()

~ATENEO
VCENTRAL
+r '• I BAR OPERATIONS 20191

(\
JORGE ALFONSO C. MELO
0 Bar Review Coordinator

() LEILA S. LIM
Bar Review Secretariat
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ATENEO CENTRAL BAR OPERATIONS
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PATRICK EDWARD BALISONG
r Chairman

c KATRINA Y. COSCOLLUELA
GENICA THERESE ENDALUZ
JONATHAN VICTOR NOEL
JOHN STEPHEN PANGILINAN
CZARINA CHER CUERPO
BENIGNO ENCISO
Administration Committee Heads Academics Committee Heads Hotel Operations Committee Heads

VIVENCIO ASANO
FERDINAND CASIS
ARIS GULAPA
J. HECTOR HOFILENA (RET.)
JESS RAYMUND LOPEZ
AMPARITA STA. MARIA
CHRISTINE JOY TAN
TERESA VILLANUEVA-TIANSAY
CIVIL LAW Faculty Advisers

MARIA HAZEL BABELONIA

f\UNA ALISHA CAPATI
0 ISABELLE CAPISTRANO
JAMES'CUEVAS
RACHELLE ANN L. GO
BERNADETIE LOUISE GUIA
0 MERYL GUINTU
LYNDON MONTES
r ' NADJA VALERIE MURIA
' PATRICE JANE ROMERO
MELAN ANTHONY YAP
CIVIL LAW Subject Heads

.) ROSEGAIL ABAS
KARLA NIZZA BUTIU
f ANA BETTINA CARONONGAN
.( ' ALEEZAij GERTRUDE REGADO
\.) JUSTIN NICHOLAS SY
CIVIL LAW Understudies
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 EUNICE A. MALA YO
FRANCES CHRISTINE F. SAYSON
• Central Bar Operations
Academics Understudies

CHRISTINE FLORES RAMTRINA MARIE ATRIAS JULIA HANNA SORIANO

PAULINE MARIE CHANG LARAH ANGELA REGIS KRISTINA LOPEZ DE LEON
BIANCA PALOMA RAYMOND LIM GLODYL CATALAN
DONN CARLO SERVANDO JOHAN FABIA CASSANDRA POLINAR
ZHAIENNE RANAY HAZEL TOLENTINO LORIEDEL DEL FAJARDO
ERIN CANCEKO MONINA PASTRANA EZEKIEL GARCIA
GE·ANN SALUD PILAR HILADO BRYAN GEORGE MANZANO
JOSH CARILLO PRAM MENGHRAJANI MAISIE KARISSA ZABALA
KRISTINE MEDEL TRIX APLASCA SARA KARMINA AVILLON
MARIELLA ALLANIC RUTH ESTHER MARIE
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GUEVARRA
CIVIL LAW Volunteers
 TABLE OF CONTENTS
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I. GENERAL PRINCIPLES················································································"·············································· ... 2
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A. EFFECT AND APPLICATION OF LAWS •••••••••••••••••••••••••••••.••••••••.••••••••••••••••••••••••.•.•...•.••••••.•••••••....•••.••••• 2
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B. CONFLICT OF LAWS (PRIVATE INTERNATIONAL LAW) 4
() C. HUMAN RELATIONS (Articles 19-22) 19
() JI. PERSONS AND FAMILY RELATIONS o
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0 1. CIVIL PERSONALITY 1
2. USE OF SURNAMES 3
3. ABSENCE 4
B. MARRIAGE 6
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1. REQUISITES OF MARRIAGE 6
' 2. EXEMPTION FROM LICENSE REQUIREMENT 6
3. MARRIAGES SOLEMNIZED ABROAD AND FOREIGN DIVORCE 8
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4. VOID AND VOIDABLE MARRIAGES 9
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C. LEGAL SEPARATION ••••••••••••••..••.•••••••••.••••••••••••••••••••••••••••••••••••••••••••••••••••••••.•••••••••..•.•••••••••.••••.••.••••••••• 19

D. RIGHTS AND OBLIGATION BETWEEN HUSBAND AND WIFE 20

E. PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE 21

1. GENERAL PROVISIONS 21
r, 2. DONATIONS BY REASON OF MARRIAGE 21
3. ABSOLUTE COMMUNITY OF PROPERTY 22
; ) 4. CONJUGAL PARTNERSHIP OF GAINS 24
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5. SEPARATION OF PROPERTY AND ADMINISTRATION OF COMMON PROPERTY BY ONE
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6. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE 28
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G. PATERNITY AND FILIATION : 31

1. LEGITIMATE CHILDREN 31
2. PROOF OF FILIATION : 32
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·. ...,, 3. ILLEGITIMATE CHILDREN 34
4. LEGITIMATED CHILDREN 34
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H. ADOPTION 36
u 1. R.A. 8552: DOMESTIC ADOPTION ACT ~ ~ ~ ~ 36
u a. Who may adopt:
b. Who may be adopted
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c. Rights of an adopted child 37

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 d. Instances and effects of rescission 37
2. R.A. 8043: INTER-COUNTRY ADOPTION ACT OF 1995 38
a. When allowed 38
b. Who may adopt : 38
c. Who may be adopted ,. . 38
I. SUPPORT 39

J. PARENT AL AUTHORITY 41

K. EMANCIPATION ~ 45

L. RETROACTIVITY OF THE FAMILY CODE 45

Ill. PROPERTY 46

A. CLASSIFICATION OF PROPERTY 46 •

B. OWNERSHIP ••••••••••••••••••••••••••.••..•...•••••••.••.••••••••••••:••••••••.••••••••.••.•••_ ••••••••••••••••••••••••••••••••••••••••••••••••••r•••••••• 51

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1. IN GENERAL 51
2. RULES ON ACCESSION 54
3. QUIETING OF TITLE TO OR INTEREST IN AND REMOVAL OR PREVENTION OF CLOUD
OVER TITLE TO OR INTEREST IN REAL PROPERTY 65
C. CO-OWNERSHIP 67

D. POSSESSION ~ ~ •. ·••.• 70

1. KINDS OF POSSESSION ~ ; 71
2. ACQUISITION OF POSSESSION 72
3. EFFECTS OF POSSESSION ~ ~ 73
E. USUFRUCT 77

1. IN GENERAL 77
2. RIGHTS AND OBLIGATIONS OF THE USUFRUCTUARY 79
3. EXTINGUISHMENT 82
F. EASEMENTS 83

1. MODES OF ACQUIRING EASEMENTS 83

2. RIGHTS AND OBLIGATIONS OF THE OWNERS OF THE DOMINANT AND SERVIENT
ESTATES 85
3. MODES OF EXTINGUISHMENT 86
4. LEGAL vs. VOLUNTARY EASEMENTS 86
5. KINDS OF LEGAL EASEMENTS: 87
a. Relating to waters 87
b. Right of way 87
c. Light and View 88
G. NUISANCE 89

H. MODES OF ACQUIRING OWNERSHIP 90

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It, 1. OCCUPATION 91
2. DONATION 92
'() a. Nature 92
b. Persons who may give or receive donation 94
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c. Effects and limitations of donation 96
d. Revocation and reduction of donations 97
3. PRESCRIPTION 98
() a. General provisions 98
b. Prescription of ownership and other real rights 99
c. Prescription or limitation of actions 101

o IV. SUCCESSION 102

A. GENERAL PROVISIONS 102

r-. B. TESTAMENTARY SUCCESSION 104

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1. WILLS 104
2. INSTITUTION OF HEIRS 116
3. SUBSTITUTION OF HEIRS 119
4. CONDITIONAL TESTAMENTARY DISPOSITIONS AND DISPOSITIONS WITH A TERM .. 121
5. LEGITIMES 123
6. DISINHERITANCE 131
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7. LEGACIES AND DEVISES ·.- 136
,..., C. LEGAL OR INTESTATE SUCCESSION .-, 141
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1. GENERAL PROVISIONS; RELATIONSHIP AND RIGHT OF REPRESENTATION 141
2. ORDER OF INTESTATE SUCCESSION 144
D. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION 149

1. RIGHT OF ACCRETION · 149

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2. CAPACITY TO SUCCEED BY WILL OR BY INTESTACY 150
3. ACCEPTANCE AND REPUDIATION OF INHERITANCE 153
. ~ 4. PARTITION AND DISTRIBUTION OF THE ESTATE 156
lJ V. OBLIGATIONS AND CONTRACTS 160

A. OBLIGATIONS 160

1. GENERAL PROVISIONS 160

2. NATURE AND EFFECTS OF OBLIGATIONS 162
4. KINDS 169
4. EXTINGUISHMENT OF OBLIGATIONS 179
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B. CONTRACTS ••••••••••••••••••••••••••••••.•••••••••••••••.••.•••••••••••...••••••••..••.••.•••••••••••••••••••••••••••••••.•..••••••••••••••••••••.•• 192
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1. GENERAL PROVISIONS : 192
u 2. ESSENTIAL REQUISITES 195
4. REFORMATION OF INSTRUMENTS 203
u 5. INTERPRETATION OF CONTRACTS 204
6. RESCISSIBLE CONTRACTS 204
u 7. VOIDABLE CONTRACTS 206
 8. UNENFORCEABLE CONTRACTS 207
9. VOID OR INEXISTENT CONTRACTS · 208
C. NATURAL OBLIGATIONS ~ 210

D •..•••..•••.••••••.....••••••••••••••••••••••••••••••...•••••.•••••••.....••••••••••.••••••••.....•.••••....•••••••...•......•••...•••••...•.••..•.•••.••••••••••••
211

ESTOPPEL 211

E. TRUSTS ••....•.•••••••••••••••••••..••••.••.•....•.•..••••.•..•••••••.••••.••.•.••••••••••..........•..••.••.•...•....••.•••••.......•..•.•.•••••••••••••• 212

VI. SALES ...............••••••.••..........••.•......................•.............................: 217

A. NATURE AND FORM 217

1. ESSENTIAL REQUISITES 217 •

2. PERFECTION ..•................................ ,
B. CAPACITY TO BUY OR SELL
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C. EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST 226

D. OBLIGATIONS OF THE VENDOR 226

E. OBLIGATIONS OF THE VENDEE 230

F. BREACH OF CONTRACT ~ ..·•• 2:!0

1. REMEDIES ~30
2. RECTO LAW AND MACEDA LAW ,.~ 234
G. EXTINGUISHMENT 236

1. IN GENERAL 236
2. EQUITABLE MORTGAGE 238
H. ASSIGNMENT OF CREDITS ••.•••••.•.•••••.••••.....••••.••.••.•....•.•....•••••..•...••••••••••.....•••.••••.•...•.•...••••..••••...••••••• 240

VII. LEASE •.....••.••••.•..........•••...•.•.......•............••....•.............•...................................•...........•....•....................... 242

A. GENERAL PROVISIONS 242

B. RIGHTS AND OBLIGATIONS OF LESSOR ·......••••...•.........••.•.•...••••.••••••.••

245

C. RIGHTS AND OBLIGATIONS OF LESSEE ..••..•.•....••.•.••••••.•..•..•...•••••••••.•..••..•••••......•••..••••..••..••..•.•••••••• 246

VIII. PARTNERSHIP ....•..••....................................•......•....•.......................................................................••••..• 250

A. GENERAL PROVISIONS 250

8. OBLIGATIONS OF THE PARTNERS ••.•••.•••.•••••••.•.••...........•.••.•.•................•.•..•......•............•••.••••....•...•.

254

C. DISSOLUTION AND WINDING UP 261

F. LIMITED PARTNERSHIP 264

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.o IX. AGENCY .............••..•••.••.•......•....•...••...•••••...••.•••.•..............................................................................•...~ 267

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i\) A. NATURE, FORM, AND KINDS ••••••••••••••••••••....•••••••.•...........••••....•...••••••••..............•.••••......•..•.•••.••....••.•.•
267

i (', B. OBLIGATIONS OF THE AGENT ••••••••••••.••..••••••...•••........•.•....••....••••••••••••.............•••••.......•.••.•.•.••...•.•••••

276
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; {) C. OBLIGATIONS OF THE PRINCIPAL 281

() E. MODES OF EXTINGUISHMENT 284

X. CREDIT TRANSACTIONS 286

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A. LOAN •••..••...••.•••••••••••••••••••••••••••••.•••••••••••~ ..•••••••••••••••••••.••••••••••••••.•••••••••••••••••••..••••.••••••.••.••••••.•••••••••••••••• 287
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(.) B. DE POSIT .•..•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••.•••••••••••••••..••••••••••••••.......•.•.••••••.•.•.•.•••..••••.•••••••••• 291

o C. GUARANTY AND SURETYSHIP 298

./'·. D. ANTICHRESIS 309

(' E. REAL EST ATE MORTGAGE 314

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XI. LAND TITLES AND DEEDS 333

A. TORRENS SYSTEM 333

B. ORIGINAL REGISTRATION ••••••..••••. ~ 339

1. ORDINARY REGISTRATION 339

a. Decree of registration 347
b. Review of degree of registration; innocent purchaser for value 348
C. CERTIFICATE OF TITLE 363

D. SUBSEQUENT REGISTRATIONS •••••••••••••.••••••••••.••••......••••••.••...•.•.•••...•.•.•.•••••••••••••••......••..•.••..•...•••••••366

1. VOLUNTARY DEALINGS; GENERAL PROVISIONS 367

2. INVOLUNTARY DEALINGS 370
a. Adverse Claim : 370
b. Notice of Lis Pendens :- 371
E. ASSURANCE FUND 374

XII. TORTS AND DAMAGES 376

A. TORTS 376

1. ELEMENTS .- 376
THE CONCEPTS AND DOCTRINES OF VICARIOUS LIABILITY, RES /PSA LOQUITUR, LAST
CLEAR CHANCE, DAMN UM ABS QUE INJURIA 384
L 2. VICARIOUS LIABILITY 384
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4. LAST CLEAR CHANCE :······
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u 5. DAMN UM ABSQUE INJURIA ! ~ ~ 387

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B. PROXIMATE CAUSE 387

C. NEGLIGENCE 390

1. Presumptions 390
D. DAMAGES 397

1. General provisions 397

2. Kinds of damages 397
3. In case of death 404

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I. GENERAL PRINCIPLES A. EFFECT AND APPLICATION OF
'.:LAWS
,~, TOPIC OUTLINE UNDER THE SYLLABUS:
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I. GENERAL PRINCIPLES When the Laws Become Effective
General Rule: Fifteen (15) days after
A. EFFECT AND APPLICATION OF LAWS completion of publication in Official Gazette or a
newspaper of general circulation. (Art. 2)
B. CONFLICT OF LAWS (PRIVATE Exception: The law can provide for its own date
INTERNATIONAL LAW) of effectivity and manner of publication. An
immediate effectivity clause does not preclude
the requirement of publication.
C. HUMAN RELATIONS (Articles 19-22)
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Exclude: Independent civil actions and
prejudicial questions which are covered under
Mandatory Publication
Publication is mandatory and must be in full
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Remedial Law (otherwise, it is not deemed published at all)
since its purpose is to inform the public of its
l . contents.
Civil Law - branch of law that regulates relations
of assistance, authority and obedience among Compliance with the Law
family members as well as members of a society Ignorance of the law excuses no one from
r for the protection of private interests compliance therewith (lgnorantia legis non
·t... excusat). (Art. 3)
Note: Applies only to mandatory and prohibitory
New Civil Code: took effect on August 30, 1950 laws (Consunji v. CA, G.R. 137873, 2001).

Non-Retroactivity of Laws
General Rule: Laws are not retroactive.(Art. 4)

Exceptions: (PIERCER)
i. fen al laws when favorable to the accused
who is not a habitual delinquent or recidivist
ii. [nterpretanve statutes
iii. When the law itself Expressly provides
Exceptions to the exception:
(I) Ex post facto law
(II) When retroactlvlty Impairs the
obligations of contracts
(iii) Bills of Attainder

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iv. Remedial statutes
~.. -...: v. £urative statutes
:. ; vi. gmergency laws
vii. Laws creating new substantive Rights

Mandatory and Prohibitory laws

General Rule: Acts executed against the
provisions of mandatory or prohibitory laws shall
be void. (Art. 5)
--..>

Exception: If the law expressly provides for the

l.i validity of acts committed in violation of a
mandatory or prohibitory provision of a statute.

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Waiver of Rights
Legal Periods
PERIOD.·.'.• ,·
.. EQUIVAtENT .. · · . ..
General Rule: Rights may be waived. (Art. 6) Year 12 calendar months
Requisites of a valid waiver: (Herrera v. Month 30 days, unless referring to a specific
Borromeo) calendar month
1. Existence of a right Day 24 hours
2. Knowledge of the existence of such right Night sunset to sunrise
3. An intention to relinquish the right

Exceptions: When waiver is · :·. ·LAW· · .".MATTE~~c··.· ·· :G(;>VERNING.; .•

i. Contrary to law, public order, public policy, . .. · . .' · ··· .. '. · 'PERS'ONS : 'PRINCIPLE~ DOCTRINE: ·
morals, good customs (e.g. waiver of future ... ::.. • ... : BOUND · .. : . . . . . • .·· . . .
inheritance, political rights, future support) Penal Laws All those Principle of
ii. Prejudicial to a third person with a right who live or Territoriality:
recognized by law. sojourn in Law of the place where
Philippine crime was committed
Repeal of Laws (Art. 7) territory Exception:
(a) Express repeal - repeal of the repealing law Article 2 of the Revised
will not revive the old law (unless expressly Penal Code
provided).
(b) Implied repeal - the provisions of the Principle of Generality:
subsequent law are incompatible with those Law applies to everyone
of the previous law. in the territory
Requisites: Exception:
1. Both laws cover the same subject 1. Treaty stipulations
matter. which exempt some
2. The latter law is repugnant to the persons within the
earlier law. jurisdiction of Philippine
Courts
Judicial Decisions (Art. 8 and 9) 2. Heads of State and
• Decisions of the Supreme Court form part of •
Ambassadors
the law. Status Citizens of Principle of Nationality:
• All judges or courts have the duty to render Laws the National law of the
judgment even if the law is silent, obscure or (relating to Philippines, person
insufficient. family including
rights and those living
Presumption and Applicability of Customs duties, abroad
(Art. 10-12) status,
• Construction and interpretation of laws come legal •
only after it has been demonstrated that capacity)
application is impossible or inadequate Property Real and Lex situs or Lex rel
without them. Laws personal sitae:
• Customs which are contrary to law, public property Law of the place where
order or public policy shall not be property is situated
countenanced. Laws on Forms and Lex loci ce/ebrationis:
• A custom must be proved as a fact Forms and solemnities Law of the country in
according to the rules of evidence. Solemnities of which they are executed
contracts, Exception: If executed
Computation of Time (Art. 13, as amended by wills, public before Philippine
Sec. 31, E.O. 292) instruments diplomatic or consular.
o In computing a period, the first day is officials abroad,
excluded, and the last day included. Philippine laws shall
govern.

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8. CONFLICT OF LAWS (PRIVATE

Rules on Prohibitive Laws (Art. 17)
INTERNATIONAL LAW)
General Rule: Prohibitive laws concerning
persons, their acts or property and laws which
have for their object public order, public policy or I. INTRODUCTION
(, good customs are not rendered ineffective by
\ j laws, judgments promulgated or conventions Private International Law or Con.flict of Laws •
agreed upon in foreign country. that part of the municipal law of the state, which
directs its courts and administrative agencies,
0 Exception: Where a marriage between a
when confrontedwith a legal problem involving a
Filipino citizen and a foreigner is validly
c celebrated and a divorce is thereafter validly
obtained abroad by the alien spouse
foreign element, whether or not they should
apply foreign laws.
capacltatlng him or her to remarry, the Filipino
spouse shall have capacity to remarry under Foreign Element - a factual situation that cuts
Philippinelaw (Art. 26 (2) of the Family Code). across territorial lines and is affected by the
diverse laws of two or more states. (Saudi
--- end of topic --- Arabian Airlines v. ~ Court of Appeals, G.R. No.
122191, 1998)

Private International Law is not a separate,

distinct branch of law; nor is it a mere part of
Civil Law but rather it traverses and concerns
almost every departmentof law.

Threefold Functions Of Private International

Law (CJS) ·
1. Prescribe conditions under which a court or
agency is £ompetent to entertain a suit or
proceeding involving facts· containing a
· -· foreign element;
-! · -, 2. Specify circumstances under which foreign
:!udgment will be recognized as valid and
binding in the forum; and
3. Determine for each class of cases the
particular .§ystem of law by reference to
which the rights of parties must be
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ascertained.
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Difference Between Private (PRIL) and Public Jurisdiction Over the Subject Matter
International Law (PIL) • Power to hear and determine cases of
Public international law (PIL) • the law that general class to which the proceedings in
regulates the relations of States and other question belong.
entitles possessing international personality. • It is conferred. by the sovereign authority,
which orqanizes the courts and defines it
, . :. BA'SIS . : ·... PRIL · :·· PIL powers.
Nature Municipal or International in • Jurisdiction over subject matter is fixed by
national in character law and cannot be conferred by consent of
character the parties or their voluntary submission.
Transae- Private Generally affected (Davao Light v. Court of Appeals, G.R. No.
tions transactions by public interest, 111685 2001)
Involved between or those that are of • To succeed in its motion for the dismissal of
individuals interest only to an action for lack of jurisdiction over the
sovereign states subject matter of the claim, the movant must
Remedle Resort to May be peaceful or show that the court or tribunal cannot act on
sand municipal forcible the matter submitted to It because no law
Sanction tribunals grants it the power to adjudicate the claims.
s (Hasegawa vs. Kitamura, G.R. No. 149177,
Sources a. Codification a.Customs 2007)
s b. Treatises
b.Special c. Principles of law Jurisdiction Over Persons
Legislation recognized by It is the competence of a court to render decision
c. Multilateral civilized nations that will bind the parties to the suit.
Treaties and d.Judicial Decision
International e. Teachings of the Jurisdiction Over the Res
Conventions most highly It is the jurisdiction over the subject matter of the
d.Bilateral qualified controversy, regardless of the persons who may
Treaties publicists be interested therein. It may be classified as
e.Case Law follows:
f. International (a) Action in Rem - purpose is to affect the
Custom interests of all persons in a thing, thus the
Q. Constitution court of the forum may render judgment as
long as it has jurisdiction over the res.
II. JURISDICTION (b) Quasi in Rem - purpose is to affect interests
of particular persons in a thing, thus the court
Three Stages in Judicial Resolution Of of the forum may render judgment as long as
Conflict Problems it has jurisdiction over said persons.
1. Jurisdiction (c) Action in Personam - purpose is to impose •
2. Choice of law personal liability upon the defendant
3. Recognition and enforcement of judgments
(Raytheon International v. Rouzie, G.R. No. Note: In all kinds of jurisdiction, due process
162894, 2008) requires that the State must have a reasonable
basis for exercising jurisdiction: to bereasonable
Major Questions In Analyzing a Conflict Of the jurisdiction must be based on some
Laws Problem minimum contac~ that wlll not offend
1. Jurisdiction - where can or should litigation traditional notions of fair play and substantial
be initiated? justice (Salonga, Piivete International Law, p.
2. Choice of law - which law will the court 44, 1995).
apply?
3. Recognition and enforcement of foreign Minimum Contacts
judgments - where can the resulting The concept of minimum contacts protects the
judgment be enforced? (Hasegawa vs. defendant against the burdens of litigating in a
Kitamura, G.R. No. 149177, 2007) distant or inconvenient forum and it acts to
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ensure that the States, through their courts, do
;n not reach out beyond the limits imposed on them
by their status as coequal sovereigns. ( World-
Wide Volkswagen Corporation v. Woodson,
1980)
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"· : One basic principle underlies all rules of
jurisdiction in international law, a state does not
have jurisdiction in the absence of some
reasonable basis for exercising it. To be
reasonable, the jurisdiction must be based on
some minimum contacts that will not offend
traditional notions of fair play and substantial
justice. (HSBC v. Sherman, G.R. No. 72494,
1989)
. A casual presence of a corporation or its agent
in a state in single or isolated incidents is not
enough to establish jurisdiction. The activities of
its agents in transacting business for the
corporation in the forum state are minimum
r contacts that make it reasonable and in
1_.
conformity with the due process clause. The
r-
l
activities of the corporation in the state were
·..._
systematic and continuous rather that irregular
or casual, which resulted in large volume
interstatebusiness.The corporationreceivedthe
benefits and protection of the laws of the state,
and therefore establishedthe minimum contacts
to be under their jurisdiction. (International Shoe
·, _J
Co. v. Washington, 326 U.S. 310, 1945)
Foreign Corporations Doing Business
Doing business implies a continuity of
commercial dealings, and contemplate to that
'·' extent the performance of acts, or the exercise
,,.. - . of some of the functions normally incident to and
.. _; l
in progressiveprosecutionof commercialgain or
of the purpose and object of the business
organization. The following acts shall not be
deemed "doing business"in the Philippines:
(a) Mere investment as a shareholder by a
foreign entity in domestic corporations
duly registered to do business, and/or
the exercise of rights as such investor;
(b) Having a nominee director or officer to
represent its interests in such
corporation;
1.., )
(c) Appointing a representativeor distributor
domiciled in the Philippines which
transacts business in the
representatlve's or distributor's own
-
. .
\
name and account;
v
u
CIVIL LAW
( d) The publication of a general
advertisement through any print or
broadcastmedia;
( e) Maintaining a stock of goods in the
Philippines solely for the purpose of
having the same processed by another
entity in the Philippines;
(f) Consignment by a foreign entity of
equipment with a local company to be
used in the processing of products for
export;
(g) Collecting information in the Philippines;
and
(h) Performing services auxiliary to an
existing isolated contract of sale which
are not on a continuing basis, such as
installing in the Philippines machinery it
has manufactured or exported to the
Philippines, servicing the same, training
domestic workers to operate it, and
similar incidental services. (Foreign
Investments Act)
Service of Summons on Foreign
Corporations
Service may be made on a foreign corporation
which has transacted business in the Philippines
on Its resident designated agent, or, If there be
no such agent, on the government official
designated by law !O that effect, or on any of its
officers or agents within the Philippines.
If it is not registered in the Philippines or has no
resident agent, service may, with leave of court,
be effected out of the Philippines through any of
the following means:
(a) personal service coursed through the
appropriate court in the foreign country
with the assistanceof the DFA;
(b) publication once in a newspaper of
general circulation in the country
where the defendant may be found
and by serving a copy of the summons
and the court order by registered mail
at its last known address;
(c) facsimile or any recognized electronic
means that could generate proof of
service; or
(d) such other means as the court may in
its discretion direct. (A.M. No. 11-3-6-
SC)
Choice of Forum
While the parties are free to select the forum for
resolving disputes by way of a choice of forum
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clause, said clause does not operate to deny or
divest jurisdiction from the State. (HSBC v.
Sherman, G.R.No. 72494, 1989).
Specifically, this jurisdiction only refers to the
court's jurisdiction over the subject matter in a
judicial proceeding. It is fixed by law and
determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to
all or some of the claims asserted therein.
(Hasegawa vs. Kitamura, G.R. No. 149177,
2007)
Although venue may be changed or transferred
from one province to another by agreement of
the parties in writing, such an agreement will not
be held valid where it practically negates the
action of the claimants. ( Sweet Lines, Inc. v.
Teves, G.R. No. L-37750, 1978)
Three Ways of Disposing Conflict of Law
Cases
1. Dismiss the case, either because of:
(a) Lack or jurisdiction;
(b) Refusal to assume jurisdiction over the
case on the ground that the controversy
may be suitably tried elsewhere (forum
non conveniens); or
( c) Act of State doctrine
o Except: Violation of International
Law principle
2. Assume jurisdiction over the case and apply
internal law of the forum (lex ton); or
3. Assume jurisdiction over the case and take
into account or apply the law of some other
State (Salonga, p. 44).
Principle of Forum Non Conveniens
A court, even though it has jurisdiction over a
conflicts of law case, may refuse impositions on
its jurisdiction where it is not the most
convenient forum and the parties are not
precluded from seeking remedies elsewhere.
(Bank of America v. Court of Appeals, G.R. No.
120135, 2003)
Test to Determine Most Convenient Forum
1. Whether the forum is one to which the
parties may conveniently resort to;
2. Whether it is in the position as to make an
intelligent decision as to the law and the
facts; and
3. Whether it has or is likely to have power to
enforce its decision (Principle of
CIVIL LAW
Effectiveness). ( The Manila Hotel
Corporation v. NLRC, GR No. 120077,
2000)
Act of State Doctrine
Courts will not inquire into the validity of acts of a
foreign government done within its own territory.
Every sovereign state is bound to respect the
independence of every other sovereign
state.(French v. Banco Nacional de Cuba, 23
N. Y.2d 46, 1968)
Ill. PRINCIPLES ON CHOICE OF LAW
Choice of law • peals with the problem that
arises when two': or more states have a
connection to cases about which their respective
laws differ. Each court must then choose which
laws to apply based on choice of law rules that
themselves rest on public policy.
..
Choice of Law seeks to answer two important
questions:
1. What legal system should control a given
situation where some of the significant facts
occurred In two or more states: and
2: To what extent should the chosen legal
system regulate the situation (Saudi Arabian
Airlines v. CA, GR No. 122191, 1998).
Application of Internal Law
Three Instances when the Forum must Apply
Internal Law •
i. When the application of internal law is
decreed;
ii. Where there is failure to plead and prove
foreign law; and
iii. Where the case involves any of the
exceptions to the application of foreign law.
Application of Foreign Law
Proof of Foreign Law
In the Philippine jurisdiction, it is settled that foreign
law must be treated as a fact that must be pleaded
and proved by the party invoking it. Foreign law·
may either be:
(a) Written; or
(b) Unwritten.
Proof of Written Foreign Law
Written law may be evidenced by:
(a) An official publication; or
(b) A copy attested by the officer having legal
custody of the record, or by his deputy.
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Exceptions to the application of foreign law

Note: If the record is not kept in the Philippines, the
proponent of the foreign law must also submit a
certificate that such officer has the custody of the
record.
The certificate may be made by any of the following
officers and must be authenticated by the seal of
his office:
(a) Secretary of the embassy or legation
(PIMP-A-VIP)
i. Enforcement of the foreign law would run.
counter to an important f ublic policy
ii. Application of Foreign law would infringe
good Morality as understood in the forum
iii. When the foreign law is Penal in nature
iv. Where the fo(eign law is Procedural in
1
nature -

(b) Consul general v. When the question involves [mmovable

(c) Consul
(d) Vice consul
(e) Consular agent
0 (f) Any officer in the foreign service of the
n"' -,
Philippines stationed in the foreign country in
which the record is kept. (Rules of Court, Rule
132, Sec. 24)
Note: This does net exclude presentation of other
competent evidence such as testimony of
witnesses skilled in that foreign law (Williamette v.
r Muzzal, GR No. L-42538, 1935)
Proof of Unwritten Foreign Law
\. The following are admissible:
,, . 1. The oral testimony of expert witnesses; and
2. Printed and published books of reports of
decisions of the courts of the State concerned
if proved to be commonly admitted in such
courts. (Wildval/ey Shipping Co., Ltd. v. CA,
GR No. 119602, 2000)
property in the forum
vi. When the foreign law is fiscal or
Administrative in nature
vii. Where the application of foreign law would
involve !njustlce or Injury to the citizens or
residents in the forum
viii. Where the application of foreign law would
endanger ~ital interests of the State of the
forum.
Note: The courts of the forum will not enforce any
foreign claim (or statute) obnoxious to the forum's
public policy.
Thus in Cada/in v. POEA, the Court ruled that even
if Bahrain's Amiri Decree No. 23 prescribes a one-
year prescriptive period for labor benefits claimed
by the Filipino petitioners, to enforce such foreign
law as regards the claims in question would
contravene the Philippine's public policy on the
protection of labor.

/ -. Exceptions: The strict rules of evidence to prove A foreign law, stating that a parent is not obliged
foreign law do not apply in: (LECION) to support the child, does not find applicability in
i. §lection cases, our jurisdiction when such is contrary to an
ii. !:and registration. established public policy of the forum. Prohibitive
iii. Cadastral, laws concerning persons, their acts or property,
iv. Naturalization and and those which have for their object public
v. fnsolvency proceedings, and order, public policy and good customs shall not
•. J
vi. Other cases not herein provided for, except by be rendered ineffective by laws or judgments
analogy or in a suppletory character and promulgated, or by determinations or
{) whenever practicable and convenient. (Rules conventions agreed upon in a foreign country.
of Court, Rule 1, Sec. 4) (Del Socorro, v. Van Wilsem, GR No. 193707,
2014)
'\.) Doctrine of Processual Presumption
Where the foreign law is not properly pleaded or Rule on Procedural Laws
'. j proved, the presumption of identity or similarity General Rule: The forum applies its own
arises, i.e., the foreign law is the same as the procedural law (lex fem) in resolving a conflicts of
domestic law. (EDI-Staffbuilders International v. law case while the foreign law Is limited to the
NLRC, 2007) substantive aspects. ·
-; I
Exception: Prescription of actions is sui generis in
conflict of laws.

4 :
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It may be viewed either as procedural or
substantive, depending on the characterization
given such a law.
Exception to the ·Exception: The characterization
of a statute of limitation· becomes irrelevant when
the country of the forum has a borrowing statute."
11
Borrowing Statute - directs the State of the forum
to apply the foreign statute of limitations to the
pending claims based on a foreign law. In short, it
has the practical effect of treating the foreign statute
of limitation as one of substance
One kind of borrowing statute provides that an
action barred by the laws of the place where it
accrued, will not be enforced in the forum even
though the local statute has not run against it.
An example is section 48 of the Philippine Code of
Civil Procedure, which provides that, "If by the laws
of the state or country where the cause of action
arose the action is barred, it is also barred in the
Philippines Islands."
Exception to the Exception to the Exception:
The Court of the forum will not enforce any
foreign claim obnoxious to the forum's public
policy.
Nature of Conflict of Law Rules
Distinguish Internal Rule from Conflict Rule
as to their Legal Effects
;.: ·\INTERNAL RULE . CONFLICT RUL,E·
Immediately solves the Decides only which
law or jurisdiction will
question raised
give the final solution
whether the particular
act is allowed,
commanded or
rohibited
Two Parts of a Conflict of Law Rule
1. Factual Situation - takes the form of factual
events or operaUve facts; and
2. Point of Contact or Test Factor- prescribes
the municipal law to which the question should
referred or connected
Example: Article 16 of the Civil Code may be
divided as follows:
1. Real property as well as personal property
(Factual Situation)
CIVIL LAW
2. Is subject to the law of the country where it
is situated ( or the situs of the res) (Point of
Contact)
Points of Contact (DRONS-SAFES..IF)
i. Qomicile, .B.esidence, place of Qrigin,
Nationality, or place of §ojoum of a person;
ii. §eat of a legal or juridical person;
iii. Locus !ctus or the place where an act has
been done;
iv. Lex fori or the place where judicial or
administrative proceedings are instituted or
done;
v. Place where an act is intended to come into
§ffect
vi. §.itus of a thing or the place where a thing is, or
is deemed to be situated.
vii .. Lex loci [ntentionis or the intention of the
contracting parties as to the law that should
govern their agreement;
viii. flag of a ship (Saudi Arabian Airlines v. CA.
G.R. No. 122191, 1998)
Characterization • process of assigning a disputed
question to its correct legal category
Stages of Characterization
1. Classification of the problem (e.g. whether the
question relates to contracts, property, torts,
succession etc).
Note: As a matter of convenience, the
classification should be determined in
accordance with the law of the forum.
2. Determination of foreign law based on point of
contact test
3. Selection, extent of application of the proper
law
Renvoi - a method of disposing a conflict •
problem by referring a matter for judgment or
consideration to another State. •
Types of Renvoi
(a) Remission - reference is made back to the
law of the forum
(b) Transmission - reference is made to a third
State
Theories to Solve Renvoi Problem
(a) Rejection of Renvoi - the reference of the .
matter for judgment is confined exclusively to
the internal law of the other State.
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(b) Acceptance of Renvo/ - reference is to the
entirety. including the conflicts rule of the other
State; and if the State of the forum finds that
the matter is referred back to it, the court might
conclude that the reference to the other State
,-, has not provided a direct solution, in such
' ~ ,' case, the court might accept the reference and
apply its own internal law (remission) or the
() laws of the third State (transmission).
• Also calfed single renvoi.
·c (c) Deslstment or Mutual Disclaimer of
[' Jurisdiction - reference is also to the
' )
entirety, including the conflicts rule of the
i
other State; and if the State of the forum
\ . finds that the matter is referred to back to it,
the court might conclude that the other State
.
..... has no rule of law applicable to the situation,
in such case, the court left is with no other
alternative but to apply its own internal law.
(d) Foreign Court Theory - the law to be
applied by the court of the forum is that law
r: the court of the State referred would have
-.,J. applied.
,~ • Double renvoi may arise, i.e., the court of
the forum. in applying the foreign court
theory. finds that the referred State
accepts the renvoi. In which case, the
court of the forum shall therefore apply
what the court of the State referred would
have applied.
I ....
• Example: X was a citizen of State 8 but
domiciled in State C. A left immovables in
State B. As the courts of State B follows
the foreign court theory, it will therefore
decide the case exactly as State C will
decide.
Assuming that Stale B's court
determines that State C's court
·. ;
would have referred the matter to
State B's internal laws alone, State
B would therefore apply its own
(State B's) internal laws as State B
'"-)
would. (No renvoiin this scenario)
Assuming however that the State
B's court determines that State C's
court would have referred the matter
f .
.._.., to State B's laws in its entirety; Then
State C would have found that State
B's conflict rules refers the matter
back to State C's again or a third
t : State; Thus. State C, which adopts
t; the acceptance of the renvoi theory,
u
(j
CIVIL LAW
would have therefore applied its
own laws or that of the thitd State; ·
The court of the forum, State B, thus
decides the case the way State C
would.
IV. CHOICE OF LAW RULES
PROPERTY
Lex situs rule - the Civil Code gives exdusive
importance to the lex situs, regardless of the nature
of the property; thus. it provides that real property
as well as personal property is subject to the law of
the country where situated. (Art. 16)
Immovables
Scope of Lex Situs Rules as to Immovables
(a) Capacity to take and transfer immovables;
Exception: Lex rei sitae is not applicable
where the issue is the authority of a State
official to validly dispose of property belonging
to the State and the validity of the procedures
adopted to effect its sale. (Laurel v. Garcia,
G.R. No. 92013,.1990).
(b) Formalities of conveyance;
(c) Essential validity and effect of the transfer;
(d) Interpretation and effect of conveyance:
(e) Validity and effect of mortgages and other
encumbrances;
(f) Marital interest in land; and
(g} Equitable interest in land
Elements of a Conflict Of Laws Problem as to
Immovables: (C·FEI)
1. There is a dispute over the title or ownership of
an immovable, such that the:
(a) fapacity to take and transfer immovables,
(b) formalities of conveyance,
(c) 5ssential validity and effect of the transfer,
or
(d) !nterpretation and effect of a conveyance,
are to be determined; and
2. A foreign law on land ownership and its
conveyance is asserted to conflict with a
domestic law on the same matters. Hence, the
need to determine which law should apply.
Exception To The Lex Situs Rule As To
Immovables: (SCOFT)
i. .§.uccession - capacity to succeed, order of
succession, amount of successional rights and
intrinsic validity of testamentary provisions,
shall be regulated by the national law of the
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person whose succession is under
consideration, whatever may be the nature of
the property. (Arts. 16 and 1039)
ii. Parties' ~ontractual Obligations - where the
issue involves the rights and liabilities of the
parties inter se as a matter of contractual
obligation, even though the subject matter of
the contract is the land, the goveming law is
the law that regulates the contract as a whole.
iii. Principal Qbllgation Secured - validity and
effect of the principal obligation, which the
encumbrance .. secures are determined by
principles applicable to contracts in general.
iv. Contract to Iransfer -while the validity of the
transfer of immovable is governed by the lex
situs rule, the validity of the contract to transfer
is determined by the proper law of the contract.
v. When the property within the situs belongs to a
foreign State. (Holy See v. Rosario, G.R. No.
101949, 1994)
PERSONAL LAW, NATIONALITY AND
DOMrCILE
Personal Law
Also known as statuta personal refers to laws that
concern persons, their legal condition and civil
status.
Two Approaches to Detennlne Personal Law
1. Nationality
. 2. Domicile
Nationality
Refers to a personal and more or less permanent
membership in a political community.
Under the conflicts rules of the Civil Code, the
national law of an individual regulates his civil
status and condition, his family rights and duties,
the intrinsic validity of his will and the rights of
succession to his properties (Arts. 15, 16 par. 2 ond
1069).
Detennination of Nationality
As a rule, each State is free to determine by its own
municipal law the persons it considers as its
nationals. Thus, any question as to whether a
person is a national of particular State shall be
determined by the municipal law of that State.
(Hague Convention on Conflict of Nationality Laws
in 1930, Art. 2).
CIVIL LAW
Who are Filipino citizens: (AFEN)
(a) Those who are· citizens of the Philippines at
the time of the Adoption of this Constitution;
(b} Those whose fathers or mothers are citizens
of the Philippines;
(c) Those bom before January 17, 1973, of
Filipino mothers, who Elect Philippine
citizenship upon reaching the age of majority;
and
(d) Those who are Naturalized In accordance with
law (Phil. ConsC Art. IV, Sec. 1)
:,
1
Note: A person having two or more nationalities
may be regarded as a national by each of the
States whose nationality he possesses (Hague
Convention on Conflict of Nationality Laws, Art. 3).
Modes of Acquisition of Natlonallty (BINCReS}
(a) Birth (either Jus Sanguinis or Jus So/~)
(b) Maturalization - grant of citizenship upon
application by some act which would qualify
an individual for a new nationality.
(c) Repatriation - recovery of original nationality
upon fulfillment of certain conditions.
(d) .§.ubjugation - when a State is defeated or
conquered, all the citizens acquire the
nationality of the conquering State.
( e) £ession - when a State has been ceded in
another State, all the people of the territory
acquire the nationality of the State in which
their territory has been merged.
Modes of Losing Nationality (ReDRES)
(a) Belease - a citizen may apply for release from
citizenship of his State.
(b) 2eprivation - the State concerned may
deprive their citizens of nationality.
Example; the Philippines may deprive their
citizens of nationality upon entry into the •
military service of a foreign power.
(c) Expiration - of nationality may result from a
long stay abroad without any indication of a
desire to retum.
(d) fienunciation - a person may repudiate his
nationality in favor of another.
( e) . §ubstitution - loss of nationality ipso facto by
naturalization abroad or by marriage.
Instances when Dual or Multiple Nationalities
Arise:
i. Concurrent application of jus soli and jus
sanguinis at birth; 1
ii. Refusal of certain States to accept a full
application of the ?octrine of expatriation;
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iii. Marriage; or
iv. Any formal or voluntary act of the individual.
Note: If the litigation arises in a third country, the
forum may recognize exclusively in its territory the
naUonallty of the State with whleh under the
circumstances he appears to be in fact most
closely connected (Hague Convention on Conflict
of Nationality Law, Art. 5).
j
-·~ ,· Special Treatments affecting Nationality of
. ... '
Persons In Mixed Marriages involving Filipinos
Foreign woman married to a Filipino - becomes
-
; !
v . •
ipso facto a Filipino provided she is not disqualified
to be a citizen of the Philippines under its
naturalization law.
However, to settle the matter of the wife's
citizenship once and for all, the Court deemed it
f. . . proper to adopt the procedure followed in the
Bureau of Immigration, to wit:
The wife must file a petition for the
'l cancellation of her alien certificate of
i., '·. registration alleging, among other things
.. J
that:
1. She is married to a Filipino citizen; and
2. She Is not disqualified from acquiring
her husband's citizenship pursuant to
the Naturalization Law, as amended.
3. Upon the finding that that the petitioner
does not belong to any of the groups
disqualified from becoming naturalized
Filipino citizen, the Bureau of
Immigration shall conduct
investigation and thereafter
promulgate its order or decision
granting or denying the petition.
4. If granted, the Commissioner of
Immigration shall cancel the
petitioner's registration as an alien (Mo
Ya Lim Yao v. CIR, G.R. No. L-21289,
J i 1971).
i.J
Filipinos married to aliens - retain their
citizenship unless by their act or omission they are
deemed under the laws to have renounced their
citizenship (1987 Phil. Const., Art. IV, Sec. 4).
Domicile
• In other jurisdictions, domicile serves as the
necessary connection to determine an
individual's personal law.
o It is the place with which a person has a
settled connection for legal purposes, either
CIVIL LAW
because: he resides there or it is the place
assigned to him by law.
Importance of Domicile In the Philippines
1. Inadequacy of nationality principle in
determining personal law of:
• Stateless persons,
• Persons of multiple nationality, and
• Persons belonging to countries of
composite system of law on territorial basis
2. Personal status of individuals from States
following the domiciliary principle may be the
subject of litigation in the Philippines;
3. Occasional reference by Philippine law to the
lex domicilii in determining the validity of certain
ads.
Example:
1. Formal validity of a will (Art. 816) or
2. Revocation of a will outside the
Philippines (Art. 829)
Basic Principles of Domicile
1. Every person must have a domicile.
2. A person cannot have two simultaneous
domiciles.
3. Every natural person, as long as he is free and
sui juris, may change his domicile.
4. A domicile once acquired is retained unless a
new one is obtained.
5. The presumption is in favor of the continuance
of an existing domicile.
• Thus, the burden of proof is on the one who
alleges that a change of domicile has taken
an place.
Law which determines Domicile
The forum determines domicile according to its
own standards. .'
Kinds of Domicile t
(a) Domicile of Origin - the domicile of a
person's parents at the time of his birth.
(b) Constructive Domicile - the domicile
~ established by law after birth in case of
persons under legal disability, regardless of
their intention or voluntary act.
( c) Domicile of Choice - is the place voluntarily
chosen by a person sui juris as his home and
to which, whenever he is absent he has the
intention of returning.
Essential Requisites of Domicile of Choice
1. Capacity
2. Freedom of Choice
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3. Residence or ·physical presence in the place
wh~re domicile is alleged to have been
acquired;
4. Intention to make the place of residence the
permanent place of abode, or simply home
(animus samper manendi).
• The primary intention required is intention to
make a home rather than an intention to
acquire a domicile. Otherwise, persons could
choose to be domiciled 'ln a State of low
burdens and high benefits irrespective of
where they actually happened to live.
• As a rule, the motive or reason prompting a
person to make a given place his home is
immaterial.
Note: The husband and the wife shall fix the family
domicile but in case of disagreement, the court
shall decide. (Family Code, Art. 69)
Summary of Rules on Domicile of Choice
(a) To acquire a fresh domicile, residence and
intention must. concur.
(b) To retain an existing domicile, either residence
or intention to remain must be present.
(c) To abandon a domicile, residence in the new
place and intention to abandon the old place
must concur.
MARRIAGE, ADOPTION AND FAMII. Y
RELATIONS
Personal status
• It is the legal position of an individual in his
society.
• It includes such matters as the beginning and
end of legal personality. capacity to have
rights in general, family relations and its
various aspects such as: birth, . legitimation,
adoption, emancipation, marriage, divorce,
and sometimes even succession. •
Note: Personal status is ordinarily not terminable at
a person's own will.
Capacity to Contract Marriage
It refers to 'his power to acquire and exercise rights.
In Conflict of Laws, the inquiry is to ascertain what
system of law will determine a person's capacity to
enter into a legal transaction when there is conflict
between the law of the place where the transaction
is entered into and some system of law, such as
the law of the domicile or the nationality, which can
claim to regulate that person's act.
CIVIL LAW
Formal Validity of Marriages
If the marriage is valid by the law of the place of
celebration or lex loci celebrationis, it is also valid in
other places.
Philippine Conflict Rule on Formal and
Substantive Validity of Marriage
All marriages solemnized outside the Philippines, in
accordance with the laws in force in the country
where they were solemnized, and valid there as
such, shall also be valid in this country. (Family
Code, Art. 26)
Substantive Validity of Marriages .
General Rule: Law of the place of celebration (lex
loci celebrationis)
Exceptions:
i. Philippine law governs marriage between
Filipino nationals abroad solemnized by a
consul-general of the Philippines. (Family
Code, Art. 10)
ii. Marriages prohibited under Philippine Law will
not be upheld as valid in the Philippines.
(Family Code, Art. 26).
(i) Contracted by any party below
eighteer.i years of age even with
consent,(Family Code, Art. 35 (1))
(ii) Bigamous or polygamous marriage
not falling under Art. 41 (Family Code,
Art. 35 (4))
(iii) Contracted through mistake of one
party as to the identity of the other
(Family Code, Art. 35 (5))
(iv) Subsequent marriages void under Art.
53 (Family Code, Art. 35 (6))
(v) Psychological incapacity (Family
Code, Art. 36)
(vi) Incestuous marriage (Family Code, •
Art. 37)
(vii) Marriage against public policy (Family
Code, Art. 38)
Requisites to Uphold Marriages Contracted
Abroad
1. Existence of the foreign law as a question of
fact;
2. Alleged foreign marriage by convincing
evidence (Adong v. Cheong Seng Gee, G.R.
No. 18081, 1922)
Annulment of marriages
1. Jurisdiction to Annul - acquired by the
following forums:
(a) Where the spouses are domiciled in; and
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o (b) In which either parties are nationals

In 2. Governing Law on Annulment or Nullity - lex
loci celebrationis determines the cause or
. : C-ATl;GORY.. .: · :GOVERNING LAW · ·· "
Personal law or national law of
.
I Personal Status
! r: ground for annulment.
Capacity to
the person (lex nationalii)
Personal law or national law of

Io Recognition of Foreign Divorce Decrees

(a) Between Filipino citizens - not entitled to
recognition because of the local policy against
Contract
Marriage
Formal Validity
the person (lex nationalii)

Law of the place of celebration

lo absolute divorce. of Marriages (lex loci celebrationis)
I Note: Divorce between Filipinos is void and
Law of the place of celebration
0 ineffectual under the nationality rule. Any
settlement of property submitted as an Substantive
(lex loci celebrationis)
Exception: Marriage before the
n.
.... ,
incident of a divorce obtained in a foreign Validity of
Philippine consular and
country between Filipino spouses cannot be Marriages
marriages prohibited under
enforced. (Spouses Lavadia v. Heirs of Philippine law.
Luna. 2014)
Law of the place of celebration
(b) Between alien spouses - entitled, if valid Annulment
( (lex loci celebrationis)
I._ under their national law.
(c} Mixed marriages - entitled, even the Filipino
( spouse may seek for divorce (Republic v.
SUCCESSION
Manalo, G.R. 221029, 2018)
,.. Note: Whether the Filipino spouse initiated
Successional Rights
The national law of the decedent governs whatever
the foreign divorce proceeding or not, a
may be the nature of the property and regardless of
favorable decree dissolving the marriage
l bond and capacitating his or her alien
the country wherein said property may be found.
This includes:
spouse to remarry will have the same result:
(a) Order of succession
the Filipino spouse will effectively be without
(b) Amount of succession al rights
a husband or wife. A Filipino who initiated a
r: (c) Intrinsic validity of testamentary provisions
foreign divorce proceeding is in the same
(Civil Code, Art. 16 par. 2) and
place and in "like circumstance as a Filipino
(d) Capacity to succeed (Civil Code. Art. 1039)
who is at the receiving end of an alien
initiated proceeding. Therefore, the subject
Note: When the factual situation involves property,
provision should not make a distinction. (Id.)
there must be an initial characterization of property.
BUT, J. Perlas-Bernabe joined the dissent of
As a rule, lex rei sitae shall initially govern. Intrinsic
I • J. Caguioa.
validity of rules on succession arises only when the
lex rei sitae characterizes such property as a
How Foreign Divorce Decrees can be
descendible interest of the decedent.
J Recognized
(a) In an action instituted specifically for the
Thus. the nature and extent of the title of the
l_; purpose (e.g. special proceeding for
spouse at the time of the acquisition and the
cancellation or correction of entries in the
dissolution of the community lands must be
Civil Registry under Rule 108) (Fujil<i v.
\J Marinay, 2013) ·
determined in accordance with the lex rei sitae. In
the Philippines, upon death of the decedent, the
(b) In another action where a party invokes the
property relationship of the spouses dissolves and
J foreign decree as an integral aspect of his
the properties are to be treated as conjugal
claim or defense. (Medina v. Koike, 2016)
properties to be distributed between the estate of
,I
the decedent and the surviving spouse and not as
a descendible interest of the decedent. (Gibbs v.
Government G.R. No. L-35694, 1933)
r
\..J Whatever public policy or good customs mav be
involved in our system of legitimes, Congress. has
) not intended to extend the same to the succession

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of foreign nationals. For it has specifically chosen to (b) an.:cll/ary administrator- granted
leave, inter alia, the amount of successional rights, in lmy other jurisdiction. It is the
to the decedent's national law. (Cayetano v. ge'~eral theory that the ancillary
Leonidas, G.R. No. L-54919, 1984) administrator must ·· remit the
balance of the estate in his ·
Rul11 on Wiiis territorial Jurisdiction to the
(a) Fonnal Vatldity of Wiiis - the laws governing · · printlpal administrator.
the formal validity of wills involving a foreign
element are the following: .. .'· -~_ATE~ORY·. 1 ·.QOVERNING··LAW ,. ' ·
i. For Filipinos. In a foreign country - Order of succession
. authorized ·to· make a will in any of the Amount of
forms established by the law of the country successional rights
in which he may be (lex loci celebrationis). Intrinsic validity of National law of decedent
(Civil Code, Art. 816) testamentary
Except: Joint wills (Civil Code, Art. 819) provisions
ii. For Aliens abroad - his will produces Capacity to Succeed
effect in the Philippines if made:
Formal validity of Filipinos in a foreign country-
(a) with the formalities prescribed by the
wills law of the country in which he
law of the place in which he resides (lex may be (/ex loci celebrationis)
domicilii), or Exception: Joint wills
(b) according to the formalities observed in
Aliens abroad -
his country (/ex nationali1), or a. law of his residence (lex
( c) in conformity with those which Hie Civil domicilii)
. Code prescribes ( Civil Code, Art. 817). b. national law (lex nationalii)
Note: The formal validity of wills depends upon ..
c. Civil Code
the observance of law in force at the time it is
Revocation of wills Made by non-domiciliary outside
made. (Civil Code, Art. 795)
the Philippines -
(b) Revocation of wills
i. If made by non-domiciliary outside the
a. law of the place where the will
Philippines - validity of revocation
was made be (lex loci
depends on the: celebrationiis)
(a) law of the place where the will was b. law of the testator's domicile
made be (/ex loci celebrationiis), or at the time (lex domicilii)
(b) according to the law of the place in
which the testator had his domicile at If done in the Philippines -
the time (lex domicilii)
ii. If done In the Philippines - when it is In
Phllioolne law •
accordance with the provisions of the Civil Probate
~A--dm--in-is_tr_a-ti_o_n----~Lexrori
Code. (Civil Code, Art . .829)
(c) Probate
It is the court process of proving the validity of CONTRACTS I

the will. Hence, lex fori applies. Validity of Contracts

(d) Administration of Estate
Lex fori applies, that is, the law of the State
where appointment is sought. Accordingly,
administration extends only to the assets of the
decedent found in the State where the letters of
administration was granted.
Hence, there may be two (2) or more
administrators of an estate:
(a) principal administrator
granted to the person(s) in the
jurisdiction of the decedent's last
domicile;
1. Extrinsic Validity - lex loci celebrationis or
lex loci contractys (Civil Code, Art. 17, par.
1)
2. Intrinsic Validity - lex loci contractus or the
proper law of the contract whether:
(a) Expressed or lex voluntatis
(b) Implied from the contract or lex loci
intention is
No conflicts rule on essential validity of contracts
is expressly provided for in our laws. The rule
followed by most legal systems, however, is that
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governed by the lex contractus or "proper law of
the contract." This is the law voluntarily agreed
upon by the parties (the lex loci voluntatis) or the
law intended by them either expressly or
implicitly {the lex loci intentionis) (Phil. Export
(. and Foreign Loan Guarantee Corp. v. V.P.
Eusebio Construction Inc. G.R. No. 140047,
() 2004).
( Note: In the absence of an effective choice of
law or lex loci contractus, the law which has the
closest and most substantial connection shall
0 govern, specifically, the center-of-gravity or
grouping of contracts approach is used.
0 committed (lex loci delicti commissi).
Center-of-gravity Approach
Takes into account the various legal systems
with the contract and applies the law of the place
( where the transaction has its center of gravity or
the most important connection.
,, Example: Details of performance, e.g. the rules
l.
on manner of demand, days of grace, notice of
dishonored, should be governed by the law of
the place where the contract is to be performed.
Capacity to Contract
Lex nationa/ii (Civil Code, Art. 16 par. 1)
Choice of Forum or Jurisdiction
1 . Where the relationship between the parties is
.)
affected with public interest and multiple and
,.... substantive contacts of the · contract are with
Philippine Law, Philippine courts and agencies
, . may not be ousted of their jurisdiction. (Pakistan
J International Airlines v. Opie, G.R. No. 61594,
1990)
) incorporation
Choice of Seat of Arbitration
. ' The parties are free to agree on the ~lace of
arbitration. (Alternative Dispute Resolution Act,
Sec. 30)
0 1998)
,' Note: Courts of the forum will not enforce any
v foreign claim obnoxious to the forum's public
policy. Here in the Philippines, employment
I
J agreements are more than contractual in nature.
(Triple Eight Integrated Services v. NLRC, G.R.
No. 129584, 1998)
c
0 •
,...,
' i
u
e
..
C;AJ,EGOR;( . pOVt:RNIN~ LAW . · · :
Extrinsic Lex loci celebrationis or lex loci
validity contractus
Intrinsic Lex contractus or the proper
validity law of the contract whether:
a. Express (lex voluntatis)
b. Implied (lex loci intentionis)
Capaci_!y National law
TORTS AND CRIMES
Tort
The nature and extent of tort liability is governed by
the law of the place where the wrong was
Obligation Theory
The tort committed anywhere in the world gives rise
to an obligation which follows the defendant
wherever he may be found.
Modern Theories in Tort Liability
{a) Doctrine of Elective Concurrence - either
the laws of the state where the actor
engaged in his conduct and where the injury
was incurred may be invoked.
(b} Theory of Most Significant Relationship -
the applicable law shall be the law of the
country which' has the most significant
relationship to the situation.
In determining the state which has the most
significant relationship, the. following points
of contact are to be taken lnto account:
1. place where the injury occurred
2. place of _£onduct causing the injury
3. domicile, residence, nationality place of
and place of business of
the parties
4. place where the injury occurred (Saudi
Arabian Airlines v. CA, G.R. No. 122191,
Note: This theory is adopted by the SC.
(c) State-interest Analysis - this principle
provides for the following methodology:
i. Separate false or spurious conflicts (i.e.
only one State has an interest in
applying its tort law) - apply the law of
such interested State.
ii. If there is a true conflict (i.e. more than
one State has interest) - apply the law
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of such State which has greater interest Note: The Philippine conflict rule on criminal liability
in upholding its tort law. follows territoriality principle with a mixture of
protective principle (RPG, Art. 2).
(d) Caver's Principle of Preference - where a
State does not have a statutory question of V. RECOGNITION AND ENFORCEMENT OF
tort liability in conflict cases, the following FOREIGN JUDGMENT
guidelines may be used.
i. The State of Injury sets a higher standard Distinction Between Recognition and
for protection against the injury compared Enforcement
to the State of conduct - the laws of the .' · . ·;:.. RECOGNITION
. . .. ·. ·. .· ENFORCEMENT
.
State of Injury applies When foreign judgment is given When, in addition
ii. The State of .Conduct and Injury sets. a a res judicata effect that is has to the foreign
lower standard than the home State of the in the State where it was judgment being
injured person - the laws of the State of rendered recognized, a
Conduct and Injuryapplies party is given
iii. The State of Conduct has established Examples: affirmative relief
special controls over conduct of the kind in 1. Declaratory judgment to which the
which the defendant was engaged when 2. Judgment without Judgment entitles
caused the injury - the benefits of the laws affirmative relief, e.g. him.
of the State of Conduct should be dismissal of complaint;
accorded to plaintiff; 3. Judgment which
iv. The State in which a Relationship has its determines parties
Seat has imposed a standard of conduct interest in a thing or
on one party to that relationship 'for the status (quasi in rem
benefit of the other party which is higher , action}, e.g. divorce,
compared to that of the State of injury - the adoption, quieting of
laws of the seat of the relationship applies title.

Conditions Requisites for Recognition or Enforcement of

1. The tort is not penal in character
2. The enforcement of the tortious liability will not
contravene the enforcing State's public policy
3. The enforcing State's judicial machinery is
adequate for such enforcement
Crimes
Principles of criminal liability
(a) Territorial Principle - crimes are punishable
by the State in whose territory they are
committed. · obtained allows recognition or enforcement of
(b) Nationality Principle - a State has power to
enact criminal laws which apply even to
violations committed thereof by its citizens in
other States.
(c) Protective Principle - determines jurisdiction
by reference to the national interest injured by
the offense.
(d) Universality Principle determines
jurisdiction by reference to the custody of the
person committing the offense.
(e) Passive Personality Principle - determines
jurisdiction by reference to the nationality or
the national character injured by the offense.
Foreign Judgment
1. Foreign judgment was rendered by a judicial or
quasi-judicial tribunal which has jurisdiction
over the parties and the case in the proper
judicial proceedings;
2. The judqment must be valid under the laws of
the court that rendered it;
3. The judgment must be final and executory to •
constitute res judicata in another action;
4. The State where the foreign judgment was
Philippine judgments (reciprocity requirement);
5. The judgment must specify the performance or
delivery (e.g. in a suit for collection of money,
the award must be a fixed sum)
6. The judgment must not be contrary to the
public policy or good morals of the country
where it is sought to be enforced;
7. The judgment must not have been obtained by
fraud, collusion, mistake of fact or law.
Note: The fraud available against a foreign a
judgment is extrinsic fraud.

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Degreeof Conclusiveness of Judgment
1. Judgment in Rem - conclusive upon the title of
the thing
2. Judgment in Personam - presumptive
evidence of a right as between the parties and
r> their successors in interest by a subsequent
u title. (Rules of Court, Rule 39, Sec. 48)
(a) The §ubject matter of the difference is not
capable of s~ttlement by arbitration under ·
the law of that country; or
(b) The recognition or enforcement of the
award would, be contrary to the fubllc
policy of that country (New York Convention
on the Recognition and Enforcement of
Foreign Arbitral Awards, Article V).

Grounds to Repel Foreign Arbitral Award

Philippine conflict rules on foreign judgments follow --- end of topic ---
the Anglo-American system of limited or qualified
r ... recognition, to wit:
'
........:
The judgment or final order of foreign country
may be repelled by evidence of: (JN-C-FM)
1. Want of Jurisdiction,
2. Want of Notice to the party,
3. £ollusion,
4. fraud, or
(' <..
5. Clear Mistake of law or fact. (Rules of
Court, Rule 39, Sec. 48)

Grounds for Refusal of Recognition and

Enforcement of an Award (ln2-NU-DICS)
At the request of the ~ against whom it is
r: invoked:
-·· -~ (a) Incapacity of the parties to the agreement;
(b) !Qvalldlty of the agreement under the law to
which the parties have submitted it to or
under the law of the country where the
award was made;
\'
(c) Party against whom the award was invoked
was not given proper f:!otice of the
appointment of the arbitrator or of the
arbitration proceedings;
_; (d) Party against whom the award is invoked
was Unable to present his case;
,
' . .J
' (e) Award deals with a Difference not
contemplated within the terms of the
submission to arbitration;
(f) Composition of the arbitral authority or the
arbitral procedure was not in accordance
with the agreement of the parties or with the
/ 't
law of the country where the agreement
; took place;
(g) Award has not yet become binding on the
parties or has been .§.et aside or suspended
by a competent authority of the country in
\
-..,J
: which that award was made.

Based on the finding of the competent authority

in the country where recognition and
enforcement is sought

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C. HUMAN RELATIONS (ARTICLES with Art. 21 of the NCC. (Wassmer v. Velez,

. 19-22) G.R. No. L-20089, 1964)

Unjust Enrichment I Accion in rem verso (Art.

Principle of Abuse of Rights (Art. 19)
22)
One's right is exercised for the purpose of
Action for recovery of what has been paid
prejudicing or injuring another.
without just cause
Requisites/Elements:
Conditions for Unjust Enrichment to Arise
1. There is i3 legal right or duty
First, a person must have been benefited without
2. Which is exercised in bad faith a real or valid basis or justification. Second, the
3. For the sole intent of prejudicing or injuring
benefit was derived at another person's expense
another. (Sps. Andrada v. Pilhino Sales
or damage (ART. 22 and Loria v. Munoz, G.R.
Corporation, G.R. No. 156448, 2011)
187240, 2014).
Standards to Observe in the Exercise of
Requisites (EWLN)
One's Rights or Performance of Duty:
1. Defendant had been E_nriched.
1. Act with justice ·
2. Plaintiff suffered a Loss.
2. Give everyone his due
3. Unjust enrichment-of defendant is Without
3. Observe honesty and good faith.
just or legal ground.
4. Plaintiff has No other action based on
Acts Contrary to Law (Art. 20)
contract, quasi-contract, crime, or quasi-
Every person who, contrary to law, willfully or ..
delict.
negligently causes damage to another, shall
indemnify the latter for the same.
Note: Mistake is an essential element in solutio
indebiti but not in accion in rem verso.
Acts Contra Bonas Mores (Art. 21)
When persons wilfully cause loss or in_iury to
Duty to Indemnify One for Damage to
another.
Property
When defendant was benefitted even if not due
Elements:
to fault or negligenc'e. (Art. 23)
1. There is an act which is legal. !~
2. But contrary to morals, good customs, public
Duty of Courts to Protect a Party in a
order, or public policy.
Contract ·
3. Done with intent to injure. •
When such party is at a disadvantage on
account of his: (MlglMenTO)
No~: • (a) Moral dependence
• Similarities: In Arts. 19-21, at the core is
(b) !gnorance
bad faith or malice and the aggrieved party
(c) !ndigence
must be indemnified.
(d) Mental weakness
• Differences: Under Arts. 19 & 21, the act (e) render age
must be done intentionally. Art. 20, (f) Qther handicap (Art. 24)
however, does not distinguish (the act may
be done either willfully or negligently, as Thoughtless Extravagance (Art. 25)
long as the act is be contrary to law). May be stopped by order of courts if the
following requisites are present:
Actions for Breach of Promise to Marry
1. During an acute public want or emergency;
General Rufe: Breach of promise to marry is not
and
actionable.
2. Person seeking to stop it is the government
Exception: When one party has already made
or a private charitable institution.
real efforts to prepare and spend for the
wedding. Such act is unjustifiably contrary to
good customs for which the defendant must be
held answerable for damages in accordance

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Rights to Personal Dignity and Privacy (Art. place of birth, physical defect, or other
26) personalcondition
Every person shall respect the · dignity,
personality.privacy and peace of mind of others. Relief Against Public Officials (Art. 26)
When one suffers material or moral loss
The following acts produce a cause of action for because a public officer fails without cause to
damages, preventionand other relief: (PMIV) perform his duty, the officer is not protected by
i. frying into the privacy of another's his office and is personallyliable.
r
I. residence
Note: It includes "any act of intrusion into. Unfair Competition through Unjust,
r:
.. ..' peeping or peering inquisitively into the Oppressive, or Highhanded Methods (Art. 28)
residence of another without the consent of Article 28 does not prohibit competition with
C~: the latter." It may extend to places where he
has the right to exclude the public or deny
regard to enterprises. What it seeks to be
prevented is not competition per se but the use
them access. It covers places, locations, or of unjust, oppressive or highhanded methods
even situations which an individual which may deprive others of a fair chance to
considers as private such as a business engage In business or earn a llvlng (Wlllaware
office located within his residence. (Spouses Products Corp. v. J.esichrls Manufacturing Corp.,
Hing v. Choachuy, Sr., G.R. No. 179736, G.R. No. 195549, 2014).
•'
l
•. 2013).
ii. Meddling with or disturbing the private life or
family relationsof another --- end of topic ---
iii. !ntriguing to cause another to be alienated
from friends
.......
iv. yexing or humiliating another on account of
his religious beliefs, lowly station in life,

f. 'I
<)

( .. '

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I II. PERSONS AND FAMIL y RELATIONS I 1.

2.
General provisions
Donations by reason of marriage
3. Absolute Community of Property
TOPIC OUJLINE UNDER THE SYLLABUS: 4. Conjugal P11rtnor11hlp of @1iR1
5. Sepatatlofl of property and
II •. PERSONS AND FAMIL V REAL TIONs·
administration of common property by
A. PERSONS
one spouse during the marriage
1. Civil personality
6. Regim~ of separation of property
2. Use of surnames
7. Property regime of unions without
3. Entries in the Civil Registry and
marria~j'e
Clerical Error Law (RA 9048, as ·,
amended)
Exclude:
4. Absence·
1. Summary Judicial Proceedings in
a. Civil code provisions
Family Law Cases
b. Presumptive death of absent
spouse under the Family
F. FAMILY HOME
Code
G. PATERNITY AND FILIATION
B. MARRIAGE
1. Legitimate children
1. Requisites of marriage
2. Proof of filiation
2. Exemption from license requirement
3. Illegitimate children
3. Marriages solemnized abroad and
4. Legitimated children
foreign divorce
4. Void and voidable marriages
Exclude:
1. A.M. No. 06-11-5-SC or the Rule on
Exclude:
DNA Evidence
1. P.O. No. 1083 (Code of Muslim 2. Care · and Education of Children
Personal Laws of the Philippines)
(Articles 356-363, Civil Code)
2. Duties of a Civil Registrar under
Articles 12-19, 23-25 (Family Code)
H. ADOPTION
3. A.M. No. 02-11-10-SC on the Rule on 1. Domestic adoption (RA 8552)
Declaration of Absolute Nullity of Void a. Who may adopt
Marriages and Annulment of Voidable b. Who may be adopted
Marriages c. Rights of an adopted child
4. R.A. No. 6955. ("An Act to Declare (include Art. 189-190, Family
Unlawful the Practice of Matching Code)
Filipino Women for Marriage to d. Instances and effects of
Foreign Nationals on a Mail Order rescission
Basis and Other Similar Practices
xxx") and R.A. No. 9208 (Anti-
Trafficking in Persons Act of 2003)
Exclude: •
a. A.M. No. 02·6-02-SC on Rule
on Adoption .
C. LEGAL SEPARATION b. R.A. No. 9523 (" An Act
Exclude: Requiring Certification of the
1. A.M. No. 02-11-11-SC on the Rule on Department of Social Welfare
Legal Separation and Development to Declare
a 'Child Legally Available for
0. RIGHTS AND OBLIGATIONS BETWEEN Adoption' as a Prerequisite
HUSBAND AND WIFE for Adoption Proceedings
Exclude: xxx")
1. R.A. No. 7192 (Women in
I,
Development and Nation Building
2. lnter-Country Adoption Act (RA 8043,
Act); R.A. No.8187 (Paternity Leave
as amen'ded)
Act of 1996); R.A. No. 9710 (The
a. When allowed
Magna Carta of Women)
b. Who may adopt
c. Who may be adopted
E. PROPERTY RELATIONS OF THE
SPOUSES

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C)
Exclude: A.PERSONS
1. Articles 183-188, 191-193, Family
\ ' Code
,-,
I. SUPPORT

J. PARENTAL AUTHORITY Fitness to be the Power to do acts with

subject of legal legal effect
Exclude: relations
1. A.M. No. 03-02-05-SC on Rule on Passive Active
Guardianship of Minors Inherent Merely acquired
2. (b) A.M. No. 03-04-04-SC on Rules on Lost only through Lost through death
Custody of Minors and Writ of Habeas death and other causes
Corpus in Relation to Custody of Can exist without Cannot exist without
Minors
c, 3. (c) R.A. No. 8972 (Solo Parents'
Welfare Act of 2000)
capacit to act
Cannot be limited or
lurldical ca acit
Can be restricted,
restricted modified, or limited
4. (d) R.A. No. 8980 (The Early
r Childhood Care and Development
Act) Restrictions on capacity to act (MlnD - ICIP).
c (e) R.A. No. 9231 ("An Act Providing
for the Elimination of the Worst Forms
(a) Minority
(b) Insanity
of Child Labor and Affording Stronger (c) State of being Qeaf-mute
Protection for the Working Child xxx," (d) [mbecility
,.-, which is covered under Labor Law) (e) £ivil [nterdlction
\... (f) e,rodigallty - state of squandering money or
r: K. EMANCIPATION (Arts. 234 and 236, property with a morbid desire to prejudice
Family Code, as amended by R.A. No. the heirs of a person (Martinez v. Martinez,
6809 which towered the age of majority) G.R. No. 445, 1902)
L. RETROACTIVITY OF THE FAMILY NOTE: But these do not exempt the
CODE (Art. 256) incapacitated person from certain obligations

Exclude:
Circumstances that Modify or Limit Capacity
.. 1. Arts. 254-255, 257, Family Code
to Act (FAT·DA·PAPIII)
(a) family relations
(b) ~lienage
(c) Irusteeship
,..)' (d) Qeaf-muteness
(e) Age
,' (f) p_enalty
..... (g) ~bsence
(h) frodigality
(i) [nsanity
(j) [nsolvency
,, I
(k) Imbecility (Art. 39)

1. CIVIL PERSONALITY

Civil Personality - the aptitude of being the

subject, active or passive. of rights and
(_., obligations.
Natural Persons: When Personality Begins
and Ends Civil Personality (Art. 40-43)
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• General Rule: Determined by birth;

extinguished by death but commences from When Personality Begins and Ends for
conception. (P.O. 603) Juridical Persons
• Exception: The conceived child shall be i. Created by the laws creating or recognizing
considered born for all purposes favorable to them
it, provided it be born later under the ii. Private corporations are governed by the
following conditions: Corp. Code (B.P. 68); and
I. If It had an Intra-uterine life of 7 months iii. Partnerships and associations are
or more, It Is alive at the time It Is governed by the provisions of the New Civil
completely delivered from the mother's Code on . partnerships, except those
womb. registered with the SEC which should be
ii. If it had an intra-uterine life of less than 7 governed like corporations
months, only if it lives for at least 24 hours Extinguishment: by termination of existence
after its complete delivery from the either through law, dissolution or expiration of
maternal womb. corporate life.

Rules on Survivorship Rights of a Juridical Person

The Civil Code is used in determining
survivorship when there is an absence of proof
as to who died ahead of the other (A,t. 43). If
there is doubt, as between two or more persons
who are called to succeed each other, as to ·
which of them died first, whoever alleges the
death of one prior to the other, shall prove the
same; in the absence of proof, it is presumed
that they died at the same time and there shall ...
be no transmission of rights from one to the
other. {Id.)
(a) Acquire and possess property of all kinds
(b) Incur obligations
(c) Bring civil or criminal actions
Place of Domicile (Arts. 50-51)
• For natural P.,nsons, it is the place of
habitual residence based on intention.
• For juridical persons, it is where their legal
representation is established or where they
exercise their principal functions (when the ·
law creating them does not fix the domicile).

• Doubt as to order of death between two A minor follows the domicile of his parents.
or more persons called to succeed each • Domicile of origin can only be lost when a
other - No presumption: whoever alleges change of domicile occurs.
the death of one prior to the other shall • If the child is illegitimate, the domicile of the
prove the same. mother is followed.
• In the absence of proof, it is presumed that • The husband and the wife shall fix the family
they died at the same time and there shall domicile. In case of disagreement, the court
be no transmission of rights from one to the shall decide.
other. •
i. This rule applies only to cases involving
succession between two persons. Requirements for the Acquisition of New
Domicile:
Citizenship: In the Philippine jurisdiction, what 1. Bodily presence in a new locality
is tollowed is the concept of jus sanguinis 2. Intention to remain therein (animus
( citizenship by blood) as opposed to jus soli manend1)
( citizenship by place of birth). 3. Intention to abandon the old domlclle
(animus non revertend1)

Juridical Persons: Civil Personality {Art. 44- · Kinds of Domicile

47) (a) Domicile of origin - received by a person at
(a) The State and its political subdivisions ~~ .

(b) Other corporations, institutions, and entities (b) Domicile of choice - the place freely
for public interest or purpose, created by law chosen by a person sui juris
(c) Corporations, partnerships, and associations
for private interest or purpose

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n 2. USE OF SURNAMES
. (
I .·. .. :,. '. :.. . .. . . CHILD C'C)NCERNE.D
. . ... . . . . t ••• •
.. . ,S'URNAME TO'BE USED·
. ,, .. . ..
1r Legitimate child Father's surname
Legitimated child Father's surname
r, Adopted child
Illegitimate child
Adoeter's surname
1. Mother's surname;
() or
2. Father's name if they were recognized by their
father in the record of birth or in an authentic writinq
l~ Conceived orior to the annulment of the marriace Father's surname
Conceived after the annulment of the rnarriaoe Mother's surname
n
'.,
':'-:' • ..... ~ :. . . WIFE . . :· .. I : . • • ...... SURNAME·TQ BE USED . . : . .
Valid marriage Husband is living 1. First name and maiden name + her husband's
(Art. 370) surname
2. First name + her husband's surname
3. Her husband's full name, but prefixing a word
( indicating that she is his wife, such as "Mrs"
4. Retain the use of her maiden name (use of
r husband's surname is not a duty but merely an
option of the wife
Husband is dead She can use the surname of the husband as if he
(Art. 373) were still living

Marriage is annuf/ed Wife is the She shall resume usin her maiden name
(Art.371) 1. Resume using her maiden name; or
2. Continue employing her husband's surname
UNLESS:
a. Court decrees otherwise, or
b. She or the former husband is married
a ain to another erson
Legafly separated (Art.372)

Between persons (Art. 374) Younger person is obliged to use such additional name OR
surname as will avoid confusion
Between ascendants and descendants • Son may use the word "Junior"
I (Arl. 375)
• Grandsons and other male descendants, shall either:
o Add a middle name
J o Add the mother's surname
o Add the Roman numerals II, Ill, and so on
.' I
Article 176 of the Family Code provides that illegitimate children shall use the surname and shall be under
J the parental authority of their mother, and shall be entitled to support in conformity with this Code.
However, illegitimate children may use the surname of their father if their filiation has been expressly
recognized by the father through the record of birth appearing in the civil register, or when an admission
in a public document or private handwritten instrument is made by the father. Provided, the father has the
right to institute an action before the regular courts to prove non-filiation during his lifetime. The legitime of
each illegitimate child shall consist of one-half of the legitime of a legitimate child. (As amended by R.A.
No. 9225)

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,.
3. ABSENCE
When Administration Shall Cease
Persons Who May Be Appointed By Way Of 1. Absentee appears personally or by means
Court Order as The Representative of An of an agent;
Absentee In Case of Provisional Absence or 2. Death of the absentee is proved and his
As An Administrator estate or intestate heirs appear;
• If no legal separation, the spouse present 3. A third person appears, showing by a proper
• If no spouse or if the spouse present is a document that he has acquired the
minor, any competent person absentee's property by purchase or other
The spouse who is appointed· as title.
administratrix of the absentee spouse's The property shall be at the disposal
property cannot alienate or encumber the of those who may have a right
same, or that of the conjugal partnership, thereto.
without judicial authority.

, ..... ·.s:rAGes· . : · .. : WHEN TO F.ILE' .. WHO MAY Flll;J · . ~ .. ···~EMEDY · · .' ' COMMJ:NTS ..
Provisional
Absence
A person
disappears from his In provisional
a. Receivership (Art.
domicile, absence, the judge at
12)
the instance of an
whereabouts are b. Judicial separation
No statutory period a. lnterested party interested party, a
unknown and of property (Art. 12)
b. Relative relative, or a friend
a. He did not c. Authority to be sole
c. Friend may appoint a
leave any administrator of the
person to represent
agent; or conjugal partnership
him in all that may be
b. He left an (Art.12)
necessary.
agent but
agent's power
has expired
Judicial Without • Spouse a. When the spouse of Judicial declaration of
Declaration of administrator: after 2 • Voluntary heirs the absentee is asking absence does not
Absence years having elapsed • Intestate heirs for separation of take effect until six
Necessary for without any news • Those who property (Art. 135) months after its
interested persons about the absentee may have over b. When the spouse of publication in a •
to be able to or since the last the property of the absentee is asking newspaper of general
protect the interest news the absentee the Court that the circulation. .
of the absentee With administrator: some right administration of all
after 5 years from subordinated classes in the
time of to the marriage be
disappearance condition of transferred to her
the absentee's (Art.142)
death

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Presumption of death Spouse Action to declare a Except for purposes
ORDINARY ABSENCE person presumptively of remarriage, there
• 4 years 7 person presumed dead for dead is proper only is no need for filing a
purposes of remarriage of the spouse when the spouse of the case to declare that
present absentee wants to one is presumptively

n • 7 years 7 presumed dead for all

purposes EXCEPT for those of
remarry dead. Presumption of
death takes effect by
succession operation of law.
{".
.. J • 1 O years 7 person presumed dead for
purposes of opening succession
.() EXCEPT if he disappeared after the age of
75, an absence of 5 years is sufficient

EXTRAORDINARY ABSENCE
a. If a person rode an airplane or sea
vessel lost in the course of voyage,
from the time of loss of the airplane
or sea vessel
b. If a person joined the armed forces
who has taken part in war, from the
time he is considered missing in
action
c. Danger of death under other
circumstances, from time of
.;
disappearance ...
,.,. .
1 . 4 years 7 for all purposes including
'. those of opening succession
2. 2 years 7 for purposes of remarriage

A declaration of absence of a missing person take effect 6 months after the publication of the declaration
of absence. (Art. 386)

--- end of topic ---

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B. MARRIAGE
Definition of Marriage
1. Special contract
2. Permanent union
3. Between a man and a woman
4. Entered into in accordance with law
5. For the establishment of conjugal and
family life (Art. 1)
1. REQUISITES OF MARRIAGE
Essential Requisites of Marriage: (LCI) (Art. 3)
1. ,begal capacity of contracting parties
a. Must be between a man and woman
b. Must be at least 18 years old
2. Qonsent freely given, in the presence of the
solemnizing officer
3. Absence of any Impediment
Formal Requisites of Marriage: (ALC) (Art. 4)
1. Authority of solemnizing officer
2. Valid marriage ,bicense (except in cases
where a marriage license is not required)
- Valid only for 120 days from issue in any
part of the Philippines
3. Marriage £eremony where the contracting
parties appear before the solemnizing
officer, with their personal declaration that
they take each other as husband and wife in
the presence of not less than two witnesses
of legal age
2. EXEMPTION FROM LICENSE
REQUIREMENT
Effects of the Absence of Requisites for
Marriage
General Rule: Absence of any of the essential
or formal requisites - void ab initio.
Exceptions:
i. If solemnized by an unauthorized person,
the marriage will still be valid if either or both
contracting parties believed in good faith
that the solemnizing officer had legal
authority. (Art. 35[2])
ii. In instances where marriage license need
not be procured:
• Marriage in articulo mortis (one of the
parties is at the point of death). (Art. 27)
• If the residence of either party is so
located that there is no means of
transportation to enable such party to
CIVIL LAW
appear personally before the civil
registrar. (Art. 28)
• Marriage solemnized outside the
Philippines where no marriage license is
required by the country where it was
solemnized. (Art. 26)
• Marriage ~mong Muslims or among
members Qf ethnic cultural communities
in accordance with their customs. (Art.
33) I
• Marriage between persons who have
lived together as husband and wife for at
least five (5) years and without any legal
impediment to marry each other during
the 5-year period of cohabitation. (Art.
34)
Procedural Requirements:
1. The parties must execute an affidavit
stating that they have lived together for at
least five (5) years (and are without legal
impediment to marry each other).
2. The solemnizing officer must execute a
sworn statement, that he .had ascertained
the qualifications of the parties and that he
had found no legal impediment to their
marriage.
NOTE: Absence of any of these procedural
requirements do not make the marriage void.
What is indispensable is the five-year •
cohabitation as husband and wife.
The 5-year period should be a period of
cohabitation characterized by exclusivity -
meaning no third party was involved at any time
- that is, unbroken. (Nina/ v. Bayadog, G.R. No.
133778, 2000)
The absence of the legal impediment must be
throughout the 5-year period. ( Office of the
Administrator v. Necessario, A.M. No. MTJ-07-
1691. 2013)
':'s a .solemnizing officer, the judge's only duty
involving the affidavit of cohabitation is to
examine whether the parties have indeed lived
together for at least five years without legal
impediment to marry. The Guidelines on the
Solemnization of M~rriage by the Members of
the Judiciary does riot state that the judge can
notarize the parfles' affidavit of cohabitation.
(Tupa/ v. Rojo, A.M. No. MTJ-14-1842, 2014)
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Defects in the Requisites for Marriage (Art.4)

• Defect in any of the essential requisites -
. . - ..
. . ;flTl;IE,R ~~ BQTH ., I REQUIRES.·, : .
voidable ·• . · : ·~A~TIES · ,. · · · .. o ·,:•.,,. 'I, I!

L •
• Irregularity in any of the formal requisites 18 years old and Parental consent
- does not affect the validity of the marriage above but below 21
!I ()~ but will make the party responsible civilly,
criminally, or administratively liable
21 years old and
above but below 25
I (\
i.) Authorized solemnizing officers: (JPCCCM) Effects of Lack of Parental Consent, Parental
(Art. 7) Advice, or Marriage Counseling If Required
(; (a) Incumbent member of the Judiciary Uudge - .
· . . . · GROUND
. ·· .
. EFFECTS·· · .··
within the court's jurisdiction; Justices - Lack of parental Marriage is voidable
within Phil. territory) consent
(b) Duly authorized f.riest, rabbi, imam or the Lack of parental No effect on validity of
(; minister of any church or religious sect advice or failure to marriage. However, this
-, J
(c) Ship faptain or airplane chief, only in attach certificate of will suspend the
r, articulo mortis between passengers or crew marriage issuance of the
I members while the ship is at sea or the counseling marriage license for 3
plane is in flight and also during stopover at months from the
ports of call completion of publication
(d) Military fommander of a unit to which a of the application. (Art.
chaplain is assigned, only in articulo mortis 16)
between persons within the zone of military
operations whether members of the armed If they get married during
forces or civilians and only in the absence the 3-month period
of the chaplain without a license, the
(e) Consul-general, consul, or vice-consul, only marriage shall be void
when contracting parties are both Filipinos for lack of a formal
abroad requirement.
(f) Mayor (LGC of 1991); in case the mayor is
temporarily incapacitated to discharge his If able to obtain a license
duties, the vice-mayor during the 3-month
period, the marriage will
Venues for Marriage (Art.BJ still be valid but civil and
r· General Rule: Must be solemnized publicly, and criminal liability may
., not elsewhere, in the: attach. (Art. 16)
(a) Chambers of the judge or in open court
'" I
(b) Church. chapel, or office of consul-general, No marriage license will
consul, or vice-consul be issued in the absence
I of Certificate of
Exceptions: Compliance issued by
i. Marriage at the point of death (in enicuto the Family Planning
mortis) · Office. (R.A. 10354, Sec.
f ' ii. Marriage in remote places 15)
iii. Marriage at a house or place designated by
the parties in a sworn statement upon their Non-Essential Requirements
written request to the solemnizing officer
I ) Marriage Certificate
«» While a marriage certificate is considered the
I
primary evidence of a marital union. it is not
"--· regarded as the sole and exclusive evidence of
marriage. The fact of marriage may be proven
by relevant evidence other than the marriage
certificate. Hence, even a person's birth
certificate may be recognized as competent •

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evidence of the marriage between his parents. Foreign Divorce . .

(Anonuevo v. Int. Estate of Jalandoni, G.R. No. Requisites for a Filipino spouse to gam_ capacity
178221, 2010) to remarry under Philippine law after divorce by
foreigner-spouse (Art. 26, par. 2):.
3. MARRIAGES SOLEMNIZED
1. A valid marriage that had been celebrated
ABROAD AND FOREIGN DIVORCE
between a Filipino citizen and a foreigner
2. A valid divorce subsequently obtained
Marriages Solemnized Abroad (Art. 26, par.1)
abroad by the alien spouse capacitating him
or her to remarry
General Rule: Marriages solemnized outside
the Philippines in accordance ~ith the laws o~
Art. 26, par. 2 only requires that there be a
· the foreign country shall be valid here (lex Joe,
divorce validly obtained abroad. The letter of the
ce/ebrationis)
law does not demand that the alien spouse
• Basis: Principle of comity
should be the one who initiated the proceeding
• However, if solemnized inside the
wherein the divorce decree was granted. It does
Philippine Consulate abroad, Philippine
not distinguish whether the Filipino spouse is the
laws must be observed.
petitioner or the respondent in ~he f?reign
divorce proceeding. Thus, a, foreign divorce
Exceptions to Lex Loci Celebratfo"nis:
secured by a Filipino is also considered valid in
i. Where either or both parties are below 18
the Philippines, even if it is the Filipino spouse
years old
who files for divorce abroad. (Republic v.
ii. Bigamous or polygamous marriage {except
Manalo, G.R. No. 221029, 2018).
Art. 41 on presumptive death of spouse)
iii. Mistake in identity
An action based on Art. 26, par. 2 is not limited
iv. Marriage void under Art. 53 - contracted
to the recognition of the foreign divorce decree.
following the annulment or declaration of
If the court finds that the decree capacitated the
nullity of a previous marriage but before
alien spouse to remarry, the courts can declare
recording of partition
that the Filipino spouse is likewise capacitated to
v. Psychological incapacity
contract another rilarriage. No court in this
vi. Incestuous marriage
jurisdiction, however, can make a similar
vii. Marriage void for reasons of public policy
declaration for the qlien spouse (other than that
already establlshed by the decree), whose
Thus, what is dispensed with is merely the
status and legal capacity are governed by his
authority of the solemnizing officer and the
national law. (Corpuz v. Sto. Tomas, G.R. No.
marriage license requirements.
186571, 2010)
•
Is the "marriage ceremony" requirement
A foreign divorce validly obtained abroad but
dispensed with, thus allowing common-law
which was not proven in a Philippine court
marriages? - No, Art. 26 of the Family Code
cannot be recognized here. The foreign
uses the word "solemnized". However, if
judgment and its authenticity must be proven as
solemnized abroad, the ceremony prescribed in
facts under our rules on evidence, together with
the place of celebration shall apply.
the alien's applicable national law to show the
effect of the judgment on the alien himself or
herself. (Noveras v. Noveras, G.R. No. 188289,
2014)

A divorce obtained abroad by an alien may be

recognized in the Philippines, provided the
decree is valid according to the national law of
the foreigner. The presentation of the foreign
divorce decree alone is insufficient. Both the
divorce decree and the governing personal law
of the alien spouse who obtained the divorce

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must be proven. (Ando v. DFA, G.R. 195432,
2014 citing Garcia v. Recio, 418 Phil. 723 (2001)
A decree nisi is a conditional or provisional
judgment of divorce. It has the same effect as a
I
,- . ~
separation from bed and board, although an
i absolute divorce may follow after the lapse of
the prescribed period during which no
reconciliation is effected. It does not absolutely
establish that a foreigner is capacitated to
remarry according to his national law. (Garcia v.
Recio, 2001)
I"'\
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4. VOID AND VOIDABLE MARRIAGES
Void Marriages
('
;
A. Void Ab lnltlo under Art. 35
i. Contracted by any party below 18 years
old
ii. Solemnized by unauthorized solemnizing
officer
• Exception: if either or both parties
believed in good faith that the officer
had authority
,, iii. Solemnized without a marriage license -
'. • Exception: When license not required
A petition to declare the marriage void due to
absence of marriage license, filed after the court
denied a petition to declare the marriage void
due to psychological incapacity, is barred by res
judicata. There is only one cause of action
\.)
which Is the nullity of marriage. Petitioner is
estopped from asserting that the first marriage
had no marriage license because he impliedly
admitted the same when he did not question the
absence of a marriage license in the first case.
(Ma/lion v. Alcantara, G.R. No. 141528, 2006)
A certification-of-no-marriage license by the local
civil registrar stating that there was not enough
staff to search for the marriage license is not
adequate and will not prove absence of a
marriage license. The certification, in fact,
proves that no diligent search was made.
l ,,,
(Sevilla vs. Cardenas, G.R. No. 167684, 2006)
A Certification of the Civil Registrar to the effect
that "after a diligent search on the files of
Registry Book on Application for Marriage
License and License Issuance available in this
office, no record could be found on the alleged
issuance of this office of Marriage License No.
XXXXX in favor of Mr. A and B <;lated XXXX"
CJ
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r.
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l :
CIVIL LAW
does not categorically prove that there was no
marriage license. Furthermore, marriages are
not dissolved through mere certifications by the
civil registrar. It will be wrong to establish a
doctrine that a certification that a marriage
license cannot be found may substitute for a
definite statement that no such license existed or
was issued. (Vitangcol v. People, G.R. No.
207406 2016)
The Certification by the Municipal Civil Registrar
that the Office of the Local Civil Registrar "has
no record nor copy~of any marriage license" ever
issued in favor of: petitioner and respondent,
coupled with respcndent's failure to produce a
copy of the allege~ marriage license or of any
evidence to show .that such license was ever
issued, proves that no valid marriage license
was, in fact, issued. (Kho v. Republic and Kho,
(G.R. No. 187462, June 01, 2016)
Non-entries or entries in a public document in
the local civil registry are prima facie evidence of
the facts therein. If, as reflected in a marriage
contract, no marriage license was procured and
if the marriage does not fall within the 5-year
cohabitation exception, the marriage license
remains a requisite. In its absence, the marriage
should therefore be void. (Salgado v. Anson,
G.R. No. 204494, 2016)
While it is clear that the second marriage was
void because petitioner cohabited with co-
accused (who had a subsisting· marriage) for
less than five years and yet they contracted
marriage without a license, petitioner is still guilty
of bigamy. She cannot use her illegal act to
escape criminal conviction. (Santiago v. People
.G.R.No.200233, 2015)
The possibility that the parties in a marriage
... might have no real intention to establish a life
together is insufficient to nullify a marriage freely
entered into in accordance with law. There is no
law declaring a marriage void if it is entered into
for purposes other than what the Constitution or
law declares, such as the acquisition of foreign
citizenship. (Republic vs. Albios, G.R. 198780t
2013)
B. Bigamous or polygamous marriages
Exception: Art. 41 - Marriage contracted by a
person whose spouse has been absent for 4 •
years ( ordinary "absence) or 2 years
11
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(extraordmary absence), where such person has
a well-founded belief that his/her absent spouse
is already dead, and had obtained a declaration
of presumptive death, and at the time of the
marriage ceremony is in good faith together with
the subsequent spouse.
For a subsequent marriage to be valid, the prior
marriage must first be dissolved either by the
death of the previous spouse, or the final judicial
declaration of nullity or annulment of the
previous marriage obtained before the
subsequent marriage is entered into, regardless
of the reason for the nullity or defect of the
previous marriage, Including lack of marriage
license. (Lasanas v. People G.R. No. 159031,
2014)
The recognition of a foreign judgment nullifying a
bigamous marriage Is not a ground for extinction
of criminal liability under the Revised Penal
Code. (Fujiki v. Marinay, 2013)
C. Mistake in Identity (Art. 35{5])
The contemplated mistake refers to the actual
physical identity. of the other party, and not
merely mistake in the name, character, age, or
other attributes of the person.
D. Subsequent Marriage Void under Art. 53
A person whose marriage has been annulled or
declared null and void may remarry as fong as,
after the marriage is annulled/ nullified, the
properties of the spouses must be partitioned
and distributed and the presumptive legitimes of
the children distributed. Furthermore, the
judgment of annulment or absolute nullity (Art.
40), the partition and distribution, and the
delivery of the presumptive legitimes must be
recorded in the appropriate civil registry and
registries of property. Failure to comply with
these requisites will make the subsequent
marriage void ab initio. Furthermore, failure to
record in the proper registries will mean that
such will not affect third persons (Arts. 52-53).
Liquidation, partition, and distribution of
presumptive legitimes apply only to marriages
declared void under Art. 40 and 45. (Dino v.
Dino, G.R. No. 178044, 2011)
CIVIL LAW
E. Void under Art •. 36
Marriage where any of the parties was, at the
time of the celebration of the marriage,
psychologically incapacitated to comply with the
essential marital obligations, even if incapacity
becomes manifest only after solemnization.
Psychological Incapacity must be judged on a
case-to-case basis. It. should refer to no less
than a mental (not physical) incapacity. It must
be characterized by: (JIG)
1. Juridical antecedence
2. [ncurablllty
3. §ravity (Carating-Siaynco v. Siaynco, G.R. ·
No. 158896, 2004)
Mere showing of irreconcilable differences and
conflicting personalities do not constitute
psychological incapacity. (Carating-Siaynco v.
Siaynco, G.R. No. 158896, 2004)
Mere sexual infidelity or perversion and
abandonment do not by themselves constitute
psychological incapacity within the
contemplation of the Family Code. (Dede/ v. CA,
G.R. No. 151867, 2004)
Psychological incapacity is characterized by its
gravity, antecedence, and incurability. The law
was intended to be limited to the most serious •
cases of personality disorders that clearly
demonstrate .an utter insensitivity or Inability to
give meaning and significance to the marriage.
Emotional immaturity and irresponsibility cannot
be equated with psychological incapacity.
(Mendoza v. Republic, G.R. No. 157649, 2012)
'
It must be shown that these acts are
manifestations of a disordered personality which
make respondent: completely unable to
discharge the essential obligations of a marital .
state. Root cause must be traceable prior to the
marriage ceremony. (Dede/ v. CA, G.R. No.
151867. 2004)
One of the essential marital obligations is "to
procreate children based on the universal
principle that procreation of children through
sexual cooperation is the basic end of marriage."
Constant non-fulfillment of this obligation will
finally destroy the integrity or wholeness of the
marriage. The senseless and protracted refusal
of one of the parties to fulfill this marital
obligation is equivalent to psychological
Page 10 of 432
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fl
incapacity. (Chi Ming Tsoi v. CA, G.R. No. obligations; it is not enough that a party prove ·
119190, 1997) that the other failed to meet the responsibility
and duty of a married person. There must be
Psychological incapacity is not equated with proof of a natal or supervening disabling factor in
' I
insanity or total mental inability to function in all the person which must be linked with the
aspects of human life. It is a ground restricted to manifestations of the psychological incapacity.
psychological incapacity "to comply with marital (Del Rosario v. Del Rosario, G.R No. 222541,
obligations." 2017).
I \I
A finding of psychological incapacity on the part A clear and understandable causation between
{ '\ of one spouse shows non-cognizance of one's the party's condition and the party's inability to
essential marital obligation, and therefore perform the essential marital covenants must be
negates bad faith. As a consequence, moral and shown. Here, the report failed to show that
(' exemplary damages cannot be awarded. Moral husband's personality disorder existed prior to
damages should be predicated on specific the marriage and failed to explain the juridical
('. ;
evidence that was done deliberately and with antecedence or its incurability. (Republic v.
malice by a party who had known of his or her Tecag, G.R No. 229272, 2018)
disability and yet willfully concealed the same.
(Buenaventura v. CA, GR No. 127358, 2005) Jurisprudential guidelines: (BRE-IGO-IC)
{ 1. ~urden of proof to show the nullity of
The burden falls upon petitioner, not just to marriage is upon the plaintiff
prove that private respondent suffers from a 2. The floot cause of the psychological
psychological disorder, but also that such incapacity must be: (CCEE)
r: psychological disorder renders her "truly a. Medically or £linically identified
' . incognitive of the basic marital covenants I.hat b. Alleged in the f omplaint
,. -
l
concomitantly must be assumed and discharged
by the parties to the marriage." (Baccay v.
c. Sufficiently proven by gxperts
d. Clearly gxplained in the decision
Baccay, GR No. 117318, 2010) 3. The incapacity must be proven to be
gxisting at the time of the celebration of the
A nullity case based on psychological incapacity marriage
against her Japanese husband is still 4. Such incapacity must be shown to be
meritorious. The norms used for determining medically or clinically permanent or
-. psychological incapacity should apply to any Incurable
person regardless of nationality. (Republic vs. · 5. Such illness must be .§_rave enough to
Hamano, G.R. No. 149498, 2004) bring about the disability of the party to
assume the essential obligations of
In Pimentel v. Pimentel (G.R. No. 172060, marriage
'..
, J 2010), the issue was whether the accused is 6. Essential marital Qbligations must be those
psychologically incapacitated to comply with the embraced by Arts. 68-71, as well as Arts.
(
~;
. essential marital obligations. It is not 220, 221, and 225 of the Family Code.
determinative of the guilt or innocence. of an 7. [nterpretations given by the National
offender in a frustrated parricide case. Thus, the Appellate Matrimonial Tribunal of the
1 action for declaration of nullity of marriage under - Catholic Church in the Philippines, while
Art. 36 is not a prejudicial question that warrants not controlling or decisive, should be given
,1 the suspension of a criminal case for frustrated great respect by our courts
parricide. 8. The trial court must order the prosecuting
(; attorney or fiscal and the Solicitor General
J. Perlas-Bernabe: Psychological incapacity to appear as founsel for the State
\, must not merely be due to a person's youth,
immaturity or sexual promiscuity. (Republic v. NOTE: The foregoing guidelines do not require
c De Gracia, G.R. No. 171557, 2014) that a physician examine the person to be
declared psychologically incapacitated. What is
J. Perlas-Bernabe: Psychological incapacity important is that the totality of evidence can
L under Art. 36 must be more than just a difficulty. adequately establish the party's psychological
refusal or neglect in the performance of marital •
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condition. (Republic v. CA & Molina, G.R. No.
108763, 1997)
"Totality of Evidence" principle means that
medical experts' testimony is not required, if the
totallty of all other evidence presented Is
sufficient to prove psychological incapacity. If
not, the testimony of experts is crucial. (Marcos
v. Marcos, G.R. 136490, 2000)
The conclusions reached by the expert
witnesses having been drawn from the case
records and affidavits should not anymore be
disputed after the RTC itself had accepted the
veracity of the factual premises. (Ka/aw v.
Fernandez, G.R. No. 166357, 2015)
Psychological incapacity may exist in one or
both parties, and if psychological incapacity of
either or both is established, the marriage is null
and void. (Ka/aw v. Fernandez, G.R. No.
166357_. 2015)
In determining if one of the contractingparties is ..
psychologically incapable, the courts should
interpret the provision on a case-to-case basis.
Courts should be guided by experience, the
findings of experts and researchers in
psychological disciplines, and by decisions of
church tribunals. (Te v. Te, G.R. No. 161793,
2009)
The recommendation that respondent should
undergo therapy does not necessarily negate
the finding that respondent's psychological
incapacity is incurable. (Camacho-Reyes v.
Reyes, G.R-No. 185286, Aug. 18, 2010)
Liquidationof properties in void marriages urider
Art. 36 is governed by Article 147 not Article
129. Article 147 states that if the marriage is
void, wages and salaries shall be owned by
them in equal shares, and the property acquired
by both of them through their work or industry
shall be governed by the rules on co-ownership.
(Barrido v. Nonato, G.R. No. 176492, 2014)
F. Void for Being Incestuous under Art. 37
Whether the relationship is legitimate or
illegitimate:
• Between ascendants and descendants of
any degree
• Between brothers and sisters, whether full or
half blood
CIVIL LAW
G. Vold for Reasons of Public Policy under
Art. 38 (exclusive list)
(a) Between collateral blood relatives up to the
4th civil degree
• There is no prohibition regarding
marriages between collateral blood
relatives by half-blood.
(b) Betweenstep-parentsand step-children
(c) Between parents-in-law and children-in-law
(But death does not terminate affinity
whether with children or not)
(d) Betweenadopting parent and adopted child
( e) Between surviving spouse of the adopter
and the adopted
(f) Between surviving spouse of the adopted
and the adopter
(g) Between adopted and a legitimate child of
adopter
(h) Betweenadopted children of same adopter
(i) Between parties where one, with the
intentionto marry the other, killed that other
person's spouse or his/her own spouse
• No prior criminal conviction by the court
Is required by the law since mere
preponderance of evidence is required
to prove the killing.
Under the new Family Code, the following can
now marry each other:
(a) Brother-in-lawand sister-in-law
(b) Stepbrotherand stepsister
(c) Guardianand ward
(d) Adopted and illegitimatechild of the adopter
( e) Parties who have been convicted of
adulteryor concubinage
•
NOTE: Relationship by affinity between the
surviving spouse and the kindred of. the
deceasedspouse continues even after the death
of the deceased spouse, regardless of whether
the marriage produced children or not. (Vda. de
Carungcong v. People, G.R. No. 181409, 2010)
lmprescriptibility of Action or Defense for
Declaration of Nullity of Marriage
A marriage that is invalid from the beginning is
non-existent.and in effect, cannot be dissolved.
The judicial decree to declare its nullity is a mere
confirmation of the voidness of the marriage,
hence this petition is imprescriptible. (Art 39)
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But since only husband or wife can file a direct
action for declaration of nullity, petition can only
be filed during their lifetime.
«>
~
Subsequent Marriage without Judicial
.( .. Declaration of Nullity of Previous Void
t Marriage
t,
\ I
For purposes of remarriage, the only legally
acceptable basis for declaring a previous
marriage an absolute nullity is a final judgment
declaring such previous marriage void; whereas,
for purposes other than remarriage, other
evidence is acceptable. (Art. 40)
If a marriage is void under a ground provided in
the Civil Code and a subsequent marriage was
contracted before the effectivity of the FC
without having the first marriage declared null
and void, the second marriage is valid. The Civil
Code contains . no express provision on the
necessity of a judicial declaration of nullity of a
marriage considered void under the Civil Code.
l . The requirement of a judicial decree of nullity
does not apply to marriages that were
celebrated before the effectivlty of the Family
Code, particularly if the children of the parties
were born while the Civil Code was in force.
(Castillo v. Castillo, G.R. No. 189607, 2016)
In a case for concubinage, the accused need not
present a final judgment declaring his marriage
void for he can adduce evidence in the criminal
f•• •
case of nullity of his marriage other than proof of
final judgment declaring his marriage void.
Hence, the pendency of the civil action for nullity
of marriage does not pose a prejudicial question
in a criminal case for concubinage. (Beltran v.
People, G.R. No. 137567, 2000)
• >
A judicial declaration of nullity is not needed
where the parties merely signed a marriage
contract on their own and no marriage ceremony
was performed by a duly authorized solemnizing
officer. The mere signing of a marriage contract
bears no semblance to a valid marriage and thus
needs no judicial declaration of nullity. (Morigo v.
People, G.R. No. 145226, 2004)
The second marriage is still bigamous even if
the first marriage is judicially declared void as
long as the first marriage ostensibly appeared to
, have transpired (as there was a marriage
l_ '
ceremony). However, if the first marriage was
void due to the fact that no marriage ceremony
(
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was solemnized at all, then the second marriage ·
is not bigamous. (Ibid.)
Even if a marriag~ is void, it must be declared
void first by final j~dgment before the parties to
such void marriage can remarry. The parties
cannot decide for themselves the invalidity of
their marriage. ·
Valid Bigamous Marriages
General Rule: Marriage contracted by any .
person during the subsistence of a previous
marriage is void. (Art. 41)
Exception: If before the celebration of the
subsequent marriage:
1. The previous spouse had been absent for 4
consecutive years (ordinary absence) or 2
years (extraordinary absence); and
2. The remaining spouse has a well-founded
belief that the absent spouse is already
dead.
Article 41 of the Family Code provides that
before a Judicial declaration of presumptive
death may be granted, the present spouse
must prove that he/she has a well-founded
belief that the absentee is dead. The well-
founded belief in the absentee's death
requires the present spouse to prove that
his/her belief was the result of diligent and
reasonable efforts to locate the absent
spouse and that based on these efforts and
inquiries, he/she believes that under the
circumstances, the absent spouse is already
dead. Mere claim of diligent search is
insufficient without corroborative evidence
such as testimonies of the persons from
whom she inquired. (Republic v. Villanueva,
G.R.No.210929. 2015)
" It must be a showing that sincere honest-to-
goodness efforts had indeed been made to
ascertain whether the absent spouse is still
alive or is already dead. Even after the non-
return of the husband who was a member of
the army and assigned to Sulu and was
thereafter not heard of anymore by the wife
for 33 years, there was still failure on the part
of said wife to actively look for her missing
husband, and her purported earnest efforts to
find him by asking her husband's parents,
relatives, and friends did not satisfy the strict
standard and degree of diligence required to •
ATENEO CENTRAL
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create a "well-founded belief of his death.
She did not approach the AFP for info. (RP v.
Tampus, G.R. No. 214243, 2016)
Judicial Declaration of Presumptive Death
• In this case, the subsequent marriage is
valid but It shall be automatically terminated
by the recording of the affidavit of
reappearance of the absent spouse. (Art.
42)
• Without filing of the affidavit of
reappearance, there will exist two valid
marriages (valid bigamous marriage).
Exception to the Exception: If both spouses
of the subsequent marriage acted in bad
faith, such marriage is void ab initio. (Art. 44)
Essential Requisites for the Declaration of
Presumptive Death under Art. 41 (MR-BF)
1. That the absent spouse has been Missing
for 4 consecutive years, or 2 consecutive
years if the disappearance occurred where
there is danger of death under the
circumstances laid down in Art. 391 of the
Civil Code;
2. That the present spouse wishes to
Remarry;
3. That the present spouse has a well-founded
~elief that the absentee is dead; and
Thal the present spouse files a summary
proceeding for the declaration of
presumptive death of the absentee.
[Republic vs Sarenogon, 2016 (citing
Republic v. Cantor, 2013))
Effect of Reappearance
The subsequent bigamous marriage under Art.
41 remains valid despite reappearance of •the
absentee spouse, unless the reappearance
made in a sworn statement is recorded in the
civil registry in the place where the parties to the
subsequent marriage resides. In such case, the
subsequent marriage is automatically
terminated.
• However, if there was a previous judgment
annulling or declaring the first marriage a
nullity, the subsequent bigamous marriage
remains valid.
Annulment of judgment of presumptive death is
the proper remedy and not an affidavit of
reappearance when the person declared
presumptively dead has never been absent. In
this case, the husband was able to secure a
CIVIL LAW
declaration of presumptive death by alleging
fraudulent facts. (Santos v. Santos, G.R. No.
187061, 2014)
Summary proceedings under the F amity Code
are final and executory pursuant to Article 247.
Hence, a summary proceeding for the declaration
of presumptive death of an absent spouse under
Article 41 of the Family Code Is non-appealable.
(Republic v. Tango, G.R. No. 161062, 2009)
However, a petition for certiorari under Rule 65
is still available, (Republic v. Sarenogon, Jr.,
2016)
Effects of Termination of Subsequent
Marriage: (LDDRI)(Art. 43)
(a) Children of the subsequent marriage
conceived prior to its termination shall be
considered ,begitimate, unless the marriage
is void ab initio due to bad faith of both
spouses of the subsequent marriage.
(b) The absolute community or conjugal
partnership shall be Dissolved and
liquidated. -
If either spouse acted in bad falth, his/her
share in the net profits shall be forfeited:
i. In favor of the common children
ii. If none, in favor of the children of the
guilty spouse by previous marriage
iii. In default of children, in favor of the
innocent spouse.
(c) Qonations by reason of the marriage remain
valid except if the donee contracted the
marriage in bad faith.
(d) The innocent spouse may Revoke the
designation of t~e spouse in bad faith as the
beneficiary in any insurance policy, even if •
designation is stipulated as irrevocable.
(e) The spouse who contracted the .subsequent
marriage in bad faith shall be disqualified to
[nherit from the Innocent spouse by testate
or intestate succession.
NOTE:
• The above effects apply to voidable
bigamous marriages.
• Except for the first enumerated item (re:
legitimate children), the above effects also .
apply to marriages which are annulled or
declared void ab initio under Art. 40.
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Voidable Marriages

Grounds for Annulment (PUFFIS) (Art. 45)

(a) Lack of farental consent
(b) Either party is of ,Ynsound mind
(c) fraudulent means of obtaining consent of
either party
• Circumstances constituting fraud (Art. 46)
() i. Non-disclosure of conviction by final
judgment of crime involving moral
(' _j
turpitude
ii. Concealment of pregnancy by another
man
iii. Concealment of sexually transmissible
( 1 disease, regardless of nature, existing at
' .
the time of marriage
iv. Concealment of drug addiction, habitual
alcoholism, homosexuality and
lesbianism
(d) force, intimidation, or undue influence in
obtaining the consent of either party
{ e) Physical !ncapabillty of either party to
consummate the marriage with the other,
and such incapacity continues and appears
to be incurable
• Doctrine of Triennial Cohabitation:
Presumption that the husband is
impotent should the wife still remain a
virgin after 3 years of living together with
her husband. Burden of proof to prove
non-impotency shifts to the husband.
(f) Affliction by either party of §.exually
Transmissible Disease found to be serious
and which appears incurable
,,·.,,,

NOTE: Grounds for annulment must exist at the

time of the celebration of the marriage .
. J

: _:·. 'ARTIG'LE 45 ARTICLE·46

\ . .i
The STD is a The STD is a type or
ground for fraud which in turn is a
annulment. ground for annulment.

The STD does The STD must be

not have to be concealed.
concealed.
\j •
The STD must The STD does not .
,· ~ be serious and have to be serious nor
v appears to be does it have to appear
incurable. incurable.

Page 15 of 432
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EFFECTS OF TERMINATION OF MARRIAGE

'": .)~RO\:ll';JDS... WHO CA_N Fl~.· .. P.R.ESCRl~TIVE'P.eRl(?,D: , , R~TIFl~A110N ·
l,1 ·,,:,··'FPR I . ! ',.. . I.:: . · ·.. I.. \', . .. I ... -, I
' ~. . '• ' ' ' ' ' • '
.I .
I
.-~NNULMENT. . ' .. ·-.
. . ' .. . . . ' ·..·. ,. . . :
a. Underage a. Within 5 years after
Lack of
party (18-21 y/o) turning 21
parental Free cohabitation after reaching 21
b. Parent or b. Before child reaches 21
consent
quardian
2 views:
a. Sempio-Diy: Before death
of other party
Sane spouse
b. Within 5 years from the
who had no Free cohabitation after insane
time the right of action
knowledge of spouse regains sanity
accrues (ie, from the time
insanity
Insanity of one of discovery of the
party insanity
I
Guardian of Anytime before the death of
insane spouse either party
During the lucid interval or
Insane spouse after regaining sanity also
before death of other party
Free cohabitation with full
Within 5 years after discovery
Fraud knowledge of facts constituting the
of fraud
fraud
Free cohabitation after the cause
Within 5 years from time (force, intimidation, undue
Vitiated force, intimidations or undue influence) disappeared or ceased.
Injured Party
consent influence disappeared or Intimidation can be on the person
ceased or the property of the injured party
and his/her immediate family
Incapability to No ratification since defect is
Within 5 years after the
consummate/ permanent, but right of action may
marriage ceremony
STD prescribe.

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r
EFFECTS OF VALID BIGAMOUS MARRIAGE, DECLARATION OF NULLITY, AND ANNULMENT

.
:·,.:BASIS··
. . . VALID. BIGAMOl,IS MARRIAGE (ART. 41.-· .... DECLARATION' .. , ANNULMENT; . -,

..
( .....
I
. I
.. ,'•

•'I'
,',,1
•
',t: 1 I
;
WITH OECLARATIQN OF flRESUMl'Tl\lf. .· :: .: OF NULLITY. :
• • ••
I
ATH ..
I
DE ' ,··.
.· ...
.. I I·.
• ;, . . . •
,' ·.I
• ·. . .
•
.
1, I • 1• ••
. .
•
. '. ·
. .
• • I
. ..
•
. ·.
I,, I I '

Children of subsequent marriage conceived Children conceived

\ I Illegitimate
Status of before its termination - legitimate or born before
except Art. 36
children annulment decree -
and Art. 53
!
I
Ci leqitimate
ACP/CPG shall be liquidated.
! (; The share in the net profits of community
property of the spouse who contracted the
I (. Property
marriage in bad faith, shall be forfeited in favor
Relations
of common children or if there are none,
... ,_
children of the guilty spouse by previous
marriage or in default, the innocent spouse.
Shall remain valid except
• If donee contracted the marriage in bad
faith, donations propter nuptias made to the
( Donations
donee are revoked by operation of law.
Propter Same Same
,' Nuptias • If both spouses acted in bad faith,
donations propter nuptias made by one in
favor of the other are revoked by operation
of law.
If one spouse acted in bad faith, innocent
spouse may revoke his designation as
Insurance
beneficiary in the insurance policy even if such
desiunation be stieulated as irrevocable.
If one spouse contracted the marriage in bad
Succession faith, he shall be disqualified to inherit from the
~- innocent seouse both testate and intestate.

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DISTINCTION BETWEEN VOID AND VOIDABLE MARRIAGES
erformance
As to susceptibility to Cannot be ratified
ratification
No community property, only co-
ownership (Art. 147/148)
As to effect on property
Children are illegitimate
Exceptions:
As to effect on children • In case of psychological
incapacity (Art. 36)
• Children born of subsequent
marria e Art. 53
• May be attacked directly or
collaterally but for purpose of
remarriage, there must be
As to how marriage may judicial declaration of nullity.
be impugned • Can still be imJ)iJgned even
after death of parties
• Action for nullity does not
rescribe
CIVIL LAW
Can be ratified either by free
cohabitation or rescri tion
Absolute community exists unless
another system is agreed upon in
marriage settlement (Default:
ACP
Children are legitimate if
conceived before decree of
annulment
• Cannot be attacked
collaterally; only directly, i.e.
there must be a decree of
annulment
• Can no longer be impugned
after death of one of the
parties
• Action rescribes
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PROCEDURE AND EFFECTS OF C. LEGAL SEPARATION

TERMINATION OF MARRIAGE
As laid down by the Proposed Rule on Grounds for Legal Separation: (PRC-FAL·
Declaration of Absolute Nullity of Void Marriages BILA) (Art. 55) ·
and Annulment of Voidable Marriages (A.M. No. (a) Repeated fhysical violence or grossly
r 02-11-10-SC), but the Rules of Court shall apply abusive conduct directed against petitioner,
t suppletorily. a common child or a child of the petitioner
(b) Physical violence or moral pressure to
Scope: compel the petitioner to change Beligious
Petitions for declaration of absolute nullity of or political affi.ljation
I'.
!a / I void marriages and annulment of voidable (c) Attempt of respondent to £.orrupt or induce
r:
marriages under the Family Code. the petitioner; a
common child, or a child of
the petitioner, <to engage in prostitution, or
Petition for Declaration of Absolute Nullity connivance in such corruption or
Who may file: Solely the husband or wife inducement
What to allege: If based on psychological (d) Final judgment sentencing respondent to
incapacity, complete facts showing either one is imprisonment of more than 6 years (even if
incapacitated from complying with marital pardoned)
obligations at the time of the celebration of the ( e) Drug ~ddiction or habitual ~lcoholism
marriage including physical manifestations, if (f) Lesbianism or homosexuality
any. (g) Subsequent ~igamous marriage
Prescriptibility: Actions or defenses shall not (h) Sexual Infidelity or perversion
prescribe. (i) Attempt by respondent against the !:ife of
,··, the petitioner
\.. Petition for Declaration of Absolute Nullity . (j) Abandonment for more than 1 year without
and Annulment of Marriage: justifiable cause
Who may file: solely the husband or wife
However, the rule requiring only the husband or Grounds to Deny Legal Separation/ Defenses
the wife to file under A.M. No. 02-11-10-SC does to Legal Separation:. (C4·D·GRP) (Art. 56)
not apply in a petition to recognize a foreign (a) Qondonation
judgment when such judgment concerns the • NOTE: Failure of the husband to look for
status of the foreigner as married to the wife (or his adulterous wife is not condonation to
one of the spouses in a marriage). (Fujiki v. wife's adultery.
Marinay, GR No. 196049, 2013) (b) £onsent
(c) £.onnivance
Also, the rule that only the husband or wife can
(d) £.ollusion
file does not apply in an action for nullity or (e) Mutual §uilt .
annulment of marriage "if the reason behind the (f) Prescription - action for legal separation
petition is bigamy." (Jufiano-Llave v. Republic, -must be filed within five years from the time
GR No. 169766, 2011) of the occurrence of the cause of action
(g) Qeath of either party during the pendency of
Venue the case (Lapuz-Sy v. Eufemio, G.R. No. L-
Family Court of the province or city where the 30977, 1972).
petitioner or the respondent has been residing (h) ,Beconciliation of the spouses during the
for at least 6 months prior to the date of filing (if pendency of O,e case (Art 66)
the respondent is a non-resident: where he may
tw fr111n11 in lhf. Phih,ninpc;) ~· ''"~ nip rt ion ni :lw r r. r - ~· ~ ~, r I r -- • • - r· -~ ..... -, "\.

,-,~-·-·~ ·~·· ''. ...... ' ..... ~- · - · -, . . .. . .... ~ I. ~nou.-,~~are e..Q~l.tJ_eAd.,to.,,l1y,e_,,.S~P.c!t..c!.t~ly~K· _;·····-~:,··i,:_,,_.·,,;.in.,a
1:~r,{·~~,0jii,'~i·~~\?.~'Ji.~'-rMS'iPWtN&iemf~l!'ffij~&i5Mtr!ffl''it':ft!S.~A•["~;ra·geb~;d "is rlOi.severed' ..... s .

- iii. Dissolution of property regime

!... .. , iv. Forfeiture of the.share of the guilty spouse in
the net profits ofthe ACP/CPG
L
NOTE: For purposes of computing the net •
u profits subject to; forfeiture, the said profits

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shall be the increase in value between the
market price of the community property at the
time of the celebration of the marriage and at
the time of dissolution. What la forfeited Is not
the share of · the guilty sr,ouse In the
liquidation of the community property but
merely the profits. ( Siochi v. Gozon GR Nos.
169900 and 169977, 2010)
If there is no separate property, the net
remainder is the profit and therefore the
remainder (which includes the profit)
pertaining to the share of the guilty spouse
is his/her entire share which must be
forfeited. (Quiao v. Quiao, July 4, 2012)
v. Custody of minor children to innocent spouse
(subject to Art. 213: parental authority shall
be exercised by parent designated by the
court). (Art. 63)
vi. The imposed custodial regime under the
second paragraph of Article 213 is limited in
duration, lasting only until the child's seventh
year. From the eighth year until the child's
emancipation, the law gives the separated
parents freedom, subject to the usual
contractual limitations, to agree on custody
regimes they see fit to adopt. (Dacasin vs.
Dacasin, G.R. No. 168785, 2010)
vii. Guilty spouse is disqualified from intestate
succession and provisions made by innocent
spouse in his favor in a will shall be revoked
by operation of law. (Art. 63)
viii. Innocent spouse may revoke the donation
made by him in favor of the offending
spouse. However, alienations, liens and
encumbrances registered in good faith before
the recording of the complaint for revocation
. in the registries of property shall be
respected. (Art. 64)
ix. Innocent spouse may revoke designation of
guilty spouse as beneficiary in the insurance
policy even if such designation be stipulated
as irrevocable. (Art. 64)
An action for legal separation prescribes after
five years from the time of the occurrence of the
cause (Art. 57). The time of discovery of the
ground for legal separation is not material in the
counting of the prescriptive period. (Sta. Maria,
Persons and Family Relations Law 366. 2010)
--- end of topic ---
CIVIL LAW
D. RIGHTS'AND OBLIGATION
BETWEEN HUSBAND AND WIFE
Obligations of Hu1band and Wife (L1H1D8)
(Art. 68-71)
(a) ,bive together
(b) Observe mutual ,bove, respect and fidelity
(c) Render mutual Help and support
(d) Management of the Household
( e) Fix the family ~omicile
(f) Joint responsibility for the §.upport of the
family
Profession (Art. 73)
General Rule • Either spouse may exercise any
legitimate profession/business without the
consent of the other.
Exception • The other spouse may object on
valid, serious and moral grounds. In case of
disagreement, the court shall decide whether:
1. The objection is proper, and
2. Benefit has accrued to the family before and
after the objection.
• If benefit accrued to the family before the
objection, the resulting obligation shall be
enforced against the communityproperty.
• If benefit accrued to the family after the
objection has been made, the resurtlng
obligation shall be enforced against the
separate property of the spouse who has
not obtained consent (R.A. 10572, 2013)
--- end of topic ---
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E. PROPERTY RELATIONS 2. DONATIONS BY REASON OF

(~ ..... ,,
BETWEEN HUSBAND AND WIFE MARRIAGE
{ '
~ j Don1tlona by R111on cf Mnrrlugo (Donations
1. GENERAL PROVISIONS Ptopter Nuptias) Before Marriage
,·\
l ,!
What Governs Property Relations Between General Rule: Future spouses cannot donate to
Spouses (Art. 74) each other more than 1 /5 of their present
(a) Marriage Settlement - future spouses may property (excess shall be considered void) (Art.
agree upon the regime of ACP, CPG, 84)
complete separation of property, or any
Requisites: (BCF) (Art. 82)
other regime
1. Made Before celebration of marriage
(b) Family Code - if there is no marriage
2. In Consideration of marriage
settlement or when the regime agreed upon
3. In Favor of one or both future spouses
therein is void, the system of ACP shall
Exception: If they are governed by ACP
govern
(because they own everything in common)
(c) Local customs
During Marriage (Art. 87)
Requisites of a Valid Marriage Settlement:
General Rule: Donations made by spouses to
(WSB-TC-CR)
each other during the marriage are VOID
1. In Writing
2. Signed by the parties
Exceptions:
f· .• 3 Executed Before the celebration of marriage
i. Moderate gifts on the occasion of any family
-
4.. To fix the Terms and conditions of their
property relations
rejoicing
ii. Donation mortis causa
5. If the party executing the settlement is under
Civil Interdiction or any other disability, the Grounds to Revoke Donation Propter
guardian appointed by the court must be Nuptias: (CARNIVL) (Art. 86)
made a party to the settlement (a) Marriage without the needed parental
6. _Begistration (to bind 3'd persons) Consent
(b) Marriage is ~nnulled and donee is in bad
Once the marriage has been celebrated, post- faith
marriage modifications of such marriage (c) If it is with a ,Besolutory condition and the
settlement can only take place: (a) when condition is complied with
ACP/CPG is dissolved and liquidated upon legal (d) Marriage is _Mot celebrated (If in marriage
separation; (b) reconciliation in legal separation settlement, revoked by operation of law,
and parties agreed to revive the former property Art. 81)
regime; (c) judicial separation of property under (e) Donee commits acts of !ngratitude such as:
Art.135; and (d) voluntary dissolution of i. Commits an offense against the person,
ACP/CPG. (Pana v. Heirs of Juanite. G.R. No. honor or property of the donor, his wife,
164201, 2012) or his children under his parental
authority
General Rule: Property Relations are governed ii. Imputes to the donor any criminal
by Philippine laws (Art. 80) offense or any act involving moral
turpitude, unless the crime was
Exceptions:
' ,.i committed against the donee himself,
i. When both are aliens, even if married in his wife, or his children under his
the PH authority
ii. As to extrinsic validity of contracts iii. Unduly refuses to support the donor
affecting property not situated in the when he is legally or morally bound to
Philippines. (Art. 80) give such support
! . (f) Marriage is judicially declared Yoid ab initio
~ . .., •
(g) In ,hegal separation and donee is the guilty
spouse

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Donation Propter Nuptias v. Ordinary Donation

· . .' (:.: ;' B~~IS · ,' D0~~,:10NS, PROPT.ERf.tl~Pt~~S ·::. · '.' OR_DINARY
1 I
D<;>~ATIO~S: 1
• I' 0 I f a O o i I ' 1 ' 1 I I• I , I ' ' • , • I

Formalities Governed by the rules on ordinary Governed by rules on donations

donations except if future property, it (Arts. 725-773 NCC)
must conform with formalities of wills

Present Property May be donated but up to 1/5 of donor's No limit except that donor shall
present property leave property enough for his
support

Future Property May be included provided donation is Cannot be included

mortis causa

Grounds for revocation Art. 86 of Family Code Arts. 760, 764, 765 NCC

; . : , :<· ··Prescriptive Per:ipds for·Filing ~ction for Re'ifo:cationol Donation Propter'N,uptfa~ ·. .

'· . . ;· -.' ·.:: ·. . · · .. · '. ' . ·. ta~sed
on Sta...' M~'ri~) .~.: ... ~ .; .. · : . . ·: . ·. · : . '. .. ·
If marriage is not celebrated 5 years (Art. 1149 NCC) from the time marriage is not
(Except: donations in marriage settlements solemnized on the fixed date
automatically void if marriage not celebrated)

If marriage is judicially declared void (Note: By operation of law if donee-spouse contracted

deleted items - no distinction made by law)
When marriage takes place without the
re uired arental consent
When marriage is annulled and donee in
bad faith
If donee commits an act of in ratitude ·
In cases of legal separation
subsequent void marriage in bad faith, and if not, 5
ears from finalit of iudicial declaration of nullit
5 years from celebration of marriage
5 ears from happenlh of condition
5 years from finality of decree
ear from donor's knowled e of that fact •
5 years from the time the decree of separation has
. become final

Property Relations NOTE: It shall commence at the precise

moment that the marriage is celebrated. Any
3. ABSOLUTE COMMUNITY OF stipulation, express or implied, for the
commencement of the regime at any other time
PROPERTY shall be VOID. (Art. 88)

Absolute Community Property (ACP) No waiver of rights allowed during the marriage
The property regime of spouses in the absence except in case of judicial separation of property.
of a marriage settlement or when the regime The waiver must be in a public instrument. (Art.
agreed upon is void. (Art. 75) 89)

Property acquired during the marriage, whether

acquisition appears to have been made in the
name or one or both spouses, is PRESUMED to
belong to the community. (Art. 93)

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The original property regimes subsisting under
the New Civil Code when the F amity Code took
effect are immutableand remain effective.
Art. 256 provides that the Family Code shall
have retroactive effect insofar as it does not
prejudice or impair the vested or acquired rights
•. ,·, in accordancewith the Civil Code or other laws.
-. .
General Rule: The communityproperty consists
c of all the property owned by the spouses before,
at the time of, or after the celebration of the
n
.... marriage. (Art. 91)
Exceptions/Exclusions from Community
Property (Art. 92)
(a) Property acquired before the marriage by
either spouse who has legitimate
descendants by a former marriage and its
fruits and income
(b) Property for personal and exclusive use,
except jewelry
(c) Property acquired during the marriage by
I .. gratuitous title plus its fruits and income,
except when the donor, testator, or granter
expressly provides otherwise
Encumbrancecreated on community property to
secure a debt, if consented by both parties. is
valid and chargeable to the communityproperty.
Even if one spouse did not consent, as long as
the debt redoundedto the benefit to the famlly, It
is still chargeable to the community property. A
loan used for the family business is one which
redoundsto the benefit of the family, even if the
business fails. (ROS v. Phil National Bank, GR
No. 170166, 2011)
Under the Family Code, one spouse cannot sell
property which is part of the community
properties without the written consent of the
other spouse or the authority of the court.
Without such consent or authority, the entire
sale is void. While the law does not require a
person dealing with registered land to inquire
further than what the Torrens Title on its face
indicates, the rule is not absolute. If there are
other surrounding circumstancesrelevant to the
sale which show that the purchaser should have
taken the necessary precaution required of a
prudent buyer, the purchaser cannot be
considered in good faith. (Nobleza v. Nuega
c •
G.R. No. 193038, 2015)
In order to be considereda buyer in good faith,
u the foffowing must be shown: (a) the diligence
fv.>:
CIVIL LAW
in verifying the Vi31idity of the title covering the
property; and (b)'Jthe diligence in inquiring into
the authority of the transacting spouse to sell
conjugal propertyin behalf of the other spouse.
Mere reliance on the SPA given by the selling
spouse without further questioning despite
knowing that the lots were conjugal. property is
insufficient. ( Spouses Aggabao v. Paru/an,
G.R.No. 165803, 2010)
Presumption of Conjugality: (Art. 93)
Property acquired during the marriage, whether
acquisition appears to have been made in the
name of one or both 'spouses. is presumedto be
conjugal. The party who invokes the
presumption must first prove that the property
was acquired during the marriage. Otherwise,
the presumption of conjugality will not apply.
(Tan v. Andrade, G.R. Nos. 171904 & 172017,
2013)
The presumptionis not rebutted by the mere fact
that the certificate of title of the property or the
tax declaration is in the name of one of the·
spouses. (Villanueva v. CA, G.R. No. 143286,...
2004)
It is not even necessary to prove that the
properties were acquired with funds of the·
partnership. The presumption shall subsist In the
absence of clear, satisfactory and convincing··
evidence to overcome the same. (Ching v. CA,
G.R. No. 124642, 2004)
J. Perlas-Bernabe: Article 160 of the New
Civil Code provides that all property of the
marriage is presumed to belong to the
conjugal partnership, unless it is proved that
it pertains exclusively to the husband or to
the wife. This presumption Is rebuttable, but
only with strong, clear and convincing
evidence. Howev~r, the presumption refers
only to the property acquired during the
marriage and does not operate when there is
no showing as to when the property alleged
to be conjugal was acquired. The party who
asserts this presumption must first prove the
said time element. (Onstott v. Upper Tagpos
Neighborhood Association, Inc., G.R. No.
221047, 2016.)
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Charges Upon and Obligations of the ACP:
(Art. 94)
(a) Debts and obligations contracted during the
marriage:
• . By either spouse without the consent of
the other to the extent that it benefited
the family
• By designated administrator-spouse
• By both spouses
• By one with the consent of the other
(b) Taxes, liens, charges and expenses
including major or minor repairs, upon
community property
( c) Support of spouses, their common children
and legitimate children of either spouse
(d) Expenses of litigation between spouses
unless the suit is found to be groundless
(e) Ante-nuptial debts which redounded to the
benefit of the family
(f) Taxes and expenses for mere preservation
made during the marriage upon the
separate property of either spouse used by
the family
(g) Expenses for professional or vocational
course
(h) Other ante-nuptial debts, support of
illegitimate child, and liabilities for crime or
quasi-delicts in absence of separate
property are chargeable against · the
separate properties of the spouses but may
be the advanced by the ACP in case of
absence or insufficiency of the exclusive
property of the debtor-spouse
(i) Donated or promised to common legitimate
children for profession, vocational course or
self-improvement
If the community property is insufficient to cover
all these liabilities (except those falling under
cases of absence or insufficiency of the
exclusive property of the debtor-spouse)
spouses shall be solidarily liable for the unpaid
balance with their separate properties. • 1. Proceeds, products, fruits and. income of·
Dissolution of the ACP (Art. 99)
1. Upon death of either spouse
2. Decree of legal separation
3. Marriage is annulled or nullified
4. Judicial separation of property during the
marriage (Arts. 134-138, Family Code)
Liquidation of the ACP (Art. 102)
1. Inventory of all properties
(a) Inventory of community property
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CIVIL LAW
(b) Inventory of separate property of the
wife
(c) Inventory of separate property of the
husband
2. Debts and obligations of ACP are paid
3. Remainder of the separate properties of the
spouses are returned to the owner
4. Net remainder of the ACP is divided equally
between husband and wife
5. Presumptive legitimes of children are
delivered
6. Adjudication of conjugal dwelling and custody
of common children
In an absolute community regime, the net profits
shall be the increase in value between the
market value of the community property at the
time of the celebration of the marriage and the
market value at the time of its dissolution. In a
conjugal partnership of gains regime, the net
profits of the conjugal partnership of gains are all
the fruits of the separate properties of the
spouses and the products of their labor and
industry. In this case, since the petitioner is the
guilty party in the legal separation, his share
from the net profits is forfeited in favor of the
common children. In both regimes (assuming
that it was ACP), petitioner, as the guilty spouse,
is not entitled to any property at all. The
husband and the wife did not have any separate
properties. Therefore; there Is no separate
property which may be accounted for in the
guilty party's favor. (Quiao v. Quiao G.R. No.
176556. 2012)
4. CONJUGAL PARTNERSHIP OF
~AINS
~
System of Conjugal Property of Gains (CPG)
The spouses contribute the following to a •
common fund (Art. 106):
separate properties of spouses
2. Everything acquired by spouses through
their efforts
3. Everything acquired by spouses through
chance ·
It shall commence at the precise moment that
the marriage is celebrated. Any stipulation,
express or implied, for the commencement of
the regime at any other time shall be void.
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No waiver of rights allowed during the marriage
f ··, except in case of judicial separation of property.
The waiver must be in a public instrument.
The fruits, natural, industrial, or civil, due or
r·' ·) )
received during the marriage from the common
property, as well as the net fruits from the
r
.. ..._1 exclusive property of each spouse are included
\ _' in the conjugal partnership properties. (Art.
117(3))
(;
Exclusive Property in CPG (Art. 109)
(a) That brought into the marriage as his/her
own
(b) That acquired during the marriage
gratuitously
(c) That acquired by redemption, barter or
exchange with exclusive property
(d) That purchased with exclusive money
What Constitutes CPG (FOLCHIC) (Art. 117)
r' -,
(a) fruits of conjugal property due or received
during the marriage and net fruits of
separate property
.... (b) Those acquired through Occupation
(c) .bivestock In excess of what was brought to
the marriage
(d) Those acquired during the marriage with
£onjugal funds
(e) Share in Hidden treasure
(f) Those obtained from labor, [ndustry, work or
profession of either or both spouse
(g) Those acquired by £hance
Rules in Cases of Improvement of Exclusive
Property
I ' General Rule: The ownership of improvements
made on the separate property of the spouses at
the expense of the partnership or througtr efforts
"·' of both spouses shall pertain to the partnership.
(Art. 120)
(a) Accession- if the cost of the improvement
and any resulting increase in value are
equal or less than the value of the entire
property at the time of the improvement, the
entire property remains the exclusive
property of the owner-spouse (subject to
reimbursement of improvement cost to the
CPG)
(b) Reverse Accession - if the cost of the
improvement and any resulting increase in
r : value are more than the value of the entire
... j
property at the time of the improvement, the
property becomes conjugal (subject to
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CIVIL LAW
reimbursement of the value of the property
of the owner-spouse)
Charges upon CPG (Art. 121)
(a) Same as that under ACP. except that under
taxes and expenses for preservation of
separate property of either spouse during the
marriage "7 property need not be used by the
family
NOTE: If the conjugal partnership is insufficient,
the spouses shall be solidarily liable for the
unpaid balance with their separate properties.
Payment of criminal indemnities can be
advanced by the ; conjugal partnership assets
even before these. are liquidated. It may be
enforced against the partnership assets after
the responsibilities in Article 121 have been
covered. No prior liquidation of those assets is
required. (Pana v. Heirs of Juanite, Sr., G.R. No.
165201, 2012)
Dissolution of CPG: Same as under ACP (Art ..
126)
An extrajudiclal dissolution of the conjugal
partnership without judicial approval is void. A
notary public should not facilitate the
disintegration of a marriage and the family. In so
doing, a notary public may be held accountsble-.
administratively. (Rodolfo Espinoso v. Juliet
Omana, A.G. 9081, 2011)
Liquidation of the CPG (Art. 129)
1. Inventory of all property
2. Amounts advanced by CP as payment for
personal debts and obligations of either
spouse are credited
3. Reimbursement for use of exclusive funds
4. Debts and obligations of the CP are paid
.. 5. Remains of exclusive properties are returned
6. Indemnify loss of deterioration of movables
belonging to either spouse used for the
benefit of the family
7. Net remainder of conjugal property is divided
equally
8. Delivery of children's presumptive legitimes
9. Adjudication of conjugal dwelling and custody
of children
• Prior to the liquidation of the conjugal
partnership, the interest of each spouse in
the conjugal assets is inchoate, a mere
expectancy, which constitutes neither a
legal nor an equitable estate, and does not •
ripen into title until after liquidation and
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settlement. The right of the husband or wife
to one-half of the conjugal assets does not
vest until the dissolution and liquidation of
the conjugal partnership or after dissolution
of the marriage and there are net assets left
whleh 6an b@ divided b@twe@n the gpou&H
or tfielr respective heirs. (A1'a/Os v,
Macatangay, G.R. No. 155043. 2004.J
An earlier jµdgment on the custody of
the chlld does not serve as res Judlcata
on a subsequent judgment. Grant of
custody is never final and can always be re-
examined and adjusted. The welfare, the
best interests, the benefit, and the good of
the child must be determined as of the time
that either parent is chosen to be the
custodian. (Beckett v. Sarmiento, Jr., 2013).
NOTE:
(a) Property bought on installments paid partly
from exclusive funds of the spouses and
partly from conjugal funds:
i. If full ownership is vested before the
marriage - it shall belong to the buyer-
spouse
ii. If full ownership was vested during the
marriage - it shall belong 10 the
conjugal partnership (Art.119)
(b) If the community or conjugal properties are
insufficient, the separate properties shall be
solidarily and subsidiarity liable for the
obligations. (Art. 121)
(c) The conjugal partnership property shall
llkewlse be liable for the payment of the
personal debts of either spouse insofar as
they have redounded to the benefit of the
family. (Art. 121)
No presumption can be inferred that, when a
husband enters into a contract of surety or
accommodation agreement, it is for the benefit
of the conjugal partnership. Proof must be
presented to establish benefit redounding to ·the
family. (Ayala Investment v. CA, G.R. No.
118305, 1998, reiterated in Security Bank v. Mar
Tierra Corp. G.R. No. 143382, 2006)
J. Perlas-Bernabe: The foreigner spouse
cannot, in a petition for dissolution of the
conjugal partnership, claim reimbursement of
the value of purchased parcels of Philippine land
from his former Filipina spouse on the ground of
equity where the foreigner knowingly bought the
property despite the prohibition against foreign
CIVIL LAW
ownership of Philippine lands under Sec. 7, Art.
XII of the Constitution. (Beumer v. Amores,
195670, 2012)
Administration and Enjoyment of the
ACP/CPO
General Rule: It shall belon~ to both spouses
jointly.
Exceptions:
I. In cases of disagreement, husband's
decision shall prevail.
ii. Wife has rec6urse to the courts within 5
I
years
ill. In case one 'spouse is incapacitated or
unable to participate in the administration of
the common properties, other spouse may
assume sole powers
iv. These powers do not include disposition and
encumbrance
Both spouses must approve any disposition or
encumbrance. Any encumbrance or disposition
is void if without the written consent of the other
spouse or court approval. However, the
transaction shall be construed as a continuing
offer on the part of the consenting spouse, which
may be perfected as a binding contract upon
acceptance by the spouse or upon court
approval. (Art. 96, 124)
Rules on Games of Chance: (ACP/CPG) (Art.
~1~ .
Losses: Borne by the loser spouse and shell
not be charged to the community property
Winnings: Form part of tlie community property
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Distinction between ACP and CPG

.
,·; .:· . ." .. ·. . .., . ACP .
All the properties
. . ·,
Each
I -,,CPG : ·:;: . .
spouse retains
I I", owned by the spouses his/her property before
at the time of marriage the marriage and only

n become community
property (Art. 91)
the fruits and income of
such properties
become part of the
(', conjugal properties
during the marriage
(1 Art. 106
Upon dissolution and Upon dissolution of the
,n liquidation of the partnership, the
community property, separate property of the
the net remainder is spouses are returned
divided equally and only the net profits
between the spouses. of the partnership are
1
... (Art. 102) divided equally
between the spouses of
t their heirs Art. 129
~~--~~~~---l.~__.;.~~--1.~~-'--~

('
5. SEPARATION OF PROPERTY AND ADMINISTRATION OF COMMON PROPERTY

' BY ONE SPOUSE DURING MARRIAGE

Separation of Property (Art. 134)

• Separation of property between the spouses during the marriage shall not take place except by judicial
order.
• Judicial separation of property may either be voluntary or for sufficient cause.

·: ~UF.FICl~NT CA'-'SE FOR SEPAR/\T.ION··. ·<;;ROUNDS FOR REVIVAL OF FORMER,

I ' _:.. '·· . '. OF P.RoPeRTY fArt. 1'3·5j..
1. Petitioner's spouse sentenced to penalty
with civil interdiction
2. Petitioner's seouse declared an absentee
3. Loss of parental authority of petitioner's
soouse declared by court
4. Abandonment or failure to comply with
marital obligations
5. Spouse abused power of administration
granted
'I
6. At the time of petition, spouseshave
been separated in fact for at least one year _
and reconciliation is hi9.bJ~obable
l subsequent voluntary separation may be
. · -, .· ··•. PROPERTY REGIME (Art.'141), .
1. Civil interdiction terminates
2. f>,bsent seouse reaooears
3. Parental authority,judicially restored
•
4. When spouse who has left conjugal
home without decree of legal separation
resumes common life with the other
5. Court authorizes the resumption of
administration, being satisfied that there
will be no abuse
6. Spouses reconcile and resume
common life
7. When after voluntary dissolution of the
ACP or CPG has been judicially decreed,
spouses agree to revive former regime (no
aranted)

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Grounds for Transfer of Administration of Exclusive Property of Either Spouse: (GACA) (ART. 142)
(a) One spouse becomes Quardian of the other
(b) One spouse judicially declared 6bsenl
(c) One spouse sentenced to penalty with f.ivil interdiction
(d) One spouse becomes a fugitive from justice or is hiding as an 6ccused in a criminal case

6. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE

· .:·· , :. ··· ·.B~SIS ARTICl:.E 1.47 . .'" ... · .. '. '.. • · ·· ARTICl:.E't48 .. '
Applicability • Man and woman • Man and woman
• Living together as husband and • Living together as husband and wife
wife (exclusive) • NOT capacilaled to marry (Art.35(1)
• With capacity to marry (without under 18 years old)
legal impediment) • Adulterous relationship (e.g.
1. At least 18 years old concubinage)
2. Not Art. 37 (incestuous void • Bigamous or polygamous marriage
marriage) (Art.35(4 ))
3. Not Art. 38 (void marriage by • Incestuous marriages under Art.37
reason of public policy) • Void marriages by reason of public
4. Not bigamous policy under Art.38
• Other void marriages / live-in • Note: if capacitated, but relationship
is NOT exclusive, will fall under this
provision
Salaries and wages Owned in equal shares Exclusively owned; married party"'?
property of ACP/CPG of legitimate
marriage
Properties acquired Remains exclusive provided there is Remains exclusive
through exclusive proof '
funds
Properties acquired Presumed to be obtained In equal Only the properties acquired by both
while living together shares since it is presumed to have parties through their actual joint
been acquired through joint efforts contribution of money, property, or
industry shall be owned by them in
If one party did not participate in
acquisition, presumed lo have I common
respective
in proportion
contributions.
to their
Proof
contributed through care and required for contribution -no

L maintenance
household
of

The registration of a property in the name of the

family and presumption created through care and
maintenance of familv and household

facie presumed to have been obtained through •

paramour who had no income whatsoever at the
time of the donation by another's husband is
tantamount to a donation which is void under
Article 87 of the Family Code. The paramour
then holds the property under a constructive
trust under Article 1456 in favor of the conjugal
partnership of the husband with the legitimate
spouse. (Joaquina v. Reyes, G.R. No. 154645,
2004)
Under Art. 147, property acquired by both
spouses through their work and industry shall be
governed by the rules on equal co-ownership.
Any property acquired during the union is prima
their joint efforts. Here, the former spouses both
agreed that they acquired the subject property
during the subsistence of their marriage. Thus, it
shall be presumed to have been obtained by
their joint efforts, work or industry, and shall be
jointly owned by them in equal shares. (Barrido
v. Nonato, 2014)
Under Article 148, there must be proof of actual
joint contribution by both the live-in partners
before the property becomes co-owned by them
in proportion to their contribution. Otherwise,
there are no presumptions of co-ownership and
equal sharing. (Villanueva v. CA, G.R. No.

