Training & Convention Division

University of the Philippines Law Center

SUGGESTED ANSWERS TO THE

2019 BAR EXAMINATIONS IN
CIVIL LAW

PART I

A.1.

In January 2018, Mrs. A, a married woman on her sixth (6 th) month

of pregnancy, was crossing a street when she was suddenly hit by a car
being recklessly driven by Mr. X. As a result, Mrs. A sustained serious
injuries and further, suffered an unintentional abortion. Mrs. A was
hospitalized for two (2) months, during which she incurred P400,000.00
in medical fees. Her expenses were all duly substantiated by official
receipts. During the two (2)-month period of her confinement, she was
unable to report for work and earn any salary, which was established at
the rate of P50,000.00 per month. Mrs. A then filed a civil case for
damages against Mr. X.

(a) Based on the case filed by Mrs. A, what is the source of Mr. X's
obligation to her as a result of his acts? Explain. (2 %)

SUGGESTED ANSWER:

Mr. X’s obligation arose from a quasi-delict, one of the five

sources of obligations (Art. 1157, Civil Code). The Code also provides
that whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done and such
fault or negligence, is called a quasi-delict (Article 2176 of the Civil
Code). Here, Mr. X, inrecklessly driving a car, hit Mrs. A, thereby
causing serious injuries and unintentional abortion to the latter.

(b) May Mrs. A claim actual damages from Mr. X? If so, how much
can Mrs. A claim? Explain. (2%)

SUGGESTED ANSWER:

Yes, Mrs. A can claim actual damages amounting to P500,000.

Article 2199 of the Civil Code provides that except as provided by law
or by stipulation, one is entitled to actual or compensatory damages
only for such pecuniary loss suffered by him as he has duly proved.

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 The medical fees totaling P400,000 were duly substantiated by official
receipts. Article 2200 of the Civil Code also provides that
indemnification for damages shall comprehend not only the value of
the loss suffered, but also that of the profits which the obligee failed to
obtain. The rate of her salary was established at P50,000 per month;
thus, her inability to report for work and earn salary for two months
entitled her to a total of P100,000. Mrs. A, therefore, can claim her
expenses for medical fees and two months’ worth of salary the total of
which is P500.000.

(c) May Mrs. A claim damages on behalf of her unborn baby?

Explain. (3%)

SUGGESTED ANSWERS:

No, Mrs. A cannot claim damages on behalf of her unborn baby.

Birth determines personality. The Court has held that an action for
pecuniary damages on account of personal injury or death pertains
primarily to the one injured, and if no action for such damages could
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be instituted on behalf of the unborn child on account of the injuries it

received, no such right of action could derivatively accrue to its parents
or heirs [Geluz v. Court of Appeals, G.R. No. L-16439, July 20, 1961].

ALTERNATIVE ANSWER:

Yes, Mrs. A can claim damages on behalf of her unborn baby.

Under Art. II Sec. 12 of the 1987 Constitution, the State is obliged to
protect equally the life of the mother and the life of the unborn from
conception. This provision should be applied in favor of the unborn
child, and therefore modifies the Geluz v. Court of Appeals ruling.

ANOTHER ALTERNATIVE ANSWER:

Yes, Mrs. A can claim damages on behalf of her unborn baby.

The Court has held that a conceived child, although yet unborn, is
given by law a provisional personality of its own for all purposes
favorable to it, as explicitly provided in Art. 40 of the New Civil Code,
which includes being a recipient of donations under Art. 742 of the
New Civil Code, as well as support. A claim for damages in favor of
the unborn child should also prosper [Quimiguing v. Icao, G.R. No.
26795, July 31, 1970].

(d) What must Mrs. A prove if she wants to recover moral damages
from Mr. X? (2%)

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 SUGGESTED ANSWER:

Mrs. A must prove that she suffered physical suffering, mental

anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, or similar injury. She must
also prove that Mr. X’s reckless driving produced the physical injury in
natural and continuous sequence, unbroken by any efficient
intervening cause, produces injury, without which she would not have
suffered the same, that is the reckless driving is the proximate cause of
the injury. Moral damages may be recovered in quasi-delicts causing
physical injuries (Article 2219 of the Civil Code).

ALTERNATIVE ANSWER:

Mrs. A must prove the following: (1) that she suffered physical
injuries; (2) that Mr. X committed a culpable act or omission; (3) that
the wrongful act or omission of Mr. X is the proximate cause of the
damages she sustained; and (4) that X’s act or omission is either a
criminal offense resulting to physical injuries or a quasi-delict causing
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physical injuries [Mendoza v. Gomez, G.R. No. 160110, June 18, 2014].

(e) Assuming that Mrs. A is awarded actual and moral damages by

the trial court, may she also claim interest if the final and executory
judgment award remains unpaid by Mr. X? If so, when should the
interest be reckoned and what is the rate of interest? Explain. (3%)

SUGGESTED ANSWER:

Yes, Mrs. A may also claim interest. The interest should be 6%

per annum from the finality of judgment until its satisfaction. The
Court held in Nacar v. Gallery Frames [G. R. No. 189871, August 13,
2013], interpreting BSP MB Circular No. 799, that when the judgment
of the court awarding a sum of money becomes final and executory, the
rate of legal shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be the equivalent to a
forbearance of credit.

A.2.

H and W were married in 1990. H, being a member of the Armed

Forces of the Philippines (AFP), was deployed to a rebel-infested area in
1992. Since then, W has not heard from her husband, H.

