planted or ‘sown plus value of materials used), To receive indemnity from LO with right of retention over land until full payment To receive indemnity from BPS who i primarily lable for materials; if BPS is insolvent, to proceed against LO who is subsidiarily liable with no right of retention, ‘Option 2: To objige BP to buy land oF S to pay proper rent unless value of land is considerably more than that of building or trees, To buy land oF o pay proper Tent To receive Indemnity rom BPS only (LO is not subsidiary lable) with right of retention until full payment, To remove materials if there will be no injury on building or trees and wil have material rent lien against BPS for — payment of value of materials. G00 FAH ‘GOOD FAITH, BAD FAITH Same as A. Whateveris the choice of LO, the OM 1. loses the materials in favor of BPS, and 2. will have no right to receive indemnity {rom BPS nor LO. 6000 FAITH ‘BAD FAITH BAD FAITH ‘Option 1. To acquire whatever has been but, planted or sown without paying indomnity except necessary ‘expenses for preservation of land ‘and luxurious expenses (should LO want to acquire luxurious improvements) plus damages. * ‘BPS loses what has been bull Planted or sown plus liable for damages but is entitled to be indemnified for necessary ‘expenses and luxurious expenses (should LO want to acquire luxurious improvements) and has no right of removal even if removal will nt cause damage. (Gince both BPS and OM are inbad Tah, ‘weat them both as if they are in good faith) Whatever is the choice of LO, OM has right to receive indemnity for value of materials from BPS only (LO has no subsidiary fabilty for value of materials because OM is considered in good fai only insofar as BPS is concerned). ‘Option & To oblige BP to buy the land oF S to pay proper rent plus damages. To buy the land or pay proper rent and liable to pay damages to LO. ILO chooses Opiion 1, OM has no fight to remove materials even if there will be no injury or damage. If LO chooses Option 2, OM has right of removal, provided there wil be no injury or damage. Option 3 To obige OPS to ‘demolish or remove what has been built, planted or sowed plus damages. To demolish or remove what has been built, planted or sowed and liable for damages. Liable to pay Tor damages due to defeais OF inferior quality of materials. BAD FAITH ‘GOOD FANTH, ‘GOOD FAITH To acquire what has been built To receive indemnity trom LO plus jalue of To receive indemnity for planted or sown by paying | damages. materials principally from BPS and in indemnity plus liable to pay case BPS is insolvent, subsidiarity from damages. Lo. E.BAD FAITH ‘G0Ob FARTH ‘BAD FAMTH Same as D. ‘Same as. No right To receive indemnity Tor value of ‘materials from BPS nor LO (who ends up ‘owning buildings o¢ tees)ATENEO CENTRAL BAR OPERATIONS 2018, civ LAW V. QUIETING OF TITLE TO OR INTEREST IN AND REMOVAL OR PREVENTION OF CLOUD OVER TITLE OR INTEREST IN REAL PROPERTY Q: What is an action to quiet titie? 1: Itis a remedy which has for its purpose an ‘adjudication that a claim of te or interest on ‘wally, adverse to the plaintif, is invalid or inoperative, and hence, the plaintif and those claiming under him may forever be free of any hostile claim. (Baricuatro, Jr_vs Court of Appeals, G.R. No, 105902, 2000) Q: What are the requisites for an action to romove cloud or to quiet the title? A: The requisites are: (LEIP) 1. Complainant must have a Legal or an Equitable right to or interest in the real Droperty; 2. The deed, record, claim, encumbrance, cr proceeding claimed to be casting cloud on his tle must be shown to be fact Invalid or inoperative despite its Prima facie appearance of validly oF legal efficacy. (Mananquil v. Moico, GR. No. 180076, 2012) VI. CO-OWNERSHIP : Define co-ownership. ‘A Itis the ownership of an undivided thing or right that belongs to or is shared by several persons. (Art. 484) @: What are the characteristics of co- ownership? ® 1. Pluralty of subjects, who are the co- 2. Unity of object or material indvision; 3. Recognition of ideal shares, _ which determines the rights and obligations of co- ‘owners. (Sanchez v. Court of Appeals, GR. No. 152766, 2003) @: What are the requisite number of co- ‘owners who must consent for (1) repairs (2) filing of ejectment actions (3) alterations (4) acts of ownership and (5) acts of ‘administration? & Repairs Filing of ejectment Pei Ree Pore ‘Administration Financial Major @: What is the effect of sale by a co-owner? A: Alienation by a co-owner shall be limited to the pitinn which may be allotted to him in th division upon the termination of the co- ‘ownership. Until @ patition is made among co- ‘owners, no one of them can claim any particular portion of an undivided property as exclusively as his own. The porton can only be ascertained upon termination. (Gonzales v. Ichon, 47 OG 12, 1951), Q: When will prescription run in favor of a co-owner? ‘A: No prescription shall run in favor of a co- ‘owner or co-heir against his co-owners oF co- heirs so long as he expressly or impliedly recognizes the co-ownership. (Art. 494). Unless: 1. The co-owner has performed unequivocal acts of repudiation ‘amounting to an ouster of the other co- 2. such positive acts of repudiation have been made known to the other co- ‘owners; and 3. the evidence is clear and convincing, (Robles v. CA, G.R. No. 123509, March 14, 2000) Vi, POSSESSION Q: What is possession? A It is the holding of a thing or the enjoyment of aright. (Art. 523) Q: What is actual possession? A: Actual possession consists in the ‘manifestation of acts of dominion of such a nature as a party would natural exercise over his own property. (Republic v. Metro Index Realty, G.R. No. 198585, 2012) Q: What Is the effect of actual possession under claim of ownership? {A: Actual possession under claim of ownership rises a disputable presumption of ownership. The true owner must resort. to. judicial proceedings for the recovery of the property. (art 433) : What is constructive possession? A: It is the possession and cultivation of a property under claim of ownership, provided that the propery is not in the adverse possession of another person. (Republic v. ‘Metro Index Realty, G.R. No, 198585, 2012) 22ATENEO CENTRAL BAR OPERATIONS 2018, CIVIL LAW @: Distinguish posses: an owner from possession aholder. in the concept of the concept of EY Peet Paired Possession by | Acknowledges that the owner | another is the owner(eg. himself or | lessee, depositary, agent, those who trustee). Acts and claims and possession merely actsasan | tolerated, and those ‘owner. executed clandestinely ‘and without the knowledge of the possessor of a thing, or by violence, Possession in| Possession in the name of ‘one's own, ‘nother. Can serve to | Cannot ripen into ‘acure ‘vmership by acquisitive ‘ownership by prescription, prescription. : When is a possessor sald to be in good faith? A: A possessor is in good faith where he is not ‘aware of any law which invalidates his: 4. Tie: or 2. Mode of acquisition. (Art. 526) Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. (Art. 527) @: Define acts of tolerance. A: Tolerated acts are those which “by reason of neighborliness or familiarity, the owner of property allows his neighbor or another person todo on the property. (Department of Education v. Casibang, G.R. No. 192268, 2016) @: What are the legal implications of possession by mere tolerance? ‘A: Those who occupy the land of another at the latter's tolerance or permission, without any contract between them, are necessarily bound by an implied promise that the occupants will vacate the property upon demand. (Department of Education v. Casibang, G.R. No. 192268, 2016) @: May property possessed by mere tolerance be acquired through prescription? ‘A: No, even though possession by tolerance be Continued for a long time, no right will be acquired by prescription. Also, the right to demand the return of theie property at any time as long as the possession was merely tolerated 's nevor barred by laches. (Department of Education v. Casibeng, G.R. No. 192268, 2016) @: What are the rules on possession of movables? A: The possession of movable property ‘acquired in good faith is equivalent to a tite. Nevertheless, one who has lost any movable or has been unlawtully deprived thereot, may recover it from the person in possession Ifthe possessor of a movable lost or which the owner has been unlawhuly deprived, has ‘acquired it in good faith at a public sale, the ‘owner cannot obtain its return without reimbursing the price paid. (Art. 559) 23ATENEO CENTRAL BAR OPERATIONS 2018, CIVIL LAW : Summarize the rules on effects of possession. Bi SEZ Ea ‘Necessary Expenses | 1. Right lo reimbursement 1. Right to reimbursement (Art, 546) 2. Right of retention until paid 2.No tight of retention: must vacate property — Those made for the recourse to courts preservation of the thing Useful Expenses (Art 546) “Those that add value to the property 7. Right to reimbursement of amount spent or increase in value, at owner's option 2, Right of retention until paid 3. Right of removal (provided no substantial damage or injury is caused to the principal, reducing its value) ~ unless, the owner of lawful possessor exercises ‘option 1. (Art. 47) No right to reimbursement. Luxurious or Omamental Expenses Tn general, no right to refund or retention but can femove the omaments if no substantial injury is caused. However, owner has option to retain the ‘ornament by refunding the amount spent. (Art 548) Th general, no right to refund or retention but can remove the omaments if no substantial injury is caused, However, owner has option to retain the ‘omament by refunding the value it has at the time owner enters into possession, depreciated value. (Art. 549) Taxes and Charges 7. On capital > charged to owner 2. On fruits > charged to possessor 3. Charges > prorated 1, On capital > charged to ownar 2.On fruits > charged to owner 3. Charges > to owner Regarding gathered or ‘severed fruits Possessor is entitled tothe fut received before possession is legally interrupted. (art 544) Possessor must return value of fruls aeady received as well as value of fruits which the ‘owner or legitimate possessor could have received, minus necessary expenses for production, gathering, and harvesting, to revent the owner from being unjustly ‘enriched. (Art. 549) Cativation expenses of gathered fults — ot reimbursed to possessor. ‘Reimbursed to possessor Regarding pending or Uungathered fruits (art, 545) Proating based on period of possession, between possessor and ‘owner of: expenses, net harvest, and charges Possessor shall not have any Fight “The owner may, at fis option, allow possessor to finish the cultivation and gathering of the growing fruits, as an indemnity for his part of the expenses of cultivation and the net proceeds. The possessor who refuses to accept this concession, shall lose the right to be indemnified. No indemnity Tmprovernents no longer No reimbursement No reimbursement existing (Art. 553) Tiabilty or deterioration or | Only acted wi fraudulent intent or | Liable in evory case, even I due to Tortuous loss (Art. 552), negligence, aller summons. ‘event (whether before or after service). Improvements caused by ature of time (Art. 554) To owner oF lawful possessor "To owner or lawful possessor.ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW ‘Vm, USUFRUCT What is a usufruct? A Itis the ight to enjoy the property of another with the obligation of preserving its form and ‘substance, unless the title constituting itor the law provides otherwise. (Art. 562) : Distinguish Usufruct and Easment. 2 ae Setter movata 0 | poveny immovable property. Extinguished by the | Not extinguished by death of | death of dominant usufructuary. ‘owner. involves a Tight oT | Non-possessary Possession in an|right over an immovable, immovable, Includes all the uses | Limited to paricular and the fruits of the | or specific use of propery. servient estate, May a usufructuary lease the property held in usufruct or assign his right of usufruct? ‘A: Yes, as a usufruct is considered as an “interest in real property, a usufructuary right is ‘one that may be leased and sold. (Reyes v. Grey, GR. No. 6869, 1911) 1X. EASEMENTS : What is an easement? ‘A: An easement is an encumbrance imposed tupon an immovable for the benefit of another immovable belonging toa different owner. (Art 613) It may also be established for the benefit ‘of a community, or of one or more persons to whom the encumbered estate does not belong. (At. 614) @: What are the different kinds of easements? 1. Continuous v. Non-continuous: ’2. Continuous—the use of which is oF may be incessant, without the Intervention of any act of b. Discontinuous—that which is used at intervals and depends ‘upon the act of man. (Art 615) 2. Apparent v. Non-Apparent ‘@. Apparent—made known and is ‘continually kept in view by external signs that reveal the uuse and enjoyment of the b. Non-apparent—shows no external indication of its existence: (Art. 615) 3. Positive v. Negative ‘a. Positive—Imposes the obligation "of allowing something to be done on the ‘owner of the sorviont estate b. Negative—prohibits the owner of the servient estate from doing something which he could lawfully do if the easement did not exist; (Art 616) 4. Legal v. Voluntary ‘2. Legalthat which exists by law; b. Voluntary—that which is formed by the will of the patties. (Art. 615) @: How are continuous and apparent ‘easements acquired? 1. By virlue of tile 2. By prescription of 10 years through adverse possession or frequent exercise 8. Positive - from the day which dominant estate commenced to exercise it b. Negative - from the day which the dominant estate forbade, by an instrument acknowledged ‘before 3 rotary public the servient estate, from executing an act which would be lawful without the easement. (Art. 620-621) {Q: What easements may be acquired only by virtue of a title? 1, Continuous and non-apparent; 2. Discontinuous and apparent, 3, Discontinuous and non-apparent, (Ad 622) Q: What are the different legal easoments? Relating to water; Right of way; Light and view: Party wal Drainage of buildings; Distances and works; Lateral / Subjacent support ‘Against nuisance, @: What are the easements relating to water? 1. Natural drainage of waters; 2. Drainage of buildings: 3. Easement on riparian banks for navigation, floatage, ‘fishing, recreation, salvage, and towpath; Easement of a dam; Drawing water of for watering animals. ‘Aqueduct; and Construction of a stock lock or sluice sale. (Art 697-648) 25ATENEO CENTRAL BAR OPERATIONS 2018, cIvIL LAW Q: Discuss the obligations involved in drainage of buildings. ‘A: The owner of a building shall be obliged to: 1, Construct its roof in such manner that the rain water shall fll on his own land or on a street or public place, and not fn the land of his neighbor; and 2. Collect the water fling on his land so. as not to cause damage to the adjacent iand. (Art. 674) Q: What are the req ra ites for right of way? 4, Claimant is the owner ot enclosed immovable or one with real right to it, 2. No adequate outlet to public highway; 3. Right of way absolutely necessary and ‘not for mere convenience; 4. Isolation not foe to owner's own act 5. Established at point least prejudicial to Sorvient estate, thal is, shortest and least damaging: 6. Payment of property indemnity: value of land if easement is continuous and Permanent, damages if limited to necessary passage. (Art. 649-650) ‘The burden of proving the requisites lies on the ‘owner of the dominant estate. (Costabella Corp v.GA, GR. No, 80511, 1991) @: What determines the width of the ‘easement? ‘A: The Width of the easement shall be that ‘hich is sufficient for the needs of the dominant ‘estate, and may be changed from time to time. (art. 651) X insists that the right of way pertains only to the lot where the fence, which was to be removed to grant them access, is located. A contends that it shauld all the lots which X would use to reach the highway. Does the indemnity required of X cover the entire network of roads within A's subdivision? A: YES, What was intended to serve as X's right of way consisted of the network of roads within the subdivision and not merely the lot where the fence is located. The right of way covers the whole stretch from the property of Xallthe way to its subdivision’s gate leading to the highway. X cannot be allowed access to the other road lots leading to and from the highway as they are ‘not wiling 10 pay indemnity for Rt. Art 649 prescribes that in establishing @ permanent passage the indemnity shall consist ofthe value of the land occupied plus the damages caused to the servient estate. However, Art 651 provides that width of the easement of right of way shall be that which is sufficient for the ‘needs of the dominant estate. X must indemnity ‘Aor the use of the entire network of roads leading to the highway, subject only tothe width of passage needed by X. (Demetria Do Guzman v. Flinvest Development Corporation, GR. No. 191710, January 14, 2015) {Q: What is an easement of light and view? ‘A: Iis the right to make opening in one’s own wal to 1. Admit tight; 2. Make projections; or 3. Afford: a. view upon or towards an adjoining land or tenement. (Art. 669- 670) : What is the period of prescription for the acquisition of an easement of light and view? A: It shall be counted from time: 1. time of the opening of the window, if itis through a party wall or 2. time of the formal prohibition upon the proprietor of the adjoining land or enement, ifthe window is through 9 wall an the dominant estate, (Art. 668) @: What are the restrictions on easements of light and view? A: The restrictions are: 1. Direct view—distance of 2 meters between the wall or the projection and the contiguous property; 2. Side oF Oblique View—distance of 60 Centimeters between the two properties. (Art. 669) Q: What is a party wall? A: A wall used jointly by two parties under easement agreement, erected upon a line ‘separating two parcels of land, each of which is a separate estate. (B.P. 220, Sec. 3) 4: In what instances is an easement of party wall presumed? ‘A: The easement of party wall is presumed in: 1. Dividing watts of adjoining buildings up to the point of common elevation; 2. Dividing walls of gardens or yards situated in cities, towns, or in rural ‘communities; 3. Fences, walls, and live hedges dividing rural lands. (Art. 659) Q: What is an easement against nuisance? ‘A Itis the easement to which every building or piace of land is subjected to, prohibiting the proprietor or possessor from committing huisance through noise, jarring, offensive odor, ‘smoke, heat, dust, water, glare, and other ‘causes, (Art 682) 26ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW Q: How are easements extinguished? ‘A: (M-40-EFR") 1, Merger in the same person of the ‘ownership of the dominant and servient estates; Non-use for 10 years; Either or both of the Estates fall into such condition that the easement cannot be used; 4. Expiration of the term or the Eutfilment of the condition if the easement is temporary or conditional 5. Renunciation of the owner of the ‘dominant estate; and 6. Redemption agreed upon between the ‘owners of the dominant and servient estates. (Art. 631) X. NUISANCE Q: What is a nuisance? ‘AA nuisance is any act, omission, establishment, business, condition of property, fr anything else, which: (ASOH) 1. Injures ‘or endangers the health or Safety of others; 2. Annoys or offends the senses; 3. Shocks, defies, or disregards decency ‘oF morally 4, Obstructs or interferes with the free passage of any public highway, street, (any body of water: or ‘5. Hinders or impairs the use of property. (art 694) Q: Distinguish a nuisance per se from a nuisance per accidens. & Prey ‘accidens ‘Nuisance under any | Nuisance only upon ‘and all ‘cartain conditions circumstances _|_and circumstances Constitutes a direct | Existence is a ‘menace to public | question of fact health or safet May be abated | _Cannotbe abated ‘summarily under the | without due hearing law of necessity ina tribunal authorized to decide whether such a thing does in law constitute 2 (alae v. Santos, GR No. 1-45519, 1939) @: Distinguish a public nuisance from a private nuisance. AA public nuisance affects a community o neighborhood or any considerable number of persons, although the extent of the annoyance, anger, oF damage, upon individuals may be unequal. A private nuisance is that which is not included in he definition of a public nuisance. It violates only private rights and produces ‘damage to but one or a few persons. (Art 695) Q: What are the remedies against a public nuisance? 