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143286, 2004, reiterated in Ventura v. Sps. F. FAMILY HOME

Paulino, G.R. No. 202932, 2013)
THE FAMILY AS AN INSTITUTION
No co-ownership exists between parties to an
adulterous relationship. In such a relationship, it Family - basic social institution which public
( Is necessary for each of the partners to prove policy cherishes and protects.
l. his or her actual contribution to the acquisition of
• Hence, no suit between members of the
property in order to lay claim to any portion of it. family shall prosper unless earnest efforts
Presumptions of co-ownership and equal towards a compromise have been made but
contribution do not apply. (Rivera v. Heirs of failed. (Art. 151)
Villanueva, G.R. No. 141501, 2006)
• Allegation of "earnest efforts" is
jurisdictional: 'if it is absent, the court can
Art. 148 of the Family Code provides that only
dismiss the .case. BUT this rule is
the property acquired by both of the parties
inapplicable to the following cases: (CLV-
,·' through their actual joint contribution of money,
FJF)
property, or industry shall be owned in common i. Civil status of persons
and in proportion to their respective
ii. Any ground for J:egal separation
contributions. Such contributions and iii. Validity of marriage or legal separation
corresponding shares were prima facie
iv. Future support
presumed to be equal. However, fo.r t~is v. Jurisdiction of courts
presumption to arise, proof of actual contnbut,on vi. Future legitime
,.r was required. Petitioner failed to prove that she
made an actual contribution to purchase the Family Relations
condominium unit. f Soledad L. Lavadia v. Heirs (a) Between husband and wife
of Juan Luces Luna G.R. No. 171914 2015) (b) Between parents and children
(c) Among other ascendants and descendants
--- end of topic --- (d) Among brothers and sisters, full or half
blood. (Art. 150)

J. Perlas-Bernabe: Art. 151 of the Family Code

is inapplicable where the action does not
exclusively involve members of the same family.
Art. 151 must be construed strictly, it being an
exception to the general rule. Any person having
a collateral familial relation with the plaintiff other
than what is enumerated in Art. 150 is
considered a stranger who, if included in a suit
between and among family members, would
render unnecessary the earnest efforts
requirement under Art. 151. (Moreno v. Kahn,
G.R No. 217744, 2018)

THE FAMILY HOME

Family Home is deemed constituted from the

time it is occupied as a family residence. (Art.
'\ .:
153)

Beneficiaries of a Family Home

1. Husband and wife, or unmarried head of the
family.
2. Parents (may.. include parent-in-laws),
ascendants, \ brothers and sisters
(legitimate/illegitimate) living in the family

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home and dependent on head of family for
support. (Art. 154)
Manner of Constitution
Rules:
1. FH is deemed constituted from time of
actual occupation as a family residence
2. FH must be owned by person constituting it
3. FH must be permanent
4. FH continues despite death of one or more
spouses or unmarried head of family for 1 O
years or as long as there is a . minor
beneficiary (Art. 159_)
5. Only one FH can be constituted
Qualified Property
Actual value of the family home shall not exceed
P300,000 in urban areas and P200,000 in rural
areas. (Art.157)
Rules regarding . Subsequent Improvements
of Family Home
Any subsequent improvement of the family
home by the persons constituting it, its owners,
or any of its beneficiaries will still be exempt
from execution, forced sale or attachment
provided the following conditions obtain:
1. The actual value of the property at the
time of its constitution does not exceed
Php 300,000 in urban areas and Php
200,000 in rural areas under Art. 157; and
2. The improvement does not result in an
increase in its value exceeding the
statutory limit.
Otherwise, the family home can be the subject
of a forced sale, and any amount above the
statutory limit is applicable to the obligations
under Art. 160. To warrant the execution sale of
a family home under Art. 160, the following facts
should be established:
1. There was an increase in its actual
value;
2. The increase resulted from voluntary
improvements on the property
introduced by the persons constituting
the family home, its owners or any of its
beneficiaries; and
3. The increased actual value exceeded
the maximum allowable under Article
157. (Eulogio v. Bell, G.R. No. 186322.
2015)
CIVIL LAW
Exempt From Ex~~ution
General Rule: (A~. 153) The FH is exempted
from: ('
1. Execution
2. Forced Sale
• The right to exemption from forced sale
is a personal privilege granted to the
judgment debtor which must be
asserted before the public auction.
Failure to do so would estop the party
from later claiming on the exemption. It
is a right that can be waived or be
barred by laches by failure to set up and
prove the status of the property as a
family home at the time of levy. (De
Mesa v. Acero, G.R. No. 185064. 2012)
3. Attachment
Exceptions: (Art. 155)
i. Non-payment-of taxes
ii. Debts incurred prior to constitution of home
iii. Debts secured by mortgages . on the
premises
iv. Debts due laborers, mechanics, architects,
builders, materialmen, and others who have
rendered service or furnished materials for
the construction of the building
NOTE: The exemption is limited to the value
allowed by the Family Code.
Sale, Alienation, Donation, Assignment, or
Encumbrance of the Family Home
1. The person who constituted the same must
give his/her written consent.
2. The spouse of the person who constituted
the family home must also give his/her
written consent.
3. A majority of the beneficiaries of legal age
must also give their written consent. •
4. In case of conflict, the court shall decide.
Requisites for Creditor To Avail Of The Right
To Execute: (Art. 1 GO)
1. He must be a judgment creditor
2. His claim is: not among those excepted
under (Art. 155)
3. He has reasonable grounds to believe
that the family home is worth more
than the maximum amount fixed in
(Art. 157)
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Procedure: G. PATERNITY AND FILIATION

1 . Creditor must file a motion in the court
proceeding where he obtained a favorable
for a writ of execution against the FH.
2. Hearing on the motion where the creditor
must prove that the actual value of the FH
0 exceeds the maximum amount fixed by the
Family Code, either at the time of its
constitution or as a result of improvements
introduced thereafter.
3. If creditor proves that the actual value
exceeds the maximum amount, the court will
order its sale in execution.
4. If FH is sold for more than the value allowed,
the proceeds shall be applied as follows:
(a) First, the obligations enumerated in Art.
155 must be paid (listed above)
(b) Then the judgment in favor of the
creditor will be paid, plus all the costs of
r=,
execution
( c) The excess, if any, shall be delivered to
r:
the judgment debtor.
v.,
---·- end of topic ---
1. LEGITIMATE CHILDREN
Legitimate Children • Those conceived or born
during a valid marriage. (Art. 164)
These include children who are:
(a) Conceived as a result of artificial
insemination, provided consent is given by
the spouses before the birth of the child
(b) Conceived or born of a voidable marriage
before decree of annulment
(c) Conceived or born before judgment of
absolute nullity under Art. 36 (psychological
incapacity) becomes final & executory
{d) Conceived or born of a subsequent marriage
under Art. 53 (failure to record the judgment,
partition and distribution of properties, and
delivery of children's presumptive legitime)
( e) Legally adopted
(f) Legitimated, conceived and born outside of
wedlock of parents without impediment at
the time of conception and who
subsequently married

A child born insidea valid marriage is legitimate.

Hence a child bornjnside a bigamous marriage,
which is void, is considered a child under the
first marriage, which has not been nullified or
annulled (Concepcion v. CA, G.R. No. 123450,
2005) unless the husband timely impugns the
legitimacy of the child.

An agreement by parties as to the status of a

child is void. Only the law determines legitimacy
• .. ,
or illegitimacy. Thus, the child, in the eyes of the
law, is legitimate under the first marriage
notwithstanding the admission in pleadings by
.:r
the wife and her second husband that the child
-.
._,>
is their legitimate son. Similarly, any declaration
of the mother that her child is illegitimate has no
probative value. (Concepcion v. CA, G.R. No.
123450. 2005)

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2. PROOF OF FILIA TION
Actions regarding Flllatlon
To Claim Fillation
Proof of Flliatlon
General Rule: Filiation of legitimate or
illegitimate children is established by any of the
following (Art. 172, par. 1 ):
(a) The record of birth appearing in the civil
register or a final judgment
A certificate of live birth purportedly
identifying the putative father is not
competent evidence of paternity when there
is no showing that the putative father had a
hand in the preparation of. said certificate.
The local civil registrar has no authority to
record the paternity of an illegitimate child
on the information of a third person.
(Cabatania v. CA, G.R. No. 124814, 2004)
It is well settled that a record of birth is
merely a prima facie evidence of the facts
contained therein. It is not conclusive
evidence of the truthfulness of the
statements made by the interested parties.
(Benitez-Badua v. CA. G.R. No. 105625,
January 24, 1994)
(b) An admission of legitimate or illegitimate
filiation in a public document or a private
handwritten instrument and signed by the
parent concerned.
Exception: In the absence of these pieces of
evidence, the legitimate filiation may be proved
by (A11. 172, par. 2):
i. Open and continuous possession of the
status of a legitimate ( or illegitimate) child
• "Continuous" does not mean that the
possession of status shall continue
forever but only that it shall not be of an
intermittent character while it continues.
The possession of such status means
that the father has treated the child as
his own, directly and not through others,
spontaneously and without concealment
though without publicity. (Mendoza v.
CA. G.R. No. 86302, 1991) . .
• There must be evidence of the
manifestation of the permanent intention
of the supposed father to consider the
child as his, by continuous and clear
CIVIL LAW
manifestations of parental affection and
care, which cannot be attributed to pure
charity. Such acts must be of such a
nature that they reveal not only the
conviction of paternity, but also the
apparent desire to have and treat the
child as such in all relations in society
and in life, not accidentally, but
continuously. (Jison v. CA, G.R. No.
124853, 1998)
ii. Any other evidence allowed by the Rules of
Court and special laws
iii. The due recognition of an illegitimate child in
a record of birth, a will, a statement before a
court of record, or in any authentic writing is,
in itself, a consummated act of
acknowledgement of the child, and no
further court action is required. In fact, any
authentic writing is treated not just a ground
for compulsory· recognition; it is in itself a
voluntary recognition that does not require a
separate action for judicial approval. (Eceta
v. Eceta, G.R. No. 157037, 2004)
NOTE: For illegitimate children: when the action
is based on par. 2 of Art. 172, the action may be
.. brought ONLY during the lifetime of the alleged
parent.
The father's SSS Form E-1 satisfies the
requirement for proof of filiation and relationship
of petitioner to the Aguilar spouses under Article
172 of the Family Code. Filiation may be proved
by an admission of legltlmate filiation in a public
document or a private handwritten instrument
and signed by the parent concerned, and such
~ue recognition In any authentic writing is, in
itself. a consummated act of acknowledgment of
the child, and no further court action is required.
(Aguilar v. Siasat, G.R. 200169, 2015)
A thumb mark has been repeatedly considered cl
valid mode of signature. Thus, the document
executed by the putative father evidencing his
voluntary recognition of filiation is valid. (San
Agustin v. Sales, G.R. No. 189289, 2016)
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Admissibility of Scientific Evidence
Requisites for Chitdren by Artificial
Insemination to be Considered Legitimate
1. The artificial insemination must be made on
the wife;
2. Either the sperm of the husband or a third
party donor may be used;
3. The artificial insemination has been
authorized or ratified by both spouses on a
written instrument executed and signed by
them before the birth of the child; AND
4. The written instrument is recorded in civil
registry together with the birth certificate of
the child
Who may Impugn the Legitimacy of a Child
General Rule: Only the husband can impugn
the legitimacy of a child.
Exceptions: The heirs of the husband may
r impugn the child's filiafion' in the following cases:
'··· (Art. 171)
i. If the husband dies before the expiration of
period for filing the action
ii. If the husband dies after filing without
desisting or
iii. If the child was born after the death of the
husband
Periods for Filing of Action to Impugn
Legitimacy
1. If the husband (or his heirs, in proper cases}
resides in the same city or municipality:
within 1 year from knowledge of the birth OR
knowledge of its recording in the civil
register.
2. If the husband ( or his heirs) does not reside
in the city or municipality where the child's
birth took place or was recorded BUT his
residence is in the Philippines within 2
years.
3. If the child's birth took place or was recorded
in the Philippines while the husband has
his residence abroad, or vice-versa: "Yithin 3
years. (Art. 170)
NOTE:
I
t. . • • The period shall be counted from the
knowledge of the child's birth or its recording
in the civil register.
However, if the child's birth was concealed
from or was unknown to the husband or his
heirs, the period shall be counted from the
u
......·
•
CIVIL LAW
discovery or knowledge of the birth of the
child or of the act of registration of said birth,
whichever is earlier.
• Legitimacy cahnot be collaterally attacked
or impugned. It can be impugned only in a
direct suit precisely filed for the purpose of
assailing the . legitimacy of the child.
(Angeles v. Maglaya G.R. No. 153798,
2005)
• This rule, however, does not apply when 'the
filialion of a child is not at issue. It does not
apply when what is at issue is whether the
claimant is indeed the child of the spouses
alleged to be the parents of such claimant.
Collateral attack is allowed if the issue is
whether the child is indeed related to the
alleged parents at all. (Geronimo v. Santos
G.R.No. 197099,2015)
•
Grounds to Impugn the Legitimacy of the
Child (Art. 166) (Exclusive List} (PBA)
a. It was f hysically impossible for the husband
to have sexual intercourse with his wife
within the first 120 days of the 300 days
which immediately preceded the birth of the
child because of:
i. Physical incapacity of the husband to
have sexual intercourse with his wife
ii. Fact that the husband and wife were
living separately in such a way that
sexual intercourse was not possible, or
iii. Serious illness of the husband which
absolutely prevented intercourse
b. If It's proved that for .f!lological or other
scientific reasons, the child could not have
been that of the husband, except in the case
of children conceived through artificial
insemination
c. In case of children conceived through
Artificial insemination, when the written
authorization or ratification of either parent
was obtained through mistake, fraud,
violence, intimidation, or undue influence.
(Note: This assumes that there was written
authorization) {
Rule on Status of a Child in Case of
Successive (Valid) Marriages (Art. 168)
In the absence of proof to the contrary:
1. If the child was born before 180 days after
celebration of 2"d marriage provided born
within 300 days after the termination of the
151 marriage: considered to have been
conceived during the first marriage.
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2. If the child was born after 180 days following
the celebration of the 2"d marriage whether
born within 300 days after termination of 1•1
marriage or afterwards: considered to have
been conceived during the second
marriage.
Action to Claim Legitimacy (Art. 173)
1. The child can bring the action during his
lifetime.
2. If the child dies after reaching majority
without filing an action, his heirs can no
longer file the action after death.
3. If the child dies during minority or in the
state of insanity, his heirs can file the action
for him within 5 years from the child's death.
4. If the child dies after commencing the action,
the action will survive and his heirs will
substitute for him.
5. If the child is a minor, incapacitated or
insane, his guardian can bring the action on
his behalf.
3. ILLEGITIMATE CHILDREN
Illegitimate Children - those conceived AND
born outside a valid marriage. (Art. 165)
These children include those who are:
a. Born of marriages which are void ab initio
such as bigamous and incestuous marriages
and void marriages by reason of public
policy
CIVIL LAW
b. Conceived and born of voidable marriages
after the decree of annulment
c. Conceived and born out of wedlock
4. LEGITIMATED CHILDREN
Requisites for Legitimation: (Art. 177)
1. The child was conceived and born out of
wedlock.
2. The parents, at the time of child's
conception, were not disqualified by any
impediment to marry each other or were
disqualified only because either or both of
them were below 18.
3. There is a valid marriage subsequent to the
child's birth.
Legitimation takes place by the subsequent
marriage of the child's parents.
Effect of legitimation (Art. 179 - 180)
1. Confers on the child the rights of legitimate
children
2. Retroacts to the time of the child's birth
Legitimation may be impugned only by those
who are prejudiced in their rights within 5 years
from the time the cause of action accrues. (Art.
182)
NOTE: Parents need not die for the cause of
action to accrue. :
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Ir
I \ I Use of mother's surname
surname NOTE: R.A. 9255 amended Art.
r 176 of FC as of March 19, 2004
"7 can use father's surname if

c Legitime Entitled to legitime and

other successional rights
reco nized
Entitled only to 'h of legitime of
legitimate child
r. granted to them by the
NCC
r, Support Entitled to receive support Receive support according to
' from parents, ascendants, the provision of the FC
( and in proper cases,
brothers and sisters under
Art. 174
Action for claim ior His/her whole lifetime His/her whole lifetime
legitimacy or illegitimacy regardless of type of proof regardless of type of proof
provided under Art. 172 provided under Art.172 par.
,..
ONLY lifetime of alleged parent
tor Art. 172 par. 2

Transmissible to heirs Yes No

under Art.173?
Right to Inherit ab intestato
from relatives of parents?
Yes No rig~ to Inherit ab lntestato
from legltitnate children and
relatives of father and mother
under Art. 992 NCC

NOTE: right to choose whose surname to use. (Grande

(a) Use the surname of the mother if the v. Antonio. G.R. No. 206248, 2014)
requisites of R.A. 9255 are not complied
with --- end of topic----
(b) Use the surname of the father if the child's
filiation has been expressly recognized by
the father, either through:
• Record of birth in civil register
• Father's admission in public document
Father's admission in private
handwritten document (R.A. 9255, Sec.
... , 1, effective March 19, 2004)

NOTE: The father under RA. 9255, Sec. 1

.J
has the right to file an action to prove non-
filiation durinq his lifetime.

If the mother of an illegitimate child objects.

although the father was able to sufficiently
establish the paternity of his child in a public
document, there is no legal basis for the court to
change the surname of the child. Child has the

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H. ADOPTION
1 · R.A. 8552: DOMESTIC ADOPTION
ACT
a. Who may adopt:
QUALIFICATIONS AND DISQUALIFICATIONS
OF ADOPTER
1. Filipino Citizen
1. Of legal age
2. In possession of full civil capacity and
legal rights
3. Of good moral character
4. Has not been convicted of any crime
involving moral turpitude
5. Emotionally and psychologically capable
of caring for children,
6. At least 16 years older than the person
to be adopted, unless:
I. The adopter is the natural
parent of the child to be
adopted, or
Ii. The adopter Is the spouse of the
legitimate parent of the person
to be adopted
iii. In a position to support and care
for his legftimate and illegitimate
children, in keeping with the
means of the family
2. Alien
1. Possessing the same qualifications as
above stated for Filipino nationals
2. His/her country has diplomatic relations
with the Philippines
3. Heishe has been living in the Phili°ppines
for at least 3 continuous years prior to
the filing of the application for adoption
and maintains such residence until the
adoption decree is entered, except in
the cases of:
i. A former Filipino citizen who seeks
to adopt a relative within the 4th
degree of consanguinity or affinity;
or
ii. One who seeks to adopt the
legitimate child of his/her Filipino
spouse;or
iii. One who is married to a Filipino
ci~ize~ and seeks to adopt jointly
.
with his/her spouse a relative within
CIVIL LAW
t hee ~ lh degree of consanguinity or
affinity of the Filipino spouse; or
3•
Gua~di~n - with respect to the ward after the
termination of the guardianship and
clearance of his/her financial accountabilities
Rule on Adoption by Spouses
General Rule: Husband and wife shall jointly
adopt.
Exceptions:
i. One spouse seeks to adopt the legitimate
son/daughter of the other;
ii. One spouse seeks to adopt his/her own
illegitimate son/daughter; or
iii. The spouses are legally separated from
each other.
b. Who may be adopted
QUALIFICATIONS ·AND DISQUALIFICATIONS
Of ADOPTED
Who may be adopted: (BAILORP) · · ·
(a) Any person ~elow 18 years of age who
has been administratively or judicially
declared available for adoption;
(b) Under R.A. 9523, a child which can be
certified as "legally Available for
adoption" includes a person below
eighteen (18) years of age or a person
over eighteen (18) years of age but is
unable to fully take care of him/herself
or protect him/herself from abuse,
neglect, cruelty, · exploitation, or
discrimination because of physical or
mental disability or condition
(c) !!legitimate son/daughter by a qualified
adopter to improve his/her status to that
of legitimacy;
(d) ,begitimate son/daughter of one spouse
by the other spouse;
( e) Person of legal age if, prior to the
adoption, said person has been
consistently considered and treated by
the adopter as his/her Own child since
minority; -
(f) Child whose adoption has been
previously Rescinded; or
(g) Child whose biological or adoptive
_earents have died provided that no
proceedings shall be initiated within 6
months from the time of death of said •
parents .
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A "child" refers to a person below eighteen
(18) years of age.
WrlttAri c6flHHt tute6Hary for ador,tlan
(A-BLISS-A)
~
I I
1. ~doptee, if 10 years of age or over;
2. ~iological parents of the child, if known.
or the legal guardian. or the proper
government instrumentality which has
legal custody of the child
l . 3. .begitimate children of the adopter, 10
years old or over
4. !!legitimate children of the adopter, 10
years old or over and living with him
5. .§.pouse of the adopted, if married
6. .§.pouse of the adopter, if married
7. ~dopted children of the adopter, '10
years old or over
Effectivity of Decree of Adoption
A decree of adoption is effective as of the date
the original petition was filed. This also applies
in case the petitionerdies before the issuance of
the decree of adoption.
Where the petition for adoption was granted
after the child killed a girl, no retroactive effect
may be given to the decree of adoption so ~s to
impose a liability upon the adopting parents •
accruing at a time when the adopting parents
had no actual or physically custody over the
adopted child. Retroactive effect may perhaps
be given where such is essential to permit the
accrual of some benefit or advantage in favor of
the adopted child. To hold that parental authority
had been retroactively lodged in the adopting
parents so as to burden them with liability for a
tortlous act that they could not have foreseen
nor prevented would be unfair and
unconscionable. (Tamargo v. CA, G.R. No.
.
· .;
85044, 1992)
c. Rights of an adopted child
RIGHTS GRANTED BY ADOPTION
Effects of Adoption
i. Severance of all legal ties between the
biological parents and the adoptee and the
same shall then be vested on the adopters
EXCEPTin cases where the biologicalparent
is the spouse of the adopter
ii. Deemeda legitimatechild of the adopter
(·
..... ., iii. Acquired reciprocal rights and obligations
arising from parent-childrelationship
CIVIL LAW
iv. Right to use surname of the adopter
v. An illegitimate child adopted by her natural
father can use oa mlddlo nomt her mother's
surname. (In re: Astc,rga aarc/a, CH~. No.
1148311, 2005)
RULES ON SUCCESSION
In legal and intestate succession, the adopters
and the adoptee shall have reciprocal rights of
succession without distinction from legitimate
filiation. However, if the adoptee and his/her
biological parents had left a will, the law on
testamentarysuccessionshall govern.
d. Instances and effects of rescission
RESCISSIONOF ADOPTION
Grounds for Rescission of Adoption: (MASA)
(a} Repeated physical and verbal Maltreatment
by the adopters despite having undergone
counseling
(b) ~ttempt on the life of the adoptee
(c) .§.exual assault or violence
(d}Abandonment 1and failure to comply with
parental obligations. •
• Adoption, being in the best interest of the
child, shall not be subject to rescission by
the adopter..
• Only the adoptee is given the right to
rescind the decree of adoption.
• However, the adopters may disinherit the
adoptee for causes provided in Art. 919
NCC.
Effects of the Rescission of the Adoption
i. The parental authority of the adoptee's
biological parents, if known, OR the
legal custody of the DSWD shall be
restored if the adoptee is still a minor or
incapacitated.
ii. The reciprocal rights and obligations of
the adopters and the adoptee to each
other shall be extinguished.
iii. The court shall order the Civil Registrar
to cancel the amended certificate of
birth of the adoptee and restore his/her
original birth certificate:
iv. Succession rights shall rev·ert to its
status prior to adoption, but only as of
the date of judgment of judicial
rescission. Vested rights acquired prior
to judicial rescission shall be respected.
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2. R.A. 8043: INTER-COUNTRY
ADOPTION ACT OF 1995
a. When allowed
Inter-Country Adoption - the socio-legal
process of adopting a Filipino child by a
foreigner or a Fiiipino citizen permanently
residing abroad where the petition is filed, the
supervised trial custody is undertaken, and the
decree of adoption is issued outside the
Philippines.
A "child" refers to a person below fifteen (15)°
years of age unless sooner emancipated by
law.
b. Who may adopt
Qualifications and Disqualifications of
A~p~ . shown that the child cannot be adopted
An alien or a Filipino citizen permanently
residing abroad may file an application for inter-
country adoption of a Filipino child if: (DEBT·
CAMPS)
1. Comes from a country with whom the
Philippines has Qiplomatic relations and
whose government maintains a similarly
authorized and accredited agency and that
adoption is allowed under his/her national
laws
2. gligible to adopt under his/her national law
3. Agrees to uphold the ~asic rights of the
child as embodied under Philippine laws, the
U.N. Convention on the Rights of the Child,
and to abide by the rules and regulations
issued to implement the provisions of this
Act
4. Has not been convicted of a -crirne involving
moral Turpitude
5. Has the Qapacity to act and assume all
rights and responsibilities of parental
authority under his national laws, and has
undergone the appropriate counseling from
an accredited counselor in his/her country
6. At least 27 years of ,Age and at least 16
years older than the child to be adopted, at
the time of application unless the adopter Is
the parent by nature of the child to be
adopted or the spouse of such parent
7. If Married, his/her spouse must jointly file for
the adoption
CIVIL LAW
8. fossesses all the qualifications and none of
the disqualifications provided herein and in
other applicable Philippine laws
9. In a position to provide the proper care and
.§.upport and to give the necessary moral
values and example to all his children,
including the child to be adopted
c. Who may be adopted
QUALIFICATIONS AND DISQUALIFICATIONS
OF ADOPTED •
Who may be adopted: Only a legally free child
may be the subject of inter-country adoption
Legally-free child - a child who has been
voluntarily or involuntarily committed to the
Department, in accordance with the Child and
Youth Welfare Code
• No child shall be matched to a foreign
adoptive f~mily unless it is satisfactorily
locally.
Qualified children: Section 25, Article 8 of the
Rules and Regulations provides that any child
who has been voluntarily or involuntarily
committed to the Department as dependent,
. abandoned, or neglected pursuant to the
provisions of the Child and Youth Welfare Code
may be the subject of inter-country adoption.
NOTE: There are differences between the two
laws in:
1. Definition of a child
2. Procedure (where to file, what petition may
Include, publication requirements, supervised
trial custody)
3. Qualifications of adopter
4. Who may be adopted
5. Court that issues decree of adoption (Family
court vs. Foreign court)
--- end of topic ---
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CIVIL LAW

I. SUPPORT
to be supported. There is no need that a judicial
declaratron of nullity be filed first before the
What Constitutes Support lower court can rule that the marriage was void.
I I
Support consists of everything indispensable for (De Castro v. Assidao-Oe Castro, G.R. No.
{METS-DC): 160172, 2008)
{a) Medical attendance
(b) g°ducation - includes schooling (formal Persons Obliged to Support Each Other to
education) or training {non-formal the Whole Extent: (Art. 195) {SAPL)
education) for some profession, trade or 1. §.pauses
vocation, even beyond the age of majority 2. ~scendants and Descendants
(c) Ir~nsportation - includes expenses going 3. f.arents and Legitimate/Illegitimate
to and from school, or to and from place of Children/Descendants
work. (Art. 194) 4. ,!:egitimate/lllegitimate Brothers and Sisters
(d) §.ustenance
{e) Qwelling Rules Regarding Support for Illegitimate
(f) flothing Brothers and Sisters (Whether Full or Half
Blood)
Makes no distinction between natural support • If the one asking for support is below
r (basic necessities) and civil support (those majority age, he is entitled to support from
beyond the basics) his illegitimate brother or sister to the full
extent, without any condition.
NOTE: Amount of support shall be in proportion • If the one asking for support is already of
L-
to lhe means of the giver and to the need of the majority age, he is entitled to support only if
recipient. his need for support is not due to a cause
imputable to his fault or negligence. (Art.
In an action for support, the court can declare a 196)
marriage void to determine the rights of the child
•

Spouses
Common children of the s ouses
Children of a $pouse by another marrla e
Illegitimate children of either spouse Under ACP, separate property of parent-spouse.
But If insufficient, absolute community liable but
considered as advances on the share of the
parent to be paid during liquidation

Under CPG, separate property of parent-spouse.

But if insufficient, conjugal partnership liable if
financially capable and only after the
responsibilities enumerated under Article 121
have been covered. But support paid shall be
deducted from share of spouse during liquidation

Legitimate ascendants, other legitimate Separate property of the obliger-spouse. If the

and illegitimate descendants, and same is not sufficient or there is none, the
legitimate and illegitimate brothers and absolute community or conjupal property shall
sisters be liable if financially capable, which support
shall be deducted from the share of the spouse
t upon liquidation of the ACP or CPG (only after
the responsibilities enumerated Article 121 have
c been covered

u
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BASIS OF SUPPORT
, .. · ·; : '. ·:·.: , .... LEGACY OF SUPP()RT .. ·. ; .
Based on law
Exempt from execution and attachment
. whom he is obliged by law to support, in which •
If contained in a will, apply the rules of contractual
support because there is no more obligation of
support to speak of since the giver is already dead
Judgment of support is always provisional in
character. Res judicata does not apply (Lam v.
Chua, G.R. No. 131286, 2004).
As a general rule, the amount in the support-
judgment should be followed even if there is
provision on necessary adjustments. Anything
directly given by the father to the children will not
be considered adjustments creditable to the
amount of support. However, special
considerations of equitable nature may justify a
court in crediting such payments on his
indebtedness to the mother, when such can be
done without injustice to her. (Lim-Lua v. Lua,
G.R. No. 175279-80, 2013 (citing Martin, Jr. v.
Metiin, 59 Wn.2d 468))
The amount of support may be reduced or
increased proportionately according to the
reduction or increase of the necessities of the
recipient and the resources or means of the
person obliged to support. The right to support is
of such nature that its allowance is essentially
provisional; during the entire period that a needy
party is entitled to support, his or her alimony
may be modified or altered, in accordance with
his increased or decreased needs, and with the
means of the giver. It cannot be regarded as
subject to final determination. (Lim-Lua v. Lua,
G.R. No. 175279-80, 2013 citing Montefafcon v.
Vasquez, G.R. No. 165016. 2008; Advincufa v.
Advincula. No.
L-19.065. 1964)
Also, support in arrears can be obtained by a
person claiming support (Mangonon vs. CA.
2006). However, payment of the money for
CIVIL LAW
" . .. I CONTRAC:rUAL, 'SUPPORT · .: . ·.
Based on contract, so it can be between strangers
Not exempt from attachment and execution
because it is not a legal obligation
•
Exception: If the giver contracts with a person
case only the excess of what is obliged (based on
need) can be attached or subiect to execution
Follow rules of contracts which say that obligation
must be fulfilled (support must be given) no matter
what happens (even if you lose your job). BUT if
. the change in circumstances are manifestly
beyond that contemplation of the parties, support
ma:z:: be adjusted accordinalv
support shall be from the time of extrajudicial or
judicial demand.
Options of the Person Giving Support:
1. To give a fixed monthly allowance; or
2. To receive and maintain the recipient in the
giver's home or family dwelling (Art. 204)
Exception to # 2: Existence of legal or moral
obstacle
When the obligation to give support falls upon
two or more persons. the payment of the same
shall be divided between them in proportion to
the resources of each.
However, in case of urgent need and by special
circumstances, the Judge may order only one of
them to furnish the support provisionally, without
prejudice to his right to claim from the other
obligors the share due from them.
When two or more recipients at the same time
claim support from one and the same person
legally obliged to give it, and the obliger does
not have sufficient means to satisfy all claims,
the order established in Art. 199 shall be
followed, specifically:
i. Spouse
ii. Descendants in nearest degree
iii. Ascendants in nearest degree
iv. Brothers and sisters
If the concurrent obligees should be the spouse
and a child subject to parental authority, the
child shall be preferred.
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Sou fS •• rt
1
. p~~l~q !HE l'JIARRIAG.~ . 1 ·.' , ::· • PENDl~G. · · ·. \' : ; . , · ~F,:ER .~ITI~~ r·~.N ... : . : ·· .'.
·.,.· .. · .. , ·. , ,• .· · , . ~ltlGATIO~ , : .. '. .. · ·.· ·.
..... , :1 • •..
•.. ,.' !
' . ; •••• :· I ' • • •• ·, • I

SPOUSES
.. : .· ·. . • • . . .. ··
.

() From the community property From the community No obligation to support except if there
property assets is legal separation, in which case the
court may require the guilty spouse to
\ I
aive support
CHILDREN
('
' From the community property From the community From the separate property of the
L__ .1...i..o_ro~1o_e_rt~tv_ s ouse~s:'....._ __J

Insofar as Philippine laws are concerned, J. PARENTAL AUTHORITY

\ I specifically the provisions of the Family Gode en
support, the same only applies to Filipino Parental Authority (patria potestas) - the
citizens. Petitioner cannot rely on Article 195 in , mass of rights and obligations which parents
demanding support from respondent, who is a
.-
\.
foreign citizen. However, in view of respondent's
have in relation to the person and property of
their children until their emancipation. and even
failure to prove the national law of the after. under certain circumstances.
Netherlands, the doctrine of processual
( presumption shall govern, which states that if Characteristics of Parental Authority:
the foreign law involved is not properly pleaded 1. II is a natural right and duty of the parents
and proved, our courts will presume that the (Art. 209)
foreign law is the same as our local or domestic 2. It cannot be renounced, transferred or
t. .. or internal law. Thus, the law in the Netherlands waived, except in cases authorized by law
is presumed to be the same with Philippine law, (Art. 210)
which enforces the obligation of parents to 3. It is jointly exercised by the father and the
support their children and penalizing the non- mother (Art. 211) •
compliance therewith. Moreover. foreign law 4. It is purely personal and cannot be
should not be applied when its application would exercised through agents
work undeniable injustice to the citizens or • 5. II is temporary
i .
\. ,' residents of the forum. (Norma A. Del Socorro,
for and in behalf of her minor child, Roderigo Rules as to the Exercise of Parental
Norjo Van Wilsem v. Ernst Johan Brinkham Van Authority
Wilsem, G.R. No. 193707, 2014) 1. The father and the mother shall jointly
exercise parental authority over the persons
---- end of topic --- of their common children. In case of
disagreement, the father's decision shall
> prevail, unless there is a judicial order to the
contrary (Art. 211)
2. If the child is illegitimate, parental authority is
with the mother.

u
I J

Page 41 of 432

{ \

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·· . : WHO EXERCISl:S P.ARENTAL:'AUTHORITY,.
Absence of either oarent
Death of either parent
Remarriage of surviving parent
Separation of parents
(Art. 213)
CIVIL LAW
'··... . ··
Parent present
Survivinq parent
Surviving parent, unless the court appoints a
guardian
Parent designated by the court, taking into
account all relevant considerations, including
the choice of the child over 7 years old,.
GR: A child under 7 years of age shall not be •
separated from the mother UNLESS the
court finds compelling reasons to order
'otherwise (TENDER YEARS DOCTRINE)
Paramount consideration in matters of custody
of a child is the welfare and well-being of the
child (Tonog v. Court of Appeals,G.R. No.
122906, 2002)
Indeed, it may be argued that Article 176 of the
Family Code has effectively disqualified the
father of an illegitimate child from exercising
substitute parental authority under Article 216
even if he were the actual custodian of the child
under the premise that no one is allowed to do
indirectly what he is prohibited to do directly.
However, the Court cannot adopt a rigid view
without running afoul to the overarching
consideration in custody cases, which is the
best interest of the minor. A child's best interest
demands that a proper trial be conducted to
determine if she had, indeed, been neglected
and abandoned by her mother, rendering the
latter unfit to exercise parental authority over
her, and in the event that the motlier is found
unsuitable, whether it is in the child's best
interest that she be in the custody of her father
rather than her grandparents upon whom the
law accords a far superior right to exercise
substitute parental authority. (Masbate and
Spouses Masbate v. Relucio (G.R. No. 235498
July 30, 2018)
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• It is not enough to show that the biological
I
: I mother is a lesbian so that she can be denied
\he custody of a chHd not more than 7 years
of age. A must also demonstrate that she
carried on her purported relationship which is
( not conducive to the child's proper moral
development. In choosing the parent to
whom custody is given, the welfare of the
l :
minor should always be the paramount
consideration. The "tender-age presumption"
\ ' may be overcome only by compelling
evidence of the mother's unfitness (Pablo-
Gualberto v. Gualberto, G.R. No. 154994,
2005).
• The matter of custody is not permanent and
unalterable and can always be re-examined
and adjusted. Custody, even if previously
granted by a competent court in favor of a
parent, is not permanent. The paramount
interest of the child should always be
considered (Beckett v. Sarmiento, RTJ-12-
2326, 2016).
• In case of death, absence or unsuitability of
both parents, the surviving grandparent shall
exercise substitute parental authority (Art.
214).
o No descendant shall be compelled, in
criminal cases, to testify against his parents
or grandparents, except when such testimony
is indispensable in a crime against the
def end ant or by one parent against the other
(Art. 215).
Effect of Parental Authority Upon the
(' Property of The Child:
1. The father and mother shall jointly exercise
legal guardianship over the property of the
t . minor common child without court
appointment
2. In case of disagreement, the father's decision
,-,
shall prevail, unless there is judicial order to
~ .)
the contrary
3. If the market value of the property or the
annual income of the child exceeds PS0,000,
the parent is required to furnish a bond of not
less than 10% of the value of the child's
property or income
Substitute and Special Parental Authority
'·-· Order of Substitute Parental Authority:
1. The surviving grandparent
2. The oldest brother or sister, over 21 years
old, unless unfit or disqualified
;
'i..
f -
....... i
CIVIL LAW
3. The child's actual custodian, over 21 years
old, unless unfit or disqualified (Art. 216)
• In case of foundHnga, 1b1ndonod chlldren,
neglected children, or abused children,
summary judicial proceedings shall be
instituted so that they may be entrusted to:
(a) Heads of children's homes
(b) Orphanages, or
(c) Similar institutions duly accredited by the
proper government agency (Art. 217)
Person Exercising Special Parental
Authority:
(a) School
(b) Administrators and teachers
(c) Individual, entity, or institution engaged in
child care
Liability of those Exercising Special Parental
Authority Over the Child
They are principally and solidarily liable for
damages caused by the acts or omissions of the
child while under their supervision, instruction or
custody. However, this liability is subject to the
defense that the person exercising parental
authority exercised proper diligence.
The parents and judicial guardians of the minor
or those exercising substitute parental authority
over the minor are subsidiarily liable for said •
acts and omissions of the minor.
• The responsibility given to an academic
institution for the welfare of its students
has been characterized by law and
judicial doctrine as a form of special
parental authorlty and responsibility.
This respo~sibility has been amplified by
the enactment of the Anti-Hazing Law,
in that the failure by school authorities to
take any action to prevent the offenses
as provided by the law exposes them to
criminal liability as accomplices in the
criminal acts. Thus, the institution and
its officers cannot stand idly by in the
face of patently criminal acts committed
within their sphere of responsibility.
They bear the commensurate duty to
ensure that the crimes covered by the
Anti-Hazing Law are not committed .
(People v. Bayabos, G.R. No. 171222,
2015).
Page 43 of 432
 t:SAK U~'cKA I IUN:, LUHI l.,;IVIL LAW

Substitute Parental Authority v. Special

P t I A th it LIABILITY OF PARENTS FOR ACTS OF
·~1· ·'SUBSTITUTE· · : · SPECl~L.. ' · CHILDREN
·,·<·.PARENTAL·. · . PARENTAL.;··.
:.:· .... AUTijO,RlTY . . . AU.Tl'(ORI.TY . : .' Liability of Parents for Torts Committed By
It is exercised Their Minor Children:
concurrently with the Parents and other persons exercising parental
parental authority of authority shall be civilly liable for the injuries and
It is exercised in
the parents. The damages caused by the acts or omissions of
case of death,
parents temporarily their minors provided the children are living in
absence.or
relinquish parental their company and under their parental authority.
unsuitability of
authority over the On the other hand, parents. judicial guardians or
parents.
child to the person any person exercising only substitute parental
with special parental authority over such minor at fault shall be
'--~~~~~~~..__a~uthori~tY~·~~~~~ subsidiarily liable (Art. 219).
•
Grounds for Suspension of Parental This is subject to the defense that the person
Authority: (CHOBA) exercising either parental authority or substitute
(a) fonviction of parent for crime with civil parental authority exercised proper diligence
interdiction under the circumstances.
(b) Treats child with excessive !:!arshness and
cruelty Parental authority and responsibility are
(c) Gives corrupting Qrders, counsel or inalienable and may not be transferred and
example renounced except in cases authorized by law.
(d) Compels child to ~eg
(e) Subjects to or allows him to be subjected to Parents may exercise parental authority over
~cts or lasciviousness their child's property.

NOTE: The suspension or deprivation may be RA 7610 - AN ACT PROVIDING FOR

revoked and the parental authority revived in a STRONGER DETERRENCE AND SPECIAL
case filed for the purpose or in the same PROTECTION AGAINST CHILD ABUSE,
proceeding if the court finds that the cause EXPLOITATION AND DISCRIMINATION, AND
therefore has ceased and will not be repeated FOR OTHER PURPOSES
• Any person who shall induce, deliver or
Termination of Parental Authority: offer a minor to any one prohibited by this
(a) Death of parents Act to keep or have in his company a minor
(b) Death of child as provided in the preceding paragraph
(c) Emahclpation of child shall suffer the penalty of prision mayor in
(d) Parents exarcising parental authority has its medium period and a fine of not less
subjected the child or allowed him to be than Forty thousand pesos (P40,000);
. .1,,,,.-1,1,1 !n c;pv1,:il r1IHIS(' (nround nr Provided, however. That r.h011lrl lhf!
t"f • • l• * It ,I ' •,
,I 1, I 1 \ I' I •p, • \•

I' ............. , ...... , I 'I "~•' • -. .. ,, ' ',-. .... , ,.,, ''" ... ,...,,.. I'"''""' .... , 1' "'

guardian of the minor, the penalty to be

Cases Where Parental Authority May Be imposed shall be prision mayor in its
Revived (by Subsequent Final Judgment - maximum period, a fine of not less than
Art. 229): Fifty thousand pesos (PS0,000), and the
(a) Adoption of child loss of parental authority over the minor.
(b) Appointment of general guardian (RA 7610, sec 10 (c))
(c) Judicial declaration of abandonment • Love· and marriage promises can be
(d) Final judgment divesting parental considered "coercion" and "influence" within
authority the purview of R.A. 7610. A child is deemed
(e) Judicial declaration of absence or subjected to "other sexual abuse" when she
incapacity or person exercising parental engages in lascivious conduct due to the
authority coercion or influence of any adult. Consent
is immaterial in child abuse cases involving

Page 44 of 432
I
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i
! \
sexual intercourse and lascivious conduct. L. RETROACTIVITY OF THE FAMILY
(Caba/lo v. People, G.R. No. 198732, 2013)
CODE
• Sexual acts, which includes acts of
lasciviousness may be "habitual or not."
Property regimes that were subsisting under the
Therefore, an offender is liable even if the
act was done only once. (Olivarez v. CA, New Civil Code when the Family Code took
G.R. No. 163866, 2005) effect ar~ immuta~le and remain effective. Art.
256 provides thatJhe Family Code shall have
• "Laying of hands" and "child abuse" is
retr~acti~e· effect insofar as it does not prejudice
\ I qualified under R.A. 7610 only when the
or impair the vested or acquired rights in
laying of hands is shown .beyond
accordance with the Civil Code or other laws.
reasonable doubt to be intended by the
The Family Code shall have retroactive effect
accused to debase, degrade or demean the
i~sofar as it does not prejudice or impair vested
intrinsic worth and dignity of the child as a
rights or acquired rights in accordance with the
human being (Rosa/des v. People, G.R. No.
Civil Code or other laws. (Art. 236)
173988, 2014). Thus, even the act of
slapping and verbal abuse is not a violation
--- end of topic ---
of R.A. 7610 if there is no intent to degrade
or lower the dignity of the minor. (Bonga/on
FUNERALS
v. People, G.R. No. 169533, 2013)
GENERAL GUIDELINES
--- end of topic ---
1. Duty and right to make arrangement in
funerals in accordance with Art. 204 of the
K. EMANCIPATION Family Code
• Spouse
•
Emancipation takes place by the attainment of • Descendants in nearest degree
majority. Unless otherwise provided, majority
• Ascendants in nearest decree
commences at the age of eighteen years ( art.
• Brothers and sisters ...
234).
2. The funeral shall be in keeping with the social
position of the deceased
Emancipation for any cause shall terminate
3. The funeral shall be In accordance with the
parental authority over the person and property expressed wishes of the deceased
of the child who shall then be quallfled and
(a) In the absence of expressed wishes, his
responsible for all acts of civil life, save the
religious beliefs or affiliation shall
exceptions established in by existing laws in determine
special cases. .
(b) In case of doubt, the persons in Art. 199
of FC shall decide
Contracting marriage shall require parental 4. Any person who disrespects the dead or
consent until the age of twenty-one. allows the same shall be liable for damages
· end of topic ---

The duty and the right to make funeral

arrangements are confined within the family of
the deceased particularly the spouse of the
deceased to the exclusion of a common law
spouse. (Valino v-. , Adriano, et al., G.R. No.
182894, 2014) 11

--- ehd of topic ---

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Ill.PROPERTY A. CLASSIFICATION OF PROPERTY

TOPIC OUTLINE UNDER THE SYLLABUS As to Mobility (

Ill.PROPERTY a) Movable ·
A. CLASSIFICATION OF PROPERTY b) Immovable

B. OWNERSHIP As to Ownership
1. In general a) Public property
2. Rules on accession b) Private property
3. Quieting of title
As to Alienability •
C. CO-OWNERSHIP a) Within the commerce of man ( or which
may be the objects of contracts qr
D. POSSESSION
judicial transactions)
1. Kinds of possession
b) Outside the commerce of man
2. Acquisition of possession
3. Effects of possession
As to Existence · ·
E. USUFRUCT a) Present property (res existents)
1. In general b} Future property (res futurae}
2. Rights and obligations of the Note: Both present and future property may be
usufructuary the subject of sale but generally not the subject
3. Extinguishment of donation.

F. EASEMENTS As to Materiality
1. Modes of acquiring easements a) Tangible or corporeal
2. Rights and obligations of the owners b) Intangible or incorporeal
of the dominant and servient estates
3. Modes of extinguishment As to Dependence or Importance
4. Legal v. voluntary easements a) Principal
5. Kinds of legal easement b) Accessory
a. Relating to waters
b. Right of way As to Capability of Substitution
c. Light and view
a) Fungible: Capable of substitution by
other things of the same quality and
G. NUISANCE
quantity
H. MODES OF ACQUIRING OWNERSHIP b) Non-Fungible: Incapable of such
1. Occupation substitution, hence, the identical thing
2. Donations must be given or returned
a. Nature
b. Persons who may give or As to Nature Or Definiteness
receive a donation a) Generic - f'"e referring to a group or
c. Effects and limitations of class ,~
donation b) Specific - \one referring to a single,
d. Revocation and reduction unique objept
3. Prescription
.a. General provisions As to Whether In The Custody Of The Court
b. Prescription of ownership and Or Free
other real rights a) In "~ustodia Legis" - In the custody of
c. Prescriptionof actions · the court
b) "Free" property (Tolentino. supra, p. 7-
10)

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1. ACCORDING TO MOBILITY AND NON-
MOBILITY
( a. IMMOVABLE PROPERTY
\ I
Four Jurldlcal Classlflcatlons Of Immovable
Properties: (NIDA) (Tolentino, supra, p. 8)
1. by Nature
2. by [ncorporatlon
3. by Qestination
(\
4. by Analogy
Immovable by NATURE - cannot be moved
from place to place, to wit:
1. Land (Art. 415 (1))
2. Buildings (Art. 415 (1))
3. Roads (Art. 415 (1))
4. Constructions of all kinds adhered to soil
5. Mines, quarries, and slag dumps, while the
matter forms part of the bed (Art. 415 (8))
6. Waters, either running or stagnant (Art. 415
(8))
Note: A structure, which is merely superimposed
on the soil, may be considered movable.
Similarly, a shovelful of land is a movable for it is
no longer adhered to the soil.
Note: When the minerals have been extracted,
they become movables.
Buildings are always immovable under the Code.
The mere fact that the parties to a contract treat
the building as separate does not change its
character as immovable property. (Punsalan v.
Lacsamana, GR No. L-55729, 1983)
Once a house is demolished, its character as an
immovable ceases. (Bicerra v. Teneze, GR No.
L-16218, 1962)
A mortgage of land necessarily includes
buildings, in the absence of stipulation of the
improvements thereon. A building by itself may
be mortgaged apart from the land on which it
has been built. Such would be a real estate
mortgage for the building would still be
considered immovable property. (Leung Yee v.
Strong Machinery, GR No. L-11658, 1918)
A valid real estate mortgage can be constituted
on the building erected on the land belonging to
another. (Prudential Bank v. Panis, GR No. L-
50008, 1987)
l.
CIVIL LAW
A party to a chattel mortgage is estopped from
assailing the deed as void on the ground that the
house subject of the mortgage is real property.
Parties are bound by their agreement, but not
third persons. (Tuma/adv. Vicencio, GR No. L-
30173, 1971)
If contracting parties stipulate that a real
property be considered personal, they are
consequently estopped from claiming
otherwise. However, third persons acting in good
faith are not affected by the stipulation
characterizing the subject machinery as
personal. (Serg's Products v. PC/ Leasing, GR
No. 137705, 2000)
Immovable by INCORPORATION - essentially
movables but attached to an immovable in a
fixed manner to be an integral part of it, to wit:
1. Trees, plants, and growing crops (Art.
415 (2))
2. Everything·: attached to an immovable in
a fixed manner (Art. 415 (3))
3. Statues, reliefs, paintings, or other
objects foruse or ornamentation, placed •
in buildings or on land (Art. 415 (4))
4. Animal houses, pigeon houses,
beehives, fishponds, or breeding places
of similar nature (Art. 415 (6))
Trees, Plants, and Growl ng Crops
Trees and plants are immovable by by
Incorporation If they are planted through labor
but are immovable by nature If they are
spontaneous products of the soil;
Note: Once cut or uprooted, they cease to be
immovable.
Exception:
1. Uprooted timber if the land is timber land
(timber still forms an integral part thereof);
2. Trees blown by a typhoon (part of the land
upon which they rest)
Attached to an Immovable in a Fixed Manner
Requisites:
1. Intent to attach permanently is essential;
2. in case of separation, the injury, breakage,
deterioration must be ~ubstantial. (Art. 415
(3))
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Note: Schools of Thought in Temporary
Separation
May either be:
1. Immovable If there is intent to put them back;
or;
2. Movable because the material fact of
incorporation is what determines its
condition.
Statues, Reliefs, Painting, or Other Objects
for Use or Ornamentation
Requisites:
1. Placed by the Qwner of the immovable inot
the object) or his agent;
2. Intent to attach them fermanently to the
tenements. (Art. 415 (4))
Animal Houses, Pigeon Houses, Beehives,
Fishponds, or Breeding Places of Similar
Nature
Requisites:
1. Placed by the Qwner of the immovable or
his agent;
2. Intent to attach them fermanently to the
land. (Art. 415 (6))
Note: Includes the animals found therein.
Immovable by DESTINATION - movable
placed on immovable for the utility it gives to the
activity carried thereon:
1. Machinery, receptacles, instruments, or
implements (Art. 415 (5))
2. Fertilizer actually used on a piece of land
(Art. 415 (7))
3. Docks and structure which, though floating,
are intended by their nature and object to
remain at a fixed place on a river, lake, or
coast (Art. 415 (9))
Machinery, Receptacles, Instruments
Implements for an Industry or Works
Requisites:
1. Industry or works must be £.arried on inside
the building or on the land;
2. Placed by the Owner of the building or
property or his agent;
3. Machines must be Essential and principal
. elements in carrying o~t the industry;
4. Machines must tend Qirectly to meet the
needs of said industry or works (adaptability).
(Art. 415 (5))
Note: Incidentals are not included (movables
without which the businesses can still continue
or carry on their functions)
CIVIL LAW •
Machinery is immobilized if placed by owner of
plant or property; not so if placed by a tenant or
usufructuary or any person . having any
temporary right. (Davao Sawmill Co. v. Castillo,
GR No. L-40411, 1935)
Equipment destined only to repair or service a
transportation business may not be deemed real
property. (Mindanao Bus v. City Assessor, GR
No. L-17870, 1962) •
Note: Attachment or incorporation to the
immovable is not essential.
Fertilizer Actually'Used on a Piece of Land
Fertilizers still in th-a barn or still wrapped inside
some newspaper even though already on the
ground are still movables.
Docks and Floating Structures
Docks and structures which, though floating, are.
intended by their nature and object to remain at
a fixed place on a river, lake, or coast are
considered immovable. (Art. 415 (9))
Note: A floating house is an immovable if it is
tied to a shore or bank post, otherwise it is a
movable. Otherwise, it assumes the category of
a vessel.
Note further: Although personal property,
vessels partake, to a certain extent, the nature
and conditions of real property because of their
value and importance in the world of commerce.
Immovable by Analogy or by Law - Contracts
for public works, servitude & other real rights
over immovable property (Art. 415 (10))
or b. MOVABLE/PERSONAL PROPERTY
Movable: (SIFTOS)
1. Susceptible of appropriation that are not
included in enumeration in immovables. (Art.
416 (1))
2. Immovables that are designated as movables
by special provision of law. (Art. 416 (2))
3. Forces of nature brought under control by
science. (Art. 416 (3))
4. !hings which can be transported w/o
impairment of real property where they are
fixed (Art. 416 (4))
5. Obligations, which have for their object
movables or demandable sums (credits),
obligations an~. actions must be legally
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~)
demandable - demandable sums must be 3. Whether the object does not fall within any of
, .-, liquidated (Art. 417 (1)) the cases enumerated in Art. 415
)
6. ~hares of stock of agricultural, commercial & I·
industrial entities although they may have Note: The last test is superior to the other two.
real estate (Art. 417 (2))
2. ACCORDING TO OWNERSHIP
Susceptible of Appropriation
An interest in business, that is, providing a. PUBLIC DOMINION
telecommunication and telephone service, is
personal property since it is capable of Three Kinds Of Public Dominion: (USD)
appropriation and not included in the Those intended for:
enumeration of real properties. Thus, it could be 1. Public use - can be used by the public or
subject of theft under the RPC. (Laurel v. everybody
Abrogar, GR No. 155076, 2009) 2. Specific public service of state, provinces,
cities, & municipalities- such as
Designated by Special Provision of Law government buildings and vehicles; may
Growing crops are considered immovable under ' only be used by duly authorized persons
Art. 415(2) but personal property under Chattel 3. For the development of national wealth (Art.
Mortgage Law (Sibal v. Valdez, GR No. L-26278. 420)
1927)
Characteristics:
House built on leased land may be treated as 1. Outside the commerce of men -- cannot be
personal property and be the object of a chattel alienated or leased or be the subject of any
mortgage, insofar as the parties are concerned. contract
(Navarro v. Reyes, GR No. L-18456, 1963) 2. Cannot be acquired by private individual or
even municipalities through prescription
Forces of Nature 3. Not subject to attachment & execution
Electricity, gas, rays, heat, light, oxygen, atomic 4. Cannot be burdened by voluntary easement
energy, water, power etc. Electricity, the same (Tolentino, supra, p. 31-32) •
as gas, Is an article bought and sold like other 5. Cannot be registered under the Land
,· personal property and is capable . of Registration Law and be the subject of (I
appropriation by another. (United States v. • Torrens Title ·
Carlos, GR No. 6295, 1911) 6. In general, can be used by everybody
,_ ( Tolentino, supra, p. 36)
Classification of Movables According to
Nature Note: Fishponds are considered as part of
1. Consumable - cannot be utilized w/o being public dominion and cannot be acquired by
consumed private persons unless it is converted into
2. Non-consumable (Tolentino, supra, p. 10) patrimonial property. However, fishponds may
be leased by the government.
According to Intention of the Parties/Purpose
(whether it can be substituted by other things of Properties, which ithe government owns for
same kind, quality and quantity) . fundamental purposes for rendering government
1. Fungible (res fungibles) only the services, are properties of public dominion.
equivalent is returned 'I

2. Non-fungible (res nee fungibles) - the They are held by the local governments for
identical thing is returned; do not admit of public service, but at the same time, they can be
substitution (Tolentino, supra, p. 10) removed by the State from the LGUs without
having to pay just compensation because the
Tests To Determine Whether Property Is Real LGUs are merely acting as agents. (City of
Or Personal Zamboanga Del Norte v. Province of
J
1. Whether the property can be transported or Zamboanga Del Norte, GR No. L-24440, 1969)

c carried from place to place

2. Whether such change of location can be Public Lands - The national domain under the
made without injuring the immovable to which legislative power of Congress which has not
l the object may be attached
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been subjected to private right or devoted to
public use ( Tolentino, supra, p. 38)
A public land remains part of the inalienable
public domain unless il is shown to have bee~ ·
reclassified and alienated by the State to a
private person. (Central Mindanao University v.
Republic of the Philippines, GR No. 195026,
2016)
Note: The disposition of public lands is lodged
exclusively in the Director of Lands subject to
the control of the Secretary of Agriculture."The ,
Pres.ldent has the power to . reserve alienable
public lands for a specific public purpose or
service and to release those reserved.
b. PRIVATE OWNERSHIP
Three Kinds Of Private Ownership (PSP)
1. Patrimonial property of the §tate -the
property of the State owned by it in its
private or proprietary capacity; the property
is not intended for public use, or for some
public service, or for the developmentof the
national wealth. (Art. 421)
a. Exists for attaining economic ends
of state (Tolentino, supra, p. 37)
b. Property of public dominionwhen no
longer intended for public
use/serviceare declared patrimonial
(Art. 422)
c. Subject to prescription
d. May be an object of ordinary
contract (Tolentino, supra, p. 37).
Examples: property acquired in execution
and tax sales, incomes or rents of the State
2. Property·of folitical Subdivisions
a. Propertyfor public use
b. All other properties possessed by
LGUs without prejudice to special
laws are consideredpatrimonial(Art.
423)
Examples: roads, streets, squares, fountains,
public waters, promenadesand public works for
public service paid for by the LGUs (Art. 424)
Note: Patrimonial properties of LGUs cannot be
removed by the State without paying just
compensation.
Two Kinds of Properties of Political
Subdivisions (Art. 423)
CIVIL LAW
1. Property for public use - cannot be
alienated and may not be acquired by
prescription (e.g. provincial roads, squares,
fountains, promenades) ·
2. Patrimonial Property - used for public
service; property owned by the State which
is not devoted to public use, public service,
or the development of national wealth.
Wealth owned by the State in its private
capacity. (subject to prescription)(Art. 424) •
a. May be alienated and may be
acquired by others through
prescription
Examples: properties obtained by
government
3. Property of frivate Ownership - all
properties belonging to private persons and
those belonging to the State and any of its
political subdivisions which are patrimonial
in nature (Art. 425)
The well-entrenched rule is that all lands not
appearing to be clearly of private dominion
presumably belong to the State. (Republic v.
Benigno, GR No. 205492, 2015)
Conversion of Property of Public Dominion
to Patrimonial Property "
1. Property of t~e National Government -
formal deelarajion by the executive or
legislativedepaftrnent that the property is no
longer needed}or public use or for public
service
2. Property of Political Subdivisions - Must
be authorizedby law.
Note: Political subdivisions cannot register as
their own any part of the public domain.
Exceptions:
1. Grant has been made:
2. Possession has been enjoyed during the
period necessary to establish a presumption
of ownership.
Note: Sacred and religious objects are outside
the commerce of man. They are neither public
nor private property. · ·
Allens have no right to acquire any public or
private agricultural, commercial, or residential
lands except by hereditary succession.
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Note: The right of the public to use the city 8. OWNERSHIP

streets may not be bargained away through
contract.
1. IN GENERAL
I \ 'j
Local government cannot withdraw a public
OWNERSHIP - the independent and general
street from public use, unless it has been
granted such authority by law. (Dacanay v. right of a person to the exclusive enjoyment and
Asistio Jr., GR No. 93654, 1992) control of a thing in his possession, enjoyment,
disposition, and recovery, subject only to the
The power to vacate or withdraw a street or alley restrictions or limitations established by law and
from public use is discretionary and the courts the rights of others. (Art. 427)
l !
will not interfere with such. The Charter of Cebu
r: City gives such power thereby making the Possession is an essential attribute of ownership.
...
: i

withdrawn portion a patrimonial property, which
r· can be an object of an ordinary contracf. (Cebu
l )
\ .' Oxygen v. Bercilles, GR No. L40474, 1975)
A property continues to be part of the public
domain until there is a formal declaration by the
government to withdraw it from being such. An
abandonment of the intention to use the property
for public service and to make it patrimonial
property must be definite and cannot be inferred
--- from the non-use alone. (Laurel v. Garcia, GR
~-
No. 92013, 1990)
--- end of topic ---
3. ~ole Ownership - ownership is vested only
4. Co-Ownership/ Tenancy In Common -
'.
(
Whoever owns the prop»rty has the right to
possess it. Adjudication of ownership includes
the delivery of po~1session if the defeated party
has not shown any right to possess the land
independently of h1er rejected claim of ownership.
(Pascual vs. Daqui9ag, GR No. 162063, 2014)
TITLE - that which constitutes a just cause of
exclusive possession or which is the foundation
of ownership of property.
KINDS OF OWNERSHIP:
1. Full Ownership (dominium or jus in re propia)
- includes all the rights of the owner
2. Naked Ownership (nuda proprietas) - where
the right to the use and the fruits has been •
denied
a. Naked ownership + Usufruct =
FuU
ownership
in one person
ownership is vested in two or more owners·
unity of the property, plurality of the subjects;
each co-owner is the owner of the whole and
at the same time, the owner of an undivided
part thereof.

RIGHTS OF OWNERSHIP/LIMITATIONS

Seven Rights Of Ownership (PUFA-DVA)

(De Leon, Comments and Cases on Property
77, 1993) ,
':., ... J 1. Jus fossidendi (right to possess)
a. Right to hold the thing and does not
n_ecessarily include the right to use (e.g.
contract of deposit)

2. Jus Y..tendi(right to use and enjoy)

r -, a. Includes the right to exclude any person
from the enjoyment and disposal thereof
b. Limitation: use in such a manner as not
to injure the rights of a third person

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3. Jus f.ruend/ (right to fruits)
a. Right to the fruits
b. Kinds of Fruits: (NIC)
i. Natural
ii. fndustrial
iii. £ivil
4. Jus dbutendl (right to consume)
a. Includes the right to transform or abuse
by its use
5. Jus Qlsponendi (right to dispose)
a. Also includes the right not to dispose, or
to alienate
6. Jus YJndlcandi(right to vindicate or recover)
a. Includes the right of action against the
holder and possessor of the thing in
order to recover it
7. Jus ~ccesionls (right to accessories)
Limitations on the Right of Ownership
(CLOGS) (De /eon, supra, p. 92)
1. Those arising from £onflicts of private rights
(e.g. those which take place in accession
continua)
2. Those imposed by J:aw (e.g. Legal
easements)
3. Those imposed by the Qwner himself (e.g.
Voluntary easement, pledge, lease)
4. Those imposed by the Q.rantor of the
property on the grantee
a. by contract (e.g. donation)
b. by last will
5. Those imposed in general by the §tate (Art.
435)
a. Power of eminent domain
b. Police power
c. Power of taxation
Right of Ownership not Absolute
The welfare of the people is the supreme law of
the land ( Salus populi suprema est lex).
Note: The owner bears the loss of the property
owned by him (Res perit domino).
Limitations Imposed On The State:
1. Eminent Domain;
2. Police Power;
3. Taxation
CIVIL LAW
ACTIONS TO REC.OVER
cf
POSSESSION
{.
MOVABLE PROPERTY: REPLEVIN I MANUAL
DELIVERY '.
1. Both principal and provisionalremedy •
2. Plaintiff shall state in the affidavit that he is
the owner of the property claimed,
particularly describing it or that he is entitled
to possession, and that it is wrongfully
detained by the other
3. Plaintiff must also give a bond double the
amount of value of the property (Rules of
Court, Rule 60, Sec. 2)
Period
4 or 8 years from the time the possession
thereof is lost, in accordancewith Art. 1132
When Replevin Not Allowed: (WIP-CT)
1. Propertyis placed In f ustodia legis
2. Taken for !ax assessment
3. Seized under Writ of execution
4. A machinery and equipment used for an
industry and Indispensable for the carrying
on of . such industry (R~ason: they are
consideredreal properties)
5. Seized under freliminary attachment.
(Rules of Court, Rule 60, Sec. 2)
IMMOVABLE PROPERTY •
1. Acclon lnterdictal
2. Accion Publiciana
3. Ace/on Reivind/catorla
4. Writ of Possession· An order directing the
sheriff to place a successful registrant under
the Torrens system in possession of the
propertycovered by a decree of the court
When proper: (FEEEL)
a) foreclosure, judicial or extra-judicial,
of mo~gage. Provided that the
mortgagbr has possession and no
third party has intervened
b) §ectment
c) gxecution sales
d) Eminentidomain proceedings
e) ,band registrationcases
5. Writ of Demolition - Necessarily issued
with writ of possession
A boundary dispute must be resolved in the
context of accion reivindicatoria, not an
ejectment case. The boundary dispute is not
about possession, but encroachment, that is,
whether the property claimed by the defendant
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formed part of the plaintiffs property. (Manalang
vs. Bacani, GR No. 156995, 2015)
Effect of the Lapse of One-Year Period
If the dispossession allegedly took place by any
of such means but the action is not brought
within one year from deprivation of possession,
the action is properly a plenary action of accion
publiciana or accion de reivindiacion. (Penta
Pacific Realty Corp v. Ley Construction and
Development Corp., GR 161589, 2014)
Writ of Injunction
General Rule: Generally not available as a
remedy (Reason: The presumption is that the
one in possession disputably have the better
right)
,' ·,
Exception: When injunction is allowed:
1. Actions for forcible entry
a) Writ of preliminary injunction within 10
days from filing of the complaint to
restore plaintiff in possession
b) Courts shall decide within 30 days
2. Ejectment
a) If possessor is a possessor in concept of
an owner (possession de jure) for over a
year and being disturbed by repeated
Intrusions of a stranger
b) If an owner, still in possession, de~ires
to prevent repeated intrusions by a
stranger
c) If the possessor is clearly not entitled to
property
DOCTRINE OF STATE OF NECESSITY
State of Necessity - the principle that
authorizes the destruction of a property which is
lesser in value to avert the danger posed to
another property the value of which is much
··-,..1·
greater. (Art. 432)
Requisites of State of Necessity
1. Interference necessary to avert an imminent
danger.
2. Damage to another much greater than
damage to property (Art. 432) .
Comparative Danger - Danger must be greater
than damage to property. Consider the
f ~ economic and sentimental value of the property.
• ...... ,I'
(Tolentino, supra, p. 68-69)
u
+v..-
CIVIL LAW
Measure of Rational Necessity - the law does
not require a person acting in a state of
necessity to be free from negligence or mistake.
He must be given the benefit of reasonable
doubt as to whether he employed rational means
to avert the threatened injury. (De Leon, supra, p.
99).
The owner of the sacrificial property is obliged to
tolerate the act of destruction but subject to his
reimbursement by all those who benefited. (De
teen, supra)
In case of conflict between the exercise of the
right of self-help and a proper and licit state of
necessity, the latter prevails because there is no
unlawful aggression when a person or group of
persons acts pursuant to the right given in a
state of necessity. (Tolentino, supra, p. 70)
PRESUMPTION OF OWNERSHIP
Requisites to Raise the Disputable
Presumption of Ownership
1. Actual possession of the property
2. Possession is under the claim of ownership
(Art.433)
Possessor of property has the presumption of
•
title In his favor.
Judicial Process qontemplated For Recovery
Of Property :
1. Ejectment suit; ~pr
2. Reivindicatory action
I
The person claiming to possess a better right
must prove:
1. That he has better title to the property; and
2. Identity of the property
In an action to recover, one must depend on the
strength of his title and not the weakness of the
defense. (Art. 434)
Note: Preponderance of evidence is required.
HIDDEN TREASURE
Concept of Treasure: (HUM)
1. Hidden and unknown
2. Y,nknown owner
3. Consists of Money, jewels, or other precious
objects. (not raw materials) (Art. 439)
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Exceptions: (PULPA)
• • • 1. ~ossession in good faith by another; (Art.
Finder is the same as Treasure totally 554 (1))
owner of the pro ert belon s to him. 2. !!sufruct; (Art. 566)
Finder is third person Finder is entitled to 3. !:ease of rural lands; (Art. 1654)
and he discovered it by one half of the value 4. f_ledge;
chance of the treasure. . 5. Antichresis. (Art. 2132)
Finder is an intruder He is not entitled To
an thin ACCESSION CONTINUA
Finder was given Subject to the contract Accession Continua "".' the extension of. the •
express permission by of service and right of ownership of a person to that which is
the owner principle of unjust incorporated. or attached to a ihing which
enrichment belongs to such person.

It may take place:

2. RULES ON ACCESSION
Accession - right of the owner of a thing, real or
personal, to become the owner of everything
which is produced · thereby, or which is
incorporated or attached thereto, either naturally
or artificially. (Art. 440)
1. With respect to real property
a. Accession industrial;
b. Accession natural
2. With respect to personal property
a. Adjunction or conjunction;
b. Commixtion or confusion;
c. Spe.cification (Paras, supra, p. 209-210)

Note: It is not one of the modes· of acquirin~ Accession Industrial: Principles

ownership enumerated in Art. 712. (Manresa, 6'' 1. Accessory follows the principal.
Ed., Vol. 3, p. 116; 180-182) 2. The incorporation or union must be intimate
that removal or separation cannot be
Classification of Accession effected without substantial injury to either or
1 . Accession Discrete both.
2. Accession Continua 3. Good faith exonerates a person from
punitive liability but bad faith may give rise to
ACCESSION DISCRETA dire consequences.
Accession Discreta - the extension of the right 4. Bad faith of one party neutralizes the bad
of ownership of a person to the products of a faith of the other.
thing which belongs to such person. (Paras, Civil 5. No one should enrich himself at the expense
Code of the Philippines Annotated Property of another. (Paras, supra, p. 221)
Articles, 414-773, 211, 2016)
Obligations
It takes place with respect to:
1. Natural · Fruits - spontaneous products of a. Gathered Fruits
the soil and the young of animals. ..
2. Industrial Fruits - those produced by lands •
,,
,1 I
.
, PLANTER,·
'
OWNER.

of any kind through cultivation or labor. Planter Keeps fruits No reimbursement

3. Civil Fruits - rent of buildings, the price of in Good to Planter since
lease of lands and other property and the Faith latter retains the
amount of perpetual or life annuities or other (GF) fruits
similar income. (Art. 442) Planter Reimbursed for Gets fruits and
in Bad necessary pays planter the
General Rule: All fruits belong to the owner of a Faith expenses necessary
thing. (Art. 441) (BF) (production, expenses
gathering &
preservation)

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r-.
I
b. Standing Crops Rules When Landowner-
·: ··_.,. /: ·.: .. PLANTER· · ' OWNER' ·· Builder/Planter/Sower (LO-BPS) makes
Planter Reimbursed for Owns fruits Constructions/Plantings with Materials of
in GF expenses for provided he pays Another (OM) (Art. 455)
production, planter expenses
gathering, and for production, .. LANDOWNER..._ ' · · OWNER OF '- ·· ·
preservation gathering, and ··: : ... ·J~lJiL'DER
.,. . . - : MATERl~LS.(OM).:
I
c, preservation.
(forced co-
. Pt.:ANTI;:~ SOWER : . . I' • • .. • • • • . .. • • •
. ·. (LO:~ BPS} . . , · · · , . ·.· .- .. · ·
ownership) GOOD FAITH
(' Planter Loses Owns fruits LO- BPS can OM entitled to

r
in BF everything. No
right to
·~~--~-r_ei_m_b_u_rs_e_m_e_n_t~~--~~.
_J acquire the materials,
provided there is full
payment
(1) full payment for
value of materials or
(2) OM may remove

c Regarding Offsprings of Animals.

materials, provided no
substantial injury to
When the male and female animals belong to work done
different owners, under the Partidas, the owner BAD FAITH GOOD FAITH
of the female was considered also the owner of LO-BPS can
c the young, unless there is a contrary custom or acquire the materials,
OM is entitled to full
payment for value of
speculation. The legal presumption, in the provided there is full materials plus
absence of proof to the contrary, is that the calf, payment plus damages
as well as its mother, belong to the owner of the damages
lL. . latter, by the right of accretion. (US v. Caballero. or
GR No. 8608, 1913)
OM may remove
This is also in accord with the maxim "pratus materials even if
sequitor ventrem" (the offspring follows the dam there's substantial •
or mother). injury to work done,
f--~~~~~-~~-+-~p_lu_s_d_a_m_a~1q~e_s __~-~
RIGHT OF ACCESSION WITH RESPECT' TO • GOOD FAITH BAD FAITH
IMMOVABLES LO-BPS can acquire OM loses materials
the materials without without indemnity and
Two Disputable Presumptions As To paying for the value will be liable for
Improvements On Land thereof and will be damages due to
1. Works are made by the owner entitled to damages defects or inferior
2. Works are made at the owner's expense (Art. due to defects or quality of materials.
446) inferior quality of
materials.
BAD FAITH
LO·- BPS can OM entitled to
acquire the materials, (1) full payment for
provided there is full value of materials or
payment (2) OM may remove
materials, provided no
substantial injury to
work done
Note: This chart is ftbrT) Atty. Francis H. Ampil

Planting - pertains to a perennial fact.

Something that will grow and produce fruits year
after year without having to be replanted. (Paras,
..,,
{ 1 supra, p. 220-221)

L, Note: planter may be required to buy the land.

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Sowing - pertains to an annual crop.
Something that will grow and produce fruits and
then you plant again before it will produce fruits
again. (Paras, supra, p. 221)
Note: sower may be required to pay rent.
Exceptions to the Rule on Builders:
Possession as Mere Holder
Rule does not apply where the builder, knowing
that the land is not his, does not claim ownership
over the land but possesses it as mere tl_older,
agent, usufructuary or tenant. (Paras, supra, p.
243)
Exception to the exception
1. Tenant whose lease is about to expire, but
still sows, not knowing that the crops will no
longer belong to him.
2. A person constructs a building on his own
land, and then sells the land but not the
building to another.
a. No question of good faith or bad faith on
the part of the builder can be compelled
to remove the building;
b. New owner will not be required to pay
any indemnity for the building (Golengco
v. Regalado, 48 0. G. 5282)
3. Builder is a belligerent occupant (Republic v.
Lara, 50 O. G. 5282)
4. Builder, etc. is a co-owner even If later on,
during the partition, the portion of land used
,,.. -
CIVIL LAW
is awarded to another co-owner; (Viuda de
Arias v. Aguilar, 40 O.G., 1941)
Note: For the rule to apply, the construction
must be of a permanent character, attached to
the soil with an idea of perpetuity.
If it is of a transitory character or is transferable, •
there is no accession, and the builder must
remove the construction. (A/viola v.. CA, GR No.
117642, 1998)
A mere promise by the landowner to donate the
property to the builder cannot convert the latter
into a builder in good faith. If at all,· he is a mere
possessor by tolerance. A person whose
occupation of realty is by tolerance of its owners
is a not possessor in good faith. Hence, he is not
entitled to the value of the improvements built
thereon. (Verona Pada-Kilario v. CA, GR No.
134329, 2000)
Rules When Landowner Sells Land To a 3nt
Person Who Is In Bad Faith:
Builder must go against the third person. When
the third person has paid the landowner, the
builder may sti!I file a case against the third
person.
The third person may file a 3rd party complaint
against the landowner.
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Ci
'.,Rule§, Vl{hen BPS Builds, Plants, BUILDERJPLA~TE~/$0WER (~PS)· . . · .. :. : . ' .....
. I
. ..s·ows·
. o n :Th e Land Of ·A'noth1er• .
1
· · · . . ·. • . ··• i • • ·• 1 • · •• • • •
• • • • • · ·.
•

:'ki.•A) L'AN'r!.ow' NER ,' .. : . . ': ·, . .. . : . . .. '· . . . . . . ... ·. . •. ' .

' •lL.~ • • li,I 'I I ' ' I ' ' o I I o I I I • t ' ' o I I

r>, A. GOOD~~~~~~~~~-...~~~~~~--~~~~~~~~~~~~~~~~~
FAITH
Option 1: To receive indemnity for necessary, useful and luxurious expenses
To purchase whatever has been (If the LO wants to appropriate the luxurious improvements) with
built, planted or sown after paying right of retention over the land without obligation to pay rent until
indemnity which includes full payment of indemnity.
' ) necessary expenses, useful
expenses and luxurious expenses To remove useful improvements provided it does not cause any
(,_ (if the LO wants to appropriate the injury (this is part of right of retention).
luxurious improvements).
(i If LO does not appropriate luxurious improvements, BPS can
remove the same provided there is no injury to the principal thing
(land or building).
Option 2: To oblige the BP to buy To purchase land at fair market value when value is not
ihe land or the S to pay the proper considerably more than that of the building or trees.
rent unless the value of the land is
,· .
'-
considerably more than that of the If BPS cannot pay purchase price of land, LO can require BPS to
building or trees. remove whatever has been built, planted or sown.
I'•
If the value of land is considerably more than that of the building or
trees, BPS cannot be compelled to buy the land. In such case, BPS
will pay reasonable rent if LO does not choose Option 1.

If BPS cannot oav the rent, LO can eject BPS from the land.
•.;;._...;;;.J.;:_..:..;.....;;._..:..;.......:;
~-~~~~~~~~~~~~-'-'_.:._.:.....:...:.~.:...c....1~_.;...;;._c......'--.:..._- _ _.;......:.....~-.::..:....--~

•
B. GOOD FAITH BAD FAITH
Option 1: To acquire whatever has Loses. whatever has been built! planted or sown witho_ut indemnity
been built. planted or sown without and liable to pay damages.
paying indemnity except necessary
expenses for preservation of land Entitled to reimbursement for necessary expenses for preservation
r: of land but no right of retention.
and luxurious expenses (should LO
want to acquire luxurious
improvements) plus damages. Entitled to reimbursement for useful expenses but cannot remove
useful improvements even if removal will not cause injury.

Not entitled to reimbursement for luxurious expenses except when

LO wants to acquire luxurious improvements (value of which will
be the one at the time LO enters into possession).

Entitled to remove luxurious improvements if it will not cause injury

and LO does not want to acquire them.
I Option 2: To oblige BP to buy land Obliged to pay for land or proper rent and pay damages.
or S to pay proper rent plus
damages.
Option 3: To compel BPS to remove Obliged to remove or demolish work done at his expense and pay
or demolish work done plus damages.
damages .

.,

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C. BAD FAITH GOOD FAITH

To acquire whatever has been built, If LO acquires whatever has been built, planted or sown, BPS must
planted or sown by paying be indemnified the value thereof plus damages.
indemnity plus damages.
(If LO does not acquire whatever has been built, planted or sown,
BPS cannot insist on purchasing land).

BPS can remove whatever has been built, planted or sown

regardless of whether or not it will cause injury and will be entitled •
to damages.
D. BAD FAITH . .
Same as A. •
~· ~
Same as A.
Note: This chart is from Atty. Francis H. Ampll

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. ·~

I 1 •
Option 1: To acquire To receive indemnity from LO with To receive indemnity from BPS
, whatever has been built, right of retention over land until full who is primarily liable for
\. planted or sown provided payment. materials; if BPS is insolvent, to
there is payment of proceed against LO who is
indemnity (which includes subsidiarily liable with no right of
value of what has been built, retention.

c planted or sown plus value

of materials used .
1--~~~~~_._~~~--1---~~-''--~~~~~~--~~+-~~~~~~~-~~~~--i
Option 2: To oblige BP to To buy land or to pay proper rent. To receive Indemnity from BPS
c buy land or S to pay proper
rent unless value of land is
only (LO is not subsidiarily liable)
with right of retention until full
considerably more than that payment.
of building or trees. or
To remove materials if there will
be no injury on building or trees
and will have material rent lien
against BPS for payment of
value of materials.
B. GOOD FAITH GOOD FAITH BAD FAITH
Same as A. Same as A. Whatever is the choice of LO, the
OM:
1. loses the materials in favor of •
BPS, and
2. will have no right to receive
indemnit from BPS nor LO.
C. GOOD FAITH BAD FAITH BAD FAITH
Option 1. To acquire BPS loses what has been built planted (Since both BPS and OM are in
whatever has been built, or sown plus liable for damages but is bad faith, treat them both as if
planted or sown without entitled to be indemnified for they are in good faith).
paying indemnity except necessary expenses and luxurious
necessary expenses for expenses (should LO want to acquire Whatever is the choice of LO,
preservation of land and luxurious improvements) and has no OM. has right to receive
luxurious expenses (should right of removal even if removal will indemnity for value of materials
LO want to acquire luxurious not cause damage. from BPS only (LO has no
improvements) plus subsidiary liability for value of
damages. materials because OM is
considered in good faith only
insofar as BPS is concerned .
Option 2: To oblige BP to To buy the land or pay proper rent and If LO chooses Option 1, OM has
buy the land or S to pay liable to pay damages to LO. no right to remove materials
proper rent plus damages. even if there will be no injury or
damage. If LO chooses Option 2,
OM has right of removal,
provided there will be no injury or
f--~~--~~~~~~~,---~~~~~~~--~~~~~+-'-d~am'--"-a~~--~~~~--l
Option 3: To oblige BPS to To demolish or remove what has been Liable to pay for damages due to
demolish or remove what built, planted or sowed and liable for defects or inferior quality of
has been built, planted or damages. materials.
c sowed plus damages.

u
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0. BAD FAITH GOOD FAITH
To acquire what has been built, To receive indemnity 'from LO
planted or sown by paying plus damages.
indemnity plus liable to pay
damaaes.
. •
E. BAD FAITH GOOD FAITH
Same as D. Same as 0.
Note: This chart is from Atty. Francis H. Ampil
A lessee cannot be a builder in good faith. He is
estopped to deny his landlord's title, or to assert
a better title not only in himself, but also in some
third person while he remains in possession of
the leased premises and until he surrenders
possession to the landlord. (Munar v. CA, GR
No. 100740, 1994); (Frederico Geminiano, et al.
v. CA, et al., GR No. 120303, 1996)
Estoppel applies even if the lessor had no title at
the time. The relation of lessor and lessee was
created arid may be asserted not only by the
original lessor, but also by those who succeed to
his title. As lessees, they knew that their
occupation of the premises would continue only
for the life of the lease. They cannot be
considered as possessors nor builders in good
faith. (Racaza v. Susan Realty, Inc., GR No. L-
20330, 1966); (Vda. De Bacaling v. Laguna, GR
No. L-26694, 1973); (Santos v. CA. 221 SCRA
42, 1993)
Even if the lessor promised to sell, it would not
make the lessee possessor or builder in good
faith so as to be covered by the provisions of Art.
448 of the NCC, If he improves the land. The
latter cannot raise the mere expectancy of
ownership of the land because the alleged
promise to sell was not fulfilled nor its existence
even proven. (Jurado, Civil Law Reviewer, 2008)
The owner of the land on which a building has
been built in good faith by another has the option
to buy the building or sell his land to the builder,
he cannot refuse to exercise either option.
(Sarmiento v. Agana, GR No. L-57288, 1984)
Note: For lessees, do not apply the rules on
BPS. Apply Art. 1678 which states: If the
lessee makes, in good faith, useful
improvements which are suitable to the use for
which the lease is intended, without altering the
form or substance of the property leased, the
lessor, upon termination of the lease shall pay
CIVIL LAW
GOOD FAITH
To receive indemnity for value of
materials principally from BPS and
•
in case BPS is insolvent, subsidiarity
from LO. · · ·
BAD FAITH
No right to receive indemnity for
value of materials from BPS nor LO
(who ends up owning buildings or
trees).
the lessee one-half of the value of the
. improvements at that time. Should the lessor
refuse to reimburse said amount, the lessee may
remove the improvements, even though the
principal thing may suffer damage thereby. With
regard to ornamental expenses, the lessee shall
not be entitle to any reimbursement, but he may
remove the ornan,ental objects, provided no
damage is caused to the principal thing, and the
lessor does not choose to retain them by paying
their value at the time the lease is extinguished.
Owner of the land on which improvement was
built by another in good faith is entitled to
removal of improvement only after landowner
chose to sell the land and the builder refused to
pay for the same. Where the land's value Is
greater than the Improvement, the landowner
cannot compel the builder to buy the land. A
"forced lease" Is then created and the court shall
fix the terms thereof in case the parties disagree
thereon. (Depra v. Dumlao, GR No. L-57348,
1985)
The right to choose between appropriating the
improvement or selling the land on which the
Improvement of the builder, planter or sower
stands, is given to the owner of the land (not the
court) (Ba/Iatan v. CA, GR No. 125683, 1999)
Improvements made prior to the annotation of
the notice of /is pendens are deemed to have
been made in good faith. After such annotation,
P can no longer invoke the rights of a builder in
good faith. Should E opt to appropriate the
improvements made by P, it should only be
made topay for those improvements at the time
good faith existed to be pegged at its current
market value. (Carrascoso v. CA, GR No.
123672, 2005)
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ACCESSION

Accession Accession
Discreta Continua

Natural Industrial Civil Real Personal

., ..
I
Fruits Fruits Fruits

A~~sion
Adjunction/ Specification Mixed
Industrial Natural Conjunction

rents of
Spontaneous buildings
products of the
soil, price of leases
of land & Building (ISTEP) commlxtlon
r
i.. Young and Alluvium •
other products other property Inclusion or confusion
Pl~nting Avulsion
of animals amount of engraftment
perpetual or llfe Sowing Change of Soldadura or
annuities or course
soldering
of rivers
other similar
Tejido or
income Formation weaving
r· of
islands Escritura or
writing

"

l. '

, .
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ACCESSION NATURAL thereto and as an increment thereof." (Lanzar v.

Dir. Of Lands, GR lifo. L-31934. 1977)
Principal Forms of Accession Natural:
1. Alluvium (Art. 457) Avulsion - accretion which takes place when
2. Avulsion (Art. 459) the current of a river, creek, or torrent
3. Change of course of rivers (Arts. 461-462) segregates from an estate on its bank a known
4. Formation of islands (Art. 464-465) portion and transfers it to another estate in
which case, the owner of the estate to whichthe •
Alluvium - the accretion which the banks of segregated portion belonged, retain the
rivers gradually receive from the effects of, the ownership thereof. (Art. 459)
current of the waters and which belong to the •
owners of lands adjoining the said banks. (Art. Alluvium vs. Avulsion
457) · ,: A~LUVIUM · .. AVULSION.' · · · ·
Deposit of soil is Deposit of soil is
Accretion - act or process by which a riparian gradual and sudden or abrupt.
land gradually and imperceptively receives imperceptible.
addition made by the water to which the land is Soil cannot be Soil is identifiable and
contiguous. (Paras, supra, p. 265) identified. verifiable.
Deposit of soil Deposit of soil belongs
Essential Elements of Alluvium: (GCA)
belongs to the to the owner from
1. Deposit or accumulation of soil or sediment
owner of the whose property it was
must be Qradual and imperceptible. (Art.
property to which it detached.
457)
2. Accretion results from the effects or action of is attached.
the f urrent of the waters of the river. (Gov't
Essential Elements of Avulsion: (CSK)
of the Phils. v. Cabangis, 53 Phil. 112, 1929)
3. The land where accretion takes place must
1. Segregation and transfer must be caused by
the furrent of a river, creek or torrent. (Art.
be ~djacent to the bank of a river. (Art. 457)
459)
2. Segregation and transfer must be Sudden or
Registration under the Torrens System does not
abrupt. (Canas v. Tuason, 5 Phil. 688, 1929)
protect the riparian owner against the diminution
3. The portion of land transported must be
of the area of his registered land through gradual
.!:S,nown or identifiable. (Art. 459)"
changes in the course or an adjoining stream.
(Viajar v. CA, GR No. 77294, 1998)
Note: In avulsion, the owner should remove the
transferred portion within two (2) years;
Failure to register the acquired alluvial deposit
otherwise, it becomes permanently attached.
by accretion for 50 years subjected said
(Art. 459)
accretion to acquisition through prescription by
third persons. (Reynante v. CA, GR No.
Uprooted Trees - Trees uprooted and carried
95907, 1992)
away by the current of the waters (Art.460)
The rules on alluvion do not apply to man-made
or artificial accretions to lands that adjoin canals .·.o~~e~s ·ocn:i9:r · I QWNE~s CL:AIM · .:
or esteros or artificial drainage system. . : C~AIM WITHIN · · WITHIN 6MOS. ·. ·
(Ronquillo v. CA, GR No. L-43346, 1991) ,•
, ,.
I
6MOS
I,•
•
0
''
I, •'1
I · .· .
t ,• 'I• o I
·. · · ..
I

Belong to the owner Owners pay the

Lands added to the shores by accretions and of the land upon expenses incurred in
alluvium deposits caused by the action of the which the trees may gathering them or putting
sea, form part of the public domain. When they be cast. (Art. 460) them in a safe place.
are no longer washed by the waters of the sea, (Art. 460)
and are not necessary for the purposes of public
utility, or for the establishment of special
industries, or for the coastguard service, the
Government shall declare them to be the
property of the owners of the estates adjacent

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Change, of Course of Rivers
Requisites:
1. There must be a natural change in the
course of the waters of the river.
2. The change must be abrupt or sudden. (Art.
46•/)
Right Of Owner Of Land Occupied By New
River Course:
..... 1. Right to old bed ipso facto in proportion to
area lost;
2. Owner of adjoining land to old bed: right to
acquire the same by paying its value - ..
Value not to exceed the value of area
occupied by new bed. (Art. 461)
New River Banks
Whenever a river, changing its course by natural
r
l causes, opens a new bed through a private
estate, this bed shall become of public dominion.
(Art.462)
New river bed may itself be abandoned, due to
natural or artificial causes authorized by law.
Owners will get back this previous property if the
course of the river reverts to its original pl.ace.
(Sanchez v. Pascual, 11 Phil. 395, 1969)
,,...
...._ Islands Belonging to the State
Islands, which may be formed:
1. On the seas within the jurisdiction of the
Philippines;
2. On lakes; and
3. On navigable or floatable rivers. (Art.464)
'\ .. ~· Islands Formed in Non-Navigable or Non·
Floatable Rivers:
1. Belong to the owners of the margins or
banks of the river nearest to each of them.
2. If in the MIDDLE of the river - divided
longitudinally in halves (Art.465)
Note: River beds that dry up continue to belong
to the State as its property of public dominion,
unless there is an express law that provides that
the dried-up river beds should belong to some
other person. (Republic vs. Santos Ill, GR No.
160453. 2012)
'-·'
.- .
\..)
I :
1.}
CIVIL LAW
For Personal Property
AdJunetlon/ Canjunctloh
Adjunction or Conjunction -process whereby
two (2) movable things owned by different
persons are joined together without bad faith, in
such a way that they form a single object. (Art.
466)
Requisites: (SID)
1. The two things belong to Qifferent owners.
2. They form a .§.ingle object.
3. They are !nseparable; that their separation
would impair their nature or result in
substantial injury to either component.
(Paras, supra, p. 265)
Classes of Adjunction: (ISTEP)
1. tnclusion (engraftment)
2. §.oldadura (soldering)
a. Feruminatio - same metal
b. Plumbatura - different metals
3. Iejido (weaving)
4. gscritura (writing)
5. f:Jntura (paintirig) (Paras, supra, p. 291) •
,...
General Rule: Th~ owner of the principal thing
acquires the accessory, indemnifying the former
owner for its value .. (Art. 466)
Test To Determine Principal:
The principal thing is deemed to be that to which
the other has been united as an ornament, or for
its use or perfection. (Art. 467.)
If it cannot determined: (Rule of importance and
purpose)
1. Greater value = If they are of unequal value
2. Greater volume = If they are of equal value
3. Greater merits (Art. 467 & 468)
When Separation Allowed:
1. Separation without injury (Art.469)
2. Separation with injury - accessory is much
more precious than the principal; the owner
of the former may demand its separation
even though the principal may suffer injury.
(Art.469)
3. Owner of principal in bad faith. (Art.470 (2))
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Rules as to Ownership
,. ·,:·/10V.VNl:R
OF. · OWNER OF ACCESSO~Y Specification · Imparting of a new form to the
':'PRINClf.'Al (OP) · . (OA)' . ,, . . material belonging to another; or the making of
GOOD .FAITH I GOOD FAITH the material of another into a thing of a different
BAD FAITH kind. (Art. 474)
Acquires the May demand reparation:
accessory If no injury will be caused When Maker Is in Good Faith
- Indemnifies the If value of accessory Is One who, in good faith, employs the material of •
former owner for greater than principal - another In order to make a thing of a different
its value even if damages will be' kind shall appropriate the thing transformed as
caused to principal his own,'indemnifying the owner of the material
(expenses is to the one for its value. (Art. 474)
who caused the
conjunction} When the Material is of Greater Value Than
GOOD FAITH
....__ BAD FAITH the Transformed Thing
Owns the Loses the thing The owner of the material may:
accessory incorporated 1. Appropriate the new thing to himself, after
Right to damages Indemnify the OP for the paying indemnity for the value of the work;
damages OP may have or
suffered 2. Demand indemnity for the material. (Art. 474)
BAD FAITH GOOD FAITH
Right to choose between When the Maker is in Bad Faith
Pay OA value of
OP paying him its value or The owner of the material shall have the right to:
accessory or
That the thing belonging to 1. Appropriate the work to himself, without
principal and
him be separated even paying anything to the maker; or
accessory be
2. Demand of the latter that he indemnify him
separated though it be necessary to
for the value of the material and the
destroy the principal thing
damages he may have suffered. (Art. 474)
PLUS
Note: The owner of the material cannot
liability for
appropriate the work in case its value, for artistic
damaoes
or scientific reasons, is considerably more than
that of the material. (Art. 474)
Mixture
Takes place when two or more things belonging
to different owners are mixed or combined to
such extent that the components lose their
identity. (Art. 472)
least 2
things
Kinds:
1. Commixtion - mixture of solid things As a rule, As a rule, As a rule,
2. Confusion - mixture of liquid things accessory CO· accessory follows
follows ownership principal
Rules: principal results
1. Mixture by the will of the owners
a. Rights governed by stipulations The things May either The new object
b. Without stipulation: each acquires a right joined retain retain or retains or
or interest in proportion to the value of their nature lose preserves the
his material. (Paras, supra, p. 297) respective nature of the
2. Mixturecaused by an owner in good faith or natures original object
by chance
a. Each share shall still be in proportion to
the value of their thing (Santos v.
Bernabe, 54 Phil. 19, 1929)
3. Mixed caused by owner in bad faith
a. The actor forfeits his thing;
b. Liable for damages. (Paras. supra, p.
297)
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i ;
t
3. QUIETING OF TITLE TO OR 3. Such cloud must be due to some Instrument,
record, claim, ?encumbrance or proceeding
INTEREST IN AND REMOVAL OR
which is apparently valid but is in truth
PREVENTION OF CLOUD OVER invalid, ineffective, voidable or unenforceable
TITLE TO OR INTEREST IN REAL prejudicial to the, plaintiffs title (Art. 476)
PROPERTY 4. Plaintiff must Return to the defendant all
benefits received from the latter or reimburse
him for expenses that may have redounded
Quieting of Title - remedy or proceeding which
to his benefit. (Art. 479)
has for its purpose an adjudication that a claim
i
, .... . of title to realty or an interest thereon, adverse to .
i, When NOT Applicable
the plaintiff, is invalid or inoperative, or otherwise
1. Questions involving interpretation of
defective and hence, the plaintiff and those .. documents;
claiming under him may forever be free of any 2. Mere written or oral assertions of claims;
hostile claim. (Baricuatro, Jr. vs CA, GR No.
,.
r:
105902, 2000)
Exceptions:
i. If made in a legal proceeding;
,· ii. If it is being asserted that the
Reasons: instrument of entry in plaintiff's favor is
1. Prevent litigation not what it purports to be;
2. Protect true title & possession 3. Boundary disputes;
3. Real interest of both parties which requires 4. Deeds by strangers to the title, unless
that precise state of title be known. (Paras, purporting to convey the property of the
supra, p. 305) plaintiff;
5. Instruments invalid on their face;
Action to Quiet Title 6. Where the validity of the instrument involves
Puts an end to vexatious litigation in respect to •
pure questions of law. (Paras, supra, p. 315-
property involved; plaintiff asserts his own estate 316)
and generally declares that defendant's claim is
w/o foundation. (Baricuatro, Jr. v. CA GR No. Action to Remove Cloud
105902, 2000) Intended to procure cancellation, delivery,
releaae of en Instrument, encumbrance, or clalm
Quasi In R@m .. suits against a particular pt!rson constituting a ·on plaintiff's tltle whleft may be
or persons in respect to the res; may hot be used to lt1jure er vex him in the enjoyment of his
brought for the purpose of settling a boundary title
disputes
Cloud - is a semblance of title, either legal or
Applicable to real property or any interest equitable, or a claim or a right in real property,
therein. The law, however, does not exclude appearing in some legal form but which is, in fact,
personal property from actions to quiet title. invalid or which would be inequitable to enforce.
(Art. 476)
Note: An action to quiet title is imprescriptible if
brought by the person in possession of the Existence of cloud: (AIP)
-~_j property. Otherwise, he must invoke his remedy 1 • Instrument or!
II
record or
,
claim or
•

.
;,__,/
within the prescriptive period. (Berico v. CA, GR
NO. 96306, 1993)
encumbrance or proceeding
Apparently valid <;>r effective;
which ts

2. But is, in truth and in fact, Invalid, ineffective,

Classifications voidable, or unenforceable, or extinguished
1. Remedial action - to remove cloud on title ( or terminated) or barred by extinctive
2 Preventive action - to prevent the casting of prescription ·
. a (threatened) cloud on the title. (Ari. 476) 3. May be frejudicial to the title. (Paras. supra,
,._,
; p. 302-303)
Requisites of Action to Quiet Title (TICR)
1. Plaintiff must have a legal or equitable !itle
or interest in the real property (Art. 477)
2. _g_loud in such title
{ '
L~
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Distinctions between Action for Quieting of Requisites of "Act of God"

Title and Action for Removal of Cloud 1. The cause of the breach of obligation must •
•• '. 1 ... '· • 1· ACTION TO · . ACTION TO . be independent of the will of the debtor
:,: . i 1 :: : ' • .. QUU:T TITLE. ·RErJIOVE'CLtiUD 2. The event must be either unforeseeable or
To end Procure unavoidable
vexatious cancellation, 3. The event must be such as to render it
litigation in release of an impossible for the debtor to fulfill his
respect to the instrument, obligation in a normal manner
property encumbrance or 4. The debtor must be free from any
Purpose participation in, or aggravation of the injury to
concerned claim in the
plaintiff's title- the creditor. (Nakpil v. CA, GR No. L-
which affects the 47851, 1986)
title or enjoyment
of the property ---- end of topic----
Plaintiff asserts Plaintiff declares
own claim and his own claim and
declares that the title, and at the
claim of the same time
defendant is indicates the
unfounded and source and nature
calls on the of the defendant's
Nature
defendant tci claim, pointing its
justify his claim defects and prays
on the property for the declaration
that the same of its invalidity
may be
determined by
the court .,
,.
Ruinous Buildings and Trees in Danger of
Falling

Obligations and Liability of Owner

If a building, wall, column, or any other
construction is in danger of falling, the owner
shall be obliged to:
1. Demolish it; or
2. Execute the necessary work to prevent
it from falling. (Art. 482)

When a large tree threatens to fall in such a way

as to cause damage to the land or tenement of
another or to travelers over a public or private
road, the owner of the tree shall be obliged lo fell
and remove it. (Art. 482)

Liabilities for Damages

1. Collapse - engineer, architect or contractor
2. Collapse resuliing from total· or partial
damage; no repair made - owner; state may
compel him to demolish or make necessary
work to prevent if from falling
3. If no action - done by government at
expense of owner (Art. 482-483) ·

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C. CO-OWNERSHIP Share goes by

accretion lo the
Co-Ownership - a form of ownership, which other joint-
Effect of Share goes to
exists whenever an undivided thing or right tenants by virtue
death his own heirs.
belongs to different persons. (Art. 484) of their
survivorship or
r Elements (PUI) ius accrecendi.
1. flurality of subjects - many owners If a co-owner
2. Object of ownership must be Undivided is a minor, this
If one joint-tenant
3. Recognition of Ideal shares;no one is an does not
c owner of a specific portion or the property
until it is partitioned. ·
benefit the
others for the
is under legal
disability (like

c How Created (C-FOLDS)

Effect of
disability
purpose of
prescription,
minority), this
benefits the other
against whom
1. Law and
prescription will
2. f ontracts prescription
not run.
3. ~uccession therefore runs
4. fortuitous evenVchance (i.e., commixtion) aaainst them.
5. .Qccupancy (i.e.,2 persons catch a wild
( animal) Rights of Co-Owners
6. Qonation 1. Ownership Over Whole Property
(
Kinds of Co-ownership: 2. Sale I Alienation
1. Ordinary - right of partition exists
2. Compulsory- no right of partition exists a) Individual Interest
Right lo alienate, assign or mortgage own part;
•
(party wall)
( 3. Legal - created by law except personal rights like right to use and
4. Singular/Particular-over particular/ specific habitation
thing
5. Incidental - exists independently of the will A co-owner cannot give valid consent to another
c of the parties
6. Universal - over universal things (co-heirs
to build a house on co-owned property as such
an act would be tantamount to making an

r 7. Contractual- created by contract alteration in the thing owned in common. Entry

into the land without the knowledge of the other
,- co-owners can be categorized as possession by
stealth and W's act of getting only the consent of
one co-owner can be considered as "strategy."
Thus, ii would be a case of forcible entry. (Cruz
Involves a
Involves a v. Catapang, GR No. 164110, 2008)
( . physical
whole. But physical whole.
But there is no b) Entire Property
there is an
ideal (abstract) Any co-owner may file an action under Article
ideal (abstract)
Shares division; each 487 not only against a third person but also
division; each
and all of them against another co-owner who takes exclusive
co-owner
own the whole possession and asserts exclusive ownership of
being the
thing. the property. (De Guia vs. CA, GR No. 120864,
owner of his
ideal share. 2003)
Each co-owner
J Each co-owner A co-owner can sell an undivided part of the
may dispose
may not dispose property co-owned but its validity is limited to his
of his ideal or
of his own share share. Hence, there is no need for consent of
..., undivided
without the
Disposal the other co-owners as to said sale. (Arambulo v.
share (without
of shares consent of all the Nolasco, GR No. 189420, 2014) Same rule
0 boundaries)
without the
rest, because he applies in a mortgage by a co-owner of his share.
really has no (Rural Bank of Cabadbaran v. Nulecio-Yap. GR
{J other's
ideal share. No. 178451, 2014)
consent.
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c) Redemption by Other Co-owners
Right of Redemption
Right to be adjudicated thing (subject to right of
others to be indemnified)
Right to share in proceeds of sale of thing if
thing is indivisible and they cannot agree that it
be allotted to one of them
Note: To be exercised within 30 days trom •
written notice of sale of undivided share of
another co-ownerto a stranger.
Redemptionof the whole property by a co-owner
does not vest in him sole ownership over said
property. Redemption within the period
prescribedby law by a co-owner will inure to the
benefit of all co-owners. Hence, it will not put an
end to existing co-ownership. (Mariano v. CA,
GR No. L-51283, 1989)
Co-owners have the right to alienate their pro
indiviso shares even without the knowledge or
consent of another co-owner as long as the
alienation covers only their shares interests in
the common property. Under the NCC, each co-
owner "shall have the full ownership of his party
and may therefore alienate it." The effect,
however, of the alienationwith respect to the co-
owners shall be limited only to the portion which
may be allotted to him in the division upon the
termination of the co-ownership. {Tabasondra v.
Constantino, GR No. 196403, 2016)
d) Prescription
General Rule: A co-owner cannot acquire the
whole property as against the other co-owners
by acquisitiveprescription.(Art. 494)
Exception: When there is valid repudiation -
prescription shall start from such repudiation.
(Paras, supra, p. 365)
Exception to the Exception: In constructive
trusts, prescription does not run. (Jacinto v.
Jacinto, L-17955, L-17957, 1962) (Paras, supra,
p. 366)
A co-owner cannot sell the property without the
other co..owners' consent; otherwise, the selHng
co-owner's share shat.I be the only one valid.
(Paulmitan v. CA, GR No. 61584, 1992)
While the husband is the recognized
administratorof the conjugal property under the
Civil Code, there are instances when the wife
may assume administrative powers or ask for
•
CIVIL LAW
the separation of property. Where the husband
is absent and incapable of administering the
conjugal property, the wife must be expressly
authorized by the husband or seek judicial
authority to assume powers of administration.
Thus, any transaction entered by the wife
without the court G>,r the husband's authority is •
unenforceable.Bei~g an unenforceablecontract,
the 2"d Contract is s.usceptibleto ratification.The
husband continued•. remitting payments for the
satisfaction of the obligation under the
questioned contract. These acts constitute
ratification of the contract. (Fabrigas v. San
Francisco, GR No. 152346, 2005)
3. Benefits/ Fruits/ Interest/ Income
a) Right to benefits proportional to respective.
interest
b) Stipulationto contrary is void
c) Right to full ownership of his part and fruits.
(Art. 493)
4. Use/ Possession
a) Right to use thing co-owned
b) For purposefor which it is intended
c) Without prejudice to interest of ownership
d) Without preventing other co-owners from
making use thereof. (Art. 486)
5. Management/Administration
a) Right to change purpose of co-ownershipby
agreement. (Art. 486)
b) Right to bring action in ejectment in behalf of
other co-owner. (Art. 487)
c) Right to compel co-owners to contribute to
necessary expenses for preservation of
thing and taxes. (Art. 488)
d) Right to exempt himself from obligation of
paying necessary expenses and taxes by
renouncing his share in the pro indiviso
interest; but can't be made if prejudicial to
co-ownership.(Art. 488)
e) Right to make repairs for preservation of
things; can be made at will of one co-owner;
receive reimbursement therefrom; notice of
necessity of such repairs must be given to
co-owners,if practicable. (Art. 489)
f) Right to ask for partition anytime. (Art. 494)
g) Right of pre-emption
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PARTITION
General Rule: Demandable Anytime
.,. . ,
\ ;
No co-owner shall be obliged to remain in the
co-ownership. Each co-owner may at any time
demand the partition of the thing owned in
common, insofar as his share is concerned. (Art.
494)
Exception: A co-owner may not successfully
demand a partition: (UNLAD)
1. If by Agreement (for a period not exceeding
1 O years, renewable) partition is prohibited.
(Art. 494)
2. When partition is prohibited by a Q.onor or
testator (for a period not exceeding 20 years)
- from whom the property came. (Art. 494)
·3. When partition is prohibited by ,baw. (Art.
(
494)
' 4. When a physical partition would render the
property Y,nserviceable, but in this case, the
property may be allotted to one of the co-
....... owners, who shall indemnify the others, or it
'- will be sold, and the proceeds distributed.
(Art. 495) •
5. When the legal rfature of the common •
property does not allow partition
Requisites of Repudiation: (UKEO)
1. Y,nequivocal acts of repudiation of the co-
ownership amounting to an ouster of the
other co-owners
2. Positive acts of repudiation have been made
Known
3. Evidence is clear and conclusive
4. Qpen, continuous, exclusive, notorious
possession.
(Santos v. Heirs of Crisostomo, 41 Phil. 342,
1921)
Obligations of Co-Owners
1. Share in charges proportional to respective
, . interest; stipulation to contrary is void. (Art.
;..1 485)
2. Pay necessary expenses and taxes - may be
~ ··' exercised by onfy one co-owner. (Art. 490)
3. Pay useful and luxurious expenses - if
determined by majority .
4. Duty to obtain consent of all if thing is to be
altered even if beneficial; resort to court if
1....)
non-consent is manifestly prejudicial. (Art.
491)
5. Duty to obtain consent of majority with regard
to administration and better enjoyment of the
thing; majority means majority in the interest
t··~ .,'
CIVIL LAW
not in the number of co-owners; court
intervention if prejudicial - appointment of
administrator. (Art. 492)
6. No prescription to run in favor co-owner as
long as he recognizes the co-ownership; (Art.
494)
Note: For acquisitive prescription to run in
favor of a co-owner, the requisites are:
a) He must have repudiated the co-
ownership through unequivocal acts:
b) Such act of repudiation is made
known to other co-owners
c) Evidence must be clear and
convincing
7. Co-owners cannot ask for physical division if
it would render thing unserviceable; but can
terminate co-ownership. (Art. 495)
8. After partition, duty to render mutual
accounting of benefits and reimbursements
for expenses. (Art. 500)
9. Each co-owner has full ownership of his part
and of the fruits and benefits pertaining
thereto, and he may alienate, assign or
mortgage the portion which may be allotted •
to him upon the termination of the co-
ownership. It appears that while there is ~
single certificate of title, the three lots are
distinguishable from each other. (Art. 493)
Rights of Third Parties
1. Creditors of a~signees may take part in ··
division and obj~ct if being effected without
their concurrence, but cannot impugn unless
there is fraud oi made notwithstanding their
formal opposition. (Art. 497)
2. Non-intervenors ., retain rights of mortgage
and servitude and other real rights and
personal rights belonging to them before
partition was made. (Art. 499)
CONDOMINIUM ACT (RA No. 4726)
Condominium - an interest in real property
consisting of a separate interest in a unit in a
residential, commercial or industrial building and
an undivided interest in common, directly or
indirectly, in the land on which it is located and in
other common areas of the building.
Any transfer or conveyance of a unit or an
apartment office or store or other space therein
shall include the transfer and conveyance of the
undivided interest in the common areas or in a
proper case, the membership or shareholdings
in the condominium: provided however, that
where the common areas in the condominium
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project are held by the owners of separate units
as co-owners thereof, no condominium unit
therein shall be conveyed or transferred to
persons other than Filipino citizens or •
corporations at least 60% of the capital stock of
which belong to Filipino citizens, except in cases
of hereditary succession.
General Rule: Common areas shall remain
undivided, and there shall be no judicial partition
thereof
Exceptions:
·1. When the project has not been rebuilt or
repaired substantially to its state prior to its
damage or destruction 3 years after damage
or destruction which rendered a material
part thereof unfit for use;
2. When damage or destruction has rendered
~ or more of the units untenable and that
the condominium owners holding more
than 30% interest in the common areas are
opposed to restoration of the projects;
3. When the project has been in existence for
more than 50 years, and the condominium
owners holding in aggregate more than 50o/o
interest in the common areas are opposed
to restoration, remodeling or modernizing;
4. When a project or a material part thereof
has been condemned or expropriated and
the project is no longer viable or that the
condominium owners holding in aggregate
more than 70% interest in the common
areas are opposed to the continuation of
the condominium regime.
5. When conditions for partition by sale set
forth in the declaration of restrlctlons duly
registered have been met.
---- end of topic ---
CIVIL LAW
D. POSSESSION •
Possession_ - is the holding of a thing or
enjoyment of a right (Art. 523)
Viewpoints of Possession
1. Right TO possession (jus possidendi)
Possession de facto • right or incident of
ownership
2. Right OF possession (jus possessionis)
Possession de jure - this is an
independent right of itself, independent of
ownership
Elements of Possession (OIR)
1. Occupancy or .control of the thing or right -
actual or constructive (corpus)
2. [ntent to Possess (animus possidend1)
3. Must be by virtue of one's own ,Right
Extent of Possession:
1. Physical/actual - occupancy in fact of the
whole or at least substantially the whole
2. Constructive - occupancy in part in the
name of the whole under such
circumstances that the I aw extends the
occupancy to the possession of the whole
General Rule: Subject of possession are
things or rights which are susceptible of being
appropriated (Art.530)
Exceptions:
1. Res communes
2. Property of public dominion
3. Discontinuous servitudes
4. Non-apparent servitudes
5. Things specifically prohibited by law
Deg1·ees of Possession
1. Possession without title and in violation of
right of owner (grammatical degree)
Ex. possession of a thief
2. Possession with Juridical title (juridical
possession); juridical relation exist between
the possessor and the owner
Ex. that of a lessee, pledge, depositary,
usufructuary
3. Possession with iust title but not from true
owner,' such that of a possessor in good faith
(possessory right)
Ex. When a buyer acquires a thing from
the seller who was not the true owner or
could not transmit rights.
4. Possession with title in fee simple
- This is the highest degree of
possession.
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Effects of Possession In the Concept of

r:
Acquisition of Possession from the Owner
Viewpoint of Possessor 1. May be converted into ownership through
1. Personal acquisitive prescription
a. Intent to possess Movables: 4 or 8 years
b. Capacity to possess lmmovables:10 or 30 years
l. i
c. Object must be capable of being o lmprescriptible when there is
possessed Torrens certificate title over land
2. Through authorized person (agent or legal 2. Bring actions necessary to protect
representative) possession;
r>.
l a. Intent to possess for principal {not for 3. Ask for inscription of possession;
agent) 4. Demand fruits and damages from one
b. Authority or capacity to possess (for .. unlawfully detaining property.
another)
c. Principal has intent and capacity to Note: Possessor in the concept of owner
possess has in his favor the legal presumption that
1· 3. Through Unauthorized person (but only if he possesses with just title. Burden of
subsequently ratified) proving just title is on the plaintiff who seeks
a. Intent to possess for another (the the recovery of property. (Art. 541)
f .
principal)
b. Capacity of "principal" to possess Requisites for Personal Acquisition
c. Ratification by principal 1. Must have capacity to acquire possession;
'!.. __

2. Intent to possess;
REQUIREMENTS TO RIPEN INTO 3. Possibility to acquire possession.
OWNERSHIP •
r : Possession and ownership are distinct legal
1. KINDS OF POSSESSION concepts. Ownership confers certain rights
to the owner, among which are the rights to
1. Possession in the concept of an owner •
enjoy the thing owned and to exclude other
(Adverse Possession) - possession by the
persons from possession thereof. On the other
owner himself or adverse possessor
hand, possession ls defined as the holding of ·
2. Possession in the concept of holder -
a thing or the enjoyment of a right. Literally,
possessor acknowledges that another is an
. -·-,. to possess means to actually and physically
-r owner (e.g. usufruct, lessee, depositary,
\. occupy a thing with or without a right. Thus, a
bailee in commodatum)
person may be declared an owner but he may
3. Possession In one's own name - personal
not be entitled to possession. (Heirs of Roman
acquisition
Soriano v. CA, GR No. 128177, 2001)
4 · .. 4. Possession in the name of another - agent;
subject to authority and ratification if not
Good faith and Bad Faith
authorized; negotiorum gestio
Possessor in Good Faith is one who is not
""--·" a) Voluntary - as when an agent
aware that there· exists a flaw in the title or mode
possesses for the principal (by virtue of
which invalidates it. (Art. 526)
agreement)
b) Necessary - as when a mother
Possessor in Bad Faith is one who is aware of
possesses for a child still in the maternal
defect. (Art. 526)
womb
c) Unauthorized - this will become the
principal's possession only after there
has been a ratification without prejudice When Bad Faith Bttgins
A possessor in i'good faith may become
to the effects of negotiorum gestio
5. Possession in good faith - not aware of any possessor in bad faj~h when he becomes aware
flaw or defect in his title or mode of of the flaw in his title, or mode of acquisition.
acquisition
6. Possession in bad faith - aware that there Example:
:.)
exists in his title or mode of acquisition some When he is served with judicial summons, even
before such time as when a letter is received
flaw or defect
from the true owner asking the possessor to stop
(
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On Good Faith/Bad Faith:
Mistake upon a doubtful/difficultquestion of law
may be the basis of good faith {Art. 526; Kasilag
v. Rodriguez, GR No. 46623, 1939)
Good faith is always presumed. Burden of proof
lies on the one alleging bad faith. The belief
must be a reasonable,not capricious,one.
Possession is presumed to be enjoyed in the '
same character in which it is acquired, until
contrary is proven. (Art. 527)
While the possessor in good faith is the one who
believes he is the owner, the possessor in the
concept on owner is one who acts as if he is the
owner.
2. ACQUISITION OF POSSESSION
Ways of Acquiring Possession
Possession is acquired in any of the following
ways: · 1. The date of summons; or
1. By the material occupation of the thing or
the exercise of a right;
2. By the fact that the property is subject to the
action of one's will; and
3. By the proper acts and legal formalities
establishedfor acquiring the right. (Republic
v. Ng, G.R. No. 182449, 2013)
Ways of Acquiring Possession
1. Material occupation or exercise of a right
a. Traditio Brevi Manu - when one
already in possessionof a thing by a title
other than ownership continues to
possess the same under a new title, that
of ownership
b. Constitutum Possessorium-when
the owner continues in possession of
the property alienated not as owner but
in some other capacity.
2. By the subjection of the thing or right to
our will
a. Tradltlo Longa Manu - effected by
mere consent or agreement of the
parties
b. Tradltio Simbo/lca - effected by
delivering an object (e.g. key)
symbolizing the placing of one thing
under the control of the vendee
3. By constructive possession or proper acts
and legal formalities established for
acquiring such right of possession
(succession, donation, execution of public
instruments){Paras, supra)
CIVIL LAW
I
Possession through Succession
Possessionof hereditary property:
1. If accepted - deemed transmitted without
interruptionfrom moment of death
2. If not accepted (if heir refuses or is
incapacitated to inherit) - deemed never to •
have possessedthe same. {Art. 533)
Effects of bad faith of decedent on heir
General Rule: Heir shall not suffer the
consequencesof the wrongful possession of the
decedent (bad faith is personal)
Exception: When he becomes aware of the
flaws affectingthe decedent's title
Note: It doesn't matter whether the "facts" which
show that the possessor is not unaware that he
possesses thing properly/improperly is caused
by him or by some other person
Interruptionof good faith may take place at:
2. That of the answer if the date of
summonsdoes not appear.
Effects of possession in good faith is counted
only from the date of the decedent's death (Art.
534)
Minors/Incapacitated:
1. May acquire material possession but not
right to possession;
2. May only acquire them through guardian or
legal representatives(Art. 535)
Acquisition - cannot be acquired through force
or intimidation. A gpssessor who objects must
resort to the courts.. ~
Possession cannot Be:
1. Acquired through force or intimidation as
long as there is a possessor who objects
thereto; {Art. 536)
2. Affected by acts merely tolerated; or
3. Clandestineand unknown acts; or
4. Acts of violence {Art. 537)
Tolerated Acts - acts of little disturbances
which a person, in interest of neighborliness or
friendly relations, permits others to do on his
property, such as passing over the land, tying a
horse, or getting some water from a well.
(Department of Education v. Casibang, GR No.
192268, 2016)
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The execution of a deed of sale is merely a Indemnity for Expenses/ Improvements

prima facie presumption of delivery of
possession of a piece of real property, which is For Possessors in Good Faith:
destroyed when the delivery is not effected 1. Right to be reimbursed for useful expenses
because of a legal impediment. Said with right of retention; owner has option of
construction or symbolic delivery, being merely paying expenses or paying the increase in
presumptive, may be negated by the failure of value of property which thing acquired by
the vendee to take actual possession of the land reason of-useful expenses
sold. (Copuyoc v. De Sola, GR No. 151322, 2. May remove improvements if can be done
2006) w/o damage to principal thing - unless owner
exercises option of paying; possessor in bad
3. EFFECTS OF POSSESSION faith not entitled. (Art. 546 & 547)
r·
RIGHTS OF LEGAL POSSESSOR Regardless of Good Faith/Bad Faith:
r
Right to be respected in his possession; if 1. Right to be indemnified for necessary
disturbed, he shall be protected or restored by expenses;
means established by laws. 2. Possessor in good faith has right or retention
over thing unless necessary expenses paid
Legal presumption in favor of possessor: by owner
1. Possessor who recovers possession 3. Not entitled to payment for luxurious
unjustly lost shall be deemed to have expense but may remove them provided
enjoyed it without interruption. (Art. 561 J principal is not injured - provided owner
c. This is important for purposes of acquisitive does not refund the amount expended (Art.
prescription. 549)
2. Legal presumption of just title (prima facie) 4. Improvements caused by nature or lime to •
and he is not obliged to show or prove it. (Art. inure to the benefit of person who has
541) succeeded in recovering possession. (Ari.
3. Possession of real properly presumes that 551)
movables are included (Art. 542) 5. One who recovers, according to law,
,'' 4. Co-possessor deemed to have exclusively possession unjustly lost is deemed to have
v• possessed part which may be allotted to him; enjoyed it w/o interruption. (Art. 561)
interruption in whole or in part shall be to the
prejudice of all (Art. 543)

Fruits

For Possessors in Good Faith:

Entitled to fruits received before possession is
legally interrupted (natural and industrial -
gathered or severed; civil - accrue daily}
(Art.544)

For Possessors in Bad Faith

If al the time good faith ceases, there are natural
or industrial fruits:
1. Entitled to part of net harvest and part of
expenses of cultivation (proportionate to
time of possession)
2. Owner has option to require possessor to
finish cultivation and gathering of fruits and
give net proceeds as indemnity for his part
of expenses; If possessor in good faith
refuses - barred from indemnification in
other manner (Art. 545)

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Liabilities/ Duties of Possessors

·1. Return of fruits if in bad faith - fruits
legitimate possessor could have received
-2. Bear cost of litigation (Art. 550)

Possessor in good faith not liable for loss or •

deterioration or loss except when fraud and
negligence intervened (Art. 552)

Possessor in bad faith liable for loss or

deterioration even if caused by fortuitous event
(Art. 552)

Person who recovers possession not obliged to

pay for improvements, which have ceased to
exist at the time of occupation (Art. 553)

Possession as a Fact
Possession as a fact cannot be recognized at
the same time in two different personalities (Art.
538)

Exceptions:
1. Co-possessor - there is no conflict of interest,
both of them acting as co-owners, as in the
case of property owned or possessed in
common
2. Possession of different concepts or different
degrees

Rules In Case Of Conflict Or Dispute

Regarding Possession
1. Present possessor shall be preferred
2. If there are 2 possessors, the one longer in
possession
3. If the dates of possession are the same, the
one who has title;
4. If both present a title, the Court will
determine. (Meantime, the thing shall be
judicially deposited.) (Art. 538)

A Notice Of Lis Pendens Is Proper In The

Following Cases: (PORC-Q)
1. Action to Recover possession of real estate
2. Action to Quiet title thereto
3. Action to remove flouds thereon
4. Action for _Eartition
5. Any Qther proceedings of any kind in Court
directly affecting the title to the land or the
use or occupation thereof of the buildings
thereon

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r:
1. Right to reimbursement Right to reimbursement
-' Necessary
2. Right of retention pending full - no right of retention: must vacate
I \ , Expenses propert - recourse to courts
reimbursement
r: 1. Right to reimbursement of amount spent or
t
increase in value - "plus value" - at owner's
,- option (Art. 546)
' 2. Right of retention until paid
r: Useful expenses 3. Right of removal (provided no substantial No right to reimbursement
damage or injury is caused to the principal,
reducing its value) - UNLESS the winner
(owner or lawful possessor) exercises tile
o lion in 1
In general, no right of refund or
retention but can remove if no
,
\ . In general, no right to refund or retention but
substantial injury is caused.
However, owner has OPTION to
can remove if no substantial injury is caused.
( allow:
Luxurious or However, owner has OPTION to ailow:
Possessor to remove if principal
Ornamental Possessor to remove if principal suffers no
suffers no injury
Expenses injury
Or retain for himself (the owner) the
Or retain for himself (the owner) the ornament
ornament by refunding the value it
by refunding the amount spent (Art. 548)
has at the time owner enters into •
possession, which means
depreciated value (Art. 549)
• ~--,,--~~~----1~..:...~~~-~~..:-~~....:.-~~---1
1. On capital ""? charged to owner 1. On capital ""? charged to owner
Taxes and 2. On fruits '7 charged to possessor 2. On fruits '7 charged to owner
Char es 3. Char es '7 rorated 3. Char es '7 to owner

Possessor must return value of

fruits already received as well as
value of fruits which the owner or
legitimate possessor (not the
To possessor possessor in BF) could have
Regarding received with due care or diligence,
gathered or
\ . severed fruits
MINUS necessary expenses for
cultivation, gathering, and
harvesting, to prevent the owner
from being unjustly enriched

Cultivation expenses of gathered fruits - not

I Reimbursed to possessor
reimbursed to possessor
Pro-rating between possessor and owner of
To owner
expenses, net harvest, and char es
\ ' Regarding Production expenses of pending fruits -
pending or indemnity pro rata to possessor: (owner's
ungathered option) money allowing full cultivation and
fruits No indemnity
gathering of all fruits; if possessor refused, he
L shall lose all the right to be indemnified in any
{ t
other manner.
.) Improvements
no longer No reimbursement No reimbursement
L existin

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•
~Liability for Liable in every case, even fortuitous
Only if acting w/ fraudule~t intent .or negligence,
accidental loss
after summons
event (whether before or after ..
or deterioration • service)
Improvements
due to time or To owner or lawful possessor To owner or lawful possessor
nature

POSSESSION OF MOVABLES authority to sell

b) if seller has voidable
Requisites: title which has not been
1. Good faith avoided at the time of
2. Owner voluntarily parted with the sale to the buyer in
possession of the thing good faith for value and
3. In the concept of owner without notice of the
sellers defect in title
Possession in Good Faith - Equivalent to c) if recovery is no longer
Title possible because of
One who has lost or has been unlawfully prescription
deprived of it may recover the thing from d) if sale is sanctioned by
whomever possesses it, ordinarily, w/o statutory or judicial
reimbursement. (Art. 559) authority
e) if possessor obtained
Owner must prove: the goods because he
1 . Ownership of the thing was an innocent
2. Loss or unlawful deprivation or bad faith of purchaser for value and
the possessor holder of a negotiable
document of title to the
Note: If owner acts negligently or voluntarily QOOdS
parts with the thing owned, then he cannot
recover from possessor. Rules on Animals
1. Wild Animals - possessor is the one who
Summary of Recovery or Non-Recovery has control
Prjnci le 2. Domesticated and Tamed Animals - the
Owner may a) Possessor in bad faith possessor does not lose possession as long
recover without b) Possessor in good faith as habitually they return to the possessor's
reimbursement (if owner had lost the premises (Art. 560)
property or been
unlawfully deprived of Note: For ownership, the owner must claim
it) the acquisition being them within 20 days from their occupation by
from a private person another person
'Art. 559
Owner may If possessor acquired the LOSS OF POSSESSION
recover but Object in good faith at a
must reimburse public sale or auction; Loss of Possession (PALA)
the ossessor owner to a the rice aid. A possessor may lose his possession by:
Owner cannot If possessor acquired it In 1. Abandonment of the thing
recover, even if good faith by purchase from renunciation of right; intent to lose the
he offers to a merchant's store/ fairs/ thing; no expectation to recover
reimburse markets in accordance with 2. ~ssignment made to another by onerous or
(whether or not Code of Commerce· & gratuitous title
the owner had Special laws complete transmission of ownership
lost or been a) if owner is by his rights; both possession de facto and de
unlawfully conduct precluded from jure are lost
de rived den in the seller's
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3. Destruction or total boss or the thing or thing E.USUFRUCT
f •
went out of commerce
4. f ossession of another if new possession 1. IN GENERAL
() lasted longer than 1 year (possession as a
fact); real right of possession not lost except
after 10 years (Art. 555) Usufruct - is the right to enjoy the property of
another with the obligation of preserving its form
Possession Not Lost When: and substance, unless the title constituting it or
1. The movable property remain under the the law otherwise provides (Art. 562)
control of the possessor, even for time being
he may not know their whereabouts (Art. Note: Jus utendi + Jus fruendi = Usufruct
556)
,. 2. When agent encumbered immovable
Characteristics Of Elements of Usufruct
·1. Essential - thpse without which it cannot be
property without express authority - except
(' termed usufruct
when ratified (Art. 557)
\ a. A real right, whether registered in the
,, Possession may still be recovered:
Registry of Property or not;
1. Unlawfully deprived or lost (Art. 559) b. Of a temporary nature or duration
2. Acquired at public sale in good faith - with c. Purpose: to enjoy the benefits and
I
reimbursement (Art. 559) derive all advantages from the object as
3. Provision or law enabling the apparent a consequence of normal use or
exploitation
owner to dispose as if he is owner
4. Sale under order of the court
2. Natural - that which ordinarily is present,
5. Purchases made at merchant stores, iairs or but a contrary stipulation can eliminate it •
markets because it is not essential
6. Negotiable document of title a. Obligation of conserving or preserving
the form and substance (value) of the
,. . Possession Equivalent To Title: thing
,. 1. Possession is in good faith; (Art. 559) 3. Accidental - those which may be present or
2. Owner has voluntarily parted with the absent depending upon the stipulation of the
,·· parties
possession of the thing - Possessor Is In
concept of an owner a. Whether It be a pure or a conditional
usufruct
---- end of topic---- b. The number of years it will exist
c. Whether it is in favor of one person or
several, etc. (Paras, supra, p. 572)

from Easement

Limited to a
particular use

' . Coverage
u May be
constituted in
favor or, or
u burdening, a
piece of land
held in
usufruct
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Effect of Usually Not value than the

death extinguished by extinguished !' buildino
death of by the death Cause The owner is The owner or
usufructuary of the owner more or'less lessor is more or
of the passive, and he less active, and •
dominant allows the he makes the
estate usufructuary to lessee enjoy the •
enjoy the thing thing being
Similarities between Usufruct And Easement given in usufruct leased
1. Both are real rights Repairs The The lessee
2. Both rights may be registered, provided that usufructuary has generally has no
usufruct involves real property the duty to make duty to pay for
3. Both may ordinarily be alienated or the ordinary repairs
transmitted in accordance with formalities repairs
set by law (Paras, supra, p. 575) Taxes The The lessee
usufructuary generally pays no
from Lease (Paras, pays for the taxes
annual charges
and taxes on the
Extent Covers all fruits Generally covers fruits
and uses as a only a particular As to A usufructuary The lessee
rule or specific use other may lease the cannot constitute
Nature Always a real A real right only if, things property itself to a usufruct on the
right as in the case of another property leased
a lease over real
property, the A usufruct is considered as an "interest" in real
lease is property, a usufructuary right is one that may be
registered, or is leased and sold. (Reyes v. Grey, GR No. 6869,
for more than 1 1911)
year, otherwise, il
is only a personal Kinds as to Origin
ri ht 1. Legal - created by law such as usufruct of
Creator. Can be created The lessor may or parents over the properties of their children
only by the may not be the 2. Voluntary or conventional
owner, or by a owner as when a. Created by will of the parties inter
duly authorized there is a sub- vivos
agent, acting in lease or when the b. Created mortis causa
behalf of the lessor is only a 3. Mixed - partly created by law and partly by
owner usufructuar will
Origin May be created May be created 4. Prescriptive - is one acquired by a third
by law, contract, as a rule only by person through continuous use of the
last will, or contract; and by usufruct for the period required by law
prescription way of exception
by law (as in the Kinds as to Quantity or Extent
case of an 1. As to fruits
implied new a. Total
lease, or when a b. Partial
builder has built 2. As to object
in good faith on a. Universal - if over the entire patrimony
the land of b. Particular/Singular - if only individual
another a things are included
building, when
the land is
considerably
worth more in

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Kinds as to the Number of Persons Enjoying
the Right
1. Simple - if only one usufructuary enjoys the
right
2. Multiple - if several usufructuaries enjoy the
right
3. Simultaneous - at the same time
4. Successive - one after the other
\,,. Note: In this case, if the usufruct iscreated
by donation, all the donees must be alive, or
at least already conceived, at the time of the
perfection of the donation.
Kinds as to the Quality or Kind of Objects
involved
l_ 1. Usufruct over rights -
a. Rights must not be personal or
intransmissible in character, so present
or future support cannot be an object of
usufruct
2. Usufruct over things
a. Normal (or perfect or regular) - this
involves non-consumable things where
the form and substance are preserved
b. Abnormal (or imperfect or irregulctr) -
involves consumable things
Kinds as to Terms or Conditions
1. Pure - no term or condition
2. With a term or period
a. Ex die - from a certain day
b. In diem - up to a certain day
c. Ex die in diem - from a certain day up to
a certain day
3. With a condition
APPLICATION TO PERSONAL AND REAL
i... PROPERTIES
Some Rules Regarding Usufruct:
1. Usufruct can be constituted even if the object
is subject to Mortgage
2. Usufruct cannot be constituted on an object
subject to Pledge
3. Usufruct can be constituted on an object
subjected previously to a Lease
4. Usufructuary can lease out the property to
other parties
5. Usufructuary can construct improvements
over property subject to usufruct
How to Constitute Usufruct
1. Legal Usufruct - but is not evident in today's
laws
2. Will of parties (act inter vivos or last will)
3. By Prescription (Art. 563)
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CIVIL LAW
2. RIGHTS AND OBLIGATIONS OF
THE USUFRUCTUARY
RIGHTS OF THE USUFRUCTUARY
a. Fruits
Right to Civil, Natural & industrial Fruits
(Jus fruendl and Jus utendi)
a) Civil Fruits Accruing Daily
1. Belong to the usufructuary in
proportion to the time the usufruct
may last (Art. 559)
2. Both stock dividends and cash
dividends are considered civil fruits
b) Industrial and Natural Fruits
1. Fruits pending at the beginning of
the usufruct belong to the
usufructuary.
Note: No necessity of refunding the owner •
for expenses incurred but without prejudice
.to the right of 3rd persons. (Ex. if the fruit4>
had been planted by a possessor in good
faith, the pe,nding crop expenses and
charges shall )e pro-rated between said
possessor and tlhe usufructuary)
2. Fruits ·pending at the termination of
usutruct belong to the owner.
Note: The owner must reimburse the
usufructuary for ordinary cultivation
expenses and for seeds and similar
expenses, from the proceeds of the fruits.
Rights of innocent third parties should not be
prejudiced (Arts. 566-569)
b. Possession and Enjoyment
a) Accessions (artificial or natural)
b) Servitudes and easements
c) All benefits inherent in the property (Art. 571)
c. Lease of Property
General Rule: The lease expires at the end of
the usuf ruct or earlier
Exception: In the case of leases of rural lands
which continues for the remainder of the
agricultural year;
If the usufruct should expire before the
termination of the lease, he or his heirs and
successors shall receive only the proportionate
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share of the rent that must be paid by the
lessees. (Art 568) If the naked owner allows the
lease to continue even after the expiration of the
usufruct, he will be entitled to the rentals
pertaining to such extension.
d. Sale/Alienation of Usufructuary rights ,
Right to transfer usufructuary rights -
gratuitous or onerous; but is co-terminus with
term of usufruct; but cannot do acts of ownership
such as alienation or conveyance except when
property is:
a. Consumable
b. Intended for sale
c. Appraised when delivered; if not
appraised and consumable -· return
same quality (mutuum)
Other Rights of the Usufructuary
1. Right to hidden treasure as stranger (not
entitled as owner but as finder; if somebody
else is the finder, usufruc.tuary gets nothing)
(Art. 566)
2. Right not exempt from execution and can
be sold at public auction by owner
3. Naked owner still have rights but w/o
prejudice to usufructuary; may still
exercise act of ownership ·- bring action to
preserve ownership
4. Right to necessary expenses from
cultivation at end of usufruct
5. Right to enjoy accessions and servitudes
in its favor and all benefits inherent therein
6. Right to make use of dead trunks of fruit
bearing trees and shrubs or those
uprooted/cut by accident but obliged to plant
anew
7 .. Right of usufructuary of woodland -
ordinary cutting as owner does habitually or
custom of place; cannot cut down trees
unless it is for the restoration of
improvement of things in usufruct - must
notify owner first
8. Right to leave dead, uprooted trees at the
disposal of owner with right to demand that
owner should clear and remove them - if
caused by calamity or extraordinary event -
impossible or too burdensome to replace
them
9. Right to oblige owner to give authority
and furnish him proofs if usufruct is
extended to recover real property or real
right or any movable property
10. Right to introduce useful and luxurious
expenses BUT must not alter the form or
CIVIL LAW
substance of the property and with no
obligation of reimbursement on part of
owner; may remove improvement if can be
done without damage
11. Right to set-off improvements against . •
damages he made against the property
12. Right to. administer when property is co-
owned; if co-ownership cease - usufruct of
part allotted to co-owner belongs to
usufructuary - not affected
13. Right to demand the Increase In value of
property if owner did not spend for
extraordinary repairs; when urgent and
necessary for preservation of thing (Arts.
570-582)
When a usufructuary" introduces useful
improvements which he can remove without
damage but the owner wants to retain them and
offers to reimburse him, the usufructuary
prevails. Reason: The right of removal is granted
to him by the law. The rule is different from that
in Art 546 and 548
OBLIGATIONS OF THE USUFRUCTUARY
1. Pay expenses to 3rd persons for cultivation
and production at beginning of usufruct;
those who have right to fruits should
reimburse expenses incurred (Art. 567)
2. Generally, usufructuary has no liability when
due to wear and tear, thing deteriorates,
obliged to return in that state; except when
there is fraud or negligence, then he shall be
liable (Art. 573)
Before the Usufruct Commences
Before entering into Usufructuary:
1. Notice of inventory of property (appraisal of
movables and description of immovables)
2. Posting of security (Art. 583)
Note: Not applicable to parents who are
usufructuary of children except when z"
marriage contracted.
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ceucton Juratorla - promise under oath to
deliver:
1. Furniture necessary for the use of the
,··, usufructuary
'·' 2. House included in the usufruct
3. Implements, tools and other movable
property necessary for an industry or
vocation for which he Is engaged (Aq. 587)
., . Excused - allowed by owner, not required by ..
f : law or no one will be Injured, when the
usufructuary is the donor of the property or when
there is a stipulation in a will or contract
In case the naked owner refuses to make the
exemption, appeal may be made to the courts
and the judge should consider all the
circumstances in deciding whether or not to give
the grant.
For Failure to Give Security
Owner may demand that:
·1. Immovables be placed under administration;
2. Negotiable instruments can be converted
into registered certificates or deposited in •
bank;
3. Capital and proceeds of sale of movables be
invested in safe securities;
4. Interest on proceeds or property under
administration belong to usufructuary:
5. Owner may retain property as administrator
with an obligation to deliver fruits to
usufructuary until he gives sufficient security;
6. Effect of security is retroactive to day he is
entitled to fruits.
Note: Unless exempted by owner.
During the Usufruct
1. Alteration of form and substance
2. Exercise of diligence
3. Obligation to exercise diligence:
a) Take care of property as a good father
:.\..i
of family
b) Liable for negligence and fault of person
who substitute him
4. Repairs
Obligation to make ordinary repairs -
wear and tear due to natural use of thing
and are indispensable for preservation:
' I
with or without the fault of the
usufructuary (If at fault, plus damages) ;
owner may make them at expense of
usufructuary occurred during
existence of usufruct
5. Charges and Taxes
l
c, ;
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CIVIL LAW
a. Obliged to make expenses due to his
fault; cannot escape by renouncing
usufruct :
b. Pay legal~· interest from extraordinary
expenses made by owner
c. Payment of expenses, charges and
taxes affecting fruits
d. Payment of interest on amount paid by
owner charges on capital
e. Expenses, cost and liabilitles In suits
brought with regard to usufructuary -
borne by usufructuary
6. Insurance
Other obligations of the usufructuary
1. Obliged to notify owner of act of 3'd person
prejudicial to rights of ownership - he is
liable if he does not do so for damages - as
if it was caused through his own fault
2. If usufruct is constituted on animals - duty
bound to replace dead animals that die from •
natural causes or became prey; if all of them
perish w/o fault but due to conteqious
disease · I uncommon event - deliver
remains saved; if perish in part due to
accident - continue on remaining portion; if
on sterile animals - as if fungible - replace
same kind & quality (Arts. 583-602)
Rights of the Naked Owner
1. Alienate thing (Art. 581)
2. Cannot alter form or substance (Art. 581)
3. Cannot do anything prejudicial to·
usufructuary (Art. 581)
4. Construct any works and make any
improvement provided it does not diminish
value or usufruct or prejudice right of
usufructuary (Art. 595)
Obligations of the Naked Owner
1. Extraordinary . expenses; usufructuary
obliged to infotm owner when urgent and
there is the nee'd to make them
2. Expenses after --fenunciation of usufruct
3. Taxes and expenses imposed directly on
capital ;
4. If property is mortgaged, usufructuary has
no obligation to pay mortgage; if attached,
owner to be liable for whatever is lost by
usufructuary
5. If property Is expropriated for public use -
owner obliged to either replace it or pay
legal interest to usufructuary of net proceeds
of the same
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3. EXTINGUISHMENT provision of law, the usufructuary, do not have

the right to reimbursement for the improvements
Extinguishment of Usufruct: (PLDTERM) they may have introduced on the property.
1. f rescription - use by 3rd person (Moralidad vs. Parnes, GR No. 152809, 2006) •
2. Iermination of right of person constituting
usufruct • -......,...- end of topic--.--
3. Total ,boss of thing
4. .Qeath of usufructuary - unless contrary
clearly intention appears
5. gxpiration of period of usufruct for which it
was constituted or by the fulfillment of any
resolutory condition provided in the title
creating the usufruct
6. B,enunciation of usufructuary - express
7. Merger of usufruct and ownership in the
same person (Art. 603)

Important Points:
1. Loss in part - remaining part shall continue
to be held in usufruct (Art. 604)
2. Usufruct cannot be constituted in favor of a
town, corporation or association for more
than 50 years (Art. 605)
3. Usufruct constituted on immovable whereby
a building is erected - and building is
destroyed - right to make use of land and
materials
4. If owner wishes to construct a new building
- pay usufructuary the value of interest of
land and materials
5. Both share in insurance if both pay premium;
if owner only - then proceeds will go to
owner only (Arts. 607-608)
6. Effect of bad use of the thing - owner may
demand the delivery of and administration of
the thing with responsibility to deliver net
fruits to usufructuary at termination of
usufruct (Art. 610)
7. Thing to be delivered to owner with right of
retention for taxes and extraordinary
expenses w/c should be reimbursed,
security of mortgage shall be cancelled (Art.
612)

In case of expropriation: when naked owner

alone was given indemnity - he has the option to
replace with equivalent thing or pay usufructuary
legal interest; usufructuary alone was paid -
must give to naked owner and compel return of
interest; if both - each own indemnity, the
usufruct extinguished (Art. 609)

If the builder is a usufructuary, his rights will be

governed by Arts. 579 and 580. In case like this,
the terms of the contract and the pertinent
provisions of law should govern. By express
Page 82 of 432
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F. EASEMENTS· from executing an act which would be lawful

f r ·\.
i Easement - is an encumbranceimposed upon
I
!
r an immovable for the benefit of another
immovable belonging to a different owner. The
f
immovable in favor of which the easement is
established is called the dominant estate; that
:
r·~.,
which is subject thereto, the servient estate.
'.
(Art. 6'13)
t:
·- An easement or servitude is a real right on
another's property, corporeal and immovable,
r
~ whereby the owner of the latter must refrain from
doing or allowing somebody else to do or
r:
something to be done on his or her property, for
the benefit of another person or tenement. (Pilar
Development Corporation v. Dumadag, GR No.
194336, 2013)
1. MODES OF ACQUIRING
EASEMENTS
Continuous and apparent easements are •
acquired either by virtue of a title or by
prescriptionof ten years. (Art. 620)
•v,
HOW EASEMENTSARE ACQUIRED
1. If continuousand apparent
a. By title
b. By prescription-ten years
2. If discontinuousand apparent-only by title
3. If continuous and non-apparent-only by
title
4. If discontinuous and non-apparent-only by
title
without the easement. (Art. 621)
APPLICABILITY
EASEMENTS
OF ARTICLE
ACQUIRABLE
OF
BY
PRESCRIPTION:RULES
1. If the easement is positive, begin counting
the period from the day the dominant estate
began to exercise it
2. If the easement is negative, begin counting
from the time of notarial prohibition was
made on the servient estate
3. The notarial prohibition should be given by
the owner of the dominant estate
Continuous nona,pparent easements, and
discontinuous ones, whether apparent or not,
may be acquired only by virtue of a title. (Art.
622)
Easements That May Be Acquired Only By •
Title
1. Continuousnon-apparenteasements
2. Discontinuousapparent easements
3. Discontinuousnon-apparenteasements
Easement of Aqueduct
The easement of aqueduct is considered
continuous and apparent and may therefore be
acquired by prescription
The absence of a document or proof showing
the origin of an easement which cannot be·
acquiredby prescriptionmay be cured by a deed
of recognitionby the owner of the servient estate
or by a final judgment. (Art. 623)