One day, the AFP informed W that H had been declared missing
since 1995. In consequence, W diligently pursued all available means to
ascertain her husband's whereabouts, but to no avail.

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 Firmly believing that H had already died, W filed a claim before the
AFP in 2008 for the death benefits of the missing serviceman. However,
the AFP, despite being cognizant of H' s status, would not act on the
claim, contending that H could not be presumed dead unless a judicial
declaration to this effect is issued by the proper court.

In what instance/s is a judicial declaration of presumptive death

necessary? In this case, is the contention of the AFP correct? Explain. (3%)

SUGGESTED ANSWER:

Judicial declaration of presumptive death is necessary only for

the purpose of contracting a subsequent marriage. Article 41 of the
Family Code provides that for the purpose of contracting a subsequent
marriage contracted by a person who had a well-founded belief that
his/her prior spouse who had been absent for four consecutive years
was already dead, the spouse present must institute a summary
proceeding for the declaration of presumptive death of the absentee.
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The contention of the AFP is incorrect.

The Court has declared that the AFP can decide claims of death
benefits of a missing soldier without requiring the claimant to first
produce a court declaration of the presumptive death of such soldier
and the claimant need only present any "evidence" which shows that
the concerned soldier had been missing for such number of years
and/or under the circumstances prescribed under Articles 390 and 391
of the Civil Code. Article 391 of the Civil Code provides that a person
in the armed forces who has taken part in war and has been missing for
four years shall be presumed dead for all purposes. Here, W informed
the AFP that her husband had been declared missing since 1995, 23
years before the filing of her claim in 2018. There is, thus, no need for
a judicial declaration of presumptive death before the AFP can act on
the claim of W [Tadeo-Matias v. Republic, G.R. No. 230751, April 25,
2018].

A.3.

Mr. Reyes is legally married to Mrs. Reyes. During the subsistence

of their marriage, Mr. Reyes cohabited with another woman, Ms. Cruz.
Out of Mr. Reyes and Ms. Cruz's illicit relationship, a child named C was
born. In C's birth certificate, "Cruz" appears as the child's surname,
although Mr. Reyes expressly acknowledged C as his child.

In 2018, Mr.Reyes and Ms. Cruz ended their relationship. Mr. Reyes
thereafter lodged a petition in court for parental custody and change or

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 correction of C's surname in the child's birth certificate from "Cruz" to
"Reyes." At that time, C was only ten (10) years old.

(a) Should Mr. Reyes be granted custody of C? Explain. (2.5%)

SUGGESTED ANSWER:

No, Mr. Reyes should not be granted custody because C is an

illegitimate child, who shall be under the parental authority of his
mother (Article 176, Family Code).

The Family Code provides that children conceived and born

outside a valid marriage are illegitimate (Article 165). In this case, C
was conceived and born out of the illicit relationship of Mr. Reyes and
Ms. Cruz who are not married; thus, C is an illegitimate child of Mr.
Reyes. The Court has held that the recognition of an illegitimate child
by the father could be a ground for ordering the latter to give support
to, but not custody of the child. The Court has further declared that
since the law explicitly confers to the mother sole parental authority
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over an illegitimate child, it follows that only if she defaults can the
father assume custody and authority over the minor and that only the
most compelling of reasons, such as the mother’s unfitness to exercise
sole parental authority, shall justify her deprivation of parental
authority and the award of custody to someone else [Briones v Miguel,
G.R. No. 156343, October 18, 2004]. There is no showing that Ms. Cruz,
C’s mother was unfit to exercise sole parental authority over C;
therefore, she cannot be deprived of C’s custody.

(b) Can Mr. Reyes validly compel the change or correction of C's surname
from "Cruz" to "Reyes"? Explain. (2.5%)

SUGGESTED ANSWER:

No, Mr. Reyes cannot compel the change of surname from “Cruz”
to “Reyes”. The Court has held that Article 176 of the Family Code
gives illegitimate children the right to decide if they want to use the
surname of their father or not. The Court further declared that it is not
the father or the mother who is granted by law the right to dictate the
surname of their illegitimate children; hence, Mr. Reyes cannot validly
compel the change or correction of C’s surname [Grande v. Antonio,
G.R. No. 206248, February 18, 2014].

If they are still minors, however, the decision to use the father’s
surname may be exercised for them by their mother pursuant to the
latter’s parental authority over illegitimate children. In this case, the
father cannot compel the mother to register the child under his
surname.

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 A.4.

F, a Filipina, married J, a Japanese, in the Philippines. After three

(3) years, they had a falling out and thus, separated. Soon after, F
initiated a divorce petition in Japan which was not opposed by J because
under Japanese law, a grant of divorce will capacitate him to remarry. F's
divorce petition was then granted by the Japanese court with finality.

May the legal effects of the divorce decree be recognized in the

Philippines, and consequently, capacitate F to remarry here? Explain.
(3%)

SUGGESTED ANSWER:

Yes, the legal effects of the divorce decree may be recognized in

the Philippines, and consequently, capacitate F to remarry.

In the case of Republic v. Manalo [G.R. No. 221029, April 24,

2018], the Court held that under Paragraph 2 of Article 26 of the Family
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Code, a Filipino citizen has the capacity to remarry under Philippine

law after initiating a divorce proceeding abroad and obtaining a
favorable judgment against his or her alien spouse who is capacitated
to remarry. Here, F initiated a divorce petition in Japan and obtained a
favorable judgment which capacitated her Japanese husband to
remarry. Applying Paragraph 2 of Article 26 of the Family Code as
interpreted in Republic v. Manalo, the legal effects of the divorce
obtained by F may be recognized in the Philippines which may
capacitate F to remarry here.