1. Prosecution under the RPC or a ‘municipal ordinance; 2. Civil action; or 3. Abatement without judicial proceedings. (Art 699) XI, MODES OF ACQUIRING OWNERSHIP @: What are the modes of acquiring ‘ownership? ‘A (OLDTIPS) ‘Occupation; Law, Bonation; Tradition; Intellectual Creation; Prescription; ‘Succession. (Art. 712) ‘Q: What may be acquired by occupation? A: Things appropriable by nature, which are without an owner, such as: 1. Animals that are the object of hunting and fishing: 2. Hidden treasure: 3. Abandoned movables. (Art. 713) Q: What are the requisites of occup: A: The requisites are: (SC-NOIR) 1. Seizure of a thing; Thing must be a Corporeal personal property; ‘Thing must be appropriable by Nature Thing must be abandoned by orwithout an Owner; There must be intention to appropriate; and 6. The Requisites and conditions laid down by law must be complied with, (an. 713) ion? : X and Y are siblings, they inherited a ploce of land from their parents. A new title was issued in favor of Y. ¥ then asked X to vacate the subject. X countered that the new title Issued void because the deed of sale conveying the land to Y was forged. Can Y evict X on the ground that Y has the ttle to the land? ‘A: NO. X and Y stil eemain as co-owners of the property. Insofar as a person who fraudulently obtained a property is concemed, the registration of the property in said person's name would not be sufficient to vest in him or her the title to the property. A certificate of tle merely confirms or records title already existing 27ATENEO CENTRAL BAR OPERATIONS 2018, CIVIL LAW and vested. Being heirs ofthe owners, X and ¥ thus became, and remain co-owners — by succession — of the subject property. As such X may exercise all attributes of ownership over the same, including possession — whether de facto or de jure. (Consolacio D. Romero v. Engracia D. Singson, G.R. No. 200969, Aug. 3, 2015) XI, DONATIONS @: What is a donation? A: An act of liberally whereby a person disposes gratuitously ofa thing or right in favor of another, who accepts it. (Art. 725) : When Is a donation perfected? ‘A: From the moment the donor knows of acceptance by the donee. (Art. 734) The donee ‘must accept the donation personally, or through an authorized person with a special power for {he purpose, or with a gonoral and sufcient power; otherwise, the donation shall be void (Art. 745) Acceptance must be made during the Hietime of the donor and ofthe donee. (Al 746) @ What are the formal requisites of donations of immovable properties? ‘A: The formal requisites are: 1. Tobe valid, donation must be: 2. ina public document; b. specifying the ‘property donated and the value of the charges which the donee must satisty. 2. Accoptance must be done: 2. in the same deed of donation or ina separate public document; during the lifetime of the donor. cH done in a separate instrument, donor shall be notified in’ an authentic form and such step is noted in both instruments. (Art. 749) @: What are the rules on the form of donation of movable properties? a 41. Ifthe value of the property is P5,000 or less: 2. Orally, provided simultaneous delivery, of the thing or of the document representing the right donated, whether actual fF constructive, is made: or b. In wing, without need of simultaneous delivery 2. If the value of the property exceeds 5,000, 8. Both donation and acceptance must be made in wring. Otherwise, itis void. (Art. 748) Q: What are donations mortis causa? A: Donations which are to take effect upon the death of the donor partake the nature of testamentary provisions and shall be governed by the rules on Succession. (Art. 728) @: What are the distinguishing characteristics of donations mortis causa? Aw 4. Convey no tite or ownership to the transferee before the death of the transferor, 2, Transfer should be revocable at wil before the donors death; 3, Transfer should be void if the transferor should survive the transferee; 4. Specification in a deed of the causes whereby the act may be revoked indicates that the donation is inter vivos; 8. Designation of the donation as_mortis causa are not controling ritria and should be construed together with the rest of the 6. Incase of doubt, the conveyance should be deemed donation inter vivos rather ‘mortis causa. (Villanueva v. Spouses Branoco, G.R. No. 172804, 2011) ‘Q: What are donations inter vivos? ‘A: When the donor intends that the donation ‘shall take effect during the lifetime of the donor, though the property shall not be delivered til after the donor's death. The fruits of the property from the time of the acceptance of the ‘donation, shall pertain to the donee, unless the donor provides otherwise. (Art. 729) : What is the effect of illegal or impossible conditions in simple renumeratory donations? ‘A; They shall be considered as not imposed. (an. 727) : What are void donations? aw 1. Those made between persons who were guilt of adultery or concubinage at the ime ‘of the donation: 2. Those made between persons found guilly of the same criminal offense, in consideration thereof, 3. Those made to a public officer or his wife, descendants and ascendant, by reason of his office. (Art. 739) 4. Those made to incapacitated persons, though simulated under the guise of ‘another contract or through a person who is interposed. (Art. 743) 28 eeATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW : Is a prohibition in a deod of donation against the alienation of the property for an ‘entire contury valid? ‘A: No, being an unreasonable denial of an integral attribute of ownership, itis an illegal o impossible condition. Thus, the condition shall be considered as not imposed. (The Roman Catholic Archbishop of Manila v. Court of Appeals, G.R. No. 77425, 1991) @: What are the grounds for revocation of donations? ‘A: The grounds for revocation of donations are cay: 1. noffciousness (Ar. 760); 2. Failure to comply with any Condition Jimposed upon the donee (Art. 764); 3. Acts of ingratitude by the donee (Art. 765): @: When may a donation be revoked by reason of ingratitude? ® 41. Ifthe donee should commit an offense against the person, honor, or property fof the donor, his wile, or children under parental authority; 2. If the donee imputes any criminal offense or act involving moral turpitude to the donor; 3. Ifthe donee unduly refuses the donor support when the donee is legally or ‘morally bound to provide suppor. (Art 765) Xil, PRESCRIPTION @: What is prescription? ‘A: Prescription is a mode by which one acquires ‘ownership and other real rights through lapse of time, in the manner and conditions aid down by law (acquisitive prescription). It is also a means by which one loses ownership, rights and action, reoactive from the moment period began to run (extinctive prescription). (Art. 1108) Q: What are the subjects of prescription? ‘A: All things which are within he commerce of men are susceptible of prescription, unless otherwise provided. Property ofthe State or any of its subdivisions not patrimonial in character shall not be the object of prescription. (Art 1113) Q: What may not be subject to prescription? Public domain, Inteansmissible rights; Movables possessed through a crime; Registered land. : What is the concept of possession in acquisitive prescription? A: Possession has to be in the concept of an ‘owner, public, peaceful and uninterrupted. (Art 1118) : Define good faith of the possessor. A: 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. (Art 1127) hen is there just title? ‘A: For the purposes of prescription, there is just title when the adverse claimant 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 oF could not transmit any Fight. (Art. 1729) What are the rules for ordinary acquisitive prescription? 41. Possession in good faith; 2. By virtue of a just title; 3. Within time fixed by taw: ‘a. 4 years—movables; b. 10 years—immovables; 4. In concept of an owner; 5. Public, peaceful, and uninterrupted, (Aart. 1132, 1134, 1137) @: What are the rules for extraordinary acquisitive prescription? 1. Possession, without need of just tile or ‘900d faith; 2. Within time fixed by law: a. Byears—movables; b._ 30 years—immovables 3. In concept of an owner; 4. Uninterrupted adverse possession. (Ait. 1132, 1194, 1137) @: X declared his ownership and took possession over a parcel of land in 1916. In 4947, Y fled a tax declaration for a 50 sq. m. parcel of land beside the land of X. in 1989, Y ‘caused an amendment of his tax declaration to reflect an increase, which enroached on the land of X. In 1990, upon discovering the ‘amendment, X fled for Recovery of Possession, alleging that Y deprived him of possession. ¥ ‘contends that he has been in possession since 1948 and acquired ownership by virtue of extraordinary prescription. Has Y acquired ownership? 'A'NO, Article 538 ofthe Civil Code provides that i there are wo possessors, the one longer in possession shall be prefered. X is the preferred possessor since he has been in possession of subject really in the concept of owner, pubidy and peacefully. Mere materlal possession of land is not 29ATENEO CENTRAL BAR OPERATIONS 2018, ‘adverse possession as against the omer and is Insucient to vest tle, uriess such possession is ‘accompanied by the intent o possess as an owner. YY only assumed a positon adverse to X's ownership when he deciared the lot for tax purposes in his ‘name in 1989. Oniy { year has elapsed. Ownership ‘of immovable property's acqured by extraordinary prescripion rough possession for 30 years. Possession, to constitute the foundation of ‘2cqusitve prescription, must be possession under 2 dhaim of tile or must be adverse. Acs of a possessory character performed by one who holds the properly by mere tolerance of the owner are dearly notin the concept of an owner and such possessory acts, no matter how long continued, do ‘ot start the running of the period of prescription. (Arsenio Olegario v. Pedro Mari, GR. No. 147951, December 14, 2009) X and Y inherited from their predecessors a land registered under the Torrens system. X asserts that he has heen in possession of the land for more than 30 years and that Y is barred from prescription and laches. Is Y barred by prescription? ‘A: NO, No title to registered land in derogation ofthat ofthe registered owner shall be acquired by prescription or adverse possession. Prescription cannot be allowed against tho hereditary successors of the registered owner because they merely step into the shoes