Meaning Of Title Applicability of Article 623

1. Title here doesn't necessarily mean
,··
I._. document
2. It means a juridical act or law sufficient to
create the encumbrance.
Prescription
In order to acquire by prescription the
easements referred to in the preceding article,
the time of possession shall be computed thus:
in positive easements,from the day on which the
owner of the dominant estate, or the person who
may have made use of the easement,
c: commenced to exercise it upon the servient
estate; and in negative easements,from the day
c on which the owner of the dominant estate
forbade, by an instrument acknowledgedbefore
a notary public, the owner of the servient estate,
1. Continuousnon-apparent
2. Discontinuouseasements
How Proof May Be Given of the Existence of
The Easements
1. By deed of recognitionby the servient owner
2. Final judgment
The existence of an apparent sign of easement
between two estates, established or maintained
by the owner ·of both; shall be considered,
should either of them be alienated, as a title in
order that the easement may continue actively
and passively, unless, at the time the ownership
of the two estates is divided, the contrary should
be provided in the title of conveyanceof either of
them, or the sign aforesaid should be removed
before the execution of the deed. This provision
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shall also apply in case of the division of a thing
owned in common by two or more persons. (Arl.
624)
Apparent Signs
Apparently Exists
Of Easement .
That
1. Originally no true easement exists here
because there is only one owner
2. The article speaks of apparent visible
easements
3. Outward indication
4. It is not essential that there be apparent sign
between the two estates; it is important that
there is an apparent sign that the easement
exists between the two estates
Rules
1. Before the alienation, there is no true
easement
2. After alienation
a. There arises an easement if the sign
continues to remain there unless there
is a contrary agreement
b. There is no easement if the sign is
removed or if there is an agreement to
this effect
Applicability
1. Whether only one or both estates is alienated
2. Even if there be only one estate but there are
two portions thereof, as long as later on there is
a division of the ownership of the said portion
3. Even in the case of division of common
property, though this is not an alienation
When It Doesn't Apply
Doesn't apply in case both estates or both
portions are alienated to the same owner, for
then there would be no true easement unless
there is a further alienation, this time, to different
owners
Upon the establishment of an easement, all the
rights necessary for its use are considered
granted. (Art. 625)
Grant of Necessary Rights For The Use Of
The Easement
1. Unless the necessary rights are also granted,
the right to the easement itself is rendered
nugatory
2. Necessary rights Include repair, maintenance,
accessory easements, such as the right of way if
the easement is for the drawing of water
CIVIL LAW
3. Termination of the principal easement
necessarily ends all the secondary or accessory
easements
•
The owner of the dominant estate cannot use
the easeme·nt ext;:ept for the benefit of the
immovable origlnal.l_y contemplated. Neither can
he exercise the easement in any other manner
than that previously established. (Art. 626)
KINDS OF EASEMENTS II
According to Purpose of Easement or the
Nature of limitation
1. Positive - one which imposes upon the
servient estate the obligation of allowing
something to be done or of doing it himself.
(Art. 616)
2. Negative - that which prohibits the owner of
the servient estate from doing something
which he could lawfully do if the easement
did not exist. (Art 616)
According to Party Given the Benefit
1. Real (or predial) - for the benefit of another
belonging to a different owner (e.g.
easement of water where lower estates are
obliged to allow water naturally descending
from upper estates to flow into them) (Art.
614)
2. Personal - for the benefit of one or more
persons or community (e.g. easement of
right of way for passage of livestock) (Art.
614)
According to the Manner They are Exercised
1. Continuous - their use is incessant or may
be incessant; (Art. 615)
Note: For legal purposes for acquisitive
prescription, the easement of aqueduct is
considered continuous; easement of light
and view is also continuous.
2. Discontinuous - used at intervals and
depend upon the acts of man (E.g. right of
way because it can only be used if a man
passes). (Art. 6t5)
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According to Whether or Not their Existence Characteristics of Easement

is Indicated
1. Apparent - made known and continually
kept in view by external signs that reveal the
' '
use and enjoyment of the same (Ex. right
of way when there is an alley or a
permanent path). (Art. 615)
2. Non-appar~nt - show no external indication
\. .: of their existence (Ex. easement of not ...
building to more than certain height). (Art.
615)
,--.
\ . Doctrine of Apparent Sign - Easements are
inseparable from the estate to which they
actively or passively pertain. The existence of
the apparent sign under Art. 624 is equivalent to
/ . a title. It is as if there is an implied contract
between the two new owners that the easement
should be constituted, since no one objected to
the continued existence of the windows. (Amor v.
Florentino, GR No. L-48384, 1943)
According to Right Given •
; 1. Right to partially use the servient estate (Ex.
' Right of Way);
r \.
2. Right to get specific materials or objects
from the servient estate;
3. Right to participate in ownership (Ex.
easement of party wall)
4. Right to impede or prevent the neighboring
estate from performing a specific act of
ownership
According to Source or Origin and
Establishment of Easement
1. Voluntary - constituted by will or agreement
of the parties or by a testator. (Art. 619)
2. Mixed - created partly by agreement and
partly by law
3. Legal - constituted by law for public use or
~--·'
for private interest. (Art. 619)
·,
- . . . ...
How Established:
1. By law (Legal)
2. By the will of the owners (Voluntary)
3. Through prescription (only for continuous
and apparent easements) (Art. 619)
Resultantly, when the court says that an
easement exists, it is not creating one. For,
even an injunction cannot be used to create one
'-·'
as there is no such thing as a judicial easement.
The court merely declares the existence of an
easement created by the parties. (La Vista
Association v. CA, GR No. 95252, 1997)
u
,.. ~·;
1. A real right - an action in rem is possible
against the possessor of the servient estate
2. Imposable only on another's property
3. Jus in re aliena - real right that may be
alienated although the naked ownership is
maintained
4. Limitation or encumbrance on the
servient estate for another's benefit
5. There is inherence or inseparability from
the estate to which it belongs
6. It is indivisible (even if the tenement be
divided)
7. It is intransmissible (unless the tenement
affected also be transmitted)
8. It is perpetual (as long as the dominant
and servient estate exists unless sooner
extinguished by the causes enumerated in
the law). (Paras, supra, p. 646-647).
2. RIGHTS AND OBLIGATIONS OF •
THE OWNERS OF THE DOMINANT
• AND SERVIENT ESTATES
Rights Of Dominant Owner
1. Exercise all rights necessary for the use of
the easement. (Art. 625)
2. Make any works necessary for the use and
preservation of the servitude; subject to the
following conditions: (Art. 627)
a. The works. shall be at his expense, are
necessary· for the use and preservation
of the servitude;
b. They do not alter or render the servitude
more burdensome;
c. The dominant owner, before making the
works, must notify the servient owner;
and
d. They shall be done at the most
convenient time and manner SQ as to
cause the least inconvenience to the
servient owner
3. Renounce the easement totally if he desires
to exempt himself from contribution to
necessary expenses. (Art. 628)
4. Ask for mandatory injunction to prevent
impairment of his use of the easement.
(Resolme v. Lazo, GR No. L-8654, 1914) ·.
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Obligations Of The Dominant Owner
1. Notify the servient owner of works
necessary for the use and preservation of
the servitude. (Art. 627)
2. Contribute to the necessary expenses if
there are several dominant estates in •
proportion to the benefits derived from the
works. (Art. 628)
3. Cannot alter or impose added burden on the
easement. (Art. 627)
a. Cannot use the easement except for
benefit originally contemplated
b. In easement of right of way, he cannot
increase the agreed width of the path
nor deposit soil or materials outside the
boundariesagreed upon
4. Choose the most convenient time and
manner in making the necessaryworks as to
cause the least inconvenience to the
servient owner. (Art. 627)
Rights of the Servient Owner
1. Retain ownership of the portion on which the
easement is established, and may use it in
such a manner as not to affect the exercise
of the easement. (Art. 630)
2. Change the place or manner of the use of
the easement, provided it he equally
· ·.· ·, · , I'.,· r· 1
I ti ,·I
. ~· ... U::it: .LI It JJh.lpt:i! Ly ~1.hJJt:1~~- VI ult;_ l:;'-1_.:>t::I I 1t:I,'~, ...
.• -~. ,lj :··mness 'tfte're·rs·ariagfeement"to the contrary.
(Art. 628)
The owner of the servlent estate retains the
ownership of the portion on which the easement
is established and may use the same in such a
manner so as not to affect the exercise of the
easement. (Pilar Development Corporation v.
Dumadag, GR No. 194336, 2013)
Obligations of the Servient Owner
1. Contribute to the necessary expenses in
case he uses the easement, unless there is
an agreementto the contrary
2. Not to impair the use of the easement
3. In case of impairment, to restore conditions
to the status quo at his expense plus
damages (Arts. 627-630)
CIVIL LAW
3. MODES OF EXTINGUISHMENT
How extinguished: (MER·RU.N) •
1. Merger in the same person of the ownership
of the . dominant and servient estates;
(absolute,complete, not temporary);
2. Non-user for 1 O years
a) If discontinuous easements - period
computed from the day it was ceased to
be used
b) If continuous - period from the day on
which an act contrary to the same took
place
3. Expiration of the term or fulfillment of the
condition (if; temporary or conditional)
4. B,enunciationof the owner of the dominant
estate
5.. Redemption agreed upon between owners
of the dominant and servient estates
6. When either or both estates fall into a
condition that the easement cannot be Y,sed;
revived if subsequent condition should again
permit its use, unless sufficient time for
prescriptionhas elapsed (Art. 631)
4. LEGAL:vs. VOLUNTARY
EASEMENTS
(' ')()\
.·. ·.:·.
' • : :;..,.... ' ~ I' :,;. • •. ,,·' I •• •" ·. . '
Legal Easements - those imposed by law
having for their object either public use or the
interest of private persons. (Art. 634)
They shall be governed by the special laws and
regulations relating thereto, and in the absence
thereof, by the Civil Code. (Art. 635)
VOLUNTARY EASEMENTS
Those which may be establishedby the owner of
a tenement of piece of land as he may deem
suitable, and in the manner and form which he
may deem best, provided that he does not
contravenethe laws. public policy or public order.
(Art. 688)
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;
I
5. KINDS OF LEGAL EASEMENTS: 3. Indemnify the owner of the servient estate
1. Public - for public or communal use in the manner determined by the laws and
2. Private - for the interest of private regulations
persons/private use, including those relating
to (Art. 637-687): (WALL-DRIP) Easement of aqueduct is continuous and
a. Waters apparent even though the flow of water may not
b. Bight of Way be continuous (Arts.
.... 637-638)
I I
c. ,bight and View
·- /
d. farty Wall b. ~ight of way
e. Qrainage of Building
f. [ntermedlate Distances Easement of Right of Way - right granted to a
g. Against Nuisance person or class of persons to pass over the land
r: h. _bateral and Subjacent Support of another by using a particular pathway therein,
/•
to reach the farmer's estates, which have no
;
\. a. Relating to waters adequate outlet to a public highway, subject,
however to payment of indemnity to the owner of
Easement Relating To Waters the servient estate (Art. 649)
Lower estates are obliged to receive:
1. The waters which naturally and without the Requisites: (OIL-PAN)
intervention of man descend from the higher 1. Claimant must be an Owner of enclosed
estates; as well as immovable or one w/ realright •
2. Stones or earth which they carry with them 2. _t!o adequate outlet to public highway
~--.
3. Right of '!Jay is ~bsolutely necessary
Owner of the lower estate cannot construct 4. ,beast prejudicial
works, which will Impede the easement, nor can 5. Isolation not due to claimant's own act
r·
L the owner of the higher estate make works, 6. froper indemnity
which will increase the burden Note: Burden of proof of proving the requisites Is
on the owner of the dominant estate
Banks of rivers and streams, although of private
ownership, are subject throughout their entire On Indemnity
Not compulsory if the isolation of the immovable
length and within a zone of 3 meters along their
is due to the proprietor's own acts
margins, to the easement of public use in the
general interest of navigation, floatage, fishing
Right of way is granted without indemnity if land
r: and salvage
was acquired by and is surrounded by the other
estates of the vendor, exchanger or co-owner
Estates adjoining the banks or navigable and
floatable rivers are, subject to the easement of through:
towpath. for the exclusive service of river 1. Sale
navigation and floatage
2. Exchange
3. Partition
,,.... Compulsory easements for drawing of water and
T
\..j
•
Extinguishment: Legal or Compulsory Right
for watering animals can be imposed for reasons
of public use in favor of a town or village, after of Way
payment or the proper indemnity
1. When the dominant estate is joined to
another estate (such as when the dominant
owner bought an adjacent estate) which is
Use of any water by anyone can be disposed by
abutting a public road, the access being
having the water flow through the intervening
estates but is obliged. to do the following: · adequate and convenient
~- J
1. Prove that he can dispose of the water 2. When a· new road is opened giving access to
and that It Is sufficient for the use intended the isolated estate
2. Show that the proposed right of way is the 3. In both cases: must substantially meet the
most convenient and least onerous to 3rd needs of the dominant estate. Otherwise,
persons the easement may not be extinguished.
4. Exlinguishment NOT ipso facto; the servient
estate may demand; if he chooses not to,
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the easementremains and he has no duty to
refund indemnity
5. If extinguished, must return the amount
received as indemnity to the dominantowner
without any interest. Interest shall be •
deemed in payment for the rent.
Article 830 expressly provides that "[t]he owner
of the servlent estate retains ownership of the
portion on which the easement Is established,
and may use the same in such manner as not to
affect the exercise of the easement." Thus, the
owners of the servient estate retained ownership
of the road right-of-wayeven assuming that said
encumbrancewas for the benefit of the owner of
the dominant estate. (Mercader, Jr. vs. Bardilas,
GR No. 163157, 20·16)
Under the law, and unlike in purchase of a
property, should the right of way no longer be
necessary because the owner of the dominant
estate has joined it to another abutting on a
public highway, and the servient estate demands
that the easement be extinguished,the value of
the property received by the servient estate by
way of indemnity shall be returned in full to the
dominant estate. (De Guzman v. Fi/invest
Development Corporation. GR No. 191710,
2015)
The only servitude which a private owner is
required to recognize in favor of the government
is the easement of a public highway, way,
private way established by law, or any
government canal or lateral that has been pre-
existing at the time of the registrationof the land.
If the easement is not pre-existing and is
sought to be imposed only after the land has
been registeredunder the Land RegistrationAct,
proper expropriationproceedingsshould be had,
and just compensation paid to the registered
owner. (Estaban v. Vda. De Onorio, GR No.
146062, 2001)
affect the ordinary use, free ·enjoyment and
disposal of the property or through restrictions •
and limitations that are · inconsistent with the
exercise of the attributes of ownership or whe!l
the introduction of structures or objects which,
by their nature, create or increase the probability
of injury, death upon or destruction of life and
property found on the lend Is necoHary. thon
the owner should be compe11sated for the
monetary equivalent of the land (National Power
Corporation vs. Tiangco, GR No. 170846, 2007).
c. Light and View
Easement of Light and View
Period of prescriptionfor the acquisition shall be
counted:
1. From the time of opening of the window, if
through a party wall
2. From the time of the formal prohibition upon
the proprietor of the adjoining land. if
window is through a wall on the dominant
estate (Art. 668)
An easement of light and view can be acquired
through prescription of 1 O years counting from
the time when the owner of the dominant estate
formally prohibits, through a notarial instrument,
the adjoining lot. owner from blocking the view of
a window located within the dominant estate.
(Alolino v. Flores,GR No. 198774, 2016)
--- end of topic ------

Easement of right of way is discontinuous. It

may be exercised only if a person passes or sets
foot on somebody else's land. An easement of
right of way of railroad tracks is discontinuous
because the right is exercised only if and when a
train operation by a person passes over
another's property. (Bomedco v. Valdez, GR No.
124699. 2003)

If the easement is intended to perpetually or

indefinitely deprive the owner of his proprietary
rights through the imposition of conditions that
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G. NUISANCE
' ... \
Nuisance - is any act, omission, establishment,
business, condition of property, or anything else
• ' I
which:
1. Injures or endangers the health or safety of
others
2. Annoys or offends the senses
3. Shocks, defies or disregards decency or
morality
4. Obstructs or interferes with the free passage
of any public highway or street, or any body
r of water
5. Hinders or impairs the use of property (Art.
694)
Based on case law, the term "nuisance" is
deemed to be "so comprehensive that it has
been applied to almost all ways which have
interfered with the rights of the citizens, either in
person, property, the enjoyment of his property,
or his comfort." (Rana vs. Uy, GR No. 192861 &
192862, 2014)
i
'-
NOTE: Lapse of time cannot legalize any
,- .
; nuisance, whether public or private
v .
Kinds of Nuisances according to Number of
Persons Affected
1. Public (or common) nuisance - affects a
community or neighborhood or considerable
number of persons
2. Private nuisance - affects an individual or
few persons only (Art. 695)
r:
Other Classification
1. Nuisance Per Se - always a nuisance
because of its nature regardless of location
or surroundings
2. Nuisance Per Accidens- nuisance by
reason of location, surrounding or in the
manner it is conducted or managed. (De
Leon, supra, p. 554-555).
A basketball court, an object of recreation in a
barangay, is a mere nuisance per accidens and
not per se, as it does not pose an immediate
danger to safety of persons and property. Hence,
it can not be summarily abated. (Cruz v.
Pandacan Hiker's Club, GR No. 188213, 2016)
{ .
.. _,
.(
.,
. .. ·
CIVIL LAW
Doctrine of Attractive Nuisance
Attractive Nuisance dangerous
instrumentality or appliance which is likely to
attract children to play
Reason for the Doctrine: The principal reason
for the doctrine is that the condition or appliance
in question although its danger is apparent to
those of age, is so enticing or alluring to children •
of tender years as to induce them to approach,
get on or use it, and this attractiveness is an
implied invitation to such children. (Hidalgo
Enterprises, Inc. v. Balandan, GR No. L-3422,
1952)
One who maintains on his premises dangerous
lnstrumentalltles or appliances of a character
likely to attract children in play, and who fails to
exercise ordinary care to prevent children from
playing therewith or resorting thereto, is liable to
a child of tender years who is injured thereby,
even if the child is technically a trespasser in the •
premises. (Hidalgo Enterprises, Inc. v.
Balandan,, GR No. L-3422, 1952)
Note: Generally not applicable to bodies of
water, artificial as well as natural In the absence
of some unusual condition or artificial feature
other than the mere water and its location.
Remedies Against a Public Nuisance
1. Prosecution under the Penal Code or any
local ordinance
2. Civil action
3. Extra-judicial abatement (Art. 699)
It is a standing jurisprudential rule that unless a
nuisance is a nuisance per se, it may not be
summarily abated. Judicial intervention is
neceesary when the nuisance is not a nuisance
per se. (Rana v. Uy, GR No. 192861 & 192862,
2014
All Remedies May be Simultaneously
Pursued to Remove a Nuisance
Aside from the remedy of summary abatement
which should be taken under the parameters
stated in Art. 704 (for public nuisances) and 706
(for private nuisances) a orivate person whose
property right was invaded or unreasonably
interfered with by the act, omission,
establishment, business or condition of the
property of another may file a civil action to
recover personal damages .
Abatement may be judicially sought through . a
civil action therefor if the pertinent requirements
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under the Civil Code for summary abatement, or H. MODES OF ACQUlRING

the requisite that the nuisance Is a nuisance per
se, do not concur.
OWNERSHIP •

To note,. the remedies of abatement 'and • Modes of Acquiring Ownership (OLD-TIPS) •

damages are cumulative; hence, both may be 1. Occupation
demanded. (Rana v. Uy, GR No. 192861 & 2. Law
192862, 2014) 3. Donation
4. Tradition
Requirements for Abatement of a 5. intellectual Creation
Public/Private Nuisance by a Private Person: 6. Prescription
1. Demand has been made 7. ~uccession (Ar.t. 712)
.:
2. Demand has been rejected Mode - is the)' process of acquiring or
3. Abatement be approved by the district health transferring ownership
officer and executed with the assistance of
the local police Title - is the juridical act, right or condition which
4. Value of the destruction does. not exceed gives the juridical justification for a mode or
P3,000
5. If public nuisance, it must be specially
means to their acquisition but which in itself is
insufficient to produce them. (De Leon, supra, p.
injurious to him (Art. 704) 578-579)

When Liable for Damages for Extrajudicial Difference between Mode and Title
Abatement of Nuisance ,,
..
.. ·MODE,· JiTLE··
Directly and Serves merely to give
A private person or a public official extrajudicially
immediately produces the occasion for its
abating a nuisance shall be liable for damages:
a real right acquisition or
1. If he causes unnecessary injury;
existence
2. If an alleged nuisance is later declared by
The cause The means
the courts to be not a real nuisance. (Art.
Proximate cause Remote cause
707)
Essence of the right Means whereby that
which is to be created essence is transmitted
Remedies Against a Private Nuisance
or transmitted
1. Civil action
2. Extra-judicial abatement (Art. 705)
Original Mode ~ there being no previous or pre-
existing or preceding title or right of another.
Note: Even if nuisance no longer exists, the
Derivative Mode - there was a preceding owner.
aggrieved person may still pursue a civil action
(De Leon, supra, p. 580)
for damages suffered during the existence of the
nuisance.
Modes Of Extinguishing Ownership
1. Absolute - all persons are affected
Effects on Owners
a. Physical loss or destruction
Owner of nuisance property is not entitled to
b. Legal loss or destruction (when it
compensation. (Art. 436)
goes out of the commerce of man)
2. Relative - only for certain persons for
Subsequent owner of the property, having full
others may acquire their ownership
knowledge of the existence of the nuisance, did
a. Law
not remove the nuisance is solidarily liable for
b. Succession
the injuries and da~ages caused.
c. Tradition as a consequence of
certain contracts .
d. Donation
---- endoftopic---- e. Abandonment
f. Destruction of the prior title or right
(like expropriation, rescission,
annulment, fulfillment of a resolutory
condition)
g. Prescription
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{'

I
r-. Kinds of Animals ,
1. OCCUPATION 1. Wild - considered res nullius when not yet
captured; when captured and escaped -
'
r. The acquisition of ownership by seizing becornes res nu/lius again
corporeal things w/c have no owner, made with 2. Domesticated animals - originally wild but
the intention of acquiring them, and have been captured and tamed; now belong
accomplished according to legal rules. (De Leon, to their capturer; has habit of returning to
( supra, p. 585). premises of owner; becomes res nul/ius if
they lose that habit of returning and regain
their original state of freedom
r Requisites:
1. Seizure or apprehension 3. Domestic/tamed animals born and
2. Property seized must be corporeal movable ordinarily raised under the care of people;
( property become res nullius when abandoned by
3. Property must be susceptible of owner. (De Leon, supra)
( appropriation
4. Intent to appropriate Rules When Movable Found is not Treasure:
5. Compliance with requisites or conditions of 1. Must be returned to owner
the law (De Leon, supra, p. 585). 2. If finder retains the thing found - he may be
r charged with theft
\.. Note: The holding of the material is not required 3. If owner is unknown, the movable must e
as long as there is right of disposition. deposited with the mayor; mayor shall
announce publicly the finding of the movable
Abandoned property - res derelicta, a thing is • for 2 weeks in a way he deems best
considered abandoned when: 4. If owner does not appear 6 months from
1. The spes recuperandi (expectation to publication, the movable shall be awarded to
r the finder
recover) is gone.
\.
2. The an/mo revertendl (intention to return or 5. If owner appears, Ile Is obliged to pay the
to have it returned) has been given up by finder 1/10 of value of property as price
the owner. (De Leon, supra, p. 587). 6. If movable is perishable or cannot be kept
without deterioration or without expenses, it
Un-owned Property- res nullius shall be sold at public auction 8 days after the
1. Without an owner publication. (Art. 719)
2. Intent to appropriate
3. Compliance with the requisites or conditions Ownership of a Piece of Land Cannot be
of the law Acquired by Occupation
Land that does not belong to anyone is
Some Kinds of Property Acquirable by presumed to be public land. When a land is
Occupation without an owner, it pertains to the State.
1. Those without an owner. like animals that are
object of hunting and fishing Note: While land cannot be acquired by
2. Hidden treasure (he gets half as finder, by occupation, it may be acquired by prescription
occupation, provided he is not a trespasser). (which is an altogether different thing).
(Art. 154)
3. Abandoned movables Abandonment requires:
1. A clear and absolute intention to renounce a
Note: Stolen property cannot be the subject of right or a claim or to abandon a right or
occupation. property; and
2. An external act by which that intention is
Note: Hunting and fishing are regulated by expressed or carried into effect. (De Leon,
special laws: Act 2590; Fisheries Act 4003 as supra)
amended by C.A.116, C.A. 147 and R.A. 659;
Act 1499 as amended by Act 1685; P.O. 534; The intention to abandon implies a departure,
Municipal ordinances. with the avowed intent of never returning,
resuming or claiming the right and the interest
that have been abandoned. (Castellano v.
Francisco. GR No. 155640, 2008)
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CIVIL LAW

2. DONATION Kinds As to Consideration

a. Nature
An act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another,
who accepts it (Art. 725)
Donation is perfected from the moment the
donor knows of the acceptance by the donee
(Art. 724)
Characteristics
1. Unilateral - obligation imposed on the donor
2. Consensual - perfected at time donor knows
of acceptance
1. Pure and Simple - When the cause of the •
donation is the pure liberality of the donor in
consideration of the donee's merits,
2. Remuneratory or compensatory
Donation is given out of gratitude on account
of the services rendered by the donee to the
donor, provided the services do not
constitute a demandable debt.
3. Modal - When the donation imposes upon
the donee (necessarily future) a burden less
than the value of the thing given
4. Onerous - the value of which is considered
the equivalent of the consideration for which
it is given and thus governed by the rules of
obligations and contracts

Requisites of Donation (CIDAF) Note: Where a contract is seemingly a

1. The donor must have fapacity to make the remuneratory donation but is silent as to the
donation of a thing or right value of the burden imposed on the donee
2. Donative [ntent (animus donand1) or intent to of a thing of undetermined value, the law on
make the donation out of liberality to benefit contract instead of the law on donations
the donee should govern. (Reyes v. Asuncion, GR No.
3. Delivery, whether actual or constructive of 196083, 2015)
ttie thing or right donated
4. Donee must ~ccept or consent to donation As to Effectlvlty of Extinguishment
5. Compliance with the prescribed ,Eorm 1. Pure - not subject to any condition
(uncertain event) or period
The donation is perfected once the acceptance 2. Conditional - subject to suspensive or
of the donation was made known to the donor. resolutory condition
Accordingly, ownership will only revert to the 3. With a Term - subject to a period,
donor if the resolutory condition is not fulfilled. suspensive or resolutory
(Quijada v. CA, GR No. 126464, 1998) Note: Illegal or impossible conditions in simple
and remuneratory donations are considered as
KINDS OF DONATION not imposed. Donation itself remains valid and
only the illegal or impossible conditions are
Kinds As To Effectivity disregarded. (Art. 727)
1. Inter vivos - takes effect during the
lifetime of the donor, even though the Donation Inter Vivos distinguished from
property shall not be delivered till after Donation Mortis Causa
. ,' DONATIONINTER
donor's death or even though it is
subject to resolutory or suspensive ,' . , : . ,: vivas. . : :f . DONATION ·Mo~:r!s
·.· ·CAUSA ..
,,

condition (Art. 729 and Art. 730). Disposition and Disposition happens
2. Mortis Causa - takes effect upon the acceptance to take upon the death of
death of the donor and shall be effect during lifetime of donor; acceptance by
governed by the rules of succession (Art. donor and donee donee can only be
728) done after donor's
3. Propter Nuptias - Donation by reason death
of and in consideration of marriage, Already pertains to the Even if there is a term
before its celebration. in favor of one or donee unless there is of effectivity and
both of the future spouses (Art. 82, a contrary intent effectivity is upon the
Family Code) death of the donor, still
entitled to fruits
Formalities required - Formalities required -
follow law on follow law on
donations and certain succession to be valid,
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kinds of donations and and donation must be
r·
' '
law on obligations and in the form of a will
contracts (suooletorv)
Irrevocable at the Revocable ad mutuum
instance of the donor; (exclusive will of donor)
may be revoked only
by reasons provided
bylaw
C: Revoked only for
reasons provided for
by law ( except
onerous donations)
r: Some Rules on Determination Whether
( Mortis Causa or Inter Vlvos
Where a donation was made "in consideration of
love and affection" but further stipulated that "It
became effective upon the death of the donor
provided that in the event the donee should die
before the donor, the donation would be deemed
automatically rescinded," the Court held that the
same was a mortls causa since the right of
disposition was not transferred to donee while
donor is still alive. (Sicad v. CA, GR No. 125888,
1998) .
Where, however, a donation was made
stipulating that it would take effect after the.
death of the donor but further stipulated that (1)
the donor will not dispose nor take it away from
''
the donee and that (2) the donor is parting with
the beneficial ownership while he lived was held
to be Inter vivos.
In case of doubt, the conveyance should be
deemed donations inter vivos, rather than mortis
ceuse, in order to avoid uncertainty as to the
ownership of the property subject of the deed
(Villanueva v. Spouses Branoco, GR No.
173804, 2011).
· .. ;J
The reservation of the "right, ownership,
possession and administration of the property"
and made the donation operative upon death , in
the context of an irrevocable donation, simply
means that the donors parted with their naked
title, maintaining only beneficial ownership of the
donated property while they lived. (Del Rosario
vs. Ferrer, GR No. 187056, 2012)
Badges of Mortis Causa:
1. Title remains with donor (full or naked
ownership) and conveyed only upon death
2. Donor can revoke ad nutum (Villanueva v.
Spouses Branoco, G.R. No. 172804. 2011)
CIVIL LAW
Note: Transfer is void if transferor survives
transferee (Del Rosario v. Peralta G. No. 187056,
2010: Villanueva v. Spouses Branoco, GR No.
172804, 2011)
FORMS OF DONATION
1. Movable Property
a) If the value exceeds PS,000, the
donation and acceptance shall be
made in writing. Otherwise the
donation shall be void.
b) If the·.: value is below PS,000,
donation may be made orally or in
writing.
If oral. it must be with simultaneous
delivery of the thing or of the
document representing the right
donated. (Art. 748)
•
2. Immovable Property
a) To be valid, donation must be made in a
• public instrument, specifiying therein the
property donated and the value of the
charges which the done must satisfy.
b) The acceptance of the donee may be
made in the same deed of donation or in
a separate public document..
c) If the acceptance is made in a separate
instrument, the donor shall be notified
thereof in an authentic form. and this
step shall be noted in both instruments.
d) Acceptance must be be made during the
lifetime the donor. (Art. 749)
Note: A donation mortis causa must comply with
the formalities of a last will and testament
otherwise; it would be void and would produce
no effect. (Maglasang v. Heirs of Corazon
Cabatingan, GR No. 131953, 2002)
If the donation is made in such a way that the full
and naked ownership will pass to the donee
upon the death of the donor, then it is at that
time when the donation will take effect and it is
the donation mortis causa which should be
embodied in the last will and testament.
(Maglasang v. Cabatingan, GR No. 131953,
2002) .
·~
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b. Persons who may give or receive
donation
1. Capacity to be Donor
All persons who may contract and dispose of
their property may give donation. Those who
cannot give consent to a contract cannot be
donors.
Note: Donor's capacity shall be determinedas of
the time of the "making"and not at the
"perfection"of the donation (Arts. 737)
Who are Disqualified to Donate
1. Guardians and trustees with respect to
property entrusted to them
2. Husband and wife, to each other.
3. Between paramours/persons guilty of
adultery or concubinage at the time of
donation
4. Between parties guilty of same criminal
offense, in considerationthereof
5. Made to public officers, wife,
descendant,ascendant,by reason of his
office (Arts. 736, 739)
6. Priest who heard confession of donor
during his last illness;
7. Relatives of priest within the fourth
degree. church order, or community
where priest belongs;
8. Physician, nurse, etc. who took care of
donor during his last illness;
9. Individuals, corporations, and
associationsnot permittedby law.
Note: The prohibition against donations between
spouses must likewise apply to donations
between persons living together in illiclt relatlons.
(Joaquino v. Reyes, G.R. No. 154645, 2003)
Note: In case of donation of the same thing to
two or more different persons, the rules on
double sale will apply.
2. Capacity to be Donee
All those who are not specially disqualified by
law may accept donations.
Who May Accept Donations
1. Natural and juridical persons not
especiallydisqualified by law
2. Minors and other incapacitated
a. By themselves if pure and
simple donation or if it does not
require written acceptance
CIVIL LAW
•
b. By,: their parents or legal
representativesif the donation is
onerous or conditional or needs
written acceptance
i. Natural guardian - not
more than 50,000
Ii.Court appointed - more
than 50,000
3. Conceived and unborn child,
represented by person who would have
been guardian if already born (Arts. 738,
741 & 742)
Requirements for Acceptance
1. Acceptance must be· made during the
lifetime of the donor and donee (Art. 746)
2. Acceptance may be made personally or
through an agent with special or general
and sufficient power, otherwise, te
donation shall be void (Art. 745)
Authorizationshould be in a public
instrument.
Void Donations
1. Those made between persons who are
guilty of adultery or concubinage at the
time of donation
2. Those made between persons found
guilty of the same criminal offense, in
considerationthereof
3. Those made to a public officer or his
wife, descendants and ascendants, by
reason of his office (Art. 739)
4. Donation between spouses during
marriage,except moderate gifts (Art. 87,
Family Code)
5. Those made to incapacitated persons,
though simulated under the guise of
another contract or through a person
who is mterposed.
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Classification of Donation Inter Vivos

a. From the viewpoint of motive, purpose, or cause

;.
I
....
•I '1
,·,. .. . .. ·. SIIVIPLE
PUR~I. . .
·, ON~Rou~· .
,'·.: .'
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I
6 R;~~~N~~~::o~~:.: '} .· ..'. : :;~.op~~ ..·.
I O I • o O 'I
. . •• I I
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Liberality or merits of Valuable
donee or burden/ consideration is
Valuable
Consideration Merits of charge of past services imposed but
consideration
r· donee provided they do not value is less than
l. I
given
constitute demandable value of thing
debt donated
Law on obligations
Law to apply/ forms Law on imposed> ObliCon
Law on donations Extent of burden
donations
( excess> donation
Form of acceptance Required Required
r Required Required
1--

Reservation w/
-·
regard to personal Applicable Applicable Applicable Not Applicable •
~support and legitime
Warranty against
In bad faith
.
eviction and hidden In bad fsith only In bad faith only Applies
only
defects

(
b. Effect
1. Inter vivos - takes effect during the lifetime of the donor (Art. 729)
2. In praesenti - to be delivered in future (also considered inter vivos) ..
f 3. Mortis causa - takes effect upon the death of the donor

c. From the viewpoint of occasion

\ 1. Ordinary donation
r· 2. Donation propter nuptias
' '
d. From the viewpoint of object donated
1. Corporeal property - donations of real and personal property
2. Incorporeal property - donation of inalienable rights
! .

' .

l,
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Checklist for Donation:
1. Whether onerous or gratuitous - if onerous,
governed by law on contracts
2. If gratuitous, whether morlis causa or inter •
vivos - If mortis causa, governed by law on
succession
3. If inter vivos, whether perfected or not
(made known to the donor). If no perfection,
donation is void.
4. If perfected, check for the capacity of the
donor to give and the donee lo receive. If
no capacity, donation is void.
5. Compliancewith form, otherwisevoid.
a) Art. 748 (movable);and
b) Art. 749 (immovable)
DOUBLE DONATIONS
Rule: Priority in time, priority in right
1. If movable - one who first takes possession
in good faith
2. If immovable- one who recorded in registry
of property in good faith
1. No inscription, one who first took
possessionin good faith
2. In absence thereof, one who
presents oldest title
c. Effects and limitations of donation
1. Reservationof sufficient means for support of .
donor and relatives.
Donation may comprehend all present
properties of the donor, or part thereof,
provided he reserves sufficient means
for his support and of relatives who, at
the time of the acceptance of the
donation, are by law entitled to be
supported by the donor. Otherwise, the
donation will be subject to reduction
upon petition of any person affected.
(Art. 750)
2. Donation of future property is prohibited. (Art.
751)
3. Donation shall be limited to what the donor
may give by will. Otherwise, the donation is
inofficious(Art. 752).
The limitation . applies when the donor
has forced or compulsory heirs. The
purpose is to not diminish their legitimes.
A donation would not be legally feasible.if the
donor has neither ownership nor real rights that
CIVIL LAW
he can transmit to the donee. (Hemedes v. CA, •
GR No. 107132, 2008)
Rights and Obligations of Donor
1. Donor may reserve the right to dispose of
some of the things donated, or of some amount
or income charge thereon {Art. 755)
2. Donor may donate the ownership of property
to one person and the usufruct to another (Art.
756)
3. Donor is not obliged to warrant the things
donated except when the donation is onerous, in
which case the donor is liable · for eviction or·
hidden defects in case of bad faith on his part.
(Art. 754).
4. Donor may provide for reversion in his favor.
(Art. 757)
Rights and Obligations of Donee:
1. If donation is made to several persons jointly,
it is understoodto tie in equal shares and there
is no right of accretion among them, unless the
donor providesotherwise.
If made to the husband and wife jointly, there is
right of accretion. {Art. 753)
2. Donee is subrogated to all the rights and
actions which in case of eviction would pertain to
the donor (Art. 754)
3. If donation imposes upon the donee the
obligation to pay the debts of the donor, it is
understood to be liable to pay only the debts
previouslycontracted.
Note: In no case shall the donee be
responsible for debts exceeding the
value of the property donated, unless a
contraryintention appears. (Art. 758)
4. If no stipulation ·regarding they payment of
debts, donee is liable only when the donation
has been made in fraud of creditors
Note: It is always presumed to be in
fraud of creditors, when at the time of
donation, the donor did not reserve
sufficient property to pay his debts. (Art.
759)
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d. Revocation and reduction of
donations
REVOCATION
Revocation Of Donations
1. Affects the whole donation
2. Applies only to donation inter vivos
3. Not applicable to onerous donations
4. Donor can revoke donation if the donee fails
to comply with the conditions imposed by
the donor.
,--~
Grounds For Revocation
a. Birth, Adoption, Reappearance of a child
It applies when the donor, at the time he made
the donation, did not have any child or
descendant or erroneously thought so. Donation
may be revoked or reduced when:
1. Donor should have any children, after
donation, even though they be
posthumous • •
2. Donor's child whom he believed to be
=- dead when he made the donation, turn
out to be living
3. Donor subsequently adopt a minor child
(Art. 760)
b. Ingratitude
The donation may also be revoked by reason of
ingratitude in the following cases:
1. Donee should commit some offense
against the person, honor or property of
the donor, or of his wife, or children
under his parental authority.
2. Donee imputes to the donor any:
a. Criminal offense; or
b. Any act involving moral turpitude;
Note: Revocation applies even if the donee
proves that the crime or act was actually
I
..;/
committed, unless the crime or the act has
been committed against the donee himself,
his wife, or children under his authority.
3. Donee unduly refuses to give support
when the donee is legally or morally
bound to give support to the donor.
Period for action prescribes within one year,
counted from the time the donor:
1 . Had knowledge of the fact; and
2. It was possible for him to bring the action.
(Art. 769)
CIVIL LAW
Note: Action granted to the donor by reason of
ingratitude may not be advanced and may not
be transmitted to th'e heirs of the donor. (Art. 769
- 770) ;;
•
· Exception to Rule on lntransmissibility of
Action with Regard to Revocation Due to
Ingratitude
General Rule: Personal to the donor; heir
cannot institute if donor did not provide for
Exception: Heirs may file in the following cases:
1. Donor has instituted proceedings but dies
before bringing civil action for revocation
2. Donor already instituted civil action but died,
heirs can substitute
3. Donee killed donor or his ingratitude caused
the death of the donor •
4. Donor died without having known the
ingratitude done .
5. Criminal 'acuon filed but abated by death
c. Non-compliance with conditions
Donation may be revoked when the donee fails
to comply with any of the conditions which the
donor imposed.
The alienations and mortgages made by the
donee are void, subject to the limitations
imposed by the Mortgage Law and Land
Registration laws with regard to third persons.
Action prescribes after 4 years from the
noncompliance with the condition.
Note: This action may be transmitted to the heirs
of the donor, and may be exercised against the
donee's heirs. (Art. 764)
When There is No Period Fixed for the
Condition Imposed
General rule is that if the period is not fixed in
the contract, the court can fix the period.
However, in a case'where 50 years had passed
without the condition having been fulfilled the
Court refused to fix·;a period and ruled that the
donation can be revoked for failure to comply
with that condition. (Central Philippine University
v. CA, GR No. 112127, 1995)
Illegal and Impossible Conditions
In Simple/Remunatory donations - shall be
considered as not imposed (Art. 727)
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In . O~erous/Contract - annuls obligation;
obhgat,on and conditions are void (Art. 1183).
REDUCTION
Grounds For Reduction
a. Birth, appearance or adoption of a child
Same cases as revocation
b. Faiilure to reserve
Failure of the donor to reserve sufficient
means for support of himself or
dependent relatives
c. Fraud against creditors
Failure of donor to reserve sufficient
property to pay off existing debts
d. lnofficiousness
the donation exceeds that which the
donor can give by will
lnofficious donations:
1. Shall be reduced with regard to the
excess
2. Action to reduce shall be filed by heirs
who have right to legitime at time of
donation (compulsory heirs of donor
heirs and successor-in-interest of
compulsory heirs)
3. Voluntary heirs/devisees/ legatees/
Donees/ creditors of deceased donor
cannot ask for reduction of donation
4. If there are 2 or more donation: recent
ones shall be suppressed
5. If 2 or more donation at same time -
treated equally and reduction is pro rata
but donor may impose pref ere nee which
must be expressly stated in donation
6. Effect of declaration as inofficious: the
donation is annulled only as to the
portion diminishing the legitime
Cause of action arising from the
inofficiousness of donation arises only upon
death of the donor, as the value of the
donation will be contrasted with the net
value of the estate of the donor decedent.
(Eloy Imperial v. CA, GR No. 112483, 1999)
Automatic Revocation
In contracts providing for automatic revocation,
judicial intervention· is necessary not for
purposes of obtaining a judicial declaration
rescinding a contract but in order to determine
whether or not the rescission was proper. .
The stipulation of the parties providing for
automatic revocation of the deed of donation,
CIVIL LAW
•
wit~out ~rior judicial action for that purpose, is
vahd subject to the determination of the propriety
of the_ rescission sought. Where such propriety is
sustained, the decision of the court will be
!'"~rely declaratory of the revocation, but it is not
m 1tselr the revocatory act. (Zamboanga Barter
Traders v. Plagata, G.R. No. 148433, 2008)
3. PRESCRIPTION
a. General provisions
DEFINITION
Prescri~tion - a mode by which one acquires
~wnersh1p and other real rights thru lapse of
time; also a means by which one loses
ownership, rights and actions; retroactive from
the moment period began to run; founded on
grounds of public policy; regarded as a statute of
repose
Kinds of Prescription
1. Acquisitive prescription - mode of acquiring
ownership and other real rights over
immovable property.
2. Extinctive - also referred to as limitation of
actions (Morales v. CF/, GR No. L-52278,
1980); extinction of rights and actions
General Requisites for Acquisitive
Prescription: (CTPL)
1. £.apacity to acquire by prescription
2. !hing capable ~f acquisition by prescription
3. fossession 6f thing under certain
conditions
4. !::apse of time provided by law
Who May Acquire by Prescription
1. Person who is capable of acquiring
property by other legal modes
2. State
3. Minors (through guardians or personally)
(Art. 1108)
Against Whom Prescription May Run
1. Minors and incapacitated person who have
guardians;
. 2. Absentees who have administrators;
3. Persons living abroad who · have
administrators
4. Juridical persons, except the state with
regard to property not patrimonial in
character;
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5. Between husband and wife (only if

specifically provided for by law);
6. Between parents and children (during
,- . minority/insanity) (prescription may run)
7. Between guardian and ward (during
gua;dianship) (prescription may run)
(· 8. Between co-heirs/co-owners (there must be
l
definite repudiation first)
\ 9. Between owner of property and person in
possession of property in concept of owner
(,
Against Whom Prescription Does Not Run
:) 1. Between husband and wife, even though
·- there be a separation of property agreed
upon in the marriage settlements or by
judicial decree. . c. Good faith
f \ 2. Between parents and children, during the
minority or insanity of the latter.
3. Between guardian and ward during the
continuance of the guardianship. (Art. 1109)
( Things Subject to Prescription (Art. 1113)
All things within the commerce of men
1. Private property
L 2. Patrimonial property of the State
( • To be subject of prescription, 1) the land
must be classified as alienable and
r disposable, and 2) it must be expressly
declared by the State that it is no longer
intended for public use. (Republic v.
r. Ching, G.R. No. 186166. 2010)
v.
Things Not Subject to Prescription
1. Property of public dominion (Art. 1113)
f ·, 2. lntransmissible rights
• J
3. Movables possessed through a crime (Art.
1133)
4. Registered land; lands covered by title (P.O.
1529, Sec. 47)
Renunciation of Prescription
Persons with capacity to alienate may renounce
prescription already obtained but not the right to
prescribe in the future.
Renunciation may be express or tacit.
Prescription is deemed to have been tacitly
" mistaken belief that it had been bequeathed
renounced; renunciation results from the acts
which imply abandonment of right acquired. (Art.
1112)
Creditors and persons interested in making
prescription effective may avail it themselves
notwithstanding express or tacit renunciation.
(Art. 1114)
ACQUISITIVE AND EXTINCTIVE
PRESCRIPTION
b. Prescription of ownership and
other real rights
ACQUISITIVE PRESCRIPTION
Kinds of Acquisitive Prescription
1. Ordinary Prescription
a. Possession in the concept of an owner,
public, peaceful and uninterrupted;
b. Within time fixed by law (4 years for
movables; 10 years for immovable);
d. Just title;
2. Extraordinary Prescription
a. Possession in the concept of an owner,
public, peaceful and uninterrupted;
b. Within time fixed by law (8 years for
movables; 30 years for immovables):
Note: Just title and good faith NOT
required in extraordinary prescription;
Good Faith
1. Reasonable belief that person who
transferred the1,thing is the owner and could
validly transmit ownership
2. Must exist throughout the entire period
required for prescription
Just Title - when the possession was acquired
through one of the modes recognized by law, but
the grantor was not the owner or could not
transmit any right (Art. 1129, NCC); must be
proved and never presumed; only Titulo
Colorado is required
1. Titulo Colorado - such title where there
was a mode of transferring ownership but
something is wrong because the grantor is
NOT the owner
2. Titulo putativo - a person believes he has
obtained title but he has not because there
was no mode of acquiring ownership. as
when one is in possession of a thing in the
to him. (Doliendo v Biarnesa, G.R. No. L-
2765. 1906)
3. Title must be one which would have been
sufficient to transfer ownership if grantor had
been the owner

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CIVIL LAW

4. Through one of the modes of transferring INSTANCES WHEN PRESCRIPTION IS NOT

ownership but there is vice/defect in
capacity of grantor to transmit ownership
In Concept of Owner
1. Possession NOT by mere tolerance of
owner but adverse to that of the owner
2. Claim that he owns the property
Public, Peaceful & Uninterrupted
Must be known to the owner of the thing
1. Acquired and maintained without violence
2. Uninterrupted (no act of deprivation by
others) in the enjoyment of property
lntorruptlon (PEN-C)
1. _t:!atural
a. Through any cause, possession ceases
for more than 1 year
b. If 1 year of less - as if no interruption;
the time elapsed shall be counted in
favor of prescription
2. f.ivil -· when there is judicial summons to the
possessor
Note: Exceptions
a) Void for lack of legal solemnities
b) Plaintiff desists from complaint/allows
proceedings to lapse
c) Possessor is absolved from complaint
d) Express or tacit renunciation
3. _;xpress or tacit recognition by the
possessor of the owner's right;
4. Possession in wartime.
Rules in Computation of Period
1. Present possessor may tack his possession
to that of his grantor or predecessor in
interest
2. Present possessor presumed to be in
continuous possession even with intervening
time unless contrary is proved
3. First day excluded, last day included
ALLLOWED
Land of the public domain must be declared
alienable and disposable either by the President
or the Secretary of the DENR to be the subject
of appropriation. The period of possession prior
to the reclassification of the land as disposable
cannot be considered in reckoning the
prescriptive period in favor of the possessor.
(Republic v. De Guzman Vda. De Joson, GR No.
163767, 2014)
Rights Not Extinguished by Prescription
1. Demand right of way (Art. 1143)
2. Abate public/private nuisance (Art. 1143)
3. Declare contract void (Art. 1410)
4. Recover property subject to expressed trust
(Caezo v. Roxas, GR No. 148788. 2007)
5. Probate of a will (Rules of Court, Rule 76,
Sec. 1)
6. Quieting of title (Art. 476)
Note: An action for quieting of title is
imprescriptible provided that plaintiff is in
possession of the property. Prescription of 1 O
years to bring the action shall start to run once
there has been loss of possession.
•

Tacking Period
1. There must be privily between previous and
present possessor
2. Possible when there is succession of rights
3. If character of possession different:
a) predecessor in bad faith /possessor in
good faith use extraordinary
prescription

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c. Prescription or limitation of actions

(
\

Actions prescribe by mere lapse of time fixed by

.
(1
' law .
. ..
. PRESCRIPTIVE · . ·
. . .. : ·:: ,PERIC>D. ' . . . ·.
. ACTION.
I
. .
,',
: · ....... '
'• o ,'
'
Action over immovables -
(
\. . 30 years from time possession is
lost (Art. 1141 J
1. Mortgage action (Art.
1142)
(.' 2. Action upon written
Contract (Art. 1144)
10 years 3. Action upon obligation
created by law (Art.
I I 1144)
4. Action upon a judgment
(Art. ·t 144)
(
Action to recover
movables - from time
8 years possession is lost (Arl.
c. 1140)
1. Action upon an oral
( contract
\..' 6 years 2. Action upon a quasi-
r
I contract (Art.1145)
•I
1. Upon injury to rights of
t 4 years
plaintiff;
a quasi-delict
2. Upon
l (Art. 1146l
1. Forcible entry and
1 year unlawful detainer;
2. Defamation (Art. 1146)
Others where periods are
5 years not fixed by law (Art.
I 1149)
L
Prescription starts from the accrual or the day
the action may be brought. (Art. 1150, NCC)

Interruption of prescription of actions

1. Action is filed before the court
2. There is extrajudicial demand by the
creditors
3. There is any written acknowledgement
of the debt by the debtor. ·
(Jurado, Civil Law Reviewer, 2009)

---- end of topic ---

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IV. SUCCESSION A. GENERAL PROVISIONS

TOPIC OUTLINE UNDER THE SYLLABUS: I. DEFINITION

IV. SUCCESSION
A. GENERAL PROVISIONS
B. TESTAMENTARY SUCCESSION
1. Wills
2. Institution of heirs
3. Substitution of heirs
4. Conditional testamentary disposition
and those with a term
5. Legitime
6. Disinheritance
7. Legacies and devises
C. LEGAL OR INTESTATE SUCCESSION
1. General provisions; relationship and
right orrepresentation
2. Order of intestate succession
D. PROVISIONS COMMON TO TESTATE
AND INTESTATE SUCCESSION
1. Right of accretion
2. Capacity to succeed by will or by
intestacy
3. Acceptance and repudiation
4. Partition and distribution of the estate
Succession - mode of acquisition by virtue of
which the property, rights and obligations to
the extent of the value of the inheritance, of a
person are transmitted through his death to
another or others either by his will or by
operation oflaw. (Art. 774)
II. KINDS OF SUCCESSION
(a) Compulsory - succession to the legitime
(this prevails over all kinds)
(b) Testate - succession by will
(c) Intestate - succession by operation of
law; occurs in the absence of a will
(d) Mixed - a combination of testate and
intestate succession. (Balane, Jottings
and Jurisprudence in Civil Law, p. 29,
2016)
111. ELEMENTS OF SUCCESSION
(a) Subjective Element
(i) Decedent - person whose property is
transmitted through succession (Art.
775); also called testator in testate
succession.
(ii) Successors
Heirs - those who are called to
succession to the whole or to an
aliquot portion of the inheritance either
by will or by operation on law. (Art. 782)

Kinds of Heirs
(a) Compulsory - those who succeed by
force of law and are entitled to a
legitime, which is in proportion to the
entire disposable estate and is
predetermined by law, of which they
cannot be deprived by the testator,
except through a valid disinheritance
(b) Voluntary or Testamentary - those
who are instituted by the testator in his
will to succeed to the free portion (that
which the testator can freely dispose)
(c) Devisees - persons to whom gifts of
real property are given by virtue of a
will (Art. 782)
(d) Legatees -· persons to whom gifts of
personal property are respectively
given by virtue of a will (Art. 782)
(e) Legal or Intestate - those who
succeed to the estate of the decedent
who dies without a valid will. or one
who does not leave a will, or to the

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portion of such estate not disposed of entitled to it; while inheritance refers to the
by will universality or entirety of the property, rights
and obligations of a person who died.
c: NOTE: The distinction between heirs and
I I
devisees or legatees is important in these ---- end of topic----
(· cases:
\ )
{a) Preterition (Art. 854)
{b) Imperfect disinheritance
( I {c) After-acquired properties
v
{d) Acceptance or non-repudiation of
l. I
successional rights

,. I
{b) Causal Element
Death of the Person - The right to the
succession are transmitted from the moment of
(.
the death of the decedent. (Art. 777)
(
Thus, the capacity of the heir is determined as
of the time the decedent died (Art. 1034); the
legitime is to be computed as of the same
moment (Art. 908), and so is the
inofficiousness of the donation inter vivos (Art.
771). Similarly, the legacies of credit and
remission are valid only in the amount due and
\ outstanding at the death of the testator (Art.
935), and the fruits accruing after that are
deemed to pertain to the legatee. (Art. 948;
Calalang-Parulan v. Calalang-Garcia, G.R. No.
184148, 2014)

However, a person may be presumed dead for

the purpose of opening his succession. {see
rules on presumptive death, Art. 390-391) In
this case, succession is only of provisional
character because there is always the chance
that the absentee may be alive.

Future inheritance cannot be the subject of a

contract of sale because the seller owns no
inheritance while his predecessor lives. (Art.
1347 in relation to Art. 777)
.,
(c) Objective Element (Art. 776)
Inheritance - is the subject matter of
succession and includes all the property, rights
and obligations of a person, which are not
extinguished by his death.

NOTE: If the right or obligation is strictly

personal, it is not transmissible, hence, it is
extinguished by death. (Balane, supra, p.2)

IV. SUCCESSION DISTINGUISHED FROM

INHERITANCE
Succession refers to the legal mode by which •
inheritance is transmitted to the persons
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B. TESTAMENTARY SUCCESSION
1. WILLS
Concept of a Will
It is an act whereby a person is permitted with
the formalities prescribed by law to control to a
certain degree the disposition of his estate to
take effect after his death. (Art. 783)
NOTE: A will disposes only the free portion of
the estate. (Art. 886; Balane, supra, p. 38)
Characteristics of a Will
1. Unilateral - does not need ttie approval
of any other person (implied in Art. 783)
2. Strictly Personal Act (Arts. 784-785)
• The making of a will is strictly a
personal act; it cannot be left to the
discretion of a third perso'1, or
accomplished through the
instrumentality of an agent or attorney
(Art. 784)
• The following acts or stipulations may
not be delegated to third persons:
a. Designation of heirs, devisees, or
legatees; (Balane, supra, p.41)
b. Duration or efficacy of the
designation of heirs, devisees or
legatees;
c. Determination of the portions
which the heirs. devises, . or
legatees are to take, when referred
to by name; and
d. Determlnatlon of whether or not
the testamentary disposition is Jo
be operative (Arts. 785 and 787)
NOTE: This is entirely different
from the acceptance or
renunciation by the heir as
beneficiary. The heir has the
freedom to accept or renounce the
testamentarybenefit.
• Acts which may be delegated to third
persons (Art. 786): . Underlying Principle: Testacy is always
a. Distribution of specific property or
sums of money that the testator
may leave in general to specified
classes or causes; and
b. Designation of the persons,
institutions or establishments to
CIVIL LAW
which such property or sums are
to be given or applied.
3. Free and Voluntary Act - any vice
affecting testamentary freedom can cause
the disallowanceof the will (Art. 839)
4. Formal and Solemn Act-the formalities
are essentialfor validity (Art. 804-814; 820-
821)
5. Act Mortis Causa - takes effect only
after the death of the testator (Art. 783)
6. Ambulatory-Revocable at any time
during the testator's lifetime (Art. 828)
7. Individual Act - two or more persons
cannot make a single joint will, either for
their reciprocal benefit or for another
person. (Art. 818)
However,separate or individually executed
wills, although containing reciprocal
provisions (mutual wills) are not prohibited,
subject to the rules on disposicion
captatoria:(Art. 875)
a. Executed with animus testandi (Art.
783)
b. Executed with testamentary capacity
(Art. 796-803)
c. Dispositiveof property (Art. 783)
d. Statutory(Art. 783)
Interpretation of Wills •
If a testamentarydisposition admits of different
interpretations, in case of doubt that
interpretationby which the disposition is to be
operative shall be preferred. (Art. 788)
The words of a will are to be interpreted in a
manner, which will give effect to every
expression, rather than one which will render
any of the expressions inoperative. The
interpretationwhich will prevent intestacy shall
be preferred. (Art. 791)
preferred than intestacy, because the former is
the express will of the decedent whereas the
latter is only his implied will. (Balane, supra, p.
45)
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Animus Testandi - The testator's intent
• i (animus testandi), as well as giving effect to
such intent, is primordial.
., .... ,
Exception: when the intention of the testator is
contrary to law, morals or publlc policy.
In case of doubt, the interpretation by which
( !
the disposition is to be operative or will sustain
and uphold the will in all its parts shall be
. .-··.
adopted, provided that it can be done
consistently with the established rules of law.
r>,
' . Kinds of Ambiguities In Wills (Art. 789)
I
a. Latent or Intrinsic Ambiguities
l •
- those which do not appear on the face of
the will
- may be resolved through evidence
aliunde or those outside of the will, except
oral declarations of the testator.
b. Patent or Extrinsic Ambiguities
- those which appear on the face of the
will itself
- must be resolved only by provisions
contained in the will itself.
In resolving ambiguities in wills, any admissible
and relevant evidence may be used to
determine the Intention of the testator, except
for patent or extrinsic ambiguities, for which the
words of the will are to be resorted to.
Oral declarations of the testator as to his
intention cannot be used in resolving either
latent or patent ambiguities. (Ba/ane, supra, p.
46)
Interpretation By General Meaning
The words of a will are to be taken in their
ordinary and grammatical sense, unless a
clear intention to use them in another sense
can be gathered, and that other can be
'J
ascertained. (Art. 790, par. 1)
Technical words in a will are to be taken in
their technical sense. unless the context clearly
indicates a contrary intention, or unless it
satisfactorily appears that the will was drawn
solely by the testator, and that he was
unacquainted with such technical sense. (Art.
790)
l ..
Principle of Severability
The invalidity of one of several dispositions
contained in a will does not result in the
invalidity of the other dispositions, unless it _is
to be presumed that the testator would not
have made such other dispositions if the first
invalid disposition had not been made. (Art.
792)
Property Acquired After tho Execution of
the Wiii
Property acquired during the period between
the execution of the will and the death of the
testator is NOT included among the property
disposed of. (Art. 793)
Exception: When a contrary intention
expressly appears on the will. (Art. 793)
Interpretation Of Legacy and Devise
General Rule: In a legacy or devise, the
testator gives exactly the Interest he has in the
thing. (Art. 794)
Exceptions:
1. It is clear in the will that he intended to
convey a less interest. (Art. 794)
2. The testator expressly declares that he
conveys a part greater than his interest
in the thing. (Art. 929)
NOTE: In case · the testator conveys a part
greater than his Interest In the thing, and If the
person owning such interest in excess of that
or the testator does not wish to part with it, the
solution in Art. 931 can be applied; the legatee
or devisee shall be entitled only to the just
value of the interest that should have been
acquired. (Balane, supra, p. 49)
Requirements for Validity of Wills
1. Extrinsic I Formal Validity - refers to the
requirement of form and determined in
probate proceedings; it includes:
a. Formalities provided by law
b. Testamentary Capacity
2. Intrinsic I Substantive Validity -refers to
the substance of the provisions and
generally determined after probate (Balane,
supra. p. 50)
•
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A testator is considered of sound mind if at the

. · :. :' . ·· EXTRINSIC . · INTRINSI~ time of making of the will he knows the
I.:· ., ••••• 11 o I VALIDITY' I .. VALIDIJY· . following:
:.:! G~VERNING· . .
Filipinos For Filipinos: 1. Nature of the estate to be disposed of -
f:,A,W:; 'AS' '·TO .
0

and Foreigners: Law at the time The testator should have a fairly accurate
:: TIME: : . : ,! • .:
'•

)
. . . ..
I

•1
t'
I
I
I

',
•
I
I I
1'
I
Law at the time
of execution
death (Art. 16 &
2263)
knowledge of what he owns. (Balane,
supra. p. 53) >
I '•4 I I I I

I ···~
,1
,•. I . i
I ,
I .: I
I
(Art. 795) I
11

:: ,'1:,: • :. : I l •:
11.. 1
1° I~
For Foreigners: 2. Proper objects of his bounty - The testator
l•,1 \/ ,. ,. ' r, National law should know under ordinary circumstances,
'.!·\ ' :: :
. I I \ •,II
... •.. (Art. 16, par. 2; who his relatives in the most proximate
1
', :tt''t 1 •; : I \ I o :•,
Art. 1039 degrees, are. (Balane, supra, p. 53)
. G.OVI:R,Nl~G . Filipinos For Filipinos:
:::t:.:AVJ'. '.AS.' TO and Foreigners: Philippine law 3. Character of the testamentary act (Art.
· P.tACE. . .. ·.
', I 11 1• I I I
(Art. 815-817) 799) - The testator should know the legal
.\ .• •\I I • a. Citizenship For Foreigners: nature of a will. He or she must know that
11 I I I ,1 I I I ~ I :, •I
11, •t' ,',,• I b. Domicile National law he is executing a document that disposes
J I "'
I~ ,' I I I 1' ,'JI I I I I • -
of his properties gratuitously, which would
' :: I t ,11' o I•,, I
,'•,,'1, .:: take effect upon his death. (Balane, supra,
>o I~,,'.' o I I I :~,I: • II Execution p. 53-54)
I o,,
'I o t, ''1, It I e. Philippine
I • I:~.;•~ _l'P, ·~·- I ',', I Law Legal Presumption in Favor Of Soundness
Of Mind (Art. 800):
Rules of Formal Validity of Wills
Every testator, whether Filipino or alien, General Rule: The law presumes that every
wherever he may be, has five choices as to person is of sound mind, in the absence of
what law to follow for the form of his/her will: proof to the contrary. Forgetfulness, even if
(a) Lawof his citizenship (Art. '15, 816, 817) proven, is not proof of unsoundness of mind.
(b) Law of the place of execution (Art. 17) (Baltazar v. Lexe, G.R. No. 17449, 2012)
(c) Law of his domicile (Art. 816)
(d) Law of his residence (Art. 816) Exceptions:
(e) Philippine law (Art. 15, 816, 817) (a) When the testator, one month or less
before the execution of the will, was
TESTAMENTARY CAPACITY AND INTENT publicly known to be insane (Art. 800);
(b) When the testator executed the will after
•
It is the ability as well as the legal capacity to
make a will. It must be present at the time of being placed under guardianship or
the execution of the will. (Balane, supra, p. 52) ordered committed to a mental institution
(under R~les 93 and 101, respectively of
Who are capacitated to make a will (NES) the Rules of Court), and before said order
1. ,t:!atural person not expressly prohibited by has been lifted. (Torres and Lopez de
law to make a will. (Art. 796) Bueno vs. Lopez, G.R. No. 24569, 1926)
2. §.ighteen (18) years old and above (Art.
797). NOTE: Supervening capacity or incapacity ·
3. Of .§.ound mind, at the time of its execution does not invalidate an effective will, nor is the
(Art. 798) will of an incapable validated by supervening
All of these must be present at the time of the capacity (Art. 801).
execution of the will. (in relation with Art. 801)
Burden of Proof 6f Soundness of Mind
To be of sound mind, it is not necessary that 1. The person who opposes probate of the
the testator be in full possession of all his will has the burden of proof that the
reasoning faculties, or that his mind be wholly testator was not of sound mind. (Art. 800).
unbroken, unimpaired, or unshattered by 2. The person who maintains the validity of
disease, injury or other cause. (Art. 799) the will must prove that the testator
executed it during a lucid interval, when
the testator was publicly known to be

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insane, one month or less before making NOTARIAL WILLS

,-. ; his will. (Art. 800)
Requirements for Notarial Wills (Art. 805-
FORMS OF WILLS 806)
1. Subscribed by the testator or his agent in
Kinds of Wiiis his presence and by his express direction
( i (a) Notarial I Attested - an ordinary will at the end thereof, in the presence of the
~--·' acknowledged before a notary public by witnesses;
I
\ I the testator and the instrumental witnesses 2. Attested and subscribed by at least three
(Art. 805-806) credible witnesses in the presence of the
(b) Holographic - a will totally handwritten, testator and of one another;
dated, and signed by the testator alone. 3. The testator or his agent, must sign every
r,
\ .'
(Art. 810) page, except the last, on the left margin in
the presence of the witnesses;
,- Formalities Common To Notarial And 4. The witnesses must sign every page,
{ I
Holographic Wills: except the last, on the left margin in the
1. Every will must be in writing (Art. 804); and presence of the testator and of one
2. Executed in a language or dialect known to another;
the testator (Art. 804) 5. The witnesses must sign every page,
except the last, on the left margin in the
In Writing presence of the testator and of one
Any form of writing is allowed, provided another;
a. Must be understood by others, and 6. All pages must be numbered correlatively
b. Must be capable of being preserved and in letters on the upper part of each page;
with permanence. Reason: generally, wills 7. Attestation clause stating:
are probated after the death of the testator, a. The number of pages of the will;
so it must have the character of b. The fact that the testator or his
permanence and must be understood by agent under his express direction
others. signed the will and every page
thereof, in the presence of the
In Language or Dialect known to Testator witnesses;
It must be understood by testator, but it is not c. The fact that the witnesses
required that the will specifically state that it is witnessed and signed the will and
in a language or dialect known to the testator. everY:-,psge thereof In the presence
(Abada v. Abaja, G.R. No. 147145, 2005) This of the';testator and one another;
is merely evidentiary and should be proven 8. Acknowledgement before a notary public
during probate.
Subscribed by th'e Testator or his Agent In
Presumption of Compliance with the his Presence and by his Express Direction
Language Requirement • at the End thereof, in the Presence of the
The presumption that testator knows and Witnesses
understands language or dialect applies only if: The testator's thumbprint is always a valid and
i j
1. The will was executed in a language sufficient signature for the purpose of
generally spoken in the place of execution; complying with the requirement of the law.
and There is no basis for limiting the validity of
2. The testator is a native or resident of such thumbprints only to cases of illness or infirmity.
~ •• 1 locality. (Abangan v. Abangan, G.R. No. L- (De Gala v. Gonzales G.R. No. L-30289, 1929;
13431, 1919) Dolar v. Diancin, G.R. No. L-33365, 1930;
Lopet v. Liboro, G.R. No. L-1787, 1948)

However, a sign of the cross does not comply

with the statutory requirement of signature,
unless it is the testator's usual manner of
signature or one of his usual styles of signing. •
The cross does not have the trustworthiness of

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a thumbmark. (Garcia v. Lacuesta, G.R. No. L-
4067, 1951)
Agent of the Testator Subscribing under his
Express Direction
The essential thing for validity is that the agent
wrote the testator's name. It would be a good
thing, but not required, for the agent to indicate
the fact of agency or authority. (Barut v.
Cabacungan, G.R. No. L-6285, 1912)
Signed at the End
Signing before the end invalidates not only the
dispositions that come after, but the entire.will,
because the one of the statutory requirements
would not have been complied with. (Azue/a v.
Court of Appeals, G.R. No. 122880, 2006)
Two Kinds of End
1 . Physical end - where the writing stops
2. Logical end - where the last testamentary
disposition ends.
Signing in either end is permissible.
(Balane, supra)
Signed in the Presence of Witnesses
Actual seeing is not required, but the ability to
see each other by merely casting their eyes in
the proper direction. (Nera v. Rimando, G.R.
No. L-5971, 1911)
Acts of Witnesses
• Attesting - act of witnessing
• Subscribing - act of signing their
names in the proper places of the wlll
(Balane, supra, p. 81 citing Taboada v.
Rosa, G.R. No. L-36033, 19&2:
Caneda v. CA, G.R. No. 103554,
1993)
The witnesses need not sign at the end of the
will. It is sufficient that they signed the will.
(Taboada v. Rosal, G.R. No. L-36033, 1982)
Signing on Every Page, Except the Last
Signing on every page of the will is mandatory,
while the place of signing i.e. left margin is
merely directory. The signature can be affixed
anywhere on the page. (Balane, supra)
When No Marginal Signatures are Required
If the entire document consists of only two
sheets, the first containing the will and the
second, the attestation clause, there need not
be any marginal signatures at all. (Abangan v.
Abangan, G.R. No. L-13431, 1919)
CIVIL LAW
Order of Signing
The order of signing is immaterial, provided
everything is done in a single transaction.
However, if the affixation of the signatures is
done in several transactions, then it is required
that the testator affix his signature ahead of the
witnesses. (Ba/ane, supra, p. 86-87)
Pagination
The pagination by means of a conventional
system, a generally accepted or known
sequential order, is required, while the
pagination in letters on the upper part of each
page is merely mandatory. (Balane, supra)
Attestation Clause Need Not be Signed by
the Testator
It is the affair of the witnesses, therefore, it
need not be signed by the testator. (Fernandez
v. Verge/ de Dios, G.R. No. L-21151, 1924)
Witnesses Must Sign at the End of •
Attestation Clau~e .
The attestation clause is a memorandum of the
facts attending . the execution of the will
required by law to be made by the attesting
witnesses, and it. must necessarily bear their
signatures. An unsigned attestation clause
cannot be considered an act of the witnesses,
since the omission of their signatures at the
bottom negatives their participation. If an
attestation clause not signed at the bottom be
admitted, it would be easy to add such clause
to a will on a subsequent occasion and in the
absence of the testator and any or all •
witnesses. (Cagro v. Cagro, G.R. No. L-5826,
1953; Azuela v. Court of Appeals, G.R. N(;.
122880, 2006)
Attestation Clause Separate from
Acknowledgement Clause
An attestation clause is mandatory for attested
wills. It is separate and distinct from an
acknowledgement clause. These two cannot
be merged. (Echavez v. Dozen Construction,
G.R. No. 192916, 2010)
Acknowledgment
The act· of one who has executed a deed in
going before some competent officer or court
and declaring it to be his act or deed. It
involves an extra step undertaken whereby the
signatory actually declares to the notary public
that the same is his or her own free act and
deed. (Lee v. Tambago, A. C. Na. 5281, 2008)
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~ Two-Fold Purpose of the Acknowledgement
1. To safeguard the testators wishes long
after his demise; and
r :, 2. To assure that his estate is administered in
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the manner that he intends it to be done
(Lee v. Tambago, A.C. No. 5281, 2008)
(.\ Certification Need Not be Signed in the
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Presenceof the Testator and Witnesses
Whether or not the notary signed the
certification of acknowledgment in the
presence of the testator and the witnesses,
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does not atrect the validity of the will. All that
must be done is that the testator and the
witnesses avow to the certifying officer the
authenticity of their signatures and the
voluntariness of their actions in executing the
testamentary disposition. (Javellana v.
Ledesma, G.R. No. L-7179, 1955)
Requirementsfor the Notary Public
1. Must be duly commissioned for the locality
where the acknowledgment is made
(Guerrero v. Bihis, G.R. No. 174144, 2007)
2. Must not be one of the three attesting
witnesses (Cruz v. Villasor, G.R. No. L-
32213, 1973)
NOTE: There is no requirement that an
attested will should be dated. Consequently, a
variance between the indicated dates of
execution and acknowledgement does not in
itself invalidate the will. (Ortega v. Valmonte,
G.R.No. 157451,2005)
<', Special Requirements for Handicapped
Testators
Deaf/Deaf-MuteTestator (Art. 807)
1. If able to read - he must read 111e will
personally
2. If unable to read - he must designate two
persons to read the will and communicate
to him, in some practicable manner its
contents.
Blind Testator (Arl. 808)
The will shall be read to him twice. once by
one of the subscribing witnesses and another
by the notary public before whom the will is
acknowledged.
The rationale behind the requirement of
;
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reading the will to the testator if he is blind or
4..,
incapable of reading the will himself (as when
he is illiterate), is to make the provisions of the
will known to him, so that he may be able to
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CIVIL LAW
object if they. are not in accordance with his
wishes. (Garcia v. Vasquez, G.R. No. L-26615,
1970)
The special requirements for handicapped
testators are mandatory, non-compliance with
Articles 807 or 808 will result in nullity and
denial of probate;~:(Balane, supra)
Rule on Substantial Compliance {Arl. 809)
Article 809 is · Applicable Only to the
Attestation Clause
1. In the absence of
a. Bad faith
b. Forgery
c. Fraud
d. Undue and improper pressure and
influence
2. Defects and imperfections in the form of
attestation or in the language used therein
3. Shall not render the will invalid
4. If it is proved that the will was in fact
executed and attested in substantial
compliance with all the requirements of Art.
805.
However, only omissions in the attestation
clause which can be supplied by an
examination of the will itself or by intrinsic
evidence will not be fatal to the validity of the
will. The omissions in the attestation clause
which can only be proved by extrinsic evidence
would result in the invalidation of the
attestation clause and ultimately of the will
itself. (Caneda v. CA, G.R. No. L-18076. 1962)
HOLOGRAPHIC
WILLS
Requirements for Holographic Wills
(EHAND-DS)·
A holographic will is valid if it is:
1. .§.ntirely HAtmwritten by the testator
2. Qated by him
3. .§igned by him (Art. 810; Balane, supra, p.
130)
Holographic wills are not subject to any form,
may be made in 6r out of the Philippines, and
need not be witnessed. (Art. 810)
Date
The date of the will should include the day, •
month, and year of its execution. (Roxas v. De
Jesus, G.R .. No. L-38338, 1985)
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The law does not specify a particular location

where the date should be placed in the will. ' , · .'ALTERATIONS MADE.BY'A
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The only requirements are that the date be in
the will itself and executed in the hand of the
testator. (Labrador v. Court of Appeals, G.R.
Nos. 83843-44, 1990)
Signed by the Testator
The testator must sign at the end of
testamentary dispositions. Otherwise, the
dispositions written below his signature, which
are not subsequently dated and signed by him
will be invalidated. (Art. 812)
Forms of Holographic Wills
A holographic will is subject to no other form,
and may be made in or out of the Philippines,
and need not be witnessed. (Art. 810)
.Additional Dispositions in a Holoqraphic
Will
Additional dispositions in a holographic will
must be dated and signed by the testator. (Art.
812) The signature and the date may be done
in the following manner:
1. Signature and date after each additional
disposition, or
2. Each additional disposition signed and
undated, but the last disposition signed
and dated. (Art .. 813)
Insertion, Cancellation, Erasure or
Alteration in a Holographic Will (Art. 813)
General Rule: If made by the testator
contemporaneously with the making of the wjll,
the full customary signature of the testator
should authenticate all alterations,
cancellations and erasures. If not, general rule
is . that the will is valid but the alterations,
cancellations and erasures will not be valid.
(Velasco v. Lopez, G.R. No. 905, 1903).
Exceptions:
1. Where there is only one testamentary
disposition and the unauthenticated alteration
affects the sole disposition (e.g., one heir
substituted by another, then the whole will is
void) (Ka/aw v. Re/ova, G.R. No. 40207. 1994)
2. Where the alteration or erasure is on the
signature and the date, the whole essence is
affected making the whole will void. Spouses
(Alejo v. CA. G.R. No. 106720, 1994)
.; ,.' ' .:··: .. ' , .. PERSO.N .. ·. · ·.· . .·
Without the The insertion, cancellation,
consent of the erasure or alteration is not
testator considered as written.
With the The will is void for not being
consent of the totally in the handwriting of
testator the testator (Art. 81 OJ
Prohibition on Joint Wills
Two or more persons cannot make a will jointly,
or in the same instrument, either for their
reciprocal benefit or for the benefit of a third
person. (Art. 818)
Joint Will - One document which constitutes
the wills of two or more individuals. These
kinds of wills are void. (Balane, supra)
If there are several documents, each serving
as one independent will, even if they are
written on the same sheet, they are not joint
wills. (Balane, supra)
NOTE: Joint wills executed by Filipinos in a
foreign country shall not be valid in the
Philippines, even though authorized by the
laws of the country where they may have been
executed. (Art. 819) However, reciprocal wills
of foreign nationals jointly probated in another
jurisdiction, can be admitted for reprobate in
the Philippines since the prohibition is in the
making of joint wills, and not on the joint •
probate of wills. (Vda. De Perez v. Tolete, G.R.
No. 76714, 1994)
Reasons of Public Policy Against Joint
Wills
1. Limitation on the modes of revocation. (i.e.
one of the testators would not be able to
destroy the document without also
revoking it as the will of the other testator,
or in any event, as to the latter, the
problem of unauthorized destruction would
come in) (Balane, supra, p. 171)
2. Diminution of testamentary secrecy;
(Balane, supra)
3. Danger of undue influence (Dacanay v.
Florendo, G.R. No. L-2071, 1950)
4. Danger of one testator killing the other
(Dacanay v. Florendo, G.R. No. L-2071,
1950)

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WITNESSES TO WILLS
Qualifications:
1. Of sound mind (Art. 820)
2. At least 18 years of age (Art. 820)
i ' .; 3. Not blind, deaf, or dumb (Art. 820)
' . 4. Able to read and write (Art. 820)
5. CJomiciled in the Philippines (Art. 821)
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6. Must not have been convicted
falsification of a document, perjury, or false
{. ) testimony (Art. 821)
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The above qualifications must be possessed at
the time of attesting the will. Their subsequent
incompetence shall not prevent the allowance
of the will. (Art. 822)
The instrumental witnesses in order to be
competent must be shown to have the
qualifications under Article 820 and none of the
disqualifications under Article 821 and for their
testimony to be credible, that is worthy of belief
and entitled to credence, it is not mandatory
that evidence be first established on record
that the witnesses have a good standing in the
community or that they are honest and upright
or reputed to be trustworthy and reliable, for a
person is presumed to be such unless the
contrary is established otherwise. (Gonzales v.
Court of Appeals, G.R. No. L-37453, 1979)
Creditors as Witnesses
r>.
Creditors can be witnesses to his or her
debtor's will. A mere charge on the estate of
the testator for the payment of debts due at the
time of death does not prevent the creditor
from being a competent witness. (Art. 824)
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CODICILS AND INCORPORATION BY
REFERENCE
Codicil - A supplement or addition to a will,
made after the execution of a will and annexed,
to be taken as a part of the will. It explains,
adds, or alters, any disposition made in the
original will. (Art. 825)
Codicils Must be Executed as in Wills
tn order that a codicil may be effective, it shall
be executed as in the case of a will. (Art. 826)
However, the codicil does not need to conform
to the form of the will to which it refers. An
r, attested will may have a holographic codicil, or
0
vice versa. (Balane, supra)
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Requirements for Incorporation by
Reference
If a will refers to a document or paper, such
document or paper will be considered a part of
the will if the following requisites concur:
(EPPS)
1. The document or paper referred to in the
will must be in Existence at the time of the
of
execution of the will;
2. The will must clearly describe and identify
the same, stating among other things the
number off.ages thereof;
3. It must be identified by clear and
satisfactory f roof as the document or
paper referred to therein; and
4. It must be .§igned by the testator and the
witnesses ori each and every page except
in case of voluminous books of account or
inventories. (Art. 827)
The documents, inventories, books, of
accounts, documents of titles, and other
papers of similar nature should under no
circumstances make testamentary dispositions.
For then the formal requirements for wills
would be circumvented, (Balane, supra)
NOTE: Holographic wills cannot incorporate
documents by reference unless the
incorporated paper is also entirely in the
handwriting of the testator. In case of notarial
wills, it is sufficient that the signatures of the
testator and witnesses on every page of the
incorporated document. (Balane, supra, p. 183)
REVOCATION OF WILLS AND
TESTAMENTARY DISPOSITIONS
A will may be revoked by the testator at any
time before his death. Any waiver or restriction
of this right is void. (Art. 828)
Rules for Revocation (Art. 829)
1. If revocation made in the Philippines -
Philippine law
2. If revocation is made outside the
Philippines
a. Law of the place where the will was
made, or
b. Law of the place where the testator
was domiciled at the time of
revocation
3. If the testator is domiciled in the
Philippines
a. Philippine law
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b. Law of the place of revocation
c. Law of the place where the will was
made (Balane, supra, p. 184)
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Modes of Revoking a Wiii (Art. 830)
No will shall be revoked except in the following
cases: (LSPd)
1. By implication of _baw
2. By .§.ubsequent will - some will, codicil, or
other writing executed as provided in case
of wills
3. By fhysical Qestruction - by burning,
tearing, cancelling, or obliterating the will
with intention of revoking it, by the testator
himself, or by some other person in his
presence, and by his express direction.
Instances of Revocation by Operation of
law:
a .. Decree of legal separation, nullity or
annulment of marriage for dispositions in
favor of the guilty spouse (Family Code,
Art. 63, par. 4)
b. Preterition (Art. 854)
c. Legacy or credit against third person or
remission of debt was provided in will and
subsequently, testator brings action
against debtor (Art. 936)
d. Substantial transformation of specific thing
bequeathed, or sale or disposition of
property bequeathed or devised before the
death of the testator (Art. 957)
e. When heir, devisee or legatee commits
any of the acts of unworthiness (Art. 1032)
f. Annulled or void ab initio marriages revoke
testamentary dispositions made by one
spouse in favor of the other (Family Code,
Art. 50)
g. If both spouses of the subsequent
marriage acted in bad faith, said marriage
shall be void ab initio and testamentary
dispositions made by one in favor of the
other are .revoked by operation of law.
(Family Code, Art. 44)
Revocation by Some Will, Codicil, or Other
Writing Executed as Provided in case of
Wills
Express - When there is a revocatory clause
expressly revoking the previous will or a part
thereof. (Balane, supra, p. 193)
Implied - When the provisions thereof are
partially or entirely inconsistent with those of
the previous wills. (Art. 831)
NOTE: Subsequent wills which impliedly
revoke the previous ones, annul only such
dispositions in the prior wills as are
CIVIL LAW
inconsistent with or contrary to those contained ·
in the later wills. (Art. 831)
Requisites for a Revocation .by Subsequent
Instrument
1. The subsequent instrument must comply
with the formal requirements of a will.
(Molo v. Molo, G.R. No. L-2538, 1951)
2. The testator must possess testamentary
capacity. (Balane. supra, p. 185)
3. The subsequent instrument must either
contain an express revocatory clause or be
incompatible with the prior will. (Art.. 831)
4. The subsequent will must be probated in
order to take ~ffect. (Mo/o v. Mo/o, G.R. No.
L-2538, 1951)
Requisites for a Valid Revocation by
Physical Destruction (Art. 830 (3); Balane,
supra, p. 186-187)
Testamentary capacity at the time of
performing the act of destruction;
1. Intent to revoke (animus revocandi);
2. Actual physical act of destruction, even
partial as long as it is not due to desistance;
3. Completion of the subjective phase; and
4. Performed by the testator himself or by
some other person in his presence and
express direction (Art. 830(3))
NOTE: No amount of destruction without
animus revocandi, or animus revocandi without
destruction (even partial, as long as not due to
desistance) will revoke a will. (Art. 830 (3); •
Betene. supra. ·p. 187)
If the will was burned, torn, cancelled, or
obliterated by some other person, without the
express direction of the testator, the will may
still be established. and the estate distributed
in accordance therewith, if its contents, and
due execution, and the fact of its unauthorized
destruction, cancellation, or obliteration are
established according to the Rules of Court.
(Art. 830)
Doctrine of Presumed Revocation
Where the will cannot be found following the
death of the testator and it is shown that it was
in the testator's possession when last seen,
the presumption is that he must have
destroyed it with animus revocandi. (Gago v.
Mamuyac, G.R. NQ,. L-26317, 1927)
Revocation by $ubsequent Will Effective
even if New Will B,ecomes Inoperative
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A revocation made in a subsequent will shall
take effect, even if the new will should become
inoperative by reason of the incapacity of the
heirs, devisees or legatees designated therein,
or by their renunciation. (Art. 832)
General Rule: Revocation is always effective.
Exception: Doctrine of Dependent Relative
Revocation - when the testator provides in
(' ..
'-. : the subsequent will that the revocation of the
prior one is dependent on the capacity or
acceptance of the heirs, devisees, or legatees
instituted in the subsequent will. (Mo/o v. Molo,
G.R. No. L-2538, 1951)
In the doctrine of dependent relative revocation,
the first will may be admitted to probate and
given effect, despite it being tom provided that·
the testator tore it with the mistaken belief that
the second will was perfectly valid. This is
because he would have not destroyed the first
will had he known that second will is not valid.
The revocation is therefore dependent on the
validity of the second will. (Molo v. Molo, G.R.
No. L-2538, 1951)
Revocation Based on a False or Illegal
Cause
Revocation based on a false or illegal cause is
null and void. (Art. 833)
Requisites:
1. The cause must be concrete, factual and
not purely subjective.
2. It must be false.
3. The testator must not know of its falsity.
4. It must appear from the will thar the
testator is revoking because of the cause,
which is false. (Ba/ane, supra, p. 204)
NOTE: The recognition of an illegitimate child
does not lose its legal effect, even though the
will wherein it was made should be revoked.
{Art. 834)
REPUBLICATION AND REVIVAL OF WILLS
Republication
If the testator wishes to republish a will that
void as to form, the only way to republish it
to execute a subsequent will and reproduce
(Art. 835)
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Revival (Art. 836)
The testator needs only to execute a
subsequent will or codicil referring to the
previous will if the testator wishes to republish
a will that is either:
(a) Void for reason other than a formal defect
(b) Previously revoked
., ·RE.Pl)al.lC"TION .. REVIVAL· ·. .
Takes place by an act Takes place by
of the testator ooeration of law
Corrects extrinsic and Restores a revoked
extrinsic defects will in certain
instances
If after making a will, the testator makes a
second will expressly revoking the first, the
revocation of the second will does not revive
the first will, which can be revived only by
another will or codicil. (Art. 837)
PROBATE (ALLOWANCE OR
DISALLOWANCE OF WILLS)
Probate - Judicial process of proving:
1. Compliance with formal requirements of
will; and
2. Testamentary capacity of the testator.
Irrespective of whether its provisions are valid
and enforceable or otherwise. (Fernandez v.
Dimagiba, G.R. No. L-23638, 1967)
No will shall pass either real or personal
property unless it is proved and allowed in
accordance with the Rules of Court. (Art. 838
(1))
Mandatory Character of Probate
Probate is mandatory in the sense that if there
is a will, properties of the estate should pass
only in accordance with the will, provided it is
admitted for probate. It is mandatory also in the
sense that it takes precedence over intestate
proceedings. Court ordered consolidation of
the intestate proceedings with the testate
proceedings, with the testate proceedings
taking precedence. Heirs cannot enter into
compromise agreement different from the
. terms of the will. If admitted to probate and
is found valid, the will should be the basis of
is disposition as the express will of the testator.
it. (Roberts v. Leonidas, G.R. No. L-5550~. 1984) •
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Two Kinds of Probate
(a) Post-mortem -After the testator's death
(b) Ante-mortem- During his lifetime (Balane,
supra, p. 217)
The testator himself may, during his lifetime,
petition the court having jurisdiction for the
allowanceof his will. (Art. 838)
Scope of Probate Proceedings
As a general rule, probate proceedings only
cover the due execution of the will, extrinsic or
formal validity and testamentarycapacity of the
testator. The court will not look into the Intrinsic
validity of the provisions of the will. (Morales v.
0/ondriz, 2015) However, an exception to this
rule is when the intrinsic defect of the will is
apparent on its face. (Nuguid v. Nuguid, G.R.
No. 23445, 1966)
Finality of a Probate Decree
Subject to the right of appeal, the allowance of
the will, either during the lifetime of the testator
or after his death, shall be conclusive as to its
due execution. (Art. 838) Once a decree of
probate becomes final in accordance with the
rules of procedure,it is res judicata.
Joint wills are considered to have a defect in
form (non-compliance with formalities).
However, if allowed and probated and
becomes final, it can pass properties. (De la
Cerna v. De la Cerna G.R. No. L-28838. 1976)
Scope of Probate Proceedings
General Rule: Probate proceedingscover tne
due execution of the will, extrinsic of formal
validity and testamentary capacity of the
testator only, and no other extraneous matters.
Intrinsic validity cannot be ruled upon (i.e ..
impairment of legitime, unlawful provisions,
disqualifications of heirs, legatees, devices,
etc.) or other extraneous matters. An
extrinsically valid will admitted to probate can
still be declared void intrinsically. (Balane,
supra, p. 221)
Ex~eptions: Other extraneous matters, which
can be raised· and decided in probate
proceedings(Nepomuceno v. CA, G.R. No. L-
62952, 1985; Balanay v. Martinez, G.R. No. L-
39247, 1975)
CIVIL LAW
1. Provisional ruling on ownership of
properties
The ruling is only for purposes of Inclusion in
the inventory of assets of the estate. It not
conclusive and is subject to final decision in a
separate action to resolve title. In case of
community properties of spouses, there must
first be liquidation of ACP or CPG because the
assets of the estate should be net of the share
of surviving spouse. (Pastor v. Pastor G.R. No.
L-56340, 1983).
However, the rule of provisional character of
determinationof ownership not being within the
proper jurisdiction of the probate court applies
only if the dispute is between the estate and
third persons claiming ownership, in which
case a separate proceeding should be
instituted to settle the issue of ownership. A
probate cour1 has jurisdiction if the dispute is
only among . heirs, and the issue is to
determine whether the property is part of the
ACP/CPG or is a separate property of one of
the spouses. (Romero v. CA, G.R. No. 188921,
2012)
The approval qf the inventory and the
concomitantdeterminanon of the ownership as
basis for mcluslon or exclusion from the
inventory were provisional and subject to
revision at any time during the course of the
administration proceedings. (Aranas v.
Mercado, G.R. No. 156407, 2014)
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2. Apparent intrinsic defect
If the intrinsic defect is apparent on the face ol
the will, since probate of the will is
unnecessary (as In preteritlon, which annuls
the will) (Nuguid v. Nuguid, G.R. No. 23445,
1966)
3. For practical considerations when
testamentaryprovisions are of doubtful validity
(Nepomuceno v. CA, G.R. No. L-62952, 1985);
and
4. All heirs are in agreement that intrinsic
validity should be determined first. (Reyes v.
CA', G.R. No. 139587, 2000)
NOTE: Once the will is admitted to probate,
the court may continue to proceed in
determiningthe intrinsic validity of the will.
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Decree of Probate Conclusive as to the Due
Execution or Formal Validity of the Will
This means that:
('
1 1. The fact that the will is indeed the
testator's last will and testament;
( . 2. Compliance with the required formalities
(Balane, supra, p. 221);
3. Testamentary capacity of the testator;
(Gallanosa v. Arcangel, G.R. No. L-29300,
1978)
4. Due execution of the will - meaning, that
testator was of sound disposing mind, that
he freely executed the will, that there is no
duress, fraud, undue influence, menace,
r that the will is genuine (not forged), and
that testator was not disqualified from
making a will. (Dorotheo v. CA, G.R. No.
108581, 1999).
Proof of Extrinsic Validity
Attested I Notarial Will
1. Present original will (ideally)
2. Present- any attesting witnesses and/or
notary public to prove due execution/
testamentary capacity; and
3. If no one is available, present any available
evidence to show authenticity or validity of
contents of attestation clause. (Rules of
Court, Rule 76)
Holographic Will
1. Present original will or at least a
photostatic, scanned or any legible copy;
and
2. One person familiar with the handwriting of
the testator, unless contested in which
case, three witnesses familiar with the
handwriting of the testator - must be
presented to prove that the will was written
in the handwriting of the- testator. (Rules of
Court, Rule 76, Sec. 5)
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ATTESTEff/ NOTARIAL,VVJLLS' . · !,
Uncontested One subscribing witness only, if
such witness testify that the will
was executed as is required by
law (Rule 76, Section 5, Rules
of Court) _ indeed been written by the testator. Obviously,
Contested All the subscribing witnesses.
:._' and the notary (Rule 76,
Section 11, Rules of Court
B!'l19!119!!
'·' Uncontested At least one witness who
'--~~~·~ ----~~~~~~~~
knows the handwriting and
...........si nature of the testator
!... -
s..
CIVIL LAW
explicitly declare that the will
and the signature are in the
handwriting of the testator (Art.
811}
Contested At least three witnesses who
knows the handwriting and
signature of the testator
explicitly declare that the will
and the signature are in the
handwriting of the testator (Art.
811)
Expert Witness ~'.
For holographic wills, in the absence of any
competent witness. and if the court deems it
necessary, expert testimony may be resorted
to. (Art. 811) 1
Probate of Lost or Destroyed Will
Requirements for the Probate of a Lost or
Destroyed Will (Rules of Court, Rule 76, Sec.
5)
1. Establish the execution and validity of the
will
2. Establish that the will is in existence at the
time of death of the testator, or is shown to
have been fraudulently or accidentally
destroyed In the lifetime of the testator
without his knowledge
3. Its provisions must be clearly and distinctly
proved by at least two credible witnesses
Lost or Destroyed Holographic Will
General Rule:· In the probate of a holographic
will, the document itself must be produced. A
lost holographic will cannot be probated. (Gan
v. Yap, G.R. No. L-12190, 1958)
The oppositor may present witnesses who
know the testator's handwriting, who after
comparing the will with other writings or letters
of the deceased, have come to the conclusion
. that such will has not been written by the hand
of the testator. And the court in view of such
contradictory testimony may use its own its
own visual sense, and decide in the face of the
document, whether the will submitted to it has
when the will itself is not submitted these
means of opposition and of assessing the
evidence are not available. The only guaranty •
of authenticity-the testator's handwriting-has
disappeared. (Gah' v. Yap, G.R. No. L-12190~
1958) ';~
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Exception: A photostatic copy or Xerox copy· the parties in the civil case already presented
of the holographic will may be allowed because their evidence regarding the issue of heirship,
comparison can be made with the standard and the RTC had consequently rendered
writings of the testator. (Rode/as v. Aranza, judgment upon th~ issues it defined during the
G.R. No. L-58509, 1982) pre-trial. (Rebusquillo v. Gualvez, G.R. No.
204029, 2014)
Proof of Testamentary Capacity
Testamentary capacity including soundness of An Affidavit of Self-Adjudication is only proper
mind can be proven by the attestation clause when the affiant is the sole heir of the
and testimony of witnesses and/or notary decedent. (Rebusquillo v. Gua/vez, G.R. No.
public. In the absence of any proof, the court 204029, 2014)
may rely on the presumption of soundness of
mind. (Art. 800) A will shall be valid even though it does not
contain an institution of an heir, or such
Exclusive Grounds for Disallowance of institution does not comprise the estate, or
Wills (LIF-P-FRAM) (Art. 839) even though the person so instituted should
1. Formalities required by haw were not not accept the inheritance or should be
complied with; incapacitated to succeed. In such case, the
2. Testator was [nsane or incapable of testamentary dispositions made in accordance
making a will at the time of execution (lack with law shall be complied with, and. the,
of testamentary capacity); remainder of the estate shall pass to the legal
3. The will was executed through .E_orce or heirs. (Art. 841)
under duress, or the influence of fear, or
threats; .: ; :· .. : ... D.ISPOSIT1.0N$ BY.WILL'- · '· :
4. The will was procured by undue and No compulsory Dispose by will the entire
improper fressure and influence, on the heirs hereditary estate
part of the beneficiary or of some other With compulsory Dispose by will the free
person; heirs portion (net hereditary
5. The testator's signature was procured estate minus leaitimes)
through Fraud; and (Balane, supra, p. 239)
6. If the testator !Cted by Mistake or did not
intend that the instrument he signed should Intestacy Follows If Entire Free Portion Not
•
be his will at the time of affixing his Disposed of by Will
signature. If the testator has instituted one or several
heirs, and the institution of each is limited to an
NOTE: Once a will is disallowed because of aliquot part of the inheritance, intestate
any of the following grounds, intestate succession takes place with respect to the
succession will ensue. remainder of the disposable portion. (Art. 851)

2. INSTITUTION OF HEIRS Rules on Institution of Aliquot Share Less

Than or In Excess of the Whole Estate
The rules will apply if the following concur:
An act by virtue of which a testator designates 1. There is more than one instituted heir.
in his will the person· or persons who are to 2. The testator iintended them to get the
succeed him in his property and transmissible whole estate:- or the whole disposable
rights and obligations. (Art. 840) portion.
3. The testator has designated a definite or
NOTE: The declaration of heirship must be aliquot portion for each heir. (Balane,
made in a special proceeding, not in an supra .. p. 251-252)
independent civil action. However, the Court
held that recourse to administration
proceedings to determine who the heirs are is
sanctioned only if there is a good and
compelling reason for such recourse. Hence,
the Court had allowed exceptions to the rule
requiring administration proceedings as when

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acquainted. The testator may institute

': .i' RµLE~.'~N INSTITl.,JTIONOF ALIQUOT · somebody who is a perfect stranger to him,
'·~.Ii.ARE LESS THAN OR·IN EXCESS OF lHEf · provided the identity is clear. (Balane, supra, p.
(' ·':, ',,· . .-·. · ... WHOLEESTATE. ,· .... ·,.:.·.· 241)
\ ) I • 'I I I

Art. 852 Art. 853

Total of all the aliquot Total of all the aliquot Dispositions in Favor of an Unknown
l ' parts of the instituted parts of the instituted Person (Art. 845)
heirs do not cover the heirs exceed the General Rule: Every disposition in favor of an
whole inheritance, or whole inheritance, or unknown person shall be void.
the whole free EOrtion the whole free portion
Remedy: Each part Remedy: Each part Exception: By some event or circumstance his
shall be increased shall be reduced identity becomes certain.
proportionate Iv proportionately
Dispositions in Favor of a Definite Class
NOTE: In Article 852. the difference between A disposition in favor of a definite class or
the total of all the portions and the whole of the group of persons shall be valid. (Art. 845)
( . inheritance or free portion cannot pass by
Intestacy because the testator's intention is to Presumptions In Institution of Heirs
give the instituted heirs the entire amount. In the absence of specific provisions in the will,
(Balane, supra, p. 252) these presumptions will apply: (E-ln-S)

Requisites for a Valid Institution of Heir (a) Equality - Heirs who are instituted without
1. Designation in the will of person/s to designation of shares inherit in equal parts.
(Art. 846)
succeed (Art. 840)
2. The will specifically assigns to such person
Shares of Brothers and Sisters in
an inchoate share in the estate.
Testamentary Succession
3. The person so named has capacity to
If the testator,,should institute his brothers
succeed.
and sisters, and he has some full blood
4. The will is formally valid
and others o'( half-blood, the inheritance
5. No vice of consent is present
shall be distributed equally unless a
6. No preterition results from the effect of
different intention appears. (Art. 848)
such will (Art. 854)
r
NOTE: In intestacy, the proportion of 2:1
Designation in the Will of Person/s to
between full and half-blood siblings and
Succeed
the Iron Curtain Rule between legitimate
and illegitimate siblings shall be applied.
Directory -· Designation of name and surname
(Balane, supra, p. 240)
(b) Individuality - Heirs collectively instituted
are deemed individually named unless a
Mandatory - Identity of the heir must be
contrary intent is prove. (Art. 847)
established, otherwise void disposition, unless
his identity becomes certain. (c) §.imultaneity - When several heirs are
instituted, they are deemed instituted
simultaneously and not successively. (Art.
NOTE: If there is ambiguity in the designation,
the designation must be resolved by discerning 849)
the testator's intent. If the ambiguity cannot be
Effect of False Cause for Institution of an
resolved, intestacy to that portion results. (Art.
844, par. 2) Heir
General Rule: The falsity' of the stated clause
Unknown person - A successor whose does not affect the validity or efficacy oT the
identity cannot be determined because the institution. The false cause is merely •
designation in the will is unclear or ambiguous. considered as not written. (Art. 850)
I •
(Balane, supra, p. 241)
Exceptions·: It appears from the will that the.
NOTE: Unknown persons do not refer to one testator would not have made such designation
with whom the testator is not personally
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If he had known the falsity of such cause. (Art.
850)
Requisites for the Exception to Apply:
1. The cause for the institution of heirs must
be stated in the will (Austria v. Reyes, G.R.
No. L-23079, 1970);
2. The cause must be shown to be false
(Austria v. Reyes, G.R. No. L-23079, 1970);
3. It must appear from the face of the will that
the testator would not have made such
institution if he had known the falsity of the
cause. (Austria v. Reyes, G.R. No. L-
23079, 1970)
PRETERITION
The preterition or omission of one. some, or all
of the compulsory heirs in the direct· line,
whether living at the time of the execution of
the will or born after the death of the testator.
shall annul the institution of heir; but the
devises and legacies shall be valid insofar as
they are not inofficious. (Art. 854)
If the omitted compulsory heirs should die
before the testator, the Institution shall be
effectual, without prejudice to the right of
representation. (Art. 854)
Definition of Preterition
Preterition is the total omission of a
compulsory heir from the inheritance. It
consists in the silence of the testator with
regard to a compulsory heir, omitting him in his
will, either by not mentioning him at all, or by
not giving him anything in the hereditary
property but without expressly disinheriting him,
even if he is mentioned in the will in the latter
case. (Heirs of Ureta v. Ureta, G.R. No.
165748, 2011)
NOTE: Preterition is a concept of testamentary
succession and requires a will. (Heirs of Ureta
v. Ureta, G.R. No. 165748, 2011)
Elements of Preterition (OCLIT)
1. There must be an Omission of one, some
or all of the heir/s Tn the will, without the
heir being expressly disinherited.
2. The omlssion must be that of a
£ompulsory heir in the direct line.
3. The omitted compulsory heir must. be
Living or at least conceived at the time of
testator's death. (Art. 854)
4. The omission must be complete and Total
in character. The heir in question must
CIVIL LAW
have received nothing from the testator by
way of:
a. Testamentary succession;
b. Legacy or devise;
c. Donation inter vivos;
d. Intestacy (Balane, supra, p. 266)
NOTE: What constitutes, preterition is not
omission in the will but being completely left
out of the inheritance. (Seangio v. Reyes, G.R.
No. 140371-72, 2006)
Determination of Preterited Heirs
The determination of whether or not there are
preterited heirs can be made only upon the
testator's death. (JL T Agro v. Balansag, G.R.
No. 141882, 2005):
1
Compulsory Helr'In the Direct Line
This covers children or descendants, or in
default of children ior descendants, parents or
ascendants. Illegitimate descendants and
ascendants are also protected, since the law
does not distinguish. (Balane, supra)
Adopted children are considered compulsory
heirs in the direct line, and may be preterited.
This is because adoption gives to the adopted
child the same rights and duties as if he were a
legitimate child of the adopter. (Acain v.
Intermediate Appellate Court, G.R. No. 72706,
1987) •
Effects of Preterition
1. The institution of heir is annulled.
The annulment is in toto, unless in the will
there are, in addition, testamentary
dispositions in the form of devises or
legacies. (Nuguid v. Nuguid, G.R. No. L-
23445, 1966) Preterition annuls the
institution of an heir and annulment throws
open to intestate succession the entire
inheritance. (Acain v. Intermediate
Appellate Court, G.R. No. 72706, 1987)
2. Devises and legacies shall remain valid as
long as they are not inofficious.
The only provislons which do not result in
intestacy are the legacies and devises
made in the will for they should stand valid
and respected, except in sofar as the
legitimes are concerned. (Acain v.
Intermediate Appellate Court, G. R. No.
72706, 1987)
...
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If the devises and legacies impair the Right of Representation of Legal / Intestate
legitimes, they are merely reduced. Heir .,
(Balane, supra) 1. Predecease;
r·
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2. Incapacity
3. If the omitted compulsory heir should die
before the testator, the institution shall be 3. SUBSTITUTION OF HEIRS
effectual, without prejudice to the right of
r· representation.
i
. . ..
; The appointment of another heir so that he
may enter into the inheritance in default of the
.· -. 'pRETERIJION ·DISINHE~ITANCE :
r< heir originally instituted. (Art. 857)
\_ : Deprivation of a Deprivation of the
compulsory heir of his compulsory of his
NOTE: Only one substitution is allowed. The
leqitime is tacit legitime is express
person substituting cannot be substituted again.
Law presumes that Done with a legal
there has been cause
Substitute Subject to Same Charges and
merely an oversight or Conditions Imposed on Original Heir
mistake on the part of General Rule: The substitute shall be subject
the testator to the same charges and conditions imposed
It results in the The nullity is limited to upon the instituted heir. (Art. 862)
complete nullity of the the portion of the
institution of heir, estate of which the Exception: The testator expressly provided
except the devises disinherited heir has the contrary, or the charges or conditions are
andlegatees,aslong been legally deprived. personally applicable only to the heir instituted.
as they are not (Art. 862)
inofficious.
Omitted heir gets not If disinheritance is Classes of Substitution
only his legitime but unlawful or ineffective, (a) Vulgar or Simple - The testator may
also his share in the for absence of one or designate one or more persons to
free portion not other of the requisites, substitute the heir or heirs instituted in
disposed of by way of the compulsory heir is case such heir or heirs should:
legacies or devises merely restored to his i. Die before him (Predecease)
rightful share. (Nuguid ii. Should not wish to be instituted,
v. Nuguid, G.R. No. (Renounce) or
L-23445) iii. Should be incapacitated to accept
the inheritance (Incapacitated) (Art.
859).
Successional Rights are lntransmlsslble
An heir, whether compulsory, voluntary, or (b) Brief - Two or more persons may be
legal, transmits nothing to his heirs, in case of substituted: for one person (Art. 860)
predecease, incapacity, renunciation, or
disinheritance. However, in case of (c) Compendious - one person may be
predecease or incapacity of compulsory or substituted fortwo or more heirs (Art. 860)
.1
legal heirs, as well as disinheritance . of
compulsory heirs, the rules on representation (d) Reciprocal -,Jf heirs instituted in u~equal
shall apply. (Balane, supra) shares should . be reciprocally substituted,
the substitute shall acquire the share of the
Right of Representation of Compulsory heir who dies, renounces, or incapacitated,
Heirs unless it clearly appears that the intention
1. Predecease; of the testator was otherwise. If there are
(
2. Incapacity more than one substitute, they shall have •
c.. 3. Disinheritance (Art. 859) the same share in the substitution as in the
institution. (Art. 861)
( . Testamentary I Voluntary Heirs
l..J
No right of representation NOTE: If one is substituted for two or more
original heirs, substitution will only take place if
i..
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I all the original heirs are disqualified. If not all of
the original heirs are disqualified,the share left
vacant will accrue to the surviving co-heir or
co-heirs.
(e) Fideicommissary Substitution - If the
testator institutes an heir with an obligation
to deliver to another the property so
inherited. The heir instituted to such
condition Is called the .first heir or fiduciary
heir, the one to receive the property is the
fideicommissaryor second heir. (Art. 863)
Simple Substitution
Simple substitution may be done by the
testator:
(a) By specifyingall the three causes,
(b) By merely providing for simple substitution.
(Art. 859)
A simple substitution, without a statement of
the cases to which it refers, shall comprise the
three causes mentioned, unless the testator
has otherwiseprovided. (Art. 859)
Restricted Simple Substitution
The testator may limit the operation of simple
substitution by specifying only one or two of
the three causes.
Requisites for a Fideicommissary
Substitution (15t-2nd·1-PT-LEFree)
1. A fiduciary or a FIRST heir who takes the
property upon the testator's death. (Art,
863)
2. A fideicommisary or SECOND heir who
takes the property subsequently from the
fiduciary. (Art. 863)
3. The second heir must be ONE degree
from the first heir. Thus, the
fideicommisary can only be a parent or a
child of the fiduciary. (Palacios v. Ramirez,
G.R. No. 27952. 1982)
4. The dual obligation imposed upon the
fiduciary to f reserve the property and to
Transmit it after the lapse of the period to
the fideicommissaryheir. (Art. 865)
5. Both heirs must be J:iving and qualified to
succeed at the time the testator's death. ·
6. The fideicommissary substitution must be
gxpressly made. (Art. 865)
7. The fideicommissary substitution is
imposed on the f!!! portion of the estate
and never on the legitin'le.{Att. 864)
CIVIL LAW
NOTE: Pending the transmission of the
property,the fiduciary is entitled to all the rights
of a usufructuary having the right to use and
enjoy the property, but without the right to
dispose the same. Although the
fideicommissary heir does not receive the
property upon the testator's death, his right
thereto vests at the time and merely becomes
subject to a period, and that right passes to his
own heirs should he die before the fiduciary's
right expires. (Balane, supra)
Tenure of Fiduciary
Primary Rule: Period indicated by the testator
Secondary Rule: If the testator did not
indicate a period, then the fiduciary's lifetime.
(Balane, supra, citing Manresa)
Two Ways of Making an Express Imposition
of Fideicommissary Substitution
1. By the use of the term fideicommissary;or
2. By imposing upon the first heir the
absolute obligation to preserve and to
transmit to 'the second heir. (Art. 865)
Transmission of Property from First Heir to
Second Heir
General Rule:· The fiduciary should deliver the
propertywithout deductions.
Exceptions: Deductions which arise from •
legitimate expenses, credits and improvements.
(Art. 865) . ·,!
Right to Successl'on of the Second Heir
The second heir shall acquire the right to the
succession from the time of the testator's
death, even though he should die before the
fiduciary. The right of the second heir shall
pass to his heirs. (Art. 866)
The following shall not take effect: (Art. 867).
1. Fideicommissary substitutions which are
not made in an express manner, either by
giving them this name, or imposing upon
the fiduciary the absolute obligation to
deliver the property to a second heir;
2. Provisions which contain a perpetual
prohibition to alienate, and even a
temporary one, beyond the limit fixed in
Article 863.
3. Those which impose upon the heir the
charge of paying to various persons
successively, beyond the limit prescribed
in Article 863, a certain income or pension;
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4. Those which leave to a person the whole which the performance of an obligation
, -, or part of the hereditary property in order depends (Art. 1179)
that he may apply or invest the same (b) Term - The day or time when an obligation
r > according to secret instructions either becomes demandable or terminates
I I I
communicated to him by the testator. (Art. 1193)
(' (c) Mode - The statement of the object of the
\ Nullity of Fideicommissary Substitution institution or the application of the property
The nullity of the fideicommissary substitution left by the testator or the charge imposed
does not prejudice the validity of the institution on the heir. (Art. 882)
of heirs first designated; the fideicommissary
\.) clause shall simply be considered as not It is an obligation imposed upon the heir,
written. (Art. 868) without suspending the effectivity of the
institution or the rights to the succession.
() NOTE: When the fideicommissary substitution (Rabadilla v. Court of Appeals, G.R. No.
fails to fulfill the above requirements for its to 113725, 2000)
be valid, the institution of the first heir simply (d) Disposicion Captatorial Scriptura
becomes pure and unqualified. (Ba/ane, supra) Captatoria - A condition that the heir shall
make some provision in his will of the
Ownership and Usufructuary Provisions testator or of any other person. This is
A provision whereby the testator leaves to a prohibited because it will make the making
person the whole or part of the inheritance, of the will a contractual act. (Art. 875)
( and to another the usufruct, shall be valid. (Art.
869) It is not merely the condition that is
declared void but the testamentary
Successive Usufructuaries disposition itself which contains the
,· If the testator gives the usufruct to various condition. (Ba/ane, supra)
persons, not simultaneously, but successively, (e) Casual Condition - A condition is casual
the requisites of a fideicommissary substitution if it depends upon chance and/or upon the
must be present. (Art. 869) will of a third person
(f) Mixed Condition - A condition is mixed if
Period of lnallenabllity of the Estate It depends both partly upon the will of the
General Rule: The dispositions of the testator heir himself and upon chance and/or the
declaring all or part of the estate inalienable for will of a third person
more than 20 years are void. (Art. 870) (g) Potestative Condition One the
fulfillment of which depends purely on the
Exception: In fideicommissary substitution, heir.
the period is the lifetime of the first heir. (h) Suspensive Term - One that merely
suspends the demandability of a right;
4. CONDITIONAL TESTAMENTARY happening is certain.
(i) Caucion Muciana - Bond or security that
... DISPOSITIONS AND DISPOSITIONS should be given in favor of those who
WITH A TERM would get the property if the condition not
be complied with. (Art. 879)
,· . The institution of an heir may be made
Interpretation
conditionally, or for a certain purpose or cause.
When in doubt whether there is a condition
(Art. 871)
or merely a mode, consider the same as
Three Kinds of Testamentary Dispositions mode.
(a) Conditional dispositions • When in doubt as to whether there is a
mode or merely a suggestion. consider •
(b) Dispositions with a term
same only as a suggestion.
'·' , (c) Dispositions with a mode
• A condition suspends but does not obligate·,
Definitions whlle a mode obligates but does not
(a) Condition - Future or uncertain event. or suspend (for he who inherits with a mode
a past event unknown to the parties, upon is already an heir; one who inherits
conditionally is not yet an heir.)
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Condition on the Legitimes is Prohibited If already fulfilled at the time of execution of

The testator cannot impose any charge, the will
condition or substitution whatsoever upon the a. If testator is unaware of fact of fulfillment-
legitimes. Should he do so, the same shall be Deemed fulfilled.
considered as not imposed. (Art. 872) b. If testator is aware of the fact of fulfillment
i. If it can no longer be fulfilled again -It is
Conditions which are Impossible, Contrary deemed fu\filled
to Law or Good Customs ii. If it can be fulfilled again - It must be
These conditions are considered as not fulfilled aqaln, (Art. 877)
imposed, and shall not prejudice the heir, even
if the testator provide otherwise. (Art. 873) The Constructive Compliance (Art. 883, par. 2)
testamentary disposition is not annulled; it If the person interested in the condition should
simply becomes pure. (Balane, supra) prevent its fulfillment, without the fault of the
heir, the condition shall be deemed to have
Conditions Prohibiting Marriage been complied with.
General Rule: An absolute condition not to
contract a first or subsequent marriage shall be . : · · · ROLS~.ON APPLIC#\BILITY OF ·· . .
considered as not written. (Art. 874) ·.' . . . ::·c·ONST.RIJCTIVE COMPLIA~ice: ...
Exception: The condition has been imposed CASUAL
MIXED CONDITION
on the widow or widower by the deceased CONDITION
spouse, or by the latter's ascendant's or Not Dependent Dependent on Will
descendants. (Art. 874) Applicable Partly on of Third Party
Chance
The right of usufruct, or an allowance or some Not Applicable only if
personal prestation may be devised or Applicable third party is
bequeathed to any person for the time during interested in the
which he or she should remain unmarried or in condition (Art.
widowhood. (Art. 874) 883)

RULES ON POTESTATIVE, CASUAL AND Effects of Suspensive Condition or Term

MIXED C,ONDITIONS
•
(Art. 880)
The estate shall be placed under
Positive Potestative Condition (Art. 876) administration until:
General Rule - It must be fulfilled as soon as (a) Condition is fulfilled, or
the heir learns of the testator's death. (b) Until it becomes certain that condition will
Exception: The condition, already complied never be fulfilled, or
with, is of such nature that it cannot be fulfilled (c) Until arrival of the term
again.
The same shall be done if the heir does not
Negative Potestative Condition (Art. 879) give the security required as in negative
If the potestative condition imposed upon the potestative conditions. (Art. 880)
heir is negative, or consists in not doing or not
giving something, the heir shall comply by · . .' ._; IF':1H·e. ',' . . . IF IT ·eECOrJ!ES .. · :
giving a security (caucion muciana) that he will '. :·. CQ.NDITION · · : CERTAIN'.T!"'AT , ' ·
not do or give that which has been prohibited . · HA~P.EN$ . · ' COND.ITION W.ILL NO.T ;
by the testator, and that in case of •••
I 1,
.'· ••
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• •
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•
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contravention he will return whatever he may The property The property will be
have received, together with its fruits and will be turned lurned over to a
interests. over to the .secondary heir, if there is
instituted heir. one, or to the intestate
Casual or Mixed (Art. 877) heirs, as the case ma be.
It is sufficient if it happens or be fulfilled at any
other time before or after the testator's death,
unless testator provides otherwise.

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Dispositions with a Term
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Suspensive Term (Art. 878)
A disposition with a suspensive term does not
prevent the instituted heir from acquiring his
rights and transmitting them to his heirs even
' I
before the arrival of the term.
l· NOTE: The heir's right vests upon the
testator's death. Should the heir die before the
r: arrival of the suspensive term, he merely
transmits his right to his own heirs who can
( ·, demand the property when the term arrives.
' (Balane, supra)
The designation of tile day or time when the
effects of the institution of an heir shall
commence or cease shall be valid. (Art. 885)
( :1 ...
1:.:
:·:·., ••••
1,1
1
• ·TERM;·
SUSPENSIVE
Before the arrival of
the term, the property
should be delivered to
the intestate heirs.
However, a sufficient
security has to be
posted by the
intestate heirs.
Dispositions with Modes
Dispositions with modes may be claimed at
( once, provided that the instituted heirs give
security for compliance with the wishes of the
testator and for the return of anything he or
they may receive, together with its fruits and
interests, if he or they should disregard this
obligation. (Art. 882, par. 2)
Indicators of a Modal Institution
The testator states the following:
1. The object of the institution;
2. The purpose or application of the property
left by the testator;
3. The charge imposed by the testator upon
the heir. (Rabadilla v. Court of Appeals,
G.R. No. 113725, 2000)
NOTE: An obligation imposed upon the heir
should not be considered a condition unless it
clearly appears from the will itseli that such
was the intention of the testator. In case 'of
doubt, the institution should be considered as
modal and not condition. (Rabadi/la v. Court of
I Appeals, G.R. No. 113725, 2000)
\..)
·.....,.
CIVIL LAW
Analogous Performance
When without fault of the heir, a modal
institution cannot take effect in the exact
manner stated by the testator, it shall be
complied with in a manner most analogous to
and in conformity with his wishes. (Art. 883,
par. 1)
Prohibited or Void Conditions
The prohibited or void conditions are: (LIM-Wiii)
1. Charges, conditions, substitutions, upon
the _hegitimes. (Art. 872)
2. [mposslble conditions and those contrary
to law or good customs. (Art. 873)
3. An absolute condition not to contract a first
or subsequent Marriage. (Art. 874)
However, if the condition not to contract a
first or subsequent marriage has been
':. 1 I 11 :
1
imposed on the widow or widower by the
RESOLUTORY deceased spouse, or by the latter's
Before the arrival of ascendants or descendants, such
the term, the property condition is valid. (Art. 874)
should be delivered to 4. Disposition Captatoria -Any disposition
the instituted heir. No made upon the condition that the heir shall
security is required of make some provision in his WILL in favor
them. (Art. 885) of the testator or of any other person. (Art.
875)
5. LEGITIMES
The part of the testator's property which he
cannot dispose :lof because the law has
reserved it for his compulsory heirs. (Art. 886)
NOTE: When the disposition is for valuable
consideration, there is no diminution of the
estate by merely a substitution of value, that is
the property sold is replaced by the equivalent
monetary consideration. (Buenaventura v.
Court of Appeals, G.R. No. 126376, 2003;
Manongsong v. Estimo, G.R. No. 136773,
2003)
Classes of Compulsory Heirs
(a) Primary - Those who have precedence
over and exclude other compulsory heirs
i. Lf~gitimate or adopted children
and/or descendants (legitimate), •
with respect to their legitimate
,parents and ascendants (Arellano.
v. Pascual, G.R. No. 189776, 2010,
citing Tolentino 1992 ed., p. 252)
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(b) Secondary - Those who succeed only in
the absence of the primary heirs
i. Legitimate parents and
ascendants (legitimate), with
respect to their legitimate children
and descendants
ii. Parents of illegitimate children -
only in default of any kind of
descendants (Arellano v. Pascual.
G.R. No. 189776, 2010, citing
Tolentino 1992 ed., p. 252)
(c) Concurring - Those who succeed
together with the primary or the secondary
compulsory heirs
i. Widow or widower (legitimate) -
the surviving spouse referred to is
the spouse of the decedent.
ii. Illegitimate children and/ or
descendants (Arellano v. Pascual,
G.R. No. 189776, 2010, citing
Tolentino 1992 ed., p. 252)
Compulsory Heirs (Art. 887)
(a) Legitimate or adopted children and/or
legitimate descendants.
NOTE: The nearer exclude the more
remote. Hence, children exclude
grandchildren, except when the rule on
representation is proper.
(b) Legitimate parents and/or ascendants,
parents of illegitimate children.
NOTE: Legitimate parents or ascendants
are excluded only by legitimate children.
Parents of illegitimate children are
excluded by both legitimate and illegitimate
children. The illegitimate ascending line
does not go beyond the parents.
(c) Surviving spouse
NOTE: The marriage between the
decedent and the surviving spouse must
either be valid or voidable. If voidable,
there should have been no final decree of
. annulment at the time of the decedent's
death.
Separation de facto is not a ground for the
disqualification of the surviving spouse as
heir.
CIVIL LAW
Effect of decree of legal separation:
(a) On the offending spouse - disqualified
from inheriting
(b) On the innocent spouse - no effect
( c) If after the final decree of separation
there was a reconciliation between the
spouses, the reciprocal right to
succeed is restored.
(d) Illegitimate children and/or descendants
NOTE: In all cases of illegitimate children.
their filiation must be duly proved. (Art. 887)
As to illegitimate descendants the rule is
also the nearer exclude the more remote,
without prejudice to representation when
proper.
General Rules in Ascertaining Legitimes
(a) Rule of proximity: The nearer exclude the
more remote; except when the rule on
representation is proper. (Art. 962)
(b) Legitimate parents or ascendants are
excluded only by legitimate children. (Arts.
896, 899) •
(c) Parents of illegitimate children are
excluded by both legitimate and illegitimat~
children. (Art. 903) .
(d) The illegitimate ascending line does not go
beyond the parents. (Art. 903; Balane,
supra, p.345)
(e) In the direct ascending line. there Is the
rule of division by line. The legitime is
divided equally between the paternal and
maternal side. After the portions
corresponding to the line has been
assigned. there will be equal
apportionment between or among the
recipients within the line, should there be
more than one. (Art. 890)
(f) There is no right of representation in the
direct ascending line. (Art. 972)
(g) For a surviving spouse to inherit from the
deceased, the marriage between the
decedent and the widow/widower must be
either valid or voidable. (Balane, supra,
p.341)
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Rules of Surviving Spouse as Sole

lr". Compulsory Heir (Art. 900)

r >I General Rule: The surviving spouse gets 1 /2

' i
of the estate
{ ',
v .
Exception: 1/3 of the estate, if the following
circumstances are present:
1. The marriage was in articulo mortis;
2. The testator died within 3 months from the
\f' . time of the marriage;
3. The parties did not cohabit for more than 5
year; and
4. The spouse who died was the party in
r :
articulo mortis at the time of the marriage .
'··

1-
\

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DIFFERENT COMBINATIONS OF SHARES OF COMPULSORY HEIRS (Art. 888-903)

HEIR
.
. . . . .. ..
,·
., . ·· ·· 'LEGITIME · ·.·.·
ii\.'_::::. : :_ ::·. •,,
'•

·' .. ·.. · .· t ·,, o :. o ,'IO o: 'i I: : 0 I

. ·FREE
: · .PORtiON
Legitimate Children &
Descendahts 1/2 1/2
Legitimate Children (LC) & l.eoitimate Children - 1/2 Whatever
Surviving Spouse Spouse - Eaual to share of 1 LC remains
One Legitimate Child/Descendant Child/Descendant - 1 /2
'-& Surviving Spouse
- 1/4
Spouse - 1/4
Leaitimate Children -1/2
Legitimate Children (LC) & Whatever
Illegitimate Children - 1/2 of share of 1 LC as may
Illegitimate Children (ILC) remains
be accommodated, otherwise reduce
- orooortionatelv
LC -1/2
Legitimate Children/Descendants,
Surviving Spouse & Illegitimate Spouse - equal to 1 share of 1 LC
Whatever
Children ILC - 1 /2 of share of 1 LC as may be remains
accommodated, otherwise reduce proportionately
LC -1/2
One Legitimate Child, Illegitimate ILC - 1/2 of share of 1 LC as may be Whatever
Children & Surviving Spouse accommodated, otherwise reduce remains
orooortionately
seouse -1/4 of estate
Parents & Ascendants of
1/2 1/2
Leaitimate Children

Parents/Ascendants of Legitimate
Children & Illegitimate Children
.
Legitimate Parents/Ascendants - 1/2
1/4
.
Illegitimate Children - 1/4
Legitimate Parents/Ascendant- 1/2
Parents/Ascendants of Legitimate "---
Children & Surviving Spouse Spouse -1/4 1/4

Parents/Ascendants of Legitimate Parents/Ascendants -1/2

Children, Illegitimate Children & ILC -1/4
1/8
Surviving Spouse, Spouse -1/8

General Rule or If in artiuculo mortis, but cohabited

1/2
for more than 5 years - 1 /2
Surviving Spouse Only
1 /3 if in articulo mortis 2/3
ILC - 1/3
Surviving Spouse & Illegitimate
1/3
Children Spouse - 1/3
I-

Surviving Spouse & Parents Of Spouse - 1/4

1/2
Illegitimate Children Parents - 1 /4
Illegitimate Children Onlv 1/2 1/2
Parents Of llleaitimate Children 1/2 1/2

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Reserva Troncal
This is the reservation by virtue of which an
ascendant who inherits from his descendant
any property which the latter may have
acquired by gratuitous title from another
ascendant or a brother or sister, is obliged to
reserve the property for the benefit of relative
within the third degree and who belong from
the same line from which the property came
from. (Art. 891)
NOTE: It constitutes as an exception to both
the system of legitimes and the order of
intestate succession.
~ I
Purpose of Reserva Troncal:
1. To reserve certain properties in favor of
certain persons
2. To prevent persons outside a family from
acquiring, by some chance or accident,
property which otherwise would have
remained with the said family
~- Requisites of Reserva Troncal (GWOT)
1. The property was acquired by a person
(Prepositus) from an ascendant or from a
brother or sister (Origin) by §ratuitous title;
... -· Acquisition by Gratuitous Title (First
Transfer)
{ ·-
a. By donation, or
b. By any kind of succession
2. The said descendant died Without
legitimate issue;
r: NOTE: Only legitimate descendants will
\. - prevent the property from being inherited by
the legitimate ascending line by operation of
law.
3. The property is inherited by another
descendant (Reservista) by Qperation of
law;
Transmission by Operation of Law
(Second Transfer)
a. Compulsory succession, or
b. Intestate succession
4. There are relatives within the !hird degree
(Reservatarios) belonging to the line from
which the said property came. (Chua v.
Court of First Instance, G.R. No. L-299<J.1.
1977)
NOTE: The provisions of Art. 891 only apply to
legitimate relatives. (Nieva v. Alcala, G.R. No.
L-13386, 1920)
Three Transmissions Involved in Reserva
Tron cal:
1. A first transmission by lucrative title
(inheritance or donation) from an
ascendant or brother or sister to the
deceased descendant; (Mendoza v. Delos
Santos, G.R. No. 176422, 2013)
2. A posterior transmission, by operation of
law (intestate succession or legitime) from
the deceased descendant (prepositus) in
favor of another ascendant, the reservista,
which two transmissions precede the
reservation; (Mendoza v. Delos Santos,
G.R.No. 176422,2013)
It is this second transfer that creates the
reserva. (Solivio v. Court of Appeals, G.R.
No. 83484, 1990)
3. A third transmission of the same property
(in consequence of the reservation) from
the reservistas to the reservatarios or the
relatives within the third degree from the
deceased descendant belonging to the line
of the first ascendant, brother or sister of
the deceased descendant. (Gonzalez v.
CF/, G.R. No. 34395, 1981)
Parties Involved
1. Origin or Mediate Source - The
ascendant, brother or sister from whom the
prepositus had acquired the property by
gratuitous title; (Balane, supra)
2. Prepositus - The descendanVbrother/
sister who died and from whose death the
reservistas in turn had acquired the
property by operation of law. The so-called
"arbiter of the fate of the reserva troncal."
(Balane, supra)
While the property is owned by the
prepositus, he has all the rights of
ownership over it and may exercise such
rights in order to prevent a reserva from
arising. He can terminate the reserva by:
a. Substituting or alienating or ·disposing •
the property during his lif elime;
b. By bequeathing or devising it either to.
the potential reservista or to other third
person (subject to rights of compulsory
heirs to the legitime ); or
c. By partitioning in such a way as to
assign the property to parties other
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than the potential reservista (subject to
the constraints of the legitime ).
1. R11ervl1ta - The oscendont of the
prepositus of whatever degree. obliged to
reserve the property; (Balane, supra)
2. Reservatarios - The relatives of the
prepositus within the third degree and who
belong to the line from which the property
came and for whose benefit the
reservation is constituted. (Balane, supra)
NOTE: The reference point from which the
third degree requirement should be
reckoned is the prepositus - the one .at the
end of the line from which the property
came and upon whom the property last
resolved by descent. (Mendoza v. delos
Santos, 2013)
NOTE: As long as the reservatario is alive
at the time of the reservista's death, he
qualifies as such, even if he was conceived
and born after the prepositus' death.
(Balane, supra)
Two Events to be Considered to Determine
the Right of the Reservatarios over the
Reservable Property
1. Death of Prepositus - All qualified
reservatarios merely have an inchoate ·
right. The reservistas own the property
subject to the resolutory condition
2. Death of Reservista surviving
reservatarios acquire a perfect right.
(Balane, supra)
Preference Among Reservatarios
Upon the death of the ascendant reservista,
the reservable property should pass, not to all
the reservatarios as a class, but only to those
nearest in degree to the descendant
(prepositus ), excluding those reservatarios of
more remote degree. The reserva troncal
merely determines the group of relatives to
whom the property should be returned; but
within that group the individual right to the
property should be decided by the applicable
rules of ordinary intestate succession, since Art.
891 does not specify. (Padura v. Baldovino.
G.R. No. 11960, 1958)
Representation Among the Reservatarios
There is a right of representation on the part of
reservatarios who are relatives of the
CIVIL LAW
prepositus within the third degree. These
reservatarios have the right to represent their
ascendants. (Florentino v. Florentino, G.R. No.
14856, 1919):
Relatives within the 41h and succeeding
degrees cannot be considered reservatarios.
They cannot claim representation of their
predecessors since the right granted in Art.
891 is a personal right. The only recognized
exemption is the case of nephews and nieces
of the prepositus. who have the right to
represent their fathers or mothers who are
brothers and ~isters of the prepositus.
(Mendoza v. De lbs Santos, G.R. No. 176422,
2013)
There will only be one instance of
representation among reservatarios, i.e., a
case of the prepositus being survived by
brothers/sisters and children of a predeceased
or incapacitated brother/sister. (Balane, supra)
Juridical Nature of Reserva Troncal
Nature of Reservista's Right
1. The reservista's right over the reserved
property is one of ownership;
2. The ownership is subject to a resolutory
condition. (The existence of reservatarios •
at the time of the reservista's death)
3. The· right of ownership is alienable. but
subject to the same resolutory condition.
4. The reservlsta's right of ownership is
registrable. (Edroso v. Sablan. G.R. No.
6878, '1913)
The reservista has no power to appoint, by will,
which reservatarios are to get the reserved
property. (Gonzales v. CF/, G.R. No. L-34395,
1981)
Nature of Reservatarios' Right
1. The reservatarios have a right of
expectancy over the property:
2. The right is subject to a suspensive
condition. (The expectancy ripens into
ownership if the reservatarios survive the
reservista).
3. The right is alienable, but subject to the
same suspensive condition.
4. The right is registrable. (Sienes v.
Esparcia, G.Ri: No. L-12957, 1961)
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Property Reserved 4. Total fortuitous loss of the reserved

Any kind of property may be reserved. The property;
very same property must go through the 5. Confusion or merger of rights, as when the
r: process of the three transmissions, in order for reservatarios acquire the reservista's right
i j
the reserva to arise. (Balane, supra) by contract inter vivos; (Balane, supra)
6. Prescription or adverse possession.
Reserva Maxima/Minima Theories: Applies (Balane, supra)
only if two circumstances concur:
1. Prepositus makes a will instituting the Principle of Non-Impairment of Legltimes
ascendant-reservista to the whole or-a part
of the free portion; (Balane, supra) General Rule: The testator cannot deprive his
2. There is left in the prepositus' estate, upon compulsory heirs of their legitime. (Art. 904)
his death, property reservable. (Balane, Exception: Valid _disinheritance
supra)
General Rule: The testator cannot impose
·> · RES~RVA MAXlrylA : RESERVA-MINIMA . upon the same any burden, encumbrance,
The whole property is Every single property condition, or substitution of any kind
reservable for as long in the Prepositus' whatsoever. (Art. 904)
as it can be estate must be
accommodated in the deemed to pass, Exceptions:
legltime or Intestate partly by will and 1. Parent in the interest of his family to keep
share of the partly by operation of any manufacturing, agricultural or industrial
reservatarios law, so that in enterprise may order the legitime of the
general, only 50% of other children be paid in cash. (Art. 1080) •
the property is 2. Express prohibition of the partition of the
reservable. estate for a period not exceeding 20 years-.
Maximizes the scope Minima finds wider (Art. 1083)
of reserve acceptance in the 3. The family home shall continue despite the
Philippines death of one or both spouses or of the
unmarried head of the famlly for a period of
c Rights of the
Corresponding
Reservatarlos
Obligations
and
of
the
the
ten years or for as long as there Is a minor
beneficiary, and the heirs cannot partition
Reservista (Balane, supra) the same, unless the court finds
1. To Inventory reserved properties: compelling reasons therefor. (Family Code,
2. To Annotate the reservable character (if Art. 159)
registered immovables) in the Registry of 4. Reserva Troncal (Art. 891)
Property within 90 days from acceptance
by the reservista: Renunciation or Compromise of Future
3. To Appraise the movables; Legitime (Art. 905)
... ._, ' 4. To Secure by means of mortgage: Every renunciation or compromise as regards
a. The indemnity for any deterioration of future legitime between the person owing it
or damage to the property occasioned and his compulsory heir is void, and the latter
by the reservista's fault or negligence. may claim the same upon the death of the
and former; but they must bring to collation

.
!
.
b. The payment of the value of such
reserved movables as may have been
alienated by the reservista onerously
whatever they may have received by virtue of
the renunciation or compromise.

and gratuitously. (Dizon v. Galang,
G.R: No. 23144, 1926)
'u '.
Reserva Troncal is Extinguished By
1. The death of the reservista
2. The death of all the reservatarios:
3. Renunciation by all the reservatarios,
provided that no other reservatario is born
subsequently;
NOTE: The rights of the heirs are merely
inchoate because it is only perfected upon the
testator's death. Hence, there is still nothing to
renounce.
No contract may be entered into with respect
to future inheritance except in cases expressly
authorized by law. (Art. 1347, par. 2)
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Completion of Legitlme 4. Collation or addition of the value of all

Any compulsory heir to whom the testator has donations inter vivos to the net value of the
left by any title less than the legitime belonging estate;
to him may demand that the same be fully 5. Determination of the amount of the legitime
satisfied. (Art. 906) from the total thus found;
6. Imputation of all the value of all donations
General Rule: Anything a compulsory heir inter vivos made to compulsory heirs
receives by gratuitous title from the against their legitimes and of the value of
predecessor is considered an advance on the all donations inter vivos made to strangers
leqitirne and is deducted from it. (Art. 909 & Art. against the disposable free portion and
910) restoration to the hereditary estate if the
donation is inofficious. If legitime is
Exceptions: impaired, the following reductions shall be
1. If the predecessor gave the compulsory made:
heir a donation inter vivos and provided a. First, reduce pro-rata non-preferred
that it was not to be charged against the legacies and devises, and the
legitime. (Art. 1062) testamentary dispositions.
2. Testamentary dispositions made by the b. Second, reduce pro rata the preferred
predecessor to the compulsory heir, unless legacies and devises.
the testator provides that it should be c. Third, reduce the donations inter vivos
considered part of the legitime. (Art. 1063) according to the inverse order of their
dates. (Art. 911)
The impaired legitime of a compulsory heir d. Fourth, reduce the legitimes of the
shall be filled up in the following manner: illegitimate children.
(a) It must first be taken from the part of the 7. Distribution of the residue of the estate in
estate not disposed of by will. accordance with the will of the testator.
(b) If it is not sufficient, it must then be taken
from the shares of the testamentary heirs, Donations Inter vtvos to Cornl)ulsory Heirs
legatees, and devisees, proportionally. General Rule: Donations inter vivos to a
(Art. 855) compulsory heir shall be charged to their
legitime (Art. 909)
Testamentary dispositions that impair or Exception: If the predecessor gave the
diminish the legitime of compulsory heirs shall compulsory heir a donation inter vivos and
be reduced on petition of the same insofar as provided that it was not to be charged against
they may be inofficious or excessive. (Art. 907) the legitime. (Art. 1062)

Donations inter vivos to Strangers

Donations made to strangers shall be charged
Heir not entirely Total omission of the to the part of the estate which the testator
for otten heir could disposed of by will. (Art. 909)
Less than the portion Total deprivation of
of the le itime le itime · Stranger - Anyone who does not succeed as
Remedy is to demand Effect is the total a compulsory heir. (Balane, supra)
for completion of annulment of the
le itime institution of heirs Principles on Devises or Legacies of
Usufruct or Life Annuities or Pensions
Steps in Determining the Legitime of 1. If, upon being capitalized according to
Compulsory Heirs actuarial standards, the value of the grant
1. Determination of the gross value of the exceeds the· free portion, it has to be
estate at the time of the death of the reduced, because the legitime cannot be
testator; impaired. (Art. 911)
2. Determination of all debts and charges 2. The testator can impose no usufruct or any
which are chargeable against the estate; other encumbrance on the part that passes
3. Determination of the net value of the estate as legitime. (Art. 911)
by deducting all the debts and charged 3. Subject to the two rules stated above, the
from the gross value of the estate; compulsory heirs may elect between •
Page 130 of 432
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:n
ceding to the devisee/legatee the free
() portion, or the proportional part thereof NOTE: Will containing disinheritance must
corresponding to the said legacy/devise, be probated.
,. -,
. ' and complying with the terms of the
usufruct or life annuity or pension. (Art. 911) Disinheritance only occurs in testamentary
succession. Its counterpart in intestate
()
()
When Devise Subject to
""""~.....""'.....
Consists of Indivisible Real Pro __ 2.
succession is unworthiness.

For a cause gxpressly stated in the will

(Art. 916, 918)
C, 3. Cause must be certain and Irue (Art. 918)
4. Iotal;
~, 5. It must be for a cause expressly stated by
', baw (Art. 916, in relation to Art. 919-921)
6. _!!nconditional;
7. If the truth of the cause is denied, it must
be p_roved by the proponent. (Art. 917)
c In either case, there should be pecuniary
reimbursement to the party who did not get his
physical portion of the thing devised. (Art. 912) Effects of Disinheritance
r 1. Total exclusion of the compulsory heir from
The devisee who is entitled to a legitime may the inheritance, which includes his legitime,
( retain the entire property, provided its value his share in the intestate portion, and any
does not exceed that of the disposable portion testamentary disposition made in a prior

c and of the share

(Art. 912)
pertaining to him as legitime. will. (Balane, supra at p. 4:37-438)

NOTE: Therefore, the heir loses his

If the heirs or devisees do not choose to avail legitime. As to the free portion, it passes
themselves of the right granted in Art. 912, the through Substitution, Accretion, and
thing devised should be disposed of by: Intestacy.
,· 1. Any other heir or devisee, who elects to do
so, may acquire the thing and pay the 2. The children or descendants of the person
parties their respective shares in money; disinherited shall take his or her place and •
2. If no heir or devisee elects to acquire it, it shall preserve the rights of compulsory
shall be sold at public auction and the rret heirs with respect to the legitime. (Art. 923)'
proceeds accordingly divided between the
parties concerned. (Art. 913) NOTE: The disinherited heir can be
represented in the legitime and also to any
0 6. DISINHERITANCE intestate portion that he or she would have
inherited:
G Causes of Vacancy in Succession
a. Only in the descending line, never in
the ascending
~ (a) Disinheritance - The testator creates it
( b. In collateral line, only with respect to
u himself (Art. 916)
nephews and nieces.
{b) Repudiation - The heir rejects the
inheritance (Art. 1041)
3. The disinherited parents shall not have the
(c) Incapacity/Predecease Something
usufruct or administration of the property
happens to the heir
which constitutes the legitime. (Art. 923)
Distnherltance
l A compulsory heir may, in· consequence of
Ineffective Disinheritance ·
Disinheritance without specification of the
disinheritance, be deprived of his legitime. for
L cause, or for a cause the truth of which, if
causes expressly stated by law. (Art. 915)
contradicted, is not proved, or which is not one
of those set forth in this Code, shall annul the
L Requisites for Valid Disinheritance (WET2•
institution of heirs insofar as it may prejudice
LUP)
u 1. Effected only through a valid Will ·(Art.
916)i
the person disinherited; but the devises and
legacies and other testamentary dispositions
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shall be valid to such extent as will not impair GROUNDS FOR DISINHERITANCE
the legitime. (Art. 918)
Grounds for Disinheritance of Legitimate or
NOTE: If the disinheritance lacks on of the Illegitimate Children and Descendants (Art.
requisites, the heir gets his legitime. If the 919)
testator gave away the free portion through 1. When the child or descendant has been
testamentary disposition, these dispositions found guilty of an attempt against the life of
are valid and the compulsory heir improperly the testator, his or her spouse,
disinherited only gets his legitime. If the descendants, or ascendant;
testator did not give way the free portion, the 2. When a child or descendant has accused
compulsory heir will be entitled to his the testator of a crime for which the law
corresponding share of the free portion as well. prescribes imprisonment for six years or
(Balane, supra) more, if the accusation has been found
groundless;
Effects of Ineffective Disinheritance 3. When a child or descendant has been
1. If the testator had made disposition of the convicted of adultery or concubinage with
entire estate, the testamentary disposition the spouse of the testator;
is annulled only insofar as they prejudice 4. When the child or descendant by fraud,
the legitime of the person disinherited. It violence, intimidation, or undue tnfluence
does not affect the dispositions of the causes the testator to make a will or to
testator with respect to the free portion change one already made;
2. If the testator did not dispose of the free 5. A refusal without justifiable cause to
portion, the compulsory heir will be· given support the parent or ascendant who
all that he is entitled to receive as if the disinherits such child or descendant;
disinheritance has not been made, without 6. Maltreatment of the testator by word or
prejudice to lawful dispositions made by deed, by the child or descendant;
the testator in favor of others. 7. When a child or descendant leads a
3. Devisees, legacies and other testamentary dishonorable or disgraceful life;
dispositions shall be valid to such extent as 8. Conviction of a crime which carries with it
will not impair the legitime. (Vitug, Civil the penalty of civil interdiction.
Law Volume Ill, 2006 edition, p. 263)
NOTE: The enumeration is exclusive
·.'.:. INEFF.ECTIVE · . : P~ETERITl9N ·. : ,
'. ··DISIN.H'ERITANCE: 'I • i, • ' •,
. Attempt on the Life of the Testator, His or
Person disinherited The person omitted Her Spouse, Descendants, or Ascendants
may be any must be a compulsory • Final conviction is required.
corn~ulsory heir heir In the direct line • It includes all stages of commission of a
Express Implied crime. (Attempted, frustrated. or
>--·
Intentional Either intentional or consummated)
unintentional • This ground also applies to disinheritance
Partial annulment of Effect: Total annulment of parents, ascendants, and spouse.
~titution of heirs of institution of heirs
Accused the Testator of Crime Punishable
Preterition is total ormssion from the by Imprisonment of Six Years or More
inheritance, without the heir being expressly • It includes filing of a complaint before the
disinherited. The implied basis of the rule on prosecutor, or presenting incriminating
preterition is Inadvertent omission by the evidence against the testator, or even
testator, Thus, if the testator explicitly suppressing .exculpatory evidence.
disinherits the heir, Article 854 on preterition • It is may be made by the heir in a
will not apply. Should the disinheritance be proceeding as a complainant or witness in
ineffective, for absence of one or other of the a criminal case.
requisites for a valid disinheritance, the heir is • The testator must be acquitted.
simply entitled to demand his rightful share. • The accusation must be found to be
(Balane, supra) groundless. The judgment of acquittal must
state either no crime was committed or that
the accused did not commit the crime. An
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acquittal on reasonable doubt will not be a
n •
ground of disinheritance.
This ground also applies to disinheritance
() of parents, ascendants, and spouse.
Conviction of Adultery or Concubinage with
the Spouse of the Testator
• Final conviction is required.
• There must be a valid marriage between
the spouse and the testator.
1.. j • This ground also applies to disinheritance
of parents and ascendants. (Balane, supra)
Refusal to Support the Parent or Ascendant
• The obligation to support must be proven.
• There must be a need and demand for
support.
• The demand must be unjustifiably refused.
• This ground also applies to disinheritance
of parents, ascendants, and spouse.
NOTE: Refusal may be justified, if the obliger
does not have enough resources for all whom
he is obliged to support. The ascendants are
,, .. only third in the hierarchy of preference among
• ... claimants of support. (Family Code, Art. 200,
par. 3)
Maltreatment of the Testator by Word or
Deed
• The verbal or physical assault must be of a
f . serious nature. •
:,_.;
• No conviction is required. It is not even
,,... required that a criminal case be flied.
; )
~-~'
By word - Slander, offensive language, Insult,
libel. May be spoken or written.
By deed - No need for violence. It could be
'·-' something, which caused the testator to be
humiliated.
Dishonorable or Disgraceful Life
• The conduct must be habitual. (Balane,
supra)
Conviction of Crime with Civil Interdiction
• Final conviction is required.
• The accessory penalty of civil interdiction
is imposed with the principal penalties of
death, reclusion perpetua, and reclusion
temporal. (Balane, supra)
I
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CIVIL LAW
Grounds for Disinheritance of Legitimate or
lllegitlmate Parents or Ascendants (Art. 920)
1. When the parents have abandoned their
children or in.duced their daughters to live a
corrupt or Immoral life, or attempted
against their ',!irtue:
2. When the parent or ascendant has been
convicted of an attempt against the life of
the testator, his or her spouse,
descendants, or ascendants;
3. When the parent or ascendant has
accused the testator of a crime for which
the law prescribes imprisonment for six
years or more, if the accusation has been
found to be false;
4. When the parent or ascendant has been
convicted of adultery or concubinage with
the spouse of the testator;
5. When the parent or ascendant by fraud,
violence, intimidation, or undue influence
causes the testator to make a will or to
change one already made;
6. The loss of parental authority for causes
specified in this Code;
7. The refusal to support the children or
descendants without justifiable cause;
8. An attempt by one of the parents against
the life of the other, unless there has been
a reconciliation between them.
•
NOTE: The enumeration is exclusive.
Abandonment of Children
• Includes all conduct constituting a
repeated or total refusal or failure to care
for a child.
• This applies when the parents willfully left
the children to fend for themselves.
• It is not restricted to those instances of
abandonment penalized by law.
Loss of Parental Authority
• It refers to culpable loss of parental
authority and excludes attainment of age of
majority. (Ba/ane, supra)
Attempt by one Parent against the Life of
the Other
• Final conviction is riot required.
O It includes all stages of commission of a
crime. (Attempted, frustrated, or
consummated)
• Even if parents are not married, it is still a
ground. The parents do not need to be
spouses. However, the testator must be a
common child.
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• Reconciliation between the parents manifested by their actions subsequent to the

removes the right of a child or descendant act of disinheritance. (Vitug, supra, p. 264)
to disinherit and rescinds a disinheritance
already made. Reconciliation may be done by:
1. Concrete and express pardon extended to
Grounds for Disinheritance of a Spouse (Art. the offender, who accepts it.
921) A general pardon extended by the testator
1. When the spouse has been convicted of on his deathbed to all who have offended
an attempt against the life of the testator, him will not suffice.
his or her descendants, or ascendants; 2. Unequivocal conduct toward the offending
2. When the spouse has accused the testator heir, by which the intent to forgive must be
of a crime for which the law prescribes clear.
imprisonment of six years or more, and the
accusation has been found to be false;
3. When the spouse by fraud, violence,
intimidation, or undue influence cause the
testator to make a will or to change one
already made;
4. When the spouse has given cause for legal
separation;
5. When the spouse has given grounds for Effects of Setting Aside the Disinheritance
the loss of parental authority; 1. The disinherited heir is restored to his
6. Unjustifiable refusal to support the children legitime.
or the other spouse. 2. If the disinheriting will did not dispose of
the disposable portion, the disinherited heir
NOTE: The enumeration is exclusive. is entitled to his proportionate share, if any.
3. If the disinheriting will or any subsequent
Spouse has Given Cause for Legal will disposed of the disposable portion in
Separation favor of testamentary heirs, legatees or
• A decree of legal separation is not required. devisees, such dispositions remain valid.
• The grounds for legal separation need not
be proven, unless contested by the heir.
• If there is already a decree of legal
separation. the ground is conclusive, but
there is still a need to disinherit by will.

Spouse has Given Cause for Loss of

Parental Authority
• Judicial decree is not required. Giving
grounds therefore is sufficient. (Art. 921)

Revocation of Disinheritance

1. Reconciliation (Art. 922)

2. Subsequent institution of the disinherited
heir.
3. Nullity of the will, which contains the
disinheritance.

Reconciliation
This refers to the resumption of genuine cordial
relationship between the testator and the
disinherited heir, approximating that which
prevailed before the testator learned of the
cause for disinheritance, reciprocally

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SUMMARY OF GROUNDS FOR DISINHERITANCE (ARTS. 919, 920 & 921)
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Accusation of a crime with penalty of ..J ..J ..J
six vears
s' )' Adultery and Concubinage with the ..J v N/A
spouse of testator
Induce testator to make/change the
will.
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Support unjustifiably refused v ,J Unjustifiable refusal to
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support the children or
the other spouse
Maltreatment of the testator by word or ..J N/A N/A
deed
Leading a dishonorable or disgraceful ..J N/A N/A
life
Conviction of a crime which carries ..J N/A N/A
(
with the eenalty of civil interdiction
Abandonment of Children, Inducement N/A ,, N/A
c to live a corrupt or moral life, or
attempted against their virtue
r· N/A
Loss of parental authority
" It is sufficient that the
spouse has given
grounds for loss of
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Attempt by one Parent against the Life f•J/A -J N/A
of the Other
r> Giving Cause for Legal Separation N/A N/A ..J
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7. LEGACIES AND DEVISES
Legacy - Testamentary disposition of personal
property by particular title. (Balane, supra)
Devise - Testamentary disposition of real
property by particular title. (Balane, supra)
· ... :;. : :: ·. _HElR:. 'LEGATEE I DEVISEE.
One who succeeds to Those who succeed to
the whole or a definite, specific, and
fractional part of the individual properties
inheritance
(Balane, supra)
Things and Right which may be
Bequeathed of Devised
All things and rights which are within the
commerce of man may be bequeathed or
devised. (Art. 924)
NOTE: It is not required that the thing devised
or bequeathed belong to the testator. Also, it
must not impair the legitimes.
Persons Who May be Charged With
Legacies And Devises
A testator may charge with legacies and
devises not only his compulsory heirs but also
the legatees and devisees. (Art. 925)
General Rule: Estate is charged with the
legacy or devise.
Exception: Subsidiary legacy or devise
(Paras, Civil Code of the Philippines
Annotated, 2016)
Subsidiary legacy or devise - When the
testator imposes the burden on an heir or a
legatee or devlsee; the heir, legatee, or
devisee charged will be bound to deliver the
legacy or devise to the person specified. As far
as the heir, legatee, or devisee charged is
concerned, it will be a mode. (Balane, supra)
If the will is silent as to who shall pay or deliver
the legacy/devise,
?· If there is an administration proceedinq,
there is a presumption that such legacy or
devise constitutes a charge against the
decedent's estate (Paras, supra, 2016)
2. If there are no administration proceedings,
it is a charge upon the heirs, in the same
proportion in which they may inherit. (Art.
926, par. 2)
•
CIVIL LAW
·. : · . ·.· : · .EXTI;NT OF PASILITY . : · · :
LEGATEE I DEVISEE HEIR
If charged with a legacy If charged with a
or devise, he or she legacy or devise, he
shall be liable only for or she shall not be
the extent of the value liable beyond the
of the legacy or devise amount of the free
received. '{ portion given to him.
(Arts. 925-926; Tolentino, supra)
NOTE: Since legacies and devises are to be
taken from the disposable free portion of the
estate, the provisions on institution of heirs are
generally applicable to them.
When Two or More Heir Take Possession of
the Estate
If two or more heirs take possession of the
estate, they shall be solidarily liable for the loss
or destruction of a thing devised or
bequeathed, even though only one of them
should been negligent. (Art. 927)
Liability for Eviction
General Rule: The estate is liable for eviction.
Exception: In case of a subsidiary legacy or
devise, the heir, legatee or devise charged
shall be liable in case of eviction, if the thing is
indeterminate and is indicated only by its kind.
(Art. 928)
Thing Owned in Part by Testator
General Rule: Conveys only interest or part
owned by testator (Art. 929)
· Exception: If testator otherwise provides
1. He may convey more than what he owns
and the estate should try to acquire the
part or interest owned by other parties. If
other parties are unwilling to alienate, the
estate should give the legatee/devisee the
monetary equivalent. (by analogy with Art.
931)
2. He may convey less than what he owns.
(Art. 794) -
Thing Owned by Another (Arts. 930-931)
1. If the testator order acquisition of the thjng
- The order should be complied with. If the
owner Is unwilling to part with the thing, the
legatee/devisee should be given the
monetary equivalent. (Art. 931)
2. If the testator erroneously believed that the
thing belonged to him - The legacy/devise
is void.
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Exception: If subsequent to the making of will, the estate is obliged to pay the debt,
the disposition, the thing is acquired by the unless the contrary intention appears.
It
testator onerously or gratuitously, the
I
disposition is validated. (Art. 930) The same rule applies when the thing is
'() pledged or mortgaged after the execution of
3. If the testator knew that the thing did not the will. (Art. 934, par. 2)
belong to him but did not order its
acquisition - The disposition should be Any other charge, perpetual or temporary, with
() considered valid. There is an implied order which the thing bequeathed is burdened,
to acquire the property. (Paras, supra) passes with it to the legatee or devisee. (Art.
934, par. 3)
0 Thing Already Owned by the
Legatee/Devisee (Arts. 932-933) Legacy I Devise Subject to a Usufruct
1. If thing already belonged to If the thing bequeathed should be subject to a
legatee/devisee at time of execution of will usufruct, the legatee or devisee shall respect
- The legacy/devise is void. Unless the such right until it is legally extinguished. (Art.
acquirer is the testator himself. 946)
(Balane,supra citing Manresa)
Legacy of Credit or Remission (Art. 935-937)
( 2. If thing was owned by another person at 1. Applies only to the amount still unpaid at
time of making the will and thereafter it is the time of testator's death. (Art. 935);
acquired by legatee/devisee: 2. Revoked if testator subsequently sues the
a. If testator erroneously believed that debtor for collection. (Art. 936);
he owned the thing - The 3. If generic, applies only to those existing at
legacy/devise is void. the time of the execution of the will, unless
,- b. If testator knew that he did not own otherwise provided. (Art. 937 and 793)
the thing:
i. If thing was acquired Legacy I Devise to a Creditor (Art. 938)
onerously by legatee/devisee A legacy or devise made to a creditor shall not
The legatee/devisee is be applied to his credit, unless the testator so
entitled to reimbursement·. expressly declares.
ii. If thing was acquired
( ·, gratuitously by legatee/ If the testator provides that the devise or
devisee - Nothing more is due. legacy will be imputed to the debt, and if the
debt exceeds the legacy or devise, the excess
3. If thing was owned by testator at time will may be demanded as an obligation of the
was made and the legatee/devisee estate.
acquired the thing from the testator -- The
legacy/devise should be deemed revoked Testamentary Instruction to Pay a Debt (Art.
939
Legacy Devise to Remove an
Encumbrance Over a Thing Belonging to
the Testator (Art. 932, par. 2)
If the testator expressly orders that the thing be The disposition The instruction should
'-• freed from such interest or encumbrance, the should be be effective only as to •
legacy or devise shall be valid to that extent. considered as not what is due, unless the
written. contrary intention
NOTE: The legacy/ devise is valid, if the a ears.
encumbrance can be removed for a
consideration.

