2019 BAR EXAMINATIONS IN

CIVIL LAW

PART 1

A.1.

In January 2018, Mrs. A, a married woman on her sixth (6) 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, in recklessly 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. 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 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. Il 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. leao, G.R. No. 26795. July 31, 1970]. 

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

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-deliets 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 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 Nacur  w. 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.

Hand W were married in 1990. 11, 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. 

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 II’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. 

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 y: 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 Cas 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 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 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 y 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 – 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. 

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 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 deeree 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 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%) 

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 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): 

  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;

 Property for personal and exclusive use of either spouse. However, 

jewelry shall form part of the community property;

 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) 

(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. 

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 appiies 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. 
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, know but did not object to Mr. Als 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: 

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. 

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 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 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
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 11. 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 II’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 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 I –

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 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 Care 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%) 

SUGGESTED ANSWER: 

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

(c) Assuming that Band C are residing abroad, may A. without the knowledge of Band , 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 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 P100,000.00 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. 

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 devisce 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 a valid case of
fideicommissary substitution? Explain. (3%) 

SUGGESTED ANSWER: 

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 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 bis 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%) 

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 II’s will? Explain. (3%) 

SUGGESTED ANSWER: 

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 (1) 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 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 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 Corp. has yet to exhaust D,
Inc.’s property to 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 was abroad, F surreptitiously
broke open O’s sure 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
naine 

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 T’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 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 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 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, 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 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
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)].  

(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. Lugman, 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. Bis still in default as to the unpaid loan
arrearages. 

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: 

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 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. 

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 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 Railway’s 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. 

– END OF PART II –