[Note: The legal effects of the divorce obtained by F may be recognized in

the Philippines; however, it may not capacitate her to remarry as a
matter of enforcement of said divorce. Recognition is different from
enforcement, the latter being subject to defenses].

A.5.

X and Y were in a live-in relationship for the longest time, and were
already blessed with a child, Z. They finally decided to get married on
March 15, 2020. When X's parents found about the news, they were
thrilled and thus, donated in favor of Z, the family heirloom, particularly,
a gold ring valued at P250,000.00, which X and Y orally accepted on
behalf of their minor child. One day, X and Y got into a serious quarrel,
which resulted in them setting aside their marriage plans.

(a) Is the donation to Z valid? Explain. (3%)

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 SUGGESTED ANSWER:

No, it is a void donation. This is an ordinary donation inter vivos,

not a donation proper nuptias. The Civil Code provides that 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. A piece of jewelry like the family heirloom
here which is a gold ring, valued at P250,000.00, is a personal property.
Here, the acceptance was made orally; therefore, the donation is void
(Article 748).

(b) Assuming that the donation to Z is valid, may X's parents

revoke the donation on the ground that the marriage of X with
Y did not push through? Explain. (3%)

SUGGESTED ANSWER:

No, because it is an ordinary donation, not a donation propter

nuptias. The ground that the marriage did not push through may only
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be raised to revoke donations by reason of marriage which is defined

by Article 126 of the Family Code, as those which are made before its
celebration, in consideration of the same and in favor of one or both of
the future spouses (Art. 83, FC). Here, the donation was not made in
favor of one or both of the future spouses, but in favor of their child.
X's parents, therefore, cannot revoke the donation on the ground that
the marriage of X with Y did not push through.

A.6.

Name at least two (2) exclusions from the following property regimes as
enumerated under the Family Code:

(a) Absolute community of property (2%)

SUGGESTED ANSWER:

[Any 2 of the 3 may be considered]:

(1) Property acquired during the marriage by gratuitous title by

either spouse, and the fruits as well as the income thereof, if
any, unless it is expressly provided by the donor, testator or
grantor that they shall form part of the community property;
(2) Property for personal and exclusive use of either spouse.
However, jewelry shall form part of the community property;
(3) Property acquired before the marriage by either spouse who
has legitimate descendants by a former marriage, and the
fruits as well as the income, if any, of such property. (Article
92 of the Family Code)

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 (b) Conjugal partnership of gains (2%)

SUGGESTED ANSWER:

[Any 2 of the 4 may be considered]:

(1) Property which is brought to the marriage as his or her

own;

(2) Property which each acquires during the marriage by

gratuitous title;

(3) Property which is acquired by right of redemption, by

barter or by exchange with property belonging to only one
of the spouses; and

(4) Property which is purchased with exclusive money of the

wife or of the husband. (Article 109 of the Family Code)

A.7.
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Believing that he owned a certain parcel of land and completely

unaware of any defect in his title thereto, Mr. A started to build a house
thereon. When Mr. P, the real owner of the land learned of Mr. A's
actions, Mr. P immediately demanded Mr. A to leave the premises.
However, Mr. A refused to leave, and instead, asserted that as a builder
in good faith, Mr. P is obliged to sell the land to him.

(a) Is the claim of Mr. A correct? Explain. (3%)

SUGGESTED ANSWER:

No, Mr. A is not correct. Mr. A who was completely unaware of

any defect in his title, is a builder in good faith. Mr. P who prompted
Mr. A’s possession also acted in good faith. Article 448 applies in this
case, which provides that only the owner of the land on which
anything has been built, sown or planted in good faith, has the right to
appropriate as his own the works, sowing or planting, after payment of
the indemnity for necessary expenses and useful expenses where
applicable, OR to oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper rent; however, the
builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. The law grants
said rights to the owner of the land. The builder in good faith, Mr. A in
this case, cannot compel Mr. P, the owner of the land, to choose which
right to exercise, for the option belongs to the owner alone.

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 ALTERNATIVE ANSWER:

No, Mr. A is incorrect. He is a builder in bad faith. When Mr. A

started building his house, he was completely unaware of any defect in
his title and therefore, was, at the outset, a builder in good faith but
when Mr. P immediately demanded Mr. A to leave the premises before
he completed the house, which Mr. A refused to do and he continued
building since he persisted in the belief that his title had no fatal
defect, he became a builder in bad faith. Mr. P, the real owner, who
immediately asked him to leave the premises, acted in good faith. He
has by law the option of acquiring the house without paying for it (Art.
499, Civil Code).

(b) Assuming that Mr. P all the while, knew but did not object to Mr. A's
construction of the house on his property, may Mr. A compel Mr. P to
purchase the said improvement due to Mr. P's bad faith? Explain. (3%)

SUGGESTED ANSWER:
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Yes, Mr. A may compel Mr. P to purchase the improvements.