Legacy I Devise of a Thing Pledged or

(. Mortgaged (Art. 934)
If the testator should bequeath or devise
something pledged or mortgaged to secure a
l.. recoverable debt before the execution of the
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Alternative Legacies or Devises - One which
provides that among several things mentioned,
only one is to be given.
General Rule: The choice Is left to the:
1. Direct legacy or devise - Estate, through
the executor or administrator;
2. Subsidiary legacy or devise - Heir,
legatee, devisee charged (Tolentino,
supra)
Exception: If the testator provides that the
legatee or devlsee himself may choose, or that
a third party may choose. (At1. 942)
If the person who shall make the choice dies
before the choice is made: (Art. 940, par. 2)
1. If the choice belonged to the executor or
administrator - The right is transmissible to
his successor in office;
2. If the choice belongs to an heir, legatee, or
devisee - The right Is transmitted to his
own heirs.
NOTE: The choice is irrevocable. (Art. 940,
par. 3)
Generic Legacies or Devises
0
· RULES ON VALIDITY (Art. 941)
GENERIC LEGACY GENERIC DEVISE
Valid even if no such Valid only if there
movable exists in the exists such an
estate upon the immovable in the
testator's death. The estate at the time of
estate will simply have the testator's death
to acquire what is
oiven bv leoacv.
Right of Choice in Generic Legacies or
Devises (Art. 941-943)
General Rule: The executor or administrator,
acting for the estate.
Exception: When the testator expressly leaves
the right of choice to the heir, or the legatee or
devisee, on whom the obligation to give is
imposed. (Subsidiary legacy or devise).
Limitation on choice
The persons who have the right of choice shall
comply with the legacy by the delivery of a
thing which is neither of inferior. nor of superior
quality. (Art. 941) · If a periodical 'pension, or a certain annual,
CIVIL LAW
0
If the person who shall make the choice cannot
do so:
1. If the choice belonged to the executor or
administrator - The right is transmissible to
his successor in office;
2. If the choice belongs to an heir, legatee, or
devisee - The right is transmitted to his
own heirs.
NOTE: The choice is irrevocable. (Art. 940)
If the person to whom the testator has
expressly given the right to choose does not
exercise his right, it shall be understood that he •
has renounced it and the person obliged to pay
the legacy or devise may deliver any of the
things designated, provided It Is not of the
lowest or of the highest quality. (Tolentino,
supra)
Legacy for Education (Art. 944)
Duration - Age of majority or the completion
of _a professional, vocation, or general course
whichever comes later. In the latter instance,
only if the legatee pursues his studies
diligently.
•
Amount (Art. 944, par. 3)
1. The amount fixed by the testator; or
2. That which is proper, as determined by:
a. The ;•, social standing and
circumstances of the legatee, and
b. The 'value of the disposable
portion of the estate.
I
Legacy for Support (Art. 944)
Duration - During· the lifetime of the legatee,
unless the testator provided otherwise
Amount (Art. 944, par. 3-4)
1. The amount fixed by the testator; or
2. That which the testator. during his lifetime,
used to give the legatee by way of support,
unless markedly disproportionate to the
value of the disposable portion.
3. That which is reasonable, as determined
by:
a. The social standing and
circumstances of the legatee, and
b. the value of the disposable
portion of the estate. ·
Legacy of a Periodical Pension
monthly, or weekly amount is bequeathed, the
legatee may petition the court for the first
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Installment upon the death of the testator, and
for the following ones which shall be due at the
the income which was due and unpaid before
the testator's death. (Art.. 948)
beginning of each period; such payment shall
From the moment of the testator's. death, the
f) not be returned, even though the legatee
should die before the expiration of the period specific and determinate thing bequeathed
which has commenced. (Art. 945) shall be at the risk of the legatee or devisee,
who shall bear its loss or deterioration, and
DEMANDABILITY, OWNERSHIP, ANO shall be benefited by its increase or
. . FRUITS · . improvement, without prejudice to the
PURE AND WITH A SUSPENSIVE responsibility of the executor or administrator.
DETERMINATE TERM OR CONDITION (Art. 948)
OR GENERIC
'."'! Upon the Upon the arrival of the Obligation to Deliver the Thing Bequeathed
\, .. ,
testator's death term or upon the The thing bequeathed shall be delivered with
happening of the all its accessories and accessories and in the
condition, as the case condition in which it may be upon the death of
»: ... maybe the testator. (Art. 951)
• I
i._ ·' (Art. 947; Paras, supra)
The heir, charged ·With a legacy or devise, or
When Ownership Vests the executor or administrator of the estate,
1. Pure and determinate property - Upon must deliver the very thing bequeathed if he is
testator's death · able to do so and cannot discharge this
obligation by paying its value. (Art. 952, par. 1)
2. Pure and generic property -
a. If the property came from the Legacies of Money Paid In Cash
testator's estate - Upon testator's Legacies of money must be paid in cash, even
death though the heir or the estate may not have
b. If the property is acquired from a any.(Arl.952,pa~ 2)
·..__..-' third person - Upon acquisition Necessary Expenses for the Delivery of the
Thing Bequeathed
3. Devises or legacies with a suspensive term The expenses necessary for the delivery of the
- Upon arrival of the term, but the right to it thing bequeathed shall be for the account of ·
vests upon the testator's death the heir or the estate, but without prejudice to ·
the legitime. (Art. 952 par. 3)
4. Devises or legacies with a suspensive
condition - Upon the testator's death, if the Possession of the Thing Bequeathed
condition is fulfilled. (Art. 948; Paras, The legatee or devisee cannot take possession
supra) of the thing bequeathed upon his own
authority, but 'shall request Its delivery and
Fruits possession of the heir charged with the legacy
1. Pure and determinate property - Upon or devise, or of the executor or administrator of
testator's death the estate should he be authorized by the court
2. Pure and generic property - Upon to deliver it. (Ari. 953)
determination, unless the testator provides
otherwise Order of Preference In Case Estate is •
3. Devises or legacies with a suspensive term Insufficient to Cover all Legacies and
- Upon arrival of the term ' Devices (Art. 950)
4. Devises or leqacies with a suspensive If the estate should not be sufficient to cover all
condition - Upon the happening of the the legacies or devises, their payment shall be
condition, unless the testator provides made in the following order:
{) otherwise (Art. 948; Paras, supra) 1. Remuneratory legacies or devises;
2. Legacies or devises declared by the
NOTE: If the legacy or devise is of a specific testator to be preferential;
and determinate thing pertaining to the 3. Legacies for support;
testator, the legatee or devlsee do not acquire 4. Legacies for education;

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5. Legacies or devises of a specific, and accept the legacy or devise, or renounce

determinate thing which forms a part of the the latter and accept the former, or waive or
estate; accept both. (Art. 955 par. 2)
6. All others, pro-rata
NOTE: For acceptance and repudiation of
REDUCTION OF ORDER OF . devices or legacfes, the testator's wishes are
· ·. t:EGACIES AND PREFERENCE OF supreme. All the rules apply in the absence of
, . · ',' DEVISES DEVISES AND · .' stipulation providi~g otherwise. (Balane, supra)
1•••••

' (ART: ~11) · LEGACIES ·

.. ' ·, . , · · (ART. 950) . Repudiation by or Incapacity of Legatee or
Non-preferred In the order of Devisee (Art. 956)
legacies or devises preference, the fast is If the legatee or devisee cannot or is unwilling
are will be reduced to be reduced first and to accept the legacy or devise, or if the legacy
pro-rata and the the first is to be or devise for any reason should become
preferred legacies or reduced last. ineffective, the following steps apply:
devises will be 1. Follow substitution, if any.
reduced last. 2. Then accretion,
Applies when the · Applies when the 3. Lastly, intestacy as it shall be merged to
legitimes have been reduction is due to the mass of the estate
impaired reasons other than
impairment of When Legacy/Devise can be Revoked by
leaitimes Operation of Law
1. If the testator transforms the thing
Rules on Acceptance and Repudiation of bequeathed or devised in such a manner
Devices or Legacies that it does not retain its form and
denomination. (Art. 957) •
General Rule: Acceptance may be total or
partial. (Art. 954) 2. If the testator, by any title or for any cause-
alienates the thing bequeathed or devised
Exception: If the legacy or devise is partly or any part thereof. (Art. 957)
onerous and partly gratuitous, the recipient
cannot accept the gratuitous part and NOTE: The alienation revokes the legacy
renounce the onerous part. Any other or devise even if for any reason the thing
cornblnation Is permitted. (Ari. 954) reverts to the testator (e.g. nullity of the
contract) (Paras, supra)
Acceptance or Repudiation by Heirs of
Legatee or Devlsee (Art. 954, par. 2) Exceptions:
If the legatee or devisee dies before accepting (a) If the reversion is caused by the
or renouncing the devise or legacy, his heirs annulment of the alienation and the
shall exercise such right as to their pro-indiviso cause for annulment was vitiation of
share, applying the rules in Article 954. consent on the grantor's part, either by
reason of incapacity or of duress.
TWO LEGACIES I DEVISES TO THE SAME . (Fernandez v. Dimagiba, G.R. No. L-
. · . 'RECIPIENT (A~T. 955) 23638, '1967)
BOTH ARE ONE IS GRATUITOUS (b) If the reversion Is by virtue of
GRATUITOUS THE OTHER IS redemption in a sale with pacto de
OR ONEROUS ONEROUS retro. (';
The recipient may The recipient cannot
accept or accept the gratuitous and 3. If the thing bequeathed or devised is totally
renounce either or renounce the onerous. lost during the lifetime of the testator, or
boH1. Any other combination is after his death without the heir's fault. (Art.
permitted. 957)

Legacy or Devise to a Compulsory Heir 4. If the legacy is a credit against a third

Any compulsory heir who is at the same time a person or the remission of a debt, and the
legatee or devisee may waive the inheritance testator, subsequent to the making of the
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will brings an action against such debtor C. LEGAL OR INTESTATE

for payment. (Art. 936)
SUCCESSION
() Mistake in the Name of the Thing
Bequeathed or Devised 1. GENERAL PROVISIONS;
A mistake as to the name of the thing RELATIONSHIP AND RIGHT OF
bequeathed or devised, is of no consequence,
REPRESENTATION
r,···) if it is possible to identify the thing which the
\. .. testator intended to bequeath or devise. (Art.
958) Legal or Intestate Succession - Takes place
by operation of law in the absence of a valid
Disposition Made in General Terms In Favor will. (Paras, supra)
of Relatives
A disposition made in general terms in favor of Instances when Legal or Intestate
the testator's relatives shall be understood to Succession Operates (Art. 960)
be in favor of those nearest in degree. (Art. 1. If a person dies without a wlll, or with a
959) void will, or one which has subsequently
lost its validity;
Relatives - Refers to relatives up to the fifth 2. When the will does not institute an heir to,
degree, the limit in intestacy (Bafane, supra) or dispose of all the property belonging to
the testator. In such case, legal succession
NOTE: Representation does not operate in the shall take place only with respect to the
application of this article. (Belen v. Bank of the property of which the testator has not
Philippine Islands, G.R. No. L-14474, 1960) disposed;
3. If the suspensive condition attached to the
institution of heir does not happen or is not
..i"'···, ----end oftopic----
fulfilled, or if the heir dies before the
testator, or repudiates the inheritance,
there being no substitution, and no right of
accretion takes place;
r ,,
:; ! 4. When the heir instituted is incapable of
·..:........ ·
succeeding, except in cases provided in
the Civil Code.i
r-
Other Causes of ihtestacy (Tolentino, supra)
{) 1. Happening of a resolutory condition;
1resolutory
2. Expiration of a term;
3. Preterition (Balane, supra)

/:
-~.: NOTE: Intestacy operates on the same
principles as succession to the legitime. They
are both governed by the rules on exclusion
and concurrence.

~--· Four Basic Rules of Intestacy •

1. Rule of Relationship - the heirs must be
:1~. .... I
related to the decedent.

Four Kinds of Relationships

(a) Ascendants and Descendants;
/; I (b) Collaterals;
~--;·
(c) Marriage;
(o) State of sovereign

2. Rule of Preference of Lines - the

descending line excludes the ascending .

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and the collateral, and the ascending
excludes the collateral. (Art. 965)
Three lines of relationship
(a) Descending line
(b) Ascending line
(c) Collateral line
3. Rule of Proximity of Degree • the nearer
exclude the more remote, without prejudice
to representation. (Art. 962, par. 1)
4. Rule of Equality Among Relatives of the
Same Degree • the nearer exclude the
more remote, those of equal degree should
inherit in equal shares. (Art. 962, par. 2)
Exceptions to the Rule of Equality In the
Same Degree
a. The rule of preference of lines
NOTE: The direct line is preferred
over the collateral, even if they are of
the same degree
b. The distinction between legitimate
and illegitimate filiation:
c. The rule of division by line in the
ascending line;
d. The distinction between full-blo,;id
and half-blood relationship among
brothers and sisters, as well as
nephews and nieces;
e. Representation; and
f. Concurrence of nephews and nieces
and uncles and aunts (Paras, supre)
RELATIONSHIP
Proximity of relationship is determined by the
number of generations. (Art. 963)
Degree - One generation
Computation of Degrees
1. Direct line - No legal limit to the number of
degrees for entitlement to intestate
succession.
2. Collateral line - Intestate succession
extends only to the fifth degree of collateral
relationship (Art. 1010)
Line - Series of degrees, which may be direct
or collateral
(a) Direct line - Constituted by the series of
degrees among ascendants and
descendants
CIVIL LAW
i. Descending line - Unites the head of
the family with those who descend
from him
ii. Ascending line - Binds a person with
those from whom he descends
(b) Collateral llne - Constituted by the series
of degrees among persons who are not
ascendants and descendants, but who
come from a common ancestor
Full Blood Relationship
Full blood relationship is that existing between
persons who have the same father and the
same mother. (Art. 967, par. 1)
Half Blood Relationship
Half-blood relationship is that existing between
persons who have the same father, but not the
same mother, or the same mother, but not the
same father. (Art. 967, par. 2)
Importance of 'Distinction Between Full
.Blood and Half Blood Relationship (Arts.
1006, 1008) l\
Ratio of 2: 1 for, full-blood and half-blood
relationship in Articles 1006 and 1008, for •
brothers and sisters and nephews and nieces.
ACCRETIO.N IN INTESTACY
· If there are several relatives of the same
degree, and one or some of them are unwilling
or incapacitated to succeed, his portion shall
accrue to the others of the same degree, save
the right of representation when it should take
place. (Art. 968) ·
Accretion applies among heirs of the same
degrees in the following instances: (Arts. 1015, ·
1016)
1. Predecease;
2. Incapacity;
3. Renunciation
NOTE: In case of predecease or incapacity,
representation, if proper will prevent accretion
from occurring. (Balane, supra)
Relatives must be in the same kind of
relationship for accretion to take place. This is
because of the principle of preference of lines
in intestate succession. (Balane, supra)
RENUNCIATION IN INTESTACY
If the inheritance should be repudiated by the
nearest relative, should there be one only, or
by all the nearest relatives called by law to
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succeed, should there be several, those of the succession in the direct ascending line. (Paras,
C) following degree shall inherit in their own right supra)
and cannot represent the person or persons
repudiating the inheritance. (Art. 969) Instances "'.hen Representation Operates
(PIO)
Effect of Renunciation by All In the Same 1. f.redecease;
Degree 2. !ncapacity or unworthiness:
The right of succession should first be passed 3. Qisinheritanci;! (Paras, supra)
on the heirs in succeeding degrees, before the
next line can succeed . NOTE: Representation does not apply in
.r·. , 1. The descending line inherits first. renunciation. (Ari.: 977)
)
~ ,, l

NOTE: lf ALL the descendants of a certain

degree renounce, succession passes to Kinds of Succession Where Representation
the descendants of the next degree, and Operates
.·~
:;_) so on. 1. Legitime or compulsory succession;
a. In the direct descending line only;
2. The ascending line inherits next. 2. Intestate succession
NOTE: Should no one be left In the a. In the direct descending llne;
descending line, the heirs in the ascending b. Ir, one instance in the collateral line:
line acquire the right of succession, in nephews and nieces representing
order of degrees of proximity. brothers and sisters of the deceased
,. '
(Art. 975)
1
'· .' 3. The collateral line inherits last.
NOTE: Only if all the descendants and In the collateral line, the right of representation.
ascendants renounce will the collateral extends no further than the nephews and
r: relatives acquire the right to succeed. nieces. Grandnephews and grandnieces are
·i._ . .-
not entitled to inherit by right of representation
( '
The effect of renunciation by all in the same in the collateral line. (In re: Intestate Estates of
degree applies in cases of predecease or Delgado & Rustie v. 'Heirs of Vda. De Damian,
incapacity by all in the same degree, except in G.R. No. 155733, 2006)
cases where representation is proper.
NOTE: Representation does not apply in
RIGHT OF REPRESENTATION testamentary succession and in the direct
Representation - a right created by fiction of ascending line. (Paras, supra)
law, by virtue of which the representative is
raised to the place and the degree of the Right of Representation of Illegitimate
,,., .. , person represented, and acquires the rights Children (Art. 902)
:;: i
'< J' which the latter would have if he were living or The rights of illegitimate children set forth in
if he could have inherited. (Art. 970; Tumbokon the articles on legitimes and intestate
( ';
-~~ v, Legaspi, G.R. No. 153736, 2010) succession are transmitted upon their death to
their descendants, whether legitimate or
In order that representation may take place, it illegitimate.
is necessary that the representative himself be
capable of succeeding the decedent. (Art. 973) RIGHT OF. REPRESENTATION (ART. 992)
DECEDENT IS A
Representation only applies in compulsory LEGITIMATE
DECEDENT IS AN •
ILLEGITIMATE CHILD
succession in the direct descending line and in CHILD
intestate succession in the direct descendir'lg The right of . The right of •
r.> '. llne (Art. 972) and In one instance in. the
"··· representation Is' ' representation is
collateral line in the case of nephews and given only to, granted to both
nieces representing brothers and sisters of the legitimate legitimate and
deceased (Art. 975) descendants. '., Illegitimate descendants.

NOTE: There is no representation in Representation of and by an Adopted Child

testamentary succession and in any type of An adopted child can neither represent nor be
represented. (Balane, supra at p. 484)
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An adopted child cannot represent his/her

adopter in the estate of his/her adopter's 2. ORDE~ OF INTESTATE
grandparents because the relationship
between the adopter and the adopted does not
SUCCESSION
go beyond their relatives of either party.
(Teotico v. Del Val, G.R. No. L-18753, 1965) Intestate Heirs (Paras, supra)
1. Legitimate Children or Descendants (Art.
Nonetheless, an adopted child succeeds to the 979)
property of the adopting parents in the same 2. Illegitimate Children or Descendants (Art.
manner as a legitimate child. (Art. 979, par. 2) 988, 990, 992)
3. Legitimate Parents or Ascendants (Art. 986)
Representation by a Renouncer 4. Parents of Illegitimate Children (Art. 993)
A renouncer cannot be represented; however, 5. Surviving Spouse (Art. 994)
he can represent the person whose inheritance 6. Brothers, Sisters, Nephews, Nieces (Arts.
he has renounced. (Art. 976) 1004-1008)
7. Other Collateral up to the fifth degree (Art.
Operation of Representation 1009)
Per stirpes The representative or 8. State (Art. 1011)
representatives receive only what the person
represented would have received. If there are Rules of Exclusion and Concurrence
more than one representative in the same 1. l.egltlmate Children or Descendants (Arts.
d~gtee, then. the portion is divided equally, 978-982)
without prejudice to the distinction between a. Exclude parents, collaterals, and the
legitimate and illegitimate children, when State
applicable. (Balane, supra) b. Concur with surviving spouse, and
illegitimate children or descendants
Rules to Qualify as a Representative c. Excluded by no one •
1. The representative must be qualified to
succeed the decedent. (Art. 973) 2. lllegitim_ateChildren or Descendants (Arts.•
98.'3, 988-994) .
2. The representative need not be qualified to
succeed the person represented. (Art. 971) a. Exclude parents of illegitimate
3. The person represented need not be children, collaterals, and the State;
qualified to succeed the decedent. b. Concur with surviving spouse,
legitimate children, and legitimate
NOTE: The representative does not succeed parents:
the person represented but the one whom the c. Excluded by no one
person represented would have succeeded.
(Art. 971) 3. Legitimate par~nts (Arts. 985-986)
a. Exclude collaterals and the State;
, .· REPRESENTATION . . b. Concur ~ith illegitimate children and
the surviving spouse;
BY BY NEPHEWS AND
c. Are excluded by legitimate children
GRANDCHILDREN NIECES
If all children are If they survive with their
4. Parents of illegitimate children (Arts. 993-
disqualified, the uncles and aunts, they
994)
grandchildren shall inherit from the
a. Exclude collaterals and the State;
inherit by deceased by
b. Concur with the surviving spouse;
representation. representation.
c. Excluded by legitimate children and
(Art. 982)
illegitimate children
If all their uncles and
aunts are disqualified
5. Surviving spouse (Arts. 995-1002)
from inheriting
a. Excludes collaterals other than
(predeceased,
brothers, sisters, nephews, nieces,
incapacitated or
and the State;
unworthy, disinherited),
b. Concur with legitimate children,
they inherit in equal
illegitimate children, legitimate
portions. (Art. 975)
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parents, parents of illegitimate

children, brothers, sister, nephews The right of representation is not available to
and nieces; illegitimate descendants of legitif'!'late children
in the inheritance of a legitimate grandparent.
C) c. Excluded by no one
(Diaz v. Intermediate Appellate Court, G.R. No.
6. Brothers and sisters, nephews and nieces L-66574, 1990)
(Arts. 1003-1008)
a. Exclude all other collaterals and the · PERSQN TO BE REPRESENTED ·
() State; ILLEGITIMATE LEGITIMATE CHILD
b. Concur with the surviving spouse; CHILD
c. Excluded by legitimate children, His or her Only his or her
illegitimate children, legitimate descendant whether legitimate descendants
(')
· ....
parents, and parents of illegitimate legitimate or can represent him, his
children illegitimate, may or her illegitimate
represent him. descendants cannot
7. Other collaterals up to the fifth degree (Arts. represent him. (Vda. De
1009-1010) Crisologo v. Cam G.R.
a. Exclude collaterals in more remote No. L-44051, 19851
degree and the State;
b. Concur with collaterals in the same Partial Intestacy (Balane, supra)
degree; Where a decedent left a will disposing of a part,
.(.~· ' '
c. Excluded by legitimate children, but not all, of the disposable portion, the
~-
illegitimate children, legitimate following steps may solve the problem:
1,'"·,
parents, parents of illegitimate 1. Trace where the free portion went in total=
\ ...,,· children, surviving spouse, brothers intestacy. :.·
and sisters, nephews and nieces; 2. The testamentary provision should be
carried out first, then what is left of the free
8. State (Arts. 1011-1014) portion should then be given to the
a. Excludes no one; intended beneficiary in intestacy. (Balane,
(""'"-•
b. Concurs with no one; supra)
.; t c. Excluded by everyone
·~- ·" I

------ end of topic --- .i

Iron Curtain Rule I Barrier Principle I
;,. ,I
Principle of Absolute Separation
An illegitimate child has no right to inherit ab
intestato from the legitimate children and
relatives of his father or mother; nor shall such
children or relatives inherit in the same manner
r :, from the illegitimate child. (Art. 992)
\ ...,./

. .
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COMBINATIONS OF LEGITIMES AND INTESTATE $U.CCESSION

(Arts. 888-889, 892-901, 903, 983, 986-987, 991, 993-1001, 1004-1008, 1011)

·. HEIRS LEGITIME INTl:STACY .1 TOTAL

Legitimate Children 1/2 divided equally 1/2 divided Whole estate divided
Alone 8QUSIIY eauallv
Legitimate Children LC - 1/2 divided equally Residue left Whole estate divided
and illegitimate divide among amohg them, dbserving the
Children ILC - 1/2 of share of 1 them, observing , 2:1 ratio
LC the 2:1 ratio
Legitimate Children LC - 1/2 divided equally Residue left shall Whole estate divided
and Surviving Spouse be divided among ,.., equally
Spouse - Share of 1 LC them equally I

One Legitimate Child LC-1/2 ' 1 /4 goes to the .,, LC - 1/2

and Surviving Spouse spouse ,.
Spouse-1/4 ' Spouse-1/2
1'

Legitimate Chlldren, LC - 1/2 Residue left shall Whole estate divided

Surviving Spouse, Spouse - share of 1 LC be divided among among them, observing the
Illegitimate Children ILC - 1/2 of share of 1 them, observing 2:1 ratio
LC the 2:1 ratio
Legitimate Parents LP-1/2 1/2 goes to the Whole estate divided
Alone earents equally
Legitimate 1/2 1/2 Whole estate divided
Ascendants Other arnonq them, observe rules
than Parents in proximity in degree, and •
division by line
Legitimate
and
Parents
Illegitimate
LP-1/2 . . 1/4 goes to the
illegitimate
LP - 1/2

Children ILC-1/4 children ILC-1/4

Legitimate Parents LP-1/2 1 /4 goes to the LP-1/2

and Surviving Spouse spouse
Spouse -1/4 Spouse-1/2
Legitimate Parents, LP-1/2 1 /8 goes to the LP - 1/2
Surviving Spouse, and spouse
ILC-1/4 !LC -1/4
Illegitimate Children
Spouse -1/8 Spouse-1/4
Illegitimate Children ILC - 1/2 1/2 goes to Whole estate divided
Alone illegitimate equally
children
Illegitimate Children IL.C - 1/3 1/6 goes to ILC - 1/2
and Surviving Spouse illegitimate
children
Spouse - 1/3 1/6 goes to Spouse-1/2
spouse

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(continuation)

HEIRS LEGITIME INTESTACY TOTAL

Surviving Spouse 1/2 Residue goes to the Whole estate goes to the spouse
Alone spouse
1 /3 if marriage is
in articulo mortis
() Surviving Spouse Spouse-1/4 1/ 4 goes to the Spouse 1/2
,. and Parents of spouse
Illegitimate Parents of 1/4 goes to the Parents of Illegitimate Children - Y.

,,. '
-.... '
Children

Surviving Spouse
Illegitimate
Children -1/4
Spouse-1/2
parents of illegitimate
children
1/2 goes to the Spouse -1/2
and Legitimate legitimate brothers
Brothers and and sisters, nephews Legitimate brothers and sisters,
Sisters, Nephews and nieces nephews and nieces - 1 /2
( l and Nieces
Surviving Spouse Spouse- 1/2 1/2 goes to the Spouse - 1/2
and Illegitimate illegitimate brothers
''-. .
Brothers and and sisters, nephews
r>. Sisters, Nephews and nieces Legitimate brothers and sisters,
·- and Nieces nephews and nieces - 1/2
Parents of 1/2 1/2 goes to the Whole estate divided equally
Illegitimate parents of illegitimate
Children Alone children
-~ ... ; Parents of Any kind of 1 /2 goes to the any Whole estate goes to the children,
':' .. \
Illegitimate children - 1/2, kind of children, observing 2:1 ratio, if applicable
Children and observe 2:1 observe 2:1 ratio
Children of Any ratio Parents of illegitimate children are
Kind . excluded by all kinds of children
--
;:: •
I ,:._.I

,....
s: i
~·. .s

•
.! ;
t_)

,r -.
I •
·~..;

'
\ ......),..

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(continuation)

HEIRS LEGITIME INTESTACY . TOTAL

Legitimate Brothers NIA Whole estate divided among them, observing the 2:1 ratio for
and Sisters Alone full-blood and halt-blood siblings
Legitimate Brothers NIA Whole estate divided among them, observing the 2:1 ratio for
and Sisters, Nephews full-blood and half-blood siblings
and Nieces
Apply rules on representation when proper
Nephews and Nieces N/A Whole estate divided among nephews and nieces, observing
with Uncles and Aunts the 2:1 ratio for full··blood and half-blood siblings

Uncles and aunts of the decedent are excluded. (Bacayo v.

' Borromeo)
Illegitimate Brothers N/A Whole estate divided among them, observing the 2:1 ratio for
and Sisters Alone full-blood and half-blood slblincs
Illegitimate Brothers NIA Whole estate divided among them, observing the 2:1 ratio for
and Sisters, Nephews full-blood and half-blood siblings
and Nieces
Neph.ews and Nieces N/A Whole estate divided among them, observing the 2:1 ratio for
Alone full-blood and half-blood slblinqs
Other Collaterals up to N/A Whole estate divided equally, observe rules in proximity in
the Fifth Degree degree
State N/A (Resident Decedent) (Non-Resident Decedent)
Personal property- Municipality Personal property and.
of the last residence real property -Municipality •
.
Real property - Municipality
where it is situated
•
.,
where it is situated

Property is to be used for the benefit of public education and

charitable institutions in the respective municipalities or cities,
or alternatively, at the instance of ati Interested party, or motu
proptio, court may order creation ot'a permanent trust for the
benefit of the institution's concerned.

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(:
D. PROVISIONS COMMON TO Accretion A,:nong Devlsees, Legatees and
! (") TESTATE AND INTESTATE Usufructuarles
Accretion shell also take place among
I (' .. \I
I ~
SUCCESSION devfsees, legatees and usufructuartes under
the same condltlons established for heirs. (Art.
1. RIGHT OF ACCRETION 1023) .

Accretion - A right by virtue of which, when Accretion in Intestacy

c.·~)
~ ... two or more persons are called to the same In legal succession the share of the person
inheritance, devise or legacy, the part assigned who repudiates the inheritance shall always
to the one who renounces or cannot receive accrue to his co-heirs. (Art. 1018)
his share, or who died before the testator is
added or incorporated to that of his co-heirs Occasions for tljt.e Operation of Accretion in
co-devisees, or co-legatees. (Art. 1015) ' Intestacy (Balane, supra)
. ,........ , 1. Repudiation or renunciation; (Art. 1018)
,'\. .. r'
Elements of Accretion in Testamentary 2. Predecease,· only if representation does
Succession (Art. 1016) not take place';
1. That two or more persons be called to the 3. Incapacity cir unworthiness, only if
same inheritance, or to the same portion, representation does not take place
pro indiviso; and
2. That one of the persons thus called die NOTE: In intestacy, accretion is subordinate to
.f ... ,
.. ' before the testator, or renounce the representation. (Balane, supra)
inheritance, or be incapacitated to receive
,'f"'\
it. Co-heirs in the Same Category
·..:. . . ~.·
The co-heirs in whose favor accretion occurs·
Meaning of Pro lndiviso (Balane, supra) must be co-heirs in the same category as the·
• Undivided or in common excluded heir, (Balane, supra)
/ ..-"". • Either the co-heirs are instituted without
individual designation of shares; or Accretion Must be Proportional
The heirs to whom the portion goes by the right
• The co-heirs are instituted with. the
specification that they share equally. of accretion take it in the same proportion that ·
they inherit. (Art. 1019)
• The co-heirs are instituted with unequal
fractional shares.
General Rule: The heirs to whom the
inheritance accrues shall succeed to all the
Instances when Accretion operates in
rights and obligations which the heir who
Testamentary Succession (Balane, supra)
renounced or could not receive it would have
1. Renunciation;
had. (Art. 1020)
2. Predecease;
Exceptions: (Balane, supra)
3. Incapacity
1. In testamentary succession, if the testator
provides otherwise;
NOTE: Provided, only some, not all of the
·:'•<':.,'i· 2. If the obligation is purely personal, and
instituted heirs renounce, predecease, or are
hence, intransmissible
s- ~
incapacitated to succeed. (Balane, supra)
~:~.... ; •
Accretion among Compulsory Heirs
, . Accretion Subordinate to Substitution in
Among the compulsory heirs the right of
.''. ' Testamentary Succession ,
accretion shall take place only when the freE!
In testamentary succession, when the right of
portion is left to two or more of them, or to any
accretion does not take place, the vacant
one of them and to a stranger. (Art. 1021)
portion of the instituted heirs, if no substitute
has been designated, shall pass to the legal
No Accretion In the Legltrme
heirs of the testator, who shall receive it with
If the part repudiated be the legitime, the other
the same charges and obligations (Art. 1022)
co-heirs shall succeed to it in their own right,
and not by the right of accretion. (Art. 1021)
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2. CAPACITY TO SUCCEED BY compliance with the condition shall be

WILL OR av INTESTACY considered. (Art. 1034)

NOTE: ,'. ..
Persons not incapacitated by law may succeed
by will or ab intesteto.
• The capacit¥, to succeed is governed by
the law of th~ nation of the decedent. (Art.
•/039) . :!.
The provisions relating to incapacity by will are
equally applicable to intestate succession. (Art.
• Persons not\ incapacitated by law may
succeed by will or ab intestato. (Art. 1024)
1024)
• A testamentary provision in favor of a
disqualified person, even though made
NOTE: Both a natural person and a juridical
under the guise of an onerous contract, or
person may inherit. (Art. 1026)
made through an intermediary, shall be
void. (Arl. 755)
Requisites for Natural Persons
In order to be capacitated to inherit, the heir,
. IF INSTITUTION IS
devisee or legatee must be living at the .. · SUBJECT TO A IF INSTlTUTION IS
moment the succession opens, except in case ·SUSPENSIVE SUBJECT TO A
of representation, when it is proper. (Arl. 1025, . . CONDITION · . SUS~ENSIVE TERM
par 1)
The successor must The requirement of
A child already conceived at the time of the be living or legally being alive or legal
death of the decedent is capable of succeeding existing both when existence applies only
provided it be born later under the conditions the decedent dies and at the moment of the
prescribed in Article 41 of the Civil Code'. (Art. when the condition decedent's death.
1025, par 2) happens. (Balane, (Balane, supra)
su ra •
Requisites for Juridical Persons
A testamentary disposition may be made to the Incapacity. to Succeed In Testamentary
State, provinces, municipal corporations, Succession (Art. 1027) ·
private corporations, organizations, or
associations for religious, scientific, cultural, The following are incapable of succeeding:
educational, or charitable purposes. 1. The priest who heard the confession of the
testator during Ills last Illness, or the
All other corporations or entitles mey succeed minister of the go9pel who extended
under a will, unless there is a provision to the splritual aid to hlm during the same period;
contrary in their charter or the laws of their
creation, and always subject !<.) the same. (Art. Requisites:
1026) a. The will must have been executed·
during the testator's last illness;
Time to Determine Capacity to Succeed b. The spiritual ministration must have
General Rule: In order to judge the capacity of been extended during the last illness;
the heir, legatee, or devisee, his qualification at c. The will must have been executed
the time of the death of the decedent shall be during or after the spiritual ministration.
the criterion. (Arl. 1034)
2. The relatives '.Qf such priest or minister of
Exceptions: the gospel within the fourth degree, the
1. Those disqualified under Article 1032 church, order, chapter, community,
(2,3,5) wherein it is necessary to wait until organization, ()J mstltutlon to which such
final judgment is rendered; priest or minister may belong;
2. Those disqualified under Article 1032 (4)
wherein it is necessary to wait for the 3. A guardian with respect to testamentary
expiration for the month allowed for report; dispositions given by a ward in his favor
3. If the institution of the heirs, legacy or before the final accounts of the
devise is conditional, the time of guardianship have been approved, even if
the testator should die after the approval
thereof; nevertheless, any provision made
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by the ward In favor of the guardian when
the latter is his ascendant, descendant,
brother, sister, or spouse, shall be valid;
4. Any attesting witness to the execution of a
will, the spouse, parents, or children, or
any one claiming under such witness,
spouse, parents, or children;
()
5. Any physician, surgeon, nurse, health
officer or druggist who took care of the
testator during his last illness:
;' ,. -,
\ )
6. Those who are disqualified frorn receiving
donations under Article 739. (Art. 1028)
Under Article 739, the following are
•····.
.. disqualified from receiving testamentary
( }
dispositions from the parties specified:
1. Those made between persons who are
guilty of adultery, or concubinage at
. ... ,
the time of the donation;
.'( 2. Those made between persons found
guilty of the same criminal offense, in
consideration thereof;
3. Those made to a public officer or his
,:- .. wife, descendants and ascendants, by
reason of his office;
.»»
NOTE: Individuals, associations and
corpotations not permitted by law to i_nherit
under any kind of succession. (Art. 1027)
Disposition For Prayers and Pious Works
for the Benefit of His Soul
Should the testator dispose of the whole or
part of his property for prayers and pious works
for the benefit of his soul, in general terms and
without specifying its application, the executor,
with the court's approval shall deliver one-half
thereof or its proceeds to the church or
denomination to which the testator may belong,
to be used for such prayers and pious works,
and the other half to the State, for the
purposes mentioned in Article 1013. (Art. 1029)
Requisites: (Balane, supra)
1. Disposition for prayers and pious works for
the benefit of the testator's soul;
2. No specification. of the application of the ·
disposition.
Apportionment of the disposition or its
r:r:»., proceeds: (Balane, supra)
~-.... ~ 1. 1/2 to the church or denomination to which
the testator belonged
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CIVIL LAW
2. 1/2 to the State, to be applied as provided
in Article 1013.
Dispositions in Favor of the Poor in General
(Art. 1030)
Testamentary provisions in favor of the poor in
general, without designation of particular
persons or of any community, shall be deemed
limited to the poor living in the domicile of the
testator at the time of his death, unless it
should clearly appear that his intention was
otherwise.
The designation of the persons who are to be
considered as poor and the distribution of the
property shall be made by the person
appointed by the testator for the purpose; in
default of such person, by the executor, and
should there be no executor, by the justice of
the peace, the mayor, and the municipal
treasurer, who shall decide by a majority of
votes all questions that may arise. In all these
cases, the approval of the Court of First
Instance shall be necessary.
The preceding paragraph shall apply when the
testator has disposed of his property in favor of
the poor of a definite locality .
..-;
Disqualification of a Witness to Succeed to
a Legacy or Devise (Art. 823)
If a person attests to the execution of a will, to
whom or to whose spouse, or parent, or child,
a devise or legacy is given by such will, such
devise or legacy shall, so far only as concerns
such person, or spouse, or parent, or child of
such person, or any one claiming under such
person or spouse, or parent, or child, be void,
unless there are three other competent
witnesses to such will. However, the person
attesting shall be admitted as a witness if such
devise or legacy had not been made or given.
Testamentary Provision in Favor of a •
Disqualified Person is Void' (Art. 1031)
A testamentary provision in favor of a
disqualified 'person, even though made under
the guise of an onerous contract, or made
through an intermediary, shall be void.
Unworthiness (Art. 1032)
The following are incapable of succeeding
under all kinds of succession by reason of
unworthiness:
1. Parents who have abandoned their
children or induced their daughters to lead ·
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a corrupt or Immoral life, or attempted Such act submits the situation to th.e rules on
against their virtue; disinheritance; thus, reconciliation renders the
2. Any ~er9011 who hH boen eonvleted of an dl!lnherltsriee lneffeetlv1t (Belsne, !uprn)
attempt ~gainst the life of the testator, his
or her spouse, descendants, or
ascendants;
3. Any person who has accused the testator Made by the Effected when
of a crime for which the law prescribes execution of a testator makes a will
imprisonment for six years or more, if the document or any instituting the
accusation has been found groundless; writing in which the unworthy heir with
4. Any heir of full age who, having knowledge descendent condones knowledge of the
of the violent death of the testator, should the cause of cause of incapacity
fail to report It to an officer of the law within inca acit
a month, Unless the authorities have Cannot be revoked Revoked when the
already taken action; this prohibition shall testator revokes the
not apply to cases wherein, according to will or the institution
law, there is no obligation to make an
accusation: Representation )n Unworthiness (Balane,
5. Any person convicted of adultery or supra) .:i
concubinage with the spouse of the · If the person excluded from the inheritance by
testator; reason of the incapacity should be the child or
6. Any person who by fraud, violence, descendant of the' decedent, and should have
intimidation, or undue influence should children or descendant, the latter shall acquire
cause the testator to make a will or to his right to the legitime.
change one already made;
7. Any person who by the same means The person excfuded shall not enjoy the
•
prevents another from making a will, or usufruct and the administration of the property
from revoking one already made, or who thus inherited by his children. (Art. 1035)
supplants, conceals, or alters the latter's
will; NOTE: The extent of representation may be as
8. Any person who falsifies or forges a to the legitirne and as to the share of the
supposed will of the decedent. unworthy heir in the intestate portion. (Balane,
supra)
Revocation of Unworthiness
The cause of unworthiness shall be without If the unworthy heir is a brother Or sister, his
effect if the testator had knowledge thereof at children (nephews and nieces of the decedent)
the time he made the will, or if, having known will represent. (Balane, supra)
of them subsequently, he should condone
them in writing. (Ari. 1033) Alienations Made by' an Excluded Heir
Alienations of hereditary property, and acts of
The unworthiness is set aside in the following administration performed by the excluded heir,
ways: (Balane, supra) before the judicial order of exclusion, are valid
1. A written condonation, or as to third persons who acted in good faith.
2. The execution by the offended party of a (Ari. 1036)
will with knowledge of the cause of
unworthiness. NOTE: The validity of the alienation is
determined by the good faith or bad faith of the
By Operation of Law - In order to restore the transferee, not of the transferor. (Balane, supre}
disinherited heir to capacity, subsequent
reconciliation is enough under the rules of The co-heirs of the excluded heir have the right
disinheritance while under those on to recover damages from the disqualified heir.
unworthiness; either a written pardon or a (Art. 1036) .
subsequent will . is required. These rules on
disinheritance and unworthiness would overlap ..
the moment the testator uses one of the acts of
unworthiness as a cause to disinherit an heir.
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Right of an Excluded Heir for Indemnity for
Expenses
The unworthy heir who is excluded from the
succession has the right to demand indemnity
for any expenses incurred in the preservation
of the hereditary property, and to enforce such
() credits as he may have against the estate. (Art.
1037)
,.·-.
Obligations of the Disqualified Heir in
i'v, f Possession of the Hereditary Property
Any person incapable of succession, who,
disregarding the prohibition stated In the
preceding articles, entered into the possession
of the hereditary property, shall be obliged to
return it together it its accessions. (Art. 1038)
.;· .
Prescriptive Period
r: The action for a.declaration of incapacity and
' recovery of the inheritance, devise or legacy
shall be 5 years from the time the disqualified
person took possession thereof. (Art. 1040)
Who May Accept or Repudiate
General Rule: Any person having the free
disposal of his; property may accept or
repudiate an inheritance. (Art. 1044)
\;
Exceptions:
1. Minors or Incapacitated persons
Acceptance - By their parents or
guardians.
Repudiation - By their parents or
guardians with judicial authorization (Art.
1044)
2. Inheritance left to the poor - The right to
accept the inheritance shall belong to the
persons designated by the testator to
determine the beneficiaries and distribute
the property, or. in their default, to those
mentioned in Article 1030. (Art. 1044)
3. Corporation, association, institution, or
entity as beneficiary (Art. 1045)
Acceptance - May be made by the lawful
representatives

•. - ' NOTE: It may be brought by any one who may

have an interest in the succession. (Art. 1040)
Repudiation -May be made by the lawful
representatives with judicial authority
4. Literate Deaf-Mutes
Acceptance and Repudiation -Personally.
3. ACCEPTANCE AND or through an agent (Art. 1048)
.....~ .. 5. Illiterate Deaf-Mutes (Balane, supra)
• I REPUDIATION OF INHERITANCE
Acceptance -- Guardians
Repudiation - Guardians with judicial
Characteristics of Acceptance and approval
Repudiation
1. Free and Voluntary (Art. 1041) If the Beneficiary is a Married Wonian (Art
2. Irrevocable once made and cannot be 1047)
,r···. impugned, except in cases vitiating She may either accept or repudiate the
', I-~. consent or when an unknown will appear; inheritance without her husband's consent
(Art. 1056)
3. Retroactive (Art. 777) Manner of Acceptance of Inheritance (Art.
1049)
Requirements to Accept or Repudiate and 1. Express Acceptance
Inheritance a. Public Document
A person may only accept or repudiate an b. Private Writing
inheritance once he or she is certain of: •
1. The death of the person from whom he is 2. Tacit Acceptance - one resulting from acts
to inherit; and by which the intention to . accept is
2. His right to the inheritance. (Art. 1043) necessarily implied or which one would
have no right 'to do except in the capacity
Time for Acceptance or Repudiation of an heir. It can be presumed from certain
Within 30 days after the court has issued an acts of the heir such as:
order for the distribution of the estate the heir, a. If the heir sells, donates, or assigns his
I : devisee, or legatee shall signify to the court right to a stranger, or to his co-heirs, or
\ .....;: having jurisdiction whether they accept or to any of them
repudiate the inheritance. If they do not do so b. If the heir renounces the same, even
within that time, they are deemed to have though gratuitously, for the benefit of
accepted the inheritance. (Art. 1057) one or more of his co-heirs

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c. If he renounces it for a price in favor of
all his co-heirs Indiscriminately; but if
this renunciation should be gratuitous,
and the co-heirs in whose favor it is
made are those upon whom the
portion renounced should devolve by
virtue of accretion, the inheritance
shall not be deemed as accepted
3. Implied Acceptance - This is acceptance
by inaction. Under Art 1057, to ~ignify
acceptance or repudiation within 30 days
after an order of distribution by the probate
court.
Manner of Repudiation (Art. 1051)
The repudiation of the inheritance shall be
made in:
1. A public document signed before a
notary public, or
2. Authentic Instrument - equivalent to an
indubitable writing or a writing whose.
authenticity is admitted or proved, or
3. By a petition presented to the court having
jurisdiction over the testamentary or
intestate proceedings.
• The law considers that ·the act of
. hereditary mass, in fact or by fiction, property
repudiation Is more solemn that the act of
acceptance and that repudiation produces
more violent and disturbing consequences.
• If the heir repudiates the inheritance to the
prejudice of his own creditors, the latter
may petition the court to authorize them to
accept it in the name of the heir.
• If an heir is both a testate and legal heir,
repudiation of the inheritance as a testate
heir, he is understood to have repudiated
in both capacities. However, should he
repudiate as a legal heir, without
knowledge of being a testate heir, he may
still accept the inheritance as a legal heir.
If renounced in favor of other heirs, does It
mean acceptance? (Balane, supra)
It depends:
1. If specific heir - whether or not
renouncing heir receives. anything,
considered as acceptance- on the part of
the heir. There are two transfers.
2. If gr~tuitous -
a. In favor of all his co heirs
indiscriminately ~ there is repudiation
because the heir deemed to have not
accepted. Hence, accretion takes
place.
CIVIL LAW
b. In favor of all co-heirs but in proportion
different from those they would receive
by accretion: considered as tacit
acceptance.
c. . If gratuitous in favor of one or some of
his co-heirs - deemed conveyance in
favor of the co-heirs specified, hence
there is acceptance.
3. If onerously: '
a. There is no repudiation
b. Transfer considered to be with
consideration
There are also tax implications because there
are two transfers.
COLLATION
The act by virtue of which, the persons who
concur in the inheritance bring back to the
common hereditary mass the property, which
they have received from him, so that a division
may be effected according to law and the will
of the testator. (Mison, Wills and Succession
Better Explained, 2011)
•
To collate is to bring back or to return to the
which came from the estate of th'e decedent,
during his lifetime, but which the law considers
as an advance from the Inheritance. (Mison,
supra)
Concept of Collation
The act of bringing back to the estate
properties acquire~ inter vivos and gratuitously
from decedent (if acquired by will, e.g. legacies
and devisees, they are not collatable, but may·
be reduced for bei~g inofficious)
Obligatron of Every Compulsory Heir
Every compulsory heir, who succeeds with
other compulsory heirs, must bring into the
mass of the estate any property or right which
he may have received from the decedent,
during the lifetime of the latter, by way of
donation, or any other gratuitous title, in order
that it may be computed in the determination of
the legitime of each-heir, and in the account of
the partition. (Art. 1061)
However, donations inter vlvos to compulsory
· heirs shall not be imputed to the legitime:
1. If the donor expressly provided; (Art. 1062)
2. The donee repudiated the inheritance; (Id.)
3. The value of donation exceeds the donee's
legitime
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NOTE: The donation will be Imputed to the
legitime to the extent of the legitime's value,
and the excess to the free portion. (Balane,
supra at p. 577)
Properties or Rights Received by
Compulsory Heir not Subject to Collation
1. Property left by will (Art. 1063)
2. Property which may have been donated by
an ascendant of the compulsory heir (Art.
1065).
3. Property donated to the spouse of the
compulsory heir (Art. 1066)
4. Expenses for support, education, medical
f'; attendance even in extraordinary illness,
apprenticeship, ordinary equipment or
customary gifts (Art. 1067)
5. Expenses incurred by parents in giving
their children a professional, vocational, or
other career (Art. 1068)
6. Wedding gifts consisting of jewelry,
........
clothing and outfit, given by parents or
ascendants, so long as they do not exceed
,-::""•.
1 /1 O of the disposable portion (Art. 1070)
Kinds of Collation (Ba/ane, supra)
1. Collation of Values - values only, no
physical return
2. Collation in kind - actual · retu.rn of
property received: only required when
inofficious, ie, legitime is impaired
COLLATION OF VALUES
Purposes
.....!,' ..
1. For computation - Arts. 908, 909 as
basis for determining the legitime
• Determination: value at the time of
donation + fruits & legal interest from
. ',r
.,
date succession opens (if required to
return in kind)
• Compulsory heirs and strangers must
collate for computation. For strangers,
there is no effect unless found to be
inofficious. If donation to strangers .is
not included, compulsory heirs will be
prejudiced because basis for the
legitime will be smaller. (Balane, supra)
2. For equalization on account of partition
• Only required for compulsory heirs; 2"d
collation; when actually charged either
to legitime or free portion.
• Reason: donatlon to compulsory heirs
are considered advance of legitime,
otherwise, It will prejudice other
, .
'! _, 1.
CIVIL LAW
compulsory heirs. For strangers, no
equalization is required, are always
charged to free portion. (Paras, supre)
Not subject to collation (i.e., charged to free
portion) if:
1. Testator provides otherwise (but still
collated for computation) (Art. 1062)
2. If compulsory hair rspudlatee, In which
ca&e he !s .eonsldtrl!id a !ltranger ... for
eompuiation dhly, charge!d to fMe portion
(Art. 1062)
COLLATION FOR EQUALIZATION
Requisites (Art. 1069)
1. Two or more compulsory heirs. If only
one, no equc1Hzatlonis needed,
2. Liberality - tnust be acquired gratuitously
from the decedent (inter vivos). In donation,
gratuitous act'may be direct or Indirect, as
when parent pays for debt of child or pays
for purchase price of the car placed in -
name of the child - not a demandable debt
as when there is no intention to be
reimbursed, otherwise placed on asset
side as receivables from the heir {not
collation).
• If there is no liberality, such as arising.
from obligation to support (e.g.
education) -other compulsory heirs··
cannot ask for collation.
• Exception: When liberality is present,
but no collation is required: Wedding
gift of parent/asc consisting of jewelry,
clothing, outfit (1070) not more than
1/10 of amt disposable by will -
considered customary gift, not
collatable, while excess required to be
collated.
3. Identity of heir and donee which may be: •
a. Actual: e.g. F donates to son; Son
collates for computation and
equalization; If he donates to grandson,
son is not required to collate, but
grandson collates for computation as a
stranger. · If son predeceases,
grandson collates for computation and
equalization (now a compulsory heir)
b. Constructive: F donates to son, son
predeceases and GS succeeds by
representation. GS must collate
donation to son even W he does not·
actually receive it.
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If there is no identity: no collation for
' OF THE ESTATE
equalization is required. E.g. Father donates to
f spouse of son: Son has no obligation to collate.
11 but spouse must collate for computation as a
stranger. If he donates to both spouses: 112
l;
each, son collates for computation and
equalization, spouse collates only for
computation. (Paras, supra)
If collation required for equalization, may be
quantitative: same amount, or qualitative:
same kind. If immovable -equivalent, if not
available, sell other properties to generate
cash, and if movable, equivalent properties
(Paras, supra)
COLLATION IN KIND
Actual return - Only if inofficious, i.e. legitime
Impaired. Operates as resolutory condition:
donation terminated and must return only to
the extent inofficious: not necessarily a case of
total return. A donee who is required to collate
in kind is a possessor in good faith, and not
required to account for fruits and interests
except from the date succession opens. (A°rt.
1075)
Operations Related to Collation (Paras,
supra)
1. Collation - adding to the mass of the
hereditary estate the value of the donation
or gratuitous disposition
2. Imputing or Charging - crediting the
donation as an advance on the legitime (if
the donee is a compulsory heir) or on the
free portion (if the donee is a stranger)
3. Reduction - determining to what extent
the donation will remain and to what extent
it is excessive or inofficious
4. Restitution - return or payment of the
excess to the mass of hereditary estate.
CIVIL LAW
4. PARTITION AND DISTRIBUTION
PARTITION (Art. 1079, 1082)
The separation, division and assignment of a
thing held in common among those to whom It
may belong. It Jnctudes every act which Is
intended to put ai., end to indivision among co-
heirs, and legaties or devisees, although it
should purport 'to be a sale, exchange,
compromise, or any other transaction. It is not
subject to any form.
Who May Effect Partition
1. Decedent himself during his lifetime by an
act inter vivas or by will (Art. 1080)
2. Heir themselves (Art. 1083)
3, Competent court (Art. 1083)
4. Third person designated by the decedent
(Art. 1081)
Who Can Demand Partition (Art. 1083)
1. Compulsory heir;
2. Voluntary heir •
3. Legatee or devisee;
4. Any person who has acquired interest in
the estate
When Partition Cannot. be Demanded
(PAPU)
1. When expressly ~rohibited by the testator
himself for a period not exceeding 20 years;
(Art. 1083)
2. When the co-heirs Agreed that the estate
shall not be divided for a period not .
exceeding 10 years, renewable for another
10 years;
3. When frohiblted by law;
4. When lo partition the estate would render it
!Jnserviceable for the use for which it is
intended.
NOTE:
• Partition Inter Vivos (Art. 1080)- it is one
that merely allocates specific items or
pieces of property on the basis of the pro
indlviso shares fixed by law or given under
the will to heirs or successors.
• Partition is not itself a mode of acquirinq
ownership, nor, a title, but being predicated
on succession, necessitates relationship to
the decedent (in case of intestacy) or a will
duly probated (in case of testacy).
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Prohibition to Partition (Arl. 1083)
1. The prohibition to partition for a period not
exceeding 20 years can be imposed on the
legitime.
2. If the prohibition to partition Is for more
then 20 years, the excess is void.
3. Even if a prohibition Is Imposed, the heir's
mutual agreement can still make the
partition.
(1 Legal Redemption In Favor Of Co-Heirs (Art.
1623)
The right of legal redemption predicated upon
the fact that the sale made by the co-heir is
effected before the partition of the estate but
after the death of the decedent.
) .
Requisites: (Aguilar v, Aguilar, G.R. No.
'., 141613, December 16, 2005)
' . 1. There must be several co-heirs
2. That one of them sells his right to a
stranger
3. That the sale is made before the partition
r~.-.· _,. 4. That the right of redemption must be
exercised by one or more of the co-heirs
,f--. within 1 month from the time they were
notified in writing by the co-heir vendor
5. The vendee is reimbursed for the price of
the sale.
-~.:.. .i EFFECTS OF PARTITION
• Confers upon each heir the exclusive
ownership of the property adjudicated.
(Art. 1091)
• After the partition, the co-heirs shall be
reciprocally bound to warrant the title to
(warranty against eviction) and the quality
of (warranty against hidden defects), each
property adjudicated. (Art. 1092)
• The obligation of warranty shall cease in
the following cases: (Art. 1096)
' f 1. When the testator himself has made
·....rJ'
the partition unless his intention was
otherwise, but the legitime shall
always remain unimpaired.
,.
2. When it has been expressly stipulated
v in the agreement of partition, unless
there has been bap faith.
3. When the eviction was due to a cause
subsequent to the partition, or has
( >
(_J been caused by the fault of the
distributee of the property.
(_}
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CIVIL LAW
Effects of Inclusion of Intruder in Partition
(Art. 1105)
1. Between a true heir and several mistaken
heirs - Partition is VOID
2. Between several true heirs and a mistaken
heir - transmission to mistaken heir Is
VOID
3. Through error or mistake; share of true heir
is allotted to mistaken heir - partition shall
not be rescinded unless there is bad faith
or fraud on the part of the other persons
interested, but the latter shall be
proportionately obliged to pay the true heir
of his share
NOTE: Partition with respect to the mistaken
heir is VOID. (Art. 1105)
A Void Will may be a Valid Partition (Paras,
· supra)
1. If the will was in fact a partition; and
2. If the beneficiaries in the void will were
legal heirs
RESCISSION AND NULLITY OF PARTITION
A partition, judicial or extra-judicial, may also.
be rescinded on account of lesion, when any
one of the co-heirs received things whose
value is less, by at least one-fourth, than the
share to which he is entitled, considering the·
value of the things ~at the time they were
adjudicated. (Art. 1098)
Partition Made By the Testator (Art. 1099)
~':,
General Rule: A partltion made by the testator
cannot be impugned on the grounds of lesion.
I
Exceptions:
1. When the legitirne of the compulsory heirs
is prejudiced; or
2. When it appears or may reasonably be
presumed, that the intention of the •
testators was otherwise.
. .
Options Available to Obligor-Heir (Art. 1101)
The heir who is sued shall have the option of:
1. Indemnifying the plaintiff for the loss, by
payment in cash or by delivery of a ·thing of
the same kind and quality as that awarded
to the plaintiff; or
2. Consenting to a new partition
NOTE: If a new partition is made, it shall
affect neither those who have not been ·
prejudiced , nor those who have not
Page 157 of 432
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received more than their Just share. (Art.

1101)

Remedy of an Heir Who has Alienated the

Property Adjudicated to Him
An heir who has alienated the whole or a
considerable part of the real property
adjudicated to him cannot maintain an action
for rescission on the ground of lesion, but he
shall have a right to be indemnified in cash.
(Art. 1102) .

Incompleteness of Partition Not a Ground

for Rescission
The omission of one or more objects or
securities of the inheritance shall not cause the
rescission of the partition on the ground of
lesion, but the partition shall be completed by
the distribution of the objects or securities
which have been omitted. (Art. 1103)

Omission of a Compulsory Heir in the

Partition ....
~.-
General Rufe: A partition made with preterition
•
of any of the compulsory heirs shall not be
rescinded. (Art. 1104) '

NOTE: This is not preterition under Article 854.

This Is simply an omission of a compulsory heir
In the partition, the assumption being that
something is left for him In the form of an
undlsposed portlon of the estate. The omitted
heir simply gets his rightful share. (Non v. CA,
G.R. No. 137287, 2000)

Exception: Bad faith or fraud on the part of the

other persons interested. (Art. 1104)

Remedy: The other persons interested shall

be proportionately obliged to pay to the person
omitted the share which belongs to him. (Art.
1104)

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20 years (Art. 1083) Maximum period testator can prohiblt alienation of

Cl dis ositions
5years from delivery to the State:::...i.:.A..c.rt..:.;._1....:0...;.1...;.4~-+-T-'o~cl.;;.a.;....im...;..i;;.....:ro~e""rt.._y....:e.:;.s.:;.ch..c.e:;.:a:;.:t;;..ed;;...t
..:o:...t:. .h.:;.e. . :S:;.:t.:;.at:..:e ~
5 years from the time disqualified person took Action for declaration of incapacity & for recovery
possession (Art. 1040) of the inheritance, devise or le ac
30 days from issuance of order of distribution Must signify acceptance/repudiation otherwise,
_ (Art. 1057) deemed accepted
1 month form written notice of sale (Art. 1088) Right to repurchase hereditary rights sold to a
1----------------~---i_s_t_ra_n..,._._erbyaco~-....:h.:;.e: __ . .ir ·;..._ ~
10 years (Art. 1094) To enforce warranty of title/quality of property
adjudicated to co-heir tro;m the time right of action
accrues
5 years from partition (Art. 1095) To enforce warranty of solvency of debtor of the
estate at the time artition is made
4 years from partition (Art. 1100) Action for rescission of partition on account of
lesion

<
.~··
'·~·· ---- end of topic-----
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Lv. OBUGATION'S ANO CONTRACTS
TOPIC OUTLINE UNDER THE SYLLABUS:
A. Obligations
1. General provisions
2. Nature and effect
3. Kinds
4. Extinguishment
B. Contracts
1. General provisions
2. Essential requisites
3. Reformation of instruments
4. Interpretation of contracts
5. Rescissible contracts
6. Voidable contracts
7. Unenforceable contracts
8. Void or inexistent contracts
C. Natural obligations
0. Estoppal
E. Trusts
; ~ CIVIL LAW
'·
i
A. OBLIGATIONS
1. GENERAL PROVISIONS
Obligation: A juridical necessity to give, to do or
not to do. (Art. 1156).
Essential Elements of an Obligation (Arts.
1156- 1162)(PAVO)
1. fassive Subject (obliger/debtor): the person
who has the duty of giving, doing or not
doing; person bound to the fulfillment
2. ~ctive Subject {obligee/creditor): the person
in whose favor the obligation is constituted;
person ent!tled to make a demand
3. Yinculum Juris/ Legal Tie: the efficient
cause or the juridical tie between two
subjects by reason of which the debtor is
bound in favor of the creditor to perform the
obligation. It can be established by various
sources of obligations (law, contract, quasi-
contracts, dellcts, and quasi-delicts) and
may arise either from bilateral or unilateral
•
acts of persons.
4. .Qbject/ Subject Matter: the prestation or
conduct which has to be observed by the
debtor/obliger; to be valid, it must be:
(LiPoDeM):
(a) Licit
(b) Possible
(c) Determinate/ Determinable
(d) Must have pecuniary value (Jurado,
Comments and Jurisprudence on
Obligations and Contracts, 457, 2010)
In certain kinds of obligations, the following may
constitute addltlonalrequirernents:
j,:
5. Form: in formal contracts where form is
necessary for v~.lidity, e.g., donation
6. Delivery or Tradition: real contracts where
delivery is necessary for perfection of the
obligation, e.g., Pledge (Pineda, Obligations
and Contracts, 412, 2009)
Obligations arise from: (L-CQAQ)
1. Law;
2. Contracts;
3. Quasi-contracts;
4. Acts or omissions punished by law; and
5. Ouasi-dellcts (Art. 1157)
Note: The list is exclusive. (Sagrado Order'I v.
Nacoco, G.R. No. L·37756, 1952)
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3. The act must be Y,nilateral distinguishing
;)- ., A. LAW (OBLIGATION EX I.EGE) it from contract which is based on
I agreement. (Pineda, Obligations and
i1 :') • The law cannot exist as a source of commas, 15, 2009)
' obligations, unless the acts to which its

Ii CJ •
principles may be applied exist.
Once the acts or facts exist, the obligations
arising therefrom by virtue of the express
Kinds of quasi-contract
(a) Negotiorum Gestlo - is the voluntary
management of the property or affairs of
! ["'\
l. ) provisions of the law are entirely another in times of emergency without the
independent of the agreement of the owner's authority. (Art. 2144) Obligation
parties. (Manila Trading & Supply Co. v. created: Return of the property by the
Saez, G.R. No. 43861, 1938) officious manager to the owner once the
,r-·, emergency ceases, and for the owner to
\. . .1 • It must be expressly or impliedly set forth
and cannot be presumed. (Martinez v. reimburse expenses incurred by the
'• -, Martinez, G.R. No. 858, 1903) officious manager. (Art. 2150)
(b) Solutlo lndebiti - is the juridical relation,
(· B. CONTRACTS (OBLIGATION EX which is created when something is received
.... CONTRACTU) when there is no right to demand it and it
was unduly delivered through mistake. (Art.
• Obllgatlons arising from contracts have the 2154) Obligation created: Recipient to return
force of law between the contracting parties the property delivered through mistake.
i,1,..' and should be complied with in good faith. (c) Other cases of quasi-contracts (Art. 2164-
(Art. 1159) 2175)
• Parties rnay freely enter into any stipulations
provided they are not contrary to law, Note: The Civil Code provides [the above-
,... mentionedJ enumeration of quasi-contracts, but
(.
morals, good customs, public order or public
policy. (Art. 1306) the list is not exhaustive and merely provides
• The terms of the contracts determine the examples. (Metroqank v. AMC, G.R. No.
respective obligations of the parties. 170498, 2013)
rr-. • If the terms of the contract are clear and
. j
,.,._. Solutio indebitl vs. Natural obligations
leave no doubt upon the contracting parties'
intention, such terms should be applied in • In natural obligations, the person making the
their literal meaning. (Art. 1370) payment or dellvery knows that he has no
• Neither party may unilaterally evade his legal obligation to pay or to deliver but
still voluntarily makes such payment or
obligation in the contract, unless the
contract authorizes it or the other party dellvery. For this reason, once payment or
r: assents. (Pineda, Obligations and Contracts, delivery has been tnade, there is no right to
{..) ask for the return. (Art. 1423)
385, 2009)
... "':
• In solutio indebiti, the payment or delivery is
C. QUASl·CONTRACTS (OBLIGATION EX made on the basis of a mistake, hence the
QUASl·CONTRACTU) recipient has the legal obligation to
return. (Art. 2154) •
• Juridical relations resulting from lawful,
voluntary and unilateral acts, which 'has D. DELICT~ (OBLIGATION EX M.A,LEFICIO •
for its purpose, the payment of indemnity to OR EX OELICTO)
the end that no one shall be unjustly
enriched or benefited at the expense of • Every person criminally liable for a felony is
another. (Art. 2142) also civilly liabte. (Revised Penal Code, Art.
100)
• Distinguished from other Sources (LUV) • Such civil llability is a necessary
r:·'-.1,)' consequence of criminal responsibility, and
1. The act giving rise to a quasi-contract
must be bawful distinguishing it from is to be declared and generally enforced in
{: ·,
\
'-.;· ' deli ct; the criminal proceeding EXCEPT where:
a. the injured party reserves his
, . 2. The act must be Y,oluntary distinguishing
right to avail himself of it in a
\..!t it from a quasi-delict which is based on
fault or negligence; and distinct civil action or
Page 161 of 432
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b. in cases where an independent
I civil action is allowed by law.
I (Art. 33; Rules of Court. Rule
11"1, Sec. 1)
I fault or negligence be the cause of the
! Scope ,of clvll llablllty
1. Restitution
2. Reparation for damage caused
3. Indemnity for Consequential darnaqes
(Revised Penal Code, Art. 104)
Effect of acquittal in criminal case
• General Rule: The acquittal of the accused
in the criminal case due to the prosecution's
failure to prove guilt beyond reasonable
doubt does not prejudice the civil action,
in which the offended party may still be able
to recover damages by a mere
preponderance of evidence. (Art. 29)
• Exception: Where the Judgment of acquittal
contained a declaration that no negligence
can be attributed to the accused and that
the fact from which the civil action might
arise did not exist. (Castillo v. CA, G.R. No.
48541, 1989)
Extinguishment of liability
The civil liability for crimes is extinguished by the
same causes provided by the Civil Code for the
extinguishment of other obligations. (Rules of
Court, Rule 4, Sec. 4)
Note: Death of the accused during the pendency
of the case can extinguish the civil liability if the
same arose directly from the crime committed.
However, this does not apply if civil liability can
be· based on another source of obligation (i.e.,
law on human relations). (Asilo, Jr. v. People,
G.R. Nos. 159017-18 & 159059, 2011)
E. QUASI-DELICTITORTS (OBLIGATION EX
QUASl·DELICTO OR EX QUASI
MALEFICIO)
• It is an act or omission arising from fault
or negligence, which causes damage to
another, there being no pre-existing
contractual relations between the parties.
(Art. 21.76)
• Elements: (ADD)
1. That there exists a wrongful Act or
omission imputable to the defendant by
reason of his fault or negligence;
2. That there exists a Qamage or injury,
which must be proved by the person
claiming recovery;
CIVIL LAW
3. That there must be a Direct causal
connection or a relation of cause and
effect between the fault or negligence
and the damage or injury; or that the
damage or injury. (Art. 2176; Taylor v.
Manila Electric Co., G.R. No. L-4977,
1910)
Negligence: Failure to observe for the •
protection Of the interests of another person, that
degree of care, precaution and vigilance, which
the circumstances justly demand, whereby
such other person .sutters injury. (US v. Barias,
G.R. No. L-7567, 1912)
·~
Test of Negligenc~: "Would a prudent man, in
the position of the person to whom negligence is
attributed, foresee harm to the person injured as
a reasonable consequence of the course about
to be pursued?" (Picart v. Smith, G.R. No. L-
12219, 1918)
•
2. NATURE AND EFFECTS OF
· OBLIGATIONS
A. DUTIES OF A DEBTOR IN AN
OBLIGATION TO GIVE
1. To give a determinate thing (Arts. 1163,
1164 & 1166)
a. To preserve or take care of the thing due
with the diligence of a good father of a
family (i.e.. that standard of care which·
an owner would give to his own property),
unless the law requires or the parties
agree otherwise; (Art. 1163)
b. To deliver fruits, whether civil, industrial,
or natural fruits (obligor is liable for fruits
only from the time the obligation to
deliver arises); and
c. To deliver accessions and accessories
(Art. 1166)
• Accessions incorporated or
attached to the object to form part of
the principal
• Accessories - added for completion,
use perfection or embellishment. ·
2. To give a generic thing (Arts. 1246 &
1170)
(a) To deliver the thing of the quality intended
by the parties, taking into consideration
the purpose or the obligation, intent of the
~"
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. parties, and other circumstances. (Art. • Obligations with Suspensive Condition: If
1246) unilateral, onl'y from the time the condition
(b) To pay damages in case of breach of the is fulfilled, but the obligation retroacts to the
9Pli~~tiqn, (Art, 117()) ~of its constitution. If reclprocal (~v~n if
th@ tw1;J f@i:lipf€1'3§1@ijli~Elti@Fl§ §f@ R@t @f th@
s. RlGi-iTs OF A CREDi'foR iN AN same value), the parties are deemed as
Ol3LIGAtlON ro DO OR NOT TO DO mutually compensated during the pendeiicy
of the condition (Art. 1187). Thus, there is no
1. To do (Positive Personal) liability to account for fruits in reciprocal
,..-
i!
<._
.
~
(a) The obligee is entitled to have the thing
done in a proper manner, by himself or •
obligations.
Obligations subject to a Suspensive
by a third person, at the expense of the Period: There is no similar provision as
,('-~ \
obliger; Article 1187, hence there are 2 schools of
'
':... ... I

(b) To demand what has been poorly done thought: (1) from perfection, since there is
r be undone; already an obligation from the date the
\ i
(c) To recover damages because of breach obligation is perfected, and only the
of the obligation. (Art. 1167) performance or delivery is suspended until
the arrival of the period, and (2) same as a
2. Not to do (Negative Personal) suspensive condition, from date the period
~.. (a) To have the thing undone at the arrives.
expense of the obliger; and/or • Obligations subject to a Resolutory
', .. (b) To ask for damages. (Art. 1168) Condition/Period: No obligation to deliver
fruits since performance or delivery is
. PERSONAL RIGHT . REAL:. RIGHT · · immediate, upon the happening of the
Jus ad rem, a right Jus in re, a right condition/period. (Art. 1179)
,. ..
enforceable only enforceable against
against a definite the whole world· D. BREACH OF OBLIGATIONS
person or group of
persons Causes of Breach
Right pertaining to a Right pertaining to a 1. Incidental Fraud (Doto incidente)
person to demand person over a specific 2. Negligence (Culpa)
,.,.. from another, as a thing, without a definite 3. Default I Delay (Mora)
' . 4. Contravention ofTerms (Art. 1170)
'l ... ' definite passive passive subject
.,,-., subject, the fulfillment against whom the right
of the prestation to may be personally There is breach when the obligor fails without
1.. ,i
Qive, to do or not to do. enforced legal excuse (such as fortuitous events) to
(Pineda, Obligationsand Contracts, 35, 2009) perform any promise, which forms the whole or
part of an obligatiO,Q. (Guanio v. Makati Shangri-
C. WHEN AN OBLIGATION ARISES La and Resort, Int., G.R. No. 190601, 2011;
R.S. Tomas Inc. v)Rizal Cement Co. tnc., G.R.
1,'
• Pure obligation: Upon demand (Art. 1179) No.173155, 2012) •
· . . ·. _ BREACH ARISING FROM o . BREACH ARISING FORiUITOl:JS EVENT '
': ', DOLO. . FROM CULPA . · . .
Liable for all consequences
Liable only for those No llablllty - unforeseen
of act, whether foreseen or
foreseen, or could have or even If foreseen, is
Scope of llablllty unforeseen (e.g., Joss of
foreseen unavoidable
profits)
(Art. 2201)- (Art. 1174)
Art. 2201
Actual knowledge or Absence of possibility of
Possibility of knowledge
awareness of the cause knowledge (could not be
or aware-ness (ought or
Basis of liability (Art. 2201; Legaspi Oil cs, could have foreseen)
foreseen or if foreseen,
Inc. v. CA, G.R. No. 96595, could not be avoided)
(Art. 2201)
1993 'Art. 1174
Ii i
'\'.:...,
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1. Incidental fraud (Dolo incidente)

• Fraud is the deliberate or Intentional FRAUD · NEGLIGENCE
evasion of the normal fulfillment of an There is deliberate There is no deliberate
obligation. (8 Manresa, s'h Ed., Book, 1, 72) intention to cause intention to cause
damage. damage.
T • fF d Liability cannot be Liability may be
INCIDENTAL CA USA~ rnltiqated. rnlttoated. (Arl. 1173)
· .(Do/a lncidente) (Dalo causante) Presumed from the
Must be clearly ·
(ART.1170) (ART. 1338) breach of a contractual
proved
Present during the Present before or obligation
performance of a pre- simultaneously with Waiver for future Waiver for future
existing obligation the perfection of a fraud is void. (Arl. negligence may be
contract 1171) allowed in certain cases
Purpose is to evade Purpose is to secure (De Leon, Comments and Cases on Obligation
the normal fulfillment the consent of and Contracts, 62, 2014)
of the obligation another to enter Into
the contract NEGLIGENCE CRIME
Results in the breach Results in vitiation of Any act with fault or Acts punishable by
of an obligation consent; voidable negligence (Art.. law (Revised Penal
contract 1174) Code, Arl. 3)
Gives rise to a right in Gives rise to a right Criminal intent Criminal intent •
favor of the obligee to of an innocent party unnecessary necessarv
sue for breach (see to annul the contract Damages may be
remedies for breach Some crimes do NOT
awarded to injured
(Jurado, Comments and Jurisprudence on party
give _rise to civil liability
Obligations and Contracts, 63, 2010) Violation of private Violation of public
rights i·:
rights
Note: Future fraud CANNOT be waived. Preponderance of 1'; Proof beyond
However, the law does NOT prohibit evidence reasonable doubt
renunciation of the action for damages on the
Can be
.. Criminal liability
ground of past fraud. (Arl. 1171)
compromised as an~ cannot be
other civil liability compromised
2. Negligence (Culpa)
• Any voluntary act or omrssron, there Presumption of Presumption of
being no malice which prevents the normal negligence innocence
fulfillment of an obligation. (De Leon, (De Leon, Comments and Cases on Obligation
Comments and Cases on Obligations and and Contracts, 27, 2014)
Contracts, 58, 2014)
• Consists in the omission of that diligence . Kinds of Neglfgence
which is required by the nature of the 1. Quasi-De/let ( Culpa aqul/iana/cu/pa extra
obligation and corresponds with the contractual) - source of obligation; wrong
circumstances of the persons, of the lime or negligence committed independent of
and of the place (Arl. 1173) contract and without criminal intent
2. Contractual Negligence {Culpa
Contractual) - wrong or negligence in the
performance of a obligation or contract
. 3. Criminal Negligence (Culpa Criminal) -
wrong or negligence in the commission of a
crime (De Leon, Cases and Comments on
Obligations and Contracts, 65-66, 2014)

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blind person becomes that of a reasonable
CULPA person who Is blind. (Francisco v. Chemical
CULPA AQUILIANA
. CONTRACTUAL Bulk Carriers, Incorporated, G.R. No. 193577,
() Negligence is Negligence merely an 2011)
substantive and incident of
independent performance of an Instances where the law requires a higher
t. ,I oblioation standard of care
There may or may There is a pre-existing • Banks - as a business affected with public
(°')
"- / NOT be a pre-existing contractual relation interest, and because of the nature of its
~ ..... ' contractual obliaation functions, banks are under obligation to treat
., the accounts of Its depositors with
'· ...... .1 Source of the Source of the
obligation is the obligation is the meticulous care, always having in mind the
negligence itself (Art. breach of the fiduciary nature of their relationship. (Simex
2176) contractual obligation v, CA, G.R. No.; 88013, 1990)
(Arts. 1170-1174;
2201) Exception: Extraordinary diligence does not
r' ·, Negligence must be Proof of existence of cover transactions ~outside bank deposits, i.e.:
J '
proved the contract and Its commercial transactions. (Reyes v. CA, G.R.
r, breach is prims facie No. 94214, 1992)
'<: sufficient to warrant
recoverv • Realty Corporations - A corporation
For the negligence of · For the negligence of engaged in the buying and selling of real
an employee, diligence an employee, diligence estate is expected to exercise a higher
in the selection and in the selection and standard of care and diligence in ..
supervision of the supervision of the ascertaining the status and condition of the
employees is a employees is N!)T property subject of Its business transaction; :
defense of the available as a defense Similar to investment and financing
emelo:ler of the emolover corporations, it cannot simply rely on an
(Paras, Civil Code Volume IV: Obligationsand examination of a Torrens certificate to
Contracts, 144~ 145, 2014) determine what the subject property, looks
- ; like as its condition is not apparent in the
'-.•

Rule on Standard of Care document. (Eagle Realty Corp. v. Republic,

c :
1. That which the law requires; or G.R. No. 151424, MR: 200~. 2008).
·~'
2. That stipulated by the parties; or
-·'<'.. ' "'' 3. In the absence of the above, diligence of a • Common Carriers - from the nature of their
good father of a family (Art. 1163) business and for reasons of public policy,
c· ·,
: ......t-
However, parties cannot stipulate that there common carriers are bound to observe
would be absolute exemption from liability for extraordinary diligence in the vigilance over
any fault or negligence, since it is against public the goods and for the safety of the
policy. (Heacock vs. Macondray, G.R. No. L- passengers transported by them, according
16598, ·1915; see Arts. 1306, 1744, 1745.) to all the circumstances of each case. (Art.
•
1733)
Diligence of a good father of a fa~ily:
ordinary care or that diligence which an average Effects of contributory negligence of the
or reasonably prudent person would exercise obligee
over his own property (De Leon, Cases and • General rule: Reduces or mitigates the
Comments on Obligations and Contracts, 34, damages which he can recover.
,< . 2014) • Exception: If the negligent act or omission
·1 •. ,
of the creditor is the proximate cause of the
, Standard of care of disabled person event, whlcf led to the damage or injury
"--..,;' A disabled person is required to use the same complained bf, he cannot recover. (Art. 2179)
degree of care that a reasonably careful person
\ ..; having the same disability would use. Physical
handicaps are treated as part of the
t,' t circumstances under which a reasonable person
c; .....
must act. Thus, the standard of conduct for a
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3. Default or Delay (Mora)
! General rule: Those obliged to deliver or to do
something incur in delay from the time the
obllgee Judlelally or extrajudlclally demands from
them the fulfillment of their obligation. (Art. 1169)
Exception: Demand by the creditor NOT
necessary when: (LTU) · finish the project in 6 years does not put the
1. ,baw or obligation expressly declares so
2. !ime is of the essence
3. Demand would be Qseless (Art. 1169)
Requisites to be in delay: (Art. 1169)
I. Obligation is Qemandable
2. Debtor Qelays performance
J. Creditor Qemands performance
judicially or extrajudicially
Note: In reciprocal obligations, a party does not
incur in delay if the other party is not ready or
willing to assume and perform the obligation
imposed upon him/her (Art. 1169)
But see: In reciprocal obligations, if the period
. for the fulfillment of the obligation is fixed,
demand upon the obligee is still necessary
before the obliger can be considered in default
and before a cause of action for rescission will
accrue. (Solar Harvest v. Davao Corrugated
Carton Corporation, G.R. No. 176868, 2010)
Note: In determining whether time is of the
essence, the ultimate criterion is the actual or
apparent intention of the parties and before time
may be so regarded by the court, there must be
sufficient manifestation of that intention.
(Lorenzo Shipping Corp. v. B.J. Marthe/
International, tnc., G.R. No. 145483, 2004)
Note: In the absence of a contractual stipulation,
a contracting party cannot extrajudicially rescind
the contract. The party needs to file a judicial
action for rescission under Art. 1191. (Eds Mfg.
v. Healthcheck International, Inc., 2013)
But see: In Letn v. Kodak (2016), although there
was no stipulation, the court ruled that since
both parties exercised their right to resolve
under Art. 11.91, judicial rescission is not
necessary· because the power to resolve is
implied in reciprocal obligations. (Lam v. Kodak,
G.R. No. 167615, 2016)
The use of a credit card to pay for a purchase is
only an offer to the credit card company to enter
a loan agreement with the credit card holder.
Before the credit card issuer accepts this offer,
CIVIL LAW
no obllgatlon relating to the loan agreement
exists between them. A demand presupposes
the existence ofii an obligation between the
parties. (Pantaleon v. American Express
lnternatlonol,tnc., (3.R. No. 174269, 2010)
.. ,
If the contract sti.pulates that "the project is
estimated to be completed in 6 years," failure to
obllgor In delay. Mere estimate cannot be
considered apertod or a day certain. (Salonte v,
GOA, et et., 2014)
Kinds of delay
1. Mora solvendl - delay or default committed
by obliger
2. Mora acclpiendl - delay or default
committed by obligee
3. Compensatio Morae - default of both
obliger and obligee (Jurado, Comments and
Jurisprudence on Obligations ahd Contracts,
57, 2010)
•
4. Contravention of the tenor of the
obligation ·
This refers to failure to comply with the terms of
the obligation, and will require dolo, culpa or
delay as the cause of the failure to comply, in
order to constitute a breach. (Art. 1170; Jurado,
Comments and Jurisprudence on Obligations
and Contracts, 74, 2010)
E. DEFENSE AGAINST BREACH~
FORTUITOUS EVENTS
Requisites of Fortuitous Events (NIIU)
1. Event must be [ndependent of obligor's will;
2. Event is Unforeseeable or unavoidable
3. Such event' renders it [mpossible for the
debtor to perform (not only makes it difficult,
but impossible)
4. t:!_o contributory negligence (Lasam v. Smith,
G.R. No. L-19495, 1924)
'. .
General rule: Loss 'due to fortuitous events sh~II
extinguish the obliga:tion (Art. 1174)
·;
· Exceptions: (SAL TD) .
i. If by haw the obligor is liable even for
fortuitous event
ii. If by §.tipulation the obliger is liable even for ·
fortuitous event
iii. If the nature of the obligation requires the
,Assumption of the risk (Art. 1174)
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o iv. If the loss of the thing occurs after the
o obligor incurred in .Q.elay; and
v. If the obliger promised to deliver the same
f) thing to Iwo or more persons who do not
have the same interest (Art. 1165)
.r-· .. 1
'._ }
Declaration of martial law, per se, is not a
fortuitous event. While a lot of businesses
f) suffered financial reverses during this period, it
could not be used as a defense when sued for ·
collection of debts validly incurred. (Philippine
Free Press v. CA, G.R. No. 132864, 2005)
The Asian Debt Crisis in 1997 Is not a fortuitous
event. A real estate company· engaged in pre-
selling of condominium units should have been
,... \ able to assess foreign exchange risks. The
fluctuating movement of the Philippine Peso in
the FX market is a daily occurrence, so
~' .. . Megaworld cannot claim fortuitous events as an
excuse for non-delivery of units. (Megaworld
,· .
Globus Asia Inc. v. Tanseco, G.R. No. 181206,
2009)
The Christmas season cannot be cited as an act
of God that would excuse a delay in the
processing of claims by a governrnent entity that
is subject to routine accounting and auditing
rules. (MIAA v. ALA Industries Corp, G.R. No.
147349, 2004)
The sudden act of a passenger who stabbed
another passenger in the bus is within the
context of force majeure. But before common
carrier may be absolved, it is not enough that the
accident was caused by force majeure. The
common carrier must still prove that it was not
negligent in causing injuries. (Bachelor Express,
f' \
Inc. v. CA, G.R. No. 85691, 1990)
·). . . i
If obligation is to deliver materials for a fixed
period such as 30 years, fortuitous events
occurring within the period, such as the outbseak
of war which took 6 years out of the 30-year
period and destroyed plants, machinery and
..
,,, -,. equipment and prevented the obligor from
making deliveries, the occurrence of such a
fortuitous event will not extend the period of the
contract beyond its fixed period. This is because
the obligor was excused from performance
during the period when the fortuitous events
prevented it from performing its obligations.
,, ..
y . (Viclorias Planters Associetion v. Victorias
·~ Milling, G.R. No. 6648, 1955)
,_.
,( l:
I ( l
•\
\.,,/,
CIVIL LAW.
A person obliged to perform an obligation is
NOT excused from a fortuitous event when the
nature of the obligation requires the assumption
of risk. In other words, it is NOT enough that the
event should not be foreseen or anticipated, but
It rnust be one that is impossible to foresee or to
avoid. (Republic v. Luzon Stevedoring, G.R. No.
21749, 1967)
F. REMEDIES FOR BREACH OF
OBLIGATIONS.
1. Specific Performance - requiring delivery
or performance of the obligation.
• Can be combined with damages, but
inconsistent with the · remedy of
resolution or cancellation. (Magdalena
Estate, Inc. v. Myrick, G.R. No. 47774,
1941)
• Can be pursued successively (but not
simultaneously) with resolution or
cenceilatlon: if initial action is for specific
performance and obligor does not or
cannot . deliver, courts have allowed·
obligee, to pursue resolution or
cancellation. (Art. 1191)
• This is NOT a remedy in an obligation
"Not to do" that has been breached
since the prohibited act has been done.
(De Leon,\( Comments and Cases on -
Obligations~andContracts, 44, 2014)
i'
2. Damages - can be combined with any
remedy or pursued Independently - also
available in breach of any prestation. (Art.
1191)
3. Substitute performance - ask others to
perform and charge the cost to the obligor
(Arts. 1165-1168)
• Not available in; •
a. Obligation to give specific things
(already set apart from class or
genus to which , it belongs); (Art.
1165)
b. Obligations not to do; (Art. 1168)
and .
c. Obligations to do which are purely
personal in character. (Tolentino,
Commentaries and Jurisprudence
on the Civil Code of the Philippines,
Vol. 4, 99-100, 1991)
4. Resolution/Cancellation implied in
reciprocal 6bligations, but not available If
the breach Is slight, unless time Is of the
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ess~nce. (Biando v. Embestro, G.R. No. L-
11919, 1959) If breach Is only slight,
generally courts will grant additional time for
the obliger to pay or perform and after this
additional tirne, if obliger still does not
perform, courts will allow resolution or
cancellation. (Art. 1191; Kapisanan
Banahaw v. Dejarme, G.R. No. L-32908,
1930)
Remady Specific only to Obllgatlons Not to
Do: to compel that the act in violation of the
obligation to be undone if possible and if not,
only damages may be pursued. (Art. 1168)
Similarity and distinction between
Resolution/Cancellation In Art. 1191 and
Rescission In Art. 1383·84
Similarity: Both apply to valid contracts (Cannot
cancel/rescind invalid contracts, because there
is nothing to cancel or rescind). Both also
require mutual restitution. (Paras, Civil Code of
the Philippines Annotated: Prescription;
Obligations and Contracts, 735, 2014)
Mutual restitution is required in cases of
resolution/cancellation under Art. 1191 so as to
bring the parties back to their original
situation, prior to the inception of the contract.
(Forest Hifls Golf & Country Club v. Vertex Sales
and Tradinginc., G.R. No. 202205, 2013)
Distinction: (Suria v. /AC, G.R. No. 73893,
1987)
• Resolution or cancellation In Art. 1191 is
predicated on breach, and not on injury
to economic Interests of a party, that
violates the reciprocity between the
parties.
• It is a principal and not a subsidiary
action. Resolution or cancellation is a
principal action retaliatory in character,. it
being unjust that a party be held bound
to fulfill his promises when the other
violates his. On the contrary, the true
rescission under Arts. 1383 and 1384 is
predicated on lesion or economic
prejudice,· and the cause of action . is
. subordinated to the existence of that
prejudice. Hence, where the defendant
makes good the damages caused, the
action cannot be maintained or
continued, as expressly provided in
Articles 1383 and 1384.
CIVIL LAW
• The operation t>f Arts.1383 and 1384 is
limited to the cases of rescission for
lesion enumerated In Article 1381 of the
Civil Code of the Philippines and does
not apply to cases under Article 1191.
Art. 1191 does. not apply to a Contract to Sell
where the condltfon is breached. Payment is the
condition in a Contract to Sell and if full payment
is not made, it is breach of the condition. Art.
1191 refers to an existing obligation and
what 15 breached Is the obligation, not the
condition. (Rivera v. Def Rosario, G.R. No.
144934, 2004) It does not apply in a Contract to
Sell since the breach contemplated in that Art.
1191 is the obliger's failure to comply with an
existing obligation. It does not apply in the
failure of a condition to make the obligation
arise. (Reyes v. Tuparan, G.R. No. 188064,
2011)
While the right to resolve/cancel reciprocal
obligations is irnplied, that is, such right need not
be expressly p~ovided in a contract,
nevertheless, the contracting parties may waive
such right. (F.F. '! Cruz & Co. Inc. v. HR
Construction Corp.,-'G.R. No. 187521, 2014)
' •
The party entitled to rescind (resolution} should ·
apply to the court for a decree of rescission. The
right cannot be exercised solely on a party's own
judgment that the other committed a breach of
the obligation. The operative act, which
produces the resolution of the contract, 11 the
decree of the court and not the mere act of th&
vendor. (Eds Manufacturing, Inc. v. Health
Check International, lnc., G.R. No. 162802,
2013)
The difference between Resolution/ Cancellation
under Art. 1191 and Rescission under Art. 1383
is that Art. 1191 applles only to reciprocal
obligations, i.e., those that arise from the same
cause, and which each party is a debtor and
creditor of each 'other. Performance by one is a
condition to performance by the other party. If
one party is unable to perform his obligation, ,the
other can ask for resolution as a remedy for. the
breach. Since this is based on breach of
contract, it is a principal action. On the other
hand, Art. 1383 is a subsidiary action which is
based on lesion or fraud of creditors. Both Arts.
1191 and 1383 however refer to valid contracts
and require mutual restitution. Art. 1385
requiring mutual restitution also applies to
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contracts resolved under Art. · 1191. (We/lex
Group v. U·Land Airlines, 2015)
But See: "Rescission under Article 1191 takes
place through either of two modes: (1) through
an extrajudicial declaration of rescission; or (2)
(') upon the grar,t of a judicial decree of rescission."
Extrajudicial declaration of rescission is
recognized as a power which does not require
judicial intervention. If the rescission is not
opposed, extrajudicial declaration of rescission
produces legal effect such that the Injured party
is already relieved from perfprming the
undertaking. (Sangguniang Panlungsod ng
Baguio City v. Jadewe/1, G.R. No. 160025, 2014)
t- ';
A party may not extrajudlclally rescind a
contract without a specific stipulation In the
contract authorizing extrajudlclal rescission.
'·
The party needs to file an action for rescission
under Art. 1191. (Eds Manufacturing, v.
Healthcheck International, Inc., 2013)
.F>o.
l .. I into:
However, the power of declaring extrajudicial
rescission conferred upon the injured party is
regulated by the Civil Code. If the extraj~dicial
rescission is Impugned by the other party, it shall
be subject to a judicial determination where
court action must be taken, and the function of
.,r···l
<
the court is to declare the rescission as having
been properly or improperly made, or to. give a
period within which the debtor must perform the
obligation alleged to be breached. A unilateral
cancellation of a contract may be questioned in
courts by the affected party to determine
whether or not cancellation is warranted. Thus,
in an extrajudicial decree of rescission,
revocation cannot be completely exercised
solely on a party's own judgment that the other
has committed a breach of the obligation but
always subject to the right of the other party_ to
judicially impugn such decision." (Sangguman
f • Pan/ungsod ng Baguio City v. Jadewe/1, G.R.
Nos. 1600025, etc., 2014)
;{. ,:
{ -,
·0· '
----------------------------------
CIVIL LAW
4. KINDS
A. PURE AND CONDITIONAL
Pure Obllgatlons • It Is an unquellfled
obligation, which Is dernandable immediately. Its
performance does NOT depend upon a future
and uncertain event, or past event unknown to
the parties. (Art. 1119)
J~ •
Conditlonal Obllg~tlons - The performance in
conditional obligatipns depends upon a ~
ANO uncertain event or upon a past event
unknown to the parties. (De Leon, Comments
and Cases on Obligations and Contracts, 106,
2014)
Note: The "and" must be really construed as
"or". (Toleritlno, Commenter/es and
Jurisprudence on the Civil Code of the
Philippines, 144, 1991)
Conditional Obligations may be further classified
1. Suspensive or resolutory
2. Potestative
3. Casual (based upon chance or will of
3rd parties)
4. mixed (combination of will of one of the
parties + chance and/or will of 3rd
persons)
(Jurado, Comments and Jurisprudence on
Obligations and Contracts, 110, 2010)
,
Note: All combinations are valid, EXCEPT only
those conditional obligations which are
suspensive and dependent solely on the will of
the debtor.
Thus: suspensive condition + purely potestative
on debtor = both condition and obligation void.
Hence, there is no obligation.
A provision in a :Conditional Deed of Sale stating
that the vendee shall pay the balance of the
purchase price when he has successfully
negotiated and secured a right of way is _not a •
purely potestative condition on the perfection of
the contract nor on the validity of the entire.
contract or its compliance as contemplated by
Art. 1308. Such' i a condition is likewise
dependent on chance as there Is no guarantee
that the vendee and the third-party landowners
would come to an agreement regarding the road
right of way, a type of mixed condition expressly
allowed under Art. i1182. Where the so-cafled
potestative condition is imposed not on the birth
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of the obligation but on its fulfillment, only the Obligations i§Jnd Contracts, 109 & 111-
condition is avoided, leaving unaffected the 112, 2014) \
obligation itself. (Catungal v. Rodriguez, GR No.
146839 2011) Note: In case ofi reciprocal obligations, the
obligation of one is 'a resolutory condition of the
1. Suspensive condition obligation of the other, the non-fulfillment of
• The happening of the condition creates which entitles the other party to resolve or
the obligation. cancel the contract. (De Leon, Comments. and
• Not demandable at once Cases on Obligations and Contracts, 53, 2014)
• Gives rise to the periormance of an
obligation (ex. Contract to Sell) 3. Potestative condition
• Also known as "condition precedent" • The fulfillment of the condition entirely
• Gives birth to obligations (De Leon, depends upon the sole will of a party -
Comments and Cases on Obligations may be purely potestative on the part of
and Contracts, 106-107 & 111-112, 2014) the obligee (valid), or the obligor/ debtor
(void if suspensive). (Paras, Civil Code
Rule on fruits in suspensive condition: of the Philippines Annotated:
(a) When the obligation imposes reciprocal Prescription; Obligations and Contracts,
prestations, the fruits and interests 201, 2016).
during the pendency of the suspensive
condition shall be deemed to have been Effect of illegal, immoral or impossible
mutually compensated. condition:
(b) If the obligation is unilateral, the debtor TO GIVE. I · TO DO I NOT TO GIVE I NOT
or obligor shall fil!P.ropriate the fruits and ·soMETHING .: TO DO SOMETHING
interests received, unless from the Both condition and Condition considered
nature and circumstances of the obligation are void, not written, hence, the
obligation it should be inferred that the hence, there is no obligation is valid -
intention of the person constituting obligation. the condition is merely •
the same is different. superfluous.
(c) In suspensive conditions, the effect ®f a Exception: In (Pineda, . Obligstlon$
conditional obllgation "to give" retroacts gratuitous obiigations, end Contracts, 92,
to the day of the constitution of the Illegal conditions are 2009)
obligation (Art. 1187) considered as not
written, hence :
Note: Doctrine (jf constructive fulflllment - condition Is deemed
Condition shall be deemed fulfilled when the not written and the
obliger voluntarily prevents fulfillment. (Art. obligation is valid
1186) (becomes a pure
• REQUSITES: obligation). (De Leon,
o Condition Is suspensive Comments and Cases
o Obligor prevents fulfillment of on Obligationsand /
condition Contracts, 135, 2014
o Obliger acts voluntarily

2. Resolutory condition
• Demandable at once
• Once the condltlon is established or
acknowledged,. the right to demand
performance immediately exists and
therefore the obligation can be
demanded at once.
• It is also known as "condition
subsequent"
• The happening of the condition has the
effact of extinguishing an obligation. (De
Leon, Comments and Cases on
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Condition coupled with a Term: Otherwise, Difference betweeh suspensive or resolutory

generally, must wait for the condition to be condition and term
fulfilled, until It becomes certain that condition CONDITION TERM·
,. \ cannot be fulfilled (parties are released). or may Suspensive It may or may Jt is certain
': .I be deemed fulfilled at such time as the parties not happen, that it will
contemplated, bearing in mind the nature of the hence happen; just
obligation. (Art. 1185) uncertain uncertain as
whether there to when It will
POSITIVE NEGATIVE ls an happen.
Condition obligation.
Condition must
be fulfilled
should NOT Resolutory It is not certain ltis certain
Rule happen before if the obligation that it will
before
stipulated will terminate terminate at a
stipulated term
term at all future time.
Effect if The parties Retroactivfty Once fulfilled, There is no
Condition is are released it will retroact retroactivlty.
Obligation
fulfilled as of the date to date the because there
arises from
before of the ,obligation was Is already an
fulfillment
.
.,-
-.i..•• •
arrival of the
term
happening of
the condition
entered Into
(Note: if it is
obligation from
the time the
,. ' Parties are 'an obligation to parties enter
released as of do or not to do, in the
arrival of the courts will obligation,
r--
:, )
.. term determine except only in
""(,,,
Effect if
refroactivity)
,, prescription
,.,..... Condition Is The obligation
But Parties .! (where
not fulfilled arises from
may be EXCEPT: prescriptive
before the the time the
released even (i) fruits (Art. period Is
atrlval of the term arrlves.
tern;
before arrival If 118,7· when counted from
..;''')
it becomes the obligation arrival of the
·.·_j Indubitable that to deliver term- i.e.,
the condition
. arises), (ii) when the
will not hanoen prescri 12tion action could
(from have been
B. OBLIGATIONS WITH A PERIOD fulfillment of brought).
condition -
rr....-,- ,,'•i • Obligations which are demandable on a "day when action
certain" . could have
• "Day certain" refers to either: been brought)
(a) A future AND certain event; or (De Leon, Comments and Cases on Obligations
(b) A past event unknown to the parties; or is and Contracts, 191, 2010).
(c) Payable when able, or when debtor
promises to pay when "his means permit Effects before the happening/ arrival of
-: :
~. him to do so" - period is to be fixed by condition/ term
,::_,'
the court, taking into account intention of • Obligee: May file Protective Action only,
,r ) the parties (Pineda, Obligations and such as asking for security or requiring •
\!...,....'
Contracts, 129, 2009) escrow of the object since there Is no right
or obligation yet at this time.
May also be further classified into: • Obligor: No obligation to deliver. or perform
(a) Suspensive - obligation is suspended until yet at this time.
arrival of the period; or
(b) Resolutory - obligation is immediate but Note: In an obligation to give specific things,
terminates upon arrival of the period. these are the effect of loss, impairment or
(De Leon, Comments and Cases on improvement of the specific thing which is the
,, ~.
\: Obligations and Contracts, 194, 2014.) object of the obligation:
,.!

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CAUSE LOSS IMPAJRMENT . IMPROVEMENT

Obligor's Fault Obligor to pay Obligee may choose
Obliger has usufructuary rights
damages resolution oronly- i.e., can use it but is not
fulfillment. with
. entitled to payment, and can
damages remove it only if it will not cause
damaqe
Obligee's Fault Obliger released Deliver in its impaired ' Obliger without right to payment
state of improvement
Nature! Obliger released Borne by the obligee; Inures to the benefit of the
Fortuitous Events cannot ask for obligee
damages or refuse to
. accept impaired
object : i
(Art. 1189; De Leon, Comments and Cases on Obfiyations and Contracts, 13.5-137, 2014)
i~:
1
\'
The same effect applies if the resolutory totally lost i (due to fault of debtor or
condition happens and the party obliged cannot fortuitous events).
return the object or is improved for the same Unless: Debtor provides another security of
above reasons. equal value;
(d) Yiolatlon of any undertaking on the basis
Benefit of the period of which, period is granted;
• Significance of Period: (e) Debtor Attempts to abscond (mere
(a) Obligor cannot be compelled to pay or attempt sufficient, because if actual
perform before the arrival of the period abscondment is to be awaited, creditor
(b) Obligee cannot compel payment or can no longer collect; and •
performance (f} With an Acceleration clause stipulation
Both are subject to the right of each part)! to • Applies to obligations _payable ic
waive - even if the obligor is willing to pay • installments or based on amortization
interest for the remainder of the period. (Jurado, schedule, where stipulation says that
· Comments and Jurisprudence on Obligations failure to pay one or some installments
and Contracts, 152-153, 201 O} or amortizations wlll entitle creditor to
• Presumption: for the benefit of both parties accelerate payment - i.e., to call for
(Art. 1196; De Leon, Comments and Cases the payment on the entire remaining
on Obligationsand Contracts, 197, 2014) unpaid obligation. (Art. 1198)
• It can be given to either party:
(a) To the Debtor or Obliger: By law or by When courts may fix period (ID-JBL)
stipulation (e.g., payable on or before) (a) If the obligation does NOT fix a period, but·
(b) To the Creditor or Obligee: Only by from its nature and circumstances it can be
Stipulation (Jurado, Comments and [nlerred that, a period was intended by the
Jurisprudence on Obligations and parties (Art. 1197)
Contracts, 152-153, 2010) (b) If the duration of the period Qepends upon
• Debtor/obligor may lose the benefit of the the will of the debtor (Art. 1197)
period (therefore may be compelled to pay (c) In case of reciprocal obligations, when there
immediately) in the following cases (FAt- is a Just cause for fixing a period (Art. 1191)
VISA): (d) If the debtor' §.inds himself when his means
(a) Debtor becomes Insolvent (when his permit him to. do so (Art. 1180)
assets are Jess than his liabilities) (e) If no period 'for the !:ease has been set,
Exception: When he gives security for the applicable in specific cases depending on
obligation the length ,of the lessee's stay in the
(b) ,Eailure to create or establish the security premises (Art. 1687)
promised;
{c) When .§.ecurity established but is later
impaired (through fault of debtor) or

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!]
Note: Art. 1197 Is only applicable when there Is consent. Once choice J is made and
('·) absence of any period fixed by the parties. It communicated, It /becomes irrevocable, and
'·
requires that period cannot be set arbitrarily by the converted to a 'simple obligation. {Jurado,
r·· courts. Comments and JiJrisprudence on Obligations
l )
• 2-step process to determine if the Court and Contracts, 169, 2010)
may fix the period
o Determine that the obligation does If the party who has the right to make the choice
not fix a period (or that period is does not make it or delays, the right does not
< ! made to depend upon will of pass to the other party - action is specific
debtor) but from the nature and performance to compel delivery of ANY
rr.
~,.. ; circumstances, It can be inferred prestation. (Pineda, Obligations and Contracts,
that a period was intended 146-147, 2009.)
o Decide what period was probably Note: When only one object or prestatlon Is left,
contemplated by the parties. it becomes a tacit choice. The obligation
,'. (Gregorio Araneta, Inc. v. The Philippine Sugar becomes a simple obligation. (Art. 1202)
Estates Dev. Co., G.R. No. L-22558, 1967)
Effect of loss I impossibility of one, some or all
,'..,.. prestations
C. ALTERNATIVE OBLIGATIONS
r
~ ..
I
Alternative obllgatlons

Initially, the obligation is indeterminate and Debtor's Exercise of the Creditor is

becomes determinate upon making of choice Act right of choice, entitled to
and notification. (De Leon, Comments and creditor may damages
""""
t
''-
;

Cases on Obligations and Contracts, 217, 2014) choose from based on value
remaining of the last one
General Rule: The right to make a choice is lost
with the debtor/obligor, subject to the rule that Creditor's Debtor can Debtor is
he cannot choose the impossible, unlawful or Act choose (a) entitled to
could not have been the object of the obligation. deliver object resolution or
(De Leon, Comments and Cases on Obligations from remaining cancellation
and Contracts, 218, 2014) · or (b) resolution plus damages
or cancellation
Exception: By contrary stipulation, the right to with dama es
make a choice may be given to the Fortuitous Debtor may Obligation is
creditor/obligee or to a 3'd person, subject also Event choose from extinguished
l' to the rule that he CANNOT choose the: remaining
;
·,: .. • Impossible objects; and if
• Unlawful only 1 left - it
• Could not have been the object of the becomes a
obligation. (De Leon, Comments and simpl~
Cases on Obligations and Contracts, obli ation
218, 2010) (Jurado, Comments and Jurisprudence on
Obligations and Contreas, 172-173, 2010)
When Choice is Effective - from notification.
Note: As long as one choice is left, it becomes a
•
(a) Debtor's Choice: upon notice to creditor
(b) Creditor's Choice: upon notice to debtor simple obligation and if the last object is lost due
(c) 31d Person's Choice: upon. notice to both to .fortuitous events, the obligation is
debtor and creditor (Art. 1200; De · Leon, extinguished. (De Leon, Comments and Cases
Comments and Cases on Obligations and on Obligations and Contracts, 221-222, 2014)
Contracts, 118, 2010)
,{) Note: There is no form required for the notice.
\:.. Ji

It may be oral or written, express or implied (as

when debtor delivers one of the choices and
creditor accepts). Mere notice is required, not
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• In a joint obligation, each of the joint debtors

is only responsible for his/her own share and
Debtor's Creditor may Creditor each cannot be made to pay for the share of
Act choose from entitled to others, even those who are insolvent or who
remainihg, or damages have died; joint creditors cannot collect the
the price of any based on share of the others. (Arts. 1207 & 1209)
object destroyed value of any of • In a sotidary obligation, the solldary debtors
by the debtor, the objects can be made to pay the full amount of the
with dama es lost obligation (subject to presentation of
Creditor's Exercise of the Obligation is available defenses); solidary creditors can
Act right of choice- extinguished collect the full amount of the obligation. (Art.
creditor may 1216)
choose the from • Among solidary debtors and creditors, one
remaining who pays or receives the full amount of the
oblects obligation can recover from or deliver the
Fortuitous Creditor to Obligation is share of others. (Arts. 1214 &1217)
Event choose from extinguished
remaining; If 1. JOINT (DIVISIBLE) OBLIGATION
only 1 left-
becomes a Joint obligation (Obligacion Mancumunada)
simple - The whole obligation is to be paid or fulfilled
obli ation proportionately by different debtors or demanded
(Jurado, Comments and Jurisprudence on proportionately by the different creditors.
Obligations and Contracts, 168, 2010)
General rule: The presumption is that an
• In alternative obligations, various things are obligation is always joint. (Art. 1207)
•
due but the delivery or performance of one will
extinguish the obligation. (De ,Leon, Exceptions: (FLENT)
Comments and Cases on Obligations and • i. When the obligation .!;_xpressly stipulates
Contracts, 217, 2010) solidarity; ::
• If one of the prestations is illegal, others may ii. When the _baw requires solidarity;
be valid but obligations remains. (Pineda, iii. When the !:fatu,r.e of the obligation requires
Obligations and Contracts, 147, 2009) solidarity; ')..'
• If It Is Impossible to give all except one, the iv. When a charge or condition 111 Imposed upon
last one must still be given. (Tolentino, heirs or legatees and the !estament
Commentaries and Jurisprudence on the Civil expressly makes the charge or condition in
Code of the Philippines, 209, 1991) solldurn (Manresa); and
• The right to choose may be given either to the v. When a solfdary responsibility Is Imputed by·
debtor or creditor. (Jurado, Comments and a final judgment upon several defendants.
Jurisprudence on Obligations and Contracts, (Gutierrez v. Gutierrez, G.R. No. 34840,
168, 2010) 1931)

D. JOINT AND SOLIDARY OBLIGATIONS Effects of joint liability

• Involves multiple parties (more than one
debtor or more than one creditor or more
than 1 debtors and creditors).
• The liability or rights of parties may be joint
or solldsry. It is presumed joint. Solidary
obligation requires either stipulation or law to
create the solidary liability/right. (Art. 1207)
• In a joint obligation/credit, just divide the
obligation/credit into as many numbers of
debtors and creditors to get the sharing,
unless sharing was stipulated (sharing is
presumed equal). (Art. 1208)
1. Demand on one produces delay only with
respect to the debt of the debtor against
whom a demand is made.
2. Interruption in payment by one does not
benefit or prejudice the other.
3. Each debtor can be held liable only for the·
payment of his proportionate share of the
debt. ·
4. A joint debtor cannot be compelled to
answer for the acts or liability of the other
debtors.
5. Vice of one debtor to creditor has no effect
on the others.
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r.
t-, ,
6. Insolvency or death of one debtor does NOT 3. SOLIDARY OBLIGATIONS
affect other debtors.
Solldary obligation (Obllgaclon Solldarla) -
Effects of joint credit must be exp~essed in stipulation or provided by
C) 1. Each creditor can demand for the payment law or by nature of obllgation. Otherwise, It wlll
{~. . . ) only of his proportionate share of the credit. be considered. a joint obligation/credit. (Art.
2. A joint creditor cannot act in representation 1207)
of the other creditors.
<'>
'{._ Words denoting solidarity include "jointly and
NOTE: Unless there is no specification as to severally" (most common); "individually and
f'J' their proportionate share in the credit or in the collectively"; "severally"; "individually";
'· debt, the creditors and debtors in· a joint "collectively"; "separately"; "distinctively",
obligation shall be entitled or· shall make "individually liable" and "individually and jointly".
payment in equal proportion. (Ronquillo v. Court of Appeals, G.R. No. 55138,
1984) ...
,l'1
2. JOINT (INDIVISIBLE) OBLIGATION
Also, use of pronoun "I" in a promissory note
• If there are 2 or more debtors, the fulfillment where several debtors sign denotes solidarity.
of or compliance with the obligation requires (Pineda, Obligatioris and Contracts, 163-164,
the concurrence of all the debtors, although 2009)
each for his own share. (Art. 120!J) The
obligation can be enforced only by If a solidary debtor pays the obligation in part
proceeding against all of the debtors. and is issued a quitclaim, he can recover
• If there are 2 or more creditors, the reimbursement from the co-debtor only insofar
concurrence or collective act of all the as his payment exceeded his share in the total
r: creditors, although each for his own share, is obligation. If the debtor pays less than his share,
t .... • he cannot demand reimbursement because his
also necessary for the enforcement of the
obligation (Art. 1209) payment is less than his actual debt. (Republic
Glass Corp. v. Qua, G.R. No. 144413, 2004)
.vv , The Court pointed out that there's a loan
<. .i partnership, which means that there should be Kinds of solidary obligations
an inclined sharing of losses. However· in the (a) Active Solidarity
JVA, there was an agreement that all cash (b) Passive Solidarity
should be paid by X; SC held that you should (c) Mixed Solidarity
apply the rules on partnership rather than the JV (d) Conventional Solidarity
contract. (Marsman v. Philippine Geonaly/ics, (e) Legal Solidarity (De Leon, Comments and
G.R. No. 183374, 2010) Cases on Obligations and Contracts, 217-
219, 2010)
Effect of breach
If one of the joint debtors fails to comply with his 1. Active Solidarity - solidarity on the part of
undertaking, the obligation can no longer be creditor or obligee
fulfilled or performed. Consequently, it is
converted into one of indemnity for damages. (a) Each creditor represents the other in the act
( I
Innocent joint debtor shall not contribute to the of recovery of payment. (Do Leon,
indemnity beyond their corresponding share of Comments and Cases on Obligations and
the obligation. (Art. 1224) Contracts, 218, 2010) •
(b) Credit is divided equally between creditors
,,., ' · INDMSIBILITY SOLIDARITY as among themselves.
'•.;,· ... Refers to the Refers to the legal tie (c) Debtor may pay any of the sofidary
prestation which and consequently to creditors. (Art. 1214)
constitutes the object the subjects or parties (d) Any creditor can collect full amount of
of the oblloation of the obticatlon obligation. Unless there is an agreement as
Plurality of subjects Is Plurality of subjects is to which creditor can collect. Debtor must
NOT required indisoensable pay to the creditor who first makes a
(De Leon, Comments and Cases on Obligations demand. There is a case of improper
and Contracts, 225, 2010) payment if thei debtor pays to another
j:
f .
·) '
~:.....I ;) Page 175 of 432
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creditor who did not make a demand; he can
be made to pay again to the creditor who
made the demand. (Art. 1214)
(e) After a solidary creditor collects the full
amount, all debtors are released from the
obligation. The creditor who received
payment must then deliver the shares of the
other solidary creditors (presumed equal
unless amount indicated). (Art. 1215;
Tolentino, Commentaries and Jurisprudence
on the Civil Code, 228, 1991)
Effect if one of solldary creditor dies: Share is
transmitted to heirs (but collectively)
Although the Rules of Court mandate that in
case of death of a respondent, the claims should
be filed in the settlement of estate, the court said
that's a procedural rule and the rule of the Civil
Code on solidary liability should prevail -- in
which case, creditor can choose who to sue.
(Boston v. CA, G.R. No. 173946, 2013).
2. Passive Solidarity - solidarity on the part of
debtors or obligors
(a) Any debtor can be made to pay the full
amount of the obligation with the right to
recover from co-debtors. (Art. 1216) •
(b) The right to make a choice of who among
the debtors the creditor will proceed against,
lies on the creditor.
An accommodation party under the law is
solidarily liable based on the Negotiable
Instruments Law. (Gonzales v. PCIB, G.R. No.
180257, 2011)
Effect of demand oh one solidary debtor: It
will not stop the creditor from going against
another debtor as long as the debt has not yet
been paid In full. (Art. 1216)
Effect if one of solldary debtor dies: creditor
is not bound to make a claim on the estate of the
deceased debtor within 2-year period under the
Rules of Court since creditor may choose any of
the living debtors, in which case the 2-year
period does not apply.
Effect if several solidary debtors offer to pay:
creditor can choose from anyone or all of them,
as long as he does not collect more than the full
amount of the obligation.
Effect of Prescription: interruption of
prescription to one creditor affects all creditors.
CIVIL LAW
(Tolentino, Commentaries and Jurisprudence on
the Civil Code, 229, 1991)
Effect of Delay: interests from delay on one
debtor is borne · by all debtors. (Tolentino,
Commentaries and: Jurisprudence on the Civil
Code, 229, 1991) :(
-~
Defenses ·- a solldary debtor when sued can
raise the ff. defenses:
(a) From the nature of obligation - e.g. the
obligation is void, has prescribed, or has
already been paid -· the defense is
complete: debtor sued is not liable, and no
one is liable;
(b) Personal to him - may be: (i) complete
(debtor sued is not liable, but others may
be sued and the amount that may be
collected should be less than the share of
the debtor with a personal defense) e.g.,
minority, vitiated consent: or (ii) partial
e.g., non arrival of term or condition -·
possible even if solidary-debtor sued is
liable for share of other.s, less his own
share) (Tolentino, Commentaries and
Jurisprudence on the Civil Code, 250-251, •
1991)
Once creditor is paid in full, the obligation is
extinguished, and the debtor who pays is entitled
to reimbursement from others, as if joint (based
on agreed sharing or if not, equal) (Art. 1217)
Difference from joint obligation: The share of
the insolvent debtor is assumed proportionately
by others, in the meantime.
Reimbursement includes interest from date of
payment until actual reimbursement, except if
solidary debtor pays before maturity - in which
case interest runs only from maturity.
3. Mixed Solidarity - on the part of the obligors
and obligees, or the part of the debtors and the
creditors (De Leon. · Comments and Cases on
Obligations and Contrects, 219, 2010)
•.,
li
4. Conventional Solidarity - agreed upon by
the parties (De Leon, Comments and Cases on
Obligations and Contracts, 219, 2010)
5. Legal Solidarity - imposed by law; instances:
(a) Obligations arising from tort
(b) Obligations arising from quasi-contracts
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(:
(c) Legal provisions regarding obligation of
devisees and legatees SOLIDARY DEBTOR I SURETY
(d) Liability of principals, accomplices, and With principal liability With subsidiary
accessories of a felony
() (e) Bailees in commodatum (De Leon,
liability: can be made
to pay only when
Comments and Cases on Obligations principal debtor does
and Contracts, 219-220, 2010) not pay
1(') Pays for full amount If he pays the full
·(_ _ Effects: and can seek amount, he may
• No reimbursement if payment is made after reimbursement from recover the FULL
() prescription or became illegal other solidary debtors amount from principal
• Payment made before debt is due: no debtors
interest can be charged except from maturity, Extension of time Extension of time
otherwise, interest can be charged from date granted to other granted to principal
,,,.....
xx. .; of payment solidary debtors w/o debtor w/o his consent
• Insolvency of one - others are liable for his consent does not releases him
share pro-rata release him
• If different terms and conditions - collect Can be made to pay Can bind himself for
only what is due, later on collect as and the full amount less than the full
when they become due or the conditions are amount of the
fulfilled obligation
(De Leon, Comments and Cases on Obltgatlons
• Remission made after payment is made - and Contracts, 222-223, 2010)
co-debtor still entitled to reimbursement (De
Leon, Comments and Cases on Obligations Effect of loss or impossibility of the
and Contracts, 238-239, 2010) prestation:
• Effect of Insolvency or death of co-debtor (a) If without fault - no liability
- still liable for whole amount (b) If with fault - there is liability (also for
• Fault of any debtor - everyone is damage and interest)
- responsible to the creditor - price, clamage (c) Loss due to fortuitous event after default - .
,'(

'
; and interest, but the debtor at fault should there is liability,(because of default) (Pineda, •
r:» reimburse those who paid the creditor (De ~ Obligations an4i Contracts, 189, 2009)
,: \ ~:
'I·,..:; Leon. Comments and Cases on Obligations
..~--~
'·t.;;J •
and Contracts, 240-241, 2010)
Complete/ personal defense - total or
As a rule, corporations are solely liable for their
obligations. The directors or trustees and officers
partial (up to amount of share only) if NOT are not liable with the corporation even if it is
(~) personal to him (Braganza v. Villa Abrille, through their acts that the corporation incurred
G.R. No. L-12471, 1959) the obligation. As an exception, directors or.
1('" .., trustees and corporate officers may be solidarily
:.:..1> liable with the corporation for corporate
/\ obligations if they acted "in bad faith or with
:;.. ..,:r gross negligence in directing the corporate
affairs." {Oliveras v. Castillo, G.R. No. 196251,
2014) •
Note: The law clearly provides that. the creditor
who may have executed any acts mentioned in
Art. 1215 (Novatlon, Compensation, Merger or
Confusion), as well as he or she who collects the
debts, shall be liable to the others for the share
iii the obligation corresponding to them. (De
Leon, Comments and Cases on Obligations and
Contracts, 231, 2010)

'~ '
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E. DIVISIBLE ANO INDIVISIBLE OBLIGATIONS ObllgaUon with a penal clause vs. Alternative
'.
Olvh;lbl& - An obligation that Is eapable of PENAL CLAUSE ALTERNATIVE
, , ' ' I '
partial performance. (Pineda, Obligations and I• OBLIGATION
Contracts, 192-193, 2009) Only 1 prestation Several prestations
i. Execution of certain number of days' work Impossibility of. Impossibility of 1
ii. Expressed by metrical units principal prestation does NOT
iii. Nature of obligation - susceptible of partial extinguishes penalty extinguish the obligation
fulfillment (De Leon, Comments and Cases Debtor may not Debtor may choose
on Obligations and Contracts, 250, 2010) choose between among the different
principal and prestations
Indivisible - One not capable of· partial penalty
performance. (Pineda, Obl1gat1onsand Contracts, 203, 2009)
i. To give definite things
ii. Not susceptible of partial performance
iii. Provided by law
iv. Intention of parties (De Leon, Comments
.
Obligation with a penal clause vs. Facultative

PENAL CLAUSE . FACULTATIVE

and Cases Oil Obligations and Contracts,
... · · OBL,IGATION
249, 2010)
Penalty of payment: Power to choose
in lieu of the ,, prestation is absolute
Notes:
principal must be i
• Divisibility or indivisibility of the obligation
expressly qranted
refers to the performance of the prestation
Creditor may Creditor may not
and not to the thing which is the object
demand both if demand both principal
thereof (De Leon, Comments and Cases on
expressly granted and substitute •
Obligations and Contracts, 249, 2010)
(Pineda, Obligations and Contracts, 203, 2009)
• Intention of parties should be taken into
account to determine whether obligatio'n is
Purpose
divlsible or not (De Leon, Comments and
1. Funcion coercitiva o de garantia - to insure
Cases on Obligations and Contracts, 244,
the performance of the obligation
2010)
2. · Funcion liquidatoria - to liquidate the
amount of damages to be awarded to the .
F. OBLIGATIONS WITH A PENAL CLAUSE
injured party in case of breach of the
. principal obligation (compensatory); and
One to which ari accessory undertaking is
3. Funcione strfctamente penal - in certain
attached for the purpose of insuring its
exceptional cases, to punish the obliger in.
performance by virtue of which the obliger is
case of breach of the principal obligation
bound to pay a stipulated indemnity or perform a
(punitive). (De Leon, Comments and Cases
stipulated prestation in case of breach. (De
Oil Obligatio?s and Contracts, 253, 2010)
Leon, Comments and Cases on Obligations and
Contracts, 252, 2010)
Characteristics'
1. Subsidiary -As a general rule, only penalty
Penal cause vs. Condition
I can be demanded, principal cannot be
'PENAL CLAUSE .CONDITION.
demanded, Except: Penalty is joint or
Serves as accessory NOT a separate
cumulative (Art. 1227), and in monetary
obligation obligation; part of
obligations where both principal and interest
principal
as a form of penalty may be collected. (De
Demandable in Never demandable Leon, Comments and Cases on Obligations
default
Obligation exists
--
No obligation until
and Contracts, 259-260, 2010)
suspensive condition 2. Exclusive - generally takes place of all
hapoens damages and Interests. (De Leon,
Depends on the non- Principal itself is Comments and Cases on Obligations and
performance of the dependent on an Contracts, 254, 2010)
principal obligation uncertain event
(Pineda, Obhgat,ons and Contracts, 203, 2009)
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Penalty as substitute for damages unconscionable, the courts may declare It illegal.
General rule: the penalty fixed by the parties ~?mpounded Interest of 5% monthly, being
takes the place of all damages and interests in tniqultous and unconscionable, is void and
case of breach. (Art. 1226) inexistent from the very beginning. Thus, the
legal rate of 6% per annum must be imposed in
Exceptions: (StiRF) lieu .of the excesstve interest agreed upon by the
l. When by filipulation of the parties, penalty, parties. (Benavidez v. Salvador, G.R. No.
IN ADDITION to interest, may be collected; 173331, 2013)
ii. When the debtor is sued for Refusal to pay
,r-,
the agreed penalty; and 4. EXTINGUIS~MENT OF
..... j iii. When debtor is guilty of f.raud. (Art. 1226) OBLIGATIONS
Double functions of penalty:
Principal Modes of Extlnguishment (PaL-
1. To provide for liquidated damages
CoCoCo-No)
,('; 2. To strengthen the coercive force of the
(a) ~mentor performance
obligation by the threat of greater
(b) boss of the thing due
responsibility in the event of breach (De
(c) Condonation or remission of debt
Leon, Comments and Cases on Obl/gations
(d) Confusionor.merger of rights
and Contracts, 258; 261-262, 2010)
(e) Compensation
(f) Novation (Art. 1231)
Kinds of penalties:
(a) Legal - constituted by law
Other modes of extinguishment
(b) Conventional - constituted by agreement
(a) Annulment
of the parties
· (b) Rescission
(c) Compensatory - established for the
(c) Fulfillment of resolutory condition
purpose of indemnifying the damages
(d) Prescription (Art. 1231)
suffered by the obligee or creditor in case
of breach of the obligation
Not stated In the Clvil Code:
(d) Punitive - established for the purpose of
i. Death of a party in personal obligations
punishing the obliger or debtor in case of
,.·.... ~ (Tolentino, Commentaries and Jurisprudence
() breach of the obligation
on the Civil Code, 271, 1991)
(e) Subsidiary or alternative- in case of non- -
ii. Mutual Desistance ($aura Import & Export
performance only the penalty is
Co. v. DBP, GR No. L-24968, 1972)
demand able
iii. Compromise (Art. 2028)
~·
'.t)
(f) Joint or cumulative - both the principal
iv. Impossibility of Fulfillment. (Art. 1184)
undertaking and the penalty may be
v. Happening of Fortuitous Event (Art. 1165)
demanded (De Leon, Comments and
vi. Arrival of Resolutory Period (Art. 1193)
Cases on Obligations and Contracts, 256,
i,.., 2010)
A. PAYMENT O.R PERFORMANCE
I '

Causes for reduction of penalty

The delivery of money or thing, or performance,
(a) Partial/irregular performance
in any manner of the obligation. (Art. 1232)
(b) Penalty provided is ·iniquitous/
unconscionable (Art. 1229) •
1. Principles applicable for valid payment or
performance ;1
Although parties may voluntarily agree on ·any
f. :
amount of interest, voluntariness does not make
• Identity n
the stipulation on interest valid. A 5% per month, • Integrity or completeness
1 -, . lndivlslblllty ([)~ Leon, · Comments and
·.~., or 60% per annum, rate of interest is Iniquitous,
and must be struck down. (Menchavez v. Cases on Obllgetions and Contracts, 300-
Bermudez. G.R. No. 185368, 2012) 301, 2014)

Parties have wide latitude to stipulate any rate of a. Principle of Identity

interest in view of BSP Circular 905, which
suspended the ceiling on interest effective Jan. i. With respect to the prestation or the
1, 1983. However, whenever interest is object - the same thing or the same ·

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prestation, in the manner agreed upon,
must be delivered or performed in order to
extinguish the obligation. The obligor
cannot compel the obligee to accept a
different thing or prestation, even if the
one offered is more valuable than the one
agreed upon. (Art. 1244)
ii. With respect to parties - must be made
by proper party to proper party
i. Payor- the one who delivers or
performs must be the debtor or anyone
interested in the fulfillment of the
obligation. Any other person requires
the creditor's consent (Art. 1236)
• When there is a 3rd person interested
in the fulfillment of the obligation -
creditor must accept the payment and
debtor need not give consent.
• When a 3rd person not interested in the
fulfillment of the obligation
pays/performs - creditor can refuse to
accept, but once accepted, the
obligation to the creditor is
extinguished. Note: There is • full
subrogation if the debtor consented to
the payment by the 3rd person (unless
he intended it to be a donation). In the
absence of consent by the debtor, the
3rd person is entitled only to
reimbursement of the payment made,
to the extent that the debtor has been
benefltted.
I. W/0 DEBTOR'S
CONSENT - Only the
cost which the third
person paid to creditor will
be the extent of third
person's right to collect.
ii. W/ CONSENT - third
person gets all rights
including right against
securities, collateral
guarantees, etc. (Arts.
1236-1238)
ii. Payee • creditor or obliqee at the time
payment is due (includes successor in
interest of transferee since credit is
generally assignable) (Art. 1240)
• if paid to a 3rd person - Payment is
valid only in any of the ff. cases:
CIVIL LAW
(a} Payment which redounded to the
benefit of the obllgee
Instances when the presumption that the
payment redounded to the benefit of the obligee:
After payment, 3'd person acquires the creditor's
rights (subrogation}
(1) Creditor ratifies payment to 3rd
person
(2) By creditor's conduct, debtor
has been led to believe that 3rd
person is authorized to receive
payment make the payment
' (estoppel) (Art. 1241)
(b} Payment to the possessor of the
credit, when made in good faith
(Art. 1242)
Requisites: (GP)
• Payment by debtor
must be made in Good
faith. -
• Creditor must be in
fossession of the credit
and NOT merely the
evidence of
indebtedness. •
Payment to an incapacitated person, valid if:.
• (KB)
1. Incapacitated person fiept the thing
delivered, or
2. Insofar as the payment has been .§.eneftcial
to him. (Art. 1241)
Where payment st,ould be made
(a) In the place designated in the obligation
(b} If there is no .express stipulation and the
undertaking Is t~ deliver a ~pacific thing - at·
the place where the thing' might be at the
moment the obligation was constituted
(c) In other case - in the place of the domicile
of the debtor (Art. 1251)
When to pay: Generally, upon demand. (See
previous discussions when demand is not
necessary)
b. Principle of integrity (Art. 1233)
·General rule: A debt s.h~II not be deemed paid
UNLESS the thing or service of which the
obligation consists has been completely
delivered or rendered, as the case maybe. (Art.
1233)
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Exceptions:
1. When the obligation has been substantially 2. Special rules on monetary obligations
performed in good faith (Art. 1234); (Loans and Forbearance of Money, Goods and
2. When the obligee accepts performance Credits)
despite its incompleteness or irregularity and • Forbearance of money, goods and is
,(;' without expressing any protest or correction. defined as "arrangements other than loan
"-,,
(Art. 1235). agreements where a person acquiesces to
the temporary use of his money, goods or
Substantial performance credits pending the happening of certain
-r-:
If the obligation has been substantially events or fulfillment of certain conditions."
t. ! performed in good faith, the obliger may (Estores v. Sapangan, G.R. No. 175139,
recover as though there had been a strict and 2012) .
complete fulfillment, less damages suffered by
the obligee. This is the basis of the rule that if (a) Payment must be in legal tender (Art.
the breach is only slight, the obligee cannot 1249)
resolve or cancel the obligation. Generally, the • Personal checks, Cashier's or Managers
courts will grant the obligor a certain time to checks are NOT legal tender, so creditor
make up for the slight breach. The "damages cannot be compelled to accept them (unless
suffered by the obligee" refers lo the deficiency such Is stipulated as the mode of payment) .
.r·· Which the obligee Is still entitled to collect. (Art. Creditor, however, has the option to accept
1234; Tolentino, Commentaries and payment In cHecks of any kind. If the
,··
' I Jurisprudence on the Civil Code of the creditor accepts the check or no prompt
Philippines,277, 1991) objection to the form of payment is made,
there is valid tender of payment and creditor
Substantial performance is applied only when can no longer claim later that payment is not
the obliger admits breaching the contract after in fegal tender. (Pabugais v. Sahijwani, G.R.
honestly and faithfully performing all the material No. 156846, 2004)
elements thereof except for some technical
aspects or deficiency that cause no .serious When payment in check is accepted, it
harm to the obligee. (International Hotel produces the effect of payment only when-
Corporation v. Joaquin Jr., G.R. No. 158361, , the check is cleared (retroacts to the date the
2013) check was deposited) and the funds are
transferred to the account of the creditor. Stale
· . ... Requisites of substantial performance checks (those not presented for payment within
(GoSTeM): 6 months from date of check) do not produce the
1. Attempt in Good faith to perform without effect of payment and debtor can be required to
willful or intentional departure issue a new check or pay in cash since the
2. Deviation is .§.fight obligation is not yet deemed paid. Debtor cannot
,- .I 3. Omission/Defect is Technical or unimportant however be liable for interest or penalty and
,;
\~.--·· 4. Must not be so Material that intention of cannot be declared in default since creditor
parties is not attained. (International Hotel could have immediately presented it for
. ' Corporation v. Joaquin Jr., G.R. No. 158361, payment. It is only in cases where the value is
··~~--~·
2013) impaired through creditor's fault (i.e., creditor •
r . misplaced the check and someone else
Acceptance by the obligee as full encashed it), that the debt<>r is deemed tq
• When the obligee accepts the performance, have paid his obllgatlon without having to
knowing its incompleteness or irregularity, issue a new check or 15aying in cash.
and WITHOUT expressing any protest or (l=vangelista v. Screenex, lnc., G.R. No. 211564,
objection, the obligation is deemed fully 2017)
complied with. This is because the obligee is
deemed to have waived his right to collect Payment in coins is legal tender only up
the deficiency. (Art. 1235) to a certain amount:
,c
·.:..,..../ • Unlike Art. 1234 where the obligee does not (a) for P1, 5 and 10 coins, only up to
give up his right to collect the balance, in Art. P1 ,000;
t 1235, the obligee waives his right to collect
Ii.:.......
such balance.
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IIr!
I (b) for P.01, .05, .10, and .25 coins,
f,
only up to P 100. (BSP Circular No.
! l 537)
• Payment In foreign currency is allowed, if
stipulated. The Uniform Currency Act
(1950) was expressly repealed by R.A. No.
i 8183 (effective July 5, 1996). Art. 1249
allowing stipulation of payment in foreign
currency has been restored. Agreements
with stipulation to pay foreign currency may
be discharged in Philippine Pesos at rate of
exchange at the time of payment. (Union
Bank v. Tui, G.R. No. 173090, 2011)
(b) Extraordinary Inflation or Deflation
In cases of extraordinary Inflation or defl8tlon1
the value of . tM currency . at. the time the
obligation was incurred should be the basis of
payment, unless there Is stipulation to the
contrary. (Art. 1250)
Inflation (or deflation) rates are determined by
economic managers (BSP specifically), but
whether extraordinary, this will require
judicial determination. The Court has ruled
that whoever alleges extraordinary inflation must
prove it - indicating that the courts will determine
based on evidence presented. (Citibank v.
Sabeniano, G.R. No. 156132, 2007)
Requisites for the application of Art. 1250 on
extraordinary inflation/deflation:
• There is an official declaration of
extraordinary inflation or deflation from
the BSP
• The obligation is contractual in nature
• The parties expressly agreed to
consider the effects of the extraordinary
inflation or deflation. (De Leon,
Comments and Cases on Obligations
and Contracts, 311, 2014; see Equitable
PC! Bank v. Sheung Ngor, G.R. No.
171545, 2007)
Note: Inflation or deflation is based on increase
or decrease of purchasing power and not based
on Peso-US Dollar exchange rate. (Singson v.
Caltex, G.R. No. 137798, 2000). The rate of .
inflation/deflation is measured by determining
rate of increase or decrease of purchasing
power from a prior period. It is determined by the
amount of basic goods (within a basket) that
money can buy, as compared to a prior period. If
money can buy P100 of basic goods at a certain
prior period, determine how much of the same
CIVIL LAW
goods can be purchased at a later period - this
represents the rate of inflation or deflation.
(Citibank v. Sabeniano. G.R. No. 156132, 2006)
Example: .
A loan of P100 was obtained in 2013, and
payable after one year. At the time the obligation
was incurred, the P100 proceeds of the loan
could purchase P100 worth of goods. In 2014
when the loan is due, P100 can purchase only%
of the goods it could purchase in 2013. Inflation
rate is therefore 100%.
If there is no declaration of extraordinary inflation
- Debtor must pay P100 in 2014.
If courts declue extrsordlnary Inflation - Debtor
must pay P1M in 2014 so that creditor will tiet
the same value Of his money in 2013 when he
lent the money.
(c) Payment of Interest
Note: In loan, ownership is. transferred to the
borrower. Creditor merely has the right to require •
return of the principal. (Art. 1953)
Rules on payment of interest
• For use of money, no default
i. Stipulation in ·writing is required - if
none, no interest is collectible (Art. 1956)
ii. With stipulation in writing, but the
interest rate is not stipulated - interest
is legal rate of 6% for loans and
forbearance of money (decrease from.
12% to 6% based on BSP Circular 799,
effective July 1, 2013). The legal rate of
interest now is the same for all
obligations, including judgment
obligations not arising from loans,
forbearance of money, goods or credits,
including those based on torts. (BSP
Circular 1;99)
Note: In the absence of an express stipulation
as to the rate of interest that would govem the
parties, the rate of legal interest for loans or
forbearance of any money, goods or credits and
the rate allowed in il;ldgments shall no longer be
twelve percent (12%} per annum but will now be
six percent (6%) p,er annum effective July 1,
2013. It should be boted, nonetheless, that the
new rate could only ~e applied prospectively and
not retroactively. Consequently, the twelve
percent (12%) per annum legal interest shall
Page 182 of 432
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apply only until June 30, 2013, Come July 1,
("'' 2013 the new rate of six percent (6%) per
'- )
annum shall be the prevailing rate of interest
.I {') when applicable. (Nacar v, Gallery Frames,·G.R,
• .
No. 189871, 2013; See also Lim v. HMRPI, G.R.
No. 201483, 2014)
iii. With stipulation In writing, and the rate
has been stipulated - collect the
,.("'"·,
stipulated rate of interest, subject to the
\ •. J right of the courts to reduce the rate if
unconscionable or iniquitous. (State
Investment House, Inc. v. Court of
Appeals, G.R. No. 112590, 2001)
n">.
'l !
• By way of penalty (debtor In default)
,. . The designation of the debt which payment shall
i. With penalty clause - substitutes
.·~ . ' payment of interest, except if it is clearly
l. stipulated that penalty is in addition to
interest. (Art. 1226)
ii. Without penalty clause (even if no
Interest is stipulated) - collect legal rate
of interest by way of penalty for default
(no more distinction, see above). Liability
arises only from default (unless demand
not necessary, from extraJudlclal or
''-· judiclal demand). (Eastern $.hipping
Lines, Inc. v. Court of Appeals, G.R. No.
,•
-t
's; '
I 97412, 1994)
NOTE: No penalty is collectible during grace
period because debtor is not in default if he Is
given time to pay.
iii. Compounded interest (interest over
interest) - applies only if stipulated, or in
case of judicial demand. (Arts. 1959 &
2212)
• Judgment Debt (Not arising from loans or
forbearance of money, such as torts)
Except in cases where the amount can, be
,t.. _ ..: determined with reasonable certainty, the
amount of obligation may still be unliquidated
and not yet determined upon filing of the case.
1·-~·... • The liquidation or the· deterrninatlon of the ·
amount of the obligation takes place only from
the time judgment is rendered in the first
instance. Thus:
,.-. -,
\_..•:
L If the amount of the obligation can be
c.· established with reasonable certainty,
the interest runs from extrajudicial or
{ .
' ... .I
CIVIL LAW
judicial demand (default) - [at the
discretion of the court) at the rate of 6%
p/a, up to time decision becomes final
and until fully paid. (Republic v. de
Guzman, G.R. No. 175021, 2011)
ii. If the amount of the obligation cannot be
established with reasonable certainty,
interest will run only from the time
i!!9gment is rendered in the first instance
at the rate 6% up to time of payment.
(Eastern Shipping Lines, Inc. v. Court of
Appeals, G.R. No. 97412, 1994)
3. Special rules/forms of payment
(a) Application of payments
be made, out of 2 or more debts owing the same
creditor. (Art. 1252)
Requisites (OTD)
1 . There must be only Qne debtor and only
one creditor;
2. Iwo or more debts of the same kind; ·
and
3. All debts must be Que. (Art. 1252)
Excoptlon on 3rc1 requisite: There may be
application of payment even..if all debts are not
yet due if: ·
i. Parties so stipulate
ii. When application of payment is
made by the party for whose benefit
the term has been constituted (Arl.
1252) I
-i1
How application isrmade:
(a) Debtor makes t~e designation
(b) If not, creditor proposes to make the
application by advising the debtor or through
certain acts such as issuing a receipt with an
application of payment. Since this is a mere
proposal (since only a debtor can make an
application of payments), the debtor rnust
•
accept it either expressly or impliedly by not
objecting· to the creditor's proposal, as when
the debtor accepts without objection the
receipt issued by the creditor with an
application of payment.
(c) If the debtor makes no application and the
creditor has not made a proposal, or if the
application is not valid, then application is
made by operation of law:
i. It is to be applied to the most onerous
debt (e.g., to an interest bearing debt ·
over debts without interest; or
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ii. If all debts are equally onerous or of
the same burden, or It cannot be
determined which debt is the most
onerous, then the payment should be
applied pro rata to all the obligations
due. (Arts. 1252-1254)
Q: Atticle 1176 provides that: "The receipt of the
principal by the creditor, without reservation with
respect to the interest, shalf give rise to the
presumption that said interest has been paid. u
Article 1253 states that: "If the debt produces ,
interest, payment of the principal shall not be
deemed to have been made until the interests
have been covered." How are these two
rebuttable presumptions reconciled?
A: Article 1176 should be treated as a general
presumption subject to the more specific
presumption under Article 1253. Article 1176
applies when there is doubt as to whether
interest is waived because the creditor accepts
the payment for the principal without reservation
with respect to the interest. Here, the creditor is
presumed to have waived the right to collect
interest. Article 1254 has no issue on waiver of
interest because it is a given under this Article
that the debt produces interest. The doubt is on
whether the amount received by the creditor is
payment for the principal or the interest. Artlcle
1253 resolves this doubt by providing a
hierarchy: payments shall first be applied to the
interest: payment shall then be applied to the
principal only after the interest has been fully
paid. (Marquez v. Elisan Credit Corporation,
G.R. No. 194642, 2015)
(b) Oation In payment (Dacion en pago) (Art.
1245)
Definition
A mode of extinguishing an obligation whereby
the debtor pays a monetary obligation with
property. It is a special form of payment
because one element of payment is missing:
Identity. (Paras, Civil Code of the Philippines
Annotated: Prescription; Obligations and
Contracts, 380, 2016)
Dation in payment extinguishes the obligation
to the extent of the value of the thing delivered,
either as agreed upon by the parties or as may
be proved, unless the parties by agreement -
express or implied, or by their silence - consider
the thing as equivalent to the obligation, in which
CIVIL LAW
case the obtlqatlon is totally extinguished. (Tan
Shuy v, Maulawin,, G.R. No. 190375, 2012)
The contractual intention determines whether
the property subject of the dation will be
considered as the full equivalent of the debt and
will therefore serve as full satisfaction for the
debt. (Luzon Dev Bank v. Enriquez, G.R. No.
168646, 2011)
Law on Sales Apply
The law on sales will apply in case of dacion en
pago since it partakes of the nature of sale -
with the creditor purchasing the thing or property
of the debtor, the payment of which is charged to
the debtor's obligation. It . extinguishes the
obligation to the extent of the value of the thing
delivered. (TanShuy v. Spouses Mulawin, G.R.
No. 188064, 2012)
As in a contract of sale, valuation should be
agreed upon by the creditor as buyer, and the
debtor as seller. It is also subject to the usual
warranties of sale. (Tolentino, Commentaries
and Jurisprudence\ on the Civil Code of the
..
Philippines,294, 1~p1;
. :.
Requisites: (PAD)".
1. There must bei the Petiormance of the
prestatlon In lieu of payment (snlmo so/vend~
which may consist in the d~llvery of a
corporeal thing or a real right or. .a credit
against the third person
2. There must be some .Qifference between the
prestation due and that which is given in
substitution (aliud pro alio)
3. There must be an ~greement between the
creditor and debtor that the obligation is
immediately extinguished (to the extent of
agreed valuation) by 'reason of the
performance of a prestalion different from
that due. (De Leon, Comments and Cases
on Obligations and Contracts, 321, 2014)
Intent is Controlling
Like in all contracts, the intention of the parties
to the dation in payment is paramount and
controlling. The contractual intention determines
whether the property subject of the dation will be
considered as the full equivalent of the debt and
will therefore serve as full satisfaction for the
debt. "The dation in payment extinguishes the
obligation to the extent of the value of the thing
delivered, either as agreed upon by the parties
or as may be proved, unless the parties by
agreement, express or implied, or by their
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silence, consider the thing as equivalent to the D ti I P nt v Ce ion In Pa ment

obligation, in which case the obligation is totally DATION IN . I CESSION IN
extinguished." (Luzon Development Bank v. PAYMENT PAYMENT
Enriquez, G.R. No. 168646, 2011) (Art. 1245) (Art. 1255)
One creditor Plurality of creditors
(c) Cession or Assignment (in favor of NOT necessarily in Debtor must be
creditors) (Art. 1255) state of financial partially or relatively
difficultv insolvent
The process by which a debtor transfers ALL his Thing delivered is ./, Universality of property
assets which are not subject to execution in considered as .. of debtor is what Is
favor of creditors, so that the latter may sell them equivalent of ;, ceded
and apply the proceeds to his outstanding
;,
oerformance t..
obligations. Except if there is contrary Payment extinguishes Merely releases debtor
aqreement, or as may be provided by law, the obligation to the extent up to the net proceeds
("",: obligations are extinguished only up to the of the value of the of things ceded or
'', . n,t amount of the proceed1 of the Hit. e!slgned, unless there
thing delivered es
(Paras, CfVil Code of the Philippines AnnottJted: acreed uoon Is a contrarv Intention
Prescription; Obligations and Contracts, 417, (De Leon, Comments and Cases on Obligations
,···. 2016) and Contracts, 356-357, 2014)
I
'•
Kinds of Assignment (d) Tender of payment and Consignation (Art.
(a) Legal - governed by the insolvency 1256)
law
(b) Voluntary - agreement of creditors Tender - the act of offering to the creditor what:
·,.. .;,/
(Paras, Civil Code of the Philippines is due him together with a · demand that the
Annotated: Prescription; Obligations creditor accepts the same. (Paras, Civil Code of
and Contracts, 417, 2016) the Philippines Annotated: Prescription;
Obligations and Contracts, 419, 2016)
... -~. Requisites of Volunta,y Assignment: (DACCI)
1. More than one Debt If the creditor refuses w/o just cause to accept
'<, .•·
2. More than one Creditor payment, he becomes in mora accipiendi and
3. Complete or partial [nsolvency of debtor tender alone will not extinguish the obligation;
4. Abandonment of all debtor's property not consignation is needed. (Co v. PNB, G.R. No. L-
exempt from execution 51767, 1982)
5. Acceptance or fonsent on the part of the
creditors (Paras, Civil Code of the Conslgnation - the act of depositing the thing
Philippines Annotated: Prescription; due with the . court or judicial authorities
Obligations and Contracts, 417, 2016) whenever the creditor refuses to accept
payment, and generally requires prior lender of
Effects of Assignment payment. (Agpalo, Obligations and Contracts,
(a) Creditors do not become the owner; they are 185, 2008)
i\= .
.·, i merely assignees with authority to sell
"~"'"' (hence, the legal contract involved is one of Requisites of Valid Consignation (VU PAS)
•
Agency and not Sale); 1. Existence of Valid debt;
(b) Debtor is released up to the amount of'the 2. Creditor ha;-_gnjustifiably refused to accept
,·. net proceeds of the sale, UNLESS there is a payment, i.e., previous valid tender;
'.: ..
stipulation to the contrary 3. Prior notice of Consignation had been given
(c) Creditors will collect credits in the order of
preference agreed upon, or ln default of
to the person interested in performance of
obligation (1st notice) (Art. 1257)
agreement, in the order ordinarily 4. Actual deposit/consignation with proper
·.. :.•· established by law (Paras, Civil Code of the )udicial authortties
Philippines Annotated: Prescription; 5. Subsequent notice of Consignation (2nd
Obligations and Contracts, 417-418, 2016) notice) (De Leo~, Comments and Cases on
Obligations end'comrects, 359-360, 2014)

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Exception on 2"d requirement, l.e., where
.consignatlon w/o prior tender allowed {Art.
delay):
i. Creditor absent or unknown/ does not
appear at the place of payment
ii. Incapacitated to receive payment at the time
it is due
iii. Refuses to issue receipt w/o just cause
iv. 2 or more creditors claiming the same right
to collect
v. Title of obligation has been lost
vi. Debtor had previously been notified by the '
creditor that the latter would not accept any
payment (Kapisanan Banahaw, Inc. v.
Dejarme, G.R. No. L-32908, 1930)
Effects of Consignation
(a) Debtor may ask judge to order cancellation
of obligation
(b) Running 6f interest is suspended
(c) Before creditor accepts or before judge
declares consignation has been properly
made, obligation remains (debtor bears risk
of loss at the meantime, and after
acceptance by creditor or after judge
declares that consignation has been
properly made - risk of loss is shifted to •
creditor) (Paras, Civil Code of the
Philippines Annotated: Prescription;
Obligationsand Contracts, 433, 2016)
When Consignation Extinguishes Obligation
i. Consignation is completed at the time
the creditor accepts the same without objections,
OR, if he objects, at the time the court declares
that it has been validly made in accordance with
law. (Dalton v. FGR Realty and Development
Corporation, G.R. No. 172577, 2011)
T d f . c . r
, TENDER OF · CONSIGNATION .
.
. PAYMENT . . . . .
Principal act; produces
the effects of a ment
Extra·udicial Judic. .cia-'-1 _,
(Paras, Civil Code of the Philippines Annotated:
Prescription; Obligations and Contracts, 419-
420, 2016)
B. LOSS OF THE THING DUE
Includes partial or total loss of thing and
impossibility of performance (Arts. 1262 & 1266)
1. Loss of the thing due
(a) When the object perishes (physically)
·----------------······-------··-·-·---------· -··-·-····
·~,,
',
· CIVIL LAW
(b) When I~· goes out of commerce
(c) When i.t disappears in such a way
that: M existence Is unknown or it
cannot be recovered (Art. 1189)
Effect of Loss In Obligation to Deliver a
Specific Thing
If loss was due to fortuitous events, obligation is
extinguished; no damages (See requisites &
exceptions above)
If the loss is due to the fault of the debtor or any
person, that person should be held liable for
damages. (Paras, Civil Code of the Philippines:
Prescription; Obligations and Contracts, 438,
2016)
Effect of Loss In Obligation to Deliver a
Generic Thing
General rule: Loss does NOT extinguish
obligation. ,
• Exceptions:
i. If the generic thing is delimited; or
ii. If the generic thing has already been
segregated (Paras, Civil Code of the •
Philippines, 440, 2016)
Effect of Partial Loss
1. When loss is significant - may be enough
to extinguish obligation
2. When loss insignificant - NOT enough to
extinguish obligation (De Leon, Comments
and Cases on Obligations and Contracts,
377, 2014) :
NOTE: When thing is lost in the possession of
the debtor, it is presumed to be due to debtor's·
fault; ·
Exceptions: natural calamity, earthquake, flood,
storm. (Art. 1265)
2. Impossibility o(performance
(a) Physical Impossibility - it is not within
man's capability
(b) Legal impossibility - when the
prestation is ptohibited by law
(c) Moral lmposslblllty - when the service
has become so burdensome that it could
not have been the intention of the parties
{Art. 1267)
Effect of Impossibility of Performance in
Obligation to Do
Debtor is released when the prestation becomes
legally or physically impossible without fault on
the part of the debtor. (Art. 1266)
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NOTE: C. CONDONATION OR REMISSION OF DEBT

• Judicial determination of extent is necessary
• Doctrine of Unforeseen Events: The court
is authorized to release the obligor, in whole
or In part, when the service has become so
;
, ••.
·,
J
difficult as to be manifestly beyond the
contemplation of the parties. (Art. 1267; De
Leon, Comments and Cases on Obligations
and Contracts, 389, 2014)
Doctrine of Subjective Impossibility: The
obligation undoubtedly becomes impossible
if there is no physical or legal loss but the
object obligation belongs to another person;
the obligor must indemnify the obligee for
the damages suffered by the latter.
(Tolentino, Commentaries and
Jurisprudence on the Civil Code of the
Philippines, 336, 1995)
,. ..
'\\ .. ~ Rebus Sic Stantibus: The agreement is valid
only if the same conditions prevailing at time of
contracting continue to exist at the time of
performance. Obligor may be released in whole
!.,::_.
or in part if the conditions have changed so that
·~-.. I
Condonatlon - An act of liberality by which the
creditor renounces the enforcement of the
obligation contracted in his favor. To condone is
to forgive or to remit a debt. (Banez v. Young, 92
Phil. 1067)
Remission - An act of liberality by virtue of
which the obligee, without receiving any price or
equivalent, renounces the enforcement of the
obligation, as a .result of which it is extinguished
in its entirety or in that part or aspect of the
same to which the remission refers (Manresa).
In brief, "It is the gratuitous abandonment by the
creditor of his right" (Tolentino, Commentaries
and Jurisprudence on the Civil Code of the
Philippines, 353( 1991)
Requisites (CapRe-FLAgS)
1. There must be an Agreement
2. There must be a ~ubject matter (object of
the remission, otherwise there would be
nothing to condone)

it becomes manifestly beyond the intention or 3. Cause of consideration must be hiberality

the parties. (Tolentino, Commentaries and (Essentially gra~i.Jitous, an act of liberality)
Jurisprudence on the Civil Code of the 4. Parties must be Capacitated and must
Philippines, 347, 1995) consent; requires acceptance by obligor;
v., implied in morti~ causa and express in inter
Requisites of Rebus Sic Stantibus: (FoDAF) vivos condonatlons.
1. The event or change could not have been 5. formalities of a donation are required in the
Foreseen at the time of the execution of the case of an express remission or
contract condonation
2. The performance is extremely Difficult, but 6. Revocable - subject to rule on inofflclous
NOT impossible (because if it isimpossible, donations. (Paras, Clvll Code of the
it is extinguished by impossibility) Philippines Annotated: Prescription;
3. The event was not due to the ~ct or any of Obligations and Contracts, 448, 2016)
the parties
4. The contract is for a future prestation Examples of Implied Condonation, Waiver of
(Tolentino, Commentaries and Right to Collect
Jurisprudence on the Civil Code of the i. Voluntary delivery of evidence of
Philippines, 347, 1995) indebtedness when evidence of •
indebtedness is found in the possession of
The difficulty of performance contemplated the debtor - there is a . rebuttable
should be such that one party would be placed presumption of voluntary delivery, which if
at a disadvantage by the unforeseen event. not rebutted, . will create the presumption of
Mere inconvenience, or unexpected waiver condonation (remission) which in
Ii .~ impediments, or increased expenses did not effect extinguishes the debt. (Art. 1271(1))
,·<:>' suffice.to relieve the debtor from a bad bargain.
(Tagaytay Realty v. Gecuten G.R. No. 160033, EXCEPTION: when the waiver is inofficious.
,r '!'
(Art. 1271(2))
\... ,J 2015)
Defense to the claim of inofficiousness: the
'-, l
,; delivery of the document was made in virtue of
\,..J,
payment of the debt. (Art. 1271 (2)) ·

~-·
u ";.