of their decedent and thus continue their personality. and since a certificate of registration covers it, the lot cannot be acquired by prescription regardless of X's good faith. (Heirs of Sps. Joaquin Manguardia v. Heirs of Simplicio Valles, GR. 177616, August 27, 2014) @: Summarize the prescriptive periods. x ‘Action over | 10 years — with good immovables faith and just ttle 30 years - without Mortgage action 10 years ‘Action upon 10 years, written contract} ‘Action upon years obligation created by faw_ “Fetion upon TOyears judgment Ration to recover | 4 years wih good movables faith and just ttle 8 years - without ‘Ration upon an 6 years ‘oral contract ‘Action upon a years {_quasi-contract cIvIL LAW Upon injury to yeas rights Upon a quasi-delct yeas Upon rescission or 4 years ‘annulment of contract Forcible entry: Tyear ‘unlawful detainer Defamation Tyear Others where 8 years periods are not fixed by law OBLIGATIONS AND CONTRACTS | OBLIGATIONS, A. DEFINITION, ELEMEN B, SOURCES OF OBLIGATIONS. ©. NATURE AND OBLIGATIONS EFFECTS OF Q: What are the four (4) instances when demand is not necessary to constitute the debtor in default? A: (ELMU) when there is an Express stipulation to that effect; li. where the Law so provides; fi, wheen the period s the controling Motive for the principal inducement for the Creation ofthe obligation; and 'v._where the demand would be Useless. In the first two, itis not sufficient thatthe law or ‘obligation fixes a date for performance; it must further state expressly that after the period lapses, default will commence. (Art, 1769) Q: Once the obligor incurs in delay, is he able for payment of interest as an indemnity for damages? ‘A:Yes. Ifthe obligation consists in the payment of @ sum of money, and the debtor incurs in delay, the indemnity for damages, there being ‘no stipulation to the contrary, shall be the payment ofthe interest agreed upon, and in the ‘absence of stipulation, the legal interest, which Is six per cent per annum. (Rodrigo Rivera v. ‘Spouses Salvador Chua and Violeta S. Chua, GR No. 184458, 2015) @: Victoria's Milling warehouse was razed by fire. It had a long-term supply contract for 10 years to deliver sugar to X, which provides that the former will deliver to the latter sugar every so often. The fire was 30 ———————_—_—_—_——————————ATENEO CENTRAL BAR OPERATIONS 2018 cIviL LAW ‘considered a fortuitous event. For a period ‘of 1 year during the 10-year period, Victoria's was not able to make deliveries. Can Victoria's be compelled to deliver sugar fon the 11" year considering its failure to ‘comply with Its obligation for 1 year? ‘A:No. Within that period, there was a fortuitous ‘event and therefore Victoria's cannot be ‘compelled to deliver nor will it result to an fextension of the period set for the contract (Victoria's Planters Association v. Victoria's Milling Co., Inc., GR No. L-6648, 1955) : In a contract to sell a house and fot, X agreed that the payment would be in installments. IfY fails to pay half of the price within 3 months, the contract of sale would be cancelled. Y was able to pay the downpayment, however she failed to pay subsequent amortization. Is a delay in the payment of installment a substantial breach of obligation as to warrant rescission? A: (DEL CASTILLO) No. In a contract to sell, payment of the price is @ positive suspensive ‘condition. Failure of which is not a breach of Contract warranting rescission under Article 1191 of the Civil Code, but rather just an event that prevents the supposed seller from being bound to convey tile to the supposed buyer. The contract to sell entered by the partes refers 10 real property on installment basis, in which At. 1191 cannot apply since they are govemed by the Maceda Law. (Spouses Nameal and Lourdes Bonrostro v. Spouses. Juan and Constancia Luna, G.R. No. 172346, July 24, 2013) Q: X ontered into a Contract to Sell with Y, which was subsequently “upgraded” to a Conditional Deed of Sale, which stipulated that Y shall pay the balance of the purchase price when he has successfully secured a Fight of way. X requested an advance of 'P5,000,000.00 on the purchase price, but Y refused since the amount was substantial ‘and not yet due based on thelr agreement. X rescinded the contract alleging that the Conditional Deed of Sale was void because it violates the mutuality of contracts. Does the Conditional Deed of Sale violate the principle of mutuality of contracts? ‘A: No. The Court distinguished between a ‘condition imposed on the perfection of a contract and a condition imposed merely on the performance of an obligation. While failure to comply with the first condition results in the failure of a contract, fallure to comply with the ‘second merely gives the other party the option to either refuse to proceed with the sale or to waive the condition. In the present case, the Conditional Deed of Sale stipulated that Y shall pay the balance of the purchase price when he has successfully secured a road right of way. This stipulation is not a condition on the perfection of the contract nor on the validity of the entire contract or its compliance. It is @ ‘condition imposed only on Y's obligation to pay the remainder of the purchase price. The Condition is not purely potestative as it is also ‘dependent on the will of third persons who own the adjacent land and from whom the right of way shall be negotiated. (Rolando T. Catungal, Jose T. Catungal,Jr., Carolyn T. Catungal and Erlinda “Catungal-Wessel v. Angel S. Rodriguez, G.R. No. 146839, March 23, 2011) D. KINDS OF OBLIGATIONS 1. PURE AND CONDITIONAL Q: What are reciprocal obligations? ‘A: Reciprocal obligations are those that arise from the same cause, and in which each party is @ debtor and a creditor of the other at the ‘same time, such thatthe obligations of one are dependent upon the obligations of the other. They are to be performed simultaneously, so that the performance by one is conditioned ‘pon the simuttaneous futfilment by the other. Furthermore, neither party incurs in delay i the ‘other does not comply or isnot ready to comply in a proper manner with, what is incumbent ‘upon him. From the moment one of the parties fulfls his obligation, delay by the other begins. (Megaworld Properties and Holdings, Inc. vs. Majestic Finance and Investment Co., inc, GR. No. 169694, 2015) Q: X and ABC Realty entered into a contract to sell covering one residential condominium unit. X paid the full purchase price and made a down payment for the parking lot. Notwithstanding this, ABC Realty tailed to complete and deliver the Subject unit on time. X filed a complaint for rescission of contract with damages before the HLURB. Will the complaint prospor? A: Yes. Under Art. 1191, the right of rescission of a party to an obligation is predicated on 2 breach of faith by the other party who violates the reciprocity between them. The breach contemplated is the obiigor’s failure to comply with an existing obligation. ‘The delay in the completion of the project as well as the delay in delivery of the unit are breaches of statutory and contractual ‘blgations which entite respondent to rescind the contract, demand a refund and payment of damages. | (Swire Really Development Corporation v. Jayne Yu, G.R. No. 207133, 2015) : Are the following obligations valid, why, and if they are valid, when is the obligation ‘demandable in each case? 31ATENEO CENTRAL BAR OPERATIONS 2018 cIvIL LAW 1. Ifthe debtor promises to pay as soon as he has the means to pay; 2. If the debtor promises to pay when he kes; 3. If the debtor promises to pay when he becomes a lawyer; 4. Ifthe debtor promises to pay if his son, who is sick with cancer, does not die within one year. A 1. The obligation is valid. it is an obligation subject to an indefinite period because the debtor binds himself to pay when his means Permit him to do so. (Art, 1180) When the Creditor knows that the debtor already has the ‘means to pay, he must fle an action in court to fix the period, and when the definite period as set by the court arrives, the obligation to pay becomes demandable. (Ar. 1197) 2. The obligation “to pay when he likes” is @ ‘Suspensive condition the fulfilment of which is subject to the sole will of the debtor and, therefore, the conditional obligation is void. (Art. 1182) 3, The obligation is valid. It is subject to a ‘uspensive condition, ie. the future and ‘uncertain event of his becoming a lawyer. The performance of this obligation does not depend solely on the wil ofthe debtor but also on other factors outside the debtor's control. (Art. 1181) 4. The obligation is valid. The death of the son (of cancer within one year is made a negative suspensive condition to his making. the payment. The obligation is demandable ifthe ‘son does not die within one year. (Art. 1785) H, OBLIGATIONS WITH A PERIOD Q: A stipulation on a contract states: “I will pay you when my means permit me to do '30.” What kind of obligation is this? A: This is an obligation with a period. (Paras, Civil Code of the Philippines Annotated (Wolume 1V), 190, 2008) .@: What is period? AL That fixed by the court taking into ‘consideration on what the court perceives as the intent of the parties, The authority of the court to fix the period rests on the finding that there was no period but in its determination, there was an intention to fix a period. (Paras, Civil Code of the Philppines Annotated (Wolume 1¥), 190, 2008) Q: City X and ABC Company entered into a Contract of Reclamation in which ABC agreed to undertake, at ils own expense, the reclamation of foreshore and submerged lands. The contract provided that “the project is estimated to be completed in six (6) years”. Does this provision establish an obligation on the part of ABC to finish the project in 6 years from contract execution? Is there delay on ABC's part? [K: No. The contract of reclamation reveals that the Gyear period provided for project completion was a mere estimate and cannot be Considered a period or a “day certain." As such, the lapse of 6 years from the perfection of the contract did not, by itsolf, make the obligation to finish the reclamation project demandable, ‘such as to put the obligor ina state of actionable delay for its inabilty to finish. Thus, ABC cannot be deemed to be in delay Obligations for whose fulfilment a day certain has been fixed, shall be demandable only when that day comes. Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain. ‘A day certain is understood to be that which must necessarily come, although it may ot be known when. Ifthe uncertainty consists in whether the day wil come or not, the obligation is conditional, (Rowena R. Selonte v. Commission on Audit, Chairperson Ma. Gracia Pulido-Tan, Commissioner Juanito . Espino, Jt, Commissioner Heidi |. Mendoza, and Fortunato M. Rubico, Diroctor IV, COA Commission Secretariat, in their official capacities, G.R. No. 207348, 2014) Ill, ALTERNATIVE OBLIGATIONS. IV. JOINT AND SOLIDARY OBLIGATIONS: @: A, B,C, D, and E made themselves solidarily indebted to X for the amount of 50,000.00. When X demanded payment from A, the latter refused to pay on the {following grounds: 1. Bis only 16 years old. 2. Chas already been condoned by X. 3. Disinsolvent. 4. E was given by X an extension of 6 ‘months without the consent of the other four co-debtors. A 1. A may avail the minority of B as a defense, but only for B's share of P10,000.00. A solidary debtor may avail himself of any defense which personally belongs to a soliiary co-debtor, but only as to the share of that co-debtor. (Aut 1222) 2A may avail of the condonation by X of C's share of 10,000.00. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him oF pertain to is own share. With respect to those which personally belong to others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible. (Id) 32ATENEO CENTRAL BAR OPERATIONS 2018, CIVIL LAW 3. A may not interpose the defense of insolvency of D. Applying the principle of mutual guaranty among solidary debtors, A {usranteed the payment of D's share and ofall the other co-debtors. Hence, A cannot avail of the defense of D's insolvency. (ld) 44. The extension of six (6) months given by X to E may be availed of by A as a partial defense but only forthe share of E. There is no novation of the obligation but only an act of liberality granted to E alone. (1d) @: X entered Into a contract with Corporation A to purchase rice. The total ‘transaction amounted to Php 3.8M which was covered by 9 postdated checks issued by Xin her personalichecking account with Corporation 8. However, the checks were all dishonored due to insufficient funds or drawn against closed account. Corporation A filed a complaint for sum of money against X and Y in order to hold them solidarily lable on the rice supply contract Corporation A claimed that Y verbally guaranteed X's issuance of checks. Can Y be held solidarily liable with X? ‘A:No. There is a solidary ibility only when the ‘obligation expressly so states, when the law so provides orwhen the nature ofthe obligation so Fequies. In this case, the allegations that ¥ ‘guaranteed X's checks and that she consented to be held solidarily lable with X under the latter's rice supply contract with Corporation A ‘are hardly credible since this was notin writing, but just a verbal assurance. Furthermore, as a ‘general rule, a contract affects only the parties to it, and cannot be enforced by or against a person who is not a party thereto. Thus, ‘Corporation A may sue X, but not Y, who is not ‘a party tothe rice supply contract. (Maniar Rice Mil, Inc. vs. Lourdes L. Deyto, doing business under the trade name “J.D. Grains Center" and Jennelita Deyto Ang, a.k.a. “Janet Ang’, GR. No. 191189, January 29, 2014) Vv. _DIVISIBLE AND OBLIGATIONS INDIVISIBLE VL OBLIGATIONS WITH A PENAL CLAUSE E. EXTINGUISHMENT OF OBLIGATIONS |. PAYMENT OR PERFORMANCE. Q: When is there substantial compliance and what are the effects of such? A: Under Arts. 1234 and 1235, there is substantial compliance when there is an attempt in good faith to perform the obligation without wilful or intentional departure, where deviation is slight, or where the omissiondefect is technical of unimportant or must not be so ‘material that intention of parties isnot attained, The effects of such substantial compliance in {good faith are that the obligor may recover as though there has been strict and complete fulfilment, less damages suffered by the oblige (Art. 1234) Also, the right to rescind cannot be Used for slight Breach. If the obligee, however, accepts performance knowing Its incompleteness and irregularity, without expressing any protest or objection, the obligation will be deemed fully complied with (art. 1235) Q: Can payment be made to a person other ‘than the one to whom such obligation is rightfully owned? A: Yes. Art. 1242 of the Civil Code is an exception to the general rule that a valid payment of an obligation be only made to the person to whom such obligation is rightfully owned. It contemplates a situation where a debtor pays a "possessor of credit" (ie. someone who is not the real creditor but ‘appears under the circumstances to be the real ‘ereitor. In such scenario, the law considers the payment to the “possessor of credit” as valid ‘even as against the real creditor taking into ‘account the good faith of the debtor. (National Power Corporation v. Lucman M. Ibrahim, et al, G.R. No, 175863, 2015) Q: X owned a building leased by Bank A. Bank A was confused to whom to remit the payment since another person was claiming ‘ownership over the property so Bank A deposited the rentals in a separate non- drawing savings account for the benefit of X. Was there proper consignation?. ‘A. No. Under Art. 1256 of the Civil Code, one of the requisites for a valid consignation is that “the amount or thing due was placed at the disposal of the court In the present case, Y's deposit of the subject monthly rentals in a non- ‘drawing savings account snot the consignation ‘contemplated by taw, precisely because it does ‘not place the same at the disposal of the court Consequently, Y's obligation to pay rent remained subsisting, as the deposit of the rentals cannot be cMfsidered to have the effect 33ATENEO CENTRAL BAR OPERATIONS 2018, cIvIL LAW ‘of payment. (Philiopine National Bank v.Lilibeth 'S. Chan, G.R. No. 206037, March 13, 2017) I. LOSS OF THE THING DUE Q:X Corp and ¥ Corp entered into.a contract fof lease in 2000. X decided to pre-terminate the lease due to the 1997 Asian currency crisis, relying on Art. 1287 of the Civil Code as justification (Le., the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or In part). Is such contention correct?” A: No. The payment of lease rentals does not involve @ prestation “to do” which has been fendered legally or physically impossible without the faut ofthe obligor-lessor. Art. 1267 speaks of a prestation involving service which has been rendered so diffcult by unforeseen subsequent events as to be manifestly beyond the contemplation ofthe parties. In this case, the Asian currency crisis happened in 1997 and sometime thereafter but X cannot be permitted to blame its diffculies on such ctisis because it entered into the subject lease ‘only more than 3 years after it began. By then, X already had known what business risks it ‘assumed when it entered into the contract of lease. (Comglasco Corporation/Aguila Glass v. ‘Santos Car Check Canter Comoration, G.R. ‘No. 202989, 2015) : How does Art. 1267 of the Civil Code (Le., where an obligor is released in whole or in part of his obligation when the service has become so difficult as to be manifestly beyond the contemplation of the parties) apply? (FIFA) 1. The event or change in circumstances could not have been Foreseen at the time of the execution of the contract 2. It makes the performance of the contract extremely diffcult but not Impossible 3. The contract is for a Future prestation. 4. thmust not be due to the Act of any of the parties ‘The difficulty of performance contemplated should be such that one party would be placed al a disadvantage by the unforeseen event Mere inconvenience, or unexpected impediments, or increased expenses did not ‘suffice to relieve the debtor from a bad bargain, (Tagaytay Realty Co,, Inc. v. Arturo G. Gacutan GRR. No. 160033, 2045) M_CONDONATION OR REMISSION OF DEBT IV. CONFUSION OR MERGER OF RIGHTS OF CREDITOR AND DEBTOR V. COMPENSATION VL.NOVATION Q: ABC Corp. had an alternative obligation with X to pay the value of raw materials orto deliver to X the finished products of ‘equivalent value. ABC exercised the option to pay the price. Subsequontly, ABC and Y centered into an agreement where X will bs the supplier of the raw materials and the delivery of the finished products will be made to Y. X demanded payment for the raw materials but no payment was made. The ‘rial court ruled that the execution of the agreement constituted a novation of the contract. Did the court rule correctly? ‘A No. Novation extinguishes an obligation between two parties when there is 3 substitution of objects or debtors or when there | subrogation of the creditor. it occurs only when the new contract declares so. "in ‘unequivocal terms" or that “he old and the new ‘obligations be on every point ineompatible with each other.” In this case, X was not privy to the memorandum of agreement, thus, his conformity to the contract need not be secured. If the agreement was intended to ‘novale the original agreement X must have frst agreed to the substitution of Y as his new dobior. The agreement must also state in clear ‘and unequivocal terms that it has replaced the ‘original abigation of ABC company to X. Since there was no novation, ABC's obligation to X remains valid and existing. ABC must pay X the full amount of the materials. (Arco Pulp and Paper Co, Ine. and Candida A. Santos v. Dan T. Lim, doing business under the name and siyle of Quality Papers & Plastic Products Enterprises, G.R. No. 206806, 2014) Q: What are the ‘®(PENC) 1. That there isa Previous valid obligation 2. Intent to Extinguish or to modify the old ‘obligation by a substantial diference 3. Capacity and Gonsent of al the partios (except in ex promision where the old debtor does not participate) 4. Validity of the New obligation (Paras, iil Code of the Philippines Annotated (Volume 1¥), 481, 2008) \isites of novation?ATENEO CENTRAL, BAR OPERATIONS 2018 CIVIL LAW (@: How can an ob (ROP) 1. Subrogating a third person in the Rights of the creditor. 