Article 454 of the Civil Code provides that when the landowner acted
in bad faith and the builder, planter or sower proceeded in good faith,
the provisions of article 447 shall apply. Article 453 of the same Code
provides that it is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and
without opposition on his part. Article 447 provides that the owner of
the land who makes thereon, personally or through another, plantings,
constructions or works with the materials of another, shall pay their
value; and, if the landowner acted in bad faith, the owner of the
materials may remove them in any event, with a right to be
indemnified for damages. The landowner, having known and without
opposing the construction made by Mr. A is deemed to have acted in
bad faith; Article 447, therefore, applies and Mr. P shall pay the value
of the improvement; i.e., the value of the materials, plus damages.

ALTERNATIVE ANSWER:

Since Mr. A is a builder in bad faith for continuing to build

despite being asked to leave the premises, and Mr. P also acted in bad
faith for not objecting to Mr. A’s construction of his house on his
property, they shall be treated to have both acted in good faith (Article
453 of the Civil Code). The bad faith of Mr. A is neutralized by the bad
faith of Mr. P; thus, Article 448 of the Civil Code shall apply. The two
options still belong to Mr. P, not Mr. A.

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 A.8.

Mr. E leased a piece of land from Mr. F to be used for his sawmill
business for a period of ten (10) years. Consequently, Mr. E placed heavy
machineries there on to be used for his aforementioned business, with the
intention of removing them after the expiration of the lease period.

Are Mr. E's heavy machineries considered real properties under the
Civil Code? Explain. (3%)

SUGGESTED ANSWER:

No, they are movables. Machinery which is movable in its nature

only becomes immobilized when placed in a plant by the owner
thereof in a land or building which is also owned by him, for an
industry or works which may be carried on in a tenement and which
tend directly to meet the needs of said industry or works, but not when
so placed by a tenant, a usufructuary, or any person having only a
temporary right, unless such person acted as the agent of the owner, for
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instance, if the lease contained a stipulation that any useful

improvement which the lessee introduces on the leased property shall
pertain to the lessor at the termination of the lease. Here, the heavy
machineries were placed by Mr. E on a piece of land leased from Mr. F
with the intention of removing them after the expiration of the lease
period. Being movable in nature, said machineries were not deemed
immobilized [Davao Saw Mill Co. Inc. v. Castillo, G.R. No. L-40411,
August 7, 1935].

A.9.

Ms. U is a usufructuary of a piece of land owned by Mr. L. During

the existence of the usufruct, Ms. U introduced various useful
improvements on the land. Upon termination of the usufruct, Mr. L
requested Ms. U to remove the said improvements, but Ms. U refused,
demanding instead that Mr. L reimburse her the value of the same.

(a) What is a usufruct? (2%)

SUGGESTED ANSWER:

A usufruct gives a right to enjoy the property of another with the

obligation of preserving its form and substance, unless the title
constituting it or the law otherwise provides (Article 562, Civil Code).

The Court has further declared that a usufruct, in essence, is

nothing else but simply allowing one to enjoy another’s property. It is
also defined as the right to enjoy the property of another temporarily,
including both the jus utendi and the jus fruendi, (plus, impliedly, the

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 jus possidendi) with the owner retaining the jus disponendi or the
power to alienate the same [Moralidad v. Sps. Pernes, G.R. No. 152809,
August 3, 2006].

(b) Is Ms. U's demand proper? Explain. (3%)

SUGGESTED ANSWER:

No, the demand is not proper. The Civil Code provides that the
usufructuary may make on the property held in usufruct any useful
improvements, or expenses for mere pleasure, which he may deem
proper, provided he does not alter its form or substance; but he shall
have no right to be indemnified therefor. He may, however, remove
such improvements should it be possible to do so without injury to the
property (Article 579, Civil Code).

Ms. U, thus, has no right to be indemnified for any improvements

which she might have made on the land held in usufruct. She may only
remove them should it be possible to do so without injury to the
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property.

A.10.

Village H and Village L are adjoining residential villages in a

mountainous portion of Antipolo City, Rizal, with Village L being lower
in elevation than Village H. In an effort to beautify Village H, its
developer, X, Inc., constructed a clubhouse which included an Olympic-
sized swimming pool and an artificial lagoon on a portion of land
overlooking Village L.

During the monsoon season, the continuous heavy rains caused

Village H's swimming pool and artificial lagoon to overflow, resulting
into a massive spillover that damaged various properties in Village L.
Aggrieved, the homeowners of Village L filed a complaint for damages
against X, Inc. In defense, X, Inc. contended that pursuant to the Civil
Code, Village L, as the lower estate, was obliged to receive the waters
descending from Village H, the higher estate. Hence, it cannot be held
liable for damages.

Is X, Inc.'s position tenable? Explain. (3%)

SUGGESTED ANSWERS:

No, X Inc.’s position is not tenable. The Water Code provides that
lower estates are only obliged to receive waters which naturally and
without intervention of man descend from higher estates (Art. 50,
Water Code of the Philippines). The Code also provides that the owner
of the higher estate cannot make works which will increase the natural

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 flow. Therefore, Village L, as the lower estate, was only obliged to
receive the waters which naturally and without intervention of man
descend from higher estates and not those which are due to the
massive spillover from constructions made by X, Inc. (Article 537 of the
Civil Code).

X, Inc, therefore, is liable for damages.

END OF PART 1
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 PART II

B.11.