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ii. If there If actual proof, or the presumption
above is not rebutted, that the evidence of
indebtedness was returned by the creditor to
. the debtor, there is a presumption of waiver
(a) If in hands of joint debtor - only his
share is condoned.
(b) ff in hands of solidary debtor - whole
debt is condoned.
(c) Tacit voluntary destruction of
instrument by creditor; made to
prescribe w/o demanding. (Art. 1267)
Note: ln a pledge, when after the constitution of
the debt, the pledged property is found in the
possession of the pledgor or a third person who
owns it, only the accessory obligation under the
pledge is deemed remitted, but the principal
obligation remains as an unsecured obligation.
(A1t. 1274)
3. Both debts are Due.
4. Both debts· areLiquidated and demandable
(determined).
5. Neither debt must be retained in a
controversy commenced by !hird person
and communicated w/ debtor (neither debt is
garnished). (Art. 1279)
A claim is liquidated when the amount and time
of payment is fixed. If acknowledged by the
debtor, although not in writing, the claim must be
treated as liquidated. When the defendant, who
has an unliquidated claim, sets it up by way of
counterclaim, and, a judgment is rendered
liquidating such cl~i~, it can be compensated
against the plaintiffs claim from the moment It is
liquidated by judgment. Compensation takes
place only if both obligations are liquidated. (Lao
v. Special Plans, lnq., G.R. No. 164791, 2010)

D. CONFUSION OR MERGER OF RIGHTS OF Kinds of Compensatlon

CREDITOR AND DEBTOR (a) Legal - by operation of law; as long as 5
requisites concur - even if unknown to
The character of debtor and creditor is merged parties.if not equal debts, only up to
•
in same person with respect to same obligation. concurring amount.
(Jurado, Comments and Jurisprudence· on , • Legal· compensation takes place by
Obligations and Contracts, 306, 2010) operation of law when all the requisites
are present, as opposed to conventional
Requisites of Merger: (COP) subrogation which takes place when the
·1. It must take place between frincipal debtor parties agree to compensate their mutual
and principal creditor only. obligations even in the absence of some
2. Merger must be Qlear and definite. of the requirements.
3. Only Qne obligation is involved. (Paras, Civil
Code of the Philippines Annotated: (b) Conventional - based on agreement of
Prescription; Obligations and Contracts, 456, parties, even if the other requirements are·
2016) . not complied with.
• Conventional compensation takes place
Confusion does not extinguish a joint obligation, when the parties agree to compensate
except as regards the share corresponding to their mutual obligations even in the
the creditor Or debtor in whom the 2 characters absence of some requisites. (Mondragon
concur. (Art. 1277) Personal Sales Inc. v. Sola Jr., G.R. No.
174882, 2013)
E. COMPENSATION
(c) Facultatlve - only one party may invoke the
A mode of extinguishment up to the concurrent compensation, such as the person who has
amount of the obligation of persons who, in their the benefit of the period who can invoke it
own right, have become mutual debtors or even before ~he period has arrived.
creditors of one another. (Jurado, Comments
and Jurisprudence !'.)ii Obligations and · (d)Judicial - set off takes place upon order of
Contracts, 309, 2010) the court; needs pleading and proof; all
requirements must concur, EXCEPT
Requisites (LM·STO): liquidation. ·
1. Both parties must be Mutual creditors and
debtors - in their own right and as principals. (e)Total - when 2 debts are of the same
2. Both debts must consist in ~um of money or amount.
if consumable, of the same kind or quality.
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..,
.1 \ 'I
·,;
•". ,I ...
.•. , (f) Partial -when 2 debts are not of the same tax and debt. Debts are due to the Government
~·
... _,' amount. (Paras, Civil Code of the
Philippines Annotated: Prescription,·
in its corporate caijacity, while taxes are due to
the Government ~in its sovereign capacity.
O~ffg@tigni @ml t;gntreJQt§, 4fi 1, ~g 1 ti) (Ynil@d Airlin@§, In~, II: ~@fflffli§§fOO@f fJf fflf@ffliJI
ReveflU~; G.R. No. 178788, 2010)
r·. ~ffect of Assignment of Credit to Third
Person: Can There Still be Compensation? F. NOVATION
,..., 1. If made after legal compensation has set
•i
.. '
I
In - no effect; compensation has already Novation - Extinguishment of obligation by
extinguished the obligation, so there is creating/ substituting a new one in its place
nothing to assign. (a) Changing object or principal conditions
2. If made before legal compensation has (b) Substituting person of debtor
set in: (c) Subrogating 3r:t person to the rights of the
a. With consent of debtor - debtor is creditor (Art. 1291)
estopped UNLESS he reserves his right
to compensate and gave notice to Requisites of novatlon: (VICN)
assignee 1. There must be a previous yalid obligation;
b. With knowledge but w/o consent of 2. [ntent to extinguish the old and substitute it
debtor - compensation may be set up with the new obligation, whether expressed,
as to debts maturing prior to assignment or implied as when the two obligations are
c. W/o knowledge- compensation may be inconsistent and cannot stand together.
,· '
t .. set-up on all debts prior to his 3. f apacity and consent of the parties to the
knowledge (Art. 1285) new obligation; and
4. Valid New obligation. (Garcia, Jr. v. CA, G.R. _
No. 80201, 1990)

Different persons are Only 1 person. who is Novation is never presumed, there must be
involved; each is a creditor and debtor of an express intention to novate. The creditor's
\. .: debtor and creditor of himself acceptance of another check, which replaced an
each other earlier dishonored check, does not result in
.,'·
~.......
,' I
Two obligations One obligation novation where there was no express agreement
I
Indirect payment No need to pay to establish that the debtor was already
oneself discharged from his liability. (Salazar v. J. Y.
(De Leon, Comments and Cases on Obligations Brothers Mark,eting Corporation, G.R. No.
and Contracts, 416-417, 2014} 171998, 2010)

Obligations not allowed to be Compensated
'!.(·.··,
(Co·PGT)
(a) When one of the debts arises from a
deposltum or from the obligations of a
depositary or of a bailee in Commodatum.
(Art. 1287) -
(b) Against a creditor who has a claim· for
,( . support due by .§.ratuitous title, without
·.:_,,.·
prejudice to Article 301 par. 2 (Art. 1287)
(c) If one of the debts consists in civil liability
arising from a _eenal offense. (Art. 1288).
(d) Obligation to pay !axes is not compensable
with the government's obligations to the
taxpayer. (Francia v. !AC, G.R. No. 67649,
1988).
,~ ..
•\ Taxes cannot be subject to compensation for the
'"'.....:,
simple reason that the government and the
taxpayer are not creditors and debtors of each
other. There is a material distinction between a
'·~·- >
Novation can be done without the knowledge or
even against the will of the original debtor, but
not without the I consent of the creditor
(lnterport Resources Corporation v. Securities
Specialist, In. G.R. ,Yo. 154069, 2016) •
.. ,
Effects of Novatlo~ : •
GR: It extinguishes the old obllqatlon and a
new one is created in its place.
Exception:
(a) Modificatory novation only, in which
case the old · obligation remains, as
amended by the new (Swagman Hotels
and Travels, Inc. v. CA, G.R. No. 161135,
2005)
(b) Old obligation is void
• Conversely, the old obligation
subsists if the new· obligation is void
or is voidable and later annulled.
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(Tolentino, Commentaries and
Jurisprudence on the Civil Code of
the Philippines, 397, 1991)
Novation, in its broad concept, may efther be
extinctive or modificatory.
• It is extinctive when an old obligation is
terminated by the creation of a new
obligation that takes the place. of the
former; it is merely modificatory when
the old obligation subsists to the extent '
that it remains compatible with the
amendatory agreement.
• An extinctive novation results either by
changing the object or principal
conditions (objective or real), or by
substituting the person of the debtor or
subrogating a third person in the rights
of the creditor (subjective or personal).
(Banate v. Philippine Countryside Rural
Bank (Liloan, Cebu), Inc., G.R. No.
163825, 2010) . liability cannot be revived even ff the
There is novation when there is an irreconcilable
incompatibility between the old and new
obligations. There is no novation in case of only
slight modifications, in which case, the old
obligation still subsists. (Heirs of Franco v.
Spouses Gonzales, G.R. No. 159709, 2012)
Novation does not extinguish criminal
liability (Philippine National Bank v. Soriano,
G.R. 164051, 2012)
Effect of Conditions in Either Old or New
Obligation:
(a) If old obligation ls conditional
i. If resolutory and it occurred - old
obligation already extinguished; no
new obligation is created since
there is nothing to novate
ii. If suspensive - the condition must
happen, otherwise there is no old
obligation to novate. (Tolentino,
Commentaries and Jurisprudence
on the Civil Code of the Philippines,
399, 1991)
(b) If the new obligation is conditional:
i. If resolutory - valid
ii. If suspensive - the condition must
happen, otherwise there is no new
obligation to replace the old, so that
the old obligation remains
subsisting. (Tolentino,
Commentaries and Jurisprudence
CIVIL LAW
on the Civil Code of the Philippines,
397, 1991) .
Kinds of Novatlon:
(a) Real I objective - When there Is a change
in the object, cause/consideration or
principal condition. (Pinedi:l, Obligations
and Contracts, 332, 2009)
(b) Personal I subjective - Substituting
person of debtor (passive). (Pineda,
Obligations and Contracts, 332, 2009)
i. Expromision: initiative is from a 3rd
person or new debtor who agrees to
assume the obllgatlon of the old
debtor, with the consent of the
creditor. The old debtor's consent is
not required and upon assumption by
the new debtor of the debt, the old
debtor is released from liability. Since
the old debtor does not consent, his
new debtor becomes insolvent or •
cannot pay the obligation. It is however
important that the creditor and the new
• debtor agree to release the old debtor,
otherwise the "new" debtor only
becomes a co-debtor and no novation
takes place.
i:·
l,i.:
ii. Delegacion.: initiative of old debtor
who "delegates" his obligation to a
new debto]: In this case all the parties
must cons~nt. The old debtor's liability
is generally not revived in case of the·
insolvency of the old debtor UNLESS:
the new debtor's insolvency already
existed at the time of the delegacion
AND (1) it was of public knowledge, or
(2) the old debtor knew of the
insolvency of the new debtor at the
time of deleqaclon. (Pineda,
Obligations and Contracts, 341, 2009)
Parties:
(a) Delegante - old debtor
(b) Delegatario - creditor
(c) Delegado - new debtor. (Paras,
Civil cooe of the Philippines
Annotated: Prescription; Obligations
and Contracts, 508, 2016)
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l }
p n Ch I f Debtor
• ~·1.1,,:l.lli,i,IAliiil,llii
.. · DIFFERENCE CHANGE OF DEBTOR
Intention: old debtor be released from the ~ROM PAYMENT
obli ation . ,BY. 3l'lD P.ERSON .· . ,.
Consent of creditor re uired on both Debtor is NOT Old debtor is released
Consent of creditor and Consent of debtor necessarily :
third person (initiates), creditor released from debt
and third person; Can be done w/o Needs consent of creditor:
() need NOT be given consent of creditor express or implied
simultaneously
Governed by the rules Same applies in the 3' person can New debtor is obliged to
of payment by third absence of an make payments pay the full remaining
ersons a reement less than the amount of the obligation
If w/o knowledge of Subrogation amount of the !. ,
debtor, beneficial obligation and \
reimbursement, no cannot be held i,
subrog~~~~~--1-~~~~~~~~ liable for the \;
New debtor's Same UNLESS the '--~~de~ficie!!2l_~.!J_~~~~-~~-~-'
tJ .... , insolvency does NOT new debtor's
'--· make old debtor liable insolvency already
existed at the time
of the delegacion
AND (i) it was of Governed by Arts.
public knowledge, 1300-1304
or (ii) the old debtor Debtor's consent is Debtor's consent is
knew o'fthe required NOT required, but must
,... ·
insolvency of the be notified in order to
,--\ new debtor at the be bound
time of dele acion. Extinguishes the Transmission of right of
,/':.····: (Pineda, Obligations and Contracts, 341-343, obligation and gives the creditor to third
·••·..1,1' 2009) rise to a new one person without
r:». modifying or
,.
'~
... ,
J
• Subrogating 3•d person to rights of extinguishing the
creditor (active) obli ation
i. Conventional - agreement and consent Defects and vices in Defects and vices in
of all parties; clearly established (Arts. the old obligation the old obligation are
1300-1301) are cured· NOT cured
ii. Legal - takes place by operation of law; (Pineda, Obligations and Contracts, 354-355,
no need for consent; NOT presumed 2009)
except as provided for in law: (Arts.
1300 & 1302)
•
---- end of topic----
When Subrogation is Presumed
,·, i. Creditor pays another preferred creditor
\:.... /
even w/o debtor's knowledge
ii. 3•d person not interested in obligation
pays w/ approval of debtor
iii. Person interested in fulfillment of
obligation pays debt even w/o knowledge
of debtor (Art. 1302)

,·
,,1 •
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B.CONTRACTS
1. GENERAL PROVISIONS
•
One of the sources of Legal tie or relation
• nature, by stipulation, or by provision of
obll ations itself
There must be an There need not be a '
obli ation contract
(De 'Leon, Comments and Cases on Obligations
and Contracts, 487, 2014)
Principal characteristics of a contract
1. Autonomy - Parties may stipulate anything
as long as it is not contrary to law, morals,
good customs, public order, or public policy.
(Art. 1306)
2. Mutuality - Contract binds both parties; its
valldlty or compliance cannot be left to the
will ofoneof parties. (Art. 1308)
3. Consensuality and Obligatory Force -
Parties are bound from perfection. of
contract; contracts are perfected by mere
consent and from that moment the parties
are bound not only to the fulfillment of what
has been expressly stipulated but also to all
consequences which, according to their
nature may be in keeping· with good faith,
usage and law (Art. 1315). Also, the
stipulations of the contract being the law
between the parties, courts have no
alternative but to enforce them as they were
agreed upon and written. (Land Bank of the
Philippines v. Ofiate, G.R. No. 192371,
2014)
4. Relativity - Binding only between the
parties, their assigns, heirs; strangers
cannot demand enforcement. (Art. 1311)
5. Incorporation - The law is deemed wrilten
into every contract. Although a contract is
the law between the parties, the provisions
of positive law which regulate contracts are
deemed written therein and shall limit and
govern the relations between the parties.
(Surviving Heirs of Alfredo R. Bautista v.
Lindo, G.R. No. 208232, 2014)
Note: The basic principle of relativity of
contracts is that contracts can only bind the
parties who entered into it, and cannot favor or
prejudice a third person, even if he is aware of
such contract and has acted with knowledge
thereof. Where there is no privily of contract,
CIVIL LAW
there is likewise no obligation or I/ability to speak
about. (PNB v. Dee, G.R. No. 182128, 2014)
Exceptions to rela,tlvity: (NT ·APA·I)
II. Where the obligations arising from the
contract are not transmissible by their
law. (Art. 1311)
iii. Where there is a stipulation pour autrui
(a stipulation in favor of a third party).
(Art. 13'11)
iv. Where a third person induces another
to violate his contract. (Art. 1314)
v. Where, in some cases, third persons
may be adversely affected by a contract
in which they did not participate. (Arts.
1312, 2150, 2151; R.A. 875)
vi. Where the law authorizes the creditor
to sue on a contract entered into by his
debtor. (Accion Directa) (Arts. 1651,
1652, 1729, 1312, 1313, 1381(3))
•
REQUISITES OF STIPULATION POUR
AUTRUI (PLAN-C)
• 1. The stipulation in favor of a third-party
beneficiary should be a fart, not the whole,
of the contract;
2. The contracting parties must have Qlearly
and dellberately conferred a favor upon a
third person, not a mere incidental benefit or
interest;
3. The favorable stipulations should !!ot be
conditioned or compensated by any kind of
obligation whatsoever;
4. The third person must have communicated
his ~cceptance to the obligor before its
revocation; .
5. Neither of the contracting parties bear the
begal representation or authorization of the
third party (Art. 1311; Limitless Potentials,
Inc. v. Quilafa, G.R. No. 157391, 2005).
NOTE: The fairest test to determine whether the
interest of a third. person in a contract is a
stipulation pour autrui or merely an incidental
interest is to rely upor the Intention of the parties
as disclosed by t~eir contract. (Uy Tam v.
Leonard, G.R. No. L08312, 1915)
i
KINDS OF CONTRACTS
Auto-Contracts - only one person represents
two opposite parties, but In different capacities.
(Pineda, Obligations and Contracts, 367, 2009)
Example: An agent representing his principal
sells a specific car to himself, as a buyer
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n matter and cause (Art. 1315) (e.g.,
,r··)
"I. •. ·
Collective Contracts - The will of the majority
binds the minority to an agreement
r>. notwithstanding the opposition of the latter.
~ )
(Tolentino, Commentaries and Jurisprudence on
the Civil Code of the Philippines Volume IV, 437,
1991)
Example: Collective bargaining contracts by
labor organizations under R.A. No. 875
Contracts of Adhesion
• One party imposes a ready-made form of
contract which the other party may accept or
reject but cannot modify; one party prepares
the stipulation in the contract, while the other
party merely affixes his signature or his
"adhesion" thereto, giving no room for
negotiation and depriving the latter of the
opportunity to bargain on equal footing.
(Polotan, Sr. v. CA, G.R. No. 119379, 1998)
.,-
·: ..
• It must be construed strictly against the one
who drafted the same. (Geraldez v. CA, G.R.
No. 108253, 1994)
• Insurance contracts, bills of lading, contracts
of sale of lots on installment plan fall into this
category. (Angeles v. Calasanz, G.R. No.
·•'- '
42283, 1985)
NOTE:
• We follow the theory of cognition (Art. 1319)
and not the theory of manifestation. Under
our Civil Law, the offer and acceptance
concur only when the offeror comes to know
of, and not when the offeree merely
manifests his acceptance.
• The perfection of the contract, which in this
case coincided with the date of execution
thereof, occurred when petitioner and
respondent agreed on the object and the
cause, as well as the rest of the terms and
, .. conditions therein. The commencement of
{,
'·\)
I
the employer-employee relationship
would have taken place had petitioner b'een
actually deployed from the point of hire.
Thus, even before the start of any employer-
employee relatlonshlp, contemporaneous
with the perfection of the employment
'·. contract was the birth of certain rights and
C.... r obligations, the breach of which may give
rise to a cause of action against the erring
party. (C.F. Sharp & Co., Inc. v. Pioneer
Insurance, G.R. No. 179469, 2012)
,.. .
t .
::.:..~··
A. AS TO PERFECTION OR FORMATION
f; I (a) Consensual - perfected by mere
<;»
consent of the parties on the subject
.~· ..
\.,J
/'
i[.j
CIVIL LAW.
contract of sale)
(b) Real - perfected by delivery (Art. 1316)
(e.g. commodatum, pledge, deposit)
(c) Formal/solemn - require a certain
specified form, in addition to consent,
subject matter and cause (Art. 1356)
(e.g., donation of real property)
B. AS TO CAUSE
(a) Onerous - The cause is, for each
contracting party, the prestation or
promise of a thing or service by the
other (e.g., contract of sale) (Art. 1350)
(b) Remuneratory- The cause is some
past service or benefit which by itself is
a recoverable debt (Art 1350)
Note: In a remuneratory donation, the past
service or debt Is not by Itself a recoverable
debt. (Art. 726)
(c) Gratuitous (or contracts of pure
beneficence) - founded on the mere
liberality' of the benefactor (e.g., pure
donation) (Art. 1350)
C. AS TO IMPORTANCE OR DEPENDENCE
OF ONE UPON ANOTHER
(a) Principal -:-,.when the contract does not
depend for' its existence and validity
upon another contract but is an
indispensable condition for the existence
of an accessory contract (e.g. sale,
lease) '
(b) Accessory - depends on another
contract for its existence and validity
(e.g., mortgage, guaranty)
(c) Preparatory - the contract is entered
into as a means through which future
contracts may be made (e.g. agency, •
partnership) (Pineda, Obligations and
Contiects, 367, 2009)
D. AS TO PARTIES OBLIGED
(a) Unilateral - only one of the parties has
an obligation (Pineda, Obi/gallons and
Contracts, 366, 2009)
(b) Bilateral· - both· parties are required to
render reciprocal prestations (Art. 1191)
E. ASTO FORM
(a) Common or informal - require no ·
particular form (Art. 1356)
(b) Special or formal - require some
particular form (Art. 1356)
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Stages in a Contract
F. AS TO THEIR PURPOSE 1. Preparation/Negotiation - covers the
(a) Transfer of ownership period from the time the prospective
(b) Conveyance of use contracting parties indicate their Interest in
(c) Rendition of service (Tolentino, the contract to the tl~e the contract Is
Commentaries and Jurisprudenceon the perfected.
Civil Code of the Philippines, 410-411,
1991) 2. Perfection/Birth

G. AS TO THEIR SUBJECT MATTER a. Consensual contracts

(a) Things
(b) Services (Tolentino, Commentaries and
Jurisprudence on the Civil Code of the
Philippines,411, 1991)
H. AS TO THE RISK INVOLVED
(a) Commutative - when the undertaking
of one party is considered the equivalent
of that of the other (e.g. sale, lease)
(b) Aleatory - when it depends upon an
uncertain event or contingency both as
to benefit or loss (e.g. insurance, sale of
hope) (Jurado, Comments and
Jurisprudence on Obligations and
Contracts, 361, 2010)
I. AS TO NAME OR DESIGNATION
(a) Nominate - those which have a specific
name or designation in law (e.g., lease,
sale, agency, etc.)
(b) lnnominate - those which have no
specific designation or name in law (Art.
1307)
i. Do ut des - I give that you may give
ii. Do ut facias - I give that you may do
iii. Facio ut des - I do that you 111ay
give
iv. Facio ut facias - I do that you may
do (Pineda, Obligations and
Contracts, 380, 2009)
Note: Do ut des is, however, no longer an
innominate contract. It has already been given a
name of its own, i.e., barter or exchange. (Art.
1638)
• As a general rule contracts are
perfected by mere consent of the
parties regarding the subject matter
and the cause of the contract. (Arts.
1315, 1319). They are obligatory in
whatever form they may have been
entered into, provided all the
essential requisites for their validity
are present. (Art. 1356)
, b. Real contracts
• The · exceptions are real contracts
which are perfected not merely by
consent but by the actual or
constructive delivery of the object of
the obligation. (Art. 1316) These
contracts have for their purpose
restitution because they contemplate
the return by a party of what has
been received from another.
c. Formal/Sol~mn contracts
When the law reqylres that a contract be in
some form to be valid (Art. 1356), this special
•
form is necessary tot; its perfection
3. Consummation - begins when the parties
perform their respective undertaking under
the contract, culminating in the
extinguishment thereof (De Leon,
Comments and Cases on Obligations and
Contracts, 542, 2014)
Negotiation begins from the time the
prospective contracting parties manifest their ·
interest in the contract and ends at the moment
of agreement of the parties. The perfection or
birth of the contract takes place when the
parties agree ·upon the essential elements of the
contract. The last stage is the consummation of
the contract where the parties fulfill or perform
the terms they agreed on, culminating in its
extinguishment. (International Freeport Traders,
Inc. v. Danzas Intercontinental, lnc., 640 SCRA
621. 2011)

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Formal I Solemn contracts
1. Donation
, The donation of a movable may be made
orally or in writing. (Art. 748)
• An oral donation requires the simultaneous
,... ..~ delivery of the thing or of the document
·i_ I
representing the right donated. (Art. 748)
• If the value of the personal property donated
exceeds five thousand pesos, the donation
and the acceptance shall be made in writing.
Otherwise, the donation shall be void. (Art.
748)
2. Partnership
• A partnership may be constituted in any
form, except where immovable property or
~· . real rights are contributed thereto, in which
!.... ' case a public instrument shall be necessary.
r:>, (Art. 1771)
l • A contract of partnership Is void, whenever
r··. immovable property is contributed thereto, if
an inventory of said property is not made,
signed by the parties, and attached to the
public instrument. (Art. 1773)
3. Antichresis
• The amount of the principal and of the
interest shall be specified in writing;
otherwise, the contract of antichresis shall
.r·· . be void. (Art. 2134)
·,)
4. Agency to Sell Real Property
• When a sale of a piece of land or any
interest therein is through an agent, the
authority of the latter shall be in writing;
otherwise, the sale shall be void. (Art. 1874)
5. Interest
.. , .
;·-... • No interest shall be due unless it has been
<»: expressly stipulated in writing. (Art. 1956)
6. Ordinary Diligence
I '
• A stipulation between the common carrier
-'_i and the shipper or owner limiting the liability
of the former for the loss, destruction, or
deterioration of the goods to a degree less
than extraordinary diligence shall be valid,
provided it be:
(a) In writing, signed by the shipper or
owner;
(b) Supported by a valuable consideration
other than the service rendered by the
,(j common carrier; and
'". (c) Reasonable, just and not contrary to
public policy (Art. 17 44)
··. ~-'
CIVIL LAW
7. Chattel Mortga·ge
• By a chattel m'.6rtgage, personal property is
recorded In th~ Chattel Mortgage Register
as a security 'for the performance of an
obligation. If th~ movable, Instead of being
recorded, is dellvered to the creditor or a
third person, the contract is a pledge and not
a chattel mortgage. (Art. 2140)
8. Sale of Large Cattle
• The form sale of large cattle shall be •
governed by special laws. (Art. 1581)
2. ESSENTIAL REQUISITES
A. CONSENT
Definition
Meeting of the offer and the acceptance upon
the thing and the cause which are to constitute
the contract; concurrence of a certain offer and
an absolute acceptance (Art. 1319)
Requisites (C3):
1. Must be manifested by the f_oncurrence of
the offer and acceptance upon the thing and
cause;
2. Parties are legally .2,apacitated to enter Into
contracts
3. Consent must be intelligent, free,
spontaneous, and real (Pineda, Obligations
and Contracts, 415, 2009)
Offer - A proposal made by one party to another
to enter into a contract; must be certain or
definite, complet!e and intentional. (Art. 1319)
Acceptance - Manifestation by the offeree of
his assent to the terms of the offer; must be
absolute (i.e. must. not qualify the terms of the
offer) (Oesmer IV. Paraiso Development
Corporation, G.R. N,~. 157493, 2007)
,."
Note: A qualifieif acceptance constitutes
counter-ofter. (Art. 1319)
Elements of a valid offer or acceptance
1. Definite - Unequivocal
2. Complete - Unconditional
3. Intentional (Palattao v. CA, G.R. No.
131726, 2002)
When offer becomes ineffective (QR·DRIP)
i. Death, civil interdiction, insanity or
insolvency of either party before
acceptance is conveyed (Art. 1323);
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Ii. Express or implied rejection of the offer
by the offeree; (NHA v. Grace Baptist
Church, G.R. No. 156437, 2004)
iii. Qualified or conditional acceptance of
the offer, which becomes a counter-
offer; (Art. 1319)
iv. Subject matter becomes illegal or
impossible before acceptance is
communicated; (Paras, Civil Code of the
Philippines Annotated: Prescription;
Obligations and Contracts, 612, 2016)
v. lapse of period given to the offeree
within which to signify acceptance; (Art.
1324) or
vi. Revocation of the offer in due time (i.e.
before the offerer has learned of its
acceptance by the offeree) (Art. 1324)
Period for acceptance
1. Stated fixed period in the offer - The
offeree may accept at any time until such
period expires (Young v. Court of Appeals,
G.R. No. 83271, 1991).
2. No stated fixed period
(a) Offer Is made to a person present -
Acceptance must be made immediately
(Malbarosa v, Court of Appeals, G.R No.
125761, 2003).
(b) Offer Is made to a person absent -
Acceptance may be rnade within such
time that, under normal circumstances,
· an answer can be received from him.
(Pineda, Obligations and Contracts, 425,
2009)
NOTE: For a contract to arise, the acceptance
must be made known to the offeror. Accordingly,
the acceptance can be withdrawn or revoked
before it is made known to the offeror. (Oesmer
v. Paraiso Development Corporation, G.R. No.
15749.'3, 2007).
Rule on complex offers
1. Offers are interrelated - Contract is
perfected if all the offers are accepted-
2. Offers are not Interrelated - Single
acceptance of each offer results in a
perfected contract unless the offerer has
made it clear that one is dependent upon the
other and acceptance of both Is necessary.
(Art. 1319)
3. Offer interpraesentes must be accepted
immediately. If the parties intended that
there should be an express acceptance, the
contract will be perfected only upon
knowledge by the offerer of the express
•
CIVIL LAW
acceptance by the offeree of the offer. An
acceptance which is not made in the manner
prescribe by the offerer is not effective, but a
counter-offer which the offerer may accept
or reject. (Ma/barosa v. Court of Appeals,"
G.R No. 125761, 2003)
Rule on advertisements as offers
1. Business advertisements - Not a definite
offer, but mere invitation to make an offer,
unless it appears otherwise (Art. 1325)
2. Advertisements for Bidders - They are
simply Invitations to make proposals and the
advertiser is not bound to accept the highest
or lowest bidder, unless the contrary
appears (Art. 1326)
Article 1326 of the Civil Code, which specifically
tackles offer and acceptance of bids, provides
that advertisements for bidders are simply
Invitations to make proposals, and that an
advertiser is not bound to accept the highest
bidder unless ·the contrary appears. In the
present case, Section 4.3 of the ASBR explicitly
states that APT'. reserves the right to reject any
or all bids, including the highest bid.
Undoubtedly, APT has a legal rlght to reject the
offer of Dong-A Consortium, notwithstanding that
it submitted the highest bid. (PMO v. STRADEC,
G.R. No. 200402, ~013)
,.
(':
The four (4) theor,les on acceptance of offer
by telegram or letter .
(a) Manifestation ~ perfected from the moment
the acceptance ii, declared or made.
(b) Expedition - perfected from the moment
the offeree transmits the notification of
acceptance.
(c) Reception - perfected from the moment the
offerer receives the letter.
(d) Cognition - perfected from the moment the
acceptance comes to the knowledge of the
offeror. (Jurado. Comments and
Jurisprudence on Obligations and Contracts,
402, 2010)
Note: Contracts under the Civil Code generally
adhere to the Cognition Theory while
transactions under the Code of Commerce
adhere to the Manifestation Theory. (Jurado,
Comments and Jurisprudence on Obligations
and Contracts, 402, 2010)
When the offerer refuses to open the letter or
telegram he is held to have a constructive notice
of the contents thereof and will be bound by the
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acceptance of the offeree. (Jurado, Comments 1. If upon reaching age of MaJorlty, they ratify
and jurisprudence on obligations and contracts, the same. (Ibanez v. Rodriguez, G.R. No.
403-404, 2010) 23153, 1925)
2. They were entered unto by a Guardian and
Options the court having jurisdiction had approved
General rule: lf the offeror has allowed the the same. (Roa v. Roa. G.R. No. 28532,
offeree a certain period to accept, the offer 1929)
may be withdrawn at any time before 3. They were in the form of Savings account
acceptance by communicating such in the Postal Savings Bank, provided
withdrawal. (Art. 1324) furthermore that the minor was at least 7
• Exception: When· the option Is founded years old. (Rev. Adm. Code . Sec. 2007) •
upon a consideration as something paid or 4. They were contracts for Necessaries such
promised. (Art. 1324) as food, but here the persons who ar~
bound 'to give them support· should pay
,, An option, sometimes called an "unaccepted therefor (Arts -. 1489 & 2164; Family Code,
' ~,. I
offer", is simply a contract by which the owner of Art. 194) .
.- .
r• property agrees with another person that he
shall have the right to buy his property at a fixed
5. Contracts whiire the minor misrepresented
his age and pretended to be one of major
price within a certain time. An option is not of age and Is thus in ESTOPPEL. (Hermosa
itself a purchase, but merely secures the v. Zobel, G.Ri No. L-11835, 1958). It is,
privilege to buy. It is not a sale of property but a however, essential here that the other party
x..
sale of the right to purchase. (Ade/fa Properties, must have been MISLED (Bamba/an v.
Inc. v. CA, G.R. No. 111238, 1995) Maramba, G.R. No. L-27710, 1928):
.~· .. HOWEVER, minors can set up the defense
':..... · of minority to resist tile claim when there is
Effects of Option:
~ ...... 1. Not supported by an independent only passive misrepresentation, as when
\'.;,__. consideration (i.e., distinct frorn the they did not disclose their minority because
,~- purchase price) - The offerer can withdraw they had no juridical duty to disclose their
the offer at any time before acceptance by inability. (Braganza v. De Villa Abrille, G.R.
communicating such withdrawal No. L-12471, 1959)
2. Supported by independent consideration -
the offeror cannot withdraw his offer (Art. Note: If both parties to a contract are minors, the
1324) contract is unenforceable. (Art. 1403(3)).

Persons incapacitated to give consent Examples of persons specially disqualified to

(MIDD): enter into contracts (Contracts entered into are
i. Minors (Art. 1327). VOID):
ii. !nsane or demented persons (Art. 1327), 1. Husband and wife selling to one another
unless the contract was entered into during (Art. 1490) or donating to one another (Art.
a lucid interval (Art. 1328) 134)
iii. Qeaf-mutes who do not know how to write 2. Insolvents before they are discharged
!(",
\:~,.)
(Art. 1327). cannot, for example, make payments.
iv. In a state of Q.runkenness or under a (Insolvency Law, Sec. 24)
! ...... , hypnotic spell (Art. 1328) · 3. Persons disqualified because of fiduciary
·,.•. .: relationship (Art. 1491)
,,: ) Contracts entered into by the persons above are
<:.......:- in general valid until annulled; however,
I
annulment cannot prosper when they have been
l
'--·· ratified. (Art.' 1390).

Rule on contracts entered into by minors

• General rule: Voidable (Art. 1391)
Exceptions (N-GEMS) (These contracts are
valid): ·

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Two General Kinds of Mistake

· INCAPACITY DISQUALIFICATION (a) Mistake of Fact - When one or both of the
Restrains the Restrains the very contracting parties believe that a fact exists
exercise of the right right itself when in reality it does not, or that such fact
to contract does not exl~t when in reality it does
May still enter into Absolutely disqualified (Pineda, Obfig~tions and Contracts, 443,
contract through 2009) j';
parent, guardian or ~l
leoal representative (b) Mistake of Law
Based upon Based upon public • General Rule: Mistake does not vitiate
subjective policy and morality consent (Ari. 1331)
·circumstance of
certain person Reason: Ignorance of the law does not excuse
Contracts entered Contracts entered into anyone from compliance therewith (Art. 3)
into are merely are void • Exception: Mutual error as to the legal
voidable effect of an agreement when the real
(Pineda, Obltgat,ons and Contracts, 440, 2009) purpose of the parties is frustrated (Art.
1334).
Causes which vitiate consent
A contract where consent is given through "Legal effect" here refers to the rights of the
Mistake. Violence, . Intimidation, Undue parties as stated in the legal provisions.
Influence, or Fraud ls voidable (VIMFU). (Art.
1330) 2. Violence

1. Mistake Requisites for violence to vitiate consent

Must include both ignorance, which is the
absence of knowledge with respect to a thing,
and mistake properly speaking, which is a wrong
conception about said thing, or a belief in the
existence of some circumstance, fact, or event,
which in reality does not exist. {Theis v. Court of
Appeals, G.R. No. 126013, 1997)
Requisites for mistake to vitiate consent
(FES)
1. · The error must be Substantial regarding:
i. The object of the contract, or
ii. The conditions which principally moved
or induced one of the parties (error in
quality or in quantity), or
iii. Identity of qualifications, but only if such
was the principal cause of the contract
(Art. 1331)
2. The error must be Excusable (not caused
by negligence)
There is no mistake if the party alleging it knew
the doubt, contingency or risk affecting the
object Of the contract. (Art. 1333)
(PF·R)
1. Serious or lrreslstlble Physical Force
2. Such force is the Reason why the contract
was entered into. (Art. 1335)
Note: Violence refers to physical coercion,
intimidation, moral coercion. (Paras, Civil Code
of the Philippines Annotated: Prescription;
Obligationsand 'contracts, 632, 2016)
3. Intimidation
Requisites for i'ntlmldation to vitiate consent
(FReT) ,
1. Reasonable and well-grounded Fear of an
imminent and grave evil upon his person,
property, or upon the person or property of
his spouse, descendants, or ascendants
2. It is the Reason why the contract was
entered into
3. The Ihreat must be of an unjust act, an
actionable wrong (A threat to entorce a just
or legal claim \hrough competent authority
does not vltiate'consent.) (Art. 1335)

3. The error must be mistake of Fact, and not Example: What the 'respondent did was merely
of law. (Luna v. Linetoc, G.R. No. L-48403, inform them of petitioner Edna's conviction in the
1942) criminal cases for estafa. It might have evoked a
sense of fear or dread on the petitioners' part,
but certainly there is nothing unjust, unlawful
or evil in the respondent's act. ... The
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petitioners must remember that petitioner Edna's
conviction was a result of a valid judicial process
and even without the respondent allegedly
"ramtning it into petitioner Victor's throat,"
petitioner Edna's imprisonment would be a legal
consequence of such conviction. (Spouses
Binua v. Ong, G.R. No. 207176, 2014)
Reluctant Consent - It is necessary to
distinguish between real duress and the motive
which is present when one gives his consent
reluctantly. A contract is valid even though one
of the parties entered into it against his wishes
or even against his better judgment. Contracts
are also valid even though they are entered into
by one of the parties without hope of advantage
!#'', or profit. (Martinez v. Hongkong and Shanghai
Bank, G.R. No. L-5496, 1910)
Note: Violence or intimidation shall annul the
obligation, although it may have been employed
by a third person who did not take part in the
contract. (Art. 1336)
4. Undue Influence
Requisites for undue influence to vitiate
consent (DIP)
1 . Improper advantage
2. Power over the will of another
3. Qeprivation of the latter of a reasonable
freedom of choice. (Art. 1337)
Circumstances to be considered (FIRM)
.,~\ (a) Confidential, family, spiritual, and other
Relations between the parties
(b) Mental weakness
{c) Ignorance
~: . '
(d) Financial distress (Art. 1337).
'~~.:
5. Fraud
Fraud in Obtaining Consent
In order that fraud may vitiate consent, it must
be the causal (dolo causante), not merely the
incidental (dolo incidante), inducement to the
making of the contract. (Ponce de Leon v.
Rehabilitation Finance Corporation, G.R. No. L·
· 24571, 1970j
(b) Causal Fraud (Dolo Causante)
• This is the use of insidious words or
f ·,. machinations by one of the contracting
'......../ parties to Induce the other party to enter
into a contract, which, without them, he
{.! would not have agreed to. (Art. 1338)
1· ......... ,I
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CIVIL LAW
• Determines or is the essential cause of
consent
• Is the deception employed by one party
prior to or simultaneous to the contract
in order to secure the consent of the
other. (Metropolitan Fabrics, Inc. v.
Prosperity Credit Resources, Inc., G.R.
No. 154390, 2014)
• Effects: Nullity of the contract and the
indemnification for damages (Gerafdez
•
v. CA, G.R. No. 108253, 1994)
Requisites (PS·SOBIA)
1. There must be misrepresentation or
concealment (Arts. 1338, 1339) by a party
Prior to or Simultaneous to the consent or
creation of the contract.
2. Must be Serious. (Art. 1344)
3. Must have been employed by only One of
the contracting parties. (Art.1342)
4. Must be made in bad faith or with intent to
deceive. (Art. 1343)
5. Must have Induced the consent of the
other contracting party. (Art. 1338)
6. Must be alleged and proved by clear and
convincing evidence, and not merely by a
preponderance thereof. (Tan Sua Sia V.
Sontua, 56 Phil. 711, 1932)
(c) Incidental Fraud (Dolo lncidente)
• Deceptions I or misrepresentations which
are not slirious and without which the
other party\would still have entered into
the contract;
• It is not th~ cause which induced the
party to enter into a contract and refers
only to some particular or accident of the
obligations. (Gerafdez v. CA. G.R. No.
108253, 1994)
• Effect: Only renders the person
employing it liable for damages. (Art.
1344)
SIMULATED CONTRACTS
(a) Absolute - the parties have no intention to
be bound at all (Art. 1345)i void from
beginning (Art. 1346).
(b) Relative - the parties conceal their true
agreement (Art. 1345): the real agreement
binds the parties when:
i. There is no prejudice to 3rd persons; and
ii. It is not contrary to law, moral, good
customs: public order or public policy
(Art. 1,~46)
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NOTE: In absolute simulation, there is a
colorable contract but the parties have no
intention to be bound by it. However, if the
parties state a false cause in the contract to
conceal their real agreement, the contract is
relatively simulated and the parties are still
bound by their real agreement. (Art. 1345;
Valerio v. Refresca, G.R. No. 163687, 2006)
------------------~--------------~···----·-···-·-
CIVIL LAW
8. SUBJECT MATTER
Requisites of things as subject 'matter (W-.
PLOT)
1. Within the commerce of man (Art. 1347) -
either existing or in potency
2. Licit or not contrary to law, morals, good
customs, public order or public policy (Art.
1347)
3. f_ossible, legally or physically (Ari. 1348).
4. Determinate as to its kind or determinable
without need to enter into a new contract
(Art. 1349)
5. Transmissible (Art. 1347)
Requisites of services as subject matter
(PWD)
1. With ii! the commerce of man (Art. 1347)
2. Possible, physically or legally (Art. 1348)
3. peterminate or capable of being made
determinate' (Arts. 1318[2], 1349)
.
Things which cannot be the object of
contract: '
(a) Things which are outside the commerce of
men (Art. 1347)
(b) lntransmissible rights (Art. .,347)
(c) Future inheritance, except in cases
expressly authorized by law (Art. 1347)
(d) Services contrary to law, morals, good
customs. public order or public policy (Art.
1347)
(e) Impossible things or services (Art. 1348).
(f) Objects which are not possible of
determination as to their kind (Art. 1349)
Note: Contracts upon future Inheritance are
void when:
• The succession has not yet been opened;
• The object of the contract forms part of the
inheritance; and
• The promissor has, with respect to the
object, an expectancy of a right, which is
purely hereditary in nature. (De Belen Vda.
De Cabatu v. Tabu, G.R. No. 188417, 2012)
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C. CAUSE OR CONSIDERATION as the cause for the principal contract of

loan. {China Bank v. Lichauco, G.R. No. L-
Definition 22001, 1924)
Refers to the immediate, direct and most 5. Accessory Contracts of Personal
proximate reason which justifies the creation of Guaranty - Generally pure liberality but
c ,,!' .. , an obligation through the will of the contracting sometimes material consideration may be
(_ l parties and is the essential reason for the given. (Standard Oil Co. v. Arenas, G.R. No.
contract. (Uy v. CA, G.R. No. 120465, 1999) L-5921, 1911) :•

Requisites (LET) EFFECT IN CAUSE , EFFECT •

1. It must Exist at the time the contract is Absence Of Causa - Void - Contract
entered into. (Art. 1352, 1409[3]) Total lack or absence produces no legal
2. It must be True. (Art. 1353) of cause effect (Arl.' 1352)
3. It must be :Cicit. (Art. 1352) Illegality Of Causa - Void - Contract
The cause is contrary produces no legal
Motive - refers to the particular reason of one to law, morals, good effect (Art. 1352)
party for entering Into the contract which does customs, public order
not affect the other party nor the validity of the and oublic oollcv
,,, ..... contract; however, when the motive Falsity Of Causa - A Void IF it should not be
predetermines the cause or when the realization cause is stated but it is proved that the
of such motive has been made a condition upon not true contract was founded
which the contract is made to depend, the upon another cause
<,
motive may be regarded as the cause (Uy v. CA, which is true and
G.R. No. 120465, 1999). lawful (Art. 1353)
Causa Not Stated In Presumed to Exist -
Contract Burden of proof is on
the person assailing its
Immediate or direct Remote or indirect existence (Art. 1354)
... ~-~·~~~~~~-+-~-~~-'---,.~~'--~
-c • reason of a contract reason Inadequacy Of Causa General Rule: Does
,-- Objective and juridical Psychological or or Lesion (Art. 1355) not invalldate contract
~ ;'
reason of contract; purely personal
·!..~" .
always known to both reason; may be Exceptions:
r», parties unknown to the other
..._) 1. When, together
arty with lesion, there
Remains the same May vary although a has been: fraud,
regardless of a party's party enters into the mistake or undue
,...-\ motive for entering into same kind of contract influence
:\._) a contract 2. In cases specified
Legality or illegality of Legality or illegality of by law (the ff.
cause affects the motive does not affect contracts may be
existence or validity of the existence or rescinded)
,. -.!
~I
~->'
the contract validit of contract
(De Leon, Comments and Cases on Obligations • Those entered into
and Contracts, 673-674, 2014) by guardians when
the wards suffer
t· Causes in some contracts: lesion by more
·;._.·
1. Onerous contracts - The prestation of than X of the value
promise of a thing or service by the other. of the things which
(Art. 1350) . r, are the object
2. Remuneratory contracts - The service or thereof (Art. 1381,
\'......: benefit remunerated. (Art. 1350) par. 1)
3. · Contracts of Pure Beneficence - Mere • Those agreed
•·.:/
liberality of the donor or benefactor. (Art. upon in
1350) representation of
f. . ,: 4. Accessory Contracts Like Mortgage and absentee, if the
Pledge - The cause Is generally the same latter suffer lesion
:; l
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stated in par. 1
(Art. 1381, par. 2)
• Partition among
co-heirs, when any
one of them
received things
with a value less
by at least Y. than
the share to which
he is entitled (Art.
1098
Moral Obligation as Cause
Where the moral obligation arises wholly
from ethical considerations, unconnected
with any civil obligations, it cannot constitute
a sufficient cause or consideration to
support an onerous contract. (Fisher v.
Robb, G.R. No. 46274, 1939)
• Where such moral obligation is based upon
a previous clvll obligation which hes already
been barred by the statute of limitations at
the time when the contract is entered into, It
constitutes a sufficient cause or
consideration to support a contract. (V/1/aroel
v. EstradFJ, G.R. No. 47362, 1940)
OBJECTS, CAUSES AND FORMS OF
CONTRACTS
FORM refers to the manner in which a contract
is executed or manifested. (De Leon, Comments
and Cases on Obligations and Contracts, 697,
2014). In general, form does not matter for the
validity of a contract. It is enough that there be
consent, object, and cause. (Art. 1356)
(a) Informal Contracts - may be entered into
whatever forrn as long as there is consent,
object and cause
(b) Formal Contracts - required by law to be
in certain specified form, such as donation
of real property, stipulation to pay interest,
transfer of large cattle, sale of land thru
agent, contract of antichresis, contract of
partnership, registration of chattel
mortgage, donation of personal property in
· excess of 5,000. (De Leon, Comments and
Cases on Obligations and Contracts, 699,
701, 2014)
WHEN FORM IS IMPORT ANT:
1. For validity (This Is true in formal or solemn
contracts). (De Leon, Comments and Cases
on Obligations and Contracts, 699, 701,
2014)
•.:,
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CIVIL LAW
2. For enforceability (This is true for the
agreements enumerated under the Statute
of Frauds, but this requirement may be
waived by acceptance of benefits (partial) or
by failure to object to the presentation of oral
(parol) evidence {Ari. 1403)
3. For convenience (This is true for the
contracts enumerated, for example, under
Art. 1358)
General rule: A contract is valid and binding in
whatever form provided that the 3 essential
requisites of a contract (consent, object, and
cause) concur. (Art. 1356)
Exceptions:
i. Law requires the contract to be in some form
for validity (e.g., donation and acceptance of
real property) (Art. 749).
ii. Law requires the contract to be in some form
to be enforceable - Contracts enumerated In
Art. 1403(2) ere valid but cannot be
enforced in court or sued upon unless they
are cured or ratified.
The following agreements shall be
unenforceable by action, unless the same, or
some Mte or mernorandurn, thereof, be In
writing, and subscribed by the party chafged, or
by his agent: (CYS-DLM)
(a) An agreement that by its terms is not to
be performed within a Year from the
making thereof; --
(b) A special promise to answer for the
Debt. defayit, or miscarriage of another;
(c) An agreement made in consideration of
Marriage, other than a mutual promise
to marry; ·;
(d) An aqreernent for the Sale of goods,
chattels or things in action, at a price not
less than five hundred pesos, unless the
buyer accept and receive part of such
goods and chattels, or the evidences, or
some of them, of such things in action or
pay at the time some part of the
purchase money; but when a sale is
made by auction and entry is made by
the auctioneer in his sales book, at the·
time of the sale, of the amount and kind
of property sold, terms of sale, price,
names of the purchasers and person on
whose account the sale is made, it is a
sufficient memorandum
(e) An agreement for the leasing for a
longer period than one year, or for the
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I ()
I sale of real property or of an interest
Ir" therein;
'· J
(f) A representation as to the Credit of a
third person. (Art. 1403)
iii. Law requires the contract to be in some form
for convenience - Contracts enumerated in
Art. 1358 are valid. Formal requirements
are only for the benefit of third parties. Non-
compliance therewith does not adversely
() affect the validity of neither the contract nor
the contractual rights and obligations of the
parties thereunder. (Fule v. CA, G.R. No.
112212. 1998)
The following must appear in a public document:
(a) Contracts whose object Is the creation,
transmisslon, modification or
extlnguishment of real rights over
immovables
(b) Cession, repudiation, renunciation of
hereditary rights or those of the conjugal
partnership of gains
(c) Power to administer property for
another, or any other power which has
for its object an act appearing or which
should appear in a public document, or
should prejudice a third person;
(d) Cession of action of rights proceeding
from an act appearing in a public
document.
(e) All other contracts where the amount
involved exceeds P500 must appear in
writing, even a private one. (Art. 1358)
NOTE: Electronic documents shall have the
legal effect, validity or enforceability as any other
document or legal writing, and where the law
requires a document to be in writing, that
requirement is met by an electronic document if
the said electronlc document maintains its
integrity and reliability and can be authenticated
so as to be usable for subsequent reference (RA
8792, Sec. 7).
!:
;;._ - party, heirs or assigns) (Art. 1367)
·~.,:,•. .I
'~··
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CIVIL LAW
4. REFORMATION OF INSTRUMENTS
As distinguished from annulment where there is
no meeting of the mlnds, In reform::itlon, there ls
meeting of the minds but attended by mistake,
fraud, inequitable conduct, or accident. (Art.
1359)
Requisites for action for reformation (VP-
PIM)
1. Meeting of the minds (Ari. 1359)
2. True Intention is not expressed· (Art. 1359)
3. Clear" and convincing froof (De Leon,
Comments and Cases on Obligations and
Contracts, 713, 2014)
4. Within proper prescriptive f:eriod
5. Not simple unconditional donation inter
vivas or contract where real agreement is
Y.old (Art. 1366)
;,:,
NOTE: In reformation, no new contract is made. ·
Contracts that may be reformed: (CM-TIFF)
(a) Mutual mistake: fails to disclose the real
agreement (butit must be a mistake off.act)
(Art. 1361)
(b) Unilateral mistake or the other party acted
Fraudulently (Art. 1362)
(c) Unilateral mistake and the other party is
guilty of foncealment (Art. 1363)
(d) Person drafting the instrument or clerk or
typist through ignorance, lack of skill,
negfigence or bad faith, does not show the
True Intention (Art. 1364)
(e) Parties agree on M,ortgag~. pledge of real or
personal property but instrument says that it
is sold absolutely or involves a right to
repurchase (Art. 1365)
No reformation is allowed in: (SD·WV)
(a) Simple donation
(b) Wills
(c) Real agreement is yoid (Art. 1366)
Who may ask for reformation:
(a) The party who is not at fault (i.e., injured
(b) Party who is not asked to enforce the
instrument (Art. 1368)
(c) If there is a mutual mistake, reformation
may be had by either party or successor in
interest (Art: 1368)
Procedure for reformation shall be governed by
the Rules of Court as promulgated by the
Supreme Court. (Art. 1369)
ATENEO CENTRAL
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5. INTERPRETATION OF
CONTRACTS
If the terms of the agreement are clear and
unequivocal, their plain and literal meanings
should be followed. (Art. 1370)
In the construction or interpretation of an
instrument, the intention of the parties is
primordial and is to be pursued. (Valdez v. CA,
G.R. No. 140715, 2004)
In order to judge the intention of the contracting
parties, their contemporaneous and subsequent
acts shall be principally considered. (Art. 1371)
In case of doubt concerning the surrounding
circumstances in the execution of a contract, the
least transmission of rights and interest shall
prevail if the contract is gratuitous, and if
onerous, the doubt is to be settled in favor of
greatest reciprocity. (Art. 1378)
The terms of an agreement or writing are
presumed to be have been used in their primary
and general acceptation. However, evidence
may be admitted to show that they have a local,
technical, or otherwise peculiar signification and
were used and understood in that particular
instance, in which case, the agreement or writing
must be construed accordingly. (Rutes of Court,
Rule 30, Sec 14)
Only laws existing at the time of the execution of
a contract are applicable to it and not the later
statutes unless the latter are speclflcally
intended to have retroactive effect. (Vive Eagle
Land, Inc. v. CA. G.R. No. 150308, 2004)
When there are several provisions in a contract,
the construction to be adopted should be that
one which will give effect to all provisions. A
contract must be read in its entirety. (Rigor v.
Consolidated Orix Leasing Finance Corporation,
G.R. No. 136423, 2002)
The ambiguity in a contract should be construed
against the party who caused the- same. (Art.
1377)
CONTRACT OF ADHESION: Its terms are
prepared by only one party while the other party
merely affixes his signature signifying his
admission thereto. It is binding as ordinary
contracts the reason being that the party who
CIVIL LAW
adheres to it is free to reject its entirety. It is
stricken down as void when the weaker party is
imposed upon in dealing with the dominant
bargaining party and is reduced to the
alternative of taking it or leaving it, completely
deprived of the opportunity to bargain on equal
footing. (Dio v.. St. Ferdinand Memorial Park,
Inc., G.R. No. 169578, 2006)
6. RESCISSlBLE CONTRACTS
DEFINITION
Those which have'. caused economic damage
either to one of th~ parties or to a third person
and which may be set aside even if valid. They
may be set aside in whole or in part, to the
extent of the damage caused. (Tolentino,
Commentaries and Jurisprudence on the Civil
Code of the Philippines Volume IV, 574, 1991)
Resclsslble Contracts under Art. 1381: (ALL·
GF)
(a) Entered into by .§uardian whenever ward
suffers damage by more than 1/4 of value of
object;
(b) Agreed upon in representation of
,Absentees, if absentee suffers lesion by
more than X of value of property;
(c) Contracts where rescission is based on
fraud committed on creditors (accion
pau/iana); ' ·
(d) Objects of .!:.itigation; contract entered into
by defendant without knowledge or approval
of litigants or judicial authority; and
Contracts involving things under litigation are
rescissible. Art. 1381 (4) requires the
concurrence of the following: (1) the defendant,
during the pendency of the case, enters into a
contract which refers to the subject of litigation;
and (2) said contract was entered into without
the knowledge and approval of the litigants or of
a competent judicial authority. The court then
has the duty to order the rescission of the
contract upon the concurrence of such
requisites. (Ada' v. Baylon, G.R. No. 182435,
2012)
(e) Provided for by !:_aw - e.g. Arts. 1526, 1534,
1539, 1542, 155_?• 1560, 1567 and 1659
I~
i. Art. 1526 .::.: Unpaid seller of goods,
notwithstand,ing that the ownership in
the goods may have passed to the
buyer, subject to other provisions on
Sales
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(l
ii. Art. 1534 - Unpaid seller having the
!j L('""'.) right of lien or having stopped the goods
in transit, where he expressly reserved
! his right to do so in case the buyer
! () should make default, or the buyer has
I been in default in the payment of the
i (~ 'j
I.., I price for an unreasonable time
iii. Art. 1539 - In the sale of real estate at a
rate of a certain price for a unit of
measure or number, at the will of the
vendee, when the inferior value o~ the
thing sold exceeds one-tenth of the price •
,,... .. ,
agreed upon, or if the vendee would not
t_i
have bought the immovable had he
known of its smaller area or inferior
quality
(·
iv. Art. 1542 - In the sale of real estate,
\ made for a lump sum; where the
A' •••
boundaries are mentioned and the area
: or number within the boundaries exceed
'·.
that specified in the contract, when the
.,~- vendee does not accede to the failure to
\....'
deliver what has been stipulated
r-. v. Art. 1556 - Should the vendee lose, by
t· reason of eviction, a part of the thing
rr >. sold of such importance, in relation to
'- .' the whole, that he would not have
bought it without said part
vi. Art. 1560 - Vendee may ask for
recession if the immovable sold should
be encumbered with any non-apparent
burden or servitude, not mentioned in
,.., the agreement, of such a nature that it
:. J
"··· must be presumed that the vendee
would not have acquired it had he been
aware thereof
vii. Art. 1567 - In cases of breach of
warranty against hidden defects of or
encumbrances upon the thing sold
viii. Art. 1659 - If the lessor or lessee
should not comply with their obligations,
the aggrieved party may ask for
rescission
Accion paullana refers to the action to rescind
contracts in fraud of creditors under Art. 1381.
· ~...:/
Requisites: (NR-CAFS)
·-...•..i 1. The plaintiff asking for rescissron has a
Credit prior to the alienation, although
demandable later;
2. The debtor has made a Subsequent contract
conveying a patrimonial benefit to a third
u person;
3. The creditor has !fo other legal Bemedy to
satisfy his claim;
~ .. .,,'
•
CIVIL LAW
4. The act being impugned is fraudulent;
5. The third person who received the property
conveyed, if it is by onerous title, has been
an ~ccomplice in the fraud. (Anchor Savings
Bank v. Furigay, 2013; Lee v. Bangkok Bank
Public Company, Limited, G.R. No. 173349,
2011)
Under Art. 1382, payments made in a state of ·•
Insolvency for obligations to whose fulfillment the
debtor could. not be compelled at the time they
were effected are also rescissible.
Requisites:
1. The debtor-payer must have been insolvent
(the insolvency need not be a judicially
declared on.e).
2. The debt was not yet due and demandable
(Art. 1382) .
Obligation created by the rescission of the
contract
Mutual Restitution
1. Things which are the objects of the contract
and their fruits
2. Price with interest (Art. 1385)
NOTE: The obligation of restitution obviously
does not apply to creditors who seek to impugn
fraudulent transactions of their debtors. The
obligation of mutual restitution applies to
OTHERS so that that status quo may be
restored (Paras).
Requisites: (4-TRR)
1. Plaintiff must be able to Return what has
been received. by virtue of the rescissible
contract (Art. 13:85).
2. Object of the contract is not in the legal
possession of Ihird persons in good faith.
(Art. 1385).
3. Plaintiff no other legal Bemedy. (Art. 1383).
4. Action must be brought within the proper
prescriptive period of~ years. (Art. 1389).
BADGES OF FRAUD are circumstances
indicating that certain allenatlcn has been made
in fraud of creditors. Some examples are:
i. Consideration of the conveyance is
inadequate or fictitious;
ii. Transfer was made by a debtor after a suit
has been begun and while it is pending
against him;
iii. Sale upon credit by an insolvent debtor;
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 ATENEO CENTRAL
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iv. Evidence of Indebtedness or complete
insolvency;
v. Transfer of all his property by a debtor when
he Is flnanclally embarrassed or Insolvent;
vi. Transfer made between fath@r and son
where this fact is considered together with
the preceding circumstances; and
vii. Failure of the vendee to take exclusive
possession of the property (Ca/lex
Philippines, Inc. v. PNOC Shipping and
Transport Corporation G.R. No. 150711,
2006)
The presumption of fraud in case of alienations
by onerous title of a person against whom a
judgment has been rendered or attachment
issued does not apply to registered lands if the
judgment or attachment made is not also
registered. (Lee v. Bangkok Bank, G.R. No.
173349, 2011)
7. VOIDABLE CONTRACTS
Definition
Intrinsic defect; valid until annulled; defect is due
to vice of consent or legal incapacity (Pineda,
Obligations and Contracts, 601-602, 2009)
Characteristics (ACED)
(a) gffectlve until set aside
(b) May be assailed or attacked
only In an Action for that
purpose
(c) Can be Qonflrmed
Not&: Confirmation is the proper term for curlhg
the defect of a voidable contract.
(d) Can be assailed only by the
party whose consent was
.Qefective or his heirs or assigns
What contracts are voidable:
Contracts entered into: (SIM-03)
(a) By ,Minors (Art. 1327)
(b) By [nsane unless he/she acted during a
lucid interval (Art. 1327, 1328)
(c) By .Qeaf mute who can't read or write (Art.
1327)
(d) By Persons specially .Qisqualified: civil
Interdiction (Art. 1328, 38) ·
(e) In state of Qrunkenness (Art. 1328)
(f) In state of hypnotic §.pell (Art. 1328)
Mistake
False belief of something which is contrary to the
real intention of the parties (Pineda, Obligations
and Contracts, 443, 2009)
CIVIL LAW
Requisites: (CP·SEN)
1. Refers to the .§ubject of the thing which
Is the object of the contract
2. ~efers ,to the Nature of the contraet
3. Refers .to the principal £onditlOl'ls in an
agreement (Pineda, Obligations and
Contracts, 443, 2009)
4. Error as to ferson - When it is the
principal consideration of the contract
5. Error as to legal gffect - When mistake
is mutual and frustrates the real purpose
of parties (Art. 1334)
Violence
Serious or irresistible force Is employed to wrest
consent (Art. 1335)
Intimidation
One party is compelled by a reasonable and
well-grounded fear of an imminent and grave
danger upon person and property of himself,
spouse, ascendants or descendants (moral
coercion) (Art. 1335)
~i:
Unduelnfluence i
Person takes improper advantage of his power
over will of another.depriving latter of reasonable
freedom of choice (~rt. 1337)
The doctrine on reluctant consent provides that
a contract is still valid even if one of the parties
entered it against his wishes or even against his
better Judgment. Contracts are also valld even
tl'lough they are E!ntered Into by one of the
parties Wlth6Llt hope c,f advantage or profit.
(Martinet v. HSBC, G.R. No. L-5496, 1910)
Fraud
Thru insidious words or machinations of one of
the contracting parties, the other is induced to
enter into a contract without which he will not
enter it (dolo causante). (Samson v. CA, G.R.
No. 108245, 1994)
KINDS OF FRAUD IN THE PERFORMANCE
OF OBLIGATION OR CONTRACTS
(a) Causal Fraud (dolo causante) - deception
of serious character without which the other
party would not have entered into; contract
is voidable (Art. 1338).
(b) Incidental Fraud (dolo incidente)
deception which are not serious and without
which the other party would still have
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entered into the contract; holds the guilty said Contract, after having acquired knowledge
party liable for damages (Art. 1344). of the property's actual location, can be
(c) Tolerated Fraud - Includes minimizing the construed as an Implied ratification thereof.
defects of the thing, exaggeration of its god
qualities and giving it qualities it does not Implied ratification may take diverse forms, such
have; lawful misrepresentation (Art. 1340) as by silence or acquiescence; by acts showing
approval or adoption of the contract; or by
Note: acceptance and retention of benefits flowing •
Expression of an opinion - not fraud unless therefrom. (EGE Realty v. Mandap, G.R. No.
made by expert and other party relied on. the 196182, 201_4) ::.1,
r---,
\ ... ) forrner's special knowledge (Art. 1341)
3. Loss of the Thing which is the object of the
Fraud by third person - does not vitiate contract through fraud or fault of the person who
consent; only action for damages except if there is entitled to annul the contract. (A1t. 1401)
r>. is collusion between one party and the third
:· I
·. ... person, or resulted to substantial mistake, Note: If the object is lost through a fortuitous
.. . ..
,· .. ,
. mutual between parties. (Art. 1342) event, the contract can still be annulled, but the
person obliged to return the same can be held
,. . Causes of e)Ctlnctlon of the action to annul lleble only for the value of the thing at the time of
1. Prescription • Period to bring an action for the loss, but without interest thereon. (Tolentino,
Annulment Commentaries and Jurisprudence on the Civil
Code of the Philippines, 614, 1991)
(a) Intimidation, violence, undue influence
- 4 years from lime defect of consent Ratification cleanses the contract Of its defects
ceases from the moment it was constituted. (Art. 1396)
r, (b) Mistake, fraud - 4 years from time of
(
'.:I ... discovery 8. UNENFORCEABLE CONTRACTS
(c) Incapacity - From time guardianship
ceases (Art. 1391)
Definition
("' -,
Discovery of fraud must be reckoned to have They are valid'. but the execution cannot be
\.) compelled unless ratified; extrinsic defect;
taken place from the time the document was
,. . . ... registered in the office of the register of deeds. produce legal effects only after ratified
~) Registration constitutes constructive notice to
,·-.,., the whole world (Carantes v. CA, G.R. No. L- Kinds: (URA)
..... ., 33360, 1977). (a) gnauthorized or no sufficient authority -
Entered into in the name of another when:
=·
:.
·- J
I
2. Ratification (Art. 1404)
i. No authority conferred (Art. 1317)
Requisites: (WaCK) ii. In excess of authority conferred (ultra
(a) ~nowledge Of reason rendering contract vires) (Art: 1317)
voidable (Art. 1393) (b) Curable by Ratification - Both parties
(b) Such reason must have £,eased (Art. incapable of giving consent (2 minor or 2
1393) insane persons) (Art. 1407)
' '.
{~

.. Except in case of ratification effected by the (c) Curable by ~cknowledgment - Failure to

guardian to contracts entered into by an
incapacitated, (Art. 1394)
(c) The injured party must have executed
· an act which expressly ·or impliedly
·~. ..)
comply with Statute of Frauds. (Art. 1405)
Statute of Frauds
(a) Agreement to be performed withln a year

conveys an intention to Waive his right after making contract

(Art. 1393) (b) Special promise. to answer for debt, default
or miscarriage of another
, ' Even assuming that petitioner's (c) Agreement made in consideration of
: •• .,>
misrepresentation consists of fraud which could promise to marry
be a ground for annulling their Contract to Sell, (d) Agreement for isale of goods, chattels or
a/ '; things in action 'at price not less than 500;
~' respondent's act of affixing her signature to the
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exception: auction when recorded sale in
sales book
(e) Agreement for lease of property for more
than one year and sale of real property
regardless of price
(f) Representation as to credit of another (Art.
1403 (2))
Two Ways of Curing Unenforceable
Contracts
(a) Failure of defendant to object in time, to
the presentation of parole evidence in court,
the defect of unenforceability is cured
(b) Acceptance of benefits under the
contract. If there is performance In either
part and there is acceptance of
performance, it takes it out of unenforceable
contracts; also estoppel sets in by accepting
performance, the defect Is waived. (Art.
1405)
NOTE:
• The contracts/agreements under the Statute
of Frauds require that the same be
evidenced by some note or memorandum or
writing, subscribed by the party charged or
by his agent, otherwise, the said contracts
shall be unenforceable. (Art. 1403)
• The Statute of Frauds applies only to
executory contracts, not to those that are
partially or completely fulfilled. (Carbonnel v.
Poncio, G.R. No. L-11231, 1958)
9. VOID OR INEXISTENT
CONTRACTS
Definition
These contracts have no legal effect (Modina v.
CA, G.R. No. 109355, 1999)
Characteristics:
1. It produces no effect whatsoever either
against or in favor of anyone: (Modina v. CA, ·
G.R. No. 109355, 1999)
2. There is no action for annulment necessary
as such is ipso jure. A judicial declaration
to that effect is merely a declaration;
3. It cannot be confirmed, ratified or cured;
NOTE: Assuming that the nullified ... resolutions
may be deemed as contracts, we declared in our
[previous ruling} that the infirmity in the nullified
... resolutions did not stem from the absence of
consent or authority, which would have made
them unenforceable contracts under Article 1401
CIVIL LAW
(1) of the Civil Code. The infirmity comes from
the failure of thei. NPC to comply with the
requirements set for,th in the EPIRA.
On this basis, they" cannot be classifled as an
unenforceable contract under Article 1403 (1) of
the Civil Code, but as void contracts under
Article 1409 (7) of the Civil Code for being
"expressly prohibited or declared void by law."
The last paragraph of Article 1409 of the Civil
Code expressly provides that void contracts
cannot be ratified. (NPC DAMA v. NPC, G.R.
No. 156208, 2014)
4. If performed, restoration is in order, except if
pari delicto will apply; (Art. 1411, 1412)
5. The right to set up the defense of nullity
cannot be waived; (Art. 1409)
6. lmprescrlptible (Art. 1410); and
7. Anyone may invoke the nullity of the
contract whenever its juridical effects are
asserted against him (Art. 1421)
Kinds of void contract: (Art. 1409)
(a) Those Lacking In essential elements:
No consent, no object, no cause (inexistent
ones) - essential formalities are not complied
with
Example: Donation propter nuptias - Should
conform to formalities of a donation to be valid)
i. Those ,which are absolutely simulated
or fictitious - no cause
An absolutely simulated or fictitious contract is
void, and the parties may recover from each
other what they may have given under the
contract. In absolute simulation, there is a
colorable contract but it has no substance as the
parties have no intention to be bound by it.
(Heirs of Dr. Mario S. lntac and Angelina
Mendoza-lntac v. c~. G.R. 173211, 2012).
ii. Those which cause or object did not
exist at th~ time of the transaction - no
cause/object
iii. Those whose object is outside the
commerce of man - no object
iv. Those which contemplate an
impossible service - no object
v. Those which intention of parties
relative to principal object of the
contract cannot be ascertained
(b) Prohibited by law
(c) Those expressly prohibited or declared
void by law - Contracts w/c violate any
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Ir·, •
\ .
I

legal provision, whether it amounts to a
crime or not
(d) Illegal/Illicit ones - Those whose cause,
object or purpose is contrary to law, morals,
good customs, public order or public policy;
Example: Contract to sell marijuana
Other void contracts:
(a) Pactum Commissorlum (Arts. 2088, 2130,
1~0 . accomplishect and if damage has not been
Elements: (MAp)
r:
., l 1. There should be a property Mortgaged
'-...../
by way of security for the payment of the
principal obligation.
2. There should be a stipulation for
automatic ~propriation by the creditor
of the thing mortgaged in case of non-
payment of the principal obligation within
the stipulated period. (Development
Bank of the Philippines v. CA, G.R. No.
,...
''•,
118342, 1998)
(b) Pactum De Nan Al/enando (Art. 2130)
'•.;,._
• A stipulation forbidding the owner from
alienating the immovable mortgaged shall
be void.
• It is a clause in a mortgage giving the
·.__ . mortgagee the right to foreclose by
executory process directed solely against
the mortgagor and giving him or her the
right to seize and sell the mortgaged
,.. ' property, regardless of any subsequent
.;,)
alienations.
(c) Pactum Leonlna (Art. 1799)
A stipulation which excludes one or more
partners from any share in profit or loss is void.
,·'
'~ I
ILLEGAL CONTRACTS
Pari De/icto Doctrine
..... ,·
General Rule:
• Both parties are guilty, no action against
·~·-"
each other; (Art. 1412)
• Those who come in equity must come with
\. ,. .. clean hands; (Department of Public Works
and Highways v. Qulwa, G.R. No. 183444,
{ '
20·12) . .
Applies only to illegal contracts and not to
inexistent contracts;
• Does not apply when a superior public policy
intervenes.
ground that his conduct has been inequitable,
unfair and dishonest, or fraudulent, or deceitful
as to the controversy in issue." Bad faith and
fraud are allegations of fact that demand clear
and convincing proof. (Department of Public
Works and Highways v. Quiwa, G.R. No. 183444,
2012) .
•
Exception: If purpose has not yet been
caused to any 3'd person.
Other exceptions:
L Payment of usurious interest. (Art. 1413)
ii. Payment of money or delivery of property for
an illegal purpose, where the party who paid
or delivered repudiates the contract before
the purpose has been accomplished, or
before any 'damage has been caused to a·
third person, (Art. 1414)
iii. Payment of money or delivery of property
made by an incapacitated person. (Art.
1415)
iv. Agreement or contract which is not illegal
per se and the 'prchlbitlon ls designed for the
protection of th~ plaintiff. (Art. 1416)
v. Payment of ar)y amount in excess of the
maximum price': of any article or commodity
fixed by law ¢r regulation by competent
authority. (Art. 1417)
vi. Contract whereby a laborer undertakes to
work longer than the maximum number of
hours fixed by law (Art. 1418, 1419)
vii. One who lost in gambling because of
fraudulent schemes practiced on him is
allowed to recover his losses (RPC, Art.
313) even if gambling is prohibited.
Requisites of Illegal Contracts:
1. Contract is for an illegal purpose;
2. Contract must be repudiated by any of the
parties before purpose is accomplished or
damage is caused to third parties; and
3. Court believes that public interest will be
served by allowing recovery (discretionary
upon the court).
• Based oh remorse;
• Illegality is accomplished when parties
entered into contract;
• Before it takes effect - Party which is
remorseful prevents it.

The Clean Hands Doctrine states that "a litigant

may be denied relief by a court of equity on the
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Where laws are issued to protect certain
sectors: consumer protection, labor, and
usury law
(a) Consumer Protection - If price of
commodity is determined by statute, any
person paying an amount in excess of the
maximum price allowed may recover such
excess. (Art. 1417)
(b) Labor - If the law sets the minimum wage
for laborers, any laborer who agreed to
receive less may still be entitled to recover
the deficiency; if the law sets max working
· hours· and laborer who undertakes to work
longer may demand additional
compensation. (Art. 1418, 1419)
(c) Interest paid in excess of the interest
allowed by the usury law may be recovered
by debtor with Interest from date of payment.
(Art. 1413)
Effects of Illegal contracts
1. If one party is incapacitated, courts may
allow recovery of money, property delivered
by incapacitated person in the interest of
justice. (Art. 1415)
• Pari delicto doctrine cannot apply
because an incapacitated person does
not know what he is entering into and is
unable to understand the consequences
of his own action.
2. If agreement is not illegal per se but merely
prohibited and prohibition is designated for
the protection of the plaintiff - may recover
what he has paid or delivered by virtue of
public policy. (Art. 1416)
3. If a subsequent contract results directly
because of a previous illegal contract, the
subsequent contract is also void and
inexistent. "The illegality of the Sub-Contract
Agreement necessarily affects the [resulting]
Deed of Assignment because the rule.is that
an illegal agreernent cannot give birth to a
valid contract. To rule otherwise is to
sanction the act of entering into transaction
the object of which is expressly prohibited by
law and thereafter execute an apparently
valid contract to subterfuge the illegality. The
legal proscription in such an instance will be
easily ren.dered nugatory and meanlngless
to the prejudice of the general public."
(Gonzalo v. Terneie, G.R. No. 160600,
2014)
CIVIL LAW
Mutual restitution In void contracts
General rule: Parties should return to each
other what they have given by virtue of the void
contract In case
Where nullity arose from defect in essential
elements
1. Return object of contract and fruits
2. Return price plus interest
Exception: No recovery can be had in cases
where nullity of contract arose from illegality of
contract where parties are in pari delicto. (Art.
141·2)
'f
Exceptions to the:.exception:
1. When incapacitated - Not obliged to return
what he gave but may recover what he has
given ' ·
2. Other party is less guilty or not guilty. (Art.
1412)
---- end of topic----
C. NATURAL OBLIGATIONS
Natural obligations, not being based on positive
law but on equity and natural law, do not grant a
right of action to enforce their performance, but
after voluntary fulfillment by the obligor, they
authorize the retention of what has been
delivered or rendered by reason thereof. (Art.
1423j
Examples of natural obligations enumerated
under the Cfvil Code:
i. Performance after the civil obligation has
prescribed
ii. Reimbursement of a third person for a debt
that has prescribed
iii. Restitution by minor after annulment of
contract
iv. Delivery by minor of money or fungible thing
in fulfillment of obligation
v. Performance after action to enforce civil
obligation has failed
vi. Payment by heir of debt exceeding value of
property Inherited
vii. Payment of legacy after will has ·been
declared void. (Arts. 1423·1430)
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D.ESTOPPEL Requisites of esteppel by laches (CLIO)

1. Conduct ori the part of the defendant, or
Estoppel - a condition or state by virtue of
of one under whom he claims, giving
rise to the ~ituation of which complaint is
~<"' 1 which an admission or representation is
·-· rendered conclusive upon the person making it made;
2. Delay in asserting the complainant's
and cannot be denied or disproved as against
right, the complainant having had
the person relying thereon. (Aris. 1431)
knowledge or notice of the defendant's •
conduct and having been afforded an
Estoppel is effective only between the partles
opportunity to sue; actual knowledge Of
r:<, thereto or their successors in interest. (Art. •
\~ j the commission of the adverse act is not
1439)
necessary, it being enough that such
knowledge may be imputed to the
Kinds:
complainant because of circumstances
1. Estoppal in pais (by conduct)
of which he was cognizant;
a. Estoppel by silence
3. Lack of knowledge or notice on the part
b. Estoppal by acceptance of
., .. ) of the defendant that the complainant
't ,, benefits
would assert the right on which he
2. Technical estoppal
bases his suit; and
a. Estoppal by deed
4. · !nJury or prejudice to the defendant in
b. Estoppal by record
the event relief is accorded to the
c. Estoppal by judgment
complainant, or the suit is not held to be
d. Estoppel by laches
barred. (Cimafrancia v. /AC, G.R. No. L-
68687, 1987)
Requisites of estoppel in pais
A. As related to the party to be estopped
r: I ---- end of topic ---
I
~. .. ' (CIK)
1. Conduct which amounts to a false
..,..- representation or concealment of
material facts, or at least which Is
calculated to convey the impression that
the facts are otherwise than, and
inconsistent with those which the party
subsequently attempts to assert;
,:--
2. Intention or at least the expectation, that
. l
~. .. such conduct shall be acted upon, or
influence, the other party or other
.:.:..:
\,
I
.I
.
I persons;
3. Knowledge, actual or constructive, of
,( ·. the real facts
\ ... !:
,\1
B. As related to the party claiming the
estoppel (IRA)
1. Ignorance or lack of knowledge and of
.._ ... the means of knowledge of the truth as
to the facts in question
tl

\;;;, .•
2. Reliance in good faith, upon the conduct
or statement of the party to be estopped;
and
3. Action or inaction based thereon of such
acharacter as to change the position or
status of the party claiming the estoppal,
r . to his injury, detriment, or prejudice.
.......
..:.:.. (Manila International Airporl Authority v .
Ding Velayo Sports Center, lnc., G.R.
No. 161718, 2011)

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E.TRUSTS
TRUSl' (Art. 1441). STIPULATION POUR
A. DEFINITION · AUTRUI (Mamaril v
BSP, GR No
Trust - A fiduciary relationship between a '· · 179382, 2013) ·
person who establishes a trust (trustor), one in Arises either by virtue Arises only by virtue
whom confidence is reposed as regards property of a contract qr by of a contract
for the benefit of another person (trustee), and a o eration of law
person for whose benefit the trust has been Either express or Always express
created (beneficiary). (Art. 1440) im lied
Continues to exist Third person must
It is a legal relationship between one person who unless repudiated have communicated
has equitable ownership of the property and his acceptance to the
another who owns the legal title to the property. obligor before its
(Oco v. Limbaring, G.R. No. 161298, 2006) revocation by the
obligee or the original
Characteristics of a Trust arties
1. It is a relationship;
2. Fiduciary; Trustees Cannot Donate Property In Trust
3. Created by law or agreement Trustees cannot donate the property entrusted
4. Involves property, not merely personal to them. (Art. 736)
duties;
5. Where the legal title is held by one, the NOTE: The principles of the general law of
equitable title or beneficial title is held by trusts, Insofar as they are not in conflict with the
another Civil Code, the Code of Commerce, the Rules of
6. Involves the existence of equitable duties Court and special laws applies. (Art. 1442)
imposed upon the holder of the title to the
property to deal with it for the benefit of B. KINDS OF TRUST
another; and
7. Arises as a result of a manifestation of A. Express Trust • created by express
intention. to create the relationship. (Morales agreement of th,e parties, or by intention of
v. CA, o.n. No. 117228, 1997) ,,
trustor. (Art. 144!1)
. i.
Parties to a Trust Requisites In Creating an Express Trust
1. Trustor - The person who establishes the 1. Clear intent to esteblish trust; (Art. 1444)
trust. 2. Direct and positive acts of the parties
2. Trustee - The person in whom confidence evidence the intention to create trust by
is reposed as regards property for the means of:
benefit of another. a. Writing;
3. Beneficiary - The person for whose benefit b. Deed;
the trust has beer. created. (Peneiber v. c. Will;
Ramos, G.R. Nb. 178645, 2009) d. Words. (Canezo v. Rojas, G.R: No.
148788, 2007)

NOTE: No particular words are required for the

creation of an express trust, it being sufficient
that a trust is clearly intended. (Art. 1444)

Proof Required for Express Trusts

Concerning Immovables
No express trust concerning an immovable or
any interest therein may be proved by parol
evidence. (Arl. 1443)

Note: To prove an express trust over an

immovable or any interest therein, there must
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always be a showing of some documents d) Happening of a resolutory condition;

proving the same. (Pascual v. Meneses, G.R. e) Total loss of the object of the trust;
No. L-18838, 1967) f) Annulment or rescission of the trust;
.
~·~·,, .

~-
'
I
Requisites for Creating a Testamentary Trust
g)
h)
Decision of the court declaring termination;
Merger of the rights of the trustor and the
.(' \ 1. Sufficient words to raise a trust; trustee;
~. J
2. Definite subject; i) Prescription.
3. Certain or ascertained object. (Lorenzo v.
Posadas, Jr., G.R. No. L-43082,1937) 2. Implied Trust
Basis of implied trust is equity
,r.··· -,
(_.j On Declining Trustees Implied trusts are remedies against unjust
General Rule: No trust shall fail because the enrichment. Under the general principles on trust,
trustee appointed declines the designation. (Art. equity converts the holder of property right as
1445) trustee for the benefit of another if the
circumstances of . ilts acquisition makes the
NOTE: In case of refusal to accept an express holder ineligible in;good conscience to hold and
c .. , trust, the court will appoint a trustee. enjoy it. (Juan v. !,Yap, Sr., G.R. No. 182177,
' .'
v. 2011)
Exception: When the contrary appears in the ·1
c·
,, .
, t
instrument constituting the trust. (Art. 1445) Chapter on Implied Trusts is not an exclusive
lfst
( Acceptance by Beneficiary The chapter on implied trust does not exclude
'- ...
Acceptance by the beneficiary is necessary. If others established by the general law of trust
the he repudiates or declines. the trust does not which do not violate our rules and laws. (Art.
become effective. (Art. 1446) 1447)

NOTE: The beneficiary's acceptance shall be When there is no trust

presumed if the trust imposes no onerous A trust will not be created when for the purpose
condition upon the beneficiary and if there is no of evading the law prohibiting one from taking or
proof to the contrary. (Art. 1446) holding real property, one takes conveyance
thereof in the name of a third person. (Kiel v.
On Acquisitive Prescription Estate of Saberi, G.R. No. 21639, 1924)
s=, General Rule: A trustee cannot acquire
'•.::........·. ownership of property entrusted to him through If there is an express intention to create a trust.
prescription, as possession of a trustee is not the trust is express and not implied, even if the
adverse. (Canezo v. Rojas, G.R. No. 148788, situations falls under any of the provisions in this
2007) chapter. (Cuaycong v. Cuaycong, G.R. No. L-
21616, 1967)
Exception: (REKA)
1. Trustee performed unequivocal acts of Resulting Trust vs. Constructive Trust·
repudiation amounting to an ouster of O'Laco v. Co Cho Chit, G.R. No. 58010. 1993
the cestui que trust;
2. Positive acts of repudiation have been
made ,!inown to the cestui que trust; Based on the Created by the
3. ~vidence is clear and conclusive: and equitable doctrine construction of equity in
4. Adverse possession of the trustee must that valuable order to satisfy the
be at least 10 years in the concept of an consideration & not demands of justice &
owner. (Canezo v. Rojas, G.R. No. legal title prevent unjust
148788, 2007) determines enrichment
equitable title or
Note: Above elements must concur. interest; presumed
to always have been
Extinguishment of an Express Trust contemplated by the
a) Accomplishment of the aims of the trust; arties
b) Expiration Of the agreed term; Arise from the Arise contrary to
c) Mutual agreement of all parties; nature or :\ intention a ainst one
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circumstances of who, by fraud, duress

the consideration or abuse of confidence,
involved in a obtains or hold the
transaction whereb.y legal right to property,
one person thereby which he ought not, in
becomes invested equity, & good
with legal title but is conscience, to hold
obligated in equity
to hold his legal title
for the benefit of
another
A constructive trust does not arise on every
moral wrong in acquiring or holding property or
on every abuse of confidence in business or
other affairs; such a trust arises & will be
declared only on wrongful acquisitions or
retentions of property of which equity takes
cognizance. It has been broadly ruled that a
breach of confidence although in business or
social relations, rendering an acquisition or
retention of property by one person
unconscionable against another, raises a
constructive trust. (Policarpio v. CA, G.R. No.
116211, 1997)
Implied Trust When Property is Granted to
One/Trustee But Price Is Paid by Another for
the Interest of Beneficiary
There is an implied trust when property is sold, &
the legal estate is granted to one party but the
price is paid by another for the purpose of
having the beneficial interest of the property.
The former is the trustee, while the latter is the
beneficiary. However, if the person to whom the
title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the
sale, no trust is implied by law, it being
disputably presumed that there is a gift in favor
of the child. (Art. 1448)
Elements of purchase money resulting trust
1. Actual payment of money, property, or
service, Or an equivalent valuable
consideration; and
2. Such consideration must be furnished by
the alleged beneficiary of a resulting trust.
(Trinidad v. lmson, G.R.. No. 197728, 2015)
Burden of proof
The burden of proving the existence of a trust is
on the party asserting existence of trust, and
such proof must be clearl and satisfactorily show
the existence of the trust and its elements.
(Jarantilla, Jr. v. Jarantllla, G.R. No. 154486,
2010)
2. lmpiied Trust In Donation
There is also an implied trust when a donation is
made to a person but it appears that although
the legal estate is' transmitted to the donee, he
nevertheless is either to have no beneficial
interest or only a p~rt thereof. (Art. 1449)
...
3. Implied Trust in/Sale of Property
If the price of a sale of property is loaned or paid
by one person for the benefit of another & the
conveyance is made to the lender or payer to
secure the payment of the debt, a trust arises by
operation of law in favor of the person to whom
the money is loaned or for whom It Is paid. The
latter may redeem the property & compel a
conveyance thereof to him. (Art. 1450)
Constructive trust
Article 1450 is an illustration .of an Implied trust
which is constructive. It presupposes a situation
where a person, using his own funds, purchases
a certain piece of land in behalf of another who,
in the meantime, may not have sufficient funds
to purchase the land. The property is then
transferred in the name of the trustee, the
person who paid for the land, until he is
reimbursed by the beneficiary, the person for
whom the land is purchased. It is only after the
beneficiary reimburses the trustee of the
purchase price that the former can compel
conveyance of the purchased property from the
latter. (Nakpil v. /AC, G.R. No. 74449, 1993)
4. Implied Trust in Succession
When land passes by succession to any person
& he causes the legal title to be put in the name
of another, a trust is established by implication of
law for the bene~t of the true owner. (Ari. 1451)
This article provides for a resulting trust there
being a clear intention to establish a trust. The
refers to inherited land. There is no good reason
why the principle cannot apply to personal
properties.
,,
5. Implied Trust in 'co-Ownership
,.
If two or more . persons agree to purchase
property & by common consent the legal title is
taken in the name of one of them for the benefit
of all, a trust is created by force of law in favor of
the others in proportion to the interest 6f each.
(Ari. 1452)
A resulting trust arises in the situation, because
•
of the intention to create one. Purchasers are.
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co-owners of the property. In the absence of any
specific agreement to the contrary, their shares
are presumed equal.
CJ·
'· 6. Property Conveyed In Reliance upon His
Declared Intention to Hold It For Another
When property is conveyed to a person in
reliance upon his declared intention to hold it for,
or transfer it to another or the grantor, there is an
implied trust in favor of the person whose benefit
is contemplated. (Art. 1453)
An Implied resulting trust is created because of
the declared intention of the grantee to hold or
fl transfer the property to the grantor or to another
• J
.person.
r enrichment on the part of the acquirer to the.
i.. 7. An Absolute Conveyance to Secure
,.-. Performance of Obligation
i If an absolute conveyance of property is made in
order to secure the performance of an obligation
(·
i.. ..
of the granter toward the grantee, a trust by
virtue of law is established. If the fulfillment of
the obligation is offered by the grantor when it
becomes due, he may demand the
reconveyance of the property to him. (Art. 1454)
A resulting trust is one that arises by implication
of law and presumed always to have been
contemplated by the parties, the intention as to
which can be found in the nature of their
transaction although not expressed in a deed or
Instrument of conveyance. (Heirs of Yap v. CA,
G.R. No. 133047, 1999) There is an intention to
t' create trust, although it was not reflected in the
: f
deed of reconveyance, therefore; an implied
resulting trust is created.
8. Trustee's Use of Funds Held in Trust
When any trustee, guardian or other person
holding a fiduciary relationship uses trust funds
for the purchase of property & causes the
conveyance to be made to him or to a third
person, a trust is established by operation of law
in favor of the person to whom the funds belong.
'. (Art 1455)
'
1 .
In order to prev.ent unjust enrichment on the part
of the fiduciary, an implied constructive trust is
created In this circumstance.
Persons covered
Any person holding a fiduciary position such as
a trustee, guardian, agent, partner, or a
confidential employee, among others
, '
r,~... _;'
•
CIVIL LAW
Rationale of rule
To prevent fiduciary from temptation of putting
his own self-interest above that of his principal
whom he is supposed to protect. It also is
intended to keep and encourage the fiduciary to
remain honest and loyal to his principal •
9. Property. Acquired Through . Mistake er
Fraud
If property is acquired through mistake or fraud,
the person obtaining it is, by force of law,
considered a trustee of an implied trust for the
benefit of the person from whom the property
comes. (Art. 1456)
This trust is created by law to prevent unjust
prejudice of the true owner. The mistake must
be committed by a third person. If made by a
party, there is no trust.
Violation of a condition in donation
No trust is created If a condition in a valid
donation has been breached by the donee. The
property remains in ownership of the donee
subject to proper action for revocation. If the
action has prescribed however, the donee will
remain as the rightful owner.
10. Oral Evidence .
An implied trust ma¥ be proved by oral evidence.
(Art. 1457) \i
It is deducible from the nature of the transactions
as matters of intent''. or which are super-induced
on the transaction by operation of law,
independently of the particular intention of the
parties.
When an immovable or an Interest therein is
involved in an express trust, parol evidence is
not allowed. But, when trust Is Implied, parol
evidence is allowed to prove Its existence.
Consequently, if property involved in express
trust is movable, parol evidence is allowed.
Proof needed to prove trust by parol
evidence
It must be trustworthy and received by the courts
with caution, and should not be made to rest on
loose, equivocal or . indefinite declarations.
Trustworthy evidence is required because oral
evidence can easily be fabricated. (Herbon v.
Pa/ad. G.R. No. 149542, 2006). Further, it must
be clear, satisfactory, and convincing, as intent
to establish trust cannot rest on vague, uncertain
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evidence, or on loose, equivocal, or indefinite

declaration.

Q: What is the applicable prescrlptive period

for actions for the reconveyance of real
property based on implied trust?
A: 10 years, reckoned from the time the cause of
action accrues. (Art. 1144; Sps. Dico v. Vizcaya
Management Corporation, GR. No. 161211,
2013)

-----·· end of topic -------

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("'i

! (1 VI. SALES A. NATURE AND FORM

TOPIC OUTLINE UNDER THE SYLLABUS: Contract of Sale

VI, SALES It is a contract where one of tho contnictlna
() A. N11ture and Fomt parties (Seller) obllgates h,rns~lf to tr:insfer the •
1. Essential requisites ownership and to';deliver a determinate thing,
2. Perfection and the other party' (Buyer) to pay aprice certain
3. Contract of sale vs. contract to sell in money or its etjuivalent. A contract of sale
.... may be absolute or conditional. (Art. 1458)
"! I
B. Capacity to Buy or Sell
~'

r, 1. ESSENTIAL REQUISITES
~- C. Effects of the contract when the thing sold
has been lost
Elements of a Contract of Sale: (CSP)
.r
·\, ' . D. Obligations of the vendor 1. Consent
,-· . 2. Determinate or Determinable §.ubject Matter
E. Obligations of the vendee 3. frice certain in money or Its equivalent.
(Coronel v. CA, G.R. No. 103577, 1996)
F. Breach of Contract
1. Remedies The absence of any essential elements negates
r
.J j 2. Recto Law and Maceda Law the existence of a perfected contract of sale
··. (Dizon v. CA, G.R. 122544, 1999) even when
G. Extingulshment of Sale earnest money or downpayment has been paid
1. In general (Manila Metal Container Corp. v. PNB, 511
2. Pacto de retro sate SCRA 444, 2006)
3. Equitable mortgage
Characteristics of Contract of Sale: (NOC·
H. Assignment of Credits PCBR)
1. !iominate
.. 2. Qnerous
[·.
~ ,l
3. Consensual
4. f.rincipal
5. f.ornmutatlve
I. ·~ . 6. Bilateral
. ...... j 7. Reciprocal

FORMALITIES OF THE CONTRACT

Form not Important In valldlty of sale
: 1 GR: Sale being consensual, may be oral or
·-... written, perfected by mere consent as to price
r: I and subject matter (Art. 1475)
~ • J

Non-compliance with the formal requirements

"" ' does not affect the validity or contract (Fule v.
,, '
CA, G.R. No. L-40502 & L-42607, 1976)
~.,
'
E: When Form is Important for Validity;
Exception by Specific Provision of Law;
1. Donations and wills (Arts. 749, 804)
1 2. Power to sell a piece of land granted to all
\':... .. .' agent must be in writing- otherwise sale is
.,. . VOID (Art. 1874)
\. } .. 3. Sale or large cattle; must also be registered
I. 't
with Municipal treasurer - otherwise VOID
..!
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(Art. 1581; Revised Administrative Code, While a sale of land appearing in a private deed
Sec. 529) is binding between the parties, it cannot be
4. Sale of land by non-Christian if not approved considered binding on third persons if not
by Governor - VOID (Tac-an v. CA. G.R. embodied in a public instrument and recorded in
No. L-38736, 1984) the Registry of Deeds. ( Secuya v. Vda. De
Selma, G.R. No. 136021, 2000)
Article 1358, which requires the embodiment of
certain contracts in a public instrument, is only CONTRACT OF CONTRACT TO SELL
for convenience, and registration of the . SALE. ·.
instrument only adversely affects third petties. 1. ·---:-.. • ·.'···(· ":. •• ,.'-. ,j 1 ,: . .i ·~ •. • .,• •

Formal requirements are, therefore, for the Title passes to the Ownership is reserved in
benefit of third parties; and non-compliance buyer upon the seller and shall not
therewith does not adversely affect the validity of delivery of the thing pass to the purchaser
the contract and the rights and obligations of the sold.(Art. 1477) until fulfillment of certain
parties thereunder. (Da/ion v. CA, 182 SCRA conditions, such as full
872,1990) payment of the purchase
rice 'Art. 1478
STATUTE OF FRAUDS
Note that if particular form is required under the The seller has lost Title remains in the
statute of frauds and the same is not followed: and cannot recover seller if the buyer does
• While the sale is valid, it is ownership of the not comply with the
UNENFORCEABLE even as to the parties to thing sold and condition precedent,
the contract of sale. delivered (Arts. which payment of the
1477, 1496) until price at the time
and unless the specified in the contract.
When Form (should be in writing and not contract · of sale (Tuazon v. Garllao, G.R.
merely verbal) is Important for Enforceability itself is resolved No. 143673, 2001)
[Statute of Frauds] (Art. 1403 [2]) and set aside.
1. A contract not to be performed in 1 year: A
sale agreement which by its terms is not to
Note: It must
be performed within a year from the making
stipulated
thereof;
2. Php 500 and Above: An agreement for the
sale of goods, chattels or things in action, at
a price not less than PhP500
3. Sale of Land: A sale of real property or of an
interest therein.
Non-payment of Full payment of the price
the price is a Is a positive suspensive
Exceptions to Coverage of Statute in Sales
negative resofutory condition, the failure of
Contracts:
condition (Art. : which is not a breach of
1. Written: When there is a note or 1179) contract but simply an
memorandum in writing and subscribed to
event that prevents the
by party or his agent (contains essential
obligation of the seller to
terms of the contract) (Art. 1403)
convey title to the buyer
2. Partial Execution: When there has been
(Uy & Sons, Inc. v.
partial performance/execution (seller
Valbueco tnc., G.R. No.
delivers with intent to transfer title/ receives
179594, 2013)
price: or when buyer partially pays the price)
(Art. 1405)
The non-payment of'the
3. Failure to object: When there has been
purchase price renders
failure to object to presentation of evidence
the coritract to sell
(oral) (Art. 1405)
without force and effect.
4. E-commerce: When sales are effected
(Tumibay v. Lopez, G.R.
through electronic commerce (R.A. 8792,
No. 171692, 2013
•
Sec. 12)

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'.', .. ···: , · ·:1 ·,,:: •ti~·,~· .•. • .. • ; _.. Rules:

\
r) Specific Specific performance 1. Offer is floated Prior to acceptance, may be
performance or cannot be availed of withdrawn at will b offeror
rescission under when the contract to sell 2. Offer floated Without acceptance,
Articles 1191, has been cancelled due with a period extinguished when period
,.. 1592, and 1593. to the non-payment of has ended and may be •
,.'
' I
.I
the purchase price. The withdrawn at will by ofteror;
buyer cannot demahd right to withdraw must not be
the seller to convey title arbitrary otherwise, liable to
when such buyer did not damage under Art. 19,
pay the price, and the 20, 21 of Clvil Code
seller cannot demand 3. Offer floated Extinguished by
,-
:( ; the buyer to pay the wl condition happening/non-happening of
' . price, since failure to condition
,.
1 I pay resulted in the 4. Offer floated Continue to be valid
cancellation of th~ without period/ depending upon
r contract to sell. (Piliplno without condition circumstances of time, place ·
Telephone Corporation and erson
I! '. v. Radiomarine Network 5. Offer is floated Original offer is destroyed,
Phils. Inc., 2011) and there is there Is a new offer; cannot
1.go
r counter-ofter back to original offer
..,. Remedy of rescission is \
not available because 6. Ofter is floated No authority of offerer to
..
P·.
the breach contemplated
in rescission of contracts 7. Ofter
rnodlf offer
Proceed to perfected stage
r: is the obliger's failure to accepted
comply with an absolute!
obligation already
extant, not a failure of a Option Contract • a contract granting an
condition to render exclusive right In one person, for which he has
binding that obligation. A paid a separate consideration, to buy a certain
non-existent obligation object within an agreed period of time. (Art.
r
.: ..,.
r •
,i cannot be subject of 1479)
rescrssion. (Diego v.
Diego. G.R. No. 179965, Note: There is no presumption of consideration,
2013 it needs to be proven (Sanch'ez v. Rigos, G.R.
No. L-25494, 1972)
('···1 (De Leon, Comments and Cases on Sales and
' Lease, 21-23, 2014)
Option - an unaccepted or unexercised
FORMATION OF THE CONTRACT contractual offer (Ade/fa Properties v. CA, G.R.
No. 111238, 1995)
Three Stages In Life of a Contract of Sale Characteristics of Option Contract: (SPNO·
1. Pollcltaclon/Negotlatlon Stage - offer CUUP)
rf floated, acceptance is floated but they do 1. Not the contract of sale by Itself, §epatate
' not meet; covers the period when parties and distinct
indicate their interest but no concurrence of 2. Nominate
offer and acceptance. 3. frincipal - but can be attached to other
I' 2. Perfection - the "birth" of the contract, principal contracts .
concurrence of all requisites; meeting of the · 4. Qnerous
minds upon the object and price. 5. fommutative
3. Consummation - the "death" of the 6. Unilateral - versus contract of sale which is
contract, parties perform their respective bilateral
undertakings (Arts. 1475, 1479, 1493-1506; 7. freparatory.
Villanueva & Tiansay, Law on Sales. 118- 8. !!naccepted or unexercised contractual
119, 2016) offer

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Consideration in an option contract may be
anything of value, unlike In sale where it must be
price certain in money. (San Miguel Philippines
v. Huang, G.R. No. 137290, 2000) However,
when the consideration is not moMtsry, the
conslderauon must be clearly specified as such
in the option contract or clause. When the
written agreement Itself does not state the
consideration for the option contract, the offeree
bears the burden of proving the existence of a
separate consideration for the option. PNOC v.
Keppel Phi/s. Holdings, Inc., 798 SCRA 65
(2016)
How Exercised: Notice of acceptance should
be communicated to offerer even without actual
payment of the option money as long as there Is
delivery of payment In consummation stage.
(Nietes v. CA, G.R. No. L-32873, 1972)
Elements of Valid Option Contract:
1. Consent - meeting of the minds
2. Subject matter - an option right to an
"unaccepted unilateral offer to buy or sell",
or an "accepted promise to sell, or to buy":
(a) A determinate or determinable object
(b) For a price certain (including manner of
payment)
3. Prestation - a consideration separate from
purchase price for option given, i.e., Option
(Villanueva & Tiansay, Law on Sales, 126,
2016)
Situations In an Option Contract:
1. With separate consideration
• Option contract is valid
Offeror cannot withdraw offer until after
expiry period
• Subject to damages for breach of option
contract if offeror withdraws during the
time stipulated but not to specific
performance because an option contract
does not create an obligation to give
(Tuazon v. Del Rosario-Suares, G.R.
No. 168325, 2010)
2. Without separate consideration
OLD RULE: Offer is still valid, but option contract
is void and not subject to damages
NEW RULE: Even if the option without separate
consideration constitute a certain offer, still it
must still be exercised within the option period
and the acceptance must still be absolute.
(Tuazon v. Def Rosario-Suares, G.R. No.
168325, 2010)
CIVIL LAW
Rules on Option Contract:
1. If the period is not supported by a separate
consideration, the offerer is still free and has
the right to withdraw the offer before its
acceptance, or, 11 an acceptance has been
made, before the offerer's coming to know of
such fact, by communicating that withdrawal
to the offeree
2. The right to withdraw, however, must not be
exercised ~himsically or arbitrarily;
otherwise, it could give rise to a damage
claim under Art(cle 19 (Abuse of Rights)
3. If the period has a separate consideration, a
contract of "option" is deemed perfected,
and it would be a breach of contract to
withdraw the offer during the agreed period.
4. The option Is an Independent contract in
itself, and it is to be distinguished from the
proposed sales contract. If the optioner-
offeror withdraws the offer before its
acceptance by the optionee-offeree, the
optionee--offeree may not sue for specific
performance on the proposed contract since
it has not been perfected; however, the
optioner-offeror is liable for damages for
breach of the option.
5. In these cases, if the consideration is
intended to be part of the consideration for
the main contract with a right of withdrawal
on the part of the optlonee, the main
contract could be deemed perfected; a
similar instance would be an "earnest money"
in sale that can evidence Its perfection. (Ang
Yu Asuncion v. CA, G.R. No. 109125, 1994)
Right of First Refusal
A right of first refusal ("RFR") covers a situation
wherein a promise on the part of the owner of a
property is made that if he decides to sell the
' property in the future, he would first negotiate its
sale to the promlsee.
It creates a promise to enter into a contract of
sale in the event the seller decides to sell his/her
property and it has no separate consideration. It
is not subject to specific performance because
there is no contractual relationship here and it is
not an obligation to give (not a real contract).
New doctrine: Mc!y be subject to specific
performance in a sp,cific instance.
The RFR Is only suljject to specific performance •
insofar as it is attached to a valid written
principal contract (J.g. lease). RFR becomes·
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one of the considerations In the contract. If RFR 2. PERFECTION

Is violated, and property sold to another buyer in
bad faith, the sale to the 3'd party buyer is
rescissible. The price for the 3'd party buyer is to
be the basis for the price of the sale back to the
i '
one with the RFR. Lessee can exercise the right
\ I of first refusal once the sale to the third pa~y is
set aside or rescinded. (Equatorial Dev't v. •
f·-\
\ I Mayfair Theater, G.R. No. 106063, 2006)
Effect of new doctrine: Turned the world of
po/icitacion upside down because while valid
r. J
,. option contract is not subject to specific
x .
performance, right of first refusal, which does not
(( ) even have a separate consideration, may be
General Rule: A contract of sale Is perfected at
the moment there is a meeting of the minds
upon the thing which is the object of the contract •
and upon the price: consensual contract (Art.
1475)
Exception: When the sale is subject to a
suspensive condition. (People's Homesite v. CA,
G.R. No. L-61623, 1984)
Requirements:
1. When parties are face to face - when
there is absolute acceptance of an offer that

,'
subject to specific performance. It recognizes is certain .
recovery of damage based on abuse of rights 2. When thru correspondence or telegram -
\' doctrine. when the offeror receives or had knowledge
of the acceptance (Art. 1319)
'! Only after the optionee fails to exercise his right
' 3. When the sale is subject to a suspensive
of first priority under the same terms and within condition - from the moment the condition
the period contemplated, could the owner validly is fulfilled (People's Homesite v. CA, G.R.
offer to sell the property to a third person under No. L-61623, 1984)
, .
.r=-, the same terms as offered to the optionee.
"··- (Paranaque Kings v. CA, G.R. No. 111538, Note:
1997) Qualified acceptance Is a mere counter-offer
which needs to be absolutely accepted to give
OPTION CONTRACT DISTINGUISHED FROM rise to perfected contract of sale (Art. 1319;
RIGHT OF FIRST REFUSAL Manila Metal Container v. PNB, G.R. No.
OPTION CONTRACT RIGHT OF FIRST
. . .
REFUSAL .
166862, 2006)

Principal contract: Accessory; can not Business ads are mere invitations to make an
s: )
}. stands on its own stand on its own offer except when It appears to be otherwise
',:.-·..-
Needs separate Does not need (Art. 1325)
consideration separate
consideration Rules Governing ~uctlon Sales
Subject matter and price There must be • Sales of sep~rate lots by auction are
must be valid subject matter but separate contracts of sale
price not imoortant • Sale is perfecta~ by the fall of the hammer
.. ,
,. ... Not conditional Conditional • Seller has the !right to bid at the auction
Not subject to specific Subject to specific provided such right was reserved and notice
performance performance was given to that effect (Art. 1476)
Mutual promise to buy and sell (Art. 1479)
,I
1. Promise to buy and sell a determinate thing
' for a price certain: reciprocally demandable
2. Accepted unilateral promise to buy or to sell:
binding upon the promissor if promise
supported by a consideration distinct from
the price
,·
·,.,.
, ~
f.' -,
,;,,_)

c;'
,(

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I
I
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l" ~'
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3. Determinate or Determinable
1. Real, not simulated
Determinate: always specific When at the perfection of the contract of sale,
t e=-.
( I • particularly designated or physically
segregated from all others of the same class;
there is every intention on the buyer to pay the
price, and every expectation on the part of the
''
I;
11
! (Art. 1460) seller to receive such price as the value ·of the
rt: -~·r ) subject matter he obligates himself to deliver,
I
Determinable: always generic (Test of intention) 1Rongavilla v. CA, G.R No.
t ,... ...... \
i 83974, 1998)
,;,,__ .
• Thing is capable of being made determinate
i
c ,, , .. (Capacity to Segregate Test)
Effect Where Price Is Slmulated
l (< 1 • Without the necessity of a naw or further
: ~-
;
contract between the parties (No F'urther i. The act may '.he shown to have been in
ir Agreement Test). (Art. 1460) reality a donation. or some other act or
-,
contract. (Art. i:471)
.r:
, NOTE: Subject matter CANNOT be ii. If not, and neither party had any intention
<: whatsoever that the amount will be paid.
DETERMINED BY a 3rd PARTY. (Villanueva &
~· Tiansay, Law on Sales, 102, 2016) (absolutely simulated): the sale Is void
~·
, .. ' (Rongavilla v. CA, G.R. No. 83974, 1998)
When Subject Matter Is a Right: It must be iii. If there is a real price but what is stated in
/'
transmissible. (Art. 1311) the contract is not the one intended to be
• Future inheritance cannot be sold (Art. 1347) paid (only relatively simulated or what is
(f
~ • Service cannot be sold (Art. 1348) called a "False Price"): the ostensible
contract of sale is valid but subject to
r· NOTES: reformation (Macapagal v. Remorin, G.R.
Quantity of subject matter is not essential for No. 158380, 2005)
-· perfection, but quantity is essential if it goes into
the determinability of the subject matter and the 2. In money or its equivalent
price or consideration in the contract; Determine Consideration for a valid contract of sale can be
the nature and quality of subject matter (National the price and other valuable consideration; at the
Grains Authority v. /AC, G.R. No. 74470, 1989) very least, a true contract of sale must have
price, which consist of valuable consideration
Generic things may be the object of a sale, but (i.e., something that can be quantifiable by
~,,...
, I
the obligation to deliver the subject matter can pesos and centavos) as part of its consideration
only be complied with when the subject matter (Test of value consideration) (Republic v. Phil.
has been made determinate (either by physical Resources Dev., G.R. No. L-10141, 1958)
segregation or particular designation) (Yu Tek &
.-:.....:.. Co. v. Gonzales, G.R. No L-9935, 1915) 3. Certain or ascertainable
i
PRICE Certain: expressed and agreed in terms of
specific pesos and/or centavos (Art. 1469)
Price - The sum stipulated as the equivalent of
the thing sold and also every incident taken into Ascertainable:
consideration for the fixing of the price, put to the i. Set by third persons (Art. 1469)
debit of the vendee and agreed to by him. ii. Set by the courts - only in cases where
(lnchausti & Co. v. Cromwell, G.R. No. L-6584, the third person designated to fix the price,
1991) fixes the same in bad faith or by mistake
NOTE: Sale is valid when consideration is partly (Art. 1469) ,
in money and partly in another thing (Art. 1468). iii. Set by reference to a definite day,
particular exchange or market (Art. 1472)
REQUISITES FOR A VALID PRICE (ReM-C) iv. Set by reference to another thing certain
1. Real (Art. 1472) \(
2. In Money or its equivalent v. But never b.Yi only one party to the
\:_ j 3. £ertail'l or ascertainable (Francisco v. contract of sale as it amounts to a
Desierto, G.R. No. 154117, 2009) potestative condition (unless the price is
accepted by theJ.other party) (Art. 1473)

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NOTE: When the 3'd party is unwilling to set the MANNER OF PAYMENT MUST BE AGREED
price, the parties may not ask the court to fix the UPON \
price because the condition imposed on the The manner of payment must be agreed upon.
contract has not happened yet and thus, no (Marne/ego v. Banco Filipino Savings and
enforceable contract has arisen. (Art. 1474) Mortgage Bank, G.R. No. 161524, 2006)

IF PRICE IS NEITHER CERTAIN OR It is an essential ingredient before a valid and

ASCERTAINABLE: The contract of sale is
inneficacious.
Effect of Non-Payment of Price
Non-payment of price does not cancel or avoid
the sale, as the sale is still considered perfected.
But it is a cause for either:
(a) Specific performance or
(b) Rescission. (Heirs of Escanlar v. CA, G.R.
No. 119777, 1997)
HOW PRICE IS DETERMINED
Price is determined by the contracting parties.
(Art. 1473)
INADEQUACY OF PRICE
Effect of Gross Inadequacy of Price
General Rule: Mere inadequacy of the price
does not affect the validity of the sale (Bautista
v. CA, G.R. No. 158015, 2004)
Exceptions:
1. When there is fraud, mistake, or undue
influence indicative of a defect in consent
thereby making the contract voidable. (Art.
·/470)
2. When it shows that the parties really
intended a donation or some other act or
contract thereby making the contract of sale
void but may be valid as a contract of
donation or some other contract. (Art .. 1470)
3. In Judicial Sale, where the inadequacy is
shocking to the conscience of man (Pascua
v. Heirs of Simeon, G.R. No. L-47717, 1988)
and there is showing that, in the event of
resale, a better price can be obtained, the
contract of sale is void (l3ie v. CA, G.R. No.
L-17294, 1965)
NbTE: If there was a failure of the contract to
set a price but the buyer has already
appropriated it, then the buyer must pay a
reasonable price (Art. 1474)
binding contract of sale can be said to exist,
because it is part of the prestation of the
contract. (Sps. Navarra v. Planters Development
Bank, G.R. No. 172674, 2007)
EARNEST v, OPTION MONEY
Earnest Money (Art. 1482)
• Money given as part of purchase price
• Acceptance is the proof that contract of sale
exists
• Nothing in law prevents parties from treating
earnest money differently
OLD CONCEPT: subject to forfeiture when
buyer backs our
NEW CONCEPT: cannot be forfeited - part of
purchase price; must be restored
Qualification: if old concept is stipulated - valid
• Presumption of perfection of contract of sale
and such earnest money as part of purchase
price is disputable
OPTION MONEY DISTINGUISHED FROM
EARNEST MONEY
OPTION MONEY EARNEST MONEY
Given as distinct Given as part of the
consideration for an purchase price
option contract
Applies to a sale that Applies when there Is
is not perfected already a sale
When given, buyer is When given, buyer ls
not required to buy /'. bound to pay the
11 balance
( Oesmer v. Parais6; ,, Develop ment Corporation,
G.R. No. 157493, 2qo7)
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B. CAPACITY TO BUY OR SELL

r>
I I 2; Others - Trust Relationships
' '
CAPACITY OF PARTIES •
r> Two groups of parties prohibited from
I I General rule: All persons who are authorized in
' ·' acquiring by . purchase certain properties:
this Code to obligate themselves may enter into
a contract of sale (Arl. 1489); as long as these • (GAAE • PEJJOL) (Art. 1491) •
persons are with civil capacity.
1. §uardian(~gent/.§.xecutors and
When one of the parties is incapable of giving ~dministrators
consent, the contract of sale is voidable. (Arl. • Direct or indirect
1390), subject to annulment or ratification. (Arl. • May be "ratified" since only private
1393). wrong Is involved, i.e., really in the
form of entering into a new contract
ABSOLUTE INCAPACITY
»»
:,· ' 2. fublic Officers and §.mployees/ Justices·
'\.;
Parties Disqualified to Enter into Sale and !:!_udges/ Officers of Court/ !:,awyers
Contract: Cannot be ratified since public
1. Minors (Arl. 1327) wrong is Involved
r 2. Insane and Demented Persons (Arl. 1327)
·:. .. 3. Deaf-Mutes who do not know how to write Requisites for the prohibition to apply to
(Art. 1327) attorneys and their clients' properties:
Also includes state of drunkenness and 1. Existence of attorney client relationship;
hypnotic spell (Art. 1328) 2. Property is the subject matter in litigation;
3. While in litigation (from filing of complaint
GR: Status of Contract: Voidable, subject to to final judgm'ent)
,,
annulment or ratification l•
I
'</,, '
Note: Exception to the prohibition against
E: Where necessaries are sold and delivered to attorneys: conting~nt fee arrangement where
minors or other persons without capacity to act, the amount of legal· fees Is based on a value of
he must stlll pay a reasonable price therefore, property Involved In lltlgatlon (ratlonele: the
·: ... · thus, the resulting contract is valid and not transfer or aselgntnent of the property tskes
voidable. (Art. 1489) effect only after the finality of a favorable
judgment and Is always subject to supervision by
RELATIVE INCAPACITY the court) (Fabillo v. /AC, G.R. No. L-68838,
··~
.- ' f
1991)
1. Spouses • A spouse may, without the
consent of the other spouse, enter into sales Legal Status of Contract
transactions in the regular pursuit of their
r,
*l ·'
profession, vocation, or trade. (Family Code,
Arts. 73, 96, 124)
Void (case law) - guardian/ executor/ public
officers I officers of the court (Rubias v. Bati/ler,
G.R. No. L-35702, 1973)
.:,.. General Rule: The husband and the wife cannot
sell property to each other. The contract is void. Unenforceable (civil code) - agent; VALID if
There is no transfer of ownership, thus the with consent (Art. 1491)
creditors may go after the property. (Modina v.
CA, «« No. 109355, 1999) SPECIAL DISQUALIFICATIONS
Any others specially disqualified by law (Art.
Exceptions: 1491 [6])
....," (a) When a separation of property was agreed
upon in the marriage settlement (Art. 1490) NOTE: These contracts are void for public
..: .·· (b) When there has been a Judicial separation policy. They cannot be ratified neither can the
of property under Art. 191 (Art. 1490) right to set up the defense of illegality be waivecl.
s >
.\ I
~ •. >
NOTE: Prohibition likewise applies to common- (Rubias v. Batiller,G.R. No. L-35702, 1973)
law spouses (Matabuena v. Cervantes, GR.
No. L-28771, 1971) ··-····· end of topic -----·-·

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C. EFFECTS OF THE CONTRACT D. OBLIGATIONS OF THE VENDOR

WHEN THE THING SOLD HAS BEEN
Obligations of the Seller
LOST The seller (vendor) is bound to transfer the
ownership of and deltver, as well as warrant the
LOSS, DETERIORATION, FRUITS thing which is the object of the sale. (Art. 1495)
j
GENERAL RULE Objects that the seller has to deliver: (Thi·F·A) ·
Legal consequences from point of perfection are 1. The thing sold (Art. 1495)
the same in both legal systems: upon perfection 2. Fruits, belong to the buyer from the day the
of an unconditional contract of sale involving contract of sale is perfected (Art. 1537)
specific or determinate subject matter, the risk of 3. Accessions and accessories, in the condition
loss deterioration and the benefits of fruits and in which they were upon the perfection of the
improvements, were for the account of the sale (Art. 1537)i •
buyer. ;'·
Obligations of the:·:seller
If the subject matter is generic, simply replace 1. Preserve the ;! subject matter - proper
item. (Art. 1263) diligence of a good father of a family unless
law or parties • stipulate another standard
WHO BEARS RISK OF LOSS/ (Art. 1163) _
DETERIORATION/ FRUITS BEFORE 2. Deliver - transfer ownership and deliver
PERFECTION object (Art. 1495)
3. Deliver fruits and accessories existing from
• Res perit domino the time of perfection (Arts. 1164, 1166,
• The seller is the owner, so he bears risk of 1537) .
loss (Art. 1504) 4. Warrant subject matter against eviction and
hidden defects (Arts. 1546-1581)
WHO BEARS RISK OF LOSS/.
DETERIORATION/ FRUITS AT PERFECTION General Rule: Seller need not be the owner of
the subject matter at the time of perfection:
• Res perit domino sufficient that he is the owner at the time of
• Contract is merely inefficacious because delivery. (Arts. 1459)
loss of the subject matter does not affect the
validity of the sale Exception: Foreclosure sale (mortgagor must
• Seller cannot anymore comply with be absolute owner) (Art. 2085)
obligation so buyer cannot anymore be
compelled to pay the price. (Art. 1493; 1494) NOTE: A perfected contract of sale cannot be
challenged on the ground of the seller's non-
WHO BEARS RISK OF LOSS/ ownership of the thing sold at the time of the
DETERIORATION/ FRUITS AFTER perfection of the contract. It is at delivery that the
PERFECTION BUT BEFORE DELIVERY law requires the seller to have right to transfer
• Loss - confused state ownership of · the thing sold. (Cavite
o Paras: BUYER Development Bank v. Sps. Lim, G.R. No.
o Tolentino: SELLE~ 131679, 2000)
• Deterioration and fruits - Buyer bears loss
and claims the fruits (Art. 1538, 1189) A. DELIVERY OF SUBJECT MATTEr
Delivery- "the absolute giving-up of the control
AFTER DELIVERY and custody of the property on the part of the
• Res perit domino vendor, and the assumption of the same by the
• Delfvery extinguishes ownership of the seller vendee" Equatorial Realty Dev. V. Mayfair
and creates a new one in favor of the buyer Theater, 370 SC~A 56 (2001) •
and, therefore, buyer bears risk of loss (Art.
1504) • Two Types of Delivery
1. Actual- physical delivery
2. Constructive i··
l.'i
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a. Execution of Public Instrument (Art. 1498)
only produces the effect of delivery when:
I. The thing sold Is subject to control of
seller at the time of execution of
instrument. Addison v. Felix, 38 Phil.
,,··., 404 (1918); and ' a) Purchaser has been deprived of, or
~ !
' , ii. Such control should remain for a
reasonable period after execution of
the Instrument. Power Commercial and
Industrial Corp. v. CA, 274 SCRA 597
(1997)
b. Constitutum Possessorium (Art. 1500)-
the seller held possession of the subject
matter (real property) in the concept of
f~ i owner, and pursuant to the sale, the seller
\.,.' continues to hold physical possession but
r>, no longer in the concept of the owner
... (owner to lessee)
,· . c. Traditio Brevi Manu· the would-be buyer
..·,, was already in the possession (i.e., as
Jessee) of the subject matter (real property)
and pursuant to the sale, he would now
hold possession as owner .
d. Traditio Longa Manu· delivery by mere
consent or agreement.
WARRANTIES
The Seller is required to comply with warranties.
Warranty~ A warranty is a statement or
,; ... \ representation made by the seller of goods,
.,
contemporaneously and as part of the contract
("',
. I
of sale, having reference to the character, quality
or title of the goods, and by which he promises
or undertakes to insure that certain facts are or
Ci
··i:.,/ shall be as he then represents them. Ang v. CA,
567 SCRA 53 (2008)
Types of Warranties
1. Express Warranty- is an affirmation of fact
or any promise made by a vendor in relation
to the thing sold. Goodyear Philippines v. Sy,
474 SCRA 427 (2005).
2. Implied Warranty~ those which by law
constitute part of every contract of sale,
whether or not the parties were aware of
them.
··~ .»
CIVIL LAW
Implied Warral"lti~s (Art. 1547) (SESH-RFC)
1. Seller has the right to Sell;
•
2. Warranty against Eviction;
Requisites for warranty to apply:
evicted from the whole or part of the
thing sold;
b) Eviction is by final judgment;
c) Basis is by virtue of a right existing prior
to the sale; ·
d) Seller has been summoned and made
co-defendant in the suit for eviction at
the instance of the buyer
Remedies in case warranty violated:
a) return of the value of thing sold
b) return of income or fruits
c) reimbursement for cost of suit which
caused the eviction
d) reimbursement for expenses of contract
e) damages (if violation in bad faith)
3. Warranty against Non-Apparent Servitude
Requisites for warranty to apply:
a) Existence of non-apparent servitude;
b) Servitude is such that buyer would not
have bought it had it known it existed
Warranty not applicable when:
a) Servitude is mentioned in the agreement;
b) Servitude is recorded in the Registry of
Deeds, 1 unless there is an express
warrany' that the thing is free from·
encumbrances.
Remedies available:
If brought w/n 1 year from execution of
deed: rescission and damages
If brought after. 1 year from execution: only
damages ::
(_:.
4. Warranty aqainst Hidden Defects
Requisites: ·
a) Defect is hidden:
b) Defect exists at time of perfection;
c) Defect must ordinarily be excluded from
contract;
d) Defect must be important (render the
thing unfit or decrease fitness);
e) Action must be instituted within six
months from delivery
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I General Remedies available
a) Withdraw from the sale with damages
3. Sale is made under statutory power of
sale or under order of a court of

II b) Demand proportionate reduction of to

price with damages 4.
competent jurisdiction (Art. 1505)
Sale is made In a merchant's store in
accordance with code of commerce and
I Remedies of thing Is lost: special laws. (Art. 1505)
j I a) If lost due to hidden defect:
• If seller aware- seller bears loss and *But subject to ANTI-FENCING LAW
obliged to return price and refund
expenses of contract and pay damages 2. Title as to Mpvable Properties
• If seller unaware- seller must return the
price and interest, reimburse for General Rule: Possession is equivalent to title
expenses of the contract but not liable (Art. 559)
for damages.
b) If lost due fortuitous event or through Requisites: (PG)
fault of buyer 1. Possession of movable
2. Made in Q.ood faith (Art. 559)
5. Warranty against Redhibitory Defects on
Animals (Read Arts. 1573-1578) Exceptions:
1. Owner lost movable - owner can
6. Warranty as to Fitness or Quality of Goods recover oy reimbursing price, including
those acquired in public sale or auction,
1. In order to enforce the implied warranty provided in good faith (not a fencer) (Art.
that the goods are reasonably fit and suitable to 559)
be used for the purpose which both parties 2. Owner is unlawfully deprived (stolen or
contemplated, the following must be established: delivered without intention of
(a) that the buyer sustained injury because of transferring title) - owner can recover
the product; (b) that the injury occurred because w/o reimbursing price (Art. 559)
the product was defective or unreasonably 3. Bought In a merchant store- owner
unsafe; and finally (c) the defect existed when cannot recover even if unlawfully
the product left the hands of the petitioner. deprived (Ar!, 1505)
Nutrimix Feeds Corp. v. CA, 441 SCRA 357
(2004). Exceptions to the ~xceptions:
1. Movable is ; bought at public sale -
6. Warranties under the Consumer Protection owner can· only recover after
Act (R.A. 7394) reimbursing price
2. Acquired in good faith and for value
B. SALE BY A PERSON NOT THE OWNER AT from auction
THE TIME OF DELIVERY (Arts. 1462, 1505,
1459) C. SALE BY NON-OWNER OR BY ONE
HAVING VOIDABLE TITLE
1. Rules on Legal Effects of Sale by a Non-
owner 1. Perfection Stage
• Sale by owner - VALID
General Rule: If sale is by a non-owner, buyer
• Sale by non-owner - VALID (Arts. 1459,
acquires no better title than seller had. (Art. 1475)
1505)
Reason why both sales are valid: ownership
Exceptions:
is necessary only at time of delivery; at
1. Owner by his conduct is precluded from
perfection stage, no obligation on part of seller to
denying seller's authority (Estoppel) (Art.
transfer ownership (Villanueva, Law on Sales,
•
1434)
294, 2016)
2. Contrary is provided for in recording
laws (Art. 1505; P.O. 1529)
Law on estoppel further bolsters it: title passes
by operation of law to grantee when person

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who is not owner of the goods sold delivers it E. SALE BY SELLER WITH VOIDABLE TITLE
.,-
u' ,\ and later on acquires title thereto (Art. 1434) IN GOOD FAITH and WITHOUT NOTICE OF
THE DEFECT •
( I Since valid, action to annul is improper; there is
·' already a perfected contract. 1. Perfection stage
, ,-, Valid sale - buyer acquires title of goods
:____) 2. Consummation Stage
Contract of sale is valid because it has passed 2. Consummation stage
.r·
\,J
:
perfected stage, despite seller not being the Valid sale - if title has not yet been avoided,
owner or seller having no authority to sell buyer becomes owner of the goods under the
() • What is void is the transfer of title - condition that tile sale:
ownership did not pass 1. was made in good faith
.r~- i • Effect: buyer acquired no better right than 2. is for value
' transferor (Art. 1505) 3. is without notice of seller's defect of title
(' '1 • Legal effect: CAVEAT EMPTOR - BUYER (Art. 1506)
' BEWARE but Buyer always has cause of ·j.
,. action against the Seller ...
'
.·.,,
D. SALE OF CO-OWNER OF WHOLE
"'-- PROPERTY OR DEFINITE PORTION

·..:.... General Rule:

1. Co-owner sells whole property prior to
,..• partition - sale of property itself is void but
,,;~ '1

valid as to his spiritual share (Panganiban

,...r v. Oami/1 G.R. No. 149313, ZOOB)
,,
2. Co-owner sells definite portion prior to
!:-· .. partition - sale is void as to other co-owner
but valid as to his spiritual share if the buyer
would have still bought such spiritual share
had he known that he would not acquire the
definite portion sold. (Lopez v. Cuaycong,
G.R. No. L-46079, 1944)

Exceptions to the rule on the effect of sale of

a definite portion by a co-owner
1. Subject matter is Indivisible In nature or
by Intent, hence, entire sale is void;
(Mindanao Academy, Inc. v. Yap, G.R. No.
L-17681, 1965)
2. Sale of a particular portion of a property is
with consent of other co-owners, sale of
entire property is valid; {Pamplona v.
,·.
Moreto, G.R. No. L-33187, 1980)
\:' 3. Co-owner sells 1 of 2 commonly owned
lands and does not turn over 11:i of the
' ..._ .. . proceeds, other co-owner, by law and
( •. equity, has exclusive claim over remaining
;..._j land. (Imperial v. CA, G.R. No. 102037,·
1996)
tf' .,;

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E. OBLIGATIONS OF THE VENDEE
There is real or actual delivery of the thing sold
I when it is placed in the control and possession
!! of the vendee. (Art. 1497)
I Obligations of Buyer
1. Pay the price
Buyer is obligated to pay the price according to
:1
I the terms agreed upon regarding time, place and
amount (Art. 1582)
I i. If payment of interest is stipulated -
must pay; if amount of interest not
mentioned - apply legal rate
ii. When buyer defaults - constitutes
breach; subject to specific
performance/rescission and damages;
interest to be paid also from default
2. Accept delivery of thing sold
Where to accept:
(a) at time and place stipulated in the contract
(b) if none specified - at the time and place of
delivery goods (Art. 1582)
There is acceptance when:
(a) He intimates to seller that he has accepted
(b) When delivered and buyer does any act
inconsistent with ownership of seller
(c) Retains without intimating to seller that he
has rejected (Art. 1585)
3. Sale of Goods on installment
Goods must be delivered in full, except when
stipulated (Art. 1583)
When not examined by buyer - not accepted
until examined or at least had reasonable time to
examine (Art. 1584)
Acceptance of goods in general, absent contrary
express stipulation, does not discharge seller
from liability in case of breach of warranties
(unless no notice or failure to give it within
reasonable time) (Art. 1586)
When buyer has a right to refuse goods, no
need to return; shall be considered as
depositary; unless there is stipulation to the
contrary (Art. 1587)
•••••••• end of topic --···
CIVIL LAW
F. BREACH OF CONTRACT
1. REMEDIES
·.,.
REMEDIES OF/ SELLER IN CASE OF
MOVABLES 1·
General Remedies:
1. Specific Performance with damages; OR
2. Rescission with damages
(a) When ownership is transferred to the buyer
- the seller may maintain an action against
him for the price of the goods, i.e., specific
performance (Art. 1595)
(b) When there is no transfer of ownership to
the buyer
i. If the goods can be resold for a
reasonable price - seller may resell
ii. If the goods cannot be resold - the
seller can deliver the goods and if
buyer refuses, then the seller may
notify the buyer that the same is
being held by the seller as bailee for
the buyer then maintain an action for
the price, i.e., specific performance.
(Art. 1595)
(c) When price is Payable on Certain Day and
Buyer Falls to Pay on the Day Set - the
seller can maintain action for the price, i.e.,
specific performance (Art. 1595)
NOTE: Read Article 1595-1596 of the Civil Code
UNPAID SELLER
A seller of the goods is deemed to be an unpaid
seller either: ·
(a) When the whole of the price has not been
paid or tendered; or
(b) When the seller received bill of exchange or
negotiable instrument as a condition for
payment and the condition has been broken
by reason of the dishonor of instrument, the
insolvency of the buyer, or otherwise. (Art.
1592) . ';
•
Requisites of Unpaid Seller: (PUG)
1. f.hysical possession is with seller
2. Seller is _ldnpaid
3. Subject matter - Qoods
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Speclal remedies of unpaid seller: (PSRR) (c) Goods are supposed to have been delivered
1. fossessory lien to buyer but carrier refused
2. Stoppage in Iransitu (d) Bailee or carrier acknowledges that he is •
3. Special right of Re-sale holding the goods for the buyer or his agent
4. Special right to Rescind (Art. 1526) • (Art. 1531)

NOTE: Hierarchical Application - only when How is right exercised

unpaid seller has exercised possessory lien or
stoppage in transitu can the seller proceed with
his other special rights of resale or to rescind.
(Villanueva & Tiansay, Law on Sales, 335, 2016)
1. Possessory lien
Seller is not bound to deliver if buyer has not
r>
; I paid him the price (Art. 1524)
ii. •
,.,..... Right to retain cannot be availed when seller
does not have custody (Art. 1526)
,{'"' • Exercisable only in following circumstances:
'\,,,. (CCI)
(a) Goods sold without stipulation as to
£red It
(b) Goods sold on Credit but term of
credit has expired -
(c) Buyer becomes [nsolvent (Art. 1527)
• When part of goods delivered, may still
exercise right on goods undelivered
'1_.i Instances when possessory lien is lost:
1. Seller delivers goods to carrier for
transmission to buyer without reserving
ownership in goods or right to possess them
2. Buyer or his agent lawfully obtains
possession of goods
3. Waiver (Art. 1529)
4. When he parts with goods (still has
stoppage in transitu)
NOTE: Notice by seller to buyer not essential
2. Stoppage In transitu
• Goods are in transit
• Remedy is available only when buyer is
insolvent (Art. 1526)
(, '":,
,::...··
Requisites when goods are In transit (DR)
1. From the time goods are Qeiivered to carrier
for purpose of transmission to buyer
/ . 2. Goods _!!ejected by buyer and carrier
~- J continues to possess them (Art. 1531)
,( '
:~ .. : When goods no longer In transit
(a) Reached point of destination
(b) Before reaching destination, buyer or his
agent obtains delivery of the goods
1. Obtain actual possession of goods
2. Give notice of claim to carrier I bailee in
possession thereof
Note: Notice by seller to buyer is not required;
notice to carrier is what is essential (Art. 1532)
3. Special Right to Resell the Goods
Can be exercised under the following
instances:
(a) Goods are perishable
(b) Stipulated the right of resale in case buyer
defaults in payment
(c) Buyer In default on payment of price for
unreasonable time (Art. 1533)
Note: Notice by seller to buyer not essential
Why special?
There are things which seller cannot do in
ordinary sale: ·
1. Ownership is with buyer but seller can sell
goods
2. Title accorded, to buyer is destroyed even
without court 'i intervention (Villanueva &
Tiansay, Law or, Sales, 342, 2016)
4. Speclal Right to:Rescind
Can be exercised under the following
instances:
1. Expressly stipulated
2. Buyer Is in default for unreasonable time
(Art. 1534)
Note: Notice needed to be given by seller to
buyer
Why special?
Ownership of goods already with buyer but
seller may still rescind; ownership is destroyed
even without court intervention but in ordinary
sale, need to go to court to destroy·transfer of
ownership.

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REMEDIES OF SELLER IN CASE OF SALE
OF IMMOVABLES
General Remedies
1. SpP.clflc Performance with damages; or
2. Rescission with damages
Anticipatory Breach
1. Seller has reasonable grounds to fear loss of
immovable sold and its price, sue for
Rescission
2. Non-payment of price, sue for Rescission
(Art. 1591)
REMEDIES OF THE BUYER
Suspension of Payment
General Rule: Buyer may suspend payment in
case:
1. He is disturbed In the possession or
ownership of the thing acquired
2. He has reasonable grounds to fear such
disturbance (Art. 1590)
Exception: No right to suspension of payment if
the seller gives security for the return of the price
(Art. 1590)
In case of subdivision or condominium projects,
the buyer may rescind the contract or suspend
payment if real estate developer fails to comply
with obligatlon according to approved plan. (PD
957, Sec. 23)
REMEDIES IN DOUBLE SALES
General Rule: FIRST IN TIME, PRIORiTY IN
RIGHT (Art. 1544)
Wh~n general rule does not apply: when not
all requisites embodied in Art. 1544 concur.
Requisites for Double Sales to Exist (VOCS)
1. Two or more sales transactions must all
constitute yalid contracts of sales;
2. Two or more sales transactions must pertain
to the same Qbject or subject matter;
3. Two or more buyers at odds over the rightful
ownership of the subject matter must 'each
represent £onflicting Interests; and
4. Two or more buyers must each have bought
from the very same §.eller. (Cheng v.
Genato, G.R. No. 129760, 1998)
CIVIL LAW
If not all the elements are present for Art. 1544
to apply, the principle of prior tempore, potior
jure or simply "he who is first in time is preferred
in right" should apply. Indisputably, he is a
purchaser in good faith because at the tirne he
bought the real property, there was still no sale
to as a second vendee. (Consolidated Rural
Bank v. CA, G.R. No. 132161, 2005)
NOTE: If the two contracts involved are not both
contracts of sale, as when one is a contract to
sell, and the other one a contract of sale, Art.
1544 does not apply. This follows the principle
that in a contract to sell, the seller has no
obligation to deliver title until there is full
payment of the purchase price. Thus, for as long
as the condition of full payment has not been
fulfilled, a subsequent sale of the same property
will be valid since the seller still has title to the
property. With more reason, If the seller in a
contract to sell has defaulted, the breach In the
condition entitles the seller to sell the same
property for full consideration. Even if the buyer
in the contract to s~II annotates his right in the
title, the buyer in the contract of sale is not in
bad faith. (Sps. Domingo v. Sps. Manzano, G.R.
No. 201883, 2016)
Note that the Court applled this in this case even
If the buyer in the contract to sell was not In
default since the seller accepted payment after
due date. Seller however must reimburse
payments made to the buyer even if he has only
paid less than 2 years of installments because
he was not in default. Court distinguished this
from earlier case of Abarguez v. CA even if in
that case, one also involved a contract to sell -
because in Abarquez, the seller already
delivered to the buyer who accepted and took
possession, and even constructed a house on
the land under installment sale. (Sps. Domingo
v. Sps. Manzano, G.R. No. 201883, 2016)
Double Sales Rules according to Art. 1544:
1. Movable
First to possess in good faith shall prevail (Art.
1544)
2. Immovable
(a) First to register in good faithshall prevail
(b) In case no registration is made, then first to •
possess in good faith shall prevail
(c) No registration and no possession in good·
faith, then the person who presents oldest
title in good faith, shall prevail. (Art. 1544)
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NOTE: The FIRST BUYER is always In good
faith and will always prevail if he registers his
,,....
( _i sale first. His good faith is not destroyed by the
subsequent knowledge of the second sale. 'The •
,r.'•, reason behind this is that at the time of
() perfection of his contract of sale, he was the only
Good faith must concur with registration. To be
entitled to priority, the second purchaser must
•
not only establish prior recording of his deed, but
must have · acted in good faith: (Gabriel ii.
Mabanta, G.R. No: 142403, 2003)
1i

buyer. (Carbonell v. CA, G.R. No. L-29972,
1976) But the knowledge gained by the 2"d
buyer of the first sale defeats his rights even if
he is first to register, since such knowledge
taints his registration with bad faith. (Ordua v.
Fuentebella, G.R. No. 176841, 2010)
Good Faith - one who buys property without
notice that another person has a right or interest
.,
,. in such property and one who has paid price
·~ before notice that another has claim or interest
(Uy v. Fule, G.R. No. 164961, 2014)
Lis pendens - notice that subject matter is in
litigation (Sps. Um v. Vera Cruz, G.R. No.
143646, 2001) is a form of registration accorded
priority right.
Adverte clalm - notice thet somebody Is
claiming better right (Gardner v, CA, G.R. No. L-
59952, 1984) is a form of registration accorded
priority right.
Possession - both actual and constructive
(Roman Catholic Church v. Pante. G.R. No.
174118, 2012)
Registration - any entry made in the books of
the registry, Including both registration in its
ordinary and strict sense, and cancellation,
annotation, and even marginal notes. It is the
entry made in the registry which records
solemnly and permanently the right of ownership
and other real rights. (Cheng v. Genato, G.R.
No. 129760, 1998)
• Reqistered under Torrens system -1544
applies
• Not registered under the Torrens system -
1544 still applies
Requisite Diligence for Buyer In Good Faith:
1. Diligence in verifying the validity of the title
of the property.
2. Diligence in inquiring into the authority of
the transacting spouse to sell conjugal
property in behalf of the other spouse.
(Aggabao v. Peruten, G.R. No. 165803,-
2010).
REMEDY OF RESCISSION IN CONTRACTS
COVERING IMMOVABLES (ARTS. 1191 &
1592)
General Rule: Judicial Rescission (Art. 1191)
Exception: Extrajudicial Rescission allowed but
SUBJECT to COURT Confirmation.
• Allowed if stipulated; burden to sue shifts to
party who does not like rescission
• Court still hes flnal say as to propriety of
tescisslt:1n (lrll1gsr'! v. CA, <3.R. No. 129107,
2001)
• Forfeiture of amounts valid being in nature
of penal clause
Contract of Sale - Rescission Is Applicable
Contract to Sell - Rescission not Applicable
(Roque v. Lapuz, G.R. No. L-j2811, 1980)
Non-payment , of purchase price would
automatically cancel even without further action
for rescission
Exception: If subject matter Is residential lots,
the law oh rescission applies when thete is
substantial breach as Maceda law applies.