2. Changing their Object or principal conditions 3. Substituting the Person of the debtor. (Art. 1291) tion be novated? Q: Can novation be done without consent of the debtor or creditor in case of substituting a new debtor in the place of the original ‘one? A Itcan only be done without the knowledge or ‘even against the will ofthe original debtor, but ‘not without the consent of the creditor. (interport Resources Corporation v. Securities ‘Specialist, Inc. and R.C. Lee Securities, Inc., GR. No. 154069, 2016) : Corporation A, a client of a bank, was able to withdraw a larger sum than its deposit in the bank. Corporation A and the bank entered into a Debt. Settlement Agreement, whereby Corporation A acknowledged Its Indebtedness to the bank ‘and undertook to pay the same. Still, a criminal complaint for estafa was filod against the officers of Corporation A, alleging that although the execution of the Debt Settlement Agreement amounts to a novation of contract, this did not absolve the officers’ criminal lability. Are the officers stil liable for estafa? A: (DEL CASTILLO) Yes. Novation is not a mode of extinguishing criminal liability for ‘stata. Reimbursement or compromise affects ‘only civil ability, and not the criminal lability. Here, the Debt Settlement Agreement extinguishes merely the civil Kablity of Corporation A as a corporate entity, but not the criminal lability of the persons who actually Ccommitied the crime of estafa against the bank. (Metropolitan Bank and Trust Company v. Rogelio Reynaldo and Jose C. Adrandea, G.R. ‘No. 164538, August 9, 2010) Il CONTRACTS A ESSENTIAL REQUISITES : What are the exceptions to the principle of relativity in contracts? a 1. Stipulation pour atrui (Art. 1311(2)) Contracts. creating real rights. (Ar. 1312) 3. Accion pauiana (Ar. 1313) 4 Tortous interference (Art 1314) (OE LEON, Sih od p. 475) @: What are the requisites of a pour autrut stipulation? 1 @PRUDA) 1. Stipulation in favor ofa 3% person: 2. Stipulation must be a Part, not the whole, ofthe contract 3. Contracting parties donot Represent the third person 4. The favor is Unconditional and uncompensated: 5. The parties Delleratoly and clearly confered @ favor upon thi person; 8. The third person communicated his ‘Acceptance before the contract or Stipulation is wrote: (Limitless Potontals, inc. v. The Hon. Reinato 6. Quiola, in his capacity 48 Presiding Judge of the Regional Taal Cour, Branch 67, City of Makati and The Roman Catholic ‘Archbishop of Mania, GR. No. 187381, 2005) @: In a contract, when the offeror has not fixed a poriod for the offeree to accept the offer, and the offer Is made to a person present, when should the acceptance be made? ‘A; Offer inter praesentes—When the offeror has not fixed a period for the offeree to accept the offer, and the offer is made to a person present, the acceptance must be made immediately. (Salvador P. Malbarosa v. Hon. Court of Appeals and S.EA. Development Corp., G.R. No. 125761, 2003) {Q: What is a compromise agreement? A It is a contract whereby the parties, by ‘making reciprocal concessions, avoid a IWigation or put an end to one already ‘commenced. a party fails or refuses to abide by 2 compromise agreement, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand. (Asset Poo! A (SPV-AMC), Inc. v. Clark Development Corporation, GR. No. 205915, 2015) : What are the elements of a compromise agreement? A: (COC) The same as ordinary contracts: Consent, Object and Cause. Parties to a ‘Compromise are motivated by the hope of gaining, balanced by the dangers of losing. (Asset Pool A (SPV-AMC), Inc. v. Clark Development Corporation, G.R. No. 205918, 2018) 36ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW ete Cer) Instances when demand | ELMU 1. When there is an Express stipulation to that effect; le not necessary to 2. Where the Law so provides: constitute the debtor in 3, When the period is the controling Motive or the principal default inducement for the creation of the obligation; and 4, Where the demand would be Useless. (Art. 1169) ‘Application of Art. 1267 FIFA 1. The event or change in circumstances could not have (Le., where an obligor is ‘been Foreseen at the time ofthe execution ofthe contract released in whole oF in 2. It makes the performance of the contract extremely part of his obligation difficult but not Impossible when the service has 3. The contract is for a Future prestation. become so difficult as to 4. it must not be due to the Act of any of the parties, be manifestly beyond (Tagaytay Realty Co,, Inc. v. Arturo G. Gacutan G.R. No. the contemplation of the 160033, 2015) parties) Requisites of novation PENG 1, That there is a Previous valid obligation 2. Intent to Extinguish or to modify the old obligation by @ substantial difference 3. Capacity and Consent of all the parties (except in ex promision where the old debtor dass nat participate} 4. Validity of the New obligation. (Paras, Civil Code of the Philippines Annotated (Volume IV), 491, 2008) Ways to ovate an ROP 4. subrogating a third person in the Rights of the creditor. obligation 2. changing thelr Objector principal conditions 3. substituting the Person of the debtor. (Art. 1294) 3PRUDA | 1. Stipulation in favor of a 3° person; autrui stipulation 2. Stipulation must be a Part, not the whole, ofthe contract; 3. Contracting parties do not Represent the third person. 4, The favor is Unconditional and uncompensated; 5. The parties Deliberately and clearly conferred @ favor upon a third person; 6. The third person communicated his Acceptance before the contract or stipulation is wrote: (Limitless Potentials, Inc. v. The Hon. Reinato G. Quilala, in his ‘capacty as Presiding Judge of the Regional Trial Court, Branch 67, City of Makati and The Roman Catholic Archbishop of Mania, GR No. 157391, 2005) Elements of coc 4. Gonsent compromise agreement 2. Object 3. Gause Note: Same as ordinary contracts. (Asset Poo! A (SPV-AMC), Inc. v. Clark Development Corporation, G.R. No. 205915, 2015)ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW SALES | NATURE AND FORM OF CONTRACTS: {Q: What is a contract of sale? A: Itis a contract where one of the contracting partes (Seller) obligates himself to transfer the ‘ownership and to deliver a determinate thing, ‘and the other party (Buyer) to pay a price Certain in money or its equivalent. A contract of ‘sale may be absolute or conditional. (Art. 1458) Q: What are the elements of a contract of sale? ‘A: The elements of a contract of sale are: (CSP) 1. Consent 2. Determinate or Determinable Subject Matter 3. Price certain in money or its equivalent (Coronel v. Court of Appeals, G.R. No. 103877, 1996) ‘The absence of any essential elements negates the existence of a perfected contract of sale (Dizon v. Court of Appeals, G.R. No, 122544, 1999) Q: Does the seller have to be the owner of the thing during the PERFECTION of the contract of sale? What is the effect of such sale? A: NO. The seller need not be the owner of the subject matter at the time of perfection of the Contract. Its sufficient that he has the right to transfer ownership atthe time of delivery of the subject matter. (Art. 1459) Hf the seller acquired the subject matter and became the owner at the time of delivery, the seller's tile over the subject matter passes to the buyer by operation of law. (Art. 1434) It the seller is NOT the owner ofthe thing at the time of delivery, the buyer acquires no better tite to the goods than the seller had, unless the ‘owner of the goods is by his conduct precluded {rom denying the seller's authority o sell. (Art. 1508) In cases where the seller cannot transfer ‘ownership over the thing sold at the time of delivery, he may be held liable for breach of contract ‘An exception to the rule where the seller need rot be the owner of the subject matter at the time of perfection of the contract of sale would be foreclosure sales. (Art. 2085) Q: What are the requisites for a vi id price? ‘A: The price or consideration of a contract of sale must have the following requisites at the time of the perfection of the sale: (RMC) 1. Itmust be Real (Art. 1471): 2. It must be in Money or its equivatent, valueable consideration (Arts. 1458 and 1468); 3. itmust be Certain or ascertainable (Art 1458) Q: Distinguish a contract of sale from a Contract to sel Cora Ca Coos “Tite passes to | Ownership is reserved in the buyer upon | the seller and shall not delivery of the | pass to the purchaser until thing sold (Art| fulfilment of certain 1477) conditions, such as full payment of the purchase rice (Art. 1478) “The seller has | Tite remains in he seller lost and cannot | the buyer does not comply recover with" the condition ownership of | precedent, which payment the thing sold | of the price at the time ‘and delivered | specified in the contract. (Ads. 1477, | (Tuazon v. Garllao, GR. 1496) until and | No. 143673, 2001) unless the contract of sale | Note: It must be stipulated itself is | that ownership in the thing resolved and | shall not pass to the buyer sot aside. ‘until full payment of the rice. (Art. 1476) 'Non-payment | Full payment of the price ofthe price is a] a positive _ suspensive negative condition, the failure of resolutory | which is ‘not a breach of condition (Art| contract but simply an 1179) ‘event that prevents the ‘obligation of the seller to ‘convey title to the buyer (Uy & Sons, Inc. v. Valbueco Inc, G.R. No. 179594, 2013) The non- payment of the purchase: price renders the contract fo sell without force and cffect. ‘Specific ‘Speciic performance Performance _} cannot be availed of when ‘or rescission | the contract to sell has under Articles | been cancelled due to the 1191, 1592, | non-payment of the ‘and 1593. purchase price. The buyer cannot demand the seller to convey title when suchATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW ‘andthe Soller cannot ‘demand the buyer to pay the price, since failure to pay resulted in the ‘cancellation of the contract to sell. (Pilipino Telephone ‘Corporation v. Radiomarine Network Phils, c., 2011) Remedy of rescission is rot available because the breach contemplated in rescission of contracts is the obligor’s failure to comply with an obligation already extant, nota failure ‘of a condition to render binding that obigation. A non-existent obligation cannot be subject of, rescission (Diego. Diogo, G.R. No. 179965, 2013) (De Leon, Comments and Cases on Sales and Lease, 21-23, 2014) — ‘Q: What are the stages in the life of a sale? ‘A The sages inate of asae are: (NPC) Polictacion/Negotiation Stage ~ Starts from the time the prospective Contracting parties indicate interest in the contract fo the time the contract is perfected; 