Mr. R is the registered owner of a parcel of land located in Cebu

City covered by Transfer Certificate of Title (TCT) No. 1234 issued in
1955. Since his acquisition of the lot, Mr. R and his family had been in
continuous, open, and peaceful possession thereof. Mr. R died in 1980,
resulting in the land being transferred in the names of his heirs, i.e., A, B,
and C, who became registered owners thereof as per TCT No. 5678.
During the entire time, said land had never been encumbered or
disposed, and that its possession always remained with them.

Sometime in 1999, A, B, and C wanted to build a concrete fence

around the parcel of land, but they were opposed by Mrs. X, who started
claiming ownership over the same property on the strength of a Deed of
Absolute Sale purportedly entered into by her with Mr. R during the time
that he was still alive. Aggrieved, A, B, and C intend to file a complaint
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for quieting of title against Mrs. X.

(a) What are the substantive requisites for the action to prosper? Do
they obtain in this case? Explain. (3%)

SUGGESTED ANSWER:

For an action to quiet title to prosper, the following requisites

must obtain in the case:

(1) the plaintiff or complainant has a legal or an equitable

title to or interest in the real property subject of the
action; and

(2) the instrument, record, claim, encumbrance or

proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal
efficacy.

The requisites for an action to quiet the title obtain in this case,
since A, B, and C are the registered owners of the parcel of land, having
inherited the same from their father Mr. R, and the Deed of Absolute
Sale, which cast a cloud on their title may be shown to be invalid or
inoperative [Heirs of Delfin v. Heirs of Bacud, G.R. No. 187633, April 4,
2016].

(b) Within what period should A, B, and C file the complaint for
quieting of title? Explain. (2%)

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 SUGGESTED ANSWER:

The action for quieting of title does not prescribe, because the
plaintiffs are in possession of the land [Heirs of Uberas v. CFI, October
30, 1978].

(c) Assuming that Band C are residing abroad, may A, without the
knowledge of Band C, file the complaint for quieting of title on
behalf of all the heirs? Explain. (2%)

SUGGESTED ANSWER:

Yes, A may file the complaint, provided that he files the same for
the co-ownership. Anyone of the co-owners may bring such an action
in ejectment (Article 87 of the Civil Code), even without joining all the
other co-owners as co-plaintiffs, because the suit is deemed to be
instituted for the benefit of all, assuming A wins the case.
Parenthetically, if A loses in the action to quiet title, it will if not affect
B and C, because the Court did not acquire jurisdiction over their
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persons. The Court further held that if the action is for the benefit of
the plaintiff alone, such that he claims the possession for himself and
not for the co-ownership, the action will not prosper [Celino v. Heirs of
Alejo, G.R. No. 1618117, July 30, 2004].

B.12.

D, an Overseas Filipino Worker, was on his way home to the

Philippines after working for so many years in the Middle East. He had
saved PI00,000.00 in his local savings account which he intended to use to
start up a business in his home country. On his flight home, tragedy
struck as a suicide bomber blew up the plane. All the passengers,
including D, died. He left behind his widowed mother M; his common-
law wife, W, who is the mother of his twin sons, T and S; and his brother,
B. He left no will, no debts, no other relatives, and no other properties
except the money in his savings account.

Who are the heirs entitled to inherit from D and how much should
each receive? Explain. (5%)

SUGGESTED ANSWER:

D’s heirs entitled to inherit from him are:

M (his mother) – P50,000 and T and S (his twin sons) – P25,000

each.

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 D died intestate and his heirs are the mother (legitimate
ascendant) and his twin sons (illegitimate). The mother gets one-half of
his estate and his two illegitimate sons get the other half (Article 991).

W, the “common-law wife” is not an heir ab intestato because she

is not a legal spouse. She is merely a partner in a non-marital union.

B.13.

M, single, named his sister N in his will, as a devisee over a certain

parcel of land that he owned, with the obligation of preserving the land
and transferring it, upon N's death, to her illegitimate daughter O, who
was then only a year old.

Is the condition imposed on N to preserve the land and to transmit it

upon her death to O a valid case of fideicommissary substitution?
Explain. (3%)

SUGGESTED ANSWER:
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Yes, this is a valid case of fideicommissary substitution. Article

863 of the Civil Code provides that a fideicommissary substitution by
virtue of which the fiduciary or first heir instituted is entrusted with
the obligation to preserve and to transmit to a second heir the whole or
part of the inheritance, shall be valid and shall take effect, provided
such substitution does not go beyond one degree from the heir
originally instituted. First, there is the absolute obligation imposed
upon the fiduciary N to preserve and to transmit to the
fideicommissary O the part of the inheritance. Second, O, the
fideicommissary, as the fiduciary’s illegitimate daughter is one degree
from the fiduciary. Furthermore, O’s illegitimate status is of no
moment, because Art. 863, referring to the “heir” does not distinguish
between legitimate from illegitimate relationships.

B.14.

Prior to his death, H, married to W, with children X, Y, and Z,

executed a holographic will entirely written, dated, and signed by him. In
his will, H instituted W, X, and Y as his heirs, and consequently, made
testamentary dispositions in their favor. H, however, expressly
disinherited Z on the ground that the latter once filed a civil case against
him in order to collect a particular sum of money he previously owed Z.

(a) Was the disinheritance of Z proper? Explain. (3%)

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 SUGGESTED ANSWER:

No, it is not a proper ground to disinherit. Article 916 of the Civil

Code provides that disinheritance can be effected only through a will
wherein the legal cause therefor shall be specified. Article 919 of the
same Code provides that the following shall be sufficient causes for
the disinheritance of children and descendants, legitimate as well as
illegitimate. That Z once filed a civil case against him in order to collect
a particular sum of money he previously owed is not one of the
grounds for a valid disinheritance.