If 200 sale is a judicial sale (made by way of levy

on execution), buyer merely steps into the shoes
of the judgment debtor. Outside of such situation
)... ~·
- must apply to conflicting sales over the same
unregistered parcel of land. If sale 1 occurs
when land is not yet registered and sale 2 is
done when land is already registered - apply
;·.' i
first in time, priority in right.
~.}

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2. RECTO LAW AND MACEDA LAW
RECTO LAW: SALE OF MOVABLES ON
INSTALLMENT (ARTS.1484-1486)
Coverage: Sale on installment (two or more
installments required) and financing transaction
(Equitable Savings Bank v. Palces, G.R. No.
214752, 2016) on movable property and
contracts of lease of movable property with
option to purchase (PC/ Leasing and Finance v.
Giraffe-X Creative Imaging, G.R. No. 142618,
2007)
Contract to sell is not covered (Visayan Sawmill
Co. v. CA, G.R. NO. 83851, 1993).
Remedies available under the Recto Law:
In a sale of personal property, the price of which
is payable in installments, the seller may
exercise the following remedies: (REF) . are valld if not unconscionable
1. .§xact fulfillment of the obligation, should the
buyer fail to pay any installment;
2. B,escind the sale, should the buyer's failure
to pay cover two or more installments:
3. foreclose the chattel mortgage, if one is
constituted, should the buyer's failure to pay
cover two or more installments (Art. 1484)
Note: This also applies to contracts purporting to
be leases of personal property with option to
buy, when the lessor has deprived the lessee of
the possession or enjoyment. (Art. 1485)
Sale on Installment: Payment by several partial
payments (two or more) in small amount (Levy
Hermanos, Inc. v. Gervacio, G.R. No. L.-46306,
1939)
Rationale of the law: Buyer is lulled into
thinking that he could afford because of small
amounts per installment and at the same time to
remedy abuse of commercial houses (Manila
Trading and Supply Co. v. Reyes, G.R. No. L-
43263, 1935)
Nature of remedies: Alternative, not cumulative
(Nonato v. /AC, G.~. No. L-67181, 1985)
The fact that the seller did. not foreclose the
chattel mortgage constituted on the movable
purchased on credit, but opted specific
performance, with a plea for a writ of replevtn,
does not amount to a foreclosure of the chattel
mortgage to be covered by Art. 1484.
CIVIL LAW
(Tajanglangit v. Southern Motors, G.R. No. L-
10789, 19.57)
REMEDIES are NOT CUMULATIVE but are
ALTERNATIVE and EXCLUSIVE
1. Specific Performance
General Rule: Once chosen, can no longer
rescind nor foreclose mortgage.
Exception: After choosing specific performance
but the same becomes impossible, rescission
may be pursued subsequently.(Vi/lanueva &
Tiansay, Law on Sales, 352-353, 2016
2. Rescission
When chosen, there is a correlative obligation to
restitute.
Stipulations that installments paid are forfeited
Deemed chosen when:
1. Notice of rescission is sent
2. Takes possession of subject matter of sale
3. Files action for rescission
4. Barring effect on recovery of balance
(Villanueva: & Tiansay, Law on $a/es, 353-
356, 2016)
3. Foreclosure
Once there has been foreclosure sale, the seller
can no longer claim for remaining balance on the
purchase price (Northern Motors v. Sapinoso,
G.R. No. L-28074, 1970)
J
GR: When foreclosure is chosen, seller can no •
longer claim all amounts due from the sale
including darnaqes and attorneys fees:
Macondray & Co. 'v. Eustequio, 64 Phil. 446
('1937)
E: In case of Perverse Buyer-Mortgagor, if
mortgagor refuses to deliver property to effect
foreclosure, expenses incurred in recovering the
property may also be recovered, i.e., attorney's
fees, etc. (Filipinas Investment & Finance Corp.
v. Ridad, G.R. No. L-27645, 1969)
. .
MACEDA LAW (RA 6552) •
Rationale of the Law
Public policy to protect buyers of real estate on.
installment payments against onerous &
oppressive conditions.
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Covered transactions
Applies to all sale of residential real estate on
installments including Contracts to Sell ' and •
those financed through banking institutions (RA
6552, Sec. 3)
Excluded:
r. 1. Industrial real estate
2. Commercial real estate
(J 3. Sale to tenants under agrarian laws (RA
6552, Sec. 3)
-
., _-:.
(I J 6552, Sec. 4)
Requisites of Sec. 3 of Maceda Law: (FReT)
1. failure to pay installments was due to
reasons, other than failure of the developer
to develop the subdivision or condominium
according to the approved plan and to
comply with such within the time limit
(. 2. Only covers · Residential lots including
'c .
condominium units, excluding, sales to
r- ' tenants.
3. The buyer has paid at least Iwo years of
installments (RA 6552, Sec. 3)
~ ... :
Rights of the Buyer under Maceda Law with
<:: at least two ·(2) years of Installment: (RA
6552, Sec. 3)
1. To pay, without additional interest, the
unpaid installments due within the total
grace period earned by him. Said grace
period is fixed at the rate of one-month
grace period for every one year of
,)
installments payments made. Thus, here the
buyer has at least two months grace period
for he should have paid at least two years of
.. installments to avail of the rights under this
.,) section.
Note: This right can be exercised only once
,.J in every five (5) years of the life of the
contract and its extensions, If any.
2. To be refunded the cash surrender value of
his payments equal to 50% of his total
payments if the contract is cancelled. But if
he has paid five years or more, he is entitled
to an increase of 5% every year and so on
but the cash surrender value shall not
exceed 90% of his total payments.
(McLaughlin v CA, G.R. No. L-57552, 1986)
; The actual cancellation of the contract
··' referred to above shall take place only:
2. After 30 days from receipt by the buyer of
;·
the notarial notice of cancellation or demand
for rescission, AND
..,' I
.. ,i
l
}
CIVIL LAW
3. Upon full payment to the buyer of the cash
surrender value (RA 6552, Sec. 3)
•
NOTE: Buyer may update payment during the
30 day waiting period which will render the
cancellation ineffective.
In the computation of the total number of
installment payments the following are included:
1. Downpayment and
2. Deposit or option money (RA 6552, Sec. 3)
Rights of the l,3uyer under Maceda Law with
less than two (2) years of installments: (RA
1. Still has the right to pay within a grace
period of not less than sixty (60) days
from the date the installment became
due.
2. If the buyer fails to pay the Installment
due at the expiration of the grace period,
i.e. 60 days, the seller may cancel the
contract after 30 days from receipt by
the buyer of the notice of cancellation or
demand for, rescission of the contract by
a notarial act.
Note: Here, the buyer is not entitled to any
refund
Other rights granted under the Maceda Law:
(RA 6552, Sec. 5 & 6)
1. Sell rights to another
2. Assign the .same to another person
3. Reinstate contract by updating during grace
period and before actual cancellation
4. Deed of Safe to be done by notarial act
5. To pay in advance any installment or the full
balance of price anytime without interest and
have such full payment annotated in
certificate of title
Purpose of the law: Protect buyers in
installments against oppressive conditions.
Applies to contracts even before the law was
enacted. (RA 6552, Sec. 2; Siska Dev. Corp. v.
Office of the President. G.R. No. 93176, 1994)
Note: Stipulations contrary to the provisions of
Sections 3, 4, 5 and 6 are null and void. (RA
6552, Sec. 7) Waiver of the required notice is
oppressive.
-------- end of topic ---·····
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G. EXTINGUISHMENT
1. IN GENERAL
A.CAUSES
Grounds (same grounds by which obligations in
general are extinguished) (PLCCC • PNARF)
1. f ayment or performance
2. Loss of the subject matter
3. Condonation or remission
4. Confusion or merger of rights of creditor
and debtor
5. Compensation
6 .. Novation
7. Annulment
8. Rescission
9. Fulfillment of a resolutory condition
10. Prescription
11. Conventional Redemption
12. Legal Redemption (Art. 1231)
B. CONVENTIONAL REDEMPTION (SALE
WITH RIGHT TO REPURCHASE)
There is conventional redemption when the
seller reserved for himself the right to
repurchase the thing sold, with the obligation to
return:
1. The price of the sale;
2. The expenses of contract,
3. Other legitimate payments,
4. The necessary and useful expenses made
on the thing sold (Art. 1601)
Note: This only extinguishes obliQations
pertaining to contract of sale. It does not
extinguish contract itself
The right is exercised only by the seller in whom
right is recognized in the contract or by any
person to whom right was transferred; It must be
in the same contract. (Villanueva & Tiansay, Law
on Sales, 474-475, 2016)
Period to redeem:
(a) No period agreed upon - 4 years from date
of contract
(b) Period agreed upon - should not exceed 10
. years; if it exceeded, valid only for the first
10 years.
(c) When period to redeem has expired 1;1nd
there has been a previous suit on the nature
of the contract - seller still has 30 days from
final judgment on the basis that contract was
a sale with pecto de retro. {Arl. 1606)
CIVIL LAW
Rationale: No redemption due to erroneous
belief that it is equitable mortgage which can be
extinguished by paying the loan.
This refers to cases involving a transaction
where one of the parties contests or denies that
the true agreement is one of sale with the right
to repurchase; not to cases where the
transaction is conclusively a pacto de retro sale.
(Villanueva & Tianf(;ly, Law on Sales, 486, 2016)
Example: Where·: a buyer a retro honestly
believed that he entered merely into an equitable
mortgage, not a pecto de retro transaction, and
because of such belief he had not redeemed
within the proper period. (Leonardo v. CA, G.R.
No. 82457, 1993)
NOTE: When period has expired and seller has
allowed the period of redemption to expire -
seller is at fault for not having exercised his
rights so he should not be granted a new period.
Tender of payment is SUFFICIENT to compel
redemption, but is not in itself a payment that
relieves the vendor from his liability to pay the
redemption price. (Paez v. Magno, G.R. No. L-
793, 1949)
Effect When There is No Redemption Made
• Jurisprudence before the NCC: buyer a retro
automatically acquires full ownership
• Under present art 1607: there must be
judicial order before ownership of real
property is consolidated in the buyer a retro
The seller who is given the right to repurchase
may exercise his right of redemption by paying
the buyer: 1) the price of the sale; 2) the
expenses of the contract; 3) legitimate payments
made by reason of the sale; and 4) the
necessary and useful expenses made on the
thing sold. The repurchase was exercised
because from the P1 OM purchase price directly
paid to B, he deducted the P2M purchase price,
his expenses, interest, and the price of the loan
paid to DBP. He returned the remaining amount
•
and one of the tractors. This is a tacit·
acknowledgment ofthe A's exercise of his right
to repurchase, (Davit/ v. David, G.R. No. 162365",
2014) lj
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n How Is Redemption Effected

•
Seller a retro must first pay the follo~ing: PRE-EMPTION REDEMPTION
(PENT) Arises before sale Arises after sale
~-:--.,....---!
C) 1. The Price of the thing sold No rescission There can be rescission
.. '-
2. Expenses of the contract and other because no sale of the original sale
iegitimate payments made by reason of the exists et
sale Action is directed· Action is directed
3. Necessary and useful expenses made on against prospective against buyer
the thing sold (Art. 1616) seller
4. Valid Tender of payment is sufficient
(Legaspi v. CA. G.R. No. L-45510, 1986) LEGAL REDEMPTION
• Mere sending of notice without valid The right to be subrogated upon the same terms·
tender is insufficient and conditions stipulated in the contract, in the
• Failure to pay useful and unnecessary place of one who acquires the thing by (1)
C', expenses entitles vendee to retain land purchase OR (2) by dation in payment OR (3) by
..... unless actual reimbursement is made other transaction whereby ownership is
transmitted by onerous title. (Art. 1619)
In Case of Multi-Parties • Only applies to contracts of sale.
, (a) When an undivided thing is sold because co-
\
·- ' owners cannot agree that It be allotted to one Types of Legal Redemption:
of· them - vendee a retro may compel the 1. Among co-heirs
,f'
: I vendor to redeem the whole thing (Art. 1611) Any of the heirs sells his hereditary rights to a
"-·'
(b) When an undivided thing is sold by co- stranger before partition:
,......
' I owners I co-heirs, vendors a retro may only • Any of the co-heirs may be subrogated to
'--' exercise his right over his respective share; the rights of the purchaser by redeeming
' . vendee a retro may demand that they must said hereditary right: reimburse the buyer of
", .. :
come lo an agreement first and may not be the price of the sale
compelled to consent to a partial redemption • Co-heirs have 1 month from receipt of notice
::"i
i ,~, . (Art. 1612) in writing (Art. 1088)
(c) When rights of co-owners over an undivided
thing is sold as regards to their own share - 2. Among co-owners
vendee retro cannot compel one to redeem Any or all of co-owners sell their shares to 3•d
_,.' the whole property person:
(d) Should one of the co-heirs/co-owners • Any co-owner ::may exercise the right of
succeed In redeeming the property - such redemption by '.paying reasonable price of
vendor a retro shall be considered as trustee property to the buyer
I
With respect to the share of the other' co- • If 2 or more co-owners desire to exercise
·' owners/co-heirs. (De Guzmen v. CA, G.R. right of redempt(on, they may only do so in
No. L-47378, 1987) proportion to ttie share they respectively
• J
have in thing owned in common (Art. 1620)
Fruits
What controls is the stipulation between parties 3. Among adjoining owners
as regards the fruits. Rural land
(a) Where piece of rural land has an area
If none: not exceeding 1-hectare, adjoining
1. At time of execution of the sale a retro !!iere owner has right to redeem unless
.,· are visible or growing fruits - there shall be grantee does not own a rural land
no pro-rating at time of redemption if no (b) If two or rnore adjacent lot owners desire
indemnity was paid by the vendee a retro · to exercise right to redeem, owner of
2. At time .of execution sale a retro there be no adjoining lot with smaller area shall be
fruits but there are fruits at time of preferred
redemption - pro-rated between vendor a (c) If two or more adjacent lot owners desire
retro and vendee a retro giving the vendee a to exercise right to redeem and both •
.)
'retro a part corresponding to the time he
l possessed the land. (Art. 1617)
)

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have same lot area, one who first
requested shall be granted (Art. 1621)
Urban land
(a) When piece of land is small and cannot
be used for any practical purpose and
bought merely for speculation, owner of
adjoining land can redeem
(b) When 2 or more owners of adjoining lot
desire to exercise right to redeem,
owner whose intended use is best
justified shall be preferred. (Art. 1622)
4. Sale of credit in litigation
When a credit or other incorporeal right in
litigation is sold, debtor shall have a right to
extinguish It by reimbursing the assignee for the
price the latter paid therefor plus judicial costs,
interest; except when the assignment or sale is
made: (a) to a co-heir or co-owner of the right
assigned; (b) to a creditor in payment of his
credit; or (c) to the possessor of a tenement or
piece of land which is subject to the right in
litigation a$signed. (Art. 1634; 1635)
Debtor may exercise right within 30 days from
the date assignee demands payment from him
(Art. 1634)
Other Instances When Right of Legal
Redemption is Granted:
1. Redemption of homesteads
2. Public Land Act
3. Land acquired under free patent homestead
subject to repurchase by wife. legal heirs
within 5 years from date of conveyance
granted by law, need not be stipulated
Redemption In tax sales
In case of tax delinquency/failure to pay tax
assessments, property shall be foreclosed
Delinquent payer has 1 year from date of sale to
redeem by paying to the revenue District Officer
the amount of tax delinquencies, and interest or
purchase price. (National Internal Revenue
Code; Sec. 214)
Redemption by judgment debtor: 1 year from
date of registration of certificate of sale. to
redeem by paying purchaser at public auction
with interest (Rules of Court, Rule 39, Secs. 27,
28)
CIVIL LAW
Redemption In extrajudlcial foreclosure: 1
year from date of sale and registration (Act No.
3135, Sec. 6)
Redemption In judicial foreclosure of
mortgage: right to redeem is granted to debtor
mortgagor except when mortgagee is bank of a
banking institution 90 days after finality of
judgment (GSIS v. CF/, G.R. No. 45322, 1989)
When Period of Redemption Begins to Run:
Right of legal pre-emption of redemption shall be
exercised within 30 days from notice by the
seller (Art. 1623}
How exercised: Tender of payment is not
necessary; offer to redeem is enough. (Vda. de
Panaligan v. CA! G.R. No. 112611, 1996)
NOTE: Written notice under Art. 1623 Is
mandatory for the right of redemption to
commence. (PSC vs. Sps. Valencia, G.R. No.
150060, 2003)
General Rule.:'. Actual knowledge
notwithstanding, w~ltten notice is still required
(Verdad v. CA, G.R!No. 109972, 1996)
Exception: When actual knowledge Is acquired
by co-heirs living In same land with purchaser
(Alonzo v. /AC, G.R. No. L-72873, 1987) or co-
owner was middleman In sale to 3rd party (Dlsitro
v. CA, G. R. No. 95256, 1991}
Art. 1623 does not prescribe any distinctive •
, method for notifying the redemptioner. (Efcuban
v. CA, G.R. No. L-45164, 1987)
2. EQUITABLE MORTGAGE
One which lacks the proper formalities, form of
words, or other requisites prescribed by law for a
mortgage, but shows the intention of the parties
to make the property subject of the contract as
security for a debt and contains nothing
impossible contrary to law. (Cachola v. CA,
G.R. No. 97822, 1992)
•
Any money, fruits, or other benefit to be received
by the vendee as rent or otherwise shall be-
considered as interest and is subject to usury
laws.
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The essential requisites of an equitable secure payment of the loan, sale with pacto
•
mortgage are: de retro is drawn up (Heirs of Reyes, Jr. v.
1. The parties entered into a contract • Reyes, G.R. No. 158377, 2010)' •
denominated as a contract of sale; and
2. Their intention was to secure an existing debt •••••••• end of topic·······
by way of a mortgage. (Molina vs. CA. G.R.
No. 125755, 2003)
f_· - ..
lt .. , A contract with right to repurchase may be
deemed to be an equitable mortgage under the
(1
..... . following conditions (IPERTI}: ·':.~ .
1. Price of sale with right to repurchase is
unusually [nadequate
2. Seller remains in .e_ossession as lessee or
otherwise
3. Upon or after expiration of right to
repurchase, another instrument sxtending
the period of redemption or granting new
,.,., period is executed
4. Buyer Retains for himself a part of the
purchase price
'i 5. Seller binds himself to pay !axes on thing
·- sold
r 6. Any other case where the real [ntentlon of
parties is to secure the payment of a debt or
performance of other obligation (Art. 1602)

NOTE: In case of doubt - in determining

whether it is an equitable mortgage or a sale a
retro, the sale shall be construed as an equitable
mortgage. (Art. 1603)

What to Look for in Determining Nature of

Contract
1. Language of the contract
2. Conduct of parties - to reveal real intent

.) Remedies available to the vendor:

1. Reformation of contract (Art. 1359)
2. Action for declaration of nullity of deed of
sale
:t Action for specific performance (Tolentino v,
CA, 2002); or
4. Foreclosure of the mortgage in equity
(Briones-Vasquez v. CA, 2005).

Rationale Behind Provision on Equitable

Mortgage:
1. Circumvention of usury law
2. Circumvention bf prohibition against pactum
commissorium - creditor cannot appropriate
the things given by way of pledge or
mortgage; remedy here is foreclosure. The
real intention of parties is that the pretended
purchase price is money loaned and to
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H. ASSIGNMENT OF CREDITS
Assignment
The owner of a credit ttansfers to another his
rights and actions in consideration of a price
certain in money or its equivalent
1. Transfers the right to collect the full value of
the credit, even if he paid a price less than
such value
2. Transfers all the accessory rights (e.g.
guaranty, mortgage, pledge, preference)
(Art. 1427)
3. Debtor can set up against the assignee all
the defenses he could have set up against
the assignor
Difference from sale
• Technical term but basically a sale
• Sale of credits and other incorporeal things
(Villanueva, Law on Sales, 524-526, 2016)
Effects of assignment
Lack of knowledge or consent of debtor not
essential for validity but has legal effects
("meeting of minds" in assignment contemplates
that between assignor of the credit and his
assignee) (Rodriguez v. CA, G.R. No. 84220,
1992)
Assignment of rights made wlo knowledge of
debtor: Debtor may set up against assignee the
compensation which would pertain to him
aga_inst assignor of alf credits prjor to
ass1ghment and of later ones until he had
knowledge of the assignment
Debtor has consented to assignment: Cannot
set up against assignee the compensation which
would pertain to him against assignor of all
credits prior to assignment and of later ones until
he had knowledge of the assignment
• Compensation unless assignor was notified
by debtor that he reserved his right to the
compensation
Debtor has knowledge but no consent: may
still set up compensation of debts previous to
assignment but not the subsequent ones. (Art.
1285)
Transfer of ownership
1. By tradition or delivery and not by perfection
2. By execution of public instrument because
intangibles cannot be physically transferred
CIVIL LAW
(
3. Without nec.~sslty of delivering the
document evidencing the credit.
NOTE: This rule does not apply to negotiable
documents and documents of title which are
governed by special laws.
Effect of payment of debtor after assignment
of credits
1. Before Notice of the Assignment -
Payment to the original creditor is valid
and debtor shall be released from his
obligation
2. After Notice - Payment to the original
creditor is not valid as against the
assignee. He may be made to pay again
by the assignee (Art. 1626)
Warranties of the assignor
1. NO warranty against hidden defect - NIA
because intangibles has no physical
existence (Villanueva & Tiansay, Law on
Sales, 532, 2016)
2. He warrants the existence and legality of
credit - there is warranty except when
expressly sold as a doubtful account
3. NO warranty as to the solvency of debtor
unless it is expressly stipulated OR unless
the insolvency was already existing and of
public knowledge at the time of the
assignment (Art. 1628)
-NOTES:
Warranty shall last for 1 year only (Art. 1629)
One who asslqns inheritance right w/o
enumerating rights shall be answerable for his
character as an heir (Art. 1630)
One who sells who!~ of certain rights for a lump
sum, shall be answerable for legitimacy of the
whole in general but not for each of the various
parts (Art. 1631)
Breach of warranty: liabilities of the assignor
of credit for violation of his warranties
•
Assignor in good faith - Liability is limited to
price received, expenses of the contract anct
other legitimate payments made by reason of
the assessment
Assignor in bad faith - Liable ALSO for
(expenses of contract and . other legitimate
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payments plus useful and necessary expenses)

•
damages (Art. 1628) When credit or incorporeal right in litigation is
assigned or sold, debtor has a righno extinguish
ASSIGNMENT OF CREDIT OR it by reimbursing the assignee for the price the
INCORPOREAL RIGHT IN LITIGATION buyer paid plus Interest (Art. 1634)

Requisites (SPA) Right to redeem by debtor not available in

1. There must be a .§.ale or assignment of the following instances (not considered
credit speculative (Art. 1635)
2. There must be a fending litigation 1. Assignment of credit I incorporeal right to
3. The debtor must pay the ~ssignee: co-heir or co-owner; the law does not favor
i. Price paid by him AND co-ownership
~r-: \
: ; ii. Judicial costs incurred by him AND 2. Assignment to creditor in payment for his
iii. Interest on the price from the date of credit
payment (Art. 1634) o Presumption is that the assignment is
above suspicion; assignment is in the
t. .' The right must be exercised by the debtor within form of dacion en pago, thus perfectly
30 days from the date the assignee demands legal
(judicially or extra-judicially) payment from him. 3. Assignment to possessor of tenement or
:..., (Art 1634) piece of land which is subject to the right In
litigation assigned
~... ) NOTES: o Purpose is to presumably preserve the
Presumption: buyer's purpose is speculation tenement
and; law would rather benefit the debtor of such
credits rather than the one who merely ····-··· end of topic ••••••••
speculates for profit. (Vilfanueva, Law on Sales,
533, 2016)
(·

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VII. LEASE A. GENERAL PROVISIONS

TOPIC OUTLINE UNDER THE SYLLABUS:
A. GENERAL PROVISIONS
B. RIGHTS AND OBLIGATIONS OF LESSOR
C. RIGHTS AND OBLIGATIONS OF LESSEE
Contract of Lease is a contract by which one
agr.ees to give to the other for a fixed time and
price the use or profit of a thing, or of his
services {The Employees' Club, Inc. v. China
Banking Corporation, G.R. No. L-40188, 1934).
Characteristics of Lease of things (CLONS-
PEP-TP)
(a) Qonsensual
(b) .!:essor need not be the owner
(c) Qnerous
(d) ~ominate ,.
(e) .§.ubject matter must be within the commerce
of man (i.e. not:belonging to public domain)
(f) f.rincipal contract
(g) Purpose is to allow ~njoyment or use of a
thing
(h) f.urpose to which the thing will be devoted
should not be immoral
(i) Period is !emporary
G) f.eriod may be definite or indefinite

NOTE: Persons disqualified to buy under ARTS.

1490 and 1491 of the Civil Code are also
disqualified to become lessees of the things
mentioned therein. (Art. 1646)

Kinds of Leases
1. LEASE OF THINGS
• Concerns movable or immovable property
• One of the parties binds himself to give to
another the enjoyment or use of a thing
• For a price certain and
• For a period which may be definite or
indefinite

NOTE: However, no lease for more than 99

years shall be valid.
General Rule: The contract of lease may be
made orally.
Exception: Lease of real property for more than
1 year (must be in writing to comply with Statute
. of Frauds).

2. LEASE OF WORK AND SERVICES •

• One of the parties binds himself to execute
a piece of work or to render to the other'
sorne service for a price certain
• The relation of principal and agent does not
exist between them

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:·:
•
CONTRACT OF . CONTRACT OF • Owner has the; right to fix the rent because
I LEASE OF SERVICE LEASE OF THINf;· , the contract is ,consensual and not imposed
The object of contract The object of contract by law. .
,(,"··,
• is the service itself Is a thing • Increasing the rent is NOT an absolute right
" ..I and not the result of the lessor.
which it cenerates • If the rent is fixed for the first time, courts
Lessor's services Lessor has to deliver cannot interfere, but if it is a renewal, the
must still be paid the thing leased. courts can settle the disagreements.
even if the result In case of breach, • There being no agreement on the
intended is not there may be an reasonable compensation that a lessee
attained. action for specific must pay for its continuing use and
In case of breach, no performance occupation of the premises after the
action for specific termination of the lease, it was proper for the
performance lower courts to determine the same.
(MA TERCCO v. First Land/ink Asia
LEASE OF RURAL AND URBAN LANDS Development Corporation, G.R. No. 175678,
\ 2007)
' . Elements of a Tenancy Agreement (PACAPS)
1. f_arties are the landowner and the tenant or · LEASE · 1 ·.USUFRUCT
agricultural lessee; Ownership on the Ownership of the thing
2. Subject matter of the relationship is an part of the lessor is on the part of the
~gricultural land; not necessary to granter is necessary to
3. There is fonsent between the parties to the constitute a contract constitute a usufruct
relationship; of lease
4. Purpose of the relationship is to bring about It is generally a It is always a real right
~gricultural production; personal right and is
5. There is Personal cultivation on the part of a real right only by
the tenantor agricultural lessee; and
~xception ·----·-- .
6. Harvest is Shared between the landowner It is limited to the use It includes all possible
·- \ and the tenant or agricultural lessee. specified In the . uses and enjoyment of
NOTE: Absence of any of the elements will not
contr~----= -··· theJhlr:g _
Lessor places and Owner allows the
make the alleged tenant a de facto tenant.
maintains the lessee usufructuary to use and
in the peaceful enjoy the property
What a tenant is estopped from denying· is the
enjoyment of the
title of his landlord at the time of the
thing
commencement of the landlord-tenant relation. If
i
·' the title asserted is one that is alleged to have
Its term is generally Its term may be for an
been acquired subsequent to the
commencement of that relation, the presumption for a deJinit~eri<?.L indefinite~iod ··--·-
It may be created by It may be created by
will not apply. (Ermitano v. Paglas, G.R. No.
contract as a general Jaw, contract, last will or
174436, 2013)
rule ti prescription. _
Lessee has no duty, Usufructuary has duty to
Rent is the compensation either in money,
provisions, chattels, or labor, received by the to make repairs rnake repair~-------1
lessor from the lessee.
Requisites:
1. Must not be fictitious or nominal,
I Lessee has no duty
to pa taxes
Lessee cannot
Usufructuary has a duty
·---+l_t_o.....p_a,,_y_ta_x_e_s
Usufructuary may
--1

otherwise the contract Is considered constitute a usufruct constitute a sublease

essentially gratuitous; of the property
2. Must be capable of determination; qnd leased ---·-···--~·-·-----·--··------
3. May be in the form of products, fruits, or
j construction, as long as it has value.

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,,
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*=-(
..
(b) Those disqualified due to fiduciary
. LEASE SALE relationship'
Only the use or Ownership is • Guardian: ward
enlovment is transferred transferred • Agent: principal
Transfer Is temporary Transfer is • Executor and administrators
permanent • Public officer: state property ·
Lessor need not be the Seller must be the • Justices/judges: property under litigation
owner owner at the time • Others disqualified by law
the property is
delivered Lease by Filipinos
The price of th~ object Usually, the selling May lease lands of public domain with an area of
(distinguished from the price is mentioned 500 hectares and may acquire not more than 12
rent) is usually not hectares.
mentioned
Lease by Corporations
· LEASE OF SERVICES AGENCY At least 60% Filipino-owned corporations, may
It Is based on It is based on lease lands of public domain for a period of 25
employment representation years, renewable for not more than 25 years; the
- the lessor of services - agent represents · area not to exceed more than 1,000 hectares.
does not represent his his principal and
employer nor does he enter into juridical Rules on Lease of Things when Lessee Is an
execute iuridical acts acts Allen :
Principal contract Preparatory contract (a) 99-year limit applies to aliens as long as It is
a lease of personal property.
General Rule: A lease of real property is a (b) Aliens CANNOT lease public lands, and
personal right. cannot acquire private lands except through
Exceptions: . succession ..
I. If it is for more than one year and to be (c) If lease of real property (private lands),
enforceable, it must be in writing. maximum of 25 years renewable for another
ii. If it is registered with Registry of Property, 25 years (P.D. ?,13).
regardless of its period. (d) Under the Investor's Lease Act (ILA) of 1995,
the 25-year period was extended to SO years
Effects if lease of real property is not renewable for another 25 years provided the
registered following conditions are met: •
1. Lessee must make Investments;
• The lease ·is not binding on third persons.
2. Lease is approved by DTI; and
• Such third person is allowed to terminate the
3. If terms are violated, DTI can terminate
lease in case he buys the property from the
It
owner-lessor.
• Actual knowledge of existence and duration NOTE: The ILA did not do away with P.O. 713.
of lease is equivalent to registration. Under ILA the consent of DTI is required, while
• Stranger knows of the existence of the lease in P.D. 713 it is not.
but was led to believe that the lease would
expire soon or before the new lease in favor Rent Control Act of 2009
of him begins, the stranger can still be
considered innocent. Coverage:
1. Lease of all residential unit in the NCR and •
Persons disqualified to become lessees other· highly urbanized cities, the total
(a) General Rule: Husband and wife car.not monthly rent for each ranges from P1 .00 to
.. - ...
"
lease to each other their separate properties . P10,000.00.
Exceptions: 2. Lease of all residential unit elsewhere where
i. If the property regime is complete the total monthly rental ranges from P1 .00 to
ii. By judicial decree of separation of PS,000.00.
property 3. Rent-to-own units, commercial spaces,
motels and hotels are not covered.

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•
B. RIGHTS AND OBLIGATIONS OF·
('J Rent: the amount paid for the use of residential
LESSOR
unit excluding utilities, association dues, etc.

Limitations:
Obligations of the Lessor (Art.1654) (DNM)
1. To Qellver the thing which Is the object of
.('·. 1. No landlord is allowed to increase the rent
the contract in such condition as to render it
more than seven percent (7%) annually if
fit for the use intended.
the unit is occupied by the same ten~nt.
f''' 2. To make on the same during the lease all
' .. , J
'~ Moreover, for landlords whose units are
the Mecessary repairs in order to keep it
dormitories, bed spaces, or boarding houses
suitable for the use to wtiich it has been
that are rented to student, they are only
devoted unless there is a stipulation to the
allowed to increase rent once a year.
contrary.
2. Lessor cannot demand from tenant more
3. To Maintain the lessee in the peaceful and
than one (1) month advance rent and more
.~ adequate enjoyment of the lease for the
(. than two (2) months deposit.
l .' entire duratlon.of the contract.
3. Tenant is not allowed to sub .. lease unless
with the written consent of the landlord. • This is true only if the contract is valid.
•... ,• Where the contract is void, for having an
Grounds for Eviction: existent contract of lease, the lessor has
r 1. Assignment and sub-leasing without consent no right to lease the same property.
of landlord; . (Bercero v. Capitol Development
.,">. Corporation, G.R. No. 154765, 2007)
u 2. Arrears in payment of rent for a total of three
(3) months
3. Legitimate I need of the owner/lessor to Nature of the duty of the Lessor to maintain
repossess his ot het property for his or her peaceful possession of the premises by the "
own use of for the use of an immediate Lessor
member of his or her family as a residential This is merely a warranty that the lessee shall
unit: Provided, however, That the lease for a not be ~isturbed in his legal, and not physical,
definite period has expired: Provided, further, possession. (Chua Tee Dee v. Court of Appeals,
That the lessor has given the lessee the G.R. No. 135721, 2004)
.. ,\
formal notice three (3) months in advance of
the lessor's intention to repossess the --- end of topic----
property and: Provided, finally, That the
owner/lessor is prohibited from leasing the
residential unit or allowing its use by a third
,i
party for a period of at least one (1) year
from the time of repossession;
4. Nee~ of the lessor to make necessary
repairs of the leased premises which is the
subject of an existing order of condemnation
by appropriate authorities concerned in
order to make the said premises safe and
habitable:
5. Expiration Of the period of the lease contract.

,· ---- end of topic ---·

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C. RIGHTSAND OBLIGATIONS OF
LESSEE
Obligations of the 'Lessee (Art. 1657).(PUP)
1. fay the price of the lease according to the
terms stipulated.
2. Use the thing leased as a diligent father of a
family devoting it to the use stipulated, a.nd
in the absence of stipulation, to that which
may be inferred from the nature of the thing
leased, according to the custom of the place.
3. Pay the expenses for the deed of lease.
Rights of the Lessee
1. Right to be respected In his possession.
2. Right to be restored to said possession by
the means established by law or by the
Rules of Court, should he be disturbed
therein.
Remedies when lessor or lessee does not
comply with their obligations
(a) Rescission and damages; or
(b) Damages while allowing the contract to
remain in force.
Remedy of lessee ff lessor refuses to accept
the rentals
To make a proper tender of payment and
consignation in order to extinguish the debt.
Rules on changing the form of the lease
• The lessor can alter the thing leased
provided there is no impairment of the use to
which the thing is devoted under the terms
of the lease.
The lessee can also make alterations so
long as the value of the property is not
substantially impaired.
• The lessee can also make alterations so
long as the value of the property is not
substantially impaired.
Rules in case of urgent repairs
• If the repairs last for not more than 40 days,
the lessee is obliged to tolerate the work
even though the work may annoy him or he
may be deprived .of a part of the premises if
repairs last for not more than 40 days.
• If repairs last for 40 days or more, lessee
can ask for reduction of the rent in
proportion to the time - including the 1 •1 40
days - and the part of the property of which
he is deprived.
------------~:----·-·····-
CIVIL LAW
NOTE: In either case, rescission may be availed
of if the main purpose of the lease is to provide a
dwelling place and the property becomes
uninhabitable.
:\
Effects if lessor fa11s to rnake.urgent repairs
The lessee may (ROSS): .
(a) Ask for .Rescission, in case of substantial
damage to him.
(b) Qrder repairs at the lessor's cost;
(c) .§.ue for damages; or
(d) §.uspend the payment of the rent;
Effect of destruction of the subject matter
with respect to the lease
If TOTALLY . . . IF ONLY .
. DESTROYED . .PARtlALLY
. . · .. · DESTROYED
.Lease is Lessee can choose
extinguished between reduction of
the rent and
rescission
Rules upon Termination of Lease governing
useful improvements caused by the lessee
(OAR) .
If made in good faith and suitable to the use for
which the lease is intended, without altering the
form or substance of the property:
1. Lessor may ~ppropriate lhe improvements
provided he pays the lessee ~ of its value at
that time; ·
2. If lessor does not appropriate, lessee may
Remove the improvements even if the
principal thing may suffer damage; .
3. If improvement is Qrnamental, no nght of
reimbursement, but lessee may remove
them provided no damage is caused to the
principal thing.
NOTE: Lessee has no right of retention of the
premises if the lessor does not pay. His only
right is right of removal if lessor does opt not to
,,
pay and appropriate. -;
Kinds of Trespass ifo Lease
•
(a) Trespass in fact (perturbacion de mere
hecho): ·, .
• Lessor is not liable for the mere fact of a
trespass or trespass in fact made by a
third person of a leased property.
• Mere fact or mere act of trespass is
when the third person .clafms no right
whatever.
• Physical enjoyment is reduced.
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(b) Trespass In law (perturbaclon de
derecho):
r: • A third person claims legal right to enjoy
\\'• I '
the premises
.(" • Lessor will be held liable
\. , against non-consenting co-owners.
Duration of Lease . 5.
(a) Lease may be for a determinate time or
fixed period
• Lease will be for the said period and it
ends on the day fixed without need of a
demand.
(b) Lease may be without a fixed period
( l i. For rural lands (Art. 1682) - It shall be
\. .
for all time necessary for the gathering
of fruits which the whole estate may
yield in 1 year, or which it may yield
once.
<.. ii. For urban lands (Art. 1687)
r, (i) If rent is paid dally, lease is from day
,', J to day.
(ii) If rent is paid weekly, lease is from
week to week.
(iii) Jf rent is paid monthly, lease is from
month to month.
(iv) If rent is paid yearly, lease is from
year to year.
The general rule is lease contracts survive the
:"1
' death of the parties and continue to bind the
heirs except if the contract states otherwise.
(Inocencio vs. Hospicio de San Jose, G.R. No.
201787, 2013)
,.,
The well-entrenched principle is that a lease
from month-to-month is with a definite period
and expires at the end of each month upon the
demand to vacate by the lessor. (Cebu Bionic
·, .. Builders Supply, Inc. vs. Development Bank of
the Philippines,G.R. No. 154366, 2010)
Rules on Extension of the Lease Period
1. If a lease contract for a definite term allows
lessee to extend the term, there is no
necessity for lessee to duly notify lessor of
his desire to so extend the term, unless the
contrary is stipulated.
2. "May be extended" as stipulation: lessee can
extend without lessor's consent but lessee
must notify lessor.
3. "May be extended for 6 years, agreed upon
_, by both parties" as stipulation: this must be
interpreted in favor of the lessee. Hence.
,,
,;'
CIVIL LAW
•
ordinarily the lessee, at the end of tire
original period, may either:
(a) Leave the premises·
(b) Remain in possession
4. In co-ownership, assent of co-owner Is
needed; otherwise, it is void or ineffective as
Where according to the terms of the contract,
the lease can be extended only by the
written consent of the parties thereto, no
right of e~tension can rise without such
written consent.
Implied new lease (Tacita Reconducion)
• Lease that arises lf at the end of the contract
the lessee should continue enjoying the
thing leased for 15 days with the
acquiescence of the lessor, unless a notice
to the contrary had previously been given by
either party.
• Period of the implied new lease is not that of
the original contract but the time established
In Arts.1682 and 1687 (see Duration of
Lease above).
• Other terms of the original contract are
revived except option to purchase in case
such was in· the original contract.
NOTE: Terms that are revived are only those
which are germane to the enjoyment of
possession, but not.those with respect to speclal
agreements which (~re by nature foreign to the
right of occupancy ior enjoyment inherent in a
contract of lease :_ such as an option to
purchase the leased premises. (Dizon v.
Magsaysay, G.R. No. 23399, 1974)
Requisites for Implied New Lease (ENC)
1. The term of the original contract has .§.xpired;
2. The lessor has r!ot given the lessee a
notice to vacate;
3. The lessee fontinued enjoying the thing
leased for at least 15 days with the
acquiescence of the lessor;
When there is no implied new lease
(a) When before or after the expiration of the
term, there is a notice to vacate given by
either party.
(b) When there is no definite fixed period In
the original lease contract as in the case
of successive renewals.
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I
I
EXTENSION OF
LEASE CONTRACT.
.
·
RENEWAL OF • ·
LEASE
CONTRACT .
r;;;-;------·-···----·-
I
l . ·· - -, _.
· J
;;~;~f:• -there ·- _::~1,~~~~f,'he .
Subleasing is
_
Assignment is not

Original contract Original contract

subsists ceases to exist
Creates additional Creates a new NOTE: The su~-lessee is primarily liable to his
term contract sub-lessor and' only a court can extinguish or
modify this primary liability if the sub-lessor
Perpetual Lease contests the pre-termination of the principal
• A lease contract providing that the lessee lease by the lessor. (Tamio v. Ticson, G.R. No.
can stay in the premises for as long as he 154895, 2004)
wants and for as long as he can pay the
rentals and its increases. Circumstances' when a sub-lessee is made
• This is not permissible; it is a purely liable to the lessor:
potestative condition because it leaves the I. For all acts which affect the use and
effectivity and enjoyment of leasehold rights preservation · of the thing leased in the
to the sole and exclusive will of the lessee. manner stipulated between the lessor and
Sublease the lessee.
• A lessee may sublease the thing leased ii. For any rent due to the lessor from the lessee
unless there is an express prohlbitior. to do which the latter failed to pay:
so. • soblessee is subsidiarity liable
Remedy of lessor If lessee violates • Sublessee ·: shall not be responsible
prohibition: action for rescission of the lease beyond amount of rent due from him, in
and damages. accordance . with the terrris of the
• If the prohibition to sublease is not express sublease, at the time of the extrajudicial
but only implied, the sublease will still be demand by the lessor
allowed.
• Duration of sublease cannot be longer than Grounds for Ejectment
that of the lease to which it is dependent. (a) When the period agreed upon or that which
• The prohibition against subleasing may not is fixed for the duration of leases (Arts.1682
embrace the taking in of boarders. (Mal/are and 1687) has expired (see Duration of
v. Court of Appeals, G.R. No. 85108, '1989) Lease).
• In a sublease arrangement, there are two
(b) Lack of payment of the price stipulated. •
distinct leases: the principal lease and the • In case lessor refuses to accept
sublease. rentals, lessee should make tender
of payment, and consignation
otherwise there is no payment.
• Willingness to pay is not payment.
(c) Violation of any of the conditions agreed
Lessee remains a Lessee is
upon in the contract.
party in the contract.
disassociated from
(d) When the lessee devotes thing leased to
j
--- __, ., _. . . ;. .
the original contract
IJ..f..!.~_c:I_,~~.:
Two leases and two i Only one (Jessor-
.. ,_
any use or service not stipulated which
causes the deterioration thereof, or if he
does not observe the requirement in Art.
distinct juridical i assignee who 1657.
relationship (lessor- I becomes the •
lessee and j lessee)because
1 sublessor-sublessee) i lessee transmits •
In a contract of lease, the twin remedies of
rescission and judicial ejectment become

--------.-1[_;~~;~~:~~:a~r]iI ~is available after either the failure to pay rent or to

comply with the conditions of the lease.

~
I
Sublessee does not
have any direct
action against the
. Assignee has a direct
I' action against the
lessor, there being
Technically, no extrajudicial rescission
effectively takes place as a result of the
violations until the demand to pay or comply is
L!e.:.~.S..~!----·-------·-··-- . novation _. _

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 ATENEO CENTRAL
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)
duly served and Is rejected or disregarded by the SPECIAL RULES FOR LEASE OF
lessee. RURAUURBAN LANDS

The tenant's refusal to heed the demand to A. Lease of Rural Lands

vacate, coming after the demand to pay or to
comply similarly went unheeded, renders
unlawful the continued possession of the teased
premises. (Cebu Automatic Motors, Inc. vs.
• •
Loss of more than ~... Sterility of the land
General Milling Corporations, G.R. No. 151168, of the fruits through'. leased
2010) extraordinary and Loss of fruits due to
fortuitous events ordinary fortuitous
The lessor may judicially eject the lessee for events
any of the following causes: (EPCU) Unless: There is Fruits are lost after
1. When the period agreed upon, or that stipulation to the they have been
which is fixed for the duration of leases contrary separated from their
under Articles 1682 and 1687, has stalk, root or trunk
gxpired; Art. 1681
2. Lack of fayment of the price stipulated;
3. Violation of any of the .Qonditions agreed NOTE: Extraordinary fortuitous events are
upon in the contract; understood to be (supra):
Lessee devotes the thing leased to any Y,se or (a) Fire;
service not stipulated which causes the (b) War;
deterioration thereof; or if he does not observe (c) Pestilence;
the requirement in No. 2 of Article 1657. (d) Unusual flood;
(e) Locusts; ,
--- end of topic --- (f) Earthquake;
(g) Uncommon events; and
(h) Those which the contracting parties could
not have unreasonably seen.

OUTGOING · INCOMING LESSEE

LESSE::[
To allow the
incoming lessee or
the lessor the use of
the premises and
other means
necessary for the
preparatory labor for
the following year
To permit the
outgoing lessee to do
whatever may be
necessary for the
gathering or
harvesting and
utilization of the
fruits, In accordance
with custom of the
lace 'Art. 1683

B. Lease of Urban Lands

,:
Custom of a plac~'. shall be observed as to the
kind of repairs for which the lessor shall be liable.
In case of doubt, repairs are deemed chargeable
against lessor. (Art. 1686)
When furniture is leased by the lessor of a
house or a store, the lease of the former shall be
deemed for the duration of the lease of the
premises. (Art. 1688)

---- end of topic ---

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VIII. PARTNERSHIP A. GENERAL PROVISIONS

TOPIC OUTLINE UNDER THE SYLLABUS A. Partnership Defined

VII. PARTNERSHIP Partnership is a contract whereby two or more
A. GENERAL PROVISIONS persons bind themselves· to contribute money,
property, or industry to a. common fund, with the
8. OBLIGATIONS OF THE PARTNERS intention of dividing the profits among
themselves. Two or more persons may also form
C. DISSOLUTIONAND WINDING UP a partnership for the exercise of a profession
(Art. 1767)
D. LIMITED PARTNERSHIP
1. Elements of a Partnership (ACD)
1. Meeting of minds (.!.greement);
2. To fontribute money, property, or industry
to a common fund; and
3. Intent to Qivide profits (and losses) among
the contracting parties (Jarantilla, Jr. v.
JarantU/a, G.R. No. 154468, 2010)

2. Essential Features of Partnership

(VaLeCLO)
1. There must be a Valid contract.
2. The parties must have Legal capacity to
enter into the contract.
3. There must be a mutual Contribution of
money, property or industry to a common
fund. (Art. 1767)
4. There must be a Lawful object. (Art. 1770)
5. The purpose or primary purpose must be to
Obtain profits and divide the same among
the parties. (Art. 1767)

3. Additional Requirement for Juridical

Personality /,
i. It is also required that the articles of
partnership must not be kept secret
among the '/members; otherwise, the
association shall have no legal personality
and shall be governed by the provisions
on Co-ownership. (Art. 1775)
ii. "Kept secret among the members" where
secrecy is directed not to third persons but
to some of the partners. (Art. 1775)
iii. This does not mean that there could be no •
contractual relations amongst the parties;
there is only no partnership or association.
with distinct legal personality. ·

4. Characteristics of Partnership
1. Essentially contractual in nature (Arts. 1767,
1784)
2. Separate juridical personality (Art. 1768)
3. Delectus personae (Arts. 1804, 1813)
4. Mutual Agency (Art. 1803)

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I
5. Personal liability of partners for partnership That there Is no legally constituted partnership
. .I debts (Arts. 1816, 1817) does not mean that there are no contractual or
legal relations among the parties.
B. Partnership Existence
4. Effect of P1rtl11l llleg11llty
1. Rules to Oetern'llne l=xlstenc:e Where a part or the business of a parfnershlp is
General Rule: Persons who are not partners as legal and a part illegal, an account of that which
between themselves, cannot be partners as to is legal may be had.
third persons (Art. 1769[1))
Where, without the knowledge or participation of
r: ' the partners, -the firm's profits in a lawful
,. } Exception: Partnership by estoppel (Art. 1825)
business have been increased by wrongful acts,
2. Other rules to determine whether a the innocent partners are not precluded as
partnership exists (Art. 1769) against the guilty partners from recovering their
1 The following, alone, do not establish share of the profits.
, I
partnership:
i. Co-ownership or co-possession C. Formation of Partnership
ii. Sharing of gross returns, whether or not the
persons sharing them have a joint or 1. How Partnership Is Formed
common right or interest in any property General rule: No special form is required for the
from which the returns are derived; validity of a contract (Art. 1356).
. . .. iii. Receipt by a person of a share of the profits
of a business is prima facie evidence that 2. Burden of Proof, and Presumption
he is a partner in the business, unless such Must be proven, not presumed
were received in payment: Persons acting as partners are presumed to
:..... a. Debt by installments or otherwise; have entered into contract of partnership. The
b. Wages or rent; burden of proof is shifted to party denying its
c. Annuity; existence. Extant partnership presumed to exist
d. Interest on loan; until proven terminated.
e. Consideration for sale of goodwill of
business/ other property by Persons acting as partners presumed to have
..., installments entered into contract of partnership. Burden of
l proof shifted to party denying its existence.
.,.-''
A partnership must have a lawful object or
purpose, and must be established for the Extant Partnership presumed to exist until
common benefit or interest of the partners proven terminated.
(Art.1770)
.) Use of the term "partner" does not
3. Effects of an Unlawful Partnership necessarily show existence of partnership.
'· .;"
' a. Void ab initio such that it never existed in the Non-use of the terms "partnership" or "partners"
eyes of the law (Art. 1409[1)) are not conclusive as to non-existence or
' ' b. Profits shall be confiscated in favor of the partnership, but entitled to weight.
government (Art. 1770)
c. Instruments or tools and proceeds of the 3. Partnership Term
-. ; a. Partnership at will
crime shall also be forfeited in favor of the
government (Art. 1770;.Revised Penal Code, One in which no fixed term is specified and
·.. ) Art. 45) is not formed for a particular undertaking or
d. The contributions of the partners shall not be venture which may be terminated anytime
' ·' confiscated unless they fall under (c~. (Arts. by mutual agreement.
1411 and 1412) •
b. Partnership with a fixed term
Judicial decree is not necessary to dissolve an The term for-which the partnership is to exist
, '.
I unlawful partnership. is fixed or agreed upon or one formed for a
particular undertakinq.
I :
I '

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 ATENEO CENTRAL
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D. Common Types of Partnership When a person has been thus represented to be

a partner in an :existing partnership, or with one
1. Unlversal vs. Particular Partnership or more persons who are not actually partners,
he is an agen( of the persons consenting to
(a) Universal Partnership such representation in order to bind them to
i. Universal Partnership of All Present the same extent and in the same manner as
Property (Art. 1779) though he were a partner in fact (Art. 1825).
Comprises the following:
a. Property which belonged to each of the Elements to establish liability as a partner on
partners at the time of the constitution of the ground of estoppe]
partnership 1. Defendant represented himself as partner
b. Profits which they may acquire from all or represented"by others as such
property contributed 2. Not denied or refuted by defendant
3. Plaintiff relied dn such representation
Ii. Universal Partnership of Profits 4. Statement of defendant not refuted
Comprises all that the partners may acquire by
their industry or work during the existence of the . LIABILITIES IN ESTOPPEL
partnership (Art. 1780). When all the A partnership act or
members of an obligation results,
But persons who are prohibited from giving existing partnership therefore the
donations or advantage to each other cannot consent to the partnership is liable
enter into a universal partnership (Art. 1782). re resentation
Other cases It Is the joint act or
(b) Particular Partnership (Art. 1783) obligation of the person
Has for its objects: acting and persons
a. Determinate things consenting to the
b. Their use or fruits representation. Person
c. Specific undertaking who represented
d. Exercise of profession or vocation himself & all those who
made representation
2. General vs. Limited Partnership liable ro-rata/ lointl
•
(a) General Partnership
4. Particular Partnership vs. Joint Venture
Consists of general partners who are liable pro
The observation that a joint venture is for a
rata and subsidiarily and sometimes solidarily
single transaction while a partnership entails a
with their separate property for partnership debts.
continuing business is not entirely accurate in
Philippine law. A partnership may be universal
[b] Limited Partnership (Art. 1783)
or particular and a particular partnership has for
One formed by two or more persons having as
its object a specific undertaking (Roque, Jr. v.
members one or more general partners and one
COMELEC, G.R. No. 188456, 2009).
or more limited partners, the latter not being
personally liable for the obligations of the
Generally understood to mean an organization
partnership.
formed for some temporary purpose, a joint
venture is likened to a particular partnership or
3. Partnership by Estopi::,el
one which "has for its object determinate things,
•
Either by words or conduct, a person does any
their use or fruits, or a specific undertaking, or
of the following:
the exercise· of a· profession or vocation."
1. Directly represents himself to anyone as a
(Realubit v. Jaso, G.R. No. 178782, 2011)
partner in an existing partnership or in a
non-existing partnership
(a) Particular Partri~rship
2. Indirectly represents himself by consenting
In a joint account, '.the participating merchants
to another representing him as a partner in
can transact business under their own name,
an existing partnership or in a non-existing
and can be indiv\dUally liable therefore. a
partnership
partnership generally relates to a continuing

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business of various transactions of a certain kind. obtain registration as a firm, company,

r·
., .I (Heirs of Tan Eng Kee v, CA, G.R. No. 126881, partnership, association or corporation for
2000) the practice of architecture;
~-
/"" ....
)
(b) Joint Venture
2. Registered and licensed architects shall
compose at least seventy-five percent (75%)
An American concept similar to our joint account of the owners, shareholders, members
-,
; i
which is a sort of informal partnership, with no incorporators, directors, executive officers,
, .. firm name and no legal personality. Usually, but as the case may be;
' ,''
t, not necessarily a joint venture is limited to a 3. Individual members of such firm,
single transaction, although the business of partnership association or corporation shall
pursuing to a successful termination may be responsible for their individual and
continue for a number of years. (Heirs of Tan collective acts as an entity and as provided
Eng Kee v. CA, G.R. No. 126881, 2000) by law;
4. Such firm, partnership, association or
A joint venture is a form of partnership, and corporation shall be registered with the
thus, to be governed by the laws on partnership. Securities and Exchange Commission and
(Marsman Drysdale Land, Inc. v. Philippine Board.
Geoanalytlcs, G.R. No. 183374, 2010)
,.. 6. Other Classifications of Partnership
I
As a rule, corporations are prohibited from (a) As to Legality of Existence
entering into partnership agreements; a. De jure partnership-one which has
consequently, corporations can enter into joint complied with all the legal requirements for Its
venture agreements with other corporations or establishment
partnerships for certain transactions in order to b. De facto-one which has failed to comply
form "pseudo partnerships." A joint venture with al! the legal requirements for its
agreement between and among corporations establishment
may be seen as similar to partnerships since the
elements of partnership are present. (Nerre (b) As to Purpose
Nickel Mining and Dev't Corp. v. Redmont 1. commerctal or trading partnership-one
Consolidated Mines Corp., G.R. No. 195580, formed for the transaction of business
2014) 2. Professional or non-trading
partnership-one formed for the exercise of
A verbal agreement to form a joint venture a profession
company is valid and binding. The failure to
reduce the agreement to writing does not affect ---- end
Its validity or enforceablltty as there is no law or ... of topic ----···
··1
regulation which provides that an agreemer1t to t~
Incorporate must be in writing. (Fong v. Duenas,
G.R. No. 185592, 2015)

5. Professional Partnership
General professional partnership exists when
two or more persons may also form a
partnership for the exercise of a profession (Art.
1767 (2)).

The Architecture Act of 2004 (R.A. No. 9266)

grants that a firm, company, partnership,
corporation or association may be registered or
licensed as such for the practice of architecture
under the following conditions:
1. Only Filipino citizens properly registered
and licensed as architects under this Act
may, among themselves, or together with
allied technical professionals, form and

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8. OBLIGATIONS OF THE PARTNERS
RIGHTS AND OBLIGATIONS OF
PARTNERSHIPS
All partners, Including Industrial ones, shall be
liable pro rata with al1 their property and after all
the partnership assets have been exhausted, for
the contracts which may be entered into In the
name and for the account of the partnership,
under its signature and by a person authorized
to act for the partnership. However, any partner
may enter into a separate obligation to perform a
partnership contract. (Art. 1816)
Note: Except limited liability partners
Any stlpulation against personal liability of
partners for partnership debts is void, except as
among them. (Art. 1817)
Partners are liable solidarily with the partnership
for everything chargeable to the partnership
when caused by the wrongful act or omission of
any partner acting in the ordinary course of
business of the partnership or with authority from
the other partners and for partner's act or
misapplication of properties. (Art. 1824)
A newly admitted partner into an existing
partnership is liable for all the obligations of the
partnership arising before his admission but out
of partnership property shares. (Art. 1826)
Partnership creditors are preferred to those of
each of the partners as regards the partnership
property. (Art. 1827)
Upon dissolution of the partnership, the partners
shall contribute the amounts necessary to satisfy
the partnership liabilities. (Art. 1839(4), (7))
A partner's obligation for partnership liabilities is
subsidiary in nature - they shall only be liable
with their property after all partnership assets
have beeh exhausted. Second, the partner's
obligation to third persons with respect to
partnership liability is pro rata. (Guy v. Gacott,
G.R. No. 206147, 2016) · tax law. (Afisco v. CA, G.R. No. 112675, 1999)
CIVIL LAW
RIGHTS ANO OBLIGATIONS OF PARTNERS
AMONG THEMSELVES
A. Who May Be Partners
General rule:; Any person capacltated to
contr!ct mfly enter Into a contract of partner!hlp,
Exceptions:
i. Persons who are prohibited from giving
each other any donation or advantage
cannot enter into a universal partnership.
(Art. 1782)
ii. Persons suffering from civil interdiction
iii. Persons who cannot give consent to a
contract: (Art. 1327)
• Minors
• Insane persons
• Deaf-mutes who do not know how to
write :
1. Juridical Persons as Partners
There is no express prohibition for partnerships
to be partners, but this is doubtful and
impractical on account of Art. 1768-that a
partnership has a !Juridical personality separate
from that of each ; of the partners-and of the
essential attribute of delectus personae.
Corporations may enter into partnership
agreements on the following conditions:
1. Authority to enter into a partnership relation •
' is expressly conferred by the charter or the
Articles of Incorporation (AOI), and the
nature of the business venture to be
undertaken by the partnership is in line with
the business authorized by the charter or
AOI.
2. If it is a foreign corporation, it must obtain a
license to transact business in the country in
accordance with the (Villanueva,
Corporation Code of the Philippines
Philippine Corporate Law, 902, 2001, citing
various SEC Opinions)
•
2. Tax Treatment on Partnership
The notion of partnership, no matter how created.
or organized, is a pool of insurance companies
and is considered a partnership under applicable
Without prejudice to the formation of a joint
venture. (J.M. Tuazon v. Bolanos, G.R. No. L-
4935, 1954; Aurbach v. Sanitary Wares
Manufacturing. G.R. No. 75875, 1989)
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B. Kinds of Partners
1. Capitalist-contributes money or property
2. Industrial-contributes only industry or
personal service
3. General-liability to 3rd persons extends to
separate property
4. Limited-liability to 3rd persons limited to
capital contribution
5. Managing-manages the affairs/business of
,.,... the partnership
'<; i 6. Liquidating-takes charge of the winding up
of partnership affairs upon dissolution
7. Partners by estoppel-not really a partner
but liable as a partner for the protection of
innocent 3rd persons
8. Continuing partner-continues the business
of a partnership after dissolution by reason
of the admission of a new partner,
retirement, death or expulsion of one of the
partners
9. Surviving partner-after a partnership has
('''
been dissolved by death of any partner
10. Subpartner-not a member of the
,, ..,
1 partnership who contracts with a partner
with reference to the latter's share in the
partnership
11. Ostensible-takes active part and known to
the public as partner in the business
12. Secret-takes active part in the business but
is not known to be a partner by outside
parties
13. Silent-does not take any active part in the
business although he may be known to be a
partner
14. Dormant-does not take active part In the
business and is not known or held out as a
partner
C. Promised Contribution
1
i Every partner is bound to work to the extent of
1. What May Be Contributed
Contribution must be in equal shares unless
otherwise stipulated. (Art. 1790)
(a) Money
Failure to contribute promised money makes the
promissory-partner liable for the amount
promised including the interest due and
damages arising from the time the former-should
have complied with his or her undertaking. (Art.
., ) 1786, Par. 1)
If there Is fraud or misrepresentation, action for
)
rescission may be filed and the party entitled to
•
CIVIL LAW
rescind, without prejudice to any other right, has
the right to:
1. Lien on, or right of retention over, the
surplus of partnership property after
satisfying partnership liabilities to third
persons {for any sum paid by the injured
partner for the purchase of an interest in the
partnership and for any capital or advances
contributed by the latter)
2. Stand in place of creditors of the partnership
for any payments made by the injured
partner in respect of partnership liabilities,
after all liabilities to third persons have been
satisfied ·
3. Indemnity by the guilty partner against all
partnership debts and liabilities (Art. 1838);
relate to Art. 1831: with or without fraud or
misrepresentation, injured partner may seek
judicial dissolution
(b) Property
May include intangible or incorporeal (e.g. credit).
(Lim Tong Lim v. Phil. Fishing Gear, G.R. No.
136448, 1999)
Liable for fruits from the time property should
have been delivered without need of demand;
also include obligation to preserve the promised
property with the diligence of a good father of a
family pending delivery,. (Art. 1786 {1) and {2])
(c) Industry
May concur with any or both of the first two or in
the absence of any one or both of them; manual
and/or lntellectu111I In consideration of share In
the profits: hence, as generally, partners are not
entitled to charge each other. (Marsh's Appeal,
69 Pa. St. 30) ·
his ability for the benefit of the whole, without
regard to the services of his co-partners, and
without comparison of value; for services to the
firm cannot, from their very nature, be estimated
and equalized by compensation of differences.
(Beatty v. Wray, 7 Harris 519)
But: A partner who has agreed to render special
service to the partnership, for the performance of
which he is qualified; and which is one of the •
inducements for the: other members to enter the
partnership, was found liable civilly to account
for the value of such service upon a finding that
he wrongfully refuse&.to perform such service.
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But then again: Specific performance not
available due to constitutional prohibition against
involuntary servitude.
A limited partner is not allowed to contribute
services, only "cash or other property" (Art.
1845); otherwise, he is considered an "industrial
and 'general partner" and thus, not exempted
from personal liability.
2 .. When Immovables or Real Rights
Contributed
General Rule: Failure to comply with the
requirement of appearance in public instrument
and SEC Registration will not affect the liability
of the partnership and the members thereof to
third persons. (Art. 1772, [2))
Exception: When immovable property or real
rights are contributed.
Public instrument plus Inventory made and
signed by the parties and attached to the public
instrument is required for the benefit Of third
persons. (Arts.1771 and 1773)
... EfFEC'T OF ABSENCE OF REQU!REMENTS
·... · . 'UNDER ARTICLES 1771 AND 1773 . ' .
No public Instrument, No
Void
Inventory
-..
With Public Instrument, No
Inventory
Void
No Public Instrument, With
Void
lnventorv
With Public Instrument, With
Valid
Inventory
Note: Partnerships void under Art.1773, in
relation to Art. 1771 may still be considered
either de facto· or estoppel partnerships vis-a-vis
third persons; may even be treated as an
ordinary contract from which rights and
obligations may validly arise, although not
exactly a partnership under the Civil Code.
(Torresv. CA, G.R. No. 134559, 1999)
Failure to prepare an inventory of 'the
· immovable property contributed, in spite of Art.
1773 declaring the partnership void would not
render the partnership void when:
1. No third party involved (since Art. 1773 was
intended for the protection of 3rd parties;
2. Partners have made a claim on the
partnership agreement.
CIVIL LAW
'.•
3. Consequence of Failure to Contribute
Each partner has tli'e obligation:
1. To contribute l at the beginning of the
partnership or at the stipulated time the
money, property or industry which he may
have promised to contribute. (Art. 1786)
2. To answer for eviction in case the
partnership is deprived of the determinate
property contributed (Art. 1786)
3. To answer to the partnership for the fruits of
the property the contribution of which he
delayed, from the date they should have
been contributed up to the time of actual
delivery (Art. 1786j
4. To preserve said property with the diligence
of a good father of a family pending delivery
to partnership (Art. 1163)
5. To indemnify partnership for any damage
caused to it by the retention of the same or
by the delay in its contribution (Arts. 1788,
1170)
In the event that there Is a failure to contribute
property promised:
• Partners become. ipso jure a debtor of the
partnership even In the absence of any
demand (Art. 1169{1])
• Remedy of the other partner is not
rescission but specific performance with
damages from defaulting partner (Art. 1788)
In the event that there is a failure to contribute
•
money promised:
• To contribute on the date fixed the amount
he has undertaken to contribute to the
partnership
• To reimburse any amount he may have
taken from the partnership coffers and
converted to his own use
• To pay for the ~greed or legal interest, if he
fails to pay his. contribution on time or in
case he takes a~y amount from the common
fund and converts it to his own use
• To indemnify .the partnership for the
•
damages caused to it by delay in the
contribution or conversion of any sum for his.
personal benefit (Art. 1788) ·
A partner who promises to contribute to
partnership becomes a promissory debtor of the
partnership, including liability for Interests and
damages caused for failure to pay, and which
amounts may be deducted upon dissolution of
the partnership from his share in the profits and
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')
net c1ssets. (Rojas v. Maglana, G.R. No. 30616, 1. Prohibition to En;1;1 In Competitive
December 10, 1990) Business
INDUSTRIAL CAPITALIST
4. Obligations with respect to Contribution to . . · PARTNER . . PARTNER
)
Partnership Capital Cannot engage in Cannot engage in
Partners must contribute equal shares to the business (win same business (with same
capital of the· partnership unless there is line of business with kind of business with
stipulation to contrary. (Art. 1790) the partnership) unless the partnership) for his
) partnership expressly own account, unless
Capitalist partners must contribute additional permits him to do so. there is a stipulation to
capital in case of imminent loss to the business (Art. 1789) the contrary. (AH.
of the partnership and there is no stipulation 1808
) otherwise; refusal to do so shall create an If an industrial partner engages In any
obligation on his part to sell his interest to the business
other partners. (Art. 1790) a. He can be excluded from the partnership;
or
Requisites: b. The capitalist partners can avail of the
1. There is an imminent loss of the business of benefit he obtained from the business; or
the partnership c. The capitalist partners have the right to fife
2. The majority of the capitalist partners are of an action for damages against the industrial
the opinion that an additional contribution to partner, in ,either case. (Art. 1789)
i the common fund would save the business
3. The capitalist partner refuses deliberately to If the capitalist partner engages in a
contribute (not due to financial inability) business (which competes with the business of· '
4. There is no agreement to the contrary the partnership) \'.
a. He may be redulred to bring to the common
D. Fiduciary Duty fund the profit's he derived from the other
A partnership is a fiduciary relation-one business; or :'
entered into and to be maintained on the basis b. He shall personally bear the losses; or
of trust and confidence. With that, a partner must c. He may be ousted form the partnership,
observe the utmost good faith, fairness, and especially if there was a warning. (Art. 1808)
integrity in his dealings with the others:
I. He cannot directly or indirectly use As a rule, an Industrial partner may not engage
partnership assets for his own benefit; in any business during the existence of the
ii. He cannot carry on a business of the partnership, unless the capitalist partners
)
partnership for his private advantage; expressly permit him to do so (Art. 1789). The
iii. He cannot, In conducting the business of reason is that his industry must be given only to
the partnership, take any profit the partnership. This is true even if the business
clandestinely; is not competitive. (Albano Civil Law Reviewer, p.
iv. He cannot obtain for himself that he should 822, 2008 ed.)
have obtained for the partnership (e.g.
business opportunity) When a partner engages in a separate business
v. He cannot carry on another business in enterprise that is competitive with that of the
competition with the partnership; and partnership, the other partner's withdrawal
vi. He cannot avail himself of knowledge or becomes thereby justified and for which the
information, which may be properly latter cannot be held for damages. (Rojas v.
regarded as the property of the partnership. Maglana, G.R. No 30616, 1990)

2. Managing Partner who Collects Debt from •

·' Third Party
Obligation of managing partners who collects
debt from person who also owed the partnership
_;,
1 (Art. 1792):
a. Apply sum collected to 2 credits in
proportion to their amounts.
j

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b. If he received it for the account of E. Rules for Distribution of Profits and.

partnership, the whole sum shall be applied Losses (Art. 1797)
to partnership credit.
PROFITS LOSSES
Requisites: With According to According to
1·. There exist at least two debts, one where aareement aoreement aoreernent
the collecting partner is creditor and the Without Share of If sharing of
other, where the partnership is the creditor. agreement capitalist profits is
2. Both debts are demandable. partner is in stipulated •
3. The partner who collects is authorized to proportion to apply to
manage and actually manages the his capital sharing of
partnership contribution losses
4. Partner who Receives Share of Share of If no profit
Partnership Credit industrial sharing
Obligation of partner who receives share of partner is not stipulated •
partnership credit: fixed - as may losses shall
Obliged to bring to the partnership capital what be Just and be borne
he has received even though he may have given equitable according to
receipt for his share only (Ar't. 1793) under the capital
circumstances contribution
Requisites: Purely
1. A partner has received in whole or in part, industrial
his share of the partnership credit partner not
2. The other partners have not collected their liable for
shares losses
3. The partnership debtor has become
insolvent
NOTE: A stipulation which excludes one or
· · BEARING THE RISK OF LOSS OF THINGS more partners fromany share in the profits and
.' CONTRIBUTED (Ar.t. 1795) losses is void. (Art.1799)
,:
Specific and determinate Risk is borne by
things which are not partner NOTE: Stipulation exempting a partner from
fungible where only the losses should be allowed. If a person can make
a gift to another, there is no sound reason why a
use is contributed
person cannot also agree to bear all the losses.
Specific and determinate Risk is borne by
Of course, as far as third persons are concerned,
things the ownership of partnership
any such stipulation may be properly declared
which is transferred to
the eartnershir, void (De Leon, pp. 124-125, citing Espiritu and
Sibal).
Fungible things Risk is borne by
(consumable) partnership
Things contributed to be
sold
Risk is borne ~Y
partnershie
M .
F. Rights and Obligations ,with Respect to
t
Things brought and Risk is borne by
. POWERS OF THE PARTNERIS APPOINTED •
· . · AS MANAGER ·
appraised in the partnership
Partner is Power of Vote of
invento!}'. -- appointed managing partners
Specific and determinate Risk is borne by
manager in .partner is representing
things which are not partner
the Articles of .irrevocable controlling
fungible where only the
partnership without interest
use is contributed
~- (Art. 1800) just/lawful necessary to
cause; revoke power
Revocable (Art. 1800)
only when in
bad faith (Art.
1800)
•
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I
Partner is Power is a. If he Is wrongfully excluded from
appointed revocable any partnership business or possession of
manager after time for any its property by his copartners
r,·"' ..
t;_ J
constitution of cause (Art. b. If right exists under the terms of any
partnership 1800) agreement
(Art. 1800) c. As provided by Art. 1807, whenever
2 or more Each may Jn case of other circumstances render it just and
persons execute all opposition. reasonable
~. . entrusted with acts of admin- decision of iii. Duty to render on demand true and full
management istration (Art. majority shall Information affecting partnership to any
of partnership 1801) prevail; In partner or legal representative of any
without case of tie, deceased partner or of any partner under
specification decision of legal disability (Civil Code, Art. 1806)
of duties/ partners iv. Duty to account to the partnership as
1,'f"·,
stipulation that owning fiduciary (Art. 1807)
each shall not controlling
act w/o the interest shall H. Property Rights of a Partner
!., .1 other's prevail (Art. i. His rights in specific partnership
consent (Art. 1801). property
1801) ii. His interest in the partnership
Stipulated that Concurrence Absence or Iii. His right to participate in the
none of the of all disability of management (Art. 1810)
managing necessary for any one
partners shall the validity of cannot be As to specific partnership property
act w/o the acts (Art. alleged unless A partner has an equal right to possession which
consent of 1802) there is is not asslqnable and such right Is llmit~d to the·
others (Art. imminent share of what .remains after partnership debts
1802) danger of have been paid
grave or

r.
irreparable I. Assignment of Interest in a Partnership
injury to
··-,.. ·'
"".
partnership 1. Conditions to be met:.
' I
(Art. 1802) 1. Made in good faith •
·~., I
Manner of All partners If refusal of 2. For fair consideration
management are agents of partner is • 3. After a fair and complete disclosure of aU
not agreed the manifestly important information as to its value
upon (Art. partnership prejudicial to
1803) Unanimous interest of 2. Rights of an Assignee
consent partnership, i. Get whatever assignor-partner would have
required for court's obtained '•
alteration of intervention ii. Avail usual remedies in case of fraud in the
immovable may be management
property (Art. sought (Art. iii. Ask for annulment of contract of assignment
1803(1)) 1803(2)) if he was induced to join through any of the
vices of consent
G. Other Rights and Obligations of Partners iv. Demand an accounting (only in case of
i. Right to associate another person with him dissolution)
in his share without consent of other
partners (sub-partnership) (Art. 1804) J. Responslblllty of Partnership to Partners
ii. Right to inspect and copy partnership books i. To refund the amounts disbursed by partner
at any reasonable hour (Art. 1805) in behalf of the partnership plus
iii. Right to a formal account as to partnership corresponding interest from the time the
affairs (even dLJring existence of expenses are made (loans and advances
partnership): (Art. 1809) made by a partner to the partnership aside
from capital contribution)

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ii. To answer for obligations partner may have •

contracted in good faith in the Interest of the '
partnership business
iii. To answer for risks in consequence of its Acts for carrying on in Every partner is an
management the usual way the agent and may
business of the . execute acts with
partnership binding effect even if
OBLIGATIONS OF he has no authority
PARTNERSHIPS/PARTNERS TO THIRD Except: when 3'd
PERSONS person has knowledge
of lack of authority
Every partnership shall operate under a firm Art. 1818
name. Persons who include their names In the Act w/c is not Does not bind
partnership name even if they are not members apparer.tly for the partnership unless •
shall be liable as a partner. (Art. 1815) carrying of business in authorized by other
the usual way partners .
All partners shall be liable for contractual Acts of strict dominion
obligations of the partnership with their property, or ownership:
after all partnership assets have been exhausted: a. Assign
i. Pro rata partnership
ii. Subsidiary (Art. 1816) property in trust for
creditors
Admission or representation made by any b. Dispose of good~
partner concerning partnership affairs within will of business
scope of his authority is evidence against the c. Do an act w/c ·.
partnership. (Art. 1820) would make it ,.
impossible to dirry
General rule: Notice to partner of any matter on ordinary ,·
relating to partnership affairs operate as notice business of
to partnership. partnership
d. Confess a
Exception: Except in case of fraud. judgment
• Knowledge, of partner acting in the e. Enter into
particular matter, acquired while a partner compromise
• Knowledge of the partner acting in the concerning a
particular matter then present to his mind partnership claim
• Knowledge of any other partner who or liability
reasonably could and should have f. Submit
communicated It to the acting partner partnership claim
(Art.1821) or liability to
arbitration
0
Partners and the partnership are solidarily liable g. Renounce claim
to third persons for the partner's tort or breach of of partnership (Art.
trust. (Art. 1824) 1818
Acts in _c ....
on-t-ra_v_e_n-.ti-on--+-""p_a_rt-ne_r_s.,..h-ip_n_o_t..,..lia-b-.l-e--1
Liability of incoming partner is limited to: of a restriction 01;1 to 3rd persons having
1. His share in the partnership property for authority actual or presumptive
existing obligations knowledge of the
2. His separate property for subsequent restrictions
obligations (Art. 1826) (Art. 1818)

Creditors of partnership preferred in

partnership property & may attach partner's
share in partnership assets. (Art. 1827)

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\. I

,-,
\ .. l p rt .
B. Conveyance of Real Property Belonging to
hl
. EFFECTS OF CONVEYANCE OF REAL
C. DISSOLUTION AND WINDING UP
Dissolution ls: the change in the relation of the
'PROPERTY BELONGING TO PARTNERSHIP partners caused by any partner ceasing to be
(Art.1819) associated in the carrying on of the business;
Title in partnership Conveyance passes partnership is not terminated but continues until
name, Conveyance in title but partnership the winding up of partnership affairs is
partnership name can recover if: completed. (Art. 1828)
Conveyance was not f'.
in the usual way of Winding up Is the process of settling the
business, or business or partnership affairs after dissolution,
Buyer had knowledge which includes the:,paying of previous obligations,
,....... of lack of authoritv collecting of assets previously demandable.
Title in partnership Conveyance does not (/dos v. Court of Appeals, G.R. No. 110782,
name, Conveyance in pass title but only 1998)
partner's name equitable interest,
unless: Termination is that point when all partnership
1. Conveyance was affairs are completely wound up and finally •
not in the usual way settled. It signifies the end of the partnership life.
of business, or (/dos v. Court of Appeals, G.R. No. 110782,
,· '
2. Buyer had 1998)
knowledge of lack
of authoritv A. Causes of Dissolution (Art. 1830)
Title in name of 1 or Conveyance passes
-- i. Without violation of the agreement between
more partners, title but partnership the partners ·
Conveyance in name if can recover if: a. By termination of the definite term/
partner/partners in Conveyance was not particular undertaking specified in the
., ... t whose name title in the usual way of agreement
'· . stands business, or b. By the express will Of any partner, who
Buyer had knowledge must act in good faith, when no definite
1 · ·.
,... ) of lack of authoritv term : or particular undertaking is •
Title In name of Conveyance will only specified
1/more/all partners or pass equitable interest c. By the express will of all the partners
3rd person in trust for who have not assigned their interest/
partnership, charged them for their separate debts,
Conveyance executed either before or after the termination of
in partnership name if any specified term or particular
in name of partners undertaking
(~ .... l Title in name of all Conveyance will pass d. By the bona fide expulsion of any
'·' ,I~ partners, Conveyance title partner from the · business in
/ .•. in name of all oartners accordance with power conferred by
'• the agreement
,. ----- end of topic ------ Ii. In contravention of the agreement between ·
·, the partners, where the circumstances do
not permit a dissolution under any other
,. .
provision of this Article, by the express will
i:
of any partner at any time
iii. By any event which makes it unlawful for
business to be carried on/for the members
to carry it on for. the partnership
iv. Loss of speciflc thing promised by partner
before its delivery
v. Death of any partner
vi. Insolvency of a partner/partnership
vii. Civil lnterdlction'of any partner

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viii. Decree of court under Art. 1831 B. Effects of Dissolution •
;.,
If a partnership has no fixed term, then It is a 1. Authority of Pai;_tner to Bind Partriership
partnership at will and can be dissolved by the -General rule: Authority of partners to bind
will of any partner. However, such partner must partnership is terminated. (Art. 1832)
be in good faith, otherwise, he will be liable for
damages. Among partners, mutual agency Exceptions:
arises and the doctrine of delectus personae 1. To wind up partnership affairs
allows them to have the power, but not 2. Complete transactions not finished (Art. 1834)
necessarily the right, to dissolve the partnership
(Ortega v. Court of Appeals, G.R. 109248, July 3, 2. Qualifications
1995). (a) With respect to Partners
Authority of partners to bind partnership by new
Grounds for dissolution by decree of court contract is immediately terminated when •
(Art. 1831): dissolution is not due to act, death or
i. Partner declared insane in any judicial insolvency of a partner {Art. 1833); ·
proceeding or shown to be of unsound mind
ii. Incapacity of partner to perform his part of If due to ADJ, partners are liable as if partnership
the partnership contract not dlssolved, when the ff. concur:
iii. Partner guilty of conduct prejudicial to a. If cause. is act of partner, aotlng partner
business of partnership must have knowledge of such
iv. Willful or persistent breach of partnership dissolution: and
agreement or conduct which makes it b. If cause is death or insolvency, acting
reasonably impracticable to carry on partner must have knowledge/ notice.
partnership with him
v. Business can only be carried on at a loss (b) With respect to Persons not Partners (Art.
vi. Other circumstances which render 1834)
dissolution equitable
vii. Upon application by purchaser of partner's Partner continues to bind partnership even
interest: after dissolution In following cases:
a. After termination of specified i. Transactions in connection to winding up
term/particular undertaking partnership affairs/completing transactions
b. Anytime if partnership at will when unfinished
interest was assigned/charging order ii. Transactions which would bind partnership
issued if not dissolved, when the other
party/oblige.e:
If a partnership has no fixed term, then it is a
partnership at will and can be dissolved by the Situation 1
will of any partner. However, such partner must 1. Had extended credit to partnership prior
be in good faith, otherwise, he will be liable for to dissolution; and
damages. Among partners, mutual agency 2. Had no knowledge/notice
,., of dissolution
arises and the doctrine of delectus personae f::
allows thern to have the power, but not Situation 2 .
necessarily the right, to dissolve the partnership 1. Did not ext~hd credit to partnership;
{Ortega v. Court of Appeals, G.R. 109248, July 3, 2. Had known partnership prior to
1995). dissolution; and
3. Had no knowledge/notice of
dissolution/fact of dissolution not
advertised in a newspaper of general
circulation in the place where
partnership is regularly carried on

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3. Post Dissolution (Art. 1834) c. Indemnity for damages caused by partner
Partner cannot bind the partnership anymore guilty of wrongful dissolution
after dissolution: d. Continue business in same name during
i. Where dissolution is due to unlawfulness to agreed term
carry on with business (except: winding up e. Possess partnership property if business is
of partnership affairs) continued
ii. Where partner has become insolvent
iii. Where partner unauthorized to wind up (b) Partner who wrongly caused dissolution
partnership affairs, except by transaction 1. If business'not continued by others
with one who: Apply partnership property to discharge
liabilities of partnership & receive in cash his
Situation 1 share of surplus less damages caused by his
1. Had extended credit to partnership prior wrongful dissolution
to dissolution, and 2. If business continued by others
'i"'
2. Had no knowledge/notice of dissolution, Have the value of his interest at time of
or dissolution ascertained and paid in
cash/secured by bond & be released from all
Situation 2 existing/future partnership llabilities •
1. Did not extend credit to partnership prior ~
to dissolution 3. Rights of Injured Partner where
2. Had known partnership prior to Partnership Contract Is Rescinded on
dissolution Ground of Fraud/Misrepresentation by One
3. Had no knowledge/notice of Party
dissolution/fact of dissolution not a. Right to lien on surplus of partnership
advertised in a newspaper of general property after satisfying partnership liabilities
,.-·· circulation in the place where b. Right to subrqgatlon In place of creditors ·
partnership is regularly carried on after payment of partnership llabllltles
c. Right of indemnification by guilty partner
C. Rights of Partners upon Dissolution against all partnership debts & liabilities
i- \
General rule: Dissolution does not discharge 4. Settlement of Accounts between Partners •
. . . .!
existing liability of partner Assets of the partnership
1. Partnership property (including goodwill)
Exceptions: Except by agreement. 2. Contributions of the partners (Art. 1839 {1])
····, i. Between the partner and himself
; ii. Between the person/partnership continuing
,;..,
Order of Application of Assets
the business 1. Partnership creditors
iii. Between partnership creditors (Ari. 1835) 2. Partners as creditors
3. Partners as investors-return of capital
1. Rights of Partner where Dissolution not in contribution •
Contravention of Agreement 4. Partners as investors-share of profits if any.
a. Apply partnership property to discharge (Art. 1839 [2])
liabilities of partnership
b. Apply surplus, if any to pay in cash the net D. When Business of Dissolved Partnership
amount owed to partners (Art. 1837) is Continued

2. Rights of Partner where Dissolution in Effects:

Contravention of Agreement (Art. 1837) 1. Creditors of old partnership are also
creditors of the new partnership, which
(a) Partner who did not cause dissolution continues the business of the old one w/o
wrongfully liquidation of the partnership affairs
a. Apply partnership property to discharge (Art.1840)
liabilities of partnership
b. Apply surplus, if any to pay in cash the net 2. Creditors have an equitable lien on the
amount owed to partners consideration paid to the retiring /deceased

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partner by the purchaser when F. LIMITED PARTNERSHIP
retiring/deceased partner sold his interest
wlo final settlement with creditors (Art. A. Characteristics of Limited Partnership
1840). The retired or deceased partner or i. Formed by compliance with statutory
his .legal representatives may requirements (Art. 1843)
a. Have the value of his interest ii. One or more general partners control the
ascertained as of the date of business (Art. 1843)
dissolution iii. One or more general partners and one or
b. May receive as ordinary creditor the more limited partners. (Art. 1843) Limited
value of his share in the dissolved partners contribute cash or other property,
partnership with interest or profits but not services (Art. 1845) and share in the
attributable to use of his right, at his profits but do not participate in the
option (Art. 1841) •
management of the business (Art. 1848)
and are not personally liable for partnership
E. Persons Authorized to Wind Up obligations \ j beyond their capital
i. Partners designated by the agreement contributions ;·
ii. In absence of agreement, all partners who iv. May ask for -the return of their capital
have not wrongfully dissolved the contributions cinder conditions prescribed
partnership by law (Ari. 1857)
iii. Legal representative of last surviving v. Partnership debts are paid out of common
partner (Art. 1836) fund and the individual properties of general
partners
Unless otherwise agreed, the partners who have
not wrongfully dissolved the partnership· or the
legal representative of the last surviving partner,
not insolvent, has the right to wind up the
partnership affairs, provided, however, that any
Personally liable for Liability extends only
partner, his legal representative or his assignee, partnership obligations to his capital
upon cause shown, may obtain winding up by
(Art. 1816) contributions ( Art.
the court {Prime/ink Properlies and Development
1843)
Corp. v. Lazatin-Magat, G.R. No. 167379, 2006).
When manner of No participation in
management not management (Art.
A partner's share cannot be returned without first
agreed upon, all 1848)
dissolving and liquidating the business for the
general partners have
partnership's outside creditors have preference
an equal right in the
over the enterprise's assets. The firm's property
management of the
cannot be diminished to their prejudice.
business 'Art. 1803
(Magdusa v. Albaran, G.R. No. L-17526, 1962)
Contribute cash.. Contribute cash or
property or industry property only, not
Due to its separate juridical personality from the
A.rt. 1767 indust A.rt. 1845
individual partners, it is thus the partnership -
Proper party to Not proper party to
having been the recipient of the capital
proceedings by/ · proceedings by/
contributions - which must refund the equity of
against partnership against partnership
retiring partners. Such duty does not pertain to
'Art. 1866 Art. 1866
partners who managed the business. The
amount to be refunded, supra, consistent with Interest not assignable Interest is freely
the· partnership being a separate and distinct w/o consent of other assignable (Art. 1859)
entity, must necessarily be limited to what to the artners Art. 1804
firm's total resources. It can only pay out what it Name may appear in Name must appear in
has for its total assets. But this is subject to the firm name Art. 1815 firm name Art. 1846
priority enjoyed by outside creditors. "After all Prohibition against No prohibition against
the (said) creditors have been paid, whatever is engaging in business engaging in business
left of the partnership assets becomes available Art. 1789, Art. t 808
for the payment of partners' shares. (Villareal v. Retirement, death, Does not have same
Ramirez, G.~. No. 144214, 2003) insolvenc • insanit .of effect; rights

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general partner transferred to le~gl E. Spectflc Right~ of Limited Partners
dissolves partnership representative (Art. i. Right to have partnership books kept at
(Art. 1830) 1861) principal place of business
II. Right to lnsp~ct/eopy books at reasonable
C. Requirements for Formatlo11 of Limited hour
Partnership iii. Right to have on demand true and full info
of all things affecting partnership
,. ...... Certificate of articles of the limited iv. Right to have formal account of partnership
·.:' ·:
•,. partnership must state· the. following matters: affairs whenever circumstances render it
1. Name of partnership plus the word "ltd." just and reasonable
2. Character of business v. Right to ask for dissolution and winding up
3. location of principal place of business by decree of court
4. Name/place of residence of members vi. Right to receive share of profits/other
5. Term for partnership is to exist compensation by way of income
.r, 6. Amount of cash/value of property vii. Right to receive return of contributions
t, :
contributed provided the partnership assets are in
7. Additional contributions excess of all its liabilities
8. Time agreed upon to return contribution of (Art. 1851) •
r'. limited partner
''· l 9. Sharing of profits/other compensation F. Requisites for Return of Contribution of
'~-'
(Art. 1844) Limited Partner
1. All liabilities of partnership have been paid/if
Certificate must be filed with the SEC. not yet paid, at least sufficient to cover
i. To validly form a limited partnership, all that them
is required is substantial compliance in 2. Consent of all members has been obtained
.
,.. .
. good faith with all the requirements under
Art. 1844 enumerated above.
3. Certificate is cancelled/amended as to set
forth withdrawal /reduction of contribution
ii. If no substantial compliance, then the firm (Art. 1857)
i..,i becomes a general partnership as far as
third persons are concerned (but as G. Liabilities of A limited Partner
amongst the partners, still limited) (Jo •
,... .. Chung Gang v. Pacific Commercial Co., 45 1. To the Partnership
Phil 142)
\ .... · a. For the difference between his contribunoa
as actually· made and that stated in the
D. Consent/Ratification of All limited certificate as having been made, and
Partners Needed to b. For any unpaid contribution which he agreed
i. Do any act in contravention of the in the certificate to make in the future time
certificate (Art. 1858) '
ii. Do any act which would make it
.:.:..•I Impossible to carry on the ordinary 2. As a Trustee for. the Partnership
,,..... business of the partnership a. For the speclflc property stated in the
' ,.
........,•: Iii. Confess judgment against partnership certificate as contributed by him but which
iv. Possess partnership property/assign he had not contributed;
,·· ·,.
rights in specific partnership property b. For the specific property of the partnership
other than for partnership purposes which had beeri_ wrongfully returned to him;
v. Admit person as general partner and '
vi. Admit person as limited partner - unless c. Money or other property wrongfully paid or
authorized in certificate conveyed to him on account of his
vii. Continue business with' partnership contribution. (Art. 1858)
property on death, retirement, civil
interdiction, insanity or insolvency of gen
partner unless authorized in certificate
(Art.1850)

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H. Dissolution of Limited Partnership
1. Priority in Distribution of Assets
a. Those due to creditors, including. limited
partners
b. Those due to limited partners in respect of ,
their share in profits/compensation
c. Those due to limited partners of return of
capital contributed
d. Those due to general partner other than
capital and profits
e. Those due to general partner in respect to
profits
f. Those due to general partner for return of
capital contributed (Art. 1863)
I. Amendment of Certificate of Partnership
Instances when Certificate of Partnership
may be amended , Exceptions: Except that he cannot:
1. In case any of the ten enumerated changes
and circumstances in Art. 1864, par. 2 are
present.
2. It must be signed and sworn to by all the
members Including the new members if
some are added; In case of substitution, the
assigning limited partner must also sign.
3. The cancellation or amendment must be
recorded in the SEC.(Art.1864)
Any person who suffers loss by reliance on false
statement in certificate may hold liable for
damages any party to the certificate who knew
the statement to be false at the time the latter
signed the certificate or came to know such
falsity subsequently but within sufficient time
before reliance to enable such party to cancel or
amend the certificate or file the proper petition
for such purpose (under Art. 1865). (Art 1847;
Walraven v. Ramsay, 55 N.W.d 853, 1952)
A general partner's DIIC (Qeath, [nsolvency,
!nsanity, or _£ivil interdiction) dissolves the
partnership unless the business is continued by
the surviving general partners under a right
stated in the certificate or with their common (i.e.
all) consent (Civil Code, Art. 1860). Still, even if
allowed under the certificate or consented to by
all, there must be an amendment further to Arts.
1864 and 1865. Otherwise, limited partners will
not be able to avail of the protection of the law
as regards liability. The partnership will be
considered general. (Lowe v. Arizona Power &
Light Co., 427 P. d.• 366, 1967)
\)
D
CIVIL LAW
A limited partner shall not become liable as a
general partner, unless in addition · to the
exercise of his rights and powers as a limited
one, he takes part in the control (and
management) of the business (Art. 1848;
Holzman v. Escamilla, 195 P. d. 833, 1948)
•
A person may be general and llmlted at the
same time provided it is stated in the certificate.
He shall have all the powers, rights, and
restrictions of a general partner; but with respect
to. his capital contribution, his right against the
other members of the firm would be that of a
limited partner (Art. 1853).
General rule: A limited partner may also loan
money to and transact other business with the
firm. · •
•
• 1. Receive or hold as collateral any partnership
property; or
2. Receive from a general partner or from the
firm any payment, conveyance, release if at
that time assets of the firm are not sufficient
to discharge liabilities to outside creditors.
Any violation would be fraud on such creditors
(Arl. 1854).
Note: The remedy of a general partner who·
suffers from or faces interference from his
partners is dissotutlon. (Weil v. Diversified
Propetties, 319 i=. Supp., 1970)
Liability of a Limited Partner Whose Surname
Appears in the Partnership Name
General Rule: A limited partner whose surname
appears in the partnership name Is liable as a
general partner to t~e partnership creditors who
extended credit without actual knowledge that he
is not a general partner.
Exceptions:
i. If the surname is also the surname of a
general partner; or
ii. If prior to the time the partner became a
limited partner, the business has been
carried under such name.
------·· end of topic ----··--
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,·e . ·w ~ an ~· I 11 I Bl - -z-,, -·,sv:rft111w- 2 ·- zr r :s: ·natr · · ··- -··csc:75 · sr

IX.AGENCY A. NATURE, FORM, AND KINDS

TOPIC OUTLINE UNDER THE SYLLABUS DEFINITION OF AGENCY

VIII.AGENCY
A. Nature, Form, and Kinds By the Contract of Agency a person binds
himself to render some service or to do
B. Obligationsof the Agent something in representation or on behalf of
another, with the consent or authority of the
C. Obligationsof the Principal latter. (Art. 1868)

_) 0. Modesof Extingulshment Characteristics:

i. Consensual: perfected by mere consent;
{Alt. 1869,:Arl. 1870)
Ii. Nominate: It has its own name; (Doles v.
Angeles, G.R. No. 149353, 2006)
iii. Preparatory: enter;..ed Into as means to enter
into other contracts
iv. Principal: does not depend on another
contract for its existence and validity;
(Doles v. Angeles, G.R. Nb. 149353, 2006)
v. Unilateral/Bilateral:
a. Unilateral:· if contract is gratuitous or it
creates obligations for only one party •
(i.e. the ~gent) (Urban Bank, lnc. v. ..
Peiia,. G~R. No. 145817, 145822,
t 62562, 2011)
b. Bilateral: if contract is for
compensation or gives rise to
reciprocal rights and obligations
(Urban Bank, Inc. v. Peiia, G.R. No.
145817, 145822, 162562, 2011)
,,
[
NOTE: Agency is presumed to be for
compensation, unless there is proof to the
') contrary. (Ari. 1875)
·'
•
Basis: Representation
The acts of the agent on behalf of the principal
within the scope of his authority produce the
same legal and binding effects as if they were
personally done by the principal.

..., Hence, the distinguishing features of agency are

i its representative character & its derivative
authority. (Rallos v. Felix Go Chan & Sons
Realty Corp., Gr. No. L-24332, 1978)

Purpose
Extend the personality of the principal through
the facility of the agent (Litonjua, Jr. v. Eternit
Corp., G.R. No. 144805, 2006)

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Parties to the Contract of Agency
1. Principal
i. He may be a natural or a [urldicel person
ii. He must be capacitated.
2. General rule: If a person is
capacitated to act for himself or his own
right, he can act through an agent.
iii. The agent is not liable where he was
ignorant of the principal's incapacity
2. Agent
i. Insofar as third persons are concerned,
it is enough that the principal is
capacitated.
ii. Insofar as his obligations to his principal
are concerned, the agent must be able
to bind himself.
iii. As an agent, some mental capacity is
necessary, therefore, those who are
absolutely incapacitated (ex. Insane
persons) cannot be agents.
Essential Elements (CROW)
1. .£onsent of the parties to establish the
relationship;
2. Qbject or subject matter of the contract Is
the execution of a juridical act in relation to
third persons;
3. Agent acts as a Bepresentative and not for
himself; and
4. Agent acts Within the scope of his authority.
(Rallos v. Felix Go Chan & Sons Realty
Corp., Gr. No. L-24332, 1978)
Nature
Since it is a contract, there must be a meetlng of
the minds as to consent, object, and cause. (Art.
1868)
Exception to Contractual Nature
When the agency is created by operation of law
(See Part VIII on ':Agency by Operation of Law")
NOTE: An illegal termination ,of agency does not
justify reinstatement of the agent as such. The
agency cannot be compelled by the courts to be
reinstated because such relationship can only be
given effect with the consent of the principal.
(Orient Air Services v. CA. G.R. No. 76931,
1991.1
CIVIL LAW
Acts that cannot be done through an agent
L Personal Acts - (making of a will; exercise
of right of 1suffrage; statements required to
be made under oath; attending meetings of •
'board of directors/trustees of a corporation;
agents prohibited from appointing a
substitute)
ii. Criminal Acts or Acts Not Allowed by
Law (ownership of private agrlcultural lands
by aliens through an agent; persons
prohibited to acquire a property by reason
of position or relation to the person cannot
do the same'; through the mediation of
another; participation In the commission of
a crime - a person cannot escape
punishment on the ground that he was
merely an agent) •
Nature of Relationship between Principal anq
Agent ·
Fiduciary - based on trust & confidence
i. Agent is estopped from asserting interest
adverse to his principal's (Severino v.
Severino,
ii. Agent must not act as an adverse party
(Severino v. Severino, G.R. No. 18058,
1923)
iii. Agent must not act for an adverse party
(Severino v. Severino, G.R. No. 18058, ·
1923)
iv. Agent must not use or disclose secret
lntormation ·(Art. 1889)
v. Agent must give notice of material facts (Art.
1889)
General rule: Knowledge of the agent is
imputed to the principal even though the agent
never communicated it to his principal (Sunace
International Management Services, Inc. v.
NLRC, G.R. No. 161757, 2014)
Exceptions:
i. Where the interests of the agent are
adverse to those of the principal;
in
ii. Agent acts bad faith or where the person
claiming the' benefit of the rule colludes with
the agent to, defraud the principal (Art. 189,8)
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between Agency and Distinction between Agency and Contractor
() (Shell v. Firemen's Ins. Co., G.R. No. L-8169,

{ .. 1 Agent represents a A guardian represents AGENT INDEPENDENT

capacitated person
Agent is appointed by
the principal and can
be removed by the
f) latter.
Agent is subject to the
directions of the
principal.
Agent can make the
principal personally
liable.
1" ·.
~ .. ,I
an incapacitated I CONTRACTOR
person. Represents his Employed by the
princloal emolover
Guardian is appointed Acts under the Acts according to his
by the court and principal's control and own method
stands in loco parentis. instruction
Principal is liable for Employer not liable for
Guardian is not subject torts committed by the torts committed by the
to the directions of the agent within the scope independent
ward but must act for of his authority (Civil contractor. (Rule VIII,
the benefit of the latter Code, Art. 1897, Art. Sec. 9(b). Omnibus
Guardian has no 1899) Implementing Rules of
power to impose the Labor Code of the
personal liability on the Phfllnoines)
ward.

o-r r btw A . nd t.eass

An agent must submit A co-partner is not
. AGENCY· LEASE OF
, to the principal's right subject to co-partner's
PROPERTY.
to control right to control, unless
Agent is controlled by Lessee is not there is an agreement
the principal. controlled by the to that effect
lessor.
The agent assumes The partner binds not
Agency may involve Lease of property no personal liabllity only the firm members
things other than involves property. where he acts within but himself as well
property.
r-.,_. the scope of his'
Agent can bind the Lessee cannot bind authori!}'. (Ari. 1§2I.)_..1- --1
orincioal. the lessor. The agent takes his The profits belong to all
agreed share of profits the partners as
Distinction between Agency to Sell and Sale not as owner but as common proprietors in
(Quiroga v. Parsons, G.R. No. 11491, 1918; an agreed measure of agreed proportions •
...,,
! 188288. 2012 mB••••n••
Spouses Viloria v. Continental Airlines, G.R. No.

Buyer receives the

compensation for h'ls
services 11
':'i
-.
As to Manner of Ct~ation
goods as owner
i. Express - agent has been actually
·,,, . authorized by the principal, either orally or
.~~ Buyer pays the price in writing. (Art. 1869)
-. ii. Implied - agency is implied from the acts of
Buyer, as a general the principal, from his silence, or lack of
rule, cannot return the action, or his failure to repudiate the agency
object sold knowing that another person is acting on .
his behalf without authority, or from the acts
Buyer can deal with of the agent which carry out the agency.
the thing as he (Ari. 1869)
pleases, being the
owner NOTE: Agency may be express, or implied from
the acts of the principal, from his silence or lack
of action, or his failure to repudiate the agency,
l
knowing that another person is acting on his
J

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behalf without authority. Agency may be oral,
unless the law requires a specific form. (Art.
1869)
Other Classifications of Agency
As to Character
i. Gratuitous agent receives no
compensation for his services (Art. 1875)
ii. Onerous -· agent receives compensation
for his services (Art. 1875)
As to Extent of Business of the Principal
i. General - agency comprises all the
business of the principal (Art. t 876)
ii. Special - agency comprises one or more
specific transactlons (Art. 1876)
As to Authority Conferred • to purchase (or sell) a property on terms agree~
i. Couched In general terms - only acts of
administration (Art. 1878)
ii. Couched In specific terms - only the
performance of a specific act/s (Art. 1876)
As to Nature and Effects
i. Ostensible or Representative - agent
acts in the name and representation of the
principal
ii. Simple or Coll'ltnission - agent acts in his
own name but for the account of the
principal.
Forms of Agency
General rule: Appointment of an agent may be
oral or written; no formal requirements (Art. 1869)
Exception: When the law requires a specific
form (e.g., sale of a piece of land or any interest
therein through an agent - the agent's authority
must be in writing, otherwise the sale is void)
(Art. 1874)
Compensation
General rule: Agency is presumed to be for
compensation, unless there is proof to the
contrary. (Art. 1875)
The agent does not have to prove that the
agency is for compensation.
Exception: But the prima facie presumption that
the agency is for compensation may be
contradicted by contrary evidence (Art.1875)
CIVIL LAW
Broker
Negotiates contracts relative to property in
behalf of others and for a compensation/fee
(Litonjua v. Etemit Corp., G.R. No. 144805, 2006)
•
Difference from a Broker
A broker brings party together and parties agree
to enter into a contract. A broker is not an agent
of either party, and negotiate contracts relative
to property in behalf of others and for a
compensation/fee. He is described merely as a
"go-between" between the parties in Litonjua v.
Eternit Corp. (G.R. No. 144805, June 8, 2006),
and does not have authority to bind the parnes.
Thus, in Litonjua, the Court said that a real
estate broker .(not an agent) is one who
negotiates the sale of real properties - his •
authority is to find a buyer (or seller) who wishes
upon by the parties. He has no authority to bind
the parties in the contract of sale. His authority is
to find a buyer: (or seller) and not to sell the
property. Thus, there is no need of a special
power of attorney under Art 1878.
When Broker Entitled to Compensation
1. Whenever he brings to his principal a party
who is able ancf willing to take the property,
and enter into, a valid contract upon the·
terms named by the principal, although the
particulars may be arranged and the matter
negotiated and completed between the
principal and the purchaser directly
(Macondray & Co., Inc. v. Sellner, G.R. No.
9184, 1916)
2. However, a broker is never entitled to
comrmssion for unsuccessful efforts.
(Guerdex Enterprises v. NLRC, (3.R. No.
66541, 1990)
3. The broker should be paid his commission
where he Is the efficient procuring cause in
bringing the sale. (Prats v. CA, G.R. No. L-
39822, 1978; Manotok Brothers v. CA, G.R.
No. 94753, 1993)
Efficient Procuring Cause
When there is a close proximate and causal
connection between the efforts and labor of the
agent and the principal's sale of property.
(Manotok Brothers v. CA, G.R. No. 94753, 1993)
Q: Will a broker be paid If the transaction
was effected after the expiration of his
authority?
A: The broker should be paid his commission
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where he is the efficient procuring cause in
bringing the sale. He is the efficient procuring
cause whan there is a close proximate and
e1:1uial eonnectlor, b@lWHn the efforts nnd lebor
of the agent and the prlhcipal1s sale of property
(Manotok Srothers, Inc. \I. CA, G.R. No. 94753,
1993)
Law on Double Agency
General rule: Disapproved by law for being
,,»
~ .,
,
. against public policy and sound morality
r-·
._· Exception: Where the agent acted with full
knowledge and consent of the principals
_.rr \
t .
Right of Agent to Compensation in case of
Double Agency
i. With knowledge of both principals -
recovery can be had from both principals
{At1. 1915)
ii. Without the knowledge of. both
principals - the agent can recover from
neither
, ,.,r ......
•'\ ... '
iii. With knowledge of one principal - as to
the principal who knew of that fact and as to
the agent, they are in pari delicto and the
'··
. '
courts shall leave them as they were, the
contract between them being void as
against public policy and good morals
,! '
fi
-;
I
I
Requisites for Principal to be bound by act of
Agent (Art. 1897)
1. The agent must act in behalf of the principal
2. The agent must act within the scope of his
authority
When Principal is not bound by act of AgP,nt
General Rule: The agent acts without or beyond
the scope of his authority in the principal's name
(Art. 1897, 1910, Art. 1403 (1))
Exceptions:
i. Where the acts of the principal have
contributed to deceive a 3•-d person in good
"~·.i'. faith; (Art. 1900)
.f "• ii. Where the limitations upon the power
;::_.i created by the principal could not have
been known by the 3•d person; (Art. 1900)
iii. Where the principal has placed in the hands
of the agent instruments signed by him In
blank;
iv. Where the principal has ratified the acts of
the agent (Art. 1910)
but in his own name, except when the
transaction involves things belonging to the
principal (Art. 1_883)
NOT~: fh~ agent Is Ml deemed to hav~
exteeded the limits of his authority should he
perform the agency in a manner more
advantageous to the principal than that indicated
by him, since he is authorized to do such acts as
may be conducive .. to the accomplishment of the
purpose of the ag~cy. (Art. 1882)
f
The powers of an agent are particularly broad in
the case of one l:\cting as a general agent or
manager; such a position presupposes a degree
of confidence reposed and investiture with liberal
powers for the exercise of judgment and
discretion in transactions and concerns which
are incidental or appurtenant to the business
entrusted to his care and management. In the
absence of an agreement to the contrary, a
managing agent may enter into contracts that he
deems reasonably necessary or requisite for the
protection of the Interests of his principal
entrusted to his management. (Eurotech v.
Cuizon, G.R. No. 167552, 2007)
Forms of Acceptance by Agent
i. Express - when it is oral or written (Art.
1870)
ii. Implied - when it can be inferred from the
acts of the agent which carry out the
agency, or from his silence or inaction
according to the circumstances (Art. 1870)
Between persons who are present - implied •
acceptance if the principal delivers his power of
attorney to the ,agent and the latter receives it
• without any objection (Art. 1871)
Between persons who are absent
General rule: Acceptance not deemed implied
from the silence of the agent. (Art.1872)
Exceptions:
i. When the principal transmits his power of
attorney to the agent who receives it
without any objection
ii. When the principal entrusts to him by letter
or telegram a power of attorney with
respect to the business in which he Is
habitually engaged as an agent, and he did
not reply to thelletter or telegram (Art. 1872)

.
.:;,__}
•' The latter acts within the scope of his authority
"Present"
Generally, "face to \face", but includes people

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conversing directly through technology (e.g. over
the telephone).
Q: liow is Implied acceptance manlfested as
between persons who are present and those ~
who are absent?
A: As between persons who are present, the
acceptance of the agency may be implied if the
principal delivers his power of attorney to the
agent and the latter receives it without any
objection. (Art. 1871). Meanwhile, as to those
who are absent, the acceptance of the agency
cannot be implied from the silence of the agent,
except when the principal delivers his power of
attorney to the agent, who receives it without
any objection; or when the principal entrusts to
him by letter or telegram a power of attorney in
which he is habitually engaged as an agent, and
he did not reply to the letter or telegram. (Art.
1872)
Power of Attorney
Instrument in writing by which one person, as
principal, appoints another as his agent and
confers upon him the authority to perform certain
specified acts or kinds of acts on behalf of the
principal; primary purpose is to evidence agent's
authority to third parties within whom the agent
deals (Wee v. De Castro, G.R. No. 176405,
2008}
Construction of Power of Attorney
General rule: Strictly construed to grant only
those specified powers. (Olaguer v.
Purugganan, Jr., G.R. No. 158907, 2007)
Exception: When strict construction will destroy
the very purpose of the power (Olaguer v.
Purugganan, Jr. G.R. No. 158907, 2007)
Ways of Giving Notice of Agency and its
Effect
i. By special information - the person
appointed as agent is considered as such
with respect to the person to whom it was
given. (Art. 1873)
ii. By public advertisement - the agent is
considered as such with regard to any
person. (Art. 1873)
How Agency is revoked
i. Principal may revoke the agency (express
or implied) at will and compel agent to
return the document evidencing the agency.
(Art. 1920)
CIVIL LAW
n
Ji. Agency has been entrusted for purpose of
contracting with specified persons -
revocation will not prejudice specified
persons if they'1were not notified. (AH. 1921) •
iii. If the agent''. had general powers -
revocation does not prejudice third persons
who acted in good faith and without
knowledge of the revocation. Notice of
revocation in a newspaper of general
circulation is a sufficient warning. (Art. 1922)
iv. The appointment of a new agent for the
same business or transaction revokes the
previous agency from the day on which
notice was given to the former agent. (Art.
1923)
v. Agency is revoked if principal directly
manages the business entrusted to the •
agent, dealing directly with third persons
(Art. 1924)
vi. When two or more principals have granted
a power , of attorney for a common
transaction, any one of them may revoke
the same without the consent of the others.
(Art. 1925) .
vii. A general power of attorney Is revoked by a
special one granted to another agent, as
regards the special matter involved in the
latter. (Art. 1926)
viii.In the same manner as it was constituted.
However, constitution by Special
Information. may be revoked by notice in a
daily newspaper, provided it can be proven
that 3'd persons in question read the
revocation (Art. 1922)
Agency by Estoppel
There is really no agency at all, but the alleged
agent seemed to have apparent or ostensible,
although not real, authority to represent another.
(Country Bankers Insurance Corporation v.
Keppel Cebu Shipyf)rd, et. al .. G.R. No. 166044,
2012) ;ji
NOTE:
• If a person specially informs another or
states by public-advertisement that he has
given a power of attorney to a third person,
the latter thereby becomes a duly authorized
agent, in the former case with respect to the
person who received the special information,
and in the latter case with regard to any
person (Art. 1873).
• Even when the agent has exceeded his
authority, the principal is solidarily liable with
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the agent if the former allowed the latter to

act as though he had full powers (Art. 1911)
Requisites of Agency by Estoppel
1. The principal manifested a representation of
the agent's authority or knowingly allowed
the agent to assume such authority;
2. The third person, in good faith, relied upon
such representation; and
3. Relying upon such representation, such third
person has changed his position to his
detriment (Country Bankers Insurance
Corporation v, Keppel Cebu Shipyard, et. al.,
G.R. No. 16-6044, 2012).
NOTE: An authority embodied in a letter is
sufficient. (Jimegez v. Rabot, G.R. No. L-12579,
1918)
Attorney-in-Fact
"An attorney-in-fact is simply an agent whose
authority is strictly limited by the instrument
appointing him, though he may do things not
mentioned ii'l his appointment necessary to the
performance of the duties specifically required of
him by the power of attorney appointing him,
such authority necessarily being implied
(Philippine Legal Encyclopedia, p. 66)

I . II d A .
Distinction between Agency by Estoppel and His authority is provided in a special power of
attorney or general power of attorney or letter of
· BASIS AGENCY BY IMPLIED attorney. An attorney-in-fact is not necessarily a
ESTOPPEL AGENCY. lawyer." (Pineda, Legal Ethics, p. 8)
Existence No agency at There is an
of actual all actual agency
agency
•
Reliance Can be invoked Such reliance Is
by 3rd only by a 3rd not needed, Scope of All acts Specific acts
persons person who In since the agent Authority connected in pursuance
good faith relied is a real agent wtth the of particular
on the conduct b'usiness or instructions
of the principal etnployment or with
in holding the in-whtch he is restrictions
agent out as engaged (Civil necessarily
being Code, Art. implied from
authorized 1876) the act to be
Nature of An agent by An agent by done (Civil
Authority estoppel has implied Code, Art. •
none of the appointment 1876
rights of an
agent, except
has all the
rights and
. Nature of
Service
Involves
continuity of
No continuity.
of service
where the liabilities of an Authorized service
principal's agent, i.e. has Extent to May bind his Cannot bind
conduct are actual authority Which Agent principal by his principal
such that the to act on behalf May Bind the an act within in a manner
agent of the principal Principal the scope of beyond or
reasonably his authority outside the
believed that although it specific acts
the principal may be which he is
intended him to · contrary to the authorized to
act as an agent latter's special perform
instructions
An agency couched in general terms comprises Termination Apparent Duty imposed
only acts of administration, even if the principal of Authority authority does upon the third
should state that he withholds no power or that not terminate party to
the agent may execute such acts as he may by the mere inquire
consider appropriate, or even though the agency · revocation of makes
should authorize a general and unlimited his authorit termination of
management (Art. 1877)

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without notice the

-- iii. To £.ompromlse, to submit questions to
to the third relationship arbitration, to renounce the right to appeal
party as between from a judgment, to waive objections to the •
the principal venue of an action or to abandon a
and agent prescrlptioh already acquired;
effective as iv. To Waive any obligation gratuitously;
to such third v. To §.nter into any contract by which the
party unless ownership .of an immovable is transmitted
the agency or acquired either gratuitously or for a
has been valuable consideration;
entrusted for vi. To _Make gifts, except customary ones for
the purpose charity or those made to employees in the
of contracting business managed by the agent;
with such vii. To !::oan or borrow money, unless the latter
third oartv act be urgerit'. and indispensable for the
Construction Merely Strictly preservation of the things which are under •
of Prlnclpal's advisory in construed as aomlnlstratlonf
Instructions nature they limit,the viii. To ,bea.se any real property. to another
agent's person for more than one year;
authority ·- ix. To §.ind the ' principal to render some
service without compensation;
Agency couched In general terms x. To ~Ind the principal In a contract of
Covers only mere acts of administration even if: partnership;
i. The principal should state that he withholds xi. To Qbligate the principal as a guarantor or
no power surety;
ii. The agent may execute such acts as he xii. To freate or convey real rights over
may consider appropriate immovable property;
iii. The agency should authorize a general and xiii. To Accept or repudiate an inheritance;
unlimited management (Art. 1877) xiv. To B_atify or recognize obligations
contracted before the agency;
How to construe Contracts of Agency xv. Any Qther act of strict dominion. (Art. 1878)
Contracts of agency, as well as general powers
of attorney, must be interpreted in accordance NOTE: A Special Power of Attorney is not
with the language used by the parties. required to execute a Deed of Partition because
• The real intention of the parties is partition is not deemed a conveyance of real
primarily determined from the language property. A Deed of Partition cannot be
used and gathered from the whole considered an set of strict dominion, and thus,
instrument. Article 1878 (5) and (15) are inapplicable. A
• In case of doubt, resort must be had to the special power of attorney is not necessary to
situation, surroundings and relations of the authorize a person to sign a Deed of Partition.
parties. The intention of the parties must (Heirs of Ureta v. Heirs of Ureta, G.R. No.
be sustained rather than defeated. 165748, 2011)
• If the contract is open to two (2)
constructions, one of which would uphold What makes an agency a "Special Power of
the intention while the other would Attorney"?
overthrow it, the former is to be chosen. An agent has special power of attorney only
(Linan v. Puno, G.R. No. L-9608, 1915) when the act or contract enumerated specifically
under Article 1878 has been literally "named" In
Cases where Special Power of Attorney is the grant of commission by the principal. i.e. the
Necessary (PECWAM·LLB·BOCARO) term power to (sell, mortgage, etc.) must literally
i. To make such f ayments as are not usually be written or expressed for the commission to
considered as acts of administration; constitute a special power of attorney (Agency,
ii. To g_tfect novations which put an end to Trusts, Partnerships and Joint Ventures,
obligations already in existence at the time Villanueva, 2011 Edition, p.99).
the agency was constituted; ~;~
-.i
II
··.'
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\ }
Q: A executed an SPA authorizing his
r·, brother Atty. B to sell the lots. Does this
include the authority to administer the
r>, property?
\ ·' A: No. The power of administration does not
include acts of disposition or encumbrance,
which are acts of strict ownership. Art. 1877 of
the NCC provides that an authority to dispose
(, cannot proceed from an authority to administer,
and vice versa. Specifically, the apparent
,··
i' )' authority of Atty. B, being a special agency, was
limited to the sale of the property in question,
~·- and did not include or extend to the power to
·~)
administer the property. (Aggabao v. Parulan,
::··· ., G.R. No. 165803, 2010)
:..... ,.
NOTE:
A Special Power of Attorney must express the
powers of the agent in clear and unmistakable
language for the principal to confer the right
upon an agent (Yoshizaki v. Joy Training Center
'-· of Aurora, Inc., G.R. No. 174978, 2013).
-:
~- However, Article 1878 does not state that the
,...., authority be in writing. As long as the mandate
'. I
is express, such authority may either be oral or
written. The requirement under Article 1878
refers to the nature of authorization and not to its
form (Patrimonio v. Gutierrez, G.R. No. 187769,
2014).
.' I The special power of attorney can be included in
the general power when it specifies therein the
.) act or transaction for which the special power is
required.
'\
Q: A borrowed money from C on behalf c;,f B
without B's knowledge. C sought to recover
from A, but to no avail. He thereafter sent
several demand letters to B asking for the
'
I payment. B now contends that he should not
be held Hable because there was no loan
·, between him and C since he did not give a
)'
special power of attorney for the borrowing
of money. Is B correct?
A: Yes. Art. 1878 of the NCC provides that a
special power of attorney is necessary in order
; to loan or borrow money, unless the latter act be
urgent and indispensable for the preservation of
the U1ings which are under administration. Such
authorization, however, need not be in writing.
As long as the mandate is express, such
authority may be either oral or written.
(Patrimonio v. Gutierrez, G.R. No. 187769,
2014)
CIVIL LAW
Powers not l~bluded in the power to
mortgage ~
i. To sell (Art. 1lJ79)
ii. To execute a 'second mortgage
iii. To mortgage. for the agent's or any 3"'
persons' benefit, unless clearly indicated
Powers not included in the power to
compromise
Submission to arbitration (Art. 1880)
Rationale:
i. A principal may authorize his agent to
compromise because of absolute
confidence in the latter's judgment and
discretion to protect the former's rights and
obtain for him the best bargain in the
transaction.
iL Jf the transaction would be left in the hands
of an arbitrator, said arbitrator may not
enjoy the trust of the principal.
iii. The agent must act within the scope of his
authority. He may do such acts as may be
conducive to the accomplishment of the
purpose of the agency. (Art. 1881)
Instances creating an Agency by Operation
of Law
1. The agent must finish the business already
begun on the death of the principal, should
delay entail any danger (Art. 1884, par. 2)
2. In case a person declines an agency, he Is ·
bound to observe the diligence of a good
father of a family in the custody and
preservation of the goods forwarded to him •
by the owner until the latter should appoint
an agent. (Art. 1885)
• 3. The agent, even if he should withdraw from
the agency for a valid reason, must continue
to act until the principal has had reasonable
opportunity to take the necessary steps to
meet the sltuatlon (Art. 1929).
4. Anything done! by the agent, without
knowledge of ttw death of the principal or of
any other cause which extinguishes the
agency, is valid' and shall be fully effective .
with respect to third persons who may have
contracted with him in good faith (Art. 1931).
5. If the agent dies, the heirs must notify the
principal thereof, and in the meantime adopt
such measures as the circumstances may
demand in the interest of the latter (Art.
1932)
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B. OBLIGATIONS OF THE AGENT ii. If the instructions are ~mbiguous

iii. If the Qeparture is so !nsubstantial that it
does not affect the result and the
General Obligations of the Agent to the •
principal suffers no damage thereby
Principal (GOC) 7. Not to carry out the agency if it would
1. Act with utmost §ood faith & loyalty for the
,Manifestly result in loss or damage to the
furtherance of principal's interests principal (Art. 1888);
2. Qbey principal's instructions 8. ~nswer for damages if there being a conflict
3. Exercise reasonable £are between his & his principal's Interests, he
prefers his own (Art. 1889);
General Obligation of Agent who accepts the 9. Not to Loan to himself if he has been
Agency authorized to loan money at interest (Art.
1890)
NOTE: The agent is bound by his acceptance to 10. Render an Account of his transactions and
carry out the agency and is liable for the deliver to the principal whatever he may
damages which, through his non-performance, have received by virtue of the agency (If the
the principal may suffer. •
agent fails to deliver and instead converts or
appropriates for his own use the money or
He must also finish the business already bcyun property 'belonging to his principal, he may
on the death of the principal, should delay entail
be charged with ESTAFA.) (Art. 1891)
any danger. (Art. 1884)
11. Be Responsible in certain cases for the act
of the substitute appointed by him (Art. 1892)
Obligation of Agent who declines Agency
12. Pay [nterest on funds he has applied to his
In case a person declines an agency, he is
own use (Arf. ·t 896)
bound to observe the diligence of a good father
of a family in the custody and preservation of the
Distinctions between Authority and the
goods forwarded to him by the owner until the
Prlncl al's Instructions
latter should appoint an agent. The owner shall
as soon as practicable either appoint an agent or
take charge of the goods. (Art. 1885) Contemplates only a
powers committed to private rule of
Specific (FADI- CALAMARI) the agent by the , guidance to the agent;
1. £arry out the agency (Art. 1884); principal !i independent and
,·. distinct in character
2. ~nswer for damages which through his non-
performance the principal may suffer; Relates to the ,i Refers to the manner
3. finish the business already begun on the subject/business with or mode of agent's
death of the principal should delay entail any which the agent is · action
danger (exception to the rule that death em owered to deal/act
extinguishes agency) (Art. 1884); Limitations of authority Without significance as
4. Observe the Q,iligence of a good father of a are operative as against those with
family in the custody and preservation of the against those who neither knowledge nor
goods forwarded to him by the owner in have/charged with notice of them
case he declines an agency, until an agent knowled e of them
is appointed (Art. 1885); Contemplated to be Not expected to be
5. ~dvance necessary funds if there be a made known to third made known to those
stipulation to do so (except when the persons dealing with with whom the agent
principal is insolvent); the a ent deals·
6. Act in accordance with the Instructions of Mismanagement of the Principal still
the principal, and in default thereof, to do all business by the agent responsible for the
that a good father of a family would co (Art. acts contracted by the
1887); agent with respect to
Exceptions (to the rule that the agent must 3'ij persons;
not depart from the instructions of principal) Principal, however,
(SAi): . may seek recourse
i. There's a §udden emergency from the a ent

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Tort committed by the Prlnclpal civilly liable (Art. 1697)

agent so long as the tort is Ii. When the agent exceeds his authority (Art.
committed by the 1897, 1898)
agent while performing iii. When an agent by his act prevents
his duties in performance on the part of the principal
furtherance of the iv. When a person acts as an agent without
12rinciQal's business or
authority without a principal
Agent in good faith but Principal is liable for v, A person o/hO purports to act as agent of an
prejudices 3•d oarties darnaoes incapacitated principal
Agent in bad faith and Only the agent is liable
oreiudices 3•d persons for damaoes Appointment ~f Sub-Agent
i. If the principal has not prohibited the agent
from appointing a substitute he will be
liable to 3rd persons for th~ acts of the
sub-age_ntwithin the scope of his authority
Principal still Ii. If there rs a prohibition but nevertheless the
responsible for the agent appoints a sub-agent, all the sub-
acts contracted by the agent's acts a~e void as to the principal.
agent with respect to iii. If there is authority to appoint and sub-
3'~ persons: Principal, agent is not designated by the principal, the
,. .... . . however, may seek agent will be liable for all the acts of the •
,I recourse from the sub-agent if the sub-agent is notorlously
··~ incompetent or insolvent.
..... . a ent
iv. If there is authority to appoint and sub-
·,
\,.,.,/
' Tort committed by the Principal civilly liable
agent so long as the tort is agent is designated by the principal, the
committed by the agent is released from any liability from
agent while the acts of the sub-agent.
performing his duties v. If the appointment of a sub-agent is not
in furtherance of the authorized but not prohibited, it shall be
rinci al's business valid if it is beneficial to the principal. But,
-,> Agent in good faith but Principal is liable for should the principal incur damage due to
reiudices 3'd arties dama es such appointment, the agent shall be
primarily responsible for the acts of the
Agent in bad faith and Only the agent is
reiudlces 3rd ersons liable for darna es
sub-aqent. (Art. 1892) •
Q: A constituted B, as his agent. Can B
When Agent has a right to disobey the
appoint a substitute?
) Principal's Instructions
·~.J.: A: Yes. The agent may appoint a substitute or
1. When the instruction calls for the sub-agent if the principal has not prohibited him
,, performance of illegal acts
from doing so, but he shall be responsible for the
2. Where he is privileged to do so to protect his acts of the substitute:
security In the subject matter of the agency
J a. When he was not given the power to
appoint one:
When obligation to account not applicable
b. When he was given such power, but
.. ) i. If the agent acted only as a middleman with without designating the person, and the .
the task of merely bringing together the
person . appoi~ted was notoriously
vendor and the vendees.
incompetent or msolvent. (Art. 1892)
ii. If the agent had informed the principal of
the gift/bonus/profit he received from the
If there is a prohibition, B cannot do so; unless
purchaser and his principal did not object.
he seeks the consent of the principal.
iii. Where a right of lien exists in favor of the
agent.

'.A'hen Agent may Incur Personal Liability

1. When the agent expressly binds himself

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Responsiblllty of Two (2) or More Agents
Appointed Simultaneously • the same time repudiate its burdens
General rule: Joint liability
Exception: When solidarity has been expressly
stipulated, In Which case, each of the agents
becomes solldarily liable for (1) the non-
fulfillment of the agency; and for (2) the fault or
negligence of his fellow agent(s) (Art.1894)
Q: What is the rule on responsibility of two or
more agents serving the same principal?
A: Solidary when stipulated; joint when nothing
is stipulated (Vi/fant1eva & Tiansay-Villanueva,
Agency & Trusts, Partnerships, & Joint Ventures
181-182, 2015 {citingArt. 1894]).
Exception to the Exception: when one of' the
other agenUs acts beyond the scope of his
authority - innocent agent is not liable. (Art.
1895)
Effect where 3rd Person aware of limits of
agent's power
If the agent exceeds his authority, It shall be void
unless the principal ratifies it. (Cervantes v. CA,
G.R. No. 125128, 1999)
Doctrine of Agency by Necessity
An agency can never be created by necessity;
what is actually created is additional authority in
an agent appointed and authorized before the
emergency arose.
The existence of emergency or other unusual
conditions may operate to invest in an agent
authority to meet the emergency, provided
(PURE):
1. The agent's enlarged authority is exercised .
for the principal's frotection
2. The agent is ynable to communicate with
principal;
3. The means adopted are Reasonable under
the circumstances;
4. The emergency really gxists;
When third persons can repudiate the
contract
Before actual ratification by the principal, or
before the principal has signified his wilUngness
to ratify the agent's acts.
Effect of the principal receiving the benefits
of the transaction
He is deemed to have ratified it. A principal may
CIVIL LAW
not accept the -benefits of a transaction and at
•
Conditions for Ratification
1. The principal must have capacity and power
to ratify ,i
2. He must have, had knowledge of material
facts ,:
3. He must ratify t~e acts in its entirety
4. The act must b~ capable of ratification
5. The act must · be done in behalf of the
principal
6. To be effective, ratification need not be
communicated· or made known to the agent
or the third party. The act or conduct of the
principal rather than his communication is •
the key. But before ratification, the third
• party is · free to revoke the unauthorized
contract.
Effects of Ratification
i. With respect to agent - relieves the agent
from liability to the third party for the
unauthorized transaction, and to his
principal for acting without authority; may
recover compensation
ii. With respect to principal - assumes
responsibility for the unauthorized act, as if
the agent had acted under original authority
but not liable for acts outside the authority
approved by his ratification
iii. With respect to 3'd persons - bound by
ratification to the same extent as if the
ratified act' had been authorized; cannot
raise the question of the agent's authority to
do the ratified act
NOTE: Ratification is spelled out when the
principal brings legal proceedings to enforce
the contract entered into by the
unauthorized agent, subject to qualification,
however, that the bringing of legal
proceedings :is not deemed ratification where
the principal's action is undertaken to avert a
greater loss rather than to assert a gain.
(Robinson v. Bosse)
t1:
i,
NOTE: The age~t Is responsible not only for
fraud, but also for negllgence, which shall be
Judged with more or less rigor by the courts,
according to whether the agency was or was
not for compensation. (Art. 1909)
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ACTS OF THE EFFECT EXCEPTION(S)

AGENT ..
Jn behalf of the Binds the principal Agent liable if he:
principal, within the Agent not personally liable (Art. i.Expressly makes himself liable
scope of authority 1881) ii.Exceeds the limits of his authority
without giving the parties
~---------......---------------~---s_u_ffi_1c_ient notice bf his powers
Without or beyond Contract is unenforceable as against Binding on the principal when:
scope of authority the principal but binds the agent to i.Ratified or
the third person (Arts. 1317, 1403 ii.The principal allowed the agent to
and 1898) act as though he had full
powers
Within the scope of Not binding on the principal. When the transaction involves things
authority but in the Principal has no cause of action belonging to the principal:
agent's name against the 3•d parties and vice versa • Remedy of the principal -
damages for agent's failure to
comply with the agency.
Remedies of the third person
i.lf the case falls under the general
rule, he can sue the agent.
ii.But when the contract involves •
things belonging to the
principal, he can sue the
;
;.,,I principal.
iii.But , if it cannot be determined
without litigation who is liable,
he can sue both.
·, Within the scope of Insofar as 3'u persons are
;
the written power of concerned, not required to inquire
attorney but agent further than the terms of the written
has actually power, agent acted within scope of
,'
exceeded his his authority; · .»

authority according
to an understanding
Principal is estopped
.1I
•
) between him & the
principal
With improper Motive is immaterial; as long as Third person knew agent was acting
motives within the scope of authority, valid for his own benefit: principal is not
liable to 3'd person
Owner is seeking recovery of
personal property of Which he has
been unlawfully deprived
Authorized - principal still liable
J
Beyond the scope of the agent's
authority
General Rule: Principal not liable
Exception: principal takes
advantage 6f a contract or
receives benefits made under
false representation of his agent

For the agent's own benefit -

principal still liable; agent's motive
immaterial

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Comml11lon Agent • one whose business Is to (a def credere agent), he shall §ear the risk
receive and sell goods for a commission and of collecUon and shall pay the principal the
who is entrusted by the principal with the proceeds of the sale on the same terms •
possession of goods to be sold, and usually agreed upon with the purchaser. The agent
selling in his own name. shall be liable for damages if he does not
collect the credits of his principal at the time
Distinction between Commission Agent and when they become due and demandable,
Broker unless he proves, that he exercised due
COMMISSION AGENT . BROKER diligence for that purpose. (Art. 1907)
Engaged in the No custody or
purchase and sale for a possession of the ----- end of topic -··-·-·-
principal of personal thing he disposes;
property which has to merely a go-between,
be placed in his an intermediary
possession and between the seller and
disposal the buver •
Has a relation with Maintains no relation
principal, buyer or with the thing whrch
seller, and property he purchases or sells
which is the object of
the transaction

Distinction between Ordinary Agent and

Commission A ent

May act in his own

name or in that of the
rinci al
Need not have Must be in possession
possession of the of the thing he
principal's goods disposes

Obligations of a Commission Agent (RMCB)

1. Responsible for the goods received by him,
as described in the consignment, unless
upon receiving them he should make a
written statement of the damage and
deterioration suffered by the same (Art.
1903)
2. If goods are of the same kind and mark but
belonging to different owners, make a
distinction by counter Marks and designate
the merchandise respectively belonging to
each principal (Art. 1904)
3. He cannot, without consent of the principal,
sell on fredit; should he do, principal may
demand payment in cash, but the
commission agent . entitled to any
interest/benefit which may result from such
sale (Art.1905)
4. If an agent receives guarantee commission

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C. OBLIGATIONS OF THE PRINCIPAL
Obligations of the Principal to the Agent
() (CARIP)
1. g_omply with all the obligations agent
contracted in representation of the principal
(Art. 1910)
2. ~dvance sums necessary for the execution
i ·.
'l j
of the agency, when agent so requests;
liable for reimbursement regardless of the
undertaking's success whenever agent had
advanced & has no fault; includes interest
(Art. 1912)
3. Reimburse the agent for all advances made
by him provided the agent is free from fault
(Art. 1912)
4. [ndemnlty the agent for all the damages
which the execution of the agency may have
(' ..... caused the latter without fault or negligence
! '
·- on his part (Art. 1913)
5. fay the agent the compensation agreed
~ .
,. ,
' ! upon or the reasonable value of the latter's
services {Art. 1875)
Liability of 3rd Persons to the Principal
1. In Contract - a 3rd person is liable to the
~... ;
principal upon contracts entered into by his
.,- \ agent, as if the contract has been entered
. ;
into by the princ!fal. (Art. 1897)
2. In Tort - the 3' person's tort liability to the
principal, insofar as the agent is involved in
the tort, arises in 3 situations:
i. Where . the 3rd person damages or
injures property or interest of the
principal in the possession of the agent
.. ,; i
ii. Where the 3rd person colludes with' the
agent to injure/defraud the principal
iii. Where the 3rd person induces the agent
to violate his contract with the principal
to betray the trust reposed upon him by
,,J
.
..
the principal.
Requisites for Solidary Liability of Principals
1. There are two (2) or more principals
2. The principals have all concurred in the
appointment of the same agent
3. The agent is appointed for a common
transaction or undertaking (Art. 1915)
NOTE: The rule in Art. 1915 applies even when
the appointments were made by the principals in
separate acts, provided that they are for the
) same transaction. The solidarity arises from
the common Interest of the principals and
not from the act of constituting the agency •
..,
-r
CIVIL LAW
The principal is not bound by the acts of the
authorized agent where the latter failed to
indicate in the mortgage that she was acting for
and in behalf of her principal, and the REM
explicitly shows on its face that it was signed by
agent in her own name and personal capacity.
The third-party bank has no one to blame but
itself. Not only did it act with undue haste when it
granted and released the loan, but it also acted
negligently in preparing the REM as it failed to
indicate that the agent was signing it for and on
behalf of the principal. (Bucton v. Rural Bank of
El Salvador, lnc., G. R. No. 179625, 2014)
Rule where two persons contract separately
with Agent and Principal
Two persons may contract separately with the
agent and the principal with regard to the same
thing. If the two contracts are incompatible with
each other, the one of prior date shall be •
preferred. This is subject, however, to the rules
on Double Sales under Art. 1544 of the Civil
Code (i.e. for movables: first in possession, first
in right; for immovables: first to register in good
faith, first in right; absent any inscription: first in
possession or ·party who presents oldest title
acquires ownership). {Art. 1916)
Agent's Right of Retention
1. Specific (only for those goods connected
with the agency); and
2. Until the principal effects the reimbursement
and pays the indemnity {Art. 1914) •
Prlncipal's Liabllitles for Expenses
General rule: Principal is liable for the expenses
incurred by the agent.
Exceptions (AFUS):
i. If the agent Acted in contravention of the
principal'sinstructions, unless the latter
should wish to avail himself of the
benefits 'derived from the contract.
ii. When the expenses were due to the .
fault of the agent.
iii. When the · agent incurred them with
knowledge that an Unfavorable result
would ensue. if the principal was not
aware thereof.
iv. When it was Stipulated that the
expenses would be borne by. the agent,
or that the latter would be allowed only a
certain sum. {Art.1918)
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Who can be estopped to deny Agency?

1. Estoppel of Agent • one professing to act
as agent is estopped to deny his agency '
both as against his asserted principal and
the third persons interested in the
transaction in which he is engaged
2. Estoppel by the Principal ·
i. As to agent - one knowing another is
acting as his agent and fails to repudiate
his acts, or accept the benefits of them,
will be estopped to deny the agency as
aqainst such other
ii. As to sub-agent - for the principal to be
estopped from denying his liability to a
third person, he must have known or be
charged with knowledge of • the
transaction and the terms of the
agreement between the agent and sub-
agent
iii. As to third persons - one who knows
that another is acting as his agent or
permitted another to appear as his
ageht, to the injury of third persons who
have dealt with the apparent agent as
such in good faith and in. the exercise of
reasonable prudence, is estopped to
deny the agency (Litonjua, Jr. v. Eternit
Corp., G.R. No 144805, 2006)
3. Estoppel of Third Persons - a third
person, having dealt with one as an agent
may be estopped to deny the agency as
against the principal, agent or 3•d persons in
interest.
4. Estoppel of the Government - government
neither estopped by the mistake/error of its
agents; may be estopped through affirmative
acts of its officers acting within the scope of
their authority.
•
Though not actually Where the principal, by
granted, principal his negligence, permits
knowingly his agent to exercise
permlts/hclds out the powers not granted to
agent as possessing him, even though the
the necessary powers principal may have no
to act in a certain way notice or knowledge of
the conduct of the
a ent
A principal may be held liable under the Doctrine •
of Apparent Authority when the principaJ's
llabilfty arises from: (a) his manifestations of the
• existence of the agency which need not be
expressed, but may be general and implied, or
acts of the agent which suggest the existence of
a principal-agency relatlonship which are known
to the principal and which the principal does not
deny; and (b) the reliance of third persons upon
the conduct of the principal or agent.
(Professional Services, Inc. v. CA, G.R. No.
126297, 2010)
Agency by Estoppel
General Rule: Principal may revoke the agency
at will (Art. 1920)
Exception: Agency coupled with interest
i. When a bilateral contract depends upon the
agency.
ii. When the agency is the means of fulfilling
an obligation already contracted
Iii. When a partner Is appointed as manager of
a partnership in the contract of partnership
and his removal from the management is
unjustifiable. (Art. 1927)

between Ratification and

•
Rests on intention
Affects the entire Affects only relevant
parts of the
transaction
Substance of estoppel
ratification is is the principel's
confirmation of an inducement to
authorized act or another to act to his
conduct after it has prejudice
been done

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Exception to the Exception: When the agent
acts to defraud the principal - Implied
Revocation of Agency
(') I. Principal appoints a new agent for the
same business or transaction (only if
t"' \ there is incompatibility); effective as
\. ' between the principal and the agent only
if communicated to the agent; does not
(1 prejudice rights of third persons acting in
good faith without knowledqe of the
revocation (Art. 1923)
ii. Principal directly manages the business
entrusted to the agent, or deals directly
with 3'd persons (Art. 1924)
Effect of Issuance of a Special Power of
Attorney
The general power is impliedly revoked as to
matters covered by the special power because a
special power naturally prevails over a general
power (Art. 1926)
Principal's Liability for Damages despite
~-
; Revocation
... '
1. If the agency was constituted for a fixed
period, the principal shall be liable for
damages occasioned by the wrongful
discharge of the agent before the expiration
of the period fixed
~ -. 2. Even if there was no time fixed for the
·~· I
Effect of Extlnguishment without Notice
Act of agent deemed valid insofar as third
parties acting in good faith and without
knowledge of revocation. (Art. 1922; Bitte v.
Jones, G.R. No. 212256, 2015)
Q: When is a principal liable for damages
despite revocation of agency?
A:
a. If the agency was constituted for a fixed
period, the principal shall be liable for
damages occasioned by the wrongful
discharge of the agent before expiration
of the period fixed.
b. Even if there was no time fixed for the
continuance of the agency, but the
agency can prove that the principal
acted In bad faith by revoking the
agency in order to avoid the payment of
commission about to be earned, the
principal ca'n be held liable for damages.
(Villanueva· supra at 209-210 (citing
Dialosa v. 1CA, 130 SCRA 350 (1984) &
vetenzuetev. CA 191 SCRA 1 (1990))).
·1
------- end of topic --·-····

.. , f continuance of the agency, but the agent

can prove that the principal acted in bad
faith by revoking the agency in order to
avoid the payment of commission about to
•

.~', I
be earned, the principal can be held lil:lble
for damages

Necessity of Notice of Revocation

1 . As to the agent - express notice always
necessary; sufflclent notice if the party to be
notified actually knows, or has reason to
know, a fact indicating that his authority has
been terminated or suspended; revocation
without notice to the agent will not render
invalid an act done in pursuance of the
authority
2. As to 3rd persons - express notice
necessary
3. As to former customers - actual notice
must be given to them because they always
assume the continuance of the agency
relationship
4. As to other persons - notice by publication
is enough (Art. 1922)

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E. MODES OF EXTINGUISHMENT
NOTE: Even if the reason for extinguishing the
How Agency Is Extinguished (EDWARD) agency is not true, the agent cannot Insist on
a) By the gxpiration of the period for which the reinstatement. , The agent can only demand
agency was constituted. damages. (Orient Air Services v. Court of
b) By the .Qeath, civil interdiction, insanity or Appeals, G.R. f'!o. 76931, 1991)
insolvency of the principal or of the agent;
c) By the ~ithdrawaf of the agent; What happens if the subject matter of the
d) By the Accomplishment of the object or agency is lost or destroyed?
purpose of the agency; General rule: In the absence of any agreement
e) By its Bevocatlon; by the parties to' the contrary, the loss or
f) By the Qissofution of the firm or corporation destruction of the rsubject matter of the agency
which entrusted or accepted the agency terminates the agent's authority to deaf with
(Art. 1919) reference to it. ·
•
Other Modes Exceptions:
a) Mutual wfthdrawaf from the relationship by i. If it is possible to substitute other material
the principal and agent; for that which was destroyed without
b) By the happening of a supervening event substantial detriment to either party
that makes Illegal or impossible the objective Ii. If the destroyed subject matter was not In
or purpose for which the agency was fact essential to the contract
constituted, ffke the destruction of the Ill. A partlal loss or destruction
subject matter which is the object of the
agency. Form of Renunciation
ft is not always necessary for the agent to
NOTE: renounce the agency expressly. He can do so.
The list is not exclusive; causes are particular impliedly, such as:
only to agency; may be extinguished by the i, Where he has conducted himself in a
modes of extinguishment of obligations in manner incompatible wlth his duties as
general whenever they are applicable, like loss agent
of the thing and novation. ii. When he abandons the object of his agency
and acts for himself in committing a fraud
Agency is terminated, as a matter of law, upon upon his principals
the outbreak of war. iii. When he fifes a complaint against the
principal and adopts an antagonistic attitude
Presumption of Continuance of Agency towards him
When once shown to have existed, an agency
relation will be presumed to have continued, in Exceptions to Extingulshment by Death
the absence Of anything to show its termination. i. ff the agency is coupled with an interest;
ii. If the act of the agent was executed without
Continuance of Agency the knowledge of the death of the principal
Parties must be: and the third person who contracted with
1. Present; the agent acted in good faith. (Rallos v. Go
2. Capacitated; and Chan, G.R. :No. L-24332, 1978)
3. Solvent. iii. To avoid Qamage
iv. If it has been constituted In the Common
Modes of Extinguishing an Agency, interest of the principal and of the agent, or
Generally (ASO) in the interest of a third person who has
a) Agreement accepted the stlpulatlon In his favor
b) §ubsequent acts of the parties which may
be either:
a. By the act of both parties or by mutual
consent
b. By the unilateral act of one of them
c) By Qperation of Law

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Can the heirs continue the agency?
C) General rule: Agency calls for personal services
on the part of the agent; rights & obligations are
not transmissible
Exceptions:
i. Agency by operation of law, or a presumed
or tacit agency
ii. Agency is coupled with an interest in the
' ,·· .
~-
. . . .. , subject matter of the agency (e.g. power of
sale in a mortgage).
Exceptions to Extinguishment upon Loss or
Destruction of Subject Matter
i. If It is possible to substitute other material
for that which was destroyed without
substantial detriment to either party or if the
.: ·=
destroyed subject matter was not in fact
: I
essential to the contract;
ii. A partial loss or destruction does not
,·I \
, always result in a complete termination of '
'-- .
the agency, and under such circumstances,
.~ while the agency may be ended in so far as
!.) the destroyed property is concerned, It may
continue in existence as to other property
not affected
• If the loss brought about by the principal
(ex. principal sells subject matter to
another party even if an agent has been
constituted in reference to it), principal
(' ~. liable for damages for his wrongful
terminating act; if subject matter is lost
without princlpal's fault, no liability
assumed by him
Change of Circumstance
,) General rule: When there is a basic change in
the circumstances surrounding the transaction,
I which was not contemplated by the parties and
•. J'
which would reasonably lead the agent to
. ,, believe that the principal would not desire him to
act, the authority of the agent is terminated
CIVIL LAW
not give him new instructions
Revocation
Termination of the agency by the subsequent act
of the principal
Renunciation/Withdrawal
Termination of the agency by the subsequent act
of the agent
May the agency be extinguished at will?
Agent may do so but subject to the contractual
obligations owing to the principal (i.e. fixed
period of time for the agency or purpose not yet
accomplished).
Expressly or Impliedly
i. Conducted himself in a manner
incompatible with his duties;
ii. Abandons the object of agency and acts for
himself in committing a fraud upon his
principal;
iii. He files a complaint against the principal
and adopts an antagonistic attitude towards
him
a) With just cause • give due notice
b) Without just cause - liable for damages
if the principal suffers damages
thereby unless the agent should base
his withdrawal upon the impossibility of
continuing the performance of the
agency without grave detriment to •
himself (Art.1928)
iv. The mere fact that the agent. violates his
instructions . does not amount to
renunciation, t~nd although he may thus
render himself liable to the principal, he
does not cease: to become an agent.
•••• end of topic ••••

Exceptions:
i. If the original circumstances are restored
,,.; within a reasonable period of time, the
agent's authority may be revived
ii. Where the agent has reasonable doubts as
to whether the principal would desire him to
act, his authority will not be terminated if he
acts reasonably
Iii. Where the principal and agent are in close
daily contact, the agent's authority to act will
not terminate upon a change of
circumstances if the agent knows the
principal is aware of the change and does
1
I

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___ x_._c_R_E_D_IT_T_R_A_N_S_A_c_T_IO_N_s , ' Credit Transactions include all transactions •

involving the purchase or loan of goods, services
TOPIC OUTLINE UNDER THE SYLLABUS: or money in the present with a promise to pay or
X. CREDIT TRANSACTIONS
deliver in the future (contract of security).
A.Loan
2 Types of Credit Transactions
B. Deposit 1. Secured transactions - those supported by
a collateral or an encumbrance of property.
C. Guaranty and Suretyship 2. Unsecured,transactions - those supported
only by a promise to pay or the personal
D. Antichresls commitment of another such as a guarantor
or surety. ,
E. Real estate mortgage
Security is something given, deposited or •
serving as a means to ensure the fulfillment or
enforcement· of an obligation or of protecting
some interest in-the property.

2 Types of Security
1. Personal - when an Individual becomes a
surety or a guarantor
2. Real or Property - when an encumbrance
is made on property (e.g. mortgage or
pledge)

Bailment - is the 'ideltvery of property of one

person to another iii trust for a specific purpose,
with a contract, express or implied, that the trust
shall be faithfully executed and the property
returned or duly accounted for when a special
purpose is accomplished or kept until the bailor
reclaims it. Generally, it is contractual, but may
· also be created by operation of law.

Parties in Ballment
1. Bailor - The lender/giver; the party who
delivers possession/custody of the thing
bailed
2. Sallee - The recipient; the party who
receives the possession/custody of the thing
delivered

Art. 1933 (06, 04, BAR): If the bailer delivers to

the bailee a non-consumable thing so that
bailee may use the same for a certain time end
return the identical thing, the contract perfected
is contract of commodatum. There is however,
NO TRANSFER OF OWNERSHIP.

In mutuum, the object borrowed must be a

consumable thing the OWNERSHIP OF
WHICH IS TRANSFERRED to the borrower who
incurs the obligation to return the same
consumable to the lender in an equal amount,
and of the same kind and quality.

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(l
Art. 1941 (05, BAR): Bailee is obliged to pay A. LOAN
I"•
l \ ordinary expenses.
' '
A. CHARACTERISTICS
.r-·) Art. 1946 (05, BAR): Ballor cannot demand 1. Real Contract - delivery is essential for
-._
return until after (a) expiration of period perfection of the loan (BUT a promise to
() stipulated, or (b) accomplishment of use for lend, being consensual, is binding upon the
..
\.
which commodatum was constituted; EXCEPT: parties)
~··" if urgently need thing (may demand 2. Unilateral Contract - only the borrower has
j ; return/temporary use). the obligation, once the subject matter has
been delivered·
Art. 1949 (05, BAR): Bailor is obliged to refund ~i
r
extraordinary expenses provided the bailee B. KINDS ;i
informs the bailor before incurring them, 1. Commodatum - bailor delivers to bailee a
EXCEPT if they are so urgent that reply cannot non-consumable thing so that the latter
be awaited without danger. may use it for a certain time and return the
identical thing
{'' However, if the extraordinary expenses arise on
\:.;
occasion of actual use by bailee, even without Elements of commodatum
fault, they shall be borne equally by bailer and ' 1. Delivery of non-consumable thing;
bailee, unless there is a stipulation to contrary. 2. Obligation to return it (Arl. 1933).

Art. 1951 (05, BAR): Bailor who knows flaws but
does not advise bailee is liable to bailee for
damages suffered because of flaws.
------ end of topic ·-·--···
Kinds of commodatum
1. Ordinary commodatum - bailee uses the
thing for a certain period of time
2. Precarium - bailer rnay demand the
thing loaned at will; exists in cases
where:
a. There is no stipulation as to the
duration of the contract or use of the
thing loaned
b. Use of the thing is merely tolerated
..
by the owner (Arl. 1947).