2. Perfection - Takes place upon the Concurrence of the essential elements of the sale, which are meting of the ‘minds as to the object of the contract, ‘and upon the price; 3. Consummation - Begins when the parties perform their respective Undertaking under the contract of sale, culminating in the extinguishment of the contract of sale. (San Miguel Properties Philippines v. Huang. GR. ‘No. 137290, 2000) @: When is ownership of the thing sold transferred to the buyer? ‘A: Ownership ofthe thing sold is transferred to the buyer upon actual or constructive delivery of the thing. (Art. 1477) The thing sold is understood as delivered when itis placed in the ‘control and possession of the buyer. (Art. 1497) : What is an option contract? ‘A: An option is a preparatory contract in which ‘one party grants to the other, for a fixed period ‘and under specified conditions, the power to decide, whether or not to enter into a principal contract Itbinds the party who has given the option, not toenter into the principal contract with any other person during the period designated, and within that period, to enter into such contract with the fone fo whom the option was granted, ifthe lattor should decide to use the option. itis a separate agreement distinct from the contract of sale Which the parties may enter into upon the consummation ofthe option. (Carceller v. Court of Appeals, G.R. No. 124791, 1999) @: What are the elements of an option contract? ‘A: The elements of an option contract are: (A suo) ‘Acceptance of the offer to buy or sel 2B determinate Subject alte br pce contain; 3. Consideration, which i separate and Gistinct from the purchase price. (At 1479, par. 2) Q: State the rules on option contracts. ‘A: The rules on option contracts are: 1. If the period is NOT supported by a ‘separate consideration: ‘a. The option contract is void. However, it stil constitutes an offer of a contract ‘of sale which can be withdrawn by the offeror before he leams of the acceptance by the offeree. Ifthe offer is accepted before withdrawal, it would give rise to a valid sale. (Sanchez v. Rigos, G.R. No. L-25494, 1972) b. The ight to withdraw must not be done whimsicaly or arbitrary, otherwise the other party may sue for damages under Article 19. 2. Ifthe period has a separate consideration: a. The option contract is deemed perfected, if the option is exercised within the period, it would give rise to sale which can be enforced by specific performance. b. If the offer is withdrawn within the option period, the withdrawal constitutes @ breach of the option contract & However, if the offer fs withdrawn before acceptance, i. The offeree may not sue for specific performance on the sale, since the sale itself wass not perfected, ii. The offeror may be held liable for ‘damages for breach of the option ‘contract (Ang Yu Asuncion v. Court of Appeals, G.R. No. 109726, 1994)ATENEO CENTRAL BAR OPERATIONS 2018 cIviL LAW @: X, lessor, sent a letter to Y, lessee, offering to sell the land for Php37 million within two years. However, Y negotiated for a lower price. After the expiration of the lease contract, X sold the land to Z for a price lesser than what was offered to Y. Y claims that X violated his right of first refusal since he was not given notice and ‘opportunity to buy the property under the terms and conditions given to Z. Is the letter a right of refusal? ‘A: NO. The letter is an option contract. In an ‘option contract, the option is granted to the offeree for a fixed period and a determined price and lacking in these essential requisites, “what is involved is only a right of first refusal. In this case, there is a clear presence of the two requisites. Hence, the letter clearly embodies ‘an option contract. (Roberto D. Tuazon v. Lourdes Q. Del Rosario-Suarez, G.R. No. 168325, 2010) Q: Based on the same facts, ¥ claims that he has the right to demand that the property be sold at the price for which it was sold to Z. Is Y's contention correct? A NO. Since the contract is an option contract, ‘an option without a consideration, the offeror ‘may withdraw his offer by withdrawing his offer by communicating such withdrawal to the offeree at any time before acceptance, but if it is founded on a consideration, the offeror cannot withdraw the offer before the lapse of the period agreed upon. Y did not accept the terms stated inthe leter since ¥ negotiated for a lower price. The act of negotiating constitutes asa counter-offer, thus, there was no perfected contract. Hence, ¥ has no right io demand that the property be sold atthe price for which it was sold to Z. (Roberto D. Tuazon v. Lourdes Q. Del Rosario-Suarez, G.R. No. 168325, 2010) : What is a right of frst refusal? ‘A Itis a promise on the part of the owner that if he decides to sell the property in the future, he ‘would first negotiate its sale to the promisee. (Vitlanveva, Law on Sales, 137, 2016) It is an innovative juridical creation, which cannot be deemed a perfected sale nor an ‘option contract because it merely pertains to a specific property without containing an ‘agreement as 10 the price or the terms or manner of payment of payment in case of exercise of the right of frst refusal. (Ang Yu Asuncion v. Court of Appeals, G.R. No. 109126, 1994) Q: What is the remedy of the promissee in case of broach of his right of first refusal? ‘A: As a generat rule, the proper remedy is an action for damages under Art. 19 of the Civil Code. (Ang Yu Asuncion v. Court of Appeals, GR.No. 109125, 1994) The Courts would not allow an action for specific performance or a rescission of the sale 10 a third party which constitute the breach of the promise, even when the third party buyer ‘was entering into the purchase of the subject property in bad faith. (Guerrero v. Ynigo, G.R. No. L-8572, 1954) However, ifthe right of first refusal is attached to a valid principal contract, ike a contract of lease, the breach of the right by the promissor allows the promissee to enforce his right by way Of rescission of the sale entered into with the third party who was aware of the existence of the right of first refusal (bad faith). (Equatorfal Really Dev. Inc., G.R. No. 106063, 1996) The right cannot be enforced against a purchaser for value and in good faith. (Rosencor Dev. Comp. v. Inquing, G.R. No. 140479, 2001) Q: Is a right of first refusal subject to the Statute of Frauds? A: NO. Art. 1403 (2) (0) of the Civil Code presupposes the existence of a perfected, albett unwritten, contract of sale; the rightof frst refusal is not by any means a perfected contract f sale of real property. Al best, itis a contractual ‘grant, not ofthe sale of real property involved, but ofthe right of frst refusal ofthe property to be sold. It need not be in writing and may be proven by oral evidence. (Rosencor Devt v. Inquing, G.R. No. 140479, 2001) istinguish Earnest Money and Option Mone) Et Corn Part of the purchase | Distinct consideration price and proof of | for an option contract the perfection of the ‘contract (Art 1482) Given only where | Applies to a sale not there is already a | yet perfected sale “The buyer i bound | The buyer is not topay the balance | required to buy, but may even forfeit it depending on the terms of the option. (Oesmer v. Paraiso Dev. Comp, GR. No. 111238, 1995) {Q: Can the prior payment of eamest money before the owner can agree to sell his property bind the owner to the obligations of aselier? A: NO. In a potential sale transaction, prior Paymet of eamest money even before the ‘owner can agree to sell his property is irregular, ‘and cannot be used to bind the owner to the obigations of a seller. The property ‘owner/prospective seller may not be legally ‘obliged to enter into a sale with a prospective buyer through the latler’s employment ofATENEO CENTRAL BAR OPERATIONS 2018, CIVIL LAW questionable practices which provent the owner from freely giving hs consent tothe transaction; this constitutes a palpable transgression of the prospective seller's rights of ownership over his property. (First Optima Really Cop. v. ‘Securiiron Security Services, GR. No. 1999648, 2015) IL CAPACITY TO BUY OR SELL Q: Who may enter into a contract of sale? A: All natural or juridical persons who have capacity to act, or the power to do acts with legal effects, or obligate themselves, may enter into a contract of sale, (Art. 1489) The following persons are incapacitated to enter into a contract of sale because of their Incapacity 10 give consent: (MID-DRUNK- SPELL) (a) Minors (ar. 1227) (0) Insane and Demented Persons (Art. 1927) However, when the contract is entered into during a lucid interval the contract is vai. (Art, 1328) (c) Deat-Mutes (Art. 1327) (@) Persons who entered into a contract in a state of DRUNKenness and hypnotic SPELL (At. 1328) Contracts entered into by these persons are voidable (Art. 1378, 1390) subject to annulment cof ratification. (Art. 1393) Nonetheless, where necessaties are sold and dolvered to minors or other persons without capacity to act, he must stil pay a reasonable price therefore, (Art. 1489) thus, the resulting Contract is valid and not merely voidable, ‘Summarize the rules on sales of conjugal properties. ‘A: Sales of conjugal properties by one spouse to third persons, without the written consent of the other spouse is void. (Family Code, Art 124) The sale is not morely voidable, since the resulting contract of sale lacks one of the ‘essential elements of full consent. The sale will be classified as voidable if there was only Villtion of the consent of one spouse. (Guiang . Court of Appeals, G.R. No. 125172, 1998) ‘The sale of property between spouses s void ‘except in the folowing instances: (separation of propery) {1 When a separtion of property was agreed upon in the marrage settlements; or 2. When there hasbeen a judicial decree for the separtion of property. (Ar. 1490) This prohibition relating to spouses is applicable even to sales in legal redemption, compromises, and renunciation. (Art. 1492) Note: The prohibition applies to sale of property between common law spouses. (Calimlim- Canulas v. Fortun, G.R. No, L-57499, 1984) Ul, EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST IV. OBLIGATIONS OF THE VENDOR Q: What are the obligations of the seller? A: The vendor is bound to transfer the ‘ownership of and deliver, as well as warrant the thing which is the object ofthe sale. (Art. 1495) Q: What does the seller have to deliver? A: The seller has to deliver the following: (Thi- FA) 1. The thing sold (Art. 1495) Fruits, they belong to the buyer from the day the contract of sale is perfected (ad. 1537) 3. Ascessions and accessories, in the Condition in which they were upon the perfection of the sale (Art. 1597) : When is there Real or Actual Delivery? ‘A: When it is placed in the contro! and possession of the vendoe. (Art. 1497) What are the special remedies of unpaid Soller of goods? ‘A: When a seller is unpaid as defined in Article 1825 of the Civil Code, whether or not ‘ownership over the goods has been transferred to the buyer, the unpaid seller is entitled to the following rights or remedies: i. Possessory lien ~ The unpaid seller has. a right to retain the goods for the price while he is in possession of them (Art 1526 (a)) i Stoppage in transity -In case of insolvency of the buyer, the unpaid seller has the right to stop the goods in transitu after he has parted with the possession of them (Art, 1526 (b)); li, Special right of resale (Art. 1526 (6): Iv. Special right to rescind (Art. 1526 (d)) The four remedies have a hierarchical application, as in fact, the special rights to resell ‘and to rescind can be availed of by the unpaid ‘sller only when either of the two prior rights of possessory lien or stoppage in transitu have been exercised by the unpaid seller. (Vilenveva, Law on Sales, 335, 2016) ‘Q: What are the requisites for the rules on double sales under Art. 1544 to apply? ‘A: The requisites for double sales are: (28uV- 28C-8) 4. The two (or more) sales transactions in the Issue must pertain to exactly the sameATENEO CENTRAL BAR OPERATIONS 2018, CIVIL LAW Subject matter, and must be Valid sales transactions. 2. The two (or more) Buyers at odds over the rightful ownership of the subject matter ‘must each represent Conflicting interests; and 3. The two (or more) buyers at odds over the rightful ownership of the subject matter ‘must each have bought from the very same Seller. (Cheng v. Genato, G.R. No. 129760, 1998) Who shall own the thing sold under a double sale situation? ‘A: ifthe thing sa movable property, the owner is the first to possess the thing in good faith. (art, 1544) Where itis an immovable property that is the subject of a double sale, ownership shall be transfered 1. Tothe person acquiring it who in good faith first recorded itin the Registry of Property; 2. In default thereof, to the person who in {900d faith was first in possession; and 3. In default thereof, to the person who presents the oldest tite, provided there is {good faith. (Art. 1544; Gabriel v. Spouses Mabanta, G.R_ No. 142403, 2003) ‘The requirement of law is two-fold: acquisition in good faith and registration in good faith, (Gabriel _v. Spouses Mabanta, GR. No. 142403, 2003) @: Corporation A bought a parcel of land from X, under a contract of conditional sal Eventually, they executed a Deed of Absolute Sale over the property. However, X could not deliver the TCT because X sold the same property to Y. Do the rules on double sale apply? ‘A: No. The rules on double sale do not apply ‘when tehre is only one valid sale. There is only one sale since Y is a foreigner and the constitution prohibits ownership of land by an alien. (Taina Manigque-Stone v. Cattley Land, Inc., and Spouses Troadio B. Tecson and ‘Asuncion Ortaliz-Tecson, G.R. 195975, 2078) : What are warranties? A: These are express or implied statements or representation made by the seller of goods, as part of the contract of sale, having reference to the character, quality, or tile, of the goods, where he promises or undertakes to insure that Certain facts shail be as he represents. (Ars. 1846-1547) \V. OBLIGATIONS OF THE VENDEE 4: In the sale of immovable property, how should the seller exercise his right to rescind the sale upon the buyer's failure to pay the price at the time agreed upon? ‘A: The seller should demand for rescission of the contract either judicially or by notarial act. {As long as there is no demand for rescission, the vendee may pay even after the expiration of the period agreed upon. After the demand for rescission, the court may not grant the buyer a fnew term. (Art, 1592) ‘A demand for rescission by judicial or notarial ‘act (notarized demand letter or notice) is necessary before a valid rescission can take place, whether or not automatic rescission has been ‘stipulated. (lringan v. Court of Appeals, GR. No. 129107, 2001) Note: The requirement of demand by judicial or folarial act under Article 1592, in case the vendor of an immovable property wants to rescind, does not apply to contracts to sell or promise to sell, where tile remains with the vendor until full payment of the price (Valara0 \. Court of Appeals, G.R. No. 130347, 1999) In a contract to sel, the non-flfitment by the respondent of his obligation to pay, which is a suspensive condition to the obligation of the vendor to sell and dolivery the tile to the property, renders the contract to sell ineffective ‘and without force and effect. The parties to the ‘contract stand as if the conditional obligation had never existed. Article 1191 and 1592 will not apply because these presupposes an obligation already extant. There can be no rescission of an obligation that is stil non- existing, the suspensive condition (payment of the price) not having happened. (Rayos v. Court of Appeats, G.R. No. 135528, 2004) Nonetheless, in contracts to sell, the act of @ party in treating a contract as ‘cancelled or resolved on account of infractions by the other contracting party must be made known to the other and is always provisional, being ever subject to scrutiny and review by the proper court. (University of the Philippines v. Delos ‘Angeles, G.R. No. L-28602, 1970) : X sold a parcel of land to Y on 01 January 2002, payment and delivery to be made on 01 February 20029it was stipulated that if payment were not to be made by Y on 01 February 2002, the sale between the parties would automatically be rescinded. ¥ failed to pay on 01 February 2002, but offered to pay three days later, which payment X refused to accept, claiming that their contract of sale had already beon rescinded. Is X’s contention correct? Why?ATENEO CENTRAL BAR OPERATIONS 2018 CIVIL LAW A/NO, Xisnot correct. In the sale of immovable property, even though it may have been ‘stipulated, as in this case, thal upon failure te ay the price at the time agreed upon the Fescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand {or rescission of the contract has been made ‘upon him either judicially or by @ notarial act (Art. 1592) Since no demand for rescission was ‘made on Y, either judicially or by a notarial act, X cannot refuse to accept the payment offered by Y 3 days after the expiration of the period. : X entered into an oral contract to sell with Y covering X's share in the family's building. However, Y falled to pay the remaining balance. X filed a complaint. Is the remedy of rescission available in contracts to sell? A: NO. The remedy of rescission is not available in contracts to sell. Ina contract to sell, the vendor remains the owner for 2s 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 t. When Y failed to fully pay the purchase price, the contract to sell was deemed terminated or cancelled. (Nicolas P. Diego v. Rodolfo P. Diego, G.R. No. 179965, 2013) VI. BREACH OF CONTRACT A. RECTO LAW : What is the coverage of the Recto Law? ‘A: Recto Law covers: 4. Contracts of sale of personal property by installments. (Art. 1484): 2. Contracts purporting to be leases of personal property with option to buy, ‘when the lessor has deprived the lessee (of the possession or enjoyment of the thing. (Art. 1485) Note: In case of financing transactions derived for arising from sale of movables on installments, the financing company is bound by the Recto Law, ifthe selleris the agent of the financing company or when the seller assigned his credit to the financing company. (Zayas v. Luneta Motor Company, G.R. No. 1-30583, 1982) However, the Recto Law will not apply 0 the financing company, ift merely financed the purchase of the subject property under a contract of loan and the buyer bought the property from a third party. In other words, the Recto Law will not apply when there is 0 vendor-vendee relationship between the parties, as in a contract of loan with chattel ‘mortgage where the relationship of the parties is that of a debtor (mortgagor)-creditor (mortgagee). (Equitable Savings Bank v. Palces, G.R. No. 214752, 2016) Note: Contracts lo sell are not covered by the Recto Law. (Visayan Sawmill Co. v. Court of ‘Appeals, G-R. No. 83851, 1993) {Q: What are the remedies of a seller under the Recto Law? A: Incase of default, the following remedies are available to the seller: 1. Exact fulfillment of the obligation, should the buyer fal to pay; 2. Caneel the sae, ifthe buyer fails to pay 2 or more instalments; 3. Foreclose the chattel mortgage on the thing sold, if the buyer fails to pay 2 oF ‘more installments; In case of foreclosure, the seller shall have no further action against the ‘buyer to recover any unpaid balance of the price and any agreement to the contrary shall be void. (Art. 1484) ‘These remedies are alternative and exclusive, ‘and the exercise of one would bar the exercise (of the others. (Delta Motor Sales Corp. v. Niu ‘Kim Duan, GR. No. 61043, 1992) Exception: Even ifthe specific performance, if the same has become impossible, the seller may still choose rescission. (art 1191) seller had chosen B.MACEDA LAW : What is the coverage of the Maceda Law oF the Realty Installment Buyer Protection Aet? A: It covers all contracts involving the sale or financing of real estate on installment payments, including residential condominium ‘apartments. (R.A, No. 6552, Sec. 3) {does not apply to sales of 4. Industral lots; 2. Commercial buildings and lots; and 3. Sales to tenants under agrarian reform laws (RA. 6552, Sec. 3) Q: What are the"rights granted to the buyer under the Maceda Law, in case he defaults in the payment of installments? A If the buyer has paid at least 2 years of installments 1. Pay the unpaid installments due without additional interests, within the grace period. The grace period is 1 month for every year of installment payments ‘made. This right shall be exercised only

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