(b) Assuming that the disinheritance of Z was improper, how will it

affect the institution of heirs and testamentary dispositions
made in H's will? Explain. (3%)

SUGGESTED ANSWER:
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Article 918 of the Civil Code provides that disinheritance for a

cause which is not one of those set forth in this Code, shall annul the
institution of heirs insofar as it may prejudice the person disinherited;
but the devises and legacies and other testamentary dispositions shall
be valid to such extent as will not impair the legitime.

B.15.

Mr. P offered to sell his Manila Polo Club shares to Ms. Q for
P2,500,000.00. Ms. Q accepted on the condition that their agreement will
not take effect until after one (1) year. Mr. P then acceded and both of
them shook hands. Excited about the prospect of acquiring Mr. P's
shares, Ms. Q approached the former and offered to pay him an earnest
money equivalent to 1% of the purchase price, which Mr. P accepted.
After one (l) year, Ms. Q approached Mr. P seeking the enforcement of
their agreement for Mr. P to sell his shares to her. Mr. P refused to honor
their agreement, claiming that the same was covered by the Statute of
Frauds because it was not reduced into writing and hence, unenforceable.

Is the position of Mr. P correct? Explain. (3%)

SUGGESTED ANSWER:

No, the position of P is incorrect. The Statute of Frauds only

applies to purely executory contracts; partial performance removes the
contract from the ambit of the Statute of Frauds and not to partially or
completely executed contracts. Article 1482 of the Civil Code provides
that whenever earnest money is given in a contract of sale, it shall be
considered as part of the price and as proof of the perfection of the

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 contract. The payment of earnest money, such as in this case, is
tantamount to partial execution of the contract which precludes the
application of the Statute of Frauds. The contract has been partially
performed and a benefit was already accepted when the seller accepted
earnest money from the buyer [Article 1403 (2)(d); Averia v. Averia,
G.R. No. 141877, August 13, 2004; Mactan-Cebu International Aiport
Authority v. Tudtud, (2008)].

B.16.

C Corp. entered into a contract with D, Inc. for the construction of

the latter's production warehouse. In consideration thereof, D, Inc. was
obliged to pay C Corp. the amount of P50,000,000.00 within a period of
one (1) month from the time of the project's completion. To secure the
payment of the said sum, D, Inc. entered into a surety agreement with S
Company.

After more than a month from the completion date of the project, C
Corp. remained unpaid. Claiming that it was suffering from serious
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financial reverses, D, Inc. asked C Corp. for an extension of three (3)

months to pay the P50,000,000.00 it still owed, to which C Corp. agreed.
However, after more than three (3) months, D, Inc. still refused to pay.
Hence, C Corp. proceeded to collect the above sum from the surety, S
Company.

F or its part, S Company refused the claim and raised the defense
that the extension of time granted by C Corp. to D, Inc. without its
consent released it from liability.

(a) Will the defense of S Company against the claim hold water?
Explain. (3%)

SUGGESTED ANSWER:

Yes, the defense holds. The Court has held that the provisions of
the Civil Code on Guarantee, other than the benefit of excussion, are
applicable and available to the surety. One of the provisions of the
Civil Code on Guarantee is Art. 2079 which provides that an extension
granted to the debtor by the creditor without the consent of the
guarantor extinguishes the guaranty. Here, the parties entered into a
surety agreement; thus, the extension granted without the consent of S
Company extinguished the suretyship [Autocorp Group vs. Intra Strata
Assurance Corporation, G.R. No. 166662, June 27, 2008; 556 SCRA 250].

(b) Assuming that S Company instead refused the claim on the

ground that C Corp. has yet to exhaust D, Inc. 's property to

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 satisfy the claim before proceeding against it, will this defense
prosper? Explain. (2%)

SUGGESTED ANSWER:

No, the defense will not prosper. Art. 2047 provides that if a
person binds himself solidarily with the principal debtor, the
provisions of Section 4, Chapter 3, Title I of this Book shall be
observed and in such case the contract is called a suretyship. Under
Article 2059, the excussion shall not take place if he (the guarantor) has
bound himself solidarily with the debtor, S Company, therefore,
cannot refuse the claim on the ground that C Corp. has yet to exhaust
D, Inc.'s property to satisfy the claim before proceeding against it.

B.17.

In 2015, O, the original registered owner of a 300-square meter

property covered by Original Certificate of Title (OCT) No. 0-1234,
appointed F as its caretaker. A year after, while O was abroad, F
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surreptitiously broke open O's safe and stole the duplicate copy of the
said OCT. F then forged a Deed of Absolute Sale and made it appear that
O sold the property to him. Consequently, F was able to have OCT No. 0-
1234 cancelled and in lieu thereof, a new title, Transfer Certificate of Title
(TCT) No. T-4321, was issued in his name.

A few months after, F offered the property for sale to X. After

conducting the required due diligence to verify the title of F, and finding
no occupant in the property during ocular inspection, X signed the
contract of sale, and thereupon, fully paid the purchase price. A few days
later, X was able to obtain TCT No. T- 5678 under his name.

When O discovered F's fraudulent acts upon his return in 2017, O

immediately filed a complaint for reconveyance against F and X,
principally pointing out that F merely forged his signature in the Deed of
Absolute Sale purportedly made in F's favor and thus, F could not have
validly transferred the title thereof to X. Consequently, he sought the
return of the subject property to him.