2. Mutuum or Simple Loan - lender delivers

~
.J to the borrower money or other consumable
thing upon the condition that the latter will
pay the same amount of the same kind and
quality
:~
. .) . . LOAN ' I • • CREDIT
,. ~ Delivery by one. party Ability of an individual
j and the receipt by the to borrow money or.
-~- other party of a given things by virtue of the
sum of money or other confidence or trust
consumable thing reposed by a lender
upon an agreement, that he will pay what
express or implied to he may promise w/in a
repay the same specified period
.)
amount of the same
kind and quality, w(· or
w/o interest :I'
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f •
~OMMODATUM MUTUUM No interest shall' be due unless it has been
Ordinarily not Money or other expressly stipulated in writing (Art. 1956).
consumable consumable thing
Exception: If the obligation corlsists in the payment of a sum
Consumable goods of money, and the debtor incurs in delay, the
may be the subject of indemnity for damages, there being no
commodatum If the stipulation to the contrary, shall be the payment
purpose of the contract of the interest agreed upon, and in the absence
is not the consumption of stipulation, the legal interest, which is six per
of the object, as when cent per annum. (Art. 2209)
it is merely for
exhibition (Art. 1936). Beginning July 1, 2013, the rate of interest on
Ownership is retained Ownership is the loan or forbearance on money, goods, or •
by the lender transferred to the credits and the rate allowed in judgments, in the
borrower absence of stipulation, shall be 6% per annum
Essentially gratuitous Gratuitous or onerous:- (BSP Circular No. 799).
that is with stipulation
to oav interest However, Judgments thet became final and
Borrower must return Borrower need only executory before July 1, 2013 shall continue to
the same thing loaned pay or return a apply the previous. legal rate of 12% per annum
consumable thing of (NACAR v. Gallery Frames Inc., G.R. No.
the same amount of 189871, 2013).
the same kind and
aualitv NOTE: The computation of the amount due must.
May involve real or Only personal property take into consideration the legal rate or rates (6%'
personal property and/or 12% per annum) applicable throughout
Loan for use or Loan for consumption the duration of the period in which interest runs.
(DPWH Secretary vs. Spouses Tecson, G.R. No.
temoorarv possession
Lender may not 179334, 2015)
Bailor may demand
the return of the thing demand its return
loaned before the before the lapse of the
'law, Rule, Legal
Date of ..
term agreed upon · Regulations, Interest
expiration of the term Effectivity
BSP lssuance · Rate
in case of urgent need
NOTE: In case of Act No. 2655 :. Mav 1, 1916 6%
temporary use by the CB Circular
July 29, 1974 12%
bailer, the contract of No. 416
cornmodatum is CB Circular December 22,
12%
suspended while the No.905 1982
thing is in the CB Circular
,July 1, 2013 6%
possession of the No. 799
bailor (Art. 1946 (2)). (DPWH Secretary vs. Spouses Tecson, G.R. No.
Loss of the subject Borrower suffers the 179334, 2015) :
matter is suffered by loss even if caused
the bailer since he is exclusively by a The Court finds t~e stipulated 5% monthly
the owner fortuitous event and he interest to be excessive and unconscionable. In
is not therefore a plethora of cases, the Court has affirmed that
discharged from his stipulated interest rates of three percent (3%)
1--~~~~~~~~J,....::d~utJ-tyJ.9...E_av.__~~~--1 per month and higher are excessive, iniquitous,
Purely personal Not purely personal unconscionable, and exorbitant, hence, illegal
The lender taking into and void for being contrary to morals. In Agner v.
account the character, BPf Family Savings Bank, Inc., the Court had
credit, and conduct of the occasion to rule: Stipulated interest rates of
the borrower. (De 3% per month and higher are excessive,
Leon, 2016) iniquitous, unconscionable, and exorbitant.
While CB Circular No. 905-82, which took effect
on Jan. 1, 1983, removed the ceil.lng on interest
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rates for loans, nothing in the circular could
possibly be read as granting authority to lenders
to raise interest rates to levels which would
.!' -,
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either enslave their borrowers or lead to a
hemorrhaging of their assets. Since the
·'",. stipulation on the interest rate is void for being
I~•• /
contrary to morals, it is. as if there was no
,(' ~ express contract on said interest rate; thus, the
( ... . rate may be reduced as reason and equity
,,,... . demand. (Marilag v. Marlinez, G.R. No. 201892,
it } 2015)
Computation of Legal Interest
The Supreme Court, applying BSP Circular 799
summarized the new rules in NACAR v. Gallery
Frames, G.R. No. 189871, 2013 in computing
legal interest:
i' .l
I. When · an obligation, regardless of its
... ... source, (i.e., law, contracts, quasi-contracts,
delicts or quasi-delicts) is breached, the
r>,
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contravenor can be held liable for damages. The
provisions under Title XVIII on "Damages" of the
Civil Code govern in determining the measure of
recoverable damages.
II. For the award of Interest In the concept of
actual and compensatory damages, the rate
~-- j of interest, as well as the accrual thereof, is
imposed, as follows:
1. Breach of obligation consisting of the payment
of a sum of money, ii.e., a loan or torbearence
of money), the interest due:
General Rule: Interest that is stipulated in
writing.
Exception: No stipulation - 6% per annum to be
r' ')
',. computed from default (i.e., from judicial or
extrajudicial demand)
The interest due shall itself earn legal interest
from the time it is judicially demanded.
2. When an obligation, NOT constituting a loan
or forbearance of money, is breached, 8!1
interest on the amount of damages awarded
may be imposed at the discretion of the court, at
the rate of 6% per annum.
No interest, however, shall be adjudged on
unliquidated claims or damages except when or
until the demand can be established with
reasonable certainty.
,)
Where the demand is established with
reasonable certainty, the Interest shall begin to
CIVIL LAW
run from the time the claim is made judiclally or
extrajudicially.
But when such certainty cannot be so
reasonably established at the time the demand
is made, the interest shall begin to run only from
the date the judgment of the court Is made (at
which time the quantification of damages may be
deemed to have been reasonably ascertained).
The actual base for the computation of legal
interest shall, in any case, be on the amount
finally adjudged.
Forbearance of money, goods, or credit refers to
arrangements other than loan agreements
where a person acquiesces to the temporary use
of his money, goods or credits pending the
•
happening of certain events or fulfillment of
certain conditions such that if these conditions
are breached, the said person is entitled not only
to the return of the principal amount given, but
also to compensation for the use of his money
equivalent to the legal Interest since the use or
deprivation of funds is akin to a loan. In a case,
SC held that the liability of the debtor is not in
the nature of a forbearance of money as it does
not involve the temporary use of money, goods
or credits, but rather the performance of a
particular service. ,:. i.e., the performance of
additional works cohsisting of site development,
additional structural; architectural, plumbing, and •
electrical works Therefore, the rate of legal
interest imposable is 6% per annum (WT
Construction, Inc. V. Province of Cebu G.R. No.
208984, 2015)
3. When the judgment of the court awarding a
sum of money becomes final and executory, the
rate of legal interest, whether the case falls
under a forbearance or non-forbearance of
money, the rate shall be 6% per annum from
such finality until Its satisfaction, this interim.
period being deemed to be by then an
equivalent to a forbearance of credit.
The computation of the amount due from loans
or forbearance· of money must take into
consideration the legal rate or rates applicable
throughout the duration of the period in which
interest runs.
Any modification of stipulated interest · (e.g.
allowing the creditor to unilaterally increase or
decrease the interest rate at any time) must be
mutually agreed upon, otherwise, It has no
binding effect. F,urther, a borrower may not be
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required to prepay the loan If he is not agreeable
to the arbitrary interest rates being imposed. MONETARY COMPENSATORY
(Spouses Silos v. PNB, G.R. No. 181045, 2014) INTEREST INTEREST
Compensation fixed . Interest imposed by
While it is true that the interest ceilings set by by the parties for the law or by courts as
the Usury Law are no longer in force, it has been use or forbearance penalty or indemnity
held that PD 1684 and CB Circular 905 merely of money. for damages for
allow contracting parties to stipulate freely on breach of
any adjustment in the interest rate on a loan by contractual
forbearance of money but do not authorize a obliaations.
unilateral increase of the interest rate by one No interest shall be If the obligation
party without the other's consent (PNB v. CA, due unless it has consists in the •
G.R. No. L-26001, 1968). To say otherwise will been expressly payment of money,
violate the principle of mutuality of contracts stipulated in. writirig and the debtor
under Article 1308 of the CC. To be valid, • (Art. 1956). :i incurs delay, the
therefore, any change of' interest must be indemnity of
mutually agreed upon by the parties (Dizon v. damages, there
Magsaysay, G.R. No. L-23399, 1974 being no stipulation
to the contrary, shall
In a loan agreement, compounding of interest be the payment of
has to be in writing to be valid. Payment of the interest agreed
monetary interest shall be due only if: (1) there upon, and in the
was an express stipulation for the payment of absence of
interest; and (2) the agreement for such stipulation, the legal
payment was in writing. The first requirement interest, which is 6%
does not only entail reducing in writing the p.a. (Art. 2209)
interest rate to be earned but also the manner of Interest due shall
earning the same, if it is to be compounded. earn legal interest
(Albos v. Embisan, G.~. No. 210831, 2014) from the time it is
judicially demanded,

L
A contract of loan with usurious interest in although the
violation of the Usury Law is valid as to the loan qbligation may be
but void as to the usurious interest. The principal silent upon this
debt remaining with stipulation for payment of .~~~-~---1wP~o~in~t.~(~A~rt.~2.2~1~2J:....___,
interest can thus be recovered. In case of (Siga-an v. Villanueva, 596 Phil. 760, 769 (2009))
judicial or extrajudicial demand, and the debtor
incurs in delay, the debt earns legal interest from ------~- end of topic--------
the date of the demand. Such interest is not due
to stipulation, for there was none, the same
being void. Rather, it is due to the general
provision of law that in oblig~tions to pay money,
where the debtor Incurs in delay, he has to pay
interest by way of damages (Art. 2209, Civil
Code)

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B. DEPOSIT BASIS JUDICIAL EXTRA
JUDICIAL
Deposit Is constituted from the moment a
Creation Will pt the court Wiii of the
; contracting
person receives a thing belonging to another,
oarties
with the obligation of safely keeping it and of
Purpose Security or to Custody and
returning the same (Art. 196.2).
ensure the right safekeeping
of a party to the
NOTE: Safekeeping must be the principal
property or to
purpose of the contract. Otherwise, it is not a
recover in case
deposit.
of favorable
iudament
Characteristics
Subject Generally Movables only
1. Real - because it is perfected only by
Matter immovables
the delivery of the subject matter
Cause Always onerous May be
BUT: An agreement to constitute a
compensated
deposit is binding and enforceable,
r ·1 but generally
•
' . since it Is merely consensual
aratuitous
~
,-- .: 2. Unilateral - if gratuitous Return of Upon order of Upon demand
.....·
.l
3. Bilateral - if with compensation thing the court I end of depositor
of litiaation
t .... f Creation of deposit (Art. 1964) In whose Person who has Depositor or I
1. By virtue of a court order; or behalf it is a right 3rd person
2. By law ~ designateE!..__
3. By the will of the parties
:~·-, ; Subject Matter of Deposit (Art. 1966)
Kinds of Deposit General rule; Only movable or personal
1. Judicial - when an attachment or property may be the object of deposit (whether
seizure of property in litigation is ordered voluntary or necessary); however, deposit does
2. Extrajudicial (Art. 1967) not inclu~e incorporeal/Intangible property, •
a. Voluntary - delivery is made by such as nghts and actions, for it follows the
the will of the depositor or by owner, wherever he goes and not susceptible of
two or more persons each of •
w~~ . . .
whom believes himself entitled
to the thing deposited Exception: In judicial deposit, it may cover both
b. Necessary made in movable and lm~ovable property
D compliance with a legal
obligation, or on the occasion of General rule: The depositor must be the owner
( of the thing deposited
'
..... t . any calamity, or by travelers in
hotels and inns or by travelers
with common carriers. There is Exceptions: It may belong to another person
lack of free choice in the than the depositor ,i
depositor. 1. When two 6r more persons claiming to
be entitled to a thing may deposit the
, I General Rule: A deposit is generally gratuitous same with a' third person. In such case,
(Art. 1965). the third person assumes the obligation
Exceptions: (JESS) to deliver to the one to whom it belongs.
1. When there is a contrary .§tipulation 2. lnterpleader - the action to compel the
2. Where depositary is · gngaged in the depositors to settle their conflicting
business of storing goods claims. Here, one of the depositors is
3. Where property is Saved from not the owner.
. \ destruction without knowiedge of the
owner
4. .Judicial deposit

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Form of Contract of Deposit Preference Depositor has Thing loaned

General rule: A contract of deposit may be of credit preference enjoys no
entered Into (but not perfected) orally or in over other preference In
writing (Art. 1969) creditors with the distribution
respect to of the debtor's
However: Delivery of the thing deposited is thin de osited
needed for perfection.
Obligations of the Depositary
· · DEPOSITARY DEPOSITARY 1. Safekeeping of the object
'· CAPACITATED I INCAPACITATED { 2. Return of the thing when depositor
, . DEPOSITOR DEPOSITOR claims it
. INCAPACITATED CAPACITATED 3. Not to transferdeposit
Depositary is subject Depositary does not 4. Not to change the way of deposit •
to ALL the obligations incur the obligations of 5. To collect on the choses in action
of a deoositarv a depositary deposited
Depositary must return Depositary, however, 6. Not to commingle things If so stipulated
the property either to: is liable to: 7. Not to make use of the things so
a) The legal a) Return the thing deposited
representative of the deposited while still 8. Liability for loss through fortuitous event
incapacitated, OR in his possession; 9. Obligation when the thing is closed and
b) The depositor AND sealed
himself if he should b) Pay the depositor 10. To return products, accessories and
acquire capacity the amount by w/c accessions
he may have 11. To pay interest on sums converted to.
benefited himself w/ personal use
the thing or its price 12. Cannot require that the depositor prove
subject to the right his ownership over the thing
of any 3•d person 13. Obligation when third person appears to
who acquires the be the owner
thina in oocd faith 14. Obligation when there are two or more
depositors
If the thing deposited is money or other 15. To return tq the person to whom return
consumable thing, the permission to use it will must be ma'de
result in its consumption and converts the 16. To return upon the time of return
contract into a simple loan or mutuum. However, 17. To return th~ thing deposited
if safekeeping is still the principal purpose of the 18. Liability in case of loss by force majeure
contract, it is still a deposit but an Irregular one; or government order
hence, an Irregular Deposit. Example: Bank 19. Liability in case of alienation of
deposit (De Leon) depositary's heir

BASIS IRREGULAR MUTUUM Two primary obligations (Art, 1972)

DEPOSIT 1. Safekeeping of the object
Demandable at Lender is Degree of Care - same diligence as he
will of the bound by the would exercise over his property (ordinary
irregular provisions of diligence/diligence of a good father).
Demand· depositor for the contract Reasons:
ability whose benefit and cannot a. Essential requisite,of judicial relation
the deposit has seek restitution which involves the depositor's
been until the time of confidence in his good faith and
constituted payment as trustworthiness.
provided in the b. The presumption that the depositor
contract has took into account the diligence
arisen which the depositary is accustomed
Benefit Benefit If with Interest, with respect to his own property.
accrues to the benefit of both
depositor parties
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NOTE: The depositary cannot excuse
C) himself from liability, in the event of loss, by
claiming that he exercised the same amount
of care toward the thing deposited as he
would towards his own if such care is less
/:'""'\
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. than that required by the circumstances.
2. Return of the thing when depositor
claims it
Even though a specified term or time for
such may have been stipulated in the
contract.
.,.~ ....
I f
=~ Obligation not to Transfer deposit (Art. 1973)
General rule: The depositary Is not allowed to
deposit the thing with a third person.
.• . 2. Take such steps as may be
( i
·~.. ' Reason: A deposit is founded on trust and ~
confidence and it can be supposed that the
depositor, in choosing the depositary, has taken
.(-'P,
into consideration the latter's qualification
L_I
Exception: The depositary is authorized by
express stipulation
Liabilities: Depositary is liable for loss of the
thing deposited when:
1. He transfers the deposit with a third person
without being authorized to do so although
there is no negligence on his part and the
third person;
2. He deposits the thing with a third person
who is manifestly careless or unfit although
authorized, even in the absence of
negligence; or
3. The tt1ing is lost through the negligence of
his employees whether the latter are
manifestly careless or not.
Exemption from liability: The thing is lost
without the negligence of the third person with
whom he was allowed to 'deposit the thing if
such third person is not "manifestly careless or
unfit" (i.e., minor).
Obligation not to change the way of deposit
General rule: Depositary may not change the
way of the deposit. (Art. 1974)
Exception: If there are circumstances indicating
that the depositor would consent to the change.
This is a situation wherein the depositary would
reasonably presume that the depositor would
agree to the change if he knows of the facts of
the situation (Art. 1974)
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CIVIL LAW
Requisites:
1. The depositary must notify the depositor of
such change; and
2. Must wait for the reply of the depositor to
such change.
NOTE: These requisites may not be dispensed
with unless delay would cause danger.
Obligation to Collect Interest on the choses
in action deposited (Art. 1975)
• ff the. thing deposited should earn
interest, the depositary is under the
obligation to:
1. Collect the interest as it
becomes due.
necessary to preserve· its value
•
and the right corresponding to it.
• The depositary is bound to collect the
capital, as well as the interest, when
due.
NOTE: The obligation to collect in the choses in
action does not apply to contracts for the rent of
safety deposit boxes.
Contract of rent of safety deposit boxes (Art.
1975)
• A contract for the rent of safety deposit
boxes is not an ordinary contract of
•
lease of things, but a special kind oJ
deposit; hence, it is not to be strictly
governed by the provisions on deposit.
• The prevailing rule in the US is that the
relation between a bank renting out
safety deposit boxes and its customer
with respect to the contents of the box is
that of bailer and bailee.
Obligation not to Commingle things if so
stipulated (Art. 1976)
General rule: The depositary is permitted to
commingle grain or other articles of the same
kind and quality
Effects:
1. The various depositors of the mingled
goods shall own the entire mass in
common
2. Each depositor shall be entitled to such
portion of the entire mass as the amount
deposited by him bears the whole
Exception: When there is a stipulation to the
contrary
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Obligation not to make Use of the things
depo1lt1d (Art. 19'T'T)
General rule: Deposit is for safekeeping of the
subject matter and not for its use
Exceptions:
1. Expressly authorized by the depositor
2. Such use is necessary for its preservation
but limited for the purpose only
a. Effect of unauthorized use: Liability
for damages
b. Effects of authorized use: (Art.
1978)
If the thing deposited Is non-consumable:
General rule: The contract loses the character
of a deposit and acquires that of a commodatum,
despite the fact that the parties may have
denominated It as a deposit
Exception: Safekeeping is still the principal
purpose of the contract
If the thing deposited is money or other
consumable thing:
General rule: Converts the contract into a
simple loan or mutuum
Exception: Safekeeping is still the principal
purpose of the contract, but it becomes an
irrequler deposit. Bank deposits are in the
nature of irregular deposits but they are really
loans governed by the law on loans.
Liabillty for Loss through fortuitous event
(Art. 1979)
General rule: Depositary is not liable for loss
through fortuitous event without his fault (Art.
1174)
Exceptions: (USDA)
a. If it is so ~tipulated
b. If he _!!ses the thing without the depositor's
permission
c. If he .Qelays in its return
d. ff he ,Allows others to use it, even though he
himself may have been authorized to use
the same
NOTE: Liability for loss without fortuitous event:
Depositary presumed at fault since he is In
possession (Art. 1265)
Relation between bank and depositor (Art.
1980)
CIVIL LAW
•
Fixed, savings, and current deposits of money in
banks and similar institutions shall be governed
by the r,rovlalons concerning almple loin
a. Contract of loan - deposits in bMks are
really loans be.cause the bank can use the
same for its or9,lnary transactions
b. Relation of cfreditor and debtor - the
relation between a depositor and a bank is
that of a credll~f and a debtor.
Obligation when the thing deposited is
Closed and Sealed (Art. 1981) •
The depositary has the obligation to:
a. Return the thing deposited when delivered
closed and sealed In the same condition.
b. Pay for damages should the seal or lock be
broken through his fault, which is presumed
unless proven otherwise.
c. Keep the secret of the deposit when the seal
or lock is broken, with or without his fault.
When depositary Justified in opening closed
and sealed subject matter (Art. 1982):
a. The depositary is presumed authorized to do
so if the key has been delivered to him.
b. When the lnstructlons of the depositor as
regards the deposit cannot be executed
without opening the box or receptacle
(Necessity).
Where Third person appears to be the owner
(Art. 1984)
The depositary may be relieved from liability
when:
a. He advised the true owner of the thing of the
deposit .
b. If the owner, in spite of such information,
does not claim it within the period of one
month (30 days), and the depositary returns
the thing deposited to the depositor.
Obligation of the depositary when there are
two or more depositors (Art. 1985)
a. Divisible thing and joint depositors - each
one of the depositors can demand only his
share proportio'lpte thereto
General rule: 'Each one of the depositors
may do whatever may be useful to the
others (Art. 121 ?)
Exception: Anything w/c may be prejudicial
to the other depositors
b. Indivisible thing or solidary depositors -
rules on active solidarity
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General rule: The depositary may return
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the thing to any one of the solidary
depositors
Exception: When a demand, judicial or
extrajudicial, for its return has been made
. by one of them in which case delivery
·~' ;
should be made to him
,,~··" '-,'
" ;
c. Return to one of the depositors stipulated
If by stipulation, the thing should be
f .. -~ returned to one of the depositors, the
'. I
depositary is bound to return it only to the
person designated, although he has not
made any demand for its return
Obligation to Return to the person to whom
return must be made (Art. 1986)
a. The depositary is obliged to return the thing
deposited, when required, to:
i. The depositor;
ii. To his heirs or successors; or
:[) iii. To the person who may have
been designated In the contract.
b. If the depositor was incapacitated at the time
of making the deposit, the property must be
returned to:
i. His guardian or administrator
'
. . ii. To the person who made the
deposit
iii. To the depositor himself should
n
·•.....
he acquire capacity
c. Even if the . depositor had capacity at' the •
time of making the deposit, but he
subsequently loses his capacity during the
deposit, the thing must be returned to hls
legal representative.
Obligation to return at the Place of return
General rule: At the place agreed upon by the
parties, transportation expenses shall be borne
by the depositor (Art. 1987)
Exception: In the absence of stipulation, at the
place where the thing deposited might be even if
it should not be the same place where the
original deposit was made
NOTE: Same as the general rule of law
'~.. .. : regarding the place of payment (Art. 1251)
Obligation to return upon the Time of return
(Art. 1988)
General rule: The thing deposited must be
returned to the depositor upon demand, even
,. though a specified period or time for such return
'
'-·. may have been fixed
..._ .''4·"
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CIVIL LAW
Exceptions:
a. When the thing is judicially attached while in
tne depositary's poHesslon
b. When notified of the opposition of a third
person to the return or the removal of the
thing deposited
Right of the depositary to return the Thing
deposited (Art. 1989)
NOTE: In this case, it is the depositary returning
the deposit with or without the demand of the
depositor.
General rule: The depositary may return the
thing deposited, notwithstanding that a period
has been fixed for the deposit, if: •
a. The deposit is gratuitous
b. The reason Is justifiable
• Remedy if depositor refuses to receive
the thing: The depositary may deposit
the thing at the disposal of the judicial
authority.
Exception: When the deposit is for a valuable
consideration, the depositary has no right to
return the thing before the expiration of the time
designated even if he
inconvenience as a consequence .
should suffer
•
Depositary's liabihty in case of Loss by force
majeure or government order (Art: 1990) •
Depositary is not liable in cases of loss by force
majeure or by government order. However, he
has the duty to deliver to the depositor money or
another thing he receives in place of the thing.
Liability In case of alienation by the
depositary's Heir (Art. 1991)
• When alienation is done in good faith:
a. Return the value of the thing deposited
b. Assign the right to collect from the buyer
• The heir does not need to pay the actual
price of the thing deposited.
• When alienation is done in BAD FAITH:
a. Liable for damages
b. Pay the actual price of the thing
deposited
Depositary may Retain the thing in pledge
until the full payment of what may be due
him by reason of the deposit (Art. 1994)
The thing retained serves as security for the
payment of what may be due to the depositary
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 ATENEO CENTRAL
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by reason of the deposit (see Arts. 1965, 1992 &
1993).
Obligations .of the Depositor (Pl.D)
1. Obligation to fay expenses of preservation
(Art. 1992)
Applies only when the deposit is gratuitous
2. Obligation to pay .!:asses incurred due to
character of thing deposited (Art. 1993)
General rule: The depositary must be
reimbursed for loss suffered by .him
because of the character of the thing
deposited.
Exceptions:
a. Depositor was not aware of the danger.
b. Depositor was not expected to know
the dangerous character of the thing.
c. Depositor notified the depositary of
such dangerous character.
d. Depositary was aware of the danger
without advice from the depositor.
3. Effect of Death of depositor or depositary
(Art. 1995)
a. Deposit gratuitous - death of either of
the depositor or depositary extinguishes
the deposit (personal in nature). By the
word "extinguished," the law really
means that the depositary is not obliged
to continue with the contract of deposit.
b. Deposit for compensation not
extinguished by the death of either
party
Extlngulshment of Deposit
1. Upon the loss or deterioration of the thing
deposited;
2. Upon the death of the depositary, only in
gratuitous deposits;
3. Other provisions in the Civil Code (novation,
merger, etc.)
Extrajudicial Deposit: Necessary Deposit
When deposit is Necessary: (PLCT)
1. It is made in compliance with a !:egal
obligation
2. It takes place on the occasion of any
Qalamity, such as fire, storm, flood, pillage,
shipwreck, or other similar events
• There must be a causal relation
between the calamity and the
constitution of the deposit.
3. Made by f_assengers with common carriers
CIVIL LAW
•As to baggage the passengers or their
agents carry
4. Made by Iravelers in hotels or inns (Art.
1998)
• Before keepers of hotels or Inns may be
held responsible as deposltaries with
regard to the effects of their guests, the
following must concur:
Elements:
a. They have been previously informed about •
the effects ~rought by the guests; and
• • Is notification required before the
common carrier becomes liable for lost
belongings that remained in the custody
of the passenger? NO. ·
Actual delivery of the goods to the
innkeepers. , or their employees is
unnecessary before liability could attach
to the hotelkeepers in the event of loss
of personal. belongings of their guests
considering'. that the personal effects
were inside 'the hotel 6r inn because the
hotelkeeper shall remain accountable.
Accordingly, actual notification was not
necessary to render the petitioner as the
common carrier liable for the lost
personal belongings of Sesante. By
allowing him to board the vessel with his
belongings without any protest, the
petitioner became sufficiently notified of
such belongings. So long as the
belongings were brought inside the
premises of the vessel, the petitioner
was thereby effectively notified and
consequently duty-bound to observe the
required diligence in ensuring the safety
of the belongings during the voyage.
Applying Article 2000 of the Civil Code,
the petitioner assumed the liability for
loss of the belongings caused by the
negligence of its officers'or crew. In view
of our finding that the negligence of the
officers and crew of the petitioner was
the immediate and proximate cause of
the sinking of the MN Princess of the
Orient, Its llablllty for Sesante's lost
personal belongings was be)'ohd
question. (Sulpicio Lines v. Sesante,
2016)
b. The latter have taken the precautions
prescribed regarding their safekeeping.
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o
( ·,
Extent of liability:
·. ,I a. Liability in hotel rooms which come under Hotel-keeper's· right to retain
the term "baggage" or articles such as The hotel-keeper has a right to retain the things
clothing as are ordinarily used by travelers brought into the hotel by the guest, as a security
b. Include those lost or damages in hotel for credits on account of:
annexes such as vehicles in the hotel's a. Lodging \
() garage. b. Supplies usually furnished to hotel guests
~.,..... ,' • When the traveler avails of the valet \..
'.:., J
service of hotels. The contract of deposit Reason: It is given to hotel-keepers to
is perfected from the traveler's delivery compensate them for the liabilities imposed
,r -J
t. of the keys to the vehicle to the hotel, upon them by law. The right of retention
who has the obligation to safely keep recognized in this Article is in the nature of a
and return it to the owner. Loss of the pledge created by operation of law.
vehicle on the hotel's premises or • in compliance with a legal obligation
annexes may give rise to a claim of (governed by the law establishing it, and In
damages (Durban Apartments v. case of deficiency, the rules on voluntary
•..r ', Pioneer Insurance, G.R. No. 179419, ' deposit e.g. Aris. 538, 586 and 2104).
·~ . 2011 ). • Made on the occasion of any calamity
';r-· \ (governed by the rules on voluntary deposit
L. When hotelkeeper liable: (Arts. 2000 - 2002) and Art. 2168).
{".
NOTE: In the following cases, the hotel-keeper
~! is liable regardless of the amount of care Sequestration or judicial deposit
exercised: When judicial deposit takes place: When an
r»:
'.: r a. The loss or injury to personal property is attachment or seizure of property in litigation is
"'·~ . caused by his servants or employees as well ordered by a court. (Art. 2005)
as by strangers (Art. 2000)
b. The loss is caused by the act of a thief or Nature: Auxiliary to a case pending in court.
robber done without the use of arms or
irresistible force (Id., Art. 2001) Purpose: To maintain the status quo during the •
,-,
". __ ! Reason: Hotelkeeper is apparently negligent.
pendency of the litigation or to insure the right of
the parties to the property in case of a favorable
judgment
When hotelkeeper not liable:
a. The loss or injury is caused by force Depositary of sequestered proporty: person
/" majeure, like flood, fire, theft or robbery by a
·; I appointed by the court. (Ari. 2007)
'. stranger (not the hotel-keeper's servant or Obligations:
employee) with the use of firearms or 1. To take care of the property with the
irresistible force diligence of ~ good father of the family. (Art.
,' i
Exception: Unless the hotel-keeper is guilty 2008)
~t • ~ I of fault or negligence in failing to provide 2. He may not be relieved of his responsibility
,;,,· -. against the loss or injury from his cause until the litigation is ended or the court so ·
!,_, b. The loss is due to the acts of the guests, his orders. (Art. 2007) ·
family, servants, visitors
c. The loss arises from the character of the Applicable law: The law on judicial deposit is
things brought into the hotel remedial or procedural in nature. Hence, the
r .
.
,., ;. Exemption or diminution of liability:
Rules of Court are appllcable. (Art. 2009)
!1~-i
,· The hotelkeeper cannot free himself from
......\ , ..,· responsibility by posting notices to the effect that
he is not liable for the articles brought by the
guest (Ari. 2003)

Effect: Any stipulation between the hotel-keeper

and the guest whereby the responsibility of the
former (as set forth in Aris. 1998-2001) is
"·' suppressed or diminished shall be void.
Page. 297 of 432
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C. GUARANTY AND SURETYSHIP

BASIS JUDICIAL EXTRAJUDICI
DEPOSIT . .· AL DEPOSIT A. NATURE AND EXTENT OF GUARANTY
Cause or By will of the By will of the
origin courts parties. Hence, Guaranty - By guaranty, a person called the
there is a guarantor, binds himself to the creditor, to fulfill
contract the obligation of the principal debtor In case .the
Purpose Security; Custody; latter should fail to do so. It is a contract
Secure the Safekeeping of between the guarantor and the creditor. (Art.
right of a party the thing 2047) •
to recover in
case of
favorable
. Characteristics of the contract
1. Accessory - dependent for its existence
ludament. upon the principal obligatlon guaranteed by
-· Subject Either movable Only movable it hence if principal contract is void, then
Matter or Immovable property guaranty is also void
!
property but
generally, 2. Subsidiary and Conditional - takes effect
immovable only when the principal debtor falls in his
Remunerati Always Generally obligation subject to limitation
on remunerated gratuitous, but
(onerous) may be 3. Unilateral -
compensated a. It gives rise only to a duty on the part of
In whose In behalf of the In behalf of the the guarantor in relation to the creditor
behalf it is person who, by depositor or and not vice versa
held the judgment, third person b. It may be entered into even without the
has a riqht desiqnated intervention of the principal debtor.

-·-·· end of topic --···-- 4. Distinct Person - a person cannot be the

personal guarantor of himself
• The liability of a guarantor is only
subsidiary, and all the properties of the
principal debtor must first be exhausted
before the guarantor may be held
answerable, for the debt. Thus, the
creditor may hold the guarantor liable
only after j!,1dgment has been obtained
against the; principal debtor and the
latter is u11able to pay. (Aglibot vs.
Santia, G.R. No. 185945, 2012)

Cause of Contract of Guaranty

1. Presence of cause which supports
prlnclpal obligation: Cause of the contract
is the same cause which supports the
obligation as to the princlpal debtor. The
consideration which supports the obligation
as to the principal debtor is a sufficient
consideration to support the obligation of a
guarantor or surety.

2. Absence of direct consideration or

benefit to guarantor: Guaranty or surety
agreement is regarded valid despite the

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absence of any direct consideration received impliedly recognizes his liability, thereby
by the guarantor or surety, such transfotming the obligation from a
consideration need not pass directly to the natural into a civil one.
·, ·, ,
(
guarantor or surety; a consideration moving
Guaranty of Future Debts (Art. 2053)
to the principal will suffice.
Continuing Guaranty or Suretyshlp:
1. Not limited ,to a single transaction but which
B. EFFECTS OF GUARANTY contemplates a future course of dealings,
{-') covering a series of transactions generally
Married woman as Guarantor (Art. 2049) for an indefinite time or until revoked.
General rule: Married woman binds only her 2. It is prospective in its operation and is
separate property generally intended to provide security with
respect to future transactions.
Except.ions: 3. Future debts, even if the amount is not yet
~ •. 1. With her husband's consent, binds the known, may be guaranteed but there can be
community or conjugal partnership property no claim against the guarantor until the •
~" 2. Without husband's consent, in cases amount of the debt is ascertained or fixed
:, j and demandable.
provided by law, such as when the
r" • guaranty has redounded to the benefit of the
:I
·..:.. ,'
I
family Examples: ,,
a. To secure tl;1e · payment of a loan at
Guaranty Undertaken Without Knowledge of maturity - guarantee of the punctual
Debtor (Art. 2050) payment of a loan at maturity and all other
{· Rights of third persons who pay: obligations of indebtedness
,,~. I

1. Payment without the knowledge or b. To secure payment of any debt to be

against the will of the debtor:
a. Guarantor can recover only insofar as
the payment has been beneficial to the
debtor (Art. 1236)
b. Guarantor cannot compel the creditor to
subrogate him in his rights (Art. 1237)
2. Payment with knowledge or consent of
,,~· the debtor: Subrogated to all the rights
which the creditor had against the debtor
(Art. 2067)
0 .. Double or Sub-Guaranty (Art. 2051(2))
i,~ •• '
One constituted to guarantee the obligation of a
guarantor. It should not be confounded with
guaranty wherein several guarantors concur.
Guaranty of Voidable, Unenforceable, And
Natural Obligations (Art. 2052(2))
A guaranty may secure the performance of:
1. Voidable contract - such contract is
binding, unless it is annulled by a proper
"'"·-· court action
2. Unenforceable contract - because such
contract is not void
3. Natural obligation - the creditor may
proceed against the guarantor although he
has no right of action against the principal
debtor for the reason that the latter's
obligation is not civilly enforceable.
t • When the debtor himself offers a
1
.. ,;
guaranty for his natural obligation, he
l
l ...
' Page 299 of 432
subsequently incurred -construed as
continuing when it is evident from the terms
that the object is to give a standing credit to
the principal debtor to be used from time to •
time either Indefinitely or until a certain
period, especially if the right to recall thl!
guaranty is expressly reserved.
Guaranty of Conditional Obllgatlons
A guaranty may secure all kinds of obligations,
be they pure or subject to a suspensive or
resolutory condition.
1. Principal obligation subject to a
suspenslve condltlon - the guarantor is
liable only after the fulfillment of the.
condition.
2. Principal ;obligation subject to a
resolutory condition - the happening of
the condition extinguishes both the principal
obligation and the guaranty
Guarantor's .Liability Cannot Exceed
Principal Obligation (Art. 2054)
General rule: Guaranty is a subsidiary and
accessory contract - guarantor cannot bind
himself for more than the principal debtor, both
as regards the amount and the onerous nature
of contract
• If he does; his liability shall be reduced to
the limits of that of the debtor.

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• But the guarantor may bind himself for
less than that of the principal.
Exceptions:
1. Interest, judicial costs, and attorney's
fees as part of damages may be
recovered - creditors may recover from the
surety as part of their damages the
abovementioned fees even without
stipulation and even if the surety would
thereby become liable to pay more than the
total amount stipulated in the bond.
Reason: Surety is made to pay, not by
reason of the contract, but by reason of his
fallure to pay when demanded and for
having compelled the creditor to resort
to th~ courts to obtain payment.
Interest runs from (demand):
a. Filing of the complaint (upon judicial
demand); or
b. The time demand was made upon the
surety until the principal obligation is
fully paid (upon extra-judicial demand)
2. Penalty may be provided - surety may be
held liable for the penalty provided for in a
bond for violation of the condition therein.
Guaranty Strictly Construed
Strictly construed against the creditor in favor
of the guarantor and is not to be extended
beyond its terms or specified limits. Doubt in the
terms and conditions of the guaranty or
suretyship agreement should be resolved in
favor of the guarantor or surety.
1. Liability for obligation stipulated -
guarantor is not liable for obligations
assumed previous to the execution of the •
guaranty unless an intent to be so liable is
clearly indicated. •
2. Liability· of surety limited to a fixed period
- the surety must only be bound in the
manner and to! the extent, and under the
circumstances which are set forth or which
may be Inferred from the cotitract of
guaranty or suretyshlp, and no further.
3. Liability of surety to expire on ·maturity of
principal obligation - such stipulation Is
unfair and unreasonable for it practically
nullifies the nature of the undertaking it had·
assumed.
Remedy of surety: Foreclose the counter-bond
put up by the principal debtor (if there is any)

Principal's Liability May Exceed Guarantor's liability depends upon Assumes liability as a
Obligations an independent regular party to the
The amount specified in a surety bond as the agreement to pay the undertaking
surety's obligation does not limit the extent of the obligation if the
damages that may be recovered from the principal debtor fails
principal, the latter's liability being governed by to do so
the obligations he assumed under his contract. Engagement is a Charged as an original
collateral undertakln romisor
-~~~----t-'---~~~~........_~--1
Guaranty Not Presumed (Art. 2055) Secondarily liable - Primarily liable
The assumption of guaranty must be he contracts to pay if, undertakes directly for
expressed. It cannot extend to more than what by the use of due the payment without
is stipulated therein. diligence, the . debt reference to the
cannot be paid solvency of the
Guaranty Covered by the Statute Of Frauds principal, and is so
• Guaranty must not only be expressed but responsible at once
must so be reduced into writing. the latter makes
• Hence, it shall be unenforceable by action, default, without any
unless the same or some note or demand by the creditor
memorandum thereof be in writing, and upon the principal
subscribed by the party charged, or by his whatsoever or any
agent; evidence, therefore, of the agreement notice of default
cannot be received without the writing, or a Only binds himsel(Ao Undertakes to pay if
secondary evidence of its contents. pay If the principal the principal does not
(Macondray & Co., Inc. v. Pinon, G.R. No. L- cannot or is unable.to pay, without regard to
13817, 1961) a his abilit to do so
• It need not appear in a public document. Insurer of the Insurer of the debt
solvenc of the debtor
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( .,' BAR OPERATIONS 2019 CIVIL LAW
r) Does not contract that Pay the creditor He is not bound to substitute the guarantor.
the principal will pay, without qualification (Estate of Hemady v. Luzon Surety, G.R. No. L·
but simply that he Is if the principal debtor 8437, 1956)
abte to do so does not pay. Hence,
the responsibility or Selection of Guarantor
obligation assumed by 1. Specified person stipulated as guarantor:
the surety is greater or Substitution of guarantor may not be
more onerous than demanded
C1 that of a guarantor Reason: The selection of the guarantor is:
Guarantor can avail of Surety cannot avail the a. A term of the agreement;
the benefit of benefit of excussion b. As a party, the creditor is. therefore,
excussion and division and division. bound thereby.
in case the creditor
proceeds aaainst him. 2. Guarantor selected by the principal
Not bound to take Held to know every debtor: Debtor answers for the integrity, •
notice of the non- default of the principal. capacity, and solvency of the guarantor.
,,. .
~.. ;I I p~rfo_rmance
principle
of the
3. Guarantor personally designated by the
creditor: Responsibility for the selection
r: ~. should fall upon the creditor because he
Qualifications of an Individual Guarantor considered the guarantor to have the
(Arts.2056-2057) (CSI) qualifications for the purpose.
1. He possesses !ntegrity
.(··.\ 2. He has the f apacity to bind himself Right of Guarantor to Benefit Of Excussion
3. He has ~ufficient property to answer for the Or Exhaustion (Arl. 2058)
obligation which he guarantees 1. Guarantor only secondarily liable -
·~- guarantor binds himself to pay only in case
Exception: When the creditor waives the the principal debtor should fail to do so. If •
requirements. the principal debtor fulfills the obligation
guarante_ed, the guarantor is. dischargeGI
Effect of Subsequent Loss of Requ'ired • from any responsibility.
Qualifications
The qualifications need only be present at the 2. All legal remedies against the debtor to
time of the perfection of the contract. The be first exhausted - to warrant recourse
.....··.
subsequent loss of the qualifications would _n~t against the gu11rantor for payment, it may
,,_.·
' ' extinguish the liability of the guarantor, nor w11/ 1t not be sufficie'nt that the debtor appears
extinguish the contract of guaranty. insolvent. $uf}h insolvency may be
simulated. ·{~
Remedy of creditor: Demand another
,:' . guarantor with the proper qualifications. NOTE: Art. 2058 is,lnot applicable to a contract·
of suretyship.
Exception: Creditor may waive it if he chooses
i_. ji
and hold the guarantor to his bargain. Right of Creditor to secure Judgment against
Guarantor prior to exhaustion
Guarantor Convicted of a Crime Involving General rule: An ordinary personal guarantor
Dishonesty or Became lnsolvent (Art. 2057): (NOT a pledgor or mortgagor), may demand
1. Requires conviction in the first instance of a exhaustion of all the property of the debtor
crime involving dishonesty to have the right before he can be compelled to pay.
to demand another.
2. Judicial declaration of insolvency is not Exception: The creditor may secure a judgment
necessaryjn order for the creditor to have a against the guarantor, who shall be entitled to a
...}
'..,;
right to demand another guarantor. deferment of the execution of said judgment
against him, until after the properties of the
The supervening incapacity of a guarantor does principal debtor shall have been exhausted, to
not terminate the guaranty for it merely gives the
satisfy the latter's obligation.
! }
creditor the option to demand another guarantor.

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Exceptions to the Benefit of Excussion (Art.
2059) (JAWS·IS·FUN)
1. If the guarantor has expressly Waived it.
• Waiver is valid but it must be made in
express terms.
2. If he has bound himself §.olidarily with the
debtor - liability assumed that of a surety
Guarantor becomes primarily liable as a
solidary co-debtor. In effect, he
renounces in the contract itself the
benefit of exhaustion. '
3. In case of [nsolvency of the debtor -
guarantor guarantees the solvency of the
debtor
If the debtor becomes insolvent, the
liability of the guarantor as the debtor
cannot fulfill his obligation
4. When he (debtor) has ~bsconded, or cannot
be sued within the Philippines - the creditor
is not required to go after a debtor who is
hiding or cannot be sued in our courts
Exception: Debtor has left a manager or
representative
5. If it may be presumed that a judicial action
including execution on the property of the
principal debtor would not result in the
satisfaction of the obligation - if such is the
case, the guarantor can no longer require
the creditor to resort to all such remedies
against the debtor as the same would be but
a !,!seless formality. It is not necessary that
the debtor be judicially declared insolvent.
6. If he does t!ot comply with Art. 2060; In
order that the guarantor may make use of
the benefit of excussion, he must:
a. Set it up against the creditor upon the
latter's demand for payment from him;
b. Point out to the creditor:
i. Available property of the debtor -
the guarantor should facilitate the
realization of the excussion since he
is the most interested in its benefit.
ii. Within the Philippine territory -
excussion of property located
abroad would be a lengthy · and
extremely difficult proceeding and
would not conform with the purpose
of the guaranty to provide the
creditor with the means of obtaining
the fulfillment of the obligation.
•
CIVIL LAW
Sufficient to cover the amount of the
debt.
7. If he is a Judicial bondsman and sub-surety
(Art. 2084) ..... because he is soUdarilyliable.
8. Where he has given a pledge or mortgage
as a §.pecial security.
•
NOTE: Article 2062 of the Civil Code provides
that in every .action by the creditor, which must •
be against the principal debtor alone, except in
the cases mentioned in article 2059, the former
shall ask the court to notify the guarantor of the
action. The gua~antor may appear so that he
may, if he so desire, set up such defenses as
are granted him by law. The benefit of excusslon
mentioned in article 2058 shall always be
unimpaired, even if judgment should be
rendered against the principal debtor and the
guarantot in case of appearance by the latter.
Duty of Creditor to Make Prior Demand For
Payment From Guarantor (Art. 2060)
1. When demand to be made - only after
judgment on f~e debt for obviously the
exhaustion of the principal's p,.operty cannot
even begin to take place before judgment
has been obtalned,
2. Actual demand to be made - joining the
guarant_or in the suit against the principal
debtor rs not the demand intended by law.
There must be an actual demand and not
judicial demand.
Duty of The Guarantor To Set Up Benefit Of
Excussion (Art. 2060)
As soon as he Is required lo pay, guarantor must
also point out to the creditot iVallabl41 property
(not In litigation or encumbered) of the debtor
within the Philippines.
Duty of The Creditor To Resort To All Legal
Remedies (Art. 2061)
• After the guarantor has fulfilled the
conditions required for making use of the
benefit ~f exhaustion, it becomes the duty of
the creditor to exhaust all the property of the
debtor pointed out by the guarantor
• If he fails to do so, he shall suffer the loss
but only to the extent of the value of the said
property, for the insolvency of the debtor.
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• Resort to all legal remedies includes accion 2. Compromise between guarantor and the
pauliana and accion subrogatoria, among creditor benefits but does not prejudice the
others. principal debtor.
Reason: A compromise binds only the parties
Joinder of Guarantor and Principal As thereto and not third persons. Thus, it cannot
.•< r Parties Defendant prejudice the guarantor or debtor who was not
;_ I
General rule: The guarantor, not being a joint party to the compromise. But if it benefits a third
. contractor with his principal, cannot be sued person, then the compromise may bind that third
with his principal. person.
-~-
·~... )
~,
Exception: Where it would serve merely to Sub-Guarantor's :-;Right To Excussion (Art.
delay the ultimate accounting of the guarantor or 2064) i\
if no different result would be attained if the Sub-guarantor enjoys the benefit of excusslon
plaintiff were forced to institute separate actions '
()
'· .
against the principal and the guarantors.
with respect to: .
1. Principal debtorxand .I
2. Guarantor
/'"
I '
Procedure When Creditor Sues (Art. 2062)
( ·' 1. Sent against the principal - The guarantor Reason: He stands with respect to the
.r··· cannot be sued with his principal, much less guarantor on the same footing as the latter does
> f
alone, except in the cases mentioned in
'-- ' with respect to the principal debtor.
Art. 2059 where the guarantor is not entitled
<' ·,
1 I to the benefit of excussion. Benefit of Division Among Several
Guarantors (Art. 2065)
2. Notice to guarantor of the action - 1. In whose favor applicable - should there be
guarantor must be notified so that he may several guarantors of only one debtor and for the
r- -..
.;
appear, if he so desires, and set up same debt, the obligation to answer for the same
··- defenses he may want to offer is divided among all.
.c· a. Guarantor appears - voluntary •
·t.) appearance does not constitute a 2. Cannot be availed of if there are:
renunciation of his right to excussion•. a. Two or more debtors of one.debt, even if
b. Guarantor does not appear - they be bound solidarily, each with
i. He cannot set up the defenses different guarantors; or
which, by appearing are allowed to b. Two or more guarantors of the same
him by law; and debtor but for different debts
(' ii. It may no longer be possible for him c. If any of the circumstances enumerated
-~ !
to question the validity of the in Art. 2059 should take place, as would
,. . judgment rendered against the tho benefit of exhaustion of the debtor's
~! ;
'•· debtor property.
iii. But he may still invoke the benefit of
excussion 3. Extent of liability of several guarantors -
r' r joint obligation
'
·, .• J
. 3. Hearing before execution can be issued
against the guarantor - a guarantor is General rule: The obligation to answer for the
,r •
entitled to be heard before an execution can debt is divided among all of them. The
be issued against him where he is not a guarantors are not liable to the creditor beyond
!". party in the case involving his principal. the shares which they are respectively bound to
pay.
Effects of Compromise (Art. 2063)
Compromise - a contract whereby the parties, Exception: Solidarity has been expressly
by making reciprocal concessions, avoid a stipulated.
litigation or put an end to one already
commenced. Benefit of DiJislon among Several
1. Compromise between creditor and principal Guarantors: i::
debtor benefits the guarantor but does not In order that the guarantor may be entitled to the
f . prejudice him. benefit of division, it Is not required that he point
t)
out the property of hi~ co-guarantors.
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Reason: Obllgatlon of the guarantor with
respect to his co-guarantors is not subsidiary but
direct and does not depend as to its origin on the
solvency or insolvency of the latter.
Right to Indemnity or Reimbursement (Art.
2066) (DEL T)
1. !otal amount of the debt • The guarantor
has no right to demand reimbursement until
he has actually paid the debt, unless by the
terms of the contract, he is given the ;ight
before making payment.
2. _begal Interest • It is immaterial that the debt
did not earn interest for the creditor,
because the guarantor's right to legal
interest is granted by law by virtue of the
payment he has made, and is independent
of the creditor's right to claim interest which
was necessarily regulated by the stipulations
between him and the debtor.
3. gxpenses incurred by the guarantor • The
expenses referred to are only those that the
guarantor has to satisfy in accordance with
law as a consequence of the guaranty.
These expenses are limited to those
incurred by the guarantor after having
notified the debtor that payment has been
demanded of him by the creditor.
Exception: The guarantor cannot demand
for reimbursement for litigation expenses,
when such expenses are due to its failure to
fulfill its obligation to pay upon demand.
(Tuason v. Machuca, G.R. No. L-22177,
1924)
4. Qamages, if they are due.
Exceptions to Right to Indemnity or
Reimbursement
1. Where the guaranty is constituted without
the knowledge or against the will of the
principal debtor, the guarantor can recover
only insofar as the payment had been
beneficial to the debtor
2. Payment by a third person who does not
intend to be reimbursed by the debtor is
deerned to be a donation, which, however,
requires the debtor's consent. But the
payment is in any case valid as to the
creditor who has accepted it (Art. 1238)
3. Waiver
•
CIVIL LAW
Guarantor's Rlghtto Subrogation (Art. 2067)
Subrogation transfers to the person
subrogated, the credit with all the rights thereto
appertaining either'aqalnst the debtor or against
third persons, be they guarantors or possessors
of mortgages, subject to stipulation in
conventional subrogation.
1. Accrual, basis, and nature of right - right
of subrogation is necessary to enable the •
guarantor to enforce the indemnity given in
Art. 2066
a. Arises by operation of law upon
payment by the guarantor
b. It is not a contractual right
c. The guarantor is subrogated, by virtue of
the payment, to the right of the creditor,
not those of the debtor.
2. When right not available - since
subrogation is the means of effectuating the.
right of the guarantor to be reimbursed, It
cannot therefore be Invoked in those cases
where the guarantor has no right to be
reimbursed.
Effect of Payment by Guarantor Without
Notice to Debtor (Art. 2068)
• When the guarantor pays the creditor, but
the debtor has already paid the latter, then
the debtor can set up against the guarantor
the defense of previous extlngulshments of
the obllgatio~ by payment.
• Hence, gua'.rantor must notify the debtor
before maki~g payment.
Reason: The guarantor cannot be allowed,
through his own fault or negligence to prejudice
or impair the rights or interests of the debtor.
NOTE: In case of a), unenforceable contract, if
the debtor consentsto the guarantor paying, the
guarantor can seek reimbursement from the
debtor. If the debt~r did not consent to the
guarantor paying, the guarantor cannot seek
reimbursement from the guarantor.
Effect of Payment by Guarantor before
maturity (Art. 2069)
Debtor's obligation with a period
demandable only when the day fixed comes.
1. The guarantor who pays before maturity is
not entitled to reimbursement since there is
no necessity for accelerating payment.
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(~
\, ./

2. A contract of guaranty being subsidiary in Purpose: To enable the guarantor to take

character, the guarantor is not liable for the measures for the protection of his interest in
I' ~.'
' . debt before it becomes due. view of the probability that he would be called
l I
Exception: The debtor will be liable if the upon to pay the debt.
payment was made:
a. With his consent; or F{em~dy to which the Guarantor Is Entitled
,.. .. b. Subsequently ratified (express or The guarantor cannot demand reimbursement
·i 'I
... implied) by him for indemnity when he has not paid the
obligation.
Effect of Repeat Payment by the Debtor (Art.
2070) Remedies Available:
General rule: Before the guarantor pays the 1. To obtain release from the guaranty; or
creditor, he must first notify the debtor. 2. To demand security that shall protect him
• If he fails to give notice and the debtor from: •
repeats payment, the guarantor's remedy is a. Any proceedings by the creditor; and
r. to collect from the creditor b. Against the insolvency of the debtor.
'· ~ • No cause of action against the debtor for the
,,... -, return of the amount paid by him. NOTE: Guarantor's remedies are alternative. He
'• .'
;, has the right to 'choose the action to bring.
Exception: The guarantor may still claim
reimbursement from the debtor in spite of lack of Suit by Guarantor against Creditor Before
notice if the following conditions are present: Payment
a. The creditor becomes Insolvent The guarantor's or surety's action for release.-.
b. That guarantor was prevented by a can only be exercised against the principal
fortuitous event to advise the debtor of the debtor and not against the creditor.
payment ~·. .
c. The guaranty is gratuitous Reason:. The creditor cannot be compelled to •
release the guarantor before payment of his
Right of Guarantor to Proceed AgaJnst credit. Release of the guarantor imports a,:. ·
Debtor Before Payment (Art. 2071) extinction of his 'obligation to the creditor,
General rule: Guarantor has no cause of action connoting remissf on or a novation by
,,. \
against the debtor until after the former has paid subrogation which requires the creditor's assent.
·~ - '
!, I

the obligation.
':,~ •' I

Exceptions: Art. 2071 enumerates Instances

( ·1 when the guarantor may proceed against the
·..... debtor even before the payment (ITS-PAID):
c-·. ~ 1. When he is ~ued for the payment;
\: . 2. In case of Insolvency of the principal debtor;
,/ "1·
3. When the debtor has bound himself to
tJ relleve him from the guaranty within a
specified period, and this Period has
expired; -
4. When the debt has become Qemandable, by
r . reason of the expiration of the period for
'
~ .::r
payment;
, 5. After the lapse of !en (10) years, when the
' principal obligation has no fixed period for its
maturity, unless it be of such nature that It
cannot be extinguished except within a
period longer than ten years;
r ,
, I 6. If there are reasonable grounds to fear that
the principal debtor intends to ~bscond;
7. If the principal debtor is in imminent danger
of becoming [nsolvent.
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ART, 2066 ART. 2071 · Where the principal debtors are

.(RIGHT OF ·(RIGHT OF simultaneously the same persons who
· GUARANTOR TO 'GUARANTOR TO · executed the Indemnity agreement, the
!, : .REIMBURSEMENT PROCEED AGAINST position occupied by them is that of a
. · AFTER PAYMENT) . . DEBTOR EVEN principal debtor and indemnitor at the
1·' . . ' .BEFORE PAYMENT)· same, and their liability being joint and
Provides for the Provides for the several.
enforcement of the protection before he
rights of the guarantor has paid but after he The liabilities ofan insurer under the surety bond •
against the debtor has become liable - are not extinguished when the modifications in
after he has paid the gives a protective • the principal contract do not substantially or
debt - gives a right of remedy before materially alter .the prlncipal's obligations. The
action after a ment a ment surety is jointly and severally liable with its
· principal when the latter defaults from Its
Gives a right of action, Remedy given seeks obligations under the principal contract.
which, without the to obtain from the (People's Trans'-East Asia Insurance
provisions of the other guarantor "release Corporation v. Doctors of New Millennium
might be worthless from the guaranty or to Holdings, Inc., G.R;No. 172404, 2014)
1
demand a security that
shall protect him from Guarantor of a Third Person at Request of
any proceedings by Another (Art. 2072)
the creditor and from The guaralltor who guarantees the debt of an
the danger of absentee at the request of another has a right to
insolvency of the claim reimbursement, after satisfying the debt
debtor." from:
1. The person who requested him to be a
Recovery of Surety against fndemnitor (l.e., guarantor;
principal debtor) Even Before Payment 2. The debtor
1. Indemnity agreement is for the benefit of
surety - not for the benefit of the creditor Rights of the Guarantor against The Debtor
2. Indemnity agreement may be against (SICS)
actual loss as well as potentlal liability - 1. !ndemnification
such agreement is enforceable and not 2. Benefit of .§.ubrogation
violative of any public policy 3. Benefit of fomprornise
a. Indemnity against loss - indemnitor 4. Right to obtain or demand a §.ecurity under
will not be liable until the person to be (Art. 2071)
indemnified makes payment or sustains
loss Between Co-Guarantors Right to
b. Indemnity against liability Contribution of Guarantor Who Pays (Art.
indemnitor's liability arises as soon as 2073) .
the liability of the person to be Presumptton of joint liabllfty of several
indemnified has arisen without regard to guarantors when there are:
whether or not he has suffered actual 1. Two or more guarantors
loss 2. Same debtor
c. Such agreement valid - A stipulation in 3. Same debt
an indemnity agreement providing that
the indemnitor shall pay the surety as Effect: Each is bound to pay only his
soon as the latter becomes liable to proportionate share.
make payment to the creditor under the
terms of the bond, regardless of whether Art. 2073 is appllcabte:
the surety has made payment actually or 1. When one guarantor has paid the debt to
not, is valid and enforceable, and in the creditor; ·
accordance therewith, the surety may 2. Payment by such guarantor must have been
demand from the indemnitor even made:
before the creditor has paid.
( Page 306 of 432
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a. By virtue of a judicial demand (benefit of
division must have ceased); or Exception: The buaranty itself may be directly
b. Because the principal debtor is extinguished althpuqh the principal obligation
insolvent; still remains suchas In the case of the release
3. Guarantor who paid is seeking of the guarantor made by the creditor.
f '· reimbursement from each of his co- \
t J guarantors the share which is Material Alteratlon of Principal Contract
proportionately owing him. Any agreement between the creditor and the
principal debtor which essentially varies the
Effect of Insolvency of any Guarantor terms of the principal contract without the
Follow the rule on solldary obligations: The consent of the surety, will release the surety
share or the insolvent guarantor shall be borne from liability.
by the others including the paying guarantor in
the same Joint proportion. Such material alteration would constitute a
novalion or change of the principal contract, •
Accrual and Basis of Right: which is consequently extinguished. Upon such
The right of reimbursement is acquired ipso jure extinguishments, the accessory contract to
without need of any prior cession from the guaranty is also terminated and the guarantor
creditor by the guarantor. cannot be held liable on the new contract to
('•,
\!... . which he has not given his consent.
Defenses Available to Co-Guarantors (Arl.
2074) When Alteration Material
General rule: All defenses which the debtor Where such change will have the effect of
would have interposed against the creditor (i.e. making the obligation more onerous.
fraud, prescription, remission, illegality, etc.). 1. Imposes a new obligation or added burden
on the party promising; or
Exception: Those which cannot be transmitted 2. Takes away some obligation alresdy
r:>; for being purely personal to the debtor. imposed, changing the legal effect of the •
t· ... original contract and not merely the form
Liability of Sub-Guarantor In case, of thereof.
Insolvency of <';uarantor (Art. 2075)
Sub-guarantor is liable to the co-guarantors in Release by Conveyance of Property (Art.
the same manner as the guarantor whom he 2077)
guaranteed in case of the insolvency of the General rule: Payment is made in money.
guarantor for whom he bound himself as sub- Exception: Any substitute paid in lieu of money
guarantor. which is accepted by the creditor extinguishes
the obligation and in consequence, the guaranty.
C. EXTINGUISHMENT OF GUARANTY • If the creditor accepts property in payment
t:' •.
of a debt from the debtor, the guarantor is
'
\... '' Causes of Extlngulshment of Guaranty relieved from responsibility. This is also·
(PaNo-CoCo-LoCo·FRAP) (Art. 2076) true even in case the creditor is
General rule: Guaranty being accessory, it ls subsequently evicted from the property.
extinguished when principal obligation is ~!

extinguished, the causes of which are: In case of eviction: Eviction revives the
1. Payrnent or performance; principal obligation but not the guaranty.
2. Loss of the thing due; Reason: The creditor's action against the debtor
3. Condonation or remission of the debt; is for eviction and this is different from what the
4 . .£2nfusion or merger of the rights of the guarantor guaranteed.
creditor and debtor;
5. Compensation; and Release of Guarantor without Consent of
1..._....: 6. Novatlon Others (Art. 2078)
7. Other causes: Effect: The release benefits all to the extent of
a. ~nnulment; the share of the guarantor released.
b. Rescission; Reason: A release made by the creditor in favor
c. fulfillment of a resolutory condition; of one of the guarantors without the consent of
d. froscription
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the others may prejudice the others should a
guarantor become insolvent.
Release by Extension of Term Granted by
Creditor to Debtor (Art. 2079)
Relaae Without Consent of Guarantor:
Creditor grants an extension of time to the
debtor without the consent of the guarantor.
Effect: Guarantor is discharged from his
undertaking.
Reason: To avoid prejudice to the guara1,tor.
The debtor may become insolvent during the
extension, thus depriving the guarantor of his
right to reimbursement.
It doesn't matter If the extension is:
a. Prejudicial or not; or
b. For a long or short period of time.
NOTE: Consent of the Guarantor Is a must.
Extension must be based on some new
agreement between the creditor and the
principal debtor by virtue of which the creditor
deprives him of his claim.
1. Where obligation payable in installments:
Where a guarantor is liable for differer'lt
payments.
General rule: An extension of time to one
or more will not affect the liability of the
surety for the others.
Exception: When the unpaid balance has
become automatically due by virtue of an
acceleration clause for failure to pay an
installment.
Effect of exception: The act of the creditor
extending the payment of said installment,
without the guarantor's consent, discharges
the guarantor.
Reason: The extension constitutes an
extension of the payment of the whole
amount of the indebtedness
2. Where consent to an extension is waived
in advance by the guarantor or surety:
Such waiver is not contrary to law, nor to
public policy
Effect: Amounts to the guarantor's or
surety's consent to ail the extensions
granted.
CIVIL LAW
NOTE: The mere failure or neglect on the part of
the creditor to enforce payment or to bring an
action upon a credit, as soon as the same or any
part of it matures, does not constitute an
extension of the term of the obligation, and
therefore, the llablllty of the guarantor Is not
extinguished
In order to constitute an extension discharging
a surety, it should appear that the extension •
was: (DEW)
1. For a Qefinite period
2. Pursuant ,to an §.nforceabie agreement
between the principal and the creditor
3. Made Without the consent of the surety or
with a reservation of rights with respect to
him.
• The contract must be one which precludes
the creditor from, or at least hinders him in,
enforcing the principal contract within the
period during which he could otherwise.
have enforced it, and precludes the surety
from paying the debt.
• The law does not even grant the surety the
right to sue the creditor for delay, as
protection • against the risks of possible
insolvency of the debtor; but in view of the
efficacy of the action on the contract
against the surety, beginning with the date
the obligation becomes due, his vigilance
must be exercised rather against the
principal debtor.
..
.
That an extension .granted to the debtor by the
creditor without the consent of the guarantor
extinguishes the guaranty, also applies to
suretyship. The theory behind Art 2079 is that
an extension of time given to the debtor by the
creditor without the surety's consent would
deprive the surety of his right to pay the creditor
and to be immediately subrogated to the
creditor's remedies against the debtor upon the
maturity date. The surety is entitled to protect
himself against the debtor's insolvency during
the extension. However, it must be stressed that
Art. 2079 wlll apply only if the extension is
granted by the creditor in favor of the debtor
without the guarantor's/surety's consent. (TIDC
v. APC, 2014)
Release when Guarantor cannot be
Subrogated (Art. 2080)
• If there can be no subrogation because of
the fault of the creditor, the guarantors are
thereby released, even if the guarantors are
solidary.
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\ :

.~ . • If the creditor has acquired a lien upon the D. ANTICHRESIS

•' '
property of a principal debtor, the creditor
at once becomes charged with the duty of
retaining such security, or maintaining such
lien in the interest of the surety, and any
.r--· l
release or impairment of this security as a
'\, !
primary resource of payment of a debt, will
r>, discharge the surety to the extent of the
t ; value of the property or lien released for
there immediately arises a trust relation
between the parties, and the creditor as
trustee is bound to account to the surety for
the value of the security in his hands;
Reason: The act of one cannot prejudice ,
•..t, .:
another. It also avoids collusion between the
creditor and the debtor or a third person.
Defenses Available to Guarantor against
f. Creditor (Art. 2081)
\...
General rule: All defenses, which pertain to the
principal debtor and are Inherent In the debt.
Exception: Those which are purely personal to
the debtor.
--·-·-- end of topic -·····-
Antlchresis is a contract whereby the creditor
acquires the right to receive the fruits of an
immovable of the debtor, with the obligation to
apply them to the payment of the interest, if
owing, and thereafter to the principal of the
credit.
Characteristics
1. Accessory contract - it secures the
performance of a principal obligation.
2. Formal contract - it must be in a specified
form to be valid (Art. 2134) Amount of •
principal and interest must be in writing.
Special Requisites:
1. Only the fruits pf an immovable property;
2. Delivery of the immovable is necessary for
the creditor to receive the fruits and not that
the contract shall be binding:
3. Amount of prlnclpal and interest must be
specified in writing (otherwise, void): and
4. Express agreement that debtor will give
possession of the property to creditor and
that the latter will apply the fruits to the
interest, If any, then to the principal of his •
credit.

NOTE: The. obligation to pay interest is not

/: 1
·- J essential in a contract of antichresis, there being
nothing in the Code to show that antichresis is
only applicable to securing the payment of
interest-bearing loans. On the contrary,
antichresis is susceptible of guaranteeing all
kinds of obligations, pure or conditional.
,f - '
·.,.,.'
Obligations of an Antichretlc Creditor (FATE) .
/ ', 1. To pay !axes and charges on the estate,
.!.: .. , . including necessary expenses;
NOTE: Creditor may avoid said obligation
by:
a. Compelling debtor to reacquire
enjoyment of the property; or
b. By stipulation to the contrary.
2. To apply all the fruits, after receiving them,
~:
to the payment of interest, If owing, and
/ ; thereafter to 'the principal;
3. To render an ~ccount of the fruits to the
debtor; and ,
._, ,
l
4. To bear the Expenses necessary for its
preservation and repair .

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Remedies of Creditor in Case of Non-
Payment of Debt
1. Action for specific performance; or
2. Petltion-for the sale of the real property as in
a foreclosure of mortgages under Rule 68 of
the Rules of Court.
NOTE: The parties, however, may agree on an
extrajudicial foreclosure in the same manner as
they are allowed in contracts of mortgage and
pledge. (Tavera v. El Hogar Filipino, inc., G.R.
No. L-45963, 1939)
A stipulation authorizing the antichretfc creditor
to appropriate the property upon the non-
payment of the debt within the agreed period is
void (Art. 2088)
----- end of topic --------
•
CIVIL LAW
PLEDGE, MORTGAGE AND ANTICHRESIS,
CHATTEL MORTGAGE
Provisions Common to Pledge and
Mortgage (Arts. 2085-2123)
..·.,
Essential Requisites Common to Contracts
of Pledge and Mortgage: (FARVAS)
1. Constituted to ;C;.§ecure the fulfillment of a •
principal obligaijon;
2. Pledgor or mortgagor be the !bsolute owner
of the thing pledged or mortgaged;
3. The persons constituting the pledge or
mortgage have the .Eree disposal of their
property, and in the absence thereof, that
they be legally authorized for the purpose;
4. Cannot exist without a ~alld obligation;
5. Debtor Retains the ownership of the thing
given as a security; and
6. When the principal obligation becomes due;
the thing in which the pledge or mortgage
consists may be ~lienated for the payment
to the creditor.
NOTE; Third persons who are not parties to the
principal obligation may secure the latter by
·pledging or mortgagin9 their own property (Art.
2085; Chinabank vs. QBRO Fishing Enterprises,
G.R. No. 184556, 2012)
Important Points
1. Future property cannot be pledged or
mortgaged.
2. Pledge/mortgage executed by one who is
not the owner of the property pledged or
mortgaged is without legal existence and
registration cannot validate it.
3. Generally, mortgage of a conjugal property
by one of the spouses without the consent of
the other spouse is valid only as to Yl of the
entire property.
4. In case of property covered by Torrens title,
a mortgagee has the right to rely upon what
appears in the certificate of title and does
not have to inquire further. However, a bank
whose business is impressed with public
interest is expected to exercise more care
and prudence ii) its dealings than a private
individual, even'in cases involving registered
lands. A bank 'qannot assume that, simply
because the title: offered as security is on its
face free of any· encumbrances of lien, it is
relieved of the responsibility Of taking further
steps to verify the title and inspect the
properties to be mortgaged.
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5. Pledgor or mortgagor must have free Right of Creditor Where Debtor Falla to
disposal of proparty. Comply With His Obllgatlon
6. Thing pledged or mortgaged may be 1. Creditor is merely entitled to move for the
,r·
~ I
·. alienated by the pledger or mortgagor. sale of the thing pledged or mortgaged with
NOTE: Removal, Sale or Pledge of the formalities required by law In order to
Mortgaged Property. - The penalty or collect.
arresto mayor or a fine amounting to twice 2. Creditor cannot appropriate to himself the
the value of the property shall be imposed thing nor can he dispose of the same as
upon: owner.
I. Any person who shall knowingly
remove any personal property Prohibition against Pectum Commissorlum
mortgaged under the Chattel • Stipulation Is null and void - stipulation
rr-.
,t Mortgage Law to any province or where thing pledged or mortgaged shall
. . .. · •
city other than the one in which it automatically become the property of the
was located at the time of the ' creditor in the event of nonpayment of the
execution of the mortgage, without debt within the term fixed,
the written consent of the • The essence of pactum commlssorium is
mortgagee, or his executors, that ownership of the security will pass to
administrators or assigns. the creditor by the mere default of the
ii. Any mortgagor who shall sell or debtor. (Spouses Solitarios v. Spouses
pledge personal property already Jaque, G.R. No. 199852, 2014)
·f_' pledged, or any part thereof,
under the terms of the Chattel Requisites of pactum commissorium:
,,<,cr-. Mortgage Law, without the 1. There should be a pledge or mortgage; and
consent of the mortgagee written 2. There should be a stipulation for an
,,,.. . on the back of the mortgage and automatic appropriation by the creditor of
'- noted on the record thereof in the the property in the event of nonpayment. •
office of the register of deeds of (Pen v. Julian, G.R. No. 160208, January
the province where such property 11,2016) •
is located. (Revised Penal Code, •
Art. 319) Effect on Securl~y Contract: Nullity of the
7. Creditor is not required to sue to enforce his stipulation does not1affect validity and efficacy of
:1\ credit. the prlnctpal contrast,
~I
8. Pledgor or mortgagor may be third person ·!.
(i.e., not the principal debtor). There is no automailc appropriation of the object
9. The liability of an accommodation pledger or ~
of the contract of mQrtgage, as it takes the
mortgagor extends only to the property intervention of the court to exact fulfillment of the
pledged or mortgaged. obligation. If something more is to be done, like
the execution of the deed of assignment, there is
·;.
'':';,;., PLEDGE MORTGAGE no pactum commfssorium (Uy Tong v. Court
Constituted on Constituted on Appeals, G.R. No. 77465, 1988).
movables movables or
immovables The Memorandum of Agreement and the Dacion
Property is delivered to Delivery is not in Payment Agreement contain no provisions for
the pledgee, or by necessary foreclosure proceedings nor redemption. Under
common consent, to a the MOA, the failure by A to pay his debt within
3rd person (real the one-year period gives 8 the right to enforce
contract) the Dacion in Payment transferring to it
·-,,; Not valid against 3"' Not valid against 310 ownership of A's land, B, in effect, automatically
'I
persons unless a persons in good faith if acquires ownership of the properties upon A's
J description of the thing not registered failure to pay his debt within the stipulated period
pledged and the date (Sps. Ong v. Roban Lending Corporation, G.R.
'
...:..;..•f of the pledge appear in No.172592, July 9, 2008).
a public instrument
There is no automatic appropriation of the object
of the pledge upon maturity of the loan. The
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E. REAL ESTATE MORTGAGE
Real Mortgage is a contract whereby the debtor
secures to the creditor the fulfillment (lf a
principal obligation, specially subjecting to such
security immovable property or real rights over
immovable property in case the principal
obligation is not complied with at the time
stipulated. (Arts. 2124-2131)
Objects of Real Mortgage:
1. Immovables; and
2. Alienable real rights in accordance with the
laws. imposed upon immovables.
General rule: Future property cannot be object
of mortgage.
Exception: (After-Acquired Properties) A
stipulation subjecting to the mortgage lien,
improvements which the mortgagor may
subsequently acquire, install, or use in
connection with the real property already
mortgaged belonging to the mortgagor is valid.
(People's Bank and Trust Co. v. Dahican
Lumber Co., G.R. No. L-17500, 1967)
Example: X owns a factory. In that factory, he
installed a machine and subsequently
mortgaged it. The parties may validly stipulate
that if the original machine is replaced, the
replacement shall be subject to the mortgage.
The· reason for this is that after-acquired
properties are understood to be replacements,
as the original machine may be subject to wear
and tear.
Important Points
1. As a general rule, the mortgagor retains
possession of the property. He may deliver
said property to the mortgagee without
altering the nature of the contract of
mortgage.
2. It is not an essential requisite that the
principal of the mortgage credit bears
interest, or that the interest as compensation
for the use of the principal and the
enjoyment of its fruits be in the form of a
certain percent thereof.
Kinds of Mortgage:
1. Voluntary
2. Legal
3. Equitable - one which, although it lacks the
proper formalities of a mortgage shows the
intention of the parties to make the property
,· .. •
;{
,,
CIVIL LAW
as a security for a debt (governed by Civil
Code, Arts. 1365, 1450, 1454, 1602, 1603,
1604 and 1607).
Essential Requisites of Mortgage (FAVFAP):
1. Constituted to secure the Fulfillment of a
principal obligation; -
2. Mortgagor be the Absolute owner of the •
thing pledged or rpo11gaged;
• NO,:E: Before partition of estate, each
heir only has an undivided interest in the
estate and In each specific piece of
property In the estate. Any mortgage on
said property undertaken by an heir Is
valid, but only up the portion that may be
allotted in partition to the heir (Rural
Bank of Cabadbaran, Inc. v. Melencio-
Yap, G.R. No. 178451, 2014, reiterated
in Magsano v. Pangasinan Savings and
Loan Bank, G.R. No. 215038, 2016)
3. Mortgagor has free disposal of the property,
and In the absence thereof, that he be
legally authorized for the purpose;
4. Cannot exist without a yalid obligation;
5. When the principal obligation becomes due,
the thing in which the mortgage consists
may be ~lienated for the payment to the
creditor; and
6. Appears in a fublic document duly recorded
in the Registry of Property to be validly
constituted..
• If the instrument is not recorded, the
mortgage Is nevertheless binding
between the parties.
• NOTE: Under the Doctrine of
"Mortqaqeeln Good Faith", even if the
mortgagor i ls not the owner of the
rnortqaqed: property, the mortgage
contract an9 any foreclosure sale arising
there from tire given effect by reason of
public policy; Even if the mortgagor is
not the rightful owner of, or does not
have a valid title to, the mortgaged
property, the mortgagee in good faith is,
nonetheless, entitled to protection.
(Torbela vs. Rosario, G.R. Nos. 140528
& 140553, 2011)
When a mortgagee relies upon what appears on
the face of a Torrens title and lends money in all
good faith on the basis of the title in the name of
the mortgagor, only thereafter to learn that the
latter's title was defective, being thus an
innocent mortgagee for value, his or her right or
lien upon the land mortgaged must be respected
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.......
, and protected. (Mahinay vs. Gako, Jr., G.R. Nos.
' .·
i 165338 & 179315, 2011)
BUT: A bank whose business is impressed with
public interest is expected to exercise more care
.... and prudence in its dealings than a private
t I
individual, even in cases involving registered
r>. lands. A bank cannot assume that, simply
:,_ I
because the title offered as security is on its face
free of any encumbrances of lien, it is relieved of
the responsibility of taking further steps to verify
the title and inspect the properties· to be
mortgaged.
In order for a mortgagee to invoke the doctrine
of mortgagee in good faith, the impostor must
~.....
. I have succeeded in obtaining a Torrens title in
'.;,,. I
his name and thereafter in mortgaging the
property. Where the mortgagor is an impostor
who only pretended to be the registered owner,
and acting on such pretense, mortgaged the
property to another, the mortgagor evidently did
not succeed in having the property titled in his or
her name, and the mortgagee cannot rely on
such pretense as what appears on the title is not
.(. the impostor's name but that of the registered
·l owner. (Ruiz v. Dimailig, G.R. No. 204280,
2016)
BUT: SC has held in a case that while the bank
failed to exercise greater care in conducting the
ocular inspection of the properties offered for
mortgage, its omission did not prejudice any
innocent third parties because the cause of the
,:' \ mortgagors' defective title was the simulated
;:..... 1
sale between the buyer/mortgagor and seller
C". (the latter questioning the validity of the
·· ...,.' mortgage). Thus, no amount of diligence in the
conduct of the ocular inspection could have led
to the discovery of the complicity between the
ostensible mortgagors/buyer and the true
owners/seller. In fine, the bank can hardly be
deemed negligent. Thus, the bank was
.· - considered as a mortgagee in good faith
t ..)
(Philippine Banking Corporation v. Dy, G.R. No.
183774, 2012)
An entrustee under a trust receipt does not have
,,' . a right to mortgage the property held in trust.
This is because the entrustor, not the entrustee,
:.\; __ ;' is the owner of the property in trust. A mortgage
must be executed by the absolute owner of the
chattels to be valid (DBP vs. Prudential Bank,
2005; Art. 2085 (2)).
t( ~
\!,,.
CJ
CIVIL LAW
Legal Mortgage: The persons in whose favor
the law establishes a mortgage have no other
right than to demand the execution and the
recording of the document in Which the
mortgage is formalized.
Incidents of Registration of Mortgage
1. Mortgagee entitled to registration of
mortgage as a matter of right.
2. Proceedings for registration do not
determine validity of mortgage or its effect.
3. Registration is without prejudice to better
right of third parties. •
4. Mortgage deed once duly registered forms
part of the records for the registration of the
property mortgaged.
5. Mortgage by surviving spouse of his/her
undivided share of conjugal property can be
registered.
Effect of lnvalidl~y of Mortgage on Principal
Obligation .''.
1. Principal obligation remains valid.
2. Mortgage deed remains as evidence of a
personal obligation.
i •
When a bank relied on a forged SPA, it has the
burden to .prove its authenticity and due
execution as when there is a defect in the
notarization of a document, the clear and
convincing evidentiary standard normally
attached to a duly-notarized document Is
dispensed with, and the measure to test the
validity of such document is preponderance of
evidence.
However, where a mortgage is not valid due to a.
forged SPA, the principal obligation which it
guarantees is not thereby rendered null and
void. What is lost is merely the right to foreclose
the mortgage as a special remedy for satisfying
or settling the indebtedness which is the
principal obligation. In case of nullity, the
mortgage deed remains as evidence or proof of
a personal obligation of the debtor and the
amount due to the creditor may be enforced in
an ordinary action. The partial invalidity of the
subject real estate mortgage brought about by
the forged status of the subject SP A would not,
therefore, result into the partial invalidation of the
loan obligation principally entered into by the
parties; thus, absent any cogent reason to hold
otherwise, the need for the recomputation of
said loan obligation should be dispensed with.
(Rural Bank of C~badbaran, Inc. v. Melecio-Yap,
G.R. No. 178451, 2014)
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Effect of Mortgage
1. Creates right In rem or real rights.
A lien Inseparable from the property
mortgaged, enforceable against the whole
world as lohg as it is registered. If not
registered the third party must know of the
mortgage.
2. Creates merely an encumbrance.
The law considers void any stipulstlon
forbidding the owner from alienating the •
Immovable mortgaged. (Art. 2130)
• The mortgagor's default does not
operate to vest in the · mortgagee the
ownership of the encumbered property.
• His failure to redeem the property does
not automatically vest ownership of the
property to the mortgagee.
Extent of Mortgage (l·GRAPE)
A real estate mortgage constituted on
immovable property is not limited to the property
itself but also extends to its:
1. Accessions
2. improvements
3. Growing fruits
4. Bents or income
5. froceeds of insurance should the property
be destroyed.
6. _sxpropriation value of the property should it
be expropriated.
To exclude them, it is necessary that there be
an express stipulation to that effect. But if the
mortgaged estate passes Into the hands of a
third person, the mortgage does not extend to
any machinery, object, chattel or construction
which he may have brought or placed there and
which such third person may remove whenever
it is convenient for him to do so.
Mortgage to Secure Future Advancements
Blanket/Dragnet Clause • one which is
specifically phrased to subsume all debts of past
or future origin.
General rule: There must be a stipulation for the
inclusion of future advancements.
Mortgage with a dragnet. clause enables the
parties to provide continuous dealings, the
nature or extent of which may not be known or
anticipated at the time. This allows them to avoid
the expense and inconvenience of executing a
new security on each new transaction.
CIVIL LAW
A mortgage . given to secure future
advancements is a continuing security and is
not discharged ,by the repayment of the amount
named In the mortgage, until the full amount of
the advancements Is paid.
NOTE: A "blanket mortgage clause", also •
known as a ''dragnet clause" in American
jurisprudence, is one which is specificall¥
phrased to subsume all debts of past or future
origins. A mortgage which provides a dragnet
clause is in the n8:~Ure of a continuing guaranty
and constitutes an.exception to the rule that an
a
action to foreclose mortgage must be limited to
the amount mentioned In the mortgage contract.
(PCSO vs. New Dagupan Metro Gas Corp., G.R.
No. 173171, 2012)
As a general rule, a mortgage liability is usually·
limited to the amount mentioned in the contract.
However, the amounts named as consideration
in a contract of mortgage do not limit the amount
for which the mortgage may stand as security if
from the four corners of the instrument the intent
to secure future and other indebtedness can be
gathered. (Ramos vs. PNB, G.R. No. 178218,
2011)
In the absence of clear and supportive evidence
of a contrary intention, a mortgage containing a
dragnet clause will not be extended to cover
future advances, unless the document
evidencing the subsequent advance refers· to the
mort.gage as providing security therefor.
Reliance on the Security Test: Applies when
there is a dragnet clause In a mortgage contract
but there is a mortgage constituted on another
property to secure a subsequent loan. When the
mortgagor takes another loan for which another
security was given it could not be inferred that
such loan was made in reliance solely on the
original security, with the "dragnet clause," but
rather, on the ne~ security given.
A pledge, real estate mortgage, or anlichresis
may exceptionally secure after-incurred
obligations so long as these future debts are
accurately described. A chattel mortgage,
however, can only cover obligations existing at
the time the mortga,ge is constituted. Although a
promise expressed: in a chattel mortgage to
include debts that are yet to be contracted can
be a binding commitment that can be compelled
upon, the security ~itself, however, does not
come Into existence .or arise until after a chattel
Page 316 of 432
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mortgage agreement covering the newly
contracted debt is executed either by concluding
a fresh chattel mortgage or by amending the old
contract conformably with the form prescribed by
the Chattel Mortgage Law. (Acme Shoe Rubber
& Plastic Corp. vs. Court of Appeafs, 1996)
Allenatloh or Assignment of Mortgage Credit
The mortgage credit is a real right which may be
alienated by the mortgagee without need to
obtain the consent of the debtor. Alienation of
the mortgage credit is valid even if it ls not
registered. Registration is necessary only to ,
affect third persons.
NOTE: The sale or transfer of the mortgaged
f" ... property cannot affect or release the mortgage;
•.... : thus, the purchaser or transferee ls necessarily
,~··. bound to acknowledge and respect the
encumbrance. (Garcia vs. Villar, G.R. No.
158891, 2012)
Laws Governing Mortgage
1. New Civil Code
2. P.O. 1529 or The Property Registration
Decree
3. Revised Administrative Code
4. R.A. 4882, as regards aliens becominq
mortgagee
5. R.A> 8791 General Banking Law
Foreclosure of Mortgage is the remedy
available to the mortgagee by which he subjects
the mortgaged property to the satisfaction of the
obligation to secure which the mortgage was
given.
NOTE: A foreclosure sale retroacts to the date
/·
of registration of the mortgage and that a person
I •
·l.....i who takes a mortgage in good faith and for
valuable consideration, the record showing clear
,r · ~ title to the mortgagor, will be protected against
v ...,J
equitable claims on the title in favor of third
persons of which he had no actual or
constructive notice. (St. Dominic Corp., vs. !AC,
~ . G.R. Nos. 70623 & L-48630, 1987)
'•4., .. :
Mere inadequacy of the price obtained at the
•.· ' .
• .•• J sheriffs sale will not be sufficient to set aside the
sale unless "the price is so inadequate as to
.~·;,.....'-, shock the conscience of the court" taking into
consideration the peculiar circumstances
attendant thereto. (Sulit vs. CA, G.R. No.
119247, 1~97).
,( '..
...... i
CIVIL LAW
Absent an adverse claimant or any evidence to
the contrary, all accessories and accessions
accruing or attached to the mortgaged property
are included in the mortgage contract and may
thus also be foreclosed with the principal
property in the case of nonpayment of the debt
secured. (PNB vs. Maranon, G.R. No. 189316,
2013}
The action to recover a deficiency after
foreclosure prescribes after 10 years from the
time the right of action accrues (Arts.1142 &
1144)
In order that the debtor may be in default, it is
necessary that: (a) the obligation be
demandable and already liquidated; (b) the
debtor delays performance; and (c) the creditor
requires the performance Judicially or
extrajudlcially, unless demand is not necessary.
Thus, it is only when demand to pay is
unnecessary , or when required, such demand is
made and subsequently refused that the
mortgagor can be considered in default and the
mortgagee obtains the right to file an action to
collect the debt or foreclose the mortgage. •
(Maybank Philippines., Inc. v. Spouses Tarrosa,
G.R. No. 213014, 2015)
The family home is exempt from execution,
forced · sale or; attachment, except for debts
secured by mortgages on the premises before or
after such constitution. (Fortaleza vs. Lapitan,
G.R. No. 178288, 2012)
Under the Rural Banks Act, the foreclosure of
mortgages coverih'g loans granted by rural.
banks and execuuons of judgments thereon
involving real properties levied upon by a sheriff
shall be exempt fro'rh publication where the total
amount of the loan,\ including interests due and
unpaid, does not exceed P10,000.00. (Menzon
v. Rural Bank of Buenavista, lnc., G.R. 178031,
2013)
Judicial Foreclosure (J·PACE-AC) (Rule 68,
Rules of' Court):
1. Judicial action for the purpose in the proper
court which has jurisdiction over the area
wherein the real property involved or a
portion thereof is situated .
2. Court order to mortgagor to fay mortgage
debt with interest and other charges within a
period of not less than 90 days nor more
than 120 days from the entry of judgment;
and Sale to the highest bidder at public
Page 317 of 432
 ATENEO CENTRAL
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~uction, should the mortgagor fail to pay at
the time directed.
3. ~onfirmation of sale, which operates to
divest the rights of all parties in the action
and to vest their rights to the purchase,
subject to the right of redemption allowed by
law.
4. _sxecution of judgment
5. ~pplication of proceeds of sale to:
a. Costs of the sale;
b. Amount due the mortgagee;
c. Claims of junior encumbrances or
persons holding subsequent mortgages
In the order of their priority; and
d. The balance, if any shall be paid to the
mortgagor.
6. Sheriff's Qertificate is executed,
acknowledged and recorded to complete the
foreclosure.
Nature of Judicial Foreclosure Proceedings
1. Quasi in rem action;
2. Foreclosure is only the result or incident of
the failure to pay debt; and
3. Survives death of mortgagor.
Extra-judicial Foreclosure (governed by Act
No. 3135, as amended)
1. Express authority to sell is given to the
mortgagee;
2. Authority is not extinguished by death of
mortgagor or mortgagee;
3. Public sale should be made after proper
notice (posting and publication);
4. Surplus proceeds of foreclosure sale belong
to the mortgagor or his assigns;
5. Debtor has the right to redeem the
property sold within 1 year from and
after the date of sale; one year period is
to be reckoned from the registration of
the sheriff's certificate of sale.
6. Remedy of party aggrieved by foreclosure is
a petition to set aside sale and cancellation
of writ Of possession;
7. Republication is necessary for the validity of
a postponed foreclosure sale (parties have
no right to waive the publication
requirement).
NOTE: Unless the parties stipulate, personal
notice to the mortgagor in extrajudicial
foreclosure proceedings is not necessary
because Section 31 of Act No. 3135 only
requires posting of the notice of sale in three
public places and the publication of that notice in
CIVIL LAW
a newspaper of general circulation. (Ramirez v.
TMBC, G.R. No. 198800, 2013)
Extra-judicial foreclosure before a notary public
is valid under Act No. 3135. (Tagunicar v. Lorna
Express, G.R. No. 138592, 2006).
A creditor is not precluded from recovering any
unpaid balance on the principal obligation if th~
extrajudicial · foreclosure sale of the property
subject of the real estate mortgage results in a
deficiency. (BPI vs. Reyes, G.R. No. 182769,
2012)
The mortgagee-bank has no right to Include In
the foreclosure of the land the portion of the loan
separately secured by chattel mortgage. Where
the bank collected the entire amount of the loan
from the proceeds of the foreclosure sale,
including the portion that was not covered by the
foreclosure of the real estate mortgage, it must
return the excess amount. (Rural Bank of
Toboso vs. Agtqto, G.R. Nos. 175697 & 176103,
2011)
Procedure for Extra-Judicial Foreclosure of
Real Estate Mortgage (Act No. 3135) and
Chattel Mortgage \(Act No. 1508, A.M. NO. 99-
10-05-0; January 15; 2000) (ARC-DIP·RET)
1. Filing of ~pplic:1:1tion before the Executive
Judge through the Clerk of Court;
2. Clerk of Court · will examine whether the
Requi·rements of the law have been
complied with, that is, whether the notice of
sale has been posted for not less than 20
days in at least 3 public places of the
municipality or city where the property is
situated, and if the same is worth more than
P400.00, that such notice has been
published once a week for at least 3
consecutive weeks in a newspaper of
general circulation in the city or municipality;
3. The f.ertificate of sale must be approved by
the Executive Judge;
4. In extrajudicial foreclosure of real mortgages
in Qifferent locations covering one
indebtedness, only one filing fee
corresponding to such debt shall be
collected;
5. The Clerk of Court shall !ssue certificate of
payment indicating the amount of
indebtedness, the filing fees collected, the
mortgages sought to be foreclosed, the
description of the real estates and their
respective locations;
Page 318 of432
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6. The notice of sale shall be Published in a
newspaper of general circulation;
7. The application shall be Raffled among all
r, .
\ sheriffs;
8. After the redemption period has gxpired, the
. t. Clerk of Court shall archive the records; and
'l .
9. Previously, the rule was that no auction sale
shall be held unless there are at least Iwo
participating bidders, otherwise the sale
shall be postponed to another date. If on the
new date there shall not be at "least 2
bidders, the sale shall then proceed. The ~
,....,,
ft
... ... I names of the bidders shall be reported by
the Sheriff or the Notary Public who
<,
·:: .r conducted the sale to the Clerk of Court
before the issuance of the certificate of sale.
On January 30, 2001, the Supreme Court
"ii... issued a resolution amending paragraph 5 of
r:>, A. M. 99·10·05-0 explicitly dispensing with
t .. the "two-bidder rule."
,,,- .
·~... · Right of mortgagee to recover deficiency
1. Mortgagee is entitled to recover deficiency.
2. If the deficiency is embodied in a judgment,
it ls referred to as deficiencyjudgment.
3. Action for recovery of deficiency may be
filed even during redemption period.
4. Action to recover prescribes after 10 years
from the time the right of action accrues.
NOTE: Jf the proceeds of the sale ln an
extrajudlclal foreclosure where the mortgagee
was the highest bidder are insufficient to cover
the debt, the mortgagee is entitled to claim the
deficiency from the debtor. (BPI Family Savings
{...... " 1 Bank v. Avenido, G.R. No. 175816, 2011)
.
..... ...
·. '
'w,)
Nature of power of foreclosure
extrajudiclal sale
by
(:" 'l
1. Conferred for mortgagee's protection.
'c ... J' 2. An ancillary stipulation supported by the
same cause or consideration for the
I·-·
·U mortgage.
3. A prerogative of the mortgagee.
After the expiration of the redemption period
without redemption having been made by
r' petitioner, respondent became the owner thereof
.__, and consolidation of title becomes a right. Being
already then the owner, respondent became
entitled to possession. Petitioner already lost his
possessory right over the property after the
expiration of the said period. (Spouses Gatus/ao
v. Vanson, G.R. No. 191540, 2015)
Stipulation of Upset Price or "tlpo"
A stipulation of minimum price at which the
property shall be sold to become Operative in the
- -···-···· ·--------------···
CIVIL LAW
event of a foreclosure sale at public auction is
null and void
Effect of inadequacy of price in foreclosure
sale
1. Where there is right to redeem .
General rule: Inadequacy of price is
immaterial because the judgment debtor
may redeem the property.
Exception: The price is so inadequate as
to shock the ~onscience of the court taking
•
into consideration the peculiar
circumstanceJ.
2. Property may ,:be sold for less than its fair
market value upon the theory that the lesser
the price the easier for the owner to redeem.
3. The value of the mortgaged property has no
bearing on the bid price at the public
auction, provided that the public auction was
regularly and honestly conducted.
NOTE: It is settled that if the proceeds of the
sale are insufficient to cover the debt in an
extrajudicial foreclosure of mortgage, the •
mortgagee is entitled to claim the deficiency
from the debtor. While Act. No. 3135 does not
discuss the· mortgagee's right to · recover the ·
deficiency, neither does It contain any provision
expressly or impliedly prohibiting recovery. (BPI
vs. Avenido, G.R. No. 175816, 2011)
Waiver of security by creditor
1. Mortgagee may waive right to foreclose his
mortgage and maintain a personal action for
recovery of the indebtedness.
2. Remedies are alternative, not cumulative.
3. Options in case the debtor dies:
a. To waive mortgage and claim entire
debt from the mortgagor's estate as an
ordinary claim;
b. To judicially foreclose mortgage and
prove any deficiency; or
c. To rely, on the mortgage exclusively
without filing a claim for deficiency
I
NOTE: Foreclosure retroacts to the date of
registration of mortqaqe.
Redemption is a transaction by which the
mortgagor reacquires or buys back the property
which may have passed under the mortgage or
divests the property of the lien which the
mortgage may have'creeted.
;,
~
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Kinds of Redemption period of redemption. (Torbela vs. Rosario, G.R.

1. Equity of redemption: Right of the Nos. 140528 & 14qp53, 2011)
mortgagor to redeem the mortgaged ;,.:
property after his default in the performance The right of legal re,demption must be exercised
of the conditions of the mortgage but before within specified lime limits. However, the
confirmation of the sale. statutory period of redemption can be extended
a. Applies to judicial foreclosure of real by agreement of the parties. (Republic vs.
mortgage and chattel mortgage Marawi-Marantao General Hospital, G.R. No.
foreclosure. • 158920, 2012)
b. A second mortgagee acquires only the
equity of redemption vested in the Period of Redemption
mortgagor, and his rights are strictly 1. Extra-judicial (Act No. 3135)
subordinate to the superior lien of the a. Natural person - 1 year from
first mortgagee. registration of the certificate of sale with
Registry of Deeds.
NOTE: Redemption of property where the b. Juridical person - same rule as natural
mortgagee is a banking institution is allowed person
within 1 year from the date of the registration c. Juridical person (mortgagee is bank).
of the confirmation of sale. - 3 months after foreclosure or before
registration of certificate of foreclosure
2. Right of redemption: right of the mortgagor whichever is earlier (General Banking
to redeem the property within a certain Law, Sec. 47)
period after it was sold for the satisfaction 2. Judicial - before confirmation of the sale by
of the debt. the court
a. Applies only to extrajudicial
foreclosure of real mortgage. NOTE: The registration of the sale is required
NOTE: The right of redemption, as long as only in extra-judicial foreclosure sale because
within the period prescribed, may be exercised the date of the registration is the reckoning
irrespective of whether or not the mortgagee has point for the exercise of the right of redemption.
subsequently conveyed the property to some In contrast, the registration of the sale is
other party (Sta. Ignacia Rural Bank, Inc. v. CA, superfluous In judicial foreclosure because only
G.R. No. 97872, 1994) the equity of redemption is granted to the
mortgagor, except in mortgages with banking
The tender of redemption money may be made institutions. (Robles v: Yapcinco, G.R. No.
to the purchaser of the land or to the sheriff; If 169568, 2014) 1
made ·to the sheriff, it is his duty to accept the
tender and execute the certificate of redemption.
(Yap vs. Dy, s-, G.R. Nos. 171868 & 171991,
Individual 1 year from X [equity of
2011).
debtors I registration redemption
mort a ors of sale onl
The doctrine of indivisibility of mortgage does
not apply once the mortgage Is extinguished by
,Juridical persons \1 year from X [equity of
a complete foreclosure thereof. Nothing In the as debtors I ;registration redemption
law prohibits the piecemeal redemption of mort a ors '.of sale onh
properties sold at one foreclosure proceedings.
(Id).

The general rule in redemption is that it is not

sufficient that a person offering to redeem
manifests his desire to db so; The statement of
intention must be accompanied by an actual and
simultaneous tender of payment; In case of
disagreement over the redemption price, the
redemptioner may preserve his right of
redemption through judicial action, which in
every case, must be file within the one-year
Page 320 of 432
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Junior Mortgagee~
PERIODS OF EXTRAJUDICIAL
() REDEMPTION FORECLOSURE
1. After the foreclosure sale, there remains In
the second mortgagee a mere right of
IIIIIGm!lml~ redemption. His remedy is limited to the
Individual 1 year from 1 year from right to redeem by paying off the debt
debtors I registration registration secured by the first mortgage.
mortoaoors of sale of sale 2. He is entitled to the payment of his credit the
Juridical persons Until 1 year from excess of the proceeds of the auction sale.
as debtors I registration registration 3. In case the credit of the first mortgagee has
mortgagors of certificate of sale absorbed the entire proceeds of the sale,
of sale or the second mortgage is extinguished, since
within 3 the mortgage cannot be enforced beyond
«-. months from the total value of the mortgaged property.
·~. sale
,,..
..,
'
r
whichever is Mortgagee In Possession - one who has
·: ... earlier lawfully acquired actual or constructive
,... ' NOTE: Allowing redemption after the lapse of possession of the premises mortgaged to him,
-, the statutory period when the buyer at the standing upon his rights as mortgagee and not
,r . foreclosure sale does not object but even claiming under another title, for the purpose of
i . consents to the redemption, will uphold the enforcing his security upon such property or
'.
policy of the law which is to aid rather than making its income help to pay his debt.
.
' ''
...... ,•
defeat the right of redemption (Ramirez.. v. CA,
G.R. No. 98147, 1993) . NOTE: The rights of the first mortgage creditor
or mortgage over the mortgaged properties are
As a rule, the period of redemption Is not tolled superior to those of a subsequent attaching
by the filing of a complaint or petition for creditor and other Junior mortgagees. (Lee vs.
annulment of the mortgage and the foreclosure Bangkok Bank Public Company, Ltd. G.R. No.
sale conducted pursuant to the said mortgage. 173349, 2011) ,

Amount of the Redemption Price A mortgagor is. allowed to take a second or ·

1. Mortgagee is not a bank (Act No. 3135 in subsequent mortgage on a property already ·
relation to Sec. 28, Rule 39 of Rules of mortgaged, subject to prior rights of the previous
Court) mortgages. (Palada vs. Solidbank Corp., G.R.
: ~••• f
a. Purchase price of the property; No. 172227, 2011)
b. 1 % interest per month on the purchase
price; Rights and Obligations of Mortgagee in •
c. Taxes paid and amount of purchaser's Possession
prior lien, if any, with the same r~t!:l of 1. Similar to an alitlchresls creditor. - entitled ta
interest computed from the date of • retain such r.: possession until the
registration of sale, up to the time of indebtedness i~'. satisfied and the property
redemption. redeemed. 'if
2. Without right t6- reimbursement for useful
2. Mortgagee is a bank (Section 47, Generel expenses ·
Banking Act of 2000)
a. Amount due under the mortgage Right of Purchaser to Writ of Possessioh
deed; Writ of Possession - order whereby the sheriff
b. Interest at the rate specified in is commanded to place in possession of real or .
mortgage; personal property the person entitled thereto
c. Cost and expenses incurred by bank such as when a property is extrajudicially
from sale and custody less income foreclosed.
derived • The issuance of the writ of possession in an
extrajudicial foreclosure is merely a
NOTE: Redemption price in this case is reduced ministerial function.
'
,.:.J·
by the income received from the property.
• The purchaser at the foreclosure sale is
entitled as of right to a writ of possession.

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Before·lapse of redemption period - file an ex Redemption and repurchase distinguished

parte application and file a bond
After lapse of redemption period - file an ex
parte application end no need for a bond
NOTE: In an extrajudicial foreclosure of real
property, when the foreclosed property is in the
possession of a third party holding the same
adversely to the judgment obliger, the issuance
by the trial court of a writ of possession in favor
of the purchaser of said real property ceases to
be ministerial and may no longer be done ex
oene. but for the exception to apply, the property
need not only be possessed by a third party, but
also held by the third party adversely to the
judgment debtor. (BPI vs. Golden Power Diesel
The right to redeem becomes functus oflcio at
the end of the redemption period, and its
exercise after the period Is not really one of
redemption but· a repurchase. Distinction must
be made because redemption is by force of law;
the purchaser at public auction is bound to
accept redemption. Repurchase however of
foreclosed property, after redemption · period,
imposes no such obligation. After expiry, the
purchaser may or, may not re-sell the property
but no law will compel him to do so. And, he is
not bound by the bid price; it is entirely within his
discretion to set a :J:,igher price, for after all, the
property already be!ongs to him as owner.
I
l

Sales Center, G.R. No. 176019, 2011) -------- end of topic -----

The implementation of a writ of possession

Issued pursuant to Act No. 3135 at the instance
of the purchaser at the foreclosure sale of the
mortgaged property in whose name the title has
been meanwhile consolidated cannot be
prevented by the injunctive writ. (UCPB v.
Spouses Lumbo, G.R. No. 162757, 2013)

The purchaser can demand possession of the

property even during the redemption period for
as long as he files an ex perte motion under oath
and post a bond in accordance with Section 7 of •
Act. No. 3135, as amended. Upon filing of the
motion and the approval of the bond, the law
also directs the court in express terms to issue
the order of a writ of possession. When the
redemption period has expired and title over the
property has been consolidated in the
purchaser's name, a writ of possession can be
demanded as a matter of right. (PBCom v.
Yeung, G.R. No. 179691, 2013)

"Purchaser at the auction sale concerned

whether in a judicial or extrajudicial foreclosure
shall have the right to enter upon and take •
possession of such property immediately after
the date of the confirmation of the auction sale
and administer the same in accordance with law.
Any petition in court to enjoin or restrain the ·
conduct of foreclosure proceedings instituted
pursuant to this provision shall be given due
course only upon the filing by the petitioner of a
bond in an amount fixed by the court conditioned
that he will pay all the damages which the bank
may suffer by the enjoining or the restraint of the
foreclosure proceeding." (The General Banking
Law of 2000, Section 47) ;·,:~
\
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CHATTEL MORTGAGE
NOTE: If the movable, Instead of being recorded
Chattel Mortgage is a contract by virtue of is delivered to the creditor, it is a pledge and not
,·. which a personal property is recorded in the a chattel mortgage.
·i i
Chattel Mortgage Register as security for the
,r'·) perfonnance of an obligation.
~ .
CHATTEL MORTGAGE .. PLEDGE
Involves movable property. Involves movable eroeert:t,
Delivery of the personal property is NOT Delivery of the personal property is necessary.
necessary.
Procedure: Sec 14 of Act no 1508, as amended Procedure: Art. 2112 of Civ,1 Code
,..- . If the property Is foreclosed, the excess over the If the property is sold, the pledgor is not entitled to
~-- I
amount due goes to the pledger the to the excess UNLESS it is otherwise agreed or
In case of legal oledoe
Creditor is entitled to recover deficiency from the Creditor is not entitled to recover deficiency
I '
debtor EXCEPT if It is a security for the purchase of notwithstanding any stipulation t6 the contrary
t...,....
personal propertv in installments
A chattel mortgage can only cover obligations May secure after-incurred obligations so long as
existing at the time the mortgage is constituted. these future debts are accurately described,
I.~\
Although a promise expressed in a chattel
' .
,,___1 mortgage to Include debts that are yet to -be
contracted can be a binding commitment that can
be compelled upon, the security itself, however,
does not come into existence or arise until after a
chattel mortgage agreement covering the newly
contracted debt is executed either by concluding a
fresh chattel mortgage or by amending the old
contract conformably with the form prescribed by
/''
the Chattel MortQaQe Law.
?, . r Notice of sale must have been posted for at least No posting requirements
ten days at two or more public places in the place
where the mortgagor resides, or where the property
is situated
t' I
...~ •
; Affidavit of good faith is reguired Affidavit of cood faith is not reauired
The mortgagee may bid at the foreclosure sale, The pledgee may bid at the public auction, but his
and his offer Is valid evenit he Is the only bidder. offer shall not be valid lf he Is the only bidder.
To bind third persons, the mortgage must be To bind third persons.'. the description of the thing
registered with the Register of Deeds having pledged and the date of the pledge must appear In
jurisdiction over: a public instrument. }
1. The place of residence of the mortgagor ·~
/' .,
2. If the mortgagor resides outside the
Philippines, the place where the property is
situated
3. If the property is situated in a different province
/•
from that in which the mortgagor resides. the
place of residence of the mortgagor.AND the
.,
,1··'
' place where the property is located.
\(._)

,1 '
t1
/ -,
J !
\:..,,;>'

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' CHA lTEL MORTGAGE REAL ESTATE MORTGAGE

Involves movable property Involves immovable property
-·
To bind third persons, the mortgage must be To bind third persons, the mortgage must be
registered with the Register of Deeds having registered with the Register of Deeds having
jurisdiction over: Jurisdiction over the place where the Immovable Is
1. The place of residence of the mortgagor located
2. If the mortgagor resides outside the
Philippines, the place where the property is
situated
3. If the property is situated in a different province
from that in which the mortgagor resides, the
place of residence of the mortgagor AND the
olace where the orooertv Is located .
. Affidavit of nood faith is rsculred Affidavit of qood faith Is not required
Procedure: Sec 14 of Act no 1508, as amended Procedure:
1. Rule 68 of the Rules of Court for Judicial
Foreclosure 2. Act No. 3135 for Extrajudicial
foreclosure
If the property is foreclosed, the excess over the If the property is sold, the mortgagor it entitled to
·-
amount due coes to the pledqor receive the excess over the amount due
Creditor is entitled to recover deficiency from the Creditor is entitled to recover deficiency
debtor EXCEPT if it is a security for the purchase of
personal property in installments
A chattel mortgage can only cover obligations May secure after-incurred obligations so long as
existing at the time the mortgage is constituted. these future debts are accurately described,
(•
Although a promise expressed in a chattel !'
mortgage to include debts that are yet to ~e
contracted can be a binding commitment that can
be compelled upon, the security itself, however,
•
'
does not come into existence or arise until after a
chattel mortgage agreement covering the newly
contracted debt is executed either by concluding a
fresh chattel mortgage or by amending the old
contract conformably with the form prescribed by
the Chattel Mortgage Law. _J

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a fresh chattel mortgage or by amending the old

contract. Refusal of the borrower to execute the
agreement to cover the after-incurred obligation
is an act of default of the borrower of the
agreement containing the promise. (Marquez v.
Elisan Credit, G.R. No. 194642, 2015)
3. Where mortgaged property subsequently
attached and . sold: mortgagee is entitle to
deficiency judgment in an action for specific
performance. '·
"t·

Application of Proceeds of Sale

Civil Action to Recover Credit 1. Costs and expenses of keeping and sale.
1. Independent action not required. 2. Payment of the obligation.
2. Mortgage lien deemed abandoned by 3. Claims of persons holding subsequent
obtaining a personal judgment (civil action to mortgages in their order.
recover amount of loan) 4. Balance, if any, shall be paid to the
mortgagor, or person holding under him.
Right of Mortgagee to Recover Deficiency
1. Where mortgage foreclosed: creditor may -------- end of topic --------
maintain action for deficiency although
Chattel Mortgage Law is silent on this point.
Reason is chattel mortgage is only given as
a security and not as payment of the debt.

Exception: Recto Law (Art. 1484) which

states:
In a contract of sale of personal property
the price of which is payable in installments,
the vendor may exercise any of the
following remedies:

(1) Exact fulfillment of the obligation,.should

the vendee fail to pay;

(2) Cancel the sale, should the vendee's.

failure · to pay cover two or more
installments;

(3) Foreclose the chattel mortgage on

the thing sold, if one has been
constituted, should the vendee's failure
to pay cover two or more installments. In
this case, he shall have no further action
against the purchaser to recover any
unpaid balance of the price. Any
agreement to the contrary shall be void.
•
The preceding article shall be applied. to
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)

2. Where mortgage constituted as security

for purchase of personal property
payable in installments: no deficiency
judgment can be asked and any contrary
agreement shall be void.

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QUASI-CONTRACTS CONCURENCE AND PREFERENCE OF

A. SOLUT/0 INDEBITI
The principle of solutio indebiti provides that if
something is received when there Is no right to
demand it, and it was unduly delivered through
mistake, the obligation to return it arises.
CREDITS
Concurrence of Credit implies possession by
two or more creditors of equal rights or
privileges over the same property or all of the
property of a debtor.

In such a case, a creditor-debtor relationship is Preference of Credit is the right held by a

created under a quasi-contract whereby the
payor becomes the creditor who then has the
right to demand the return of payment made by
mistake, and the person who has no right to
receive such payment becomes obligated to
return the same.
The principle of solutio indebiti applies where:
1. A payment is made when there exists no
binding relation between the payer, who
has no duty to pay, and the person who
received the payment;
2. The payment is made through mistake, and
not through liberality or some other cause.
(Siga-An v. Villanueva, GR 173227, 2009)
B. NEGOT/ORIUMGEST/0
One who voluntarily takes charge of the
agency/management of the business or property
'~- . of another (without any power from the latter), is
obliged to continue such agency or management
,;·
•;
... until:
·~·
1. The termination of the affair or its incidents;
r: I
or
<..'
2. He has required the person concemed to
f' , .. substitute him (if the owner is in a posltion
I
to do so).
However, this juridical relation does not arise in
the following:
1. When tile property or business is NOT
neglected or abandoned.
2. If the manager has been impliedly
authorized by _the owner.
----- end of topic -----·-
creditor to be preferred in the payment of his
claim above others out of the debtor's assets.
• Preference creates no interest or lien on the
property, but merely a preference to the
application of the proceeds.
• The right of preference can be made
effective only by being asserted and
maintained. Otherwise, it is lost
General Provisions
1. The debtor is liable with all his property,
present and future, for the fulfillment of his
obligations, subjects to exemptions provided
bylaw.
Exempt property:
a. Present property
i. Family home (Arts. 152, 153 &
155) 0;
ii. Right to receive support as well as
money or property obtained by
such support shall not be levied
upon en attachment or execution
(Art. 205)
Ill. Sec. 13, Rule 39, Rul~a of Court
(Ordinary tao ls, lettered
gravestones, necessary clothing,
etc.):
iv. Sec. 118, the Public Land· Act,
(C.A. No. 141, as amended)
b. Future property
• A debtor who obtains a discharge from
his debts on account' of insolvency, is
not liable for the unsatisfied claims of his
creditors with said property {Insolvency
Law, Act No. 1956, Secs. 68 and 69)

c. Property in custoaie legis and of public

.....J domain .

L· 2. Insolvency shall be governed · by the

Financial Rehabilitation and Insolvency Act
(RA No. 10142). The FR/A repealed the
InsolvencyAct (Section 148, FR/A)

·-·
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3. Exemption of conjugal property or absolute Classification of Credits

community or property provided that:
a. Partnership or community subsists;
b. Obligations of the insolvent spouse
have not redounded to the benefit of
the family;
4. If there is co-ownership, and one of the co.
owners is the insolvent debtor, his undivided
share or interest in the property shall be
possessed by the assignee in insolvency
proceedings because it is part of his assets.
1. Special preferred credits (Arts. 2241 and
2242)
a. Considered as mortgages or pledges of
real or personal property or liens wltnin
the purview of legal provisions
governing insolvency.
b. Taxes due to the State shall first be
satisfied.
2. ·Ordinary preferred credits (Art. 2242) •
preferred in the order given by law

5.- Property held by the Insolvent debtor as a 3. Common credits (Art 2245) • credits of
trustee of an express or implied trust, shall any other kind or class, or by any other right
be excluded from the insolvency or title not comprised in Arts. 2241-2244
proceedings. shall enjoy no preference
:i:

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. ARTICLE 2241 · ARTICLE 2242 ARTICLE 2244

(1) Duties, taxes and fees due (1) Taxes due upon the land (1) Proper funeral expenses for
thereon to the State or any or building; the1'debtor, or children under his
subdivision thereof; or :.her parental authority who
(2) For the unpaid price of have no property of their own;
(2) Claims arising from real property sold, upon the when approved by the court;
.--,I misappropriation, breach of trust, or immovable sold;
'·· malfeasance by public officials (2) Credits for services rendered
committed In the performance of their (3) Claims of laborers, the insolvent by employees,
..... _. masons, mechanics and
duties, on the movables, money or laborers, or household helpers
<, securities obtained by them; other workmen, as well as of
architects, engineers and
for one year preceding the
commencement of the
(3) Claims for the unpaid price of contractors, engaged in the proceedings in Insolvency;
.·• I
movables sold, on said movables, so construction, reconstruction
..... long as they are in the possession of or repair of buildings, canals (3) Expenses during the last
the debtor, up to the value of the or other works, upon said illness of the debtor or of his or
,, \ same; and if the movable has been buildings, canals or other her spouse and children under
' I resold by the debtor and the price is works; his or her parental authority, If
still unpaid, the lien may be enforced they have no property of their
.. _. I
('
, on the price; this right is not lost by (4) Claims of furnishers of own;
the immobilization of the thing by materials used in the
destination, provided it has not lost construction, reconstruction, (4) Compensation due the
its form, substance and identity; or repair of buildings, canals laborers or their dependents
neither is the right lost by the sale of or other works, upon said under laws providing for
the thing together with other property buildings, canals or other indemnity for damages in cases
for a lump sum, when the price works; of labor accident, or illness
thereof can be determined resultinq from the nature of the
(5) Mortgage credits employment;
proportionally;
recorded in the Registry of
r: .... \
(4) Credits guaranteed with a pledge Property, upon the real (5) Credits and advancements
so long as the things pledged are in estate mortgaged; made to the debtor for support of
the hands of the creditor, or those himself or herself, and family,
(6) Expenses for the during the last year preceding the
guaranteed by a chattel mortgage,
"-..... preservation or improvement insolvency;
-'c, , ) upon the things pledged or
of real property when the law
mortgaged, up to the value thereof;
,r· ". authorizes reimbursement, (6) Support during the insolvency
(5) Credits for the making, repair, upon the Immovable proceedings, and for three
r: safekeeping or preservation of preserved or improved; months thereafter;
personal property, on the movable
~ (7) Credits annotated in the (7) Aines and civil indemnification
( . thus made, repaired, kept or
Registry of Property, in virtue arising from a criminal offense;
possessed;
of a judicial order, by .I
(6) Claims for laborers' wages, on the aftachments or executions, (8) '. Legal expenses, and
upon the property affected, expenses incurred in the •
goods manufactured or the work
·..
.<
administration of the insolvent's
done; and only as to later credits;
estate for the common interest of
(7) For expenses of salvage, upon (8) Claims of co-heirs for the creditors, when properly
the goods salvaged; warranty in the partition of an authorized and approved by the
immovable among them, court;
(8) Credits between the landlord and upon the real property thus
(9) Taxes and assessments due

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the tenant, arising from the contract
of tenancy on shares, on the share of
each in the fruits or harvest;
(9) Credits for transportation, upon
the goods carried, for the price of the
contract and incidental expenses,
until their delivery and for thirty days
thereafter;
(10) Credits for lodging and supplies
usually furnished to travellers by
hotel keepers, on the movables
belonging to the guest as long as
such movables are In the hotel, but
not for money loaned to the guests;
(11) Credits for seeds and expenses
for cultivation and harvest advanced
to the debtor, upon the fruits
harvested;
(12) Credits for rent for one year,
upon the personal property of the
lessee existing on the immovable
leased and on the fruits of the same,
but nol on money or instruments of
credit;
(13) Claims in favor of the depositor if
the depositary has wrongfully sold
the thing deposited, upon the price of
the sale.
.e
CIVIL LAW
divided; the national government, other
than those mentioned in articles
(9) Claims of donors or real 2241, No. 1, and 2242, No. 1;
property for pecuniary
charges or other conditions (10) Taxes and assessments due
imposed upon the donee, any province, other than those
upon the immovable referred to in articles 2241, No. 1,
donated; and 2242, No. 1;
(10) Credits of insurers, upon (11) Taxes and assessments due
the property Insured, for the any city or municipality, other
insurance premium for two than those indicated In articles
years. 2241, No. 1, and 2242, No. 1;
(12) Damages for death or
personal Injuries caused by a
quasi-delict;
(13) Gifts due to public and
private institutions of charity or
beneficence;
(14) Credits, which, without
special privilege, appear In (a) a
public instrument; or (b) in a final
judgment, if they have been the
subject of litigation. These credits •
shall have preference among
themselves in the order of priority
of the dates of the instruments
and•'./ of the judgments,
respectively.
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Order of Preference of Credit
' 1. Credits which enjoy preference with respect
' I
to specific movables, exclude all others to
the extent of the value of the personal
property to which the preference refers.
.•...,
( I 2. If there are 2 or more credits with respect to
the same specific movable property, they
''"- .. 1 shall be satisfied pro rete, after the payment
of duties, taxes and fees due the State or
~']
.. ., any subdiVision thereof
-r-,
; } 3. Those credits which enjoy preference in
'·' relation to specific real property or real
,,rr-., rights, exclude all others to the extent of the
It.••
value of the immovable or real right to which
the preference refers.
4. If there are 2 or more credits with respect to
the same specific real property or real
rights, they shall be satisfied pro rata, after
the payment of the taxes and assessment of
the taxes and assessments upon the
immovable property or real right.
5. The excess, if any, after the payment of the
credits which enjoy preference with respect
to specific property, real or personal, shall
be added to the free property which the
debtor may have, for the payment of other
credits.
6. Those credits which do not enjoy any
preference with respect to specific property,
~[ l and those which enjoy preference, as to the
. ... , amount not paid, shall be satisfied according
,..
.-· to the followinqrules:
• Order established by Art. 2244;
o Credits for services rendered by
.1· '\
employees or laborers to the debtor
shall enjoy first preference under
r, Article 2244. (FRIA, Section 133)
·1 .:
• Common credits referred to in Art. 2245
shall be paid pro rata regardless of dates.
NOTE: Preference of mortgage credits is
determined by the priority of registration,
following the maxim "prior tempore potior jure"
··:.. (He who is first in time is preferred in right).
·~-.:
4' \
1...,..,
...... i
(. :
,_'
•
CIVIL LAW
The preference under Article 110 of the Labor
Code when not falling under Articles 2241 and
2242 of the Civil Code and not attached to any
specific property is an ordinary preferred credit
although its impact is to move it from the second
priority to first priority in the order of preference
established by Article 2244 (DBP v. NLRC, G.R.
No. 86932 June. 27, 1990).
If a corporation is being rehabilitated and a
judicial stay order is issued enjoining the filing of
claims against the corporation, the corporation's
creditors can proceed against the sureties. The
judicial stay order does not cover claims against
sureties who are solidarily liable with the
corporation under rehabilitation. Actions against
the sureties may proceed independently.
(JAPRL v. SBC, G.R. No. 190107, 2011)
The "complementary-contracts-construed
together" doctrine . means that an accessory
contract must be read together with the principal
agreement. (PBC vs. Lim, G.R. No. 158138,
2005)
Art. 2045 (09, BAR): any clause giving one of
the parties power to choose more arbitrators
than the other is void and of no effect. What is
voided is the clause, and not the entire contract.
Pertinent Rules under the FRIA
Under the FRIA, the assets of an insolvent
debtor are divided among · its creditors by
following the following rules:
General Rule: The assets of the insolvent
debtor shall be divided among the creditors in
accordance with the L(quidation Plan submitted
by the Liquidator and approved by the Court.
The rules on concurrence and preference of
credits under the NCC and other relevant laws
shall be observed in the Liquidation Plan.
Exception: Unless a preferred creditor
voluntarily waives his preferred right. (R.A. No.
10142, Sec. 133).
•
--·-"- end of topic -·······
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Fungible I
Except: Movable I personal
consumable Non-consumable
consumable if used property
(e.g., money)
for exhibition
•,
purposes only t

Use or consumption
Temporary use of
Consumption Safekeepin'g
the thing
Exchange (sale)
Take care of the
Take care of the
thing
thing with due
diligence Return a thing of Exchange a thing of
Do not use the thing
the same kind and the same kind,
deposited unless
Return the thing quality quality and quantity
authorized or is
upon expiration of
required for its
period or purpose
reservation
Passes to the other
Retained by the
Retained by bailer Passes to bailee party (mutual
depositor
exchan e
Anytime, if no
period or purpose
has been agreed
Cannot demand
upon or if by mere
return because
tolerance only
Only after the contract is already
(precarium)
explration of the Anytime extinguished
•
period
If there is an urgent
~ Rescission only if
necessity
grounds exist
Acts of ingratitude
b the bailee

Always gratuitous Generally onerous Generaliy gratuitous Always onerous

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r:
\ ) XI. LAND TITLES AND DEEDS A. TORRENS SYSTEM

TOPIC OUTLINE UNDER SYLLABUS CONCl:PT

1 ... A. Torrens systemi general prlnclpl11
{ i 1. beflnltlo11 of Tei'rtls
B. Original registration
1. Ordinary registration A title to real property is the evidence of the
a. Who may apply owner's right or extent of his interest, by which
r,
t ;
b. Decree of registration he can maintain control and assert his right to
'- I c. Review of decree of registration; exclusive possession and enjoyment of the
,,r=,) innocent purchaser for value property. (Evangelista v. Santiago, G.R. 157447,
1_ , April 29, 2005 citing Nstxisc Pena, et al.,
..~ C. Certificate of Title Registration of Land Titles And Deeds 3 (1994
~. ;· ed.))
,··
: J
.
0. Subsequent registration
1. Voluntary dealings; general A deed is an instrument in writing by which any
'··
provisions real estate or interest therein ls created,
2. Involuntary dealings alienated, mortgaged, or assigned, or by which .
a. Adverse claim title to any real estate may be affected In law or
b. Notice of lis pendens equity.

E. Assurance Fund Land registration is a judicial or administrative

1. Action of compensation from proceeding whereby a person's claim over a·
funds particular land ls determined and confirmed or
I
·; 2. limitation of action recognized so that such land and the ownership
thereof may be recorded in a public registry.

The Torrens System is a system of registration

of transactions with interest in land the object of
which is, under . governmental authority, to
establish and certify the ownership of an
absolute ena indefeasible title to realty, and to
·I
,· r
simplify Its trat1sfer. ( Grey Alba v. De la Cruz,
' ' G.R. No. 5246, September 16, 1910 citing Hogg
on Australian Torrens System.)

II. Purposes of land registration under the

!'••
Torrens System

• To quiet title to the land and to stop

forever any question as to the legality of
said title, except claims which were
noted at the time of registration, in the
certificate, or which may arise •
subsequent thereto
Relieves the 'land of unknown
1 .... claims
Gives every registered owner
complete peace of mind
• To guarantee the integrity of land titles
and to protect their indefeasibility once
the claim of ownership is established
and recognized

' Page 333 of 432

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• To avoid possible conflicts of title to real
property
• To facilitate transactions relative thereto
by giving the public the right to rely upon
the face of a Torrens certificate of title
and to dispense with the need of
inquiring further, except when the party
concerned has actual knowledge of
facts and circumstances that should
impel a reasonably cautious man to
make such further inquiry. (Sps. Peralta
v. Heirs of Abalon, G.R. No. 183448,
June 30, 2014)
• To issue a certificate of title to the owner
which shall be the best evidence of his
ownership of the land
NOTE: Regl5tratlon under the Torrens system,
not being a mode of acquiring ownership, does
not create or vest title. The Torrens certificate of
title is merely an evidence of ownership or title in
the particular property described therein.
(Casimiro Development Corporation vs. Mateo,
G.R. No. 175485, July 27, 2011)
The purpose of land registration is not the
acquisition of lands but only the registration of
title which the applicant already possessed over
the land. (Republic v. CA, G.R. Nos. L-43105, L-
43190, August 31, 1984)
Ill. Nature of land registration proceedings
under the Property Registration Decree (P.O.
1529)
1. Judicial in character and not merely
administrative
2. A proceeding in rem
In a registration proceeding, the judgment of the
court confirming the titre, and ordering. its
registration in one's name constitutes, when
final, res judicata against the whole world.
(Ronald fing v. Heirs of Lirio, G.R. No. 168913,
March 14, 2007)
In land registration proceedings, being in rem,
there is no need to personally notify the owners
or claimants of the land sought to be registered
to vest the courts with power and authority over
the res. (Guido-Enriquez v. Victorino, et el., G.R.
No. 180427, September 30, 20131
CIVIL LAW
LAWS GOVERNING LAND REGISTRATION
i. Property Registration Decree (P.O. 1529,
as amended)
ii. Cadastral Act (Act 2259, as amended)
iii. Public Land Act (C.A. 141, as amended)
iv. Indigenous Peoples' Rights Act (R.A.
8371)
v. Emancipatl<;>n Decree (P.D. 27, as
amended)
vi. Comprehensive Agrarian Reform Law of
1988 (R.A. 6657, as amended)
ADMINISTRATION OF THE TORRENS
SYSTEM
I. Land Registration Authority (LRA):
Agency charged with the efficient execution of
the laws relative to the registration of lands,
under the executive supervision of the OOJ.
(Sec. 4, P.D. 1529)
Functions of the L~A: (SAC)
1. Extend .§peedy and effective assistance
to the Dept. of Agrarian Reform, the Land
Bank, and 'other agencies in the
implementation'. of the land reform program •
' of the government;
2. Extend Assistance to courts in ordinary
and cadastral land registration proceedings;
and
3. Be the £entral repository of records
relative to original registration of lands titled
under the Torrens system, including the
subdivision and consolidatlon plans of titled
lands. (Sec. 6(2), P.O. 1529)
II. Register of Deeds (ROD)
The office of the ROD is the publlc repository of
records and instruments affecting registered or. •
unregistered lands and chattel mortgages in the
province or city wherein such office is situated.
(Sec. 10, P.o: 1529) ·
Functions of the ROD: (PRIDe)
1. Immediately ,Begister an Instrument
presented for registration dealing with real
or personal property which complies with
the requisites for registration;
~- See to it that said instrument bears the
~roper documentary stamps and that the
same are properly cancelled;
3. If the instrument is not registrable, Deny
the reglstr~tion thereof and inform the
presenter of such denial in writing, stating
the ground or reason therefore, and
Page 334 of 432
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advising him of his right to appeal by parties;

consulta in accordance with Sec. 117 of • Where required certificates or documents
P.O. 1529; and such as OAR clearance, copy of latest tax
4. Prepare and keep an [ndax system which declaration, are not submitted. (Balbin v.
contains the names of all registered owners ROD, G.R. No. L-20611, 1969)
and lands registered in their names. (Sec.
12, P.O. 1529) NOTE: Any disposition of private
agricultural lands made prior to June 15,
;,, .i The function of the ROD with reference to 1988, when RA 6657 took effect, must be
registration of deeds, encumbrances, registered within 3 months from said date
instruments, and the like is ministerial in or on or before September 13, 1988 to be
nature, provided the applicant complies with all valid. (Sec. 6, RA 6657) Thus, on this
the requisites. (Baranda v. Gustilo, G.R. No. ground, the proper DAR clearances must
t..... ' · 81163, September 26, 1988) first be secured.
• I
··- NOTE: Basic formal requirements of deeds Where the transfer/sale involves a total
and other voluntary instruments: (See Sec. 112, aggregate landholding of 5 has. and
P.D. 1529) below of a particular landowner and the
• In a public instrument transferee will not own an aggregate of
' .. • Signed by the person/s executing the more than 5 has., the transfer is legal and
proper but a DAR clearance Is needed for
.
(''"

-
same
• Executed in the presence of least 2
witnesses present who shall also sign
the purpose of monitoring and as requisite
for registration. (DAR AdministrativeOrder
No. 05-06)
the same
1...,..
• Acknowledged to be the free act and
deed of the person/s executing the • The ROD may also refuse to register a
same before a notary public or other private document since Section 112 of P .D.
public officer authorized to take 1529 provided that deeds of conveyances
t ·~.~ acknowledgement affecting lands should be verified and
acknowledged before a notary public or
It is enough that in the ROD's opinion, an other public officer· authorized by law to
instrument is registrable for him to register it. take acknowledgement. (Gallardo v. /AC,
The act being an administrative act does not G.R. No. L-67742, 1987)
contemplate notice to and hearing of interested
parties. (Ledesma v. Villasenor, G.R. No. L- NOTE: When the ROD is in doubt as to the
18725, March 31, 1965) proper action to take on an instrument or deed
presented to him for registration, he should
The determination of whether a document is submit the question to the Administrator of the
{ \
valid or not Is a function that belongs to a court LRA en consulta. (P.D. 1529, Sec. 117)
of competent jurisdiction and not to the ROD.
(Almfrol v. ROD of Agusan, G.R. No. L-22486,
March 20, 1968)

Instances when the ROD may validly deny

registration of a voluntary instrument..
• Where there is more than 1 copy of the
owner's duplicate certificate of title and not '
•
all such copies are presented to the ROD;
• Where the voluntary instrument bears on its ..
,\:
(
face an infirmity (e.g., where the property is
presumed to be conjugal but the instrument
of conveyance bears the signature of only
one spouse);
• Where the validity Of the Instrument sought
:. . to be registered is in issue in a pending
court suit, notice of which must be given to
Page 335 of 4~2
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NON-REGISTRABLE PROPERTIES .. Seawater;

An applicant for land registration should know Those found on private lands
what properties or lands cannot be subject of which also belong to the State:
private appropriation. • Continuous or intermittent
w1tor1 rl1lng on 1uch
NOT~: The Land Registration Court has no lands;
jurisdiction over non-reqlstrable properties and • Lakes and lagoons
cannot validly adjudge the registration of title in naturally occurring on
favor of the applicant for the registration of the such lands;
same. (Republic v. Feliza, G.R. No. 182913, • Rain water and falling on
November 20, 2013) such lands;
• Subterranean or ground
· NON-REGISTRABLE PROPERTIES waters; and
Art. 420, NCC Properties of public • Waters in swamps and
dominion marshes
The 1935, Forest or timberland, public
Classlflcations: 1973, and forest, forest reserves lands,
1. Those intended for public· 1987 mineral lands
use, such as roads, rivers, Constitution
torrents, ports and bridges Jurisprudence Other kinds of non-
constructed by the State, registrahle properties:
banks, shores, roadsteads,
• Mangrove swamps
and others of similar
• Foreshore land and
character.
seashore
2. Those which belong to the
State; without being for • Navigable rivers, •
public use, and are streams and creeks
Intended for: • Lakes and bays
a. Public service or • Military reservations
b. The development • Other kinds of
of the national reservations (i.e.,
wealth. reservations for
specific purposes
Arts. 5 & 6, The following belong to the made by executive
Water Code State: proclamation)
(PD 1067) • Rivers and their natural :i· • Watersheds
beds; ·:! • Grazing lands
• Continuous or intertnittent
waters of springs and
brooks running in their
·, ..
iiI •

r
Previously titled land
Man-made alluvial
deposit alone river
•
natural beds and the beds
'
themselves;
• Natural lakes and lagoons;
• All other categories of
surface waters such as
water flowing over lands,
water from rainfall whether
natural or artificial. and
water from agriculture
runoff, seepage and
drainage;
• Atmospheric water;
• Subterranean or ground
water;

Page 336 of 432

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()
Classification of Lands of the Public Do,nain: Amunafegui v. Director of Forestry, G.R. No. L-
C) The classification of land Is the exclusive
prerogative of the executive and not of the
27873, November 29, 1983)

Judiciary. A positive act of government Is needed to

declassify land which is classified as forest and
,.. , Under the 1987 Constitution: convert it into alienable and disposable land for
·I
'·.
I
(a) Agricultural - the only classification subject agricultural or other purposes. (Yu Chang v.
to alienation Republic, G.R. No. 171726, February 23, 2011)
(b) Forest or timber
(c) Mineral lands The State has an imprescriplible right to cause
(d) National parks the reversion of a piece of property belonging to
the public domain if title has been acquired
Under the Public Land Act {C.A.141): through fraudulent means. (Republic v. Heirs of
(a) Alienable/disposable: Alejaga, G.R. No. 162024, December 3, 2002)
s"<....· I I, Agricultural
ii. Residential, commercial, industrial A land classified as a military reservation zone,
( ' iii. Educational, charitable until reclassified or released from the said
·\.: iv. Reservations for town sites and for classification remains inalienable public land.
public and quasi-public uses (Republic v. Southside, G.R. No. 156951,
(b) Timber lands: inalienable September 22, 2006)
(c) Mineral lands: inalienable
/'-·.
i) - NOTE: If patent or title is issued, it is "Regalian Doctrin~"
void ab initio for lack of jurisdiction
Under the Regaliap doctrine, all lands of the
·O General Rule: Land of public domain is not public domain belong to the State, which Is the
subject to acquisitive prescription even if source of any asserted right to ownership of
claimant is In possession for a long time. It will land. All lands of -the public domain, waters,
not ripen into ownership. minerals, coal. petroleum and other mineral oils,
all forces of potential energy, fisheries, forests,
Exception: Mineral lands and forest lands or timber, wildlife, flora and fauna, and natural
1.:"' l

'··,.'
acquired before Inauguration of the resources belong to the state. With the
Commonwealth on November 15, 1935 because exception of agricultural lands, all other natural
r-
. I there are vested rights which are protected. resources shall not be alienated. (Sec. 2, Article
XII, 1987 Constitution)
r: Fishponds
'·~ ...!
Before: It was included in the definition of The word "agricultural land" as used in the
,... ,
·~· ~ agriculture: therefore, the conversion of constitutional provision is a generic term
\.., agricultural land to fishponds did not change the excluding timber and mineral land. It includes
character of land. agricultural land proper as well as residential,
industrial, and commercial land.
Now: It has a restricted meaning; Fishponds are
of a distinct category and cannot be alienated Anyone who applies for confirmation of imperfect
but may be leased from government. title has the burden of proof to overcome the
presumption that the land sought to be
registered forms part of public domain. •
NOTE: It Is not the court which determines the '
classification of lands of the public domain into To overcome this presumption, incontrovertible
agricultural, forest or mineral but the Executive evidence must be established that the land
. ... ·· Branch of the government, through the Office of subject of the application is alienable or
the President. (Bureau of Forestry v. CA, G. R. disposable.
No. L-37995, August 31, 1987)
The Public Land Act or C.A. 141, until this day,
The classification is descriptive of its legal nature is the existing general law governing the
or status and does not have to be descriptive of classification and disposition of lands of the
what the land actually looks like. (Heirs of Jose public domain, except for timber and mineral
'.; :' lands. "Under the Regalian doctrine embodied in
__,I Page 337 of 432
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our Constitution, land that has not been acquired CITIZENSHIP REQUIREMENTS
from the government, either by purchase, grant,
or any other mode recognized by law, belongs to I. Limitation to Ownership of Land By
the State as part of the public domain." Individuals
(Republic v. Jaralve, G.R. No. 175177, Oct. 24, Only Filipino citizens may:
2012 citing Republic v. Heirs of Juan Fabio, G.R. • Acquire not more than 12 hectares by
No. 159589, Dec. 23, 2008) purchase, homestead or grant, or
• Lease not more than 500 hectares of
To prove that the land subject of the application alienable lands of the public domain.
for registration is alienable, an applicant must
establish the existence of a positive act of the Any foreign investor investing in the Philippines
government such as a presidential proclamation shall be allowed to lease private lands provided
or an executive order; an administrative action; that no lease con,tract shall be for a period
investigation reports of Bureau of Lands exceeding 50 year~ renewable once for a period
investigators; and a legislative act or statute, and of not more than ?5 years. (Sec. 4, Investors
the applicant may also secure a certification Lease Act, R.A. 7652)
from the Government that the lands applied for
are alienable and disposable. (Aranda v.
Republic, G.R. 172331, 2011) II. Limitation to Ownership of Land By
Corporation:

When Government Grant Deemed Acquired 1. Private Lands

by Operation of Law: • By corporations at least 60% of
1. Deed of conveyance issued by whose capital must be Filipino-
government patent/grant owned (Sec. 7, Art. XII, 1987
2. Registration with the ROD: mandatory, it is Constitution) •
the operative act to convey and transfer ~ • Restricted as to 'extent reasonably
title necessary to enable it to carry out
3. Actual physical possession, open and purpose for which it was created
continuous • If engaged in agriculture, it is
restricted to 1,024 hectares
Effects
1. Land ceases to be part of public domain 2. Patrimonial Property of the State (Sec.
& ownership vests to the grantee 3, Art. XII, 1987 Constitution)
2. Any further grant by Government on the
• May only lease (cannot own land of
same land is null and void
the public domain) for 25 years,
3. Upon registration, title is indefeasible
renewable for another 25 years
• Limited to 1,000 hectares
Concept of Native Title; Time Immemorial •
• Applies to both Filipino & foreign
corporations
Native title refers to pre-conquest rights to lands.
and domains which, as far back as memory
NOTE: Determinative of this issue is the
reaches, have been held under a claim of private
character of the parcels of land - whether they
ownership by Indigenous Cultural
were still public or already private - when the
Communities/Indigenous Peoples (ICCs/lPs),
registration proceedings were commenced. If
have never been public lands and are thus
they are already private lands, the consmuttonal
indisputably presumed to have been held that
way since before the Spanish Conquest. (Sec. prohibition against acquisitions by a private
3(L), Ch. Ill, R.A. 8371) corporation would not apply. (Natividad v. CA,
G.R. No. 88233, 1991)
NOTE: The Regalian Doctrine does not negate
Ill. General Limitations
native title.
Aliens, whether individuals or corporations, have
been disqualified ftpm acquiring lands of the
public domain. Hence, by virtue of the aforecited
constitutional provision, they are also
Page 338 o.t 432
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,
disqualified from acquiring private lands. (Taylor B. ORIGINAL REGISTRATION
( .. \
v. Taylor, G.R. No.164584, June 22, 2009)
'·
Original Registration under P.O. 1529 is a
I'.
As an exception, ptlvate lands may be proceeding brought before the RTC (as a land
l J
transferred or conveyed to aliens, corporations, registration court) to determine title or ownership
or associations not qualified to acquire or hold of land on the basis of an application for
t .i lands of the public domain in cases of hereditary registration or answer by a claimant in a
succession. (Sec. 7, Art. XII, 1987 Constitution) cadastral registration.
The constitutional ban against foreigners applies An Original Certificate of Title (OCT) is the first
' only to ownership of Philippine land and not to
·' the improvements built thereon. (Beumer v,
title Issued in the name of the registered owner
by virtue of judicial/voluntary or administrative/
J"''"'•. Amores, G.R. No. 195670, December 3, 2012)
"·- involuntary proceedings. (Salao, et al. v. Salao,
G.R. No. L-26699, 1976)
--- end of topic --- REGISTRATION PROCESS AND
-.· .\
REQUIREMENTS
{., .'

rr...... !. I. Kinds of Registration:

_,
1. JudicialNoluntary/Ordinary - by filing
with the proper court; application by the
private individual himself
2. Administrative/lnvoluntarylCadastral
- compulsory registration initiated by the
government
('"•
'
"'·-·'
1. ORDINARY REGISTRATION
t-.-·
II. Procedure in Ordinary Land Registration
Proceedings
Under P.O. 1529 and C.A. 141, the
following requisites should all be satisfied:
(SAD-TraPu-MAHP-FESE)
. r·· 1
1. Survey of land by the Bureau of Lands
or a duly licensed private surveyor
(a) Survey plan must be duly
approved by the Director of
Lands.
:,i
2. Filing of Application for registration by
the applicant together with all the
1
muniments of titles and copies thereof
with a survey plan approved by Bureau
of Lands .
•
.:,.,)
3. Setting of the Qate of initial hearing of
application by the RTC
(a) Within 5 days from filing; initial

' NOTE: Muniments of title are instruments or written

evidence which the applicant holds or possesses to enable
him to substantiate and prove title to his estate. (e.g., Deed
.. _,i of Sale/Donation/Assignment) .

.. ) Page 339 of 432

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hearing shall held 45--90 days
from date of the order
4. Transmittal of the application and the
date of the initial hearing, with all the
documents or other evidence attached
thereto, by the Clerk of Court to the LRA
5. Publication of notice of initial hearing
(mandatory)
a. Once in the Official Gazette
(OG) (this confers jurisdiction
upon the court)
b. Once in a newspaper of
general circulation
Purposes and effects of publication:
• To confer jurisdiction over the
land applied for upon the court
• To charge the whole world with
knowledge of the application of
the land involved, and invite them
to take part in the case and
assert and prove their rights over
the subject land
Effect of defective publication
A defective publication of the notice of
initial hearing deprives the court of
jurisdiction.
NOTE: If it is shown that the decree of
registration had included lands not
included in the original applicaUon as
published, then the registration
proceedings are null and void insofar as
the land not included in the publication is
concerned. (Benin v. Tuason, G.R. No.
L-26127, June 28, 1974)
6. Mailing and posting of notice of initial
hearing
Mailing
Within 7 days after publication of said
notice in the OG, the LRA shall mail
notice to:
a. Persons named in the notice
b. Sec. of Public Highways,
Provincial Governor, and Mayor, if
the applicant requests to have the
line of a public way or road
determined
c. Sec. of Agrarian Reform, Solicitor
General, Director of Lands,
Director of Fisheries, and Director
CIVIL LAW
of Mines, if the land borders on a
river, navigable stream, or shore,
or on an arm of the sea where a
river or harbor lies
d. Other persons as the court may
deem proper
Posting
Posting shall be made by the sheriff in a
conspicuous place on the subject land
and on the bulletin board of the
municipal building of the municipality or
city in which the land or portion thereof
is situated, at least 14 days before the
date of initial hearlng
7. Filing of ~nswer or Opposition to the
application by any person whether
named In the notice or not (on or before
the date of initial hearing, or within such
further time as may be allowed by the
court.)
Requlsl~es of Opposition
The oppositor (DIGS):
1. Must have an Interest in the land •
' applied. for; ~
2. Should. state the Grounds for his
objection as well asthe nature of his
clalrned'interest;
3. Should Jndicate the Qeslred relief;
and 1
4. Should ~lgn and have the
opposition sworn to by him or his
duly authorized representative.
NOTE: The opposition must be filed on
or before the date of initial hearing.
•
If only a portion Of the land applied for is
contested and such portion is not
properly delimited, the court may. require
submission Of a division plan approved
by the Director of Lands.
Effects of failure to file answer
Absent any opposltor, the court will
issue an order of default pursuant to
Sec. 26 9f P.D. 1529.
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Registered Land and delivery of owner's

GENERAL SPECIAi.. DEFAULT duplicate OCT to the applicant upon
. , DEFAULT .· payment of the prescribed fees.
r:
t ) Those persons who When a party appears at
did not appear and initial hearing without NOTE: Failure to comply with these
...-- . t answer within the having filed an answer requirements wlll justify the court to deny the
time prescribed and asks court for time application for registration. A certificate of title
to file answer but failed issued without fully complying with said
to do so within period requirements is illegal and invalid and may be
allowed cancelled by the courts.

8. Hearing of the case by the court Ill. What to Prove and Evidence to Submit
rr
9. fromulgatlon of Judgment by the court 1. Allenablllty and dlsposabillty of land
,·-) How to prove:
·.:... a. Certification from City Environment
10. Issuance of the order of finality of
,· ' judgment and order Instructing the LRA and Natural Resources Office
~. : to issue a decree2 of confirmation and (CENRO) or Provincial Environment
,,.. registration and OCT. and Natural Resources Office
( ' (PEN RO)
c •'
NOTE: The issuance of the decree of i. If land is less than 50 hectares -
registration is not done by the court. CENRO Certification
What the court issues is the order of ii. If land is 50 hectares or more -
finality of judgment and the order to the PENRO Certification; and
LRA to issue the decree. It is the LRA
which issues the decree as well as the b. Copy of the original classification of
original and owner's duplicate of the land as alienable and disposable
OCT. approved by the DENR Secretary
~-/ and certified as a· true copy by the
11. _sntry of the decree of registration in legal custodian of the official records ..
the LRA. One year after the date of (Republic of the Philippines v.
entry of decree, it becomes Santos, G.R. No. 191516, June 4,..
incontrovertible and amendments will 2014)
not be allowed except for correcting
/-~
' I clerical errors. It is deemed conclusive NOTE: It· is not enough for the PENRO or
as to the whole world. CENRO to certify that a land is alienable and
disposable. The applicant for land registration
-r:: ' Puts an end to litigation
Purpose of Torrens system is must prove that the DENR Secretary had
protected approved the land classification and released
the land of the public domain as alienable and
12. §ending of the original and owner's disposable, and that the land subject of the
:.!. •.. 11 duplicate OCT to the ROD of the city or application for registration falls within the
province where the property is situated approved area per verification through survey by
r - for entry in his registration book .. the PENRO or CENRO. (Espiritu v. Republic,
·..._,.r
G.R. No. 219070, June 21, 2017 & Republic v.
13. §.ntry of OCT by the ROD in the ' Raneses, G.R. No. 189970, June 9, 2014)
•
:._.,
Electronic Primary Entry Book for
Notation in a g·eodetic survey that the survey
was inside alienable and disposable land does
/ )
2
NOTE: Decree - Issued by LRA after finality of judgment; not constitute a positive government act validly
'
'...:....;' contains technical description of land. changing the classification of the land. A
surveyor has no authority to reclassify lands of
a. Decrees dismissing applicallon public domain. Land of the public domain, to be
b. Decrees of confirmation and registration the subject of appropriation, must be declared
(Subject only to appeal)
alienable and dlsposable either by the President
~ .. ,1
or the DENR secretary. The applicant for land
i,
Page 341 of 432
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registration has the burden of overcoming the
presumption of State ownership by establishing
through Incontrovertible evidence that the land
sought to be registered is alienable or
disposable based on a positive act of the
government. (Republic vs. De Guzman Vda. de
Joson, G.R. No. 163767, Mar. 10, 2014)
The property subject of the application for
registration need not be classified as alienable
and disposable agricultural land of the public
domain for the entire duration of the requisite
period of possession. Alienable public land held
by a possessor openly, continuously and
exclusively during the prescribed statutory
period is converted to private property by the
mere lapse of such period. The requirement that
the land should have been classified as
alienable and disposable agricultural land at the
time of the application for registration is
necessary only to dispute the presumption that
the land is inalienable. (Malabanan v. Republic,
G.R. No. 179987, Sept. 3, 2013)
2. Identity of land
How to prove:
• Survey plan approved by the Land
Management Bureau (LMB)
• Technical description of the land
• Tax declarations
3. Private ownership (STOP)
How to prove:
(a) .§panish title (inadmissible arid
ineffective proof of ownership In land
registration proceedings filed after
Aug. 16, 1976)
(b) rax declarations and tax payments
(not conclusive evidence of
ownership; must be coupled with
proof of actual possession for the
period required by law)3 . •
(c) Qther kinds of proof
Testimonial evidence
Photos of improvements
introduced
(d) fresidential issuances and legislative
3
Tax declarations or realty tax payments of property are not
conclusive evidence of ownership. At most, they serve as a
good indicia of possession in the concept of an owner. The
voluntary declaration of a piece of property for taxation
purposes strengthens one's bona fide claim of acquisition of
ownership (Republic v. Sta. Ana-Burgos, G.R. No. 163254,
June 1, 2007).
CIVIL LAW
acts (constitutive of a fee simple title
or absolute title in favor of the
grantee; a law ceding full ownership
to a goy.ernment institution)
,,
NOTE: The holder of a Spanish title may still
lose his ownership of the real property to the
occupant who actually possesses the same
for the required prescriptive period. Taking
the law as a whole, it has clearly set a
deadline for the filing of applications for
registration of ALL Spanish titles under the
Torrens system (i.e., 6 months from its
effectivity or on 16 August 1976), after which,
the Spanish titles may no longer be
presented to prove ownership. Spanish titles
can no longer be countenanced as
indubitable evidence of land ownership.
(Santiago v. SBMA, G.R. No. 156888, 2006)
4. Open, exclusive, continuous, and
peaceful possession In the concept
of owner
How to prove:
• Tax declarations
• Regular realty tax payments •
• Muniments of title (e.g., deeds of
sale, wills, donation; to tack
possession to that of
predecessors-in-interest)
• Testimonial evidence
• Evidence of improvements
introduced on the property
•
Page 342 of 432
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P.O. 1529 .C.A. 141

Originalregistration proceedings
1. In rem proceedings
2. Judicial
3. Decree of registration Issued is conclusive and final
;() 4·. Governed bv court orocedure and law of evidence
' WHO MAY APPLY
(OPAL)
(Sec. 14, P.O. 1529)
1. Those who by themselves or through their
predecessors-In-interest have been in Qpen,
continuous, exclusive, notorious possession
.r '
l. ! and occupation of alienable and disposable
lands of the public domain under a bona fide
claim of ownership since June 12, 1945 or
earlier
C,
,l ; 2. Those who acquired ownership of private
lands by Erescription under the provisions of
existing laws
3. Those whO acquired ownership of private
lands or abandoned river beds by right of
·,e> ~ccession or accretion under the existing
laws
4. Those who have acquired ownership of land
in any manner provided for by .!:,_aw
·--
NOTE: Where the land is owned in common, all
the co-owners shall file the application jointly.
Where the land has been sold under pacto de
retro, the vendor a retro may fife an application
.!!. • for the original registration of the land, provided,
however, that should the period for redemption
expire during the pendency of the registration
proceedings and ownership to the property
,".'--
consolidated in the vendee a retro, the latter shall
·!, ..,' be substituted for the applicant and may continue
the proceedings.
MATIER GOVERNED
Confirmationof imperfector incomoletetitle
NATU'RE
1. Those who by· themselves or through their
predecessors-in-interest have been in Open,
continuous, exclusive, notorious possession
and occupation of alienable and disposable
lands of the public domain under a bona fide
claim of acquisition since June 12, 1945 or
earlier. or even since time immemorial.
2. Those who by themselves or their
predecessors-in-interest have been prior to
the effectivity of PD 1073 on January 25,
1977, in open, continuous, exclusive, and
notorious possession and occupation of
agricultural lands of the public domain,
under a bona · fide claim of acquisition of
ownership, for at least 30 years.
3. Private corporations or associations which
had acquired lands, formerly part of the
alienable and disposable lands of the public
domain, from Filipino citizens who had
possessed the same in the manner and for
the length of time a~ indicated above.
I
4. Natural-born Filipino citizens who have lost
their Philippine citizenship, who have
acquired disposable and alienable lands of
the public domain from Filipino citizens who
had who had possessed the same in the
manner and for the length of time as
indicated above.

A trustee on behalf of his principal may apply for , •

.f original registration of any land held in trust by
', him, uruess prohibited by the instrument creating
(, the trust.
:~..... ;
General rule: All these persons must be natural-born Filipino citizens.
' . Exceptions:
j
. . . ... · • Juridical persons may apply for registration of the lease of agricultural and disposable
land not exceeding 1,000 hectares in area for a period of 25 years and renewable for not
,,.
' more than 25 years (Sec. 3, Art. X/1, 1987 Constitution)
• When the land has been previously acquired by prescription by a natural person and
subseauentlv transferred to a juridical entity. In this case, a corporation may apply for
'--·~-~~~__;_...;..;..;...;i.c..;.._.;;J_...;._.c...;.;;_..;_.:...:;....;.:......;;._L-,..;,..,:"'-.:..;.;.~c....;,;_c.....:;_c..::_.::..;:_;:...:...:....;:_.:..::.;.L..:.c..:::..;,;.:..;.;...:.;.;.::..,_.::..<:Jc:.:.L....:.::.C-J

Page 343 of 432

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judicial confirmation of title. (Dir. of Lands v. /AC and ACME, G.R. No. 73002, 1986)

Summary of rule: A juridical entity cannot acquire ownership of disposable and alienable land
nor apply for the registration thereof. The disposable and alienable land must first become
private land by operation of law through the possession and occupation of a Filipino citizen in the
manner and period required by law. The juridical entity may then acquire ownership of such
private land from the Filipino citizen and becomes eligible to apply for the registration thereof in
its name.
NOTE: A Judicial declaration that a parcel of land
is public does not preclude even the same
applicant from subsequently seeking a judicial
confirmation of his title to the same land, provided
he thereafter complies with the provisions of Sec.
48 of C.A. 141, as amended and as long as said
public land remains alienable and disposable.
(Director of Lands v. CA, G.R. No. L-47847,
1981)
WHERE TO FILE APPLICATION
,,.,
General rule: RTC of the province or city where the land is,:51tuated

NOTE: File together with the application all original muniments of titles or copies thereof and a survey
plan of the land as approved by the Bureau of Lands. 1

Under LRA Circular 05-2000, the original tracing cloth plan is no longer forwarded to the LRA; only a
certified copy thereof needs to be forwarded. P.O. 1529 has eliminated the distinction between the
general jurisdiction vested in the RTC and the limited jurisdiction conferred upon it by the former law •
when acting merely as land registration court. Aimed at avoiding multipllclty of suits, the change has
simplified registration proceedings by conferring upon the RTCs the authority to act not only on
original applications but also those filed after original registration, with the power to hear and
determine all questions arising upon such applications or petitions. (Averia v. Caguioa, G.R. No. L-
65129, 1986)

Exception: Delegated jurisdiction of the MTC to hear and determine cadastral or land registration
cases covering:
i. Lots where there is no controversy or opposition, or
ii. Contested lots, the value of which does not exceed P100,000

If there are several parcels of land situated in different provinces/cities belonging to one owner, he
must file in the RTC of each province/city where the different parcels of land are located for •
registration purposes. ·

If land is situated between boundaries of 2 provinces, application must be filed:

i. When boundaries are not defined: with the RTC of the place where it is declared for
taxation purposes;
ii. When boundaries are defined: a separate plan for each portion must be made by a
surveyor and a separate application for each lot must be filed with the appropriate
RTC

In cases of delegated jurisdiction to the MTC, appeal is directed to the CA.