(a) Will the prayer of O for the return of the subject property
prosper? Explain. (3%)

SUGGESTED ANSWER:

No, the prayer of O will not prosper, because X purchased the

land from an apparent owner in good faith and for value. Section 53 of
P.D. 1529 provides that in all cases of registration procured by fraud,
the owner may pursue all his legal and equitable remedies against the

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 parties to such fraud without prejudice, however, to the rights of any
innocent holder for value of a certificate of title. The Court in the case
of Heirs of Abalon v. Andal [G.R. No. 183448, June 30, 2014], defined an
innocent purchaser for value as one who buys the property of another
without notice that some other person has a right to or interest therein
and who then pays a full and fair price for it at the time of the purchase
or before receiving a notice of the claim or interest of some other
persons in the property.

(b) Assuming that O could no longer recover the subject property in

view of X's registration thereof in his name, may a claim against
the Assurance Fund pursuant to the provisions of the Property
Registration Decree be instituted? Explain. (3%)

SUGGESTED ANSWER:

Yes, a claim against the Assurance Fund may be instituted.

Section 95 of P.D. 1529 provides that a person who, without negligence
on his part, sustains loss or damage, or is deprived of land or any estate
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or interest therein in consequence of the bringing of the land under the

operation of the Torrens system arising after original registration of
land, through fraud or in consequence of any error, omission, mistake
or misdescription in any certificate of title or in any entry or
memorandum in the registration book, and who by the provisions of
this Decree is barred or otherwise precluded under the provision of
any law from bringing an action for the recovery of such land or the
estate or interest therein, may bring an action in any court of competent
jurisdiction for the recovery of damages to be paid out of the
Assurance Fund.

ALTERNATIVE ANSWER:

The property is already registered under the name of X, an

innocent purchaser for value. The registration of the innocent
purchaser for value’s title is a condition sine qua non in order to
properly claim against the Assurance Fund. This is because it is only
after the registration of the innocent purchaser for value’s title (and not
the usurper’s title which constitutes a breach of trust) can it be said that
the claimant effectively sustains loss or damage, or is deprived of land
or any estate or interest therein [Manuel v. RD for Legazpi City, G.R.
No. 224678, July 3, 2018].

B.18.

In light of a new business venture, Mr. A entered into a lease

contract with Mr. B involving one of the latter's warehouses. One day,

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 Mr. B, who was then encountering financial difficulties, approached Mr.
A and sought for a loan, which Mr. A readily granted to him. In order to
secure the loan obligation, Mr. B mortgaged the leased warehouse in
favor of Mr. A. In addition, Mr. B executed a promissory note in favor of
A, wherein prior demand was waived by him.

When Mr. B defaulted on his loan obligation, Mr. A simply stopped

paying rentals due to Mr. B on the ground that legal compensation had
already set in up to the concurrent amount. Furthermore, since there was
still a balance due on the promissory note, Mr. A foreclosed the real
estate mortgage over Mr. B's property, without any prior demand
furnished to Mr. B.

Aggrieved, Mr. B opposed the foreclosure due to the lack of prior

demand, contending that the waiver of prior demand was stipulated in
the promissory note and not in the mortgage instrument. Mr. B likewise
argued that when Mr. A invoked legal compensation between the unpaid
rentals and the loan arrearages, it amounted to a novation that resulted in
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the extinguishment of the loan contract between them. As such, the real
estate mortgage, being a mere accessory contract to the principal loan,
was necessarily extinguished.

(a) May Mr. A validly claim legal compensation? Explain. (2%)

SUGGESTED ANSWER:

Yes, Mr. A may validly claim legal compensation. The Civil Code
provides that when all the requisites mentioned in Article 1279 are
present, compensation takes effect by operation of law, and
extinguishes both debts to the concurrent amount, even though the
creditors and debtors are not aware of the compensation (Article 1290,
Civil Code).

All requisites obtain in this case. For compensation to be proper, it

is necessary:

(1) That each one of the obligors be bound principally,

and that he be at the same time a principal creditor of
the other;
(2) That both debts consist in a sum of money, or if the
things due are consumable, they be of the same kind,
and also of the same quality if the latter has been
stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or
controversy, commenced by third persons and

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 communicated in due time to the debtor (Article 1279,
Civil Code).

(b) May Mr. A validly foreclose on the real estate mortgage 
even
without prior demand to Mr. B? Explain. (2%)

SUGGESTED ANSWER:

Yes, Mr. A may validly foreclose the mortgage. The Court has
declared that a provision on waiver of notice or demand is legal and
valid. Although the Civil Code provides that one incurs in delay or is
in default from the time the obligor demands the fulfillment of the
obligation from the obligee (Article 1169), the law expressly provides
that demand is not necessary under certain circumstances, and one of
these circumstances is when the parties expressly waive demand. Since
Mr. B waived the requirement of prior demand in the promissory note,
he was considered in delay or in default when he failed to pay the loan
obligation [Sps. Agner, v. BPI Family Savings Bank, Inc., G.R. No.
182963, June 3, 2013; BPI v. CA, 523 Phil. 548 (2006)].
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(c) Is Mr. B's claim of novation correct? Explain. (2%)

SUGGESTED ANSWER :

No, Mr. B’s claim is incorrect. A novation is express when the

new obligation declares in unequivocal terms that the old obligation is
extinguished and it is implied when the new obligation is
incompatible with the old one on every point. The test of
incompatibility is whether the two obligations can stand together, each
one with its own independent existence. Here there is neither express
nor implied novation [Arco Pulp and Paper Co., Inc. v. Lim, G.R. No.
206806, June 25, 2014].

ALTERNATIVE ANSWER:

No Mr. B’s claim is incorrect, because there was no new contract

entered into between Mr. A and Mr. B. When there is neither a valid
new contract nor a clear agreement between the parties to a new
contract, there is no novation. Without the new contract, the old
contract is not extinguished by novation [Country Bankers Insurance
Corp. v. Lagman, G.R. No. 165487, July 13, 2011]. Besides, legal
compensation is another mode of extinguishment of the obligation
different from novation. Here, what took place is partial legal
compensation; hence, Mr. B is still in default as to the unpaid loan
arrearages.

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 B.19.

Mr. A entered into a lease contract covering one of his commercial

buildings with XYZ Company, a partnership composed of X, Y, and Z, as
lessee, for use as an office space. Upon failure to receive the rental
payments when they fell due, Mr. A immediately sought payment of the
same from X, Y, and Z, asserting that the individual partners are
solidarily liable together with the partnership for its debts.

X, Y, and Z disagreed with Mr. A's contention, arguing further that

in any event, rentals should not be paid up until Mr. A makes the
necessary arrangements for the repair of the defective electrical wirings
in the office that caused power outages and hence, made it difficult, if not
impossible, for them to conduct their usual business operations.

Rule on the parties' respective arguments. (5%)

SUGGESTED ANSWER:
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Mr. A’s contention that the individual partners are solidarily

liable together with the partnership for partnership debts is untenable.
Article 1768 of the Code provides that the partnership has a juridical
personality separate and distinct from that of each of the partners.
Article 1816 of the Civil Code further provides that all partners,
including industrial ones, shall be liable pro rata with all 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.

The contention of X, Y, Z that the rentals should not be paid up

until Mr. A. makes the necessary arrangements for the repair of the
defective electrical wirings in the office that caused power outages is
correct. Article 1658 of the Civil Code provides that the lessee may
suspend the payment of the rent in case the lessor fails to make the
necessary repairs or to maintain the lessee in peaceful and adequate
enjoyment of the property leased. Repair of defective electrical wirings
are necessary repairs.

ALTERNATIVE ANSWER:

Mr. A’s contention that the individual partners are solidarily

liable together with the partnership for partnership debts is untenable.
X, Y, Z are not the real parties in interest against whom a claim for
payment of the unpaid lease rentals may be made. According to the
Court in the case of Saludo, Jr. v. Philippine National Bank [G.R. No.
193138, August 20, 2018], the general rule under Article 1816 of the Civil
Code is that partnership assets are primarily liable for the contracts

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 entered into in the name of the partnership and by a person authorized
to act on its behalf. All partners - in this case, X, Y, and Z - are only
liable pro rata with all their property after all the partnership assets
have been exhausted. This is because it is the partnership, an entity
possessing of a juridical personality separate from its partners, that
entered into the contract of lease. Said partnership has concomitant
rights and obligations with respect to the transactions it enters into for
which the partners may not be made liable.

B.20.

Distinguish the following:

(a) Contract of sale and contract to sell (2%)

SUGGESTED ANSWER 1:

A contract of sale may be absolute or conditional (Art. 1458 (2),

Civil Code). A contract to sell is a kind of conditional sale.
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In an absolute sale, title to the property passes to the vendee

upon the delivery of the thing sold. In both contracts to sell and
contracts of conditional sale, title to the property remains with the
seller despite delivery. Both contracts are subject to the positive
suspensive condition of the buyer’s full payment of the purchase price
or the fulfillment of the condition.

SUGGESTED ANSWER 2:

In an absolute sale, title to the property passes to the vendee

upon the delivery of the thing sold.

In a contract of conditional sale, the buyer automatically acquires

title to the property upon full payment of the purchase price. This
transfer of title is "by operation of law without any further act having
to be performed by the seller."

In a contract to sell, transfer of title to the prospective buyer is not

automatic. "The prospective seller [must] convey title to the property
[through] a deed of conditional sale [Olivarez Realty Corporation And
Dr. Pablo R. Olivarez V. Benjamin Castillo, G.R. No. 196251, July 9,
2014].

(b) Interruption and tolling of prescription of actions (2%)

SUGGESTED ANSWER:

The interruption of the prescriptive period by written

extrajudicial demand means that the said period would commence

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 anew from the receipt of the demand [Overseas Bank of Manila v.
Geraldez, 94 SCRA 937 (1979)]

Article 1155 of the Civil Code provides that the "prescription of

actions is interrupted" inter alia, "when there is any written
acknowledgment of the debt by the debtor." This simply means that
the period of prescription, when interrupted by such a written
acknowledgment, begins to run anew; and whatever time of limitation
might have already elapsed from the accrual of the cause of action is
thereby negated and rendered inefficacious. The effect of the
interruption spoken of in Article 1155 is to renew the obligation, to
make prescription run again from the date of the interruption.
[Philippine National Railways vs. National Labor Relations
Commission, 177 SCRA 740 (1989)]

In Overseas Bank of Manila v. Geraldez, the Supreme Court ruled

that tolling merely suspends the period that has already elapsed.
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END OF PART II

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