WHEN TO FILE
------ Extended up to December 31, 2020, as provided
In Sec. 2 of R.A. 9176

Page 344 of 432

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() BAR OPERATIONS 2019 CIVIL LAW
('\
~~--~~~~~-~--..:.F~O~R=M~O=F~T~H=E~A~P~P=Ll=C~A~T~IO~N,..._~~~~~~--~~--t
r:
i l (WSfil
'
(
·i. ;
~. '
1.
2.
Written
~igned by the applicant or person duly authorized in his behalf '1
(a) If there is more than 1 applicant, the application shall be signe~ and sworn to by and in
behalf of each. r.
3. §worn to before an officer authorized to administer oath for the province or city where the
application was actually signed (Sec. 15, PD 1529 & Sec. 50, C.A. 141)
CONTENTS OF APPLICATION
{MAD FARCE)
1. ,Manner of acquisition of land
(i" .... j
2. Assessed value of the land and the buildings and other improvements based on the last
x. > assessment for taxation purposes
3. Qescription of the land applied for together with the buildings and improvements; the plan
;\
<.
-~- \
J approved by Director of Lands and the technical descriptions must be attached
4. The court may require facts to be stated in the application in addition to those prescribed by
the Decree not inconsistent therewith and may require the filing of additional papers
5. Full names and addresses of ~II occupants of the land and those of the ~djo!ning owners, if
known; and if not known, the applicant shall state the extent of the search made to find them
6. If the appllcation describes the land as bounded by a public or private way or Boad, it shall
state whether or not the applicant claims any portion of the land within the limits of the way or
road, and whether the applicant desires to have the line of way or road determined (P. D. 1529,
Sec. 20)
7. f.itizenship and f.ivil status of the applicant
(a) if married, name of spouse, and ,
{b) if the marriage has been legally dissolved, when and how the marriage relation was
terminated
_.,, .•.. 8. Mortgage or gncumbrance affecting the land or names of other persons who may have an
~ .: interest therein, legal or equitable (Sec. 15, PD 1529 & Sec. 50, C.A. 141)

NOTE: If the applicant is a non-resident of the Philippines, he shall file an instrument appointing an
;! i

agent residing in the Philippines and shall agree that service of any legal process in the proceeding
made upon his agent shall be of the same legal effect as if made upon the appllcant within the
Philiooines. (Sec. 16, P.O. 1529) _, ......._. __ --1
.r'•
LIMITATION TO AREA FOR APPLICATION
I
Maximum of~1 ~2 ~h'e-c"':"ta-r-es--:-:(S::-e-c.""'3c-,~R.:::-:A-:6~9...,.40'::":)-·--1

:( ~ i'
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·"
•
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,( '
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AMENDMENTS IN ORDINARY HEARING, JUDGMENT, AND POST·

RLCISTR/\ JION PROCEEDINGS JUDGMENT INCIDENTS IN ORDINARY LAND
1. Striking out one or The court may strike ~EGIS'tRA TION
more of the parcels of out al any lime
land applied for or by a Speedy hearing
severance of the The trial court is required to dispose of the case
aoolicatlon within 90 days from the date of submission
2. Substantial change New technical thereof for decision. (Sec. 27, par. 1, P.D. 1529)
In boundaries, description and new
increase in area, publication and NOTE: The court, if it deems necessary, may
inclusion of additional notice are necessary refer the case or any part thereof to a referee
land who shall hear the parties and their evidence,
3. Joinder, File motion with court and the referee shall submit his report thereon to
substitution, or the court within.15 days after the termination of
discontinuance of any such hearing. The court may render judgment in
of the parties accordance with the report as though the facts
4. Decrease fn area File motion with have been found by the Judge hlmself. (Sec. '27,
court; no need for par. 2, P.O. 1529)
new publication or
notice A Judgment is a decision of the court
constituting its opinion after taking into
Summary of Rules consideration the evidence submitted.

1. If the amendment consists in the in°cluslon Judgment rendered in a land registratlort

in. the application for registration an area
or parcel of land,not previously included in
the origihal application, as published, a
new · publication of the amended
application must be made. The purpose
of the new publication is to give notice to
all persons concerned regarding the
amended application.
2. Without a new publication, the registration
court cannot acquire jurisdiction over the
area or parcel of land that is added to the
area covered by the original application,
and the decision of the registration court
would be a nullity insofar as the decision
concerns the newly included land.
3. But if the amendment consists in 'the
exclusion of a portion of the area covered
by the original application and the original
plan as previously published, a new
publication Is not necessary. In the latter
case, the jurisdiction of the court is not
affected by the failure of a new publication
(Benin v. Tuason, GR. No. L-26127,
1974). Amendments in a petition that do
not involve an addition but only a
reduction of the original area that was
published no longer require a sought to be established. After the ownership
republication because the amended area
was already Included in the first
publication. (Republic v. San Mateo, et al.,
G.R. No. 20356, 2014)
, proceeding becomes final upon the lapse of 15 •
days counted from the receipt of notice of the
judgment. (Sec. 30, P.D. 1529, as modifiedby
Sec. 39, B.P 129)
The judgment of the court in the land registration
case becomes final insofar as the State is
concerned 15 days from receipt by the OSG
(not merely by the local designated prosecutor)
of the copy of the decision, without there being
an appeal or motio~ for reconsideration by any
of the parties. (Republic v. Sayo, G.R. No. L-
60413, 1990)
•
However, notwithstanding the lapse of the 15-
day period from receipt of judgment by the
parties, the court continues to retain control over
the case until the expiration of 1 year after the
entry of decree of registration by the LRA.
(Republic v. Assosacion Benevola de Cebu,
G.R. No. 77243, 1989)
In special proceedings, the purpose of execution
of judgment is to establish a status, condition or
fact; in land registration proceedings, the .
ownership by a person of a parcel of land is
has been proved and confirmed by judicial
declaration, no further proceeding to enforce
said ownership is necessary, except when the
adverse or losing party had been in possession
Page 346 of 432
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('·
of the land and the winning party desires to oust a. Decree of registration
'_J him therefrom. (Ronald Ting v. Liro, G.R. No.
168913, 2007) Decree pf registration
(Sec. 31, P.O. 1529)
Partial judgment • The decree issued by the LRA pursuant to
In a case where only a portion of the Jand the order of the court
subject of registration is contested, the court • Binds the land and quiets title thereto,
may render partial judgment provided that a subject only to such exceptions or liens as
subdivision plan showing the contested and may be provided by law
uncontested portions approved by the Director of
,'"'\ • Conclusive upon and against all persons
•, I
'I.,. Lands is previously submitted to said court.
including the national government and all
(Sec.28, P.D. 1529)
branches thereof, whether or not mentioned
by name in the application or notice
Post-Judgment Incidents
Contents of the Decree (DMD-DO)
1. Writ of Possession: is employed to enforce (Sec. 31, P.O. 1529)
a judgment to recover the possession of
land. It commands the sheriff to enter the
1. Date, hour and minute of its entry
land and give possession of It to the person 2. Whether the owner Is Married or unmarried,
entitled under the Judgment; no prescription and If married, the name of the spouse;
against: (1) the loser and (2) anyone provided that: if the land is conjugal
/'
unlawfully and adversely occupying the land
'
<, ·' property, the decree shall be issued in the
name of both spouses
When writ may not Issue: When a party
··~.:.
3. If the owner is under Qisability, the nature
who entered into the property after issuance of such disability, and if a minor, his age
of final decree, is not an oppositor in the
4. Description of the land and shall set forth
registration proceeding, and is in possession
iiie estate of the owner, and also show their ·
of the land for at least 10 years relative easements, liens, attachments, and
other encumbrances
.>,
2. Writ of Demolition: the complement of writ 5. Other matters to be determined in
,1
-,
l of possession; to demolish improvements
pursuance of the law
introduced by the defeated oppositor or his
"'.
', I successor-in-interest Process of Issuing the OCT
(Sec.39-42, P.O. 1529)
~-' Means to Recover Possession 1. Within 15 days from finality of order of
·. ~
... i (a) Forcible entry judgment directing registration of title -
..... (b) Unlawful detainer court orders the LRA to issue decree of
! ... .! (c) Accion publiciana
registration and certificate of title
(d) Ace/on reivindlcatoria 2. Clerk of court will send order of court and
copies of judgment
3. Writ of Demolition may be issued. The
court has authority to order, as a
consequence of the writ of possession •
!' issued by it, the demolition of improvements
introduced by the defeated oppositor or his
.(
successor-in-interest
s •
4. Administrator will issue a decree of
registration and original and duplicate of
OCT that is signed by him, enter, and file
decree of registration In LRA
5. Send to ROD the original and duplicate of
,!' -, title and certificate for entry in his
··...
I '
;· registration book
6. Enter in record book, dated, signed,
'.:.......>.
r '
numbered and sealed to take effect upon
•
. i'
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date of entry
7. ROD to send notice to registered owner
that his owner's duplicate is ready for
delivery after payment of fees
8. ROD shalt send duplicate and note on each
certificate of title to whom it' is issued
9. Original copy to be filed in ROD
10. Bound in consecutive order
b. Review of degree of registration;
innocent purchaser for value
REVIEW OF DECREE OF REGISTRATION
(Sec. 32, P.O. 1529)
• Remedy available in cases of actual fraud
committed in the adjudication or
confirmation of title.
Party to Fiie (Sec. 32, P.O. 1529)
• Any aggrieved party, including persons
deprived of opportunity to be heard,
including the government
• Aggrieved party does not need to. be an
oppositor or original claimant in the
proceedings
Parties who Cannot File
• An opposltor who abandoned his claim
• An oppositor who had notice of the
proceedings but failed to raise his claims
(Crisolo v. CA, G.R. No. L-33093, 1975)
Requisites for Review (ReDeFFiN)
(Walstrom v. Mapa, 181 SCRA 431, 1990)
1. Petitioner has a Real and dominical
right;
2. He was Deprived thereof;
3. Through fraud;
4. Petition is Filed within 1 year from
issuance of the decree; and
5. The property has !fot yet passed to an
innocent purchaser for value
Actual or Extrinsic Fraud
Extrinsic fraud refers to a fraud committed to
the unsuccessful party by his opponent,
preventing him from fully exhibiting his case by
keeping him away from court, a false promise of
a compromise: Or where the defendant never
had knowledge of the suit, being kept in
ignorance by the acts of the plaintiff; or when an
attorney fraudulently or without authority
connives at his defeat. (Baclaran Marketing
Corp. v. Nieva, G.R. No. 1M881, 2017)
CIVIL LAW
Intrinsic fraud refers to the acts of a party at a
trial that prevented a fair and Just determination
of the case, but the difference Is that the acts or
things, like falsification and false testimony,
could have been litigated and determined at the
trial or adjudlcatiol"l .of the case. (Pinausukan
Seafood House v. f,ar East Bank & Trust Co.,
G.R. No. 159926, ?.P14)1.
Examples of Extrl~slc' Fraud (Ramirez v. CA,
GR. L-38185, 1986)
1. When the applicants for registration
suppressed the fact that the petitioners
(for review of decree) were the legal and
rightful owners of the land in question,
and that the applicants merely
possessed the land as antichretic
creditors
2. When the applicant omits other persons'
interests and claims on the land
3. Deliberate misrepresentation that the
land involved was uncontested
4. Obtaining adjudication in the name of a
co-owner, which the applicant knew had •
not been allotted to him in the partition
5. Intentionally concealing facts
6. Conniving with the land inspector
7. Deliberately failing to notify parties
entitled to notice
8. Misrepresenting the identity of the land
involved
9. Inducing a party not to oppose
application
10. Deliberate failure to disclose possession
by other persons
• NOTE: In all cases, the allegation of fraud •
must be substantiated with specific,
intentional acts to deceive and deprive
another of his right (Crisolo v. CA, G. R. No.
L-33093, 1975)
Innocent Purchaser for Value
• For a petition for review of the decree to
prosper, the land must not have passed
to an innocent purchaser for value.
d
Innocent purchaser for value is one who buys
the property of another, without notice that some
other person has a ri'ght or interest in such
property and pays the full price for the same, at
the time of such purchase or before he has
notice of the claims or interest of some other
Page 348 of 432
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( ,...,
\ )
person in the property. (PNB v. Jumamoy, G.R. CADASTRAL REGISTRATION
.... ~,
• ! No. 169901, 2011)
Cadastral Registration is a proceeding in rem
/,. ..... ,
NOTE: Where innocent third persons who rely initiated by the filing of a petition for registration
\ _'
on the correctness of the certificate of title thus by the government, not by the persons claiming
issued acquired rights over the property, the ownership of the land subject thereof, and the
court cannot disregard such rights and order the latter are, on the pain of losing their claim
total cancellation of the certificate. (Tenio- thereto, in effect, compelled to go to court to
Obsequio v. Court of Appeals, G.R. No. 107967, make known their claim or interest therein and to
Mar. 1, 1994) substantiate such claim or interest

Other Grounds for Review Procedure: (NN-CP-PAHD·DI)

1. Fatal infirmity of the decision for want of 1. Notice of cadastral survey published once
due process in OG and-posted in conspicuous place with
~ .. 2. Lack of jurisdiction of the court a copy furnished to the mayor and
{ .. ' barangay captain
.~
,· . 2. Notice of date of survey by the Bureau of
Land Management and posting in bulletin
'··
board of the municipal building of the
municipality or barrio, and he shall mark the
boundaries of the lands by monuments set-
up in proper places thereon
3. £adastral survey
'r • 4. Filing off etition
5. Eublicationi (twice in successive issues of
OG), mailing, posting
·.;.._
6. Filing of ~nswer
7. .!:!earing of the case
8. Qecision
9. [ssuance of the decree and certificate of
title

NOTE: The cadastral court is not limited to a

mere adjudication of ownership in favor of one or
more claimants. : If there are no successful
claimants, the property is declared public land.
Additionally, while the court has no jurisdiction to
adjudicate lands already covered by a Certificate
of Title, it is nonetheless true that this rule only
applies where there exists no serious
controversy as to the certificate's authenticity
vis-a-vis the land covered therein. (Republic v.
Vera, G.R. No. L-35778, 1983) •
BASIS · P.D.·1529 ·' CADASTRAL
Nature Voluntary Compulsory
Applicant Landowner Director of
Lands
Lands 1. Usually All classes of
covered involves private lands are
land included
2. It may also
.... f refer to public
agricultural
lands if the
object of the
•
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action is PATENTS
confirmation of
an imperfect Title Issued Pvrsuant to Registration of
title. Patent: ·
Parties Applicant and Government I 1. Indefeasible when registered, and deemed
. opponent landowners incorporated with Torrens system 1 year
must come to after the issuance of patent
court as
claimants of 2. General Rule: May not be opened 1 year
their own lands after entry by LRA (otherwise, confusion and
-·
Purpose Petitioner Government uncertainty on the government system of the
comes to court asks the court distribution of public lands may arise and
to confirm his to settle and this must be avoided)
title and seeks adjudicate the '
the registration title of the land 3. Exception:, if it is annullable on the ground
of the land in of fraud, then it may be reopened even after
his name 1 year because registration does not shield
Person Landowner Government bad faith
who
requests 4. The court, in the exercise of Its equity
the survey jurisdiction, may direct reconveyance even
~·
Effect of • No adverse • If none of the without orderin~ cancellation of title
( .
judgment claim applicants can ,t
• If the applicant prove that he NOTE: An OCT :issued on the strength of a
fails to prove is entitled to patent partakes Qf the nature of a certificate
his title, his the land, the issued in a judicial proceeding. (Flores v.
application may same shall be Bagaoisan, G.R. No. 173365, Apr. 15, 2010)
be dismissed declared public

l without (res judicata). Homestead Restrictions:

prejudice (no 1. Land cannot be alienated within 5 years
res iudicata). after approval of application for patent
2. It cannot be liable for satisfaction of debt
within 5 years after approval of patent
application
3. Subject to repurchase of heirs within 5 years
after a valid alienation (i.e., made after the
prohibitory period) •
4. No private corporation, partnership,
association may lease land subject of a
homestead patent unless it is solely for
commercial, industrial, educational, religious
or charitable purpose, or right of way
(subject to consent of grantee and approval
of Secretary of Environment & Natural
Resources)

Exceptions:
i. Action for partition because ii is not a
conveyance
ii. Alienations or encumbrances made in favor
of the government

Erring Homesteader Not Barred by Pari

Delicto
(a) Pari delicto rule does not apply In void
contracts
Page 350 of 432
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(b) Violation · of prohibition results in void the issuance of the patent or grant. When
r:',
1.• contract a conveyance is made within that period", ·
(c) Action to recover does not prescribe the owner-vendor, his widow or heirs, may
,,. .. repurchase the same within 5 years from
\ )
The State prohibits the sale or encumbrance of conveyance, such right cannot be waived
the homestead (PD 1529, sec. 116) within five (Republic v. Heirs of Felipe A/ejaga, Sr.,
years after the grant of the patent. After that G.R. No. 146030, 2002}.·
five-year period the law lrnplledly permits iii. Homestead . patents: Transfer or
alienation of the homestead; xxx such alienation conveyance: of any homestead after 5
or conveyance (Section 117) shall be subject to years but before 25 years after the
the right of repurchase by the homesteader, his issuance of _the title must be approved by
widow or heirs Within five years. (Morla v. the DENR Secretary.
Belmonte, G.R. No. 171146, 2011) iv. Emancipation patents: Lands acquired
under emancipation patents issued to
Special Patent - a patent to grant, cede, and landless tenants and farmers must not be
convey full ownership of alienable and alienated or encumbered within 1 O years
disposable lands formerly covered by a from issuance of the title.
reservation of lands of the public domain Conveyances by "non-Christian tribes": May be
made only when the person so conveying is able
t· The DENR, through the Reservation and Special . to read and understand the language in which
Land Grants Section of the Land Management the Instrument or deed la written. If such cersen
Division, Is tasked to Issue special patents in is illiterate, the conveyance must be approved by
favor of government agencies pursuant to the then Commlssioner of Mindanao and Sulu
special laws, proclamations, and executive
orders. ·
.......
Procedure for Registration of Public Lands:
(IFEFeeD)
1. Official [ssues an instrument of
conveyance
2. Instrument is filed with ROD
3. Instrument is Entered in the books and the
owner's duplicate is issued
• The instrument is only:
o A contract between the
Government and the private
person. It does not effect
conveyance unless registered.
Registration is the operative act
:.. ) that conveys or affects land
-,•: insofar as third persons are
.s concerned. •
o An evidence of authority to the •
ROD to register.
4. fees are paid by grantee
5. Land is .Qeemed registered under the
Torrens System upon issuance of the
certificate of title

Restriction on Alienation or Encumbrance of

Lands Titled Pursuant to Patents:
i. General Rule: Lands under free patents or
homestead patents are prohibited from
being allenated or encumbered.
ii. Exception: Allowed if done in favor of the
government, wlthin 5 years from and after
Page 351 of 432 ·

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 ATENEO CENTRAL
BAR OPE~ATIONS 2019 CIVIL LAW

KINDS TO WHOM .orHER REQUIREMENTS

GRANTED ..
1. Grantee does not own more than 12 hectares of
agricultural land in the Philippines or has not had the
benefit of any gratuitous allotment of more than 12
To any Filipino hectares (Sec. 12)
Homestead
citizen over the age 2. Must have resided continuously for at least 1 year in the
Patent
of 18 years or head munlclpallty where the land Is situated, or In the
(C.A. 141)
of a family rnur,icipallty adjacent to the land (Sec. 14)
3. Must have cultivated at least 1/5 of the land continuously
since approval of application (Sec. 14)
4. Payment of required fee (Sec. 14)
1. Order of priority in distribution:
(a) agricultural lessees and share tenants;
(b) regular farmworkers;
Emancipation Any qualified farmer (c) seasonal farmworkers;
Patent I beneficiary who (d) other farmworkers;
Certificate of must be a landless (e) actual tillers or occupants of public lands;
Land resident of the same {f) collectives or cooperatives of the above beneficiaries;
Ownership barangay (or in the and
Awards absence thereof, a (g) others directly working on the land.
(CLOA) landless resident of 2. Landless (owns less than 3 has. of agricultural land)
(P.O. 27 & R.A. the same 3. A Filipino citizen
6657) municipality) 4', At least 15 years of age or head of the family at the time
of acquJsition of property •
5. Has willingness, availability, 'and aptitude to cultivate and
make the land productive as possible.
1. Grantee does not own more than 12 hectares of land
2. Has continuously occupied and cultivated, either by
To any natural born himself or his predecessors-in-interest, tracts of
citizen of the disposable agricultural public land for at least 30 years
Free Patent Philippines prior to March 28, 1990 (date of effectivity of RA 6940)
(C.A.141) (filing ended Dec. 3. Has paid real property taxes on the property while the
31, 2000) same has not been occupied by any person

t-------t----------,,_·_Grant will be limited to 12 hectares only

1. Land size requirement:
a. Highly urbanized cities - not more than 200 sqm •
b. Other cities - not more than 500 sqm
'c. Fir;:;i class and second class municipalities...., not
more than 750 sqm \
d. Other municipalities- not more than1,000 sqm
Residential
Any Filipino citizen 2. Land applied for is not needed-tor public service and/or
Patent
who is an actual public use, as certified by the LGU
(R.A. 10023)
occupant of a 3. Continuous possession and occupation of the land by
residential land applicant or his predecessor-in-interest, under a bona
A type of free
fide claim of acquisition of ownership for at least ten (1 d)
patent
years prior to the filing of the application for patent

"Zoned residential areas inside a delisted military reservation

or abandoned military camp, and those of LGUs or
townsites, preceding the National Integrated Protected Areas
Svstem (NIPAS) law, are included.
~--~-·~---~-~~

F'age 352 of 432

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ATENEO CENTRAL
BAR OPERATIONS 2019 CIVIL LAW

1. To have at least 115 of the land broken and cultivated

within 5 years from the date of the award
Citizens of the 2. Before any patent is issued, he must show actual
Philippines of lawful occupancy, cultivation and Improvement of at least one-
ege or nead of tne flftn of the lend uritll tne date of flnl!II p~yment.
family may purchase 3. ~or agricultural lands suitable for residential, commercial
Sales Patent public agricultural or industrial purposes, patent Is Issued only after:
(C.A. 141) land of not more a. Full payment of purchase price, and
than 12 hectares b. Completion of the construction of permanent
sold through public improvements appropriate for purpose for which
auction/sealed -the land is purchased (must be completed within
bidding 18 months from date of award)

.r·' . ,. CADT refers to title formally recognizing the rights of

possession and ownership of;ICCs/lPs over their ancestral
,,c> : domains identified and delineated in accordance with this
' law.
,,...
(1 CAL T refers to title formally recognizing the rights of
ICCs/lPs over their ancestral lands.
\~. .
r-, 2 modes of acquisition of CADTs and CALTs:
i~- r
';!
1. By Native Title of ICCs/lPs o-J,i3r both ancestral domains
,1
G.. and lands '*.
2. By Torrens Title under Public Land Act and the Land
Certificate of Registration Act (now Property Registration decree) over
Ancestral ancestral lands only:
To Indigenous
Domain Title a. Continuous possession and occupation in the
Community/People
(CADT) and concept of owner since time immemorial or for a
by the National
Certificate of period of not less than 30 years of individually-
Commission on
Ancestral owned ancestral lands by individual members of
Indigenous People
Land Title cultural communities, by themselves or through
(NCIP)
(CALT) their predecessors-in-interest
(R.A. 8371) b. Claims are uncontested by the members of the
same ICCs/lPs
c. Individually-owned ancestral lands rnust be
,; ' ~ agricultural in character and are actually used for
. ~ ... ,· agricultural, residential, pasture and tree farming
purposes for it to be classified as alienable and
~ disposable agricultural lands of the public •
domain
d. The ancestral lands shall be classified as public
agricultural lands regardless of whether they
have a slope of 18% or more
e. Option to register ancestral land must be
exercised within (20) years from October 29,
1997 (approval date of the IPRA)

~. .. ,,

:... I
l •
Page 353 of 432

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ATENEO CENTRAL
BAR OPERATIONS 2019
DEALINGS WITH UNREGISTERED LANDS
• Under Act 3344, registration of
instruments affecting unregistered lands
is without prejudice to a third party with
a better right. (Radiowealth Finance Co.
v. Palileo, G.R. No. 83432, 1991)
• If a parcel of land covered by a Torrens
Title is sold, but the sale is registered
under Act 3344, and not under the Land
Registration Act, the sale is not
considered registered. (Vda. de
Melencion v. CA, G.R. No. 148846,
2007)
System of Registration for Unregistered
Lands .
• System of registration for unregistered land
under the Torrens System (Act 3344)
• Before, it only covered voluntary dealings.
Now, it includes involuntary dealings
• Effect: If prospective, it binds 3•d persons
after registration but yields to better r[ghts of
3rd person prior to registration (limited effect
to 3rd parties)
• Reason: No strict investigation involved
• Subsequent dealings are also valid if
recorded
• ROD keeps a day book and a register, and
an index system is also kept
Procedure:
1. Presentation of instrument dealing with
unregistered land;
2. If found in order, instrument is
registered;
3. If found defective, the registration is
refused. Reason for refusal will be
written.
CIVIL LAW
Effect of Registration
• Registration of an instrument involving
unregistered land in the Registry of
Deeds creates constructive notice and
binds third person who may
subsequently deal with the same
property. (Heirs of Deleste v. Land
Bank, G.R. No. 169913, 2011)
• The reliance on an unnotarized and
unregistered deed of absolute sale of
real property executed in one's favor is
misplaced and unwarranted, for the non-
registration of the deed meant that the
sale could 1;not bind third parties. The
transaction· ;affecting unregistered lands
covered by1 an unrecorded contract, if
legal, mfgh(: be valid and binding on the
parties themselves, but not on third
parties. In the case of third parties, it
was necessary for the contract to be
registered. (Dadizon vs. Court of
Appeals, G.R. No. 15911, September
30, 2009)
Vis-a-vis the Torrens System •
• A duly registered levy on attachment
takes precedence over a prior
unregistered sale. This is not diminished
by the subsequent registration of the
prior sale. This is consistent with the
fundamental principle of the Torrens
system that registration is the operative
act which gives validity to the transfer or
creates a lien upon land. (Suntay v.
Keyser Mercantile, lnc., 2014)
•
1, Page 354 of 432
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 I •

ATENEO CENTRAL
() BAR OPERATIONS 2019 CIVIL LAW
(;
PETITIONS AND MOTIONS AFTER ORIGINAL Who may file Petition:
REGISTRATION: (a) Registered owner,. or
(b) Other person having an interest In
;'!'.. '
(a) Amendment and Alteration of Certificate the registered property, or
l.. i
(c) The ROD, in proper cases, with the
of Title (Sec. 108, P.O. 1529)
(1 approval of the LRA Administrator.
,. · • General Rule: A certificate of title or a
memorandum entered therein in the (b) Lost Duplicate Certificate (Sec. 109, P.O.
registration book cannot be altered or 1529)
amended.
t. j • Exception: Alterations and amendments • Available remedy in cases of loss, theft,
may be made through a direct or destruction of an owner's duplicate
proceeding in court (summary certificate of title.
proceeding). A court order is necessary • This is the proper remedy when the
r: duplicate title of the landowner is lost,
-~" ': to alter entries of such registration
books. not reconstitution of title.
'"" ~ • Not available when the certificate is not
·I,•.... '
Grounds (CRIMENN) in fact lost or stolen; any such
/''. proceeding will be void for lack of
:.'., ! jurisdiction (New Durawood v. CA, 253
1. When registered [nterests of any
.,.. description, whether vested, contingent, SCRA 740, 1996).
i .
expectant, or inchoate, have terminated
"· and ceased; Procedure
2. When tfew Interests have arisen or 1. The owner shall send due notice under
been created which do not appear upon oath to the Register of Deeds as soon
the certificate; as the loss or theft is discovered.
3. When any .§rror, omission or mistake 2. If a duplicate certificate is lost or
was made in entering a certificate or destroyed, ior cannot be produced by a
any memorandum thereon or on any person apP,lying for the entry of a new
duplicate certificate; certificate to him or for the registration of
4. When the tfame of any person on the any instrument, a sworn statement of
certificate has been changed; the fact ot ~uch loss or destructlon may
,.,:· -.
l .::
5. When the registered owner has been be filed by the registered owner or other
.Married, or, registered as married, the person In interest and registered .
r>. marriage has been terminated and no 3. Upon the petition of the registered
right or interest of heirs or creditors will owner or other person in interest, and
1'j I thereby be affected; after notice and due hearing, the court
.,•.••• r
6. When a ~orporatiol'l, which owned may direct the issuance of a new
,· . registered land and has . been duplicate certificate.
~:.
...... ,,
~ dissolved, has not conveyed the same o Notice should be sent to all •
within three years after its dissolution; interested persons as shown in
and the encumbrances annotated in
7. When there is Reasonable ground for the OCT on file with the ROD.
the amendment or alteration of title (Paz o The new duplicate shall indicate
v. Republic, 2011) that it is issued in place of the
lost duplicate certificate. It shall
The following are corrections permitted in have the same effects as the
the title: original duplicate.
\ ... · i. Alterations which do not impair
rights; (c) Petition Seeking Surrender of Duplicate
ii. Alterations which impair rights: Title (Section 107, P.O. 1529)
with consent of all parties
iii. Alterations to correct obvious • Remedy available when a person in •
mistakes possession of the owner• s duplicate
certificate fails or refuses to surrender.
Page 359 of 432
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 ATENEO CENTRAL
BAR OPERATIONS 2019
the same.
• Party in interest may file a petition in the
RTC to compel the surrender of such
duplicate title.
·Grounds
1. When necessary for the issuance of a
new certificate of title, pursuant to
voluntary and involuntary conveyances
2. When necessary for amendment or
alternation, pursuant to a court order
Court Action
• After hearing, the court may:
o Order the person holding the
certificate to surrender the
same, and direct the entry of a
new certificate or memorandum
upon such surrender, or
o Order the annulment of the
owner's duplicate and issue a
new certificate, if the 'person
withholding the duplicate
certificate is not amendable to
the court's process or if the
certificate cannot be
surrendered for any reason. The
new certificate shall contain a
memorandum of the annulment
of the outstanding duplicate.
(d) Reconstitution of Original Certificate of
Title
• The restoration of the instrument which
is supposed to have been lost or
destroyed in its original form and
condition. • certificate of title.
o When the owner's duplicate
certificate of title has not been
lost, but is in fact in the
possession of another person,
then the reconstituted certificate
is void, because the court that
rendered the decision had no
jurisdiction. Reconstitution can
validly be made only in case of
loss of the original certificate.
(Alcazar v. Areme, G.R. No.
177042, 2012)
• When reconstituted, the new title has
the same validity as old one.
Purpose
• To have the same reproduced, after
proper proceedings, in the same form
CIVIL LAW
they were when the loss or destruction
occurred. (Heirs of Pedro Pinote v.
Dulay, G.R. No. L-56694, 1990)
Kinds of Reconstitution:
1. Judicial
2. Administrative
Material facts to be shown:
1. That the certificate of title had been lost
or destroyed;
2. That the documents presented by
petitioner are sufficient and proper to
warrant reconstitution of the lost or
destroyed certificate of title;
3. That the petitioner is the registered
owner of the property or had an interest
therein; ·i
4. That the certificate of title was in force at
the time it was lost or destroyed; and
5. That the'~ description, area and
boundariesi of the property are •
substantially the same and those
contained in the lost or destroyed
certificate of title. (Republic v. Lorenzo,
G.R. No.172338, 2012)
Judicial Reconstitution
Requirements LDR·FB
1. The certificate of title had been best or
destroyed.
2. The .Qocuments presented by petitioner
are sufficient and proper to warrant •
reconstitution of the lost or destroyed
•
3. The petitioner is the Registered owner
of the property or had an interest
therein.
4. The certificate of title was in force at the
time it was lost or destroyed.
5. The descripti6n, area and ~oundaries of
the property are substantially the same
and those contained in the lost or
destroyed certificate of title. (Heirs of·
Toring v. Heirs of Boquilaga, G.R.
No. 163610, 2010, citing R.A. 26, Secs.
2, 3, 12 and 13)
• The claimants must prove that a title
had been issued and that said certificate
of title was still in force at the time it was
lost or destroyed. It is necessary that the
RD issue a certification that such was in
Page 360 of 432
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 A TENEO CENTRAL
BAR OPERATIONS 2019 CIVIL LAW

force at the time of its alleged loss or
destruction. The RD cannot issue such
certification merely because of the
\
r:',; dearth of records in its file. (RP v.
Sanchez, G.R. No. 212388, 2014)
Process:
1. File a petition with the RTC (In rem
proceeding).
2. The court shall cause a NOTICE to be
PUBLISHED, POSTED and MAILED.
Contents of Petition (Sec. 12, R.A. 26)
1. That the owner's duplicate of the
certificate ', of title had been lost or
destroyedq
2. That no ;co-owner's, mortgagor's, or
lessee's duplicate had been issued
3. The locatic,:n, area and boundaries of the
property '
4. The nature and description of the
buildings or improvements, if any, which
do not belong to the owner of the land,

t,
, .. I
Non-compliance voids the proceeding
as such requirements are jurisdictional.
and the names and addresses of the
owners of such buildings or
'I;, ~J
3. When the court grants the petition, it improvements
r shall issue a corresponding order to 5. The names and addresses of the (a)
''. ) ROD. occupants or persons in possession of
the property, (b) of the owners of the
Sources for Reconstitution (in order) adjoining properties and (c) of all
persons who may have any interest in
When OCT is to be reconstituted (Sec. 2, R.A. the property
,.. 26) 6. A detailed description of the
I
•,..
•
(a) Owner's duplicate of the certificate of encumbrance, if any, affecting the
title property
(b) Co-owner's, mortgagee's or lessee's 7. A statement that no deeds or other
duplicate of said certificate Instruments affecting the property have
(c) Certified copy of such certificate, been presented for teglstr::itibn, or. If
previously issued by the ROD there be any, the registration thereof
(d) Authenticated copy of the decree of has not been accomplished, as yet
registration or patent, as the case may
be, which was the basis of the certificate Publication and Posting Requirements (Secs.
oftitle, 9-10, 12-13, R.A·. 26)
(e) Deed of mortgage, lease, or • These requirements must be complied
,·-·'!',
l __ j ., encumbrance containing description of with at least 30 days prior to date of
property covered by the certificate of hearing.
f'\ title and on file with the ROD, or an
<,»
authenticated copy thereof indicating General Requirements
that its 'original had been registered 1. Notice · shall be published in two
(f) Any other document which, in the successive issues of the Official
,· .. judgment of the court, is suffiCif!nt and Gazette;
I•
•, ..) I proper basis for reconstitution. 2. Musi be posted on the main entrance of •
the provincial building and of the
When TCT is to be reconstituted (Sec. 3, R.A. municipal building of the municipality or
26) city where the land is situated; and
(a) Sarne as sources (a), (b), and (c) for
·...... )
reconstitution of OCT Additional requirement when source for
(b) Deed of transfer or other document reconstitution is Section 2(c), 2(d), 2(e), 2(f),
containing description 6f property 3(c), 3(d), and 3(f): i
covered by TCT and on file with the • Notice rnust'be sent by registered mail
.··-. ' ;
ROD, or an authenticated copy thereof or otherwise, at the expense of the
indicating its original had been petitioner. lo every person named in
registered and pursuant to which the said notice (actual occupants and
lost or destroyed certificate of title was adjacent owners).
issued o This notice lo adjacent owners,
etc. is not required when the
•
(c) Same as sources (e) and (f) for
reconslilutior'I of OCT other sources not enumerated
above are used.
Page 361 of 432

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Contents of Natlee (Sec. tJ, f:?.A. ~6)
1. Number of the certificate of title
2. Name of the registered owner·
3. Names of the interested parties
appearing in the reconstituted certificate
of title
4. Location of the property
5. Date on which all persons having an
interest in the property must appear and
file such claims as they may have.
(Puzon v. Sta. Lucia, G.R. No. 139518,
2001)
Effect of Failure to Comply with Publication
or Posting Requirements
• If an order of reconstitution is issued
without any previous publication, such
order of reconstitution is null and void.
Even the publication of the notice of
hearing in a newspaper of general
circulation like the Manila Daily Bulletin,
is not a substantial compliance with the
law because Section 13 specifies
publication In the OG and does not
provide for any alternative medium or
manner of publication (MWSS v. Sison,
. G.R. No. L-40309, 1983).
Notice must be actually sent or
· delivered to parties affected by the
petition for reconstitution. The order of
reconstitution issued without compliance
with the said requirement never
becomes final - it was null and void
(Manila Railroad v. Moya, G.R. No. L-
17913, 1965).
• The failure to meet any of the necessary
publication, notice of hearing and
mailing requirements did not vest
jurisdiction of the case to the court.
Thus, the judgment rendered by the
RTC regarding the reconstitution of title
is void. (Republic v. Sanchez, G.R. No.
146081, 2006)
Administrative Reconstitution
• Originally embodied in ~.A. 26,
abrogated through P.D. 1529, then
partially revived through R.A. 6732.
• R.A. 6732 provides for retroactive
application thereof to cases 15 years
immediately preceding 1989.
Requisites (Sec. 1, R.A. 6732)
1. There is a substantial loss or destruction
of the original land titles due to fire,
I
\
CIVIL LAW
flood, ar ottuir force maf6ure as
determined by the Administtator of the
LRA
2. The number of certificates of title lost or
damaged should be at least 10% of the
total number in the possession of the
Office of the ROD; and
3. These lost or damaged titles should not
be less than 500.
Sources (Sec. 2, R.A. 6732)
1. Owner's duplicate of the certificate of
title
2. Co-owner's, mortgagee's, or lessee's
duplicate of said certificate
(e) Registration of Transaction evidenced by
lost document
• ROD is forbidden to effect registration of
lost or destroyed documents. •
~
Steps by lnter11ted partl11:
1. Procure an authenticated copy of Jost or
destroyed instrument.
2. Secure an order from court .
Offenses in Land Registration:
1. Larceny
2. Perjury: false statement under oath
3. Fraudulent procurement of Certificate
4. Forgery
(a) Forging of seal in ROD, name.
signature or handwriting of any •
officed'if court or ROD
(b) Fraudulent stamping or assistance
i'n stamping ·
(c) Forging of handwriting, signature of
persons authorized to sign
(d) Use of any document which an
impression of the seal of the ROD
is forged
5. Fraudulent sale: sale of mortgaged
property under the misrepresentation
that it is not encumbered; deceitful
disposition of property as free from ·
encumbrance
--- - end of topic----
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(")
C. CERTIFICATE OF TITLE on the issue thereof pursuant to PD 27 or
<''"
l. ) any other laws or regulations on agrarian
a certificate of ownership reform
,,.. . j A Torrens Title is
Jf
\,.. · issued under the Torrens System, through the
ROD, naming and declaring the owner of the 2) Incontrovertible arid indefeasible
real property described therein, free from all
liens and encumbrances, except such as may General Rule: Upon the expiration of 1 year
be expressly noted therein or otherwise from and afte.r the entry of the decree of
.,t""\ I registration in the LRA, the decree and the
\. ... reserved by law. (Sec. 44, P.O. 1529)
corresponding certificate of title become
incontrovertible and indefeasible.
NOTE: A title once registered cannot be
impugned, altered, changed, modified, enlarged, Exceptions: (PNF)
or diminished except in. a direct proceeding i. If Previous valid title of the same land exists
r·,
:, j permitted by law, usually for the protection of ii. When lan'd covered is !:fot capable of
v., '
innocent third persons. registration
iii. When acquisition of certificate is attended
by fraud
1"'"··. ATTRIBUTES OF A TORRENS CERTIFICATE
· ~ . .' OF TITLE (FINIP) The certificate is the best evidence of ownership
and shows exactly'the real interest of its owner,
(a) !:_ree from liens and encumbrances subject to certain exceptions.
(b) [ncontrovertible and indefeasible
(c) !fot subject to collateral attack The rule on the incontrovertible nature of a
(d) !mprescriptible certificate of title applies when what is involved
(e) ~resumed valid and devoid of flaws is the validity of the OCT, not when it concerns
.J'·" '
that of the TCT. (Arguelles v, Timbancaya, G.R.
No. L-29052, July 30, 1976)
1) Free from liens and encumbrances
3) Not subject to collateral attack
General Rule: Claims and liens of whatever
character existing against the land prior to the A certificate of title shall not be subject to
issuance of the certificate of title are cut off by collateral attack. It cannot be altered, modified,
such certificate and the certificate so Issued or cancelled except In a direct proceeding in
binds the whole world, including the accordance with the law. (Sec. 48, P.D. 1529)
government.
An action is an attack on a title when the object
Exceptions: (CNT-PD) of the action is to nullify the title, and thus
i. Those noted on the Certificate challenge the judgment or proceeding pursuant
ii. Liens, claims, or rights arising or existing to which the title was decreed. •
under the laws and the Constitution, which • There is a direct attack when the object
are ~ot by law required to appear on record of an action is to annul or set aside such
in the Register of Deeds in order to be valid judgment or enjoin its enforcement.
f
iii. Unpaid· real estate Taxes levied and • There is an indirect or collateral
assessed within 2 years immediately attack when, in an action to obtain a
, different relief, an attack on the
preceding the acquisition of any right over
t) the land by an innocent purchaser for value judgment or proceeding is nevertheless
iv. Any fublic highway, or private way made as an incident thereof. (Sampaco
established or recognized by law, or any v. Lantud, G.R. No. 163551, July 18,
government irrigation, canal or lateral 2011)
thereof, if the certificate of title does hot
state the boundaries of such highway or What cannot be collaterally attacked is the
irrigation canal or lateral thereof has been certificate of title and not the title itself. Title as a •
determined concept of ownership should not be confused
{
;~
·,. v. Any .Qisposition of the property or limitation with the certi.ficate of title as evidence of such-
c., ,

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ownership although both are interchangeably
used. (Lacbayan v. Samoy, G.R. No. 165427,
March 21, 2011)
The question on the validity of a Torrens title,
whether fraudulently issued or not, can
be raised only In an action expressly instituted
for that purpose. The action for the declaration
of nullity of deed of sale commenced by the
petitioners In the RTC is not the direct
proceeding required by law to attack a Torrens
certificate of title. (Tapuroc v. Loquellano de
Mende, G.R. No. 152007, 2007)
4) lmprescrlptlble
(a) Even adverse, notorious and continuous
possession under claim of ownership for
the period fixed by law is ineffective
against a Torrens title. (JM Tuason and
Co. Inc. v. CA, G.R. No. L-23480,
September 11, 1979)
(b) The fact that the title to the land was lost
does not mean that the land ceased to
be registered land before the
reconstitution of its title. It cannot
perforce be acquired by prescription.
(Ruiz v. CA, G.R. No. L-29213, 1977)
(c) Laches may be invoked to bar ,
reconveyance of land to the registered
owner only if there are Intervening rights
of third persons which may be affected
or prejudiced if such land Is returned to
the registered owner. (De Lucas v.
Gamponia, G.R. No. L-9335, 1956)
With respect to a claim of acquisitive
prescription, it is baseless when the land
involved is a registered land since no title to
registered land in derogation of that of the
registered owner shall be acquired by adverse
possession. (Feliciano v. Zaldivar, G.R. No.
162593, 2006)
5) Presumed valid and devoid of flaws
This is also called the "Mirror Doctrine."
General Rule: A Torrens certificate of title is
presumed to have been regularly issued, valid,
and without defects. The buyer has the right to
rely upon the face of the Torrens title and to
dispense with the trouble of Inquiring further.
Exception: When he has actual knowledge of
CIVIL LAW.
facts and circumstances that would impel a
reasonably cautious man to make inquiry.
General incidents of registered land
Registered land or the owners thereof are not
relieved from the following:
• From any rights incident to the relation
of husband and wife, landlord and
tenant ·
• From liability to attachment or levy on
execution
• From liab)lity to any lien of any
description; established by law on the
land and bulldlngs thereon, or in the
Interest of 'tile owner In such land or
buildings ::
• From any right or liability that may arise
due to change of the law on descent
• From the rights of partition between co-
owners
• From the right of the government to take
the land by eminent domain
• From liability to be recovered by an
assignee in insolvency or trustee in
bankruptcy under the laws relative to
preferences •
• From any other rights or liabilities
created by law and applicable to
unregistered land
Where certificate of title is obtained by a
trustee .
• Trustee-who obtains a Torrens title in his
name, over property held in trust by. him
for another cannot repudiate the trust
relying on the registrations, such being
one of the limitations upon the finality of
title
•
• Trustee could not perforce legally
convey ownership of the registered
property in her will for she· is not the
absolute owner thereof
PROBATIVE VALUE OF THE TORRENS
TITLE
Torrens Title may be received in evidence in all
Philippine courts and shall be conclusive as to
all matters contained therein, principally as to
the identity of the landowner, except in so far as .
provided in the Land Registration Act.
'·
A Torrens Certificate is evidence of indefeasible
title of property in favor of the person whose
\t
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I
I'
name appears therein-such holder is entitled to Accretion Requisites: (G-A-C)
the possession of the property until his title is • The deposit of soil or
\.. I
nullified. (Pascual v. Coronel, G.R. No. 159292, sediment is Qradual
2007) and imperceptible;
c·
•.. i • The land where
Types of Torrens Certificates of Title accretion takes place is
~djacent to the banks
(a) Original Certificate of Title (OCT) • the of rivers or the
/.~ ...'
first title issued in the name of the seacoast; and
<-' registered owner by the ROD covering a • It is the result of the
,.::- ... -,t
._,
', )
parcel of land which had been registered by natural Current of the
virtue of a judicial or administrative waters (river/sea) and
proceeding. not because of human
(b) Transfer Certificate of Title (TCT) • the lntervention. (Binalay v.
,!""' 'r title issued by the ROD in favor of the Manalo, G.R. No.
t J transferee to whom the ownership of the 92161, March 18, 1991)
( .. already registered land had been
... ' transferred by virtue of a sale or other NOTE: Accretion to
modes of conveyance. registered lands needs new
registration.
· · · MODES OF ACQUIRING TITLE
,,.. Public Grant A conveyance of public land The alluvial deposit to the
;,,__i
by the government to a bank of the river belongs to
,r.·~ crlvate individual the riparian owner; the
\ .._ .. · Requisites: (OCEN) accretion does not
Acquisitive
,-. Prescription Qpen, automatically become part
".i. . i Continuous, of his registered land and he
Exclusive, and must still apply for the
Notorious possession registration thereof.

If In good faith & with just There must be NO human

title: 10 yrs. uninterrupted Intervention.
possession Is required
The current causing the
If in bad faith & without just alluvial deposit must be
.•« , ;
title: 30 yrs. continuous from a river. If it is from the
........ possession is required sea, the deposit will pertain
to the State (Government of
NOTE: Only available if the }the Phils. v. Cabangis, 53
r-
...
., : land possessed is public, Phil. 112, March 27, 1929J.
Filling of submerged land by
alienable and disposable Reclamation
·deliberate act and
A property registered under reclaiming title thereto.
the Torrens System. is not
subject to prescription. Conditions: •
1. Must be initially owned
Prescription is unavailing by the government
against the registered owner 2. May be subsequently
and his hereditary transferred to private
owners
.-- •
·1
. successors.
'--·
NOTE: The reclaimed land
formed through human
·,
·~, .. .
intervention is public land
and belonos to the State. It
Page 365 of 432
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 ATENEO CENTRAL
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has to be recovered first by
Special Patent in the name
of the Republic of the
Philippines or a government
agency, and only then may
portions thereof be
transferred by sale or other
conveyances to private
1----~~~~~~~..c....;.oe~rs~o_n..;...s .. ~~--~~~-~
Voluntary 1. Private grant
Transfer 2. Voluntary execution of
deed of conveyance
• Contractual
relationship between
the parties
• Consensual
Involuntary • No consent from the
Alienation owner of land
• Forcible acquisition by
~·~~--~~~1-~--'~~~~~~~--1
the State
Descent or Hereditary succession to the
Devise estate of deceased owner
Emancipation The purpose of the same is
Patent/Grant to ameliorate the sad plight
(Certificate of of tenant-farmers
Land Ownership
Award) NOTE: Title to land
acquired pursuant to the
land reform program of the
government is hot
transferable for a period of
10 years except by (a)
hereditary succession, (b) to
the government, (c) to the
LBP, or (d) to other qualified
beneficiaries. (Sec. 27, RA
6657)
Whoever first acquires title to a piece of land
shall prevail and where there are more than one
certificates of title, the person holding the prior
certificate is entitled to the land. The rule refers
to the date of the certificate of title not the date
of the filing for application. (Heirs of Lopez v. De
Castro, G.R. 112905, Feb. 3, 2000)
CIVIL LAW
D. SUBSEQUENT REGISTRATIONS
Subsequent Registration ,
Involves incidental matters after original
registration, brought before the land registration
court by way of motion or petition and filed by
the registered owner or a party In interest.
Necessity and effects of registering
voluntary and involuntary instruments
1. Except a will that purports to convey or
affect a registered land, the mere
execution of the deeds of sale,
mortgage, or lease or other voluntary
documents serves only 2 purposes:
(a) As a contract between the parties
thereto; and
(b) As evidence of authority to the
ROD to register such documents.
(Sec. 51, P.O. 1529)
2. The registration of the instrument Is the
operative act that conveys ownership
or affects the land insofar as third
persons: are concerned.
3. Registration creates a constructive
notice to the whole world of such •
voluntary or involuntary instrument or
court writ 'or process. (Sec. 52, P.O.·
1529) '~
• "Rule of Notice"
o Gerler-al Rule: There is an
irre(µtable presumption that the
purchaser has examined every
instrument affecting the title. He
is charged with notice of every
fact shown by the record, and is
presumed to know every fact
which an examination of the
record would have disclosed •
(Garcia v. CA, 95 SCRA 380,
1980) •
o Exception: There is no effect of
constructive notice when there
is fraud involved in the
transaction. (Id.)
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1, VOLUNTARY DEALINGS;
VOLUNTARY INVOLUNTARY
DEALINGS
GENERAL PROVISIONS
DEALINGS
,r·.
\•. I Refer to deeds, Refer to writs or orders
'- .' Rule: Registration of the instrument is the
instruments, or or processes issued by
documents which are a court of record operative act that transmits or transfers title.
Without registration, the instrument is binding
results of the free and affecting registered
voluntary acts of the only between the parties.
{'·1 land which by law
"-. parties thereto should be registered to
Mirror Doctrine
r''",
be effective, and also
I I
to such instruments • A person dealing with registered land may
'....:•. '
,.1

which are not the rely on the correctness of the certificate of

willful actsotthe title issued. The law does not oblige him to go
registered owner and beyond the certificate 16 determine the
which may have been condition of the' property. (Locsin v. Hizon,
executed even without G.R. No. 204369, 2014)
his knowledge or • Where there ii': nothing in the certificate to
aaainst his consent indicate any cloud or vice in the ownership of
1. Sale 1. Attachment the property, or: any encumbrance thereon,
r=>
·l...._. i 2. Real property 2• Injunction the purchaser is not required to explore
mortgage 3. Mandamus further than what the Torrens Title indicates
3. Lease 4. Sale on execution upon its face to find hidden defects or claims
4. Pacto de retro sale of judgment or that may subsequently defeat his right. (Id.)
5. Extra-judicial sales for taxes
settlement 5. Adverse claims • Every person dealing with registered land
«: 6. Free or 6 . Notice of /is may safely rely on the correctness of the
homestead patent pendens certificate of title issued therefor. Even if a
7. Powers of attorney decree in a registration proceeding is infected
8. Trusts with nullity, still, an innocent purchaser for
Owner's duplicate Owner's duplicate value relying on a Torrens title issued in
certificate of title must certificate of title need pursuance thereof is protected (Cruz v. CA &
be presented to not be presented . Suzara, G.R. No. 12012, 1997).
.1··,
record the deed in the
registry and to make Entry of the instrument Chain of Title Rule
r···: memorandum on the in the ROD's day book • General Rule: A forged deed is null and
title. is sufficient notice to all cannot convey title.
,r-, persons, even if the • Exception: Registration of title from a forger
,i., .. ,,'
An innocent purchaser owner's duplicate to an innocent purchaser for value (Sec. 55,
for value becomes the certificate of title is not Land Registration Act). However, there must
registered owner once: presented. be a complete chain of registered titles; all
the transfers starting from the original rightful
(i) He presents and owner to the innocent holder for value,
files with the ROD a including the transfer to the forger, must be
duly notarized deed of duly registered, and the title must be properly
conveyance, and the issued to the transferee. (Spouses Peralta v.
same is entered in the . Heirs of Bernardina Abalon, G.R. No. •
,·,-~·)
day book, 183448, June 30, 2014)
(ii) He surrenders or
presents the owner's • Although generally a forged or fraudulent
duplicate certificate of deed or document is a nullity and conveys no
title covering the land title, it may become the root of a valid title
conveyed.and when the certificate of title over the land has
(iii) He pays the already been transferred from the name of
reolstration fees. the owner to that of the forger and the land is
·- sold later to an innocent purchaser for value.

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A person who deals with registered property
in good faith will acquire good title from a
forger and will be absolutely protected by a
Torrens title (Sps. Villamil v. Velasco, 2009).
• While, it is a familiar doctrine that a forged or
fraudulent document may become the root
of a valid title, if title to the property has
been transferred from the forger to an
innocent purchaser in good faith, the same
does not apply in case of banking
institutions or those engaged in real estate
for they are expected to exercise more care
and prudence than private individuals in
their dealing with registered lands. In the
absence of inquiry, the respondent Bank
cannot and should not be regarded as a
mortgagee/purchaser in good faith.
(Erasvsta v. CA, G.f?. No. 149231, 2006)
Exceptions to Mirror Doctrine:
(BOB-MILKA)
The person dealing with registered land must
look beyond the certificate of title in the following
instances:
i. When the purchaser or mortgagee is a
.!!ank/financing institution, as banks are
presumed to have employed due diligence
(through ocular inspection, etc.) in
ascertaining the status, condition, and
occupancy of the property involved. (Dela
Merced v. GSJS, G.R. No. 140398, 2001).
ii. Where the Qwner still holds a valid and
existing certificate of title covering the same
property. The law protects the lawful holder
of a registered title over the transfer of a
vendor bereft of any transmissible right.
(Tomas v. Tomas, G.R. No. L-36897,
1980).
iii. When the purchaser is in .!!ad faith (Egao v.
CA, G.R. No. L-79787, 1989).
iv. Where the land is bought not from 'the
registered owner but from one whose rights
have been Merely annotated on the
certificate of title (Quiniano v. CA, G.R. No.
L-23024, 1971).
v. When there are sufficiently strong
[ndlcations to impel closer inquiry into the
location, boundaries, and condition of the
lot (Francisco v. CA. G.R. No. L-30112,
1987).
Examples of "strong indications":
• When the land sold is in possession
of a person other than the seller
CIVIL LAW
• When there are occupants other than
the registered owner
vi. When the cirtificate of title contains a
notice of Lis pendens
vii. When the purchaser had full !S_nowledge of
flaws and defects of the title (Berna/es v.
/AC, G.R. Nos: 71490-91, 1988).
viii. When the purchaser buys from an Agent
and not from the registered owner
Process of Registration (Generally):
1. Execution of instrument in a form sufficient
in law. It must contain the names,
nationalities, residence, and postal address
of the grantees or others acquiring an
interest under the instrument. (Sec. 55,
P.O. 1529)
2. Presentation of the following to the ROD:
i. Owner's duplicate certificate
ii. Instrument
3. Payment of registration fees and
documentary stamp taxes
4. The ROD makes and signs a memorandum
on the certificate of title
5. The ROD issues a Transfer Certificate of
, Title (if the instrument involves a transfer of
•
the title to the land)
Registration of Real Estate Mortgage
1. Execution of deed in a form sufficient in law
(public instrument)
2. Presentation to the ROD of the following:
i. Deed of mortgage
ii. Owner's duplicate certificate of title
3. Payment of fees
4. ROD's entry of memorandum upon the
original certificate of title and the owner's
duplicate (date and time of filing, file •
number assigned, ROD's signature)
5. ROD's annctatlon on the deed (date and
time of filing, and reference to volume and
page of the registration book in which it
was registered)
• Note: No mortgagee's or lessee's duplicate
certificate shall be issued upon registration
of the REM (P.Dl 1529, Sec. 60).
Registration of Chattel Mortgage
1. Execution of deed
2. Presentation to the ROD of the following:
i. Deed of mortgage
. Ii. Affidavit of good faith, which states:
Page 368 of 432
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o That the mortgage is made to
secure obligation specified
o That it is a valid and Just obligation
o That it is not entered Into for
purposes of fraud
(", 3. Payment of fees
1 i
4. ROD's entry in the day book of the 'chattel
mortgages and other instruments relating
( }
"(.,.. thereto, in the strict order of their
r >.
presentation (primary process)
'.:.. j 5. ROD's entry in the Chattel Mortgage
Register of the essential contents of the
instrument in a more detailed form
(complementary process)
Effect of Absence of Affidavit of Good Faith
1. Chattel mortgage remains valid
2. Chattel mortgage does not become a
,L,~··' "preferred mortgage" (Cebu Int'/.
Finance v. CA, G.R. No. 107554, 1997)
Effects of Registration of Real Estate/Chattel
Mortgage
1. Creates a lien that attaches to the
,... :
property in favor of the mortgagee
2. Constructive notice of his interest in the
property to the whole world
Effects of Failure to Register Real
Estate/Chattel Mortgage
1 . Mortgage is valid between the parties
but is not binding against third persons
2. If the personal property mortgaged is
delivered, the contract becomes a
pledge and not a chattel mortgage
)
3. A third person's actual knowledge of the
mortgage has the same effect as
registration
Registration of Lease
• It is the lessee, not the lessor, who is
required to initiate the registration.
• The process is the same with registration of
real estate mortgages.
• Similarly, no new certificate is issued.
NOTE: When there is prohibition in mortgaged
property as regards subsequent conveyances,
etc., leasehold cannot be registered.
Subsequent registered mortgage and a prior
unregistered sale
Whether the land is unregistered or registered
will determine which one will prevail between a
subsequent registered mortgage and a prior
CIVIL LAW
unregistered sale
In an unregistered land, an esrlier instrument
(sale or mortgage) prevails over a latter one,
and the registration of any one of them is
immaterial.
With registered land, the registered transaction
prevails over the earlier unregistered right. Prior
registration of a lien creates a preference as the
act of registration is the operative act that
conveys and affects the land. The only
exception to this rule is when a · party has
knowledge of a prior existing interest
unregistered at the time he acquires a right, his
knowledge of that prior unregistered interest has
the effect of registration as to him.
(Macadangdang v. Martinez, G.R. No. 158682,
2005)
Registration of Trust
• Implied Trusts
o . Presentation of a sworn
statement claiming interest
arising from an implied trust,
:with a description of the land,
the name of the registered
owner and the number of the
certificate of title
• Express Trtist
o Presentation of the instrument
creating the trust
'(
• In both cases, a memorandum of the
particulars of the trust shall be entered
by the words "In trust" or "upon
eondltlo1111 ar1d by reft!rer1tE! by number
to the Instrument creating the trust (Sec.
65, PD1529)
Registration of Appointed Trustee by Court
1. Presentation of the certified copy of
decree
2. Surrender and cancellation of the
duplicate certificate
3. lssuance and entry of a new certificate •
Other Notes on Voluntary Dealings
• Builders in Good Faith may register
• Aliens may register leases
o They may be granted temporary
rights for residential purposes
o Limit is 25 years, renewable for
another 25 years
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2. INVOLUNTARY DEALINGS
Transactions affecting land in which cooperation
of registered owner is not needed, or those
which are done even against his will.
a. Adverse Claim
A notice to third persons that someone is
claiming an interest on the property or has a
better right than the registered owner thereof.
The disputed land is subject to the outcome of
the dispute (Sajonas v. CA, G.R No. 102377
1996). •
Purposes (Arrazola v. Bernas, 86 SCRA 279
197~: '
• Apprises third persons of the controversy
over the ownership of the land
• Preserves and protects the right of the
adverse claimant during the per:dency of the
controversy
Notice to third persons that any transaction
regarding the disputed land is subject to the
outcome of the dispute.
o Actual knowledge is equivalent to
registration of adverse claim.
Requisites:
1. A claimant's right or interest In the
registered land is adverse to the registered
owner;
2. Such right arose subsequent to date of
original registration;
3. No other provision is made in the Decree
for the registration of such right or claim
(Sec. 70, P.D. 1529)
Formal Requisites to Register an Adverse
Claim:WNR .
·1. Adverse claimant must state the following in
Writing:
(a) His alleged right or interest
(b) How and under whom such alleged right
or interest is acquired
(c) The description of the land in which the
right or interest is claimed
(d) The certificate of title number
2. Such statement must be signed and sworn
to before a !fotary public or authorized
officer to administer oath
3. Claimant shall state his Residence or place
to which all notices may be served upon
him
CIVIL LAW
NOTE: Noncompliance with formal requisites
renders the adverse claim non-registrable and
Ineffective.
Examples of Registrable Adverse Claims
• Voluntary instruments of sale and lease
when the owner refuses to surrender th~
duplicate certificate of title for annotation of
the volunt~ry instrument (LP. Leviste v.
Noblejas, G.R. L-28529, 1979).
• An i.nterest on land based on a lawyer's
contingent fee contract arising after original
registration {Dir. Of Lands v. Ababa, 88
SCRA 513, 1979)
Examples of Non-registrable Adverse Claims
• A mere money claim (Sanchez v. CA, G.R.
No. L-40177, 1976)
• A claim based; on hereditary rights of the
children of a deceased parent, when there
are probate proceedings and one parent is
still living (Arrezola v. Bernas, 86 SCRA 279
197~ '
• A second adverse claim based on the same
•
ground by the same claimant
'
• Claims based on occurrences prior to the
original registration.
• Possessor's claim based on prescription or
adverse possession, when the land is
already registered in the name of another
(Arrazola, supra)
Grounds for Cancellation of Adverse Claim
(same with Notice of Lis Pendens; Sec. 64, P.O.
1529)
MoNoE-UVe
Before final judgment, the court may order the
cancellation: ·
•
1. After showing that notice is only for purpose
of Molesting an adverse party · •
2. When ii is shown that it is Not necessary to
protect the · right of the party who caused
the registration thereof
3. Where the gvidence so far presented by
the plaintiff do not bear out the main
allegations of the complaint
4. When the continuances of the trial are
!,!nnecessarily delaying the determination of
the case to the prejudice of the other party ·
5. ROD may also cancel by Verified petition of
party who caused such registration
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Period of Effectlvlty; When Cancelled notice of /is pendens also serves the
;,r··-,,
l ; • The adverse claim shall be effective for purpose of the adverse claim. (Villaflor
a period of 30 days from the date of v. Juezen, G.R. No. 35205, 1990)
registration.
• It mav be cancelled: b. Notic'1.,~ of Lis Pendens
(, 1. After the lapse of 30 days, upon the ,.
'-· filing by the party-in-interest of a
verified petition for such purpose
• Means "perhding suit"
2.Before the lapse of said 30 days, upon
• It merely creates a contingency and not
a lien. '
the filing by the claimant of a sworn
petition withdrawing his adverse
Purpose of Lis Pendens
claim
• A notice of /is pendens is an
3.Before the lapse of the 30-day period,
announcement to the whole world that a
when a party-in-interest files a
particular real property is in litigation,
petition in the proper RTC for t~e
.,.: '
;·
serving as a warning that one who
cancellation of the adverse claim
acquires an interest over said property
r ·., and, after notice and hearing, the
does so at his own risk, or that he
court finds that the claim is invalid. If
~ I

gambles on the result of the litigation

the court also finds the claim to be
over the said property. (Spouses Po
frivolous, it may fine the claimant the
Lam v, Court of Appeals, G.R. No.
amount of not less than 1,000 pesos
1 '16220, (2000)
nor more than 5,000 pesos, in its
discretion.
• The purpose of the notice of /is pendens
•...... .! is to constructively advise, or warn all
• An the interested party must file with the
people who deal with the property that
proper court a petition for cancellation of
they so deal with it at their own risk, and
adverse claim, and a hearing must also
whatever rights they may acquire in the
first be conducted. The Register of
property in any voluntary transaction are
Deeds cannot on its own automatically
subject to the results of the action, and
cancel the adverse clalm for due
process purposes. (Dlaz-Duartll v. Ong,
may well be Inferior and subordihate to
those which rnay be flnally detefrtlined
G.R. No. 130352, 1998)
and laid down therein. (Heirs of
• The effects of a foreclosure sale retroact
Marasigan v. /AC, G.R. No. L-69303,
to the date of registration of the
1987)
mortgage. If the adverse claim is
registered only after the annotation of
Effect of Notic~ of Lis Pendens (Sec. 76, P.O.
the mortgage at the back of the
1529)
.....1·
certificate of title, the adverse claim
. l could not affect the rights of the • No actibn to recover possession, or to
,. quiet tltle, or to remove clouds, or for
mortgagee, even if the foreclosure of the
partition, or other judicial proceedings
mortgage and the public auction sale
directly affecting title or use or
occurred after the annotation of the
occupation or buildings thereon, and no
adverse claim. (Limpin v. Intermediate
judgment, and no proceeding to vacate
Appellate Court, GR No. 70987, 1'987)
or reverse any judgment, shall have
any effect)upon registered land as
• An adverse claim may exist concurrently
against p'ersons other than the
with a subsequent annotation of a notice
parties, unless memorandum or notice
of lis pendens. (Ty Sin Tei v. Dy Piao,
is filed or registered (stating institution of
G.R. No. 11271, 1958)
action or proceeding and court where
pending, date of institution, reference to
• When an adverse claim exists
number of certificate of title, and
concurrently with a notice of /is adequate description of land affected
pendens, the notice of adverse claim
and registered owner).
rnay be validly cancelled after the
registration of such notice, since the
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When Notice of Lis Pendens Is Proper
PEER·QO
1. To Recover possession of real estate
2. To Quiet title thereto
3. To remove Qlouds upon the title thereof
4. For Partition
5. To Establish a right, equitable estate, or
interest in specific real property
6. To Enforce a lien, charge, or
encumbrance against it
7. Any Qther proceedings of any kind in
court directly affecting the title to the
land or the use of occupation thereof or
the building thereon.
When Lis Pendens is Not Proper (P2LAR)
1. Preliminary attachment
2. Proceedings for the f robate of wills
3. Levies on execution
4. Proceedings for Administration of estate
of deceased persons and
5. Proceedings in which the only object is
the Recovery of a money judgment
Elements to annotate notice of /is penqens
1. Property must be of such character as
to be subject to the rule;
2. The court must have jurisdiction both
over the person and the res; and
3. The property or res must be sufficiently
described in the pleadings.
Effect of Registration:
1. Impossibility of alienating the property in
dispute during the pendency of the suit
2. It may still be alienated but the
purchaser is subject to the final outcome
of pending suit
3. ROD is duty-bound to carry over notice
of tis pendens on all new titles to be
issued
Grounds for Cancellation of Lis Pendens
(Sec. 64, P.D. 1529)
MoNoE·UVe
Before final judgment, the court may order the
cancellation;
1. After showing that notice is only for
purpose of Molesting an adverse party
2. When it is shown that it Is Not necessary to
protect the right of the party who caused
the registration thereof
3. Where the Evidence so far presented by
the plaintiff do not bear out the main
allegations of the complaint
CIVIL LAW
4. When the continuances of the trial are
Y,nnecessarily delaying the determination of
the case to the prejudice of the other party
5. ROD may also cancel by Verified petition of
party who caused such registration
• All findings of fraud should begin the
exposition with the presumption of good
faith; The erroneous annotaton of a
notice of /is pendens does not negate
good faith. The overzealousness of a
party in protecting pendent lite his
perceived interest, inchoate or
otherwise, in the corporation's
properties from depletion or dissipation,
should not be lightly equated to bad
faith. (Lu v. Lu Ym, Sr., G.R. Nos.
153690, 157381 & 170889, 2011)
Attachment
• The legal process of seizing another's
property in accordance with a writ or
judicial order for the purpose of securing
satisfaction of a judgment yet to be
rendered
•
Kinds
(a) Preliminary
(b) Garnishment
(c) Levy on execution
Registration of Attachment/Other Liens
1. Copy of writ in order to preserve any lien,
right, or attachment upon registered land
may be filed \vith ROD where land lies,
containing number of certificate of title of
land to be affev.ted or description of land
2. ROD to index ~ttachment in names of both
plaintiff and defendant or name of person •
for whom property is held or in whose name
stands in the records •
3. If duplicate of certificate of ·uue is not
presented:
4. ROD shall, within 36 hours, send notice to
registered owner by mail stating that there
has been registration and request him to
produce duplicate so that memorandum
may be made
5. If the owner neglects or refuses to comply,
the ROD shall report the matter to the court
6. The court, after notice, shall enter an order ·
to owner to surrender certificate at the time
and place named therein
7. Although notice of attachment Is not noted
in duplicate, notation in book of entry of
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ROD produces the effect of registration
already.
Effects of Registration of Attachment (REEA)
1. Creates ,Beal right
,·'I 2. Has priority over ~xecution sale
3. But between 2 attachments, one that is
registered §arlier is preferred
4. If it is not registered, Actual knowledge has
the same effect as registration
When Attachment may be Discharged
1. Upon giving of a counter-bond;
2. When attachment was improperly or
..... ~ irregularly issued or enforced; or
t
3. When attaching party's bond is insufficient
Execution Sale
To enforce a lien of any description on
registered land, any execution or affidavit to
enforce such Hen shall be filed with ROD where
land lies.
Register In registration book & memorandum
upon proper certificate of title as adverse claim
or as ah encumbrance.
To determine preferential rights between 2 liens:
priority of registration of attachment.
Tax Sale
Sale of land for collection of delinquent taxes
and penalties due the government
• In personam (all persons interested shall be
notified so that they may be given an
opportunity to be heard)
• Notice to be given to delinquent taxpayer at
...,. his last known address
• Publication of notice must also be made in
English, Spanish, and local dialect, posted in
a public and conspicuous place in the place
where the property is situated and at the
main entrance of the provincial building
• Sale cannot affect rights of other lien
holders unless given the right to defend their
rights: due process must be strictly observed
• Tax lien is superior to an attachment
• There is no need to register a tax lien
because it is automatically registered once
the tax accrues
• But the sale of registered land to foreclose a
)
i• tax lien needs to be registered
CIVIL LAW
Procedure of Registration of Tax Sale
1. Officer's return shall be submitted to the
ROD together with the owner's duplicate
title
2. Register in the registration book
3. Memorandum shall be entered in the
certificate as an adverse clalm or
encumbrance
4. After the period of redemption has expired
and no redemption was rnade (2 years from
registration of auction sale), title must be
cancelled and a new title will be issued
5. Before the cancellation, notice shall be sent
to registered owner, with the directive that
he surrender title and show cause why it
should not be cancelled
Other Parties Required to Register
Involuntary Dealings
\,
1. Assignee in Involuntary Proceeding for
Insolvency (Sec. B:3, P.D. 1529)
• It is the duty of the officer serving the
notice to flte a copy of such notice to
ROD where the property of the debtor is
located
• Assignee elected or appointed by court
shall be entitled to entry of a new
certificate of registered land upon
presentment of copy of assignment with
the bankrupt's duplicate certificate of
title
• New certificate shall state that it is
entered into by him as assignee or
trustee in insolvency proceedings
• Upon order vacating the · insolvency
proceedings, any title issued in name of
assignee shall be ordered surrendered
and the .debtor shall be entitled to entry
of new certificate in his name .
2. Government in Eminent Domain (Sec. 85,
P.O. 1529) •
1. The expropriating body is required to file a
copy of the judgment in the eminent domain
proceeding with in ROD, which states
description of property, certificate number,
interest expropriated, nature of public use
2. A memorandum shall be made on the
certificate or, if fee simple is taken, a new
certificate of title shall be issued
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E. ASSURANCE FUND
Assurance Fund
• Special fund created by P.O. 1529 to
compensate a person who sustains loss
or damage, or is deprived of land or
interest therein, as a consequence of
the bringing of the land under the
operation of the Torrens system
Contribution to the Assurance Fund (Sec. 93,
P.O. 1529)
• A contribution to the fund, amounting to
one-fourth (1/4) of one percent (1 %) of
the land's assessed value shall be made
in the following instances:
o Upon the entry of a certificate of
title in the name of the
registered owner
o Upon the original registration on
the certificate of title of a
building or other Improvements
on the land covered by said
certificate •
o Upon the entry of a certificate
pursuant to any subsequent
transfer of registered land
• The contribution shall be based on the
assessed value, according to the last
assessment for taxation. If the land has
not yet been assessed for taxation, its
value shall be determined by the swam
declaration of two disinterested persons
to the effect that the value fixed by them
is to their knowledge, a fair valuation,
subject to modification by the courts.'
Action for Compensation from the Fund
• An action civil In character, which may
be in the form of an ordinary complaint
for damages.
• The person bringing the action for
damages against the Fund must be the
registered owner or holders of transfer
certificates of title or innocent
purchasers for value (La Urbana v.
Bernardo, 62 Phil. 790, 1936)
This remedy is not available when the
party seeking compensation was
negligent, as when there were
circumstances which should have put
him on guard and prompted him to
investigate the property involved (Torres
v. CA, 186 SCRA 679, 1990)
CIVIL LAW
Who may file (Requisites)
1. A person who sustained loss or damage, or
is deprived land or any estate or interest
therein
2. Such loss, damage or deprivation was
occasioned by the bringing of the land
under the operation of the Torrens system
or arose after the original registration of the
land .1
3. The loss, damage or deprivation was due
to: fraud, or any error, omission, mistake, or
mis-description; in any certificate of title or in
any entry qr memorandum in the
registration book. (Loss or damage should
not be due to breach of trust or mistake in
resurvey resulting in expansion of area in
certificate of title.)
4. The aggrieved party was not negligent.
5. He Is barred under the provisions of P.O.
1529 or under the provisions of any law
from recovering such land;
6. The action has not prescribed.
Against whom filed (Sec. 96,' P.O. 1529)
• If the loss, damage, or deprivation is
wholly through the fault, negligence,
omission, mistake, or misfeasance of
the court personnel, the ROD or his
deputies and employees: the action
must be brought against the ROD and
the National Treasurer
• If the same is attributable to persons
other than said officials, the action must
be . brought against the ROD, the
National Treasurer, and such other
persons.
Where to file •
• Any court of competent Jurisdiction: RTC
in city where property lies or resident of
plaintiff ·
Prescriptive Period (Sec. 102, P.O. 1529)
• The_ action must be instituted within 6 years from
the issuance of the certificate of tiUe.
• If the plaintiff is minor, insane or imprisoned he
has additional 2 years after disability is remov~d to
file the action.
,.
Compensation ancl' Execution (Secs. 97,99
P.O. 1529) .
• Compensation cannot be more than the
fair market value of land at time of loss.
• Amount to be recovered is not limited to
PS00,000 which is maintained as
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standing fund. If fund is not sufficient,
/ .. '
-~ ) National Treasurer is authorized to
make up for deficiency from other funds
available to Treasury even if not
appropriated.
• Execution . is first sought against the
person responsible for fraud; if he is
/' -. insolvent, against the National Treasury.
~'· .:
1 Thereafter, the Government shall be
subrogated to the rights of plaintiff to go
against other parties or securities.

c>.
-.' , '

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.,.,')'

....... · •
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XII. TORTS AND DAMAGES A. TORTS

·TOPIC OUTLINE UNDER THE SYLLABUS: 1. ELEMENTS

XII. TORTS AND DAMAGES Definition of Quasl-Delict
A. Torts
Whoever by act or omission causes damage to
1. Elements
another, the.re being fault or negligence, is
2. Culpa aqui/iana vs. culpa contractual vs.
obliged to pay for the damage done. Such fault
culpa criminal
3. Vicarious liability or negligence, if there is no pre-existing
4. Res ipsa loquitur contractual relation between the parties, is
5. Last clear chance called a quasl-dellct and is governed by the
6. Damnum absque injuria provisions of this Chapter. (Art.2176)

B. PROXIMATE CAUSE Definition of Tort

Acts giving rise to civil liability but are not
C. NEGLIGENCE necessarily the consequences of crimes or
1. Standard of care contractual obligations. (Paras, Pre-week
2. Presumptions Handbook in Civil Law, p. 588, 2012)

D. DAMAGES Elements of Quasl-Dellct (DAM-FAU-CONN-

1. General provisions NOPRE)
2. Kinds of damages 1. .Qamage suffered by plaintiff
3. In case of death 2. Fault or Negligence of the defendant, or
some other person for whose acts he must •
respond ·;,
3. Connection ot: cause and effect between
the fault or neg.ligence of the defendant and
the damages incurred by the plaintiff
4. No pre¥exlsting contractual relation
between the parties (Andamo v.
International Appellate Court G.R. No.
74761, 1990)

An obligation based on quasi-delict cannot arise

from the mere breach of a contract. However, in
cases where the act that breaks a contract is
also a tort, an obligation based on quasi-delict ·•
may arise between parties althouqh they are
previously bound by a contract. (Air France v,
Carrascoso G.R. No. L-21438, 1966)

For example, in Air France v. Carrascoso (G.R.

No. L·21438, 1966), the Supreme Court held the
common carrier liable for moral damages
(ordinarily not recoverable in breach of contract
cases) because the common carrier's act which
breached the contract of carriage (i.e., the racist
policy of giving a first class seat to a "white man
with a better right to the seat") was wrongful by ·
itself. In that situation, the Supreme Court
declared that the act which breached the
contract was itself a tort.

In another case, the Supreme Court held that Air

France penalized. the racist policy of the airline
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which emboldened the petitioner's employee to CLASSIFICATION OF TORTS
(1 forcibly oust the respondent to cater to the
comfort of a white man who allegedly "had a (a) Negligent Torts
better right to the seat." The public
embarrassment caused to the passenger was Quasi-Delict
the justification for the Circuit Court of Appeals, Whoever by act or omission causes damage to
(Second Circuit), to award damages to the latter. another, there being fault or negligence, is
r: ··., From the foregoing, it can be concluded that obliged to pay for the damage done. Such fault
( ) should the act which breaches a contract be or negligence, if there is no pre-existing
done in bad faith and be violative of Article 21, contractual relation between the parties, is
then there is a cause to view the act as called a quasi-delic~ and is governed by the
constituting a quasl-dellct. (Philippine School of provisions of this cryapter. (Arl.2176)
fl ,/
.:.
Business Administration v. Court of Appeals,
G.R. No. 84698, 1992) Negligence
The omission of that degree of diligence which is
Report of the Code Commission required by the nature of the obligation and
r > Initially, the Code of Commission planned to corresponds to the circumstances of the
decide against using the word "tort" because persons, time and place. (Art. 1173)
.,. \
they believed that such will not be accurate
.... I since "tort" in Anglo-American law "is much Kinds of Negligence
broader than the Spanish-Philippine concept of 1. Quasi-dellct (Art. 2176)
r:
obligations arising from non-contractual 2. Contractual negligence (Arts. 1170-1174)
negligence." Tort in Anglo-American 3. Criminal negligence (Revised Penal Code,
-.:.,
Jurisprudence includes not only negligence but Art. 356)
also intentional criminal acts. The plan was for
,·- .. intentional acts to be covered by the Revised Doctrine of Attractive Nuisance
Penal Code. One who maintains on his premises dangerous
instrumentalities or appliances of a character
What happened was the opposite since: likely to attract children in play and who fails to
(1) The word "tort" was still used in other exercise ordinary care to prevent children from
statutory provisions that recognize tort as a playing therewlth or resorting thereto, Is liable to
source of liabllity a child of tender years who is Injured thereby,
(l.e. Sec 22 and 100 of the Corporation even if the child is technically a trespasser in the
Code, Art. 68 of the Child Youthful Welfare premises. (Hidalgo v. CA, G.R. No. L-342, 1952)
Code, and Sec. 17(a)(6) of the Ship
Mortgage Decree) When Attractive Nuisance Not Applicable
Attractive nuisance doctrine generally is not
(2) The Supreme Court has repeatedly used applicable to bodies of water, artificial as well as
the term "tort" in deciding cases involving natural, in the absence of some unusual
negligent acts or omissions as well as those condition or artificial feature other than the mere
involving intentional acts. water and its location .
.
With the enactment of the New Civil Code, the Hence, when the owner of private property
intention to adopt the common law concept of , creates an artificial pool on his own property or a
•
tort was revealed as different. Intentional and tank, merely duplicating the work of nature
unintentional common law torts were without adding any new danger, owner is not
incorporated in the NCC. (Report of the Code liable. (Hidalgo Ii. CA, G.R. No. L-3422, 1952)
Commission, pp.161-162)
(b) Intentional Torts
I~

Every person crimlnally liable for a felony is also

civilly liable (Revised Penal Code, Art. 100)
l\

However, not all crimes give rise to civil liability

(e.g. begging in contravention of ordinances,

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violation of game laws, infractions of traffic rules
where no one is injured) (Barredo v. Garcia,
G.R. No. L-48006, 1942).
NOTE: Quasi-delict includes acts done through
fault.
Breach of a promise to marry
General rule: Breach of a promise to marry by
itself is not actionable.
Exception: In cases where there is another act
independent of the breach of a promise to marry
which gives rise to liability
(a) Cases where there was financial damage
(b) Social humiliation caused to one of the
parties
(c) Where there was moral seduction
(d) If the breach was done in a manner that is
clearly contrary to good morals.
Moral seduction connotes the Idea of deceit,
enticement, superior power or abuse of
confidence on the part of the seducer to which
the woman has yielded for which the seducer
can be held liable for damages. (Gashem
Shookat Baksh v. Court of Appeals, G.R. No.
97336, 1993)
Sexual Intercourse is not by itself a basis for
recovery but damages could be awarded If the
sexual intercourse Is not a product of
voluntariness or mutual desire. (Constantino v.
Mendez, G.R. No. 57227, 1992)
Seduction without breach of promise to
marry
Seduction by itself, is also an act contrary to
morals, good_customs and public policy.
The defendant is liable if he employed deceit,
enticement, superior power or abuse of
confidence in successfully having sexual
intercourse with another even if he satisfied his
lust without promising to marry the offended
party. It may not even matter that the plaintiff
and the defendant are of the same gender.
Sexual Assault
Defendant is liable for all forms of sexual
assault.
Desertion by a Spouse
A spouse has the legal obligation to live with
his/her spouse. If a spouse does not perform
CIVIL LAW
'·1
his/her duty to the:: other, he may be liable for
damages for such ~-omission because the same
"is contrary to law,i morals, good customs and
public policy. :
Trespass and beprivatlon of Property
Two Kinds:
1. Trespass to and/or Deprivation of real
property
(a) Liability for damages under the Revised
Penal Code and Art. 451 of the Civil Code
requires intent or bad faith
(b) A builder in good faith who acted negligently
may be held liable under Art. 2176 of the
Civil Code.
(c) Art. 448 of the Civil Code in relation to Art.
456 does not permit action for damages
where the builder, planter or sower acted in
good faith. The landowner is limited to the
options given to him under Art. 448.
2. Trespass to and/or Deprivation of private
property
In tort, trespass extends to all cases where a •
' person is deprived of his personal property even
in the absence of criminal liability.
Examples: theft, robbery
It may cover cases where the defendant was
deprived of personal property for the purpose of
obtaining possession of real property. The
defendant who was landlord, was held liable
because he deprived the plaintiffs, his tenants of
water in order to force them to vacate the· lot
they were cultivating. (Magbanua v. /AC, G.R.
Nos. L-66870-72 1985)
1,
•
The right to disconnect and deprive the
customer, who unreasonably fails to pay his bill~
of electricity should'be exercised In accordance
with the law and rules, If a company disconnects
the electricity service without prior notice as
required by the rules, the company commits a
tort under A11. 21. (Manila Electric Co. v. CA,
G.R. No. 132539, 2001)
Art. 1664 states that "ft]he lessor is not obliged
to answer for a mere act of trespass which a .
third person may cause on the use of the thing
leased; but the lessee shall have a direct action
against the intruder." Here, BSP (lessor) is not
liable for breach of contract because it was not
remiss in its obligation to provide the Spouses M
a suitable parking space for their jeepneys as it
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(
I-, •
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even hired security guards to secure the
(
\
.. :' premises; hence, it should not be held liable for
the loss suffered by the Spouses M. BSP cannot
be held lieble for breech because no negligence
can be Imputed to It. Neither can BSP be held
vicariously liable for the negligence of the two
guards because BSP ls not their employer.
(Spouses Mamaril v. Boy Scouts of the
Philippines, G.R. No. 179382, 2013)
Abortion and Wrongful death
Liability for damages
Damages may be recovered by both spouses if:
·:
r 'I (a) The abortion was cause through the
physician's negligence or
(b) Done Intentionally without their consent
NOTE: A doctor who performs an illegal abortion
is criminally liable under Art. 259 of the Revised
Penal Code.
·-.· The husband of a woman who voluntarily
procured her abortion may recover damages
from the physician who cause the same on
,,-#··. account of distress and mental anguish
attendar'tt to the loss of the unborn chlld and the
.r: ',
dlsappolntrnent of his parental expectation .
(Geluz v. CA, G.R. No. l.-16439, 1961)
Illegal Dismissal
The right of the employer to dismiss an
employee should not be confused with the
manner in which the right is exercised and its
effects.
&.,:.\ If the dismissal was done anti-socially and
I.,,.· oppressively, the employer should be deemed to
have violated Art. 1701 of the Civil Code (which
prohibits acts of oppression by either capital or
labor against the other) and Art. 21.
,(""
:i
\.:, J
An employer may be held liable for damages If
the manner of dismissing is contrary to morals,
good customs and public policy.
~--. Malicious Prosecution
An action for damages brought by one against
:_ .. another whom a criminal prosecution, civil suit,
or other legal proceeding has been instituted
maliciously and without probable cause, after
termination of such prosecution, suit or
proceeding in favor of the defendant therein.
~ ... ,·
'.:..../ '
--"I"
'
CIVIL LAW
The action which is terminated should be one
begun in malice, without probable cause to .
believe that the charges can be sustained.
Statutory BHH
Arts. 19-21, 2, 32, 33, 35, 2217, 2219(13)
Elements:
1. The fact of the prosecution and the further
fact that the defendant was himself the
prosecutor; and that the action was finally
terminated with an acquittal.
2. That in bringing the action, the prosecutor .
acted without probable cause.
3. The prosecutor was actuated or impelled by
legal malice, which is a sinister design to
vex or humiliate
NOTE: Presence of probable cause signifies
absence of malice. Absence of malice signifies
good faith on the part of the defendant. Good
faith may even be based on mistake of law.
Acquittal presupposes that criminal information
is filed in court and final Judgment rendering
dismissing the ·, case. Nevertheless, prior
ae~ultt&I may lncludti dl1h'll!lHI by thti
prosecutor after prellmlnery Investigation. (Giobe
Mackay and ~adJo'._Corp 11. CA, G.R. No. 81262,
1989)
It is possible to file a case for malicious
prosecution even if the previously-instituted case
was a civil case.
Public Humiliation
Such acts also constitute an offense under Art.
359 of the Revised Penal Code (Slander by
Deed)
(a) A person can be held liable for damages for
slapping another in public. (Patricio v. Hon.
Oscar Leviste, GR. No. L-51832, 1989)
(b) A defendant may likewise be guilty of a tort
even if he acted in good faith if the action
' has caused humiliation to another. (Grand
Union Supermarket v. Espino, G.R. No. L-
48250, 1979) .
Ostentatious Display of Wealth
Thoughtless extravagance for pleasure or
display during a period of public want or
emergency. (Art. 25)
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Violation of Right of Privacy and Family
Relations
The following acts though they may not
constitute a criminal offense, shall produce a
cause of action for damages, prevention and
other relief: (PMIV)
(a) frying into the privacy of another's
residence
(b) Meddling with or disturbing the private life or
family relations of another ·
(c) !ntriguing to cause another to be alienated
from his friends
(d) ,Yexing or humiliating another on account of
his religious beliefs, lowly station in life.
Place of birth, physical defect, or other
personal condition (Arl.26)
In his opinion in Pollo v. Constantino-David
(2011), J. Bersamin, citing US authorities,
identified 4 torts that interfere with or violate a
person's right to privacy:
1. The tort of intrusion upon the plaintiff's
seclusion or solitude, or into his .private
affairs
2. The public disclosure of embarrassing private
facts about the plaintiff
3. The publicity that places the plaintiff in a false
light in the public eye
4. The tort of appropriation, which is committed
when a person adopts "to his own use or
benefit the name or likeness of another."
Dereliction of Official Duty of Public Officers
May be brought by any person suffering from
material or moral loss because a public servant
refuses or neglects, without just cause to
perform his official duty (Art. 27)
Requisites (PNMA) • Economic relations
1. Defendant is a fublic officer charged with
the performance of a duty in favor of the
plaintiff
2. !:!on-performance of such duty without Just
cause (ministerial)
3. Plaintiff sustained Material or moral loss as
consequence of such non-performance
4. The ~mount of such damages, if material.
Inaction must be due to malice or inexcusable
negligence (Philippine Match Co., Ltd. vs. City of
Cebu, G.R. No. L-30745, 1978).
Purpose of this article is to end the "bribery
system, where the public official, for some flimsy
excuse, delays or refuses the performance of his
CIVIL LAW
duty until he gets some kind of pabagsak."
(Tuzon v. CA, G.R. No. 90107, 1992)
Refers to non-feasance; not to malfeasance or
misfeasance (Torio v. Fonatanilla, G.R. No. L-
29993, 1978)
Malfeasance - performance Of some act which
ought not to be done
Misfeasance - improper performance of some
act which might lawfully be done
Nonfeasance - omission of some act which
ought to be pertorrnad
·'
Example of a public: officer held liable under Art.
27 for failure or refusal to comply with a final and
executory order of the CSC (Vital-Gozon, G.R.
No. 129132, 1998).
Constitutional Protection Against Illegal
Searches and Seizures may be invoked
against private individuals •
~ Private persons may be held liable for violating
another person's civil and/or political rights on
the basis of Art. 32 which states that "[a]ny
public officer or employee, or any private
individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or
. impairs any of the following rights and liberties of
another person shall be liable lo the latter for
damages". Thus, damages may be awarded
against the hotel and its VP for violating the
union officers' right, against unreasonable
searches and seizures. (Si/ahis v. So/uta, G.R.
No. 163087, 2006) •
1. Unfair Competition
Unfair competition in agricultural, commercial or
Industrial enterprises or In labor through the use
of force, intimidation, deceit. Machinatioh or
other unjust, oppressive or highhanded method.
(Art. 28)
.
To qualify the competition as unfair, it must have
two characteristics:
1. It must involve an injury to a competitor or
trade rival; and
2. It must involve acts which are characterized
as "contrary to good conscience" or
"shocking to judicial sensibilities" or
otherwise unlay.,ful (these include force,
,..'•.·
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\. )
intimidation, deceit, machination or any NOTE: The lnterte'~er cannot be liable for more
other unjust, oppressive or high handed than the contractin~ party who breached his own
method) (Willaware Products Corp. v. contract (Daywalt ~s. La Corporacion, G.R. No.
r>. Jesichris Manufacturing Corp., G.R. No. L-13505, 1919).
. ..
• I
193349, 2014)
Violation of Rights and Liberties of a Person
CJ Example: A former employer's act of circulating Any public officer or employee, or any private
a ·watchlist" with the name of its former individual, who directly or indirectly obstructs,
employee with the intention of preventing the defeats, violates or in any manner impedes or
employee from obtaining employment (Calamba impairs any of the rights and liberties (under Art.
~<··,
I
'~ .: Medical Center v. NLRC, G.R. No. 176484, 32) of another person shall be liable to the latter
2008). for damages.
,... ..
.\.~ l
Interference Good faith is not a defense (Lim v. De Leon,
One becomes liable in an action for damages for G.R. No. L-22554, 1975)
a non-trespassory invasion of another's interest
(" . in the private use and enjoyment of asset if "Indirectly" may mean instigation or active
1. the other has property rights and privileges involvement in the act which resulted in the
· with respect to the use or enjoyment violation of civil and political rights (MHP
interfered with, Garments vs. CA, G.R. No. 86720, 1994).
2. the invasion is substantial,
.<"
~-.'
3. the defendant's conduct Is a legal cause of Emotional Distress Torts
the invasion, and They are injuries to a person's emotional
.
r-- ..
1, .•.
4. the invasion is either intentional and tranquility due to personal attacks on his
unreasonable or unintentional and character. To recover for the intentional
.,,.,.~· ' actionable under general negligence rules. infliction of emotional distress, the plaintiff must
. _,,. show: (CESI) :
Elements of Tortious Interference 1. Conduct of the defendant was [ntentional or
1 . Existence of a contract in reckless disregard of the plaintiff;
2. Interferer knows that the contract exists 2. Conduct was gxtreme and outrageous;
f .. : 3. Actual knowledge is not necessary; 3. £ausal ·Connection between the
awareness of facts which indicate the defendant's conduct and the plaintiff's
' ' existence of a valid contract is enough mental distress;
~l......
(Lagon vs. CA, G.R. No. 119107, 2005). 4. Plaintiff's mental distress was extreme and
" ..... .§.evere. (MVRS Publlcstlons, Inc., v.
.
,·...
'
.1
It is not necessary for the interferer to know who Islamic Da'Wah Council of the Philippines,
the other contracting party is. (Gilchrist vs. G.R. No. 135306, 2003)
Cuddy, G.R. No. L-9356, 1915)
(c) Strict Liability '':
Interference is without legal excuse or 1\
/.""1,
justification t
Persons expressly made liable by law even
I , Malice without fault or negligence. •
~ >'
For damages, not for injunction; but ' Possessor and User of an Animal
requirements for the issuance of an injunction General Rule: The: possessor of an animal or
must be present (So Ping Bun vs. CA, G.R. No. whoever may make use of the same is
120554, ·t999). responsible for the damage which it may cause.
v; ••• :

General Rule: Financial/business interest is not Exceptions:

malice (Lagon vs. CA, G.R. No. 119107, 2005) 1. Force majeure
2. Fault of the injuredfdamaged person
r .
Exception: When circumstances indicate bad
faith er malice (Gov. Cordero, G.R. No. 164703,
2010)

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THE TORTFEASOR
Definition
Whoever by act or omission causes damage to
another, there being no fault or negligence Is
obliged to pay for the damage done. (Art. 2176)
(a) Direct Tortfeasor
Corporate Tortfeasor
A corporation is civilly liable in the same manner
as natural persons for torts, because "generally
speaking, the rules governing the liability of a
principal or master for a tort committed by an
agent or servant are the same whether the
principal or master be a natural person or a
corporation, and whether the servant or agent
be a natural or artificial person. All of the
authorities agree that a principal or master is
liable for every tort which he expressly directs or
authorizes, and this is just as true of a
corporation as of a natural person. A corporation
is liable, therefore, whenever a tortious act is
committed by an officer or agent under express
direction or authority from the stockholders or
members acting as a body, or, generally, from
the directors as the governing body. (Philippine
National Bank v. Court of Appeals, G.R. No. L-
2715, 1978)
Doctrine of Corporate Negligence
The doctrine of corporate negligence is the
Judicial answer to the problem of allocating
hospital's liability for the negligent acts of health
practitioners, absent facts to support the
application of respondeat superior or apparent
authority.
The theory supporting the liability of hospital is
. presumption by presenting convincing proof that
based on the recognition that the hospitals stand
to benefit from the business of providing
services to patients and should therefore be
responsible for any injury or damage that may
result under the relationship. (PSI v. Agana,
G.R. No. 126297, 2007)
CIVIL LAW
(b) Persons Made Responsible for Others
Vicarious Liability
The obligation imposed in Art. 2176 Is
dem11nd1ble not only for ona1s own aet or
omission but also for those persons for whom
one is responsible. (Art. 2180)
A person is liable not only for his own torts, but
also for those committed by others with whom
he has a certain relationship, or for whom he is
responsible.
NOTE: Vicarious llability Is not governed by the
doctrine of responaee: superior. Under the
doctrine of respondeat superior, the master is
liable in every case and unconditionally; the
negligence of the servant Is conclusively
presumed to be the negligence of the master.
However, in vicarious liability, persons are made
vicariously liable not because of the negligent or
wrongful act of the person for whom they are
responsible, but because of their own •
negligence (i.e. liability is imposed on the
employer because he failed to exercise due
diligence in the selection and supervision of his
employees).
Whenever an employee's negligence causes
damage or injury ;;to another, there instantly
arises a presumption juristantum that the
employer failed to ~xercise diligentissimi patris
families in the selection (culpa in eligiendo) or
supervision (culpa in vigilando) of its employees.
To avoid liability for a quasi-delict committed by
its employee, an employer must overcome the •
he exercised. the care and diligence of a good
father of a family in the selection and
supervision of his employee. (Delsan Transport
v. C&A Construction, G.R. No. 156034; 2003;
Light Rail Transit Association v, Navidad, G.R.
No. 145804, 2003)
Exception: The doctrine of respondeat superior
is applicable in:
1. Liability of employers under Art. 103 of the .
Revised Penal Code
2. Liability of, a partnership for the tort
committed by a partner.
Jurisdiction over the person
In Cerezo v. Tuazon, the Supreme Court held
that an employee-driver was neither an
Page 382 of 432
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indispensable nor a necessary party in an action
r·,
' . for damages filed against the employers. Thus.
it was not necessary for the court to acquire
I!.\ jurisdiction over the employee-driver to hold the
I.. I
employers liable for damages. (Cerezo v.
,-,··. Tuazon, G.R. No. 141538, 2004)
\. -- I
Doctrine of Agency by Estoppel in the
t i Negligent Acts of Physicians of Hospitals
The court has applied the doctrine of agency by
estoppel to hold hospitals liable for the negligent
acts of physicians based on:
1. The patient accepts the services of the
physician
2. The patient believes that the physicians are
agents of the hospital. (PSI v. Agana, GR
126297, 2007)
' .
'
,.., (c) Nature of Liability
\~ j
1. Children
The action of the child will not necessarily be
judged according to the standard of an adult. But
if the minor is mature enough to understand and
appreciate the nature and consequences of his
actions, he will be considered negligent if he
\:,_. fails to exercise due care and precaution in the
commission of such acts. (Taylor v. Manila
1. .. ' Electric Railroad, G.R. No. L-4977, 2010) ·
NOTE: Applying the provisions of the RPC,
Judge Sangco takes the view that a child who is
9 or below Is conclusively presumed to be
incapable of negligence. (Jerco Marketing
Corporation v. CA, G.R. No. 129792. 1999) On
the other hand, if the child is above 9 years but
below 15, there Is a disputable presumption of
absence or negligence.
Absence of negligence does not necessarily
mean absence of liability. A child under 9 years
can still be subsidiarily liable with his property
(Revised Penal Code, Art. 100)
Exemption from criminal liability does not include
exemption from civil liability.
Absence of negligence of the child may not
t ... ' excuse the parents from their vicarious liability.
(Art. 2180; Family Code, Art. 221)
2. Physical Disability
General Rule: A weak or accident-prone person
must come up to the standard of a reasonable
1' •• >''
CIVIL LAW·
man, otherwise, he will be considered as
negligent.
Exception: If the defect amounts to a real
disability, the standard of conduct is that of a
reasonable person under llke dlsablllty.
In a case, the Supreme Court had to determine
whether a blind person was negligent.
Ordinarily, whether a person was negligent or
otherwise would be determined on the basis of
the conduct of an ordinarily diligent or prudent
man. Because the man in this case was blind,
the Supreme Court determined whether or not
he was negllgenf _on the basis of the conduct
expected of an ordinarily prudent or diligent
person who is also'blind. (Francisco v. Chemical
Bulk Carriers, Inc., '.~.R. No. 193577, 2011)
3. Experts and Professionals
When a person holds himself out as being
competent to do things requiring professional
skills, he will be liable for negligence if he should
fail to exhibit the care and skill of one who is
ordinarily skilled in the particular field that he Is
in. The rule regarding experts is applicable. not .
only to professionals who have undergone
formal education (For example, men who have
had several years of experience in cleaning
septic tanks were found negligent by the
Supreme Court after .they failed to observe the
necessary precautions in cleaning the septic
tank of a public market). (Fernando v. CA, G.R.
No. 92087, 1992)
4. Nature of Activity
There are activities which by nature impose
duties to exercise a higher degree of diligence
(ex. Banks, Common Carriers).
5. Intoxication
General rule: Mere intoxication is not
negligence nor establishes want of ordinary
•
care. But it may be considered to prove
negligence. (Wright v. Manila Electric R.R. &
Light Co., G.R. No. 7760, 1914)
Exception: Under Art. 2185, it is presumed that
a person driving a motor vehicle has been
negligent if at the time of the mishap, he was
violating any traffic regulation. R.A. No. 10586
punishes driving under the influence of alcohol
or drugs.
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6. Insanity THE CONCEPTS AND DOCTRINES OF

An insane person Is exempt from liability. VICARIOUS LIABILITY, RES IPSA
However, by express provision of law, there may LOQUITUR, LAST CLEAR CHANCE,
be civil liability even when the perpetrator is held DAMNUM ABSQUE INJURJA
to be exempt from criminal liability. The insanity '1

of a person does not excuse him or his guardian

from liability based on quasi delict. (Art. 2180
2. VICARIOUS LIABILITY
and 2182). ij
Vicarious Liability;
-·- end of topic -·--
The obligation imposed in Art. 2176 is
demandable not only for one's own act or
omission but also for those persons for whom
one is responsible. (Art. 2180)

A person is liable not only for his own torts, but

also for those committed by others with whom
he has a certain relationship, or for whom he is
responsible. (Tamargo v. Court of Appeals, G.R.
No. 85044, 1992)

NOTE: Vicarious liability is not governed by the

doctrine of respondeat superior. Under the
doctrine of respondeet superior, the master is
liable in every case and unconditionally; the
negligence of . the servant is conclusively
presumed to be the negligence of the master.
(Aquino, Torts and Damages, p. 644, 2005;
Cangco v. Manila Railroad Co., G.R. No. L·
12191, 1918)

However, in vicarious liability, persons are made

vicariously liable not because of the negligent or
wrongful act of the person for whom they are
responsible, but because of their own
negligence (i.e. l,iability Is imposed on the
employer because he failed to exercise due
diligence in the selection and supervision of his
•
employees). ·

Whenever an employee's negligence causes

damage or injury to another, there instantly
arises a presumption juristantum that the
employer failed to exercise diligentissimi patris
families in the selection (culpa in eligiendo) or
supervision (culpa in vigilando) of its employees.
To avoid liability for::a quasi-delict committed by
its employee, an employer must overcome the
presumption by pre~~nting convincing proof that ·
he exercised the care and diligence of a good
father of a family in the selection and
supervision of his employee. (Delsan Transport
v. C&A Construction, G.R. No. 156034, 2003;
Light Rail Transit Association v. Navidad, G.R.
No. 145804, 2003)

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Exception: The doctrine of respondeat superior

. ,.
negligence alone, without the negligence or
•
is applicable In: wrongful acts of tn~ other concurrent tortteasors.
1. Liability of employers under Art. 103 of the • Where several causes producing an injury are
Revised Penal Code concurrent and each is an efficient cause
2. Liability of a partnership for the tort without which uie injury would not have
committed by a partner. (Aquino, Torts and happened, the Injury may be attributed to all or
Damages, p. 645, 2005) any of the causes and recovery may be had
against any or all of the responsible persons
Jurisdiction over the person although under the circumstances of the case, it
In Cerezo v. Tuazon, the Supreme Court held may appear that one of them was more
that an employee-driver was neither an culpable, and that the duty owed by them to the
indispensable nor a necessary party in an action injured person was not the same. No actor's
.~· .. for damages filed against the employers. Thus, negligence ceases to be a proximate cause
it was not necessary for the court to acquire merely because it does not exceed the
r:
'./ ' jurisdiction over the employee-driver to hold the negligence of other actors. Each wrongdoer is
·:... employers liable for damages. (Cerezo v. responsible for the entire result and is liable as
·". Tuazon, G.R. No. 141538, 2004) though his acts were the sole cause of the injury
·~- (Philippine National Construction Corporation v.
{ .. ' Joint Tortfeasors Court of Appeals, G.R. No. 159270, 2005)
',~. Joint tortfeasors are all the persons who
,,. . command, instigate, promote, encourage, Lfability of Joint Tortfeasors Distinguished
' ; advise, countenance, cooperate in, aid or abet from the Lla~ility of Persons Vicariously
". the commission of a tort, or who approve of it Liable ·
after it is done, if done for their benefit. (Ruks J . tr rtf . Persons .Vicariously
Konsult and Construction v. Adworld Sign and om o easors . Liable
,,.. Advertising Corp., G.R. No. 204886, 2015)
\~·
Tortfeasor (under Art.
The responsibility of two or more persons who 2176) and the person
Solidarily liable
are liable for quasi-delict is solidary. (Art. 2194) vicariously liable
(Art. 2194)
(under Art. 2180) are
In PNCC v. Court of Appeals, the Court ruled solidarily liable.
that the failure of the PNCC, in charge of the
maintenance of the expressway, to maintain the The solidary debtor If the person
NLEX safe for motorists constitutes negligence. who pays the injured vicariously liable pays
There should have been sufficient warning party may recover the injured party, he
devices conslderfng that there were scattered from the other debtor may recover the
ri .. ::.., sugarcane stalks still left along the toll way. his corresponding entire amount he
,l J share in the amount paid from the actual
--· PASUDECO's negligence in transporting
paid. (Art.1217)
. \
sugarcanes without proper straps and that of
PNCC in removing the emergency warning
tortfeasor (Art.2182)

devices were two successive negligent acts

::\
which were the direct and proximate cause of
the victim's injuries. As such, PASUDECO and
3. RES IPSA LOQUITUR
'[
.: . \,
f=>NCC are jointly and severally liable .
. _; Res lpsa Loquitur '.]
Where several causes combine to produce The thing speaks tot itself. It is grounded on the
injuries, a person is not relieved from liability difficulty in proving· thru competent evidence,
because he is responsible for only one of them, public policy considerations.
~- .. , it being sufficient that the negligence of the
person charged with injury is an efficient cause Where the thing which causes injury is shown to
without which the injury would not have resulted be under the management of the defendant, and
to as great an extent, arid that such cause is not the accident is such as in the ordinary course of
attributable to the person injured. It is no things does not happen if those who have the
management use proper care, it affords •
defense to one of the concurrent tortfeasors that
,. the injury would not have resulted from his reasonable evidence, in the absence of an
I .
'- . explanation by the defendant, that the accident
.., . . Page 385 of 432
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arose from want of care. (Layugan v. IAC, G.R.
73998, 1998)
Elements of Res lpsa Loquitur:
1. The accident was of a kind which does not
ordinarily occur unless someone ls
negligent;
2. The instrumentality or agency which caused
the injury was under the exclusive control of
the person charged with negligence
3. Injury suffered must have not been due to
any voluntary action or contribution on the
person injured (D.M. Consunji v. Court of
Appeals, G.R. No. 137873, 2001).
The doctrine of res ipsa loquitur finds no
application if there is direct proof of absence or
presence of negligence. If there is sufficient
proof showing the conditions and circumstances
under which the Injury occurred, then the
creative reason for the said doctrine disappears.
(Huang v. Philippine Hoteliers Inc., G.R. No.
180440, 2012)
Medical Malpractice Case
The general rule on the necessity of expert
testimony applies only to such matters clearly
within the domain of medical science, and not to
matters of common knowledge. Ordinarily, only
experienced physicians and surgeons are
competent to testify on whether a patient has
been treated with reasonable care. However,
where common knowledge and experience
teach that a resulting injury would not have
occurred if due care had been exercised (e.g.
leaving gauzes inside the body of the patient
after an operation, operating on the wrong part
of the body, etc.), an inference of negligence
may be drawn giving rise to an application of the
doctrine of res ipsa loqultur without medical
evidence. (Ramos v. Court of Appeals, G.R. No.
124354, 1999)
Liability of Hospital in Cases of Medical
Negligence
The court has applied the doctrine of agency by
estoppel to hold hospitals liable for the negligent
acts of physicians based on:
1. The patient accepts the services of the
physician
2. The patient believes that the physicians are
agents of the hospital.
The case of PSI v. Agana pronounced that the
doctrine of corporate negligence is the judicial
CIVIL LAW
answer to the problem of allocating hospital's
liability for the negligent acts of health
practitioners, absent facts to support the
application of respondeat superior or apparent
authority.
The theory supporting the liability of hospital is •
based on the recognition that the hospitals stand
to benefit from the business of providing
services to ·patients and should therefore be
responsible for any injury or damage that may
result under the relationship. (Professional
Services, Inc. v. Agana, G.R. No. 126297, 2007)
Doctrine of lntormed Consent
The doctrine of lhformed consent requires a
doctor to inform his patient of the material risks
associated with a rrtedical procedure.
\
Eletnents of a malpractice clalm based on
the doctrine of Informed consent
1. The physician had a duty to disclose
material risks;
2. He failed to disclose or inadequately
disclosed those risks;
3. As a direct and proximate result of the
failure to disclose, the patient consented to
the treatment, which he or she would
otherwise not have consented to; and
4. The patient was injured. by the proposed
treatment (Liv. Soliman, G.R. No. 165279,
2011)
4. LAST CLEAR CHANCE
Last Clear Cha,;ice
Also known as "The Doctrine of Disc6vered
Peril"
Where both parties are negligent but the
negligent act of one is appreciably later In time
than that of the other, or where it is impossible to
determine whose fault or negligence brought
about the occurrence of the incident, the one
who had the last clear opportunity to avoid the
impending harm but failed to do so, is
chargeable with the consequences arising
therefrom.
Stated differently, the rule is that the antecedent
negligence of a person does not preclude
recovery of damages caused by the supervening
negligence of the latter, who had the last fair
chance to prevent the impending harm by the
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exercise of due diligence (Canlas v. Court of B. PROXIMATE CAUSE
fl' ... » ,
f· 1-. \ Appeals, G.R. 112160, 2000).
i·
Proximate Causej
I C;
t.
Even though a person's own acts may have
pl~G@d him In Ii pc:ntltion gf peril and an Injury
1, r, results, tl'ie lt,]UF!d I~ @ntltled to reoovar If the
defendant thru the exercise of reasonable care
That cause which, In natural and ccntlnucus
§@~U@Mc@, unbroken by any efficient Intervening
! and prudence might have avoided injurious
. cause, produces the injury, and without Which
f"
c .
( '
consequences to the plaintiff. (Bustamante vs.
the result would not have occurred. (Vda. de
Bataclan v. Medina, G.R. No. L-10126, 1957).
Court of Appeals, G.R. No. 89880, 1991).
The proximate cause of the injury is not
Requisites: necessarily the immediate cause of, or the
1. Plaintiff was in a position of danger by his cause nearest in time to, the injury. It is only
own negligence when the 'causes are independent of each other
(':". 2. Defendant knew of such position of the
: I
,..... plaintiff
that the nearest is to be charged with the
disaster. So long as there is a natural, direct and
3. Defendant had the last clear chance to continuous sequence between the negligent act
avoid the accident by exercise of ordinary and the injury that it can reasonably be said that
care but failed to exercise such last clear but for the act the injury could not have
chance and occurred, such negligent act Is the proximate
4. Accident occurred as proximate cause of cause of the injury, and whoever is responsible
J
I
'-
such failure therefore ls liable for damages resulting
therefrom. (Brinas v. People of the Philippines,
Who may invoke - Plaintiff G.R. L-30309, 1983). •
;
,,-·· When the doctrine is not applicable Proximate Cause Inapplicable in Breach of
(a) Joint tortfeasors Contract
..-- (b) Defendants concurrently negligent Such doctrine only applies in actions for quasi-
.:...... j
~. .. ' (c) As against 3rd persons (Aquino, Torts and delicts, not in breach of contract. It is a device
Damages, p. 230, 2005) for imputing liability to a person where there is
no relation between him and another party.
5. DAMNUM ABSQUE INJURIA (Sps. Guanio v. Makati Shangri-La Hotel, G.R.
:;"' No. 190601, 20,11) But note that in the case of
Damnum Absque lnjuria Bataclan v. Medina (G.R. No. L-10126, 1957),
the court used the doctrine of proximate cause.
Damage without Injury in the case breach of contract of carriage but
A person may have suffered physical hurt or only to determine the extent of liability.
injury, but for as long as no legal injury or wrong
has been done, there is no liability (see Custodio Necessary Link ..,
v. Court of Appeals, G.R. No. 116100, 1996) In Vda. De Bataclifr v. Medina, the Court held
,. I that the proximal~ cause of the death of
·~~--·
,., I
When Damnum Absque lnjuria Does Not Bataclan was the o~erturning of the bus, and not
Apply the fire brought about by the torch of the
It does not apply when there is an abuse of a rescuers. This is for the reason that when the
person's right, or when the exercise of this right vehicle turned completely on its back, the
is suspended or extinguished pursuant to a court leaking of the gasoline from the tank was not
order. Indeed, in the avallment of one's rights, unnatural or unexpected; because it was very
one must act with justice, give others their due, dark in the rural area where lanterns and
and observe honesty and good faith. (Amonoy v, flashlights are not available, the rescuers had to
Gutierrez, G.R. No. 140420, February 15, 2001) carry a torch with them; and what was more
··- end of topic ----·· natural than that said rescuers should innocently
(, '
approach the overturned vehicle to extend the
\~) aid and effect the rescue requested from them.
(Vda. de Bataclan v. Medina, G.R. No. L-10126,
1957).
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In Dela Liana v. Biong, the Court ruled that the
petitioner did not present any testimonial or
documentary evidence that directly shows the
causal relation between the vehicular accident
and petitioner's whiplash injury. Hence, the
petitioner failed to overcome the burden of proof
required to establish that the negligent act of the
driver is the proximate cause of her whiplash
injury. (Dela Liana vs. Biong, G.R. No. 182356,
2013)
NOTE: If plaintiffs negligence is only
contributory, he is considered partly responsible
only. Plaintiff may still recover from defendant
but the award may be reduced by the courts in
proportion to his own negligence. (Bank of
America NT & SA vs. Philippine Racing Club,
G.R. No. 150228, 2009)
Immediate Cause - The cause nearest in time
to the injury.
Intervening Cause - If the intervening cause is
one which in ordinary human experience is
reasonably to be anticipated or one which the
defendant has reason to anticipate under the
particular circumstances, the defendant may be
negligent among other reasons, because of
failure to guard against it; or the defendant may
be negligent only for that reason.
One who sets a fire may be required to foresee
that an ordinary, usual and customary wind
arising later will spread it beyond the defendant's
own property, and therefore to take precautions
to prevent that event. The person who leaves
the combustible or explosive material exposed in
· a public place may foresee the risk of fire from
some independent source. In all of these cases
there is an intervening cause combining with the
defendant's conduct to produce the result and in
each case the defendant's negligence consists
in failure to protect the plaintiff against that very
risk.(Phoenix Construction v. IAC, G.R. L-65295,
1987).
A prior and remote cause cannot be made the
basis of an action if such remote cause did
nothing more than furnish the condition or give
rise to the occasion by which the injury was
made possible, if there intervened between such
prior or remote cause and the injury a distinct,
successive, unrelated, and efficient cause of the
injury, even though such injury would not have
happened but for such condition or occasion. If
•
CIVIL LAW
no danger existed In the condition except
because of the Independent cause, such
condition was not the proximate cause. And If an
Independent negligent act or defective condition
sets into operation the Instances, which result in
injury because of the prior defective condition, •
such subsequent act or condition is the
proximate cause (Manila Electric Co. l'-
• Remoquillo, G.R. No. L-8328, 1956).
Remote Cause
That cause which some independent force
merely took advantage of to accomplish
something not the natural effect thereof. It
cannot be considered the legal cause of the
damage. (Aquino, Torts and Damages, p. 318,
2013)
Concurrent Cause
Where several causes producing an inJury are
concurrent and each Is an efficient cause
without which · the injury would not have
happened, the Injury may be attributed to all or
any of the causes and recovery may be had
against any or all of the responsible persons
although under the circumstances of the case, It
may appear that one of them was more
culpable, and that the duty owed by them to the
injured person was not the same. No actor's
negligence ceases". to be a proximate cause
merely because Jt does not exceed the.
negligence of othe~ actors. Each wrongdoer is
responsible for the entire result and is liable as
though his acts were the sole cause of the
injury. (Ruks Konsult and Construction v.
Adworld Sign and Advertising Corp., G.R. No.
204886, 2015)
Cause in Fact
'BUT FOR' TEST
The (but for) test requires a plaintiff to establish
that the act complained of probably caused the
subsequent disability. (Nelson V. Fibreboard
Corporation, [912 F.2d 469]) ·
The test applied to determine whether negligent
conduct was the efficient, or proximate cause of
the injury or loss suffered by the claimant is
whether such conduct is a cause without which
the injury would not have taken place (which test
is frequently referred to as the "sine qua non
rule"), or is the efficient cause which set in
motion the chain of circumstances leading to the
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lnJUry. (Sangco, Philippine Law on Torts and
r:
. ) Damages, 1994)
Substantial Factor
It is the rule under the substantial factor test that
,,..,.... if the actor's conduct is a substantial factor in
.z I.
o
bringing about harm to another, the fact that the
actor neither foresaw nor should have foreseen
the extent of the harm or the manner in which It
occurred does not prevent him from being liable.
() (Philippine Rabbit Bus Lines v. /AC, G.R~ 66102,
1990)
Concurrent Causes
If one suffers damage as the proximate result of
the negligence of two others, and the damage
would not have occurred but for the negligence
,· of each of such parties, both are liable to the
...... person so Injured. (Menne v. Celotex
Corporation, 861 F.2d 1453, 1988)
Legal Cause
r.
Test of Foreseeability
.'.' . Where the particular harm was reasonably
foreseeable at the time of the defendant's
,,... misconduct, his act or omission is the legal
cause thereof. Foreseeability is the fundamental
test of the law of negligence. To be negligent,
r
..;,....... the defendant must have acted or failed to act in
such a way that an ordinary reasonable man
would have realized that certain interests of
certain persons were unreasonably subjected to
,_ a general but definite class of risk which made
the actor's conduct negligent, it is obviously the
consequence for the actor must be held legally
responsible. Otherwise, the legal duty is entirely
defeated. Accordingly, the generalization may
be formulated that all particular consequences,
that is, consequences which occur in a manner
which was reasonably foreseeable by the
defendant at the time of his misconduct are
legally caused by his breach of duty. (Achevara
v. Ramos, G.R. No. 17.5172, 2009)
Test of Natural and Probable Causes
.,· A natural consequence of an act is the
consequence which ordinarily follows it. A
probable consequence is one that is more likely
to follow than fail to follow its supposed cause
but it Is need one be one which necessarily
follows such cause. (Sangco, Phiiippine Law on
Torts and Damages, 1994)
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CIVIL LAW
HINDSIGHT TEST
A party guilty of negligence or orrusston is
responsible for all the consequences which a
prudent and experienced party, fully acquainted
with all the circumstances which in fact exist,
whether they could have been ascertained by
reasonable diligence, or not, would have thought
at the time of .the negligent act as reasonably
possible to follow, if they had been suggested to
his mind. (Sangco, Philippine Law on Torts and
Damages, volume 1, p. 113, 1993)
•
ORBIT TEST
If the foreseeable risk to plaintiff created a duty
which the defendant breached, liability is
imposed for any r~sulting injury within the orbit
or scope of such\"lnjury, It Is not the unusual
nature of the act resulting In Injury that Is the test
of foreseeability, bu.t whether the result of the act
is within the ambit of the hazards covered by the
duty imposed upon defendant. (Sangco,
Philippine Law on Torts and Damages, Volume
1, p. 113, 1993)
Efficient Intervening Cause
•
An independent intervening cause as one which
is so dlstlnctas to sever the connection of cause
and effect between the negligent act and the
injury. (Bartels v. City of Williston, 629 F.2d 509,
1980)
If an independent cause intervenes, which is of
itself sufficient to produce the result, it is
regarded as proximate cause, and the originator
of the first cause is relieved from liability.
(Michael v. U.S., 338 F.2d 21~. 1964)
Cause/Condition
Distinction between Cause and Condition
The distinction between cause and condition has
now been entirely discredited. In Phoenix
Construction v. IAC, the Court ruled: Many
courts have sought to distinguish between the
active "cause" of the harm and the existing
"conditions" upon which that cause operated. If
the defendant has created only a passive static
condition, which made the damage possible, the
defendant is said not to be liable. But so far as
the fact of causation is concerned, in the sense
of necessary antecedents which have played an
important part in producing the result it is quite
impossible to distinguish between active forces
and passive situations, particularly since, as is
invariably the case, the latter are the result of
'{~
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other active forces which have gone before. The
defendant who spills gasolfne about the
premises creates a "condition," but the act may
be culpable because of the danger of fire. When
a spark ignites the gasoline, the condition has
done quite as much to bring about the fire as the
spark; and since that is the very risk, which the
defendant has created, the defendant will• not
escape responsibility. Even the lapse of a
considerable time during which the "condition"
remains static will not necessarily affect liability;
one who digs a trench in the highway may still
be liable to another who fans into it a monlh
afterward. "Cause" and "condition" still find
occasional mention in the decisions; but the
distinction is now almost entirely discredited. So
far as it has any validity at all, it must refer to the
type of case where the forces set in operation by
the defendant have come to rest in a position of
apparent safety, and some new force
intervenes. But even in such cases, it is not the
distinction between "cause" and "condition"
which Is important but the nature of the risk and
the character of the intervening cause. (Phoenix
Construction v. fAC, G.R. L-65295, 1987)
--- end of topic --------
•
CIVIL LAW
C. NEGLIGENCE
1. Presumptions
Presumption of N,egl/gence •
When driver. is presumed negligent by law
(a) At the time of the mishap, he was violating
any traffic regulation. (Art. 2185)
(b) He had been found gullty or reckless driving
or violating traffic regulations at least twice
within the next preceding two months. (Art.
2185)
Common Carriers
Common carriers, by reason of the nature of
their business, should observe extraordinary
diligence in the vigilance over the goods they
carry (Art. 1733). ·
In case of loss of the goods, the common carrier
ts presumed to have been at fault or to have
acted negligently. (Art. 1735)
In case of death of or injuries to passengers,
common carriers are presumed to have been at
fault or to have acted negligently. (Art. 1756)
Defendant in possession of dangerous
weapons or substances, such as firearms
and poison ·
General Rule: There is prima facie presumption
of negligence on the part of defendant if death or
injury results from such possession
Exception: The possession or use thereof is
indispensable in his occupation or business, the
prima facie presumption will not arise. (Arl.2188)
NOTE: Defendant may still be held liable if
negligence can be established by the plaintiff
without benefit of the presumption.
In a motor vehicle mishap, the owner is solidarily
liable with the drive~;if:
1. he was in the v,ehicle, and
2. could have, r; through due diligence,
prevented the misfortune. (Art. 2184)
A driver is presumed negligent by law if:
(a) He has been found guilty of reckless driving
or violating traffic regulations at least twice
within the next preceding two months.
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(b) At the time of the mishap, he was violating More particularly, when someone enters the
any traffic regulation. (Arts. 2184-2185) property of another with the latter's knowledge
and consent, they have a reasonable
NOTE: Every owner of a motor vehicle shall file expectation of not getting Injured. Thus, the
with the proper government office a bond property owner (or non-owner resident) is
executed by a government-controlled responsible for maintaining a relatively safe
corporation or office, to answer for damages to environment, and s/he may be held liable for
third persons. (Art. 2186) accidents and injuries that occur on his/her
property. Note that the same responsibility is not
Registered Owner Rule owed to trespassers.
'.'"')
\: In motor vehicle mishaps, the registered owner
•
"--·
of the vehicle is considered the employer of the ---- end of topic -------
tortfeasor-driver, and is made primarily liable for
the tort committed by the latter. Insofar as third LEGAL INJURY
persons are concerned, the registered owner of
INJURY ·DAMAGE · · DAMAGES
the motor vehicle is the employer of the
_,,. negligent driver, and the actual employer is
• I
'._ r
considered merely ·as an agent of such owner. Legal Loss, hurt or The recompense
(Fi/car Transport Services v. Esplnas, G.R. No. invasion of a harm which or compensation
~-- legal right results from awarded for the
i,
'--··'
' 174156, 2012)
the injury damage suffered
(("',, (Lagon v. CA
'\· , Defenses of a Registered Owner G.R. No. (Custodio v. (Custodio v. CA
Previous jurisprudence provides that the
ordinary defenses available to an employer
119107,
2005)
CA G.R. No.
116100, 1996)
G.R. No. 116100,
1996)
•
under Art. 2180 of the NCC (i.e., no employer-
employee relationship, employee not acting
within the scope of assigned tasks, and due
-- end of topic ---·-··
diligence in selection and supervision of
employees) are not available to the RO. (MMTC
v. Cuevas, G.R. No. 167797, 2015)

However, in Caravan Travel and Tours v. Abejar

(G.R. No. 170631, 2016), a division of the
Supreme Court held that once the plaintiff
proves (a) that the driver is liable, and (b) the
identity of the RO, it is presumed that all the
,,.. requirements for vicarious liability to attach to
i_ ;
the RO have been proven. That presumption,
'-· however, may be overcome by proof of the
r following defenses:
-...;.,·
1. No employer-employee relationship
between the driver and the RO;
2. The driver/employee was not acting within
scope of assigned tasks;
3. The RO/employer observed due diligence
, in selection and supervision;
~f 4. Unauthorized use of the vehicle: and/or
5. The vehicle was stolen.

Premises Liability Rule

This rule states that it is enough that guests are
injured while inside the hotel premises to make
the hotelkeeper liable. (Makati Shangri-La Hotel
v. Harper, G.R. No. 189998, 2012)

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TABLE ON VICARIOUS LIABILITY

PERSON FOR REQUIREMENTS

PERSON
WHOM FOR VICARIOUS NATURE OF
VICARIOUSLY DEFENSES
LIABLE
VICARIOUSLY LIABILITY TO LIABILITY •
LIABLE ATTACH
. •
Father and
mother exercise
.
joint parental
Child lives in their
authority over
company; AND is
their rninor
under their parental
Parent/s (ioint Children below 18 children. Their
authority (Art.2180) Diligence of a
parental authority (Art. 221, Family liability Is direct
(Art.221, Family good father of a
based on Art. XXX, Code) and primary, not
Code); Tamargo v. family to prevent
Family Code) subsidiary. (Art.
CA, G.R. No. damage
Father, in case of 211, Family
85044, 1992) (Art. 2180;
death or incapacity, Code; Libi v. /AC,
Exconde v.
the mother (Art. G.R. No. 70890,
Capuno, G.R. No.
2180) 1992)
L-10134, ··1957)
Direct and
"Child" lives in their
Children 18 to 21 ~1 primary
company
(Art. 2180, in (Art. 2180 in
(Art.2180, in relation
relation to Art. 236 relation to Art.
to Art. 236, ,i 3, '
113, Family Code) 236, 113, Family
Family Code)
Code)
Principal and
solidary
(Art. 119, Family
Code)

GR: Parents are

Schools, not liable; child
administrators was in school; not
and teachers, and Child is under their Exercised the in their custody
individuals, supervision, proper diligence (Cuadra vs.
Children below 18
entities or instruction or required under the Monfort, G.R. No.
institutions custody at the time particular L·24101, 1970)
(Arts. 218- 219,
engaged in child the tort is committed circumstances
Family Code)
care having (Art. 218, Family (Art. 219, Family EXC: Parents,
special parental Code) Code) judicial guardians
authority over or persons
children exercising
substitute
parental authority
shall be
subsidiarily liable
(Art. 219, Family
~ Godel
Diligence of a
Minors or Under their
good father of a Direct and
incapacitated authority and live in
Guardians family to prevent primary (Art.
persons (Art. their company (Art.
damage (Art. 2180)
2180) 2180) 2180) .
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'
[3 theories]
1. EER (Art.2180)

2. Doctrine of
Apparent Authority
•
or
Ostensible Agency
Elements of the 3 .
theories are not
or "Holding out"
present.
Reliance Due diligence in
Doctors and (Nogales vs. Capitol
the selection
hospital Medical Center, and supervision
employees G.R. No. 142625,
(if EER)
(Ramos v. CA 2006; Professional
G.R. No. 124354, Services Inc. v. Direct and
(Art. 2180(5); primary
1999 and 2002; Agana G.R. No.
Nogales vs.
Nogales v. Capitol 126297, 2007; G.R. (Casumpang v.
Hospitals Capitol Medical
Medical Center No. 126467, 2008; Cortejo, G.R. No.
Center, G.R. No.
G.R. No. 142625, G.R. No. 127590, 171127, 171217,
142625, 2006; & 17122, 2015)
2006; Casumpang 2010) Professional
v. Cortejo, G.R. Services Inc. v.
No. 171127, 3. Doctrine of Agana G.R. No.
171217, & 17122, Corporate 126297, 2007;
2015) Negligence G.R. No.
{hospital is liable for
126467, 2008;
its own negligence;
G.R. No.
not vicariously for 127590, 2010)
the doctor's or
medical personnel's '
I
negligence}
(Professional
Services Inc. v.
Aaana, suore)
Rules:
Public official (PO)
performing Observed· 'i
functions of his diligence of a
Speclal agent - office - State Is good father of a
i.e., one who immune from suit. family to prevent
receives a definite Public official damage
and fixed order or liable under (Art.2180)
commission, Art.2176. Direct and
foreign to the Observed primary
exercise of the PO specially diligence of a (Art. 2180;
State duties of his office commissioned to good father of a Fontanilla v.
if he is a special perform a task family in the Maliaman G.R.
official foreign to his selection and Nos. 55963 &
office - State supervision of 61045, 1991)
(Art. 2180; Merritt liable; PO is a employees
v. GP/, G.R. No. L- special agent. (Fontanilla v.
11154, 1916) Maliaman, G.R.
Private individual No. L-55963,
(Pl) 1989)
commissioned by
the State to
· perform non-
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governmental
r·· functions State
A

\ I
is liable as an
employer.

........ Pl commissioned to
t i perform a special
governmental task
(speclal agent) -
State liable •
'

Employees of
government
offices performing
r :l proprietary
.
·.:_' functions - State
,· . liable as an
., I
employer.
" (Fontanilla v.
,. Maliaman, G.R. No.
L-55963, 1989) .•

,... Student is in the ': Direct and

," I

school premises in ~ j
primary •
pursuance of a
s:_·. . ... l<!gitimate student
:
NOTE: Applies .
,.. .. objective, in the whether the
',
"'!. I Adult pupils and exercise of a institution is
students (for legitimate student academic or not
,..- right, and even in (Amadora v. CA,
T... ~ teachers)
the enjoyment of a supra)
,.
. l Adult apprentices legitimate student
(for heads of privilege, the Basis of liability of
establishments of responsibility of the Teacher was not teacher and head
arts and trades) school authorities negligent. = close
,-:-'. (Art.2180; over the student supervisory
., .. I
Amadora v. CA, continues. Indeed, NOTE: Art.2180 relationship;
Teachers G.R. No. L-47745, even if the student does not apply ability to instill
1988) should be doing when the tort was discipline
Heads of nothing more than not committed by
establishments of relaxing in the a student GR: School is not
If pupil, student or
arts and trades campus in the (Aquinas School liable
apprentice is a
(~ ' minor, apply Art. company of his vs. Sps. lnton,
~ •. J
218, Family Code classmates and G.R. No. 184202, EXC: When it is
friends and enjoying 2011) . being held liable
. !
NOTE: Pupil need the-ambience and as an employer.
not live or board atmosphere of the . (Amadora v. CA,
with the teacher school, he is still supra)
(Palisoc v.Brillates, within the custody
G.R. No. L-29025, and subject to the School has an
1971) discipline of the implied
( . school authorities contractual duty
..» under the to maintain a safe
provisions of Art. environment
2180 (Amadora v. conducive for
CA. G.R. No. L· learnino. If it

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47745, 1988) breaches that

duty through
negligence, it
rnay be held •
liable under Art.
. I
•
2176 (PSBA v.
CA, G.R. No .
.
84698, 1992, in
relation to Air
France vs.
: Carrascoso, G.R.
No. L-21438,
1966).

;,

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D. DAMAGES injured party must be presented. Actual or
[. compensatory damages cannot be presumed
l !
f but must be proved with reasonable degree of
1. General provisions
t (._ ..) certainty. The Court cannot rely on speculation,
'
t
r: CONCEPT
conjecture or guesswork as to the fact and
amount of damages, but must depend upon
,i ) Adequate compensation for the value of loss competent proof that they have been suffered
suffered or profits which obligee failed to obtain and on evidence of the actual amount. If the
~':'"" ..
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Exceptions
proof is flimsy and unsubstantial, no damages
•
will be awarded. (Consolidated Industrial Gases,
1. Law
() 2. Stipulation
Inc. vs. Alabang Medical Center, G.R. No.
181983, 2013)
f~1
'.:.._..- Actual damages shall be construed to include all The claimant has the burden of proof. He must
damages that the plalntiff may show he has establish his case by a preponderance of
: suffered in respect to his property, business,
''- evidence which means that evidence, as a
trade, profession, or occupation, and no other whole, adduced by one side is superior to that of
damages whatever. Actual damages are the other. It is not enough that plaintiff present
compensatory only. They simply make good or an estimated amount. But uncertainty as to the
replace the loss caused by the wrong. (A/ga"a precise amount is not necessarily fatal. Mere
v. Sendejss,G.R. No. L-8385, 1914.). difficulty in the assessment of damages is not
·•x . sufficient reason for refusing to award damages
Indemnification is meant to compensate for the where the right to them has been established
•
injury inflicted and not to impose a penalty. A (PNOC Shipping and Transport Corp v. CA.,
party is entitled to adequate compensation only G.R. No. 107518, 1998).
,.., . for such pecuniary loss actually suffered and
,.;
i..... · duly proved. (PNOC Shipping and Transport When loss need not be proved
Corp v. CA, G.R. No. 107518, 1998) 1. liquidated damages previously agreed
upon; liquidated damages take the place of
2. Kinds of damages actual damages except when additional
damages are incurred
Kinds of Actual or Compensatory Damages 2. If damages other than actual are sought
3. Loss is presumed (ex: loss if a child or
1. General Damage spouse)
,, ' Natural, necessary and logical consequences of 4. Forfeiture of bonds in favor of the
',\
i... ,
)

a particular wrongful act which result in injury; government forthe purpose of promoting
need not be specifically pleaded because the public interest or policy (ex: bond for
law Itself implies or presumes that they resulted temporary stay of alien)
from the wrongful act 5. Award of civil'. indemnity in tort cases or
criminal cases 'where the victim died. This
2. Speclal Damages civil indemnity is in addition to any actual or
Damages which are the natural, but not the compensatory damages that may be
necessary and inevitable result of the wrongful awarded in favor of the victim's heirs.
/· act. (i.e., attorney's fees)
COMPONENT ELEMENTS
REQUISITES
1. Alleged and Proved with Certainty 1. Value of Loss; Unrealized Profit
i. Must be pleaded and proved with
'·, certainty, Value of loss suffered
ii. Must pray for the relief that claim for loss Destruction of things, fines or penalties, medical
be granted and & hospital bills, attorney's fees, interests, cost of
litigation
2. Not Speculative
Plaintiff must prove the loss. For damages to be Loss of earning capacity
recovered, the best evidence obtainable by the

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contract where .detendant acted fraudulently or

MORAL DAMAGES in bad faith. (Art. 2220)
•
CONCEPT In culpa contractual, only in cases of gross
Include: (PBMF·MWSSS) negligence ~mo.unling to bad faith or in wanton
1. Physical suffering disregard of his contractual obligation. In a
2. §esmirched reputation breach of contract of carriage, moral damages
3.. Mental anguish may also be recovered in case of death of a
4. fright passenger.
5. Moral shock
6. Wounded feelings In culpa aquiliana,
7. Social humiliation (a) when the act or omission causes physical
8. ~erious anxiety injuries, or
9. Sentimental value of real or personal (b) when the defendant is guilty bf intentional
property may be considered in adjudicating tort (in this latter case, moral damages may'
moral damages (Art. 2217) be recovered e'ven in loss of or damage to
property). .:i
The social and economic/financial standing of ,•

the offender and the offended party should be
taken into consideration in the computation of
moral damages. (Kieruff v. Court of Appeals,
G.R. No. 99343, 1997)
Moral damages is awarded only to enable the
injured party to obtain means, diversions or
amusements that will serve to alleviate the moral
suffering he has undergone, by reason of
defendant's culpable action and not Intended to
enrich a complainant at the expense of
defendant. (Mayo v. People, G.R. No. 91201,
1991)
WHEN RECOVERABLE
Cases when Moral Damages may be
recovered
1. Criminal offense resulting in physical
injuries
2. Quasi-dellcts causing physical injuries
3. Seduction, abduction, rape or other acts of
lasciviousness
4. Adultery and concubinage
5. Illegal or arbitrary detention or arrest
6. Illegal search
7. libel, slander or other form of defamation
8. Malicious prosecution
9. Acts mentioned in ART. 309 of the RPC
relating to disrespect of the dead and
interference with funeral
10. Acts and actions referred to in Arts. 21, 26,
27, 28, 29, 30, 32, 34 and 35 (Art. 2219)
NOTE: Art.2219 is not an exclusive
enumeration.
Moral damages may also be awarded in cases
of willful injury to property or breaches of
In culpa criminal, When the accused is guilty of
physical injuries, lascivious acts, adultery or
concubinage, illegal or arbitrary detention, illegal
arrest, illegal search, defamation and malicious
prosecution. (Expertravef & Tours, fnc. v. CA,
G.R. No. 130030, June 25, 1999)
Who may recover moral damages
1. The parents of the female seduced,
abducted, raped, or. abused may also
recover under No. 3.
2. Spouse, descendants, -ascendants and
brother and sisters for acts mentioned In
Art. 309 ("Any person who shows
disrespect to the dead, or wrongfully
interferes with a funeral shall be liable to
the family of the deceased for damages,
material and moral.")
Siblings Not Entitled to Moral Damages for
Death of their Brother I Sister
Article 2206 of the Civil Code entitles the
descendants, ascendants, illegitimate children,
and surviving spouse of the deceased
passenger to demand moral damages for mental
anguish by reason of the death of the deceased.
The omission from Article 2206 (3) of the
brothers and sisters of the deceased passenger
reveals the legislative intent to exclude them
from the recovery of moral damages for mental
anguish by reason of the death of the deceased.
lnclusio unius est exctusio alterius. (Sulpicio
Lines, tnc., v. Curso, G.R. No. 157009, March
17, 2010)

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General rule: The plaintiff must allege and
prove the factual basis for moral damages and
I 'r.
1.
I
its causal relation to the defendant's act
f l,..... i 2. Right of plaintiff is violated
f
Exception: Moral damages may be awarded to
the victim in criminal proceedings without the
need for pleading proof of the basis hereof,
Moral damages are mandatory without need of ,
allegation and proof other than the death of the
victim, owing to the fact of the commission of
murder or homicide. (Espineli v. People of the
Philippines, G.R. No. 179535, 2014)
When Moral Damages Awarded Without
Evidence of Injury.
( 1. Rape cases. It is assumed that the victim
has suffered moral injuries (People v. lroy,
,- . G.R. No. 187743, 2010);
2. Murder cases. A vlolent death necessarily
brings about emotional pain and anguish on
the part of the victim's family (People v.
Rarugal, G.R. No. 188603, 2013);
3. Where a broadcast is libelous per se,' the
law implies moral damages (FBNI v. AMEC,
G.R. No. 141994, 2005)
NOTE: In Fillpinas Broadcasting Network v.
c,
\ .. ,_,; AMEC, the Supreme Court held:
A Juridical person is generally not entitled to
moral damages because, unlike a natural
person, it cannot experience physical suffering
or such sentiments as wounded feelings, serious
anxiety, mental anguish or moral shock.
Nevertheless, AMEC's claim for moral damages
,-·. falls under item 7 of Article 2219 of the Civil
:;
:. ~·
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Code. This provision expressly authorizes the
recovery of moral damages in cases of libel,
slander or any other form of defamation. Article
2219(7) does not qualify whether the plaintiff is a
natural or juridical person. Therefore, a juridical
person such as a corporation can validly
complain for libel or any other form of
defamation and claim for moral damages.
(Filipinas Broadcasting Network v. AMEC, G.R.
·, .... ~ No. 141994, 2005),
NOMINAL DAMAGES
Nominal damages are adjudicated in order that
a right of the plaintiff, which has been violated or
Invaded by the defendant, may be vindicated or
recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by
{ . him
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WHEN AWARDEq
Elements: ·
1. Plaintiff has a i'ight
3. Purpose is not to identify but vindicate or
recognize right violated
NOTE: The law presumes damage althOugh
actual or compensatory damages are not
•
proven. They are damages in the name only and
are allowed simply in recognition of a technical
injury based on a violation of a legal right.
Nominal damages cannot coexist with actual or
compensatory damages.
TEMPERATE DAMAGES
Also called Moderate Damages.
More than nominal but less than compensatory
where some pecuniary loss has been suffered
but its amount can't be proved with certainty due
to the nature of the case.
•
In cases where the resulting inju·ry might be
continuing and possible future complications
directly arising from the injury, while certain to
occur are difficult to predict, temperate damages
can and should be awarded on top cf actual or
compensatory damages; in such cases there Is
no incompatlblllty between actual arid temperate
damages. ·
WHEN AWARDED
Requisites:
1. Some pecuniary loss
2. Loss is incapable of pecuniary estimation
3. Must be reasonable
General Rule: Actual Damages cannot be
recovered with temperate damages due to the
nature of the said damages.
Exception: When; the injury Is chronic or
recurring such as in. loss of earnings. (Ramos v.
·court of Appeals, G:R. No. 124354, 1999)
LIQUIDATED DAMAGES
Those agreed upon by the parties to a contract,
to be paid in case of breach thereof
When liquidated damages may be equitably
reduced
(a) Iniquitous or unconscionable
{b) Partial or irregular performance
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Rules governing In case of breach of
contract
Penalty may be imposed by stipulation or
agreed upon by the parties in case of breach of
contract. Such penalty is in the nature of
liquidated damages.
EXEMPLARY DAMAGES
Imposed by way of example or correction for the
public good, in addition to the moral, temperate,
liquidated to compensatory damages; Also
called Corrective Damage
NOTE: Exemplary damages cannot be
recovered as a matter of right; the court will
decide whether or not they should be
adjudicated.
WHEN RECOVERED
1. In Criminal Offenses
Exemplary damages as a part of the civil liability
may be Imposed wtien the crime was committed
with one or more aggravating circumstances.
Such damages are separate from fines and shall
be paid to the offended party.
2. In Quasi-Dellcts
Exemplary damages may be granted if the
defendant acted with gross negligence.
3. In Contracts and Quasi-Contracts
The court may award exemplary damages if the
defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.
In case liquidated damages have been agreed
upon, although no proof of loss is necessary in
order that such liquidated damages may be
recovered, nevertheless, before the court may
consider the question of granting exemplary in
addition to the liquidated damages, the plaintiff
must show that he would be entitled to moral,
temperate or compensatory damages were it not
for the stipulation for liquidated damages.
3. In case of death
DAMAGES IN CASE OF DEATH
(a) In Crimes and Quasi-Delicts Causing
Death
1. Medical & Hospital Bills
2. Damages for death (Minimum:
PS0,000)
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(I I
CIVIL LAW
3. Loss of earning capacity unless
deceased had permanent physical
disability not caused by defendant so
that deceased had no earning capacity •
at time of death .
• 4. Support, if deceased was obliged to
give support (for period not more than
5 years)
5. Moral damages
(b) Death Cau.sed by Breach of Contract by
a Common Carrier
Article 2206 shall also apply to the death of a
passenger caused by the breach of contract by
a common carrier. (See Preceding heading)
GRADUATION OF DAMAGES
Duty of Injured Party
The party suffering loss or injury must exercise
the diligence of a good father of a family to
minimize the damages resulting from the act or
omission in question. (Art.2203)
Rules:
1. Responsibility for fault or negligence under
the Art.2176 is entirely separate and distinct
from the civil liability arising from
negligence under the Penal Code. But the
plaintiff cannot recover damages twice for
the same act or omission of the defendant.
(Art. 2177) ),
2. In quasi-delicts, the contributory negligence
of the plaintiff ;shall reduce the damages
that he may recover. (Art. 2214)
3. In contracts, cuasi-contracts, and quasi·
delicts, the court may equitably mitigate the
damages under circumstances other than
the case referred to in the preceding article,
as in the following Instances:
(a) That the plaintiff himself has
contravened the terms of the contract;
(b) That the plaintiff has derived some
benefit as a result of the contract;
(c) In cases where exemplary damages
are to be awarded, that the defendant
acted upon the advice of counsel;
(d) That the loss would have resulted in
any event;
(e) That since the filing of the action, the
defendant has done his best to lessen
the plaintiff's loss or injury. (Art. 2215)
4. Liquidated damages, whether intended as
an indemnity or a penalty, shall be equitably
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reduced if they are iniquitous or
unconscionable. (Art. 2227)
5. There may be a compromise upon the civil
llablllty arising from an offense; but such
compromise shall not extinguish the public
action for the imposition of the legal
penalty. (Art. 2034)
MISCELLANEOUS RULES
~··
\. . Damages that Cannot Co-Exist
1. Nominal with actual, moral or temperate
damages
2. Actual and liquidated damages
Damages that Must Co-Exist
,.-:·· '
~- . Exemplary with moral, temperate, liquidated
or compensatcry damages
1. One must prove that he is entitled to moral,
temperate or compensatory damages
before the court may consider the award for
exemplary damages. • quasi-delict.
2. No proof of loss is necessary in order that •
liquidated damages rnay be recovered.
However, before the court may consider the
question of granting exemplary in addition
to the liquidated damages, the plaintiff must
show that he would be entitled to moral,
temperate or compensatory damages were
.r:
'·. if not for the stipulation for liquidated
damages
Circumstances when public officers may be held
liable for damages:
1. When a public officer acts with fraud, bad
faith, or gross negligence, in which case ,
s/he may be held liable for a quasi-delict
under Art. 2176
2. In cases of dereliction of duty under Art.
27, where a public servant or employee
refuses or neglects, without just cause, to
perform his official duty;
3. In cases where a public officer or employee
directly or indirectly obstructs; defeats,
violates, or in any manner impedes or
impairs the civil and political rights and
liberties enumerated in Art. 32; and
4. In cases where a member of a city or
municipal police force refuses or fails to
.I..
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render aid or protection to any person in
case of danger to life or property, as
provided in Art. 34 (in these cases, the
member of the police force shall be
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CIVIL LAW
primarily liable for damages, with the city or
municipality being subsidiarily liable).
When Treble Damages are Imposed
1. Scheming to prolong litigation or efforts to
avoid the imposition of a judgment.
2. Appeal made for the sole purpose of delay.
3. Disapproval of a party's good and honest
intentions, . as well as evading a party's
claim for a decade.
4. Defying the orders of the Court and evasion
of duties under the law thus dragging the
case for too long.
5. A counsel trying to resuscitate a client's lost
cause.
6. Initiating another action even after obtaining
a valid and final judgment from a competent
court. (Maglana Rice and Corn Mill, Inc. v.
Tan, 2011) ·
General Rule: Negligence must be proven by •
the plaintiff in an action for damages based on
Exceptions:
(a) When the doctrine of res ipsa toquitur
applies. (BJDC v. Lenuzo, G.R. No.
161151, 2014)
(b) In cases involving violations of statutes,
ordinances, and/or traffic rules or
regulations, where the concept of
negligence per se applies;
(c) When death or injury results from the·
defendant's possession of dangerous
weapons or substances, except when the
defendant proves that his possession of
dangerous · weapons or substances is
indispensable to his business (Art. 2188);
(d) In cases involving vicarious liability, where
a presumption of negligence arises against
parents, guardians, employers, the State,
and teachers or heads of establishments of
arts and trades in the cases enumerated in
Art. 2180
Damages awardable in case of Death.
1. Civil indemnity, which is the award given to
the heirs as a form of compensation for the
death of the· victim. Its grant is mandatory,
and does not require proof other than the
fact of death as the result of the crime or
quasi-delict, and the fact that the accused
was responsible therefor. The NCC fixes a
minimum amount of P3,000 while case law
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fixes the maximum amount at P100,000.

(Bersamin, People v. Oandasan, 2016)
2. Actual damages (e.g., for hospitalization,
funeral expenses, etc.). If the amount of
these expenses is not fully substantiated
through receipts, temperate damages may •
be awarded in lieu of actual damages.
3. Actual damages for LEC (Art. 2206 [1]).
4. Support for a period not exceeding 5 years •
to persons whom the deceased was obliged
to support (Art. 2206 [2]); and
5. Interest, which may be awarded in the
discretion of the court (Art. 2211; People v.
Taguibuya, G.R. No. 180497, 2011)
6. Moral damages (but only to the spouse,
legitimate and illegitimate ascendants and
descendants) (Art. 2206 [3]); and
7. Exemplary damages.

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